Hobbs v Petersham Transport Co Pty Ltd

[1971] HCA 26

HIGH COURT OF AUSTRALIA

Barwick C.J., McTiernan, Menzies, Windeyer and Owen JJ.

HOBBS v. PETERSHAM TRANSPORT CO. PTY. LTD.

(1971) 124 CLR 220

30 June 1971

Contract—Bailment

Contract—Carriage of goods—Absence of bailment—Due care—Accident causing damage to goods—Failure to deliver—Prima facie evidence of breach—Explanation of failure to deliver—Onus of proof. Bailment—For reward—Carriage of goods—Due care—Duty of bailee—Onus of proof—Carriage of goods by sub-contractor—Possession of goods taken directly by sub-contractor.

Decisions

June 30.
The following written judgments were delivered:
BARWICK C.J. A.S.E.A. Electric (Australia) Pty. Ltd. (the plaintiff) needing in 1957 to move certain electrical equipment from a wharf in Sydney to Ashford, a town in the north-west of New South Wales more than 500 miles distant from Sydney, engaged Petersham Transport Co. Pty. Ltd. (the defendant) to carry this equipment to that town. The contract of carriage was formed by an exchange of letters, which contained no special terms. The defendant thereafter by a formal agreement contracted with a partnership, Hobbs Bros. (the third party) to carry the equipment from the wharf to Ashford. Neither the defendant nor the third party was a common carrier. (at p223)

2. The third party uplifted the goods from the wharf in Sydney placing them on a 1956 model International articulated vehicle which was described as "near new" and in top condition. It had been regularly serviced over the preceding months of its use, being mostly driven by the driver who drove it on this occasion. This man was a competent driver and as well an experienced motor mechanic. The equipment, though heavy, did not constitute an undue load for the vehicle. When a few miles north of the town of Inverell and some 420 miles on its journey towards Ashford and whilst travelling at about twenty-five miles per hour on a level piece of road approaching a slight incline upwards on a gradual bend, an axle of the bogie of the trailer of the vehicle broke "behind what they call the backing plate of the brake drum". The vehicle overturned, the driver losing control of it. As a consequence the electrical goods were severely damaged. They were not delivered to Ashford as promised to the plaintiff by the Petersham Transport Co. Pty. Ltd. and had to be replaced. (at p223)

3. After a lapse of some five years, namely in 1962, the plaintiff commenced an action in the Supreme Court of New South Wales against the defendant for breach of the contract of carriage alleging that the defendant had promised to use due care, skill and diligence in carrying certain goods: and a breach of that promise. In a second count the plaintiff sued the defendant as a carrier who had received the goods for not safely carrying the goods and for having damaged and spoiled them by its negligence. The defendant issued a third-party notice in January 1966 and declared against the third party claiming damages for breach of a promise to use due care, skill and diligence in the carrying of the said goods from Sydney to Ashford. The defendant in a second count also sued the third party for negligence in the carriage of the goods. Unless the defendant is liable to the plaintiff the defendant will have no basis for a verdict against the third party. As I am of opinion for reasons I shall give that the plaintiff should not succeed against the defendant, I have no need to consider any special relationship which might have existed between the defendant and the third party nor the possibility of any relationship between the plaintiff and the third party. I shall consider only the case made by the plaintiff against the defendant on its pleadings and, as well as I can gather it from the transcript of evidence, in its conduct of the case. That case depended entirely upon the promises alleged in the first count as there was no evidence to support the second count founded on the defendant's receipt of the goods. (at p224)

4. It is necessary to refer to certain evidence which was given at the hearing of the action and of the claim against the third party. The driver of the vehicle inspected the broken axle and the portion of the vehicle from which it had broken away immediately after he had recovered himself from the immediate effects of the accident. He was asked these questions and gave the respective answers:

"Q. Was there any damage to the axle or the hub in the area of that break? A. No, it was a clean break. Q. Before you reached the position where the accident happened did you notice anything unusual about the way in which the vehicle behaved? A. Not a thing. . . . . . . . . . .

Q. Did you find on examination of your vehicle that the fracture was, as you call it, against the backing plate of those wheels? A. Yes. Q. And that the remainder of the axle still attached to the off side wheels was jammed underneath the trailer. A. Yes. . . . . . . . . . .

Q. You have had experience as a mechanic on axles? A. Not necessarily, do you mean as far as breakages. Q. Have you seen a fractured axle before this day? A. Yes, quite a few. . . . . . . . . . .

Q. You found this clean break? A. Yes. Q. Fresh? A. Yes. Q. No apparent indication that there was a previous fracture in the axle anywhere near the outside of it? A. None whatsoever. . . . . . . . . . .

Q. You said you had seen quite a few fractured axles in your time? A. In my mechanical career. Q. Is this the sort of condition which can occur in an axle after wear? A. No, it was like an act of God - if it happened, it hit. Q. I suppose in the course of your mechanical career you had had occasion to see an axle which was developing a hair crack? A. Yes. Q. If you see an axle with such a crack in it, then of course it is a warning sign to do something about it? A. You don't drive it. Q. But of course, when you looked at the axle that was still on the wheels it was fractured right through? A. Yes. Q. And of course you could not know for sure how it looked before that fracture had taken place? A. No. The mechanic checks the axles. Q. What was that again? A. The mechanic did the checking of the axles if necessary - any service. Q. I would like to clarify one final thing: While you were working for Hobbs Bros. did you drive this prime mover fairly constantly? A. Every trip it made. Q. Did you have it on the road for the full working week? A. One week return trip. Q. And then may be when it came back you had a day off and then you would be on the road again; is that the sort of routine you had? A. It went in for service and I rested, and I loaded and took off." . . . . . . . . . . (at p225)

5. A detective senior constable of police who came upon the scene of the accident almost immediately after it had happened gave evidence as to the appearance of the broken axle. This officer had had experience as a motor mechanic over some two years and had worked on heavy vehicles. In addition, during his eight years of service in the police force he had very frequently investigated motor car accidents. On probably four occasions he had investigated accidents involving broken axles. He said he made the inspection of the bogie axle of the vehicle. He was asked and answered these questions:

"Q. Did you notice anything in particular about the front axle of the bogey? A. I saw that the front axle of that rear section of the trailer had been broken and it appeared to be a clean break. Q. In what area was that; where was the break? A. The break was at that point where the hub or wheel of the rim fitted onto the shaft of the axle, immediately behind the brake lines on the backing plate. . . . . . . . . . .

Q. In this area was there any sign of damage or impact at all? A. No." . . . . . . . . . . (at p226)

6. A witness who was the senior shipping and contracts clerk of the plaintiff in 1957 went to the scene of the accident with the senior engineer employed by the plaintiff. He was asked these questions:

"Q. Mr. Badman, did you examine the broken axle on this vehicle? A. I saw it. I did not strictly examine it from an engineering point of view. Q. No, but you saw it, did you? A. I saw it. Q. Was Mr. Fairley with you? A. He was. Q. What is his particular line? A. He is the senior engineer - or was at the time - with the company. Q. Was Mr. Fairley with you? A. He was. - or was at the time - with the company. Q. Is he here today? A. He was, but probably counsel could answer that one better, to my knowledge. Q. Have you seen him here today? A. I have seen him, yes. . . . . . . . . . .

Q. And I suppose you saw him looking at the damage to the stator, did you? A. At the scene of the accident. Q. At the scene of the accident? A. Yes. Q. And no doubt you saw him looking at the state of the axle of the trailer? A. Yes. Q. You saw him examining it, did you? A. Yes. Q. You were there within three, four or five days of this accident? A. Yes. The accident was on the Wednesday; we arrived on the Sunday." . . . . . . . . . . (at p226)

7. The driver of the vehicle also gave the following evidence with respect to the servicing of the vehicle: "Q. You mentioned that the vehicle which was comprised of the

prime mover and the trailer, the vehicle in this accident, was serviced to your knowledge regularly? A. On each return trip. Q. That was serviced by a motor mechanic in the employ of Hobbs Bros., Mr. Looker? A. That is correct. Q. He was in charge of the garage there? A. That is right. Q. When you say serviced it, did you see him service it? A. Yes. Q. Did you mostly assist him if he wanted any assistance? A. I would just do the greasing and oil changing - the the mechanical checking. Q. You say from your observation both as a driver of these vehicles and a driver with mechanical experience that the trailer was in apparent good mechanical condition before it undertook this trip? A. A1 condition. Q. When you were driving along before the accident, as I understand your evidence, the first indication you got that you are in trouble is that suddenly the vehicle is over on its side? A. That is correct. It happened so quick. . . . . . . . . . .

Q. Where was this depot? A. Victoria Road, Rozelle. Q. At that depot was there a workshop? A. The workshop is in Leichhardt. Q. What workshop is that? Was it Hobbs Bros. workshop? A. It was Hobbs Bros. yard. All the trucks got serviced there. . . . . . . . . . .

Q. When you came to work you turned up at the Rozelle depot to drive the truck? A. No, I picked it up at Leichhardt at the garage. . . . . . . . . . .

Q. After you finished unloading it you would then bring the empty vehicle to the Rozelle depot? A. I handed documents in and took it up for service. Q. To where? A. To the garage at Leichhardt. Q. There was a Mr. Looker at Leichhardt? A. Yes, he was in charge of the garage. Q. He had the workshop there, did he? A. That is right. Q. As far as you know all the servicing of all the vehicles in the Hobbs Bros. fleet was done by Mr. Looker at the Leichhardt depot? A. Yes. Q. You do not know of any servicing being done at any other garage or service station apart from that? A. No, unless there were repairs to be done on the road or something like that" . . . . . . . . . .

The witness said he used to drive this particular vehicle every week and that no one else had driven it except a mechanic moving it in the garage. "Q. You, of course, have no particular recollection of any

maintenance being done to this vehicle on the day that you drove it to the wharf? A. It could have happened in the morning. Q. But you cannot remember? A. I can't remember. Q. You yourself did not stay with the mechanic while he did all the maintenance to this vehicle that might have been necessary? A. Not all the time. Q. I take it you would not yourself say at any particular time exactly what maintenance to the vehicle was necessary because that was his job to look after, wasn't it? A. He would take a report off me first. Q. He may ask you what sort of trip you had and if anything special had happened you would mention it? A. Yes, he would ask if anything needed attention. Q. He seemed to be relying on you to tell him if anything could be done or anything needed to be done? A. Unless he found something himself when he examined it. Q. When it was a question of examining the vehicle to see whether something needed to be done which you had not mentioned then you left that to Mr. Looker? A. That is correct. . . . . . . . . . .

Q. And the place at - the one workshop at Leichhardt had to do the servicing both of the inter-state vehicles and the local vehicles? A. That's right. Q. Was Mr. Looker the only mechanic there? A. No, he had an assistant, an apprentice. Q. One apprentice? A. I cannot remember off hand, but I think he had an assistant as well. Q. Did you sometimes see that assistant doing mechanical work on vehicles? A. No, he never checked anything. He was only doing minor work in the garage. Mr. Looker did all the service checking. . . . . . . . . . .

Q. And you believe that Mr. Hobbs in fact ensured that Mr. Looker in fact did it? A. Sometimes I was there doing the service with him." (at p228)

8. The action and third party claim were heard by a judge without a jury. The learned trial judge found a verdict for the plaintiff in the principal action and for the defendant in the claim against the third party. The verdict in each case was general. But as the judge gave reasons for his findings, the lack of evidence to support one of the counts need not be fatal to the verdict. He concluded that the vehicle was being driven at a proper speed and in a proper manner, that the driver had no warning of the impending fracture of the axle at a time when he could have avoided its consequences, and that he did exercise all the care that could have been expected of him. However he held that, on the authorities, there were circumstances in the case from which "One can say that there has been a prima facie case of negligence established by the plaintiff that is to say by reason of the non-delivery of the goods". He found that the failure to deliver was caused "as a result of the actual fracturing so causing the accident and further that this can be caused by a fracture of an axle warning of which might be discovered and remedied by careful and proper inspection". He held that there was a duty on the defendant company to institute and carry out such an inspection as might have revealed the development of the fracture which finally caused the mishap. He thought it would be reasonable for an owner of heavy vehicles periodically to check for any indications of fractures which might be about to occur, to institute a proper and regular system of maintenance to discover any signs of cracking of an axle and to take corrective action if they did occur. The trial judge commented on the absence of any evidence from Mr. Looker or any explanation of his failure to do so and the failure of the surviving member of the partnership of Hobbs Bros. to give any evidence of any system of maintenance or inspection carried out at the depot. He placed some weight on the absence of these witnesses notwithstanding the considerable lapse of time between the accident and the date of the trial. He concluded :

"In the absence of any direct evidence as to a system of maintenance or as to the particular maintenance carried out on this vehicle I have come to the conclusion that as a fact I would not accept that the accident occurred without any negligence on behalf of the partnership."

Therefore for want of such satisfaction he came to the conclusion that the plaintiff must succeed. On appeal, the Supreme Court, Court of Appeal Division (1970) 92 WN (NSW) 137 , by majority supported the findings of the trial judge. (at p229)

9. The defendant, a private carrier, was sued in the first count not as a bailee on whom lay the onus of establishing his exercise of due care for the goods bailed to it : but for breach of its promise to carry the goods safely, that to is say, with due care. Indeed, that probably was the only basis on which the plaintiff had any rights against the defendant : the defendant had not itself received the goods. To procure the services of another to carry the goods was not itself a breach of that promise. But the failure of the sub-contractor to use due care in the carriage of the goods would result in a breach by the defendant of its promise to the plaintiff. (at p229)

10. The onus of establishing the breach of contract, as in the first count of the declaration was undoubtedly upon the plaintiff. Non-delivery of the goods furnished prima facie evidence of a breach of the promise. But in such an action it does no more. Yet the plaintiff seems to have claimed that such evidence placed an onus on the defendant ; and the learned trial judge, accepting that view, has not been satisfied by the defendant, presumably, that it was not in breach of its promise to the plaintiff and not negligent in the carriage of the goods. (at p229)

11. In my opinion, the defendant faced with the evidence of nondelivery of the goods was in much the same position as a defendant in an action for negligence in the driving of a motor vehicle in which the circumstances of an accident provide a basis for an inference of such negligence. There, as I think, if the defendant provides an explanation of the accident which destroys the ground for that inference, the position is that the plaintiff is without evidence of negligence on the part of the defendant. See Nominal Defendant v. Haslbauer (1967) 117 CLR 448 and cases there cited ; Piening v. Wanless (1968) 117 CLR 498 . So here it seems to me that once the non-delivery of the goods is explained as it was explained, there is no room for an inference from the fact of non-delivery of the goods that the defendant had failed to take due care of the goods. In my opinion, once such an explanation is given and accepted, the defendant is not required to go further and establish that he could not have prevented the road accident which happened by any exercise of due care in the maintenance of the vehicle. To require the defendant to do so would, in my opinion, be pressing the evidentiary consequence of the non-delivery too far. To so require proof by the defendant would shift the onus to the defendant to disprove an absence of breach. That, in my opinion, is an unwarranted step. The onus of proving breach of the promise is always with the plaintiff. The matter would be otherwise in an action founded on a bailment of the goods. (at p230)

12. Where a defendant in an action such as the present has been shown by positive evidence to be negligent a consequential onus may rest on him to disprove a causal connexion between that negligence and the loss. In this connexion reference should be made to Brook's Wharf and Bull Wharf Ltd. v. Goodman Bros. (1937) 1 KB 534, at pp 538-539 . There Lord Wright referring to remarks of members of the House of Lords, not found in the Law Reports but quoted by Kennedy L.J. in Joseph Travers &Sons Ltd. v. Cooper (1915) 1 KB 73, at pp 90-91 , said this :

"The first passage is quoted from the judgment of Lord Loreburn in the following words : 'Here is a bailee, who, in violation of his contract, omits an important precaution, found by the learned judge upon ample evidence to be necessary for the safety of the thing bailed to him, and which might have prevented the loss. And his breach of contract has the additional effect of making it impossible to ascertain with precision, and difficult to discover at all, what was the true cause of the loss. I cannot think it is good law that in such circumstances he should be permitted to saddle upon the parties who have not broken their contract the duty of explaining how things went wrong. It is for him to explain the loss himself, and, if he cannot satisfy the Court that it occurred from some cause independent of his own wrong-doing, he must make that loss good]' Then Kennedy L.J. says : 'And so Lord Halsbury : 'It appears to me that here there was a bailment made to a particular person, a bailment for hire and reward, and the bailee was bound to show that he took reasonable and proper care for the due security and proper delivery of that bailment ; the proof of that rested upon him'. In the present case, the stealing of the goods being admitted, the plaintiffs have given evidence that they have taken all reasonable precautions to protect the goods against the risk of theft, and they say that they have satisfied the burden of proof which rests upon them and that they are outside the rulings I have just quoted. They further rely on a statement of the rule given (in a dissenting judgment, it is true) by Lord Dunedin in Ballard v. North British Railway Co. 1923 S.C. (H.L.) 43, at p. 54. Lord Dunedin there said : 'I think this is a case where the circumstances warrant the view that the fact of the accident is relevant to infer negligence. But what is the next step ? I think that, if the defenders can show a way in which the accident may have occurred without negligence, the cogency of the fact of the accident by itself disappears, and the pursuer is left as he began, namely, that he has to show negligence. I need scarcely add that the suggestion of how the accident may have occurred must be a reasonable suggestion' ". (1937) 1 KB 534, at pp 538-539 (at p231)

13. Lord Wright thought that Lord Dunedin's statement stated the same rule as that stated by Lords Loreburn and Halsbury. Joseph Travers &Sons v. Cooper (1915) 1 KB 73 was a case in which a carrier's servant had been negligent in leaving a barge unattended. It sank, for what reason was not certain. It was held by the majority of the Court of Appeal that in those circumstances it was for the carrier to prove that his negligence had not caused the loss. See per Phillimore L.J. (1915) 1 KB, at p 97 . Buckley L.J. pointed out that the unreported case in the House of Lords from which the quotations were made was a case in which the bailee had been negligent and, in that event, proof that the loss had not been caused thereby rested upon him (1915) 1 KB, at p 87 . (at p231)

14. In using the statements made by Lord Wright and those quoted by him in relation to an action for breach of a promise to carry with due care where there has been no bailment of the goods it must be remembered that this Court has differed from the trend of decision in England by which it is considered that the giving of prima facie evidence may operate to shift the onus of proof. See Mummery v. Irvings Pty. Ltd. (1956) 96 CLR 99 and Anchor Products Ltd. v. Hedges (1966) 115 CLR 493 as well as the other cases in this Court to which I have already referred. As a result of those cases, the accepted explanation of the non-delivery, in my opinion, removes the basis of the inference which could otherwise be drawn from its occurrence. It would of course be different if that explanation itself exposed a want of care on the part of the defendant. cf. Nominal Defendant v. Haslbauer (1967) 117 CLR, at p 457 . (at p232)

15. Here the defendant established the precise cause of the failure to deliver and that that cause of non-delivery, namely, the unexpected fracture of the axle of the bogie of the trailer, was not itself due to any act of the defendant or of his sub-contractor. It thus, in my opinion, destroyed the basis of any inference of the lack of due care drawn only from the fact of non-delivery. Further it was established that the vehicle was suitable for its task, it was not overloaded, it was not improperly driven, either in point of speed or otherwise : it was in first class condition. The fracture of the axle was new and not the result of wear. It was a total failure of that axle, immediate and without warning. (at p232)

16. In my opinion, upon the evidence of the condition of the truck and the manner of the accident being given, and accepted by the trial judge, it remained for the plaintiff to establish a want of reasonable care on the part of the defendant for the safety of the goods in the course of their carriage that being the basis of the plaintiff's claim. The onus did not pass to the defendant because the non-delivery of the goods afforded prima facie evidence of a breach of a promise to use due care for the goods. (at p232)

17. However, even assuming that the consequence of non-delivery was that the defendant (presumably because regarded as a bailee) became liable to prove that it could not have avoided the fracture of the axle by reasonable inspection and maintenance of the vehicle it did, in my opinion, satisfy that onus. There was no evidence that any warning sign of an impending fracture of the axle of the kind which did occur could have been seen upon an examination of the vehicle in the course of its reasonable maintenance or for that matter at all. There was no evidence that such a fracture was preceded by a hair line crack. The evidence to which I have referred pointed the other way. All that was said in evidence was that if a hair line crack were seen, the vehicle would not be driven. In my opinion, the trial judge wrongly assumed without evidence that such warning signs would exist and would be discoverable by a reasonable system of maintenance and inspection supposing (which I cannot think could be supposed) that in such a system the axles would be cleaned of all grease so as to expose the metal of which they were formed. On these matters I respectfully agree with the reasons for judgment given by Sugerman P. in the Supreme Court. (at p233)

18. The defendant did prove that the vehicle was regularly inspected and serviced. The driver, expert and experienced in the field, said that the vehicle was in A1 condition. In my opinion, even on the assumption that because of the non-delivery of the goods the defendant carried the onus of establishing that reasonable care had been taken of the goods, the trial judge was in error in not being satisfied in the circumstances that the defendant had taken reasonable care for the safety of the goods. (at p233)

19. The appeal should be allowed, the verdicts of the trial judge set aside, a verdict entered for the defendant in the plaintiff's action and for the third party in the defendant's claim and a direction given that judgments be entered accordingly. (at p233)

McTIERNAN J. I agree with Menzies J. and concur in his reasons. The appeal should, in my opinion, be allowed. (at p233)

MENZIES J. I have had the advantage of reading the judgment of the Chief Justice in which the facts relevant to these appeals are fully set out. (at p233)

2. The critical decision to be made here, as it seems to me, is whether the evidence established affirmatively that the fracture of the axle of the bogie of the trailer which caused the vehicle to overturn happened without any negligent act or omission of the defendant or any servant of the defendant. (at p233)

3. It is common ground that the defendant was a bailee for reward of the equipment being carried. It was not under an absolute duty to deliver. It was a qualified duty and, to use the language of Starke, Dixon and McTiernan JJ. in John F. Goulding Pty. Ltd. v. Victorian Railways Commissioners (1932) 48 CLR 157, at p 166 , "it would not be broken if the defendants were disabled from delivery through destruction or loss of the goods which reasonable care and skill on their part could not avoid". To escape liability for non-delivery the onus of proving that the non-delivery, however caused, was without fault on its part, rested upon it. A modern statement of the position is to be found in the judgment of Lord Denning M.R. in Morris v. C.W. Martin &Sons Ltd., as follows (1966) 1 QB 716, at p 726 :

"Once a man has taken charge of goods as a bailee for reward, it is his duty to take reasonable care to keep them safe : and he cannot escape that duty be delegating it to his servant. If the goods are lost or damaged, whilst they are in his possession, he is liable unless he can show - and the burden is on him to show - that the loss or damage occurred without any neglect or default or misconduct of himself or of any of the servants to whom he delegated his duty." (at p234)

4. These well-established rules, which I think should be accepted without qualification or gloss, do not constitute a carrier, such as the defendant, an insurer ; he escapes liability if he can show that non-delivery of goods entrusted to him for carriage was not due to his fault, notwithstanding that he does not show how the loss actually occurred. In this, his obligation is less onerous than that imposed by law upon a common carrier who is, of course, responsible for the safety of the goods entrusted to him, except for loss arising solely from act of God or the Queen's enemies or inherent vice in the goods carried or from the fault of the consignor. If the defendant had been a common carrier he could not have hoped to escape from liability in the circumstances of this case. (at p234)

5. His Honour the learned trial judge was not satisfied that the onus of disproving negligence had been discharged. The problem for this Court is whether he should have been so satisfied. (at p234)

6. The defendant made a strong case but there was an omission, the significance of which is, I think, of critical importance. It did not prove that, in the course of servicing its vehicle, the axle which broke had been inspected periodically, or, indeed, at all. The driver's evidence was to the effect that he had not inspected the axles of the vehicle and that the checking of the axles was the duty of a mechanic in the defendant's employment at its Leichardt depot. This mechanic, one Looker, as the driver said, "did the checking of the axles if necessary - any services". Mr. Looker was not called. (at p234)

7. Had there been anything in the appearance of the axle at the point of fracture to indicate that the fracture was otherwise than a completely new break, I would have thought that the defendant's attempted proof that it was free from blame would, by reason of the foregoing omission, have been incomplete. It is the convincing evidence that the fracture was clean and fresh - which it seems his Honour accepted - upon which the defendant had to rely to complete its case and to negative the existence of any prior defect in the axle which broke that reasonable inspection might have revealed. (at p234)

8. Not without hesitation, I have come to the conclusion that the inference which the evidence required is that the fracture did happen all at once and without there being any prior fault, such as a hair-line crack, which reasonable examination of the axle might have revealed. The lack of evidence of inspection of the axle had, therefore, no significance because, had there been such an examination, it would have revealed nothing that could have contributed to the accident. The defendant did, I think, prove inter alia that the breaking of the axle of the bogie happened without any fault on its part or on the part of its servants. (at p235)

9. I have therefore come to the conclusion that the learned trial judge should have found affirmatively that the non-delivery of the goods was not due to default on the part of the defendant. (at p235)

10. It is for this reason that I am of the opinion that the defendant's appeal should be allowed. (at p235)

WINDEYER J. These are two appeals from the judgment of the Supreme Court of New South Wales (Court of Appeal Division) (1970) 92 WN (NSW) 137 dismissing an appeal from the judgment of Nagle J. in an action at common law. The plaintiff complained that certain valuable electrical equipment that it owned, which it had engaged the defendant Petersham Transport Co. Ltd. Pty. to carry by road from Sydney to an electric power station at Ashford in the north of New South Wales, had not been carried safely but had been badly damaged enroute. For the discharge of its contractual obligations to the plaintiff, the defendant had employed a firm of carriers known as Hobbs Bros. to provide a vehicle and driver and undertake the actual carriage of the goods. While the goods were on a vehicle belonging to the partnership it ran off the road when on its way to Ashford. The goods were thrown off and damaged. The plaintiff's contract with the defendant for the carriage of the goods was made partly orally but confirmed by an exchange of letters. The defendant on its letterhead was described as "General Carriers and Haulage Contractors". The tenor of the letters, especially the plaintiff's letter of 7th August 1957, suggests that the agreement was that the defendant should be the carrier, not that it was merely a forwarding agent employing carriers. But I do not think that the plaintiff placed such reliance upon the skill and capacity of the defendant that by employing a sub-contractor the defendant broke its contract with the plaintiff. The learned trial judge refused to allow the plaintiff to rely on any allegation of that kind. He also refused to allow the plaintiff to adduce as a breach of contract the fact that the sub-contractor was not carrying the goods directly to Ashford but was intending to make a detour into Queensland as a "border hopping" exercise. I think that, having regard to the form of the pleadings, his Honour was right in rejecting these contentions. I would add that the two cases on which the plaintiff sought to rely - Lilley v. Doubleday (1881) 7 QBD 510 and Edwards v. Newland &Co. (1950) 2 KB 534 - were cases of sub-bailment by a bailee. There goods had been received by a person as bailee for custody. He without authority had handed them to the care of another person. That is not what happened in this case. (at p236)

2. The Hobbs brothers were in business as transporters by road. They had a depot at Rozelle, which was their business headquarters, and a yard and garage at Leichhardt where their vehicles were stationed when not on the road and where they were regularly serviced. They owned a number of vehicles, six or more, of various kinds, including semi-trailers. (at p236)

3. The accident in which the goods were damaged happened in August 1957, when the goods were being carried by the Hobbs brothers. In December 1962 the plaintiff commenced this action against the defendant. There are two counts in the plaintiff's declaration. The first alleges a contract by the defendant to use due care, skill and diligence in the carriage of the goods, and a breach of this contract, whereby the goods were damaged. The second count is in a common form in an action against a carrier. It alleges that the defendant was a carrier : that the plaintiff delivered to it, and it received, goods to be safely carried ; that "the defendant did not safely carry the said goods and by themselves (sic) their servants and agents so negligently carelessly and unskilfully carried the same" that they were broken and damaged. This declaration was not filed until March 1963. The defendant's pleas were not filed until May 1964. Apparently no objections were made by either party to these delays. There were further unexplained delays. In January 1966 the defendant gave a third party notice pursuant to the Alternative Defendants and Third Party Rules under the Law Reform (Miscellaneous Provisions) Act, 1946 (N.S.W.). By this procedure the two brothers, L.R.J. Hobbs and H.A. Hobbs, who traded as Hobbs Bros., became third parties in the action. The defendant's declaration against them reflects the plaintiff's declaration. It alleges first a contract by them that would carry the goods carefully ; and in a second count that they were carriers to whom the defendant had delivered the goods to be carried ; and, in respect of each count, that they had been negligent ; and that the defendant claimed to be indemnified (wholly or in part) by them as third parties in respect of any sum that the plaintiff might recover from the defendant. (at p237)

4. The case, for some reason, did not come on for trial until May 1969. By these inordinate delays the parties created difficulties for themselves at the hearing. One of the Hobbs brothers died : some persons who might have been able to give evidence were not called, perhaps because recollection of details had faded : and, most important, a claim that the plaintiff might have asserted directly against the Hobbs brothers had become stale and was statute barred. (at p237)

5. When at last the action came on for trial the parties agreed that it should be tried by a judge without a jury. It was heard by Nagle J. He, in a considered judgment, which he delivered within a few days of the hearing, carefully set out the facts and the relevant issues of law that had been debated before him. He found in favour of the plaintiff ; and, having assessed damages at $18,046.92, he gave judgment for the plaintiff for that amount against the defendant, and held that the defendant was entitled to recover this amount from the Hobbs brothers. On appeal to the Court of Appeal Division of the Supreme Court his Honour's decision was upheld by a majority of their Honours there (Manning J.A. and Moffit J.A., Sugerman P. dissenting) (1970) 92 WN (NSW) 137 . In their joint judgment the two learned judges who were the majority said that the case turned entirely upon a question of where, in a contract for the carriage of goods for reward, the burden of proof lay on the issue of negligence. (at p237)

6. Their Honours held that, in the circumstances, it lay upon the defendant as a bailee to prove that the failure to deliver the goods safely was not the result of a want of due care on its part, and that it had failed to do this. They therefore upheld the judgment of the trial judge. Sugerman P. took the same view of the relevant law as to onus of proof ; but he thought that, upon the facts, the defendant had discharged the onus that lay upon it. He would have set aside the judgment of the trial judge. The original defendant and the third party now both appeal to this Court. (at p237)

7. A person who is not a common carrier but who undertakes to carry goods for reward is commonly called a private carrier. It was in 1703 firmly established as the rule of our law by the great judgment of Holt C.J. in Coggs v. Bernard (1703) 1 Salkeld 26 (91 ER 25) ; 2 Ld Raym 909 (92 ER 107) , that a private carrier is a bailee of goods delivered to him. If he is to carry them for reward, he is a bailee for reward and as such bound to use due care and diligence to keep the goods safely and to deliver them undamaged. The standard of care and diligence is that which a careful and vigilant man would exercise in respect of goods of his own of the same kind in similar circumstances. A bailment comes into existence upon a delivery of goods of one person, the bailor, into the possession of another person, the bailee, upon a promise, express or implied, that they will be re-delivered to the bailor or dealt with in a stipulated way. A carrier to whom goods are delivered for carriage is a bailee. But a person who undertakes that he will carry goods is not a bailee of them unless they be actually delivered to and received by him. (at p238)

8. The case has been conducted on the assumption that neither the defendant nor the Hobbs brothers was a common carrier. In the ordinary way of their businesses, each was no doubt a private carrier. But on a document dated 12th August 1957 setting out the terms on which the Hobbs brothers agreed "as a sub-contractor to perform contracts of carriage" for the defendant, this appeared : "I accept the responsibility of that of a Common Carrier at Law." This document was signed by one Johnson who was a servant of the Hobbs brothers. He was the driver of the vehicle on which the goods were being carried at the time of the accident. He gave evidence. Under cross-examination by counsel for the Hobbs brothers he said that he had no instructions from them to do anything but pick up goods as directed by a representative of the defendant : but it was not disputed that he had signed the document and handed it to the defendant ; and the learned trial judge rightly, I think, admitted it as evidence "against the third party". In the result it may be that the Hobbs brothers should, as between themselves and the defendant, be regarded as common carriers with respect to the journey in question for private carriers can assume the responsibilities of a common carrier for a particular transaction : Robinson v. Dunmore (1801) 2 B &P 416 (126 ER 1359) . However, as will appear, I do not think that the character of the Hobbs brothers is a decisive element in the case. (at p238)

9. It has been assumed throughout the argument that the defendant was a bailee of goods of which the plaintiff was bailor and that the liability of the defendant is to be measured accordingly. This proposition has not been questioned. Nevertheless I think that it is mistaken, and that the mistake is critical. The plaintiff's declaration alleged that the defendant "was a carrier of goods for hire and the plaintiff delivered to the defendant and the defendant received as such carrier certain goods of the plaintiff . . .". But, as I understand the case, there was no evidence that the plaintiff ever delivered the goods to the defendant. They were delivered by representatives of the plaintiff company directly to Johnson, the servant of the Hobbs brothers. They had been lying on a wharf at Pyrmont, Sydney. They were loaded directly from the wharf on to the lorry belonging to the Hobbs brothers, of which Johnson was the driver. Johnson had been told by one of the Hobbs to go to the wharf and there report to a Mr. Howe, who was the manager of the defendant company, and take directions from him. Johnson met Howe at the wharf. Howe pointed out the cases to be loaded on Johnson's vehicle. They had been unshipped and put upon the wharf earlier in the day. The actual loading on to Johnson's vehicle was done by a crane operated, it seems, by a wharfinger or stevedore. The articles in question were a part of a shipment of electrical goods that the plaintiff had imported from abroad. These were over a period of some days being taken from the wharf by different carriers. These carriers had, it seems, all been engaged by the defendant. In each case Howe supervised the loading, including the loading of Johnson's vehicle. He did this in association with a Mr. Badman, an employee of the plaintiff who was at the wharf throughout and who checked the delivery of the plaintiff's goods to the various carriers. When the goods were on the wharf they were apparently in the custody of the plaintiff's shipping agents. They were never, so far as the evidence shews, in the custody of the defendant. (at p239)

10. The Hobbs brothers were sub-contractors of the defendant to perform its contract with the plaintiff. They were strangers to that contract. They had no contract with the plaintiff. But the common law, deriving its concept of bailment largely from the civil law, has never subsumed bailment under the general law of contract. It is now beyond dispute that the relationship of bailor and bailee of a chattel can arise and exist independently of contract. By taking the plaintiff's goods into their physical possession when they were loaded on to their lorry the Hobbs brothers undertook the duties and obligations of a bailee for reward. Whether or not a sub-contractor of a bailee is himself properly called a bailee is a debatable question of terminology. But it is I think not a relevant question in this case because, as I have said, the evidence does not shew that the defendant itself ever became a bailee. However, whether that were so or not, the Hobbs brothers unquestionably became directly liable to the plaintiff if they, by their servants and agents, failed to take due care of the goods. This, the doctrine expounded in Morris v. C. W. Martin &Sons Ltd. (1966) 1 QB 716 , was made firmly binding for us by a judgment of the Privy Council last year : Gilchrist Watt &Sanderson Pty. Ltd. v. York Products Pty. Ltd. (1970) 1 WLR 1262; (1970) 44 ALJR 269 affirming the decision of the Supreme Court of New South Wales : York Products Pty. Ltd. v. Gilchrist Watt &Sanderson Pty. Ltd. (1968) 3 NSWR 551 . I need not elaborate this. I merely refer, as a pertinent statement of the rule, to passages in the judgment of Sachs J. in Learoyd Bros. &Co. v. Pope &Sons Ltd. (1966) 2 LlLR 142, at pp 147-148 . (at p240)

11. The obligation of a carrier as bailee is to exercise due care, skill and diligence for the safety of chattels entrusted to him. If he fails to deliver them safely at the end of the bailment, that is evidence of a failure to perform his duty to exercise due care of them. He can rebut this by shewing that their loss or damage was not the result of any default on his part. But to escape liability he must establish that. The burden lies on him. That this is the rule of the common law has been asserted in many cases in England extending now over more than a century. I need not cite them all. Cogent statements are that of Lord Halsbury, which Buckley L.J. quoted in Joseph Travers &Sons v. Cooper (1915) 1 KB 73, at p 88 :

"It appears to me that here there was a bailment made to a particular person, a bailment for hire and reward, and the bailee was bound to show that he took reasonable and proper care for the due security and proper delivery of that bailment; the proof of that rested upon him."

And the words of Buckley L.J. himself in that case:

"The defendant as bailee of the goods is responsible for their return to their owner. If he failed to return them it rested upon him to prove that he did take reasonable and proper care of the goods, and that if he had been there he could have done nothing, and that the loss would still have resulted. He has not discharged himself of that onus."

Recent statements by the Court of Appeal of this rule may be found in Houghland v. R. R. Low (Luxury Coaches) Ltd. (1962) 1 QB 694 and in Global Dress Company Ltd. v. Boase &Co. Ltd. (1966) 2 LlLR 72 . Australian decisions to the same effect are cited in the judgments in the Supreme Court in this case and I need not cite them all here. Fairbairn v. Miller (1918) VLR 615 is a good example. The same rule has been applied in New Zealand : Wilson v. New Zealand Express Co. Ltd. (No. 3) (1924) NZLR 890 , and in some jurisdictions in the United States : see especially Hoel v. Flour City Fuel and Transfer Co. (1919) 175 NW 300 . This rule has been seen as an anomaly. It is suggested that a carrier's failure to deliver goods in accordance with his contract is simply an illustration of a res ipsa loquitur : that is an evidentiary fact from which, in the absence of an explanation, an inference can be drawn of default on the part of the carrier, but that the ultimate onus is upon the plaintiff and that it never shifts. This proposition would be irrefutable if the rights of the parties depended simply on a contract to carry with due care. But that, it seems, is not so when goods having been delivered into his custody, the carrier has assumed the duties of a bailee for reward. An explanation of the apparent anomaly may well be that the duty of a bailee to use due care does not arise from contract or from tort. It could in former times have been asserted in either assumpsit or in case : but it is now generally recognized as sui generis. If the matter be put in terms of an implied undertaking or promise by the bailee, it is that he will re-deliver the goods to the bailor or whoever he appoints to receive them, except he, the bailee, be prevented from doing so by events not caused by negligence on his part, proof of the exception being upon him. Seen in this way, the burden that is put upon a bailee of exonerating himself when he fails to re-deliver the goods is simply a peculiar incident of the law of bailment. I accept the analysis that Sholl J. made after a survey of the authorities in his judgment in Fankhauser v. Mark Dykes Pty. Ltd. (1960) VR 376 . I appreciate that the second count of the plaintiff's declaration tenders an issue of fact to be proved by the plaintiff. I realize too that to say that the bailee must exonerate himself when the facts raise a prima facie inference of negligence may well seem anomalous when set alongside the doctrine that this Court has established for Australia of the onus of proof in cases when res ipsa loquitur is put forward : as in Anchor Products Ltd. v. Hedges (1966) 115 CLR 493 . And I recognize that some judgments in which the onus is said to be on the carrier to negative negligence are equivocal. For example, in the New Zealand case to which I have referred Reed J. placed the onus of proof on the carrier, quoting the decision of the New Zealand Court of Appeal in Aurora Trading Co. Ltd. and Jackson v. Nelson Freezing Co. Ltd. (1922) NZLR 662 . Yet he went on to refer (1924) NZLR 890, at p 896 to cases in which "a reasonable explanation of the loss was given, which caused the onus to shift to the plaintiff to establish negligence. And that no doubt", he said, "is the law". And in the United States there have been cases in which a loss of articles bailed has been taken to be a res ipsa loquitor. One explanation that has been put forward is that an inference of negligence arises if the loss be not explained by the bailee, the burden of adducing explanatory evidence being on him because the facts are peculiarly within his knowledge and not within the knowledge of the bailor. However, despite all these countervailing considerations I think that the rule as to the onus, being an incident of the law of bailment, is too firmly established to be shaken by demands for logical consistency with the consequences of res ipsa loquitur in other circumstances. (at p242)

12. If I thought that the defendant had become a bailee of the goods, I would, for the reasons I have given, agree with the learned judges of the Supreme Court that it was for it, the defendant, to negative negligence as the cause of the accident ; and then, because for reasons that I gave in Da Costa v. Cockburn Salvage &Trading Pty. Ltd. (1970) 124 CLR 192 , I would gravely hesitate to say that the learned trial judge was wrong, especially as two other members of the Supreme Court were of the same opinion. The question would be whether anything which would have avoided the accident, and which ought reasonably to have been done, was not done. If that was left in doubt the bailee would be liable. But, as I do not think that the defendant was a bailee, this is in my view irrelevant. It would be the relevant onus if the plaintiff had sued the Hobbs brothers directly as bailees, or had sought to amend this action to sue them in the alternative. But neither of these courses was pursued. It is now presumably too late for either, as any claim by the plaintiff against the Hobbs brothers is statute barred : see The Commonwealth v. Temple (1949) 49 SR (NSW) 373, at pp 376-377 and cases there cited. The Hobbs brothers are therefore only liable if the defendant be liable, and then only to indemnify it. I therefore turn back to the position of the defendant under the contract it made with the plaintiff. (at p242)

13. Although the Hobbs brothers were independent contractors, the defendant is, by well-established common law rules, liable for their negligence in relation to the carriage of the plaintiff's goods. That is because the defendant impliedly promised the plaintiff that the goods would be carried to their destination with due care. If it procured someone else to perform the carriage for it, it became liable for his, the sub-contractor's negligence : Doolan v. Midland Railway Co. (1877) 2 App Cas 792 ; John v. Bacon (1870) LR 5 CP 437 ; Machu v. London and South-Western Railway Co. (1848) 2 Ex 415 (154 ER 554) . The rationale of this may be debatable. But I think that Professor Atiyah, who discusses it in his book Vicarious Liability in the Law of Torts (1967) (at pp. 361-362), rightly describes it as a form of vicarious liability. In Riverstone Meat Co. Pty. Ltd. v. Lancashire Shipping Co. Ltd. (1961) AC 807, at p 865 Lord Radcliffe spoke of it as "the carrier's responsibility for the diligence of all those whom he employs to discharge his own primary duty". I think therefore that the plaintiff would be entitled to recover damages from the defendant if it proved that the accident occurred by negligence for which the Hobbs brothers were responsible either because their vehicle was negligently driven, or because there had been negligence in maintaining it so that it was not in a serviceable condition. But to establish liability on the part of the defendant it would be necessary for the plaintiff to prove this negligence. The onus was on it. It could not found its case on the onus that a bailee has ; for the defendant was not a bailee. It could claim that the fact that the vehicle ran off the road spoke for itself of negligence, and called for an explanation. But the explanation of the accident in a broken axle left it upon the plaintiff to prove that this was the result of negligence. The mere fact that the mechanism of a vehicle fails does not itself shew that the owner or driver was negligent. No doubt a failure to maintain a vehicle in good order may in some cases amount to negligence. But even a common carrier of passengers is not to be held responsible for the consequences of a latent defect in his vehicle not discoverable by reasonable inspection : Readhead v. Midland Railway Co. (1869) LR 4 QB 379 ; Webb v. Cassidy (1907) 27 NZLR 489 . I need not rehearse the evidence. It makes it abundantly clear that, the onus being on the plaintiff to prove negligence, the plaintiff's case failed. The appeal should therefore be allowed. (at p243)

OWEN J. The facts and the relevant evidence are set out in the judgment of the Chief Justice, which I have had the advantage of reading. I agree with him that the evidence established that the non-delivery of the goods was not due to any negligence on the part of the carrier. The fact that the fracture of the axle was a "clean" and a "fresh" break seems to me to dispose of any suggestion that there may have been a pre-existing crack in it which might have been discovered before the vehicle was used for the carriage of the goods in question. (at p244)

2. I would allow the appeal. (at p244)

Orders

Appeals allowed with costs. In each matter judgment of the Supreme Court of New South Wales (Court of Appeal Division) set aside and in lieu thereof order that the appeals to that court be allowed with costs. Verdicts and judgments returned and entered for the plaintiff against the defendant and for the defendant against the third party set aside and in lieu thereof verdict and judgment to be returned and entered for the defendant in the plaintiff's action and for the third party in the defendant's third party claim.