Tozer Kemsley & Millbourn (A/asia) Pty Ltd v Collier's Interstate Transport Service Ltd

Tozer Kemsley & Millbourn (A/asia) Pty Ltd v Collier's Interstate Transport Service Ltd - [1956] HCA 6 - HCA 1956 case summary — Zoe

[4]

The action is against a bailee for damages for failing to deliver up goods in accordance with the bailment. The goods in question consist of one hundred and thirty-one bundles of galvanized iron, about 13 tons 2 cwt. in weight and of a value of £2,096. The defendant, it appears, takes merchandize into storage at certain stores at Brooklyn near Melbourne. On 24th October 1951 the defendant received into these stores for warehousing one thousand four hundred and forty-four bundles of galvanized iron in respect of which it gave two storage warrants one for one thousand and fifty bundles that had formed part of a cargo of one ship and another warrant for three hundred and ninety-four bundles that had formed part of a cargo of a second ship. Then on 20th November 1951 the defendant received a further six hundred and six bundles of galvanized iron into storage that came from a third ship. The warrants were all in the same form. Each acknowledged that the defendant held the goods it mentioned to the order of the Commonwealth Bank and that they were "deliverable to order by indorsement hereon". At the foot of the conditions was a note "Please present when lifting goods. Stored in open not responsible for any damage". The conditions contained a clause exempting the defendant from responsibility for loss or damage arising from a number of causes including "any other loss or damage (whether caused by or arising from any negligence of the proprietors or of their servants or agents or otherwise) which can be covered by insurance by the owner or depositor of the goods". The Commonwealth Bank indorsed the warrants "after payment of all charges deliver to the order of" the plaintiff. The plaintiff did not indorse the warrants with its order. It is not disputed by the plaintiff that the defendant redelivered to the plaintiff or its order all the bundles of galvanized iron except one hundred and thirty-one which formed part of the one thousand and fifty bundles the subject of the storage warrant first-mentioned. In its pleading the plaintiff said that on or about 4th June 1952 the defendant delivered the one hundred and thirty-one bundles to one Cann (mistakenly called Cannon in the pleadings) or otherwise parted with possession thereof and in consequence the plaintiff was wrongfully deprived of the goods, and the defendant broke its duty as a warehouseman or alternatively converted the goods. These allegations were denied by the defendant but alternatively it pleaded in effect that on or about 27th or 28th May 1952 the plaintiff instructed the defendant to deliver the goods in dispute to the carrier of a person named Duncan and that Cann was the carrier of Duncan. By way of particulars under this alternative allegation the defendant said that Duncan had authorized a man named Power to collect the bundles of iron from the defendant and that Cann was acting as servant or agent of Power. The defendant also relied on the condition of exemption contained in the warrant.

[5]

It appears from the evidence of the plaintiff's accountant, the only witness called, that it sold parcels of the iron to various people in comparatively small quantities and authorized deliveries of the respective quantities to them. A considerable amount of galvanized iron remained and the plaintiff determined to store it elsewhere. According to the witness he arranged through one Maynard that the iron should be stored by a concern called the McRae Trading Co. in a building in Exhibition Street, Melbourne. Maynard told him that there was a man named Duncan who had two trucks and that he would cart the iron at one pound a ton when his trucks were not occupied with their normal duties. The witness then telephoned to the manager of the defendant's stores and, according to his evidence, said that the plaintiff had arranged with a man called Duncan who had two trucks to cart the iron for it and put it under cover. He said that one or both of the trucks would be calling for the iron and asked the manager to deliver the iron to these two drivers of Duncan. Next day, 28th May 1952, the witness wrote on behalf of the plaintiff a letter to the defendant at Brooklyn stating that it thereby authorized the defendant to deliver the iron, identifying it by reference to the names of the ships and the numbers of the warrants, which the defendant held on its behalf "to the carrier of Mr. Duncan as mentioned during our telephone conversation yesterday". Maynard gave the instructions to Duncan. At that stage the witness was not aware that Duncan was part of McRae Trading Co. but later he found that Duncan apparently acted as the executive or manager of that business. At its premises the witness inspected the iron of which some one hundred and sixty-five tons was there. In consequence of a communication from McRae Trading Co. (not given, of course, in evidence) the witness telephoned to the manager of the defendant's stores. As a result the latter wrote a letter, marked received on 9th July 1952, inclosing "as promised during our telephone conversation of today's date a list of deliveries made on your behalf up to 30th June 1952".

[6]

The list enclosed gave the date and docket number of the deliveries the number of bundles and sometimes some dimensions of the iron and also the name, apparently of the business house, to whom the delivery was made. These names are in a column headed "delivered to". In the case of about two dozen consecutive deliveries the name given is "Wright Stevenson" (sic.). No reference to or explanation of this name is made anywhere in the evidence or exhibits or otherwise. Among the deliveries put down against Wright Stephenson are two of 4th June 1952, one of sixty bundles in respect of docket numbered 15828 and the other of seventy-one bundles in respect of docket numbered 15822. The witness says that he compared the list with the information from McRae Trading Co. and telephoned to the defendant's store manager whom he told that there were two deliveries on 4th June representing one hundred and thirty-one bundles of iron which were not included in the list from McRae Trading Co. He asked the manager if he could explain it and whether he had a delivery instruction for them. The manager replied that he would look at his records. After doing so he telephoned to the witness and said that the delivery dockets showed a signature like Cann. In answer to questions, he said it was not the same name as appeared on dockets of the previous days and that he had not found a delivery order for the two truck loads, but, he said, "We have a thing written in hand in pencil". The plaintiff's counsel examining the witness then said that he desired to introduce this document in evidence by consent at this stage. The defendant's counsel said that he had no objection to producing it or putting it in and that he did not want to say any more about it at that stage. A policeman who was called but not sworn then produced a document which was put in evidence without more. It is a small tear-off pad with writing on the top page. There is no date and it says simply "Tozer Kemsley (the plaintiff) to McRae Trading Co., 345 Exhibition Street, 140 Bundles 2 cwt. each 14 ton of galvanized corragated (sic.) iron any size Dawson". All this is in block letters. The plaintiff called for and put in evidence the two delivery dockets numbered respectively 15822 and 15828 which are both dated 4th July 1952. Each purports to be a receipt from Brooklyn on account of the plaintiff of the iron, in the one case giving particulars of seventy-one bundles and the other of sixty. Each is signed A. L. Cann. During the telephone conversation between the defendant's store manager and the witness he told the latter that he did not connect Cann's signature with previous deliveries; it was a different man and a different truck, a red Chevrolet truck as far as he could remember. The witness gave evidence that he had never heard of anyone called Cann in connection with the plaintiff or Duncan or otherwise in the matter and that no authority or instruction had been given for the delivery of the iron to any one except Duncan. The witness was asked without objection: "In respect of those one hundred and thirty-one bundles did your company or anybody on its behalf receive any of it?" and answered "No".

[9]

In a bailment of this description the onus lies on a bailor who complains of the loss of the goods through misdelivery to prove by reasonable evidence that the bailee did not perform his undertaking; that is to say that he did not deliver the goods in accordance with the terms of the contract of bailment: cf. Griffiths v. Lee [1] ; Gilbart v. Dale [2] ; Midland Railway Co. v. Bromley [3] . To prove so much does not establish conclusively that the bailee is responsible; for the bailee may have some affirmative answer. There are features of the evidence which perhaps might seem to make this distinction unimportant. When a defendant determines to rely on the deficiencies of the plaintiff's case, rather than to go into evidence, it sometimes occurs that circumstances which do appear in evidence assume a significance, failing explanation, which otherwise they might never possess. Here we have evidence of statements emanating from the defendant as to the identity of the person to whom it delivered the one hundred and thirty-one bundles of iron which unexplained seem inconsistent one with another. The list of deliveries named Wright Stephenson. The answers to interrogatories said it was A. L. Cann or Cannon. Then in its letter of 15th September 1952 it said it was someone called Power. The defendant produced delivery dockets signed A. L. Cann but at the same time reference was made to a strange piece of paper as obtained on the occasion of the delivery. It bears the name Dawson and gives an incorrect but approximate number of bundles. Might it not be a fair presumptive inference from all this that the defendant really did not know to whom it had given the goods and under what supposed authority? If so a finding that it was responsible for the loss of the goods would be proper. It is a solution of the case which at first sight is not unattractive. If there is any unreality in the inference, it could be ascribed to the failure of the defendant to call evidence and for that it must take responsibility. On the other hand it must be borne in mind that the letter of the plaintiff's solicitors confines the question of liability to the inquiry whether the person to whom the delivery was made was a carrier of Duncan and asserts that he had no written authority from Duncan and did not use his truck. In the next place it is clear enough that the iron was actually picked up by a man signing the name of A. L. Cann and there is no improbability in the hypothesis that Power may be the name of Cann's employer or principal. Again it is likely enough that the reference to Wright Stephenson is a mere office mistake. In spite, therefore, of the attractiveness of the solution, one should hesitate to adopt it. To base a positive finding of fact on such circumstances is probably too dangerous. Dean J., who tried the action, said that he was not satisfied that the carrier who picked up the one hundred and thirty-one bundles of iron was not a carrier of Duncan and decided against the plaintiff on the ground that it had not proved that the defendant did not redeliver the goods to a carrier of Duncan, because it did not appear whether the man to whom they were delivered by the defendant was or was not authorized to receive them.

[11]

But if the liability of the defendant rests on the existence in a person signing as Cann of an authority (whether as servant or agent of Power or otherwise) to take delivery of the goods on behalf of the plaintiff in virtue of the plaintiff's instruction to the defendant to deliver to a driver of Duncan, is it true that the burden lies on the plaintiff of establishing the absence of such an authority? The question brings into importance the distinction that has been mentioned. The burden which in a case of alleged misdelivery the law places upon the bailor and upon persons claiming under him is to adduce evidence of a failure to deliver in accordance with the terms of the contract of bailment. Under the indorsement of the storage warrant, the defendant's obligation was to deliver to the order of the plaintiff. Clearly the delivery was not made to the plaintiff and the plaintiff did not indorse the warrant in favour of any other person and it was not presented. By "the plaintiff" is here meant the officers or servants of the plaintiff company acting in the course of their authority. Delivery to the plaintiff in the strict sense was not contemplated. The McRae Trading Co. was another independent storage proprietor, another bailee. Duncan in fact formed part of that organization but in any case the drivers he sent were not the plaintiff's servants. Without indorsement of the storage warrants the defendant was not bound to deliver the iron to the McRae Trading Co. or to a carrier of Duncan. Still less was it bound to deliver it to a carrier deriving his authority through Power from Duncan, as apparently the defendant claims that Cann did. To do that involved a deviation from the strict terms of the contract of bailment. True it is, of course, that if the plaintiff assented to the deviation it would be bound by it no less than by a strict fulfilment. But the point is that the defendant's answer to the plaintiff's claim is not simply a denial of an allegation that the terms of the bailment were not performed. Its answer in truth is that it delivered the goods at the request of the plaintiff otherwise than in accordance with the strict obligation of the contract or to a person in fact possessing an authority from the plaintiff to receive the goods on its behalf. That is something beyond a mere traverse and involves an affirmative plea every material part of which the defendant has the onus of proving. It is a difference which might be unimportant once the facts were known, but we are not here dealing with the result of the true facts. We do not know them. We are dealing entirely with the question upon whom lies the burden of carrying proofs forward. For such a purpose the distinction is material. Once the defendant delivers otherwise than in strict accordance with the terms of the contract of bailment and goes beyond or outside what it is bound to do it cannot rest simply on the contract, but must adduce the evidence that what it did was in actual accordance with some request of the plaintiff or was otherwise effectual, authorized or justified. The defendant did not offer evidence in support of this position. It is true that it invoked the condition of the storage warrant which absolves it from responsibility for loss from certain causes and for any other loss which can be covered by insurance by the owner or depositor of the goods. No attention was paid in the evidence to the question whether the loss in question could be so covered by insurance by the owner or depositor, whatever may be meant by the phrase. But apart from that, exemption clauses of this sort are construed strictly and in the absence of express words or necessary intendment it would be going too far to construe the clause as excusing loss by misdelivery or delivery to an unauthorized person.

[15]

The one hundred and thirty-one bundles in suit were delivered by the defendant to one Cann in two lots, one lot comprising seventy-one bundles and the other sixty, on 4th June 1952. All that is definitely proved with respect to these deliveries is that Cann signed for them as received by him from the Brooklyn store on account of the plaintiff. It would appear that before taking delivery Cann presented a manuscript document to someone at the store. This document was in the following terms: "Tozer, Kemsley to McRae Trading Co. 345 Exhibition St. 140 bundles 2 cwt. each, 14 ton of galvanized corrugated iron any size" and was signed "Dawson". The identity of Dawson was not proved. Apart from tendering a letter from it to the plaintiff dated 15th September 1952 and the reply thereto from the plaintiff's solicitors dated 17th September 1952 the defendant did not give any evidence. Watt gave evidence that towards the end of July 1952 he rang Dalton and told him that he had compared the list of deliveries out of the Brooklyn store with the list of deliveries into McRae's store and had found that there were two deliveries out of the defendant's store representing one hundred and thirty-one bundles of iron which were not included on the new list from McRae's and asked him if he could explain it. Prior to this conversation Watt had received from the defendant a document containing an itemized list of the deliveries of the iron from its store at Brooklyn on behalf of the plaintiff and this list included two deliveries of sixty and seventy-one bundles on 4th June 1952, the document stating that each delivery was made to Wright Stephenson. Watt told Dalton that these were the deliveries to which he was referring. Watt asked Dalton if he had a delivery instruction for these particular deliveries on 4th June and Dalton said, "We would have an instruction, we always have an instruction, but of course I will have to look back on the records". Dalton rang Watt back later that day and said that he had checked these records and that the docket showed a signature that looked like "Cann" but it was not a very distinct signature. Watt asked Dalton if that was the same name as appeared on the delivery dockets on the previous days and Dalton said, "No. It is a different name". Watt then asked Dalton if he had found the delivery order for these two truckloads of iron and Dalton said, "No. We have not got a delivery order but we have a thing written in hand in pencil on a bit of paper". Watt then asked Dalton (apparently referring to three deliveries made on 3rd June 1952 and possibly to two deliveries made on 28th May 1952) whether the truck that picked up these two loads on 4th June was the same truck as had been picking up the iron on the previous days and Dalton said: "No, but we keep the registration number of every truck that comes into our yard". Watt asked Dalton for the registration number of the truck which picked up the two loads and Dalton gave it to Watt. Watt asked Dalton whether Cann's signature "rang a bell" with him in regard to previous deliveries and Dalton said, "No. It was a different man - different truck". Dalton said that it was a red Chevrolet truck. Watt was then asked: "Do you know or did you then know anyone called Cann or Cannon as being connected with your company or Duncan or anything to do with this business" and answered, "No, never heard of him". He was also asked whether he or the plaintiff gave any authority for the delivery of any iron at any time to anyone called Cann or Cannon or Dawson and again answered "No". Watt also said that in respect of the one hundred and thirty-one bundles neither his company nor anybody on its behalf ever received any of this iron. Thus far the evidence goes and no further for the two letters tendered by the defendant could not be evidence except in so far as either of them contained an admission by the party on whose behalf it was written. But neither of them contained any admissions. According to the defendant Duncan had told it that he gave one Power authority to pick up the two loads in question and that Power admitted their receipt and was ready to pay for them. If Power had done so, that would have ended the dispute, but he never did. According to the letter from the plaintiff's solicitors Duncan denied he had ever authorized Power or anyone else to collect the iron.

[16]

At the hearing before Dean J. the principal concern of each party appears to have been to wage a battle of tactics and to force the other to call Duncan, Power and Cann or one or more of them rather than to seek to elicit the whole truth. In the end the plaintiff called Watt alone, and the defendant called no one, not even Dalton. Accordingly there is obscurity where there could easily be light and the question that vexed Dean J. and now vexes us is the tiresome question whether the plaintiff has given sufficient evidence to prove its case. It has proved the value of the one hundred and thirty-one bundles to be £2,096 and the statement by Watt that neither the plaintiff nor anybody on its behalf ever received any of this iron. As the form in which this evidence was given was not objected to and Watt was not cross-examined upon it, it is sufficient to prove that the iron delivered to Cann by the defendant was never delivered by him to the plaintiff or to anyone on its behalf. The duty of a bailee under a contract of custody for reward is clear. The statement that has come to be classic is that of Lord Halsbury in the House of Lords in Morison, Pollexfen & Blair v. Walton [1] : "Here there was a bailment made to a particular person, a bailment for hire and reward, and the bailee was bound to shew that he took reasonable and proper care for the due security and proper delivery of that bailment; the proof of that rested upon him". This statement has been cited in many subsequent cases of which it is sufficient to mention Joseph Travers & Sons Ltd. v. Cooper [1] ; Coldman v. Hill [2] ; Brook's Wharf & Bull Wharf Ltd. v. Goodman Bros. [3] ; Gutter v. Tait [4] . Dean J. after citing a number of cases which show that the initial onus is on the bailor to prove that the goods have not been re-delivered to him pursuant to the contract of bailment said: "In this case plaintiff has not proved that defendant did not re-deliver the goods to a carrier of Duncan, because it does not appear whether the man to whom they were delivered by defendant was or was not authorized by Duncan to receive them" [5] . With his Honour's statement that the onus is on the bailor to prove that the bailee has not re-delivered the goods pursuant to the contract of bailment we could not quarrel. But in order that the iron should be duly re-delivered to the plaintiff it had to be delivered to the plaintiff itself or its order, which admittedly was not done, or delivered, pursuant to the authority of 28th May 1952, to the carrier of Duncan. The obligation rested on the defendant to prove that it had exercised due care to see that it delivered the goods to a person to whom it was authorized to deliver them - that is to say, in the present case, to a driver authorized by Duncan to collect them. The evidence proves that the defendant failed to exercise that care. Cann did not produce any authority from the plaintiff or from Duncan to collect the one hundred and thirty-one bundles. He produced a manuscript authority signed by an unidentified person, Dawson, to collect one hundred and forty bundles. The itemized statement of deliveries sent by the defendant to Watt indicated that the one hundred and thirty-one bundles had been delivered to Wright Stephenson. There is no evidence connecting Wright Stephenson with the plaintiff. Presumably they were carriers. If the goods were delivered to Cann as their employee they were delivered to a person not authorized by the plaintiff to collect them. If Wright Stephenson's name can be left out of account, the position is that the goods were delivered to Cann who, if he were authorized by anyone to collect them, so far as the evidence goes, was authorized by Dawson. Cann had no independent authority to collect the goods. He could only do so if he were authorized by Duncan. On the evidence the defendant delivered the one hundred and thirty-one bundles to Cann without taking any proper care to be satisfied that he was so authorized. In Joseph Travers & Sons Ltd. v. Cooper [1] , Buckley L.J. said: "The defendant as bailee of the goods is responsible for their return to their owner. If he failed to return them it rested upon him to prove that he did take reasonable and proper care of the goods he has not discharged himself of that onus" [2] . In Coldman v. Hill [3] , Scrutton L.J. said that the bailee must show that the goods were lost without default on his part. Dean J. relied on the Midland Railway Co. v. Bromley [4] as supporting the view that the onus was on the plaintiff to prove that Cann was not authorized by Duncan to collect the iron and that, the evidence being equally consistent with Cann being or not being so authorized, the plaintiff had not discharged the onus of proving misdelivery. In that case the question was whether the defendant had placed the portmanteau on the departure platform of the B. & E. Railway which would have constituted due delivery. The evidence was as consistent with the portmanteau having been lost after it had been placed there by the porter of the Midland Railway Co. as it was with the portmanteau having been lost whilst it was taken there by the porter. The plaintiff had therefore failed to discharge the onus of proving that the portmanteau had not been delivered in accordance with the contract. In the present case the evidence is not equally consistent with Cann having been authorized or not authorized by Duncan to collect the iron. The evidence is only consistent with Cann having been authorized by Dawson or possibly by Wright Stephenson to do so. There is no evidence that Cann was authorized by Duncan to collect it. The defendant was bound to exercise due care to see that the iron was delivered to a carrier of Duncan. On the evidence it failed to do so.

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Judgment (41 paragraphs)

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Cited By (6)