Lloyd's Maritime and Commercial Law Quarterly
Australian Maritime Law
Martin Davies*
CASES
1. Australia Capital Financial Management Pty Ltd v Freight Solutions (Vic) Pty Ltd 1
Freight forwarder’s “house bill of lading”—misleading or deceptive conduct—breach of warranty of authority
The plaintiff, a finance company, lent money to an exporter to buy sheepskins and cowhides for export to China. The loan agreement provided that all original bills of lading relating to a proposed advance of funds by the plaintiff would be deposited with the plaintiff. The exporter defaulted on repayment of three drawdowns on the loan facility, which had been secured by the deposit of eight original bills of lading issued by the defendant, a freight forwarder, for carriage of goods to China. Each bill of lading was made out “To Order” and stated that it was issued by the defendant, but was signed by the defendant “as agent only” for a named ocean carrier. They were not endorsed. The defendant had received original bills of lading from the relevant ocean carriers in relation to each shipment. The goods were delivered to unidentified receivers in China. When the exporter failed to pay the plaintiff, the plaintiff was unable to use the bills of lading issued by the defendant to obtain delivery of the goods.
The plaintiff sued the defendant in the District Court of New South Wales, claiming: (1) that the defendant had engaged in misleading or deceptive conduct in contravention of the Australian Consumer Law, s.18;2 and (2) that the defendant was in breach of warranty of authority by wrongly holding itself out as having authority to act on behalf of the carriers of the goods described in its bills of lading.
Decision: Judgment for the plaintiff. Both causes of action were made out.
Held: (1) The Sea-Carriage Documents Act 1997 (NSW), s.5 defines a bill of lading as a document capable of transfer by endorsement or, in the case of a bearer bill, by delivery without endorsement. Possession of a proper original bearer bill of lading would have entitled the plaintiff in the present case to call for delivery of the cargo to it, or to claim against the carrier for misdelivery. The “house” bills of lading issued by the defendant did not give the bearer the right to demand delivery of the cargo, because the defendant had no authority from the ocean carrier to issue them.
* Admiralty Law Institute Professor of Maritime Law, Tulane University Law School; Director, Tulane Maritime Law Center; Professorial Fellow, Melbourne Law School.
1. [2017] NSWDC 279.
2. Competition and Consumer Act 2010 (Cth), Sch.2 (Australian Consumer Law), s.18.
2