Clements & Marshall Pty Ltd v Roomes
[1989] TASSC 90
•2 May 1989
Serial No. B12/1989
List “B”
COURT: SUPREME COURT OF TASMANIA
CITATION: Clements & Marshall Pty Ltd v Roomes [1989] TASSC 90; B12/1989
PARTIES: CLEMENTS & MARSHALL PTY LTD
v
ROOMES
FILE NO/S: 191/1986
DELIVERED ON: 2 May 1989
JUDGMENT OF: Crawford J
Judgment Number: B12/1989
Number of paragraphs: 29
Serial No B12/1989
File No 191/1986
CLEMENTS & MARSHALL PTY LTD v ROOMES
REASONS FOR JUDGMENT CRAWFORD J
12 May 1989
The plaintiff has sued the defendants, S V & E Roomes trading as Roomes Transport, for agreed damages amounting to $13, 384. 54. The action has been brought in contract and in tort. It arises out of the carriage by the transport business operated by the defendants of the plaintiff's cartons of apples in a container, which was on a semi trailer behind a prime mover driven by the defendants' employee, Robert Gordon, on the Huon Highway from Huonville to Hobart. Two accidents happened involving the semi trailer and prime mover on a corner referred to in evidence as Kyalami Corner, which is about two kilometres north of Grove .
The evidence established that in the morning of 6 September 1985, Mr Gordon was driving the prime mover up an incline and around a very tight corner to his right, which was almost a U–bend. There was an upward bank on Mr Gordon's left, at the edge of the highway and a drop on Mr Gordon's right, at the other edge of the highway. Mr Gordon allowed the prime mover to be too close to the left edge of the highway. The trailer, still bearing the container, tipped over to the left, onto its side so that it was lying against the bank on the side of the highway. Senior Constable Smith attended at the scene of the accident. He observed that the container was still attached to the trailer by means of bolts. The prime mover had torn free of the trailer and was about twenty metres or so away. The trailer and container did not appear to be damaged, but the turntable on the prime mover had been damaged. The police officer described the damage as involving the turntable being tilted up and it appeared to him that anchor bolts around the chassis had given way The cartons of apples were inside the sealed container and it is impossible to say whether they were damaged in that first accident.
Two excavators were brought to the scene. They lifted the trailer, bearing the container, back onto its wheels. An excavator bucket was used to push the turntable flat. The trailer was reconnected to the prime mover, but because of the damage the connection could not be locked. With the assistance of the excavators, the prime mover and trailer were reversed off the highway into a side road, a distance of only twenty metres or so away. Senior Constable Smith told Mr Gordon that he should not drive the prime mover away with the trailer behind, because of the damage to the locking mechanism. Mr Gordon was similarly instructed by the second defendant, Mrs Roomes. However within about two hours Mr Gordon did drive the prime mover, towing the semi–trailer with its container of apples. He moved out onto the highway. Within a few metres the trailer became detached from the prime mover and fell over the drop on the other side of the highway, the same corner, coming to rest on rocks about thirty to forty feet below the highway. The trailer was extensively damaged. The sides of the container were bulging and distorted. Presumably most of the damage to the cartons of apples was caused by this second accident.
I am satisfied that both accidents were caused by the negligence of the defendants' employee, Mr Gordon. The first accident was so caused because Mr Gordon drove without proper care and attention. More particularly he drove too close to the edge of the road, as a result whereof the trailer tipped over, tearing loose from the prime mover. The second accident was caused by Mr Gordon's negligence in that he drove the prime mover, towing the trailer, when he knew or ought to have known that the trailer could not properly be locked onto the prime mover, as a result whereof the trailer broke free and fell down the drop.
The evidence does not establish that the defendants were common carriers but they were carriers for reward. Subject to the matters of defence raised by the defendants, they were under a contractual duty to carry the goods without negligence' the burden of disproving negligence being on them. Joseph Traders & Sons Limited v Cooper [1915] 1 KB 73; WLR Traders (London) Ltd v British and Northern Shipping Agency Ltd and I Leftley Ltd [1955] 1 Lloyd's Rep 554.
They are therefore liable to the plaintiff in tort and in contract, unless one of the defences succeeds.
The defendants have pleaded the following matters of defence:—
"8 … it was a term and condition of the said Agreement of Carriage that the Plaintiff would assume the risk of injury or damage to its property whilst it was being carried by the Defendants and that it would not look to the Defendants for reimbursement in respect of any damage caused.
9 Alternatively to paragraph 8 above the Plaintiff by its conduct in carrying such losses over at least ten years of dealing, is now estopped from claiming the present loss.
PARTICULARS
(a) Since at least 1975 in the event of loss or damage to its property whilst carried by the Defendants the Plaintiff has carried the risk of such losses and not sought to recover them from the Defendants.
(b) In reliance upon that course of dealing the Defendants did not insure against loss or damage to the Plaintiff's property.
(c) The Defendants thereby acted to their detriment in not insuring the goods, the subject of the present claim.
(d) The Plaintiff intended the Defendants to act, or knew that the Defendants were acting, as set out above."
Most of the defendants' business came from the plaintiff. The plaintiff expected and received priority so far as service was concerned. At any one time the defendants operated as many as ten to fourteen vehicles. At the time of the accidents they had seven or eight.
The evidence established that the apples were to be carried by the defendants to the wharf at Hobart, from where they were to be shipped to Brisbane.
Evidence was given by the first defendant that the defendants' cartage business commenced in the early seventies. Within a few months, the business commenced to carry fruit for the plaintiff. The usual practice was that one of the plaintiff's employees would telephone and ask the defendants to arrange for the carriage of a number of containers from a place in Tasmania to a place in another State, such as Brisbane and Sydney. The defendants would then arrange for space on a boat and for the shipping company to invoice the plaintiff. The defendants raised the paper work necessary for the shipping and usually arranged for another transport carrier at the port of destination to pick up the fruit from the wharf and deliver it to the market or buyer. The defendants' own trucks, if available, would carry the fruit to the Hobart wharf, but if they were unavailable the defendants would sub–contract the work to another carrier. Except in the case of frozen goods, the defendants were the only carriers of potatoes and fruit engaged by the plaintiffs in Southern Tasmania.
The defendants did not arrange any form of insurance cover for any section of the transport of fruit for the plaintiff. The plaintiff did not request the defendants to arrange any form of insurance. The following evidence was given by Mr Roomes:—
"Q Were you given to understand anything by anyone from the plaintiff company as to the existence of insurance or otherwise?
A Oh several times. That they had insurance, yes.
Q Yes. Can you remember who told you that?
A Oh it was years and years ago, would be Mr Bain.
Q What was his position?
A He was one of the directors and I even spoke to Charles Clements at one stage about insurance and it was just an understanding that they covered it.
Q Can you remember what specifically was said apart from the understanding you—what was said. What was said?
A Well one of the questions is asked on how much I charged them per unit or per box or per container and there was discussion at some time that if insurance—we were just talking generally, if insurance had to be arranged, it was worth more than the freight was on each consignment and they reckoned, you know, they obviously could get it a lot cheaper than I could ever arrange the insurance."
He explained that he was referring to a conversation with the plaintiff's Southern general manager for selling and transportation of bulk products, which took place in the first few weeks of his relationship with the plaintiff.
The evidence did not establish that anything was ever said that the defendants would be required to bear the risk of damage or loss to goods. The converse was not established either, that is to say, there was no evidence that it was said that the defendants would not have to bear such a risk.
Mr B G Anning gave evidence that he has been the plaintiff's export manager for the last eight years. He said that the company had a blanket insurance policy covering the movement of all of the company's products, a deductible or excess of $500 applying. He was not aware that the question of the defendants arranging for insurance over a load had ever been discussed with them, but he would not necessarily have known of it. He believed it was common knowledge between the plaintiff and the defendants that the plaintiff had its own insurance cover with a $500 excess.
Mr Roomes was asked whether his firm carried "special loads" other than apples, for the plaintiff. He said that was so and he was asked what arrangements were made in respect of insurance for those special loads. He said that he was asked if it was at all possible to arrange insurance on two items. One was a boiler from Cascade and the other a boiler from Wynyard. In both cases it was cheaper for the plaintiff to arrange it than for the defendants to do so. He obtained a price for the insurance but the plaintiff's employee, Mr Younger, told Mr Roomes that he could obviously arrange it more cheaply.
The evidence satisfies me that it was mutually understood by the plaintiff's employees and the defendants that the plaintiff's fruit was insured against damage under an insurance policy arranged by the plaintiff. It is clear that the defendants were under no obligation to the plaintiff to arrange for the fruit to be insured. But there is nothing in the evidence which enables me to find that it was agreed by the plaintiff and the defendants, either expressly or by implication, that the plaintiff would assume the risk of injury or damage to its property which would otherwise have been carried by the defendants, that is the risk that the fruit would be lost or damaged by the negligence of the defendants.
The owner of goods may require insurance, not only in case the carrier is negligent, but to protect the owner from the consequences of loss or damage however caused. There is no basis for finding that the parties have impliedly agreed that the carrier will be released from his common law liability for negligence simply because they have an understanding that the owner will arrange for his goods to be insured.
It might be possible to imply the contractual term submitted on behalf of the defendants, if there was evidence enabling me to hold that it was a term of the contract between the plaintiff and the defendants that the plaintiff would effect insurance against accidental loss or damage, that is to say evidence that the plaintiff contractually promised to do so. In such circumstances it might be open to a court to hold that the promise was embodied into the contract for the purpose of protecting both the plaintiff and the defendants and that the plaintiff's promise to insure ran to the benefit of the defendants. If the evidence established such matters a Court might well consider the case in much the same way as did the Court of Appeal in Mark Rowlands Ltd v Berni Inns Ltd [1985] 3 WLR 964 particularly at pp973 et seq. In that case a covenant in a lease that the landlord would insure the leased building against loss or damage by fire was held, in the context of other terms in the lease, to give rise to an implication that the insurance would be for the joint benefit of the landlord and the tenant. But the evidence in this case does not go far enough to enable the necessary implication to be drawn in favour of the defendants. I cannot conclude from the evidence that the plaintiff contractually bound itself to the defendants to arrange insurance.
In London and North Western Railway Company v Neilson [1922] 2 AC 263, Lord Buckmaster said at p266:—
"My Lords, the common law imposes upon the carriers of goods definite and well–known liabilities for the protection of owners. These liabilities are frequently modified by the terms of express contracts, but except to the extent to which plain language effects alteration they still remain and cannot be removed by subtle implications or ambiguous words. No doubt has found place in any of the judgments in this case as to the soundness of this principle and none exists."
In Turner v Civil Service Supply Association Limited [1926] 1 KB 50, Sankey J made similar comments at p56:—
"But just as a common carrier may exempt himself from liability by using express and unambiguous language, so also a carrier of the class with whom we are now dealing may exempt himself from liability by using proper words … As far as this part of the discussion is concerned I think the familiar doctrine of law applies—namely, that if a man wishes to exempt himself from liability he must say so in clear and unambiguous terms."
It is not necessary for me to be as strict as these pronouncements might demand. There is simply insufficient evidence from which the implied term, submitted for the defendants, can be drawn.
Mr Roomes' evidence left me with the impression that he had never understood his common law liability and therefore did not seek exemption from it in accepting goods for carriage from customers. His evidence was simply that he never arranged insurance unless he was requested by a customer to do so.
I next deal with the defence of estoppel. Mr Roomes' evidence was that the claim made in this case was the first claim ever made by the plaintiff for damage to its products, and he was questioned about earlier occasions of damage. One such occasion involved eight tons of apples being carried on the Midland Highway and finishing up on the side of the road. It was a single vehicle accident but he did not know how it occurred. The value of the fruit was between $10,000 and $15,000. The fruit was apparently abandoned. He reported the accident to the plaintiff and nothing further was said about it. His firm was paid its freight charge notwithstanding the loss of the apples. His evidence did not establish whether the accident was the fault of his firm. Another occasion involved two drums of apple concentrate falling off the back of a truck on a corner. The drums were of value about $500 each. He reported the accident to the plaintiff's Huonville manager. I presume that the drums had not been properly secured, but whether that was the fault of the defendants I am unable to say. In any event it was a minor accident. On another occasion Mr Roomes was driving a fork truck and two drums of apple concentrate fell off. The accident was reported to the plaintiff's factory manager. The defendants may have been blameless, the drums falling off the truck when it went into a pot–hole in the plaintiff's private road. There was another occasion when Mr Roomes was driving a prime mover pulling a semi trailer on which were carried about 1000 cartons, each containing six 1–gallon cans of pie (stewed) apple. The load was worth "thousands of dollars". As he drove round a corner the bottom row of cans collapsed and the whole load fell over. Fault for that accident was not established by the evidence. The plaintiff sent a gang of men to clean up the road. Mr Roomes also described as a fairly regular occasion, plastic buckets of cooked apple "bowing out", or "blowing out everywhere" or "the bottom row collapsed and the whole lot fell over". I am unable to find that such incidents were the fault of the defendants.
In regards to all such occasions the accidents were orally reported to the plaintiff. The defendants never submitted written reports. According to Mr Roomes the plaintiff "usually sent a representative out to immediately inspect it before I touched it".
None of the evidence of previous occasions of damage to the plaintiff's goods established that any particular damage was caused by the negligence of the defendants. I am unable to conclude that the fact that no claim Was made against the defendants for damage was for any reason other than that the damage was not caused by the defendants' negligence. Further, the evidence has not established that the defendants did not insure because of the failure of the plaintiff to make claims for damage. Rather the evidence shows that the defendants did not insure because they were not requested by the plaintiff to do so in the same way that they did not insure when they were carrying goods for other customers, unless those customers requested them to do so. Nor has it been established that the plaintiff intended or knew that the defendants would not have their common law liability protected by insurance.
The defendants' counsel relied on the following passage from the judgment of Brennan J in Waltons Stores (Interstate) Ltd v Maher (1987–1988) 164 CLR 387 at pp428 and 429:—
"In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise. For the purposes of the second element, a defendant who has not actively induced the plaintiff to adopt an assumption or expectation will nevertheless be held to have done so if the assumption or expectation can be fulfilled only by a transfer of the defendant's property, a diminution of his rights or an increase in his obligations and he, knowing that the plaintiff's reliance on the assumption or expectation may cause detriment to the plaintiff if it is not fulfilled, fails to deny to the plaintiff the correctness of the assumption or expectation on which the plaintiff is conducting his affairs.
The defendants' counsel submitted that the defendants expected for the purposes of condition (1) set out by Brennan J, that they would not be held at risk in the event of their negligence. The evidence does not satisfy me that the plaintiff induced the defendants to adopt that assumption or expectation; rather the evidence satisfies me that the defendants did not comprehend what their common law liability was. Further, the evidence does not establish that the plaintiff knew or intended that the defendants would not insure against their common law liability because of its failure to claim against the defendants for loss or damage on previous occasions. Rather, the evidence satisfies me that the plaintiff was simply content with the fact that it had its own insurance cover over its goods and whether or not the defendants would be liable for damage caused by negligence, was not a matter of particular concern for the plaintiff.
I am satisfied on the evidence that the defendants did not insure themselves against common law liability when carrying the goods of customers other than the plaintiff. It is therefore unrealistic to suggest that their failure to insure when carrying the plaintiff's goods occurred in such circumstances that the doctrine of estoppel should operate against the plaintiff.
Accordingly, there will be judgment for the plaintiff against the defendants for $13,384.54 damages.
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