Stemcor (A/SIA) Pty Ltd v CV Scheepvaartonderneming Ankergracht [2005] FCA 1808
Coils of steel were shipped by sea from Japan to Australia. After arriving in Australia, the coils were discovered to be damaged by corrosion resulting from contact with water either before or during the course of carriage.
The Federal Court had to decide whether damage to the coils was due to insufficiency of packaging by the shipper of the goods (in which case the carrier would not be responsible for the damage) or alternatively due to a failure by the carrier to exercise due diligence to make the vessels seaworthy and to make the holds of the ship, in which the goods were carried, fit and safe for their carriage.
The carrier was held responsible for the damage because of failure to exercise due diligence to make the vessels seaworthy and make the holds fit and safe for carriage and preservation of the coils. The shipper was entitled to damages equal to the cost of replacing the damaged coils in Sydney – a total of $513,947.91. The Court made the following observations:
Due diligence
The carrier had a duty to exercise due diligence to make the vessels seaworthy.
Seaworthiness is to be assessed according to the voyage under consideration and there is no single standard of fitness that a vessel must meet. Seaworthiness is relative to the nature of the ship, to the particular voyage and even to the particular stage of the voyage at which the ship is engaged.
In this case, a vessel for use in the voyages in question at the particular time of year for the particular cargo that did not have either a dehumidification system or heaters installed was unseaworthy. From a commercial point of view, the carrier could have factored the cost of installation and operation of dehumidifiers into the freight charge.
Insufficiency of packaging
Insufficiency of packaging is the inadequate preparation of goods to withstand the foreseeable risks of carriage on the voyage contemplated.
In this case, the coils were packaged in a way regarded as adequate in industry and consistent with general practice. Ordinarily, where goods have been packed in a manner that is normal or customary in the relevant trade, such that goods so packaged do not ordinarily suffer damage, it can be concluded that any damage to such goods was the fault of the carrier in failing to exercise proper care.
It was noted that packaging capable of preventing even the most minor damage is not practical and is generally not expected. By the same token, the degree of care that would have to be exercised by a carrier in order to avoid all minor damage is also not always practical or expected.
For further information, please contact Elizabeth Guerra-Stolfa on (03) 9608 2144 or e.guerra@cornwalls.com.au
or Kathryn de Bont on (03) 9608 2256 or k.debont@cornwalls.com.au
