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Question:

Our client contracts to a large transport company who has contracts with wineries to transport grapes from their vineyards.

The client is paid on an hourly basis to transport the grapes on behalf of the transport company, dependant on the capacity of their truck/trailer unit.

Our client had a load of 8 Tonne, but lost 4 Tonne to the ground. The transport company has invoiced them for $8,000 ($2,000 per unit, 4 units).

Our client has Carriers Liability and our insurer has advised that because our client is paid hourly, under Section 259(4) ("The reference to each unit of goods in subsection (2) is to each unit of goods as accepted for carriage by the actual carrier or (if the carriage is undertaken by more than 1 carrier) the first actual carrier (whether or not the unit that is accepted is subsequently packed, repacked, or unpacked, or otherwise aggregated with or segregated from any other goods, at any stage of the carriage)."), the definition of a unit is one truck load so our insured's liability is only $2,000.

My argument is that the hourly rate has no bearing on the definition of a unit and therefore Section 247 should apply (“Meaning of unit of goods (1) In this subpart, unless the context otherwise requires, unit of goods or unit,—

(a)in relation to bulk cargo, means the customary freight unit; that is, the unit of bulk, weight, or measurement on which the freight for that type of cargo is customarily computed or adjusted (subject to subsection (2)):”).

As grapes are commonly measured by the tonne (Bought, Sold, Weighed, Pressed, Consigned, Harvested) in the wine industry, I would have thought this measurement would apply to the carriers risk?

Would it make a difference if we say got the larger Transport Company to confirm that they calculate freight per Tonne?

Are we beating a dead horse here and the actual liability is indeed $2,000 not $8,000?

Pauline Davies replies:

Ah, the annual grape harvest issue. This comes up every year, without fail.

The first point to make is that the liability to the wineries falls on the transport company as contracting carrier. The transport company has the initial obligation to settle that part of the claim, and then can talk to your client about its separate obligation as an actual carrier.

It sounds from what you have said that the arrangement between your client and the transport company is accepted as being one at limited carrier's risk.

I agree with the insurer that the initial question to address, is as to what "unit of goods" was accepted for carriage for the actual carrier, under section 259(4). This is a factual issue and there is insufficient information here to answer it. Were the grapes just tipped into the truck in bulk or were they in bins? Who did the loading of the truck - winery staff, or your client (or someone else?) Was your client's driver in attendance at the time the loading was carried out, or did s/he go off for a coffee and come back when the work was done? Was the driver able to verify the quantity loaded, perhaps by weighbridge if the load was in bulk? 

If the conclusion from all of this is that your client accepted one full truck load of grapes in bulk, I would agree that there was a single unit of goods and liability is limited to $2000.

 



March 2022

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