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High Court of Australia Transcripts |
Last Updated: 5 September 2003
IN THE HIGH COURT OF AUSTRALIA
Office of the
Registry
Sydney No S158 of 2003
B e t w e e n -
SIEMENS LTD
Appellant
and
SCHENKER INTERNATIONAL (AUSTRALIA) PTY LTD
First Respondent
SCHENKER INTERNATIONAL DEUTSCHLAND GMBH
Second Respondent
McHUGH ACJ
GUMMOW J
KIRBY
J
CALLINAN J
HEYDON J
TRANSCRIPT
OF PROCEEDINGS
AT CANBERRA ON THURSDAY, 4 SEPTEMBER 2003, AT 10.16 AM
Copyright in the High Court of Australia
__________________
MR P.H. GREENWOOD SC: May it please the Court, I
appear with my learned friend, MR I.G.B. ROBERTS, for
the appellant. (instructed by O’Reilly Sever & Co)
MR A.J. MEAGHER, SC: If the Court pleases, I appear with MR R.J.H. DARKE, SC for the respondents. (instructed by Blake Dawson Waldron)
McHUGH ACJ: Yes, Mr Greenwood.
MR GREENWOOD: Your Honours, the propositions for which we contend can be simply summarised in this way. The parties entered into a contract of a carriage - - -
GUMMOW J: Well, you say that.
MR GREENWOOD: It involved some carriage by air - - -
GUMMOW J: Who are the parties to the contract? Was the contract wholly in writing or partly in writing?
MR GREENWOOD: Your Honour, the relevant parties to the contract were the second respondent and the appellant, a contract that was entered - - -
GUMMOW J: Is that right? Did not the trial judge find it was quadripartite?
MR GREENWOOD: His Honour found that the first respondent, Schenker (Australia) became party to it by reason of the contemplation that Schenker (Australia) would be undertaking the road carriage part of the carriage.
GUMMOW J: Yes. All I am saying to you is it may be a mistake from your point of view to jump immediately into this waybill. We need to know where the waybill stands in relation to the contract.
MR GREENWOOD: Indeed, and that is a critical aspect in relation to the case we submit, on the basis that the proposition was that there would be different segments of carriage – carriage by air and carriage by road – and that the air waybill only related to the carriage by air and that carriage within the air waybill, wherever it appears, is referring to air carriage. If your Honours go to the - - -
KIRBY J: Can you explain to me how the air waybill relates to the Richtungsverkehr.
GUMMOW J: That is what I was trying to encourage you to explain to us.
MR GREENWOOD: I am sorry, I did not understand your Honour. The overall agreement between the parties for the overall carriage was the Richtungsverkehr which provided for direct traffic between these two companies to go from wherever it was submitted in Germany to wherever it was to go around the world.
KIRBY J: So that was an overarching agreement between them?
MR GREENWOOD: Yes.
KIRBY J: And the air waybill, on your construction, only applied to the air carriage?
MR GREENWOOD: Correct, which nominates a - - -
KIRBY J: Which itself was not as Justice Meagher described it, as I understand it. Singapore Airlines merely picked it up at Frankfurt Airport. Somebody else got it from Tegel to Frankfurt - - -
MR GREENWOOD: Your Honour, the finding in the evidence is only to the effect that it went from Tegel Airport to Melbourne Airport by Singapore Airlines. I am aware of the fact that the master air waybill - - -
KIRBY J: Tegel is a very small pre-war airport. I have been to it. I do not think Singapore Airlines flies to Tegel. Singapore Airlines is an intercontinental carrier.
MR GREENWOOD: Your Honour, we have the air waybill and I have provided for your Honours in a plastic sleeve, to make it more convenient, a separate copy of page 144 which is the front page of the air waybill and copied on the back and highlighted are some of the parts that we will need to go to. But your Honours will see that the airport of departure is nominated on the front page as being Berlin-Tegel.
KIRBY J: Maybe Singapore Airlines does fly to Tegel following the fall of the Berlin Wall. I do not know. Anyway, maybe it does not matter.
GUMMOW J: I think they fly to an East German airport - - -
MR GREENWOOD: I do not think it does matter, but the evidence such as it is, reveals that this carriage was to go from Tegel to Melbourne Airport by only one carrier, SQ, being the IATA Code for Singapore Airlines.
KIRBY J: Maybe we should use the non-politically correct term “aerodrome”.
MR GREENWOOD: Yes, well I must say Justice Meagher’s comment in that respect eluded me.
KIRBY J: But it is the word in the Convention apparently. That is how they translated the French word, I suppose.
MR GREENWOOD: And just while your Honour has mentioned that, there are a number of different words that are used in different versions of the English text and I will have to address that at some stage.
KIRBY J: Which is the authentic text?
MR GREENWOOD: The French. So, your Honours, there is that bit of evidence in terms of just dealing with this particular aspect. There is also one other piece of evidence that was before his Honour which is an attachment - - -
GUMMOW J: So what is the answer to my question? What was the contract?
MR GREENWOOD: The contract was the overall agreement between Schenker Germany and the appellant for the goods to be conveyed from Tegel Airport through to the bonded warehouse pursuant to the Richtungsverkehr, in which part of that was to be carried out by Schenker (Australia).
GUMMOW J: Yes.
McHUGH ACJ: Does the evidence explain what was the nature of this general contract? It is understandable in terms of an arrangement, but supposing Schenker refused to take a particular consignment; would it have been in breach of the head agreement? Some terms are loosely used here, but what is the consideration? Is the consideration given by the carrier each time the carrier accepts something, or is there some binding obligation on the parties over and above what happens with some individual contract?
MR GREENWOOD: The evidence – and I will take your Honours to it – was that there was this standing arrangement - - -
McHUGH ACJ: I know they use the term “arrangement”, but what does that mean?
MR GREENWOOD: The way it was put in the evidence was that to the extent that Siemens wished something to be delivered, they could ring up and say, “We want this to be taken today and delivered to there”, and the rate and the dates when it would be carried were all set and there was nothing else to be talked about because there was this standing arrangement that it would be done by Schenker pursuant to those instructions.
KIRBY J: It went back to the 19th century, according to Justice Meagher, the arrangements between them.
MR GREENWOOD: Yes. Can I take your Honours to Justice Barrett’s findings.
GUMMOW J: Paragraph 26 of his reasons.
MR GREENWOOD: Yes. I was going to take your Honours to 407, paragraph 27, where it describes the contractual framework.
KIRBY J: Is this the part Justice Meagher could not understand?
MR GREENWOOD: No. This refers to it going back to - - -
KIRBY J: I hope we can explain this in the course of our reasons.
MR GREENWOOD: - - - the
19th century and refers to the 1991 negotiations producing:
a new agreed basis for the carriage of goods by the Schenker Group for the Siemens Group between Germany and Australia. This was revised periodically by further negotiations.
McHUGH ACJ: In practical commercial operations, these so-called contractual frameworks often amount to no more than statements of intent which do not have any binding legal effect until something is done. What is the arrangement here? To go back to the illustration I first gave, supposing Schenker refused to carry something. Would they be in breach of their obligation?
MR GREENWOOD: Yes, your Honour. The transcript - - -
GUMMOW J: You have to take us to paragraph 28 of the trial judge, do you not? There is a finding.
MR GREENWOOD: Paragraph 28, Justice Barrett refers to the fact that pursuant to the “Richtungsverkehr” there was contractual obligation “in relation to each individual consignment” and, your Honours, that is borne out - - -
GUMMOW J: He said its terms “supplemented those of the standing arrangement”, a “waybill” supplemented it.
MR GREENWOOD: Yes.
GUMMOW J: He said that was not controversial.
McHUGH ACJ: As opposed to incorporating. One can have an arrangement where in a general way people say, “Now, if we contract, our contract is going to incorporate these various terms”, just the same as you go into a hotel and there are a list of conditions. They become part of the contract.
MR GREENWOOD: Yes.
McHUGH ACJ: Now, is that what was meant? Apparently, not.
MR
GREENWOOD: No, what is intended, and perhaps it is easiest to go to the
relevant letter of 17 January 1991 which is at appeal book page 71.
His Honour has referred to the January 1991 negotiations and in this letter
what your Honours see is a part of the communications
that is going between the
parties about the rates that have been negotiated and this letter indicates some
complaints about being
chiselled down in terms of the price that was going to be
charged. At the bottom of the page your Honours will see a statement of
the 11
different elements that comprise the Richtungsverkehr obligations from:
Receipt, handling and despatch –
of the goods –
Transport to Frankfurt.
Consolidation . . .
Transit to customs controlled warehouse.
Break bulk –
and the status reports. If I can take your Honours from that to page 102, 5 May 1994.
KIRBY J: Which page is this?
MR GREENWOOD: Page 102, and in the third paragraph
reference to explaining and reinforcing:
the policy of Schenker to maintain the viability of the Siemens “Richtungsverkehr” by maintaining a traffic freeway for both companies, into which the stream of Siemens shipments can flow and everybody maintaining the freeway knows how to efficiently keep the flow going.
Enclosed there is an extract of previous
correspondence, which is at page 104, and your Honours will see that
the Richtungsverkehr
is described as having:
as its first and foremost criteria, an absolute guarantee of uplift –
and the rate that is struck, which is a
flat rate from wherever it may come in Germany, is on a compromise
basis.
McHUGH ACJ: It may be that it operates in two ways, that the direct traffic agreement itself creates contractual obligations and at the same time provides terms for individual contracts. Take Coles and their carriers, Linfox Transport, in that case there is probably an overriding agreement that they will carry goods binding on it.
MR GREENWOOD: And then for a specific delivery, an individual consignment, which says this one is to go from here to there and any special conditions would be attached to that and supplement the existing overarching agreement, and that is how we see the waybill as fitting into this arrangement. There is the overall agreement where certain things are to be done, including transit from the airport to the customs warehouse, deconsolidation, storing the goods for free pursuant to the Richtungsverkehr.
GUMMOW J: What does deconsolidation mean?
MR GREENWOOD: In situations where the goods have been packaged with others, just breaking them up and identifying the individual consignees.
KIRBY J: Does the Federal Republic of Germany have a law like the Civil Aviation (Carriers’ Liability) Act that brings the international Convention into force in Germany or for German contracts?
MR GREENWOOD: I do not know. Germany is certainly one of the high contracting parties to the Convention.
KIRBY J: It is a high contracting party, I know. Maybe they have a different principle of incorporating conventions by their own force. Some civil law countries have that principle.
MR GREENWOOD: Yes, I am not sure.
McHUGH ACJ: Well, the same for the United States. Is it not the fact that if the President signs a treaty it becomes part of the law in the United States? I am not sure, I think it is.
MR
GREENWOOD: Coming back to the Richtungsverkehr, the other piece of
evidence that bears on this is at appeal book 45. There is some transcript
which just indicates the way in which it worked. At line 45:
Let us assume that Siemens in Germany was required to send goods at its own expense to Australia, to Melbourne.
GUMMOW J: Who was Mr Barnard?
MR GREENWOOD:
Mr Barnard was a Schenker (Australia) representative. It is put as:
a consignment that I want you to take to Melbourne on the terms that we have already agreed would be in place and at the rate we have agreed”. Isn’t that the case?
And the witness agrees that that is how it would work. It is
perhaps more clearly set out on page 46, line 14:
I would be able to ring Schenker Germany and say, “Here is a consignment. You have agreed to perform a certain service. We have an agreed rate”, and you would carry out that service, would you not?
A. Yes, we would.
KIRBY J: I wonder why they did not sue in Germany for this breach of contract as they assert.
MR GREENWOOD: Why Siemens Australia did not sue in Germany?
KIRBY J: The original transhipment was first Siemens Germany, was it not?
MR GREENWOOD: No, once it got to Tegel Airport, the title and risk passed to Siemens Ltd Australian entity.
KIRBY J: I see.
MR GREENWOOD: Your Honours can see at page 105 of the appeal book the rates that operated shipments to Melbourne and Sydney. Your Honours will see the first column relates to the Siemens Richtungsverkehr Schenker System 1000 when there are other different rates for different systems, the Richtungsverkehr not having any minimum amount of cargo to be taken, a flat rate for the fee and that increases after this rate sheet and departure days on certain days of the week, only certain carriers to be used, Qantas, Lufthansa and Singapore Airlines, whereas the other services, which are cheaper, have different conditions applying to it.
The more current rate sheet is at page 126 and your Honours can see there again, Melbourne and Sydney, the next column the reference to “Siemens-Richtungsverkehr” and, again, the three carriers, “System 1000”, “ohne Minimum” – no minimum – and a flat rate of “5,05 DM”.
KIRBY J: What is the significance of this?
MR GREENWOOD: In terms of seeing that there is this arrangement that runs through, of general application, overarching agreement providing for this kind of carriage, namely Singapore Airlines.
GUMMOW J: But with no exclusion clause.
MR GREENWOOD: Correct. Now, your Honours, I will come back to that point in just a moment. Before I leave this though could I take your Honours to page 47 of the first appeal book, which refers to the fact that there are a number of different air waybills that can be used, and at line 25 - - -
McHUGH ACJ: What page is this, Mr Greenwood?
MR GREENWOOD: Page 47, “a number of
different air waybills that are standard forms”, line 25. And then the
witness is taken to the
FIATA guidelines that I will take your Honours to
later, and at the bottom of that page that document is referred to as:
something that you would have regard to or your staff would have regard to when they came to choose between different airway bills for different types of consignments and carriages -
If your Honours would
then go over to page 51 your Honours will see that Mr Barnard refers to the
people who would actually be responsible
within Schenker, and Mr Barnard is the
general manager. He says at line 25:
A. It would be an air export operator. So it wouldn’t be a junior staff member or an apprentice. It would be a qualified air export - - -
KIRBY J: What is the significance of that?
MR
GREENWOOD: So there is a deliberate thoughtful process involved in terms
of selecting the particular air waybill and presumably completing
it. At line
30 Mr Barnard says that that person would have:
sufficient understanding of the industry to know what document was appropriate in what circumstances –
Now I mention that because some of the cases involve different types of air waybills, and there is a significant distinction between them that becomes apparent, and a qualified air export operator was involved for Schenker in relation to these air waybills.
Now, your Honour Justice Gummow referred to exclusion terms. Could I take your Honours please to page 161 of the appeal book because it bears on that matter. At 161 it just has the letterhead of Schenker International and on the next page Schenker’s Trading Conditions. It is difficult to read but your Honours will see clause 14 - - -
CALLINAN J: Page 161 did you say? I am sorry.
MR GREENWOOD:
Clause 14(a) provides:
It is hereby agreed by and between the Consignor and the Company that any liability of the Company on whatsoever ground arising shall in every case be limited in amount to the sum of $20 in respect of all the goods listed in these forwarding instructions whether or not there has been any declaration of value of the goods or of any of them by the Consignor for the purposes of carriage or otherwise.
That clause was pleaded in the defence, and your Honours can see it at page 9 of the appeal books, but abandoned at the hearing.
GUMMOW J: What about the Himalaya point; has that gone too?
MR GREENWOOD: Yes, your Honour. So the fact is – and I will return to this later – the conditions of contract of Schenker were not incorporated into this Richtungsverkehr – that is not part of their case – but they easily could have been if that had been the intention of the parties.
CALLINAN J: Is that a Codelfa-type point, is it?
MR GREENWOOD: Yes.
CALLINAN J: We look to see something that was at one stage the subject of negotiations because otherwise that clause would never have been formulated but, because there was no attempt to incorporate it, any provision to that effect should be regarded as negative.
MR GREENWOOD: Yes. Similarly, when one looks to try and say the air waybill should govern the whole of the carriage, not just the air carriage, one needs to see some intent that that was what the parties were wanting to do.
GUMMOW J: That is what the appeal is all about really, is it not?
MR GREENWOOD: In many ways. That is the first threshold point and it was a finding that was made by Justice Barrett that was not dealt with expressly by the Court of Appeal at all. Implicit in the respondents’ submissions is the argument that it was the intention of the parties, notwithstanding what appears on the face of the air waybill, for the air waybill to operate beyond the airport of destination nominated as the place for delivery in the air waybill.
GUMMOW J: You say there was a finding by the primary judge?
MR GREENWOOD: Yes, your Honour.
McHUGH ACJ: He said it was not a matter of segments.
MR GREENWOOD:
Yes. That starts at page 410 of Justice Barrett’s judgment at
line 36, the bottom paragraph:
A fundamental question posed by the circumstances of this case is as to the point at which the carriage referred to in the air waybill concluded . . . The determinant is, rather, the usual one in contract construction cases of the parties’ intention objectively manifested. In discovering that intention, it must be borne in mind that the air waybill was created and employed in the context of the wider “Richtungsverkehr” arrangements which had resulted from the 1991 negotiations and subsequent revisions.
It is a little further on in that passage that his Honour
refers to the binding nature on all four companies. His Honour in the middle
of
411 says:
I also entertain no doubt that, according to the understandings at the root of the contractual relationship, it was foreseen that Schenker GmbH and Schenker Australia would together provide all services required –
and this next passage is important –
with Schenker GmbH being responsible for the elements commencing at the German airport and ending upon unloading of the aircraft in Australia and with Schenker Australia then having responsibility for the elements from the aircraft unloading point to, at the least, customs clearance –
That very notion of handover from one to the other is precisely consistent with the notion of the air waybill terminating with delivery being effected by Singapore Airlines, delivery being effected by Schenker Germany pursuant to the air waybill at the airport of destination.
GUMMOW J: That letter referred to of 17 January is the one at appeal book 71?
MR GREENWOOD: Yes, your Honour, on the bottom of 411. Then on the next page, the reference to the letter of 5 May 1994 is appeal book 102 that I took your Honours to.
GUMMOW J: Thank you.
McHUGH ACJ: It may not be quite accurate, but in one sense what the Court of Appeal had done is to regard the waybill as almost exclusively concerned with the dealings of the parties in relation to this whole arrangement.
MR GREENWOOD: Yes. There is a complete conflation of the terms of the air waybill and the terms of the Richtungsverkehr and it happens within sentences and within paragraphs of Justice Meagher and Justice Sheller’s judgments where they start referring to the air waybill in the beginning of the sentence and then at the end of the sentence they are clearly referring to the Richtungsverkehr.
GUMMOW J: Can you give us an example of that?
MR GREENWOOD: In
Justice Meagher’s judgment commencing at page 442
his Honour makes such a conflation on 445. To go back and follow
his
Honour through, at 444 his Honour in paragraph 5 at the end
refers to the fact that it is necessary:
to appreciate . . . two factors: the airway bill itself and the Richtungsverkehr between the parties.
His Honour refers to the “airway bill” which should be an “air waybill” and then - - -
KIRBY J: That means nothing. It could be just a typist’s mistake.
MR GREENWOOD: No.
McHUGH ACJ: What you say becomes very
clear, does it not, in the last sentence on 445 at line 30 where
his Honour says:
In particular, I cannot see how the contract could be construed as one which involved Australian Schenker in no duties at all once the goods arrived at Tullamarine airport -
This overlooks the fact that the head agreement has obligations, as far as they are concerned.
MR GREENWOOD: I thought
his Honour was dealing with a different point, but further in that
paragraph it becomes obvious in the third sentence.
His Honour is
referring to the waybill and he says:
In clause 11 it –
that must be the waybill –
provides for delivery to be made at the place of destination to or in accordance with the instructions of the consignee.
Correct. But, now:
The place of destination was Melbourne –
under the waybill it was Melbourne Airport –
and delivery was to be made to the respondent at the Australian Schenker’s warehouse.
No, not under the air waybill, under the contract. Then he goes
back to the air waybill and says:
By clause 4 –
and that should be a reference to
clause 9 –
the carrier remained liable for the goods –
and that is back to the waybill. So, within the paragraph, talking about the provisions of the air waybill, his Honour has moved to talking about the overall contract for carriage.
KIRBY J: In answer to questions you have jumped ahead to criticise what Justice Meagher said, but I still do not have entirely clear in my own mind what your theory of the case is which will make it easier for us to criticise or support. I would like to know exactly what you say is the relationship between the Richtungsverkehr and how the waybill kicks in at a certain point.
MR GREENWOOD: The Richtungsverkehr provides for the overall agreement between the parties for individual consignments. The air waybill provides additional contractual provisions that relate only to the air carriage of that individual consignment.
KIRBY J: Can you contract out of the – can you supplement the waybill and derogate from it by private arrangements between the parties during the air carriage? In other words, I would like to understand how the two interrelate. Is the position that in respect of the air carriage German law kicks in and controls it in terms of the Convention?
MR GREENWOOD: The Convention, according to Australian law, governs the parties.
KIRBY J: Why would Australian law attach to an air passage which begins at Tegel Airport, goes through Frankfurt am Main and - - -
MR GREENWOOD: It is a contract between Siemens Ltd Australia and Schenker Germany that relates to the carriage of goods to Australia, the Warsaw Convention operating in relation to that international carriage by air. I do not want to leave this point with your Honour uncertain about what the proposition is that we are seeking to make good, and that is very simply that there is this overall arrangement and the waybill is but a small part of it.
McHUGH ACJ: The waybill is itself a private contractual arrangement, is it not?
MR GREENWOOD: It provides evidence of the contract between the parties, yes.
McHUGH ACJ: Yes.
KIRBY J: I remember reading that the legislation, and I think also the Convention, were being the subject of negotiations for amendment quite recently, in the last two years. Do you know if anything happened? Is the statute that is referred to here, has that been supervened by subsequent legislation in Australia?
MR GREENWOOD: Not that is relevant to this case, your Honour, no, and I am not aware otherwise.
KIRBY J: If there has been any change in the statute or the Convention I would like to know it because I have a clear recollection a discussion paper was issued by the relevant federal department in Australia about the change of it. It is not relevant to this case but if the law has changed we would have to mention it.
MR GREENWOOD: That may have been in relation to the limits that are imposed in terms of dollar limits and the way in which they are calculated.
KIRBY J: I think it was mainly in relation to passengers.
MR GREENWOOD: Can I take your Honours to the legal framework that relates to carriers’ liability and the Civil Aviation (Carriers’ Liability) Act 1959. Your Honours will see that the Act is divided into various types; Part II relating to carriage to which the Warsaw Convention and the Hague Protocol apply, and other parts relating to other aspects of the Warsaw Convention.
We need not trouble your Honours with the other parts
particularly because it is acknowledged on all sides and throughout that the
relevant convention that governed this air carriage was the Warsaw Convention,
as amended at The Hague 1955, but your Honours will
see that that comes
into Australian law in section 11. I am sorry, if your Honours did
not have the Act, the Act is with the respondent’s bundle in the
respondent’s folder
of materials. Section 11 provides for:
The provisions of the Convention have . . . the force of law in Australia in relation to any carriage by air to which the Convention applies, irrespective of the nationality of the aircraft –
The Warsaw Convention, as amended at
The Hague 1955, is Schedule 2 to the Act, whereas the original Warsaw
Convention of 1929 is Schedule
1 and can I ask your Honours to turn to
each of them and I wanted to go through them but indicate to your Honours
the similarity
between the two for this reason.
These standard form air waybills are designed to cover carriage by air, whether it be governed by the Warsaw Convention 1929 or the Warsaw Convention as amended at The Hague 1955 or non-Warsaw Convention travel.
McHUGH ACJ: I think in your submissions you refer to the Samuel Montagu Case, do you not, in support of that? Is there a statement to that effect in that case?
MR GREENWOOD: Yes, your Honour.
McHUGH ACJ: I think it is at 327, the passage.
MR GREENWOOD: There is a passage of Lord Justice Salmon at the bottom of page 327, left-hand side.
GUMMOW J: What is the citation?
McHUGH ACJ: [1966] 1 Lloyd’s Reports.
MR GREENWOOD: It is behind guide
card 6 in the materials and I will provide other authority for the same
proposition but this is as at 1966:
The form of the waybill in this case was settled by the International Air Transport Association and is in use, as I understand it, in most countries of the world as a dual purpose form of waybill which is equally applicable for international and non-international carriage.
And I will take
your Honours to the meaning of “international carriage” under
the Conventions. Lord Denning, also Master
of Rolls, refers to that point. I
will come back to that later.
KIRBY J: Lord Justice Salmon embraces the concept which is, one would think, incontestable that it is desirable that the constructions be consistent with those in other countries. Justice Meagher certainly thought that the construction for which you urge would render a number of decisions - or Justice Barrett’s opinion would render a number of decisions incorrect. We have to deal with that.
MR GREENWOOD: Yes, I will be taking your Honours to those. We submit that is not the case. Rather, the very notion of uniformity and certainty is of critical importance in a situation such as this.
KIRBY J: You accept that principle, of course.
MR GREENWOOD: Absolutely, we embrace it. It has been also reiterated in a number of the cases I will be taking your Honour to, including New South Wales Court of Appeal.
KIRBY J: So I suppose our first step is to form our own view on the contractual arrangements and the meaning and operation of the waybill and then to look at international authority on it to see whether our own view is consistent with that. If it is, there is no problem. If it is not, then we have to struggle to find some appropriate way to resolve that difference.
MR GREENWOOD: Our submission is there is no international authority directly on point. The case it referred to, I will take your Honour to it.
KIRBY J: You say that, but a quick reading of the materials referred to by Justice Sheller seems to suggest the contrary, but no doubt - - -
MR GREENWOOD: I will deal with that.
McHUGH ACJ: Lord Justice Salmon referred to Seth’s Case in the United States as coming to the same conclusion. Is that - - -
MR GREENWOOD: That is just in relation to the interpretation of clause 2.1 as governing, on the one hand, international carriage pursuant to the Convention and also non-international carriage.
McHUGH ACJ: Judge Charles Wyzanski is a highly respected United States federal judge.
GUMMOW J: That is right.
McHUGH ACJ: Is his judgment on the list, is Seth’s - - -]
MR GREENWOOD: It is not.
GUMMOW J: It should be.
MR GREENWOOD: Your Honour, that point is - - -
GUMMOW J: I do not know why we are so Anglocentric in these matters?
MR
GREENWOOD: It was not on the list simply because that point is not in
contention. It is accepted on all sides that 2.1 has that operation.
Your Honours, I was going back to the Schedule 1 and Schedule 2.
Before I do, could I just draw your Honours’ attention to
section 8, though, of the Civil Aviation (Carriers’ Liability)
Act which refers to the texts of the Conventions because I mentioned earlier
there is some difference in wording from time to time between
the different
English versions of the Conventions. For example, the American version refers
to “transportation by air”,
whereas our version refers to
“carriage by air”. There is nothing in it, in our submission.
However, it explains why
there are some differences sometimes between what
appears in the cases and what appears in the schedule here. Your Honours
will
see that under Australian law:
the text of a Convention specified in any of the following paragraphs is taken to be the text set out in the Schedule - - -
KIRBY J: So we do not have to worry about all these variations in translating “aéroport” as airport or aerodrome?
MR GREENWOOD: Well, unless there is an inconsistency between the English and the French and then one goes one goes to section 8(2) and one goes back to prefer the French.
KIRBY J: I see. But that does not seem to arise in this case?
MR GREENWOOD: No.
MR GREENWOOD: If I could then start with
Schedule 2, Article 1, your Honours will see that:
This Convention –
this is the Warsaw Convention as amended at The Hague
–
applies to all international carriage of persons, baggage or cargo performed by aircraft for reward.
The same wording is adopted - - -
KIRBY J: What is the stake in this case? On your contention, how much is recoverable? It is 72,000-odd if the Convention applies - - -
MR GREENWOOD: Yes, it is 1.6 million I think.
KIRBY J: 6 million? So there is quite a lot - - -
MR GREENWOOD: 1.6.
KIRBY J: 1.6, I see. Thank you.
MR GREENWOOD: Article 1.2 defines
“international carriage” as meaning:
any carriage in which, according to the agreement between the parties, the place of the departure and the place of destination, whether or not there be a break in the carriage or a transhipment, are situated either within the territories of two High Contracting Parties -
and we do not need to read further because that covers this
case. It deals with other situations where it occurs:
within the territory of a single High Contracting Party, if there is an agreed stopping place within a territory -
of another State. Then paragraph 3 of Article 1 refers
to:
Carriage to be performed by several successive air carriers is deemed . . . to be one undivided carriage, if it has been regarded by the parties as a single operation -
The particular significance of Article 1 paragraphs 2 and 3 is that there is reference to the agreement between the parties in each of them. That is an important focus of the Convention, not relating merely to flights or journeys, but rather the agreement for carriage between the parties. The notion of international carriage, or referring to carriage by air, incorporates the possibility of there being other carriage as well - - -
GUMMOW J: You get that from Article 1.1, do you not, which is really the starting place? It has to be “performed by aircraft for reward”.
MR GREENWOOD: Yes.
GUMMOW J: It is carriage performed by aircraft - - -
MR GREENWOOD: The Convention applies to “international carriage . . . performed by aircraft for reward” and “international carriage” means any carriage which involves - - -
GUMMOW J: All I am trying to explain to you is 1.2 does not use the word “aircraft”. It does not have to, because it is clear by 1 that the international carriage has to be “by aircraft for reward”.
MR GREENWOOD: I understand what your Honour says but there is reference - - -
GUMMOW J: It seems to me to favour you at the moment.
MR GREENWOOD: Yes. Well, I did not want to grab too quickly on it, your Honour, because there is a downside to it as well that incorporates other things such as transhipment, and that is set out in Article 1.2. The Warsaw Convention, if your Honours can just flip back to look at Article 1 of the Warsaw Convention 1929, is in substantially similar terms and I do not need to go through it. With each of these articles I will just ask your Honours to refer back and see how the two work together because the air waybill sometimes has to deal with things that are in one Convention and not in the other.
Then your Honours will
see that Article 3 provides for the passenger ticket, the documents of carriage
relating to passengers, and
3.1(a) requires an indication of the places of
departure and destination. Article 4 relates to the baggage check and,
again, requires
an indication of the places of departure and destination. Then
Article 5 is in the section relating to air waybills. The Convention
provides
that:
1. Every carrier of cargo has the right to require the consignor to make out and hand over to him a document called an “air waybill . . .
2. The absence, irregularity or loss of this document does not affect the existence or the validity of the contract of carriage -
Article 6 provides the mechanisms, or the mechanics in terms of
the three copies being handed over, and Article 7 provides for the
carrier of
cargo to require the consignor to make out separate air waybills if there is
more than one package. Now, Article 8 in
the amended Convention specifies what
the air waybill must contain. Again, firstly:
an indication of places of departure and destination;
. . . agreed stopping places –
if there are any, and:
a notice to the consignor to the effect that, if the carriage involves an ultimate destination or stop in a country other than the country of departure, the Warsaw Convention may be applicable –
with limits of liability. If your Honours would contrast
that with Article 8 of the unamended Convention, the original Convention,
your Honours will see that the original Convention provides for the air
waybill to contain a lot of particulars and, significantly
for later on, Article
8(q):
a statement that the carriage is subject to the rules relating to liability established by this Convention.
KIRBY J: So what do you make out of that? That is not in the new Article 8.
MR GREENWOOD: It explains why clause
2.1 in the air waybill is worded the way it is, and that is what Samuel
Montagu was about, whether or not clause 2.1 satisfied the requirements of
Article 8(q) of the original Convention. Article 9 provides what
occurs if an
air waybill has not been made out or does not include the relevant notices. The
consequence is the carrier cannot avail
himself of the provisions of Article 22.
Article 22 provides the monetary limits. The next important article is
Article 11, which
provides for the air waybill to provide:
prima facie evidence of the conclusion of the contract –
not the terms of the contract but, rather, “the conclusion
of the contract” –
of the receipt of the cargo and of the conditions of carriage.
So there is prima facie evidence as a result of the air waybill.
Then Articles 12 and 13 assume particular significance about the
rights of
the consignor and then the consignee, which bear upon the way in which the air
waybill should be examined. Article 12
provides:
Subject to his liability to carry out all his obligations under the contract of carriage, the consignor –
the person sending the goods –
has the right to dispose of the cargo by withdrawing it at the aerodrome of departure or destination, or by stopping it in the course of the journey on any landing, or by calling for it to be delivered at the place of destination or in the course of the journey to a person other than the consignee named in the air waybill –
So that up to the moment of arrival of the goods at the place of
destination the consignor retains control in the instructions to
the carrier.
In Article 12.4:
The right conferred on the consignor ceases at the moment when that of the consignee begins in accordance with Article 13 –
And the consignee’s rights arise:
on arrival of the cargo at the place of destination –
At that point the consignee may:
require the carrier to hand over to him the air waybill and to deliver the cargo to him –
Hence the importance of identifying the place
of destination.
2. Unless it is otherwise agreed, it is the duty of the carrier to give notice to the consignee as soon as the cargo arrives -
at the place of destination.
GUMMOW J: Article 13.1 uses the expression “conditions of carriage set out in the air waybill”. Article 12.1 talks about “liability to carry out all his obligations under the contract of carriage” simpliciter. Is there a distinction between the contract of carriage and the waybill?
MR GREENWOOD: Yes, there must be.
GUMMOW J: Is that expression, “contract of carriage”, expounded anywhere?
MR GREENWOOD: No, it starts back at the beginning of the schedule back in the definition of “international carriage” in terms of the agreement between the parties. Then in Article 5.2 it expressly refers to the fact that the air waybill, whether it exists or not, will “not affect the existence or the validity of the contract of carriage”.
McHUGH ACJ: Perhaps one of the problems in this case is that it was commenced by summons. There are no pleadings in the common law sense, no particulars given, the contract of carriage is not identified. It may have conduced clarity of thought if those things had been done. I mean, really what you are suing under is the implied obligation under the head contract, are you not, to carry the goods safely?
MR GREENWOOD: Yes, but there is no dispute about liability of course.
McHUGH ACJ: No, I know.
MR GREENWOOD: It is merely as to whether or not there is some limitation provision which operates - - -
McHUGH ACJ: But in common law pleading terms, if you had to plead your contract and identify it, that is what you would be identifying, would you not, as the source of your right?
KIRBY J: The onus would be on the respondent, would it not, to establish that there was a departure from the general principle - - -
MR GREENWOOD: Yes, and that is set out in the defence. The particular limitation provisions are set out in appeal books 8 and 9 that were pleaded and relied upon, including that additional conditions of contract that was abandoned. So I think it is probably fair to say that the issues were very clearly delineated before Justice Barrett.
McHUGH ACJ: They are in terms of limitations and so on, but it may have caused the Court of Appeal to look at the matter in this way, because on a cursory reading, one might think in some way you were suing on the waybill. Apparently that is the way the court seemed to see the case.
MR GREENWOOD: Can I just continue then by
referring to Article 15. It has significance because it provides
that:
2. The provisions of Articles 12, 13 and 14 can only be varied by express provision in the air waybill.
So the notion of the consignor’s rights up to the arrival of the goods at a place of destination and then the consignee having rights on arrival of the goods at the place of destination must be applied in the absence of any express provision in the air waybill, and there was not any such variation in the air waybill.
GUMMOW J: The significance of 15.2 is that it has the force of law by virtue of section 11 of the Australian Act.
KIRBY J: There was a suggested invocation of the provision – is it 17 – about servants and agents. There is an extension in Mr Meagher’s submissions.
MR GREENWOOD: That is not in contest.
KIRBY J: Anyway, you press on.
MR GREENWOOD: Your Honours, Chapter III of the amended Warsaw Convention then relate to the liability of the carrier. Article 17 relating to passengers and, although I will not be dealing with passengers at any length, it is worth bearing in mind that everything that relates to the cargo in general terms relating to the Convention also applies to passengers. In terms of passengers, the relevant period of carriage by air that the Convention applies to is limited by the embarking and disembarkation off the aircraft – on and off the aircraft – which we will submit is consistent with the construction that we are putting in relation to cargo.
Article 18 is the particularly important article. It is the same
in both the original Convention and the amended Convention and
it provides
for:
The carrier is liable for damages sustained in the event of the destruction or loss of, or of damage to, any registered baggage or any cargo, if the occurrence which caused the damage so sustained took place during the carriage by air.
“Carriage by air” is then defined in the next
paragraph as:
comprises the period during which the baggage or cargo is in charge of the carrier, whether in an aerodrome or on board an aircraft, or, in the case of a landing outside an aerodrome, in any place whatsoever.
That is a restrictive provision which saves the carrier in
circumstances where the carrier does not have the charge of the goods.
Then,
18.3 provides for:
The period of the carriage by air does not extend to any carriage by land, by sea or by river performed outside an aerodrome.
What follows thereafter is a presumptive extension:
If, however, such a carriage takes place in the performance of a contract for carriage by air, for the purpose of loading, delivery or trans-shipment, any damage is presumed, subject to proof to the contrary, to have been the result of an event which took place during the carriage by air.
So that one does not need to know exactly where damage occurs to be able to sue the carrier. One can say whether it occurred while you were loading it, delivering it or transhipment of it, there is a presumption that it occurred during the period of carriage by air, subject, of course, to the contrary being proved.
KIRBY J: Why does that not apply here, given that this is a case of delivery?
MR GREENWOOD: No, your Honour, it was not delivery under the air waybill. The air waybill terminated upon delivery of the goods to the place of destination in the air waybill, Melbourne Airport.
KIRBY J: Yes, but the liability referred to in Article 18.3 limits the period of the carriage by air and then says that can be extended to delivery, so why would the - - -
MR GREENWOOD: No, it does not extend to delivery. There is a presumption which can arise if it is not known where the damage occurs to the goods. That did not arise here. It was quite clear where the damage occurred to the goods.
KIRBY J: This is a fiction. Article 18.3 though is a fiction, is it not?
MR GREENWOOD: Yes, to aid a person who is asserting that goods have been damaged so that they do not have to prove exactly where it occurred, because usually, of course, they could not. Whether it occurred on the aircraft during turbulence or whether it occurred when they were being unloaded at the aerodrome or airport is not something that a consignee or a consignor is ever going to know, or usually not going to know, so there is this provision which provides for it to be presumed to being within the carriage by air, subject to proof to the contrary.
GUMMOW J: All this seems to be proceeding on the basis that Schenker was an air carrier.
MR GREENWOOD: Yes, your Honour.
GUMMOW J: The air carrier was Singapore Airlines.
MR GREENWOOD: No, Singapore Airlines was the actual carrier but Schenker Germany was a carrier for the purposes of the air waybill, it providing - - -
GUMMOW J: Is it a carrier for the purposes of the Warsaw Convention?
MR GREENWOOD: Yes, your Honour.
GUMMOW J: It does not appear from the face of it. The waybill identifies the carrier as Singapore Airlines. “SQ” it says, halfway down on the left-hand side: “Berlin-Tegel” to “Melbourne” by Singapore Airlines, “SQ7387”.
MR GREENWOOD: Yes, it refers to the actual air carrier.
GUMMOW J: Then it seems something happened in Singapore, I think, “SQ7294”.
MR GREENWOOD: Yes. Your Honour will see in the top right-hand corner - - -
GUMMOW J: I know that. That is typed in.
MR GREENWOOD: Yes, Schenker Germany being - - -
GUMMOW J: The word “carrier” is typed in. It is not in the form, is it?
MR GREENWOOD: No, and there is a distinction between the freight forwarder, being Schenker Germany, and the actual carrier, being Singapore Airlines. It was a matter that was considered in the Court of Appeal in Emery - - -
GUMMOW J: There is no particular reason why Schenker and Siemens cannot adopt the waybill as part of their contract, but insofar as you then seek to construe the waybill in terms of the international Convention, which is all about protecting airlines, is it not?
MR GREENWOOD: It extends to the freight forwarders as well, your Honour, because - - -
GUMMOW J: In an era when a lot of countries had national airlines.
MR GREENWOOD: Yes.
CALLINAN J: And Article 1 refers to “carriage . . . performed by aircraft for reward”.
GUMMOW J: Yes, that is right. That is why - - -
MR GREENWOOD: Yes, and the freight forwarder is attending to the performance of the carriage. Your Honours, it was considered by the New South Wales Court of Appeal in Emery Air Freight Corporation v Merck Sharpe & Dohme Australia Pty Limited [1999] NSWCA 415; (1999) 47 NSWLR 696. It is one of the cases that I provided to your Honours this morning. In that case the court considered whether a freight forwarder was a carrier within the meaning of the Warsaw Convention - admittedly the original Convention, the 1929 one.
GUMMOW J: It is important because you only get the advantage of the exclusions as a matter of statute by section 11 if you are actually within the Convention. If you have chosen to adopt the Convention privately, that is your affair, but you do not get the force of law by 11 in the Act. That is right, is it not?
MR GREENWOOD: Yes, your Honour.
GUMMOW J: What does Emery decide?
MR GREENWOOD: I know it would also be good for us but Emery deals with the fact that the freight forwarder is a carrier within the meaning of the Convention.
GUMMOW J: Where does it say that?
MR GREENWOOD: The President adopts at page 707 the decision of Justice Sheller in terms of the meaning of “carrier” in the Convention, paragraph 60. Justice Sheller deals with it commencing at page 709, refers to a number of the considerations that your Honour has referred to.
GUMMOW J: In the United States Emery has their own planes, I think. What aircraft was used? Qantas, was it?
MR GREENWOOD: In Emery? Yes.
GUMMOW J: Yes. Sorry, I interrupted you.
MR GREENWOOD: The conclusion appears at page 713, paragraph 90.
McHUGH ACJ: Having a quick read of the judgment I am not sure that the court has not looked at the matter in contractual terms rather than as to what the Convention itself declares. As Justice Gummow has pointed out, parties can contract as they like. They can incorporate what they like in their contract.
KIRBY J: Is that the correct position, Mr Greenwood, that you can as it were supplement the Convention because it is part of the Australian law made so by an act of Parliament which takes primacy because of that authority, but you cannot detract from or give lesser rights? Would that be the operation of the Convention in Australian law?
MR GREENWOOD: Well, in my submission, the
parties could contract to treat a person as a carrier for the purposes of the
Convention if they so
choose to do, and the air waybill apparently does that by
defining “carrier” in the first section, first paragraph, as
meaning:
all air carriers that carry or undertake to carry the goods hereunder or perform any other services incidental to such air carriage - - -
McHUGH ACJ: But one of
the consequences is, is it not, that the provisions so incorporated can only
operate contractually and they do not have
the force of law under the statute.
If somebody wants to contract to be a carrier for the purposes of the Civil
Aviation (Carriers’ Liability) Act a person can do so but it does not
follow that provisions incorporated into that contract have statutory backing as
opposed to contractual
effect. See, in this case, there seems to me two
separate questions. Is Schenker International a carrier for the purpose of the
Convention and is it a carrier for the purpose of the waybill? Now, it seems to
be clear enough that it is a carrier for the purpose
of the waybill. But does
it follow that it is also a carrier for the purpose of the Convention and,
therefore, the Convention’s
terms apply by reason of the statute and could
not be varied?
GUMMOW J: Someone must have had a contract with Singapore Airlines.
MR GREENWOOD: Yes, Schenker Germany, as the freight - - -
GUMMOW J: And if they hurl this machinery around in Singapore, not transhipping it, someone would have wanted to sue them. Who would that have been?
MR GREENWOOD: Schenker Germany as the freight forwarding agent, most obviously - - -
CALLINAN J: Well, the list of rates identifies a number of different airlines, does it not?
MR GREENWOOD: Yes, three different for the Richtungsverkehr.
CALLINAN J: Yes, that you took us to.
MR GREENWOOD: Yes.
CALLINAN J: But you have
these words too in Article 1 of the Convention:
It applies equally to gratuitous carriage by aircraft performed by an air transport undertaking.
Those words “air transport undertaking”, I do not know what application they have to the earlier sentence, but it really does suggest that it has to be an air carrier, does it not?
MR GREENWOOD: Yes.
GUMMOW J: Is that not the sense of the Convention? Would not the travaux preparatoires indicate this?
MR GREENWOOD: That that was in 1929 the intent?
GUMMOW J: Yes.
MR GREENWOOD: But, your Honours, the Convention has been interpreted as being relevant to current events and I think that was what was behind the decision in Emery in terms of looking at the Convention in a realistic sense as at today and applying its terms.
GUMMOW J: We do not have any trouble with that, but the question is, as the Acting Chief Justice has been putting to you, how does the Convention get into the Act. There are two steps, there are two questions involved.
MR GREENWOOD: Your Honours, if I could give the matter more thought and I will return to it, but we have been proceeding on the basis, obviously, that Schenker Germany was a relevant air carrier within the - - -
GUMMOW J: They could not be an air carrier; they would be in breach of all sorts of regulatory requirements.....civil aviation carriage.
MR GREENWOOD: That, for the purposes of the application of the Convention, is what I was referring to.
GUMMOW J: Yes, well, that is the point, that is the problem.
MR GREENWOOD: Your Honours, could I go back to complete
the walk through the Convention. I had got to Article 18.3. Could I just draw
your Honours’
attention to Article 22, which relates to the
particular monetary limits provided in the Convention, for passengers that is
amended
by the provisions of the Act. Then Article 25 which provides for the
limits in Article 22, modifying if certain things can be proved,
namely, that
the damage occurred:
from an act or omission of the carrier, his servants or agents, done with intent to cause damage or recklessly and with knowledge that damage would probably result -
Article 26 relates to receipt by the person entitled to delivery and 26.2 provides for the person entitled to delivery complaining to the carrier.
KIRBY J: Article 25 has no application, I assume.
MR GREENWOOD: No, it is not relied upon, but I refer to
it merely to see the way in which it is operating, namely, that this limit of
liability
is a benefit to carriers in certain circumstances. That is, if they
ensure there is an air waybill and subject to specific matters
where the limits
can be removed. Finally, Article 31 Chapter IV relates to combined carriage
and:
In the case of combined carriage performed partly by air and partly by any other mode of carriage, the provisions of this Convention apply only to the carriage by air, provided that the carriage by air falls within the terms of Article 1.
Namely, international carriage.
McHUGH ACJ: One
of the problems of applying the Convention to people who want to just call
themselves carriers but who actually do not operate
the aircraft is Article 34,
which says that:
The provisions of Articles 3 to 9 . . . shall not apply in the case of carriage performed in extraordinary circumstances outside the normal scope of an air carrier’s business.
MR GREENWOOD: Yes.
GUMMOW J: Justice Callinan refers to Article 1.3, it talks about “successive air carriers”, for example.
MR GREENWOOD: Does your Honour mean in the context of suggesting it is several different people actually performing the task of carrying the goods or the people, as in airlines?
GUMMOW J: What about Article 34 that the Acting
Chief Justice refers to:
the normal scope of an air carrier’s business.
The scheme of the Convention deals with – go back to
Article 1.1 with:
carriage of persons, baggage or cargo performed by aircraft for reward.
And then you get the three sections dealing with 3.1, “carriage of passengers”, and Article 4, “carriage of registered baggage”, then Article 5, “cargo”.
CALLINAN J: Article 12 speaks of “the aerodrome of departure or destination”.
KIRBY J: There is no provision in the Convention itself that renders servants and agents liable as carriers?
MR GREENWOOD: Servants and agents of the carrier?
KIRBY J: Yes.
MR GREENWOOD: Article
25A deals with the ability of a:
servant or agent . . . to avail himself of the limits of liability which that carrier himself is entitled to invoke under Article 22.
KIRBY J: Is that applicable
here?
GUMMOW J: Section 11(1) gives the game away a bit.
It says:
Irrespective of the nationality of the aircraft performing the carriage –
That is the interest of the high
contracting parties, the nationality of their aircraft.
MR GREENWOOD: Did your Honour say 11(1)?
GUMMOW J: Of the statute, which is the pivotal provision.
MR GREENWOOD: Yes.
GUMMOW J: I do not think these contracting parties are much fussed about freight forwarders. They were concerned about the responsibilities that might arise from the nationality of their aircraft and the need for insurance, and the need to avoid that by putting in some limitations.
CALLINAN J: And the high risk activity that flying was at that time.
GUMMOW J: Yes, and the difficulty of getting insurance and so on and so forth.
MR GREENWOOD: Your Honours, the two organisations that have adopted these air waybills in the particular form that your Honours see is the IATA and FIATA, the freight forwarders. Now, that is not to say, of course, that governs the position at all, but that is the way in which - - -
GUMMOW J: The members of IATA being whom?
MR GREENWOOD: The airlines.
GUMMOW J: Yes.
MR GREENWOOD: And the freight forwarders being the members of the organisation FIATA.
GUMMOW J: That is right. They are perfectly free to do that.
McHUGH ACJ: Is there any difference in the question of whether these terms - - -
MR GREENWOOD: Apply as a matter of law.
McHUGH ACJ: - - - apply as a matter of law or as a matter of contract? That brings in Article 15, about variation, what you can or cannot do, because if the Convention does not apply as a matter of law, then Article 15 may have a different operation.
MR GREENWOOD: But its operation, in my submission, is still going to be significant in the parties adopting the Convention as applying to their contract of carriage.
McHUGH ACJ: Yes.
MR GREENWOOD: If I take your Honours to the particular waybill, then, the fact that the air waybill that your Honours are concerned with is modelled on the provisions of the Conventions is borne out by the comment by Lord Justice Greene in Grein which is behind tab 5, Grein v Imperial Airways Ltd [1937] 1 KB 50. Lord Justice Greene’s judgment commences on page 74 of the judgment where, towards the bottom of that page, his Honour refers to the object of the Convention - - -
GUMMOW J: Wait a minute. This was someone suing the old Imperial Airways.
MR GREENWOOD: Yes, a passenger suing in relation to - - -
GUMMOW J: An unhappy trip from Antwerp to London.
MR GREENWOOD: Yes, from
London to Antwerp to London. One of the issues was whether or not it was one
journey or two. There is reference to
the object of the Convention at
page 74 point 8 and running over to 75 in terms of it being the
international code and governing
the contractual relationships between the
parties. The passage on page 77 point 8 also makes clear what I said
to your Honours before,
that:
The rules are rules relating not to journeys, not to flights, not to parts of journeys, but to carriage performed under one (or . . . more than one) contract of carriage. The contract –
being the unit –
to which attention is to be paid in considering whether the carriage to be performed under it is international or not.
While your Honours have the decision in front of you, could your Honours go to page 78. At the bottom of the page his Honour refers to the notion of “Place of departure and place of destination”. This related to the original Convention, not the amended Convention. It perhaps does not shed an awful lot of light in this case, but his Honour refers to the place of departure and place of destination at 79 as being “the place at which the contractual carriage begins and the place at which the contractual carriage ends”.
GUMMOW J: They are worried about the Polish corridor.
MR GREENWOOD: At 79 point 7 his Honour says:
For the purpose therefore of ascertaining what are the place of departure and the place of destination carriage by motor-car or train from the city to the aerodrome is to be disregarded – one aerodrome is the place of departure and the other aerodrome is the place of destination.
Then at the bottom of the page there is reference to the desirability of excluding specific considerations and, as your Honour says, a corridor.
GUMMOW J: A sensitive subject in 1936.
MR
GREENWOOD: His Honour refers at the top of page 80 to the need for
certainty:
In each case, when regard is had to the carriage which the carrier by his contract agrees to perform, the place where the contractual carriage begins and the place where it ends are clear beyond possibility of doubt.
Again on the place of destination, could I take
your Honours to 82 point 2 where his Honour says:
It is said that the expression “place of destination” is not a natural expression to use in reference to the homeward end of a return journey . . . But the question is not what is the natural meaning of these expressions in the abstract or in some other context but what is their natural meaning in this context.
So we will be saying to your Honours the place of destination under the waybill is that identified in the waybill. Your Honours have at page 163 of the appeal book the IATA Resolution 600b.
KIRBY J: Does this have any status under the Convention?
MR GREENWOOD: No, your Honour, it is the other way round. The IATA bill is drafted on the basis of the Convention rather than the Convention adopting the bill. This standard form bill was an attempt to try and incorporate the provisions that are required under the original Convention and the amended Convention.
KIRBY J: IATA is a private organisation, is it, a non-governmental organisation of the airline industry based in Montreal, I think?
MR GREENWOOD: That is my understanding. I am not certain but that is my understanding, your Honour, and similarly FIATA, an organisation of freight forwarders. Your Honours have the provisions there.
KIRBY J: Where was that resolution? It is at 163, is it?
MR GREENWOOD: At 163. Your Honours, 165 is not part of that document. It is a separate note added by FIATA to do with freight forwarders. Your Honours have in the bundle we provide behind tab 3 some excerpts from Shawcross and Beaumont air law and - - -
KIRBY J: I am losing my way in the structure of your argument. Where are you now?
MR GREENWOOD: We
are up to this point of identifying how these IATA waybill terms came into being
and one sees at paragraph [1162] of Shawcross
and Beaumont at
page 1031 the reference to the fact that since 1945 IATA has continued the
work of preparing waybills to cover the
uniform rules and reference to:
IATA resolution 724 (Passenger Tickets) and IATA resolution 600b (Air Waybills).
In our primary submissions in paragraphs 27 to 29 we have referred to the attempt to obtain uniformity without interference with domestic laws. Your Honours have already gone to Samuel Montagu and the reference by Lord Justice Salmon to the parallel systems.
I
will return to Shawcross and Beaumont but I wanted to then put beside that the
FIATA position and that is at page 370 of the appeal
book:
THE AIR WAYBILL RECOMMENDED BY FIATA FOR USE BY FREIGHT FORWARDERS –
At page 373 your Honours will see that:
The standardized Neutral Air Waybill form –
which is what we are concerned about –
is of great benefit to the international air transport. Developed by . . . (IATA) introduced by IATA in 1986 under IATA Resolution 600a.
That was then advanced to 600b. At 1.3 this guideline notes
that:
FIATA has developed and herewith introduces a Neutral AWB form based on the IATA AWB form which is designed for use by freight forwarders when acting
a) as consolidator and thereby assuming the capacity of a contracting carrier, or
b) as an agent of a named actual carrier.
It records
that:
The front of the Neutral AWB is identical to the standard IATA Neutral AWB, except that the top right hand box “issued by” contains the words “as carrier”.
Your Honours then see 1.3.1, a reference to “The note on the reverse of the Neutral AWB” by FIATA.
KIRBY J: Did the evidence indicate at any stage that because of the limitations imposed by the Convention that consignors sending extremely valuable products by air had a practice of supplementing their entitlements under the Convention by insurance?
MR GREENWOOD: No.
KIRBY J: As usual, insurance trod like Hamlet’s father through the play without revealing himself - - -
MR GREENWOOD: There is no evidence
in relation to that. Your Honours will see the note that I refer to as
being separate from the outer document
thereafter appears at page 373 and
identifies, in our submission, the fact that the air waybill is limited to the
carriage from airport
to airport. Unfortunately, the note only applies to one
end expressly, that is by asserting that:
TRANSPORTATION TO THE AIRPORT OF DEPARTURE . . . DOES NOT CONSTITUTE PART OF THIS CONTRACT OF AIR CARRIAGE.
It is silent in relation to the other end. Our submission is
that it is a clear indication that what was intended was to make clear
that that
transport beyond the airport is not covered. That is made clear by what appears
on page 374:
This note points out that the transportation of the goods to the airport of departure does not constitute part of the contract of air carriage. Thus in the event of such a service being arranged or performed by the freight forwarder in addition to carriage by air, two separate contracts are concluded:
a) One contract which covers transportation to the airport of departure and under which the freight forwarder’s/consolidator’s liability is subject to the applicable conditions of national forwarders’ associations only -
or “the company’s conditions”, and,
separately:
b) One contract which covers transportation from the airport of departure to the airport of destination - - -
KIRBY J: Whose note is this? This is part of FIATA, is it?
MR GREENWOOD: Yes. Now, this note is perfectly consistent,
of course, with the air waybill then terminating at the airport of destination.
The last note on page 374, the last paragraph there, recommending use but
asserting that:
This . . . is not intended to be an Express AWB for door-to-door transport, for which a variety of terms are in use.
Because its form applies to airport of departure to
airport of destination. At 377 there is guidelines about how to complete the
form. I do not need to take your Honours to them. There are some
particular forms there that have been completed. Your Honours
will see
reference to the airports of destination identified, be it Heathrow or, in our
case, Melbourne.
GUMMOW J: They use the words “AS CARRIER” in quotes, which is interesting. That is exemplified at 379, and it follows from the last sentence in 1.3 on page 373 that that is the way you adapt the IATA bill.
MR GREENWOOD: When acting as agent for a carrier.
GUMMOW J: At 1.3, last sentence:
is identical . . . except that the top right hand box “issued by” contains the words “as carrier”.
So it is the words “deemed to be
carrier” is what the idea is, being treated as if it were, which is what
you have here,
I think.
MR GREENWOOD: Yes. Can I take your Honours back to Shawcross and Beaumont just to see in paragraph [1163] the provisions of Resolution 724 relating to passengers really to observe that there is great similarity between the definition of “carrier” - - -
KIRBY J: What paragraph?
MR GREENWOOD: Paragraph [1163],
page 1032, “carrier” meaning:
all air carriers that carry or undertake to carry the passenger or his baggage hereunder or perform any other service incidental to such air carriage.
And beneath that the comment that:
Carriers by land are excluded from the term ‘carrier’; when, however, an air carrier himself provides transport from an air terminal to the airport, such transport probably falls within ‘any other service’ incidental to such air carriage.
And a significant
consideration in this case is whether or not there is this distinction between
“carriage” on the one
part, meaning air carriage, and
“services incidental to the air carriage” which are not air
carriage. Your Honours will
also see immediately thereunder clause 2
of the passenger ticket is relevantly identical to the cargo provision. Again,
the notion
of:
Carriage hereunder is subject to the rules . . . relating to liability established by the Warsaw Convention –
the provision that was being
considered in Samuel Montagu, so that there is a dual purpose
system.
Your Honours, at paragraph [1164], page 1035, Shawcross and Beaumont deal with the provisions of the IATA air waybill. Can I take your Honours to the particular waybill that is in the plastic sleeve. Shawcross and Beaumont provide a useful reference going through each of the provisions at the same time, and our submission of course is that the different provisions have to be construed in the context of this air waybill to mean the things which are going to be sensible for commercial practice and any reasonable business person would understand. Essentially, that amounts to this submission, that “carriage” in this air waybill is clearly intended to be carriage by air.
Your Honours see in clause 1 the definition of “carrier” as being “air carriers” and the distinction between on the one hand the undertaking of the carrying of the goods or the carrying of the goods and on the other hand the performance of other services incidental to such air carriage, and the reference to “such air carriage” again, we submit, is significant in indicating the ambit of this waybill.
Under clause 1 you will see that there is reference to the
Warsaw Convention as being either the original Convention of 1929 or the
amended
Convention, covering both regimes. Clause 2.1 then provides for “carriage
hereunder” being:
subject to the rules relating to liability . . . unless such carriage is not ‘international carriage’ –
mirroring the provisions of the
Warsaw Convention 1929, Article 8(q).
The fact that it cannot be
anything other than air carriage in what 2.1 is concerned with is demonstrated
by the fact that it is
subject to the rules relating to liability established by
the Warsaw Convention because as we have seen, particularly Article 18.3,
road carriage is not governed by rules relating to liability established by the
Warsaw Convention. Then:
2.2 To the extent not in conflict with the foregoing –
2.1 and 1 –
carriage hereunder and other services performed –
again, the differentiation –
by each carrier are subject to:
2.2.1 applicable laws (including national laws implementing the Convention), government regulations, orders and requirements,
2.2.2 provisions herein set forth –
these terms, and,
importantly:
2.2.3 applicable tariffs, rules, conditions of carriage -
So that a carrier, a freight forwarder such as Schenker, could
incorporate, if it wished to, its conditions of carriage, its own particular
provisions, if it wished to, and the waiver would have to be read subject to
them. That did not happen. Clause 3 relates to some
details in relation to the
waybill. Then one gets to the limitation provision that is the subject of this
case:
Except as otherwise provided in the Carrier’s tariffs or conditions of carriage, in carriage to which the Warsaw Convention does not apply -
then a certain limit will. The essence of this clause, in our submission, is that what it is picking up on is the leftover of 2.1, in effect.
GUMMOW J: The real question is, what is clause 4 doing, given the overall form of the contractual relations between the parties? It has to be said against you, I think, that what is being done is to impose this liability here of $20 upon the general contract, if I can use that expression, by means of this imperfect adoption of the standard form, which is all about air carriage by airlines.
MR GREENWOOD: But, your Honour, the air carriage that it is concerned with is identified on the face of the form.
GUMMOW J: Yes, but we are not just construing the form, even though it might say that.
MR GREENWOOD: No, but the notion of the way in which this is - - -
GUMMOW J: What I am saying to you favours you, Mr Greenwood.
MR GREENWOOD: Thank you, your Honour. I thought your Honour was putting it as against me.
GUMMOW J: Yes, I know. Counsel always think that.
KIRBY J: Counsel are always suspicious of helpfulness.
MR GREENWOOD: I thought they were his Honour’s opening words, I am sorry. The proposition is that this is not an attempt to try and incorporate into the overall Richtungsverkehr some limitation provision and hence the distinction in 2.1 between, on the one hand, carriage that is subject to the rules relating to the Warsaw Convention and that which is not. Now, everybody agrees this was international carriage under the Warsaw Convention as amended at The Hague 1955. That being the case - - -
GUMMOW J: Say that again – everybody agrees what?
MR GREENWOOD: That this carriage was international carriage. This contract for carriage involved international carriage between high contracting parties - - -
GUMMOW J: I do not understand this.
MR GREENWOOD: - - - and it is set out in paragraph 17 of the respondent’s submissions.
GUMMOW J: It may be, but you can agree or not agree amongst yourselves, but when it comes to construing something like this Convention, we have to look at it, clearly, ourselves.
MR GREENWOOD: Yes, of course. Now, both Australia and Germany were high contracting parties to the amended Convention. The carriage was international carriage, because it involved under Article 1 carriage from the place of one high contracting party to the place of another high contracting party and it involved carriage by air.
GUMMOW J: By somebody else. By Singapore Airlines.
MR GREENWOOD: Yes, your Honour.
McHUGH ACJ: What do you make of the note at
the bottom of the back page of this document:
NOTE WHEN USED AS AN AIR WAYBILL ISSUED BY A FORWARDER - - -
MR GREENWOOD: Yes.
This is the note that was in the FIATA guidelines.
McHUGH ACJ: Yes.
MR GREENWOOD: Identifying the fact that this document only operates from the airport of departure and a separate contract arises in relation to any other carriage prior to that.
McHUGH ACJ: Do you seek to take any advantage of that?
MR GREENWOOD: Yes, we seek to take advantage of it in this way. It is consistent with the air waybill terminating upon arrival at the place of destination and what is being put against us is that this waybill somehow extended beyond the place of destination.
HEYDON J: It is against you, is it not? It expressly deals with, as it were, the airport of departure by saying nothing about the airport of arrival. When read with other clauses, it leaves open the respondent’s position - - -
MR GREENWOOD: In our submission, no, because the place of destination here is the airport of arrival and under clause - - -
HEYDON J: Your duty did not cease when the plane landed and the goods were placed on the ground.
MR GREENWOOD: The freight forwarder’s duty?
HEYDON J: The duty of Schenker International Deutschland.
MR GREENWOOD: Yes.
HEYDON J: You had to take it to the bond store, four hours away.
MR GREENWOOD: They had to take it.
HEYDON J: What does clause 11 mean – condition 11 mean?
MR GREENWOOD: The Schenker Germany, pursuant to the Richtungsverkehr, had to arrange for the carriage of the goods by road from the airport to the bond warehouse. However, pursuant to the air waybill the delivery at the place of destination took place. The consignor’s rights terminated, under Article 12 terminated when the goods arrived at the airport of destination and the obligation on the carrier was to make delivery at the place of destination to the consignee. Now “delivery will be made to” and to finish that sentence it has to be to “the consignee” or, to “the consignee . . . in accordance with instructions”. There has to be delivery to at the airport. That is why the note only operates for the fist part because the waybill cannot operate beyond the place of destination.
HEYDON J: The truck which suffered the accident was procured by one of the respondents.
MR GREENWOOD: Schenker Germany, yes.
HEYDON J: But was not that an act in performance of?
MR GREENWOOD: That was an act in performance of the Richtungsverkehr obligation to deliver the goods to the bonded warehouse and there they would be deconsolidated and made available.
HEYDON J: But what function does the second sentence of condition 11 have, then? Why is it there?
MR GREENWOOD: Condition 11 is a restatement of Articles 12 and 13 as to when the consignor’s rights cease and when the consignee’s rights commence, so that on arrival of the goods at the place of destination and under the waybill has to be Melbourne Airport, subject to the acceptance of other instructions from the consignor prior to the arrival – that is Article 12, then delivery will be made to the consignee. That is the moment of change.
HEYDON J: That is something that German Schenker has to perform. Is that not a piece of carriage to which the Warsaw Convention does not apply?
MR GREENWOOD: Not carriage under this waybill, but carriage - - -
HEYDON J:
delivery will be made to . . . the consignee.
MR GREENWOOD: Yes.
HEYDON J: The consignee was Siemens Ltd?
MR GREENWOOD: Yes.
HAYNE J: Siemens Ltd were never to get it until it got to the bond store.
MR GREENWOOD: Pursuant to the Richtungsverkehr, that is right. We keep going around in this question of whether or not the air waybill operates merely to the air carriage section of the contract, dealing with that, and does not then operate in relation to the other aspects of the Richtungsverkehr which relate to the road delivery.
GUMMOW J: Now, it is conceivable that there could be some air carriage which is air carriage but the Warsaw Convention did not apply to it.
MR GREENWOOD: Yes, like domestic air carriage.
KIRBY J: Or non parties.
MR GREENWOOD: Or non high contracting parties and, indeed, between Australia and America, the original Convention applies, because America is not a high-contracting party under the - - -
GUMMOW J: You have to say that is the background of clause 4, that possibility.
MR GREENWOOD: Yes, as reflected by 2.1, which differentiates the two different regimes and the carriage then to which clause 4 does apply is the non Warsaw Convention carriage.
KIRBY J: It just seems to me that - we have to keep an eye on this, I think Justice Gummow raised at the beginning – if the statute of the Australian Parliament applies to the air carriage, then what the air waybill provides by way of private agreement is really not significant, is it? We have a higher duty to apply the law made by the Parliament of Australia. And then the question becomes whether, by their private contract, the parties can supplement that legal obligation by their own private contractual arrangements.
MR GREENWOOD: Yes.
GUMMOW J: Now, is that common ground?
MR GREENWOOD: I have not thought the matter through, but at the moment that seems perfectly right to me, it must be right.
KIRBY J: Barristers hate statutes. We find it every day. They all love the common law, they love the common law of contracts and so on, but we are a Court of law in Australia and if the Act of the Australian Parliament applies, our duty is to apply the Act. That is our first step. Then, beyond that, we have to ask, “Can you and have you supplemented statutory obligations?”
MR GREENWOOD: Yes.
GUMMOW J: But there is the anterior question which we were investigating with you as to what does the statute apply? On whom does it impose obligations? Does it impose any obligations on these parties at all, because they are not air carriers?
MR GREENWOOD: And what is the impact of that in any event? If this is the agreement between the parties, is it inconsistent?
GUMMOW J: Well, the statute would permit exclusions, right? One of the benefits of the statute is to uphold exclusion clauses, is that not right, under the Convention? It gives effect to the Convention; the Convention enables you to limit liability.
MR GREENWOOD: Yes.
GUMMOW J: That is an advantage you get or a burden you suffer. If the Act does not apply, there may be other statutes at a State level which strike at exclusion clauses. They would then have their full life, unaffected by the operation of section 109 through the federal Act. That may be very significant in a case, for all I know.
McHUGH ACJ: And, indeed, there may be federal statutes like the unconscionable provisions of the Trade Practices Act.
GUMMOW J: Exactly.
KIRBY J: I just do not know that anybody started this problem from the right starting point. Where there is written law it supervenes everything else in this country and, as was shown in that Akai Case concerning the Insurance Contracts Act, where there is a valid federal law it is the duty of every court in this country to give it effect. Then you have to ask, having done that: first of all, what is the consequence of that for the dealings between the parties here? Then when you have sorted that out you ask: can they validly, with section 11 of the Civil Aviation (Carriers’ Liability) Act, make private arrangements between themselves in Germany or anywhere else that will be given effect by a court of law in Australia? That takes you perhaps to the air waybill and to the Richtungsverkehr.
McHUGH ACJ: But it was common ground with both the trial judge and the Court of Appeal that the Convention as such did not protect the respondent. The respondent had to obtain its immunity or limitation through the operation of the waybill.
MR GREENWOOD: Correct, because it did not - - -
KIRBY J: Or the Richtungsverkehr, if that had any protection for them.
MR GREENWOOD: Yes, because the damage did not occur during the period of carriage by air.
McHUGH ACJ: Yes.
KIRBY J: I just wonder why we are tarrying so long over the establishment of something that does not seem to be much in dispute. The carriage by air as such is over. So we are trying to find out whether or not beyond the aerodrome first of all the Civil Aviation (Carriers’ Liability) Act plus the Convention has any operation and, if not, whether some other private arrangement between the parties picks it up or picks up by analogy the carriers limitation.
MR GREENWOOD: I am not sure that the question about carriage by air being over is conceded by the respondents. Rather, it seems that that is what they are asserting, that the carriage by air period can continue such that carriage within clause 4 would operate in relation to this section of road carriage.
McHUGH ACJ: Because it is incidental.
MR GREENWOOD: That is right. But if it incidental then it is differentiated from “carriage” under the waybill.
McHUGH ACJ: Yes.
MR GREENWOOD: And clause 4 only operates to “carriage”. That was an aspect of the Court of Appeal’s judgment that again leaves things uncertain about whether or not the Court of Appeal was treating the road carriage segment as being a service incidental under the waybill.
GUMMOW J: Where did we get that phrase “service incidental”?
MR GREENWOOD: In clause 1, your Honour, condition 1.
GUMMOW J: Yes, thank you.
MR GREENWOOD: And then repeated in 2.2.
GUMMOW J: Yes, thank you.
MR GREENWOOD: Before I leave condition 4 could I just also draw your Honours’ attention to the fact that the carriage that is being referred to in 4 is in relation to Warsaw Convention generally, not the rules relating to liability. So if it is international carriage, as we submit it was, then that means that clause 4 just has no operation because a Warsaw Convention does apply to it.
GUMMOW J: Now, what you have going for you is that in its rare inspiration which is IATA clause 4, so far as airlines are concerned, would finish with the airlines’ duties at the airport unless there is some other arrangement.
MR GREENWOOD: At the airport. Your Honours, that is - - -
GUMMOW J: And it is the adaptation of it to some wider form of activity that causes the problem when you have this rigid form of language.
MR GREENWOOD: I accept that, and that is again exemplified by clause 11 in terms of the arrival of the goods at the place of destination being delivered.
McHUGH ACJ: It is an odd provision because in this contractual situation Schenkers in effect have to be notified by Singapore that the goods have arrived before they can then carry out their obligation under clause 11.
MR GREENWOOD: And, your Honours, the master air waybill between Schenker and Singapore is at page 166 of the appeal book. One helpfully does not have the terms and conditions on the rear page, but for all intents and purposes it is identical to the IATA form of waybill on the front. So we would submit it is open to assume the terms and conditions are the standard IATA terms and conditions.
GUMMOW J: It does not say “as carrier” up at the top right-hand corner - - -
MR GREENWOOD: No, because it is not a freight forwarder. This is the IATA one.
GUMMOW J: I realise that.
MR GREENWOOD: Yes. Now, I should also point out of course both these documents, both the house air waybill and the master air waybill, were completed by Schenker. Your Honours can see on the bottom right there is reference to Schenker as agent of the carrier.
GUMMOW J: Qantas looks after some activities in Melbourne for Singapore Airlines, by the look of it. “Qantas Freight Melbourne”. Do you see that?
MR GREENWOOD: I see, the stamp.
GUMMOW J: Yes, it gets more complicated.
MR GREENWOOD: Now, that just has this relevance. The same entity has filled out the master waybill and the house air waybill, and clearly the master air waybill must terminate to the airport of destination nominated, Melbourne Tullamarine, and just as we submit so the other air waybill terminates at the place nominated by the same entity as the airport of destination, Melbourne MEL, MEL being IATA code for Melbourne Airport, as distinct from Essendon Airport.
Your Honour Justice Heydon referred to clause 11. That is relied on heavily by the respondents and also Justices Meagher and Sheller, particularly Justice Meagher, in terms of indicating an extension of the waybill, whereas our submission is that a term about delivery cannot extend the operation of the document, but rather deal with the details of how it is to be delivered pursuant to the document, not some other arrangement.
Can I then take your Honours to
Justice Barrett’s judgment with a view to your Honours seeing
how his Honour effectively adopted
the approach as I have submitted to
your Honours. His Honour commences at page 390 and at 391
identifies the main issues, the second
and third, lines 30 to 40, being the
relevant ones now. His Honour refers at 392 to the details about the
transportation of the
consignment and it is there at line 30 that
his Honour refers to Schenker Germany forwarding them “from Berlin to
Melbourne
by Singapore Airlines” and the collection from Singapore
Airlines by Schenker (Australia). At 393 his Honour deals with the
Warsaw
Convention and its applicability. He says:
It was common ground that, of the treaty provisions made relevant by the Civil Aviation (Carriers’ Liability) Act 1959, only those of the Warsaw Convention as amended at The Hague are applicable.
And
394 referred to section 11(1). His Honour then referred to the
articles of the Convention, 18 as creating the liability and, at 397, 18.3
providing the presumption,
which has no application
here.
Your Honours will be aware that one of the issues at first
instance was whether or not the goods in fact were damaged at an airport
site.
It was argued that there should be an extended definition of
“airport” applied and his Honour came to the contrary
conclusion. At page 400 his Honour construed Article 18 applying
two guiding principles, the first being that the court should accept
any
“settled meaning and effect” of the terms of the Convention and,
secondly, at the bottom of page 400, applying that
principle effectively,
that:
the Convention’s liability regime . . . is exclusive, in the sense that the applicable article defines liability, in cases where it operates, regardless of and to the exclusion of normal domestic law rules.
His Honour refers at the bottom of page 401 to
Emery and Justice Kirby’s comments in SS Pharmaceutical v
Qantas Airways, as I recall, referring to the Convention in some respect as
being somewhat of a shambles. His Honour then examined the decision
in
Victoria Sales Corporation v Emery Air Freight Inc, which determined that
the boundaries of the aerodrome should be strictly construed, in a case not very
dissimilar to this in terms
of goods having been carried beyond the airport and
then being damaged.
Having determined then that the Warsaw Convention did not have an extended definition, page 405, 406, his Honour turned to the parties’ contract and looked at whether a limitation arises as a matter of contract:
the only potential source of any such limit is clause 4 of the house air waybill –
and I took your Honours at the commencement to the
framework, the distinction between the Richtungsverkehr and the waybill, which
his Honour found at 407 and 408. His Honour notes at page 408,
line35:
There is no dispute that those provisions were operative, as a part of or adjunct to the overall contract.
There was a question about the extension of those. Then on 409
his Honour, examining clause 1, 3, 2.1, 4 and 8, concludes at line
35:
Taken together, these references indicate quite unmistakeably that the document is concerned with the transportation of cargo by air, whether or not that transportation is “international carriage” as defined by the Convention and whether or not the Convention applies.
At page 410 his Honour turned to the:
fundamental question posed by the circumstances of the case is as to the point at which the carriage referred to in the air waybill concluded.
And his Honour referred to the intention of the parties
“objectively manifested” and looks at:
the air waybill being created and employed in the context of the wider “Richtungsverkehr” arrangements –
Then his Honour sets out the details of those wider
arrangements on 411 and 412. At 413 his Honour then concludes that
although there
was this umbrella contract with a continuum of services, as set
out in that letter of January 1991, line 35:
the waybill did not extend to the part of the overall journey consisting of transportation from the Melbourne airport to the Schenker Australia warehouse -
even though it was part of the umbrella contract. At 414
his Honour refers to the factors that inform that conclusion, and those
are
the matters that I have canvassed with your Honours, including
significantly the distinction between on the one hand “carriage”
and
“other services incidental to such air carriage”. It is the passage
commencing at the bottom of page 414 that Justice
Meagher was unable to
follow. The passage was:
The clear assumption in each of these provisions is that the carriage as a whole -
Your Honour, just before I go on, the reference there to “carriage as a whole” is following upon the conclusion that his Honour has found, that it is confined to air carriage.
KIRBY J: Yes, it is in contradistinction to air carriage. That is what his Honour is differentiating; air carriage and carriage as a whole.
MR GREENWOOD: No. His Honour - with respect the way I am putting it is that you will see at the top of the page at 414 his Honour has said that the waybill is confined by its terms to “air carriage”.
KIRBY J: That is right.
MR
GREENWOOD: Yes, and then going to the bottom:
The clear assumption in each of these provisions is that the [air]
carriage as a whole will or will not be within the Convention’s definition of “international carriage” and that the carriage as a whole will or will not be carriage to which the Convention applies.
That is the point of difference. His Honour is not referring to the carriage in this particular case under the wider contract.
McHUGH ACJ: Earlier I mentioned to you the difficulties I saw in not pleading the contract in the ordinary way, but it is emphasised when you look at the position of Schenker International Australia Limited. Now, what roots contractual obligations and when did they arise, and what consideration would it give? You have this umbrella arrangement. Now, Schenker Australia would have no obligations, would they, until goods arrived, in this particular case, at Tullamarine.
MR GREENWOOD: Yes.
McHUGH ACJ: And maybe under the umbrella contract, under the direct traffic contract they had an obligation to pick up those goods. But in terms of its liability as a sub-bailee, if we want to call it, or a bailee of the goods at that time, its individual contract would not come into operation, would it, until the goods had arrived and after - - -
MR GREENWOOD: Nothing in relation to the air waybill.
McHUGH ACJ: No.
MR GREENWOOD: No.
McHUGH ACJ: So if you are suing on that contract you are suing on a contract that comes into existence when the waybill would seem to be spent.
MR GREENWOOD: Yes.
McHUGH ACJ: Unless your opponents can say that somehow Schenker Australia was itself a party to the waybill.
MR GREENWOOD: Or an agent of the forwarder, an agent of Schenker Germany, such that it can get the benefit of the provisions of the air waybill.
McHUGH ACJ: Yes.
MR
GREENWOOD: But it still has to be in the context of the air waybill having
continuing operation, and that is the problem. I will not pursue
it further
beyond 415 where your Honours can see that the distinction we are relying
upon is enunciated by Justice Barrett on the
basis that:
Clause 4 does not apply unless the whole of the relevant [air] carriage is “carriage to which the Warsaw Convention does not apply”.
In other words, if the Convention applies, clause 4 does not. One or other operates exclusively. On any view, the Convention did apply, and so clause 4 does not.
Your Honours, I am conscious of the time. Could I take your Honours to the Court of Appeal’s decision there. Justice Meagher, firstly, at 445, or he referred to it briefly, where his Honour runs the Richtungsverkehr and the air waybill together, treating the place of destination and delivery to the warehouse seemingly as part of the air waybill. His Honour refers to clause 9. Clause 9 is of no relevant application, clause 9 only providing a restrictive operation limiting the carrier’s responsibility pursuant to the air waybill to the time when the carrier had charge of the goods.
Could I just also draw your Honours’ attention to clause 9, commences with the words “Subject to the conditions herein”, so it does not purport to express a general wider ambit for this responsibility of the carrier beyond the terms of the waybill.
At
page 446 his Honour refers to the inability to understand the
reasoning and, in our submission, that is by reason of a confusion
about what
the reference to carriage was in Justice Barrett’s decision. But
what appears there in reference to the two regimes
is significant.
Justice Meagher refers to the:
two regimes, one covering the route from Berlin airport to Melbourne airport, one covering the route from Siemen’s Berlin factory to Schenker’s Melbourne bondstore.
His Honour refers to the latter
contractual regime being different from the former statutory
one.
GUMMOW J: There is no statutory regime here, it seems to me.
MR GREENWOOD: No, and his Honour then in the next sentence - - -
KIRBY J: But does his Honour there mean that where you read Convention, you read, in an Australian context, statute? Well, that is not wrong, as far as I am concerned.
MR GREENWOOD: It is the intention of referring to the Convention as incorporated by the Act.
KIRBY J: That is right, but the Convention only has legal relevance in Australia, given our theory of the dualism of international and domestic law, because the statute of the Federal Parliament has made it so.
MR GREENWOOD: Yes, but the limit of the - - -
KIRBY J: So to that extent, it is correct to refer to it as a statutory regime.
MR GREENWOOD: Clearly, Justice Meagher is referring to the operation of the Convention being the regime covering the route from Berlin Airport to Melbourne Airport, ie, the Convention.
GUMMOW J: It is by adoption of the parties. We have been down this track before, unless you accept your views that “air carrier” does not mean what it says?
MR GREENWOOD: It is a matter I was going to turn to.
GUMMOW J: No doubt you led his Honour to say what he said, both of you?
MR GREENWOOD: Neither of us was there, of course, your Honour, but – I am sorry, that is not quite right.
GUMMOW J: I know, but you are privies in guilt, really.
MR GREENWOOD:
Could I just conclude this by taking your Honour to the last sentence
though on 446, that paragraph, where Justice Meagher says:
It thus covers the short trip from Melbourne airport to the bondhouse.
His Honour is differentiating on one hand between two regimes, one contractual, one statutory, and the “It” that he refers to, as covering “the short trip from Melbourne airport to the bondhouse”, he does not distinguish between it being the Richtungsverkehr or the waybill. He then refers to these - - -
KIRBY J: Now, let me just get it clear. You agree with his Honour, do you not, that there is a statutory plus Convention regime which begins at Tegel Airport in Germany and carries through to Melbourne Airport or in the perimeter of Melbourne Airport in Australia?
MR GREENWOOD: To the delivery point at the airport of destination.
KIRBY J: We will not argue about it because it is not relevant in this case.
MR GREENWOOD: The presumption aspect. Correct.
KIRBY J: So you agree that that is a statutory plus Convention regime.
MR GREENWOOD: That is the way the case has been run to date, but I accept what Justice Gummow says in terms of raising questions about that. That was the matter that I said I will need to address on separately because it has not been addressed in any of the written submissions to date and has not been raised before.
KIRBY J: That is not inconsistent with what his Honour says. It is simply leaving aside what the statutory regime is and to whom it applies.
MR GREENWOOD: Yes, but it is the last sentence where his Honour is not differentiating between the contractual regime by the Richtungsverkehr versus the waybill. He is treating them one and the same, it seems. The three cases that his Honour refers to as providing some support I need to take your Honours to. The first one is the first instance decision of Quantum Corporation Ltd v Plane Trucking [2001] 2 Lloyd’s Rep 133, a judgment of Justice Tomlinson behind tab 8 in the materials provided. It was reversed on appeal.
GUMMOW J: What do we get out of this?
MR GREENWOOD: Nothing, your Honour. Nothing, your Honour, that assists. It involved the applicability of the CMR Convention in terms of the road carriage leg in relation to transport of goods from Singapore to Dublin in which one of the legs was undertaken by road, namely, Paris to Dublin, and the goods were damaged in the course of that leg. That leg was expressly indicated to be a road leg by agreement between the parties.
GUMMOW J: CMR is the convention on the contract for international carriage of goods by road?
MR GREENWOOD: Yes, and in our submission, it has no relevant application on its facts where there was an express agreement for the carriage to be partly carriage by road and partly carriage by air.
McHUGH ACJ: The headnote says the contract recorded in the master waybill envisaged carriage by air and thereafter by road.
MR GREENWOOD: Yes, and that is the first main point of distinction with our case where the air waybill does not provide for any carriage by road, it stops at the airport.
KIRBY J: You said it was reversed on appeal. Was the reversal relevant to the point that Justice Meagher is referring to or not?
MR GREENWOOD: Your Honour, there is no indication of what it was that Justice Meagher was relying upon in the first instance decision.
KIRBY J: He says that these three decisions do not stand with the approach that Justice Barrett took.
MR GREENWOOD:
And, in our submission, they just do not bear on the same matters at all.
In Quantum Corporation the relevant limitation provision that was relied
upon was not the clause 4 that operates in this case. Rather, it was Air
France’s
conditions of contract, and your Honours may recall that I
drew attention to the fact that clause 4 commences:
Except as otherwise provided in carrier’s . . . conditions of carriage –
and that was what was applying in the Quantum Case.
Your Honours, the decision of the Court of Appeal is also in the bundle of materials. It is behind guide card 9. It was relied upon by Justice Sheller, and I will come to that in due course. The second case relied upon by Justice Meagher of Aerofloral appears behind guide card 10. Your Honours will see it is an appeal from a summary judgment in relation to goods that were missing at a warehouse. If your Honours go to 235, the left-hand side, paragraph 1 - - -
GUMMOW J: Aerofloral is an indirect air carrier and freight consolidator. They seem to have their own planes.
MR GREENWOOD: Yes, your Honour, and Rodricargo was the freight forwarder which delivered the goods to Aerofloral and at the Aerofloral warehouse, before they ever got to an airport, they were stolen.
McHUGH ACJ: I notice in the main
judgment it says that both parties:
agree on appeal that the Convention is inapplicable to the loss. Thus, we reverse the entry of summary judgment.
MR GREENWOOD: Yes.
GUMMOW J: This was domestic carriage, was it not?
MR GREENWOOD: Sorry, your Honour.
GUMMOW J: Where was it going?
MR GREENWOOD: The goods had not got to the airport. They were to be transported. It is implicit that they were to be going to a country that was also a signatory to the original Convention.
McHUGH ACJ: They say federal common law applies. I do not know what they mean by that. There is no federal common law because the common law of - - -
GUMMOW J: It seemed to be a specially devised exception to - - -
MR GREENWOOD:
Your Honours, the decision turned at the end of paragraph [4] on
235 to the question of whether or not the goods were in carriage
at the time.
The trial court had not addressed the argument and so it was to be sent back to
the trial court to address that question.
But it is what appears in
Justice Ramirez’s last paragraph by way of an aside that may have
been relied upon by Justice Meagher:
The air waybill does not define “carriage”, but it does define “carrier” as one who “undertakes to carry the goods hereunder or perform any other services incidental to such carriage.”
A small point of distinction, ours says “such air
carriage, not “such carriage”. His Honour then remarks:
Clearly, warehousing the goods for carriage is a service “incidental to such carriage” as contemplated by the definition of the term “carrier”.
So that does not follow. But, in any event, his Honour does not then take it any further. The matter is remanded for the trial judge to determine whether it is in carriage. Justice Green, dissenting, observed that it did not need to go back because the trial court was right because paragraph [4] clearly applies exclusively to situations where the subject cargo is in carriage and warehousing was not in carriage.
McHUGH ACJ: How long will you be, Mr Greenwood?
MR GREENWOOD: About 25 minutes, your Honour.
McHUGH ACJ: I hope you leave enough time for Mr Meagher to do justice to his argument. We want this case to finish in the day. The parties were told it would finish in the day. The Court will adjourn until 2 o’clock.
AT 12.46 PM LUNCHEON ADJOURNMENT
UPON RESUMING AT 2.01 PM:
McHUGH ACJ: Yes, Mr Greenwood.
MR GREENWOOD: Thank you, your Honours. I was dealing with the three cases that Justice Meagher referred to at page 446.
GUMMOW J: We are up to Read-Rite, are we not?
MR GREENWOOD: I was just going to finish Aerofloral, your Honour. Aerofloral was remanded back to the trial judge for determination about whether the goods were in carriage at the time that they were warehoused and in the additional decision of the Court of Appeal of Florida 798 So 2d it is recorded that – it did go back to the trial judge. The trial judge found the goods were not in carriage and it was affirmed on appeal.
KIRBY J: So the dissenting judge was upheld.
MR GREENWOOD: Correct.
KIRBY J: Sometimes it happens.
MR GREENWOOD: Of course, the significance of all those three cases is that they were referred to by Justice Meagher as being cases where the clause, similar to clause 4, operated, and that is not in fact the case. The third one is Read-Rite Corporation v Burlington. It is behind guide card 6. It was a case where some goods were ordered from an English corporation by a corporation, Read-Rite, based in California. The Californian company engaged a freight forwarder, Burlington, to arrange delivery of the goods from England to California.
So the goods were trucked to the freight forwarder’s premises near Heathrow Airport then delivered to the air carrier’s agent outside the airport, where the goods were damaged. So again they never reached the airport. They never became involved in transport by air pursuant to the Warsaw Convention.
The way the matter was dealt with was a finding that the goods were governed by a master air waybill and the master air waybill had a clause similar to clause 4, but the air carrier had its own conditions of contract which applied. So again clause 4 was not used in the way that it is relied upon in the Court of Appeal’s judgment.
Your Honours,
it gets that if one goes firstly to the - and one needs to look at the first
instance judgment in order to get all
the basic facts, and that is referred to
in the respondent’s folder, a decision of Judge Claudia Wilken. If
your Honours go
to page 2 and the background your Honours will see
that there is:
Read-Rite ordered a cluster sputter system . . . from Nordiko . . . At Read-Rite’s direction, Nordiko arranged with Burlington, Ltd in England for the machine to be transported from England to California.
About point 5 it refers to the
air waybills – a house air waybill and a master air
waybill – being prepared, the relevance
being that the house air
waybill providing for Nordiko as the consignor and Read-Rite as the consignee on
the one hand, and separately
the master air waybill prepared on behalf of
Cargolux.
In relation to the house air waybill, your Honours will
see on page 3, point 3, that on the reverse of that house air waybill
were
British International Freight Association standard trading conditions. On
page 4 is a reference to the Cargolux master air waybill
which provides, as
the bill in this case provides:
Except as otherwise provided in Carrier’s tariffs or conditions of carriage –
things will occur. Then at the bottom
of that page your Honours will see what Cargolux’s general conditions
of carriage did
provide. They were very wide. They provided any liability.
So, again, this case turns not on the construction of clause 4 as it
appears in the air waybill before your Honours.
KIRBY J: Is there anything in the commentary of the texts on the Convention or is there anything in writings of scholars on the Convention or the Act that we should know of?
MR GREENWOOD: Your Honour, we have looked very widely and have not turned up anything which deals with the matter directly.
KIRBY J: Are there any Law Review commentaries on these decisions? I saw that the primary judge’s judgment has now been published in the Federal Law Reports, I gather.
MR GREENWOOD: Shawcross and Beaumont refers to the Court of Appeal’s decision, Justice Sheller’s decision, but not in a relevant way. It appears in the latest Shawcross and Beaumont at page 338 in chapter 7 in the context - - -
KIRBY J: Without any commentary on it.
MR GREENWOOD: Nothing relevant to this, your Honour. It refers to it in the context of the Quantum decision and the CMR Convention. Can I then go to Justice Sheller’s decision commencing at page 447 of the appeal book. His Honour examined the conditions of the air waybill, 448 and 449, and at 449 line 30 his Honour refers to clause 4 as speaking of “carriage” not of “air carriage” and, in our submission, that was where his Honour was firstly erring in treating the clause 4 as going beyond the provisions of the air waybill, which relates to air carriage.
His Honour then examines the relevant provisions of the
Convention and, in our submission, conflates the waybill with the
Richtungsverkehr
at page 452, where in paragraph 26 his Honour
acknowledges that it is not expressed in the air waybill. It says:
the parties had agreed that the goods would be available for collection and the carrier or its agent would deliver them at the under bond warehouse outside the curtilage of the airport and about 4 kilometres away.
That can only be, in our submission, pursuant to the
Richtungsverkehr. His Honour then says:
The parties had no choice in the matter - - -
GUMMOW J: Which
paragraph in the judgment?
MR GREENWOOD: Paragraph 26.
GUMMOW J: Thank you.
MR GREENWOOD: His
Honour then commences to refer to the fact that the goods were consolidated
cargo and so had to be taken from the airport to the
bonded warehouse. But, in
our submission, it is not right to say in a general way:
The parties had no choice in the matter.
True it is that the way these goods were consigned it was necessary once they arrived at the airport to be transferred to the bonded warehouse for customs clearance. However, the parties, of course, could have agreed otherwise and the goods could have been available for collection, if not through Schenker, then from somebody else by arrangement at the airport.
CALLINAN J: Is that right? Were they not consolidated? Would they not have needed to have been deconsolidated somewhere?
MR GREENWOOD: Yes, but that can be done at the airport if the carrier has the facilities to do it at the airport. It does not necessarily mean they have to be taken from the premises.
CALLINAN J: Would you not need evidence of that?
MR GREENWOOD: It is apparent from prior to 1986 when Schenker moved its warehouse off the airport to the new premises and, indeed - - -
CALLINAN J: Might that not have been because there was no space at the airport for any deconsolidation?
MR GREENWOOD: But there had been a warehouse at the airport up until 1986, so indeed in those circumstances everything goes straight through there and remains at the airport. If, for example, it had been the desire of Siemens, and indeed any other shipper using such a waybill, to say “We want to collect the goods at the airport”, then it is a case of arranging with the carrier to do that, and the waybill provides for that to occur. If the goods are to be carried to another place, then that is beyond the provisions of the waybill. So it is in circumstances where here the parties had agreed under the Richtungsverkehr that the goods would be taken to the bonded warehouse. It is true to say that that was the agreement. The fact that it was also a customs requirement is of no significance because the agreement of the parties was that that was what was to occur.
At 453 his Honour refers to this
acknowledgement that in this case, by reason of the agreement that the parties
had already made,
that the goods had to be taken to the deconsolidation point.
His Honour says at paragraph 28:
To effect delivery in accordance with the HAWB and the instructions of the shipper, the carrier was bound to arrange for the goods to be carried to the under bond warehouse and therefore bound within the meaning of cl 1 to perform a service incidental to the air carriage.
That is, in our respectful submission, an example of where his Honour has again run the two together. On the one hand, the delivery in accordance with the house air waybill was to the airport. Delivery in accordance with the shipper under the Richtungsverkehr was to the warehouse and it was not within the meaning of clause 1 a service incidental to the air carriage.
Paragraph 29, then his Honour refers to:
Clause 2.1 of the HAWB is consistent with part of the carriage to be performed under the HAWB being subject to the rules relating to liability.
That can only be the case if it is air carriage and yet
his Honour, thereafter, treats it as not relating to air carriage.
Your Honours
will see that at 453 Mr Justice Sheller goes to
Quantum Corporation. As I have already adverted to, that was a case that
was determined on the basis of the general conditions of contract of Air France,
not on the provisions of clause 4. At the end of the analysis of the
reliance on Quantum at page 458 his Honour concludes simply by
saying at line 15:
For like reason it seems to me here that the HAWB and in particular cl 4 was not limited in its operation to carriage by air.
It does not at any stage indicate how the carriage under the air waybill could be other than carriage by air. Then in the next sentence his Honour relies on clause 11 as if clause 11 provided for delivery to the warehouse, as distinct from the delivery that was required under the air waybill at the airport.
Your Honours will then see that there is reference by Justice Sheller to Aerofloral and Read-Rite and for the reasons I have already stated we would submit that the reasoning is not sound. We have provided to each of your Honours a reference to a case of HIH Marine Insurance Services.
McHUGH ACJ: For what purpose?
MR GREENWOOD: To bring it to your Honours’ attention as a case that seems at first glance to have some relevance. We do not rely upon it. In our submission, it is wrong. However, we wanted to bring it to your Honours’ attention. It runs together the notions of carriage and services incidental to carriages if they are the same. It may be that I can deal with it in reply if my friend relies upon it in support of the position, but what it does is it provides, as we submit the respondents’ submissions effectively provide, for using the word “carriage” in different ways within the same waybill that are - - -
KIRBY J:
The first holding says that:
The Warsaw Convention’s limitation . . . did not apply to loss from theft in a warehouse outside the geographical borders of the airport –
That seems to favour your
conclusion.
MR GREENWOOD: No. What it seeks to do, though, is it seeks to apply clause 4 then, your Honour.
KIRBY J: I have not read this. I will just have to look at it.
MR
GREENWOOD: If your Honour goes to 897, at the bottom of the left
column reference is made to:
Paragraph 1 implicitly defines “air carriage” to include “incidental” services –
The same definition as here where they are differentiated.
KIRBY J: Given that nobody wants to leave their goods lingering at an airport, given that the whole point of air transport is to get goods quickly - that is the very point of that form of cargo - given, therefore, that it is essential to get goods to and from the airport, if there is an ambiguity why would one not regard the incidental journeys as incidental to the air transport?
MR GREENWOOD: Because the incidental service has to be within the carriage contemplated by the air waybill.
KIRBY J: Yes, but that is the international air transport. Let that be the contemplation, why is it not incidental to that to get it to and from the airport, that being the whole point.
MR GREENWOOD: With respect, the air waybill provides from airport to airport.
KIRBY J: I realise that, but that is no use to anyone unless you happen to be an airway carrier yourself. It is useless.
MR GREENWOOD: But before and after that domestic law applies. In relation to that period the Convention applies if it is international carriage. Before and after that the parties make their own agreement and arrangements pursuant to whatever arrangements they wish; limitation clause, exclusion clauses, whatever. So one needs to then say, “Well, what was the intention of the parties? Where’s their agreement?”, in relation to domestic law, “Where’s their conditions of contract?” and that is what is omitting here.
By extending the waybill and saying limitation provisions in that can apply into the domestic arena, one is making then uncertain the extent to which that can apply. By saying on the front of the waybill, “Destination Melbourne” but actually it meant Perth because the goods were really going to go to Perth, provides no commercial certainty or sense. And in effect what has been provided by Victoria Sales decision is this notion of it applies only to the limits of the airport, and what this decision seeks to do is to say, “That doesn’t need to be the case in a commercial contractual arrangement between the parties” and indeed “carriage” in clause 4 can mean something quite different to what it would mean if there was Warsaw Convention carriage.
KIRBY J: On the one hand one would think that there would be commercial sense in having a single document because otherwise you have to perhaps have a separate one for Germany and a separate one for Australia because the law will be different in each, but then on the other hand the mischief to which the Convention is addressed and the statute is addressed is the particular shared international concern about liability for the actual carriage by international air.
MR GREENWOOD: During a certain period, as defined by 18.2 of the Convention.
McHUGH ACJ: Well, Emirates, for example, sends a car to pick up their first-class and business-class passengers. If you extended the provisions of the Convention or similar arrangements as in this waybill, then it would seem to follow that there would be limitations on any accidents happening during the journey.
MR GREENWOOD: To the airport?
McHUGH ACJ: Yes, to the airport.
MR GREENWOOD: In conflict to domestic law.
McHUGH ACJ: Yes.
GUMMOW J: Now, Gateway was argued on the basis that
appears at 899 in the left-hand column at the bottom:
It is undisputed that Gateway was acting as an agent for China Airlines when the hard disk drives were stolen.
MR GREENWOOD: Yes, so they were seeking to gain the benefit back through of the provisions of the air waybill, which incidentally is in a different term again. At 897 point 2 right-hand column the wording of clause 4 there is different, it is “in any carriage”.
GUMMOW J: Yes, there is no doubt China Airlines was an air carrier under the Conventions.
MR GREENWOOD: I am conscious of the time, can I finish going back to Justice Gummow’s point about the applicability of the Warsaw Convention. It seems to us that it does not much matter to the determination of the appeal in this respect. If the air waybill terminates at the airport, then the road carriage segment is outside the air waybill to be determined by the ordinary contractual position between the parties, in this case, where there is no limitation provision. The adoption of the Warsaw Convention in Australian law is for the purposes of international carriage, so it would apply to this international carriage, but if the freight forwarder is not a carrier, the provisions of the Warsaw Convention dictating what the carrier must do would not apply to the freight forwarder, but that does not arise in this case. If the Court pleases.
McHUGH ACJ: Thank
you, Mr Greenwood. Yes, Mr Meagher.
MR MEAGHER: Thank you,
your Honours. Could I attempt to deal first with the matter which
your Honour Justice Gummow has raised with respect to
the application
of the Convention to contracting carriers as distinct from actual carriers. The
answer to the question with respect
to this matter lies in Schedule 3 to the
Act, which sets forth what is referred to as the Guadalajara Convention of 1961.
It is given
effect as part of our municipal law by section 25A of the Act. It
is at page 40 of the reprint, Schedule 3.
KIRBY J: Where does this fit into your theory of the case?
MR MEAGHER: We think it is necessary to first understand whether the Convention applied merely as a matter of contract or whether it also applied the force of Australian law, and the answer is that it applies both the force of Australian law and as a matter of contract.
KIRBY J: And if it applies as a matter of law, you do not need the contract. It just takes operation according to written law which has primacy.
MR MEAGHER: But the issue in the proceeding, your Honour, is whether, in circumstances where the rules of the Convention relating to liability no longer apply, the limitation of liability in clause 4 is available to my client. That is the critical question. I will seek to explain how that issue arises, but I first thought I should address this question of Australian law.
What the Guadalajara Convention provides, in effect, is that whether the performed carriage be Warsaw carriage or Warsaw-Hague carriage, the Convention in its terms applies both to the actual carrier and to the contracting carrier. That is the effect of Articles 1 and 2 of the Guadalajara Convention and, for the record, the Convention became effective as between Australia and Germany, so far as Australia was concerned, on 1 May 1964, and so far as Germany was concerned, on 31 May 1964.
GUMMOW J: There is no reference for the Guadalajara Convention in the instrument we are looking at.
MR MEAGHER: Your Honour means the air waybill?
GUMMOW J: Yes.
MR MEAGHER: No, there is not, your Honour. What the Guadalajara Convention in effect does by Article II - - -
GUMMOW J: Which schedule is it?
MR MEAGHER: It is Schedule 3. Article I defines
“Warsaw Convention” as the original Convention or the Convention
“as amended”.
It defines “contracting carrier” as
someone who “makes an agreement for carriage governed by the Warsaw
Convention”
and it defines “actual carrier” as a person who
“performs the whole or part of” that contracted carriage.
And then
Article II provides that:
If an actual carrier performs the whole or part of carriage . . . both the contracting carrier and the actual carrier shall . . . be subject to the rules of the Warsaw Convention –
whether it be the Warsaw original Convention or the Warsaw as amended.
GUMMOW J: So, how do you read Article I on the facts of this case?
MR MEAGHER: The contracting carrier was Schenker Germany from Germany to Melbourne. The actual carrier was Singapore Airlines from Frankfurt to Melbourne. The carriage contemplated by the contract was carriage from Berlin to Melbourne, which is Warsaw/Hague carriage, as is the carriage from Frankfurt to Melbourne. Article II provides that the contracting carrier is subject to the rules of the relevant Warsaw Convention “for the whole of the carriage contemplated in the agreement” and “the latter”, that is, the actual carrier, is subject to the rules “for the carriage” which it performs.
GUMMOW J: But the relevant carriage still has to carriage governed by the Convention?
MR MEAGHER: That is so and that ultimately turns on the agreement between the parties as to the places of departure and destination and whether those places are in states which are high contracting parties to one or both of the Conventions.
GUMMOW J: And whether they are beyond air carriage.
MR MEAGHER: I am sorry.
GUMMOW J: And whether there are activities beyond air carriage involved.
MR MEAGHER: I am not sure if I follow.
GUMMOW J: You are not saying this Convention applies to the whole of the activities under this contract, are you?
MR MEAGHER: No, we are not, and I will have to explain the argument because perhaps the issue needs to be identified precisely.
GUMMOW J: Yes, a bit late in the day.
MR MEAGHER: If I could take your Honours to the air waybill to identify the issue and then state what our position is in relation to it. Clause 2 – and I should go back a step and I will address this point more fully shortly – our submission is that the relevant contract for carriage was the contract evidenced by the air waybill, subject to any variations to the terms of the air waybill which were necessary by virtue of the terms of the Richtungsverkehr.
GUMMOW J: Is it not the other way around?
MR MEAGHER: With respect, no, your Honour. The Richtungsverkehr is either characterised as a standing offer between these parties as to the rate which will be charged and the services which will be provided for carriage from A to B, or an agreement that those will be the terms upon which contracts will be entered into. The evidence indicated that from the point of view of the Siemens companies there was a promise of exclusivity in the sense that they would send all their shipments via Schenker. It was in return for that that Schenker agreed to charge a flat rate for the carriage of these consignments. The evidence also indicates that on every occasion that goods were shipped an air waybill in the same terms as this air waybill was issued.
GUMMOW J: This is contrary to the way the trial judge saw it, is it not?
MR MEAGHER: It is partly, your Honour. I think, if one can respectfully say there is a lack of clarity in exactly how the trial judge ultimately dealt with this issue and the matter to some extent - - -
GUMMOW J: I would not blame him.
MR MEAGHER: - - - remains that way in the Court of Appeal. But if your Honours go back to the pleading in volume 1 of the appeal book at page 5, the claim by Siemens Australia against Schenker Germany was pleaded in paragraph 2 and was a contract made on 9 December 1996 which is the date of the issue of the house air waybill. It alleged a contract between Schenker Germany and Siemens Australia. Now, that is the position which we contend for as an accurate analysis of the contractual relation, that is, one which arose between Schenker Germany and Siemens Australia by the agency of Siemens Germany for the carriage of the goods from Berlin to Melbourne.
HEYDON J: Yes, you denied that allegation in your defence.
MR MEAGHER: We did.
HEYDON J: Do you withdraw that denial?
MR MEAGHER: To the extent, yes, your Honour.
GUMMOW J: You denied it on page 10, paragraph 2.
MR MEAGHER: Yes, but we submit that that is the correct identification of the time when the contract was made and the parties to it. The contract itself was evidenced, as I have said, by the house air waybill and - - -
McHUGH ACJ: It cannot be the total arrangement, can it, on any view? The contract of carriage was not from the airport of Berlin. It must have been from the store of - - -
MR MEAGHER: No. If your Honours just go to the house air waybill - - -
CALLINAN J: It was Frankfurt first, was it not?
MR MEAGHER: No. If your Honours go
to the house air waybill, at the top, as your Honours have already noted, it
identifies the carrier as Schenker
Germany and in the box immediately under that
where there is the stamp “Cargo Automation” it records that:
It is agreed that the goods described herein are accepted in apparent good order and condition (except as noted) for carriage.
Then there is a
provision which is a liberty to carry by “other means, including by
road”. If your Honours go down to
the foot of the document, it identifies
again Schenker Germany as carrier, the date of issue as 9 December 1996 and
the place of
issue as Berlin Tegel Airport. Now, as your Honours have already
observed, in the - - -
GUMMOW J: Where do you get “place of issue”?
MR MEAGHER: The word “Place” appears in the form right at the foot below “BERLIN-TEGEL-AIRPORT”.
GUMMOW J: Thank you.
McHUGH ACJ: But what contract governed the carriage from Frankfurt to Berlin?
MR MEAGHER: From Berlin to Frankfurt?
McHUGH ACJ: Yes.
MR MEAGHER: This contract, your Honour. This contract in clause 8, for example, contains a liberty to use alternate carriers in alternate means of transportation.
McHUGH ACJ: I will put it another way. What contract governed the carriage of the goods to Berlin?
MR MEAGHER: That was a separate contract which was apparently entered into between Schenker Germany and Siemens.
McHUGH ACJ: Yes, but you want to segregate that part of the contract so that is a separate contract, but at the other end you do not want to separate it.
MR MEAGHER: With respect, no, your Honour.
GUMMOW J: But the Siemens factory at Berlin is up on the top left-hand corner, is it not? It is their works at Siemensdamm 62.
MR MEAGHER: As the address of the shipper.
GUMMOW J: It is a very prominent place in Berlin.
MR MEAGHER: I have not been there, your Honour. That identifies the address of the shipper.
GUMMOW J: And what is accepted – accepted where? The goods described are accepted where?
MR MEAGHER: They are accepted at Berlin Tegel Airport. That is the place.
GUMMOW J: How did they get there? Under this other contract?
MR MEAGHER: No. I will take your Honours to that. Perhaps I should take your Honours to the documents which deal with the Richtungsverkehr to explain how the position arose. If I could take your Honours first to page 71, there is a document the Court has gone to before, but could I take your Honours to them again to indicate the extent to which they relevantly modify or qualify the terms of the house air waybill.
At the foot of page 71, first is “Receipt, handling and despatch”. The place of that is not identified. Then “Transport to Frankfurt” from the place of receipt. Then “Consolidation”, so that the goods have to be consolidated before they are shipped by an actual carrier. Then Schenker looks after the freight costs from Frankfurt to Melbourne. At Melbourne when this consignment arrives, as I will take your Honours to later, as a consolidated consignment it could not be delivered in any other way than at the Schenker bond store.
In circumstances where the house air waybill requires delivery once the goods arrive at the place of destination, it is our submission that the goods must be delivered at the place of destination in accordance with the custom and laws of that place. The customs and laws of Melbourne relevantly required that this had to be delivered into the bond store. The bond store was but a few metres outside the perimeter of the airport but four kilometres by road. The reason the bond store was moved to that position was in part because of space problems within the airport. It is not uncommon, as some of the other cases which the Court has been referred to indicate, for ground-handling agents and freight forwarders to have premises outside the perimeter of the airport itself.
Could I just go back to 71. Once the goods arrive at Melbourne, they then are transited to the customs-controlled warehouse – that is the Schenker (Australia) warehouse – then they are broken down, they are cleared through customs and handed over to a customs agent, who is the customs agent of the consignee.
If your Honours go then to 17 May 1991 at page 99,
this is another document which records this arrangement, and again the first
thing:
1. Into store handling/transit storage/ex store handling of cargo at the origin airport.
So that the starting point is what is described as an origin
airport; in this case it is Berlin Tegel. Then:
2. Transport to the gateway airport Frankfurt -
where the first air carriage happens -
3. Consolidation . . .
5. Airfreight Frankfurt - Melbourne.
6. Transfer from carrier into our “bonded warehouse” at destination.
7. Break-bulk -
et cetera. That is a document which was 17 May 1991. If
your Honours then go forward to page 102, which is a document of May 1994,
the first paragraph - and this is a communication between the Australian
companies:
We refer to our recent round of discussions dealing with the level of service and flights available from Germany to Australia -
and then in the third paragraph:
explain and reinforce . . . maintain the viability of the Siemens “Richtungsverkehr” by maintaining a traffic freeway for both companies -
Then at the bottom of that page:
The key issue is the fact that the “Richtungsverkehr” must encompass a variety of services from the origin city in Germany to hand-over of the goods from Schenker stores in Australia at a flat rate -
Then over the page there was a reference to the updated
services. Then on the following page, 104, my friend took the Court to this.
The second paragraph there is “an absolute guarantee of uplift” and
then the next paragraph:
The system allows for despatch of goods from a large number of Siemens factories to Schenker whilst instructions are received from central offices eg, Erlangen.
The rate is struck on a compromise to allow the Siemens factories to despatch to the closest Schenker airfreight office including offices with no airports. The subsequent transport to the gateway airport Frankfurt is included in the “Richtungsverkehr” rate and the system even allows for instructions to be received at Frankfurt.
Then the remaining matter of consolidation is again referred to. Now, could I then - - -
McHUGH ACJ: The paragraph
at line 20 indicates that the head agreement covers the journey from factory to
Siemens’ Melbourne factory:
The rate is struck on a compromise to allow the Siemens factories to despatch to the closest Schenker airfreight office including offices with no airports.
MR MEAGHER: With respect, no, your Honour. Perhaps I should take the Court first to 153. Page 153 is the invoice from Schenker - the evidence indicated that it was from Schenker (Australia) on behalf of Schenker Germany to Siemens Australia - this is for the carriage - and it refers to the house air waybill in the middle by its number, and your Honours will see the “KG RATE 5.05”. That is the relevant Richtungsverkehr rate. The rate is charged on the weight of the cargo and it is, as I have submitted, with respect to the carriage which is the subject of the house air waybill.
McHUGH ACJ: No, but that rate covers the cost of carrying the goods from Siemens factories to the closest Schenker office.
MR MEAGHER: With respect, no, your Honour. At page 146, if your Honour goes back to that – I will find the witness’ evidence.
GUMMOW J: Is 153 referring to this actual transaction?
MR MEAGHER: Yes.
GUMMOW J: Where do we see the number of the bill?
HEYDON J: It is about line 23, is it not, BER-14010624?
MR MEAGHER: Yes, line 23 on the right-hand side, “HAWB NO”.
GUMMOW J: Yes, 14010624.
MR MEAGHER: Yes.
GUMMOW J: Where do we see that in the instrument?
HEYDON J: About the third line, top right-hand corner.
MR MEAGHER: Your Honour sees it at the top right-hand part of the air waybill. It says, “BER-14010624”.
GUMMOW J: Thank you.
MR MEAGHER: If your Honours go back to page 146, that is a separate invoice which was issued by Schenker Germany to Siemens Germany in respect of the carriage from the Siemens - - -
McHUGH ACJ: But it may be. One can accept that, but it misses the point. Let it be assumed, for instance, that Siemens ring up Schenker in Germany and they say, “We have these diesel engines here and we want them transferred”, and Schenker say, “We’re not coming”. Now, Siemens will then want to sue them. What do they sue them on? They sue them on the agreement that is set out at pages 71, 99 and 104, the agreement that you said that there was this general contract between them, that in consideration of them getting exclusive dealing they would do the work at a particular fee. That is the general contract that gives rise to the obligations. These subcontracts are more detailed implementations of that general agreement, and that is the way the judge approached it.
GUMMOW J: Did you appeal against that?
MR MEAGHER: I am not sure – no, your Honour, but - - -
McHUGH ACJ: Could I have an answer to the question I asked? If Schenkers refused to take delivery at some place in Germany, what contract, if any, would Siemens sue on?
MR MEAGHER: If there was an overarching contract, they would sue on that contract on the failure to accept for carriage, or, alternatively, on the failure, in effect, to enter into a contract of carriage with respect to the tendered goods.
McHUGH ACJ: What would they claim their damages to be? It would be the damages of failing to carry those goods from the place in Germany to Melbourne.
MR MEAGHER: With respect, no, your Honour, the damages would be for the failure to enter into a contract to do so. That is the relevant distinction.
McHUGH ACJ: That indicates that there is no head contract at all on your case, that all that happens is a series of ad hoc contracts.
MR MEAGHER: Whether it is that or - - -
McHUGH ACJ: It has to be, on your case.
MR MEAGHER: With respect, no, your Honour. One can have a standing offer which is revocable at will, there being no agreement that it remain open for any period of time. Alternatively, one can have a standing offer which is the subject of an agreement that it remain open for a period of time and perhaps that the consideration for the offer being made and remaining open being that there be exclusive shipment by Schenker.
McHUGH ACJ: Yes, I know, but you are in effect saying that this arrangement that has existed for 100 years is like an offer of a reward, it can be withdrawn at any time even though you set out - - -
MR MEAGHER: Your Honour, that appears to have been the position if, for example, your Honour goes to page 120 of the appeal book volume 1, that appears to have been the position.
CALLINAN J: Mr Meagher, why could not, if carriage was not accepted, Siemens sue for the difference between whatever it cost then to send with some other carrier and the appropriate list rate at page 105?
MR MEAGHER: They could, but they would be suing for damages for breach of a promise to enter into a contract on particular terms, that is a contract for carriage, and the damages would be measured by the difference between the contract that they should have got and the contract which they had to go into the market and get.
CALLINAN J: There is sufficient certainty to assess the damages, because you just look at 105 and what the actual rate charged was.
MR MEAGHER: Yes. There does not appear to have been any detailed analysis of this contractual relation in the trial, maybe because the matter was pleaded on the basis that the contract was made when the goods were tendered and accepted for carriage and the air waybill issued.
McHUGH ACJ: But, in any event, the judge made a finding, there was no appeal against that finding, and there is no notice of contention in this Court.
MR MEAGHER: Could I just deal with what the trial
judge does say, because it is necessary to go to volume 3. At the foot of page
407 his Honour
says:
It must be accepted that the “Richtungsverkehr” arrangements, as in force from time to time, had contractual effect among the parties in relation to each individual consignment –
which is consistent with there being a contract for carriage
made when goods were tendered and accepted for carriage. At page 408
his Honour then says:
It must also be accepted that when, in accordance with practice, a house air waybill was issued in respect of particular transportation, its terms - - -
GUMMOW J: We looked at that this morning and we looked at the word “supplemented” and we paused at it.
MR
MEAGHER: In our submission, what his Honour says at the foot of page
407 is correct, that there was a separate contract in relation to each
consignment and that if one looked to see what the terms of that contract were,
one would go first to the document which was issued
on the acceptance of the
goods, which, on the face of it, describes itself as being something containing
conditions of contract and
which, on its reverse side, sets out conditions of
contract. When one looks at the terms of the Richtungsverkehr, for example, at
page 99, to see how they mesh with the air waybill, at 1:
Into store handling/transit storage/ex store handling of cargo at the origin airport -
the origin airport relevantly being Berlin Tegel. Then “Transport to the gateway airport Frankfurt”, so that is the first carriage which Schenker Germany has to perform. Then “Consolidation”, so that it would not be sufficient for Schenker in performing the contract evidence by the house air waybill to merely send the goods unconsolidated; they have to be consolidated. Then they are consigned by air from Frankfurt to Melbourne and the air waybill tells you that that is going to happen by a Singapore Airlines flight 7387. If one goes to the main air waybill, which is at - - -
GUMMOW J: Not entirely. Something is going to happen in Singapore on the next day. It starts off on the 12th, does it not, on 7387, and then it gets picked up on 7294 on the 13th?
MR MEAGHER: Yes, there must be a transit in Singapore, your Honour is correct.
GUMMOW J: I would have thought so. Where do we find the rate on the face of this instrument?
MR MEAGHER: There is no rate on the face of the house air waybill.
GUMMOW J: You have to go to appeal book page 105. Justice Callinan referred to it a few minutes ago.
MR MEAGHER: That is an earlier version.
GUMMOW J: Where is the current one?
MR MEAGHER: The one that was current at the time of this carriage is at page 126. Do your Honours have that?
GUMMOW J: Yes, thank you.
MR MEAGHER: And it tells you in relation to the Richtungsverkehr - - -
GUMMOW J: 5,05 Deutschmarks.
MR MEAGHER: - - - 5,05 Deutschmarks and if your Honours go to the invoice which is at page 153, your Honours will see that that is the rate which was charged. I should whilst I am on 153 point out that there is what is described there as an “FOB charge”. In fact, that was a fuel surcharge and the reason it was described as an FOB charge was because the computer did not provide for a fuel surcharge. The evidence about that is at page 30 of that appeal book.
Could I also, just whilst I am on this, take your Honours – this is really to seek to still make good the point that I was pressing with your Honour Acting Chief Justice McHugh – if I could take the Court to volume 2 of the appeal book, to page 175. This is paragraph 12 of the affidavit of a Mr Jones, who was the Siemens Australia shipping officer, and what he in effect says in paragraph 12 is that the contract for sale between Siemens Germany and Siemens Australia provided for “shipment of the goods from the FCA”, which is the modern term for “free on board” - - -
GUMMOW J: We have been down this track before. We have said on more than one occasion that appeal books should not contain passages struck out.
MR MEAGHER: The part that is struck out apparently is the third line, “This is a common arrangement”.
GUMMOW J: Yes, I know, it should not be there. Solicitors get paid a lot of money for preparing appeal books.
MR MEAGHER: The point I am seeking to make is that under the contractual arrangement between the Siemens companies, Siemens Germany had to deliver the consignment to Berlin Airport and thereafter the consignment and its carriage was at the cost of Siemens Australia. As your Honours will have observed from the pleading, the party who sued on the relevant contract was Siemens Australia. So to answer your Honour Justice McHugh’s earlier questions, the earlier contract, the document which evidences it being at page 146 of the appeal book, is a contract between Schenker Germany and Siemens Germany as part of Siemens Germany’s obligation to get the goods to the FCA point.
The carriage which was then undertaken by Schenker Germany under the terms of the house air waybill, for which Siemens Australia was invoiced, commenced at Berlin Airport. If your Honour looks at paragraph 14 of that affidavit at page 175 what I put is confirmed - - -
GUMMOW J: Is 13 struck out?
MR MEAGHER: Paragraph 13 was struck out as I
understand it. It says “NOT READ” I think:
14. It was usual practice for Siemens Ltd to request Siemens AG to negotiate rates on its behalf with carriers such as Schenker GmbH for the carriage from the FCA point -
not to the FCA point and that is what the Richtungsverkehr related to, that is carriage from what is described as the FCA point.
HEYDON J: Mr Jones gives evidence-in-chief about this on page 14, oral.
MR MEAGHER: Yes, your Honour. Whilst
we are on that, at the bottom of page 15 at line 45 there is reference to the
apparent exclusivity aspect
of this arrangement. Then the top of page 16, again
at line 10, again a reference to exclusivity. Then if your Honours then go
to page 22 at line 20:
the invoice would be issued by Schenker Australia to Siemens Australia; is that correct?
A. Correct.
Q. And that would be for the totality of the freight charges?
A. Yes.
Q. And there would effectively be a single payment for the freight which you understood meant freight for the carriage between the starting point in Germany and the end point at the Schenker warehouse in Melbourne?
A. From the FCA point in Germany.
Q. Yes?
A. Yes.
So that the starting point for the Richtungsverkehr arrangement was the FCA point, which here was Berlin Tegel.
GUMMOW J: Does the witness say that?
MR MEAGHER: Say “Berlin Tegel”, your Honour?
GUMMOW J: Yes.
MR MEAGHER: He certainly says it is the FCA point.
GUMMOW J: Where?
MR MEAGHER: At line 30 on page 22.
HEYDON J: Well, in his affidavit, page 175 line 14, he said “the FCA point at Berlin Airport”.
MR MEAGHER: Then that answers the question.
GUMMOW J: Thank you.
MR MEAGHER: So that when one looks at the contractual position we submit that, as I put earlier, it was for carriage from that point at Berlin Airport to Melbourne or Melbourne Airport on the terms of the house air waybill subject to the additional requirements, which were laid out in the standing offer which is described as the Richtungsverkehr.
McHUGH ACJ: On this theory, how did Schenker (Australia) come under any obligation to pick up the goods? They have no obligation whatever, because there was no pre-existing contract with them?
MR MEAGHER: The answer is that to the extent that they undertook services in performance of that contract, they did so as a servant or agent of Schenker Germany.
GUMMOW J: You have to be careful about that. You do not want Schenker Germany doing business in Australia, do you, and liable to register?
MR MEAGHER: If your Honours go to page 166 of volume 1 - - -
GUMMOW J: You have to be careful about things like that.
MR MEAGHER: - - - the main air waybill, which is set out there, names Schenker Germany as consignor and Schenker (Australia) as consignee and describes the flight as Frankfurt to Melbourne and the airport of destination Melbourne. The point is that under the terms of that air waybill, Schenker (Australia) had to take delivery of the goods.
McHUGH ACJ: Yes, they may have, as between it and Singapore Airlines, but what about as between it and Siemens?
MR MEAGHER: As between it and Siemens, there was no contract with respect to the carriage of the goods.
McHUGH ACJ: So the case that they have pleaded then must depend not on contract at all, insofar as Schenker (Australia) is concerned.
MR MEAGHER: That is right, your Honour. They were sued - - -
McHUGH ACJ: It has to depend purely on the fact that they were not even bailees for reward.
MR MEAGHER: They were sued in negligence and as bailees for reward, but they were not sued as parties to the contract for carriage.
McHUGH ACJ: But they were not bailees for reward, were they?
MR MEAGHER: They were not bailees for reward qua Siemens, that is so.
McHUGH ACJ: What do you mean qua Siemens? They were not?
MR MEAGHER: They were not.
McHUGH ACJ: Yes.
MR MEAGHER: So they are sued as bailees or in negligence. They are not sued as parties to the contract of carriage. It was for that reason that we relied on clause 7, which is the Himalaya clause, in the air waybill and it was on that basis that Justice Sheller, at least, decided that Schenker (Australia) had the benefit of the limitation in the air waybill.
McHUGH ACJ: But it also means, contrary to what the judge found, that Schenker (Australia) were not a party to this arrangement, does it not?
MR MEAGHER: They were not a party to this contract of carriage. They may have been a party to the standing arrangement, but they were not a party to the contract of carriage.
HEYDON J: He seems to have thought that the Richtungsverkehr and the waybill, taken together, created a contract from case to case, from instance to instance, from order to order, so you might get some contractual duties, taking those two things together.
MR MEAGHER: One might, although - - -
HEYDON J: Page 407 at the bottom.
MR MEAGHER: Yes, and the reference to “composite contract” on page 408 suggests one contract with several promises between parties, perhaps.
CALLINAN J: Just before you leave that, Mr Meagher, on that question of parties to the contract, what about what Justice Meagher said at page 447, in paragraph 11?
MR MEAGHER: His Honour appears to have accepted as correct the trial judge’s analysis, although it is not clear precisely what is meant.
GUMMOW J: I thought you do too, that is why you have given up the Himalaya point?
MR MEAGHER: No, we have not given up the Himalaya clause. My friends have not sought to argue that Schenker (Australia) does not have the benefit of the bill, although it is not a party to it. But, in a sense, whether one treats the contract of carriage with respect to this consignment as one between Schenker Germany and Siemens Australia or as between those two parties and Schenker (Australia) to the extent that it does anything under the bill, the issue still remains as to the proper construction of the bill.
McHUGH ACJ: You might turn to that.
MR MEAGHER: Yes, before I do that, could I just make
these submissions with respect to the subject of delivery because it is
important to understand
what the position was in relation to delivery at
Melbourne before one considers the issue which arises in relation to the
construction
of the bill. Justice Sheller at pages 452 and 453 correctly
describes the position and at paragraph 28 on page 453, he records the
concession which was made in the Court of Appeal by the appellants in this
Court:
that it was not possible for the parties to agree for the goods to be collected from the carrier at any earlier or different point in the transportation.
HEYDON J: That is what he means by “The parties had no choice in the matter” in paragraph 26.
MR MEAGHER: That is what he means and the reason for that was that the shipment under the house air waybill was consolidated and for those reasons could only be delivered from the Schenker bonded warehouse. If one looks at the main air way bill, which is in volume 1 at page 166, it bears a stamp which confirms that, that is, “Bond Delivery Approved”. That air waybill also indicates above that stamp that the cargo was a “Consolidation Cargo”; and the reference to Qantas Freight tells us that Qantas was the ground-handling agent of Singapore Airlines in Melbourne and that the consignment first went into the Qantas Freight terminal.
Now, I should point this out to the Court. If the Court goes back to Justice Sheller’s reasons at paragraph 27, there was – and this is really to correct a matter which is incorrectly recorded in the evidence before the Court of Appeal and before the trial judge – the evidence of Mr Barnard which was in volume 2 at pages 262 to 263 - your Honours do not need to go to that, I do not think - was that the relevant customs requirements arose in relation to commissions under section 40AA of the Customs Act. In fact, by the time of this consignment in December 1996, that section had been repealed and although the factual position had not changed, the statutory regime had.
The relevant provisions were sections 71E(1) and (2)(a) of that Act which provided for permissions to move goods by computer generated entires and section 71L(3) and (4) of that Act. So that whilst the statutory regime under which the requirements arose was incorrectly stated in the evidence, the fact was correctly stated, that is, because it was a consolidated consignment the only way it could be delivered was into a bond store.
That fact was known to the parties and was part of
the contemplation of the parties. If I could take your Honours to
volume 1 in
the evidence of Mr Jones at page 21, starting at
line 25 through to line 44. Also, in volume 2 at page 177
in paragraph 27 of Mr
Jones’ statement he said:
With the subject shipment, as with all shipments carried by Schenker GmbH from Siemens AG to Siemens Ltd, the destination point of the carriage agreed with Schenker GmbH –
he does not seem to have been in any doubt as to who the
contracting carrier was –
was the deconsolidation point in Australia, which meant either a Schenker Australia warehouse or another customs bonded store. To the best of my knowledge, deconsolidation always took place in a bonded store away from the airport. That occurred with the subject shipment where it was then made available for pick up by Siemens Ltd or our agent.
So that not only was the position with respect to delivery that it had to be delivered at the bond store but that was what the parties contemplated and agreed. Could I then turn to the question of the construction of the air waybill. There appear to be three issues which the trial judge addressed and which are pressed before this Court as to why my clients do not have the benefit of the limitation in clause 4. The first is that as a matter of contract the house air waybill only regulated carriage activities up to the point where the cargo left the airport gate.
The basis of that submission appears to be that because Article 18, paragraph 2 of the Warsaw Convention describes carriage by air in terms of a period which ends outside the airport the house air waybill should be construed as only regulating activities within the airport. That is the first issue.
The second issue, if that issue be decided against the appellants, is whether in clause 4 “carriage” includes the land carriage which was undertaken for the purpose of giving delivery under this contract of carriage. If that question is decided in our favour, the third issue which arises is whether it can be said that that carriage was carriage to which the Warsaw Convention did not apply, and that involves understanding what is meant by the words “to which the Warsaw Convention does not apply” in clause 4.
Having
introduced those issues, could I first address the questions to the scope of the
air waybill, remembering that a not dissimilar
question arose in relation to the
stevedores claim in Port Jackson Stevedoring v Salmond & Spraggon.
But first, if your Honours go to clause 9 of the air waybill, it contains
an agreement by the carrier that:
Subject to the conditions herein, the carrier shall be liable for the goods during the period they are in its charge or the charge of its agent.
So that, on the face of the bill, clause 9 purports to make the carrier liable for the goods whilst they are in its charge and, on the face of it, we would submit that the bill should be treated as governing the relationship between the parties whilst that remains the position.
Then
could I take your Honours to clause 11, which is the clause my friend
apparently relies upon. Clause 11, as has been observed,
seeks to give effect
to what are Articles 12 and 13 of the Warsaw Convention. It requires
that:
Notice of arrival of goods will be given promptly . . . On arrival of the goods at the place of destination . . . delivery will be made to, or in accordance with the instructions of the consignee.
There is therefore a question as to what is the place of
destination. If one goes to the face of the bill, it is either Melbourne
or
Melbourne Airport, being the airport of destination. We submit that Melbourne
sufficiently answers the description of the place
of destination, but even if it
is Melbourne Airport, there was still delivery made under clause 11.
Clause 11 requires that on arrival
at that place:
delivery will be made to, or in accordance with the instructions of the consignee.
In our submission, to make this work at a
commercial level, the delivery which has to be made when the goods have arrived
at the place
of destination has to be in accordance with the customs and laws of
that place. If those customs and laws require that delivery
be made outside the
airport, or to a place outside the airport, then, in our submission, clause 11
is satisfied and there is delivery
in accordance with the obligation.
Alternatively, clause 11 provides for delivery:
in accordance with the instructions of the consignee.
We submit that here the instructions of the consignee were that delivery should take place from the bond store and, accordingly, it was necessary for the goods to be carried to the bond store.
GUMMOW J: Now, if you are right about the first construction, which for the moment seems to be right because it had to accommodate the local law about customs and the bond store, if you are right about the first construction of 11 what flows from that?
MR MEAGHER: Then at the time that - do your Honours have my - - -
HEYDON J: That was a piece of carriage to which the Warsaw Convention does not apply and, therefore - - -
MR MEAGHER: Clause 4 applies.
HEYDON J: Clause 4, yes.
MR MEAGHER: That is the short answer. I was going to try and answer it in a longer way but that is the short answer.
GUMMOW J: Why does the Warsaw Convention not apply to it?
McHUGH ACJ: Because it stops at the aerodrome.
MR MEAGHER: Because the rules relating to liability for the Convention, which are set down in Chapter III of the Convention, only apply whilst the cargo is in the charge of the carrier, either in an aircraft or in an airport. Perhaps I should take your Honours - - -
GUMMOW J: So the Convention is defective in a way because it does not accommodate bond systems outside airports.
MR MEAGHER: It is not necessarily defective. The Convention was a trade-off obviously made at a time when carriage was in its infancy.
GUMMOW J: Yes, and they simply were not thinking about this problem.
MR MEAGHER: No. What I was going to do was to ask your Honours to go to the coloured map, which is at the back of our submissions, so that your Honours can see what happened. Your Honours will see that there is a number 1 above the pink “Melbourne Airport” and that is the Qantas freight terminal. The red line indicates the route that this vehicle took to get to the Schenker warehouse, which is indicated by the number 3. It is just outside the perimeter. On the case which the appellant maintains, the Convention applied when Schenker (Australia) collected the goods from the Qantas freight terminal, put them on the back of the truck and started to drive the truck to the gate of the terminal. Once the truck passed through the gate of the terminal the Convention ceased to apply. So that it was - one could use the vernacular - open slather. We were not liable - - -
KIRBY J: That is one way to describe it. The other is that you are responsible for what you do - - -
MR MEAGHER: And, indeed, under the terms of the bill because the goods are in our charge we accept liability but we seek to limit our liability under clause 4 to an amount which was approximately equivalent to the Convention amount in any event. So that on the case which the appellant makes, once we left the airport gate and started to drive towards the terminal for the purpose of giving delivery, we cease to be subject to the Convention and we cease to have the benefit of the bill because, on their first argument, the bill did not apply at all because the activity was beyond its scope. Now, our first answer - - -
GUMMOW J: And what the primary judge did was read the words “by air” after the word “carriage” on line 2 in clause 4.
MR MEAGHER: Yes, and that is really the next issue that one comes to, and that is what is meant by “in carriage”. One has to start I suppose at clause 1 which does not identify “carriage” but identifies “carrier”. It describes “carriers” as people who “carry or undertake to carry the goods hereunder or perform any other services incidental to such air carriage”. Now, services incidental to such air carriage would presumably include loading, unloading, carriage to the aircraft within an aerodrome carriage, from the aircraft - - -
GUMMOW J: That first sentence of clause 1 does not come out of the Convention, does it?
MR MEAGHER: No, there is no definition. But what your Honours will remember is that in Article 18 paragraph 3 there is an express contemplation of a contract of carriage to which the Convention applies which involves land carriage beyond the airport for the purpose of giving delivery, which is precisely this case.
McHUGH ACJ: Except that the contrary was proved in this case.
MR MEAGHER: I am sorry, your Honour?
McHUGH ACJ: The contrary was proved in this case, that the damage occurred.
MR MEAGHER: Yes, but the presumption provision in a convention which contemplates – may I go back a step. The Convention does not operate to imply terms into contracts. What it does is it operates upon actual carriage, but it assumes an agreement, because if there is not an agreement then it cannot be international carriage. Article 18 contemplates that the agreement evidenced by the air waybill could be for carriage beyond the aerodrome, and it does so expressly. That is this case. We say simply because that land carriage is carriage, but it is not carriage to which the rules relating to liability apply, clause 4 is satisfied, in the sense that it is carriage to which the Warsaw Convention does not apply.
GUMMOW J: Yes, it does not apply in the sense of “is expressed not to apply”.
MR MEAGHER: Yes, but it can be said at one level that the Warsaw Convention does apply, because, even if the air carriage has happened, articles like Articles 12 and 13, which deal with delivery and which give rights to people who may not be parties to the contract, are provisions of the Convention which in that sense apply.
Our submission is – and this is the way it has been construed in those American cases – that in clause 4 the words to which the Warsaw Convention does not apply are talking about the rules relating to liability, and one gets that if one goes back to clause 2.1. That is the starting point. It says, “Carriage hereunder”, which we submit means carriage under this bill, or the carriage called for by this contract. Could I stop there to have your Honours note that under clause 8 the same expression is used, and it makes it clear that it is talking in the sense of the movement of the goods from Berlin to Melbourne and that it does not have to be air carriage, although that is obviously the primary means of transportation.
So that going back to 2.1, “Carriage
hereunder”, that is, carriage undertaken in performance of this contract,
“is
subject to the rules relating to liability”. It does not say
that they apply; it says it is subject to the rules. And if
the rules in their
terms apply, then they apply, and 2.2 picks that up:
To the extent not in conflict with the foregoing, carriage hereunder –
and then it adds
words –
and other services performed by each carrier –
Now, those are not incidental services,
in our submission. They are services provided by the carrier which would not be
in performance
of the contract for carriage. For example, if the carrier was
asked to store the goods at the destination, rather than give delivery,
that
storage would be a service performed by the carrier outside the terms of this
contract, but this contract seeks to address it.
GUMMOW J: 2.2 helps explain your construction of 11.
MR MEAGHER: Of 11 and 4, your Honour.
GUMMOW J: And customs laws, yes.
MR
MEAGHER: Because:
To the extent not in conflict with the foregoing, carriage hereunder –
is “subject to”. Then 2.2.1 is “applicable
laws”; 2.2.2 is the “provisions herein set forth”,
relevantly,
clause 4; 2.2.3 “applicable tariffs, rules, conditions of
carriage”. Then one drops down to clause 4. It
provides that one
goes first to the “carrier’s tariffs or conditions of
carriage”, but:
Except as otherwise provided in carrier’s tariffs or conditions of carriage, in carriage to which the Warsaw convention does not apply –
the liability is limited.
We submit, and as I have submitted to your Honours, the few United States decision which have addressed this question have construed the words to which the Warsaw Convention does not apply in that context as addressing the rules relating to liability, in other words, Article 18, relevantly. That is the argument in its essence. It is a construction question and, as I have submitted, I will not take your Honours to those other cases but when one reads them – I perhaps could just indicate to your Honours what they say, that is, the American cases.
In Aerofloral the carriage was international carriage from Miami. The goods were received before Miami Airport and some of them were stolen in the warehouse before the airport. So the distinction between that case and this is that the loss occurred before the period of carriage provided for by Article 18 happened. Aerofloral relied upon clause 4. The court said that it was carriage to which the Convention did not apply because it was outside the Article 18 period and therefore clause 4 was capable of applying. As a matter of fact, the court subsequently held that the goods were not in carriage because they were being stored in a condition which did not permit them to be carried.
Now, the earlier decision is the decision in Read-Rite and that was a case where the cargo was to be carried from Heathrow to San Francisco. The carrier took delivery at a freight facility near but outside Heathrow. The cargo was damaged. So again a case of damage before the airport. The District Court held that clause 4 applied and the Court of Appeals confirmed that clause 4 applied.
The final case is the decision in HIH v Gateway. That was a case where the damaged happened after the period of carriage by air. The cargo was carried to San Francisco and delivered to China Airlines ground handling agent outside the airport and stolen. In those circumstances, where the goods were in the warehouse awaiting delivery, they were held to be in carriage and it was held that clause 4 applied.
What I want to do is to give your Honours some examples which illustrate difficulties which would arise if the appellant’s construction is accepted.
GUMMOW J: Are these in your written outline?
MR MEAGHER: No, your Honour, I am sorry, they are not. I will be short.
GUMMOW J: Go ahead. Shock us.
MR MEAGHER: The appellant argues that “carriage” in clause 4 is to be construed as carriage by air. Assume a simple case, where a house bill or an air waybill is issued in the form of this bill, it provides for carriage from a place in Italy to a place in Germany by air, but for reasons of strikes, or what have you, it is the liberty exercised under clause 8 is used to carry the goods by road or by rail.
In those
circumstances, the carriage hereunder in 2.1 would be “subject to the
rules” but they would not apply because
there is no air carriage and 2.2
would provide that the “carriage hereunder and other
services . . . are subject
to . . . provisions
herein set forth” and then one
gets to clause 4 and it says:
Except as otherwise provided . . . in carriage to which the Warsaw Convention does not apply –
On the appellant’s argument, one would read that as in carriage by air to which the Convention does not apply and if one reads it that way, clause 4 has no application and, in the circumstances, the carriage by road or rail which is pursuant to the liberty in clause 8 takes place without any limited liability regime applying at all which on the face of it - - -
McHUGH ACJ: That is not surprising, though. It is not surprising if this is to protect carriage by national aircraft and that if, for instance, for one reason or another, there has to be carriage by sea or by land, then it is outside the limitation clause. Parties have to rely on their own contractual arrangements to cover it.
MR MEAGHER: The submission, your Honour, the scheme of the provisions indicates that the carrier is seeking to limit its liability in circumstances where it is able to because the Convention does not apply. As your Honours appreciate, the Convention contains in Article 23.1 a provision which prevents contracting out so that - - -
GUMMOW J: Is that in the Guadalajara Convention too, it picks it up?
MR MEAGHER: Guadalajara simply picks up Warsaw and Warsaw/Hague. So that clause 4 is, in our submission, clearly addressing the liberty which the carrier has to contract out because the Convention does not apply or to limit its liability.
McHUGH ACJ: I think Article 18.3 indicates that “carriage by land, by sea or by river” are not within the Convention.
MR MEAGHER: That is certainly so, your Honour, but it does not tell one that it is not carriage. In fact, it describes it as carriage and that is our point. Clause 4 operates in circumstances where there is carriage to which the Convention does not apply.
KIRBY J: What is your answer to Justice McHugh’s earlier case of the limousine service?
MR MEAGHER: It is not a cargo case. I am not sure how one fits it within a passenger ticket.
KIRBY J: No, but it is still in principle.
MR MEAGHER: Article 17, if your Honours look, operates on different principles. Article 17, which deals with passengers, only deals with damage sustained as a result of an accident which happens “on board the aircraft” or in the course of “embarking or disembarking”.
McHUGH ACJ: Yes, but supposing you have a passenger’s ticket which is in terms of clause 4, I am pretty sure there are clauses much to that effect. I mean, you just say, “Well, bad luck.”
MR MEAGHER: At one level, your Honour, it is a matter of contract. It would be subject to whatever laws there were in the place where the contract was made but, at one level, it is a matter of contract and, similarly, the Convention permits liabilities to be limited when its rules do not apply, and that is precisely what this air waybill seeks to do. Your Honours, unless there are - - -
GUMMOW J: Yes, there is. We have extracts from Shawcross and Beaumont, but we have no extracts dealing with the Guadalajara Convention. Does it cover that Convention? I would expect it to. It need not be done now.
MR MEAGHER: Your Honours, I think I can hand up – I cannot give your Honours an assurance - - -
GUMMOW J: Well, just check it for us and then give it to us.
MR MEAGHER: Would your Honours prefer that I do that? If the Court please, they are our submissions.
McHUGH ACJ: Thank you, Mr Meagher. Yes, Mr
Greenwood.
MR GREENWOOD: Thank you, your Honours. The
notion that the Richtungsverkehr comes secondarily to air waybill is a fresh
argument that, in our submission,
is not borne out by the references my friend
took the Court to. The fact that Mr Jones said that delivery at all times
was to go
to the bonded warehouse is as per the original Richtungsverkehr
agreement, appeal book 71. It is one of the line items in the
Richtungsverkehr.
GUMMOW J: I am sorry, I will have to make sure I get that in my head. Page 71?
MR GREENWOOD: Page 71 of the appeal book sets out the different aspects of this overarching agreement and the sixth one is the “Transit to customs controlled warehouse”.
GUMMOW J: Yes, that is right.
MR GREENWOOD: It is the air waybill that deals with the fifth one. So Mr Jones’ evidence that all these shipments were to go to the bonded warehouse is perfectly consistent with the arrangement pursuant to the Richtungsverkehr, whereas my friend is seeking to submit that it indicates that it was the intention of the parties pursuant to the air waybill that they would go there. In that respect, the reference on the face of the air waybill to Melbourne cannot be construed as a reference to the warehouse, but rather the airport, as your Honours will see, so the airport of departure is Berlin, Tegal, so the airport of destination is Melbourne and not Essendon, but Tullamarine MEL.
In terms of the intention of the parties which is so critical, if it had been the intention of the parties for this air waybill to run to the warehouse, in our submission, it would need to have submitted that by way of a line item, as occurred in the case of Jaycees Patou, which is on the list and copies have been provided to your Honours, where it appears as a separate line item as a door to door waybill.
Your Honours, my friend’s submission about an analogy that can be drawn with Salmond & Spraggon does not run. When your Honours look at Salmond & Spraggon, your Honours will see that the bill of lading specifically provided for the carrier to retain the control of the goods as the bailee, as distinct from this air waybill which provides simply for the delivery to occur.
My friend’s reference to clause 9 as operating whilst the goods are in their charge can only have operation to the extent of the waybill and does not extend the operation of the waybill and the notion of delivery in clause 11 is read in this way “delivery will be made to” and one must finish that, “delivery will be made . . . to the consignee” or to somebody. Not delivery made in accordance with the instructions of the consignee, but delivery to someone at the airport, either the consignee or to someone in accordance with the instructions of the consignee.
GUMMOW J: Yes, but how do you square that with 2.2.1?
MR GREENWOOD: Clause 2.2.1?
GUMMOW J: Yes, “applicable laws” may make that impossible. It has to go into bond.
MR GREENWOOD: But what occurs here is that there is the delivery that takes place to the consignee - - -
GUMMOW J: Depends what one means by “delivery”.
MR GREENWOOD: Yes.
GUMMOW J: It is a legal term, it is not a popular term.
MR GREENWOOD: Well, the way it is to be read, in our submission, in clause 11 takes one back to reflecting the articles of the Convention, 12 and 13, when the rights change in terms of recalling the goods by the consignee and the control by the - sorry, recall by the consignor or control by the consignee. When one then goes to this notion of services incidental, what my friend has not identified is how the road carriage in fact does fall within this air waybill. Is it an incidental service in relation to - within clause 1? If so, it is not carriage and so it does not fall within 4.
Finally, the reference to incidental service in clause 1, being something different to other services performed by the carrier in 2.2, does not follow, with respect. There are no other services that the carrier can perform as part of the carriage hereunder apart from what is in 1, namely carrying or other services incidental to that air carriage.
I am sorry, I said finally, but I have one further matter, and that is that the reference - the distinction my friend draws to the wording in 2.1 in relation to “Carriage hereunder . . . subject to the rules relating to liability established by the Warsaw Convention” is quite different to the notion of “carriage to which the Warsaw Convention” applies, which are the words in clause 4.
GUMMOW J: Do you disagree that Mr Meagher’s clients get into the Australian statutory regime through the Guadalajara Convention – in other words, not through section 11? What is the section of the Act that is the equivalent - - -
MR GREENWOOD: Section 25A.
GUMMOW J: Yes, that is right. They get in through 25A insofar as there is a mandatory statutory regime. That is what it has to - - -
MR GREENWOOD: To the extent that that was operative at the relevant time, your Honour, yes.
GUMMOW J: We were told it is 1 May 1964.
MR GREENWOOD: Yes, we do
not disagree with that. Your Honours, just wishing to deal with that 2.1
and 4 contrast in this way. With the notion
of this air waybill –
and this is really where it all derives from – if one takes the view
that this air waybill is endeavouring
to deal with international carriage on the
one hand and non-international carriage on the other hand, as we would submit
comes out
of the air waybill being modelled on the Convention provisions, then
either way it is air carriage. In this case the international
air carriage
character means that the carriage that was undertaken pursuant to this waybill
was international carriage to which
the Convention applied but the road
service meant that the rules could not apply to that leg. Hence the
“carriage” in
clause 4 was governed by the Warsaw Convention
but not the rules relating to liability. If the Court pleases.
McHUGH ACJ: It might be helpful to the Court if the parties want to put any submissions in writing concerning how section 25 and Schedule 3 apply. If you have any submissions in respect of that matter, it might be helpful to the Court. What I have in mind is, it seems to me at a quick glance at Schedule 3 that some of the provisions of the Convention may need to be modified, or arguably may need to be modified in respect of the persons to whom Schedule 3 applies when there are deeming provisions and there is distinction between “actual carriers” and so on. There may be nothing in it but if anybody thinks there is anything that may be of use to the Court, then perhaps some submissions could be put in within the next 14 days.
GUMMOW J: It would be useful to be taken through how it works.
McHUGH ACJ: Yes, as to how it works.
MR GREENWOOD: Thank you, your Honours.
McHUGH ACJ: Within the next 14 days.
MR GREENWOOD: Fourteen days,
thank you, your Honour.
McHUGH ACJ: The Court will reserve
its judgment in this matter. It is indebted to counsel. We will adjourn until
10.00 am tomorrow.
AT 3.52 PM THE MATTER WAS ADJOURNED
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URL: http://www.austlii.edu.au/au/cases/cth/HCATrans/2003/336.html