BURDEN AND STANDARD OF PROOF
Burden of proof is the duty incumbent on a litigant to prove to the court the fact or facts supporting the claim at issue. First, there is the burden on the plaintiff to tender evidence in support of the claim he has put forward. Secondly, there is the persuasive burden, the onus of convincing the court on the facts at issue: this remains constant throughout the trial with any litigant on whom the burden of proof lies, be he plaintiff or defendant.
Whenever a loss or damage occurs under a policy of marine insurance, and a claim is pursued, there falls upon the claimant the duty of presenting evidence to the court to substantiate his claim that the proximate cause of that loss or damage was an insured risk. In so doing, the claimant, who could be a shipowner, cargo-owner, mortgagee or any other interested party, must establish a prima facie case to show that the loss or damage was, in fact, caused by the specified peril or perils insured against, and it is only then that the defendant insurer is compelled to offer a defence to counter that claim. Until a prima facie case is established by the claimant, the defendant simply refutes the claim on the basis that there is no case to answer.
The subject of burden of proof is necessarily related to the device of presumptions which the common law has, over the years, framed to assist a party in his evidential burden of proof. In the law of marine insurance, the nature and scope of the presumptions of proof of loss by an unascertainable peril of the seas and of unseaworthiness are of particular relevance. Further examples of presumptions are: ‘A ship never heard of is presumed to have foundered at sea’; and the statutory presumption, under s 58 of the Act, that a ship missing after a reasonable time with no news of her may be presumed an actual total loss. When and how these presumptions apply will be discussed.
Typically, a claimant may try to establish a prima facie case to show that a loss was caused by a peril of the seas, barratry and/or fire, and once that prima facie case has been established, the defendant insurer may endeavour to counter that claim either with a simple denial challenging the truth of the plaintiffs account of the cause of loss, or with an affirmative allegation that the loss was caused by the wilful misconduct of the assured.
It is fair to say that, as a general rule, to succeed in a claim for a loss by any insured peril, the burden of proof rests with the claimant to prove that the loss was so caused. However, as will be seen, the law on the burden and standard of proof is rendered that much more contrived and complex by reason of the fact that perils of the seas, barratry and fire each has its own ‘ingredients’, which would obviously have to be proved by the plaintiff. The plaintiffs burden of proof is thus governed by the inherent characteristics of the peril on which he has chosen to base his claim.
In a claim based on ‘perils of the seas’ as the proximate cause of loss, the element of fortuity1 dictates that the plaintiff has to prove that the loss was accidental. And, in the case of fire, neither fortuity nor complicity are essential requirements; this means that the plaintiff does not have to prove that the fire was accidentally caused, nor does he have to prove the absence of complicity. Barratry, on the other hand, is not fortuitous, but contains the element of complicity, namely, that the assured himself did not connive or consent to the barratrous act.
When perils of the seas is pleaded as the proximate cause of loss, the basis of the plaintiff rests critically on the element of fortuity which must be proved to the satisfaction of the court. This means that, to displace the plaintiffs prima facie case, the defendant has to adduce evidence sufficient to cast doubts in the mind of the judge that the loss was not fortuitous. Regardless of the nature of the defence, the burden of proof rests throughout with the plaintiff to prove his case on the balance of probabilities, and though wilful misconduct may have been raised, the defendant is clearly not required to offer affirmative (or conclusive) proof that the loss was so caused, neither is he obliged to provide proof even on the balance of probabilities. If, at the end of the day, the court is doubtful or uncertain as to the cause of loss, the plaintiffs action must fail.
In relation to a claim based on fire, the burden of proof thrown upon the plaintiff is considerably lighter. His case is established simply by proof of loss by fire, and, as he is neither required to prove fortuity nor complicity, the burden of proof for the defence of wilful misconduct must surely rest with his opponent. And, according to case law, this has to be proved to a high degree of proof which, though not quite the criminal standard, must match the gravity of the charge.
When wilful misconduct is pleaded in response to a claim based on barratry, the legal position as regards both the burden and standard of proof is less straightforward. Problems have arisen because of the nature of the peril of barratry, which, by definition, envelops the essential element of complicity or, more accurately, the absence of complicity.2 Two issues arise: first, is the burden on the plaintiff to prove the absence of complicity or on the defendant to prove complicity? Secondly, should the standard of proof for the defendant be higher (the criminal standard) so as to reflect the seriousness of the charge? These rather controversial issues are highlighted in the case extracts.
The plaintiff’s burden of proof
Whenever a claim is pursued for loss under the head of perils of the seas, it falls upon the claimant to show, on the balance of probabilities, that that loss was proximately caused by that peril.
Compania Naviera Santi SA v Indemnity Marine Insurance Co Ltd, ‘Tropaioforos’  2 Lloyd’s Rep 469
On 1 December 1957, over a period of five hours, the steamship Tropaioforos sank in the Bay of Bengal, in calm weather conditions. The plaintiff owners of the vessel claimed that the loss was due to perils of the seas, in that Tropaioforos struck an unknown submerged object which caused sufficient underwater damage to allow her to be sunk by the resulting inrush of seawater. The underwriters refused to pay, and alleged that Tropaioforos had been scuttled with the connivance of the owners.
The court ruled that the plaintiff owners of Tropaioforos had failed to prove that there had been an accidental loss due to perils of the seas. The insurers’ theory of scuttling provided the only explanation for the loss and, therefore, the plaintiffs could not recover under the policy. The court considered the issue of burden of proof.
Pearson J: [p 473] …As to the burden of proof, the whole question has been reserved in the House of Lords; but, subject to that reservation, it has been established by decisions of the courts of first instance and the Court of Appeal (with some support from dicta in the House of Lords) that the plaintiffs have the burden of proving, in a case such as this, that there was an accidental loss by perils of the seas, although the degree of proof required is only to show a balance of probabilities in favour of an accidental loss by perils of the seas…
Michalos (N) and Sons Maritime SA v Prudential Assurance Co Ltd, ‘Zinovia’  2 Lloyd’s Rep 264
The vessel Zinovia ran aground in shallows in the Gulf of Suez and sustained such damage that she was a constructive total loss. The owners claimed on their policy of insurance for a loss caused by perils of the seas, but the insurers alleged that the vessel had been scuttled with the connivance of the owners.
The court ruled that the owners had succeeded in showing that the loss of Zinovia was proximately caused by a peril of the sea. The insurers (and cargo-owner) had not satisfied the court (on the high standard of proof required), that the vessel had been deliberately cast away.
Bingham J: [p 271] …To succeed in their claim for a loss by perils of the sea, the owners must prove that the loss of the vessel was proximately caused by such a peril. There is no doubt that the stranding of the vessel, followed by its bumping on the bottom, may be a peril of the sea, even though the stranding was the product of negligent navigation…It is otherwise if the stranding was the result of navigation deliberately calculated to achieve that result, both because the cause of the loss would not, in that event, be fortuitous as any peril of the sea must necessarily be, and also by virtue of s 55(2)(a) of the Marine Insurance Act 1906. But the owners here have this to help them, that the stranding which caused the loss (if fortuitous) was a peril of the sea, and thus the case may be contrasted with cases where a vessel is lost as a result of an ingress of water, when it is necessary to identify the cause of the ingress in order to decide whether that cause was a peril of the sea…Nonetheless, if, at the end of the case, the court considers loss by perils of the sea to be no more probable than a loss caused by another, uninsured peril, then the owners must fail.
In the Gloria case, below, Branson J clarified the position of both parties with regard to the onus of proof when a loss by a peril of the sea is pursued.
Compania Naviera Vascongada v British and Foreign Marine Insurance Co Ltd, ‘Gloria’ (1934) 54 LlL Rep 35
The plaintiffs insured Gloria with the defendants under a time policy of insurance. On a voyage from Larne to Port Talbot, Gloria sprang a leak and sank. The plaintiffs claimed that the loss was due to perils of the seas in that Gloria had sustained damage whilst leaving Larne and that this, together with the heavy weather experienced during the voyage, had caused the loss. The underwriters rejected the claim citing, inter alia, unseaworthiness as the cause of loss.
The court found for the plaintiffs, as they had discharged their onus of showing that the loss was fortuitous, but the defendants, when alleging that Gloria had put to sea in an unseaworthy state, had failed to show that there had been privity on the part of the assured.
Branson J: [p 50] …The law is, in my opinion, clear. The onus of proof that the loss was fortuitous lies upon the plaintiffs, but that does not mean that they will fail if their evidence does not exclude all reasonable possibility that the ship was scuttled. Before that possibility is considered, some evidence in support of it must be forthcoming. Scuttling is a crime, and the court will not find that it has been committed unless it is proved with the same degree of certainty as is required for the proof of a crime. If, however, the evidence is such that the court, giving full weight to the consideration that scuttling is a crime, is not satisfied that the ship was scuttled, but finds that the probability that she was is equal to the probability that her loss was fortuitous, the plaintiffs will fail. With regard to unseaworthiness, on the other hand, the onus is upon the defendants to show that the vessel was unseaworthy when she left Larne—which was her last port—and that the plaintiffs were privy to the fact that she was unseaworthy then.
In the following case, Popi M, the House of Lords confirmed that, when a claim is made for a loss by perils of the seas, the burden of proof remains with the plaintiff throughout. That is, even after establishing a prima facie case that the loss was by a peril of the sea, the onus of continuing to prove his case, whether or not there is evidence to the contrary put forward by the defence, remains with the plaintiff.
Rhesa Shipping Co SA v Edmunds, ‘Popi M’  2 Lloyd’s Rep 1, HL
Popi M was on a voyage from Rouen to the Yemen, and was insured under a time policy of insurance with the defendants and a number of other insurers. When she was steaming through the Mediterranean, off the coast of Algeria and in good weather, the shell plating in the vicinity of the engine room sprang apart, and a large volume of water entered the vessel. The crew abandoned ship and, later that day, Popi M sank. The owners claimed on their policy of insurance for a loss by perils of the seas, alternatively, negligence of the crew, but the underwriters refused payment, on the basis that the loss was due to wear and tear.
The House of Lords, in overturning the decisions of both the lower courts, ruled that the reason for the loss of Popi M remained in doubt and, therefore, the plaintiffs had failed to discharge the burden of proof which was upon them. The lower courts had not been justified in inferring that the loss had been due to perils of the seas.
Brandon LJ: [p 2] …In approaching this question, it is important that two matters should be borne constantly in mind. The first matter is that the burden of proving, on the balance of probabilities, that the ship was lost by perils of the sea is, and remains throughout, on the shipowners. Although it is open to underwriters to suggest and seek to prove some other cause of loss, against which the ship was not insured, there is no obligation on them to do so. Moreover, if they choose to do so, there is no obligation on them to prove, even on a balance of probabilities, the truth of their alternative case.
The second matter is that it is always open to a court, even after the kind of prolonged inquiry with a mass of expert evidence which took place in this case, to conclude, at the end of the day, that the proximate cause of the ship’s loss, even on a balance of probabilities, remains in doubt, with the consequence that the shipowners have failed to discharge the burden of proof which lay upon them.
Lamb Head Shipping Co Ltd and Others v Jennings, ‘Marel’  1 Lloyd’s Rep 403
Marel was lost off the coast of Algeria as a result of the sudden incursion of seawater into the engine room.
At the court of first instance, Judge Diamond QC, citing a number of previous cases, including Popi M, as authority, said:
Judge Diamond QC: [p 405] …First, the burden of proving, on a balance of probabilities, that a ship was lost by perils of the sea is, and remains throughout, on the owners. Whether or not underwriters seek to prove an alternative cause of the loss, if ‘an examination of all the evidence leaves the court doubtful what is the real cause of the loss, the assured has failed to prove his case’: La Compania Naviera Martiartu v The Corporation of the Royal Exchange Assurance, ‘Arnus’ (1922) 13 LlL Rep 298, p 304, col 2;  1 KB 650, p 657, per Scrutton LJ; Rhesa Shipping Co SA v Herbert David Edmunds, ‘Popi M’  1 Lloyd’s Rep 1, p 3, col 1;  1 WLR 948, p 951, per Lord Brandon of Oakbrook, giving the leading speech in the House of Lords, with which all the other of their Lordships agreed.
Secondly, it is not sufficient for the owners, in order to discharge the burden of proof which rests on them, merely to prove the incursion of seawater into an insured vessel. This is because an entry of seawater is not in itself a peril of the sea; Samuel and Co v Dumas (1924) 18 LlL Rep 211;  AC 431; Popi M  1 Lloyd’s Rep 1. That incursion has to be shown to be accidental or fortuitous. If the owners are to discharge successfully the burden of proof which rests on them, it will be necessary for them ‘to condescend to particularity in the matter’: Popi M  1 Lloyd’s Rep 1, p 5, col 1; p 954 A–B.
The third alternative
In the Popi M case, the facts of which are cited above, the plaintiff had, at the end of the hearing, failed to persuade the court that, on the balance of probabilities, the loss had been caused by an insured peril. Obviously, whilst doubt remained about the reason for the loss, the court could not find in favour of the plaintiff. Indeed, as the court could not find directly for either party on the facts as presented, it had no choice but to employ a rule, known as the third alternative, to dismiss the plaintiffs claim.
The House of Lords, in overturning the decisions of both the lower courts, ruled that the reason for the loss of Popi M remained in doubt and, therefore, the plaintiffs had failed to discharge the burden of proof which was upon them. The lower courts had not been justified in inferring that the loss had been due to perils of the seas. Brandon LJ considered at length the whole issue of burden of proof and the ‘third alternative’. In so doing, he invoked Sherlock Holmes and Homer to make his point to good effect.
Brandon LJ: [House of Lords, p 6] …My Lords, the late Sir Arthur Conan Doyle in his book, The Sign of Four, describes his hero, Mr Sherlock Holmes, as saying to the latter’s friend, Dr Watson: ‘How often have I said to you that, when you have eliminated the impossible, whatever remains, however improbable, must be the truth?’ It is, no doubt, on the basis of this well known, but unjudicial, dictum that Bingham J decided to accept the shipowners’ theory, even though he regarded it, for seven cogent reasons, as extremely improbable.
In my view, there are three reasons why it is inappropriate to apply the dictum of Mr Sherlock Holmes, to which I have just referred, to the process of fact finding which a judge of first instance has to perform at the conclusion of a case of the kind here concerned.
The first reason is one which I have already sought to emphasise as being of great importance, namely, that the judge is not bound always to make a finding one way or the other with regard to the facts averred by the parties. He has open to him the third alternative, of saying that the party on whom the burden of proof lies in relation to any averment made by him has failed to discharge that burden. No judge likes to decide cases on burden of proof if he can legitimately avoid having to do so. There are cases, however, in which, owing to the unsatisfactory state of the evidence or otherwise, deciding on the burden of proof is the only just course for him to take.
[p 7] …Having regard to the way in which Bingham J expressed the view that he was compelled to choose between the shipowners’ submarine theory on the one hand and the underwriters’ wear and tear theory on the other, and having regard further to the fact that, when he neared the point of decision in his judgment, he did not discuss or consider the third possibility which was open to him, of simply finding the shipowners’ case not proved, I am driven, reluctantly but inescapably, to the conclusion that, on this occasion, even Homer nodded.
…In my opinion, the only inference which could justifiably be drawn from the primary facts found by Bingham J was that the true reason of the ship’s loss was in doubt, and it follows that I consider that neither Bingham J nor the Court of Appeal were justified in drawing the inference that there had been a loss by perils of the sea, whether in the form of collision with a submerged submarine or any other form.
Presumption of loss by an unascertainable peril of the seas
When a claimant is unable to present direct evidence showing the precise nature or event of the cause of a loss, such as in the case of a missing ship or when the loss is inexplicable, he may seek the assistance of the court with the request that a presumption of a loss by an unascertainable peril of the seas be drawn in his favour. This plea, if granted, will allow the claimant to present his evidence by way of inference to signify the cause or reason for that loss. But, before a presumption of loss by an unascertainable peril of the sea is allowed, the court has to be satisfied that certain conditions are fulfilled, namely, that the ship was seaworthy when she set sail, and that an uninsured peril did not cause the loss. The purpose of this is to eliminate from the inquiry causes of loss, including unseaworthiness, that are not covered by the policy. It will facilitate the court to make the deduction that, as causes of loss which are not insured have been discounted, the loss must have been caused by an unascertainable peril of the seas.
Compania Martiartu v Royal Exchange Assurance Corporation, ‘Arnus’  1 KB 650, CA; aff’d  AC 850, HL
The plaintiffs were the owners of the steamship Arnus, which was insured with the defendants under a time policy of insurance. On a voyage from northern Spain to Rotterdam with a cargo of iron ore, and in calm weather, Arnus sank, due, it was contended, to her striking a floating mass of wreckage. The underwriters rejected the claim, alleging that Arnus had been deliberately sunk with the connivance of the owners.
The Court of Appeal overruled the decision of the trial judge and held that Arnus had been deliberately scuttled with the connivance of the responsible managers of the company. The House of Lords later affirmed that decision. At the Court of Appeal, Bankes LJ considered the issue of presumption of loss by an unascertained peril.
Bankes LJ: [p 655] …If the assured makes out a prima facie case, as the respondents in the present case did, then unless the underwriters displace that prime facie case, the assured is no doubt entitled to rely upon the presumption. On the other hand, if the prima facie case, which was the foundation on which the presumption was rested, fails because the underwriters put forward a reasonable explanation of the loss, the superstructure falls with it.
Skandia Insurance Co Ltd v Skoljarev  142 CLR 375, High Court of Australia
This was a case of a loss of a fishing vessel which sank in calm seas after there was a sudden inrush of seawater into the engine room. The inference sought was that, whatever the cause of the sudden ingress of water, it should be taken as a ‘fortuitous accident or casualty of the seas’.
The High Court of Australia ruled that the loss was due to a peril of the seas.
Mason J: [p 390] …The effect of these decisions [in previous cases] is that it is for the insured to prove a loss by perils of the sea. He will discharge this burden of proof if he gives evidence of a sinking as a result of a fortuitous event. If, in addition to this, there is also evidence of unseaworthiness, the question of what caused the loss must be decided as a question of fact. In speaking of the cause of loss, I refer to the proximate cause of loss (see s 61). It is for this reason that the loss of an unseaworthy ship may be attributed to the perils of the sea.
Although there is nothing in all this to throw the burden of proof of seaworthiness onto the insured, there is one class of case in which the insured will find it necessary to establish seaworthiness in order to prove his case. This is where the insured, having no direct evidence of loss due to a fortuitous event, seeks to establish by inference a case of loss due to an unascertained peril of the sea. To justify this inference, he will seek to exclude the possibility of loss caused by unseaworthiness by calling evidence as to the condition of the ship. In such a case, once evidence is given of seaworthiness, the issue of causation must be decided as a question of fact. Then, the tribunal of fact, unless it is satisfied that the ship was seaworthy, cannot draw the inference upon which the insured depends in order to make out his case.
[p 393] …This presumption, or inference as I should prefer to call it, arises from the fact that the immediate cause of the loss is the foundering of the ship and, if that is not due to unseaworthiness at the inception of the voyage, it is difficult to perceive how the foundering could have been caused otherwise than by a fortuitous and unascertained accident of the seas, or perhaps a latent defect. The extensive concept of ‘perils of the sea’ is an important element in the existence of the presumption.
Elimination of unseaworthiness as a cause of loss
Generally, when unseaworthiness is raised as a defence against a loss by perils of the seas, it falls upon the insurer to prove that the loss was so caused. However, this general rule may be displaced in certain circumstances. When, for example, a vessel is lost in good weather conditions or shortly after sailing, and the plaintiff is unable to show that that loss was caused by a peril insured against, the presumption is raised that the vessel must have sailed in an unseaworthy condition. This effectively shifts the burden of proof to the plaintiff, who must then rebut this presumption of unseaworthiness by adducing evidence to the contrary.
The circumstances under which the presumption of unseaworthiness may be levied against the plaintiff (which he must rebut) were considered in depth in the cases cited below. These cases also illustrate the courses of action available to the plaintiff: he could rest his case on the premise that the circumstances of the case do not justify the drawing of the presumption of unseaworthiness, or rebut the presumption by adducing evidence to prove that his ship was seaworthy when she set sail.
Pickup v Thames and Mersey Marine Insurance Co Ltd (1878) 3 QBD 594, CA
This was an action, on a voyage policy of insurance, for the recovery of freight on a cargo of rice shipped aboard Diadem on a voyage from Rangoon to the UK. Eleven days after leaving Rangoon, Diadem encountered heavy weather and, such was the concern for her safety after taking in water, the master decided to put back into Rangoon. During the passage back up the Rangoon River, Diadem grounded, but was soon refloated. On arrival back in Rangoon, Diadem was pronounced unseaworthy. The question before the Court of Appeal was whether the bad weather had caused her leaky condition or whether, at the outset, she had sailed in an unseaworthy condition.
The Court of Appeal decided that there had been a misdirection at the trial and that there should be a new trial. At the trial itself, the jury had been misdirected when they were told that the time which elapsed between sailing from Rangoon and when it had to put back into Rangoon was short enough to create a presumption of unseaworthiness, which then shifted the burden of proving seaworthiness upon the plaintiffs. This was erroneous, in that it gave the jury the impression that the defendant insurers were relieved from proving unseaworthiness, when the weather conditions might also be responsible for the loss. The presumption of unseaworthiness, it would appear, may only be drawn when two conditions are satisfied, namely, that the weather cannot possibly account for the loss and the said period of time is short.
Brett LJ: [p 599] …A good deal has been said on the argument about ‘the burden of proof’ and ‘presumption’. The burden of proof upon a plea of unseaworthiness to an action on a policy of marine insurance lies upon the defendant, and so far as the pleadings go, it never shifts, it always remains upon him. But when facts are given in evidence, it is often said certain presumptions, which are really inferences of fact, arise, and cause the burden of proof to shift; and so they do as a matter of reasoning, and, as a matter of fact, for instance, where a ship sails from a port, and soon after she has sailed, sinks to the bottom of the sea, and there is nothing in the weather to account for such a disaster, it is a reasonable presumption to be made that she was unseaworthy when she started…But the question ‘What is a short time after sailing?’ surely depends on the circumstances; and it is for the jury to say whether under the circumstances of the voyage they think that the time of loss was so soon after sailing that it raises the presumption of unseaworthiness.
Thesiger LJ: [p 603] …That being so, what is the direction he [the trial judge] gives them? He tells them, perfectly correctly, that upon the issue of seaworthiness, the burden of proof rested upon the underwriters originally. But then he proceeds to tell them that, only 11 days having elapsed since the vessel left Rangoon, and between that time and the time of her return to Rangoon, the burden of proof which originally lay upon the underwriters had shifted, and the burden was thrown upon the plaintiff of showing that the loss of the vessel was due to the causes which had arisen subsequently to her sailing. The meaning of that was obviously this, that the jury must, from the short time that elapsed after her voyage commenced, presume prima facie that, instead of the vessel being seaworthy, as they would have presumed without any evidence, they must presume that she was unseaworthy at the commencement, unless such evidence was given on the part of the plaintiff as to satisfy them that the loss was not due to unseaworthiness, but due to perils insured against. Therefore, it appears to me that, although the words ‘as a matter of law’ may have been used, what the learned judge really intended to say was, that the burden in point of fact had been shifted. But even in this point of view, it seems to me that the learned judge misdirected the jury, and that there was nothing to show or to justify him in saying that the burden of proof, as a matter of fact, had shifted, because at the very same time that it was proved that a short time had elapsed since the vessel had started, it was also proved that there was weather which might possibly account for the loss which took place. Therefore, upon the question of seaworthiness, it seems to me that there was a clear misdirection.
In the following case, Anderson v Morice, at the trial at the Court of Common Pleas, Brett J suggested that when a ship sinks in smooth water without any apparent cause, and in the absence of any evidence to the contrary, an irresistible presumption of unseaworthiness would be raised.
Anderson v Morice (1874) LR 10 CP 58; (1876) 1 App Cas 713, HL
The plaintiff, a merchant in London, entered into a contract to purchase a cargo of Rangoon rice, and the seller’s agents chartered the vessel Sunbeam to carry the cargo. Accordingly, the plaintiff insured the cargo with the defendants under a voyage policy ‘at and from’ Rangoon to any port in the UK or the Continent. Sunbeam duly arrived in the Rangoon River and, after anchoring, commenced loading the cargo of rice from lighters moored alongside. When 8,878 bags of the rice had been loaded, 400 bags still remaining in the lighters, Sunbeam suffered a sudden inrush of water aft, with the result that she sank, and all the cargo on board was lost. The plaintiff claimed for a loss caused by a peril of the sea, but the insurers refused payment, citing both unseaworthiness and lack of insurable interest.
The House of Lords, on the question of unseaworthiness, affirmed the findings of the lower courts, that the loss was due to a peril of the sea.3 There was considerable evidence to show that Sunbeam had been well maintained and well run and was, therefore, seaworthy. At the Court of Common Pleas, Brett J was of a mind that the manner of the loss raised a presumption of unseaworthiness.
Brett J: [p 67] …Dealing, first, with the questions raised as to seaworthiness and loss by a peril insured against, we think that, where the only evidence of fact as to either of those questions is, that the ship sank in smooth water very soon after the attaching of the policy, the significance of such a fact cannot be displaced by mere opinion founded on mere conjecture. We think that the true significance of such evidence is to be termed a presumption, and a shifting of the burden of proof; and that, where such a fact is the only fact in evidence, there being no other evidence as to the condition of the ship, or as to a cause of loss, it is evidence on which a jury ought to find, and should therefore be directed to find, if they believe the evidence, that the ship was unseaworthy at the inception of the risk. But, where there is other evidence of the condition of the ship, or of a cause of the loss, then the fact of the ship sinking in smooth water becomes one of several facts which must all be left to the jury. If from other facts—such as a large amount of repairs recently done, careful surveys recently made, excellent conduct of the ship up to a time immediately preceding the loss, or otherwise—a jury conclude that the ship was seaworthy at the inception of the risk, then the jury may further find that the loss was occasioned by a peril insured against, though they are unable to ascertain or safely conjecture what it was which caused the ship to sink. The immediate visible cause of the loss in such a case is the foundering of the ship. If that was not the result of unseaworthiness existing at the inception of the risk, it is difficult to see, upon the assumption, which is that there is no other evidence as to the loss than the fact of the foundering of the ship, how that could have been caused by anything but some extraordinary, though invisible and unascertained, accident of the seas.
In the Ajum Goolam case, cited below, the plaintiffs again succeeded in rebutting the presumption of unseaworthiness, and the defendant underwriters failed to show that the ship had sailed in an unseaworthy condition.
Ajum Goolam Hossen and Co v Union Marine Insurance Co  AC 362, PC
This was an appeal in the form of a consolidated action, brought by cargo-owners to recover for a loss sustained, against their insurers. The shipowners were also made a party to the action, as interveners, on the basis that they were liable for breach of contract, on their bills of lading, should unseaworthiness be proved. The insured cargo consisted of a consignment of 7,059 bags of sugar loaded aboard the steamship Taif in Port Louis, Mauritius, bound for Bombay. Taif loaded a full cargo of nearly 21,000 bags of sugar, as she had done on previous voyages, but, prior to sailing, the pilot raised concerns about her excessive draught aft and the fact that she was listing to port. The master ordered the aft ballast tank to be pumped out to reduce the trim by the stern. Soon after sailing, having dispensed with the pilot’s services, the aft ballast tank was refilled to steady the ship in a confused sea. During the night, because the list to port had increased, the ship’s course was altered, and the aft ballast tank was again pumped out. Some two hours later, the list increased dramatically and Taif eventually rolled over and was lost.
The Privy Council allowed the appeal and decided that the evidence produced by the plaintiffs had rebutted the presumption of unseaworthiness and, thus, the underwriters had failed in their defence to prove unseaworthiness at the time of the sailing. The loss appeared to have been attributable to the mismanagement of the vessel after she had sailed, rather than to unseaworthiness before she sailed.
Lord Lindley: [p 366] …The underwriters have the great advantage of the undoubted fact that the vessel capsized and sank in less than 24 hours after leaving port without having encountered any storm of any other known cause sufficient to account for the catastrophe; and there is no doubt that if nothing more were known, they would be entitled to succeed in the action. If nothing more were known, unseaworthiness at the time of sailing would be the natural inference to draw; there would be a presumption of unseaworthiness which a jury ought to be directed to act upon, and which a court ought to act upon if unassisted by a jury. But if, as in this case, other facts material to this inquiry as to the seaworthiness of the ship are proved, those facts must also be considered; and they must be weighed against the unaccountable loss of the ship so soon after sailing, and unless the balance of the evidence warrants the conclusion that the ship was unseaworthy when she sailed, such unseaworthiness cannot be properly treated as established, and the defence founded upon it must fail. The law on this point was finally settled in Pickup v Thames and Mersey Marine Insurance Co, which followed Anderson v Morice. In these cases, the court pointed out the danger and error of acting on the presumption in favour of unseaworthiness in case of an early loss of which the assured cannot prove the cause; and the court pointed out the necessity of bearing in mind that the defence of unseaworthiness must be overruled unless supported by sufficient weight of evidence in its favour, after duly considering all the evidence bearing on the subject, including, of course, the very weighty evidence with which the underwriters start their case.
[p 371] …The case is no doubt one of difficulty, and no one can be surprised that the underwriters defended the action on the ground of unseaworthiness. But, as the evidence came out, they were forced from one theory to another, and they have failed to prove their case…It is supposed that the cargo must have shifted; but this is a mere supposition, and there is no evidence of any bad stowage or other cause to account for any shifting of the cargo. All is conjecture. The real cause of the loss is unknown, and cannot be ascertained from the evidence adduced in this action. But underwriters take the risk of loss from unascertainable causes; and, after carefully weighing all the evidence and bearing in mind the presumption of unseaworthiness on which the undertakers rely, their Lordships have come to the conclusion that unseaworthiness at the time of sailing is not proved.
Skandia Insurance Co Ltd v Skoljarev  142 CLR 375
In this case, before the High Court of Australia, the facts of which are stated earlier in the chapter,4 the assured (the respondents) were able to furnish substantial evidence to show that the vessel was seaworthy. As unseaworthiness was discounted as a possible cause of loss, the court was able to draw the inference that an unascertainable peril of the seas must have been responsible for the loss.
Barwick CJ: [p 378] …As, in this case, the actual cause of the entry of the sea water was not found, there was no room for the view that, if the vessel were unseaworthy, the loss was none the less not due to her unseaworthiness. Thus, as part of the proof of the cause of the loss, the respondents [owners] needed to establish that the vessel was seaworthy when she put to sea. The respondents gave very strong evidence of seaworthiness…The appellant’s [insurer’s] sole attack on this evidence was as to the condition of the piping of and associated with the bait tank. The primary judge found positively that that piping was not defective: and that, in any case, its suggested defect could not have caused the entry of water which caused the loss. He did not merely reject the appellant’s case of unseaworthiness; but, in rejecting it and having the positive evidence of seaworthiness, he was in a position to infer that the entry of the water into the hull, in the quantities in which it did enter, was itself a peril of the sea.
Mason J: [p 390] …there is one class of case in which the insured will find it necessary to establish seaworthiness in order to prove his case. This is where the insured, having no direct evidence of loss due to a fortuitous event, seeks to establish by inference a case of loss due to an unascertained peril of the sea. To justify this inference, he will seek to exclude the possibility of loss caused by unseaworthiness by calling evidence as to the condition of the ship. In such a case, once evidence is given of unseaworthiness, the issue of causation must be decided as a question of fact. Then the tribunal of fact, unless it is satisfied that the ship was seaworthy, cannot draw the inference upon which the insured depends in order to make out his case.
Elimination of all other causes not insured by the policy
When a claim is made under the head of an unascertainable peril of the sea, the court would wish to rule out all the other possible uninsured causes of loss, including unseaworthiness, before allowing the presumption or inference that the loss was due to an unascertainable peril of the sea to be drawn.
In the Marel