, Ex. C.R. EXCHEQUER COURT OF CANADA 57 BRITISH COLUMBIA ADMIRALTY DISTRICT 1956 Dec. 3 PACIFIC INTERNATIONAL RICE PLAINTIFF; 1957 MILLS INC Feb. 14 AND THE SHIP OLGA TORM DEFENDANT; AND PACIFIC INTERNATIONAL RICE MILLS INC. f PLAINTIFF; AND THE SHIP ANDINO DEFENDANT. Shipping—Action for damage to cargo—Liability admitted in part—Costs. - In an action for damage to a shipment of rice allegedly due to the presence of mice and rat excreta in the rice and for contamination by copper or lead concentrates the daim for damage due to the excreta was settled. The Court found that the loading of the rice and of the concentrates was done in such a manner that it did not detract from the value of the rice. Held: That the action is dismissed except as to a certain number of badly stained sacks of rice for which the defendants admit liability. 2. That the counterclaim is dismissed without costs; the plaintif is entitled to costs prior to the date of tender and payment into Court of the sum for which defendants admitted liability. 3. That the defendant is entitled to all costs after tender and payment in together with the costs relating to security and bail bond. ACTION for damage to a shipment of rice. The action was tried before the Honourable Mr. Justice Sidney Smith, District Judge in Admiralty for the British Columbia Admiralty District, at Vancouver. G. F. McMaster and F. H. H. Parkes for plaintif. J. Cunningham and C. C. Ryan for defendants. SIDNEY SMITH D.J.A.:—In this consolidated action the plaintif daims damages from one or both defendant vessels for alleged failure to carry safely a shipment of some 1,400 metric tons of Peruvian brewers or broken rice. The voyage was from Pacasmayo in Peru to Woodward's Landing in the Fraser River, near Vancouver, British Columbia. The shipment of rice was packed in used sacks, and was loaded into the Danish M.S. Olga Torm. 82260—la
58 EXCHEQUER COURT OF CANADA [1957] 1957 The circumstances are somewhat unusual but can be PACIFIC stated at no great length. The shipper of the rice was Caja INTER- NATIONAL de Depositos y Consignaciones (later referred to as "Caja"). RICE MILLS INC. The shipper's agent in Peru was Mr. Max Garcia (later v. THES H IP referred to as "Garcia"). He was also the plaintiff's agent Olga Torm in Peru. The Bill of Lading (written in such small print AND PACIFIC as to be almost illegible) was "to order notify Pacific Inter-INTER- NATIONAL national Rice Mills Inc.," the plaintiff in this action (known RICE MILLS INC. as Pirmi). This company was at ail material times the v. THE H owners of the rice. The port of delivery originally was S IP Andino Stockton, California, but for reasons shortly appearing this Sidney smith was later amended to "Woodward's Landing, B.C.," and the D.J.A. shipment was stated to be "for the account of" the plaintiff. The Bill of Lading was signed by some agency on behalf of the shipper. The loading of the rice was completed on 28th January, 1954, and this was the date of the Bill of Lading. Two days previously the plaintiff had received a sample of the rice which disclosed the fact that the shipment contained rodent excreta. On the 26th January, the plaintiff cabled as follows: 1/26/54 PERULAND LIMA (PERU) SHIPPING SAMPLE ARRIVED TODAY SUBMITTED BREWERY HOWEVER THEY REQUESTING ANALYSIS PURE FOOD WHICH ALLOWING BECAUSE THEY INDICATE THEIR INSPECTION REVEALED LARGE NUMBER MOUSE EXCRETE STOP EXTREMELY CONCERNED BECAUSE IF ACTUAL SHIPMENT CONTAINS EXCRETE SIMILAR SAMPLE RECEIVED TODAY CERTAIN REJECTION U.S. PURE FOOD AUTHORITIES REQUIRING CLEANING IF POSSIBLE OR RE EXPORTATION AS ORDERED BY GOVERNMENT STOP VIEW RESPONSIBILITY SELLERS CONFIDENT THEY WILL STAND BEHIND US IN EVENT REJECTED ASSISTING US COSTS IF INCURRED STOP WOULD CONSIDERABLY APPRECIATE YOUR CABLE INDICATION POSSIBILITY RESELLING TO CAJA ALTERNATELY SOME OTHER DESTINATION OUTSIDE UNITED STATES STOP ANY POSSIBILITY REMOVING EXCRETE BEFORE SHIPMENT GUIDANCE THEY APPEAR AS BROWN EGGSHAPE OBJECTS APPROXIMATELY l ig" DO UTMOST PIRMI
Ex. C.R. EXCHEQUER COURT OF CANADA This was followed by another cable on the 28th: PERULAND LIMA (PERU) CONFIDENTIALLY VIEW PUREFOODS CISCO FEEL DANGEROUS SHIP THIS PORT RECOMMEND SHIP- MENT VANCOUVER IN BOND FOR PROCESSING WITH RESHIP- MENT ACROSS CANADIAN BORDER VERY LAX STOP COSTS UNKNOWN EXPECT BETWEEN 5 AND IN 8 DOLLARS PER TON IN VANCOUVER ASSURANCE PASSING AS PUREFOODS ALERTED EXAMINING EVERY BAG MICROSCOPICALLY STOP STILL HOPEFUL ACTUAL SHIPMENTS WITHOUT EXCRETA TIME MAKING PRELIMINARY ARRANGEMENTS VANCOUVER Sidney Smith ADVISE WHEN LOADING COMPLETED The ship reached San Francisco on 12th February. there was delay there. A dispute arose as to whether Olga Torm was obliged to carry the cargo to Vancouver under an option in the Bill of Lading. dispute was settled by mutual charged from the Olga Torm and loaded into the Chilean M.S. Andino. The Bill of Lading was then amended to read as I have said. The agreement reached at cisco was in part as follows: The ship or carrier will not be liable for any loss resulting from the condition of the cargo at the time it was received for shipment at Pacas-mayo. The ship or carrier will not be liable for any loss sustained at port of San Francisco resulting from the double or extra handling of the cargo in .order to effect British Columbia discharge, nor for suffered by the cargo after discharge of the cargo at San Francisco while awaiting reloading. The Andino proceeded on this voyage and Woodward's Landing on 26th February, 1954. rice was discharged on the 26th the warehouse of the Canada Rice Mills Ltd., to await developments. The plaintif made a daim against the shipper for damage due to the rodent excreta and this was settled by of $10,000. It may be convenient also to the plaintif presented a daim to the issued two survey reports at the loading port but mention the rodent excreta. This 59 1957 1/28/54 PACIFIC INTER- NATIONAL RICE MILLS ATTITUDE SAN FRAN- INvo. THE SHIP Torm Olga AND WHERE SUPERVISION PAorno NA T T E IO R NA - L WITH FAIRLY GOOD RICE MILLS v. THE SHIP CAME SOONEST MEAN- Andino D.J.A. PIRMI But the But in the end the agreement, the rice disSan Fran-the any damage arrived at There the and 27th and stored in a payment state here that survey company who failed to is the letter:
60 EXCHEQUER COURT OF CANADA 1957 Superintendence Co., Inc., rACIFIC INTER- Two Broadway, NATIONAL New York 4, New York. RICE MILLS Gentlemen: INC. v. We have currently been corresponding by cable with you THE Surs ment of Peruvian brewers rire per MS Olga Torm photostats of the Superintendence certificate issued AND pAciFic copy of the Curtis & Tompkins certificate issued INTER- also holding the shipping sample upon which NATIONAL San Francisco. RICE MILLS The complete lack of honesty in INc. v. absolutely not understandable, and we THE Sine fully liable and responsible for the issuance Andin in your name and on the part of your authorized agent in Sidney Sm ith To add insult to injury, the shipping sample that was - D.J.A. tendence Company, and souled (sold7) — mouse and rat excreta, and they were even so kind mouse excreta and wrap them up in a same package. We are referring the matter to our ing with you in due course. For your contamination will probably exceed or $60,000. Sincerely yours, PACIFIC INTERNATIONAL There is no evidence how this Then on 1st March, 1954 the Garcia, describing the events at their view of the damage in these words: For your guidance, the excreta is found in will have to be cleaned. I quote the foregoing to show there was no suggestion of other than contamination by the documents (except perhaps mention is made of metal contamination. another exception in the letter Pirmi to Canada Rice Mills Ltd., which is Mr. R. D. Gavin, Canada Rice Mills, Ltd., 448 Seymour Street, Vancouver, B.C., Canada. Dear Bob: We are attaching letter of May letter of April 29th from King. From next move •is up to us, and we have to do the [1957] February 25, 1954. on the ship-Olga Torm. We are attaching in Peru and also a in San Francisco. We are the certificate was based in issuance of the Peruvian certificate is must go on record as holding you of this fraudulent certificate Peru. sent by Superin-by them, contained hundreds of as to take some of the separate blue envelope within the attorneys, who will be correspondguidance, the loss, because of this $30,000 and could run as high as $50,000 RICE MILLS, INC. C. M. Rocca daim was disposed of. plaintiff wrote to his agent, San Francisco and giving all sacks, and the entire cargo that up to this date at least anything wrong with the rice rodent excreta. Indeed in all the Eldridge reports) no There may be of 12th May, 1954 from as follows: May 12, 1954. 4th from our attorneys and also a the attached you can see that the necessary to convince King
Ex. C.R. EXCHEQUER COURT OF CANADA that the processing is extraordinary and would not be necessary had not the metal contamination been present. We would certainly appreciate what you can do to get this thing pushed along, as liquidate this rice, and the market does not appear to be stronger. Hoping to hear from you favorably very shortly, we remain Cordially yours, PACIFIC INTERNATIONAL This is rather cryptic and was not satisfactorily explained in the evidence. Captain King was underwriters' surveyor. The Canada Rice Mills made several test contaminated rice when it was processed attempts to remove the rodent and lead were also made. Finally in shipment was sold "as is, where is" to Ltd., for $3.75 per 100 lbs. At that time for brewers rice free from contamination 100 lbs. C.I.F. Vancouver. The Canada blended the infected rice with good rice to pass inspection by the United States Pure Food ties and thus in small lots over a period of many months the whole shipment was sold across the Border. This was all in accordance with plaintiff's cabled recommendation 28th January, 1954. The present daim has nothing to by rodent excreta. It is urged here that there was further contamination by copper or lead concentrates. dence dealt also to some extent with zinc concentrates but nothing of this was set out in the pleadings and there was no application to amend. It was urged upon me that this damage was due to concentrates having been carried in both these ships; and in the Andino carried partly in the same hold as was the rice. It may be undesirable to carry foods and concentrates in the same hold but there is nothing to show that this cannot be done provided proper safeguards are taken. The Olga Torm's cargo compartments consist of a forward hold entered by two hatches, lower hold is one compartment decks. Abaft this and separated by a water is No. 3 lower hold and 'tween decks. Then come spaces and aft of these another lower hold 61 1957 PACIFIC we would like to INTER-getting any NATIONAL RICE MILLS Iv. THE SHIP Olga Torm RICE MILLS, INC. AND PACIFIC C. M. Rocca INTER- NATIONAL RICE MILLS iNv.c. runs with the TillnE ZIP in unsuccessful — Sidney Smith excreta. Tests for copper D.J.A. July 1954 the entire — Canada Rice Mills the market price was $4.50 per Rice Mills heavily in such manner as Authoriof do with contamination The eviNos. 1 and 2: so that the and likewise the 'tween tight bulkhead the engine and 'tween decks
62 EXCHEQUER COURT OF CANADA 1957 , also entered by two hatches PACIFIC ments were ail provided with permanent cargo battens INTER- NATIONAL the orthodox manner. Boxes RICE MILLS holds for the reception of the concentrates, which were INC. V. loaded at several ports before THE SHIP Olga Torm They were lowered into the holds in sacks and as they AND reached bottom the sacks were slit PACIFIC INTER- trates dumped out. Much was NATIONAL RICE MILLS but I accept the answer to that INC. Master. He said: V. THE Sian , Well I mean to say there is always dust Andino down again when there is no more becomes hard on the surface. Sidney Smith D.J.A. At Pacasmayo the ship loaded centrates and the 1,400 tons of loaded into No. 4 hatch lower hold. Before loading the 'tween decks space was thoroughly cleaned with sawdust: then two inches the 'tween decks. That was covered with new ail iron was likewise covered; the hatch covers laid lower hold hatchway, covered with tarpaulins down; then the tarpaulins were again covered with cargo mats. This procedure was carried out at each hatch before the receiving and during the loading of the was loaded in the after end until after the zinc had been stowed in No. 4 hold. Reference was made to some sacks of rice which were stowed No. 3 'tween decks, and to the fact that abaft this was stowed a shipment of lead ore. But this was ore in not concentrates, and gave rise to was like lumpy stones. Moreover, both ore and covered with tarpaulins and there was a space between the rice stowage and the any loading began the compartments in which rice was to be carried were inspected by and approved. The vessel was at and rice came off in the one set of stowed in the lower holds. It was stowed decks throughout the ship and these with the lead ore in bags, contained rice only. sidered this stowage "absolutely proper" to disagree with him. The [1957] Nos. 4 and 5. These compart-in were fitted into the lower the vessel reached Pacasmayo. open and the concen- made of this creating dust question given by the but once you see the dust come loading, then the concentrated ore about 400 tons of zinc conrice. The concentrates were the rice and swept of dunnage was laid ail over cargo mats; over the and battened rice. No rice concentrate in the fore end of bags, no dust at ail. The ore rice were of 3 or 4 feet sacks of lead ore. Before Government health authorities an anchorage and the ore lighters. No rice was in the 'tween the exception of The Master conand I see no reason stowage of the cargo in the
Ex. C.R. EXCHEQUER COURT OF CANADA Andino was also attacked. This Chief Officer of the Andino Atacama. It should be observed that the into three holds and 'tween decks are abaft of these. The rice was stowed in No. 2 lower hold and 'tween decks and No. 3 'tween decks. said that before loading the rice at 'tween decks and No. 2 hold and by the crew. In No. 3 'tween decks the lower hold was closed, tarpaulins were of the 'tween decks, quarter-inch pletely across the floor, paper was placed on top of that and paper was placed in the wings as well, 6 feet square were laid on top of the paper and in the wings of the 'tween decks. The bags of rice in No. 3 'tween decks were loaded to about two feet from the top of the coamings. There was no air connection between the lower hold the 'tween decks. Nothing was placed on top of the rice; the hatches were closed, the usual three tarpaulins placed on top, and the hold kept battened down until arrival at Woodward's Landing. No one during the voyage after the loading of the rice. out that the same precautions were taken in rice in No. 2 hold and 'tween decks with plenty square mats used. He also said that in the rice was completely covered with tarpaulins. concentrates in No. 2 hold were packed firmly wooden bulkhead constructed to reach deckhead holding the ore so that it could not move during the voyage. On the after side of the wooden bulkhead, tarpaulins were draped and the rice was stowed commencing about two yards aft of the wooden bulkhead. dence I think this stowage was also sufficient. There was a good deal of conflict the sacks on arrival at Woodward's Landing, and as procedure prior to the sale of the rice. sion that some of this testimony was rather evasive. With respect to the sacks it must be remembered that these were "used" sacks. They were brought off in lighters at Pacas-mayo, Peru, and at San Francisco reloaded only to be discharged from the Olga Torm in their entirety and reloaded into the Andino. 63 was answered by the then 1957 now Master of the M.S. P A cine Andino is divided NAT TmENAL and that the engine spaces R ICE MILLS v. The Chief Officer oTig M San Francisco No. 3 AND ERie 'tween decks were cleaned ILAcTIF hatchway into the BNATI_ONAL laid over the bottom dunnage was laid comAndino and mats about Sidney Smith D.J.A. and went into the hold again He pointed stowing the of six foot lower hold the The copper between a about half way to the On the evias to the condition of to the I formed the imprespartially unloaded then There was evidence
64 EXCHEQUER COURT OF CANADA 1957 of the beams and stringers in the holds being covered with PACIFIC dust. Captain Armatage, an independent INTER- NATIONAL of recognized standing, gave acceptable RICE MILLS not agree that any damage had occurred from INC. v. traces except to some sacks mentioned later. THE Sali, Olga Torm that any dust was such as might be expected from AND cargo. He was of opinion that the rice contained no more PACIFIC INTER- than normal amounts of metal material. NATIONAL RICE MILLS Captain King that he thought damage might have INC. caused in the Olga Torm and there localized, but that upon TE[EvàHIP trans-shipment it would no longer Andino spread throughout the whole cargo. The Sidney Smith the Andino carried concentrates D _ .J.A . loses its significance in view tiff's witnesses that all sacks more or less stained. At the conclusion of the hearing I was of opinion that had it not been for the presence of rodent excreta we should have heard nothing of the concentrates claim. Subsequent study of the documents the testimony have fortified this ing that some metal contamination no evidence whatever that this detracted from the rice. On the contrary there was some evidence that rodent contaminated rice by itself was unmarketable. I dismiss the action except as sacks stowed in the port after as to which defendants admit liability Plaintif will have judgment natively there will be a reference to assess the value of these forty sacks rice. I should like brief memoranda from Counsel disposition of the general costs costs of the counterclaim security upon arrest on the (2) dismiss the latter. NOTE:—On February 14, 1957, argument Mr. Justice Sidney Smith costs; plaintif was granted costs of the action prior payment in of $500; defendant was granted with the costs relating to security [1957] marine surveyor evidence. He did the concen- He thought a general I gathered from been remain local but be complaint that and rice in the same hold of the general evidence of plainin the entire shipment were in the rice and consideration of conclusion. Even assumwas present, there was the value of the to some forty badly stained corner of No. 3 'tween decks, in the sum of $500. for this amount or alterthe learned Registrar to of rodent contaminated as to the of the action; also of the as to the demand for excessive assumption that I (1) allow Judgment accordingly. upon receipt of memoranda and further dismissed the counterclaim without to date of tender and ail costs thereafter, together and bail bond.
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.