EMERY AIR FREIGHT CORPORATION v MERCK SHARPE & DOHME

EMERY AIR FREIGHT CORPORATION v MERCK SHARPE & DOHME - [1999] NSWCA 415 - NSWCA 1999 case summary — Zoe

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1 MASON P: The second respondent Merck and Co Inc. consigned 28 drums of pharmaceutical chemical to the first respondent, Merck Sharpe & Dohme (Australia) Pty Limited. Somewhere en route from Newark, New Jersey to South Granville, New South Wales, one drum was damaged by puncturing. The respondents sued the appellant, the international freight forwarder that received the goods in Newark and arranged for their shipment. In the Commercial Division Hunter J gave judgment in the respondents' favour in the sum of $375,085.23 plus costs. 2 Judgment in the respondents' favour was based upon a cause of action stemming from the (unamended) Warsaw Convention (the Convention), found in schedule 1 to the Civil Aviation (Carriers' Liability) Act 1959 (Cth). Within its sphere of operation, the Convention provides an exclusive remedy in respect of death or injury to passengers and damage to or loss of baggage or cargo. A plaintiff suing under the Convention enjoys a number of procedural advantages, but the cause of action is also hedged about with limitations favouring "carriers" involved in international carriage by air. 3 Many of the issues litigated before Hunter J were abandoned during the trial or are no longer pressed. 4 This appeal concerns the appellant's invocation of Art 22(2) to the Convention which, if applicable, would limit its liability to 250 French francs per kilogram of cargo weight. On this basis, damages would be A$12,163.07, in contrast to the actual loss which was A$305,662.23, plus interest to date of judgment. 5 Before Hunter J, the appellant failed in limiting its liability because Art 9 relevantly provides that: if the air waybill does not contain all the particulars set out in Article 8(a)-(i) inclusive and (q), the carrier shall not be entitled to avail himself of the provisions of this Convention which exclude or limit his liability. 6 Article 8 provides that the air waybill shall contain various particulars, including: (b) the place of departure and of destination; (c) the agreed stopping places, …; … (e) the name and address of the first carrier; …

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7 Hunter J held that the air waybill issued by the appellant did not contain particulars of the place of departure (par (b)) or the name and address of the first carrier (par (c)). He rejected the respondents' submission that there was non-compliance with par (e). The respondents seek by notice of contention to re-agitate this issue if they are unsuccessful in opposing the appeal on the other grounds. The respondents' cause of action 8 The appellant is a freight forwarder and carrier engaged in international carriage of goods. The cargo was received from the second respondent in good order and condition at its office at Newark Airport on 10 November 1995. The parties intended that the cargo would be carried for an agreed freight to Sydney, there to be delivered in the same good order and condition to the first respondent. The appellant executed air waybill No. EWR548561168-1 at 1557 hrs that day. I shall refer to this as the Emery air waybill. 9 Newark is approximately 20 kilometres from J F Kennedy International Airport at New York City. Pursuant to arrangements made by the appellant with Qantas Airways Limited, the details of which will be set out below, the cargo was transported by truck from Newark to Kennedy International Airport; then by Qantas freighter flight QF7554 via Chicago, Los Angeles Honolulu and Nadi, leaving New York on 11 November and arriving at Sydney on 13 November 1995; then by road to the first respondent's premises at South Granville. One of the 28 drums arrived in a damaged condition. 10 The Convention relevantly applies to all "international carriage" of cargo performed by aircraft for reward (Art 1(1)). That term is defined in Art 1(2) in terms wide enough to include carriage in which, according to the agreement between the parties, the place of departure is in the United States of America and the place of destination is in Australia. 11 In the case of "combined carriage" performed partly by air and partly by any other mode of carriage, the provisions of the Convention apply only to the carriage by air (Art 31). 12 Article 18(1) provides that the carrier is liable for damage sustained in the event of damage to any cargo, if the occurrence which caused the damage took place during the carriage by air. Article 18(2) and (3) define "carriage by air" inclusively and exclusively, relevantly excluding any carriage by land performed outside an aerodrome. However, Art 18(3) provides a presumption favouring the cargo owner by stipulating in effect that, in the case of combined carriage, any damages are presumed, subject to proof to the contrary, to have been the result of an event which took place during the carriage by air. In the present case there was no proof to the contrary, although there had been a live issue on the pleadings about this. The ultimate resolution of this issue has a bearing upon the scope of the matters open to be contested in this appeal (see below). 13 If matters had stood thus, the appellant would have been liable for the damage to the goods, but its damages would have been severely limited by reason of Art 22(2). 14 The appellant pleaded in its Amended Points of Defence that it was not liable at all, for various reasons: ¨ The appellant denied that it carried on business as an international carrier of goods by air (Points of Claim par 2, Amended Points of Defence par 2). It contended that its business was that of freight forwarder. ¨ The appellant also denied that the loss and damage occurred during the carriage by air by the appellant, its servants and agents, within the meaning of the Convention. It contended that the carriage of air was performed by Qantas (Points of Claim par 10, Amended Points of Defence par 9). ¨ The appellant also denied that it was the carrier within the meaning of the Convention (Amended Points of Defence par 11). 15 The respondents' answer to these three matters raised by way of defence was to plead in the alternative in their Amended Reply (par 5) that the carriage the subject of the proceedings was performed by successive carriers within the meaning of the Convention, whereby the appellant as "first and last carrier" was liable to each of the respondents as consignee and consignor in respect of the whole of the carriage pursuant to Arts 30 and 1. 16 Article 30(3) provides that: As regards baggage or cargo, the passenger or consignor will have a right of action against the first carrier, and the passenger or consignee who is entitled to delivery will have a right of action against the last carrier, and further, each may take action against the carrier who performed the carriage during which the destruction, loss, or damage or delay took place. These carriers will be jointly and severally liable to the passenger or to the consignor or consignee.

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24 The goods are stated to have been received by the appellant at "EWR" (which is code for Newark Airport ) at 1400 hrs on 11/10/95. A reading of the document as a whole makes it clear that this date is shorthand - American style - for 10 November 1995. 25 In the box printed "Airport of Departure (Addr. Of First Carrier) and Requested Routing" is typed: "QF7554/SYD/11". 26 Immediately beneath that box is a group of boxes with a common heading "Routing and Destination". The boxes are labelled "To", "By First Carrier", "To", "By", "To" and "By". Each box is empty except for the large box "By First Carrier" which contains the number "081EWR88935895". Although that number is solely within that box, the layout and contents indicate that the number is intended to provide information relevant to all of the boxes under the heading "Routing and Destination". This box was used because it alone was large enough to contain the long number. As will become apparent, the number is a shorthand reference to the Qantas air waybill issued to the appellant, which air waybill in turn provides the informed reader with a body of information relevant to various aspects of "Routing and Destination". It will also become apparent that this interpretation of the Emery air waybill, which is clearly open on the face of the document, assists in providing that air waybill with meaning and validity. Well established canons of interpretation permit it to be read this way. 27 Beneath this box are boxes labelled "Airport of Destination" and "Flight/Date". Typed in the first is "SYD" and in the second is "QF7554/11". 28 The evidence established that "QF7554/Syd/11" was a reference to a scheduled Qantas cargo flight departing on 11 November and scheduled to stop at Chicago, Los Angeles, Honolulu and Nadi en route to Sydney. 29 The number "O81EWR88935895" (which, as indicated, appears in the group of boxes headed "Routing and Destination") is the number of an air waybill on a Qantas printed form. That form was also executed by the appellant on 10 November 1995 and it was the means whereby the appellant consigned the cargo for carriage by land from Newark airport to Kennedy International Airport, by air from Kennedy International Airport to Sydney Airport and by land from Sydney Airport to South Granville. This document is also referred to in the evidence as the Master air waybill, a master air waybill being the document issued by the actual air carrier of the goods (see Mr Wrigley's statement). 30 The Qantas airbill names as shipper, consignee and issuing carrier's agent "EMERY WORLDWIDE - A CF COMPANY". (This appears to be a business name of the appellant.) It was signed on behalf of Emery Worldwide - A CF Company at "EWR" on 10 November 1995. 31 In the Qantas air waybill "JFK" (ie J F Kennedy Airport) is shown as the Airport of Departure. "Qantas Airways" is shown as the first carrier and "Sydney" as the airport of destination. 32 Any reasonably informed reader would perceive that the two air waybills are related and that they were prepared concurrently and issued at about the same time on 10 November 1995 in Newark. The details relating to the goods are virtually identical in the two air waybills.

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The Art 8(e) issue 38 Article 8(e) of the Convention required the Emery air waybill to contain the name and address of the "first carrier". The Convention does not define this expression. 39 I have already demonstrated that Art 30(3) gives the consignor of cargo a particular right of action against the first carrier in addition to the carrier that performed the (air) carriage during which the destruction, loss, damages or delay took place. This right against the first carrier was the right ultimately asserted in the litigation and was the basis for the respondents' success generally against the appellant (leaving aside the limitation issue). 40 Articles 5-16 of the Convention are in chapter II, s3 of which deals generally with air waybills. It is relevant to observe that Art 5 speaks of the consignor handing over the air waybill to "every carrier of cargo"; and that Art 9 speaks of the consequences of "the carrier" accepting cargo without an air waybill having been made out. It is common ground that a freight forwarder or "indirect carrier" can be a "carrier" for the purposes of the Convention (see Martin Marietta Corporation v Harper Group 950 F Supp 1250, 1256 (1977), Royal Insurance Co of America v Air Express International 654 F Supp 679, 682 (1987), Southern Electronics Distributors Inc v Air Express International Corporation 994 F Supp 1472, 1477 (1998)). Obviously the particular contract must be examined to see whether the freight forwarder contracts as principal to effect air carriage, albeit that it reserves the right to arrange with others for the physical transportation. As indicated above, the appellant was in the final analysis sued to judgment upon the basis that it was the "first carrier" of the damaged cargo. Accordingly, the question to be decided on the Art 8(e) issue is whether the name and address of the appellant is contained in the Emery air waybill. 41 The appellant's primary case was that it was the first carrier and that it complied with Art 8(e) by plainly disclosing its name and address at the top of the Emery air waybill. Alternatively, if Qantas was the first carrier for the purpose of the Convention, then Art 8(e) was satisfied by the references to its flight code "QF 7554/SYD/11" as well as by the incorporation of the Qantas air waybill by the reference to "O81EWR88935895" in the section headed "Routing and Destination". 42 Hunter J held that the appellant failed on either basis. He held that if the appellant was the "first carrier", the statement that it was the entity which issued the waybill did not satisfy Art 8(e). The references pointing to Qantas in the particulars relating to airport of departure, routing and destination and flight/date were said to reinforce this conclusion. His Honour regarded the appellant's case as suggesting that the court should ignore those particulars. He said (at RB29-30): I think that approach to construction amounted to an exercise of scrutinising the contents of the waybill to ascertain whether particulars contained in the waybill could fall within any of the categories of Article 8, ignoring for that purpose the context in which those particulars were described or contained in the waybill. In my view that is not an appropriate approach to the construction of the waybill in determining whether it satisfies the requirements of Article 8.

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Construing the Warsaw Convention 49 These three sets of issues raise questions about the proper approach to construction of the Convention generally. They also throw up specific points of construction and application of the Convention. The construction points overlap to a degree and may be addressed together before returning to the particular matters that are in issue. 50 The Convention is a multipartite treaty. The proper approach of an Australian court to its interpretation is well established generally (see Shipping Corporation of India Ltd v Gamlen Chemical Co A/asia Pty Ltd (1980) 147 CLR 142 at 159; Great China Metal Industries Co Ltd v Malaysian International Shipping Corporation Berhad [1998] HCA 65) and in the context of the Convention (see Sidhu v British Airways Plc [1997] AC 430 at 453; Kotsambasis v Singapore Airlines Ltd (1997) 42 NSWLR 110). In this exercise, "great store is set upon certainty and uniformity of application" (Gamlen at 159). Accordingly, considerable deference is paid to the decisions of the courts of other signatory countries (Great China at [38], [71], [137]). 51 Many nations are parties to the Warsaw Convention as amended by the Hague Protocol and/or the Guadalajara Convention. Not so the United States. This provides an additional reason for close examination of the American case law considering the unamended Convention, most of that case law coming from the United States Court of Appeals, Second Circuit, the Circuit that includes New York City. See generally United States Code Annotated, Title 49 s40105. 52 The largely American case law considering Arts 8 and 9 of the Convention establishes the following principles of present relevance: (1) The Articles are to be generally considered according to their plain language ( Brink's Ltd v South African Airways 93 F 3d 1022, 1027 (1966)). (2) Article 9 indicates which parts of Art 8 are considered essential, ie Arts (a) to (i) and (q). Of these essential paragraphs, all except pars (h) and (i) are clear in their expression and meaning ( Maritime Insurance Co Ltd v Emery Air Freight Corp 983 F 2d 437 (1993), Brink's at 1033-4). Earlier decisions suggesting that omitted particulars within Arts 8(a)-(i) and (q) might be disregarded unless the omission was commercially substantial or significant and prejudicial (eg Corocraft Ltd v Pan American Airways Inc [1969] 1 QB 616, Exim Industries Ltd v Pan American World Airways Inc 754 F 2d 106 (1985)) have been restricted to their own facts, ie as cases involving particulars (h) and (i) which (in the authoritative French version) are inherently ambiguous (see Brink's at 1033-4). (3) It follows that the omission of the particulars stipulated in the paragraphs with which the present appeal is concerned ( ie Art 8(b), (c) and (e)) would be fatal to the appellant's ability to limit the monetary extent of its liability. 53 However, Art 8 does not require the carrier to follow literally the language of the relevant paragraph. The starting principle is stated in the following extract from the judgment of the United States Court of Appeals, Second Circuit in Brink's (at 1033-4, citing Maritime Insurance at 440): … if an air waybill includes an essential particular, but deviates in language or some other respect, the question of whether Article 9 deprives the air carrier of limited liability may be determined with the assistance of traditional methods of interpretation.

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58 Martin Marietta also involved a claim that the first carrier's name and address were not contained in the air waybill (contrary to Art 8(e)). The first carrier was Circle Airfreight Corporation, a freight forwarder (or indirect air carrier) that took no part in the physical transportation of the goods, either by air cargo or otherwise, but which nevertheless contracted as principal to effect international air carriage. The plaintiff contended that the phrase "first carrier" necessarily referred to the first air carrier and that Circle did not qualify because it only arranged for the shipment aboard KLM and never itself transported the cargo. This submission was rejected for reasons (set out at 1256-7) which are, with respect, compelling. Many authorities are cited in support of this construction of the Convention. Even more significantly, it was pointed out that the claim against Circle in Martin Marietta was wholly based on its role as "first carrier". In those circumstances it was scarcely open to the shipper/consignor to seek to resile from the very basis upon which it had sued in the first place. The same comment may be made in relation to the present respondents' contention that the "first carrier" under the Emery air waybill was Qantas or even the carrier (Evergreen Airlines) to which Qantas contracted the actual air carriage. See also Rotterdamsche Bank NV v British Overseas Air Corporation [1953] 1 WLR 493 at 498. 59 One of the authorities cited in Martin Marietta is Royal Insurance v Amerford Air Cargo 654 F Supp 679 (1987). That decision and later decisions recognise that United States domestic federal law distinguishes between direct and indirect air carriers while treating each as an "air carrier" for certain purposes. But it is important to observe that the statutory definition of indirect air carrier speaks of someone who "undertakes indirectly to engage in air transportation… and who does not engage directly in the operation of aircraft in air transportation" (Royal Insurance at 681, citing 14 CFR s296.1(e)). In other words, the definition confines the concept to the freight forwarder that contracts as principal to effect air transportation, as distinct from the freight forwarder that merely acts as agent for the consignor in arranging a contract between the consignor and another carrier. This statutory definition does not give a forced meaning to the concept of carrier. Rather, it recognises the reality that the freight forwarder that contracts as principal is commonplace in the freight forwarding industry. The American case law on the Warsaw Convention which construes "first carrier" accordingly is doing likewise and, by a proper process of judicial decision-making, giving effect to the expressed policies of the Convention (see Royal Insurance at 682-3). 60 I have had the benefit of reading what Sheller JA has written about the meaning of "carrier" in the Convention. I respectfully agree with it. 61 In my view, to treat as a "first carrier" a freight forwarder that contracts as principal to effect international air carriage is to give effect to the expressed policy of the Convention. The consignor can look to its chosen principal as "first carrier" with the advantages and disadvantages conferred by the Convention. It will also be able to proceed directly against the actual air carrier that lost or damaged the goods if it can establish that the loss or damage occurred at that stage of the combined carriage. The original freight forwarder will also have recourse against its chosen principal under the air waybill which it consigns to the next "carrier" in line (Qantas in the present case). It can therefore go against that entity as "first carrier" under the Convention, assuming that the goods were delivered safely into that "carrier's" hands. 62 I return to the approach to construction as demonstrated in Martin Marietta. Circle was named as the "issuing carrier" and its address clearly disclosed in that context. The plaintiff argued that this did not satisfy Art 8(e) because Circle's name was not in terms shown as "first carrier". This argument was held to be without merit. The Court pointed out (at 1257) that: Article 8(e) only specifies the content of the waybill; it does not require an exact phrasing. Therefore, 'issuing carrier' sufficiently conveys that Circle was the 'first' to conduct its business with G E [the plaintiff consignor or shipper].

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Application of these principles and decisions to the matters in issue 66 It is obviously appropriate that the Supreme Court of New South Wales should follow these international decisions unless clearly convinced of error. I am not convinced. Indeed, I find the reasoning highly persuasive, particularly since it upholds rather than destroys the intended operation of this commercial transaction, it does not undercut any identifiable policies of the Convention, and it prefers substance over form. 67 Hunter J approached the application of Art 8 on the basis that clear evidence was required on the face of the Emery air waybill that the various items of Art 8 were addressed in their very terms. This is particularly evident in the manner in which he held that Art 8(c) ("first carrier's" name and address) was not complied with (see par 42 above). This reasoning is embraced by the respondents who submit that it is fatal that the Emery air waybill does not state in terms that the appellant was of the first carrier. Such an approach is directly contrary to the American and English case law to which I have referred. 68 I turn to the specific issues. 69 Article 8(b) required the Emery air waybill to contain particulars of the "place of departure". If that was Newark, those particulars were provided by the identification of "EWR" as the place where the goods were received. Nothing turned upon the absence of the identification of that place as the "place of departure" for the purpose of the Convention. Nor did the possible ambiguity inherent in the indirect but clear references to "JFK" as the airport of departure. In any event, Newark is identified as the pick up point in the incorporated Qantas air waybill. 70 If, alternatively, Kennedy International Airport was both "airport of departure" according to the Emery air waybill and "place of departure" for the purposes of the Convention, then that place was identified in the Emery air waybill because of the specific incorporation by reference of the Qantas air waybill and the express reference to a particular Qantas flight number that could be shown as leaving from Kennedy International Airport by anyone who consulted the Qantas timetable. 71 Here, the identifying particulars of the scheduled Qantas flight are provided in the Emery air waybill. Furthermore, the Qantas air waybill is incorporated in terms, by the references to its number "081EWR88935895" as the composite response to the promised information about "Routing and Destination". The respondents' attempt to distinguish Brink's and Martin Marietta in relation to the capacity of an air waybill to incorporate some other document by reference must be rejected. The American cases do not require that the incorporated document must have some public status, although they require the air waybill to be clear as to what it incorporates. In any event, a requirement of accessibility to published timetables incorporated by reference was satisfied on the evidence in this case which shows that the routing information for the nominated flight was readily accessible to people in the freight forwarding industry (see CB, 44, 90, 110-112). Hunter J found that QF7554 was a scheduled flight operating from Kennedy International Airport to Sydney via Chicago, Los Angeles, Honolulu and Nadi (RB 30T). 72 It is therefore unnecessary to decide what was the true "place of departure" for the Emery air waybill. For what it is worth, it is my firm view that this place was Newark. The Convention recognises the concept of combined carriage. In the early decision of Grein v Imperial Airways Ltd [1937] 1 KB 50, the English Court of Appeal considered "place of departure" and "place of destination" to mean the place at which the contractual carriage begins and the place at which the contractual carriage ends (see also Felsenfeld v Sabena 232 NYS 2d 351 (1962), Goldhirsch, The Warsaw Convention Annotated: A Legal Handbook (1988) p13). With a passenger this will usually be an airport. Not so for cargo that is arranged for international carriage by a freight forwarder. In the context of a freight forwarding contract for door to door carriage, I see no difficulty in regarding the place of departure as the point at which the first carrier (here Emery, in Newark) took delivery pursuant to an intended arrangement for international carriage by air which Emery as consignee undertook to bring about pursuant to its commitment under its air waybill. There is every reason why a printed air waybill would have a box for "airport of departure", but it does not follow that this was intended to satisfy Art 8(b) in every case. 73 As to the Art 8(e) issue ("first carrier"), the Emery air waybill clearly identifies the appellant as the consignee freight forwarder. As such, it assumed contractual responsibility to arrange the carriage from door to door. This was sufficient, and it was unnecessary for the words "first carrier" to be appended (see Rotterdamsche Bank, Brink's, Martin Marietta and General Electric). 74 As to the Act 8(c) issue ("agreed stopping places"), the search is to ascertain whether the air waybill contains particulars of those stopping places that were either agreed or, according to the authoritative French test, contemplated (prevus). If no stopping places were "agreed", no disclosure is called for (Insurance Company of North America v Federal Express Corporation, United States Court of Appeals, Ninth Circuit, 30 August 1999). This at once placed the respondents in a dilemma because, if the source of proving those stopping places was the air waybill, then that proof ex hypothesi satisfied Art 8(c), according to the generous principles of interpretation already referred to. It is no answer to suggest, as the respondents did, that the air waybill reserved the right to re-route: this would not in itself mean that the scheduled stopping places ceased to be the "agreed stopping places". 75 There is a long stream of authority permitting resort to published and readily available timetables to prove compliance with Art 8(c), at least where the air waybill refers to them generally or by identifying a particular flight number (Kraus v Koninklijke Luchtvaart Maatschappij NV (Royal Dutch Airlines) 92 NYS 2d 315 (1949), Brink's, Martin Marietta, General Electric). Hunter J correctly rejected the respondent's defence based upon Art 8(c). 76 The following orders should be made: (1) Appeal allowed. (2) Vary the judgment in favour of the plaintiffs/respondents by substituting $12,163.07 for $375,085.23. (3) Respondents to pay the appellant's costs. 77 SHELLER JA: I have had the benefit of reading the judgments in draft of the President and Fitzgerald JA. I agree with the President.

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Freight Forwarder as Carrier 78 This appeal calls for some consideration of the meaning of "carrier" in the Warsaw Convention, Schedule 1 to the Civil Aviation (Carriers' Liability) Act 1959, and in particular consideration of whether a party, described and acting for some purposes as a "freight forwarder" or a "forwarding agent", can be a carrier or one of successive carriers. 79 Traditionally forwarding agents made arrangements with shipowners and other carriers for the carriage of goods, but in the capacity of an agent only, and without personal liability as a carrier. In Jones v European & General Express Co (1920) 25 Comm Cas 296 at 298 Rowlatt J said: "It must be clearly understood that a forwarding agent is not a carrier". However, in footnote 75 in Scrutton on Charterparties, 20th ed at 55 the editors remarked that this is no longer invariably true. It may now be doubted whether it is exceptional for a forwarding agent to be a principal for sea carriage; compare Langley Beldon & Gaunt Limited v Morley (1965) 1 Lloyds Rep 297 at 306. Often it will be difficult to tell whether a party described as a "forwarding agent" is in fact contracting as an agent or a principal. 80 Professor Tetley in an article on the "Responsibility of Freight Forwarders" (1987) 22 Eur Tr Law 79, at 89-90, footnote 3, traces the evolution of the freight forwarder from simple "agent" to "contractor" and "carrier", from Jones v European & General Express Co to Tetroc Limited v Cross-Con (International) Limited (1981) 1 Lloyds Rep 192 at 198. 81 Unsurprisingly in the context of air carriage a forwarding agent, strictly so called, is simply an agent employed by a intended consignor to make a contract with someone else to perform the carriage. But again in practice it is not always easy to determine whether a particular contract is one of a forwarding agency or of carriage; see Shawcross & Beaumont Air Law, 4th ed, re-issue at V (80) where a considerable number of cases and articles are referred to in the footnotes. I shall refer to some of them. 82 In Troy v Eastern Co of Warehouses, Insurance and Transport of Goods [1921] 91 LJ KB 632 a consignor employed a firm of forwarding agents to arrange for the conveyance of goods from Liverpool to Petrograd via Vladivostok. The decision of the English Court of Appeal (Bankes, Warrington and Scrutton LJJ) was unanimous. At 634 Warrington LJ said: "The question then is, whether the defendants are to be treated as if they were mere agents, or whether they were independent contractors, who contracted with the plaintiff for the transport of the goods from Liverpool to Petrograd. The question turns entirely on the construction of the document which I have already referred. That document is, to all intents and purposes, a through bill of lading; it contains an obligation on the part of the defendants, having accepted the goods, to deliver them to the ultimate consignee at Petrograd. I think the true view of the contract is that it is one for the carriage of goods; the defendants are not the actual carriers, but it is understood between the parties that the actual carriage is to be performed by persons employed by the defendants."

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87 This distinction is exemplified by Article 30 of the Warsaw Convention which acknowledges that where there are successive carriers at any point of time there may or will be one who performs the carriage. 88 The most recent case referred to in Shawcross & Beaumont and the one closest to the present case is Emery Air Freight Corporation v Nerine Nurseries Ltd (1997) 3 NZLR 723, a decision of the New Zealand Court of Appeal comprising Gault, Henry, Thomas, Keith and Blanchard JJ. The case concerned the Warsaw Convention and the supplementary Guadalajara Convention; Sch 3 of the Civil Aviation (Carrier's Liability) Act. The respondent, Nerine, contracted with its air freight agent Jarratt to transport flower bulbs to Amsterdam. The agent sent the bulbs by road to Auckland and contracted with the appellant, Emery, for their carriage to Amsterdam. Emery contracted with Alitalia to carry the bulbs from Sydney to Amsterdam. The bulbs were damaged, it was assumed at Sydney Airport, while under the control of Alitalia. 89 Nerine obtained summary judgment against Jarratt, which shortly thereafter went into receivership. Nerine applied for summary judgment against Emery and was successful on the grounds that Emery was a contracting carrier within the meaning of the Warsaw Convention. An appeal to the High Court was not successful and Emery was granted leave to appeal to the Court of Appeal. Nerine's argument was Jarratt was merely its agent when contracting with Emery which made Emery a contracting carrier within the meaning of the Convention. At 732 Blanchard J, with whom Gault, Thomas and Keith JJ agreed, said: " The status of Jarratt The first question is whether Jarratt was a carrier, and its waybill a contract to effect carriage, or merely a forwarding agent for Nerine and its waybill merely a contract to arrange carriage by air. Nerine's argument on the status of Jarratt treats Emery's waybill as a contract of carriage subject to the conventions. There is and can be no dispute about that. The issue is whether the other party is Jarratt or Nerine. Nerine argues that this is a question of fact which was unsuitable for determination on a summary judgment application. Nerine says that there is a doubt about Jarratt's status because its waybill was called a 'house waybill' and had provision for a 'master waybill no'; Jarratt is described in the waybill as 'issuing agent'; the waybill had no statement (as required by art 8 (c) of the Warsaw Convention) notifying the consignor that the conventions may be applicable and may limit the carrier's liability; and there is said to have been an acknowledgment by Emery that Jarratt was a forwarding agent. When Jarratt's waybill is examined as a whole it is undeniable that Jarratt was contracting as a carrier, and thus as a principal, both in respect of the land leg (Palmerston North to Auckland) and the air legs. It described its own document for the carriage by air as a 'waybill', which The Oxford English Dictionary (2nd ed) defines as 'a detailed statement of goods entrusted to a public carrier for delivery at stated destinations'. This is entirely consistent with the conditions on the reverse side of the waybill which, although denying common carrier status for Jarratt, contain an authorisation to Jarratt to employ the services of 'Third Parties'. This is an express acceptance by Jarratt of party status in relation to the carriage. The waybill number was Jarratt's number which Emery in turn adopted in its own waybill. There appears to have been no master waybill. Though the waybill did not comply with art 8, it is provided by art 5 (2) that the irregularity of the document does not affect the existence of the contract of carriage, which shall none the less be governed by the rules of the convention. The so-called acknowledgment by Emery that Jarratt was a freight forwarder is taken out of context. Emery's New Zealand manager in his affidavit described Jarratt as 'a carrier and freight forwarder' which subcontracted with Emery. Furthermore, Nerine's summary judgment against Jarratt was obtained on the basis that Jarratt was a carrier. The statement of claim pleaded that Nerine and Jarratt 'entered into a contract, the terms of which were contained in [Jarratt's] Air Waybill No 5461259749, whereby [Jarratt] agreed to carry of [sic] the goods from Palmerston North to Amsterdam.' "

[47]

Article 8 91 The authors of Shawcross & Beaumont express some doubt as to whether the approach favoured by many United States courts, of treating Art 8 as specifying the substantive requirements of the airway bill without limiting the form that the content may take or the words that may be used to meet its specification, would be accepted by English courts; VII (723). However, I agree with the President for the reasons that he has given that certainty and uniformity of application between courts in different countries is a major consideration and that in a case where a waybill has been issued in the United States, particular attention and appropriate deference should be given to the decisions of the courts of that country. 92 FITZGERALD JA: The reasons for judgment of the other members of the Court permit me to confine my observations. 93 The respondents were respectively the consignee and consignor of a load of pharmaceutical chemicals from Newark, New Jersey, United States of America to Granville, Sydney. The appellant was the respondents' international freight forwarder. The chemicals were carried by road from Newark to John Fitzgerald Kennedy ("JFK") Airport, New York, by air from JFK Airport to Mascot Airport, Sydney, via Chicago, Los Angeles, Honolulu and Nadi, and by road from Mascot to Granville. The actual air carrier was Evergreen Airways Pty Ltd, on behalf of Qantas Airways Limited, which had been engaged by the appellant for that purpose. The material flight bore the Qantas designation QF7554. The President's judgment records details of the material documentation. Paras 18-32. 94 During the course of the carriage, damage of $375,082.23 was caused to the chemicals. The respondents recovered a judgment against the appellant for that amount, plus costs, on the basis that the appellant is liable to the respondents under the unamended Convention for the Unification of Certain Rules Relating to Carriage by Air The Convention, known as the "Warsaw Convention", has the force of law by virtue of Part III of the Civil Aviation (Carriers' Liability) Act 1959 (Commonwealth).. Under Article 30(3) of the Convention, the "first carrier" is liable to the consignor and the "last carrier" is liable to the consignee. According to the appellant's argument, the appellant was both "first carrier" and "last carrier". No other basis for its liability was suggested. 95 Although it cannot confidently be stated that the appellant's submissions always adhered to the premise that the Convention is applicable, its notice of appeal does not request that the respondents' claim be dismissed but that the judgment in their favour be reduced to $12,163.07. The sole basis for that contention is the proposition that the appellant's liability to the respondents is limited to that sum by the operation of Article 22(2) of the Convention. 96 The respondents defended the judgment in their favour on the basis of Article 9 of the Convention. Their argument was that the air waybill Convention, Chapter II "Documents of Carriage", Section 3 "Air Waybill", Articles 5 and 6. which was the contract between the appellant and the respondent-consignor did not contain the particulars required by Article 8 of the Convention, and, specifically, those required by paras (b), (c) and (e) of Article 8, namely: " … (b) the place of departure and of destination; (c) the agreed stopping places; … (e) the name and address of the first carrier; …." 97 The air waybill related to both road and air carriage, but the Convention is only applicable to the carriage by air. Convention, Article 31. The damage to the respondents' chemicals is presumed to have occurred during the carriage by air since there is no evidence to the contrary. Convention, Article 18. The limitation on the operation of the Convention to carriage by air is emphasised by Article 1, which is contained in Chapter 1 "Scope - Definitions". Article 1 provides: "1. This Convention applies to all international carriage of … cargo performed by aircraft for reward … 2. For the purposes of this Convention the expression 'international carriage' means any carriage in which, according to the agreement between the parties, the place of departure and the place of destination, whether or not there be a break in the carriage or a transhipment, are situated … within the territories of two High Contracting Parties … 3. Carriage to be performed by several successive air carriers is deemed, for the purposes of this Convention, to be one undivided carriage, if it has been regarded by the parties as a single operation …."

[48]

The material liability of the appellant is therefore as a carrier by air. 98 The other members of the Court are of opinion that a freight forwarder which contracts to have cargo carried by air by one or more air carriers but not to perform any air carriage itself can be a carrier by air for the purposes of the Convention, and that, on the proper construction of the air waybill in this matter, the appellant was the "first (air) carrier". Whether or not those propositions are correct or the United States decisions relied on by the President, which are influenced by the statute law of that country, are helpful, the approach of the other members of the Court provides the only foundation for the appellant's acceptance that the Convention is applicable. 99 The trial judge found that the air waybill contained the particular required by Article 8(c) but not the required particulars concerning "the place of departure" Convention, Article 8(b). and "the name and address of the first carrier". Convention, Article 8(e). The President's judgment explains why the trial judge was correct in relation to the particular required by Article 8(c). 100 In the absence of contrary indications in the Convention, Articles which plainly demonstrate that the Convention is concerned only with carriage by air For example, Articles 1, 18 & 31. persuade me that the "place of departure" referred to in Article 8(b) is the place of departure of the aircraft by which a carriage by air is performed. We were not referred to any judgment which holds otherwise. 101 In particular, the decision of the English Court of Appeal in Grein v Imperial Airways Limited, [1937] 1 KB 50. which is referred to by the President, Para. 72 of the President's reasons. does not support a contrary conclusion. The only carriage under consideration in Grein [1937] 1 KB 50. was air carriage. 102 The air waybill unequivocally specified JFK Airport as the "Airport of Departure". In my opinion, that complied with the material portion of Article 8(b). 103 Because this appeal must be decided on the footing that the appellant was the "first carrier" within the meaning of Article 30, particulars of its name and address were required to be contained in the air waybill by Article 8(e). As the President has pointed out, the contents of the air waybill included the appellant's name and address as freight forwarder. 104 However, Article 8(e) does not merely require that name and address of a freight forwarder which is the first carrier be included in the contents of the air waybill but that the air waybill contains particulars of the first carrier's name and address. 105 The argument for the appellant is presumably that, since on its proper construction the air waybill provides that the appellant - freight forwarder was the first carrier, the statement of the appellant's name and address in the air waybill provides particulars of the name and address of the first carrier. 106 However, the air waybill provided information, some by reference to the Qantas air waybill, which identified Qantas Airways Limited as the "first carrier" See the President's reasons for judgment, paras 26-32., and the air waybill expressly stated that the address of the "first carrier" was the "Airport of Departure", i.e., JFK Airport, which was not the appellant's address. See the President's reasons for judgment, para 25. 107 In these circumstances, I consider that the trial judge was correct in his conclusion that the particulars required by Article 8(e) are not included in the air waybill. As his Honour pointed out, at best for the appellant, the air waybill contained inconsistent particulars of the first carrier's name and address. 108 Accordingly, I would dismiss the appeal, with costs. 1 **********

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