Date: 19990519
Docket: A-357-97
CORAM: STONE, J.A.
ROTHSTEIN, J.A.
SEXTON, J.A.
BETWEEN:
RIVA STAHL GmbH, FEDMET TRADING, a division
of FEDMET INC., FEDMET TRADING, a division
of FEDMET INTERNATIONAL CORPORATION and
OKLAHOMA STEEL AND WIRE CO. INC.
- and -
COMBINED ATLANTIC CARRIERS GmbH,
K/S SEA, K/BERGEN BULK CARRIERS,
UNIVAN SHIP MANAGEMENT LTD. and
M.V. "BERGEN SEA" AND HER OWNERS AND CHARTERERS
Respondents
HEARD at Toronto, Ontario, Monday, May 17, 1999.
JUDGMENT delivered at Toronto, Ontario, Monday, May 17, 1999.
REASONS FOR JUDGMENT OF THE COURT BY: STONE J.A.
Date: 19990519
Docket: A-357-97
CORAM: STONE, J.A.
ROTHSTEIN, J.A.
SEXTON, J.A.
BETWEEN:
RIVA STAHL GmbH, FEDMET TRADING, a division
of FEDMET INC., FEDMET TRADING, a division
of FEDMET INTERNATIONAL CORPORATION and
OKLAHOMA STEEL AND WIRE CO. INC.
- and -
COMBINED ATLANTIC CARRIERS GmbH,
K/S SEA, K/BERGEN BULK CARRIERS,
UNIVAN SHIP MANAGEMENT LTD. and
M.V. "BERGEN SEA" AND HER OWNERS AND CHARTERERS
Respondents
REASONS FOR JUDGMENT OF THE COURT
(Delivered from the bench at Toronto, Ontario
on Monday, May 17, 1999)
STONE J.A.
[1] This is an appeal from a Judgment of Lutfy, J. of May 21, 1997, in separate motions by the respondents and by the appellants for summary judgment in this action in admiralty. Lutfy, J. allowed the respondents' motions and dismissed the appellants' motion as well as the action itself with costs1. He thus concluded that there was no "genuine issue for trial".
[2] The claim in the action is for damage to a cargo of steel coils carried on board the M.V. "BERGEN SEA" from Brake, Germany to Houston, Texas in the winter of 1994. The damage was discovered upon the discharge of the cargo at Houston sometime between March 13 and March 16, 1994. The goods were shipped by the appellant Riva Stahl GmbH and were consigned to the appellant Fedmet Trading.
[3] At the time of the sea carriage the M.V. "BERGEN SEA" was subject both to a time charter agreement between her owners and the respondent Combined Atlantic Carriers GmbH and to a voyage charter between that company and the consignee Fedmet Trading. Clause 38 of the time charter provided for bills of lading to "contain and be subject to" the Hague Rules2 "and later amendments". No reference is made in the voyage charter to the application of the Hague Rules or other law that would govern the contract for the carriage of the goods, evidenced in the bill of lading, from Germany to the United States.
[4] The bill of lading in respect of the cargo was issued "for the master" at Breman, Germany on February 19, 1994 by the agents of Combined Atlantic Carriers GmbH. Clause 5 of that document reads in part:
| All of the rights and immunities evidenced by this Bill of Lading and applicable law under the United States Carriage of Goods By Sea Act are hereby extended to the shipowner and any and all charterers, agents, stevedores, substitute carriers and bailees of the said cargo and their respective employees, agents, legal representatives, assigns and underwriters3. |
|
Clause 23 of the bill of lading expressly imposed a time limitation for suit in the following terms:
| In any event the Carrier and vessel shall be discharged from all liability for any loss and damage unless suit is brought within one year after 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 valid service of process". |
|
[5] At the core at the present dispute is whether the respondents extended the time for suit limitation period such that the present action was commenced before that period as extended expired and, if not, whether the respondents either waived the one year limitation of time for suit provided for in the bill of lading or are estopped from relying on that limitation.
[6] Lutfy, J. concluded that the claim was time barred and that the respondents had not waived the time bar nor were estopped from relying upon it.
[7] We respectfully agree with those conclusions.
[8] The agreement to extend the time for suit by the shipowners and then by the time charterer was contingent upon the appellants receiving a "similar extension" from the other of them. It seems to us that, as Lutfy, J. found, this required the appellants after securing the shipowners extension to secure a corresponding extension of time from the charterer4. In point of fact this was never done. The extension granted by the shipowners was to June 13, 1995 "subject to a similar extension" by the time charterer. The time charterer's extension to June 30, 1995 was likewise subject to "a similar time-extension" from the shipowners and from the voyage charterer. In our view, Lutfy, J. was correct in his view that there were no effective extensions of time in place on June 28, 1995 when the action was commenced. The respondents were entitled to insist on exact compliance with the terms of their respective time extension regardless of the motivation for imposing those terms5. If a time extension required clarification or produced some other difficulty for the cargo interest, it was surely for that interest to take the matter up with the other side before the extension expired. In the present case, it matters not in our view that the respondents might not be prejudice by the absence of a time suit extension from the shipowners to June 30, 1995.
[9] The appellants' argument that the time bar was waived by the respondents is based on the fact that at a meeting on July 21, 1995 the respondents offered to settle the claim of some U.S. $203,000 for U.S. $42,500. Lutfy, J. rejected this argument. The record justifies that conclusion, in our view. Nothing therein contained shows that by making that offer the respondents unequivocally and consciously intended to abandon the time bar defence6. At the Motions Judge found, the respondents raised the time bar defence both before and during the course of the July 21, 1995 negotiations and afterward.
[10] We are similarly of the view that no reversible error was committed by Lutfy, J. in rejecting the estoppel argument. We are unable to see how the appellants' willingness to spend some time and expend a relatively small amount of money so as to meet the respondents' request for information after the July 21, 1995 meeting could be construed as supporting estoppel. Indeed, it is not unusual for a claimant in the course of settlement negotiations to provide the other side, upon request, with additional information. If in doing so a requesting party must always run the risk of an estoppel argument, the purpose of out-of-court negotiations would be seriously impaired. Moreover, there was obviously a mutual interest in satisfying the respondents' request. If the requested information managed to persuade the respondents to settle the claim for a higher amount than had been previously offered the appellants would stand to benefit. If, on the other hand, it failed to do so the advantage would be to the respondents.
[11] The appellants final submissions concern the suitability of granting summary judgment in the circumstances of this case7. The appellants complain that respondents have not filed evidence in response to their own direct evidence and were content, instead, to rely on affidavit evidence given on information and belief by one of their solicitors and an employee. According to this argument, the appellants uncontradicted direct evidence ought to have been accepted and in any event the Judge ought to have drawn adverse inferences against the respondents for not responding to the direct evidence by like evidence of their own. We are not persuaded by this argument. As the moving parties, the respondents were not required by the Rules to file direct evidence8. Nor did the Rules require the respondents to file evidence in response to that of the appellants. Their motions for summary judgment were based exclusively on the time bar defence. It is true that their failure to support their motions with direct evidence entitled the Judge to draw adverse inferences. That was a matter for his discretion and he did not see fit to do so. We can find no basis for interfering with this exercise of discretion.
[12] Nor are we persuaded that somehow the evidence of the appellants' witness drawn from his experience in dealing with cargo claims from a carrier's or ship's vantage point was a reason for Lutfy, J. to have rejected the motions and allow the action to proceed to trial. This evidence, which was not contradicted, was to the effect that negotiations for settlement of a claim would not take place after a time bar arose and, accordingly, that the appellants were entitled to rely on it in support of the estoppel argument. However, as Lutfy, J. pointed out, the witness wrote all of his negotiating letters on a "without prejudice" basis. Moreover, in correspondence and at the July 21, 1995 meeting the respondents expressly indicated that while they were prepared to negotiate a settlement they were aware of and relied upon the time bar defence. The Motions Judge, in our view, clearly based his view that estoppel had not been made out on the totality of the evidence. The evidence, on the whole, was remarkably consistent that the parties negotiated throughout against a back drop that the time bar defence was being relied upon. Indeed, as Lutfy, J. found, the interest
of the parties "was to bring the litigation to a cost-effective end through negotiations"9. We are unable to say that he erred in not permitting the action to proceed to trial.
[13] The appeal will be dismissed with costs.
"A.J. Stone"
J.A.
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
DOCKET: A-357-97
STYLE OF CAUSE: RIVA STAHL GmbH, FEDMET TRADING, a
division of FEDMET INC., FEDMET TRADING, a
division of FEDMET INTERNATIONAL
CORPORATION and OKLAHOMA STEEL AND
WIRE CO. INC.
Appellants
COMBINED ATLANTIC CARRIERS GmbH,
K/S SEA, K/BERGEN BULK CARRIERS,
UNIVAN SHIP MANAGEMENT LTD. and
M.V. "BERGEN SEA" AND HER OWNERS AND
CHARTERERS
Respondents
DATE OF HEARING: MAY 17, 1999
PLACE OF HEARING: TORONTO, ONTARIO
REASONS FOR JUDGMENT
| OF THE COURT BY: STONE J.A. |
Delivered at Toronto, Ontario
on Monday, May 17, 1999
APPEARANCES: Mr. Lawrence G. Theall
Mr. J. Brown
For the Appellants
Mr. Paul N. Richardson(Combined Atlantic Carriers GmbH)
Mr. Nigel H. Frawley(K/S Bergen Sea et al.)
For the Respondents
| SOLICITORS OF RECORD: FERNANDES HEARN THEALL |
Suite 601
Toronto, Ontario
M5H 2R3
For the Appellants
BORDEN & ELLIOT
Scotia Plaza
40 King Street West
Toronto, Ontario
M5H 3T4
For the Respondents (K/S Bergen Sea et al.)
STRATHY & RICHARDSON
401 Bay Street, Box 69
Suite 2420
Toronto, Ontario
M5H 2Y4
For the Respondents (Combined Atlantic Carriers GmbH)
FEDERAL COURT OF APPEAL
Date: 19990519
Docket: A-357-97
BETWEEN:
RIVA STAHL GmbH, FEDMET TRADING, a
division of FEDMET INC., FEDMET
TRADING, a division of FEDMET
INTERNATIONAL CORPORATION and
OKLAHOMA STEEL AND WIRE CO. INC.
Appellants
- and -
| COMBINED ATLANTIC CARRIERS GmbH, |
K/S SEA, K/BERGEN BULK CARRIERS,
UNIVAN SHIP MANAGEMENT LTD. and
M.V. "BERGEN SEA" AND HER OWNERS
AND CHARTERERS
Respondents
REASONS FOR JUDGMENT
__________________
1 The judgment is reported as Riva Stahl GmbH et al. v. Combined Atlantic Corners GmbH et al. (1997), 131 F.T. R. 231.
2 These rules are contained in the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading , adopted at Brussels, 25 August 1924.
3 Subsection 1303(6) of the Carriage of Goods by Sea Act , 46 U.S.C.A. provided in part: "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 delivery of the goods... ".
4 As the Motions Judge found at p.8 of his reasons the witness of the appellants - a man experienced in handling subrogated cargo claims - agreed that it was normal practice for time extensions to be granted to the same date because of the interrelationship of shipowners and charterers. It is also noted that when the time charterer granted the extension of time to June 30, 1995 subject, inter alia, to a "similar time-extension" from the voyage charterer, confirmation was requested that the latter has granted an extension "until 30th June 1995".
5 In The "August Leonhardt" , [1985] Lloyd's Rep. 28 (C.A.), a somewhat similar argument to the present one was rejected by Kerr L.J. In that case the shipowners had agreed to extend the time for suit to a date certain "provided Charterers agree likewise". In rejecting the argument Kerr L.J. stated at p.32: "As pointed out by the Judge, the proviso had in fact been inserted as a purported benefit for the shipowners, however illusory, and it was open to them only to grant an extension subject to any condition they pleased, however irrelevant."
6 See Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co. , [1994] 2 S.C.R. 490, per Major J. at p.500, laying down this requirement as one of the "essentials of waiver".
7 The Rules in effect at the relevant time were Rules 432.1 - 432.7 of the Federal Court Rules.
8 Rule 432.2.
9 Reasons for Judgment, at p.10.
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