Volcafe Ltd and others v Compania Sud Americana De Vapores SA

United Kingdom

05.12.2018

Civil

While an appeal to Court of Appeal is by way of rehearing, a trial judge’s findings of fact should not be overturned simply because Court of Appeal would have found them differently

Present appeal is about the burden of proof in actions against a shipowner for loss of or damage to cargo. The six claimants were the owners and bill of lading holders for nine separate consignments of bagged Colombian green coffee beans shipped at Buenaventura in Colombia between 14 January and 6 April 2012 on various vessels owned by the Defendant shipowners for carriage to Bremen. Each consignment was covered by a bill of lading covering the entire carriage to Bremen.

The carrier was contractually responsible for preparing the containers for carriage and loading the bags of coffee into them. On outturn at Bremen, condensation damage to the coffee beans was found in 18 out of the 20 containers. The cargo owners brought a claim against the carriers for breach of their duties as bailees to deliver the cargoes in the condition recorded on the bill of lading and, alternatively, breach of article III, Rule 2 of the Hague Rules for failure to “properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried”. They alleged negligence by the carriers for failing to use adequate or sufficient Kraft paper.

The case was tried in the London Mercantile Court by David Donaldson QC, sitting as a deputy High Court judge. He held that, there was no legal burden on the carrier to prove that the damage to the cargo was caused without negligence or by an excepted peril. There was only a factual presumption that damage ascertained on discharge was due to negligence. The Court of Appeal disturbed the factual findings as to commercial practice and the lack of evidence on the number of layers of lining paper in the containers, dismissing the claim by the cargo owners.

The delivery of goods for carriage by sea is a bailment for reward on the terms of the bill of lading. Bailment is a transfer of possession giving rise to a legal relationship between the bailor and the bailee which is independent of contract, although in practice it is commonly contractual and the terms of the contract will commonly modify its incidents. Two principles of the common law of bailment are fundamental. The first is that a bailee of goods is not an insurer. His duty is limited to taking reasonable care of the goods. This has been true of bailees generally for as long as bailment has existed as a recognised source of legal responsibility at common law. For all practical legal purposes, the common law liability of a carrier, unless modified by contract, is the same as that of bailees for reward generally.

Although, the obligation of the bailee is thus a qualified obligation to take reasonable care, at common law, he bears the legal burden of proving the absence of negligence. He need not show exactly how the injury occurred, but he must show either that he took reasonable care of the goods or that any want of reasonable care did not cause the loss or damage sustained.

If the carrier could and should have taken precautions which would have prevented some inherent characteristic of the cargo from resulting in damage, that characteristic is not inherent vice. Accordingly, in order to be able to rely on the exception for inherent vice, the carrier must show either that he took reasonable care of the cargo but the damage occurred nonetheless; or else that whatever reasonable steps might have been taken to protect the cargo from damage would have failed in the face of its inherent propensities.

This Court has on a number of occasions pointed out that while an appeal to the Court of Appeal is by way of rehearing, a trial judge’s findings of fact should not be overturned simply because the Court of Appeal would have found them differently. It must be shown that the trial judge was wrong: ie that he fundamentally misunderstood the issue or the evidence, or that he plainly failed to take the evidence into account, or that he arrived at a conclusion which the evidence could not on any view support. Within these broad limits, the weight of the evidence is a matter for the trial judge.

The Court of Appeal was not justified in overturning the deputy judge’s findings. The carrier had the legal burden of proving that, he took due care to protect the goods from damage, including due care to protect the cargo from damage arising from inherent characteristics such as its hygroscopic character. Present Court reinstates the deputy judge’s conclusions about the practice of the trade in the lining of unventilated containers for the carriage of bagged coffee and the absence of evidence that the containers were dressed with more than one layer of lining paper. In the absence of evidence about the weight of the paper employed, it must follow that the carrier has failed to prove that the containers were properly dressed. Appeal allowed.

Tags : Consignment Damage to cargo Burden of proof

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