Moine Comte & Co Ltd (the plaintiff) claimed for damages from the owner of the ship Magdala (the defendant) for failing to properly and carefully keep carry and stow their goods as required by art 3.2 of the Hague Rules. On 29 September 1952, 500 wire coils were received on board the Magdala in Antwerp. The bill of lading acknowledged that the goods were 'in apparent good order and condition'. Upon delivery to the Singapore Harbour Board the wire was rusty due to being exposed to salt water.

The plaintiff based its claim on two grounds. The first was that, because the defendant issued a clean bill of lading, it was estopped from seeking to prove the wire was in some other condition. The second was that, although it was impossible to prove when and in what circumstances the wire came into contact with salt water, it must have happened some time between the date of delivery and date of discharge, therefore the defendant's negligence must be inferred under the doctrine of res ipsa loquitur.

The defendant maintained that it was impossible for the wire to have come into contact with salt water while it was in its possession. Although a clean bill of lading was issued, the wire had an inherent defect that could not have been ascertained by ordinary visual examination. The defendant therefore claimed immunity under art 4.2.m of the Hague Rules, suggesting that the most likely explanation for the damage was that the wire must have been splashed or immersed in salt water when the wire was being carried to the Magdala.

Held: Judgment for the defendant. The defendant admits that a statement of fact was made on the bill of lading and the plaintiff acted upon that representation to its detriment. The defendant is thus estopped from denying that the cargo was not in apparent good order and condition upon loading. However, the words 'apparent good order and condition' cannot cover an inherent defect or defect that is not apparent to careful examination. The representation in the bill of lading does not estop the defendant from seeking to prove that a defect was present in the wire when it was delivered to it.

The onus of proving that it was not negligent lies with the defendant. It is established law that when goods have been received in good order and condition and delivered not in good order and condition, that is evidence of breach of contract and it is for the defendant to show that the result occurred without its negligence. Considering the evidence and all the probabilities of the matter, the alternative explanation offered by the defendant is a far more likely solution to the problem of how the wire was damaged than the suggestion that it came into contact with salt water while in the Magdala’s hold. Its defence to the claim is a good one.