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Toba Pty Ltd v Poole [1984] PNGLR 94 (27 April 1984)

Papua New Guinea Law Reports - 1984

[1984] PNGLR 94 - Toba Pty Ltd v Dennis Poole 

[1984] PNGLR 94

SC269

PAPUA NEW GUINEA

[SUPREME COURT OF JUSTICE]

TOBA PTY LTD

V

POOLE

Waigani

Kidu CJ McDermott Amet JJ

29 March 1984

27 April 1984

SALE OF GOODS - Performance of contract - Delivery - Statutory presumption as to - Presumption rebuttable by specific arrangements - Goods Act (Ch. No. 251), s. 32(1).

Section 32(1) of the Goods Act (Ch. No. 251) provides:

“Where under a contract the seller is authorized or required to send the goods to the buyer, delivery of the goods to a carrier, whether or not named by the buyer, for the purpose of transmission to the buyer shall prima facie be deemed to be delivery of the goods to the buyer.”

Held

(1)      The deeming of delivery to the carrier as delivery to the buyer in s. 32(1) is a rebuttable presumption: specific arrangements may displace the presumption.

(2)      Accordingly, where in respect of the purchase of a motor vehicle from a vendor in Port Moresby by a purchaser in Kieta it was agreed that the vehicle be containerised and sent by sea to Kieta, and that the container keys be forwarded to the purchaser, there were specific arrangements such that the presumption under s. 32(1) was not applicable.

Appeal

This was an appeal from a decision of the National Court given on appeal from the District Court.

Counsel

D. Houseman, for the appellant.

M. Hines, for the respondent.

Cur. adv. vult.

27 April 1984

KIDU CJ: The appellant appeals against a decision of the National Court confirming the decision of the Kieta District Court in favour of the respondent.

In June 1981 the respondent, resident in the North Solomons Province, acting through a Mr John Henry Wallace, bought a new motor vehicle (a Cherokee Chief) from the appellant, a company in Port Moresby. The purchase price was K9000 which the respondent paid to the appellant through his agent Mr John Henry Wallace before the vehicle was shipped to Kieta North Solomons.

When the vehicle arrived at Kieta, it was in damaged condition and New Guinea Motors, in three letters it wrote to the respondent, quoted the total sum of K2,525 as the cost for spare parts, painting and labour.

The issues in this appeal according to the appellant are as follows:

(1)      There were three contracts: (a) a contract of sale; (b) a contract of carriage; (c) a contract of insurance.

(a)      The contract of sale was concluded and the property (vehicle) passed to the respondent (the buyer) as soon as it was handed over to the shipper (Mainline Shipping) at Port Moresby and with this passed all risks to the respondent.

(b)      The contract of carriage was entered into by the appellant on behalf of the respondent pursuant to s. 32(2) of the Goods Act (Ch. No. 251).

(c)      The contract of insurance was also entered into and arranged on behalf of the respondent. This was insurance of the vehicle while being shipped to Kieta.

(c) The insurance contract

As far as I can determine from the appeal book, there was no evidence of any contract of insurance entered into by the appellant on behalf of the respondent with any insurance company covering the vehicle while it was being shipped to Kieta. The only insurance relating to the vehicle of which there was a record before the Kieta District Court and the National Court related to compulsory Third Party Insurance and Comprehensive Insurance. The respondent paid to the appellants “inspection fees, freight and handling registration insurance, comprehension insurance”.

There was no evidence before the National Court of such a contract, therefore, it cannot be said that the learned judge misdirected himself in not finding that it was the intention of the parties that there would be a contract of insurance.

(a) Contract of sale

It was not contended by the appellant before the District Court, the National Court or this Court that the subject of the contract of sale (a Cherokee Chief Jeep) was to be containerised and shipped to Kieta. I quote from the judgment appealed against:

“The learned magistrate has found as a fact that the ‘the first defendant assured the complainant’s agent that the goods would be containerised. It was not’. A little earlier his Worship had found that it was on the assurance that the goods would be containerised that the contract was entered into. Indeed not only was it a condition of the contract that the vehicle should be placed in a container, but the assurance was also given by the agent for the defendant that the keys and the registration and insurance documents would be posted by registered mail to the plaintiff. I can find nothing in the evidence nor indeed have I heard anything in the submissions before me that would indicate that the learned magistrate was wrong in these findings. Further, it was never contested in cross-examination of the witness that such an arrangement was not entered into. The magistrate formed the view that the failure by the seller to arrange for a suitable container to transport the vehicle across to Kieta was really at the heart or crux of the dispute between the parties and with respect, I would agree with this proposition. Certainly, the plaintiff in the action did not treat the contract at an end ....”

Mr Houseman’s submission is that on the facts of the case and by operation of s. 32(1) and (2) of the Goods Act (Ch. No. 251) the appellant is not liable to the respondent for the damage caused to the vehicle after the appellant handed it over to the shipper and before the respondent took delivery.

Section 3(1) and (2) provides as follows:

“(1)    Where under a contract the seller is authorised or required to send the goods to the buyer, delivery of the goods to a carrier, whether or not named by the buyer, for the purpose of transmission to the buyer shall prima facie be deemed to be delivery of the goods to the buyer.

(2)      Unless otherwise authorised by the buyer, the seller shall make a contract with the carrier on behalf of the buyer that is reasonable having regard to the nature of the goods and the other circumstances of the case, and if the seller omits to do so and the goods are lost or damaged in course of transit, the buyer may:

(a)      decline to treat the delivery to the carrier as a delivery to himself; or

(b)      hold the seller responsible in damages.”

There is no question that the appellant (the seller) was required to send the motor vehicle to the respondent (the buyer) under the contract of sale. The respondent of course did not name the carrier. However, was the delivery to the carrier “... prima facie be deemed to be delivery of the goods to the buyer”?

I think Mr Houseman has either ignored the emphasised words or failed to appreciate their significance. Section 32(1) is quite clear in my opinion. This deeming of delivery to the carrier as delivery to the buyer is a rebuttable presumption. Specific agreements may displace this presumption.

In this case, the buyer had specifically directed that the vehicle be containerised and the seller had assured the buyer that the vehicle would be containerised. Such an agreement cannot be overriden by s. 32(1) of the Goods Act which operates only if there is no contrary agreement. It does not say that delivery to the carrier is delivery to the buyer. It merely means that unless the contrary is shown, delivery of the goods to the carrier is delivery to the buyer.

I see no error made by the National Court. I would dismiss the appeal with costs.

MCDERMOTT J: In the District Court Kieta on 11 October 1982, the respondent obtained a judgment for K2,935 against the appellant arising out of a breach of contract claim.

Mr and Mrs Poole, then resident in Kieta, agreed to purchase a Cherokee Chief station waggon from Toba Pty Ltd, Port Moresby. A Mr Wallace acted as the Pooles’ agent with the seller. The vehicle was damaged after it left the control of the seller and before it was collected by the buyer at Kieta wharf. The vehicle was shipped as deck cargo on M.V. “Lae Chief” in breach of the alleged agreement to ship the vehicle in a sealed and locked container.

Toba unsuccessfully appealed; the judge below confirmed the magistrate’s decision but queried the quantum. However, this aspect was not argued before him and has not been argued in this Court. Toba has appealed again on the grounds that the judge below misdirected himself on the nature of the contract and the effect on it of s. 32 of the Goods Act (Ch. No. 251).

The s. 32 arguments were disposed of in this way:

“... that there is indeed a threshold question which if answered in the plaintiff/respondent’s favour, ends the matter and obviates the necessity of investigating the complicated areas covered by Mr Houseman. That question is: “What is the nature of the original contract”?. The learned magistrate has found as a fact that the ‘first defendant assured the complainant’s agent that the goods would be containerised. It was not’.”

This Court has heard similar arguments. But on looking at the evidence, the following emerges: A friend of Mr Poole purchased a Cherokee from Toba and it was shipped in a container to Kieta for an all inclusive price of K9000. Poole then instructed his agent Wallace in Port Moresby to negotiate a similar contract to purchase a Cherokee which Toba had advertised in the newspaper. A condition of the contract was to be that the vehicle must be shipped in a container. K9000 was paid to Toba for the vehicle. Wallace confirmed the agreement in a letter to Poole dated 8 June 1981 as follows:

“They will register the car tomorrow in name of D. and K. Poole. They will arrange shipping not always easy. They will lock the container and mail container key, car key and rego papers to you registered. This seems reasonable and no one can get into the container without you.”

In his evidence, Wallace confirmed the assurance given by Mr Mooney of Toba that the vehicle would be locked in a container and the keys posted by registered mail. He said there was no discussion of a freight component. The discussion centred on the landing price at Kieta. The deal was to be the same as Wolsworth’s (Poole’s friend). Wallace was not cross examined about the agreement. Mr Wolsworth was called and gave evidence of his similar deal with Toba.

The vehicle was taken by Toba to Mainport Cargo Pty Ltd for shipment. The bill of lading is endorsed, “received in shipper packed container”. The vehicle was supposed to be containerised. This is evident by the charges for freight and by a stamp “F.C.L.” which means full container load. Mr Mooney of Toba, attested to this by affidavit. Despite this, the vehicle went deck cargo.

No witnesses were called by Toba at the hearing. Apart from the matter of damages, those were the facts and the conclusion reached below was:

“The magistrate formed the view that the failure by the seller to arrange for a suitable container to transport the vehicle across to Kieta was really at the heart or crux of the dispute between the parties, and with respect, I would agree with this proposition.”

And so do I.

Mr Houseman relies upon s. 32(1) of the Goods Act (Ch. No. 251):

“Where under a contract of sale, the seller is authorised or required to send the goods to the buyer, delivery of the goods to a carrier, whether or not named by the buyer, for the purpose of transmission to the buyer shall prima facie be deemed to be a delivery of the goods to the buyer.”

Whilst an elaborate argument was constructed by which Toba could be relieved of liability, it is not supported by evidence. The buyer in this case had made a specific contract about where and how he would take delivery. The section simply does not apply to the contract of sale in this case. In my view, Toba’s liability did not cease on delivery of the vehicle to the wharf in Port Moresby. There were not, as submitted, three contracts; one of sale, one of carriage and one of insurance. If in fact there were three contracts as a matter of practicality, they were something about which the buyers were ignorant. I am reinforced in this view as Toba did not contact the Pooles at any time before the vehicle arrived at Kieta, either to advise them of new arrangements or in compliance with the original agreement.

I would dismiss the appeal and confirm the decision of the District Court.

AMET J: I also agree that this appeal should be dismissed and I have nothing further to add.

Appeal dismissed.

Lawyer for the appellant: David Houseman.

Lawyer for the respondent: Warner Shand Wilson & Associates.