T-2006-73
The Queen (Plaintiff)
v.
Montreal Shipping Co. Ltd. (Defendant)
Trial Division, Dubé J.—Quebec City, October 16,
1975; Ottawa, November 18, 1975.
Maritime law—Newsprint stored in National Harbours
Board warehouse—Crown claiming storage charges—Defend-
ant claiming Crown lacks power to levy charges and that free
time period applies to goods stored in sheds—National Har
bours Board Act, R.S.C. 1970, c. N-8, ss. 14, 16(1) and
By-law B-3, ss. 2(d),(e), 5(1), 7, 8, 11, 12, Sched., Part I77—
Board Minute 1967-Q-12, s. 2(1)(a).
Plaintiff claims $4,687.36 from defendant as charges for
storage of newsprint in a warehouse rented from it by defend
ant. Defendant claims plaintiff did not have the right to levy
the charges. By-law B-3 of the National Harbours Board
provides (section 8) that demurrage is not payable on goods in
transit remaining on Board property after the expiration of free
time if the goods are on property, other than a transit shed,
leased from the Board. Defendant claims that the free time
applies to goods stored in sheds, not just goods left on the
wharf, and that the Board is obliged to make known its rates.
Defendant further submits that if By-law B-3 does not establish
charges referring specifically to sheds, the Board may not
impose them. As well, the By-law refers only to demurrage and
wharfage charges, and, since the case involves demurrage, such
charges are payable (section 2 of By-law B-3) only "after the
expiration of free time" (i.e. "the period ... after unload
ing ..."). How can demurrage then be charged before loading?
Plaintiff maintains that there is never free time in the case of
goods stored in sheds, and, as the wharf is new, bases its first
claim at the rate of 4it per square foot (Minute 1967-Q-12
section 2(1)(a)). A claim based on the rental contract and a
third on unjust enrichment are also advanced.
Held, defendant must pay the charges. It is necessary to
consider only plaintiffs first claim. As to defendant's first
allegation, condition 3, on the reverse side of the application for
berth, and of the permit, states that the permit is subject to all
Board by-laws and regulations. The key to the whole problem is
the exception to the exception in section 8(1) of the By-law:
demurrage will not be assessed on goods in transit if they are on
property other than in a shed; for goods in a transit shed, there
is no free demurrage. It is normal not to assess demurrage on
goods from abroad that are unloaded on the wharf, but the
Board cannot indefinitely store all goods in transit, free, in its
sheds.
ACTION.
COUNSEL:
Y. Brisson and J. -M. Aubry for plaintiff.
R. Langlois for defendant.
SOLICITORS:
Deputy Attorney General of Canada for
plaintiff.
Langlois, Drouin & Laflamme, Quebec City,
for defendant.
The following is the English version of the
reasons for judgment rendered by
DUB J.: This is an action on an account, arising
from the storage of newsprint in one of the ware
houses of the National Harbours Board in Quebec
Harbour. A written request dated May 29, 1970,
to rent warehouse W/C-3, was made by the
Canadian Import Steamship Agency for defend
ant, Montreal Shipping Ltd., as may be seen from
the application for berth and the permit of the
same date signed by L. Côté, Harbour Master,
National Harbours Board, Quebec Harbour.
The amount of space occupied was 58,892
square feet, that is almost all of shed W/C-3. The
newsprint was stored from June 1 to September
11, 1970. In view of the fact that the warehouse
workers of Quebec Harbour were on strike from
July 2 until August 3, the National Harbours
Board only charged defendant for storage for the
period from August 4 to the end of September
1970, that is, the remainder of the month of
August. The total amount claimed by the Crown is
therefore $4,687.36.
Defendant does not actually deny the aforemen
tioned facts, but claims that plaintiff did not have
the right to levy these storage charges.
Section 14 of the National Harbours Board
Act' authorizes the Governor in Council to make
1 R.S.C. 1970, c. N-8.
by-laws for the management of various harbours.
Section 16(1) authorizes the Board, with the
approval of the Minister (in this case, the Minister
of Transport), to commute, reduce or waive any
tolls fixed by by-law on such terms and condition
as the Board deems expedient.
In accordance with section 14 the Board adopt
ed By-law B-3, entitled "Tariff of Wharfage
Charges", applicable to National Harbours Board
facilities, including those at Quebec City. The said
By-law B-3 was adopted by order (P.C. 1968-
1509) on July 31, 1968 and published in the
Canada Gazette on August 14, 1968 [SOR/68-
351].
Section 5(1) of By-law B-3 reads as follows:
5. (1) Except as otherwise provided in sections 7 and 8 and
in Part II of the Schedule, the wharfage and demurrage set out
in Parts I and III of the Schedule shall be charged as specified
in those Parts.
Accordingly, the two exceptions provided for in
section 5(1) are section 7, which is not relevant tc
the case in point, and section 8, as amended by an
order (P.C. 1969-94) adopted on January 14 and
published in the Canada Gazette on February 12,
1969 [SOR/69-39].
8. (1) Demurrage is not payable on goods in transit remain
ing on Board property after the expiration of free time if the
goods are on property, other than in a transit shed, that is
under lease from the Board.
(2) For the purposes of this section, property under lease
from the Board does not include property for which a permit of
occupancy has been granted under the authority of the manag
er of a port.
(3) Demurrage is not payable on unmanifested personal
effects, other than motor vehicles. [Emphasis added.]
There is therefore an exception to the exception,
namely, that demurrage can be assessed on goods
stored in a transit shed, except for provisions to the
contrary in Part III of the Schedule; and this Part
is entitled "Demurrage" and reads in full as
follows:
On goods remaining on Board property after the expiration
of free time, demurrage shall be assessed as follows:
(a) for each of the first four working days or part of
each working day after the expiration of free time, per
ton or part thereof 500
(b) for each working day or part thereof thereafter,
per ton or part thereof .$1.00
Defendant submits that the free time period
applies in the case of goods stored in sheds and not
just to goods left on the wharf.
Plaintiff claims that in the case of goods stored
in sheds there is never a free time period.
Section 2(e) of By-law B-3 defines "free time"
as follows:
2. In this By-law,
(e) "free time" means, in respect of any goods, the period
within which the goods must be removed from Board prop
erty after unloading from a vessel with no demurrage charge
being incurred in respect of such period; [Emphasis added.]
and in paragraph (d) the definition given for
"demurrage" is:
(d) "demurrage" means a charge payable on goods in transit
remaining on Board property after the expiration of free
time.
Board minute 1967-Q-12, dated November 14,
1967, approves and ratifies new minimum tariff
rates for three categories: transit shed space, open
space on wharves and office space. For new
wharves the rate is 4¢ per square foot per month or
part thereof. Plaintiff established that in this case
a new wharf was involved, and that the rate set
was 4¢ per square foot for the space occupied in
shed W/C-3. It is also by authority of section
2(1)(a) of these Minutes that demurrage charges
are for all of the month of September, even though
the goods were removed on the 11th of the month.
Section 2(1) (a) of Minute 1967-Q-12, which was
given in English at the hearing, is as follows:
2. To approve and ratify new minimum rates in respect of
allotments as follows:
(1) Transit Shed Space
(a) New sheds, per square foot per month or part thereof ..40
It should be emphasized that the said Minute
was accepted with some reservation, with counsel
for the defendant not questioning the authenticity
of the Minute but objecting to its admissibility as
evidence that defendant had known about the
document before storing the goods.
Plaintiff's first claim is therefore based on the
National Harbours Board Act, By-law B-3 relat
ing to tariff rates and Minute 1967-Q-12 establish
ing a charge of 4¢ per square foot for storing goods
in Harbour Board sheds.
Should the Court not accept this first argument,
plaintiff has presented a second one based on the
rental contract and a third on unjust enrichment.
First let us examine the claims of defendant with
regard to the first argument.
Defendant claims that the Board, as an agent of
the Crown administering public facilities and ser
vices, is obliged to make known to the public the
rates it intends to charge its customers and not
take them by surprise. In other words, the import
er or exporter is entitled to know the rates before
occupying a shed in Quebec Harbour. The applica
tion for berth and the permit make no reference
whatsoever to demurrage. Nor does either make
reference to the By-laws or the Board Minute.
However, condition #3 on the reverse side of the
application and permit (both appear on the same
document) reads as follows:
This permit is subject to all the provisions of the National
Harbours Board By-Laws, and to the National Harbours Board
"Regulations governing the occupancy and use of Transit
Sheds, etc. for the handling of Cargo".
Defendant also quotes section 14(2) of the Na
tional Harbours Board Act:
14. (2) By-laws made in accordance with this Act, when
published in the Canada Gazette, have the same force and
effect as if enacted herein,
and claims that if By-law B-3, which is the only
by-law relied on in this case, does not establish
charges which refer specifically to sheds, then the
Board may not impose them. Besides, By-law B-3
contains only two types of charges: demurrage
charges and wharfage charges. Since this case
involves demurrage charges, the latter are payable,
according to the definition in section 2 of the B-3
By-law, only "after the expiration of free time".
"Free time" is defined in paragraph (e) as "the
period within which the goods must be removed
from Board property after unloading from a vessel
with no demurrage charge being incurred in
respect of such period." How then, in the submis
sion of defendant, can demurrage be charged
before loading?
Section 11 of By-law B-3 is more specific as to
the duration of the free time period:
11. (1) Free time shall commence on the day following
completion of unloading of each vessel at each berth, and shall
be as follows:
(a) eight working days, in the case of goods that require
gauging or inspection, other than customs appraisal, by
officers of Her Majesty; and
(b) five working days, in the case of any other goods.
(2) The Board may, in its discretion, extend or limit any free
time.
Other provisions relating to goods subject to
demurrage appear in the following section:
12. (1) Where goods have become subject to demurrage, the
owner of the vessel shall ensure the receipt by the Board at its
office at the harbour at which the goods were unloaded, before
noon on the day following expiry of the free time prescribed in
respect of the goods, of a list of the goods, in duplicate, on a
form supplied by the Board.
As a result of these two sections, defendant asks
how this obligation can or should be fulfilled when
it is a matter of goods to be loaded. Furthermore,
Part III makes demurrage charges payable on
goods left on Board property "after the expiration
of free time". Defendant therefore argues that
By-law B-3 does not assess demurrage charges on
goods prior to loading.
It should be acknowledged that By-law B-3 was
not skilfully drafted. Nevertheless, the key to the
problem is the exception to the exception appear
ing in section 8(1): demurrage charges set out in
Parts I and III of the Schedule will not be assessed
on goods in transit if they are on property other
than in a transit shed. For goods in a transit shed
there is no free demurrage.
The By-law connects "demurrage", "free time"
and "unloading from a vessel" with goods "on
Board property", but section 8(1) excludes "a
transit shed" from this "Board property".
It is quite normal for the Board not to assess
demurrage on goods from abroad that are unload
ed on the wharf. On the other hand, the Board
may not store in its sheds, free of charge and for
an indefinite period, all goods in transit.
Under the circumstances, it is not necessary to
consider the two alternative arguments put for
ward by plaintiff.
Defendant is accordingly required by this judg
ment to pay plaintiff the sum of $4,687.36 with
costs.
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.