In April 1986, a container of prawns was stolen after discharge from the ship in the port of Sydney, Australia. The cargo, property of Nissho Iwai Australia Ltd (NIA), had been carried by the carrier, Malaysian International Shipping Corp (MISC) from Malaysia to Sydney under a bill of lading issued by MISC.

NIA brought a claim against MISC before the Admiralty Division of the Supreme Court of New South Wales for damages for the misdelivery of the cargo. The Court did not find the carrier liable. NIA appealed the decision at the Court of Appeal of New South Wales, which agreed with the judgment of the first instance. NIA appealed to the High Court of Australia.

NIA argued that the object of the contract of carriage of goods by sea was the delivery of the goods at Sydney, and that exempting MISC from liability for loss or damage in the case of non-delivery would not fulfil that object. Moreover, the definition of the carrier in the bill of lading included agents and subcontractors. In this case, the cargo was stolen while under the responsibility of stevedores.

Held:The appeal is dismissed.

The Court noted that the carriage contract contained in the bill of lading was subject to the Hague Rules as set out in the Carriage of Goods by Sea Order of the State of Sarawak. Therefore, MISC must comply with the obligations of the Hague Rules from the loading of the cargo to its discharge.

The question was if the relevant clauses in the bill of lading limiting the terms of liability of the carrier applied to this case. The language of cl 8(2)(d) indicated that its source was probably art 4.2.b-q of the Hague Rules. While there are important distinctions between cl 8(2)(d) and art 4.2.b-q, there is sufficient identity between them to suggest that the purpose of cl 8(2)(d) was to give the carrier the same protection in respect of loss or damage to goods occurring before loading or after discharge as it would have if the Hague Rules applied to loss or damage occurring at those points. Upon that hypothesis, the meaning of art 4.2 of the Hague Rules might have shed some light on the meaning of cl 8(2) and in particular on cl 8(2)(d). However, neither party placed any reliance on art 4.2 as an aid to the construction of cl 8(2).

The conditions upon which cl 8(2)(d) operates are causal events which have the common characteristic that ordinarily they will occur without any fault on the part of the carrier. The event which gives rise to the operation of cl 8(2)(a) will also usually occur without any fault on the part of the carrier. Similarly, the events which give rise to the operation of cl 8(2)(b) and (c) will often occur in circumstances where there has been no fault on the part of the carrier. The loss and damage in respect of which cl 8(2) gives exemption, therefore, depend on events against the consequences of which a carrier might reasonably be expected to seek protection notwithstanding that those events might cause the non-delivery of goods accepted by the carrier for transportation or forwarding to the place of delivery.

The main object of the contract of carriage does not provide any ground to argue that non-delivery of the goods was outside the exempting clause.

Regarding the definition of 'carrier', the bill of lading did not include agents, subcontractors, or employees of the carrier. The reference in the bill of lading was only to MISC. Therefore, MISC was entitled to protection.

MISC also relied on the provisions of cl 8(2)(a) which exonerated it from liability in respect of 'any loss or damage to or in connection with goods which arises or is due to any occurrence ... after such goods have been delivered or made available by or on behalf of the carrier at the place of delivery'. Yeldham J held that 'delivered or made available' in the context meant delivered or made available to the owner and that the goods were never delivered or made available to the owner. Consequently, his Honour held that the carrier could not rely on cl 8(2)(a). In the Court of Appeal, however, Kirby P held that, in the context and having regard to the purpose of the contract, the words 'delivered or made available' meant discharged from the ship. Accordingly, his Honour held that the carrier was protected by cl 8(2)(a) as well as cl 8(2)(d). However, this Court can see nothing in the bill of lading which supports the notion that 'delivered or made available ... at the place of delivery' meant discharged from the ship.