Question

Fiona owns and operates 'Fiona's Futons' (an importer of bedroom furniture and accessories located in Fremantle, Western Australia). Fiona ordered 20,000 queen size futon mattresses from Jaki, a sole trader and exporter of mattresses located in Yokohama, Japan. The mattresses were to be delivered to Fiona's business premises in two instalment shipments of 10.000 mattresses each: The first instalment on board The Pacifica in July (the July shipment) and the second on board The Oceania in November (the November shipment). The parties have incorporated a clause into their contract that the law of Australia (or Western Australia, as applicable) shall be the governing law should a dispute arise.

The following issues arose:

6: When the November shipment arrived, Fiona discovered that 500 mattresses were water-damaged. The cause of the water-damage was due the mattresses being exposed to severe rain, hail and storms whilst being loaded on board the vessel The Oceania.

Discuss the carrier's obligations and liabilities.

Answer 1

Private carriers in Australia can also be held liable for loss caused as a result of damage to goods during transport. The rights and obligations of a private carrier are determined by the relevant contractual terms which have been entered into with the private carrier as well as the common law principle known as the laws of bailment.

Bailment occurs when possession of the goods is transferred by the owner to another party (known as the bailee) to be dealt with in a particular way. While possession of the goods is transferred, ownership of those goods is not. For example, private carriers are generally considered bailees when possession in the goods is transferred to them by the owner for the purpose of transporting the goods.

Private carriers have a responsibility to take reasonable care for the safety of the goods they are transporting and to take reasonable care to deliver those goods to their destination. Private carriers can therefore be liable for loss or damage resulting from any deliberate act or a failure to take reasonable care in transporting and delivering the goods.

a common carrier is strictly liable for loss and damage (unless caused by an Act of God or Queen's Enemies) a bailee for reward is not an insurer and his or her obligation extends only to taking reasonable care of the goods (though he or she must also prove the absence of negligence)