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Explanatory note
This explanatory note relates to this Bill as introduced into Parliament.
A bill of lading is a document signed and delivered by the master of a ship to
the shippers (or consignors of goods) on goods being shipped. It is a receipt
for the goods shipped, evidence of the terms of a contract of carriage between
the shipper and the carrier and a document of title to the goods shipped.
At common law, a buyer of shipped goods (being the consignee or endorsee
of a bill of lading) is in general unable to sue the carrier for breach of contract
if the goods were lost or damaged in the course of shipment because the
buyer is not a party to the contract of carriage between the carrier and the
shipper of the goods. However, under Part 5A of the Sale of Goods Act 1923
the consignee of goods named in a bill of lading and every endorsee of a bill
of lading to whom the property passes upon or by reason of consignment or
endorsement has the same rights of action and is subject to the same
liabilities in respect of the goods as if the contract had been made with the
consignee or endorsee.
The proposed Act will allow the transfer of contractual rights from the
shipper to the lawful holder of a bill of lading and for such a transfer to occur
irrespective of whether property has passed upon or by reason of
consignment or endorsement of the bill of lading. It will extend the
contractual rights to persons to whom delivery of goods is made under a sea
waybill or ship's delivery order, which are commonly used instead of bills of
lading in the carriage of goods by sea.
The proposed Act repeals Part 5A of the Sale of Goods Act 1923, which
contains the current law relating to rights of action under bills of lading, and
replaces it with new provisions for the purposes described above.
The Bill is based on provisions of the Carriage of Goods by Sea Act 1992
(UK) and is uniform with legislation that has been prepared for enactment
throughout Australia.
Preliminary
Clause 1 sets out the name (also called the short title) of the proposed Act.
Clause 2 provides for the commencement of the proposed Act on a day or
days to be appointed by proclamation.
Clause 3 provides for the proposed Act to apply only in relation to
sea-carriage documents coming into existence on or after the commencement
of the proposed section.
Clause 4 repeals Part 5A of the Sale of Goods Act 1923.
Clause 5 defines certain expressions used in the proposed Act, including bill
of lading, lawful holder, sea waybill, ship's delivery order and data
message. A data message means information generated, stored or
communicated by electronic, optical or analogous means including, but not
limited to, electronic data interchange, electronic mail, telegram, telex and
telecopy.
Clause 6 applies the provisions of the proposed Act to sea-carriage
documents in the form of data messages and to communications in the form
of data messages. The proposed Act is to apply with necessary changes and
in accordance with procedures agreed between the parties to the contract of
carriage.
Explanatory note page 2
Clause 7 makes it clear that rights of action in relation to a sea-carriage
document can exist in respect of goods that are not ascertained or have
ceased to exist (for example, when goods form part of a larger bulk or have
been destroyed in transit).
Part 2
Rights under contracts of carriage
Clause 8 allows the lawful holder of a bill of lading, the consignee
identified in a seaway bill and the person entitled to delivery in accordance
with a ship's delivery order to assert contractual rights of action against the
carrier of the goods to which the sea-carriage document relates (subclauses
(1)-(3)). A person who acquires a bill of lading after delivery of the goods
will have a right of action if the person obtains the document under
arrangements made before the delivery (subclause (4) (a)) or becomes the
holder of the sea-carriage document as a result of reindorsement of the bill of
lading following rejection of the goods or documents (subclause (4) (b)). A
person who has a right of action will be able to exercise that right on behalf
of another person who suffers loss or damage but does not have a right of
action (subclause (5)).
Clause 9 provides for the extinguishment of former rights of action
following transfer of rights under clause 8.
Part 3
Liabilities under contracts of carriage
Clause 10 provides for the assumption of contractual liabilities (such as
liability for freight and demurrage) by a person (for example, a bank holding
a bill of lading as security) obtaining contractual rights by virtue of clause 8
if the person takes or demands delivery or otherwise makes a contractual
claim against the carrier.
Clause 11 makes it clear that the imposition of liability under clause 10 does
not prejudice the liability of any original party to the contract of carriage.
Part 4
Evidence
Clause 12 disposes of the rule in Grant v Norway (1851) 10 CB 665, which
is authority for the proposition that a ship's master has no authority to sign
bills of lading for goods not put on board (subclauses (1) and (3)). It provides
that a bill of lading, representing goods to have been shipped or received for
shipment on board a vessel and in the hands of the lawful holder, is
Explanatory note page 3
conclusive evidence against the carrier of the shipment or receipt. It also
provides (subclause (2)) that a bill of lading to which the clause applies is
prima facie evidence against the carrier in favour of the shipper that the
goods have been shipped, or in the case of a received for shipment bill of
lading, that they have been received for shipment.
Part 5
Miscellaneous
Clause 13 empowers the Governor to make regulations.
Clause 14 provides for a review of the operation of the proposed Act to be
conducted by the Minister after 5 years from the date of assent.
Explanatory note page 4