Bruck Mills Limited, The T. Eaton Co. Limited
and Ferro Technique Ltd. (Plaintiffs)
v.
Black Sea Steamship Company (Defendant)
Trial Division, Gibson J.—Toronto, February 14
and 19; Ottawa, April 3, 1973.
Maritime law—Bills of lading—Exculpatory clause for
inadequate packaging—Invalidity of, under Art. 3, Rule 8 of
Hague Rules.
Plaintiffs' cargo aboard S.S. Grumant was damaged when
the ship encountered heavy seas on a north Atlantic crossing
in January, resulting in the rupture of plastic containers of
apple concentrate, which escaped on to plaintiffs' goods.
The ship's master was aware that the concentrate was
inadequately packaged and he ought not to have taken it
aboard for a north Atlantic crossing at that time of year.
Plaintiff's cargo was covered by clean bills of lading which
contained a clause exculpating the carrier for insufficient
packaging.
Held, plaintiffs were entitled to damages. The exculpatory
clause in the bills of lading was void under Art. 3, Rule 8 of
the Hague Rules.
ACTION for damages.
COUNSEL:
D. L. D. Beard, Q.C., for plaintiffs.
D. A. Kerr, Q.C., and G. D. N. Guert for
defendant.
SOLICITORS:
DuVernet and Carruthers, Toronto, for
plaintiffs.
Stewart, MacKeen and Covert, Halifax, for
defendant.
GIBSON J.—These three actions claiming
damage to cargo were tried together on the
same evidence except as to respective quantum
of damage.
On consent, at the commencement of trial,
the style of cause was ordered amended so that
the only defendant in each of the actions is
"Black Sea Steamship Company".
The subject cargo, general cargo, was carried
on the S.S. Grumant, a Russian ship which
sailed from Genoa, Italy on December 24, 1969
en route for Halifax, Nova Scotia and Quebec
and Montreal, Quebec. Included in the general
cargo aboard, other than cargo for the plaintiffs,
was approximately 661 metric tons of plastic
containers of apple concentrate enclosed in
wooden crates, loaded at Livorno, Italy. This
apple concentrate, a product of Bulgaria, was
originally loaded on board another ship at
Varna, Bulgaria, shipped to Livorno, Italy,
transferred there onto barges, and then loaded
on the S.S. Grumant.
The plaintiffs' cargo was put on board the
S.S. Grumant under clean bills of lading, but
arrived at Montreal in damaged condition,
caused in the main, by the rupturing of the
plastic containers of the apple concentrate when
the wooden crates in which they were contained
broke, and the consequent escape of concen
trate to the plaintiffs' cargo.
The respective cargo damages of the plain
tiffs, I find as follows: T. Eaton Co. Limited
$4,500.19, Ferro Technique Ltd. $1,500.00 and
Bruck Mills Limited $8,008.76.
During the voyage, this ship encountered
heavy seas and high winds, particularly between
Gibraltar and the Azores, causing her to roll and
pitch and to take seas on deck.
On December 30, 1969, this ship stopped at
Ponta Delgada in the Azores, where certain, of
the cargo, including some apple concentrate,
which had been damaged was discharged, and
certain of it re-secured. When she left Ponta
Delgada some of the crating holding the plastic
containers of apple concentrate was in damaged
condition.
The Master of this ship made a note of pro
test while at Ponta Delgada on January 1, 1970.
This ship arrived at Halifax on January 23,
1970, where a surveyor inspected the damage,
then at Quebec and finally at Montreal on Janu-
ary 29, 1970, where surveyors for all interested
parties inspected and reported on the damage.
The Hague Rules apply in respect to liability
for damage to the plaintiffs' cargo during the
voyage of this ship.
In defence, the defendant established that this
ship was seaworthy; and that the cause of the
damage to the plaintiffs' cargo was the escape
to it of the said apple concentrate, a sticky
substance, arising from the breaking of the
wooden crates containing the plastic containers
of the apple concentrate and the rupturing of
the containers, when this ship experienced
heavy weather from Gibraltar.
The only other matters that were put in issue
in evidence were whether or not (1) the defend
ant proved that the cause of the damage to the
cargo was from "perils of the sea" within Arti
cle 4, Rule 2(c)' ; (2) whether or not there was
proper and careful stowage within Article 3,
Rule 2 2 ; and (3) whether or not certain wording
in the respective bills of lading afforded a
defence, in any event, if it should be found that
improper packaging of the said apple concen
trate, the cargo of another (not a party to the
action) gave rise to the chain of events which
caused the damage in this case.
As to the exculpatory defence . of "perils of
the sea", the Master of the ship, Captain Yury
Golovin of Tallin, U.S.S.R., stated that this
voyage was his first North Atlantic crossing and
he alleged that he experienced winds of gale
force 10 and of greater duration than he expect
ed. In his note of protest made on January 1,
1970 at Ponta Delgada, he stated that the ship
met a gale force of only 9 from Gibraltar to the
Azores, the part of the voyage during which the
worst weather was experienced.
Captain Robert Muir, employed by the office
of the Port Warden of Montreal, stated that for
winter, the storms that this ship encountered
would be normal. Vivian F. Phillips, an
experienced surveyor called by the defendant,
stated that in respect to the wind and weather
on the North Atlantic at the time of year this
ship crossed, that heavy weather should be
expected and that winds up to force 12 should
be anticipated, but he opinioned that the dura
tion of the heavy weather was the problem in
this case.
There was no damage to the ship itself of any
substance caused by the wind and weather
during this North Atlantic crossing.
On this evidence, and on all the evidence in
respect to this issue, I am of the view that the
defendant failed to prove that this ship
experienced a peril of the sea in the crossing of
this ship in the North Atlantic at the said time of
year and in the area traversed.
As to stowage, the Master of the ship, Cap
tain Golovin, stated that he assumed, before he
saw the cargo, that the apple concentrate would
be in container barrels and not in plastic bags in
crates. When he saw these containers, he said
he was not in a position to consult with anyone.
He said that he could have visually checked the
crates if he had wanted to, but he did not. He
stated that he did not take aboard some crates
of apple concentrate because they were not
stable. At Genoa, he noticed that some of the
containers of apple concentrate on deck were
leaking.
In sum, he was well able to inspect visually
the quality of both the plastic containers and the
wooden containers of this apple concentrate for
the purpose of making the decision that was his
responsibility to make, namely, as to whether or
not this cargo should be taken aboard his ship.
(Cf. Brass v. Maitland 119 E.R. 940 at p. 946;
Heath Steel Mines Ltd. v. The "Erwin Schroder"
[1970] C.L.R. (Ex.) 426 at p. 486.)
Vivian F. Phillips, the surveyor, stated that
the apple concentrate originally consisted of
661 metric tons stowed in plastic containers,
each enclosed in a wooden crate and that this
cargo was originally carried in numbers 2, 3 and
4 tween-decks and on aft deck; that in many
cases the plastic containers were torn or punc
tured and that the apple concentrate had
escaped contacting other tween-deck cargo and
also cargo carried in the lower hold; that many
of the crates had come apart or were distorted;
that the result of the damage to the crates and
the loss of fluid from the containers was that a
slackness had developed in the stow and that
this had permitted general movement of cargo in
the tween-decks. He stated that the packaging
of the apple concentrate was deficient in that
the plastic containers were not well made and
the stoppers unsatisfactory and also the crates
were too flimsy, being not sufficiently rigid,
having no strength in a lateral direction. He said
that a great many of the plastic containers had
been punctured by nails or sharp ends of wood.
He also noticed that when the stevedores were
lifting apparently undamaged crates in Halifax,
on a number of occasions the bottom fell out of
the crates.
Jack A. Potter, a marine surveyor called by
the plaintiffs, opinioned that the apple concen
trate stowed in the tween-decks of holds 2, 3
and 4 constituted a hazard to the cargo stowed
below in the event of leakage; and that the
cargo of apple concentrate should have been
loaded in one compartment or hold only.
In my view, the Master should not have per
mitted the apple concentrate in these plastic
bags contained in wooden crates to have been
taken aboard this ship for this North Atlantic
crossing at the said time of year. The Master
had misgivings about permitting it to be stowed
aboard as may be inferred from the part of his
evidence referred to above, but took the risk
that this cargo would withstand the wind and
weather of the North Atlantic at that time of the
year. As to this latter, he had no personal
experience of the realities of same. But long
before this ship reached the Azores, he had
become acquainted with the realities of such
wind and weather. The Master, having chosen
to permit this apple concentrate cargo, packaged
in the fashion it was, to have been put aboard,
should have taken further and additional steps
than were taken by way of additional dunnage
and other methods to stow this cargo, and also
to confine it to particular areas of his ship, and
in a more satisfactory way generally, so that
there would have been no danger of such cargo
shifting, resulting in fracturing of the crates and
rupturing of the plastic bags containing the
apple concentrate, and escaping of it to other
cargo.
On the evidence, therefore, there was not
proper and careful stowage within Article 3,
Rule 2 of the Hague Rules.
The certain wording of a clause in the bills of
lading, which the defendant submitted was an
exculpatory clause, and on which the defendant
premised its defence that liability did not arise if
the cause or one of the causes of the damage to
the plaintiffs' cargo arose out of the insufficient
packaging of the apple concentrate, the cargo of
another 3 reads in relevant part as follows:
The Carrier will not be responsible ... for bags or bales
burst, torn or stained and consequences arising therefrom;
or for loss or damage arising from defects, slightness or
insufficiency of Packages; or for wrong delivery arising
from error, indistinctness, illegibility or deficiency of marks,
number or address, or for any damage or loss arising from
any of such causes.
Predicated on this, it was the submission of
the defendant that it was not bound by the clean
bills of lading issued to the plaintiffs in relation
to their respective cargo'', even though the
insufficiency of the packaging of the apple con
centrate of such other person (not a party to the
action) was visible to the Master from external
examination (as already found).
In this case, because the Hague Rules apply
to the plaintiffs' bills of lading, any exculpatory
clauses, in view of Article 3, Rule 85 must be
within such Rules. The exculpatory clause
above quoted in part in the plaintiffs' bills of
lading is not. As a consequence, this defence is
not available to the defendant.
In the result, therefore, each of the plaintiffs
is entitled to judgment against the defendant for
damages respectively as found, as set out
above, together with interest at 5% from Janu-
ary 29, 1970. The plaintiffs are also entitled to
costs, but one counsel fee only for all is
allowed.
The Hague Rules
2. Neither the carrier nor the ship shall be responsible
for loss or damage arising or resulting from,
(c) perils, danger, and accidents of the sea or other
navigable waters;
2 2. Subject to the provisions of Article IV, the carrier
shall properly and carefully load, handle, stow, carry, keep,
care for and discharge the goods carried.
3 The defendant cited Carver, 12th ed. 82, 184 and 288;
Tetley: Marine Cargo Claims, chapter XIX; Ministry of
Food v. Lamport & Holt Line Ltd. [1952] 2 Ll. L.R. 371;
Silver v. Ocean Steamship Co. [1930] 1 K.B. 416; Thrift v.
Youle (1877) 2 C.P.D. 432.
4 Cf. Hague Rules (Article IV, rule 2)
2. Neither the carrier nor the ship shall be responsible for
loss or damage arising or resulting from,
(n) insufficiency of packing;
S Hague Rules, (Article III, rule 8)
8. Any clause, covenant or agreement in a contract of
carriage relieving the carrier or the ship from liability for
loss or damage to or in connection with goods arising from
negligence, fault or failure in the duties and obligations
provided in this Article or lessening such liability otherwise
than as provided in these Rules, shall be null and void and of
no effect.
A benefit of insurance of similar clause shall be deemed
to be a clause relieving the carrier from liability.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.