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THE ONUS OF PROOF IN A CARGO CLAIM ARTICLES III AND IV OF THE HAGUE-VISBY RULES AND THE UNCITRAL DRAFT

T CONVENTION The Hon Just !e Ste"en R#$es1

The H#%ue-V s&' Ru(es) H sto$' 1. In 1924 the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading formalised a set of rules, known as the Hague Rules, for carriage of goods by sea. In 196 a Protocol to Amend the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading was agreed which was designed to modernise the Rules! "ro#isions2. amended by that %rotocol are known as the &Hague-Visb Rules!. 2. In 'ustralia, the Hague()isby Rules are gi#en the force of law by their inclusion in *chedule 1 of the Carriage of !oods b "ea Act #$$# +,th-3. 3. 'rticles III and I) of the Hague()isby Rules4 e#ol#ed from the Harter Act #%$& +.*-. ,ongress "ro#ided a regime which limited the ability of shi" owners to derogate from their common law liability as common carriers. $he /ominion "arliaments of 'ustralia, 0ew 1ealand and ,anada in the first decade of the 22 ,entury enacted their own #ersions of the Harter Actth. 's more nations enacted legislation, a number of shi" owners, "articularly in the then 3ritish 4m"ire, e5"ressed concern that they would be sub6ect to different regimes for damage caused to cargo in many different countries of the world. $he Hague Rules as

1 2 : 4 th

' 6udge of the 7ederal ,ourt of 'ustralia. $he author acknowledges the research assistance "ro#ided by 8s 4lisa Ronchetti and 8r 8ichael 9ells in "re"aration of this "a"er. $he %rotocol was ado"ted in 3russels on : 7ebruary 196 and entered into force on 2: ;une 19<< $hese are called the &amended Hague Rules = unmodified te5t!. $he 'ct also includes a uni>ue modification of the Hague()isby Rules im"lemented by 'ustralia in 199 , contained in *chedule 1'. *chedule 1 to Carriage of !oods b "ea Act #$$# +,thCarriage of !oods b "ea Act #$'( +,th-, "hi))ing and "eaman Act #$'& +01- and *ater Carriage of !oods Act +R.*.,. 19 ?, c. ,(2< +re"ealed-- res"ecti#ely

(2( 4. %rofessor *turley5 e5"lained that the stimulus for the Hague Rules was because shi"owners wanted international uniformity6. 0egotiations among those in#ol#ed in the shi""ing industry and a number of go#ernments followed which had the goal of establishing uniformity in shi"owners! liability. 5. In the early 1922s a number of initiati#es were taken. 7irst, the Im"erial @o#ernment in Aondon agreed with its /ominion go#ernments to enact a uniform law based on the #oluntary set of rules drafted at $he Hague in 1921 by "artici"ants in the shi""ing industry. 8ore international conferences followed. $he most im"ortant were meetings of the ,omitB 8aritime International in Aondon in early Cctober 1922 and the International ,onference on 8aritime Aaw in 3russels later that month. Cne of the "ersons who chaired sessions was 8onsieur Aouis 7ranck. He was a member of the 3elgium ,abinet +8inister for ,olonial 'ffairs-, %resident of the ,8I, and a maritime lawyer. He chaired the 1922 3russels meetings 7. /uring the 3russels meetings, 8onsieur 7ranck saidD &$here is no intention of establishing an all(embracing code co#ering the affreightment or carriage of goods by sea. 9hat is intended is the formulation of a limited number of rules rele#ant to bills of lading E $he measures we claim to a""ly to them Fthe international rulesG are basically limitations on the right of the shi"owner to e5onerate himself from liability. $hese measures are therefore made "rimarily in the interest of the holder of the bill of lading and, conse>uently, in fa#or of those whose interest is in the cargo. If it is im"ortant to regulate these matters through an international con#ention, there are today already many countries that ha#e legislated on them. $he .nited *tates took the lead and se#eral 3ritish dominions followed suit. If others do likewise, the result will be that legislation that restricts the freedom to contract and deals s"ecifically with bills of lading will find itself with wides"read a""lication and it will be a matter of su"reme irritation that this legislation is not the same e#erywhere. 'll these measures ultimately mean a more onerous burden for shi"owning interests and certain ad#antages for cargo interests. I ha#e myself concluded that such legislation is 6ustified. In reality it comes back, "ure and sim"le, to what has always been the law concerning liability the world o#er since Roman Aaw. $he "erson who undertakes the carriage of goods is a 5
6 < *turley 87, &$he History of ,C@*' and the Hague Rules! +1991- 22 +1- ; 8ar A H ,om 1, 26(2< +1991- 22 +1- ; 8ar A H ,om 1, 2? *turley 87, +he Legislative Histor of the Carriage of !oods b "ea Act and the +ravau, Pr-)aratoires of the Hague Rules . Volume # +1992- "" 12, 42:

(:( debtor to a certain bodyI he must "ro#ide "roof that he has "aid his debt and conse>uently, deli#ered the goods on the same terms as he recei#ed them. If he deli#ers them in bad condition, he is assumed to be liable since he has not "ro"erly discharged his duty, but it behoo#es him to "ro#e that there were genuine reasons beyond his control for this. $he draft con#ention does no more than reestablish this rule E !8 6. $he travau, )r-)aratoires for the Hague Rules indicated a consciousness of the delegates that they were drafting a basis for allocating a burden of "roof on either the shi"owner or the cargo owner in certain situations9. *ir Aeslie *cott J,, then *olicitor(@eneral of @reat 3ritain, said that in 'rt I) r 1 &E we are saying that each time loss or damage occurs as a result of unseaworthiness the burden of "roof concerning the e5ercise of due diligence will fall on the carrier!. He said that the meaning of &unseaworthiness! should be the same in 'rt III r 1 and I) r 1. He also "ointed out that the list of e5ce"tions in what was to be 'rt I) r 2 came from the 4nglish law and stressed the need for a common meaning to be gi#en under the different systems of law10. 7. Cn 16 ;une 222 , at its 41 *ession, the .nited 0ations ,ommission on International $rade Aaw +.0,I$R'A- commenced the final negotiation of the te5t of the /raft Convention on Contracts for the International Carriage of !oods *holl or Partl b "ea following the a""ro#al of the te5t and title of the draft con#ention by the .0,I$R'A $hird 9orking @rou" +$rans"ort Aaw- at the conclusion of its 21 stst *ession in )ienna on 24 ;anuary 222 . $he draft con#ention was a""ro#ed earlier this month. It is "ro"osed that it will be signed in Rotterdam ne5t year and will be called &the Rotterdam Rules!11. 8. $he draft con#ention is intended to re"lace the #arious international con#entions allocating res"onsibility between carriers of goods by sea and cargo interests = the
*turley 87, +he Legislative Histor of the Carriage of !oods b "ea Act and the +ravau, Pr-)aratoires of the Hague Rules . Volume # +1992- "" :49(:?2 *ee, eg, *turley 87, +he Legislative Histor of the Carriage of !oods b "ea Act and the +ravau, Pr-)aratoires of the Hague Rules . Volume # +1992- " :<6 and generally "" :<6(:<9I see "articularly 8 7ranck at "" :<<, :<9 *turley 87, +he Legislative Histor of the Carriage of !oods b "ea Act and the +ravau, Pr-)aratoires of the Hague Rules . Volume # +1992- "" :<9 Hailey R, &4uro"ean shi""ers slam draft .0 cargo rules!, 4 ;uly 222 , Llo d0s List online, ed < ;uly 222

9 12 11

(4( Hague Rules, the Hague()isby Rules, the United 1ations Convention on the Carriage of !oods b "ea, 19< and the United 1ations Convention on International 2ultimodal +rans)ort of !oods, 19 2. 9. .0I,I$R'A!* secretary(general said that the draft had significant safeguards and "ro#isions to ensure shi""ers were not de"ri#ed of their basic rights. Howe#er, the 4uro"ean *hi""ers! ,ouncil criticised the draft con#ention as re"resenting a serious danger of a return to &E a "re(Hague Rules free(for(all! 12 to the detriment of the small and medium siKed shi""er. $hat #iew echoed the 'ustralian @o#ernment!s official "osition thatD &Ethe draft con#ention may be read as gi#ing greater weight to carrier interests rather than striking an e>uitable balance between the interests of shi""ers and carriers. 9hile some shi""ers ha#e sufficient negotiating "ower to be able to conclude fair contracts, 'ustralia!s "rimary concern is how the draft con#ention will im"act on small and medium shi""ers.!13 10. 0o doubt the world!s admiralty and maritime lawyers are looking forward to e5"loring who is right. 9ill the Rotterdam Rules, like the curate!s egg, be good in "artsL Onus o* P$oo* #n+ A$t !(es III #n+ IV o* the H#%ue-V s&' Ru(es 11. $he distinction in 'ustralian law between the onus of "roof and the order of "roof in cargo claims14 until recently had been clear following the unanimous decision of the High ,ourt in "hi))ing Cor)oration of India Ltd v !amlen Chemical Co 3A4Asia5 Pt Limited15. $hat case concerned the Hague Rules, but the High ,ourt!s reasoning is e>ually a""licable to the amended Hague +Hague()isby- Rules. $here, 8ason and 9ilson ;;, with whom, on this "oint, @ibbs and 'ickin ;; concurred 16 +and *te"hen ;

12 1:

Hailey R, &4uro"ean shi""ers slam draft .0 cargo rules!, 4 ;uly 222 , Llo d0s List online, ed < ;uly 222 .0I,$R'A +41st session, 0ew Mork, 16 ;une ( : ;uly 222 - 'N,0.9N6? ,omments recei#ed from @o#ernments and intergo#ernmental organiKations = *tates = 'ustralia = 14 '"ril 222 , &@eneral comments on the te5t as a whole!, "ar

14 1? 16

*ee $etley 9, 2arine Cargo Claims +4th ed, $homson, 222 - "" :1:(4 +19 2- 14< ,AR 142 14< ,AR at 149, 16

(?( found to the same effect17- a""ro#ed of the following statement of *amuels ;' in the 0ew *outh 9ales ,ourt of '""eal18D &$he correct se>uence of "leading is set out in +he !lendarroch19 in the 6udgment of Aord 4sher 8.R., where his Aordshi" makes it "lain that the "laintiffs must first "ro#e the contract and the non(deli#ery or the deli#ery in a damaged condition, to which the defendants may "lead an e5ce"tion, lea#ing it then to the "laintiffs to re"ly Othere are e5ce"tional circumstances, #iK. that the damage was brought about by the negligence of the defendantsP ser#ants, and it seems to me that it is for the "laintiffs to make out that second e5ce"tionQ. 'nd his Aordshi" re(em"hasiKes20 that the "ro"er se>uence of "leading must follow the burden of "roof.! 12. Recently, Ryan and /owsett ;; referred to this reasoning in CV

"hee)vaartonderneming An6ergracht v "temcor 3A4sia5 Pt Limited21. $hey noted the discussion on this to"ic by @audron, @ummow and Hayne ;; in !reat China 2etal Industries Co Ltd v 2ala sian International "hi))ing Cor)oration7 Berhad 3+he Bunga "ero8a522 who said that they #ery much doubted whether the common law rules about burden of "roof between bailor and bailee for reward a""lied to the Hague Rules and in "articular to the a""lication of 'rts III and I). 13. Ryan and /owsett ;; "ointed out that those more recent obser#ations formed no "art of the ratio decidendi of !reat China23. 3oth their Honours and I a""lied, as had the "rimary 6udge, 4mmett ;, another a""roach suggested by the decisions in !reat China24 and !amlen Chemical25 that, in order for a carrier to rely on the e5ce"tions contained in 'rt I) r 2, it must not be negligent or at fault, that is to say in breach of 'rt III r 1 or 'rt III r 2. It is well established that in order for a carrier to rely on the e5ce"tions contained in 'rt I) r 2, it must not be negligent or at fault, that is to say in breach of 'rt III r 1 or 'rt III r 226.
1< 1 19 22 21 22 2: 24 2? 26 14< ,AR at 1?: 14< ,AR at 16 F1 94G % 226 at 2:1 F1 94G % at 2:: 162 7,R :42 at :61 F??G(F?6GI F222<G 7,'7, << +199 - 196 ,AR 161 at 1<2 F21G 196 ,AR 161 196 ,AR 161 14< ,AR 142 *ee !amlen Chemical 14< ,AR at 1?2, 1?4 "er *te"hen ;, 164(16? "er 8ason and 9ilson ;;I !reat China 196 ,AR at 19: F ?G, 19?(196 F91G(F9?G, 216(219 F14:G(F146G, 24: F22 GI

(6(

14. 8ore recently, in Hilditch Pt Limited v /orval 9aiun 99 27 'llso" ; obser#ed on the result of the !reat China case. He said that there is something less than clarity in the issue of onus of "roof in cargo claims in 'ustralia because there is the "ossibility of inter"lay between 'rt III and I) of the Hague()isby Rules. He said that, in theory, this could lead to difficulties for "laintiffs in knowing "recisely what they should "lead. Is it sim"ly ade>uate in a cargo claim for the "laintiff to "lead damage to the goods, following an allegation of recei"t in good order and condition, or should a "laintiff go further and "lead breaches of 'rt III r 1 andNor r 2L 15. ,larity and uniformity are noble ob6ecti#es, "articularly for law makers. In the a""ositely named decision of Riddle v +he 9ing28, @riffith ,;, ha#ing referred to the great trouble counsel had taken in su""lying authorities to the ,ourt so as to elucidate the common law, saidD &0ow, that being the state of the law, whate#er it was +because, as I was once reminded in 4ngland by a distinguished lawyer, the law is always certain although no(one may know what it is-, the legislature E "assed the E 'ct.! I do not "retend to know what the law is any more than *ir *amuel @riffith!s interlocutor. Issues $# se+ &' A$t !(es III #n+ IV 16. 'rticle III r 1 im"oses an obligation on the carrier before and at the beginning of the #oyage to e5ercise due diligence to make the shi" seaworthy, "ro"erly man, e>ui" and su""ly it and make the holds, refrigerating and cool chambers, or other "arts of the shi" in which goods are carried, fit and safe for their rece"tion, carriage and "reser#ation. 17. $he significant feature of 'rt III r 1 is that it derogates from the common law!s re>uirement of an absolute obligation on a shi"owner to make the #essel seaworthy
see also 1 1 F?2GI An6ergracht F222<G 7,'7, <<I 162 7,R at :61 F?6G "er Ryan and /owsett ;;, and 41: F2<2G "er Rares ;I Hilditch Pt Ltd v /orval 9aiun 99 31o :5 +222<- 24? 'AR 12? at 142(14: F 2G F222<G 7,' 2214 "er Rares ; F222<G 7,' <?2I Aater, in * 9 2arble ; !ranite Pt Limited v CA"A China Limited +F222<G 7,' 1: 2 at F6G- 'llso" ; again noted that the issues of the onus of "roof and o"eration of 'rticles III and I) of the Hague()isby rules are not finally settled. +1911- 12 ,AR 622 at 629

2< 2

(<( before she sailed. $he authorities ha#e inter"reted 'rt III r 1 as re>uiring the

shi"owner to act to a relati#ely high standard, but recognise that it is to be relie#ed from situations where, for e5am"le, latent defects manifest themsel#es during the course of the #oyage. 18. 'rticle III r 2 im"oses an obligation, made sub6ect to the "ro#isions of 'rt I), on the carrier to "ro"erly and carefully load, handle, stow, carry, kee", care for and discharge the goods carried. $his is the first suggestion in 'rt IIID that there is an inter"lay between the obligations of the carrier in relation to the goods and its e5ce"tions from liability which 'rt I) "ro#ides. 19. It is im"ortant to remember that 'rt III r : re>uires the carrier to issue a bill of lading to the shi""er. $he bill of lading must contain statements of, among other things, a sufficient descri"tion of the goods as to enable them to be identified, the number of "ackages or "ieces or >uantity or weight of the goods and, critically, their a""arent order and condition. 0e5t, 'rt III r 4 "ro#ides that a bill of lading is to be "rima facie e#idence of the recei"t by the carrier of the goods in accordance with the descri"tion in the bill of lading. 'rticle III r 4 also sti"ulates that "roof to the contrary is not allowed when the bill of lading has been transferred to a third "arty acting in good faith. 20. In other words, the "rima facie e#idence "ro#ided by a clean bill of lading records recei"t of the cargo in a""arent good order and condition, and will become an absolute re"resentation by the carrier when the goods are transferred in the ordinary course of trade by deli#ery of the bill of lading to a third "arty acting in good faith. $he necessity for the "ro#ision is ob#ious. ' bill of lading is treated as a document of title to the goods. /eli#ery of a clean bill of lading, indicating that the goods are in a""arent good order and condition, enables third "arties to ac>uire ownershi" of the goods based on that re"resentation of their condition. 21. 'nd, 'rt III r effect. 22. 7urther, 'rt I) r 1 defines the e5tent of liability im"osed on a carrier where the #essel is unseaworthy. It e5ce"ts the carrier from liability unless the loss or damage "ro#ides that any attem"t to derogate from the obligations im"osed on a

carrier by 'rt III, other than as "ermitted under the Hague()isby Rules, will ha#e no

arising or resulting from unseaworthiness was caused by a want of due diligence on the "art of a carrier to com"ly with this obligation under 'rt III r 1. 'rticle I) r 1 goes on to "ro#ide that whene#er loss or damage has resulted from unseaworthiness, the burden of "ro#ing the e5ercise of due diligence shall be on the carrier or other "erson claiming e5em"tion under that article. $hat is the regime en#isaged in the 1922 conferences. 23. $he #ery terms of 'rt I) r 1 show that the >uestion of who has to show what, was clearly a li#e issue to those who drafted the original con#ention. 24. 'rticle I) r 2 "ro#ides a lengthy list of e5ce"tions to a carrier!s liability. $he rule commences by stating that neither the carrier nor the shi" is res"onsible for loss or damage arising from, among other thingsD actions, negligence or omissions of the master or crew in the na#igation or management of the shi"I fire, unless caused by the actual fault or "ri#ity of the carrierI "erils, dangers and accidents of the seaI acts of @od, acts of warI >uarantine restrictionI acts or omissions of the shi""er or owner of the goods, his agent or re"resentati#eI wastage in bulk or weight or any other loss or damage arising from inherent defect, >uality or #ice of the goodsI insufficiency of "ackagingI latent defects not disco#erable by due diligenceI any other cause arising without the actual fault or "ri#ity of the carrierD but in this case, the burden of "roof is e5"ressly "ut on the "erson claiming the benefit of the e5ce"tion to show the absence of actual fault, or "ri#ity of the carrier, or that its ser#ants or agents contributed to the loss or damage.

(9( The Ankergracht C#ses 25. In the An6ergracht29 two cargoes of steel coils, which were "articularly sensiti#e to moisture, were shi""ed from Mokohama to 'ustralia. $here is a regular shi""ing trade in such cargo and the sensiti#ity of the coils was known. In the winter months in Mokohama, the weather conditions are such that it almost always rains from time to time, and there is a real "ossibility that water will enter the holds in the time it takes for the hatches to be closed. 26. Cn out(turn in 'ustralia, a number of the coils, but not all of them, on each shi" was found to ha#e been damaged by the effects of cargo sweat. $his condition occurs during the #oyage when moisture in the form of water #a"our in the holds condenses on cooler cargo, such as steel coils. 4ach #essel #entilated its holds during the course of the #oyage in a way that accorded with good "ractice, with the following e5ce"tion. $he e5ce"tion was that the way in which the crew measured the characteristics of the air in the holds and at sea. In order to determine whether, in #entilating, water #a"our would be admitted into the holds from the air at sea, the crew used a wet bulb thermometer which was a relati#ely rough(and(ready method. 3ecause of the ine5actness of this measure, some water #a"our entered into the holds with the new air which was being admitted. $he "ur"ose of #entilation was, of course, to cause water already inside the holds, either in the form of loose water that had remained following the loading, or water #a"our in the air at the time of loading, to be e5"elled from the holds and re"laced with drier air. 27. $he trial 6udge +4mmett ;- had held that the carriers had failed to make the #essels seaworthy at the time of loading by not fitting dehumidifiers. He also held that the carriers had failed "ro"erly to care for the goods under 'rt III r 2 because, by using wet bulb thermometers to decide whether to #entilate, they allowed water #a"our to enter the holds. Cn a""eal, the ma6ority in the 7ull ,ourt o#erturned the trial 6udge!s decision on lack of due diligence to make the #essel seaworthy. $he ,ourt unanimously u"held the decision that the carriers had failed "ro"erly to care for the goods. $he ,ourt also unanimously re6ected challenges to the trial 6udge!s finding that
29 CV "hee)vaartonderneming An6ergracht v "temcor 3A4sia5 Pt Limited 162 7,R :42I F222<G 7,'7, <<

( 12 ( the carrier could not make out an e5ce"tion under 'rt I) r 2+n- that the steel was insufficiently "ackaged. 28. Ryan and /owsett ;; held that the cargo interests had to "ro#e that, at the commencement of each #oyage, the #essel was not e>ui""ed to deal with a "eril that might be encountered during the #oyage. $hey held that there was insufficient e#idence to 6ustify a finding of unseaworthiness, so that the >uestion of due diligence did not arise.30 $heir Honours said that the absence of dehumidifiers was not a failure to ha#e the #essels in a seaworthy state at the time the #oyages commenced. $hat was because the chances of corrosion occurring de"ended on the amount of water in the hold at the commencement of the #oyage, the likelihood of additional water entering during the #oyage, likely fluctuations in tem"erature and a#ailable methods and e>ui"ment for remo#ing moisture31. $hey "ointed out that 'rt III rr 1 and 2 distinguished between the duties of the carrier to e5ercise due diligence, "ro#ide a seaworthy #essel and carefully and "ro"erly to handle the cargo32. 29. $he fact that moisture might enter the hold during loading, they said, by itself could hardly make the #essel unseaworthy. Ryan and /owsett ;; said that it was necessary to consider the likely amount of water and a#ailable means for dealing with the "roblem and whether further moisture might ha#e entered the hold during the #oyage and likely climatic conditions. $hey concluded thatD &E gi#en the absence of e#idence of any "ractice of installing and using dehumidifiers, the duty to e5ercise due diligence could only ha#e re>uired such a ste" if the #essel and its crew might not otherwise ha#e been able to deal with the "roblem.!33 30. $hey further said that there was a mechanism a#ailable for remo#ing moisture from the holds, namely by wi"ing and mo""ing those items on which water was "hysically "resent. $he cargo owners had failed to "ro#e that there were sufficient other sources of moisture in the hold at the time of the commencement of the #oyage that could not ha#e been remo#ed manually.
:2 :1 :2 ::

$hus, it could not be found that the absence of

An6ergracht 162 7,R at :<2 F <GI F222<G 7,'7, << 162 7,R at :69 F 4GI F222<G 7,'7, << 162 7,R at :69 F 4GI F222<G 7,'7, << 162 7,R at :69 F ?GI F222<G 7,'7, <<

( 11 ( dehumidifiers amounted to a want of due diligence on the carriers! "art to make the #essels seaworthy. $he failure to remo#e moisture was a want of care. $he #essels could carry their cargoes safely in their then state, had the moisture been remo#ed. 31. I dissented, saying that ultimately, it was for the ,ourt to determine whether the "ractice was a sufficient reason to determine the >uestion of both the seaworthiness and the e5ercise of due diligence. I relied on the "rinci"le that the >uestion of whether a "ractice is or is not ade>uate is a >uestion of law to be determined by the courtsD Rogers v *hita6er34. *imilarly, ;udge Aearned Hand, writing for the *econd ,ircuit ,ourt of '""eals of the .nited *tates of 'merica, once made findings of unseaworthiness and a failure to e5ercise due diligence in +he +< Hoo)er v 1orthern Barge Cor)oration35. In that case, he held that the tugs were unseaworthy because they had not been e>ui""ed with radio recei#ing sets which, at the time, were gradually being introduced into common use. Sh *t n% Onuses 32. In +he =Hellenic /ol)hin036 Aloyd ; said that a cargo owner could raise a "rima facie case against a shi"owner by showing that cargo, which had been shi""ed in good order and condition, was damaged on arri#al. 0e5t, the shi"owner could meet that "rima facie case by relying on an e5ce"tion in 'rt I) r 2, for e5am"le, "erils of the sea. $he "osition in that res"ect, he said, was the same whether one acted under the Hague( )isby Rules or not. $he cargo owner, Aloyd ; went on to say, could then seek to dis"lace the e5ce"tion by "ro#ing that the #essel was unseaworthy at the commencement of a #oyage and that unseaworthiness was the cause of the loss. He said that the burden in relation to seaworthiness did not shift and that the ,ourt could draw inferences. 33. $he Hague()isby rules do not e5"licitly identify who has the onus of "ro#ing unseaworthiness. Howe#er, it falls u"on those who allege it. In Lindsa v 9lein 3+he +at8ana537, Aord *haw of /unfermline e5"lainedD
:4 :? :6 :< +1992- 1<? ,AR 4<9 at 4 < 62 7 2d <:< +,' 2 19:2- at <42 F19< G 2 Aloyd!s Re" ::6 at ::9 F1911G ', 194 at 22:

( 12 (

&8y Aords, in the 6udgments stress is re"eatedly laid u"on the fact that the onus of "ro#ing unseaworthiness is u"on those who allege it. $his is, of course, a sound doctrineI and it is none the less sound although the #essel break down or sink shortly after "utting to sea. $hat is the "rinci"le of law. 3ut the enunciation of that "ro"osition does not im"air or alter certain "resum"tions of fact, such "resum"tions, for instance, as those which arise from the age, the low classing, or non(classing, the non(sur#ey of shi" or machinery, the refusal to insure, the laying u", the admitted defects, and generally the "oor and worsening record of the #essel, together with finally the breakdown, say, of the machinery, immediately, or almost immediately, on the shi" "utting to sea. It would be a #ery curious, and, in my o"inion, an unreasonable and dangerous, thing if circumstances like these did not raise "resum"tions to which, es"ecially taken cumulati#ely, effect were not to be gi#en in ,ourts of law.! 34. In !reat China, @audron, @ummow and Hayne ;; said38D &E seaworthiness is to be assessed according to the #oyage under considerationI there is no single standard of fitness which a #essel must meet. $hus, seaworthiness is 6udged ha#ing regard to the conditions the #essel will encounterhtt"DNNthomsonn5t4NlinksNHandler.as"5L tagR1 1cfc:22ee:42<e91221da:d:be44 ?H"roductRcl. E $he #essel must be Sfit to encounter the ordinary "erils of the #oyageSI it must be Sin a fit state as to re"airs, e>ui"ment, and crew, and in all other res"ects, to encounter the ordinary "erils of the #oyage insuredS. 7urther, if the >uestion of seaworthiness is to be 6udged at the time that the #essel sails, it will be im"ortant to consider how it is loaded and stowed. If the #essel is o#erladen it may be unseaworthy. If it is loaded or stowed badly so, for e5am"le, as to make it unduly stiff or tender it may be unseaworthy. 0or is the standard of fitness unchanging. $he standard can and does rise with im"ro#ed knowledge of shi"building and na#igation. 7itness for the #oyage may also encom"ass other considerations as, for e5am"le, the fitness of the #essel to carry the "articular kind of goods or the fitness of crew, e>ui"ment and the like. $he >uestion of seaworthiness, then, may re>uire consideration of many and #aried matters.39! 35. $here is, of course, an element of commonsense that needs to be a""lied in determining the issue of due diligence and seaworthiness. ' shi"owner who "ut to sea
: :9 196 ,AR at 1<4(1<? F2<G(F:1G 's to the definition of seaworthiness see also >C Bradle ; "ons Ltd? v >ederal "team 1avigation Co +1926- 24 Al A Re" 446 at 4?4 "er *crutton A;

( 1: ( knowing that, in the ordinary way, cargoes of the kind being carried would ine#itably suffer some minor damage by way of condensation, staining or the wasting of few bags, would be unlikely to be found to ha#e failed to e5ercise due diligence 40. 0either seaworthiness or due diligence im"oses an absolute standard41. Aord /e#lin has said that lack of due diligence amounts to negligence42. 36. In 1orthern "hi))ing Co v /eutsche "eereederei !mbH 3+he 9a)itan "a6harov5 43 'uld A; e5"lained that the test in 'rt III r 1 was whether the carrier, &E its ser#ants, agents or inde"endent contractors, had e5ercised all reasonable skill and care to ensure that the #essel was seaworthy at the commencement of its #oyage, namely, reasonably fit to encounter the ordinary incidents of the #oyage!. He said the test is ob6ecti#e, namely to be measured by the standards of a reasonable shi"owner, taking into account international standards and the "articular circumstances of the "roblem in hand44. 37. 's mentioned abo#e, 'rt I) r 1 "ro#ides that, e#en if it is established that the #essel was unseaworthy at the commencement of the #oyage and the carrier failed to e5ercise due diligence to make it seaworthy at that time, no liability is im"osed unless it is shown that the unseaworthiness was a cause of the damage the cargo owner com"lains of. 38. 'rticle III r 1 also in#ol#es an obligation of the carrier to make a shi" &cargoworthy!. $his is an as"ect which has always been regarded as one of seaworthiness.45 Onus o* P$oo* #n+ C#$e o* C#$%o 39. 'rticle III r 2 of the Hague and Hague()isby Rules "ro#ides thatD

42 41

42 4: 44 4?

*ee also 'rt ? r 2 +m-, Hague RulesI 'rt 1 r : +6-, /raft ,on#ention An6ergracht F222<G 7,'7, << at F1 9G(F192G "er Rares ; a""lying 2/C Ltd v 1V @eevarrt 2aatscha))i8-=Beursstraat0 F1962G 1 Aloyd!s Re" 1 2 at 1 6 "er 8c0air ;I +he Arianna F19 <G 2 Aloyd!s Re" :<6 "er 9ebster ; citing Jerr A; in +he /erb F19 ?G 2 Aloyd!s Re" :2? at ::2I *estern Canada "teamshi) Co Ltd v Canadian Commercial cor)oration F1962G *,R 6:2 at 64: Union of India v 1V Reederi8 Amsterdam F196:G 2 Aloyd!s Re" 22: at 2:? "er Aord /e#lin. I followed this a""roach in An6ergracht F222<G 7,'7, <<I 162 7,R at 42:(424 F224G F2222G 2 Aloyd!s Re" 22? at 266 In this res"ect see also $etley 9, 2arine Cargo Claims +4th ed, $homson, 222 - at :14(:1? *ee BHP +rading Asia Pt Ltd v Aceaname "hi))ing Ltd +1996- 6< 7,R 211 at 299 "er Hill ;I !reat China 2etal 196 ,AR 161 at F::GI An6ergracht F222<G 7,'7, <<I 162 7,R at :6? F69G, :6 (9 F :G "er Ryan and /owsett ;;, and at :9:(4 F1 2G "er Rares ;

( 14 ( &*ub6ect to the "ro#isions of 'rticle I), the carrier shall "ro"erly and carefully load, handle, stow, carry, kee", care for and discharge the goods carried.! In Albacora "RL v *estcott ; Laurance Line Ltd 46 Aord Reid held that the word &"ro"erly! had a meaning slightly different from &carefully!. His Aordshi" agreed 47 with )iscount Jilmuir A, in !H Renton ; Co Ltd v Palm ra +rading Cor)oration of Panama48, that &"ro"erly! meant &in accordance with a sound system and that may mean rather more than carrying the goods carefully!. 40. $he obligation stated in this article de"ends also &u"on the kinds of conditions which it is antici"ated that the #essel will meet!. $hus, in !reat China49 @audron, @ummow and Hayne ;; statedD &$he "ro"er stowage of cargo on a lighter ferrying cargo ashore in a sheltered "ort will, no doubt, be different from the "ro"er stowage of cargo on a #essel tra#ersing the @reat 'ustralian 3ight in winter.! 41. In circumstances where goods are shi""ed in a""arent good order and condition and are either lost or discharged damaged, there is a "rima facie breach of 'rt III r 2 and, sub6ect to what is discussed below, the carrier will be considered liable unless it can "ro#e that the loss or damage was caused in a way which attracts its immunities as contem"lated under 'rt I) r 250. 42. $he onus of "roof to establish a defence under 'rt I) is on the carrier. $his onus is "ro#ided in terms under 'rt I) r 1 for a carrier to make out the immunity, as seen abo#e51. Cn the other hand, the carrier!s onus to bring the cause of damage or loss within one of the e5ce"tions listed under 'rt I) r 2 is established "ursuant to the

46 4< 4

49
?2

?1

F1966G 2 Aloyd!s Re" ?: at ? F1966G 2 Aloyd!s Re" ?: at ? F19?<G ', 149 at 166 196 ,AR at 1<? F:4G /a#ies 8 and /ickey ', "hi))ing Law +:rd ed, Aawbook ,o, 2224-, " 229 citing, inter alia, +he +1+ B,)ress F1992G 2 Aloyd!s Re" 6:6 at 642(64: +0*9*,-I see $etley 9, 2arine Cargo Claims +4th ed, $homson, 222 - at :14 where he refers to four basic "rinci"les of burden of "roofI see also 8argetson 0;, +he " stem of Liabilit of Articles III and IV of the Hague 3Visb 5 Rules +.itge#eri6 %aris, 222 - "" < and 1:4 *ee 8argetson 0;, +he " stem of Liabilit of Articles III and IV of the Hague 3Visb 5 Rules +.itge#eri6 %aris, 222 - "" < and 1:4

( 1? ( "rinci"le that &a "erson who seeks to rely on an e5ce"tion clause must bring himself or herself within it!52. 43. *taughton A; "ointed out in +he Antigoni53 that where a shi"owner seeks to rely u"on 'rt I) r 1, it will not ha#e a burden of establishing an e5ce"tion under 'rt I) r 2. 3ut, where, as in that case, the shi"owner sought to esca"e liability on the basis that there was a latent defect not disco#erable by due diligence within the e5ce"tion of 'rt I) r 2+"-D &E he will find it much easier to establish due diligence if he can "oint to the likelihood of a latent defect, and much more difficult if he can suggest none, or only one which is wholly im"lausible.! 44. 'nd there will also be cases where "art of the loss or damage may ha#e been caused concurrently, for e5am"le, by a "eril e5ce"ted under 'rt I) r 2 and a breach by the carrier of its obligations with res"ect to cargo under 'rt III r 254. In !amlen Chemical55 8ason and 9ilson ;; considered the >uestion of concurrent causes of a loss under the Hague Rules. $here, the carrier sought to esca"e liability e#en though the goods had not been "ro"erly stowed, in contra#ention of 'rt III r 2, because the #essel had encountered conditions which amounted to a "eril of the sea within the e5ce"tion in 'rt I) r 2+c-. $he trial 6udge had found that, had the goods been "ro"erly stowed, the damage would not ha#e occurred. *o ob#iously, the negligent stowage and the "erils of the sea were concurrent causes of the loss. 8ason and 9ilson ;; saidD &It seems to us that an accurate reflection of these findings re>uires one to treat the two concurrent causes of the loss as inse"arable, and therefore 6oint. $he loss would not ha#e occurred but for the faulty stowage, but on the other hand, the faulty stowage did not cause the loss by itself. Cn this #iew, and treating the matter strictly as a matter of construction of the rule, it cannot be said that the damage resulted from a "eril of the sea, and the a""ellant fails.! 45. $hus, the carrier was not able to argue that, e#en though it was in breach of 'rt III r 2, it could esca"e liability by "ro#ing the e5istence of a circumstance e5ce"ting it
?2 ?: ?4 ?? /a#ies 8 and /ickey ', "hi))ing Law +:rd ed, Aawbook ,o, 2224-, " 211 citing *taughton A; in +he Antigoni F1991G 1 Aloyd!s Re" 229 at 212 F1991G 1 Aloyd!s Re" 229 at 212 $etley 9, 2arine Cargo Claims +4th ed, $homson, 222 - at :2? 14< ,AR at 16:(164

( 16 ( under 'rt I) r 2. 8ason and 9ilson ;; said that such a construction would denude the obligation im"osed by 'rt III r 2 of much of its substance. $hey recognised that a number of the e5ce"tions in the latter rule in#ol#ed situations which were beyond the control of the carrier or his ser#ants. $hey said that any reference in that conte5t to negligence was ina""ro"riate because the e#ents e5ce"ted were, of their nature, ones which occurred inde"endently of negligence on the "art of the carrier56. 46. 8ason and 9ilson ;; saw the scheme of 'rts III and I) as im"osing certain res"onsibilities and liabilities on the carrier of goods by sea, from which it could not contract out +based on 'rts III r - but to gi#e it immunity in res"ect of loss or damage caused otherwise by negligence for which the carrier is res"onsible, e5ce"t in s"ecial cases57. $hey e5"lained58D &$o the e5tent to which 'rt. III, r 2, by using the word S"ro"erlyS im"oses on the carrier a more onerous duty than an absence of negligence then clearly to that e5tent the immunities described in 'rt. I), r 2 o"erate to >ualify the liability otherwise resting on the carrierI indeed, if this is not the case then as $em"erley "oints out in his monogra"h, ,arriage of @oods by *ea 'ct 1924, :rd ed, " 4 , "ar +>- is not an immunity at all, for it would do no more than shift the onus of "roof on to the carrier. Cn the other hand, if such a line of reasoning seeks to e5tract a greater symmetry of "ur"ose than the Rules #iewed in their entirety will admit, then the "ro"er obser#ation is sim"ly that it must not be thought that the effect of the "refatory words to 'rt. III, r 2 is to com"el some im"act on the sco"e and o"eration of the obligation im"osed by that rule from e#ery "ro#ision in 'rt. I).! 47. 't the end of the day, the >uestion of whether a carrier can rely u"on an immunity under 'rt I) r 2 must be answered by reference to all the circumstances of a "articular case59. 9here the facts disclose that a loss was caused by the concurrent causati#e effects of an e5ce"ted and non(e5ce"ted "eril, the carrier remains liable. that the loss or damage was caused by an e5ce"ted "eril alone61.
?6 ?< ? ?9 62 61 !amlen Chemical 14< ,AR at 164 *uch as 'rt I) rr 2+c-(+o-, e5ce"ting +l- where the losses were not occasioned by 6oint causes. !amlen Chemical 14< ,AR at 16? !amlen Chemical 14< ,AR at 16? "er 8ason and 9ilson ;;. 24? 'AR 12?I F222<G 7,' 2214. 24? 'AR at 14? F9:GI F222<G 7,' 2214I see also +he >iona F199:G 1 Aloyd!s Re" 2?<, 2 I +he +orenia F19 :G 2 Aloyd!s Re" 212 at 21 I $etley 9, 2arine Cargo Claims +4th ed, 222 <<?

I held

recently in Hilditch 31o :5607 that the carrier will only esca"e liability if it can "ro#e

( 1< ( 48. $he *u"reme ,ourt of the .nited *tates enunciated, in "chnell v +he Vallescura62, a "rinci"le63 which is now codified as "art of 'rt ) r < of the Hamburg Rules 64. $here, *tone ;, deli#ered the o"inion of the ,ourt and said65D &9here the state of the "roof is such as to show that the damage is due either to an e5ce"ted "eril or to the carrier!s negligent care of the cargo, it is for him to bring himself within the e5ce"tion or to show that he has not been negligent E *imilarly, the carrier must bear the entire loss where it a""ears that the in6ury to cargo is due either to sea "eril of negligent stowage, or both, and he fails to show what damage is attributable to sea "eril.! 49. *tone ; e5"lained that this result arose because of the effect of the "resum"tion 66, that where goods were deli#ered in a""arent good order and condition to the carrier but out(turned in a different condition, the carrier had the burden of showing facts relie#ing him from liability67. $hus, where the carrier cannot demonstrate what "art of any damage to cargo was attributable to a cause falling within an e5ce"tion under 'rt I), he must bear res"onsibility for the whole loss or damage. 50. 8oreo#er, if unseaworthiness is a cause of the loss and the carrier is in breach of its o#erriding obligation to e5ercise due diligence to make the shi" seaworthy as re>uired under 'rt III r 1, it cannot rely on an e5ce"tion under 'rt I)68. P$ n! ,(es o* P$oo* 51. %rofessor 9illiam $etley in 2arine Cargo Claimssuggested that in cargo claims &FfGour general "rinci"les of "roof run as unbroken threads through Hague and HagueN)isby Rules 6uris"rudence. $he first three "rinci"les are not always a""arent but ne#ertheless are "resent in e#ery cargo claim where the claimant has "ro"erly made his claim and the carrier has "ro"erly defended himself.!
62 6: 64 6? 66 6< 6 29: .* 296 at :26 Jnown as the Vallescura Rule *chedule 2 to the Carriage of !oods b "ea #$$# +,th+he Vallescura 29: .* at :26 '""licable in the common law of bailment and also by force of the analogue in the Harter Act #%$& +.*- to the Hague Rules 29: .* at :2< *ee $etley 9, 2arine Cargo Claims +4th ed, $homson, 222 - at :2? and footnote 44. $he "rinci"les in the Vallescura Rule are a""lied also in ,anada and 4ngland. $etley 9, 2arine Cargo Claims +4th ed, $homson, 222 - at :14.. $he first three "rinci"les were endorsed and a""lied by 3lais ; in the 7ederal ,ourt of ,anada in Voest-Al)ine

(1 ( 52. His first "rinci"le is that the carrier &is )rima facie liable for loss or damage to cargo recei#ed in good order and out(turned short or in bad order!. 69 His subse>uent "rinci"les areD &F$Ghe "arties are in general re>uired to make "roof of whate#er facts are a#ailable to them!70I &F$Ghe onus of "roof does not mean "ro#iding all the circumstances to the "oint of absurdity, but means making "roof to a reasonable degree!71I and &FCGnce a "arty conceals, modifies or destroys e#idence, other e#idence of that "arty is sus"ect!72. 53. $he fourth "rinci"le is a #ariation on the theme identified in Allen v +obias73 that a "erson who deliberately destroys a document which may or may not ha#e told against him or her is affected by a strong "resum"tion that if it had been "roduced, the document would ha#e told against them. /i5on ,;, 8c$iernan and 9illiams ;; a""ro#ed the statement of the %ri#y ,ouncil in +he A)helia74I &E and e#en if the document is destroyed by his own act, but under circumstances in which the intention to destroy e#idence may fairly be considered rebutted, still he has to suffer. He is in the "osition that he is without the corroboration which might ha#e been e5"ected in his case.! 54. 't the end of the day, as @audron, @ummow and Hayne ;; "ointed out in !reat China757 the >uestion of whether a carrier will be found liable is, in large "art, a factual en>uiry. $hey "osed a >uestionD &E is the carrier immune in res"ect of what otherwise would be its failure to discharge its res"onsibilities under 'rt III, because the loss or damage to the
"tahl LinC !mbH v >ederal Pacific Ltd? +1999- 1<4 7$R 69 at <4, 2editerranean "hi))ing Co "A !eneva #."i)co Inc F2222G : 7, 12? at 1?2, and most recently in "htutman v Aceane 2arine "hi))ing Inc +222?- 2 : 7$R :< $etley 9, 2arine Cargo Claims +4th ed, $homson, 222 - at :1? $etley 9, 2arine Cargo Claims +4th ed, $homson, 222 - at :2 $etley 9, 2arine Cargo Claims +4th ed, $homson, 222 - at :41 $etley 9, 2arine Cargo Claims +4th ed, $homson, 222 - at :4:I see too Allen v +obias +19? - 9 ,AR :6< at :<? "er /i5on ,;, 8c$iernan and 9illiams ;; a""lying +he A)helia F1916G 2 ', 226 at 229(2:2 9 ,AR :6< at :<? F1916G 2 ', at 229(2:2 196 ,AR at 1 2(1 1 F49G

69 <2 <1 <2 <: <4 <?

( 19 ( goods arose or resulted from a cause which brings the carrier within the immunity conferred by 'rt I) r 2L! O$+e$ o* P$oo* 55. 's stated at the beginning of this "a"er, the order of "roof is the se>uence in which the facts or allegations are to be "ro#en by one "arty or the other to the suit during the trial76. 56. $he Hague()isby Rules, in terms, do not set out any "recise order of "roof in a marine cargo claim or its defence77. $he order of "roof has been described as &the "ing("ong game of burden(shifting!78. 4#en so, as noted abo#e, the ma6ority of the High ,ourt in !amlen Chemical79 a""ro#ed the &traditional order of "roof!80. $hat order of "roof is also followed in the .nited *tates and .nited JingdomD81 (1) $he shi""er +or the claimant- must "ro#e the contract of carriage, that the goods were shi""ed in a""arent good order and condition and were missing or deli#ered damaged on arri#alI this "oses a "rima facie case of the carrier!s breach of 'rt III r 2I (2) $he onus then shifts to the carrier to rebut the shi""er!s "rima facie case by establishing that the damage or loss to cargo was caused by one of the e5ce"tions listed under 'rt I) r 2I (3) If the carrier succeeds in establishing one of the e5ce"tions, the onus shifts back to the shi""er who may dis"lace the carrier!s defence under 'rt I) r 2 byD +a<6

"ro#ing that the carrier effecti#ely breached 'rt III r 2 by failing to

77
< <9 2 1

$etley 9, 2arine Cargo Claims +4th ed, $homson, 222 - at :14 3lais ; in Voest-Al)ine "tahl LinC !mbH #. >ederal Pacific Ltd? +1999- 1<4 7$R 69 at F2?G citing $etley 9, 2arine Cargo Claims +:rd ed, 3lais, 19 - " 142I see also $etley 9, 2arine Cargo Claims +4th ed, $homson, 222 - at :?1 to :?6 1itram Inc v 2V Cretan Life ?99 72d 1:?9 +,'? 19<9- at 1:<: 14< ,AR 142 *ee /a#ies 8 and /ickey ', "hi))ing Law +:rd ed, Aawbook ,o, 2224- " 212 *ee /a#ies 8 and /ickey ', "hi))ing Law +:rd ed, Aawbook ,o, 2224- " 212 citing, inter alia, U" v Acean Bul6 "hi)s Inc 24 7 :d ::1 +,' ? 2221- at ::6 and +he !lendarroch F1 94G % 226 at 2:1I see also 8argetson 0;, +he " stem of Liabilit of Articles III and IV of the Hague 3Visb 5 Rules +.itge#eri6 %aris, 222 - "" <, 1:4 and 1 2(1

( 22 ( &"ro"erly and carefully load, handle, stow, carry, kee", care for and discharge the goods carried!I or +b"ro#ing that the shi" was unseaworthy at the beginning of the #oyage and that that was the cause of the damage or loss82. (4) In the first case, the shi""er succeeds in "ro#ing the carrier!s breach of 'rt III r 2. In the second case, the onus shifts to the carrier who must "ro#e that the unseaworthiness of the shi" was not caused by its lack of due diligence83. The Great China !#se 57. $he obiter comments made by @audron, @ummow and Hayne ;; in !reat China84 suggest for 'ustralian law a different "osition from the traditional common law a""lication of the onus and order of "roof. $he case concerned damage to a cargo of aluminium coils carried on the 8N) Bunga "ero8a during a #oyage from *ydney to $aiwan. 'fter loading the coils the #essel sailed first to 8elbourne. 58. 3efore leaving Melbourne on the run to Burnie in Western Australia, the master received a weather bulletin containing a gale warning for oceans south of the Australian continent. The master knew that the Great Australian Bight was renowned for severe weather and planned for the worst possible weather conditions. The vessel encountered heavy weather and itself sustained some structural damage during the storms. 59. 's McHugh J pointed out, the immediate cause of the damage to the cargo was the pounding which the carriers vessel suffered as a result of very heavy weather which it encountered. For that reason, and because there was no negligence or breach of the Hague Rules on the part of the carrier, the trial judge and the New South Wales Court of Appeal had held that the damage arose, or resulted, from the perils of the sea85. The High Court dismissed the appeal. Almost everything said relevant to the question of onus of proof was obiter.
2 : 4 ? 'rts III r 1 and I) r 1, Hague()isby Rules /a#ies 8 and /ickey ', "hi))ing Law +:rd ed, Aawbook ,o, 2224- " 212 196 ,AR at 1<2 F22G(F2:G *ee 196 ,AR at 1 4 F6:G "er 8cHugh ;

( 21 ( 60. 8cHugh J said that the cargo owners failed to prove any breach of Art III r 2 so that the applicability of the defence of perils of the sea did not arise 86. He said that a contract for carriage under the Hague Rules did not contain any implied obligation for the carrier to deliver the goods in the state in which it received them. He adverted to Professor Sturleys observation that the new rules were designed to create a selfcontained code, at least in the areas which they covered, that would not require reference to domestic law87. 61. McHugh J noted that the delivery of the goods in a damaged state was evidence of breach of Art III. This factor imposed an evidentiary burden on the carrier to show that no breach of Art III had occurred88. He continued89: &E 3ut unlike the common law, failure to deli#er the goods in the state recei#ed does not cast a legal onus on the carrier to "ro#e that the state of, or non(deli#ery of the goods, was not due to the carrierPs fault. Cnce Fthe "rimary ;udgeG found that there was no breach of the carrierPs obligations in this case, the immunities conferred by 'rt I), r 2 became irrele#ant.! 62. Jirby ; suggested that the traditional analysis of onus of "roof would a""ly, following what had been said in !amlen Chemical90, as did ,allinan ;91. @audron, @ummow and Hayne ;; said that nothing in the case turned on the allocation of the burden of "roof92. 63. $he obiter #iew of @audron, @ummow and Hayne ;;, was that "roof of damage to cargo while it was in the carrier!s "ossession would constitute some e#idence of a breach of 'rt III r 2. 3ut that fact would not cast any onus on the carrier to show that the damage +or loss- was caused by any of the circumstances affording the immunities

6 < 9 92 91 92

!reat China 196 ,AR at 19< F9<G *turley 87, +he Legislative Histor of the Carriage of !oods b "ea Act and the +ravau, Pr-)aratoires of the Hague Rules = Volume # +1992- at " 9 !reat China 196 ,AR at 19< F9 G 196 ,AR at 19<(19 !reat China 196 ,AR at 222(22: F1??G(F1?6G 196 ,AR at 24:(244 F229G !reat China 196 ,AR at 1 2 F?4G

( 22 ( listed under 'rt I) r 2. $he carrier would merely ha#e to "ro#e that it e5ercised the obligations re>uired under 'rt III of due diligence and care for the goods93. 64. $he authors of "hi))ing Law +/a#ies H /ickey-94, described those #iews of @audron, @ummow and Hayne ;; as &radical! so far as they sought to de"art from the onus and order of "roof identified in !amlen Chemical95. $heir construction has attracted significant criticism as being inconsistent with the established order and onus of "roof under the Hague()isby Rules in 'ustralia and o#erseas96. %rofessor $etley "osited that the "ractical effect "ro"ounded by the construction of @audron, @ummow and Hayne ;; would be to relie#e the carrier of liability in cases where the cause of the loss was unidentified or uncertain and the carrier had "ro#ed due diligence generallyD ie the carrier would not ha#e to "ro#e how the cargo came to harm and that it had e5ercised due diligence to make the #essel cargoworthy in res"ect of that harm.97 65. 8oreo#er, their #iews are not reflected in the travau, )r-)aratories for the Hague Rules. $he "ur"ose of listing the #arious e5em"tions in 'rt I) r 2 was to ensure that the common law conce"t of e5clusion of liability was incor"orated into the Rules. 66. $he debate at 3russels in Cctober 1922 included an e5change between the 0orwegian *ecretary(@eneral of its 8inistry of ;ustice, 8r 'lten, *ir Aeslie *cott and 8onsieur 7ranck. 8r 'lten "ointed out that under the ,ontinental system of law, the liability of a carrier was in "rinci"le an &e, cul)a0 liability and conse>uently the list of e5ce"tions in the "ro"osed 'rt I) r 2+b-(+"- seemed to him to be redundant 98. $he answer to that contention was com"elling in the following e5change between %rofessor 3erlingieri and 8onsieur 7ranck, as chairmanD &$he ,hairman +8onsieur 7ranck- ( E 9e cannot create a con#ention if we cannot find a formula that co#ers both instances. If, from the #antage "oint of our own law, it is sufficient for the ca"tain to be e5onerated in all cases of force
9: 94 9? 96 9< 9 *ee $etley 9, 2arine Cargo Claims +4th ed, $homson, 222 - :21(2I and /a#ies and /ickey, "hi))ing Law +:rd ed- "" 212(21: /a#ies 8 and /ickey ', "hi))ing Law +:rd ed, Aawbook ,o, 2224- "" 212(214 14< ,AR 142 and its a""lication of the !lendarroch F1 94G % 226 *ee for e5am"le /a#ies 8, O'ustralian 8aritime Aaw /ecisions 199 D @reat ,hina 8etal Industries ,o Atd # 8alaysian International *hi""ing 3hd ,or" +$he 3unga *ero6a-Q F1999G A8,AT 42 $etley 9, 2arine Cargo Claims +4th ed, $homson, 222 - at :21(2 *turley 87, +he Legislative Histor of the Carriage of !oods b "ea Act and the +ravau, Pr-)aratoires of the Hague Rules = Volume # +1992- at "" :<6(:<<

( 2: ( ma6eure or unforeseeable circumstances, t s not su** ! ent un+e$ An%(o-S#-on (#.. /e 0ust !onse1uent(' !$e#te # *o$0u(# th#t h#s # !o00on 0e#n n%2! 8r 3erlingieri99 = 9e could not "ut a formula such as that in the Italian ,ode $he ,hairman = $he solution will be e5tremely sim"le in "ractice. Mou will not ha#e to introduce the formula into your ,ode but you will ha#e to translate the clause honestly into your law E.!100 +em"hasis added.67. It is clear that the rules, at least as they were drafted in 1922, were concei#ed as being workable. $hey were not in the same category as the Aloyd!s *@ "olicy which is a schedule to the 2arine Insurance Act #$'$ +,th-. $hat "olicy was once described101D &E as a strange, #ery "eculiar, absurd, incoherent, clumsy, im"erfect, obscure, incom"rehensible, tortuous, document drawn u" with much la5ity, by a lunatic with a #ery "ri#ate sense of humour, in a form which is "ast "raying for.! 68. $he "ractical effect of the a""roach of @audron, @ummow and Hayne ;; in !reat China102 may be that, in circumstances where the cause of loss or damage is unidentified or uncertain, the carrier may esca"e liability sim"ly by demonstrating that due diligence and reasonable care were e5ercised, without ha#ing to "ro#e how the cargo became damaged or lost. $he travau, )r-)aratories suggest that the carrier should "ro#e which s"ecific e5ce"tion in 'rt I) caused the loss or damage. $his is also the #iew of the authors of Bills of LadingD Law and Contracts103, ;ohn 7 9ilson, Carriage of !oods b "ea104, and Carver on Bills of Lading105. 69. In the An6ergracht106, the carrier failed to "ro#e that there was any deficiency in the "ackaging of the steel coils. $he ,ourt a""lied the reasoning of the 4nglish ,ourt of '""eal in "ilver v Acean "teamshi) Com)an Ltd107? Ryan and /owsett ;; said that
99 122 121 122 12: 124 12? 126 12< 'd#ocate, %rofessor of 8aritime Aaw at the .ni#ersity of @eno#a, the Italian re"resentati#e *ee *turley 87, $he Aegislati#e History of the ,arriage of @oods by *ea 'ct and the $ra#au5 %rB"aratoires of the Hague Rules = )olume 1 +1992- at " :<<I see too #ol 2 at 426(42<, 419 and see %rofessor 3erlingieri!s re"ort in )ol 2 at ?12 C!8ay /, 2arine InsuranceD Law and Polic +199:, *weet H 8a5well- at " I see the re#iew in 112 ATR at 494(49? 196 ,AR 161 @askell 0, 'sariotis R and 3aatK M +AA% 2222- "" 2 2(2 : F .6 G +2224 Aongman- at "" 2<2(2<1 +2221 *weet H 8a5well, 1st ed- at " ?16 F9(229G F222<G 7,'7, <<I 162 7,R :42 F19:2G 1 J3 416

( 24 ( the carriers bore the ultimate onus of "roof on the issue 108. "ilver109 is also an authority for the "ro"osition that, by issuing clean bills of lading stating that goods had been shi""ed on board &in a""arent good order and condition!, the carrier is "recluded from asserting that they were insufficiently "acked. If the insufficiency of "ackaging is ob#ious, the cargo cannot be described as ha#ing been recei#ed in &a""arent good order and condition!110 but if the bills are so claused, then the carrier is bound by the words it used. Re!ent De"e(o,0ents) The D$#*t Con"ent on 70. $he draft con#ention in the new 'rts 14 to 19 significantly alters the regime in 'rts III and I) of the Hague()isby Rules. $he new "ro#isions reflect many conce"ts in the Hague()isby Rules. 'rticle 1 deals with the carrier!s liability and which "arty bears the onus of "roof on #arious issues. 't first blush, 'rt 1 of the "ro"osed Rotterdam Rules breathes new #itality into the a"horism that &a camel is a horse designed by a committee!. $here is much to be said for the 'ustralian @o#ernment!s general obser#ation about the whole draft con#ention111D P'ustralia is of the o"inion that the current te5t is so different from current international law and so com"licated that the "otential for lengthy and costly litigation is high. 's this litigation will be domestic, there remains the "otential for the uniformity of the international law to be undermined by ha#ing "ro#isions inter"reted differently in different countries.P

71.

/raft 'rt 1 "ro#ides the following ste"sD (1) Initially the claimant must "ro#e that loss, damage or delay, or the e#ent or circumstance that caused or contributed to the loss, damage or delay took "lace during the "eriod of the carrier!s res"onsibility +draft 'rt 1 rule 1-112I

12 129 112 111 112

An6ergracht F222<G 7,'7, <<I 162 7,R at :< (9 F11<G F19:2G 1 J3 416 An6ergracht F222<G 7,'7, <<I 162 7,R at 41? F2 2G "er Rares ;I "ilver F19:2G 1 J3 at 426(42< "er *crutton A;, 4:4 "er @reer A;, 441 "er *lesser A; 'ustralian comments "ar < *ee 8argetson 0;, +he " stem of Liabilit of Articles III and IV of the Hague 3Visb 5 Rules +.itge#eri6 %aris, 222 - " 16:

( 2? ( (2) 0e5t, draft 'rt 1 r 2 relie#es the carrier of liability if it "ro#es that the +or a- cause of the loss, damage or delay was not its fault or that of any ser#ant or agent, including the master, crew and any &"erforming "arty! +defined in draft 'rt 1 r 6-. (3) $he carrier can also "ro#e that it is entitled to e5em"tion under draft 'rt 1 r : by establishing that the loss, damage or delay was caused or 3ut, unlike the latter, draft 'rt 1 "ar : contributed to by one or more of similar e5ce"tions to those in 'rt I) r 2 of the Hague()isby Rules. e5"ressly "ro#ides that the carrier bears the onus of "ro#ing that one of the circumstances s"ecified, caused or contributed to the loss, damage or delay. 0otably, draft 'rt 1 r : omits the &nautical fault e5ce"tion!. $hat relie#ed the carrier of res"onsibility where the damage was caused by the actions of master, mariner, "ilot or ser#ants of the carrier in the na#igation or management of the shi". Instead, the carrier is now to be liable for the acts and omissions of the master or crew, any "erforming "arty, em"loyees or agents of the "erforming "arty or any other "erson that "erforms or undertakes to "erform the carrier!s obligations under the contract of carriage at the carrier!s re>uest, or under the carrier!s su"er#ision or control. (4) /raft 'rt 1 r 4 is curious. It "ro#ides that, des"ite the carrier establishing the a""licability of an e5em"tion under r :, it will still be liable for all or "art of the loss, etc, if the claimant "ro#es that the carrier +or a "erson for whom it is res"onsible- caused or contributed to the e#ent or circumstance on which the carrier reliesD ie although the carrier has "ro#ed it is not at fault under r :, the claimant can "ro#e that it is at fault under r 4+a-U %erha"s, some things are better left unsaid. 'lso, under r 4+b- the claimant can defeat a carrier!s e5em"tion under r :, if it "ro#es that an e#ent or circumstance not listed in r : contributed to the loss, damage or delay, and if the carrier cannot "ro#e absence of fault on its "art for this new e#ent or circumstance.

( 26 ( (5) $his 3yKantine "ing "ong match continues with draft 'rt 1 r ?. If the carrier succeeds in establishing one of the e5ce"tions under 'rt 1 r :, the onus shifts back to the claimant to dis"lace the carrier!s defence by "ro#ing that the loss, damage or delay was, or was "robably caused by or contributed to by the unseaworthiness of the shi", the im"ro"er crewing, e>ui""ing and su""lying of the shi", or that the holds were not fit and safe for the rece"tion, carriage and "reser#ation of the goods +draft 'rt 1 r ? +a--. .nlike the Hague()isby Rules, the draft con#ention e5"licitly "uts the onus of "ro#ing unseaworthiness etc on the cargo claimant113. (6) If unseaworthiness etc is "ro#ed, the onus shifts once again to the carrier. 0ow, draft 'rt 1 r ?+b- "ro#ides that the carrier will be liable unless it "ro#es thatD i) unseaworthiness, im"ro"er crewing, e>ui""ing and su""lying of the shi" or the state of the holds did not cause the loss, damage or delayI or ii) it com"lied with its obligation to e5ercise due diligence 114 by ensuring the shi" was "ro"erly e>ui""ed and su""lied and by 6ee)ing the shi" so crewed, e>ui""ed and su""lied throughout the #oyage as well as making and 6ee)ing the shi" seaworthy and making and 6ee)ing the holds and all other "arts of the shi" in which the goods are carried fit for their rece"tion, carriage and "reser#ation115. 72. /raft 'rt 1? e5tends the conce"t of seaworthiness, and hence the obligation of due diligence by re>uiring the carrier to kee" the #essel seaworthy and cargoworthy during the #oyage. 73. /raft 'rt 1 r ? reformulates the conce"ts in 'rt I) r 1 of the Hague()isby Rules. 4ach 'rticle deals with the liability of the carrier where the damage arises or results from the unseaworthiness of the #essel. 4ach re>uires the carrier to "ro#e that it
11: 114 11? 'rticle 1 r ?, /raft ,on#ention /raft 'rticle 1 "aragra"h ? +b/raft 'rticle 1?

( 2< ( e5ercised due diligence or that the damage was not caused by the unseaworthiness of the #essel etc. Howe#er, draft 'rt 1 r ? re>uires the claimant to "ro#e that unseaworthiness etc caused or contributed to the loss or damage. 74. 'rticle I) r 1 is framed as a negati#e "ro"osition = the carrier is not liable e5ce"t in the circumstances s"ecifiedD
&0either the carrier nor the shi" shall be liable for the loss or damage arising or resulting from unseaworthiness unless caused by want of due diligence on the carrier to make the shi" seaworthyE!

75.

$he carrier could e5clude its liability if the shi" were unseaworthy etc, and it had e5ercised due diligence at the commencement of the #oyage. 'nd, as e5"lained abo#e, unseaworthiness and uncargoworthiness can be "resumed >uite readily where the facts 6ustify the drawing of an inferenceD see +he +at8ana116.

76.

Howe#er, draft 'rt 1 r ? in#erts this "osition. It is framed in the "ositi#e = the claimant must "ro#e that the carrier is liable. $he article "ro#idesD
&$he carrier is also liable E for all or "art of the loss, damage, or delay ifD +a- $he claimant "ro#es that the loss, damage, or delay was or was "robably caused by or contributed to by +i- the unseaworthiness of the shi"E!

77.

's the 'ustralian @o#ernment commented to .0,I$R'A, this may effect an alteration in the burden of "roof. It noted that, once the claimant establishes a loss, the e5isting rules "lace the burden of "roof as to the cause of loss on the carrier effecti#ely. It obser#ed117D &$his is based on the carrier being in a better "osition than the shi""er to know what ha""ened while the goods were in the carrier!s custody. If there were more than one cause of loss or damage, then under those regimes the carrier had the onus of "ro#ing to what e5tent a "ro"ortion of the loss was due to a "articular cause. $he current te5t changes this and "uts "art of the onus of "roof on the shi""er... ::. 'ustralia argues that the shi""er +i.e. the claimant in this case- would ha#e difficulty "ro#ing unseaworthiness, im"ro"er crewing, e>ui""ing or su""lying, or that the holds were not fit for the "ur"ose of carrying goods. $his change to the

116 11<

F1911G ', at 22: "er Aord *haw 'ustralia!s ,omments "ars :2 and ::

(2 ( general rule on allocation of liability is e5"ected to affect a significant number of cargo claims and shi""ers will be disad#antaged in cases where there is more than one cause of the loss or damage and a contributing cause was the negligently caused unseaworthiness of the #essel. In such cases, the shi""er will bear the onus of "ro#ing to what e5tent unseaworthiness contributed to the loss.!

78.

*ome of the carrier!s obligations under the amended Hague Rules ha#e been carried o#er in reasonably familiar terms in the draft con#ention. /raft 'rt 14 r 1 restates 'rt III r 2 of the amended Hague Rules as followsD
&$he carrier shall during the "eriod of its res"onsibility as defined in article 12, and sub6ect to article 2<, "ro"erly and carefully recei#e, load, handle, stow, carry, kee" and care for, unload and deli#er the goods.!118

79.

8eanwhile draft 'rt 1? broadens significantly 'rt III r 1 of the amended Hague Rules. $he carrier!s obligation of due diligence has been e5"anded to include a continuing obligation, a change 'ustralia welcomed119. .nder draft 'rt 1? r 1, the carrier must make and 6ee) the shi" seaworthy, 6ee) the shi" "ro"erly crewed, e>ui""ed and su""lied throughout the #oyage, and make and 6ee) the holds and all other "arts of the shi" fit and safe not only before and at the beginning of the #oyage but also during the #oyage. /raft 'rt 1? "ro#idesD
&$he carrier is bound before, at the beginning of, and during the vo age by sea to e5ercise due diligence to =

(a) 8ake and 6ee) the shi" seaworthyI (b) %ro"erly crew, e>ui" and su""ly the shi" and 6ee) the shi" so crewed, e>ui""ed
and su""lied throughout the #oyageI and

(c) 8ake and 6ee) the holds and all other "arts of the shi" in which the goods are
carried, including any containers su""lied by the carrier in or u"on which the goods are carried, fit and safe for their rece"tion, carriage and "reser#ation.! 120
11 ,om"are 'rticle III r 2 of the Hague )isby Rules which "ro#idesD &*ub6ect to the "ro#isions of 'rticle 4, the carrier shall "ro"erly and carefully load, handle, stow, carry, kee", care for, and discharge the goods carried.! 119 122 'ustralia!s comments "ar 2< ,om"are 'rticle III r 1D &$he carrier shall be bound before and at the beginning of the #oyage to e5ercise due diligence to( +a- 8ake the shi" seaworthy. +b- %ro"erly man, e>ui" and su""ly the shi"

( 29 (
+my em"hasis-

80.

$he draft con#ention also differs from the amended Hague Rules in the following res"ectsD +1/raft 'rt 19 "ro#idesD
&$he carrier is liable for the breach of its obligations under this ,on#ention caused by the acts or omissions ofD (a) 'ny "erforming "artyI (b) $he master and crew of the shi"I (c) 4m"loyees or agents of the carrier or a "erforming "artyI or (d) 'ny other "erson that "erforms or undertakes to "erform any of the carrier!s obligations under the contract of carriage, to the e5tent that the "erson acts, either directly or indirectly, at the carrier!s re>uest or under the carrier!s su"er#ision or control.!

8eanwhile, the e5ce"tion in 'rt I) r 2+>-, which a""lies where the damage arises without the fault or "ri#ity of the carrier, has been made a distinct e5ce"tion under draft 'rt 1 r 2. $his contains the further element that the carrier will be relie#ed of all or "art of its liability where it "ro#es that the cause or one of the causes of the loss was not attributable to its fault. (2) /raft 'rt 1 rr 2, : and 6 affect the "osition under the amended Hague Rules relating to carriers! liability in circumstances in#ol#ing concurrent causes. 'rticle 1 rr 2 and : relie#e the carrier of all or "art of its liability if it "ro#es either that the cause, or one of the causes of the loss was not attributable to its fault121, or that one or more of the sti"ulated e#ents or circumstances caused or contributed to the loss, damage or delay122. $his re#erses the inter"retation in !amben Chemical123 and Hilditch 31o :5124

(a) 8ake the holds, refrigerating and cool chambers, and all other "arts of the shi" in which
goods are carried, fit and safe for their rece"tion, carriage and "reser#ation.! 121 122 12: 124 'rticle 1 r 2, /raft ,on#ention 'rticle 1 r :, /raft ,on#ention 14< ,AR at 16? 24? 'AR at 14? F9:G

( :2 ( that the carrier was liable if there were concurrent causes but it only established one e5ce"tion. 'rticle 1 r 6 "ro#idesD
&9hen the carrier is relie#ed of "art of its liability "ursuant to this article, the carrier is liable only for that "art of the loss, damage or delay that is attributable to the e#ent or circumstance for which it is liable "ursuant to this article.!

(3)

/raft 'rt 1 r : re#erses the "osition stated by *taughton A; in +he Antigoni125 that a shi"owner who seeks to rely u"on 'rt I) r 1 of the amended Hague Rules need not establish an e5ce"tion under 'rt I) r 2.

Con!(us on 81. Aike @riffith ,;, I can say the law on the >uestion of this "a"er is certain, e#en if I do not know what it is at "resent, let alone what it may soon become126.

12?

126

F1991G 1 Aloyd!s Re" at 212 '""ended is +I- a summary "re"ared by 4lisa Ronchetti and 8ichael 9ells of some recent cases from other common law 6urisdictions which ha#e considered the onus of "roof and #arying burdens of "roof in cargo claimsI and +II- an e5tract from the draft con#ention including draft 'rts 1 and 19

( :1 ( APPENDI3 I

Re!ent O"e$se#s C#ses USA Atlantic 2ut? Ins? Co?7 Inc? v? C"E Lines7 L?L?C?7 4:2 7.:d 42 +,' 2D 222?-

$he circumstances of the case in#ol#ed damage to a cargo of "hos"horic acid solution which occurred on board the shi" C"E B,)edition? $he ,ourt held at 4:: thatD &$o reco#er against a carrier for damage to goods shi""ed "ursuant to a bill of lading go#erned by ,C@*', a "laintiff S Pbears the initial burden of "ro#ing both deli#ery of goods to the carrier ... in good condition, and outturn by the carrier ... in damaged condition.P S$ransatlantic 8arine ,laims 'gency, Inc. #. 8N) CC,A Ins"iration, 1:< 7.:d 94, 9 +2d ,ir.199 - +>uoting Vana +rading Co? v? "?"? F2ette "6ou,S ??6 7.2d 122, 124 +2d ,ir.19<<--. 9e ha#e held that Sthe issuance of a clean bill of lading creates a "resum"tion of deli#ery in good condition fa#orable to the "laintiff.S $ransatlantic 8arine ,laims 'gency, 1:< 7.:d at 9 . 9e ha#e also stressed that the S"laintiff has the burden, which remains with it throughout the case, of "ro#ing that Pthe goods were damaged while in the carrierPs custody.PS Caemint >ood7 Inc? v? Brasileiro, 64< 7.2d :4<, :?1( ?2 +2d ,ir.19 1- +>uoting Pan-American Hide Co? v? 1i))on Gusen 39abushi6i5 9aisha , 1: 7.2d <1, <1 +*./.0.M.1921- +A.Hand, ;.--. It is only once the "laintiff establishes a "rima facie case that the burden shifts to the defendant to "ro#e that one of the statutory ,C@*' e5ce"tions to liability a""lies. *ee 46 ..*.,.a"". V 1:24+2-.

"teel Coils7 Inc? v? 24V La6e 2arion, ::1 7.:d 422 +,' ?D 222:-.

$he case concerned a ,arriage of @oods by *ea 'ct 127 claim for rust damage to steel coils which the owner alleged was caused by seawater when shi""ed from Aat#ia to the .nited *tates on the 8N) La6e 2arion? Rele#antly the ,ourt affirmed at FI)G thatD &,C@*' "ro#ides a com"le5 burden(shifting "rocedure. Initially, the "laintiff must establish a "rima facie case by demonstrating that the cargo was loaded in an undamaged condition and discharged in a damaged condition F+ubace,7 Inc? v? 24V Risan 4? 7.:d 9?1, 9?4 +? ,ir. 199?-.G S7or the "ur"ose of determining the condition of the goods at the time of recei"t by the carrier, the bill of lading ser#es
12<
46 ..*.,. a"". 1:22

( :2 ( as "rima facie e#idence that the goods were loaded in the condition therein described.Q FIdG If the "laintiff "resents a "rima facie case, the burden shifts to the defendants to "ro#e that they e5ercised due diligence to "re#ent the damage or that the damage was caused by one of the e5ce"tions set forth in 1:24+2- of ,C@*', including SF"Gerils, dangers, and accidents of the sea or other na#igable watersQ and OFlGatent defects not disco#erable by due diligence.Q F46 ..*.,. a"". 1:24 +2-G If the defendants show that the loss was caused by one of these e5ce"tions, the burden returns to the shi""er to establish that the defendantsP negligence contributed to the damage. F+ubace,7 Inc? v? 24V Risan 4? 7.:d at 9?4G 7inally, Oif the shi""er is able to establish that the FdefendantsPG negligence was a contributory cause of the damage, the burden switches back to the FdefendantsG to segregate the "ortion of the damage due to the e5ce"ted cause from that "ortion resulting from the carrierPs own negligence.Q F +ubace,7 Inc? v? 24V Risan 4? 7.:d at 9?4G.! C#n#+# "amuel7 "on ; Co? Ltd? v? Lithuanian "hi))ing Co. 2222 7,$ 121 +;an. 29, 2222$he case concerned a maritime cargo claim for damage to a cargo of cold rolled gal#aniKed steel coils, go#erned by the Hague-Visb Rules incor"orated in the Carriage of !oods b *ater Act? $he action was heard at the same time as that in 1ova "teel Ltd? v? F9a)itonas !udinF 3+he5, 2222 ,arswell0at 219 +7ed. $./.- and in#ol#ed damage to a shi"ment of hot rolled steel coils. 3oth shi"ments were carried from the Aat#ian "orts of )ents"ils and Riga to 8ontreal in ;anuary and 7ebruary 199? onboard the #essel SCa)tain !udinS. Reasons for 6udgment were released concurrently in both actions. Aemieu5 ; noted at F?9G thatD &the "laintiff, under the case law +see 9ruger Inc? v? Baltic "hi))ing Co. +19 <-, F19 G 1 7.,. 262 +7ed. $./.- and >rancosteel Cor)? v? >ednav Ltd? +1992-, :< 7.$.R. 1 4 +7ed. $./.-- had the initial burden to demonstrate the goods were tendered for deli#ery in good condition. ' clean bill of lading is generally acce"ted as establishing "rima facie "roof of this. In this case, the bill of lading was claused SRust stained. 9et before shi"mentS. In >rancosteel Cor)., su"ra, ;ustice Rouleau stated the ,ourt may consider all e#idence tendered as to the "re(shi"ment condition of the goods. He went on to say a clean bill of lading, in some circumstances, has been held to be insufficient to establish a "rima facie case where goods are shi""ed in "ackages "re#enting any obser#ation of the "re(shi"ment condition of the goods.!

( :: ( In a""lying Rouleau ;!s reasoning in >rancosteel Cor)? +1992-, :< 7.$.R. 1 4, Aemieu5 ; held that the "laintiff had not discharged his initial burden of establishing )rima facie that the cargo was tendered to the #essel in good condition. 0otwithstanding this howe#er, the ;udge held at F62G thatD
&$he

"laintiffPs action does not sto" because it has not established "rima facie the good condition of the cargo on deli#ery to the carrier. $he "laintiff may succeed in establishing the ,a"tain @udinPs negligence or unseaworthiness was the "ro5imate cause of the damage sustained.! 9ith regard to the issue of concurrent causes, the ;udge held that the defendant was entirely res"onsible for the damage caused to the cargo as it had made no "roof to se"arate damage. 0otably, his Aordshi" said at F<4G(F<?GD 9illiam $etley, in 8arine ,argo ,laims F: ed 19 G, at "age :2 , writesD

9here the damage is caused in "art by an act or fault for which the carrier is res"onsible and in "art by an act or fault for which the carrier is not res"onsible, the carrier must be able to make "roof sufficient to se"arate the damage resulting from one cause from the damage resulting from the other, or in the alternati#e be held res"onsible for the whole claim. F$his is known as the )allescura Rule.G %rofessor $etley >uotes from HobhousePs ;. in S +oreniaS +$he- F19 :G 2 AloydPs Re". 212 +4ng. T.3.-, at 21 as followsD 9here the facts disclose that the loss was caused by the concurrent causati#e effects of an e5ce"ted and a non(e5ce"ted "eril, the carrier remains liable. He only esca"es liability to the e5tent that he can "ro#e that the loss or damage was caused by the e5ce"ted "eril alone. +amendments addedEn%(#n+ Pa)era +raders Co? Ltd? and Athers v? H undai 2erchant 2arine Co? Ltd? and Another . +he HBurasian /reamI F2222G 1 Aloyd!s Re" <19 ,resswell ; $he case in#ol#ed a claim for damage to a cargo of #ehicles caused by a fire on board the #essel Burasian /ream while in the "ort of *har6ah. $he ,ourt was thus to decide whether the carriers had e5ercised due diligence to ensure that the #essel was seaworthy

( :4 ( before and at the commencement of the #oyage as re>uired by 'rticle III of the Hague and Hague )isby Rules. ,resswell ; discussed the law regarding onus of "roof in cargo claims saying at F12:GD +1$he burden of "roof is on the claimants to "ro#e that the #essel was unseaworthy, "ursuant to art. III, r. 1, before and at the beginning of the #oyage. +2$he claimants must then also "ro#e that the loss or damage was caused by that unseaworthinessD +he Buro)a, F192 G %. 4 at 9<( 9 . +:If the claimants discharge the burden in res"ect of +1- and +2-, the burden defendants to "ro#e that they and those for whom they are res"onsible e5ercised due diligence to make the shi" seaworthy in the rele#ant res"ectsD +he +oledo, F199?G 1 AloydPs Re". 42 at ?2. +aIf they fail to do so, the defendants are not entitled to rely u"on the e5ce"tions in art. I), r. 2, including the SfireS e5ce"tion. +bIf the defendants are able to do so, they can rely u"on the SfireS e5ce"tion as a defence to breach of art. III, r. 2, sub6ect to the claimants "ro#ing that the loss or damage was Scaused by the actual fault or "ri#ity of the carrierSD +he A)ostolis, F1996G 1 AloydPs Re". 4<? at ". 4 :, col. 2I *crutton on ,harter"arties +22th ed.-, ". 444. +4In relation to due diligence, "roof of unseaworthiness fulfils the same function as res i)sa loJuitur does in ordinary cases of negligenceD +he Amstelslot, F196:G 2 AloydPs Re". 22: at 2:? "er Aord /e#linI +he >8ord *ind, F2222G 2 AloydPs Re". 191 at 22?. In "ractical terms, the reasoning isD Sa shi" should not be unseaworthy if "ro"er care is takenS +"er *tuart( *mith A;- see also at F124G(F1:6G Ne. 4e#(#n+ 1ew @ealand China Cla s Ltd v +asman Arient Line CV +unre"orted, ,I)(2222(424( :21?, 9illiams ;, :1 'ugust 222<-.

( :? ( 9hile sailing through a restricted "assage off the coast of ;a"an at night, the $asman %ioneer grounded after the failure of its radar. $he master failed to notify the ;a"anese coastguard and "roceeded at full s"eed for two hours. /uring this time the shi" took on large amounts of water damaging the deck cargo. $he master ordered the crew to say to the coastguard that the shi" had struck a floating ob6ect. /uring the course of the coastguard!s in#estigations the crew and later the master admitted to the grounding. $he "laintiffs held interests in cargo, dairy "roducts stowed in the damaged reefer containers, stowed on the deck of the shi". $he "laintiffs brought cargo claims alleging breach of bailment and breach of contract under the bills of lading issued by $asman Crient Aine, the sub(time charters of the $asman %ioneer. $asman Crient Aine sought to a#ail itself of the e5em"tion contained in 'rticle 4, rule 2+a- of 0ew 1ealand!s 'mended Hague()isby Rules. 9illiams ; saidD
F12G $he "arties each assert that the burden of "roof of the defendant!s entitlement to either or both of those e5em"tions lies on the other. $hat became a trial issue. E F126G 'll counsel were agreed that a central issue in this case is the correct construction of 'rt. 4, R 2+a- of the Hague()isby Rules, earlier cited. E F129G $he "laintiffs also assert that $asman Crient has the onus of "roof of its entitlement to the e5em"tion. E F1?2GFEG Aord Hobhouse took the same #iew Fin Larrinaga "teamshi) Co? Ltd v +he Crown 3+he HRamon de LarrinagaI5 +1944- < Aloyds Re" 16<G. Cn the "oint under consideration, he held that +at 1?9(162-D E In the "resent case, the e5ce"tion did not "ro#ide a defence. 7irst, the breach of contract was the breach of both as"ects of the owners! obligations under cl. of the time charter = to "rosecute the #oyage with the utmost des"atch and to com"ly with the orders and directions of the charterers as regards the em"loyment of the #essel. FEG *econdly, any error which the master made in this connection was not an error in the na#igation or management of the #esselI it did not concern any matter of seamanshi". $hirdly, the owners failed to discharge the burden of "roof which lay u"on them to bring themsel#es within the e5ce"tion. E

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F1?6G F$he defendant!sG submissions first challenged the "laintiffs on the onus of "roof. He submitted that if cargo resists the a#ailability of an e5ce"tion clause by reason of some alleged failure by the shi" ( for e5am"le, unseaworthiness = then the onus was on cargo to "ro#e it. F1?<G He carefully re#iewed the history leading u" to the com"romise between owners and cargo interests re"resented by the Hague()isby Rules noting that as long as owners e5ercised due diligence in making a shi" seaworthy, both "hysically and with com"etent crew, they were entitled to rely on e5ce"tions reflecting the risks arising from the common #enture of sea #oyages including damage arising from the act, neglect, or default of master and crew in the na#igation or management of the shi". He drew on a forthcoming edition +now a#ailable on the internet- of %rof $etley!s work on 2arine Cargo Claims +4rdth ed due for "ublication in 222 , ch 16, " 1- that the defence is uni>ue to ocean carriers, uni>ue in trans"ortation law, deliberately e5cluded from the Hamburg Rules and increasingly contested by critics of the Hague and Hague()isby Rules. He relied on the O Bunga "ero8aQ. He also relied on the recent House of Aords decision in <indal Iron and "teel Co? Ltd v Islamic "olidarit "hi))ing Co? <ordan Inc 3the H<ordan III5 F222?G 1 Aloyds Re" ?< where their Aordshi"s em"hasised the im"ortance of certainty in international trade law as transcending the dubious authority of a "recedent decision, e#en one of long standing. F1? G F$he defendant,G 8r @ray submitted that the correct inter"retation of 'rt 4 R 2+awas that carriers ha#e a duty to cargo interests to care for the cargo "ro"erly under 'rt :. E F162G 8r @ray then "resented careful and com"rehensi#e submissions concerning the 4nglish common law at the time of the Hague ,onference in 1921 and the +ravau, Pr-)aratoires of the Hague Rules but, with res"ect to counsel!s diligence, it is thought unnecessary to lengthen an already significant 6udgment by including that material. F161G EHe also drew attention to the obser#ations of ,allinan ; in the O Bunga "ero8aQ +" 241(2, "ara F241G, F242G-D It is immediately ob#ious that the Rules are intended to confer a #ery wide range of immunities u"on carriers. Rule 1 strongly con#eys the notion that liability should be sheeted home to the carrier only in res"ect of a want of a""ro"riate care +due diligence- on its "art. In some res"ects therefore, the s"ecific instances of immunities set out in r 2, might be regarded as su"erfluous. 4ach of items 2+d-, +e-, +f-, +g-, +h-, +6-, +k-, +l-, +m-, +n- and +"- in all or most cases would in#ol#e no fault on the "art of the carrier. $he notion that the carrier is not to be liable without actual fault is reinforced by +>-. It seems to be going a long way, as +a- does, to e5cul"ate the carrier from #icarious liability for its ser#ants or agents in managing and na#igating the shi". Howe#er, the antidote may be that the carrier does ha#e a duty Oto "ro"erly man E the shi"Q "ursuant to 'rt III, r 1+band by doing that should be regarded as ha#ing fulfilled its obligations in that regard to the shi""er. 'rticle I), r 1 e5"ressly im"oses an onus +of "ro#ing due diligence- on the carrier when loss or damage has resulted from unseaworthiness. Howe#er, r 2 +e5ce"t for r 2+>-- which o"erates to e5onerate the carrier is silent as to who

( :< (
bears the onus, notwithstanding that most of the e5ce"ting e#ents would be ones "eculiarly within the knowledge of the carrier.

9illiams ; concluded on this "oint at F241G(F242GD


It follows that while what ha""ened 6ust before the grounding and for se#eral hours afterwards may ha#e been an Oact, neglect or default of the master E in the na#igation or in the management of the shi"Q his actions did not amount to an Oact, neglect or defaultQ in the bona fide Ona#igation or in the management of the shi"Q. 'ccordingly, $asman Crient has failed to discharge the burden of "roof of demonstrating its entitlement to the e5em"tion "ro#ided by 'rt 4 R 2+a- of the Hague()isby Rules as correctly construed.

(: ( APPENDI3 II Draft Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea ,H'%$4R ?. AI'3IAI$M C7 $H4 ,'RRI4R 7CR AC**, /'8'@4 CR /4A'M Article #%? Basis of liabilit 1. $he carrier is liable for loss of or damage to the goods, as well as for delay in deli#ery, if the claimant "ro#es that the loss, damage, or delay, or the e#ent or circumstance that caused or contributed to it took "lace during the "eriod of the carrier!s res"onsibility as defined in cha"ter 4. 2. $he carrier is relie#ed of all or "art of its liability "ursuant to "aragra"h 1 of this article if it "ro#es that the cause or one of the causes of the loss, damage, or delay is not attributable to its fault or to the fault of any "erson referred to in article 19. :. $he carrier is also relie#ed of all or "art of its liability "ursuant to "aragra"h 1 of this article if, alternati#ely to "ro#ing the absence of fault as "ro#ided in "aragra"h 2 of this article, it "ro#es that one or more of the following e#ents or circumstances caused or contributed to the loss, damage, or delayD +a- 'ct of @odI +b- %erils, dangers, and accidents of the sea or other na#igable watersI +c- 9ar, hostilities, armed conflict, "iracy, terrorism, riots, and ci#il commotionsI +d- Tuarantine restrictionsI interference by or im"ediments created by go#ernments, "ublic authorities, rulers, or "eo"le including detention, arrest, or seiKure not attributable to the carrier or any "erson referred to in article 19I +e- *trikes, lockouts, sto""ages, or restraints of labourI +f- 7ire on the shi"I +g- Aatent defects not disco#erable by due diligenceI +h- 'ct or omission of the shi""er, the documentary shi""er, the controlling "arty, the consignee, or any other "erson for whose acts the shi""er or the documentary shi""er is liable "ursuant to article :4 or :?I +i- Aoading, handling, stowing, or unloading of the goods "erformed "ursuant to an agreement in accordance with article 14, "aragra"h 2, unless the carrier or a "erforming "arty "erforms such acti#ity on behalf of the shi""er, the documentary shi""er or the consigneeI +6- 9astage in bulk or weight or any other loss or damage arising from inherent defect, >uality, or #ice of the goodsI +k- Insufficiency or defecti#e condition of "acking or marking not "erformed by or on behalf of the carrierI

( :9 ( +l- *a#ing or attem"ting to sa#e life at seaI +m- Reasonable measures to sa#e or attem"t to sa#e "ro"erty at seaI +n- Reasonable measures to a#oid or attem"t to a#oid damage to the en#ironmentI +o- 'cts of the carrier in "ursuance of the "owers conferred by articles 16 and 1<. 4. 0otwithstanding "aragra"h : of this article, the carrier is liable for all or "art of the loss, damage, or delayD +a- If the claimant "ro#es that the fault of the carrier or of a "erson referred to in article 19 caused or contributed to the e#ent or circumstance on which the carrier reliesI or +b- If the claimant "ro#es that an e#ent or circumstance not listed in "aragra"h : of this article contributed to the loss, damage, or delay, and the carrier cannot "ro#e that this e#ent or circumstance is not attributable to its fault or to the fault of any "erson referred to in article 19. ?. $he carrier is also liable, notwithstanding "aragra"h : of this article, for all or "art of the loss, damage, or delay ifD +a- $he claimant "ro#es that the loss, damage, or delay was or was "robably caused by or contributed to by +i- the unseaworthiness of the shi"I +ii- the im"ro"er crewing, e>ui""ing, and su""lying of the shi"I or +iii- the fact that the holds or other "arts of the shi" in which the goods are carried +including any containers su""lied by the carrier in or u"on which the goods are carried- were not fit and safe for rece"tion, carriage, and "reser#ation of the goodsI and +b- $he carrier is unable to "ro#e either thatD +i- none of the e#ents or circumstances referred to in sub"aragra"h ? +a- of this article caused the loss, damage, or delayI or +ii- that it com"lied with its obligation to e5ercise due diligence "ursuant to article 1?. 6. 9hen the carrier is relie#ed of "art of its liability "ursuant to this article, the carrier is liable only for that "art of the loss, damage or delay that is attributable to the e#ent or circumstance for which it is liable "ursuant to this article. Article #$? Liabilit of the carrier for other )ersons $he carrier is liable for the breach of its obligations under this ,on#ention caused by the acts or omissions ofD +a- 'ny "erforming "artyI +b- $he master or crew of the shi"I +c- 4m"loyees or agents of the carrier or a "erforming "artyI or +d- 'ny other "erson that "erforms or undertakes to "erform any of the carrier!s obligations under the contract of carriage, to the e5tent that the "erson acts, either directly or indirectly, at the carrier!s re>uest or under the carrier!s su"er#ision or control.

( 42 (