Century Drilling Ltd v Toll North Pty Ltd [2002] QDC 366

DISTRICT COURT OF QUEENSLAND CITATION: Century Drilling Limited v. Toll North Pty Ltd [2002] QDC 366 PARTIES: CENTURY DRILLING LIMITED (Plaintiff) v. TOLL NORTH PTY LTD (Defendant) FILE NO/S: 1796 of 2002 DIVISION: PROCEEDING: Application in a Claim ORIGINATING COURT: District Court Brisbane DELIVERED ON: 10 December 2002 DELIVERED AT: Brisbane HEARING DATE: 29 November 2002 JUDGE: Robin DCJ ORDER: Paragraphs 11.3.3 & 12A of the amended defence struck out. Defendant to pay the plaintiff’s costs of the application to be assessed. CATCHWORDS: Uniform Civil Procedure Rules r171(1)(a) and (b), r 483 – successful application to strike out part of defence on ground it “discloses no reasonable defence” – proper test considered – whether certain remaining paragraphs apparently rendered devoid of effect should be struck out too – defendant carrier sought to rely on the Hague Rules to exonerate it from liability on grounds an “independent contractor” shipping company engaged by it (or that shipping company’s stevedore) was responsible for delay – shipping company (or its personnel) held the “servants or agents” of the defendant within Hague Rules – Hague Rules also relied on to limit liability – “sea freight payable for the goods delayed” held to refer only to sum identifiable within the arrangements made by the parties – no such sum was claimed to be identifiable. Carriage of Goods by Sea Act (Cth) 1991, Schedule 1A Hague Rules, Article 4A, Article 4 bis Madden v. Kirkegard Ellwood & Partners (1975) Qd.R. 363 G Hawkins & Sons Pty Ltd v. Commissioner of Main Roads (unreported) Supreme Court of Queensland, 336 of 1991, Cooper J, 20 March 1992. -- 1 of 19 -- 2 General Steel Industries Inc v. Commissioner for Railways (NSW) (1964) 112 CLR 125 Queensland University of Technology v. Project Constructions (Aust) Pty Ltd (In Liq) (2002) QCA 224 Bernstrom v. National Australia Bank Ltd (2002) QCA 231 Swain v. Hillman (2001) 1 All ER 91 COUNSEL: Mr Gynther for the applicant plaintiff Mr McLeod for the respondent defendant SOLICITORS: Corrs Chambers Westgarth for the applicant plaintiff Phillips Fox for the respondent defendant [1] This is an application by the plaintiff pursuant to r.171 of the Uniform Civil Procedure Rules seeking that paragraphs 11.3 and 12A of the amended defence be struck out. Somewhat belatedly, Mr. Gynther, for the plaintiff, sought to amend the application to add a request for separate decision of the relevant questions under Uniform Civil Procedure Rules r.483. The court indicated that if it contemplated proceeding in that way, the defendant would have an opportunity to be heard before an order providing for separate decision was made. [2] The only aspect of r.171 which could be relied on is that relating to a part of a pleading which “(a) discloses no reasonable defence”, although Mr. Gynther suggested (b) might also be available. [3] The plaintiff’s current pleading is its second amended statement of claim filed on 10 September 2002. The responding pleading is the amended defence which had already been filed on 1 August 2002. It has been expanded by particulars given recently. [4] The plaintiff claims it had a contract requiring provision by it of certain drilling services in Vietnam, involving use of its drilling rig to drill wells, that (in aid of its -- 2 of 19 -- 3 performing that contract) it “entered into an agreement with the defendant for the mobilisation and delivery of certain equipment by the defendant to Vietnam (the “Service Contract”).” The Service Contract required performance by the Defendant (which appears to be called “Carpentaria”) of defined services, including provision of personnel and equipment, cleaning of equipment and shipping to Haiphong, Vietnam and Batam Island, Indonesia, of cargo. The consideration for performance of “the Works as defined” appears to have been US$370,874, an amount in excess of what may be claimed by the plaintiff. The plaintiff contends it was the defendant’s obligation under the service contract to deliver the main rig and equipment required to support its operation (called the Brisbane Load) in Haiphong on 10 December 2001, that the defendant knew of the plaintiff’s obligations under the Drilling Contract, and that the purpose of the Service Contract was to fulfil those obligations, delay in delivery of the Brisbane Load being likely to result in delay and loss. Somehow, the Brisbane Load, having been unloaded in Port Moresby, was not reloaded upon the Haiphong-bound vessel. The equipment was delivered to Haiphong (late, according to the plaintiff) by Hercules aircraft, pursuant to arrangements the defendant caused to be made. Although the claim is for “damages for breach of contract or alternatively breach of duty”, Mr. Gynther has identified the alternative claim as one for breach of duty as bailee. [5] A major issue in the action is whether the defendant was under an obligation to deliver in Haiphong by or on the date indicated. [6] The contentious provisions of the amended defence are: “11.3 Pursuant to Article 4A of the amended Hague Rules the defendant, as a ‘carrier’ within the meaning of the amended Hague Rules, is not liable for any loss as alleged by the plaintiff because: -- 3 of 19 -- 4 11.3.1 the delay in the delivery of the Container was excusable; 11.3.2 the defendant undertook all reasonable measures to avoid any delay and its consequences in that it engaged a competent shipping agent to transport the Container; 11.3.3 the delay was caused by circumstances beyond the reasonable control of the defendant. … 12A If the plaintiff suffered any loss and damage as alleged at paragraph 15 of the amended statement of claim (which is denied) then Article 4A Section 6 of the amended Hague Rules provides that such loss and damage is limited to the lesser of: 12A.1 the actual amount of the loss; 12A.2 two and half times the sea freight payable for the goods delayed; 12A.3 the total amount payable as sea freight for all goods shipped under the contract of carriage. The defendant will further particularise the limitation of the alleged loss at the trial or earlier hearing of this matter.” [7] As to what occurred in Port Moresby, the pleading states: “9.1 The Brisbane load was transported by Crocodile Lines Shipping Company (“Crocodile Lines”) from Townsville to Port Moresby where it was accepted and loaded aboard a vessel owned and/or operated by Crocodile Line for delivery by Crocodile Line to Haiphong, in accordance with Bill of Lading No TSVHPG0002; 9.2 The defendant did not authorise or participate in the offloading of any container at Port Moresby; 9.3 The container was off loaded at Port Moresby in Papua New Guinea as a result of the negligence of Crocodile Lines and/or Port Services PNG Pty Ltd and not the defendant.” The parties (the plaintiff on 12 November 2002, the defendant on 21 November 2002) have signed a consent pursuant to r.666 to the Registrar’s making an order giving the defendant leave to issue third party proceedings against China Steam Navigation Company trading as Crocodile Lines. -- 4 of 19 -- 5 [8] The amended Hague Rules are applicable by reason of the (Commonwealth) Carriage of Goods By Sea Act 1991 to which they form Schedule 1A. Schedule 2 comprises the Hamburg Rules which, it seems, are regarded as more advanced, although the Hague Rules have been amended as occasion demanded. It is contemplated that at some future time, Australia may be ready to embrace the Hamburg Rules; our country seems inclined to follow, rather than lead its main trading partners. [9] Mr. Gynther sought to rely on Parliamentary material indicating that, at least in respects presently relevant, the Hamburg Rules and the Hague Rules have the same meaning, with a view to inducing the court to act on what he submitted (I think justifiably) was the meaning of rather clearer drafting in the Hamburg Rules. I have some difficulty with this approach. None of the Parliamentary speeches relied on was by the relevant Minister. It was not shown that speeches by the Minister’s Parliamentary Secretary, let alone speeches by Backbenchers, as proposed by the plaintiff, could qualify as extrinsic material under the relevant provisions of the Acts Interpretation Act 1901 as amended of the Commonwealth. Nor was it shown that the very comprehensive Report of the Marine Cargo Liability Working Group - September 1995 in respect of Australia’s cargo liability regime, which appears to be a Department of Transport and Regional Services document, rather than a Parliamentary one, could be used by the court in aid of statutory interpretation. In the circumstances, my approach has been that it is not appropriate to go beyond the amended Hague Rules and relevant case law. [10] Article 4A (as taken from a folder of documents handed up by Mr. Gynther, presumably by consent) is as follows: -- 5 of 19 -- 6 “1. Despite Article 4, a carrier is liable to a shipper for loss (including but not limited to, pure economic loss, loss of markets or deterioration) caused to the shipper by the shipper’s goods being delayed while the carrier is in charge of the goods unless the carrier establishes, on the balance of probabilities, that: (a) the delay was excusable; and (b) the carrier (or, if at the time of the delay, the goods were under the control of servants or agents of the carrier, those servants or agents) took all measures that were reasonably required to avoid the delay and its consequences. [NOTE: For the meaning of “in charge of the goods”, see paragraph 2 of Article 1.] 2. For this Article, goods have been delayed if they are not delivered at the port of discharge specified in the relevant contract for carriage of goods: (a) within the time allowed in the contract for that purpose; or (b) if the contract does not specify a time for that purpose – within a reasonable time for delivery, at that port, of similar goods carried by a diligent carrier (having regard to any particular circumstances of the case and the intentions of the shipper and the carrier). [NOTE: For the meaning of ‘delivered’, see paragraph 1A of Article 1.] 3. For paragraph 1(a) of this Article, a delay is excusable only if: (a) it is caused by a deviation authorised by the shipper, or by a term in the contract of carriage; or (b) it is caused by circumstances beyond the reasonable control of the carrier or its servants or agents; or (c) it is reasonably necessary to comply with an express or implied warranty; or (d) it is reasonably necessary for the safety of the ship or its cargo; or (e) it is for the purposes of saving human life or aiding a ship in distress; or (f) it is reasonably necessary for the purpose of obtaining medical or surgical aid for a person on board; or (g) it is caused by barratrous conduct of the master or crew; or (h) paragraph 4 of this Article applies. 4. For paragraph 1 (a) of this Article, a delay caused by industrial action is excusable if the industrial action was not substantially caused, or substantially contributed to, by unreasonable conduct of the carrier. -- 6 of 19 -- 7 5. For paragraph 4, conduct of servants or agents of the carrier is not taken to be conduct of the carrier if the servants or agents engaged in the conduct without the carrier’s express or implied authority. 6. The quantum of the carrier’s liability for loss caused by the delay is limited to whichever is the lesser of: (a) the actual amount of the loss; or (b) two and a half times the sea freight payable for the goods delayed; or (c) the total amount payable as sea freight for all of the goods shipped by the shipper concerned under the contract of carriage concerned. 7. To avoid doubt, nothing in Article 4 or this Article prevents a carrier being liable to be a shipper under both Article 4 and this Article. Article 4 bis follows: “1. The defences and limits of liability provided for in this Convention these Rules shall apply in any action against the carrier in respect of loss or damage to goods covered by a contract of carriage whether the action be founded in contract or in tort. 2. If such an action is brought against a servant or agent of the carrier (such servant or agent not being an independent contractor), such servant or agent shall be entitled to avail himself of the defences and limits of liability which the carrier is entitled to invoke under this Convention these Rules. 3. The aggregate of the amounts recoverable from the carrier, and such servants and agents, shall in no case exceed the limit provided for in this Convention these Rules. 4. Nevertheless, a servant or agent of the carrier shall not be entitled to avail himself of the provisions of this Article, if it is proved that the damage resulted from an act or omission of the servant or agent done with intent to cause damage or recklessly and with knowledge that damage would probably result.” [11] Following the procedure at the hearing, para. 12A will be considered first. The only one of the limitations that could be of concern is that to “two and a half times the sea freight payable for the goods delayed”. In particulars of 11 November 2002, the defendant has said that the amount of sea freight payable for the goods delayed was “approximately $US2,500”. It is clear that the amount has no reference to any freight component actually identified in dealings between the parties. I agree with -- 7 of 19 -- 8 Mr. Gynther’s submission that “two and a half times the sea freight payable for the goods delayed” is not an apt use of language to describe or attempt to describe either: (a) a reference to what the market would charge for carrying the same goods on the same journey; or (b) some hypothetical obligation or contract of carriage. [12] If the amount of the limitation in Article 4A Rule 6(b) is to be applied, then, in my view, it is vital to identify the amount of “the sea freight payable for the goods delayed” by reference to actual arrangements between the parties. It is patent, in my view, that the purpose of Rule 6 is to introduce a notion of proportionality into the assessment of the carrier’s liability, to ensure that any amount the carrier has to pay for delay is not disproportionate to the reward the carrier did or stood to obtain for its services. This means there is an onus on the carrier wishing to preserve entitlement to such a limitation to specify separate sea freight payable for components of the totality of goods shipped, in accordance with its best judgment about the extent to which that may be a useful precaution. In default of doing so, the carrier is left to take its chances between (a) and (c) of Rule 6, each of which represents a rational approach towards achieving “proportionality”. [13] In fairness to Mr. Gynther’s attempt to rely on extrinsic aids to statutory interpretation, I would note that the relevant Explanatory Statement, as downloaded from the internet, states that “Rule 6 sets limits to the quantum of the carrier’s liability, similarly to the limits in the Hamburg Rules”. I would not regard this as a warrant for turning to the language of the Hamburg Rules, rather than focus on the language of Rule 6 of Article 4A, the proper interpretation of which, indicated -- 8 of 19 -- 9 above, seems to me clear. Mr. Gynther is correct that if reference to some kind of “market price” concept was intended, there would have been no difficulty about specifying that. [14] He also submitted that if para. 12A(2) of the amended defence is to be struck out (as I think it should be) the whole of para. 12A should go, as offending r.171(1)(a), quoted above and also (b), by reason of a “tendency to prejudice or delay the fair trial of the proceeding” if the balance of 12A remains. The “pleadings housekeeping” Mr. Gynther contends is called for under the strict approach of Madden v. Kirkegard Ellwood & Partners (1975) Qd.R. 363 at 363-64 and 366 and in G Hawkins & Sons Pty Ltd v. Commissioner of Main Roads (unreported) Supreme Court of Queensland, 336 of 1991, Cooper J, 20 March 1992 could mean that other provisions of the amended defence which have no useful work remaining to do ought to go as well. These were para. 4.3 under which the defendant: “ …. Says further that pursuant to Article 1(g) of Schedule 1A (amended Hague Rules) of the Carriage of Goods By Sea Act 1991 (Cwth) (the Act) the Service Contract was a ‘sea carriage document’” and para. 5.6 under which the defendant: “… says that pursuant to ss.8 and 11 of the Act the Service Contract is subject to the application of the amended Hague Rules.” [15] If it comes to the point, I think Mr. McLeod (counsel for the defendant) ought to have an opportunity to say why those provisions should be allowed to remain if (as will happen) there is no other reference to the amended Hague Rules. [16] The parties appeared to accept that the relevant principle in this striking out application was to be found in General Steel Industries Inc v. Commissioner for Railways (NSW) (1964) 112 CLR 125, referred to with approval by the Court of -- 9 of 19 -- 10 Appeal in Queensland University of Technology v. Project Constructions (Aust) Pty Ltd (In Liq) (2002) QCA 224 at [7] per Holmes J, with whom Davies JA and Mullins J agreed, in considering r.293. It was submitted by the plaintiff that the Court of Appeal decision, likewise that in Bernstrom v. National Australia Bank Ltd (2002) QCA 231, placing emphasis on the language of rr. 292 and 293 (“no real prospect of succeeding”) and Lord Woolf’s comments about that expression in Swain v. Hillman (2001) 1 All ER 91, 94 may indicate a similar approach to be taken under r.171. The argument was that a claim or defence is not “reasonable” within r.171 if it can be said that there is no real prospect of it succeeding. The General Steel test indicates “that great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case.” Whichever approach is applied, I consider that there is no sufficiently promising prospect of Article 4A Rule 6 applying to limit the defendant’s liability to justify this remaining as a live issue in the action. [17] Mr. McLeod’s argument in respect of para. 12A was: “15. In light of the defendant’s reliance upon Article 4A of the Amended Hague Rules, para. 12A complies with the relevant provisions relied upon therein and accordingly there is no basis for the paragraph to be struck out.” Mr. McLeod’s submission as to the general approach to be taken in the application was: “Pursuant to r.171 of the UCPR, the plaintiff seeks an order that paragraphs 11.3 and 12A of the amended defence be struck out. The power to strike out a pleading as disclosing no reasonable ground of defence should be sparingly employed. In General Steel Industries Inc v. Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129-130, Barwick CJ expressed the view that a Court will generally only strike out a part of a pleading where it can be clearly demonstrated, on an interlocutory basis, that the pleading is so untenable that it cannot possibly succeed. To similar effect see -- 10 of 19 -- 11 Hodges v. New South Wales ALR 1 at 2-3 and Effem Foods Pty Ltd v. travel Industries of Australia Pty Ltd (1993) 43 FCR 510.” I think there was some oversimplification here of the effect of General Steel. The view attributed to the Chief Justice was one of a variety of judicial statements of a test; when he used them without quotation marks, it followed acknowledgement that the necessary conclusion might follow fairly complex inquiry and/or argument. It is useful to consider the reference in context of the full passage referred to by Mr. McLeod: “… There is no need for me to discuss in any detail the various decisions, some of which were given in cases in which the inherent jurisdiction of a court was invoked and others in cases in which counterpart rules to Order 26, r.18, were the suggested source of authority to deal summarily with the claim in question. It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action – if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal – is clearly demonstrated. The test to be applied has been variously expressed; ‘so obviously untenable that it cannot possible succeed’; ‘manifestly groundless’; ‘so manifestly faulty that it does not admit of argument’; ‘discloses a case which the Court is satisfied cannot succeed’; ‘under no possibility can there be a good cause of action’; ‘be manifest that to allow them’ (the pleadings) ‘to stand would involve useless expense’. At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed; or ‘so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument’; ‘so to speak apparent at a glance’. As I have said, some of these expressions occur in cases in which the inherent jurisdiction was invoked and others in cases founded on statutory rules of court but although the material available to the court in either type of case may be different the need for exceptional caution in exercising the power whether it be inherent or under statutory rules is the same. Dixon J (as he then was) sums up a number of authorities in Dey v. Victorian Railways Commissioners (1) where he says (2): ‘A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury. The fact that a transaction is intricate -- 11 of 19 -- 12 may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process’. Although I can agree with Latham CJ in the same case when he said that the defendant should be saved from the vexation of the continuance of useless and futile proceedings (1), in my opinion great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal. On the other hand, I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff’s claim . Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed. In the present applications the defendants seek an exercise of the inherent jurisdiction of the Court to stay actions which are frivolous and vexatious and an abuse of process.” [18] The defendants’ applications succeeded. If I am correct about Article 4A Rule 6, the limitations defence in paragraph 12A.2 as pleaded and particularised cannot possibly succeed. Of course, the situation would be different if the amended defence pleaded that arrangements between the parties had in some way identified the amount of US$2,500. (The particulars mentioned state that the defendant agreed to pay Crocodile Lines A$348,162.25 sea freight to deliver cargo from Townsville to Haiphong.) [19] Paragraph 11.3 of the amended defence is setting up Article 4A Rule 1 which qualifies an underlying provision recognising the liability of a carrier to a shipper for delay by a proviso giving the carrier the opportunity to establish that: “(a) the delay was excusable; and -- 12 of 19 -- 13 (b) the carrier (or, if at the time of the delay the goods were under the control of servants or agents of the carrier, those servants or agents) took all measures that were reasonably required to avoid the delay and its consequences.” Rule 3 provides that for purposes of (a) above, delay is excusable only if: “(b) it is caused by circumstances beyond the reasonable control of the carrier or its servants or agents.” This is the only one of the eight categories of the excusable delay which is claimed to be relevant. For this aspect of the defence to avail the defendant, it must establish both 1(b) and 3(b). In the circumstances it has to show that Crocodile Lines was not its “servant or agent”. In the context of this proceeding, in my view, it is not sufficient to show that Crocodile Lines was an independent contractor. Presumably that is what is intended by para. 11.3.2 (and perhaps 11.3.3). Mr. McLeod relied upon what Fullager J said in Wilson v. Darling Island Stevedoring and Lighterage Co Ltd (1956) 95 CLR 43, at 69-70: “ Before proceeding further I would make two general observations. In the first place, Lord Sumner’s view, as expressed, clearly does not go beyond the case of the owner of a chartered ship. On the other hand, the view expressed by Scrutton L.J. in the Court of Appeal although it also does not in terms go beyond a case of owner and charterer of a ship, was (with the concurrence of Bankes L.J.) in Mersey Shipping & Transport Co. v. Rea Ltd. expanded into a wide general rule to the effect that, if A agrees to do work for B on condition that he is not to be liable for negligence, and C is engaged by A (whether as a servant of A or as an independent contractor with A) to do the work, C will not be liable to B in tort if his own personal negligence causes damage to B. There is, in my opinion, no foundation whatever for suggesting that there is any such general rule of law. Owen J. in Gilbert, Stokes & Kerr Pty. Ltd. v. Dalgety & Co. Ltd. said :- “I would have thought that no such general principle was to be found in the law of agency, and would have agreed entirely with the statement to that effect by Jordan C.J. in Williams v. Commissioner for Main Roads”. I also would agree with that statement. According to Denning L.J. in Adler v. Dickson a distinction is to be drawn, and, if A stipulates with B that he will not be liable for the negligence of his servants or agents, his servants and agents are not protected, but, if A stipulates with B that neither he nor his servants or agents are to be liable for negligence, his servants -- 13 of 19 -- 14 and agents will be protected. I should have thought it clear that, unless from special circumstances (such as existed in Hall’s Case) a contract including the exempting clause could be inferred between B and a particular servant or agent of A, the servants and agents of A would not be protected in either case. I cannot leave this subject without observing that the word “agent” appears to me to be often misused in this connection, and one cannot help feeling that this misuse is largely responsible for at least of the views which have been entertained of the Elder Dempster Case. It seems to me quite wrong to say that a stevedoring company engaged by a shipowner to load or unload a ship is an “agent” of the shipowner, just as it would be wrong to say that a builder is an “agent” of a building owner. If A engages B to lay out a garden for him, and B engages C to do the actual work, C is not in any intelligible legal sense B’s agent. B is an independent contractor, and C is either A’s servant or an independent contractor with A. Agency in the legal sense simply does not come into the matter. The second observation I would make is this. What has been supposed to be a principle involved in the Elder Dempster Case (although there is a conspicuous lack of unanimity as to what that principle really is) has, as will be seen, been extended so as to give a stevedore exemption from liability for negligence by virtue of a provision in a bill of lading to which the stevedore is not a party, and which is really no concern whatever of the stevedore. This appears to me to be a “development” of the common law which is altogether out of character, and which is exactly the opposite of what one would have expected and felt to be justified. It is all the more remarkable in view of the fact that the modern tendency has been to expand the field of liability in tort. The common law has, I think, from quite early times – consistently with its general policy of freedom of contract – allowed the validity of provisions in a contract which limit or exclude liability for negligence. But it has always frowned upon such provisions and insisted on constructing them strictly.” His Honour was one of a three:two majority holding that a stevedore was not a party to a contract evidenced by a certain bill of lading, that it could neither sue nor be sued on it and that nothing in it could relieve it from the consequences of a tortious act of its servants. Dixon CJ agreed with Fullagar J’s judgment. [20] The present question is not whether a contract excludes or limits liability of the defendant, but whether the Hague Rules have that effect. In them it is specifically contemplated that the expression “servant or agent” may extend to an independent -- 14 of 19 -- 15 contractor. Thus, in Article 4bis Rule 2 there is reference to an action brought against “a servant or agent of the carrier (such servant or agent not being an independent contractor)” (in which cases “such servant or agent shall be entitled to avail himself of the defences and limits of liability which the carrier is entitled to”). In the circumstances, my opinion is that the proper interpretation of the Hague Rules requires that the same meaning be accorded to “servant” and “agent” throughout. Mr. Gynther has located a respectable group of authorities decided upon provisions of the equivalent of the Hague Rules in the Carriage of Goods By Sea Act 1924, in particular Brown & Co Ltd v. Harrison (1927) All ER Rep.195 and Leesh River Tea Co Ltd v. British India Steam Navigation Co Ltd (1967) 2 QB 250. In Brown, Bankes LJ set out the relevant provision at 201: “Any other cause arising without the actual fault or privity of the carrier, or without the fault or neglect of the agents or servants of the carrier, but the burden of proof shall be on the person claiming the benefit of this exception to show that neither the actual fault or privity of the carrier nor the fault or neglect of the agents or servants of the carrier contributed to the loss or damage”. and said at 202: “The last point is that the servants of the stevedore in this particular case being employed by the stevedore, and the stevedore himself being employed as an independent contractor by the shipowner to carry out the discharge, the servants of the stevedore are not agents of the carrier within the meaning of r.2(q). I think counsel for the shipowners has answered that point himself, because he points out in a case which he referred to for another purpose, Machu v. London and South-Western Rail Co (10), that, in a very similar case, the court held that, for the purpose of construing an Act of Parliament in somewhat similar terms to this statute, the servants of the independent contractor would be the agents of the railway company for the purpose of the construction of the statute; and so here, it seems to me impossible to put any reasonable construction on this statute except by regarding the servants of the persons who are employed by the shipowner in order to fulfil his statutory obligation to discharge the vessel as being his agents for that purpose. On all points, therefore, I think that the judgment of the learned judge was right and that the appeal must be dismissed.” -- 15 of 19 -- 16 Atkin LJ described one argument as “the worst point that has ever been taken in the Court of Appeal in my time” and went on on p.204 to consider one apparently a little more meritorious: “The other question is the question whether or not the servants of the master stevedore at Vera Cruz can be said to be, within the meaning of r.2(q), the agents or servants of the ship. Counsel for the shipowners did not dispute that the master stevedore himself was to be considered an agent of the ship, and I think he was quite right in so holding. There was a statutory obligation on the ship to discharge, and they performed that duty by entering into a contract with the master stevedore, who, for that purpose, was their agent in performing their statutory duty. To my mind, that in itself would be sufficient to support the matter, because it is plain that the master stevedore, according to our law, would be responsible for the tortious acts of his servants done in the scope of their employment. But, quite apart from that, I think that the servants of the stevedore for this purpose are also the agents of the ship, and I think that is made plain by the reasoning of the court in the case that my Lord referred to of Machu v. London and South-Western Rail Co (10) where they had to deal with words which were narrower in their meaning, where they had to deal with the word “servants” and where the court held that the servants of the sub-contractor of the carrier were, within the meaning of the Carriers Act, servants of the carrier. I think that that is sound and applies to this case.” [21] In Leesh River Tea, Sellers LJ at 272 said that Brown “established that although stevedores appointed, as here, are independent contractors, the men employed by them to discharge the cargo must be regarded as servants of the shipowner for that purpose within the meaning of sub-clause (q).” Mr. Gynther relied on Machu v. The London and South-Western Railway Co (1848) 2 Ex 415 at 425-26 on which Brown was based: “I have paid great attention to the argument, and the whole matter comes to this: - It appears that Chaplin & Horne had contracted with the Railway Company to do this part of the business for them; that they were not the servants to the Company, but were its agents; and that the persons whom Chaplin & Horne employed, whom they paid, and to whom they gave orders, and had power to dismiss – these persons were still further removed from the Company, as being servants to Chaplin & Horne, and not to the Company. Then it is said by Mr. Martin, that the act of parliament in question distinctly gives the Railway Company, as carriers, indemnity against responsibility from loss, unless certain conditions are complied with; -- 16 of 19 -- 17 that the 8th section re-imposes their common-law liability under certain circumstances only, and that, in order to bring the plaintiff within that section, he must show that the felonious act was committed by an actual servant of the Company. In proceeding to put a construction up on this statute, I have allowed the fullest scope to Mr. Martin’s argument, and I thoroughly comprehend its force . I also perfectly agree that we have no right to make an act of Parliament; that it is only our duty to construe those that are made; and that we ought to consider, not what the legislature might have done, but what they have done: and with a perfect perception of the force of the argument derived from the expressions of Mr. Justice Littledale, in the case of Laugher v.; Pointer, I am still of the opinion that this rule ought to be discharged. And I think it ought to be discharged upon the general ground, which I prefer to any other, that there was an employment of Johnson by the Company, leaving out of consideration, for the present, all that relates to the holding him out as a servant of the Company. Taking it that the document in question proves that on the Company receiving this parcel in the country, it was the undertaking on their part to deliver it in London, I am of the opinion that Johnson was, within the meaning of the 8 th section of the act, a servant in their employ. A state of things perhaps altogether different from what existed at the time of the passing of the statute, has sprung up, in consequence of railroads having come more extensively into use; but the general object of the act was to give protection to carriers in respect of small parcels of great value placed under their care, without any notice of their value, thus compelling them to incur considerable risk with but little remuneration; and the legislature has effected this by requiring the value of such parcels to be declared, and an additional sum to be paid to the carrier by way of insuring their safe delivery; and nothing can be more just than such an enactment. In order, however, to guard the public against the consequences of effecting such insurance – for one consideration for the insurance is the disclosure to the carrier’s servants by such notice of the value of the goods to be transmitted – the legislature, whilst it says that the carrier shall not be liable unless the article sent be insured, goes on to provide that, whether it be insured or not, the carrier shall still be liable “to answer for loss or injury to any goods or articles whatsoever arising from the felonious acts of any coachman, guard, bookkeeper, porter, or other servant in his employ.” And I am of the opinion that this liability cannot be disposed of by the introduction of the term ‘agent’, or by giving a principal name to the employment of any one employed to discharge the duty undertaken by the carrier. In the case which was put in the course of the argument, where a carrier confines himself to receiving goods and making contracts for their carriage, and avails himself of a sub-contract to transfer to some one else the whole duty which he has undertaken to perform, I think that all the parties who come in under that subsequent contract, whether directly or by the sub-contract – I think that all the parties actually employed in doing the work which the carrier undertook to do, either by himself or by his servants, are his servants within the meaning of the 8th section of the act in -- 17 of 19 -- 18 question. I therefore think that, within the meaning of this section, Chaplin and Horne were the servants of the Company; they were employed by the company to take these goods from the railway station, and to deliver them in Bunhill-row; and that any persons whom Chaplin and Horne employ for the same purpose are also servants of the Company for that purpose, within the meaning of the act. Although the Company could not dismiss the partners, inasmuch as the contract was made between those parties and Chaplin and Horne, and not with the Company, yet substantially they were servants in the employ of the Company, as doing what the Company had engaged to do. On the general question, therefore, which turns upon the proper construction of the act of Parliament, seeing, as I do, that this Railway Company received these goods upon an undertaking to carry them, and to deliver them in Bunhill-row, I think that everything done with respect to the carriage of the goods is to be considered as done by the servants employed by the Company, and that the substitution of any other words, such as ‘agent” or “sub- contract”, cannot have the effect of taking them out of the meaning of the act.” Mr. Gynther claimed further support from the Privy Council decision in Port Jackson Stevedoring Pty Ltd v. Salmond & Spraggon (Aust) Pty Ltd (1980) 144 CLR 300, at 309 (and the decision of the High Court of Australia in the same case: (1978) 139 CLR 23). [22] His argument was broadened to bring in bailment cases more broadly. He cited Palmer on Bailment (2nd ) at 1346-1348. He also made particular reference to what Windeyer J said in Hobbs v. Petersham Transport Co Pty Ltd (1971) 124 CLR 220, at 242-43: “Although the Hobbs brothers were independent contractors, the defendant is, by well-established common law rules, liable for their negligence in relation to the carriage of the plaintiff’s goods. That is because the defendant impliedly promised the plaintiff that the goods would be carried to their destination with due care. If it procured someone else to perform the carriage for it, it became liable for his, the sub-contractor’s negligence: Doolan v. Midland railway Co. (1); John v. Bacon (2); Machu v. London and South-Western Railway Co (3). The rationale of this may be debatable. But I think that Professor Atiyah, who discussed it in his book Vicarious Liability in the Law of Torts (1967) (at pp. 361-362), rightly describes it as a form of vicarious liability. In Riverstone Meat Co Pty Ltd v. -- 18 of 19 -- 19 Lancashire Shipping Co Ltd (4) Lord Radcliffe spoke of it as ‘the carrier’s responsibility for the diligence of all those whom he employs to discharge his own primary duty’. I think therefore that the plaintiff would be entitled to recover damages from the defendant if it proved that the accident occurred by negligence for which the Hobbs brothers were responsible either because their vehicle was negligently driven, or because there had been negligence in maintaining it so that it was not in a serviceable condition. But to establish liability on the part of the defendant it would be necessary for the plaintiff to prove this negligence. The onus was on it. It could not found its case on the onus that a bailee has; for the defendant was not a bailee. It could claim that the fact that the vehicle ran off the road spoke for itself of negligence, and called for an explanation. But the explanation of the accident in a broken axle left it upon the plaintiff to prove that this was the result of negligence. The mere fact that the mechanism of a vehicle fails does not itself show that the owner or driver was negligent. No doubt a failure to maintain a vehicle in good order may in some cases amount to negligence.” [23] Again, if my interpretation of the Hague Rules is correct, the defence pleaded in para. 11.3.3 cannot succeed. It does not matter what control the defendant may have had over Crocodile Lines. For purposes of those Rules, Crocodile Lines was its servant or agent. Mr. Gynther is correct that it does not matter which. It may be noted that notwithstanding the apparent reference in para. 9 of the amended defence to a stevedore in Port Moresby, it is only against Crocodile Lines that the defendant has begun to prosecute any claim. It seems somewhat ironic that if it was the stevedore which was negligent or otherwise in breach of its duty, the defendant apparently contends that Crocodile Lines bears the responsibility! [24] Paragraph 11.3.3 should be struck out, along with para. 12A in the amended defence and the defendant should be ordered to pay the plaintiff’s costs of the application to be assessed. -- 19 of 19 --