Cases of ox tongues were shipped on the Muncaster Castle. The bill of lading covering this shipment was signed in May 1953 at Sydney, Australia. The vessel belonged to the defendants, Lancashire Shipping Co Ltd. The plaintiffs, Riverstone Meat Co Pty Ltd, were indorsees of the bill. The bill incorporated the Australian Sea-Carriage of Goods Act 1924 (the Australian Act). The Rules scheduled to the Australian Act were identical to those scheduled to the Carriage of Goods by Sea Act 1924 (UK), ie the Hague Rules.

The vessel had completed its No 2 special survey and annual load line survey by Lloyd's Register surveyors earlier in 1953. The inspection covers over the storm valves in the scupper pipes were opened for inspection. After inspection, the inspection covers had to be closed. The nuts on the inspection covers had to be tightened up in the correct order. The defendants' competent marine superintendent instructed a competent ship repairing firm to open and close the inspection covers. No visual inspection could detect any unevenness in tightening. Tightening up of the nuts was a task well within the competence of a skilled fitter. It was not supervised by Lloyd's surveyors or the defendants' superintendent.

On the vessel's arrival at London, 113 cases were found damaged by seawater. The plaintiffs sued. They claimed that the damage was caused by the unseaworthiness of the vessel. They alleged that the inspection covers were defective, allowing sea water to leak into the cargo hold and damage the goods. The plaintiffs argued that the Hague Rules obligation to exercise due diligence to make the ship seaworthy is personal to the shipowner. In this regard, the defendants (as shipowners) could not use the fact that the fitter was not employed by the defendants as a defence: Wilsons & Clyde Coal Co v English [1938] AC 57 (HL) 80 (Wilsons); Northumbrian Shipping Co Ltd v E Timm & Son Ltd [1939] AC 397 (HL) 403 (Timm); International Packers (London) Ltd v Ocean Steam Ship Co Ltd [1955] 2 Lloyd's Rep 218 (Packers). W Angliss & Co (Australia) Pty Ltd v P & O Steam Navigation Co [1927] 2 KB 456 (Angliss) does not conflict with this principle. The plaintiffs also cited Cranfield Bros Ltd v Tatem Steam Navigation Co Ltd (1939) 64 Ll L Rep 264, Minister of Materials v Wold SS Co Ltd [1952] 1 Lloyd's Rep 485; Paterson Steamships Ltd v Robin Hood Mills Ltd (1937) 58 Ll L Rep 33 (PC) (Paterson), and GE Dobell & Co v Rosemore Steamship Co Ltd [1895] 2 QB 408 (CA) (Dobell). The plaintiffs argued that the defendants were liable because they had actual or imputed knowledge of the defects of the ship: Angliss 463. If the range of persons for whom the defendants was responsible included the fitter, the exception of a latent defect could not apply. The plaintiffs also argued that in any event no question of latent defect arose.

Alternatively, the plaintiffs alleged that the damage was caused by the negligence of the defendants in failing to discover the presence of water in the cargo hold by proper soundings. The plaintiffs argued that the defendants were not protected by art 4.2.a of the Hague Rules because failure to take soundings was not an act, neglect or default in the management of the ship but in the care of cargo.

The defendants admitted that the vessel was unseaworthy, but argued that they had exercised due diligence to make the ship seaworthy. They were therefore not in breach of art 3.1 of the Hague Rules. They also argued that proper soundings were taken. Even if no proper soundings were taken, they argued that they were protected by the exception in art 4.2.a of the Hague Rules.

Held: Judgment for the defendants.

The vessel was unseaworthy. The most probable cause of the admission of sea water is that the nuts on the inspection covers were not secured evenly or sufficiently prior to the voyage. The fitter had negligently failed to properly secure the nuts. When the vessel reached Sydney for loading of the plaintiffs' cargo, the nuts had been loosened to an extent enabling sea water striking the sides of the ship to enter.

Insofar as the inspection covers are concerned, the defendants have satisfied their burden of proving the exercise of due diligence. First, the fitter's negligence was not discoverable by Lloyd's surveyors or the defendants' marine superintendent carrying out their duties in accordance with the ordinary prudent practice of such persons. Second, the defendants should not be held liable for the negligence of the fitter employed by competent independent contractors, because their own competent surveyor was not negligent in failing to detect this bad workmanship by the fitter.

Since Dobell, it has been accepted that due diligence must be exercised by the shipowner personally 'or the agents whom [it] employs to see to the seaworthiness of the ship'. In Angliss, the due diligence obligation was examined exhaustively. Angliss rejected an argument that the carrier must 'be accountable for lack of due diligence on the part of the shipbuilders and their workmen' as they are deemed to be agents of the carrier: Angliss 460. Prior to legislative intervention, the seaworthiness obligation raised only the question of whether the ship was seaworthy: Angliss 461. It was an unqualified obligation suitable for more simple days when ships were not very complicated structures. With more complicated ships nowadays, legislation 'intended to emphasize the specialization which has developed in modern times and to emphasize the distinction between carrier and shipbuilder' reflects this by limiting the carrier' seaworthiness obligation to a due diligence standard. The carrier is 'liable for all such duties as appertain to a prudent and careful carrier acting as such by the servants and agents in [its] employment'. If the carrier 'has a new vessel built', the carrier 'will be liable' if it 'fails to engage' reputable shipbuilders and 'adopt all reasonable precautions'. For instance, the carrier might be required to instruct the shipbuilders to meet satisfy a reputable classification society, or 'engage skilled naval architects' to advise the carrier and skilled inspectors to supervise the work. Similarly, if the carrier purchases a ship, the carrier might be required to take 'appropriate steps', such as having 'surveys and inspections' showing that the ship is fit for service in which the carrier puts the ship. The carrier, however, cannot be held 'guilty of want of due diligence simply because the builders' employees have put in some bad work which, though concealed, renders the vessel unfit'. Nevertheless, the carrier could be liable when it delegates the task of inspecting the work done to the ship to an inspector, and that inspector 'had negligently passed bad work which he saw, or even, perhaps, which he ought to have seen'. Turning to ship design, the carrier might perhaps be 'held liable if the naval architect whom [it] employed to supervise the design, applying current standards, failed to detect a definite error in design':. But the carrier might not 'be so liable for an error on the part of one of the classification societies, such as Lloyd's, which occupy a public and quasi-judicial position'. According to Angliss, the carrier might also be liable if:

either personally or by [its] scientific advisers, [it] chose a special form of construction which involved, according to current standards, a known risk - for example, if [it] chose to dispense with a cofferdam so as to increase [the vessel's] cargo space although the best opinion thought a cofferdam necessary.

Finally, ship repairs might impose 'on the carrier a special duty to see, as far as reasonably possible, by special advisers for whom [it] is personally responsible, that the repairs adequately make good the defects': Angliss.

Angliss has been accepted as stating the legal position authoritatively and accurately. Angliss was applied in CH Smith & Sons v P&O Steam Navigation Co Ltd (1938) 60 Ll L Rep 419, 423 (CH Smith). Angliss has not been impliedly overruled. The observation in Paterson 547 that the due diligence obligation is 'not limited to personal diligence on the part of the owner' does not contradict Angliss. Next, Wilsons and Timm do not throw any doubt upon Angliss. In neither of these cases does it appear that Angliss was cited in argument. Waddle v Wallsend Shipping Co Ltd [1952] 2 Lloyd's Rep 105 (Waddle) followed Angliss when Wilsons was cited. Furthermore, Davie v New Merton Board Mills Ltd [1958] 1 QB 210 (CA) 238 (Davie) shows that the plaintiffs' construction of art 3.1 of the Hague Rules would effectively change the new qualified obligation as to seaworthiness back into the old absolute warranty of seaworthiness, except in rare cases of the true latent defect in the sense of defects not discoverable by care on the part of anyone. That would be an unfortunate alteration. Turning to Packers, no arguments were made as to the position of an independent contractor or its servants. The use of 'independent contractor' in Packers 236 was either a slip or mistake in reporting. The judge in Packers did not have in mind the question of the negligence of the servant of an independent contractor such as a ship repairer or shipbuilder. The reference to Angliss in Packers makes it clear that the judge had in mind the appointment of a competent independent surveyor.

Although the plaintiffs also alleged two other types of unseaworthiness, namely, unseaworthiness by the design of the cargo hold and unseaworthiness based upon improper stowage, these allegations could be easily dismissed. As to the latter allegation, there was no evidence of any improper stowage. As to the former allegation, the design of the cargo hold was normal. The vessel had passed all surveys by the classification society. There was no previous record of cargo damage in the cargo hold. In any case, there was no want of due diligence on the part of the defendants. A reasonable shipowner cannot be expected to go behind the classification society's certificate: Waddle 130.

As for the further question of law of whether failure to take soundings is covered by the exception in art 4.2.a of the Hague Rules, it was unnecessary to decide this issue. Nevertheless, the Court expressed a tentative view that the failure to take soundings was within the art 4.2.a exception. Failure to secure hatches when severe weather was anticipated fell within the art 4.2.a exception: Packers 234. A ship at sea stays afloat by ensuring that sea water is not in the ship. Preventing the admission of sea water, detecting its presence onboard, and pumping sea water out are all operations required for the ship. Neglecting these operations is to 'neglect to take reasonable care of the ship or some part of it as distinct from the cargo' (Gosse Millerd v Canadian Merchant Marine [1928] 1 KB 717 (CA)), and a 'want of care of the vessel indirectly affecting the cargo' (The Glenochil [1896] P 10). Failure to cover port holes leading to the entry of sea water in rough weather was covered by the art 4.2.a exception: The Silvia (1898) 171 US 462. Failure to test a valve leading to a cargo hold before pumping out water from a neighbouring cargo hold was within the art 4.2.a exception, as it was a failure to use a means of safety provided by the shipowners: The Mexican Prince 82 F 484 (SD NY 1897) (affirmed 91 F 1003 (2d Cir 1899)). Failure to take soundings and to apply the pumps was covered by the art 4.2.a exception: The British King 89 F 872 (SD NY 1898) (affirmed 92 F 1018 (2d Cir 1899)); The Merida 107 F 146 (2d Cir 1901); The Ontario 106 F 324 (SD NY 1900). See also The Sandfield 79 F 371 (SD NY 1897) (affirmed 92 F 663 (2d Cir 1898)) (failure to open sluice gate designed for emptying bilges). Meanwhile, CH Smith is the only English case where the failure to use pumps has been considered. The shipowners in CH Smith had failed to exercise due diligence to make the ship seaworthy and were accordingly liable. CH Smith also decided that the shipowners breached their obligation under art 4.2.a, in that the presence of sea water having been found, the crew failed to use the pumps to clear the water, and for that failure the shipowners were not protected by the art 4.2.a exception. CH Smith leads to the odd result that if the failure to take soundings is an act, neglect, or default in the management of the ship and, accordingly, the ship would have been protected if no soundings had been taken, yet if soundings are taken and disclose the presence of sea water, the ship is not protected if proper steps are not taken to remove the water found. It is unnecessary to opine whether CH Smith was correctly decided as CH Smith might be justified on its own facts.

[For the plaintiff's unsuccessful appeal to the Court of Appeal, see Riverstone Meat Co Pty Ltd v Lancashire Shipping Co Ltd (The Muncaster Castle) [1960] 1 QB 536 (CA) (CMI2294).]