Case 2 Cargo Liability - NVOC

A Transport Operator Member of the Club undertook the movement of a large machine from northern Europe to a location some 40 km outside Sydney, Australia. Although the member made separate arrangements for each leg of the journey, the flatrack container was supplied by the shipping line (ocean carrier). Once the consignment had been cleared through customs in Sydney, the shipping line released the container to the member's local agent; he in turn released it to a subcontracted road transport company for the haul to the final destination. On this last leg of the journey the truck was involved in a road accident as a result of which both the machine and the flatrack were severely damaged and declared to be constructive total losses.

The member had issued an NVOC bill of lading on a door-to-door basis; under its terms he was liable for any loss or damage but could limit the amount of compensation to around AUD 55,000. The terms under which the ocean carrier had released the container also made the member liable for any loss or damage to the unit: the shipping line claimed some AUD 10,000 for the value of the unit. The Club reached agreements with both claimants, after strenuous negotiations, and settled the claims for a total of AUD 60,000.

The road haulier denied liability, relying on the terms of his contract which the agent had signed. The agent also denied responsibility, pointing out that the terms used by the haulier were standard throughout the industry and were in regular use throughout New South Wales for this type of business.