This case raises the question of liability of the appellant shipowner for loss of cargo. On 24 May 1963, the Dobiri, owned by the appellant or a concern in which it was interested, was anchored some 200 yards out to sea for the purpose of taking on a cargo of copra from the respondent's Tuvamila estate. The copra was being lightered to the ship by means of the ship's whaleboats, manned by members of the ship's crew. In the course of the operation 59 sacks of copra were embarked in one boat which was then towed out by the ship's launch until it came alongside the ship. There was a swell running, and as the whaleboat lay alongside the ship the swell lifted it up, causing it to be caught by the ship's sponson. As a result, the whaleboat was tipped over and the copra was spilled into the sea, becoming a total loss. The ship's tackle had not yet been brought into use, so the lightering operation was not yet concluded. The respondent recovered judgment for GBP 176, the value of the copra, in the Magistrate's Court at Suva. It is accepted that there was negligence on the part of the appellant shipowner in failing to make proper provision for fending off the whaleboat as it lay alongside the ship.

Held: Appeal dismissed.

Clause 25 of a shipping receipt issued to the respondent by the appellant in respect of the cargo read as follows:

(a) The sole cost and the sole risk of lighterage, railage or other mode of conveying the goods prior to the loading on and subsequent to the discharge from the vessel on which the goods are carried by sea, by whosoever such lighterage, railage or other mode of conveying shall be performed, shall be borne by the shipper.

(b) For the purpose of clarifying the meaning of the foregoing sub-clause it is hereby agreed and declared that the word 'Vessel' shall not for the purposes of the said sub-clause include lighters, ship's boats and such subsidiary craft.

The document contains the usual clause paramount subjecting all the terms and conditions thereof to the provisions of the Sea-Carriage of Goods Ordinance (Cap 231). This is in accordance with the requirements of s 4 of the Ordinance. The Ordinance embodies the Hague Rules, the purpose of which is to standardise, within certain limits, the rights of the holder of a bill of lading against the shipowner (particularly in the circumstances of modern commerce where the holder may be a banker or other interested person who was not a party to the bill and thus had no effective control over its terms) and to impose certain minimum liabilities on sea carriers issuing bills of lading.

By s 2 of the Ordinance the Rules are to have effect 'in relation to and in connexion with the carriage of goods by sea'. Under art 1 '"contract of carriage" applies only to contracts of carriage covered by a bill of lading or any similar document of title, in so far as such document relates to the carriage of goods by sea' and '"carriage of goods" covers the period from the time when the goods are loaded on to the time when they are discharged from the ship'.

Article 3.8 precludes any agreement which relieves the shipowner from the liabilities imposed on it by the Rules, which liabilities include the obligation to 'properly and carefully load' the cargo. Article 7, however, permits an agreement exempting the shipowner from liability for loss or damage to cargo arising in connexion with the handling of the cargo 'prior to the loading on'.

In this case, cl 25 purports to envisage the lightering as an operation which might fall to be performed by the shipowner, as in the event it was performed, but as a separate part of the contract of affreightment. What was sought to be achieved, no doubt, was that the lightering should be subject to the special provisions of cl 25, leaving the loading within the ambit of the Rules. Article 7 would permit of this, as lighterage obviously relates to the handling of the goods 'prior to the loading on' and the definitions of 'contract of carriage' and 'carriage of goods' are in consonance with art 7. It would follow that a special agreement as to lighterage would not be invalidated by art 3.8. The question is whether there was such a special agreement in the present case and, if so, in what capacity did the shipowner enter into that agreement - as a common carrier or as bailee.

The significance of the capacity in which the shipowner contracted as to the lighterage, if in fact it did contract to perform it, is that if it did so merely as a bailee then, by reason of well-settled principles, cl 25 would be ineffective to protect it from liability for negligence. The principles referred to are summarised by North P in the New Zealand case of Producer Meats v Thomas Borthwick [1964] NZLR 700, 702-3 as follows:

The common law has always recognised that parties are free to modify obligations imposed by the common law by means of the terms of an express contract, but has always insisted that they 'cannot be removed by subtle implications or ambiguous words': per Lord Buckmaster in London and North Western Railway Co. v. Neilson [1922] 2 AC 263, 266. The person claiming the benefit of the exemption from his common law liability for negligence must do it 'in clear and unambiguous language' and 'he must use ordinary English and not inventive words of doubtful meaning': per Lord Dunedin in the same case, adopting the language of Scrutton L.J. in the Court below. The insistence of the common law that 'adequate words' be used, to quote the language of Scrutton L.J. in Rutter v. Palmer [1922] 2 KB 87, 92, lies in the fact that the common law, as Fullagar J. said in Wilson v. Darling Island Stevedoring and Lighterage Co. Ltd. [1956] HCA 8; [1956] 95 CLR 43, 70, 'has always frowned on such provisions and insisted on construing them strictly'. Thus if, as is the case with the common carrier, liability for damage is more extensive than liability resting on negligence and nothing else, then 'the general principle is that the clause must be confined in its application to loss occurring through that other cause to the exclusion of loss arising through negligence. The reason is that if a contracting party wishes in such a case to limit his liability in respect of negligence, he must do so in clear terms in the absence of which the clause is construed as relating to a liability not based on negligence': per Lord Greene M.R. in Alderslade v. Hendon Laundry Ltd, [1945] KB 189, 192. If, on the other hand, the liability of the defendant rests on negligence alone, then 'the clause will more readily operate to exempt him'. Per Scrutton L.J. in Rutter v. Palmer (supra), for where liability rests exclusively on negligence, then 'unless it is construed so as to cover the case of negligence there would be no content for it at all seeing that his only obligation is to take reasonable care' : per Lord Greene M.R. in Alderslade's case (supra) 192; 245. But even so, 'nothing should be taken as weakening the rule that to exempt from negligence very clear words should be used': per Scrutton L.J. in Reynolds v. Boston Deep Sea Fishing and Ice Co. Ltd. [1922] 38 TLR 429.

The respondent argues that it is the custom in these islands for ships to undertake lighterage from shore to ship. It points out that there are, in fact, no lightermen in the islands, and that it is admitted that the freight paid or contracted for in the present case covered the lighterage from shore to ship. In these circumstances, the contract of affreightment between the parties covered all operations, from the shore to the port of discharge, and thus the shipowner contracted as a common carrier throughout. The appellant shipowner contends that with respect to the lighterage it acted not as a common carrier but in the capacity of a lighterman. In that capacity it was merely a bailee. It did not hold itself out as willing to accept the goods of anyone; it confined itself to readiness to lighter the goods of particular persons only, namely those customers who had entered into contracts with it for carriage of their goods by sea. It being an essential feature of the activities of a common carrier that it holds itself out as ready to accept the goods of all-comers, it followed that the shipowner in the present case was not a common carrier in so far as the lighterage was concerned (compare Belfast Ropework Co v Bushell [1918] 1 KB 210 and Consolidated Tea etc Co v Oliver's Wharf [1910] 2 KB 395).

It is clear that in the absence of custom or special agreement it is the duty of the shipper to bring the cargo to the side of the ship, within reach of the ship's tackle and at its own expense. If, therefore, the ship is lying at anchor so that the cargo has to be taken out to it in lighters, it is the duty of the shipper to provide the necessary lighters and pay the expenses of lightering the cargo, subject to custom or special agreement. Custom cannot override an express provision of the contract (Palgrave v Turid [1922] 1 AC 397). There is no dispute that the Dobiri was a general ship with respect to its sea voyages from port to port, but that does not resolve the question between the parties.

The argument based on custom must fail for the reason that there is no evidence of such a custom as is alleged, much less that it extends to the shipowner being a common carrier with respect to the lighterage. Such a custom may exist but in the present case there is no evidence to support it. As to the matter of special agreement, a shipowner may contract, with respect to the handling of cargo before it is loaded or after it is discharged, in whatever terms it may induce the shipper to accept - in terms excluding all liability on the part of the ship if the shipper will agree.

The present case must be viewed against its proper background. Ostensibly there was only the one contract, the shipping receipt, albeit containing a part which purports to deal separately with the lighterage. But the freight paid or contracted for covered carriage of the cargo right from the beach to the port of discharge. The implication sought to be brought about by cl 25 was that the shipowner, on anchoring to send ship's boats to lighter the copra, assumed the character of a mere bailee, liable only for negligence, reverting to the character of a common carrier once the lightering was concluded. Such a change in its legal relations with the shipper would not be impossible, or even unusual, but the onus rests upon the shipowner to prove a real agreement in those terms.

The contract, in so far as it is contained in the shipping receipt, does not expressly provide for it and it is not to be implied from the terms of cl 25. Clause 25 is permissive only in its terms as to anyone other than the shipper undertaking the lighterage. It therefore merely purports to create a special agreement as to the lighterage as between the shipper and the shipowner, in a situation, moreover, where the freight paid or contracted for included the cost of lightering.

The contract of affreightment extended to the carriage of the copra right from the shore to the port of discharge. In those circumstances cl 25 never operated to govern the lighterage. There is no evidence of a request by the shipper to the shipowner that it should undertake the lighterage, whether on the terms of cl 25 or otherwise; nor of a course of dealing from which to imply such a request on the terms of cl 25. To imply such a request, by reason of cl 25 alone, would be to impose on the shipper a bargain to which, so far as the evidence goes, it never gave a real consent.

The shipowner is to be taken to have contracted as a common carrier and to have retained that character throughout. Fundamentally, it failed to establish a contract for the performance of the lighterage by it in the character of a bailee. That was left to barely possible implication, in vague or ambiguous terms. Clause 25, whilst it distinguishes the lighterage as a separate operation, does not purport to distinguish the legal capacity in which, with respect thereto, the shipowner is to act. It was open to the shipowner, having regard to art 7 of the Rules, to contract expressly as a bailee with respect to the lighterage, but it chose to express itself in cl 25 in oblique terms of 'risk'. The shipper was justified in concluding that the shipowner was contracting throughout as a common carrier. That is the character it would be expected to have assumed as the owner of a general ship carrying cargo on the basis of an inclusive freight and of a printed document in a form common to bills of lading containing a clause paramount. Having regard to its obligations as common carriers, and consistently with the authorities, cl 25 does not operate to exempt the shipowner from liability for its admitted negligence.