Whilst there is signs of some sort of liquid on the LCD flex cable, there does not appear to be any liquid on the actual connectors. As such this is no proof that the black screen is due to 'water damage'. Apple would need to prove that the part in question that has signs of liquid on it is actually damaged. I believe under consumer law that companies are not allowed to say 'oh water damage, you must pay xxx'. The company must for prove what they claim is the cause of the fault is actually the cause of the fault. The problem is that the macbook was purchased from a store in Australia therefore Australia consumer law applies here, not EU consumer law.