BNP PARIBAS v PACIFIC CARRIERS LTD [2005] NSWCA 72

New South Wales Court of Appeal

CITATION: BNP PARIBAS v PACIFIC CARRIERS LTD [2005] NSWCA 72

HEARING DATE(S): 15 February 2005, 16 February 2005, 17 February 2005

JUDGMENT DATE: 28 April 2005

JUDGMENT OF: Handley JA at 1; Sheller JA at 80; Giles JA at 103

DECISION: (1) Grant leave to amend ground 15 of the notice of appeal by substituting "in contract" for "in tort"; (2) Appeal allowed; (3) Set aside the judgment for PCL against BNP for $US4,378,788.49 and in lieu thereof judgment for such sum calculated in accordance with these reasons as the parties may agree and advise the Registrar within 21 days, taking effect on 24 October 2001; (4) Cross-appeal dismissed; (5) PCL pay seventy-five per cent of BNP's costs of the appeal and cross-appeal; (6) Liberty to apply on seven days notice in the event of inability to agree upon the substituted judgment sum.

CATCHWORDS: CONTRACT LAW - liability under contract of indemnity for misdelivery of cargo - assessment of damages - whether costs incurred in settling claim at arbitration recoverable - whether settlement reasonable - consequences for the damages assessed when settlement was unreasonable - whether contract of indemnity allowed for recovery of legal costs

LEGISLATION CITED: Trade Practices Act 1974

Attorney General v Arthur Royal Automobiles Ltd [1938] 2 KB 16 CA Bagnall v National Tobacco Corporation of Australia Ltd (1934) 34 SR (NSW) 421 Biggin & Co Ltd v Permanite Ltd [1951] 1 KB 422; [1951] 2 KB 314 BNP Paribas v Pacific Carriers Ltd [2002] NSWCA 379 Burns v MAN Automotive (Aust) Pty Ltd (1986) 161 CLR 653 Cackett v Keswick [1902] 2 Ch 456 Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 Cotterell v Stratton [1872] LR 8 Ch Apps 295 Distillers Co Biochemicals (Aust) Pty Ltd v Ajax Insurance Co Ltd (1974) 130 CLR 1 Dobson v Espie (1857) 157 ER 33 Edwards v Insurance Office of Australia Ltd (1934) 34 SR 88 General Omnibus Co Ltd v London General Insurance Co Ltd (1936) IR 596 Gomba Holdings (UK) Ltd v Minories Finance Ltd [No 2] [1993] Ch 171 Kai Yung v Hong Kong and Shanghai Banking Corporation [1981] AC 287 Lawlor v Gray [1984] 3 All ER 345 Maynegrain Pty Ltd v Compafina Bank (1984) 1 NSWLR 258 CASES CITED: McIntosh v Dalwood (No 3) (1930) 30 SR (NSW) 332 McIntosh v Dalwood (No 4) (1930) 30 SR 415 O/Y Wasa Steamship Co Ltd v Newspaper Pulp & Wood Export Ltd (1940) 82 Lloyds L Rep 936 Pacific Carriers Ltd v Banque Nationale de Paris [2001] NSWSC 900 Pacific Carriers Ltd v BNP Paribas [2004] HCA 35 Post Office v Norwich Union Fire Insurance Society Ltd [1967] 2 QB 363 Rawlinson v Clarke (1984) 153 ER 442 Robinson v Harman (1848) 1 Ex 850 Rosenberg v Percival (2001) 2005 CLR 434 Sandtara v Australian European Finance Corporation Ltd (1990) 20 NSWLR 82 Smith v Chadwick (1884) 8 App Cas 187 The Sormovskiy 3068 (1994) 2 Lloyd's Law Rep 266 South Eastern Sydney Area Health Service v Gadiry (2002) 54 NSWLR 495 CA Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 192 CLR 603 Vero Insurance v Baycorp Advantage [2004] NSWCA 390 West v AGC (Advances) Ltd (1986) 5 NSWLR 610