Date: 20090227
Docket: T-826-05
Citation: 2009
FC 201
Ottawa, Ontario,
February
27, 2009
PRESENT: The Honourable James K. Hugessen
BETWEEN:
HAPAG-LLOYD
CONTAINER LINIE GmbH
Plaintiff
and
MOO TRANSPORT &
COMMODITIES INC.
carrying on business as COOLTRADE and
NBL AMERICA CORP.
Defendants
AND
BETWEEN:
MOO TRANSPORT & COMMODITIES INC.
carrying on business as COOLTRADE
Plaintiff by Counterclaim
and
HAPAG-LLOYD CONTAINER LINIE GmbH
Defendant by Counterclaim
REASONS FOR ORDER AND ORDER
[1]
This
is a motion for summary judgment brought by the plaintiff, defendant by
counterclaim (the moving party) to dismiss certain parts of the counterclaim
brought by the defendant, plaintiff by counterclaim (the respondent) on the
ground that such claims are excluded by the terms of the contractual
arrangements between them.
I. The Facts
[2]
The moving
party, Hapag-Lloyd Container Linie GmbH operates ocean going vessels worldwide,
it is an international carrier of container cargo and at all material times,
was the carrier of various shipments of Frozen Foods from ports in the United
States to Jakarta,
Indonesia.
[3]
The respondent
Moo Transport & Commodities Inc. carrying on business under the name
Cooltrade is a body incorporated under the laws of Ontario.
[4]
The main
action relates to various fees and charges allegedly incurred by the plaintiff,
moving party, regarding the shipments of seventeen containers of beef lungs and
hearts in the spring and summer of 2004 from various ports in the United States
to Jakarta, Indonesia.
[5]
All seventeen
containers were originally destined to travel from the United States to Jakarta. The Indonesian
government had put a ban on the importation of American beef products while the
containers were in the process of being shipped. Fourteen of the seventeen
containers were detained by the Indonesian authorities at the port in Jakarta. Accordingly, the cargo
could not be released to the respective consignees and the containers were
forced to remain at the Indonesian terminal. The remaining three containers
were stopped in Singapore on the instructions of
the respondent before Hapag-Lloyd’s feeder line from Singapore could deliver
them to Jakarta.
[6]
Nine
of the seventeen containers detained at the port of Jakarta were released from the terminal in
September, 2004 when a new purchaser for the contents of those containers was
found in Indonesia. The contents of the
five remaining containers in Jakarta and of the three containers in Singapore were ultimately
destroyed.
[7]
The moving
party's original claim was comprised of damages in two parts:
i) a claim for terminal and demurrage
charges of the nine containers that were detained and then subsequently
released from the port of
Jakarta;
ii) a claim for terminal,
demurrage and destruction charges incurred for the remaining eight containers
whose contents were destroyed.
[8]
The respondent
has counterclaimed against the moving party for four different types of damages
incurred by it regarding the shipment of the seventeen containers:
i) the return of US$23,000.00 to the
respondent that the moving party is alleged to have improperly retained after
it allegedly breached an agreement regarding the discharge of terminal fees at
the port of Jakarta relating to the nine containers that were released from the
port;
ii) a claim in the amount of
US$19,082.92 for damage cargo that resulted from the failure of the
refrigeration system in one of the eight containers that were ultimately
destroyed;
iii)
a claim in the amount
of US$54,904.26 for consequential damages sustained by the respondent as a
result of the failure of the moving party to discharge the terminal fees in
Jakarta regarding the nine containers subsequently released as per an agreement
that was reached between the parties;
iv)
damages for the value
of the cargo in the eight containers that were ultimately destroyed in Jakarta and Singapore.
[9]
The moving
party's present motion puts in issue the claims listed in (ii) and (iv) above
on the grounds that those claims are excluded by the terms of the contracts
evidenced by the Bills of Lading both because they are out of time and because
they are for consequential damages. Because the first of those grounds relates
to the claims arising out of the destruction of the contents of all eight of
the containers whose contents were destroyed while the second relates to only
some of them it is convenient to deal first with the issue of the timeliness of
the counterclaim and only to move on to the second issue if that claim is found
to have been brought within the applicable period.
II. The Bill of Lading
[10]
Although
the Bill of Lading provides for the application of the Hague-Visby Rules
to the contract of carriage, it is common ground that since those Rules only
cover the period "tackle to tackle" (i.e. from the time the goods
cross the ship's rail at the loading port to the time of discharge) it
is the rules contained in the Bill of Lading itself which must govern. The
following provisions are relevant:
5(b) The
Carrier shall be under no liability whatsoever for loss of or damage to the
Goods howsoever occurring, if such loss or damage arises prior to loading on or
subsequent to the discharge from the vessel. Notwithstanding the above, in the
event that the applicable compulsory law provides the contrary, the Carrier
shall have the benefit of every right, defence, limitation and liberty in the
Hague-Visby Rules or the Hague Rules, notwithstanding that the loss or damage
did not occur at sea. In the event that the Bill of Lading covers a shipment to
or from the United States or territories where COGSA is
applicable, however, the Carriage of Goods by Sea Act (COGSA) shall be
applicable before the Goods are loaded on or after they are discharged from the
vessel.
…
6. Time
for Suit
In any event, the Carrier shall be discharged from all liability in respect of
loss of or damage to the Goods, non-delivery, mis-delivery, delay or any other
loss or damage connected or related to the Carriage unless suit is brought
within one (1) year after delivery of the Goods or the date when the Goods
should have been delivered.
7. Sundry Liability Provisions
…
(6) Scope of Application and Exclusions
(a) The
rights, defenses, limitations and liberties of whatsoever nature provided for
in this Bill of Lading shall apply in any action against the Carrier for loss or
damage or delay, howsoever occurring and whether the action be founded in
contract or in tort.
(b) Save as otherwise provided herein, the Carrier shall in no
circumstances whatsoever and howsoever arising be liable for direct or indirect
or consequential loss or damage or loss of profits.
III. Was the Counterclaim timely
brought?
[11]
The starting
point for the running of the time period stipulated in clause 6 above is the
time when the goods were delivered or should have been delivered. The eight
containers in issue were offloaded in Jakarta or Singapore on dates between May 20 and May 27, 2004.
The grace period for a consignee to take delivery is five days in Jakarta and nine days in Singapore. Assuming that this
grace period can be applied to extend the time of the carrier's obligation to
deliver rather than to the consignee's obligation to accept such delivery, this
would place the latest possible date at which delivery should have taken place
at June 5, 2004. The counterclaim herein was filed June 24, 2005, almost three
weeks after the expiry of the one year period.
[12]
Since
the containers were all shipped from ports in the United States clause 5 above
indicates that the United
States Carriage
of Goods by Sea Act (COGSA) is the governing law. There is no evidence that
the provisions of COGSA differ in any material respect from the law of Canada and I shall decide this
case on my understanding of the latter.
[13]
The law
is clear that a clause such as clause 6 of the Bill of Lading herein is not a
mere prescription period or limitation of the right of action but is rather an
exclusion or forfeiture of any right or cause of action whatsoever. The classic
statement of the law was made by Lord Wilberforce in Aries Tanker
Corp. v. Total Transport Ltd. (The “Aries”), [1977] 1 All ER 398 at 402:
My Lords, if this case is to be decided on the
terms of the contract it would appear to me to be a comparatively simple one.
There is an obligation to pay freight, calculated on the amount of cargo
intaken, which obligation arises on discharge. There is no dispute as to the
amount: it is a liquidated claim. The contract contemplates the possibility
of a cross-claim by the charterers in respect of loss or damage to the cargo
and it expressly provides by incorporation of art III, r 6 of the Hague Rules
that the carrier and the ship shall be discharged unless suit is brought
within one year after the date of delivery or the date when delivery should
have been made. This amounts to a time-bar created by contract. But, and I do
not think that sufficient recognition to this has been given in the courts
below, it is a time-bar of a special kind, viz one which extinguishes the claim
(cf art 29 of the Warsaw Convention 1929) not one which, as most English
statutes of limitation (e g the Limitation Act 1939, the Maritime Conventions
Act 1911), and some international conventions (e g the Brussels Convention on
Collisions 1910, art 7) do, bars the remedy while leaving the claim itself in
existence. Therefore, arguments to which much attention and refined discussion
has been given, as to whether the charterer’s claim is a defence, or in the
nature of a cross-action, or a set-off of one kind or another, however relevant
to cases to which the Limitation Act 1939 or similar Acts apply, appear to me,
with all respects, to be misplaced. The charterers’ claim, after May 1974, and
before the date of the writ, had not merely become unenforceable by action, it
had simply ceased to exist, and I fail to understand how a claim which has
ceased to exist can be introduced for any purpose into legal proceedings,
whether by defence or (if this is different) as a means of reducing the owners’
claim, or as a set-off, or in any way whatsoever. It is a claim which, after
May 1974, had no existence in law, and could have no relevance in proceedings
commenced, as these were, in October 1974. I would add, though this is
unnecessary since the provision is clear in its terms, that to provide for the
discharge of these claims after 12 months meets an obvious commercial need,
namely to allow shipowners, after that period, to clear their books.
[14]
To the same
effect the same learned judge in Port Jackson Stevedoring Pty. Ltd. v.
Salmond & Spraggon (Australia) Pty. Ltd. (The “New York
Star”), [1980] 3 All ER 257 at 262:
Their Lordships’ opinion on these arguments is clear.
However adroitly presented, they are unsound, and indeed unreal. Clause 17 is
drafted in general and all-embracing terms:
‘In any event the Carrier and the ship shall be
discharged from all liability in respect of loss or damage unless suit is
brought within one year after the delivery of the goods or the date when the
goods should have been delivered. Suit shall not be deemed brought until
jurisdiction shall have been obtained over the Carrier and/or the ship by
service of process or by an agreement to appear.’
The reference to
delivery of the goods shows clearly that the clause is directed towards the
carrier’s obligations as bailee of the goods. It cannot be supposed that it
admits of a distinction between obligations in contract and liability in tort;
‘all liability’ means what it says.
Moreover it is quite unreal to equate this clause
with those provisions in the contact which relate to performance. It is a
clause which comes into operation when contractual performance has become
impossible, or has been given up; then, it regulates the manner in which
liability for breach of contract is to be established.
[15]
To
the argument that the counterclaim is out of time the respondent raises two
objections, one substantive, the other procedural. In substance the point is
taken that the respondent did not and could not know the amount and extent of
its loss until the contents of the eight containers had actually been destroyed
and information to that effect had been communicated to it. Reliance is placed
on Central Trust Co. v. Rafuse, [1986] 2 S.C.R. 147. This is the
familiar “contra non valentem” argument.– It is without merit in the
present circumstances for it misapprehends the nature of the respondent's
claim. That claim is not at bottom based on the fact that the contents of the
eight containers were destroyed but much more fundamentally on the fact that
they were not, and could not have been, delivered when they should have been.
That fact was to the respondent's knowledge, as I have indicated, at the latest
on June 5, 2004, and that is when it could and should have claimed for non
delivery.
[16]
Of far
more concern to me is the respondent's procedural argument. It is based on the
fact that clause 6 of the Bill of Lading is not pleaded in the moving party's
defence to the counterclaim. This is contrary not only to the well known
practice that limitation defences must be specifically pleaded (see for example
Hanna v. Canada, [1986] F.C.J. No. 716) but also to the requirements of
Rule 183 of the Federal Courts Rules:
|
183. In a
defence or subsequent pleading, a party shall
(a) admit
every allegation of material fact in the pleadings of every adverse party
that is not disputed;
(b) where it
is intended to prove a version of facts that differs from that relied on by
an adverse party, plead that version of the facts; and
(c) plead any
matter or fact that
(i)
might defeat a
claim or defence of an adverse party, or
(ii)
might take an
adverse party by surprise if it were not pleaded.
|
183.
Une partie est tenue, dans sa défense ou tout acte de procédure ultérieur:
a)
d’admettre, parmi les faits substantiels allégués dans l’acte de procédure
d’une partie adverse, ceux qu’elle ne conteste pas;
b)
de présenter sa version des faits si elle entend prouver une version des
faits différente de celle d’une partie adverse;
c)
de plaider toute question ou tout fait qui, selon le cas:
(i)
pourrait
entraîner le rejet d’une cause d’action ou d’un moyen de défense d’une partie
adverse,
(ii)
pourrait
prendre une partie adverse par surprise, s’il n’était pas plaidé.
|
[17]
This
is a very serious point. The defence to the counterclaim filed by the moving
party (with one exception not presently relevant) simply fails to plead the
terms of the Bill of Lading. If the counterclaim went to trial on the present
pleadings and without amendment the argument that the counterclaim is out of
time could not be heard.
[18]
The moving
party, however, urges upon me that its Motion for Summary Judgment sets out
very clearly in the statement of the grounds for the motion its reliance on the
terms of the Bill of Lading:
8. Containers HLXU 6736027, HLCU
4762232, HLXU 4761062, HLXU 6733265, HLCU 4774676, HLXU 6700662, HLXU 6709042
& HLXU 6740639 were discharged in either Jakarta or Singapore between May 20 and May 27, 2004.
9. The Statement of Defence and
Counterclaim was issued on June 24, 2005.
10. Both the terms of the
Hapag-Lloyd bill of lading and the Hague-Visby Rules, which are
incorporated as part of the Marine Liability Act, provide that an action
against the carrier in respect of goods is time barred unless suit is brought
within one year of the date when those goods should have been delivered;
11. Moo Transport’s right of action
is therefore time barred as the counterclaim was brought more than one year
after the date the goods would have been delivered.
[19]
Counsel
also points to the definition of “pleading” in Rule 2:
|
“pleading”
means a document in a proceeding in which a claim is initiated, defined,
defended or answered.
|
«
acte de procédure » Acte par lequel une instance est introduite, les
prétentions des parties sont énoncées ou une réponse est donnée.
|
[20]
In my view this definition
is certainly broad enough to include the Motion for Summary Judgment and there
can be no doubt that the paragraphs quoted set forth in adequate detail the
limitation defence and put the respondent on proper notice thereof. This
results in the following anomalous situation: the limitation defence is
properly before the Court on the motion and, if well founded, may result in the
early dismissal of some parts of the counterclaim; if the matter were to go to
trial, however, the Court could not, unless leave to amend were sought and
obtained with whatever collateral consequences, including costs, might flow
from that, give effect to that defence to the counterclaim.
[21]
In the
result, I conclude that the counterclaim in respect of the contents of the
eight containers which were destroyed was filed out of time and the moving
party is entitled to judgment dismissing that part of the counterclaim.
However, because the moving party has failed timely to amend its pleadings to
the counterclaim, I shall deprive it of any costs to which it might otherwise
have been entitled on the motion. That is a result which, in accordance with
the requirements of Rule 3, does substantive justice to the parties based on
the merits of their respective claims while at the same time imposing a
properly proportional sanction on the moving party for its inadequate and sloppy
pleading.
IV. The other Grounds
[22]
Because
I have concluded that the counterclaim must fail with respect to all eight
containers, there is no need to reach the moving party's arguments with respect
to only some of them.
ORDER
THIS COURT ORDERS that
1. The motion is allowed and the
counterclaim is dismissed with respect to all claims relating to containers
described as: HLXU
6736027, HLCU 4762232, HLXU 4761062, HLXU 6733265, HLCU 4774676, HLXU 6700662,
HLXU 6709042 & HLXU 6740639.
2. No order as to costs.
“James
K. Hugessen”
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