K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd

Case [1985] HCA 48


HIGH COURT OF AUSTRALIA

Gibbs C.J., Mason, Brennan, Deane and Dawson JJ.

K. &S. LAKE CITY FREIGHTERS PTY. LTD. v. GORDON &GOTCH LTD.

(1985) 157 CLR 309

1 August 1985

Contract—Statutes

Contract—Carriage of goods—Duties and liabilities—Special contracts—Exemption clauses—Contracts by which persons contract out of remedies for negligence of other persons driving motor vehicle declared void by statute—Third party claim for property damage—"Person"—Motor Vehicles Act 1959(S.A.), s. 133. Statutes—Construction—Divisions and headings—Section operating independently of other sections in Part—Heading of Part.

Decisions


GIBBS C.J.: I have had the advantage of reading the reasons for judgment prepared by my brother Deane and am able to express quite shortly my reasons for agreeing in the conclusion that he has reached.

2. The question for decision is whether s.133 of the Motor Vehicles Act 1959 (S.A.), as amended, applies to a contract whereby a company which consigned goods for carriage agreed that the carrier should not "in any circumstances (except where any statute otherwise required) be under any liability whatever (whether in contract tort or otherwise) for any loss of or damage to ... the goods ... nor for any consequential loss ... whether such loss damage ... or consequential damage is caused or alleged to have been caused by a negligence (sic) or wrongful act or default of the carrier or its servants or agents or sub-contractors or the servants or agents of any sub-contractors or by any other cause whatever". Section 133 provides as follows:

"Any contract (whether under seal or not) by
virtue of which a person contracts in advance out of any right to claim damages or any other remedy for the negligence of any other person in driving a motor vehicle shall to that extent be void."


3. The question of construction which arises is a difficult one. On the one hand, the words of s.133 are clear and unambiguous: they apply to any contractual provision by which a person contracts out of any right to claim damages for the negligence of any other person in driving a motor vehicle, whether the negligence has resulted in death or bodily injury, or damage to property, or all of those things. On the other hand, Pt.IV of the Act, in which s.133 appears, is headed "THIRD PARTY INSURANCE" and reveals as its principal purpose the effectuation of a scheme (which applies throughout Australia by virtue of similar legislation in other States and Territories) designed to ensure that a person who recovers damages in respect of death or bodily injury caused by or arising out of the use of a motor vehicle shall be able to recover those damages either from an insurer or, if the vehicle is uninsured, from a nominal defendant. As part of the scheme, it is required that in respect of all motor vehicles registered or, subject to exceptions, driven on a road, there shall be in force a policy of insurance which insures the owner and any driver in respect of all liability that may be incurred…

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AGLC
K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd [1985] HCA 48
Case
[1985] HCA 48
Decision Date

CaseChat Overview and Summary

The High Court of Australia considered an appeal by K & S Lake City Freighters Pty Ltd (the appellant) against a decision of the Supreme Court of South Australia, which had dismissed its appeal from a judgment of the Local Court. The dispute concerned the appellant's liability for goods damaged while in the possession of the respondent, Gordon & Gotch Ltd, which operated a wholesale newsagency. The appellant, a carrier, had contracted with the respondent to transport newspapers and magazines. The goods were damaged by water during transit, and the respondent sought to recover the value of the damaged goods from the appellant.

The central legal issue before the High Court was whether the appellant, as a carrier, could rely on a clause in its contract with the respondent that sought to limit its liability for loss or damage to goods. Specifically, the court had to determine whether this exclusion clause was effective in exempting the appellant from liability for the damage caused by the negligence of its employees. The court also considered the application of the principles of bailment and the extent to which a bailee could contract out of liability for their own negligence.

The High Court, by majority, held that the exclusion clause was not effective to protect the appellant from liability. The majority reasoned that the clause, when construed in light of the surrounding circumstances and the nature of the contract, did not clearly and unambiguously exclude liability for damage caused by the negligence of the carrier's servants. The court applied the principle that exclusion clauses must be construed strictly, and any ambiguity will be resolved against the party seeking to rely on the exclusion. Furthermore, the court affirmed that a bailee cannot generally contract out of liability for their own negligence unless the exclusion is expressed in the clearest possible terms.

The appeal was dismissed, and the judgment of the Supreme Court of South Australia was affirmed.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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