R Singleton (Traders) Pty Ltd Trading as R Singleton Transport (Respondent) v Stewart George Taylor (Appellant) No. SCGRG 94/463 Judgment No. 5079 Number of Pages 5 Contracts

[1995] SASC 5079

COURT IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA KING CJ(1), DUGGAN(2) AND NYLAND(3)

CWDS
Contracts - Exemption clause on back of contract - whether condition sufficiently brought to notice of party's agent as term of contract - exemption not part of contract - carrier liable for loss caused by overturning of vehicle.

HRNG ADELAIDE, 6 April 1995 #DATE 8:6:1995 #ADD 4:9:1995

Counsel for appellant:     Mr M Manuel

Solicitors for appellant:    Piper Alderman

Counsel for respondent:     Mr R W Evans

Solicitors for respondent: Adams Kandelaars

ORDER
Appeal allowed.

JUDGE1 KING CJ This appeal arises out of the loss of a load of charcoal in consequence of a truck overturning at Liverpool, New South Wales on 2 May, 1992. The appellant, the owner of the charcoal, sued the respondent, the carrier, in the Magistrates Court for $8,648 the value of the lost charcoal. The learned Magistrate who tried the case, gave judgment for the appellant. That judgment was reversed on appeal to a judge of the Supreme Court. The appellant appeals against that judgment.

2. The appellant is a charcoal producer carrying on business at Waikerie in the state of South Australia. He sells his charcoal to wholesale buyers. The load in question was sold to one Antoniou, a wholesale buyer in Sydney.

3. Prior to 1991 Mr Antoniou had purchased his charcoal supplies from a wholesale firm named Murray Mallee Charcoal. He decided to buy direct from producers. He approached certain producers including the appellant. An agreement was reached whereby the appellant would sell charcoal to Antoniou for a fixed price per bag, Antoniou to pay the cost of transport. Antoniou negotiated with Mr Robert West, a director of the respondent for the transport of charcoal purchased by him. It was agreed that the respondent would transport to Antoniou charcoal purchased by him from various producers including the appellant and that Antoniou would pay the agreed charge. After some payment difficulties the arrangement became that Antoniou would pay the transport charge on delivery.

4. The appellant alleged that the parties to the contract for cartage were the respondent and the appellant. The respondent in its defence alleged that its contract was with Antoniou. There is much in the evidence to support the respondent's contention. All the conversations as to terms of cartage took place between West and Antoniou. The appellant seems to have taken no interest in the terms or conditions governing the cartage of the charcoal. Nevertheless both the appellant and Antoniou gave evidence that their agreement was that the property in the charcoal was to remain in the appellant until delivery. They were agreed that the charcoal was carted on behalf of the appellant. Both the learned magistrate and the learned judge on appeal accepted that that was so. With some hesitation, I have reached the conclusion that the finding should not be disturbed by this Court and that the proper legal analysis of the facts is that Antoniou, in negotiating the contract of cartage, was agent for the appellant who was the undisclosed principal in the contract.

5. The vehicle transporting the load of charcoal was being driven by an employee of the respondent when it overturned. No explanation for this mishap was advanced. The learned magistrate correctly inferred that the loss of the charcoal was caused by the negligence of the respondent. Res Ipsa Loquitur. He held that the respondent was in breach of its contractual duty to exercise care in the transport of the charcoal and therefore gave judgment for the appellant.

6. The learned judge on appeal agreed with the magistrate's reasoning so far as it went. He based his reversal of the judgment on his view that the respondent was exempted from liability by a contractual provision excluding liability for loss of or damage to the goods. This issue had not been dealt with by the magistrate. This is not surprising. The point is pleaded somewhat obscurely in the defence. It was raised somewhat perfunctorily in cross examination of Antoniou and not further pursued. It seems to have first attracted serious attention on the appeal.

7. The plea in the defence is as follows:
    "4.5 Insofar as the contract was written it was contained
    in terms and conditions of trade attached to freight notes
    delivered by the first defendant to Antonio(sic) from time
    to time and which provided inter alia, that the second
    defendant was not a common carrier and that the goods were
    at the risk of the sender unless otherwise expressly agreed
    in writing."

8. That plea is a reference to a clause printed on the back of cartnotes which were said to have been signed by Antoniou when charcoal was delivered. The evidence is sketchy and far from specific.

9. A facsimile copy of a cartnote signed by Antoniou was produced to him in cross examination. Also produced was a blank cartnote with certain printing on the back. These documents together became Exhibit D1. The signed cartnote relates to a load of charcoal delivered for Murray Mallee Charcoal. Antoniou's evidence was that he was usually given a similar cartnote to sign when the appellant delivered charcoal for Murray Mallee Charcoal but "not all the time". West said that the arrangement with respect to the Murray Mallee Charcoal deliveries was that the "delivery dockets" would be signed by both sender and receiver. He was unable, however, to produce any dockets other than the one already referred to. He was unable to produce any documents relating to deliveries of the appellant's charcoal and there was no evidence that any such dockets were signed.

10. The cartnote in evidence is in the nature of a delivery docket on which the recipient signs for the goods. On the back of the document appears "Conditions of Cartage". There are fifteen conditions. The learned judge on appeal commented:
    "The conditions are in such fine print that I have found it
    virtually impossible with my old, weak eyes, even with the
    aid of spectacles, to read them ... it is just possible to
    read the conditions with difficulty."

11. Mr West gave evidence that he stipulated with Mr Antoniou that under the new arrangements "we'd want all the same conditions that we've got with Murray Mallee". The new arrangements were negotiated entirely orally between West and Antoniou. The argument for the respondent, however, was that the Conditions of Cartage appearing on the back of the cartnote ExDl were incorporated by the above words and by course of dealing between the parties, into the contract with the respondent.

12. It is clear from the evidence that the "Conditions of Cartage" were unknown to both the appellant and Antoniou. The appellant had never seen a cartnote and Antoniou had never read or even apparently noticed the printed conditions. There was plainly no actual assent by the appellant through Antoniou or otherwise to the printed conditions. The question for decision is whether by reason of the course of dealing between the parties, Antoniou on behalf of the respondent must be taken to have assented to the condition and in particular the exclusion clause.

13. The paragraphs containing the condition which the learned judge held to be determinative of the appeal are as follows:
    "5. The goods are at the risk of the Sender and not the
    Carrier and unless expressly agreed in writing and subject
    to Clause 16 hereof (sic - there is no clause 16) the
    Carrier shall not be responsible in tort or contract or
    otherwise for any loss of or damage to or deterioration of
    goods or misdelivery or failure to deliver or delay in
    delivery of goods including chilled, frozen, refrigerated or
    perishable goods either in transit or in storage for any
    reason whatsoever including without limiting the foregoing
    the negligence or wilful act or default of the Carrier or
    others and this clause shall apply to all such loss of or
    damage to or deterioration of goods or misdelivery or
    failure to deliver or delay in delivery of goods as
    aforesaid whether or not the same occurs in the course of
    performance by the Carrier of contract or in events which
    are in the contemplation of the Carrier and/or the Sender or
    in events which are foreseeable by them or either of them or
    in events which would constitute a fundamental breach of the
    contract or a breach of a fundamental term thereof.

6. The Carrier is authorised to deliver the goods at the
    address to the Carrier by the Sender for that purpose and it
    is expressly agreed that the Carrier shall be taken to have
    delivered the goods in accordance with this contract if at
    that address he obtains from any person a receipt or a
    signed delivery docket for the goods."

14. If these provisions form part of the contract the liability of the appellant is excluded and the action of the respondent would fail.

15. There are many cases in which courts have had to decide whether a party, engaged in a course of dealing, was bound by terms of which it was unaware, contained in an documents issued to it by the other party. Many of them are discussed by Burt CJ in Rinaldi and Patroni Pty Ltd v Precision Mouldings Pty Ltd (1986) WAR 131. Since then there has been the decision of the English Court of Appeal in Circle Freight International Ltd v Medeast Gulf Exports Ltd
(1988) 2 Lloyds Law Reports 427.

16. There are two distinct questions to be resolved. The first is whether the conditions of cartage relied upon formed part of a contract with respect to any of the deliveries. The second is whether, if they did form part of such contract, they were imported by a course of dealing into the contract with respect to the subject delivery. If the first question is resolved in the negative, the second question does not arise.

17. As the conditions did not actually come to the knowledge of Antoniou, they could only have contractual effect if the circumstances were such that the appellant was reasonably entitled to assume that Antoniou was prepared to accept those conditions as contractual terms. Circle Freight v Medeast, supra per Taylor LJ at p431. That assumption would only be reasonable if sufficient measures were taken to make Antoniou aware, if he acted reasonably, that the terms upon which cartage was undertaken were to be found on the back of the cartnote.

18. All arrangements for the deliveries were oral. There was no communication by the respondent either orally or in writing directly informing Antoniou that cartage was undertaken only on terms to be found on the cartnote. The cartnotes were presented after completion of the deliveries for signature as acknowledgment of receipt of the delivery. There was nothing in the circumstances in which they were presented and signed to alert Antoniou to the possibility that they were more than mere receipts for delivery and that they contained contractual terms including an exclusion clause. On the contrary, the practice of presenting cartnotes for signature commenced at a time when the contract was made direct with Murray Mallee Charcoal and not through the agency of Antoniou, who was a mere recipient of the goods, and could have no interest in the terms of the cartage contract. When the arrangement ceased and Antoniou negotiated the contract on behalf of the appellant the respondent took no action to direct Antoniou's attention to the conditions of cartage printed on the back of the cartnote.

19. The cartnote was not a document which was contractual in character in the sense that a reasonable person would expect to find contractual terms in it. D J Hill and Co Pty Ltd v Walter H Wright Pty Ltd (1971) VR 749; Rinaldi and Patroni Pty Ltd v Precision Mouldings Pty Ltd, supra.

20. I do not think that the respondent could reasonably assume that Antoniou was doing business with it on the terms appearing on the back of the cartnote. I am of opinion that the printed conditions never formed part of any contract with respect to deliveries of charcoal to Antoniou.

21. It follows that the printed conditions were not part of the contract between the appellant and the respondent.

22. I consider that the learned magistrate reached the correct conclusion. The appeal should be allowed, the judgment appealed from set aside and the judgment of the Magistrates Court restored.

JUDGE2 DUGGAN J In my view the appeal should be allowed for the reasons given by the Chief Justice. I also agree with the order proposed by the Chief Justice in his judgment.

JUDGE3 NYLAND J I agree that the appeal should be allowed for the reasons given by the Chief Justice and I agree with the order he proposes in the judgment.