Canastrand Industries Ltd. v. Ship Lara S et al., (1993) 60 F.T.R. 1 (TD)

• Judge: Reed, J.
• Court: Federal Court (Canada)
• Case Date: November 02, 1992
• Jurisdiction: Canada (Federal)
• Citations: (1993), 60 F.T.R. 1 (TD)

Canastrand Ind. Ltd. v. Ship Lara S (1993), 60 F.T.R. 1 (TD)

MLB headnote and full text

Canastrand Industries Ltd. (plaintiff) v. The Ship "Lara S" and freight and her owners Armadaores Lara S.A., Lucky Star Shipping S.A., and Kimberly Navigation Company Limited carrying on business as Kimberly Line Byzantine Maritime Corp. and all others interested in the Ship "Lara S" and Kim-Sail Ltd. (defendants)

(T-940-89)

Indexed As: Canastrand Industries Ltd. v. Ship Lara S et al.

Federal Court of Canada

Trial Division

Reed, J.

February 11, 1993.

Summary:

The plaintiff sued the defendants respect­ing damage caused to a cargo of baler twine carried on board the Ship Lara S.

The Federal Court of Canada, Trial Divi­sion, allowed the action, holding the defend­ants jointly and severally liable for damages. The court calculated damages accordingly.

Conflict of Laws - Topic 2481

Admiralty - Choice of law - General - The plaintiffs' cargo of baler twine was damaged during a sea voyage from Brazil to Canada - The bill of lading provided that United States law applied to the situ­ation - Under the booking note however, Canadian law was said to apply - The Federal Court of Canada, Trial Division, held that the bill of lading and booking note represented in substance a single contract - The choice of law provision in the long form of the bill of lading (i.e., United States law) prevailed, because it was the provision which was adopted last - The court, however, applied Canadian law to the case because the United States law was not proven - See paragraphs 42 to 52.

Damages - Topic 531

Limits of compensatory damages - Re­moteness - Torts - Recoverable losses - Purely economic loss - [See Shipping and Navigation - Topic 451 ].

Interest - Topic 5010

Interest as damages (prejudgment interest) - Calculation of interest - Simple or com­pound - The plaintiffs' shipment of baler twine was damaged during a voyage at sea - The plaintiff sued the ship, the ship­owner and the charterer for damages - The Federal Court of Canada, Trial Division, allowed the action and awarded compound interest from the time when the damaged cargo arrived - See paragraphs 120 to 121.

Interest - Topic 5486

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

Practice - Topic 602

Parties - Adding or substituting parties - What constitutes a change of parties - The plaintiffs' cargo was damaged during a sea voyage - The plaintiff issued a statement of claim naming, inter alia, Kimberly Line, as defendant - After the limitation period expired, but before service, the pleading was amended without leave under Federal Court Rule 421(1), to read "Kimberly Navigation Co. Ltd. carrying on business as Kimberly Line" - The Federal Court of Canada, Trial Division, held that the a­mendment was permitted under rule 421(1) where the effect was not to substitute or add a new party - See paragraphs 98 to 101.

Practice - Topic 602

Parties - Adding or substituting parties - What constitutes a change of parties - The plaintiffs' cargo was damaged during a sea voyage - The plaintiff issued a statement of claim naming, inter alia, Kimberly Line, as defendant - After the pleading was served and the limitation period expired, the plaintiff, with leave of the court under Federal Court Rules 424 and 425, amended its pleading to add Kim-Sail as a defend­ant - The defendants argued that rules 424 and 425 could not be used because the applicable prescription period under the Hague Rules extinguished the defendants' liability, rather than suspended the plain­tiffs' right of action - The Federal Court of Canada, Trial Division, rejected the defen­dants' argument, because this was not a case where separate and additional or substitute parties were being added - See paragraphs 102 to 107.

Practice - Topic 605

Parties - Adding or substituting parties - Application of limitation periods - [See both Practice - Topic 602 ].

Shipping and Navigation - Topic 451

Ships, ownership and control - Liability of owner - Negligent stowage - The plaintiff purchased baler twine - The shipper arranged to have the twine shipped by sea aboard the "Lara S" - The twine was shipped under a bill of lading issued by the Kimberly Companies (the charterers) - The Kimberly Companies had time char­tered the "Lara S" from its owner, Arma­daores, for one trip only - The twine was damaged en route because of negligent stowage - The Federal Court of Canada, Trial Division, discussed whether the shipowner was liable in tort for the negli­gent stowage (i.e., liable for pure economic loss) - See paragraphs 87 to 97.

Shipping and Navigation - Topic 866

Charter of ships - The charterparty - Charter not by demise - Effect of - [See Shipping and Navigation - Topic 1802 ].

Shipping and Navigation - Topic 1802

Carriage of goods - Carrier - What con­stitutes - The plaintiff purchased baler twine - The shipper arranged to have the twine shipped by sea aboard the "Lara S" - The twine was shipped under a bill of lading issued by the Kimberly Companies (the charterers) - The Kimberly Com­panies had time chartered the "Lara S" from its owner, Armadaores, for one trip only - The twine was damaged en route because of negligent stowage - The plain­tiff sued the vessel, the shipowner and the charterers - An issue arose over whether the shipowner could be considered a "car­rier" under the bill of lading such as to be liable for the damaged twine - The Feder­al Court of Canada, Trial Division, held that the shipowner was a "carrier" - See paragraphs 1 to 86.

Shipping and Navigation - Topic 1941

Carriage of goods - Bills of lading - General - The Federal Court of Canada, Trial Division, stated that "... the law seems clear that when a buyer of goods takes up a clean bill of lading it is pre­sumed, in the absence of evidence to the contrary, that reliance was placed on it" - See paragraph 31.

Shipping and Navigation - Topic 1941

Carriage of goods - Bills of lading - General - [See Conflict of Laws - Topic 2481 ].

Shipping and Navigation - Topic 1945

Carriage of goods - Bills of lading - Carrier - What constitutes - [See Ship­ping and Navigation - Topic 1802 ].

Shipping and Navigation - Topic 2213

Carriage of goods - Damages - Damaged cargo - The plaintiffs' shipment of baler twine was damaged during a voyage by sea - The plaintiff sued the ship, the ship­owner and the charterers for damages - The Federal Court of Canada, Trial Divi­sion, allowed the action and held that the proper test for calculation of damages was to take the arrived sound market value minus the arrived damaged market value - See paragraphs 110 to 115 - The court also awarded compound interest from the time the damaged cargo arrived - See paragraphs 120, 121.

Shipping and Navigation - Topic 2213

Carriage of goods - Damages - Damaged cargo - [See Shipping and Navigation - Topic 1802 ].

Shipping and Navigation - Topic 2395

Carriage of goods - Loading, delivery and stowage - Stowage operations - Negli­gence - [See Shipping and Navigation - Topic 451 and Topic 1802 ].

Shipping and Navigation - Topic 2662

Carriage of goods - Liability - Limitations - Hague Rules - Limitation period - [See both Practice - Topic 602 ].

Cases Noticed:

Kruger Inc. et al. v. Baltic Shipping Co. (1989), 57 D.L.R.(4th) 498 (F.C.A.), refd to. [para. 27].

Silver v. Ocean Steamship, [1930] 1 K.B. 416 (C.A.), refd to. [paras. 31, 41].

Bruck Mills Ltd. v. Black Sea Steamship Co., [1973] F.C. 387 (T.D.), refd to. [para. 41].

Ship Kerlew (1924), 43 F.2d 732 (S.D. Dist. Ct.), refd to. [para. 41].

Cormorant Bulk-Carriers Inc. v. Canfi­corp (Overseas Projects) Ltd. (1984), 54 N.R. 66 (F.C.A.), refd to. [para. 45].

Associated Metals & Minerals v. S.S. Portoria (1973), 484 F.2d 460 (5th Cir.), refd to. [para. 53 et seq.].

Kirno Hill Corp. v. Holt (1980), 618 F.2d 982 (2nd Cir.), refd to. [para. 53].

Paterson Steamships Ltd. v. Aluminum Co. of Canada Ltd., [1951] S.C.R. 852, refd to. [para. 58 et seq.].

Associated Metals & Minerals Corp. et al. v. Ship Evie W., Aris Steamship Co. and Worldwide Carriers Ltd. (1980), 31 N.R. 584; 110 D.L.R.(3d) 1 (S.C.C.), refd to. [para. 58].

Yeramex International v. S.S. Tendo (1979), 595 F.2d 943 (4th Cir.), refd to. [para. 62 et seq.].

Ship Tatiana L., [1988] A.M.C. 757 (S.D.N.Y.), refd to. [para. 62 et seq.].

Dempsey Associate v. S.S. Sea Star, [1972] A.M.C. 1440; 461 F.2d 1009 (2nd Cir.), refd to. [para. 62].

Ship Rio Grande (1971), 334 F.Supp. 1639 (S.D.N.Y.), refd to. [para. 62 et seq.].

Ship Nordstern (1965), 251 F.Supp. 833 (S.D.N.Y.), refd to. [para. 62 et seq.].

Unisor Steel v. Dordrecht, [1981] A.M.C. 2630 (S.D.N.Y.), refd to. [para. 62].

Ship Poznan (1921), 276 F. 418 (S.D.N.Y.), refd to. [para. 62 et seq.].

Tubacex Inc. v. M/V Capetan Georgis II, [1986] A.M.C. 2283, refd to. [para. 64 et seq.].

Joo Seng Hong Kong Co. v. S.S. Unibulk­fir (1979), 483 F.Supp. 43 (S.D.N.Y.), refd to. [para. 64 et seq.].

Pacific Employees Insurance Co. v. Ship Gloria (1985), 767 F.2d 229, refd to. [para. 74 et seq.].

Recovery Services International v. S/S Tatiana L., [1988] A.M.C. 788 (S.D.N.Y.), refd to. [para. 74 et seq.].

Buerger et al. v. New York Life Assur­ance, [1927] 96 L.J.K.B. 930, refd to. [para. 81].

Margarine Union GmbH v. Cambay Prince Steamship Co. (The Wear Breeze), [1969] 1 Q.B. 219, refd to. [para. 85 et seq.].

Leigh and Sillavan Ltd. v. Aliakmon Ship­ping Co., [1986] 1 A.C. 785; 66 N.R. 60 (H.L.), refd to. [para. 85 et seq.].

Donoghue v. Stevenson, [1932] A.C. 562; [1932] All E.R. Rep. 1 (H.L.), refd to. [para. 87].

McAlister (Donoghue) v. Stevenson - see Donoghue v. Stevenson.

Hedley Byrne & Co. v. Heller & Part­ners Ltd., [1964] A.C. 465 (H.L.), refd to. [para. 87].

Caltex Oil v. Dredge Willemstad (1976), 136 C.L.R. 529 (Aust. H.C.), refd to. [para. 88].

Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.), refd to. [para. 89].

St. Lawrence Construction Ltd. v. Federal Commerce and Navigation Co. and Trade Shipping Ltd. (1985), 56 N.R. 174; 32 C.C.L.T. 19 (F.C.A.), refd to. [para. 92].

Schiffahrt & Kohlen v. Chelsea Maritime, [1982] Q.B. 481, refd to. [para. 92].

Triangle Steel v. Korean United Lines (1985), 63 B.C.L.R. 66 (S.C.), refd to. [para. 93].

London Drugs Ltd. v. Brassart and Van­winkel (1992), 143 N.R. 1; 18 B.C.A.C. 1; 31 W.A.C. 1 (S.C.C.), refd to. [para. 94].

London Drugs v. Kuehne & Nagle - see London Drugs Ltd. v. Brassart and Van­winkel.

Canadian Na­tional Railway Co. et al. v. Norsk Pacific Steam­ship Co. and Tug Jervis Crown et al., [1990] 3 F.C. 114; 104 N.R. 321 (F.C.A.), affd. [1992] 1 S.C.R. 1021; 137 N.R. 241 (S.C.C.), refd to. [paras. 95, 96].

Wirth Ltd. v. Ship Atlantic Skou, [1974] 1 F.C. 39 (T.D.), refd to. [para. 99].

Ismail v. Golden Med., [1981] 2 F.C. 610 (T.D.), refd to. [para. 100].

Ladouceur v. Howarth, [1974] S.C.R. 1111, refd to. [para. 101].

Leesona Corp. v. Consolidated Textiles Mills Ltd. and Consolidated Textiles Ltd., [1978] 2 S.C.R. 2; 18 N.R. 29, refd to. [para. 101].

Ship Aries, [1977] 1 Lloyds Rep. 334 (H.L.), refd to. [para. 103 et seq.].

Ship Jay Bola, [1992] Lloyds Rep. 62 (Q.B.), refd to. [para. 103 et seq.].

Ship Leni, [1992] 2 Lloyds Rep. 48 (Q.B.), refd to. [para. 103 et seq.].

Liff v. Peasley, [1980] 1 W.L.R. 781 (C.A.), refd to. [para. 103].

Ketteman v. Hansel Properties Ltd. et al., [1987] A.C. 189; 72 N.R. 321 (H.L.), refd to. [para. 103].

Redpath Industries Ltd. v. Ship Cisco et al. (1992), 55 F.T.R. 278 (T.D.), refd to. [para. 115].

Canadian General Electric v. Pickford & Black, [1972] S.C.R. 52, refd to. [para. 120].

Monk Corp. v. Island Fertilizers Ltd. (1989), 97 N.R. 384 (F.C.A.), refd to. [para. 120].

Ontario Bus Industries Inc. v. Ship Federal Calumet et al. (1991), 47 F.T.R. 149 (T.D.), refd to. [para. 120].

Statutes Noticed:

Carriage of Goods By Sea Act (U.S.), generally [para. 5 et seq.].

Federal Court Rules, rule 421(1), rule 424, rule 425 [para. 98 et seq.].

Hague Rules, generally [para. 44 et seq.].

Authors and Works Noticed:

Carver's Carriage by Sea (13th Ed. 1982), vol. 1, p. 704 [para. 60].

Fridman, Sale of Goods in Canada (3rd Ed.), pp. 443, 444 [para. 91].

Schoenbaum, T.Y., Admiralty and Mari­time Law (1987), pp. 311 [paras. 64, 65]; 312 [para. 65]; 313 [para. 66].

Scrutton on Charter Parties and Bills of Lading (17th Ed. 1964), p. 51 [para. 62].

Tetley, Marine Cargo Claims (3rd Ed.), pp. 133, 134 [para. 27]; 143 [para. 32]; 149, 208-211 [para. 90]; 229 [paras. 50, 90]; 230, 231 [para. 90]; 233-245 [para. 60]; 235 [para. 60]; 236 [paras. 60, 63]; 237 [para. 63]; 242 [para. 60]; 431, 432 [para. 33].

Counsel:

Christopher J. Giaschi, for the plaintiff;

Richard L. Desgagnés, for the defendants.

Solicitors of Record:

McEwen, Schmitt and Co., Vancouver, British Columbia, for the plaintiff;

Ogilvy, Renault, Montreal, Quebec, for the defendants.

This case was heard in Toronto, Ontario, on November 2, 1992, before Reed, J., of the Federal Court of Canada, Trial Division, who delivered the following decision on February 11, 1993.