UK: Who Bears The Burden Of Proving The Cause Of Cargo Damage?

Last Updated: 21 February 2011
Article by Fionna Gavin and Ruth Monahan

Exportadora Valle de Colina SA and others v A P Moller Maersk A/S (t/a Maersk Line) [2010] EWHC 3224 (Comm)

Where goods are shown to have been loaded in good condition and discharged in damaged condition, it is well established that it is for the carrier to establish that the loss was sustained through a cause for which it is not responsible. In this case, involving claims for damage to about 57 refrigerated containers of grapes, the defendant Carrier argued that where the loss could be attributed to the proper performance of the carrier's duties under the contract of carriage, then the usual rule did not apply and it was for the Claimant to establish what part of the loss was attributable to the carrier's breach.

Background

The Claimants were Chilean growers and exporters of table grapes. The containers, packed by the Claimants, were shipped on 10 separate voyages from Chile to Europe on the terms of the Defendant's standard bill of lading. The judge accepted on the evidence that the cargo had been shipped in sound condition and out-turned in damaged condition. However, the carriage was multi-modal and it was not known at what stage of carriage the damage had occurred.

Exceptions to Liability

Under clause 6.1 of the bill of lading, the Carrier was relieved of liability for any damage caused by (i) insufficient or defective packing; (ii) handling or stowage of the goods by the shipper and (iii) inherent vice. Clause 6.1 (b) also provided that if the Carrier established that the loss or damage "could be attributed to one or more of" these causes, then it would be presumed that the damage was so caused and it would be for cargo interests "to prove that the loss or damage was not, in fact, caused either wholly or partly by one or more of these causes or events".

The wording "could be attributed to" in clause 6.1(b) closely mirrored that of Article 18(2) of the CMR Convention on International Carriage by Road. Applying the approach of the CMR, the phrase "could be attributed to" meant the Carrier only had to prove that one or more of the excluded matters relied on could plausibly have caused the damage. If the Carrier could do so, then the presumption under clause 6(1)(b) applied and it would be for the Claimant to show, on the balance of probabilities, that the excluded causes did not cause the damage to the cargo.

Causation

During the period the containers were within the Carrier's custody, there were a number of periods of "power-off" of the container refrigerating machinery. It was common ground that there would have been periods of power-off that were necessary and permissible for operational reasons, such as loading and discharge and to allow for defrosting of the coils of the refrigeration machinery. But in the case of almost every container in respect of which a claim was made, it was found that the actual periods of power off exceeded what was necessary or permissible or were unexplained. These excessive and unexplained periods of power off constituted breaches by the Carrier of its obligations to care for the cargo and the Claimants asserted that this had caused the damage to the cargo.

The Carrier denied this asserting that:

(a) The damage "could be attributed" to one or more of the excepted causes under clause 6.1, i.e., (i) insufficient or defective packing; (ii) bad stowage or (iii) inherent vice. The presumption that the damage resulted from an excluded clause applied and it was for the Claimants to show that the excluded causes did not cause the damage to the cargo.

On the facts, the judge concluded that the Claimants had discharged this burden of proof by establishing on a balance of probabilities that the damage on outturn was not caused by one of the three excepted causes.

(b) Even if the "attributable causes" exclusions did not apply, then the burden would be on the Claimants to show that the Carrier was in breach of duty and that this breach had caused the loss, i.e., it was for the Claimants to establish a positive cause of loss for which the carrier was responsible

This second argument was pursued on the basis that the Claimants' expert, in countering the Defendant's evidence that the impermissible power offs would not have caused damage, had given evidence to the effect that the grapes could have been damaged as a consequence of a permissible power off, i.e., one that was an essential and inevitable element of the carriage process. The Judge did not accept that this was correct, but nonetheless went on to deal with the position if it had been.

The Carrier's argument ran contrary to the long established principle that where goods have been shipped in sound condition and discharged in damaged condition, then the burden of proof is on the carrier to show that the damage is attributable solely to a cause for which it is not responsible. The Carrier sought to overcome this by arguing that a distinction should be drawn between circumstances where:

(a) A carrier relied upon an exception to liability as being a cause of the loss, e.g., one of the Hague Visby exceptions, in which case the usual rule would apply and the carrier would be liable unless it could discharge the burden of proving that the excepted peril alone was causative of the loss; and

(b) A carrier relied upon an essential and inevitable element of the carriage process (the performance of an aspect of the carrier's duty of care rather than a departure from it) as being a cause of the loss. In this case, the Carrier argued that the general principle did not apply and it was for the Claimants to establish what proportion of any claim was attributable to a breach by the Carrier of its obligations rather than performance by the Carrier of its obligations.

Because damage could be attributed to permissible "power-offs" and those permissible "power-offs" were not an excepted peril but aspects of performance of the Carrier's duty, the Carrier asserted that it was for the Claimants to show to what extent the damage was caused by the Carrier's breach rather than the permissible "power-offs". As the Claimants were unable to establish what proportion of damage was attributable to impermissible power offs as opposed to permissible power offs, they were unable to discharge this burden.

The Judge did not consider the Carrier's argument to be consistent with previous authorities on the issue as the general principle was not limited to cases where the cause for which the carrier contended it was not responsible was an excepted peril, but applied to all situations where (as here) the carrier contended that some or all of the loss was attributable to a cause for which it was not responsible. The Judge reaffirmed that where a cargo claimant shows a prima facie case of breach (by demonstrating that the goods were loaded in good condition and discharged in a damaged condition), the burden is on the carrier as bailee to prove either that all the loss and damage or an identified part of it is attributable to a cause or causes for which the carrier is not responsible. To the extent that the carrier cannot do so, it is liable for the entirety of the loss.

The applicable contractual regime set out under the current clause 6 of this bill of lading led to the same result. Where the stage of carriage as defined during which the loss and damage occurred was "not known", then, save where the Carrier could demonstrate the application of one of the specified exceptions, the Carrier would be liable for the loss.

Comment

The judgment serves to confirm the established principles as to the party on whom the burden of proof lies in cargo loss and damage cases and is a useful reminder of the potential significance of this issue, particularly in the container trade.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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