Case: Shipping Corporation of India Ltd v Gamlen Chemical Co (A/sia) Pty Ltd [1980] HCA 51 ; (1980) 147 CLR 142
Outcome: discussed
The obligation of the carrier under Art 3 r 2 of the amended Hague Rules is a compound one. It requires not only that the carrier exercise reasonable care in the discharge of the goods, but also that it have a sound system for discharging them: Albacora SrL v Westcott &amp; Laurance Line Ltd [1966] 2 Lloyd's Rep 53 at 58 per Lord Reid, 62 per Lord Pierce and 64 per Lord Pearson; Shipping Corporation of India Ltd v Gamlen Chemical Co (A/sia) Pty Ltd [1980] HCA 51 ; (1980) 147 CLR 142 at 163 per Mason and Wilson JJ (with whom Gibbs J and Aickin J agreed at 149, 168); C V Sheepvaartonderneming Ankergracht v Stemcor (A/sia) Pty Ltd (2007) 160 FCR 342 at 370 [88] per Ryan and Dowsett JJ, 405 [229]-[230], 413 [266], [268] per Rares J. Dorval did not lead any evidence of the system, if any, for discharge of a cargo such as Yubase 6 from the Golden Lucy I . 80 Article 3 r 2 is, of course, expressly subject to the provisions of Art 4. The interaction between the two articles was discussed recently by the Full Court in the Ankergracht 160 FCR 342. It is well established that in order for a carrier to rely on the exceptions contained in Art 4 r 2 it must not be negligent or at fault, that is to say in breach of, relevantly, Art 3 r 2: Gamlen Chemical 147 CLR at 152, 154 per Stephen J, 164-165 per Mason and Wilson JJ; Great China Metal Industries Co Ltd v Malaysian International Shipping Corporation Berhad [1998] HCA 65 ; (1998) 196 CLR 161 at 193 [85] , 195-196 [91]-[95] per McHugh J, 216-219 [143]-[146] per Kirby J, 243 [228] per Callinan J, see too at 180-181 [49]-[50] per Gaudron, Gummow and Hayne JJ; the Ankergracht 160 FCR at 413-414 [270] per Rares J. 89 Article 4 r 2(i) provides an exception to the carrier's liability in matters in which the damage arises or results from something which is beyond the control of the carrier or its servants: Gamlen Chemical 147 CLR at 164 per Mason and Wilson JJ. The damage here did not arise or result from something beyond the control of the ship or its servants. Quite the contrary, the damage arose because the ship's officers and crew could easily have stopped the discharge but did not. Nor did they explain their failure to give evidence. In Gamlen Chemical [1980] HCA 51 ; 147 CLR 142, Mason and Wilson JJ were considering the Hague Rules, but their comments are equally applicable to the amended Hague Rules. They said that the scheme of the Rules was to impose certain responsibilities and liabilities on the carrier of goods by sea from which it could not contract out, by force of Art 3 r 8, but to give it immunity in respect of loss or damage caused otherwise than by negligence for which it is responsible, save in special cases to which they referred: Gamlen Chemical 147 CLR at 165. 90 In Gamlen Chemical 147 CLR at 163-164 Mason and Wilson JJ considered the question of concurrent causes of a loss under the Hague Rules. There, the carrier argued that even though in breach of Art III r 2, the goods had not been properly stowed, it was entitled to the benefit of the exception in Art IV r 2(c) because the vessel had encountered conditions which amounted to a peril of the sea. The trial judge had found that had the goods been properly stowed, the damage would not have occurred. Thus, the negligent stowage and the perils of the sea were concurrent causes of the loss. Mason and Wilson JJ said: 'It seems to us that an accurate reflection of these findings requires one to treat the two concurrent causes of the loss as inseparable, and therefore joint. The loss would not have occurred but for the faulty stowage, but on the other hand, the faulty stowage did not cause the loss by itself. On this view, and treating the matter strictly as a matter of construction of the rule, it cannot be said that the damage resulted from a peril of the sea, and the appellant fails.' 91 Thus, the carrier could not escape liability by proving the existence of a circumstance excepting it under Art IV r 2 where its negligence in breach of Art III r 2 had caused damage to the cargo. Mason and Wilson JJ said that a construction which excepted the carrier from liability in that scenario would denude the obligation imposed by Art III r 2 of much of its substance. They recognised that a number of the exceptions in Art IV r 2 involved situations which were beyond the control of the carrier or its servants. They said that any reference in that context to negligence was inappropriate because the events excepted were, of their nature, ones which occurred independently of negligence on the part of the carrier. 92 Mason and Wilson JJ explained ( Gamlen Chemical 147 CLR at 165): 'To the extent to which Art. III, r. 2, by using the word "properly" imposes on the carrier a more onerous duty than an absence of negligence then clearly to that extent the immunities described in Art. IV, r. 2 operate to qualify the liability otherwise resting on the carrier; indeed, if this is not the case then as Temperley points out in his monograph, Carriage of Goods by Sea Act 1924 , 3rd ed, p 48, pa.r (q) is not an immunity at all, for it would do no more than shift the onus of proof on to the carrier. On the other hand, if such a line of reasoning seeks to extract a greater symmetry of purpose than the Rules viewed in their entirety will admit, then the proper observation is simply that it must not be thought that the effect of the prefatory words to Art. III, r. 2 is to compel some impact on the scope and operation of the obligation imposed by that rule from every provision in Art. IV.' 93 At the end of the day, the question of whether a carrier can rely upon an immunity under Art IV r 2 must be answered by reference to all the circumstances of a particular case: Gamlen Chemical 147 CLR at 165 per Mason and Wilson JJ. Where the facts disclose that a loss was caused by the concurrent effects of an excepted and non-excepted circumstance, the carrier remains liable. The carrier will only escape liability if it proves that the loss or damage was caused by an excepted circumstance alone: cannot The Torenia [1983] 2 Lloyd's Rep 210 at 218; see also Tetley W, Marine Cargo Claims (3 rd ed, 1988) p 328. 99 Accordingly, I am of opinion that the predominant responsibility for the damage lies with Dorval. And, even if Hilditch's and Dorval's responsibility for the continuation of the discharge while contamination was occurring on board the Golden Lucy I were equal, Gamlen Chemical [1980] HCA 51 ; 147 CLR 142 requires me to find Dorval liable for damages. 100 Relevantly Art 3 r 6 provides: '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 into the custody of the person entitled to delivery thereof under the contract of carriage, or, if the loss or damage be not apparent, within three days, such removal shall be prima facie evidence of the delivery by the carrier of the goods as described in the sea carriage document.' 101 Immediately following completion of the discharge, Mr Kanagasabai delivered to the master at about 9.00am on 9 July a second notice of protest. He said to the master that he was giving him a 'consolidated notice' and that he had protested previously but had included everything in the latest notice. The notice stated, relevantly: 'We ... draw your attention to the following irregularities. 1. Prior to discharge No 2 pump strainer was inspected and noted to contain Molasses. 2. At the commencement of discharge, manifold samples were noted to be discoloured and contained substance like Molasses. 3. Approximately 12000 litres were slopped in to shore slop tanks due to cloudy samples. 4. Throughout the discharge, ship and shore manifold samples drawn were cloudy. 5. There were delays to discharge because of cleaning No 2 pump strainer and slopping to minimize contamination. Details of any claim will be submitted in due course if considered necessary. Should you or your agent wish to make contact on any matter arising out of this notice, please contact our principals or ourselves.' The master recorded on the notice: 'The substance like molasses is incorrect. The quantity counts only from Caleb Brett Surveyor.'