In our article "Is the Carriage of Goods Act 1979 a Code?" we reported the Court of Appeal decision Ports of Auckland Ltd v Southpac Trucks Ltd, concerning the interpretation of the Carriage of Goods Act 1979 (“Act”). The Act applies compulsorily to domestic carriage in New Zealand. The Supreme Court, New Zealand’s highest Court, has now overturned the decision of the Court of Appeal.
Parties interested in a truck had contracted with a shipping line for the carriage of the truck, as cargo, from overseas to a New Zealand destination. Ports of Auckland had been contracted by the shipping line to discharge the truck in Auckland. Ports of Auckland had subcontracted those services. The subcontractor, Wallace, drove the truck off the ship and across the premises of Ports of Auckland. A forklift, operated by an employee of Ports of Auckland, whilst on unrelated business for the Ports, negligently collided with the truck, damaging it. The truck owner sued Ports of Auckland in negligence for the damage to its truck.
Section 6 of the Act provides:
Notwithstanding any rule of law to the contrary, no carrier shall be liable as such, whether in tort or otherwise, and whether personally or vicariously, for the loss of or damage to any goods carried by him except—
(a) In accordance with the terms of the contract of carriage and the provisions of this Act; or
(b) Where he intentionally causes the loss or damage.
The question for determination was whether Ports of Auckland was a carrier for the purpose of section 6 of the Act, so that it could rely on the statutory regime and limitation of liability for loss and damage to cargo. The majority of the Court of Appeal had decided that Ports of Auckland was not acting as a carrier, so that it could be held liable in negligence by the truck owner, without the protection of the Act.
“Carrier” is widely defined in the Act. It includes persons who carry goods themselves or perform incidental services, and persons who procure carriage or incidental services. Incidental services are services, the performance of which is undertaken to facilitate the carriage (such as, for example, stevedoring). Under the Act, the carrier’s liability is strict and limited to $1500 per unit. Liability for loss or damage to goods is channeled to the contracting carrier, i.e. the party who contracts for carriage with the shipper or consignee. Any actual carrier, who performs (part of) the carriage is, in turn, liable to the contracting carrier for loss of or damage to goods occurring while he is responsible for the goods.
The Supreme Court emphasised the purposes and underlying policies of the Act. It considered that the Act is intended to cover the situation of all carriers throughout the period of the carriage, thus enabling insurance arrangements to be made with greater certainty. The Supreme Court held, unanimously, that there was no doubt that Ports of Auckland was a carrier of the truck at the time of the incident. This was so, because the Ports had either procured Wallace to carry the truck, or procured Wallace to perform the incidental service of stevedoring in relation to the truck. It was the Ports’ status as a carrier that mattered, not the purpose of the actions which resulted in the damage.
In the circumstances and in accordance with the scheme of the Act, the owner of the truck should have claimed against the shipping line, who was the contracting carrier in this case. The contracting carrier could, in turn, have sought reimbursement from Wallace, the actual carrier, notwithstanding the latter’s lack of fault.
The decision of the Supreme Court has restored the position to what was previously assumed.
Carriers are protected by the Act. Carriers who subcontract aspects of the carriage to others do not lose the protection of the Act by doing so.
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