Matthew Short & Associates Pty Ltd v Riviera Marine (International) Pty Ltd

[2001] NSWCA 281

CITATION:	Matthew Short & Associates Pty Ltd v Riviera Marine (International) Pty Ltd and Anor [2001] NSWCA 281
FILE NUMBER(S):	CA 40616/00
HEARING DATE(S):	9 July 2001
JUDGMENT DATE:	30 August 2001
PARTIES :	Matthew Short & Associates Pty Ltd (Appellant) Riviera Marine (International) Pty Ltd (First Respondent) R A Campbell Transport Pty Ltd (Second Respondent)
JUDGMENT OF:	Meagher JA at 1; Heydon JA at 2; Ipp AJA at 104

LOWER COURT JURISDICTION :	District Court
LOWER COURT FILE NUMBER(S) :	DC 1249/98
LOWER COURT JUDICIAL OFFICER :	Mahoney DCJ

COUNSEL:	Mr N C Hutley SC/Mr I G Roberts (Appellant) Mr B A J Coles QC/Mr J G Duncan (First Respondent) Mr L J W Aitken/Ms S A Lovett (Second Respondent)
SOLICITORS:	Minter Ellison (Appellant) Anderson & Sjoquist (First Respondent) Cowley Hearne Lawyers (Second Respondent)
CATCHWORDS:	Bailment - Sub-bailment - Possession of goods - Liability for damage to goods - Whether existence of legal relationship of bailment - Whether existence of "possession" sufficient to create legal relationship of bailment - Whether sub-bailment existed - Where boat manufacturer contracted with a company to transport a boat to a freighter, and the company sub-contracted with a sub-contractor which negligently damaged the boat - Contracts - Construction of exclusion of liability clause - Construction of indemnification for liability clause - Where boat manufacturer contracted with a company to transport a boat to a freighter, and the company sub-contracted with a sub-contractor which negligently damaged the boat - Where contract between company and sub-contractor contained exclusion of liability and indemnification of liability clauses - Contracts - Commercial Contract - Sale of Goods - Transfer of ownership of goods - Whether plaintiff had legal ownership of goods at time that goods were damaged so that plaintiff had standing to sue - Timing of transfer of property - Intention of parties re timing of transfer - Where boat manufacturer contracted with a company to transport a boat to a freighter, and the company sub-contracted with a sub-contractor which negligently damaged the boat - Sale of Goods Act 1923 (NSW), s 23 - D
LEGISLATION CITED:	Carrier's Liability Act 1967 (Qld) Law Reform (Miscellaneous Provisions) Act 1946 Sale of Goods Act 1896 (Qld) Sale of Goods Act 1923 (NSW)
CASES CITED:	Arcweld Constructions Pty Ltd v Smith (McInerney J, Supreme Court of Victoria, unreported, 17 September 1968) Allison v Bristol Marine Insurance Co Ltd (1875) 1 App Cas 209 Browne v Hare (1859) 4 H & N 822 Carlos Federspiel & Co SA v Charles Twigg & Co Ltd [1957] 1 Lloyd's Rep 240 Colley v Overseas Exporters [1921] 3 KB 302 Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500 Emery Air Freight Corporation v Merck Sharpe & Dohme (Australia) Pty Ltd (1999) 47 NSWLR 696 Galbraith and Grant Ltd v Block [1922] 2 QB 155 Hobbs v Petersham Transport Co Pty Ltd (1971) 124 CLR 220 Metaalhandel JA Magnus BV v Ardfields Transport Ltd [1988] 1 Lloyd's Rep 197 Re An Arbitration Between Shipton, Anderson & Co and Harrison Bros & Co [1915] 3 KB 676 Re Anchor Line (Henderson Brothers) Ltd [1937] Ch 1 Stock v Inglis (1884) 12 QBD 564 Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 The Pioneer Container [1994] 2 AC 324 Wait v Baker (1848) 2 Ex Ch 1 Ward (RV) Ltd v Bignall [1967] 1 QB 534
DECISION:	See para 103

THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40616/00
DC1249/98

MEAGHER JA
HEYDON JA
IPP AJA

30 August 2001

MATTHEW SHORT & ASSOCIATES PTY LTD v

RIVIERA MARINE (INTERNATIONAL) PTY LTD and

R A CAMPBELL TRANSPORT PTY LTD

Bailment - Sub-bailment - Possession of goods - Liability for damage to goods - Whether existence of legal relationship of bailment - Whether existence of “possession” sufficient to create legal relationship of bailment - Whether sub-bailment existed - Where boat manufacturer contracted with a company to transport a boat to a freighter, and the company sub-contracted with a sub-contractor which negligently damaged the boat

Contracts - Construction of exclusion of liability clause - Construction of indemnification for liability clause - Where boat manufacturer contracted with a company to transport a boat to a freighter, and the company sub-contracted with a sub-contractor which negligently damaged the boat - Where contract between company and sub-contractor contained exclusion of liability and indemnification of liability clauses

Contracts - Commercial Contract - Sale of Goods - Transfer of ownership of goods - Whether plaintiff had legal ownership of goods at time that goods were damaged so that plaintiff had standing to sue - Timing of transfer of property - Intention of parties re timing of transfer - Where boat manufacturer contracted with a company to transport a boat to a freighter, and the company sub-contracted with a sub-contractor which negligently damaged the boat - Sale of Goods Act 1923 (NSW), s 23

The plaintiff/first respondent (“Riviera”) contracted to manufacture a motor cruiser (“34/18”) and sell it to a foreign ship broker. Riviera procured the first defendant/appellant (“Short”) to book space for 34/18 on a freighter leaving the Port of Botany. Short was procured by Riviera according to a standard pattern of previous dealings, according to which Riviera would transport motor cruisers by its own semi-trailer to a parking area where a mobile crane operator arranged by Short would lift the motor cruiser onto a low-loader. The low-loader would be provided by Short with relevant documentation and the low-loader would transport the cruiser onto the wharf alongside the freighter. The second defendant/second respondent (“Campbell”) acted as “Carrier” for Short by providing low-loaders and drivers under the terms of “Conditions of Carriage”, dated 12 August 1996.

Short booked 34/18 to be shipped upon a freighter due to depart on 12 August 1997. On that day, 34/18 was lifted onto Campbell’s low-loader, but the driver then drove negligently beneath an archway causing the significant damage to 34/18. As a result of the damage, Riviera was unable to export 34/18 to the foreign ship broker and instead exported a different cruiser.

Riviera brought a claim for damages against Short and Campbell. On 19 May 2000 orders were made that there be verdict and judgment in favour of the Riviera against Short and Campbell in the sum of $112, 632.81, which represented the cost of repairing 34/18 plus interest. Short was ordered to indemnify Campbell under a clause contained within the contract between them (clause 21). Short appealed, and Campbell cross-appealed.

Held by Heydon JA (Meagher JA and Ipp AJA concurring), allowing the appeal and dismissing the cross-appeal:

Campbell’s negligence.

(a) If Riviera was the owner of 34/18 at the time of the accident,

Riviera and Short were not at that time in a legal relationship of bailment, since Short did not have “possession” of 34/18 as distinct from having some other form of relationship with 34/18.

i. The presence of and supervision by Mr Short at the time of loading 34/18 onto the low-loader do not establish possession by him.

ii. Mr Short was only in “control” of 34/18 for a short time, if at all.

iii. Mr Short’s conduct after the accident did not establish
possession by him.

(b) Short was not in breach of any duty to Riviera because

Campbell was an apparently capable carrier.

(c) Riviera’s contention on appeal, that it had not contracted
with Short for Short to arrange for others to carry the goods, should be rejected. It was not pleaded by Riviera at first instance, where it might have been met by evidence.
Suttor v Gundowda Pty Ltd (1950) 81 CLR 418, applied.

(a) The Sale of Goods Act 1923 (NSW) should be assumed to be
applicable.

(b) Since the contract was for future goods, the time fixed by s 23 r 5 of the Sale of Goods Act can be replaced by the time of earlier payments if the parties so intended. It was not the intention of Riviera and the foreign ship broker to transfer property in 34/18 at the time of payment on 8 August 1997. The contemporary practices of the parties and the documents they used to carry out the transaction indicate an intention for property to pass when 34/18 was loaded onto the freighter.

(c) Property did not pass when 34/18 came into the possession of

Short or Campbell by reason of the operation of s 23 r 5 of the Sale of Goods Act. The freighter owner was the relevant “carrier” for the purposes of s 23 r 5(2).

i. Only delivery to the freighter owner was for “the purpose of transmission to the buyer”.

ii. It was Short’s practice to inform buyers of the details of
freighters but not of the land-based transportation of the motor cruisers.

iii. The cost and responsibility for arranging the land-based

transportation of 34/18 fell upon the vendor rather than the purchaser.

3. There was no sub-bailment by Short to Campbell on terms, which
would defeat Riviera’s claim against Campbell.

(a) Short was not a bailee at the time of the accident, therefore

Campbell was not a sub-bailee.

(b) There was insufficient evidence that Riviera consented to any
such terms (ie cl 3(1) of the “Conditions of Carriage” between Short and Campbell).

Carriage” between Short and Campbell does not defeat Riviera’s claim against Campbell.

(a) Although Short contracted with Campbell in fulfilment of its duties to Riviera, Short nonetheless contracted with Campbell as
principal, not as agent for Riviera.

(b) The evidence does not support the contention that Riviera’s

witnesses at trial thought it likely that the Short-Campbell contract could contain exclusion clauses.

(a) An application of the principles of construction for exclusion and
limitation clauses, leads to clause 21 being applied to the bailed “goods”.
Darlington Futures Ltd v Delco Autstralia Pty Ltd (1986) 161 CLR 500, applied.

(b) The application of clause 21 to the bailed “goods” would not
render clause 3 superfluous, since clause 3 may apply to “non-delivery” whereas clause 21 does not. Nor would it cause the two clauses to conflict.

1. Appeal allowed.

2. The verdict and judgment with costs of the trial judge in favour of the first respondent/plaintiff against the appellant/first defendant is set aside.

3. Verdict for the appellant/first defendant against the first respondent/plaintiff.

4. The first respondent/plaintiff is to pay the appellant’s/first defendant’s costs of the appeal and of the proceedings below.

5. The first respondent/plaintiff is to have a certificate under the Suitors Fund Act in relation to its costs of the appeal if entitled.

6. The cross appeal is dismissed.

7. The cross appellant/second defendant is to pay the second cross respondent’s/plaintiff’s costs of the cross appeal.

8. Note that these orders do not affect the verdict and judgment of the trial judge in favour of the first respondent/plaintiff against the second respondent/second defendant in the sum of $112,632.81 with costs.

9. Note further that these orders do not affect:

(a) the trial judge’s verdict and judgment in favour of the second respondent/second defendant against the appellant/first defendant on the second respondent’s/second defendant’s cross claim;
(b) the trial judge’s order pursuant to that verdict that the appellant/first defendant fully indemnify the second respondent/second defendant in the total amount of the verdict and judgment plus costs awarded to the first respondent/plaintiff; or
(c) the trial judge’s order that the appellant/first defendant pay the second respondent’s/second defendant’s costs of that cross claim.

10. Order the appellant/first defendant to indemnify the second respondent/second defendant against:

(a) the second respondent’s/second defendant’s costs of the appeal and cross-appeal;
(b) the second cross respondent’s/plaintiff’s costs of the cross-appeal to the extent that the second respondent/second defendant has been ordered to pay them.

11. Liberty to apply.

THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40616/00
DC 1249/98

MEAGHER JA
HEYDON JA
IPP AJA

30 August 2001

MATTHEW SHORT & ASSOCIATES PTY LTD v
RIVIERA MARINE (INTERNATIONAL) PTY LTD and
R A CAMPBELL TRANSPORT PTY LTD
JUDGMENT

1    MEAGHER JA: I agree with Heydon JA.

Background
This is an appeal from orders made by Mahoney DCJ on 19 May 2000, after a trial on 16-17 May 2000, that there be a verdict and judgment in favour of the plaintiff/first respondent (“Riviera”) against the first defendant/appellant (“Short”) and the second defendant/second respondent “(Campbell”) in the sum of $112,632.81 and various related orders. The sum of money reflected the cost (with interest) of repairing a motor cruiser manufactured by Riviera and damaged while being moved on a truck owned by Campbell pursuant to a contract between Campbell and Short.

3    Riviera carried on business at Labrador, Queensland, as a manufacturer of motor cruisers. Many of its motor cruisers were exported through the Port of Botany in Sydney to overseas small ship brokers. One of these brokers was Mr Richard Boland, who conducted his business under the name Richard Boland Yacht Sales in California.

4    Where motor cruisers manufactured by Riviera were exported through the Port of Botany, a regular pattern of conduct operated. Riviera would procure Short to book space on a freighter leaving the Port of Botany. Riviera, using its own semitrailer driven by an employee, would transport the motor cruiser to a parking area some hundreds of metres from the gateway of the Port of Botany. By reason of industrial conditions within the Port of Botany, it was not open to Riviera to take the motor cruiser into the Port of Botany alongside the freighter which was to transport the motor cruiser overseas except at prohibitive expense. However, Campbell was permitted to use its low-loader and driver to transport the cruiser onto the wharf alongside the freighter much more cheaply. Hence Riviera would procure Short to arrange for a mobile crane operator (in the present instance Botany Cranes) to be at the parking area together with a low-loader and driver (almost invariably supplied by Campbell, as it was in the present instance). The mobile crane would unload the cradle from the truck, unload the cruiser from the truck and position it in the cradle, place the cruiser and cradle on a flat rack (which is a shipping container sized steel base), and then lift the cruiser, cradle and flat rack onto the low-loader. Short would provide the driver of the low-loader with an “export receivable advice” (“ERA”), in triplicate: this was needed so that the low-loader with its load could pass through the gate and onto the wharf alongside the freighter.

5    By a document dated 12 August 1996, Short as “Consignor” and Campbell as “Carrier” agreed on Conditions of Carriage in relation to goods transported from the parking area to the freighter from time to time. Clause 3(1) provided:

“Subject to cll 18 and 20 hereof the carrier shall not be under any liability whether in tort or in contract for any loss of or damage to or misdelivery, delay in delivery, concealed damage, deterioration, contamination, evaporation, non-delivery of goods held in its care, custody or control, or any consequential loss arising therefrom howsoever caused including but not limited to any negligence or breach of contract by the carrier.”

Clause 21 provided:
“The Consignor will indemnify and keep indemnified the carrier or any other subcontractor, company, firm, person or body through whose hands the goods may pass against all claims for loss, damage, injury to any property or person arising from the carriage of the goods or the noncompliance with any special conditions and any laws, by-laws and regulations including but not being limited to those set out in clause 2 hereof and without limiting the generality of the foregoing will pay on demand to the carrier the full value of any other goods carried by or for the carrier and destroyed or damaged as a result of the carriage of the goods of the consignor or of any noncompliance as aforesaid.”

6    In mid 1997 Mr and Mrs Bill Smith, residents of the United States of America, caused Mr Boland to procure Riviera to build a motor cruiser conforming to particular specifications stipulated by the Smiths. That motor cruiser came to be known as 34/18. The relevant order, in the form of a “Build List” dated 25 June 1997, was signed by Mr Boland on 29 June 1997. Dealings between Riviera and Short on the one hand and Mr Boland on the other, like dealings between Riviera and Short, followed a standard pattern to be examined more closely later. Events in relation to the performance of the 34/18 contract followed that standard pattern until 34/18 was damaged as described below.

7    On 3 July 1997 Mr Short informed Mr Boland that one of the options for shipping 34/18 to California would be to book space on the “Direct Currawong”, leaving the Port of Botany on 12 August 1997.

8    On 4 July 1997 Mr Short informed Mr Boland, as was the fact, that he had booked 34/18 to be shipped on the “Direct Currawong” leaving on 12 August 1997.

9    On 16 July 1997 Mr Short again advised Mr Boland by fax that 34/18, together with another motor cruiser, was booked to be shipped on board the “Direct Currawong”, the estimated departure date still being 12 August 1997. In some respects the terms of that fax are important:

“Further to your fax of this afternoon, please find hereunder indicative costs to cover the 2 shipments as requested. (Riviera will be including transport to wharf Sydney/crane etc on their invoice as F.O.B.)
Ocean freight A$13975/R34 on 40 ft fr A$19180/R43

USA terminals + US$380/40 ft flat +US$4050/R43
(Flat) (US$1250/M3)
Surveyor A$450 A$450

Marine insurance (if required from US) additional upon request.

Both boats booked ex port Sydney per (ANZDL) Direct Currawong V322N ETD 12/8/97 with ETA 1/9/97 Oakland (water discharge).”

10    On 4 August 1997 Mr Short contacted Botany Cranes and requested them to supply a 28 tonne crane at 6am on 12 August 1997 at the parking area. On the same day he contacted Campbell and requested it to arrange for a flat rack to be present at 7am on 12 August 1997.

11    On 8 August 1997 Mr Boland arranged for funds for US$152,842.57, being the purchase price of 34/18, to be paid into an American bank account in the name of Riviera.

12    On 10 August 1997, 34/18 was loaded onto Riviera’s truck at Labrador. Shortly before, Mr C A Jones, Production Manager of Riviera, had informed Mr Matthew Short as to when 34/18 would be leaving Labrador.

13    Shortly after 6am on 12 August 1997, a Riviera truck arrived at the parking area at the Port of Botany with 34/18. The Botany Cranes mobile crane lifted 34/18 from the truck and placed it in the cradle. Mr Short then assisted Mr Barry-Cotter (a director of Riviera) and Mr Andrews (the employee of Riviera who had driven the truck from Labrador) to secure 34/18 to the cradle. The driver of the Campbell truck then positioned it close to 34/18. The crane then lifted the cruiser onto the flat rack, and Messrs Short, Barry-Cotter and Andrews lashed the cradle to the flat rack. These operations were complete by 7.40am.

14    Mr Short then completed three copies of an ERA in relation to 34/18 (parts of which had already been filled in by Campbell) and gave them to the Campbell truck driver. (The usual procedure was for the three copies to be given to a wharf representative; one signed copy would be returned, and this would be sent by Campbell to Short as proof of delivery). The Campbell truck driver then drove off in the direction of the freighter.

15    The driver negligently drove the truck beneath an archway. The superstructure of 34/18 struck a large metallic sign attached to the archway. This caused considerable damage to 34/18.

16    At about 8am an employee of Campbell told Mr Short of the accident. Mr Short arranged for Botany Cranes to bring its crane back so as to avoid disruption to traffic coming into the terminal at the Port of Botany. Short paid for the services of Botany Cranes in this respect and did not seek to claim the cost either from Riviera or Campbell.

17    Mr Boland and the Smiths were advised of the damage to 34/18. The Smiths were irate and said they did not want the cruiser to have repaired items on it, only new ones. It was decided not to supply Mr Boland with 34/18, but with a replacement cruiser called 34/14. This was shipped from Sydney on 2 September 1997.

The Pleaded Case

18    Against Short, Riviera claimed damages (being $94,451 incurred in repairing 34/18) on the basis of the following allegations in the Amended Ordinary Statement of Claim:

“7. At all material times the Plaintiff was the owner of a Riviera R34/018 cruiser (‘the Cruiser’).
8. In or about early August 1997, the Plaintiff and the First Defendant entered into a contract of bailment (‘the Agreement’) whereby it was agreed that the First Defendant would arrange for the loading of the Cruiser on board the vessel ‘Direct Currawong’ (‘the ship’) on 12 August 1997, for transport to San Francisco in the United States of America.
Particulars

The Agreement was partly express and partly implied. To the extent that the Agreement was express, it was partly in writing and partly oral. The written part of the Agreement consists of correspondence between the Plaintiff and the First Defendant. The oral part of the Agreement consists of a conversation between the Plaintiff by its employee and the First Defendant by its employee on or about August 1997. The substance of the conversation relevantly was that the Plaintiff asked whether the First Defendant would arrange for the loading of the Cruiser on board the ship on 12 August 1997, for transport to San Francisco in the United States of America and the First Defendant said it would. To the extent that the Agreement was partly implied, the implication arises from:

(a) the conversation between the Plaintiff and the First

Defendant already particularised;

(b) the previous course of dealing between the Plaintiff and
the First Defendant; and

(c) operation of law.

9. In the premises there were implied terms of the Agreement that:
(a) the First Defendant would be entitled to its usual charges,

or, alternatively, to fair and reasonable charges for the
arrangement of the loading of the Cruiser;

(b) the First Defendant would deal with the Cruiser safely;
and

(c) the First Defendant would not deal with the Cruiser nor
allow the Cruiser to be dealt with so as to endanger it or
the Plaintiff’s interest therein;

(d) the First defendant would give all necessary briefings and
instructions to the Second Defendant so as to meet the
First Defendant’s obligation under (b) and (c) above
including, but not limited to, briefing and instructing
drivers of the Second Defendant’s trucks to drive around
the overhead road sign.

10. In the premises, the First Defendant owed a duty to the Plaintiff to deal with the Cruiser safely and not allow the Cruiser to be dealt with so as to endanger it or the Plaintiff’s interest therein.
12. Pursuant to the Agreement, on 12 August 1997, the Plaintiff caused the Cruiser to be delivered to the First Defendant and the First Defendant accepted the Cruiser accordingly by removing the Cruiser from the vehicle of the Plaintiff.
17. In the premises, the First Defendant is in breach of the terms of the Agreement alleged in sub-paragraphs 9(b) and 9(c) and 9(d).
18. Further, and in the alternative, the First Defendant is in breach of the duty alleged in paragraph 10.”

19    In short, paragraph 8 alleged a contract of bailment; paragraph 9 alleged four implied terms in that contract; and paragraph 10 alleged that “In the premises” - i.e. the terms of the contract of bailment - Short owed a duty not to allow the cruiser to be dealt with so as to endanger it.

20    Short’s Defence put in issue the material allegations and denied any negligence on its part.

21    As against Campbell, Riviera claimed damages by reason of the following allegations:

“11. Pursuant to the Agreement, on or about 4 August 1997, it was agreed (‘the Sub-Agreement’) between the First Defendant and the Second Defendant that the First Defendant would deliver to the Second Defendant the Cruiser to be transported from the point of delivery to the wharf at Port Botany.
Particulars
The Sub-Agreement was partly express and partly implied. The express part of the Sub-Agreement consists of a facsimile letter dated 4 August 1997 from the First Defendant to the Second Defendant and the documents referred to therein. To the extent that the Agreement was implied, the implication arises from:
(a) the previous course of dealing between the First

Defendant and the Second Defendant; and

(b) operation of law.

13. Pursuant to the Sub-Agreement, on 12 August 1997, the First Defendant caused the Cruiser to be delivered to the Second Defendant by placing the Cruiser onto the vehicle of the Second Defendant and the Second Defendant accepted the Cruiser accordingly.
14. At all material times the Second Defendant owed a duty to the Plaintiff to exercise all due care, skill and diligence in dealing with and handling the Cruiser.
19. In the premises the Second Defendant is in breach of the duty alleged in paragraph 14.
Particulars of Second Defendant’s Breach
(a) failure to keep a proper lookout of the road ahead;
(b) failure to notice and observe the position of the sign;
(c) failure to avoid driving under the sign;
(d) failure to detour around the sign;
(e) failure to drive at a sufficiently low speed so as to permit

stopping at the moment of impact;

(f) failure to stop at the moment of impact.”

22    Campbell in its Amended Defence put in issue the material allegations. But it went further. It specifically put in issue Riviera’s allegation that it was entitled to sue as owner of 34/18. It also relied on clause 3 of the 12 August 1996 Conditions of Carriage, operative in contract as between it and Short, as a defence against Riviera on various bases.

23    Short cross-claimed against Campbell for indemnity or contribution. Campbell cross-claimed against Short, and in particular relied on clause 21 of the 12 August 1996 Conditions of Carriage.

The Trial Judge’s Reasoning

24    At the trial it was common ground that Campbell’s driver had been negligent and that the sum of $94,451 was a fair and reasonable sum for damages.

25    Many of the trial judge’s conclusions have not been challenged. There was no challenge to any of his findings of primary fact; nor to his rejection of the implied terms pleaded in paragraph 9(c)-(d) of the Statement of Claim; nor to his conclusion that the Law Reform (Miscellaneous Provisions) Act 1946 s 5 did not apply on the cross-claims.

26    As between Riviera and Short, the trial judge found:

(a) that Riviera was the owner of the goods at the time of the accident;

(b) that, since the implied terms alleged in paragraph 9(c)-(d) of the Statement of Claim were rejected, “Riviera’s claim in contract” failed;

(c) that another claim he identified, being a “claim in bailment”, succeeded on the basis that Mr Short’s conduct on 12 August in assisting with unloading and loading and in supplying the ERA “amounted to a taking of possession such as to justify the finding that Short was the bailee of 34/18 from Riviera and that Campbell became a sub-bailee from Short”.

27    As between Riviera and Campbell, the trial judge said that all “of the authorities point to the fact, and I do not understand it to have been argued before me to the contrary, that, in the light of such findings, both Short and Campbell are liable as bailee and sub-bailee respectively to Riviera for the damage caused by Campbell’s driver to 34/18.” He thus did not deal in terms with Campbell’s contention that it could rely on clause 3 of the Conditions of Carriage against Riviera: on that topic he summarised the submissions of Campbell and Riviera, but did not appear to make findings about them. However, one finding he made in relation to the cross-claims stands as an obstacle to Campbell’s success, namely that condition 3 is limited to claims in “contract or tort”, not “claims in bailment”.

28    On the cross-claims, after saying that the Law Reform (Miscellaneous Provisions) Act 1946 s 5 is not relevant to claims in bailment, he found that clause 21 of the Conditions of Carriage entitled Campbell to a full indemnity in relation to its liability to Riviera from Short.

The Key Issues

29    The essential fact is that an employee of Campbell negligently damaged 34/18. For that act of negligence Campbell would ordinarily be vicariously liable to Riviera unless there is some special reason to the contrary. In one sense the entire case turns on Campbell’s attempt to escape that liability and on Short’s attempt to escape a liability which, less directly, Riviera seeks to impose on it. Campbell’s first way of escaping liability was to allege that Riviera was not the owner at the time of the accident. Its second way of escaping liability was to rely on the trial judge’s findings that Short was a bailee and Campbell was a sub-bailee, and to contend that Riviera was bound by clause 3 of the Conditions of Carriage operating in the contract between Short and Campbell. Its third way of escaping liability was to contend that Riviera was bound by clause 3 because Short entered the contract with Campbell as agent for Riviera.

30    The case was argued on the basis that if, at the time when Campbell’s employee negligently caused damage to 34/18, Riviera were not its owner, Riviera would lack standing to sue. Logically that is the first issue, since if it were answered adversely to Riviera, the proceedings would fail. But it is convenient not to deal with that issue first. Rather it is desirable to deal with another issue which, though logically not anterior to it, overlaps with it factually. That issue turns on the question of what relationship Short had with 34/18, and is crucial to Riviera’s case against Short. After that issue and the ownership issue have been dealt with, the remaining questions will be considered.

Riviera’s Case Against Short: The Relationship Of Short With 34/18

31    The trial judge described Riviera’s submissions and his finding about them as follows (Red 46W-47O):

“First [Riviera’s counsel] submitted that the contract between Riviera and Short was for much more than mere forwarding agency duties. He pointed to the variety of tasks which Short carried out on behalf of Riviera in the course of reserving cargo space on a ship, notifying Boland and Riviera, coordinating the arrival of the crane and Campbell’s low-loader with Riviera’s truck carrying cruiser and cradle, attending observing and assisting with the transfer of the cruiser from Riviera’s truck to Campbell’s low-loader, arranging for the marine insurance assessor to be on site and supervise the lashing of 34/18 to the cradle so as to accommodate to the requirement of Boland, attend to the payment of both Botany Cranes and Campbell out of its own funds, receiving the bill of lading from the shipping company, and finally forwarding the documentation and its own account for the total of all invoices for payment by Riviera - not forgetting that it rounded up the Botany Cranes bill to the nearest $10 when doing so.
I accept his submissions that, on the evidence, Short was engaged in significantly more than being a mere forwarding agent.”

The trial judge then summarised further submissions by Riviera and made the following further finding as follows (Red 48R-49K):
“As learned counsel submitted on behalf of Riviera, there are different forms of possession. Some items can be held in the palm of the hand, the others are so big that they can be climbed on or sat in. In this case it has been submitted on behalf of Short that it did not take possession of 34/18 and did not assume control over it. On the evidence as to its size I am satisfied that Short, having been on site at the parking area on the morning of 12 August 1997 and carrying out the functions that he conceded he did, viz. being present and ensuring that everything went according to the arrangements he had put in place, assisting with the lashing, and finally furnishing Campbell’s driver with the ERA in triplicate - which only Short was able to do - amounted to a taking of possession such as to justify the finding that Short was a bailee of 34/18 from Riviera and that Campbell became a sub-bailee from Short.
All of the authorities point to the fact, and I do not understand it to have been argued before me to the contrary, that, in the light of such findings, both Short and Campbell are liable as bailee and sub-bailee respectively to Riviera for the damage caused by Campbell’s driver to 34/18.”

32    Short submitted:

(a) either that its sole role was to arrange for others to carry out acts in relation to 34/18, and that it never obtained possession of 34/18, or, alternatively

(b) that it did not at any time obtain physical possession of the cruiser, or that if it did, at most it obtained possession for a brief period which began when or soon after Botany Cranes lifted 34/18 off the Riviera launch and ended when or just before Botany Cranes lifted 34/18 onto the Campbell low-loader.

33    The first limb of the argument rested on the proposition that the only engagement upon which Short entered was to arrange for others to effectuate the movement of 34/18 from Riviera’s truck to Campbell’s low-loader. Once 34/18 had moved onto Campbell’s low-loader, Campbell became bailee and it was open to the owner of 34/18 to sue Campbell for breach of its duties as bailee. Short submitted that the finding that it assisted with the lashing of the cruiser ignored evidence that it was Riviera whom Short was assisting. Short submitted that it did not at any time take physical possession of the cruiser. Physical possession of the cruiser changed a number of times during the transfer from Riviera’s truck to the time of the accident as follows: Riviera was in possession while it carried the cruiser on its own semitrailer to the parking area; during the operation in which the mobile crane lifted the cruiser from the semitrailer to the ground and from the ground to Campbell’s low-loader the crane operator had possession; when the cruiser was placed by the crane operator on Campbell’s low-loader, possession passed to Campbell.

34    The second limb of the argument rested on the proposition that if, in the interval between the two periods when the crane was in operation and Botany Cranes had possession, Short had possession, that was a period of possession which was “fleeting”, merely an “accidental” part of carrying out the contractual engagement to arrange the movement of 34/18, but, more importantly, a period which terminated before Campbell obtained possession (not as sub-bailee, but as bailee) and caused the damage. It submitted that the fact that it played a role in complying with procedures within the Port of Botany by issuing an ERA in no way established that it took possession of 34/18. Short also submitted that the ERA was not a document of title, and that the handing of that document to Campbell’s driver was consistent with its role as a forwarding agent engaged to arrange carriage only.

35    Short further submitted that the trial judge fell into error by analysing Riviera’s case against Short as a case based on “contract” (which failed with the rejection of the implied term as pleaded in paragraph 9(c)-(d) of the Amended Statement of Claim) and a distinct “claim in bailment”. Short submitted that there was no distinct claim in bailment. The contract case alleged a “contract of bailment”; it alleged no more than an agreement by which Short “would arrange for the loading of” 34/18 on the “Direct Currawong”; that allegation was in effect demurrable because it did not allege a passing of possession; and there was no separate claim in bailment which did.

36    Riviera answered these submissions in two broad ways. First, it defended the trial judge’s conclusion that Short, by reason of what it agreed to do and did on 12 August 1997, had possession. Secondly, it contended that it had engaged Short “to procure the carriage of the goods, not simply to arrange for other people to do that, albeit it on terms that the actual carriage was to be performed by others”. Riviera cited Emery Air Freight Corporation v Merck Sharpe & Dohme (Australia) Pty Ltd (1999) 47 NSWLR 696 at [84]-[86] per Sheller JA. Riviera said that Short’s true contractual obligation was not to organise others to transport the goods, but itself to transport them, albeit by employing sub-contractors. Riviera did accept that the Amended Statement of Claim referred to “arranging” and said “if one were held to that it would be a difficult matter”. Riviera pointed to the following facts: there was no written agreement between Riviera and Short, Riviera did not seek to control which sub-contractors Short engaged or what they did, Short in fact selected and engaged the sub-contractors in its own name and did not advise Riviera of the terms of engagement.

37    Riviera further submitted:

“It is apparent that Short contracted as principal with the supplier of the crane. The crane invoices were addressed to Short and paid by Short. Short did not on-charge Riviera for the face value of the crane invoices; Short did not attach copies of the crane invoices to Short’s invoices to Riviera … .”

While Short did not attach copies of the crane invoices to Short’s invoices to Riviera, it is not true that Short did not on-charge Riviera for the face value of the crane invoices: it did, though not to the last cent.

38    Riviera further submitted:

“it is apparent that Short contracted as principal with the supplier of the low-loader truck. The low-loader truck invoices were addressed to Short and paid by Short. Short did not on-charge Riviera for the face value of the low-loader truck invoices; Short did not attach copies of the low-loader truck invoices to Short’s invoices to Riviera … .”

Again, while it is true that Short did not attach copies of the Campbell invoices to it to the invoices it sent to Riviera, it is not true that Short did not on-charge Riviera: it did, though not to the last cent. Thus the invoice sent by Short to Riviera in relation to the loaning of 34/14 on 2 September 1997 contained a charge by Botany Cranes of $460 for the crane and $720 for the low-loader, as well as $1,136 for Short’s efforts. The absence of invoices is not significant; what is significant is the separate incorporation of charges for the activity of Botany Cranes and Campbell.

39    Riviera also submitted:

“To the extent that the crane operators and the truck drivers were subject to instruction, they were subject to the instruction of Short: see crane invoice at Blue Book 106, which indicates that the crane was ‘to work as directed’. Further, Short seemingly had the only relevant contact with the drivers of the low-loaders providing the say-so to proceed in the terminal and supplying to the said drivers the required documentation.”

The statement in the Botany Cranes invoice in question “to work as directed at boat ramp Port Botany” does not necessarily mean anything more than that Botany Cranes was to be told which cruiser was to be moved from which truck to which low-loader.

40    Riviera relied on some vague evidence that it had “arranged” for Short to “do the work” and had asked Short “to perform a task in its entirety”. These loose phrases, however, do not point to any particular conclusion about whether Short had possession or whether Short had to do more than arrange for the sub-contractors to do the work.

41    Riviera submitted that Mr Short, not it, was in control of the operations pursuant to which 34/18 was moved from the Riviera truck to the Campbell low-loader. Riviera thus placed weight on the presence of Mr Short during the unloading and re-loading. Riviera submitted that this was significantly more than freight forwarding. Riviera also relied on Mr Short’s role in seeking to overcome the disruptive consequences of the accident, and on the fact that he paid Botany Cranes to do this without charging Riviera.

42    In short, as part of the second part of its argument, Riviera submitted that possession was not necessary. Riviera submitted that Arcweld Constructions Pty Ltd v Smith (McInerney J, Supreme Court of Victoria, unreported, 17 September 1968, pages 36-37) is authority for a proposition in effect put thus by McInerney J:

“When a principal has in his charge the goods or belongings of another in such circumstances that he is under a duty to take all reasonable precautions to convey them from point A to point B, then if he entrusts that duty to a servant or agent, he is answerable for the manner in which that servant or agent carries out his duty. If the servant or agent is careless so that the goods are damaged, the master is liable.”

Riviera submitted that in this case it was Short’s duty to take all reasonable precautions to convey the goods, and Short had entrusted it to Campbell. He submitted that that proposition was supported by Metaalhandel JA Magnus BV v Ardfields Transport Ltd [1988] 1 Lloyd’s Rep 197 at 202-203; Hobbs v Petersham Transport Co Pty Ltd (1971) 124 CLR 220 at 229 and 242-3 and Palmer, “Quasi-Bailment and Possessory Title” (1995) 3 Tort L Rev 186 at 192-196.

43    The first of Riviera’s two contentions that Short was liable - that accepted by the trial judge, namely that Short had possession by reason of the considerations referred to by the trial judge - is erroneous. The considerations relied on by the trial judge and Riviera did not point to Short having possession as distinct from having some other relationship with 34/18. The presence of Mr Short and the fact that he may have supervised the process of unloading and loading do not establish that he had possession of 34/18. While Mr Short may have ensured that the crane driver picked up the correct cruiser and re-loaded it onto the correct low-loader, the only period when he was in control, if he was ever in control, was while the cruiser was being strapped to the cradle. Even if he had possession during that interval, it does not follow that he had it earlier or later, nor that he had it when the Campbell driver caused the damage. Indeed it is not even clear whether he was in control in that interval, since Mr Andrews and Mr Barry-Cotter were also participating in the work. Mr Short’s conduct after the accident does not establish that he had possession. That conduct was no more than a sensible attempt to overcome the consequences of the crisis caused by Campbell’s driver: for this a crane was necessary, and it was Short which had been in contact with Botany Cranes. His failure to charge Riviera for the work is not significant in determining who had possession: it is capable of being explained as an attempt to preserve Riviera’s commercial goodwill.

44    The second contention advanced by Riviera for Short being liable - that Short had not contracted with Riviera to arrange for others to carry the goods, but had contracted to procure that the goods would be carried - should be rejected. It was not pleaded by Riviera. Indeed Riviera pleaded a contrary case, which the trial judge accepted, that Riviera and Short agreed that Short “would arrange for the loading of” 34/18. Riviera in substance admitted this, instead urging that the pleadings be approached “with some degree of tolerance”. Counsel for Short submitted that had the new case been pleaded, evidence might have been called at the trial which might possibly have answered it. He did not point to any specific evidence of that type, as distinct from arguments available on the existing evidence, but that is not uncommon when a fresh point is raised on appeal. Counsel for Short on the appeal had not appeared at the trial. It is entirely possible that had the new case been pleaded the factual circumstances relevant to its acceptance or rejection would have been more fully investigated. In answer to this, Riviera submitted that from a reference by the trial judge to Arcweld Constructions Pty Ltd v Smith, Metaalhandel JA Magnus BV v Ardfields Transport Co Pty Ltd and Hobbs v Petersham Transport Co Pty Ltd, together with the article by Palmer in 3 Torts L Rev 186, it could be inferred that the argument now advanced on appeal had been advanced at the trial. Speaking of the cases the trial judge said: “It seems to me that the difficulties I encounter in seeking to reconcile the various judgments … with respect to various pronouncements on the necessity for there being a possession before there can be a bailment, do not arise in this case.” Since the trial judge treated the cases as being relevant to the issue of whether possession is necessary for bailment and not as supporting the submission now advanced, the citations do not point clearly to the proposition that the new case, which was not advanced in the pleadings, was in fact advanced as part of the trial. In any event, the citation of authorities in final address, after the evidence had been closed, does not necessarily point to the relevant issue as having been a live one before and at the time when evidence was tendered. Since it is possible that the new case might have been met by evidence, it cannot be advanced on appeal: Suttor v Gundowda Pty Ltd (1950) 81 CLR 418.

45    Accordingly, assuming Riviera to have been the owner of 34/18 at the time of the accident, the legal relationship between Riviera and Short at the time of the accident was not that of bailor and bailee. Campbell was bailee. Since Campbell was an apparently competent carrier, Short was not in breach of any duty to Riviera, and Riviera’s case against it should have been dismissed. That leaves its potential liability to indemnify Campbell if Riviera succeeds against Campbell, which turns on the application of clause 21 of the Conditions of Carriage.

Riviera’s Case Against Campbell: Who Owned 34/18 When The Accident Happened?

46    If this question is answered “Mr Boland”, then Riviera lacked any title to sue, and the Amended Statement of Claim and the Cross Claims should have been dismissed independently of the outcome on any other question. If this question is answered “Riviera”, then Riviera was entitled to judgment against Campbell, subject to any other defence of Campbell. The trial judge answered the question: “Riviera”. He said (Red 32O-34D):

“… 34/14 was fitted out to the Smiths’ specifications and shipped out of Sydney on 2 September 1997 on board the freighter Direct Eagle. 34/18 was repaired and sold to a retail subsidiary of Riviera. Short had not invoiced Riviera in respect of services associated with the abortive shipping of 34/18 and Riviera had not raised an invoice for it against Boland.
After Direct Eagle sailed from Sydney the usual documentation and keys to 34/14 was sent to Boland. The invoice for that transaction contains the following details: INVOICE NO: 1455; DATE: September 5 1997; BOAT NUMBER: 34/14; DATE SHIPPED: 02/09/97; SHIPPED VIA: Direct Eagle; F.O.B. POINT: Sydney; TERMS: COD.
Another one of the usual documents sent to Boland after Direct Eagle had sailed from Sydney is entitled: ‘MANUFACTURER’S STATEMENT OF ORIGIN TO A BOAT OR MOTOR”. The presently relevant portion of the document reads:
‘The undersigned CORPORATION’ (Riviera) ‘hereby certifies that the new boat or motor described below, the property of said CORPORATION, has been transferred this 2nd day of September 1997 on Invoice No. 34/14 to RICHARD BOLLAND YACHT SALES…’.
Short invoiced Riviera for $2318.50 in respect of its services associated with the shipping of 34/14. The presently relevant details of that invoice, dated 2 September 1997, which covered ‘CRANE, F.I.D., WHARFAGE/AGENCY, CARTAGE/DELIVERY, 9 HOURS AT WHARF’, read:
‘RIVIERA 34/4 RICHARD BOLAND EX SYDNEY TO OAKLAND DIRECT EAGLE ETD 2-9-97 ON 40FT FLAT RACK’.
INFERENCE AVAILABLE
As there is no suggestion in the evidence that Short ever invoiced Riviera in advance of the services performed the irresistible inference, which I draw, from the usual course of dealings over the years between Riviera and Boland and from the details of the documents extracted and reproduced above is that 34/14 was swung ‘over the rail’ of Direct Eagle on 2 September 1997, and that both Riviera and Boland were of the one mind: namely that Riviera maintained ownership of 34/14 until it had gone ‘over the rail’ on 2 September 1997. Such an inference is consistent with one of the essential elements of an FOB contract, which is what both Riviera and Boland each understood they had entered.”

Later the trial judge concluded that property in 34/18 would not have passed from Riviera to Mr Boland until after it was loaded over the rail of the “Direct Currawong”.

47    Campbell attacked the trial judge’s reasoning and Riviera defended it. Short adopted, but did not add to, the arguments advanced on behalf of Campbell.

48    In paragraph 7 of the Amended Statement of Claim Riviera averred that at all material times it was the owner of 34/18. Paragraph 3 of Short’s Defence and paragraph 3 of Campbell’s Amended Defence put that allegation in issue. For its part, Campbell went further. Evidently concerned to ensure that the point should not be overlooked by Riviera, Campbell pleaded in its Amended Defence:

“13. In the premises and in answer to the whole of the Ordinary Statement of Claim in so far as it pleads a case against the Second Defendant, the Second Defendant puts in issue the Plaintiff’s asserted title to sue as ‘owner’ of the cruiser as pleaded in paragraph 7 of the Ordinary Statement of Claim.
14. In the premises and in further answer to the whole of the Ordinary Statement of Claim, as at the commencement of these proceedings, the Plaintiff had no entitlement to bring this action against the Second Defendant as it had no cause of action.”

At one stage during the appeal Riviera suggested that this had caused Campbell to assume the burden of proving that the property passed to Mr Boland before the accident, but this appears unsound and the suggestion was indeed withdrawn. In consequence the onus lay on Riviera to rebut any relevant presumption arising under the applicable law of sale of goods.

49    The parties and the trial judge assumed the Sales of Goods Act 1923 (NSW) to be applicable. Since no plea of any applicable non-Australian law was advanced, and no proof of it was offered, and since the only other possible provision was the Sale of Goods Act 1896 (Qld), the provisions of which are not materially different from those of the NSW Act, there is no reason to treat the approach of the parties and the trial judge as wrong.

50    The Sale of Goods Act 1923 provides:

“6. (1) A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration called the price. There may be a contract of sale between one part owner and another.
(3) Where under a contract of sale the property in the goods is transferred from the seller to the buyer, the contract is called a sale; but where the transfer of the property in the goods is to take place at a future time, or subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell.
(4) An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled, subject to which the property in the goods is to be transferred.
21. Where there is a contract for the sale of unascertained goods, no property in the goods is transferred to the buyer unless and until the goods are ascertained.
22. (1) Where there is a contract for sale of specific or ascertained goods, the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred.
(2) For the purpose of ascertaining the intention of the parties regard shall be had to the terms of the contract, the conduct of the parties, and the circumstances of the case.
23. Unless a different intention appears, the following are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer.
Rule 1. Where there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment or the time of delivery, or both, be postponed.
Rule 2. Where there is a contract for the sale of specific goods, and the seller is bound to do something to the goods for the purpose of putting them in a deliverable state, the property does not pass until such thing be done and the buyer has notice thereof.
Rule 3. Where there is a contract for the sale of specific goods in a deliverable state, but the seller is bound to weigh measure test or do some other act or thing with reference to the goods for the purpose of ascertaining the price, the property does not pass until such act or thing be done and the buyer has notice thereof.
Rule 4. Where goods are delivered to the buyer on approval or on ‘sale or return’ or other similar terms, the property therein passes to the buyer:
(a) when he signifies his approval or acceptance to the seller, or does any other act adopting the transaction;
(b) if he does not signify his approval or acceptance to the seller, but retains the gods without giving notice of rejection, then if a time has been fixed for the return of the goods, on the expiration of such time, and if no time has been fixed, on the expiration of a reasonable time. What is a reasonable time is a question of fact.
Rule 5.
(1) Where there is a contract for the sale of unascertained or future goods by description, and goods of that description and in a deliverable state are unconditionally appropriated to the contract either by the seller with the assent of the buyer or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. Such assent may be express or implied, and may be given either before or after the appropriation is made.
(2) Where in pursuance of the contract the seller delivers the goods to the buyer or to a carrier or other bailee (whether named by the buyer or not) for the purpose of transmission to the buyer and does not reserve the right of disposal, he is deemed to have unconditionally appropriated the goods to the contract.
25. Unless otherwise agreed, the goods remain at the seller’s risk until the property therein is transferred to the buyer, but when the property therein is transferred to the buyer, the goods are at the buyer’s risk, whether delivery has been made or not:
Provided that where delivery has been delayed through the fault of either buyer or seller, the goods are at the risk of the party in fault as regards any loss which might not have occurred but for such fault:
Provided also that nothing in this section shall affect the duties or liabilities of either seller or buyer as a bailee of the goods of the other party.
35. (1) Where in pursuance of a contract of sale the seller is authorised or required to send the goods to the buyer, delivery of the goods to a carrier, whether named by the buyer or not, for the purpose of transmission to the buyer, is prima facie deemed to be a delivery of the goods to the buyer.
(2) Unless otherwise authorised by the buyer, the seller must make such contract with the carrier on behalf of the buyer as may be reasonable, having regard to the nature of the goods and the other circumstances of the case. If the seller omit[s] so to do, and the goods are lost or damages in course of transit, the buyer may decline to treat the delivery to the carrier as a delivery to himself, or may hold the seller responsible in damages.
(3) Unless otherwise agreed, where goods are sent by the seller to the buyer by a route involving sea transit under circumstances in which it is usual to insure, the seller must give such notice to the buyer as may enable him to insure them during their sea transit, and if the seller fails to do so, the goods shall be deemed to be at his risk during such sea transit.”

In s 5(1) the following definitions appear:
“’Future goods’ means goods to be manufactured or acquired by the seller after the making of the contract of sale.
‘Specified goods’ means goods identified and agreed upon at the time a contract of sale is made.”

There is no definition of “unascertained goods”.

51    No argument was advanced to the effect that even if property was transferred to Mr Boland before the accident, the goods remained at Riviera’s risk. Rather, Campbell advanced two positive contentions:

(a) It could be inferred from the fact that Mr Boland had paid for 34/18 on 8 August that it was the intention of Riviera and Mr Boland that at that moment they intended property to be transferred.

(b) Alternatively, even if there was no evidence of the intention of the parties, property passed by reason of the operation of s 23 r 5 when 34/18 came into the possession of Short or Campbell.

Common ground

52    There is no doubt that at the time of the contract made in late June 1997, the motor cruiser 34/18 was “future goods”: it was a motor cruiser to be manufactured by the seller, Riviera, after the making of the contract of sale. The motor cruiser 34/18 could also be characterised as “unascertained goods”, since one category of that class is “goods not yet in existence, which have to be manufactured … by the seller”: Benjamin’s Sale of Goods (5th ed, 1997) para 1-116; see also para 5-059. It follows that property could not pass until the goods were ascertained (s 21), and that the contract was strictly speaking not a sale, but an agreement to sell (s 6(3) and (4)).

53    The following matters were common ground:

(a) property did not pass at the time of the contract because the goods were at that time unascertained (s 21);

(b) property did not pass before payment on 8 August 1997;

(c) property would not have passed after the time when 34/18 would have crossed the rail of the “Direct Currawong” had it not been damaged en route to that vessel on 14 August 1997;

(d) the loading of 34/18 into a Riviera truck at Labrador was not an effective delivery under s 35(1), and hence not a delivery of “the goods to the buyer” under s 23 r 5(2), because so far as the driver of that truck, Mr Andrews, was a carrier, he was the employee of Riviera, and delivery to him was not delivery to Mr Boland;

(e) further, delivery to Mr Andrews was not delivery “to a carrier or other bailee” under s 25 r 5(2), because the relevant carrier must be a bailee, and Mr Andrews was not a bailee, he was a conduit through whom Riviera retained possession.

Intention that property would pass on payment?

54 There are cases where the time when property passes is postponed from the time fixed by s 23 r 1 (the time when the contract is made) to the time when payment is made: e.g. Re An Arbitration Between Shipton, Anderson & Co and Harrison Bros & Co [1915] 3 KB 676 at 680; Re Anchor Line (Henderson Brothers) Ltd [1937] Ch 1 at 7 and 11. Where, as here, the contract was not for specific goods in a deliverable state, but for future goods, the time fixed by s 23 r 5 can be displaced, and the time of earlier payments selected, if the intention of the parties is to do so.

6. The cross appeal is dismissed.

7. The cross appellant/second defendant is to pay the second cross respondent’s/plaintiff’s costs of the cross appeal.

8. Note that these orders do not affect the verdict and judgment of the trial judge in favour of the first respondent/plaintiff against the second respondent/second defendant in the sum of $112,632.81 with costs.

9. Note further that these orders do not affect:

(a) the trial judge’s verdict and judgment in favour of the second
respondent/second defendant against the appellant/first

defendant on the second respondent’s/second defendant’s

cross claim;

(b) the trial judge’s order pursuant to that verdict that the appellant/

first defendant fully indemnify the second respondent/second

defendant in the total amount of the verdict and judgment plus

costs awarded to the first respondent/plaintiff; or

(c) the trial judge’s order that the appellant/first defendant pay the

second respondent’s/second defendant’s costs of that cross

claim.

10. Order the appellant/first defendant to indemnify the second respondent/second defendant against:
(a) the second respondent’s/second defendant’s costs of the appeal

and cross-appeal;

(b) the second cross respondent’s/plaintiff’s costs of the cross-

appeal to the extent that the second respondent/second

defendant has been ordered to pay them.

11. Liberty to apply.

: I agree with Heydon JA.

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