Thomas National Transport (Melbourne) Pty Ltd v May & Baker

Thomas National Transport (Melbourne) Pty Ltd v May & Baker - [1966] HCA 46 - HCA 1966 case summary — Zoe

[11]

The evidence in the case and the findings of the learned trial judge thereon are fully set out in his Honour's reasons and it is unnecessary that we should again fully traverse the facts. But it is desirable that, at least, some of the salient matters should be referred to. The packages in question were the subject of some eight consignments to nominated consignees in New South Wales, South Australia, Tasmania, and Western Australia and the various contracts for their carriage from the respondent's premises in Melbourne to the respective consignees were made in Melbourne. It was the practice of T.N.T., which professed to carry on an inter-State transport service, to employ independent contractors to pick up packages in and about Melbourne for transport to a central depot maintained by it where they would be sorted and assembled upon trucks used for inter-State haulage. The appellant Pay was the independent contractor habitually engaged in the pick-up service in that area of Melbourne where the respondent's premises were situated. In operating this service Pay made daily calls at the respondent's premises to pick up outward-bound packages and although the vehicle which he used for this purpose belonged to him it bore the markings of T.N.T. In these circumstances, there was nothing to indicate that Pay was an independent contractor and the plaintiff was unaware that he was. As already appears the packages, the subject of the eight consignments, were picked up from the plaintiff's premises by Pay on 21st August 1962, but these were not the only packages picked up by him that day. In the course of his pick-up service his normal practice was to call at the premises of a number of customers of T.N.T. and he usually reached the respondent's premises about 4 p.m. In fact he called at the respondent's premises at about that hour on the day in question. His ordinary routine was, however, likely to be interrupted by directions from T.N.T. received by him by means of a two-way radio with which his vehicle was equipped. There seems to have been no such interruption to his ordinary routine on the day in question and after leaving the respondent's premises he proceeded, in turn, to other customers of T.N.T. where he picked up further consignments. By the time he had done this it was about 5.40 p.m. Knowing that T.N.T.'s depot usually closed about 5.30 p.m. he attempted to communicate with T.N.T. in order to find out whether he should bring in his load that night but he was unsuccessful in his attempt. Apparently the depot was closed for the night and, thereupon, he took the load to his home with the intention of delivering it to the depot on the following morning. It appears from the evidence that he usually proceeded from his pick-up round direct to the depot but there had been about twenty occasions during the preceding twelve months when he had not done so. On these occasions he had been somewhat late in completing his pick-up round and he had been directed by radio by T.N.T. to take his load to his home and bring it to the depot on the following morning. When, on the day in question, he took his load home he parked his vehicle in a garage in the grounds of and alongside his home. The garage was constructed of steel and fibro cement sheeting; it was about twenty feet in length and ten feet wide and the only entrance to it was through the front doors. The tray of Pay's vehicle was about eight feet wide and when his truck was backed in there was a margin of about one foot on either side and the front of the truck protruded through the doorway. The load was covered with a tarpaulin properly secured. He inspected the load at about 9.30 p.m. before going to bed and it was then in the same condition as it had been earlier. But about 4 a.m. a neighbour saw flames issuing from the garage and roused Pay who caused the fire brigade to be called. In the meantime, he attempted to extinguish the fire with water from a garden hose. When the fire had been extinguished it was found that the respondent's packages had, together with other goods on the vehicle, been damaged. There is no suggestion that the fire was in any way due to the nature of any of the goods on the vehicle, the vehicle was apparently in good order and condition and the evidence does not enable it to be said how the fire originated. According to his Honour "from the whole of the evidence it must be assumed that the fire originated from some external source". It remains at this stage to be said that the respondent's goods - worth approximately £7,000 - were damaged to the extent of an amount in excess of £4,000.

[13]

Upon these briefly related facts it is convenient to deal first of all with the question of T.N.T.'s liability for the proved damages. For this purpose it is necessary to consider what was involved in T.N.T.'s undertaking to carry the goods from the respondent's premises in Melbourne to the various consignees in the other States. This it proceeded to do, as a first step in the carriage, by providing a "pick-up" service in Melbourne. It is not contended that this was not a permissible way of performing part of its obligations under the contract whether the "pick-up" service was conducted by its own servants or by an independent contractor. But however the service was conducted it would be necessary that the first stage of the journey should be from the respondent's premises to T.N.T.'s depot. Obviously the goods would be transported by the "pick-up" service to T.N.T.'s depot in Melbourne in order that they might be sorted and assembled with other goods accepted for carriage upon appropriate trucks for carriage to the other States. It was known to the respondent that T.N.T. maintained a "substantial place" in Footscray Road for this very purpose - a place which is described by the learned trial judge in the following passage: "The depot of T.N.T. is on quite a large area of ground fronting on to the New Footscray Road. It is fairly well secured, being protected either by a wall abutting on the street or by a high fence topped with barbed wire around the curtilage. Generally speaking, sorting and loading at the depot ceased about 5.30 p.m. on Mondays to Thursdays. At the material time, the various consignments were frequently held in the depot overnight but there was a resident caretaker whose duty it was to keep a constant watch on the goods during the hours when the depot was closed. The depot was also furnished with fire extinguishers. There was no sprinkler system. It was constructed of fibro cement sheeting and steel". It was proved that it was Pay's usual practice to take his load at the conclusion of his "pick-up" round to this depot, but, as already appears, there had been about twenty occasions during the preceding twelve months upon which he had been permitted by T.N.T. to depart from this practice. But it is not suggested that the respondent knew of or assented to its goods being taken on any occasion to Pay's home and kept there during the night. Nor is there any suggestion that it was aware that T.N.T.'s depot closed at any particular time and, therefore, that it was not, after that time, available for the receipt of goods which had been picked up. Further there is no evidence that the course adopted on this occasion was justified by some particular custom or usage in the trade. What, therefore, must be presumed to have been the intention of the parties concerning the disposition of the goods at the end of the first stage of their journey? Undoubtedly, notwithstanding the presence in the various contracts of the exempting clauses, T.N.T. impliedly undertook to exercise reasonable care for the safety of the goods at all stages of the various journeys upon which it had undertaken to carry them. This is not of prime importance in the case except in so far as it throws light on the manner in which it was intended that the "pick-up" service should operate. It was, of course, immaterial whether the "pick-up" service - which expression connotes a picking up of the goods by T.N.T. for on-carriage - was conducted by a servant of T.N.T. or by an independent contractor. But it seems clear that if it had been conducted by a servant there can be no warrant for asserting that T.N.T.'s contract with the respondent authorized the former to direct its servant to take any goods which he had picked up to his home and store them there overnight. Such a direction would be clearly inconsistent with the primary obligation which T.N.T. had assumed. The fact that the "pick-up" service was conducted by an independent contractor - although this fact was not known to the respondent - does not in our view affect the matter. It seems to us that it must have been taken to have been implicit in the contract which T.N.T. made with the respondent that its goods would be taken to T.N.T.'s depot and that the depot would be available for their reception at the conclusion of the pick-up round. It is, to our minds, unthinkable that it was within the contemplation of the parties that an extremely valuable consignment of goods was to be kept overnight by T.N.T.'s servant or sub-contractor in the yard of a suburban cottage. On the contrary, the only conclusion consistent with its primary obligation was that they would be taken to and received in the depot at the conclusion of the "pick-up" round. This conclusion is unaffected by consideration of the clause - incorporated in a number of the contracts - that the carrier "is hereby expressly authorized by the Consignor to carry all goods or to have them carried by any method as he in his absolute discretion deems fit and notwithstanding any instruction verbal or otherwise of the Consignor that the goods are to be carried by another method". The italics are ours and it seems to us that the expression "method", which must mean method of carriage, is quite inappropriate to cover the circumstances of this case. What the respondent complains of is not the method which was employed to carry the goods but, rather, that the goods were carried, not to T.N.T.'s depot but to Pay's home and kept there overnight.

[19]

Any inquiry into Pay's conduct must commence with an examination of the position in which he found himself at about 5.40 p.m. on 21st August 1962. There is, of course, no suggestion that he was guilty of any want of reasonable care in not having completed his pick-up at an earlier hour so that he might have proceeded to T.N.T.'s depot whilst it was still open. But at 5.40 p.m. on that day he was unable to communicate with T.N.T. and the depot was closed. What, in these circumstances, was he to do with his load? To us it is apparent that he had no alternative and that the course which he took was a course that any reasonably prudent man would have taken in the circumstances. It is true that the garage at his home may be thought to have provided insufficient protection for his load during the night but it was, as far as it can be seen from the evidence, the best protection available. Indeed it was, for all practical purposes, the only protection offering. The suggestion made in argument that it was negligent on his part to place his truck in the garage with the consequent restriction of access to the load is without substance when the matter is seen in perspective as also is the suggestion that there was a lack of care in failing to have a fire extinguisher available in the garage. The only other suggestion that was made is that Pay should have inspected the load at regular intervals during the night after 9.30 p.m. when he last inspected it but, it seems to us, that the risk of fire in the circumstances did not reasonably require that such a specific precaution should have been taken. There was nothing in the character of the goods, and there was nothing in the character or condition of the vehicle itself, which might have led him to foresee any unusual risk of fire and from the nature of the damage it seems that his Honour was satisfied that the cause was "external". The risk of fire from such a cause was entirely remote. On the whole, we are of the opinion that, upon the evidence which his Honour accepted, there was no lack of reasonable care on Pay's part and that, in the circumstances, he did all that could have been expected of a reasonably prudent man. Consequently, we are of opinion that the evidence which was accepted did operate to discharge the onus which lay upon him.

[22]

The first-named appellant, Thomas National Transport (Melbourne) Proprietary Limited, is a company which it will be convenient to call "T.N.T.". It has been spoken of as a carrier. This, without more, is misleading. Its business is not so much the carrying of goods by its own servants as procuring for its customers the carriage of their goods from one State to another. But it is not a mere forwarding agent, because it has, by servants or sub-contractors, actual possession of goods as a bailee. This Victorian company is part of a large organization, there being in the other States associated companies having similar names. The company employs carriers - at the relevant time there were some twenty or more - to pick up goods in and around Melbourne for despatch to other States. Goods are brought by these local carriers to a depot in Footscray, Melbourne. There they are sorted for onward movement. The onward carriage is sometimes by road, sometimes by railway; in the case of goods for Tasmania it is by sea. The goods that go by road are taken from the depot by carriers regularly employed by T.N.T. and by them carried to the State of destination. It is said that most of these inter-State carriers and all the local carriers are sub-contractors not servants of T.N.T. They and the local carriers are however regularly and exclusively engaged in carrying for T.N.T.: their vehicles bear markings identifying them with T.N.T.: and in carrying out their tasks the local carriers are given directions by T.N.T., they being connected with the depot by two-way radio. Whether, for the purposes of T.N.T. being liable in tort for their actions, these carriers would in law be classified as independent contractors or as servants is a question that, in the way I see the case, does not have to be decided. I shall assume them to be correctly called sub-contractors. The second-named appellant, Pay, is one of the local carriers regularly employed by T.N.T. to collect goods from its customers and bring them to its depot.

[72]

A common carrier by land is deemed to contract to carry by his customary route if no route be expressly stipulated. And the strictness of the rule about deviations in contracts of carriage by sea has been imported by analogy into the contracts of carriage by land. And now the term "deviation" has come to be used sometimes to describe not only departures from a carrier's geographical route, but also other radical breaches of his contract. But, except in the case of deviations from the contract route, it inverts the question to ask of a departure in method, Is it a deviation? - and say that if it is, it is a breach of a term that lies at the root of the contract. The correct question is, Is this departure a radical breach of the contract? If it is, it may sometimes be conveniently called a deviation simply because it has the consequences which by law geographical deviations have long had in contracts of carriage. An illustration is Bontex Knitting Works Ltd. v. St. Johns Garage [1] . There goods were stolen from a van when the driver left it unattended for an hour and went to lunch. An exemption clause did not avail the defendants because the contract had expressly provided for the delivery of the goods "forthwith and immediately". Lord Wilberforce has said of this: "The decision may be justified on the basis that there was a breach of contract equivalent to a deviation, but if it goes beyond this I would regard it as of doubtful validity": Suisse Atlantique Société [2] . On whatever basis it is to be justified, the decision in the Bontex Knitting Works Case [3] has I think no direct bearing on the present case although it was relied upon by the respondent. There the learned trial judge, Lewis J., put his decision on the basis that there had been a breach of a term of the contract that the goods would be delivered forthwith or immediately, and the carrier was being paid on a time basis. In the Court of Appeal his decision was affirmed, Scott L.J. saying that there had been "a radical departure from the terms of the contract". That there was a "breach of an express agreement for immediate delivery" was the ground on which Lord Denning used the case as an illustration in Sze Hai Tong Bank Ltd. v. Rambler Cycle Co. Ltd. [4] .

[82]

It is true that when the local carriers could not get to the depot with their loads before closing time they generally got in touch with the depot to inquire whether goods that they had were required that night. On other occasions Pay had done this: before taking goods to his home for the night he had communicated with the depot and been told the goods he had were not wanted until the morning. It may be that in not informing the depot earlier in the day of his position on this occasion Pay failed in his duty to T.N.T. But, even if this were so, and I do not think it was established, I do not see how it had become part of the contract between T.N.T. and May & Baker that Pay would in every detail do what T.N.T. expected of him. T.N.T.'s routine arrangements with its local carriers, its expectation that if running late they would communicate with the depot, were quite unknown to May & Baker, and were not as I see it the basis of its contract with T.N.T. Nevertheless the fact of Pay's not having express instructions that his load was not needed that night was in argument urged as a critical consideration. It was said that Pay had taken the goods to his garage without authority, which is a somewhat misleading way of saying that he had not been expressly told that the depot would not be open to receive them but had learnt that it was already closed because his call was not answered. The garage would not have been any more safe a place, the risk of fire there would not have been any less, had he spoken to the depot and been told that it would not be open beyond the usual closing time. I do not think that Pay's failure on this occasion to obtain express instructions before taking the goods home constituted a breach by T.N.T. of its contract with May & Baker, certainly not a radical breach equivalent in effect to a deviation by a carrier. I can see no ground for denying to T.N.T. the benefit of the exemption clauses endorsed on the freight note. Let it be assumed that Pay as T.N.T.'s agent did not take reasonable care for the safety of May & Baker's goods. If that were so, then doubtless T.N.T. would be liable for the damage unless exonerated by the terms of its contract with May & Baker: see e.g. John v. Bacon [1] . Let it be assumed that T.N.T. itself in closing its depot before all goods collected by its sub-contractors were brought there failed to take reasonable measures for the safety of the goods. Again T.N.T. would be liable unless protected by its contract. It may be that if T.N.T. had exercised due care for the safety of the goods entrusted to it, it would have kept its depot open every night until all goods that it had directed its local carriers to collect were received there - or, putting it another way, that it would not have sent carriers to pick up goods which could not be brought to the depot before closing time. To allow goods that it had contracted to have delivered to consignees to be in the course of their journey unprotected in a shed in a suburban backyard may well be described as negligence.

[83]

But condemning its conduct as careless does not make T.N.T. legally liable for its consequences. It requires no citation of authority to show that negligence in the performance of a contract is not a fundamental departure from the contract which deprives the negligent party of the benefit of an exemption clause which upon its true construction covers liability for negligence. The position would be different if the goods had been intentionally set on fire or given away by T.N.T. A contract must be read as a whole. If it provides that a party shall not be liable for loss or damage and if upon its true construction this provision extends to the party's own negligence in performing his contract, then it is impossible to rely upon the obligation to use due care that would otherwise have been implied by law. Kitto J., in The Council of the City of Sydney v. West [2] , referred to the discerning discussion by Doctor Coote in his work Exception Clauses of the problem in juristic theory that thus arises. The question is whether the effect of an exception clause in a contract is to absolve a party from liability for the consequences of a breach of duty, or whether its effect is to define substantively the limits of his duty by negativing obligations that the law would otherwise impose and undertakings that it would otherwise imply. The answer in any given case may, I think, depend upon the actual words of the contract. In theory the effect of a contract that goods are to be at owner's risk and that the contractor will accept no responsibility for their loss or damage "for any reason whatsoever", which I take to mean "however occurring", is, I consider, to define the terms on which the goods are accepted for carriage, and to negate an implied obligation of due care. It seems to me therefore that those provisions of the freight note that have been called exception clauses do not operate to qualify the effect of a breach of a contractual obligation independently existing. Rather they determine the total content of the contractual obligation. But, however regarded in final analysis, they are part and parcel of the contract and must be given their full effect.

[84]

The question then is as to the construction of the provisions which state that T.N.T. assumes no liability for loss or damage to goods "in transit" or "in storage". In my view, goods received for carriage pursuant to the contract contained in the freight note were "in transit" from the time they were picked up at the place described under "From" on the freight note until they were delivered at the place described under "To" - provided that at any time in the interim when the question arose they were where they were in the course of being moved from the one place to the other. I do not think that they ceased to be in transit when they were taken to Pay's garage for the night, even if that was a negligent performance of the transit. The learned trial judge, as I understand his reasoning, did not hold that the exemption clause had been terminated by a radical breach of the contract. In this I consider he was right. What he said was that upon its true construction May & Baker's goods were not in transit or in storage when in Pay's garage. In this I consider he was wrong. He said that the words "in transit" must be read in the light of the "usual procedure" adopted by T.N.T. He did not say that to be in transit they had to be taken to the depot before nightfall. What, as I understand it, he held, was that they were not in transit at the time of the fire because they had not been delivered by Pay to the depot that night and Pay had had no express authority or instruction not to do so. But, as I have already said, I am, with respect to his Honour, unable to put the weight that he did on the fact that Pay had not been told the goods were not required at the depot that night. Had he been told to bring them in next morning and had taken them to his garage, as on former occasions he had done, would they have been in transit? If not, why not? And if they would have been in transit in his garage had he been told the depot would be closed and that they were not required until morning, why were they not in transit there when he had been unable to get in touch with the depot because it was already closed? The argument for the respondent did not explain this. Had the goods been in the depot they would, it is said, have been in transit or in storage; had they been in Pay's garage for the night because he had been told to bring them in next morning they would still have been in transit or in storage; but, as it was, they were neither in transit nor in storage. I am unable to agree with this.

At a glance

Court

Decision date

Before

Source

Judgment (92 paragraphs)

Parties

Cited By (1)