THE ONUS OF PROOF IN A CARGO CLAIM – ARTICLES III AND IV OF THE HAGUE-VISBY RULES AND THE UNCITRAL DRAFT CONVENTION

The Hon Justice Steven Rares

The Hague-Visby Rules:  History
1.		In 1924 the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading formalised a set of rules, known as the Hague Rules, for carriage of goods by sea.  In 1968 a Protocol to Amend the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading was agreed which was designed to modernise the Rules’ provisions.  The Hague Rules as amended by that Protocol are known as the ‘Hague-Visby Rules’.
2.		In Australia, the Hague-Visby Rules are given the force of law by their inclusion in Schedule 1 of the Carriage of Goods by Sea Act 1991 (Cth).
3.		Articles III and IV of the Hague-Visby Rules evolved from the Harter Act 1893 (US).  Congress provided a regime which limited the ability of ship owners to derogate from their common law liability as common carriers.  The Dominion parliaments of Australia, New Zealand and Canada in the first decade of the 20th Century enacted their own versions of the Harter Act.  As more nations enacted legislation, a number of ship owners, particularly in the then British Empire, expressed concern that they would be subject to different regimes for damage caused to cargo in many different countries of the world. 
4.		Professor Sturley explained that the stimulus for the Hague Rules was because shipowners wanted international uniformity.  Negotiations among those involved in the shipping industry and a number of governments followed which had the goal of establishing uniformity in shipowners’ liability.
5.		In the early 1920s a number of initiatives were taken.  First, the Imperial Government in London agreed with its Dominion governments to enact a uniform law based on the voluntary set of rules drafted at The Hague in 1921 by participants in the shipping industry.  More international conferences followed.  The most important were meetings of the Comité Maritime International in London in early October 1922 and the International Conference on Maritime Law in Brussels later that month.  One of the persons who chaired sessions was Monsieur Louis Franck.  He was a member of the Belgium Cabinet (Minister for Colonial Affairs), President of the CMI, and a maritime lawyer.  He chaired the 1922 Brussels meetings.  During the Brussels meetings, Monsieur Franck said:
‘There is no intention of establishing an all-embracing code covering the affreightment or carriage of goods by sea. What is intended is the formulation of a limited number of rules relevant to bills of lading … 

The measures we claim to apply to them [the international rules] are basically limitations on the right of the shipowner to exonerate himself from liability. These measures are therefore made primarily in the interest of the holder of the bill of lading and, consequently, in favor of those whose interest is in the cargo. If it is important to regulate these matters through an international convention, there are today already many countries that have legislated on them. The United States took the lead and several British dominions followed suit. If others do likewise, the result will be that legislation that restricts the freedom to contract and deals specifically with bills of lading will find itself with widespread application and it will be a matter of supreme irritation that this legislation is not the same everywhere. All these measures ultimately mean a more onerous burden for shipowning interests and certain advantages for cargo interests. 

I have myself concluded that such legislation is justified. In reality it comes back, pure and simple, to what has always been the law concerning liability the world over since Roman Law. The person who undertakes the carriage of goods is a debtor to a certain body; he must provide proof that he has paid his debt and consequently, delivered the goods on the same terms as he received them. If he delivers them in bad condition, he is assumed to be liable since he has not properly discharged his duty, but it behooves him to prove that there were genuine reasons beyond his control for this. The draft convention does no more than reestablish this rule … ’

6.		The travaux préparatoires for the Hague Rules indicated a consciousness of the delegates that they were drafting a basis for allocating a burden of proof on either the shipowner or the cargo owner in certain situations.  Sir Leslie Scott KC, then Solicitor-General of Great Britain, said that in Art IV r 1 ‘… we are saying that each time loss or damage occurs as a result of unseaworthiness the burden of proof concerning the exercise of due diligence will fall on the carrier’.  He said that the meaning of ‘unseaworthiness’ should be the same in Art III r 1 and IV r 1.  He also pointed out that the list of exceptions in what was to be Art IV r 2 came from the English law and stressed the need for a common meaning to be given under the different systems of law.
7.		On 16 June 2008, at its 41st Session, the United Nations Commission on International Trade Law (UNCITRAL) commenced the final negotiation of the text of the Draft Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea following the approval of the text and title of the draft convention by the UNCITRAL Third Working Group (Transport Law) at the conclusion of its 21st Session in Vienna on 24 January 2008.  The draft convention was approved earlier this month.  It is proposed that it will be signed in Rotterdam next year and will be called ‘the Rotterdam Rules’.
8.		The draft convention is intended to replace the various international conventions allocating responsibility between carriers of goods by sea and cargo interests – the Hague Rules, the Hague-Visby Rules, the United Nations Convention on the Carriage of Goods by Sea, 1978 and the United Nations Convention on International Multimodal Transport of Goods, 1980.
9.		UNICITRAL’S secretary-general said that the draft had significant safeguards and provisions to ensure shippers were not deprived of their basic rights.  However, the European Shippers’ Council criticised the draft convention as representing a serious danger of a return to ‘… a pre-Hague Rules free-for-all’ to the detriment of the small and medium sized shipper.  That view echoed the Australian Government’s official position that:
  ‘…the draft convention may be read as giving greater weight to carrier interests rather than striking an equitable balance between the interests of shippers and carriers.  While some shippers have sufficient negotiating power to be able to conclude fair contracts, Australia’s primary concern is how the draft convention will impact on small and medium shippers.’
  
10.		No doubt the world’s admiralty and maritime lawyers are looking forward to exploring who is right.  Will the Rotterdam Rules, like the curate’s egg, be good in parts?
Onus of Proof and Articles III and IV of the Hague-Visby Rules
11.		The distinction in Australian law between the onus of proof and the order of proof in cargo claims until recently had been clear following the unanimous decision of the High Court in Shipping Corporation of India Ltd v Gamlen Chemical Co (A/Asia) Pty Limited.  That case concerned the Hague Rules, but the High Court’s reasoning is equally applicable to the amended Hague (Hague-Visby) Rules.  There, Mason and Wilson JJ, with whom, on this point, Gibbs and Aickin JJ concurred (and Stephen J found to the same effect) approved of the following statement of Samuels JA in the New South Wales Court of Appeal:
‘The correct sequence of pleading is set out in The Glendarroch in the judgment of Lord Esher M.R., where his Lordship makes it plain that the plaintiffs must first prove the contract and the non-delivery or the delivery in a damaged condition, to which the defendants may plead an exception, leaving it then to the plaintiffs to reply “there are exceptional circumstances, viz. that the damage was brought about by the negligence of the defendants' servants, and it seems to me that it is for the plaintiffs to make out that second exception”. And his Lordship re-emphasizes that the proper sequence of pleading must follow the burden of proof.’

12.		Recently, Ryan and Dowsett JJ referred to this reasoning in CV Sheepvaartonderneming Ankergracht v Stemcor (A/sia) Pty Limited.  They noted the discussion on this topic by Gaudron, Gummow and Hayne JJ in Great China Metal Industries Co Ltd v Malaysian International Shipping Corporation, Berhad (The Bunga Seroja)  who said that they very much doubted whether the common law rules about burden of proof between bailor and bailee for reward applied to the Hague Rules and in particular to the application of Arts III and IV.
13.		Ryan and Dowsett JJ pointed out that those more recent observations formed no part of the ratio decidendi of Great China.  Both their Honours and I applied, as had the primary judge, Emmett J, another approach suggested by the decisions in Great China and Gamlen Chemical that, in order for a carrier to rely on the exceptions contained in Art IV r 2, it must not be negligent or at fault, that is to say in breach of Art III r 1 or Art III r 2.  It is well established that in order for a carrier to rely on the exceptions contained in Art IV r 2, it must not be negligent or at fault, that is to say in breach of Art III r 1 or Art III r 2.

14.		More recently, in Hilditch Pty Limited v Dorval Kaiun KK Allsop J observed on the result of the Great China case.  He said that there is something less than clarity in the issue of onus of proof in cargo claims in Australia because there is the possibility of interplay between Art III and IV of the Hague-Visby Rules.  He said that, in theory, this could lead to difficulties for plaintiffs in knowing precisely what they should plead.  Is it simply adequate in a cargo claim for the plaintiff to plead damage to the goods, following an allegation of receipt in good order and condition, or should a plaintiff go further and plead breaches of Art III r 1 and/or r 2?
15.		Clarity and uniformity are noble objectives, particularly for law makers.  In the appositely named decision of Riddle v The King, Griffith CJ, having referred to the great trouble counsel had taken in supplying authorities to the Court so as to elucidate the common law, said:
‘Now, that being the state of the law, whatever it was (because, as I was once reminded in England by a distinguished lawyer, the law is always certain although no-one may know what it is), the legislature … passed the … Act.’ 

I do not pretend to know what the law is any more than Sir Samuel Griffith’s interlocutor.

Issues raised by Articles III and IV
16.		Article III r 1 imposes an obligation on the carrier before and at the beginning of the voyage to exercise due diligence to make the ship seaworthy, properly man, equip and supply it and make the holds, refrigerating and cool chambers, or other parts of the ship in which goods are carried, fit and safe for their reception, carriage and preservation. 
17.	The significant feature of Art III r 1 is that it derogates from the common law’s requirement of an absolute obligation on a shipowner to make the vessel seaworthy before she sailed.  The authorities have interpreted Art III r 1 as requiring the shipowner to act to a relatively high standard, but recognise that it is to be relieved from situations where, for example, latent defects manifest themselves during the course of the voyage.
18.	Article III r 2 imposes an obligation, made subject to the provisions of Art IV, on the carrier to properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried.  This is the first suggestion in Art III: that there is an interplay between the obligations of the carrier in relation to the goods and its exceptions from liability which Art IV provides. 
19.	It is important to remember that Art III r 3 requires the carrier to issue a bill of lading to the shipper.  The bill of lading must contain statements of, among other things, a sufficient description of the goods as to enable them to be identified, the number of packages or pieces or quantity or weight of the goods and, critically, their apparent order and condition.  Next, Art III r 4 provides that a bill of lading is to be prima facie evidence of the receipt by the carrier of the goods in accordance with the description in the bill of lading.  Article III r 4 also stipulates that proof to the contrary is not allowed when the bill of lading has been transferred to a third party acting in good faith.
20.	In other words, the prima facie evidence provided by a clean bill of lading records receipt of the cargo in apparent good order and condition, and will become an absolute representation by the carrier when the goods are transferred in the ordinary course of trade by delivery of the bill of lading to a third party acting in good faith.  The necessity for the provision is obvious.  A bill of lading is treated as a document of title to the goods.  Delivery of a clean bill of lading, indicating that the goods are in apparent good order and condition, enables third parties to acquire ownership of the goods based on that representation of their condition.
21.	And, Art III r 8 provides that any attempt to derogate from the obligations imposed on a carrier by Art III, other than as permitted under the Hague-Visby Rules, will have no effect.
22.		Further, Art IV r 1 defines the extent of liability imposed on a carrier where the vessel is unseaworthy.  It excepts the carrier from liability unless the loss or damage arising or resulting from unseaworthiness was caused by a want of due diligence on the part of a carrier to comply with this obligation under Art III r 1.  Article IV r 1 goes on to provide that 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 that article.  That is the regime envisaged in the 1922 conferences. 
23.	The very terms of Art IV r 1 show that the question of who has to show what, was clearly a live issue to those who drafted the original convention.
24.	Article IV r 2 provides a lengthy list of exceptions to a carrier’s liability.  The rule commences by stating that neither the carrier nor the ship is responsible for loss or damage arising from, among other things:
•	actions, negligence or omissions of the master or crew in the navigation 	or management of the ship;
•	fire, unless caused by the actual fault or privity of the carrier;
•	perils, dangers and accidents of the sea;
•	acts of God, acts of war;
•	quarantine restriction;
•	acts or omissions of the shipper or owner of the goods, his agent or 	representative;
•	wastage in bulk or weight or any other loss or damage arising from 	inherent defect, quality or vice of the goods;
•	insufficiency of packaging;
•	latent defects not discoverable by due diligence;
•	any other cause arising without the actual fault or privity of the carrier:  but in this case, the burden of proof is expressly put on the person claiming the benefit of the exception to show the absence of actual fault, or privity of the carrier, or that its servants or agents contributed to the loss or damage.
The Ankergracht Cases
25.	In the Ankergracht two cargoes of steel coils, which were particularly sensitive to moisture, were shipped from Yokohama to Australia.  There is a regular shipping trade in such cargo and the sensitivity of the coils was known.  In the winter months in Yokohama, the weather conditions are such that it almost always rains from time to time, and there is a real possibility that water will enter the holds in the time it takes for the hatches to be closed.
26.	On out-turn in Australia, a number of the coils, but not all of them, on each ship was found to have been damaged by the effects of cargo sweat.  This condition occurs during the voyage when moisture in the form of water vapour in the holds condenses on cooler cargo, such as steel coils.  Each vessel ventilated its holds during the course of the voyage in a way that accorded with good practice, with the following exception.  The exception was that the way in which the crew measured the characteristics of the air in the holds and at sea.  In order to determine whether, in ventilating, water vapour would be admitted into the holds from the air at sea, the crew used a wet bulb thermometer which was a relatively rough-and-ready method.  Because of the inexactness of this measure, some water vapour entered into the holds with the new air which was being admitted.  The purpose of ventilation was, of course, to cause water already inside the holds, either in the form of loose water that had remained following the loading, or water vapour in the air at the time of loading, to be expelled from the holds and replaced with drier air.
27.	The trial judge (Emmett J) had held that the carriers had failed to make the vessels seaworthy at the time of loading by not fitting dehumidifiers.  He also held that the carriers had failed properly to care for the goods under Art III r 2 because, by using wet bulb thermometers to decide whether to ventilate, they allowed water vapour to enter the holds.  On appeal, the majority in the Full Court overturned the trial judge’s decision on lack of due diligence to make the vessel seaworthy.  The Court unanimously upheld the decision that the carriers had failed properly to care for the goods.  The Court also unanimously rejected challenges to the trial judge’s finding that the carrier could not make out an exception under Art IV r 2(n) that the steel was insufficiently packaged.
28.	Ryan and Dowsett JJ held that the cargo interests had to prove that, at the commencement of each voyage, the vessel was not equipped to deal with a peril that might be encountered during the voyage.  They held that there was insufficient evidence to justify a finding of unseaworthiness, so that the question of due diligence did not arise.  Their Honours said that the absence of dehumidifiers was not a failure to have the vessels in a seaworthy state at the time the voyages commenced.  That was because the chances of corrosion occurring depended on the amount of water in the hold at the commencement of the voyage, the likelihood of additional water entering during the voyage, likely fluctuations in temperature and available methods and equipment for removing moisture.  They pointed out that Art III rr 1 and 2 distinguished between the duties of the carrier to exercise due diligence, provide a seaworthy vessel and carefully and properly to handle the cargo.
29.	The fact that moisture might enter the hold during loading, they said, by itself could hardly make the vessel unseaworthy.  Ryan and Dowsett JJ said that it was necessary to consider the likely amount of water and available means for dealing with the problem and whether further moisture might have entered the hold during the voyage and likely climatic conditions.  They concluded that:
 ‘… given the absence of evidence of any practice of installing and using dehumidifiers, the duty to exercise due diligence could only have required such a step if the vessel and its crew might not otherwise have been able to deal with the problem.’

30.	They further said that there was a mechanism available for removing moisture from the holds, namely by wiping and mopping those items on which water was physically present.  The cargo owners had failed to prove that there were sufficient other sources of moisture in the hold at the time of the commencement of the voyage that could not have been removed manually.  Thus, it could not be found that the absence of dehumidifiers amounted to a want of due diligence on the carriers’ part to make the vessels seaworthy.  The failure to remove moisture was a want of care.  The vessels could carry their cargoes safely in their then state, had the moisture been removed.
31.	I dissented, saying that ultimately, it was for the Court to determine whether the practice was a sufficient reason to determine the question of both the seaworthiness and the exercise of due diligence.  I relied on the principle that the question of whether a practice is or is not adequate is a question of law to be determined by the courts:  Rogers v Whitaker.  Similarly, Judge Learned Hand, writing for the Second Circuit Court of Appeals of the United States of America, once made findings of unseaworthiness and a failure to exercise due diligence in The TJ Hooper v Northern Barge Corporation.  In that case, he held that the tugs were unseaworthy because they had not been equipped with radio receiving sets which, at the time, were gradually being introduced into common use.
Shifting Onuses
32.	In The ‘Hellenic Dolphin’ Lloyd J said that a cargo owner could raise a prima facie case against a shipowner by showing that cargo, which had been shipped in good order and condition, was damaged on arrival.  Next, the shipowner could meet that prima facie case by relying on an exception in Art IV r 2, for example, perils of the sea.  The position in that respect, he said, was the same whether one acted under the Hague-Visby Rules or not.  The cargo owner, Lloyd J went on to say, could then seek to displace the exception by proving that the vessel was unseaworthy at the commencement of a voyage and that unseaworthiness was the cause of the loss.   He said that the burden in relation to seaworthiness did not shift and that the Court could draw inferences. 
33.		The Hague-Visby rules do not explicitly identify who has the onus of proving unseaworthiness.  However, it falls upon those who allege it.  In Lindsay v Klein (The Tatjana), Lord Shaw of Dunfermline explained:

‘My Lords, in the judgments stress is repeatedly laid upon the fact that the onus of proving unseaworthiness is upon those who allege it.  This is, of course, a sound doctrine; and it is none the less sound although the vessel break down or sink shortly after putting to sea.  That is the principle of law.  But the enunciation of that proposition does not impair or alter certain presumptions of fact, such presumptions, for instance, as those which arise from the age, the low classing, or non-classing, the non-survey of ship or machinery, the refusal to insure, the laying up, the admitted defects, and generally the poor and worsening record of the vessel, together with finally the breakdown, say, of the machinery, immediately, or almost immediately, on the ship putting to sea.  It would be a very curious, and, in my opinion, an unreasonable and dangerous, thing if circumstances like these did not raise presumptions to which, especially taken cumulatively, effect were not to be given in Courts of law.’

34.		In Great China, Gaudron, Gummow and Hayne JJ said:

‘… seaworthiness is to be assessed according to the voyage under consideration; there is no single standard of fitness which a vessel must meet. Thus, seaworthiness is judged having regard to the conditions the vessel will encounterhttp://thomsonnxt4/links/Handler.aspx?tag=181cfc322ee3407e91201da3d3be4485&product=cl. … The vessel must be "fit to encounter the ordinary perils of the voyage"; 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".
 
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. 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 it may be unseaworthy. 

Nor is the standard of fitness unchanging. The standard can and does rise with improved knowledge of shipbuilding and navigation. 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.’
	 
35.	There is, of course, an element of commonsense that needs to be applied in determining the issue of due diligence and seaworthiness.  A shipowner who put to sea knowing that, in the ordinary way, cargoes of the kind being carried would inevitably suffer some minor damage by way of condensation, staining or the wasting of few bags, would be unlikely to be found to have failed to exercise due diligence.  Neither seaworthiness or due diligence imposes an absolute standard.  Lord Devlin has said that lack of due diligence amounts to negligence.
36.	In Northern Shipping Co v Deutsche Seereederei GmbH (The Kapitan Sakharov) Auld LJ explained that the test in Art III r 1 was whether the carrier, ‘… its servants, agents or independent contractors, had exercised all reasonable skill and care to ensure that the vessel was seaworthy at the commencement of its voyage, namely, reasonably fit to encounter the ordinary incidents of the voyage’.  He said the test is objective, namely to be measured by the standards of a reasonable shipowner, taking into account international standards and the particular circumstances of the problem in hand.
37.	As mentioned above, Art IV r 1 provides that, even if it is established that the vessel was unseaworthy at the commencement of the voyage and the carrier failed to exercise due diligence to make it seaworthy at that time, no liability is imposed unless it is shown that the unseaworthiness was a cause of the damage the cargo owner complains of.
38.	Article III r 1 also involves an obligation of the carrier to make a ship ‘cargoworthy’.  This is an aspect which has always been regarded as one of seaworthiness.
Onus of Proof and Care of Cargo
39.		Article III r 2 of the Hague and Hague-Visby Rules provides that:
‘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.’ 

In Albacora SRL v Westcott & Laurance Line Ltd Lord Reid held that the word ‘properly’ had a meaning slightly different from ‘carefully’. His Lordship agreed with Viscount Kilmuir LC in GH Renton & Co Ltd v Palmyra Trading Corporation of Panama, that ‘properly’ meant ‘in accordance with a sound system and that may mean rather more than carrying the goods carefully’.
40.		The obligation stated in this article depends also ‘upon the kinds of conditions which it is anticipated that the vessel will meet’.  Thus, in Great China Gaudron, Gummow and Hayne JJ stated:
‘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.’ 

41.		In circumstances where goods are shipped in apparent good order and condition and are either lost or discharged damaged, there is a prima facie breach of Art III r 2 and, subject to what is discussed below, the carrier will be considered liable unless it can prove that the loss or damage was caused in a way which attracts its immunities as contemplated under Art IV r 2.
42.		The onus of proof to establish a defence under Art IV is on the carrier. This onus is provided in terms under Art IV r 1 for a carrier to make out the immunity, as seen above.  On the other hand, the carrier’s onus to bring the cause of damage or loss within one of the exceptions listed under Art IV r 2 is established pursuant to the principle that ‘a person who seeks to rely on an exception clause must bring himself or herself within it’. 
43.		Staughton LJ pointed out in The Antigoni that where a shipowner seeks to rely upon Art IV r 1, it will not have a burden of establishing an exception under Art IV r 2.  But, where, as in that case, the shipowner sought to escape liability on the basis that there was a latent defect not discoverable by due diligence within the exception of Art IV r 2(p):
‘… he will find it much easier to establish due diligence if he can point to the likelihood of a latent defect, and much more difficult if he can suggest none, or only one which is wholly implausible.’

44.		And there will also be cases where part of the loss or damage may have been caused concurrently, for example, by a peril excepted under Art IV r 2 and a breach by the carrier of its obligations with respect to cargo under Art III r 2.  In Gamlen Chemical Mason and Wilson JJ considered the question of concurrent causes of a loss under the Hague Rules.  There, the carrier sought to escape liability even though the goods had not been properly stowed, in contravention of Art III r 2, because the vessel had encountered conditions which amounted to a peril of the sea within the exception in Art IV r 2(c).  The trial judge had found that, had the goods been properly stowed, the damage would not have occurred.  So obviously, 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.’

45.		Thus, the carrier was not able to argue that, even though it was in breach of Art III r 2, it could escape liability by proving the existence of a circumstance excepting it under Art IV r 2.  Mason and Wilson JJ said that such a construction would denude the obligation imposed by Art III r 2 of much of its substance.  They recognised that a number of the exceptions in the latter rule involved situations which were beyond the control of the carrier or his 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.
46.		Mason and Wilson JJ saw the scheme of Arts III and IV as imposing certain responsibilities and liabilities on the carrier of goods by sea, from which it could not contract out (based on Arts III r 8) but to give it immunity in respect of loss or damage caused otherwise by negligence for which the carrier is responsible, except in special cases.  They explained:
‘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, par (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.’

47.		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.  Where the facts disclose that a loss was caused by the concurrent causative effects of an excepted and non-excepted peril, the carrier remains liable.  I held recently in Hilditch (No 2), that the carrier will only escape liability if it can prove that the loss or damage was caused by an excepted peril alone.
48.	The Supreme Court of the United States enunciated, in Schnell v The Vallescura, a principle which is now codified as part of Art V r 7 of the Hamburg Rules.  There, Stone J, delivered the opinion of the Court and said:
‘Where the state of the proof is such as to show that the damage is due either to an excepted peril or to the carrier’s negligent care of the cargo, it is for him to bring himself within the exception or to show that he has not been negligent …

Similarly, the carrier must bear the entire loss where it appears that the injury to cargo is due either to sea peril of negligent stowage, or both, and he fails to show what damage is attributable to sea peril.’

49.		Stone J explained that this result arose because of the effect of the presumption, that where goods were delivered in apparent good order and condition to the carrier but out-turned in a different condition, the carrier had the burden of showing facts relieving him from liability.  Thus, where the carrier cannot demonstrate what part of any damage to cargo was attributable to a cause falling within an exception under Art IV, he must bear responsibility for the whole loss or damage.
50.		Moreover, if unseaworthiness is a cause of the loss and the carrier is in breach of its overriding obligation to exercise due diligence to make the ship seaworthy as required under Art III r 1, it cannot rely on an exception under Art IV.
Principles of Proof
51.	Professor William Tetley in Marine Cargo Claims suggested that in cargo claims ‘[f]our general principles of proof run as unbroken threads through Hague and Hague/Visby Rules jurisprudence. The first three principles are not always apparent but nevertheless are present in every cargo claim where the claimant has properly made his claim and the carrier has properly defended himself.’
52.	His first principle is that the carrier ‘is prima facie liable for loss or damage to cargo received in good order and out-turned short or in bad order’. His subsequent principles are:
•	‘[T]he parties are in general required to make proof of whatever facts are available to them’;
•	‘[T]he onus of proof does not mean providing all the circumstances to the point of absurdity, but means making proof to a reasonable degree’;  and
•	‘[O]nce a party conceals, modifies or destroys evidence, other evidence of that party is suspect’.
53.	The fourth principle is a variation on the theme identified in Allen v Tobias that a person who deliberately destroys a document which may or may not have told against him or her is affected by a strong presumption that if it had been produced, the document would have told against them.  Dixon CJ, McTiernan and Williams JJ approved the statement of the Privy Council in The Ophelia;
‘… and even if the document is destroyed by his own act, but under circumstances in which the intention to destroy evidence may fairly be considered rebutted, still he has to suffer.  He is in the position that he is without the corroboration which might have been expected in his case.’

54.	At the end of the day, as Gaudron, Gummow and Hayne JJ pointed out in Great China, the question of whether a carrier will be found liable is, in large part, a factual enquiry.  They posed a question:
‘… 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?’
  
Order of Proof
55.	As stated at the beginning of this paper, the order of proof is the sequence in which the facts or allegations are to be proven by one party or the other to the suit during the trial.
56.	The Hague-Visby Rules, in terms, do not set out any precise order of proof in a marine cargo claim or its defence.  The order of proof has been described as ‘the ping-pong game of burden-shifting’.  Even so, as noted above, the majority of the High Court in Gamlen Chemical approved the ‘traditional order of proof’.  That order of proof is also followed in the United States and United Kingdom:
(1)	The shipper (or the claimant) must prove the contract of carriage, that the goods were shipped in apparent good order and condition and were missing or delivered damaged on arrival; this poses a prima facie case of the carrier’s breach of Art III r 2;
(2)	The onus then shifts to the carrier to rebut the shipper’s prima facie case by establishing that the damage or loss to cargo was caused by one of the exceptions listed under Art IV r 2;
(3)	If the carrier succeeds in establishing one of the exceptions, the onus shifts back to the shipper who may displace the carrier’s defence under Art IV r 2 by:
(a)	proving that the carrier effectively breached Art III r 2 by failing to ‘properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried’;  or 
(b)	proving that the ship was unseaworthy at the beginning of the voyage and that that was the cause of the damage or loss.
(4)	In the first case, the shipper succeeds in proving the carrier’s breach of Art III r 2. In the second case, the onus shifts to the carrier who must prove that the unseaworthiness of the ship was not caused by its lack of due diligence.
The Great China case
57.		The obiter comments made by Gaudron, Gummow and Hayne JJ in Great China suggest for Australian law a different position from the traditional common law application of the onus and order of proof.  The case concerned damage to a cargo of aluminium coils carried on the M/V Bunga Seroja during a voyage from Sydney to Taiwan.  After loading the coils the vessel sailed first to Melbourne.  
58.		Before leaving Melbourne on the run to Burnie in Western Australia, the master received a weather bulletin containing a gale warning for oceans south of the Australian continent.  The master knew that the Great Australian Bight was renowned for severe weather and planned for the worst possible weather conditions.  The vessel encountered heavy weather and itself sustained some structural damage during the storms.
59.		As McHugh J pointed out, the immediate cause of the damage to the cargo was the pounding which the carrier’s vessel suffered as a result of 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, the trial judge and the New South Wales Court of Appeal had held that the damage arose, or resulted, from the perils of the sea.  The High Court dismissed the appeal.  Almost everything said relevant to the question of onus of proof was obiter.
60.		McHugh J said that the cargo owners failed to prove any breach of Art III r 2 so that the applicability of the defence of perils of the sea did not arise.  He said that a contract for carriage under the Hague Rules did not contain any implied obligation for the carrier to deliver the goods in the state in which it received them.  He adverted to Professor Sturley’s observation that the new rules were designed to create a self-contained code, at least in the areas which they covered, that would not require reference to domestic law.
61.		McHugh J noted that the delivery of the goods in a damaged state was evidence of breach of Art III.  This factor imposed an evidentiary burden on the carrier to show that no breach of Art III had occurred.  He continued:
‘… But unlike the common law, failure to deliver the goods in the state received does not cast a legal onus on the carrier to prove that the state of, or non-delivery of the goods, was not due to the carrier's fault.

Once [the primary Judge] found that there was no breach of the carrier's obligations in this case, the immunities conferred by Art IV, r 2 became irrelevant.’

62.		Kirby J suggested that the traditional analysis of onus of proof would apply, following what had been said in Gamlen Chemical, as did Callinan J.  Gaudron, Gummow and Hayne JJ said that nothing in the case turned on the allocation of the burden of proof.  
63.		The obiter view of Gaudron, Gummow and Hayne JJ, was that proof of damage to cargo while it was in the carrier’s possession would constitute some evidence of a breach of Art III r 2.  But that fact would not cast any onus on the carrier to show that the damage (or loss) was caused by any of the circumstances affording the immunities listed under Art IV r 2. The carrier would merely have to prove that it exercised the obligations required under Art III of due diligence and care for the goods.
64.		The authors of Shipping Law (Davies & Dickey), described those views of Gaudron, Gummow and Hayne JJ as ‘radical’ so far as they sought to depart from the onus and order of proof identified in Gamlen Chemical.  Their construction has attracted significant criticism as being inconsistent with the established order and onus of proof under the Hague-Visby Rules in Australia and overseas.   Professor Tetley posited that the practical effect propounded by the construction of Gaudron, Gummow and Hayne JJ would be to relieve the carrier of liability in cases where the cause of the loss was unidentified or uncertain and the carrier had proved due diligence generally: ie the carrier would not have to prove how the cargo came to harm and that it had exercised due diligence to make the vessel cargoworthy in respect of that harm.
65.		Moreover, their views are not reflected in the travaux préparatories for the Hague Rules.  The purpose of listing the various exemptions in Art IV r 2 was to ensure that the common law concept of exclusion of liability was incorporated into the Rules.
66.		The debate at Brussels in October 1922 included an exchange between the Norwegian Secretary-General of its Ministry of Justice, Mr Alten, Sir Leslie Scott and Monsieur Franck.  Mr Alten pointed out that under the Continental system of law, the liability of a carrier was in principle an ‘ex culpa’ liability and consequently the list of exceptions in the proposed Art IV r 2(b)-(p) seemed to him to be redundant.  The answer to that contention was compelling in the following exchange between Professor Berlingieri and Monsieur Franck, as chairman:
‘The Chairman (Monsieur Franck) -  … We cannot create a convention if we cannot find a formula that covers both instances.  If, from the vantage point of our own law, it is sufficient for the captain to be exonerated in all cases of force majeure or unforeseeable circumstances, it is not sufficient under Anglo-Saxon law.  We must consequently create a formula that has a common meaning.’

Mr Berlingieri – We could not put a formula such as that in the Italian Code

The Chairman – The solution will be extremely simple in practice.  You will not have to introduce the formula into your Code but you will have to translate the clause honestly into your law ….’  (emphasis added.)

67.		It is clear that the rules, at least as they were drafted in 1922, were conceived as being workable.  They were not in the same category as the Lloyd’s SG policy which is a schedule to the Marine Insurance Act 1909 (Cth).  That policy was once described:
‘… as a strange, very peculiar, absurd, incoherent, clumsy, imperfect, obscure, incomprehensible, tortuous, document drawn up with much laxity, by a lunatic with a very private sense of humour, in a form which is past praying for.’

68.		The practical effect of the approach of Gaudron, Gummow and Hayne JJ in Great China may be that, in circumstances where the cause of loss or damage is unidentified or uncertain, the carrier may escape liability simply by demonstrating that due diligence and reasonable care were exercised, without having to prove how the cargo became damaged or lost. The travaux préparatories suggest that the carrier should prove which specific exception in Art IV caused the loss or damage.  This is also the view of the authors of Bills of Lading:  Law and  Contracts, John F Wilson, Carriage of Goods by Sea,  and Carver on Bills of Lading.
69.	In the Ankergracht, the carrier failed to prove that there was any deficiency in the packaging of the steel coils.  The Court applied the reasoning of the English Court of Appeal in Silver v Ocean Steamship Company Ltd.  Ryan and Dowsett JJ said that the carriers bore the ultimate onus of proof on the issue.  Silver is also an authority for the proposition that, by issuing clean bills of lading stating that goods had been shipped on board ‘in apparent good order and condition’, the carrier is precluded from asserting that they were insufficiently packed.  If the insufficiency of packaging is obvious, the cargo cannot be described as having been received in ‘apparent good order and condition’ but if the bills are so claused, then the carrier is bound by the words it used.
Recent Developments: The Draft Convention
70.		The draft convention in the new Arts 14 to 19 significantly alters the regime in Arts III and IV of the Hague-Visby Rules.  The new provisions reflect many concepts in the Hague-Visby Rules.  Article 18 deals with the carrier’s liability and which party bears the onus of proof on various issues.  At first blush, Art 18 of the proposed Rotterdam Rules breathes new vitality into the aphorism that ‘a camel is a horse designed by a committee’.  There is much to be said for the Australian Government’s general observation about the whole draft convention:
'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.'

71.		Draft Art 18 provides the following steps:
(1)	Initially the claimant must prove that loss, damage or delay, or the event or circumstance that caused or contributed to the loss, damage or delay took place during the period of the carrier’s responsibility (draft Art 18 rule 1);
(2)	Next, draft Art 18 r 2 relieves the carrier of liability if it proves that the (or a) cause of the loss, damage or delay was not its fault or that of any servant or agent, including the master, crew and any ‘performing party’ (defined in draft Art 1 r 6).
(3)	The carrier can also prove that it is entitled to exemption under draft Art 18 r 3 by establishing that the loss, damage or delay was caused or contributed to by one or more of similar exceptions to those in Art IV r 2 of the Hague-Visby Rules.  But, unlike the latter, draft Art 18 par 3 expressly provides that the carrier bears the onus of proving that one of the circumstances specified, caused or contributed to the loss, damage or delay.  Notably, draft Art 18 r 3 omits the ‘nautical fault exception’.  That relieved the carrier of responsibility where the damage was caused by the actions of master, mariner, pilot or servants of the carrier in the navigation or management of the ship.  Instead, the carrier is now to be liable for the acts and omissions of the master or crew, any performing party, employees or agents of the performing party or any other person that performs or  undertakes to perform the carrier’s obligations under the contract of carriage at the carrier’s request, or under the carrier’s supervision or control.
(4)	Draft Art 18 r 4 is curious.  It provides that, despite the carrier establishing the applicability of an exemption under r 3, it will still be liable for all or part of the loss, etc, if the claimant proves that the carrier (or a person for whom it is responsible) caused or contributed to the event or circumstance on which the carrier relies:  ie although the carrier has proved it is not at fault under r 3, the claimant can prove that it is at fault under r 4(a)!  Perhaps, some things are better left unsaid.  Also, under r 4(b) the claimant can defeat a carrier’s exemption under r 3, if it proves that an event or circumstance not listed in r 3 contributed to the loss, damage or delay, and if the carrier cannot prove absence of fault on its part for this new event or circumstance.
(5)	This Byzantine ping pong match continues with draft Art 18 r 5.  If the carrier succeeds in establishing one of the exceptions under Art 18 r 3, the onus shifts back to the claimant to displace the carrier’s defence by proving that the loss, damage or delay was, or was probably caused by or contributed to by the unseaworthiness of the ship, the improper crewing, equipping and supplying of the ship, or that the holds were not fit and safe for the reception, carriage and preservation of the goods (draft Art 18 r 5 (a)). Unlike the Hague-Visby Rules, the draft convention explicitly puts the onus of proving unseaworthiness etc on the cargo claimant.
(6)	If unseaworthiness etc is proved, the onus shifts once again to the carrier. Now, draft Art 18 r 5(b) provides that the carrier will be liable unless it proves that:
i)	unseaworthiness, improper crewing, equipping and supplying of the ship or the state of the holds did not cause the loss, damage or delay;  or
ii)	it complied with its obligation to exercise due diligence by ensuring the ship was properly equipped and supplied and by keeping the ship so crewed, equipped and supplied throughout the voyage as well as making and keeping the ship seaworthy and making and keeping the holds and all other parts of the ship in which the goods are carried fit for their reception, carriage and preservation.
72.		Draft Art 15 extends the concept of seaworthiness, and hence the obligation of due diligence by requiring the carrier to keep the vessel seaworthy and cargoworthy during the voyage.
73.		Draft Art 18 r 5 reformulates the concepts in Art IV r 1 of the Hague-Visby Rules.  Each Article deals with the liability of the carrier where the damage arises or results from the unseaworthiness of the vessel.  Each requires the carrier to prove that it exercised due diligence or that the damage was not caused by the unseaworthiness of the vessel etc.  However, draft Art 18 r 5 requires the claimant to prove that unseaworthiness etc caused or contributed to the loss or damage.
74.		Article IV r 1 is framed as a negative proposition – the carrier is not liable except in the 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…’

75.		The carrier could exclude its liability if the ship were unseaworthy etc, and it had exercised due diligence at the commencement of the voyage.  And, as explained above, unseaworthiness and uncargoworthiness can be presumed quite readily where the facts justify the drawing of an inference:  see The Tatjana.
76.		However, draft Art 18 r 5 inverts this position.  It is framed in the positive – the claimant must prove that the carrier is liable.  The article provides:
‘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…’

77.		As the Australian Government commented to UNCITRAL, this may effect an alteration in the burden of proof.  It noted that, once the claimant establishes a loss, the existing rules place the burden of proof as to the cause of loss on the carrier effectively.  It observed:
‘This is based on the carrier being in a better position than the shipper to know what happened while the goods were in the carrier’s custody. If there were more than one cause of loss or damage, then under those regimes the carrier had the onus of proving to what extent a proportion of the loss was due to a particular cause. The current text changes this and puts part of the onus of proof on the shipper...

33. Australia argues that the shipper (i.e. the claimant in this case) would have difficulty proving unseaworthiness, improper crewing, equipping or supplying, or that the holds were not fit for the purpose of carrying goods. This change to the general rule on allocation of liability is expected to affect a significant number of cargo claims and shippers will be disadvantaged in cases where there is more than one cause of the loss or damage and a contributing cause was the negligently caused unseaworthiness of the vessel. In such cases, the shipper will bear the onus of proving to what extent unseaworthiness contributed to the loss.’

78.		Some of the carrier’s obligations under the amended Hague Rules have been carried over in reasonably familiar terms in the draft convention.  Draft Art 14 r 1 restates Art III r 2 of the amended Hague Rules as follows:
‘The carrier shall during the period of its responsibility as defined in article 12, and subject to article 27, properly and carefully receive, load, handle, stow, carry, keep and care for, unload and deliver the goods.’

79.		Meanwhile draft Art 15 broadens significantly Art III r 1 of the amended Hague Rules. The carrier’s obligation of due diligence has been expanded to include a continuing obligation, a change Australia welcomed.  Under draft Art 15 r 1, the carrier must make and keep the ship seaworthy, keep the ship properly crewed, equipped and supplied throughout the voyage, and make and keep the holds and all other parts of the ship fit and safe not only before and at the beginning of the voyage but also during the voyage.  Draft Art 15 provides:
	‘The carrier is bound before, at the beginning of, and during the voyage by sea to exercise due diligence to –
(a)	Make and keep the ship seaworthy;
(b)	Properly crew, equip and supply the ship and keep the ship so crewed, equipped and supplied throughout the voyage; and
(c)	Make and keep the holds and all other parts of the ship in which the goods are carried, including any containers supplied by the carrier in or upon which the goods are carried, fit and safe for their reception, carriage and preservation.’
(my emphasis)

80.		The draft convention also differs from the amended Hague Rules in the following respects:
		(1)	Draft Art 19 provides:
‘The carrier is liable for the breach of its obligations under this Convention
caused by the acts or omissions of:
(a)	Any performing party;
(b)	The master and crew of the ship;
(c)	Employees or agents of the carrier or a performing party; or
(d)	Any other person that performs or undertakes to perform any 	of the carrier’s obligations under the contract of carriage, to 	the extent that the person acts, either directly or indirectly, at 	the carrier’s request or under the carrier’s supervision or control.’

Meanwhile, the exception in Art IV r 2(q), which applies where the damage arises without the fault or privity of the carrier, has been made a distinct exception under draft Art 18 r 2.  This contains the further element that the carrier will be relieved of all or part of its liability where it proves that the cause or one of the causes of the loss was not attributable to its fault.
(2)	Draft Art 18 rr 2, 3 and 6 affect the position under the amended Hague Rules relating to carriers’ liability in circumstances involving concurrent causes.  Article 18 rr 2 and 3 relieve the carrier of all or part of its liability if it proves either that the cause, or one of the causes of the loss was not attributable to its fault, or that one or more of the stipulated events or circumstances caused or contributed to the loss, damage or delay.   This reverses the interpretation in Gamben Chemical and Hilditch (No 2) that the carrier was liable if there were concurrent causes but it only established one exception. Article 18 r 6 provides:
‘When the carrier is relieved of part of its liability pursuant to this article, the carrier is liable only for that part of the loss, damage or delay that is attributable to the event or circumstance for which it is liable pursuant to this article.’

(3)	Draft Art 18 r 3 reverses the position stated by Staughton LJ in The Antigoni that a shipowner who seeks to rely upon Art IV r 1 of the amended Hague Rules need not establish an exception under Art IV r 2.  
Conclusion
81.		Like Griffith CJ, I can say the law on the question of this paper is certain, even if I do not know what it is at present, let alone what it may soon become.

APPENDIX I

Recent Overseas Cases
USA
•	Atlantic Mut. Ins. Co., Inc. v. CSX Lines, L.L.C., 432 F.3d 428 (CA 2: 2005)
The circumstances of the case involved damage to a cargo of phosphoric acid solution which occurred on board the ship CSX Expedition. The Court held at 433 that:
‘To recover against a carrier for damage to goods shipped pursuant to a bill of lading governed by COGSA, a plaintiff " 'bears the initial burden of proving both delivery of goods to the carrier ... in good condition, and outturn by the carrier ... in damaged condition.' "Transatlantic Marine Claims Agency, Inc. v. M/V OOCL Inspiration, 137 F.3d 94, 98 (2d Cir.1998) (quoting Vana Trading Co. v. S.S. "Mette Skou," 556 F.2d 100, 104 (2d Cir.1977)). We have held that "the issuance of a clean bill of lading creates a presumption of delivery in good condition favorable to the plaintiff." Transatlantic Marine Claims Agency, 137 F.3d at 98. We have also stressed that the "plaintiff has the burden, which remains with it throughout the case, of proving that 'the goods were damaged while in the carrier's custody.'" Caemint Food, Inc. v. Brasileiro, 647 F.2d 347, 351- 52 (2d Cir.1981) (quoting Pan-American Hide Co. v. Nippon Yusen (Kabushiki) Kaisha, 13 F.2d 871, 871 (S.D.N.Y.1921) (L.Hand, J.)). It is only once the plaintiff establishes a prima facie case that the burden shifts to the defendant to prove that one of the statutory COGSA exceptions to liability applies.  See 46 U.S.C.app. § 1304(2).

•	Steel Coils, Inc. v. M/V Lake Marion, 331 F.3d 422 (CA 5:  2003).
The case concerned a Carriage of Goods by Sea Act claim for rust damage to steel coils which the owner alleged was caused by seawater when shipped from Latvia to the United States on the M/V Lake Marion.
Relevantly the Court affirmed at [IV] that:
‘COGSA provides a complex burden-shifting procedure. Initially, the plaintiff must establish a prima facie case by demonstrating that the cargo was loaded in an undamaged condition and discharged in a damaged condition [Tubacex, Inc. v. M/V Risan 45 F.3d 951, 954 (5 Cir. 1995).] "For the purpose of determining the condition of the goods at the time of receipt by the carrier, the bill of lading serves as prima facie evidence that the goods were loaded in the condition therein described.” [Id] If the plaintiff presents a prima facie case, the burden shifts to the defendants to prove that they exercised due diligence to prevent the damage or that the damage was caused by one of the exceptions set forth in 1304(2) of COGSA, including "[p]erils, dangers, and accidents of the sea or other navigable waters” and “[l]atent defects not discoverable by due diligence.” [46 U.S.C. app. 1304 (2)] If the defendants show that the loss was caused by one of these exceptions, the burden returns to the shipper to establish that the defendants' negligence contributed to the damage. [Tubacex, Inc. v. M/V Risan 45 F.3d at 954] Finally, “if the shipper is able to establish that the [defendants'] negligence was a contributory cause of the damage, the burden switches back to the [defendants] to segregate the portion of the damage due to the excepted cause from that portion resulting from the carrier's own negligence.” [Tubacex, Inc. v. M/V Risan 45 F.3d at 954].’
Canada
Samuel, Son & Co. Ltd. v. Lithuanian Shipping Co. 2002 FCT 101 (Jan. 29, 2002)
The case concerned a maritime cargo claim for damage to a cargo of cold rolled galvanized steel coils, governed by the Hague-Visby Rules incorporated in the Carriage of Goods by Water Act. The action was heard at the same time as that in Nova Steel Ltd. v. "Kapitonas Gudin" (The), 2002 CarswellNat 219 (Fed. T.D.) and involved damage to a shipment of hot rolled steel coils. Both shipments were carried from the Latvian ports of Ventspils and Riga to Montreal in January and February 1995 onboard the vessel "Captain Gudin". Reasons for judgment were released concurrently in both actions.
Lemieux J noted at [59] that:
‘the plaintiff, under the case law (see Kruger Inc. v. Baltic Shipping Co. (1987), [1988] 1 F.C. 262 (Fed. T.D.) and Francosteel Corp. v. Fednav Ltd. (1990), 37 F.T.R. 184 (Fed. T.D.)) had the initial burden to demonstrate the goods were tendered for delivery in good condition. A clean bill of lading is generally accepted as establishing prima facie proof of this. In this case, the bill of lading was claused "Rust stained. Wet before shipment".

In Francosteel Corp., supra, Justice Rouleau stated the Court may consider all evidence tendered as to the pre-shipment condition of the goods. He went on to say a clean bill of lading, in some circumstances, has been held to be insufficient to establish a prima facie case where goods are shipped in packages preventing any observation of the pre-shipment condition of the goods.’

In applying Rouleau J’s reasoning in Francosteel Corp. (1990), 37 F.T.R. 184, Lemieux J held that the plaintiff had not discharged his initial burden of establishing prima facie that the cargo was tendered to the vessel  in good condition.
Notwithstanding this however, the Judge held at [62] that:
‘The plaintiff's action does not stop because it has not established prima facie the good condition of the cargo on delivery to the carrier. The plaintiff may succeed in establishing the Captain Gudin's negligence or unseaworthiness was the proximate cause of the damage sustained.’

With regard to the issue of concurrent causes, the Judge held that the defendant was entirely responsible for the damage caused to the cargo as it had made no proof to separate damage.  Notably, his Lordship said at [74]-[75]:
William Tetley, in Marine Cargo Claims [3rd ed 1988], at page 328, writes:

Where the damage is caused in part by an act or fault for which the carrier is responsible and in part by an act or fault for which the carrier is not responsible, the carrier must be able to make proof sufficient to separate the damage resulting from one cause from the damage resulting from the other, or in the alternative be held responsible for the whole claim. [This is known as the Vallescura Rule.]

Professor Tetley quotes from Hobhouse's J. in "Torenia" (The) [1983] 2 Lloyd's Rep. 210 (Eng. Q.B.), at 218 as follows:

Where the facts disclose that the loss was caused by the concurrent causative effects of an excepted and a non-excepted peril, the carrier remains liable. He only escapes liability to the extent that he can prove that the loss or damage was caused by the excepted peril alone.
(amendments added)
England
Papera Traders Co. Ltd. and Others v. Hyundai Merchant Marine Co. Ltd. and Another – The “Eurasian Dream” [2002] 1 Lloyd’s Rep 719 Cresswell J
The case involved a claim for damage to a cargo of vehicles caused by a fire on board the vessel Eurasian Dream while in the port of Sharjah. The Court was thus to decide whether the carriers had exercised due diligence to ensure that the vessel was seaworthy before and at the commencement of the voyage as required by Article III of the Hague and Hague Visby Rules.
Cresswell J discussed the law regarding onus of proof in cargo claims saying at [123]:
(1)	The burden of proof is on the claimants to prove that the vessel was unseaworthy, pursuant to art. III, r. 1, before and at the beginning of the voyage.
(2) 	The claimants must then also prove that the loss or damage was caused by that unseaworthiness: The Europa, [1908] P. 84 at 97- 98.
(3) 	If the claimants discharge the burden in respect of (1) and (2), the burden defendants to prove that they and those for whom they are responsible exercised due diligence to make the ship seaworthy in the relevant respects: The Toledo, [1995] 1 Lloyd's Rep. 40 at 50.
(a)	If they fail to do so, the defendants are not entitled to rely upon the exceptions in art. IV, r. 2, including the "fire" exception.
(b) 	If the defendants are able to do so, they can rely upon the "fire" exception as a defence to breach of art. III, r. 2, subject to the claimants proving that the loss or damage was "caused by the actual fault or privity of the carrier": The Apostolis, [1996] 1 Lloyd's Rep. 475 at p. 483, col. 2; Scrutton on Charterparties (20th ed.), p. 444.
(4) 	In relation to due diligence, proof of unseaworthiness fulfils the same function as res ipsa loquitur does in ordinary cases of negligence: The Amstelslot, [1963] 2 Lloyd's Rep. 223 at 235 per Lord Devlin; The Fjord Wind, [2000] 2 Lloyd's Rep. 191 at 205. In practical terms, the reasoning is: "a ship should not be unseaworthy if proper care is taken" (per Stuart-Smith LJ)  see also at [124]-[136] 
New Zealand
New Zealand China Clays Ltd v Tasman Orient Line CV (unreported, CIV-2002-404-3215, Williams J, 31 August 2007).
While sailing through a restricted passage off the coast of Japan at night, the Tasman Pioneer grounded after the failure of its radar. The master failed to notify the Japanese coastguard and proceeded at full speed for two hours. During this time the ship took on large amounts of water damaging the deck cargo. The master ordered the crew to say to the coastguard that the ship had struck a floating object. During the course of the coastguard’s investigations the crew and later the master admitted to the grounding. The plaintiffs held interests in cargo, dairy products stowed in the damaged reefer containers, stowed on the deck of the ship. The plaintiffs brought cargo claims alleging breach of bailment and breach of contract under the bills of lading issued by Tasman Orient Line, the sub-time charters of the Tasman Pioneer. Tasman Orient Line sought to avail itself of the exemption contained in Article 4, rule 2(a) of New Zealand’s Amended Hague-Visby Rules.
Williams J said:
[12] The parties each assert that the burden of proof of the defendant’s entitlement to either or both of those exemptions lies on the other. That became a trial issue.
…

[126] All counsel were agreed that a central issue in this case is the correct construction of Art. 4, R 2(a) of the Hague-Visby Rules, earlier cited.
…

[129] The plaintiffs also assert that Tasman Orient has the onus of proof of its entitlement to the exemption. 
…

[152][…] 	Lord Hobhouse took the same view [in Larrinaga Steamship Co. Ltd v The Crown (The “Ramon de Larrinaga”) (1944) 78 Lloyds Rep 167]. On the point under consideration, he held that (at 159-160): 
				
		…

In the present case, the exception did not provide a defence. First, the breach of contract was the breach of both aspects of the owners’ obligations under cl. 8 of the time charter – to prosecute the voyage with the utmost despatch and to comply with the orders and directions of the charterers as regards the employment of the vessel. […] Secondly, any error which the master made in this connection was not an error in the navigation or management of the vessel; it did not concern any matter of seamanship. Thirdly, the owners failed to discharge the burden of proof which lay upon them to bring themselves within the exception. 
…

[156] [The defendant’s] submissions first challenged the plaintiffs on the onus of proof. He submitted that if cargo resists the availability of an exception clause by reason of some alleged failure by the ship - for example, unseaworthiness – then the onus was on cargo to prove it. 

[157] He carefully reviewed the history leading up to the compromise between owners and cargo interests represented by the Hague-Visby Rules noting that as long as owners exercised due diligence in making a ship seaworthy, both physically and with competent crew, they were entitled to rely on exceptions reflecting the risks arising from the common venture of sea voyages including damage arising from the act, neglect, or default of master and crew in the navigation or management of the ship. He drew on a forthcoming edition (now available on the internet) of Prof Tetley’s work on Marine Cargo Claims (4th ed due for publication in 2008, ch 16, p 1) that the defence is unique to ocean carriers, unique in transportation law, deliberately excluded from the Hamburg Rules and increasingly contested by critics of the Hague and Hague-Visby Rules. He relied on the “Bunga Seroja”. He also relied on the recent House of Lords decision in Jindal Iron and Steel Co. Ltd v Islamic Solidarity Shipping Co. Jordan Inc (the “Jordan II”) [2005] 1 Lloyds Rep 57 where their Lordships emphasised the importance of certainty in international trade law as transcending the dubious authority of a precedent decision, even one of long standing. 

[158] [The defendant,] Mr Gray submitted that the correct interpretation of Art 4 R 2(a) was that carriers have a duty to cargo interests to care for the cargo properly under Art 3.
…

[160] Mr Gray then presented careful and comprehensive submissions concerning the English common law at the time of the Hague Conference in 1921 and the Travaux Préparatoires of the Hague Rules but, with respect to counsel’s diligence, it is thought unnecessary to lengthen an already significant judgment by including that material. 

[161] …He also drew attention to the observations of Callinan J in the “Bunga Seroja” (p 241-2, para [241], [242]): 

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. 

Article 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. 

Williams J concluded on this point at [241]-[242]:
It follows that while what happened just before the grounding and for several hours afterwards may have been an “act, neglect or default of the master … in the navigation or in the management of the ship” his actions did not amount to an “act, neglect or default” in the bona fide “navigation or in the management of the ship”.
Accordingly, Tasman Orient has failed to discharge the burden of proof of demonstrating its entitlement to the exemption provided by Art 4 R 2(a) of the Hague-Visby Rules as correctly construed.

 Appendix  II
Draft Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea

CHAPTER 5. LIABILITY OF THE CARRIER FOR LOSS, DAMAGE OR DELAY

Article 18. Basis of liability
1. The carrier is liable for loss of or damage to the goods, as well as for delay in delivery, if the claimant proves that the loss, damage, or delay, or the event or circumstance that caused or contributed to it took place during the period of the carrier’s responsibility as defined in chapter 4.
2. The carrier is relieved of all or part of its liability pursuant to paragraph 1 of this article if it proves that the cause or one of the causes of the loss, damage, or delay is not attributable to its fault or to the fault of any person referred to in article 19.
3. The carrier is also relieved of all or part of its liability pursuant to paragraph 1 of this article if, alternatively to proving the absence of fault as provided in paragraph 2 of this article, it proves that one or more of the following events or circumstances caused or contributed to the loss, damage, or delay:
(a) Act of God;
(b) Perils, dangers, and accidents of the sea or other navigable waters;
(c) War, hostilities, armed conflict, piracy, terrorism, riots, and civil commotions;
(d) Quarantine restrictions; interference by or impediments created by governments, public authorities, rulers, or people including detention, arrest, or seizure not attributable to the carrier or any person referred to in article 19;
(e) Strikes, lockouts, stoppages, or restraints of labour;
(f) Fire on the ship;
(g) Latent defects not discoverable by due diligence;
(h) Act or omission of the shipper, the documentary shipper, the controlling party, the consignee, or any other person for whose acts the shipper or the documentary shipper is liable pursuant to article 34 or 35;
(i) Loading, handling, stowing, or unloading of the goods performed pursuant to an agreement in accordance with article 14, paragraph 2, unless the carrier or a performing party  performs such activity on behalf of the shipper, the documentary shipper or the consignee;
(j) Wastage in bulk or weight or any other loss or damage arising from inherent defect, quality, or vice of the goods;
(k) Insufficiency or defective condition of packing or marking not performed by or on behalf of the carrier;
(l) Saving or attempting to save life at sea;
(m) Reasonable measures to save or attempt to save property at sea;
(n) Reasonable measures to avoid or attempt to avoid damage to the environment;
(o) Acts of the carrier in pursuance of the powers conferred by articles 16 and 17.
4. Notwithstanding paragraph 3 of this article, the carrier is liable for all or part of the loss, damage, or delay:
(a) If the claimant proves that the fault of the carrier or of a person referred to in article 19 caused or contributed to the event or circumstance on which the carrier relies; or
(b) If the claimant proves that an event or circumstance not listed in paragraph 3 of this article contributed to the loss, damage, or delay, and the carrier cannot prove that this event or circumstance is not attributable to its fault or to the fault of any person referred to in article 19.
5. The carrier is also liable, notwithstanding paragraph 3 of this article, 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; (ii) the improper crewing, equipping, and supplying of the ship; or (iii) the fact that the holds or other parts of the ship in which the goods are carried (including any containers supplied by the carrier in or upon which the goods are carried) were not fit and safe for reception, carriage, and preservation of the goods; and
(b) The carrier is unable to prove either that: (i) none of the events or circumstances referred to in subparagraph 5 (a) of this article caused the loss, damage, or delay; or (ii) that it complied with its obligation to exercise due diligence pursuant to article 15.
6. When the carrier is relieved of part of its liability pursuant to this article, the carrier is liable only for that part of the loss, damage or delay that is attributable to the event or circumstance for which it is liable pursuant to this article.

Article 19. Liability of the carrier for other persons
The carrier is liable for the breach of its obligations under this Convention caused by the acts or omissions of:
(a) Any performing party;
(b) The master or crew of the ship;
(c) Employees or agents of the carrier or a performing party; or
(d) Any other person that performs or undertakes to perform any of the carrier’s obligations under the contract of carriage, to the extent that the person acts, either directly or indirectly, at the carrier’s request or under the carrier’s supervision or control.