Robert Guadano (Plaintiff)
v.
Hamburg Chicago Line, G.m.b.h. and Kerr
Steamships Limited, and the owners of the ship
S.S. Cap Vincent (Defendants)
Trial Division, Urie J.—Montreal, P.Q., June 22;
Ottawa, July 3, 1973.
Maritime law—Goods in containers carried on deck—
Clause in bill of lading authorizing—Goods damaged—Onus
of proving negligence on claimant—Hague Rules, Arts. III
Rule 2, IV Rule 2.
Furniture, antiques, porcelain and crystal were shipped in
containers from Antwerp to Montreal in containers lashed
on the Cap Vincent's deck, which was especially fitted for
containers. The goods were covered by a clean bill of lading
which contained a clause declaring that goods in containers
might be carried on deck. The goods, which were improperly
packed, were found damaged when unpacked.
Held, an action for damages must be dismissed. In view of
the clause authorizing deck storage the carrier was entitled
to carry the containers on deck, which on the evidence was
a normal place for carriage of goods. Accordingly, the
carrier was relieved from liability under Art. IV Rule 2 of
the Hague Rules for "insufficient packing" in the absence of
negligence (Art. III Rule 2), and plaintiff, upon whom the
onus lay, had not proved negligence.
ACTION for damages.
COUNSEL:
Ian Harris for plaintiff.
Peter Davidson for defendants.
SOLICITORS:
Ian Harris, Montreal, for plaintiff.
Brisset, Reycraft and Davidson, Montreal,
for defendants.
URIE J.—This is an action brought by the
plaintiff as the holder of a bill of lading for
value against the defendants, Hamburg Chicago
Line, G.m.b.h., the charterer of the ship S.S.
Cap Vincent, and the owners of the said ship.
At the trial it was agreed by counsel for the
parties that the action as against the defendant,
Kerr Steamships Limited, was to be dismissed.
The plaintiff claims damages against the two
defendants by reason of injury to the plaintiff's
goods in two containers which were shipped
under a bill of lading dated at Antwerp, Bel-
gium, on or about June 30, 1970. The contents
of the containers in question comprised por
celain and crystal antiques, carpets, antiques
and furniture. The containers and their contents
were delivered from Ghent, Belgium to Ant-
werp, Belgium by road in two different trucks
on June 19, 1970. It was agreed by the parties
that the transportation from Ghent to Antwerp
was executed without any incident on the road.
At Antwerp the containers were placed on the
pier pending the loading on to the S.S. Cap
Vincent.
The defendants are acknowledged to be
common carriers by water for hire who under
took to carry the shipment to the plaintiff in
Montreal, Canada on the S.S. Cap Vincent
which is a general cargo vessel capable of carry
ing approximately 7000 tons of cargo but which,
on the trip in question, carried cargo weighing
only about 2200 tons.
The two containers in question were stowed
on deck midships or approximately abreast of
number 2 hatch. Upon leaving Antwerp the
vessel visited Bremen and Hamburg and at each
of these ports both loaded and discharged cargo.
It then proceeded to Montreal where it
arrived 13 days after leaving Hamburg. The
Captain, Ulrich Wilken, whose testimony was
taken by way of examination prior to the trial,
testified that the weather during the voyage was
not extraordinary, although the ship did encoun
ter some bad weather and experienced normal
winds, the highest velocity of which was about
force nine. The ship was rolling and pitching
and it was shipping water during the trip. The
waves were normal for the type of weather
encountered.
The Captain further testified that the ship was
"tender", which expert witnesses, called by
both the plaintiff and defendants, subsequently
defined as meaning that the ship's movements
were easy, comfortable and gentle, notwith
standing the heavy weather and was in part at
least occasioned by the fact that the vessel was
lightly laden and was riding fairly high out of
the water. Captain Hayes, a witness called by
the defendants, agreed that the forces at work
on the containers of a "tender" ship would be
less than if the ship was "stiff".
The testimony indicated that there were 23
containers on deck, including the 2 which are
the subject matter of this action and Captain
Wilken testified that the reason they were on
deck, notwithstanding the fact that the holds
were fairly empty, was because the ship had
fittings only on deck for the containers. If con
tainers were to be stowed in the hold, then there
would have to be extra lashings which were
unnecessary on deck. He could not recall
whether or not the containers had to be shifted
at any time during the loading or discharging of
cargo at Bremen and Hamburg.
The bill of lading for the cargo in question
was a clean bill of lading, meaning that there
were no notations relating to damage to the
goods or the location of the containers being on
deck and, so far as can be ascertained, were
delivered damage free to the port at Antwerp. It
was agreed that there were no untoward inci
dents indicating that the contents of the contain
ers could have been damaged during unloading
or inland transport at the Port of Montreal.
When the containers were opened at the Port of
Montreal before any of the contents were
removed, it was discovered that there had been
breakages to the contents of each container and
there were chips of wood and ormolu on the
bottom of the containers. The furniture in the
containers had apparently been wrapped in
waterproof paper and that paper was torn.
Evidence led by the plaintiff indicated that
the porcelain and crystal in the containers had
been packed in cartons and were not damaged,
the damage being solely to the antiques and
furniture which had been wrapped in paper. It
was stated that the method of packing used was
normal for freight of this kind and one of the
plaintiff's witnesses, Bernard Keegan the claims
adjuster for a moving company, testified that in
his opinion, the containers were properly
packed, because of the heavy waterproof paper
and because the furniture was tightly encased in
the containers.
Captain George Hayes, a marine surveyor
with twenty-five years' experience in that
profession as well as twenty years as a seafarer,
testified that in his expert opinion containers
with valuable furniture such as this ought not to
have been placed on deck in an exposed posi
tion but ought to have been placed below in
Number 1 hold which was practically empty, or
some other empty space below deck. He stated
that containers on deck which were awash could
be subject to impact forces from the waves
which would affect the contents of the contain
ers. In addition, since the containers were con
siderably above the centre of gravity of the
ship, they would be subject to greater accelera
tion and deceleration forces during the rolling of
a ship in heavy seas than if the same containers
were stowed in the ship's hold. He also testified
that lashings of deck cargo must be checked
very regularly because they can work loose or
break as a result of the impact forces of the
water. Loose lashings increase the forces on the
goods in the containers. The ship's log indicates
that the lashings were checked from time to
time but does not indicate whether or not it was
on a regular basis.
Evidence submitted showed that there was
little or no damage to the containers other than
scratches and dents. It was agreed by the parties
that the containers had wooden linings over
which was affixed corrugated cardboard but the
parties could not agree on whether or not the
total construction of the containers was of wood
or metal but I do not believe that anything turns
on the absence of this information.
Captain Murdoch Matheson was called by the
defendant as its expert marine surveyor and he
disagreed with Captain Hayes' opinion that the
containers ought to have been placed below
deck. He felt that with a "tender" ship, the
impact forces and the acceleration or decelera
tion would be very little more severe than if the
containers had been stowed below deck. He
stated that, in his opinion, where there are con
tainer fittings on deck and none in the hold, the
preferable place to stow containers would be
where the studs for securing the containers are
located, in this case on the deck. If, on the other
hand, there had been studs in the hold but not
on the deck, or as well as on deck, then it would
be preferable for the containers to be placed in
the hold. From his experience as an adviser on
overseas packing as well as in his capacity as a
marine surveyor, he felt that the packing used
for the furniture, namely waterproof paper, was
not adequate. Moreover, he felt that anywhere
from 20 to 30 per cent of the damage to the
furniture was old and did not represent damage
which was incurred during the voyage. Further
more, he disagreed with Captain Hayes that
Number 1 hold would be a preferable place for
stowage of the containers in question because,
in his opinion, being closer to the bow of the
vessel there would be more pounding in heavy
seas and this, therefore, would be an area in
which one might expect impact damage. That
hold, in his opinion, should be kept for heavy-
lift cargo which could be properly secured.
Captain Matheson did not see the containers
when the goods were still in them since they had
been placed on the floor of the warehouse by
the time he was called to examine the goods for
damage. He asked to see the packing and was
shown corrugated cardboard, which he under
stood had been on the inside walls of the con
tainers, wrapping paper and some frames. So far
as he was aware there were no boxes in which
furniture could have been contained inside the
container.
The principle relating to the stowage on deck
is concisely stated in Scrutton on Charterparties
17 ed. p. 145:
Goods are to be loaded in the usual carrying places.
The shipowner or master will only be authorised to stow
goods on deck: (1) by a custom binding in the trade, or port
of loading, to stow on deck goods of that class on such a
voyage; or (2) by express agreement with the shipper of the
particular goods so to stow them.
The effect of deck stowage not so authorised will be to set
aside the exceptions of the charter or bill of lading and to
render the shipowner liable under his contract of carriage
for damage happening to such goods.
If by his bill of lading the shipowner is authorised to carry
either under deck or on deck, he is not bound to inform the
shipper that he is going to carry on deck, so as to enable the
latter to insure his goods as deck cargo.
In Svenska Traktor Aktiebolaget v. Maritime
Agencies [1953] 2 All E.R. 570, Pilcher J. [at
page 572] had the following comments to make
with respect to the stowage of cargo on deck:
The policy of the Carriage of Goods by Sea Act was to
regulate the relationship between the shipowner and the
owner of goods along well-known lines. In excluding from
the definition of "goods" the carriage of which was subject
to the Act, cargo carried on deck and stated to be so carried,
the intention of the Act was, in my view, to leave the
shipowner free to carry deck cargo, on his own conditions
and unaffected by the obligations imposed on him by the
Act, in any case in which he would, apart from the Act, have
been entitled to carry such cargo on deck, provided of
course, that the cargo in question was, in fact, carried on
deck and that the bill of lading covering it contained on its
face a statement that the particular cargo was being so
carried. Such a statement on the face of the bill of lading
would serve as a notification and a warning to consignees
and indorsees of the bill of lading to whom the property in
the goods passed under the terms of s. 1 of the Bills of
Lading Act, 1855, that the goods which they were to take
were being shipped as deck cargo. They would thus have
full knowledge of the facts when accepting the documents
and would know that the carriage of the goods on deck was
not subject to the Act. If, on the other hand, there was no
specific agreement between the parties as to the carriage on
deck, and no statement on the face of the bill of lading that
goods carried on deck had in fact been so carried, the
consignees or indorsees of the bill of lading would be
entitled to assume that the goods were goods the carriage of
which could only be performed by the shipowner subject to
the obligations imposed on him by the Act. A mere general
liberty to carry goods on deck is not, in my view, a state
ment in the contract of carriage that the goods are, in fact,
being carried on deck. To hold otherwise would, in my view,
do violence to the ordinary meaning of the words of art. I(c).
I, accordingly, hold that the plaintiffs' tractors were being
carried by the defendants subject to the obligations imposed
on them by art. III, r. 2, of the Act.
The bill of lading expressly stipulated that the
contract of carriage which it evidenced was
subject to all of the terms and conditions of the
Hague Rules which have been embodied in
statutory enactments in various jurisdictions,
including the United Kingdom under the title
Carriage of Goods by Sea Act, referred to in the
Svenska (supra) judgment. Under ,those rules
Article I(c) defines goods as follows:
"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; ... [emphasis added].
The bill of lading does not set out on its face,
however, a statement that the cargo was to be
carried on deck and there is no proof that the
plaintiff was aware that it was to be so carried.
In fact, the evidence which was adduced on
behalf of the plaintiff was that he was not so
aware although the plaintiff himself did not tes
tify. However, on the back of the bill of lading
under the heading "Conditions of Carriage",
clause 6 reads as follows:
6. (Deck Cargo and Live Stock).
Carrier is entitled to stow goods on deck such stowage on
deck being at the risk of the Merchants Shipper's approval
of the original or subsequent stowage on deck shall be
deemed to be given by acceptance of the Bill of Lading.
Deck cargo and livestock shall be received, stowed, carried
and discharged at the risk of the Merchants. Carrier shall in
no event be liable for loss or damage not even if caused by
unseaworthiness or inefficiency of the ship or wilful or
negligent conduct of the crew, agencies or other servants of
the Carrier.
It is mutually agreed that goods shipped under this Bill of
Lading and stowed in containers may be carried on deck and
shall for purposes of General Average be treated as to be
stowed under deck. [Emphasis added.]
Counsel for the defendants relies on this
so-called "liberty clause" as entitling the
defendant carrier to stow the goods in question
on deck and in this connection he relies on the
Svenska case (supra) as supporting his proposi
tion. He points out that in that case there was
no evidence that the consignees agreed to stow-
age of the cargo therein on deck nor was there
any notation on the face of the bill of lading that
such was the case.
The general proposition for the stowage of
goods on decks is that they ought not to be
carried on deck if they are there exposed to a
greater risk than when stowed in the usual
carrying part of the ship unless the shipper has
assented to their being so carried or unless a
custom to carry that way exists in the particular
trade. See Carver on Carriage by Sea (12th ed.)
London 1971, vol. 2 pp. 604 et seq.:
But this appears to be a question of fact in each case; and
having regard to the manner in which steamers are now
commonly built, it cannot perhaps be said that cargo must
always be below the main deck in order to be in the ordinary
loading space of the ship. [Emphasis added.',.
The author, in a footnote at page 602, refers
to the case of The Neptune (1867) 16 L.T. 36,
wherein it was stated that
Where the vessel belonged to one of a class constructed
with the object of carrying the goods on deck, under cover
of a hurricane deck, it was held in the U.S. that shippers
must be deemed to have consented to their being so stowed.
[Emphasis added.]
It would seem that this may well support the
proposition that in modern ships built or recon
structed to carry containers on deck, a "usual
carrying place" on such ship is on the ship's
deck.
The defendants argued that clause 6 of the
Conditions of Carriage on the back of the bill of
lading provides them with the authority for the
carriage of containers on deck. It will be noted
that the second sentence of clause 6 specifically
states that the parties have mutually agreed that
the goods shipped under the bill of lading and
stowed in containers "may be carried on deck".
It was argued, therefore, that subject to the
requirements of compliance with Article III,
Rule 2, the defendants had the right to ship
containers on deck notwithstanding the failure
to note on the face of the document that the
goods were to be carried in containers on deck.
In this connection one has to consider whether
or not the deck can be described as "the usual
carrying part of the ship". In this case the
evidence adduced indicates that there had been
installed on the deck of the S.S. Cap Vincent
fittings to hold containers and in my view,
therefore, it can be said the deck then was a
normal place for the carriage of goods. A forti-
ori in the case of a ship which has no fittings for
containers below deck, as was the case in the
S.S. Cap Vincent, the deck surely must be con
sidered a normal place for the carriage of
containers.
If the above reasoning is correct, then there
was an express agreement with the shipper to
stow the goods on deck with the result that the
exceptions set forth in Article IV, Rule 2 limit
ing the carrier's responsibility from loss or
damage can be used as a defense to an action
for damages by the carrier. In this connection
the defendants have pleaded and led evidence to
indicate that there had been insufficient packing
for the furniture in the containers. Article IV
Rule 2 of the Hague Rules is incorporated in the
bill of lading as above stated and paragraph (n)
thereof releases the carrier from liability for
loss arising from "insufficient packing". How
ever, the exceptions referred to therein will not
protect the defendants if negligence be proved.
That is, there may be a fundamental breach of
contract of carriage entitling the shipper or con-
signee to damages, notwithstanding the improp
er packing, if the defendants have failed to
comply with Article III, Rule 2 to "properly and
carefully ... stow ... care for and discharge
the goods carried".
What then is the evidence in this case of
failure to so comply with Rule 2? It consists
solely of the fact that when the containers were
opened some of the goods were damaged with
out any obvious explanation as to the reason
therefor. The onus for proving that the contain
ers had been properly stowed and cared for
rested upon the defendants after the plaintiff
proved that his goods were in a damaged state
when discharged. Silver v. Ocean S.S. Co.
[1930] 1 K.B. 416 at 435. From this it is appar
ent that once the shipper proves that the goods
had been damaged during shipment the onus
shifts to the carrier to bring the cause of damage
specifically within Article IV, Rule 2. If the
plaintiff wishes to defeat that plea by proving
negligence, the onus is on the plaintiff to do so.
See Carver on Carriage by Sea 12th ed. vol. 1, p.
267. The defendants take the position that they
were not guilty of any negligence, that the
approximate cause of the damage was the fail
ure of the plaintiff properly to pack his goods
and seek to bring themselves within Rule 2(n) of
Article IV. In support of this contention they
point to the evidence of Captain Matheson who
testified that in his view there was definitely
insufficient packing. On the other hand, the
evidence of f Mr. Keegan for the plaintiff was to
the effect that the packing for the furniture was
the type of packing normally used for goods of
this kind in containers.
Captain Matheson struck me as a careful and
reliable expert. On the other hand, I did not feel
the same confidence in Mr. Keegan's testimony,
perhaps because he had a personal interest in
the outcome of the litigation to the extent of
some investment which he had in the original
cargo, the extent of which investment he did not
disclose. I am not suggesting for a moment that
he was a dishonest witness but I felt that his
independence was perhaps prejudiced by the
fact that he did have the personal interest to
which I refer. That being the case, I accept
Captain Matheson's evidence that there was
insufficient packing and having done so it would
thus appear that the onus of proving improper
stowage on the part of the defendants now
shifts again to the plaintiff.
The evidence which they adduced in that con
nection was through their expert witness, Cap
tain Hayes, who, as previously stated, testified
that in his view cargo of this nature ought to
have been placed below deck where it would
not be subjected to the impact forces of waves
striking the containers and to the acceleration
and deceleration to which the containers would
be subjected during the rolling of the ship to a
greater extent on deck than below deck since
the arc of the roll would be greater the higher
above the centre of gravity of the ship that the
cargo sat. Because the arc was greater and
because the time elapsed in traversing the dis-
tance from one extremity of the arc to the
upright position or the other extremity of the
arc was the same irrespective of the location of
the cargo in the ship, the forces of acceleration
and deceleration would be greater the higher the
cargo sat on the ship. On these two bases and
the fact that the defendants knew, or ought to
have known, of the possibility of encountering
heavy seas in the north Atlantic at that season
of the year, the plaintiff rested its case for
breach of contract by the defendants in their
failure to "properly and carefully ... stow .. .
care for and discharge the goods carried" as
required by Article III Rule 2 quoted above.
I am unable to agree with this argument and
accept the evidence of Captain Matheson that
the stowage was proper in view of the fact that
the goods were shipped by container apparently
in an undamaged condition and containers
should be placed where the container fittings
were situated. While the defendants knew that
the containers enclosed fragile goods they had
no obligation to examine the packing to ensure
that it was properly done, even if they physical
ly were able to do so, and in my opinion were
entitled to expect that the shipper would ensure
that valuable, fragile goods would be packed to
withstand the rigours of north Atlantic travel
regardless of where the containers were stowed.
Since, in my opinion, the goods were not
properly packed and the stowage was in a usual
carrying place, the plaintiff is not entitled to
recover damages for the losses sustained during
the voyage. I therefore dismiss the action with
costs.
I should, however, assess the damages. The
plaintiff claimed damages totalling $4109.97.
The evidence proving his loss was somewhat
less than satisfactory. Among the deficiencies
was any evidence relating to the value of the
contents of the containers. Counsel for the
defendants conceded that the estimate of
repairs submitted by the witness Frank Cesar
was acceptable. He disputed, however, Mr.
Cesar's contention that the depreciation on the
furniture by reason of the repairs would be 25
to 30 per cent. Counsel, however, did not
adduce any evidence that Mr. Cesar's estimate
of depreciation was incorrect and I am, there
fore, left with his evidence undisturbed that
such is the case and I must accept it. My prob
lem is on what value do I apply this depreciation
factor?
Counsel for the defendant accepted Mr.
Cesar's bill for a survey report in the sum of
$48.00 but objected to two accounts, one from
Harry M. Allice for $100.00 for consulting fees
with respect to the damaged goods and the
account of Dale & Company Limited for their
survey fees totalling $221.97. It appears to me
that Mr. Allice's account of $100.00 was for
purposes of this litigation and, therefore, I disal
low it, but I will allow Dale & Company Limit-
ed's survey account since it was necessary for
the plaintiff to pay this sum in order to establish
its damages both for this action and for the
purpose of its insurance claim.
I therefore assess the plaintiff's damages as
follows:
for repairs to the damaged goods $ 2140.00
for Dale & Company Limited's account 221.97
for preparation of estimate by
Frank Cesar 48.00
$ 2409.97
To this should be added a depreciation factor of
25% of the cost price of the damaged goods but
since I am unable to calculate this amount due
to the plaintiff's failure to adduce any evidence
of the value of the specific damaged goods, I
cannot add any allowance for such depreciation.
In assessing the, damages I was unable to give
effect to any of the arguments by counsel for
the defendants and evidence adduced by them
that some " of the damage claimed was old
damage since no satisfactory proof of any par
ticular item alleged to be old was given. While
the defendants pleaded a limitation on the
amount payable by the defendants if they were
found liable by reason of the maximum liability
under the Hague Rules, the question was not
argued before me and I take it the defendants
have abandoned their position in this regard,
probably because the damage to individual
articles was, in fact, less than the limitation
imposed under the Hague Rules.
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.