T-1084-77
Coutinho, Caro & Co. (Canada) Ltd. (Plaintiff)
v.
The Owners of the Vessel Ermua, the Charterers
of the Vessel Ermua, Naviera Vizcaina S.A.,
Intercast S.A., Cast Europe N.V., Cast North
America Limited, Cast Transportation Limited,
Cast Shipping Limited, Richmond Shipping Lim
ited (Defendants)
Trial Division, Walsh J.—Montreal, March 20;
Ottawa, March 29, 1979.
Maritime law — Contracts — Bill of lading stamped
indicating unchecked but listing supposed contents with
weights and dimensions — One entire lift of steel angles, and
pieces from three other lifts, lost — Defendants plead limita
tion of liability of Brussels Convention, 1924 — Whether or
not shipper assumed risk if on delivery the lifts (packages or
units) contained fewer than the individual number of pieces —
Whether the limitation applies to each lift or whether each
piece is itself a package or unit — Carriage of Goods by Water
Act, R.S.C. 1970, c. C-15, Schedule, Art. III, par. 3.
The action concerns the loss of part of a cargo of steel angles,
shipped in lifts of several pieces each, on the vessel Ermua. The
bill of lading described the number of lifts and pieces, giving
their weight, and had a rubber stamp superimposed on it
reading "Total lifts contents unchecked but said to contain
indicated number of pieces, and said to be of indicated dimen
sions and weights." One entire lift was not delivered, and
twelve pieces, four from each of three lifts, were also missing.
Defendants plead that the cargo was properly loaded, stowed,
and cared for, and with the exception of the one lift, delivered
in the apparent order and condition as received on board, and
hence disclaim liability. Defendants also plead the terms of the
1924 Brussels Convention limiting liability per package, and
tender that amount for the lost lift. Two legal issues arise:
firstly, whether the shipper by accepting the clause in the bill of
lading has assumed the risk if on delivery the lifts contain fewer
than the individual number of pieces, and secondly, whether a
$500 limitation applies to each lift or whether each piece itself
is a "package or unit".
Held, the action is allowed. While the shortage may have
been attributable to the shipper, the better view is that the
carrier cannot avoid responsibility by simply stamping a clause
on the bill of lading "said to contain indicated number of
pieces". The acknowledgment that the shipment was received in
"apparent good order and condition" creates prima facie proof
against the carrier which, because of the special clause can be
rebutted by evidence indicating that the lifts in question did not
contain the number of pieces which they were said to contain,
but the burden is on defendant to present such proof. There
fore, in addition to the claim for the missing lift a claim can be
made for the twelve missing pieces from the other lifts.
Although the evidence indicates that the strapping into lifts is
the customary way of shipping steel such as that with which the
Court is concerned, such a lift with the number of pieces
strapped together for shipment is a package, whether or not this
is the customary way of packaging it for shipment. The
individual pieces of steel cease to be units when they are so
strapped together into a lift.
ACTION.
COUNSEL:
Marc de Man for plaintiff.
Robert Cypihot for defendants.
SOLICITORS:
Stikeman, Elliott, Tamaki, Mercier & Robb,
Montreal, for plaintiff.
Brisset, Bishop, Davidson & Davis, Montreal,
for defendants.
The following are the reasons for judgment
rendered in English by
WALsx J.: This action concerns the loss of part
of a cargo of steel angles shipped on the vessel
Ermua of which defendants were the owners, oper
ators, managers or charterers on November 8,
1974 under clean on board bill of lading No. 1304
dated at Antwerp, Belgium, from Antwerp to
Montreal. The shipment was composed of 10 lifts
of 14 pieces each measuring 4" x 4" x 3 /s" x 40 ft.
in length of steel angles and 9 lifts of 12 pieces
each measuring 4" x 4" x 'h" x 40 ft. in length.
One entire lift of 12 pieces of the '/" angles was
not delivered and 12 other pieces of the 1" angles
were also missing, four from each of three lifts.
The total value which is based on weight amounted
to $2,880.78 for which the claim is made together
with interest from the date of arrival of the vessel
at the Port of Montreal which the parties now
agree should be fixed at a rate of 8%.
Defendants invoke and plead the terms of the
Belgium Enactment of the 1924 Brussels Conven
tion with respect to the per package limitation and
the parties agree that this Act is the same as the
Canadian Carriage of Goods by Water Act'
adopting the aforementioned Convention with the
effect of limiting the carrier to an amount of $500
"per package or unit" unless the nature and value
of the goods have been declared by the shipper
before shipment and inserted in the bill of lading
(Article IV 5). The bill of lading described the
numbers of lifts and pieces, giving their weight
also and had a rubber stamp superimposed on it
reading "Total lifts contents unchecked but said to
contain indicated number of pieces, and said to be
of indicated dimensions and weights."
Defendants further plead that the shipment was
properly loaded and stowed and cared for and that
when the vessel arrived in Montreal the shipment
except for one lift was discharged and delivered in
the same apparent order and condition as when
received on board. Defendants have tendered as
payment for the cargo on the missing lift the sum
of $500 plus $275 interest and costs. Defendants
further plead that since the shipment except for
the one lift was discharged in the same apparent
order and condition as when received on board
they are not responsible for any loss or damage
that may have occurred between the time the
merchandise was discharged and the time it was
picked up by the party claiming to be entitled to it,
that plaintiff failed to take delivery within reason
able delay, or to notify the defendants of the
alleged shortage within reasonable delay. The
invoking of the one year limitation to bring action
referred to in the pleadings was abandoned at trial,
defendants conceding that as a result of discus
sions between the parties prior to the institution of
proceedings it was no longer contended that the
action is time-barred.
Two legal issues arise, one being the relationship
between the shipper and the carrier, and the other
the question of whether a $500 limitation applies
to each lift or whether each piece itself is "package
or unit".
Evidence established that the cargo had been
purchased by plaintiff from its parent company
1 R.S.C. 1970, c. C-15.
whose head office is in Hamburg, Germany and
resold to Mutual Steel Corporation in the Province
of Quebec at a price of $23.15 per one hundred
pounds plus an increase of 50¢ a ton billed as an
L.R.S. increase which was explained as resulting
from an agreement with the dock workers. There is
no dispute as to the calculation of the amount of
the claim on a weight basis, and evidence indicated
that the price of $23.15 was the going rate and
market value at the time. The freight had been
prepaid at Antwerp and does not enter into the
claim. The dock receipts when the shipment was
received by Schenker of Montreal, the consignee,
who was plaintiff's agent, on December 9 and 10
indicate that the 10 lifts of 14 pieces each were
duly received although there is a notation that on
one lift the straps were broken, but that only eight
of the nine lifts of 12 pieces each were received
and three of these only contained eight pieces
each.
Evidence further indicates that it is customary
to deliver lifts of steel angles strapped together as
because of their 40 foot length in the present case
they would not be rigid enough to avoid bending
and damage without being strapped, which strap
ping is done by the shipper. Such a lift will weigh
between 2' and 3 tons so the merchandise would
certainly not be easy to steal.
Task Terminals Limited which is an affiliate of
the various Cast companies named as defendants
in its Over, Short and Damage Report indicates
that the discharge was complete on November 25,
1975, and that one lift was short from this ship
ment. No mention was made in it of the missing
pieces from the other lifts as they were not
individually counted. François Lagarrege a traffic
officer at the Montreal Harbour at the time for
Cast, himself entered into and examined the holds
after the unloading and stated that nothing was
left on board. If any individual pieces had come
out of the strapping on a lift and were in the hold
they would have been noted.
Ronald Pilon, manager of insurance claims for
Cast testified that he has seen similar clauses to
the effect that the contents of the lift were
unchecked but said to contain a given number of
pieces on bills of lading in the steel industry, and
this is a common practice of the trade because of
the large volumes of cargo shipped in this lift form
which would make it impractical for the carrier to
count the pieces, and if it had to do so the freight
rates would be too high.
Paragraphs 3 and 4 of Article III of the Rules
Relating to Bills of Lading read as follows:
3. After receiving the goods into his charge, the carrier, or
the master or agent of the carrier, shall, on demand of the
shipper, issue to the shipper a bill of lading showing among
other things,
(a) the leading marks necessary for identification of the
goods as the same are furnished in writing by the shipper
before the loading of such goods starts, provided such marks
are stamped or otherwise shown clearly upon the goods if
uncovered, or on the cases or coverings in which such goods
are contained, in such a manner as should ordinarily remain
legible until the end of the voyage;
(b) either the number of packages or pieces, or the quantity,
or weight, as the case may be, as furnished in writing by the
shipper;
(c) the apparent order and condition of the goods:
Provided that no carrier, master or agent of the carrier, shall
be bound to state or show in the bill of lading any marks,
number, quantity, or weight which he has reasonable ground
for suspecting not accurately to represent the goods actually
received or which he has had no reasonable means of checking.
4. Such a bill of lading shall be prima facie evidence of the
receipt by the carrier of the goods as therein described in
accordance with paragraph 3 (a),(b), and (c).
In the present case the bill of lading more than
complied with the minimum requirement of para
graph 3(b) in that it not only showed the number
of lifts and pieces in each but also the weight,
subject only to the stamped on clause (supra)
indicating the contents were unchecked but said to
contain the indicated number of pieces and the
indicated dimensions and weights.
The effect of putting limiting clauses on bills of
lading is generally undesirable and has been criti
cized in extensive jurisprudence. Much of the
jurisprudence deals with weight however and gen
erally in connection with bulk cargo where there is
no means of ascertaining the quantities short of
actually weighing it, unlike the present case where
it would not be difficult to count the number of
pieces of steel strapped together in a lift, but
merely time consuming, resulting in higher freight
rates, as defendants point out. The question is
whether the shipper by accepting this clause in the
bill of lading has assumed the risk if on delivery
the lifts contain fewer than the indicated number
of pieces. Plaintiff refers to the case of "Patagoni-
er" (Owners) v. Spear & Thorpe 2 in which it was
held at page 61:
In my view the effect of Sect. 9 of the Canadian Water
Carriage of Goods Act is to impose upon the ship an obligation
on demand by the shipper to issue a bill of lading in conformity
with the terms of that section—one (applied to the case of bulk
wheat) stating the quantity or the weight. A clause such as
"said to be" or "weight unknown" is in my view quite inconsist
ent with the terms of this section. It was argued that if the
shipper demanded a bill of lading containing such clauses by
offering it to the ship for signature the provisions of Sect. 9
were avoided. In my view of the section, once a shipper has
demanded a bill of lading the ship is bound to issue one in
conformity with the section and such clauses as "said to be"
and "weight unknown" are nugatory. The fact that the bill of
lading was signed is in itself sufficient evidence in my view that
it was "demanded."
It was concluded that the bills of lading afforded
prima facie evidence of the quantity of wheat
shipped and that no evidence had been called by
the ship owners to rebut that prima facie evidence
so that the Court was obliged to hold that the
indicated quantity was shipped. Reference was
also made to the American case of Spanish
American Skin Company v. MIS Ferngulf, Etc.,
and A/S Glittre 3 , in which the bill of lading stating
the quantity of sheepskins of an indicated total
weight had the rubber stamp imprint "Steamer not
responsible for weight, quality or condition of con
tents". In dealing with the Brussels Convention
clause incorporated into the U.S. Carriage of
Goods by Sea Act which has the same wording as
Article III 3(b) (supra) the Court discussed the
argument that since the requirement was that the
bill of lading show either the number or weight or
both, a bill of lading showing both might be modi-
2 (1933) 47 LI.L. Rep. 59.
3 1957 A.M.C. 611.
fied by reservation as to one, in that case weight,
thus making the bill prima fade evidence only as
to the other, in that case number. After pointing
out that such reservation if permitted is certain to
lessen the value of bills of lading for use in the
financing of commerce, and that the Act
endeavours to provide uniformity by providing a
method for avoiding carrier liability for false infor
mation given by the shipper by not stating it in the
bill the Court concluded the carrier must utilize
that method rather than the general reservation
attempted. The case concluded that recitation of
both the number of bundles and weight in the bill
of lading furnished prima fade proof of receipt by
the carrier of skins of both the number and weight
recited, regardless of the statement contained in
the rubber-stamped imprint on the bill.
Reference was also made to the American case
of George F. Pettinos, Inc. v. American Export
Lines, Inc. 4 in which it was held at pages
1257-1258:
The bills of lading issued by the carrier contain the weights
and description of goods together with the number of packages
and the description of the packages in a column under the
broad heading "Particulars Declared by Shipper." The
respondent contends that this is not such a statement of the
weight as to constitute prima facie evidence of it. I think,
however, that it is.
The Carriage of Goods by Sea Act provides that a carrier
shall issue to the shipper a bill of lading showing among other
things the weight or quantity of the merchandise received and
that, if it has reasonable grounds to believe the weight fur
nished by the shipper to be inaccurate, he may issue the bill of
lading without showing the weight. The Act further provides
that the weight shown on the bill of lading shall be prima facie
evidence of the receipt of such weight and if the information
furnished by the shippers is inaccurate, then the shipper shall
indemnify the carrier against loss. One purpose of the Carriage
of Goods by Sea Act was to enable the consignee to rely on the
facts stated in the bill of lading. The provisions mentioned give
the carrier ample opportunity to protect itself against any
obligation to deliver more cargo than it has received. Having
accepted the goods, the carrier may not avoid the prima facies
of the bill merely by entering weight and quantity as "Particu-
lars Declared by Shipper."
4 1946 A.M.C. 1252.
This again dealt with the weight description of a
cargo of burlap bags containing plumbago. Plain
tiff also referred to three French cases, Benledi,
Cour d'appel d'Aix, 1958 D.M.F. 277, the Can-
tenac, Cour d'appel de Paris, 1964 D.M.F. 16, and
the Banfora, Cour de Cassation, 1964 D.M.F. 206,
all of which refused to give effect to clauses in bills
of lading indicating "weight and condition
unknown" or similar limiting clauses. It was held
that such clauses did not prevent the carrier if in
doubt from counting or weighing the packages to
verify whether the information declared by the
shipper was correct.
Defendants for their part rely inter alia on the
case of Pendle and Rivet, Limited v. Ellerman
Lines, Limited, (1927-28) 33 Commercial Cases
70, dealing with the loss of contents of a case of
textile goods shipped under a bill of lading indicat
ing the quantity and weight but with an imprint
"Weight unknown". Dealing with the argument of
defendant's counsel claiming that the bill of lading
must be looked at in its entirety, Mackinnon J.
states at pages 76-77:
Mr. Dickinson, on the other hand, says that that is only to look
at part of the bill of lading, and that you must take in addition
to that the added words in the body of the bill of lading,
"Weight unknown"; that though in discharging the obligation
under Rule 3 of stating the weight, if the number of packages
had not been stated as well then it might be that he could not
have relied on "Weight unknown," because that would be an
unlawful thing to add, in view of the obligation to state the
weight. But he says, "if I have fulfilled the obligation under
Rule 3 by stating the number of packages, then it is only a
voluntary thing for me to add a statement of the weight; I can
qualify that by saying `Weight unknown.' That addition of
`weight unknown' is not beyond my powers, and `weight
unknown' qualifies and negatives the admission of weights". It
is a very subtle point. On the whole, I am inclined to think that
perhaps Mr. Dickinson is right as regards that; and that the
mere fact that, having said in the bill of lading that he had
received two cases, he has then added the weight, with the
qualification "weight unknown," does not bring him under the
liability under Rule 4 of having that weight treated as prima
facie evidence against him.
Later on page 77 he states:
... but the mate is there to acknowledge the receipt of goods,
and he has authority to do so; and if he chooses to acknowledge
the receipt of cases of a certain weight, I think it certainly
binds the defendants to the extent of being very clear prima
facie evidence against them that they received on board the
ship cases of that weight.
Scrutton on Charter Parties and Bills of
Lading, 18th Edition at page 426 states:
"Either the number, etc." The obligation is alternative.
Therefore if the carrier issues a bill of lading showing both the
number of pieces and the weight, he may qualify the statement
as to weight as, e.g. by the words "weight unknown." Such a
bill of lading will then be prima facie evidence of the number of
pieces but not of the weight.
relying on the Pendle and Rivet case and on the
case of Attorney-General of Ceylon v. Scindia
Steam Navigation Co. Ltd. India [1962] A.C. 60
at page 74.
Defendants also rely on the American case of
Tokio Marine & Fire Insurance Company Ltd. v.
Retla Steamship Company 5 to the effect that a
qualifying clause defining the term "good order
and condition" as applied to steel products is not
contrary to COGSA.
Rust and dampness was noted on loading and
the bill was stamped [at page 91]:
THE TERM "APPARENT GOOD ORDER AND CONDITION"
WHEN USED IN THIS BILL OF LADING WITH REFERENCE TO
IRON, STEEL OR METAL PRODUCTS DOES NOT MEAN THAT
THE GOODS, WHEN RECEIVED, WERE FREE OF VISIBLE RUST
OR MOISTURE. IF THE SHIPPER SO REQUESTS, A SUBSTITUTE
BILL OF LADING WILL BE ISSUED OMITTING THE ABOVE
DEFINITION AND SETTING FORTH ANY NOTATIONS AS TO
RUST OR MOISTURE WHICH MAY APPEAR ON THE MATES' OR
TALLY CLERKS' RECEIPTS.
The shipper did not request a subsequent bill of
lading and the carrier was not estopped from
showing damage of pre-shipment origin. Reference
in this case was made to the Privy Council decision
in Canada and Dominion Sugar Company, Ltd. v.
Canadian National (West Indies) Steamships,
Ltd. [1947] A.C. 46, the judgment stating at page
95:
The only case cited by either party which has considered a
comparable situation is the English decision in Canada and
Dominion Sugar Company Ltd. v. Canadian National Steam
ships Ltd., sup. In that case plaintiff had purchased sugar
relying on a bill of lading. The sugar was found to have been
5 [1970] 2 Lloyd's Rep. 91.
damaged prior to shipment. The ship's receipt, signed by the
chief tally clerk as agent for both the shipper and carrier,
contained the notation "many bags stained, torn and resewn".
This notation did not appear on the bill of lading, which stated,
in the first line, that the goods were "received in apparent good
order and condition". A stamped clause in the margin stated
that the bill of lading was "signed under guaranty to produce
ship's clean receipt". The Privy Council, affirming the Supreme
Court of Canada, held that the bill of lading provided no basis
for estoppel.
After holding that had the statement "Received in apparent
good order and condition" stood alone, the bill would have been
"clean", the Court concluded that the stamped endorsement
qualified the bill, making it
... clear and obvious on the face of the document, and
reasonably conveying to any business man that if the ship's
receipt was not clean the statement in the bill of lading as to
apparent order and condition could not be taken to be
unqualified... .
The facts were quite different from the present
case, however, where there is no indication what
ever that defendant noticed any pieces missing
before issuing the bill of lading.
In most of these cases the issue was one of
condition or weight while in the present case the
issue concerns very heavy and lengthy pieces of
steel and the claim is for the twelve such pieces
missing from three lifts. By their very weight and
dimension it is highly improbable that they could
be stolen and there is no suggestion whatsoever
that they were lost at sea. It may well be, although
there is no evidence whatsoever to this effect, that
when they were strapped together the three lifts in
question contained only 8 pieces each instead of
12. If they had been removed before loading on the
ship, if this were in fact possible without cutting
the straps, the strapping would probably have been
substantially loosened and this would appear evi
dent on inspection, just as the broken strap on one
lift from which no pieces were missing was duly
noted on the National Harbour Board receipt
form. The carrier could then have availed itself of
the concluding clause of Article III 3 (supra) by
refusing to state in the bill of lading the number of
pieces in the lift. While the shortage in the present
case may therefore very well have been attribut
able to the shipper it appears to me that the better
view is that the carrier cannot avoid responsibility
by simply stamping a clause on the bill of lading
"said to contain indicated number of pieces". The
acknowledgment that the shipment was received in
"apparent good order and condition" creates
prima facie proof against the carrier which,
because of the special clause can be rebutted by
evidence indicating that the lifts in question did
not contain the number of pieces which they were
said to contain, but the burden is on defendant to
present such proof. I conclude therefore that in
addition to the claim for the missing lift a claim
can be made for the 12 missing pieces from three
other lifts.
The question of the applicability of the per
package limitation to the lifts in question presents
less difficulty. There has been much jurisprudence
on the matter but perhaps the most pertinent case
is that of Primary Industries Corporation v.
Barber Lines A/S and Skilos A/S Tropic (The
` Fernland") 6 an American case dealing with a
shipment of 25 bundles, each containing 22 tin
ingots strapped together in a bundle. At page 462
reference is made to the definition of "package" in
Black's Law Dictionary (4th ed., 1951) as follows:
Package: A bundle put up for transportation or commercial
handling; a thing in form to become, as such, an article of
merchandise or delivery from hand to hand. A parcel is a small
package; "parcel" being the diminutive of "package". Each of
the words denotes a thing in form suitable for transportation or
handling, or sale from hand to hand . . . . As ordinarily
understood in the commercial world, it means a shipping
package.
The quote goes on to say:
The fact that each bundle was formed by strapping the 22 tin
ingots in the bundle by two metal bands and that the 22 tin
ingots were not completely covered or encased does not render
the bundle any less of a package.
On the same page the judgment of Moore J. in
Aluminios Pozuelo Ltd. vs. S.S. Navigator, 1968
A.M.C. 2532 it was quoted to the effect that:
The meaning of "package" which has evolved from the cases
can ... be said to define a class of cargo, irrespective of size,
shape or weight, to which some packaging preparation for
transportation has been made which facilitates handling, but
which does not necessarily conceal or completely enclose the
goods.
The Court then states [at pages 462-463]:
6 [1975] 1 Lloyd's Rep. 461.
Applying this test to the facts at hand, it would appear that
there are 25 "packages", not 550 "packages", i.e. that each
bundle containing 22 tin ingots constitutes a single "package"
under COGSA.
Also in this connection is another American case
Nichimen Company, Inc., v. M. V. Farland and
AIS Vigra vs. Seaboard, Shipping Co., Ltd.'
which held that a strapped coil of steel was a
package whether wrapped or unwrapped.
In another American case Standard Electrica,
S. A. v. Hamburg Sudamerikanische Dampfschif-
fahrts-Gesellschaft, and Columbus Lines, Inc. 8 a
shipment of six cardboard cartons each containing
40 television tuners strapped to one pallet was held
to constitute a package. At page 885 it is stated:
... it was the shipper and not the carrier who chose to make up
the cartons into a pallet, apparently for the reasons of greater
convenience and safety in handling. The number of separate
units received from the shipper is what is considered for the
purposes of the bill of lading.
Plaintiff contended that American jurisprudence
must be used with caution since the wording of the
corresponding section in the American Act is "in
case of goods not shipped in packages, per custom
ary freight unit" while the wording in this country
is simply "per package or unit". I do not believe
that on the facts of the present case any distinction
needs to be made however. Although the evidence
indicates that the strapping into lifts is the custom
ary way of shipping steel such as that with which
we are concerned it appears clear to me that such
a lift with the number of pieces strapped together
for shipment is a package, whether or not this is
the customary way of packaging same for ship
ment. The individual pieces of steel cease to be
units when they are so strapped together into a lift.
Plaintiffs total claim is for $2,880.78 for the
entire lift of 12 pieces not delivered, and for the 12
separate pieces from 3 other lifts.
A lift of 12 pieces of the size of those missing is
therefore worth $1,440.78, and the 4 pieces miss
7 1972 A.M.C. 1573.
8 1967 A.M.C. 881.
ing from a lift of 12 would be worth 1/3 of this or
$480.13. Since I have found that an entire lift is a
package and the claim is limited to $500 for it we
have the unusual situation that plaintiff is entitled
to only $500 for the entire lift not delivered but to
$1,440.78 for the 12 missing pieces from 3 other
lifts. Had more than 4 pieces been missing from
any one lift the question would have arisen as to
whether the claim for the pieces missing from that
lift should be limited to $500, the maximum allow
able for the entire lift, considered as a package,
but as this question does not arise in the present
case I make no finding with respect to it.
Judgment will therefore be rendered in favour of
plaintiff for $1,940.39 with interest at 8% from
arrival of the vessel in Montreal on November 19,
1974 and costs.
Defendants have tendered the sum of $500 plus
$275 interest and costs for the missing lift. An
order will be made directing payment out of Court
of this amount with any accrued interest thereon
in partial satisfaction of the judgment.
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.