Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon

Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon - [1978] HCA 8 - HCA 1978 case summary — Zoe

[42]

30. For my part, I find no difficulty in interpreting the arrangement made by the bill of lading and its acceptance by the consignor as providing that if, in fact, the appellant stevedored the cargo, leaving aside for the moment what the stevedoring involved, the appellant should have the benefit of the clauses of the bill including the benefit of the time limitation expressed in cl. 17 of the bill of lading. I am unable to treat the clauses of the bill of lading as in any respect an unaccepted but acceptable offer by consignor to stevedore. Indeed, I do not think the bill can be interpreted as containing an offer at large by the consignor. The consignor and the appellant as stevedore were ad idem through the carrier's agency upon the acceptance by the consignor of the bill of lading as to the protection the stevedore should have in the event that it stevedored the consignment. But this consensus lacked the essential of consideration. The appellant through the bill of lading made no promise to stevedore the cargo. Thus, whilst I would not analyse the situation obtaining on the acceptance of the bill of lading as an exchange of promises, I would not analyse it as merely the making of an offer susceptible of acceptance by an act of the stevedore done in purported acceptance of the offer. For this reason I have described the bill of lading in so far as the carrier there purports to act for the appellant as an arrangement. To agree with another that, in the event that the other acts in a particular way, that other shall be entitled to stated protective provisions only needs performance by the doing of the specified act or acts to become a binding contract. Whether or not the arrangement is susceptible of unilateral disavowal before the stated act is done need not be discussed. Here the act was done. The performance of the act or acts at the one moment satisfied the need for consideration and attracted the agreed terms. For myself, and with due respect to those who find comfort in them, I find the descriptions "unilateral and bilateral" or "mutual" unhelpful in the resolution of this case. Indeed, the use of them seems to assume that they are mutually exclusive terms and together cover all are mutually exclusive terms and together cover all possibilities. But I do not think they do. Indeed, this bill of lading, as I read it, indicates in my opinion that they do not. As I see it, we have here an arrangement, a compact with agreed conditions to attend the performance of certain acts, which are not promised to be done. True enough that, until such performance, the consensus has nothing upon which to operate. But that is its essential characteristic, to provide an agreed consequence to future action should that action take place: to attach conditions to a relationship arising from conduct. If one desires to use the terms, it could be said that the arrangement is mutual: it is bilateral: to it there are two parties both agreeing to the terms of the intended consequence, on the one hand the consignor and on the other the stevedore acting through its authorized agent, the carrier. The performance of the contemplated act both supplies the occasion for those conditions to operate and the consideration which makes the arrangement contractual. The document containing the basic terms and conditions for stevedoring at Sydney to which I earlier referred is another instance of an arrangement made between parties to regulate their relationship in the event that one of them in fact became the stevedore of the other's ship. Neither promised the other anything: the ship did not engage to employ the stevedore or the stevedore to discharge the ship and stevedore its cargo. (at p244)

[45]

33. Consequently, in my opinion, the passage from the judgment of Glass J.A., which I have quoted, mistakes the function of consideration in the decision in The Eurymedon [1974] UKPC 1; (1975) AC 154 and in the remarks of Lord Reid in Scruttons Ltd. v. Midland Silicones Ltd. (1962) AC, at p 474 . It further follows, it seems to me, that the remarks of this Court in Australian Woollen Mills Pty. Ltd. v. The Commonwealth [1954] HCA 20; (1954) 92 CLR 424, at p 457 have not been properly applied. In this case, it is found as a fact that the carrier, in making the agreement with the consignor through the bill of lading, was indeed contracting for itself and also for the stevedore and with its antecedent authority. There is thus, in my opinion, in this case no need for the stevedore to prove that he was acting on an offer otherwise not accepted in order to establish the existence of an agreement with the consignor. The consensus existed on the consignor's acceptance of the bill apart altogether from any subsequent conduct on the part of the stevedore. It resulted from the carrier's action on behalf of the stevedore and with its authority. This situation is, in my opinion, in high contrast to those in R. v. Clarke [1927] HCA 47; (1927) 40 CLR 227 and Australian Woollen Mills Pty. Ltd. v. The Commonwealth [1954] HCA 20; (1954) 92 CLR 424 . In those cases, what was considered was an offer to be accepted by conduct, a recognized manner of creating the contractual relation by an offer of a promise for an act. Of course, in such a case, the act if done must be capable of being regarded as having been done as an acceptance of the offer. But there is a fundamental difference between providing consideration to support a consensual arrangement otherwise made and the acceptance by performance of an act of an offer not otherwise accepted. It seems to me that because their Lordships of the Privy Council in The Eurymedon recognized this distinction, there is no elaboration in their reasons for their advice in that case of the statement that consideration had been provided by the stevedore. Clearly, their Lordships declined to regard the agreement of the consignor made through the bill of lading and the activity of the stevedore as gratuitous. Referring to the facts of the case, their Lordships said (1975) AC, at p 167 :

[80]

9. The genesis of The Eurymedon lies in what was said by Lord Reid in Midland Silicones Ltd. v. Scruttons Ltd. [1961] UKHL 4; (1962) AC 446, at p 474 . Lord Reid there suggested a means whereby a stevedore might possibly be given the benefit of those immunities which by its bill of lading a carrier might secure for itself as against a shipper. In all the successive judgments in The Eurymedon Lord Reid's suggestion was accepted as authoritative and the question was whether the clause in fact answered the description of what Lord Reid had suggested, in particular whether, when applied to a discharging stevedore, Lord Reid's requirement as to overcoming "any difficulties about consideration moving from the stevedore" had been satisfied. Whereas Beattie J. overcame these difficulties by discerning a Carlill-type unilateral contract, the majority of their Lordships, while acknowledging no substantially different analysis, preferred to express the relationship as involving an initial "bargain" between and shipper and stevedore, albeit devoid of consideration moving from the latter. That has, no doubt, the advantage that it better accords with the language of the clause, couched as it is in terms of an immediately concluded agreement but, as I would understand it, it differs from a Carlilltype unilateral contract only in that persons to whom the offer is made are present at the time of its making (in the present case, in the shape of the carrier who is their agent to receive the offer). It is their presence and their assent (if that be not too strong a word) to the making of the offer to them that enabled their Lordships to say that although no binding agreement had been concluded a "bargain" had been struck which might mature into a "complete" contract if one to whom the offer was made performs part of the work contemplated under the bill of lading and thereby, at the same time, provides consideration in exchange for the shipper's promise which is involved in the offer. (at p257)

[84]

13. There is a further public policy consideration which at one and the same time bears upon the question of international commercial comity. While it is in the interests of great fleet-owning nations that their ocean carriers, and the servants and independent contractors which they employ, should be as fully protected as possible from liability at the suit of shippers and consignees, the interests of those nations which rely upon those fleets for their import and export trade is to the contrary. It was in response to such national interests that the United States of America and Australia, which both fell into the latter category, enacted the Harter Act of 1893 and our own Sea Carriage of Goods Act 1904, measures which circumscribed the carrier's freedom to contract out of liability. Each was more stringent than were the subsequent Hague Rules. Many nations, particularly developing nations, have come to regard those Rules as unduly favouring carriers at the expense of cargo owners, especially because of the quite restricted duration of the carrier's compulsory period of responsibility which they impose, ending as it does immediately upon discharge. It is not clear to me that Australian courts should regard it as in any way in the public interest that carriers' exemption clauses, effective before loading and after discharge, should be accorded any benevolent interpretation, either so as to benefit carriers or so as to benefit independent contractors by extending the scope of such clauses to include such contractors. If public policy does not dictate such a course, neither do considerations of comity. To read the transactions of the seminars on International Trade organized by the Attorney-General's Department is to appreciate the powerful movement among trading nations in a contrary direction, towards extension of the period during which both the ocean carrier and its land-based agents are to be denied the ability freely to exclude themselves from liability for damage to or loss of cargo. The draft Convention on carriage of goods by sea adopted at the ninth session of the United Nations Commission on International Trade Law (UNCITRAL) in 1976 provides evidence of this. (at p259)

[85]

14. Finally, in relation to international comity, it is worth noting that uniformity is little likely to be promoted by a clause such as the present cl. 2. The decision in The Eurymedon turned upon quite special facts, that the appellant stevedore not only habitually acted as such for the carrier in New Zealand but was its parent, so that, as Lord Wilberforce observed (1975) AC, at p 167 , "The carrier was, indisputably, authorised by the appellant to contract as its agent for the purposes" of the relevant clause. It was the absence of such circumstances which recently led the British Columbia Supreme Court in Calkins & Burke Ltd. v. Empire Stevedoring Co. Ltd. (1976) 4 WWR 337 to distinguish The Eurymedon, the carrier in the Canadian case not being shown to have had the stevedore's authority to contract on its behalf. It is to be noted that in that case the 1971 decision of the Supreme Court of Canada in Canadian General Electric Co. Ltd. v. Pickford & Black Ltd. (1970) 14 DLR (3d) 372 which applied to stevedores the principles in Midland Silicones [1961] UKHL 4; (1962) AC 446 , was preferred to that of The Eurymedon [1974] UKPC 1; (1975) AC 154 - see at p. 350. Not only will circumstances vary from case to case but recent American experience suggests that clauses employed in United States bills of lading are, as might be expected, by no means uniform. In a number of recent United States cases the outcome, so far as concerns the ability of stevedores to rely upon examination clauses, has varied depending upon the precise wording of the clause. Thus the decision to which Lord Wilberforce referred when he said that "Commercial considerations should have the same force on both sides of the Pacific", that of a United States District Court in Carle & Montanari Inc. v. Amercian Export Isbrandtsen Lines Inc. (1968) 1 Lloyd's Rep 260 may be contrasted with that of the United States Supreme Court in Krawill Machinery Corpn. v. Robert C. Herd & Co. Inc. (1959) 1 Lloyd's Rep 305 (where the bill of lading did not specifically extend protection to the stevedore), that of the United States Court of Appeals, Second Circuit in The Mormacstar (1973) 2 Lloyd's Rep 485 (where the bill of lading defined "carrier" so as to include all persons rendering services in connexion with performance of the contract) and that of the United States Court of Appeals, Ninth Circuit in Tessler Bros (B.C.) Ltd. v. Italpacific Line and Matson Terminals Inc. (1975) 1 Lloyd's Rep 210 (where the bill of lading specifically referred to stevedores). In the first two of these cases the stevedores were denied the protection of exemption clauses but they gained their protection in the third. (at p260)

[98]

26. The learned trial judge also referred to York Products Pty. Ltd. v. Gilchrist Watt & Sanderson Pty. Ltd. (1968) 3 NSWR 551; (1970) 2 Lloyd's Rep 1 and to the unreported New South Wales case of Keith Bray Pty. Ltd. v. Hamburg Amerikanische. He did so for the purpose of distinguishing them. In the first of these the question whether there had been due delivery under the bill of lading did not arise for decision; the main issue was whether or not the stevedore was a bailee of the goods. The bill of lading contained a provision that "when the goods are discharged from the vessel, they shall be at their own risk and expense; such discharge shall constitute complete delivery and performance under this contract and the carrier shall be freed from any further responsibility". Of that provision Asprey J.A. said that it "expressly provided that the discharge of the goods from the vessel shall constitute complete delivery and performance under the bill of lading as well as providing that the ship should be freed from any further responsibility. The wording is so plain and unambiguous that ordinarily there could not be any doubt as to its legal effect" (1968) 3 NSWR, at p 556; (1970) 2 Lloyd's Rep 1 . His Honour then cited Hiskens' Case [1914] HCA 56; (1914) 18 CLR 646 . In fact the provision appeared in a clause similar in subject matter to cl. 7 of the present bill of lading, and a submission seeking to limit its effect to the events set out in that clause explains his Honour's qualification, "ordinarily" etc. In the event, however, his Honour saw little merit in that submission, saying that he "would be of the view that upon the true construction of the bill of lading, personal delivery of the goods to the holder of the bill of lading was not required of the ship . . . ". His Honour in the upshot found it unnecessary finally to decide the matter one way or the other since the question for him was exclusively whether or not the stevedore was a bailee. His Honour's observations, agreed in by Walsh J.A., although obiter, do provide support for the interpretation which I have given to the present bill of lading. The York Products Case went on appeal to the Privy Council (1968) 3 NSWR 551; (1970) 2 Lloyd's Rep 1 , but their Lordships confined their observations to the liability of the stevedore. (at p264)

[162]

27. The question then arises whether condition 17 gives the appellant the benefit of the limitation contained therein in cases where the carrier is otherwise not liable or only in cases where there is a concurrent liability in the carrier. In our opinion, the reasoning underlying the implication in The Eurymedon of a contract between shipper and stevedore is that there can be found to exist an agreement between shipper and stevedore that where in particular circumstances the carrier has the benefit of a clause giving immunity or limitation, then in those circumstances the stevedore shall be entitled to rely on that same immunity or limitation to which the circumstances have given rise. The reasoning underlying the finding of a contract between shipper and stevedore is that the immunity or limitation is transferred, that what has been called a vicarious immunity or limitation of action arises in favour of the stevedore. It would be a great extension of The Eurymedon doctrine to apply it to a case where the immunity or limitation of action is not one which the carrier, its servants and agents (including independent contractors) all could claim, but is one where no liability would arise in the circumstances in the carrier. It is not an extension which in our opinion ought to be made. There was something commercially unreal in the way legal principle could be applied to give a sea-carrier an immunity but at the same time to deny it to his servant or his agent even though an immunity in their favour was intended. The benefit of the immunity could for instance be lost to the carrier if under the general law or as a result of a particular contract he was bound to indemnify his servant or agent. However, if the negligence of the independent contractor is not negligence for which the carrier would, in the absence of the immunity or limitation clauses, be vicariously liable but is the sole responsibility of the independent contractor, the expressed reasons of the majority in The Eurymedon cease to be applicable. The case remains one where it is proper to apply the course of decision relied on by the minority. The rule in Tweddle v. Atkinson (1861) 1 B & S 393 (121 ER 762) can properly be applied, especially when recourse may properly be had to the rule that immunity and limitation clauses in contracts will be strictly construed. The various considerations referred to by Sheppard J. at the conclusion of his judgment strongly support a conclusion that The Eurymedon should not be applied to a case where the carrier has completed the due performance of its obligations of carriage and unloading and a stevedore or wharfinger has undertaken independently of the carrier the storage of the goods on the local wharf. (at p281)

[163]

28. If the case were one of misdelivery and not of negligence in the safekeeping of the goods on the wharf, the appellant might be able to claim the benefit of cl. 17. The stevedore was the agent of the carrier to deliver the goods to the consignee in exchange for a copy of the bill of lading. A delivery of the goods to a stranger without requiring the production and exchange of a copy of the bill of lading would be an act which, even though unauthorized by the carrier, might create a vicarious liability in the carrier. Further, it might be outside the immunity provisions of the bill of lading on the true construction of the latter. See Sze Hai Tong Bank Ltd. v. Rambler Cycle Co. Ltd. (1959) AC 576 . We say "might" create a vicarious liability because we do not find it necessary to determine whether in the concluding words of cl. 5 the words "occurring while the goods are not in the actual custody of the Carrier" govern the words "non-delivery or misdelivery" as well as the words "loss of or damage to the goods". The facts of the present case do not support a case of misdelivery of the kind considered in the last mentioned case or in Sydney City Council v. West [1965] HCA 68; (1965) 114 CLR 481 . In the latter case, it will be recalled, the Council was held not to be exonerated from liability for the loss of the respondent's vehicle by an exemption clause which excluded liability for loss of a vehicle (however such loss may arise or be caused). The clause was one of the conditions on a parking ticket issued to the respondent when he parked his car in the Council's parking station. The ticket also bore the notation "IMPORTANT. This ticket must be presented for time stamping and payment before taking delivery of the vehicle". The attendant permitted a stranger who presented a duplicate ticket relating to another vehicle to drive the vehicle out of the station. It was held that the exemption clause did not exempt the appellant Council from liability for the misdelivery. Barwick C.J. and Taylor J. said (1965) 114 CLR, at pp 488-489 :

At a glance

Court

Decision date

Source

Judgment (180 paragraphs)

Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon (Aust) Pty Ltd [1978] HCA 8; (1977) 139 CLR 231 (3 April 1978)

Parties

Legislation Cited (3)

Cases Cited (8)