Urai v Air Niugini [2008] PGDC 131; DC930 (16 December 2008)

DC930

PAPUA NEW GUINEA
[IN THE DISTRICT COURT OF JUSTICE SITTING IN ITS CIVIL JURISDICTION]

171 - 172 of 2008

BETWEEN

ROBSONSON URAI
Complainant

AND

AIR NIUGINI
1st Defendant

GUARD DOG SECURITY SERVICE LTD
2nd Defendant

Wewak:
2008: 15, 16 December

NEGLIGENCE – Duty of care for safe keeping of goods under carriage contract – consignment notes by Air Niugini – Conditions of carriage – exemption clauses – liability.

HELD: Under the conditions of carriage Air Niugini is liable for negligence through the second defendant’s omission in not providing adequate security resulting in the theft of complainant’s computer set.

2. However, Air Niugini’s liability is limited by virtue of clause 5 of the contract and s. 27 (2) of the Civil Aviation (Aircraft Operators' Liability) Act 1975 Ch. 292.

Cases Cited:
1. Rabaul Stevedores Ltd and PNG Harbours Board vs. Benedict and Nancy Seeto [1984] PNGLR 248.
2. Thompson vs. LM and S Railway Co. (1930) 2 KB 41
3. Hobbs vs. Petersham Transport Co. PTY LTD (1971) 124 CCR 220

Counsel:
In Person, For the Complainant
Nelson Kopunye, For the 1st Defendant
Nil Appearance, For the 2nd Defendant

15, 16 December 2008

DECISION

D Susame: This is a case where the Complainant suffered loss to his goods which were under the custody of Air Niugini Limited in its cargo shed at Boram Airport, Wewak. The case is also about those standard contracts of carriage and exemption clauses that exempts airlines and its employees and agents from liability for the loss of or damage to goods.

2. The complainant alleges that both defendants were negligence in not providing better security in his goods being stolen by thieves. Hence this is a claim under the law of tort of negligence.

3. Air Niugini (1st defendant) was represented by Bradshaw Lawyers, Guard Dog Security Services Limited (2nd Defendant) entered no appearance although their lawyer had indicated he would attend the proceedings. In any case since the case commenced on 25 June 2008 no defence, if any was filed by the second Defendant.

FACTS

4. Most of the facts are not in dispute. The complainant had consigned three separate boxes on 29 January 2008 destined for Wewak from Port Moresby.

5. Two of the boxes contained two computer sets and the third one contained mercury. The complainant flew into Wewak ahead of the consigned cargo. Except for the box of mercury, the computers were airlifted to Wewak on the 29 January 2008. The cargoes were kept in Air Niugini shed which thieves broke into and stole them on 01 February 2008.

6. The cargo shed is manned by Guards from Guard Dog Security firm contracted by Air Niugini to provide security services. At the material time stealing occurred one of the two guards assigned to the building was not present giving an ideal opportunity for thieves to force entry and remove the computer sets. After an unsuccessful attempt to settle the matter out of court between both defendants the complainant commenced this case.

ARGUMENTS

7. Complainant’s case in a nutshell is this. The consigned goods have already been airlifted to Wewak and kept in the cargo shed. The second defendant had been contracted by Air Niugini to provide security to the building. However, due to the negligence of the guard who was not at the assigned post the computers were stolen by thieves. Therefore, he blames the second defendant for the loss suffered.

8. The gist of first defendant’s case as I understand is this; The first defendant denies liability on this basis. Firstly, under the terms of contract of carriage between the complainant and Air Niugini, Air Niugini cannot be held liable for the loss of the complainant’s goods.

9. Conditions of carriage on the consignment note and in particular clauses 2 and 4 exempt Air Niugini from any liability for the loss of or damage to goods by any acts of negligence by Air Niugini’s employees and agents.

10. In support the counsel cites these authorities; Rabaul Stevedores Ltd and PNG Habours Board vs. Benedict and Nancy Seeto [1984] PNGLR 248, Thompson vs. LM and S. Railway Co. (1930) 2KB41, and Hobbs vs. Petersham Transport Co. Pty Ltd (1971) 124 CCR 220.

11. Even if Air Niugini is liable, its liability is limited to K300-00 for the loss by virtue of s.27 (2) of the Civil Aviation (Aircraft) Operators Liability Act. Ch. 292.

12. Secondly, the counsel argues that Air Niugini is entitled to be indemnified by the second defendant for the loss because of the guard’s failure not to be present at the cargo shed.

13. The Counsel was not able to assist the Court in making available copies of the cases cited and the statute he referred to except for the PNG case I was unable to sight the other two authorities and the Act due to inadequate reading material in District Court Library.

LAW

14. Generally, ‘negligence is a specific tort and in any given circumstances is the failure to exercise that care which the circumstances demand. It may consist in omitting to do something which ought to be done either in a different manner or not at all’. (See Halsbury Laws of England, 4th Edition, Vol. 34 on Negligence, page 3, paragraph 1). Law of negligence is concerned with duty to exercise care and failure to exercise that care which gives rise to the loss or injury to person or property of another person.

ISSUES

14-1. Are the defendant negligent for the loss of complainant’s computers?
14-2. If they are, what are their liabilities, if any?

CONTRACT OF CARRIAGE

15. Most contracts of carriage in the form of a consignment note issued by Air Niugini and perhaps other airlines are in a standard print out form with all its conditions. These conditions are more or less imposed on the owner of goods which they have no real opportunity of accepting or rejecting. The effect of this is that the owner of goods has to find another means to ship his goods or go by what is imposed and accept the risk of losing his goods and not compensated even though he has paid a huge freight charge.

16. The reverse side of the consignment note lists ten conditions of carriage. The conditions are very lengthy and complex for any ordinary person to read and understand. I will not go through in detail all the ten conditions. My discussions will be limited to the conditions which I think are relevant for this case.

17. Condition one (1) reads: For the purpose of these conditions - Air Niugini means the National Airline Commission of Papua New Guinea, its servants, agents, and employees and any person, firm or corporation with whom Air Niugini may have made arrangements pursuant to conditions 9 hereof.

18. Conditions nine (9) reads: Air Niugini may arrange with any other person to undertake the provision of any service affecting the cargo and enters into this contract for and on behalf of itself and such other person and their respective servants or agents all of whom shall have the benefit of this contract including condition 4. (Underlining mine for emphasis).

19. Conditions one (1) is a definition clause which defies Air Niugini. For the purposes of performing the contract, the definition covers and includes any person or firm, or corporation with whom Air Niugini has arranged to provide any other service affecting the cargo pursuant to condition 9 above.

20. The contract of carriage is between the complainant and Air Niugini. Guard Dog Security firm is not a party to that contract. Instead of employing its own guards, Air Niugini has contractual arrangements with Guard Dog Security firm to provide security services to safeguard cargo that is subject to the contract of carriage. As such the second defendant is covered and included under the definition clause. That as long as the cargo is under the custody of Air Niugini, Air Niugini including Guard Dog Security firm owes a duty of care to safeguard cargo under the contract of carriage until the owner signs and collects them.

21. It is very obvious that the duty of care defendants owed to the complainant for safe custody of his computer sets has been breached. Therefore, first defendant is guilty of negligence committed by the second defendant’s failure to provide adequate security to prevent theft of complainant’s computer sets.

22. The next question, can the defendants find relieve from any liability under the exemption clauses the learned counsel pointed out in his argument?

23. Interestingly, the learned counsel limited his arguments on clauses 2 and 4 which exempt not only the first defendant but all those other person mentioned in condition one (1) from any liability. The PNG case of PNG harbours Board v Benedict and Nancy Seeto (supra) counsel cited was about loss of goods under a bill of lading by sea. While the Court accepts that an exemption clause is enforceable at law and the carrier and its agents can find immunity from liability the conditions of carriage on the bill of lading in that case are different to this particular case. The conditions of carriage in the consignment note issued by the first defendant and which the complainant accepted are different.

24. Notwithstanding clauses 2 and 4, the consignment note also provides a clause limiting Air Niugini’s liability for loss of cargo that was consigned. That is found in clause 5 which the learned counsel made no mention of in his discussions.

25. Clause 5 states amongst other things that each package under the contract is insured free of charge for its actual value of K70-00 which ever is less against theft etc. for any damage the goods owner is required to lodge his claim in writing with Air Niugini within 3 days after cargo is delivered or within 60 days after the date of consignment note in respect for the loss.

26. Therefore the complainant is entitled to enforce clause 5 against the first defendant for the loss. Alternatively, he may resort to s. 27 (2) of the Act the counsel referred to which also limits the Airline’s liability.

27. What about the second defendant? Can it find protection under the terms of carriage from any liability?

28. The second defendant as I have said earlier is not a privy to the contract of carriage. It is a well established principle of the law of contract that only parties to the contract can benefit from the terms of the contract. One may argue therefore, it would be absorb for Guard Dog Security to find immunity from liability unde the exemption clause for its act of negligence. However, circumstances of this case are different. Even though the second defendant committed the negligent act, the first defendant in my view would be responsible to make good the loss. I hold this view in considering the definition in clause one (1) and nine (9) of the consignment note.

29. The conclusion reached from the discussions is that Air Niugini is liable to pay damages for the loss of complainant’s computers. Assessment of damage is reserved until submissions are heard.

__________________

For the Complainant, In Person
Nelson Kopunye for the 1st Defendant, Bradshaw Lawyers
For the 2nd Defendant, Nil Appearance