The Selat Madura (the defendant's vessel) carrying 7,292 packages of copra cakes (the plaintiff's cargo) departed from Surabaya for transhipment at Singapore, with eventual carriage to New York. The bill of lading, which was subject to the Hague Rules, stated that the plaintiff's cargo was shipped in apparent good order and condition. Two days after departure, the Selat Madura was found to be listing heavily to starboard. An investigation failed to reveal the cause and the vessel continued its voyage. The next morning, water mixed with copra cake was found pouring out of the starboard forward main deck at the no 3 hold. An investigation established that water had entered the no 3 hold and damaged 3,748 packages stored at the bottom of the hold. The water had entered the hold through holes in two scupper pipes, which were badly wasted by rust due to lack of maintenance.

The plaintiff claimed that the vessel was unseaworthy before and at the beginning of the voyage due to the damaged condition of the starboard scupper pipes which passed through the no 3 hold. It relied on arts 3.1.a, 3.1.b and 3.2 of the Hague Rules and sought damages for breach of contract and/or duty.

Held: Claim successful.

It was clear and undisputed that the vessel was unseaworthy before and at the beginning of the voyage. The condition of the starboard scupper pipes in the no 3 hold was such that no prudent owner would have sent the vessel to sea without requiring the defect to be made good had it been known. The key issue was whether a due diligence exercise would have uncovered the defect? The answer to this question was yes.

The defendant could not prove that it had exercised due diligence to make the vessel seaworthy before and at the beginning of the voyage. The engineer examined the condition of the starboard scupper pipes in the no 3 hold merely by standing on the floor of the hold, shining a torch upwards onto the scupper pipes and observing that they did not appear to be leaking or rusting. This was not an exercise of due diligence, but a perfunctory and cursory examination.

The defect was not a latent one. A reasonably careful skilled person could have discovered it on a careful and proper examination by reasonable means. This would have involved inspecting, checking and testing the scupper pipes (using a hammer test) at close range. Scupper pipes are susceptible to rust and corrosion and these pipes had no protective covering. A thorough examination would have revealed their damaged and weakened condition.