AC 154,  1 All ER 1015
-Ajax Machine Tool Co. Ltd. manufactured and consigned a drill to A.M. Satterthwaite & Co. Ltd.
-there was no liability for the carrier or servants/agents to the consignee,
-all claims must be within one year (Carriage of Goods by Sea Act), and
-not accountable for damages in excess of £100 unless the goods were insured for that value.
-The stevedores were New Zealand Shipping (of which the Federal Steam Navigation Co. was a subsidiary) and they unloaded the drill and in the course of unloading damaged the drill due to negligence.
Does the limited liability clause in the bill of lading apply to the stevedores in this case?
Yes. Appeal was allowed with costs to the appellant. Liability clause applies.
The test for agency:
-if the party is meant to be covered by provisions;
-if the promissor is clearly acting as agent for the party; and
-if the promissor has authority to do this;
Consideration then moves from party through agent to promissee. Applying the test to this case, the court found that it is clear that there is a subsidiary relationship between the parties.
-Satterthwaite agreed to exempt carrier and agents from liability in the bill of lading and commercial realities must mean that this covers the whole carriage from loading to discharge.
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