Supreme Court of Canada
Kalamazoo
Paper Co. v. C.P.R., [1950] S.C.R. 356
Date:
1950-02-21
Kalamazoo Paper Company And Acer, Mclernon Limited
(Plaintiffs) Appellants
and
Canadian Pacific Railway Company (Defendant) Respondent
and
British Columbia Pulp & Paper Company
(Plaintiff) Appellant
and
Canadian Pacific Railway Company (Defendant) Respondent
and
Quatsino Navigation Company Limited (Plaintiff) Appellant
and
Canadian Pacific Railway Company (Defendant) Respondent
1949: October 13, 14, 17, 18; 1950: February 21.
Present: Rinfret C.J. and Taschereau, Rand, Estey and Locke
JJ.
ON APPEAL FROM THE EXCHEQUER COURT OF CANADA, BRITISH
COLUMBIA ADMIRALTY DISTRICT.
Shipping—Ship damaged on rock and later
beached—Allegation that ship's officers were negligent after beaching resulting
in damage to cargo—Failure to use all pumping facilities—Whether such neglect
was in "the management of the ship"—The Water Carriage of Goods Act,
19S6, 1 Ed. VIII, c. 49, Art. IV, s. 2(a).
The insurers of the cargo of a ship damaged by striking a rock
and later beached to prevent sinking brought action to recover damages alleged
to have been suffered by the cargo after the beaching, owing to the failure on
the part of the captain to direct the use of all available pumping facilities
to prevent the entry of further water into the hold and away from the cargo.
The trial judge held that there had been such negligence after the beaching but
that as it was in a matter affecting the management of the ship the defendant
was not liable under the terms of the contract of carriage which incorporated
Art. IV, s. 2(a) of the Water Carriage of Goods Act.
Held, affirming the judgment at the trial that,
assuming there was such a failure on the part of the ship to utilize the
available pumping facilities and that damage to the cargo resulted, this was
neglect of the master in "the management of the ship" within the
meaning of s. 2(a) of the statute and the defendant was not liable.
[Page 357]
Per Taschereau and Locke JJ.: The failure to exercise
reasonable diligence to prevent the entry of further water into the forehold
was neglect in the navigation as well as in the management of the ship within
the meaning of the subsection.
Per the Chief Justice, Rand and Estey JJ.: The evidence
did not establish that any damage was occasioned to the cargo by the entry of
water after the beaching.
The Glenochil [1896] p. 10; The Rodney [1900] p.
112; The Ferro [1893] p. 38; Good v. London SS. Owners'
Association L.R. 6 C.P. 563; Carmichael v. Liverpool Sailing Ship
Owners' Association 19 Q.B.D. 242; Gosse Millerd Ltd. v. Can.
Govt. Merchant Marine [1929] A.C. 223; Rowson v. Atlantic
Transport Co. [1903] 2 KB. 666; Hourani v. Harrison (1927)
32 Com. Cas. 305; The Sylvia 171 U.S. 462 and The Sanfield 92
Fed. Rep. 663 refered to.
APPEAL and CROSS APPEAL from the judgment of the
Exchequer Court of Canada, British Columbia Admiralty District ,
dismissing the action of the insurers of the cargo of a ship for damages
suffered by the cargo when the ship hit a rock and was later beached.
Alfred Bull, K.C. for the appellants.
J. W. de B. Farris, K.C. and J. A.
Wright, K.C. for the respondent.
The judgment of the Chief Justice and of Rand J. was
delivered by
Rand J.: In
this appeal two determinative questions are raised, one of fact and the other
of law, and notwithstanding the conclusion to which I have come on the former,
I think it advisable to deal with both.
A claim is made by cargo insurers against a vessel on the
ground that, beyond a certain point, damage done to the cargo consisting of
wood pulp was caused by the negligence of captain and crew. At 12.30 a.m. on
July 29, 1947 the vessel had sailed from Port Alice on the coast of Vancouver
Island bound for Vancouver. At about 2 o'clock, in heavy fog, the ship stranded
on a ledge of Cross Island in Quatsino Sound. After being held there for
approximately one hour and a half, she slid off and proceeded on the voyage. It
soon became evident that water was entering in volume, and the captain decided
to make for Quatsino where, if necessary, he could beach the vessel in mud. He
arrived at that point in about an
[Page 358]
hour's time, where he found the dock occupied by a tug.
After a short wait, until sinking appeared imminent, he aroused the tug, which
withdrew, and the bow was set in a mud bank, northwesterly from the corner of
the dock, at approximately 5.40 o'clock. Later, around noon, with the tide
rising, he moved the vessel further on to the bank. Next afternoon, a salvage
tug, with heavy pumps and a diver, arrived and by late evening the vessel had
been brought to condition and trim to return to Port Alice: and following a
stay of a few hours there, to continue the voyage to Vancouver. Arriving on
August 2nd, the entire cargo was removed and the vessel placed in dry dock.
It is admitted that up to and including the beaching at
Quatsino, the measures taken by the captain were unexceptionable. The case for
the insurers is that from that time on there was negligence in failing to keep
the water down and out of the cargo. It assumes that at the moment of beaching,
the water in the forward hold, numbered 1 and 2, was not more than 1 1/2"
above the oil tank tops; and alleges that the available pumping capacity, if
properly employed, could have held the water to that level, with the result
that the greater part of the loss would have been avoided. It thus becomes
necessary to examine these matters in some detail.
The factual assumption rests upon conclusions drawn from a
visual examination of the hull made on the morning after the vessel was placed
in dry dock by a surveyor representing the cargo insurers as well as the
general average adjusters. This surveyor, Clarke, at about 9 o'clock on the
morning of August 12th, entered the dock and inspected the damage. No one else
was around except two laborers. By that time the water had long since drained
out of the hull. He found, first, that half a dozen or so rivets had been
disturbed, but whether sheared or not he could not say; several were described
as "hanging" but he denies that any were quite out, that is, through
both plates entirely; there was a fracture of one of the forward keel plates
about 14" in length, 3/8" at its greatest width aft and tapering to a
light hair crack forward: and the keel plate and strakes Nos. 1, 2 and 3 on the
port side were buckled for upwards of 20 feet. From these facts he
[Page 359]
calculated the area of the opening through which the water
could have entered, and at this point it will be better to use his own
language: "I first took my calculations, this ruptured plate, without
going into many difficult calculations for a mere 2 or 3 per cent, the
roughness of the hole and the shape, but taking it as a plain orifice which is
2" square, ⅜" by 14 is equal to 2" square, a plain
orifice. Then I allowed for the seven rivets, the allowance for those seven
rivets was 1.54 square inches … I estimated those rivets at ¾". I didn't
measure them but thought they were ¾". If they are smaller it would be
less, if larger slightly more. It made a total of 4 square inches that water
could enter that ship. Now by a simple method I found with 4" we get 70
tons per hour that can leak into that ship at a 25 foot draft." Later on
he was questioned in relation to the buckled plates:
Q. Do you mean to say there wouldn't be any water go in
between those buckled parts?
A. No.
Q. No?
A. I have allowed for ½" to go in there.
Q. That's where you have allowed it to go in? You haven't
allowed anything. What have you allowed for rivets other than these seven?
A. I have given in my opinion decimal five of the total area
estimated. Instead of.5, .3 would have been more accurate. I allowed.3 to cover
any other rivets.
Q. Where the rivets are out—
A. There were none out entirely.
There is some error in this evidence; 2" square is 4
sq. inches: 14" by ⅜" is 5.25 sq. inches and half of it, 2.6.
But disregarding that, on the basis of an orifice of 4 sq. inches, estimating
the varying head of water and the discharge by the bilge pump, started when the
vessel grounded and kept up throughout, he computed the net intake of water up
to beaching. This was then extended for the 14 hours from that time until 8
o'clock in the evening when he arrived on the scene, making 16 hours in all. He
concluded that in that period 880 tons had entered the forepeak and the forward
hold, an average of 55 tons an hour, and that the quantity held when he arrived
was 412 tons, leaving 468 tons to have been discharged by the pump, at an
average of 29 tons an hour. In the course of half an hour, he noticed a rise at
the aft end of the forward hatch combing on the port side of 2"; the water
[Page 360]
was then within one foot of the 'tween deck and he assumed
it to have been rising continuously from the morning; but admittedly a shifting
of cargo then going on could explain in part at least the apparent rise of
2". Nor is his conclusion that there had been a constant rise
unchallengeable; considering the position of the vessel and the likelihood of
the damaged portion, at low water, being imbedded in the bank, the
probabilities are that the level had lowered and risen. When put ahead ait noon
on a high tide, the vessel was afloat and the damaged parts would then be
exposed and the admission of water most likely freer. During the first two
hours, from the sliding off the ledge to the beaching, 137 tons, on his basis,
would have entered: deducting from this 58 tons pumped out, 79 tons would
remain: 44 tons were required to fill /l tank, and 5 would be in the forepeak:
of the remaining 30 tons, half would be absorbed in the pulp and the rest would
present the level stated, 1½" above the tank tops. From this it is seen
how the result follows mathematically from the assumed area of entrance and the
quantity on his arrival. The latter may for our purposes be accepted and the
former becomes the determining factor.
Clarke also estimated that the vessel would go down one foot
in the head for each 100 tons of water in the hold. When leaving Port Alice,
the draught was 16 feet fore and 17' 11" aft. As the net quantity admitted
up to the beaching was 79 tons, it would follow that between Cross Island and
Quatsino the bow would not be more than one foot below trim. On Clarke's
arrival at Quatsino he judged the draught to be 24'-25'. The captain at the
time of beaching, with the tide low, looking for the marks by the aid of a
torch, had seen that the last one, 21', was below water. Discounting somewhat
Clarke's estimate by reason of the fact that it represents an excessive
distance of 9 feet submergence of the bow from trim, and having regard to tide
and beaching, these, opinions are not greatly in conflict and indicate
approximately the same weight of water. To the captain this meant
"imminent danger"; the vessel was "going perceptibly by the
head": in the words of the first officer, "she was settling fast."
On the run back to Port Alice, Clarke thought the head had been down about 9
feet which he says did not seriously affect
[Page 361]
the steering; and in his opinion there could have been no or
very little difficulty from such a cause in bringing the vessel into Quatsino.
Now the datum so gathered and its conclusions, apart from a
confidential communication made to his principals and to counsel, were
disclosed to no one until presented in evidence at the trial. By every other
person interested, from captain to adjuster, it was assumed that the water at
the time of the beaching had reached a level that accounted substantially for
all of the damage. In his report of survey, Clarke stated that "all
damaged cargo… was as a consequence of striking the rock at Cross Island,
…" He claimed to have passed on his discovery to the surveyor for the hull
insurers, Warkman, although apparently his calculations had not then been made.
Here is what he said:
Q. But beaching didn't cause any damage, not a word about
all the things that did cause it?
A. I don't think they are called for.
Q. We have gone over that question. The underwriters needed
to know—
A. The principle involved in these remarks was reported to,
was discussed with Mr. Harry Warkman, who represented the underwriters on the
other side. I was not doing it entirely without the knowledge of the
representatives of the ship knowing my thoughts in the matter.
Q. It's awfully nice, though, afterwards to have it down in
black and white what your thoughts were, especially when you start to put them
down and then stop?
A. I spoke on the ship to Mr. Harry Warkman.
Q. You never put anything in black and white?
A. It was more or less agreed with Harry Warkman, but the
full extent was not estimated until recently.
* * *
"Q. Who was the surveyor?
A. Harry Warkman, I discussed it with him. We came to the
conclusion it was impossible just by observing, I don't suppose Mr. Warkman
has ever gone and taken any figures on the matter. It was just a specimen.
Q. What was it you decided was impossible?
A. For that amount of water to pass into the ship
immediately it slid off the rocks.
Q. Immediately.
A. Within the trip across, impossible for 400 tons of
water to pass through that damage on the trip across.
Q. Do you know how long the trip across took?
A. Yes, just about an hour, approximately.
Q. Did you figure out with Mr. Warkman how much would go in?
A. No, I did not.
[Page 362]
Warkman denied having been informed of this matter. The
trial judge accepted generally the evidence of Clarke but this particular
feature is not mentioned. There can be little, if any, doubt that in the
secrecy in which Clarke made his inspection and thereafter concealed the
information, it would be against all probability that he would communicate
matters to Warkman as would make clear the significance of what he now
exhibits; there is no suggestion of confidence, and it would have been to run
too great a risk of making them common knowledge, which Clarke had no intention
of doing. Conceivably some reference might have been made to apparent smallness
of openings through which the water entered, but not being clearly associated
with the alleged failure in pumping, it would not be significant; and after two
years, it is not surprising that Warkman, who had been called hurriedly as a
witness, should not recall it; but if its full implication had been revealed,
not only Warkman but others through him, would have heard of it. In view of the
unusual secrecy, I cannot conclude that an effective disclosure was made to Warkman.
Clarke, in cross-examination, suggested the manager of the shipyards should be
able to confirm the facts as he gave them, but, as would have been expected,
the manager recalled nothing of what at the time carried no importance; but he
did say that "no one, I think, could tell approximately what the leak
was."
There are other facts to be weighed with the estimates of
Clarke. The diver who likewise was called hurriedly gave a clear statement of
what he found. His account of the rivet holes was definite that in some cases
the rivets had been forced out completely, and that the suction had drawn his
thumb into the holes. There was one significant item of damage related by him;
he found two or three open seams, two or three feet in length, formed by the separation
of hull plates where they overlapped each other. These he plugged with wedges
which were seen by Warkman at the shipyard: "Two rows of wooden wedges had
been driven in leaking seams." These plates had all been badly buckled for
as much as 15 feet, as the specification for repairs of Warkman and the
evidence of Smith make abundantly clear; in fact the surfaces were described as
corrugated; and the bow had been twisted to almost
[Page 363]
a right angle toward the starboard. Clarke had not mentioned
seams at all on his direct examination and his later reference to them already
quoted was mixed up with the rivet holes. There is this further statement by
him:
Q. Did you make a close examination of all the buckled
plates?
A. I walked along and closely observed all the landing, (s?)
Q. Yes?
A. For possible leaks. I could find nothing there.
Q. Is it correct to say you found nothing else that would
cause—
A. Any serious leaks, with the exception of the rivets and
the fracture of these plates.
He was not recalled. Rebuttal evidence explained that the
plates could be opened at the outer edge of the overlap and the rivet broken or
bent without affecting the inner contact of the plates and in that way the mere
existence of the seams did not mean an entrance for water. Against this there
are two considerations: the rebuttal dealt with plates in their normal
condition and did not take into account the wavy buckling present here; and the
diver's evidence was that the wedges were put in because he felt the suction of
the water into the hull. The captain says "the plate laps were open … I
didn't measure the exact distance these plates were open but I saw a large
outflow of water which was still taking place from damage to the hull: there
was a large outflow of water from these holes." The latter was not seen by
Clarke, and the trial judge implies no questioning of the truthfulness of the
captain.
As is not wholly unknown in pretentions to completeness and
infallibility, it is quite evident that in this seeming mathematical
demonstration one important factor at least in the estimate of the area of the
openings has been omitted. Apart from the evidence already quoted, it is
obvious that any estimate based upon such an examination would be of dubious
dependability, except in a gross sense, for the purposes intended. The proper
test would have been to put water into the forehold under pressure or a known
head and to ascertain its rate of outflow. By that means the state of things
Clarke was seeking to confirm might have been established; but this would have
eliminated surprises and he would have run the risk of having his basic datum
falsified.
There is another circumstance to be considered. On the way
to Quatsino the steering had become difficult, the head,
[Page 364]
in the opinion of the captain and first officer, being down
4'-6', on arrival, and, as already stated, beaching was made in what the
officers considered a state of sinking. On the return trip to Port Alice, there
could not have been more than 250 tons of water in the hold, but Clarke says
the head was down 9 feet. According to the scale of the plan of the vessel,
this depth would bring the draught above the water line. On Clarke's
mathematics, 9 feet would represent 900 tons of water, about double the
capacity of the forehold'. The forward 'tween deck cargo had been unloaded at
Quatsino and the tank in /4 hold had been filled with water. When the vessel
arrived at Port Alice, she was "fairly dry", as agreed to by Smith
with appellant's counsel. At that point about 250 bales of pulp screenings,
deck cargo, had been shifted from forward to aft; and on setting out for
Vancouver the fore draft was 20' 5" and aft, 19'. These facts seem to be
quite inconsistent with the conclusions formed by Clarke as to the conditions on
the run from Cross Island: and I see every reason to accept the statement of
the captain that the vessel was down several feet, sufficient to interfere with
the steering and to justify his serious apprehension; and that it was
considerably less than 9 feet on the return to Port Alice is undubitable.
In the light of all of these matters, including the
convinced judgment of the ship's officers that the hold was virtually filled
before beaching, it would be entirely too dangerous to ground this substantial
liability upon the too plausible deductions of Clarke; there was no danger,
once he had found what he thought to be the facts, of losing the evidence of
them before they could be verified, if that had been desired: the insurers at
that time were in fact in complete command of the vessel; they could have taken
any step thought desirable to ascertain any condition or obtain or preserve or
confirm evidence of negligence; and the failure to do so, although entirely
within the right of Clarke, supports an inference from undisputed or
unquestionable facts against his conclusions which his method risked.
I do not think the evidence makes out failure of the
officers after beaching. Mr. Bull contends that the onus is on the ship owner
to free himself from what is charged.
[Page 365]
The statement of claim alleges negligence and gives
particulars of it, and on the issues so raised the parties went to trial. Proof
was assumed by the plaintiff; but even if we take the initial burden to be on
the defendant, a prima facie case for perils of the sea was made out and the
onus of showing negligence to displace that thereupon shifted to the plaintiff:
The Glendarroch .
The question of law is this: assuming neglect to use the
available pumping capacity and its responsibility for part of the damage done,
was it an omission in relation to the care owed to the cargo or in the
management of the ship? The bill of lading incorporates the Articles of the Water
Carriage of Goods Act, 1936: by Article III (ii):—
Subject to the provisions of Article TV, the carrier shall
properly and carefully load, handle, stow, carry, keep, care for and discharge
the goods carried.
and Article IV (ii) provides that:—
Neither the carrier nor the ship shall be responsible for
loss or damage arising or resulting from
(a) act, neglect, or default of
the master, mariner, pilot or the servants of the carrier in the navigation or
in the management of the ship;
These uniform provisions have been considered in a number of
cases in the English courts, culminating in that of Gosse Millerd Limited v.
Canadian Government Merchant Marine . In that case it was laid
down by the House of Lords that whether the act resulting in the damage to the
cargo is one in the management of the ship depends upon the circumstances in which
it operates. There the cargo was damaged by the entrance of rain through an
uncovered hatch. As the particular use of the tarpaulin was in relation to the
protection of cargo only, the omission to keep it over the hatch was neglect in
maintaining that protection and not in the management of the vessel.
In the circumstances here there is likewise an omission, but
the omission of an act which, as alleged to be necessary for the proper care of
the goods, is at the same time claimed to be required in the management of the
ship. Mr. Farris' contention is that there was a duty on the captain to utilize
the full pumping capacity not only for the general safety of the ship but also
specifically to prevent a collapse of the bulkhead between the forehold
[Page 366]
and the engine room; if the pressure of the cargo and the
water had broken through that barrier, the vessel would have been in the
gravest danger; and measures of anticipation would be acts of management. That
view of the situation was accepted by Smith, J. and I respectfully concur in
his conclusion. The further question is whether an act or omission in
management is within the exception when at the same time and in the same mode
it is an act or omission in relation to care of cargo. It may be that duty to
the ship as a whole takes precedence over duty to a portion of cargo; but,
without examining that question, the necessary effect of the language of
Article III(ii) "subject to the provisions of Article IV" seems to me
to be that once it is shown that the omission is in the course of management,
the exception applies, notwithstanding that it may be also an omission in
relation to cargo. To construe it otherwise would be to add to the language of
paragraph (a) the words "and not being a neglect in the care of the
goods."
On both grounds, therefore, the respondent succeeds, and the
appeal must be dismissed with costs.
Estey, J.:—The
appellant, owner of a cargo of wood pulp sulphide on the ss. "Nootka"
from Port Alice, B.C. to Vancouver, B.C., claims against the respondent as
owner of the "Nootka" for damage to the cargo en route.
The "Nootka" left Port Alice at 12.40 a.m.
D.S.T. on July 29, 1947; fog was soon encountered and at 2.01 a.m. the vessel
grounded on Cross Island. A rising tide enabled the ship to slide off at 3.40
a.m. It was immediately realized that water was coming into the head of the "Nootka"
and the captain determined to proceed to Quatsino Wharf where he arrived at
4.43 a.m. At the Quatsino dock the ship was sinking so fast that the captain grounded
her in the mud. A diver was sent to Quatsino and after an examination of the
ship and temporary repairs the "Nootka" left July 30th at 5.09
p.m. and arrived back at Port Alice at 7.39 p.m.
It has been conceded throughout this litigation that there was
no negligence on the part of the master and the crew aboard the "Nootka"
up to its arrival at Quatsino. The learned trial Judge , however,
found that at Quatsino
[Page 367]
the failure to pump efficiently with the available
facilities had allowed the water to rise in the ship and to further damage the
cargo. He held that 68 per cent of the damage to the cargo was caused by this
negligence but as this negligence was in relation to the management of the ship
he hel dthe respondent not liable by virtue of the Water Carriage of Goods
Act, S. of C. 1936, c. 49, Schedule Art. IV, sec. 2(a).
The appellant in this appeal contends that the negligence at
Quatsino was not in relation to "the management of the ship" and
therefore the respondent does not come within the above mentioned Art. IV, sec.
2(a). The respondent cross-appeals and contends that all of the damage
was caused prior to the ship reaching Quatsino and therefore consequent upon
acts in relation to "the management of the ship."
The first issue is, therefore, whether upon the facts as
found by the learned trial Judge the respondent is liable under Art. III, sec.
2, or not liable because of the provisions of Art. IV, sec. 2(a), or
more precisely stated, was the pumping of the water out of the "Nootka"
conduct in "the management of the ship" within the meaning of
that phrase as used in Art. IV, sec. 2(a).
Art. III, sec. 2, of the said Schedule reads as follows:
Subject to the provisions of Article IV, the carrier shall
properly and carefully load, handle, stow, carry, keep, care for and discharge
the goods carried.
Art. IV reads in part as follows:
2. Neither the carrier nor the ship shall be responsible for
loss or damage arising or resulting from,
* * *
(a) act, neglect, or
defeault of the master, mariner, pilot or the servants of the carrier in the
navigation or in the management of the ship.
The origin and history of the foregoing provisions are
discussed in Scrutton on Charter parties, 15th Ed., p. 439.
Similar provisions were enacted in the United States in 1893 and in Canada in
1910. The immediate provisions are the result of recommendations for the
adoption of the "Hague Rules" with slight modifications as a basis of
legislation at the diplomatic conference on Maritime law at Brussels in October,
1922. The Imperial Economic Conference in 1923 recommended the adoption of the
rules
[Page 368]
throughout the British Empire with the consequence that the
Schedule to the Canadian Act is identical with that of the Carriage of Goods
by Sea Act in Great Britain, 1924.
Lord Sumner states the purpose and object of the foregoing
legislation to be as follows:
The intention of this legislation in dealing with the
liability of a ship-owner as a carrier of goods by sea undoubtedly was to
replace a conventional contract, in which it was constantly attempted, often
with much success, to relieve the carrier from every kind of liability, by a
legislative bargain, under which he should be permitted to limit his obligation
to take good care of the cargo by an exception, among others, relating to
navigation and management of the ship. Obviously his position was to be one of
restricted exemption.
Gosse Millerd Ltd. v. Canadian Government Merchant
Marine .
In the Gosse Millerd Case the House of Lords
considered a claim against the ss. "Canadian
Highlander" for damage to a shipment of tinplates from Swansea to
Vancouver. The ship went from Swansea to Liverpool where cargo was both loaded
and unloaded. When undocking at Liverpool the "Canadian
Highlander" suffered injuries and was placed in dry dock for repairs.
The damage to the tinplates was caused by negligence in moving and replacing
tarpaulins while the vessel was in dry dock which permitted rain water to reach
and damage the tinplates. It was held that this negligence in handling the
tarpaulins was not negligence in the management of the ship and therefore the
case was not brought within the proviso of Art. IV, sec. 2(a) and therefore the
owners of the "Canadian Highlander" were liable under Art.
III, sec. 2. Lord Sumner at p. 240:
I think it quite plain that the particular use of the
tarpaulin, which was neglected, was a precaution solely in the interest of the
cargo. While the ship's work was going on these special precautions were
required as cargo operations. They were no part of the operations of shifting
the liner of the tail shaft or scraping the 'tween decks.
In the Gosse Millerd Case Lord Hailsham, L.C.
approved of the principle laid down in The Glenochil . "The
Glenochil" in the course of a voyage from New Orleans to London
encountered exceptionally heavy weather. While unloading and loading cargo at
London it was necessary to fill some of the water-ballast tanks in order to
stiffen the ship. The learned trial Judge there found that if before admitting
the water into the ballast tanks an
[Page 369]
examination had been made the broken pipes through which the
water passed into and damaged the cotton-seed; oil-cake would have been
discovered. He held failure to make such an examination constituted negligence
causing the damage, but that it was negligence in "the management of the
ship", and the owners, therefore, were not liable by virtue of Art. IV,
sec. 2(a). His judgment was affirmed upon appeal. Sir F.
H. Jeune, President, stated at p. 15:
… the Act prevents exemptions in the case of direct want of
care in respect of the cargo, and secondly, the exemption permitted is in
respect of a fault primarily connected with the navigation or the management of
the vessel and not with the cargo.
Gorell Barnes, J. at p. 19:
… where the act done in the management of the ship is one
which is necessarily done in the proper handling of the vessel, though in the
particular case the handling is not properly done, but is done for the safety
of the ship herself, and is not primarily done at all in connection with the
cargo, that must be a matter which falls within the words "management of
the said vessel."
In The Rodney , a pipe to carry off water
became clogged and was cleared in such a negligent manner as to make a hole in
it and permit water to damage the cargo. This was held to be negligent conduct
in the management of the ship and therefore under Art. IV, sec. 2(a) the owners
did not incur liability for the damaged cargo. Sir F. H. Jeune at
p. 117:
The acts need not be done merely for the safety of the
vessel or for her maintenance in a seaworthy condition. If you extend them to
keeping the vessel in her proper condition, then the act in this case is an act
done in the management of the vessel, and falls within the principle of The
Glenochil.
And Gorell Barnes, J. at the same page:
I think that the words "faults or errors in the
management of the vessel" include improper handling of the ship, as a
ship, which affects the safety of the cargo.
See also The Touraine .
In The Ferro , a quantity of oranges, because they were
so placed in the vessel were damaged. The owners were held liable due to the
provisions under a bill of lading containing language similar to the above
quoted passages from the Schedule. Gorell Barnes, J. at p. 46:
It seems to me a perversion of terms to say that the
management of a ship has anything to do with the stowage of cargo.
[Page 370]
The ss. Germanic arrived at New York with
a heavy coat of ice estimated at 213 tons. This weight was increased by a heavy
fall of snow after her arrival. In the course of unloading cargo and loading
coal the vessel listed first to starboard, later to port, and then after a
short time again to starboard, and finally about four hours later listed to
port carrying the lower part of the open coal port below the water line where
the pumps could not control the inflow of water, as a consequence of which the
ship sank before relief could be had. At the trial, and this was affirmed in
the Circuit Court of Appeals, the loss was found to be due to hurried and
imprudent unloading. This finding was accepted in the Supreme Court of the
United States where it was held that the negligence was not due to the
management of the ship. Mr. Justice Holmes stated at p. 597:
If the primary purpose is to affect the ballast of the ship,
the change is management of the vessel, but if, as in view of the findings we
must take to have been the case here, the primary purpose is to get the cargo
ashore, the fact that it also affects the trim of the vessel does not make it
the less a fault of the class which the first section removes from the
operation of the third. We think it plain that a case may occur which, in
different aspects, falls within both sections, and if this be true, the
question which section is to govern must be determined by the primary nature
and object of the acts which cause the loss.
The foregoing authorities make it clear that the management
of a ship is not restricted to acts done in relation to the ship while she is
sailing. They rather indicate that the line is drawn where the conduct is, in
the language of both Gorell Barnes, J. and Mr. Justice Holmes, primarily in
relation to the management of the ship as distinguished from acts in relation
to the cargo. The conduct of the master and crew prior to beaching at Quatsina
was in relation to the management of the ship. The placing of the vessel in the
mud in order to prevent her sinking was an act for the preservation of and
therefore in relation to the management of the ship. The pumps were started at
Cross Island and were kept going all the time the vessel was at Quatsino. The
appellant stresses the fact that the master said once the "Nootka"
was beached at Quatsino she was safe. He, however, explained she was safe
unless some unfortunate accident occurred. He had in mind and mentioned the
possibility of the bulkheads giving away
[Page 371]
which would be a major accident. In order to avoid this it
was necessary that the pumps be kept working. The fact that there was
negligence in the operation of these pumps does not affect the matter if, as I
think, they were operated for the preservation of and therefore were acts in
relation to the management of the ship.
The master was, as his duty required, concerned about the
cargo. When scows were available at 4.00 p.m. they began unloading the pulp
from hold /l. However, the master was obviously of the opinion that whatever
damage had been suffered by the cargo had been suffered prior to the landing at
Quatsino.
The primary concern of the master in keeping the pumps going
was to get as much water out as he could so that the bulkheads would not give
way and that possibly the ship might continue her course. That being the
primary concern, the fact that the pumping did tend to preserve or affect
"the safety of the cargo", as stated by Gorell Barnes, J. in The
Rodney, supra, does not take the case out of the exception of Art. IV, sec.
2(a). This was damage resulting from an act relating to the ship, and as
stated by Bankes, L.J., in Hourani v. T, & J. Harrison ,
"only incidentally damaging the cargo." It was conduct such as Gorell
Barnes, J. in The Glenochil, supra, refers to as "not primarily
done at all in connection with the cargo." The conclusion must follow that
the pumping of the water out of the "Nootka" was conduct in
the management of the ship and therefore the facts bring this case within Art.
IV, sec. 2(a).
The respondent cross-appealed and contended that the water
which caused the damage was in the hold before the ship was beached at Quatsino
and that all the damage was done before beaching. I agree that the evidence
justifies this conclusion and concur in the analysis of the facts as made by my
brother Rand.
The cross-appeal as such was unnecessary within the meaning
of Rule 100 of this Court. The respondent in supporting the judgment at trial
had a right to raise all the points which he did without a cross-appeal. In the
result the appeal should be dismissed with costs including all of the costs of
preparing the factum. The cross-appeal should be dismissed without costs.
[Page 372]
The judgment of Taschereau and Locke JJ. was delivered by
Locke, J.:—The
appellants as plaintiffs in these consolidated actions brought in the Exchequer
Court, British Columbia Admiralty District , claim to recover from
the defendant railway company as the owner and operator of the ss. Nootka, for
damage to cargo carried in that vessel occasioned under the following
circumstances. On July 29, 1947, shortly before 1 o'clock in the morning the Nootka
sailed from Port Alice for Vancouver and at about 2 a.m. of the same day
ran aground in a dense fog on Cross Island in Quatsino Sound. The vessel
carried some 8,000 bales of wood pulp sulphite, the property of the plaintiffs
in various proportions and, of this, part was carried' in two forward holds
known as Nos. 1 and 2 which formed together one common
hold with two hatches leading into it. This combination hold, referred to in
the reasons for judgment at the trial as the fore hold, consisted of the lower
hold and 'tween decks, and cargo was stored in each. The space forward of the
hold was occupied by the fore peak which, except for some ship's gear, was
empty. The damage claimed is in respect of injury caused by sea water which
gained access to the fore hold at some time following the stranding.
The Nootka remained aground on Cross Island for
approximately one hour and forty minutes and then slipped off on the following
tide. The first officer had ascertained by an examination that in the fore peak
she was beginning to make water, though no significant amount obtained entry
into her until she slid off the rock but, according to both the master and the
first officer, within a very short time after this there was difficulty in
handling the vessel and they discovered she was going down perceptibly by the
head, indicating that she was making water rapidly. The master then decided to
proceed to Quatsino Wharf and to run her aground oh a mud bank immediately
ahead of the wharf and this was done. According to him, they commenced to
operate the bilge pumps promptly after the vessel slid off the rock but this
was insufficient to keep down the water gaining entrance to the vessel, so that
by the time she was tied up at Quatsino Wharf
[Page 373]
at 4.43 a.m. she was considerably below her draft marks
forward. The plaintiffs do not complain of any neglect on the part of the
defendant up to the time the Nootka arrived at Quatsino Wharf. They do,
however, dispute the accuracy of the evidence of both the master and the first
officer as to the amount of water which had gained entrance into the ship by
the time she arrived there. According to the ship's officers, such a large
quantity had gained entrance into the fore hold by that time that all of the
damage sustained by the cargo had been suffered. The evidence for the
plaintiffs, which has been accepted by the learned trial judge, indicated,
however, that a comparatively small amount of water had entered the vessel up
to that time and it is the plaintiffs' case that it was the negligence of the
crew thereafter which caused almost all of the damage to the cargo which
ensued. The learned trial judge, however, while deciding this issue in favour
of the plaintiffs held them disentitled to recover by reason of the provisions
of sec. 2 of Art. IV of the Water Carriage of Goods Act, 1936, and
dismissed the action. The plaintiffs appeal from this decision and the
defendant has cross-appealed on the ground that it was error on the part of the
trial judge to find as a fact that the damages claimed by the plaintiffs were
caused after the arrival of the vessel at Quatsino Wharf. If the statute is an
answer to the claims of the plaintiffs, the question of fact raised by the
cross-appeal need not, in my opinion, be considered.
The case of the plaintiffs is that when the Nootka arrived
at Quatsino Wharf and was beached in the mud there was only some 1 ½ inches
of water in the hold above the top of the fuel oil tanks, it having been kept
at this level by the use of the bilge pump only and that had the ship's
officers promptly put to work other pumps then readily available the water
could have been kept either at or below this level and much the greater part of
the damage which was occasioned to the cargo in the forehold prevented. It is
said that the master failed in his duty to protect the cargo by neglecting to
use the available pumps, so that when the surveyor for the cargo underwriters
arrived at the vessel at 8 o'clock in the evening there was some 13 or 14 feet
of water in the hold, it being above the 'tween deck level. As a result of
arrangements made after
[Page 374]
the arrival of Captain Clarke, the surveyor, the hold was
pumped out with the available pumps but the damage had, of course, then been
done.
The carriage by sea of the cargo in question was from Port
Alice, B.C. to Vancouver and the rules prescribed by the Water Carriage of
Goods Act (cap. 49, Statutes of Canada, 1936) applied. By sec. 2 of Art.
III it is provided that:—
Subject to the provisions of Article IV, the carrier shall
properly and carefully load, handle, stow, carry, keep, care for and discharge
the goods carried.
It is said, however, for the defendant that if there was
failure on the part of the ship's officers to care for the cargo no action lies
by reason of the provisions of Art. IV, sec. 2(a) which provides that:—
Neither the carrier nor the ship shall be responsible for
loss or damage arising or resulting from,
(a) act, neglect, or default of
the master mariner, pilot or the servants of the carrier in the navigation or
in the management of the ship.
These statutory provisions are taken verbatim from the rules
relating to bills of lading contained in the schedule of the Carnage of
Goods at Sea Act 1924 (Imp.) 14 & 15, Geo. V, c. 22. That statute which
was enacted as a result of the recommendations made at the International
Conference on Maritime Law held at Brussels in 1922 follows closely in this
respect the language of the Harter Act, which had been enacted by the Congress
of the United States in 1893. As pointed out in Scrutton on Charter Parties,
15th Ed. p. 263, the Imperial Statute, imitating the Harter Act, draws an
implied distinction between negligence in the navigation or in the management
of the ship and negligence otherwise than in such navigation or management.
From the consequences of the former it allows the ship owner to be relieved,
while from those of the latter it does not.
Neither the Canadian or the Imperial Statute or the Harter
Act attempt to define the meaning or effect of the words "navigation"
or "management". In Gosse Millerd, Ltd. v. Canadian
Government Merchant Marine Ltd. , Lord Hailsham, L. C. pointed out that
the expression "management of the ship" while first appearing in an
[Page 375]
English Statute in the Carriage of Goods at Sea Act 1924,
had a long judicial history in that country and expressed the opinion that
the words should be given the meaning which had been judicially assigned to
them when used in contracts for the carriage of goods by sea prior to its
enactment. In the present matter the learned trial judge, after stating that he
accepted fully the evidence of Captain Clarke, including his conclusions as to
the quantity of water in the vessel at the time it arrived at Quatsino Wharf,
said that if the measures taken by Captain Clarke after his arrival at 8 p.m.
to clear the fore hold of water had been taken by her own officers when she was
first beached, the rise of water in the hold would have been checked and 68 per
cent of the damaged cargo saved and said in part:—
What I think tends to obscure the real issue here is the
circumstance that the rising water had such an immediate damaging effect on the
cargo, and only that might be relatively regarded as a remote effect on any
ship operation. But that cannot matter. Had soundings been taken on arrival at
Quatsino Bay (or before) and the ship's actual condition ascertained and
appreciated, and the water then in the ship pumped out or reduced in volume (as
1 have found it could and should have been with the vessel's facilities then
available) the ship would again have come to life; she would once more have
become a going concern, might even perhaps have found it possible to get under
way and move under her own power to Port Alice, 12 miles distant, for survey
and temporary repairs. The failure to pump efficiently with all facilities at
hand most certainly damaged further cargo, but it was essentially a failure in
a matter that vitally affected the management of the ship, viewed in the light
of the authorities. It was a "want of care of vessel indirectly affecting
the cargo"; or so it seems to me.
For the defendant it is said that if the findings of fact of
the learned trial judge be correct, then the neglect or default of the master
or other servants of the carrier was in "the navigation or in the
management" of the ship, within the meaning of Art. IV, sec. 2(a).
The meaning to be assigned to the words "improper
navigation" in an agreement was considered in Good v. London
Steamship Owners' Association . By the agreement the members of the
Association undertook to indemnify each other in respect of "loss or
damage which by reason of the improper navigation of any such steamship as
aforesaid may be caused to any goods, etc. on board such steamship." The
ss. Severn, while on a voyage from Memel to Hull, encountered heavy
weather and being short of coal put back to Frederickshaven to coal and to
[Page 376]
trim her cargo which had shifted. Going into the harbour she
grounded but got off within an hour and the pumps were put on to try whether
she had made any water and, for this purpose, the bilge-cock was opened but
through the negligence of the crew was not closed when the attempt to pump
ceased. While the vessel was moored at the quay, orders were given to fill the
boilers and for this purpose the sea-cock was opened—this communicated with the
box or tank in which was the bilge-cock—and when the boilers were filled, the
sea-cock being through a like negligence left open, the water entered in large
quantities by means of the open bilge-cock and damaged the cargo. This was held
to be damage from improper navigation, Willes, J. saying in part (p. 569):—
Improper navigation within the meaning of this deed is
something improperly done with the ship or part of the ship in the course of
the voyage. The omission to close the bilge-cock was clearly improper
navigation within the meaning of this deed. It was improper navigation in the
course of the voyage.
In Carmichael v. Liverpool Sailing Ship Owners'
Association , similar language in the articles of a
mutual insurance association was considered. While loading a cargo of wheat, an
opening or port in the side of the vessel was negligently left insufficiently
secure so that water gained access to the cargo and caused damage. The matter
came before A. L. Smith and Wills, JJ. by way of a stated case and the neglect
was held to fall within the expression "improper navigation." On
appeal, Lord Esher, M.R. and Fry, L.J. agreed with A. L. Smith and Wills, JJ.
that the decision in Good v. London Steamship Owners' Association, above
referred to, concluded the matter. Lopes, L.J. said in part (p. 251):—
In my opinion improper navigation means the improper
management of a ship in respect of the cargo during the voyage.
In The Ferro , damage caused to cargo
by negligent stowage was held by Sir Francis Jeune and
Gorell Barnes, J. to be not within the expression "neglect or default in
the navigation or management of the ship" in a bill of lading. In The
Glenochil , goods were shipped under a bill of
lading incorporating the provisions of the Harter Act. After arrival at
her port of destination and during
[Page 377]
the discharge of the cargo it became necessary to stiffen
the ship. For this purpose, the engineer ran water into a ballast tank but
negligently omitted first to ascertain the condition of the sounding-pipe and
casing which had, owing to heavy weather during the Voyage, become broken.
Damage to the cargo ensued. The action failed, the loss being held to fall
within the exception from liability for "faults or errors in the management"
of the vessel. Sir Francis Jeune said in part:—(p. 14)
It is sufficient for us to say that it is negligence
consisting in a mismanagement of part of the appliances of the ship, and
mismanagement which arose because it was intended to do something for the
benefit of the ship, namely, to stiffen her, the necessity for stiffening
arising because part of her cargo had been taken out of her. In that operation
of stiffening there was a mismanagement of a pipe and the result was that water
was let in and damaged the cargo.
and expressed the opinion that the Act permitted the
exemption in respect of a fault primarily connected with the navigation or
management of the vessel, and not the cargo. The learned President did not
consider that it was necessary to deal with the matter as a question of
navigation, saying that (p. 16)
the word "management" goes somewhat beyond—perhaps
not much beyond—navigation, but far enough to take in this very class of acts
which do not affect the sailing or movement of the vessel, but do affect the
vessel herself.
and said that in The Ferro the distinction he
intended to draw was one between "want of care of cargo and want of care
of vessel indirectly affecting the cargo." Gorell Barnes, J. said in part
(p. 19):—
I think that where the act done in the management of the
ship is one which is necessarily done in the proper handling of the vessel,
though in the particular case the handling is not properly done, but is done
for the safety of the ship herself, and is not primarily done at all in
connection with the cargo, that must be a matter which falls within the words
"management of the said vessel".
In The Rodney , the exemption contained
in the Harter Act was again considered. There the vessel meeting with
heavy weather and the forecastle becoming flooded the boatswain, while
endeavouring with the aid of a poker to clear a pipe used to carry off the
drainage, drove a hole through it, thereby admitting water into the forehold
and damaging a portion of the cargo. Following the decision in The Glenochil
the action failed. The
[Page 378]
President in delivering judgment reversing the decision of a
county court judge, referring to the reasons given by the latter in finding for
the plaintiff that the word "management" should be confined to the
performance (though improper) or non-performance of such acts as are or ought
to be done for the safety of the vessel and her maintenance in a seaworthy
condition, said that this was too narrow a view and that the acts need not be
done merely for the safety of the vessel or for her maintenance in a seaworthy
condition, but extended to keeping the vessel in her proper condition. Gorell
Barnes, J: agreeing, said that nothing that was said in The Glenochil was
intended to limit the meaning of the words "management of the ship"
to acts done for the safety of the ship but included improper handling of the
ship as a ship, which affects the safety of the cargo. In Rowson v. Atlantic
Transport Co. , Stirling, L.J. adopted the views
expressed in The Glenochil and The Rodney, and in Hourani v.
Harrison , Atkin L.J. noting this fact adopted the
statement of Gorell. Barnes, J. in The Rodney that "faults and
errors in the management of the vessel include improper handling of the ship as
a ship which affects the safety of the cargo." In the Gosse Millerd case,
above referred to, Lord Hailsham, L.C. expressly approved the principle laid
down in The Glenochil, saying that the principles enunciated in that
case had repeatedly been cited with approval in England and noting that they
had been applied in The Rodney and accepted by the Court of Appeal in Rowson's
case and adopted as correct by the Supreme Court of the United States in
cases arising under the Harter Act.
The relevant language of the Harter Act has been
considered in a large number of American cases. The statute was enacted in 1893
and in The Sylvia , Gray, J. delivering the judgment of the
Supreme Court said in part:—
This case does not require a comprehensive definition of the
words "navigation" and "management" of a vessel, within the
meaning of the act of Congress. They might not include stowage of cargo, not
affecting the fitness of the ship to carry her cargo. But they do include, at
the least, the control, during the voyage, of everything with which the vessel
is equipped for the purpose of protecting her and her cargo against the
[Page 379]
inroad of the seas; and if there was any neglect in not
closing the iron covers of the ports, it was a fault or error in the navigation
or in the management of the ship.
and noted that this view was in accordance with the
English decisions, referring, inter alia, to Good v. London Steamship
Owners' Association, Carmichael v. Liverpool Sailing Ship Owners'
Association, The Ferro and The Glenochil. In The Sanfield ,
Wallace J. delivering the judgment of the Circuit Court of Appeals held that
the failure to open a sluice gate designed to empty the bilges which was
neglected for twenty days during heavy weather was a fault pertaining to the
management of the ship, within sec. 3 of the Harter Act, adopting the
above quoted language from the judgment in The Sylvia.
Here, upon the facts found at the trial, the master having
brought his ship safely to the wharf with only a small quantity of wtaer in the
forehold and having by causing her to be grounded on the mud bank obviated the
danger of her sinking, did nothing to prevent the rise of water in the forehold
other than to continue to use the bilge pump which was, as the result showed,
quite inadequate. Thus, the ship lay from early in the morning of July 29,
1947, until after 8 o'clock that evening, when Captain Clarke arrived, and
having ascertained that there were some 13 or 14 feet of water in the forehold
was instrumental in initiating measures which pumped the hold dry and, with the
assistance of some temporary work on the hull done by a diver, enabled her to
return to Port Alice and thence to Vancouver. There were, as was demonstrated
after Captain Clarke's arrival, sufficient pumps immediately available to have
kept the hull dry or practically so had they been put promptly to work when the
vessel arrived at the wharf. Admittedly, the Captain knew that the vessel was
taking water rapidly as she lay at the wharf. He apparently, however,
erroneously considered that having consulted the engineer regarding the use of
pumps he had discharged his duty.
Accepting the findings of fact made by the learned trial
judge, that there was negligence on the part of the master appears to me to be
undoubted. That this negligence resulted in damage to the cargo is equally
beyond question. Any negligence in failing to take prompt steps to avoid
[Page 380]
the inroad of seawater into the holds of a vessel carrying
perishable cargo must, in my view, be also negligence either in the navigation
or the management of the ship. It is said for the appellant that when the Nootka
was run aground at Quatsino Wharf she was safe from sinking, so that the
failure to operate the available pumps did not jeopardize the safety of the
vessel and that the presence of the large accumulation of water in the forehold
did not constitute a danger to the bulkhead, but I think it must be accepted
upon the authority of The Rodney that this is not decisive of the
matter. Navigation, as indicated by the decisions in Good v. London
Steamship Owners' Association and Carmichael v. Liverpool Sailing Ship
Owners' Association, does not refer merely to the time when the vessel is
at sea. The decision in The Accomac , is clearly
distinguishable on the facts, for there the voyage had ended at the time the
events occurred giving rise to the claim. I think the failure to exercise
reasonable diligence to prevent further water entering the forehold
falls within the same category as the failure of the crew to close the
bilge-cock in Good's case, and the port in Car-michael's case, and was
"neglect in the navigation of the ship" within the terms of the
exception. The learned trial judge considered the matter as one of negligence
in the management of the ship and, having come to a conclusion on this aspect
of the matter, no doubt considered it unnecessary to decide further whether
there was not also negligence in the navigation of the ship. The same neglect
may, in my opinion, be 'both in navigation and in management. Adopting the
language of Gorell Barnes, J. in The Rodney, there was here improper
handling of the ship as a ship which affected the safety of the cargo and this
was fault or error in management. The learned trial judge has said that the
neglect was essentially a failure in a matter that vitally affected the
management of the ship, a conclusion with which I respectfully agree.
In view of my conclusion upon this aspect of the matter, I
express no opinion upon the issue raised by the cross-appeal. It was
unnecessary for the respondent to cross-appeal. Rule 100 provides that a notice
of cross-appeal may be given by the respondent if it is intended upon the
[Page 381]
hearing of the appeal to contend that the decision of the
court below should be varied. Here the action was dis- missed
by the learned trial judge upon the ground that the fault established was
negligence in the management of the ship, for which the respondent was not
liable. The respondent did not seek to have the decision varied. The respondent
was entitled to support the judgment upon any tenable ground and all of the
arguments advanced upon the cross-appeal in support of the contention that the
respondent had not been negligent might have been advanced on its behalf.
The appeal should be dismissed with costs which should include
all taxable costs in connection with the preparation of the factum, including
that portion thereof directed to the question as to whether the respondent had
been guilty of negligence. Under the circumstances, I think the dismissal of
the cross-appeal should be without costs.
Appeal dismissed with costs; cross-appeal
dismissed without costs.
Solicitors for the appellants: Bull, Housser,
Tupper, Ray, Carroll and Guy.
Solicitor for the respondent: J. A. Wright.
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