B BRAUN AUSTRALIA PTY LTD v MOGAL FREIGHT SERVICES PTY LTD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL GLEESON CJ, MEAGHER and HANDLEY JJA 11 September 1991, 6 November 1991 [1991] NSWCA 14 Bailments — Particular Bailments — locatio operis faciendi Crouch v Jeeves (1938) Pty Limited (1946) 46 SR (NSW) 242, applied BAILMENTS — Particular bailments — locatio operis faciendi — container delivered for fumigation to quarantine terminal operator — process of fumigation damages contents — HELD — dismissing the appeal, that in all the circumstances and having regard to the instructions given to the operator, it was not the responsibility of the operator to satisfy itself that the goods in the container were not liable to be damaged by the fumigation. Gleeson CJ In January 1988 the appellant imported two containers in which there were goods described as "medical disposables". Only one of the containers is of present relevance. It was ordered into quarantine, not because of anything to do with the medical disposables, but because there were also in the container wooden pallets that were suspected of being infected with wood wasps. It was fumigated at a quarantine terminal following a direction given by a quarantine officer. The fumigation caused damage to the medical disposables. The appellant sued the respondent, the quarantine terminal operator, for damages for negligence. The action came before Carruthers J in the Admiralty Division. (There were other claims, which id not proceed, that brought the matter within that jurisdiction). His Honour found in favour of the quarantine terminal operator, and dismissed the action. This appeal is against that decision. It is convenient to begin by considering the background of statutory regulation, and commercial practice, against which the events in question took place. The Quarantine Act 1908 established a system of quarantine. $13(1) provides for the Governor-General to appoint places on land or sea to be quarantine stations for the performance of quarantine. S44C empowers a quarantine officer to examine any imported goods that have not been released from quarantine. S48 provides that all goods ordered into quarantine may be treated and disinfected as prescribed, and when so treated and disinfected, may be released from quarantine. The respondent operates the quarantine terminal, and carries on a business of providing quarantine services, for reward, to persons whose goods need inspection and, perhaps, treatment, before being released from quarantine. At the time relevant to these proceedings any necessary fumigation was carried out at the respondent's premises by a sub-contractor, but nothing turns on that. At the premises there was stationed a quarantine officer who was available to make inspections, and to give directions as to what was to be done before the goods would be released from quarantine. After having spent some days at a container terminal following importation, the container in question in these proceedings was collected by a carrier, Address Freight, whose services had been engaged by the appellant's Customs agents. A form of Quarantine Entry (QP 26) had been prepared by the Customs agents and 2 UNREPORTED JUDGMENTS completed by the quarantine authorities, and those authorities directed that the container should be forwarded to a container terminal for "Tailgate". That term denoted a form of inspection which involved, in essence, opening the door of the container, looking inside, and then making a decision as to what, if any, treatment was required. The form QP 26, when completed, specified a container terminal other than that operated by the respondent, but the carrier took the container to the respondent's terminal for reasons that seem to have been accepted as good and sufficient reasons, and it was common ground that it was within the authority of the driver to make a decision of that nature. The container arrived, on the carrier's truck, at the respondent's terminal, the form QP 26 was handed over, and a tailgate inspection was carried out. The quarantine officer at the terminal directed fumigation. As was indicated earlier, this direction was given by reason of the condition of the pallets in the container, not the medical disposables. The direction was given on a document described as form QP 25 and headed "Plant Quarantine Stop Notice". It stated that the goods detailed in the notice were not to be delivered without presentation of a permit issued under the Quarantine "Plants Regulations. Although the word "pallets" is written on the face of the notice, when the notice is read as a whole it appears to me to identify, as the relevant "goods", the container. This is evidently the way in which it was understood by the persons involved. The notice contained, in handwriting in summary form, a direction as to what was to be done in relation to the container. The direction required fumigation, in accordance with certain specifications, and, for a specified time. The people at the container terminal obviously interpreted this direction as requiring fumigation of the whole container, although they would no doubt also have been aware that the purpose of the fumigation was to treat the pallets in the container. They went ahead and carried out the fumigation, and damage to the medical disposables resulted. The principal issue that was fought at the trial is one that does not arise on this appeal. The officer of the appellant's Customs agency who was handling the matter, Mr Meek, claimed that, prior to the fumigation, he contacted an employee of the respondent and gave instructions that fumigation should not take place until he had an opportunity to contact the appellant and find out whether there was anything in the container that might be damaged by fumigation. It seems to have been common ground that there was an alternative, but more time-consuming and costly, procedure that could have been followed if people had been aware that the medical disposables were liable to be damaged by the process of fumigation. The medical disposables could have been removed from the container, and the pallets taken out and either separately treated or destroyed. Mr Meek's contention was that he should have been given an opportunity to arrange for this to be done, and that the fumigation that occurred was contrary to his express instructions. Carruthers J, for reasons that need not be examined, did not accept the evidence of Mr Meek, and found that no instructions had been given by the Customs agents or anybody else on behalf of the appellant to delay fumigation. There is no appeal against that aspect of his Honour's decision. The appellant, however, put an alternative case, and it is that which forms the basis of the present appeal. It was argued that, even accepting that Mr Meek did not give the instructions, or make the request, alleged by him, nevertheless, it was negligent on the part of the respondent to fumigate the container without knowing one way or the other whether the goods in it might be damaged by fumigation, and without taking any steps to find out. URBRAUN AUSTRALIA PTY LTD v MOGAL FREIGHT SERVICES PTY LTD (Gleeson CUB That way of putting the appellant's case raises, as the central issue, the question as to who, in the circumstances, had the responsibility for taking care to see that the contents of the container were not liable to be damaged by fumigation, and, in particular, whether the responsibility of the respondent went beyond carrying out the work it was directed to do in a reasonably careful manner. So far as the respondent was concerned, it was Address Freight who dealt with it on behalf of the owner of the goods. That firm had possession of the goods and brought them to the respondent's terminal. The truck on which the container arrived was driven by an employee of Address Freight, Mr Copeland. Mr Copeland's objective was to have the container inspected and then treated in such a way as would secure its release from quarantine, so that the container might then be delivered to the appellant. The primary obligation of the respondent was to deal with the container in the manner stipulated by the representative of the owner of the goods, that is to say, Mr Copeland. However, in practice, that would ordinarily involve dealing with the container in the manner required by the quarantine officer as a condition of releasing it from quarantine. Neither Mr Copeland, nor the quarantine officer, nor any employee of the respondent, adverted to the possibility that fumigation might harm the medical disposables in the container. It is also apparent that the persons concerned at the container terminal understood and treated the direction from the quarantine officer contained in the form QP 25 as a direction to fumigate the whole container. Consistently with that, if they had decided to pursue the alternative course of removing the pallets, and dealing with them separately, they would have required a variation of the direction. It is of some significance in this regard to note that the form of the "Job Card" raised pursuant to the issue of the form QP 25 notice contained provision for marking a direction to "unpack", but that direction was left unmarked. The legal obligation of the respondent was defined by Jordan CJ in Crouch v Jeeves (1938) Pty Limited (1946) 46 SR (NSW) 242 at 244-5 in the following terms: "Tn the present case, the contract between the parties was bailment of the type locatio peris faciendi. Subject to any provision in the contract to the contrary, the obligations of the bailee company were to do the stipulated work on the bailed chattels, to do it within a reasonable time, to do it properly, and to take reasonable care of the chattels whilst in its custody: if the chattels were not forthcoming or were injured or destroyed, the onus was on the bailee to prove that this was not through negligence on the bailee's part." The respondent contends that it simply dealt with the goods in the manner in which it was instructed by the representative of the owner of the goods and the quarantine officer. Its contract was to fumigate the goods as required by the quarantine officer, and it did so. Its duty to take reasonable care of the container, and the contents of the container, did not, in the circumstances, oblige it to check on the wisdom of the instructions it was given, and it had no responsibility for satisfying itself that the medical disposables in the container were not likely to be harmed by the process it was instructed to carry out. As was pointed out by Captain Gray, a witness called at the trial on the part of the appellant, it would have been possible for the respondent, if such were its responsibility, to have taken various steps that might have avoided damage to the appellant's goods. The respondent, for example, could have delayed fumigating 4 UNREPORTED JUDGMENTS the container until it checked with the owner, or the Customs agents, as to the vulnerability of the contents of the container. Alternatively, the respondent could have noted that the objective of the treatment was to deal with the pallets, not the medical disposables, and could have raised the possibility of a variation of the Customs officer's direction. In pointing out those possibilities Captain Gray was remarking upon the obvious. The essential question, however, is whether, in the circumstances, it was the legal responsibility of the respondent to take the initiative in such matters, or whether, on the other hand, it was entitled to deal with the container in accordance with the instructions of Mr Copeland and the Customs officer. Carruthers J resolved this issue in favour of the respondent, and in my view that conclusion was correct. There was nothing about the description of the contents of the container as "medical disposables" that should have put the respondent on guard against the possibility that they were, or might, be likely to be damaged by fumigation. Indeed, it would hardly be reasonable to expect a quarantine terminal operator to know what kind of goods were being given that generic description. No steps were taken (as his Honour found) by the owners of the goods, their Customs agents, or their carriers, to alert the respondents to the possibility that the contents of the container might be damaged by what was evidently routine quarantine treatment. The instructions as to how the goods should be dealt with were regarded as simple and clear. In the circumstances of the case I do not consider that the exercise of reasonable care required the respondent to question those instructions or to delay compliance with them. The appeal should be dismissed with costs. Meagher JA I agree with the Chief Justice. Handley JA I agree with the Chief Justice. Appeal dismissed with costs. Counsel for Appellant: A Street / P G Nell Solicitors for Appellant: Shaw McDonald Counsel for Respondent: N W Caldwell QC \ G Blake Solicitors for Respondent: Baker and McKenzie