In a recent judgment, Dreymoor Fertilizers v. mvTheoforos-1,
the Bombay High Court (Sriram J.) has held that a claimant, suing in tort for economic
loss, must establish either legal ownership or possessory title over the
relevant property at the time of loss. Without going into the correctness of
the decision in the specific facts before the Court, it is respectfully
submitted that some of the observations in the judgment may require reconsideration. In particular, the learned Single
Judge held (para 21.4), following The
Aliakmon [1986] AC 785 and The Wear
Breeze [1969] 1 QB 219:
the Bombay High Court (Sriram J.) has held that a claimant, suing in tort for economic
loss, must establish either legal ownership or possessory title over the
relevant property at the time of loss. Without going into the correctness of
the decision in the specific facts before the Court, it is respectfully
submitted that some of the observations in the judgment may require reconsideration. In particular, the learned Single
Judge held (para 21.4), following The
Aliakmon [1986] AC 785 and The Wear
Breeze [1969] 1 QB 219:
“The law was and always had been that an action for negligence in
respect of loss or damage to goods could not succeed unless plaintiff was, at
the time of tort complained of, owner of goods or person entitled to possession
of them. The duty of care is owed only to the owner of the goods or the person
entitled to possession…”
respect of loss or damage to goods could not succeed unless plaintiff was, at
the time of tort complained of, owner of goods or person entitled to possession
of them. The duty of care is owed only to the owner of the goods or the person
entitled to possession…”
With respect, one wonders whether
the law is actually as clear as is supposed. English Courts themselves have
moved away from the apparent rigidity of this exclusionary rule. In Shell v. Total [2010] EWCA Civ 180, for
instance, the Court of Appeal specifically held that neither the Aliakmon nor the Wear Breeze in fact concluded this point. Shell, who had neither
possessory title nor legal ownership (which vested in the trustee), was held to
have title to sue on the basis of beneficial ownership. Whether Shell can be applied in Indian law
(where the general view has been that the concept of double ownership does not
exist – the only owner is the legal owner) may perhaps be controversial.
However, Shell does at the very least
explain that neither of the two decisions cited by Sriram J in fact concludes
the issue.
the law is actually as clear as is supposed. English Courts themselves have
moved away from the apparent rigidity of this exclusionary rule. In Shell v. Total [2010] EWCA Civ 180, for
instance, the Court of Appeal specifically held that neither the Aliakmon nor the Wear Breeze in fact concluded this point. Shell, who had neither
possessory title nor legal ownership (which vested in the trustee), was held to
have title to sue on the basis of beneficial ownership. Whether Shell can be applied in Indian law
(where the general view has been that the concept of double ownership does not
exist – the only owner is the legal owner) may perhaps be controversial.
However, Shell does at the very least
explain that neither of the two decisions cited by Sriram J in fact concludes
the issue.
Further, cases prior to the Aliakmon
indicate that title to sue can be maintained in economic loss cases even
without legal ownership or possessory title to the relevant property. Interested
readers may refer to the discussions in Shell,
paras 116 to 144. These cases were not
considered by the learned Single Judge of the Bombay High Court.
indicate that title to sue can be maintained in economic loss cases even
without legal ownership or possessory title to the relevant property. Interested
readers may refer to the discussions in Shell,
paras 116 to 144. These cases were not
considered by the learned Single Judge of the Bombay High Court.
It is respectfully submitted that
the decision requires further consideration, at least insofar as it purports to
bring in a strict exclusionary rule into Indian law.
the decision requires further consideration, at least insofar as it purports to
bring in a strict exclusionary rule into Indian law.