T-2735-73
Colonial Yacht Harbour Ltd. (Plaintiff)
v.
The Owners of the Ship Octavia, Scanlake Line
and Ceres Stevedoring Company Ltd. (Defend-
ants)
Trial Division, Dubé J.—Montreal, March 14;
Ottawa, April 6, 1979.
Maritime law — Torts — Bill of lading — Himalaya clause
- In action for damages in tort, allegation that stevedoring
firm was negligent — Defendant stevedoring firm invoking all
rights and immunities of bill of lading and its Himalaya
clause — Whether or not Himalaya clause valid — Whether
or not stevedoring firm may benefit from contract to which it is
not a party.
This is an action in tort for damages to a yacht dropped into
the hold of the M.V. Octavia at Montreal, while en route from
Copenhagen to Toronto. It is alleged that the stevedoring
company is "liable for damages in tort in that its employees
employed negligent and reckless methods in handling plaintiff's
yacht and used defective gear and equipment". The stevedoring
firm expressly invokes for its benefit all the clauses of non-
responsibility and the rights and immunities in the bill of
lading, and in the Himalaya clause in particular. This defence
brings up the whole issue of the validity of the Himalaya clause
and whether a stevedoring firm may benefit from immunities
contained in a bill of lading to which it is not a party.
Held, the action is dismissed. The doctrine of res ipsa
loquitur applies; the stevedores' negligence caused the accident.
In Marubeni America Corp. v. Mitsui O.S.K. Lines Ltd.,
Marceau J. deals with a factual situation similar to the instant
case with respect to a Himalaya clause in the bill of lading and
an identical clause in the agreement between the carrier and
the stevedoring firm providing that the carrier will include the
stevedoring firm as an express beneficiary of all immunities
provided in the bill of lading. That case is being appealed. Until
it is maintained or reversed the Court proposes to follow it in
the interest of uniformity and certainty. The Court does not
accept plaintiff's argument that the stevedoring firm can only
be benefited by the Himalaya clause to the extent of its
performing the carrier's obligations to carry the yacht "on
deck", as stated in the bill of lading, and not in the hold.
Further, plaintiff cannot claim that the Hague Rules do not
apply because the yacht was deck cargo to Montreal, and only
in the hold from there to Toronto. If the carrier starts the
voyage with the goods on deck and in the course of the voyage
restows the goods under deck, the result appears to be that the
Hague Rules apply from the start of the voyage.
Marubeni America Corp. v. Mitsui O.S.K. Lines Ltd.
[ 1979] 2 F.C. 283, applied.
ACTION.
COUNSEL:
Marc de Man for plaintiff.
Marc Nadon for defendants.
SOLICITORS:
Stikeman, Elliott, Tamaki, Mercier & Robb,
Montreal, for plaintiff.
Martineau, Walker, Allison, Beaulieu,
MacKell & Clermont, Montreal, for defend
ants.
The following are the reasons for judgment
rendered in English by
DuBÉ J.: This is an action for damages to a
yacht accidentally dropped into hold no. 1 of the
carrier vessel M.V. Octavia at the Port of Mon-
treal on November 6, 1972. The yacht is a Coronet
Deep Sea Cruiser, 32 feet in length, with twin
Volvo Penta aquamatic engines, weighing 11,110
lbs.
The action was launched against the owners of
the Octavia, Scanlake Line and Ceres Stevedoring
Company Ltd., but the plaintiff discontinued
before the trial its action against the first two
defendants. It has been agreed between the two
remaining parties that the damages to the yacht
total $15,700.
The yacht was placed on board the vessel
Octavia on October 10, 1972 at the Port of Copen-
hagen, Denmark, for shipment to the plaintiff in
Toronto, Ontario. The bill of lading, issued on
October 12 by Scanlake Line, states that the yacht
is to be "shipped on deck".
The yacht was in fact resting on deck at star
board side of hatch no. 1 when the stevedores
arrived on board in Montreal on November 3 to
discharge the cargo destined for that Port. On the
fourth day of unloading, at the request of the
officers of the vessel, the stevedores attempted to
lower the yacht down into hatch no. 1. As the
yacht was suspended over the hatch it rolled,
slipped out of the slinging straps and fell down into
the hold.
In paragraph 6 of its statement of claim plaintiff
alleges that the defendant Ceres Stevedoring Com
pany Ltd. is "liable for damages in tort in that its
employees employed negligent and reckless meth
ods in handling plaintiff's yacht and used defective
gear and equipment".
When the stevedores approached the yacht, they
noticed that it was resting on a steel cradle. It
seems that one or two of the ropes attaching the
yacht to the cradle were unfastened or broken.
There were no markings on the yacht to show
where, or how, the slinging should be done. They
fastened the detached ropes of the cradle, then
passed two nylon straps under the hull of the yacht
and attached them to two spreaders. The two
spreaders were linked by separate wires to the
cargo block which was suspended under the top
ping lift of the derrick of the Octavia.
The defendant stevedoring firm usually operates
its own crane from the wharf to discharge general
cargo, but the captain decided to use the ship's
derrick to move the yacht, it being a special lift.
The derrick was manned by one of the ship's crew,
the nylon slinging straps and the spreaders were
provided by the stevedores. The yacht was lifted
about one foot from the deck and, according to the
stevedores, the officers of the vessel expressed their
satisfaction and proceeded to hoist the lift above
the hatch. Suddenly the yacht capsized, backed
out of the straps and dropped upside down on the
'tween-decks.
It does appear from the evidence that nylon
straps have been in general use in the Port of
Montreal for several years. They are at least as
strong as the canvas straps previously in use and
less costly. The nylon fabric however is much
smoother, thus more slippery.
In his expert evidence Sunil Bhandari, a marine
surveyor with considerable experience in loading
and unloading heavy cargo, advises against the use
of two separate spreaders to hoist heavy lifts. He
described to the Court how such a loose basket
made of two separate spreaders makes it difficult
to find the exact centre of gravity of the load,
particularly so when dealing with a cargo of
unbalanced configuration, such as a yacht. If the
exact centre of gravity is not established, then the
heavier end of a lift, such as the stern of a yacht,
especially with the added weight of two engines,
will have a tendency to back out of such a basket
and to fall. He strongly recommends the use of a
rectangular, or box-type, basket made up of a
rectangular steel frame with four independent
straps. When shown a photograph of the steel
cradle on which the yacht was sitting he had no
hesitation in recommending that type of a steel
structure, provided it were strong enough for the
weight of the intended lift. (According to a wit
ness, securing points were fitted at each corner of
the cradle from which lifting wires could have
been shackled.)
It is common ground that this type of rectangu
lar basket is being used in the Port of Montreal to
lift automobiles. They are not being used to lift
yachts because the latter tend to vary in size and a
full line of such frames is not kept in stock.
Still according to the expert, if you attach nylon
straps to two loose spreaders, you obtain a slippery
basket which might conceivably drop a heavy
object with the configuration of a yacht. Although
that yacht is rather squarish at the stern it is
rounded and curvy at the bow, and nylon could slip
on the smooth fiberglass hull.
There is no evidence that the derrick was oper
ated in a negligent way by the vessel crew, so it
remains for the stevedores to explain why the lift
dropped. It is true that they had been asked to
move the yacht by the captain and that he, or his
officers, supervised the manoeuvre in a general
way. But the stevedores provided their own gear,
from the block tackle down, and were in control of
that phase of the operation. The fact that the
stevedores in this instance were following a general
practice in the Port of Montreal is not sufficient
justification if the practice is not consistent with
provident precautions against a risk that should be
foreseen by those involved in that practice.'
' Vide Winrob v. Street and Wollen (1959) 28 W.W.R.
(N.S.) 119.
Again, the action against the stevedoring firm is
not in contract but in tort, or for a "delft" or
"quasi-délit" under articles 1053 and 1054 of the
Quebec Civil Code. Those articles provide that
every person is responsible for the damage caused
by his fault to another, whether by positive act,
imprudence, neglect or want of skill; a person is
responsible not only for the damage caused by his
own fault, but also for that caused by the fault of
persons under his control and by things he has
under his care. When in the normal course of
events something happens which ought not to
happen, causing damage to others, and it is appar
ent that the accident would not have happened if
there had been no negligence, it is for the author of
the accident to show that something else besides
his action caused the damage. 2
The ancient doctrine of res ipsa loquitur would
apply here. The stevedores were in charge of sling
ing the yacht: the yacht having escaped their
straps, it is for them to explain why. In my view,
they have not done so. Their negligence, of course,
is not gross, and quite understandable as they were
following the local practice; nevertheless, it caused
the accident. Under the circumstances they were
negligent in their choice of gear for that type of
lift.
In its defence the stevedoring firm expressly
invokes for its benefit all the clauses of non-
responsibility and the rights and immunities con
tained in the bill of lading and more specifically in
the second paragraph of clause 3 of the bill. The
clause is titled "Identity of carrier and Himalaya
clause". The second paragraph thereof provides as
follows:
All defences under this bill of lading shall inure also to the
benefit of the Carrier's agents, servants and employees and of
any independent contractor, including stevedores, performing
any of the Carrier's obligations under the contract of carriage
or acting as bailee of the goods, whether sued in contract or in
tort.
This defence brings up, of course, the whole
issue of the validity of the Himalaya clause in a
bill of lading. That is, whether a stevedoring firm
may benefit from immunities contained in a bill of
lading to which it is not a party.
2 Vide The Ottawa Electric Company v. Crépin [1931]
S.C.R. 407.
Tetley's Marine Cargo Claims devotes a full
chapter 3 to the vexing subject with an overview of
the jurisprudence in the matter in various shipping
countries of the world. My colleague Walsh J. in a
1977 decision 4 reviews the leading decisions on the
Himalaya clause, but on the facts of the case
before him does not make any general conclusion
as to whether a properly worded Himalaya clause
can extend its protection to stevedores against
their tortious conduct.
The more recent decision' of my brother Mar-
ceau J. deals with a factual situation somewhat
similar to the instant case with respect to a Hima-
laya clause in the bill of lading and an identical
clause 7 in the agreement between the carrier and
the stevedoring firm. Clause 7 in both agreements
provides that the carrier will include the stevedor-
ing firm as an express beneficiary of all immuni-
ties provided in the bill of lading. The learned
Judge concluded [at page 301] that "legal analysis
not only permits but requires that the clear intent
of the parties be given effect".
In both cases the clause reads as follows:
7. Responsibility for Damage or Loss. It is expressly under
stood and agreed that the Contractor's responsibility for
damage or loss shall be strictly limited to damage to the vessel
and its equipment and physical damage to cargo or loss of
cargo overside through negligence of the Contractor or its
employees. When such damage occurs to the vessel or its
equipment or where such loss or damage occurs to cargo by
reason of such negligence, the vessel's officers or other repre
sentatives shall call this to the attention of the Contractor at
the time of accident. The Company agrees to indemnify the
Contractor in the event it is called upon to pay any sums for
damage or loss other than as aforesaid.
It is further expressly understood and agreed that the Com
pany will include the Contractor as an express beneficiary, to
the extent of the services to be performed hereunder, of all
rights, immunities and limitation of liability provisions of all
contracts of affreightment, as evidenced by its standard bills of
lading and/or passenger tickets, issued by the Company during
the effective period of this agreement. Whenever the customary
rights, immunities and/or liability limitations are waived or
omitted by the Company, as in the case of ad valorem cargo,
the Company agrees to include the Contractor as an assured
3 Marine Cargo Claims, (2nd ed.), c. 33 "The Himalaya
Clause—Heresy or Genius?"
° Circle Sales & Import Ltd. v. The "Tarantel" [1978] 1
F.C. 269.
Marubeni America Corp. v. Mitsui O.S.K. Lines Ltd.
[1979] 2 F.C. 283.
party under its insurance protection and ensure that it is
indemnified against any resultant increase in liability.
The Mitsui O.S.K. decision is being appealed.
Until it is maintained or reversed I propose to
follow it in the interest of uniformity and certain
ty. It is hoped that a decision from the highest
Tribunal will eventually provide a solution to the
problem before it reaches himalayan proportions.
The stevedoring firm would therefore benefit from
all immunities and limitations of liabilities pro
vided in the bill of lading, including clause 17
which limits the amount payable as follows:
17. Amount of limitation. The responsibility of the Carrier
shall in no case, whether governed by the Hague Rules or not,
exceed the amount of kr 1.800 (in paper) per package or other
unit of the goods.
It is common ground that the Danish legislation
giving effect to the 1924 Brussels Convention
relating to bills of lading is similar to the Canadi-
an Carriage of Goods by Water Act, R.S.C. 1970,
c. C-15, except for the amount of limitation ($500
under the Canadian Act). It is also agreed that the
instant bill of lading is governed by Danish
legislation.
In its statement of defence the stevedoring firm
specifically invokes the provisions of clause 17 and
has actually paid into Court under Rule 441 the
sum of Canadian $257.40 (the equivalent of kr
1.800) plus interest and costs for a total of
$602.41.
Learned counsel for the plaintiff avers that pur
suant to the exact wording of clause 2 of the bill of
lading, the Himalaya clause would only benefit the
stevedores when "performing any of the Carrier's
obligations under the contract of carriage", and
the clause being a limitation provision must be
given strict interpretation. He argues that the car
rier's obligations were to carry the yacht "on
deck", as stated on the bill of lading, not in the
hold. I cannot accept that proposition. The obliga
tions of a carrier during the voyage are many.
Under the Carriage of Goods by Water Act, he
"shall properly and carefully load, handle, stow,
carry, keep, care for and discharge the goods
carried" (Article III, Rule 2). These obligations do
include the moving of goods on and below deck,
but also the duty to handle them properly and
carefully.
Finally, plaintiff claims that the Hague Rules
do not apply to the yacht because it was "shipped
on deck" and that constitutes an exception under
Article I(c) which defines "goods" as follows:
(e) "goods" includes goods, wares, merchandise, and articles of
every kind whatsoever, except live animals and cargo which by
the contract of carriage is stated as being carried on deck and is
so carried;
The instant bill of lading of course states on its
face that the yacht is "shipped on deck" and so it
was, at least as far as Montreal. Such a statement
on the face of the bill would serve as a warning to
consignees that the goods were being shipped as
deck cargo and not subject to the Rules. 6 But if
such a consignment of goods is in fact carried
partly on deck and partly under deck, and the
contract is not severable, the Rules would probably
apply to the whole contract.' If the carrier starts
the voyage with the goods on deck and in the
course of the voyage restows the goods under deck,
the result appears to be that the Rules apply from
the start of the voyage. 8 The port of discharge for
the yacht was Toronto and the evidence is that it
completed the voyage from Montreal to Toronto
below deck, albeit in a damaged condition. In any
event, the two clauses which limit the liability of
the stevedores are not from the Hague Rules but
from the bill of lading and the agreement between
the carrier and the stevedoring firm.
Judgment therefore for plaintiff against defend
ant Ceres Stevedoring Company Ltd. for the
amount paid into Court plus interest at the rate of
8% from the date of payment and Court costs to
defendant Ceres from the date of payment into
Court.
6 Svenska Traktor Aktiebolaget v. Maritime Agencies
(Southampton) LD. [1953] 2 Q.B. 295.
7 The "Makedonia" [1962] 1 Lloyd's Rep. 316.
8 Scrutton on Charter Parties, (18th ed.) 419.
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