## Facts

- A shipper delivered 150 cases of canned ox tongue in good order at Sydney for carriage to London aboard the *Muncaster Castle* under a bill of lading incorporating the Hague Rules as given force by Australian legislation.
- Before the voyage, the shipowners retained reputable ship-repairers to open and refit inspection covers over storm valves during surveys in Glasgow.
- A fitter employed by the repairers negligently failed to tighten certain nuts on the inspection covers; once “hardened up,” the defect was not discoverable by ordinary visual inspection or routine checking.
- On the homeward voyage, heavy weather caused seawater ingress into No. 5 lower hold, damaging 113 cases; the quantum of loss was agreed.
- The shipowners admitted unseaworthiness but contended they had exercised due diligence because they selected competent contractors and supervision consistent with prudent practice.
- The trial court and the intermediate appellate court found for the shipowners on the basis that reasonable care in selection and general supervision satisfied due diligence.

## Issues

1. Whether the Hague Rules obligation to “exercise due diligence” to make the ship seaworthy is satisfied when the only fault is negligence by an employee of an independent ship-repairer engaged by the carrier.
2. Whether the carrier’s due-diligence obligation is personal and nondelegable such that negligence by contractors (and their employees) performing seaworthiness-related work is attributed to the carrier.
3. Whether treating the duty as nondelegable is inconsistent with the statutory provision eliminating any implied absolute undertaking of seaworthiness.

## Decision

- The House of Lords allowed the appeal and held the shipowners liable for the cargo damage.
- The carrier’s Art. III r.1 duty to exercise due diligence to make the ship seaworthy is a personal obligation that cannot be delegated.
- Due diligence is not shown merely by employing reputable contractors and competent supervision; the carrier must show due diligence was exercised by all persons engaged in making the vessel seaworthy.
- Because the vessel was unseaworthy due to the fitter’s negligence in work directed to seaworthiness, the due-diligence defense failed.
- Judgment was entered for the shipper for the agreed loss, with interest and costs.

## Legal Principles

- Under Hague Rules Art. III r.1, the carrier bears a nondelegable duty to exercise due diligence to make the ship seaworthy before and at the beginning of the voyage.
- For purposes of Art. IV r.1, unseaworthiness caused by any want of due diligence by contractors or their employees working on seaworthiness is treated as want of due diligence “on the part of the carrier.”
- Statutory removal of an implied absolute warranty of seaworthiness does not reduce the carrier’s burden under the due-diligence standard; the carrier does not guarantee seaworthiness but bears the risk of negligent performance within the seaworthiness work chain.

## Conclusion

The House of Lords held that a carrier cannot avoid liability for unseaworthiness by outsourcing seaworthiness-related work to competent independent contractors; any negligent failure by those engaged in making the ship seaworthy defeats the carrier’s due-diligence defense under the Hague Rules.


Riverstone Meat Co. Pty. Ltd. v. Lancashire Shipping Co. Ltd. (The Muncaster Castle), [1961] A.C. 807 (H.L. 1961)