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The Hague Visby Rules Articles III and IV

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Title: The Hague Visby Rules Articles III and IV


1
The onus of proof in A cargo claim arts iii
iv of the hague-visby rules and the uncitral
draft convention
  • The Hon Justice Steven Rares
  • Federal Court of Australia
  • Presented at the MIG/MLAANZ
  • Lecture Series, 23 July 2008

2
Overview
  • The Hague and Hague-Visby Rules history
  • Onus of proof in cargo claims - Arts III and IV
    of the Hague-Visby Rules
  • UNCITRAL Working Group III (Transport Law)
  • Draft Convention on Contracts for the
    International Carriage of Goods Wholly or Partly
    by Sea
  • Aspects of the possible operation of the draft
    convention

3
Hague-visby rules history
  • International Convention for the Unification of
    Certain Rules of Law Relating to Bills of Lading,
    1924 (the Hague Rules)
  • Protocol to Amend the International Convention
    for the Unification of Certain Rules of Law
    Relating to Bills of Lading, 1968 (the
    Hague-Visby Rules)
  • Carriage of Goods by Sea Act 1991 (Cth)
  • Harter Act 1893 (US)
  • ? Demand for international uniformity in
    shipowners liability

4
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5
Draft Convention on Contracts for the
International Carriage of Goods Wholly or Partly
by Sea
  • July 2008 - 41st session of UNCITRAL approves
    final text of Draft Convention on Contracts for
    the International Carriage of Goods Wholly or
    Partly by Sea (the Rotterdam Rules)
  • Draft convention approved earlier this month
  • To replace the various rules Hague Rules,
    Hague-Visby Rules, Hamburg Rules and the
    Multimodal Convention
  • Sufficient safeguards or danger of a return to
    a pre-Hague Rules free-for-all?

6
Onus of proof arts III iv
  • Distinction in Australia between onus of proof
    and order of proof in cargo claims
  • Made clear in unanimous HC decision in Gamlen
    Chemical (1980) 147 CLR 142
  • Doubt cast by Gaudron, Gummow and Hayne JJ in
    Great China (The Bunga Seroja) (1998) 196 CLR 161
  • Ankergracht (2007) 160 FCR 342 approach in
    order for a carrier to rely on the exceptions in
    Art IV r 2 it must not be negligent or at fault,
    ie not in breach of Art III rules 1 or 2
  • Allsop Js observation in Hilditch 2007 FCA 752
    difficulties for plaintiffs in knowing what to
    plead

7
Issues raised by arts III IV
  • Art III r 1 obligation on carrier to exercise
    due diligence before and at beginning of voyage
  • Derogates from common laws requirement of
    absolute obligation on shipowner to make vessel
    seaworthy before voyage
  • Art III r 2 obligations before and during
    voyage on carrier subject to exceptions from
    liability provided in Art IV
  • Art IV r 1 excludes carriers liability for
    unseaworthiness unless carrier failed to exercise
    due diligence at or before commencement of voyage
    burden of proof is on the carrier or other
    person claiming exemption
  • Art IV r 2 list of exceptions to carriers
    liability

8
The ankergracht case (2007) 160 FCR 342
  • Factual background
  • Steel coils rust on Korea-Australia voyage in
    northern winter moisture in holds
  • Should carrier have fitted dehumidifiers to make
    vessel cargoworthy?
  • Did carriers properly care for steel on voyage?
  • Findings of trial judge carriers had filed to
    make vessels seaworthy at time of loading lack
    of due diligence

9
The ankergracht case (2007) 160 FCR 342
  • Appeal to Full Court unanimous finding
    upholding trial judges ruling that carriers had
    failed to take care majority overturned trial
    judges decision on lack of due diligence
  • Ryan Dowsett JJ
  • Insufficient evidence to justify finding of
    unseaworthiness no evidence of practice of
    fitting dehumidifiers question of due diligence
    did not arise
  • Failure to remove moisture was a want of care,
    not want of due diligence
  • Rares J
  • The court should determine whether the practice
    was sufficient to determine question of
    seaworthiness and due diligence
  • The question of whether a practice is adequate is
    a question of law to be determined by the courts
    Rogers v Whitaker (1992) 175 CLR 479

10
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11
SHIFTING ONUSES
  • Lloyd J in Hellenic Dolphin 1978 2 Lloyds Rep
    336
  • Cargo owner raises prima facie case by showing
    that cargo was damaged on arrival
  • Ship owner meets prima facie case by relying on
    exception in Art IV r 2
  • Cargo owner seeks to displace exception by
    proving
  • vessel unseaworthy at start of voyage
  • unseaworthiness caused of loss

12
SHIFTING ONUSES
  • Hague-Visby rules do not explicitly identify who
    has onus of proving unseaworthiness
  • At common law, it falls on those who allege it
    Lindsay v Klein (The Tatjana) 1911 AC 194
  • The standard of seaworthiness or fitness Great
    China (1998) 196 CLR 161
  • Auld LJ in The Kapitan Sakharov 2000 2 Lloyds
    Rep 225 reasonably fit to encounter ordinary
    incidents of the voyage objective test
  • Art III r 1 also imposes obligation on carriers
    to make ship cargoworthy

13
Onus of proof and care of cargo
  • Art III r 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.
  • Properly means
  • in accordance with a sound system and that may
    mean more than carrying the goods carefully
    Albacora SRL v Westcott Laurance Line Ltd
    1966 2 Lloyds Rep 53 per Lord Reid
  • Depends on the conditions which it is anticipated
    the vessel will meet Great China (1998) 196 CLR
    161

14
Onus of proof and care of cargo
  • If goods are shipped in apparent good condition
    and lost or damaged when discharged ? prima facie
    breach of Art III r 2
  • Carrier bears onus of proving defence under Art
    IV r 1
  • Carrier bears onus of bringing cause of damage
    within an exception in Art IV r 2
  • The question of concurrent causes Gamlen
    Chemical (1980) 147 CLR 142 treat the two
    concurrent causes as inseparable, and therefore
    joint
  • The carrier will only escape liability if it can
    prove that the loss or damage was caused by an
    excepted peril alone see e.g. Hilditch (No 2)
    (2007) 245 ALR 125
  • If unseaworthiness is the cause of the loss, and
    the carrier is in breach of its obligation to
    exercise due diligence to make the ship seaworthy
    as required by Art III r 1, it cannot rely on an
    exception under Art IV

15
Principles of proof
  • Professor William Tetleys four general
    principles of proof (Marine Cargo Claims (4th
    ed))
  • The carrier is prima facie liable for loss/damage
    to cargo received in good order and out-turned in
    bad order
  • The parties are required to make proof of
    whatever facts are available
  • Onus of proof does not mean proving all
    circumstances to point of absurdity, but means
    making proof to a reasonable degree
  • Once a party conceals, modifies or destroys
    evidence, other evidence of that party is suspect

16
Order of proof
  • Order of proof sequence in which
    facts/allegations are proved by one party or the
    other during trial
  • The traditional order of proof
  • Onus on SHIPPER to prove
  • Contract of carriage
  • Goods shipped in apparent good order condition
  • Goods missing or delivered damaged on arrival
  • Prima facie case of carriers breach of Art III r
    2
  • Onus shifts to CARRIER to rebut shippers prima
    facie case by establishing that damage/loss
    caused by Art IV r 2 exception
  • If an exception established, onus shifts to
    SHIPPER who may displace carriers defence by
  • Proving carrier failed to satisfy requirements of
    Art III r 2
  • Proving ship was unseaworthy at start of voyage,
    and that caused the damage/loss Arts III r 1
    IV r 1

17
The Great china case
18
The Great china case(1998) 196 CLR 161
  • Obiter comments by Gaudron, Gummow and Hayne JJ
    suggest a different Australian position
  • Trial judge and NSW Court of Appeal held that
    damages resulted from perils of the sea
  • McHugh J said that defence of perils of the sea
    did not apply because the cargo owners failed to
    prove breach of Art III r 2
  • Kirby and Callinan JJ suggested that the
    traditional onus of proof would apply
  • Gaudron, Gummow and Hayne JJ said that nothing
    turned on the allocation of the burden of proof

19
The Great china case
  • Obiter remarks of Gaudron, Gummow and Hayne JJ
  • Davies Dickey (Shipping Law) have described
    their Honours views as radical so far as they
    depart from the onus and order identified in
    Gamlen Chemical
  • Their views are inconsistent with the travaux
    préparatories for the Hague Rules which suggest
    that the carrier should prove which specific
    exception in Art IV caused the loss/damage
  • The practical effect of their Honours approach
    may be that, in circumstances where the cause of
    loss/damage is uncertain, the carrier may escape
    liability simply by demonstrating that due
    diligence care were exercised, without having
    to prove how the cargo became lost/damaged.

20
draft convention
21
Recent developments the draft convention
  • Draft Arts 14-19 significantly alter the regime
    in Arts III IV of the Hague-Visby Rules
  • Draft Art 18 deals with carriers liability
    which party bears the onus of proof

22
Recent developments the draft convention
  • Australian Governments observation
  • Australia is of the opinion that the current
    text is so different from current international
    law and so complicated that the potential for
    lengthy and costly litigation is high. As this
    litigation will be domestic, there remains the
    potential for the uniformity of the international
    law to be undermined by having provisions
    interpreted differently in different countries.

23
the draft convention
  • Draft Art 18
  • Claimant must prove that loss etc (or
    event/circumstance that caused/contributed to the
    loss etc) took place during period of carriers
    responsibility draft Art 18 r 1
  • Carrier relieved of responsibility if it proves
    that the (or a) cause of the loss etc was not its
    fault or that of any servant or agent, including
    master, crew or any performing party draft
    Art 18 r 2
  • Carrier can also prove exemption draft Art 18 r
    3
  • list of exemptions similar to those in Art IV r 2
    of Hague-Visby Rules
  • but draft Art 18 r 3 expressly provides that the
    carrier bears the onus of proving that one of the
    circumstances caused/contributed to loss etc
  • draft 18 r 3 omits the nautical fault exception
    now the carrier is to be liable for the
    acts/omissions of the master, crew or any
    performing party

24
the draft convention
  • Despite carrier establishing exemption under r 3,
    carrier will still be liable if claimant proves
    that carrier (or person for whom it is
    responsible) caused/contributed to
    event/circumstance on which carrier relies
    draft Art 18 r 4
  • ? Although carrier has proved it is not at fault
    (r 3), claimant can prove that carrier is at
    fault (r 4)!
  • If carrier succeeds in establishing exception (r
    3), onus shifts back to cargo claimant to prove
    that loss etc was (or was probably) caused by
    unseaworthiness etc draft Art 18 r 5(a)
  • If unseaworthiness etc proved, draft Art 18 r
    5(b) shifts onus back onto carrier who is liable
    unless it proves
  • unseaworthiness etc did not cause loss etc
  • it complied with its obligation to exercise due
    diligence this extends to an obligation to keep
    the ship seaworthy etc during voyage draft Art
    15

25
the draft convention
  • Draft Art 18 r 5 compared with Art IV r 1
  • Similarities
  • Both deal with liability of carrier where damage
    arises or results from unseaworthiness of vessel
  • Both require carrier to prove that it exercised
    due diligence or that damage was not caused by
    unseaworthiness etc

26
the draft convention
  • Draft Art 18 r 5 compared with Art IV r 1
  • Differences
  • Art IV r 1 is framed as a negative proposition
    carrier is not liable except in circumstances
    specified
  • Neither the carrier nor the ship shall be
    liable for the loss or damage arising or
    resulting from unseaworthiness unless caused by
    want of due diligence on the carrier to make the
    ship seaworthy
  • Draft Art 18 r 5 is framed as a positive
    proposition claimant must prove carrier is
    liable
  • The carrier is also liable for all or part of
    the loss, damage, or delay if (a) The claimant
    proves that the loss, damage, or delay was or was
    probably caused by or contributed to by (i) the
    unseaworthiness of the ship

27
the draft convention
  • Draft Art 18 r 5 compared with Art IV r 1
  • Australian Government expressed concerns
    regarding the alteration of the burden of proof.
    Australia argued that
  • the carrier is in a better position than the
    shipper to know what happened while the goods
    were in the carriers custody
  • the shipper would have difficulty proving
    unseaworthiness etc

28
the draft convention
  • Other Draft Articles
  • Draft Art 14 r 1 restates carriers obligations
    in Art III r 2 in familiar terms
  • Draft Art 15 broadens significantly Art III r 1
    expansion of obligation of due diligence must
    keep ship seaworthy etc during voyage
  • Draft Art 19 introduces liability of carrier
    for other persons

29
the draft convention
  • Other Draft Articles
  • The exception in Art IV r 2(q) (damage arising
    without fault, or privity of carrier) has been
    made a distinct exception under draft Art 18 r 2
  • Draft Art 18 rr 2, 3, 6 affect position under
    amended Hague Rules relating to carriers
    liability where there are concurrent causes
  • Rules 2 3 relieve carrier of all/part liability
    if it proves cause of loss not its fault, or
    stipulated event/circumstance caused/contributed
    to loss etc
  • ? rr 2 3 reverse the interpretation in Gamlen
    Chemical and Hilditch where carrier was liable if
    there were concurrent causes but it only
    established one exception
  • ? r 3 reverses the position stated by Staughton
    LJ in The Antigoni 1991 1 Lloyds Rep 209 that
    a shipowner who seeks to rely on Art IV r 1 need
    not establish an exception under Art IV r 2

30
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