A ship agent in Australia was asked by their principal to arrange for the disposal of dunnage and other materials related to the packing of cargo upon the ship’s arrival. Australia has strict local quarantine regulations. The agent’s employee engaged the services of a licensed disposal company who had previously been used to dispose of ship’s garbage and other more hazardous waste. This was not the company that the agents usually used to dispose of dunnage. The agent relayed instructions to the disposal company over the telephone without verifying the total cost.
The materials were disposed of and the disposal company sent a bill for around AU$70,000. The owners questioned the unusually high charges. The disposal company said that they had charged their usual rate for licensed waste disposal. The agent made inquiries and confirmed the amount their usual dunnage disposal company would charge to deal with dunnage and packing materials would have been approximately AU$7,000.
The owner was unwilling to pay more than the reasonable costs which should have been incurred being AU$7,000. The agent had been negligent in their selection of the disposal company and was liable for the payment of the invoiced amount.
ITIC reimbursed the agent for the balance of the invoiced amount being AU$63,000.