NEW ZEALAND MARITIME LAW

Ports of Auckland Ltd v Southpac Trucks Ltd (No 2)

IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY
CIV 2005-404-5868
UNDER Section 72 of the District Courts Act 1947

BETWEEN PORTS OF AUCKLAND LIMITED
Appellant

AND SOUTHPAC TRUCKS LIMITED
Respondent

Hearing: 7 February 2007
Appearances: C R Carruthers QC and G Mercer for appellant
F McLaren for respondent
Judgment: 23 February 2007

JUDGMENT NO.2 OF ALLAN J

In accordance with r 540(4) I direct that the Registrar endorse this judgment with the delivery time of 4 pm on Friday 23 February 2007

Solicitors/Counsel:
C R Carruthers QC
Gellert Ivanson, Epsom
Fortune Manning PO Box 4139, Auckland

[1] This is an application by Southpac, made in reliance on s 67 of the Judicature Act 1908, for leave to appeal to the Court of Appeal against a judgment of 17 October 2006, in which I upheld an appeal from a decision of the District Court given on 16 September 2005.

[2] The principles governing applications for leave to bring a second appeal are not in dispute. The intended appeal must raise some question of law or fact, capable of bone fide and serious argument, involving some interest, public or private, of sufficient importance to outweigh the cost and delay of a further appeal: Waller v Hider [1998] 1 NZLR 412; Snee v Snee [2000] NZFLR 120; (1999) 13 PRNZ 609 (CA).

[3] As is observed in Waller v Hider, the Court of Appeal is not engaged on a second appeal in the general correction of error. Its primary function is to clarify the law and to determine whether it has been properly construed and applied by the Court below. Not every alleged error of law is of such importance, either generally or to the parties, as to justify pursuit of litigation which has already been twice considered and ruled upon by a Court.

[4] That said, the grant of leave to bring a second appeal might perhaps be more readily granted where, as here, the judgments of the District Court and of this Court diverge: Riddell v Porteous (1996) 10 PRNZ 64 at 65. The grant or refusal of leave should be determined by reference to the question of whether the threshold test is met, not on any view I might take as to the likely outcome of a further appeal. A further factor of relevance will be that of cost. The Court may take into account the costs likely to be added by a second appeal to the financial burden already shouldered by the litigants.

[5] The factual background is set out in the Court’s earlier judgment. Southpac imported a number of large trucks into New Zealand. They arrived here on a roll-on roll-off vessel. While one such truck was being driven across the wharf at the Port of Auckland by a subcontractor of Ports of Auckland, it collided with another vehicle driven by an employee of Ports of Auckland. It is common ground that the driver of the latter vehicle was at fault. Repair costs in respect of Southpac’s truck totalled about $64,000.

[6] I held that Ports of Auckland was relevantly a “carrier” for the purposes of the Carriage of Goods Act 1979, and that it was accordingly entitled to the benefit of the liability limitations conferred by that Act on carriers who fall within its scope. I also rejected a second argument advanced on behalf of Southpac, to the effect that Ports of Auckland nevertheless remained vicariously liable for the admitted negligence of its employee.

[7] Southpac’s notice of application for leave to appeal set out eight separate questions to be raised on appeal:

1. Was the Court correct to overturn the District Court’s judgment and conclude that s 6 of the Carriage of Goods Act 1979 (the Act) prevented the applicant (Southpac) from holding the respondent (POAL) liable for the damage to Southpac’s goods (the truck) negligently caused by POAL’s employee (the fork hoist driver) when:

a. The forkhoist driver was acting in the course of his employment; and

b. The forkhoist driver was not engaged in any role related to carrying or facilitating the carriage of the truck pursuant to any contract of carriage?

2. What is the proper approach to determining when a ‘carrier’ is ‘liable as such’ for the loss of or damage to goods ‘carried by him’ so entitling that party to immunity from civil liability pursuant to s 6 of the Act?

3. Does s 6 of the Act expressly or impliedly provide that one party may be simultaneously ‘liable’ for the loss of or damage to goods:

a. When acting as a ‘carrier’ pursuant to its contract of carriage for the goods; and

b. When acting in a wholly collateral role unrelated to any contract of carried for the goods?

4. What is the proper approach to determining when an ‘employee of a carrier’ is ‘liable as such’ for the loss of or damage to goods ‘being carried by the carrier’ so entitling that employee to immunity from civil liability pursuant to s 16(2) of the Act?

5. Even if the fork hoist driver would have been immune to any action brought by Southpac pursuant to s 16(2) of the Act, was POAL thereby entitled to vicarious immunity from liability in the circumstances of this case?

6. Was the Court correct to conclude that the purpose, or a primary purpose, of the Act was to avoid ‘detailed factual inquiries’?

a. Into the circumstances of damage; and

b. To determine whether a carrier was acting ‘as such’ (and so barred Southpac’s claim against POAL pursuant to s 6 of the Act)?

7. Was the Court correct to conclude that it had sufficient evidence to grant POAL’s application for summary judgment when:

a. POAL never produced any contract of carriage between:

i. POAL and the contracting carrier (CP Ships)

ii. POAL and Southern

iii. Southern and Wallace?

b. POAL had not provided discovery and so Southpac had no opportunity to determine:

i. Whether the fork hoist driver was engaged on a task pursuant to any contract of carriage on behalf of POAL?

ii. Whether or not the fork hoist driver had damaged Southpac’s truck negligently or intentionally?

8. Was the Court correct to award costs according to the scale without any opportunity for submissions, particularly in light of its decision that it need not determine whether or not POAL was an ‘actual carrier’?

[8] The first three of these questions touch upon the issue of whether s 6 of the Act prevents Southpac from recovering damages from Ports of Auckland, when the fork hoist driver employed by Ports of Auckland was not engaged in any role relating to the carriage of the truck. Ms McLaren explained during the course of the hearing of the application for leave, that the focus would be upon the role actually being performed by Ports of Auckland at the time of the accident.

[9] Questions 4 and 5 are directed at the proper approach in determining when an employee of a carrier is “liable as such” and whether in all the circumstances, Ports of Auckland was entitled to immunity from vicarious liability. As Ms McLaren submitted, these two groups of questions are linked, in that both engage the Court in determining the scope of the limited liability for which the Act provides.

[10] Mr Carruthers submitted that none of the issues identified by Southpac is appropriate for a further appeal, because the case is heavily fact specific. Ports of Auckland was the owner of the shipping terminal at which the goods were damaged. It operated that terminal. There was a contract between Ports of Auckland and the ocean carrier, pursuant to which Ports of Auckland had the responsibility to discharge the ship’s cargo. It had subcontracted its responsibilities as stevedore to a subcontractor.

[11] The other driver, responsible for the accident, happened to be an employee of Ports of Auckland. The cargo in question happened to be break-bulk cargo of significant value – a relatively rare circumstance Mr Carruthers argued, having regard to the fact that most cargo is containerised, and the cause of damage normally unknown.

[12] I think that Mr Carruthers must be right. It was common ground in this case that Ports of Auckland was a “carrier” for the purposes of the Act, because Ports of Auckland was contracted to provide at least an “incidental service” as defined in s 2 of the Act.

[13] Ms McLaren nevertheless proposes to argue that this Court gave inadequate attention to the question of whether Ports of Auckland was actually performing any incidental service at the time of the accident. She says it was not, and that Ports of Auckland is therefore unable to claim the benefits which the Act confers.

[14] Such an argument is demonstrably fact specific. Of necessity it must involve a close examination of the somewhat unusual combination of factors which arose in this case, and the application of the law to those facts.

[15] Ms McLaren’s argument in respect of the application of s 6 (questions 1-3) is not completely untenable. On the other hand, her argument based upon s 16 (questions 4-5), if correct, would appear seriously to undermine the purpose of s 6 and therefore the regime for which the Act was designed; the point is not, in my view, capable of serious argument.

[16] In order to justify the grant of leave, the issue or issues to be argued on appeal must involve some interest of sufficient importance to outweigh the cost and inconvenience arising from that further appeal. In my view, the case is likely to be of some interest beyond the parties themselves; that is perhaps reflected by the fact that the earlier judgment is listed for reporting in the New Zealand Law Reports. But given the factors identified by Mr Carruthers, the case is likely to be of rather more limited application in the industry than might at first appear. Overall I am not convinced that the proposed questions 1-5 are capable of serious argument to the extent that further appellate attention is warranted.

[17] Against that background, it remains to consider the question of cost, and the principle that finality in litigation is desirable. The amount in issue here is of the order of $64,000, not a negligible sum, but not of itself sufficient to elevate the proposed appeal to a level of significant importance for the parties, each of which is an established commercial organisation. A further appeal will involve additional costs in a case where the amount of Southpac’s claim is relatively modest.

[18] Despite the fact that the judgments of the High Court and of the District Court diverge, I have not been persuaded that there is any matter of sufficient importance in this case which justifies the grant of leave in respect of questions 1-5 in the notice of application for leave to appeal.

[19] The remaining questions raise no appealable issues. Question 6 seeks to challenge my observation that the purpose of the Act was to avoid “detailed factual inquiries”. That was no more than a general comment about legislative policy made in the course of considering other issues, and does not of itself raise an arguable appeal point.

[20] Question 7 relates to the alleged insufficiency of evidence to justify the grant of defendant’s summary judgment. That question can be of relevance only to the parties. No basis has been demonstrated for the grant of leave on this question.

[21] Finally, Southpac complains that on appeal the Court awarded costs according to scale, without any opportunity for submissions. That point is not capable of serious argument at the appellate level. Costs are within the discretion of this Court.

[22] In the result, I refuse leave to appeal. Southpac retains the right to seek leave from the Court of Appeal. Mr Carruthers sought costs in the event that leave was refused. I did not hear from Ms McLaren on the topic. Costs are reserved. Counsel for Ports of Auckland is to file and serve a memorandum as to costs within 14 days. Any memorandum in opposition is to be filed and served by counsel for Southpac within a further seven days.