Notes Of Cases
| Date | 01 July 1974 |
| DOI | http://doi.org/10.1111/j.1468-2230.1974.tb02395.x |
| Published date | 01 July 1974 |
NOTES
OF
CASES
VICARIOUS
IMMUNITY
BY
AN
ALTERNATIVE
ROUTE-I1
IN
A.
Jl.
Satterthwaite
C$
Co.
Ltd.
v.
New
Zealand
Shipping
Co.
Ltd.,l
Beattie,
J.,
in the New Zealand Supreme Court, held that
a stevedoring company was entitled to the benefit of an exception
clause contained in
a
bill of lading to which
it
was not a party.
The substantial ground
of
the decision was that the bill of lading
contained an offer which ripened into a unilateral contract upon
the stevedores’ unloading the goods consigned under the bill of
lading. The New Zealand Court
of
Appeal subsequently reversed
that decision, on the ground that the bill of lading did not in terms
contain an offer. None of the members of that Court, however,
denied that an offer set out in the bill of lading could, if suitably
worded, have had the effect described by Beattie
J.
Now, the
Judicial Committee of the Privy Council by a majority (Lords
Wilberforce, Hodson and Salmon, Lords Dilhorne and Simon of
Glaisdale dissenting) has advised that the judgment of Beattie
J.
at first instance be restored. In substance, the majority, in a
judgment delivered by Lord Wilberforce, accepted Beattie J.’s
unilateral contract analysis.
For
their part, the dissenting judges,
like the judges in the New Zealand Court of Appeal, thought the
appeal should fail, not because a contract could not be achieved
in the manner accepted by the majority but because, in the bill
of
lading, the words used were not apt to achieve such
a
contract.
Even in what must be a brief note, several points call for
comment.
(1)
The first is the somewhat robust approach adopted
by the majority in the Privy Council to the question of whether
the bill of lading disclosed, in terms, a promise
or
offer by the
consignor to the stevedore. Whatever the defects in its drafting,
the bill
of
lading made
it
sufficiently clear to the majority that the
carrier, as agent, was stipulating
for
exemptions for
(inter
alios)
its independent contractors and that the exemptions were promised
by the consignor. But the fact that the consignor’s intention was
not conveyed to five of the eight appellate judges who heard the
case at its various stages suggests that draftsmen relying on the
principle now confirmed by the Privy Council might be well
advised to adopt
a
clearer formula for achieving the desired result.
(2)
The second point, which is in a sense an aspect
of
the first,
is that the majority characterised the contract as a commercial
1
!19721
N.Z.L.R.
385;
r19711 2
Lloyd’s
Rep.
399.
Coote
(1972)
35
M.L.R.
176; Reynolds (1972)
88
L.Q.R.
179;
Atiyah
(1972) 46
A.L.J.
212.
2
rl9731 1
N.Z.L.R.
174; [I9721
2
Lloyd’s
Rep.
544.
119741
1
All
E.R.
1015.
153
454
THE
MODERN
LAW
REVIEW
VOL.
37
one, in which a lower freight rate had been charged as a
quid
pro
quo
for the benefits of the exemptions.
In
these circumstances
they saw no reason to strain to defeat the (to them) apparent
intentions of the document.
In
the
Suisse Atlantique
case,4 Lord
Reid drew distinctions between exemption clauses imposed on a
customer and those freely negotiated
for
a
quid
pro
quo;
and
between those which were fair and those which were unconscionable.
Since then, in appeal courts in Australia5 and New Zealand,@
and in the English High Court,? these and other distinctions have
been seen to have a bearing on the approach the court should take
to the interpretation
of
exemption clauses. This present decision
of
the Privy Council comes, then, as a strong confirmation
of
an already discernible trend.
(8)
In order to show
a
contract between the consignor and the
stevedores, the majority in the Privy Council had to find some
consideration moving from the stevedores. This they found in
the stevedores' act of unloading the goods, notwithstanding that
it was something the stevedores were already bound to do under
their contract with the shipowners.
On
this point the majority
accepted, without discussion, that
Scotson
v.
Pegg
was sufficient
authority, and good law. Neither of the dissenting judges men-
tioned this point but, since both of them allowed that
a
properly
drawn clause could have given rise to
a
unilateral contract,
it
can
be assumed that they agreed with the majority's approval of
Scotson
v.
Pegg.O
(4)
Another question which might have been thought to arise
from a unilateral contract analysis was treated rather more
ambiguously by the majority. One
of
the commonly accepted
requirements for a unilateral contract is that performance of the
required act should have been in response to the offer, the existence
4
Suisse Atlantiqite
Son'dlk
d'drmement Maritime
S.A.
v.
N.
V.
Rotterdamsche
Kolen Centrale
119671 1
A.C.
361,
406.
5
H.
rt
E.
Van Der Sterren
V.
Cibernetics (Holdings) Pty. Ltd.
(1970)
44
A.L.J.R
167, 158,
per
Walsh
J.;
Thomas National Transport (Melbourne)
Pty. Ltd.
v.
May
(6
Baker (Australia) Pty. Ltd.
(1966) 115
C.L.R.
553,
373
per
Windeyer
J.
6
IIawlces Bay and East Coast Aero Club Incorporated
v.
McLeod
[lo721
N.Z.L.R.
289, 295,
per
North
F.,
300
per
Turner
J.
7
Kenyon, Son
d
Craaen Ltd.
v.
Bazter Hoare
rt
Co.
Ltd.
r10711 1
W.L.R.
519,
633.
All
E.R.
1069,
1062,
per
Lord Denning
M.R.
And
see
British Crane Hire Corpn.
v.
Ipswich Plant- Hire
(197743 1
8
(1861) 6
H.
&
N.
295.
9
In
stating the relevant principle, Lord Wilberforce said:
"
An agreement to
do
an
act which
the
promisor
is
under
an
existing obligation
to
a
third party
to
do,
may
quite
well
amount to valid consideration and does
so
in the present
case:
the
promisee obtains the benefit
of
a
direct obligation
*
which he can
enforce."
Here,
one assumes the reference must be to the position in an
ordinary bilateral contract case.
If
the contract
is
a
unilateral
one,
the benefit
obtained by the promiBor would be performance, rather than
an
obligation
to
perform.
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