Nissan Automobile Co. (Canada) Ltd. (Plaintiff)
v.
The owners of the vessel Continental Shipper and
United Steamship Corporation and Federal Com
merce and Navigation Company Limited, and
Federal Pacific Lakes Line (Defendants)
Trial Division (T-342-72), Urie J.—Montreal,
December 4 and 19, 1973; Ottawa, January 3,
1974.
Maritime law—Shipment of uncrated automobiles—Minor
damage and scratches—Liability of carrier—Carriage of
Goods by Water Act, Article III, r. 2, Article IV, r. 2(mXn).
In the absence of exceptions in the bill of lading, as in the
case at bar, a carrier is liable for even minor damage
suffered by uncrated automobiles for the duration of the
period covered by the bill of lading. In this case the damages
arose, not because of the absence of crating nor because the
vehicles were improperly secured in the vessel's holds, but
because of careless handling and stowing them too closely
together.
The Southern Cross [1940] A.M.C. 59, distinguished;
Chrysler Motors Corporation v. Atlantic Shipping Co.
SA (unreported), agreed with.
ACTION.
COUNSEL:
V. Prager for plaintiff.
E. Baudry for defendants.
SOLICITORS:
Stikeman, Elliott & Co., Montreal, for
plaintiff.
Brisset, Reycraft & Co., Montreal, for
defendants.
URIE J.—This is an action brought by the
plaintiff arising out of damages sustained to a
consignment of Datsun automobiles carried on
the vessel Continental Shipper on a voyage from
Yokohama, Japan, to Montreal, Canada, in Feb-
ruary and March of 1970. The defendants at all
material times were the owners, operators,
charterers and managers of the ship. The plain
tiff alleges that of the 321 Datsun automobiles
shipped to it, 174 were delivered in a damaged
condition, the total cost of repairs to which
amounted to $6,345.20 including $400.00 for
survey fees.
The ship, Continental Shipper, is a bulk cargo
vessel which, for the voyage in question, was
modified to enable it to carry uncrated, new
Datsun cars. The cars in question were carried
in three holds in which there had been erected
six temporary decks. The decks were construct
ed of staging erected on each side of the ship
and along the centre of each hold consisting of a
series of uprights separated by parallel bars
between the uprights and across which were laid
wooden planks upon which the cars were
stowed.
No plaintiff's witnesses were permitted
aboard the ship prior to the discharge of the
cargo and, therefore, evidence concerning the
stowage came only from Captain George
Glover, an experienced marine surveyor from
Montreal employed by the defendants to exam
ine the cargo in the ship prior to its discharge
and subsequently in a more detailed fashion on
the pier. The defendants called no ship's offi
cers or crew members to testify concerning the
stowage or the nature of the voyage from
Yokohama to Montreal so that the sole evidence
relating to the nature of the stowage and the
condition of the cargo in the holds is that given
by Captain Glover. He testified that each car
was equipped by the manufacturer with two
small hooks on each side, both front and back.
The cars were placed upon the temporary car
decks referred to above at a distance of nine to
twelve inches apart, from side to side, and
bumper to bumper front and rear. They were
secured by wires running from each of the
hooks mentioned above to a steel cable running
across the ship at the level of each deck and
attached securely to the side of the ship. Each
of the four wires on each of the cars was looped
across these cables which were situated at the
front- and rear of each row of vehicles. Each of
the wires was tightened to the cable by what
was described as a -Spanish windlass, being
merely a piece of wood through the looped wire
and twisted to tighten it. The cars were parallel
to one another in a fore and aft direction.' One
or two cars on each deck were situated athwart-
ships and these cars were secured with wooden
blocks. None of the other cars had any chocks
beneath the wheels but Captain Glover testified
that they were in gear and the handbrakes were
on. I find, on his evidence, that the vehicles
were reasonably secured for the voyage.
He further testified that the distance between
each deck was greater than his height which was
5 feet 11 inches and he estimated, therefore,
that the depth of each was in excess of 6 feet.
However, an expert witness called by the plain
tiff in rebuttal by reference to the ship's plan
estimated that the space between decks could
not have been more than 5i feet. While I do not
believe that anything turns on this evidence I
accept Captain Glover's eyewitness testimony
as being accurate in this regard.
In order for the cars to be removed from the
decks one car, termed by Captain Glover as the
"key" car, was removed by lifting it out in a net
and the remainder by a patented lifting device
which consisted of a platform to which wires
were fixed at each corner with spreaders
designed to prevent the wires from touching the
car when it was on the platform and as it was
being lifted by the hoist out of the hold. The
cars were either driven or pushed on to this
lifting device. Since the cars were stowed so
closely together his testimony was that it was
inevitable that some scratching would occur
from clothing worn by the stevedores and mem
bers of the crew, and particularly from the
metal buttons worn on such clothing, but such
scratches were normally of a minor nature and
were accepted in circumstances such as this.
There was conflicting testimony as to whether
the vehicles were covered with a protective
covering of wax or not and in this connection I
accept the evidence of Captain Glover that they
were not.
Captain Glover testified that he examined the
cargo before any of the vehicles were removed
from the holds and spent approximately an hour
in so doing, at which time he saw no major
damage. I accept his evidence that the rows of
cars on each deck were straight and that the
spacing between each car was uniform, with no
cars touching one another in a manner that
would cause damage to them. There was no
indication of movement of any vehicle during
the voyage. However, he and an assistant exam
ined each car on the dock after their removal
from the hold and made a report of the damage
observed by this inspection. He stated that the
condition of the cars was no worse or no better
than cargoes from other ships he had been on
and that in his many years of experience he had
never seen cars come off a ship undamaged. He
found that some cars suffered some form of
damage extending in severity from light scrat
ches to deep scratches and small dents to large
dents. He described light scratches as superfi
cial scratches on the highly polished paint sur
face of a car that could be buffed out and deep
scratches as being those that were down to the
base paint or to the bare steel itself. He defined
small dents as those of the size of a 50-cent
piece and large dents as any over that size.
Light scratches and small dents, he testified,
were an inherent risk in shipping cars in this
fashion, particularly in the heavy weather that
might be expected to be encountered in a
voyage at the time of the year in which this was
taken because members of the crew would be
wearing heavy clothing the buttons on which
would cause this type of damage as they exam
ined the cargo from time to time.
Counsel for the parties agreed that the cars
had been loaded in apparent good order and
condition and any damages claimed in this
action had been sustained subsequent to the
loading.
The damage that is claimed here is damage
that was sustained during the voyage or during
the unloading and does not include any damage
due to inland transport.
The surveyor called by the plaintiff did not
himself conduct the survey at the pier having
used the reports of the employees to compile
the final survey report. No claim was made for
minor scratches that could be removed by
"buffing" or "compounding". Claims were
made for scratches where the surface had been
broken to a sufficient depth to require painting.
Very few of the dents could be repaired without
painting. If they could, no claim was made in his
report. The charges for repairs were those
agreed upon by the plaintiff with the repairing
garage and were of three types:
(a) The cost of parts was established by the
plaintiff as being their cost plus 10%.
(b) Labour was charged in one-half hour peri
ods at the rate of $6.50 per hour, which was
stated to be lower than the going rate because
of the large number of cars that were to be
repaired.
(c) The paint rate was at a flat rate scale
agreed to by the plaintiff and the repairing
garage.
It was admitted by both counsel that it is the
normal practice today to ship automobiles by
sea in an uncrated condition. It also appears
clear, and was admitted by counsel for the
defendants, that there is an inherent risk
involved in this type of shipment so that he did
not contest the plaintiff's claim for the repair of
deep scratches and large dents as defined by
Captain Glover and confirmed in general by the
plaintiff's witnesses. He did, however, dispute
the plaintiff's claim for scratches or dents of a
minor nature as defined by Captain Glover. In
so far as the minor dents and light scratches are
concerned he relied on Article IV, r. 2(m) and
(n) of the Carriage of Goods by Water Act,
R.S.C. 1970, c. C-15 as his defence to such
claims and which reads as follows:
Article IV
2. Neither the carrier nor the ship shall be responsible for
loss or damage arising or resulting from,
(m) wastage in bulk or weight or any other loss or damage
arising from inherent defect, quality or vice of the goods;
(n) insufficiency of packing;
Moreover, he states that the plaintiff did not
properly prove the quantum of its claim and that
it should be sent back to a court-appointed
official for assessment of damages.
The bills of lading issued by the defendants at
the time of loading were clean bills without any
exceptions being noted on the face thereof. As
above stated, the plaintiff's surveyor noted
damage on 174 automobiles and evidence was
adduced by the plaintiff through the proprietor
of the repairing garage that all the damage
referred to in the survey was repaired at his
garage, by his employees, for the prices set
forth in his invoices and that all accounts had
been paid. I find as a fact that the repairs were
made by Zambre Garage Limited for the prices
set forth in its invoices and that such charges
were reasonable for the work performed. The
average cost of repairs, per vehicle, was just
under $40.00.
However, I must now deal with the defend
ants' submission that not all of the repairs were
their liability. As above noted, the automobiles
were not crated for carriage but it was agreed
by all concerned that it was the normal practice
in 1970 for cars to be shipped uncrated and it
seems to be also agreed that some minor
damage is inevitable in these circumstances.
The question of who is liable for the cost of
repairing such damage is the issue in this action.
It was agreed that the provisions of the Car
riage of Goods by Water Act would be the
applicable law herein and consequently by the
terms of Article III, r. 2 of the Schedule to that
Act, the responsibility for the proper receipt,
handling, stowage, carriage, care and discharge
of the goods lies with the defendants. Article
III, r. 2 reads as follows:
Article III
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.
Since the plaintiff proved that a substantial
number of the cars were discharged at the pier
in Montreal in a damaged condition, after
having been delivered to the ship in Yokohama
for carriage to Montreal in apparent good order
and condition, the burden of the proof that the
damage resulted from a cause for which it was
not responsible by virtue of that Act and that it
exercised reasonable care during the period of
custody of the vehicles to prevent damage, rests
on the defendants.
There is no question that the defendants are
liable for damages to the automobiles resulting
from their negligence. However, according to
counsel, this is the first time that the question of
whether or not the defendants are liable for
minor damage that occurs despite reasonable
and careful handling in loading, stowage and
discharge of the vehicles has come before a
Canadian or English court for decision. The
defendants adduced evidence that uncrated
automobiles always suffer minor scratches and
dents without any negligence and that they
should not, therefore, be responsible for them
since such damage is an inherent risk in the
carriage of vehicles in this fashion.
I was referred to what is stated to be the
leading case on the subject, the Southern Cross
[1940] A.M.C. 59. However, in that case the bill
of lading contained a stamped exception reading
as follows:
Uncrated at owners risk of damage. Vessel not responsible
for detachable parts unless boxed and receipt taken for said
parts.
(The emphasis is mine.)
Moreover, the evidence showed that a clear
space of 18 inches was left between the cars
when stowed and the distance between the
decks was 8i feet. Chocks were placed under
the wheels. The stevedores and crew members
employed by the carrier were required to wear
gloves when handling the automobiles and were
instructed to keep their bodies away from the
cars so as to avoid damaging the highly polished
surface. Having so found, the Court then held at
page 66 of the report:
But slight scratches on the paint or finish of the automobile
or small dents or marks on the panels would not fall within
the type of damage that would create a presumption of
negligence on the part of the carrier. They should be classed
as "ordinary wear and tear ... of the goods in the course of
their transportation."
At pages 65 and 66 Leibell D.J. stated:
The sentence "Uncrated at owners risk of damage"
stamped on the bill of lading does not itself mean that the
owner assumes the risk of damage to the automobile from
whatever cause arising, but only such damage as might be
attributable to the fact that the automobile was not crated.
The words "at owners risk of damage" are to be strictly
construed. Colton vs N.Y. & Cuba Mail S. S. Co., 1928
A.M.C. 1391,27 F. (2d) 671. Nor do those words relieve the
carrier from any damage sustained by the automobile due to
the negligent handling or stowage of the automobile, even
though the negligence would not have caused the damage if
the automobile had been crated. Any other interpretation of
the exemption would be contrary to the provisions of the
Harter Act and the Carriage of Goods by Sea Act under
which the carrier is prohibited from inserting any provision
in the bill of lading that would relieve the carrier from
liability for damage due to its own negligence in the loading,
stowage, custody, care or proper delivery of the merchan
dise (46 Mason's U.S.C., sec 190 and sec. 1303(8)).
There does not appear however to be any reason why a
carrier may not properly seek to relieve itself from damage
that might be sustained by an uncrated automobile in the
reasonably careful handling of the automobile in placing it
aboard the ship, in stowing it in the hold or in unloading it
and placing it upon the dock. The painted surface of an
automobile is highly polished and might receive slight scrat
ches or a panel might receive a small dent in loading or
unloading it in slings or while it was being stowed between
decks, even where reasonable care is used. Crating the
automobile would prevent such surface marks and against
the risk of such damage that might be sustained without any
negligence on the carrier's part, the carrier may properly
include an exception in the bill of lading placing the risk of
such damage on the shipper. But damage that by its very
appearance and nature would indicate that it resulted from
something more than that would, I believe, be chargeable to
the negligence of the carrier. Where the bill of lading recites
that the goods are received in apparent good order and
condition and there is an outturn in a damaged condition, the
liability is on the carrier, unless he can show that the
damage was sustained through some proper exception in the
bill of lading.
(The emphases are mine.)
It seems that the basis of the decision in the
Southern Cross case was two-fold:
(a) that the carrier did all that was reasonably
necessary to prevent such minor damage by
the method of stowage it adopted, in particu
lar the amount of space provided around each
vehicle and in its instructions to the crew
members and stevedores, and;
(b) perhaps more importantly, included in the
bill of lading the first sentence of the com
plete exception quoted above.
This case differs, in my view, from the South
ern Cross case on both counts, firstly, in that no
evidence was adduced by the defendants to
show that the crew and stevedores involved
with the shipment received instructions in the
care and handling of the shipment. Moreover, it
is apparent, and the evidence of Captain Glover
confirms, that when vehicles are stowed so
closely together minor scratches and dents are
inevitable.
Secondly, there were no exceptions in the
bills of lading here. The Southern Cross case
makes it clear that the onus is on the defendants
to include such an exception if they seek to rely
on that case as the authority obviating their
liability for minor scratches and dents. In the
absence of such an exception the carrier is
liable, therefore, in my opinion, for even minor
damage suffered by the uncrated automobiles
for the duration of the period covered by the
bills of lading.
There are no direct authorities, I was
informed by counsel, for such a proposition
either in Canada or in England but the case of
Chrysler Motors Corporation v. Atlantic Ship
ping Company SA, an unreported decision of
the United States District Court, Southern Dis
trict of Alabama, Southern Division, a copy of
which was filed by the plaintiff at trial reaches a
similar conclusion. Paragraph numbered 4 of the
copy of the Judgment filed with me succinctly
sets forth the proposition with which I wholly
concur:
4. There is no question that the carrier is liable for damages
to uncrated automobiles resulting from its negligence. The
question that is presented here is whether the carrier is
liable for minor damage that occurs despite reasonably
careful handling in loading, stowage, and discharge. The
defendant contends that uncrated automobiles always suffer
minor scratches and dents without any negligence and the
carrier should not be held responsible for such. The leading
case on the subject is The Southern Cross, 1940 AMC 59
(1939, U.S. Dist. Ct. for Sou. Dist. of N.Y) which does
seem to support that theory. That case, however, was inter
preting an exception in the bill of lading that the cars were
"uncrated at the owner's risk of damage." That Court held
that such an exception would not excuse the carrier from
liability when the damage was caused by the carrier's negli
gence, but would only excuse them from such surface marks
sustained without any negligence. There was no such excep
tion in the bill of lading in this case. While it may be the
custom in the shipping industry to relieve the carrier of
liability for minor scratches, it is also customary to include
an exception in the bill of lading. (William Tetley, Marine
Cargo Claims, Carswell Company, Ltd., Toronto, Canada,
1965, at page 145.) If the carrier fails to include such an
exception, the Court will not include it for him. Therefore in
the absence of an exception, such as in The Southern Cross,
supra, the carrier is liable for even minor damages suffered
by uncrated automobiles for the duration of the period
covered by the bill of lading. (Tetley on p. 74 categorically
says the carrier is not responsible for minor scratches on
uncrated cars, but he relies on Southern Cross and a number
of subsequent French Court decisions. However, on page
145 he recommends that an exception be included in the bill
of lading when shipping uncrated cars.)
I further find that the defence of insufficient
packing is not available to the defendants in this
action, firstly, because no exception was noted
on the bill of lading and, secondly, because the
defendants acknowledge that it is the practice in
the trade that automobiles be shipped uncrated.
Neither do I accept their defence of inherent
vice. This was not an unusual cargo that
required special treatment. It merely required
that there be reasonable and proper loading,
handling and stowage. It did not require any
special attention over and above that and, there
fore, in my view the cargo was not of a kind
which makes available to the defendants the
plea of inherent vice. Clause (m) of Article IV,
r. 2 indicates that it has reference to the kind of
cargo which might be termed a bulk cargo as
will be seen in the use of the words "wastage in
bulk or weight or any other loss or damage
arising from inherent defect, quality or vice of
the goods." There was not a scintilla of evi
dence to indicate that the damages sustained by
the vehicles here arose from any defect in the
goods themselves. I find that the damages arose,
not because of the absence of crating nor
because the vehicles were improperly secured in
the vessel's holds, but because of careless han
dling and stowing them too closely together.
The defendants cited and relied upon the
statement at page 284 of Thomas on Stowage
that unpacked cars must be stowed preferably
in a fore and aft direction and about 8 or 9
inches apart as sustaining its position of no
negligence. While Captain Glover refers to this
as the seaman's bible, I can merely state that it
does not seem reasonable to me that with the
type of weather and sea conditions to be expect
ed at the time of year in which this shipment
was made and the necessity, therefore, for crew
members and stevedores alike to be dressed in
heavy clothing when checking the vehicles'
lashings during the voyage and during the
removal of the vehicles on discharge, that a
greater space between the vehicles would not be
more prudent. In my view recommendations
such as that made in Thomas' text must be read
as a guide only bearing in mind the conditions
expected to be encountered during the carriage
of the goods.
In so far as the quantum of damages is con
cerned, I have before me the evidence which, as
above noted I accepted, of the repairs to the
vehicles in accordance with the survey prepared
by the plaintiff's surveyor, which repairs I have
found were reasonably necessary to restore the
vehicles to the condition necessary for their
resale and were paid for. No satisfactory evi
dence was adduced by the defendants to indi
cate that such repairs were unnecessary or that
the amounts charged therefor were excessive
and I am, thus, assessing the damage payable by
the defendants at the sum of $6,345.20, includ
ing survey fees. In my view those fees were
reasonably necessary to determine the neces
sary repairs and the cost thereof and since they
did not include, I was informed by counsel, any
fees relating to undamaged vehicles, I am allow
ing them in full as part of the assessed damages.
The plaintiff shall also have its costs to be
taxed.
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.