Port companies are permitted to shelter under the statutory liability limits contained in transport legislation even when cargo is damaged by port employees while under the control of stevedore companies sub-contracted to do the work, the Supreme Court has ruled. This decision saves port companies substantial increases in their liability insurance premiums.
The issue came to a head after a collision between a Ports of Auckland fork hoist and a Kenworth truck being unloaded from a vessel. The fork hoist packed a punch. The Kenworth needed repairs totalling $60,200.
Southpac Trucks, who imported the Kenworth from
Goods transportation is governed by the Carriage of Goods Act 1979. The standard rule is that carriers’ liability is limited to $1500 per unit of goods carried, regardless of fault. Two categories of carrier enjoy the benefit of this rule: The “contracting carrier” who entered into the contract of carriage, and the “actual carrier” who had possession of the goods at the time of the damage. This recognises that goods pass through a chain of transport companies and couriers before reaching their end destination.
Knowing the rule, all parties can take insurance to the amount required for cover of their respective risks.
The “contracting carrier” in respect of the Kenworth truck was CP Ships (UK) Ltd, who carried the vehicle across the Tasman. CP Ships engaged Ports of Auckland to unload the vessel, which would make the Port the “actual carrier”. But the Port subcontracted the task to Southern Cross Stevedores Ltd who in turn further subcontracted the work to a company called Wallace Investments Ltd.
While being driven by a Wallace employee to the storage area dockside, the Kenworth was hit by a fork hoist driven by a Ports of Auckland employee. It was agreed, the fork hoist driver was negligent in failing to keep a proper lookout.
The owner of the Kenworth sued Ports of Auckland, arguing it couldn’t claim the benefit of limited liability under the standard rule because it was not acting as a carrier at the time of the accident, Wallace Investments was the “carrier”.
The Supreme Court ruled that Ports of Auckland was a “carrier” under the Act. You do not have to be “carrying” the goods to be a “carrier”. Ports of
While it did not have physical possession of the truck at the time of the accident, Ports of Auckland could still claim to be a “carrier” with Wallace Investments as the “actual carrier”. This meant Ports of Auckland potential liability was limited to $1500.
Ports of
12.09.003