St. Lawrence Construction Ltd. v. Federal Commerce and Navigation Co. Ltd. and Tande Shipping Ltd., (1985) 56 N.R. 174 (FCA)

• Judge: Urie, Mahoney and Stone, JJ.
• Court: Federal Court of Appeal (Canada)
• Case Date: January 04, 1985
• Jurisdiction: Canada (Federal)
• Citations: (1985), 56 N.R. 174 (FCA)

St. Lawrence Constr. v. Com. & Nav. (1985), 56 N.R. 174 (FCA)

MLB headnote and full text

St. Lawrence Construction Limited v. Federal Commerce and Navigation Company Limited and Tande Shipping Limited

(A-246-82)

Indexed As: St. Lawrence Construction Ltd. v. Federal Commerce and Navigation Co. Ltd. and Tande Shipping Ltd.

Federal Court of Appeal

Urie, Mahoney and Stone, JJ.

January 4, 1985.

Summary:

A construction company (shipper) contracted with a shipping company (carrier) to transport equipment and supplies to a remote construction site. The cargo was shipped by barge and tug. Before reaching its destination, the barge was grounded on a sand bar. The shipper brought an action for damages against the carrier, claiming $2.65 million in costs caused by the delay in receiving delivery. The shipper had declared general average and counterclaimed for the shipper's share.

The Federal Court of Canada, Trial Division, allowed the action. The court found that the carrier failed to exercise due diligence to ensure the tug was seaworthy and that unseaworthiness was the cause of the grounding. The court held that the carrier's liability was not limited under the Hague Rules or the Canada Shipping Act. The court dismissed the counterclaim, because although a true general average situation existed, the carrier was not entitled to contribution from the shipper where the carrier was at fault for the grounding. The carrier appealed; the shipper cross-appealed.

The Federal Court of Appeal allowed the appeal in part and dismissed the cross-appeal. The court affirmed the carrier's liability, but held that liability was limited under the Hague Rules. The court affirmed the existence of a general average situation and that the carrier was not entitled to contribution from the shipper. The court remitted the matter to the Trial Division for assessment of damages.

Contracts - Topic 4005

Remedies for breach - Negligent breach - Availability of tort action - The Federal Court of Appeal generally discussed the development of the law respecting the availability of a tort action where there has been negligent performance of a contractual obligation in a contractual relationship - The court stated that a tort action was no longer limited to cases of professional negligence or negligence of those exercising common callings - See paragraphs 35 - 42.

Interest - Topic 5544

Interest as damages - Practice - Pleading - A plaintiff's pleadings sought interest on its judgment at the "legal rate", which was 5% - No amendment was sought to seek a higher rate - At trial the plaintiff was awarded 5% interest - On appeal, the plaintiff sought higher interest for the first time - The Federal Court of Appeal affirmed that the plaintiff was only entitled to 5% interest, because that was all that was sought and prayed for in the pleadings - See paragraphs 52 - 54.

Shipping and Navigation - Topic 1805

Carriage of goods - General - Contractual vs. tortious liability - A carrier failed to exercise due diligence to ensure the seaworthiness of its barge and tug, which constituted both contractual and delictual fault - A loss occurred - The shipper claimed in both tort and contract - The Federal Court of Appeal stated that the shipper was entitled to bring a tort action to recover damages for delictual fault or negligence notwithstanding the existence of a contract of carriage, but that any contractual limits of liability were still available to the carrier - See paragraphs 34 - 42.

Shipping and Navigation - Topic 2110

Carriage of goods - Voyage - Liability for loss of cargo - Due diligence defined - A carrier dispatched a tug and barge to transport cargo to a remote part of James Bay - The carrier failed to examine available information concerning weather in the area that would have shown that the tug was incapable of controlling the barge in weather conditions reasonably expected to be found in James Bay - The Federal Court of Appeal affirmed that the carrier failed to exercise due diligence to ensure the seaworthiness of the tug - See paragraphs 21 - 25.

Shipping and Navigation - Topic 2111

Carriage of goods - Voyage - Liability for loss of cargo - Seaworthiness defined - A barge was stranded on a sand bar by the wind - The tug accompanying the barge had insufficient horsepower to control the barge in the adverse wind conditions - The Federal Court of Appeal affirmed that a tug that was incapable of controlling a barge in weather conditions that were reasonably expected during the voyage was unseaworthy - See paragraphs 12 - 20.

Shipping and Navigation - Topic 2225

Carriage of goods - Damages for delay - Set-off - The Federal Court of Appeal opined that a shipper's claim for damages for delay of delivery could not be set-off against a claim for freight charges owing to the carrier - See paragraph 51.

Shipping and Navigation - Topic 2270

Carriage of goods - General average claims - Defences - Ship was unseaworthy - A general average situation was brought about by a carrier's failure to exercise due diligence to ensure that its tug and barge were seaworthy - The Federal Court of Appeal affirmed that the carrier was not entitled to recover a contribution in general average from the shipper, where the general average situation was brought about by the carrier's own actionable fault - See paragraphs 44 - 47.

Shipping and Navigation - Topic 2625

Carriage of goods - Liability - Limitations - Statutes - "Actual fault or privity" defined - A carrier's liability was limited under the Canada Shipping Act where the loss was not caused by the carrier's "actual fault or privity" - The Federal Court of Appeal affirmed that the carrier's failure to exercise due diligence to ensure that its tug and barge were seaworthy constituted "actual fault", disentitling the carrier to limit its liability under the Act - See paragraphs 31 - 32.

Shipping and Navigation - Topic 2661

Carriage of goods - Liability - Limitations - Hague Rules - General - A shipper submitted that a carrier was not entitled to limit liability under the Hague Rules where a bill of lading was not issued - The Federal Court of Appeal held that the issuance of the bill of lading was immaterial where the issuance was contemplated by the parties and it was intended that the Rules apply - The court stated that the absence of a bill of lading did not necessarily exclude a carrier's right to rely on the limitations of liability under the Hague Rules - See paragraphs 26 - 30.

Cases Noticed:

Monarch Steamship Co., Ltd. v. Oljefabriker, [1949] A.C. 196, refd to. [para. 19].

Smith, Hogg & Co., Ltd. v. Black Sea and Baltic General Insurance Co., Ltd., [1940] A.C. 997; 64 Lloyd's Rep. 87, appld. [para. 19].

Baxter's Leather Co. v. Royal Mail Steam Packet Co., [1908] 2 K.B. 626, refd to. [para. 22].

Gosse Millerd Ltd. v. Canadian Government Merchant Marine, Ltd., [1927] 2 K.B. 432, refd to. [para. 22].

Charles Goodfellow Lumber Sales Ltd. v. Verreault, Hovington and Verreault Navigation Inc., [1971] 1 Lloyd's Rep. 185, appld. [para. 24].

Harland & Wolff v. Burns & Laird Lines Ltd., [1931] Sess. Cas. 722, dist. [para. 28].

Anticosti Shipping Ltd. v. Viateur St-Armand, [1959] S.C.R. 373, appld. [para. 29].

Pyrene Co., Ltd. v. Scindia Steam Navigation Co., Ltd., [1954] 1 Lloyd's Rep. 321, appld. [para. 29].

G.H. Renton & Co. Ltd. v. Palmyra Trading Corporation, [1956] 2 Lloyd's Rep. 379, refd to. [para. 30].

Commercio Transito Int. v. Lykes Bros. Steamship Co. Ltd., [1957] 1 A.M.C. 1189, refd to. [para. 30].

Lennard's Carrying Co. Ltd. v. Asiatic Petroleum Co. Ltd. (1915), 13 Asp. M.L.C. 81 (H.L.), refd to. [para. 31].

Robin Hood Mills Ltd. v. Paterson Steamships Ltd., [1937] 3 D.L.R. 1 (P.C.), refd to. [para. 31].

Laval Co. v. Colonial Steamship Ltd., [1961] S.C.R. 221, refd to. [para. 31].

Marpole Towing Ltd. v. British Columbia Telephone Co., [1971] S.C.R. 321, refd to. [para. 31].

C. Czarnikow, Ltd. v. Koufos, [1969] 1 A.C. 350, refd to. [para. 35].

Dominion Chain Co. Ltd. v. Eastern Construction Co. Ltd. (1976), 12 O.R.(2d) 201, refd to. [para. 35].

Power v. Halley (1978), 18 Nfld. & P.E.I.R. 531; 47 A.P.R. 531; 88 D.L.R.(3d) 381, refd to. [para. 35].

District of Surrey v. Carroll-Hatch & Associates Ltd. (1979), 101 D.L.R. (3d) 218 (B.C.C.A.), refd to. [para. 35].

Midland Bank Trust Co. Ltd. v. Hett, Stubbs & Kemp, [1979] 1 Ch. 384, refd to. [para. 35].

Canadian Western Natural Gas Co. Ltd. v. Pathfinder Surveys Ltd. (1980), 21 A.R. 459; 12 Alta. L.R.(2d) 135, refd to. [para. 35].

Kienzle v. Stringer (1982), 35 O.R.(2d) 85, refd to. [para. 35].

Coggs v. Bernard (1703), 2 Ld. Raym. 909, refd to. [para. 35].

Nugent v. Smith (1876), 1 C.P.D. 19, refd to. [para. 35].

Belfast Ropework Co. v. Bushell, [1918] 1 K.B. 210, refd to. [para. 35].

S.M.T. (Eastern) Ltd. v. Ruch, [1940] 1 D.L.R. 190, refd to. [para. 35].

Paterson Steamships Ltd. v. Canadian Co-operative Wheat Producers Ltd., [1934] A.C. 538 (H.L.), refd to. [para. 35].

Bretherton v. Wood (1821), 3 Brod. & B. 54, refd to. [para. 35].

Liver Alkali Co. v. Johnson (1874), L.R. 9 Ex. 338, refd to. [para. 35].

Stag Line Ltd. v. Foscolo Mango and Co., [1932] A.C. 328 (H.L.), refd to. [para. 35].

Esso Petroleum Co. v. Mardon, [1976] Q.B. 801 (C.A.), refd to. [para. 35].

Batty et al. v. Metropolitan Property Realizations Ltd. et al., [1978] Q.B. 554 (C.A.), refd to. [para. 35].

John Maryon International Ltd. v. New Brunswick Telephone Co. Ltd. (1982), 43 N.B.R.(2d) 469; 113 A.P.R. 469; 141 D.L.R.(3d) 193, refd to. [para. 35].

Donoghue v. Stevenson, [1932] A.C. 562, refd to. [para. 36].

Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd., [1954] A.C. 465, refd to. [para. 36].

Dorset Yacht Co. Ltd. v. Home Office, [1970] A.C. 1004, refd to. [para. 36].

Anns v. Merton London Borough Council, [1978] A.C. 728, refd to. [para. 36].

Junior Books Ltd. v. Veitchi Co. Ltd., [1983] 1 A.C. 520 (H.L.), refd to. [para. 36].

Neilson v. Kamloops (1984), 54 N.R. 1 (S.C.C.), refd to. [para. 36].

Elder, Dempster & Co. Ltd. v. Paterson, Zochonis & Co. Ltd., [1924] A.C. 522, consd. [para. 37].

J. Nunes Diamonds Ltd. v. Dominion Electric Protection Co., [1972] 1 S.C.R. 769, consd. [para. 38].

Wabasso Ltd. v. National Drying Machinery Co., [1981] 1 S.C.R. 578; 38 N.R. 224, appld. [para. 39].

Simpson v. Thomson (1878), 3 App. Cas. 279 (H.L.), refd to. [para. 40].

Margarine Union G.m.b.H. v. Cambay Prince Steamship Co. Ltd., [1969] 1 Q.B. 219, refd to. [para. 40].

Schiffahrt-Und Kohlen G.m.b.H. v. Chelsea Maritime Limited (The Irene's Success), [1981] 2 Lloyd's Rep. 635, refd to. [para. 40].

Union of India v. N. V. Reederij Amsterdam (Amstelslot), [1963] 2 Lloyd's Rep. 228, refd to. [para. 41].

Raphael, The, [1982] 2 Lloyd's Rep. 42, appld. [para. 42].

Glacus, The, [1948] 8 Lloyd's Rep. 262, appld. [para. 45].

Goulandris Bros, Ltd. v. B. Goldman & Sons Ltd., [1958] 1 Q.B. 74, appld. [para. 46].

Federal Commerce and Navigation Company Ltd. et al. v. Eisenerz, [1974] S.C.R. 1225, refd to. [para. 46].

Meyer v. Dresser (1864), 33 L.J. Rep. 289, refd to. [para. 51].

Brede, The, [1973] 2 Lloyd's Rep. 333, refd to. [para. 51].

Aries Tanker Corporation v. Total Transport Ltd., [1977] 1 Lloyd's Rep. 334, refd to. [para. 51].

A/S Gunnstein & Co. K/S v. Jensen, The Alfa Nord, [1977] 2 Lloyd's Rep. 434 (C.A.), refd to. [para. 51].

R.H. & D. International Ltd. v. I.A. S. Animal Air Services Ltd., [1984] 2 All E.R. 203, refd to. [para. 51].

Gaherty v. Torrence, [1862] C.B.R. 312, refd to. [para. 51].

Halcrow v. Lemesurier, [1884] C.B.R. 239, refd to. [para. 51].

Statutes Noticed:

Carriage of Goods by Water Act, R.S.C. 1970, c. C-15, generally [para. 9].

Canada Shipping Act, R.S.C. 1970, c. S-9, sect. 647(2) [para. 31].

Hague Rules, Art. 3, rule 1(a), rule 3, rule 8 [para. 13]; Art. 4, rule Rules 2(a), rule 5 [para. 13].

Quebec Civil Code, art. 1053 [para. 33].

Interest Act, R.S.C. 1970, c. I-18, sect. 3 [para. 54].

Authors and Works Noticed:

British Shipping Laws, vol. 10, para. 7, pp. 36-37 [para. 46].

Lowndes & Rudolph, General Average and The York Antwerp Rules (10th Ed.) [para. 46].

Counsel:

Blake Knox, Marcel Savard and Marc Nadon, for the St-Lawrence Construction Ltd.;

Jean Brisset and David Colford, for Federal Commerce & Navigation Co. Ltd.

This application was heard at Montreal, Quebec, on November 5 - 8, 1984, before Urie, Mahoney and Stone, JJ., of the Federal Court of Appeal.

On January 4, 1985, Stone, J., delivered the following judgment for the Court of Appeal: