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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 CONVENTION
The Hon Just!e Ste"en R#$es1
The H#%ue-Vs&' Ru(es) Hsto$'
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. $he Hague Rules as
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 #$$# +th-3.
3. 'rticles III and I) of the Hague()isby Rules4 e#ol#ed from the Harter Act #%$& +*-.
ongress "ro#ided a regime which limited the ability of shi" owners to derogate from
their common law liability as common carriers. $he /ominion "arliaments of
'ustralia, 0ew ealand and anada in the first decade of the 2 entury enacted their
own #ersions of the Harter Act th. 's more nations enacted legislation, a number of
shi" owners, "articularly in the then 3ritish m"ire, e5"ressed concern that they would
be subect to different regimes for damage caused to cargo in many different countries
of the world.
1 ' udge of the 7ederal ourt of 'ustralia. $he author acknowledges the research
assistance "ro#ided by 8s lisa Ronchetti and 8r 8ichael ells in "re"aration of this "a"er.2 $he %rotocol was ado"ted in 3russels on : 7ebruary 196 and entered into force on 2: ;une 19<<
: $hese are called the &amended Hague Rules = unmodified te5t!. $he 'ct also includes a
uni>ue modification of the Hague()isby Rules im"lemented by 'ustralia in 199, contained in
*chedule 1'.
4 *chedule 1 to Carriage of !oods b "ea Act #$$# +th-
th Carriage of !oods b "ea Act #$'( +th-, "hi))ing and "eaman Act #$'& +0- and
*ater Carriage of !oods Act +R.*.. 19?, c. (2< +re"ealed-- res"ecti#ely
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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 192s 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. $he most im"ortant were meetings
of the omitB 8aritime International in Aondon in early Cctober 1922 and the
International onference on 8aritime Aaw in 3russels later that month. Cne of the
"ersons who chaired sessions was 8onsieur Aouis 7ranck. He was a member of the
3elgium abinet +8inister for olonial 'ffairs-, %resident of the 8I, and a maritime
lawyer. He chaired the 1922 3russels meetings7. /uring the 3russels meetings,
8onsieur 7ranck saidD
&$here is no intention of establishing an all(embracing code co#ering the
affreightment or carriage of goods by sea. hat is intended is the formulation of alimited 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 oflading 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, theresult 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 samee#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 ustified. In reality it comes back,
"ure and sim"le, to what has always been the law concerning liability the worldo#er since Roman Aaw. $he "erson who undertakes the carriage of goods is a
5 *turley 87, &$he History of C@*' and the Hague Rules! +1991- 22 +1- ; 8ar A om
1, 26(2<
6 +1991- 22 +1- ; 8ar A 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 # +199- "" 12, 42:
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debtor to a certain body 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
nglish law and stressed the need for a common meaning to be gi#en under the
different systems of law10.
7. Cn 16 ;une 2, at its 41 *ession, the nited 0ations ommission on International
$rade Aaw +0I$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
0I$R'A $hird orking @rou" +$rans"ort Aaw- at the conclusion of its 21stst
*ession in )ienna on 24 ;anuary 2. $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. $he draft con#ention is intended to re"lace the #arious international con#entions
allocating res"onsibility between carriers of goods by sea and cargo interests = the
*turley 87, +he Legislative Histor of the Carriage of !oods b "ea Act and the +ravau,
Pr)aratoires of the Hague Rules . Volume # +199- "" :49(:?9 *ee, eg, *turley 87, +he Legislative Histor of the Carriage of !oods b "ea Act and the
+ravau, Pr)aratoires of the Hague Rules . Volume # +199- " :<6 and generally "" :<6(:<9 see
"articularly 8 7ranck at "" :<<, :<9
1 *turley 87, +he Legislative Histor of the Carriage of !oods b "ea Act and the +ravau,
Pr)aratoires of the Hague Rules . Volume # +199- "" :<9
11 Hailey R, &uro"ean shi""ers slam draft 0 cargo rules!, 4 ;uly 2, Llod0s List
online, ed < ;uly 2
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Hague Rules, the Hague()isby Rules, the United 1ations Convention on the Carriage
of !oods b "ea, 19< and the United 1ations Convention on International
2ultimodal +rans)ort of !oods, 19.
9.0II$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
uro"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. $hat #iew echoed the 'ustralian @o#ernment!s official
"osition thatD
&Ethe draft con#ention may be read as gi#ing greater weight to carrier interests
rather than striking an e>uitable balance between the interests of shi""ers and
carriers. hile some shi""ers ha#e sufficient negotiating "ower to be able toconclude fair contracts, 'ustralia!s "rimary concern is how the draft con#ention
will im"act on small and medium shi""ers.!13
10. 0o doubt the world!s admiralty and maritime lawyers are looking forward to e5"loring
who is right. ill the Rotterdam Rules, like the curate!s egg, be good in "artsL
Onus o* P$oo* #n+ A$t!(es III #n+ IV o* the H#%ue-Vs&' Ru(es
11. $he distinction in 'ustralian law between the onus of "roof and the order of "roof incargo 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
Limited 15. $hat case concerned the Hague Rules, but the High ourt!s reasoning is
e>ually a""licable to the amended Hague +Hague()isby- Rules. $here, 8ason and
ilson ;;, with whom, on this "oint, @ibbs and 'ickin ;; concurred 16 +and *te"hen ;
12 Hailey R, &uro"ean shi""ers slam draft 0 cargo rules!, 4 ;uly 2, Llod0s List
online, ed < ;uly 2
1: 0I$R'A +41st session, 0ew Mork, 16 ;une ( : ;uly 2- 'N0.9N6?
omments recei#ed from @o#ernments and intergo#ernmental organiKations = *tates =
'ustralia = 14 '"ril 2, &@eneral comments on the te5t as a whole!, "ar
14 *ee $etley , 2arine Cargo Claims +4th ed, $homson, 2- "" :1:(4
1? +19- 14< AR 142
16 14< AR at 149, 16
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found to the same effect17- a""ro#ed of the following statement of *amuels ;' in the
0ew *outh ales ourt of '""eal18D
&$he correct se>uence of "leading is set out in +he !lendarroch19 in the udgment
of Aord sher 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 damagedcondition, 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 Limited 21. $hey noted the
discussion on this to"ic by @audron, @ummow and Hayne ;; in !reat China 2etal
Industries Co Ltd v 2alasian 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 udge, mmett ;, another a""roach suggested by the decisions in !reat
China24 and !amlen Chemical 25 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< 14< AR at 1?:
1 14< AR at 1619 F194G % 226 at 2:1
2 F194G % at 2::21 16 7R :42 at :61 F??G(F?6G F2<G 7'7 <<
22 +199- 196 AR 161 at 1<2 F21G
2: 196 AR 161
24 196 AR 161
2? 14< AR 142
26 *ee !amlen Chemical 14< AR at 1?2, 1?4 "er *te"hen ;, 164(16? "er 8ason and
ilson ;; !reat China 196 AR at 19: F?G, 19?(196 F91G(F9?G, 216(219 F14:G(F146G, 24: F22G
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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 obecti#es, "articularly for law makers. In the
a""ositely named decision of Riddle v +he 9ing 28, @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 oncereminded in ngland 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 11 F?G An6ergracht F2<G 7'7 << 16 7R at :61 F?6G "er Ryan and /owsett ;;,
and 41: F2<G "er Rares ; Hilditch Pt Ltd v /orval 9aiun 99 31o :5 +2<- 24? 'AR 12? at
142(14: FG F2<G 7' 214 "er Rares ;
2< F2<G 7' <?2 Aater, in * 9 2arble ; !ranite Pt Limited v CA"A China Limited
+F2<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.
2 +1911- 12 AR 622 at 629
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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 subect 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 "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
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
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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"
fire, unless caused by the actual fault or "ri#ity of the carrier
"erils, dangers and accidents of the sea
acts of @od, acts of war
>uarantine restriction
acts or omissions of the shi""er or owner of the goods, his agent or
re"resentati#e
wastage in bulk or weight or any other loss or damage arising from
inherent defect, >uality or #ice of the goods
insufficiency of "ackaging
latent defects not disco#erable by due diligence
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.
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The Ankergracht C#ses
25. In the An6ergracht 29 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 inMokohama, 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. ach #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 udge +mmett ;- 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 maority in the 7ull ourt o#erturned the trial udge!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 reected challenges to the trial udge!s finding that
29 CV "hee)vaartonderneming An6ergracht v "temcor 3A4sia5 Pt Limited 16 7R :42
F2<G 7'7 <<
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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 thatmight be encountered during the #oyage. $hey held that there was insufficient
e#idence to ustify 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 usingdehumidifiers, 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. $hus, it could not be found that the absence of
: An6ergracht 16 7R at :< F<G F2<G 7'7 <<
:1 16 7R at :69 F4G F2<G 7'7 <<
:2 16 7R at :69 F4G F2<G 7'7 <<
:: 16 7R at :69 F?G F2<G 7'7 <<
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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 *hita6er 34. *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*tn% Onuses
32. In +he =Hellenic /ol)hin0 36 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 +1992- 1<? AR 4<9 at 4<
:? 6 7 2d <:< +' 2 19:2- at <4
:6 F19<G 2 Aloyd!s Re" ::6 at ::9
:< F1911G ' 194 at 2:
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&8y Aords, in the udgments 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
doctrine and it is none the less sound although the #essel break down or sinkshortly 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 layingu", 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 considerationthere is no single standard of fitness which a #essel must meet. $hus,
seaworthiness is udged ha#ing regard to the conditions the #essel will
encounter htt"DNNthomsonn5t4NlinksNHandler.as"5Ltag11cfc:22ee:4<e9121da:d:be44?"roductcl. E $he #essel must be
Sfit to encounter the ordinary "erils of the #oyageS 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 udged at the time that the #esselsails, it will be im"ortant to consider how it is loaded and stowed. If the #essel iso#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 mayalso 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
: 196 AR at 1<4(1<? F2<G(F:1G
:9 '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;
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( 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 diligence40. 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 "a6harov543
'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 obecti#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
4 *ee also 'rt ? r 2 +m-, Hague Rules 'rt 1 r : +-, /raft on#ention
41 An6ergracht F2<G 7'7 << at F19G(F19G "er Rares ; a""lying 2/C Ltd v 1V
@eevarrt 2aatscha))i8-=Beursstraat0 F1962G 1 Aloyd!s Re" 1 at 16 "er 8c0air ; +he Arianna
F19<G 2 Aloyd!s Re" :<6 "er ebster ; citing Jerr A; in +he /erb F19?G 2 Aloyd!s Re" :2? at::2 *estern Canada "teamshi) Co Ltd v Canadian Commercial cor)oration F196G *R 6:2 at
64:42 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 F2<G 7'7 << 16 7R at 4:(44 F224G
4: F2G 2 Aloyd!s Re" 22? at 266
44 In this res"ect see also $etley , 2arine Cargo Claims +4th ed, $homson, 2- at :14(:1?
4? *ee BHP +rading Asia Pt Ltd v ceaname "hi))ing Ltd +1996- 6< 7R 211 at 299 "er
Hill ; !reat China 2etal 196 AR 161 at F::G An6ergracht F2<G 7'7 << 16 7R at :6?
F69G, :6(9 F:G "er Ryan and /owsett ;;, and at :9:(4 F12G "er Rares ;
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&*ubect 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" agreed47
with )iscount Jilmuir A in !H Renton ; Co Ltd v Palmra +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 "ortwill, no doubt, be different from the "ro"er stowage of cargo on a #esseltra#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, subect 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 F1966G 2 Aloyd!s Re" ?: at ?
4< F1966G 2 Aloyd!s Re" ?: at ?4 F19?<G ' 149 at 166
49 196 AR at 1<? F:4G
? /a#ies 8 and /ickey ', "hi))ing Law +:rd ed, Aawbook o, 24-, " 29 citing, inter
alia, +he +1+ ,)ress F1992G 2 Aloyd!s Re" 6:6 at 642(64: +0**- see $etley , 2arine
Cargo Claims +4th ed, $homson, 2- at :14 where he refers to four basic "rinci"les of burden of
"roof see also 8argetson 0;, +he "stem of Liabilit of Articles III and IV of the Hague 3Visb5
Rules +itge#eri %aris, 2- "" < and 1:4
?1 *ee 8argetson 0;, +he "stem of Liabilit of Articles III and IV of the Hague 3Visb5 Rules
+itge#eri %aris, 2- "" < and 1:4
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( 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 thelikelihood 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
Chemical 55 8ason and ilson ;; 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 udge 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 ilson ;; saidD
&It seems to us that an accurate reflection of these findings re>uires one to treatthe two concurrent causes of the loss as inse"arable, and therefore oint. $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 thematter 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 /a#ies 8 and /ickey ', "hi))ing Law +:rd ed, Aawbook o, 24-, " 211 citing
*taughton A; in +he Antigoni F1991G 1 Aloyd!s Re" 29 at 212
?: F1991G 1 Aloyd!s Re" 29 at 212
?4 $etley , 2arine Cargo Claims +4th ed, $homson, 2- at :2?
?? 14< AR at 16:(164
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under 'rt I) r 2. 8ason and ilson ;; 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 carrier 56.
46. 8ason and ilson ;; 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 carrier 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 agreater 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. here 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. I held
recently in Hilditch 31o :560 7 that the carrier will only esca"e liability if it can "ro#e
that the loss or damage was caused by an e5ce"ted "eril alone61.
?6 !amlen Chemical 14< AR at 164?< *uch as 'rt I) rr 2+c-(+o-, e5ce"ting +l- where the losses were not occasioned by oint causes.
? !amlen Chemical 14< AR at 16?
?9 !amlen Chemical 14< AR at 16? "er 8ason and ilson ;;.
6 24? 'AR 12? F2<G 7' 214.
61 24? 'AR at 14? F9:G F2<G 7' 214 see also +he >iona F199:G 1 Aloyd!s Re" 2?<,
2 +he +orenia F19:G 2 Aloyd!s Re" 21 at 21 $etley , 2arine Cargo Claims +4th ed, 2-
<<?
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( 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
&here the state of the "roof is such as to show that the damage is due either to ane5ce"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
inury 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"tion66,
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 illiam $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 uris"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 29: * 296 at :6
6: Jnown as the Vallescura Rule64 *chedule 2 to the Carriage of !oods b "ea #$$# +th-
6? +he Vallescura 29: * at :666 '""licable in the common law of bailment and also by force of the analogue in the
Harter Act #%$& +*- to the Hague Rules
6< 29: * at :<
6 *ee $etley , 2arine Cargo Claims +4th ed, $homson, 2- at :2? and footnote 44.
$he "rinci"les in the Vallescura Rule are a""lied also in anada and ngland.
$etley , 2arine Cargo Claims +4th ed, $homson, 2- at :14.. $he first three
"rinci"les were endorsed and a""lied by 3lais ; in the 7ederal ourt of anada in Voest-Al)ine
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52. His first "rinci"le is that the carrier &is )rima facie liable for loss or damage to cargo
recei#ed in good order and out(turned short or in bad order!.69 His subse>uent
"rinci"les areD
&F$Ghe "arties are in general re>uired to make "roof of whate#er facts area#ailable to them!70
&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!71 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 illiams ;;
a""ro#ed the statement of the %ri#y ouncil in +he )helia74
&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 consideredrebutted, 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
China75 7 the >uestion of whether a carrier will be found liable is, in large "art, a factual
en>uiry. $hey "osed a >uestionD
&E is the carrier immune in res"ect of what otherwise would be its failure to
discharge its res"onsibilities under 'rt III, because the loss or damage to the
"tahl Lin !mbH v >ederal Pacific Ltd? +1999- 1<4 7$R 69 at <4, 2editerranean "hi))ing Co "A
!eneva #."i)co Inc F22G : 7 12? at 1?, and most recently in "htutman v ceane 2arine
"hi))ing Inc +2?- 2: 7$R :<69 $etley , 2arine Cargo Claims +4th ed, $homson, 2- at :1?
< $etley , 2arine Cargo Claims +4th ed, $homson, 2- at :2<1 $etley , 2arine Cargo Claims +4th ed, $homson, 2- at :41
<2 $etley , 2arine Cargo Claims +4th ed, $homson, 2- at :4: see too Allen v +obias
+19?- 9 AR :6< at :<? "er /i5on ;, 8c$iernan and illiams ;; a""lying +he )helia F1916G
2 ' 26 at 229(2:
<: 9 AR :6< at :<?
<4 F1916G 2 ' at 229(2:
<? 196 AR at 1(11 F49G
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( 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. #en so, as noted abo#e, the maority of the High ourt in
!amlen Chemical 79 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#al this "oses a "rima facie case of
the carrier!s breach of 'rt III r 2
(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 2
(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- "ro#ing that the carrier effecti#ely breached 'rt III r 2 by failing to
<6 $etley , 2arine Cargo Claims +4th ed, $homson, 2- at :14
77 3lais ; in Voest-Al)ine "tahl Lin !mbH #. >ederal Pacific Ltd? +1999- 1<4 7$R 69 atF2?G citing $etley , 2arine Cargo Claims +:rd ed, 3lais, 19- " 142 see also $etley , 2arine
Cargo Claims +4th ed, $homson, 2- at :?1 to :?6< 1itram Inc v 2V Cretan Life ?99 72d 1:?9 +'? 19<9- at 1:<:
<9 14< AR 142
*ee /a#ies 8 and /ickey ', "hi))ing Law +:rd ed, Aawbook o, 24- " 212
1 *ee /a#ies 8 and /ickey ', "hi))ing Law +:rd ed, Aawbook o, 24- " 212 citing,
inter alia, U" v cean Bul6 "hi)s Inc 24 7 :d ::1 +' ? 21- at ::6 and +he !lendarroch
F194G % 226 at 2:1 see also 8argetson 0;, +he "stem of Liabilit of Articles III and IV of the
Hague 3Visb5 Rules +itge#eri %aris, 2- "" <, 1:4 and 1(1
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&"ro"erly and carefully load, handle, stow, carry, kee", care for and
discharge the goods carried! 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 loss
82
.
(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 carrier’s 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 'rts III r 1 and I) r 1, Hague()isby Rules
: /a#ies 8 and /ickey ', "hi))ing Law +:rd ed, Aawbook o, 24- " 212
4 196 AR at 1<2 F22G(F2:G
? *ee 196 AR at 14 F6:G "er 8cHugh ;
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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 arise86. 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 Sturley’s observation that the new rules were designed to create a self-
contained 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#eddoes 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 carrierPsobligations 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 Chemical 90, as did allinan ;91. @audron,
@ummow and Hayne ;; said that nothing in the case turned on the allocation of the
burden of "roof 92.
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 !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 # +199- at " 9
!reat China 196 AR at 19< F9G
9 196 AR at 19<(19
9 !reat China 196 AR at 222(22: F1??G(F1?6G
91 196 AR at 24:(244 F229G
92 !reat China 196 AR at 12 F?4G
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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 /ickey-94, described those #iews of
@audron, @ummow and Hayne ;; as &radical! so far as they sought to de"art from theonus and order of "roof identified in !amlen Chemical 95. $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 redundant98. $he
answer to that contention was com"elling in the following e5change between %rofessor
3erlingieri and 8onsieur 7ranck, as chairmanD
&$he hairman +8onsieur 7ranck- ( E e cannot create a con#ention if we
cannot find a formula that co#ers both instances. If, from the #antage "oint of ourown law, it is sufficient for the ca"tain to be e5onerated in all cases of force
9: *ee $etley , 2arine Cargo Claims +4th
ed, $homson, 2- :21(2 and /a#ies and/ickey, "hi))ing Law +:rd ed- "" 212(21:
94 /a#ies 8 and /ickey ', "hi))ing Law +:rd ed, Aawbook o, 24- "" 212(2149? 14< AR 142 and its a""lication of the !lendarroch F194G % 226
96 *ee for e5am"le /a#ies 8, O'ustralian 8aritime Aaw /ecisions 199D @reat hina 8etal
Industries o Atd # 8alaysian International *hi""ing 3hd or" +$he 3unga *eroa-Q F1999G
A8AT 4
9< $etley , 2arine Cargo Claims +4th ed, $homson, 2- at :21(2
9 *turley 87, +he Legislative Histor of the Carriage of !oods b "ea Act and the +ravau,
Pr)aratoires of the Hague Rules = Volume # +199- at "" :<6(:<<
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maeure or unforeseeable circumstances, t s not su**!ent un+e$ An%(o-S#on
(#.. /e 0ust !onse1uent(' !$e#te # *o$0u(# th#t h#s # !o00on 0e#nn%2!
8r 3erlingieri99 = e 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 notha#e to introduce the formula into your ode but you will ha#e to translate theclause 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 ilson,
Carriage of !oods b "ea104, and Carver on Bills of Lading 105.
69. In the An6ergracht 106, 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 nglish ourt of
'""eal in "ilver v cean "teamshi) Com)an Ltd 107? Ryan and /owsett ;; said that
99 'd#ocate, %rofessor of 8aritime Aaw at the ni#ersity of @eno#a, the Italian re"resentati#e
1 *ee *turley 87, $he Aegislati#e History of the arriage of @oods by *ea 'ct and the
$ra#au5 %rB"aratoires of the Hague Rules = )olume 1 +199- at " :<< see too #ol 2 at 46(4<,419 and see %rofessor 3erlingieri!s re"ort in )ol 2 at ?1
11 C!8ay /, 2arine InsuranceD Law and Polic +199:, *weet 8a5well- at " see there#iew in 11 ATR at 494(49?
12 196 AR 161
1: @askell 0, 'sariotis R and 3aatK M +AA% 2- "" 22(2: F.6G
14 +24 Aongman- at "" 2<(2<1
1? +21 *weet 8a5well, 1st ed- at " ?16 F9(29G
16 F2<G 7'7 << 16 7R :42
1< F19:G 1 J3 416
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the carriers bore the ultimate onus of "roof on the issue 108. "ilver 109 is also an
authority for the "ro"osition that, by issuing clean bills of lading stating that goods had
been shi""ed on board &in a""arent good order and condition!, the carrier is "recluded
from asserting that they were insufficiently "acked. If the insufficiency of "ackaging is
ob#ious, the cargo cannot be described as ha#ing been recei#ed in &a""arent good order
and condition!110 but if the bills are so claused, then the carrier is bound by the words it
used.
Re!ent De"e(o,0ents) The D$#*t Con"enton
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 currentinternational 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#isionsinter"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
1-112
1 An6ergracht F2<G 7'7 << 16 7R at :<(9 F11<G
19 F19:G 1 J3 416
11 An6ergracht F2<G 7'7 << 16 7R at 41? F2G "er Rares ; "ilver F19:G 1 J3 at
426(42< "er *crutton A;, 4:4 "er @reer A;, 441 "er *lesser A;
111 'ustralian comments "ar <
112 *ee 8argetson 0;, +he "stem of Liabilit of Articles III and IV of the Hague 3Visb5 Rules
+itge#eri %aris, 2- " 16:
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(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
contributed to by one or more of similar e5ce"tions to those in 'rt I) r 2
of the Hague()isby Rules. 3ut, unlike the latter, draft 'rt 1 "ar :
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.
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(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
delay or
ii) it com"lied with its obligation to e5ercise due diligence114 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.
ach 'rticle deals with the liability of the carrier where the damage arises or
results from the unseaworthiness of the #essel. ach re>uires the carrier to "ro#e that it
11: 'rticle 1 r ?, /raft on#ention
114 /raft 'rticle 1 "aragra"h ? +b-
11? /raft 'rticle 1?
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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 ustify 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- $he
claimant "ro#es that the loss, damage, or delay was or was "robably caused by or
contributed to by +i- the unseaworthiness of the shi"E!
77. 's the 'ustralian @o#ernment commented to 0I$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 morethan 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 theshi""er...
::. 'ustralia argues that the shi""er +i.e. the claimant in this case- would ha#edifficulty "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. $his change to the
116 F1911G ' at 2: "er Aord *haw
11< 'ustralia!s omments "ars :2 and ::
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general rule on allocation of liability is e5"ected to affect a significant number of
cargo claims and shi""ers will be disad#antaged in cases where there is more than
one cause of the loss or damage and a contributing cause was the negligentlycaused unseaworthiness of the #essel. In such cases, the shi""er will bear the onus
of "ro#ing to what e5tent unseaworthiness contributed to the loss.!
78. *ome of the carrier!s obligations under the amended Hague Rules ha#e been
carried o#er in reasonably familiar terms in the draft con#ention. /raft 'rt 14 r 1
restates 'rt III r 2 of the amended Hague Rules as followsD
&$he carrier shall during the "eriod of its res"onsibility as defined in article 12, and
subect 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 voage by sea to e5ercise
due diligence to =
(a)8ake and 6ee) the shi" seaworthy
(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 #oyage 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
&*ubect 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 'ustralia!s comments "ar 2<
12 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"
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+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 "arty
(b)$he master and crew of the shi"
(c)m"loyees or agents of the carrier or a "erforming "arty 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. $his
re#erses the inter"retation in !amben Chemical 123 and Hilditch 31o :5124
(a)8ake the holds, refrigerating and cool chambers, and all other "arts of the shi" in which
goods are carried, fit and safe for their rece"tion, carriage and "reser#ation.!
121 'rticle 1 r 2, /raft on#ention
122 'rticle 1 r :, /raft on#ention
12: 14< AR at 16?
124 24? 'AR at 14? F9:G
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that the carrier was liable if there were concurrent causes but it only
established one e5ce"tion. 'rticle 1 r 6 "ro#idesD
&hen the carrier is relie#ed of "art of its liability "ursuant to this article,
the carrier is liable only for that "art of the loss, damage or delay that is
attributable to the e#ent or circumstance for which it is liable "ursuant tothis article.!
(3) /raft 'rt 1 r : re#erses the "osition stated by *taughton A; in +he
Antigoni125 that a shi"owner who seeks to rely u"on 'rt I) r 1 of the
amended Hague Rules need not establish an e5ce"tion under 'rt I) r 2.
Con!(uson
81. Aike @riffith ;, I can say the law on the >uestion of this "a"er is certain, e#en if I
do not know what it is at "resent, let alone what it may soon become126.
12? F1991G 1 Aloyd!s Re" at 212
126 '""ended is +I- a summary "re"ared by lisa Ronchetti and 8ichael ells of some
recent cases from other common law urisdictions which ha#e considered the onus of "roof and
#arying burdens of "roof in cargo claims and +II- an e5tract from the draft con#ention including
draft 'rts 1 and 19
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APPENDI3 I
Re!ent O"e$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 2?-
$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 ,)edition? $he ourt held at 4:: thatD
&$o reco#er against a carrier for damage to goods shi""ed "ursuant to a bill oflading 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) CCA
Ins"iration, 1:< 7.:d 94, 9 +2d ir.199- +>uoting Vana +rading Co? v? "?"?F2ette "6ou,S ??6 7.2d 1, 14 +2d ir.19<<--. e ha#e held that Sthe issuance
of a clean bill of lading creates a "resum"tion of deli#ery in good conditionfa#orable to the "laintiff.S $ransatlantic 8arine laims 'gency, 1:< 7.:d at 9.
e 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 +2dir.191- +>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 thatone of the statutory C@*' e5ce"tions to liability a""lies. *ee 46 .*..a"". V
1:4+2-.
"teel Coils7 Inc? v? 24V La6e 2arion, ::1 7.:d 422 +' ?D 2:-.
$he case concerned a arriage of @oods by *ea 'ct127 claim for rust damage to steel
coils which the owner alleged was caused by seawater when shi""ed from Aat#ia to the
nited *tates on the 8N) La6e 2arion?
Rele#antly the ourt affirmed at FI)G thatD
&C@*' "ro#ides a com"le5 burden(shifting "rocedure. Initially, the "laintiff
must establish a "rima facie case by demonstrating that the cargo was loaded in anundamaged condition and discharged in a damaged condition F+ubace,7 Inc? v? 24V Risan 4? 7.:d 9?1, 9?4 +? ir. 199?-.G S7or the "ur"ose of determining the
condition of the goods at the time of recei"t by the carrier, the bill of lading ser#es
12< 46 .*.. a"". 1:
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as "rima facie e#idence that the goods were loaded in the condition therein
described.Q FIdG If the "laintiff "resents a "rima facie case, the burden shifts to the
defendants to "ro#e that they e5ercised due diligence to "re#ent the damage orthat the damage was caused by one of the e5ce"tions set forth in 1:4+2- of
C@*', including SF"Gerils, dangers, and accidents of the sea or other na#igable
watersQ and OFlGatent defects not disco#erable by due diligence.Q F46 .*.. a"".1:4 +2-G If the defendants show that the loss was caused by one of these
e5ce"tions, the burden returns to the shi""er to establish that the defendantsP
negligence contributed to the damage. F+ubace,7 Inc? v? 24V Risan 4? 7.:d at 9?4G7inally, Oif the shi""er is able to establish that the FdefendantsPG negligence was a
contributory cause of the damage, the burden switches back to the FdefendantsG to
segregate the "ortion of the damage due to the e5ce"ted cause from that "ortion
resulting from the carrierPs own negligence.Q F+ubace,7 Inc? v? 24V Risan 4? 7.:dat 9?4G.!
C#n#+#
"amuel7 "on ; Co? Ltd? v? Lithuanian "hi))ing Co. 22 7$ 11 +;an. 29, 22-
$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, 22 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 udgment 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<-,
F19G 1 7.. 262 +7ed. $./.- and >rancosteel Cor)? v? >ednav Ltd? +199-, :<
7.$.R. 14 +7ed. $./.-- had the initial burden to demonstrate the goods were
tendered for deli#ery in good condition. ' clean bill of lading is generallyacce"ted as establishing "rima facie "roof of this. In this case, the bill of lading
was claused SRust stained. et before shi"mentS.
In >rancosteel Cor)., su"ra, ;ustice Rouleau stated the ourt may consider alle#idence tendered as to the "re(shi"ment condition of the goods. He went on to
say a clean bill of lading, in some circumstances, has been held to be insufficient
to establish a "rima facie case where goods are shi""ed in "ackages "re#enting
any obser#ation of the "re(shi"ment condition of the goods.!
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In a""lying Rouleau ;!s reasoning in >rancosteel Cor)? +199-, :< 7.$.R. 14, 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 thegood 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.!
ith 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
illiam $etley, in 8arine argo laims F: ed 19G, at "age :2, writesD
here the damage is caused in "art by an act or fault for which the carrieris res"onsible and in "art by an act or fault for which the carrier is not
res"onsible, the carrier must be able to make "roof sufficient to se"arate
the damage resulting from one cause from the damage resulting from theother, or in the alternati#e be held res"onsible for the whole claim. F$his is
known as the )allescura Rule.G
%rofessor $etley >uotes from HobhousePs ;. in S+oreniaS +$he- F19:G 2 AloydPs
Re". 21 +ng. T.3.-, at 21 as followsD
here the facts disclose that the loss was caused by the concurrentcausati#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 added-
En%(#n+
Pa)era +raders Co? Ltd? and thers v? Hundai 2erchant 2arine Co? Ltd? and Another .
+he urasian /ream F22G 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 urasian /ream while in the "ort of *harah. $he ourt was thus to decide
whether the carriers had e5ercised due diligence to ensure that the #essel was seaworthy
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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 uro)a, F19G %. 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". 4 at ?.
+a- If 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.
+b- If 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, subect 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. 2 *crutton on harter"arties +2th
ed.-, ". 444.
+4- In 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#lin +he >8ord
*ind , F2G 2 AloydPs Re". 191 at 2?. 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 Clas Ltd v +asman rient Line CV +unre"orted, I)(22(44(
:21?, illiams ;, :1 'ugust 2<-.
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hile 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 obect. /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 ealand!s 'mended Hague()isby
Rules.
illiams ; 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 Ramon de Larrinaga5 +1944- < Aloyds Re" 16<G. Cn the "oint under
consideration, he held that +at 1?9(16-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. ofthe 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 #essel 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 ownerse5ercised 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 masterand crew in the na#igation or management of the shi". He drew on a forthcoming edition
+now a#ailable on the internet- of %rof $etley!s work on 2arine Cargo Claims +4rdth ed due
for "ublication in 2, ch 16, " 1- that the defence is uni>ue to ocean carriers, uni>ue in
trans"ortation law, deliberately e5cluded from the Hamburg Rules and increasingly
contested by critics of the Hague and Hague()isby Rules. He relied on the O Bunga "ero8aQ.
He also relied on the recent House of Aords decision in <indal Iron and "teel Co? Ltd v
Islamic "olidarit "hi))ing Co? <ordan Inc 3the <ordan II5 F2?G 1 Aloyds Re" ?<where their Aordshi"s em"hasised the im"ortance of certainty in international trade law as
transcending the dubious authority of a "recedent decision, e#en one of long standing.
F1?G F$he defendant,G 8r @ray submitted that the correct inter"retation of 'rt 4 R 2+a-
was that carriers ha#e a duty to cargo interests to care for the cargo "ro"erly under 'rt :.
E
F16G 8r @ray then "resented careful and com"rehensi#e submissions concerning the
nglish 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 udgment 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. ach of items
2+d-, +e-, +f-, +g-, +h-, +-, +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+b-
and 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
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bears the onus, notwithstanding that most of the e5ce"ting e#ents would be ones
"eculiarly within the knowledge of the carrier.
illiams ; concluded on this "oint at F241G(F242GD
It follows that while what ha""ened ust 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, $asman Crient has failed to discharge the burden of "roof of demonstrating its
entitlement to the e5em"tion "ro#ided by 'rt 4 R 2+a- of the Hague()isby Rules as
correctly construed.
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APPENDI3 II
Draft Convention on Contracts for the International Carriage of Goods Wholly or
Partly by Sea
H'%$R ?. AI'3IAI$M C7 $H 'RRIR 7CR AC**, /'8'@ CR /A'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 articleif 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 thisarticle, 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 @od
+b- %erils, dangers, and accidents of the sea or other na#igable waters
+c- ar, hostilities, armed conflict, "iracy, terrorism, riots, and ci#il commotions
+d- Tuarantine restrictions 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 19
+e- *trikes, lockouts, sto""ages, or restraints of labour
+f- 7ire on the shi"
+g- Aatent defects not disco#erable by due diligence
+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- 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 consignee
+- astage in bulk or weight or any other loss or damage arising from inherent
defect, >uality, or #ice of the goods
+k- Insufficiency or defecti#e condition of "acking or marking not "erformed by oron behalf of the carrier
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+l- *a#ing or attem"ting to sa#e life at sea
+m- Reasonable measures to sa#e or attem"t to sa#e "ro"erty at sea
+n- Reasonable measures to a#oid or attem"t to a#oid damage to the en#ironment
+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
relies or
+b- If the claimant "ro#es that an e#ent or circumstance not listed in "aragra"h : ofthis 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 ofthe 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" +ii- the im"ro"er
crewing, e>ui""ing, and su""lying of the shi" 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 goods and
+b- $he carrier is unable to "ro#e either thatD +i- none of the e#ents or circumstancesreferred to in sub"aragra"h ? +a- of this article caused the loss, damage, or delay or
+ii- that it com"lied with its obligation to e5ercise due diligence "ursuant to article
1?.
6. hen the carrier is relie#ed of "art of its liability "ursuant to this article, the carrier isliable only for that "art of the loss, damage or delay that is attributable to the e#ent or
circumstance for which it is liable "ursuant to this article.
Article #$? 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 "arty+b- $he master or crew of the shi"
+c- m"loyees or agents of the carrier or a "erforming "arty or
+d- 'ny other "erson that "erforms or undertakes to "erform any of the carrier!sobligations 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.
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