CHAPTER 15

DUE DILIGENCE TO MAKE THE VESSEL SEAWORTHY

INDEX I. Introduction

1) Due diligence 2) Definition of due diligence 3) Definition of seaworthiness 4) Due diligence and seaworthiness the apparent dilemma

II. Burden of Proof

1) Introduction 2) Carrier must first prove due diligence 3) American decisions on burden of proof 4) Proving due diligence and seaworthiness 5) Burden of proof and incompetence of crew

III. Before and at the Beginning of the Voyage

1) The basic principle 2) The theory of stages 3) Different cargoes may have different voyages

IV. Due Diligence in Respect of the Loss V. Due Diligence in Respect of the Voyage and the Cargo VI. Seaworthiness and Cause of the Loss

1) Carrier must prove the cause 2) When the cause is unknown 3) When the cause is uncertain or complex 4) Lack of due diligence and another cause

VII. Seaworthiness and Fundamental Breach

1) The Hague Rules 2) The Hague/Visby Rules

VIII. Examples of Seaworthiness

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1) The hull - seaworthiness 2) Hatches and vents seaworthiness 3) Ships generators and engines seaworthiness 4) Pumps, pipes and lines seaworthiness 5) Navigational equipment seaworthiness 6) Radar seaworthiness 7) Seaworthiness and competent crew 8) Stowage and seaworthiness

a) Poor stowage and instability of the ship b) Poor stowage and direct damage to cargo

9) Improper ballasting, cleaning of holds, refrigeration and heating 10) Lighters and seaworthiness 11) Containers and seaworthiness 12) Ships subject to arrest seaworthiness

IX. Examples of Due Diligence X. Due Diligence and Delegation XI. Diligence of the Delegate XII. Modern Methods of Seaworthiness and Due Diligence

1) The advances of science 2) Every dog is allowed one bite theory

XIII. Due Diligence and France

1) The former Law of April 2, 1936 2) The domestic Law of June 18, 1966 3) Burden of proof due diligence domestic Law 4) International carriage - France

XIV. The Hamburg Rules XV. The International Safe Management (I.S.M.) Code and Seaworthiness

1) The I.S.M. Code adoption and implementation 2) I.S.M. Code summary 3) I.S.M. Code relevance to seaworthiness 4) I.S.M. Code and seaworthiness conclusion

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CHAPTER 15

DUE DILIGENCE TO MAKE THE VESSEL SEAWORTHY

I. Introduction 1) Due diligence Due diligence to make a vessel seaworthy in respect of a loss is one of the most controversial concepts in the Hague or Hague/Visby Rules. Before the advent of the Rules, the obligation of the carrier to make the vessel seaworthy was absolute; it was not sufficient to exercise due diligence.1 Art. 3(1) of the Hague and Hague/Visby Rules reads:

"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;

"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."

The due diligence provision of art. 3(1) is of public order, in virtue of art. 3(8) and cannot be contracted out of.2 Due diligence under art. 3(1) is similar, but not identical, to the exculpatory exception at art. 4(2)(p) "Latent defects not discoverable by due diligence."3 2) Definition of due diligence Due diligence to make the vessel seaworthy may be defined as a genuine, competent and reasonable effort of the carrier4 to fulfill the obligations set out in subparagraphs (a), (b) and (c)

1 Riverstone Meat Co Pty. Ltd. v. Lancashire Shipping Co. Ltd. (The Muncaster Castle) [1961] A.C. 807 at pp. 871-872, [1961] 1 Lloyd's Rep. 57 at p. 87 (H.L.); The Torenia [1983] 2 Lloyd's Rep. 210 at p. 217. 2 Bundesgerichtshof, February 28, 1983, [1984] ETL 342. 3 See Chap. 22, "Latent Defects", infra. 4 The carrier who owes the duty of due diligence has been held, in the United States, to include the non vessel-owning common carrier (NVOCC) who issues the bill of lading, without there being any requirement for the vessel

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of art. 3(1) of the Hague or Hague/Visby Rules.5 It is the diligence of the "reasonably prudent" carrier, as at the time of the relevant acts or omissions, and not in hindsight.6 The English Court of Appeal has held that the test of due diligence is whether the carrier, its servants, agents and independent contractors have exercised all reasonable skill and care to ensure that the vessel was seaworthy at the commencement of its voyage, namely, reasonably fit to encounter the ordinary incidents of the voyage....7 The French version of the Hague Rules (which is the official version) uses the words "diligence raisonnable". This illustrates that the diligence required is not absolute, but only reasonable.8 The French domestic Law of April 2, 19369 had no due diligence provision, while the Law of June 18, 1966,10 which replaced it, uses only the world "diligence", considering "diligence raisonnable" as an anglicism and redundant. 3) Definition of seaworthiness Seaworthiness may be defined as the state of a vessel in such a condition, with such equipment, and manned by such a master and crew, that normally the cargo will be loaded, carried, cared for and discharged properly and safely on the contemplated voyage.11 Seaworthiness therefore has two aspects: 1) the ship, crew and equipment must be sound and capable of withstanding the ordinary perils of the voyage;12 and 2) the ship must be fit to carry

operating carrier to ratify the bill. See All Pacific Trading v. Hanjin Lines 1991 AMC 2860 at p. 2861 (C.D. Cal. 1991), affd 7 F.3d 1427, 1994 AMC 365 (9 Cir. 1993), cert. denied 510 U.S. 1194, 1994 AMC 2997 (1994). 5 Grain Growers Export Co. v. Canada Steamship Lines Ltd. (1918) 43 O.L.R. 330 at pp. 344-345 (Ont. S.C. App. Div.), upheld (1919) 59 S.C.R. 643 (Supr. C. of Can.), defined due diligence as "not merely a praiseworthy or sincere, though unsuccessful, effort, but such an intelligent and efficient attempt as shall make it so [i.e. seaworthy], as far as diligence can secure it." See also C. Itoh & Co. (America) Inc. v. M/V Hans Leonhardt 719 F. Supp. 479 at p. 504, 1990 AMC 733 at p. 743 (E.D. La. 1989): such a measure of prudence, activity, or assiduity, as is properly to be expected from, and ordinarily exercised by, a reasonable and prudent man under the particular circumstances; not measured by any absolute standard, but depending on the relative facts of the special case. See also Tuxpan Lim. Procs. 765 F. Supp. 1150 at p. 1179, 1991 AMC 2432 at p. 2445 (S.D. N.Y. 1991): whatever a reasonably competent vessel owner would do under the circumstances. 6 The Subro Valour [1995] 1 Lloyd's Rep. 509 at p. 516. 7 The Kapitan Sakharov [2000] 2 Lloyds Rep. 255 at p. 266 (C.A.). See also The Eurasian Dream [2002] 1 Lloyds Rep. 719 at pp. 737 and 744: The exercise of due diligence is equivalent to the exercise of reasonable care and skill. Lack of due diligence is negligence. 8 See also Rechtbank van Koophandel te Antwerpen, October 17, 1995, [1995] ETL 130, defining reasonable diligence as normal care expected of the good father of a family and not exception care. See also Rechtbank van Koophandel te Gent, May 21, 1996 (The Adriano), [1996] ETL 688. 9 Journal officiel du 11 avril 1936. See Marine Cargo Claims, 1 Ed., 1965, at Appendix "E" for the text. 10 Law No. 66-420 of June 18, 1966 at arts. 21 and 27. 11 A similar definition of seaworthiness is to be found at art. 2063 c.c. (Qubec 1994): "At the beginning of the voyage and even before, the carrier is bound to exercise diligence to make the ship seaworthy, properly man, equip and supply it, and make fit and safe all parts of the ship where property is to be loaded and kept during the voyage." See also Canada Steamship Lines Ltd. v. Desgagn [1967] 2 Ex C.R. 234 at p. 244, which discusses art. 1675 of the former Qubec Civil Code (the Civil Code of Lower Canada of 1866) and the duties of the carrier under it. 12 F.C. Bradley & Sons. V. Federal Steam Navigation Co. (1926) 24 Ll. L. Rep. 446 at p. 454 (C.A. per Scrutton L.J.): The ship must have that degree of fitness which an ordinary owner would require his vessel to have at the commencement of the voyage having regard to all the probable circumstances of it., cited with approval in The

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the contract cargo.13 The Australian High Court has summarized seaworthiness as follows in Great China Metal Industries Co. Ltd. v. Malaysian International Shipping Corporation Berhad (The Bunga Seroja):14

"Article III, r. 1 therefore effectively imposes an obligation on the carrier to carry the goods in a ship which is adequate in terms of her structure, manning, equipment and facilities having regard to the voyage and the nature of the cargo."

Seaworthiness means many things -- a tight hull and hatches, a proper system of pumps, valves and boilers, and engines, generators and refrigeration equipment in good order. A seaworthy vessel must be equipped with up-to-date charts, notices to mariners and navigating equipment and the crew must be properly trained and instructed in the ship's operation and idiosyncrasies. Equipment must be properly labeled and diagrams must be available and posted. The ship must be bunkered and supplied for the voyage or diligent preparations must have been made in advance to obtain bunkers and supplies conveniently along the route.

Seaworthiness is concerned with the fitness of the vessel, rather than with the conduct of the shipowner. In The Fjord Wind, Clarke L.J. made the point clearly:15

...seaworthiness is concerned with the state of the vessel rather than with whether the owners acted prudently or with due diligence. The only relevance of the standard of the reasonably prudent owner is to ask whether, if he had known of the defect (my emphasis), he would have taken steps to rectify it.

4) Due diligence and seaworthiness - the apparent dilemma A seeming dilemma arises from the obligation to provide only due diligence to make the ship seaworthy. If due diligence has been exercised, it has been asked, how can there be unseaworthiness? MacKinnon L.J. put the question in Smith, Hogg & Co. v. Black Sea & Baltic General Insurance Co. Ltd.:16

Fjord Wind [2000] 2 Lloyds Rep. 191 at p. 197 (C.A. per Clarke L.J.); The Lendoudis Evangelos [2001] 2 Lloyds Rep. 304 at p. 306 (per Cresswell, J.), and The Eurasian Dream [2002] 1 Lloyds Rep. 719 at p. 736 (per Cresswell, J.) (enumerating the following aspects of seaworthiness: physical condition of the vessel and equipment; competence/efficiency of the master and crew; adequacy of stores and documentation; and cargoworthiness). 13 The Aquacharm [1982] 1 Lloyd's Rep. 7 at p. 11, cited with approval in The Good Friend [1984] 2 Lloyd's Rep. 586 at p. 593. See also The Kriti Rex [1996] 2 Lloyds Rep. 171 at p. 184. 14 (1998) 158 A.L.R. 1 at p. 25, [1999] 1 Lloyd's Rep. 512 at p. 527, 1999 AMC 427 at p. 459 (High C. of Aust. per McHugh J.). N.B. The Bunga Seroja must be read with caution, however, because the decision is flawed in concluding that a peril of the sea may exculpate the carrier even if it is expected. The judgment also ignores the delicate balance between due diligence, peril of the seas and care of the cargo under the Hague and Hague/Visby Rules. Finally, the High Court passed over the argument that once a peril has been determined to exist before and at the commencement of the voyage, the carrier is only duly diligent in preparing for that peril if it takes various measures, including, inter alia, avoiding the peril by a change of course, staying in port until the expected storm abates, etc. (This latter argument may not have been properly pleaded, however.) 15 [2000] 2 Lloyds Rep. 191 at p. 199 (C.A.).

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"The limitation and qualification of the implied warranty of seaworthiness, by cutting it down to use 'due diligence on the part of the shipowner to make the ship seaworthy,' is a limitation or qualification more apparent than real, because the exercise of due diligence involves, not merely that the shipowner personally shall exercise due diligence, but that all his servants and agents shall exercise due diligence..." (Emphasis added).

MacKinnon L.J. relied on and cited Scrutton on Charterparties:17

"[This variation will not be] of much practical value in face of the dilemma that must constantly arise on the facts. In most cases if the vessel is unseaworthy due diligence cannot have been used by the owner, his servant or agents; if due diligence has been used the vessel will in fact be seaworthy. The circumstances in which the dilemma does not arise (e.g. a defect causing unseaworthiness but of so latent a nature that due diligence could not have discovered it) are not likely to occur often." (Emphasis added).

The Court of Appeal, in The Fjord Wind,18 phrased the same idea very succinctly:

Putting the matter in simple terms, a ship should not be unseaworthy if proper care is taken;... Is there really a dilemma? Have the Hague and Hague/Visby Rules modified the pre-Hague Rules obligation of absolute seaworthiness? The answer is that there has been been a change, a lessening of the obligation, but that there really is no dilemma. Under the Hague and Hague/Visby Rules, the ship need not be seaworthy at all. There is no obligation of seaworthiness, absolute or otherwise.19 Nor is there an obligation to be absolutely diligent to make the ship seaworthy. There is only an obligation to a) exercise due diligence to make the ship seaworthy; b) before and at the beginning of the voyage; c) having regard to the voyage contemplated and the cargo carried; d) in respect of the loss; e) and the exercise of due diligence is also a pre-condition to proving one of the exculpatory exceptions of art. 4(2)(a) to (q). Absolute diligence, however, is not required, nor is absolute seaworthiness20 or (in fact) any seaworthiness.21

16 (1939) 64 Ll. L. Rep. 87 at p. 89 (C.A.), aff'd [1940] A.C. 997 at p. 1001, (1940) 67 Ll. L. Rep. 253 at p. 257 (H.L. per Lord Wright); cited in Riverstone Meat Co. Pty Ltd. v. Lancashire Shipping Co. Ltd. (The Muncaster Castle) [1961] A.C. 807 at pp. 839, 852 and 873, 1 Lloyd's Rep. 57 at pp. 69, 76 and 88 (H.L.). 17 14 Ed., 1939 at p. 110, cited in Smith, Hogg & Co. Ltd,, supra, at p. 89 in Riverstone Meat, supra, A.C. at p. 873, Lloyd's Rep. at p. 88. 18 [2000] 2 Lloyds Rep. 191 at p.205 (C.A. per Sir Murray Stuart-Smith), cited with approval by Cresswell, J in The Eurasian Dream [2002] 1 Lloyds Rep. 719 at p. 735, together with The Amstelslot [1963] 2 Lloyds Rep. 223 at p. 235 (H.L.). 19 C. Itoh & Co. (America) Inc. v. M/V Hans Leonhardt 719 F. Supp. 479 at p 504, 1990 AMC 733 at p. 743 (E.D. La. 1989), citing the third edition of this book at p. 371. 20 See., e.g., the United Kingdom's Carriage of Goods by Sea Act 1971, U.K. 1971, c. 19, sect. 3: "There shall not be implied in any contract for the carriage of goods by sea to which the [Hague/Visby] Rules apply by virtue of this Act

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On the other hand, it is correct that only a defect that is latent will relieve the carrier of liability, and such a defect is usually in the construction of the ship.22 II. Burden of Proof 1) Introduction There are five particularities with respect to the proving of due diligence. First, it is the carrier who has the burden of proving due diligence to make the vessel seaworthy; secondly, due diligence must be exercised only before and at the beginning of the voyage; thirdly, due diligence and seaworthiness are relevant only in respect of the loss; fourthly, seaworthiness is considered in relation to the voyage and the cargo concerned; and finally, the carriers obligation is not to exercise absolute diligence but merely reasonable diligence.

2) Carrier must first prove due diligence

Art. 4(1) in fine of the Hague and Hague/Visby Rules provides:

"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 this article."

More specifically, due diligence to make the vessel seaworthy in respect of the loss must be proven by the carrier before he may exculpate himself under art. 4(2) of the Hague and Hague/Visby Rules. This was clearly pointed out by the Privy Council, in Maxine Footwear Co., Ltd. v. Can. Government Merchant Marine,23 where Lord Somervell declared:

any absolute undertaking by the carrier of the goods to provide a seaworthy ship." See also The Eurasian Dream [2002] 1 Lloyds Rep. 719 at p. 736. 21 See The Kapitan Sakharov [2000] 2 Lloyds Rep. 255 at pp. 272-273 (C.A.), where although the ship was clearly unseaworthy because of the carriage of undeclared and dangerous cargo on deck, the carrier was found not liable for any lack of due diligence in respect of that carriage because it had no notice of it and no reasonable means of detecting the presence of the cargo in the container, which had been stuffed and sealed by the shipper. 22 Riverstone Meat Co. Pty. Ltd. v. Lancashire Shipping Co. Ltd. (The Muncaster Castle) [1961] A.C. 807 at p. 872, [1961] 1 Lloyd's Rep. 57 at p. 87 (H.L. per Lord Keith), holding that the carrier "...will be protected against latent defects, in the strict sense, in work done on his ship, that is to say, defects not due to any negligent workmanship of repairers or others employed by the repairers, and, as I see it, against defects making for unseaworthiness in the ship, however, caused, before it became his ship, if these could not be discovered by him, or competent experts employed by him, by the exercise of due diligence". See also The Torenia [1983] 2 Lloyd's Rep. 210 at p. 230: "This unseaworthiness was not latent nor was it undiscoverable by due diligence. Due diligence was not exercised. It follows that the defendants are liable."; BHP Trading Asia Ltd. v. Oceaname Shipping Ltd. (1996) 67 F.C.R. 211 at p. 229 (Fed. C. Aust.) See also Scrutton, 20 Ed., 1996 at p. 430. 23[1959] A.C. 589 at pp. 602-603, [1959] 2 Lloyd's Rep. 105 at p. 113 (P.C.), relied on by Thurlow J. in N.M. Paterson & Sons v. Robin Hood Flour Mills Ltd.(The Farrandoc) [1968] 1 Ex. C.R. 175 at p. 183 (Ex. Ct. of Can.) and by the New Brunswick Court of Queens Bench in Beattie (R.K.) Ltd. v. CN Marine Inc. (1986) 74 N.B.R.(2d) 221 at p. 229, 183 A.P.R. 221 at p. 229 (N.B. Q.B.). See also The Good Friend [1984] 2 Lloyd's Rep. 586 at pp. 588 and 593; The Happy Ranger [2002] 2 Lloyds Rep. 357 at p. 364 (C.A.).

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"Article III, rule 1, is an overriding obligation. If it is not fulfilled and the non-fulfilment causes the damage the immunities of articles 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 same position was reiterated in Great China Metal Industries Co. Ltd. v. Malaysian International Shipping Corporation Berhad (The Bunga Seroja):24

"Article III imposes a positive obligation on the carrier to exercise due diligence to make the ship seaworthy. This obligation is an overriding obligation which is not subject to the exceptions to liability listed in Art. IV r. 2."

Besides the very strong dictum of Lord Somervell in Maxine Footwear and the opening words of art. 3(2) of the Rules, there is a general rule of proof that the person who has the evidence available to it should make that proof. It is the carrier who knows the condition of the ship before and at the beginning of the voyage and should make that proof.

The overriding nature of the carrier's due diligence obligation was reaffirmed in The Fiona, where a shipowner sought to recover from a shipper the indemnity contemplated by art. 4(6) of the Rules, in respect of expenses and damages arising from the shipment by the shipper of dangerous cargo which had caused an explosion on the vessel just prior to discharge. In first instance, Judge Diamond, Q.C. held:25

"It would be wholly contrary to the scheme of the rules and likewise inconsistent with equity and commercial common sense that a carrier should be entitled to destroy dangerous goods without compensation and without liability except to general average if the cause of the goods having to be destroyed was a breach by the carrier of his obligations as to seaworthiness. The exceptions in art. IV, r. 6 are clearly in my judgment subject to the performance by the carrier of his overriding obligation set out in art. III, r. 1. So also in my judgment is the right to an indemnity conferred by the first paragraph of the rule." (Emphasis added)

On appeal, Hirst L.J. upheld the trial judge, stating that he had rightly relied on Maxine Footwear and adding:26

"...art. III, r. 1 is the overriding article, and ... seeing that the shipowners were in breach of their obligations under art. III, r. 1 to exercise due diligence to make the

24 (1998) 158 A.L.R. 1 at p. 24, [1999] 1 Lloyd's Rep. 512 at p. 526, 1999 AMC 427 at p. 458 (High C. of Aust. per McHugh J.), citing both Maxine Footwear Co. Ltd. v. Can. Government Merchant Marine Ltd., supra, and Paterson Steamships Ltd. v. Canadian Co-operative Wheat Producers Ltd. [1934] A.C. 538 at p. 548, (1934) 49 Ll. L. Rep. 421 at p. 428 (P.C.). See also The Bunga Seroja, ibid., 158 A.L.R. at p. 43, Lloyd's Rep. at p. 537, 1999 AMC at p. 484 (per Kirby J.), citing Shipping Corp. of India Ltd. v. Gamlen Chemical Co. (Australasia) Pty. Ltd. (1980) 147 CLR 142 at p. 152 (High C. of Aust.). 25 [1993] 1 Lloyd's Rep. 257 at p. 286. 26 [1994] 2 Lloyd's Rep. 506 at p. 519 (C.A.). See also The Kapitan Sakharov [2000] 2 Lloyds Rep. 255 at p. 270 (C.A.), cited with approval in The Happy Ranger [2002] 2 Lloyds Rep. 357 at p. 364 (C.A.).

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ship seaworthy, they are not entitled to invoke the indemnity under art. IV, r. 6." (Emphasis added).

In general it has been held in England and other British Commonwealth countries that the carrier must first prove the exercise of due diligence before proving one of the exculpatory exceptions.27 In fact, nine years before the decision of the Privy Council in Maxine Footwear, Angers J. said in Toronto Elevators, Ltd. v. Colonial Steamships Ltd.:28

"The primary obligation placed upon the carrier before he can take advantage of one of the exceptions provided by article IV, rule 2 is the exercise of due diligence."

The principle was reiterated by the Supreme Court of Israel in 1998 in Zim Israel Navigation Ltd. v. The Israeli Phoenix Assurance Company Ltd. (The Zim-Marseilles),29 where Matza J., citing with approval the Supreme Court of Canadas decision in Goodfellow Lumber Sales Ltd. V. Verreault,30 held:

...It should be noted that in the Charles Goodfellow case, which was mentioned above, it was expressly held that a carrier which seeks to be exempted from liability by contending that the loss was caused by reason of perils of the sea must prove that prior to the voyage it was seaworthy, or at the least that he acted with due diligence to prepare it for the voyage. This means that the defence of the perils of the sea may be relied on by a carrier only if he showed that the loss was in fact caused as a result of the materialisation of the perils of the sea. The burden to prove the causal connection between the peril of the sea and the damage includes also the negation of the nearest alternative reason for the damage being caused, which is the carriers breach of his obligation to prepare the ship for the voyage.

Nevertheless, some English and Commonwealth courts have put the burden of proving unseaworthiness on the cargo claimant. This theory is expressed by Nol J. in N.M. Paterson & Sons Ltd. v. Robin Hood Flour Mills, Ltd. (The Farrandoc).31 Nol J. suggests the following as the proper order of proof in a cargo case:32 a) The cargo claimant proves his loss or damage in the hands of the carrier (equivalent to Chaps. 8 to 13 of this text). 27 Smith, Hogg & Co. Ltd. v. Black Sea & Baltic General Ins. Co. Ltd. [1940] A.C. 997 at p. 1007, (1940) 67 Ll. L. Rep. 253 at p. 260 (H.L. per Lord Wright): "... the right to rely on the exception of negligence was conditional on due diligence on the part of the owners to make the ship seaworthy, which the owners had failed to exercise." Carver, 13 Ed., 1982, at para. 499, also considers due diligence as a prerequisite, as does Scrutton, 20 Ed., 1996 at p. 443. See also The Eurasian Dream [2002] 1 Lloyds Rep. 719 at pp. 736 and 738-739. 28 [1950] Ex. C.R. 371 at p. 375. See also Thurlow J. in N.M. Paterson & Sons. v. Robin Hood Flour Mills Ltd (The Farrandoc). [1968] 1 Ex. C.R. 175 at p. 183. 29 [1999] ETL 535 at p. 549. 30 [1971] S.C.R. 522, [1971] 1 Lloyds Rep. 185. 31 [1968] 1 Ex. C.R. 175 at p. 188. 32 Ibid. at pp. 188-189.

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b) The carrier must prove the cause of the loss (equivalent to Chap. 14 of this text). c) The carrier must prove one of the exculpatory exceptions of art. 4(2)(a) to (q) (Chaps. 16 to 23 of this text). d) Then the cargo claimant must prove unseaworthiness and the carrier, presumably, must then prove due diligence to make the vessel seaworthy before and at the beginning of the voyage.33 My order of proof34 is as follows: 1) The cargo claimant proves his loss and damage in the hands of the carrier (see Chaps. 8 to 13 of this text).

2) The carrier must prove the cause of the loss (see Chap. 14 of this text). 3) The carrier must prove due diligence to make the ship seaworthy before and at the beginning of the voyage in respect of the loss (this Chapter). 4) The carrier must prove one of the exculpatory exceptions (see Chaps. 16 to 23 of this text). 5) The cargo claimant then attempts to prove lack of care of cargo (see Chaps. 24 to 27 of this text) or attempts to disprove the above evidence of the carrier, including lack of seaworthiness and lack of due diligence.

33 In The Bunga Seroja (1998) 158 A.L.R. 1 at p. 25, [1999] 1 Lloyd's Rep. 512 at p. 527, 1999 AMC 427 at pp. 459, McHugh J. of the High Court of Australia held: "If unseaworthiness is relied on, the cargo owner must prove that the loss or damage resulted from that unseaworthiness. Once that is proved the burden is on the carrier to prove that it exercised due diligence to make the ship seaworthy." This is also the approach also taken in Hiram Walker & Sons, Ltd. v. Dover Navigation Co., Ltd. (1950) 83 Ll. L. Rep. 84 at p. 89; Minister of Food v. Reardon Smith Line [1951] 2 Lloyd's Rep. 265 at p. 272; The Hellenic Dolphin [1978] 2 Lloyd's Rep. 336 at pp. 339 and 340; The Good Friend [1984] 2 Lloyd's Rep. 586 at p. 588; The Theodegmon [1990] 1 Lloyd's Rep. 52 at p. 54; The Fiona [1993] 1 Lloyd's Rep. 257 at p. 288, upheld without discussion of this point, [1994] 2 Lloyd's Rep. 506 (C.A.); The Toledo 1995] 1 Lloyds Rep. 40 at p. 50; The Apostolis [1997] 2 Lloyd's Rep. 241 at pp. 244 and 257 (C.A.); The Eurasian Dream [2002] 1 Lloyds Rep. 719 at p. 735. See also Scrutton, 20 Ed., 1996 at p. 442. For Canada, see also N.M. Paterson & Sons v. Robin Hood Flour Mills Ltd. (The Farrandoc) [1968] 1 Ex. C.R. 175 at p. 189, where, however, Nol J.'s order of proof seems unclear and where he seems to confuse burden of proof with order of proof.; A.R. Kitson Trucking Ltd. v. Rivtow Straits Ltd. (1975) 55 D.L.R. (3d) 462 at p. 466, [1975] 4 W.W.R. 1 at p. 6 (B.C. S.C.); and Kruger Inc. v. Baltic Shipping Co. (1989) 57 D.L.R. (4th) 493 at p. 502 (Fed. C.A.). 34 See Chap. 6, "The Burden and Order of Proof". See Paterson Steamships, Ltd. v. Canadian Co-operative Wheat Producers [1934] A.C. 538 at p. 545, (1934) 49 Ll. L. Rep. 421 at p. 427 (P.C.), a case involving the Canadian forerunner to the Hague Rules, where Lord Wright adopted the statement by Lord Sumner in F.C. Bradley & Sons, Ltd. v. Federal Steam Navigation Co. Ltd. (1927) 27 Ll. L. Rep. 395 at p. 396 (H.L.), a case involving the Australian forerunner to the Rules, that: "in strict law, on proof being given of their damaged condition on arrival, the burden of proof passed from the consignees to the shipowner to prove some excepted peril which relieved them from liability, and further, as a condition of being allowed the benefit of that exception, to prove seaworthiness at Hobart, the port of shipment, and to negative negligence or misconduct of the master, officers and crew with regard to the apples during the voyage and the discharge in this country." See also Hobhouse J. in The Torenia [1983] 2 Lloyd's Rep. 210 at p. 218: "If... in all cases where a structural defect in the ship has contributed to the loss, the carrier has in effect to prove that he had exercised due diligence to make the ship seaworthy, I find nothing surprising about that conclusion. Indeed, it suggests that common sense and the law are proceeding in step."

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6) Both parties then have various arguments available to them (see Chaps. 28 to 45).

It is noteworthy that Thurlow J., in N.M. Paterson & Sons Ltd. v. Robin Hood Flour Mills, Ltd. (The Farrandoc),35 disagrees with Nol J. and would seem to follow my order of proof, because he cites Lord Somervell in Maxine Footwear Co.36 as to art. 3(1) being an overriding obligation.37 More recent Canadian decisions have also applied my order of proof, particularly in respect of the carriers being required to prove the cause of the loss, due diligence and then one or more exculpatory perils.38 3) American decisions on burden of proof Some American cases on due diligence and the burden of proof seem confused and contradictory. It should first be noted that the American COGSA 1936, at sect. 3(2) does not contain the words "subject to the provisions of art. 4..." of which Lord Somervell spoke in Maxine Footwear. But the confusion seems to arise from the difference between the Harter Act and the COGSA. Under the Harter Act, due diligence to make the vessel seaworthy had to be proved in every respect,39 so that any failure in respect of due diligence precluded the carrier from invoking the Harter Acts exceptions.40 By comparison, under COGSA, which is the American version of the Hague Rules, due diligence need only be proved in respect of the loss, a causal link being required between the lack of due diligence and the cargo loss or damage.41 The Second Circuit, in Firestone Syn. Fibers Co. v. Black Heron,42 held that:

" the defense of error in the management of the ship is not conditioned, as it is under the Harter Act,..., on a showing of seaworthiness or due diligence to make the vessel seaworthy."

The Court relied on Clancy D.J. in Isbrandtsen Co. v. Federal Ins. Co.,43 but a study of this latter judgment indicates that Clancy D.J. really meant that due diligence need not be proved in every respect, but only in respect of the loss.44

35 [1968] 1 Ex. C.R. 175 at p. 183. 36 [1959] A.C. 589 at pp. 602-603. [1959] 2 Lloyd's Rep. 105 at p. 113 (P.C.). 37 [1968] 1 Ex. C.R. 175 at p. 183. 38 Canfor Ltd. v. The Federal Saguenay (1990) 32 F.T.R. 158 at p. 160 (Fed. C. Can. per Denault J.); Canastrand Industries Ltd. v. The Lara S [1993] 2 F.C. 553 at p. 575, (1993) 60 F.T.R. 1 at p. 16 (Fed. C. Can. per Reed J.), upheld without discussion of the question, (1994) 176 N.R. 31 (Fed. C.A.). See also Voest-Alpine Stahl Linz GmbH v. Federal Pacific Ltd. (1999) 174 F.T.R. 69 at pp. 74-75 (Fed. C. Can. per Bais J.). 39 46 U.S.C. Appx. 192: due diligence to make said vessel in all respects seaworthy.. (emphasis added). 40 The Isis 290 U.S. 333 at p. 351, 1933 AMC 1565 at p. 1577 (1933); U.S. v. Ultramar Shipping 685 F. Supp. 887 at p. 894, 1988 AMC 527 at p. 536 (S.D. N.Y. 1987), affd without opinion, 854 F.2d 1315, 1988 AMC 2408 (2 Cir. 1988). 41 46 U.S. Code Appx. 1304(1). See also U.S. v. Ultramar Shipping, supra, 685 F. Supp. at p. 894, 1988 AMC at p. 537. 42 324 F.2d 835 at p. 837, 1964 AMC 42 at p. 44 (2 Cir. 1963). 43 113 F. Supp. 357, 1952 AMC 1945 (S.D. N.Y. 1952), affirmed 205 F.2d 679, 1953 AMC 1033 (2 Cir. 1953). 44 Ibid., 113 F. Supp. at pp. 358-359, 1952 AMC at pp. 1946-1947, where it is stated that COGSA "does bind the carrier to exercise due diligence to make the ship seaworthy but the enjoyment of the stipulated exceptions to its liability is not conditioned on a breach of that duty except where breach of it is the cause of the loss."

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On the other hand, the Fifth Circuit, in L. Dreyfus Corp. v. 27,946 Long Tons of Corn,

held that error of management of the ship was not a defence under COGSA where the vessels engineer had lacked due diligence before the voyage commenced.45

The Ninth Circuit has also required the carrier to prove due diligence before permitting them to invoke the fire defence of sect. 4(2)(b) of COGSA.46 On the other hand, the Second, Fifth and Eleventh Circuits have concluded that proof of due diligence is not a condition precedent to the application of the fire exception.47 The Eastern District of Louisiana, in a Harter Act case, citing the third edition of this book, affirmed that the carrier may rebut the shippers prima facie case by proving that it used due diligence to make the vessel seaworthy and that the damage was due to an exception recognized by the Act.48

The result of the latter view on the order of proof is that after the cargo claimant proves his loss, the carrier must next prove either that due diligence was exercised before and at the commencement of the voyage or that the harm was caused by one of the exculpatory perils of sect. 4(2)(a) to (q).49 It is submitted that English and Canadian jurisprudence50 on due diligence as an overriding obligation should be followed as being clearer.51 45 830 F.2d 1321 at pp. 1327-1328, 1988 AMC 1053 at p. 1062 (5 Cir. 1987), invoking as authority a Harter Act decision, International Navigation Co. v. Farr & Bailey Mfg. Co. 181 U.S. 218 at p. 226 (1901). See also another Harter Act judgment, C. Itoh & Co. (America) Inc. v. M/V Hans Leonhardt 719 F. Supp. 479 at p. 503, 1990 AMC 733 at p. 743 note 27 (E.D. La. 1989), invoking the third edition of this book at p. 372, as well as The Wildcroft 201 U.S. 378 at p. 386 (1906). 46 Sunkist Growers, Inc. v. Adelaide Shipping Lines 603 F.2d 1327 at pp. 1335-1336 (9 Cir. 1979), cert. denied 444 U.S. 1012, 1980 AMC 2102 (1980). See, however, Complaint of Damodar Bulk Carriers 903 F.2d 675 at pp. 686-687, 1990 AMC 1544 at pp. 1560-1562 (9 Cir. 1990), limiting the application of Sunkist Growers in a manner bringing Ninth Circuit law closer to that of the Second and Fifth Circuits. 47 Complaint of Ta Chi Navigation (Panama) Corp., S.A. 677 F.2d 225 at p. 229, 1982 AMC 1710 at p. 1715 (2 Cir. 1982); Westinghouse Electric Corp. v. M/V Leslie Lykes 734 F.2d 199 at p. 206, 1985 AMC 247 at pp. 255-256 (5 Cir. 1985); Banana Services, Inc. v. M/V Tasman Star 68 F.3d 418 at p. 421, 1996 AMC 260 at p. 264 (11 Cir. 1995). 48 C. Itoh & Co. (America) Inc. v. M/V Hans Leonhardt 719 F. Supp. 479 at p. 502, 1990 AMC 733 at p. 739 (E.D. La. 1989). 49 See, e.g., Sony Magnetic Products Inc. of America v. Merivienti O/Y 863 F.2d 1537 at p. 1539, 1989 AMC 1259 at p. 1262 (11 Cir. 1989); Tenneco Resins, Inc. v. Davy International AG 886 F. 2d 211 at p. 213, 1990 AMC 401 at p. 405 (5 Cir. 1989); Sun Company Inc. v. S.S. Overseas Arctic 27 F.3d 1104 at p. 1109, 1995 AMC 57 at p. 62 (5 Cir. 1994); Pacific Employers Insurance Co. v. M/T Iver Champion 1996 AMC 2535 at p. 2556 (E.D. La. 1996); Hale Container Line, Inc. v. Houston Sea Packing Co., Inc. 137 F. 3d 1455 at p. 1468, 1999 AMC 607 (summ.) (11 Cir. 1998). 50 Maxine Footwear Co., Ltd. v. Can. Government Merchant Marine [1959] 2 Lloyd's Rep. 105, [1959] A.C. 589 (H.L.); Toronto Elevators Ltd. v. Colonial Steamship Ltd. [1950] Ex. C.R. 371. 51 Bernstein Co. v. MS Titania 1955 AMC 2040 at pp. 2043-2044 (E.D. La. 1955) is another example of a confused American decision on due diligence. The reasoning is based on the difference between the Harter Act and the Hague Rules. Under the Harter Act, due diligence has to be proved in every respect, whether causally connected with the loss or not. Under the Hague Rules, due diligence has to be proved only the extent that the unseaworthiness causes the loss. In Judge Christenberry's words; "The carrier's burden does not extend to proving diligence to make the vessel seaworthy 'in all respects' not causally connected with the ensuing damage, as under the Harter Act." Having made this distinction, the judge seems to go further than he needs by stating that "the exemption of the carrier for an error of management in sect. 4(2) [of COGSA] is not conditioned on its first establishing due diligence

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In Mimi Limitation Procs.,52 the question of who has the burden of proving due diligence

to make the vessel seaworthy was considered in the light of the two theories enunciated above. The Court stated:

"Under either view it is clear... a carrier must at least establish one of the exculpating causes of sect. 4(2)."

This was not done and the Court added: "we need not explore here the further ramifications of that scheme..."53

4) Proving due diligence and seaworthiness Much of the confusion over the burden of proof with respect to due diligence arises from art. 4(1) which at its last sentence states:

"Whenever loss or damage has resulted from unseaworthiness the burden of proving the exercise of due diligence shall be on the carrier."

It has been argued that this means that the cargo claimant must first prove unseaworthiness in order to shift the burden to the carrier.54

It is submitted that the foregoing is incorrect for the following reasons: a) The rules are not silent. Art. 3(1), the first article on the duties of the parties under the Rules was termed by Lord Somervell "an overriding obligation".55 b) Art. 3(2), which deals with caring for cargo, makes these duties subject to art. 4, but art. 3(1) is not so subject.56

to make the vessel seaworthy at the beginning of the voyage." He refers to authorities: San Guiseppe 1941 AMC 315 at p. 319 (E.D. Va. 1941), Knauth, Ocean Bills of Lading, 4 Ed., 1953 at p. 168, and others, which support the contention that under COGSA, due diligence need not be proved in every respect. The authorities do not go as fas as Christenberrry D.J., however, and are not authority for his dictum. The U.S. Court of Appeals, 232 F.2d 771, 1956 AMC 754 (5 Cir. 1956) upheld the judgment, but on other grounds and did not discuss due diligence. 52 604 F.2d 254 at p. 262, 1979 AMC 1680 at p. 1690 (4 Cir. 1979). See also Northeast Petroleum v. Kyriakou Shipping 478 F. Supp. 558, 1982 AMC 1196 (D. Mass. 1979), which seems to suggest that the carrier has the burden of proving due diligence and an exculpatory exception. 53 The two theories reviewed in Mimi Lim Procs, ibid., are the one proposed in Marine Cargo Claims, 2 Ed., 1978 at pp. 153-154, the 3 Ed., 1988 at pp. 374-375, and this text and the theory that emerges from some American decisions. 54 See supra, section II(2), discussion surrounding Nol J.'s order of proof and other decisions cited there. For the United States, see Director General of India Supply Mission v. S.S. Maru 459 F.2d 1370 at p. 1372, 1972 AMC 1694 at p. 1697 (2 Cir. 1972), cert. denied 409 U.S. 1115, 1973 AMC 357 (1973); Quigley Co., Inc. v. M/V Safir 750 F. Supp. 790 at p. 792, 1990 AMC 2104 at p. 2107 (S.D. Tex. 1989); Tuxpan Lim. Procs 765 F. Supp. 1150 at p. 1175, 1991 AMC 2432 at p. 2437 (S.D. N.Y. 1991); Ballard Shipping, Lim. Procs 823 F. Supp. 68 at pp. 71-72, 1993 AMC 1428 atp. 1432 (D. R.I. 1993); Thyssen, Inc. v. S/S Eurounity 1994 AMC 393 at pp. 399 and 400 (S.D. N.Y. 1993), affd 21 F.3d 533, 1994 AMC 1638 (2 Cir. 1994). 55 Maxine Footwear [1959] 2 Lloyd's Rep. 105 at p. 113, [1959] A.C. 589 at pp. 602-603 (P.C.). 56 See discussion on Maxine Footwear relating to art. III, supra.

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c) The carrier has all the facts available to him to prove seaworthiness and due diligence while the cargo claimant has few, if any.57 It is agreed that the Rules are far from clear in this respect, but to put the burden first on the cargo claimant to prove unseaworthiness in virtue of art. 4(1), last sentence, is to ignore the construction of the Rules and the text of art. 3(1) and art. 3(2).58 Most courts solve the problem by calling on both parties to make what proof is available to them. Moreover, they usually consider (by inference) any incursion of seawater as prima facie evidence of unseaworthiness, thereby putting the burden of proving that due diligence was nevertheless exercised on the carrier by art. 4(1).59 Should the carrier fail to rebut the inference of unseaworthiness, liability will attach.60 To impose on the cargo claimant the initial burden of proving unseaworthiness is not logical because: a) The facts are not available to the cargo claimant; b) The carrier must prove the cause of the loss, which will entail proving the unseaworthiness if it was the cause; c) The carrier has the burden of proving due diligence to make the vessel seaworthy (see above) which entails evidence as to the seaworthiness. 5) Burden of proof and incompetence of crew

Incompetence on the part of the master or crew can consist of various shortcomings, including a disabling want of skill, a disabling want of knowledge, an inherent lack of ability, a lack of adequate training or instruction, a lack of knowledge about a particular vessel and/or its systems, a disinclination to perform the job properly, or a physical or mental disability or incapacity (e.g. drunkenness or illness) all of which matters are questions of fact, and which may be proved by only one incident. Nevertheless, one mistake does not necessarily render a crew member incompetent, and incompetence must be distinguished from negligence.61

57 See Wilson, 2 Ed., 1993 at p. 190, supporting this position. See also Metropolitan Coal Co. v. Howard 155 F.2d 780 at p. 783, 1946 AMC 1154 at p. 1158 (2 Cir. 1946 per Learned Hand C.J.); GTS Industries S.A. v. S/S Havtjeld 68 F.3d 1531 at p. 1535, 1996 AMC 232 at p. 236 (2 Cir. 1995). 58 See GTS Industries S.A. v. S/S Havtjeld 68 F.3d 1531 at p. 1535, 1996 AMC 232 at p. 237 (2 Cir. 1995), stressing the two hundred year old distinction which imposes the burden of proof of seaworthiness on the carrier in common carriage and on the shipper in private carriage (chartering). 59 BHP Trading Asia Ltd. v. Oceaname Shipping Ltd. (1996) 67 FCR 211 at p. 229 (Fed. C. Aust.); Wilson, 2 Ed., 193 at p. 190. 60 See, for example, The Torenia [1983] 2 Lloyd's Rep. 210 at p. 225. 61 See The Eurasian Dream [2002] 1 Lloyds Rep. 719 at pp. 736-737. See also The Star Sea [1997] 1 Lloyds Rep. 360 at p. 374 (C.A.), upheld [2001] 1 Lloyds Rep. 389 (H.L.) (a marine insurance decision on unseaworthiness).

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When a crewmember is incompetent and commits a negligent act, such as the master navigating erroneously62 or a second engineer opening the wrong valve and flooding the cargo instead of a ballast tank,63 the proof follows the same order as in any other claim. The carrier proves the cause of the loss and then proves that due diligence was exercised in the employment and training of the party concerned (e.g. that the master (or the second engineer) was carefully selected at the time of hiring and properly trained in the performance of his duties). The cargo claimant then attempts to prove that the officer in question was incompetent and that due diligence was not exercised in his employment and/or training. Thus in effect, both parties make proof on seaworthiness and due diligence to the best of their ability, but the initial and major burden or proof is on the carrier. That burden was described by Cresswell, J. in The Eurasian Dream,64 Cresswell, J. as obliging the carrier to show that it has exercised proper care in relation to: 1) the appointment of a generally competent master/crew (e.g. by inspecting the seamans documents, interviews and inquiries from previous employers to ensure that the person is reasonably fit to occupy the post to which he is appointed); and 2) the specific competence of the master in relation to the vessel and voyage in question. In this latter regard, mere reliance on certificates of competence is inadequate. Rather, the owners/managers must provide the master and crew with specific instruction and supervision, on an ongoing basis, in relation to the vessel and the voyage(s). III. Before and at the Beginning of the Voyage 1) The basic principle Due diligence need only be exercised "before and at the beginning of the voyage" (art. 3(1)). This is another way in which the obligation is not absolute. Maxine Footwear65 is the leading decision and is to the effect that due diligence must be exercised before loading of cargo has commenced and until the vessel weighs anchor or slips. In The Makedonia,66 "voyage" was held to mean the contractual voyage from the port of loading to the port of discharge, as declared in the appropriate bill of lading. The exact moment of the beginning of the voyage is difficult to determine. One gathers from the case law that it is when all hatches are battened down, visitors are ashore and orders 62 Ta Chi Lim. Procs. (Eurybates) 513 F. Supp. 155, 1981 AMC 2350 at p. 2358 (E.D. La. 1981). Gross error in navigation raised a presumption of incompetency which the shipowner had to rebut by showing due diligence in manning the ship. 63 N.M. Paterson & Sons Ltd. v. Robin Hood Flour Mills Ltd. (The Farrandoc) [1968] 1 Ex. C.R. 175, [1967] 2 Lloyd's Rep. 276, 1967 AMC 1451. 64 [2002] 1 Lloyd Rep. 719 at p. 738 per Cresswell, J., citing The Makedonia [1962] 1 Lloyds Rep. 316 at pp. 337-338; N.M. Paterson & Sons Ltd. v. Robin Hood Flour Mills, Ltd. (The Farrandoc) [1968] 1 Ex. C.R. 175, [1967] 2 Lloyds Rep. 276, 1967 AMC 1451, and Scrutton, 20 Ed., 1996 at p. 430. 65 Maxine Footwear Co., Ltd. v. Can. Government Merchant Marine [1959] 2 Lloyd's Rep. 105 at p. 113, [1959] A.C. 589 at p. 603; the Privy Council clearly indicates that the obligation is not merely to exercise due diligence at the beginning of the loading and at the beginning of the voyage, but during the whole period from the beginning of loading until sailing. 66 [1962] 1 Lloyd's Rep. 316 at pp. 329-330. See also The Anders Maersk [1986] 1 Lloyd's Rep. 483 at p. 486 (Hong Kong High Ct.).

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from the bridge are given so that the ship actually moves under its own power or by tugs or both. Thus it is submitted that the controversial decision in S.S.Del Sud.67 is correct. There the vessel, while leaving a dock with the assistance of a tug, was swung around and struck the dock. It was held that the voyage had commenced. When some act to make a vessel seaworthy, which can be done at sea or before the vessel sails, is properly planned to be done at sea, the vessel is not unseaworthy when she sails.68 When one vessel is substituted for another, due diligence must be exercised to make the substituted vessel seaworthy.69 Where the carrier purchases the ship from a former owner or a shipbuilder, the carrier is not liable for their lack of due diligence,70 but is liable for defects which it ought to have discovered by the exercise of due diligence, either personally or through competent experts, on or after the transfer of possession.71 2) The theory of stages The theory that the vessel must be seaworthy at each stage of the voyage for that stage of the voyage, is a pre-Hague Rules principle72 which surfaces from time to time, but which no longer applies, as art. 3(1) makes abundantly clear. In consequence, the carrier need only exercise due diligence to make the vessel seaworthy at the port where the cargo is loaded. Thus in Leesh River Tea Co. v. British India Steam Navigation Co. (The Chyebassa),73 storm valve cover plates were stolen at an intermediary port, and the Court of Appeal properly held that the vessel was seaworthy at the beginning of the voyage. A ship should have sufficient bunkers on board at the loading port for the whole voyage, unless proper arrangements have been diligently made at the loading port for bunkers at various ports along the planned and advertised route.74 It is only the arrangements which have to be

67 270 F.2d 345, 1959 AMC 2143 (5 Cir. 1959) 68 Orient Ins. Co. v. United S.S. Co. 1961 AMC 1228 (S.D. N.Y. 1961): a vessel may be seaworthy although ballasting is not complete by the time of sailing, if ballasting is planned to be done at sea. 69 Tex-O-Kan Mills Co. v. Higgins, Inc. 1959 AMC 1822, 174 F. Supp. 198 (E.D. La. 1959). The original carrier was held responsible for damage to cargo because due diligence was not exercised to make the substituted vessel seaworthy. (The vessel put to sea without a loadline or a loading certificate and there were other defects which also rendered her unseaworthy). 70 W. Angliss & Co. (Australia) Pty. v. P. & O. Steam Navigation Co. supra, K.B. at p. 462, Ll. L. Rep. at p. 214. 71 Riverstone Meat Co. Pty. Ltd. v. Lancashire Shipping Co. (The Muncaster Castle) [1961] A.C. 807 at p. 872, [1961] 1 Lloyd's Rep. 57 at p. 86 (H.L.). See also Wilson, 2 Ed., 1993 at p. 189. 72 See, for example, Quebec Marine Ins. Co. v. Commercial Bank of Canada (1870) L.R. 3 P.C. 234 (P.C.); The Vortigern [1899] P. 140. 73 [1966] 2 Lloyd's Rep. 193 (C.A.). 74 The Makedonia [1962] 1 Lloyd's Rep. 316: "I see no obligation to read into the word 'voyage' a doctrine of stages, but a necessity to define the word itself" (at p. 329). "...the obligation on the shipowner was to exercise due diligence before and at the beginning of sailing from the loading port to have the vessel adequately bunkered for the first stage to San Pedro and to arrange for adequate bunkers of a proper kind at San Pedro" (at p. 330). See also Northmbrian Shipping Co., Ltd. v. E. Timm & Son, Ltd. [1939] A.C. 397, [1939] 2 All E.R. 648 (H.L.), where the carrier's failure, before the voyage began, to provide sufficient bunkers to get the ship to its first bunkering port was

17

made; if the bunkers are not there on the arrival of the vessel at the arranged port, due diligence has, nevertheless, been exercised if the arrangements were reasonably made. When a vessel loaded cargo at a number of contiguous ports for a single destination, it was held that "before... the beginning of the voyage" continued until the vessel broke ground at the last loading port.75 3) Different cargoes may have different voyages It must be remembered that not all cargoes on a given ship necessarily have the same contractual "voyage" as the ship itself. For example, if a ship loads cargo A in Southampton, then sails to Le Havre where it loads cargo B, then continues to New York where it takes on cargo C, and finally docks in Halifax where all three cargoes are discharged, the ship has completed a single voyage. The cargoes, however, have had three different voyages, because they have been laden aboard the vessel at three different ports.76 In consequence, if cargo B or cargo C is lost or damaged by unseaworthiness and a cargo claim is instituted, the carrier will not be relieved of liability for the harm to those cargoes by proving merely that it exercised due diligence to make the ship seaworthy before and at the beginning of the ship's voyage at Southampton, because cargoes B and C did not begin their voyages there. Rather, the carrier must prove that it exercised due diligence in respect of cargo B before and at the beginning of the voyage of that specific cargo (i.e. at Le Havre) and, in respect of cargo C, before and at the beginning of the voyage of that specific cargo (i.e. at New York). On the other hand, where the carrier or its servants or agents lack due diligence at Southampton in respect of cargo "A", and that default later causes loss or damage to cargo "B" or cargo "C", the carrier will be liable for such loss and damage, because the harm is attributable to a lack of due diligence "before" the voyages of cargo "B" and cargo "C" began. The carrier's liability is grounded on actual or imputed knowledge of the harmful condition or defect continuing to the relevant date.77 The Hamburg Rules, at art. 5(1), although not specifically, effectively make the obligation to exercise due diligence to make the ship seaworthy mandatory throughout the whole voyage of each lot of cargo. IV. Due Diligence in Respect of the Loss The carrier is not obliged to prove that he exercised due diligence to make the vessel seaworthy in any respect unconnected with the loss. It is only if some particular unseaworthiness

held to be a failure to exercise due diligence resulting in liability and depriving the carrier of the exceptions provided by the Canadian Hague Rules. See also Scrutton, 20 Ed., 1996 at p. 429. 75 American Mail Line v. U.S.A. 377 F. Supp. 657, 1974 AMC 1536 (W.D. Wash. 1974). 76 See The Fjord Wind [1999] 1 Lloyd's Rep. 307 at p. 313, upheld without discussion of this point [2000] 2 Lloyds Rep. 191 (C.A.): "References to 'the voyage' in that context [the Hague Rules] are naturally to be construed as meaning the cargo-carrying voyage." 77This continuing liability for lack of due diligence on previous voyages also applies to previous voyages of the ship itself. See W. Angliss & Co. (Australia) Pty. v. P. & O. Steam Navigation Co. [1927] 2 K.B. 456 at p. 463, (1927) 28 Ll. L. Rep. 202 at p. 214; Scrutton, 20 Ed., 1996 at p. 429.

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contributed to a loss, then it is in respect of that unseaworthiness that the carrier must make his proof of due diligence.78 Thus in Heath Steel Mines Ltd. v. The Erwin Schroder,79 shifting boards were not installed exactly as prescribed by Department of Transport regulations, but the cause of the vessel heeling over was held to be the dangerous nature of the cargo of wet copper concentrate. For this the carrier was thus not responsible.

It was held in Heinz Horn-Marie Horn:80

"Under the Harter Act, ..., the owner whose diligence is providing a seaworthy vessel is found deficient is liable for damage to cargo without causal relation between the defect and the disaster. Framlington Court, supra, 1934 AMC at 283, 69 F.2d at 307. COGSA, however calls for such causal relation as a prerequisite to a finding of liability. Although sect. 1303(1)(a), supra, n. 12, makes the exercise of due diligence obligatory, sect. 1304(1) n. 21, infra, has been construed as requiring that the loss be causally related to the want of due diligence before liability can be imposed on the carrier."

In Captayannis "S",81 the ship was unseaworthy due to the incompetence of the crew but not of the master. It was held, however, that there must be a causal connection under COGSA between the loss and the unseaworthiness. Because the loss was due to an error of the master in navigation of the ship, there was no causal connection with the unseaworthiness, and the carrier was not responsible for the loss. In Dir. Gen. of India Supp. Miss. v. S.S. Maru,82 the vessel was overloaded and was 13 inches beneath her marks. It was held, nevertheless, that the shipowner sustained his burden of proving that violation of the Load Line Act83 was not a contributory factor, because the vessel would have grounded in any event at its permissible maximum draft. In The Yamatogawa,84 the design defect in the ship's reduction gear, although the result of a lack of due diligence, could have had no causative effect on the ensuing casualty; the carrier was therefore exculpated.

78 Bernstein v. MS Titania 1955 AMC 2040 at p. 2044 (E.D. La. 1955): "The carrier's burden does not extend to proving diligence to make the vessel seaworthy 'in all respects' not causally connected with the ensuing damage, as under the Harter Act." See also sect. 4(1) of U.S. COGSA 1936, which provides that the carrier is relieved when the damage results "from unseaworthiness unless caused by want of due diligence on the part of the carrier to make the ship seaworthy." 79 [1970] Ex. C.R. 426. 80 404 F.2d 422 at p. 432, 1968 AMC 2548 at p. 2558 (5 Cir. 1968). See also U.S. v. Ultramar Shipping 685 F. Supp. 887 at p. 894, 1988 AMC 527 at pp. 536-537 (S.D. N.Y. 1987), affd 854 F.2d 1315, 1988 AMC 2408 (2 Cir. 1988). 81 306 F. Supp. 866, 1969 AMC 2484 (D. Ore. 1969). See also Dir. Gen. of India Supp. Miss. v. S.S. Janet Quinn 355 F. Supp. 1329, 1972 AMC 1227 (S.D. N.Y. 1971), where the collision was held to be due to bad seamanship rather than to an outdated Suez Canal chart not relied on by the Canal pilot. 82 1972 AMC 1238 (S.D. N.Y. 1971), upheld in appeal, 459 F.2d 1370, 1972 AMC 1694 (2Cir.. 1972). 83 46 U.S. Code sect. 85 et seq. 84 [1990] 2 Lloyd's Rep. 39 at p. 50.

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In Sanko Steamship Co. Ltd. v. Sumitomo Australia Ltd. (No. 2),85 an Australian decision, because the carriers lack of due diligence in not correcting the vessels charts regularly and periodically was not the cause of the loss, no liability attached to that default under the applicable (U.S.) law. V. Due Diligence in Respect of the Voyage and the Cargo The nature and degree of due diligence required of the carrier in regard to seaworthiness are closely related to the anticipated voyage and the type of cargo (or cargoes) carried:86

"...making the ship seaworthy (or, as the Hague Rules provide, exercising due diligence to do so) requires consideration of the kinds of conditions that the vessel may encounter. If the vessel is fit to meet those conditions, both in the sense that it will arrive safely at its destination and in the sense that it will carry its cargo safely to that destination, it is seaworthy."

In this sense, the due diligence defence, like the defence of peril of the seas at art. 4(2)(c) of the Hague and Hague/Visby Rules,87 requires the court to take account of the weather conditions which could reasonably be expected as ordinary incidents of the contemplated voyage.88 For example, due diligence precautions before departure necessitated by the storms foreseeable on the North Atlantic in winter differ sharply from those required in calmer waters at seasons where heavy weather is not ordinarily encountered. The due diligence standard has been held to be an objective one, ... measured by the standards of a reasonable shipowner, taking into account international standards and the particular circumstances of the problem in hand.89 Due diligence also requires careful consideration of whether the vessel, prior to setting sail, was properly fitted and equipped to carry the cargo in question, i.e., whether it was "cargoworthy".90 Depending on the cargo and type of vessel, more or less effort may be required 85 (1995) 63 F.C.R. 227 (Fed. C. Aust.). 86 Great China Metal Industries Co. Ltd. v. Malaysian International Shipping Corporation Berhad (The Bunga Seroja) (1998) 158 A.L.R. 1 at p. 10, [1999] 1 Lloyd's Rep. 512 at p. 517, 1999 AMC 427 at p. 437 (High C. of Aust.). See also Hof van Beroep te Antwerpen, January 2, 1996 (The Sea King No. 1), [1996] ETL 667. 87 See Chap. 18, "Peril of the Sea and Similar Exceptions", infra. 88 Huddart Parker Ltd. v. Cotter (1942) 66 C.L.R. 624 at p. 663 (High C. of Aust.); McFadden v. Blue Star Line [1905] 1 K.B. 697 at p. 703; The Toledo [1995] 1 Lloyd's Rep. 40 at p. 50; The Liepaya [1999] 1 Lloyds Rep. 649 at pp. 668-669. See also The Fjord Wind [2000] 2 Lloyds Rep. 191 at p. 197 (C.A.):(... seaworthiness is not an absolute concept but is relative to the nature of the ship, to the particular voyage and even to the particular stage of the voyage). See also The Eurasian Dream [2002] 1 Lloyds Rep. 719 at p. 736. 89 The Kapitan Sakharov [2000] 2 Lloyds Rep. 255 at p. 266 (C.A.). 90 See, for example, The Good Friend [1984] 2 Lloyd's Rep. 586 at p. 592, where Staughton J. held that: "the obligation to make a ship seaworthy itself includes an obligation to see that the ship is fit for cargo service. Where the particular service is specified in the contract, it is an obligation to see that the ship is fit to carry the specified cargo on the specified voyage." See also The Aquacharm [1982] 1 Lloyd's Rep. 7 at p. 9 (C.A.); The Gudermes [1991] 1 Lloyds Rep. 456 at p. 472; The Subro Valour [1995] 1 Lloyd's Rep. 509 at p. 516; BHP Trading Asia Ltd. v. Oceaname Shipping Ltd. (1996) 67 F.C.R. 211 at p. 229 (Fed. C. Aust.). The "uncargoworthiness" must be "some attribute of the ship itself which threatens the safety of the cargo": The Apostolis [1997] 2 Lloyd's Rep. 241 at p. 257 (C.A.). See also The Silvia 171 U.S. 462 at p. 464 (1898); R.T. Jones Lumber Co. v. Roen Steamship Co. 270 F.2d

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to ready the ship to receive the goods to be transported. In other words, due diligence is a duty of variable character and intensity, depending on the circumstances of each case, rather than an abstract and immutable concept existing in a legal vacuum.91 In summation, it may be said that VI. Seaworthiness and Cause of the Loss 1) Carrier must prove the cause Under art. 4(1), first sentence, neither the carrier nor the ship is liable for loss or damage resulting from unseaworthiness unless it is caused by the want of due diligence to make the ship seaworthy within the meaning of art. 3(1). The carrier must prove the cause of the loss. This is the first step in the carrier's burden of proof.92 If the cause of the loss is unseaworthiness, the carrier, as required by art. 4(1), second sentence, must prove either: a) that it has complied with its due diligence obligation under art. 3(1)(a) or b) that no failure to do so on its part or the part of those for whom it is responsible could have caused or contributed to the casualty.93 If the cause of the loss is other than unseaworthiness or is unseaworthiness arising from lack of due diligence after the beginning of the voyage of the cargo concerned, the carrier may invoke the exculpatory exceptions of arts. 4(2)(a) to (q).94 2) When the cause is unknown If the carrier cannot identify the latent defect which causes the loss, it will be difficult for it to discharge the burden of proving that it was duly diligent.95 Where the cause is unknown,

456 at p. 458, 1960 AMC 46 at p. 49 (2 Cir. 1959); Mobil Shipping and Transp. Co. v. Wonsild Liquid Carriers Ltd. 190 F.3d 64 at p. 69, 1999 AMC 2710 at p. 2710 (2 Cir. 1999). 91 See Mobil Shipping Transp. Co. v. Wonsild Liquid Carriers, supra, F. 3d at p. 69, AMC at pp. 2710-2711 (seaworthiness has no absolute meaning, but varies with circumstances and exceptional features of the case; in an environmentally-sensitive era, it includes consideration of environmental risks of carrying certain cargoes). 92 See supra and Chap. 14, "The Cause of the Loss or Damage," infra. See especially The Torenia [1983] 2 Lloyd's Rep. 210 at p. 219. 93 The Fjord Wind [1999] 1 Lloyd's Rep. 307 at pp. 319, 323 and 327, upheld and cited with approval [2000] 2 Lloyds Rep. 191 at pp. 203 and 205-206 (C.A.). For an example of a case where lack of due diligence with respect to seaworthiness on the part of the carrier was found to have been superseded by another cause not attributable to the carrier, see Elf Oil-Rederiaktiebolaget Sally 1993 AMC 2069 (Arb. N.Y. 1993). 94 Falconbridge Nickel Mines Ltd. v. Chimo Shipping Ltd. [1969] Ex. C.R. 261 at p. 285. 95 Moore v. R. Fox and Sons [1956] 1 Q.B. 596 at p. 611, [1956] 1 Lloyds Rep. 129 at p. 143; The Antigoni [1991] 1 Lloyd's Rep. 209 at pp. 213 and 215 (C.A.); The Fjord Wind [1999] 1 Lloyd's Rep. 307 at p. 319, upheld [2000] 2 Lloyds Rep. 191 at pp. 199-200 and 205 (C.A.); American Home Insurance Co. v. American President Lines, Ltd. 44 F.3d 774 at p. 780, 1995 AMC 1036 at pp. 1044-1045 (9 Cir. 1994) (due diligence defence dismissed where carrier could not show what unseaworthy condition caused loss). See also Cour dAppel de Versailles, March 20, 1995, (The Soufflot), DMF 1995, 813.

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courts tend to invoke presumptions of law and to draw inferences from facts, frequently concluding that the ship was unseaworthy and that the carrier lacked due diligence.96 When the loss of a ship was totally unexplained -- the ship sinking, for example, in fair weather and calm seas -- the Second Circuit held that:97

"Under these circumstances it is presumed that the loss was occasioned by the unseaworthiness of [ship] Perama."

In North Star Cement, Ltd. v. Labelle,98 a ship filled with water and was beached. There was a small test hole in the plating but it was shown that this could not have been the cause of the entry. As the cause was unknown, the carrier was liable. In Consolidated & Barge Co. v. Marcona Conveyor Corp.,99 the unexplained sinking of a barge in calm water raised a presumption of unseaworthiness which was not rebutted. Where the facts of the case raise an inference of unseaworthiness before or at the commencement of the voyage, which is not rebutted by the carrier by proof of due diligence, the Court may decide that the carrier is liable even where the precise details of the unseaworthiness remain unclear.100 In The Fjord Wind,101 for example, where the ship's main engine failed for unidentified reasons shortly after the vessel departed the load port, the trial judge inferred that there was a defect in the propulsion system which rendered the ship unseaworthy at the outset of the voyage. The inference was supported by proof of several previous failures of the engines crankpin bearings over a ten-year period, which failures had never been thoroughly investigated by the defendants or their engine builder. That neglect, coupled with the defendants failure to implement certain recommendations of the engine builder concerning engine maintenance, sufficed to establish lack of due diligence in respect of the loss.102 3) When the cause is uncertain or complex When more than one possible cause of the cargo loss or damage is identified, courts seek the most probable cause and hold the carrier liable for any failure to exercise due diligence in regard to it before or at the commencement of the voyage.103 If two or more identified causes

96 See P. Bonassies commentary in DMF 1989, 147, No. 106 at p. 172, on Cour de Cassation, Apri 22, 1986, DMF 1988, 28: (translation): the judge is always entitled to infer from a known fact, unseaworthiness, to an unknown fact, lack of due diligence. 97 Federazione Italiana v. Mandask Compania 388 F.2d 434 at p. 436, 1968 AMC 315 at p. 318 (2 Cir. 1968). See also Martin & Robertson, Ltd. v. S.S. Barcelona 1968 AMC 331 (S.D. Fla. 1967). For a very similar French decision. 98 1976 AMC 944 (Fed. C. Can.). 99 716 F.2d 1077, 1985 AMC 117 (5 Cir. 1983). See also C. Itoh & Co. (America) Inc. v. M/V Hans Leonhardt 719 F. Supp. 479 at pp. 505-506, 1990 AMC 733 at pp. 745-747 (E.D. La. 1989), a case decided under the Harter Act, in which no causal relationship was proven between the excepted perils invoked by the carrier and the damage. 100 The Theodegmon [1990] 1 Lloyd's Rep. 52 at p. 77. 101 [1999] 1 Lloyd's Rep. 307 at pp. 319, 323 and 327, upheld [2000] 2 Lloyds Rep. 191 at pp. 204 and 208 (C.A.). 102 See ibid., [2000] 2 Lloyds Rep. at pp. 204 and 208 (C.A.). 103 See The Subro Valour [1995] 1 Lloyd's Rep. 509 at p. 517, where the most probable of three possible causes of a fire aboard the ship was identified as being damage to the electrical wiring or its insulation, for which the carrier was

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have each contributed to the loss or damage, the "dominant" cause is sought, according to common sense standards and taking account of all relevant circumstances.104 In some cases, however, there are found to be two effective causes both of which contributed to the casualty, without the second cause being a novus actus interveniens, breaking the chain of causation between the first cause and the ultimate loss.105 4) Lack of due diligence and another cause When the cause of the loss is both lack of due diligence by the carrier to make the vessel seaworthy before or at the commencement of the voyage and a cause which exculpates the carrier under one of the paragraphs of art. 4(2)(a) to (q), the carrier is responsible for the whole loss.106 This is because due diligence is a preliminary obligation which, if unfulfilled, bars any exculpatory exception. As Lord Somervell said, "Article III, Rule 1, is an overriding obligation."107 Thus if hatch covers are not properly secured before and at the beginning of the voyage and water enters the cargo during rough weather, the carrier is responsible for the whole loss.108 This is in effect a stricter version of the Vallescura Rule,109 where if the damage from two causes (i.e. lack of care of cargo, art. 3(2), and an exculpatory exception, arts. 4(2)(a) to (q)) cannot be separated, then the carrier is responsible for the whole loss, unless it can prove the portion of the loss caused by the excepted peril. The rule with respect to due diligence is stricter because the conflict is not between two equal provisions (an exculpatory exception and care of cargo), but between an exculpatory exception and an overriding obligation (due diligence).

Thus in Temple Bar,110 it was held:

liable owing to its want of due diligence. See also The Apostolis [1997] 2 Lloyd's Rep. 241 at p. 257 (C.A.), where welding was not proven to have been the most probable cause of the fire; The Isla Fernandina [2000] 2 Lloyds Rep. 15 at p. 33, where negligent navigation, rather than the vessels inadequate charts and navigational aids, was held to have been the effective cause of the ships grounding. 104 The Tolmidis [1983] 1 Lloyd's Rep. 530 at p. 540; The Fiona [1993] 1 Lloyd's Rep. 257 at p. 284 ("dominant or most efficient cause"). 105 The Kapitan Sakharov [2000] 2 Lloyds Rep. 255 at pp. 270-271 (C.A.), distinguishing The Sivand [1998] 2 Lloyds Rep. 97 (C.A.), in which the intervening act was found to be the effective (i.e. exclusive) cause of the loss or damage. 106 See Cour dAppel dAix, October 27, 1987, (The Knud-Sif), DMF 1989, 126 (entry of seawater, although aggravated by heavy weather, really resulted from three holes in ships steel plating caused by corrosion before loading; carrier liable for lack of due diligence). 107 [1959] 2 Lloyd's Rep. 105 at p. 113, [1959] A.C. 589 at pp. 602-603 (P.C.). 108 See, for example, Cour dAppel dAix, October 27, 1987, (The Knud-Sif), DMF 1989, 126 (seawater damage, although aggravated by heavy weather, was really caused by three holes in ships steel plating resulting from pre-loading corrosion). See also The Eurasian Dream [2002] 1 Lloyds Rep. 719 at p. .737 (where a fire is caused by some factor other than unseaworthiness but spreads as a result of unseaworthiness, the carrier is liable for the loss or damage caused or aggravated by the unseaworthiness, unless it exercised due diligence). 109 Schnell & Co. v. S.S. Vallescura 293 U.S. 296, 1934 AMC 1573 (1934). 110 45 F. Supp. 608 at p. 617, 1942 AMC 1125 at p. 1139 (D. Md. 1942). See also Smith, Hogg & Co. v. Black Sea and Baltic General Insurance Co. [1940] A.C. 997 at p. 1008, (1940) 67 Ll. L. Rep. 253 at p. 260 (H.L.); A.R. Kitson Trucking Ltd. v. Rivtow Straits Ltd. (1975) 55 D.L.R. (3d) 462 at p. 467, [1975] 4 W.W.R. 1 at p. 6 (B.C. S.C.); L. Dreyfus Corp. v. 27, 946 Long Tons of Corn 830 F.2d 1321 at pp 1327-1328, 1988 AMC 1053 at p. 1062 (5 Cir. 1987); BHP Trading Asia Ltd. v. Oceaname Shipping Ltd. (1996) 67 F.C.R. 211 at p. 229 (Fed. C. Aust.).

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"... if the facts in any case disclose unseaworthiness resulting from the vessel owner's failure to exercise due diligence to make the vessel seaworthy, which concur with negligent navigation in causing the loss, the owner will be liable. That is to say, unseaworthiness cannot be transformed into bad seamanship for the purpose of avoiding responsibility for loss of vessel or cargo."

VII. Seaworthiness and Fundamental Breach 1) The Hague Rules Even if the carrier fails to exercise due diligence to make the ship seaworthy before and at the beginning of the voyage, and even if that failure causes the cargo loss or damage, the carrier may nevertheless limit its liability for "any loss or damage to or in connexion with goods" to the amount of the package limitation of art. 4(5) of the Hague Rules.111 The reason is that art. 4(5) provides that: "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..." (Emphasis added).112 In consequence, the carrier's breach of its due diligence duty under art. 3(1) of the Hague Rules does not constitute a "fundamental breach"113 of its obligations under the Convention (i.e. the Hague Rules) or the contract of carriage. The want of due diligence therefore differs from unreasonable geographic deviation114 (art. 4(4)) and from unjustified deck carriage115 (art. 1(c)), which, when done intentionally by the carrier, are regarded as fundamental violations of its obligations under the Rules and the contract of carriage, entailing the loss of at least the package limitation, and arguably the loss of other defences as well (e.g. the one-year time bar of art. 3(6), the defences of art. 4(2)(a) to (q) and any other valid defences of the carrier specified by the contract). Failure to exercise due diligence, while therefore not a "fundamental breach" depriving the carrier of the package limitation, should nevertheless deprive it of the one-year time for suit under art. 3(6), as well as of the art. 4(2)(a) to (q) exceptions and any other contractual defences, because of the "overriding" character of due diligence and its impact on the order of proof.116

111 Falconbridge Nickel Mines Ltd. v. Chimo Shipping Ltd. [1969] Ex. C.R. 261 at p. 285, [1969] 2 Lloyds Rep. 277 at p. 298; Illigan v. Integrated Steel Mils, Inc. v. S.S. John Weyerhaueser 507 F.2d 68, 1975 AMC 33 (2 Cir. 1974), cert. denied, 421 U.S. 965, 1975 AMC 2158 (1975); Tuxpan Lim. Procs. 765 F. Supp. 1150 at pp. 1184-1185, 1991 AMC 2432 at pp. 2451-2453 (COGSA package limitation not broken even where shipowner was reckless re seaworthiness); Sabah Shipyard Sdn. Bhd. V. M/V Harbel Tapper 178 F.3d 400 at p. 409, 2000 AMC 162 at p. 174 (5 Cir. 1999): to hold that a carrier is never entitled to the $500 limitation on liability if it fails to exercise due diligence would render the $500 limitation a nullity. 112 See, for example, Grace Plastics Ltd. v. The Bernd Wesch II [1971] F.C. 273 at pp. 290-291 (Fed. C. Can.). 113 See supra, Chap. 5: "Fundamental Breach, Quasi-Deviation, Rupture of the Contract". 114 See infra, Chap. 35: "Geographic Deviation". 115 See infra, Chap. 31: "Deck Carriage". 116 See supra, section II(2). See, for example, Tribunal de commerce de Marseille, September 30, 1988, The Togla, Revue Scapel 1990, 11, upheld by the Cour dAppel dAix, January 10, 1991, Bulletin des Transports 1991, 716, commentary by P. Bonassies, DMF 1992, 147 (although deck carriage mandatory because of dangerous nature of

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For the same reason, the exemption from liability which the carrier enjoys where he lands, destroys or renders innocuous a dangerous cargo under art. 4(6), as well as the carrier's right under the same provision to be indemnified by the shipper of such cargo for all damages and expenses arising, directly or indirectly, from such a shipment, are also rightly lost where the carrier has failed to exercise due diligence to make the vessel seaworthy before and at the commencement of the voyage,117 and where that failure is an effective or co-operating cause of the loss or damage, even if there is another cause and even if the want of due diligence is not the dominant cause .118 2) Hague/Visby Rules With respect to the Hague/Visby Rules, the failure to exercise due diligence to procure seaworthiness before and at the commencement of the voyage pursuant to art. 3(1) will not ordinarily deprive the carrier of the package/kilo limitations of art. 4(5)(a) for "any loss or damage to or in connection with the goods",119 unless the cargo claimant can prove that the carrier's acts or omissions in regard to due diligence were committed with intent to cause the damage (and not merely the harmful act or omission itself), or that they were committed recklessly and with knowledge that the damage would probably result (art. 4(5)(e)). 120 This burden of proof is, of course, highly onerous (and usually impossible) for the cargo claimant to discharge, with the result that the package/kilo limitations of the carrier are "almost unbreakable"121 in due diligence, as in other, cases. Art. 4(5)(e) is clear in requiring proof of the carrier's intent or recklessness with knowledge in respect of the damage, as a condition of the carrier's loss of the package/kilo limitation. In my view, however, the carrier should also lose the package/kilo limitation on proof that its acts or omissions which caused the damage were committed with intent or with knowing recklessness. Persons acting fraudulently seldom intend to cause damage; they merely

product, carrier was not exonerated by liberty clause where due diligence had not been exercised to fit ship for such carriage). 117 The Fiona [1993] 1 Lloyd's Rep. 257 at p. 288, upheld [1994] 2 Lloyd's Rep. 506 at p. 519 (C.A.). 118 The Kapitan Sakharov [2000] 2 Lloyds Rep. 255 at pp. 268-270 (C.A.). 119 See The Happy Ranger [2002] 2 Lloyds Rep. 357 at p. 364 (C.A.), where Tuckey, L.J. interpreted that the words in any event in art. 4(5) of the Hague and Hague/Visby Rules as unlimited in scope, thereby permitting the carrier to limit its liability to the Hague/Visby package and kilo limitations, even where the cargo loss or damage was caused by the carriers failure to exercise due diligence in respect of seaworthiness before and at the beginning of the voyage. Cited on this point (at p. 364), in the absence of English authority, the Canadian (Hague Rules) decision in Falconbridge Nickel Mines Ltd. v. Chimo Shipping Ltd. [1969] 2 Ex. C.R. 261 at p. 285, [1969] 2 Lloyds Rep. 277 at p. 298, and the American (COGSA 1936) decision in Illigan v. Integrated Steel Mils, Inc. v. S.S. John Weyerhaueser 507 F.2d 68, 1975 AMC 33 (2 Cir. 1974), cert. denied, 421 U.S. 965, 1975 AMC 2158 (1975). 120 For a case where the carrier acted recklessly and with knowledge, thereby losing the package/kilo limitation for a portion of cargo carried under the Hague/Visby Rules, see Tuxpan Lim. Procs. 765 F. Supp. 1150 at p. 1183, 1991 AMC 2432 at p. 2451 (S.D. N.Y. 1991). But see also Itel Container Corporation v. M/V Titan Scan 1997 AMC 1568 at pp. 1583-1584 (S.D. Ga. 1996), affd in part, revd in part, 139 F.2d 1450, 1998 AMC 1965 (11 Cir. 1998), cert. denied 119 S.Ct. 405 (1998), where the stacking of containers five high was found not to have been done recklessly with knowledge of the probable result, thereby preserving the carriers Hague/Visby limitations when five of the containers fell overboard. 121 See supra, Chap. 5: "Fundamental Breach, Quasi-Deviation, Rupture of the Contract". The fact that the onus of making this proof is on the cargo claimant is unfair, because he lacks ready access to the necessary evidence needed to discharge that burden. He should be required to prove only the deviation or the deck carriage, as the case may.

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intend to benefit from their acts or omissions. Equity demands that where the carrier has intentionally lacked due diligence to make the vessel seaworthy before and at the beginning of its voyage, or has done so recklessly and with knowledge of the likely consequences of such acts or omissions, it should not benefit from the Visby package/kilo limitations, even if it did not intend the resulting damage or did not knowingly disregard its likely occurrence. Unfortunately, however, no decision or other authority appears to support this position,122 and the text of art. 4(5)(e) leaves no doubt that the damage itself must have been intended by the carrier or have been the product of its knowing recklessness, before the carrier can be stripped of its liability limitation. It is also arguable that the carrier whose lack of due diligence has been intentional or reckless should lose not only the package/kilo limitation under art. 4(5)(e), but also the benefit of all other exceptions, notably the one-year limitation period on suits of art. 3(6). Because art. 4(5)(e) mentions only the loss of the package/kilo limitation, it does not necessarily follow that the carrier's other defences and exceptions are preserved.123 Similarly, as under the Hague Rules, the carrier who has failed to exercise due diligence in accordance with art. 3(1), should also be precluded, under the Hague/Visby Rules, from benefitting from the exculpatory exceptions of art. 4(2)(a) to (q) and any other defences under the contract of carriage, because of the "overriding" nature of the due diligence obligation and its effect on my order of proof set forth above, and because art. 4(5)(e) does not regulate the loss of defences other than the package/kilo limitation. VIII. Examples of Seaworthiness 1) The hull - seaworthiness Seaworthiness originally meant the good order of the hull of the vessel and in particular the condition of bulkheads, plating and rivets in older ships. It still does. In Federazione Italiana v. Mandask Compania,124 the Second Circuit held that it was the duty of the shipowner to investigate the cause of cracks in bulkhead platings, and that it was not sufficient to rely on American Bureau of Shipping recommendations regarding repairs in order to establish due diligence.

122 See, however, the comment by Tenney D.J. in Tuxpan Lim. Procs. 765 F. Supp. 1150 at p. 1185, n. 95, 1991 AMC 2432 at p. 2453 n. 95 (S.D. N.Y. 1991), referring to the unjust paradox that under COGSA a carrier who stows cargo on deck without the shippers authorization loses the package limitation, while a carrier who recklessly tenders an unseaworthy ship which later sinks with all cargo and crew (which happened in this case), benefits from the limitation. Similarly, he notes, referring to other COGSA case law, that a carrier who misrepresents (fraudulently or otherwise) the on-board status of the cargo in its bill of lading loses the package limitation; yet the carrier who fraudulently misrepresents that the ship is seaworthy still enjoys the limitation. 123 Ibid. 124 388 F.2d 434, 1968 AMC 315 (2 Cir. 1968).

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In The Torenia,125 the apparent and longstanding corrosion of the steelwork on the ship, which existed at the commencement of the voyage and which should have been discovered and repaired during the ship's surveys, rendered the vessel unseaworthy, resulting in the shipowner's liability for lack of due diligence. In The Toledo,126 the shipowner was held to have lacked due diligence where it had been "complacent" in failing to maintain a proper system for inspecting and repairing damage to, and deformations of, certain frames and brackets attached to the shell plating of a bulk carrier's holds, resulting in the ingress of seawater through cracks in the plating. The owner's classification society had also been complacent in not recommending repairs when the vessel was surveyed. 2) Hatches and vents - seaworthiness Hatches are a constant source of damage to cargo and as such a constant source of litigation. Hatches should be tight, if there is to be seaworthiness. Sears, Roebuck & Co. v. American President Lines:127 A vessel was badly constructed, there being a hole in the coamings of the hatches. The shipowner was deemed not to have exercised due diligence and was held jointly and severally liable with the builder. J. Gerber & Co. v. S.S. Sabine Howaldt:128 The master's action in securing two tarpaulins to ventilator heads at the commencement of the voyage satisfied the usually acceptable practice of good seamanship and there was no negligence in not covering the hatch covers with tarpaulins. Thorden Lines A.B. v. Stockholms Sifrsakrings:129 The Supreme Court of Sweden ruled that vessel with an open shelter deck was not unseaworthy despite water damage to cargo when hatches on the 'tween deck were not battened down. This, because the hatches on the upper decks and the tonnage opening were properly closed. Liberty Shipping Lim. Procs.:130 Vent closing devices that were defective and ineffective show a lack of due diligence to make the ship seaworthy. Consequently, the shipowner was held responsible for damage caused by fire. Kruger Inc. v. Baltic Shipping Co.:131 Defective ventilator coamings lacking brackets or supports were lost during foreseeable bad weather on a North Atlantic crossing, causing water to enter the holds, resulting in the sinking of the ship with loss of life and cargo. The design defect

125 [1983] 2 Lloyd's Rep. 210 at pp. 230 and 234. See also Cour dAppel dAix, October 27, 1989, (The Knud-Sif), DMF 1989, 126. But see also Cour de Cassation, June 13, 1989, (The Scopi), DMF 1990, 467, note R. Achard (crack in hull held a latent defect of ship not discoverable by due diligence). 126 [1995] 1 Lloyd's Rep. 40 at pp. 50, 52-53. 127 1971 AMC 2255, [1972] 1 Lloyd's Rep. 385 (N.D. Cal. 1971). See also Cour dAppel de Paris, May 29, 1987, DMF 1988, 170. 128 437 F.2d 580, 1971 AMC 539 (2 Cir. 1971). 129 December 1, 1962, [1966] ETL 536. 1301973 AMC 2241 (W.D. Wash. 1973). 131 (1989) 57 D.L.R. (4th) 493 (Fed. C.A.).

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in the ventilators was unseaworthiness, and the shipowner had lacked due diligence. Defences of peril of the sea and latent defects not discoverable by due diligence were dismissed. Tuxpan Lim. Procs:132 Cracks in the tanktops and hatch covers, as well as history of unremedied defects with the engine, the absence of a bolt-tightening tool, and defects in the pipes of the seawater cooling system, all combined to render the vessel unseaworthy. BHP Trading Asia Ltd. v. Oceaname Shipping Ltd.:133 Hatch covers were heavily "scaled" (i.e. rusted) and their rubber seals were damaged, thus allowing seawater to enter the holds. The shipowner had failed in due diligence in not inspecting adequately the water tightness of the hatch covers and in either not reading, or failing to act upon, a marine surveyor's report showing poor maintenance of the vessel.134 Thyssen, Inc. v. S/S Eurounity:135 The hatches were at best in a marginal condition impairing the seaworthiness of the vessel, and the defendants had not been duly diligent, having conducted no watertightness tests, and having failed to establish any maintenance program or log or any program for renewing the hatch cover gaskets. The Apostolis:136 The ship was not unseawort