Technology Swiss Pty Ltd v Famous Pacific Shipping (Vic) Pty Ltd
[2019] VCC 1542
•30 September 2019
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-18-02646
| Technology Swiss Pty Ltd and Ecology S.R.L | Plaintiffs |
| v | |
| Famous Pacific Shipping (Vic) Pty Ltd | Defendant |
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JUDGE: | His Honour Judge Woodward | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 5-8 August 2019 | |
DATE OF JUDGMENT: | 30 September 2019 | |
CASE MAY BE CITED AS: | Technology Swiss Pty Ltd v Famous Pacific Shipping (Vic) Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2019] VCC 1542 | |
REASONS FOR JUDGMENT
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Subject: CONTRACT
Catchwords: Agreement to transport mining equipment from NSW to Bangkok – equipment damaged in transit – whether defendant’s standard terms incorporated in contract by email footer – whether bill of lading terms also incorporated – timing of issue of bill of lading – construction of clauses limiting liability for damages for breach
Cases Cited:Oceanic Sun Line Special Shipping Co Inc v Fay [1988] HCA 32; (1988) 165 CLR 197, OK Petroleum AB v Vitol Energy SA [1995] 2 Lloyds Law Reports 160, Maxitherm Boilers v Pacific Dunlop Ltd [1998] 4 VR 559, Darlington Futures Limited v Delco Australia Pty Ltd (1986) 161 CLR 500
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr J Castelan with Mr N Wallwork | Litton Legal |
| For the Defendants | Mr M N C Harvey with Mr W Thomas | Thomas Miller Law Pty Ltd (CBL Business Lawyers, Victorian agents) |
HIS HONOUR:
Summary and outcome
1 A fog cannon is a substantial but delicate piece of machinery that is used to suppress the dispersal of dust in mining and demolition operations. It comprises a large fan that rotates at 2,900 rpm and fine water nozzles, that together generate and throw mist to distances of up to 500 metres. The mist hits airborne dust particles, which then become heavier than air and fall to the ground. Because the fan rotates at very high speed, it must be very finely balanced. Dr Passoni of the second plaintiff (“Ecology”), whose father invented the fog cannons, explained that if the deviance between the fan blades exceeds 0.003, the cannon can go into resonance and become, in effect, a literal cannon.
2 In circumstances which I will describe shortly, the first plaintiff (“Tech Swiss”) engaged the defendant (“FPS”) to arrange the transport of 14 fog cannons manufactured by Ecology, from Corowa in NSW to a purchaser in Bangkok, Thailand (“freight contract”). FPS loaded the fog cannons into shipping containers, but failed to lash or otherwise secure the fog cannons within the containers. Unsurprisingly, they arrived in Bangkok badly damaged. The purchaser refused to accept delivery of the damaged fog cannons and they were ultimately sold back in Australia for scrap. The plaintiffs sue FPS to recover the value of the cannons and associated costs and losses.
3 For the reasons below, I have concluded that:
· FPS’s standard terms and conditions of contract (“FPS Standard Terms”) were incorporated into the freight contract with Tech Swiss, but the bill of lading terms (“BOL Terms”) were not;
· on their proper construction, the FPS Standard Terms operate to limit Tech Swiss’s claim to the invoice value of the 14 fog cannons, plus freight and insurance;
· subject to hearing further from the parties on some minor aspects of the sums claimed, the quantum of Tech Swiss’s loss and damage so limited is in the order of $755,000.
Background
4 Tech Swiss’s business is principally the importation into Australia of fog cannons manufactured in Italy by Ecology. Tech Swiss either imports the fog cannons to meet an existing order or imports supplies of fog cannons in anticipation of orders. In the latter case, Tech Swiss stores the fog cannons on behalf of Ecology near its head office in Corowa, until a sale is made. Tech Swiss pays Ecology for the fog cannons once the sale in Australia is concluded. The fog cannons the subject of this proceeding were part of a consignment of 33 fog cannons shipped from Ecology to Tech Swiss in mid-2012 under this latter arrangement.
5 In around mid-2014, the CEO of Tech Swiss, Nicholas Marks, spoke with the director of Ecology, Dr Matteo Passoni, about the fact that Tech Swiss had been unable to sell the fog cannons as quickly as anticipated. They discussed the feasibility of returning them to Ecology in Italy, but decided against this because of the cost and duties involved. Instead, Dr Passoni said that Ecology had a customer in Thailand, and agreed with Mr Marks that Tech Swiss would arrange for 14 of the fog cannons and associated equipment being stored by Tech Swiss, to be sent from Australia to Thailand. The Thai customer was SWT Co Ltd.
6 FPS is a freight forwarder. Mr Marks’ evidence was that this was the first time that Tech Swiss had engaged FPS to arrange shipping, but that Mr Marks had previously dealt with Alan McKeown, who had recently started working for FPS after leaving another freight forwarding company used in the past by Tech Swiss. Mr Marks said that another company he owned (Wet Earth) had had limited prior dealings with FPS. Those dealings comprised engaging FPS to import part of a fog cannon from Ecology and obtaining a quote from FPS to export evaporators manufactured by Wet Earth in Australia, to South Africa.
7 On 24 September 2014, Mr Marks sent Mr McKeown an email requesting a quote from FPS for the collection, packing and transport of the 14 fog cannons from Corowa to Bangkok, Thailand, via Melbourne. Later that day, Mr McKeown replied to Mr Marks by email requesting details of pieces, dimensions and weight. In response, Mr Marks emailed Mr McKeown a packing plan. On 25 September 2014, Mr McKeown sent Mr Marks an email quoting $13,975 (plus GST) (“Quote Email”). On 13 October 2014, Mr Marks sent Mr McKeown an email directing FPS to proceed with the transport and shipping and attaching relevant invoices. This was followed by a series of further emails between FPS and Tech Swiss requesting, and providing, further information about the shipping arrangements. The fog cannons were ultimately collected from Corowa on about 5 November and delivered to FPS’s premises in Derrimut, on the outskirts of Melbourne.
8 There is a lack of clear consensus in the pleadings and submissions about precisely which of the emails exchanged between 24 September and the date of collection of the fog cannons in early November, constitute the freight contract. However, nothing of substance turns on this, because there are two parts of the email exchange that both parties agree had contractual effect, namely:
· first, the emails (including the Quote Email) sent by Mr Marks to Mr McKeown on 24 and 25 September 2014; and
· second, the email of 13 October 2014 from Mr Marks to Mr McKeown attaching copy invoices.
9 Both of these parts are central to my findings in the proceeding for reasons I will come to. For present purposes, it is sufficient to note that:
· each of the emails sent by Mr McKeown to Mr Marks, including those sent on 24 and 25 September 2014, had a footer underneath the sign-off, FPS logo and address block (with the latter incorporating a hyperlink to FPS’s webpage). That footer (“FPS Footer”) stated:
“‘All business transacted is subject to the company’s Standard Trading conditions of Contract, a copy of which is available on request and which, in certain circumstances, exclude the Company’s liability and include indemnities which benefit the Company’”
· the text of the Quote Email was relevantly as follows (errors and formatting as in original):
“Lump sum ocean freight aud13975.00 plus gst105
The above includes,
Linehaul ex corowa to Melbourne packing depot
Container loading and delivery to port
Standard export documentation/handling
Ocean freight melbourne port to Bangkok portCurrent carrier surcharges ie caf/baf/pss etc
The above is subject to the following,Fps standard trading terms and conditions
Fps carrier nomination
Destination clearance,handling and delivery charges
Any duties,taxes and/or gst/vat payable
Marine transit insurance your care
Any marine survey inspections if required by shipping lines
Rate validity 30 days
Any customs/quarantine inspection fees and charges if requiredRegards
Alan McKeown
Regional Manager VIC/NSW”
· the invoices attached to the email from Mr Marks to Mr McKeown dated 13 October 2014 included two invoices from Ecology to SWT showing that the total invoice value of the 14 fog cannons was €480,400.
10 There were some delays in the shipment of the fog cannons from FPS’s premises in Derrimut to Bangkok, because Ecology was considering whether to ship them to a customer in China instead. However, on 3 December 2014, Mr Marks sent Mr McKeown an email confirming that the fog cannons should be sent to Thailand as originally consigned. On 5 December 2014, Mr McKeown sent Mr Marks an email advising that the fog cannons had been packed into two 40 foot containers (one less container than originally proposed). In all, there were 26 pieces of equipment that weighed 10,800kg. Later that day, Mr McKeown sent Mr Marks an email including a revised pricing, totalling $15,175.88. The revised pricing comprised a reduction in the shipping cost (reflecting one fewer container), but additional charges of $4,800 for container detention and $895 for storage at the FPS Derrimut facility for six weeks.
11 On 6 December 2014, the ship onto which the fog cannons had been loaded, “CMA CGM Quartz”, departed Melbourne. The agent for the carrier CMA CGM issued a CMA CGM waybill no. MBE0226824 dated 6 December 2014. On 12 December 2014, Yvette Yang of FPS sent Mr Marks an email requesting payment for freight which was then overdue. Also on 12 December 2014, Mr McKeown sent Mr Marks an email attaching bill of lading no. AUTHBKK4J122 dated 6 December 2014 bearing the title “FAMOUS PACIFIC LINES”, “OCEAN – BILL OF LADING” (“FPL BOL”). The FPL BOL names Tech Swiss as the shipper and SWT as the consignee. The title is accompanied by a logo in the same form as the logo on the FPS emails. Under this appears (in fine print) various terms and conditions, including the following:
“In accepting this B/L the merchant expressly accepts and agrees to all its stipulations, exceptions and conditions whether written, printed, stamped or otherwise incorporated and in particular to the terms overleaf as if they were all signed by the merchant.”
None of the copies of the FPL BOL provided by FPS to Tech Swiss included any “terms overleaf”, but there were versions of the FPL BOL in evidence that did have those terms, being the BOL Terms. The BOL Terms are only just readable to the naked eye when enlarged to A3 size.
12 On 12 December 2014, Mr Marks sent Ms Yang an email advising that payment of the FPS shipping invoice had been made that day. On 3 January 2015, Mr Marks sent an email to FPS noting that there was an error in the weight of the fog cannons recorded in the FPL BOL, and that Tech Swiss’s client urgently required an amended FPL BOL. Mr McKeown had left FPS on about 19 December the previous year, so this email was sent by Mr Marks to Matthew Drake-Brockman of FPS. On 8 January 2015, Mira Luplow of FPS sent Mr Marks an email attaching a copy of the FPL BOL with the weight corrected. CMA CGM also issued a corrected version of its waybill at about this time.
13 The fog cannons arrived in Bangkok in January 2015 and were released into bonded custody on 23 January 2015. It was apparent on the unloading of the fog cannons from the containers that they had been damaged during transit. On 29 January 2015, Mr Marks sent Mr Drake-Brockman an email advising of the damage and attaching photographs. On 27 March 2015, Mr Marks sent Mr Drake-Brockman an email advising that Tech Swiss had called on its insurance policy and that Tech Swiss considered that FPS was liable for the damage associated with the inadequate packing of the fog cannons. On 31 March 2015, Dr Passoni of Ecology sent Mr Marks an email confirming that SWT had refused to accept the fog cannons.
14 Over the ensuing months, the fog cannons remained in bonded storage while Tech Swiss sought to resolve insurance issues. In substance, its insurer accepted liability on Tech Swiss’s claim, but disputed the value of the damage. This dispute with the insurer resulted in Tech Swiss issuing proceedings in the Federal Court in Sydney in August 2015, which settled in June 2017. Tech Swiss thereafter explored a number of options to recover value from the damaged fog cannons, or at least to avoid the cost of having to pay duty on them in Thailand or return them to Australia. Ultimately, the lowest cost option involved returning the fog cannons to Australia and selling them as scrap. On 3 July 2018, the 14 fog cannons and associated equipment were sold as scrap to Norstar Steel Recyclers for $1,308.
Issues and analysis
15 Tech Swiss has advanced claims in both bailment and breach of contract. FPS admits that the damage to the fog cannons was caused by deficient packing carried out by FPS when the fog cannons were placed into the shipping containers. At the commencement of the trial, FPS made further concessions concerning the potential application of contractual time-bars and on the question whether Tech Swiss was acting as the agent of Ecology. My findings on what terms (if any) are incorporated into the freight contract, have the effect of further limiting the issues in the proceeding on both liability and quantum.
16 Because of these facts, the issues I have had to consider and determine in the proceeding are relatively narrow. They are as follows:
· Were the FPS Standard Terms incorporated into the freight contract?
· Were the BOL Terms incorporated into the freight contract?
· How is the limitation on liability in the FPS Standard Terms to be construed?
· What damages are payable by FPS to Tech Swiss?
Were the FPS Standard Terms incorporated into the freight contract?
17 Tech Swiss submits that the FPS Standard Terms were not so incorporated on two alternative grounds. First, that the words introducing the second half of the Quote Email (namely: “Fps standard trading terms and conditions”), should be construed as referring to the seven matters beneath it within the same paragraph of the Quote Email, and not the FPS Standard Terms. And, second, that the steps that FPS took to incorporate the FPS Standard Terms into the freight contract were not effective for one or more of four reasons. These are that:
· FPS gave Tech Swiss insufficient notice of the terms;
· FPS did not do all that was reasonably necessary to bring the exclusion clauses within the FPS Standard Terms to Tech Swiss’s attention;
· the exclusion clauses were not germane to the receipt, carriage or delivery of the fog cannons or the payment of freight, and only general words of incorporation were used;
· the exclusion clauses were particularly onerous or unusual and FPS has not shown that it brought them fairly and reasonably to Tech Swiss’s attention.
18 In relation to the first ground, after setting out the uncontroversial legal principles relevant to the relationship of bailor and bailee and the construction of commercial contracts, Tech Swiss submits:
· the Quote Email states: “The above is subject to the following”, following that are the words “Fps standard trading terms and conditions” and following that is a list of seven specific terms and conditions;
· the reasonable person would have understood that those seven specific terms and conditions constituted all of the terms and conditions that FPS was referring to by its use of the term “Fps standard trading terms and conditions”;
· the text does not state that those standard trading terms are elsewhere, nor does it present the statement in a manner which would induce in the reader a belief that the standard terms and conditions are a pre-drafted set of separate terms and conditions; and
· the FPS Footer in the Quote Email and all other correspondence should be given no weight because the reasonable business person would be unlikely to read or take any notice of the sentence because of its location, because it is in all correspondence and because it is vague and generic.
19 Turning to FPS’s submissions on the second ground, FPS begins by referring to the evidence (which I accept) that the FPS Standard Terms were not provided to Tech Swiss and that Mr McKeown did not expressly mention the FPS Standard Terms in his discussions with Mr Marks. It is trite that where there is no memorandum of the terms signed by the parties, a party who wishes to establish that terms are incorporated into an agreement must show that he or she did all that was reasonable, in the circumstances of the case, to bring the terms to the attention of the other party.[1] Tech Swiss submits that the reasonable business person would be likely to disregard the FPS Footer for the reasons referred to above. And, even if the FPS Footer was read, it did not state where the FPS Standard Terms could be inspected or that they were accessible via the FPS webpage. Tech Swiss submits that doing everything reasonable, at least required FPS to have a hyperlink to the FPS Standard Terms in the FPS Footer.
[1]See the discussion in JW Carter, ‘Contract Law in Australia’ (2018) (, LexisNexis Butterworths, 7th ed, 2018) at [10-16], referring to Balmain New Ferry Co Ltd v Robertson (1906) 4 CLR 379 at 386
20 In a related argument, Tech Swiss relies on Oceanic Sun Line Special Shipping Co Inc v Fay[2] to argue that FPS also did not do all that was reasonably necessary to bring the exclusion clauses in the FPS Standard Terms to Tech Swiss’s attention. Again, Tech Swiss submits that the FPS Footer fell short of “doing all that was reasonably necessary” in this regard.
[2][1988] HCA 32; (1988) 165 CLR 197, per Brennan J at 228-9
21 Next, Tech Swiss submits that the principles developed in relation to exclusion or limitation clauses in bills of lading are applicable to its agreement with FPS, because that agreement is one that relates to the carriage, shipment and delivery of goods. Those principles are conveniently encapsulated in the following passage from OK Petroleum AB v Vitol Energy SA (“OK Petroleum”):[3]
[3][1995] 2 Lloyds Law Reports 160 at 165; see also Doggett v Commonwealth Bank of Australia [2015] VSCA 351 at [133]
“[T]here is in the authorities a well-developed approach to construction of general words of incorporation that only such provisions will be incorporated as are in substance relevant or germane to and if incorporated, capable of being operated in conjunction, with the subject matter of the bill of lading.”
Tech Swiss argues that just as the time-bar was held not to have been incorporated in OK Petroleum, the exclusion clauses in the FPS Standard Terms were not relevant or germane to the receipt, carriage or delivery of the fog cannons.
22 Finally, Tech Swiss relies on the principle that exclusionary or restrictive terms that are unusually wide or onerous for the type of contract in issue, must be drawn to the attention of the party sought to be bound in the most explicit way.[4] Tech Swiss notes that on FPS’s construction of the exclusion clauses (discussed below), FPS’s liability for the loss of fog cannons would be limited to US$21,600, being 2.9% of the invoice value. It submits that, if this construction is correct, this term is unusually onerous and FPS failed sufficiently to bring it to Tech Swiss’s attention.
[4]Referring to, among others, Baltic Shipping Co v Dillon (The Mikhail Lermontov) (1993) 176 CLR 344
23 For its part, FPS submits that the FPS Standard Terms were incorporated into its agreement with Tech Swiss by the FPS Footer, by the statement in the Quote Email that it was subject to (among other things) “Fps standard trading terms and conditions” and by FPS’s booking confirmation dated 29 October 2014, which had a notice near the top of the first page in the same terms as the FPS Footer. FPS also refers to the evidence (which I accept) that:
· in 2014 the FPS Standard Terms were available on FPS’s website, in hard copy at FPS’s Derrimut offices and by email (on request);
· there was (and is) a hyperlink to the FPS website just above the FPS Footer in all FPS’s emails; and
· terms limiting liability were common in freight forwarders’ standard terms.
24 Relying primarily on the principles stated in the decision of the Court of Appeal in Maxitherm Boilers v Pacific Dunlop Ltd[5] (“Maxitherm”), FPS submits that “there is no doubt that” the FPS Standard Terms were incorporated into its agreement with Tech Swiss. It also submits that it fell to Tech Swiss to prove that the exclusion clauses in the FPS Standard Terms are such that “no one would anticipate them in a contract of carriage”, and that it has failed to do so. Asserting there is “no doubt” that the FPS Standard Terms were incorporated into the freight contract may be putting the case too highly. However, I otherwise agree with FPS’s submissions on these issues. In particular, I agree that the decision in Maxitherm provides something of a “one-stop-shop” for the principles to be applied on the facts of this case.
[5][1998] 4 VR 559
25 But before discussing Maxitherm, I will deal with Tech Swiss’s first ground, namely, that the words “Fps standard trading terms and conditions” in the Quote Email, should be construed as referring to the seven matters beneath it within the same paragraph of the email. In my view, this ground is unsustainable. It is not in dispute that the freight contract comprises at least the emails (including the Quote Email) sent by Mr Marks to Mr McKeown on 24 and 25 September 2014. These must be read as a whole and both contain the FPS Footer. I have explained below my reasons for rejecting Tech Swiss’s submission that the FPS Footer should be disregarded.
26 In my view, any reasonable reader of those emails would understand the FPS Footer as referring to a separate document, “a copy of which is available on request”. I am also satisfied that a reasonable reader of the Quote Email (who can be taken to have read the FPS Footer in the Quote Email), would understand the reference to the “Fps standard trading terms and conditions” in the body of the Quote Email, as referring to the same separate document that is described in the FPS Footer. This alone is a sufficient basis for rejecting FPS’s first ground. I also note that the FPS Footer expressly refers to the FPS Standard Terms as excluding FPS’s liability and including indemnities. The seven items under the line “Fps standard trading terms and conditions” do neither of those things.
27 If any further reasons were required, in my judgment, it makes no sense to provide that the freight contract is “subject to the following”, give as the first item “Fps standard trading terms and conditions” and then exhaustively list those trading terms and conditions. On that construction, the first item is entirely redundant (or, in construction parlance, it has no work to do). Finally, it would come as no surprise to sophisticated commercial parties engaging regularly in transactions of this kind, that a freight forwarder like FPS would use a set of fairly comprehensive standard terms and conditions in its dealings with customers. The seven items under the line “Fps standard trading terms and conditions” in the quote email are clearly not of that character.
28 Turning to Tech Swiss’s remaining grounds, the facts in Maxitherm concerning the formation of the contract were more complex than those in this case. For present purposes, it is sufficient to note that the Court of Appeal accepted that the respondent before it was “in the position of a person receiving an offer in the form ‘I offer to contract on my standard terms and conditions’, who does not know what the other party’s standard terms and conditions are and does not enquire, but goes ahead and accepts the offer”.[6] I am satisfied that FPS was also in that position.
[6]Maxitherm, per Callaway JA at 561.45
29 The leading judgment in Maxitherm was delivered by Buchanan JA, with whom (on this issue) both Ormiston and Callaway JJA agreed. His Honour held that:[7]
“[A] party relying upon a document containing conditions may be relieved of the need to take steps to inform the other party that the document contains conditions where the other party expressly accepts an offer of which the document forms part. I do not intend to convey that express acceptance of an offer which incorporates other terms by reference necessarily connotes acceptance of all those terms. In a case where the person expressing consent has not read the terms, his consent may be taken to be a consent to those terms which are appropriate to a contract of the type in question. If the terms include provisions which no one would anticipate in a contract of the type in question, it would not be appropriate to assume consent to those provisions. The basic enquiry remains whether it is reasonable to assume that a contracting party has assented to the terms put forward by the other party.”
[7]Maxitherm at 568.30
30 Callaway JA likewise held that:[8]
“It is not uncommon to enter into a transaction on another party's standard terms and conditions without enquiring what they are. It is often not worth doing so and a sensible commercial risk to run. The law reflects commercial reality by holding the party who does not enquire to such of the other party's standard terms and conditions as may fairly be regarded as within the risk the first party took. Some terms are outside the risk and the first party is not bound by them. A term may be contrary to industry practice or, however appropriate to other contracts into which the other party regularly enters, unsuited to the particular contract. It is rarely, if ever, sufficient that a term is onerous, but its onerous quality or some other feature may show that it was not reasonably to be expected.”
[8]Maxitherm at 562.5
31 In my view, the commercial risk that Callaway JA identifies in the passage above is precisely the one that Tech Swiss took in this case. The FPS Footer could hardly have been clearer. It states that FPS Standard Terms were available on request, and a simple click on the nearby hyperlink to the FPS website would have given any reader of the emails immediate access to those standard terms. It is also important to note that the FPS Footer expressly warned the reader that the FPS Standard Terms “exclude [FPS’s] liability and include indemnities which benefit [FPS]”. Thus the general nature of the risk that Tech Swiss took in choosing not to seek out the FPS Standard Terms was expressly stated.
32 I am unpersuaded by the argument that the FPS Footer should be wholly disregarded because of factors such as its location at the base of the emails and its repetition and generic language. I can see no justification for effectively ignoring the FPS Footer as a sufficient notice, merely because of its location on the page, particularly given that notice is also given in the body of the Quote Email. The basis for the assertion that the language is “generic” is similarly elusive. To me, the language is plain and unambiguous. Finally, to my mind, the repetition has the opposite effect to that contended for by Tech Swiss.
33 This then leaves only the question whether the relevant exclusion clauses (set out in full below) fall into the category of “provisions which no one would anticipate in a contract of the type in question”, discussed in the passages from Maxitherm above. In my judgment, they do not because:
· I accept the evidence of Mr Aparo and Mr McKeown to the effect that such terms were common in freight forwarders’ standard terms;
· the FPS Footer expressly identifies the nature of the provisions, namely, provisions that (among other things) exclude liabilities; and
· there is nothing about the terms themselves that strike me as particularly onerous or unusual for contracts of this kind.
34 That said, the position may have been different if the exclusion clauses were to be construed consistently with FPS’s submissions. As noted above, the effect of that construction is that FPS’s liability for the loss of the fog cannons would be limited to 2.9% of their invoice value. In my view, there is some force in the argument that a provision having that effect is unusually onerous for a contract of this kind. However, having rejected that construction for the reasons below, it is not necessary for me to reach a concluded view on that matter.
35 In my analysis to this point, I have not overlooked Tech Swiss’s reliance on the decision of the High Court in Oceanic Sun Line Special Shipping Co Inc v Fay,[9] or on the principles discussed in OK Petroleum. As to the former, I agree with the oral submission by senior counsel for FPS, Mr Harvey, to the effect that the facts of that case are materially different to the present (and to those in Maxitherm). In particular, this case involves sophisticated commercial parties with considerable experience in contracting for the transport of goods. Further, as I have already noted, the fact that the FPS Standard Terms included exclusion clauses, was expressly stated in the FPS Footer.
[9][1988] HCA 32, (1988) 165 CLR 197
36 Thus, even on the test in Oceanic, I am satisfied that FPS has done all that was reasonably necessary to bring the exemption to Tech Swiss’s notice. In relation to the principles in OK Petroleum, I am not sure that they are relevantly distinguishable from those stated in Maxitherm. But even if they were, I am bound by (and prefer), the latter.
Were the BOL Terms incorporated into the freight contract?
37 In its submissions on this issue, FPS relies heavily on clause 1.2 of the FPS Standard Terms. It does so because the FPL BOL was not provided by FPS to Tech Swiss until 12 December 2014, which was some six weeks after the date of the freight. Thus clause 1.2 is the only mechanism by which FPS can argue that the BOL Terms were incorporated into that contract. Clause 1.2 provides that:
“Where a document is issued by or on behalf of the Company and bears the title of, or includes the words, “bill of lading” (whether negotiable or not), or sea or air “waybill” and provides that the Company contracts as carrier, the provisions set out in that document, if inconsistent with these Conditions, shall be paramount and prevail over these Conditions to the extent that such provisions are inconsistent but no further.”
38 FPS further submits that, when it contracted with Tech Swiss, “it was the common knowledge of all parties that a bill of lading would be issued”. It relies in this regard on the “Shippers Letter of Instruction” sent by Tech Swiss to FPS on 13 October 2014, which refers to “ORIGINAL HBL” and to “EXPRESS RELEASE HBL”; it asserts that “HBL” is an acronym of “house bill of lading”. It also relies on the evidence of Dr Passoni, Mr Marks, and Mr McKeown to the effect that they all knew that a bill of lading had to be issued for the carriage of the cargo from Melbourne to Bangkok. FPS then asserts that “in accordance with the parties’ expectations”, FPS issued the FPL BOL. FPS concludes:
“It is submitted that the standard bill of lading terms are incorporated in the Agreement. Clause 1.2 does not provide that they apply only from the time when a bill of lading is issued. It is submitted that they were incorporated from the time the Agreement was formed, in accordance with the parties’ mutual expectations that a bill of lading would be issued.”
39 Tech Swiss seeks to counter these submissions on several grounds. First, it submits that it was too late after the original freight contract was made to add conditions which were not incorporated in it at the time of its formation. It argues that it “cannot have been the parties’ intention that FPS was entitled to unilaterally amend the freight contract so as to limit its liability if and as it desired”. I agree. Unlike the position with the FPS Standard Terms, there was no document issued or otherwise available to Tech Swiss at the time it contracted with FPS in October 2014 that purported to incorporate the BOL Terms. As noted above, the FPL BOL was first sent by FPS to Tech Swiss (without any “terms overleaf”) on 12 December 2014.
40 In relation to the operation of clause 1.2 of the FPS Standard Terms, Tech Swiss submits that this does not assist FPS, for two reasons. First, clause 1.2 refers to a document that “provides the Company contracts as carrier”, where “Company” means FPS. In contrast, the FPL BOL provides that “Famous Pacific Lines” is the carrier. Tech Swiss argues that there was no evidence that Famous Pacific Lines was in fact an alter ego of FPS, or that Tech Swiss was given notice of this. Tech Swiss submits Mr Aparo’s evidence seeking to explain why the FPL BOL refers to “Famous Pacific Lines” and not FPS, was unconvincing. But regardless of that evidence, Tech Swiss asserts that it is clear from the face of the FPL BOL that it is not a document providing that FPS contracts as carrier and thus clause 1.2 is not engaged.
41 Second, Tech Swiss submits that even if the FPL BOL is taken to be a bill of lading providing that FPS contracts as carrier, by operation of clause 1.2, the terms incorporated by that document were “the provisions set out in that document”. According to Tech Swiss, the document issued by FPS was an electronic image of a single one-sided page and so the terms to be incorporated are simply those on the face of the FPL BOL, none of which are relevant to the present dispute. FPS concedes that the BOL Terms were never provided to Tech Swiss.
42 For its part, FPS submits in substance that that the evidence shows that it was FPS that sent the FPL BOL to Tech Swiss, and that Mr Aparo gave evidence that “Famous Pacific Lines” is a name used by FPS in order to issue its bills of lading. In oral submissions, Mr Harvey for FPS further explained that the FPL BOL in this case operated as both a receipt confirming that the fog cannons were now on the vessel and also as evidence of a contract that has been reached by the parties. In relation to this latter aspect, Mr Harvey referred me to an extract from Shipping Law,[10] where the learned authors observe (citations omitted):
“The bill of lading or sea waybill is only evidence of the contract of carriage between shipper and carrier. The contract itself is made when the shipper (or its forwarding agent) books space on the carrier’s ship, long before the goods are actually delivered to the ship for carriage. The contract is finally reduced into writing when the sea carriage document is issued and the document is evidence, but not conclusive evidence, of the terms of the contract. Extrinsic evidence may be adduced to show that the true terms of the contract differ from those in the sea carriage document—for example because of a previous oral or written agreement of the parties, or because of an unusual clause in small print that has not been brought to the attention of the shipper.”
[10]Davies & Dickey, Shipping Law (4th ed, Lawbook Co, 2018) at [12.270]
43 Relying on that summary, Mr Harvey made three points. First that although the FPL BOL post-dates the making of the agreement reached in October 2014, it is only evidence of that agreement. Second that the BOL Terms, which the evidence showed existed at the time of the agreement in October 2014, were “drawn into this agreement because of clause 1.2 [of the FPL standard terms]”. And, third, that “it was mutually understood by all parties…that a bill of lading would be issued, and indeed was issued in accordance with their expectations.” He concluded:
“So we say on that basis, therefore, although the bill of lading has come later, when the parties entered into their agreement in October the bill of lading terms applied at that point”.
44 In my view, none of these submissions (separately or in combination) are an answer to the fundamental problem of timing faced by FPS on this issue. A completed agreement was reached between Tech Swiss and FPS by 29 October 2014 incorporating (as I have found) the FPS Standard Terms. At that point, the most that can be said is that clause 1.2 of the FPS Standard Terms foreshadowed that FPS may issue a bill of lading, that may provide that FPS contracts as carrier, that may contain conditions, being conditions that may be inconsistent with the FPS Standard Terms.
45 Further, while I accept that Mr Marks knew that a bill of lading would need to be generated at some point in relation to the shipment of the fog cannons to Bangkok, there is nothing to suggest that he knew (or could have known):
· what form the bill of lading would take (including whether it would contain conditions inconsistent with the FPS Standard Terms);
· who it would be issued by (that is, whether by FPS or by the shipping company, or both); or
· whether it would provide that FPS or some other entity (such as the shipping company) contracted as carrier.
46 In those circumstances, as Tech Swiss has submitted, accepting FPS’s submissions would have the effect of entitling FPS to substitute new terms into the agreement with retrospective effect, when notice of those terms was first given to Tech Swiss (if at all) six days after the shipment had left port. The difficulty with this proposition is perhaps best illustrated by observing that this may also have been at a point in time after the damage to the fog cannons had occurred. The evidence is that the fog cannons were undamaged when they were loaded into the shipping containers in Derrimut on about 5 December 2014 and damaged when they were unloaded in Bangkok about four weeks later. But there is no way of knowing on the evidence if all or any part of the damage occurred on loading onto the vessel “CMA CGM Quartz” or during the six days of the voyage before FPS sent the FPL BOL to Tech Swiss.
47 Further, in my judgment, the circumstances of this case fall squarely within the example referred to in the extract above from Shipping Law, namely, where there is “extrinsic evidence to show that the true terms of the contract differ from those in the sea carriage document—for example because of a previous oral or written agreement of the parties”. Here, there is clear evidence of a previous written agreement that entirely covers the field in relation to limitations on liability (being a combination of the Quote Email and the FPS Standard Terms). As I have already found, clause 1.2 of the terms of that agreement cannot operate retrospectively to import new or different terms.
48 I also agree with Tech Swiss’s submission that FPS has failed to establish on the evidence that the FPL BOL did provide that FPS “contracts as carrier”. While I accept that FPS was unrelated to the entity registered in Panama under the name “Famous Pacific Lines SA”, it is clear that FPS was part of an extensive worldwide network of entities forming what Mr Aparo described as the “FPS group”. Many of the entities in that group have the words “Famous Pacific” as part of their name. There was no evidence that the name “Famous Pacific Lines” was registered to FPS (or any other member of the FPS group) as a business name or trade mark.
49 More relevantly, even a close reading of the FPL BOL gives no hint that “Famous Pacific Lines” is a name used by FPS. Indeed, the only member of the FPS group named on the FPL BOL is “FPS LOGISTICS (THAILAND) CO. LTD.” Thus even a careful reader of the FPL BOL would have no way of identifying that “Famous Pacific Lines” was the alter ego of FPS, any more than it was the alter ego of the Thai company, or an entirely separate shipping company.
50 This is in contrast to the “Shippers Letter of Instruction”, which the evidence indicated was filled out by Mr Marks of Tech Swiss and forwarded by him to FPS on 13 October 2014. As explained above, FPS relies on this letter as showing that the parties anticipated that a bill of lading would be issued. This has a similar layout to the FPL BOL, but identifies in clear terms that the document is a document of FPS as “shipper”. In my view, a person putting this document and the FPL BOL side by side, would have no reason to think both were documents of FPS. On the contrary, they are likely to conclude that the former is a document of FPS, whereas the latter is a document of some other entity.
51 Finally, if any additional reason were required, I agree with Tech Swiss’s submission that the FPL BOL does not in fact “set out” the BOL Terms. Unlike the FPS Standard Terms, the reference on the face of the FPL BOL to terms, does not state that they are available on request (or otherwise). It directs the reader that “the merchant expressly accepts and agrees to all stipulations, exceptions and conditions whether written, printed, stamped or otherwise incorporated and in particular to the terms overleaf”. In the version of the FPL BOL sent to Tech Swiss, there were no terms overleaf. It is not incumbent on a party in the position of Tech Swiss (particularly six weeks after the freight contract was made and six days into the voyage) to then seek out what (if anything) “Famous Pacific Lines” might have intended to have “overleaf”. Indeed, in my view, a reasonable reader receiving the FPL BOL under cover of an email from FPS bearing the FPS Footer, would be entitled to assume (at most) that this was a further reference to the FPS Standard Terms.
52 Having concluded for the reasons above that the BOL Terms were not incorporated into the agreement between FPS and Tech Swiss, I am gratefully relieved of the obligation to determine the complex questions raised on the submissions concerning the incorporation into those terms of Schedule 1A of the Carriage of Goods by Sea Act 1991 (Cth), known as the Amended Hague Visby Rules. Had it been necessary for me to do so, I am presently inclined to the view that those rules do not apply for either or both of the reasons discussed in Tech Swiss’s submissions, and summarised by Tech Swiss as follows:
“The conclusion that the Amended Hague-Visby Rules do not apply can be reached in two ways; firstly, its terms would make no sense were a freight forwarder characterised as a ‘carrier’ for the purposes of the relevant articles, and secondly, as a technical matter there is no sea carriage document attracting the operation of the Rules.”
53 However, I should emphasise that this is no more than a preliminary view based on a reading of the written submissions of the parties and the oral submissions of the parties. I have not considered directly any of the many authorities referred to in those submissions.
How is the limitation on liability in the FPS Standard Terms to be construed?
54 The provisions of the FPS Standard Terms that are relevant for the purpose of resolving this issue are as follows:
“13. General Liability
…
13.2Subject to Clause 5.8, the Company shall not be liable for loss or damage howsoever caused (whether or not indirect or consequential) to property other than the Goods themselves and shall not be liable for any pure economic loss or loss of profit, delay or deviation howsoever arising.
14.Amount of Compensation
14.1Except in so far as otherwise provided by these Conditions, the liability of the Company, howsoever arising, shall not exceed the following:
(a)in respect of all claims other than those subject to the provisions of Clause 14.4 whichever is the lesser of:
(i) the value of, or
(ii)the equivalent of US$2.00 per gross kilogram in the currency of the loss or damage, (the exchange rate to apply being the rate as at the date of the delivery of the Goods) of,
the Goods lost, damaged, misdirected, misdelivered or in respect of which a claim arises.
(b)in respect of claims for delay where not excluded by the provisions of these Conditions, the amount of the Company's charges in respect of the Goods delayed.
14.2The limitation of liability referred to in Clause 14.1 shall apply notwithstanding that the cause of the loss or damage is unexplained.
14.3If agreed in writing prior to receipt of the Goods, the Company may accept liability in excess of the limits set out in these Conditions upon the Customer agreeing to pay the Company’s additional charges for accepting such increased liability. Details of the Company’s additional charges will be provided upon request.
14.4Compensation shall be calculated by reference to the invoice value of the Goods plus freight and insurance if paid.
14.5If there be no invoice value for the Goods, the compensation shall be calculated by reference to the value of such Goods at the place and time when they were delivered to the Customer or Owner or should have been so delivered. The value of the Goods shall be fixed according to the current market price, or, if there be no commodity exchange price or current market price, by reference to the normal value of goods of the same kind and quality.
14.6Unless agreed in writing prior to receipt, the Company will not accept or deal with bullion, coin, precious stone, jewellery, antiques, works of art or other valuable Goods. Should any Customer nevertheless deliver any such Goods to the Company or cause the Company to handle or deal with any such Goods other than in accordance with prior written agreement, the Company shall be under no liability whatsoever for or in connection with such Goods howsoever arising.
…
17.2 Defences and Limits of Liability
The defences and limits of liability provided in these Conditions shall apply in any action against the Company whether founded in contract or in tort or howsoever otherwise founded.
…
17.4 Headings
Headings of clauses or groups of clauses in these Conditions are for indicative purposes only.”
55 Clause 5.8 is not relevant for present purposes. “Company” is defined as FPS (clause 3(a)). “Goods” is defined to include the cargo and any container not supplied by or on behalf of FPS, in respect of which FPS provides a service (clause 3(f)).
56 Turning first to clause 13.2, FPS submits that this clause operates in two ways: “First, it says that FPS is not liable for loss or damage to property, other than to the cargo itself. Secondly, it provides that FPS is not liable for any pure economic loss or loss of profit”. I agree, and I note that Tech Swiss does not suggest an alternative construction of this clause. However, as discussed further below, in my view the first way in which clause 13.2 operates, should not be read as providing that a party cannot bring any claims against FPS except for the loss or damage to the property constituted by the cargo. Rather, it should be read as providing that whatever claims a party may have for loss or damage to property, FPS is liable only for such of those claims as they relate to the property constituted by the cargo. FPS further submits that loss and damage to the cargo itself is dealt with in clause 14: “As to the extent of FPS’s liability with respect to Goods, one goes to cl 14”. The controversy between the parties concerns the correct construction of this clause.
57 To do justice to FPS’s submissions on the proper construction of clause 14 of the FPS Standard Terms, I will set them out in full (references to evidence omitted):
“Clause 14 performs three functions:
(a)it sets out the default limitation on FPS’s liability, being the lesser of the value of the goods or the equivalent of US$2.00 per kilogram of the goods (clauses 14.1 and 14.2);
(b)it permits FPS and its customer to agree that the default limitation does not apply, upon payment of additional charges (clause 14.3). If the parties reach this agreement, compensation is calculated either by reference to the invoice value of the goods (14.4) or, where there is no invoice, by reference to the value of the goods at the time and place they were delivered (14.5);
(c)it provides that FPS will not accept certain valuable goods, unless the parties agree to the contrary prior to receipt. It also provides that FPS will not be liable for the loss of certain valuable goods (14.6).
The plaintiffs assert that the default limitation in clause 14.1(a) is excluded by clause 14.4, whenever a customer provides an invoice. This means that when an invoice is given to FPS, then damages will be calculated by reference to the invoice value plus freight and insurance if paid. There are five problems with this interpretation:
(a)it contradicts clause 13.2, which limits liability to “the Goods themselves” and does not include freight and insurance;
(b)it contradicts clause 14.2, which provides that the default limitation in 14.1(a) shall apply notwithstanding the cause of the loss or damage is unexplained;
(c)it makes no commercial sense why the provision of an invoice which discloses only the agreed price of the goods should entitle a customer also to recover freight and insurance;
(d)it ignores cl 14.5, which clearly follows on from 14.4. Thus, if there is no invoice in accordance with cl 14.4, then compensation is to be calculated by reference to the value of the goods. This leaves the US$2.00 per kilogram limitation in the default limitation with no work to do;
(e)by operation of the Customs Act 1901 it is submitted that an invoice will be given to FPS in almost every export and import of goods. This is shown not only by Mr Aparo’s evidence…, but also supported by the provisions of the Act (see the Appendix to these submissions). In the context of these surrounding circumstances, the plaintiffs’ construction gives cl 14.1 virtually no work to do.
The more sensible reading is that cl 14.4 operates to oust the default limitation, only if there is an agreement to do so under cl 14.3. Under clause 14.3, FPS’s agreement to accept liability in excess of the default limitation is affected by, first, the agreement is made before receipt of the Goods, secondly, the Customer agrees to pay additional charges, and, thirdly, details of the additional charges are provided upon request.
If FPS and its customer have reached an agreement under cl 14.3, then compensation is calculated either by reference to the invoice value of the goods plus freight and insurance (cl 14.4) or by reference to the value of such goods (14.5).
The plaintiffs do not allege that they agreed that FPS would accept liability in excess of the default limitation. Thus, FPS’s limitation is calculated by the kilograms of the cargo damaged. Here, it is 10,800 kg less 200 kg, making 10,600 kg. Accordingly, FPS’s liability is limited to US$21,200 at the exchange rate at the time the cargo was delivered, namely 30 December 2014.”
58 For its part, Tech Swiss submits that the effect of clause 14.1 is in substance that it sets the parameters for all claims against FPS “other than those subject to the provisions of Clause 14.4”. Clause 14.4 provides that: “Compensation shall be calculated by reference to the invoice value of the Goods plus freight and insurance if paid”. According to Tech Swiss, it follows that:
“[A]ll claims must be ‘subject to the provisions of Clause 14.4’ unless there is no invoice. That is the only construction of the provision that gives clause 14.4 any meaning.
Accepting that, there is a straightforward construction of the entirety of cl 14. Where an invoice provides for the value of the goods, any compensation for loss or damage will be calculated by reference to the invoice. Pursuant to cl 14.5, where there is no invoice, the value must be calculated by reference to the market value at the place where the goods were or should have been delivered to the customer or owner.
Where the value must be calculated under cl 14.5, the defendant protects itself by including a means of limiting its liability – i.e. cl 14.1 – lest the unknown value of unlabelled goods be outside what might reasonably be expected (for instance the goods are extremely valuable computer chips). Clause 14.6 is similar in that regard in that it limits liability for goods such as precious stones and artworks.”
59 In oral submissions, Mr Harvey described as “simplistic” the contention that the reference in clause 14.1(a) to clause 14.4, means that you immediately jump down to clause 14.4 and then work out how clause 14.1(a) and 14.4 work together. Rather, he submitted, clauses 14.1 and 14.2 together impose the default position for determining liability (that is, value or US$2.00 per kg, whichever is less), even if the cause of loss and damage is unexplained. According to FPS’s submissions as explained by Mr Harvey, clauses 14.3, 14.4 and 14.5 then together set up a regime for what happens when the default position does not apply. In particular, clauses 14.4 and 14.5 are only engaged where there has first been a written agreement under clause 14.3 that FPS would accept a liability in excess of the limits set under the FPS standard conditions.
60 There was no relevant dispute between the parties as to the principles to be applied in construing a commercial contract of the kind between the parties in this case, and they are well settled. They are relevantly stated in the decision of the High Court in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd.[11] In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That inquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract. Unless a contrary intention is indicated, the court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption that the parties intended to produce a commercial result. Put another way, a commercial contract is to be construed so as to avoid it making commercial nonsense or working commercial inconvenience.
[11](2015) 256 CLR 104; [2015] HCA 37, per French CJ, Nettle and Gordon JJ at [46]-[52]
61 In my view, the approach urged by FPS involves a strained and unnatural reading of the provisions of clause 14, and the so-called “simplistic” approach advanced by Tech Swiss is to be preferred. There is no doubt that clause 14 as a whole could have been more happily drafted, but in my judgment the proper reading of the clause for the purposes of this proceeding is sufficiently clear. First and foremost, the natural meaning of clause 14.1(a) is that it applies to all claims “other than those subject to the provisions of Clause 14.4”. That is, the regime under clause 14.1(a) applies except where the cargo has an invoice value. I reject the alternative construction urged by FPS essentially for the reasons submitted by Tech Swiss. More particularly:
· FPS’s construction requires the reader to approach clause 14 as if it sets up two distinct regimes for calculating liability (comprising, first, clauses 14.1 and 14.2 and, second, clauses 14.3 to 14.5) when there is nothing in the structure or content of the clauses to justify this strict demarcation;
· if clause 14.3 was in truth the gateway to the application of clauses 14.4 and 14.5, logically one would expect clause 14.1(a) to have referred to claims “other than those the subject of the provisions of clause 14.3” (or, better still, “clauses 14.3 to 14.5”), not just clause 14.4;
· FPS otherwise fails to provide a sustainable basis for departing from a plain reading of the words “other than those subject to the provisions of Clause 14.4” as they appear in clause 14.1(a);
· commercially it makes sense for FPS’s standard terms to limit the amount of compensation for loss of the cargo to a certain and ascertainable value (namely, its invoice value), and only apply a more elaborate (and potentially arbitrary) approach where the value is uncertain;
· conversely, to adopt a strained reading of clause 14 resulting in a limiting of Tech Swiss’s claim to US$21,600, being a mere 2.9% of the invoice value notified by Tech Swiss to FPS, would make commercial nonsense; and
· contrary to FPS’s submissions, in my view this approach is entirely consistent with the evidence that by law any goods shipped internationally will “almost always” have an invoice value—almost always means there may be exceptions, and it is to these that the more elaborate provisions for calculating the limit on liability will apply.
62 Turning to FPS’s “five problems” with my preferred construction, I have already covered problems three to five in my reasons above. In relation to the first problem, in my judgment the asserted inconsistency with clause 13.2 is illusory. Again, on a plain reading, the first part of clause 13.2 only circumscribes what classes of property loss and damage can be pursued against FPS. That is, FPS is not liable for loss or damage to property, except where the property concerned is the cargo. It does not say loss and damage to the cargo is the only loss that is recoverable against FPS. If that were so, the second part of clause 3.2 would be otiose. Thus, I am satisfied there is no inconsistency between clause 13.2, and the fact that clause 14.4 contemplates compensation for freight and insurance. These are not a loss of property (not being the cargo). Nor are they “pure economic loss or loss of profits, delay or deviation howsoever arising”.
63 Clause 14.2 is more problematic, because it is not clear to me why it refers only to the limitation of liability in clause 14.1. Indeed, the purpose of clause 14.2 more generally is elusive. It may be that it is directed more to the restrictions on claims for delay in clause 14.1(b). In any case, I do not agree that there is any inconsistency between my preferred construction and clause 14.2. In circumstances where the compensation is to be calculated by reference to a clearly ascertainable sum (namely, the invoice value), there is no need to create exceptions that might otherwise operate to amplify the amount of the claim.
64 I note in passing that Tech Swiss has submitted that, even if it were accepted that there was another construction of the limitations under clause 14, “the clause would be at best capable of two constructions and therefore ambiguous, and the contra proferentem rule would require that the ambiguity be resolved against the party seeking to rely on the clause”. FPS argues in response that the interpretation of an exclusion clause in Australian law is no different to any other clause in a contract, relying on the decision of the High Court in Darlington Futures Limited v Delco Australia Pty Ltd.[12] I agree. My approach to the proper construction of clause 14 above has not been guided by an application of the contra proferentem rule.
[12](1986) 161 CLR 500 at 510
What damages are payable by FPS to Tech Swiss?
65 Both parties made detailed submissions on the calculation of damages, depending on whether or not the limitation provisions in either or both of the FPS Standard Terms or the BOL Terms applied. In particular, there was considerable divergence between the parties on whether Tech Swiss’s damages at common law extended to its legal costs for pursuing the claims against its insurers ($277,260.16), storage costs in Bangkok while that dispute was resolved and Tech Swiss determined how to dispose of the damaged fog cannons ($127,726.97), and disposal costs less disposal value ($12,650.55). FPS opposed these claims on grounds of both foreseeability and failure to mitigate loss.
66 In case either party considers that it is relevant to determining Tech Swiss’s damages given my findings above (and I am not sure that it is), I am satisfied on the evidence that the damage caused by FPS’s deficient packing left the fog cannons an effective write-off. I am otherwise relieved of the need to determine these areas of dispute because of my findings concerning both the application and construction of clause 14 of the FPS Standard Terms.
67 In particular, in oral submissions, senior counsel for Tech Swiss Mr Castelan, confirmed that if I found that the FPS Standard Terms were incorporated into its contract with FPS and I accepted Tech Swiss’s construction of clause 14 of those standard terms, Tech Swiss would be limited to the invoice value of the fog cannons and freight. Incidentally, he likewise accepted that the incorporation of clause 17.2 of the FPS Standard Terms into the freight contract had the effect that the limitations of liability applied to Tech Swiss’s claims both in bailment and in contract.
68 As I have so found, the particulars to paragraph 7 of Tech Swiss’s reply in the proceeding dated 23 July 2019, would suggest that the sum claimed by Tech Swiss as damages is the invoice value of the fog cannons and associated equipment of €480,400 (being AUD$738,615.40) plus the cost of freight of AUD$16,526.94. This would result in a judgment in favour of Tech Swiss in the total sum of $755,141. However, I note that in its written submissions, Tech Swiss appears to claim as part of the freight allowable under clause 14.4 a further $7,780.09, relying on copy invoices from “Pioneer Air Cargo Co. Ltd” dated 26 and 30 January 2015, relating to freight handling, customs clearance and storage charges at the port of Bangkok. As far as I can tell, these charges were not the subject of further elaboration or argument in the course of submissions.
69 Nor have I been able to locate in the written or oral submissions on behalf of FPS a clear statement of its attitude to the sums claimed by Tech Swiss under paragraph 7 of its reply, with or without the additional sum referred to in Tech Swiss’s written submission. It is also not clear to me whether the parties wish to be heard on the question of when the sum in Euros claimed by Tech Swiss should be converted into Australian dollars and at what rate, nor on the question of interest. And, finally, there may have been offers exchanged between the parties that may impact on the appropriate order for costs, which it seems to me would otherwise be that FPS pay Tech Swiss’s costs of the proceeding on the standard basis, in default of agreement.
70 I will therefore invite the parties to consult with a view to agreeing the orders that should be made as a result of my findings above and, failing agreement, to submit further short written submissions on any outstanding issues concerning those orders, which I will thereafter determine on the papers.
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Certificate
I certify that these 31 pages are a true copy of the Judgement of His Honour Judge Woodward delivered on 30 September 2019.
Dated: 30 September 2019
Shakti Nambiar
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