Woolworths Ltd v APL Co Pte Ltd

[2001] NSWSC 662

CITATION:	Woolworths Ltd v APL Co Pte Ltd [2001] NSWSC 662
CURRENT JURISDICTION:	Equity Dvision Commercial List
FILE NUMBER(S):	SC 50152/99
HEARING DATE(S):	23, 24 and 25 July 2001
JUDGMENT DATE:	7 August 2001
PARTIES :	Woolworths Ltd (Plaintiff) APL Co Pte Limited t/as APL Lines (Australia) (Defendant)
JUDGMENT OF:	Bergin J

COUNSEL :	Dr AS Bell (Plaintiff) GJ Nell/E Cox (Defendant)
SOLICITORS:	Michell Sillar (Plaintiff) Norton White (Defendant)
CATCHWORDS:	[NEGLIGENCE] - Australian Customs requirement for defendant to provide notice of arrival of goods and a description of the contents of container - Whether defendant owed a duty of care to the plaintiff in describing contents of container - whether the plaintiff's system contributed to the damage. [TRADE PRACTICES - DAMAGES] - Whether plaintiff relied upon misleading description - Whether damages should be apportioned.
LEGISLATION CITED:	Trade Practices Act, 1974 (Cth)
CASES CITED:	Argy & Anor v Blunts & Lane Cove Real Estate Pty Limited & Ors (1990) 26 FCR 112 I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2000) 179 ALR 89
DECISION:	See paragraph 81.

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

BERGIN J

DATE: TUESDAY 7 AUGUST 2001

50152/1999 - WOOLWORTHS LTD v APL CO PTE LTD t/AS APL LINES (AUSTRALIA)

JUDGMENT

1    In August 1998 a cargo of two containers of frozen cooked black tiger prawns set sail from Sydney on the vessel, the APL Emerald , bound for Thailand. The prawns were being returned by the plaintiff Woolworths Ltd to the original supplier in Bangkok. When the cargo reached Fremantle it was unloaded at Woolworths’ direction and returned to Sydney on the vessel, the APL Ivory , arriving on 11 September 1998. After arrival in Sydney one of the containers of prawns was stored in Woolworths’ agent’s storage depot without refrigeration and the cargo suffered thaw damage.

2    The plaintiff claims that the defendant, APL Co Pte Ltd trading as APL Lines (Australia) (APL), as the carrier of the goods owed a duty of care to the plaintiff to provide the plaintiff’s agent, Smith Bros Trade and Transport Terminal Pty Ltd (Smith Bros), with sufficient instructions to ensure the prawns were properly cared for after delivery to Smith Bros. It claims that APL breached that duty of care. Woolworths also makes a claim against APL pursuant to s 52 of the Trade Practices Act, 1974 (Cth) (TPA) . It claims that APL’s inaccurate description of the goods was relied upon by Woolworths’ agent, Smith Bros, and as a result the container was stored without power for refrigeration and the cargo was damaged.

3    This matter was heard on 23, 24 and 25 July 2001. Dr A.S. Bell, of counsel, appeared for the plaintiff and Mr G.J. Nell, of counsel, leading Mr E. Cox, of counsel, appeared for the defendant.

Woolworths & Smith Bros.


4    Smith Bros operates a bonded warehouse and storage facility at Port Botany. From 1994 Smith Bros contracted with Woolworths to pick up its containers from the wharf and transport them to Smith Bros’ storage facility for storage pending instruction for delivery to the various Woolworths’ storage centres or stores.

5    At any one time Smith Bros would hold approximately 400, 40 foot containers and 200, 20 foot containers for Woolworths. Approximately 60 Woolworths’ containers were moved in and out of the facility on a daily basis.

6    There are apparently two types of containers utilised in the shipping of Woolworths’ goods. They are containers without the capacity for refrigeration and those with the capacity for refrigeration. The latter are known as Reefers. Reefers are also used for merchandise and goods that do not require refrigeration and have been referred to in the hearing as non-operational Reefers. When goods are to be refrigerated the containers are referred to as Operational Reefers. On the outside of the Reefer there is a small unit which has a glass or perspex window. If a Reefer is operational a chart known as a Partlow chart which records the temperature of the container is inserted into that unit.

7    The relationship between Woolworths and Smith Bros was governed by the procedures set out in a document entitled “ Sydney Transport Working Procedures” (Ex.A p. 2-3). Those procedures included the following:
2. OPERATIONS
2.1 All Containers are to be moved via Continuing Permission ex container terminals/wharf to Smith Bros. Botany depot. Containers shipped with either NOL or OOCL will be moved using the Shipping Line C.P., in all other cases Smith Bros. C.P. will be used.
2.2 Containers will be stored in a dedicated area within Smith Bros. depot until required for delivery to Woolworths warehouses. Customs clearance of containers will be arranged by Woolworths Shipping Department.
2.3 General Merchandise containers will be delivered to Woolworths Moorebank warehouse and will be identified in order of delivery by a “priority list” supplied by Woolworths Shipping Department. Moorebank warehouse will liaise directly with Smith Bros. to organise the rate of delivery of containers and removal of empty containers from the warehouse dock. As a general rule at least 6 containers are to be positioned at Moorebank prior to commencement of work each day.
2.4 Instructions for Food containers to be delivered to a nominated warehouse, will be provided each day, for delivery the following day, by Woolworths Shipping Department on a container by container basis.
2.5 Empty containers are to be delivered to the nominated Container Park within 24 hours of unpacking to minimise any container detention costs.
3. REPORTS
3.1 For general merchandise containers Woolworths Shipping Department will supply, by facsimile before 12 noon each day, a “Priority List” of containers. This list will be divided into 2 sections, the first section will be priority containers (Ad stock, out of stocks etc), the second section will be based on arrival date (oldest to newest). Containers from section 1 must be delivered in order and no containers from section 2 can be delivered until section 1 is complete. A copy of the list will also be faxed to Moorebank warehouse. The following days list will be compiled based on previous days unpacking, additional priorities and projected warehouse unpacking estimate.
3.2 Smith Bros. will supply before 9 am each day the details of containers handled the previous day i.e. containers picked up ex wharf and delivered into depot, containers delivered to warehouse, empty containers returned, containers in storage and details of any LCL cargo picked up and delivered to warehouse.
3.3 Smith Bros. will supply a weekly summary of all container movements, details as in 3.2., at the close of business each Tuesday to reach Woolworths office by 9am each Wednesday.

8    The arrangement between Smith Bros and Woolworths was convenient because it meant that Woolworths did not have to leave the containers on the wharf or at the terminal or take them to its own premises prior to the time at which the goods were required in the stores. The system utilised to retrieve the containers from Smith Bros when they were required was described in evidence by Mr Stephen McMaster, the Customs and Shipping Supervisor with Woolworths.

9    Smith Bros faxed daily to Woolworths a list of all Woolworths’ containers held in storage by Smith Bros. The daily list included the container number, the date it was delivered into Smith Bros’ depot and the “stack” in which the container was stored. Importantly it also provided the detail of the “size” of the container, either 20 or 40 with a code next to it. That code was “GP” for General Purpose “HC” for high cube, which is an over-height container and “RF” for Reefer.

10    Mr McMaster received the daily list of containers from Smith Bros and then distributed copies of it to relevant Woolworths’ personnel who determined how many of the stored containers were required to be delivered to the Woolworths’ warehouse for delivery to stores. Mr McMaster said that when he received the list he did not check its contents. Once the relevant Woolworths’ personnel decided which containers were required Mr McMaster was notified of the numbers of the containers. He would then prepare a list and forward it to Smith Bros.

11    When goods were imported, Woolworths received either a Bill of Lading or an Express Release Bill, usually prior to the goods arriving in Sydney. These documents included the identification of the vessel upon which the goods were carried, the ports of loading and discharge, the identification of the cargo, the container and seal numbers and if it was an Operational Reefer, the identification of the container as such together with an instruction as to the temperature at which the container was to be stored.

12    After arrival of the vessel, Woolworths also received from APL an Import Delivery Order in respect of each container. That Order included the container number, the name of the vessel upon which the container was carried, the voyage number, the status (full or empty) and type (general/hazard/reefer/20ft/40ft/over height/over width) of container.

13    From time to time Woolworths also received from APL a document referred to as an Arrival Notice which contained the same information as that contained in the Bill of Lading. Neither the Bill of Lading nor the Arrival Notice was provided to Smith Bros by APL or Woolworths.

14    Woolworths sometimes, but apparently rarely, required Smith Bros to deliver containers to the shipping terminal for export, or as in this case return to the original supplier. On these occasions Smith Bros would supply to the terminal and APL a document entitled Export Receival Advice. That document included the name of the vessel upon which the goods were to be carried, the container number, the container type, the discharge port and final destination, the shipping line and the voyage number. It also included a description of the commodity and if the type of container was an Operational Reefer, the temperature at which the container was to be set.
The Continuing Permission and Notice


15    The Continuing Permission (the CP) is the Australian Customs approval or authority issued to APL which permits containers of cargo to be moved from the bonded store at the discharge terminal to an alternative storage facility, such as Smith Bros, whilst still under bond and pending Customs clearance.

16    The Australian Customs Service imposed certain conditions upon a Permission Holder in respect of goods that were moved pursuant to a CP. Those conditions included the following in respect of goods that were released by APL to Smith Bros:
3. The permission holder must supply to Smith Bros Trade and Transport Terminal Pty Ltd to whom the goods are to be moved, no later than the time at which the goods are received into those premises, impending notice of the arrival of the goods and relevant details identifying the contents.
4. For release of the container and its contents from the wharf or terminal to a Section 77G, of the Act, depot or park, the Permission Holder must present to the wharf or terminal operation a document endorsed with the Continuing Permission number applicable to the premises to which the goods are to be moved. The document in the case of removal to a depot by road - is the delivery order; depot by rail - is the container list; park - is a copy of the Continuing Permission approval.

17    APL issued the “impending notice” referred to in paragraph 3 of the conditions to Woolworths, Smith Bros and Customs. The Notice has been referred to in the proceedings, wrongly in my view, as the CP. Mr Stephen McDonough, the customer service director of APL, referred to it as the container list, and gave evidence that the CP was a separate document. The document contained a statement “movement under our continuing permission number no N142/DO18J”. I intend to refer to the document as the Notice.

18    The Notice provided details of the identity of the vessel upon which the goods were carried and the estimated time of arrival in Sydney. It also listed the container number, a description of the goods, the Bill of Lading number, the container size, the number of packages and the gross weight in kilograms.

19    Under the heading Description of Goods (Des. Goods) various codes were utilised. They were GM, defined on the Notice as General Merchandise and FD, defined on the Notice as nappies and plastic bags. Some of the Notices that are in evidence demonstrate that although the code RF was used prior to August 1998, no definition of the code appeared on the Notice. There is no issue that the term RF was understood by APL, by Smith Bros and by Woolworths to refer to a Reefer.

20    The Notice was the only document received by Smith Bros in relation to Woolworths’ imported containers that it was to collect from the terminal for storage awaiting request for delivery to Woolworths. These arrangements between Smith Bros and Woolworths, in particular the arrangement that Smith Bros received no information in relation to the containers other than the Notice, were not discussed with nor disclosed to APL prior to the problem with the container, the subject of these proceedings.

Smith Bros’ procedures


21    If Smith Bros was requested to deliver containers to the terminal for export, Woolworths provided the information to Smith Bros which was used by Smith Bros to generate the Export Receival Advice referred to above, which was then presented to the terminal when the containers were delivered for shipment.

22    When goods were imported by Woolworths, Smith Bros received the Notice from APL and the information within it was typed into the Smith Bros database. That information included the container number, the container size and the descriptive code which would include GP or RF. Although the Notice referred to goods which did not require refrigeration as GM for General Merchandise, Smith Bros used the code GP for General Purpose. It is apparent from earlier Notices that APL had utilised the code GP, although the definition section referred to a code GM with the definition as General Merchandise (Ex. B 2/2/98).

23    Smith Bros then generated a delivery order in triplicate. The delivery order listed the number of the order, the CP number referred to in the Notice, the date the container was registered in the database, the container number, the size of the container including its description, the vessel name and voyage number, the shipping company and the destination from which the container was to be collected. All of this information was obtained from the Notice.

24    There were five other categories of information on the delivery order that were left blank at the time the delivery order was generated. They were the driver’s name, the registration of the truck used for collection, the seal number of the container, the stack location at which the container was stored at Smith Bros and the pick up date.

25    Smith Bros’ facility consists of 3 acres of warehousing and 7 acres of sand and hard paved area. The Operational Reefer containers were usually stored at the front section of the facility, although there was a small capacity to store Operational Reefer containers at the back of the facility. The general merchandise/purpose containers were stored at the back of the facility.

26    Smith Bros provided the triplicate delivery order to the driver who attended the terminal to collect the container. The terminal released the containers to the driver on presentation of the triplicate delivery order. The terminal retained two copies of the delivery order and the driver kept the remaining copy. The delivery order was used by the driver to identify the relevant container to be collected and return it to Smith Bros to be unloaded in the relevant area for storage. Once the container had been delivered to Smith Bros the driver completed the balance of the delivery order inserting his or her name, the registration number of the truck, the seal number and the stack location in which the container was stored at Smith Bros together with the date on which the collection and storage occurred.

27    Smith Bros has an office towards the front of the yard where a person referred to as “the allocator” provided the delivery order to the driver. On arrival at the terminal or other facility from which the container was to be collected the driver presented the delivery order to the allocator at that facility who then provided the driver with a “bat number”. The bat number is a small piece of cardboard which has a magnet inside it.

28    Once the allocator at the terminal checked the delivery order against the relevant records of the terminal the driver was allocated a “marked lane” into which the driver reversed the truck for collection of the container. Once the truck was parked in the marked lane the driver left the truck and swiped the bat over a machine which recorded the truck’s lane position.

29    That information was then processed through the terminal’s database and a straddle operator then collected the particular container with the straddle and brought it to the position in the marked lane where the truck driver awaited the placement of the container onto the truck. The straddle operator apparently did all the work as trucks were not permitted into the area of the terminal where the straddle operated. The evidence is that the truck drivers were unaware of the location from which the container was being collected. After the container was placed onto the truck the driver checked that it had been placed correctly, checked the seal number on the container and departed for the Smith Bros depot.

30    Although there is some conflict about the procedure on the return to Smith Bros there is some evidence that the driver went immediately to the office and handed the delivery order back to the allocator who then provided a sticker to the truck driver to place on the container if the container was an Operational Reefer. Stickers were not provided for general merchandise/purpose containers or non-operational Reefers.

31    The sticker was placed on the side of the container and the truck was then driven to the forklift driver within the depot grounds. The forklift driver was informed of the requirements for the storage of the container, that is, whether it was a general merchandise/purpose container or an Operational Reefer.

32    Other evidence suggests that the driver did not attend upon the allocator at Smith Bros until after the container had been delivered to the forklift driver and stored. There is no evidence from an allocator of what procedure was adopted to check Smith Bros’ records or process the storage of the container. It seems from the evidence of the truck driver, Mr Hooper, that the visit to the allocator on return to Smith Bros was necessary if the delivery order described the container as a Reefer and a sticker had to be obtained.

The subject container


33    The container, the subject of the proceedings, was container NOLU 2711869 (1869). The other container of prawns shipped with it and other containers was NOLU 2712870 (2870). On 24 July 1998 Woolworths requested Smith Bros to collect “2 x 20 reefer containers” from a container park for the shipment on the APL Emerald. The containers were collected by Smith Bros and at Woolworths’ request taken to Arndell Park for the prawns to be packed into the containers. The driver waited at Arndell Park whilst the containers were packed and they were then taken to Smith Bros and put on power until the delivery to the terminal for departure.

34    On 10 August 1998 APL forwarded a fax to Woolworths confirming the booking of the two containers for the departure on the APL Emerald on 16 August 1998 bound for Thailand. The fax described the container details as “2x 20 Reefer”. On 11 August 1998 Mr McMaster signed a forwarding instruction which included the statement “the goods are stowed in refrigerated container at minus 20 degree C or cooler”.

35    On 12 August 1998 Woolworths sent a fax to APL in relation to the subject container 1869 stored at Smith Bros awaiting departure. It stated “this reefer container is not at the correct temp. Temp should be at -20 or cooler”. APL arranged for a technician from Quality Container Management Pty Ltd to attend Smith Bros and reset the temperature. On 14 August 1998 APL invoiced Woolworths for “call out by APL reefer technicians to Smith Bros as per your request. The reefer was incorrectly set at -7oc and was re-set to -18oc, as per Smith Bros advice”.

36    Smith Bros delivered the containers to the shipping terminal and presented the Export Receival Advice in respect of each container. That Advice included the description of each container as “20 Reefer” with an instruction as to the temperature at which the container was to be set at “-20”. The APL Emerald apparently departed on 16 August 1998.

37    On 20 August 1998 Mr McMaster requested APL to make arrangements to have the goods returned to Sydney. On 25 August 1998 APL forwarded an invoice to Woolworths which stated that incorrect cargo had been loaded and it was to be discharged at Fremantle and returned to Sydney. The invoice referred to both container numbers and described them as “R20”. The containers departed Fremantle on 4 September 1998 aboard the APL Ivory . Woolworths and Smith Bros received the APL Notice on 7 September 1998. On 8 September 1998 APL faxed an invoice of that date to Woolworths which described the containers as “2 x 20ft reefers” and listed the container numbers.

38    The APL Ivory arrived in Sydney on 12 September 1998 and the containers were stored at Patricks until 17 September 1998 when they were collected and delivered to Smith Bros. Both of the containers of prawns were listed in the Notice with the code GM. Both containers were Reefers and both were operational during the voyages to and from Fremantle. It is also clear that both containers were refrigerated or operational whilst they were at Patricks awaiting collection by Smith Bros.

39    The other container was collected from Patricks on the same day as the container the subject of these proceedings, but by a different driver. It is apparent that the driver collecting the other container noticed that the Reefer had a “monitoring card”, which was probably a Partlow Chart. Having noticed the card the driver went into Patricks’ office and “queried whether or not this container was an Operational Reefer or not, for the paper work indicated it was General Purpose” (Ex. 2). I am satisfied that the reference to “paper work” was a reference to the Delivery Order.

40    Patricks confirmed that it was an Operational Reefer and on return to Smith Bros a telephone conversation occurred between an unidentified representative of Smith Bros and a representative of Woolworths, also unidentified. Smith Bros was informed that the goods in the container were frozen prawns and the Reefer was put on power.

41    The container the subject of these proceedings, although being refrigerated at Patricks, was collected as a “General Purpose” container and the truck driver, Mr Hooper, transported it to Smith Bros’ depot where it was placed in a stack with General Purpose or GM containers. It was not refrigerated. On about 13 October 1998 it was noticed that the container was leaking and it was subsequently determined that the contents were thaw damaged.

42    Both delivery orders that were given to the respective Smith Bros drivers stated that the containers were “20 General Purpose”. This description had been taken from the APL Notice which had described each container as “GM” the equivalent to Smith Bros GP - General Purpose.

APL Evidence


43    APL called evidence to establish that the code RF was not used on the Notices that were sent to Smith Bros prior to the problem with the container the subject of these proceedings. Ms Barton gave evidence that it was not her practice to use the code RF until after she was directed to do so in October/November 1998.

44    I am unable to accept this evidence. There are Notices in evidence (Ex B) that demonstrate beyond any doubt that the code RF was used by APL prior to that time. Indeed on 16 January 1998 Ms Barton sent a Notice to Woolworths, Smith Bros and Customs in which the code RF was used in the description of goods section in the Notice.

45    Mr McDonough claimed in his evidence that the purpose of the Notice was to advise Woolworths that the Australian Customs approval or CP was in place so that the containers could be collected by Smith Bros. That may have been one of the purposes however it is clear from the Australian Customs Service conditions that APL, as the permission holder, was required to give the Notice to Smith Bros and to provide “details identifying the contents”. It is clear that the “contents” in the context of the Australian Customs Service document meant the contents of the container.

46    APL chose to utilise the codes and their definitions in the Notice to comply with the requirement to identify the contents of the container. The subject container was wrongly coded and thus the contents were inaccurately identified. Mr McDonough’s evidence on this inaccuracy was as follows:
Q Earlier in 1999 or in late 1998 was he (the document manager) the subject of any criticism by management in relation to this incident?
A It certainly was discussed, and I’d say criticism, yes.
Q He was criticised because the document should have contained the description RF correct?
A Incorrect.
Q Well why was he criticised?
A He was criticised - my criticism of him was that the document, the wording of the document and the inferences that it made were inaccurate.
Q And those inferences arose from the description, the coded description of the goods, correct?
A That was part of it. I think more significant from my point of view was it purported to be an instruction to carry or it wasn’t; which was not what it was intended to be.
Q Your point was that a reasonable person reading that document could construe it as an instruction to carry?
A That was my criticism.
Q And as a result of that criticism you implemented a new practice, did you not, for such documents after this incident?
A Correct.
Q Which makes it plain that it’s not an instruction to carry?
A Correct.
(tr. 129)

47    Mr McDonough’s affidavit stated that after APL received a fax from Woolworths on 12 August advising that container 1869 was set at the wrong temperature APL sent the technician to Smith Bros to reset the container. This was prior to the container being loaded onto the APL Emerald . APL had documentation which identified the subject container as an Operational Reefer. It is also clear that one month before issuing the Notice to Smith Bros and Woolworths describing the contents as GM, APL had been involved in obtaining contractors to reset the temperature of the subject container.

48    I reject APL’s suggestion in Mr McDonough’s evidence that the only purpose of the Notice was to advise Smith Bros of the approval granted by Customs. I also reject any suggestion that the code RF was only used after this incident.

The plaintiff’s case


49    The plaintiff claims that the defendant owed a duty of care to the plaintiff to ensure that the identification of the contents of the container was accurate. It claims that such duty arose from the relationship that had been in place since 1994, in which APL had set up a system whereby it described the content of the containers in the coded form, and knew that Smith Bros would rely upon that code as an accurate description.

50    A peculiar feature to the evidence in the plaintiff’s case is that the only document Smith Bros received in respect of the identification of the contents of the container was the Notice. That would mean that when Smith Bros collected an Operational Reefer and stored it on power it would not have information identifying the correct temperature at which the container was required to be set. There is nothing about the temperature at all in the Notice. That appears only in documents such as the Bill of Lading or Express Bill and in the Export Receival Advice.

51    That position seems peculiar when the maintenance of the correct temperature is so important to the integrity of frozen cargo. I do not know how it came about that the lower temperature of the subject container was noticed at the Smith Bros depot on 12 August 1998. It may have been a Woolworths’ employee who was present at the depot or it may have been a Smith Bros’ employee. However it has to be remembered that Smith Bros did have information about the correct temperature of that container at that time provided by Woolworths for the generation of the Export Receival Advice.

52    It is also clear beyond doubt that Woolworths knew that these containers were Operational Reefers and that they required refrigeration at minus 20 degrees C.

53    It is more probable than not that other Operational Reefers have been wrongly identified in Notices issued by APL to Smith Bros and Woolworths as GM or general merchandise. One of the other containers in the Notice sent to Smith Bros and Woolworths on 7 September 1998 and another container in an earlier Notice were so described. From the evidence I conclude that more probably than not, notwithstanding the description as GM, the Operational Reefers were placed on power whilst stored at Smith Bros.

54    There is no direct evidence as to whether that outcome was serendipitous or the result of checking the records against the Notice. However the former seems more probable in the circumstances of the manner in which the parties and Smith Bros operated.

55    Both Woolworths and Smith Bros had recent information about the subject container and recent experience with the container to alert them to the fact that GM was an inaccurate description of the contents of the container. Had Mr McMaster turned his mind to the recent history by a simple check of the code of the container he would have identified the error. He gave the following evidence:
Q You knew the APL Ivory’s estimated time of arrival in Sydney on 11 September 1998?
A Yes.
Q You knew both of those containers contained prawns?
A Yes.
Q You knew both of those containers were refrigerated?
A Yes.
Q You knew they both had to be kept in power at all times in order to preserve the cargo?
A Yes.
Q So, on 7 September you were clearly aware that there two containers on the APL Ivory from Fremantle containing prawns in reefers that required power, correct?
A Yes.
Q When you received the continuing permission at page 39 and 39A did you even look to see whether that included the two containers that you had arranged to be exported and arranged to be brought back to Sydney?
A I would say not, no.
Q But had you looked at it you would have realised those last two containers with the asterisk next to them were the two containers that had been the subject of your discussions no more than two weeks ago with Lee-Anne Larter; correct?
A Yes.
Q There would have been no doubt in your mind if you looked at those documents they were refrigerated containers and were required to be kept on power, correct?
A Yes.
(tr. 71-72)
56    The other driver who collected the other container made enquiries because he observed that the container was a Reefer and probably had a Partlow Chart in situ. Once that enquiry was made there was a communication between Smith Bros and Woolworths in which Woolworths was alerted to the fact that one of the containers in the Notice had been inaccurately described. It is apparent that no one turned their mind to checking to see whether the other of the two containers had been accurately or inaccurately described.

Claim in Negligence


57    The plaintiff’s case is that the duty to describe the contents of the container accurately arises from the existence of what has been referred to as the tripartite relationship between Woolworths, Smith Bros and APL since at least 1994. APL used codes to comply with its obligation under the conditions imposed by Customs to permit the goods to be moved to Smith Bros. It is clear that Smith Bros relied upon the description advised by APL to create its delivery orders. I am satisfied that APL knew that Smith Bros utilised the information it supplied in the Notices to Smith Bros. The Notice stated in part that the Notice was to be presented when collecting containers.

58    The delivery order generated by Smith Bros from APL’s Notice was presented for the collection of the container. That delivery order was checked against the terminal’s records and, for APL’s purposes, APL needed a record of when such collection occurred. The delivery order was matched against the description of the goods provided by APL.

59    Mr Nell submitted that the code utilised on APL’s Notice to describe the goods was only for a Customs purpose and was not intended to be an instruction to Smith Bros as to how to handle the goods and store them. However I am satisfied from the evidence of Mr McDonough, that APL accepted that the Notice gave the impression that it was just such an instruction. That is why the Documents Manager was criticised and I am satisfied that is why APL called evidence in an attempt to suggest that the code “RF” was not used prior to this incident.

60    I am satisfied that APL knew that Smith Bros was relying upon the Notice which identified the contents of the container in a coded fashion and that Smith Bros would handle the goods accordingly. I am satisfied that it was reasonably foreseeable that Smith Bros and Woolworths would rely upon the description of the contents of the container utilised in the Notice. I am also satisfied that it was reasonably foreseeable that the wrong description of an Operational Reefer as a general merchandise container could cause the contents of the container to be damaged if they were not placed on power.

61    I am satisfied that in the circumstances of the system that was put in place between APL, Woolworths and Smith Bros, APL owed a duty of care to Woolworths to provide Smith Bros with an accurate description of the contents of the container. I am satisfied that in this instance APL breached that duty of care by the inaccurate description of the contents of the container. I am also satisfied that the inaccurate description of the container led to the container being placed in storage without power thus causing the damage to the contents of the container.

Contributory Negligence


62    The defendant claims that the plaintiff, Woolworths, was guilty of contributory negligence by reason of the system it utilised in not providing Smith Bros with any information in respect of the contents of the container and in failing to check the information it possessed against the contents of the Notice.

63    It is true that Smith Bros was only provided with the Notice from APL in respect of the arrival of the goods and their collection. Mr McMaster did not check the Notices provided to Woolworths against any of the information Woolworths held in respect of the contents of the container. Additionally when the Woolworths’ personnel held their weekly meeting to decide which containers should be retrieved from Smith Bros, it is apparent that no person checked or noticed the description of the contents of the container. It is reasonable to expect that at such a meeting the Woolworths’ personnel were deciding which goods were required to replenish the stock within the stores and accordingly must have had some information additional to the container number and code in the daily container list to enable them to know what goods were in the containers.

64    There were approximately 18 weekdays in the period in which the subject container was stored at Smith Bros until the damage was noticed. That means that there were approximately 18 occasions on which the daily list of containers was forwarded to Woolworths by Smith Bros. Mr McMasters’ practice meant that he did not check the list on any of the 18 occasions and simply passed it on to the personnel for the weekly meeting. It is probable that there were at least two and probably three such weekly meetings in the period of the storage of the container at Smith Bros.

65    When Mr McMaster created the container list for delivery from Smith Bros to Woolworths a further opportunity for checking the description of the contents of the container in the Notice against Woolworths’ information was not taken up.

66    Additionally Smith Bros, Woolworths’ agent, also had information in respect of this container which had been generated in its computer system in August. The Export Retrieval Advice included the correct description of the container and the appropriate instruction as to the temperature at which the container was to be set whilst stored. That information was not cross checked against the Notice provided to Smith Bros by APL.

67    I am not satisfied on the evidence that a Partlow Chart was in place on the subject container when Mr Hooper collected the container. In those circumstances Mr Hooper could not have been expected to pursue the same enquiries made by the driver who collected the other container.

68    I have included in my consideration of this aspect of the case the fact that there were a large number of containers being moved in and out of the Smith Bros Dept on any one day, and the fact that there was a large volume of containers to which Woolworths had to give attention on a daily basis.

69    I am satisfied that it is reasonable to expect that Woolworths would provide information to Smith Bros to enable it to make a proper check of the containers to ensure that the goods were appropriately stored. The system put in place was flawed in this regard.

70    By reason of the failure of Woolworths to provide relevant information to Smith Bros to enable it to store the containers appropriately, and by reason of the fact that Woolworths simply did not check the information provided to it by APL I am satisfied that Woolworths contributed to the loss it suffered.

71    In fixing the level of contribution I must have regard to what is fair and just in all the circumstances. The number of opportunities that were available to Woolworths to check the information it had in its possession that were ignored and the flawed system put in place with Smith Bros leads me to the conclusion that a fair and just figure is 30%.

Trade Practices Claim


72    The plaintiff claims that APL, in trade and commerce, made a misleading or deceptive statement upon which the plaintiff, through its agent, relied, and as a result of such reliance damage was caused to the cargo.

73    The defendant repeated submissions it made in relation to contributory negligence in support of a submission that the plaintiff did not rely upon the statement in the Notice describing the contents of the container as GM. Mr Nell submitted that the true cause of the damage was not the reliance on the misdescription of the container but the plaintiff’s failure to take reasonable care of its cargo in implementing the system referred to earlier in both its offices and with its agent.

74    In Argy & Anor v Blunts & Lane Cove Real Estate Pty Limited & Ors (1990) 26 FCR 112 Hill J said at 138:
A case may perhaps be imagined where an applicant is so negligent in protecting his own interests that there will be a finding of fact that the representation complained of was not in the circumstances a real inducement to his entering into a contract. In such a case the element of causation between misrepresentation and damage will have been severed by the intervention of the negligence of the applicant. However, in my view, the present cannot be said to be that case.

A somewhat similar view was recently expressed by French J in Kewside Pty Ltd v Warman International Ltd [1990] ASC 58,821:
The damages recoverable under s 82 of the Trade Practices Act for a contravention of s 52 are measured by the loss or damage suffered by reason of the contravention. The causal connection is not that of the strict logician, but is to be understood according to common sense concepts - Yorkshire Dale Steamship Co Ltd v Minister of War Transport [1942] AC 691 at 706. Selection principles influenced by policy and not merely logic operate. Concepts such as contributory negligence and mitigation have no role as such in this process but analogous notions may apply to decide whether or not a claimed loss was truly caused by the contravention in question: Munchies Management Pty Ltd v Belperio (1988) 84 ALR 700 at 712; Elna Australia Pty Ltd v International Computers (Aust) Pty Ltd (No2) (1987) 16 FCR 410 at 418 - 419; Pavich v Bobras Nominees Pty Ltd (1988) 84 ALR 285.

75    I am not of the view that causation in this case is severed. The system utilised by Woolworths, Smith Bros and APL had been in operation for some years with thousands of containers being moved from APL to Smith Bros for storage and clearance and then moved to Woolworths’ premises. The Notices had been relied upon by Woolworths and Smith Bros during the whole of that period.

76    The fact that Smith Bros relied upon the Notice was certainly brought to APL’s attention on the day the other container was collected. The driver informed Patricks that the “paper work” had not described the container as an Operational Reefer and asked Patricks for clarification. The fact that Customs required APL to describe the contents of the container in the “impending notice” is important. The goods were still pending Customs clearance and the description was, absent evidence to the contrary, intended to be relied upon by Smith Bros as an accurate description.

77    I am satisfied that Smith Bros, as Woolworths’ agent, did rely upon the misleading or deceptive statement in the Notice and that as a result the goods were stored without power thus causing the damage.

78    Mr Nell submitted that I should apportion the damages awarded under s 82 in respect of the claim made pursuant to s 52 of the TPA . He submitted that s 87 of the TPA confers a wide discretionary power which would enable me to apportion the damages award. Mr Nell relied upon the decision of the Queensland Court of Appeal in I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2000) 179 ALR 89.

79    That was a case in which a valuer had provided a wrong valuation of real property which was relied upon by a company which lent money on that valuation. The trial judge found two independent causes for the loss. Operating independently of the misleading statement was the defendant’s conduct in approving the loan without making appropriate inquiries about the borrower’s capacity to service the loan. On appeal their Honours said at par [20]:
The process of sorting out a variety of losses connected with the contravention, into those which should fairly be allowed and those which should not, is a means of preventing the recovery of an excessive amount by allowing all losses which can be causally connected with the misleading statement to be recovered; it is a means of allowing for contributory negligence.
80    I have had regard to the plaintiff’s conduct in this case for the purposes of deciding whether causation is severed. Once the plaintiff’s agent relied upon the misleading statement the container was not refrigerated, thus causing the damage. The cause, or certainly the substantial cause, of the loss suffered by the plaintiff was the defendant’s misleading conduct. The plaintiff is therefore entitled to recover the loss so caused. I am not satisfied this is an appropriate case to apportion or reduce the damages to be awarded to the plaintiff.

Conclusion

81    There will be judgment for the plaintiff in the full amount claimed. Such amount is the subject of agreement between the parties which is yet to be notified. The parties are to bring in Short Minutes containing an order for judgment in that amount and an agreed costs order. I will hear argument on costs if the parties are unable to agree to an order.
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Last Modified: 08/08/2001