Australia: Insurance: What it means to be a ‘common carrier’

Last Updated: 4 December 2009
Article by Naomi Miller

In the recent decision of the New South Wales Court of Appeal in Stapley v Towing Masters Pty Ltd (trading as Dynamic Towing) [2009] NSWCA 382, the Court considered what it means to be a 'common carrier'.

The appeal arose as a 'test case' in which an insurer sought to challenge the decision of a trial judge that a tow truck operator had a lien over a vehicle because it was a common carrier.

Whilst the appeal was decided on its facts, and raised some quirks because of the way in which the case and evidence had been put at the lower level, the judgment of the Appeal Court contains a useful (and poetic) analysis of the genesis and obligations of a common carrier.

The facts

The case was spawned by a motor vehicle accident, in which Mr Stapley was driving. A tow truck owned by Towing Masters Pty Ltd (Towing Masters) attended the scene of the accident along with several other tow trucks.

Stapley phoned his insurer, Australian Associated Motor Insurers Ltd (AAMI), and was told to make arrangements for the vehicle to be towed to a particular AAMI customer service centre where assessors would ascertain the extent of the damage.

Stapley signed a towing authority with Towing Masters' driver.

Rather than go directly to the AAMI service centre, the tow truck driver took a 'circuitous route' – dropping Stapley and his passenger at two locations on the way.

When the tow truck driver arrived at the customer service centre, he presented AAMI with an invoice calculated on the kilometres towed – including his diversions to drop off the passengers. The invoice came to $922.

AAMI rejected the invoice, so the driver towed the damaged vehicle back to Towing Masters' holding yard, telling AAMI that they would now be charged storage costs. Towing Masters alleged that it had a lien over the vehicle until its invoice for the towing charges was paid.

The Supreme Court ruling

The dispute made its way to the Supreme Court to test the proposition that a tow truck operator is entitled to a lien for its towing charges on the grounds that an authoritative decision would be of 'general utility to the towing industry and to the motor vehicle insurance industry'.

At first instance, Justice Palmer held in favour of Stapley (and his subrogated insurer, AAMI), setting out:

'[A tow truck] operator, by attending the scene and offering his services, holds out to the driver, whoever he or she may happen to be, that the truck and his time are available if the owner will pay the fee prescribed under the [Tow Truck Industry] Regulations.'

On this basis, Justice Palmer found that the tow truck operator in this case was a common carrier, and was entitled to a particular lien over the damaged vehicle.

The Court of Appeal ruling

The Court of Appeal, with Justice Campbell delivering the leading judgment, overturned the decision of the trial judge.

The Appeal Judges described the emergence of common carriers as a medieval moral imperative:

'The common carrier is one of the various occupations that are categorised as common callings. The notion of a common calling has its origins in a medieval view that society operates in a way in which people occupied certain stations in life, and had both rights and responsibilities by virtue of occupying those stations in life.'

Quoting from Shakespeare, his Honour noted that a 'common calling was one exercised for the benefit of people in general,' and that therefore common carriers were expected to show care, skill and honesty in their dealings.

When translated from the medieval to a more contemporary legal framework, this moralistic genesis has translated into certain duties imposed on the common carrier, which traverse public service and commerce.

Applying the decision of the High Court in James v Commonwealth (1939) 62 CLR 339, the Court of Appeal held that:

  • The holding out or profession of the character of common carrier may be expressed or implied by a course of business or other conduct.
  • It is a question of fact whether or not a party is a common carrier.
  • You must consider whether the carrier holds themself out as 'ready without discrimination' to carry the goods of any person who may choose to employ them.
  • If a carrier reserves the right of choosing customers or goods to carry, then they are not a common carrier. The onus of proving a reservation of rights is on the person alleging that the carrier is a common one.

The Court of Appeal also highlighted that, particularly as society has drifted from the medieval moral imperative to the paradigm of commercial transactions, 'the mere fact that someone carries on business as a carrier is not in itself enough to make that person a common carrier'. There must be a 'holding out' to the public that one is a common carrier, determined by reference in which the carrier's business is conducted as a whole.

In this case, just because the tow truck operator attended the scene of the accident and was willing to tow the damaged vehicle was not a 'holding out' to the public at large. The Court insisted that the operator's conduct was consistent with attending accidents at which it was prepared to offer its services, but that this fell short of publicly holding out that it would provide services without reservation.

In terms of the lien claimed by the tow truck operator, the Court of Appeal also overturned the decision of the trial judge. The Court was mindful of the fact that the trial judge's decision was likely to be relied upon as a precedent, and with an estimated 65,000 tows annually in New South Wales, the 'flawed reasoning' of the decision could not be allowed to stand.

However, the Court left the door open for further litigation on the connections between common carriers and liens. Justice Campbell was at pains to point out that he expressed 'no view' about the argument that a tow truck driver could become a common carrier if he towed a vehicle under a statutory direction, nor about how the Tow Truck Industry Act 1998 (NSW) and Regulations affect the question of whether a tow truck driver is a common carrier. His Honour noted:

'Even though I propose to declare that there was no lien over the Appellant's vehicle, if in future someone wishes to litigate the question of whether a tow truck driver is entitled to a lien by virtue of being a common carrier, it will be open to submit that the trial judge is free to distinguish the present case.'


It is not often that a case about towing services inspires a Judge to quote Shakespeare. For those who enjoy the etymology of legal doctrines, this judgment is worth reading. For those with a more commercial interest in matters, the decision reinforces the shift from carriage as a moral calling to a species of commerce in which the common carrier is surely an endangered species. It is hard to imagine many carriers these days who would hold out to the public that they are ready to carry any goods, at reasonable rates and without reservation.

© DLA Phillips Fox

DLA Phillips Fox is one of the largest legal firms in Australasia and a member of DLA Piper Group, an alliance of independent legal practices. It is a separate and distinct legal entity. For more information visit

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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