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Liner bills of lading – charterer’s form – charterer held liable despite demise clause

The facts

Frozen goods were shipped from Sydney to Rabaul in a reefer vessel. The goods were lost due to failure of refrigeration and the holder of the bills sought to hold the charterer liable on the bills of lading.

The bills of lading were on the charterer’s form and signed by the charterer’s agent. The terms of the bills made reference to the “carrier” which appeared, on the face of the bills, to be a reference to the line ie. the charterer. Likewise, the demise clause made reference to the “owner” with no suggestion, on the face of the bills, that the owner was other than the line.

The charterer sought to evade liability, principally, on the basis that the demise clause absolved it from liability. It argued that the presence of the demise clause put the shippers on their enquiry as to the owner of the vessel. Clearly, the demise clause made the unnamed owner liable on the bills.


The court (Hunt J) held that it did not avail the charterer to claim that the bills had ultimately been signed on behalf of the owners. On the ordinary principles of agency, an agent for an undisclosed principal is liable on the contract. There was no indication on the face of the bills that the contracting party was any other than the line.

The court held that the mere existence of the demise clause as part of the printed form did not take the matter any further because it was not apparent from the face of the bills that the line was not the owner of the vessel or its charterer by demise. (Although the charterer contended that the effect of the charterparty was one of demise, the court held that it was in effect a time charter).

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