The respondent purchased and shipped hot rolled steel angles from Antwerp to Montreal on board the appellant's vessel, the Ermua. The steel angles were delivered to the vessel strapped in 19 lifts. This was reflected in the bill of lading along with the number of pieces of steel in each lift, the dimensions of these pieces and the gross weight of each lift.

When the cargo was discharged at Montreal, one of the 19 lifts was missing, along with a total of 12 pieces of steel from the remaining 18 lifts. The respondent sued the appellant and claimed compensation for these losses.

The appellant admitted liability in respect of the missing lift, but invoked art 4.5 of the Canadian Carriage of Goods by Water Act 1970 (which gave effect to the Hague Rules in Canada) to limit its liability to CAD 500 per package on the basis that the missing lift was one single package.

The appellant denied liability for the loss of 12 pieces of steel on the basis that the bill of lading was rubber-stamped 'contents unchecked but said to contain indicated number of pieces, and said to be of indicated dimensions and weights'. The appellant contended that this clausing indicated that the bill of lading did not prove that a certain number of pieces of steel were shipped on board the vessel, and that the respondent had therefore failed to establish that the 12 missing pieces had been shipped on board at Antwerp.

The trial Judge dismissed this argument and held that the bill of lading was prima facie evidence that each one of the lifts shipped on board the vessel contained the number of steel pieces mentioned in the description in the bill of lading. However, the trial Judge agreed with the appellant that the missing lift constitutes a package under the Hague Rules and limited the appellant's liability in that regard to CAD 500 plus interest and cost.

Both decisions of the trial Judge were appealed against.

Held: The respondent's cross-appeal is dismissed. The appellant's appeal is successful.

The respondent in its cross-appeal contended that a lift was not a package, because the lift was not wrapped like a package. The Court dismissed this argument and held that the 'package or unit' referred to in art 4.5 of the Hague Rules is the individual item of cargo accepted by the carrier: see Falconbridge Nickel Mines v Chimo Shipping 1973 CanLII 160 (SCC); (1973) 37 DLR (3d) 545; [1974] SCR 933 (CMI942). Whether or not such an item is wrapped or boxed is immaterial. It appears clearly from the bill of lading in this case that the items of cargo accepted by the carrier for transportation to Montreal were the 19 lifts rather than the pieces of steel that they were said to contain.

As for the appellant's appeal, the Court held that if a bill of lading states 'weight, quantity, quality unknown', it is not prima facie evidence of the weight, quantity or quality shipped. Article 3.4 of the Hague Rules provides that a bill of lading is prima facie evidence of the receipt of goods if unqualified statements or descriptions, as set out in art 3.3, are made in the bill of lading. If the bill of lading is claused 'weight, quantity, quality unknown', the requirements in art 3.3 are not satisfied and art 3.4 will not confer on the bill of lading the status of prima facie evidence of the receipt of goods. Articles 3.3 and 3.4 do not contain anything that would invalidate such a bill of lading or modify its normal legal effect. Article 3.4 does not regulate the probative value of statements other than those required by art 3.3; nor does it prohibit that these additional statements be qualified by this type of clause.