DUTG - The Yacht Case - Forwarding Implications

Trade and Service Issues Bulletin 03/13

THE YACHT CASE - FORWARDING IMPLICATIONS

Did you hear the one about ...

The Federal Circuit Court of Australia (known until recently as the Federal Magistrates' Court) has decided that (i) a shipowner took more than a reasonable time to arrange shipments of cargo and so (ii) they failed in their claim for damages for breach of contract, succeeding only in part, after a client with contracts with the shipowner, did not ship goods with the shipowner. The Reasons for Judgment run to 36 pages (see Spliethoff Transport BV v Leisure Freight and Import Pty Ltd [2013] FCCA 27) and are too complicated to refer to in detail here.

It appears that the Court's decision could be applied to freight forwarders where there is a forwarding contract, with no actual shipment dates stated for the movement of cargo. Where there is an established pattern of shipments and deliveries between the parties, a forwarder may be similarly unable to recover lost revenue. This could happen where a consignee is disgruntled with the level of service under a contract, repudiates the contract and where the level of service (or non service) is found to be unreasonable in the circumstances.

Our suggestion:

Particular care should be taken to ensure that your company can deliver on the level of service specified in a contract. Unachievable undertakings in relation to the timing of the movement of shipments could very easily result in damage to goodwill, reputation and revenue.

As we have said many times before, sales people and over enthusiastic customer service staff can be your worst enemies. We are not saying that this was the situation here, but putting systems, checks and balances in place to control what clients are being offered, is essential.

To put that another way, I think it was Eddie Murphy  in Beverley Hills Cop, who said:

"Don't write cheques with your mouth, that your body can't cash".

Please do not hesitate to contact me with any questions?

With best regards,

John Law

Solicitor and Director; Licensed Customs Broker

The Down Under Trade Group, for Justice, Trade & Customs

"Our Industry Experience, makes the difference"

Bennelong Legal

Central Coast Lawyers

Down Under Legal

Down Under Trade Group

mediating LATERAL Solutions -

Dispute Resolution without Litigation

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