PS Chellaram & Co Limited v China Ocean Shipping Company

[1991] HCATrans 104

k	".J, "UST!lillA,,,r
-~»$~----

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S6 of 1991

B e t w e e n -

P.S. CHELLARAM & CO LIMITED

Applicant

and

CHINA OCEAN SHIPPING COMPANY

and FIVE STAR SHIPPING &

AGENCY COMPANY PTY LIMITED

Respondents

Application for special leave

to appeal

BRENNAN J
DEANE J

TOOHEY J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 19 APRIL 1991, AT 4.00 PM

Copyright in the High Court of Australia

Chellaram 1 19/4/91

MR A.W. STREET: If it please the Court, in this matter I

appear with my learned friend, MR D. FARTHING.

(instructed by Sly & Weigall). Your Honours, there

are three matters which the applicant seeks to

raise in this matter. The first, if I can describe

it generally, they have been identified in the

affidavit in support.

BRENNAN J:  We will take appearances first, Mr Street.

MR STREET: If Your Honour pleases.

MR A.R. ASHBURNER:  May it please the Court, I appear in

this matter for the respondents. (instructed by

Norton Smith & Co)

MR STREET:  Your Honours, the three different areas of

attack been described in the affidavit in support.

There is one relating to a time bar; one relating

to a Himalaya clause and one relating to the

estoppel.

The sequence in which His Honour

Mr Justice Gleeson, with whom Mr Justice Samuels

agreed was in that order and for that reason I

would seek to follow the same order.

At the outset, can I indicate this: that the matter of importance that the applicant says arises

in relation to the time bar flows from certain

observations of Mr Justice Mason, as he then was,

and Mr Justice Jacobs in The New York Star decision

relating to delivery of goods by a carrier without

the surrender of the bill of lading and involves, in that regard, the importance of the object of a

contract and the object in particular of a contract

for the carriage of goods in construing a clause

such as the clause in the present case. And all

the more so that area is one in which the applicant

seeks to develop the argument that the recognition

of the importance of the object of the contract by

the court is, in essence, giving effect to the

commercial expectations and objective intentions of

the parties.

In the present case, the applicant submits

that it could not conceivably have been within the

commercial expectations of the parties or within

the objective intentions that under this contract
there would be handed over the goods without the

surrender of the bill of lading by the respondents.

Could I, at that point, Your Honours, just

hand up to Your Honours before I go to the judgment

in respect of this first point on the time bar four blown-up copies of the bill of lading, exhibit A in the court below? It is really for this purpose, at

Chellaram 2 19/4/91

the outset, in construing the clause and

identifying the object of the contract that I seek

to do so because if Your Honours go to the face of

the bill, in relation to the right-hand top side

one will see the notation "Received in apparent

good order and condition." The next sentence is

absolutely critical. It identifies what the
applicant says is the object of the contract.

One of the Bills of Lading must be surrendered duly endorsed in exchange for the goods or delivery order.

That object, and if I could identify this at

the outset, is materially different, as His Honour

Mr Justice Stephen identified from The New York

Star clause relating to the surrender of the bill

of lading. In The New York Star Mr Justice Stephen

identified that there it was at the option of the

carrier whether or not the bill of lading was

surrendered.

In the present case, it is apparent, in my

respectful submission, right from the outset, apart

from the provisions to which I will seek to take

Your Honours in a moment, that the object of this

contract, recognized as such in the receipt clause,

was that the bill of lading was to be surrendered

in exchange for the goods.

Can I take Your Honours to the judgment of

His Honour Mr Justice Gleeson, the Chief Justice,

at page 57 in relation to the time bar? And could

I indicate to Your Honours that, in essence,

the Chief Justice and Mr Justice Samuels held that

the second sentence· of clause 10(2) at page 57 was
the effective time bar and held that there was no

other time bar, either so far as the third clause

is concerned because of facts not being made

out to support that. On the construction of the

first sentence it was held that there was not a

delivery and therefore that first sentence does not

apply.

But, Your Honours, the point that was made in

the affidavit in support and the point that the
applicant makes at the outset is that on reading

that clause:

the Carrier shall be discharged of all

liabilities under this Bill of Lading -

that language, under this bill of lading, was

given no meaning or content by the court

whatsoever. The liability that emerges in the

present case where goods are handed over

unauthorized without the surrender of a bill of

Chellaram 3 19/4/91

lading is a conversion. It cannot, on any view of

it, be said to be a liability under this bill of

lading. And the point can be driven home

dramatically by going to the next clause, if

Your Honours would do so, because in the next

clause there, in contrast, is:

shall be discharged from all liability

whatsoever in respect of the goods.

The contrast in relation to the nature and the operation of that time bar is immediately apparent.

Not only does it operate in respect of "all

liability whatsoever" which is broader, on its

face; it operates in terms in respect of the

goods.

There is no reasoning either in the judgment

of the Chief Justice or Mr Justice Samuels that

either grapples with or reconciles the immediate

arguments that flow and which the applicant says

flow from the apparent provisions set out in
contrast there in subclauses (2) and (3). To give

effect to the language used, which the court would

strive to do, under this bill of lading the

discharge of all liabilities must be given some

content and its content and meaning is different,

on its face, from what appears in subclause (3).

Your Honours, the essence of the reasoning of

Mr Justice Gleeson in relation to this sentence can

be found at page 64 in the judgment and what

His Honour says at page 64 at about line 10 is

this:  he identifies the first sentence of

subclause (2) cannot be made out and therefore it

is the second sentence to which one must go. What

he does, in analysing the second sentence, is look

to the words "total loss of goods".

I might pause here to identify that the applicant would further submit even if the language

did not include this liabilities under the bill of

lading proposition - and conversion, plainly, not

being a liability under the bill of lading which

would arise in the present case - "total loss of

goods" is, again, a matter which His Honour has

failed to reconcile with the nature and object of

the contract which is referring to in Darlington

and Nissho Iwai.

But can I just read on, Your Honours, in

relation to what appears from about line 18 on
page 64:

It obviously includes, for example, physical destruction of the goods, or their loss at sea, so that they are unavailable for

Chellaram 19/4/91

delivery. That is why an arbitrary time is

fixed for the commencement of the limitation
period. In the related field of marine
insurance the phrase "actual total loss"
includes destruction of the thing insured and

also a case where the insured is irretrievably

deprived thereof.

And he cites the passage which I will not seek to

read to Your Honours. And here, between lines

approximately 7 and 15 is the reasoning of the

Chief Justice in respect of the application of this

clause:

In the context of this Bill of Lading

there is no reason why handing the goods over

to someone who was not entitled to possession of them, and thereby depriving the true owner of them, could not also result in total loss
of the goods. That is what happened in this

case. The respondent's action, and its claim

for damages, were predicated upon the

assumption that the respondent was
irretrievably deprived of the goods by reason

of their misdelivery and hereby lost their value. The damages awarded by the learned

trial judge were calculated on the basis of

the value of the goods.

Accordingly I consider that the

appellants were entitled to rely on the second

sentence of clause 10(2).

Now, Your Honours, the matter of error is one which the applicant has already sought to focus on.

The matter of importance which the applicant seeks to support in respect of this time bar clause, apart from its construction, is this: that

His Honour does not even do - if I can put it in

colloquial terms - lip-service to the principles

applied in Darlington in addressing the object and

nature of the contract and, here, the nature and

object of the contract, as I sought to identify

from the face of the bill of lading that

Your Honours have seen, was one in which the

surrender of the bill of lading in exchange for the

goods was fundamental to the nature of the

contract.

Indeed, Your Honours, it is perhaps reinforced

in that regard when you go back to clause 10,

subclause (1) speaks of that very type of conduct

in relation to what is anticipated will take place,

reinforcing, again, the object of the contract.

Your Honours, in The New York Star, 139 CLR at

page 282 - and I believe, Your Honours, that The.

Chellaram 5 19/4/91

New York Star, at page 231, was one of the judgments which was to be available to

Your Honours, and if Your Honours have it -

BRENNAN J:	What is the name of the case?
MR STREET:	I apologize, Your Honours. It is Port Jackson

Stevedoring v Salmond & Spraggon, and I called it

The New York Star. I apologize, Your Honour, that is 139 CLR, and the passage to which I was seeking

to take Your Honours in support of the proposition
of this area being one of importance for a

construction appears first at page 282 in the joint

judgment where, at about point 2, Their Honours

said:

A delivery of the goods to a stranger without

requiring the production and exchange of a

copy of the bill of lading would be an act

which, even though unauthorized by the

carrier, might create a vicarious liability in the carrier. Further, it might be outside the

immunity provisions of the bill of lading on

the true construction of the latter.

And he there refers to the Judicia-1 Committee in relation to a decision which, in my respectful

submission, is inconsistent with that decision of

the Court of Appeal in the present case to the

effect of imposing a liability on a carrier

liability and holding the carrier was unable to

rely upon the terms where there was a failure to

present the bill of lading and delivery.

Your Honours, I did not indicate this at the

outset but Your Honours would recall from the

judgment that this was a case where the surrender -

at least, the handing over of the goods by the

respondents occurred in the matrix where the

respondents had taken an indemnity from the

stranger relating to that conduct. So that the

nature of that unauthorized act was one in which

the respondents, recognizing the nature of what

they were embarking upon, obtained the benefit of

an indemnity for the respondents and then proceeded

to deliver the goods contrary to what must, in my

respectful submission, have been the object in the

bill of lading.

Your Honours, at page 283, in the joint

judgments, after referring to the distinction

between The New York Star case and the Sydney City

Council v West and, in essence, the distinction,

Your Honours, which does not arise in the present case is that the acts there concerned were in

performance of the contract of carriage. How can

the handing over of goods, if I could· put it

Chellaram 6 19/4/91

rhetorically, constitute an act in performance of

the contract of carriage in the present case. If

Your Honours go to page 283 at about point 2:

In the present case the goods were

allowed to be loaded on to the thieves' truck

but the loading was not an unconditional but mistaken delivery of the goods. The loading

was on condition that a delivery order and

copy of the bill of lading be exchanged for a

gate pass in respect of the goods. The

thieves, once the goods had been loaded, drove

off and forced their way through the gate.

The negligence lay in a system which allowed a

conditional loading of the goods, not in
delivering the goods without requiring a copy
of the bill of lading.

Your Honours, Mr Justice Stephen, likewise, makes reference to the matter in his judgment at

page 263 where, again, His Honour does not suggest

it cast any doubt - at about point 5 - on the Sze

Hai Tong Bank v Rambler Cycle decision - - -

BRENNAN J: Before you go past page 283, Mr Street, what is

the distinction that is being drawn at about

point 6 on that page where Their Honours say:

It follows therefore that the appellant stevedore did not as agent for the carrier

misdeliver the goods; rather, it as bailee

failed to take reasonable care of the goods.

What is the distinction being drawn there?

MR STREET:  Your Honour, I think the distinction being drawn

there is what I was seeking to identify, that is,

conduct in the performance of the - or purported

performance, I think, is the language as it has
been used - purported performance of the contract,

as opposed to conduct that is outside the intended

performance of the contract.

Your Honours, that was the distinction which

Your Honours will recall in the Sydney County

Council v West case which has not been overruled by

Darlington but focused upon conduct that was going

outside the conduct - purported performance of the

contract, and, here, one could not get a better

example of conduct going outside the intended

performance of the contract, from the face of the

bill.

Your Honours, those passages in The New York

Star are ones in which the approach adopted by the

Court of Appeal was not to give any weight to the

observations that have been made by ·Their Honours

Chellaram 7 19/4/91

in The New York Star case and if one goes to Nissho

Iwai v Malaysian International Shipping

Corporation, 167 CLR 219 - can I again say that

this was a case in which the alleged conduct was

conduct again in the purported performance of the

contract. Mr Emmett, at page 226, is referred to

as citing what was contended to be:

the main object of the contract of carriage

was the delivery of the goods to the owner at

Sydney.

This ~as not one where the conduct is conduct by

way of the handing over goods without the surrender

of the bill of lading.	But what Their Honours do,
at page 227 -

BRENNAN J:  We seem to have an Australian Law Journal Report

reference.

MR STREET:  I do apologize, Your Honours. It has been -

BRENNAN J:  Would you just identify the paragraph out of

which you were taking the quote?

MR STREET:	If Your Honours would go to the paragraph immediately after the quote from Darlington Futures
v Delco.  Your Honours, I do not seek to read that
quote but it is clear from what has already been
put, that the nature and object of the contract is a matter on which the applicant relies heavily in
this regard.  But reading on:

The context in which cl 8(2) has to be

construed includes, as Mr Emmett submitted,

the carrier's agreement to deliver the goods

to the owner at Sydney. But, relevant as that

object is in the construction of cl 8(2), the

meaning of that provision ultimately depends on its language, read in context, and not on

any a priori notion that the non-delivery of

goods was not intended to be protected. In

determining whether an exemption clause should

be construed so as to apply to an event which has defeated the main object of the contract,

much must depend upon the nature of the events

which the clause identifies as giving rise to
the exemption from liability.

Well, Your Honours, that passage there focuses

Your Honours back to clause 10(2) and the events in

the present case which are the handing over of the
goods without the surrender of the bill of landing,
and one asks, "What in that clause identifies
events intended to be caught relating to the
handing over of goods without delivery of the bill

of lading?" Indeed, if anything, the clause, on

Chellaram 8 19/4/91

its face, by reason of that reference to "all
liabilities under this bill of lading" makes it

clear, in my respectful submission, that it was not

is a matter, in my respectful submission, of significance and importance.

intended to have that operation and the legitimate contract

application of the principles in Darlington v Delco

The function of the object of the contract, as

I sought to set out at the outset, which the Court recognizes in seeking to construe such clauses, is

to give effect to that commercial expectation and
it flies in the face of the commercial expectation
and objective intention of the parties in the
present case for one to say that the handing over

of goods without the surrender of the bill of

lading here could have been intended to be

protected by clause 10(2) and, in my respectful

submission, that proper function of Darlington,

taken together with the passages to which I

referred in the The New York Star and the existence
of the Judicial Committee's decision in that

regard, is a matter in respect of which, in our

submissions, would warrant the grant of special

leave.

Can I come to the second ground, if

Your Honours please? The second issue sought to be

raised by the applicant relates to the Himalaya

clause which extends the benefit of the provision
under clause 10(2) to the second respondent, the

ship owner's local agent. That Himalaya clause,

Your Honours, is found at page 56 in the

application book in the judgment of the

Chief Justice.

BRENNAN J:	Mr Street, it is quite appropriate, of course, to take it in the order which you have suggested
but is it right to say that this problem would not arise in the event either, (a) that you succeed on
the first point or, (b) if you do not succeed on
the first point, you do not succeed on the last point?
MR STREET:	It only emerges if I do not succeed either on

the estoppel or the time bar proposition,

Your Honour is quite right in that regard, and the

only reason I sought to deal with it next was to

follow the sequence of the Chief Justice. If

Your Honours please, I will seek to move directly

into the estoppel and come back, if that would be

more suitable, to the Himalaya clause.

Your Honours, in relation to the estoppel, the

attack which has been identified in the affidavit

was the erroneous use of the examination of

Chellaram 9 19/4/91

detriment in determining whether or not the

prerequisites of assumption and reliance were made

out and, again, what I would seek to do is focus

primarily on the judgment of the Chief Justice, and

I will take Your Honours, so far as necessary, to

the judgment of the President, Mr Justice Kirby.

Can I just develop that slightly further

before Your Honours go to the judgment to this

extent, that we say not only did the court fail to
give effect to the clarity of distinction between
the role of determining whether an assumption was
brought into existence in the mind of one party

from communications or both parties and the

question of reliance, but the court also brought
into account notions of contract as being

determinative of whether the estoppel could be made

out. And, again, that is a matter which, in my

respectful submission, is one of significance and

general importance in respect of the proper role of

notions of contract in this area of estoppel.

The third area of attack which is sought to be

developed in relation to this estoppel and, again,

is one of general importance, is the application of

the decision of His Honour Mr Justice Dixon, as he
then was, in Thompson v Palmer in respect of the

area of duty to speak or duty to act where, by

imprudence, one has led a party to their detriment

to rely on an assumption.

Albeit that Mr Justice Kirby did address the area of the duty to speak and the last category

picked up in Thompson v Palmer by Mr Justice Dixon

in the series of estoppels, assuming one

over ..... doctrine, but His Honour

Mr Justice Kirby, who addressed that question which

the Chief Justice did not, focused on it upon the

basis of a duty to speak in respect of the time

bar, not as His Honour had held in relation to the

making of a settlement offer.

Can I hand up to Your Honours four copies of a

chronology? That chronology relates to the events

that took place in respect of the communications

between the parties, and if I could just, at the

outset, identify for Your Honours that at the

bottom of the page Your Honours will see the time
bar expiration of 6 April 1986. Could I just

indicate that that second sentence time bar

expiring on 6 April 1986 is an error in reasoning

that has been applied by both the President and the

Chief Justice in their approach to whether the

estoppal was made out. In the reasoning that they

adopted - and obviously this is one matter not of a

matter of general importance but is a matter, none

the less, that I seek to identify at the outset,

Chellaram 10 19/4/91

that that expiry of what the court held was the

exclusion clause under clause 10(2) which, as Your

Honours would, I believe, be aware, was only raised

during the course of argument in the Court of

Appeal. This provision clause 10(2) which

Their Honours found was the time bar was only

raised with leave by the Court of Appeal over

objections founded on what was said by

Justice Gaudron and Justice Toohey in Verwayen but

none the less that issue was raised. But Their

Honours, when approaching this area of estoppel, have approached it on the basis of a 12 month

period from the date of delivery and not the

11 month period from the date of receipt which is

what clause 10(2) focuses upon.

Your Honours, in the judgment of the

Chief Justice at page 66, His Honour first of all picks up the facts and circumstances relied upon in

the judgment of Mr Justice Kirby and that picks up

an error to which I referred. He says:

Carruthers J based his finding principally

upon two conclusions of fact with both of

which I find myself respectfully unable to
agree. First, his Honour held that the

communications between the solicitors for the

parties which occurred over the months

following the misdelivery of the goods, and

which petered out somewhat inconclusively not

long before the expiry of the limitation

period -

that, Your Honours, is erroneous so far as what

Their Honours, in fact, held was the limitation period -

gave rise to, or were based upon, the common,

although tacit, assumption that, pending the

resolution of the settlement negotiations,

time would not run for the purposes of the

limitation provisions. His Honour also found

that the solicitors for the respondent, in

making that assumption, relied upon what must
have been an implied representation by the

solicitors for the appellant that they would

not rely on the time bar to the extent that
the limitation period coincided with the
period of the settlement negotiations.

Now, with respect to His Honour, that is not,

in fact, what His Honour Mr Justice Carruthers said

precisely, which appears at page 17 in the

application book. What His Honour said was this,

at line 40, and this is after analysing the

correspondence:

Chellaram 11 19/4/91

The view which I have reached in this

case is that there was a basic assumption

(albeit tacit) adopted by the solicitors for

both parties that pending the resolution of settlement negotiations, time would not run

for the purposes of the limitation provisions.

His Honour continued and I do not seek to take

Your Honours in detail through what appears from

pages 17 through to 19, but if one goes to the

bottom of page 19, His Honour continues at line 25: Such a scenario could not stand with an

assumption that if there were no settlement

offer from the defendants and no communication

from the defendants to Chellaram that a

settlement offer would not be forthcoming,

then the defendants were at liberty to plead

the time bar.

In fact, Norton Smith & Co were unable to

elicit a settlement offer from their clients

and they did not communicate this fact to

Chellaram's solicitors. Ultimately coming to the realisation that settlement was not to be

achieved, Chellaram's solicitors then

commenced proceedings out of time and the time

bar was pleaded. Thus, in my view, the

criteria stated by Mason CJ and Wilson J have

all been established. I am satisfied that

Chellaram's solicitors adopted the assumption

to which I have referred; that the defendant's

solicitors encouraged the adoption of that

assumption and Chellaram's solicitors relied

on that assumption to its detriment, to the

knowledge of the defendants' solicitors.

Could I just, before I go back to the judgment

of the Chief Justice, draw Your Honours' attention

to one further passage, and Your Honours will see

that at on page 21, at about line 8, His Honour

addresses the question of unconscionability in

order to give rise to an equity to found the

estoppel, in accordance with the principles

discussed in Verwayen, and Waltons v Maher.	And at
page 22 point 5 His Honour held that that

representation was unequivocal in so far as appears

at line 8. His Honour continues at line 10:

A final aspect of this matter should be

specifically dealt with. That is the question

whether the defendant's solicitors were under

a duty to inform Chellaram's solicitors that

no settlement offer would be forthcoming. It

will be recalled that Mr James was unable to

elicit an offer from his clients, although he

had made a recommendation to that effect. I

Chellaram 12 19/4/91

think that the circumstances did require

Mr James to inform Chellaram's solicitors to

that effect, prior to the expiration of the
time bar. It must have become apparent to

Mr James that Chellaram's solicitors were

labouring under the belief that an offer would

be forthcoming. By the passage of time and

the failure of the defendants to instruct

their solicitors accordingly, that belief

developed into a mistaken belief. The

mistaken belief was never corrected. Thus, as

an alternative to promissory estoppel,

Chellaram has also made out, to my mind, an

estoppel by silence.

And His Honour, over the page, deals with it in

another way by way of being "lulled into a false

sense of security".

Your Honours, going back to what was said by

the Chief Justice, at page 67, His Honour focuses

on what was described correctly, as His Honour

refers to it as a "critical communication" by

His Honour, Mr Justice Carruthers - at page 67,

about line 2, and says:

The context in which this statement was made, as his Honour observed, was that the

appellant's solicitors repeatedly requested

the solicitors for the respondent to refrain

from legal action, and, in particular, not to

commence proceedings in rem, for a time

sufficient to allow the matter of settlement

to be pursued.

If it be correct to conclude, as

his Honour did, that the statement set out

above carried with it an implied undertaking

not to rely upon the strict terms of the

provisions of the Bill of Lading giving rise

to a period of limitation, then I find it

difficult to understand why the question is

one of estoppel at all. I would have thought

the issue would have been one of contract.

There would be no problem about consideration.

Here, Your Honours, one is bringing into view the

question of His Honour focusing upon the

consequence of the reliance on the assumption in so far as looking to whether or not the assumption was

made out and taking into account considerations of

contract in that regard.

On the interpretation placed by his Honour

upon the communications, the appellant's

solicitors were telling the respondent's

Chellaram 13 19/4/91

solicitors that, if they would agree to delay

commencement of proceedings for the time

being, the appellant's solicitors would not

rely on the time bar.

Well, Your Honours, again, that, in my

respectful submission, is focusing again on the

effect, not focusing on the tests that the Court

has identified in Legione v Hateley and were

identified by Lord Justice Kay in Low v Bouverie as

to whether or not an assumption was made out.	But
His Honour continues:

It is perfectly clear that a limitation period

can be waived or suspended by agreement, and

this often occurs to permit settlement

negotiations to proceed.

And he cites Tetley.

If, as part of an attempt to persuade the respondent not to commence proceedings, the

appellants by their solicitors were saying

that they would not rely upon the time bar, then it might be thought that the answer to the defence now in question would lie in

contract rather than in estoppel. However,

the argument was never pressed to that length.

Your Honours, the difference between estoppel

and contract in the present case, being one of

unconscionability, which founds the estoppel, is

directly inconsistent with this notion of contract

that His Honour was addressing his mind to in

looking at whether or not an estoppel was made out,

and the distinction,· in my respectful submission,

is critical because when one goes over to the page

where His Honour starts actually dealing with this

question of the assumption, he says - page 68:

I find myself unable to accept that the

communications from the solicitors for the	appellants contained any promise or representation, express or tacit, or
manifested any common assumption, of the kind
upon which the respondent now finds it necessary to rely.

His Honour, having said that, then presumably goes on to identify the reasoning for it, and His Honour

says:

Indeed I am still not entirely clear as to the

exact nature and content of the representation

or assumption said to have been relied upon.

It was expressed in argument in this Court as

being a representation that it would not be

Chellaram 14 19/4/91

necessary for the respondent to commence

proceedings until settlement had been fully

explored.

At line 7, where His Honour cited:

a representation that it would not be

necessary for the respondent to commence

proceedings until settlement had been fully

explored -

that, Your Honours, is precisely the language used

in the letter of 29 April which Your Honours find

at page 14 in the application book, if Your Honours

go to about line 10, and I have not sought to take

Your Honours in detail through the communications,

but one can see at line 10:

We trust, bearing in mind that the amount

involved is relatively small, it will not be

necessary for your client to commence

proceedings until settlement has been fully

explored.

BRENNAN J:  Mr Street, I can understand that you would wish

to refer to the facts, of course, but ultimately

you have got to satisfy us that there is an issue

here which justifies the grant of special leave.

MR STREET: Quite so, Your Honour, and I was seeking to just

arrive at it because His Honour, in coming to the

question of the application of detriment, it is

here, at page 68, that he then focuses on the

effect rather than on - and making out the

assumption.

BRENNAN J:  What is the proposition of the error that

infects the judgment so far as estoppel is

concerned?

MR STREET: Firstly, that His Honour the Chief Justice at

page 68, in determining whether or not the

assumption had been made out, in what he looks at

between lines 8 and 15, is focusing upon effect or,

in other words, the detriment rather than focusing

upon whether or not an assumption was made out.	In
other words, not applying the principles laid in
Legione v Hateley and in one of focusing upon
whether, on a reasonable construction, an
assumption clearly emerges and ignoring, in my respectful submission, the analysis that had been identified to be embarked upon in determining
whether an assumption was made out.

The importance, I seek to advance, in that

regard is this, that the demarcation between

detriment and its proper function in determining

Chellaram 15 19/4/91

whether there is an equity that founds an estoppel

is of general application and of general importance

and that the analysis and reasoning of the

Chief Justice in the present case brings that into

an area of, in my respectful submission,

inconsistency with the correct approach that should

be adopted in that regard.

Its importance is further weighed, in my

respectful submission, by the bringing into account

of the motions of contract which again is, in my

respectful submission, one of importance in

determining whether there is an equity that founds an estoppel has been made out, bearing in mind the distinction to be drawn between the foundation of

principles of contract and foundation of principles

of estoppel and unconscionability.

Thirdly, the area in respect of which

His Honour, in my respectful submission, the

Chief Justice has erred is in failing to give any

effect or content to that last series of estoppels

referred to by Mr Justice Dixon as he then was in

Thompson v Palmer which were picked up by both

Mr Justice Deane and Justice Gaudron in Walton

Stores v Maher in respect of the duty to speak

where, through imprudence, there have been a

proximate cause of the adoption of an assumption

which has given rise to a detriment.

That third category is one which, in my

respectful submission, is again an area of general

all when one goes to what was said by the President

importance and an area of general application which

in relation to the question of duty to speak. The

President focused upon not on whether the duty was

to speak as to there being an offer to be made or

not made but a duty to speak to say whether there

is a time bar running and that, in my respectful

submission, did not give effect to what was the

contended assumption. So, His Honour the President	addressed the wrong question. His Honour the Chief
Justice with whom Mr Justice Samuels agreed, did
not address the question at all. The area of duty
to act in relation to an assumption in respect of
which the conduct of the respondents was a
proximate cause of its adoption and the
consequential detriment is one, in my respectful
submission, which arises in the present case and is one of general application and of importance.

Your Honours, beyond putting those submissions

in relation to the estoppel, all I would seek to

advance would be taking Your Honours to the points

referred to to reinforce the contended error in

Chellaram 16 19/4/91

that regard, but I do not seek to take Your Honours

to that unless Your Honours so desire.

Can I then, Your Honours, come back to the

third question which was the Himalaya issue which I

identified? Your Honours, that Himalaya clause is

one which I sought to identify as giving the

benefit of the exclusion clause to the second

respondent and the clause itself is contained at

page 56.

Perhaps I can accelerate the arguments of general application of importance because nowhere

do Their Honours address the question fully or in

detail. His Honour the Chief Justice makes the

assumption that it extends at page 60 at point 7

and the President touches the matter, and really no

more, at page 76 point 15 where he refers to the

"Himilaya" clause. The attack that was made at

first instance and the attack that the applicant

seeks to advance is this, and that is that two of
the prerequisites - fundamental prerequisites
identified by Lord Reid in Midland Silicones v

Scruttons emerge for consideration in the present case relating to, firstly, whether the Himalaya clause made clear the intended extension of the

benefit of the so-called contract to be found in

that clause to the respondent in the present case.

And if I could, in a nutshell, put that submission

in this way: the Himalaya clause did not make
clear that the second respondent could, without
relying on the bill of lading, hand over goods not
in reliance upon the bill of lading but then seek,

at the same time, to get the benefit of the bill of

lading which it did not act on the basis of. We

say either the clause does not make clear that

there is a contract intended to extend that type of

benefit to the second respondent in respect of that

conduct or, alternatively, that the element of

consideration which is the subject of conflicting

views in the High Court, and the view of the

Chief Justice Sir Garfield Barwick having been

adopted by the Privy Council, in respect of the

bringing into existence of a binding arrangement as a result of the performance of intended acts by, in that case, a stevedore.

Your Honours, here in the present case what

performance of intended acts could be said to

satisfy the requirement of consideration where the

act relied upon is one of delivery of the goods

without surrender of the bill of lading. That area

of the need for consideration in the function of

performing some act was fundamental to what was

was said by Lord Wilberforce in The·Eurymedon, and

said by the Chief Justice and which was adopted by

Chellaram 17 19/4/91

it was also the subject of the dissenting view by

His Honour Mr Justice Stephen. But the significant

aspect in this regard is that these issues relating
to the Himalaya clause are ones which - the

applicant contends that the observations made by

Justice Stephen and Justice Murphy relating to

public policy directly emerge and they emerge in

this way:  Your Honours will recall in Nissho Iwai

v Malaysian International Shipping Corporation,

167 CLR, at the end of the judgment of the High

Court there is reference that special leave had
been granted on the understanding that the issues

of public policy referred to by Justice Stephen and

Justice Murphy would emerge.

In the present case, the applicant submits

that in determining whether the Himalaya clause
extends to satisfy the requirements of Lord Reid in

Midland Silicones v Scruttons, whether it is clear that it intends to extend the benefit and whether

or not the element of consideration is made out,

that that element that that role of public policy referred to by Justice Stephen and Justice Murphy have a role to play, and their role to play in that

regard is one requiring strict interpretation and

compliance with those prerequisites.

The strict interpretation of such a Himalaya

clause, Your Honours, is what the applicant would

contend is the function to be performed by the

public policy observations that were referred to by

Justice Stephen and Justice Murphy in respect of

the operation of the Himalaya clause.

Your Honours, .I do not seek to reread the

passages but Your Honours will recall that the

observations made by Mr Justice Stephen, with whom

Mr Justice Murphy agreed, were to the effect that

Australia was a shipper's nation as opposed to a

ship owning nation; that there were

considerable -

BRENNAN J: Yes. Well, I think we are familiar with that.

MR STREET: Your Honours, I will not labour that. But,

Your ·Honours, can I advance it in this way: the

US Supreme Court in dealing with the Himalaya

clause said that a strict construction was to be
adopted in so far as the US approach to this area

of the law is concerned. That that approach is

applied is clear from the Ninth Circuit's decisions

applying the US Supreme Court in Herd v Krawill,

1959 AMC, 879, is the citation which I would seek

to give the Court but it is in the US Reports as well and it was cited in The New York Star. But

what was said by Mr Justice Whittaker, with whom

the eight other members agreed, that a clause of

Chellararn 18 19/4/91

this nature is to be strictly construed. It would

accord with international uniformity for Australia,

in that regard to adopt a similar approach in
strictly construing such Himalaya clauses in their

intended extension of benefits to third parties

after discharge of goods, and it is that area that

applicant says, is called into play.

the public policy observations raised by

Likewise, in Canada, the Supreme Court of

Canada in a decision of Ito International v Milda - and again, it is referred to in the affidavit in

support - have adopted a requirement of clear

satisfaction of the prerequisites laid down by Lord

Reid which include a clear intention to extend the benefit and the element of consideration in finding the necessary Himalaya clause is made out.

That area of the operation of the Himalaya

clause is one which I should identify to

Your Honours, that there is a special leave application that has been filed from Perth raising

a challenge in relation to a Himalaya clause and

its operation but, having been counsel for the

respondent in that case, could I just say that the

Himalaya clause there gives rise to questions of section 11 of the Law of Property Act which extends

third party benefits so it is not a case which will

any statutory provision dealing with the extension of the third party benefit.

give rise to the same open consideration of the without

Your Honours, to the extent that one is to

look at the reasoning adopted in Trident v McNiece

in saying that the element of consideration is no

longer necessary, one still is left - - -

BRENNAN J:	Has that gone too?
MR STREET:	No, Your Honour, and I certainly do not suggest

that it has gone that far but what I was going to

seek to put is this, that none the less that would

be area of material general importance, if it
were - Your Honours, I sought to raise it in so far
as the need for consideration is one focused on by

Lord Reid. That requirement is one the applicant

says cannot be made out because of the conduct in

the present case but if it were said that, in any

event, there is to be some growth of the law in

that regard, that growth would none the less still

need to accommodate the approach adopted - the
public policy considerations and the strict

construction of a clear intention to extend the

benefit, and a clear intention to extend the

benefit, the applicant respectfully submits, cannot

Chellaram 19 19/4/91

emerge in the present case in respect of conduct of

a nature that here arose. If the Court pleases.

BRENNAN J:  Mr Ashburner, we would like to hear you, at

least in the first instance, on the first point

only.

MR ASHBURNER:	Being the time bar point, Your Honour?
BRENNAN J:	Yes.
MR ASHBURNER:	Your Honour, in my respectful submission,

there is no case suitable for the grant of special

leave here when it is borne in mind first that the

reservation of the position by Justices Mason and

Jacobs in the Port Jackson v Salmond & Spraggon

case was done at a time prior to the development of

the modern principles of interpretation of

exclusion and limitation clauses.

Since Nissho Iwai and Darlington Futures, the

earlier approach of giving a restrictive and,

indeed, hostile interpretation to such clauses has

entirely gone in cases such as the present where

there are commercial parties dealing at

arm 1 s length. When that is borne in mind, in my

respectful submission, the approach to the matter

taken by the Court of Appeal is abundantly right

and there is simply not sufficient doubt attending that interpretation to warrant the grant of leave.

That is further, in my respectful submission,

reinforced by the circumstance of this case, that
the sum involved in Hong Kong dollars is the
equivalent in round terms of around $20,000. It
was brought in the supreme court in order to be in

the Admiralty jurisdiction but otherwise it was a

relatively small District Court action in its

proportions.

DEANE J:  Mr Ashburner, on this point, was there in this

action at any stage any claim for conversation?

MR ASHBURNER:  Yes.

DEANE J: There was?

MR ASHBURNER: It was pleaded. That was the second count in

the statement of claim.

DEANE J: There was a claim for non-delivery and a claim for

conversation, is that right?

MR ASHBURNER:	Yes.
DEANE J:	I see. Well now, what do you say to Mr Street's

argument that 10(2) simply does not apply to a

Chellaram 20 19/4/91

claim for conversation, that not being a claim

under the bill of lading?

MR ASHBURNER:  Your Honour, my submission is that the Court

of Appeal is right in dismissing it almost sub

silentio. It figured very slightly, if at all, in

the argument below, Your Honour. When one looks at

the drafting of the three subclauses in clause 10,

it is not at all easy to come up with any very

subtle interpretation which rationalizes the choice

of language from subclause to subclause and,

indeed, it has all of the appearances of having

been taken from three different precedents and
patched together. That emerges in a number of

ways, Your Honours. It is on page 57 of the

application book conveniently set out.

Subclause (1) deals, in the second and third line, with the concept of:

the time of the removal of the goods by the

Merchant against this Bill of Lading -

Subclause (2) deals first with "delivery of the
goods and then with "total loss of the goods".

Subclause (3) deals with a still different concept

in the last two lines; firstly, of-delivery and

then of the date upon which they have been

delivered. It is not a clause which is a high

watermark of the drafter's art. In my respectful

submission, when that is borne in mind it is simply

inappropriate to seek to give the language the kind

of precision and narrowness of interpretation for

which my learned friend contends. Particularly,

Your Honours, is that, in my respectful submission, appropriate when it is borne in mind that

clause 10(2) is dealing not with - it is not one of

those clauses which is inconsistent with the

primary obligation to deal with the goods safely

and carefully, it is not a question of having to
interpret it in order to avoid a possible

interpretation which would render the primary

obligation illusory, it is perfectly reconcilable
with the primary obligation.	The primary

obligation continues. It is just that under
clause 10 proceedings have to be commenced within a
limited period of 9 months or 12 months running

from various different times.

So that in my respectful submission when both

those things are borne in mind the approach taken in the Court of Appeal, almost by implication, is

plainly the correct one. Nor, Your Honours, in my

respectful submission, is there any material from

which the Court could safely conclude that this

particular form of words in clause 10 and

especially in subclause (2) is one in any very

widespread use. It is not as though this is a

Chellaram 21 19/4/91

clause which is established in the evidence to be

in very frequent use by a great many carriers.

DEANE J: What, the evidence was just silent about that, was

it?

MR ASHBURNER:  Indeed, Your Honour, yes. There is just

nothing in this motion book, nor do I recollect any

evidence at all in the case. I should say I was

not in the trial, Your Honour, but I have carefully read the appeal books and I have no recollection of any evidence dealing with that at all.

So, in that regard, Your Honours, what I

really seek to make is two submissions: one, there

is not sufficient doubt attending the approach

taken by the Court of Appeal and second, in any

event, it is not an appropriate matter for special

leave, there being no basis for concluding that

this particular form of words is in any widespread

use at all.	Indeed, it would be surprising if it
is.

DEANE J: And just testing you for one minute longer: what

do you say was decided sub silentio in relation to

this question that a technical conversion by reason
of delivery to somebody other than in accordance

with the bill of lading is a liability under the

bill of lading?

MR ASHBURNER:  Yes, Your Honour, that the language here is

not appropriate to draw a distinction between a

cause of action and contract on the one hand and a

cause of action in tort for conversion on the other

and, indeed, very proof of conversion involves the

applicant in having to put in evidence the bill of lading in order to demonstrate the breach of duty.

So that in that sense it is a liability under the

bill of lading although, true it is, it is a

liability in tort, not in contract.

BRENNAN J:	In order to prove a breach of duty, do you say?
MR ASHBURNER:	I am sorry, Your Honour?
BRENNAN J:	You say you have to turn to the bill of lading

in order to prove a breach of duty?

MR ASHBURNER: 

Yes, Your Honour.

BRENNAN J: 

A breach of what duty?

MR ASHBURNER: 

The obligation arising from the bill of

lading not to release the goods otherwise than in
exchange for the original of the bill of lading.

Chellaram	22	19/4/91
BRENNAN J:	Would not the plaintiff be entitled simply to say, "These are my goods.	You have possession of

them and you delivered them to another", and would

not the bill of lading, if anything, be something

that the defendant would have to plead?

MR ASHBURNER:  Upon reflection, that is correct,

Your Honour, yes.

BRENNAN J: Well then, how is it that the liability arises

under the bill of lading?

MR ASHBURNER: .Only in a much looser sense than that first

submission I made. In a much looser sense that it

is the circumstance in which the goods came into
the possession of the second respondent, the agent
of the shipping company was, by virtue of the bill

of lading and by virtue of the obligations that

derived from it, he was not a stranger or an

intermeddler or anything like that. It came, in

fact, pursuant to the bill.

BRENNAN J:  I suppose it would be necessary to tender it to

prove the possession by the defendant.

MR ASHBURNER:  It would certainly be the obvious way of

doing it. Your Honour, may I just say that this is

not a case of - - -

DEANE J:  And it would really only be a rather smart sort of

pleading of half of the facts that said that

instead of, "These are my goods. I gave them to

you to deal with in accordance with my

instructions. You didn't deal with them in

accordance with my instructions and therefore

you're liable for" whatever it is.

MR ASHBURNER:  Indeed.

DEANE J: So, you have got a lot of common sense going for

you but there is a technical problem in your path.

MR ASHBURNER:  Yes, Your Honour. Well, in my respectful

submission - I do not want to repeat myself,

Your Honour. I have already submitted that that

should not be interpreted as being restricted to a cause of action in contract for the reasons I have

put.

Your Honour, this is not a case where the

conversion was wilful or criminal or the like, the

conversion was negligent in the circumstances

disclosed. There was a request made to the agent

in China and a wrongful assumption was made that

criminal or of that kind.

they had checked with the owners of the goods.

Chellaram 23 19/4/91

TOOHEY J:  I am not sure what you mean by "mistake'' there,

Mr Ashburner.

MR ASHBURNER:	A negligent mistake but not - - -
TOOHEY J:	But a mistake of what nature?

MR ASHBURNER: Well, Your Honour, I am seeking to

distinguish it from those cases where the shipowner or agent steals the goods or the equivalent. There are any number of those in the books.

TOOHEY J:  But the act was deliberate. I mean, that is not

used pejoratively but it consciously -

MR ASHBURNER:  It was consciously done but under a mistaken

belief.

TOOHEY J:  And an indemnity was sought, presumably,

because - or possibly because of a realization that without some such indemnity the carrier might be in

difficulties.

MR ASHBURNER:  Indeed, Your Honour. The indemnity was

offered. Permission to do so was sought. It was

not obtained. It was mistakenly believed it was

given and it was under that mistake that the goods

were released. So, it was accidental rather than a

deliberate wrongdoing, is the distinction I seek to

draw, Your Honour.

BRENNAN J:  Mr Ashburner, would this be right, that if this

is a bill of lading in common form, the question

that we have been debating is one of some

importance in terms of commercial transactions. If

it is not a transaction in common form, then the

nice points that we have been debating are problems

that really turn upon the construction of an

individual piece of contract paper.

MR ASHBURNER:  Your Honour, I would not concede that in that there simply is no decision, at least that I have

been able to find or that my learned friend has

referred to, where this form of words has

previously fallen for decision and that, in itself, suggests that it is a form of words which is not in

widespread use given the large number of such

decisions that there are to be found, decisions on

time limitation clauses and bills of lading, I mean

by that.

DEANE J: But His Honour was not asking you to concede that

it was in general form. What he suggested was if

it was in general form, it was of some

significance; if it was not in general form, it

was a matter of this document.

Chellaram	19/4/91
MR ASHBURNER:	I have expressed myself unclearly,

Your Honour. What I am trying to submit is that

given lack of litigation about it, the inference is

available that the problem as to what it means,

even if it is in widespread use, simply does not
crop up at all often. If it cropped up, one would

expect to find in the Lloyd's Reports and such

places decisions upon it, one way or the other.

So, in my respectful submission, it is not in

common form and even if it is it is not a problem

that can be seen to be of particular importance.

DEANE J: Well, that, of course, involves the assumption

that if it is in common form this decision does not

reverse what has always been seen as being so

obvious that nobody ever fought about it.

MR ASHBURNER: It involves that, Your Honour, indeed, but,

in my respectful submission, it is not likely to be

inferred that the unanimous Court of Appeal would

be doing something like that.

Your Honours, I think that is all I can

properly or usefully say in relation to the time

bar point.

BRENNAN J:  Mr Ashburner, if special leave were granted on

this point, that is, on the 10(2) point and its

construction of it, what would you have to say
about special leave also being granted on the

Himalaya point? In other words, I am asking you to

assume the first proposition against you?

MR ASHBURNER:  Your Honour, the Himalaya point, in my

respectful submission, is not a point of sufficient

substance to warrant the grant of special leave.

What my learned friend is really seeking to do is

to give a particularly restrictive interpretation

of it, in the first instance and, in my respectful

submission, the language of it is pretty plain and

broad. It is set out in the application book at

page 56 at the top of the page. It is clause 5.

It commences at the bottom of page 55.

Subclause (2) is really the primary one:

The Merchant undertakes that no claim or

allegation shall be made against any servant,

agent -

which is the relevant one here -

or sub-contractor of the Carrier which imposes
or attempts to impose upon any of them or any

vessel owned by any of them any liability

whatsoever in connection with the goods, and,

if any such claim or allegation should

nevertheless be made, to indemnify the Carrier

Chellaram 19/4/91

against all consequences thereof. Without
prejudices to the foregoing, every such
servant, agent and sub-contractor shall have
the benefit of all provisions contained herein
benefiting the Carrier as if such provisions
were expressly for their benefit; and, in
entering into this contract, the Carrier, to

the extent of those provisions, does so not

only on its own behalf, but also as agent and

trustee for such servants, agents and sub-

contractors.

So, it is in particularly wide terms and, in my

respectful submission, there really is no basis for

reading it down in the restrictive way it is

contended for so that it does not apply where the

agent claiming the benefit of it was itself in
breach of its obligations by mistakenly but wrongly

delivering so that, in my submission, there is

simply no sufficient doubt attending that.

As to the balance of the submissions my

learned friend made, in my respectful submission,
they are really all adequately and fully dealt with

in the two decisions referred to, The Eurymedon and

Salmond & Spraggon. There is, in my respectful

submission, clearly to be seen a consideration in

that the agent purported to act, although

mistakenly, pursuant to the bill. The fact that it

did so mistakenly, and what it did was otherwise

conversion, does not negative consideration any

more than the wrongful performance of the

Stevedoring and those two other cases negatived consideration and, in my respectful submission, there simply is nothing in that point sufficient to

warrant special leave. It is well-settled now by

those two decisions. Those have been in position

for 10 or 15 years. They have been very widely

followed and applied throughout Australia and,

indeed, the common law world.

Again, and this is, in my respectful

submission, relevant to bear in mind, that this is

a very small case, indeed. If that is a matter

against the submissions I have made which otherwise

might attract special leave then, in my respectful

submission, a more suitable vehicle is the one my learned friend referred to from Western Australia which will raise this point as well as the Law of Property Act. If not that case, then some other

one involving, in my respectful submission, rather

more money and importance than this rather trivial

case.

Those are the only submissions I would seek to

make on that. Do Your Honours wish to hear me on

the estoppel point?

Chellaram 26 19/4/91

BRENNAN J:	No, Mr Ashburner.
MR ASHBURNER:	May it please Your Honours.
BRENNAN J:	Mr Street.

MR STREET: If Your Honours please. If Your Honours go to

page 55 of the judgment of the Chief Justice, the

Chief Justice there says at line 7:

the clauses are in a standard form -

there is no evidence that has been put on by the
respondent to the contrary. They are standard form

clauses. That is identified in His Honour's judgment. In my respectful submission, that

overcomes the first matter that Your Honour

Mr Justice Brennan identified.

Can I then deal with the question of what was

said to be the approach to be adopted to the modern

principles for construction of exclusion clauses?

BRENNAN J:  Mr Street, I note the passage that you have

referred to where the Chief Justice says they are in standard form. Is that submission made on the footing of any submissions made to the Court or has

the proposition been verified by you by reference

to any standard words?

MR STREET:  I can say this, Your Honour, that there were a

number of bills of lading that were sought to be
tendered before His Honour at the proceedings and
were rejected at the time of coming to the
construction of the .bill but it was not just on

this point and they are not in evidence and I

cannot take it further. What I do say none the

less is that one has (a), the passage there; one

has (b), the proposition which the applicant

submits is of importance merely by the very matters

that fell from my learned friend's lips, the so-

called motion of there being some modern principle
of construction of exclusion clauses.	The

principle relating to the giving effect or taking

into account of the object and nature of the

contract - - -

BRENNAN J:  I am not wanting to take you on to that, just

simply whether or not this is in standard form or

whether it is not.	You cannot help us any further
with that?

MR STREET: Well, Your Honour, other than the form of the bill of lading which - could I hand up, perhaps,

the original exhibit A which is clearly the form of
the bill used by China Ocean Shipping Co which is

not a small entity. ·

Chellaram 27 19/4/91

BRENNAN J:  Do we need this in addition to the photocopy

that you have given us?

MR STREET:	Thank you, Your Honour, it is the original exhibit and I seek to only make it available if it
is of interest to Your Honours but - -
BRENNAN J:	It would be better to send it back, would it

not.

MR STREET:  The annexures are other copies of it but,

Your Honours, it, on its face, is a standard form

bill of lading. His Honour has referred to it

there being standard clauses.	I seek to embrace
that and adopt it.

BRENNAN J: His Honour might have been saying, of course, it

is simply a standard form used by that company.

MR STREET: Well, none the less, Your Honours, the

combination is one which I still seek to support

for the reason given and which I would elaborate if

Your Honours so wished.

TOOHEY J:  One of the standard textbooks ought to reveal

this?

MR STREET: Well, Your Honours, can I just say in that

regard: what one has, and this is the area - and

the reason why this is a matter of such significant

importance, is that as the Chief Justice

Chellaram,
acknowledged in his judgment in the have said that the Hague Rules are limited to the

operation of between loading and discharge and he

said that accords with the approach adopted there

although the President took a different view ut, in

clear terms, the Court of Appeal was saying to that

effect. In other words, the two international

regimes of liability, the Hague Rules and the

Hague/Visby - there is also one called the

Hamburg - both operate between loading and

discharge. That leaves, in Australia, post-

discharge and prior to loading to be dealt with

under the terms of the bill of lading.

The scope of the international regimes of

carrier liability under the Hague Rules and the

Hague/Visby are confined to this period prior to

discharge and post-loading. So that that leaves in

Australia this period prior to loading or after

discharge to be governed by Australian law. For

that reason, in every bill of lading, there needs

to be, to give effect to a time bar, a time bar

provision to give it effect so that the language

that is found in Article 3 rule 6 of the Hague

Rules and the equivalent in the Hague/Visby which

Chellaram 28 19/4/91

actually does say words to the effect of "in any

event, the carrier shall be discharged from all

liability in respect of loss or damage unless suit

is brought within one year", that language only

operates in respect of the Hague Rule limitation.

So, in every bill of lading there will need to be,

and are, provisions seeking to address time and

other exclusions, post-discharge, because that is

not governed by the regime of the Hague/Visby.

In America, they have got the Harter Act which

covers that pre-loading or post-discharge period.

We have no equivalent here. So, the matter is of

significance, in my respectful submission, so far

as the effect of a clause of this nature. None the

less, if the Court were not disposed to the view

that it is a standard clause as referred to by

His Honour the Chief Justice, it is still one which

gives rise to questions of importance in respect of

the construction and, here, the very object of the

contract. That object of the contract - I did not

take the Court to it, but in Schmitthoff, on Export the bill of lading is its representation of the

goods and its use as representing the goods and, in

the present case where one has that clause relating
to the delivery, in my respectful submission, it

accords with giving effect to and recognizing the
legitimate application of the nature and object of

the contract for the Court to deal with this matter

which is one, in my respectful submission, of

general importance.

What I was seeking to say was that the matter

that fell from my learned friend's lips about

modern principles of construction of exclusion

clauses is one of the very foundations for

suggesting, in my respectful submission, that this

is an area of importance because that motion of the

nature and object of the contract is one which

underscores commercial expectation and intention.

In that regard, I have sought to develop that

before.·

The suggestion of the quantum of the matter,

in my respectful submission, has no impact on the

importance of the issues. The matter is plainly

one which has significant ramifications for the

maritime community. It is already reported in

Lloyds at first instance. It will be operated upon

in so far as maritime transactions are concerned.

BRENNAN J:  Mr Street, as at present advised, the Court

would not be inclined to grant special leave to you

in relation to the estoppel point. If special

leave were to be granted to you - and I am not

saying yea or nay in respect to that ·at the moment

Chellaram 29 19/4/91

- with respect to the other points, would grounds

6, 7, 8 and 9 cover it or would you wish to have

ground 10 as well?

TOOHEY J: Page 165, Mr Street.

MR STREET: Yes, Your Honour. If I could add this rider in

so far as I do not understand my learned friend to

have raised the matter referred to in point 10 and
it would follow from what Your Honour said, they

would be the only grounds.

DEANE J: Well, except I would have thought it was apparent

that Mr Ashburner would want to rely on the matter

in ground 10, if you got leave.

MR STREET:  In those circumstances, I will extend it to 6 to

10, Your Honour.

DEANE J: Well, it would simply save him putting on a

cross appeal if that was necessary.

MR STREET:	Yes, Your Honour, quite so.
BRENNAN J:	Mr Street, would you wish, if the opportunity

was given to you, to demonstrate yea or nay as to whether this is a standard form, or the extent to

which it is a standard form?

MR STREET:  Would Your Honour permit me to get some

instructions in that regard?

BRENNAN J:  Yes. And perhaps, Mr Ashburner, would you wish

to put on any material in order to demonstrate yes

or no to that proposition?

MR ASHBURNER:	Perhaps I should take the same precautions.
MR STREET:	May it please Your Honours, I can immediately say that I would seize the opportunity to put on
evidence as to the size and scope of operations of
encompass a wide ambit of activity. If that were, COSCO and their trading internationally and use of their bills of lading which is one which would
of itself, sufficient to overcome the matter that
Your Honours are referring to, I would certainly be
seeking the opportunity to do that.

The second matter which Your Honours refer to

is one which I would not wish to forego the

opportunity of investigating it further but the

primary submission I would seek to put, and I do

not hear my learned friend suggesting the

contrary - - -

BRENNAN J:  It will be the second aspect of that that would,

I think, perhaps, carry more weight, Mr Street.

Chellaram 30 19/4/91

MR STREET: Yes. Well, Your Honours, I had - - -

DEANE J:  The problem with the first aspect is that if that

were a critical thing it would mean, if you were

big enough and had enough contracts, you could come

along and say, "Well, there's nothing of general

importance here but it is one of our contracts.",

and it may well be sufficient but it has not got

quite the same appeal as the proposition that this

decision affects commercial dealings of a lot of

people who are not before the Court.

MR STREET: Yes. Well, Your Honours, in so far as that is

decisive, I do seek to seize the opportunity to do
it but can I, before Your Honours finally dispose

of that as being the linchpin, just put to

Your Honours this, and that is that the submissions

I sought to advance as to it being one where this

question of time limitation clauses at large post-
discharge or prior to loading is one, the
construction of which generally arises in respect
of the legitimate operation of the nature and
object and that, of itself, was a matter we sought
to advance and still seek to advance of being of

general importance.

DEANE J: Yes, except if it is just your client's clause,

your client should draw its clauses a little bit

more carefully.

MR STREET:	Your Honour, it is the respondent's clause.
DEANE J:	I am sorry, yes.

MR STREET:  And these are contracts of adhesion. I think

the President, in his judgment, suggest we signed

it. I think there is an endorsement on the reserve

side. That is not an acknowledgment of the

contract.

DEANE J: Yes. That takes away a lot of what I said to you

about the one customer too.	It is late in the day.
I had reversed - - -

MR STREET:  Your Honour, I apologize for trespassing so long

on Your Honours' time. If the Court pleases.

BRENNAN J:  Would your affidavit be available within 7 days,

Mr Street?

MR STREET:  Your Honour, a matter of personal convenience:

I was proposing to go to Noosa tomorrow for a week,

Your Honours, but I am certain that the matter can

be addressed. If Your Honours would grant two

weeks?

Chellaram	31	19/4/91
BRENNAN J:	Yes.	And, Mr Ashburner, your affidavit, if any,

would be available within the same time?

MR ASHBURNER:  Indeed, Your Honour, yes.

BRENNAN J: Well then, in that event, we can adjourn the matter until a date to be fixed and give you an opportunity within 14 days to file your respective

affidavits.

The Court will intimate now that special leave

on the estoppel point will not be granted. As to

whether special leave will be granted on the other

two points that have been raised, the Court will

reserve its decision. The affidavits are to be

filed within 14 days and together with the

affidavits, as the parties may be advised, any

further submissions that the parties may wish to

make with reference to the subject-matter of those

affidavits or the arguments that have thus far been

addressed with regard to the matter.

MR STREET: Could they be filed within a further 7 days so

as to permit analysis of the affidavits?

BRENNAN J: Yes, although if it can be done a little earlier

than that it would be helpful because the Court

will then be assembled. Otherwise, the Court will

not be assembled for some time after that again.

MR STREET:  Yes. I was only thinking of absorbing the

material.

BRENNAN J: Yes. It will be 14 days and 7 days.

MR ASHBURNER:  When Your Honour said "14 days", did

Your Honour envisage we should have 14 days after

having - - -?

BRENNAN J:  No, that you should have 14 days to put on your

affidavit, the same as they should have 14 days to

put on their affidavit.

MR ASHBURNER: If it please Your Honour.

AT 5.25 PM THE MATTER WAS ADJOURNED

TO A DATE TO BE FIXED

Chellaram 32 19/4/91