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13 April 2010
On December 22 2008 the Court of Appeal rendered a majority decision in Ports of Auckland v Southpac Trucks with implications for all parties performing carriage in New Zealand (for further details please see "Is the Carriage of Goods Act 1979 a Code?". The case concerned the interpretation of the Carriage of Goods Act 1979, which applies compulsorily to domestic carriage in New Zealand. The Supreme Court has now overturned the Court of Appeal's decision.
Parties with interests 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. It subcontracted these services. The subcontractor, Wallace, drove the truck off the ship and through the Ports of Auckland's premises. A forklift, operated by a Ports of Auckland employee on unrelated business for Ports of Auckland, negligently collided with the truck and damaged it. The truck owner sued Ports of Auckland in negligence for the damage to its truck.
Section 6 of the act provides that:
"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) [i]n accordance with the terms of the contract of carriage and the provisions of this Act; or
(b) [w]here 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, 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; thus, it could be held liable in negligence by the truck owner and was not protected by the act.
The term 'carrier' is widely defined in the act. It includes persons that carry goods, perform incidental services or procure carriage or incidental services. 'Incidental services' are services performed to facilitate carriage (eg, stevedoring). Under the act, the carrier's liability is strict and is limited to NZ$1,500 a unit. Liability for loss or damage to goods is channelled to the contracting carrier (ie, the party that contracts for carriage with the shipper or consignee). The carrier that performs all or part of the carriage is liable to the contracting carrier for loss or damage in respect of goods that occurs while it is responsible for them.
The Supreme Court emphasized 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 court held unanimously that Ports of Auckland was undoubtedly a carrier of the truck at the time of the incident because it had procured Wallace either to carry the truck or to perform the incidental service of stevedoring in relation to the truck. It was Ports of Auckland's status as a carrier that mattered, not the purpose of the actions that resulted in the damage.
In the circumstances, and in accordance with the scheme of the act, the truck's owner should have claimed against the shipping line, which 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 Supreme Court decision has restored the position that had previously been assumed: carriers are protected by the act and carriers that subcontract aspects of carriage to others do not lose the protection of the act by doing so.
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