NEW ZEALAND MARITIME LAW

Cook Islands National Line Agency Ltd v Yellow Fin Holdings Ltd

IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY
AP.139-SW99

BETWEEN
COOK ISLANDS NATIONAL LINE AGENCY LIMITED
Appellant

AND
YELLOW FIN HOLDINGS LIMITED
Respondent

Hearing: 18 April 2000

Counsel: Winston Marsh for appellant
Tracy Stewart for respondent

Judgment: 26 June 2000

JUDGMENT OF POTTER J

Solicitors: Morrison Kent, DX CP 18001, Auckland
McElroys, DX CP 20526, Upper Shortland Street, Auckland

Introduction

[1] This is an appeal against a decision of the District Court in which the appellant (defendant in the District Court) was found liable in damages to the respondent (plaintiff in the District Court) for the value of a consignment of fish $51,832.25 (net of salvage), when the fish, shipped by the appellant, was found to be bad on arrival at its destination.

Background Facts

[2] The respondent operates a fish processing plant in the Chatham Islands. The appellant is a carrier which services the port at Waitangi in the Chatham Islands. Prior to 21 June 1996 the respondent made a booking with the appellant for carriage of 10 tonnes of their product from the port at Waitangi in the Chatham Islands to Napier. In the event only 9.5 tonnes were shipped, packaged in 956 cartons. There was some dispute as to what precisely was booked. The respondent alleged that the booking was simply for 10 tonnes of fish while the appellant claimed that "a container" was booked. The Judge found that the respondent had ordered "one container", as was recorded in the appellant's bookings book. He also accepted on the basis of the evidence that it was normal practice at this port for the carrier to provide containers for the goods being shipped from the port, as was done in this case.

[3] On 21 June 1996, the respondent delivered its product to be shipped, to the port at Waitangi. The respondent's employees were directed by the appellant's staff to the container into which the cartons were to be loaded. They loaded the 956 cartons of fish into the container. This cargo did not fill the container. The respondent's employees started the refrigeration plant of the container. They then advised the appellant of the nature and quantity of the cargo as packed into the container and a member of the appellant's staff issued a bill of lading for the shipment. The bill of lading records 956 cartons, their weight and contents. The only reference to a container on the bill of lading is a handwritten note recording the number of the container in which the cargo was loaded. The container was shipped aboard the Ngamaru III to Napier. When the cargo arrived 3 days later, on 24 June 1996, it was damaged and the fish had thawed. The cargo was condemned for human use and only a small recovery was possible by way of sale back to the respondent for bait. The respondent was not paid for the fish by Moana Pacific Fisheries Limited ("Moana") to whom the cargo was consigned. It claimed the value of the cargo (net of salvage), from the appellant. It was common ground that the refrigeration unit was damaged in the course of the voyage, and while there was dispute between two experts as to readings from a device known as a Partlow Chart which measured the temperature within the refrigerated container which held the fish, the Judge accepted that it was demonstrated that on 22 and 23 June there was a significant rise in the temperature within the container which suggested that the refrigeration unit had lost its gas charge.

Principles on Appeal

[4] The Court of Appeal has recently re-stated in emphatic terms the approach which should be adopted by an appellate Court to an appeal against findings of fact. In Rae v International Insurance Brokers (Nelson Marlborough) Ltd [1998] 3 NZLR 190, 197 Richardson P and Tipping J stated -

While not purporting to set out an exhaustive test, there are two conventional circumstances in which an appellate Court may differ from the trial Judge on a matter of fact. They are: (a) if the conclusion reached was not open on the evidence, i.e. where there was no evidence to support it; and (b) if the appellate Court is satisfied the trial Judge was plainly wrong in the conclusion reached.

It was concluded at 198 that -

... the ambit of an appeal on fact is very narrow. Any tendency or wish to engage in a general factual retrial must be firmly resisted. This Court will not reverse a factual finding unless compelling grounds are shown for doing so.

These views were elaborated upon by Thomas J in his separate judgment at 198-200. His Honour remarked that an appellate Court will only interfere with a trial Judge's findings of fact in exceptional circumstances and referred at some length to the advantages which the trial Judge has in determining questions of fact, particularly where credibility is in issue.

Points on Appeal

[5] The points on appeal filed by the appellant are -

[a] The determination of the District Court that according to general evidence of practice the consignment of 956 cartons contained fish which was frozen at the time it was accepted for carriage is erroneous.

[b] The District Court erred in finding that on the evidence the fish was "in good condition suitable for carriage in a properly working refrigerated container" when it was accepted for carriage.

[c] The District Court was in error when it determined that the point in time of acceptance of the goods for carriage by the appellant on behalf of its principal was at the time that the goods passed the threshold of the container.

[d] The District Court ought to have determined that title to the cargo had passed from the respondent and therefore it was unable to sue for damage for the cargo.

[e] The costs awarded to the respondent were excessive.

Point 1 - Was the finding that the consignment of fish was frozen at the time it was accepted for carriage, erroneous?

[6] The Judge posed this question in his judgment under the heading Issues of Fact, along with the questions -

Was it in good condition at the time of acceptance?

Was it fit for carriage?

[7] At p.2 of his judgment he states -

The defendant's response is that the container of fish was in good order and condition when accepted for carriage but denies that it is responsible for the damage.

The appellant contends that the District Court misdirected itself. The appellant's position was that the container was in good order and condition when the fish within it was accepted for carriage, but the appellant does not accept that was the situation in relation to the cargo of fish within the container. I accept the District Court judgment misstates the appellant's position in this respect. However, nothing turns on the matter. The Judge posed and answered the question, was the fish frozen at the time it was accepted for carriage, which is at the nub of the issue.

[8] It was accepted by both parties at trial that the onus lay on the respondent to prove, on the balance of probabilities, that the fish was fit for carriage when shipped. In the circumstances of this case that involved establishing that the fish was frozen.

[9] The Judge ruled inadmissible evidence of the product loadout check sheet bearing recorded probe temperatures of the cargo before shipment on the basis that it was documentary hearsay and not within the "business records" exception in s.3(1)(b) Evidence Amendment Act (No 2) 1980. No cross appeal was lodged against this ruling although counsel for the respondent did make submissions relating to admissibility under s.3(1)(c). However, that aspect was not pursued and I proceed on the basis, as did the District Court Judge, that it was not admissible evidence in the case.

[10] The District Court Judge made the following findings -

The evidence of the principal of the plaintiff company [the respondent] was that the goods were loaded out of the freezer in the normal way, and carried by unrefrigerated truck to the port. However because the goods could be expected to be frozen, being out of the refrigerator for some hours was neither here nor there in terms of the condition they would be in when they were loaded aboard ship. The evidence of the state of the goods on loading out of the plaintiff's own freezer came from two sources. The first was a description of the process which applies to this freezer. Its temperatures are monitored. The freezing equipment is kept in good condition. There are spot checks by Fisheries inspectors as to the operation both of the freezer and the way it is operated. The freezer concerned had a good reputation.

He then discussed the product loadout check sheet, which was ruled inadmissible, and concluded -

The Court is left to rely on the general evidence of practice and I accept that it is more probable than not that the goods were frozen when loaded out in the normal way. I also accept that being frozen they would not deteriorate over a few hours in June in the Chatham Islands latitudes by exposure to the elements. I accordingly have no difficulty in finding that the fish was in good condition, suitable for carriage in a properly working refrigerated container.

[11] The Judge's finding may be broken into two parts: the finding that the fish was frozen on leaving the respondent's plant, and the finding that it was frozen when accepted for carriage. In considering these findings, I bear in mind that the relevant standard of proof, as correctly stated by the Judge, is on the balance of probabilities.

[12] With respect to both issues, there was no direct evidence adduced regarding the condition of this cargo. Therefore evidence of the condition of the cargo must be inferred from the respondent's ordinary practice with respect to such consignments. That such circumstantial evidence is admissible as a general proposition is clear: Watts v Vickers (1916) 86 LJKB 177; South Seas Developments Ltd v Commercial Advances Nominees Ltd [1976] 1 NZLR 679 at 681. The rule is described in Halsbury's, 4th ed., vol. 17, para. 35 in these terms -

The doing of an act may sometimes be inferred from the existence of a general course of business according to which it would ordinarily be done, there being a probability that the general practice will be followed in the particular case.

[13] The effect of this rule is to make relevant, evidence of an established course of business, to the proof of a particular fact at issue. In Watts v Vickers, the issue was whether a letter had been received by the defendant. It was accepted that the letter had been duly posted. The Court of Appeal found that, once the letter had been posted, there arose a presumption that it had been received by the party to whom the letter was addressed. The onus then shifted to that party to adduce evidence to show that the letter had not in fact been delivered: per Warrington LJ at 182 and Scrutton LJ at 183. This decision was applied by the New Zealand Court of Appeal in the South Seas Developments case.

[14] In Lucas v Novosilieski (1795) 1 Esp. 296, the fact at issue was whether the applicant had been paid. The Judge allowed evidence that the employer regularly paid his workers at the same time each week, that the applicant had been seen standing with other workers in the line for payment, and that he had not been heard to complain afterwards. This evidence was held to raise a presumption that the applicant had been paid.

[15] R v Rice [1963] 1 QB 857 (CCA) recognised as admissible a used airline ticket for the purpose of proving that those persons named on it travelled on the relevant flight. This was on the basis that -

... the balance of probability recognised by common sense and common knowledge that an air ticket which has been used on a flight and which has a name upon it has more likely than not been used by a man of that name ...

The Court observed, however, that the probative value of such evidence, as opposed to its relevance, may be slight.

[16] In accordance with these authorities, I consider it was open to the Court, upon proof that goods of the kind at issue are normally treated in a certain way, to infer that the particular goods at issue were treated in that way, unless there was evidence to displace that inference.

[17] The appellant argued that the statement cited from Halsbury's at para [12], and the relevant authorities, particularly the letter cases, all deal with proof of an act having been done, rather than, for example, the condition of goods. I think that such a distinction is unintended and unnecessary. If a course of business demonstrates that goods are normally treated in a certain way, and that such treatment alters their condition, then it is open to the Court to infer that, after receiving such treatment, the goods were in that condition.

[18] Therefore the first question must be whether the respondent adduced sufficient evidence to establish a course of business with respect to the treatment of fish prior to it leaving their plant. Evidence was given by Mr Kevan Clarke, general manager of the respondent, and which it appears the Judge accepted, that the freezer used by the respondent was regularly monitored, both by the respondent's staff and by MAF inspectors. This was also true of the processes used in handling the fish. I refer to the extracts from the District Court judgment set out in para [10]. The appellant raised several points of inaccuracy in relation to the practices described by Mr Clarke, but I am satisfied that they do not displace the description of a course of business with respect to treatment of the fish. On the basis of the evidence before him, I believe it was reasonable for the Judge to infer that when the cargo left the respondent's plant, it was frozen.

[19] The next question concerns the evidence as to the manner in which the fish was transported from the respondent's plant to the wharf and loaded into the refrigerated container. As the learned Judge observed, a shipment would be loaded into an unrefrigerated truck, and transported across approximately 40km to the wharf, where it was loaded into the container. I note that both the container and the truck were insulated - the load space of the truck was described in evidence as a "chilly bin". There appears to have been some conflict at trial over the time it would have taken for the truck to travel from the plant to the wharf. times between half an hour and an hour were suggested. However, the Judge does not appear to have regarded this as of much significance. Once at the wharf, the fish would be taken from the truck and stowed in the container. I believe it is reasonable to infer that goods frozen when they left the plant would remain frozen throughout this journey. Mr Clarke was quite definite that this was the normal manner of moving goods from factory to wharf. There does not appear to have been any evidence to contradict him. Accordingly, I hold that it was open for the Judge to find that a course of business was established with respect to the movement of the fish from the plant to the wharf.

[20] Much was made by the appellant of the fact that several trips would have been necessary to move the entire consignment from the plant to the wharf. This is true, but I do not believe it would have made a significant difference. As already stated, once a truckload of fish arrived at the wharf, it would be loaded directly into the container. It was winter at the time, and I believe it is a reasonable inference that a consignment of fish would have remained frozen despite the additional time involved in several trips.

[21] Having found that a course of business was established whereby fish would be frozen when it left the respondent's factory, and remain frozen throughout the loading process, it was necessary for the Judge to determine whether there was any evidence to indicate that it should not be inferred that this was the case for this particular cargo.

Point 2 - Was the Finding that on the evidence the fish "was in good condition suitable for carriage in a properly working refrigerated container" when it was accepted for carriage, in error?

[22] It was submitted by the appellant that the fact that the fish was more or less completely defrosted by the time it arrived in Napier, suggested that it cannot have been frozen at the time it was shipped. This is, in my opinion, to ask the same question as, "was the damaged refrigeration unit the cause of the fish defrosting?" If it were accepted that this was not the case, then the only other conclusion to be reached is that the fish was not frozen when it was put into the container.

[23] The District Court Judge recognised correctly that the question of whether the defective refrigeration unit was the cause of the damage to the cargo was essentially a matter of balancing the evidence of two expert witnesses, Mr McGregor and Mr Semiona. He preferred the view of Mr McGregor to that of Mr Semiona, and it is not open for me to disagree with him. Such a judgement rests fully on the trial judge's relative impression of two witnesses, and his assessment of their evidence. It should not therefore be interfered with on appeal. No grounds have been suggested which would justify such an interference.

[24] Accordingly it was open to the trial Judge to find, as he did, that the malfunction of the refrigeration unit was the substantial cause of the defrosting. The Judge was also entitled to conclude, as he did, that the fact that the goods were thawed on arrival did not displace the inference that they were frozen when accepted for carriage. Accordingly, I uphold the District Court Judge's finding that the fish was frozen on acceptance by the appellant, and that the appellant is factually responsible for the damage to the cargo.

Point 3 - When were the goods accepted for carriage? What was the relevant "unit of goods"?

Carriage of Goods Act 1979

[25] There is no dispute that the contract of carriage in this case is governed by the Carriage of Goods Act 1979 ("the Act"). The contract makes no mention of the liability of the carrier, and therefore by s.8(4) of the Act is deemed to be a contract at "limited carrier's risk". This is defined in s.8(1)(b), which imports the limitation in s.15(1). This limits the liability of a carrier to a maximum of $1500 for each "unit of goods" lost or damaged, unless such damage or loss is intentionally caused by the carrier.

[26] The expression "unit of goods" is defined by section 3 of the Act -

3. Meaning of "Unit of Goods" -

(1) In this Act, unless the context otherwise requires, "unit of goods" or "unit",-

...

(b) In relation to goods contained in a container, means the container load of goods; and includes, where the container is provided by the contracting party, the container:

...

(e) In relation to goods contained in a package that is not contained in a larger package or in a container, nor loaded on a pallet, means the package of goods:

...

(2) For the purpose of determining the limit of the liability of any carrier, the limit of liability prescribed by section 15 of this Act in respect of each unit of goods relates to the unit of goods as accepted for carriage by the actual carrier or, where the carriage is undertaken by more than one carrier, by the first actual carrier, whether or not that unit is subsequently packed, repacked, or unpacked, or otherwise aggregated with or segregated from any other goods, at any stage of the carriage.

[27] There are two possibilities as to the relevant unit in this case: the 956 cartons or the single container. Section 3(2) makes it clear that the relevant unit for the purposes of limitation is the unit of goods as accepted for carriage by the first actual carrier. I note that in this case the appellant is both the actual carrier and the contracting carrier.

Accordingly, this inquiry may be broken down into two questions: first, at what point was the cargo accepted for the purposes of s.3(2), and second, what was the relevant unit of goods at that time?

Time of Acceptance

[28] The issue of acceptance was considered by the Court of Appeal in Wolters Cartage Ltd v WD & HO Wills (N. Z.) Ltd (unreported, Court of Appeal, C.A. 160/91, 17 February 1993, Casey J). That case involved the transport by road of a number of pallets and cartons of cigarettes. A number of cartons were placed loose on pallets for the purpose of moving them from the shipper's warehouse to the carrier's truck which was waiting outside. They were loaded onto the truck as individual cartons, and indeed, the truck was incapable of carrying them in palletised form. The Court considered the requirements of s.3(2) and concluded that acceptance in that context involved the carrier "taking control for the purposes of carriage". Goods are accepted when they enter the carrier's control or become his or her responsibility.

[29] An attempt to define precisely the point at which the cargo of fish was accepted for carriage is made difficult on the facts of this case. There is a period of time, commencing at the time the appellant's employee directed the respondent's employees to the relevant container, and ending when the respondent's employees advised the appellant that the container was ready for shipping and the nature of the goods within it, where both parties could be regarded as exercising a measure of control over the goods.

[30] The loading of the container effectively took place in the appellant's premises. The container was the appellant's. The loading, however, was performed by the respondent's employees. On the other hand, the respondent's employees were to an extent acting in accordance with the direction of the appellant, as it was the appellant which nominated the particular container into which they would pack the goods. The process took some time. Presumably the respondent could have removed or added cartons at will up until the issuing of the bill of lading.

[31] I regard these factors as demonstrating that there was a period where both the appellant and respondent concurrently exercised a degree of control over the loading of the cargo. This does not, however, help to identify the point at which the goods were "accepted for carriage".

[32] The Judge found that the goods were accepted for carriage at the moment they crossed the threshold of the container, and that thereafter there was a "repackaging". The appellant submitted that this was incorrect, as it has the effect of rendering the appellant responsible for goods without knowing their nature, type or number. I believe this submission is well founded. It is very difficult to characterise the loading of the container in this case as a delivery of the goods into the control and care of the appellant. I am drawn to this conclusion by the fact that, prior to the respondent's employees advising the appellant of the contents of the container, and the issuing of the bill of lading, cargo could have been removed without the appellant's knowledge. Moreover, while the container was provided by the appellant, the appellant did not appear to supervise the loading. The appellant was simply advised of the contents of the container when loading was completed. At that point the bill of lading was issued.

[33] I also consider it significant that the conventional situation with regard to acceptance of goods and the commencement of the responsibility of the carrier, is that such responsibility commences with the issuing of a receipt in the form of a mate's receipt or a bill of lading: see Davies, Shipping Law (2nd ed. 1995) at 252; Hill, Maritime Law (4th ed. 1995) at 199; Tetley, Marine Cargo Claims (3rd ed. 1988) at 219; Halsbury's Laws of England (4th ed.) Vol. 43(2) 1532, 1535-6. No mate's receipt was issued in this case, so the bill of lading itself operates as a receipt.

[34] I therefore find that the goods were delivered into the exclusive control of the appellant for carriage, at the point where the appellant was advised of the contents of the container and the bill of lading was issued.

The Unit of Goods

[35] This finding, however, is not enough to dispose of the issue. Section 3(2) requires examination of the unit of goods as accepted for carriage. Counsel for the respondent submitted that this test is not solely a physical one, but one which incorporates the understanding of the parties as to the nature of the goods to be carried. In support of this, counsel relied on the judgement in Wolters and a statement by Mr Paul Myburgh in his paper Practical Aspects of the Law Relating to Carriage of Goods, ADLS Seminar, May 1995, which comments on that decision.

[36] In opposition, counsel for the appellant submitted that the test imposed by s.3(2) is a purely physical one, and that the situation was comparable to that in Columbia Exports Ltd v Sofrana Unilines (NZ) Ltd [1996] DCR 137.

[37] I agree with the respondent's submission. Indeed, I believe it is an inevitable consequence of a close reading of s.3(2). The wording used is "the unit of goods as accepted for carriage". It is not "at the time at which the cargo was accepted for carriage". The latter is consistent with a solely physical test, but the former leaves room to recognise the understanding of the parties as to the nature of the goods to be shipped.

[38] The judgement in Wolters also suggests that a more subjective analysis may be helpful. The Court observed at page 6 of the judgment that, if the understanding of the parties were set aside, it would have been easy to conclude that the carrier received palletized cargo which was subsequently broken down for transport. However, it was the clear understanding of the parties that the cargo would and could be carried only as individual cartons. Accordingly, the Court found that the relevant unit of goods was the cartons of cigarettes, not the pallets.

[39] I also consider that the current case, with its inherent ambiguities regarding the unit of goods, demonstrates the ineffectiveness of a test based solely on the physical state of the goods. Containerisation of cargo is now unquestionably the dominant form in which goods are shipped, and situations such as this one can only become more common.

[40] Moreover, the situation in Columbia Exports contains a number of significant differences when set alongside the present case. In Columbia Exports, the supplier, CNZ, packed their cargo at their own premises into a container provided by the carrier. They then locked and sealed it. The cargo was then uplifted by a trucking contractor who was the first actual carrier. What he received was a sealed container. Sofrana had no effective opportunity to check the contents of the container. Moreover, the bill of lading stated clearly that the shipment was of 1 container, "STC" (meaning "said to contain") the goods specified by CNZ. In the case before me, the container was loaded at the carrier's premises, and to an extent under the direction of the carrier's employees. The container was neither locked or sealed, giving the appellant an opportunity to check its contents should it have wished to. The bill of lading makes no mention of a container as the shipping unit, but refers solely to the cartons of fish. For these reasons I distinguish the result in Columbia Exports.

[41] The relevant question, therefore, concerns the understanding of the parties as to the form in which the goods were to be shipped, as well as their physical state. It is obvious that both parties knew that it was inevitable that the goods would be shipped inside a container. Not only is containerisation of goods at some stage of a carriage by sea now practically an inevitability, but these particular goods required refrigeration during transit. A refrigerated container was necessary. The containerisation of the cargo was of benefit to both parties: the goods were in a readily transportable form, and one which, all things being equal, would have preserved the cargo in good condition.

[42] I also note that it was standard practice for the appellant to provide containers for shipments booked on its vessels. There does not appear to have been any other source of refrigerated containers on the island. I therefore attach little weight to the fact that the container was the appellant's. I also believe that this fact had an impact on the finding at trial that the respondent made a booking for "one container". The appellant submitted that this finding demonstrated the parties' understanding that the cargo to be shipped was in the form of a single full container load. To my mind, it is equally consistent with a simple request for a container to be made available into which to load the cargo. This is supported by the fact that the appellant made a practice of not loading refrigerated cargo itself. The only option, therefore, was for the respondent's employees to load the fish into the container provided. In these circumstances, I do not consider the appellant can rely on the fact that the respondent's employees loaded the container and activated the refrigeration system.

[43] I also note that the respondent did not padlock or seal the container. It was therefore open to the appellant to check the contents of the container, although the evidence suggested that they do not make a practice of doing so. Moreover, there was also evidence that the appellant would, on occasion, open containers and load further cargo from another shipper should they become short of space. In my opinion, this points to the cargo being accepted as cartons. The paradigm situation where cargo is accepted as a single container must be where the carrier receives into their control from the shipper, a locked and sealed container. Part of the reason the carrier's liability is limited in such a case is that the carrier has no opportunity to check on the nature or quantity of the contents of the container. That was not the case here. The appellant had access to the cargo. It was open to them to check the cargo or to load further cargo should it become necessary. This factor significantly reduces the weight that can be given to the container being loaded by the respondent, and points to the cartons as the relevant unit.

Bill of Lading

[44] I accept the appellant's contention that a bill of lading is not, in these circumstances, conclusive evidence of the quantity, weight and volume of the cargo shipped. As stated in the River Gurara, [1998] 1 Lloyds' L. Rep 225 at 233, it is not open to the parties to a contract of carriage to agree on the identity of the goods. This includes agreement as to the unit of goods. I note that the rationale behind this finding is to prevent carriers escaping the minimum level of liability imposed, in that case, by the unamended Hague Rules.

[45] Statements in the bill of lading must, however, carry some evidential weight in the inquiry into the understanding of the parties. In this case, the description of the cargo entered in the Appellant's bill of lading was -

Number and Kind of Packages	Description of Goods	Gross Weight
902	10 kg BLUE COD FILLETS G/G	9.020
54	10 KG LING FILLETS	0.540

[46] There is no mention made of a container. This indicates to me that the understanding of the parties at the time of acceptance was that the respondent was shipping 956 cartons of frozen fish. They were not shipping a full container load. Had the respondent in fact been shipping a full container load, it would not have been necessary to advise the appellant of the number of cartons of fish within it. The only matters the appellant would have needed to know would have been the weight and nature of the contents.

[47] The appellant submitted that the reason why the goods were stated on the bill of lading as cartons of fish and not as a container load, was to comply with requirements for the calculation of Chatham Island dues. I do not accept this contention. Evidence was given that the dues were charged on weight, not on number of items. All that was necessary for this purpose, was that the bill of lading should state the nature of the cargo, in this case fish, and the weight of it. There was no need for the appellant to state the number of cartons. It was also open to the appellant to issue a bill of lading which referred both to the fact that the goods were carried as a container load, and that the container held a certain number or cartons of a certain cargo. The use of bills of lading carrying expressions such as "said to contain" is widespread in the sea freight industry. This would more than adequately have satisfied the requirements of the Chatham Islands Council, and have demonstrated the unit in which the goods were carried. I note that it would also have brought this case closer to the facts of Columbia Exports.

Conclusion as to Unit of Goods

[48] I conclude that while the cargo was accepted when the appellant was notified of the contents of the container and issued a bill of lading, the evidence regarding the manner in which the cargo was loaded into the container, and the parties' understanding, leads to the conclusion that the relevant unit of goods was the cartons, not the container. The cargo arrived at the appellant's depot in the form of cartons. It was loaded into the container by the respondent's employees, but in part at the direction or with the approval of the appellant. The container was not locked, and the appellant had the opportunity to inspect the cargo or add further consignments to it if it wished to. The bill of lading, once issued, recorded the cargo as cartons, not as a full container load, a fact which is not adequately explained by the requirements of the Chatham Islands Council. The appellant placed considerable reliance on the bill of lading as evidence of the point of acceptance. In those circumstances, it seems unreasonable to then attempt to minimise the significance of statements in that bill of lading regarding the nature and quantity of the cargo. All these factors indicate that the parties' understanding was that this was a consignment of cartons contained in a container for the purposes of ease of transport and the refrigeration of the goods. The unit of goods was the cartons. The appellant's liability is therefore limited to the sum of $1500 multiplied by the number of containers, or the loss claimed, which in this case is a lesser amount.

[49] Although my finding that the time of acceptance was at issue of the bill of lading differs from that of the District Court, my conclusion that the unit of goods was the cartons, is the same, although reached by a different route. Nothing turns on the different finding as to time of acceptance. On my findings, the cargo of fish became the responsibility of the appellant at a slightly later point, but there is no evidence of intervening events which would alter any findings which rely on the time of acceptance.

Point 4 - Is the respondent entitled to recover damages?

[50] The District Court Judge at page 11 of his judgment under the heading Is the plaintiff entitled to sue?, correctly identified that this question raised the issue of title to the goods.

[51] The respondent submitted -

Yellow Fin, contrary to what the appellant asserts in its submissions, never sold the fish to Moana. Moana ordered the fish - the fish was not supplied to Moana and Moana never paid Yellow Fin for the fish.

In oral submissions counsel asserted that payment was not due by Moana until the fish was delivered, but noted there was little cross-examination in the District Court relating to the issue of ownership of the fish, but rather the emphasis was on establishing that an order was placed by Moana. Counsel for the respondent went on to assert that it was irrelevant who owned the fish because the respondent was a "contracting party" under s.3 of the Carriage of Goods Act (but clearly the reference intended is to s.2 which is the definition section of the Act), and that under s.9 a contracting carrier, in this case the appellant, is liable to the contracting party for loss whilst the carrier is responsible for the goods. Counsel submitted that even if the respondent did not own the fish at the time of the loss it was given "further entitlement" to sue under s.9 of the Act.

[52] The appellant submitted that the issue was not whether the respondent can sue for breach of contract of carriage, but whether it can sue for damage to goods. If the title to, or property in, the goods had passed to Moana, then the respondent suffered no loss.

[53] Section 2 of the Act defines "contracting party", in relation to a contract of carriage as -

... the consignor or (as the case may require) the consignee of the goods who enters or has entered into the contract with the contracting carrier.

Section 9 provides -

... a contracting carrier is liable as such to the contracting party for the loss of or damage to any goods occurring while he is responsible for the goods ...

Section 20 provides -

... an action against a contracting carrier in respect of the loss of or damage to any goods occurring while he is responsible for the goods in accordance with s.9 of this Act may, if the property in the goods has passed to the consignee and he is not the contracting party, be brought by the consignee.

[54] Under s.20(2) where the consignee brings an action pursuant to s.20(l) he is deemed to be the contracting party and is entitled to sue and recover under the contract accordingly. The contracting carrier is entitled to raise the same defences and make the same counterclaims as if the action had been brought against him by the contracting party. These provisions simply enable a consignee to whom property has passed in the goods being carried, to sue the carrier for loss, notwithstanding that the consignee is not a party to the contract for the carriage of the goods. Neither s.9 nor any provision of the Act confers on the consignor any "entitlement" to sue for loss. The consignor's right to recover in damages against the carrier will only arise in cases where the consignor can establish loss. Whether property in the cargo remained with the respondent or had passed to Moana, is therefore crucial to the right of the respondent to recover in damages against the appellant.

[55] The Judge traversed the appellant's argument that because there was no written document of sale terms between the respondent and Moana, the provisions of the Sale of Goods Act 1908 would apply. Under s.19 of that Act property passes when it is intended to pass. In the absence of proof of a contrary intention the rules provided in s.20 determine when property passes. Rule 5 of s.20 applied because the supply was made pursuant to a pre-order by Moana, and pursuant to r.5(2) property passed to Moana when the goods were delivered to the appellant as carrier.

[56] He then reverted to s.20 of the Carriage of Goods Act and referred to the appellant's argument that the carrier should not be placed in double jeopardy at the suit of the consignor and consignee. He determined that he did not need to decide that question because there was no suggestion in this case that the carrier was at risk of a suit at the hands of both parties.

[57] My perusal of the notes of evidence suggests that the issue of the passing of property in the goods, was inadequately addressed in evidence. The relevant evidence was that of Mr Kevan Clarke and Mrs Valerie Gleeson, a loss adjuster, who stated that she received instructions to assess the respondent's loss on 22 July 1996. In answer to cross-examination she stated that she received a fax from Mr Clarke that confirmed (after the event), Moana's purchase order in respect of the blue cod and the ling fish in issue in these proceedings, and that she had confirmed that Moana had committed to the order prior to shipment. Mr Clarke's brief of evidence states that Moana -

pre-ordered the fish cargo to be paid for upon delivery.

He was not cross-examined on that evidence. Moana did not give evidence. On the evidence adduced at the hearing as recorded in the notes of evidence, I am not able to ascertain the intention of the parties as to when property in the cargo passed from the respondent to Moana. I am not able to ascertain whether there was a contrary intention, which would negate application of the rules in s.20. The District Court Judge who heard the evidence and had the benefit of observing the parties who gave evidence, made no determination on this crucial point. He addressed the argument about double jeopardy, and reached I believe, the correct conclusion, that the issue of double jeopardy did not arise in this situation. In my view it is a "red herring".

[58] But he also concluded that pursuant to s.20 of the Carriage of Goods Act, the respondent as consignor was -

... not excluded from this suit by the terms of s.20 of the (Carriage of Goods) Act.

[59] With respect, that was not the issue. The issue was that first identified by the Judge in the passage of the judgment headed Is the plaintiff entitled to sue?, namely the issue of title to the goods. For if property had passed to Moana, the respondent suffered no loss that would be recoverable from the plaintiff. The risk would have been with Moana. That issue the District Court Judge did not determine, and I am unable to do so.

[60] I therefore remit these proceedings to the District Court for rehearing on the issue of whether the respondent retained title to the cargo such that the respondent suffered loss in the course of carriage by the appellant.

[61] However, I would add this. On the points upheld on appeal, the appellant will be liable in damages to the party who suffered loss. There would be considerable merit in the relevant parties now negotiating to achieve settlement of the matter.

Costs

[62] The issue of costs must await determination on rehearing in accordance with the previous section of this judgment. However, it may help if I indicate that I would not have been persuaded that I should intervene in the exercise by the Judge of his discretion in awarding costs. The Judge issued a minute of 12 November 1999 which was devoted to the issue of costs. In that minute he recorded the claim to costs by the respondent, the arguments by both parties, and the relevant authorities. After careful consideration he fixed costs at $18,000 together with disbursements of $6,150.58. He observed -

Undoubtedly the case was hard fought and that contributed to the difficulties

and that -

the case would have been more simply run had some of the ordinary issues been agreed between the parties as to the applicable facts.

[63] The Judge had the benefit of presiding over the three days of the trial and to full submissions in relation to costs. He clearly took account of the relevant principles. I would therefore decline to intervene in the exercise of his discretion in awarding costs.

[64] Result

[a] As to points [a], [b] and [c] of the points of appeal, the appeal is dismissed.

[b] As to point [d] of the points of appeal, the appeal is allowed and the issue is remitted for rehearing in the District Court.

[c] As to point [e] of the points of appeal, namely costs, the matter is remitted for determination by the District Court following rehearing pursuant to paragraph [b] above.

[d] The appellant has succeeded, though marginally, on appeal, and is entitled to costs which I award in accordance with Category 2, Band B of the High Court Rules, plus disbursements as fixed by the Registrar.