Canadian General Electric Co. Ltd. v. Pickford & Black Ltd., [1971] SCR 41

Supreme Court of Canada

Canadian General Electric Co. Ltd. v. Pickford & Black Ltd., [1971] S.C.R. 41

Date: 1970-06-01

Canadian General Electric Company Limited (Plaintiff) Appellant;

and

Pickford & Black Limited (Defendant) Respondent.

1970: March 10, 11; 1970: June 1.

Present: Abbott, Judson, Ritchie, Spence and Pigeon JJ.

ON APPEAL FROM THE EXCHEQUER COURT OF CANADA

Shipping—Stowage—Negligence—Cargo shifting—Claim against stevedores—No limitation of liability.

The plaintiff contends that the respondent, a firm of stevedores, had been negligent in the stowing of certain heavy electrical equipment belonging to the plaintiff on board a steamship. The defendant’s Superintendent of stevedores supervised the loading and stowing and the port Warden, who had inspected the cargo after stowage, gave his certificate. The day after sailing it was found that some of the cargo had shifted and the ship turned back to port (Halifax). The evidence of faulty stowage was the only explanation given by anyone for the shifting of the cargo and the consequent damage. The action in contract against the ship was duly settled for valuable consideration and there remained only the claim against the stevedoring company for negligence. The trial judge found that on a balance of probability the damage was caused by defective stowage. An appeal, heard by three judges of the Exchequer Court, was allowed on the ground that there was no evidence of negligence by the stevedores. The plaintiff appealed to this Court.

Held: The appeal should be allowed.

The evidence in the present case discloses that the cargo was defectively stowed, that there was no other reason for it having shifted within less than forty-eight hours after the ship put to sea, and that such defective stowage was an act or omission which reasonably competent stevedores should have foreseen would be likely to injure the cargo and which did injure the cargo and thus caused the damage complained of.

[Page 42]

APPEAL from a judgment rendered by a panel of three judges of the Exchequer Court of Canada[1], reversing a judgment of Pottier D.J.A. (Nova Scotia). Appeal allowed.

F.O. Gerity, Q.C., and G.S. Black, Q.C., for the plaintiff, appellant.

Donald D. Anderson and William M. Kydd, for the defendant, respondent.

The judgment of the Court was delivered by

RITCHIE J.—This is an appeal from a judgment of the Exchequer Court of Canada[2] setting aside a judgment of Pottier J., sitting as District Judge in Admiralty for the Nova Scotia Admiralty District, whereby he held that the respondent, Pickford & Black Limited, a firm of stevedores, had been negligent in the stowing of certain heavy electrical equipment belonging to the appellant on board the Steamship Lake Bosomtwe thereby causing damage to the appellant as a result of the cargo shifting in the hold of the said ship within 48 hours of its having put to sea.

The circumstances giving rise to this litigation are that the appellant, in its capacity as a manufacturer of heavy electrical equipment, had agreed to ship some of that equipment destined for the Republic of Ghana via Halifax, Nova Scotia, on the Steamship Lake Bosomtwe. The goods were shipped from the appellant’s plant at Peterborough, Ontario, on through bills of lading issued by the Canadian Pacific Railways and the Canadian National Railways and were assembled at Halifax by the respondent who, as a stevedoring company, had entered into a contract with the ship owner’s managers undertaking to load its ships at the Port of Halifax.

The Lake Bosomtwe arrived at Halifax on February 20, 1965, by which time all the apellant’s cargo had been assembled so that loading began on that day and was completed late on February 26th when the ship sailed. The day after sailing it was found that some of the cargo had shifted and the ship turned back to Halifax where it arrived on February 28th.

[Page 43]

It is apparent that the ship’s return was occasioned by the fact that the appellant’s heavy cargo in Hold No. 2 had shifted, and as will hereafter appear, the basic question raised by this appeal is whether the evidence discloses it to have been more probable than not that the shifting of the cargo was caused by negligence on the part of the respondent.

The appellant brought action against the ship as well as the respondent, but the action in contract against the ship was duly settled for valuable consideration and there remains only the claim against the stevedoring company for negligence.

In my opinion in undertaking the task of loading and stowing the appellant’s goods in the ship, the stevedoring company was under a duty to the appellant to take reasonable care to avoid acts or omissions which it could reasonably be foreseen would be likely to injure those goods. This duty did not arise out of any contract between the parties but because, in carrying out the work which it had undertaken for the ship owners, the respondent should have had the appellant in contemplation as being a person directly affected by its acts. There does not appear to be any dispute in the courts below as to the existence of such a duty, but it is contended by the respondent that in the event of it being found to have been in breach of that duty, it is entitled to have its liability for damages limited in accordance with the provisions of art. IV, Rule 5 of the Rules in the Schedule to the Water Carriage of Goods Act, R.S.C. 1952, c. 291, Which are incorporated in the contracts of carriage evidenced by the “through bills of lading.” This argument was not dealt with in the courts below, but as it was raised before us and is extensively developed in the factum of the respondent, it is perhaps as well for me to point out that as the stevedoring company is a complete stranger to the contract of carriage it would not be affected by any provisions for limitation of liability or otherwise contained in the bills of lading and if the respondent was in breach of its duty to take reasonable care of the goods which it was stowing in the ship, it must accept the normal consequences of its tort. The law in this regard is, in my opinion, correctly stated in the reasons for judgment of the majority of the House of Lords

[Page 44]

in Midland Silicones v. Scruttons Limited[3], where the relevant cases are fully discussed.

The respondent contends that the appellant took an active part in the loading and stowage of the cargo and that it was thus a party to the way in which the ship was stowed and to any defects there may have been in such stowage. The learned trial judge, however, made the following finding:

I think the responsibility for proper stowage was on the part of the defendant stevedores and the evidence does not show that they ever even themselves assumed that the plaintiffs were relieving them of the responsibility for proper stowage.

I agree with this finding which does not appear to have been disturbed by the Exchequer Court.

It is not disputed that the Lake Bosomtwe returned to the Port of Halifax within 48 hours after its departure and that its return was occasioned by the cargo having shifted. Neither the master nor any of the crew of the ship testified at the trial and the evidence as to the condition of the weather during the voyage given by the Chief Weather Officer for the Atlantic Region was that it was relatively benign for the time of year. There was also evidence to the effect that stowage for the contemplated voyage should have been such as to be capable of withstanding very much heavier weather than anything that was encountered. There was no evidence of any stranding, collision, or structural defect in the ship which could have caused or contributed to the shifting and in fact the evidence of faulty stowage, to which reference will hereinafter be made, was the only explanation given by anyone for the shifting of the cargo and the consequent damage.

The only witnesses who testified on behalf of the respondent were its Superintendent of Stevedores who supervised the loading and stowing and the Port Warden who had inspected the cargo after stowage and had given a certificate that in his opinion the vessel was in a fit state to proceed upon her voyage. The Supervisor of Stevedores not unnaturally testified as to the adequacy of the

[Page 45]

stowage and the Port Warden testified in support of his own certificate, but as the learned trial judge observed:

The bare facts are… that the cargo shifted and damage was caused. How it could be properly stowed and move the way it did I fail to see.

On the day after the ship returned to Halifax, the No. 2 Hold and the appellant’s cargo stowed therein was inspected by Captain Maley who was called by the appellant as an expert on cargo stowage and whose qualifications in this capacity were not questioned. Captain Maley stated that in the No. 2 “tween” deck area “the cargo which shifted was two heavy cases said to weigh 55 tons each located in the square of No. 2 hatch” and he also stated that in the lower hold there had been a slight shifting of a transformer “said to weigh in excess of 100 tons.” Of this latter shifting he said: “It was my opinion that one of the wires must have been slightly slack in order to allow for that to move.”

When asked his opinion as to the cause of the cargo shifting and being damaged, Captain Maley replied: “My opinion is that the cargo was not adequately secured for normal conditions.” I do not propose to consider Captain Maley’s evidence in any greater detail, but it is apparent that this opinion and his description of the conditions which he saw in No. 2 Hold after the ship’s return, taken together with the fact that the cargo had shifted as it did, formed the basis of the learned trial judge’s conclusion “that it is a reasonable deduction from the evidence” (the italics are my own) that on a balance of probability the damage was caused by defective stowage, and that his acceptance of Captain Maley’s evidence is reflected in the decisive sentence towards the end of his reasons for judgment where he said:

I find that the known facts are sufficient to make a finding of negligence on the part of the defendants. I do not think that the doctrine of res ipsa loquitur applies.

[Page 46]

It is thus clear to me that the learned trial judge did not decide this case on the basis that the mere fact that the cargo shifted was evidence of negligence on the part of the stevedores and that his judgment was based on all the evidence, including that of Captain Maley.

In the Exchequer Court of Canada this appeal was heard by a panel of three judges and Mr. Justice Thurlow, who delivered the reasons for judgment on behalf of himself and of Cattanach and Kerr JJ., appears to me to have taken the view that even if it were accepted that inadequate fastening of the cargo was the cause of its shifting, this would nevertheless not constitute evidence of negligence by the stevedores because it would be equally consistent with their having exercised due care to do everything that a reasonably competent stevedore would have foreseen as necessary to prevent shifting.

In the course of his reasons for judgment, Mr. Justice Thurlow observed at one point that:

Even in the circumstances that have been established in this case the shifting of the cargo, in my view, with respect, is not proof of negligence on the part of the appellant. It appears to me to be, at most evidence that the fastening of the cargo was not sufficient to withstand the strains, whatever they may have been, that were imposed on it.

In the next paragraph Mr. Justice Thurlow expands on this by saying:

But the fact that the fastening of the cargo turned out to be inadequate or insufficient to prevent shifting is consistent as well with the exercise by the appellant of due care to do all that a reasonably competent stevedore would have foreseen as necessary to prevent shifting and with his having been guilty of nothing more than having been unable to foresee the necessity of doing something that reasonable competence would not have called upon him to foresee.

The italics are my own.

In returning to the same theme towards the end of his reasons for judgment, Mr. Justice Thurlow appears to me to indicate that the standard of “a reasonably competent stevedore” which he has adopted is based on the evidence of the

[Page 47]

Superintendent of Stevedores who was himself responsible for the stowage, and the Port Warden who approved it. With the greatest respect, Mr. Justice Thurlow’s reasoning appears to me to be that because the inadequate stowage which caused the damage was something which the boss stevedore, the Port Warden and the ship’s captain all overlooked, it was therefore something which reasonably competent stevedores could not have foreseen.

The learned judge’s view seems to me to be summarized in the following excerpt from his reasons for judgment where, referring to the Superintendent of Stevedores, the Port Warden and the ship’s captain, he says:

When three such persons, all concerned in one way or another with the stowage of this cargo, but representing different interests, have, in advance, nothing more to suggest as necessary, and when this is coupled with the fact that even after the event, that is to say even after it has turned out that the fastening of the cargo was inadequate, no one has been able to point to what it was that was wrong with the stowage it seems to me that the balance of probabilities favours the view that the fault lay in the lack of something, the necessity for which was not reasonably foreseeable and that this view is to be preferred to that of attributing the shifting of the cargo to failure to do properly some unspecified part of what could reasonably be foreseen to be necessary…

I am unable to accept this reasoning which in any event appears to me to be based on the assumption that there was a complete absence of evidence of inadequate stowage.

That Mr. Justice Thurlow considered this assumption to be of prime importance is evidenced by his saying:

Here, to my mind, the fact that no one has offered so much as an opinion, let alone proved facts, as to what it was that was wrong with the stowage and that caused the damage, becomes a prime importance.

It must, I think, follow from this that the learned Judges of the Exchequer Court who sat on this appeal gave no weight at all to the evidence of Captain Maley whose professional opinion, based on an examination of the damaged cargo in

[Page 48]

Hold No. 2 the day after the ship’s return, was that “What it was that caused the damage” was that the cargo was “not adequately secured for normal conditions.”

It is true that Captain Maley, having been engaged by the appellant or its insurers, was not an entirely disinterested witness, but as I have indicated, the decision of the learned trial judge appears to me to have been based in great measure on his evidence and with the greatest respect, I do not think it should be ignored.

With all respect for the learned Judges sitting on appeal in the Exchequer Court, I am of opinion that the evidence in the present case discloses that the cargo was defectively stowed, that there was no other reason for it having shifted within less than 48 hours after the ship put to sea, and that such defective stowage was an act or omission which reasonably competent stevedores should have foreseen would be likely to injure the cargo and which did injure the cargo and thus caused the damage complained of.

For all these reasons I would allow this appeal and restore the judgment of the learned trial judge.

The appellant is entitled to its costs both in this Court and in the Exchequer Court of Canada.

Appeal allowed with costs.

Solicitors for the plaintiff, appellant: F.O. Gerity, Toronto, and G.S. Black, Halifax.

Solicitor for the defendant, respondent: D.D. Anderson, Dartmouth.