This claim arose from damage caused to an artwork carried by sea. The second applicant, Mr Costa Charalambous, was an art collector and a director of Charas Constructions Pty Ltd (Charas), the first applicant. Mr Charalambous owned a work by Urs Fisher [sic: Fischer] named Sunset. In September 2018, Mr Charalambous decided to transport Sunset to the US for sale at auction. The respondent, Megatop Cargo Pty Ltd (Megatop), was engaged to transport the work to New York. Sunset suffered minor damage during transportation. It is alleged that this damage was caused by poor packaging. The repair cost was USD 1,350. Sunset failed to sell at auction in May 2019. In July 2019, Mr Charalambous, via his agent, the first applicant, instructed Mr Mick Veljanovski, an employee of Megatop, to transport Sunset from New York back to Sydney.

The work arrived in Sydney in October 2019. It had suffered serious damage during transportation. The repair cost was estimated at AUD 12,000 plus GST. As a result of the damage and subsequent conservation, Sunset was estimated to have suffered a diminution in value of approximately 8.4%. The applicants sought recovery of damages against the respondent for the cost of the conservation/repairs, together with this diminution in value.

The respondent denied liability for the damage, causation of the damage, and the quantum of damages sought. In a cross-claim, the respondent sought payment of costs incurred in shipping other art works by the respondent to Australia on behalf of the applicants.

The applicants based their claim on the Australian Consumer Law (the ACL). The respondent sought to rely on s 18 of the Carriage of Goods by Sea Act 1991 (Cth) (the COGSA), which reads as follows:

The provisions of this Act prevail over the Provisions of Division 1 of Part 3-2 of Schedule 2 to the Competition and Consumer Act 2010, as that Division applies to a law of the Commonwealth, to the extent of any inconsistency.

The respondent submitted that the relevant international law that applied was the Hague Rules as incorporated with modifications in the US Hartner Act [sic: Harter Act]. Reliance was placed on Professor Martin Davies and Anthony Dickey QC, Shipping Law, 4th ed, which states that:

The unmodified version of the Hague Rules governs bills of lading and similar documents of title for inwards-bound international carriage to Australia from Hague Contracting States that have not modified the Rules (such as the United States).

Held: The application of Charas and Costa Charalambous is dismissed. Judgment in favour of the respondent/cross-claimant.

The Court accepts that the Hartner [sic] Act applies via the COGSA. The relevant bill of lading provides:

Except as otherwise provided herein this Bill of Lading shall have effect subject to the provisions of the Carriage of Goods by Sea Act of the United States of America, approved April 16, 1936 [also known as the Hartner [sic] Act [Ed note: this is the Carriage of Goods by Sea Act 1936, not the Harter Act 1893]], which shall be deemed to be incorporated herein and nothing herein contained shall be deemed a surrender by the Carrier of any of its rights or immunities or an increase of any of its responsibilities or liabilities under said Act. The provisions stated in the said Act (except as otherwise specifically provided herein) shall govern before loading on and after discharge from the vessel and throughout the entire time the Goods are in the custody of the Carrier, if this Bill of lading is issued or delivered in a locality where there is in force a compulsory applicable Carriage of Goods by Sea Act, ordinance or statute of a nature similar to the International Convention for the Unification of Certain Rules relating to Bills of Lading dated at Brussels, August 25, 1924. It shall be subject to the provisions of said Act, ordinance or statute and rules thereto annexed. ... The carrier shall be entitled to the full benefit of, and right to, all limitations of, or exceptions from, liability authorised by any provisions of sections 4281 to 4288, inclusive, of the Revised Statutes of the United States and amendments thereto and of any other provisions of laws of the United States or of any other country whose laws shall apply.

It was submitted that if Megatop was a carrier, ss 3(6) and 4(2) of the Hartner [sic] Act applied. Section 3(6) requires a notice of loss or damage to be given in writing within three days to the carrier or its agent at the port of discharge before or at the time of removal of the goods into the custody of the person entitled to delivery thereof, and that removal shall be prima facie evidence of delivery by the carrier of the goods. The applicant submitted that this was only required where the loss or damage was not apparent, which was not the case here, as the damage was clearly apparent to all parties.

Section 4(2)(n) of the Hartner [sic] Act states that neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from 'insufficiency of packing'. Further, pursuant to s 4(5) of the Hartner [sic] Act damages to the carrier or the ship are limited to an amount of USD 500.

It was submitted that even if the Hartner [sic] Act did not apply, that would only revert the applicable law back to the amended Hague Rules. Article 3.6 of the Hague-Visby Rules also has a 3-day time limit and limits damages to SDR 666.67, or AUD 1,343.30.

It was further submitted that a similar result is achieved by using the terms of the bill of lading itself, as opposed to COGSA. The applicable Australian law is s 10 of the Sea-Carriage Documents Act 1997 (Cth) (the SCDA). It was submitted that s 10 of the SCDA gives privity that is lacking under terrestrial common law, and any liability under a bill of lading is imposed on the consignee. The bill of lading provides:

3. It is understood and agreed that other than the said Carrier no person whatsoever (including the Master, officer and crew of the vessel, all servants, agents, employees, representatives, and all stevedores, terminal operators, crane operators, watchman [sic], carpenters, ships cleaners, surveyors and any other independent contractors whatsoever) is or shall be deemed to be liable with respect to the goods as carrier, bailee or otherwise howsoever in contract or in tort.

If, however, it should be adjudged that any other than said carrier is under any responsibility with respect to the Goods, all limitations of the exoneration from liability provided by law or by the terms hereof shall be available to such persons as here in described in contracting for the foregoing exemptions, limitations and exoneration from liability, the carrier is acting as agent and trustee for and on behalf of all persons described above, all of whom shall to this extent be deemed to be a party to this contract evidenced by this Bill of Lading, it being always understood that said beneficiaries are not entitled to any greater or further exceptions, limitations or exonerations from liability than those that the Carrier has under this Bill of Lading in any given situation. ...

21. ... The shipper, consignee, receiver, holder of this Bill of Lading, owner of the Goods and person entitled to the possession of the Goods are jointly and severally agree fully to protect and indemnify the carrier and to hold it harmless in respect to any injury or death of any person, or loss or damage to cargo or cargo unit of any other property ... even though such injury, death, loss or damage is caused in whole or in part by the fault of the Carrier or unseaworthiness.

It was submitted that the above clauses of the bill of lading impose on the consignee, Charas, or the owner, Mr Charalambous, an obligation to indemnify: first, the carrier; and second, any other person, relevantly the respondent, Megatop.

The Court does not accept, based on the evidence and given the large number of transactions Mr Charalambous had with Megatop, that he was unfamiliar with the terms and conditions upon which they traded, and which were also included on their website. Further, the Court finds that the terms and conditions of the bill of lading were incorporated into the terms of the contract between the applicants and Megatop.

It was submitted, however, that it was clear that Megatop was not a carrier, but rather a freight forwarder. The Court accepts this submission. The documentation and evidence, including oral evidence provided to the Court, clearly indicates that at all times Megatop described itself and acted only as a freight forwarder, not a carrier. That is, Megatop merely arranged with other persons, being carriers, for the transportation of goods. It did not transport the goods itself. The analogy was given of the difference between a travel agent and an airline. If bags were lost in transit, the respondent of any claim for loss occasioned would be the airline, not the travel agent. The Court accepts this analogy.

Megatop described itself as a freight forwarder on its website. Mr Veljanovski signed off emails with the signature 'Mick Veljanovski, Freight Forwarding'. The letterhead Megatop used also stated 'Megatop Cargo Pty Ltd Freight Forwarders and Licenced Customs Broker'. Having made this finding, it is not necessary to consider the liability of Megatop as a carrier.

It was submitted that the only liability of a freight forwarder was: first, to take reasonable care in choosing a carrier; and second, when the freight forwarder is in possession of the goods: see Cro Travel Pty Ltd v Australian Capital Finance Pty Ltd [2018] NSWCA 153 [34]-[35], [37], [42]. Reliance was placed upon the statement of Mr Veljanovski that he chose AWA Ship based on his previous experience in dealing with them. The Court is not satisfied that negligence on the part of Megatop is established in relation to the selection of AWA Ship as the carrier for Sunset. No allegation as to negligent warehousing has been made. The Court finds that any damage occurred in transit due to insufficient or faulty packing. The Court is thus unable to find any negligence, and therefore liability, on the part of Megatop as a freight forwarder.

The respondent notes that the applicant submitted in oral submissions that s 18 of the ACL overrides the COGSA, claiming that 'the section 18 misleading and deceptive conduct claim cuts across any of these allegations concerning the carriage of goods by sea and the Hague Convention and like [sic] because you can't contract out of that provision'.

The respondent notes that the COGSA is not a contract, rather a mandatorily applicable statute. Thus, the COGSA has force of law. The COGSA is a specific piece of legislation aimed at dealing with the liability incurred in international transport. The ACL is a later general statute. The Court accepts that the COGSA is a specific piece of legislation aimed at dealing with liability incurred in international transport, and the ACL is a later general statute. Accordingly, the COGSA applies to a s 18 claim in relation to a s 60 claim under the ACL.