Lord Salmon J: (delivering the judgment of the Board)

A consignment of 93 cases of pharmaceutical goods was shipped, under two bills of lading dated 28 March 1970, on board the vessel "Sansei Maru" for carriage from Hong Kong to Port Kelang (Port Swettenham) in Malaysia. The bills of lading nominated the plaintiffs (respondents in this appeal) as consignees. The "Sansei Maru" arrived at Port Swettenham on 5 April 1970. The learned trial Judge found as a fact

(1) that on that day, all the 93 cases were unloaded on to the wharf and passed into the custody of the Port Authority (the defendants) who transferred them into Shed No. 8, and

(2) that on 8 April the Chief Forwarding Clerk of the plaintiffs' forwarding agents and a Customs' Officer inspected and accounted all of the 93 cases in Shed No. 8, and

(3) that the inward cargo charges and Customs duty were paid in respect of each of the 93 cases on the following day.

By 15 April 1970 only 29 of 93 cases could be found. The balance of 64 cases weighing about 5.65 tons had disappeared. The defendants at first contended that the 64 cases had been short-landed and therefore had never been in their custody. Their Counsel, h