A-714-75
Sabb Inc. (Appellant) (Plaintiff)
v.
Shipping Ltd., Lillis Marine Agencies Ltd., the
Motor Vessels Gwendolen Isle and Weser Isle, the
owners and all persons interested therein
(Respondents) (Defendants)
Court of Appeal, Pratte and Le Dain JJ. and Hyde
D.J.—Quebec, June 12, 13 and 16, 1978.
Maritime law — Contracts — Agency — Appeal from
decision in action for money owing under contract for steve-
doring and related services — Requests for services made by
respondent companies for companies for whom respondents
acted as agents — Whether or not Trial Judge erred in law in
holding that respondents had only acted as agents and conse
quently were not bound to perform the contracts they had
concluded.
Appellant is contesting the decision of the Trial Division
which dismissed the action on an account that appellant had
brought against the two respondent companies. The appellant
(plaintiff) had claimed for stevedoring and related services
against the two shipping agencies who had retained its services,
and consequently, it argued, were bound to pay for them. Both
respondent companies stated that the requests for services made
by them to appellant were solely for and on behalf of Common
wealth Carriers and/or its American agent, Amerind Shipping
Corp., for whom they acted as agents to appellant's knowledge.
Appellant's main argument is that the Trial Judge erred in
holding that the respondents had only acted as agents and
consequently were not personally bound to perform the con
tracts they had concluded.
Held, the appeal is dismissed.
Per Pratte J.: There is no direct evidence that respondents
ever contracted with appellant or any indirect evidence of the
existence of such contracts. The evidence shows that in accord
ance with the intention of all concerned, the amounts owing to
appellant were in the normal course of things to be paid by
respondents using part of the money they would collect on
behalf of the foreign company they represented. There is
nothing in the record to indicate that respondents had assumed
personal liability for these payments to appellant.
Per Le Damn J.: The evidence does not support an inference
that respondent shipping agents intended to make themselves
personally liable for the payment of appellant's stevedoring
charges. The original agreement with the appellant for steve-
doring services was made by Amerind and not by the respond
ent shipping agents. The respondents represented the principals
in the day-to-day carrying out of that agreement, and to that
extent may be said to have participated in the elaboration and
implementation of the agreement as a working relationship. But
at no time did either of the respondents make itself a party to a
contract with the appellant or undertake to be personally liable
to the appellant for payment of its stevedoring charges.
Wolfe Stevedores (1968) Ltd. v. Joseph Salter's Sons Ltd.
(1970) 11 D.L.R. (3d) 476, (1971) 2 N.S.R. (2d) 269,
distinguished.
APPEAL.
COUNSEL:
Guy Vaillancourt and R. Langlois for appel
lant (plaintiff).
Trevor H. Bishop for respondents (defend-
ants) Shipping Ltd. and Lillis Marine Agen
cies Ltd.
SOLICITORS:
Langlois, Drouin, Roy, Fréchette & Gau-
dreau, Quebec, for appellant (plaintiff).
Brisset, Bishop, Davidson & Davis, Montreal,
for respondents (defendants) Shipping Ltd.
and Lillis Marine Agencies Ltd.
The following is the English version of the
reasons for judgment delivered orally by
PRATTE J.: Appellant is contesting the decision
of the Trial Division, [[1976] 2 F.C. 175] which
dismissed the action on an account that appellant
had brought against the two respondent
companies.
Appellant operates a stevedoring business in
Quebec City and Montreal. Respondents are both
Montreal shipping agents.. During the summer of
1971 a certain Mr. Moore, from New York, con
tacted appellant. He represented a foreign ship
ping line whose vessels were to be loaded and
unloaded in the ports of Quebec City and Mont-
real in the following months, and he wanted to
know the conditions on which appellant could pro
vide its services to these vessels. A meeting was
finally held in Montreal between Moore and repre
sentatives of appellant and respondent Lillis
Marine Agencies Ltd., which was the Canadian
shipping agent for the foreign shipping line. At the
end of this meeting, in which the representative of
Lillis Marine Agencies Ltd. took no active part, it
' Several days before the appeal was heard appellant dropped
its appeal against the two respondent vessels.
was decided between the other participants that
appellant would provide the stevedoring services
required by the vessels belonging to the firm repre
sented by Moore at Quebec City and Montreal
beginning at the end of August. It was also agreed
that the representatives of appellant and of
respondent Lillis Marine Agencies Ltd. would
meet a short time later to determine the procedure
to be followed in implementing this agreement.
This procedure was determined and appellant
subsequently provided the promised stevedoring
service. At first, when appellant's services were
required it was respondent Lillis, Marine Agencies
Ltd. that informed it and forwarded the necessary
instructions to it. As of October 15, 1971, however,
it was respondent Shipping Ltd. that played this
role, since on that date it replaced Lillis Marine
Agencies Ltd. as Canadian shipping agent of the
foreign shipping line.
It is the unpaid balance of the price of the
services thus rendered that appellant claimed from
the two respondents, who in appellant's view had
retained its services and were consequently bound
to pay for them. Appellant also alleged that at the
end of January 1972 respondent Shipping Ltd. had
undertaken to pay everything still owing to it. The
Trial Judge dismissed appellant's action. He first
held that respondents had contracted with appel
lant only in their capacity of agents of the foreign
shipping line and that they were not personally
bound to perform the obligations resulting from
these contracts. He also held that appellant had
not proved the promise of payment cited against
Shipping Ltd. It is against this judgment that the
appeal is directed.
Counsel for the appellant contended that the
Trial Judge erred in saying that it was not proved
that at the end of January 1972, shortly before the
beginning of the proceedings, a representative of
Shipping Ltd. promised that his company would
pay appellant the entire balance owing to it. Mr.
Langlois maintained that this promise, made
during a telephone conversation between Mr.
Lachance, president of appellant, and a certain
Mr. Gough of Shipping Ltd., was proved by the
testimony of Mr. Lachance even though this was
contradicted by the testimony of Mr. Gough. In
the opinion of Mr. Langlois the Trial Judge should
have believed Lachance's testimony rather than
that of Gough because its truth was confirmed by
the handwritten notes made by Lachance while
talking to Gough on the telephone and produced at
the hearing. In my opinion, this argument is not
valid. Lachance's handwritten notes do not prove
that this testimony should be preferred to Gough's,
because they are so unclear that they are equally
compatible with both testimonies. There is there
fore no reason not to affirm the decision of the
Trial Judge on this point.
If I have understood correctly, however, this was
only a subsidiary argument of appellant, whose
main argument was that the Trial Judge erred in
holding that respondents had acted in this matter
only as agents and that consequently they were not
personally bound to perform the contracts they
had concluded. In a very able argument Mr. Lan-
glois put forward several grounds for concluding
that respondents were personally liable. He said
that such liability was a necessary result of the
fact that respondents had not given sufficient indi
cation of the identity of their principal, and of the
fact that their principal was a foreign company not
authorized to do business in Quebec. He further
argued that the circumstances that preceded and
followed the drawing up of the contracts for ser
vices showed that both parties intended respond
ents to be personally obligated toward appellant. I
do not feel it is necessary to recount this argument
in detail since in my view it is based on a misun
derstanding. The problem to be resolved is not
whether respondents, in contracting with appel
lant, acted solely as agents and thus incurred no
personal liability toward appellant. In order for
such a question to arise it must be established that
respondents contracted with appellant. This is pre
cisely the point that must first be clarified. Did
respondents conclude contracts for services with
appellant? Only if the answer to this first question
is affirmative must we ask whether the obligations
resulting from these contracts bound respondents
personally.
According to Mr. Langlois, respondents must be
said to have contracted with appellant because it
was respondents who requested appellant's ser
vices. I cannot concur in this opinion. If it is
correct to say that respondents requested appel
lant's services, they did so only in so far as they
informed appellant of the arrival of the various
vessels and indicated the work to be done on each
of them. If such requests had occurred without any
prior agreement, they would probably have to be
regarded as offers to contract made by respond
ents. That was not the situation in this case,
however, since Moore had previously reached an
agreement with appellant. In these circumstances,
when respondents contacted appellant upon the
arrival of each vessel they were merely forwarding
to appellant information that it needed in order to
do the work it had promised to perform. In my
view there is no direct evidence that respondents
ever contracted with appellant. I am also of the
opinion that, contrary to what has been main
tained, there is no indirect evidence of the exist
ence of such contracts. The evidence shows that in
accordance with the intention of all concerned, the
amounts owing to appellant were in the normal
course of things to be paid by respondents using
part of the money they would collect on behalf of
the foreign company they represented. There is
nothing in the record to indicate, however, that
respondents had assumed personal liability for
these payments to appellant. Mr. Langlois argued
that appellant had sent its invoices to the two
respondents, who had paid some of them without
protest. He pointed out that respondents had false
ly indicated to the foreign company they represent
ed that appellant's accounts had been paid. Final
ly, he emphasized the fact that according to their
agency contracts respondents did not have the
power to conclude a contract for services on behalf
of the foreign company of which they were the
Canadian representatives. These facts, however,
whether they are considered singly or as a whole,
do not justify the conclusion that respondents ever
contracted with appellant.
For these reasons, I would dismiss the appeal
with costs.
The following are the reasons for judgment
delivered orally in English by
LE DAIN J.: I agree that the appeal must be
dismissed. Despite the able argument of Mr. Lan-
glois, the evidence does not support an inference
that the respondent shipping agents, Lillis Marine
Agencies Ltd. and Shipping Ltd., intended to
make themselves personally liable for the payment
of the appellant's stevedoring charges.
The appellant was appointed as stevedore con
tractor in Montreal in August 1971 by Amerind
Shipping Corporation, an American company
acting as general agents for a shipping line operat
ing at one time under the name of "Caribbean
Container Line" and later under the name of
"Commonwealth Carriers". The precise identity
and corporate status of the principals for which
Amerind acted are not clear, but they would
appear to have been shipping lines controlled by
the Isbrandtsen interests, who were known by
reputation to the appellant at the time the agree
ment was made with Amerind. Although there was
some exchange of correspondence the agreement
was essentially an oral one concluded between
Harry N. Moore, on behalf of Amerind, and
Kenneth J. Monks, on behalf of the appellant.
Monks testified as to what took place at a meeting
in Montreal on August 11, 1971 in part as follows:
. after looking at the facilities Mr. Moore had a discussion
with the Captain Unger and they came to me and they said to
me: are you prepared to handle Isbrandtsen ships here in
Montreal and I said Yes we are, and they said: at the rates you
quoted, and I said yes. So he said: well now we will start to
have our first ship here at such or such a date, towards the end
of August. So I said: all right that is fine . ..
Edward Brennan of Lillis Marine was present at
this meeting but it is impossible to conclude from
the evidence that Lillis Marine was a party to the
appellant's appointment as stevedore contractor.
At that time Lillis Marine had an agency contract
with Cargo Carriers Limited, who would appear to
have been operating the Caribbean Container
Line, but it was subordinate in authority to the
general agent Amerind by which it was regarded
as being in effect a sub-agent.
The details of the day-to-day operations at the
appellant's terminal, including questions of docu-
mentation, were settled between Lillis Marine and
the appellant, but Lillis Marine played no part in
determining the rates for which the appellant
would perform its stevedoring services. The evi
dence shows that the question of who would pay
the appellant was not discussed with either Ame-
rind or the respondent shipping agents until some
time in December, 1971. The appellant submitted
its invoices to Lillis Marine and afterwards to
Shipping Ltd., when it replaced Lillis Marine as
local agent around the middle of October, because,
according to the testimony on both sides, it was the
customary practice to submit stevedoring accounts
to the local shipping agents.
Monks testified on this point as follows:
... it was the normal procedure to send invoices to the agents
or the general agents who normally are put in funds to pay the
disbursements.
Both Captain Lillis of Lillis Marine and Fred
McCaffrey of Shipping Ltd. agreed that it was
customary for stevedoring invoices to be sent to the
shipping agents in Montreal who would transmit
them for approval to their principals. McCaffrey's
testimony on this point was as follows:
Generally speaking, stevedoring invoices are sent by the steve
dore to the office of the agent for the line. Our office will check
those invoices as to their factuality to the extent that we can,
particularly in relationship to items such as overtime, or things
of that nature, and having done that we will then transmit the
documents, the invoices to the general agent of the line in the
United States if there is a general agent or directly to the
representatives of his, of the line for approval. That is the
customary practice when one is representing a line which is
represented in the United States. There are instances when one
represents a line which is domiciled in Europe where the agent
may be given the authority to pay bills without prior reference
to his principal, but this is the exception rather than the rule. In
the case of Commonwealth Carriers, our instructions were to
refer all stevedoring and related documents to Amerind Ship
ping Corporation in New York for approval and processing.
There was no evidence that it was customary for
the shipping agent to assume personal liability for
payment of stevedoring charges. Counsel for the
appellant laid particular stress on the fact that the
appellant had addressed its invoices to Lillis
Marine and Shipping Ltd. rather than to their
principals, without protest from the agents; that
the invoices had been stamped "paid" by the
agents and included in the "disbursement
accounts" rendered by them to their principals,
and that Shipping Ltd. had paid some $76,000 to
the appellant without prior approval from Ame-
rind. While I was much impressed for a time by
these facts as possibly constituting a basis for an
inference that Shipping Ltd. had impliedly
acknowledged a personal liability to the appellant,
I am of the opinion that they are not sufficient to
support such a conclusion.
Although the agency agreements under which
respondents operated contemplated that they
would pay local expenses out of freight or other
funds provided by the principals, witnesses on
behalf of both Lillis Marine and Shipping Ltd.
testified that they were under instructions to for
ward stevedoring accounts to their principals for
approval and that they had no authority to pay
them without such approval. They said that since
the basic stevedoring arrangements had been made
by Amerind and they were not certain of the rates
that had been agreed upon, they were not in a
position to give the accounts final approval. In the
light of all the circumstances I see no reason to
doubt this testimony, and it is certainly inconsist
ent with any intention to make themselves person
ally liable for the stevedoring charges. The facts
stressed by the appellant, to which I have referred,
are not strong enough in my opinion to overcome
the basic logic of this position. Since it was
acknowledged to be customary to submit stevedor-
ing accounts to the local shipping agents to save
stevedore contractors the trouble of addressing
themselves to the principals, no particular signifi
cance should be attached, I think, to the fact that
the accounts were addressed to the agents without
reference to the principals. The fact that the appel
lant's invoices were marked "paid" by the agents,
although they had not in fact been paid, was
indeed a curious circumstance, but this was appar
ently done to permit their inclusion in the dis
bursement account with the status of "receipted
vouchers", as required by the terms of the agency
agreement. In this way, as I understand it, provi
sion was to be made in the running account be
tween the agents and their principals for the even
tual payment of the invoices should approval for
such payment be received. It does not seem to me
to be a sufficient circumstance from which one
may conclude that the agents recognized a person
al liability for such payment to the appellant. In
fact, Shipping Ltd. was directed by its principals
to remit surplus freight to the point where it did
not have a sufficient balance in its account with
them to pay all of the appellant's outstanding
stevedoring charges. The payment of these charges
was controlled by the principals, and this was
inconsistent with a recognition by the agents that
they were personally liable for them. As for the
payment of some $76,000 that was finally made by
Shipping Ltd. to the appellant out of surplus
freight in its account, I do not think this payment
necessarily implied any personal liability on its
part. It was simply an attempt to provide the
appellant with some relief out of funds that were
at the agent's disposal. Ronald Gough, comptroller
of Shipping Ltd., admitted that he did not have
prior approval for this payment, but this is not a
fact from which one may infer personal liability.
The payment was made out of surplus freight
collected for the principals and not out of the
personal funds of Shipping Ltd.
As for the promise to pay the balance owing
that was allegedly made by Gough on behalf of
Shipping Ltd., the evidence is contradictory, and I
can see no basis for interfering with the finding of
the Trial Judge that there was no such promise.
Several cases were cited to us by counsel but
none of them is directly applicable to the issue in
this case. The original agreement with the appel
lant for stevedoring services was made by Amerind
and not by the respondent shipping agents. The
respondents represented the principals in the day-
to-day carrying out of that agreement, and to that
extent may be said to have participated in the
elaboration and implementation of the agreement
as a working relationship. But at no time did either
of the respondents make itself a party to a contract
with the appellant or undertake to be personally
liable to the appellant for payment of its stevedor-
ing charges. This distinguishes the case, for exam
ple, from that of Wolfe Stevedores (1968) Limited
v. Joseph Salter's Sons Ltd. (1970) 11 D.L.R.
(3d) 476, (1971) 2 N.S.R. (2d) 269, in which it
was found that there had been an express agree
ment by the shipping agents to pay for services
that had been ordered by them.
* * *
HYDE D.J. concurred.
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.