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[2006] VSC 237
Supreme Court of Victoria
2006-07-14
BYRNE J
Original judgment source is linked above.
CARRIAGE OF GOODS - sale of goods - sale FOB Italian port - bill of lading - part goods missing on arrival Melbourne - whether goods lost before loading at Italian port - non-delivery by seller - whether bill of lading port to port bill or land/sea bill - whether shipper liable for non-delivery.
1 The plaintiff, M & U Imports Pty Ltd ("M & U"), carries on business as the importer of goods for the hairdressing industry. By an agreement made in or about March 2003, it agreed to purchase from the firstnamed defendant, Parlux SpA ("Parlux"), a consignment of 10,000 electrical hairdryers and some ancillary parts. Parlux is a company carrying on business in Italy and the terms of the sale were FOB Italian Port.
2 On 4 June 2003, the goods were loaded into a 40 Ft container, MSCU402521/4, and dispatched from the Parlux factory at Trezzano in Italy. The container travelled by road to the Milan rail freight terminal and thence by rail to the port of La Spezia, where it arrived at 7.22 am on 5 June.
3 On 16 June 2003, the container was loaded on the vessel, MSC Bruxelles, bound for Melbourne. The container was unloaded at Melbourne on 18 July 2003 and stored at the Patrick's terminal. On the following day, 19 July, the container was transported by truck to the yard of Cahill Transport where it remained until Monday 21 July. Early on that day the truck with the container on board was driven to the M & U warehouse at Moorabbin.
4 When the container was opened on arrival at Moorabbin it was discovered that only 333 cartons were in the container. These contained only 6,188 hairdryers and certain spare parts. The contents of the container were photographed before any person entered the container.
5 M & U sues Parlux for its failure to deliver all of the 10,000 hairdryers and the spare parts. It seeks $A159,229.64 as the value of the missing goods.
6 M & U also sues the secondnamed defendant, Gava International Freight SpA ("GIF"), for failing to deliver the goods in accordance with the bill of lading issued by it on 16 June 2003.
THE CLAIM AGAINST PARLUX
7 Since its purchase agreement was on terms FOB La Spezia, the entitlement of M & U to the damages sought depends upon its establishing on the balance of probabilities that, at the time the container crossed the ships rail at La Spezia, the contents of the container were as they were when it was opened in Moorabbin. It was sought to discharge this burden by establishing that the container was not entered and its contents not pilfered from the time it was loaded on the vessel until it was opened and the shortage was discovered in Moorabbin.
8 The evidence offered in support of this was very strong. It showed that, on arrival, the container was found to be sealed, by seal MSC943524, and that there was no sign that the seal had been tampered with. The evidence also showed that the seal, once properly affixed, could not be opened and re-affixed without visible sign, or at all. There was evidence, too, that entry without disturbing the seal was difficult, but not impossible, but that there was no indication of such entry.
9 Roberto Scotto, the customer service director of La Spezia container terminal, said that the practice of the terminal personnel is to inspect the containers in the terminal upon arrival to ensure that they are in a sound condition and that their seals are intact. The general practice was attested to by Captain Razzak Syed, a marine surveyor. If upon inspection at La Spezia it appeared that the seal was not intact, Mr Scotto said, the terminal would advise the shipper, Mediterranean Shipping Co SA ("MSC"), which would inform the carrier, GIF. His evidence was not challenged.
10 Captain Syed expressed the opinion that, in the circumstances of this case including the storage conditions, it is not possible for the container to have been entered and its contents pilfered when it was on board the vessel. Counsel for all parties appeared to accept this to be the case.
11 Damian Joseph Ryan is the Victorian operations manager of Patrick's terminal. He spoke of the security in place at the terminal in July 2003 saying that there was no prospect of anybody obtaining entry to the container while it was at the terminal.
12 Peter John Gipton was the driver engaged by Cahill Transport to deliver the container by truck from Patrick's container terminal in Footscray. He said that when he called to collect the container, he inspected it and found no damage. The seal was intact. He said that he took the truck and the container to the Cahill Transport Depot on Saturday 19 July where it remained until the morning of Monday 21 July. He said that it was located under the awning where security cameras are. He also discounted the possibility of entry and pilferage during the time it was at the Cahill Terminal.
13 I accept this evidence. Accordingly, counsel for M & U argued, I should be satisfied on the balance of probabilities that the container was not full when it was loaded at La Spezia so that the breach of contract was made out.
14 The response of Parlux to this was to adopt the evidence led of the security offered by the seal on the container. Evidence was then led from witnesses from the Parlux store in Italy. These were Francesco Suriano, Antonio Centrangolo and Ivan Soldati. They said that they loaded all 573 cartons into the container, that the door was closed and the seal properly affixed immediately before the truck left for Milan railway. The evidence of these witness was challenged, at least as to fixing of the seal, but they were unshaken. From my perspective, I saw nothing in their evidence or in the way they presented it to doubt the genuineness of their recollection. Nevertheless, the logical consequence of the acceptance of their evidence in the circumstances, is that there could be no shortage on arrival, a fact which I accept as established.
15 There are really two possibilities. First, is that these witnesses were lying when they swore that they loaded the container with 573 cartons. The evidence was that this would virtually fill the 40 ft container. I am not prepared to make such a finding.
16 The second possibility is that proposed by Captain Lawrence McDonald, a marine surveyor with 18 years' worldwide experience. He said that he had had experience in recent years of cases where the seal had not been properly affixed to the container by the shipper. In such a case it would be relatively easy for a thief later to gain entry, to pilfer the contents and to close up and seal the container so that it was delivered to the consignee with the seal intact.
17 Counsel for Parlux also led evidence which was directed to the conclusion that the pilferage must have occurred after it left Patrick's terminal in Melbourne. This was to the effect that the condition, location and quantity of the cartons in the container on arrival at Moorabbin were such that it was probable that they had not been subjected to movement which an ocean voyage and terminal handling in La Spezia and Melbourne would be likely to produce. It was put to the marine surveyors that, if the container was only 44 percent full, as it was on arrival, the remaining cartons would show damage due to being thrown about or at least shifted during these operations. Furthermore, it was suggested, the stevedores would notice that the container was underweight or that the weight was not evenly distributed within the container when they moved the containers on the wharf.
18 I accept the evidence of Captain Mehernosh Feroze Captain that the condition of the boxes upon the opening of the container was consistent with the pilferage having occurred before it reached La Spezia. The boxes each weigh about 20 kilograms. The manner of stacking would tend to protect them from shifting and the two cartons in the foreground appear to have been disturbed, perhaps by movement in transit.
19 I return now to the evidence of Captain McDonald. When asked about the proper affixing of the seal he said this:
"... we went through the exercise yesterday down at one of the container terminals. We had to change a bolt seal on a container. We hacked the existing seal off and we put an MSC seal on that particular container. While we did that I asked the person who was doing it to go through the process and he explained how it's done and the seal is in two parts, a long part and you've got the bottom part. You insert one into the other and to properly seal it you have to give a really hard blow, a strong man with two good hands, press it, you hear a firm click, it's locked forever. He went through the exercise of just pressing it in, there's a minor click and you can separate it, and that can happen.
Just inadvertently? --- Intentionally or inadvertently and we repeated the exercise several times. So it is possible to put the seal on and it's not properly secured."
20 It seems to me, that this provides the probable explanation for the apparent conflict between the witnesses from the Parlux store and those from the M & U store. It is true that Mr Soldati said he heard a click when the seal was closed, but it must have been only the preliminary click.
21 In these circumstances, the evidence offered by Parlux does not lead me to conclude that M & U has failed to discharge its burden of showing that the container was not full when it passed the rail of the MSC Bruxelles at La Spezia. The breach of contract has been established. There was no challenge as to the quantum of damage alleged by M & U.
THE CLAIM AGAINST GIF
22 This claim was for breach of an agreement made between M & U and GIF to carry the goods to Melbourne. The agreement is contained in bill of lading No 013301576-CO2, issued by GIF at Genova on or about 16 June 2003. As originally pleaded, the bill of lading was for carriage by sea from La Spezia to Melbourne. By an amendment permitted on 26 June 2006 M & U alleged, in the alternative, that the carriage under the bill of lading commenced at the Parlux factory at Trezzano. Given the evidence that the loss did not occur on board the vessel, counsel for M & U accepted that his client's claim against GIF could succeed only if the commencement of the carriage was at Trezzano. It is to this issue that I now turn.
23 The contract of carriage is said to be wholly in writing and contained in the bill of lading. The bill was, as I have mentioned, issued at Genova on 16 June 2003, that is, the date on which the container left La Spezia. On its face, the bill is expressed to be a multimodal bill. In the boxes provided, the Place of Receipt and the Place of Delivery contain no entry. The boxes for the Port of Loading and the Port of Discharge, respectively, have entries La Spezia and Melbourne. The reverse of the bill contains 19 standard conditions and some definitions. GIF is the Freight Forwarder referred to in the conditions. The following clauses are relevant for my purposes:
"2.1. By issuance of this FBL the Freight Forwarder:
(a) undertakes to perform and/or in his own name to procure the performance of the entire transport, from the place at which the goods are taken in charge (place of receipt evidenced in this FBL) to the place of delivery designated in this FBL;
(b) assumes liability as set out in these conditions.
6.1. The responsibility of the Freight Forwarder for the goods under these conditions covers the period from the time the Freight Forwarder has taken the goods in his charge to the time of their delivery.
6.2. The Freight Forwarder shall be liable for loss of or damage to the goods was well as for delay in delivery if the occurrence which caused the loss, damage or delay in delivery took place while the goods were in his charge as defined in Clause 2.1. a, unless the Freight Forwarder proves that no fault or neglect of his own, his servants or agents or any other person referred to in Clause 2.2. has caused or contributed to such loss, damage or delay... ."
FBL is the abbreviation for FIATA Multimodal Transport Bill of Lading.
24 Counsel for M & U argued that the starting point for the carriage was "the place at which the goods are taken in charge". In the definitions -
'Freight Forwarder' means the Multimodal Transport Operator who issues this FBL and is named on the face of it and assumes liability for the performance of the multimodal transport contract as a carrier.
'Merchant' means and includes the Shipper, the Consignor, the Consignee, the Holder of this FBL, the Receiver and the Owner of the Goods.
'Consignor' means the person who concludes the multimodal transport contract with the Freight Forwarder.
'Consignee' means the person entitled to receive the goods from the Freight Forwarder.
'Taken in charge' means that the goods have been handed over to and accepted for carriage by the Freight Forwarder at the place of receipt evidenced in this FBL.
'Goods' means any property including live animals as well as containers, pallets or similar articles of transport or packaging not supplied by the Freight Forwarder, irrespective of whether such property is to be or is carried on or under deck."
Since there is no place of receipt specified on the face of the bill, I should construe it as containing no starting point for the carriage, alternatively, that the starting point must be the place at which GIF actually took control of the goods.
25 The correspondence in evidence shows that, in November 2001, M & U advised Parlux that it had appointed Gava International (Aust) Pty Ltd ("GIA") as its regular freight forwarder and that henceforth all "our shipments" would be organised by GIF, a different, albeit possibly a company associated with GIA. In its order for the shipment the subject of this litigation, M & U instructed Parlux to:
"Please contact our forwarder Gava International [sic] (as usual) to collect and ship the goods once they are ready."
26 The contractual arrangements between Parlux and M & U were such that this collection should only apply to the sea transit leg and thereafter; M & U had no interest or concern in the movement of the goods before they reached the ships rail.
27 What then happened was that the administration in Parlux contacted GIF to send one of its containers and this duly arrived on a tray truck. After loading, the truck took the container to Milan where it was loaded on a train for La Spezia. When the goods were loaded in the container at Trezzano the driver signed the documento di transporto DT in a box marked "Firma Del Vettore" beside the date and time of collection, 10.50 am on 4 June 2003, which is itself beside the box with the name and address of GIF inserted.
28 It seems that GIF does not itself by its own employees perform any cartage. The carriage from Trezzano to La Spezia was entrusted to Agenzia Marittima Le Navi SpA, an agent of the shipping company MSC. MSC provided its container MSCU402521/4 and the blank seal MSC943524 which were sent by truck to the Parlux warehouse in Trezzano.
29 Ezio Saracco, the President of GIF, said that GIF arranged for Le Navi to carry the goods from Trezzano to La Spezia. LeNavi charged GIF for this and GIF, in turn, invoiced Parlux €729.85. The sea transport, he said, was carried out by MSC by arrangement with his company which in turn invoiced GIA.
30 I conclude from this that GIF was acting in two distinct capacities in its dealings with these goods. Its capacity with respect to the land transport in Italy was as contractor with Parlux. There is nothing in this factual background to support the contention put on behalf of M & U that the bill of lading covered this sector of the carriage.
31 I return to the bill itself. Although the form is that of a multimodal transport bill, it is applicable to the case where one mode of transport only is used. The details which are inserted on its face are strongly suggestive of a port to port bill. There is nothing that unequivocally points to a land/sea bill. I conclude that the goods were received by GIF under the bill when they were loaded on the vessel at La Spezia.
32 It follows from this that the claim against GIF must fail.
CONCLUSIONS
33 I propose, therefore, that there be orders as follows:
(a) Judgment for the plaintiff against the firstnamed defendant in the sum of $A159,229.64 plus interest.
(b) That there be judgment for the secondnamed defendant against the plaintiff.
I will hear counsel as to the precise amount of the judgment and interest and costs.
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M & U Imports Pty Ltd
Parlux SpA [2006] VSC 237