Mediterranean Shipping Co. S.A. Geneva v. Sipco Inc., (2001) 211 F.T.R. 248 (TD)

• Judge: Blais, J.
• Court: Federal Court (Canada)
• Case Date: June 26, 2001
• Jurisdiction: Canada (Federal)
• Citations: (2001), 211 F.T.R. 248 (TD)

Mediterranean Shipping v. Sipco Inc. (2001), 211 F.T.R. 248 (TD)

MLB headnote and full text

Temp. Cite: [2001] F.T.R. TBEd. OC.041

Mediterranean Shipping Company S.A. Geneva (plaintiff) v. Sipco Inc. (defendant)

(T-361-99; 2001 FCT 1046)

Indexed As: Mediterranean Shipping Co. S.A. Geneva v. Sipco Inc.

Federal Court of Canada

Trial Division

Blais, J.

September 25, 2001.

Summary:

The plaintiff carrier sued the defendant shipper to recover unpaid ocean freight and related charges in relation to the carriage by sea of nine containers. In its defence, the defendant pleaded a legal and equitable set-off for damages it incurred arising from the shipping of seven sea containers under a separate bill of lading. Additionally, the defendant counterclaimed for losses in excess of the set-off, arising from the plaintiff's breach of contract/negligence in relation to the shipment of the seven containers.

The Federal Court of Canada, Trial Division, allowed the plaintiff's action, holding that the defendant was liable for freight charges. The court held that the defendant's claims for legal and equitable set-off of damages were not available as a defence. The court held that the plaintiff was negligent in its handling of the seven containers, but rejected the defendant's counterclaim because the defendant did not prove any damages.

Shipping and Navigation - Topic 2221

Carriage of goods - Damages for delay - General - [See Shipping and Navigation - Topic 2605 ].

Shipping and Navigation - Topic 2225

Carriage of goods - Damages for delay - Set-off - The plaintiff carrier sued the defendant shipper, for unpaid freight (Bill of Lading '585) - In its defence, the defendant pleaded a legal and equitable set-off for damages it incurred arising from the shipping of seven sea containers (Bill of Lading '293) (i.e., only six of the seven containers arrived on schedule causing financial losses for the defendant) - The Federal Court of Canada, Trial Division held that the defence of equitable set-off was not available (i.e., in equity a cargo damage claim cannot be set-off against an unpaid freight claim) - The general rule that freight must be paid without deduction applied unless the contract explicitly stated that set-off was available - In this case, Bill of Lading '293 specifically provided that there was no right to set-off any claims against freight; therefore, legal set-off was not available as a defence either - See paragraphs 1 to 42.

Shipping and Navigation - Topic 2392

Carriage of goods - Loading, delivery and stowage - Duty of carrier - [See Shipping and Navigation - Topic 2605 ].

Shipping and Navigation - Topic 2605

Carriage of goods - Liability - Limitations - Negligence - The plaintiff carrier sued the defendant shipper for unpaid freight - The defendant shipper counterclaimed for losses arising from breach of contract or negligence in the shipment of seven sea containers under another bill of lading - One container was not loaded and therefore delayed, causing the defendant financial losses - The plaintiff argued that its liability, if any, was limited by limitation clauses in the bill of lading - The Federal Court of Canada, Trial Division, held that the plaintiff was negligent in handling the seventh container - The plaintiff knew the container was left behind but did not deliver the container until months later - The court held that the plaintiff could not rely on limitation clauses in the bill of lading to exempt itself of the consequences of its own negligence because of art. 3, rule 8 of the Hague-Visby Rules - The defendant's counterclaim was rejected, however, because the defendant did not prove any damages - See paragraphs 59 to 128.

Shipping and Navigation - Topic 2662

Carriage of goods - Liability - Limitation - Hague rules - Limitation period - The plaintiff carrier sued the defendant shipper for unpaid freight - The defendant shipper counterclaimed for losses arising from the shipment of seven sea containers under another bill of lading in January 1998 - One container arrived late (i.e., in July 1998) causing the defendant financial losses - The plaintiff argued that the defendant's counterclaim was prescribed by the one year limitation period in art. 3, rule 6 of the Hague-Visby Rules (i.e., the rule that a suit must be brought within one year of the delivery of the goods or the date when they should have been delivered) - The statement of claim was filed on March 2, 1999 and the defence and counterclaim on June 18, 1999 - The Federal Court of Canada, Trial Division, held that the counterclaim was not prescribed - The one year limitation period runs from delivery, not discharge, and delivery takes place on the day that the last piece of cargo arrived (in this case in July 1998 when the seventh container arrived) - Therefore the defence and counterclaim were filed within the one year limitation period - See paragraphs 43 to 58.

Shipping and Navigation - Topic 2801

Carriage of goods - Evidence and proof - General - The Federal Court of Canada, Trial Division, discussed the principles regarding proof of a marine cargo claim and its defence - See paragraphs 59 to 65.

Cases Noticed:

S/S Steamship Co. v. Eastern Caribbean Container Line S.A., [1986] 2 F.C. 27; 66 N.R. 74 (F.C.A.), refd to. [para. 35].

Pantainer Ltd. et al. v. 996660 Ontario Ltd. (2000), 183 F.T.R. 211 (T.D.), refd to. [para. 36].

Loeb v. S.S. Washington Mail, [1957] A.M.C. 267; 150 F. Supp. 207 (S.D.N.Y.), refd to. [para. 50].

Francosteel Corp. et al. v. Fednav Ltd. et al., [1991] A.M.C. 1078; 37 F.T.R. 184 (T.D.), refd to. [para. 64].

Statutes Noticed:

Carriage of Goods By Water Act, S.C. 1993, c. 21, Schedule 1, Hague-Visby Rules, art. 3, rule 2 [para. 59]; art. 3, rule 6 [para. 46]; art. 3, rule 8 [para. 81]; art. 4, rule 2(q) [para. 84]; art. 7 [para. 82].

Hague-Visby Rules - see Carriage of Goods By Water Act, S.C. 1993, c. 21, Schedule 1, Hague-Visby Rules.

Authors and Works Noticed:

Tetley, William, Marine Cargo Claims (3rd Ed. 1988), pp. 133 [para. 62]; 142 [para. 63]; 527 [para. 60]; 530 [para. 61]; 671 [paras. 48, 56]; 673 [paras. 49, 53, 56]; 673, note 9 [para. 50]; 843 [para. 83]; 852, 853 [para. 85]; 894 [para. 33]; 904 [para. 34].

Counsel:

Kenrick Sproule, for the plaintiff;

Stephen Turk, for the defendant.

Solicitors of Record:

Sproule & Pollack, Montreal, Quebec, for the plaintiff;

Davis & Turk, Toronto, Ontario, for the defendant.

This matter was heard on June 26, 2001, at Montreal, Quebec, before Blais, J., of the Federal Court of Canada, Trial Division, who delivered the following judgment on September 25, 2001.