Carling O'Keefe Breweries of Canada Ltd. v. CN Marine Inc. et al., (1989) 104 N.R. 166 (FCA)

• Judge: Iacobucci, C.J., Heald and Stone, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: November 01, 1989
• Jurisdiction: Canada (Federal)
• Citations: (1989), 104 N.R. 166 (FCA)

Carling O'Keefe v. CN Marine Inc. (1989), 104 N.R. 166 (FCA)

MLB headnote and full text

CN Marine Inc. (appellant/defendant) v. Carling O'Keefe Breweries of Canada Limited and Norlab Ltd. (respondents/plaintiffs) and The Labrador Shipping Co. Ltd., The Vessel "Newfoundland Coast" and Roger Sirois (respondents/defendants)

(A-761-86)

Indexed As: Carling O'Keefe Breweries of Canada Ltd. v. CN Marine Inc. et al.

Federal Court of Appeal

Iacobucci, C.J., Heald and Stone, JJ.A.

December 21, 1989.

Summary:

Carling O'Keefe Breweries shipped three shipping containers filled with cases of beer on a vessel chartered by CN Marine. The containers were lost at sea. Carling O'Keefe commenced an action against CN Marine and others for damages.

The Federal Court of Canada, Trial Division, in a decision reported in 7 F.T.R. 178, held that CN Marine, the ship and its owner were liable for damages. CN Marine appealed. Carling O'Keefe cross-appealed the awarding of prejudgment interest for a period of only two years from the date the action was brought.

The Federal Court of Appeal dismissed the appeal and allowed the cross-appeal, varying the award of prejudgment interest.

Interest - Topic 5009

Interest as damages (prejudgment interest) - Calculation of - A cargo owner successfully claimed damages against CN Marine, a ship and its owner, after the cargo was lost at sea - The trial judge limited the payment of prejudgment interest to two years from the date the action was commenced, rather than allowing it for the whole period from the date of loss - The Federal Court of Appeal held that the two year period represented the time alleged by the trial judge to have been needed to bring the action to trial, thereby implying that the owner or its counsel was not diligent - The court varied the award by allowing interest from the date the loss occurred to the date of judgment - See paragraphs 24 to 29.

Interest - Topic 5486

Interest as damages (prejudgment interest) - Maritime matters - Admiralty - The Federal Court of Appeal stated that the court under its admiralty jurisdiction has the power to award prejudgment interest as an integral part of the damages suffered in respect of rights either ex contractu or ex delicto - The rule is rooted in civil law - See paragraph 26.

Shipping and Navigation - Topic 1943

Carriage of goods - Bills of lading - Demise clause - A brewery wished to ship cases of beer and contacted CN Marine - The beer cases were packed in shipping containers and loaded on the deck of a ship chartered by CN - The containers were lost at sea and the brewery sued CN for damages - CN argued that it was not liable because it was not a carrier, but only the agent of a carrier and therefore protected by the demise clause in the bill of lading - The Federal Court of Appeal, considering the carrying vessel was not named in the bill of lading and CN's conduct, affirmed that CN contracted in its personal capacity, thereby became a carrier, and therefore could not rely on the demise clause - See paragraphs 11 to 17.

Shipping and Navigation - Topic 1943

Carriage of goods - Bills of lading - Demise clause - A demise clause in a bill of lading purported to relieve the carrier of its duties and responsibilities to properly and carefully stow the goods - The Federal Court of Appeal affirmed that the demise clause was null and void pursuant to art. III, rule 8 of the Hague Rules - See paragraph 18.

Shipping and Navigation - Topic 2115

Carriage of goods - Voyage - Liability for loss of cargo - Exclusions - Managerial or navigational negligence - A cargo was lost at sea because of improper stowage - Art. IV, rule 2(a) of the Hague Rules exonerated a carrier from liability resulting from "act, neglect, or default ... in the navigation or ... management of the ship" by the master, etc. - The Federal Court of Appeal held that this defence was unavailable to the carrier - The court refused to equate negligence in stowing the cargo with "neglect ... in the management of the ship" - See paragraphs 20 to 21.

Shipping and Navigation - Topic 2665

Carriage of goods - Liability - Limitations - Hague rules - Meaning of "package" or "unit" - A brewery packed cases of beer into three shipping containers for transport by sea - The containers were lost at sea - The carrier sought to rely on rule 5 of Article IV of the Hague Rules which limited a carrier's liability to $500 "per package or unit" - The carrier argued that its liability was limited to $1500 (3 units x $500) - The brewery argued that each case of beer was a package or unit and the brewery should recover for each case of beer lost - The Federal Court of Appeal affirmed that the total number of packages was the total number of cases of beer as indicated on the bill of lading and waybill, notwithstanding that the containers were delivered sealed to CN - The court therefore held that the brewery's claim was not limited to $1500 - See paragraphs 22 to 23.

Cases Noticed:

Stein Estate v. Ship "Kathy K", [1976] 2 S.C.R. 802; 6 N.R. 359, refd to. [para. 8].

Cormorant Bulk-Carriers Inc. v. Canficorp (Overseas Projects) Limited (1984), 54 N.R. 66 (F.C.A.), dist. [para. 12].

The "Berkshire", [1974] 1 Lloyd's Rep. 185 (Q.B.D.), refd to. [para. 13, Fn. 2].

The "Vikfrost", [1980] 1 Lloyd's Rep. 560 (C.A.), refd to. [para. 13, Fn. 2].

Kenya Railways v. Antares Co. Pte. Ltd. (The "Antares") (No. 1), [1986] 2 Lloyd's Rep. 626 (Q.B.D.) (Com. Ct.), refd to. [para. 13, Fn. 2].

Ngo Chew Hong Edible Oil Pte. Ltd. v. Scindia Steam Navigation Co. Ltd. (The "Jalamohan"), [1988] 1 Lloyd's Rep. 443 (Q.B.D.) (Com. Ct.), refd to. [para. 13, Fn. 2].

Kaleej International Pty Ltd. v. Gulf Shipping Lines Ltd. (1986), 6 N.S.W.L.R. 569 (C.A.), refd to. [para. 13, Fn. 3].

Anderson's (Pacific) Trading Co. Pty Ltd. v. Karlander New Guinea Line Ltd. (1980), 2 N.S.W.L.R. 870 (Com. Law Div.), refd to. [para. 13, Fn. 3].

Epstein v. United States (1949), 86 F. Supp. 740 (S.D.N.Y.), refd to. [para. 13, Fn. 4].

Blanchard Lumber Company v. S.S. "Anthony II" (1966), 259 F. Supp. 857 (S.D.N.Y.), refd to. [para. 13, Fn. 4].

The "Iristo" (1941), 43 F. Supp. 29 (S.D.N.Y.), affd. (1943), 137 F. 2d 619 (2d Cir), cert. denied (1943), 320 U.S. 802, refd to. [para. 13, Fn. 4].

Paterson Steamships Ltd. v. Aluminum Co. of Canada Ltd., [1951] S.C.R. 852, consd. [para. 13].

Associated Metals & Minerals Corporation et al. v. Ship "Evie W", Aris Steamship Co. Inc. and Worldwide Carriers Limited, [1980] 2 S.C.R. 322; 31 N.R 584, refd to. [para. 13].

Apex (Trinidad) Oilfields Ltd. v. Lunham & Moore Shipping Ltd., [1962] 2 Lloyd's Rep. 203 (Ex. Ct.), refd to. [para. 13, Fn. 5].

Delano Corporation of America v. Saguenay Terminals Limited, [1965] 2 Ex. C.R. 313 (Que. Adm. Dist.), refd to. [para. 13, Fn. 5].

Grace Kennedy & Co. Ltd. v. Canada Jamaica Line and Others, [1967] 1 Lloyd's Rep. 336 (Sup. Ct. Que.), refd to. [para. 13, Fn. 5].

Atlantic Traders Ltd. v. Saguenay Shipping Ltd. (1979), 38 N.S.R.(2d) 1; 69 A.P.R. 1 (S.C.T.D.), refd to. [para. 13, Fn. 5].

Weyerhaeuser Co. et al. v. Anglo Canadian Shipping Co. et al., [1984] F.C. 294, refd to. [para. 13, Fn. 5].

Canadian Klockner Ltd. v. DéS A/S Flint et al., [1973] F.C. 988 (T.D.), refd to. [para. 13, Fn. 5].

Samuel, Samuel & Co. v. West Hartlepool Steam Navigation Company (1906), Com. Cas. 115, refd to. [para. 14, Fn. 6].

Chartwell Shipping Limited v. O.N.S. Paper Company Limited (1989), 101 N.R. 1; 26 Q.A.C. 81, refd to. [para. 17, Fn. 8].

Falconbridge Nickel Mines Limited et al. v. Chimo Shipping Limited et al., [1969] 2 Ex. C.R. 261 (Que. Adm. Dist.), refd to. [para. 21, Fn. 14].

The "Ferro", [1893] P. 38 (P.D.) (Div. Ct.), refd to. [para. 21].

The "Glenochil" (1896), P. 10 (P.D.) (Div. Ct.), refd to. [para. 21].

Gosse Millard Limited v. Canadian Government Merchant Marine Limited, [1928] 1 K.B. 717 (C.A.), affd. [1929] A.C. 223 (H.L.), refd to. [para. 21].

International Factory Sales Service Limited v. The Ship "Alexandr Serafimovich" et al., [1976] 1 F.C. 35, refd to. [para. 22].

The "Dundee" (1827), 2 Hagg. Adm. 137, refd to. [para. 26].

The "Gazelle" (1844), 2 W. Rob. 279, refd to. [para. 26].

The "Hebe" (1847), 2 W. Rob. 530, refd to. [para. 26].

Canadian Brine Limited v. The Ship "Scott Misener" et al., [1962] Ex. C.R. 441 (Ont. Adm. Dist.), refd to. [para. 26].

The "Joannis Vatis" (No. 2), [1922] P. 213, refd to. [para. 26, Fn. 15].

The "Northumbria" (1869), L.R. 3 A. & E. 6, refd to. [para. 26, Fn. 15].

The "Berwickshire", [1950] P. 204, refd to. [para. 26, Fn. 15].

Canadian General Electric Co. Ltd. v. Pickford and Black Ltd., [1972] S.C.R. 52, refd to. [para. 26].

Drew Brown Ltd. v. The Ship "Orient Trader", [1974] S.C.R. 1286, refd to. [para. 26].

Bell Telephone Co. of Canada - Bell Canada v. The Ship "Mar-Tirenno" et al., [1974] 1 F.C. 294 (T.D.), refd to. [para. 26].

Davie Shipbuilding Limited and Canada Steamship Lines Limited v. Canada, Government of et al., [1984] 1 F.C. 461; 53 N.R. 50 (F.C.A.), refd to. [para. 26].

Statutes Noticed:

Hague Rules, art. IV., rule 2(a) [paras. 3, 20-21]; rule 2(c), rule 2(q) [paras. 3, 20]; rule 5 [para. 22]; art. III, rule 2 [para. 18, Fn. 12]; rule 8 [para. 18, Fn. 11].

Authors and Works Noticed:

Tetley, Marine Cargo Claims (3rd Ed. 1988), p. 535 [para. 19, Fn. 13].

Counsel:

James Youden and E. Gores, for the appellant;

Kristine Arnet Connidis, for Carling O'Keefe Breweries;

Peter Mancini, for Roger Sirois.

Solicitors of Record:

James D. Youden, Halifax, Nova Scotia, for the appellant;

Campbell, Godfrey & Lewtas, Toronto, Ontario, for Carling O'Keefe Breweries;

Nova Scotia Legal Aid, Sydney, Nova Scotia, for Roger Sirois.

This appeal and cross-appeal were heard before Iacobucci, C.J., Heald and Stone, JJ.A., of the Federal Court of Appeal at Halifax, Nova Scotia on October 31 and November 1, 1989. The decision of the Court of Appeal was delivered by Stone, J.A., at Ottawa, Ontario on December 21, 1989.