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T-3465-74
Canadian General Electric Company Limited, A. E. Hickman Company Limited (Plaintiffs)
v.
Les Armateurs du St-Laurent Inc., Gordon For- warders Limited, Harvey Terminals, a Division of A. Harvey & Company Limited (Defendants)
Trial Division, Dubé J.—Toronto, May 3; Ottawa, May 10, 1976.
Maritime law—Plaintiff claiming damages from defendants in respect of goods shipped from Barrie and received at St. John's in damaged condition—Defendant shipowners alleging no contractual link with plaintiffs—Defendant cargo forward- ers claiming it was a contractual term between plaintiffs and themselves that risk during carriage would be plaintiffs'— Whether document a bill of lading—Federal Court Rule 474—Carriage of Goods by Water Act, R.S.C. 1970, c. C-15, ss. 2, 5—Hague Rules, art. V1—Bills of Lading Act, R.S.C. 1970, c. B-6, s. 4.
Goods were shipped from Barrie, Ontario and received at St. John's, Newfoundland, in a damaged state. Plaintiffs claimed damages from the shipowners, cargo forwarders and terminal operators. Defendant shipowners alleged that there was no contractual link between themselves and plaintiffs, the ship having been time chartered to the forwarders. And defendant forwarders stated that it was a term of their contract with plaintiffs that risk to goods during carriage would be that of plaintiffs. Plaintiffs applied under Rule 474 to determine whether the document in question was a bill of lading. Plain tiffs alleged that the forwarders did not take advantage of Article VI of the Hague Rules, but instead issued a negotiable instrument, the alleged bill.
Held, the document is not a bill of lading. A bill of lading, it is generally accepted, serves three purposes: it is a receipt for the goods, a representation of the contract of carriage, and a document of title. The document in question is unsigned, and, while neither the Carriage of Goods by Water Act or the Rules specifically so require, it appears from section 4 of the Bills of Lading Act that signing is at least an important evidentiary element. The negotiability aspect of the document is of the utmost importance in determining whether or not it is a bill of lading under the Carriage of Goods by Water Act and Rules, because the very purpose of the proviso in Article VI is to protect other parties, to whom the document might be endorsed, from the limited responsibility of the carrier. In view of the role and essence of a bill of lading as described in all the authoritative works quoted, it is difficult to see how the unsigned document here can be described as a negotiable bill of lading; it would be better described as an non-negotiable receipt. The document is not entitled "bill of lading", nor is
there anything to indicate that the carrier intended it to be such. In fact, the carrier denied issuing a bill of lading.
Harland & Wolff, Ltd. v. Burns & Laird Lines, Ltd. (1931) 40 LI.L.R. 286 and The "Marlborough Hill" v. Alex. Cowan and Sons, Ltd. [1921] 1 A.C. 444, applied. Montreal Trust Company v. Canadian Surety Co. (1939) 67 K.B. (Que.) 218; Gosse Millerd, Limited v. Canadian Government Merchant Marine, Limited [1929] A.C. 223; "The Ardennes" [1951] 1 K.B. 55 and Hugh Mack & Co. Ltd. v. Burns & Laird Lines, Ltd. (1943-44) 77 LI.L.R. 377, agreed with.
APPLICATION. COUNSEL:
G. R. Strathy for plaintiffs.
N. H. Frawley for defendant Gordon For-
warders Limited.
G. Vaillancourt for defendant Les Armateurs
du St-Laurent Inc.
SOLICITORS:
McTaggart, Potts, Stone & Herridge, Toronto, for plaintiffs.
McMillan, Binch, Toronto, for defendant Gordon Forwarders Limited.
Langlois, Drouin & Laflamme, Quebec City, for defendant Les Armateurs du St-Laurent Inc.
The following are the reasons for judgment rendered in English by
DUBE J.: This application on behalf of the plain tiffs is to determine the following question of law raised by the pleadings:
Is the document referred to in paragraph 2(b) of the State ment of Claim and paragraph 5 of the Statement of Defence of the Defendant, Gordon Forwarders Limited, a Bill of Lading within the meaning of the Carriage of Goods By Water Act, R.S.C. 1970, c. 15 [sic'?
The relevant paragraphs of the pleadings read as follows:
2. (b) The Defendant, Gordon Forwarders Limited is a corpo ration incorporated pursuant to the laws of Ontario and is carrying on business in Hamilton, Ontario and at all material times herein it was engaged as cargo forwarders and otherwise engaged in the movement of goods and were the issuers of an unnumbered Bill of Lading respecting the carriage of goods aboard the ship dated September 28, 1973. Additionally, this Defendant made all of the arrangements for the transportation of the goods from the premises of the Plaintiff, Canadian General Electric Company Limited at Barrie, Ontario to St.
John's, Newfoundland and in that connection arranged for road transportation to Montreal and water transportation from Montreal to St. John's.
5. As to paragraph 6 of the Statement of Claim the Defendant herein denies that it had any responsibility under The Carriage of Goods By Water Act, R.S.C. 1970 Chap. C-15 and further denies it was in negligent breach of any duty of care. The Defendant herein denies that it ever issued a bill of lading in connection with the carriage of thelgoods herein nor was the issuance of one ever intended.
The application is made under Rule 474 of the Federal Court:
Rule 474. (1) The Court may, upon application, if it deems it expedient so to do,
(a) determine any question of law that may be relevant to the decision of a matter, or
(b) determine any question as to the admissibility of any evidence (including any document or other exhibit),
and any such determination shall be final and conclusive for the purposes of the action subject to being varied upon appeal.
(2) Upon application, the Court may give directions as to the case upon which a question to be decided under paragraph (1) shall be argued.
Counsel for defendant Les Armateurs du St-Laurent Inc. filed representations in writing without appearance under Rule 325 submitting that the answer to the question of law should be in the negative.
Counsel for defendant Gordon Forwarders Lim ited appeared and objected to the determination as being premature, and alleged in the alternative that if the question of law were to be determined before the trial itself, it should be determined in the negative. Learned counsel claimed it was undesirable to determine the question of law now as some of the facts material to the determination were in dispute.
I felt however there were sufficient material facts alleged in the affidavit, in the document itself annexed to the affidavit, and admitted in the pleadings to support a determination of the narrow issue referred to the Court. Being of the view that it would be expedient to make such a determina tion, I ruled accordingly.
The document in question, annexed to the affidavit in support of the motion, bears reproduc ing in its entirety:
GORDON FORWARDERS LIMITED 260 GAGE AVENUE SOUTH HAMILTON, ONTARIO
Phone 4I6-547-4505 Telex No. 012-742
SEPTEMBER 23, 1973
SHIPPED, in apparent good order and condition, by Canadian General Electric Co. Ltd., Barrie, Ontario on board the good steamship or motor vessel, called the M.V. Maurice Desgagnes, Trip No. 9-East now lying in the Port of Montreal, Quebec and bound for St. John's Newfoundland.
For: Canadian General Electric Co. Ltd. and A. E.
Hickman Co. Ltd., St. John's, Newfoundland
distribution load.
Being marked and numbered as herein, and to be delivered in
like good order and condition at the aforesaid Port of St.
John's, Nfld.
2181 pcs. misc electrical appliances,
20,854 lbs
Freight prepaid
QUANTITY, DESCRIPTION AND STOWAGE FREIGHT PREPAID
SHIP LOST OR NOT LOST
INSURANCE ALL RISKS FOR ACCOUNT OF OWNERS OF
MERCHANDISE.
TO: BE DISCHARGED AT A. HARVEY & CO. LTD. PIER
RATED TO DOCK ST. JOHN'S ONLY.
DISTRIBUTION CHARGES TO FOLLOW
1210 pcs. for A. E. Hickman St. John's
121 pcs. for A. E. Hickan Fortune, Nfld.
109 pcs. for A. E. Hicman, Grand Falls, Nfld.
741 pcs. for C.G.E., St. John's, Nfld.
Received ex Smith Transport Ltd.
Pro 3128593
Shippers No. 48470-77, 155
48479-80, 48486-511
Declared valuation $104,270.00
THIS COPY TO BE PRESENTED AT PIER PRIOR TO RELEASE OF GOODS.
In their statement of claim plaintiffs claim that pieces of electrical appliances were shipped in good order and condition from Barrie, Ontario, and were received at St. John's, Newfoundland, in a damaged condition. They claim damages from the shipowners, defendant Les Armateurs du St-Lau- rent, the cargo forwarders, defendant Gordon For- warders Limited, and also the terminal operators, defendant Harvey Terminals. Defendant shipown- ers allege there was no contractual link between themselves and the plaintiffs, the ship Maurice Desgagnes being at all material times time-char tered to the cargo forwarders. The latter state that it was a term of the contract between plaintiffs and themselves that the risk in the goods during their carriage would be that of the plaintiffs. Thus
the importance of determining whether or not the document in question was a bill of lading. If the question is answered in the affirmative, plaintiffs will claim that defendants may not contract out of their liability, under Article VI of the Hague Rules annexed to the Carriage of Goods by Water Act' which reads:
Article VI
Special Conditions
Notwithstanding the provisions of the preceding Articles, a carrier, master or agent of the carrier, and a shipper shall in regard to any particular goods be at liberty to enter into any agreement in any terms as to the responsibility and liability of the carrier for such goods, and as to the rights and immunities of the carrier in respect of such goods, or his obligation as to seaworthiness, so far as this stipulation is not contrary to public policy, or the care or diligence of his servants or agents in regard to the loading, handling, stowage, carriage, custody, care, and discharge of the goods carried by water, provided that in this case no bill of lading has been or shall be issued and that the terms agreed shall be embodied in a receipt which shall be a non-negotiable document and shall be marked as such.
Any agreement so entered into shall have full legal effect.
Provided that this Article shall not apply to ordinary com mercial shipments made in the ordinary course of trade, but only to other shipments where the character or condition of the property to be carried or the circumstances, terms and condi tions under which the carriage is to be performed, are such as reasonably to justify a special agreement. [The underlining is mine.] 2
Section 2 of the Carriage of Goods by Water Act stipulates that the Hague Rules relating to bills of lading have effect in relation to the car riage of goods by water from any port in Canada. The document in question refers to goods on board the vessel Maurice Desgagnes lying in the Port of Montreal and bound for St. John's, Newfound- land.
Article I of the Rules defines the following expressions:
Article I Definitions
In these Rules the following expressions have the meanings hereby assigned to them respectively, that is to say,
(a) "carrier" includes the owner or the charterer who enters into a contract of carriage with a shipper;
' R.S.C. 1970, c. C-15.
2 The underlining is mine throughout.
(b) "contract of carriage" applies only to contracts of car riage covered by a bill of lading or any similar document of title, •in so far as such document relates to the carriage of goods by water, including any bill of lading or any similar document as aforesaid issued under or pursuant to a charter- party from the moment at which such bill of lading or similar document of title regulates the relations between a carrier and a holder of the same;
(c) "goods" includes goods, wares, merchandise, and articles of every kind whatsoever, except live animals and cargo which by the contract of carriage is stated as being carried on deck and is so carried;
(d) "ship" means any vessel used for the carriage of goods by water;
(e) "carriage of goods" covers the period from the time when the goods are loaded on to the time when they are discharged from the ship.
The purpose of the Carriage of Goods by Water Act and the annexed Rules was to replace the conventional contract by which the carrier attempted to relieve himself of liability, by a legis lative umbrella under which the carrier could limit his responsibility by way of the Article VI excep tion, provided that no bill of lading was issued. (See Gosse Millerd, Limited v. Canadian Govern ment Merchant Marine, Limited [1929] A.C. 223 at page 236.) The proviso against the issuance of a negotiable bill of lading is to protect innocent third parties against the limited liabilities of the carrier.
Plaintiffs rightly allege that defendant Gordon Forwarders Limited could have availed itself of Article VI as allowed by section 5 of the Act:
5. Article VI of the Rules, in relation to the carriage of goods by water in ships carrying goods from any port or place in Canada to any other port or place in Canada, has effect as though that Article referred to goods of any class instead of to particular goods and as though the proviso to the second paragraph of the said Article were omitted.
It is plaintiffs' contention that said defendant did not take advantage of Article VI, but issued instead a negotiable instrument, the alleged bill of lading.
Neither the Act nor the Rules provide a defini tion of "bill of lading". It is generally accepted that a bill of lading serves three purposes: it is a receipt for the goods, it represents the contract of carriage and it is a document of title (See Poor on
Charterparties and Ocean Bills of Lading, page 134). The Bills of Lading Act 3 does not define bill of lading but section 4 describes what it represents:
4. Every bill of lading in the hands of a consignee or endorsee for valuable consideration, representing goods to have been shipped on board a vessel or train, is conclusive evidence of such shipment as against the master or other person signing the bill of lading, notwithstanding that such goods or some part thereof may not have been so shipped, unless such holder of the bill of lading has actual notice, at the time of receiving it, that the goods had not in fact been laden on board, or unless such bill of lading has a stipulation to the contrary; but the master or other person so signing may exonerate himself in respect of such misrepresentation by showing that it was caused without any default on his part, and wholly by the fault of the shipper or of the holder, or of some person under whom the holder claims.
The document before me is not signed.
Neither the Carriage of Goods by Water Act nor the Rules specifically require that a bill of lading be signed, but it appears from the above section that signing is at least an important eviden- tiary element. A review of textbook authorities on the essential elements of a bill of lading sheds some light on the matter.
In volume 13 of British Shipping Laws, Singh and Colinvaux, the essential facts in a bill of lading are detailed as follows at page 297 et seq.: a) the name of the shipper, b) the name of the consignee, c) the port of loading, d) the name of the ship, e) the port of discharge, f) the description of the goods, g) the date, h) the number of signed negotiable copies. The complete paragraph h) reads:
(h) The number of signed negotiable copies. The bill of lading must state how many negotiable copies have been signed. Two or three such copies are most usual, but sometimes there are more or even only one, according to the requirements of the shipper rather than of the shipping company.
Bill of lading is defined in volume 5 of British Shipping Laws, Sassoon, (2nd ed.) at paragraph 72:
A bill of lading is a document which is signed by the shipowner or his agent acknowledging that goods have been shipped on board a particular vessel which is bound for a particular destination and stating the terms on which the goods so received are to be carried.
3 R.S.C. 1970, c. B-6.
Lord Goddard is quoted further down the page from his decision in "The Ardennes" 4 case:
It is, I think, well settled that a bill of lading is not in itself the contract between the shipowner and the shipper of goods, though it has been said to be excellent evidence of its terms: Sewell v. Burdick, per Lord Bramwell and Crooks v. Allan. The contract has come into existence before the bill of lading is signed; the latter is signed by one party only, and handed by him to the shipper usually after the goods have been put on board. No doubt if the shipper finds that the bill contains terms with which he is not content, or does not contain some term for which he has stipulated, he might, if there were time, demand his goods back; but he is not, in my opinion, for that reason, prevented from giving evidence that there was in fact a contract entered into before the bill of lading was signed different from that which is found in the bill of lading or containing some additional term. He is no party to the preparation of the bill of lading; nor does he sign it.
Thompson, G. H. M., in Bills of Lading, Ste- vens and Sons Ltd., London, 1925, defines the document at page 14:
A bill of lading is a document signed by the shipowner or the master of the ship or other agent of the shipowner.
at page 15, he adds:
Upon its being signed the bill of lading is handed to the shipper, who may either retain it or transfer it to another person.
Purchase, H. G., in Documents of Title to Goods, Sweet & Maxwell Limited, 1931, provides his definition at page 22:
The bill of lading is a document of title to goods in its most complete form. When the merchant has entered into a contract for shipment with the shipowner and the goods have been accepted by the ship, a bill of lading is signed by the shipowner or his agent, usually the master of the ship, and handed over to the shipper.
at page 25:
According to Lord Blackburn in his book on Sale, it is "A writing signed on behalf of the owners of the ship in which the goods are embarked, acknowledging the receipt of the goods and undertaking to deliver them at the end of the voyage, subject to such conditions as may be mentioned in the bill of lading." Another definition is "an acknowledgment under the hand of the captain that he has received such goods (loaded on board his ship) which he undertakes to deliver to the person named in that bill of lading".
at page 28:
4 [1951] 1 K.B. 55 at pages 59-60.
The shipper uses the printed form of bill of lading, which he procures from the shipowner's printers, and he fills in the shipping details which are checked by the shipowner or his agent or broker and the bill of lading is then signed.
Scrutton on Charterparties and Bills of Lading, 18th ed., Sweet & Maxwell, London, 1974 at page 52 under the head "Issue of the Bill of Lading", writes:
AFTER the shipment of goods under a contract of affreight- ment, the bill of lading is signed by the carrier or his agent and delivered to the shipper, in exchange for the mate's receipt, where one exists.
Where the Carriage of Goods by Sea Act 1924 applies, the shipper may demand a bill of lading immediately the goods are received into the charge of the carrier.
Where it is the shipper's duty to present bills of lading, he must do so within a reasonable time after the cargo is loaded, although the ship is lost before he presents them. And when the cargo is loaded he must present the bill of lading in a reason able time, even though the lay-days have not expired. The master, in his turn, is bound to sign bills of lading in respect of each parcel shipped within a reasonable time of presentation and is not entitled to delay signing until all the cargo has been shipped.
The three functions of a bill of lading are outlined by Bes, J., in Chartering and Shipping Terms, vol. 1, 9th ed., Barker & Howard Ltd., London, 1975 at page 110:
A Bill of Lading has the following functions:
1. It is a receipt for goods, signed by the master or other duly authorized person on behalf of the carriers.
2. It is a document of title to the goods described therein.
3. It serves as evidence of the terms and conditions of carriage agreed upon between the two parties.
Halsbury's Laws of England' describes bill of lading in paragraph 470, and deals with the "Sig- nature of the Bill of Lading" in a special section under that heading from which paragraphs 485 and 486 are worthy of note:
470. Description. A bill of lading is a document signed by the shipowner, or by the master, or other agent of the shipown- er, which states that certain specified goods have been shipped in a particular ship, and which purports to set out the terms on which the goods have been delivered to and received by the ship. After signature it is handed to the shipper, who may either retain it or transfer it to a third person. This person may be named in the bill of lading as the person to whom delivery of the goods is to be made on arrival at their destination, in which case he is known as the consignee; if he is not named in the bill of lading, he is usually known as the holder or endorsee of the bill of lading. A bill of lading issued by the shipowner's agent in the absence of any contract of carriage is a nullity. The effect
5 3rd ed., vol. 35.
of a bill of lading depends upon the circumstances of the particular case, of which the most important are the position of the shipper and of the holder. There is no stamp duty on a bill of lading.
485. By whom signed. The bill of lading is usually signed, not by the shipowner personally, but by the master or other agent acting on the shipowner's behalf. If the shipowner signs it himself, no difficulty arises. Where, however, the signature is that of an agent, the shipowner's liability depends upon the extent of the agent's authority, and the general principles of agency apply.
486. Effect of master's signature. The shipowner is bound by his master's signature to a bill of lading, provided that the master, in signing the bill of lading, did not exceed the author ity which the shipper knew or ought to have known that the master possessed. Where the bill of lading in question is one which the master was expressly authorised to sign, the shipown- er's liability is clear. His liability does not, however, depend upon the existence of an express authority; he is equally liable where the master is acting within the scope of his apparent authority as such.
It was held in Hugh Mack & Co., Ltd. v. Burns & Laird Lines, Ltd. 6 that the operation of the Rules was confined to the carriage of goods under a bill of lading or similar document of title and did not apply to the coasting trade in so far as such trade was carried on with non-negotiable receipts instead of bills of lading. It also held that Article VI afforded the shipowners complete protection -in that the "special conditions" were embodied in a receipt marked "non-negotiable". The negotiabili- ty aspect of the document is of the utmost impor tance in determining whether or not it is a bill of lading under the Carriage of Goods by Water Act and the Rules, because the very purpose of the proviso in Article VI is to protect other parties, to whom the document might be endorsed, from the limited responsibility of the carrier. In view of the role and essence of a bill of lading as defined in all the authoritative textbooks quoted above, it is difficult to see how the unsigned document before me can be described as a negotiable bill of lading as envisaged by the Act and the Rules annexed thereto. Perhaps the document would better be described as a non-negotiable receipt.
Lord Chief Justice Andrews in his judgment in the Hugh Mack case (supra), referring to the document before him (which was duly signed),
6 (1943-44) 77 L1.L.R. 377.
held that even if it could properly be described as a "document of title", it was not "similar to" a bill of lading. After describing the characteristics it lacked, he concluded (at page 383):
... above all, it is not a negotiable instrument, the indorsement and delivery of which may affect the property in the goods shipped.
Attempting to define the words "other docu ment of title", he continued:
I shall not purport to give an exhaustive definition; but the term doubtless includes what is known as a "received for shipment" bill of lading—a document issued before shipment as distin guished from a bill of lading properly so called which is not signed or delivered until after shipment has taken place. Suffice it, however, for me to say that in my opinion the phrase does not include a mere receipt such as was given by the shipowner to the shipper in this case.
The document before the Court is not titled "bill of lading" and there is nothing to indicate that the carrier intended it to be a bill of lading. In fact, the defendant carrier in his defence alleges it did not issue a bill of lading. The document has to be considered as a mere receipt given by the forward er to the shipper, and not a negotiable bill of lading issued by the shipowner and signed by the master or other agent in authority.
Lord Blackburn in Harland & Wolff Ltd. v. Burns & Laird Lines, Ltd.' looked not only at the signature of an alleged bill of lading but also at the time of the signature. He said at page 289:
The argument for the pursuers in so far as it depended upon the document dated Dec. 23, 1929, being treated as a bill of lading appears to me to be quite untenable. The document was apparently not signed till 10 days after the date it bears, but even at that date the ship and its cargo were at the bottom of the sea. It is quite apparent that the sole purpose for which it was signed was to verify the amount and value of the cargo which had been lost, and that it was in no sense intended to satisfy the purpose of a bill of lading. That appears to me to end the case ... .
The House of Lords examined a document in all its details and pronounced it to be a bill of lading in The `Marlborough Hill" v. Alex. Cowan and Sons, Ltd.' The judgment was delivered by Lord Phillimore who said at page 453:
' (1931) 40 LI.L.R. 286. 8 [1921] 1 A.C. 444.
No doubt it appears from the margin that it is the form in use by the Commonwealth and Dominion Line, Ld., Cunard Line, Australasian service, trading from New York to Australia and New Zealand, with Funch, Edye & Co. Incorporated, as the American agents; and it may be said that it is not signed by the master, but by that firm as agents for the master. It is, however, well known that in general ships the master does not usually sign. The bills of lading are signed in the agents' office by the agents. It should perhaps be added that it is evidently contemplated by the document that the shipper will assign his rights and that the assignee or holder of the bill of lading will present the document at the port of delivery, and that his receipt and not that of the shipper will be the discharge to the shipowner.
In Montreal Trust Company v. Canadian Surety Co. 9 a question arose as to the applicability of the Water Carriage of Goods Act (1927) and a document was produced purporting to be a bill of lading. Dealing with the document, Bond J. point ed out that while there were cases in which a bill of lading was signed after the ship had sailed, it appeared in this case that the document might not even have been signed. He said at page 220:
A good deal can be said, and has been said, for the conten tion that the document in question is not a bill of lading, strictly so-called. To begin with it is apparently not signed—at least as appears from the copy fyled [sic] by the appellants, and the original is not produced. Again, while headed "bill of lading", it has the appearance rather of a "shipping order"—as it appears on respondent's exhibit D-4—or, as it is often referred to by writers on the subject, a "received for shipment bill of lading". It is doubtful if the latter is strictly a bill of lading at all. (Temperley, Carriage of Goods by Sea Act, 1924, 3rd ed. 1927, p. 7.)
I am of the view therefore that the unsigned document referred to in this application is not a bill of lading within the meaning of the Carriage of Goods by Water Act.
Costs in the cause.
9 (1939) 67 K.B. (Que.) 218.
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