The onus of proof in A cargo claim arts iii iv of the hague-visby rules and the uncitral draft convention

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

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

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

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

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

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

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

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

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

13. Onus of proof and care of cargo Art III r 2: �Subject to the provisions of Article IV, the carrier shall properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried. �Properly� means: �in accordance with a sound system and that may mean more than carrying the goods carefully�: Albacora SRL v Westcott & Laurance Line Ltd [1966] 2 Lloyd�s Rep 53 per Lord Reid Depends on the conditions which it is anticipated the vessel will meet: Great China (1998) 196 CLR 161

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

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

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

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

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

21. Recent developments: the draft convention Draft Arts 14-19 significantly alter the regime in Arts III & IV of the Hague-Visby Rules Draft Art 18 � deals with carrier�s liability & which party bears the onus of proof

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

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

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

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

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

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

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

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