England’s highest court finally, after over four centuries of reported decisions on the issue, definitively held that the burden of proof lies on the carrier where cargo owners sue a ship owner for loss or damage to cargo.
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 it 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.
A cargo of coffee (which is hygroscopic and absorbs, stores and emits moisture) was sent from Colombia to Germany. Coffee beans carried from a warm to a cooler climate inevitably emit moisture. They can be shipped in an unventilated or ventilated container. In this case the roof and walls were lined with an absorbent material. Despite this, the bags in 18 of the 20 containers were found to have suffered water damage from condensation.
The issue was whether sufficient layers of the absorbent lining had been placed. On the facts it was found that the evidence fell short of proving any sufficiently uniform or accepted practice about the number of layers of material required and that the carrier had not shown that sufficient precautions had been taken.
The carrier had the legal burden of proving that it took due care to protect the goods from damage, including due care to protect the cargo from damage arising from inherent characteristics such as coffee’s hygroscopic character. In the absence of evidence that the containers were dressed with more than one layer of lining paper, it followed that the carrier had failed to prove that the containers were properly dressed.
The judgment deals with the principles of bailment.
- The first principle is that the bailee of goods is not an insurer. The duty is limited to taking reasonable care of the goods.
- Secondly, although the obligation of the bailee is a qualified obligation to take reasonable care, the bailee bears the legal burden of proving the absence of negligence. The bailee need not show exactly how the injury occurred but it must show that it took reasonable care of the goods or that any want of reasonable care did not cause the loss or damage sustained. Because the bailee is in possession of the goods it is difficult or perhaps impossible for anyone else to account for the loss or damage.
- If the Hague Rules apply, nothing in the Rules alters the status of a contract of carriage by sea as a species of bailment for reward based on the above principles.
The case is Volcafe Ltd v Compania Sud Americana De Vapores SA.