Circuit v Andrews Housemovers Limited [2015] NZDC 24886 [18 December 2015]

Mr and Mrs Circuit purchased a house that was situated on land in Ellerslie, with the intention of moving it to their own property in Tairua. They engaged the defendant, AHL, to transport the house. For that to occur, AHL cut the house in half and carried each half on a separate truck. During the move itself, the front section of the house was completely destroyed. AHL accepted liability for the loss under the Carriage of Goods Act 1979, but said that its liability was limited by the Act to the sum of $2000—a problem that the plaintiffs were keen to circumvent because they had not followed AHL’s advice to insure the house while in transit.

The Circuits’ argument to the contrary asserted that the Act did not apply because the house did not constitute “goods” as defined in the Act. They claimed entitlement to damages (including consequential losses) based on breach of contract, breach of the Contractual Remedies Act and negligence. They also said that in the event that the Carriage of Goods Act was held to apply, the limitation sum was to be calculated by reference to the number of items said to have been removed from the house before it was separated for carriage.

The definition of “goods” in the Act includes all chattels and all things of value. His Honour Judge G M Harrison had no difficulty in accepting that the house fell within this definition. Once he had done so, it followed that the Act as a whole applied to the carriage of the house. The consequence for the plaintiffs was that their various causes of action which were not based ontheActthenautomatically failed, because the Act is a code and it governs all carrier liability.

As to the extent of liability, the defendant argued that the Act requires the number of units of goods to be assessed by reference to the number of units accepted by the carrier for carriage, regardless of what might happen thereafter in terms of dismantling or alteration. The defendant here had accepted one complete house and had itself attended to the cutting of the house and removing various fixtures and fittings for carriage. Therefore the $2000 limit for the one unit that was lost or damaged in transit, applied. The court agreed with this analysis.

The court then rejected the claim that the defendant was liable for the plaintiffs’ unachieved capital gain (expectation losses) on the value that the house wouldhave had, should it have made it safely to its intended destination.

Ultimately, judgment was entered for the plaintiffs for the sum of $2000—the outcome contended for by the defendant from the outset.