Nissho Iwai Australia Limited v Malaysian International Shipping Corporation

[1988] HCATrans 213

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S56 of 1988

B e t w e e n -

NISSHO IWAI AUSTRALIA LIMITED

Applicant

and

MALAYSIAN INTERNATIONAL SHIPPING

CORPORATION

Respondent

Application for special

leave to appeal

1-1.ASON CJ

WILSON J

DEANE J

Nissho

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 16 SEPTEMBER 1988, AT 9.38 AM

Copyrigh_t in the High Court of Australia

S1T3/l/RB 1 16/9/88

MR A.R. EMMETT, QC: May it please Your Honours, I appear with

my friend, MR A.W. STREET, for the applicant.

(instructed by Thomson Rich O'Connor)

MR B.W. RAYMENT, QC: May it please Your Honours, I appear with

my learned friends, MR A.J.SULLIVAN and MR J.E. MAR~HALL,

for the respondent. (instructed by Ebsworth & Ebsworth)

MASON Cj:	Yes, Mr Ermnett.
MR EMMETT:	May it please Your Honours. There are two principles

which we submit ought to be considered by the High

Court in the circumstances of this case. The Court of

Appeal was called upon, as was the trial judge, to

construe a bill of lading. There are two principles

which, in our submission, arising in a sense out of

what this Court has said in DARLINGTON SECURITIES case

and one more overriding principle of public interest,

should have required the Court of Appeal to give a

more benevolent construction to exclusion and limitation

clauses in bills of lading.

The Court of Appeal cited, correctly in our submission, what the Court said in DARLINGTON, and that

appears at page 21 of the application papers.Reference

is made to the general propositions - this is line 19

on page 21 - that:

"[T]he interpretation of an exclusion clause is

to be determined by construing the clause
according to its natural and ordinary meaning,
read in the light of the contract as a whole,
thereby giving due weight to the context in

which the clause appears including the nature

and object of the contract -

The first proposition that we submit is raised is the extent to which the Court of Appeal gave due weight to the nature and object of a contract comprising a bill

of lading, bearing in mind that a bill of lading is

in a sense a unique creature of the law merchant,

Although it constitutes the terms of carriage between

shipper and carrier by the operation of mercantile

usage and mercantile law generally a bill of lading is

also symbolic of the right of property in the goods.

That fact, in our submission, was something to which

no weight was given.

The significance of treating a bill of lading as

representative of the goods requires, in our submission,

that a much greater attention be given to the

consequences of an exclusion clause which purports to

exonerate a carrier from what is the basic or essential

obligation of a carrier, that is to redeliver the goods

once the carriage has been completed.

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The second proposition which, in our submission,

is raised is one of more general application, and that
is the public interest of Australia as a nation of

shippers and consignees which relies upon shipping for

its import and export trade. That public interest

requires, in our submission, that a bill of lading

should not be construed benevolently to a carrier so as

to exonerate the carrier from that basic obligation to

deliver against presentation of the bill of lading.

That proposition is something which was raised by

Sir Ninian Stephen in THE NEW YORK STAR, a proposition

that received support from Mr Justice Murphy in that

case and it is our submission that quite independently

of the nature of a bill of lading generally, it is in
the public interest that bills of lading should not be
construed benevolently to the carrier in the way which

the Court of Appeal has effectively done by purporting

to apply the principles set out in DARLINGTON FUTURES.

MASON CJ:  But to give weight to that factor would be inconsistent

with what the Court said in DARLINGTON FUTURES, would

it not?

MR EMMETT:  It would not be inconsistent; what we would submit

in relation to the second proposition, Your Honour, is that there is an overriding propositing in relation to contractual documents such as bills of lading whereby

the public interest does require doing something more
than simply construing the document according to its
terms, giving due weight to the nature and object of

the contract.

MASON CJ:  So it comes in as a factor under due weight, does it,

to the nature of giving due weight to the nature

of the contract?

MR EMMETT: There are two ways in which we would put it. At one

level we would say yes, that the public interest,

coupled with a bill of lading as a document of title,

requires that careful consideration be given to

exoneration clauses in a bill of lading. But we would

also suggest that - and the observations_raade by

Sir Ninian Stephen support this - we would suggest that

quite apart from that there is this overriding public

interest that requires a special consideration or a

special interpretation to be given to documents such as

a bill of lading which are significant to Australia as

a trading nation, a nation which is dependent upon

trade, both export and import.

MASON CJ: Of course, His Honour was using that consideration in

a very special context, was he not, in considering

whether the Court should treat a bill of lading as

giving immunity to somebody who was not an actual party

to the contract.

MR EMMETT:  Oh indeed, and we do not suggest that the observation

made by those two Judges necessarily concludes the matter

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but it does raise a ~ue~tiun of some significance, in

our submission, as to whether or not there is a

consideration of public interest that requires some
special interpretation to be given to documents such
as bills of lading which are of significance in terms
of Australia's economic welfare.

The distinction was drawn by Sir Ninian Stephen between a nation of shipowners on the one hand,and a

nation such as Australia and the Unites States, which

are nations of shippers and consignees. I might invite

Your Honours to look at the observation that was made in NEW YORK STAR, 139 CLR 258 - - -

MASON CJ:  I do not think we have it, Mr Emmett, so we will have

to rely on your eloquent reading of the passage.

MR EMMETT:  I am sorry, Your Honours, I thought it had been

given to Your Honours.	I will just read the short
passage:

While it is in the interests of great

fleet-owning nations that their ocean

carriers, and the servants and independent

contractors which they employ, should be

as fully protected as possible from liability

at the suit of shippers and consignees, the

interests of those nations which rely upon

those fleets for their import and export
trade is to the contrary. It was in response

to such national interests that the United

States of America and Australia, which both fell

into the latter category, enacted the HARTER ACT

of 1893 and our own SEA CARRIAGE OF GOODS ACT

1904, measures which circumscribed the carrier's

freedom to contract out of liability. Each

was more stringent than were the subsequent

Hague Rules.

Then leaving out a passage:

should r~gard it as in any way in the public

It is not clear to me that Australian courts

interest that carriers' exemption clauses,

effective before loading and after discharge,

should be accorded any benevolent interpretation.-

so that His Honour was concerned with the operation of

an exoneration clause in so far as it operated after

discharge of the cargo and that, of course, is the

precise circumstance arising in this case. Although

it was disputed in the trial, the trial judge found
that there had been a discharge of the cargo but that

the cargo disappeared prior to uellvery by the

stevedor~ anu again, although there was no formal

finding of negligence one way or the other because

the matter did not arise in the event, the trial

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judge made the observation that if there was

negligence in relation to the disappearance of the

containei, it was that of the stevedore. So that

the operation of this exoneration clause is to

exempt liability for a failure after the point of

discharge of the cargo.

Then Sir Ninian went on to say:

If public policy does not dictate such a course,

neither do considerations of comity.

Mr Justice Murphy made reference to Mr Justice Stephen's

observations at page 285:

the overseas carriage of goods and the

stevedoring industry are enmeshed by restrictive

practices. Australian importers have no real

freedom in their arrangements; to regard these

as being in the area of contract is a

distortion. The bill of lading in this case

shows that, although there are references to the carrier's obligations, the thrust of the

document is to relieve the carrier and its

agents from virtually all responsibility.	I
agree with Stephen J. 's observations on the aspects of public interest.

So that at least two Judges of the Court have

said that there are these public interest considerations

which should be taken into account in construing a bill

of lading.

DEANE J: Did the evidence here indicate whether the carrier had

any choice as to the use of the stevedoring facilities?

MR EMMETT:  I ·am not sure, Your Honour, that there is any

evidence one way or the other.

DEANE J: One's impression is that nobody has any choice.

MR EMMETT: That may be, but be that as it may that, in our

submission, would not detract from the principle that

the - whatever the position might be so far as the
carrier's ability to arrange for some other stevedore,

the position so far as his obligations to the shipper

are concerned is.that the carrier is responsible trom

the point of receipt of goods until the point of

delivery, be that after the point of discharge. Some

bills, of course, equate discharge with delivery or

delivery with discharge at the ship's rail; this bill

does not do that, in common with many other bills,
although oddly enough the Court of Appeal, notwithstanding
the clear distinction in this bill between delivery on

the one hand and discharge, said that for reasons

perhaps akin to what Your Honour Mr Justice Deane~is

referring to, treated discharge as equivalent to

delivery of the goods. That, in our submission, is

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one area where a quarrel arises as to the appropriate

proposition. May I perhaps invite Your Honours to

look at pages 43 and 44 of the judgment of the president,

starting at the bottom of the page, and this is

directed at the construction of one of the three

exoneration clauses that arise for consideration.

Approaching para 8(2)(a) in the manner

instructed by DARLINGTON FUTURES, reading it

in its context and having regard to its

commercial purpose, it is my opinion that

"delivered or made available;; means such

delivery or making available as the carrier

is required to perform. This means,

relevantly, discharge from the ship. Thereafter,

the goods have passed out of the control of the

carrier and are in the control of stevedores,

transporters and others.

That might be acknowledging what Your Honour

Mr Justice Deane was suggesting, that the shipowner

has no option but to retain whatever stevedores are

available on the wharf. Then going down to line 15:

Given the realities of the modern relationships between carriers ..... and handlers and

distributors ..... it appears to me that a clause

such as 8(2)(a) contemplates that the carrier

will have "delivered" and certainly "made

available" the goods when they are discharged

from its agreed mode of carriage and transferred

to the handler.

Now, that complet~ly uverlooks the fact that the ouli~ation und~r a bill of lading, unless it is specified otherwise, is for the carrier to deliver,

not to hand over to some subcontractor on the basis

that the subcontractor will thereafter make delivery

to the consignee. The president goes on:

Realism requires this construction because

normally the carrier ..... moves on and loses complete control of the goods. Then to impose

continuing liability on the carrier for the

multitude of risks to which the goods, out of

his control, are subject would require clearer

words than clause 8(2)(a) contains.

Now, again that overlooks the fact that it is the carrier's obligation to make delivery. If he chooses

to do it through a subcontractor or commercial reality

is that he has to do it through a subcontractor

because he is required to do so, then that is a matter

for him to guard against. That is not a consideration

that should dictate the construction of the clause, so

that what is clearly an additional obligation of the

carrier to deliver after discharge from the ship is

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effectively eliminated by equating delivery to

discharge or equating discharge to delivery.

WILSON J: Mr Emmett, your public interest point , the point

made in the passage you have read from

Mr Justice Stephen's passage, it still does not permit,

even if one allowed weight to it, still you are thrown

back to the construction of the actual terms of the

particular bill.

MR EMMETT:  Oh yes.

WILSON J: And do you not face the difficulty of extracting a

point of general importance ouL of these general

principles of con~truction in a case like this where

you have got the decision governed, really, by the

terms of the bill of lading?

· MR EMMETT:  Except this, Your Honour, that the president himself

acknowledged that - not perhaps putting it too

strongly - the possibility that if such a public
interest consideration were to apply then he may come
to a different conclusion. He acknowledged the
existence of the possibility of such a proposition at

the bottom of page 21:

Various comp~ting suggestions of policy for

a differing approach to the clauses of the

Bill of Lading in the present case were urged

by the respective parties, For example, the

Appellant drew attention to the matters of public policy referred to by Stephen J and

Murphy J -

the passages to which 1 have just referred.	Then
going down to line 15:

Accordingly, until the High Court says

otherwise, this Court should act upon the

basis that the public policy referred to by

Stephen and Murphy JJ cannot control the

application to exclusion and limitation clauses

of Bills of Lading of the normal rules

applicable in this country to the construction	of written contracts according to the ordinary
meaning of the language used.

So that the learned president was himself acknowlectging

that, but for what he had been told in DARLINGTON

FUTURES, he may well have adopted a different approach

in the line of the public policy consideration

suggested by Mr Justice Stephen.

Now, it is our submission that there is nothing

inconsistent with what the High Court said in

DARLINGTON FUTURES with adopting this sort of approach,

particularly where one has regard to the language that

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due weight must be given to the nature and object

ot the contract. At the lowest level, or the lower

level, we would say, that requires that one has due

regard to these public interest considerations which
are very material to the nature and object of a

contract of carriage evidenced by a bill of lading.

WILSON J:  Could you just remind me again where I find the text

of clause 8(2)(d).

MR EMMETT:  Yes, it is on page 24.

WILSON J: Thank you.

MR EMMETT: It is set out in the judgment. There are three clauses which fall for consideration but the most

significant one and the one on which both the trial

judge and the Court of Appeal decided the matter is

8(2)(d) and the relevant language is the first two

lines, lines 26 and 27 on page 24, and then one needs

to go over to line 3 on page 25, so that it reads:

(2) Under no circumstances shall the Carrier

be liable or responsible in any capacity for

or in respect of -

(d) any loss or damage to or in connection

with Goods arising or eesulting at any time from

..... any cause or event which the Carrier

could not avoid or the consequences ot which

the Carrier could not prevent by the exercise

of reasonable diligence.

And it is that passage, in effect, that was relied upon.

One way in which it was put by the plaintiff, both at

the trial and in the Court of Appeal, was that
':'carrier" carries with it all of the obligation; which
the carrier has. The Court of Appeal said, the carrier

has delegated some of its duties, namely the handling

of the goods after discharge from the ship, and this clause was not intended to encompass conduct for which	a subcontractor was responsible in circumstances where
the shipowner himself had taken reasonable steps or
had not been guilty of absence of reasonable diligence
in retaining the stevedores.

Now, again that might come back to Your Honour

Mr Justice Deane's point that the shipowner may have had no choice, but be that as it may, the carrier has undertaken certain obligations; those obligations

may be performed by the carrier personally in toto or

those obligations may be performed exclusively and ~otally by subcontracting. There is no warrant for

drawing a distinction between the carrier as the
shipowner on the one hand and the carrier operating

through its subcontractors as a stevedore .

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Now, the approach which the Court of Appeal took

was to say, the carrier is only the shipowner and once

the shipowner is no longer involved, then one is not

concerned with whether or not he could have prevented

the loss by the exercise of reasonable diligence.

Now that approach, in our submission, is inconsistent

with the propositions that we have advanced that if one
looks at this document in a way which is designed to

give recognition to the law merchant's creature as a

document of title symbolic of the goods, then one

would be much slower to give that sort of construction

to language which, in our submission, is clearly - or

at best, ambiguous; we would say in fact is clearly

unambiguous the other way. Carrier means carrier and

one cannot simply say, well, I do not have to worry

about the exercise of reasonable diligence if I

subcontract all of my obligations.

The two matters then which, in our submission,

indicate the Court of Appeal's failure to give due

weight to the nature and object are the matters that	I referred to on page 44, that is the taking cognizance
of commercial reality and the fact that in usual
circumstances the shipowner is required or in fact
retains a stevedore; the other consideration which the
Court of Appeal took into account in our submission
erroneously is the possibility of the existence of
after the reference to RIVERSTONE MEATS: insurance. That appears at page 20, line 18, just

there are equal reasons of policy for
holding parties to the effect of the natural

meaning of the language used in the written

document, upon the basis of which parties

may be advised ..... and in relation to which

they will make suitable arrangements for their

own protection (including by insurance).

The reference to the consideration of insurance, as a common feature against the

background of which exclusion and limitation

clauses must now be construed, was referred

to by Lord Diplock ..

Now, what the learned president seems to be saying is shippers and consignees can insure, theretore we do

not have to worry about the possibility that an
exclusion clause or an exoneration clause may operate

in an unfair manner so far as the shipper or consignee

is concerned.

MASON CJ:  To what extent were these preliminary remarks about

policy an ingredient in the actual process of reasoning

about the construction of the provisions?

MR EMMETT:  One needs to look at the - - -

S1T3/9/RB 9 16/9/88

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MASON CJ: It seems rather to be a preliminary discussion about

policy, then the judgment proceeds to identify the
principle extracted from DARLINGTON FUTURES and to
interpret the provisions in accordance with that

principle.

MR EMMETT:  Subject to this, but the judgment does not give any

special consideration to the nature and object of a

contract consisting of a bill of lading.

MASON CJ: Yes, I follow that point, but that is a distinct

point from the point you were raising in connection

with the sentence that appears at page 20.

MR EMMETT:  It was not intended to be a distinct point; it is

simply adding flavour to the approach which - - -

MASON CJ: Well, if you consider it as a separate flavour that

is being added to the substance of your argument, how

does it actually play a part in the reasoning, except

perhaps to, as it were, support what you say, that

there is not enough attention given to the nature of

a bill of lading, but I still do not see that it plays

a part in the reasoning.

MR EMMETT:  I have to concede it certainly does not explicitly

play a part in the reasoning based on the construction

but what it does do is indicate a rejection - and

maybe this is what Your Honour is putting to me that

it does no more than add flavour to the rejection or

the sort of public policy principle that we submit

ought to be applicable.

MASON CJ: Yes, I follow that.

MR EMMETT:	Your Honour - - -
DEANE J:	Mr Emmett, how much evidence was there about the procedure on the Sydney waterfront?
MR EMMETT:	Your Honour, as I understand it, there was not a

what happened in this particular terminal because the	great deal of evidence about the procedure on the Sydney waterfront generally; there was evidence about	question was whether or not there was negligence on the
part of the stevedore- - -

DEANE J:	To whom was the bill of lading presented? Did the
evidence disclose that?
MR EMMETT:	It would be presented to the carrier's agent who,

in this case, would have been the stevedore.

DEANE J: And why do you say it is the carrier's agent? Was

that all gone into?

MR EMMETT:  As I understand it, it was not gone into in detail

from that point of view. The analysis of what happened,

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at the time was concerned with trying to explain

how the goods could have disappeared within half an

hour of being discharged from the ship's side and there was consideration given to the procedure of the stevedore to show that the stevedore by taking

reasonable diligence would have been able to avoid

the loss.

DEANE J: The stevedore receives the bill of lading and

delivers it to the carrier?

MR EMMETT:  No, it is presented to the shipper's agent- I am

told that the evidence indicates that the procedure

that was adopted was for the bill of lading to be

presented to the shipper's agent who was not

necessarily the stevedore.

DEANE J:	I see.
MR EMMETT:	The shipper's agent would then arrange for release

from the stevedore.

DEANE J: What, he would give a delivery note to the stevedore?

MR EMMETT: Excuse me one moment, Your Honour. I am told that

the procedure was outlined, involving the delivery of

the bill of lading to the ship's agent; the ship's

agent arranged for delivery orders; in due course

a procedure is laid down whereby by the production of

the appropriate documents at the terminal delivery is

obtained against them. So that effectively one cannot

obtain delivery of the consignment without production

of the bill of lading.

DEANE J: If I may ask you this: if one were to see a point of

general importance in the paragraph cotmnencing four

lines from the bottom of page 43, is not the

situation this that what is said there is merely obiter

and has no part in the process of reasoning?

MR EMMETT: That observation was made in relation to

clause 8(2)(a). It has no part in the reasoning in

relation to 8(2)(d), I concede that, yes. But it

does indicate, however - I suppose it does no more

than confirm the failure of the court to take into

account what we submit is the general principle when

endeavouring the construe 8(2)(d).

DEANE J:	I follow what you say.
WILSON J:	Mr Justice Kirby was the only member of the court

who considered 8(2)(a), was he not?

MR EMMETT:  Yes, yes. Mr Justice Yeldham, I think, concluded

in favour of the applicant so far as 8(2)(a) was

concerned. We would submit that 8(2)(a) or the

construction of 8(2)(a) would not stand in the way of

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granting leave in any event, but the real question

arises in relation to 8(2)(d).

DEANE J:	My query was whether 8(2)(a) would get you up on a leave application and it seems you have some
difficulties - - -
MR EMMETT:	I think I have got to get through 8(2)(d) before

any issue raised by 8(2)(a) arises.

MASON CJ:  Have you any stronger case in relation to the grant

of special leave in relation to 8(l)(d) than you have

in relation to 8(2)(a)?

MR EMMETT:  We would submit yes, Your Honour.

MASON CJ: After all, 8(2)(a) more clearly raises in its terms

this notion of coexistence or contemporaenity between

delivery and discharge.

MR EMMETT:  Oh yes.

MASON CJ: It is not thrown up as clearly by 8(2)(d).

MR EMMETT:  No, it is not. Can I say this: if we do get through

8(2)(d), 8(2)(a) has to be considered and it does
throw up that question. If 8(2)(d) were not there,
then we would submit that 8(2)(a) of itself would
be a special leave point, but I do not think we can
suggest that this question of the equation of delivery

to discharge is raised by 8(2)(d) in the same way it

is by 8(2)(a).

MASON CJ:	No ..
MR EMMETT:	But the significance though is - perhaps I should

qualify by saying, except to this extent: the court

in construing 8(2)(d) - and this goes back to the
question of the meaning of "carrier;; - this appears

at the middle of page 35 of the judgment:

The appellant then contended that

paragraph 8(2)(d) was nonetheless inapplicable

were not attracted to the circumstances

proved. Yeldham J rejected this argument.

So would I.

because of the fact that the closing words

Then at the bottom of the page:

So far as the meaning of "carrier" in

this context is concerned, several reasons

support the argument for its confinement to
the carrier (the respondent) and not its

extension to cover independent contractors

(such as the stevedores).

Then he gives three reasons for that conclusion and

at line 20:

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There are reasons for confining the closing

words of para 8(2)(d) as the words themselves

suggest, to the carrier and its employees,

T3	alone.
Now, this does not raise the discharge/delivery

dichotomy but it does raise a very, in our submission,

related question which raises the same principle, that

is that the bill does contemplate that something

happens after discharge and before the carrier is

absolved from all responsibilities. One should perhaps

consider clause 19 of the bill which appears at

page 89, 19(3):

Delivery of Goods to a holder of this Bill

of Lading duly presenting the same or another

person assuming or entitled to possession of

such Goods or this Bill of Lading ... shall

constitute complete and final discharge of the

Carrier's obligations hereunder and the
Carrier's liability and responsibility for and in respect of such Goods shall thereupon cease
entirely.

So that the bill, as I said, contemplates some further

obligation beyond discharge. The approach to the
definition of "carrier" which the president adopted

at page 36 in our submission is inconsistent with

that notion and is subject to the same criticism as
would be applied to the proposition that discharge
is equivalent to delivery, by saying that once the
carrier has finished his ship carriage and discharged

and is thereafter relying upon subcontractors to do the

handling and the actual delivery, so long as the

shipowner was not negligent in retaining the stevedore -

and there was no suggestion of that - then that is the

end of his obligations but that, in our submission,

overlooks this additional part of the obligation to

deliver beyond discharge from the ship.

So that one can say that the same sort of

principle as is raised by 8(2)(a) does arise but in a

slightly different way in relation to 8(2)(d), but

the essence of the matter is the distinction between discharge on the one hand and delivery, all of which, of course, is to be taken into account in construing

the document as a document of title where delivery is

of the essence of the obligation.

In our submis~ion, the case is one proper for the

grant of leave.

MASON CJ: Yes. Thank you, Mr E!Illllett. Yes, Mr Rayment.

MR RAYMENT:	Your Honour, we submit that the case went off on a very narrow point of construction of a bill
not shown to be in common form, that is whether

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clause 8(2)(d), in its reference to the carrier,

meant the carrier personally or comprehended the

carrier, its servants or agents. The basis upon which

the Court of Appeal decided the case was on

construction of the entire bill itself.

The clause, Your Honours, is found on page 80

of the appeal book and I go quickly to the chain of
reasoning which led the Court of Appeal to its
conclusion. At the foot of page 80, the last few
words of clause 8(2)(d) are set out and the question

was, "Does the carrier mean the carrier personally or

does it comprehend the carrier, its servants or agents?"

The way the court approached the matter was to look at the definition of the clause on page 72; it shows

that the word "carrier" means, not includes:

the carrier named on the front of this Bill -

in the first place; in the next place the court noted

that the expression "Carrier's employee" was defined

on page 75 of the bill so as to comprehend

"sub-contractor, servant or agent of the Carrier" and

that expression was not used in clause 8(2)(d). It

was used in the immediately succeeding subclause,

clause 8(3), so a distinction was drawn, Their Honours

found, between carrier and carrier's employee on the

face of the bill and there was no suggestion within

claus~ 8(2)(<l) that some special use of the word

"carrier" was involved. Now, none of that, in our

respectful submission, be it right or wrong, involves

any question of public importance.

We would submit it is right but,in our

submission, it is, to dispose of this application, not
necessary so to decide. There are, of course,
co-ordinate findings of fact that the relevant cause
of the loss of the goods was within the camp of the
stevedore, not the carrier, and there was a finding

that the stevedore was himself a responsible and

competent stevedore. That was a finding of

His Honour Mr Justice Yeldham at page 74.

My learned friend, Mr Emmett, referred to some

public policy considerations.	We would submit, first
of all, they do not arise for the reason just indicated.	In the next place, we would submit that the public
policy questions, if any, are questions of Malaysian
law, this being a bill, the proper law of which was the
law of Malaysia. It was issued in Malaysia for
shipment to this country and the case was approached
below on the basis that the proper law of the contract
was the law of Malaysia, so my learned friend's
submission has to be that this Court should grant
special law to give effect to a Malaysian public policy about construing bills of lading benevolently to
carriers or to shipowners. If it matte~ Malaysia is

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probably more a shipowning nation than a carrier's

nation - than a shipper's nation. Your Honours, in

our respectful submission, there is no occasion

after DARLINGTON FUTURES and DELCO to grant special

leave for any reason referred to in the affidavit

filed in support of this motion for special leave.

MASON CJ: No, but the argument advanced by Mr Emmett rather

moves beyond what is stated in the affidavit and

it suggests, if the argument be right, that there

has been a fundamental failure on the part of the

Court of Appeal to appreciate the true nature of a bill of lading in so far as it might be expected to impose obligations on the carrier after discharge

and that that infects the construction that has been

given to clause 8(2)(d) as well as 8(2)(a).

MR RAYMENT:  Yes. Your Honour, it was assumed for the purposes

of argument, we would submit, in the Court of Appeal

and it can be seen in the judgment that it was so

assumed, that the carrier's obligations would, but

for clause 8(2)(d), have comprehended a position

after discharge as a bailee and the court certainly did not approach the matter on the basis that there was no occasion to look at clause 8(2)(d) and that

apart from it the carrier would have been excused

from liability.

There was separate consideration given after

the matter had been resolved on the basis of clause

8(2)(d) to clause 8(2)(a) and in our respectful

submission that part of Their Honours' reasoning

is not in any way necessary for the decision, and
is so treated by Their Honours. At the top of page 43

the president says that he has already decided the

case, in effect, and it is not necessary to go further

but that he will discuss briefly some arguments that

were advanced. Half-way down 44 the court notes that

the "conclusion is not necessary for the result of

this appeal".

DEANE J:	Mr Rayment, to seek to make you be more specific, if
the case had turned on the last Lwo lines 0£ page 43
and the first four lines of page 44, would you then be able to dispute that it was an appropriate case
for the grant of special leave?

MR RAYMENT:  Yes, Your Honour. It still is, in our respectful

submission, just a question of construction of a

particular clause.

DEANE J: What, to say that before you get any liability after

discharge from the ship you must find a statutory
provision or clear language in the bill of lading?

That seems to be quite contrary to what you said

was common - - -

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MR RAYMENT: It would be wrong, but not necessarily a matter

for special leave, in my respectful submission. It

is, after all, just a clause, a particular clause in

a bill,not shown to be in common form.

DEANE J: Well, not really.

MR RAYMENT:  For example, the clause in SALMOND & SPRAGGON

was quite different. It provided in SALMOND & SPRAGGON

that the liability of the carrier, before loading the

goods and after discharge of the goods, would not

exceed that of an ordinary bailee and that was the way

the matter was approached in SALMOND & SPRAGGON. This

clause is quite different. It talks of the point at

which the goods are delivered or made available for

delivery and in a sense there is just a narrow question

• were they made available for delivery when taken over

the ship's rail.

But, Your Honours, what we primarily put about

8(2)(a) is that there is no occasion to review this
decision because of anything said about that matter.

Your Honours, in our respectful submission, for those reasons there would be no occasion to grant

special leave in this matter.

MASON CJ: Jes, Mr Emmett.

MR EMMETT:  Your Honour, just two points: in relation to the

question of Malaysian law, the court approached the matter on the basis that the applicable law was the

law of Australia because there is no indication that

the law of Malaysia was any different fromt.he law of

Australia so what was clearly being applied was the

law of Australia.

Secondly, the general point in relation to the

significance of the distinction between discharge and

delivery perhaps is encapsulated in the middle of

page 42, lines 14 and 15 where the learned president

says: 

The business of the carrier is to carry. It had completed that business when the goods

were discharged.

Now, that is an observation made not in the context

of 8(2)(a) but in the context of whether or not the
reasonable diligence question applies to the carrier
itself or whether it is not applicable in the present

case. May it please Your Honours.

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MASON CJ: Thank you, Mr Emmett. The Court will announce its

decision in this matter immediately after the

adjournment.

T4.	AT 10.19 AM THE MATTER WAS ADJOURNED
UNTIL LATER THE SAME DAY
UPON RESUMING AT 2.20 PM:
MASON CJ: The Court will grant special leave to appeal in

this matter.

MR EMMETT: If the Court pleases.

MR RAYMENT: If the Court pleases.

MASON CJ:  I should raise with yeu the ~uestion whether the

grounds stated in the notice af~·appeal are confined

to the matters that were raised in-the course of

argument this morning. ·..,.,

MR EMMETT:  It may well be that the present form of the notice

of appeal goes beyond - - -

MASON CJ:  Too far, yes.

MR EMMETT - - - the issues that we argued this morning.

MASON CJ: Yes, that was the matter that concerned me. We need

to make it clear that the grant of special leave is

confined to raising the matters of interpretation which

you invited the Court to consider in the course of your

argument this morning. Now, is it possible for you, in

the next, say, 10 - 15 minutes to have a look at the notice

of appeal and come back and discuss with us whether it

should be confined in any respect?

MR EMMETT:  We will endeavour to do that, Your Honour.

MASON CJ: For example, if you look at ground 10 in the notice

of appeal, that is a matter that we would not take on

board, that the Court of Appeal erred in holding that
the goods were properly and carefully discharged. That,

and other grounds, would seek to raise the issues of fact as to which were concurrent findings in the courts below.

MR EMMETT:  Yes. I accept that there are issues in the pres·ent

document that go beyond what we had argued.

MASON CJ: All right. I think it may be sufficient, Mr Emmett,

if I say that the grant of special leave is confined to

SlT 10 /7 /PLC	17	16/9/88
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grounds which would reflect the questions which you

raised in the course of argument this morning

MR EMMETT: Well, if the Court is content with that, I think

we would be.

MASON CJ: Yes, and you can re-form the notice of appeal so

that - - -

MR EMMETT: If ~ might have such leave as is necessary to

do that.

MASON CJ:  I do not think you need leave because this is

only a draft - - -

MR EMMETT:  Of course, yes, it has not yet been filed.

MASON CJ: Very well. There will be a grant of special leave

on that basis.

MR EMMETT:  May it please the Court.

AT 2.23 PM THE MATTER WAS ADJOURNED SINE DIE

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