Queensland Bills Explanatory Notes Queensland Bills Explanatory Notes[Index] [Search] [Download] [Bill] [Help]
1
Sea-Carriage Documents
SEA-CARRIAGE DOCUMENTS BILL 1996
EXPLANATORY NOTES
GENERAL OUTLINE
Objective of the Legislation
The objectives of this Bill are to update the law in relation to
entitlement to sue under bills of lading and to extend this law to sea
waybills, ships' delivery orders and sea-carriage documents in electronic
form. In addition, the Bill repeals those sections of the Mercantile Act
1867 providing for limited liability partnerships which are now redundant.
Reasons for the Bill
The existing sections of the Mercantile Act relating to bills of lading no
longer meet the expectations of modern industry. They fail to apply to
certain types of transactions and have no application to sea waybills or
ships' delivery orders which have gained in popular usage as sea-carriage
documents in recent years. They also take no account of advances in
electronic data interchange in the shipping industry. Because of the failure
of the Mercantile Act and corresponding legislation in other States to
address these problems representatives of industry approached the
Commonwealth Government with a view to enacting new legislation
based upon the Carriage of Goods by Sea Act 1992 (UK). The legislation
is to become uniform in all States.
The Mercantile Act also contains sections dealing with the unrelated
issue of limited liability partnerships. However the Partnership (Limited
Liability) Act 1988 provides that any new limited partnerships must be
formed, and any existing limited partnerships renewed, under the later
Act. While the provisions of the Mercantile Act continued to have
transitional effect for some time, they are now redundant.
2
Sea-Carriage Documents
Method by which Objectives will be Achieved
Sections 5 to 7 of the Mercantile Act, which contain the current law
relating to entitlement to sue under bills of lading, are being repealed.
These sections are being replaced by the Bill which extends the right to
sue to certain situations not covered by the Mercantile Act. The Bill also
repeals redundant provisions of the Mercantile Act dealing with limited
liability partnerships and some transitional provisions in the Partnership
(Limited Liability) Act 1988.
Alternatives to the Bill
The alternative is to leave the provisions of the Mercantile Act in place.
However, this would frustrate the operation of the uniform legislative
scheme and place Queensland at a disadvantage in the area of commercial
practice.
Estimated Cost for Government Implementation
It is estimated that there will be no costs for government.
Consistency with fundamental legislative principles
The Bill is consistent with fundamental legislative principles.
Consultation
The Bill is based on the Carriage of Goods by Sea Act 1992 (UK) ("the
UK Act") which was the result of extensive consultation in the United
Kingdom. Consultation was assisted by the preparation and circulation by
the Law Reform Commission and Scottish Law Reform Commission of a
report titled "Rights of Suit in Respect of Carriage of Goods by Sea"
(London: HMSO, 1991). This consultation is relevant to Queensland as
the Act will have consequences for international shipping arriving into and
leaving from Queensland ports.
Consultation has taken place around Australia through circulation of
two discussion papers prepared by the Commonwealth Attorney-General's
Department and Commonwealth Department of Transport, as well as a
draft bill. A wide range of industry groups including lawyers, bankers,
3
Sea-Carriage Documents
insurers, commodity exporters and shippers have been consulted and
indicated their support for the Bill.
NOTES ON PROVISIONS
Clause 1. This sets out the short title of the Act.
Clause 2. States that the Act will not have any retrospective effect.
Clause 3. Sets out relevant definitions.
The definition of "bill of lading" is based on the definition in section
1(2) of the UK Act. It includes a "received for shipment" bill of lading as
well as a "shipped" bill of lading.
"Contract of Carriage" is defined in relation to each sea-carriage
document. This definition is based on that in section 5(1) of the UK Act.
"Data message" means information which exists, is produced or
communicated in electronic form. This definition is based on that in
Article 2 of the draft Model Law on Legal Aspects of Electronic Data
Interchange (EDI) and Related Means of Communication as developed by
the United Nation's Commission on International Trade Law
(UNCITRAL).
"Goods" is defined in relation to a sea-carriage document.
The definition of "identification" is based on section 5(3) of the UK
Act. The definition provides for situations where the document allows the
identity of the person named to be varied after its issue. It makes clear
that, in the case of a sea waybill, the person entitled to sue includes the
person who (though not initially the named consignee) subsequently
becomes the person entitled to delivery, as when the shipper varies its
instructions so that the carrier is required to deliver to someone other than
the original consignee. Similarly, in the case of a ship's delivery order, it
covers the undertaking made to "X or order".
The definition of "lawful holder" is based on section 5(2) of the UK
Act. The "lawful holder" of a bill of lading is either the consignee named
in the bill or any endorsee (including the holder of a "bearer" bill) who is
in possession of the bill in good faith, including those cases where the
person becomes a lawful holder after the bill of lading has ceased to be a
transferable document of title (but see subclause 6(4)).
4
Sea-Carriage Documents
The definition of "sea-carriage document" ensures that the Act applies
to bills of lading, sea waybills and ships' delivery orders.
The definition of "sea waybill" is based on that in section 1(3) of the
UK Act. A sea waybill is a receipt issued by the carrier of goods which
contains or evidences a contract for the carriage of goods by sea and under
which the carrier undertakes to the shipper to deliver to the person who is
for the time being identified as being entitled to delivery. There is
nothing in this definition which operates to exclude "received for
shipment" sea waybills from the Act.
The definition of "ship's delivery order" is based on that in section 1(4)
of the UK Act. A ship's delivery order is a document which contains an
undertaking by the carrier to deliver the goods to the order of a named
person. Clause (a) covers the case where the goods to which the delivery
order relates form a part of other goods.
Clause 4. Applies the provisions of the Act to sea-carriage documents in
the form of data messages and to communications of sea-carriage
documents in the form of data messages. Subclauses (3) and (4) make it
clear that the parties to the contracts are to agree on the procedures for
effecting these electronic transactions.
Clause 5. This clause is based on section 5(4) of the UK Act. It makes
it clear that rights of suit in relation to any document can exist in respect
of goods which are not ascertained or have ceased to exist, as when goods
form part of a larger bulk or where goods are destroyed in transit.
Clause 6. Subclauses (1) and (2). These subclauses are based on
subsection 2(1) of the UK Act. They allow (a) the lawful holder of a bill
of lading; (b) the consignee identified in a sea waybill; (c) the person
entitled to delivery in accordance with an undertaking given in a ship's
delivery order, to assert contractual rights of suit against the carrier of the
goods. As for the words in brackets in subclause 6(1)(b), the shipper will
have rights of suit by being a party to the contract of carriage. See also
subclause 6(5).
Subclause (3). This subclause is based on subsection 2(3) of the UK
Act. It makes it clear (a) that the person entitled to sue under a ship's
delivery order does so on the terms of the undertaking contained in the
order; and (b) that any such rights are confined to the goods covered by
the order.
5
Sea-Carriage Documents
Subclause (4). This subclause is based on section 2(2) of the UK Act. It
allows the lawful holder of a bill of lading which is no longer a
transferable document of title to sue the carrier providing that it became
the holder of the bill under arrangements made before the bill ceased to be
a transferable document of title. The words "possession of the bill no
longer gives a right ... to possession of the goods" include the case where
delivery of the goods has been made and also the case where the goods are
destroyed.
Subclause 4(b) makes it clear that where a person becomes the holder of
a bill of lading as a result of the rejection by another of goods or
documents delivered under arrangements made before the bill of lading
ceased to be a transferable document of title, that person will be able to
assert contractual rights against the carrier.
Subclause (5). This subclause is based on section 2(4) of the UK Act. It
provides that, where the person who has rights of suit has not suffered any
or all of the loss in question, he or she can exercise the rights of suit for
the benefit of the person who has suffered the loss.
Subclause (6). This subclause applies the clause to contracts of carriage
which have been varied by the parties.
Clause 7. This clause is based on subsection 2(5) of the UK Act. It
provides that:
Subclause 1
(a) The shipper under a bill of lading ceases to have any contractual
rights once someone else becomes the lawful holder.
(b) The intermediate holder of a bill of lading ceases to have
contractual rights once someone else becomes the lawful holder.
Subclause 2
(a) Those intermediately entitled to delivery under the terms of a
sea waybill cease to be entitled to rights of suit once someone
else becomes entitled to delivery. Usually, the person entitled to
sue will be the consignee named in the sea waybill. However,
where the consignee's name is changed before delivery, it will
cease to be entitled to sue under the Act and, instead, the new
consignee will have rights of suit.
6
Sea-Carriage Documents
Those intermediately entitled to delivery under a ship's delivery
order cease to be entitled to rights of suit when someone else
subsequently becomes entitled to delivery.
(b) The rights of a sea waybill consignee do not affect any rights
which the shipper may have under the waybill contract.
(c) In the case of a ship's delivery order, the rights of the person
entitled under the delivery order are in addition to any rights
possessed by any person under the contract of carriage in
relation to which the order is issued.
Clause 8. This clause is based on subsection 3(1) of the UK Act. It
provides that when any person entitled to sue takes or demands delivery or
otherwise makes a claim against the carrier, the person becomes subject to
any contractual liabilities as if the person had been a party to the contract
of carriage. Likewise, where a person takes or demands delivery before
the person had any contractual rights (as where he or she takes delivery
pursuant to a letter of indemnity), the person becomes liable under the
statute when the rights are subsequently conferred on him or her.
Clause 9. This clause is based on section 3(3) of the UK Act. It
provides that nothing in clause 8 affects any of the shipper's (or carrier's)
liabilities as an original party to the contract of carriage.
Clause 10. Subclauses (1) and (3) are based on section 4 of the UK Act.
These subclauses dispose of the rule in Grant v Norway (1851) 10 C.B.
665. They provide that a bill of lading, representing goods to have been
shipped or received for shipment and in the hands of the lawful holder, is
conclusive evidence against the carrier of such shipment or receipt.
Subclause (2) has no equivalent in the UK Act. It provides 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.
Clause 11. Amends the Acts in the Schedule.
Schedule
Repeals sections 5 to 7 of the Mercantile Act. Sections 5 to 7 constitute
the current Queensland legislation relating to bills of lading, which were
based on the Bills of Lading Act 1855 (UK). They are being replaced in
full by this Act.
7
Sea-Carriage Documents
Repeals sections 53 to 68 of the Mercantile Act. These sections relate
to limited liability partnerships. They have been made redundant by the
Partnership (Limited Liability) Act 1988. Sections 1 and 2 of the later Act
commenced on the date of assent, 11 November 1988. The remainder of
the Act commenced on 15 May 1989. As that Act provided that
partnerships were unable to be entered into or renewed under the
Mercantile Act and any existing partnerships formed under the Mercantile
Act were subject to a duration limited to seven (7) years, the date that any
partnerships formed under the Mercantile Act ceased to exist was 15 May
1996. Since that date sections 53 to 68 of the Mercantile Act have ceased
to have any effect and all limited liability partnerships are formed and
renewed under the Partnership (Limited Liability) Act 1988.
Repeals sections 5 of the Partnership (Limited Liability) Act 1988
which contains now redundant transitional provisions relating to the
Mercantile Act.
© The State of Queensland 1996