This was an appeal by the cargo owners/plaintiffs from Riverstone Meat Co Pty Ltd v Lancashire Shipping Co Ltd (The Muncaster Castle) [1959] 1 QB 74 (CMI2292). The shipowners/defendants had admitted unseaworthiness, but were not liable under art 3.1.a of the Hague Rules because they exercised due diligence to make their ship seaworthy. Unseaworthiness had resulted from the negligence of a fitter employed by competent ship repairers engaged by the defendants to complete surveys of their ship. Inspections carried out in accordance with ordinary prudent practice would not have revealed that nuts on the inspection covers over the storm valves in the scupper pipes could become loose and permit water to enter the cargo hold. The only question on appeal was whether the defendants had performed their due diligence obligation.

The plaintiffs challenged the decision that the defendants were not responsible in law for the negligence of the fitter, but not other issues and findings of fact determined by the Court below. The plaintiffs argued that art 3.1 of the Hague Rules imposed upon the defendants a personal obligation which cannot be delegated. The plaintiffs emphasised that the defendants are responsible even though the negligence was that of an employee of an independent contractor. The plaintiffs argued that the defendants had delegated performance of their obligation to the ship repairers and must accept their delegates' negligence as their own.

The plaintiffs argued that anyone engaged in the work of making a ship seaworthy must be regarded as the delegates of the carrier. Thus, if the ship is unseaworthy because of a negligent act on the part of any one of them, the shipowner or carrier has failed to exercise due diligence: GE Dobell & Co v Steamship Rossmore Co [1895] 2 QB 408 (CA); W Angliss & Co (Australia) Pty v P&O Steam Navigation Co [1927] 2 KB 456 (Angliss); Wilsons & Clyde Coal Co v English [1938] AC 57 (HL) 80 (Wilsons); Northumbrian Shipping Co Ltd v E Timm & Son Ltd [1939] AC 397 (HL) 403 (Timm); Paterson Steamships Ltd v Canadian Co-operative Wheat Producers Ltd [1934] AC 538 (PC) 543 (Paterson Steamships); International Packers Ltd v Ocean Steamship Co Ltd [1955] 2 Lloyd's Rep 218; Waddle v Wallsend Shipping Co Ltd [1952] 2 Lloyd's Rep 105; Smith, Hogg & Co Ltd v Black Sea and Baltic General Insurance Co Ltd [1940] AC 997 (HL) 1001.

The defendants formulated the following proposition, which was summarised in Green v Fibreglass Ltd [1958] 2 QB 245, 250:

Where the law imposes an obligation to exercise reasonable care, as opposed to an obligation to see that care is taken, it is always a question of fact whether such reasonable care has been exercised. In considering this question the court will pay regard to whether what has to be done is something which normally forms part of the obligor's own ordinary trade or business. If it does, then, if what has to be done is negligently done, the obligor is liable, whether he has done it himself or by his servants or by engaging an independent contractor to do it for him. If, however, what has to be done is no part of the obligor's ordinary trade or business, but is something calling for the exercise of specialised knowledge or experience, then the obligor discharges his duty by engaging a properly skilled person to do it for him, and is not liable if that person does it negligently, assuming of course that such negligence is not apparent to the obligor himself.

Held: Appeal dismissed.

Article 3.1 of the Hague Rules is clear in defining the defendants' duty. This mandatory and unqualified duty is imposed upon the carrier. The content of this duty will vary according to the circumstances of each case but the measure of the duty is the same. There is no practical distinction between the obligations of 'due diligence' (art 3.1 of the Hague Rules) and 'reasonable care', which the law imposes, for instance, upon a bailee in favour of the bailor.

The obligation under art 3.1.a of the Hague Rules is to exercise due diligence, not to ensure that due diligence has been exercised. It does not include any warranty that due diligence has been exercised. As art 4.1 of the Hague Rules indicates, it is the carrier's diligence which is in question, the responsibility for exercising which remains in the carrier, although much of the work falls to be performed by the carrier's servants and agents. The words 'on the part of the carrier' are wide enough to render the carrier liable for lack of due diligence on the part of its own servants, whatever the task on which they may be engaged. The defendants bore the burden of proving that they had exercised due diligence. Exercise of due diligence does not in all cases prevent the ship from being unseaworthy.

Whether a carrier under the Hague Rules has exercised due diligence to make a ship seaworthy is primarily a question of fact: Paterson Steamships 543. It depends upon the circumstances of each case. It might be helpful to ascertain the history of the ship and consider whether there have been such steps and such procedures as a prudent and careful carrier would take and follow. It will be a question of fact as to what steps and measures a carrier should take to exercise due care and diligence to make its ship seaworthy: it will be a further question of fact as to whether it has done all that it should.

For complex ocean-going ships, there are matters which call for skilled attention. There may be repairs or overhauls or adjustments or inspections which demand skill and which reasonably are entrusted to qualified people. Thus, there are situations where the exercise of due diligence might require a carrier to entrust some work to skilled people who are not its servants so that even if there is some failure or negligence on their part, there will have been an exercise of due diligence on the part of the carrier. A carrier will probably not be a shipbuilder. Subject to appropriate checks, the carrier may rely upon a shipbuilder and its employees. It may similarly entrust repairs or renewals or overhauls or surveys to those who are relevantly skilled and rely upon them. In such a situation there is no delegation by a carrier of its duty but a performance by that carrier of its duty.

Where a shipowner appoints some independent person to act for itself, ie, to be its representative, such as a firm of ship's agents, or a surveyor or engineer appointed to supervise the building or repair of a ship, the shipowner may become liable for any want of due diligence on the part of such person, as being equivalent to its own want of due diligence. Such persons could properly be regarded in law as its servants for that occasion, though not persons in its regular employment. This would be a true case of delegation.

Where the matter in question is one of building, or rebuilding, or repairing a ship, or of the supply of equipment or spare parts, the court can conclude that the carrier has exercised due diligence, upon proof (a) that it has engaged a reputable contractor or supplier, (b) that it has provided for the work to be properly superintended by its own representative, and (c) that such representative has in fact exercised due diligence. The contrary would lead to absurd results not intended by those who drafted the Hague Rules. The carrier, even though it may only be a purchaser at second hand, would have to be held liable for any defective workmanship in the original building of the ship, or in any repairs carried out at any time in the ship's history, and equally for any defective equipment or spare parts supplied at any time in the ship's history, notwithstanding that the defects might be latent to everybody but the original builder, repairer or supplier, and notwithstanding that such person might be far removed from the carrier by a chain of contractors and sub-contractors. It would be absurd to construe the Hague Rules in such way as to render it thus virtually impossible for a shipowner ever to discharge its obligation.

Turning to authority, Angliss supports the defendants' argument decisively. Angliss held that where a carrier contracted for the building of a ship, the carrier was not liable for lack of due diligence on the part of the shipbuilders or their employees unless the carrier had failed to engage reputable builders and to adopt all reasonable precautions, such as, for example, as requiring the builders to satisfy one of the recognised classification societies or engaging skilled naval architects to provide advice and skilled inspectors to supervise the work with due diligence. The carrier would be liable (a) if it failed to appoint a special adviser to supervise the repairs, or (b) if such special adviser failed to exercise due diligence, but would not be liable if such special adviser, exercising due diligence, failed to detect bad workmanship on the part of the repairers' employees: Angliss 461. Angliss illustrates the correct approach. There is no distinction in principle between cases where a ship is being built for a carrier and cases where a ship is being repaired or is being surveyed for a carrier: Angliss 462. As Angliss indicates, the carrier would not necessarily be liable for the negligence of the repairers. Nevertheless, '[t]he obligation of the carrier to exercise due diligence to make the ship fit is clearly not limited to his personal diligence': Angliss 460.

Angliss should be followed. Angliss has never been overruled nor criticised: The Australia Star (1940) 67 Ll L Rep 110, 116; Waddle v Wallsend Shipping Co Ltd [1952] 2 Lloyd's Rep 105. The Waterville Victory 1951 AMC 320 (SD NY 1951) had substantially the same facts as Angliss and reached the same result. Angliss was carefully considered and approved in Davie v New Merton Board Mills Ltd [1959] AC 604 (HL) (Davie) despite an argument based upon potentially conflicting remarks made in Wilsons by Lord Wright, who also decided Angliss years earlier.

The defendants' proposition is well justified: Searle v Laverick (1874) LR 9 QB 122; Haseldine v CA Daw & Son Ltd [1941] 2 KB 343 (CA) (Haseldine); Phillips v Britannia Hygienic Laundry [1923] 1 KB 539 (Div Ct) (Phillips); Stennett v Hancock [1939] 2 All ER 578 (Stennett); Woodward v Mayor of Hastings [1945] KB 174 (CA) (Woodward). A duty to take reasonable care may be taken without attracting responsibility for the negligence of someone whose work and services have been sought: Phillips 556; Stennett; Haseldine 356, 374.

The carrier cannot divest its due diligence obligation. The carrier itself acts by its servants or agents. It cannot escape liability by appointing an agent to perform the carrier's obligation on its behalf: Davie 621; Timm. A carrier does not evade its duty either by choosing competent servants or agents or by delegating performance to others: The Mary L Peters 68 F 919 (SD NY 1895); The Colima 82 F 665 (SD NY 1897); Nord-Deutscher Lloyd v President of Insurance Co of North America 110 F 420 (4d Cir 1901). But these cases do not establish that there cannot be cases in which certain persons preparing a ship for sea are neither the servants or the agents nor the delegates of the carrier. Sometimes, the obligation to exercise due diligence may be fulfilled by placing dependence upon experts or those possessed of technical skill (or special knowledge or experience): Haseldine. Yet there are simpler circumstances – such as cleaning of snow from a step – in which a duty to be discharged called for no such dependence because no special skill was needed: Woodward. Where an independent contractor is engaged by a carrier to perform on its behalf any part of the ordinary business of carrying goods, for example, stevedores employed to load cargo, contractors failing to exercise due diligence could be held to be the carrier's failure. But where a repairer purchased some new part from a reputable supplier and then fixed such part in position in a ship and the ship became unseaworthy because the new (apparently satisfactory) part had been negligently made by the supplier, it would be open to a court to hold that the shipowner had exercised due diligence unless the circumstances pointed to the necessity for some examination or test.

The defendants exercised due diligence to make their ship seaworthy. It would be contrary to art 3.1 of the Hague Rules, previous decisions, and common sense to hold otherwise. There was no delegation by them of their duty. They performed that duty by, first, arranging for the surveys to be carried out, and secondly, entering into a contract with a reputable firm of ship repairers for the doing of the necessary work under the supervision of a competent and experienced agent (ie their own managers' superintendent). The defendants reasonably entrusted a reputable ship repairer with the surveys, and, incidentally, with the task of taking off the inspection covers and replacing them after the inspection by the surveyor. Taking off and replacing inspection covers was well within the competence of a fitter. Supervising the fitter was not called for. The negligent fitter was not the defendant's servant; the outcome would have been different if it was so. The defendants' duty must not be enlarged into a duty to make the ship as seaworthy as due diligence on the part of anyone could make it.

The plaintiffs' argument should be rejected as it would restore the old absolute undertaking of seaworthiness except in cases of true latent defect and is contrary to Angliss and art 3.1.a of the Hague Rules. The cases cited by the plaintiffs are not decisive but distinguishable. Many were cases where the lack of due diligence was that of one of the shipowners' own servants. Besides, it is impossible to hold, as a matter of construction of the Hague Rules, that whenever some contractor's workman puts in bad workmanship in carrying out work on the ship, that is necessarily conclusive to show a want of due diligence on the part of the shipowner: Angliss 460.

The fallacy in the plaintiffs' argument lies in the use of the word 'delegation' to cover every occasion when the shipowner engages some other person to do some work upon its ship. There is a distinction between employing someone else to carry on one's own business and engaging someone else to perform something which is its business. Any master delegates to its own servants the work of carrying on the master's own business. Equally the carrier may be said to delegate when it employs some outside person to acts as its representative. In applying arts 3.1 and 4.1 of the Hague Rules the difficult question in this case is whether the person who has failed to exercise due diligence is one who can fairly be said to be the carrier's representative. The superintendent or surveyor whom the carrier employs to supervise the repair of a ship can be the carrier's own representative, to whom it has delegated the performance of its own obligation to exercise due diligence. But it is difficult to see how in principle a carrier can be said to be delegating to the firm of repairers whom the carrier employs its own obligation to exercise due diligence. In so far as the carrier can be said to delegate to the repairers at all, the carrier delegates performance of the actual job of doing the repairs and making the ship seaworthy. A carrier may be a charterer or a purchaser of a ship, and in such cases the shipbuilder and their employees could not possibly be regarded as the servants, agents, or delegates of the carrier: Angliss.

There was no fault on the part of the superintendent employed by the ship managers of the defendants. The defendants would have been liable had the superintendent failed to exercise due diligence. Had this been the case, the defendants would be unable to use the fact that the contractor employed to carry out the repairs was a competent one as a defence. Nor would it help the defendants to say that the classification surveyor also failed to detect the bad workmanship.

Also, the defendants appropriately delegated to the superintendent the duty of acting for them throughout, which would involve the continuing exercise by him of due diligence on their behalf. Had they not appointed some competent person to superintend the work, the defendants would have been guilty of a want of due diligence.

Willmer LJ found that replacing the inspection covers was within the competence of the ship's engineering crew. This is something within the ordinary course of the carrier's business, rather than a matter calling for the exercise of any specialised skill. But the appeal was not argued on this ground. Even then, it is not a valid argument in this case. The work of replacing the inspection covers was merely incidental to the work of opening the storm valves for inspection, which, being part of the survey, was a task properly entrusted to the competent contractors whom the shipowners engaged. The replacement of the inspection covers in this case was part of the specialised work which the ship repairers were properly engaged to do.

According to Willmer LJ, the correct approach was stated in Cranfield Bros Ltd v Tatem Steam Navigation Co Ltd (1939) 64 Ll L Rep 264, 267:

The shipowner does not discharge his duty of exercising due diligence to have his ship seaworthy merely by establishing to the court that she passed her classification survey, or merely by showing to the court that he has appointed someone who by qualification should be a skilled person to examine it; but both those things are elements to be considered, in my view, in considering whether the shipowner has exercised due diligence to make the ship seaworthy …. Again, of course, it is an element to be considered whether there has been a sufficiently frequent dry-docking of the vessel for examination and report. That is another element to be considered; and it is an element to be considered to see into whose hands the owners have put the vessel for their periodical examinations and reparations — to see whether they are properly skilled people for the work.

Separately, in examining decisions under the Harter Act it is important to note that under that Act the old absolute warranty of seaworthiness remained unaffected, and reliance on any of the exempting provisions was made conditional upon the shipowner proving the exercise of due diligence to make the ship seaworthy. Subject to that, the phrase 'due diligence to make the ship seaworthy' are common to both the Harter Act and the Hague Rules.

Meanwhile, it is neither necessary nor desirable to seek to formulate some test by reference to which it can be decided whether a carrier has performed its duty or whether the carrier has delegated it.

Finally, what amounts to negligence does not stay fixed. Reasonable care or due diligence requires that people learn from their mistakes. In the light of experience gained in this case, it might not be regarded as good practice to leave a repairers' fitter unsupervised when the fitter is performing tasks such as that of replacing inspection covers. In the future, shipowners might need to prove more than has been proved in this case.

[For the plaintiffs' successful appeal to the House of Lords, see Riverstone Meat Co Pty Ltd v Lancashire Shipping Co Ltd (The Muncaster Castle) [1961] AC 807 (HL) (CMI2131).]