Van Doosselaere v. Unispeed Group Inc., docket T-1452-92

     T-1452-92

BETWEEN:

     ME THIERRY VAN DOOSSELAERE

     Trustee, Es-Qualité, Representative

     of United Maritime Belgium N.V.

     Plaintiff

     - and -

     UNISPEED GROUP INC. and

     SGS SUPERVISION SERVICES INC.

     Defendants

     REASONS FOR JUDGMENT

ROULEAU, J.

     This action, commenced in June of 1992, seeks to recover the sum of 178,223.92 Deutch Marks ($130,674.00 Canadian) for excessive freight charges paid by the plaintiff to the defendant Unispeed Group Inc. ("Unispeed") for the carriage of a cargo by sea from Sorel, Quebec to Casablanca, Morocco. The claim was initially brought by Alfons Koster International Forwarders Ltd. ("Koster") of Antwerp, Belgium. The style of cause describing the plaintiff was amended in February of 1994 to read United Maritime Belgium N.V. and subsequently amended again in April of 1994 to read Me Thierry Van Doosselaere, Syndic, es-qualité representant United Maritime Belgium N.V., since the plaintiff filed for bankruptcy in 1994 and the action was carried on by the trustee. The principal behind Koster was Mr. Marc De Wert.

     The plaintiff, an international freightforwarder, had its office in Antwerp, Belgium and was associated with a shipping agent in Morocco known as Janismar Transport International ("Janismar"). Sometime during the early part of 1991, the Office national de l'Energie of Morocco ("O.N.E.") purchased creosoted wood telephone poles from Domtar Inc. in Canada and were looking for agents to handle the transportation of the cargo from Quebec to Casablanca.

     Negotiations between Koster and the defendant Unispeed, a carrier of goods for reward operating out of the City of Montreal, commenced on April 18, 1991, at which time Koster requested a price quotation for the transportation of 1486 metric tons/2314 cubic metres of the creosoted wood poles sold by Domtar to O.N.E.. In July of 1991, Koster booked space with Unispeed for the transportation of the telephone poles from Quebec to Casablanca at a rate of 85 Deutch Marks per cubic meter. In turn, Koster committed at a fixed price through Janismar with O.N.E., the consignee.

     During the course of loading the poles onto the vessel, it was discovered that the cargo occupied more space on the vessel than had been anticipated. Unispeed demanded a greater fee for completing the contract of carriage, most of which the plaintiff was unable to recover from its client. It is now seeking to recover what is alleged to be the excessive freight charges on the grounds that there was a breach of the agreement with Unispeed.

     The defendant Supervision Services Inc. ("S.G.S.") was retained by the plaintiff to measure the space occupied by the cargo after it had been partially loaded on board the vessel M.V. LIPNO at the Port of Sorel, Quebec, and at Quebec City where the balance of the loading was concluded. The plaintiff alleges that S.G.S. failed in its duty to properly execute its mandate on behalf of the plaintiff, having incorrectly reported the space that the cargo occupied in holds No. 1 and No. 4 on board the vessel. In addition, S.G.S. is alleged to have failed in its duty to properly measure the remaining bundles of cargo on the dock. This resulted in the plaintiff being required to advance a greater sum to Unispeed than it would have had to pay had S.G.S. properly performed the measuring service it was retained for.

     The facts leading up to this action are complex but essential to a proper determination of the litigation.

     Mr. De Wert, having been in the freightforwarding business for some time in Europe, was familiar with Unishipping S.A.R.L. Paris and was aware of some working relationship between the European based company and Unispeed of Montreal. He contacted Unispeed and enquired if it would be interested in undertaking the carriage of the creosoted poles. In a telex dated April 18, 1991, De Wert requested a price quotation for the transportation of 1486 metric tons/2314 cubic metres of poles, for transportation from Sorel to Casablanca, which would be ready for shipment sometime in June or July.

     Unispeed replied on the same day that it could arrange transportation of the cargo and would name a vessel within twenty days of knowing the exact date that it could accept delivery. It quoted a price of $95 U.S. per ton. Approximately two months later, on June 25, 1991, Mr. De Wert advised the defendant that it had been confirmed the cargo would be available for loading near the end of July and requested confirmation of Unispeed's final price. On July 5, 1991, Unispeed affirmed that it would transport the creosoted poles under deck on the vessel M.V. ORAVA at a price of $58 U.S. per cubic meter with loading to take place between July 21 and 25, 1991.

     Thereafter, a number of telexes were exchanged between the parties. There was some question as to whether the cargo could be shipped from Quebec or Halifax. On July 12, 1991, Unispeed received a telex from Mr. De Wert indicating that had received confirmation from another carrier to transport the poles from Halifax to Casablanca at a rate of 87 Deutch Marks per cubic meter. Unispeed responded by telex dated July 18, 1991, that it was prepared to carry the freight "at 87 Deutch Marks per cubic meter for the shipment containing approximately 2,500 cubic metres".

     On July 26, 1991, the defendant was advised that the goods would be ready for shipment at the end of the month for loading at the Port of Sorel. Mr. De Wert also requested confirmation of the freight rate of 87 Deutch Marks to Casablanca and requested nomination of a vessel. On the same date, Unispeed replied that it could accommodate 1,500 metric tons, approximately 2,500 cubic metres of poles, Sorel F.O.B. Casablanca, under deck at the rate of 85 Deutch Marks per cubic meter. It also requested that Mr. De Wert "decide and confirm today due to lack of space". The defendant named the vessel M.V. BEROUNKA, estimated Port of Sorel week 32.

     Mr. De Wert then expressed some concern with respect to the availability of the vessel and requested an urgent response to his enquiry from Unispeed. The defendant however, could apparently not confirm the vessel. On August 5, 1991, Mr. De Wert again communicated with Unispeed in order to confirm a vessel no later than August 10, 1991. He advised Unispeed that he had contacted agents Wisser & Wisser and M.G. Shipping and had been told that he should withdraw his commitment with the defendant. Upon learning that the plaintiff was seeking another carrier, Unispeed agreed to nominate a vessel and confirmed the freight rate of 85 Deutch Marks per cubic meter. Mr. De Wert then confirmed his cancellation with M.G. Shipping and provided Unispeed with the particulars as to who it should contact at Domtar's head office in Montreal in order to advise of the arrangement. The closing line of the plaintiff's telex stated "also inform as already asked the name of vessel and approximate date of loading as the undersigned will come over".

     When the defendant once again failed to reply, Mr. De Wert sent another telex on August 12, 1991, requesting confirmation of the vessel and loading date. Unispeed replied that "we will today or latest tomorrow morning provide the name of vessel and date of loading". A number of telephone conferences between the parties then ensued and on August 22, 1991, the plaintiff telexed Unispeed asking for confirmation of the exact loading date and referring to the vessel M.V. OTTAVA. On the same date, Unispeed confirmed that the M.V. LIPNO "will be in Sorel second week of September for loading 1512 tons of poles to discharge in Casablanca as per our fixed terms".

     On August 23, 1991, the plaintiff asked for an explanation with respect to the change of vessel and informed Unispeed that if loading did not take place on August 26, 1991, as previously agreed, the plaintiff would lose a guarantee of 39000 Deutch Marks, would lose its customer O.N.E., and would be at risk of litigation for failure to fulfil its contract. Unispeed replied that the M.V. OTTAVA had been delayed in loading at a port in Brazil due to a strike. On August 27 and 29, and on September 2 - 5, 1991, the plaintiff repeatedly asked Unispeed for an official report concerning the strike in order to convey the report to O.N.E., which was becomingly increasingly upset over the entire situation. No response to these requests was ever made by Unispeed. On September 2, 1991, the plaintiff again telexed the defendant, referring to the previous communique to which no reply was ever received. The telex also stated "Please confirm LIPNO in position on the 9th of September for loading". The defendant was again warned that the plaintiff was at risk of losing its customer.

     Finally, on September 16, 1991, Unispeed telexed Mr. De Wert that it would be loading the cargo September 23 - 25, depending on the weather. As a result of all the procrastination, Domtar telexed O.N.E. that Unispeed had once again communicated a change in the departure date and that loading on the M.V. LIPNO would take place on September 25, 1991. Nevertheless, there was a further delay, and following a telephone conversation between Mr. De Wert and the defendant, Unispeed confirmed by telex dated September 19, 1991, that the loading would take place on September 27, 1991, that the poles would be loaded under deck as originally agreed, that the vessel would then proceed to Quebec City for a final stop for other cargo before departing for Casablanca, and, that the expected date of arrival was between the 13th and 16th of October, weather permitting.

     The loading in Sorel finally took place on October 3, 1991. Mr. De Wert flew to Montreal, and upon his arrival attended at the offices of Unispeed. While there, he and Mr. Hallack, Unispeed's principal, received a message that sixty bundles of twelve metre poles and six hundred and seventy-six bundles of ten meter poles had been loaded on board the vessel. However, the cargo in fact occupied in excess of 3,500 cubic metres of space and there remained 1,500 cubic metres of poles on the dock. There was no more space under deck to accommodate the remaining cargo.

     Mr. De Wert then telexed Domtar from Unispeed's office and advised them that the actual cubic metres of space was contrary to what he had been initially told; namely that there would be 2,314 cubic metres of poles for a total weight of 1,486 tons. He explained that due to the discrepancy, some of the cargo would have to be loaded on deck and requested that Domtar telex O.N.E. that there had been a mistake in its measurement insofar as there was in fact 5,125.10 cubic metres instead of 2,314 cubic metres as Domtar had originally indicated. Domtar's reply was as follows:

It appears that your official measure company at Sorel has taken the total space occupied by the bundles, including the void space, whereas the measurement on our pro forma is cubicle of solid wood which we sold to O.N.E. and which by no means has anything to do with displacement. We do not accept your position and your problem is with the people with whom you contracted.

     O.N.E. would not accept partial delivery and wanted the entire shipment or it would cancel. Mr. De Wert determined that he should have an independent surveyor measure the cargo and contacted McLean Kennedy Inc. requesting that it retain the defendant S.G.S. for that purpose. On October 7, 1991, S.G.S.'s marine surveyor, Gilles Dallaire, went to the Port of Quebec in order to measure the volume of the cargo loaded at Sorel and the cargo to be loaded at Quebec. The following day, S.G.S. issued a Survey Report that there was approximately 3,500 cubic metres loaded at Sorel and there remained almost 1,600 cubic metres on the dock which had not yet been accommodated.

     It was not until a few days later that Mr. De Wert was informed that Mr. Dallaire had not entered the holds on the vessel in order to accurately measure the contents. The following is a summary of the surveyor's explanation as to how S.G.S. proceeded:

1. We were appointed by McLean Kennedy, Mr. Ross Baldwin, (over the phone) to measure the bundles of telephones poles stowed on the M.V. "Lipno" in holds 1 and 4 (t'ween decks) took place in Sorel and Mr. Baldwin believed that the cubic capacity of the bundles was greater than described by the shipper since they have to leave part of the shipment in Sorel.

2. We met with the captain on October 04, 1991, at section 101, Port of Quebec. Holds 1 and 4 were full and we were unable to enter and measure the bundles. The inspector advised McLean Kennedy.

3. Our client informed us that the remaining bundles in Sorel were transported to Quebec and requested that we measure the bundles at section 101, Port of Quebec. On October 7, 1991, we measured some bundles at random on the dock (10 poles per bundle) and calculated an average volume to holds 1 and 4. The number of bundles in holds 1 and 4 were given to us by the captain of the M.V. "Lipno". The reported stowage factors were calculated.

We had nothing to do with the loading of the vessel and have been told that the bundles on section 101 were loaded on deck.

     Because of the space required both under and above deck for transporting the cargo, the plaintiff was called upon to pay additional charges. On October 9, 1991, Unispeed demanded that the extra charges be paid within five banking days before the vessel's arrival at Casablanca, otherwise the cargo would not be released and it would not provide a clean Bill of Lading. On October 9, 1991, having no alternative, Mr. De Wert agreed to pay the excess but advised Unispeed that he would be appointing an independent surveyor to assess the cargo on arrival. The agreement between the Mr. De Wert and Unispeed was that the plaintiff would pay the ocean freight charges "based upon the final measurement report of SGS".

     The M.V. LIPNO arrived in Casablanca on October 23, 1991. Mr. De Wert made it clear to Unispeed that he contested the accuracy of S.G.S.'s October 8, 1991 report. Accordingly, two independent marine surveyors, Mr. Farouk, appointed by O.N.E., and Mr. Sbihi, appointed by the plaintiff, attended at the discharge of the cargo during the period of October 24 to 26, 1991, in order to remeasure the cubic volume of the wood poles. Mr. Sbihi's instructions were to measure the cubic volume of the bundles while Mr. Farouk was to measure the cubic volume of the wood poles themselves. The plaintiff wanted both experts to conduct their survey in this manner so that S.G.S. and Unispeed would not subsequently contest the Moroccan surveyor's reports.

     Following the measurement, it was apparent that there was considerable discrepancy between the actual space occupied by the bundles of poles and the unoccupied or vacant space in the cargo holds for which the plaintiff had been charged, as well as the space occupied on the deck. Both experts came to the same conclusion that the volume of space occupied by the bundles of poles on board the vessel in the holds, as well as on deck, amounted to 3,214 cubic metres, while the plaintiff had paid Unispeed for in excess of 5,200 metres of space. O.N.E. accepted the Morrocan expert's reports. Accordingly, it paid the plaintiff for the transportation of 3,214 cubic metres, rather than the 2,314 cubic metres originally agreed to.

     Mr. De Wert then claimed a refund from Unispeed. In a telex dated October 28, 1991, Mr. Hallack indicated that he could not make that decision himself and would have to consult with his head office in Paris. He stated however, that he would have great difficulty explaining the discrepancies to his head office since the charges were based on the S.G.S. report which Mr. De Wert had requested and suggested that the plaintiff attempt to settle the matter with O.N.E.. On November 4, 1991, Unispeed advised the plaintiff that its head office in Paris would not accept any reduction in price nor refund any money.

     The plaintiff now brings its action in this Court, claiming that it made an overpayment to Unispeed and that it is entitled to a reimbursement of the monies that it paid, under mistake, on the cargo volume as determined by the defendant S.G.S.

     Against this background, the evidence submitted at trial established a number of pertinent facts. At the outset, it should be noted that the telephone poles in question each had a diameter of twenty centimetres at the base and were tapered from the top down towards a larger base. Ten poles made up one bundle; the poles were cross-stacked in such a way that at each end there were five bases and five tops, so that the dimension of the surface at each end of a bundle remained constant whether the length of the poles was ten or twelve metres. Although counsel for the defendant S.G.S. attempted to make an issue of whether the poles had been described as solid or not, that question has no bearing whatsoever on the matters raised in the litigation. Solid logs or hollow logs will occupy the same space and the confirmed price for transporting the cargo was not by weight but by cubic metres. This argument was nothing more than a smoke screen.

     The evidence and the documents which I have referred to above were introduced at trial primarily through the witness Mr. De Wert. From the outset, I found him to be a very straightforward and credible witness. He testified that as a result of this unfortunate transaction, his company is now bankrupt and he has suffered considerable personal financial loss as well.

     His uncontroverted evidence was that he had been told by Domtar that the volume of the wood poles would approximate 2,314 cubic metres. He also stated that he had insisted that the poles be measured by the defendant S.G.S. because he knew the company and had enjoyed good business relations with it in the past. Mr. De Wert testified that the agreement with Unispeed was that the freight rate would be paid according to the official measurements of S.G.S. and its report of October 8, 1991. He paid Unispeed according to S.G.S.'s report because the poles would otherwise never have left for Casablanca or he would not have obtained a clean Bill of Lading upon arrival.

     However, the most compelling evidence before the Court was the expert evidence of Mr. Farouk, a highly qualified marine surveyor, who was retained by the plaintiff to measure the cargo upon its arrival in Casablanca. I found his testimony to be beyond reproach and have fully adopted his professional opinions. He indicated that upon being retained, he attended at the dock in Casablanca in the early morning hours of the day following the arrival of the vessel. He stated that the portion of the cargo that had been placed on deck had travelled well, although most of the bundles that were removed from the holds were loose because the metal rings that lashed them together had come apart. Mr. Farouk testified that both he and Mr. Sbihi measured one bundle during unloading while suspended and that it contained the requisite ten logs. Based on his measurement, he concluded that a bundle of ten logs, including the space that is lost between the logs, for the entire cargo of 736 bundles, amounted to 3,214 cubic metres

     In his testimony, Mr. Farouk was highly critical of S.G.S.'s report of October 8, 1991, on the grounds that Mr. Dallaire had measured the cubic metres of the bundles on the dock at Quebec City, rather than the volume of space the poles would occupy when stored on the vessel which was his mandate. He testified that generally, in the international scheme of things, when transporting bundles of poles, the proper method is to measure the cubic metres and add approximately 30% of that calculation for the lost space that exists between the poles strapped in bundles. He also pointed out, quite rightly, that only Unispeed could have been aware of the dimensions of the holds of the vessel and their capacity to receive poles since only it would know the interior structure of the vessel, its dimensions and any possible obstructions. Clearly, an individual in Mr. De Wert's position, communicating from Antwerp, could not have known of these physical amenities.

     Mr. Farouk's expert opinion, was that the manner in which Domtar described the cargo is generally accepted in the shipping industry, being based on approximately 1.5 cubic metres per ton of wood. Since the cargo in this case involved approximately 1,500 tons, this would equal 2,250 cubic metres more or less. In his view, with which I entirely concur, someone experienced in the trade could have made the proper calculations based on the description of the cargo as provided by Domtar. He testified that it is quite acceptable in maritime practice to offer a price, not necessarily on the volume of the merchandise, but on the space that it will occupy, and that the space required to store the volume of cargo will vary from vessel to vessel and from hold to hold.

     In conclusion, Mr. Farouk's evidence was that only the party who offers the price to carry the goods can know the stowage factor since it is the only who knows the vessel to be chartered and its dimensions. It is the carrier therefore, such as Unispeed, which is responsible for the stowage plan. In his opinion, it was obvious here that in light of the stowage plan, it was impossible to put all the poles in Holds 1 and 4. Specifically, there was approximately 40% of lost space in Hold 1 and approximately 20% in Hold 2. There was no question in his mind, and I accept his view, that Unispeed should have been aware of these facts.

     Having examined all of the evidence and considering the submissions made by the parties, as well as the viva voce testimony of the witnesses and experts, it is my conclusion that it is the evidence of Mr. Farouk which is the most credible and in accord with the facts.

     The other key witness was Mr. Hallack, principal of the defendant Unispeed. I find as a fact that the witness had little or no experience in the transportation of telephone poles or poles of any kind. What does emerge from the evidence is that Unispeed was desperate for business and was not sufficiently experienced to have undertaken the carrying commitment in question.

     Furthermore, there were a number of contradictions and gaps in Mr. Hallack's evidence. The documentary evidence shows that he kept stalling Mr. De Wert until he could secure a vessel to transport the cargo. There was never any explanation proffered to the Court as to what had become of the vessels M.V. BEROUNKA, M.V. OTTAVA or the M.V. ORAVA. What did become very clear during the course of the trial was that Mr. Hallack was not telling the truth when he advised Mr. De Wert that there had been a strike in Brazil on a vessel named during the negotiations. Not only did he tell Mr. De Wert this falsehood, he did so knowing it would be passed on to the plaintiff's client, O.N.E.. This course of conduct affected Mr. Hallack's credibility as a witness in this trial.

     Following his examination and cross-examination, I asked Mr. Hallack how he normally set a price for the carriage of certain cargo. His answer was that supply and demand was the first and foremost factor. His approach is not, in other words, what one would expect from a competent freightforwarder, which would be consideration of the dimensions of the cargo and the space it will occupy. It was also quite apparent that when he undertook to carry the goods and quoted Mr. De Wert a price, Mr. Hallack had absolutely no idea which vessel he would be retaining. Accordingly, although Unispeed knew in July of 1991, how many poles were to be loaded, the dimension of the poles, the cubic metres as well as the weight of the poles, it did not know whether the vessel, which would in the end be used to carry the cargo, would be able to accommodate it.

     Unispeed nevertheless maintains, that the plaintiff agreed to pay the freight charges based upon S.G.S.'s measurement of the cargo and its report of October 8, 1991. Accordingly, even though that measurement was in error, it argues that the plaintiff is bound by the agreement and is not entitled to a reimbursement for the overpayment of freight charges.

     I cannot accept that proposition. First, it is only common sense that a reasonable and prudent shipowner or charterer who undertakes the carriage of poles would know, or ought to know, the stowage factor of those poles. Unispeed did not have that knowledge because it was inexperienced and ill-prepared to undertake the carriage of such cargo. The evidence confirms that Unispeed made a mistake from the start by wrongly assessing how much space the wood poles would occupy. It is an established fact that poles are transported in bundles. Unlike a knowledgeable carrier, who would not assume it was being asked to carry loose poles, and who would expect them to be bundled for ease, safety and speed of loading and discharging, and as a means of minimizing damage, Unispeed had no experience in the carriage of this type of cargo. If it had any doubts, Domtar was in the same city and they could have contacted them at will.

     This error was then compounded by the fact that the defendant had absolutely no idea which vessel was going to be used to carry the cargo and therefore no knowledge of the structure or dimensions of the vessel. In Sorel, when all of the poles would not fit on board, Unispeed, realizing its error, attempted to lay the blame on Domtar and then on the plaintiff itself.

     Second, the expert testimony of Mr. Farouk and Mr. Sbihi is conclusive and leaves no doubt that S.G.S.'s report of October 8, 1991, was wrong. All of the documentary and viva voce evidence leads quite explicitly to that deduction. That is the reason that O.N.E. paid the plaintiff on the basis of 3,214 cubic metres rather than 2,314 cubic metres. Nor is there any question that it was the exaggeration of the space occupied by the wood poles in S.G.S.'s report which resulted in the plaintiff overpaying Unispeed for the transport of the poles. Although Mr. De Wert vigorously objected, he was left with no alternative but to pay.

     It is, in my opinion, trite law that when a professional company such as S.G.S. is retained to submit a survey report to a client, it bears an obligation to prepare an accurate and reliable one. A professional organization such as S.G.S., which undertakes to supply information, is subject to a relative standard of care defined by a balancing of the known use of the information and the potential loss if the information it supplies is flawed. A party such as the plaintiff, which is seeking the information, can reasonably expect to hold the information giver, such as S.G.S., to a duty of care in circumstances where the information giver is manifestly aware of the use to which the information is to be put and supplies it for that very purpose.

     Accordingly, the plaintiff here was certainly entitled to rely upon S.G.S.'s expertise and ability to supply it with a valid and precise report of the cubic volume of intaken cargo transported by Unispeed aboard the M.V. LIPNO in October of 1991. It was the responsibility of S.G.S., knowing that its report would serve as the basis of another transaction involving its client, to take the kind of care and diligence which any client in the plaintiff's position would reasonably expect.

     The evidence discloses that S.G.S. failed in this duty. The defendant concedes that its surveyor, Mr. Dallaire, did not go on board the vessel in Quebec to measure the cargo, but instead merely relied upon what he was told by the captain of the ship. Although Mr. Dallaire testified that he measured the cubic metres of the bundles on the dock, I simply cannot believe his evidence in this regard. It is not mathematically possible that a bundle of ten poles would measure at the base or width 0.96 metres and have a height of 0.72 metres. The evidence before the Court is that a pole had a diameter of 20 centimetres. It would therefore take approximately 5 poles to arrive at the width or base of a bundle (0.96 metres). To arrive at a height of 7.2 metres would take three and a half poles. It would therefore have taken at least 17 " poles to fill the space occupied by one bundle according to Mr. Dallaire's measurement. Since a bundle contained only ten poles, he should have in his own mind questioned the dimensions given him by the Captain of the vessel. A mere visual inspection on his part would have revealed the inaccuracy of the measurements given him by the Captain which Mr. Dallaire adopted as his own.

     The plaintiff suffered as a result of this gross negligence and S.G.S.'s breach of its contractual obligations in the preparation of the report; a report upon which the plaintiff was entitled to rely and upon which S.G.S. knew it was relying for the purposes of the agreement with Unispeed. Because of S.G.S.'s fallacious report, there was an error in the cubic volume measured. Since the report formed the basis of the agreement between the plaintiff and Unispeed, it constituted an indisputable breach of a material term of that agreement.

     This was the approach adopted by the Supreme Court of Canada in [1978] 1 S.C.R. 907">Resolute Shipping v. Jasmin Construction Inc., [1978] 1 S.C.R. 907. In that case Jasmin had contracted with [1978] 1 S.C.R. 907">Resolute Shipping for the transportation of fourteen mobile units on the deck of its vessel from Quebec to Baffin Island at a fixed price of $14,000.00 per unit. Jasmin Construction had estimated the weight of the units at 20,000 pounds each, plus two units at 30,000 pound each. When [1978] 1 S.C.R. 907">Resolute Shipping tried to load the units on board its vessel, it found that Jasmin Construction had underestimated the weight of the units, thereby obliging [1978] 1 S.C.R. 907">Resolute Shipping to hire additional crews and cranes to load the said units on board. The shipping company then sued Jasmin Construction for breach of contract.

     The Supreme Court of Canada stated at pp. 910 and 911-12 as follows:

In my opinion the fact that the weight of these units differed so excessively from that which had been agreed to constituted a breach of a material term of the contract and it is apparent that this was the view adopted by the learned trial judge who stated:

I cannot accept defendant's contention that the weight of the units was not material since the price quoted did not depend on the weight but was for a fixed price of $14,000 per unit. Neither can I accept defendant's contention that plaintiff was imprudent in not arranging to have the units weighted before commencing loading them. The units in question were manufactured according to defendant's own plans and specifications by the Treco Company, a manufacturer acting for defendant. It was defendant who furnished to plaintiff the information as to their approximate weights, allegedly having obtained this information from Treco, and these weights were included in the contract.

     . . .

The Court of Appeal appears to have adopted the view that the contractual obligation of the respondent was fulfilled so long as it delivered "14 house trailers" to the dockside irrespective of their weight, notwithstanding the fact that the approximate weights had been stipulated as a term of the contract. With all respect, I cannot accept this proposition and it is even more difficult to accept the statement that "the fact that both parties might have been mistaken as to the weight of these objects did not constitute a breach of the contract on the part of the appellant". This latter statement appears to me to ignore the fact that the respondent was in a position to know the weights of the units which had been constructed according to Jasmin's own specifications, whereas in signing the contract the appellant could only rely on Jasmin's undertaking supported by the statement of its representative that there was nothing to worry about as the units probably weighed less that the figures given. The appellant had no way of knowing that the respondent was presenting it with a deck load 30 per cent heavier than its undertaking had indicated. This does not appear to me to be a situation which can be characterized as mutual mistake; there is no doubt that the appellant was mistaken in relying on the respondent's undertaking as to weight, but there is nothing to suggest that the respondent had any reason to be mistaken as to the weight of the units which it had itself designed and caused to be manufactured . . .

                     (emphasis added)

     I am satisfied therefore, based on all of the evidence, that the plaintiff was required to overpay Unispeed for carriage of the poles, and that this was the result of both the incompetence of Unispeed and S.G.S.'s negligence in preparing its report of October 8, 1991. Under the circumstances, it is appropriate that both defendant's be held jointly and severally liable for the damages suffered by the plaintiff.

     For these reasons, the defendants are to jointly and severally pay to the plaintiff the sum of $130,674.00 Canadian, together with interest at the prevailing Belgian commercial lending rate plus 2% per annum, compounded semi-annually, from October 15, 1991, through to the date of Judgment as well as post-Judgment interest at the same rate until payment. I wish to add that had Mr. De Wert been named as a plaintiff and sought punitive damages, I would have been inclined to make such an award. The Court is prepared to entertain a separate application with respect to costs.

JUDGE

OTTAWA, Ontario

January 27, 1997