J. A. Johnston Company Limited (Plaintiff)
v.
The Ship Tindefjell and Sealion Navigation Co.
S.A. and Concordia Line A/S (Defendants)
Trial Division, Collier J.—Montreal, May 30;
Vancouver, July 3, 1973.
Maritime law—Damage to cargo in cartons—Cartons in
containers—Limitation of liability—`Package or unit"—
Hague Rules, Art. IV, Rule S.
Plaintiff shipped 316 cartons of shoes packed in two
metal containers from Barcelona to Montreal aboard the
M.S. Tindefjell in 1969. The bill of lading described the
shipment as two containers containing 143 cartons and 174
cartons respectively and the value was not declared. The
containers and their contents were discharged in a damaged
condition. The owners and charterers of the ship contended
that their liability was limited by Art. IV, Rule 5 of the
Hague Rules to $500 per "package or unit" because the
nature and value of the goods were not inserted in the bill of
lading.
Held, defendants' liability was not limited as contended.
In accepting the description of the cargo declaring the
number of cartons defendants agreed to the limitation of
liability on the basis that each carton was a package. A
carton was not a "unit" within the meaning of the rule.
The Mormaclynx [1971] Lloyd's Rep. 476, applied;
Royal Typewriter Co. v. MIV Kulmerland [1972]
A.M.C. 1995; Falconbridge Nickel Mines Ltd. v. Chimo
Shipping Ltd. S.C.R. (as yet unreported) distinguished.
ACTION.
COUNSEL:
D. F. McEwen for plaintiff.
Sean J. Harrington and P. W. Davidson for
defendants.
SOLICITORS:
Ray, Wolfe, Connell, Lightbody and Rey-
nolds, Vancouver, for plaintiff.
McMaster, Meighen, Minnion, Patch, Cor-
deau. Hyndman and Legge, Montreal, for
defendants.
Brisset, Bishop and Davidson, Montreal,
for defendants.
COLLIER J.—The plaintiff was the owner of a
shipment of shoes which was carried on board
the Tindefjell from Bilbao, Spain to Montreal in
January, 1970. On discharge of cargo in the
latter port, some of the shipment was found to
be damaged. The plaintiff has sued the owners
and charterers of the vessel. Liability for the
damage is not denied. It is also not in dispute
the defendants are entitled to limit the amount
of damages for which they are liable. The ques
tion before me is, in essence, how that limitation
should be calculated.
The parties have agreed upon a special case
(Rule 475). I set it out in full:
THE PARTIES HERETO CONCUR IN STATING THE FOLLOWING
FACTS AND QUESTIONS IN THE FORM OF A SPECIAL CASE FOR
AN ADJUDICATION IN LIEU OF TRIAL.
1. The Plaintiff was at all material times the Owner of
certain goods, namely 316 cartons of shoes, purchased from
various Spanish suppliers in 1969;
2. Plaintiff retained Fernando Roque Transportes Interna-
cionales S.A. a body politic and corporate of Barcelona,
Spain to arrange for a shipment of the said 316 cartons of
shoes from Barcelona to Montreal, Quebec;
3. The said Fernando Roque Transportes Internacionales
S.A. packed, or "stuffed", 173 cartons of shoes into Con
tainer ICSU 267990 and the remaining 148 cartons into
Container ICSU 264471;
4. The two said Containers were of standard metal construc
tion approximately 8' high, 8' wide, and 20' in depth, (605 x
245 x 245 centimetres) and when empty, weighed approxi
mately 1,518 kilos;
5. Although containers of this type are now in widespread
use, they were not in commercial use when the Carriage of
Goods by Sea Act R.S.C. 1970 C-15 was first passed, giving
effect to the Hague Rules;
6. The two Containers were leased by Fernando Roque
Transportes Internacionales S.A. from Integrated Container
Service, Inc., a body politic and corporate of New York
City, New York, United States of America;
7. By a Charterparty dated at Oslo, Norway, April 15, 1967,
the Defendant, Sealion Navigation Co. S.A. chartered the
M.S. Tindefjell to A/S Dovrefjell and A/S Rudolf, trading
under the firm name and style of Concordia Line A/S, a
body politic and corporate of Haugesund, Norway;
8. The M.S. Tindefjell is an open/closed shelter deck con
ventional dry cargo vessel with raised fo'c'sle, built in
Fredrikstad, Norway in 1953 and registered in Piraeus,
Greece under No. 3008. On the voyage in question, the
vessel was sailing as a closed shelter decker and her ton
nages in that condition were 6504 gross tons and 4041 net
tons. The vessel has 5 tween decks and 5 lower holds served
by 5 hatches. Nos. 1 and 2 tween deck hatches are divided
into "upper" and "lower" compartments. The vessel is
powered by a 6 cylinder two stroke single acting oil fired
engine delivering 4500 b.h.p. and her maximum sea speed
under good weather conditions is 14 knots. She is 435' in
overall length, with an extreme breadth of 58' 2" and a
maximum draft 23' 9".
9. The motorship Tindefjell was employed as a carrier of
general cargo in a liner service between Mediterranean ports
and Atlantic ports of Portugal, Spain and Morocco and ports
of Eastern Canada and Great Lakes Ports of the United
States and Canada;
10. On or about December 12, 1969, Fernando Roque
Transportes Internacionales S.A., for and on behalf of Plain
tiff, delivered the two containers and their contents to
Romeu & Cia., S.L. steamship agents of Barcelona, Spain,
who were acting for and on behalf of the Defendants.
The dock receipts provide, in English translation that;
Marks PACKAGES
and Number
Numbers and Sort CONTENTS KILOS
No 267990 1 container containing 173
ICSU cartons of shoes 4.034
container tare 1.600
5.694 [sic]
No 264471 1 container containing 148
ICSU cartons of shoes 3.684
container tare 1.600
5.284
were received with the following handwritten notation
added by Romeu & Cia., S.L. on both receipts "1 = 605 x
245 x 245, contents weight and condition of the goods
unknown, containers without seals", the whole as can be
seen more fully from the said Dock Receipts produced
herewith to form part hereof and marked as Exhibit "A";
11. The Containers were loaded on board the Tindefjell in
apparent good order and condition on or about December
21, 1969 and stowed in the No. 2 Lower Tween Deck, at the
forward part of the Hatch square. In the same No. 2 Lower
Tween Deck were stowed automobiles, tractors, cases of
machinery, and general cargo in cases and drums.
12. On December 21, 1969, the Defendants issued to the
shipper, Fernando Roque Transportes Internacionales S.A.
Bill of Lading 58 for the following goods (partially in
English translation);
PARTICULARS FURNISHED BY SHIPPER OF GOODS
Marks No and Cubic Said to
and Kind Said to Measure- Weigh
Number of Pkgs. Contain ment (Pounds)
CONTAINER 143 1 container which is
264471 cartons said to contain shoes 4,451'
267990 173 1 container which is
cartons said to contain shoes 5,619'
316 10,070'
cartons
Freight payable at
destination
Weight of empty
container-1.518'
Kilos
the whole as may be seen more fully from the said Bill of
Lading produced herewith to form part hereof as Exhibit
"B";
13. The value of the cargo was not declared and was not
inserted in the Bill of Lading;
14. Freight was calculated per metric ton (1,000 kilos) the
customary freight unit, and was calculated as follows:
Rate Per
10,070 Kilos 237.50 ton $2,391.62
less 20% contract rebate — 478.32
1,913.30
heavy lift charges
4,460 kgs 6.00 ton 26.76
5,620 kgs 7.00 ton 39.34
winter surcharge 10% 191.33
Bill of Lading 1.00
Total $2,171.73
the whole as may be seen more fully from the said Bill of
Lading produced as Exhibit "B";
15. The Ship Tindefjell sailed from Bilbao, Spain, on or
about the 1st day of January, 1970 bound for Quebec City
and Montreal;
16. The Tindefjell arrived at the Port of Montreal, on Janu-
ary 14, 1970, the Master extended a Note of Protest and a
Port Warden and other surveys were held, a copy of the
Port Warden's survey is produced as Exhibit "C";
17. The Defendants admit that the two containers and their
contents were discharged from the ship Tindefjell in a
damaged condition and that they are liable for the resulting
loss which is in excess of $10,000 Canadian and which
Plaintiff has agreed to limit to $10,000 Canadian, for
principal;
18. The delivery receipts issued at the Port of Montreal
indicate that the extent of the damage was to be determined
upon subsequent survey, as authorized by Montreal Ship
ping Company Limited (the Defendants' agent), the whole as
appears more fully from National Harbours Board Delivery
Receipts Nos. 174563, 187069, 174561, 174231, 174235,
174234, produced herewith to form part hereof and marked
as Exhibit "D";
19. The rights and obligations of the parties are governed by
the terms and conditions of the said Bill of Lading 58 which,
inter alia, provides in Clause 1 thereof that if it does not
cover a shipment to or from a port in the United States it
shall be construed and the rights of the parties determined
according to the law of England unless it is subject to any
compulsorily applicable enactment giving effect to the
Hague Rules contained in the International Convention for
the Unification of Certain Rules relating to Bills of Lading
dated Brussels, August 25, 1924;
20. The parties hereby agree that for the purposes of the
present action, the Bill of Lading shall be construed and the
rights and obligations of the parties thereunder shall be
determined according to the law of Canada, particularly the
Carriage of Goods by Water Act R.S.C. 1970, C-15;
21. Rule 5, Article IV of the Schedule to the Carriage of
Goods by Water Act provides:
5. Neither the carrier nor the ship shall in any event be or
become liable for any loss or damage to or in connection
with goods in an amount exceeding five hundred dollars
per package or unit, or the equivalent of that sum in other
currency unless the nature and value of such goods have
been declared by the shipper before shipment and inserted
in the bill of lading.
This declaration if embodied in the bill of lading shall be
prima facie evidence, but shall not be binding or conclu
sive on the carrier.
By agreement between the carrier, master or agent of
the carrier and the shipper another maximum amount than
that mentioned in this paragraph may be fixed, provided
that such maximum shall not be less than the figure above
named.
Neither the carrier nor the ship shall be responsible in
any event for loss or damage to or in connection with
goods if the nature or value thereof has been knowingly
misstated by the shipper in the bill of lading.
22. The value of none of the 316 cartons of shoes exceeded
$500.00;
23. The question referred to the court is: "Is there a per
package or unit limitation available to the Defendants which
would reduce their liability to Plaintiff to a sum less than
$10,000.00? In the affirmative, to what sum is their liability
limited?
24. The Defendants have paid and the Plaintiff has received
the sum of $1,000.00 Canadian on the 2nd of April, 1973,
which sum shall be treated as a payment into Court.
At the hearing counsel agreed on two supple
mentary points:
(1) The liability of the defendant owners and
the defendant charterers, for the purposes of
this action only, was joint and several and the
formal judgment in this case would be worded
accordingly.
(2) The special case referred to the shoes as
packed in cartons before the cartons were
placed in the two containers. It is agreed the
individual pairs of shoes were themselves in
boxes. The defendants, as I understood it,
attached no great significance to this fact.
The defendants' position is twofold:
(1) A container is a "package" or "unit"
within the meaning of those words as found in
Rule 5 of Article IV of the Schedule to the
Carriage of Goods by Water Act, R.S.C.
1970, c. C-15. Liability here is therefore lim
ited to $500.00 per container, or a total of
$1,000.00.
(2) Alternatively, if the contract of carriage
had the effect of increasing the defendants'
liability beyond $500.00 per container, then
their liability is limited to an amount based on
the customary freight unit. The weight of the
two containers packed with the shoe cartons
was 10,070 kilos or 10.07 metric tons. Using
the $500.00 per "unit" calculation in Rule 5,
it is contended the limitation in dollars should
therefore be fixed between $5,000.00 and
$5,500.00.
The plaintiff contends the number of "pack-
ages" for the purposes of the calculation is the
316 cartons of shoes. Applying Rule 5, the total
available limitation is not 2 x $500 but 316 x
$500. As the parties have agreed the plaintiff's
loss was $10,000.00, then it is said, the defend
ants are liable for that amount. If the plaintiff's
contention is correct, the limitation provision
has, on the facts of this particular case, no
practical monetary effect.
I turn to the defendants' first submission.
Containerization, in shipping circles, is relative
ly new. When the word "package" was used by
the drafters of the Hague Rules, containers as
such, and their use in the carriage of goods, was
not envisaged. The comments of Friendly C.J.
in Leather's Best Inc. v. The "Mormaclynx"
apply: 1
The difficulty presented in this case, as in that one, is that
[flew, if any, in 1936 could have foreseen the change in
the optimum size of shipping units that has arisen as the
result of technological advances in the transportation
industry [Ibid].
The problem demands a solution better than the Courts can
afford, preferably on an international scale, and diplomatic
discussions have been initiated to that end. See Schmeltzer
& Peavey, Prospects and Problems of the Container Revolu
tion, 1 J Maritime L & Commerce 203, 223-225 (1970).
Meanwhile the Courts must wrestle with a statutory provi
sion that has become ill-suited to present conditions.
The defendants say a container per se, under
the Canadian statute, is a package; it is
immaterial how many packages the container
contains; the plaintiff here rented the two con
tainers from a third person, filled the containers
with its goods, and delivered for carriage two
containers or packages. In my view the proposi
tions advocated are too general. To a large
extent the facts of each particular case must
govern, and equally important, the intention of
the parties in respect of the contract of carriage
must be ascertained. I think it proper in a case
such as this to determine if the cargo owner and
the carrier intended the container should consti
tute a package for purposes of limitation, or
whether the number of packages in the contain
er was to be the criterion.
There appear to be no Canadian or English
decisions dealing with this problem of contain
ers. I have, however, been referred to decisions
from other jurisdictions which have been of
assistance to me. I do not propose to refer to all
the cases. The leading decision is The Morma-
clynx (to which I have already made reference),
a judgment of the United States Court of
Appeals (Second Circuit). The plaintiff shipped
some leather from Germany to the United
States. The leather was loaded into 99 cartons
or "bales". A container was obtained from the
owners of the carrying vessel. The cartons were
loaded into the container by someone on behalf
of the plaintiff, but in the presence of a repre
sentative of the defendant vessel owners. The
container was sealed, then loaded on board the
vessel. The bill of lading, issued on behalf of the
defendants, under the heading "Number and
kind of packages; description of goods" record
ed the words: "1 container s.t.c. 99 bales of
leather" (s.t.c. means "said to contain"). In addi
tion there was stamped on the bill the following:
"Shipper hereby agrees that carrier's liability is
limited to $500 with respect to the entire con
tents of each container ..." After the vessel
arrived in the United States, the container was
unloaded into a large terminal. The container
subsequently disappeared and the plaintiff
brought action against the vessel owners and the
terminal operator. The relevant section of the
United States legislation (COGSA) was as
follows:
Neither the carrier nor the ship shall in any event be or
become liable for any loss or damage to or in connection
with the transportation of goods in an amount exceeding
$500 per package lawful money of the United States, or in
case of goods not shipped in packages, per customary
freight unit, or the equivalent of that sum in other currency,
unless the nature and value of such goods have been
declared by the shipper before shipment and inserted in the
bill of lading... .
The relevant statutes further provided that any
clause purporting to lessen the liability set out
above was null and void.
The Court held the container was not a
"package", that the limitation of liability should
be calculated on the basis of 99 "packages" and
that the clause purporting to limit liability to
$500 per container was invalid. The gist of the
decision on this point is at pp. 485-486:
Defendants place great reliance on the decision of a divided
Court in Standard Electrica, from which we have quoted,
holding that where a shipper had made up nine pallets, each
containing six cardboard cartons of television timers, the
pallet rather than the cartons constituted the "package".
However, several factors distinguish Standard Electrica
from this case. The pallets were nothing like the size of the
container here; they had been made up by the shipper; and
the
... dock receipt, the bill of lading, and libellant's claim
letter all indicated that the parties regarded each pallet as
a package." [375 F. 2d at 946].
Indeed, there seems to have been nothing in the shipping
documents in that case that gave the carrier any notice of
the number of cartons.
We recognize that this distinction is not altogether satisfac
tory; it leaves open, for example, what the result would be if
Freudenberg had packed the bales in a container already on
its premises and the bill of lading had given no information
with respect to the name of bales. There is a good deal in
Judge Hays' point in his dissent in the Encyclopaedia Bri-
tannica case, see fn. 16, "that considering the container as
the package promotes uniformity and predictability," at
least where it contains goods of a single shipper. It is true
also that the standard arguments about the economic power
of the carrier and the weak bargaining position of the
consignor may be simply a recitation of an ancient shib
boleth, at least as applied to shipments of containers fully
packed by the shipper. The shipper insures for any value in
excess of the limitation (or perhaps for the whole value)
and, for all we know, a ruling that each bale constituted a
"package" may simply be conferring a windfall on the cargo
insurer, admittedly the true plaintiff here, if it based its
premium on the assumption that Mooremac's liability was
limited to $500. Still we cannot escape the belief that the
purpose of sect. 4(5) of COGSA was to set a reasonable
figure below which the carrier should not be permitted to
limit his liability and that "package" is thus more sensibly
related to the unit in which the shipper packed the goods
and described them than to a large metal object, functionally
a part of the ship, in which the carrier caused them to be
"contained". We therefore hold that, under the circum
stances of this case, the legend in the lower-left hand corner
of the bill of lading was an invalid limitation of liability
under COGSA.
The result in The Mormaclynx was in accord
with two European decisions 2 both of which
were referred to by Judd J., the trial judge in
The Mormaclynx, whose conclusion was
affirmed by the Circuit Court of Appeals. The
rationale of these decisions, it seems to me, is
found in the intention of the parties. Where the
shipper knows his goods are to be shipped by
container and specifies in the contract (usually
by means of the bill of lading) the type of goods
and the number of cartons carried in the con
tainer, and where the carrier accepts that
description and that count, then in my opinion,
the parties intended that the number of pack
ages for purposes of limitation of liability
should be the number of cartons specified. I
hasten to add that the intention must be ascer
tained from consideration of all the facts and
not merely the words used in the bill of lading:
the type of container, who supplied it, who
sealed it if it was sealed on delivery to the
carrier, the opportunity for count by the carrier,
previous course of dealings—all these matters,
and many others which I have not enumerated,
may be relevant in arriving at what the parties,
by the particular contract, intended.
In the present case, the plaintiff had no
reason to declare a higher value in the bill of
lading than the $500 per package valuation set
out in the Hague Rules. Each carton of shoes
did not exceed $500 in value. It seems logical to
me the plaintiff intended to have the benefit of
the minimum monetary responsibility laid down
in the Rules by putting the carrier on notice as
to the number of packages being carried, though
for convenience and other reasons, they were
grouped together in one large receptacle. The
carrier could have refused to issue the bill with
such a description, could have insisted on a
count', and in any event, adjusted its charges to
meet the situation.
Here, the defendants accepted the description
and number of cartons given. In my opinion,
they agreed to the limitation on the basis each
carton must be considered a "package".
As I see it, other American decisions dealing
with containers, where it was held the container
was a package, are distinguishable. In Royal
Typewriter Co. v. MIV Kulmerland [1972]
A.M.C. 1995 the bill of lading provided "1
container said to contain machinery." There
was no indication to the carrier of the number
of cartons or of the intention of the shipper to
contract on that basis. In Rosenbruch v. Ameri-
can Isbrandtsen Lines Inc. (1973) 357 F. Supp.
982 the bill of lading contained a similar vague
description, with no enumeration.
I therefore hold, on the facts of this special
case, the containers were not "packages" for
the purpose of calculating the monetary
limitation.
The defendants further submit that if the con
tainers were not "packages" they were "units"
and the limitation is still $1000. Reliance is
placed on a recent decision of the Supreme
Court of Canada: Falconbridge Nickel Mines
Ltd. et al. v. Chimo Shipping Limited (as yet
unreported—reasons handed down May 7,
1973). There a tractor and generator were car
ried on board a vessel from Montreal to Decep
tion Bay, P.Q. The machinery was off-loaded on
to a barge belonging to the shipowner. The
machinery was lost from the barge. It was held
the loss was caused by the negligence of the
servants and agents of the shipowners. The
question of limitation of liability, inter alia,
arose. Ritchie J. stated the problem as follows:
The bill of lading dated at Montreal on September 10,
1966 specifies the P.M. Crosbie as the carrying ship and was
made subject "to the provisions of the Rules as applied by
the Water Carriage of Goods Act, 1936 (Canada)" (now the
Carriage of Goods by Water Act, R.S.C. 1970, C-15) and
finding that these Rules applied to the contract of carriage
here in question, the learned trial judge applied the provi
sions of Article IV Rule 5, limiting the liability of the carrier
or the ship, on the basis that the tractor and generating set
should be treated as two shipping units for each of which
the liability of the respondent should not exceed $500.00.
The award of damages to the appellants was accordingly
limited to $1,000.00 It is from this latter finding that the
appellants now appeal assering (sic) that the Water Carriage
of Goods Act and the Rules which form a schedule thereto
(hereinafter called the "Rules") did not apply to the cargo
after it had been off-loaded from the P.M. Crosbie onto the
barge C-242-A, and in any event that the Rules had no
application to deck cargo, and finally that even if Article IV
Rule 5 applied, the respondents' liability should not be
limited by treating the tractor and generating set as two
shipping units but should rather be calculated in accordance
with the number of freight units of which each item of cargo
was composed.
In that case it was argued by the appellant
(the cargo owners) that the limitation should be
calculated on the basis of the freight rate unit
charged for the carriage of the machinery, and
reliance was placed on the wording of the clause
in the U.S. statute (earlier reproduced). It was
submitted the words in COGSA: "or in the case
of goods not shipped in packages, per custom
ary freight unit", clarified the meaning of "unit"
as used in the Hague Rules and the Canadian
statute; that "unit" refers to unit of freight. The
Supreme Court of Canada did not accept that
contention. It was held there was a clear differ
ence in wording between the Canadian and Eng-
lish rules and the American rule. The Court
decided that in Canada "unit" meant a unit of
goods or an "item of cargo" and not a unit of
freight. In the result the unpackaged tractor and
generator were held to be two "units" and liabil
ity was limited to $1000.
In my view the Falconbridge case does not
meet the point here. The difficulty in that case
was that the large pieces of machinery were not
"packaged" in the usual sense. Here the ship
ment of shoes was placed in cartons or pack
ages in the usual and well-accepted sense. If the
cartons had not then been collected and placed
in one large receptacle, I have no doubt all
parties would have agreed the carrier had
accepted statutory liability for 316 packages.
Where cargo cannot be "packaged" as in the
Falconbridge case, then "unit" seems to me to
be an appropriate term to characterize one com
plete, integrated piece of equipment or ma
chinery. As has so often been said, if the cargo
owner wishes to avoid the limitation he need
only describe the nature of the goods and their
value. He probably will pay higher rates.
In my view, the containers here, having in
mind the description given of the goods in the
bill of lading, were not "a unit of goods" or an
"item of cargo" as the Supreme Court charac
terized the machinery in the Falconbridge deci
sion. They were merely a modern method of
carrying the packages.
I turn now to the alternative submission
advanced on behalf of the defendants. Their
argument, as I understand it, is based on the
premise that clause 17 of the bill of lading may
be applicable. I set out the clause:
17. In case of any loss or damage to or in connection with
goods exceeding in actual value U.S. $500 if clause 1 (b)
hereof is applicable or £100 sterling if clause 1 (c) hereof is
applicable, per package, or in case of goods not shipped in
packages, per customary freight unit, the value of the goods
shall be deemed to be $500 or £100 as the case may be per
package or per unit, on which basis the freight is adjusted
and the Carrier's liability, if any, shall be determined on the
basis of a value of $500 or £100 as the case may be per
package or per customary freight unit, or pro rata in case of
partial loss or damage, unless the nature of the goods and a
valuation higher than $500 or £ 100 as the case may be shall
have been declared in writing by the shipper upon delivery
to the Carrier and inserted in this bill of lading and extra
freight paid if required and in such case if the actual value
of the goods per package or per customary freight unit shall
exceed such declared value, the value shall nevertheless be
deemed to be the declared value and the Carrier's liability, if
any shall not exceed the declared value and any partial loss
or damage shall be adjusted pro rata on the basis of such
declared value.
Whenever the value of the goods is less than $500 or
£100 as the case may be per package or other freight unit,
their value in the calculation and adjustment of claims for
which the Carrier may be liable shall for the purpose of
avoiding uncertainties and difficulties in fixing value be
deemed to be the invoice value, plus freight and insurance to
the extent that they are paid and irrecoverable, irrespective
of whether any other value is greater or less.
Each article or piece of merchandise, other than goods
shipped in bulk, which is not crated boxed or otherwise
protected, shall be considered a separate package under this
bill of lading and under Section 4(5) of the United States
Carriage of Goods by Sea Act or the corresponding provi
sion of any other Carriage of Goods by Sea Act that may be
applicable.
Clause 1(b) referred to deals • with shipments
to or from a port in the United States and is
therefore of no application here. Clause 1(c)
provides that if 1(b) is not applicable, then the
bill of lading shall be construed according to,
and the rights of the parties determined by, the
law of England, and the dispute decided by
English Courts. The clause further provides that
the British Carriage of Goods by Sea Act
applies. As I understand it, Canadian law is to
be applied for the purposes of this case.
It seems to me clause 17 of the bill of lading
was drafted with the words of the American
statute (COGSA) in mind, where the limitation
may be calculated: "per customary freight
unit". As I understand the decision of the
Supreme Court in the Falconbridge case the
concept "per customary freight unit" has no
place in the Canadian statute, and that method
of calculating the limitation is not permissible
under Canadian law. To my mind, the defend
ants, in this submission, are endeavouring to
import the American alternative. For the rea
sons I have given it cannot be done.
In any event, "per customary freight unit", as
used in clause 17 (as I interpret it) can only
come into play if the goods are not shipped in
packages. Here the goods were shipped in
"packages" and for the reasons I have given the
"packages" were not the two containers but the
316 cartons.
There will therefore be judgment for the
plaintiff for $10,000 with interest from January
14, 1970 to May 30, 1973. The plaintiff is
entitled to its costs.
' [1971] 2 Lloyd's Rep. 476 at 485. See also a similar
comment in Lucchese v. Malabe Shipping Co. Inc. (1972)
351 F. Supp. 588 at 595.
2 Sté Navale Caennaise v. Gastin (1965) D.M.F. 18; The
Cunard S.S. Co. Ltd. v. Dept. of Customs (1960) D.M.F. 46.
(This latter case may be distinguishable). See also Perregaux
v. Lignes Franco -Marocaines (1958) D.M.F. 52. Later
American decisions on similar facts have come to a result
different from the Perregaux case—a trailer unit containing
cartons has been held to be a package in the absence of
some notification to the carrier of the number of cartons,
particularly where a flat rate per trailer was charged: United
Purveyors Inc. v. MIV New Yorker [1966] A.M.C. 321;
Lucchese v. Malabe Shipping Co. Inc. (1972) 351 F. Supp.
588; contra: Inter-American Foods, Inc. v. Coordinated
Caribbean Transport, Inc. [1970] A.M.C. 1303.
3 To say that the time and cost to the carrier of counting
cartons in every case is an argument in favour of holding
one container = one package, is to my mind, not acceptable.
The carrier has the ultimate solution: increase of rates.
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.