Penn Elastic Co Pty Ltd v Sadleirs Transport Co (Vic) Pty Ltd

[1976] HCA 28

HIGH COURT OF AUSTRALIA

Barwick C.J., Stephen, Mason, Jacobs and Murphy JJ.

PENN ELASTIC CO. PTY. LTD. v. SADLEIRS TRANSPORT CO. (VIC.) PTY. LTD.

(1976) 136 CLR 28

15 June 1976

Contract

Contract—Carriage of goods—Statutory limitation of carrier's liability—Limitation in respect of goods entrusted under contract of carriage—Further limitation in respect of consignment of goods Meaning—Carriage of Goods by Land (Carriers' Liabilities) Act 1967, (Q.), ss. 2 "consignment", 6 (1).

Decisions

June 15.
The following written judgments were delivered: -
BARWICK C.J. I have had the advantage in this appeal of reading the reasons for judgment prepared in this matter by my brother Stephen. I agree with them. (at p29)

2. The statutory limit of the carrier's liability operates as a modification of the contract of carriage entered into by the consignor and consignee. If the carrier in fact carries a quantity of the goods entrusted to him by the consignor on the terms of the contract of carriage upon one vehicle, that quantity is by definition a consignment so as to attract in respect of the goods so carried a maximum liability of $200. The fact, if it be the fact that goods entrusted to the carrier under another contract of carriage, albeit with the same consignor, are carried on the same vehicle, will not affect the carrier's liability under each separate contract of carriage. (at p29)

3. The appeal should be allowed. (at p29)

STEPHEN J. The applicant for special leave to appeal, Penn Elastic Co. Pty. Ltd., was the consignee of goods, packed in a large number of packages, which it had entrusted to the respondent, Sadleirs Transport Co. (Vic.) Pty. Ltd., in Brisbane for transport to fourteen consignees in southern States pursuant to twenty distinct contracts of carriage evidenced by twenty separate consignment notes. All these packages were loaded on the one vehicle which overturned while on its journey south; all but one package were destroyed by fire. (at p29)

2. The applicant recovered against the respondent the sum of $1,820 in the District Court of Queensland but in an appeal to the Full Court this judgment was set aside and instead judgment for only $200 was entered for the applicant. (at p30)

3. The result of that appeal, contrasted with the judgment appealed from, reflects the divergent views taken of s. 6 (1) of the Carriage of Goods by Land (Carriers' Liabilities) Act, 1967 (Q.). This sub-section, which limits the liability of a carrier such as the respondent, provides in part:

"(1) A carrier shall not be liable for loss of or injury to any goods entrusted to him under a contract of carriage or as incidental to the carriage by land of a passenger for reward in an amount greater than twenty dollars per package or, in the case of unpackaged goods, per item of goods consigned or two hundred dollars per consignment, whichever is the less, unless, ..."

The remainder of the sub-section, concerned with the giving of statements as to the value of particular goods and the carriers' acceptance of increased risk in respect of such goods, is not of immediate relevance. (at p30)

4. The question raised by this application is whether the effect of the sub-section is, as the judgment of the Full Court would have it, to confer, in favour of a carrier, a limit of liability of $200 per consignment, regardless of the number of contracts of carriage under which goods are carried. "Consignment" is defined in s. 2 of the Act as meaning

"The quantity of goods carried at one and the same time in or on any one vehicle for any one consignor: The term includes the quantity of goods so carried as incidental to the carriage by land of any one person for reward". (at p30)

5. In the present case, all the parcels of goods the subject of all twenty of the contracts of carriage were being carried on the one vehicle when they were destroyed and the carrier contended, unsuccessfully before the learned District Court Judge but successfully before the Full Court, that the effect of s. 6 (1) was to limit its total liability to $200. The consignor contended, on the contrary, that the limit of $200 per consignment applied to each separate contract of carriage. Where, as here, there were many contracts of carriage the fact that all the goods formed one consignment, as defined, meant only that a limit of $200 applied to the goods the subject of each contract of carriage. (at p30)

6. If there be put to one side the verbiage introduced both to meet the case of the carriage of goods incidental to the carriage of passengers and to allow for the distinction between packaged and unpackaged goods, the operative words of the sub-section read:

"A carrier shall not be liable for loss of or injury to any goods entrusted to him under a contract of carriage ... in an amount greater than $20 per package or ... $200 per consignment whichever is the less ..."

I would understand this to mean that the limit of liability attaches to each contract of carriage; it becomes a term of that contract, imposed by statute (s. 9), and in the case of each such contract operates by reference to the number of packets or units and the number of consignments by which the goods the subject of that contract are conveyed. If all are conveyed in the one consignment liability cannot exceed $200; if in more than one consignment, it cannot exceed $200 per consignment. (at p31)

7. One starts with the notion of a need for limiting liability; one party to the carriage, the carrier, may otherwise, when it is too late and loss has been sustained, discover that, all unknowing, he has been carrying "articles of great value in small compass" and is liable for amounts quite out of proportion to the charges made for their carriage (see preamble to Carriers Act 1830 (U.K.)). To alleviate the position of the carrier, while preventing him from imposing upon unsuspecting consignors unduly restrictive limits of liability, legislatures have in many jurisdictions intervened in the bargain between the parties: Leslie, Law of Transport by Railway, 2nd ed. (1928), pp. 182 et seq. Arbitrary limits of liability have been imposed, the consignor of goods of special value being obliged to declare their value and pay increased rates if the carrier is to be liable for their special value over and above that limit. (at p31)

8. It is inherent in this concept of limited liability and of the consignor's opportunity to bargain for increased liability at the cost of an increased freight rate that the consignor should have the means of knowing what is the limit of the carrier's liability in the absence of special bargain. Section 6 (2) seems to recognize this by requiring carriers prepared to make such special bargains to exhibit notices, at the places where goods are delivered to them for carriage, "stating the substance of sub-s. (1)" and which will set forth the additional charges for acceptance of excess liability. If, however the respondent's contention be correct, the limit of liability will depend upon a matter beyond the knowledge and control of the consignor, namely the manner in which he aggregates for the purpose of carriage goods entrusted to him under various separate contracts; thus the consignor will remain in ignorance of the actual limit of liability and will be unable to determine whether or not he should bargain for an excess liability. The internal arrangements of the carrier will determine the limit; he will be able to vary at will the extent of his liability by his method of allocation of particular freight to particular vehicles. The present case affords an example; because the carrier chose to carry all the consignor's goods, consigned under twenty separate contracts of carriage, by one vehicle he was able, so he contends, to reduce by many times his total limit of liability. (at p32)

9. As I would interpret s. 6 (1), the limit of liability will always be clear, within limits, to the parties at the time when the goods are entrusted to the carrier. In each instance it will be the contract of carriage to which a limit of liability is attached and if the goods are in packages the extent of that limit will depend upon the number of packages, being $20 per package up to a maximum liability of $200; if the goods are unpackaged the unit of liability will again be $20 but in this case it will depend upon the number of items of goods, once more limited to a maximum of $200. Whether the carrier choses to carry the goods the subject of one contract of carriage on one or several vehicles he will know that in respect of each vehicle, that is to say each consignment, his liability under that contract cannot exceed $200 or $20 per parcel or item whichever is the less; at the same time the consignor will know that, whether carried on one or more vehicles, if his goods are damaged no lower limit of liability than $20 per parcel or unit or $200 per consignment, whichever is the less, will apply. (at p32)

10. It is noteworthy that s. 6 (2) calls for the exhibiting, "in a conspicuous and public place" where goods are entrusted to a carrier, of a notice stating "the substance of subsection (1) ". Every carrier prepared to bargain for excess liability must exhibit such a notice. Only if the construction which I have adopted be given to sub-s. (1) will that notice convey to intending consignors any fair picture of what will be the carrier's liability in the absence of special bargain. (at p32)

11. The foregoing considerations do, I think, suggest that to give to s. 6 (1) the meaning which I favour gives to it an effect which is simple and rational in operation and one which accords with the first impression that its words would convey if read by an intending consignor when exhibited "in a conspicuous and public place" in the carrier's premises (sub-s. (2)). More importantly, however, I regard that meaning as giving full and proper effect to the words of the sub-section, understood according to their sense and ordinary usage. (at p32)

12. For these reasons I would allow the appeal and would restore the order of the learned District Court Judge. (at p32)

MASON J. I am in agreement with the reasons for judgment which have been prepared by Stephen J. and, accordingly, I would allow the appeal and restore the order of the learned District Court judge. (at p33)

JACOBS J. I agree with the conclusion of Stephen J. and with his reasons. The difficulty in construction of the statutory provisions lies in the definition of "consignment" in s. 2 as "The quantity of goods carried at one and the same time in or on any vehicle for any one consignor". If there had appeared the words "under a contract of carriage" after the word "consignor" there would be no difficulty. But in my opinion these words are naturally to be implied from the use of the word "consignor". A person cannot be described as a consignor until he has consigned goods for carriage to a consignee. In the context and purpose of the Act the relevant carriage is a carriage for reward, that is to say, under a contract of carriage. "Consignor" therefore refers to a consignor under such a contract. (at p33)

2. A coincidental identity of consignor under a number of contracts of carriage does not make the goods a single consignment simply because they happen to be carried at one and the same time in or on a vehicle. There remain as many different consignments as there are contracts of carriage provided all the goods consigned under a contract of carriage are carried in or on one vehicle at one and the same time. The purpose of the definition is to provide that there may be more consignments than there are contracts of carriage when goods consigned under any particular contract of carriage are carried by the carrier in more than one vehicle. Its purpose is to alleviate in favour of a consignor the effect of the limitation otherwise imposed by s. 6 on his right of recovery against a carrier. (at p33)

3. I would grant special leave to appeal, allow the appeal and restore the order of the District Court. (at p33)

MURPHY J. I agree with the reasons for judgment of Stephen J. Special leave should be granted, and the appeal allowed. (at p33)

Orders

Application for special leave to appeal granted.

Appeal allowed with costs.

Order of the Supreme Court of Queensland set aside and in lieu thereof order that the appeal to that Court be dismissed with costs.