New Zealand: Supreme Court rules on limited liability regime for New Zealand domestic carriers

Last Updated: 16 December 2009
Article by Neil Beadle

The strict liability/package limitation regime for domestic carriage in New Zealand limits liability to NZ$1,500 per 'unit of goods'. In Ports of Auckland Limited v Southpac Trucks Ltd [2009] NZSC 112 the Supreme Court has considered the application of the regime under the Carriage of Goods Act 1979 and overturned an earlier decision by the Court of Appeal. As a result, Southpac's recovery of some NZ$60,000 was reversed, to be replaced by the NZ$1,500 package limit.

The decision recognises that the Carriage of Goods Act 1979 (Act) is a comprehensive code which protects carriers not only when actually carrying the cargo, but when acting as a 'carrier' (as defined by the Act) of the damaged goods at the time they are damaged. The decision provides greater certainty of risk allocation for domestic carriers, cargo interests, and their respective insurers. It will be of particular interest for parties that undertake different functions while performing the carriage contract (eg port and warehouse users).


Kenworth Trucks and Southpac Trucks Limited (Southpac) entered into a tripartite agreement with CP Ships (UK) Limited (CP Ships) for the carriage of six Kenworth trucks from Melbourne to Auckland. Under the sea waybill CP Ships had a responsibility to discharge the trucks from the carrying vessel Rotoiti, to a corner of the wharf so that the consignee, Southpac, could collect the goods. It was this short domestic part of the carriage within Ports of Auckland that was the subject matter of the current dispute.

The contract of carriage

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. The fork hoist was being used by an employee of POAL for a purpose unrelated to carriage of the trucks but within the scope of the driver's employment.

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 Act, by providing stevedoring and marshalling services in relation to the truck.

The Supreme Court's decision

In allowing the appeal the Supreme Court has unanimously found that POAL was a carrier as defined by the Act. POAL was accordingly entitled to take the benefit of the limitation provisions in the Act even though it was not the actual carrier in possession of the goods at the time of the loss or damage.

In reaching the decision the Court placed particular emphasis on the intended purpose of the legislation.

Two of the fundamental objectives of the Act were to apportion liability for damage or loss to goods occurring during carriage irrespective of fault (ie where the balance of convenience places it), and to provide a limitation on a carrier's liability based on the number of units tendered to the carrier by the consignor. The Court also emphasized that the legislation was intended to apply to all parties who procure contracts of carriage, whether or not they take an active part in the carriage itself (eg freight forwarders).

It was also intended that the Act would provide all participants in a carriage of goods with certainty in relation to damage or loss to the goods. Certainty for insurance purposes was achieved either by the parties agreeing to allocate the risk (which is permitted by the Act), or in the absence of an agreement, under the statutory scheme applying by default. The Court's approach to the case clearly applies this legislative purpose.

The Supreme Court has now made it clear that it is the status of a carrier that determines its liability, rather than the capacity in which that carrier may be acting in during performance of the carriage.

So aside from when the parties agree to allocate their risk otherwise, or where a carrier intentionally causes the damage or loss, all that is required for protection under the Act is that the person being sued be acting as a carrier (as defined by the Act) of the damaged goods at the time they are damaged.

To hold otherwise the Court said, would 'thwart the purpose of the legislation'.

The Court's findings

The Supreme Court, reinstating the decision of Justice Allan in the High Court, held that:

  • POAL was a 'carrier' (as defined by the Act) at the time that its employee collided with the truck. It was a 'carrier' either because it procured its subcontractors to carry the truck; or, because it procured its subcontractors to perform a service (as stevedores) incidental to the carriage of the truck.1
  • Section 6 of the Act applies to carriers generally.2 The section 6 immunity is not confined to the actual carrier in possession of the goods, or the contracting carrier of the carriage of goods, as held by the Court of Appeal.
  • Section 6 of the Act applied because POAL was a carrier, 'as such'.
  • POAL was entitled to take the benefit of the immunity in section 6.


Pursuant to the limitation provisions in the Act, Southpac's recourse was limited to a claim of up to NZ$1,500 against the contracting carrier CP Ships.

CP Ships was then entitled to claim against the subcontractors down the contractual chain.

1. At [31]. The Act defines a 'carrier' as: a person who, in the ordinary course of his business, carries or procures to be carried goods owned by any other person,... and... includes a person who, in the ordinary course of his business, performs or procures to be performed any incidental service in respect of any such goods.

2. At [32]. Section 6 of the Act provides that ' 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 - (a) In accordance with the terms of the contract of carriage and the provisions of this Act; or (b) Where he intentionally causes the loss or damage.

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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.

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