What is the proper construction of the general paramount clauses?
192 Clause 3(a) of the booking note (general paramount clause) is as follows (separation, paragraph numbers and emphasis added):
(1) Except in case of US Trade, articles I-VIII inclusive of the Hague Rules contained in the International Convention for the Unification of certain rules relating to Bills of Lading, dated Brussels, 25th August 1924, shall apply to this Booking-Note.
(2) The Carrier reserves all its rights under said Convention, including the period before loading and after discharging and while the Goods are in the charge of another Carrier, and to deck cargo and live animals.
(3) In determining the liability of the Carrier, the liability shall in no event exceed £100 (GBP) sterling lawful money of the United Kingdom per package or unit.
193 Clause 3(a) of the bill of lading (general paramount clause) is as follows (separation, paragraph numbers and emphasis added):
(1) Except in case of US Trade, the Hague Rules contained in the International Convention for the Unification of certain rules relating to Bills of Lading, dated Brussels, 25th August 1924, as enacted in the country of shipment, shall apply to this Bill of Lading.
(2) If no such enactment is in force in the country of shipment, then articles I-VIII inclusive of the said Convention shall apply.
(3) In trades where the International Brussels Convention 1924 as amended by the Protocols signed at Brussels on 23 February 1968 and 21 December 1979 (the Hague-Visby Rules) apply compulsorily, the provisions of the Hague-Visby Rules shall be considered incorporated in this Bill of Lading.
(4) The Carrier reserves all its rights under the Hague Rules or Hague-Visby Rules, including the period before loading and after discharging and while the Goods are in the charge of another Carrier, and to deck cargo and live animals.
(5) If the Hague Rules are applicable otherwise than by national law, in determining the liability of the Carrier, the liability shall in no event exceed £100 (GBP) sterling lawful money of the United Kingdom per package or unit.
194 The evident intention of the parties derived from the contract recorded in the recap emails is that both general paramount clauses are intended to be incorporated into the contract of carriage. The interpretation of a contract is a question of law: Pioneer Shipping Ltd v BTP Tioxide Ltd (The Nema) [1982] AC 724 at 736. Here, the proper law of the contract is English law. In point of detail, English law is a foreign law and should be proved as a question of fact like any other foreign law: see, e.g., Neilson v Overseas Projects Corporation of Victoria Ltd [2005] HCA 54; (2005) 223 CLR 331 at [115]; FAI General Insurance Co Ltd v Ocean Marine Mutual Protection and Indemnity Association (1997) 41 NSWLR 117 at 126. In the absence of evidence of English law, the Court is to assume that the English law approach to contractual interpretation is the same as Australian law: e.g., Neilson at [125] (Gummow and Hayne JJ), [249] (Callinan J), [267] (Heydon J).
195 In accordance with settled principles of contractual interpretation, the contract of carriage must be given an objective construction, by giving proper effect to the text, context, subject matter and purpose of its provisions: e.g. Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 at 461-2 [22]; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 at 179 [40]; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104 at [46]-[52]. The approach to be adopted in construing the contract is the 'objective approach' so that the 'meaning of the terms of a commercial contract is to be determined by what a reasonable business person would have understood those terms to mean': Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 at 656-7 [35]. Also, '[a] commercial contract is to be construed so as to avoid it making commercial nonsense or working commercial inconvenience': Electricity Generation Corporation at 657 [35].
196 Further, the contract has to be construed in context, considering its terms as a whole, giving consistent meaning to all of its terms, and avoiding any apparent inconsistency: Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99 at 109 (Gibbs J in dissent, but not on the applicable principle). Put another way, preference is to be given to a construction that gives 'a congruent operation to the various components of the whole': Wilkie v Gordian Runoff Ltd [2005] HCA 17; (2005) 221 CLR 522 at 529 [16]. Where a commercial transaction is implemented by several contracts or documents, all of the contracts or documents may be read together for the purpose of ascertaining their proper construction and legal effect, at least where the contracts or documents are executed contemporaneously or within a short period: EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd (2010) 41 WAR 23 at 52-53 [104]. Words may be supplied, omitted or corrected in a written contract, as a matter of contractual interpretation, where it is clearly necessary in order to avoid absurdity or inconsistency: Fitzgerald v Masters [1956] HCA 53; (1956) 95 CLR 420 at 426-7, 437.
197 Neither general paramount clause is able to be incorporated unamended as a term of the contract of carriage because the booking note clause refers to 'this Booking-Note' and the bill of lading clause refers to 'this Bill of Lading'. Therefore, in each case, the clause must be modified or read such that the clauses refer to 'this contract' (that is, the contract of carriage recorded in the recap emails) rather than 'this Booking-Note' or 'this Bill of Lading'. See, e.g., Adamastos Shipping Co Ltd v Anglos-Saxon Petroleum Co Ltd [1959] AC 133 at 154.
198 The override clause is a standard term of the booking note and it is incorporated into the contract of carriage to the extent it is not inconsistent with the express terms of that contract recorded in the recap emails. In that context, the reference to 'this Contract' in the override clause is to be read as a reference to the contract of carriage as recorded in the recap emails and it is that contract which prevails, not the terms of the booking note in themselves and unamended by the express terms of the parties' agreement. Therefore, it is the terms of the contract recorded in the recap emails that, in turn, incorporates so much of the standard terms of the booking note and bill of lading as are not inconsistent with the express terms of that agreement that prevail over prior arrangements and (or) the terms, conditions and exceptions of any bill of lading or sea waybill issued under that contract. Therefore, properly construed, the override clause is not a mechanism by which the general paramount clause in the booking note has precedence over the general paramount clause in the bill of lading.
199 There is, of course, an evident inconsistency in the terms of the general paramount clauses in that cl 3(a) of the booking note applies Arts 1 - 8 of the 1924 Convention in all circumstances, whereas cl 3(a) of the bill of lading only applies those Articles if there are no 'Hague Rules … as enacted in the country of shipment' or the 'Hague-Visby Rules' are not applied compulsorily under a national law. That apparent inconsistency must be resolved having regard to the context, subject matter and purpose of the provisions of the contract of carriage.
200 The primary judge appears to have accepted that the Hague-Visby Rules are given force of law in Ireland by the Irish Act: J[126]. However, the primary judge found that Ireland is not a 'contracting State' within the meaning of that expression in Art 10(a) and 10(b) of the Hague-Visby Rules: J[140]. Neither of those findings of fact was challenged in the appeal. Further, the primary judge was of the view that, on the proper construction of the general paramount clause in cl 3(a) of the bill of lading, the first sentence of that clause was inoperative because the Irish Act enacted the Hague-Visby Rules and not the Hague Rules: J[162]-[172].
201 It is fair to say that the text of cl 3(a) of the bill of lading is no model of clarity. There are certainly footholds in the text of the clause that support the primary judge's construction. However, there are also indications in the text that point in the opposite direction and these are, in my view, more consistent with commercial sense and the context, subject matter and purpose of the contract of carriage, made in 2019, to transport goods from a port in Ireland to a port in Australia.
202 In the following explanation of the construction of cl 3(a) of the bill of lading, to avoid confusion of terminology, I will refer to the Hague Rules, Visby Protocol, SDR Protocol and Hague-Visby Rules (as described in the reasons of Rares and SC Derrington JJ) as the 1924 Convention (Hague Rules), 1968 Protocol (Visby Protocol), 1979 Protocol (SDR Protocol) and the 1924 Convention, as amended by the 1968 Protocol and 1979 Protocol or the 1924 Convention, as amended (Hague-Visby Rules). I will refer to the 'Hague Rules' and 'Hague-Visby Rules' as those expressions are described in cl 3(a) of the bill of lading.
203 The strongest indication in favour of the primary judge's construction is, as he noted, that the clause uses 'Hague Rules' and 'Hague-Visby Rules' separately and deliberately within the same clause. Implicitly, when the clause refers to the 'Hague Rules' it means the 'Articles of the 1924 Convention' and when the clause refers to the 'Hague-Visby Rules' it means the 'Articles of 1924 Convention, as amended by the 1968 Protocol and 1979 Protocol'. However, whenever a 'label' or 'definition' is attached to an expression or descriptive phrase in a contract or other instrument it can distract attention away from the true meaning of the expression or phrase. In this respect, it is important to keep in mind that the label 'Hague Rules' is attached to the expression 'Hague Rules contained in the International Convention for the Unification of certain rules relating to Bills of Lading, dated Brussels, 25th August 1924'. The label 'Hague-Visby Rules' is attached to the expression 'International Brussels Convention 1924 as amended by the Protocols signed at Brussels on 23 February 1968 and 21 December 1979 (the Hague-Visby Rules)'.
204 In the first sentence of cl 3(a) the subject matter is conveyed in a compendious phrase by reference to the rules 'contained in' the 1924 Convention 'as enacted in the country of shipment'. In the third sentence the subject matter is conveyed in a compendious phrase by reference to 'trades' where the 1924 Convention, as amended by the Protocols, 'apply compulsorily'. The subject matter of the first sentence is 'rules' 'as enacted'. The subject matter of the third sentence is 'specific rules' that 'apply compulsorily'.
205 The text of the 1924 Convention was amended by the 1968 Protocol. Art 6 of that Protocol provided that 'As between the Parties to this Protocol the Convention and the Protocol shall be read and interpreted together as one single instrument.' The text was further amended by the 1979 Protocol. Art 1 of that Protocol provided that 'For the purpose of this Protocol, "Convention" means the International Convention for the unification of certain rules of law relating to bills of lading and its Protocol of signature, done at Brussels on 25th August 1924, as amended by the Protocol, done at Brussels on 23rd February 1968'. Therefore, in substance, there is one Convention. It was the Convention done at Brussels on 25 August 1924. That Convention was amended by the 1968 Protocol and 1979 Protocol. However, the Convention remained the International Convention for the unification of certain rules of law relating to bills of lading. Therefore, the ordinary meaning of the expression 'rules contained in the 1924 Convention' is capable, in the context of a contract involving the international carriage of goods by sea, of meaning 'rules contained in the 1924 Convention, [as amended from time to time] '.
206 Although an evident aim of the 1924 Convention and 1968 and 1979 Protocols was and is to bring about uniformity of the rules that apply to the international carriage of goods by sea and, to an extent, that aim has been achieved, there is significant variation in the national laws that apply rules to such carriage. There are States that are contracting States for the purposes of the 1924 Convention, but are not so for that Convention as amended by the 1968 Protocol or 1979 Protocol. There are States that are signatories to or that have acceded to the 1924 Convention that have not ratified it or have denounced it. There are States that have acceded to one or more of the Protocols, but have not ratified them. There are States that have done none of sign, accede or ratify the 1924 Convention or the amending Protocols, but have enacted legislation that gives effect to the 1924 Convention or that Convention, as amended by one or both of the Protocols. There are States which have enacted idiosyncratic legislation that gives effect to the 1924 Convention, as amended, but with modifications. COGSA 1991 is an example of such legislation.
207 In that context, the expression 'Hague Rules contained in the [1924 Convention], as enacted in the country of shipment' is capable of bearing a meaning that reflects that the 'Hague Rules … as enacted' may or may not apply the 1924 Convention as amended by the 1968 Protocol or 1979 Protocol. Also, an enactment of the country of shipment may not apply the rules contained in 1924 Convention, as amended, 'compulsorily' where the law of that jurisdiction applies the rules contained in 1924 Convention (unamended) or the law of that jurisdiction does not govern the contract of carriage. On the other hand, where certain national laws apply, the rules contained in the 1924 Convention, as amended, may apply 'compulsorily' if one of the criteria in Art 10 of the 1924 Convention, as amended, is satisfied. Therefore, while cl 3(a) appears to draw a distinction between the 1924 Convention (unamended) and the 1924 Convention, as amended, where that distinction is drawn the clause is addressing different subject matters. The first subject matter is addressed to enactments of the country of shipment which may vary in the manner in which the 1924 Convention (unamended or as amended) is enacted. The second subject matter is addressed specifically to the compulsory application of the 1924 Convention, as amended. Accordingly, the references to the 'Hague Rules' (1924 Convention) and 'Hague-Visby Rules' (1924 Convention, as amended) within the same clause does not necessarily imply that when addressed to enactments of the country of shipment it is intended to be a narrow reference to the rules contained in 1924 Convention (unamended).
208 There is also a third subject matter addressed in cl 3(a) where there is no enactment in the country of shipment and no compulsory application of the 1924 Convention, as amended. In that case, the second and last sentences of the clause indicate that the reference to the 'said Convention' is a reference to the rules contained in 1924 Convention (unamended). That is evident from the reference in the second sentence to Arts 1-8 of the 'said Convention' read with the reference in the last sentence to the 'Hague Rules' and limiting liability to £100 (GBP) sterling lawful money of the United Kingdom per package or unit. Art 4(5) of 1924 Convention (unamended) limits the liability of the carrier and the ship to '100 pounds sterling per package or unit'. Art 9 of the 1924 Convention (unamended) provides that the monetary units are taken to be gold value. Consequently, the last sentence of the clause is a reference to the circumstances in which only Arts 1-8 of the 1924 Convention (unamended) apply by agreement. Namely, where there is no enactment of the rules contained in the 1924 Convention (as amended or unamended) in the country of shipment and no compulsory application of the 1924 Convention, as amended.
209 These matters taken collectively lead me to conclude that, while cl 3(a) of the bill of lading separates the rules contained in the 1924 Convention (unamended) from the rules contained in the 1924 Convention, as amended by the 1968 and 1979 Protocols (Hague-Visby Rules), it does not follow that an enactment in the country of shipment which applies the rules contained in the 1924 Convention in an amended or modified form (whether as amended by the Protocols or modified in some other way) does not meet the description of 'Hague Rules contained in the [1924 Convention], as enacted' (emphasis added). Moreover, I would not readily conclude that the objective intention of commercial parties in 2019 was to confine the first sentence of the clause to enactments of the specific rules contained in the 1924 Convention (unamended). That appears to be quite an unlikely intention when, as of 2019, the 1924 Convention had been amended in 1968 and 1979 and many States had enacted legislation giving effect to the 1924 Convention, as amended, whether or not those States were also to be regarded as 'contracting States' for the purposes of Arts 10(a) and 10(b) of 1924 Convention, as amended.
210 The context, subject matter and purpose of the contract of carriage includes that it is a contract for the carriage of goods by sea from a port in Ireland to a port in Australia. Further, that English law is the law that the parties have chosen to govern that contract. The objective context, therefore, must include enactments of Ireland dealing with the subject matter of the 1924 Convention and COGSA 71 as part of English law by which the rules contained in the 1924 Convention, as amended, may apply compulsorily where one of the limbs of Art 10 of those rules is satisfied. That is, although cl 3(a) of the bill of lading is a standard term it is not to be construed in the abstract, but in the context of the terms of the contract of carriage and the objective purpose of that contract.
211 In context, the first sentence of cl 3(a) of the bill of lading is to be read as: 'the Hague Rules contained in the International Convention for the Unification of certain rules relating to Bills of Lading, dated Brussels, 25th August 1924, as enacted in [Ireland], shall apply to this [contract]'. The Irish Act was an enactment of the country of shipment. The Irish Act gave the 1924 Convention, as amended by the 1968 and 1979 Protocols, the force of law. The Irish Act was the only enactment of the country of shipment that could possibly meet the description of 'Hague Rules contained in the [1924 Convention] as enacted in [Ireland]'. Therefore, in context, reasonable business people would understand the first sentence of cl 3(a) of the bill of lading to mean that the Irish Act applies to the contract. Thereby, the provisions of the Irish Act, with all necessary amendments, apply to the contract of carriage, by agreement. As the Irish Act gave the Hague-Visby Rules force of law, the Hague-Visby Rules apply to the contract of carriage by agreement.
212 The rules contained in the 1924 Convention, as amended by the 1968 and 1979 Protocols, could apply compulsorily if those rules apply as a matter of English law (as the proper law of the contract) or, perhaps, as matter of Irish or Australian law if a mandatory law of one of those jurisdictions were to apply the Hague-Visby Rules. In those circumstances, the rules contained in the 1924 Convention, as amended, would be incorporated into the contract of carriage, with all necessary amendments, as terms of the contract. That is, the Hague-Visby Rules would apply by agreement even if separately those rules apply by law. In that case, the Hague-Visby Rules would displace the Irish Act both as a matter of contract and application of a mandatory national law.
213 For completeness, I should indicate that I have not overlooked Poralu's submissions to the primary judge, repeated in the appeal, to the effect that the first sentence of cl 3(a) should be construed as I have interpreted it in reliance on English Court of Appeal reasons in Yemgas FZCO and Others v Superior Pescadores SA (The Superior Pescadores) [2016] EWCA Civ 101; [2016] 1 Lloyd's Rep 561. Unlike cl 3(a) of the bill of lading, the paramount clause under consideration in that case referred only to the Hague Rules and there was no reference within that clause to the Hague-Visby Rules. Lord Justice Longmore (Tomlinson and McCombe LJJ agreeing) expressed the view (at [37]) that 'any case, in which a bill of lading issued in 2008 incorporating the Hague Rules as enacted in the country of shipment has (as here) enacted the Hague-Visby Rules, should be regarded as a case which is subject to the Hague-Visby Rules rather than the (old) Hague Rules'.
214 In The Superior Pescadores reference was made to a number of other authorities which had considered the operation of paramount clauses. These included consideration of the decision of Tomlinson LJ (at first instance) in Parsons Corporation and Others v CV Scheepvaatonderneming Happy Ranger and Others [2001] 2 Lloyd's Rep 530 (Happy Ranger QBD). In that case, Tomlinson LJ considered a paramount clause in similar terms to cl 3(a) of the bill of lading. Tomlinson LJ (at [31]) rejected a submission made in that case to the effect that the Hague-Visby Rules were to be regarded as the Hague Rules as enacted in Italy (the country of shipment in that case) because a 'clear distinction is drawn between the Hague and Hague-Visby Rules' within the clause.
215 As to the reasoning in Happy Ranger QBD, in The Superior Pescadores Longmore LJ (at [35]) observed that he did 'not regard this paragraph of the judgment (para [31]) as saying that the words "as enacted in the country of shipment" could not refer to the Hague-Visby Rules if, for example, the particular paramount clause made no specific reference to the Hague-Visby Rules in some other part of the same clause but those Rules had in fact been enacted in the country of shipment'. In The Superior Pescadores, Tomlinson LJ observed (at [49]-[51]) that he may have expressed himself differently in the Happy Ranger QBD based on a correct understanding that the 1924 Convention was amended by the 1968 and 1979 Protocols. Further, that he did not intend to say that the Hague Rules as enacted in the country of shipment could not refer to the Hague-Visby Rules even if the particular paramount clause made no specific reference in some other part of the same clause, but those Rules had in fact been enacted in the country of shipment', but he considered his approach to the construction of the paramount clause in that case remained correct.
216 The primary judge made reference to Poralu's submissions and to the passages in The Superior Pescadores and Happy Ranger QBD to which I have referred as well as other aspects of the reasoning in The Superior Pescadores before concluding:
171 Since the paramount clause in the present case, as identified, refers separately and deliberately to the Hague Rules and the Hague-Visby Rules, the conclusion in The Superior Pescadores is inapplicable, but the reasoning of the Court of Appeal in relation to other cases where there was such a differentiation nevertheless applies.
172 In the circumstances, since the Hague Rules were not enacted in Ireland, the first sentence of the paramount clause has no application, and the second sentence does. On that basis, Art 10(c) is not satisfied.
217 Notwithstanding that the competing construction is available for the reasons given by the primary judge, I have come to a different conclusion of the meaning of cl 3(a) of the bill of lading and a different conclusion to that Tomlinson LJ reached on a similarly worded paramount clause in Happy Ranger QBD. For the reasons already given, I am not persuaded that the difference in the use of 'Hague Rules' and 'Hague-Visby Rules' is a compelling reason to exclude the Irish Act from the first sentence of the clause. Further, I am also not persuaded that the construction that another court has placed on a different, albeit similar, clause in a different contract made in a different commercial context and at a different time is of significant assistance to the construction of the relevant clause in this case. The same observation applies to the construction of the clause under consideration in The Superior Pescadores.
218 As I have said earlier, cl 3(a) of the bill of lading must be construed as a term incorporated by reference into the contract of carriage governed by English law, in context and with regard to the subject matter and purpose of the contract; to carry goods by sea from Ireland to Australia. When regard is had to context and purpose, 'the Hague Rules contained in the [1924 Convention], as enacted in [Ireland]' means the Irish Act. Therefore, subject to the possible 'compulsory' application of the Hague-Visby Rules by operation of an applicable national law, the Irish Act applies to the contract of carriage. A consequence is that the part of cl 3(a) of the bill of lading and cl 3(a) of the booking note that purport to apply Arts I - VIII of the 1924 Convention and limit liability of the carrier to £100 (GBP) per package or unit must be read as simply not applicable to the contract of carriage in this case.