Espresso Company Australia Pty Ltd v Savino Del Bene Australia Pty Ltd - [2020] NSWLC 13

Local Court

New South Wales

Medium Neutral Citation: Espresso Company Australia Pty Ltd v Savino Del Bene Australia Pty Ltd [2020] NSWLC 13
Hearing dates: 16 December 2019 and 15 May 2020
Date of orders: 3 July 2020
Decision date: 03 July 2020
Jurisdiction: Civil
Before: Huntsman LCM
Decision:
Verdict for the defendants on the Statement of Claim
Verdict for the cross-claimant on the Statement of Cross Claim
The Statement of Claim is dismissed.
The cross-claimant succeeds against the cross-defendant in establishing the indemnity claimed in the Cross Claim, but given the orders made in relation to the Statement of Claim, no further order on the Cross Claim is required

Catchwords:
Carriage by sea and land; bailment; sub-bailment; contract; bailment on terms; Bill of Lading; time bar clause; estoppel; liability limitation clauses; Himalaya clause; whether delivery included to plaintiff’s warehouse; Hague Visby Rules; implied terms; applicable contract of carriage; breach of contract; interaction between the concurrent contracts, exclusion clauses in contracts, Himalaya clause, and bailment; estoppel in relation to time bar in contract; intersection of bailment and contractual law principles

Legislation Cited:
Carriage of Goods by Sea Act 1991 (Cth)

Cases Cited:
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266
Life Savers (Australasia) Ltd v Frigmobile Pty Ltd & Another[1983] 1 NSWLR 43
China Ocean Shipping Co Ltd v PS Chelloram 7 Co Ltd (1990) 28 NSWLR 354
Legione v Hateley (1982-1983) 152 CLR 406
Moratic Pty Ltd v Gordon 13 BPR 24
Hobbs v Petersham Transport Co Pty Ltd (1971) 124 CLR 220
The Pioneer Container [1994] 2 AC 324
The Mahkutai [996] AC 650
Cro Travel PL v Australia Capital Financial PL [2018] NSWCA 153
Goldman v Thai Airways International Ltd [1983] 1 WLR 1186
Webster v Strang; Steiner v Strang [2018] NSWSC 495
Kamil Export (Aust) Pty Ltd v NPL (Australia) Pty Ltd [1996] 1 VR 538

Texts Cited:
Carter on Contract (Lexis Nexis)
Bailment, N.E. Palmer, 2nd edition, The Law Book Company Limited, 1991

Category: Principal judgment
Parties: Espresso Company Australia Pty Ltd
(ACN 123 284 015), plaintiff
Savino Del Bene Australia Pty Ltd
(ACN 098 199 270), first defendant and cross-defendant
FRF Holdings Pty Ltd t/as FRF Couriers
(ACN 052 544 126), second defendant and cross-claimant
Dotrans Logistics Pty Ltd
(ACN 623 915 104) ,third defendant
Lam Vien DO t/as Dotrans Logistics
(ABN 27 165 057 075), fourth defendant
Representation:
Counsel:
Derek Hand, plaintiff
Quintin Rares, first defendant and cross-defendant
Ivan Griscti, second defendant and cross-claimant
No appearance, third defendant
No appearance, fourth defendant
Solicitors:
SRB Legal, Perth, plaintiff
Holding Redlich, Sydney, first defendant and cross-defendant
Mason Black Lawyers, Sydney, second defendant and cross-claimant
No appearance, third defendant
No appearance, fourth defendant

File Number(s): Case number 2019/00039504

Judgment

Background

The plaintiff, Espresso Company Australia Pty Ltd (“Espresso Company”), ordered 53 ‘Anfim’ coffee grinders (“Goods”), from the manufacturer in Italy, Anfim Milano SRL (“Anfim”). Anfim is not a party to the proceedings.
The First Defendant, Savino Del Bene Australia Pty Ltd (“Savino Australia”) is a wholly owned subsidiary of the global company based in Italy. Savino Australia and/or Savino Italy was engaged by Espresso Company to arrange carriage of the goods from Italy.
The shipping from Milan to Australia was arranged by Savino Italy. The Goods were transported by ship between Italy and the port of Sydney, then by road to Savino Australia’s warehouse in Mascot, Sydney. From Mascot the goods were transported in the truck of the third /fourth defendant to the Espresso’s premises in Belrose, Sydney.
The Second Defendant, FRF Holdings Pty Ltd t/as FRF Couriers (“FRF Couriers”) was engaged by Savino Australia to undertake the road carriage from the property of Savino Australia in Mascot, to the property of Espresso Company in Belrose. FRF Courier’s trading terms, on which they contracted with Savino Australia in January 2013, contained the terms of their contract.
FRF sub-contracted with Dotrans Logistics Pty Ltd, third defendant, and/or Lam Vien Do t/as Dotrans Logistics, fourth defendant (“Dotrans”) to carry the grinders to Espresso Company. The goods were damaged during transport from Mascot to Belrose, on 1 March 2018.
With respect to the Third and Fourth Defendants, Mr Do, who was the driver of the truck, operates as both a sole trader and has a company, Dotrans Logistics Pty Ltd. There is a contract between the Third and/or Fourth Defendants, and FRF Couriers (“FRF-Dotrans Contract”). This contract bears both Mr Do’s sole trader ABN and the company’s name. Neither Mr Do, nor Dotrans, filed an appearance or a defence.

The proceedings

This matter was listed for hearing on 16 December 2019. On that date each active party in the proceedings tendered affidavit evidence – there were lengthy annexures to the affidavits upon which the parties variously relied to establish the contracts said to have been made between the parties. As indicated above neither the third or fourth defendant filed an appearance or a defence.
Only one witness was cross-examined in the hearing, this was Mr Byron Winburn-Clarke, solicitor for the plaintiff.
The hearing of evidence concluded on 16 December 2019 and the matter was adjourned, part heard, and directions were made for the filing and service of written submissions.
The matter was listed for further submissions in reply, on 3 April 2020. Subsequently, given Covid 19 protocols, the hearing of 3 April was vacated and the timetable for submissions in writing was extended to 9 April 2020. Lengthy and detailed submissions in reply were received from the plaintiff on 14 April 2020. Correspondence from the first defendant on 15 April 2020 raised various issues and objections, and noted the plaintiff objected to the raising of those issues by the first defendant.
The court then made the following directions on 15 April 2020:

1)   The court notes the complex and lengthy submissions of parties in this matter, and the number of authorities cited, and the number of legal issues raised. The presiding magistrate remains concerned, as was expressed earlier in the proceedings, of the potential for disproportionate costs in this matter, noting the amount of the claim. The parties are again invited to consider whether settlement is possible in order to reduce the risk of disproportionate costs. If the matter settles the court is to be advised as soon as possible.
2)   The procedural fairness concerns of the second defendant [should read first defendant] are noted.
3)   Given procedural fairness concerns, and the complexity and number of legal issues raised, and the number of authorities cited, then it is appropriate for this matter to be listed for closing submissions to be made orally by legal counsel. Noting the substantial written submission filed to date, and to reduce costs, there will be no further timetable for written submissions to be prepared and filed.
4)   The matter is to be listed for submissions on 12 May 2020 (see direction 7 below). If this date is unsuitable to any party, then the parties are to confer as to availability and are to send to CMO by email their available dates.
5)   The date of 8 May 2020 when this matter was listed for decision only, is vacated.
6)   Hard copies of all legal authorities relied upon are to be delivered to the Chief Magistrates Office, level 5, Downing Centre Local Court, as soon as possible and marked “Attention Magistrate Huntsman”
7)   Given the current Covid 19 situation, there will be arrangements in place on the hearing date to address distancing concerns. The parties may attend in person, or by teleconference. If the parties attend in person, physical spacing techniques will be employed in the court room. Instructing solicitors will not be seated at the bar table, but can attend and be seated in the body of the court room. Counsel will be spaced at the bar table, and it may be that only one Counsel will physically occupy the bar table at any time. The Presiding Magistrate will ensure such distancing techniques are maintained for those who attend in person on 12 May, and those who attend by telephone will participate by teleconference.
8)   Any party attending by telephone must ensure that any written material is provided to the court and the parties prior to the scheduled date. However given there will be no further timetable for written submissions it is anticipated there will not be any further written material to be provided.

Subsequently, due to unavailability of Counsel on 12 May 2020, the matter was listed on 15 May 2020. On that date all active parties had the opportunity to make closing submissions. The court was supplied copies of authorities on which the parties relied on the morning of 15 May 2020. The court informed the parties that the intention of the directions made on 15 April 2020 - for authorities to be supplied by the parties as soon as possible - was to ensure that those authorities could be considered before the submissions hearing, and that the late provision, on the morning of the hearing, was not in the spirit of the directions of 15 April 2020, nor was it assisting the court to engage with the parties’ submissions during the hearing.
On 15 May 2020, after a full day of oral submissions, the decision was reserved.

The evidence

As indicated above the evidence consisted of affidavit evidence and the oral evidence of Mr Byron Winburn-Clarke, solicitor for the plaintiff. The evidence will be further detailed below. The parties also settled a statement of agreed facts.
The focus of the parties’ submissions were to the construction of contracts and Bills of Lading, bailment, and applicable legal principles. The parties’ submissions as to these issues were lengthy and have been extracted and/or summarised below.

Agreed facts

The parties agreed on the following facts.
On 23 May 2017 the First Defendant notified the Plaintiff by email that it had accepted the Plaintiff’s credit application and emailed the “Savino Del Bene Australia Pty Ltd – Terms and Conditions of Contract” to the Plaintiff.
The Plaintiff contacted the First Defendant to arrange for the ocean freight to Australia and for local delivery of the Goods and provided the following documents to the Plaintiff on or about the date they bear:

Express Bill of Lading dated 19 January 2018 issued by Savino Del Bene Italy (who is not a party to the proceedings) (“House Bill of Lading”);

Arrival Notice dated 5 February 2018 bearing the details of the First Defendant; and

Tax Invoice 230862 dated 12 February 2018 bearing the details of the First Defendant.

On 1 March 2018 the First Defendant engaged the Second Defendant to undertake and/or arrange the delivery of the Goods between the First Defendant’s warehouse in Mascot to the Plaintiff’s premises in Belrose.
The Second Defendant had previously entered into a contract with the First Defendant on 30 January 2013 to provide cartage services and which allowed for the Second Defendant to subcontract any part of the cartage services.
On 1 March 2018 the Goods were transported in a truck driven by Mr Do, who trades as the Fourth Defendant and who is also the sole director of the Third Defendant.
The Goods were damaged on 1 March 2018 whilst in transit on the road between the First Defendant’s warehouse in Mascot to the Plaintiff’s premises in Belrose, and to such an extent that they were rendered in a condition unfit for resale.
The Plaintiff notified the First Defendant of the damage to the Goods on 1 March 2018.
The First Defendant provided CCTV stills from the First Defendant’s warehouse to the Plaintiff on 2 March 2018.
The First Defendant has sent documents titled “Notice of Intent to Claim” to the Second Defendant on 7 and 9 March 2018 and a Letter of Demand on 15 March 2018.
The Goods were unable to be repaired or salvaged and were disposed of.

The plaintiff’s claims

The plaintiff makes the following claims:

As against the First Defendant:

a claim for money due on an account stated;

a claim for breach of contract; and

a claim for breaches of duties owed as a bailee.

as against the Second Defendant:

a claim for breaches of duties owed as a bailee; and

a claim in negligence for breach of a common law duty of care; and,

as against the Third and Fourth Defendants:

a claim for breaches of duties owed as a bailee; and

a claim in negligence for breach of a common law duty of care.

The claim of the cross claimant, FRF Couriers, against Savino Australia, cross defendant

In the cross claim by FRF Couriers against Savino Australia, FRF Couriers rely on an indemnity clause in the contract it has with Savino Australia, so it states if there is any liability for damage then it is indemnified under the contract.

The Evidence

The parties relied on agreed facts and affidavit evidence. The plaintiff’s evidence consisted of an affidavit by the plaintiff’s solicitor, Mr Byron Andrew Winburn-Clark who was also cross-examined at the hearing; and also the affidavit of Tye Joyce, Marine and Commercial Recoveries Consultant at National Transport Insurance Limited (“NTI”). The first defendant/cross defendant relied on affidavit evidence by Kathryn Julie Johnston and the second defendant/cross claimant relied on affidavit evidence of Sam Giannetto.
Only one witness was required for cross examination in the proceedings, this was Mr Byron Andrew Winburn-Clark. The affidavits of all other witnesses were received in evidence and were not challenged in cross-examination.
The affidavit evidence of the plaintiff’s witnesses (and the annexures thereto) indicates that by email of 23 May 2017, Espresso Company was advised that the credit application by Espresso Company with Savino Australia had been approved. The letter attached to the email is on Savino Australia letterhead and contains the words “International Freight Forwarding Company”, and “Head Office [Italian address]”. The header to the letter also states the Sydney, Melbourne and Brisbane addresses. The letter informs that the credit application has been approved, and that the terms and conditions are attached, (the attached terms and conditions contain clauses 1-42.8, which are discussed below). Also attached to the email are the bank account details.
An email of 15 December 2017 (page 14 of court book) from Anfim to Espresso Company states “will you please ask your freight forwarder to get in touch with their Italian counterpart to organise pick up”. An email from Anfim to Savino Australia, Espresso Company and others, dated 19/12/17 requests collection of the goods “give instructions to your local agent”. In an email of 17/12/17 (p 12 court book) Savino Australia says they will contact their Milan office; and Savino Australia advises Anfim that they will give instructions “to our Milan office” (p118 of the court book/Exhibit 1) . An email of 18/12/17 to Anfim from Espresso says that “Savino is responsible for this shipment”. The purchase price of the goods, was Euro 28,024.85 – as stated on an invoice issued by Anfim to Espresso Company dated 21 December 2017. This invoice states that Anfim’s terms and conditions apply and that the goods remain the property of Anfim until payment.
On 19 January 2018 Savino (Italy) issued an Express Bill of Lading to Espresso Company for delivery of the goods. The Express Bill of Lading with terms and conditions is annexed to the affidavit of Mr Joyce (p 58 Court book). The document is issued by Savino Italy, and states that the shipper is Anfim, the Consignee is Espresso Company, and route instructions are Savino Australia, and “Insurance not covered by us” and shipping subject to terms and conditions on reverse. It also states:

“READ CLAUSE CONCERNING EXTRA FREIGHT AND LIMITATION OF LIABILITY ON THE REVERSE SIDE HEREOF”.

On 5 February 2018 Savino Australia issued an arrival notice to Espresso Company, with respect to the arrival of the goods at the Sydney port on 18 February 2018. The Arrival Notice records the details of the Ocean Bill of Lading, the House Bill of Lading and states that the goods are ready to be cleared by Savino Australia.
On 1 March 2018 Espresso Company sent an email to Savino Australia regarding the goods being discovered as damaged upon delivery to Espresso Company’s premises at Belrose, New South Wales on 1 March 2018. Attached is a copy of the “Cartage Advice with receipt” containing a handwritten notation: “Arrived 100% damaged”.
On 1 March 2018 the transport supervisor for Espresso Company, Nick Bowen, emailed employees of Savino Australia, advising of damage to the grinders/goods. Ms Aritsdiabel, of Savino Australia on 1 March 2018 emailed FRF Couriers attaching the CCTV stills of the goods prior to leaving Savino Australia’s warehouse, stating the cargo was ok when it left the warehouse (p78 court book).
The email from Ms Aristizabal of Savino Australia to FRF Couriers, of 1 March 2018, states in the subject part of the email, “espresso company delivery damage intent to claim” and states:

“as per earlier conversation we have received the attached photos for today’s delivery to Espresso Company in Belrose. At this stage….the client is declaring that 100% of the goods are damaged. For your reference, we are attaching the pictures that the client sent, where is clearly visible that the cargo was not properly strapped and of course the pallets collapsed. This is a very disappointing issue, as we always trust your drivers to handle our cargo as their best, and much more when the boxes are clearly marked as “fragile”. Following this email, you will receive our intent to claim, where we will include the information and the technical report sent from the clients”.

The email from Ms Rea of Savino Australia, on 2 March 2018, to Nick Bowen of Espresso Company, copied to Ms Atkinson states:

“ hi Nick… I’m so sorry for what did happen to your cargo, what does really disappoint me is the fact that the truck driver did not follow basic rules to secure the cargo, more so the cargo was clearly marked fragile, putting our reputation on the line… As you know this is not the service that we been providing to your organisation. Nick the insurance will be involved in this matter, we’ll send you shortly a letter you will need to lodge a formal intent claim .

The letter of 8 March 2018 from Savino Australia to Nick Bowen refers to the claim for alleged damage to goods and acknowledges receipt of the letter and advises that it will be processed in due course.
A letter of 9 March 2018 from Espresso Company to Savino Australia states their formal notice of intent that they will be making a claim against Savino Australia “in due course” and that they have notified their insurers of this claim. Suggestion is made that Savino Australia notify their insurer of this intent to claim. A letter of 15 March 2018 from Savino Australia acknowledges receipt of the letter and that it will be processed in due course.
On 7 March 2018 Savino Australia sent a notice of intent to claim letter to FRF couriers in relation to the damage to the goods.
The plaintiff’s insurer, NTI, instructed Integra Technical Services to survey the coffee grinders and on 28 March 2018 the survey report was issued. The Survey Report (see p 81 court book) describes the Savino group as:

“ Savino Del Bene S.p.A is a logistics provider with a world wide network, specialising in supply chain management, offering freight forwarding services for ocean, air and surface transportation. The Savino Del Bene Group has over 3800 employees, 158 own branches and 102 subsidiary offices. The company’s head office is located in Florence (Italy), while the wholly owned Australian subsidiary is located at 247 King Street, Mascot NSW 2020. In this case, Savino Del Bene was contracted by the insured to ship the object consignment from Milan (via Genoa) to the insured’s warehouse in Belrose”

The Survey Report also states (page 83 court book) under the heading “Contract arrangement between the insured & Savino Del Bene”:

The insured has passed to us a copy of the Savino Del Bene Conditions of Contract shown on the reverse side of its House B/L no … dated 19 January 2018 (included at enclosure 4), which we understand govern the terms of the shipment of this consignment on a ‘door to door’ basis from Milan to Belrose.[my italics] We draw Insurer’s attention in particular to clause 6 Liability [the report then sets out clause 6(b) and (c) and also clause 8 in relation to multimodal transport].

Mr Joyce’s affidavit annexes the customer application for credit and carriage of goods and the Savino Australia terms and conditions of contract; and also annexes a document, under logo of the second defendant, FRF Couriers, titled “application for subcontractors”.
The plaintiff’s other witness, Mr Winburn-Clarke, details correspondence from 2 March 2018 onward between the parties. He states that from that correspondence he is aware that Savino Australia instructed Espresso Company to file a formal intent to claim. I observe that it is not clear from the email correspondence at page 5 of the annexures to the affidavit. That correspondence states “Nick, the insurance will be involved in this matter, we’ll send you shortly a letter that you will need to lodge a formal intent to claim”.
Mr Winburn Clarke further states that on or about 15 October 2018, on the instructions of Espresso’s Company’s insurer, NTI, he caused to be sent to Ms Atkinson, of FRF Couriers, a formal letter of demand setting out the nature of the claim and the quantum – this is annexed to his affidavit. On or about 15 November 2018, he forwarded a copy of his letter of 15 October 2018 to Ms Atkinson along with photographs of damaged cargo, as he had not received a response to the letter of 15 October 2018. He states that on 16 November 2018 Ms Atkinson sent his secretary an email advising enquiries would be conducted and that on or about 27 November 2018 he sent a further letter to Ms Atkinson advising of his instructions to issue proceedings. He states that on or about 29 November 2018 he received a further email from Ms Atkinson, addressed to his secretary, advising “compensation will take a few days to process”. He states:

“My understanding, which arose out of the email from Ms Atkinson that I refer to paragraph 9 above, was that the first defendant had accepted that it was liable to pay the plaintiff for the full amount claimed and would make that payment in the coming days. Accordingly, I refrained from issuing proceedings against the first defendant. On or about 12 December 2018 I received a letter from Holding Redlich on behalf of the First Defendant advising that if proceedings had not already been commenced at that stage, the First Defendant will be seeking to rely upon a time bar.”

The cross-examination of Mr Winburn-Clarke was focused on this area of his affidavit evidence. Under cross examination he was referred to the email correspondence of 27 November 2018 annexed to his affidavit - this was an email to Ms Atkinson of Savino Australia from the lawyers for the plaintiff, SRB Legal. He agreed that the import of that letter was that the plaintiff would institute proceedings. He was referred to the email of 29 November 2018 (annexure G) and agreed it was by Ms Atkinson, for Savino Australia, and he agreed with the contention that no other document was referred to in that correspondence - it was put to him that, in this correspondence, there was no reference to the time bar, and no request to extend the time bar, and he agreed. He was referred to the words “compensation will take a few days to process” and he agreed with the contention that Ms Atkinson did not say in the email that FRS Couriers were paying compensation nor she did say that Savino Australia was paying compensation. It was put to him that Ms Atkinson did not say, in that correspondence, that Savino Australia is paying compensation, and he responded that this was not said, but added that “impliedly she does because it’s a response to my letter of demand”.
It was put that his position, on reading the words in the email, was that he assumed Ms Atkinson was referring to Savino Australia paying compensation and he agreed. It was put to him that he did not check that assumption with Ms Atkinson, and he agreed. It was suggested that he did not check his assumption with any other employee of Savino Australia and he responded that he did not feel the need to. It was put to him that he did not email anyone at Savino Australia to check his assumption was correct and he stated “no. I had it in writing they would pay” .
It was put that in saying the words “compensation will take a few days to process” Ms Atkinson had made no reference to any specific amount of compensation, and Mr Winburn-Clarke agreed this was so. It was further put to him that in saying those words about compensation Ms Atkinson had not stated that this was compensation in terms of the terms and condition of the Bill of Lading, or in the terms and conditions of Savino Australia’s contract, and Mr Winburn-Clarke agreed. It was suggested that the words in the email did not say anything about full compensation being provided to Espresso Company, on those specified terms, and he agreed. However he added that it was his understanding that this was so, because he had confirmation in writing that they were going to pay. He stated he considered the email was an unequivocal agreement to pay. He also agreed that he relied upon the email of Ms Atkinson as being to that effect. It was put to him that he relied on that email as a promise to pay the plaintiff $52,724.02 and he agreed. It was put him that he did not rely on what Ms Atkinson said in the email, but relied on his own assumption as to what she said. He responded that he relied on a course of correspondence which gives context to that email.
Attached to Mr Winburn-Clarke’s affidavit are copies of the email correspondence to which he referred in his affidavit, including the letter of 15 October 2018 addressed to Ms Atkinson indicating that Espresso Company had heard nothing since the letters of 7 and 9 March 2018. The correspondence noted that SRB Legal acted on behalf of Espresso Company, and their insurer, NTI. The correspondence notes that Espresso Company has not heard anything further since 15 March 2018, and queried whether an insurance claim had been lodged, and the current status of such claim, and Savino’s position in respect of liability and quantum. The correspondence of 15 October 2018 sets out the way that quantum of the claim was calculated by Espresso Company, as including the cost of purchase of the coffee grinders, plus freight, plus customs and Sydney delivery related costs, less salvage. Correspondence from SRB Legal of 27 November 2018 refers to letter of 15 November 2018, advising that if there is no substantive response then on Thursday 29 November proceedings will issue. The email of 29 November 2018, annexure G, from Ms Atkinson states “in addition… we have addressed this matter with FRF Couriers, compensation will take a few days to process. We will monitor and keep you updated within the coming days .” A letter of 12 December 2018 from Holding Redlich states that if proceedings have not been commenced, any action is now time-barred by virtue of clause 17 of the conditions of contract.
Documents annexed to the affidavit of Mr Joyce include the tax invoice issued by Savino Australia to Espresso, dated 12/02/18 and the Express Bill of Lading issued by Savino Italy. It contains the terms and conditions of contract, clauses 1 through to 19.
The Express Bill of Lading issued by Savino Italy, states the shipper was Anfim, the consignee Espresso Company, the routing instructions are “for delivery apply to Savino Australia, Mascot”. Conditions of the contract are attached to the express bill of lading - Clauses 1 through to 19. Clauses 6 and 8 provide for limitation of liability; clause 17 refers to a time bar. The contract defines the freight forwarder to include an agent of the carrier who issues the Bill of Lading; consignee is defined as the person entitled to receive the goods from the freight forwarder.
The email of 23 May 2017 from Savino Australia, to Espresso Company, confirmed the credit approval and attached the terms and conditions, and bank details. These documents form general contractual terms between Espresso Company and Savino Australia. In particular it provides for credit terms - the credit terms were for 30 days from invoice date, for freight and local charges, and duty disbursements. The Savino Australia Pty Ltd terms and conditions of contract were attached - clauses 1 through to 42.8. The contract defines various terms including that ‘agent’ is Savino Australia; ‘subcontractor’ as including any other person, firm or agent with whom the agent (being Savino Australia) may arrange for the carriage of any goods the subject of the contract. Clause 2.5 says the terms and conditions of contract are to be read in conjunction with the agent’s consignment note, agreement, airway bills, manifests or other forms as provided by the agent to the customer. If there are any inconsistencies then the terms and conditions prevail. The services are as described on the invoices, consignment note, airway bills, manifests, sales order or any other forms as provided by the agent (Savino Australia) to the customer. The time for payment is set out in the contract clauses. Clause 6 provides that where the carriage called for by this agreement is combined transport, then the agent shall be liable for loss or damage occurring during the carriage to the extent set out below. Clause 9 limits any compensation for damage to US $2.50 per kilo of goods lost/damaged. Clause 10 provides for where the stage of carriage (of damage) is known - clause 10 refers to the operation of international conventions and national law as determinative of the agent’s liability. These contractual terms are further discussed below.
An invoice from Anfim to Espresso Company for supply of the goods is dated 21 December 2017 for an invoice amount of 28,024.85 euro.
A copy of the application for subcontractor to FRF Couriers, dated 24 January 2018, from Dotrans Pty Ltd is annexed to the affidavit of Mr Joyce. A number of the documents are contained in the Survey Report attached to Mr Joyce’s affidavit.
The affidavit of Ms Johnston was filed on behalf of Savino Australia. Ms Johnston is the financial controller of Savino Australia. She states that she has read the affidavit of Mr Joyce in the proceedings and its annexures. She states that Savino Del Bene is a global freight forwarder based in Italy. Savino Australia is a member of the Savino Del Bene group of companies and acts as the agent for, and representative of, Savino Italy in Australia. She states the local business is primarily directed at handling shipments to Australia carried under contracts evidenced by Bills of Lading issued by Savino in Italy. When Savino Australia receive inward shipments, they will usually contact the relevant consignee and offer to arrange carriage of the goods from the wharf or warehouse to the consignee’s premises, which is what happened in the current case. She refers to the credit application between Espresso Company and Savino Australia, and its terms and conditions, and the making of that agreement. She notes email correspondence between the plaintiff’s representatives and Anfim in Italy (the manufacturer of the coffee grinders) related to receiving the inward shipment of the goods in Australia and the transportation of the goods to the plaintiff’s premises. She also attaches the Bill of lading and the terms and conditions applicable to the Bill of lading.
The affidavit of Mr Giannetto , relied upon by the second defendant and cross claimant, FRF Couriers, states that on 30 January 2013, FRF Couriers entered into a contract with Savino Australia to provide cartage services. It is stated that the contract included terms and conditions including an indemnity in clause 3. Clause 5 of the terms of contract is also referred to, that the second defendant/cross claimant shall be entitled to sub contract on any terms the whole or any part of the carriage. The witness also makes reference to other contractual terms.
The terms included that Savino Australia agrees to be bound by the terms and conditions , and agrees that the document is a complete and exclusive agreement between the parties.
Mr Giannetto notes on 24 January 2018, the third/fourth defendant completed an application for subcontractors with the second defendant (FRF Couriers). The affidavit of Mr Giannetto notes that the second defendant appointed the third/fourth defendant to provide carriage from the warehouse of the first defendant, to the plaintiff’s premises. The application/contract between FRF Couriers and Dotrans sets out the requirement for carriers insurance “Part 7 Insurances” and Mr Do/Dotrans elects in the contract to use ‘FRF provided carriers Insurance’ and authorise payments for same.
Mr Giannetto details receiving notice on 7 March 2018 from Savino Australia alleging that FRF Couriers was responsible for loss, and advising of its intent to claim against FRF Couriers. On 15 March FRF Couriers received a letter from Savino Australia advising of its intention to claim against FRF Couriers “it was in your care and custody during transit, we are holding you responsible in our name and on behalf of cargo interests”, demanding payment of the plaintiff’s claim in a specified sum – the letter is annexure E to Mr Giannetto’s affidavit.
Mr Giannetto states on 6 September 2018 he received an email from the Savino Australia requesting a copy of the distribution agreement between Savino Australia and FRF Couriers. On 29 November 2018 he received a letter from Savino Australia demanding payment of Espresso Company’s claim, in a specified amount, and that if payment was not received they will commence legal proceedings to recover that sum (annexure G to affidavit). On 3 December 2018 he provided the contract to Savino Australia and on 4 December 2018 he received an email from Savino Australia requesting a copy of the whole of the contract and he responded to confirm what had been supplied included the terms and agreement. He states that on the 12 February 2019 he received the letter from Espresso Company serving FRF Couriers with the statement of claim. The terms and conditions of the contract between FRF Couriers and Savino Australia are annexed to Mr Giannetto’s affidavit, as are other documents to which he refers.
The contract between FRF Couriers and Savino Australia provides for indemnities and exclusions from liability, particularly clauses 4,5,6, and 8. These clauses are further discussed below.

Contractual positions

Terms of contract between Espresso Company and Savino Italy.

In this matter there was a contract between the plaintiff, Espresso Company, and Savino Italy. This contract was for the shipment of the particular goods subject of the current dispute.
The terms of that contract were detailed and subject of much argument in these proceedings as to whether it is a straight house bill of lading, or a port to port bill of lading. Savino Australia argues that is a house bill of lading, noting:

In the top left, there is a denotation that this is a straight house bill of lading i.e. it goes straight from Anfim to Espresso company, routed via Savino Australia’s warehouse.

In the bottom right of the bill of lading it says

… The goods to be delivered at the above mentioned port of discharge or place of delivery, whichever applicable, subject always to the exceptions, limitations, conditions and liberties set out on the reverse side hereof, which the shipper and/or consignee agrees to accepting this bill of lading. …READ CLAUSE CONCERNING EXTRA FREIGHT AND LIMITATION OF LIABILITY ON THE REVERSE SIDE HEREOF

The plaintiff argues that it is a port to port bill of lading and that the obligations under this contract were discharged when the goods reached the port of Sydney. The plaintiff in detailed written submissions in reply states:

The Bill of Lading
20.   The First Defendant's written submissions deal at length with the law relating to Bills of Lading. However, as was submitted by the Plaintiff (at [19]) of its earlier submissions, in this case there were two distinct stages of carriage:
. a. port-to-port carriage by sea from Genoa, Italy to Sydney, Australia. This stage was the subject of the Bill of Lading at pages 110 and 111 of the Court Book; and
b.   road transport:
i.   from the Sydney port to the First Defendant's warehouse at Mascot, as stated in the Bill of Lading, and
ii.   from the First Defendant's warehouse to the Plaintiff's warehouse.
21.   The road carriage was the subject of the Savino Australia Contract, as described at [4] of the Plaintiffs submissions in chief. That contract is at pages 37 to 39 of the Court Book.
22.   The Court should reject the First Defendant's submission (at [40]) that the Bill of Lading governed all stages of carriage.
23.   Bills of Lading can be "combined bills", which cover both ocean and road carriage, or "port to-port" bills, which cover only the carriage by sea from the loading port (Genoa) to the destination port (Sydney). This distinction is discussed below.
24.   As the contract evidenced by the Bill of Lading ended when the Goods landed at Sydney port
- or, for the reasons discussed below, at the very latest when the Goods landed at the First Defendant's warehouse in Sydney-that contract does not govern the terms of the agreement between the Plaintiff and First Defendant for the road carriage between the First Defendant's warehouse and the Plaintiff's warehouse, being the leg of carriage in which the damage occurred.
The House BIii of Lading In this case was a Port-to-Port Bill
25.   As noted above, Bills of Lading can be "combined bills" which cover both ocean and road carriage, or "port-to-port'' bills which cover only the ocean carriage from the loading port to the destination port.
The submission in chief mistakenly referred to the First Defendant's property as being In Belrose. It is not disputed that it is In fact in Mascot.
26.   The BIii of Lading in this case was a port-to-port bill of lading. It was the contract that governed the carriage by sea of the Goods, and the obligations under it were discharged at the port of discharge, being Sydney.
27.   The House Bill of Lading can be found at page 110 of the Court Book. One third of the way down the page is a series of small boxes showing:
a.   Export Carrier as:   Folegandros 2 7NNEANL-GOA
b.   Port of Loading:   Genoa.IT
c.   Port of Discharge:   Sydney, NS AU
d.   Place of Delivery:   [BLANK]
e.   Place of Receipt:   [BLANK}
28.   In order for the Bill of Lading to be a "combined" bill of lading, the "place of delivery" box would be required to be·completed. It is not completed.
29. In Parlux SpA v M & U Imports Pty Ltd (2008] VSCA 161 (at [48]), the Court considered this point:
"...nevertheless it seems to me that statements and notations of those kinds serve principally to make explicit what is really implicit in the very provision of separate, additional spaces for 'Place of receipt' and 'Place of delivery', namely that unless something is entered in at least one of those spaces, the bill should be understood as a port-to-port bill only."
30.   In Parlux (at [47]), the Court referred to the statement of Carruthers Jin The Resolution Bay (10 Unreported, Supreme Court of NSW, 6 December 1994, BC9403463, 4-5) In which his Honour adopted the comments of Sheller JA in The Antwerpen: 11
"This case emphasises that if carriers wish to ensure that a bill of lading takes effect as a combined transport bill they must Insert a meaningful address fn the 'Place of Acceptance' and/or 'Place of Delivery' boxes on the face of the bill.(11 Glebe Island Terminals Pty ltd v Continental Seagram Pty Ltd (1993) 40 NSWLR 206.)

31.   As the contract evidenced by the Bill of Lading in this case was discharged when the Goods landed at Sydney port, Its terms did not govern the road carriage leg during which the damage occurred .
32.   Even if the Court determines that the Bill of Lading Is a "combined bill", then delivery (and discharge of the contract) in any event occurred at the First Defendant's warehouse.
33.   Clause 12 of the Bill of Lading states (12 Court Book page 111):
12 Delivery of Goods
a)Goods shall be deemed to be delivered when they have been handed over or placed at the disposal of the Consignee or his agent in accordance with this BL or when the Goods have been handed over to any authority or other party to whom, pursuant to the law or regulation applicable at the place of delivery, the Goods must be handed over, or such other place at which the FF Is entitled to call upon the Merchant to take delivery.
34.   Reference to 'placed at the disposal' of the Plaintiff as the Consignee, in the context of a port to-port Bill of Lading, means the port of discharge, being Sydney. But If the Court finds that the Bill of Lading In this case is a combined bill, then the Goods were placed at the disposal of the Plaintiff as Consignee at the First Defendant's warehouse in Mascot.   ·
35.   The Bill of Lading at page 110 of the Court Book (top right hand side) states in the box titled 'Routing Instructions':'For Delivery apply to: Savino Del Bene Australia Pty Ltd, Suite 1, Ground Floor, 247 King Street, Mascot." That required the Consignee (the Plaintiff) to apply to ("call upon") the First Defendant's warehouse premises to take deilvery.
36.   It follows that the Goods were placed at the disposal of the Consignee (the Plaintiff) either at the Sydney port (if the Court accepts the Plaintiff's submissions that it was a "port to port" Bill of Lading) or at the First Defendant's warehouse in Mascot (if the Court determines it was a "combined" Bill of Lading).
37.   In either circumstance, the transport of the Goods by road from the First Defendant's warehouse was performed under the Savino Australia Contract, and not the Bill of Lading.

In support of it’s submission that the Bill of Lading is a straight Bill of Lading, Savino Australia notes the statement on the Bill of Lading on the front (bottom right of the Bill), which refers to the terms and conditions of the Bill applying to the carriage of the goods up to the place of delivery:

… The goods to be delivered at the above mentioned port of discharge or place of delivery, whichever applicable, subject always to the exceptions, limitations, conditions and liberties set out on the reverse side hereof, which the shipper and/or consignee agrees to accepting this bill of lading. …READ CLAUSE CONCERNING EXTRA FREIGHT AND LIMITATION OF LIABILITY ON THE REVERSE SIDE HEREOF

On page 111 is the reverse side. Clause 8(f)(ii) provides that:

8 …ii. Unless the nature and value of the goods shall have been declared by the Merchant and inserted in this BL [Savino Italy issued bill of lading] and the ad volorem freight rate paid, the liability of the carrier, under COGSA [Carriage of Goods by Sea Act] where applicable, shall not exceed US$500 per package…

In relation to the limitation, there were two packages of goods, so the clause would provide a US$1000 limitation.
In relation to the Time bar, the contract states at clause 17:

The FF [freight forwarder / Savino Italy] shall, unless, otherwise expressly agreed, be discharged of all liability under these conditions unless suit is brought within nine months after delivery of the goods, or the date when the goods should have been delivered, or the date when in accordance with clause 6.8(e) failure to deliver the goods would give the consignee the right to treat the goods as lost”.

In relation to the time bar, the issue may be whether there is any “expressly agreed” waiver. The evidence indicates that the proceedings were commenced by the plaintiff after 11 months. There is no evidence of an express waiver of the time bar, however the plaintiff submits the defendants are estopped from relying on the time bar, this is detailed below.
Clause 10 is the Himalaya clause (i.e. the clause protecting subcontractors/carriers). The clause states:

10) Liability of Servants and Other Persons
a)These conditions apply whenever claims relating to the performance of the contract evidenced by this BL [Savino Italy house bill of lading] are made against any servant agent or other person (including any independent contractor) whose services have been used in order to perform the contract whether such claims are founded in contract or tort, and the aggregate liability of the FF [Freight Forwarder /Savino Italy] and of such other servants agents or other persons shall not exceed the limits in clause 8.
b) In entering into this contract as evidenced by this BL [Savino Italy house bill of lading], the FF [Freight Forwarder /Savino Italy], to the extent of these provisions, does not only act on his own behalf, but also as agent or trustee for such persons, and such persons shall to this extent be or be deemed to be parties to the contract.

Clause 16 provides:

“save as otherwise provided herein, the agent shall in no circumstances whatsoever or howsoever arising be liable for direct or indirect or consequential loss or damage. The defences and limits of liability provided for in this agreement shall apply in any action against the agent for loss or damage or delay whether the action be founded in contract or in tort”

It is submitted by the first defendant, Savino Australia, that in any normal freight forwarding contract, the freight forwarder acts as agent for the shipper (in this respect Savino Australia relies on the detailed descriptions in the case Cro Travel PL v Australia Capital Financial PL [2018] NSWCA 153; at paragraphs 29 to 38, which describe house bills of lading and the liability of freight forwarders). It is submitted that that the shipper (Espresso Company) contracts with the carrier on the terms of the bill of lading; with an additional step that Savino Italy acts as agent for the carrier and the shipper. This means both the carrier and the shipper enter into these terms with Savino Italy as their agent.
Clause 6 provides for exemptions from liability:

6) Liability
a) The FF [Freight Forwarder /Savino Italy] shall not be liable for the performance of a transport, his responsibility being involved only in the stipulation with the carrier of the contract of carriage in his own name, and on behalf of the merchant. However, when and if his responsibility is involved, all the provisions herein regulating and limiting the carrier’s liability shall apply to the benefit of the FF.
b) The responsibility of the carrier for the goods under these conditions covers the period from the time the carrier has taken the goods in his charge to the time of their delivery.

It is submitted that the bill is a receipt of 2 packages containing a total of 766.38kgs of coffee grinders. Under the Savino bill of lading term at clause 8(f)(ii), any liability of Savino Italy and all subcontractors (including all defendants in the present matter) is limited in amount to US$1000.
It is further argued that the house bill of lading was an authority for Savino Italy to contract with (or with and on behalf of) the ocean carrier ‘Folegandros 257Nneanl-Goa’, Savino Australia (to use its warehouse), FRF and Dotrans. Although each entity may have other contracts between themselves, they each take subject to the terms on the bill, unless the person with title to the goods (Espresso Company or Anfim) contracts with any of these other parties individually in relation to the relevant consignment, in which case the individual contract will usually apply.
Savino Australia submits that the straight house bill of lading contained the terms and conditions that governed the shipment from Anfim’s premises (Milan) to Espresso’s premises (Belrose).
It is submitted by Savino Australia, that –
A house bill of lading is a receipt for the goods by the freight forwarder i.e. the issuer of the house bill of lading is the freight forwarder.
A house bill of lading is an authority from the shipper, entitling the freight forwarder (as agent for the shipper) to enter into a contract of carriage (in the shipper’s name) with the carrier/s on the terms set out in the authority. In other words, a house bill of lading sets out the terms and conditions upon which the freight forwarder will arrange transport of the goods, but also the terms and conditions the shipper (via its freight forwarder agent) will contract with carriers to actually take the goods. It is the basis upon which each of them agree to take the goods. It is submitted that this is the reason why Himalaya clauses exist i.e. because the terms of bill extend to everyone in the chain of carriers/bailees/sub-bailees/etc.
It is submitted that the Pioneer Container [1994] 2 AC 324 case goes further, because it allows reliance by a bailee or carrier on the Himalaya clause in a bill of lading (and thus also the protective clauses within the bill of lading), and also on any protective clauses in intermediate contracts (such as a contract between a bailee or sub-bailee). This may create a situation where more than one set of limitation clauses that exist. It is submitted that the Pioneer Container resolved that issue by stating that the person sued may decide what protection to rely upon: i.e. where this reasoning creates “two alternate regimes which the sub-bailee may invoke… the sub-bailee should be entitled to choose to rely upon one or other of them as against the owner of the goods” (at page 344; see also page 346). It is submitted that Savino Australia can avail itself of the protections in the Savino Australia terms and conditions and also of the Savino Italy bill of lading terms.
The plaintiff submits that if the Bill of Lading is the applicable contract, then the Hague Visby rules apply (detailed submissions on this point were made in the written submissions in reply and both parties made oral submissions on 15 May 2020 which have been fully considered by me). Savino Australia argues that the Hague Visby Rules cease to have effect “at the ships rail” that is, once the goods are unloaded from the ship. It is an agreed fact that the goods were damaged while being delivered from Mascot to Belrose.
The plaintiff also submits that the first defendant cannot rely on the contractual clauses excluding liability, because the first defendant was reckless so that the plaintiff’s goods were damaged.
There is an issue as to Savino Australia’s status in this contractual agreement. The evidence indicates that Savino Australia contacted its Italian office to arrange delivery of the goods. The parties have made submissions as to Savino Australia’s status as principal, or agent for Savino Italy, in this contract.
I also note that this contract states it is governed by the law of Italy, clause 19 states “Jurisdiction and applicable law” and that “Actions against the FF [freight forwarder – Savino Italy] may be instituted only in Florence, Italy, and be decided according to the law of this country”. I was not addressed on the effect of this clause on current proceedings. I note that the plaintiff proceeds against Savino Australia, a wholly owned subsidiary of the global company, and has not proceeded against Savino Italy. Given the findings I have made overall in this matter, I do not need to determine any issue arising from this clause.

The Savino Australia – Espresso contractual terms

There was a contract between the first defendant, Savino Australia, and the plaintiff. It is argued by Savino Australia that this was in the nature of an umbrella agreement between the parties. Espresso Company submits that this is the contract which applies to the shipment of these goods. Savino Australia submits that even if this is the applicable contract, it’s terms would also operate to limit liability for damage to the goods during carriage.
That a contract was entered into between the parties is clearly evidenced. What is also clear is that the contract predates any purchase of the particular goods from Anfim, and predates the particular decision/agreement to ship those goods to Australia. However because it is a contract between the parties, and directly between Savino Australia and Espresso Company, it is important to closely examine its terms.
On page 35 of the larger court book (exhibit 1), is an e-mail from Savino Australia to Espresso Company dated 23 May 2017 (about 18 months before the delivery in issue). Attached to the e-mail are the terms of credit (page 36 exhibit 1/large court book) and general terms and conditions (pages 37-39) that form an agreement between the two parties.
Espresso Company says that this is the relevant contract. Savino Australia says that even if this is true, their claim is time barred and even if it was not time barred (which is denied) their claim is limited under the Savino Australia contract to AUD$2,700. Savino Australia’s position was detailed in written submissions as follows:
Savino Australia’s primary position is that the straight house bill of lading is evidence of the contract between each subcontractor and the shipper. It is submitted that Savino Australia’s terms are similar in effect to Savino Italy’s terms, the key terms being as follows.
Savino Australia submits that the idea of the umbrella agreement, which is common in shipping, is that each individual shipment can be organised over the phone or by e-mail without needing to ensure that all the terms are sent across and agreed every time.
Clause 2 (especially 2.1 and 2.5) sets out the umbrella nature of the agreement. In effect, the 23 May 2017 e-mail that contained the terms is set up as an offer, the acceptance of which is the placement of each delivery order.

2.1 Any instructions received by the Agent [Savino Australia] from the Customer for the supply of Services shall constitute acceptance of the terms and conditions contained herein.

It is submitted that limitation of liability (i.e. the payment of compensation) is set out in Clause 9:

9.3 Except as provided in clause 14, compensation shall in no circumstances whatsoever and howsoever arising exceed US $2.50 per kilo of the gross weight of the goods lost or damaged.

According to the straight house bill of lading 766.38kg was the shipment weight. 766.38 x $2.50 = $1915.95 USD (aprox. $2,700 AUD).
Clause 11 provides for the same 9 month time bar as the Savino Italy bill terms:

Subject to any provision of clause 16 to the contrary the Agent shall be discharged of all liability under this Agreement unless suit is brought and notice thereof given to the Agent [Savino Australia] within nine months after delivery of the Goods or the date when the Goods should have been delivered.

Clause 23 is the Himalaya clause (i.e. the clause that protects each subcontractor). It is submitted that this clause also evidences the authorisation of the owner of the goods to sub-bail.

23 Nomination of sub-contractor
The customer hereby authorises the Agent [Savino Australia] (if it should think it fit to do so) to arrange with a Sub-contractor for the carriage of any Goods the subject of the contract. Any such arrangement shall be deemed to be ratified by the Customer upon delivery of the said Goods to such Sub-contractor, who shall thereupon be entitled to the full benefit of these terms and conditions to the same extent as the Agent. In so far as it may be necessary to ensure that such Sub-Contractor shall be so entitled the Agent shall be deemed to enter into this contract for its own benefit and also as Agent for the Sub-Contractor.

The first defendant submits that clause 16 conforms with the common law position (that was set out in Cro Travel) as to the liability of the freight forwarder:

16 Scope of Application
16.1 Save as otherwise provided herein, the Agent [Savino Australia] shall in no circumstances whatsoever or howsoever arising be liable for direct or indirect or consequential loss or damage. The Defences and limits of liability provided for in this Agreement shall apply in any action against the Agent for the loss or damage or delay whether the action be founded in Contract or Tort.

Savino Australia observes in written submissions, that by way of counter argument Espresso Company says (at paragraph 19 of its submissions) that Clause 6.1 of the contract “expressly contemplates… [Savino Australia] may be liable for loss and damage occurring during such [road] carriage”. It is submitted that what clause 6.1 does is say that the liability of Savino Australia is limited pursuant to the other clauses (eg clauses 16,23). Clause 6.1 says:

6.1 Where the carriage called for by the Agreement is combined transport then, save as is otherwise provided in this agreement, the Agent shall be liable for loss and damage occurring during carriage to the extent set out below.

I note that clause 6.1 does say that: “save as provided elsewhere in this agreement Savino Australia shall be liable for loss or damage occurring during carriage to the extent set out below” (ie in the terms of the agreement below 6.1). It is clear from the wording that clause 6.1 is to be construed in terms of the agreement as a whole, and subject to the clauses which follow clause 6.
The first defendant also submits, in response to the plaintiff’s submission - (at paragraph 20 of its submissions) that the limitation in cl 9.3 only arises where the stage of loss is unknown – that clause 9 is not limited in that way according to its own text – it says “compensation shall in no circumstances whatsoever and howsoever arising exceed US $2.50 per kilo”: these are the widest possible words of application. Further, to the extent any other part of the contract has that effect, that has not been argued. In any event, it is submitted that the alleged limitation to the effect of clause 9 does not affect the other limitation clauses, being clauses 11 and 16 .
I observe that clause 9(3) also includes the words “Except as provided in clause 14…” and clause 14 refers to an agreement between the parties stating the value of the goods and extra freight paid. It is not argued by the parties that clause 14 has any effect on the operation of clause 9 in the current proceedings.
The plaintiff in submissions makes clear that it’s position is that Savino Australia is liable for breach of implied terms in the contract between Savino Australia and Espresso Company (entered into in May 2017). The plaintiff submits:

The Plaintiff pleads (at [5] of its amended statement of claim filed on 17 May 2019) that they were implied terms of its contract with the First Defendant that the First Defendant, by itself, its servants or agents, would:
exercise all reasonable skill, care and diligence in and when providing its Carriage Services (as defined in the statement of claim), and
that it would ensure that the Goods would be delivered to the Plaintiff in a saleable condition.
The First Defendant denies that those terms are implied in the contract.
The Court should find that the contract contained the implied terms pleaded by the Plaintiff in its statement of claim. In Carter on Contract (Lexis Nexis), Professor Carter writes that, provided the implication is not shown to be unjust or unreasonable, a term may be implied at common law if it is: (a) an established and normal incident of the contract; or (b) a necessary term, in the sense that, unless the term is implied, the enjoyment of rights conferred by the contract would be rendered nugatory or worthless or seriously undermined. Established incidents of implied terms in commonly occurring contracts include:
in contracts for the provision of services, that the service provider will exercise proper or reasonable care or skill in the discharge of its duties under the contract; and

in bailment contracts, that the bailee will exercise reasonable care in relation to the goods, and not convert them.
Here, the implied terms are consistent with the terms of the Savino Australia Contract. Indeed, clause 6.1 expressly contemplates that where the carriage called for by the contract is for Combined Transport – in this case, port-to-port shipment from Genoa to Sydney, and then road transport from the port to the First Defendant’s warehouse at Belrose, as stated in the Bill of Lading, and then road transport from the First Defendant’s property to the Plaintiff’s property – then the First Defendant may be liable for loss and damage occurring during such carriage.
The contract goes on to deal with loss and damage that occurs in two scenarios: the first is where the stage of carriage in which the damage occurs is not known; the second is where (as in this case) the state of carriage is known. In that context, the First Defendant’s reliance on clause 9.3 of the contract to limit its liability is, with respect, misplaced. That limitation only arises where the stage of the carriage in which the loss occurred was unknown.
The First Defendant admits in its defence (at [17]) that it had “possession or control of the Goods while the Goods were at [its] warehouse on 1 March 2018 whilst the truck was being loaded to carry the Goods” to the Plaintiff’s warehouse. Ms Rea, on behalf of the First Defendant, contended that “the truck driver did not follow basic rules to secure the cargo.” However, it was the First Defendant’s obligation to exercise reasonable care, skill and diligence by taking steps to ensure the Goods were properly secured on the truck at a time when the Goods were, by its own admission, under its control. Further, the First Defendant had an obligation to instruct the truck driver as to the fragile nature of the goods, the handling requirements and the standard of care to be taken in transporting the goods, each of which it plainly failed to do in circumstances where the Goods were not properly secured, such that the Goods were delivered to the Plaintiff in their damaged condition.
The Court should be satisfied that the First Defendant breached the implied terms of the Savino Australia Contract, as a result of which the Plaintiff suffered the loss and damage claimed by it.

Savino Australia denies any such implied terms and submits that the clear words of the contract should be given meaning. Savino Australia submits:

The plaintiff pleaded implied terms. These, in effect, are a pleading that sets up a claim for contractual negligence: paragraph 5(a) says the first defendant owes a duty of care when ‘providing the Carriage Services’ and 5(b) says the first defendant guaranteed all goods would be delivered in a saleable condition. It must fail because:
of its failure to comply with the Civil Liability Act
on the principles of implied terms in contract law.
Implied terms must comply with the strict test set out by the majority of the Privy Council (hearing an appeal from the Supreme Court of Victoria) in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283
Their Lordships do not think it necessary to review exhaustively the authorities on the implication of a term in a contract which the parties have not thought fit to express. In their view, for a term to be implied, the following conditions (which may overlap) must be satisfied: (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that “it goes without saying”; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract.

At paragraphs 55 to 56 of written submissions, the first defendant sets out further arguments. In summary those are to the effect that it is not reasonable to imply a term that a freight forwarder will ensure and guarantee the safety of transported goods. (If a customer wants shipping insurance from a freight forwarder, they can arrange to buy that cover separately.) Further it is submitted that the contract is effective without the implied term because, this is not a contract of insurance, and almost all the cargo travels around the world on similar terms. It is argued that the term is not obvious, and it contradicts the express terms. The findings as to any implied terms are set out below.

The contract between FRF Couriers and Savino Australia

There was a contract between Savino Australia and FRF Couriers, for carriage. This contract is dated 30 January 2013 and states - “Customer application for credit and carriage of goods.” It contains the terms and conditions of contract, clauses 1 through to 13.
Clause 6 provides:

6. Every exemption, limitation, condition… right, exemption from liability, defence and immunity… applicable to the carrier or to which the carrier is entitled to hereunder, shall also be available and extend to protect (a) all subcontractors; (b) every servant or agent of the carrier or of a subcontractor (c) every other person (other than the carrier) by whom the carriage or any part of the carriage is performed or undertaken; (d) all persons who are or maybe vicariously liable for the acts or omissions of any persons falling within subclauses (a)(b)(c) of this clause and for the purposes of this clause the carrier is or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all such persons and each of them shall to this extent be or be deemed to be parties to this contract”.

Clause 8 notes that the carrier is authorised to deliver the goods at the address given to the carrier by the consignor for that purpose. The consignor is defined in the contract to be the person with whom the contract is made, that is Savino Australia. At clause 3 the contract states:

“3. The consignor undertakes to indemnify the carrier in respect of any liability whatsoever and howsoever arising (including without limiting the foregoing from negligence or breach of contract or wilful act or default of the carrier or others) to any person (other than the consignor) who claims to have, who has or may hereafter have any interest in the goods or any part of the goods”.

Clause 4 provides that subject only to clause 13:

4.… the goods are at the risk of the consignor and not the carrier, and the carrier shall not be responsible in tort or contract or bailment or otherwise for any, and the consequences of any, loss of or damage to or deterioration of goods or misdelivery or failure to deliver or delay in delivery of goods…… for any reason whatsoever (including without limiting the foregoing the negligence or breach of contract or wilful act or default of the carrier or others) and this clause shall apply to all, and the consequences of all, such loss of or damage to or deterioration of the goods or misdelivery or failure to deliver or delay in the delivery of goods beforementioned whether or not the same occurs in the course of performance by or on behalf of the carrier of the contract and/or the Consignoror in events which are foreseeable by them or eith of them or in events which could consititute a fundamental breach of the contract or a breach of a fundamental term of the contract.”

Clause 5 provides the carrier and any subcontractor shall be entitled to sub contract on any terms the whole or any part of the carriage.
Clause 5(b)(i) provides:

5(b) “The consignor undertakes: (i) that no claim or allegation shall be made, whether by the consignor or any other person who is or who may hereafter be interested in the goods against any person (other than the carrier) by whom (whether it is a subcontractor, principal, employer, servant, agent, or otherwise) the carriage or any part of the carriage is performed… which imposes or attempts to impose upon such person any liability whatsoever and howsoever arising (including without limiting the foregoing from negligence or breach of contract or wilful act or default of the carrier or others) in connection with the goods and if any such claim or allegation should nevertheless be made to indemnify the carrier and the person against whom such claim or allegation is made against the consequences of it. [The clause continues that for the purposes of this clause the the carrier is taken to be acting as agent or trustees for others who have the benefit of this clause; and that those others are deemed to be parties to the contract]

Clause 5 (b)(ii) goes on to say that the consignor undertakes to indemnify the carrier against any claim or allegation made against it by any person in connection with any loss or damage to the goods occurring at any time during the carriage. The contract defines FRF Couriers as the carrier.
The plaintiff does not make any claim against FRF Couriers in relation to contract. It is the case that there was no separate contract between Espresso Company and FRF Couriers. The plaintiff’s claims against FRF Couriers are in bailment and negligence. However if the plaintiff succeeds in those claims then FRF Couriers rely on an indemnity clause in their contract with Savino Australia. This is set out in the cross-claim.
FRF Couriers submit:

FRF primarily relies on the indemnity stipulated by clause 3 of the FRF contract. The other grounds pleaded in the cross claim are not abandoned but are only relied upon to the extent necessary. If, in the event FRF has a liability to the plaintiff, the Court finds that FRF is entitled, pursuant to clause 3, to be indemnified in respect of that liability to the plaintiff then the other grounds need not be considered.
To the extent there is there is a claim for indemnity and/or contribution in the event SDBA and FRF are both tortfeasors, that is pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act 1946, as pleaded in paragraph [10] of the cross claim.
With reference to paragraph [9] of SDBA’s submissions dated 6 March 2020, FRF does not seek to prosecute a case that SDBA was negligent, however, such a case is pressed by the plaintiff. If the Court finds that the plaintiff has established that both SDBA and FRF are tortfeasors then the issue of indemnity and/or contribution pursuant to s 5 arises.

The contract between FRF Couriers and Dotrans (and/or Mr Do)

There was a sub-contract between FRF Couriers and Dotrans (and/or Mr Do) – this is evidenced by the application for subcontract from Dotrans Pty Ltd, to FRF Couriers, dated 24 January 2018. By this sub-contract Mr Do/Dotrans was to perform the carriage on behalf of FRF Couriers. An issue for determination is whether the indemnity in the contract between FRF Couriers and Savino Australia also operates to indemnify Dotrans (and/or Mr Do) as subcontractor performing the carriage. The plaintiff’s claims against the third and fourth defendant are in bailment and negligence. Another issue is whether the Himalaya clause operates to limit the liability of Dotrans/Mr Do.

Issues of negligence/recklessness

The plaintiff argues that there is no limitation of liability under the trading terms (in the Savino Australia/ Espresso Company contract of 2017) as the First Defendant acted recklessly; and submits:

The First Defendant submits (at [41] and [46]) that if its trading terms apply, then its liability is limited to approximately AU$2,700.00.
In its Reply, (Pleadings folder page 67 at [12.2]) the Plaintiff contends the limitation clause now relied upon by the First Defendant Is not available to it because it acted recklessly. That is so because clause 11.2 of the First Defendant's trading term s1 (Court Book page 37) provides:
"The Agent shall not be entitled to the benefit of the limitation of liability provided for in clause 9 if it ls proved that the loss or damage resulted from an act or omission of the Agent done with intent to cause damage or recklessly and with knowledge that damage would probably result.
The photographs taken from the CCTV footage at the First Defendant's warehouse (at pages 66 to 68 of the Court Book) show that the cartons were marked fragile, a matter that is not in dispute.
Ms Rea, on behalf of the First Defendant, contended that "the truck driver did not follow basic rules to secure the cargo." (Court Book page 5, first paragraph of the email) However, as previously submitted by the Plainti ff, 17 (At [21] of Its earlier submissions) it was the First Defendant's obligation to exercise reasonable care, skill and diligence by taking steps to ensure the Goods were properly secured on the truck at a time when the Goods were, by its own admission, under Its control. Further, the First Defendant had an obligation to instruct the truck driver as to the fragile nature of the Goods, the handling requirements and the standard of care to be taken in transporting the Goods, each of which it plainly failed to do In circumstances where the Goods were not properly secured and were damaged. The First Defendant's submission at [66] - "how anyone but a blind man could miss the warning labels is a mystery" - is not a sufficient explanation for the First Defendant's failings.
In Sellers Fabrics Pty Limited v Hapag-Lloyd Ag [1998] NSWSC 646, the Supreme Court considered whether conduct was performed "recklessly and with knowledge that damage would result", and determined that recklessness goes beyond mere carelessness. The Court also held that was is open to a court to make an inference as to the requisite knowledge.
In Goldman v Thai Airways Limited [1983} 1 WLR 1186, the court determined that the defendant's employees acted recklessly (at page 1293):
"The Inference is fairly open, as we have already held, that such servants or agents, including Mr Johnson and perhaps others, observed the marks on the cargo which indicated that it be stored in a dry environment, observed the poor state of the plastic wrapping later reported In Tokyo, observed that it was raining, and that a typical Sydney summer thunderstorm was likely, and left the cargo in the open without taking the steps that they knew would be essential to protect that cargo if it should rain heavily. On that basis such servants and agents must also have known that such 'deplorably bad handling' of the cargo would probably result in damage to the cargo."
So here, it Is open to the Court to find, as the Plaintiff has submitted, that the First Defendant failed to take steps to ensure the Goods were properly secured on the truck at a time when the Goods were, by its own admission, under its control. Further, the First Defendant had·an obligation to instruct the truck driver as to the fragile nature of the Goods, the handling requirements and the standard of care to be taken in transporting the Goods, each of which it plainly failed to do In circumstances where the Goods were not properly secured, such that the Goods were delivered to the Plaintiff in their damaged condition.
The Court should be satisfied that the First Defendant was reckless, and that clause 11.2 denies it of the benefit of the limitation of liability contained in the Savino Australia Contract.

Savino Australia submits that the claim is one of negligence which is pleaded as contract and bailment, and as such, the Civil Liability Act 2002 (NSW) applies, per s5A. At paragraphs 59 to 62 of written submissions the first defendant sets out relevant legal authorities, and submits that for the plaintiff to pursue any claim against the first defendant in negligence (whether directly, through contract or bailment), it must say (1) what risk of harm a freight forwarder (by either organising freight or temporarily warehousing it at a waypoint) should protect against – this must be pleaded, but it is not pleaded, (2) then it must be stated what precise precautions should have been taken – which was not pleaded, (3) then the first defendant has an opportunity to put on evidence and a defence to say why that is not a risk it should protect against or the said precautions are not reasonable or were in fact taken. It is submitted that the evil of the present pleading is there is no pleading as to what first defendant is alleged to have actually done wrong. (4) Finally, the scope of liability must be pleaded, and it must be pleaded why it is appropriate that liability extend to the first defendant so there is an opportunity to respond. It is submitted that this was not done at the pleadings or submissions stage. Therefore, it is argued, that neither contractual nor bailment negligence have been pleaded in line with the Act. It is also submitted that in any event recklessness is not made out on the evidence in this matter. At the oral submissions hearing of 15 May 2020 further submissions on this point were made by Savino Australia. The authorities relied upon, on the issue of recklessness, included Goldman v Thai Airways International Ltd [1983] 1 WLR 1186.
Espresso Company submits in reply:

The First Defendant well understood the case it had to meet
The First Defendant appears to submit (at [62]) that the Plaintiff's contractual and bailment claims are not maintainable because of alleged deficiencies in the pleadings which are said not to satisfy the provisions of the Civil Liability Act 2002 (NSW).
If such a complaint was to be made by the First Defendant, it should have done so long before the making of its closing submissions.
In Nepean Blue Mountains Local Health District v Starkey [2016] NSWCA 114, McColl JA commented (at [38]):
“The LHD [the defendant] did not move to strike out the Statement of Claim, nor did it suggest to the primary Judge that it was unaware of the nature or details of the claim being made against It. Accordingly, this Court is entitled to assume that the LHD understood the case being made against it. This conclusion is reinforced by the fact that, at trial, counsel for the plaintiff did not open her case in any detail and counsel for the defendant (who did not appear on the appeal) did not protest the absence of such an opening."
Here, the First Defendant did not seek to strike out the claim. No submissions were made on behalf of the First Defendant that it did not understand the case being made against it. The Court may assume that it well understood the case being made against it, and should reject the First Defendant's submissions.

Bailment

The plaintiff also claims that each defendant is liable to the plaintiff under the law of bailment. The plaintiff characterises each of the defendants as bailees or sub-bailees/quai-bailees, and asserts breaches of the duty of bailment. Complex and detailed legal submissions were made by the plaintiff and the first and second defendants on these issues. All of those written legal submissions, and the detailed oral submissions made at the submissions hearing on 15 May 2020, have been considered by me and reference may be had to the transcript of proceedings and the written submissions on the court file. I will not summarise those submissions in these Reasons for decision but have carefully considered same. My findings on the bailment issues will be detailed below.

Findings of fact

Issue 1 – which is the governing contact?

The parties arguments as to which is the applicable contract are set out above and have been carefully considered. In relation to the transport of the goods to Espresso’s premises, the governing contract must be the contract which governs the transport of the particular goods. A related issue is the terms of the contract – whether it covered carriage of the goods between Mascot and Belrose.
I find that the contract between Savino Australia and Espresso (of May 2017) was an umbrella agreement which would apply to various subsequent shipments/transport of goods. It provided for credit payment terms in respect of freight and port fees etc (30 day payment terms). It was a relevant agreement between the parties.
It is worth observing that Savino Australia is acknowledged to be a wholly owned subsidiary of the global company. The evidence also indicates that Savino Australia contacted its “Italian agent” to arrange carriage.

Is there an account stated?

This is a case where the plaintiff asserts an amount in damages, being damage to goods, and the alleged damages claim was investigated in a survey report by NTI, the plaintiff’s insurer.
The plaintiff submits that there is an account stated, submitting that the debt was admitted. The plaintiff submits:

Account stated
In Court Forms, Precedents & Pleadings NSW (Butterworths), the authors make the following comments about an action on an account stated:
“An action upon accounts stated lies when a defendant absolutely acknowledges to a plaintiff that a debt of a certain sum is due and payable by the defendant to the plaintiff.
An account stated may arise in two ways. First, the plaintiff and the defendant may, through their dealings with each other, have claims against each other. In such a case it is open to the parties to agree to set their accounts off against each other leaving one party to pay the balance to the other. An arrangement of that type is in the nature of a compromise in which the mutual promises to go through the set-off process and abide by the result constitute a fresh consideration. Accordingly, the result of the set-off process is binding on the parties: see Precedent 380.80 — Claim on account stated where the plaintiff and the defendant have agreed to set off their demands against each other.
In the absence of such an arrangement, an acknowledgment by a defendant that a sum is owing to the plaintiff will amount to a promise not supported by consideration. In this second type of account stated, the acknowledgment is not regarded as absolutely binding but is regarded as sufficient to support an action for accounts stated in which the acknowledgment is treated as prima facie evidence of indebtedness. It is open to a defendant in such a case to contest the account stated. The defendant could assert, for example, that the account was stated in respect of a debt void for illegality or one for which the consideration had failed. However, it seems that where the relevant debt arises under a contract which is merely unenforceable due to a failure to comply with a formal statutory requirement, such as a Statute of Frauds provision, an account stated will lie in respect of such debt. This second type of account stated is often pleaded as an alternative count to an action founded on a contract.”

The current state of the law in respect of a claim for money due on an account stated was the subject of consideration by the NSW Supreme Court in Webster v Strang [2018] NSWSC 495. In that decision, Kunc J made the following observations (at [245] to [246]) in respect of that form of an action for money due on an account stated where an admission is so framed as to be merely an acknowledgement of indebtedness, in which case although it supplies evidence of the debt, that evidence may be rebutted by proof that no debt in fact existed:
“In the case of this form of account stated, the first requirement is the existence of an admission or acknowledgement by A to B that A owes a certain amount of money to B. The specific question which arose for determination in Lewis v Wilson was whether that admission needed to be absolute and unqualified. It was in that context that Sperling J reviewed the authorities and held that a “bare” admission was sufficient, even if qualified by a condition or reservation, provided that it was an admission or acknowledgement of a sum certain (at 232). The consequence of the existence of a “mere admission of liability” is to give rise to a cause of action in B against A for the admitted amount: Drury v Dulhunty (1921) 21 SR (NSW) 514 at 520 per Ferguson J. Here, the Acknowledgement plainly satisfies the requirements of an acknowledgement of indebtedness for a sum certain.
Secondly, once B has established that an admission or acknowledgement has been made, the burden of proof is then cast upon A to rebut the facts on which the admission is predicated: see Lewis v Wilson at 233; see also Burmester v Hogarth (1843) 11 M & W 97 at 101; 152 ER 730, per Parke B; Camillo Tank Steamship Co Ltd v Alexandria Engineering Works (1921) 38 TLR 134 at 141, per Viscount Finlay, 143, per Viscount Cave; Lockyer v Macready [1965] NSWR 801 at 805 per Brereton J; (1965) 66 SR (NSW) 369. It follows from my factual findings that the Acknowledgement has not been rebutted by proof that no debt in fact existed. Accordingly, I find that the defendants’ claim in debt on an account stated succeeds.”

The first defendant submits:

Account stated
Again, it is important to start with the amended statement of claim. Paragraph 13 says
On or about 2 March 2018 and 29 November 2018 admissions were made by the First Defendant to the effect that it:
Is liable for the loss that is claimed by the Plaintiff at paragraph 23 below;
Acknowledged its indebtedness to the Plaintiff; and
Would pay the account stated between the Plaintiff and the First Defendant.

The first point is that this is a very narrow claim. The ‘admission’ must be in either the 2 March 2018 e-mail or the 29 November 2018 e-mail.
Before embarking on an analysis of the e-mails, it is important to state the law.
The law is well summarised in Bullen & Leake, Precedents of Pleadings, 13th ed (1990) at 7,
“For the claim to an account stated to lie there must be an absolute acknowledgment (or admission) made by the defendant (or his agent) to the plaintiff (or his agent) of a debt (or a sum) due from the defendant to the plaintiff and payable at the time of action brought”

The issue is that the admission would have to be from 1) Savino Australia, to 2) Espresso Company, 3) for precisely $52,274.12 (i.e. the Amended Statement of Claim amount) i.e. the absolute acknowledgement (or what is sometimes referred to the specific acknowledgment of the amount of indebtedness), 4) which was due to the plaintiff at the time the action was brought. (The plaintiff does not appear to dispute that these are the elements.)
Items 1 and 2 are made out (i.e. a communication went from Savino Australia to Espresso Company). Items 3 and 4 are not made out (i.e. there is no admission).
Two statements are said to give rise to an account stated. The first is in an e-mail from a business development manager of Savino Australia, Ms Daniele Rea, who says in an e-mail dated 2 March 2018
I am so sorry… this is not the service that we’ve been providing to your organisation… Nick the insurance will be involved in the matter, we’ll send you shortly a letter you will need to lodge a formal intent to claim.

There is no acknowledgement of any specified sum, and no acknowledgment of the liability being due and payable by Savino (ever). In fact, it is really just an apology and an invitation to make a claim that will be assessed by Nick from the insurance company.
In any event, an apology (though not itself inadmissible) cannot be used to prove liability: Civil Liability Act s 69
(1) An apology made by or on behalf of a person in connection with any matter alleged to have been caused by the person:
(a) does not constitute an express or implied admission of fault or liability by the person in connection with that matter, and
(b) is not relevant to the determination of fault or liability in connection with that matter.
(2) Evidence of an apology made by or on behalf of a person in connection with any matter alleged to have been caused by the person is not admissible in any civil proceedings as evidence of the fault or liability of the person in connection with that matter.

The second statement is from Rhonda Atkinson, a client services person from Savino Australia, who said by e-mail on 29 November 2018,
In addition to my response yesterday we have addressed this matter with FRF Couriers, compensation will take a few days to process. We will monitor and keep you updated within the coming days.

Again, there is no admission that a specified sum is due (whether ‘compensation’ is a reference to the amount claimed in letters of demand, the ~USD$1900 in Cl 9.3 of the Savino Australia contract, the US $1000 in the Savino Italy contract or something else is entirely unclear). There is also no admission as to a due date for payment.
In fact, what this e-mail is, is a confirmation that Savino blamed FRF, were ‘addressing’ the matter with them i.e. were chasing FRF to pay compensation, and were promising their customer to update them once that enquiry progressed. This is confirmed by the letter of demand that Savino sent to FRF on 29 November 20181 demanding payment within 7 days.

In reply the plaintiff submits:

Account stated
61. The First Defendant's written submissions (at [78]), relying on the 13th edition (1990) of Bullen & Leake's Precedents of Pleadings, suggest that the Australian law of an account stated requires an absolute acknowledgement by the First Defendant that a ebt in the precise amount $52,274.12 was due. The Court should reject that submission.
62. In Webster v Strong [2018] NSWSC 495, cited by the Plaintiff in its earlier submissions, the court stated (at [243]):
"In essence, the parties agree that the decision of Lewis v Wilson remains an accurate statement of the law to be applied in this area (see especially at 229-230).

63. In Lewis v Wilson (1997) 42 NSWLR 228, at pages 231C-232E, the Court considered earlier authorities on what constituted an acknowledgment under Australian law and discussed the content of the 13th edition (1990) of Bullen & Leake21 on which the First Defendant relies:
"In Taylor v Nicholls {1876) 1 CPD 242, the statement 11 will call at your office in the early port of next week, ...and hope to make some satisfactory arrangement for the payment of Mr Taylor's claim' was held to be a sufficient admission to support an account stated.
"In Wheaton v Macgeorge (1876) 10 SALR 29, the defendant's statement 1 hove not a cheque with me, or I would pay you at once' was enough to constitute on account stated. There was nothing about the admission having to be absolute.
'The word 'absolute' or its equivalent is not to be found in the Australian authorities on the topic.

I return to the passage from Bullen & Leake & Jacob's, Precedents of Pleadings, to which I referred. As I have shown, of the two decisions cited by the authors as support for the stated requirements of the cause of action, Hughes v Thorpe does not mention that the admission must be absolute and Day v William Hill (Park Lane) Ld [1949] 1 KB 632 merely picks up substantially the same formulation from an earlier edition of the same work.
I conclude that the distinction between an absolute admission or acknowledgment of a debt and a bare admission or acknowledgment of a debt is one without a difference. It seems to me that all that has been intended by those Judges who have used the expression or any similar expression is that there must be an admission or acknowledgment of a debt for a sum certain. Otherwise, there could be no basis for a judgment on the cause of action requiring the defendant to pay a specified amount.
"It further appears from the authorities - as one would expect - that the certainty of the sum admitted may be established by the express terms of the admission or by other evidentiary material such as a bill that has been sent which is expressly or impliedly referred to in the admission. But, however the certainty of the amount admitted to be owing is to be established, it must be established by the admission one way or another.
64.   The chain of correspondence identified by the Plaintiff (at [12] of its earlier written submissions) evidences an admission or acknowledgement by the First Defendant of the specific amount of $52,274.00 that was expressly stated in the correspondence from SRB Legal dated 15 October 2018. The chain concludes with the correspondence of 29 November 2018 from Ms Atkinson, an employee of the First Defendant, stating that: "..we have addressed this matter with [the Second Defendant], compensation will take a few days to process." The reference to "this matter'' is plainly the subject matter of the SRB Legal letter of 15 October 2018.
65.   The Court should be satisfied, on the basis of that chain of correspondence, that the parties were only ever referring to the full amount claimed by the Plaintiff, and that the First Defendant acknowledged its indebtedness for that full amount.
66.   Such a finding is further supported by the evidence that the First Defendant sought to recover from the Second Defendant the value of the Goods, the freight charges, the custom charges and the disposal fees.

I note the plaintiff’s reliance upon the decision of Webster v Strang; Steiner v Strang [2018] NSWSC 495 (“Webster v Strang”), as well as statements by the learned authors of the texts cited. The decision in Webster v Strang involved a dispute over an estate, between children of the deceased, with a history of complex prior litigation. The particular issue was whether there was an account stated in the context of a loan and acknowledgment of debt/obligation to repay. However, general observations were made and it is relevant to extract the summation of the law, as stated by Kunc J in Webster v Strang, at paragraphs 233-246:

Debt on an account stated
Defendants’ submissions
The defendants submitted that the decision of Sperling J in Lewis v Wilson is an accurate statement of the law in this area. In Lewis v Wilson, Sperling J held that a bare admission of a sum certain may be sufficient to found a cause of action; the ultimate question, however, is whether the debt is truly owing.
The defendants refer to Sperling J’s statement at 229-230 that there are two distinct forms of an action for money found to be due on an account stated. As to those two forms, at 230, his Honour quotes the remarks of Jordan CJ in Commonwealth Dairy Produce Equalisation Committee Ltd v McCabe at 401 that:
“An action for money found to be due on accounts stated may take one of two forms. It is always essential in such an action that there should have been before action brought an admission by the defendant or his agent to the plaintiff or his agent that the sum claimed is due by the defendant to the plaintiff. … But this admission may be so framed as to be merely an acknowledgement of indebtedness, in which case although it supplies evidence of the debt the evidence may be rebutted by proof that no debt in fact existed. Or it may take the form of an account stated and agreed to between two parties, by which it is in effect agreed that the items on both sides shall be set-off and the balance paid. In the latter type of case, the agreement for set-off supplies good consideration for the promise to pay the amount of the balance; and the account stated is itself an agreement for valuable consideration constituting a cause of action, and not merely evidence of liability.”
The defendants rely upon the first form, where the admission is so framed as to be merely an acknowledgement of indebtedness, thus supplying evidence of the debt which may be rebutted by proof that no debt in fact existed.
John’s submissions
John also referred to Lewis v Wilson as an accurate statement of the law in this area, and directed the Court’s attention in particular to Sperling J’s observation at 232 that:
“It is also to be noted that the admission may be rebutted by other evidence. If other evidence is led, the ultimate issue is, on authority, whether the defendant is truly indebted to the plaintiff as alleged. The ultimate issue cannot be different in the absence of other evidence. Thus, it will always be a question for the court as to whether the court is persuaded that the indebtedness truly exists. … The court must decide in every case whether the admission, in terms and context, is sufficient to support the ultimate finding of indebtedness.”
John submits, in effect, that the Court has received John’s evidence about his conversations with Dorothy, and that the Court’s task is to determine in light of that evidence (if it is accepted) whether there was an underlying debt. John relied upon his evidence that he and Dorothy proceeded upon the basis either that the “loan” was something that could be forgiven, or that the Acknowledgement was simply there as a backstop to placate John’s guilt towards his mother, and not to be called upon, arguing that this precluded an action in debt on an account stated.
Determination
An action in debt on an account stated may be categorised as a “common money count”, as may an action for moneys had and received. As the defendants raised both of these counts (in the alternative) it is appropriate to make some preliminary comments about the legal foundations of such claims.
The common money counts have their background in the era when the forms of action ruled what we now refer to as the law of obligations; when the writs of debt, covenant, account and assumpsit were relied upon as quasi-contractual claims: Mason, Carter and Tolhurst, Mason and Carter’s Restitution Law in Australia, 3rd ed, 2016, [112]-[114]. Claims in debt on an account stated and for moneys had and received were pleading devices which, along with the other assumpsit counts, permitted the pleading of claims in general terms, with the specific details of the debt sought to be recovered left to the evidence: Mason, Carter and Tolhurst, [115], [2923]-[2924].
As Lindsay J noted in Steiner v Strang [2016] NSWSC 9, the continuing availability of these claims, and of “account stated” in particular, has been the subject of some criticism (see at [40]). In Lewis v Wilson, Sperling J considered that there were “strong reasons” for abolishing the cause of action in account stated altogether (at 233); and see also, Katelis v Adalia Pty Ltd [2002] VSC 497 at [39]; Julian Bailey, “Lewis v Wilson: Account stated rears its ugly head” (1997) 12 JCL 160.
Lindsay J was of the view, however, that the present proceedings demonstrated the “continuing utility” of the common money counts which, according to his Honour, facilitate “a practical, but principled” application of the law: at [41]. His Honour noted that the availability of debt on an account stated had been confirmed at an appellate level (in Commonwealth Dairy Produce Equalisation Committee v McCabe) and that it remained part of the stock-in-trade of modern litigation: see, eg, Lewis v Lamb [2011] NSWSC 873 at [17]; Champion Homes Sales Pty Ltd v JKAM Investments Pty Ltd [2014] NSWSC 952 at [70].
There is no reason to doubt that the common money counts remain part of the common law of Australia, and the weight of authority confirms this. Recent confirmation that indebtedness on an account stated remains a basis for liability in Australian law (in addition to those authorities cited by Lindsay J) may be found in Gove Sport Fishing and Diving Charter Pty Ltd v Yeend [2017] QSC 148 at [14]-[18]; Perpetual Ltd v Myer Pty Ltd [2018] VSC 2 at [148]-[156]. In any case, in New South Wales at least, UCPR r 14.12 expressly permits the old common money counts to be used as such.
In essence, the parties agree that the decision of Lewis v Wilson remains an accurate statement of the law to be applied in this area (see especially at 229-230).
The defendants rely on the first form of debt on an account stated identified in Commonwealth Dairy Produce Equalisation Committee Ltd v McCabe, namely, where an admission is so framed as to be merely an acknowledgement of indebtedness, in which case although it supplies evidence of the debt the evidence may be rebutted by proof that no debt in fact existed (at 401).
In the case of this form of account stated, the first requirement is the existence of an admission or acknowledgement by A to B that A owes a certain amount of money to B. The specific question which arose for determination in Lewis v Wilson was whether that admission needed to be absolute and unqualified. It was in that context that Sperling J reviewed the authorities and held that a “bare” admission was sufficient, even if qualified by a condition or reservation, provided that it was an admission or acknowledgement of a sum certain (at 232). The consequence of the existence of a “mere admission of liability” is to give rise to a cause of action in B against A for the admitted amount: Drury v Dulhunty (1921) 21 SR (NSW) 514 at 520 per Ferguson J. Here, the Acknowledgement plainly satisfies the requirements of an acknowledgement of indebtedness for a sum certain.

Secondly, once B has established that an admission or acknowledgement has been made, the burden of proof is then cast upon A to rebut the facts on which the admission is predicated: see Lewis v Wilson at 233; see also Burmester v Hogarth (1843) 11 M & W 97 at 101; 152 ER 730, per Parke B; Camillo Tank Steamship Co Ltd v Alexandria Engineering Works (1921) 38 TLR 134 at 141, per Viscount Finlay, 143, per Viscount Cave; Lockyer v Macready [1965] NSWR 801 at 805 per Brereton J; (1965) 66 SR (NSW) 369. It follows from my factual findings that the Acknowledgement has not been rebutted by proof that no debt in fact existed. Accordingly, I find that the defendants’ claim in debt on an account stated succeeds.

I have carefully considered the parties’ submissions in the context of the evidence in the current matter and I am also guided by the reasoning in Webster v Strang set out above. The plaintiff is arguing that there was an admission of debt by the first defendant. The decision in Webster v Strang indicates that:

the first requirement is the existence of an admission or acknowledgement by A to B that A owes a certain amount of money to B. The specific question which arose for determination in Lewis v Wilson was whether that admission needed to be absolute and unqualified. It was in that context that Sperling J reviewed the authorities and held that a “bare” admission was sufficient, even if qualified by a condition or reservation, provided that it was an admission or acknowledgement of a sum certain (at 232)

Therefore, the evidence needs to indicate that there is an admission of owing a certain amount of money, or acknowledgment of a sum certain (by the first defendant to the plaintiff).
I note the evidence relied upon, as to the asserted admission of debt, is, in part, some of the same evidence as was relied upon for the estoppel argument, which I have considered above in these Reasons for Decision. To the extent relevant to the account stated argument, I rely on the findings of fact I have made. In relation to estoppel, what was submitted was that there was an agreement to pay the amount, so the defendants were estopped from relying on the time bar. On the estoppel argument I found there was no statement indicating that there would be payment of the specific compensation sought by the plaintiff (as detailed above).
In relation to the question of admission of debt - to found an account stated there needs to be a clear acknowledgment/statement of the account/amount owing which is accepted, or the debt which is admitted or acknowledged. This is so whether it is an absolute acknowledgment, or a bare acknowledgment, there must be an acknowledgment of a specified sum. The communications relied upon by the plaintiff do not amount to an acknowledgement by the first defendant of an account/debt owed to the plaintiff. What they do evidence was that in response to the demands of the plaintiff, the first defendant was referring those demands to the second defendant – in effect deflecting responsibility for the claim asserted by the plaintiff in the plaintiff’s correspondence. That does not amount to an admission by the first defendant to the plaintiff of a debt owed to the plaintiff by the first defendant. Further, on the important issue of whether there is an admission of a debt of a specific amount, I am not satisfied that the evidence supports a conclusion the first defendant acknowledged to the plaintiff that it owed the plaintiff the specific sum claimed by the plaintiff.
I also note that this is not a case where the plaintiff issued the first defendant an invoice for a specified amount, rather the plaintiff advised the first defendant of an amount it would claim in damages. Nor is it a case where there is evidence of agreement by the first defendant that there is a debt owed to the plaintiff in a certain amount. There is no evidence in the correspondence relied upon by the plaintiff, of an admission by the first defendant, to the plaintiff, of the first defendant owing the plaintiff a debt in a specified amount.
For the reasons detailed, the evidence in this case is not evidence of an admission of an amount owing, and as such does not support an account stated.

Judgment

For all the reasons set out above, I find that the plaintiff has not proved, on the balance of probabilities, on the evidence, it’s claim. The Statement of Claim is accordingly dismissed.
Given the findings I have made on the Statement of Claim I do not need to make an order in relation to the indemnity claimed in the Cross Claim. However, for completeness I make the following order on the Cross Claim – the cross claimant succeeds against the cross-defendant in establishing the indemnity claimed in the cross-claim, but given the orders made in relation to the Statement of Claim, no further order on the cross claim is required.

ORDERS

The Statement of Claim is dismissed.
The cross-claimant succeeds against the cross-defendant in establishing the indemnity claimed in the Cross Claim, but given the orders made in relation to the Statement of Claim, no further order on the Cross Claim is required.

I will now hear from the parties on the issue of costs.

Magistrate Huntsman

3 July 2020

Decision last updated: 15 August 2022

Medium Neutral Citation:	Espresso Company Australia Pty Ltd v Savino Del Bene Australia Pty Ltd [2020] NSWLC 13
Hearing dates:	16 December 2019 and 15 May 2020
Date of orders:	3 July 2020
Decision date:	03 July 2020
Jurisdiction:	Civil
Before:	Huntsman LCM
Decision:	Verdict for the defendants on the Statement of Claim Verdict for the cross-claimant on the Statement of Cross Claim The Statement of Claim is dismissed. The cross-claimant succeeds against the cross-defendant in establishing the indemnity claimed in the Cross Claim, but given the orders made in relation to the Statement of Claim, no further order on the Cross Claim is required
Catchwords:	Carriage by sea and land; bailment; sub-bailment; contract; bailment on terms; Bill of Lading; time bar clause; estoppel; liability limitation clauses; Himalaya clause; whether delivery included to plaintiff’s warehouse; Hague Visby Rules; implied terms; applicable contract of carriage; breach of contract; interaction between the concurrent contracts, exclusion clauses in contracts, Himalaya clause, and bailment; estoppel in relation to time bar in contract; intersection of bailment and contractual law principles
Legislation Cited:	Carriage of Goods by Sea Act 1991 (Cth)
Cases Cited:	BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 Life Savers (Australasia) Ltd v Frigmobile Pty Ltd & Another[1983] 1 NSWLR 43 China Ocean Shipping Co Ltd v PS Chelloram 7 Co Ltd (1990) 28 NSWLR 354 Legione v Hateley (1982-1983) 152 CLR 406 Moratic Pty Ltd v Gordon 13 BPR 24 Hobbs v Petersham Transport Co Pty Ltd (1971) 124 CLR 220 The Pioneer Container [1994] 2 AC 324 The Mahkutai [996] AC 650 Cro Travel PL v Australia Capital Financial PL [2018] NSWCA 153 Goldman v Thai Airways International Ltd [1983] 1 WLR 1186 Webster v Strang; Steiner v Strang [2018] NSWSC 495 Kamil Export (Aust) Pty Ltd v NPL (Australia) Pty Ltd [1996] 1 VR 538
Texts Cited:	Carter on Contract (Lexis Nexis) Bailment, N.E. Palmer, 2nd edition, The Law Book Company Limited, 1991
Category:	Principal judgment
Parties:	Espresso Company Australia Pty Ltd (ACN 123 284 015), plaintiff Savino Del Bene Australia Pty Ltd (ACN 098 199 270), first defendant and cross-defendant FRF Holdings Pty Ltd t/as FRF Couriers (ACN 052 544 126), second defendant and cross-claimant Dotrans Logistics Pty Ltd (ACN 623 915 104) ,third defendant Lam Vien DO t/as Dotrans Logistics (ABN 27 165 057 075), fourth defendant
Representation:	Counsel: Derek Hand, plaintiff Quintin Rares, first defendant and cross-defendant Ivan Griscti, second defendant and cross-claimant No appearance, third defendant No appearance, fourth defendant Solicitors: SRB Legal, Perth, plaintiff Holding Redlich, Sydney, first defendant and cross-defendant Mason Black Lawyers, Sydney, second defendant and cross-claimant No appearance, third defendant No appearance, fourth defendant
File Number(s):	Case number 2019/00039504