Administration of the Territory of Papua and New Guinea v China Navigation Ltd [1967- 68] PNGLR 239 (1 December 1967)

Sea Carriage- Loss of goods unshipped under Collector’s Permit

The defendant carrier shipped the plaintiff’s goods from Sydney to Port Moresby. On arrival the goods were unshipped and landed under a Collector’s permit pursuant to provisions of the Custom’s Ordinance 1951-1962. The goods were placed in a place of security approved by the collector. While in this storage a portion of the goods were unlawfully taken.
The plaintiff commenced an action against the carrier claiming damages for breach of contract of carriage by sea alleging failure to keep safely and take care of the cargo. The defendant submitted that the loss arose after the completion of the discharge of the cargo from the ship. The Hague Rules were applicable to the bills of lading but any liability under those rules arose from the time the goods were loaded until they are unshipped from the vessel. The parties had also included an exemption in the bill of lading limiting the liability of the defendant once the goods were unshipped. The defendant relied on s.69 of the Custom’s Ordinance 1951-1962 which stated: “Goods unshipped and landed under a Collector’s permit shall be placed by, and at the expense of, the master or owner of the ship or the pilot or owner of the aircraft from which they were unshipped, in a place of security approved by the Collector and shall, until lawfully removed from that place, be at the risk of the master or owner of the ship or the pilot or owner of the aircraft as if they had not been unshipped.”
DECISION: Claim dismissed.
HELD: Section 69 must be read in the context of the Custom’s Ordinance 1951-1962. The risk being referred to in s.69 is liability to duty owed under the Ordinance. The Ordinance cannot have the effect of imposing a liability on the carrier over and above and in direct contradiction to those liabilities contained in the contract of carriage.

Belae v Markwarth Shipping Company Ltd [1981] SBHC 10; [1980-1981] SILR 218 (23 October 1981)

Sea Carriage- Cargo Receipt not a contract of carriage for the purposes of the
Carriage of Goods by Sea Act.

The Appellant had goods dispatched to himself on a vessel operated by the Respondent. The seller of the goods handed the goods over to the Respondent for shipping to the Appellant. On receipt of the goods, the Respondent gave the seller a document entitled ‘Cargo Receipt’. It was agreed that in arranging the shipment of the goods the seller acted as an agent for the Appellant. When the vessel arrived at the location of the Appellant some of the merchandise had gone missing. The appellant issued a writ of summons.
At the hearing the Magistrate found in favour of the defendant carrier. The carrier relied on a limitation clause printed on the back of the Cargo Receipt which provided that the shipper must notify the carrier of a loss within one month of shipment. The Magistrate found that the Cargo Receipt did not incorporate the terms of the contract between the parties as that document was not brought to the attention of the shipper or his agent before the contract was concluded. However, the Magistrate gave judgement for the carrier on the basis of the time limitation set out in the Carriage of Goods by Sea Act (chapter 103). The shipper appealed.
DECISION: Appeal allowed.
HELD: The Cargo Receipt was not a contract of carriage as defined by the Carriage of Goods by Sea Act, and thus the defence of limitation was not available to the carrier. A bill of lading as defined by the act is a document of title and the Cargo Receipt expressly stated that it did not constitute a bill of lading or a document of title to the goods.

Burns Philp (South Seas) Company Ltd v Marine Pacific Ltd [1979] FJCA 4; Civil Appeal No 07 of 1979 (25 July 1979) aff’g.

Burns Philp (South Sea) Company Ltd v Marine Pacific Ltd [1979] FJSC 9; [1979] 25 FLR 57 (16 January 1979).

Sea Carriage- Bill of Lading- Contract for Carriage of Goods by Sea- Deck cargo
lost at sea; excluded by Bill of Lading

The plaintiff contracted with the defendant to ship cargo from Suva to Labasa. The cargo was carried on the deck of a barge and when the barge was damaged during the voyage, the cargo was lost. The bill of lading was stamped with a clause stating: “cargo carried on deck at shipper’s risk without responsibility for loss or damage howsoever caused”. Condition 26 of the bill of lading provided that “all goods shipped as deck cargo to be carried at owner’s risk”. The bill of lading contained a clause subjecting it to the rules in the Sea Carriage of Goods Ordinance Cap. 207. The plaintiff claimed a breach of contractual duty by the defendant in failing to ensure that the cargo was properly secured, and in failing to deliver the cargo. The plaintiff also claimed a breach of duty under the Sea Carriage of Goods Ordinance. The defendant denied the claims and claimed protection of the exclusion clause inserted by the parties inthe bill of lading.
DECISION: Plaintiff’s claim dismissed.
HELD: The Court said that the bill of lading did stipulate that the rules in the Ordinance did apply. As a result, Condition 26 of the bill of lading on its own would be without effect- by virtue of the application of Article III of the rules which defines the responsibilities and liabilities of the parties. However, the rules apply to “goods” defined as “goods, wares, merchandise and articles of every kind whatsoever, except live animals and cargo which by the contract of carriage is stated as being carried on deck and is so carried”. Thus to escape the operation of the rules the goods must not only be carried on deck, but it must be stated in the bill of lading that the goods are to be carried on deck. The stamped clause in this case fit this exception to the application of the rules, and effectively limited the liability of the carrier. The plaintiff argued that the stamped clause was not wide enough to exclude negligence, and that negligence must be expressly included in the wording of the clause. The court reasoned that the effect of the clause was to change the liability of the carrier from that of a common carrier to a carrier only under an obligation to take reasonable care. There had been no fundamental breach of contract, and to hold the defendant liable would be to deprive the exclusion clause of all of its content.
APPEAL: The plaintiff appealed the decision on the grounds that the lower court should have taken a stricter interpretation of the exclusion clause; and that the defendant had failed to prove that it was not guilty of any fundamental breach. The appeal was dismissed. The plaintiff had not pled fundamental breach. As to the appellant’s argument that the onus was on the respondent to show what had happened to the goods, the Appeal Court found that the appellant had already stated in its Statement of Claim that the goods had been washed overboard.
Failure to deliver the goods per se did not suffice to show fundamental breach without evidence that the loss had been caused by some act outside of the contract of carriage. As to the lower court’s interpretation of the clause, the Appeal Court agreed that the Ordinance did not apply to these goods because of the stamped clause on the bill of lading. The clause was an express stipulation in the contract of affreightment which effectively altered the liability of the carrier. The words were wide enough to encompass negligence; and because of other limits to liability clauses contained in the bill of lading the clause would be without effect if it did not include negligence.

Danzas Pty Ltd v Williams & Gosling Ltd [1994] FJHC 113; Hbc0276.91s (7 September 1994)

Sea Carriage- Bill of Lading- Waybill- Custom- exceptional C.O.D. consignment requires forewarning

The plaintiff and defendant are freight forwarding companies; the plaintiff in Australia and the defendant in Fiji. The parties had a longstanding business relationship. In this instance the plaintiff took delivery of leather from Italy and shipped it to Fiji. The shipment was consigned to the defendant under cover of a waybill. With the shipment were 2 further waybills issued by the plaintiff and naming the Italian suppliers as the shippers and Island Furniture and the 3rd party as consignees. The latter waybills contained special instructions- there was to be C.O.D. payment before the goods were released. There were additional written instructions as to the required C.O.D. payment on the waybill.
The consignments went to Island Furniture without payment. The leather was made into furniture which was sent to Australia and subsequently Island Furniture went into receivership. The plaintiff issued proceedings against the defendant seeking damages for breach of contract and negligence. The defendant denied liability, but in case of liability sought indemnity from the 3rd party on the basis that the leather shipment had been consigned to the 3rd party.
DECISION: Judgement for the plaintiff for 75% of claim; 3rd party claim dismissed.
HELD: The plaintiff and defendant were bound contractually by an agency relationship. On this basis the defendant owed to the plaintiff a duty of care in tort and contract. The court found that the defendant had in fact not complied with the instructions on the waybill and had breached its duty to the plaintiff in contract and in tort. However, the court also found that C.O.D. consignments are very rare in Fiji and therefore the plaintiff should have forewarned the defendant about the exceptional consignment. For this reason the plaintiff was found partly responsible for its loss. The 3rd party claim failed on the pleadings. The defendant based its claim on the 3rd party ordering the goods but should have based its claim on the 3rd party’s assignment of the goods after it had accepted consignment from the defendant.

Finch v Seafreight Pty Ltd [1976] PGNC 23; [1976] PNGLR 440 (6 October 1976)

Sea Carriage- Loss in transit- Protective provisions of the Sea Carriage of Goods Act 1951- Onus of proof

The plaintiff shipped 2 crates of personal possessions from Loloho to Port Moresby on one of the defendant’s ships. The goods were lost. The plaintiff sought damages for breach of duty of carriage, storage and delivery of goods by sea. A judgement in default was entered against the defendant. On the assessment of damages the defendant argued that its liability was limited by Art. IV r 5 in the 2nd schedule of the Sea Carriage of Goods Act 1951.
DECISION: For the plaintiff
HELD: The court looked to the definition of “carriage of goods” in the Sea Carriage of Goods Act 1951. The period covered was from the time the goods were loaded until the goods were discharged from the ship. The onus was on the defendant to show that the loss occurred during this period in order to come within the clause and limit their liability. Because a default judgement had been entered the defendant could not seek to limit its liability by reliance on the exclusion clause in the Bill of Lading.

Hauhaea v Laurabada Shipping Services Ltd [2005] PGDC 31; DC200 (13 July 2005)

Sea Carriage- Bill of Lading- Action for loss of goods- Onus

The plaintiff arranged with the defendant company to ship his goods on two occasions. On both occasions a portion of the shipment was not received by the plaintiff and recorded as lost. The plaintiff sought to recover for these losses on the contract of carriage contained in the Bill of Lading. The complainant argued that the goods were not lost before loading or after discharge from the ship.
DECISION: Claim dismissed.
HELD: Clause 6 of the Bill of Lading expressly limits the liability of the defendant to losses incurred during the time that the goods were on the ship. As such the onus is on the plaintiff to prove that the loss occurred during the period from when the goods were loaded to the time the goods were discharged as per the Sea Carriage of Goods Act 1951. The plaintiff failed to discharge the onus.

Hunt v Australasian United Steam Navigation Company Ltd [1919] FJSC 1; [1919] 2 FLR 72 (1 January 1919); aff’d on appeal to Privy Council (17 June, 1921) LRAC 1921, vol. 2, 351.

Maritime Torts- Negligence and Breach of duty- Cargo damaged as a result of malfunctioning insulating apparatus; Seaworthiness of vessel implied warranty in bill of lading

The plaintiff shipped a load of fruit from Fiji to Australia. On arrival the bananas which had been carried in the insulating chamber of the vessel were damaged and the plaintiff suffered damage as a result. The plaintiff alleged that the insulating machinery was not operating properly. The bill of lading implied a warranty of seaworthiness and the plaintiffs claimed for damages for negligence and breach of duty.
DECISION: Damages awarded to the plaintiff.
HELD: By section 7(1) of Ordinance No. 1 of 1926 every bill of lading has an implied warranty that the ship is seaworthy at the beginning of the voyage. To recover the plaintiff must satisfy the court that the fruit was shipped in good condition and properly packed. The defendant must satisfy the court that the insulating apparatus was in good working order. The court found that the insulating apparatus was not in working order
and this went to the seaworthiness of the vessel. The bill of lading stipulates that the plaintiff must give notice of his claim within 7 days of arrival at the port of discharge. This clause did not apply because the damage was due to the unseaworthiness of the vessel. The bill of lading contained no stipulation as to seaworthiness so that was implied by s.7(1). In that case the express terms of the bill of lading did not apply to the implied contract.

International Watersport Management Ltd v Pearl Creations Company Ltd [2002] TOCA 7; CA 10 2002 (23 July 2002)

Sea Carriage- Charter- Authority of master to contract for the carriage of goods in the course of the business of the vessel.

The appeal arose out of the spoiling of a cargo of live oysters carried by a vessel owned by the appellant. The respondent chartered the appellant’s vessel to transport the oysters. At the trial it was established that the duration of the voyage as well as the temperature were crucial to the preservation of the cargo of live oysters. The respondent spoke with the master of the vessel who stated that the voyage could be made in 8-10 hours overnight. The respondent then met with the managing director of the appellant and arranged for the charter and the payment. The lower court found that the duration of the voyage was not part of the oral contract between the appellant and respondent. Prior to the voyage the master arranged for pilotage for his arrival at his destination in 10 hours. The lower court inferred that the duration of the voyage and the pilotage had been left by the appellant for the master to settle and once settled became terms of the contract between the parties. The owner of the vessel appealed.
DECISION: Appeal dismissed.
HELD: The owner could not claim the freight and at the same time repudiate the terms on which the cargo had been received. The owner was aware that the master would arrange pilotage on arrival and therefore duration of the voyage. It is settled law that the master has the authority to contract for the carriage of goods in the course of the business of the vessel.

Maharaj v Burns Philip (SS) Company Ltd [1994] FJHC 56; Hbc0178j.89s (3 June 1994)

Sea Carriage- Company which arranges shipment has no duty of care outside of contract.

The defendant company arranged for the shipment of the plaintiff’s vehicle from Suva to Sydney. The vehicle was extensively damaged on the voyage and the plaintiff brought a claim for damages for negligence and for breach of contract.
DECISION: Claim dismissed.
HELD: The plaintiff did not have a claim in tort. The liability arose out of the contract and there was no duty of care owed outside of the contract. The plaintiff was an ‘arranger’ only by the terms of the contract, and was not liable for the failings of the shipper.

Pimco Shipping Pty Ltd v Moeder, Hermann and Moeher Trading Pty Ltd [1987] PGNC 57; [1987] PNGLR 427 (23 December 1987)

Sea Carriage- Sea Carriage of Goods Act- limitation period- indemnity proceedings barred if claim barred

The carrier of cargo sought to be indemnified by the owner of the ship in respect of a judgement brought against him for damages lost for goods in transit. The owners of the goods in the original action brought the action against the ship owners severally or jointly, the named ship owners being the plaintiff and 3rd defendant in the present action. At the time of the loss the 1st and 2nd defendants were negotiating with the plaintiff for the purchase of the vessel. At the time of the loss the court found that the company had not yet been formed and the 1st and 2nd defendants were the owners and personally potentially liable. The defendants relied on the Sea Carriage of Goods Act (c 261) Art. III r 6 wherein a suit for loss and damages to goods must be brought within one year of the loss.
DECISION: Action dismissed.
HELD: The plaintiff’s action is based on the claim of the owners of the goods and that action was not brought against the 1st and 2nd defendant. The action is out of time pursuant to the limitation provision found in the Sea Carriage of Goods Act. A cause of action for indemnity depends on the support of liability on the part of the indemnitor. A claim by the cargo owner against the 1st and 2nd defendant would be barred at this time therefore the cause for indemnity against these parties is also barred. For success in the present action, the plaintiff should have joined the 1st and 2nd defendants in the action by the cargo owners.

Rabaul Stevedores Ltd v Seeto [1984] PGNC 43; [1984] PNGLR 248; N483 (5 October 1984)

Bill of Lading- exemption clause- stevedores performing services of contract protected

The plaintiff’s goods were shipped in a container. The container was taken to the wharf shed and unpacked by the stevedores. While the plaintiff’s goods were in the shed, some went missing. At trial the court found the stevedores and Harbours Board liable for the loss. The defendants appealed. The stevedores argued that even if negligence or breach of bailment had been proved against them they were exempted from liability under clause 5 of the bill of lading which purported to exempt sub-contractors, servants and agents from liability.
DECISION: Appeal allowed
HELD: It is settled law that the exclusion clause in the bill of lading can apply to the stevedores even though they were not parties to the contract of carriage. The bill of lading brings into existence a bargain which is capable of becoming mutual between the consignor and the stevedore made through the carrier as the agent. Therefore the exemption clause protects stevedores performing services under that contract.

Stettin Bay Lumber Company Pty Ltd v Arya Ship Management Ltd [1995] PGSC 7; SC488 (29 September 1995)

Sea Carriage- Action for loss of goods- Jurisdiction- agreement as to jurisdiction in bill of lading does not extend to letter of indemnity

In the original hearing leading up to this appeal the plaintiff/respondent commenced proceedings in the National Court seeking a Declaration that the defendant/appellant was liable to indemnify the plaintiff in accordance with a letter of indemnity. A ship was chartered by the plaintiff/respondent to carry a cargo of logs belonging to the defendant/appellant. At the time the ship sailed for Japan a letter of indemnity was signed by an officer of the appellant. The cargo was lost off the coast of Japan. Following the loss the parties agreed to have all issues concerning the loss or damage to the cargo determined according to Japanese law in Japan. On the basis of this agreement the appellant submitted that all issues concerning loss or damage were to be determined according to Japanese law in Japan, and sought a stay of the proceedings commenced by the plaintiff/respondent in the National Court. That stay was denied and that is the subject of this appeal.
DECISION: Appeal denied.
HELD: The dispute at issue existed under the letter of indemnity. The plaintiff/respondent had made a claim under the letter of indemnity which was denied and that gave rise to the commencement of proceedings in the National Court. The court found that the plaintiff’s action was distinct from any action based on the bill of ladingthe issues of who was liable for damaged cargo due to breaches of a bill of lading might not be the same as the issues of who was liable under a letter of indemnity. The agreement which bound the parties to have their claim determined according to Japanese law did not extend to the letter of indemnity. That agreement on jurisdiction related to the cause of action for loss of cargo due to breaches of contract of carriage, and was distinct from the plaintiff/respondent’s claim against the defendant/appellant pursuant to a letter of indemnity. The appellant/defendant is a PNG company and the letter of indemnity which gave rise to the cause of action was created and executed in PNG and thus prima facie governed by PNG law.

Walters v Kimbe Shipping & Transport Pty Ltd [1999] PGDC 19; DC65 (3 September 1999)

Sea Carriage- failure to properly document shipment

The plaintiffs shipped cargo from Kimbe to Lae. When they enquired about the shipment at the first defendant’s shipping company in Kimbe they were told to bring the cargo to the harbour the next day between 7 a.m. and 4 p.m.. The plaintiff was given a document by the defendant shipping company to allow access into the Harbour Board gate. The plaintiffs delivered their cargo that same evening at 7 p.m. The cargo was loaded onto the vessel. The ship, owned by the second defendant, sailed the next day. The cargo was not off-loaded at Lae but went on to Moresby and Alotau. The plaintiff went to Lae one week after the cargo was shipped from Kimbe. The plaintiff paid the freight charges at that time and was told that the cargo had not been unloaded at Lae. The plaintiffs brought an action in negligence claiming that the first defendant had failed to prepare and issue sufficient and proper documentation in the form of a bill of lading. The plaintiff claimed that the second defendant failed to include the plaintiff’s cargo on the manifest list, failed to inform the stevedoring company to off-load the cargo, and failed to properly check the cargo hold.
DECISION: Claim dismissed.
HELD: It is customary to pay for freight charges prior to shipping a piece of cargo from port to port. There is no liability where the bailor has not complied with standard practice. The plaintiffs had disregarded instructions to come to the office the next day during business hours. There was no mistake on an oral contract- freight charges should have been paid prior to shipping. Failing that the plaintiff had a duty to meet the cargo when it arrived in Lae. The cargo was not properly documented because of the plaintiff’s failure to pay freight charges. The plaintiff did not complete the documentation regarding payment of freight charges which would have included his cargo entry on to the inward cargo manifest and the issuance of a bill of lading.

Wani v Consort Express Lines [2003] PGDC 5; DC93 (11 July 2003)

Sea Carriage- Limitation period

The plaintiff brought a claim against the defendant for compensation for damage to cargo transported by the defendant. The defendant applied for a motion to dismiss based on the plaintiff’s failure to institute proceedings within the statutory time limit required by Art. 111.6 of the Schedule of the Sea Carriage Act c.261.
DECISION: Application to dismiss granted.
HELD: Suit must be brought within one year after delivery of the goods. This claim was filed more than 2 years after delivery.