In 1965, coils of galvanised wire were shipped onboard three of the defendant's ships under bills of lading for transportation from Kobe, Japan, to Cape Town, South Africa. The bills of lading were endorsed to the plaintiff. Some coils were delivered in a damaged condition: 937 out of 5,000 coils from the Leise Maersk; 4,165 out of 5,000 coils from the Annette Maersk; and 322 out of 6,000 coils from the Torben Maersk. The plaintiff sued. The defendant admitted that it had undertaken to transport the cargoes in accordance with the bills of lading, and that the goods were shipped on board in an undamaged condition. The defendant eventually admitted that some goods were discharged in a damaged condition, and that the damage therefore occurred before discharge.

On the evidence, both the zinc and steel of the galvanised wire was corroded and stained by the tannic acid, colouring matter and ammonia in wet or damp dunnage. Cargo on the Torben Maersk suffered additional damage in the form of white crystals caused by sal ammoniac.

The defendant contested liability but not quantum. Save for 103 coils onboard the Torben Maersk, the defendant denied having acted in breach of its obligations as a carrier. The defendant's offer to tender a sum in respect of its admission of liability for the 103 coils was rejected by the plaintiff. The defendant contended that to the extent that the cargo was damaged after shipment and before discharge

such damage was due to an inherent defect, quality or vice in the said goods, namely improper or inadequate galvanising (which was not discernible upon a reasonable examination) rendering the wire coils incapable of withstanding the ordinary consequences of carriage by sea.

The parties accepted that the Hague Rules applied to the dispute. As for the plaintiff's contention that each of the bills of lading 'was subject to the provisions of any legislation relating to the carriage of goods by sea, which by the law of any country is compulsorily applicable to the contract of carriage therein contained', parties accepted that Japanese law was compulsorily applicable to the contract of carriage contained in each of the bills of lading. Japan had adopted the Hague Rules, which were compulsorily applicable. The plaintiff drew attention to art 3.2 which imposed an obligation upon the carrier, subject to the provision of art 4, to 'properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried'.

The defendant argued that, where a shipowner pleads that damage is caused to cargo by inherent vice or defect, the shipowner invariably proves its case with negative evidence. It seeks to establish that nothing untoward occurred on the voyage. This enables the Court to draw the inference that the damage was attributable to the goods themselves and not to any fault in the ship or its handling. There was no need for the shipowners to put a name to the vice or to identify the inherent defect, and, unless there was evidence to show that there was negligence in the handling of the ship or cargo, the plaintiff must fail. The defendant cited FC Bradley & Sons Ltd v Federal Steam Navigation Co Ltd (1927) 27 Ll L Rep 221 (HL) (Bradley).

Held: Judgment for the plaintiff.

The first issue is the question of onus. The defendant must establish the exception which it has pleaded, which is the art 4.2.m exception:

Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from – … (m) Wastage in bulk or weight or any other loss or damage arising from inherent defect, quality, or vice of the goods.

The onus was on the defendant to establish the defect complained of, namely that inadequate galvanising rendered the wire coils incapable of withstanding the ordinary consequences of carriage by sea. But the defendant adduced no evidence which shows that inadequate galvanising contributed to the damage nor has it been able to show that the ordinary consequences of carriage by sea caused the damage. The defendant must be held liable.

The words 'properly discharge' under art 3.2 mean 'deliver from the ship's tackle in the same apparent order and condition as on shipment unless the carrier can excuse himself under art. IV': Gosse Millerd Ltd v Canadian Government Merchant Marine Ltd [1927] 2 KB 432, 434 (Gosse Millerd). This decision was reversed on appeal by a majority, but was restored on further appeal: Gosse Millerd Ltd v Canadian Government Merchant Marine Ltd [1929] AC 223 (HL).

It follows that either admission or proof that the cargo was shipped in good order and condition, and has been delivered from the ship's tackle damaged, is prima facie evidence of a breach of contract by the carrier. The onus is then cast on the carrier to excuse that breach by showing that the damage falls within one of the immunities specified in art 4: Gosse Millerd. It was contended by counsel that the common law in South Africa is to the same effect: Juridini v The Deutsche Ost-Afrika Linie (1905) 19 EDC 74, 78. It is now universally accepted in shipping law that, once it is proved that goods were received undamaged, but discharged in a damaged condition, the onus is then on the carrier to prove that it comes within one of the exceptions under art 4. This is in accord with common sense.

Thus, the defendant must establish both that the galvanising on the wire was 'improper or inadequate' and that the damage arose because of 'the ordinary consequences of carriage by sea'. This was an onus which was calculated to present the defendant with practical difficulties. It is difficult for a witness to recollect the details of a particular cargo shipped over four years ago.

In Bradley, an action was brought for damage sustained by a cargo of 15,000 cases of apples shipped from Australia to the United Kingdom. The defendant's case was that the ship was seaworthy, that there had been no negligence in or about the carriage and that the damage was due to the inherent quality of the apples and to decay. The defendant succeeded, the Court holding that the damage was caused to the apples not because of the ship or of the sea, or of the route, but because they were apples which were not fit to make the voyage in an ordinary way. This was not the kind of risk which written law called on the shipowner to bear and it was well within the words 'resulting from inherent quality or vice'.

Bradley supports the defendant's argument to the extent that the shipowners would not fail merely because they could not put a name to the vice or inherent quality. Bradley indicates that the carrier is answerable for the ship and crew, while the cargo owner is answerable for its cargo and the risks belonging to the cargo, which the carrier knows little or nothing about: Bradley 399. But Bradley is not authority for the proposition that the shipowner must succeed if it shows that the voyage was without incident and that the master and crew were guilty of no negligence in their handling of the ship and cargo. The defendant must go further and establish what it pleaded - namely that the damage was due to inherent defect or vice in the goods. Moreover, if it particularises the vice or defect as was done in this case (but not in Bradley), it must prove that the damage was caused by that particular vice or defect.

In any event, even if the defendant's contention was sound, there was little or no evidence in respect of two of the ships and, in the case of the third ship, the Annette Maersk, the evidence of the mate was unimpressive. The crews of the Leise Maersk and the Torben Maersk were not called to give evidence. Accordingly, even on the defendant's argument, the defendant must be held liable for all the damages to the cargo on these two ships. As for the Annette Maersk, the defendant argued that the wire was defective in that the galvanising was 'improper or inadequate ... rendering the wire coils incapable of withstanding the ordinary consequences of carriage by sea'. This the defendant failed to prove.

Expert evidence indicated that the damage was caused by wet dunnage. The defendant's witness admitted that if he had known that the dunnage was wet, he would not have used it. On the evidence, the dunnage used on the Annette Maersk must have been wet. Subsequently, stains were found on the outside circumference of the wire coils. The black line of demarcation between stained and unstained wire corresponded with the edges of the dunnage wood.