54. Waters Trading Company Ltd v Dalgety and Co Ltd [1951] 2 Lloyd’s Rep 385

Bill of lading – stevedores entitled to immunity from liability for damage occurring after discharge but prior to delivery.

The facts

Coir yarn was shipped from India to Australia under bill of lading incorporating the Hague Rules.

As the Hague Rules apply from tackle to tackle, the shipowner took the opportunity to provide for complete immunity for the period occurring after discharge and prior to delivery.

Stevedores, employed by the carrier as independent contractors, allowed the coir to be damaged by rain after discharge but prior to delivery. They sought to claim the immunity contained in the bill of lading.

Findings

A panel of three judges (Chief Justice Street, Mr Justice Owen and Mr Justice Herron) were unanimous in their finding that the stevedores were entitled to immunity.

Chief Justice Street regarded it as immaterial whether the stevedores be regarded as agents or bailees (the two possibilities put up by Lord Sumner in Elder Dempster).

Mr Justice Owen considered that the term “agent” should be given the same meaning in the bill of lading as in the Hague Rules ie. in the sense of an actor carrying out the obligations of another and not in the strict sense of a procurator.

Mr Justice Herron developed the argument that the contract in the background cannot be ignored in the enquiry relating to the duty of care in the action in tort. He referred to Heaven v Pender as support for his argument that the question of unlawfulness should be a flexible enquiry depending on all the circumstances, an important one of which being the terms of a contract providing for immunity.

Commentary

Mr Justice Herron’s argument provides a preferable solution to the problem of affording stevedores immunity, finding the answer in tort rather than contract law.

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