Transport Navimex Canada Inc. v. Canada, docket T-1483-86

     Date: 19971222

     File: T-1483-86

                                        

Present:      THE HONOURABLE MR. JUSTICE MARC NADON

Between:

     TRANSPORT NAVIMEX CANADA INC.,

     Plaintiff,

     -and-

     HER MAJESTY THE QUEEN,

     Defendant.

     JUDGMENT

     The plaintiff's statement of claim is dismissed without costs.

                                         "Marc Nadon"

                                         Judge

Certified true translation

C. Delon, LL.L.

     Date: 19971222

     File: T-1483-86

Between:

     TRANSPORT NAVIMEX CANADA INC.,

     Plaintiff,

     -and-

     HER MAJESTY THE QUEEN,

     Defendant.

     REASONS FOR JUDGMENT

NADON J.

[1]      The plaintiff's action results from a decision of Transport Canada to resiliate a shipping contract entered into on May 3, 1985. The plaintiff is claiming the sum of $324,278.99.

---

THE FACTS

[2]      The relevant facts are as follows. On about March 21, 1985, Transport Canada sent the plaintiff an invitation to tender for services relating to the transportation of goods by water to various parts of the Arctic. A document entitled "Anticipated Cargo Bookings 1985 - Area G", dated March 1, 1985, accompanied the invitation to tender. In that document, the defendant informed the plaintiff that the anticipated cargo to be transported to Area G was 541.45 metric tonnes.

[3]      On April 17, 1985, the plaintiff submitted a tender relating to Areas "A" (Eastern Arctic) and "G" (Thule, Greenland). On May 3, 1985, the defendant accepted the plaintiff's tender for Area "G". The defendant rejected the tender for Area "A" because it did not comply with the conditions of the invitation to tender.

[4]      It is important to note that clause 8 of the invitation to tender that was sent to the plaintiff provided that the tenderer had to inform Transport Canada of the name of the ship it intended to use to carry out the transportation that was the subject of the tender. In this instance, the plaintiff indicated its intention to transport the goods to Thule on board the ship GLENCOE.

[5]      Before accepting the plaintiff's tender, Transport Canada satisfied itself that the GLENCOE could in fact transport the anticipated cargo of 541.45 metric tonnes.

[6]      At all material time, the GLENCOE, a Canadian ship, was owned by D. Frampton & Co. Ltd. of Saint John's, Newfoundland.

[7]      In order to understand the events better, we should refer immediately to the relevant clauses of the invitation to tender.

1.      I/WE, the undersigned, hereby offer to hold myself/ourselves ready to enter into a contract in the manner and form, annexed hereto as Appendix "A" with Her Majesty the Queen, in Right of Canada, as represented by the Honourable the Minister of Transport, to furnish all necessary equipment, labour, materials and all things and services necessary to expeditiously perform and complete in a satisfactory and workmanlike manner all the work necessary for receiving, loading, transportation and delivery of material and equipment to sites in the areas indicated in Clause 11 of this tender during the 1985 sealift operation.

2.      I/WE offer to perform the work in accordance with the full intent of the attached form of agreement and appendices and hereby agree if awarded any part of the services tendered for to enter into an agreement on this basis.

4.      Initial anticipated kind and tonnage listing attached to this tender is prepared FROM INFORMATION AVAILABLE AT THE TIME OF CALLING tenders and the successful tenderer will be provided with the final tonnage listing no later than June 14, 1985, subject to a further adjustment of up to 10% less than the final tonnage listing, prior to date of sailing.

5.      The successful tenderer will be required to carry all cargo destined to the area awarded up to the time of final listing, and space permitting, all cargo which the Department may have from the date of final listing up to the date of sailing.

6.      It is expressly agreed that the price quoted in this tender for the destinations shall apply to all cargo carried, including the initial listing and any revisions made at time of award of contract, the final listing and also any cargo carried on a space available basis.

7.      The ship(s) shall be at the Port of Montreal/Ogdensburg ready to accept cargo in accordance with the following schedule:

Area G - Thule, Greenland      Montreal      -      July 4

(Montreal Dep)      -      July 10

(a)      Owing to unloading facilities at Thule, Greenland, cargo must be loaded and transported in one ship.

8.      It is a provision of this tender that you provide a listing of the vessels you propose to furnish for this service along with your tender. You also agree to provide within 48 hours of being requested by the Department of Transport, dates vessels are to leave the point of departure based on Para. 7 and the estimated dates vessels will arrive at each site. It is expressly understood that the proposed timetable shall be subject to acceptance by the Co-ordinator. The agreed timetable will form part of any agreement entered into.

Failure to submit tenders in strict accordance with the tender documents may render your tender invalid.

9.      MY/OUR tender is as follows and the prices quoted include all the services required by this tender form and the documents forming part of the tender package. All prices are in Canadian dollars.

i)      (a)      I/WE hereby quote the following price per tonne (t) of 1,000 kilograms (kg) or 2.5 cubic metres (m3) based on weight or measurement whichever produces the greater revenue, for all dry cargo, including freeze and chill cargo, in accordance with Schedules A and B, which prices include all services specified by this tender form and documents forming part of this tender package.

Area G - ex Montreal, Quebec      $ 278.00 per tonne

11.      The following schedule of the latest delivery dates for the various areas should be taken into account when submitting your tender.

AREAS      DELIVERY DATE NOT LATER THAN

G - Thule, Greenland          Between July 20-22, 1985

[8]      As set out in clauses 1 and 2 of the invitation to tender, the plaintiff undertook to perform its contractual obligations in accordance with the standard contract appended ("Appendix A") to the invitation to tender. Clause 5 of Appendix A, entitled "Default - Taking the work out of the Contractor's hands", provided a number of grounds on which the defendant could terminate the contract entered into with the plaintiff.

[9]      On May 8, 1985, the defendant informed the plaintiff of a change in respect of the anticipated cargo: that a cargo of 751.81 metric tonnes was now anticipated, an increase of 210.36 metric tonnes. On May 16, 1985, the defendant informed the plaintiff that the tonnage of 751.81 metric tonnes had a volume of 83,188 cubic feet. The defendant also informed the plaintiff that, having regard to "broken stowage"1 of 15%, the space needed to receive the anticipated cargo was 95,666 cubic feet or 2,709 cubic metres. Lastly, the defendant informed the plaintiff that the foregoing information was not the final tonnage listing referred to in clause 4 of the invitation to tender.

[10]      On May 27, 1985, the defendant informed the plaintiff that she was of the opinion that the usable space on board the ship GLENCOE was insufficient to receive the anticipated cargo. Accordingly, the defendant asked the plaintiff to inform her of the name of the ship that it intended to substitute for the GLENCOE to transport the cargo to Thule. On the afternoon of May 27, the plaintiff informed the defendant that in its opinion the GLENCOE had sufficient capacity to transport the cargo to Thule.

[11]      On June 21, 1985, following a number of meetings and discussions between the representatives of the plaintiff and the defendant, the defendant informed the plaintiff of her decision to terminate the contract in accordance with clause 5 of Appendix A to the invitation to tender. The defendant's telex, dated June 21, 1985, reads as follows:

RECEIPT OF TELEX 12H20 OF 20 JUNE 1985 IS HEREBY ACKNOWLEDGED. STOP IT IS CLEAR FROM THE CONTENTS OF SUBJECT TELEX THAT YOU DO NOT INTEND TO PROVIDE A VESSEL IN ACCORDANCE WITH SECTION TWO QUOTE CONTRACTOR"S OBLIGATIONS UNQUOTE AND MORE SPECIFICALLY OF SUFFICIENT CUBIC CAPACITY TO STOW THE DECLARED QUANTITY OF CARGO STOP

YOU ARE THEREFORE NOTIFIED THAT THE WORK OF THE ABOVE-REFERENCED CONTRACT IS NOW TAKEN OUT OF YOUR HANDS PURSUANT TO SECTION FIVE QUOTE TAKING THE WORK OUT OF THE CONTRACTOR"S HANDS UNQUOTE STOP

FURTHER, YOU ARE ADVISED THAT HER MAJESTY RESERVES HER RIGHTS PURSUANT TO SAID SECTION FIVE, QUOTE TAKING THE WORK OUT OF THE CONTRACTOR"S HANDS UNQUOTE

STOP

[12]      On June 19, 1986, the plaintiff filed a statement of claim against the defendant claiming the sum of $230,000.00. On November 1, 1994, the plaintiff filed an amended statement of claim. In its amendments, the plaintiff claimed the sum of $324,278.99 from the defendant. According to the plaintiff, the plaintiff's [sic] decision to resiliate the contract is, in the terms used in paragraph 12 of its amended statement of claim, a unilateral, wrongful and illegal act.

THE ISSUES

[13]      1.      Could the ship GLENCOE receive and transport to Thule a cargo of 751.81 metric tonnes with a volume of 83,188 cubic feet?

2.      If the answer to the first question is yes, could the defendant resiliate the contract entered into on May 3, 1985?

3.      If the answer to the first question is yes, or if the answer to the second question is no, what damages did the plaintiff suffer?

ANALYSIS

[14]      1.      Could the ship GLENCOE receive and transport to Thule a cargo of 751.81 metric tonnes with a volume of 83,188 cubic feet?

It goes without saying that the parties do not agree as to how this question should be answered. In support of their respective positions, the parties filed expert reports. The plaintiff filed the reports of Capt. Louis-Michel Dussault, and the defendant filed the reports of Capt. Clifford H. Parfett.

[15]      Since in my view the defendant had the burden of establishing that the ship did not have sufficient space to transport its cargo, I shall begin my analysis of the first question with Capt. Parfett's evidence.

[16]      Capt. Parfett filed two expert opinions. The first report is dated March 14, 1996, and the second is dated October 18, 1996. Capt. Parfett's conclusion is that the ship GLENCOE could not carry the cargo intended for it. According to Capt. Parfett, the only possible way of loading all the cargo on board the GLENCOE was to load a significant portion of the cargo on the deck. Specifically, according to Capt. Parfett, over 1,016 cubic metres would have had to be loaded on the deck. The consequence of loading in this manner is described by Capt. Parfett at page 11 of his first report:

It will be noted that the cargo at Hatch No. 1 would have extended to a height of 5 metres above the deck and 4 metres above the hatch covers. This means that the cargo on the hatch covers would have been at the approximate height immediately below the wheelhouse windows (refer to annexed General Arrangement Plan No. 2 illustrating this height). It will further be noted that the cargo on Hold No. 2 would have been 5.5 metres on deck and 4.5 metres on the hatch covers. At this point therefore the cargo would have been approximately level with the top deck of the navigation bridge and accommodation. (Refer to annexed General Arrangement Plan No. 2 illustrating this height.)

[17]      To reach this conclusion, Capt. Parfett prepared a stowage plan. The following is how Capt. Parfett explains his stowage plan, at page 5 of his report of March 14, 1996:

In view of the fact that cubic was of the essence in this particular proposed stow, we have considered that the loading superintendent would want to occupy as much cubic as possible in the underdeck spaces, that is Holds Nos. 1 and 2 and we have therefore made a speculative stow plan on that basis without regard to the fact that such stow would have been difficult, time consuming and costly. We have adopted the same general approach to all other aspects of the proposed stowage, that is we have not taken account of reasonability or cost effectiveness but have attempted to stow the maximum cubic within all available spaces.

[18]      At pages 5 and 6 of his report, Capt. Parfett explains the parameters of his stowage plan:

With regard to the form of the sides of the vessel, the depths of the frames, the type and spacing of the Deep Web Frames and the nature of the curvature of the frames and connection to the lower frame backers, we have had to partially rely upon experience. This also holds true for the various comments regarding the hatch coaming, underdeck strength girders, longitudinal strength girders, stringer plates and all other underdeck protrusions which tend to limit and restrict the ability to stow a palletized cargo within a complex space.

As a part of this study, we have however considered various other possible arrangements of framing and girders which for the sake of brevity are not included in this report but nevertheless were worked upon. In general, we found that within the limits of probability of construction, the eventual conclusions remained valid regardless of variations as to the nature and extent of the various assumed underdeck hindrances.

Also for the sake of brevity, we have considered in general that we would have available pallets both of one (1) cubic metre and of 0.5 cubic metres, the latter being one (1) cubic metre square x 0.5 cubic metres high. We are aware that there were a number of various dimensions but all dimensions generally were similar to the two (2) assumed sizes and once again, although we experimented with various other combinations, we found that the conclusions as to available cubic and the probable cubic cargo which could be placed within the space remained relatively valid. In practice, the actual numerous variations in package sizes would have resulted in some increase in Broken Stow.

[19]      In addition, based on the "general arrangement plan", Capt. Parfett calculated the dimensions of holds nos. 1 and 2. Then, having regard to these parameters and to the dimensions of the holds, Capt. Parfett calculated the number of cubic metres of cargo that could be loaded in each of the holds. For hold no. 1, Capt. Parfett concluded that 469 cubic metres could be loaded. For hold no. 2, Capt. Parfett concluded that a maximum of 865 cubic metres could be loaded.

[20]      In view of the "broken stow", not all of the space in holds 1 and 2 could be used. The concept of "broken stowage" is defined as follows by Capt. R.E. Thomas in his text Stowage - The Properties and Stowage of Cargoes (Glasgow: Brown, Son & Ferguson, Ltd., 1968), at pages 22 and 23:

Broken Stowage is the term used to express:-

(a)      Space which is lost and unoccupied (by cargo) between and around packages in stowage and is made up of the interstices between individual packages; space occupied by dunnage; space at sides, ends and on top of cargo, also in way of pillars, brackets, bulkhead stiffeners, etc., which is not sufficiently large to receive the size of package available.

This loss of space varies according to the nature of the cargo carried. With free flowing goods like grain, sand, etc, provided it is properly trimmed, the loss is small, with bag cargo and handy cases of uniform dimensions, such as tea packages, case oil, canned goods, very full stowage is possible.

On the other hand, irregularly shaped packages, varying in size and form, large packages such as machinery, boilers, large reels of cable and motor cars, cases of Japan curios, casks, cylindrical containers, etc., the loss of space is very high; 20-25 per cent. or more being not unusual. Similarly increased loss of space must be allowed for when loading palletized shipments.

The loss of space, also, varies according to the shape of the compartment, being higher in end than in main holds, and in "tween deck spaces than in lower holds. Vessels with tank-tops carried out to the sides stow certain classes of packages better than those with bilge gutterways, but the advantage lies with the latter type with packages exceeding the frame space in width.

[21]      Capt. Parfett concluded that the loss of space in hold no. 1 would be 34%. He estimated the loss of space in hold no. 2 would be 25%.

[22]      Accordingly, by Capt. Parfett's calculations, the plaintiff could have loaded 469 cubic metres in hold no. 1 and 860 cubic metres in hold no. 2, for a total under deck load of 1,339 cubic metres. Thus a volume of 1,016.7 cubic metres had to be loaded on the deck of the GLENCOE. Assuming at least a 5% loss of space, Capt. Parfett concluded that he needed 1,067.5 cubic metres on deck to load the rest of the cargo. On page 10 of his first report, Capt. Parfett stated his conclusion concerning the height of the cargo loaded on deck:

The conclusions which can be drawn from this calculation are that the height of cargo on deck would be:

On Deck Abreast Hatch No. 1      -      5 metres above Deck Level

On Hatch No. 1      -      4 metres above the Hatch or 5.5 Metres above deck level

On Deck Abreast Hatch No. 2      -      5.5 metres above Deck Level

On Hatch No. 2      -      4.5 metres above the Hatch or 6.0 metres above Deck Level

[23]      Capt. Parfett included an additional comment explaining that his calculations do not take into account the difficulty in stowing a trailer and a forklift that are part of the cargo. He also explains that he did not take into account the difficulty of stowing the three cargo booms. On page 11 of his report, Capt. Parfett stated the following opinion concerning the stowage of the cargo on the deck of the GLENCOE:

It will be noted that as a cross-section of the cargo above deck, the cargo would be stowed effectively in three (3) vertical pillars, that is cargo on either side of the hatch coamings and cargo on the hatch covers. The levels of these cargoes would be different and the upper profile would be that the cargo on the deck areas would be approximately 0.5 metres below the height of the cargo stowed on the hatch covers. This has been designed to create the maximum ability to safely secure this cargo against athwartships movement. Nevertheless the fact that the cargo on an athwartships basis is in three (3) blocks does create serious problems in that as a general rule it is necessary for the safe securing of all cargoes for the cargo to be compacted as a single unit. A further complication in attempting to safely secure this cargo would be the fact that spaces necessarily were left on deck, taking into account the various mooring bollards and ladders. All of these factors create a discontinuity within the cargo stow and particularly on the faces of the stow presented to the sea. All of this is going against standard practices of good seamanship and good cargo stowage.

In general, most of the cargo on deck would be the same approximate one (1) cubic metre pallets and these pallets would have various degrees of compactness and flexibility. The overall compacting and securing of this cargo therefore would have created an extremely serious problem which in the opinion of the undersigned could not have been adequately overcome. The variation in nature, size and flexibility of all of the various cargo would have created a situation which was almost impossible to secure into a single compact unit.

We contemplate that the cargo would have been secured in a similar manner to that normally used for "Timberdeck Cargoes" however Timberdeck Cargoes are normally very solid, compact and of considerable length. None of these factors apply in this instance and in our opinion the full and adequate securing of this cargo would have been almost impossible.

The stacking of palletized cargo within a warehouse which has a solid floor and no probability of movement of that floor normally is not done above heights of four (4) or maximum five (5) pallets. Stacks of cargo above that height tend to become unstable. In this calculation, the stowage on deck in places would have been six (6) or more pallets high.

[24]      Capt. Parfett concluded his report by stating, at page 12:

In the opinion of the undersigned, these levels would be totally unreasonable and having regard to the above described difficulties and virtual impossibility of properly securing this cargo would have been hazardous both to vessel and cargo. The probabilities of this cargo safely arriving at destination were extremely poor.

We do not feel that this cargo could have been properly or safely loaded, stowed and secured for the intended voyage. We therefore consider the action of Canadian Coast Guard in refusing to allow this cargo to be loaded on this vessel to have been entirely correct.

[25]      Accordingly, Capt. Parfett's opinion is that the cargo to be loaded on board the GLENCOE could not be transported to destination. According to Capt. Parfett, in view of the height to which the cargo would have to be loaded on the deck of the ship, it would have been impossible to stow it safely. In his view, loading in this manner was dangerous both to the ship and to the cargo.

[26]      Capt. Parfett's second report is dated October 18, 1996, and is entitled "Counter expertise". The purpose of that report was to reply to the report of Capt. Dussault, dated October 3, 1996. The conclusion in Capt. Parfett's second report reads as follows:

The more detailed study of stowage forced upon me by a detailed analysis of Capt. Dussault"s stowage proposals convinces me that while Capt. Dussault"s proposals are impractical, my original proposals have not sufficiently taken into account the longitudinal loss of space. In addition, at the time my proposals were made, I was not aware of the fact that the vessel had deep web brackets under deck and the serious effect that these would have on adequate cargo stowage. Typically an examination of my sketch for frame 78 shows that four (4) packages would not have been able to be stowed wherever a deep web bracket interfered. This situation extends all the way through hold no. 2 and severely reduces the number of packages which could be so stowed.

The combination of these two non-considered factors would in my opinion greatly increase the loss of cubic as compared with the figures allowed in my original calculation. All of these factors would have created increased heights on deck, decreased stability and safety both to ship and cargo and unacceptable loadings on the hatch covers.

Taking all these factors into account therefore, having examined the expertise of Capt. Dussault, I am far more convinced than I was originally that this vessel could not safely or reasonably have carried this cargo.

[27]      In his first report, after examining the relevant documents, and specifically after examining the GLENCOE's general plan and plan no. 3443-3, dated February 1, 1952, Capt. Parfett concluded that there were "deep web frames". The presence of these deep web frames is noted by Capt. Parfett at pages 5 and 6 of his first report, in which he sets out the parameters. The consequence of the presence of these deep web frames was to limit or restrict the space available for stowing cargo in holds no. 1 and 2.

[28]      In preparing his report of October 18, 1996, Capt. Parfett had access to plans of the GLENCOE that were not available when his first report was prepared, as had Capt. Dussault. After examining these additional plans, Capt. Parfett noted that the plans did not show deep web frames, but did show deep under-deck brackets, which he described as follows at page 3 of his report:

... These deep brackets were spaced every four (4) frames or at a spacing of 7'4". The effect of these deep web brackets would have been more restrictive to easily stowing a mixed general cargo on the vessel than the deep frames contemplated in my original report.

[29]      According to Capt. Parfett, the presence of "deep under-deck brackets" would have reduced the number of cubic feet or metres of cargo that could be stowed in holds no. 1 and 2. Accordingly, the plaintiff would have had to load an even larger quantity of cargo on the deck of the GLENCOE. Obviously, the height of the cargo on the deck, in Capt. Parfett's view, would have exceeded the height he had calculated in preparing his first report, and that is the conclusion in Capt. Parfett's second report.

[30]      I shall now move on to Capt. Dussault's evidence. On October 3, 1996, Capt. Dussault signed two reports: his expert opinion and his counter-opinion. The conclusion in the expert opinion is that the GLENCOE could transport the cargo to Thule "in complete safety". That conclusion reads as follows:

[translation] After doing the calculations set out and demonstrated on the stowage plan, my opinion is that, given the very satisfactory stability (GM), which is well above the recommended minimum, compact stowage in the holds and on-deck stowage of a reasonable height and securely attached, the ship could easily have made the trip in complete safety. In addition, the trip would have been made at the time of year when weather conditions are most favourable.

[31]      The first item addressed by Capt. Dussault in reaching this conclusion is the determination of wasted space, i.e. "broken stowage". At page 5 of his expert opinion, Capt. Dussault tells us that for hold no. 1 he has "allowed" a factor of 105 tonnes for "staple food" that he would stow in this hold and a factor of 15% for the rest of the cargo that he would stow in hold no. 1. He then tells us that these percentages "correspond" to those recognized by J. Leeming in Modern Ship Stowage (Edward W. Sweetman Company: New York, 1963), at page 431. He then says that after examining the relevant plans, "the holds have no web frames so that occasionally space could be gained".

[32]      For hold no. 2, Capt. Dussault "allowed" a factor of 10% for broken stowage. Once again, he tells us that this percentage is consistent with what J. Leeming says in his text.

[33]      Taking these percentages into account, Capt. Dussault is of the opinion that 22,691 cubic feet (642.80 cubic metres) could have been stowed in hold no. 1, and 39,006 cubic feet (1,104.67 cubic metres) in hold no. 2.

[34]      Capt. Dussault then states that he "allowed" a factor of 5% for broken stowage in relation to the cargo loaded on deck. Capt. Dussault then says what cargo he would load on the deck of the GLENCOE and how he would stow it. According to his calculations, he could have loaded 29,328 cubic feet (830.82 cubic metres) on deck.

[35]      For the following reasons, I prefer the opinion of Capt. Parfett to the opinion of Capt. Dussault.

[36]      First, Capt. Dussault, in my opinion, started at the wrong end in determining his broken stowage factors. If we examine the methodology used by Capt. Parfett we see that he prepared his stowage plan having regard to the dimension of the holds and the parameters he set for himself. This led him to a figure for the number of cubic metres that could be loaded in holds no. 1 and 2. In other words, after placing the cargo in holds no. 1 and 2, he found lost volume of 34% for hold no. 1 and 25% for hold no. 2.

[37]      Capt. Dussault, on the other hand, started his process by "allowing" lost volume of 20% and 15% for hold no. 1 and 10% for hold no. 2. He then assumed that he could completely use the space theoretically available. In my view, he could not calculate the percentage of broken stowage before loading his cargo. In support of his contention, Capt. Dussault cited J. Leeming, the author of Modern Ship Stowage. More specifically, Capt. Dussault referred to pages 114 and 115 of Leeming's text.

[38]      At page 2 of his counter-opinion, Capt. Parfett expressed his disagreement with Capt. Dussault's position. Capt. Parfett stated:

... When both Thomas and Leeming speak of loading cargo therefore they are thinking exclusively in relationship to packages of cargo of such a size as to be readily lifted and stowed by hand labour. What was at the time referred to as "unitized" cargo or later "palletized" cargo only commenced to come onto the scene in the later-1950's and through the 1960's and in those days was considered specialized cargo. This tendency to consolidate cargo into large packages gradually increased through to the commencement of the container era in the mid-1960's. All of this came about as a result of the development of the fork-lift and other devices to mechanically handle cargo. All comments of both Thomas and Leeming must therefore be viewed in a historical context and taken with some caution. This is very well emphasized in some of the sections particularly of Leeming quoted and reproduced by Mr. Dussault. I refer to Leeming, page 114 under the heading "Broken Stowage", second paragraph,

"With casks, cylindrical containers, large reels of wire or cable, and irregularly shaped packages, the loss of space is considerably higher than the average, 20 to 25 percent or more being fairly common. On the other hand, when bagged goods or regularly shaped more or less uniform containers such as those carrying canned goods or case oil are being stowed, there is a very small amount of lost space."

It should be noted that all of the items described in the first sentence of that paragraph have long since disappeared from the scene. Bagged goods and canned goods are of course now carried exclusively in containers. Case oil was an important cargo up to the end of Word War II but thereafter largely disappeared. The comments on page 115 of the same book regarding the stowage of casks and barrels, etc. are interesting historical comments but this type of stowage disappeared before I went to sea. Much of the rest of this page is also very interesting history but has very little relationship to anything that has taken place over at least the last 40 years.

It will be noted in later comments of this study that Mr. Dussault has attempted to import the benefits of hand stowage of cargo into his proposed stowage however we must consider that all of the subject cargo was designed to be and was in fact stowed by mechanized handling methods and that these methods create an entirely different result than those contemplated either by Thomas or by Leeming.

A further point to be born in mind is that of scale. The average vessel contemplated by Thomas and Leeming was generally between 8,000-10,000 tons deadweight capacity. The "Glencoe" was approximately 1000 tons deadweight capacity. The average size of package contemplated by the text books is such that can be handled by hand, that is packages between 50-120 lbs. each. The average weight and size of the cargo destined for the "Glencoe" was excess of 2,000 lbs. and excess of 1-cubic meter.

[39]      I agree with Capt. Parfett that the broken stowage factors accepted by Capt. Dussault are unrealistic.

[40]      Second, Capt. Dussault stated the opinion that "the holds have no web frames so that occasionally space could be gained". Capt. Dussault used the expression "vaigres" in French, referring to what Pursey called "web frames" in Merchant Ship Construction. Accordingly, in Capt. Dussault's view, there were no web frames, no deep web frames and no underdeck brackets that might restrict or limit the usable space in the holds of the GLENCOE. On this point, I also prefer the opinion of Capt. Parfett. At page 3 of his counter-opinion, Capt. Parfett responds to Capt. Dussault as follows:

The question of deep web frames is frequently mentioned by Mr. Dussault and will be dealt with in detail by me at this point.

The first point to be made once again is that the reference book "Merchant Ship Construction" by Pursey is again a very outdated book. As an example, it will be noted that all illustrations show riveted construction. Riveted construction was replaced by electric arc welding during and immediately following World War II. A study of the text indicates that some updating of text only has taken place through to the period of approximately 1950.

Mr. Dussault has confused "web frames" with "deep web frames". Pursey speaks about web frames on page 50 and illustrates this form of construction on page 51. Pursey quite properly says that this form of framing disappeared and in fact it probably disappeared in the 1930's.

Reference is made however to pages 28 and 30 where Pursey shows the early development of web frames under the heading "Self Trimming Ship". He similarly covers the point at page 102/103 where again he shows the early development of deep webs and deep web frames as a substitute for pillars.

It is interesting to note on the ship"s plan for the "Glencoe", "Mid-ship Section", that the type of construction mentioned by Pursey to avoid pillaring was followed in the construction of the "Glencoe". Although deep web frames were not used, deep under-deck brackets were used throughout the length of the ship. These deep brackets were spaced every four (4) frames or at a spacing of 7'4". The effect of these deep web brackets would have been more restrictive to easily stowing a mixed general cargo on the vessel than the deep frames contemplated in my original report.

[41]      With respect to Capt. Dussault's comments that he could stow a large portion of the cargo on deck with no difficulty, Capt. Parfett states, at p. 5 of his counter-opinion:

For the reasons above stated and as more fully detailed below, the stability (GM) of this vessel was not satisfactory and was not as calculated. In addition as previously indicated, it is the opinion of the undersigned that for such a very high cargo, adequate securing was impossible. It is noted that Mr. Dussault never mentions to what height in fact he calculated the cargo would be stowed. It is however possible to deduce this figure from the KGs used in the calculation on page 7 and it does appear that Mr. Dussault calculated that the cargo would be approximately 12' high at no. 1 and 15' high at no. 2. It is the opinion of the undersigned that in fact these heights would have been 1' higher on no. 1 and approximately 2 "" higher on no. 2 due to the various factors already indicated however even at the heights contemplated by Mr. Dussault, proper securing of this cargo would have been impossible.

[42]      In my opinion, Capt. Parfett's comments are sound and I accept them. It is important to note, as Capt. Parfett mentions, that Capt. Dussault give no information concerning the height of the cargo he claims to be able to stow on deck. He merely asserts that he could have loaded and stowed a large portion of the cargo on deck. In my view, his report is not satisfactory. It is not enough for an expert to assert, as Capt. Dussault has done, that he can load all the cargo intended for the GLENCOE; he must explain how he will load it, giving as much detail as possible.

[43]      Capt. Parfett appended four sketches to his first report, representing part of holds no. 1 and 2. He explained the sketches as follows (page 6 of the report of March 14, 1996):

Sheet 1 - Figure "A" shows a typical layout of a hold of this type. The sketch is intended to represent a plan view of a horizontal cross-section at approximately mid-height of the hold. Plan "A" shows the space along the sides of the hold which would be occupied by the regular ship"s frames which would normally be covered by cargo battens. Extending into the hold would be Deep Web Frames which would cause further difficulty in the stowage of the cargo. Plan "B" shows the opinion of the undersigned as to the maximum number of one (1) square metre pallets which could be reasonably placed horizontally within this area.

The following plans are a series of vertical cross-sections which would be typical of the cross-section through a hold of this type at various points along its length. We have chosen to show a typical cross-section as deduced from the General Arrangement Plan at frames nos. 109, 99, 89 and 78. Frame no. 108 is the forward end of Hold No. 1 and at that point, the hold is very fine. Frame no. 99 is the frame at which the forward hatch coaming commences. Frame no. 89 is approximately mid-length along the no. 1 hatch and frame no. 78 is approximately two (2) frames before the aft bulkhead of hold no. 1.

[44]      In Appendix 7 to Capt. Dussault's report we find a series of sketches designed to show that Capt. Parfett had not made optimum use of the available space in the holds of the GLENCOE. In his second report, Capt. Parfett expresses his disagreement with Capt. Dussault. For example, with respect to the sketches relating to frames 99 and 108, "elevation of proposed stowage frame 99 - alternative plan" and "elevation of stowage at frame 108 - alternative plan", Capt. Parfett is of the opinion that Capt. Dussault forgot to take into account the third dimension of the packages that he believed he could load in the holds of the GLENCOE: their length. After carefully examining Capt. Dussault's sketches, I have reached the conclusion that Capt. Parfett's opinion is sound.

[45]      To conclude on this question, I accept Capt. Parfett's opinion that the GLENCOE could not have safely received and transported to Thule the cargo of 751.81 metric tonnes intended for it.

2.      Could the defendant resiliate the contract entered into on May 5, 1985?

[46]      The plaintiff's tender concerning Area G was accepted by Transport Canada on May 3, 1985. On that date, as noted earlier, Transport Canada anticipated shipping a cargo of 541.45 metric tonnes to Thule. Under clause 4 of the invitation to tender, the anticipated tonnage could be adjusted up to June 14, 1985, the date when Transport Canada was to inform the plaintiff of the "final tonnage".

[47]      On May 8, 1985, the plaintiff was informed by the defendant that the defendant anticipated shipping a cargo of 751.81 metric tonnes to Thule. In addition, Transport Canada informed the plaintiff that this was not its final tonnage listing.

[48]      It is important to note that on May 3, 1985, John Perrozzino, one of the people at the Coast Guard responsible for administering and coordinating the shipping of goods to the Arctic, was informed by telephone by William Harrison of National Defence that the tonnage of the cargo destined to Thule would exceed the anticipated tonnage of 541.45 metric tonnes, possibly by 300 metric tonnes. It should be recalled that it was on May 3, 1985 that the defendant accepted the plaintiff's tender. On May 7, 1985, Transport Canada received a document entitled "Non-Negotiable Cargo Booking" from National Defence. On May 8, 1985, based on the figures in that document, Transport Canada informed the defendant of the increase in the cargo to be shipped to Thule.

[49]      The telex sent to the plaintiff on May 8, 1985, gives a description of each "commodity" with its tonnage and the percentage increase or decrease in relation to the anticipated tonnage. The telex reads as follows:

TRANSPORT NAVIMEX CANADA INC., QUEBEC, ATTENTION: PRESIDENT

OUR REF SEALIFT 95/85

AREA "G" THULE - ANTICIPATED CARGO ADDITIONS/DELETIONS.

RE: ATTACHMENT 1 TO SCHEDULE A ENTITLED ANTICIPATED KIND AND TONNAGE OF MATERIAL SUPPLIES AND EQUIPMENT AND CONDITIONS OF BAILMENT.

1.      CHANGES HAVE BEEN BOOKED BY SHIPPER - DND.

ANTICIPATED CARGO SHOULD NOW READ:

GROUP

TONNAGE

INCREASE/DECREASE

STAPLE FOOD

105.00

NIL

     CEMENT

     148.06     

+ 129.91

     STEELPIPE

     73.39

+ 17.84

     LUMBER/PLYWOOD

     10.87

+ 8.17

     BLDG MAT

     42.54

- 27.67

     PREFAB

     88.00

+ 88.00

     INSULATION (RIGID)

     110.23

+ 64.26

     MISC

     17.73

- 78.28

     STORES (PALLETS/ TRIWALL)

     88.00

+ 88.00

     POL (CRATES/DRUMS

BOXES)

     60.00

NIL

     TRAILER FLAT DECK

     2.72

- 63.53

     VEHICLE HALF TRACK

     NIL     

- 10.88

     VEHICLE FORK LIFT

     5.27

NIL

     OTHER

     NIL     

- 5.44

     TOTAL

     751.81

+ 210.38

[50]      In view of her conclusion that the GLENCOE could not transport a tonnage of 751.81 metric tonnes, which would, in her opinion, have a volume of 2,709 cubic metres (95,627.7 cubic feet), and in view of the plaintiff's refusal to substitute a ship with larger capacity, the defendant resiliated the contract that had been entered into on May 3, 1985. The plaintiff submits that the defendant could not resiliate the contract. The defendant contends that she was entitled to resiliate the contract. This is the question that I must now answer.

[51]      The defendant's argument is simple. She contends that clause 4 of the invitation to tender is clear and unambiguous. According to Ms. Gadoury, the defendant's counsel, clause 4 provided that Transport Canada could change the tonnage of its cargo up to June 14, 1985. Accordingly, in Ms. Gadoury's submission, there was no limitation or restriction on the number of tonnes that Transport Canada could ship, as long as the tonnage was communicated to the plaintiff no later than June 14, 1985. For example, Transport Canada could have informed the plaintiff on June 14, 1985, that the final tonnage was 5,000 metric tonnes. According to that interpretation of the contract, the plaintiff had to supply a ship with the capacity to transport 5,000 metric tonnes.

[52]      On the other hand, the plaintiff contends that the contract must be interpreted more narrowly. In the plaintiff's view, we cannot interpret clause 4 without having regard to the anticipated cargo. According to Mr. Joli-Coeur, counsel for the plaintiff, the anticipated tonnage is the tonnage that the plaintiff was entitled to expect to receive. Thus, according to that argument, the plaintiff was entitled to expect to receive a cargo of about 541.45 metric tonnes. Otherwise, in Mr. Joli-Coeur's view, it would be impossible for a tenderer to comply with clause 8 of the invitation to tender, which provides that the tenderer must state the name of the ship on board which it intends to carry the cargo. If Transport Canada can list, and therefore ship, a tonnage that far surpasses the anticipated tonnage, how can a tenderer comply with clause 8? In other words, if the anticipated tonnage is not a realistic indication of the tonnage the tenderer will have to transport, it may have to charter or secure rights to other ships, in addition to chartering the ship listed in its tender, in order to provide for the possibility of a tonnage listing far in excess of the anticipated tonnage. According to the plaintiff, this interpretation of clause no. 4 is nonsense. I agree.

[53]      In support of its argument, the plaintiff filed Exhibit P-21, a comparative study for 1975 to 1985 concerning the "Eastern Arctic Sealift Dry Cargo - Variants Report (North Bound Requirements by Contract/Area". This document is a comparative study for Areas A, B, C, E, F, and G. More specifically, the document sets out the anticipated tonnage and final tonnage listing for the years in question. For example, for the year that concerns us, 1985, the document indicates that Transport Canada had declared an anticipated tonnage of 541 metric tonnes for Area G. On the other hand, the document shows that the final tonnage listing given by Transport Canada for that area was 752 metric tonnes, an increase of 211 tonnes over the anticipated tonnage. The following is what the document shows for 1979, 1980, 1981, 1982, 1983 and 1984:

YEAR	ANTICIPATED      TONNAGE	DECLARED      TONNAGE
1979	934 metric tons	724 metric tons
1980	434 metric tons	416 metric tons
1981	408 metric tons	418 metric tons
1982	330 metric tons	366 metric tons
1983	670 metric tons	536 metric tons
1984	334 metric tons	333 metric tons

[54]      The first observation is that the final tonnage exceeded the anticipated tonnage only in 1981, 1982 and 1985. The second observation is that in 1981 and 1982, the final tonnage exceeded the anticipated tonnage by very little. In 1981, the final tonnage exceeded the anticipated tonnage by 18 tonnes, while in 1982 the excess was 36 tonnes. In other words, in 1981 and 1982 and the other years except 1985, the final tonnage simply reflected the anticipated tonnage.

[55]      The plaintiff submits that, based on these figures, it could not have predicted at the time it filed its tender that it would have to transport a cargo with a tonnage of more than 200 tonnes in excess of the anticipated tonnage. The plaintiff submits that, based on these figures, and the adjustment figure of 10% set out in clause 4, it could in no way have anticipated having to transport a cargo in excess of 600 metric tonnes.

[56]      It is important to point out that clause 7(1) of the invitation to tender provided that the cargo had to be transported to Thule in one ship. This requirement was inserted in the tender documents at the request of the U.S. Air Force, the owner of the base where the port of Thule was located. Evidence was submitted to show that Transport Canada tried to obtain permission from the U.S. Air Force to have the cargo transported on board two ships, which would have allowed part of the cargo to be transported on the GLENCOE. Unfortunately, the U.S. Air Force refused to grant permission.

[57]      The plaintiff had to name the ship proposed for the trip to Thule. The trip was therefore to be made on board one ship that was capable of transporting all of the cargo which was to be confirmed no later than June 14, 1985. The ship was to arrive in Montréal read to accept cargo on July 4, 1985, leave Montréal on July 10 and make the delivery between July 20 and 22. The plaintiff had to either be the owner of the ship or have chartered it.

[58]      In order for a contract to be formed there must be an offer, acceptance and consideration. An offer may be defined as the expression of one party's consent to certain definite terms, where the other party to the contract expresses its consent to the same terms. In a case such as this, we must ask what the meaning is of the terms to which the two parties actually consented? Where a dispute arises between the parties in respect of the terms of a contract, those terms must be interpreted on the basis of the reasonable expectations of each of the parties, taking into account the context and nature of the contract, and having regard not only to the intention of one party. In Storer v. Manchester City Council, [1994] 3 All E.R. 824, Lord Denning stated, at page 827:

In contracts you do not look into the actual intent in a man"s mind. You look at what he said and did.

[59]      If the two parties do not agree as to how the contract is to be interpreted, and one of them proposes a reasonable interpretation, that interpretation will prevail. If, on the other hand, both interpretations are reasonable, although different, it cannot be said that the parties have agreed on the subject matter of the contract, and accordingly the contract is deemed never to have existed (Raffles v. Wichelsaus (1964), 159 E.R. 375 (Ex. Ct.)).

[60]      In the instant case, we do not have a situation in which there was no meeting of the minds. On the contrary, in my view, the contract entered into on May 3, 1985, can be given a reasonable interpretation: the one proposed by the plaintiff. In my view, the interpretation proposed by the defendant is unreasonable. The intention of the parties must be determined from the circumstances in which the contract was entered into.

[61]      If we were to accept the interpretation proposed by the defendant, that the cargo to be transported by the plaintiff was subject to no limits, the plaintiff would have been obliged to propose a ship with the capacity to accept a tonnage much higher than the anticipated tonnage for the trip. Another alternative for the plaintiff would have been to obtain rights in a number of ships with varying capacities in order to cover all possibilities. Because operating expenses vary from one ship to another, specifically on the basis of capacity, and because the availability of ships is also limited, the plaintiff's [sic] interpretation is neither reasonable nor justified from a commercial standpoint.

[62]      Accordingly, I am of the view that the defendant could not resiliate the contract it entered into on May 3, 1985.

     3.      What damages has the plaintiff suffered?

[63]      The plaintiff is claiming the sum of $324,278.99, which it calculates as follows:

12.      As the result of a unilateral, wrongful and illegal act by Transport Canada, the plaintiff has suffered the following losses:

-      Cost of chartering the Glencoe:                  $75,000.00

-      Expenses preparatory to stowing:                  $15,000.00

-      Administration and travel expenses:                  $10,000.00

-      Lost profit:                          $224,278.99

     broken down as follows:

     tender amount                      $293,441.23

     less anticipated expenses:                  $163,215.45

                             $130,225.78

     tonnage actually transported for this contract

     having varied from 751.81 to 860.90 metric tonnes,

     if the plaintiff had known in time it would have

     chartered the ship Tera Nordica with a capacity of

     3600 cubic metres with hoisting capacity of

     25 tonnes, which would have enabled it to transport

     an additional 1000 cubic metres at a profit of

     $55.00 per cubic metre:                  $55,000.00

return cargo from the Thule region:              $10,000.00

     Transport of heavy machinery,

     additional profit of                  $10,000.00

     Transport of an additional 100 tonnes

     $173.21 profit per tonne:                  $19,053.21

     TOTAL:                          $324,278.98

[64]      The first cost claimed by the plaintiff is the cost of chartering the GLENCOE. The plaintiff is claiming the sum of $75,000.00.

[65]      The plaintiff's argument is that it had chartered the GLENCOE from its owner. A document entitled "Charter-party agreement" was filed in evidence by the defendant. That document reflects an agreement between D. Frampton & Co. Ltd., the owner of the GLENCOE, and Navigation Harvey & Frères Inc. The document is not dated. It was signed by a representative of the owner and by Joachim Harvey, on behalf of Navigation Harvey & Frères Inc. The signature of Sylvio Thibault appears under the signature of Joachim Harvey.

[66]      Despite the plaintiff's argument, I conclude that it was never a party to the charter-party contract made with the owner of the GLENCOE.

[67]      First, a few words as to the date the charter-party was signed. The president of the plaintiff, Sylvio Thibault, testified that the document was signed on May 16, 1985. When he was examined before a defence was filed, on November 25, 1987, Mr. Thibault was unable to state the date when the charter-party was signed. All he could say was that the charter-party was signed in his office in Québec in 1985. In cross-examination, Ms. Gadoury asked him why he was able to testify at trial that the charter-party was signed on May 16, whereas when he was examined before a defence was filed he had been unable to provide a precise date. Mr. Thibault's answer, which is set out in the transcript of his testimony of April 15, 1996, at page 176, is as follows:

         [TRANSLATION]

         (A)      Because at that time I did not remember, but afterward, from some documents, we were able to ... to review the date and we now know that it was May 16 that it was signed in my office.

         (Q)      "We were able", who is this "we"?

         (A)      Myself and the lawyers went over it. I checked all those documents. I spoke with Capt. Harvey et cetera, and I reached the conclusion that it happened on May 16, was when it was done, at my office.

[68]      It is important to note that Capt. Joachim Harvey, the representative of Navigation Harvey & Frères Inc. who signed the charter-party, did not testify at trial. In my view, the plaintiff should have called Capt. Harvey, since he was beyond a doubt an important, if not crucial participant in terms of the chartering of the GLENCOE. He was also an important participant in terms of certain items claimed by the plaintiff. I shall return to this question shortly.

[69]      On cross-examination of Sylvio Thibault (transcript of April 15, 1996, pages 179 and 180), Ms. Gadoury pointed out to Mr. Thibault that the plaintiff was not a party to the charter-party, to which Mr. Thibault replied:

         [translation] I think that is incorrect, but I do not appear on the first page.

[70]      Ms. Gadoury then asked him:

         [translation] Is TRANSPORT NAVIMEX INC. a party to that agreement?

[71]      Mr. Thibault's answer was as follows:

         [translation] It does not appear in that agreement, ma'am, but it is a party because of my signature at the bottom here.

[72]      In response to that answer, Ms. Gadoury asked him:

         [translation] Nowhere in that document do we see the plaintiff in this case, TRANSPORT NAVIMEX CANADA INC., named?

[73]      Mr. Thibault's answer was:

         [translation] That's right, ma'am, you do not see it, but I know that I paid ...

[74]      I am going to discuss the payments Mr. Thibault claims to have made to the owner of the GLENCOE in a moment; that is, whether Mr. Thibault paid the amounts owing under the charter-party, as he says he did, is a question that I must decide. Moreover, even if Mr. Thibault did make those payments, that does not make the plaintiff a party to the charter-party. As I said earlier, the plaintiff is not, on the face of the document, a party to that contract. Sylvio Thibault's signature appears on it, but in my view he did not sign as representative of the plaintiff. Having regard to the evidence as a whole, Sylvio Thibault's testimony has not satisfied me that the plaintiff was a party to the charter-party.

[75]      It is interesting to note that on April 7, 1988, Mr. Justice Denault of this Court allowed, in part, an application by the owner of the GLENCOE, which was seeking an order homologating an arbitral award against Navigation Harvey & Frères Inc. and Sylvio Thibault. The arbitrators, whose decision was homologated in part by Denault J., had to decide whether Navigation Harvey & Frères Inc. and Sylvio Thibault were required to pay the owner of the GLENCOE the sum of $111,596.99, representing a portion of the cost of chartering the GLENCOE for July, August and September 1985 under the charter-party to which the plaintiff claims to have been a party.

[76]      The arbitrators concluded that Navigation Harvey & Frères Inc. and Sylvio Thibault were parties to the charter-party and that they accordingly had to pay the amount claimed by the owner of the GLENCOE. After the decision and the application by the owner of the GLENCOE to have it homologated, Navigation Harvey & Frères Inc. and Sylvio Thibault asked this Court to set aside the arbitral award.

[77]      Denault J. disposed of Sylvio Thibault's application as follows, at pages 6 and 7 of his reasons:

         [TRANSLATION]

             This defendant alleges in his application that he was never personally a party to the charter-party between Frampton and Navigation Harvey & Frères Inc. In addition, he is not personally contemplated by the relief ordered in the arbitral award, but he is afraid that if the plaintiff were to have that award homologated it would claim payment from him.

             First, the defendant is wrong to argue that he is not contemplated by the charter-party, since he signed it himself in his own name. In a deposition under oath, Joachim Harvey, the president of Navigation Harvey & Frères Inc., in fact confirmed that Sylvio Thibeault had been involved in the project with Frampton because he himself did not speak English. In addition, as he was not an officer of Navigation Harvey & Frères Inc., he could only have signed the charter-party in his personal capacity.

             The argument that he is not contemplated by the relief ordered in the arbitral award carries little weight, since this defendant is plainly specifically contemplated in the body of the award, as set out above, because of his active participation in the project.

             The application by this defendant will therefore be dismissed with costs.

[78]      Denault J. also dismissed the application by Navigation Harvey & Frères Inc., for different reasons.

[79]      The defendant's name does not appear anywhere in the reasons of Denault J. In my opinion, this only confirms the conclusion I have reached, which is that the plaintiff was not a signatory to the charter-party with the owner of the GLENCOE.

[80]      It appears from the reasons of Denault J. that Joachim Harvey, the president of Navigation Harvey & Frères Inc., testified that he had got Sylvio Thibault involved "in the project with Frampton because he himself did not speak English".

[81]      As I mentioned earlier, Joachim Harvey did not testify at the trial. I am of the opinion that it was incumbent on the plaintiff, in the circumstances, to have him testify since he was a key participant with respect to the chartering of the GLENCOE. I can only conclude that the plaintiff did not call him because his testimony would not have been favourable to him. Accordingly, in my view, the plaintiff did not charter the ship GLENCOE and had no rights in that ship.

[82]      Notwithstanding this conclusion, I am now going to address the payments that Sylvio Thibault claims to have made in performing the plaintiff's obligations under the charter-party. The plaintiff is claiming $75,000.00 under that head. According to Mr. Thibault, a payment of $75,000.00 was made on about July 26, 1985. This payment was made by an entity called Navimex Harvey in which the plaintiff had a 50% interest. Accordingly, $37,500 was paid by the plaintiff. According to Mr. Thibault, there were three users of the GLENCOE: the plaintiff, Navigation Harvey & Frères and Navimex Harvey.

[83]      The other payment made by the plaintiff was made pursuant to the arbitral award homologated by Denault J. According to Mr. Thibault, he personally paid $37,500.00 on behalf of the plaintiff. At page 274 of the transcript of April 15, 1996, he stated:

         [translation] That was me personally and that money is owed to me by Transport Navimex.

[84]      The evidence offered by the defendant concerning the payments made to the owner of the GLENCOE is, in my view, insufficient. During his testimony in chief, Sylvio Thibault said that the plaintiff had in fact paid the money claimed, either directly or through its involvement in Navimex Harvey. However, on cross-examination, he changed his testimony and said that he had personally paid at least $37,500.00 for which the plaintiff was indebted to him. His somewhat confused testimony did not impress me. Mr. Thibault did not produce any cheques, correspondence or invoices - in short, any document to show that payments had been made to the owner of the GLENCOE. Since Mr. Thibault did not testify that these payments had been made in cash, there had to be supporting documents in the plaintiff's or Mr. Thibault's records. The plaintiff offered no evidence to show that these documents had disappeared or were not available. Accordingly, in the circumstances, I cannot accept the evidence offered by the plaintiff concerning the payments owing under the charter-party. In any event, in view of my conclusion that the plaintiff was not a party to the charter contract, it had no legal obligation to make payments to the owner of the GLENCOE.

[85]      To conclude on the first item of the claim, the plaintiff is not entitled to the $75,000.00 claimed. First, the plaintiff was unable to show that it had chartered the ship GLENCOE, and second, it has not satisfied me that it made payments in performance of its alleged obligations under the charter contract.

[86]      The second cost claimed by the plaintiff is $15,000.00 under the head of expenses preparatory to stowage. In his examination in chief, at page 91 of the transcript of April 15, 1996, Mr. Thibault explained what this $15,000.00 represented:

         [TRANSLATION] The $15,000 was the bill from Navigation Harvey & Frères for the expenses it had to cover for renting space in its warehouse, renting a platform, renting handling equipment such as forklifts, and also generally being prepared to accept this cargo for Thule because the balance of the cargo was done mainly by Portneuf port.

[87]      Mr. Thibault also explained that the Navigation Harvey & Frères claim was "however subject to settlement of this case", that is, if the plaintiff obtained a favourable judgment, it would pass on $15,000.00 to Navigation Harvey & Frères. Mr. Thibault terminated his examination in chief on this point by saying:

         [TRANSLATION] We were of one mind, we worked on this together and that is what we decided at that point, that the damages would be passed on in the claim in the case.

[88]      Accordingly, given Mr. Thibault's testimony, the agreement between the plaintiff and/or Mr. Thibault and Navigation Harvey & Frères is that if the plaintiff obtains judgment in its favour, it will repay the $15,000.00. If the plaintiff does not obtain a favourable judgment, it will not have to reimburse Navigation Harvey & Frères.

[89]      Mr. Thibault did not file any invoices or other supporting documents. In addition, the plaintiff did not call Mr. Harvey, who was apparently the person who could have enlightened the Court concerning this portion of the plaintiff's claim. In my view, there is no real evidence concerning the costs covered by the $15,000.00 claimed by the plaintiff. In other words, the evidence offered by the plaintiff is not sufficient for me to be able to allow him the expense claimed.

[90]      The plaintiff is claiming $10,000 as administration and travel expenses. As set out in Exhibit P-4, that amount is calculated as follows:

     ADMINISTRATION

    

     AND TRAVEL EXPENSES

2 TRIPS TO OTTAWA AND SUBMISSION     

OF THE TENDER

1900 KM X 0.30      $ 570.00

MEALS:      150.00

TRIP BY CAPT.      570.00

MEETING ROOM MONTRÉAL      40.00

MISCELLANEOUS      50.00

OFFICE EXPENSES      $5,500.00

TELECOMMUNICATIONS     

APRIL, MAY, JUNE      6,880.00

TIME, SYLVIO THIBEAULT      3,120.00

    

     $10,000.00

[91]      The first two items include mileage and meal expenses incurred for two trips by Mr. Thibault to Ottawa, including one to deliver the tender. In my view, it is clear that the expenses incurred before the contract was awarded by Transport Canada are not reimbursable. The second trip was made to attend a meeting with representatives of Transport Canada. This claim is therefore justified, and even though Mr. Thibault did not file any supporting documents, I would have been prepared to allow the plaintiff the sum of $285.00 if it had satisfied me that it had chartered the GLENCOE.

[92]      The third item represents Capt. Frampton's travel expenses for attending the same meeting in Ottawa. No bills or other supporting documents were filed in evidence. Accordingly, there is no evidence to show that Capt. Frampton, who has since died, was reimbursed for these expenses.

[93]      The next two items are expenses for renting a meeting room, and "miscellaneous" expenses representing parking charges, etc. Here again, no documents were presented in support of these amounts.

[94]      The next amount is $6,500.00, which represents, according to Sylvio Thibault's testimony, office expenses, telecommunications, etc., for April, May and June 1985. Mr. Thibault testified that his entire office had been occupied with this project. Lastly, he is claiming $3,120.00 for his fees. These amounts are also not supported by bills or other supporting documents, and should not be reimbursed, particularly in terms of the expenses incurred in April, when the contract had not yet been awarded. In order to obtain reimbursement of the expenses it incurred after the contract was awarded, the plaintiff should have been able, in my view, to prove that they were in fact engendered by the contract, and that they were actually incurred. In terms of Mr. Thibault's fees, the plaintiff has not satisfied me that the defendant is responsible for Mr. Thibault's salary. Although this item is headed "fees", there is no evidence that Mr. Thibault was entitled to be paid fees by the plaintiff for the work done in connection with the contract signed on May 3, 1985. I must assume that Mr. Thibault received or was entitled to receive a salary from the plaintiff.

[95]      Lastly, the plaintiff is claiming $224,478.99 for the loss of profits it claims to have experienced. Since the plaintiff has not satisfied me that it had chartered the GLENCOE, it cannot, in my view, have incurred any loss of profits. Although that is sufficient to dispose of this item of the claim, I shall nonetheless address this item as if the plaintiff were entitled to it. The first amount that makes up this last item is $130,225.78, representing the amount of the tender: $293,441.23 less anticipated expenses of $163,215.45. In theory, loss of profits is a justified claim. However, the plaintiff admits that it based its calculations on a tonnage of 751 tonnes, based on the final cargo as indicated on the revised listing, which the ship chartered, the GLENCOE, would not have been able to transport.

[96]      The plaintiff argued that the increase in the tonnage was unreasonable. On this point, I found for the plaintiff. Accordingly, the plaintiff was entitled to expect a profit based on the anticipated tonnage of 541.45 tonnes, plus or minus 10%. The loss of profits should be calculated on the basis of that figure.

[97]      The other amounts that make up the lost profits are entirely unjustified. They consist of various amounts relating to other contracts that would have resulted from the chartering of a larger ship and from a return cargo from Thule. These are vague suppositions which are not supported in any way by the evidence.

[98]      In conclusion, the evidence offered by the plaintiff in support of its claim is to all intents and purposes non-existent. With the exception of Sylvio Thibault's assertions, there is no evidence in the record. It is surprising that the plaintiff was unable to produce relevant documents to support its claim: cheques, invoices, correspondence between the plaintiff and the owner of the GLENCOE and Navigation Harvey & Frères Inc., etc. In addition, as I indicated earlier, Joachim Harvey's failure to testify is difficult, if not impossible, to understand.

[99]      Since the plaintiff has not established that it suffered damages as a result of the resiliation of the contract by the defendant, its action must be dismissed.

[100]      Given that I have concluded that the defendant could not resiliate the contract entered into on May 3, 1985, the action will be dismissed without costs.

                                         "MARC NADON"

                                         Judge

Ottawa, Ontario

December 22, 1997

Certified true translation

C. Delon, LL.L.

     FEDERAL COURT OF CANADA

     TRIAL DIVISION

     NAMES OF COUNSEL AND SOLICITORS OF RECORD

COURT FILE NO:      T-1483-86

STYLE OF CAUSE:      TRANSPORT NAVIMEX CANADA INC. v. HER MAJESTY THE QUEEN

PLACE OF HEARING:      QUÉBEC

DATE OF HEARING:      APRIL 15, 16, 17, 18 AND 19, 1996

     SEPTEMBER 9, 10 AND 11, 1996

     JANUARY 13, 14, 15, 16 AND 17, 1997

PLACE OF HEARING      OTTAWA

DATE OF HEARING      FEBRUARY 1997

REASONS FOR JUDGMENT OF NADON J.

DATED:      DECEMBER 22, 1997

APPEARANCES:

ANDRÉ JOLI-COEUR AND LOUIS RIVERIN          FOR THE PLAINTIFF

SYLVIE GADOURY              FOR THE DEFENDANT

SOLICITORS OF RECORD:

JOLI-COEUR, LACASSE, SIMARD,          FOR THE PLAINTIFF

NORMAND ET ASSOCIÉS

STE-FOY, QUEBEC

GEORGE THOMSON              FOR THE DEFENDANT

DEPUTY ATTORNEY GENERAL OF CANADA

__________________

     ¹      This concept will be explained later in the judgment.