South Australian Railways Commissioner v McGlew and Company Limited

The South Australian Railways Commissioner appealed to the High Court of Australia from a decision of the Supreme Court of South Australia. The appeal concerned the liability of the Commissioner for the destruction by fire of cornsacks belonging to McGlew and Company Limited. The cornsacks had been consigned at "owner's risk" and, after arriving at their destination, were taken possession of by the respondent's agent and stacked in the railway yard. The sacks were subsequently destroyed by fire due to the negligence of the Commissioner's servants.

The central legal issue before the High Court was whether the Commissioner was relieved from liability for the loss of the cornsacks, given the "owner's risk" consignment terms and relevant by-laws, or whether the loss arose from wilful misconduct on the part of the Commissioner's servants. The court was required to interpret the scope of the "owner's risk" condition in the consignment note and the effect of by-laws concerning goods left on railway premises after arrival.

A majority of the High Court (Rich, Dixon, and McTiernan JJ.) held that the respondent was entitled to recover damages. Their reasoning was that the contract of carriage, including the "owner's risk" clause and the by-laws, did not govern the Commissioner's liability once the respondent's agent had taken possession of the sacks and stacked them in a manner that established a new relationship independent of the original contract of carriage. The court found that the agent had effectively assumed exclusive control and dominion over the goods in a capacity separate from that of a consignee under the contract, thereby terminating the Commissioner's liability under the owner's risk provisions. The appeal was dismissed.