Date: 20051031
Docket: T-2273-01
Citation: 2005 FC 1471
BETWEEN:
PHIL SHTUTMAN
Plaintiff
- AND -
OCEANE MARINE SHIPPING, INC.
and
MAERSK CANADA INC.
and
A.P. M0LLER
and
AKTIESELSKABET DAMPSKIBSSELSKABET SVENDBORD (SVENDBORG)
and
DAMPSKIBSSELSKABET af 1912, AKTIESELSKAB (1912)
and
THE OWNERS AND ALL OTHERS INTERESTED
IN THE SHIP "DRAG0R MAERSK"
and
THE SHIP "DRAG0R MAERSK"
and
THE OWNERS AND ALL OTHERS INTERESTED
IN THE SHIP "MAERSK PERTH"
and
THE SHIP "MAERSK PERTH"
Defendants
REASONS FOR JUDGMENT
LEMIEUX J.:
A. INTRODUCTION
[1] In this action, Phil Shtutman, a businessman residing in Montreal, asserts a cargo claim which, at the commencement of trial, he limited to one class of defendants - the owners of the ship Drag0r Maersk (the "ship") namely, the defendants Svendbord and 1912 who acknowledge they are proper defendants (hereinafter the "defendants").
[2] Mr. Shtutman claims a container MAEU 7107169 (the "container") whose doors were sealed with seal number 03383 (the "seal") stuffed with used equipment, principally a Faguay generator and a Raymond electric lifter, he sold to Bavaria International Garage Inc. carrying on business in Conakry, Guinea, ("Bavaria") for US $120,450.00, had arrived safely at the Port of Conakry on December 29, 2000, but that, while in the custody of Maersk Guinée, the agent of the defendants in that country, was misdelivered to the wrong consignee on March 8, 2001, or the contents of the container were stolen prior to delivery on that date.
[3] The principal issue which arises for the plaintiff in this case is to counter the defence that he has not discharged his initial burden of proof the goods were lost while in the defendants' custody, i.e. proved his loss. The resolution of this issue turns mainly on the admissibility of hearsay documentary evidence because the plaintiff brought no witness from Guinea to testify in support of his allegations. It also involves the notion of the proper measure of damages known as Arrived Sound Market Value ("A.S.M.V.").
[4] For the defendants, the principal issue is their assertion which the plaintiff contests of exclusion of any liability or damages based on the wording of the Bill of Lading which their agent Maersk Inc. in Atlanta ("Maersk Atlanta") issued, or, in the alternative, their assertion also challenged by the plaintiff to a lower limit of damages than called for under the Hague-Visby Rules.
[5] The parties agree the carriage of the container is governed by the Hague-Visby Rules as incorporated in Canadian law by the Carriage of Goods by Water Act now repealed and replaced by the Maritime Liability Act. The defendants concede their obligation to turn over the properly sealed container to the proper consignee.
B. THE EVIDENCE
[6] I set out certain undisputed facts:
(1) In August of 2000, the plaintiff entered into an agreement of purchase and sale of the goods with Bavaria. Delivery to Bavaria was to take place in the container yard at the Port of Conakry after Bavaria had made arrangements at its bank to guarantee payment of the goods to Mr. Shtutman, namely Cdn. $190,865.07 being the equivalent of the purchase price in US dollars previously mentioned.
(2) This international transaction was a first for the plaintiff who had recently retired from the construction business. For advice in matters of international trade and financing, he relied on his friend Aaron Green, an experienced importer/exporter.
(3) The plaintiff retained the services of a freight forwarder, Quebec International Transport Inc. ("QIT") who contracted with Oceane Marine Shipping Inc. ("Oceane") whose place of business is located in the United States. Oceane had purchased from Maersk Sealand bulk space on the defendants' vessels serving Canada/Europe/West Africa.
(4) An empty container marked MAEU 7107169 was delivered to the plaintiff's rented warehouse in Montreal in early September 2000. The defendants do not contest the container was properly stuffed by the plaintiff with the goods and properly sealed with seal number 03383 when stuffing was completed.
(5) The defendants took custody of the container at the Port of Montreal and transported it to the container yard in Halifax where it arrived in early December 2000.
(6) A Bill of Lading for the container, freight prepaid, was issued to the plaintiff on December 3, 2000, by Oceane as the carrier. This Bill of Lading, number 211211, named the plaintiff as shipper/exporter, Bavaria as the consignee, the Drag0r Maersk as the exporting carrier, Halifax as the place of loading, Algeciras, Spain as a foreign Port of unloading, QIT as the forwarding agent and Maersk Guinée to be notified.
(7) On December 4, 2000, Maersk Atlanta, carrying on business as Maersk Line, issued a combined transport Bill of Lading, ATL 236423 in respect of the container naming Oceane as shipper/exporter, Bavaria as the consignee, Montreal as the place of receipt, Halifax as the port of loading, the Drag0r Maersk as the carrying vessel, Conakry as the port of discharge. This Bill of Lading specified the carriage was CY to CY (container yard to container yard) the place of issue Atlanta and the container laden onboard the ship at Halifax on December 4, 2000.
(8) The container was discharged at the Port of Conakry on December 29, 2000, with seal intact. It made the voyage from Algeciras, Spain, to the Port of Conakry aboard the M/V Thor Lone.
(9) Bavaria failed to pay for the goods and failed to claim them at the Port of Conakry. The plaintiff turned to his friend Aaron Green, who, through contacts, found a new buyer/sales agent in Conakry said to be Magistrate Mohamed Lamine Diawara ("Mr. Diawara"). On January 26, 2001, the plaintiff issued a letter (Exhibit P-14) "À qui de droit":
Comme vous avez pu le constater, les articles situés au port de Conakry, dont la liste des items est présente sur la page suivante, n'ont pas été payés par Bavaria International Garage. Alors, nous autorisons que .... M. Diawara...
prends ces articles et complètes[sic] tous papiers nécessaires de douanes pour la délivrance des items présentes sur la page suivante, CONTAINER #MAEU7107169 ... .
NB Cette lettre a été envoyée à ... Mohamed Lamine Diawara, M. le Directeur National de la Douane, M. le Directeur de Maersk. [emphasis mine]
(10) Steps were taken to change the named consignee from Bavaria to Mr. Diawara on the two Bills of Lading which had issued, namely, the one from Maersk Atlanta to Oceane and the other from Oceane to Mr. Shtutman. At the plaintiff's option, the change in consignee was made without the issuance of new original Bills of Lading and delivery to take place directly to Mr. Diawara without production of original Bills of Lading. Maersk Atlanta transmitted appropriate instructions to Maersk Guinée on March 1, 2001 (Exhibits D-5 and D-7).
[7] The factual dispute between the parties centers on what happened at the container yard in the Port of Conakry on March 8, 2001, when the container left the custody of Maersk Guinée.
[8] To support his contention Maersk Guinée misdelivered the container, the plaintiff relies upon two documents issued by employees of Maersk Guinée that day. Exhibit P-23 is a Bordereau de livraison No 6859, a printed form where Bavaria is identified in handwriting as the client. This document also refers to Amara Soumah of K.T.T. Transit, identifies the number of the truck picking up the container and under the heading "Marques" we see the words "MAEU 710716.9, (illegible), 013383, livré conforme". [emphasis mine]
[9] The other document relied upon by the plaintiff is Exhibit P-22, labelled Ordre de mouvement interchange [sic] also a Maersk Guinée form. Exhibit P-22 names Bavaria as the client and under the heading Signature client appear the words Amara Soumah (KTT Transit). Under the word Remarques appear the letters R.A.S. meaning "rien à signaler". The seal number was not recorded on the printed form, Exhibit P-22 in the sentence "Plomb No ... Intact à la réception".
[10] Also put into evidence by Mr. Shtutman were copies of the following documents which he received but whose admissibility was challenged on grounds of hearsay by counsel for the defendants:
(a) Exhibit P-24, purportedly sent by Mohamed Lamine Diawara, dated February 17, 2001, signed by Le Directeur général Oussaief Mohamed which reads:
We have received your container No MAEU7107169. It was opened no seal and lock on the door and the goods that you mentioned in your letter dated Friday, 26, January 2001through your notary were not found in the container.
Please contact your shipping agency to inform us about the lost goods that they were inside the container. For your information, we are going to send you the needed proofs by D.H.L. from the S.G.S., the Police International and the Interpol to confirm our problems.
No payments will be sent to you until we receive the right goods agreed upon. [emphasis mine]
[It is conceded by both parties that neither received the reports from S.G.S., the police, or Interpol].
(b) Exhibit P-28, which is a letter addressed to Mr. Shtutman by Mr. Diawara and purportedly signed by him. It is dated March 20, 2001, and reads:
Je tiens à vous informer que le conteneur NoMAEU 7107 169 40 pieds débarqué au Port de Conakry le 29 Décembre 2000 ne contenait pas la marchandise déclarée sur le connaissement No211211 et la facture.
Il ne renferme que des effets personnels usagés tel que: Chaises, Tables et Habits il était sans plomb et ouvert.
Un Huissier de Justice a fait le constat, son rapport est confirmé par la Douane Nationale Guinéenne, la S.G.S. et l'Interpool[sic] de Conakry, il vous sera transmis dans les plus brefs délais.
Je ne pourrai pas payé une marchandise non reçue et je tiens au remboursement de tous les frais dépensés pour la sortie de ce conteneur avec des dommages intérêts.
This letter contains a number of stamps one purportedly being from Maersk Guinée, Service Clientèle, opposite which the words S. Contentieux, (illegible), Effets personnels is seen. Another stamp is said to be from S.G.S. The other stamp is illegible.
(c) Exhibit P-30 is a document purportedly on Maersk Guinée letterhead entitled "Attestation" dated Conakry June 20, 2001, issued by "Le Service Contencieux [sic]?which reads:
La Compagnie Maritime MAERSK GUINEE, atteste que le conteneur No MAEU 7107169 était sans plomb, et que le contenu n'était pas conforme à celui du Connaissement et de la facture proforma.
Attestation délivrée à Monsieur Mohamed Lamire Diawara pour servir et valoir ce que droit. [emphasis mine]
(d) Exhibit P-25 is a document entitled "Dénonciation du constat" under the letterhead of a bailiff dated Conakry March 8, 2001, addressed to the plaintiff being his "Exploit [sic] de Procès-verbal de dénonciation du constat en date du 8 mars 2001". Exhibit P-25 consists of a series of other documents including a Procès-verbal de dénonciation d'un constat dated March 10, 2001, a Procès-verbal de constat de l'inventaire des marchandises, a Facture de dépenses pour la sortie de container dated March 20, 2001, signed by Mr. Diawara, which included an item reflecting the payment of custom duties, a copy of Mr. Shtutman's letter of January 26, 2001 and, finally, a copy of Mr. Diawara's letter of March 20, 2001, addressed to Mr. Shtutman.
[11] I complete my enumeration of the documentary evidence by referring to the following documents:
(a) P-26, an e-mail dated March 15, 2001, from Mr. Mory Keita, Shipping Manager for Maersk Guinée, who testified at trial, to Maersk Atlanta stating Mr. Diawara "did not show up yet and unable to contact him due to his abv telephone number is not correct. Please review and advise the correct one...". Mr. Keita indicated to Maersk Atlanta that if the consignee did not take delivery of the shipment before the end of the month it would be seized by Customs and auctioned;
(b) an e-mail from Mr. Keita to Maersk Atlanta dated March 16, 2001, entered as Exhibit P-27, in which he requested "please contact urgently shipper your side and advise to whom am shipment to be released and exact address of same". He also mentioned that "storage and demurrage charges are increasing every day and the goods involved may be seized by Customs and auctioned in maximum 12 days as of today"; and
(c) an e-mail dated March 17, 2001, from Mr. Keita to Maersk Atlanta entered as Exhibit D-9 stating "Noticed from system that am shipment released since 01.03.08 to Mr. Diawara. This respect consider matter closed".
[12] As stated, Mr. Diawara was not called by the plaintiff at trial nor did he call anyone else from Conakry who had knowledge of what transpired. In addition, Mr. Shtutman, after he was notified of the problem, did not appoint a surveyor in Conakry. Mr. Shutman, Mr. Green and officials from QIT testified for the plaintiff as did Mr. Keita for the defendants.
[13] I need not summarize the evidence on behalf of the plaintiff. That evidence, apart from the objections on hearsay is largely uncontroverted and, as such, is reflected in paragraph 6 of these reasons. None had first hand knowledge of what transpired at the Port of Conakry after the container arrived there and in particular, what happened on March 8, 2001.
[14] The main points of Mr. Keita's testimony were:
(1) Exhibit P-30, the attestation, was a fraud principally because Maersk Guinea had no Service contentieux, the letterhead on which it was written was not in proper form and the stamp indicating it had been seen by "Le contrôleur" was a person unknown.
(2) Exhibit P-28 was of dubious authenticity and, while he acknowledged the Maersk stamp on the March 20, 2001 letter appeared genuine, the presence of having been seen by Le Service Contentieux at Maersk which did not exist, destroyed its authenticity.
(3) The inscription of Bavaria as the client in Exhibits P-22 and P-23 was deliberately and consciously inserted by Maersk employees. He testified the process at State Customs to change over from Bavaria to Mr. Diawara was a complicated and time consuming process and Maersk Guinée was concerned that the container may be seized by that organization to the detriment of the consignee.
(4) He admitted he was not in Conakry on March 8, 2001. He also admitted a back-up document, a Bon à délivré, was missing from Maersk Guinée's file. Notwithstanding his being absent, his review of the document file at Maersk Guinée revealed that Mr. Diawara had attended Maersk Guinée's offices, had identified himself, had been accompanied by Mr. Amara Soumah of KTT Transit and, as such, was the person mandated by Mr. Diawara to make arrangements for the pick up of the container.
(5) He testified Mr. Diawara received the goods in good order because both documents (P-22 and P-23) exhibited notations the container was "Livré conforme".
C. ANALYSIS
(1) Legal principles
(a) On cargo claims
[15] Several decisions of this Court (see Francosteel Corp. v. Fednav Ltd. (1990), 37 F.T.R. 184, Mediterranean Shipping Co. S.A. Geneva v. Sipco Inc., [2002] 3 F.C. 125, and Nova Steel Ltd. et al. v. Lithuanian Shipping Company , [2002] F.C.T. 100) have endorsed statements on burden of proof and order of proof contained in Professor Tetley's publication Maritime Cargo Claims. I cite the following from Justice Blais' decision in Mediterranean Shipping, supra:
¶ 62 W. Tetley in Marine Cargo Claims, supra, at page 133, explains that there are three principles of proof that run as unbroken threads through Hague and Hague/Visby Rules jurisprudence. W. Tetley states them as follows [at pages 133, 137 and 139]:
... the carrier is prima facie liable for loss or damage to cargo received in good order and out-turned short or in bad order.
...
... the parties are in general required to make proof of whatever facts are available to them.
...
... the onus of proof does not mean providing all the circumstances to the point of absurdity, but means making proof to a reasonable degree.
¶ 63 He also explains at page 142, that although the Hague and Hague-Visby Rules do not set out an order of proof in a marine cargo claim and its defence, there is a surprising similarity in the order of proof demanded by the courts of nations which have adopted the Hague [page151] and Hague-Visby Rules. The order of proof is as follows, at pages 142-143: [emphasis mine]
(i) The claimant must first prove his loss.
(ii) The carrier must then prove a) the cause of the loss, b) that due diligence to make the vessel seaworthy in respect of the loss was taken and c) that he is not responsible by virtue of at least one of the exculpatory exceptions of the Rules;
(iii) Then, various arguments are available to the claimant.
(iv) Finally, there is a middle ground where both parties may make various additional proofs.
1) What the Claimant must Prove:
Initially, it is the claimant who has the burden of proof, and to make his case he must prove all six of the following facts:
a) That the claimant is the owner of the goods and/or is the person entitle to make the claim.
b) The contract or the tort (delict).
c) That the person claimed against is the responsible person.
d) That the loss or damage took place in the carrier's hands. This is usually done by proving the condition of the goods when received by the carrier and the condition at discharge.
e) The physical extent of the damage or the loss.
f) The actual monetary value of the loss or damage.
2) What the Carrier must Prove
The carrier must then prove all three of the following:
a) The cause of the loss.
b) Due diligence to make the vessel seaworthy at the beginning of the voyage, in respect of the loss.
c) One of the following exculpatory clauses:
i) Error in navigation and management of the ship.
ii) Fire.
iii) Perils of the Sea and similar exceptions, being Acts of God; Acts of War; Acts of Public [page152] Enemies; Restraint of Princes; Quarantine; Strikes; Riots; Saving Life.
iv) Act or omission of the shipper.
v) Inherent vice.
vi) Insufficiency of packing.
vii) Latent defects.
viii) Any other cause.
3) The Various Arguments then Available to the Claimant:
a) Negligence at loading.
b) Negligence in stowage.
c) Lack of the cargo.
d) Negligence at discharge. [Footnotes omitted.]
¶ 64 Justice Rouleau in Francosteel Corp. v. Fednav Limited (1990), 37 F.T.R. 184 (F.C.T.D.), held as follows regarding the burden of proof for negligence [at page 194]:
It is clear from the jurisprudence that the plaintiff bears the burden of proving that the goods were damaged while in the carrier's possession; this is generally accomplished by proof that the goods were tendered in good condition to the carrier, and were ultimately received in a damaged condition. This accomplished, the carrier must show that the damage fits within an excepted clause of the Hague Rules; if they succeed, the onus shifts to the plaintiff to adduce evidence that the damage was caused by the carrier's negligence. If, on the other hand, the carrier cannot establish that the damage is due to an excepted cause, the burden remains on him to prove that the loss was not caused by his negligence. (See Vancouver SS. Co. v. Herdman & Sons (1933), 45 Ll. L. Rep. 223; Kruger Inc. et al v. Baltic Shipping Co. (1989), 57 D.L.R. (4th) 498, at p. 502; Associated Metals and Minerals Corp. v. Etelac Suomin Laiva (1989), A.M.C. 677; Caemint Food Inc. (1981), A.M.C. 1801).
¶ 65 In order to determine whether the parties met the rules of evidence as explained by W. Tetley, I will now assess the written evidence and the evidence provided by the witnesses at trial.
(b) On the hearsay issue
[16] The hearsay issue arises in the following context:
(a) neither of the parties in this action took advantage of section 30 of the Canada Evidence Act which provides that, upon due notice, where oral evidence in respect of a matter would be admissible, a record made in the usual and ordinary course of business that contains information in respect of that matter is admissible in evidence on production of the record; and
(b) while each party served on the other notices to admit a fact or the authenticity of documents under Rule 255 of the Federal Courts Rules, (1998), the admissions were sparse. In particular, the defendants denied the authenticity of Exhibits P-14, P-22, P-23, P-24, P-25, P-28 and P-30, on the grounds those documents originated from third parties and the defendants have the right to cross-examine their authors before admitting to their authenticity and to the truth of the facts stated therein. For its part, the plaintiff denied the fact the container was delivered to Mr. Diawara on March 8, 2001, denied Exhibit P-30 (the attestation), was a fraud, and denied Exhibit P-28 were not stamped by Maersk Guinée or the Société générale de surveillance ("SGS").
[17] Based on the traditional rules relating to hearsay, the defendants' objections were valid as to the inadmissibility of the plaintiff's documents for the purpose of establishing the truth of the facts stated therein (see Khan v. Her Majesty the Queen, [1990] 2 S.C.R. 531, at 540 and 541 where the Supreme Court of Canada discussed its previous decision on the point in [1970] S.C.R. 608">Ares v. Venner, [1970] S.C.R. 608).
[18] However, that is not the end of the matter because of the evolution in this country of the hearsay rule, its exceptions and other situations not fitting within the traditional exceptions to the hearsay rule. Hearsay may be admissible to establish the truth of the contents of a statement, whether oral or documentary, if the statement meets the twin tests of reliability and necessity. (See Khan, supra, and R. v. Starr, [2000] 2 S.C.R. 144 at paragraphs 153 to 156.
[19] The first requirement for admissibility under the principled approach is reliability. If a hearsay statement is unreliable, one need not go on to ask whether the surrounding circumstances show it is necessary to admit the statement (see, Starr, supra, at paragraph 209).
[20] A statement is said to be reliable if the circumstances surrounding its making evidences sufficient circumstantial guarantees of trustworthiness which overcome the dangers inherent in hearsay evidence (statement not made under oath, no cross-examination and no possibility of assessing demeanor. (See Mapara v. Her Majesty the Queen, [2005] S.C.C. 23:
[21] The principled approach to the admissibility of hearsay evidence distinguishes between threshold and ultimate reliability. This is what Justice Iacobucci wrote on that point in Starr, supra, at paragraph 215:
¶ 215 In this connection, it is important when examining the reliability of a statement under the principled approach to distinguish between threshold and ultimate reliability. Only the former is relevant to admissibility: see Hawkins, supra, at p. 1084. [page254] Again, it is not appropriate in the circumstances of this appeal to provide an exhaustive catalogue of the factors that may influence threshold reliability. However, our jurisprudence does provide some guidance on this subject. Threshold reliability is concerned not with whether the statement is true or not; that is a question of ultimate reliability. Instead, it is concerned with whether or not the circumstances surrounding the statement itself provide circumstantial guarantees of trustworthiness. This could be because the declarant had no motive to lie (see Khan, supra; Smith, supra), or because there were safeguards in place such that a lie could be discovered (see Hawkins, supra; U. (F.J.), supra; B. (K.G.), supra). [emphasis mine]
[22] He added the following at paragraph 217:
¶ 217 At the stage of hearsay admissibility the trial judge should not consider the declarant's general reputation for truthfulness, nor any prior or subsequent statements, consistent or not. These factors do not concern the circumstances of the statement itself. Similarly, I would not consider the presence of corroborating or conflicting evidence. On this point, I agree with the Ontario Court of Appeal's decision in R. v. C. (B.) (1993), 12 O.R. (3d) 608; see also Idaho v. Wright, 497 U.S. 805 (1990). In [page255] summary, under the principled approach a court must not invade the province of the trier of fact and condition admissibility of hearsay on whether the evidence is ultimately reliable. However, it will need to examine whether the circumstances in which the statement was made lend sufficient credibility to allow a finding of threshold reliability.
[23] I should observe that the ultimate reliability of any hearsay statement which is admitted and the weight to be attached to it remains determinations for the trier of fact (see, R. v. Hawkins, [1996] 3 S.C.R. 1043 at paragraph 75) and that it remains the trial judge's purview, i.e. his/her residual discretion at common law to exclude evidence. As stated by the then Chief Justice and Justice Iacobucci at paragraph 85 in Hawkins, supra,:
¶ 85 [...] Even where a particular hearsay statement satisfies the criteria for necessity and reliability under the reformed framework, the statement remains subject to the judge's residual discretion to exclude the statement where "its probative value is slight and undue prejudice might result to the accused".
D. CONCLUSIONS
(a) Has the plaintiff met his initial burden ?
[24] According to professor Tetley, a claimant discharges his initial burden by proving six facts which are listed at page 13 of these reasons. Counsel for the defendants concedes the plaintiff has met four of the six facts. As noted, according to counsel for the defendants, the plaintiff has not proven the loss or damage took place in the carrier's hands and has not proven the actual monetary value of the loss through theft.
[25] For the reasons which follow, I agree with counsel for the defendants. In my view, Mr. Shtutman has not proven the loss of the goods inside the container took place when the container was in the custody of Maersk Guinée either because of misdelivery or theft.
[26] Counsel for the plaintiff argued misdelivery to Bavaria on March 8, 2001. He points to the Bordereau de Livraison and the Ordre de mouvement interchange.
[27] Mory Keita, Manager of Shipping at Maersk Guinée for the last eleven years, after examining the file and instructing himself, testified before me why the name Bavaria appeared on those documents as the client. He was afraid that if the goods were not cleared from the container yard within a short period of time, the container would be seized and its contents sold.
[28] Counsel for the plaintiff challenged Mr. Keita's credibility and points to the e-mails of March 15, 16 and 17, 2001.
[29] In my view, there is no basis in the evidence to find Mr. Keita not credible. I accept his testimony as trustworthy. Clearly, he was very knowledgeable about the affairs of Maersk Guinée at the Port of Conakry during the relevant period.
[30] He conceded he made a mistake sending the e-mails of March 15 and 16, 2001, advising Maersk Atlanta Mr. Diawara had not picked up the container on March 8, 2001, an error which became evident to him when he checked the system (see Exhibit D-9).
[31] Exhibits P-26 and P-27 clearly evidence his concern about Guinea Customsseizing the container and auctioning the goods inside it which corroborates his explanation why the name Bavaria appeared on Exhibits P-22 and P-23.
[32] His explanation concerning the falsehood of Exhibit P-30, the attestation, are compelling. I find that taken as a whole the seal number handwritten on P-22 was a typo considering the notation "Livré conforme". That evidence is plausible in the circum-stances and does not support an inference the original seal was removed, the goods inside the container stolen while in Maersk Guinée's custody and a new seal substituted. Such inference would in my view be speculative. Counsel for the plaintiff had no other admissible evidence to support his alternate theory of theft in the container yard while in Maersk Guinée's custody.
[33] The plaintiff does not know what happened at the Port of Conakry after the container was discharged on December 29, 2000. He brought no independent evidence of what happened at the port on March 8, 2001.
[34] His reliance on Exhibits P-24 and P-28, both purportedly sent by Mr. Diawara and on Exhibit P-25, the bailiff's missive are inadmissible on grounds of hearsay and are not saved by the Khan, supra, approach because the circumstances in which those exhibits relied on by the plaintiff were made does not carry with it the necessary circumstantial badges of truthfulness which would make them reliable overcoming the inherent dangers surrounding hearsay evidence.
[35] The circumstances tell us very little who Mr. Diawara is, what kind of arrangement did he make with the plaintiff, i.e. was he simply a sales agent hired to sell the goods which Bavaria had failed to purchase.
[36] Furthermore, the statements made by Mr. Diawara were not made before his problems with Mr. Shtutman were made known but identified or notified the problems.
[37] Finally, I find it very strange Mr. Diawara did not notify Maersk Guinée of any problems with the shipment. In short, either Mr. Diawara or KTT Transit should have been called to testify to overcome the dangers of hearsay because I am not satisfied of the reliability factor in Khan, supra.
[38] In any event, in light of the circumstances as to ultimate reliability, I would place no weight on those documents because they have little probative value.
[39] My finding is sufficient to dismiss the plaintiff's action. However, should I be wrong, I will touch briefly upon the defendants' argument for exclusion or limitation of liability advanced by the defendants.
(b) Exclusion or limitation of liability
(i) Exclusion of liability
[40] The defendants advance the exclusion or limitation of liability clauses in the combined transportation bill of lading (the "Maersk Bill of Lading") issued by Maersk Atlanta to Oceane (Exhibit D-2).
[41] They say that while the Hague-Visby Rules (the "Rules") govern the carriage of the container and its goods, these Rules have no application after the container was discharged over the rails of the Thorn Lone on December 29, 2000, when it arrived at the Port of Conakry. This is so, they argue, because of the definition of "Carriage of Goods" in Article I(e) of the Rules which reads: "Carriage of goods covers the period of time when the goods are loaded on to the time they are discharged from the ship".
[42] The defendants' case for exclusion rests on Clause 5(3)(b) of the Maersk Bill of Lading. In order to put the matter into context, I reproduce Clauses 5.1 in part and 5.3 of Maersk's Bill of Lading:
5. CARRIER'S RESPONSIBILITY
The Carrier undertakes responsibility from the place of receipt if named herein or from the port of loading to the port of discharge or the place of delivery if named herein as follows: [emphasis mine]
. . .
[43] Clause 5.3 is entitled "Carriage to and from Countries other than the USA" and reads:
(a) Subject to sub-paragraph (b) of this Clause where the loss or damage has occurred between the time of receipt of the goods by the carrier at the port of loading and the time of delivery by the Carrier at the port of discharge, or during any prior or subsequent period of carriage by water, the liability of the carrier shall be determined in accordance with either the Hague Visby Rules where these are compulsory applicable at the place of receipt or the port of loading where the first sea carriage in the transportation is on board the ocean vessel, or in all other cases in accordance with the International Convention for the Unification of Certain Rules relating to Bills of Lading dated 25th August, 1924 (the Hague Rules) (with the exception that Article 9 shall not apply and the limit of liability in Article 4 Rule 5 shall be set out as in Clause 6 below).
(b) Where the carriage called for commences at the port of loading and/or finishes at the port of discharge, the Carrier shall have no liability whatsoever for any loss or damage to the goods while in its actual or constructive possession before loading or after discharge over ships rail, or if applicable, on the ships ramp, however caused. [emphasis mine]
(ii) Limitation of liability
[44] The defendants' case for limitation of liability rests on Clause 6.2(c) of the Maersk Bill of Lading. Clause 6 is headed "The Amount of Compensation" and sub-paragraph 6.2 reads as follows:
2. Where the Hague Rules apply hereunder the Carrier's maximum liability shall in no case exceed GBP 100.00 lawful money of the United Kingdom per package or unit, unless the nature or value of such Goods have been declared by the Shipper before shipment and inserted on the reverse side of this Bill of Lading and extra freight paid.
(a) Subject to clauses 5.7 and subparagraph (b), (c) and (d) of this clause when the Carrier is liable for compensation in respect of loss of or damage to Goods, such compensation shall be calculated by reference to the invoice value of the Goods plus freight charges and insurance if paid.
(b) If there is no invoice value of the Goods, such compensation shall be calculated by reference to the value of such Goods at the place and time they are delivered to the Merchant in accordance with the contract or should have been so delivered. The value of the Goods shall be fixed according to the Commodity exchange price or, if there be no such price, according to the current market price or, if there be no commodity exchange price or current market price, by reference to the normal value of goods of the same kind and quality.
(c) Compensation shall not, however, exceed USD 2$ per kilo of gross weight of the Goods lost or damaged. [emphasis mine]
[45] I should mention that counsel for the plaintiff argued there was no way to determine that these specific clauses of the Maersk Bill of Lading could be said to govern the carriage of the container. I find no substance to this argument.
[46] When the Maersk Bill of Lading was entered as Exhibit D-2 the conditions on the reverse side were also reproduced but their print was small. Counsel for the defendants was able to provide the Court with those Bill of Lading conditions enlarged by producing a blank form bill of lading said to be normally issued by Maersk Atlanta. I asked Mr. Keita to compare the two documents and, based on his knowledge, to confirm to the Court they were the same based on his experience. He so confirmed. I was able to compare the conditions on the back of Exhibit D-2 with the enlarged text and also confirm that they are the same.
[47] Counsel for the plaintiff also argued the exclusion or limitation or liability clauses in the Maersk Bill of Lading clashed with Article III.8 of the Hague Visby Rules and were thus null and void. Article III.8 of the Rules reads:
8. Any clause, covenant or agreement in a contract of carriage relieving the carrier or the ship from liability for loss or damage to or in connection with goods arising from negligence, fault or failure in the duties and obligations provided in this Article or lessening such liability otherwise than as provided in these Rules, shall be null and void and of no effect.
A benefit of insurance or similar clause shall be deemed to be a clause relieving the carrier from liability.
[48] I asked the parties at the close of the hearing to provide me with additional authorities on the point and they did so.
[49] In this context I refer to Article VII of the Rules entitled "Limitations on the Application of the Rules":
Nothing herein contained shall prevent a carrier or a shipper from entering into any agreement, stipulation, condition, reservation or exemption as to the responsibility and liability of the carrier or the ship for the loss or damage to, or in connection with the custody and care and handling of goods prior to the loading on and subsequent to the discharge from the ship on which the goods are carried by water.
[50] I cannot subscribe to the proposition advanced by counsel for the plaintiff that Article III.8 of the Rules renders null and void the exclusion and limitation of liability conditions in the Maersk Bill of Lading.
[51] The weight of the jurisprudence and the authors on cargo claims is to the effect that parties enjoy freedom to contract as contemplated in Article VII of the Rules before and after the mandatory application of those Rules which is effective in the period between loading on board and discharge from a vessel (see, Gaskell, N., Bills of Lading and Contract (London): Lloyds Law Press, 2000, at page 257 and Gold, E. et al, Maritime Law, (Toronto), Irwin Law, 2003, at pages 442 to 446.
[52] I agree with counsel for the defendants that in the case of the Maersk Bill of Lading at hand, the parties specifically chose to extend the application of the Rules beyond their period of mandatory application but in doing so excluded some parts of the Rules as Article VII specifically allows.
[53] The Court of Appeal of New South Wales in the Zhi Jiang Kou, [1991] 1 Lloyds' Rep. 493, supports the position of the defendants on partial incorporation of the Hague Rules.
[54] Counsel for the plaintiff cited the case of Primex Forest Products Ltd. v. Harken Towing Co., [1997] B.C.J. No. 1644. This case does not support the plaintiff's proposition. As I see it, the exclusion of liability contained in the contract of towage was held to be inapplicable not because Article III.8 bars partial incorporation of the Hague Rules or Hague-Visby Rules but because the clauses themselves purporting to exclude liability were found to be contradictory and vague.
[55] Counsel for the plaintiff cited two other cases but I fail to see their relevance because they do not deal with the application of Article III.8 of the Hague Rules or Hague-Visby Rules.
[56] Finally, I refer to the U.K. Court of Appeal's decision in Motis Exports Ltd. v. 1912 and Svendborg, [2000] 1 Lloyds' Rep. 211.
[57] That case is relevant because it interprets the terms of clause 5.3(b) of the Maersk Bill of Lading. Clause 5.3(b) in Motis Exports, supra, is worded identically to clause 5.3(b) in Exhibit D-2.
[58] The Court of Appeal held, that properly construed, clause 5.3(b) of the Maersk Bill of Lading would not exclude liability in the event of misdelivery even against a forged Bill of Lading. However, the Court construed the clause as covering an instance of theft by taking without a carrier's consent.
[59] I should add that the U.K. Court of Appeal referred to Article VII of the Hague-Visby Rules and stated that this Article permits the carrier to exempt or limit liability for loss or damage to goods in his custody prior to loading and after discharge from the ship.
[60] The plaintiff's case hinged on misdelivery to a wrong consignee or, alternatively, theft in the container yard at the Port of Conakry. For reasons previously given, the plaintiff has not satisfied me on either points.
[61] The defendants have led positive evidence that the goods were delivered to the proper party, Mr. Diawara.
[62] If Exhibits P-24, P-28 and P-25 had been admissible, they are to the effect that Mr. Diawara received the container which was open without seal and without the proper goods pointing to the logical conclusion the proper goods were stolen.
[63] I conclude that only one of two things could have happened. If the theft occurred in the container yard, the Maersk Bill of Lading excludes liability. If the theft occurred after delivery, such theft is not the defendants' responsibility. Given this conclusion, I need not discuss the issue of the proper limit of liability under the Maersk Bill of Lading nor the point raised by the defendants concerning the proper measure of damages known as Arrived Sound Market Value which was dealt with by the Federal Court of Appeal in the ship Cisco v. Redpath Industries Ltd., [1994] 2 F.C. 279.
[64] For all of these reasons, the plaintiff's action against the proper defendants is dismissed with costs.
"François Lemieux"
J U D G E
FEDERAL COURT
NAME OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-2273-01
STYLE OF CAUSE: PHIL SHTUTMAN v. OCEAN MARINE SHIPPING INC. ET AL
PLACE OF HEARING: Montreal
DATE OF HEARING: 14, 15, 16 June 2005
REASONS FOR JUDGMENT:
DATED: October 31, 2005
APPEARANCES:
Me Jean-François Bilodeau
FOR PLAINTIFF
Me Jean-Marie Fontaine
Me Gassim Bangoura
FOR DEFENDANTS
SOLICITORS OF RECORD:
Robinson Sheppard Shapiro
800 Place Victoria
Suite 4600
Montreal, Quebec H4Z 1H6
FOR PLAINTIFF
Borden Ladner Gervais LLP
1000 de la Gauchetière Street West
Suite 900
Montreal, Quebec H3B 5H4
FOR DEFENDANTS
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