155501 Canada Inc. v. Air Canada, docket T-1740-94

T-1740-94

BETWEEN:

155501 CANADA INC.

and

THE PRUDENTIAL ASSURANCE COMPANY LIMITED,

Plaintiffs,

and

AIR CANADA,

Defendant.

REASONS FOR JUDGEMENT

NOËL J.:

     The Plaintiffs 155501 Canada Inc. and Prudential Assurance Company Limited are respectively the owner and insurer of a cargo which is the subject matter of these proceedings. The cargo in question is a Gamma bending machine which was delivered by the Defendant to its owner at Mirabel Airport in a damaged state. The Plaintiffs sue for damages which they assert to be in the amount of $21,364.30.¹

POSITION OF THE PARTIES

     In support of the action, the Plaintiffs allege that the machine was delivered to the Defendant in good order at Milan, Italy for carriage by air to Mirabel. They rely on the Waybill and state that the Defendant breached its contractual obligation to deliver the machine in good order. Further or alternatively, they allege that the loss was caused by the reckless acts of the Defendant's servants in handling the cargo on the ground at Mirabel.

     The Defendant denies all liability alleging that it took all reasonable care in handling the cargo and that the damage is the result of "wrongful packaging". Alternatively it challenges the computation of the damages sought to be recovered by the Plaintiffs.

THE FACTS

     The machine in question is a steel bending press weighing approximately 3,200 kgs. The standard model has a bottom part that is rectangular and a top part that is shaped like a squared triangle with cylinders protruding out of its top and front sides. It measures 101 cm. x 73 cm. x 127 cm. high exclusive of the cylindrical projections and weighs 2,600 kgs.

     The machine in question is a customized adaption of the standard model manufactured by Tauring S.p.A. in Italy. It had been ordered to be produced by 155501 Canada Inc.² on behalf of a Venezuela concern and was specially adapted for bending steel beams of specified dimension to be used in the construction of a tunnel. For that purpose the machine was, amongst other things, equipped with an additional hydraulic cylinder and stronger motor. Its weight was increased by some 500 kgs. Mr. Barer who testified on behalf of the Plaintiffs explained the nature and purpose of these modifications. His evidence and the pictures taken after the mishap suggest that despite these changes the basic makeup and appearance of the machine remained essentially the same.

     The machine was shipped from its point of manufacture in Torino, Italy to Milan where it was delivered to the Defendant. It was packaged in Torino in a manner suitable for marine transport as this was the mode of transport which had originally been intended. However, as the manufacture of the machine was completed behind schedule, a decision was made by 15501 Canada Inc. to resort to air transport in order to accelerate the delivery.

     The machine was packaged in a wood crate measuring 8'11" x 6'3" x 6'9" high. The machine once crated weighed 3,728 kgs. The floor of the crate was made of softwood boards with 4 pieces of 4" x 4" affixed to its underside longitudinally. The sides and top were made of lighter but still solid boards running edge to edge. Four angle irons bolted to the bottom of the crate were used to secure the machine within the crate.

     The two faces of the angle irons measured approximately 3" by 2". They were bolted to the sides of the machine and to the bottom board. The bolt securing the machine to the bottom board was a 3" or 4" bolt having a 1/2" diameter. The head of the bolt had a diameter of approximately 1 1/2" and was screwed into the bottom board from its underside. A washer and nut secured the bolt onto the angle iron.

     Once delivered to the Defendant the crate was placed onto a pallet conceived and used specially for air transport. The pallet in question weighted 185 pounds. It had a length of 125" and a width of 88". These pallets are made of steel and aluminum and are particularly rigid despite their slight thickness. The crate was secured onto the pallet by four equidistant bands running along the underside of the pallet and over the crate laterally and longitudinally.

     When the crate was unloaded at Mirabel, it had no perceptible damage. It was placed onto an "ATCO Dolly" for transport to the warehouse. This dolly had dimensions approximately equal to the metal pallet on which the crate rested. It is equipped with swerving wheels on its topside. With the assistance of these wheels, the metal pallet and the cargo resting on it can be loaded and unloaded onto and from this dolly in any direction by means of a lateral push. When in movement, the dolly is equipped with side panels which when lifted secure the load onto it.

     This dolly was pulled into the warehouse by tractor with the crate loaded on it. It was brought next to a transfer pallet loader ("T.P.L.") in order for the crate to be discharged onto it and brought to its storage space pending delivery. The T.P.L. stands at a height equal to that of the dolly (approximately 18") and consists in a series of parallel rollers some 8" in diameter which have a length of about 125". The crate once placed on the T.P.L. is moved along by the rotation of these motorized rollers.

     The two attendants who handled the crate in question were called upon to testify by the Defendant. They explained that in conformity with normal practice, they used the front end forks of a loader to push the crate off the dolly onto the T.P.L. However, for some reason the motorized rollers ceased to function before the crate had been fully unloaded off the dolly. As, at that point, the forks of the loader could no longer reach the crate, a decision was made to remove the dolly from under the crate so as to allow the loader forks to reach and push the remaining portion of the crate off the dolly and onto the T.P.L.

     According to the two employees, approximately 12" of the crate remained on the dolly when the rollers ceased to function. As in addition to those 12", there was a void of some 6" between the dolly and the T.P.L., the removal of the dolly would have left approximately 18" of the crate overhanging the edge of the T.P.L. The two employees testified that upon the dolly being removed from under the crate, it tumbled onto the floor.

     The side of the crate which came crashing on the floor was shattered and the impact of the crash on the exposed portion of the machine was readily apparent. The assessor who visualized the machine on behalf of the Defendant gave an initial estimate of damages in the range of $50,000.00. However, the extent of the damages turned out to be substantially less than that.

     The machine was delivered to 155501 Canada Inc. at the premises of Barer Engineering Co. in Montreal and Mr. Barer and other employees undertook the task of putting it back to its original state. The required parts were ordered from Italy and the machine was quickly repaired at a cost of $20,519.30 inclusive of labour. It was then delivered to the entity for which it had been manufactured in Venezuela.

     The assessors who were called upon to review the damage on behalf of the Defendant and 155501 Canada Inc. both certified the same type of damages. They noticed that 3 of the 4 metal anchors securing the machine to the crate had been severed. Both also noted that the head of the bolts which held the anchors to the crate had been pulled through the wood laterally leaving a clean hole in the wood equal to the size of the bolts' heads. Finally both indicated that these holes were consistent with the forces which would have been exerted on the metal anchors and the bolts upon the crate falling to the floor.

ANALYSIS AND DECISION

     In support of the claim for damages, the Plaintiffs rely on the Carriage by Air Act³ and the Warsaw Convention which is thereby incorporated into Canadian law. The following articles of the Convention are quoted as being relevant to the issue at hand:

18(1) The carrier is liable for damage sustained in the event of the destruction or loss of, or of damage to, any registered baggage or any cargo, if the occurrence which caused the damage so sustained took place during the carriage by air.

(2)      The carriage by air within the meaning of the preceding paragraph comprises the period during which the baggage or cargo is in charge of the carrier, whether in an aerodrome or on board an aircraft, or, in the case of a landing outside an aerodrome, in any place whatsoever.

20(1)      The carrier is not liable if he proves that he and his agents have taken all necessary measures to avoid the damage or that it was impossible for him or them to take such measures.

21      If the carrier proves that the damage was caused by or contributed to by the negligence of the injured person the Court may, in accordance with the provisions of its own law, exonerate the carrier wholly or partly from his liability.

     According to the Plaintiffs, article 18 of the Convention imposes upon the carrier a strict liability with respect to goods damaged in the course of transport whether the damage occurs in an aerodrome or on board an aircraft. In this instance, the Plaintiffs plead that as the machine was delivered to the Defendant in good order and was remitted in a damaged state, the damages were necessarily sustained while the cargo was in the hands of the Defendant. It adds that in any event the evidence has established that the damage was caused by the improper handling of the cargo on the ground at Mirabel. The expert opinion of Clifford Parfett was offered in support of this contention. In his report to the underwriters, Mr. Parfett concludes that the machine had been discharged from the aircraft at Mirabel in good order but was subsequently damaged in the course of improper warehouse handling.

     The Defendant resists the claim alleging that the machine had been improperly packaged within the crate. It pleads that the machine was inadequately anchored to the crate. It alleges that upon being off-loaded from the aircraft, the machine had already shifted within its crate and two angles were torn out. It also alleges that as the weight of the machine was unevenly distributed, there should have been indications on the crate highlighting the fact that it was "side heavy" or "top heavy".

     The expert opinion of Michael Brown is offered in support of the position of the Defendant. In his report, Mr. Brown offers the following opinion as to the cause of the mishap:

Although this machine was properly crated with a crate of sufficient strength and proportion; in our opinion, it was not at all properly anchored to the base of its container. The utilization of flimsy L angles and small bolts was totally inefficient in view of the extreme size and weight of this unit.

Built into the floor of this crate should have been strong hardwood blocks to prevent movement of the machine, as well as secure chains and other fastening devices fit for such a heavy load.

We feel that when this unit was improperly affixed to the floor of its crate in Italy, and because of the transportation movements and vibration from Italy all the way to Mirabel, involving truck, airline, and ground dolly movement, the machine gradually broke away from its mooring in the crate and came to rest against the front wall. We see the pronounced deformity of the pallet and this situation had to have existed to some degree when you took possession of the item originally in Italy.

When it finally arrived in Mirabel, and the unit was offloaded onto the T.L.P. (sic) it failed to enter in because of the pallet deformity. Because the machine had ripped away from its moorings and was now resting top heavy with all of its weight toward the front, all it took was a displacement of a foot or so to allow it to tip over and come crashing down on the floor.

     I note to begin with that one of the essential facts underlying the opinion offered by Mr. Brown is not supported by the evidence presented by the Defendant in the course of the hearing. According to Mr. Brown it is a deformity in the pallet which caused the T.P.L. to stop rolling. Neither Mr. Baribeau or Mr. Deschamps who handled the cargo on the ground at Mirabel testified that the pallet on which the crate rested was deformed in any way. Mr. Baribeau confirmed that he looked at both the crate and the pallet on which it rested and that everything seemed normal.

     Furthermore, in his account of the reenactment of the event, Mr. Brown asserted that when the T.P.L. rollers ceased to function, one of the two attendants carefully checked out the exact position of the pallet on the rollers to assess the proper course of action. If indeed the malfunction of the T.P.L. was caused by a deformity in the pallet as Mr. Brown opined, this would have been readily apparent to the attendants who both had extensive experience in the handling of air cargo and years of exposure to the T.P.L. system.

     The shape of the bolt holes which were found in the floor of the crate also negate Mr. Brown's opinion that transport movements and vibrations of various sorts in the course of transport would have caused the metal anchors to come loose. According to the evidence, the four bolts which were used to secure the angles to the floor of the crate were found intact with no visible sign of contortion. The nuts and washers were also in good order.

     The clean round holes left in the floor of the crate are fully consistent with the head of the bolts being pulled through the wood as a result of a single impact such as was caused by the crate falling onto the floor.⁴ They do not support Mr. Brown's theory that the bolts would have gradually become loose from the application of the multi-directional forces usually encountered in the course of air transport. Based on my review of the evidence, I reject Mr. Brown's opinion and find, as Mr. Parfett concluded, that the crate arrived at Mirabel in good order with the machine still affixed to its moorings.

     There is no doubt that the machine had a convoluted shape and that its centre of gravity would have been somewhat off-centre. I note in this regard that the specifications pertaining to the standard model do indicate that the front end of the machine where the benders protrude is the heavier section. These instructions indicate that the machine can also function on its backside with the benders on top of the machine. From the pictures of the machine that were taken after the mishap at Mirabel, this appears to be the position in which it was crated. The instructions further specify that the machine requires neither foundation nor fastening to the floor to operate; considering that these machines are intended to bend heavy steel beams it is clear that although the front section is heavier, they nevertheless have a high degree of inherent stability.

     The machine in question was a customized model which was some 500 kgs heavier than the standard model. Mr. Barer's testimony and the pictures taken at Mirabel nevertheless suggest that the basic makeup of the machine remained essentially the same as the standard model.

     The evidence indicates that the machine was snugly fitted into the crate. The width of the crate was 88". According to the testimony of the two attendants some 70" of those 88" had been transferred from the dolly to the T.P.L. when the dolly was removed from under it and the crate fell to the floor. That would suggest that the centre of gravity of the machine rested somewhere within the 18" portion of the crate which overhung the T.P.L.

     That would of course have made the machine and the crate in which it rested highly unstable. Its centre of gravity would have been located towards its outer edge within 20% of its volume. If the crate's centre of gravity was off centre to the extent that the Defendant suggests, it is difficult to conceive how it could have survived the movements inherent in air transport from its point of shipment to Mirabel.

     The better view is that the crate at the time of the mishap overhung the T.P.L. slightly more than the employees of the Defendant were able to recall. No measurement was made in this regard; the two attendants merely provided an estimate of the overhang from their recollection of the event. Was this overlay 18" as Mr. Baribeau suggested or was it 12" to 18" as Mr. Deschamps suggested or was it "some two feet" as Mr. Brown recorded in his reconstruction of the event, or could it have been more?

     I need not come to any precise conclusion in this regard. Suffice it to say that based on the evidence, I do not believe that the crate could have fallen in the manner described by the attendants if the overhang was limited to 12" or 18" as they stated from their no doubt honest but nevertheless subjective memory of the event. On the facts before me, it is apparent the machine was secure within its crate at the time of the mishap and had a reasonable degree of inherent stability. It follows that the overhang at the time of the mishap had to be more than what the attendants' recollection suggests and that a degree of temerity was involved in their decision to remove the dolly from under the crate.

     I therefore come to the conclusion that the Defendant has failed to discharge the onus of establishing that the damages are not attributable to it or do not result from the wrongful acts of its servants.

     The Defendant also challenges the computation of the damages sought to be recovered. Specifically, it takes the position that 155501 Canada Inc. has failed to prove the labour cost involved in the repair of the machine.

     The labour cost amounted to $15,800.00 based on 95 hours at the rate of $40.00 per hour for mechanical work and 220 hours for hydraulic and electrical work at the rate of $55.00 per hour. Mr. Barer who oversaw the repairs indicated that the hours had been recorded by the employees concerned but he was unable to produce these records. The Defendant asks me to conclude from this that the labour costs claimed by the Plaintiffs have not been sufficiently established.

     The testimony of Mr. Barer was not the only evidence before the Court on this point. Mr. Parfett who acted for the underwriters testified that he did inquire into the manner in which the hours had been computed. Prior to approving the claim, he wrote to Barer Engineering Co. as follows:

With reference to your labour claim covering 95 hours of mechanical work and 220 hours of hydraulic and electrical work, I would appreciate further data in this regard. I would appreciate either meeting with you to discuss these amounts or receipt from you of documentary evidence showing who did this work, when and just what was done on a daily basis.5

     Mr. Parfett testified that further to writing this letter, he satisfied himself that the amount claimed for labour cost was justified. He subsequently authorized the payment of the insurance proceeds.

     Mr. Parfett had no interest in authorizing the payment of the insurance proceeds unless he was fully satisfied that the amount claimed was justified. Nothing suggests that this amount was unreasonable or exaggerated having regard to the extent of the damages which was attested to by both assessors. I therefore reject the contention that the amount claimed as damages has not been proven.

     Judgement is therefore given in favour of the Plaintiffs in conformity with the prayer for relief as it was amended during the course of the hearing. The Defendant is therefore ordered to pay 155501 Canada Inc. and the Prudential Assurance Company Limited the amounts of $1,000.00 and $20,364.30 respectively together with legal interest and the additional indemnity provided in article 1619 of the Civil Code of Quebec computed from April 7, 1994. The Defendant shall also pay the cost of this action.

    

     Judge

Ottawa, Ontario

April 4, 1997

__________________

     ¹      Further to a motion made in open Court to amend the statement of claim, the expert fees in the amount of $845.00 were added to the amount originally claimed. The insurer to which all rights to the claim have been subrogated claims the amount of $20,364.30 and the owner claims $1,000.00 being the amount of the deductible under the policy.

     ²      155501 Canada Inc. carries on business under the name of Barer Engineering Co.

     ³      R.S., c. C-14.

     ⁴      Mr. Brown himself recognized this during his testimony.

     ⁵      Letter from Clifford Parfett dated January 20, 1994, exhibit P-4.