Shipping Corporation of India Ltd v Gamlen Chemical Co A/asia Pty Ltd

[1980] HCA 51

HIGH COURT OF AUSTRALIA

Gibbs, Stephen, Mason, Aickin and Wilson

SHIPPING CORPORATION OF INDIA LTD. v. GAMLEN CHEMICAL CO. A/ASIA. PTY. LTD.

(1980) 147 CLR 142

12 December 1980

Shipping

Shipping—Sea carriage of goods—Hague Rules—Damage to cargo—Negligent stowing—Perils of the sea—Heavy weather—Liability of carrier—Overriding obligation to exercise due care—Sea-Carriage of Goods Act 1924 (Cth), Sch., Arts. III, r. 2, IV, r. 2 (c).

Decisions

December 12.
The following written judgments were delivered: -
GIBBS J. I have had the advantage of reading the judgments prepared by Stephen J., and by Mason and Wilson JJ. and, for the reasons they have given, I concur in dismissing the appeal. I need only add, in relation to the question on which Stephen J. has reserved his opinion, that in my opinion the heavy weather which the ship experienced was rightly held to be a peril of the sea. (at p149)

STEPHEN J. This appeal involves interpretation of the Hague Rules. During heavy weather in the Great Australian Bight, the severity of which was unusual but not unforeseeable, a number of drums of cleaning solvent stowed in a ship's hold broke adrift, were damaged and their contents lost. The means of securing them in place in the hold had been inadequate. (at p149)

2. The trial judge held that the heavy weather was a peril of the sea and that the carrier should escape liability despite its failure properly to stow the drums. It was entitled to rely on Art. IV, r. 2 (c) of the Hague Rules, which relieves a carrier from responsibility for loss or damage arising from perils of the sea. The Court of Appeal held to the contrary and allowed the cargo owner's appeal. Hence the carrier's present appeal to this Court. (at p150)

3. The Hague Rules, scheduled to the Sea-Carriage of Goods Act 1924 (Cth), applied. Accordingly the carrier was, under the contract of carriage, "subject to the responsibilities and liabilities, and entitled to the rights and immunities" set out in the Rules: Art. II. By Art. III r. 2 one of its responsibilities was, "Subject to the provisions of Article IV", to "properly and carefully . . . stow" the drums. By Art. IV, r. 2 (c) one of its immunities was freedom from responsibility for "loss or damage arising or resulting from . . . perils, dangers and accidents of the sea". The trial judge held, correctly as the appellant contends, that the effect of the opening words of Art. III, r. 2 is to subordinate that rule to the provisions of Art. IV. (at p150)

4. The precise nature of the carrier's breach of responsibility is of importance. What is proper stowage will, in any particular case, depend on all the circumstances, including the nature of the particular goods and the conditions of weather and of sea likely to be encountered on the voyage. The trial judge found that the stowage was not proper and careful because the carrier failed so to secure the drums in the hold that they would not break loose in heavy weather, such as might from time to time be experienced in the Bight and which ought therefore to have been anticipated as something to guard against. His Honour accepted the expert evidence of a Captain Downes that these drums, stowed as they were in a forward hatch, should have been well secured "in view of the expected rough weather"; also the expert evidence of a Captain Goodson that properly stowed cargo would have withstood weather such as the ship experienced. His Honour's conclusion was that "for a voyage through the Great Australian Bight, the stowage of the goods was inadequate. This is particularly so where the voyage was in winter when bad weather was more likely to be encountered". (at p150)

5. It is significant that the measure of the carrier's duty of proper stowage was related to the kind of heavy weather which might be anticipated. It is surely curious that that very weather, when in fact encountered, should operate to excuse the carrier from responsibility for the improper stowage. (at p150)

6. The consequences of such an outcome are farreaching. Because of the opening words of Art. III, r. 2, "Subject to the provisions of Article IV", the carrier's responsibility for proper stowage will have no practical significance if damage to cargo occurs in conditions which amount to a peril of the sea. As heavy weather, although anticipated and not unusual, will be such a peril, it seems to follow that no carrier need ever be concerned to stow cargo so as to protect it against such anticipated weather. Carriers will, under Art. IV r. 2 (c), always be excused from responsibility for any shifting of cargo in heavy weather, however inadequate the stowage. (at p151)

7. To state these propositions is enough to raise doubts whether the Hague Rules indeed produce consequences such as these, which have, I believe, been unappreciated to date and which appear to receive no express recognition in the decided cases. (at p151)

8. There are, I think, three underlying features of the appellant's argument which need to be examined: the effect sought to be attributed to the opening words of Art. III, r. 2; the notion that in the present case improper stowage and heavy weather were concurrent causes of the damage to the drums; the related contention that, regardless of the existence of the first of these causes, the second might be relied upon to invoke the immunity conferred by Art. IV, r. 2 (c). Each I regard as involving error; each contributes to the consequences contended for by the appellant. The meaning of "perils of the sea" in the context of Art. IV, r. 2 (c) also calls for brief mention. (at p151)

9. The opening words of Art. III, r. 2, "Subject to the provisions of Article IV", provide the substantial basis for the appellant's argument. To give them the operation contended for reliance is principally placed upon some observations by Lord Pearson in Albacora S.R.L. v. Westcott &Laurance Line Ltd. (1966) 2 Lloyd's Rep 53, at p 64 . His Lordship there said:
"There is no express provision, and in my opinion there is no implied provision in the Hague Rules that the shipowner is debarred as a matter of law from relying on an exception unless he proves absence of negligence on his part. But he does have to prove that the damage was caused by an excepted peril or excepted cause, and in order to do that he may in a particular case have to give evidence excluding causation by his negligence. It was proved in this case that the shipowner was not negligent."
This passage is manifestly concerned with onus of proof. It does not say that if the carrier is negligent, he may nevertheless rely on an exception; rather the contrary, it stresses that the carrier must prove that the damage was caused by an excepted peril so that where it was negligence that caused the damage the exception will be of no avail. (at p151)

10. The appellant also relies upon what was said by their Lordships in Maxine Footwear Co. Ltd. v. Canadian Government Merchant Marine Ltd. (1959) AC 589, at pp 602-603 :
"Article III, rule 1, is an overriding obligation. If it is not fulfilled and the non-fulfilment causes the damage the immunities of article IV cannot be relied on. This is the natural construction apart from the opening words of article III, rule 2. The fact that that rule is made subject to the provisions of article IV and rule 1 is not so conditioned makes the point clear beyond argument."
The passage does, with respect, do no more than draw attention to the difference between rr. 1 and 2 of Art. III, only the latter being expressed to be subject to the provisions of Art. IV. It says nothing about the significance of the subjection of r. 2 to Art. IV. (at p152)

11. As against such support for the appellant's contention as these passages may be thought to provide, there is a long line of authority to the contrary. It holds that an exemption such as Art. IV r. 2 (c) provides cannot be relied upon where there has been what the cases commonly describe as negligence on the carrier's part, that is, breach of a term of the contract by the carrier, nowadays of a term requiring diligence or the exercise of care. Authority to this effect begins well before the Hague Rules. The cases include Steel v. State Line Steamship Co. (1877) 3 App Cas 72 ; The Xantho (1887) 12 App Cas 503 especially per Lord Herschell (1887) 12 App Cas, at pp 510-511 and per Lord Macnaghten (1887) 12 App Cas, at pp 516-517 , Hamilton Fraser &Co. v. Pandorf &Co. (1887) 12 App Cas 518 especially per Lord Halsbury (1887) 12 App Cas, at p 524 , and per Lord Watson (1887) 12 App Cas, at p 526 ; The Glendarroch (1894) P 226, at pp 231-234 especially per Lord Esher M.R. In Paterson Steamships Ltd. v. Canadian Co-operative Wheat Producers Ltd. (1934) AC 538, at p 545 , Lord Wright described the position before adoption of the Hague Rules as being one in which "If then goods were lost (say) by perils of the seas, there could still remain the inquiry whether or not the loss was also due to negligence or unseaworthiness. If it was, the bare exception did not avail the carrier." (at p152)

12. The appellant agrees that this was so but contends that, with the advent of the Hague Rules, which it says forms an exclusive code, a quite different situation arose as is shown by the opening words of r. 2 of Art. III. The post-1924 authorities do not bear this out. In particular, they continue to treat proof of a breach of those obligations imposed on a carrier by Art. III, r. 2 as denying to the carrier immunities such as those afforded by Art. IV 2 (c), the perils of the sea exclusion. Many do so by reference to what Tetley, in his Marine Cargo Claims, 2nd ed. (1978), describes, at pp. 54-55, as the order of proof which prevails in all Hague Rules cargo claims: a cargo owner must prove his loss, the carrier may then establish facts entitling him to rely upon exculpatory clauses, of which peril of the sea is one, but the cargo owner may then nevertheless succeed by proof of negligence, for example, proof of improper stowage. (at p153)

13. Soon after the adoption of the Hague Rules, Viscount Sumner spoke of this order of proof in a case not in itself involving the Hague Rules, F. C. Bradley &Sons Ltd. v. Federal Steam Navigation Co. Ltd. (1927) 27 DLR 395, at p 396 but which, in the same year, Wright J. described as summing up "principles equally relevant" to the Hague Rules - Grosse Millerd v. Canadian Government Merchant Marine Ltd. (1927) 2 KB 432, at p 437 . What Wright J. said in that case about the onus of proof resting upon the carrier has been much criticized in later cases, but the disqualifying effect of proof of the carrier's negligence has remained a constant theme of the cases - Goodwin, Ferreira &Co. Ltd. v. Lamport &Holt Ltd. (1929) 34 L1L Rep 192, at pp 194-195 per Roche J.; Stag Line Ltd. v. Foscolo Mango &Co. (1932) AC 328 , a deviation case, especially per Lord Buckmaster (1932) AC, at p 335 , per Lord Atkin (1932) AC, at p 340 , per Lord Russell (1932) AC, at p 347 , and per Lord Macmillan (1932) AC, at p 348 ; the Paterson Steamships Ltd. Case (1934) AC 538 ; Canadian National Steamships v. Bayliss (1937) 1 DLR 545, at p 547 ; Svenska Traktor Akt. v. Maritime Agencies (Southampton) Ltd. (1953) 2 QB 295, at p 302 per Pilcher J.; Leesh River Tea Co. Ltd. v. British India Steam Navigation Co. Ltd. (1967) 2 QB 250, at p 271 per Sellers L.J. and per Salmon L.J. (1967) 2 QB at p 278 Three Canadian decisions supply very recent authority: Charles Goodfellow Lumber Sales Ltd v. Verreault, Hovington &Verreault Navigation Inc. (1971) 1 Lloyd's Rep 185, at p 188 ; Falconbridge Nickel Mines Ltd. v. Chimo Shipping Line (1973) 2 Lloyd's Rep 469, at p 473 ; and The Washington (1976) 2 Lloyd's Rep 453, at p 459 . (at p153)

14. These cases, while they may disclose interesting differences of view concerning what is a peril of the sea and where in particular cases the onus lies, are at one in treating the existence of a breach of the carrier's obligations, if relevant to the damage to the goods, as preventing successful reliance upon an excepted peril such as that of perils of the sea. None reveals that dramatic change in the carrier's position in this regard which the appellant contends occurred when the Hague Rules were adopted. Some indeed, such as Stag Line, especially at p. 340 per Lord Atkin and at p. 346 per Lord Russell, specifically advert to and deny it. The Court of Appeal has in the present case not only also denied it but has convincingly demonstrated why it has not occurred. (at p154)

15. To reject the appellant's contention is not to treat the opening words of Art. III, r. 2 as nugatory. As was pointed out on behalf of the respondents, the opening words of Art. III, r. 2 do have useful work to do quite apart from the role which the appellant's argument would assign them: their proper field of operation may be seen from an examination of the terms of r. 2 (a) and (b), and rr. 4, 5 and 6 of Art. IV. (at p154)

16. The two further features of the appellant's argument concerned its approach to causes of damage to the drums. It treated the heavy weather and the improper stowage as concurrent causes, each of which was an equally efficient cause of the damage to the drums. The appellant also contended that if both were indeed causes, the carrier could rely on one, the heavy weather, to invoke the exceptions, despite the existence of the other, the improper stowage. Now, what happened in this case was that the stage was set for damage to be suffered by the drums as soon as they had been stowed in the hold without adequate restraint. Were heavy weather to be encountered, they would break loose and suffer damage. In these circumstances what was said by Lord Wright in Smith, Hogg &Co. v. Black Sea and Baltic General Insurance Co. (1940) AC 997, at p 1004 is much in point. His Lordship there said of contracts for the carriage of goods by sea:
"From the nature of the contract, the relevant cause of the loss is held to be the unseaworthiness or the negligence as the case may be, not the peril of the sea, where both the breach of the fundamental obligation and the objective peril are co-operating causes. The contractual exception of perils of the seas does not affect the fundamental obligation, unless the contract qualifies the latter in express terms."
His Lordship went on to point out that if the carrier's negligent act is "a" cause of the damage, then that is enough to saddle the carrier with liability. He referred to the judgment of Scrutton L.J. in The Christel Vinnen (1924) P 208 and said (1940) AC, at p 1007 :
"The sole question, apart from express exception, must then be: 'Was that breach of contract "a" cause of the damage'. It may be preferred to describe it as an effective or real or actual cause though the adjectives in my opinion in fact add nothing. If the question is answered in the affirmative the shipowner is liable though there were other co-operating causes, whether they are such causes as perils of the seas, fire and similar matters, or causes due to human action, such as the acts or omissions of the master, whether negligent or not or a combination of both kinds of cause." (at p155)

17. Monarch Steamship Co. Ltd v. Karlshamns Oljefabriker A/B (1949) AC 196 , although again a case of unseaworthiness, is also much in point since the improper stowage in the present case was a condition which, like unseaworthiness, existed long before the happening of the damage to the cargo. Accordingly, while noting the observations of Devlin J. in Heskell v. Continental Express Ltd. (1950) 1 All ER 1033, at pp 1047 1048 , Lord Wright's views in this case, like those of his Lordship in Smith, Hogg (1940) AC 997 , can, I think, be treated as directly applicable. Lord Wright said in Monarch Steamship (1949) AC, at p 227 :
"But unseaworthiness as a cause, operates immediately whenever it comes into effect; it has until then only been dormant. The maxim causa proxima non remota spectatur is either meaningless or misleading until 'remota' and 'proxima' are defined. Thus unseaworthiness as a cause cannot from its very nature opeate by itself; it needs the 'peril' in order to evince that the vessel or some part or quality of it, is less fit than it should have been and would have been if it had been seaworthy, and hence the casualty ensues. A fitter ship would have passed through the peril unscathed. In this way unseaworthiness is a decisive cause or as it is called a dominant cause." (at p155)

18. To regard both of the causes in the present case as of equal effectiveness is therefore mistaken. The inadequate stowage was here the decisive or dominant cause, only waiting upon heavy weather before it might take effect. The damage to the drums was not such damage "arising or resulting from" a peril of the sea as Art. IV, r. 2 speaks of; the effective cause of that damage was the inadequate stowage. (at p155)

19. It only remains to refer to the trial judge's characterization of the heavy weather encountered by the vessel as a peril of the seas. This was a critical step in his Honour's analysis which, if departed from, would provide another and quite distinct ground upon which to uphold the dismissal of this appeal. The matter was not argued at all before the Court of Appeal and was dealt with quite briefly on this appeal. In Skandia Insurance Co. Ltd. v. Skoljarev (1979) 142 CLR 375 Mason J. has very recently examined in considerable detail the concept of perils of the sea but has done so exclusively in the context of marine insurance. The phrase has long been said in the English authorities to have the same meaning in bill of lading cases as it has in marine insurance. However it is equally well-established that the result of identifying an event or circumstance as such a peril will not be the same in each of the two cases; if accompanied by negligence on the part of an insured, that will usually be immaterial; but a carrier's accompanying negligent breach of duty may be critical. No doubt in neither need an event or circumstance be extraordinary for it to qualify as a peril of the sea. But whether or not, in bill of lading cases, it can qualify as a peril of the sea if it is foreseeable and could have been guarded against is a matter upon which there is modern conflict of authority, as reference to the discussion in the Goodfellow Lumber Sales Case (1971) 1 Lloyd's Rep 185 discloses. For present purpose I find it unnecessary to do more than expressly reserve my opinion on the issue, which the trial judge determined in a manner different from that of the Canadian Supreme Court in the last mentioned decision. (at p156)

20. I would dismiss this appeal. (at p156)

MASON AND WILSON JJ. In June 1972 the respondent's goods were shipped aboard the appellant's ship under a clean bill of lading for carriage from Sydney to Indonesia. While crossing the Great Australian Bight the vessel experienced heavy weather. Upon its arrival at the Port of Fremantle on 9 July 1972 it was discovered that the goods had broken adrift from their rope lashings and sustained extensive damage. (at p156)

2. The respondent sued the appellant in the Supreme Court of New South Wales claiming damages for negligence. The alleged negligence consisted of the failure to use due and proper care in the stowage of the goods. The appellant relied upon the exception contained in r. 2 (c) of Art. IV of the Hague Rules ("the Rules") contained in the Schedule to the Sea-Carriage of Goods Act 1924, asserting that the loss or damage to the goods arose from "perils dangers and accidents of the sea, namely heavy weather". The appellant contended that the heavy weather experienced during the voyage constituted a peril of the sea within the terms of the paragraph and that therefore it was not liable for the damage regardless of any negligence by it in stowing the goods. (at p156)

3. The learned trial judge (Yeldham J.) made certain findings of fact which included the following: -

"I am satisfied . . . that one of the causes of the damage to the cargo was the weather experienced, especially that on 8th July. I am also satisfied that, although it was not common to encounter weather of such intensity, even in the Great Australian Bight, nonetheless it was encountered from time to time and could not be described as unforeseeable or weather against which it was unnecessary to guard. I am satisfied also that the drums in question could have been so stowed as to withstand weather conditions of the type in fact encountered . . .
. . . for a voyage through the Great Australian Bight, the stowage of the goods was inadequate. . . . I find that improper stowage was a concurrent cause of the damage." (at p157)

4. In the result, his Honour held that the weather conditions did amount to a peril of the sea notwithstanding that they could have been foreseen and guarded against and that that peril together with the inadequate stowage of the goods was a concurrent cause of the damage. He held that it was not necessary that the exception upon which the appellant relied should have been the sole cause of the damage, and he therefore dismissed the claim. (at p157)

5. On appeal to the Court of Appeal of the Supreme Court, Samuels J.A., with Moffitt P. and Reynolds J.A. concurring, held that the Rules have not altered the common law principle that an exception in a bill of lading as to perils of the sea is not available where negligence of the carrier is established. Reynolds J.A. summed up the conclusion of the Court in the following words:
"Loss or damage does not arise or result from perils of the sea where negligence is a concurrent cause. Where negligence allows or facilitates the perils of the sea to inflict damage on cargo, then in all relevant respects the loss or damage arises or results from the negligence. The perils of the sea must be guarded against by the use of due care."
The appeal was allowed, and the appellant carrier now appeals by special leave to this Court. (at p157)

6. Mr. Beaumont, for the appellant, argued that the Court of Appeal fell into error in construing the Rules by reference to the common law principles relating to the carriage of goods by sea and in particular by reference to the proposition that the carrier could not excuse his liability for loss of or damage to cargo, by reliance upon an exception for perils of the sea, if the loss or damage was caused also by his negligence or breach of duty. He submitted that the Rules are a code which is intended to standardize and unify international practice, and that they constitute an exhaustive statement of the rights, immunities and liabilities of the parties. Alternatively, he argued that it is not permissible to import the particular common law principle as the Court of Appeal did because it is inconsistent with the Rules themselves. He argued that the carrier's obligation to "properly and carefully . . . stow . . . the goods carried" is qualified, because of the prefatory words to r. 2 of Art. III of the Rules, by the exemption from responsibility for any loss arising from a peril of the sea (Art. IV, r. 2 (c)). This result follows inescapably from the fact, in his submission, that the obligation in r. 2 of Art. III is "subject to" the immunities in Art. IV. (at p158)

7. The problem thus presented for resolution is in appearance a simple one, and it is surprising perhaps that it does not appear to have arisen expressly for determination in any court hitherto, despite the many decisions, to which we have been referred, on related aspects of the Rules. It may be noted that the underlying assumption in Blackwood Hodge (India) Private Ltd. v. Ellerman Lines Ltd. (1963) 1 Lloyd's Rep 454 appears to have been that negligence precludes reliance on any immunity to be gained from perils of the sea. (at p158)

8. We propose to leave the cases to one side for the time being and proceed to examine the appellant's case on the basis of the premise upon which it is based, namely that the common law principles are not relevant to the facts of this case, which falls to be determined simply on the proper construction of the Rules themselves. In arriving at its interpretation of Arts. III and IV of the Hague Rules the Court of Appeal relied very heavily on the antecedent common law, approaching the Rules on the footing that, unless their language indicated otherwise, they should not be regarded as altering existing principles of the English common law. The Court applied the traditional canon of construction that a statute will be held not to change the existing law unless it clearly evinces an intention so to do. However, we doubt whether it was appropriate to give quite so much weight to the antecedent law as the Court of Appeal did. As early as 1904 the Commonwealth enacted the Sea-Carriage of Goods Act, similar to the United States Harter Act of 1893, which had drastically limited the circumstances in which shipowners were permitted by the common law to limit their liability in respect of sea-carriage of goods from Australian ports. The 1904 Act was repealed by s. 3 of the Sea-Carriage of Goods Act 1924 which enacted the Hague Rules which were adopted by an international convention signed at Brussels in 1924. The Hague Rules are more favourable to shipowners and carriers than the regime previously introduced by the 1904 Act and the Harter Act. For this reason the substance of the Hague Rules was not adopted by the United States until the enactment of the Carriage of Goods by Sea Act of 1936. (at p159)

9. It has been recognized that a national court, in the interests of uniformity, should construe rules formulated by an international convention, especially rules formulated for the purpose of governing international transactions such as the carriage of goods by sea, "in a normal manner, appropriate for the interpretation of an international convention, unconstrained by technical rules of English law, or by English legal precedent, but on broad principles of general acceptation", to repeat the words of Lord Wilberforce in James Buchanan &Co. Ltd. v. Babco Forwarding &Shipping (U.K.) Ltd. (1978) AC 141, at p 152 ; see also Stag Line Ltd. v. Foscolo, Mango &Co. Ltd. (1932) AC 328, at p 350 . (at p159)

10. It is important that we should adhere to this approach when we are interpreting rules which have been formulated for the purpose of regulating the rights and liabilities of parties to international mercantile transactions where great store is set upon certainty and uniformity of application. (at p159)

11. To say this is not to assert that we should exclude from our consideration of the rules settled by an international convention the meaning which has been consistently assigned by a national court to words and expressions commonly used in the documentation by which international trade is transacted, when the convention, in seeking to regulate the rights and liabilities of parties to international trading transactions, uses those words and expressions. There is a high probability that when such words and expressions have been incorporated in a convention, they have been incorporated with knowledge of the meaning which has been given to them by national courts. Nor do the principles of interpretation of an international convention exclude recourse to the antecedent municipal law of nations for the purpose of elucidating the meaning and effect of the convention and the new rules which it introduces. It would be extremely difficult to interpret the new rules as if they existed in a vacuum without taking into account antecedent municipal law and the problems which its application generated. However, in resorting to antecedent municipal law we need to recollect that it is the language of the Hague Rules that we are expounding, the antecedent law providing a background for that exposition by enabling us more readily to gauge the sense and direction of the new rules which the convention introduces. (at p160)

12. It is convenient to set out the relevant provisions of the Rules:
"Article II
Risks
Subject to the provisions of Article VI, under every contract of carriage of goods by sea, the carrier, in relation to the loading, handling, stowage, carriage, custody, care and discharge of such goods, shall be subject to the responsibilities and liabilities, and entitled to the rights and immunities hereinafter set forth.
Article III
Responsibilities and Liabilities
1. The carrier shall be bound before and at the beginning of the voyage, to exercise due diligence to -
(a) make the ship seaworthy;
(b) properly man, equip and supply the ship; and
(c) make the holds, refrigerating and cool chambers, and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage and preservation.
2. Subject to the provisions of Article IV, the carrier shall properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried.
. . .
8. Any clause, covenant or agreement in a contract of carriage relieving the carrier of the ship from liability for loss or damage to or in connexion with goods arising from negligence, fault or failure in the duties and obligations provided in this Article or lessening such liability otherwise than as provided in these Rules, shall be null and void and of no effect.
A benefit of insurance or similar clause shall be deemed to be a clause relieving the carrier from liability.
Article IV
Rights and Immunities
1. Neither the carrier nor the ship shall be liable for loss or damage arising or resulting from unseaworthiness unless caused by want of due diligence on the part of the carrier to make the ship seaworthy, and to secure that the ship is properly manned, equipped and supplied, and to make the holds, refrigerating and cool chambers and all other parts of the ship in which goods are carried fit and safe for their reception, carriage and preservation in accordance with the provisions of paragraph 1. of Article III.
Whenever loss or damage has resulted from unseaworthiness, the burden of proving the exercise of due diligence shall be on the carrier or other person claiming exemption under the section.
2. Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from -
(a) act, neglect or default of the master, mariner, pilot or the servants of the carrier in the navigation or in the management of the ship; (b) fire, unless caused by the actual fault or privity of the carrier; (c) perils, dangers and accidents of the sea or other navigable waters;
(d) act of God;
(e) act of war;
(f) act of public enemy;
(g) arrest or restraint of princes, rulers or people, or seizure under legal process;
(h) quarantine restrictions;
(i) act or omission of the shipper or owner of the goods, his agent or representative;
(j) strikes or lock-outs or stoppage or restraint of labour from whatever cause, whether partial or general;
(k) riots and civil commotions;
(l) saving or attempting to save life or property at sea;
(m) wastage in bulk or weight or any other loss or damage arising from inherent defect, quality or vice of the goods;
(n) insufficiency of packing;
(o) insufficiency or inadequacy of marks;
(p) latent defects not discoverable by due diligence;
(q) any other cause arising without the actual fault or privity of the carrier, or without the fault or neglect of the agents or servants of the carrier, but the burden of proof shall be on the person claiming the benefit of this exception to show that neither the actual fault or privity of the carrier nor the fault or neglect of the agents or servants of the carrier contributed to the loss or damage. . . .
4. Any deviation in saving or attempting to save life or property at sea, or any reasonable deviation shall not be deemed to be an infringement or breach of these Rules or of the contract of carriage, and the carrier shall not be liable for any loss or damage resulting therefrom.
5. Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connexion with goods in an amount exceeding One hundred pounds per package or unit, or the equivalent of that sum in other currency, unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading.
This declaration if embodied in the bill of lading shall be prima facie evidence, but shall not be binding or conclusive on the carrier.
By agreement between the carrier, master or agent of the carrier and the shipper another maximum amount than that mentioned in this paragraph may be fixed, provided that such maximum shall not be less than the figure above named.
Neither the carrier nor the ship shall be responsible in any event for loss or damage to or in connexion with goods if the nature or value thereof has been knowingly misstated by the shipper in the bill of lading.
6. Goods of an inflammable, explosive or dangerous nature to the shipment whereof the carrier, master or agent of the carrier, has not consented, with knowledge of their nature and character, may at any time before discharge be landed at any place or destroyed or rendered innocuous by the carrier without compensation, and the shipper of such goods shall be liable for all damages and expenses directly or indirectly arising out of or resulting from such shipment.
If any such goods shipped with such knowledge and consent shall become a danger to the ship or cargo, they may in like manner be landed at any place or destroyed or rendered innocuous by the carrier without liability on the part of the carrier except to general average, if any." (at p162)

13. It is not necessary to have regard to Art. V beyond mentioning that it recognizes that a carrier may surrender all or any of his rights and immunities or he may increase any of his responsibilities and liabilities that are contained under the Rules. Likewise, Art. VI does not need to receive any special attention save to note that it allows for a limited contracting out of the obligations and immunities provided by the Rules but only in the case of special situations other than "ordinary commercial shipments made in the ordinary course of trade". (at p162)

14. Article II provides an important and relevant background to a consideration of Arts. III and IV in that it declares that the carrier in relation to the loading, handling, stowage, carriage, custody, care and discharge of goods pursuant to a contract of carriage of goods by sea "shall be subject to the responsibilities and liabilities, and entitled to the rights and immunities hereinafter set forth". The Article contemplates the dual operation, side by side, of responsibilities and liabilities on the one hand and rights and immunities on the other. (at p162)

15. Coming to Art. III, the appellant places reliance on the fact that while r. 2 opens with the words "Subject to the provisions of Article IV" there is no similar preface to r. 1. The distinction may be significant. On the one hand, it furnishes an expectation that the obligation imposed by r. 2 is to be qualified in some respects by the provisions of Art. IV. On the other hand, it also makes plain the intention that there is to be no qualification of the obligation imposed by r. 1, whereby the carrier is "bound . . . to exercise due diligence" to prepare the ship in the manner described. (at p162)

16. With regard to r. 2 of Art. III, the obligation is not expressed in terms of "due diligence"; it is to "properly and carefully" perform a wide range of operation, namely, load, handle, stow, carry, keep, care for and discharge the goods. In Albacora S.R.L. v. Westcott &Laurance Line Ltd. (1966) 2 Lloyd's Rep, at pp 63-64 , Lord Pearson makes several observations to the following effect about this rule: (1) there is a prima facie obligation under the rule which may be displaced or modified by some provision of Art. IV; (2) the obligation is not to achieve the desired result, that is, the arrival of the goods in an undamaged condition at their destination. It is an obligation to carry out certain operations properly and carefully; (3) the word "properly" adds something to "carefully", if "carefully" has a narrow meaning of merely taking care: the element of skill or sound system is required in addition to taking care; and (4) Art. IV contains many and various provisions, which may have different effects on the prima facie obligation arising under Art. III, r. 2. Several of their Lordships in Albacora accepted the proposition that the word "properly" adds something to "carefully", and that it carried the connotation of a sound system. In Gosse Millard v. Canadian Government Merchant Marine Ltd. (1927) 2 KB 432, at p 434 , Wright J. gave a larger scope to the words contained in this rule, assimilating it to the common law obligation to carry the goods safely. Lord Pearson in Albacora (1966) 2 Lloyd's Rep, at p 64 rightly disagreed with this construction, referring to Pyrene Co. Ltd. v. Scindia Navigation Co. Ltd. (1954) 2 QB 402, at pp 417-418 and to G.H. Renton &Co. Ltd. v. Palmyra Trading Corporation of Panama (1957) AC 149, at p 166, 169, 174 . It is not necessary for the purposes of this case to determine precisely the extent of the obligation. There is no doubt on the findings in this case that the appellant failed to properly and carefully stow the goods, and was therefore prima facie in breach of the obligation imposed, "subject to Article IV", by Art. III, r. 2. (at p163)

17. The appellant argued that it is not responsible for the damage because it resulted from a peril of the sea (Art. IV, r. 2 (c)). But is this an accurate statement of the findings of the learned trial judge? Those findings were that the goods were not adequately stowed, that the ship encountered heavy weather which constituted a peril of the sea, that if the goods had been properly stowed the damage would not have occurred, and that the negligence of the carrier and the peril of the sea were concurrent causes of the damage. It seems to us that an accurate reflection of these findings requires one to treat the two concurrent causes of the loss as inseparable, and therefore joint. The loss would not have occurred but for the faulty stowage, but on the other hand, the faulty stowage did not cause the loss by itself. On this view, and treating the matter strictly as a matter of construction of the rule, it cannot be said that the damage resulted from a peril of the sea, and the appellant fails. The conclusion is strengthened by the consideration that on the findings of the trial judge there would have been no loss if it had not been for the negligence of the carrier. (at p164)

18. But let us take a broader view, testing the proposition by reference to other paragraphs of Art. IV, r. 2. It seems to us that the effect of the appellant's argument is that the Rules reflect the intention that even though a carrier has occasioned damage to goods through his negligence in circumstances which prima facie constitute a breach of the obligation imposed by Art. III, r. 2, nevertheless he will be relieved of responsibility for that damage in every case except where the damage results from - (i) fire caused by the actual fault or privity of the carrier (Art. IV, r. 2 (b)); (ii) latent defects in the goods which were discoverable by due diligence (Art. IV, r. 2 (p)); or (iii) any cause other than those listed in Art. IV, rr. 1, 2 (a) to (p) inclusive, which is occasioned by the actual fault or privity of the carrier, or the fault or neglect of the agents or servants of the carrier (r. 2 (q)). (at p164)

19. With great respect, we think that such an extraordinary result has only to be stated to suggest that the argument is untenable. It would denude the obligation imposed by Art. III, r. 2 of much of its substance. There is a more persuasive answer ready to hand to explain why Art. IV, r. 2 does not expressly preserve liability for negligence in all cases. It is that pars. (c) to (o) inclusive, with the exception of (1), are all matters which in themselves are beyond the control of the carrier or his servants. Any reference in that context to negligence is inappropriate, because they are events which of their nature occur independently of negligence on the part of the carrier. For example, one would not expect to see the rule relieve the carrier from responsibility for damage resulting from "act of God, unless caused by the fault or neglect of the carrier, his agents or servants". The remaining paragraphs of r. 2 carry their own explanation. Paragraph (a) has its origin in s. 3 of the Harter Act, and has attracted a particular history (cf. Gosse Millerd (1929) AC 223, at p 230, 236 . Paragraph (b) relates to fire, and reflects its own particular statutory history (see the Merchant Shipping Act, 1894 (U.K.), s. 502). Paragraph (1) deals with deviation to save life and property, and receives fuller treatment in Art. IV, r. 4. Paragraph (q) is of the greatest assistance in the task of construction, because in our opinion it expresses the fundamental scheme of the Rules. That scheme is to impose certain responsibilities and liabilities on the carrier of goods by sea, from which he cannot contract out (cf. Art. III, r. 8), but to give him immunity in respect of loss or damage caused otherwise than by negligence for which he is responsible, save in the special cases to which we have referred. To the extent to which Art. III, r. 2, by using the word "properly" imposes on the carrier a more onerous duty than an absence of negligence then clearly to that extent the immunities described in Art. IV, r. 2 operate to qualify the liability otherwise resting on the carrier; indeed, if this is not the case then as Temperley points out in his monograph, Carriage of Goods by Sea Act 1924, 3rd ed, p. 48, par. (q) is not an immunity at all, for it would do no more than shift the onus of proof on to the carrier. On the other hand, if such a line of reasoning seeks to extract a greater symmetry of purpose than the Rules viewed in their entirety will admit, then the proper observation is simply that it must not be thought that the effect of the prefatory words to Art. III, r. 2 is to compel some impact on the scope and operation of the obligation imposed by that rule from every provision in Art. IV. Ample justification for the preface is to be found in the presence in Art. IV of r. 2 (a) and (b), and rr. 4, 5 and 6. Each of these provisions adds a significant qualification to either the scope of the obligation or the consequences of a breach. There is then nothing surprising in the fact that those paragraphs of Art. IV, r. 2 which do not depend on any conduct of the carrier, his agents or servants, have nothing to say to Art. III, r. 2. Other rules in Art. IV also provide the carrier with important immunities: the right to deviate in certain circumstances (r. 4), the right to deal with dangerous goods (r. 6), and a limitation on the quantum of damage for which he is liable (r. 5). (at p165)

20. It follows then, in our opinion, that the question whether the carrier is entitled to rely upon Art. IV, r. 2 (c) to protect him from loss or damage will require to be answered by reference to all the circumstances of a particular case. While this would be so irrespective of the exception upon which the carrier relied, it is particularly so in the case of perils of the sea, a term which is apt to cover such a wide range of mishaps at sea. There is a difference between the Anglo-Australian conception of "perils of the sea" and the United States-Canadian conception. According to the latter, "perils of the sea" include losses to goods on board which are peculiar to the sea and "are of an extraordinary nature or arise from irresistible force or overwhelming power, and which cannot be guarded against by the ordinary exertions of human skill and prudence": The Guilia (1914) 218 F 744 , adopting Story on Bailments, s. 512 (a). In the United Kingdom and Australia it is not necessary that the losses or the cause of the losses should be "extraordinary" (Carver, Carriage by Sea, vol. 1, 12th ed. (1971), s. 161; Skandia Insurance Co. Ltd. v. Skoljarev (1979) 142 CLR 375, at pp 386-387 ). Consequently sea and weather conditions which may reasonably be foreseen and guarded against may constitute a peril of the sea. (at p166)

21. What is important for present purposes is that Story's description of "perils of the sea" excludes losses which could be avoided by the carrier's skill and prudence. Despite the broader concept of "perils of the sea" which prevailed in the United Kingdom and Australia a similar result was achieved in cases in which the loss or damage to the goods brought about by the action of the sea would not have occurred but for negligence on the part of the carrier or those for whom he was responsible. It was held, looking beyond the proximate cause, that the effective cause of loss was the carrier's negligence and that accordingly he could not take advantage of the "perils of the sea" exception in the bill of lading (The "Xantho" (1887) 12 App Cas 503, at p 510 ; Hamilton, Fraser &Co. v. Pandorf &Co. (1887) 12 App Cas 518, at p 525 ). The United States decisions turn on a narrower concept of "perils of the sea" whereas the English decisions turn rather on the issue of causation, looking more to the requirement that the exception is for loss or damage which results from or arises from "perils of the sea". But in each case the decisions give effect to the language of the bills of lading that constituted the contract of carriage. (at p166)

22. Essentially the question which now arises under the Hague Rules is very similar to the question which arose at common law in the United Kingdom and the United States. When cargo is lost or damaged by the action of the sea and the loss or damage could be avoided by reasonable care on the part of the carrier, would it fall within the "perils of the sea" exception and does it now fall within the Art. IV, r. 2 (e) immunity? The answer given by the courts in the United Kingdom and the United States reflects the settled meaning and effect which were accorded to the language traditionally employed in bills of lading. The language employed in Art, IV, r. 2 is the same. It speaks of "loss or damage arising or resulting from . . . (c) perils . . . of the sea . . . ". (at p167)

23. Resort to the United Kingdom decisions confirms this interpretation of the Rules: Gosse Millerd v. Canadian Government Merchant Marine Ltd. (1929) AC 223, at p 230 ; Silver v. Ocean Steamship Co. Ltd. (1930) 1 KB 416, at p 435 ; Paterson Steamships Ltd. v. Canadian Co-operative Wheat Producers Ltd. (1934) AC 538, at p 548 ; Stag Line Ltd. v. Foscolo, Mango &Co. Ltd. (1932) AC 328 . Further confirmation is provided by the United States decisions on the Carriage of Goods by Sea Act 1936, s. 1304 (2) (c); they turn partly on the North American concept of "peril of the sea" to which we have referred - see International Produce Inc. v. S.S. "Frances Salman" (1975) 2 Lloyd's Rep 355, at pp 365-366 . But they produce the same result. (at p167)

24. It remains for us to mention the reliance by the appellant on the decision of the House of Lords in Albacora. As we have already made clear, the essence of Mr. Beaumont's argument is that the fact of negligence by the carrier is irrelevant in a case where the carrier can establish that a peril of the sea was a contributing or concurrent cause of the damage. In such a case the carrier is entitled to the full benefit of the immunity conferred by Art. IV, r. 2. Mr. Beaumont found support for his submission in the following passage in the judgment of Lord Pearson in Albacora (1966) 2 Lloyd's Rep, at p 64 :
"There is no express provision, and in my opinion there is no implied provision in the Hague Rules that the shipowner is debarred as a matter of law from relying on an exception unless he proves absence of negligence on his part. But he does have to prove that the damage was caused by an excepted peril or excepted cause, and in order to do that he may in a particular case have to give evidence excluding causation by his negligence. It was proved in this case that the shipowner was not negligent."
With respect we think that the appellant misconceives the thrust of the observation of Lord Pearson. The key to the statement is to be found in the phrase "unless he proves absence of negligence on his part". His Lordship in our opinion is dealing with the question of onus of proof and taking up a position in opposition to the much debated statement by Wright J. in Gosse Millard (1927) 2 KB 432, at pp 434-436 , which is described in one of the texts as "heresy" (cf. Carver, Carriage by Sea, 12th ed. (1971) vol. 1, par. 266A). The point was of no relevance in Albacora because, as his Lordship observes, it was proved in the case that the shipowner was not negligent; nor is it relevant in this case because it has been proved that the shipowner was negligent. We may say, in passing, that we agree with Samuels J.A. in the Court of Appeal when he points out that the correct sequence of pleading is set out in the judgment of Lord Esher in The Glendarroch (1894) P 226, at pp 231, 233 . We are unable to draw any support from Lord Pearson's statement for the proposition advanced for the appellant. (at p168)

25. For these reasons, the appellant, in our opinion, has failed to make out its case. (at p168)

26. We would dismiss the appeal. (at p168)

AICKIN J. I have had the advantage of reading the joint reasons for judgment prepared by Mason and Wilson JJ. with which I am in full agreement. There is nothing that I can usefully add. I would therefore dismiss the appeal. (at p168)

Orders

Appeal dismissed with costs.

Cross-appeal dismissed with costs.