Great China Metal Industries Co Ltd v Malaysian International Shipping Corporation Berhad

HIGH COURT OF AUSTRALIA

GAUDRON, McHUGH, GUMMOW, KIRBY, HAYNE AND CALLINAN JJ

GREAT CHINA METAL INDUSTRIES CO LIMITED                APPELLANT

AND

MALAYSIAN INTERNATIONAL SHIPPING
CORPORATION BERHAD  RESPONDENT

Great China Metal Industries Co Limited v Malaysian International Shipping Corporation Berhad

(S44/1997) [1998] HCA 65
22 October 1998

ORDER

Appeal dismissed with costs.

On appeal from the Supreme Court of New South Wales

Representation:

R B S Macfarlan QC with P E King for the appellant (instructed by Mallesons Stephen Jaques)

A J Sullivan QC with N G Rein for the respondent (instructed by Ebsworth & Ebsworth)

Notice:  This copy of the Court’s Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Great China Metal Industries Co Limited v Malaysian International Shipping Corporation Berhad

Shipping – Sea carriage of goods – Bill of lading – Hague Rules – Damage to cargo – Cargo properly stowed – Vessel seaworthy and fit in all respects for voyage – Bad weather conditions foreseeable – Perils of the sea – MV Bunga Seroja.

Words and phrases – "perils of the sea".

Sea-Carriage of Goods Act 1924 (Cth), Sch, Art III rr 1 and 2, Art IV rr 1 and 2(a), (c).

1. GAUDRON, GUMMOW AND HAYNE J.   In 1989, 40 cases of aluminium can body stock in coils were consigned from Sydney to Keelung, Taiwan.  The respondent issued a bill of lading dated 5 October 1989, acknowledging receipt of the goods in apparent good order and condition.  The vessel named in the bill as the intended vessel was the MV Bunga Seroja.

2. The shipper named in the bill was Strang International Pty Ltd ("Strang") as agent for Comalco Aluminium Ltd.  Strang packed the containers in which the cargo was shipped.  The appellant was named in the bill as "the notify party" and property in the goods duly passed to it.

3. The bill provided that it should have effect subject to legislation giving effect to the Hague Rules.  By the Sea‑Carriage of Goods Act 1924 (Cth)[1], the Hague Rules applied to the carriage of the goods. The parties to the bill of lading were deemed by ss 4(1) and 9(1) of that statute to have intended to contract according to the Hague Rules.

   [1]s 4(1). This has now been replaced by the Carriage of Goods by Sea Act 1991 (Cth), which incorporates the Hague‑Visby Rules.

4. In the course of its passage across the Great Australian Bight, the vessel encountered heavy weather.  That weather had been forecast before the vessel left port.  Some of the goods were damaged.

5. Although, as will appear, it is not determinative of the outcome of the appeal, the question to which submissions primarily were directed is the meaning and effect of Art IV r 2(c) of the Hague Rules that:

   "Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from -

   ...

   (c)    perils, dangers and accidents of the sea or other navigable waters ..."

   The appellant contended that:

   -this exception (the "perils of the sea" exception) does not apply if damage to cargo results from sea and weather conditions which could reasonably be foreseen and guarded against;

   -the weather encountered by the Bunga Seroja was foreseen; and

   -the statement of Mason and Wilson JJ in Shipping Corporation of India Ltd v Gamlen Chemical Co (A/Asia) Pty Ltd[2] that "sea and weather conditions which may reasonably be foreseen and guarded against may constitute a peril of the sea" is wrong and should not be followed.

   [2](1980) 147 CLR 142 at 166.

6. The appellant pleaded that the respondent had failed to meet its responsibility under Art III r 1 of the Hague Rules to exercise, before and at the beginning of the voyage, due diligence to make the ship seaworthy, to properly man, equip and supply the ship and to make the holds and all other parts of the ship in which the goods were carried fit and safe for their reception, carriage and preservation. It also pleaded failure by the respondent to properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried (Art III r 2). By its defence, the respondent relied upon various immunities specified in Art IV r 2. In particular, the respondent pleaded that it was not responsible for any loss or damage to the goods arising or resulting from perils of the sea and that any damage to the goods resulted or occurred by reason of that matter.

7. The trial judge (Carruthers J) entered judgment for the respondent.  His Honour concluded[3]:

   "In my view, the [respondent] has established to the requisite degree that the damage to the subject cargo was occasioned by perils of the sea.  …  In summary, the evidence satisfies me that, bearing in mind the anticipated weather conditions:  (i) when the Bunga Seroja sailed from Burnie she was fit in all respects for the voyage; (ii) the [respondent] properly and carefully loaded, handled, stowed, carried, kept and cared for the subject cargo; and (iii) there was no neglect or default of the master or other servants of the [respondent] in the management of the ship or cargo.

   I am satisfied that the damage to the subject cargo was occasioned by perils of the sea, in that, the pounding of the ship by reason of the heavy weather caused the coils within the container to be dislodged and thereby sustain damage."

The New South Wales Court of Appeal[4] dismissed an appeal.  The appeal to this Court also should be dismissed.

[3]The "Bunga Seroja" [1994] 1 Lloyd's Rep 455 at 470‑471.

[4]Great China Metal Industries Co Ltd v Malaysian International Shipping Corporation Berhad (1996) 39 NSWLR 683.

8. The facts giving rise to the appeal, and the course of the proceedings below are set out, in detail, in the reasons of other members of the Court and we do not repeat them.

9. In understanding the operation of the Hague Rules, there are three important considerations.  The rules must be read as a whole, they must be read in the light of the history behind them, and they must be read as a set of rules devised by international agreement for use in contracts that could be governed by any of several different, sometimes radically different, legal systems.  It is convenient to begin by touching upon some matters of history.

   History of the Hague Rules

10. By the early 19th century, shipowners had come to be regarded as common carriers by both English and American law[5].  Accordingly, the carrier was strictly liable for damage to or loss of cargo that was damage or loss occurring in the course of carriage unless the carrier could prove not only that its negligence had not contributed to the damage or loss, but also that one of four excepted causes (act of God, act of public enemies, shipper's fault or inherent vice of the goods) was responsible for the loss[6].

    [5]At least where the ship was a "general ship", that is, a ship put up to carry goods for anyone wishing to ship them on the particular voyage on which the ship is bound; see, eg, Laveroni v Drury (1852) 8 Ex 166 at 170 [155 ER 1304 at 1306]; Liver Alkali Co v Johnson (1874) LR 9 Ex 338 at 340‑341.

    [6]Benedict on Admiralty, 7th ed (rev), vol 2A § 11 at 2-1.  See also Laveroni v Drury (1852) 8 Ex 166 at 170 [155 ER 1304 at 1306]; Nugent v Smith (1876) 45 LJ (CL) 697 at 701; Propeller Niagara v Cordes 62 US 7 at 22‑23 (1859).

11. To avoid this liability (sometimes spoken of as tantamount to that of an insurer[7]) carriers began to include more and wider exculpatory clauses in their bills of lading.  In England, it was held that carriers and shippers could agree to terms by which the carrier assumed virtually no liability, even for its own negligence[8].  In Australasian United Steam Navigation Co Ltd v Hiskens, Isaacs J said[9]:

    "Common law relations based on reasonableness and fairness were in practice destroyed at the will of the shipowners, and as fast as Courts pointed out loopholes in their conditions, so fast did they fill them up, until at last the position of owners of goods became intolerable."

    In the United States, however, the federal courts held that contractual clauses which purported to exonerate carriers from the consequences of their own negligence were void as against public policy[10], and strictly interpreted clauses which attempted to exonerate carriers for the failure to provide a seaworthy ship[11].  This did not help United States cargo interests when much of their trade was carried on British ships pursuant to bills of lading containing choice of forum clauses nominating England as the place in which suit must be brought.

    [7]Forward v Pittard (1785) 1 TR 27 at 33 [99 ER 953 at 956] per Lord Mansfield.

    [8]In re Missouri Steamship Company (1889) 42 Ch D 321.

    [9](1914) 18 CLR 646 at 671.

    [10]See, eg, Railroad Co v Lockwood 84 US 357 at 384 (1873); Phoenix Insurance Co v Erie and Western Transportation Co 117 US 312 at 322 (1886); Liverpool and Great Western Steam Co v Phenix Insurance Co 129 US 397 at 441‑442 (1889); Compania de Navigacion la Flecha v Brauer 168 US 104 at 117 (1897).

    [11]See, eg, The Caledonia 157 US 124 at 137 (1895); The Carib Prince 170 US 655 at 659 (1898).

12. These problems led, in the United States, to the Harter Act of 1893[12] ("the Harter Act").  This Act was a compromise between the conflicting interests of carriers and shippers.  A carrier could not contract out of its obligation to exercise due diligence to furnish a seaworthy vessel[13] or to relieve it from "liability for loss or damage arising from negligence, fault, or failure in proper loading, stowage, custody, care or proper delivery of any and all lawful merchandise or property committed to its or their charge"[14].

    [12]46 USC App §§ 190-196.

    [13]Harter Act § 2, 46 USC App § 191.

    [14]Harter Act § 1, 46 USC App § 190.

13. New Zealand, Australia and Canada each passed legislation modelled on the Harter Act:  the Shipping and Seamen Act 1903 (NZ), the Sea‑Carriage of Goods Act 1904 (Cth)[15] and the Water Carriage of Goods Act 1910 (Can).  All of these Acts, although modelled on the Harter Act, made some changes to the model.  Thus the 1904 Australian Act was, in some respects, more generous to cargo interests than the Harter Act[16].

    [15]Australasian United Steam Navigation Co Ltd v Hiskens (1914) 18 CLR 646 at 672 per Isaacs J.

    [16]For example, under the Harter Act, statutory exemptions from liability were available if the owner exercised due diligence to make the ship seaworthy and properly manned, equipped and supplied (§ 3, 46 USC App § 192).  By contrast, under the Sea-Carriage of Goods Act 1904 (Cth), the statutory exemptions were available only if the ship was at the beginning of the voyage seaworthy and properly manned, equipped and supplied (s 8(2)).

14. Pressure grew for uniform rules.  In February 1921, the British Imperial Shipping Committee recommended uniform legislation throughout the British Empire based on the Canadian Act[17].  Draft rules were prepared, considered and amended.  By 1922 the Comité Maritime International had adopted a draft.  The Diplomatic Conference on Maritime Law then took up the matter and in August 1924 the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading was concluded and opened for signature[18].  Australia enacted the Sea‑Carriage of Goods Act 1924 (Cth) as soon as the final diplomatic steps had been taken[19].

    [17]Sturley (ed), The Legislative History of the Carriage of Goods by Sea Act and the Travaux Préparatoires of the Hague Rules, (1990), vol 2 at 138.

    [18]Benedict on Admiralty, 7th ed (rev), vol 2A § 15 at 2-14.

    [19]The Act received the Royal Assent on 17 September 1924; the Convention was concluded and opened for signature on 25 August 1924.

15. The new rules quickly gained international acceptance, although United States legislation was not passed until 1936[20].  By the start of World War II "the overwhelming majority of the world's shipping was committed to the Hague Rules"[21].

    [20]Sturley, "The History of COGSA and the Hague Rules", (1991) 22 Journal of Maritime Law and Commerce 1 at 36‑55.

    [21]Benedict on Admiralty, 7th ed (rev), vol 2A § 15 at 2-17.  See also Sturley, "The History of COGSA and the Hague Rules", (1991) 22 Journal of Maritime Law and Commerce 1 at 56.

16. The Hague Rules represent a compromise about the allocation of risk of damage to cargo (a compromise which was different from what had been represented in domestic statutes).  Thus, to take only one example, shipping interests gained the advantage in Australia and the United States of elimination of the rule established in McGregor v Huddart Parker Ltd[22] and The Isis[23].  In those cases, the High Court of Australia and the Supreme Court of the United States held that a carrier could claim exemption from liability on the bases set out in the 1904 Australian Act and the Harter Act if (and only if) the carrier had complied with its obligation relating to the seaworthiness of the vessel, regardless of whether the cargo's loss or damage was caused by lack of seaworthiness.  Under the Hague Rules, however, some causal connection must be shown between the loss and the matter in respect of which due diligence was not demonstrated[24].

    [22](1919) 26 CLR 336.

    [23]May v Hamburg-Amerikanische Packetfahrt Aktiengesellschaft 290 US 333 (1933).

    [24]Art IV r 1.

17. The complexity of the history which we have touched on is such that, as Dixon J said in William Holyman & Sons Pty Ltd v Foy & Gibson Pty Ltd[25], "[t]he case law, English, Australian and American, dealing with other legislation thought to be in pari materia cannot be applied to the Hague Rules, except with great care and discrimination."

    [25](1945) 73 CLR 622 at 633.

18. Similarly, it may be that similar care and discrimination must be shown in applying decisions about marine insurance to the Hague Rules.  Many of the issues which arose under the exempting provisions of bills of lading issued before the Hague Rules find parallels with issues arising under policies of marine insurance.  Whether, however, principles developed in connection with one area should be applied in the other was open to argument for many years and may still be so.  In Arbib & Houlberg v Second Russian Insurance Co[26], the Court of Appeals for the Second Circuit identified as follows the distinction drawn in the United States between the two areas:

    "The phrase 'perils of the seas' occurs in bills of lading, where it is used as a ground of the carrier's exemption from liability, and it is also employed in policies of insurance in stating the ground of the insurance company's liability.  In the interpretation of the phrase when used in bills of lading, the courts have adopted great strictness, as the carrier is seeking exemption of liability; but in the interpretation of the phrase when used in insurance policies, the courts in many cases have given to it great elasticity of meaning."[27]

    Further, given the importance of obligations of utmost good faith in insurance law but the absence of any such obligation in a contract for carriage of goods, the possible difficulty resulting from any unthinking application of the decisions made in one area to problems arising in the other is obvious.  In addition, the term "perils of the seas" is given a defined meaning in the "Rules for Construction of Policy" contained in the Second Schedule to the Marine Insurance Act 1909 (Cth)[28].  These are not, however, issues which fall for decision in this case.

    [26]294 F 811 at 816 (2nd Cir 1923).

    [27]See also Couch, Cyclopedia of Insurance Law, 2nd ed (1982), vol 11 § 43:93.

    [28]Rule 7 states:

    "The term 'perils of the seas' refers only to fortuitous accidents or casualties of the seas.  It does not include the ordinary action of the winds and waves."

    The Hague Rules as an international agreement

19. It is necessary to recall that the rules were reached as a matter of international agreement.  Several things follow from their origin.

20. First, the rules necessarily take a form different from domestic statutes like the Harter Act (and equivalent Australian, Canadian and New Zealand Acts) because, while those domestic acts "were written to be read in the context of domestic law, the new rules were designed to create a self‑contained code (at least in the areas it covered) that would not require reference to domestic law"[29].

    [29]Benedict on Admiralty, 7th ed (rev), vol 2A § 15 at 2-12.

21. Secondly, because the rules were created by international agreement, it is not desirable to begin from an assumption that they are to be construed like a contract governed by Australian law or some other common law system.

22. Thirdly, while any action brought in a national court on a contract of carriage governed by that nation's law will be framed in a way that reflects that law, it cannot be assumed that the rules take the form which they do in order to reflect some particular cause of action or body of learning that is derived from, say, the common law.  Thus questions of burden of proof and the like are questions that may well arise in any action brought in a common law court but it cannot be assumed that the Hague Rules reflect, say, the rules about burden of proof as between a bailor and bailee for reward at common law.  For this reason, we very much doubt that principles established in cases like The Glendarroch[30] can be used as an aid to construing the Hague Rules[31].  They are principles which apply in common law actions between bailor and bailee but that is very different from using them as some guide to understanding what the Hague Rules mean.

    [30][1894] P 226.

    [31]cf The "Torenia" [1983] 2 Lloyd's Rep 210 at 216.

23. At common law, the contract of carriage is one of bailment for reward and under the common law system of pleading the plaintiff sufficiently pleaded its case by alleging non‑delivery of the goods.  It was for the carrier to set up a contractual exception, such as perils of the sea.  To that, the plaintiff might plead a contractual proviso to the exception, namely that the loss was the result of negligence of the carrier.  This meant that "negligence" as a matter of construction of the contract "came in as an exception on an exception"[32].  Accordingly, there must be real difficulty in construing the Hague Rules by reference to the common law rules of pleading, particularly when it is understood that, as to the substantive law, "pro tanto the Hague Rules upon their enactment displaced the common law"[33].

    [32]The "Torenia" [1983] 2 Lloyd's Rep 210 at 217.

    [33]Effort Shipping Co Ltd v Linden Management SA [1998] AC 605 at 622 per Lord Steyn.

    Reading the Hague Rules as a whole

24. The "perils of the sea" exception cannot be properly understood if it is divorced from its context.  It is an immunity created in favour of the carrier and the ship and it is necessary, then, to consider what are the responsibilities of the carrier.

25. Article III is headed "Responsibilities and Liabilities" and Art IV is headed "Rights and Immunities". The responsibilities cast on the carrier by Art III rr 1 and 2 may be seen as central to an understanding of the Hague Rules and their operation[34].  Those rules provide:

    "1.     The carrier shall be bound before and at the beginning of the voyage, to exercise due diligence to -

    (a)make the ship seaworthy;

    (b)properly man, equip and supply the ship; and

    (c)make the holds, refrigerating and cool chambers, and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage and preservation.

    2.     Subject to the provisions of Article IV, the carrier shall properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried."

    [34]Maxine Footwear Co Ltd v Canadian Government Merchant Marine Ltd [1959] AC 589 at 602-603.

26. Unlike r 2 of Art III, r 1 is not expressed as being subject to the provisions of Art IV. However, the text of r 1 of Art IV indicates that the carrier may establish a claim to exemption in respect of loss or damage that has resulted from unseaworthiness, by proving the exercise of due diligence on its part to make the ship seaworthy. Article IV r 1 states:

    "1.   Neither the carrier nor the ship shall be liable for loss or damage arising or resulting from unseaworthiness unless caused by want of due diligence on the part of the carrier to make the ship seaworthy, and to secure that the ship is properly manned, equipped and supplied, and to make the holds, refrigerating and cool chambers and all other parts of the ship in which goods are carried fit and safe for their reception, carriage and preservation in accordance with the provisions of paragraph 1 of Article III.

    Whenever loss or damage has resulted from unseaworthiness, the burden of proving the exercise of due diligence shall be on the carrier or other person claiming exemption under this section."

    The phrase "loss or damage arising or resulting from" appears also in Art IV r 2. The obligation of the carrier to properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried, which is imposed by Art III r 2, is subject to the denial by par (c) of Art IV r 2 of responsibility of the carrier for loss or damage arising or resulting from perils, dangers and accidents of the sea or other navigable waters.

27. Several things may be noted about the obligation imposed upon the carrier by Art III r 1 to make the ship seaworthy. First, it fixes the time at which the obligation operates as "before and at the beginning of the voyage". It therefore resolves the dispute that had been litigated in relation to time policies and voyage policies of marine insurance about whether a warranty of seaworthiness implied in such a policy was a warranty about the condition of the vessel at the time of sailing, or at the commencement of each of several distinct and different parts of a voyage, or was a warranty extending to the whole of the period of the policy[35].  Secondly, it is not an absolute warranty; the obligation is to exercise due diligence[36]. In cases where loss or damage has resulted from unseaworthiness, the burden of proving the exercise of due diligence is on the carrier (Art IV r 1). Thirdly, however, seaworthiness is to be assessed according to the voyage under consideration; there is no single standard of fitness which a vessel must meet[37].  Thus, seaworthiness is judged having regard to the conditions the vessel will encounter[38].  The vessel may be seaworthy for a coastal voyage in a season of light weather but not for a voyage in the North Atlantic in mid winter.

    [35]Dixon v Sadler (1839) 5 M & W 405 [151 ER 172]; affd (1841) 8 M & W 895 [151 ER 1303]; Gibson v Small (1853) 4 HLC 353 [10 ER 499].

    [36]cf Dixon v Sadler (1839) 5 M & W 405 at 414 [151 ER 172 at 175] per Parke B; McFadden v Blue Star Line [1905] 1 KB 697 at 703 per Channell J.

    [37]cf Burges v Wickham (1863) 3 B & S 669 at 683 [122 ER 251 at 256] per Cockburn CJ, 689-696 [258-261] per Blackburn J (implied warranty of seaworthiness in voyage policy of marine insurance); Kopitoff v Wilson (1876) 1 QBD 377 at 380-381 per Field J (implied warranty of seaworthiness in contract of affreightment); Gibson v Small (1853) 4 HLC 353 at 373 [10 ER 499 at 507] per Martin B (implied warranty of seaworthiness of owner of a "general ship").

    [38]Huddart Parker Ltd v Cotter (1942) 66 CLR 624 at 663 per Williams J; McFadden v Blue Star Line [1905] 1 KB 697; The Southwark 191 US 1 at 9 (1903).

28. Thus, definitions of seaworthiness found in the cases (albeit cases arising in different contexts) all emphasise that the state of fitness required "must depend on the whole nature of the adventure"[39].  The vessel must be "fit to encounter the ordinary perils of the voyage"[40]; it must be "in a fit state as to repairs, equipment, and crew, and in all other respects, to encounter the ordinary perils of the voyage insured"[41].

    [39]Burges v Wickham (1863) 3 B & S 669 at 695 [122 ER 251 at 260] per Blackburn J.

    [40]McFadden v Blue Star Line [1905] 1 KB 697 at 703 per Channell J.

    [41]Dixon v Sadler (1839) 5 M & W 405 at 414 [151 ER 172 at 175] per Parke B; affd (1841) 8 M & W 895 [151 ER 1303].

29. Further, if the question of seaworthiness is to be judged at the time that the vessel sails, it will be important to consider how it is loaded and stowed[42].  If the vessel is overladen it may be unseaworthy.  If it is loaded or stowed badly so, for example, as to make it unduly stiff or tender[43] it may be unseaworthy[44].

    [42]Kopitoff v Wilson (1876) 1 QBD 377 at 379 per Field J.

    [43]The trial judge found that ([1994] 1 Lloyd's Rep 455 at 463):

    "A tender ship will be much easier to incline and is slow and sluggish in returning to the upright position.  Therefore, the time period taken to roll from side to side will be comparatively long ... A stiff ship tends to be comparatively difficult to incline and will roll from side to side very quickly.  If a ship is thought to be too tender, this can be corrected by raising the ship's centre of gravity.  Conversely, if a ship is thought to be too stiff, this can be corrected by lowering the centre of gravity."

    [44]Kopitoff v Wilson (1876) 1 QBD 377 at 379 per Field J.

30. Nor is the standard of fitness unchanging.  The standard can and does rise with improved knowledge of shipbuilding and navigation[45].

    [45]Burges v Wickham (1863) 3 B & S 669 at 693 [122 ER 251 at 260] per Blackburn J; Tidmarsh v Washington Fire & Marine Insurance Co 23 Fed Cas 1197 at 1198 (DC Mass 1827) per Story J; Phillips, A Treatise on the Law of Insurance, 4th ed (1854) at 399; Arnould on Insurance, 2nd ed (1857) § 256 at 712‑713.

31. Fitness for the voyage may also encompass other considerations as, for example, the fitness of the vessel to carry the particular kind of goods or the fitness of crew, equipment and the like.  The question of seaworthiness, then, may require consideration of many and varied matters.

32. Some of these matters find direct expression in the Hague Rules. The obligations to "properly man, equip and supply the ship" and to "make the holds ... and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage and preservation" are found in Art III r 1(b) and (c).

33. What is important for present purposes is not the detailed content of the obligation to make the ship seaworthy, it is that 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.

34. Further, under the Hague Rules, not only must the carrier exercise due diligence to make the ship seaworthy (Art III r 1) with the burden of proving the exercise of due diligence whenever loss or damage arises or results from unseaworthiness (Art IV r 1), but "[s]ubject to the provisions of Article IV", it "shall properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried" (Art III r 2). Whether the goods are properly and carefully stowed must also depend upon the kinds of conditions which it is anticipated that the vessel will meet. The proper stowage of cargo on a lighter ferrying cargo ashore in a sheltered port will, no doubt, be different from the proper stowage of cargo on a vessel traversing the Great Australian Bight in winter.

35. Thus, the performance of the carrier's responsibilities under Art III rr 1 and 2 will vary according to the voyage and the conditions that may be expected.

36. In the present case, the trial judge found that when the Bunga Seroja sailed from Burnie she was fit in all respects for the voyage and that the respondent had properly and carefully loaded, handled, stowed, carried, kept and cared for the subject cargo[46]. It followed from those findings that the respondent, the carrier, had discharged its responsibilities under Art III rr 1 and 2. There was thus no loss or damage to the goods arising or resulting from unseaworthiness of the ship and no question arising under Art IV r 1 as to whether such loss or damage having occurred it had been caused by want of due diligence on the part of the carrier to make the ship seaworthy. Nor if, as Carruthers J found, the carrier had properly and carefully loaded, handled, stowed, carried, kept and cared for the subject cargo (thereby discharging its responsibility under Art III r 2) did any question arise of the immunity from what otherwise would be the responsibility of the carrier, by reason of the loss or damage having arisen or resulted from any act, neglect or default of the master in the navigation or in the management of the ship (Art IV r 2(a)) or from perils of the sea (Art IV r 2(c)). Nevertheless, his Honour went on to make express findings both that the damage to the cargo was occasioned by perils of the sea and that there was no neglect or default in the master or other servants of the respondent in the management of the ship.

    [46][1994] 1 Lloyd's Rep 455 at 471.

37. Notwithstanding the above, as the meaning and application of the "perils of the sea" immunity conferred by par (c) of Art IV r 2 was put in issue on the appeal, it is appropriate to deal further with it.

    Uniform construction

38. Because the Hague Rules are intended to apply widely in international trade, it is self‑evidently desirable to strive for uniform construction of them.  As has been said earlier, the rules seek to allocate risks between cargo and carrier interests and it follows that the allocation of those risks that is made when the rules are construed by national courts should, as far as possible, be uniform.  Only then can insurance markets set premiums efficiently and the cost of double insurance be avoided[47].

    [47]Sturley, "International Uniform Laws in National Courts:  The Influence of Domestic Law in Conflicts of Interpretation", (1987) 27 Virginia Journal of International Law 729 at 736.

39. In Gamlen, Mason and Wilson JJ note that[48]:

    "[t]here is a difference between the Anglo‑Australian conception of 'perils of the sea' and the United States‑Canadian conception.  According to the latter, 'perils of the sea' include losses to goods on board which are peculiar to the sea and 'are of an extraordinary nature or arise from irresistible force or overwhelming power, and which cannot be guarded against by the ordinary exertions of human skill and prudence':  The Giulia[49] adopting Story on Bailments, s 512(a).  In the United Kingdom and Australia it is not necessary that the losses or the cause of the losses should be 'extraordinary' (Carver, Carriage by Sea, vol 1, 12th ed (1971), s 161; Skandia Insurance Co Ltd v Skoljarev[50]).  Consequently sea and weather conditions which may reasonably be foreseen and guarded against may constitute a peril of the sea."

    When reference is made to occurrences identified as "extraordinary", the question arises as to the nature of the relativity which is contemplated.  Thus it has been said that the events which occurred "may be considered extraordinary as compared with an even voyage upon a placid sea; and yet [they] may be an entirely ordinary occurrence as compared with transportation by sea generally"[51].

    [48](1980) 147 CLR 142 at 165-166.

    [49]218 F 744 (2nd Cir 1914).

    [50](1979) 142 CLR 375 at 386-387. The Court was construing r 7 of the Rules for Construction of Policy set out in the Second Schedule to the Marine Insurance Act 1909 (Cth). Mason J stated (at 384) that this provision is identical with r 7 of the First Schedule to the Marine Insurance Act 1906 (UK) which was a codification of the antecedent common law.

    [51]Clinchfield Fuel Co v Aetna Insurance Co 114 SE 543 at 546 (SC 1922).

40. It may be that the difference between Anglo‑Australian and American‑Canadian construction of the "perils of the sea" exception is less than might appear from reference to cases such as The Giulia[52] or The Rosalia[53] - both decisions of the Second Circuit Court of Appeals.  In The Rosalia a peril of the sea was described[54] as "something so catastrophic as to triumph over those safeguards by which skillful and vigilant seamen usually bring ship and cargo to port in safety"[55].  More recent authority in the United States has, perhaps, placed less emphasis on whether what happened was extraordinary and catastrophic[56].  But whether or not that is an accurate reflection of more recent developments, there is great force in what Judge Learned Hand said in Philippine Sugar Centrals Agency v Kokusai Kisen Kabushiki Kaisha[57]:

    "The phrase, 'perils of the sea', has at times been treated as though its meaning were esoteric:  Judge Hough's vivid language in The Rosalia[58] ... has perhaps given currency to the notion.  That meant nothing more, however, than that the weather encountered must be too much for a well‑found vessel to withstand[59] ... The standard of seaworthiness, like so many other legal standards, must always be uncertain, for the law cannot fix in advance those precautions in hull and gear which will be necessary to meet the manifold dangers of the sea.  That Judge Hough meant no more than this in The Rosalia ... is shown by his reference to the definition in The Warren Adams[60] ... as the equivalent of what he said.  That definition was as follows:  'That term may be defined as denoting "all marine casualties resulting from the violent action of the elements, as distinguished from their natural, silent influence."'  It would be too much to hope that The Rosalia ... will not continue to be cited for more than this, but it would be gratifying if it were not."

    [52]218 F 744 (2nd Cir 1914).

    [53]264 F 285 (2nd Cir 1920).

    [54]264 F 285 (2nd Cir 1920) at 288 per Judge Hough.

    [55]See also The Warren Adams 74 F 413 (2nd Cir 1896); Duche v Brocklebank 40 F 2d 418 (2nd Cir 1930).

    [56]J Gerber & Co v SS Sabine Howaldt 437 F 2d 580 (2nd Cir 1971); Nichimen Co v MV Farland 462 F 2d 319 (2nd Cir 1972); Taisho Marine & Fire Insurance v MV Sea-Land Endurance 815 F 2d 1270 (9th Cir 1987); Thyssen Inc v SS Eurounity 21 F 3d 533 (2nd Cir 1994); Complaint of Tecomar SA 765 F Supp 1150 (SDNY 1991).

    [57]106 F 2d 32 at 34-35 (2nd Cir 1939).

    [58]264 F 285 at 288 (2nd Cir 1920).

    [59]Duche v Brocklebank 40 F 2d 418 (2nd Cir 1930).

    [60]74 F 413 at 415 (2nd Cir 1896).

41. We agree, with respect, that perils of the sea should not be treated as having some esoteric meaning.  Nor can its meaning be identified in a single all embracing definition capable of unvarying application to all circumstances.  There is no single criterion which, standing alone, will identify whether what happened is or is not properly to be called a peril of the sea.

42. It would be an odd reading of the "perils of the sea" exception to read it as exempting the carrier from liability only if the loss or damage were caused by something that was wholly unforeseen or unpredicted.  If the ship was fit to encounter the ordinary perils of the voyage, it was fit to encounter sea and weather conditions which could reasonably be foreseen and guarded against.  If, despite being fit to encounter those conditions and despite proper stowage and handling of the cargo, the cargo is damaged when the foreseen conditions happen, the question is which interests, carrier or cargo interests, are to bear the loss.  Holding the carrier liable would be to transform the obligation to use due diligence to make the ship seaworthy into an obligation very like the obligation of the owner of a general ship, which the whole history of the development of the rules in this area would deny.

43. The conduct of the trial in the present case illustrates the point that whether the "perils of the sea" exception applies will seldom be the only question in issue in a proceeding about loss of or damage to cargo.  The very fact that cargo has been damaged does not demonstrate want of seaworthiness.  At most it presents a case for inquiry - why has the cargo been damaged?  Was it for want of seaworthiness?  Was it for want of proper and careful handling and stowage?  Was it for reasons beyond the control of the carrier?  Evidence that is called at the trial of the proceeding will, inevitably, tend to emphasise particular features of the weather that was encountered and the way that the ship, its master and crew dealt with it.  Often there will be great emphasis upon whether the conditions were foreseeable (or as the United States cases say, "expectable"[61]).  If they were foreseeable or expectable, the cargo interests will point to the fact that the cargo was damaged and say that it follows that the ship was not fit to encounter those conditions or that the goods were not properly stowed and so on.  Often there will be emphasis upon whether the vessel suffered structural damage (as this vessel did)[62].  The suffering of structural damage may be eloquent testimony of the force of conditions encountered[63].

    [61]Complaint of Tecomar SA 765 F Supp 1150 at 1175 (SDNY 1991).

    [62]cf Philippine Sugar Centrals Agency v Kokusai Kisen Kabushiki Kaisha 106 F 2d 32 (2nd Cir 1939).

    [63]Benedict on Admiralty, 7th ed (rev), vol 2A § 153 at 15-8 - 15-12.

44. It is, then, hardly surprising that the features of evidence led at trial which were emphasised by one side or the other receive similar emphatic treatment in the reasons for judgment.  But all of the matters we have just mentioned are matters which show the need for very great care before extracting statements made in reasons for judgment about the operation of the "perils of the sea" exception and, divorced from the context in which they were written, seeking to apply them to different circumstances.  Expressions like "extraordinary", "catastrophic", "not foreseeable" or "not expectable" will often find a place in describing why properly stowed cargo on a ship fit for the ordinary perils of the voyage was damaged.  But they are not to be understood as limiting the "perils of the sea" exception to those events which are beyond the ordinary experience of mariners.

45. Again, as the Second Circuit Court of Appeals said of perils of the sea, in a marine insurance case, New Zealand Insurance Co v Hecht, Levis & Kahn[64]:

    "We may concede arguendo that they cover only 'extraordinary occurrences,'[65] ... but if so, while they do not include those injuries which are the run of all voyages, they certainly do include occasional visitations of the violence of nature, like great storms, even though these are no more than should be expected."

    Thus there are statements to be found in the United States authorities that a "perils of the sea" exception may apply even if the weather encountered was no more than expected.

    [64][1941] AMC 1188 at 1189 per L Hand, Chase and Clarke JJ.

    [65]Hazard v New England Marine Insurance Co 33 US 557 at 585 (1834).

46. Nor should statements made in the many English cases dealing with perils of the sea be read divorced from their context.  Some can, we think, be seen as no more than decisions about particular facts[66].  Others examine questions of onus of proof[67] and concurrent causation[68] which do not arise in this case.  Particular reference need be made to only two of the English cases - The "Xantho"[69] and Hamilton, Fraser & Co v Pandorf & Co[70].  Both cases pre‑dated the Hague Rules and concerned the construction of an exception in bills of lading in favour of "dangers and accidents of the seas".  We mention The "Xantho" for the distinction drawn by Lord Herschell between perils of the sea and other losses of which the sea is the immediate cause.  He said[71]:

    "I think it clear that the term 'perils of the sea' does not cover every accident or casualty which may happen to the subject‑matter of the insurance on the sea.  It must be a peril 'of' the sea.  Again, it is well settled that it is not every loss or damage of which the sea is the immediate cause that is covered by these words.  They do not protect, for example, against that natural and inevitable action of the winds and waves, which results in what may be described as wear and tear.  There must be some casualty, something which could not be foreseen as one of the necessary incidents of the adventure."

    The distinction drawn by his Lordship is important and must be borne in mind when considering the operation of the "perils of the sea" exception.

    [66]For example, The "Tilia Gorthon" [1985] 1 Lloyd's Rep 552.

    [67]The "Torenia" [1983] 2 Lloyd's Rep 210 at 216.

    [68]The "Torenia" [1983] 2 Lloyd's Rep 210 at 218-219; Gosse Millerd Ltd v Canadian Government Merchant Marine Ltd [1929] AC 223 at 241 per Viscount Sumner.

    [69]The "Xantho" (1887) 12 App Cas 503.

    [70](1887) 12 App Cas 518.

    [71](1887) 12 App Cas 503 at 509.

47. The second case, Pandorf, is worthy of note because it shows that there may be damage resulting from a peril of the sea despite there being no great catastrophic event.  It was held, there, that a cargo was damaged by "dangers and accidents of the seas" when, during the voyage, rats gnawed a hole in a pipe thus allowing water into the hold.  It is important to note, however, that it was admitted or proved that the ship was seaworthy and that the damage occurred without fault on the part of the crew[72].  Those facts being accepted, what other explanation for the occurrence could be given save that it was a peril of the sea?  If the decision appears strange to the modern eye, its oddity lies not in the conclusion reached but in the premises from which that conclusion proceeded:  that the ship was seaworthy and that the loss was not caused by default of the crew.  But we need not say whether those findings of fact would now be regarded as open.

    [72](1887) 12 App Cas 518 at 530 per Lord Herschell.

48. Many other cases were mentioned in argument or can be found in the books.  We think it desirable to touch briefly on only three other streams of authority.  First, it seems that in German law, a peril of the sea need not be an extraordinary event and that a storm of a certain force is regarded as a peril of the sea[73].  Similarly, in French law a peril of the sea need not be "unforeseeable and insurmountable"[74].  Finally, the Supreme Court of Canada held in Goodfellow Lumber Sales v Verreault[75] that:

    "... even if the loss is occasioned by perils of the sea, the ship owner is nevertheless liable if he failed to exercise due diligence to make the ship seaworthy at the beginning of the voyage and that unseaworthiness was a decisive cause of the loss."[76]

    [73]General Motors Overseas Operation v SS Goettingen 225 F Supp 902 at 904-905 (SDNY 1964).

    [74]Tetley, Marine Cargo Claims, 3rd ed (1988) at 441.

    [75][1971] SCR 522 at 528.

    [76]See also Canadian National Steamships v Bayliss [1937] SCR 261.

49. How then are these disparate streams of authority to be brought together? In our view one must begin by recognising that the inquiry is, in large part, a factual inquiry - is the carrier immune in respect of what otherwise would be its failure to discharge its responsibilities under Art III because the loss or damage to the goods arose or resulted from a cause which brings the carrier within the immunity conferred by Art IV r 2?

50. If cargo has been lost or damaged and if the vessel was seaworthy, properly manned, equipped and supplied, what led to the loss or damage? Did it arise or result from want of proper stowing (Art III r 2)? Did it arise from the "act, neglect or default of the master … or the servants of the carrier in the navigation or in the management of the ship" (Art IV r 2(a))? Or, did it result from some other cause peculiar to the sea?  The last is a peril of the sea.

51. In Gamlen Mason and Wilson JJ said that "sea and weather conditions which may reasonably be foreseen and guarded against may constitute a peril of the sea"[77].  The fact that the sea and weather conditions that were encountered could reasonably be foreseen, or were actually forecast, may be important in deciding issues like an issue of alleged want of seaworthiness of the vessel, an alleged default of the master in navigation or management, or an alleged want of proper stowage.  Similarly, the fact that the conditions encountered could have been guarded against may be very important, if not decisive, in considering those issues.  (Their decision may then make it unnecessary to consider the "perils of the sea" exception.)  But if it is necessary to consider the "perils of the sea" exception, the fact that the conditions that were encountered could reasonably be expected or were forecast should not be taken to conclude that question.  To that extent we agree with what was said by Mason and Wilson JJ in Gamlen.  Such an approach, even if it is different from the American and Canadian approach, better reflects the history of the rules, their international origins and is the better construction of the rules as a whole.

    [77](1980) 147 CLR 142 at 166.

    The present appeal

52. In the present case the trial judge held that there was no breach of Art III r 1 or r 2. That is, the trial judge rejected the contentions that due diligence had not been exercised to make the ship seaworthy, to properly man, equip and supply the ship and to "make the holds ... and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage and preservation"[78]. Indeed the trial judge found that in fact the vessel was fit in all respects for the voyage when it left port. Further, the trial judge rejected the contention that the carrier had not properly and carefully stowed the goods. It follows, as we have indicated earlier in these reasons, that the owner having failed to prove any breach of the carrier's responsibilities under Art III, the applicability of the defence of perils of the sea within the meaning of par (c) of Art IV r 2 did not strictly arise. However, in the light of the findings made at the trial, the conclusion that the damage to the cargo was occasioned by perils of the sea was correct. The fact that the weather encountered had been forecast before the vessel left port does not deny that conclusion.

    [78]Art III r 1(c).

53. It was submitted by the appellant that the master should not have left port or should have diverted so as to avoid the weather which was forecast.  The former contention appears not to have been made at trial.  The latter was, but was rejected.  The trial judge, having heard the evidence of experts called by both parties, said that he was "unable to conclude that any deficiencies in the conduct of the ship and her cargo by [the ship's master] have been demonstrated"[79].  There is no basis for departing from that finding.  Once it was made, the trial judge's conclusion that there was no neglect or default of the master or other servants of the carrier in the management of the ship or cargo was inevitable.  To the extent that the appellant now seeks to expand its contention to include the proposition that the vessel should not have left port, it is enough to say that, if the judge's finding does not meet the contention, it is a contention that could be made only with evidence to support it and there was none.

    [79][1994] 1 Lloyd's Rep 455 at 469.

54. Contrary to the appellant's contentions, nothing in this case turned on the allocation of the burden of proof.  The trial judge made the findings which he did in light of the evidence that was called on the issues.  As his Honour said, the case did not turn "upon any nice questions of onus of proof"[80].  It is, therefore, not necessary to consider those questions.

    [80][1994] 1 Lloyd's Rep 455 at 471.

55. The failure of the submissions by the appellant makes it unnecessary to consider grounds urged in support of the decision of the Court of Appeal by the respondent in its Notice of Contention.

56. The appeal should be dismissed with costs.

McHUGH J.

Issue

57. Special leave was granted in this case to determine whether the carrier of cargo, which was damaged after striking heavy weather in the Great Australian Bight, could rely on the immunity from liability given by Art IV r 2(c) of The Brussels Convention for the Unification of Certain Rules of Law Relating to Bills of Lading[81].  That Article gave immunity for damage "arising or resulting from ... perils, dangers and accidents of the sea".  The cargo in question had been shipped from Sydney to Keelung in Taiwan pursuant to bills of lading which incorporated the Hague Rules.  Those Rules regulate international contracts for the carriage of goods by sea and determine the responsibilities, liabilities, rights and immunities of the carrier[82].  They are incorporated into bills of lading issued in respect of cargo carried from an Australian port to overseas destinations by the Sea-Carriage of Goods Act 1924 (Cth)[83].

    [81]25 August 1924, 51 Stat 233 TS No 931, 120 LNTS 155.

    [82]Art II, the Hague Rules.

    [83]Now repealed and replaced by the Carriage of Goods by Sea Act 1991 (Cth) which incorporates the Hague Visby Rules, being the 1924 Hague Rules as amended by the Visby Protocol of 23 February 1968.

    Summary of conclusions

58. Upon the facts of the case, I think that the damage to the cargo did result from the perils of the sea.  Given other findings of fact by the trial judge, it was unnecessary for the learned judge to decide that issue.  Nevertheless, I could not accept the argument of the appellant, the cargo owner, as to the circumstances in which the perils of the sea defence is inapplicable.  The owner submits that the perils of the sea defence is applicable only when the perils, dangers or accidents of the sea "could not be reasonably foreseen and guarded against by the carrier".  Such a construction does not accord with the text of the Article which provides the immunity, and it is incompatible with the general scheme of the Hague Rules[84].  The foreseeability of a peril which results in damage is not determinative of whether a carrier can rely on the perils of the sea immunity conferred by those Rules.  The foreseeability of the peril and the possibility of guarding against its consequences are relevant factors in determining whether the damage results or arises from the perils of the sea.  But that is all.  In an appropriate case, the foreseeability of the peril and the failure to guard against it may show that the effective cause of the loss was the negligence of the carrier rather than the perils of the sea[85].  But foreseeability of the peril does not by itself prevent the carrier relying on the perils of the sea exemption from liability.

    [84]Shipping Corporation of India Ltd v Gamlen Chemical Co A/Asia Pty Ltd (1980) 147 CLR 142.

    [85]Gamlen (1980) 147 CLR 142.

    Procedural history

59. The appeal is brought by the owner of cargo against an order of the Court of Appeal of the Supreme Court of New South Wales.  That Court dismissed the owner's appeal against an order of the Supreme Court, Admiralty Division, entering a verdict for the carrier in an action brought by the owner for damages.  In the Supreme Court, the trial judge, Carruthers J[86], held that the carrier had not breached any of the obligations imposed upon it by the Hague Rules and was immune from liability because the damage to the cargo resulted from the "perils of the sea".  The Court of Appeal upheld his Honour's findings on fact and law.

    [86]The "Bunga Seroja" [1994] 1 Lloyd's Rep 455.

    Factual background

60. The owner contracted with the carrier to carry a cargo of aluminium coils of about five tonnes each from Sydney to Keelung.  The contract of carriage was evidenced by three bills of lading[87] each of which incorporated the Hague Rules.  The cargo was stowed in forward hold 5.  On the Burnie to Fremantle section of the journey, the ship encountered a series of violent storms while crossing the Great Australian Bight.  During the storms, eight above deck containers were swept overboard and the cargo of the owner, which was stowed below deck in containers, was damaged.

    [87]Dated 5 October 1989.

61. The Master of the ship gave evidence that, at the height of the storm, "we had about ten metres of a swell coming onto us and then we pitched into the sea ...  So that was one of the serious points and at one juncture I think we have recorded we rolled 25 degrees and at that juncture the edge of the ship actually was parallel to the sea.  The deck edge was immersed by water".  The Master said that:  "the weather and the wind was tremendous.  It was not good and safe to send any men, any of the seamen out, anybody out there because we would extremely endanger their life and chance of accident or of being swept overboard".  The wind was described as being force 11 on the Beaufort Scale of Windforces.  Force 11 indicates a "violent storm".  Force 12 is a hurricane.

62. The Master knew that the Great Australian Bight is renowned for severe weather.  For that reason, he said that, before leaving Sydney on 5 October 1989 he had planned for the worst possible weather conditions.  Before leaving on the Melbourne to Burnie section of the journey on 8 October 1989, he had received a weather bulletin containing a gale warning for the oceans south of the Australian continent.  The ship departed Burnie bound for Fremantle on 9 October 1989.  Further weather reports were received by the Master on 12 and 13 October 1989 during the journey from Burnie to Fremantle.  Those reports warned of gales, rough to very rough seas and a moderate to heavy swell.

63. The damage to the cargo appears to have occurred at the peak of the storms on 14 October 1989.  The ship also suffered some structural damage during the storms.  The immediate cause of the damage to the cargo was the pounding which the carrier's vessel suffered as the result of the very heavy weather which it encountered.  For that reason and because there was no negligence or breach of the Hague Rules on the part of the carrier, Carruthers J and the Court of Appeal held that the damage arose from or resulted from the perils of the sea.

64. The owner contends that the perils of the sea defence is applicable only when the perils, dangers or accidents of the sea "could not be reasonably foreseen and guarded against by the carrier".  The heavy weather in this case was both reasonably foreseeable and actually foreseen by the carrier.  That being so, the owner contends that the carrier cannot rely on the perils of the sea defence and is not exempt from liability for the damage which the cargo suffered.

    The proceedings at first instance

65. In its action in the Supreme Court[88] the owner pleaded that the damage was caused by the carrier's breach of its obligations under Art III rr 1 and 2 of the Hague Rules which require the carrier to exercise due diligence to make the ship seaworthy and properly man, equip and supply the ship and, "[s]ubject to the provisions of Article IV", to properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried. In its defence, the carrier relied upon Art IV r 2 which provides that a carrier is not responsible for damage "arising or resulting from: (a) act, neglect or default of the master ... or the servants of the carrier in the navigation or in the management of the ship, ... (c) perils, dangers and accidents of the sea, ... (n) insufficiency of packing".

    [88]The "Bunga Seroja" [1994] 1 Lloyd's Rep 455.

66. Carruthers J held that the correct approach in determining the perils of the sea issue was to consider whether any negligence by the carrier had been demonstrated.  He held that the two issues of negligence and perils of the sea had to be considered together[89].

    [89]The "Bunga Seroja" [1994] 1 Lloyd's Rep 455 at 462.

67. His Honour rejected the argument of the owner that the test for determining whether a storm constitutes a peril of the sea is whether the storm was expectable[90].  In rejecting this argument, his Honour relied upon this Court's approach in Shipping Corporation of India Ltd v Gamlen Chemical Co A/Asia Pty Ltd[91] and in particular on the passage in the joint judgment of Mason and Wilson JJ[92] which concludes:

    "Consequently sea and weather conditions which may reasonably be foreseen and guarded against may constitute a peril of the sea."

    [90]The "Bunga Seroja" [1994] 1 Lloyd's Rep 455 at 462.

    [91](1980) 147 CLR 142.

    [92](1980) 147 CLR 142 at 166.

68. Carruthers J said that[93]:

    "[T]he evidence satisfies me that, bearing in mind the anticipated weather conditions: (i) when the [ship] sailed from Burnie she was fit in all respects for the voyage; (ii) the defendant properly and carefully loaded, handled, stowed, carried, kept and cared for the subject cargo; and (iii) there was no neglect or default of the master or other servants of the defendant in the management of the ship or cargo.

    I am satisfied that the damage to the subject cargo was occasioned by perils of the sea, in that, the pounding of the ship by reason of the heavy weather caused the coils within the container to be dislodged and thereby sustain damage."

    [93]The "Bunga Seroja" [1994] 1 Lloyd's Rep 455 at 471.

The Court of Appeal

69. The Court of Appeal[94] affirmed the findings of the primary judge and held that he had correctly adopted and applied the reasoning of this Court in Gamlen[95].

    [94]Great China Metal Industries Co Ltd v Malaysian International Shipping Corporation Berhad (1996) 39 NSWLR 683.

    [95](1980) 147 CLR 142.

    Treaty interpretation

70. The Schedule to the Sea-Carriage of Goods Act enacts the Hague Rules as domestic law.  Prima facie, the Parliament intended that the transposed text should bear the same meaning in the domestic statute as it bears in the treaty[96].  The guiding principles of treaty interpretation are found in the Vienna Convention on the Law of Treaties[97].  Article 31 provides that a treaty must be interpreted in good faith, in accordance with the ordinary meaning of the terms in their context and in the light of its object and purpose.  Under Art 32, interpretative assistance may be gained from extrinsic sources in order to confirm the meaning resulting from the application of Art 31 or to determine the meaning of the treaty when the interpretation according to Art 31 leaves the meaning "ambiguous or obscure" or "leads to a result which is manifestly absurd or unreasonable".  Those extrinsic sources include the travaux préparatoires and the circumstances of the conclusion and history of the negotiation of the treaty.  Primacy must be given, however, to the natural meaning of the words in their context, as I recently pointed out in Applicant A v Minister for Immigration and Ethnic Affairs[98].

    [96]Koowarta v Bjelke-Petersen (1982) 153 CLR 168 at 265 per Brennan J.

    [97]The principles of interpretation of Treaties as contained in the Vienna Convention on the Law of Treaties may properly be considered even though the Vienna Convention entered into force after the Hague Rules because the Vienna Convention is a codification of the customary law rules of the interpretation of treaties:  Thiel v Federal Commissioner of Taxation (1990) 171 CLR 338 at 356.

    [98](1997) 71 ALJR 381; 142 ALR 331; see also Koowarta (1982) 153 CLR 168; The Commonwealth v Tasmania (The Tasmanian Dam Case) (1983) 158 CLR 1 at 93.

71. International treaties should be interpreted uniformly by the contracting States, especially in the case of treaties such as the Hague Rules whose aim is to harmonise and unify the law in cases where differing rules previously applied in the contracting States.  So far, however, uniformity of interpretation has not been a feature of the Hague Rules.  In particular, courts in the United States and Canada on one hand and in France, Germany, England and Australia on the other have diverged in their approach to what causes of damage can be described as perils of the sea for the purpose of the Hague Rules.  It may be, as Mason and Wilson JJ suggested in Gamlen, that the result of the United States and Canadian approach is not much different from that adopted in England and Australia.  Nevertheless, the approach in principle in the United States and Canada is different from that which exists in this country.

72. If uniformity of interpretation could be achieved by abandoning the approach taken by this Court in Gamlen, I would be in favour of overruling Gamlen.  But to overrule that decision would not yield uniformity - the approach of courts in England, Germany and France would remain different.  Moreover, the approach laid down in Gamlen for Australian courts is, in my opinion, in accordance with the text of the Hague Convention and probably accords with the intention of those who drafted the Convention.

    History of the Rules

73. The historic development of the Hague Rules and the travaux préparatoires[99] is described in some detail in the reasons for judgment of other members of the Court.  The aim of the Rules was to harmonise the diverse laws of trading nations and to strike a new arrangement for the allocation of risk between cargo and carrier interests.  However, the Hague Rules were a compromise rather than a codification of any accepted and uniform practice of shippers.  Consequently, one needs to be cautious about using the pre-existing law of any country in interpreting the Rules.  But that said, the fact is that the "immediate impetus for the Hague Rules came from the British Empire"[100].  Furthermore, British lawyers and representatives of British carrier and cargo interests dominated the Committees responsible for the drafting of the Rules which eventually became the Hague Rules[101]. That being so, it seems likely that the English common law rules provided the conceptual framework for the Hague Rules - certainly the key terms of Arts III and IV are the subject of much common law doctrine. The Rules should be interpreted with that framework in mind. That conclusion is strengthened by the fact that there appears to have been very little discussion at the Convention of Arts III r 2 and IV r 2(c). In particular, there was no discussion indicating that the perils of the sea defence was intended to be restricted in the manner for which the owner contends[102].

    [99]Collected in Sturley, The Legislative History of the Carriage of Goods by Sea Act and the Travaux Préparatoires of the Hague Rules, (1990) vols 1-3.

    [100]Sturley, The Legislative History of the Carriage of Goods by Sea Act and the Travaux Préparatoires of the Hague Rules, (1990) vol 1 at 8.

    [101]Sturley, The Legislative History of the Carriage of Goods by Sea Act and the Travaux Préparatoires of the Hague Rules, (1990) vol 1 at 8-14.

    [102]The perils of the sea defence was dealt with in two lines during the proceedings at the Hague.  See Sturley, The Legislative History of the Carriage of Goods by Sea Act and the Travaux Préparatoires of the Hague Rules, (1990) vol 1 at 259.

    The common law concept of perils of the sea

74. At common law, a shipowner who operated a "general ship"[103] was a common carrier, strictly liable for any loss or damage occurring during the voyage.  The only defences available were act of God, the inherent vice of the goods, act of public enemies, shipper's fault and perhaps necessity to jettison cargo to save the ship.  Moreover, even when a ship owner did not hold itself out as a common carrier, contracts for the carriage of goods by sea were subject to warranties which practically equated the shipowner with common carriers.  Thus, there was an implied warranty that the ship was seaworthy[104].  The warranty commenced with the voyage, and the ship had to be fit to carry its cargo safely and ride out any weather likely to be encountered on the voyage[105].  When it sailed, the vessel had to be in such condition and its cargo so stowed that it was reasonably fit to encounter the ordinary perils that might be expected at that time of the year[106].

    [103]A general ship was one where the ship was available to carry the goods of anyone wishing to ship them on the voyage in question.  Laveroni v Drury (1852) 8 Ex 166 at 170 [155 ER 1304 at 1306].

    [104]Lyon v Mells (1804) 5 East 428 [102 ER 1134]; Kopitoff v Wilson (1876) 1 QBD 377; Steel v State Line Steamship Company (1877) 3 App Cas 72.

    [105]Cohn v Davidson (1877) 2 QBD 455.

    [106]Steel (1877) 3 App Cas 72 at 91; see also Stanton v Richardson (1875) 33 LT 193; 45 LJCP 78 where ship pumps were unable to remove molasses which might be expected to drain from a cargo of wet sugar with the result that the sugar was damaged; Kopitoff (1876) 1 QBD 377 where armour plates being carried became loose in heavy weather and went through the side of the ship.

75. The shipowner was therefore liable for failure to deliver goods in the state in which they were received unless it could bring itself within one of a number of narrowly defined exceptions.  But even these defences were not available if the shipowner had contributed to the loss by negligence[107], by deviation[108] or by providing an unseaworthy ship[109].

    [107]The "Freedom" (1871) LR 3 PC 594; 8 Moore NS 29 [17 ER 224]; Notara v Henderson (1872) LR 7 QB 225.

    [108]Davis v Garrett (1830) 6 Bing 716 [130 ER 1456]; Internationale Guano en Superphosphaatwerken v Robert Macandrew & Co [1909] 2 KB 360.

    [109]Lyon (1804) 5 East 428 [102 ER 1134]; Steel (1877) 3 App Cas 72.

76. To overcome their potential liability, carriers naturally sought to exempt themselves by exculpatory clauses in the bill of lading. A clause exempting the carrier from loss or damage resulting from the perils of the sea became common, as did many of the immunities later set out in Art IV r 2 of the Hague Rules[110].  From early in the history of the common law of insurance, marine policies had also specifically exempted the carrier from liability for losses arising from perils of the sea, the standard "perils" clause for Lloyd policies having been settled as long ago as 1779[111].  The law reports of the United Kingdom and the United States during the nineteenth century contain numerous cases concerned with bills of lading and marine policies raising the issue whether loss or damage to goods resulted from the perils of the sea.  Consequently, those who drafted the Hague Rules had available to them a vast body of case law indicating the circumstances in which the perils of the sea immunity could exempt the carrier from liability.  Consciously or unconsciously, the effect of the common law rules must have shaped the Convention's thinking as to when and in what circumstances immunities such as the perils of the sea would exempt the carrier from liability.

    [110]This defence sprang up gradually after the reign of Elizabeth I.  It was certainly known by the reign of Charles I (see Pandorf v Hamilton (1886) 17 QBD 670 at 684).

    [111]Parks, The Law of Marine Insurance and Average, (1987) vol 1 at 272.

77. For a loss to fall within the exception, the peril had to be "of the sea" and not merely on the seas[112].  A peril of the sea was something which was fortuitous, accidental or unexpected and not something that was usual such as the damage caused in the ordinary course of navigation by the natural action of the sea, wind or waves[113].  As Lord Justice Scrutton pointed out in P Samuel & Co v Dumas[114]:

    "[T]here must be a peril, an unforeseen and inevitable accident, not a contemplated and inevitable result; and it must be of the seas, not merely on the seas.  The ordinary action of the winds and waves is of the seas, but not a peril."

    [112]Cullen v Butler (1816) 5 M & S 461 [105 ER 1119]; The "Xantho" (1887) 12 App Cas 503; Hamilton Fraser & Co v Pandorf & Co (1887) 12 App Cas 518 at 527; P Samuel & Co v Dumas (1922) 13 Lloyd's Rep 503 at 505.

    [113]The "Xantho" (1887) 12 App Cas 503 at 509.

    [114](1922) 13 Lloyd's Rep 503 at 505.

78. In Canada Rice Mills Ltd v Union Marine and General Insurance Co[115], Lord Wright gave some examples.  His Lordship said:

    "Where there is an accidental incursion of seawater into a vessel at a part of the vessel, and in a manner, where seawater is not expected to enter in the ordinary course of things, and there is consequent damage to the thing insured, there is prima facie a loss by perils of the sea.  The accident may consist in some negligent act, such as improper opening of a valve, or a hole made in a pipe by mischance, or it may be that sea water is admitted by stress of weather or some like cause bringing the sea over openings ordinarily not exposed to the sea or, even without stress of weather, by the vessel heeling over owing to some accident, or by the breaking of hatches or other coverings.  These are merely a few amongst many possible instances in which there may be a fortuitous incursion of seawater.  It is the fortuitous entry of the sea water which is the peril of the sea in such cases."

    [115][1941] AC 55 at 68-69.

79. In England, the term "perils of the sea" had the same meaning in bills of lading as it had in policies of marine insurance[116].  That seems to have been the position in the United States although in that country the burden of proof is different in insurance cases from that in contracts of carriage[117].  Furthermore in marine policies, if the peril of the sea was the immediate or proximate cause of the loss, the insurer would be liable even though the entry of seawater or other harm causing act was the result of negligence unless the policy provided otherwise[118].  In an action on a bill of lading, the perils of the sea immunity also exempted the carrier from liability even though its negligence had contributed to the loss if the bill exempted the carrier from its own or servants' negligence.  In The "Freedom"[119], the Judicial Committee of the Privy Council said:

    "The words in the Bills of lading - 'dangers of the Seas'- must, of course, be taken in the sense in which they are used in a Policy of Insurance.  It is a settled rule of the Law of Insurance, not to go into distinct causes, but to look exclusively to the immediate and proximate cause of the loss."

    Thus, damage to cargo by the entry of seawater arising as the result of the negligence of the shipowner or its servants was held to be damage from a peril of the sea where the bill of lading excused the negligent acts of the servants[120].

    [116]The "Freedom" (1871) LR 3 PC 594 at 601-602; 8 Moore NS 29 at 39 [17 ER 224 at 227]; Hamilton Fraser (1887) 12 App Cas 518 at 524-528; The "Xantho" (1887) 12 App Cas 503 at 510, 517; Canada Rice Mills [1941] AC 55 at 67-68.

    [117]Parks, The Law of Marine Insurance and Average, (1987) vol 1 at 274.  But see Arbib & Houlberg v Second Russian Insurance Co 294 F 811 at 816 (2nd Cir 1923).

    [118]Davidson v Burnand (1868) LR 4 CP 117; The "Xantho" (1887) 12 App Cas 503; Trinder Anderson & Co v Thames and Mersey Marine Insurance Company [1898] 2 QB 114; Mountain v Whittle [1921] 1 AC 615.

    [119](1871) LR 3 PC 594 at 601-602; 8 Moore NS 29 at 39 [17 ER 224 at 227].

    [120]Blackburn v Liverpool, Brazil and River Plate Steam Navigation Company [1902] 1 KB 290 where the ship's engineer negligently allowed seawater to enter a tank and damage sugar.

80. At common law, the real question was whether the peril of the sea or the action of the shipowner or those for whose acts the shipowner was responsible was the proximate cause of the loss or damage[121].

    [121]The "Freedom" (1871) LR 3 PC 594 at 601-602; 8 Moore NS 29 at 38-39 [17 ER 224 at 227]; and see the direction to the jury given by Blackburn J in Kopitoff (1876) 1 QBD 377 at 379-380.

81. Furthermore, at common law, damage arising from perils of the sea was not confined to damage caused by the entry of seawater into the ship.  Thus, damage resulting from a collision occurring at sea without fault on the part of the master could be caused by the perils of the sea[122].  However, loss or damage caused by a collision which is the result of negligence of the master was not caused by a peril of the sea[123].  Other causes of loss or damage to goods or to the ship which have been held to be caused by perils of the sea include piracy[124], rats gnawing a hole in a pipe causing seawater to escape and damage cargo[125], overheating causing damage to cargo as the result of lack of ventilation brought about by the necessity to close the ventilators for seven days during a storm of exceptional severity and duration[126], grounding in a harbour by reason of a heavy swell[127], taking in seawater while being towed as the result of strong swells[128], listing of a ship while being loaded causing loss of portion of cargo[129], the unexplained sinking in smooth water of a ship shortly after leaving port[130] and running aground[131].

    [122]Buller v Fisher (1799) 3 Esp 67 [170 ER 540]; Martin v Crokatt (1811) 14 East 465 [104 ER 679]; The "Xantho" (1887) 12 App Cas 503; Reischer v Borwick [1894] 2 QB 548; William France, Fenwick & Co Limited v North of England Protecting and Indemnity Association [1917] 2 KB 522 (collision with wreck which had been torpedoed shortly before the collision).

    [123]cf Lloyd v General Iron Screw Collier Co (1864) 3 H & C 284 [159 ER 539].

    [124]Pickering v Barkley (1648) Style 132 [82 ER 587].

    [125]Hamilton Fraser (1887) 12 App Cas 518.

    [126]The Thrunscoe [1897] P 301.

    [127]Fletcher v Inglis (1819) 2 B & Ald 315 [106 ER 382].

    [128]Hagedorn  v Whitmore (1816) 1 Stark 157 [171 ER 432].

    [129]The Stranna [1938] P 69.

    [130]Reynolds v North Queensland Insurance Co (1896) 17 LR(NSW) 121; W Langley & Sons Ltd v Australian Provincial Assurance Association Ltd (1924) 24 SR(NSW) 280; Skandia Insurance Co Ltd v Skoljarev (1979) 142 CLR 375.

    [131]The "Zinovia" [1984] 2 Lloyd's Rep 264; cf The Board of Management of the Agricultural Bank of Tasmania v Brown (1957) 97 CLR 503.

82. Causes of loss or damage which were held not to be caused by perils of the sea included imperfect insulation causing seawater to disable a transatlantic telegraph cable[132] and the grounding of a vessel when the tide ebbed[133].

    [132]Paterson v Harris (1861) 1 B & S 336 [121 ER 740].

    [133]Magnus v Buttemer (1852) 11 CB 876 [138 ER 720]. But see Fletcher (1819) 2 B & Ald 315 [106 ER 382] where the vessel grounded in a harbour whose bed was uneven and the ebbing of the tide was accompanied by a heavy swell.

The scheme of the Hague Rules

83. The Hague Rules set out the responsibilities and liabilities, rights and immunities of the carriers in relation to the loading, handling, stowage, carriage, custody, care and discharge of goods[134].  They apply to every contract of carriage of goods by sea[135]. Article III describes the responsibilities and liabilities of the carrier and the cargo interests while Art IV establishes the relevant exceptions and immunities to these responsibilities and liabilities. The "perils, dangers and accidents of the sea" exception in Art IV r 2(c) must be construed therefore within the overall scheme of the Hague Rules. To the scheme of those Rules, I now turn.

    [134]Art II.

    [135]Art II.

84. The relevant Articles of the Hague Rules are as follows:

    "ARTICLE III

    Responsibilities and Liabilities

    1.  The carrier shall be bound before and at the beginning of the voyage, to exercise due diligence to –

    (a)    make the ship seaworthy;

    (b)    properly man, equip and supply the ship; and

    (b)make the holds, refrigerating and cool chambers, and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage and preservation.

    2.  Subject to the provisions of Article IV, the carrier shall properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried.

    ...

ARTICLE IV

Rights and Immunities

1.     Neither the carrier nor the ship shall be liable for loss or damage arising or resulting from unseaworthiness unless caused by want of due diligence on the part of the carrier to make the ship seaworthy, and to secure that the ship is properly manned, equipped and supplied, and to make the holds, refrigerating and cool chambers and all other parts of the ship in which goods are carried fit and safe for their reception, carriage and preservation in accordance with the provisions of paragraph 1 of Article III.

Whenever loss or damage has resulted from unseaworthiness, the burden of proving the exercise of due diligence shall be on the carrier or other person claiming exemption under this section.

2.     Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from -

(a)act, neglect or default of the master, mariner, pilot or the servants of the carrier in the navigation or in the management of the ship;

(b)  fire, unless caused by the actual fault or privity of the carrier;

(c)perils, dangers and accidents of the sea or other navigable waters;

(d)  act of God;

(e)act of war;

(f)act of public enemies;

(g)arrest or restraint of princes, rulers or people, or seizure under legal process;

(h)quarantine restrictions;

(i)act or omission of the shipper or owner of the goods, his agent or representative;

(j)strikes or lock-outs or stoppage or restraint of labour from whatever cause, whether partial or general;

(k)riots and civil commotions;

(l)saving or attempting to save life or property at sea;

(m)wastage in bulk or weight or any other loss or damage arising from inherent defect, quality or vice of the goods;

(n)insufficiency of packing;

(o)insufficiency or inadequacy of marks;

(p)latent defects not discoverable by due diligence;

(q)any other cause arising without the actual fault or privity of the carrier, or without the fault or neglect of the agents or servants of the carrier, but the burden of proof shall be on the person claiming the benefit of this exception to show that neither the actual fault or privity of the carrier nor the fault or neglect of the agents or servants of the carrier contributed to the loss or damage."

Seaworthiness

85. 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[136]. This interpretation is consistent with the omission to make Art III r 1 subject to Art IV r 2, in contrast with Art III r 2, which deals with the proper care of goods carried and is specifically expressed to be "[s]ubject to the provisions of Article IV". It also seems consistent with the understanding of the parties at the time of agreement of the convention as recorded in the travaux préparatoires[137].

    [136]Paterson Steamships Ltd v Canadian Co-operative Wheat Producers Ltd [1934] AC 538 at 548; Maxine Footwear Co Ltd v Canadian Government Merchant Marine Ltd [1959] AC 589 at 602-603. Note that Art III r 2 is subject to Art IV r 1, but this clause merely restates the obligation in the negative form.

    [137]See the discussion by Mr Rudolf and Lord Phillimore during proceedings at the Palace of Peace, the Hague, 30 August 1921, Sturley, The Legislative History of the Carriage of Goods by Sea Act and the Travaux Préparatoires of the Hague Rules, (1990) vol 1 at 250-251:

    "Mr Rudolf: [discussing Art III r 1 and Art IV r 2] I can conceive a case of a vessel going to sea in an unseaworthy condition, and the operation of the sea on that vessel leads to a loss, and apparently under that section 2 that is a loss which the shipowner is exempt from.

    Lord Phillimore:  No; the law is well settled the other way ....  These are old and well settled exceptions.

    Mr Rudolf:  I know they are settled, but I was wondering whether the effect of making those two paragraphs is going to alter what is the recognised law.  That is what I have in mind.

    Lord Phillimore:  No."

86. In Art III r 1, the term "seaworthiness" should be given its common law meaning. Nothing in the Rules generally or in the travaux préparatoires suggests otherwise.  It was a term well known at common law and, for the reasons I have given, it is probable that that was the meaning that the drafters of the Rules intended it to have.  What constitutes "seaworthiness" depends on the voyage to be undertaken[138].  The ship must be seaworthy to undertake the voyage planned and to face any expected weather or storms[139].  If, as was the case here, the ship is expected to sail through an area of sea which is renowned for its severe weather, appropriate precautions must be taken to ensure that the ship is fit to undertake that voyage both in respect of the ship itself and the stowage of the cargo.  The carrier must exercise due diligence at the start of the voyage to make the ship seaworthy in the light of the anticipated weather conditions[140].

    [138]Huddart Parker Ltd v Cotter (1942) 66 CLR 624 at 663.

    [139]McFadden v Blue Star Line [1905] 1 KB 697 at 703.

    [140]Kopitoff (1876) 1 QBD 377 at 379.

203. In the Fifth Circuit, in Waterman Steamship Corp v United States Smelting, Refining and Mining Co[340] the Court of Appeals adopted the Second Circuit's definition in The Giulia[341] and held that if the weather was foreseeable there could be no peril of the sea.

     [340]155 F 2d 687 at 692 (5th Cir 1946).

     [341]218 F 744 (2nd Cir 1914).

204. In RT Jones Lumber Co v Roen Steamship Co[342] the Second Circuit Court
     of Appeals was content to rely on what had been said in The Giulia[343]:

     "Perils of the seas are understood to mean those perils which are peculiar to the sea, and which are of an extraordinary nature or arise from irresistible force or overwhelming power, and which cannot be guarded against by the ordinary exertions of human skill and prudence."

     [342]270 F 2d 456 at 458 (2nd Cir 1959).

     [343]218 F 744 at 746 (2nd Cir 1914).

205. In Taisho Marine and Fire Insurance v M/V Sea-Land Endurance[344] the Ninth Circuit Court of Appeals acknowledged some differences in the language variously used by the courts:

     "While 'perils of the sea' is a term of art not uniformly defined, the generally accepted definition is 'a fortuitous action of the elements at sea, of such force as to overcome the strength of a well-found ship or the usual precautions of good seamanship.'[345] Case law fails to set out a bright line to determine whether cargo was lost by a peril of the sea.  Rather, the cases indicate that the validity of the statutory defense depends on the nature and cause of the loss under the particular facts of a case".

     [344]815 F 2d 1270 at 1272 (9th Cir 1987).

     [345]Gilmore & Black, The Law of Admiralty, 2nd ed (1975) § 3-32 at 162; Philippine Sugar Centrals Agency v Kokusai Kisen Kabushiki Kaisha 106 F 2d 32 at 34-35 (2nd Cir 1939); RT Jones Lumber Co v Roen Steamship Co 213 F 2d 370 at 373 (7th Cir 1954); States Steamship v United States 259 F 2d 458 at 460-461 (9th Cir 1958), cert. denied, 358 US 933 (1959);

206. In States Steamship v United States[346] the Ninth Circuit Court of Appeals concluded that the storm in which the ship there sank, was not a peril of the sea.  The decision was based on testimony that storms of that magnitude were neither unusual nor unexpected in those waters at that time of year.

     [346]259 F 2d 458 at 461-462 (9th Cir 1958).

     Statements in the texts

207. The editors of Scrutton on Charterparties and Bills of Lading[347] cite the decision of the Supreme Court of Canada in Goodfellow together with English authorities, including the common law case of The "Xantho", as authority for the proposition that the term "perils of the sea" whether in policies of insurance or bills of lading or charterparties, means[348]:

     "any damage to the goods carried caused by sea-water, storms, collision, stranding, or other perils peculiar to the sea or to a ship at sea, which could not be foreseen and guarded against by the shipowner or his servants as necessary or probable incidents of the adventure".

     [347]Boyd et al, Scrutton on Charterparties and Bills of Lading, 20th ed (1996) at 225 n 40.

     [348]Boyd et al, Scrutton on Charterparties and Bills of Lading, 20th ed (1996) at 225.

208. In Marine Cargo Claims[349], Professor Tetley states:

     "Whether or not a storm is a peril depends on the intensity of the storm and the weather conditions which could normally be expected in that geographic area, at that time of year.

     … a peril of the sea may be defined as some catastrophic force or event that would not be expected in the area of the voyage, at that time of the year and that could not be reasonably guarded against".

     [349]Tetley, Marine Cargo Claims, 3rd ed (1988) at 431-432.

209. This definition was cited with approval by Reed J in the Canadian case of Canastrand Industries v The Lara S[350].  Her Honour's decision was affirmed on appeal, although the citation of Tetley was not referred to in the appellate court.

     [350][1993] 2 FC 553 at 575.

210. Payne and Ivamy's, Carriage of Goods by Sea[351] refers to Goodfellow with approval as explanatory of English law.

     [351]13th ed (1989) at 187 n 7.

211. The authorities and texts cited to the Court (apart from Gamlen) do provide a formidable body of authority to support the appellant's case, and it is not a sufficient answer to say that the cases and the statements of principle extracted from them depend simply upon the facts of those cases.  There is too much similarity of language for that. 

212. On the other side, the respondent was not able to point to as large a body of authority to further its case.  We were referred to The "Hellenic Dolphin"[352] and The "Theodegmon"[353] which, although not directly on point, do support the respondent's contention that in the absence of proof of appropriate diligence, the carrier will in general, not be liable.  One case which offers some comfort to the respondent is Keystone Transports Ltd v Dominion Steel & Coal Corporation Ltd[354].  The carriage there was governed by the Water Carriage of Goods Act 1936 (Can) which adopted the Hague Rules.  The Supreme Court of Canada (Rinfret, Kerwin, Hudson and Taschereau JJ, Bond ad hoc dissenting) took the view that a loss may be attributable to a peril of the sea by the violent action of the wind and waves if the damage could not be attributed to someone's negligence.  Taschereau J, after a review of the authorities said[355]:

     "From these authorities it is clear that to constitute a peril of the sea the accident need not be of an extraordinary nature or arise from irresistible force.  It is sufficient that it be the cause of damage to goods at sea by the violent action of the wind and waves, when such damage cannot be attributed to someone's negligence."

     [352][1978] 2 Lloyd's Rep 336.

     [353][1990] 1 Lloyd's Rep 52.

     [354][1942] SCR 495.

     [355][1942] SCR 495 at 505.

213. If the matter rested there, the respondent might be hard pressed to hold its judgment.

214. In general however, the judgments in the cases and the texts do not attempt detailed analyses of the Rules.  In Gamlen, such an exercise was partially undertaken by Mason and Wilson JJ, but only to the extent necessary on the facts of that case[356].  An analysis of this kind has also been undertaken by the House of Lords in the recent case of Effort Shipping, but again, as was necessary on the facts of that case.  There, their Lordships had to consider the operation and effect of Art IV r 6, and, in doing so, turned their minds to the relationship that this Rule has to other Rules and the larger context in which that Rule appeared[357].

     [356](1980) 147 CLR 142 at 160-165.

     [357][1998] AC 605 at 613-615 per Lord Lloyd, 620-625 per Lord Steyn, 626-627 per Lord Cooke of Thorndon.

215. In my opinion, the correct approach is to look at the Rules and to seek to give them meaning as a coherent whole in the same way as Pollock CB construed the Bill of Lading in Laveroni v Drury[358].

     [358](1852) 8 Ex 165 [155 ER 1304]. See Pollock CB at 171, 1306, "But, however eminent their [foreign texts and cases] authority, and however worthy of attention and consideration their works are, we cannot act upon them in contradiction to the plain and clear meaning of the words of the bill of lading which is a contract between the parties."

     The application of the Hague Rules to this case

216. Article I of the Rules contains various definitions.

217. Article II, which is headed "Risks", is in this form:

     "Subject to the provisions of Article VI, under every contract of carriage of goods by sea, the carrier, in relation to the loading, handling, stowage, carriage, custody, care and discharge of such goods, shall be subject to the responsibilities and liabilities, and entitled to the rights and immunities hereinafter set forth."

218. The introductory words, "Subject to the provisions of Article VI", are important but so too is the subsequent subjection of what might otherwise appear to be an absolute obligation (absent a different agreement) of that obligation to the immunities set forth.

219. Article III then prescribes the specific duties of a carrier:

     "1. The carrier shall be bound before and at the beginning of the voyage, to exercise due diligence to –

     (a)make the ship seaworthy;

     (b)properly man, equip and supply the ship; and

     (c)make the holds, refrigerating and cool chambers, and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage and preservation.

     2.    Subject to the provisions of Article IV, the carrier shall properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried.

     3.    After receiving the goods into his charge, the carrier, or the master or agent of the carrier, shall, on demand of the shipper, issue to the shipper a bill of lading …

     4.    Such a bill of lading shall be prima facie evidence of the receipt by the carrier of the goods as therein described …

     5.    The shipper shall be deemed to have guaranteed to the carrier the accuracy at the time of shipment of the marks, number, quantity and weight, as furnished by him, and the shipper shall indemnify the carrier against all loss, damages and expenses arising or resulting from inaccuracies in such particulars …

     6.    Unless notice of loss or damage and the general nature of such loss or damage be given in writing to the carrier or his agent at the port of discharge before or at the time of the removal of the goods … such removal shall be prima facie evidence of the delivery by the carrier of the goods as described in the bill of lading …

     7.    After the goods are loaded the bill of lading to be issued by the carrier, master or agent of the carrier, to the shipper shall, if the shipper so demands, be a 'shipped' bill of lading …

     8.    Any clause, covenant or agreement in a contract of carriage relieving the carrier or the ship from liability for loss or damage to or in connexion with goods arising from negligence, fault or failure in the duties and obligations provided in this Article or lessening such liability otherwise than as provided in these Rules, shall be null and void and of no effect.

     A benefit of insurance or similar clause shall be deemed to be a clause relieving the carrier from liability."

220. Again, one provision, r 2, is stated to be subject to another set of provisions, Art IV which provides:

     "1.     Neither the carrier nor the ship shall be liable for loss or damage arising or resulting from unseaworthiness unless caused by want of due diligence on the part of the carrier to make the ship seaworthy, and to secure that the ship is properly manned, equipped and supplied, and to make the holds, refrigerating and cool chambers and all other parts of the ship in which goods are carried fit and safe for their reception, carriage and preservation in accordance with the provisions of paragraph 1 of Article III.

     Whenever loss or damage has resulted from unseaworthiness, the burden of proving the exercise of due diligence shall be on the carrier or other person claiming exemption under this section.

     2.      Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from –

     (a)act, neglect or default of the master, mariner, pilot or the servants of the carrier in the navigation or in the management of the ship;

     (b)fire, unless caused by the actual fault or privity of the carrier;

     (c)perils, dangers and accidents of the sea or other navigable waters;

     (d)act of God;

     (e)act of war;

     (f)act of public enemies;

     (g)arrest or restraint of princes, rulers or people, or seizure under legal process;

     (h)quarantine restrictions;

     (i)act or omission of the shipper or owner of the goods, his agent or representative;

     (j)strikes or lock-outs or stoppage or restraint of labour from whatever cause, whether partial or general;

     (k)riots and civil commotions;

     (l)saving or attempting to save life or property at sea;

     (m)wastage in bulk or weight or any other loss or damage arising from inherent defect, quality or vice of the goods;

     (n)insufficiency of packing;

     (o)insufficiency or inadequacy of marks;

     (p)latent defects not discoverable by due diligence;

     (q)any other cause arising without the actual fault or privity of the carrier, or without the fault or neglect of the agents or servants of the carrier, but the burden of proof shall be on the person claiming the benefit of this exception to show that neither the actual fault or privity of the carrier nor the fault or neglect of the agents or servants of the carrier contributed to the loss or damage.

     3.      The shipper shall not be responsible for loss or damage sustained by the carrier or the ship arising or resulting from any cause without the act, fault or neglect of the shipper, his agents or his servants.

     4.      Any deviation in saving or attempting to save life or property at sea, or any reasonable deviation shall not be deemed to be an infringement or breach of these Rules or of the contract of carriage, and the carrier shall not be liable for any loss or damage resulting therefrom.

     5.      Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connexion with goods in an amount exceeding One hundred pounds per package or unit, or the equivalent of that sum in other currency, unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading.

     This declaration if embodied in the bill of lading shall be prima facie evidence, but shall not be binding or conclusive on the carrier.

     By agreement between the carrier, master or agent of the carrier and the shipper another maximum amount than that mentioned in this paragraph may be fixed, provided that such maximum shall not be less than the figure above named.

     Neither the carrier nor the ship shall be responsible in any event for loss or damage to or in connexion with goods if the nature or value thereof has been knowingly misstated by the shipper in the bill of lading.

     6.      Goods of an inflammable, explosive or dangerous nature to the shipment whereof the carrier, master or agent of the carrier, has not consented, with knowledge of their nature and character, may at any time before discharge be landed at any place or destroyed or rendered innocuous by the carrier without compensation, and the shipper of such goods shall be liable for all damages and expenses directly or indirectly arising out of or resulting from such shipment.

     If any such goods shipped with such knowledge and consent shall become a danger to the ship or cargo, they may in like manner be landed at any place or destroyed or rendered innocuous by the carrier without liability on the part of the carrier except to general average, if any."

221. In my opinion, a detailed analysis of the Rules leads to a different result from what might be reached on the basis of the statements made in many of the cases cited and does, with respect, form a sound basis for the observations made by Mason and Wilson JJ in Gamlen. It is immediately obvious that the Rules are intended to confer a very wide range of immunities upon carriers. Rule 1 strongly conveys the notion that liability should be sheeted home to the carrier only in respect of a want of appropriate care (due diligence) on its part. In some respects therefore, the specific instances of immunities set out in r 2, might be regarded as superfluous. Each of items 2(d), (e), (f), (g), (h), (j), (k), (l), (m), (n) and (p) in all or most cases would involve no fault on the part of the carrier. The notion that the carrier is not to be liable without actual fault is reinforced by (q). It seems to be going a long way, as (a) does, to exculpate the carrier from vicarious liability for its servants or agents in managing and navigating the ship. However the antidote may be that the carrier does have a duty "to properly man … the ship" pursuant to Art III r 1(b) and by doing that should be regarded as having fulfilled its obligations in that regard to the shipper.

222. Art IV r 1 expressly imposes an onus (of proving due diligence) on the carrier when loss or damage has resulted from unseaworthiness. However, r 2 (except for r 2(q)) which operates to exonerate the carrier is silent as to who bears the onus, notwithstanding that most of the excepting events would be ones peculiarly within the knowledge of the carrier.

223. Rule 3, which provides for an exemption of liability in favour of the shipper for non-negligent damage to the ship or the carrier, also makes no reference to the burden of proof.

224. In Effort Shipping, Lord Steyn speaks of the difficulties occasioned by the language used, and the futility of reference, in the search for the meaning of the Rules, to the history of their formulation and contemporaneous commentary on them[359].  In the end, the words have to be construed in their context and according to their ordinary language without resort to those other materials and against the background of the cases that have been decided since their passage into law in the various jurisdictions.

     [359][1998] AC 605 at 622-625.

225. As I have already said, there is authority for, and much to commend, the proposition that the expression "perils of the sea" should be confined to unforeseen or exceptional events, or overwhelming force of the sea: in short, events that could not be reasonably guarded against.  The fact that advances in shipbuilding technology, communications, and navigational aids provide the means of significantly reducing exposure to the perils of the sea however defined, make such a proposition in modern times more attractive still[360].  Similarly, more reliable methods of assessing the force of the elements are now becoming available.  The Beaufort Scale derives from the necessarily subjective observations of Rear-Admiral Sir Francis Beaufort over his long career at sea for 44 years before the first recorded use in an official log, by Fitzroy and Darwin aboard the Beagle on 22 December 1831, of the wind force scale which bears his name[361].

     [360]cf the observations of Hobhouse J in The "Torenia" [1983] 2 Lloyd's Rep 210 at 215.

     [361]Friendly, Beaufort of the Admiralty: The Life of Sir Francis Beaufort 1774-1857, (1977) at 142-147.  See also Crowder, The Wonders of the Weather, AGPS (1995) at 84: The Scale was devised having regard to the effect of various conditions at sea upon a "fully rigged man-of-war" of the early nineteenth century; Garbett, "Admiral Sir Francis Beaufort and the Beaufort Wind Scale" (1926) 52 Quarterly Journal of the Royal Meteorological Society 161; National Weather Service Chicago, The Beaufort Scale, http://taiga.geog.niu.edu/nwslot/beaufort.html.

226. However the thrust of the relevant Rules taken as a whole is, in my opinion clear.  They are designed principally to exonerate shippers and more particularly, carriers who have not been guilty of want of due diligence or fault.  Accordingly, in cases in which the carrier has acted as expressly required by the Rules, and is not guilty of negligence, and, events at sea can be shown to be the cause of the loss and damage, the carrier should be entitled to immunity.

227. This interpretation does not however resolve the problems of proof and onuses that may confront the parties and judges in shipping cases.  For example, it is possible to conceive of cases in which neither party can be shown, as a matter of proof, to have been negligent or wanting in diligence, and yet damage is caused to cargo[362].  Add to that scenario an absence of any evidence of such conditions at sea as would cause the damage.  Does it therefore necessarily follow that the damage must have been caused by [non specific] perils of the sea?  I am inclined to think not: however I express no concluded view on this matter as that is not this case.

     [362]cf Muddle v Stride (1840) 9 Car & P 380 at 382-383 [173 ER 877 at 879], in which Lord Denman CJ summed up to a jury upon the basis that in such a case at common law, a plaintiff shipper should fail:

     "If, on the whole, in your opinion, it is left in doubt what the cause of the damage was, then the defendants will be entitled to your verdict; because you are to see clearly that they were guilty of negligence before you can find your verdict against them.  If it turns out, in the consideration of the case, that the injury may as well be attributable to the one cause as to the other, then also the defendants will not be liable for negligence."

228. The conclusion that I have independently reached, does accord with the conclusion and statements of principle of Mason and Wilson JJ in Gamlen[363] which, is a recent, considered decision in this Court.

     [363](1980) 147 CLR 142 at 166.

229. I would also adopt with respect their Honours' important pronouncement, which should go some way towards resolving difficulties of proof and onuses, as the evidentiary onus in a case shifts, that the carrier's entitlement to rely upon Art IV r 2(c)[364] will require it to be assessed by reference to all of the circumstances of the case[365].  So too, the form and order of pleading referred to by Lord Esher in The Glendarroch[366] and endorsed by Mason and Wilson JJ[367] throws light upon the correct procedure and the carrying of onuses in a case of this kind.

     [364]And it follows, the other items in Art IV r 2.

     [365](1980) 147 CLR 142 at 165.

     [366][1894] P 226.

     [367](1980) 147 CLR 142 at 168.

230. There is a further question: whether, to obtain the benefit of an indemnity under Art III, the excepting cause must be the exclusive cause.  If it were necessary to decide that matter here, I would be strongly inclined to adopt the reasoning of Mason and Wilson JJ[368] in Gamlen, that to obtain the benefit of the perils of the sea, those perils must be the exclusive cause of the loss or damage.  This view better accords, I think, with the justice of most situations, and might go some way towards restoring the balance of the Rules, tilted as they somewhat unfairly are, in favour of carriers in these times of immensely improved marine technology and communications.  In practice there will be probably few situations in which a peril of the sea will be an exclusive cause of loss or damage.

     [368](1980) 147 CLR 142 at 163 and 164; see also 156 per Stephen J.

231. In this case, on the findings of the trial judge, his Honour and the Court of Appeal correctly held for the respondent.

232. I would therefore dismiss the appeal with costs.