New Zealand: Limited Liability Regime For Domestic Carriers Further Confined

Last Updated: 19 February 2009
Article by Neil Beadle and Aisha Lala

The strict liability / package limitation regime for domestic carriage in New Zealand which limits liability to $1,500 per 'unit of goods' has come under question in a recent New Zealand Court of Appeal case. In Southpac Trucks Ltd v Ports of Auckland Ltd [2008] NZCA 573, the Court overturned a blanket protection for all carriers party to the carriage, whether the negligent party was in possession of the goods at the time the damage occurred or not. As a result, subcontracting carriers who are not in possession of the goods but cause damage to them while acting in another capacity, can still be held fully accountable and the $1,500 limit will no longer apply. It's good news for cargo insurers and their insureds.

The decision will be most relevant for cases where (as in the case in point) the damage occurs in port or in warehousing facilities, and the same contractual parties are frequently undertaking different functions while under the carriage contract.


Kenworth Trucks and Southpac entered into a tripartite agreement for the carriage of six Kenworth trucks from Melbourne to Auckland with CP Ships (UK) Limited (CP Ships). Under the sea waybill, CP Ships had a responsibility to offload the trucks from the carrying vessel Rotoiti, to a corner of the wharf so that the consignee, Southpac, could collect the trucks. It was this short domestic part of the carriage within Ports of Auckland that was the subject of the current dispute. The claim was only worth about NZ$63,000, but the principle at issue in this case has broad application.


CP Ships, as the contracting carrier, subcontracted Ports of Auckland Limited (POAL) to unload the trucks and transport them across the Port.

POAL then subcontracted Southern Cross Stevedores Limited, who had in turn subcontracted with Wallace Investments Limited (Wallace), to carry out the stevedore services.

During transport from the Rotoiti to the designated corner of the wharf, one of the Kenworth trucks, being driven by an employee of Wallace, collided with a fork hoist driven by an employee of POAL, by fault of the POAL employee. The fork hoist was not being used by POAL to facilitate transport of the trucks.

Southpac brought proceedings against POAL for the damage to the truck. POAL contended it was entitled to limit its liability because it was acting, through its employee, as a 'carrier' in the terms of the New Zealand Carriage of Goods Act 1979 (CGA). POAL based this argument on the reasoning that they were providing stevedoring and marshalling services in relation to the truck at the time of the incident.

The question for the Court of Appeal was whether POAL, as party to the carriage, through its negligent employee, could limit its liability to the $1,500 package limitation.

Carriage of Goods Act 1979

Section 6 of the CGA provides:

  1. Notwithstanding any rule of law to the contrary, no carrier shall be liable as such, whether in tort or otherwise, and whether personally or vicariously, for the loss of or damage to any goods carried by him except –
  1. In accordance with the terms of the contract of carriage and the provisions of this Act; or
  2. Where he intentionally causes the loss or damage. (emphasis added)

The following definitions under section 6 of the CGA are also relevant:

Actual carrier, in relation to the carriage of any goods, means every carrier who, at any material time, is or was in possession of the goods,...and includes the contracting carrier where he or she performs any part of the carriage.

Contracting carrier, in relation to a contract of carriage, means the carrier who, whether as principal or as the agent of any other carrier, enters or has entered into the contract with the contracting party.

The District Court held that POAL was a carrier, but that it was not an 'actual' or 'contracting' carrier as defined under section 6. The Judge found that the capacity of the carrier at the time of the accident was key. On this point the Court was unable to find a sufficient connection between the contract for carriage and the services being performed by the fork hoist driver. Southpac's claim was based on the negligence of POAL's fork hoist driver, who was not performing services 'incidental to the contract for carriage' at the time of the collision. POAL was not acting as a carrier 'as such', and so could not be afforded the protection of the limited liability regime.

On appeal Justice Allan in the High Court overturned the decision of the District Court. Justice Allan, taking a wider approach, held section 6 applied. His Honour found that because the accident occurred during the contract of carriage, while Wallace was performing stevedore services and POAL was providing wharfinger services (generally), POAL was a carrier 'as such' under section 6 given the physical and contractual connection.


The central issue for consideration was whether the CGA applied to a particular class of 'carrying' activities, or whether it created a blanket charter for all parties to the contract of carriage.

The decisive issue was the capacity in which POAL was acting at the time of the collision. It was decided by the majority that the collision occurred because of the negligence of someone (the fork hoist driver) occupied in an activity wholly independent from the actual carrying activities of POAL.

Justices O'Regan and Robertson for the majority clarified an 'actual carrier' as a carrier in possession of the goods for the purpose of performing a stage of the carriage, or a service incidental to it. 'Actual carriage' required physical possession and that the CGA envisages only one carrier can be in possession at a time.

The majority of the Court found:

  • POAL was a 'carrier'.
  • But, POAL was not acting as a 'carrier' 'as such' when the collision occurred. The collision occurred when Wallace, not POAL was the 'actual carrier'.
  • Section 6 simply limits the liability of 'actual carriers' when the goods in their possession are damaged. The CGA does not provide for a general limitation for all carriers' liability, regardless of possession.
  • POAL, was not the contracting carrier or the actual carrier in respect of Southpac's truck and therefore not within the protection afforded by section 6.


This case shows that a carrier will only be entitled to limit its liability under the CGA if damage occurred while it was the actual carrier in possession of the goods, or the contracting carrier. A blanket limitation will not apply to a party to the contract of carriage for damage caused while that party is undertaking other activities not related to the carriage contract.

So the news is good for cargo interests and their insurers, particularly in the transport and storage of goods in ports and other large warehouse facilities. Now it is clear the many subcontractors involved in the various stages of carriage can be held accountable if they cause damage to the goods while performing activities unrelated to the carriage contract.

Phillips Fox has changed its name to DLA Phillips Fox because the firm entered into an exclusive alliance with DLA Piper, one of the largest legal services organisations in the world. We will retain our offices in every major commercial centre in Australia and New Zealand, with no operational change to your relationship with the firm. DLA Phillips Fox can now take your business one step further − by connecting you to a global network of legal experience, talent and knowledge.

This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances and no liability will be accepted for any losses incurred by those relying solely on this publication.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions