Ports of Auckland Ltd v Southpac Trucks Ltd

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

BETWEEN PORTS OF AUCKLAND LTD
Appellant

AND SOUTHPAC TRUCKS LTD
Respondent

Hearing: 23 February 2006
Appearances: C R Carruthers QC and G Mercer for appellant
F McLaren for respondent
Judgment: 17 October 2006

JUDGMENT OF ALLAN J

In accordance with r 540(4) I direct that the Registrar endorse this judgment with the delivery time of 4.30 pm on Tuesday 17 October 2006

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

[1] This appeal raises an important practical issue under the Carriage of Goods Act 1979 (the Act): when is a carrier acting “as such” for the purposes of s 6 of the Act? That section provides:

6 Other remedies affected

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.

[2] Surprisingly, there appears to have been no decision of this Court on the point, which lies at the heart of the statutory regime regulating the rights and liabilities of parties to contracts for the domestic carriage of goods.

Factual background

[3] The facts are not materially in dispute. On a date unknown, but prior to July 2003, the respondent (Southpac) ordered six Kenworth trucks from Kenworth Trucks in Victoria. They were to be delivered by sea from Melbourne to Auckland. A nonnegotiable sea way bill was generated on 10 July 2003 between Kenworth Trucks and Southpac in respect of that carriage. International sea carriage was undertaken by Australia New Zealand Direct Line (ANZDL), a division of CP Ships (UK) Ltd (CP Ships). The trucks were duly loaded onto the Rotoiti, a roll on-roll off vessel, at Melbourne on about 10 July 2003. That ship arrived in Auckland on 15 July 2003.

[4] CP Ships is party to a terminal contract with Axis Intermodal, which is a trading division of the appellant (POAL). Although the party contracting with CP Ships is expressed to be Axis Intermodal, the latter is merely a trading name for a division of POAL. In reality the terminal contract is made between CP Ships and POAL. The executed agreement itself is not in evidence, although Mr Ross Clarke of POAL swore an affidavit to which he annexed a draft agreement and side letter, which he said governed the relationship between CP Ships and POAL at all material times. Although Ms McLaren, counsel for Southpac, drew the Court’s attention to the fact that the original of the agreement between CP Ships and POAL was not in evidence, for the purposes of argument counsel proceeded upon the basis that the document produced accurately set out the terms of the contract between those parties.

[5] Clauses 1.4 and 1.6 of the terminal contract provided:

1.4 The Operator shall provide services for the loading and/or discharging of ships, for the handling of containers, for the transport of containers between the wharf and the marshalling area and all other services referred to in the contract.

1.6 The Operator may subcontract any of its obligations under these conditions but shall nevertheless be entitled to enforce these conditions and be liable for their performance as if it had not subcontracted such obligations.

[6] In terms of its contract with CP Ships, POAL assumed responsibility for unloading the Kenworth trucks from the Rotoiti, by driving them off the ship and across the wharf owned and maintained by POAL, to a marshalling and storage area, there to await collection by Southpac’s carrier, Carr and Haslam Transport Limited. That carrier was to collect the trucks from the Bledisloe Wharf storage area, and to transport them to Southpac’s own premises in Manukau City.

[7] Clause 1.6 of the contract, set out above, permitted POAL to subcontract any of its obligations, but without prejudice to its rights and obligations thereunder. In fact POAL did subcontract its obligations under the contract to Southern Cross Stevedores Ltd (Southern Cross), which in turn subcontracted to Wallace Investments Ltd (Wallace).

[8] The contract between CP Ships and POAL imposed on the latter, liability for loss or damage to cargo in the following terms:

4.1 (c) Cargo

The Operator shall be liable for loss or damage to cargo caused by the negligence or fault of the Operator, its employees, agents or subcontractors.

[9] However, the extent of POAL’s liability was limited as prescribed by clause 4.2(c)(iv):

Notwithstanding anything else to the contrary in these terms and conditions, where the Carriage of Goods Act 1979 applies, the defences and limits of liability provided for in that Act shall apply to any claim against the Operator.

[10] The contractual arrangements between POAL and Southern Cross and between Southern Cross and Wallace are not in evidence, but nothing turns upon the precise arrangements between those parties.

[11] As one of the Kenworth trucks was being driven by a Wallace employee across Bledisloe wharf, following discharge from the Rotoiti, an accident occurred. A fork hoist driven by an employee of POAL, carrying an oversized load of timber, collided with the truck which suffered substantial damage. Repair costs totalled $60,201.64.

The District Court proceeding

[12] Southpac sought to recover its repair costs from POAL. It issued proceedings in the District Court at Auckland, claiming those costs and alleging that the fork hoist driver employed by POAL had been negligent in a number of respects, more particularly set out in the statement of claim. POAL filed a defence admitting negligence, in that its employee:

a) failed to keep a proper look out at all times when operating the fork hoist;

b) failed to exercise sufficient care to avoid a collision between the cargo on the fork hoist and the truck;

c) allowed the cargo carried on the fork hoist to come into contact with the truck.

[13] POAL further admitted damage to the truck, but pleaded that it had no knowledge of the requirement for repairs or their cost, and denied Southpac’s allegations in that respect. POAL then pleaded an affirmative defence, namely the provisions of the Act. It claimed that:

a) at all material times it was carrying out an incidental service as defined by the Act, namely that of the provision of services as a stevedore and warehouseman;

b) such services were provided pursuant to its contract with CP Ships;

c) CP Ships was a “contracting carrier” pursuant to the Act;

d) POAL was an “actual carrier” until delivery of the truck to Southpac at Auckland;

e) the truck comprised one unit of goods pursuant to s 3 of the Act; and

f) POAL’s liability, if any, for damage to the truck was to CP Ships only, as contracting carrier, pursuant to ss 6, 10 and 15 of the Act (and not to Southpac), and in any event its liability was limited to the sum of $1,500.

[14] On those pleadings each party took steps to resolve the question of liability by interlocutory application. Southpac filed a notice of interlocutory application for judgment on liability on the basis of the facts admitted by POAL. For its part, POAL applied for defendant’s summary judgment against Southpac. These crossapplications came before Judge Joyce QC on 5 July 2005. It is common ground that, with respect to the application for leave to enter judgment, the Court was asked to confine itself to a decision on liability only, because matters relating to quantum had not been agreed, and were not the subject of proof by Southpac.

The District Court judgment

[15] Judge Joyce held in favour of, and entered judgment for, Southpac. He traced briefly the origins of the Act, considered a number of definitions which appear in s 2, extensively reviewed the arguments addressed to him, and then engaged in a detailed discussion of those arguments. He held that POAL was undoubtedly a “carrier” for the purposes of s 6, but that it was not a carrier “as such” for the purposes of Southpac’s claim, because “ … the relevant capacity in which the putative carrier is acting is all important”. He observed there was nothing exceptionable about the manner in which the Kenworth truck was driven by POAL’s subcontractor. Rather, the focus was on the admitted negligence of the driver of POAL’s fork hoist. Southpac’s claim against POAL was brought in reliance on the negligence of a driver who was not performing any service at all in relation to the carriage of Southpac’s truck.

[16] As the Judge saw it:

... whatever its relationship with or to Southpac as regards the moving of the truck from the ship to the parking area, the damage arose from the quite unrelated and unintended intervention of the fork hoist. And in respect of that activity it cannot be said that, vis-à-vis the Kenworth, Ports of Auckland was a carrier as such.

[17] The Judge accordingly entered judgment on admissions for $60,201.64, together with interest at the statutory rate of 7.5% per annum, from the date of the proceeding down to the date of judgment. He dismissed POAL’s application for summary judgment.

[18] The question on appeal is whether the Judge was right to hold that POAL was not relevantly acting as a carrier as such because the admitted negligence was that of an employee of POAL who at the time was not engaged in an activity related to the carriage of the truck.

The scheme of the Act

[19] Since the Act reached the statute books in 1979, there have been relatively few cases in this Court dealing with its construction and application. That might suggest that, for the most part, the Act has in practice worked tolerably well.

[20] As did the learned District Court Judge, I adopt with gratitude the helpful summary of the background to this legislation included in the judgment of Hammond J in Transtext Network New Zealand Ltd (in liquidation) v Greaney [2001] 3 NZLR 378. There the Judge said:

[29] Turning to the scheme of the Act, some short general observations are necessary to understand the evolution of our law. New Zealand inherited the common law of the carriage of goods. This included the tortuous path of identifying “common carriers” and “private carriers” and the application of the law of bailment. By the late eighteenth century – and I am thinking here of Forward v Pittard (1785) 1 TR 27 – Lord Mansfield had concluded that as a matter of custom, a carrier was in the nature of an insurer. This created real problems for the common carrier, who could be hoisted on pikes of negligence liability or insurance liability. The outcome of this legal reasoning was strenuous attempts by carriers to negative or limit their liability.

[30] In the nineteenth century there were a number of legislative attempts to reform the law of carriers, both in the United Kingdom and New Zealand. The New Zealand Parliament first moved into this subject area by the Carriers Act of 1866, which attempted to implement the Railway and Canal Traffic Act 1854 (17 & 18 Vict c 31). Further legislative developments followed in New Zealand through the Mercantile Law Act 1880, and the Mercantile Law Act 1908. Half a century or so later came the Carriers Act 1948. But it too created its own difficulties. The monetary limits for liability were raised, but not by much. And in particular, only common carriers were covered by the Act, and then only in respect of contracts for carriage wholly within New Zealand.

[31] By the 1960s it had become only too clear that New Zealand law was quite inadequate to address the age of containerisation, and the more modern transport systems which were coming into being. The Contract and Commercial Law Reform Committee (chaired by the late Colin Paterson) presented a report to the Minister of Justice in April 1968.

[32] The principal recommendations of that report were that:

(a) The distinction between common carriers and private carriers be abolished;

(b) The same rules apply to domestic sea and air carriage, and road and rail land carriage;

(c) Persons who procure contracts of carriage should be included in any definition of carrier;

(d) The fault principle be dispensed with;

(e) Risk of loss of, or damage to, goods should lie where the balance of convenience places it, namely (within certain limits) with the carrier;

(f) Carriers’ liability should be absolute (with certain exceptions) up to $1000, with no liability beyond that limit;

(g) Contracting out of liability should continue to be possible although only to the extent justified by the special circumstances of the case;

(h) The $1000 limit should apply in respect of each package or unit;

(i) Where a carrier supplies or packs a container or pallet, each item in or on it constitutes a separate unit, but where the owner of the goods supplies the container or pallet then (unless the carrier packs it) the container or pallet and its contents constitute one unit;

(j) A time limit of 12 months from delivery (or expected delivery) be imposed within which to claim against a carrier; and

(k) Successive carriers should be jointly and severally liable except for those who can prove that the loss or damage complained of did not occur whilst they were in possession of the goods.

[33] It took Parliament over a decade to enact those recommendations. By then, updating the law with respect to multi–modal transport operations had become an urgent matter. In the result, the Carriage of Goods Act 1979 embodied virtually all of the recommendations made by the Contract and Commercial Law Reform Committee. (For a review of the Act, see Garrow & Fenton, The Law of Personal Property in New Zealand (6ed, 1999) at pp 5,047 to 5,070.)

[21] Further assistance of a general character is to be gleaned from the judgment of Hillyer J in Fletcher Panel Industries Ltd v Ports of Auckland Limited [1992] 2 NZLR 231 at 233. There the Judge said:

The Act's title is significant in interpreting it. It is said to be "An Act to restate and reform the law relating to the carriage of goods within New Zealand". The Act creates an overall framework for liability for all those who are involved in the carriage of goods within New Zealand. It creates strict liability for carriers with certain limited defences and limitation of liability for carriers according to the "unit" of goods carried. The term "carriers" refers to those who contract directly with the consignor of goods and to those "actual carriers" who play a part in the cartage of goods.

[22] It is common ground that the provisions of the Act apply to the carriage of the Kenworth truck, even though a portion of the original contract of carriage entered into between CP Ships and Kenworth related to international carriage as defined in s 2. Such carriage is expressly excluded from the purview of the Act: s5(1). Section 9(7) provides that the responsibility of a contracting carrier who contracts for the carriage of goods from a destination outside New Zealand to a destination in New Zealand, begins for the purposes of the Act at the time when the international carriage of those goods ends. International carriage comes to an end when the goods are discharged from the ship: s 2.

[23] Certain provisions of the Act take effect subject to anything to the contrary in a contract governing the relationship of the relevant parties (s 7), but nothing in this case has been suggested as displacing the statutory scheme.

[24] Section 2 of the Act contains some important definitions. For present purposes the relevant definitions are:

Actual carrier, in relation to the carriage of any goods, means every carrier who, at any material time, is or was in possession of the goods, or of any container, package, pallet, item of baggage, or any other thing in or on which the goods are or were believed by him to be, for the purpose of performing the carriage or any stage of it or any incidental service; and includes the contracting carrier where he performs any part of the carriage:

Carriage includes any incidental service; and carry has a corresponding meaning:

Carrier means a person who, in the ordinary course of his business, carries or procures to be carried goods owned by any other person, whether or not as an incident of the carriage of passengers; and, except in sections 21 to 24 of this Act, includes a person who, in the ordinary course of his business, performs or procures to be performed any incidental service in respect of any such goods:

Contracting carrier, in relation to a contract of carriage, means the carrier who, whether as a principal or as the agent of any other carrier, enters or has entered into the contract with the contracting party:

Incidental service, in relation to any goods, means any service (such as that performed by consolidators, packers, stevedores, and warehousemen) the performance of which is to be or is undertaken to facilitate the carriage of the goods pursuant to a contract of carriage:

[25] Section 6 appears at the outset of this judgment. It significantly limits the liability of carriers falling within the section for the loss of or damage to any goods carried by such carriers.

[26] Section 9, by contrast, provides that a contracting carrier (that is, the carrier who contracts directly with the consignor), is responsible to the owner of the goods, (defined as the “contracting party”) for the loss of or damage to the goods concerned, whether or not the loss or damage is caused wholly or partly by him, or by any actual carrier. Normally the contracting carrier will be the only carrier with which the contracting party has a direct relationship. But s 15 provides that the maximum amount of such liability is $1,500 for each unit of goods lost or damaged.

[27] Where, as will often be the case, parties other than the contracting carrier play a role in the carriage of the goods, section 10 contains a detailed scheme which provides for the allocation of ultimate financial responsibility of carriers as between themselves. In such cases s 10 provides for the apportionment of liability to compensate a consignor (or “contracting party”) for loss or damage.

[28] Section 10 provides:

10 Liability of actual carrier

(1) The provisions of this section apply, subject to the other provisions of this Act, where a contract of carriage is to be or is performed wholly or partly by 1 or more actual carriers other than the contracting carrier (whether or not the contracting carrier himself performs part of the carriage).

(2) In any case to which this section applies where 1 actual carrier is involved, that carrier is, subject to the terms of his contract with the contracting carrier, liable as such to the contracting carrier for the loss of or damage to any goods occurring while the actual carrier is separately responsible for the goods in accordance with subsection (6) of this section, whether or not the loss or damage is caused wholly or partly by the actual carrier.

(3) In any case to which this section applies where more than 1 actual carrier is involved,—

(a) Subject to subsection (4) of this section, the actual carriers are, subject to the terms of their respective contracts, jointly liable as such to the contracting carrier for the loss of or damage to any goods occurring while the actual carriers are jointly responsible for the goods in accordance with subsection (5) of this section, whether or not the loss or damage is caused wholly or partly by the actual carriers or any of them:

(b) Each actual carrier is, subject to the terms of his contract, separately liable as such to the contracting carrier for the loss of or damage to any goods occurring while he is separately responsible for the goods in accordance with subsection (6) of this section, whether or not the loss or damage is caused wholly or partly by the actual carrier.

(4) No actual carrier is liable under subsection (3) (a) of this section if he proves that the loss or damage occurred otherwise than while he was separately responsible for the goods in accordance with subsection (6) of this section.

(5) For the purposes of subsection (3)(a) of this section, the actual carriers are jointly responsible for the goods from the time when the goods (or the container, package, pallet, item of baggage, or any other thing in or on which the goods are believed to be) are accepted for carriage until the time when the contracting carrier’s responsibility ends in accordance with subsection (3) or subsection (4) of section 9 of this Act.

(6) For the purposes of subsections (2) to (4) of this section, each actual carrier is separately responsible for the goods from the time when the goods (or the container, package, pallet, item of baggage, or any other thing in or on which the goods are believed to be) are accepted by him for carriage until the time—

(a) When they are duly tendered by him to the next actual carrier in accordance with the contract of carriage; or

(b) In the case of the last actual carrier, when the contracting carrier's responsibility ends in accordance with subsection (3) or subsection (4) of section 9 of this Act.

(7) For the purposes of subsection (3)(a) of this section, the actual carriers shall be liable in proportion to the amount of freight or other consideration payable to each of the actual carriers for the carriage performed by him.

(8) For the purposes of subsection (7) of this section, where the contracting carrier himself performs any part of the carriage, the amount of freight or other consideration payable to him shall be the difference between the total amount payable under the contract of carriage and the aggregate amount payable to the actual carriers.

(9) For the purposes of subsections (7) and (8) of this section, where any actual carrier (in this subsection referred to as the secondary actual carrier) performs any part of the carriage pursuant to a contract with any other actual carrier (in this subsection referred to as the primary actual carrier) (and not pursuant to a contract with the contracting carrier), the amount of the freight or other consideration payable to the primary actual carrier shall be the difference between the amount actually payable to him and the amount payable by him to the secondary actual carrier.

[29] A carrier will be an actual carrier and subject to the contribution regime set out in s 10, if that carrier is, or was at any material time, in possession of the goods for the purpose of performing the carriage of the goods, or any stage of it, or any incidental service. A “carrier” for the purposes of s 6, will therefore not necessarily be an “actual carrier”. Section 10 does not confer on the contracting party any right to claim from an actual carrier, other than the contracting carrier. The section simply sets out a contribution regime as between carriers. In ordinary circumstances, a contracting party’s claim lies against the contracting carrier alone.

[30] Much of the argument at the hearing of the appeal was devoted to the question of whether POAL was an “actual carrier”, and so subject to the contribution regime in s 10. But logically the earlier and primary question is as to the proper construction of s 6. If, pursuant to that section, POAL was a “carrier … liable as such” in respect of the damage to the Kenworth truck, then Southpac can have no claim against POAL, except:

a) In accordance with the terms of the contract of carriage made between Southpac and CP Ships and the provisions of the Act, or

b) If the loss or damage suffered by Southpac was intentionally caused.

[31] Although s 10 was the subject of detailed argument by counsel, I have found it unnecessary to focus on the section to any significant degree. That is because this claim does not relate to a dispute between actual carriers, or between actual carriers and the contracting carrier. Neither is it a claim by a “contracting party” against a contracting carrier. Rather, as an injured third party, Southpac seeks to recover damages against POAL, not in its capacity as a carrier at all, but rather as an employer whose employee has caused damage to Southpac’s property by his negligence.

Discussion

[32] The Judge was undoubtedly correct to find that POAL was a “carrier” for the purposes of s 6. POAL was contracted to CP Ships to provide services as stevedore, wharfinger, and warehouseman, all of which expressly or by implication fall within the definition of “incidental service”, thereby bringing POAL within the definition of a carrier for the purposes of the Act.

[33] Section 2 provides that “carriage” includes any incidental service, and “carry” has a corresponding meaning. A provider of an incidental service is accordingly, in effect, deemed to be a carrier of the goods for the purposes of s 6, even though that person might never have been in physical possession. The goods were therefore “carried by” POAL for the purposes of s 6.

[34] That much is accepted by Ms McLaren for Southpac. She says:

4.10 As “carriage” and “carry” include an incidental service (s 2), s 6 could equally read:

‘ …any loss or damage to any goods for which he is performing an incidental service except…”

[35] I agree. So did the District Court Judge. But he held that it was not acting “as such” in the context of the infliction of damage by the driver of POAL’s fork hoist driver employee. So the focus is as to the proper construction of the phrase “as such” where it appears in the expression “no carrier shall be liable as such” in s 6.

[36] Both counsel reminded me of the need to approach the task of interpreting the phrase “as such” in the light of s 5(1) of the Interpretation Act 1999 which provides that:

The meaning of an enactment must be ascertained from its text and in the light of its purpose.

[37] The overall purpose of the Act is plain enough. A reading of the long title and the Act as a whole demonstrates a clear and unambiguous intention to replace the complexities of the former common law with a statutory regime aimed at simplicity and certainty. As was said in Transtext, the Act carried into effect many of the recommendations of the report of the Contract and Commercial Law Reform Committee presented to the Minister of Justice in April 1968. Among the principal recommendations of that report which are to be found reflected in the statute are:

a)…

b)…

c) Persons who procure contracts of carriage should be included in any definition of carrier.

d) The fault principle be dispensed with.

e) Risk of loss of, or damage to, goods should lie where the balance of convenience places it, namely (within certain limits) with the carrier.

f) Carriers’ liability should be absolute (with certain exceptions) up to $1000 [now $1,500] with no liability beyond that limit.

[38] So the intention of the Legislature was to dispense with the fault principle in cases involving carriers and the carriage of goods, and to substitute a statutory code involving the imposition of statutory liability and the abolition of liability at common law.

[39] Against that background what did Parliament mean by the expression “as such” in s 6? The phrase appears in ss 6, 9, 10, 12, 13, 14 and 16. In each case the complete phrase is “liable as such”. In my opinion the proper interpretation of the phrase, consistent with the manifest purpose and scheme of the Act, is that a carrier will be exempt from liability under s 6 if at the time when the loss or damage occurred, the party concerned was acting in its capacity as a “carrier” of the goods concerned, and not in some other capacity unconnected with its work as a “carrier” of those goods.

[40] The statutory limitation on liability extends to all those carriers who play a role in the carriage of the goods, as contemplated by the contract of carriage, for the whole of the duration of the contract of carriage. Such carriers are acting in their capacity as parties undertaking obligations contemplated by the contract of carriage (in this case the sea way bill). Various carriers will undertake the carriage of the goods at different points in time. Some will be involved in physically moving the goods from place to place; others may simply provide incidental services. But provided in each instance that they were performing a role falling within the s 2 definition of the term “carrier” in connection with the carriage of the goods, they will be acting as carriers “as such”.

[41] Turning to the present case, the collision between POAL’s fork hoist and the Kenworth truck occurred during the currency, and in the course of performance of, the contract of carriage made between the contracting party and CP Ships. At the very time of the accident, POAL was engaged in the provision of incidental services. It was contractually responsible to CP Ships for the provision of stevedoring services which were, at the moment of the collision, being carried out by the party contracted to POAL’s subcontractor. Furthermore, POAL was providing wharfinger services and had set aside warehousing facilities for which the truck was bound at the time of the collision. In a temporal sense, the contract of carriage was on foot at the time of the collision and POAL was directly involved in carrying out its obligations to CP Ships, for the purpose of enabling CP Ships to carry out its contractual obligations to its contracting party.

[42] POAL was undoubtedly acting as a carrier “as such” in relation to the carriage of the goods.

[43] In my opinion therefore, the provisions of s 6 operated to exclude POAL from liability to Southpac for damage to the truck, despite its admitted negligence. That is because the common law liability, to which POAL would formerly have been subject, has been replaced and substituted by the new statutory regime.

[44] Of course, in order to fall within the exemption conferred by s 6, POAL must have been acting as a carrier in the context of, and for the purposes of discharging obligations arising under, the contract of carriage. Had the collision with POAL’s fork hoist occurred after the truck had been uplifted by Southpac’s carrier, on a public road outside the port area, then the legal outcome would be very different, because the contract of carriage would by then have come to an end, and POAL would no longer be acting as a carrier “as such” under that contract.

[45] Similarly, if POAL was, at the time of the collision, undertaking an activity involving the truck which did not fall within the provisions and purposes of the contract, then POAL would not be entitled to the benefit of the s 6 exemption. An example discussed at the hearing was that of the taking of the truck from storage on the wharf and its use as a grandstand from which to view yacht races. That would not be an activity falling within the contract of carriage. POAL would not be acting as a carrier “as such”. Section 6 would not apply.

[46] Ms McLaren submitted that POAL was nevertheless liable on the facts of this case, because the negligence upon which Southpac relies was not that of POAL in its capacity as a carrier of the goods, but rather that of an employee for whom POAL was vicariously liable, and who at the time of the collision, was not involved at all in the carriage of the truck. Her argument, as I understand it is that:

a) Dual liability is not directly excluded by the Act;

b) The scheme of the Act amounts to a statutory extension of the common law “four corners rule” which restricts the operation of exclusion clauses to cases where a party is carrying out its contractual obligations in the very manner contracted for: Raymond Burke Motors Ltd v Mersey Docks & Harbour Co [1986] 1 Lloyds’ Rep 155 at 162;

c) POAL, in causing its fork hoist to collide with the truck, was acting outside the four corners of the contract of carriage;

d) Such an approach does not do violence to the no-fault principle which underpins the Act because there are already significant exceptions contained within the Act itself – for example, liability for intentional damage and for consequential losses.

[47] In my view Ms McLaren’s careful argument runs foul both of the plain language of s 6 and of the manifest purpose of this legislation. On Southpac’s argument, the starting point must be the precise factual circumstances in which the loss or damage occurred, rather than upon the status of the carrier at the time. So in the present case it would be necessary to consider the role of the fork hoist driver in relation to the carriage of the truck. Because he was not involved in that carriage, Ms McLaren argues that POAL cannot seek the protection of s 6 since it is not relevantly acting as a carrier “as such” in the context of the contract of carriage.

[48] During the course of the hearing one or two theoretical factual scenarios were discussed. Ms McLaren was inclined to accept that the protection of s 6 might be available to POAL where the driver of the truck had stopped it during its journey towards the storage area and had left the truck in such a position as to block the path of the fork hoist – had the fork hoist driver then entered the cab of the truck and endeavoured to move it so as to clear a path for the fork hoist and in doing so had negligently collided with the fork hoist, then Ms McLaren was disposed, as I understood her, to accept that the driver might have been discharging POAL’s obligations in its capacity as a carrier “as such” pursuant to the contract.

[49] The distinction which Ms McLaren seeks to draw is, I believe, invalid. In each case, POAL is acting through an employee. It is irrelevant whether that employee drove the truck into fork hoist or the fork hoist into the truck. POAL is negligent in either case. It is simply not analytically correct to regard one factual situation as falling within the contract of carriage, and the other as being outside it. If Ms McLaren is right, then it will be necessary in many instances to conduct a very detailed factual inquiry in order to determine whether a carrier was acting “as such”. These are the very sorts of inquiries that were deliberately excluded from the scheme of the Act.

[50] Plaintiffs would be encouraged to investigate the detailed circumstances in which loss or damage occurred, and to issue proceedings in the hope that they may be able to recover, in addition to any statutory entitlement, the balance of their losses. Such proceedings would be likely to involve such questions as where, when and how the loss or damage occurred; who was directly responsible; if more than one, their respective degrees of responsibility; the inter-relationship of relevant contracts of carriage; the impact of those contracts on liability issues; whether there was a bailment or sub-bailment, and if so on what terms; whether any duties of care arose; and if so the inter-relationship between such duties and any relevant contracts or bailments.

[51] The elements of simplicity and certainty which the Act was designed to bring about would be subsumed in a search for dual liability. In my opinion, that was not an outcome contemplated by the Legislature and it is not an outcome permitted upon a proper construction of s 6.

[52] It is the status of POAL at the time of the accident that will govern its liability. Did it, at that time, fall within the s 2 definition of “carrier” in relation to the goods? If it did, it is not liable to Southpac. It is irrelevant that the accident arose through the negligence of a POAL employee who played no role in the carriage of the goods.

[53] The contracting party, Kenworth Trucks, is entitled to recover $1,500 from CP Ships (s 15). CP Ships in turn, at least in theory, is entitled to look to the actual carriers involved in the carriage of the truck for reimbursement (s 10). As it happens, POAL has assumed contractual liability to CP Ships, by reason of its agreement with CP Ships through Axis Intermodal. In terms of that contract, its liability to CP Ships is expressed to be the same as its liability under the Act.

[54] POAL escapes liability to Southpac because it is entitled to the benefit of s 6 of the Act. That outcome arises whether or not POAL is an actual carrier. As I mentioned earlier, much argument was directed to the question whether, on the facts of this case, POAL was an actual carrier for the purposes of s 10. The relevance of that issue is confined to the issue of the extent of POAL’s liability to make good the loss sustained by CP Ships by reason of its liability to Kenworth Trucks.

[55] Section 10 does not confer on an owner of goods a right to sue any carrier. The function of the section is to regulate the rights and obligations of carriers inter se. It is unnecessary for me to decide whether POAL was an actual carrier. Even if I should hold that it was, no right accrues to Southpac thereby.

[56] Southpac is left without a remedy for virtually the whole of its loss. But it is no doubt insured for such loss. The certainty which the Act confers on contracting parties enables those parties to assess and provide for the risks arising in the course of the carriage of goods.

[57] A party may be a carrier for the purposes of s 6 but not an actual carrier for the purposes of s 10. It may therefore enjoy exemption from liability on the one hand without any obligation to contribute to, or make good a loss suffered by, the contracting carrier. That is an outcome which the Act plainly contemplates, although no doubt in practice appropriate contractual provisions will govern the precise relationships between carriers.

[58] Ms McLaren advanced a second argument, based upon s 16 which, she argued, conferred no immunity on the fork hoist driver. Accordingly, she contended, even if POAL enjoyed s 6 immunity, it was nevertheless vicariously liable for the negligence of the fork hoist driver.

[59] Section 16 provides:

16 Liability of carrier’s employee

(1) Every employee of a carrier who, in the course of his employment, intentionally causes the loss of or damage to any goods being carried by the carrier shall be liable to the owner of the goods for that loss or damage.

(2) Subject to subsection (1) of this section, no employee of a carrier shall be liable as such, whether under this Act or otherwise, to the owner of any goods being carried by the carrier for the loss of or damage to any of those goods.

[60] Ms McLaren argued that the expression “as such” in s 16(2) confers immunity on an employee only when that employee is acting pursuant to the contract of carriage relating to the goods which are lost or damaged.

[61] She contended that, although s 16(2) confers statutory protection from civil claims for negligence to those through whom an employer is undertaking its role as a “carrier” of the goods concerned, that protection is not available to those employees who are not so engaged. It follows, she argued, that the fork hoist driver falls outside the ambit of s 16(2). He is accordingly liable in negligence to Southpac, and POAL likewise becomes liable to Southpac because it is vicariously liable for the acts of its employee.

[62] Mr Carruthers submitted that the expression “as such” does not so restrict the immunity conferred by subsection (2). In my opinion Mr Carruthers is plainly right. The phrase “as such” qualifies not the word “carrier” but the expression “employee”. It is the status of the employee of a carrier that is in issue, not the status of the carrier itself. Any employee of a carrier is immune from liability pursuant to s 16(2) for the loss of, or damage to any goods carried by that carrier, provided that the employee at the relevant time is acting in his capacity as an employee of that carrier. That is the proper construction of s 16(2). It accords with the view I have taken of s 6.

[63] The legislature’s intention in enacting s 16 is plain enough. It mirrors s 6. Like that section, it preserves liability for intentional loss or damage, but otherwise confers statutory protection from liability. Section 16 plays a necessary part in the scheme of the Act, in order to ensure that a carrier protected from liability under s 6 does not face liability by reason of its vicarious responsibility for the acts of an employee.

[64] For completeness I should mention a related argument briefly advanced by Ms McLaren, to the effect that POAL has failed to produce evidence of the purpose for which the fork hoist driver was employed when the collision occurred. The issue was important, she said, and could not be left as a matter of simple inference because, while an employee might attract immunity under s 16(2) pursuant to a contract of carriage, no immunity was available to an employee who, while undertaking a task in the course of his employment, was nevertheless not engaged at the relevant time pursuant to any particular contract of carriage at all.

[65] If Ms McLaren is right, then the question of immunity under s 16(2) becomes a matter of chance. An employee who is undertaking duties pursuant to a contract of carriage (not necessarily the contract of carriage which relates to the claim for damaged or lost goods) will be immune, but where an employee was engaged on, say, general duties for his or her employer, vicarious liability would follow on the part of the employer.

[66] This argument is based on a construction of s 16(2) which I have just rejected. The subsection is not confined to employees who happen to be engaged, at the time of loss or damage, in activities which are directly related to a contract of carriage. The qualifying factor is simply that the employee concerned must be acting in the course of his employment for a carrier.

[67] Ms McLaren referred specifically to the case of an employee undertaking a training exercise for POAL’s benefit alone, and argued that POAL had not excluded possibilities such as that. There was no need for POAL to do so. An employee on a training exercise is immune in just the same way as is an employee engaged in activities directly connected with Southpac’s truck, or associated with any other contract of carriage in which POAL plays a role as carrier if POAL is, at the time of the loss or damage, engaged in the carriage of the goods concerned.

Summary

[68] I have differed from the learned District Court Judge in that I have concluded that neither the language nor the purpose of the Act permits a party such as Southpac to maintain a cause of action against a carrier to which s 6 applies, even where, as here, there has been a breach of tortious duty on the part of an employee not at the time engaged in the carriage of the goods concerned.

[69] Detailed factual inquiries such as would be needed in many cases if Southpac’s argument is right are the very sorts of factual inquiries which the enactment of this legislation sought to avoid.

[70] In my view, POAL is entitled to avail itself of the statutory exemption from liability conferred by s 6. So is its fork hoist driver, pursuant to s 16(2). There can accordingly be no question of vicarious liability.

[71] It follows that judgment ought not to have been entered in favour of Southpac. That judgment is accordingly set aside.

[72] Ms McLaren has submitted that even if I decided that POAL was protected by ss 6 and 16(2), I ought not to enter summary judgment in favour of POAL because there has been no discovery and it may emerge that the damage was intentionally caused. That would of course disentitle POAL from relying upon the immunity otherwise conferred by s 6.

[73] I am not prepared to adopt that course. For the reasons given in this judgment, Southpac’s claim in its current form cannot succeed. Nothing has been placed before the Court to suggest that there is a tenable argument to support a claim of intentional damage. Ms McLaren says that something to that effect might turn up on discovery, but that is an argument based on speculation. It is inherently unlikely that the truck was deliberately rammed by POAL’s employee. It is not proper to permit the proceeding to remain on foot, even though the cause of action currently pleaded cannot succeed, simply to allow Southpac to obtain discovery in order to determine whether it might, after all, have a cause of action based on intentional damage.

[74] Accordingly, I enter judgment for POAL on its application for summary judgment dated 8 April 2005.

[75] On 31 October 2005 POAL paid Southpac some $63,667.67, pursuant to the judgment of the District Court. POAL is entitled to reimbursement of that amount. Pursuant to r 718B Southpac is to repay that sum to POAL, together with interest at 7.5% per annum from 31 October 2005 to the date of repayment.

Costs

[76] POAL is entitled to costs on a category 2B basis, together with its proper disbursements. Its costs in the District Court are to be fixed by that Court.