Malaysia International Shipping Corporation Berhad v VISA Australia Pty Ltd

[2003] VSCA 64

SUPREME COURT OF VICTORIA

COURT OF APPEAL

No. 7081 of 2000

MALAYSIA INTERNATIONAL SHIPPING CORPORATION BERHAD
	Appellant
v.
VISA AUSTRALIA PTY. LTD.	Respondent

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JUDGES:	PHILLIPS, BUCHANAN and CHERNOV, JJ.A.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	8 May 2003
DATE OF JUDGMENT:	30 May 2003
MEDIUM NEUTRAL CITATION:	[2003] VSCA 64

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Contract – Carriage of goods by sea – Bill of lading in standard form – Duty to return containers promptly after unpacking – Liability for late return cast upon "merchants" – Containers delivered to consignee and subsequently delivered unopened to consignee’s own customers – Whether liability for late return of containers imposed upon consignee – Meaning of "merchant" – Summary judgment for defendant consignee – Plaintiff’s construction of bill of lading bound to fail – R.S.C. Chapter I Rule 23.03.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr P.D. Santamaria, S.C. with Mr M.N.C. Harvey	Middletons
For the Respondent	Mr M. Thompson	Behan & Speed

PHILLIPS, J.A.:

1. I agree with Buchanan, J.A.

BUCHANAN, J.A.:

1. The appellant carried goods to the ports of Melbourne and Sydney in containers which it supplied.  The appellant issued a number of waybills and bills of lading for the carriage of the containers.

1. In this proceeding, the appellant alleged that the respondent was the holder of the waybills and bills of lading, the consignee and receiver of the goods in the shipping containers and was entitled to possession of the bill of lading and the waybills or the goods referred to therein and demanded and took delivery of the goods referred to in the bills of lading and waybills.

1. The appellant sought to recover charges from the respondent for the late return of the containers pursuant to clause 13(4) of the bills of lading and waybills, which provided:

"(4)If Containers supplied by or on behalf of the Carrier are unpacked at the Merchant's premises, the Merchant is responsible for returning the empty Containers, with interiors brushed and clean, to the point or place designated by the Carrier, his servant or agents, within the time prescribed.  Should a Container not be returned within the prescribed time, the Merchants shall be liable for any demurrage, loss or expense which may arise from such non-return."

The term "carrier" referred to the appellant.  The term "merchant" was defined in clause 1 as follows:

"'Merchant' includes the Shipper, Holder, Consignee, Receiver of the Goods, any person owning or entitled to the possession of the Goods or of this Bill of Lading and anyone acting on behalf of any such person."

The time prescribed for returning the containers and the rates of demurrage were set out in a notice displayed at the appellant's premises.

1. The respondent applied for summary judgment pursuant to R.23.03.  The

application was supported by an affidavit by a director of the respondent, who swore that the respondent acted as a freight forwarder.  Upon arrival at each port, after carriage by the appellant was complete, the containers were carried by others than the appellant to premises owned, operated or nominated by the respondent's clients.  Until they were received by the respondent's clients, the containers remained sealed and unopened.  This account was not challenged by the appellant.  The respondent argued that, although it was the consignee of the goods, and thus fell within the definition of "merchant", the liability to pay demurrage was imposed only upon those at whose premises the containers were unpacked, in this case the customers of the respondent.  For its part, the appellant contended that the liability for the demurrage, loss or expense arising from the failure to return containers was imposed upon all or any of the persons answering the descriptions contained in the definition of "merchant".

1. The trial judge held that the "merchants" upon whom clause 13(4) sought to impose liability for demurrage, loss or expense arising from the failure to return a container was the merchant referred to in the first sentence of the sub-clause at whose premises the container was unpacked and whose failure to return the containers caused the demurrage, loss or expense to be incurred.  His Honour rejected an argument, based upon the plural, "merchants", that anyone falling within the description of "merchant" in the definition was liable for demurrage, provided only that that person was one against whom the liability could be enforced.  The judge thought the plural, "merchants", was another of the several typographical errors to be found in the printed form of the contract.  In other terms of the contract express words were used to make it clear that "merchant" meant all or any of the persons falling within the definition.  The fact that the liability for demurrage could not be enforced against the customers of the respondent did not compel a different construction of the clause.  The bills provided that the contracts were to be governed by Malaysian law "or, at the option of the carrier, … according to English law".  The parties were agreed that in this instance the bills were to be construed in accordance with the law of Victoria.  The judge pointed out that it was possible that under Malaysian law the contract could be enforced despite lack of privity.  There was no evidence on the point before the Court.

1. On appeal, counsel for the appellant, who did not appear below, advanced another construction, which was not based upon a distinction between the word "merchant" in the first sentence of the sub-clause and "merchants" in the second sentence or upon the imposition of the obligation to return brushed and cleaned containers and the obligation to pay demurrage upon different persons.  He submitted that the opening words of the sub-clause, "If Containers supplied by or on behalf of the Carrier are unpacked at the Merchant's premises", together with the definition of "merchant", were sufficiently wide to encompass unpacking containers at the premises of the respondent's customers.  The remainder of the sub-clause was concerned with the consignee, who was responsible for the return of the empty containers with interiors brushed and cleaned and was liable to pay demurrage if that obligation was not met, for that part of the sub-clause imposing obligations dealt only with those who were bound by the contract of carriage.

1. In my opinion, this construction does not avail the appellant. The words "merchant" and "merchants" wherever they appear in the sub-clause mean those persons falling within the definition who are parties to the contract of carriage or are otherwise subject to its obligations or entitled to rights under it by negotiation of the bills of lading or waybills or the transfer of rights pursuant to s.8 of the Sea-Carriage Documents Act 1998. I do not think that it is possible to view the word "merchant" where it first appears in the sub-clause as a reference to any person answering one or other of the descriptions in the definition and then to regard "merchant" when next appearing and "merchants" as limited to those bound by the contract of carriage. The respondent's customers were strangers to the contracts of carriage and acquired no rights under the contracts. The contracts terminated upon the arrival of the goods at the container yards in the ports of Melbourne and Sydney. Accordingly, the condition upon which the operation of clause 13(4) depended, namely, the unpacking of the containers at the premises of the merchant, was not fulfilled.

1. The respondent argued that this view of the sub-clause left the appellant remediless when its containers were not returned, at least remediless as far as the contracts of carriage were concerned, although not without tortious remedies such as detinue and conversion.  The answer lies in the appellant's own hands.  If, upon the production of a waybill or a bill of lading, it releases the goods and chooses to allow the consignee to continue to use its containers to transport goods to the respondent's customers, it is able to do so on the basis that the consignee enters into a contract obliging it to guarantee the return of the brushed and cleaned containers.

1. I consider there is some force in the submission made by counsel for the respondent that where all the facts relevant to a question of construction are known and where the plaintiff foregoes no advantage by being denied a trial, the question can be resolved on a summons by a defendant under R.23.03 as if the hearing of the summons were the trial of the proceeding.  A trial judge could be in no better position to decide the question.  It is not, however, necessary for me to go so far.  In my view, the construction of the sub-clause advanced by the appellant upon which the  claim for demurrage depends, is "absolutely hopeless"[1] or "bound to fail".[2]  The fact that that conclusion became clear once the matter had been fully agued does not preclude the summary determination of the proceeding.[3]

   [1]Dey v. Victorian Railways Commissioners (1948) 78 C.L.R. 62 at 90-1 per Dixon, J.

   [2]Coles Myer Ltd v. Bowman [1996] 1 V.R. 457 at 459 per Charles, J.A.

   [3]General Steel Industries Inc. v. Commissioner for Railways (N.S.W.) (1964) 112 C.L.R. 125 at 130 per Barwick, C.J.

1. I would dismiss the appeal.

CHERNOV, J.A.:

1. I agree with Buchanan, J.A. that, for the reasons given by him, the appeal should be dismissed.

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