Hines Exports Pty Ltd (Hines) was a meat exporter, and Mediterranean Shipping Co SA (MSC) a shipping company. In 1995, Hines bought 614 frozen mutton carcasses from Alliance Meat Packers, with the intention of on-selling the meat to Capital Meats (based in South Africa), who had in turn on-sold it to Lucky Star Meat Wholesalers. Hines and Alliance Meat Packers had an FOB sales contract under which the latter agreed to deliver the meat to a ship in the Port of Melbourne. Property in the meat would pass to Hines upon delivery on board the ship.

Hines contracted with MSC to supply refrigerated containers and to carry the meat in the containers from Melbourne to Cape Town, South Africa. The refrigerated containers were delivered by MSC to Alliance Meat Packers to have the meat packed inside, before the containers were taken to the Port of Melbourne and placed on the ship. Hines was not a party to any contract for transporting the containers to the port or the ship. Once the containers were on board, MSC issued a bill of lading, which Hines received.

When the meat arrived in Cape Town and was received by Lucky Star Meat Wholesalers, it was discovered that the meat in one of the containers had unfrozen and was unfit for human consumption. Moreover, part of the seal on the container door was missing, allowing warm air to enter.

Hines sued MSC for breach of contract and negligence, claiming damages for both the value of the goods and the labour costs in disposing of the meat. However, the bill of lading contained an exemption clause, cl 15(c), stipulating that:

If the articles accepted for transportation are containers the contents having been packed and stowed inside the container by or on behalf of the Merchant and not by or on behalf of the Carrier, then the Carrier shall be under no liability in the event of loss or damage to any of the goods directly or indirectly caused by the manner in which the contents have been packed and/or stowed inside the container/s or by the unsuitability of the contents for container carriage or by the unsuitability or defective condition of the container.

The intended effect of this was that MSC would avoid both direct and indirect responsibility for the state of the goods, because Alliance Meat Packers packed the meat into the container on behalf of Hines.

There was also a time limitation clause in the contract, cl 21, which was similar to art 3.6 of the Hague-Visby Rules, stating that the carrier would be discharged from all liability if suit was not commenced within a year of delivering the goods, or from the date that the goods ought to have been delivered. Lucky Star Meat Wholesalers received the containers on 15 May 1995 and Hines only commenced its action on 7 June 1996.

There was an initial trial in the District Court of South Australia, which found in favour of MSC, and from which Hines appealed to this Court.

Held: Appeal allowed, with the matter to be relisted for trial before the trial Judge, and both parties to be allowed to reopen their cases and adduce further evidence, subject to several qualifications.

Hines' argument was that the trial Judge erred in refusing to reopen the case (applications from both parties to reopen the case were earlier dismissed), or, in the alternative, that there was sufficient evidence of the loss that it had suffered to warrant the Court finding in its favour. MSC argued that the trial Judge erred in holding that the terms and conditions of the bill of lading did not form part of the contract between the parties, and that, since the bill of lading embodied the contract terms, Hines could not succeed, because of cl 15(c). MSC also contended that Hines could not succeed because of cl 21, and art 3.6 of the Hague-Visby Rules, which established an almost identical time bar.

Regarding Hines' arguments, it could only recover damages for either breach of the contract of carriage, or for breach of MSC's common law duty of care. There was a CIF sales contract between Hines and Capital Meats. Usually, the consignor's duties under a CIF contract would be satisfied once the goods and correct documents had been delivered on board the ship. Moreover, risk usually passes to the consignee upon shipment under a CIF contract, and the consignee is obliged to accept and pay for the goods upon documentary presentation.

Hines argued that it retained property in the goods - and therefore was entitled to compensation for the loss - at all times, because those goods had not been properly delivered. By 'delivered', Hines was referring to the fact that the meat had not been through Customs and passed the necessary inspections.

Bleby J, on behalf of the Court, found no evidence that risk after shipment remained with Hines, noting that having property in the goods did not correlate with bearing risk. In his Honour's view, it was unnecessary to decide who had property in the goods at the time of the loss, and there was no evidence that Hines retained property rights over the meat or bore the risk of its damage or loss. Because of this, Bleby J agreed with the trial Judge that Hines had not established that it had suffered any loss when the cargo was damaged.

As to Hines' argument for reopening the case, Bleby J noted that when the initial application was heard, reasons for judgment had been delivered, but the judgment itself not yet entered. Again, his Honour agreed with the trial Judge's decision to deal with the applications for reopening the case on the basis that they were made in the course of addresses and not after the judgment. The applications were also dismissed because if Hines' case had been reopened, it would have raised various questions on which findings had already been made.

However, Bleby J found that the trial Judge had erred in refusing to deal with Hines' application at the time it was made, and deferring it until after reasons were published. That decision led MSC to make its own application to reopen the case, and created unnecessary difficulties for the parties. By dealing with Hines' application to reopen before the publication of the trial Judge's reasons, the consequence of further evidence possibly compelling an alteration of those reasons could have been avoided. Dealing with the application at the time it was made might also have allowed Hines' difficulties in proving its loss to be explored. As it was, the trial Judge's decision not to contemplate Hines' application to reopen at the appropriate time, meant that irrelevant factors influenced the decision to later refuse it.

Because Hines was presently well aware of the faults and challenges in its case to prove its loss, allowing the application to reopen now would grant Hines the benefit of hindsight, which could give Hines an unfair advantage over MSC. If Hines were to be permitted to reopen its case, MSC would necessarily need to be granted some equivalent benefit - most likely, the chance to also reopen its own case, if only to answer further evidence led by Hines. This would be allowed despite the fact MSC had not appealed against the refusal of its initial application, because of the unusual circumstances, and the interest in doing justice between the parties.