The plaintiff is a dealer in merchandise and the defendant is an inter-island carrier of goods. The plaintiff's claim is in respect of goods lost at sea while being carried by the defendant from Suva to Labasa. The goods were loaded on the defendant'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. Inside the barge was 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 17h00, towed by the vessel Mooea. They steamed all night. 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 defendant admits that the plaintiff's goods were lost at sea.

The plaintiff alleges a breach of contractual duty on the defendant's part in failing to ensure that the cargo was properly secured for the voyage and also in failing to deliver that cargo at Labasa. The plaintiff further alleges breach of duty under the Sea Carriage of Goods Ordinance.

The defendant denies these allegations and claims the protection of an exclusion clause inserted in the bill of lading. This clause, stamped on the bill of lading, which bears the signatures of both parties, is in the following terms: 'Carried on deck at shipper's risk without responsibility for loss or damage howsoever caused.'

Held: Judgment for the defendant.

The first issue is whether the Sea Carriage of Goods Ordinance applies to the goods in question. The parties have submitted a sample printed bill of lading which contains the defendant's general conditions of carriage. It contains an express statement, as required by s 4 of the Sea Carriage of Goods Ordinance, 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 the plaintiff's goods outside the operation of the Rules. Condition 26 of the bill of lading states: '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 art 3.8 of the Rules, which defines the responsibilities and liabilities of the parties, would still apply. 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 QBD 295, 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 this clause be construed? The defendant submits that the working of the exclusion clause is unambiguous and wide enough to cover everything including negligence. In any case, there is no evidence of negligence on the defendant's part. The plaintiff 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, cannot be sufficient to cover negligence which must be inferred from the evidence adduced.

It is important to determine first what exactly the defendant undertook to do. It is a common carrier and contracted to carry the plaintiff's goods to Labasa. However, the defendant 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. The plaintiff cannot, therefore, demand from the defendant the almost absolute liability that is imposed upon it under that Ordinance. To hold the contrary would be to deprive the exclusion clause of all significance.

The defendant's contention that it can never be liable, no matter how the goods are lost, cannot be accepted. 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, it had carried them to Rotuma and lost them en route, it would be liable. So would it if it had gone outside the contract 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 contract? Where a common carrier is an 'insurer' in the eyes of the law, as it would be under the Sea Carriage of Goods Ordinance, it might be. Here, however, the contract excluded the operation of that Ordinance and the parties specifically agreed that the cargo would be carried on deck at the shippers' risk.

In this case there is nothing in the evidence to show that the defendant deviated from the contract. On the contrary, it shows that endeavours were made to perform the contract as envisaged by the parties. The loss must be attributed either to careless performance of the contract as claimed by the plaintiff, or causes falling outside negligence as contended by the defendant. Had there been any deliberate, as opposed to careless, act on the defendant's part causing the loss it might have amounted to a fundamental breach, but no such act is suggested by the plaintiff's evidence. There was thus no fundamental breach of the contract on the part of the defendant. Had there been such a breach the words 'loss or damage howsoever caused' would have afforded the defendant no protection. What is the position in the absence of such a breach? Is the wording of the clause wide enough to include negligence or must it be confined to causes other than negligence?

The Hague Rules were designed to regulate the common law relationship between the shipper and the carrier. The Rules specifically exclude from their operation goods stated to be carried on deck and in fact so carried. In respect of such goods the carrier is not an 'insurer' and is required only to show reasonable care. In such a case, the words 'howsoever caused' will, in the absence of any fundamental breach, cover the negligence of the defendant's servants.

The evidence shows that, when the barge left Suva, the drums and other goods were tied down by ropes and covered with tarpaulin. It was in the rough seas near Nasilai that drums came loose and caused damage to the bulwark. They also dislodged the pins that kept the lids to the two holes in place. The coming loose of the drums in rough weather was the main cause of the loss of and damage to goods. The evidence discloses no fundamental breach of contract on the part of the defendant and to hold it responsible for such loss to deck cargo would be to impose upon it the liability of an 'insurer' and deprive the exclusion clause of all its content.

[For the unsuccessful appeal to the Court of Appeal, see Burns Philp (South Seas) Co Ltd v Marine Pacific Ltd [1979] FJCA 4 (CMI1747).]