Viliami 'Ahoia, the first plaintiff, is a farmer. He sometimes sent produce to American Samoa to be sold there by his brother, Litani 'Ahoia, who is a director and the principal shareholder of a Samoan company called Smile Samoa Inc. In the past he organised such shipments on his own. The second plaintiff, Poasi Ma'afu, is a primary school teacher and part-time subsistence farmer. On one previous occasion in 1990 he shipped crops to relatives in New Zealand in boxes.

In October 1992 the two plaintiffs agreed upon a joint venture. They believed that they could obtain a better price for their produce in American Samoa than in Tonga. Both plaintiffs were to contribute equally to the freight and export costs (business licence, quarantine phytosanitary certificate, and customs export clearance), the shipper was to be the first plaintiff, and the consignee was to be his brother in American Samoa. That was the extent of their venture. Each was to stuff the container with his own produce and to keep the proceeds of sale of their own crops.

The second plaintiff was to make the necessary arrangements to obtain a reefer and to book cargo space for it on a suitable vessel departing Neiafu about harvest time. The second plaintiff made general enquiries and then contacted Sione Taumoefolau, the Vava'u Branch Manager of the second defendant, Burns Philp (Tonga) Ltd. An oral contract was entered into between the second plaintiff, on behalf of both plaintiffs, and Taumoefolau, whereby the second defendant would supply to the plaintiffs a reefer free of charge and transport the loaded container to American Samoa upon payment of the freight of NZD 4,000, the TOP equivalent of which would be calculated on the day the vessel arrived at Vava'u. The designated vessel was the MV Baltimar Mars. At that date the freight was calculated at TOP 2,935.56. At a further meeting the parties also agreed that part payment should be made in advance, and the balance upon arrival of the ship. Taumoefolau confirmed the availability of the reefer and advised the plaintiffs that the time had come to harvest and prepare their crops for shipment.

Upon the basis of that contract, both plaintiffs started harvesting and preparing their crops for shipment; obtained a business licence entitling them to export 'one shipment only' of agricultural produce; had the export crops inspected by quarantine; and obtained a phytosanitary certificate and the necessary customs clearance. The first plaintiff paid his one-half share of the freight. The second plaintiff received a loan from the Tonga Development Bank. They gave him a cheque for TOP 1,500 drawn in favour of the second defendant. The second plaintiff took this cheque to Taumoefolau, handed it to him, asked for a refund of TOP 800 in cash to use for other purposes, and promised to pay the balance of his share of the freight at some unspecified date in the future.

The second defendant issued a pro forma bill of lading. This document was designed to enable the plaintiffs: (a) to obtain the necessary clearances to export their goods; and (b) to have the reefer loaded on board the vessel. It was not a negotiable bill of lading. That document would be prepared later in Nuku'alofa and then couriered to Pago Pago to enable the consignee to uplift the reefer once discharged from the vessel.

The Baltimar Mars arrived on 13 November 1992. The vessel had an empty reefer on board but it was not readily accessible. Despite strenuous efforts no reefer was procured for the plaintiffs and they were unable to ship their goods on this vessel.

Held: Claim dismissed.

The second defendant had undertaken to provide a reefer and failed to do so. This was a material breach of its contract with the plaintiffs. Both plaintiffs said in evidence that they were told by Taumoefolau that he was the representative of the shipping line. What they did not know, and were not told, was the identity of the shipping line Taumoefolau represented. In evidence, Taumoefolau started by saying that he told the plaintiffs that he was the agent for the first defendant, New Zealand Pacific Container Lines Ltd, but soon conceded that he probably did not tell them this. That latter admission is wholly consistent with the plaintiffs' evidence. It follows that Burns Philp (Tonga) Ltd, in its dealings with the plaintiffs, was acting as an agent for an undisclosed principal. The plaintiffs have elected to sue the second defendant. They also sued the first defendant, naming it as principal, but it denies this. It has not been established in evidence that it was the principal. The case against the first defendant is therefore dismissed.

The reality is that the second defendant in Vava'u was acting only as sub-agents for an agent in Tonga who was a company called Dateline Shipping: the evidence was that its ultimate holding company was the third defendant. No case has been established against the third defendant and the plaintiffs' action against it must be dismissed. The third defendant has offered ex gratia to repay to the plaintiffs the freight they had paid.

If the plaintiffs have suffered any loss arising from the breach of contract then it is to the second defendant that they must look to recover this loss. The plaintiffs had no contract with anyone in American Samoa to purchase their produce from them: if they had, their loss could have been calculated without undue difficulty. What they intended doing was allowing the first plaintiff's brother to arrange for the produce to be sold in the market at Pago Pago and thereafter remit the sale proceeds to Tonga. Was he to remit the whole proceeds of sale or would he be sending the sale proceeds less expenses? Was he to be entitled to a handling fee for himself? Were the actual sellers at the market to be entitled to a share of the price realised? Were there import dues, customs clearance fees, wharfage, ports and services tax, or sales tax payable in American Samoa and, if so, what would this, have amounted to? What costs would have been involved in transporting the produce in American Samoa from the wharf to the market? The plaintiffs have failed to establish in evidence the extent of their loss caused by the second defendant's breach of contract. Nor are they entitled to any general damages for the 'inconveniences and hardship' suffered by them resulting from the breach of contract.

In any event, the plaintiffs failed to minimise their loss. When it was clear that no reefer was available, Roger Cocker of Dateline Shipping offered to ship the plaintiffs' goods to Nuku'alofa on the Baltimar Mars in a dry container and to tranship them there into an available reefer. Had that happened the produce would have arrived in Pago Pago in mid-December which was when the plaintiffs had intended that it arrive there. Had this offer been accepted the plaintiffs would have suffered no loss whatsoever. Their case against the second defendant must therefore fail.

There are two matters of law which were pled and argued by the defendants' counsel. First, they submitted that the plaintiffs' claim was subject to the terms and conditions of the bill of lading. These terms and conditions were not annexed to the pro forma bill of lading with which the plaintiffs were supplied, hence they form no part of the contract. Secondly, they argued that this case must be determined according to the provisions of the Carriage of Goods by Sea Act (Cap 141) and accordingly: (1) the action was time-barred; and (2) their liability was limited to TOP 200. Section 2 of the Act provides that the Rules set forth in Sch 1 annexed to the Act are to have effect 'in relation to and in connection with the carriage of goods by sea' in cargo-carrying vessels from any port in the Kingdom of Tonga to any other port, be it a home or foreign port. The said Schedule details the 'Rules relating to Bills of Lading'. The term 'carriage of goods' which appears in s 2 is defined by art 1.e as covering: 'the period from the time when the goods are loaded on to the time when they are discharged from the ship'.

The goods in this case remained at all time in the care and under the control of the plaintiffs. They were never received by the carrier into its charge for shipping. The pro forma bill of lading used in this case was intended solely to expedite export clearance. The pro forma bill was neither negotiable nor a receipt nor a document of title. Accordingly, the Act does not apply to this case. The Carriage of Goods by Sea Act gives effect to the Hague-Visby Rules, to which Tonga is a contracting State. The terms of art 1.e have frequently been the subject of judicial interpretation. The authorities make it perfectly clear that the terminus a quo for the operation of the Hague-Visby Rules is the loading on board the vessel of the cargo, a term apt to include the actual loading operation even before the cargo crosses the ship's rail. What art 1.e does is to name the first and last of a series of operations which include, between loading and discharging, the 'handling, stowage, carriage, custody and care' of the goods: see art 2.