A-22-74
The Owners of the vessel Continental Shipper,
United Steamship Corporation, Federal Com
merce and Navigation Company Limited and Fed
eral Pacific Lakes Line (Appellants) (Defend-
ants)
v.
Nissan Automobile Co. (Canada) Ltd. (Respond-
ent) (Plaintiff)
Court of Appeal, Pratte and Le Damn JJ. and Hyde
D.J.—Montreal, December 19, 1975.
Maritime law—Appeal—Shipment of uncrated automo-
biles—Minor damage and scratches—Liability of carrier—
Carriage of Goods by Water Act, R.S.C. 1970, c. C-15, Article
III, para. 2, Article IV, para. 2(m),(n).
A number of automobiles were shipped uncrated under clean
bills of lading, and when unloaded at Montreal were found to
be damaged. The Trial Division held that in the absence of
exceptions in the bill of lading, a carrier is liable even for minor
damage suffered by uncrated automobiles during the period
covered by the bill of lading. Damages were attributed to
careless handling and too closely stowing the cars. Appellants
appealed.
Held, the appeal is allowed only for the amount of the survey
fees. The appellants' defence of insufficiency of packing is not
applicable, nor is the exception of inherent defect, quality or
vice of the goods. And, not only did appellants fail to prove
proper and careful loading, handling etc., but the evidence
pointed to the conclusion that damage was caused by lack of
required care in stowing and handling. However, survey fees
incurred by respondent should not have been included. This
expense did not result directly from the damage but from the
prior decision of the underwriters to have the cars inspected on
arrival for a specified fee regardless of damage. It was an
incidental expense which would have been incurred in any
event.
The Southern Cross [1940] A.M.C. 59, distinguished.
Chrysler Motors Corporation v. Atlantic Shipping Co.
S.A. (unreported) agreed with.
APPEAL.
COUNSEL:
E. Baudry for appellants.
V. Prager and M. de Man for respondent.
SOLICITORS:
Brisset, Bishop & Davidson, Montreal, for
appellants.
Stikeman, Elliott, Tamaki, Mercier & Robb,
Montreal, for respondent.
The following are the reasons for judgment of
the Court delivered orally in English by
LE DAIN J.: This is an appeal from a judgment
of the Trial Division holding the appellants, as
owners, operators, charterers and managers of the
vessel Continental Shipper, liable for damages in
the amount of $6,345.20 to a shipment of automo
biles carried by the said vessel from Yokohama,
Japan, to Montreal, Canada, during February and
March of 1970. The amount awarded consisted of
the cost of repairing dents and scratches on the
surface of the automobiles and survey fees in the
amount of $400.
The shipment was of 321 Datsun automobiles by
the manufacturers to the respondent for wholesale
distribution to dealers. The automobiles were car
ried uncrated under clean bills of lading, which
made no reference to the fact that they were
uncrated. When unloaded at Montreal a certain
number of the automobiles were found to be in
damaged condition.
The principal testimony as to the manner in
which the automobiles were stowed, handled and
discharged was that of a marine surveyor retained
by the appellants. The surveyors appointed by the
underwriters for the shipper were not permitted to
go on board the vessel. According to this testimo
ny, the essential facts as to the manner in which
the automobiles were stowed are as follows. The
Continental Shipper was a bulk cargo vessel that
was adapted for this particular voyage to enable it
to carry uncrated automobiles. The automobiles
were carried in three holds of the ship in which
temporary decks had been erected. Each of the
automobiles was equipped with two small hooks on
the front and rear. The automobiles were placed
upon the temporary decks in a fore and aft direc
tion at a distance, at the sides and in front and
rear, of from nine to twelve inches apart. They
were secured by wires running from each of the
small hooks mentioned above to a steel cable
which ran across the ship at deck level at the front
and rear of each row of vehicles and was secured
1 [1974] 1 F.C. 76.
to the sides of the ship. Each of the four wires on
the automobiles was looped across one or the other
of these cables and was tightened to the cable by
means of a Spanish windlass.
The marine surveyor of the appellants testified
that in the course of a voyage such as this one,
particularly where, as in this case, heavy weather
was encountered, it would be necessary for mem
bers of the crew to pass between the automobiles
from time to time to verify that they remained
securely lashed. He testified that it was customary
for the crew to wear heavy clothing equipped with
metal buttons, and that some contact between such
clothing and the surface of the automobiles,
inflicting damage in the form of dents and scrat
ches was inevitable.
The discharge of the automobiles was effected
by a lifting device consisting of a platform to
which wires were fixed at each corner in such a
manner as to prevent them from touching the
automobiles while on the platform. The automo
biles were driven or pushed on to the lifting device.
A hoist was used to carry the lifting device from
the hold to the pier. The marine surveyor of the
appellants testified that in the course of unloading,
the stevedores, who, like the crewmen, were wear
ing heavy clothing with metal buttons, would come
into contact with the surface of the automobiles
and inflict further damage in the form of dents
and scratches. Because of the narrow space be
tween the automobiles the stevedores were obliged
to enter the automobiles through their windows in
order to move them on to the lifting device.
The respondent's claim was for damage in the
form of dents and scratches that required painting,
together with survey fees. Respondent made no
claim for scratches that could be removed by
buffing or compounding. The appellants conceded
liability for serious dents but contested it for minor
dents and for scratches.
The parties agreed that the Carriage of Goods
by Water Act, R.S.C. 1970, c. C-15, should be
regarded as the equivalent of the governing law in
this case and that the issues should be determined
in accordance with its provisions.
The parties further agreed that the case should
be determined on the basis of clean bills of lading,
that is, on the assumption that the damages
occurred after the automobiles were loaded on
board the vessel.
The appellants raised the defences of insuffi
ciency of packing and inherent defect, quality or
vice of the goods, which are provided for by
clauses (m) and (n) of Article IV, paragraph 2, of
the Rules of the Carriage of Goods by Water Act
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;
We agree with the learned Trial Judge that the
defence of insufficiency of packing is not appli
cable to a case such as the present one. The
evidence shows that it is a well-established practice
and custom of the trade, known to the parties in
the present case, that automobiles are carried
uncrated, and in such circumstances it is not open
to the carrier to raise the defence of insufficiency
of packing. We do not have to express an opinion
as to the validity and effect of an exception in a
bill of lading purporting to place the risk of
damage to uncrated automobiles on the owner,
since there was no such exception in the present
case. 2
2 The effect of such an exception was considered in The
Southern Cross case, [1940] A.M.C. 59, a decision of the
United States District Court for the Southern District of New
York. In that case the bills of lading covering a shipment of
uncrated automobiles contained the following notation:
"Uncrated at owner's risk of damage." The court held that the
effect of this exception was to relieve the carrier of liability for
damage attributable to the fact that an automobile was uncrat-
ed but not for damage attributable to negligent stowage or
handling. As distinct, however, from the effect of such an
exception on liability for damage attributable to the fact the
automobiles were uncrated, the Court held that the defence of
insufficiency of packing, as such, could not apply to a shipment
of uncrated automobiles. On this point Leibell D.J., said [at
pages 66-67]:
We are also in agreement with the Trial Judge
that the exception of inherent defect, quality or
vice of the goods is not applicable to a case such as
this one. The susceptibility of the highly polished
surface of an automobile to damage in the form of
dents and scratches is not, in our opinion, an
inherent quality of the goods within the meaning
of Article IV, paragraph 2(m) of the Rules. We
cannot see how such damage could ever be said to
arise from this quality. It could only arise or result
from the intervention of some other agency.
Finally, we are of the opinion that not only did
the appellants fail to discharge the burden of
proving that they did "properly and carefully load,
handle, stow, carry, keep, care for and discharge
the goods carried", as required by Article III,
paragraph 2, of the Rules, but, as found by the
Trial Judge, the evidence pointed affirmatively to
the conclusion that the damage was caused by lack
of the required care in stowing and handling the
automobiles.
We are in agreement with the finding of the
Trial Judge that the automobiles were reasonably
secured for the voyage but that they were stowed
too closely together to permit the necessary pas
sage of crew and stevedores between them in such
a manner as, by the exercise of reasonable care, to
avoid damage as a result of bodily contact with the
automobiles. On the space to be maintained be
tween uncrated automobiles the marine surveyor
of the appellants referred to the recommendation
of Thomas on Stowage. On this point we adopt the
reasoning of the Trial Judge which was expressed
as follows [at pages 86-87]:
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
Nor can the shipment of an uncrated automobile, when we
consider the great volume of such shipments and the readi
ness of carriers to accept uncrated automobiles as part of the
ship's cargo, be considered under the exception "insufficiency
of packing". That the automobiles were uncrated was of
course apparent and the fact that they were unboxed was
stated in the bill of lading. Under the circumstances the
carrier cannot later raise any question as to insufficiency of
packing. Silver v. Ocean Steamship Company, 1 K.B. 416
(1930).
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 expected 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 condi
tions expected to be encountered during the carriage of the
goods.
The appellants urged that minor dents and
scratches to uncrated automobiles should be
regarded as a matter of inherent risk or ordinary
wear and tear in the course of an ocean voyage for
which the carrier should not be liable. What this
argument amounted to is that such damage should
not give rise to any inference or presumption of
negligence on the part of the carrier or those for
whom it is responsible. We can find no basis in the
law for such a limitation of liability.'
The appellants contend that the survey fees
incurred by the respondent should not have been
included in the damages in this case. We agree. In
our opinion this expense did not result directly
from the damage to the automobiles but rather
from the prior decision of the underwriters in
3 On this issue counsel were unable to refer us to any
decisions of courts in this country or in the United Kingdom,
but reference was made to The Southern Cross case, supra,
and to an unreported decision on January 5, 1971 of the United
States District Court for the Southern Division, at Alabama:
Chrysler Motors Corporation v. Atlantic Shipping Company,
S.A. Both of these cases were considered by the Trial Judge. In
The Southern Cross case, in which there was the exception,
"uncrated at owner's risk of damage", on the bills of lading, the
Court held that certain damage to the automobiles was of such
a character as to raise a presumption of negligence for which
the carrier was liable, but with respect to other damage it
concluded [at page 66]: "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
would be classed as `ordinary wear and tear ... of the goods in
the course of their transportation."' In the Atlantic Shipping
case, which also involved a shipment of uncrated automobiles,
there was no exception noted on the bills of lading. The Court
held that "in the absence of an exception, such as in The
Southern Cross case, 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."
Japan to have them inspected on arrival, for a
specified fee per unit, regardless of the actual
existence or extent of damage. It was an expense
incidental to the shipment of goods by water trans
port that would have been incurred in any event.
The appeal should accordingly be allowed for
the amount of the survey fees but dismissed for the
rest.
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.