In September 1953, bags of rice were shipped on the respondent's ship Jalaveera at Rangoon, Burma [Yangon, Myanmar], by the State Agricultural Marketing Board of the Union of Burma. The cargo was to be carried to Colombo, Ceylon [Sri Lanka], and delivered to the Government of Ceylon, which the appellant represented. The cargo was shipped under three bills of lading, which were subject to the Carriage of Goods by Sea Act 1925 (India) and the Hague Rules scheduled to that Act. The bills described that there were shipped in apparent good order and condition certain numbers of packages: 100,652 bags of rice in total. On each bill particulars were given. The average net weight per bag as stated in the three bills was approximately 72.5 kg. Each of the bills further provided:

This bill of lading is issued subject to the following further conditions:-

NUMBER AND CONTENTS

1. Weight, contents and value when shipped unknown.

There was also the following stamped endorsement on each bill:

SHIP NOT RESPONSIBLE FOR:- … BURSTING OF BAGS AND LOSS OF CONTENTS. … SHIP NOT RESPONSIBLE FOR WEIGHT OF BAGS ON OUTTURN.

After the ship had loaded the rice at Rangoon it proceeded direct to Colombo. There was no other cargo onboard. At Colombo the cargo was discharged into lighters and then carried in the lighters to a landing jetty and thence into Customs warehouse. The evidence recorded that 100,417 bags had been placed into warehouse from the lighters. In the transhipment of rice it was usual that by the time the cargo arrived in Colombo many of the bags were torn. The bags were stacked in the ship and the pressure of the top ones upon the lower ones caused rice to leak out of the lower ones. Some rice spilled out into the holds of the ship. The torn bags were repaired before being offloaded. Other bags (empty ones) were sent onboard into which the sweepings were placed which resulted from the spillages. Those bags were specially marked to indicate that they were sweepings bags. There was no evidence of any original bags having been delivered empty.

After the bags were landed into the Customs warehouse they were later delivered into lorries for transport to the Government granaries. Further spillage took place before the bags left the Customs warehouse. This resulted partly from the fact that more bags became damaged and torn, and partly from the fact that the process of unloading the bags from the ship involved the use of hooks. These hooks caused holes to be made in the bags through which rice leaked out.

The appellant claimed that 100,652 bags of rice were shipped, and claimed damages for short delivery of 235 bags. The respondent argued that the entire quantity of cargo onboard the ship was discharged at Colombo. The appellant's claim succeeded in the District Court of Colombo, where it was held that the bills afforded prima facie evidence of the number of bags shipped onboard. But the judgment of that Court was set aside by the Supreme Court of Ceylon, which held that the appellant had not proven that the total quantity of rice handed over by the shipper at Rangoon had not been discharged by the carrier at Colombo. The appellant had to prove by other evidence that the shipper had handed to the ship 100,652 bags of rice each weighing 72.5 kg, because the conditions in the bills do not enable the appellant to rely on the weight, number, and quantity given in the bills to establishing its claim: New Chinese Antimony Co Ltd v Ocean Steamship Co Ltd [1917] 2 KB 664 (CA) (Antimony). Despite bearing the burden of proof, the appellant did not call any witness to prove this. The Supreme Court found that the circumstantial evidence (ie a direct voyage to Colombo with no other cargo) was in the respondent's favour. The appellant appealed.

The issue was whether the appellant satisfied its burden of proving that 100,652 bags were shipped, together with the contents and weight of the bags. Articles 3.3 and 3.4 of the Hague Rules are relevant. The appellant mainly relied on the bills for proof. The appellant did not trace the bills to their source. No mate's receipts and tally books were produced.

The respondent argued that the bills were not prima facie evidence of the number of bags shipped. The respondent cited Canadian & Dominion Sugar Co Ltd v Canadian National (West Indies) Steamships Ltd [1947] AC 46 (PC) and argued that there was no evidence that the shipper had made any demand of the nature referred to in art 3.3.

The respondent also argued that proof of the contents and weight of the bags was lacking. The respondent further argued that: (a) there was evidence which displaced the prima facie evidence of the shipment of 100,652 bags and which led to the conclusion that there never were 235 missing bags; and (b) if, alternatively, 100,652 bags were in fact shipped, all their contents were discharged at Colombo, so the respondent's liability is limited to the value of 235 empty bags.

Held: Appeal allowed.

Although the bills as to the numbers of bags shipped are not conclusive evidence as against the respondent, they form strong prima facie evidence that the stated numbers of bags were shipped (Henry Smith & Co v Bedouin Steam Navigation Co Ltd [1896] AC 70 (HL) (Henry Smith)), unless there is some provision in the bills which precludes this result. No such provision existed. The condition '[w]eight, contents and value when shipped unknown' meant that in signing a bill acknowledging the receipt of a number of bags there was a disclaimer of knowledge in regard to the weight or contents or value of such bags. But there was no disclaimer as to the numbers of bags. Thus, the conditions in the bills did not prevent the appellant from relying upon the admissions that numbers of bags stated in the bills were shipped.

Nevertheless, the respondent can rebut this prima facie evidence by showing that the goods or some of them were never actually put on board: R & W Paul Ltd v Pauline (1920) 4 Ll L Rep 221 (The Pauline). To do that would require very satisfactory evidence on its part: Henry Smith 76. Unless the respondent showed that a lesser number of bags than acknowledged in the bills was shipped, the respondent would be obliged to deliver the full number of bags: Harrowing v Katz & Co (1894) 10 TLR 400 (CA); Hain Steamship Co Ltd v Herdman & McDougal (1922) 11 Ll L Rep 58 (HL); Royal Commission on Wheat Supplies v Ocean Steam Ship Co (1922) 11 Ll L Rep 123 (KB).

This case differs from Antimony. In Antimony, it was held that due to its own conditional terms, the bill of lading was not even prima facie evidence of the quantity of cargo shipped, and that in an action against the shipowners for short delivery the onus was upon the plaintiff of proving that the relevant quantity had in fact been shipped. See also Craig Line Steamship Co Ltd v North British Storage and Transit Co 1921 SC 114. In Hogarth Shipping Co Ltd v Blyth, Greene, Jourdain & Co Ltd [1917] 2 KB 534 (KB & CA) (Hogarth) a captain signed a bill of lading for a specified number of bags of sugar. One of the conditions of that bill read 'weight, measure, quality, contents and value unknown'. It was held that the bill was conclusive only as to the number of bags in the sense of skins or receptacles and not as to their contents. Thus, the bills were not even prima facie evidence of the weight or contents or value of the bags shipped: Antimony. It was for the appellant to prove the contents and weight of the bags, and it was for the appellant to prove its loss by proving what it was that the bags contained and by proving what was the value of what the bags contained.

As to the respondent's argument referred to under (a) above, the circumstantial evidence does not displace the prima facie evidence of the shipment of 100,652 bags. It is useless to speculate what might have happened. It was for the respondent to explain away its acknowledgment of the number of bags that they had received. The evidence clearly established a short delivery of 235 bags because only 100,417 bags were discharged. The respondent did not argue that these 235 bags were discharged. It remains to be considered whether the appellant proved the loss alleged: linked with the points raised in that issue are those which are involved in the respondent's argument referred to under (b) above.

There was abundant evidence that the missing bags contained rice. Although the terms of the bills expressly preclude any dependence upon the particulars as to weight which were declared by the shipper, other evidence suggested an average weight of about 72.5 kg per bag, a reasonable and proper inference. The bills acknowledged that the bags were shipped 'in apparent good order and condition'. If some bags had been lost, and if one had to ascertain what was in the lost bags, as a matter of evidence one would almost necessarily infer that the lost bags were bags containing similar goods to those which were not lost: Hogarth 542. Even if the appellant is unable to prove the precise weights of the lost bags, that does not prevent the appellant from recovering damages: The Pauline 222. The average weight of the bags delivered can be used to calculate the approximate weight of the lost bags: ibid.

Thus, there was a short delivery of 235 bags of rice, weighing about 72.5 kg each. Subject to a consideration of the argument of the respondent referred to under (b) above, it would follow that the appellant was entitled to the amount awarded in the District Court.

The respondent argued that the missing 235 bags became completely denuded of their contents but that such contents were in fact delivered and received. If so, the respondent's liability would be the value of 235 empty bags. The respondent's argument was rejected. The respondent's argument depended for its validity upon the assumption that no rice escaped at all while in warehouse. This assumption is not valid on the evidence. Besides, the question of short delivery falls to be decided not by reference to the times when there were cartages away from the Customs warehouse but by reference to the times of delivery from the ship. If 235 bags had become completely denuded of their contents, it would be quite contrary to practice if none of the empty bags were delivered. Out of the 100,417 bags which were delivered ex ship some 541 of them had lost some of their contents: those bags had been torn and repaired. The contents of the 287 bags of sweepings were not, however, in the aggregate sufficient to account for the deficiencies of the 541 bags. The contents of 235 bags were not accounted for.