Comalco Aluminium Ltd v Mogal Freight Services Pty Ltd

COMALCO ALUMINIUM LIMITED, COMALCO NZ LIMITED AND NEW ZEALAND CAN LIMITED v.
MOGAL FREIGHT SERVICES PTY. LIMITED, OCEANIA SHIPPING CORPORATION LIMITED AND
ANGKASA SHIPPING AND TRADING INC.
No. G161 of 1991
FED No. 180/93
Number of pages - 27
Trade Practices - Shipping and Navigation

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
SHEPPARD J

CATCHWORDS

Trade Practices - consumer protection - representations as to competence and skill - representations as to exercising reasonable care - whether representations as to future conduct - whether misleading or deceptive conduct - whether reliance placed upon representations.

Trade Practices - consumer protection - implied statutory warranties - transportation of goods - packing services rendered as part of contract to transport goods from Sydney to Auckland - whether packing services provided as part of contract for transportation of goods thus exempting contract from operation of 8.74 of Trade Practices Act 1974.

Shipping and Navigation - carriage of goods - action for damage to cargo - causation - whether inadequate packing of goods into container also cause of damage - "freight forwarder" - whether liable for damage resulting therefrom - exclusion clauses - Hague Rules.

Shipping and Navigation - bill of lading - whether "consignment note" issued by freight forwarder was "bill of lading or similar document of title" - Hague Rules - exclusion clauses.

Words and Phrases - "bill of lading or similar document of title".

Trade Practices Act 1974, ss 51A, 52, 6B, 74.
Sea Carriage of Goods Act 1924, ss 4, 6, Sch. (Arts I, III, IV,
VI, VII).

HEARING

SYDNEY, 9-11, 18 and 19 March 1992

#DATE 18:3:1993

Counsel for the Plaintiffs: Mr. A.W. Street and

Mr. G.J Nell

Solicitors for the Plaintiffs: Phillips Fox

Counsel for the Defendants: Mr. H.A. Coonan

Solicitors for the Defendants: Ebsworth and Ebsworth

ORDER

THE COURT ORDERS THAT: 1. There be judgment for the plaintiffs against the first defendant in the sum of $249,736.12.

2. The first defendant pay to the plaintiffs one half of their costs of the proceedings.

3. The plaintiffs and the first defendant have liberty to apply provided that liberty is exercised by notice to the Associate to Sheppard J on or before 25 March 1993.

4. The plaintiffs have leave to move for judgment against the second defendant provided notice of that application is given to the Associate to Sheppard J on or before 1 April 1993.

5. The plaintiffs have leave to discontinue the proceedings against the third defendant.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

Introduction SHEPPARD J By its amended statement of claim in this matter the plaintiffs sue for damage suffered by a cargo of aluminium coil which was shipped from Sydney to Auckland on board the vessel "Oceania Trader". The third defendant has not been served and the plaintiffs do not wish to proceed against it. Accordingly, I give the plaintiffs leave to discontinue the proceedings against that defendant. The second defendant has been served with the writ but out of the jurisdiction. It has not appeared and the action has proceeded undefended against it. The first defendant carries on business as a freight forwarder. The plaintiffs have sued it upon a number of causes of action. It has strongly defended the matter.

I shall come in due course to the proceedings against the second defendant, but the principal part of this judgment will be concerned with the plaintiffs' action against the first defendant to which I shall refer as "Mogal". I shall refer to the plaintiffs collectively as "Comalco" except where it is necessary to distinguish between them.
The aluminium coil was carried to Auckland from Sydney on the "Oceania Trader" pursuant to the terms of a bill of lading issued by the ship's agents on 5 April 1990. The shipper was described as Mogal and the consignee was a New Zealand company, Owens International Freight of Auckland. It was another firm of freight forwarders. Although the bill makes no mention of it, the aluminium coil was to be delivered to the premises of the third plaintiff, New Zealand Can Limited.
The aluminium coil was packed - "stuffed" in the language of the trade - into containers. Each coil weighed approximately five tonnes. Four coils were stuffed into most containers; some contained three. On their arrival in Auckland on 12 August 1990 a number of the containers and a number of the coils were found to be badly damaged. There is no issue about the question of damage. If the plaintiffs are entitled to judgment, the amount to which they are entitled is agreed upon in the sum of $173,264.36 together with interest.
The causes of action upon which Comalco has sued Mogal may be divided into two groups or categories. The first group consists of causes of action for breach of contract, breach of Mogal's obligation as bailee, and negligence. The matters which arise for decision in respect of these causes of action do not involve substantially different considerations and they may be dealt with together. In relation to one aspect of the contractual claim Comalco has raised an estoppel. That matter was not the subject of submissions and I need not refer to it further. For each of reference I shall refer to these causes of action collectively as the contractual claims. Before mentioning the second group or category of causes of action, it is convenient to deal with the principal document and the legislation upon which the contractual causes of action are based and also to indicate shortly the contentions of the parties about them.

The Contract and the Legislation relevant to it
6. The contract between Comalco and Mogal consisted principally of a
document which was described in the evidence as a consignment note. It was headed with the Mogal name and insignia. The consignor was the first plaintiff, Comalco Aluminium Limited. A space headed "Consignee - Receiver" was filled in with the words "TO ORDER". A third space provided for notification (presumably when the coil arrived) to be given to New Zealand Can Limited. The port of loading was said to be Sydney, the departure date, 4 April 1990, the vessel the "Oceania Trader" and the port of discharge, Auckland. There followed descriptions of the goods which were said to comprise aluminium can body stock in 12 containers the sizes and identification numbers of which were specified.

There followed a space providing for insurance to which it is unnecessary to refer in more detail. The next space was headed "NEGOTIABLE DELIVERY ORDERS". Under this heading were two boxes both of which were crossed. The first comprised an instruction to return a copy of the consignment note to the sender, i.e. Comalco Aluminium, and the second an instruction to airmail a copy to the consignee, presumably New Zealand Can, but this is not clear. Delivery instructions were then provided for. These were that the coils were to be moved from door to door, that is from the premises of Comalco Aluminium at Yennora, a Sydney suburb, to the premises of the consignee, presumably New Zealand Can.
The contract was thus one pursuant to which Mogal was to undertake the transportation of 46 aluminium coils from Comalco's premises to New Zealand Can's premises. The transaction involved the picking up of the coils from Comalco Aluminium, the packing of the coils into containers at Mogal's depot, the carriage of the containers to the wharf for shipment on board the "Oceania Trader", the carriage of the containers from Sydney to Auckland on that vessel, the unloading of the containers on to the wharf in New Zealand, the carriage of the containers to Owens International Freight depot, the unloading of the containers at the depot and the delivery of the coils to New Zealand Can.
The consignment note issued by Mogal contained on its reverse side number of printed terms and conditions. In those terms and conditions Mogal was described as the "carrier", "carriage" was defined to mean and include the whole of the operation and services undertaken by Mogal in respect of the goods, "consignor" was to mean the person by whom the goods were "deposited" i.e. Comalco Aluminium, "goods" meant the cargo accepted from the consignor and "sub contractor" was to include any person who, pursuant to a contract or arrangement with any other person (whether or not the carrier), performed or agreed to perform the carriage or any part thereof or any servant or agent of such person.
Condition 2 provided that the carrier was not a common carrier. Conditions 3, 4, 5, 11, 17 and 18 were as follows:-

"3. (a) The Carrier shall not be under any liability for any loss of or damage (including concealed damage, deterioration, contamination and evaporation) to or failure to forward, misforwarding and delay in forwarding or mis-delivery, non-delivery or delay in delivery of any goods received by it or any consequential loss arising therefrom howsoever such loss, damage or consequential loss is caused whether arising through mis-conduct (sic), negligence of the Carrier or otherwise (including but without limiting the generality of the foregoing any act of the Carrier in respect of or in dealing with the goods including their carriage, packing or handling) and the Consignor shall indemnify the Carrier from and against all liability in respect of any goods received by it to any person or persons, company or companies having or claiming any interest in the said goods and further the consignor shall indemnify the Carrier from and against all liability for loss of life and/or personal injury to any person or persons whatsoever or loss or damage to any property whatsoever caused or contributed to by the said goods or any inherent vice thereof or caused or contributed by the storage, carriage, packing, handling or otherwise dealing with the said goods, even though such loss of life, personal injury, loss or damage results from or is contributed to by the negligence of the Carrier.

(b) In addition to paragraph (a) hereof, the Carrier shall not be liable for any loss of market, loss of use or consequential loss, concealed damage or damage caused by inherent vice or nature of the goods or of the merchandise carried (including chilled, frozen, refrigerated or perishable goods) either in transit or in storage whether caused or contributed to by the negligence, wrongful act or default of the Carrier or from any other cause whatsoever.

4. The Carrier shall not be liable for any damage or loss whatsoever to goods, which the Consignor has requested the Carrier to pack and which are described on the face hereof, whether in the course of packing or in transit or otherwise and howsoever occasioned to the said goods or any of them and whether caused by the Carrier's negligence or otherwise howsoever. When the Carrier is required to load or unload any liquids, partly liquids, substances or any commodities or products into bulk tanks or vessels, drums or containers, it shall not be liable for any loss, damage or contamination of product during any such loading or unloading operation or packing, whilst such product is in transit by any means of transportation or whilst goods are held in store or bulk storage tanks for any reason whatsoever whether caused by the Carrier's negligence or otherwise howsoever.

5. (a) In respect of any clause herein which excludes or in any way limits the liability of the Carrier in respect of this Contract, the Carrier in addition to acting for itself is acting as agent of and trustee for each of its servants and also for any other person or company with whom the Carrier may arrange for the carriage or other handling of the goods and the servants of such person or company so that its servants and such person or company and his or its servants are or shall be deemed to be parties to this contract so far as the said clause or clauses containing exclusions or limitations of liability are concerned and in so far as may be necessary to give effect to this clause the Carrier shall hold the benefit of these conditions for its servants and for any such person or company and his or its servants or agents.

(b) In respect of any term (including any implied term) in any contract or sub-contract which the Carrier may enter into pursuant to this contract by which the contractor or sub-contractor (notwithstanding the provisions of paragraph (a) above) accepts some measure of liability for loss or damage to the goods the Carrier will hold the benefit of such term as agent of and trustee for the Consignor.

11. (a) The Carrier may carry all goods or have them carried by any method on any usual terms which the Carrier in its absolute discretion deems fit and notwithstanding any instructions verbal or otherwise of the Consignor that the goods are to be carried by another method.

(b) The Consignor authorises the Carrier (if the Carrier should think fit to do so) to arrange for the Carriage of the goods by an independent contractor or sub-contractor of the Carrier. The Carrier may enter into any such contract or sub-contract subject to the terms of the regular form of Bill of Lading or Sea Waybill in use by the contracting Steamship Company.

17. The within Contract shall be deemed to be made in the State in which this consignment note was issued and shall be governed and construed in accordance with the laws of that State as the proper law of the contract. In the event that this Contract shall be held to be subject to the laws of any other State of the Commonwealth or of the dominion of New Zealand then except where repugnant to the provisions of that law these terms and conditions shall continue to apply.

18. Notwithstanding anything herein contained, the Carrier shall continue to be subject to any implied warranty provided by the Trade Practices Act 1974 (as amended) if and to the extent that the said Act is applicable to this contract and prevents the exclusion, restriction or modification of that warranty."

The first cause of action upon which Comalco sues Mogal is for breach of Mogal's obligation to deliver the aluminium coils in good order and condition. One of the answers made by Mogal to that cause of action was to raise the provisions of conditions 3 and 4 above quoted as defences to the cause of action. In the submission of counsel for Comalco, Mogal was not entitled to rely upon these provisions because:
(a) The consignment note was a bill of lading or

similar document of title; see 8.6 of the Sea Carriage of Goods Act 1924 ("the Act").

(b) The aluminium coil was not damaged prior to the

loading on to the vessel, nor subsequent to its discharge therefrom; see Article VII of The Hague Rules set out in the schedule to the Act ("the rules").

(c) Mogal had led no evidence to establish how the

damage had occurred.

(d) The provisions of conditions 3 and 4 of the

consignment note were of no effect because of the provisions of Article III rule B of the rules.

Alternatively to para. (a) above, counsel for Comalco submitted that it was of no consequence whether the consignment note was a bill of lading or similar document of title as referred to in s.6 of the Act. The rules forming the schedule to the Act apply by reason of the operation of s.4 of the Act.
Subsection 4(1) of the Act is as follows:-

"Subject to the provisions of this Act, the Rules contained in the Schedule to this Act (in this Act referred to as "the Rules") shall have effect in relation to and in connexion with the carriage of goods by sea in ships carrying goods from any port in the Commonwealth to any other port whether in or outside the Commonwealth."

Section 6 of the Act provides:

"Every bill of lading or similar document of title issued in the Commonwealth which contains or is evidence of any contract to which the Rules apply shall contain an express statement that it is to have effect subject to the provisions of the Rules as applied by this Act."

Article I of the Rules contains a number of definitions. Carrier includes the owner or charterer who enters into a contract of carriage with the shipper. "Contract of carriage" applies only to contracts of carriage covered by a bill of lading or any similar document of title, insofar as such document relates to the carriage of goods by sea. "Carriage of goods" covers the period from the time when the goods are loaded on to the time when they are discharged from the ship.
Article III, rule 2 provides that, subject to the provisions of Article IV, the carrier shall properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried. Article III rule 8 provides that any clause, covenant or agreement in a contract of carriage relieving the carrier or the ship from liability from loss or damage to or in connection with goods arising from negligence, fault or failure in the duties and obligations provided for in Article III is to be null and void and of no effect. The relevant provisions of Article IV to which Article III, rule 2 is subject are paras. (i), (n), (p) and (q) of rule 2. Those paragraphs are as follows:

"Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from-

(i) act or omission of the shipper or owner of the goods, his agent or representative;

(n) insufficiency of packing;

(p) latent defects not discoverable by due diligence;

(q) any other cause arising without the actual fault or privity of the carrier, or without the fault or neglect of the agents or servants of the carrier, but the burden of proof shall be on the person claiming the benefit of this exception to show tht neither the actual fault or privity of the carrier nor the fault or neglect of the agents or servants of the carrier contributed to the loss or damage."

Article VI enables a special agreement to be entered into in certain circumstances. The Article is not directly relevant but is referred to because it was relied upon by counsel for Comalco in support of the submission made in relation to s.4 of the Act. Article VI does not apply, and could not apply, to the circumstances of the carriage here because it does not apply to ordinary commercial shipments made in the ordinary course of trade but only to shipments where the character or condition of the property to be carried or the circumstances, terms and conditions under which the carriage is to be performed are such as reasonably to justify a special agreement.
Finally Article VII provides that nothing contained in the rules shall prevent a carrier or a shipper from entering into any agreement, stipulation, condition, reservation or exemption as to the responsibility and liability of the carrier or the ship for the loss or damage to, or in connection with, the custody and care and handling of goods prior to the loading on and subsequent to the discharge from the ship on which the goods are carried by sea.
If the consignment note was a bill of lading or similar document of title and if the coil was damaged between loading on and discharge from the vessel, Comalco would be entitled to succeed unless Mogal established one or more of the matters provided for in Article IV, rule 2.
In the submission of Mogal, the consignment note was not a bill of lading or similar document of title. The rules applied only to bills of lading or similar documents of title. Section 4 of the Act did not provide otherwise. In any event, the evidence established that the coil was damaged as a consequence of insufficient packing so that Mogal was exempted from liability by the provisions of Article IV, rule 2. Furthermore the consignment note, even if it were a bill of lading, could quite legally include exemption clauses in terms of conditions 3 and 4 so long as they were read as applying only to acts and omissions which occurred before loading or after discharge; see Article VII.

The Trade Practices Causes of Action
21. The second group of causes of action depend in one way or another
on provisions of the Trade Practices Act 1974. The causes of action relied upon are for breach of contract and for breach of the provisions of s.52 of the Trade Practices Act. The contractual cause of action is for breach of a term of a contract said to have been implied into the contract by s.74 of the Trade Practices Act that the services to be performed under the contract would be rendered with due care and skill. Section 74 needs to be read with s.68 which provides that any term of a contract that purports to exclude, restrict or modify the application of any of the provisions of Division 2 of Part V of the Act is void. Section 74 is in Division 2.

In the submission of counsel for Mogal, s.74 has no application to the circumstances of the present case because the contract between the parties is a contract for or in relation to the transportation of goods for the purposes of a business or trade. Such contracts are excluded from the operation of subsec.74(1); see para. 74(3)(a).
The cause of action under s.52 of the Trade Practices Act is founded upon certain representations alleged to have been made to Comalco by Mogal and the falsity of those representations. The first of the two representations relied upon (para.18 of the amended statement of claim) was that Mogal represented that it would exercise reasonable care in stuffing the aluminium coils into the containers and in their door to door carriage. The second (para. 19 of the amended statement of claim) was that Mogal represented that it was sufficiently skilled and competent to perform the door to door carriage and would use equipment necessary to perform that task. In its further amended defence Mogal has denied the making of the representations. It has denied that Comalco relied on the representations and it has also denied that the conduct in which it is alleged to have engaged was misleading or deceptive or likely to mislead or deceive Comalco.
The evidence relied upon to establish the two representations consists of a number of statements made in various documents and certain statements made orally by an employee of Mogal.
In October 1988 Mogal was asked by Comalco to tender for the shipment of approximately 20,000 tonnes of aluminium products (including coil) per annum. Shipments were to be to countries in the Asia/Pacific region including New Zealand. On 19 October 1988 Mogal wrote to Comalco saying that it was "primarily a 'Trans-Tasman Freight Forwarder' and as specialists in the trade wish to submit rates...". The words emphasised are those particularly relied upon by Comalco. In the third paragraph of the letter of 19 October 1988 there appeared the words, "Mogal are ideally positioned to provide the complete door to door service required." This statement was also relied upon.
Reliance was next placed upon certain words in a letter from Mogal to Comalco dated 13 October 1989 which quoted certain rates for the carriage of aluminium product to New Zealand. The words were, "Door Yennora to door New Zealand ports" and, "consolidate into 6.1 m. container." Similar statements were made in letters from Mogal to Comalco dated 22 December 1989, 16 January 1990 and 31 May 1990. All these statements were relied upon as representations notwithstanding that those contained in the letter of 31 May 1990 were made after the carriage in question had been completed.
The statements in the three letters together with the consignment note earlier referred to are apparently relied upon to support the first of the representations sued upon, namely, that Mogal would exercise reasonable care in stuffing the coils into the containers and in the door to door carriage as well as that relied upon in paragraph 19 that Mogal was sufficiently skilled and competent to perform the work.
Also relied upon for the purpose of establishing the representation alleged in para. 19 of the statement of claim were statements made in each of two brochures. The first of the brochures was sent to Comalco by Mogal with one of its early quotations. The title page of the brochures prominently displayed the name "Mogal". Underneath it in large print were the words, "Trans-Tasman cargo efficiency". On the second page appeared the statement, "The 18 years of experience and a high degree of skill and professionalism in the Trans-Tasman service is now further strengthened with the combined expertise of Australian and New Zealand personnel, backed up by a wide range of modern premises, equipment and service facilities." Page 2 also described Mogal as "a major trans Tasman freight forwarder" and added, "with over 18 years experience in the trade Mogal have the answers to every question, with officers and skilled staff at all main ports ready to smooth away any problems making sure your cargo is to your buyer FAST. Our rates are keen, our service the best ...". On the third page were the statements:-

"* Customs approved terminals and specialised equipment. * The experience that goes with being a 'pioneer' forwarder in the Trans Tasman service. * A wide range of handling equipment for general, hazardous, refrigerated cargo and provision for overweight and overlength loads. * One phone call, one invoice all under one roof. * Door to Door Trans Tasman and Trans Bass Service."

The second of the brochures was sent with Mogal's letter of 31 May 1990. As noted, the carriage in question was performed in April 1990 over a month before the letter was sent. It is difficult to see why any representation made in that letter or the brochure sent with it could be material to the circumstances of this case. I do not therefore take time referring to the specific parts of that brochure relied upon by Comalco in support of its case. The first of the conversations relied upon took place between Mr. Martin of Comalco with Mr. Anderson of Mogal. Mr. Martin is the Manager, Marketing and Sales Administration, of Comalco and Mr. Anderson was Mogal's National Marketing Manager. According to Mr. Martin, Mr. Anderson said that the fee which was to be negotiated would reflect the whole cost of the operation and that Mogal would perform the task, in relation to each consignment, of consolidating and packing the goods after they were collected from Comalco's premises. Mr. Anderson also said that loading facilities to properly handle the product would be available. Mr. Anderson said that Mr. Martin would provide a more competitive service than that which Comalco enjoyed and added that Mogal were specialists in the Australia/New Zealand trade and that it had available the necessary equipment to deal with the shipment of the coils. Mr. Anderson said that he understood that the equipment would include the necessary gluts, chocks and dunnaging. Gluts are wedges of wood or iron. Chocks are wooden chocks used to secure cargo in place, here aluminium coil in containers, and dunnaging is any form of material stowed among and beneath the cargo of a vessel to keep it from injury.
Finally it was said that the representations relied upon were implied by reason of an invitation accepted by Mr. Martin to visit Mogal's premises and inspect its facilities.
In his affidavit, Mr. Anderson said that he had not given any specific undertaking as to how any cargo would be packed. I think that is probably true. But this is not inconsistent with his having given assurances concerning the capacity of Mogal to do the work properly. The probabilities are that he did give assurances of this general kind. To have done so would have involved no more than stating what was to be found in writing in some of the letters and in the brochure. To the extent that there is any difference between the two witnesses, I prefer the evidence of Mr. Martin because I think it is in accordance with the probabilities. But, in saying this, I do not consider there to be any significant conflict in the evidence of the two witnesses.
I propose to deal with the causes of action based directly or indirectly on the Trade Practices Act first of all. I take this course because my conclusion in respect of these causes of action may have a bearing on the outcome of what I have compendiously called the contractual causes of action. That would be especially so if I acceded to Comalco's submission that the term provided for in s.74 of the Trade Practices Act was implied in the contract between the parties. But before I deal with any of the causes of action, I need to make findings, so far as the evidence enables me to do so concerning the cause or causes of the damage to the coils.

The Cause of the Damage
33. Survey evidence was given by Mr. S.L. Mackie of Auckland. His
evidence is not in contest. His evidence was given by affidavit which verified a report he had made. Mr. Mackie is a marine surveyor and loss adjuster in the employ of Robins MBS (NZ) Limited. He is a Lloyds surveyor.

Mr. Mackie said that the cargo was discharged from the "Oceania Trader" on 12 April 1990. Four surveys were conducted. He referred to the detail of these. Exhibited to his affidavit is a bundle of photographs that he took of the containers during his inspection. He observed that four containers had been heavily damaged and holed. He said that three other containers were also damaged but I gather not so severely. When he arrived at the wharf the coils had been removed from the four damaged containers and placed under a canopy. Later eight more containers were examined. Three of these together with their contents were undamaged. The remaining five were subject to minor impact markings and showed movement of the stow.
Mr. Mackie said the majority of the containers contained four coils. Three of the 15 containers contained three coils. Each of the coils was secured to a wooden pallet by way of steel banded strapping which criss-crosqed each coil and ran underneath the pallet base. The steel bands were secured between wooden skids. The securing of the coils to the pallet base was performed by Comalco Aluminium. The combination of the weight of the coil (approximately five tonnes) and the steel strapping was the method by which the individual coils were secured to the pallet base. No other restraints were employed. In particular, no chocks were used. He thought that the use of wooden chocks nailed around the base of each coil would have assisted the steel strapping to resist movement of the coil upon the pallet. Mr. Mackie said that it was his view that the failure to chock the coils contributed to the movement of the coils during the voyage, but he also said that he estimated that 50 per cent of coils which were shipped from Australia to New Zealand were shipped without the use of chocks.
He concluded that the individual pallets had "rotated" within the containers during the voyage. Once the pallets were allowed to move, the strapping became insufficient to hold down the coils themselves. Consequently they were free to move about within the container. He thought that the movement was due to a failure properly to secure the coils within the containers. The uniformity of damage which he observed suggested to him that the damage to each container was caused by the shifting of coils within it.
Annexed to Mr. Mackie's affidavit is a survey report prepared by him. The report is on a standard Lloyds form. The report said that 15 coils were crushed, abrased and impacted and that there was fresh water damage to one coil discovered subsequent to delivery. That is a matter which has been the subject of an undisclosed agreement between the parties. It is not a matter which requires separate consideration.
The report contains a detailed description of the damage which was suffered by each container and each coil. It is noted in the report that a Mr. Stanaway of Owens International Limited had advised that he received advice from the vessel's agent that it had encountered heavy seas during a voyage on 6 and 7 October 1990. I have not understood the relevance of this bearing in mind that the voyage in question took place in April 1990. I suppose, however, it could be said that it is indicative of the likelihood that vessels crossing the Tasman Sea may encounter heavy weather. On the other hand, it has also to be said that heavy seas are not unusual anywhere and are something which vessels should have little difficulty in coping with.
The remaining evidence which bears on the question of causation consists of answers to interrogatories made by Mogal. Interrogatory 1(h) asked what steps, if any, were taken to prevent the shifting of the contents of each container at the time of stuffing, advising the nature of any materials used. The stark answer to this interrogatory was "None". Interrogatory 1(h) asked whether, at the time of stuffing each container, Mogal had any written instruction or guideline as to the steps to be taken to prevent movement of the contents stuffed into the container. The answer was "No". These answers to interrogatories, particularly the answer to the first constitute admissions that the coils were not properly packed.
Despite Mr. Mackie's evidence that, in his experience, only about 50 per cent of coils loaded into containers were chocked, it seems to me that the tenor of his evidence establishes that failure to use chocks and to take other steps to secure the coils safely within the containers amounts to bad practice. Failure to take these steps is indicative of improper and negligent packing. In this respect, one must take into account the fact that the containers will be loaded on to vehicles by crane, unloaded from those vehicles on to a wharf, loaded from the wharf into a ship, shipped across a sea which is noted for its rough weather, unloaded on to a wharf at the point of discharge, loaded on to another vehicle and unloaded at the point of destination. The coils weighed five tonnes each. Any movement of them, or even one of them, inside a container would be likely to be productive of damage to the container and to one or more of the coils. Secure packing was essential to the proper and safe transportation of them. That is to do no more than state the requirements of common sense.
So much was not contested by counsel for Mogal who submitted that the sole cause of the damage was inadequate packing by her client. No doubt that submission suited Mogal's case because the acceptance of it would place the case squarely within the exception clauses included in the conditions endorsed on the back of the consignment note. Bill of lading or not, conditions 3 and 4 would apply because the problem arose prior to the loading of the coils on board the vessel.
Counsel for Comalco contended that a cause of the damage was faulty packing, but he contended that there were two causes. The other cause, so he submitted, as poor handling during loading or discharge or inadequate securing of the containers on board the vessel.
I think the most likely cause of the damage was the movement of the vessel during the voyage with the consequent disturbance of improperly secured coils in the containers causing them to move and to damage both the containers and themselves. It is possible that the damage was caused during loading or unloading operations, or perhaps during the carriage of the containers to the wharf but this seems to me to be unlikely.
Counsel for Comalco pressed upon me a submission that it was unlikely that the damage was caused only by inadequate packing. The submission was based on the fact that not all containers were damaged and further, that some were only slightly damaged whilst to others the damage was severe. In counsel's submission, if the sole cause were inadequate packing and the dislodgment of the coils by the movement of the ship, all containers might have been expected to be similarly affected. He submitted that I should infer that, although the inadequacy of the packing played a part, there must have been a further factor such as a mishap during loading or a failure properly to secure the containers on the vessel. Thus two causes operated independently to produce the damage.
I reject the submission. I think it contends for an improbable explanation of what occurred. It is contrary to the general tenor of Mr. Mackie's evidence. Furthermore, it is not quite correct to say that only some of the containers were damaged. Of the 15, four were badly damaged and three others were damaged but not as severely as were the first four. Of the remaining eight, five were the subject of minor impact markings and showed movement of the stow. Only three were not damaged at all. I think such unevenness of effect on the containers and the coils as there was is explained by the likelihood that, depending on their position in the ship, some containers, and thus the coils they contained, must have been affected by the movement of the vessel at sea to a greater extent than were others. All this involves a degree of speculation, but I think inadequate packing and ordinary movement of the vessel a safer conclusion than any other.

This conclusion has been reached without resort to the question of onus of proof. I should mention, however, that, if onus of proof had come into the matter, there may have been a complication. In relation to the Trade Practices causes of action, Comalco carries the onus of establishing the cause of the damage. But, in relation to the contractual claims, the position may be different. Comalco Aluminium entrusted the coils to Mogal which was obliged to deliver them in good order and condition to New Zealand Can in Auckland. For Mogal to resist liability under the contractual claims, it needs to establish the cause of the damage and to show that that cause was not one for which it was responsible or in respect which it has an immunity from suit. Theoretically at least there could have been a different outcome for each group of causes of action. But I can put those considerations aside because I am satisfied that the cause of the damage was, as I have said, improper or inadequate packing for the voyage and the effect on the containers so packed of the ordinary and expected movement of the vessel.

Trade Practices Act. s.74
47. That being my finding on causation, I can now approach the causes
of action upon which Comalco relies. The first cause of action with which I deal is that which depends upon s.74 of the Trade Practices Act. Section 74 so far as relevant is as follows:

"74. (1) In every contract for the supply by a corporation in the course of a business of services to a consumer there is an implied warranty that the services will be rendered with due care and skill and that any materials supplied in connexion with those services will be reasonably fit for the purpose for which they are supplied.

(3) A reference in this section to services does not include a reference to services that are, or are to be, provided, granted or conferred under

(a) a contract for or in relation to the transportation or storage of goods for the purposes of a business, trade, profession or occupation carried on or engaged in by the person for whom the goods are transported or stored or

(b) a contract of insurance."

As mentioned s.68 of the Act avoids any term of the contract that purports to exclude, restrict or modify, inter alia, the term implied by s.74.
In the submission of counsel for Mogal s.74 has no application to the contract here because the contract is a contract for or in relation to the transportation of goods for the purposes of a business carried on or engaged in by the person for whom the goods were transported, namely, Comalco. Counsel for Comalco met this submission by contending that the contract between Comalco and Mogal was not one essentially or solely for the transportation of the goods in question. It was a contract that had a number of aspects one of which was that Mogal would securely pack the coils into containers. Insofar as the contract required packing to be done, it was not a contract for the transportation of goods but a contract for packing them.
I have reached the conclusion that this submission should be rejected. In my opinion the proper approach to the construction of the words "contract for the supply ... of services to a consumer" in subsec. 74(1) is to construe the expression broadly and in a common sense and commercial way. A similar approach is required in relation to the words, "a contract for or in relation to the transportation ... of goods for the purposes of a business, trade ..." in subsec.74(3). The purpose of the contract was to secure the movement of a number of aluminium coils from Comalco's premises at Yennora near Sydney to the premises of New Zealand Can in Auckland. Necessary incidents of that contract were the picking up of the coils from Comalco's premises, the carriage of them to Mogal's depot, the packing of them into containers in which they could be shipped and the carriage of the containers to the wharf where they would be loaded on to a vessel. In my opinion it is not right to split the contract up into one involving a contract for the supply of the various types of services that were required to achieve the purpose of the contract, namely, the movement of the coils from Sydney to Auckland. I think this contract was plainly a contract for the transportation of goods. The provisions of subsec.74(3) of the Act therefore apply and operate to remove this contract from the reach of subsec.74(1).
There is no authority directly in point on the question. But I mention in passing the judgment of Wilcox J at first instance in E. v. Australian Red Cross Society (1991) 27 FCR 310 at 353 - 355 where his Honour dealt with the suggested application of ss.71 and 74 of the Trade Practices Act to the circumstances of that case. I refer also to the judgment of Lockhart J on appeal in relation to his treatment of the appellant's argument based on s.71 of the Act ((1991) 31 FCR 299 at 304-306).
Before leaving s.74, I should mention that, although it applies only in cases where there is a contract for the supply of services-to a consumer, the section was capable of applying to this contract because the amount of the freight payable under the contract was less than $40,000; see subsec s.4B(1) and (2).

Trade Practices Act. s.52
53. I turn to the case based on s.52 of the Trade Practices Act. I
find the representations relied upon by Comalco to have been made by Mogal. The letters and the brochure which are relied upon provide clear evidence of them as do the statements made by Mr. Anderson to Mr. Martin. A further factor which supports their having been made is the course of dealing between the parties.

That, is only the starting point. A consideration of Mr. Martin's evidence reveals that, although Comalco Aluminium and Mogal had negotiations in 1988 and 1989, Mogal did not carry aluminium can body stock, i.e. coils, until 1990. Some other products were the subject of agreements between them but these were much lighter than the coils. At all times the freight forwarder used by Comalco Aluminium has been a company known as Tradex. It was Comalco's practice to call for tenders from time to time from other freight forwarders really to see whether Tradex's prices were competitive. Although Mr. Martin satisfied himself, if not in 1988, then certainly in 1989, that Mogal was capable of transporting the coils, he continued to use Tradex.
In the early months of 1990 he became, at least temporarily, dissatisfied with Tradex. I think he decided to use Mogal for a time, not so much because he really wanted to change contractors but in order to teach Tradex a lesson by bringing it home to it that he did have an alternative forwarder capable of doing the work. It was in this way that Mogal was engaged to trnnsport its first consignment of coils in February 1990. Two further consignments were despatched in March and the subject consignment in April. Apparently the February and March consignments arrived undamaged. Before the February consignment, Mogal had made a further quotation. It was made on 16 January 1990 and replaced earlier quotations.
Against this background it is necessary to consider submissions made by counsel for Mogal on the question of reliance. The first matter to be considered is the significance of the brochure. Mr. Martin was not sure whether his was sent in 1988 or 1989. If it was sent in 1989 it was sent after he had satisfied himself that Mogal was capable of doing the work. He was cross-examined about the extent to which he relied on the brochure. He was asked whether, if he had received the brochure with the quotation of 13 October 1989, he would have read it prior to agreeing to use Mogal's services. He said that he would not. The cross-examination continued:-

"And if you'd only received the brochure with the second quotation in October 1989, and you'd agreed to use Mogal Services prior to that nothing in it could have influenced you to use Mogal? Would you agree with that? ---Well, yes, I would agree with that because I'd have inspected their premises. Now, you put a lot of emphasis, did you not, on inspecting the premises of Mogal, is that right? --- Yes.

You've had a great deal of experience in the shipping of bodystock, have you not? ---Yes. And do you regard yourself as something of an expert as to how it should be properly done? ---I wouldn't say I'm an expert but, yes, I have a pretty good knowledge of it.

Yes. You've seen how it's done with other freight forwarders for instance? ---Yes. And when you went to the premises of Mogal you had a good look around, did you? ---Yes. And you satisfied yourself, at least so far as you could see, that it was adequately fitted out to be able to handle this product? ---That's right."

Leaving aside the significance of Mr. Martin's inspection of the Mogal premises, with which I shall deal as a separate matter, the point which counsel for Mogal makes is that it is not open to Comalco to rely on the brochure because the evidence does not establish that it played any part in Mr. Martin's decision to engage Mogal to carry any of the consignments. Subject to what will be said a little later, I think that submission is correct.
Then it is said that Mr. Martin made his own judgment of Mogal's competence to do the work. He made an inspection of Mogal's premises for the specific purpose of satisfying himself that it had the equipment and capacity to do the work. So much emerges from the evidence given by him in the passage just cited from the transcript. Moreover, Mr. Martin said that he had been to Tradex's premises to see how the coils were packed. Before that, trials had been done in the Comalco aluminium factory. Mr. Martin agreed that the practice was to interleave the pallets to stop them moving and to wedge them in. He said that that was one of the ways but that dunnage could also be used to stop movement against the pallets. Sometimes, so he said, both dunnage and interleaving were used. He agreed that there were occasions when all that was done was to interleave the pallets but added that the correct way was that dunnage "should be against each one of them, against each pallet." He aso agreed that it was not the invariable practice for all coils to be chocked before shipment. The cross-examination continued:

"Why then do you say in your affidavit, Mr. Martin, that you understood that the equipment would include the necessary gluts, chocks and dunnaging and you wouldn't have engaged the services of Mogal but for that belief? ---Well because one of the factors that you do use them for is to make sure that your cargo doesn't move. It's quite possible when you interleave it. I mean they might just pack it and leave the last coil next to the door and that might just fly out so we have to make sure that the way they pack containers is the way other people use it and we are quite happy that it is safe.

Didn't you say a little earlier that you'd seen a different method used, one with the pallets interleaved - - - ? ---Yes, but there's still dunnage against it or at least nails nailed to the floor."

Mr. Martin agreed that he had had a discussion about interleaving the pallets with Mr. Anderson and also about making sure that the pallets did not move.
Neither Nr. Martin nor any other employee of Comalco Aluminium watched the packing process at Mogal's depot in relation to any of the consignment of coil which it undertook between February and April 1990. Thus he was not to know in what manner the coils were actually packed. In particular he did not know whether the pallets were in fact interleaved, whether they were chocked or whether dunnage was used. But he had made it clear to Mr. Anderson how important it was that the coils not move in the containers. Plainly enough Mr. Anderson understood that; and, as I have indicated, it is only common sense that those precautions should be taken.
If one puts aside the brochure, as I think one should in the light of Mr. Martin's evidence, there remain the two letters, particularly that written on 19 October 1988 in which Mogal described itself as a specialist in the Trans Tasman freight forwarder service. The letter also said that Mogal was "ideally positioned" to provide the complete door to door service which was required. The letter was written in response to the request for a quotation sent by Comalco Aluminium on 14 October 1988 in which it was plainly stated that the product to be shipped was aluminium coil, plate, sheet and foil with at least 80 per cent "predicted to be rolls of coil" each weighing 5 to 6.5 tonnes. It was also said that up to four of these coils were to be loaded into each container. When Mogal made the claims it did about its competence, it made them well awsre of the nature of the work which would be involved. In the discussions which followed in 1989 nothing was said by either party to suggest that Mogal had not understood the significance of shipping five tonne coils. Mr. Martin's conversation with Mr Anderson made it clear that, if the coils moved in the containers, there could be a problem. Both men proceeded on this basis.
The representation made in writing in the letter of 19 October 1988 ought therefore be regarded as one which continued to have effect during 1989 and into the early months of 1990 when Mogal began to carry coils. Everything that Mogal wrote, said and did was predicated upon its competence to do the job properly. If the brochure was sent with the letter of October 1989, it simply confirmed, perhaps in a little more detail, Mogal's competence.
It follows that, when Mogal undertook the consignments which were carried from February to April 1990, it was by implication continuing to engage in conduct which involved it in representing itself as, or holding itself out to be, a competent and skilled freight forwarder which would pack and transport each consignment with a proper degree of competence and skill. The assurances given in writing and orally to Mr. Martin had continuing effect; they are not to be regarded only as assurances which were indications of Mogals future intention to bring a proper degree of skill and competence to the task. There was no point in their being made unless they continued to apply, and did apply, at the critical time of the handling of an actual consignment.
In my opinion it is clear from the general tenor of Mr. Martin's evidence that he would not have engaged Mogal at all had he not relied upon and been persuaded by the statements made by Mogal and conduct engaged in by it which indicated to him that it was claiming to be a reliable freight forwarder capable of doing the work in question. It is true that his immediate reason for engaging Mogal was because of his difficulties with Tradex. But he would not have been rash enough to use a forwarder in which he had no confidence simply to teach Tradex the lesson he thought it needed to learn. Unless he were confident of Mogal's capacity to do the work properly, he would not have entrusted any consignment to it.
Counsel for Mogal submitted that the evidence established that Mr. Martin had relied on his own inspection of Mogal's premises and equipment and had not relied on any statements or conduct made or engaged in by Mogal. But his inspection could have reassured him only about some things. He could see the nature of Mogals equipment, particularly its forklift trucks, and that the nature of the premises would permit the storage of the coils under cover, a matter of great importance to Mr. Martin. But, although it was clear both to Mr. Martin and Mr. Anderson that the coils were to be packed in the containers in such a way as to ensure, so far as possible, that they would not move inside the containers, packing was a matter which Mr. Martin had to leave to Mogal. It was not contemplated that he or any other Comalco representative would oversee the packing operation. It was left to Mogal to do it properly. In leaving matters in this way, Mr. Martin did so reassured by Mogal's statement that it was competent to carry out packing of the coils, as well as all other aspects of the work.
In all the circumstances, therefore, I am satisfied that Comalco Aluminium relied upon the representations which were made to it both expressly and by conduct.
The next question is whether Comalco Aluminium has established that the representation was false, really whether the conduct engaged in by Mogal was, in the circumstances, misleading or deceptive. As counsel for Mogal submitted, the fact that a person engaged in a profession or trade may occasionally do work incompetently or badly does not of itself estsblish a general incompetence or a general lack of capacity to do what is requred. It may amount to a breach of a contract or warranty, but it will not be generally indicative of incompetence. Here we know that there were three earlier consignments of coils carried out by Mogal for Comalco Aluminium. Apparently these were undertaken without damage.
The evidence, particularly that of Mr. Mackie, establishes that the containers and coils in question arrived in a badly damaged condition. The evidence establishes that that damage was caused by inadeguate packing. That is the finding which I have made. However, if there were no more, I would not regard the case as being one in which Comalco had established incompetence and lack of skill on Mogal's part. I would have taken the view that the evidence established no more than that there had been a lapse on one occasion from a standard which usually applied. The difficulty for Mogal stems from the answers it made to Comalco's interrogatories. I have earlier set these out. Mogal has admitted that it took no steps whatsoever to prevent the shifting of the contents of each container at the time of stuffing. It was asked to identify the nature of any materials used. The answer it has given means that no materials were used. Furthermore, Mogal has admitted that it had no written instruction or guideline as to the steps to be taken to prevent movement of the contents of each of the containers.
The evidence of Mr. Martin establishes that it was common ground between Mr. Anderson and himself that the pallets would be interleaved. It also establishes that their common expectation was that dunnaging, if not chocks, would be used. The answers to the interrogatories, which ought to be taken at their face value, establish that none of these precautions was taken. I could not be satisfied that there was interleaving of the pallets nor could I be satisfied that any dunnaging was used. Mr. Mackie's evidence does not tell one whether there was interleaving of the pallets because, at least in the damaged containers, the pallets themselves were badly damaged. The photographs show broken timber in the bottoms of the containers. His evidence does establish that no dunnaging was used.
It would have been open to Mogal to lead evidence about its practice in relating to packing the containers. If it were the fact that interleaving was usually done and was regarded as sufficient or if it be the fact that that precaution coupled with the use of dunnaging was usually taken, one might have been prepared to discount the starkness of the answers to the interrogatories. But no such evidence was led and no explanation was offered of how it came about that the damage occurred. There is not even evidence to the effect that usually packing was done properly but that there was an omission on this particular occasion. For all the evidence discloses each of the consignments may well have involved the packing of the coils without interleaving the pallets and without any other precaution.

That being the state of the evidence, I think it is clearly open to me to draw the inference that Mogal was in fact incompetent in packing the containers. Absence of evidence from it on this point enables me the more confidently to draw that inference. I do not think that it is going too far to say that, once the unexplained answers to interrogatories are taken into account the whole exercise reeks of incompetence. The evidence warrants no other conclusion.
In the result I find that Mogal was incompetent, lacked the necessary skill to do the work and thus engaged in misleading or deceptive conduct when it represented, and continued to represent, that it was competent and skilled.
It follows that I have reached the conclusion that Comalco is entitled to succeed on the cause of action based on s.52 of the Trade Practices Act insofar as the first part of para.l9 of the amended statement of claim is concerned. That part of the paragaph alleged that Mogal represented that it was sufficiently skilled and competent to perform the door to door carriage which was involved. It also alleged that Mogal would use the necessary equipment to perform the task. That representation, I am satisfied, was made, but it is of a different character from the other representation in the paragraph. Unlike the earlier part of the paragraph it does not involve a representation that Mogal was generally skilled and competent to do the work; rather it is a statement that in performing the work, it would use the necessary equipment. To that extent it is to be likened to the representation alleged in para.18 of the amended statement of claim with which I now deal.
The allegation in para.18 was that Mogal represented that it would exercise reasonable care in stuffing the coils into the containers and in the door to door carriage. In a sense that representation, if made, was co-extensive with implied terms of the contract between the parties. There is always a question whether a statement which is promissory may also be regarded as a representation. That is not always an easy question to answer. I am saved the need to answer it here for the following reasons.
The representation is a representation as to future conduct. It differs from the representation made in the first part of para.l9. A statement as to future conduct will only be found to be misleading if its maker is shown not to have had reasonable grounds for making it at the time it was made. The onus used not to be an easy one for an applicant for relief to discharge. But more recently proof of lack of reasonable grounds for belief has been facilitated by the provisions of subsec.51A(2) of the Trade Practices Act. However, counsel for Comalco expressly declined to rely on s.51A. I have accordingly left it out of account. Having done so, I have reached the conclusion that, although the coils in question were damaged by improper packing, I cannot be satisfied on the evidence that, at the time the representation alleged in para.18 was made, Mogal did not have reasonable grounds for making it. I therefore reject the causes of action based on para.18 and the second part of para.l9 of the amended statement of claim. But, as earlier said, I find the cause of action based on the first part of para. 19 established.

The Contractual Causes of Action
76. I have reached the conclusion that these must fail. My finding on
the question of causation is determinative of them. There are substantial issues concerning the nature and operation of the consignment note. Is it a bill of lading or simmilar document of title within the Sea-Carriage of Goods Act? If it is, The Hague Rules are applicable to it. If it is not, does s.4 of the Act nevertheless operate to make the rules applicable? For the moment I put these questions aside and assume, without deciding, that the rules are, for one reason or another, applicable to the contract between the parties. Comalco must nevertheless fail because the cause of the damage was faulty packing by Mogal, an event which happened well prior the loading of the coil on to the vessel. If the rules are applicable, Article VII permits the parties to enter into any agreement as to the liability of the carrier for loss or damage to goods prior to the loading of them on to the vessel which is to carry them. Conditions 3 and 4 endorsed on the back of the consignment note would thus be unaffected by the application of the rules. Article III, rule 8 would not operate to modify or override the two conditions in their application to what occurred at Mogal's depot when the coils were stuffed into the containers.

It is plain that it is the carriage by sea to which the rules are directed. This is made clear in Article I in the definition of "Carriage of goods". It covers the period from the time when the goods are loaded on to the vessel to the time when they are discharged from it. I refer also to the definition of "Contract of carriage" which has earlier been set out.
The same result may be reached by a different route. If the rules are applicable, Article III, rule 2 will not operate to render Mogal liable for the damage if the cause of the damage was due to one or more of the circumstances provided for in Article IV, rule 2. Here the cause of the damage was inadequate packing or stuffing of the coils by Mogal, the matter specifically provided for in para. (n) of rule 2 of Article IV. The fact that it was Mogal which was responsible for the faulty packing does not help Comalco. Again the provisions of conditions 3 and 4 operate to exempt Mogal from liability.
Although the matters which I have mentioned dispose of the contractual causes of action, I should say something about the submissions concerning the suggested operation of the Act and the rules and the question whether the consignment note is a bill of lading or similar document of title. I dispose, first of all, with the submission that, irrespective of whether it is or not, s.4 of the Act operates to make the rules applicable. I reject this submission. Section 4 operates to give the rules contained in the Schedule to the Act effect in relation to and in connection with the consignment of goods by sea in the circumstances there provided for. Thus, in order to construe s.4, one needs to take into account the provisions of the rules. The expression "Contract of carriage" as defined in Article I of the rules applies only to contracts of carriage covered by a bill of lading or any similar document of title. The purpose of the rules is to provide a code or regime which will govern contracts of carriage by sea as defined in the rules. The apparently unqualified words of s.4 of the Act must therefore be read down so as to limit their operation to what it is to which the rules apply, namely, contracts of carriage covered by bills of lading or similsr documents of title. Furthermore, s.4 must be read in context. Part of that context includes s.6 which provides that every bill of lading or similar document of title is to contain an express statement that it is to have effect especially to the provisions of the rules. Thus s.6 reflects a general consistency between the Act and the rules set out in its Schedule. The Act, read as a whole, evinces a clear intention that it is to apply only to the types of transactions referred to in the rules, namely, transactions evidenced by bills of lading or similar documents of title.
Before leaving this matter, I should say that I was referred to no authority which lent support to Comalco's submissions. On the other hand there are numerous statements in texts and authorities which proceed on the assumption that it is only to bills of lading or similar documents of title that the rules apply. I should also say that I have considerd the submission made by counsel for Comalco based on Article VI of the rules. I reject his contention that the significance of the Article for present purposes is that it lends support to the view that the only sea carriage of goods outside the rules which the Act permits is one governed by a special agreement made pursuant to Article VI. If the submission were correct, it would mean that any shipment which was the subject of a charterparty and not a bill of lading could nevertheless be governed by the rules. That could not be correct.
It remains to consider whether the consignment note is, or is evidence of, a bill of lading or similar document of title. In order to assist me, counsel for Comalco provided a helpful analysis of the contract between the parties stating the indicia which he claimed should lead me to conclude that it was.
"Bill of lading" is not defined in the Act or the rules, but it has three essential features, namely:-
1. It is a receipt by a ship owner acknowledging that the goods

have been delivered to it for carriage.

It is evidence of the contract of affreightment between the

shipper and the carrier.

It is a document of title by the endorsement of which the

property in the goods for which it is a receipt may be transferred or the goods pledged or mortgaged.

By statute the rights and liabilities of the shipper under the contract of affreightment may be transferred with the full property in the goods to the consignee or the indorsee of the bill of lading. The relevant provision in New South Wales is the Sale of Goods Act 1923, s.50A. See generally Scrutton on Charterparties and Bills of Lading, l9th ed. (1984) at 2.
Although the rules do not define the expression "bill of lading", there are indications in them of what it must provide. Thus Article III, rule 3 provides that, after receiving the goods into his charge, the carrier, or the master or agent of the carrier shall issue to the shipper a bill of lading showing a number of things including the apparent order and condition of the goods. Rule 4 provides that the bill of lading shall be prima facie evidence of the receipt by the carrier of the goods as described in accordance with rule 3.
The indicia of a bill of lading contained in the analysis prepared by counsel for Comalco refers to a large number of matters not all of which I propose to mention. I have, however, taken them all into account. Essentially it is claimed that:-
(a) The consignment note is a formal receipt acknowledging that

goods as stated therein and in the condition also stated therein have been received in to Mogal's custody for the purpose of carriage by sea.

(b) The consignment note purports to be a memorandum or evidence

of the contract of carriage setting out its terms.

(c) The consignment note purports to be a document of title

because of the reference to the consignee as "to order" and the description of copies of the consignment note as "Negotiable delivery orders". The document is not a "non negotiable document".

(d) The consignment note identifies the vessel, the port of

loading, the port of discharge, the voyage, the number of packages and the expected date of departure of the vessel.

(e) The document relates to the carriage of goods by sea. (f) Mogal has assumed the obligation of carrier under the

document which describes it as "the Carrier".

(g) The definition of "Carrier" in Article I of the rules is not

an exhaustive definition but an inclusive one so that the rules do not require the carrier necessarily to be the owner or charterer of a ship.

In her analysis of the consignment note counsel for Mogal relied upon the provisions of conditions 5 and 11 which I have earlier set out. Condition 5 confers the benefit of exemptions or limitations of liability on servants of Mogal and on any other person or company with whom it may arrange for the carriage or other handling of the goods. Condition 11 provides that Mogal may carry all goods or have them carried by any method on any usual terms which Mogal in its absolute discretion deems fit. Comalco authorises Mogal to arrange the carriage of the goods by an independent contractor or subcontractor of Mogal. Mogal is empowered to enter into any such contract or sub-contract as principal or as agent for Comalco in aspect of the sea carriage of the goods. Any such contract is deemed to be made by Mogal as agent for Comalco and is to be subject to the terms of the regular form of bill of lading in use by the contracting steamship company.
It was contended by counsel for Mogal that, at least in relation to the sea carriage of the goods, it had entered into the contract for the sea carriage of the goods as agent for Comalco Aluminium and not as principal. I reject this submission because it is my opinion from a reading of the whole of the consignment note that Mogal contracted as principal to undertake the transportation of the goods from Comalco's premises to those of New Zealand Can. The carriage, as the consignment note makes clear, was door to door. Condition 11 conferred upon Mogal the right to employ an agent especially for the sea carriage of the goods. It was empowered to enter into a contract with a ses carrier either as principal or agent for Comalco. There is no express evidence dealing with the question whether Mogal purported to enter into the contract with Oceania Shipping Corporation Limited as principal or agent but the ocean bill of lading which covered the carriage of the goods in question was one in which Mogal is described as the consignor and its New Zealand agent as consignee. Furthermore, I think there is a real question (which I do not need to decide) whether Mogal could shed its own responsibility for delivering the goods by employing agents. The tenor of the consignment note required Mogal itself to see to the delivery of the goods to the consignee. If Mogal contracted with a sub-contractor to perform part of the work, it did so in relation to the sea carriage of the goods and the pick up and delivery of them in New Zealand as principal but subject, of course, to the conditions endorsed on the back of the consignment note. If Mogal did enter into the bill of lading as agent for Comalco, it must have done so on the basis that Comalco was its undisclosed principal. This may mean that Comalco is entitled to proceed against the sea carrier if there were a failure to deliver the goods in good order and condition, but it does not mean that, for that reason, it loses its rights against Mogal.
The existence of freight forwarders has led to there being a body of authority and practice concerning their methods of operating and their rights and obligations qua consignors and consignees which deal with them. I refer generally to Freight Forwarders, D.J Hill (1972), particularly to paras. 310 et seq., pp.l85 et seq. and to Schmitthoff's Export Trade, 8th ed. (1986), especially at pp.249-252.
In a paragraph headed "Forwarder's Consignment Note" Hill (op.cit.) says, para.316, p.l88:-

"A forwarder may also accept goods for forwarding under consignment notes ssued in his own name, to be followed up in due course by bills of lading issued by or on behalf of the carrier in question where sea transit is involved. However, where sea and land transit is to be effected, as in the case of most continental shipments, this may either be by means of a through bill of lading covering the whole transit, or else by bill in respect of the sea transit, together with a waybill or consignment note in respect of the land part of the carriage. Where a waybill is issued by a forwarder for an international transit, it will usually be forwarded to the latter's receiving agent, who will in turn prepare delivery notes to enable the consignees to obtain possession of the goods.

It can therefore be seen that where documents relating to the possession or ownership of goods are issued by a forwarder in the course of his operations, it is essential to determine the exact nature of the document ...".

Later Hill says (para.332, pp.197-8) that certain of the larger forwarding companies issue documents of control which are commonly called house bills of lading. They differ from orthodox bills of lading in that the forwarder does not issue a house bill in the capacity of a carrier, but with the intention of substituting his own doucments of control for a carrier's bill of lading. Hill says that one of the disadvantages of a house bill to a shipper is that it is not issued by the actual carrier but merely by a forwarder who has neither the means nor the intention to perform any part of the operation. Virtually all the obligations entered into by the forwarder will be performed by a third party. Hill goes on to say:-

"Furthermore, by issuing his own house bill of lading, a forwarder can restrict his liability as regards the transit without the need to use any further contractual documents. In other words, by issuing a house bill of lading to his client, a forwarder can often obtain the benefits of acting as carrier without necessarily suffering any of the disadvantages thereof. Where, however, the contract of carriage is effected subject to the actual carrier's bill of lading, the forwarder must introduce his own trading conditions as a separate contractual document to limit his liability, or else he will be faced with the problem of ensuring that they are brought to the notice of his client in order to bind him, which in practice is not always easy where a forwarder is dealing with a new client to whom notice of the terms has not been given prior to a forwarding contract being entered into."

In a paragraph headed "The forwarder acting as principal or as agent" Schmitthoff (op.cit.) says (p.249):-

"A forwarder may act as a principal or as an agent. Historically, forwarders acted as agents on behalf of their customers but the practice has changed and in modern circumstances they often carry out other services, such as packing, warehousing, cartage, lighterage, insurance, or, in container transport, the groupage or consolidation of parcels of various customers into one container. Often they act as carriers. It follows that, in law, they qualify more often as principals than as agents. Nevertheless, it has to be ascertained in every individual case in which legal capacity the forwarder acted. The answer depends on the construction of the contract between the forwarder and his customer and the facts of the case."

In Carrinaton Slipways Pty. Limited v. Patrick Operations Pty. Limited (1991) 24 NSWLR 745, Handley JA, who wrote the principal judgment, said (752-3):-

"The nature of the contracts that a forwarding agent makes with its customer and its personal liability or otherwise on the contract of carriage have been discussed in reported cases and in the literature. These questions were considered at some length in the judgment of the trial judge. One of the questions concerns the nature of house bills of lading issued as such by forwarding agents and their liability thereunder: see Hill (at 197-198) Tetley, Marine Cargo Claims, 3rd ed (1988) at 707-708 and the article by Ian C. Holloway, 'Troubled Waters: The Liability of a Freight Forwarder as a Principal Under Anglo-Canadian Law' (1986) 17 Journal of Maritime Law and Commerce

243. These questions do not directly arise in the present case. The Peace Line bill, on its face, was an ocean bill. It was a house bill in fact but its true character was concealed. Nevertheless I have derived considerable assistance from the statement by the editors of the l9th edition of Scrutton (at 384): 'A 'house bill of lading' issued by a forwarding agent acting solely in the capacity of an agent to arrange carriage is not a bill of lading at all, but at most a receipt for the goods coupled with an authority to enter into a contract of carriage on behalf of the shipper. It is not a document of title, nor within the Bills of Lading Act, 1855, and it is unlikely that it would ever be regarded as a good tender under a cif contract.'"

As Hill (op.cit.) has said in para.316 of his work, where documents relating to the possession or ownership of goods are issued by a forwarder in the course of his operations, it is essential to determine the exact nature of the documents. Likewise Schmitthoff (op.cit.) at p.249 said that it has to be ascertained in every individual case in which legal capacity the forwarder acted. The answer depends on the construction of the contract and the facts of the case. In the passage from Scrutton (op.cit.) cited by Handley JA. in Carrington Slipways, the editor of the relevant edition proceeds upon the basis that the freight forwarder will be acting solely as an agent. That is not the position here.
I have earlier referred to the three essential elements of a bill of lading, a receipt for the goods, evidence of the contract of affreightment, and it being a document of title. In my opinion each of these elements is here present. The consignment note is plainly both a receipt for the goods and evidence of the contract of affreightment which, in my opinion, was entered into by Mogal as principal. In addition to the matters with which I have already dealt it may be observed that it is referred to in the consignment note as "Carrier".
So far as the question whether the consignment note is a receipt is concerned, it is plainly such a document. It specifies the cargo and the numbers of the containers into which the coils are to be loaded. It is true that usually bills of lading are not signed until goods are on board the vessel on which they are to be shipped. The practice for masters or ships' agents then to issue a clean (or qualified) receipt for the goods is the usual practice. But I have found nothing in the texts or authorities to which I have referred which suggests that a receipt given before loading on to the vessel will render the contract one which is not a bill of lading.
The next question is whether the consignment note was document of title. It has the hallmarks of one. It is described as a negotiable delivery order. There is a box, unfilled in in this csse, which provides for endorsements. More importantly the box headed "Consignee-Receiver" has the words "TO ORDER" inside it. The name of the consignee which the evidence makes clear was to be New Zealsnd Can does not appear otherwise than as the party to be notified of the arrival of the goods. All these matters point to an intention by the parties to make the consignment note a document of title.
It follows that I am of opinion that the consignment note is a bill of lading notwithstanding that it provides for steps in the process of the transportation in question other than, or additional to, the carriage by sea the details of which appeared on the face of the note. As previously mentioned, the name of the vessel, the ports of loading and discharge and the date of anticipated departure were all specified. If it should be thought that the consignment note was not strictly speaking a bill of lading then, in my opinion, it was plainly a similar document of title.
Unfortunately for Comalco my conclusions about the nature of the consignment note are of no assistance to it. In order to succeed on the contractual claims, Comalco needs to resort to The Hague Rules. It cannot get away from the fact that these will apply only from the time of loading to the time of discharge. The cause of the damage here occurred prior to loading when Mogal failed properly to pack the coils. The position is no different if one treats the consignment note, not as a bill of lading, but as a similar document of title, because the definition of "Contract of carriage" in the rules restricts the application of the rules to similar documents of title insofar as such documents relate to the carriage of goods by sea. The evidence establishes that the sea carriage of the goods was not the problem.
In effect the discussion on whether the consignment note was a bill of lading or similar document of title has led us back to where the discussion began. The Hague Rules will not help Comalco because the damage was caused by negligent acts or omissions which occurred prior to loading. I have felt obliged to enter upon the discussion of the nature of the consignment note in deference to the extensive submissions of counsel about the matter. In fairness to them, they were not to know what my findings on the question of causation would be.

Conclusion
100. In summary Comalco's case, insofar as it is based on s.74 of the Trade Practices Act and claims for breach of contract, breach of Mogal's duty as a bailee and for negligence, fails. It succeeds in respect of its cause of action under s.52 of the Trade Practices Act. It follows that it is entitled to judgment in the sum of $173,264.36 together with interest. It is agreed by the parties that interest should run from 11 April 1990 to the date of judgment. Interest up to 10 March 1992 was agreed upon in the sum of $49,771.76. It was also agrewd that interwst from 10 March 1992 should run at $71.20 per day. To the figure of $49,771.76 should therefore be added the sum of $26,700 making a total of $76,471.76 for interest. There will accordingly be judgment for Comalco against Mogal in the sum of $249,736.12.

In case my calculations of the amount of the interest are not correct, I have reserved liberty to the parties to apply provided that leave is exercised within seven days of today.
In relation to costs, a good deal of the time taken up in the hearing was occupied in relation to matters upon which Comalco has failed. The hearing occupied five hearing days. I think justice will be done by an order that Mogal pay Comalco one half of its costs. That is the order which I make.
That then leaves Comalco's action against the second defendant, Oceania Shipping Corporation Limited. I need to hear counsel for Comalco further in relation to that matter. In particular, I need to be satisfied that it is a matter in which Comalco should have leave to proceed against that defendant, that Comalco Aluminium, whether as undisclosed principal or otherwise (eg. by operation of condition 5(b) of the consignment note), was a party to the ocean bill of lading and whether I should be satisfied that there is evidence which enables me to find that the second defendant was responsible for the damage suffered by Comalco. In this respect I refer to my finding on the question of causation which suggests to me that the evidence establishes that the second defendant was not responsible for the damage to the coils.
In the circumstances I propose to reserve leave to Comalco to move for judgment against the second defendant provided that any such application is notified to my Associate within 14 days of today. There will be no need, of course, for Mogal to be concerned in that application.

[1993] FCA 180

18 MARCH 1993

Key Legal Topics

Areas of Law

Competition Law

Legal Concepts

Misleading or Deceptive Conduct

Reliance

Compensatory Damages

Costs