Rabaul Stevedores Ltd v Seeto [1984] PGNC 43; [1984] PNGLR 248; N483 (5 October 1984)

N483

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

RABAUL STEVEDORES LIMITED AND PAPUA NEW GUINEA HARBOURS BOARD

V

BENEDICT AND NANCY SEETO

Waigani
Bredmeyer J

13 September 1984
5 October 1984

NEGLIGENCE - Proof of - Res ipsa loquitur - Where multiple defendants - Where possibility of liability joint doctrine not applicable.

BAILMENT - Duties and liabilities - Negligence - Res ipsa loquitur - Not applicable where multiple defendants.

CARRIERS - Carriage of goods - Bill of lading - Exemption clause - Exemption extending to servants agents and sub-contractors - Stevedores performing services of contract of carriage protected.

CONTRACTS - Exemption clauses - Himalaya type clause - Carriage of goods - Bill of lading - Stevedores performing services of contract protected.

HARBOURS AND HARBOUR TRUSTS - Responsibility for storage of goods - By-law exempting liability for loss or damage - By-law exempting from liability as bailee and in negligence - Harbours Board By-Laws, by-law 212.

Held

(1) Where there are two parties possibly responsible for the negligent loss of or damage to goods the doctrine of res ipsa loquitur cannot be applied against both parties.

(2) Where a bill of lading for goods issued by a carrier contains a "Himalaya" clause exempting the carriers, sub-contractors servants and agents from negligence for breach of bailment, the exemption clause protects stevedores who may be engaged in the carrying out of the services provided for in the contract.

Adler v. Dickson [1954] EWCA Civ 3; [1955] 1 Q.B. 158; [1954] 3 All E.R. 397, followed.
The New Zealand Stevedoring Pty Ltd v. A. M. Satterthwaite & Co. Ltd [1974] UKPC 1; [1975] A.C. 154; [1974] 1 All E.R. 1051; and Port Jackson Stevedoring Pty Ltd v. Salmond & Spraggon (Australia) Pty Ltd, The New York Star [1981] 1 W.L.R. 138; [1980] 3 All E.R. 257, followed.

(3) By-law 212 of the Harbours Board by-laws which provides that "Stored goods remain in any shed or storage area at the risk of the owners, and the Board is not responsible for compensation for any loss or damage due to" fire, vermin, inevitable accident or a crime or misdemeanour, exempts the Harbour Board from liability as a bailee and also from negligence.

Cases Cited

Adler v Dickson [1954] EWCA Civ 3; [1955] 1 Q.B. 158; [1954] 3 All E.R. 397.
Port Jackson Stevedoring Pty Ltd v. Salmond & Spraggon (Australia) Pty Ltd, The New York Star [1981] 1 W.L.R. 138; [1980] 3 All E.R. 257.
The New Zealand Shipping Co. Ltd v. A. M. Satterthwaite & Co. Ltd [1974] UKPC 1; [1975] A.C. 154; [1974] 1 All E.R. 1015.
Wong Wuk Cheng & Ors v. P.N.G. Harbours Board (Unpublished judgment of Andrew J. of 19 December 1980).

Appeal

This was an appeal from a judgment of the District Court in proceedings in which the respondents had sued the appellants for the loss of goods which had been shipped from Singapore, unloaded by one appellant and stored in a shed under the control of the other appellant.

Counsel

D. Houseman, for P.N.G. Harbours Board.
K. Kara, for Rabaul Stevedores Ltd.
J. Steele, for the respondents.
Cur. adv. vult.

5 October 1984

BREDMEYER J: These two appeals have been lodged against a decision of the Rabaul District Court given on 27 June 1984. The Seetos were the consignees of some clothing and textiles from Singapore. The goods arrived in Rabaul on the M.V. Chengtu on 24 February 1983 and were unloaded by Rabaul Stevedores and then placed in a shed under the control of the Harbours Board. All the goods consigned were unloaded from the vessel. When the Seetos sent transport to collect the goods seven days later, one box was missing and one box was broken and half the contents missing. The value of the goods lost was K1,881.45. The Seetos sued the stevedores and the Harbours Board for breach of duty as bailee or alternatively for negligence. After a trial, at which all the parties were represented by counsel, the magistrate found both defendants liable and ordered them to pay K947.52 each to the plaintiff. Both the stevedores and the Harbours Board have appealed against the decision. Both appeals were heard together.

There was no evidence as to which defendant was liable for the loss. It could have been the stevedores or the Harbours Board, or both. The goods were packed in a container. The container was taken off the hook by the stevedores and taken to a Harbours Board shed. The container was then unpacked in the shed. Thereafter the goods were kept in the shed. Harbours Board had control of the shed and locked it up at night. During the day Harbours Board officials and stevedores had access to the shed, the latter as they transported goods to and from the shed. Stealing on the wharves is notorious and it would be reasonable, I think, to infer that the missing goods were stolen. But stolen by whom? They could have been stolen by the employees of the stevedore company or the Harbours Board, or partly by both, or by outsiders if the Board’s security was inadequate. The learned magistrate did not say whether the stevedores were liable in negligence or as bailee. He found the Harbours Board liable because their security was inadequate. He did not say why each defendant was liable for only half the damage. If both defendants are liable they should be jointly and severally liable for the whole of the damage but, of course, in enforcing the order, the plaintiff cannot recover his damages twice over.

On this appeal counsel for the respondents sought to justify the decision by resorting to the doctrine of res ipsa loquitur — the thing speaks for itself. A statement of the doctrine from Cross on Evidence (1st Aust. ed.,) at 159 is useful:

"Where the plaintiff suffers damage in consequence of one or more things which were under the exclusive control of the defendant or his servants getting out of control, reliance may be placed on the maxim res ipsa loquitur in lieu of further evidence of negligence."

I have emphasised the word exclusive. If there are two parties possibly responsible and if they are master and servant or say two vehicles owned by the one defendant, then the doctrine still applies, in the first case because the master is vicariously liable. If the two parties are strangers to one another then, as a matter of legal principle, the maxim cannot be used. Fleming, The Law of Torts (6th ed. 1983), discusses the doctrine of res ipsa loquitur against multiple defendants at 286-288. I quote:

"Multiple causation also presents persistent difficulties. Some of these flow from the requirement that there be proof, not only of negligence, but of ‘whose negligence?’ If it appears that either A or B was to blame, ordinarily the claim fails against both, unless they were ‘joint’ tortfeasors (being engaged in a common design) or one is for some reason responsible for the negligence of all. Hence, if a patient can establish no more than that there was negligence by either the surgeon or the nurse, he can recover against neither individually, though he may succeed against the hospital if both were on its staff, as it would then matter nothing which one was personally at fault.

Sympathy for plaintiffs has led to a slight relaxation of the general rule in two respects. First, in cases of head-on collisions near the centre of the road, it has been held legitimate to infer that in the absence of an explanation, both drivers were at fault, despite the additional (if remote) possibility that only one or the other was to blame. Indeed, even if the last possibility were not discounted, the plaintiff should still succeed, because the combined odds on the defendant being either solely or equally to blame should be sufficient for a standard of proof postulating only a balance of probabilities. Secondly, where two or more persons acted negligently, or intended to cause harm, to the plaintiff but there is no proof aside from the fact that his injury was caused by one of them alone. Canadian and American decisions cast the burden on each to exculpate himself, as when two hunters fired simultaneously but quite independently in the same direction and the plaintiff was hit by a single shot. Two reasons are offered for this result: first, it is fairer that the burden of identification be borne by the wrongdoers rather than their victim when it is their multiplicity alone which precludes the latter from identifying the responsible culprit. The law prefers a 50% chance of doing justice to the certainty of doing injustice. Second, a reversal in the burden of proof is justified whenever a defendant’s negligence has destroyed the plaintiffs ability to prove that it caused his injury. This rationale which is not limited to multiple defendants has been repeatedly applied in modern American decisions."

In this case the evidence did not point to who was responsible for causing the loss. The maxim res ipsa loquitur cannot apply against both defendants. The case does not fall within the two exceptions mentioned by Fleming. The appellant’s argument on this point succeeds and is sufficient to cause me to allow each appeal.

However the appellants raised other legal points which are of general importance and I propose to discuss them. The stevedores argue that even if negligence or breach of bailment had been proved against them, they were exempted from liability under cl. 5 of the bill of lading which purports to exempt the carrier’s sub-contractors, servants and agents from liability. The clause is known as a "Himalaya clause" and takes its name from the P. & O. vessel of that name, see Adler v. Dickson [1954] EWCA Civ 3; [1954] 3 All E.R. 397. That case was not a case concerning loss or damage to goods. It was a case of personal injuries; a passenger was injured when the gangway collapsed. Her ticket exempted the shipping company from all liability. She therefore sued the master and boatswain in negligence as a way of getting around the terms of the ticket. In considering whether the latter could take advantage of the exemption clause on the ticket, the Court of Appeal also considered the cases on carriage of goods at sea. At 400 Lord Denning said:

"[The cases] undoubtedly show that, when a carrier issues a bill of lading for goods, the exception clauses therein enure for the benefit, not only of the carrier himself, but also for the benefit of the shipowner, the master, the stevedores and any other persons who may be engaged in carrying out the services provided for by the contract."

He then went on to discuss the principle behind this proposition; how it was that a person not a party to the contract could benefit from it.

Mr Steele, counsel for the Seetos, argued that the stevedores were not a party to the contract which was basically between the shipper (and later holders of the bill) and the carrier. It is a powerful argument and in the first case I mention, two of the law lords in the Privy Council dissented on that basis, and in the second case I mention that argument held sway with the majority of the High Court of Australia, Barwick C.J. dissenting. The first case is The New Zealand Shipping Co. Ltd v. A. M. Satterthwaite & Co. Ltd [1974] UKPC 1; [1974] 1 All E.R. 1015. In that case an expensive drill was consigned from Liverpool to Wellington and damaged by the stevedores on unloading. The consignee, the holder of the bill of lading, sued the stevedores for negligence. The stevedores relied on a clause in the bill of lading similar to the one in the present case. It exempted the carrier’s servants, agents, and independent contractors from any liability. In a majority opinion read by Lord Wilberforce the Privy Council upheld the exemption clause as valid. I quote from the headnote and in doing so have substituted the word "stevedore" for "defendant" to make the meaning clearer.

"The exemption was designed to cover the whole carriage from loading to discharge by whomsoever it was performed; the performance attracted the exemption or immunity in favour of whoever the performer turned out to be. The bill of lading brought into existence a bargain, initially unilateral but capable of becoming mutual, between the consignor and the stevedore, made through the carrier as agent. That became a full contract when the stevedore performed services by discharging the goods, for the performance of those services for the benefit of the consignor was the consideration of the agreement by the consignor that the stevedore should have the benefit of the exemptions and immunities contained in the bill of lading."

The second case which followed that opinion was Port Jackson Stevedoring Pty Ltd v. Salmond & Spraggon (Australia) Pty Ltd The New York Star [1980] 3 All E.R. 257. In this case the Privy Council opinion was unanimous and was again read by Lord Wilberforce. Razor blades were consigned from Canada to Australia and the consignee was able to prove the stevedore’s negligence in delivering them to persons who had no right to collect them. The goods were not there when the consignee (the plaintiff) came to collect them. I quote from part of the headnote.

"Although there was room in each case for evidence as to the precise relationship of the carrier and the stevedore and the practice at the port of discharge, it was established law that in the normal situation involving the employment of a stevedore by a carrier, commercial practice required the stevedore to enjoy the benefit of contractual provisions in the bill of lading. Shippers, carriers and stevedores knew that such immunity was intended; and in principle a search for the factual ingredients required to confer the benefit was unnecessary. In the particular case agency had been found as a fact and according to established legal principles consideration had been provided by the stevedore."

These two authorities are not strictly "English" authorities in the sense that they come from the English Court of Appeal or House of Lords, and the latter case is post-Independence, nevertheless they probably accurately represent the English common law pre-Independence. They also represent the law in Australia and New Zealand and in other parts of the British Commonwealth which still retains the Privy Council. In so far as there is seldom any divergence between the Privy Council and the English House of Lords (and in these two cases all five members of the Privy Council were members of the House of Lords) they represent the law in the British Commonwealth. I believe that that law is applicable and appropriate to the circumstances of Papua New Guinea and that we would be very foolish indeed not to follow it. I consider that this argument succeeds and further justifies allowing the appeal lodged by the stevedores.

The Harbours Board in its appeal claims a statutory exemption under by-law 212 of the Harbours Board by-laws which reads:

"212. Responsibility for stored goods

Stored goods remain in any shed or storage area at the risk of the owners, and the Board is not responsible for compensation for any loss or damage due to:

(a) fire; or

(b) vermin; or

(c) inevitable accident; or

(d) a crime or misdemeanour."

I am willing to infer that the missing goods in this case were stolen. Stealing is notorious on the wharf and the fact that one carton or box was open but half the contents missing suggests theft rather than anything else. Theft comes under category (d) — a crime or misdemeanour. I consider that this clause means what it says and that in particular the words "is not responsible for compensation for any loss or damage" exempts the Board from liability as a bailee and also from negligence. It is a by-law and hence overrides the common law. Andrew J. came to the same conclusion in Wong Wuk Cheng & Ors v. P.N.G. Harbours Board (Unpublished judgment of Andrew J. of 19 December 1980).

I would allow each appeal, quash the magistrate’s decision and order that the costs of this appeal and in the District Court be awarded to each appellant against the respondents.

Appeals allowed.

________________________________

Lawyer for P.N.G. Harbours Board: K. Y. Kara.
Lawyer for Rabaul Stevedores Ltd: D. Houseman.
Lawyer for the respondents: Warner Shand, Wilson & Associates.