This was an appeal from a judgment of the Supreme Court of Fiji dismissing the appellant's claim in an action against the respondent for goods lost at sea during a journey from Suva to Labasa: see Burns Philp (South Sea) Co Ltd v Marine Pacific Ltd [1979] 25 FLR 57 (CMI1128). The appellant's goods were loaded on the respondent's barge GM 10 at Suva between 14 and 15 June 1977. Other goods belonging to other shippers were also on it. Among the goods were several 44 gallon drums of fuel. The barge left Suva at 17h00 towed by the vessel Mooea. At 02h30 the captain handed over to Lepper and went down to his cabin. Lepper sent for him at 05h00. He examined the barge with the help of his binoculars. It seemed to be tilting to one side, its stern being almost level with the water. He steamed about three miles off his course and went inside the reef near Rukuruku in order to inspect the barge closely. They found that part of the bulwark surrounding the deck had been broken and some of the goods were missing. Fuel drums had come loose from ropes and some were gone. Two holes in the barge were open and a great deal of water had gone inside. Pins which kept the lids in place had come off and were hanging near the lids. Water was pumped out of the barge and the remaining deck cargo was properly secured. The Mooea and the barge left Ovalau the next day at 07h00 for Labasa with the remaining cargo.

The respondent admitted that the appellant's goods were lost at sea.

The Judge in the Supreme Court considered whether the Sea Carriage of Goods Ordinance applied to the goods in question. The bills of lading were declared to take effect subject to the provisions of the rules in the Schedule to that Ordinance. But the definition of 'goods' in the Rules excepted cargo which 'by the contract of carriage is stated as being carried on deck and is so carried'. These conditions having being fulfilled, the Judge held that the exclusion clause stamped on the bills of lading was not made void by art 3.8. This finding has not been challenged on appeal.

The Judge found:

1. The respondent was a common carrier but had excluded the direct liability of a common carrier 'under the Sea Carriage of Goods Ordinance'.
2. If there was such a misperformance as to destroy the whole core of the contract – amounting to a fundamental breach – the exclusion clause would not avail the respondent.
3. Failure to deliver, there being no deviation from the contract, did not amount to a fundamental breach so as to deprive the respondent of the benefit of the exclusion clause.
4. On the question whether the exclusion clause should be construed as being wide enough to include negligence, the respondent for the purposes of the particular goods must be treated as 'a carrier being only under an obligation to take reasonable care' and not as an insurer, and therefore the words 'howsoever caused' included the negligence of the respondent's servants.

The appellant argued that the Judge erred in holding that the respondent was exempted from liability by reason of the exclusion clause inserted in the bill of lading, on the grounds that the conditions endorsed were vague, ambiguous, and therefore the trial Judge ought to have applied the contra proferentem rule, and that the respondent failed to prove that it was not guilty of any fundamental breach, as the onus was on the respondent to prove that it was not guilty of fundamental breach.

Held: Appeal dismissed.

The position is this. Once it is accepted that the Hague Rules do not apply, the shipowner, who is a common carrier, is responsible for loss of the goods, subject to certain exceptions but subject also to any 'express stipulations in the contract of affreightment'. That in the present case is contained in the bills of lading, including what had been stamped on them. The task therefore is to construe the bills of lading.

The Judge relied on the case of Alderslade v Henden Laundry Ltd [1945] 1 All ER 244, particularly where the judgment compares the position of common and private carriers. In the case of the former, the carrier is subject to an imposed liability for loss not necessarily based on negligence. Therefore an exclusion term will, unless in the clearest terms, be construed as excluding negligence. But if a carrier is under a duty to take only reasonable care, the clause would fail of any effect unless construed so as to cover the case of negligence. The Judge held that that was the situation in the present case.

The actual words of the exclusion clause are amply wide enough to include the negligence of the respondent's servants. The use of 'howsoever caused' is all-embracing. In favour of the respondent is the fact that the parties were not in any way upon unequal terms, Both were experienced in what they were doing, and had done it often before.

The next matter is the construction of the contract of affreightment. The bills of lading contain the usual great number of clauses governing in detail the rights and liabilities of the shipowner in particular, though of course the contract to deliver the goods remains. It is not possible to mention more than a few of the provisions. Clause 5 protects the respondent against responsibility for loss, damage or delay from labour troubles, theft, inherent defects, entry of water and perils of the seas - these serve only as examples. Clause 7 contains a comprehensive right to deviate. Clauses 9, 10, and 11 place limits upon the value of various items of goods for which the respondent may be accountable. Certain kinds of goods, livestock, perishables etc, whether carried on deck or below, are at shipper's risk. Clause 18 provides that the respondent will not be responsible for over carriage 'from whatever cause', but will remedy the same. Clause 25 provides that the shipper shall be liable in respect of the handling of goods before loading and after discharge notwithstanding that the loss resulted from the act or neglect of the carrier - the carrier contracted as bailee (presumably in respect of the particular clause) and not as common carrier. Clause 26 states that all goods shipped as deck cargo were to be carried at owner's risk.

Having read the bills of lading, the Court is satisfied that whether the Judge was strictly correct in holding that the respondent was responsible only for loss caused by lack of reasonable care, the exceptions provided are so comprehensive that any area not covered by them (as has been seen, they even cover negligence in one case) must be negligible. The Judge's approach to the question of construction was justifiable.

There is another factor to be considered. Clause 26 of the bills of lading had already put deck cargo at owner's risk. That would not include loss due to negligence of he respondent's servants. Why then should the exclusion clause be worded in the way it was, unless to exclude that particular form of liability? It could be said that the exclusion clause was inserted in order to negative the operation of the Hague Rules. But to effect that object, all that was necessary was to state that the goods were carried in deck (and so to carry them). When the Hague Rules were negatived in cl 26, this clause being operative, negatived all normal forms of liability, or at least these consequent upon that method of stowage. But the parties thought fit to add a further exclusion, by the words 'without responsibility for loss or damage however caused'. The addition advantages the respondent little if it did not extend to negligence. A further guide to the intention of the parties emerges from this consideration.

The Judge was correct in holding that the exclusion clause applied. It followed that the respondent could not be held responsible, whether or not there had been negligence.