Alcan Aluminium Ltd. et al. v. Unican International S.A. et al., (1996) 113 F.T.R. 81 (TD)

• Judge: Nadon, J.
• Court: Federal Court (Canada)
• Case Date: June 14, 1996
• Jurisdiction: Canada (Federal)
• Citations: (1996), 113 F.T.R. 81 (TD)

Alcan Aluminium Ltd. v. Unican Intl. (1996), 113 F.T.R. 81 (TD)

MLB headnote and full text

Alcan Aluminium Limited and Alcan Smelters and Chemicals Limited (plaintiffs) v. Unican International S.A. and The Ship M.V. "Carrybulk" and Her Owners and C.T.O. International Limited (defendants)

(T-1217-90)

Indexed As: Alcan Aluminium Ltd. et al. v. Unican International S.A. et al.

Federal Court of Canada

Trial Division

Nadon, J.

June 14, 1996.

Summary:

C.T.O. time chartered the Ship "Carrybulk" from Unican (the shipowner). Alcan entered into a booking note contract with C.T.O. for carriage of aluminium ingots overseas from two ports in Quebec onboard the Ship "Carrybulk". The Ship "Carrybulk" did not present itself at the second Quebec port. Alcan arranged to ship its remaining cargo on another vessel. Alcan sued the shipowner and C.T.O. for damages for breach of contract and C.T.O. counterclaimed against Alcan.

The Federal Court of Canada, Trial Division, dismissed Alcan's action against the shipowner because the shipowner was not party to the booking note contract, nor contractually bound to a contract of carriage by bills of lading. The court allowed Alcan's action against C.T.O., holding that C.T.O. breached the booking note contract. Damages were assessed accordingly. The court dismissed C.T.O.'s counterclaim.

Interest - Topic 5010

Interest as damages (prejudgment interest) - Calculation of interest - Simple or compound - C.T.O. time chartered a vessel from Unican - Alcan entered into a booking note contract with C.T.O. for carriage of aluminium ingots overseas from two ports in Quebec - The vessel did not present itself at the second port and Alcan shipped its ingots on another vessel - Alcan sued C.T.O. for damages for breach of contract and claimed compound interest - The Federal Court of Canada, Trial Division, allowed the action and assessed damages - The court, however, refused to award compound interest where Alcan's loss could be fairly compensated in damages without an award of compound interest - See paragraphs 154 to 155.

Interest - Topic 5486

Interest as damages (prejudgment interest) - Maritime matters - [See Interest - Topic 5010 ].

Shipping and Navigation - Topic 1885

Carriage of goods - Charterparties - Breach - C.T.O. time chartered a vessel from Unican - Alcan entered into a booking note contract with C.T.O. for carriage of aluminium ingots overseas from two ports in Quebec onboard the Ship "Carrybulk" - Fearing that the ship was not going to present itself at the second port, Alcan arranged to have another vessel carry the cargo - As feared, Ship "Carrybulk" did not stop at the second port - Alcan sued C.T.O. for damages for breach of contract, seeking to recover the costs incurred in hiring the other vessel - C.T.O. argued that Alcan breached the booking note contract in making alternate shipping arrangements - The Federal Court of Canada, Trial Division, held that Alcan did not breach the booking note contract, but rather, correctly anticipated that C.T.O. would not perform the contract - See paragraphs 98 to 112.

Shipping and Navigation - Topic 1885.1

Carriage of goods - Charterparties - Breach - Damages - C.T.O. time chartered a vessel from Unican - Alcan entered into a booking note contract with C.T.O. for carriage of aluminium ingots overseas from two ports in Quebec - The vessel did not present itself at the second port and Alcan shipped its ingots on another vessel - Alcan sued C.T.O. for damages for breach of contract - The Federal Court of Canada, Trial Division, allowed the action and assessed damages accordingly - Damages were reduced over what was claimed because Alcan could have mitigated its damages further by hiring a less costly alternative vessel - See paragraphs 128 to 153.

Shipping and Navigation - Topic 1888.1

Carriage of goods - Charterparties - Substitution clauses - C.T.O. time chartered a vessel from Unican - Alcan entered into a booking note contract with C.T.O. for carriage of aluminium ingots overseas from two Canadian ports - C.T.O. nominated the Ship "Carrybulk" to perform the contract - The ship picked up cargo only at the first port causing Alcan to ship its remaining cargo on another vessel - Alcan sued C.T.O. for damages for breach of contract - C.T.O. argued that it was entitled to rely on a substitution clause in the contract and could have sent another ship to the second port - The Federal Court of Canada, Trial Division, held that the substitution clause might have allowed C.T.O. to substitute a vessel to the named vessel before it began to perform the contract, but once performance began by picking up cargo at the first port substitution was not allowed - See paragraphs 113 to 123.

Shipping and Navigation - Topic 1889

Carriage of goods - Charterparties - Parties - C.T.O. time chartered a vessel from Unican - Alcan entered into a booking note contract with C.T.O. for carriage of aluminium ingots overseas from two ports in Quebec - The vessel did not present itself at the second port and Alcan had to ship its ingots on another vessel - Alcan sued the shipowner (Unican) and C.T.O. for damages for breach of contract - The Federal Court of Canada, Trial Division, dismissed the action against the shipowner because the only defendant that was a party to a contract with Alcan was C.T.O. and that contract was the booking note - There was no evidence that C.T.O. contracted as the shipowner's agent, nor were there any bills of lading issued to contractually bind the owner - See paragraphs 75 to 95.

Cases Noticed:

Paterson Steamships Ltd. v. Aluminium Co. of Canada, [1951] S.C.R. 852, dist. [para. 91, footnote 18].

Aris Steamship Co. v. Associated Metals & Minerals Corp., [1980] 2 S.C.R. 322; 31 N.R. 584, dist. [para. 91, footnote 18].

Cormorant Bulk-Carriers Inc. v. Canficorp (Overseas Project) Ltd., [1985] A.M.C. 1444; 54 N.R. 66 (F.C.A.), dist. [para. 91, footnote 18].

Carling O'Keefe Breweries of Canada Ltd. v. CN Marine Inc. et al., [1990] 1 F.C. 483; 104 N.R. 166 (F.C.A.), dist. [para. 91, footnote 18].

Grace Plastics Ltd. v. Ship Bernd Wesch II, [1971] F.C. 273 (T.D.), dist. [para. 91, footnote 18].

Ship Berkshire, Re, [1974] 1 Lloyd's Rep. 185 (Q.B.D.), dist. [para. 91, footnote 18].

Pyrene Co. v. Scindia Steam Navigation Co., [1954] 1 Lloyd's Rep. 321 (Q.B.D.), dist. [para. 91, footnote 19].

Universal Cargo Carriers Corp. v. Citati, [1957] 2 Q.B. 401, refd to. [para. 107].

Afovos Shipping Co. S.A. v. Pagnan (R.) and Lli (F.); Ship Afovos, [1983] 1 Lloyd's Rep. 335 (H.L.), refd to. [para. 108, footnote 26].

Standard Precast Ltd. v. Dwyidag Fab Con Products Ltd. (1989), 56 D.L.R.(4th) 385; 33 C.L.R. 137 (B.C.C.A.), refd to. [para. 109, footnote 28].

Casden v. Cooper Enterprises Ltd. et al. (1993), 151 N.R. 199 (F.C.A.), refd to. [para. 109, footnote 28].

Société Anonyme Maritime et Commerciale of Geneva v. Anglo-Iranian Oil Co., [1953] 2 Lloyd's Rep. 466 (Q.B.D.), refd to. [para. 115, footnote 31].

Société Anonyme Maritime et Commerciale of Geneva v. Anglo-Iranian Oil Co., [1954] 1 Lloyd's Rep. 1 (C.A.), dist. [para. 118, footnote 35].

Aktieselskabet de Danske Sukkerfabrikker v. Bajamar Compania Naviera SA; Ship Torenia, [1983] 2 Lloyd's Rep. 210 (Q.B.D.), refd to. [para. 123, footnote 40].

Baud Corp. N.V. v. Brook, [1979] 1 S.C.R. 633; 23 N.R. 181; 12 A.R. 271; [1978] 6 W.W.R. 301; 89 D.L.R.(3d) 1, refd to. [para. 134, footnote 45].

Asamera Oil Corp. Ltd. v. Sea Oil and General Corp. - see Baud Corp. N.V. v. Brook.

British Westinghouse Electric v. Underground Electric Railways, [1912] A.C. 673 (H.L.), refd to. [para. 134, footnote 45].

Michaels et al. v. Red Deer College, [1976] 2 S.C.R. 324; 5 N.R. 99; 57 D.L.R.(3d) 386, refd to. [para. 134, footnote 48].

Carr v. Fama Holdings Ltd. (1989), 45 B.L.R. 42 (B.C.C.A.), refd to. [para. 135, footnote 53].

Ontario Bus Industries Inc. v. Ship Federal Calumet et al. (1991), 47 F.T.R. 149 (T.D.), refd to. [para. 154, footnote 70].

Ontario Bus Industries Inc. v. Ship Federal Calumet et al. (1992), 150 N.R. 149 (F.C.A.), refd to. [para. 154, footnote 72].

Statutes Noticed:

Hague Rules - see International Convention for the Unification of Certain Rules of Law relating to Bills of Lading.

International Convention for the Unification of Certain Rules of Law relating to Bills of Lading (August 25, 1994), generally [para. 92, footnote 20].

Authors and Works Noticed:

Cooke, J., Voyage Charters (1993), pp. 33 [para. 82, footnote 12]; 34 [para. 82, footnote 13]; 65 [para. 104, footnote 22]; 309 [para. 18, footnote 3]; 447 [para. 134, footnote 46]; 693 [para. 84, footnote 15].

Fridman, G., The Law of Contract (3rd Ed. 1994), pp. 600 [paras. 107, 110, 135, footnotes 23, 30, 50]; 781 [para. 135, footnote 51].

Pitch, H., and Snyder, R., Damages for Breach of Contract (2nd Ed. 1989), pp. 8, 9 [para. 135, footnote 52].

Scrutton on Charter-Parties (19th Ed. 1984), pp. 401, 402 [para. 128, footnotes 42, 43].

Wilford, M., Coghlin, T., and Kimball, J., Time Charters (4th Ed. 1995), p. 147 [para. 86, footnotes 16, 17].

Counsel:

Trevor Bishop and Marie-Josée Bédard, for the plaintiff;

Andrew Ness, for the defendant, Unican International S.A.;

Jeremy Bolger, for the defendant, C.T.O. International Ltd.

Solicitors of Record:

Brisset Bishop, Montreal, Quebec, for the plaintiff;

Sproule Castonguay Pollack, Montreal, Quebec, for the defendant, Unican International S.A.;

McMaster Meighen, Montreal, Quebec, for the defendant, C.T.O. International Ltd.

This case was heard in Montreal, Quebec, on October 10-13, 16-18, 20, 23-27, 1995, before Nadon, J., of the Federal Court of Canada, Trial Division, who delivered the following judgment on June 14, 1996.