In this action, the plaintiff was the insurer of the owners of the cargo, 15,107 bags of muriate of potash weighing 755,350 mt in laminated PP bags at 50kg per bag, at whose risk the same was shipped and was subrogated to the rights of the owners. In its amended statement of claim, the plaintiff pleaded that the defendant was a bailee of the cargo and/or a common carrier for reward and was under a duty to exercise all proper and reasonable care in the loading, stowage, handling, custody, care, carriage and discharge and delivery of the cargo. The plaintiff alleged that the defendant breached its obligation, resulting in the cargo being damaged by water. The plaintiff also pleaded that it was a term of the contract to be implied by law and/or the defendant impliedly undertook that the vessel should be seaworthy at the commencement of the voyage. In the circumstances the plaintiff claimed that the defendant failed to deliver the cargo in the same quantity and in the same condition in which it was shipped and as a result of that the plaintiff had to indemnify its assured and in turn it had suffered loss, damage and expense.

The defendant denied liability on the basis that it was not a common carrier or bailee for reward and did not hold out itself, expressly and/or impliedly, to be such. It was pleaded in the amended defence that the contract between the defendant and the owners of the cargo was one of a charter or hire. It was also alleged that the owners of the cargo had hired the defendant's barge and that the owners of the cargo would be responsible for their own marine insurance for their own cargo. Secondly, further or in the alternative it was pleaded in the amended defence that even if the defendant was a common carrier for reward, the loss, if any, 'was not caused by any negligence on the part of those in charge of the barge and could not have been avoided by the exercise and maritime skill on their servants' or agents' part' for the reason that the barge was struck by or came into contact with some underwater objects whilst being manoeuvred to berth alongside the jetty. In short, the defendant denied any breach of a duty to take reasonable care. Even if it was under a duty to provide a seaworthy vessel, it had done so as was evident from the fact that the vessel chartered to the cargo owners was afloat for 16 days from the commencement of the voyage before sinking.

Held: Plaintiff's claim allowed.

The first issue is whether there is a distinction between the two types of carriers, common and private. In the case of The Asia Star; Lam Huat Lighterage Co v Owners of Freight and/or Cargo on MV 'Asia Star' and/or Proceeds of Sale thereof [1979-1980] SLR(R) 272; [1980] 1 MLJ 261 (CMI219) Chua J said this at 264: 'The law is clearly set out in Vol 5 Halsbury's Laws of England (4th Ed) paras 302-303. To make a man a common carrier he must carry the goods as a public employment; he must carry for all indifferently; he must hold himself out as ready to carry for reward so long as he has room; he must hold himself out ready to carry for hire, at a reasonable rate, as a business and not as a casual occupation for a particular occasion. The question whether a man is a common carrier or not is in every case a question of fact. A man may be a common carrier without so styling himself. The question is not determined by a man's description of his own business, though it may be inferred from its character that he is a common carrier.'

It is quite immaterial whether the defendant is classified as a common carrier or private carrier or bailee for reward as such classification would still not absolve the defendant from liability if it can be proven that it was in breach of the standard of care expected from each category of carrier. It can be gleaned that the relationship of the shipowner and the cargo owner was on the basis of a contract for carriage of goods by sea.

It was also contended for the defendant that there was no specific plea in the statement of claim that the defendant undertook the carriage by sea. Hence, the absolute warranty of seaworthiness should be excluded. On perusal of the statement of claim, the plaintiff is correct to say that it was self-evident that the carriage of the cargo from the Sabah Timber Company's Jetty to the Asiatic Development Bhd, Sri Tenegang State Jetty was carriage by sea. The obligation of the defendant under common law or as implied by law is absolute in nature to provide a seaworthy ship at the commencement of the voyage. The plaintiff's counsel correctly pointed out that since 'the Hague/Hague-Visby Rules have not been pleaded, nor reference made to any specific incorporation of these rules in the amended points of defence ... the only obligation of seaworthiness is the absolute obligation imposed by common law'. Counsel for the defendant in his final submission brought up the applicability of the Carriage of Goods by Sea Act 1971 (UK). The effect of that statute is that the defendants would have been only obliged to 'exercise due diligence to make the ship seaworthy and to man and equip her properly and make the holds and refrigeration and cooling chambers and all other parts of the ship in which the goods are carried, fit for their reception, carriage and preservation'. As to loss and damage, counsel for the defendant also submitted that his client is only liable for the loss or damage to the cargo due to specified perils and due to any other cause arising without the actual fault or privity of the carrier and without the fault or neglect of the agents or servants of the carrier. However, such inclusion has no basis either under the contractual documents or as a matter of law.

The burden is on the defendant to prove that the barge was seaworthy at the commencement of the voyage on 10 March 1995. In the present case, this task has not been undertaken by the defendant. In fact, there was no explanation offered by the defendans why there was corrosion in the vicinity of the holes found at the hull of the barge. Rust would not appear suddenly. The inevitable conclusion is that the barge was not seaworthy at the commencement of the voyage.

In the event that the above conclusion is incorrect and the burden of proving that the barge was not seaworthy lies with the plaintiff, it is necessary to further consider whether there is any substance on the assertion of the defendant that the barge came into contact with submerged object or objects as it was being manoeuvred to berth at the jetty of the destination. Unseaworthiness 'does not have to be the dominant cause, but a cause, or a real, effective cause, of the loss' (Lord Wright in Smith, Hogg & Co Ltd v The Black Sea & General Insurance Co Ltd 162 LT 11; [1940] AC 997). Accordingly, it is enough for the plaintiff to demonstrate (should the onus be upon it to do so) that one or more of the holes in the hull, through which a water ingress took place contributed to the sinking of the vessel, assuming that it can be proved that such holes appeared through unseaworthiness of the vessel at the commencement of that voyage.

Based on the evidence adduced, on the balance of probabilities the version of the plaintiff is more credible. It follows that the barge was unseaworthy at the commencement of the voyage. The assertion of it having coming into contact with submerged object as it was manoeuvred to berth is most unlikely to have happened.