Burns Philp (South Sea) Company Ltd v Marine Pacific Ltd [1979] FJSC 9; [1979] 25 FLR 57 (16 January 1979)
[1979] 25 FLR 57
SUPREME COURT OF FIJI
Civil Jurisdiction
BURNS PHILP (SOUTH SEA) COMPANY LIMITED
-v-
MARINE PACIFIC LIMITED
[SUPREME COURT, (Mishra J.) 16th January 1979)]
(Contract for Carriage of Goods by Sea - deck cargo lost at sea - excluded by Bill of Lading).
G.P. Shankar for Plaintiff
H. Lateef for Defendant
Plaintiff, a dealer in merchandise sued the defendant an inter island carrier of goods for damages in respect of goods lost at sea while being carried from Suva to Labasa on defendant's barge. Except for some oil the cargo was carried on deck. The barge was towed by the vessel "Mooea", leaving Suva at 5 p.m. on 14 June 1977. At 5 a.m. on 15 June the barge was observed to be listing, its stern almost level with the water. Examination showed the bulwark on the deck was broken and some goods, including fuel drums were missing. Two holes in the barge were open-there was a great quantity of water inside. Plaintiff claimed a breach of contractual duty by defendant in failing to ensure cargo was properly secured. Defendant denied this and claimed the benefit of an exclusion clause stamped on the Bill of Lading, viz
"....... cargo carried on deck at shipper's risk without responsibility for loss or damage howsoever caused."
The Bill of Lading stated 'inter alia' that it "shall have effect subject to the ..... rules in the schedule in the Sea Carriage of Goods Ordinance Cap. 207 as applied by the said Ordinance."
The Bill of Lading condition 26 stated:
"All goods shipped as deck cargo to be carried at owner's risk".
The definition of "goods" in the Rules is wide enough to include the plaintiffs' goods; but the definition continues
"....... except ..... cargo which by the contract is stated as being carried."
Referring to the Rules, the Court held that "goods" therefore must not only be so carried, but must also be stated in the bill of lading as being so carried.
Having regard to the exclusion clause supra, defendant argued the plaintiff could not recover. Plaintiff submitted that the clause was not sufficient to exclude negligence.
Held: Liability for negligence if any, and in the absence of fundamental breach (not alleged) was covered by the exclusion clause in relation to the deck cargo.
Judgment for the defendant.
(Upheld on appeal.)
Cases referred to:
John Carter v. Hanson Haulage (1965) 1 All E.R. 113
Hunt and Winterbotham (West of England) Ltd. v. B.R.S. (Parcels) Ltd. (1962) 2 W.L.R. 172.
Alderslade v. Hendon Laundry, Ltd. (1945) 1 All E.R. 244
Produce Meats v. Borthwick (1964) N.Z.L.R. 700
Price and Co. v. Union Lighterage Co. (1904) 1 K.B. 412
Joseph Travers & Sons Ltd. v. Cooper (1915) 1 KB. 73
Svenska Traktor Akt v. Maritime Agencies (Southampton) Ltd. (1953) 2 Q.B.D 295
MISHRA, J:
JUDGMENT
Plaintiff is a dealer in merchandise and defendant is an inter-island carrier of goods. Plaintiff's claim is in respect of goods lost at sea while being carried by the defendant from Suva to Labasa.
The main facts are not in dispute. The goods in question were loaded on the defendant's barge "G.M.10" at Suva between 14th and 15th June 1977. Other goods belonging to other shippers were also on it. Among the goods were several 44 gallon drums of fuel.
Inside the barge is a built-in tank into which some oil had been pumped, to be pumped out at Labasa. The rest of the cargo was carried on deck. The barge left Suva at 5 p.m. towed by the vessel "Mooea". They steamed all night. At 2.30 a.m. near Levuka light house Emose, the Captain, handed over to one Lepper and went down to his cabin. Lepper sent for him at 5 a.m. 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. There they went to the barge and 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 keep 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 properly secured. The "Mooea" and the barge left Ovalau the next day at 7 a.m. for Labasa with the remaining cargo.
Defendant admits that plaintiffs goods listed in the statement of claim were lost at sea.
Plaintiff alleges breach of contractual duty in defendant's part in failing to ensure that the cargo in question was properly secured for such a voyage and also in failing to deliver that cargo at Labasa. They further allege breach of duty under the Sea Carriage of Goods Ordinance.
Defendant denies these allegations and claims the protection of an exclusion clause inserted by them in the bill of lading. This clause stamped on the bill of lading which bears signatures of both parties is in following terms:
"Carried on deck at shipper's risk without responsibility for loss or damage howsoever caused."
I will first deal with the issue of whether or not the Sea Carriage of Goods Ordinance applies to the goods in question. Parties have by agreement put in a sample printed bill of lading which contains defendant's general conditions of carriage. At the end it contains an express statement, as it is required by section 4 of the Sea Carriage of Goods Ordinance to do, that it "shall have effect subject to the provisions of the rules in the schedule in the Sea Carriage of Goods Ordinance Cap. 207, as applied by the said Ordinance". The rules contained in the schedule to the Ordinance, therefore, must apply unless it can be (shown that there is something in the contract of carriage which places plaintiffs goods outside the operation of those rules. Condition 26 of the bill of lading states-
"26. All goods shipped as deck cargo to be carried at Owner's risk."
Such a stipulation in the general conditions would, as a rule, be without effect and Article III of the Rules which defines responsibilities and liabilities of the parties would still apply by virtue of rule 8 of that Article. The Rules define "goods" as follows:
"'goods' includes goods, wares, merchandise, and articles of every kind whatsoever, except live animals and cargo which by the contract of carriage is stated as being carried on deck and is so carried;"
To escape that operation of the Rules the goods in question must not only be carried on deck but must also be stated in the bill of lading as being so carried. As Pilcher J. said in Svenska Traktor Akt. v. Maritime Agencies (Southampton) Ltd. (1953) 2 Q.B.D. 295 at 300:
"The policy of the Carriage of Goods by Sea Act, 1924 was to regulate the relationship between the shipowner and the owner of goods along well-known lines. In excluding form the definition of 'goods', the carriage of which was subject to the Act, cargo carried on deck and stated to be so carried, the intention of the Act was, in my view, to leave the shipowner free to carry deck cargo on his own conditions, and unaffected by the obligations imposed on him by the Act in any case in which he would, apart from the Act, have been entitled to carry such cargo on signed it will full notice of it. This was done before the goods were taken to the wharf. According to Drala, plaintiff's shipping clerk, the two parties have dealt with each other for a considerable time and the plaintiff was fully aware of the exclusion clause. Unlike most ticket cases where the weaker party-has little choice or say in the matter, the parties here are both large business firms and were dealing on equal terms. Both knew that the goods would be carried on the deck of an open barge towed by a steamer."
How should then this clause be construed? Learned counsel for the defendant submits that the working of the exclusion clause is unambiguous and wide enough to cover everything including negligence. In any case, says he, there is no evidence of negligence on defendant's part. Plaintiffs counsel, on the other hand, contends that in a contract such as this negligence must be specifically stated in the clause if loss through negligence is to be excluded. General words, however wide, says he, cannot be sufficient to cover negligence which he maintains must be inferred from the evidence adduced.
It is important, I think, to determine first what exactly defendant undertook to do. He is a common carrier and he contracted to carry plaintiffs' goods to Labasa. He, however, excluded strict liabilities that the law imposes upon the common carrier under the Sea Carriage of Goods Ordinance by stating on the bill of lading that the goods would be carried on deck and, in fact, carrying them in that manner. Plaintiff cannot, therefore, demand from him the almost absolute liability that is imposed upon him under that Ordinance. To hold the contrary would be to deprive the exclusion clause of all significance.
I do not, however, accept defendant's contention that he can never be liable, no matter how the goods are lost. If, for instance, there was such a misperformance as to destroy the whole core of the contract, the exclusion clause would not avail the defendant. If, to take an example instead of carrying the goods to Labasa he had carried them to Rotuma and lost them en route, he would be liable. So would he if he had gone outside the constract [sic] and sold the goods for profit.
Was there such a misperformance as to amount to a fundamental breach of contract? No such breach has specifically been, pleaded though there is a general allegation of failure to deliver the goods at Labasa. What is specifically pleaded is negligent performance of the contract.
Can failure to deliver the goods at Labasa itself amount to a fundamental breach which would destroy the whole contrac