Written by Jessica Woods
The recent Supreme Court of Victoria decision in Manassen Foods v Seaway Logistics (No 4) [2025] VSC 32 (the Manassen Case) examines complex issues surrounding freight forwarding, contractual obligations, and liability for damaged goods during international transport. The Manassen Case highlights the interplay between contractual terms contained within transport agreements, implied duties between parties, as well as key principles pertaining to contributory negligence and proportionate liability.
Factual Background
Manassen Foods Australia Pty Ltd (Manassen) purchased bottled salad dressing from a manufacturer in the United States. The shipments were arranged under an Ex Works agreement, whereby Manassen bore responsibility for arranging and paying for the transport. Seaway Logistics Pty Ltd (Seaway) was engaged as the freight forwarder and they subsequently subcontracted the freight forwarding to Intelligent SCM LLC (AWA).
Three shipments were arranged under combined transport bills of lading issued by ANL Singapore Pte Ltd (“ANL”), naming Seaway as the consignee and AWA as the shipper and forwarding agent. Unfortunately, the refrigerated containers holding the shipments were set at -10°C instead of the required +10°C, leading to spoilage of the goods. Manassen sought damages from Seaway, which in turn sought to recover from AWA.
Manassen initiated proceedings against Seaway and ANL in 2018, claiming damages for breach of contract and negligence. After an unsuccessful application for summary judgment, Seaway joined AWA as a third party, alleging that if Seaway was liable, AWA bore ultimate responsibility for the incorrect temperature settings.
Manassen and Seaway eventually reached a settlement, with Seaway agreeing to pay $328,449.60 in damages, plus interest and costs. Seaway then sought contribution from AWA, contending that AWA’s failure to ensure the correct temperature setting was the primary cause of the loss. AWA contested its liability, asserting that it had merely acted as an intermediary and was not contractually bound to Seaway.
Key Issues
- Contractual Relationship and Implied Duty of Care
The Court examined whether an implied duty of due care existed in relation to the freight forwarding arrangement. While AWA denied any contractual obligation, the Court found that AWA had assumed responsibility for ensuring the shipments were handled properly and as such, AWA had an implied duty of care. - Liability for Breach of Contract and Negligence
The Court determined that AWA’s failure to confirm the correct temperature settings constituted a breach of its duty to Seaway. Importantly, it held that a freight forwarder has an obligation to exercise reasonable care when booking shipments and ensuring accurate instructions are conveyed to carriers, particularly when handling perishable goods. - Contributory Negligence and Proportionate Liability
AWA attempted to argue that Seaway had also contributed to the loss by failing to verify the temperature settings. The Court rejected this, finding that Seaway reasonably relied on AWA to manage the process and therefore had no contribution in relation to the loss.
Judgment and Conclusion
The Court ruled in favour of Seaway, holding AWA liable for the loss and damage incurred due to the incorrect temperature settings and held that Seaway was entitled to recover the settlement amount from AWA.
This case serves as a critical precedent, reinforcing that intermediaries in the supply chain cannot avoid liability by claiming they are mere facilitators.
The case should be seen as a positive outcome for marine insurers looking to recover their losses, with further certainty being provided on who those losses may be recovered from.
Should you wish to discuss any of the above, please contact Jessica Woods on 03 9947 4516 or any member of the Ligeti Partners team on 03 9947 4500.
