T-2140-79
Dopplemayr Lifts Ltd. and Alpine-Lift A.G. and
all those persons having an interest in the cargo
laden on board the Vessel Alster Express
(Plaintiffs)
v.
Hapag-Lloyd Aktiengesellschaft and the Owners
and Charterers of the Vessel Alster Express and
the Vessel Alster Express (Defendants)
and
Canadian National Railway Company (Third
party)
Trial Division, Dubé J.—Montreal, February 10;
Ottawa, March 11, 1982.
Maritime law — Contracts — Carriage by sea and rail —
Goods loaded in container for carriage by sea, then transferred
to railway for inland delivery — Cargo damaged in derailment
— Rail bill of lading subject to Order No. R-13820 of
Canadian Transport Commission respecting special terms and
conditions for carriage of export/import containers by railways
— Rail carrier's liability limited, under Order, to (I) value of
contents of container at place and time of loading ($32,063.66);
(2) $20,000; or (3) sum equal to liability of shipping company,
under ocean bill of lading, whichever sum is the lesser —
Pursuant to Hague Rules, carrier's liability limited during sea
voyage to $600 per container — Issue turns on third party's
liability under ocean bill of lading — Liability limited to
$600, because of incorporation, by extension, of Hague Rules
in bill of lading — Bill of lading stamped "House to House",
and from shipper in Germany to consignee in Canada —
Federal Court Rule 475.
Quebec Liquor Corporation v. The Owners and Charterers
of the Vessel "Dart Europe", Federal Court, T-1465-75,
judgment dated June 27, 1979, applied.
SPECIAL case for adjudication pursuant to Rule
475.
COUNSEL:
Marc Nadon for plaintiffs.
Peter W. Davidson for defendants.
Jacques Perron for third party.
SOLICITORS:
Martineau Walker, Montreal, for plaintiffs.
Brisset, Bishop, Davidson & Davis, Montreal,
for defendants.
Giard, Gagnon, Montreal, for third party.
The following is the English version of the
reasons for judgment rendered by
DuBÉ J.: The parties are in agreement on the
stated case and the question arising therein and
submitted the matter to the Court for adjudication
pursuant to the provisions of Rule 475 of the
Federal Court.
It appears that in October 1977 plaintiff ("Dop-
plemayr") bought from the co-plaintiff Alpine-Lift
A.G. ("Alpine") of St. Margrethen, Switzerland, a
mechanical chair-lift installation to be sent to
Kelowna, British Columbia, by sea from Hamburg
to Halifax and by rail from there to its destination.
On November 14, 1977, while en route to Vancou-
ver, the car carrying the container with the chair
lift derailed, causing considerable damage to the
container and the chair-lift.
The installation was loaded by the shipper
Alpine on board the 40-foot container, and the
latter taken to the port of Hamburg for shipment
on the vessel Alster Express. On November 9,
1977 the container was transferred from the Hali-
fax marine terminal to the third party ("CN").
CN admitted its liability for the accident and its
obligation to compensate the principal defendants,
subject to the terms and conditions of the contract
of carriage. On the other hand, the principal
defendants conceded that they should compensate
the plaintiffs, but only to the extent of the third
party's liability. All parties admitted that the dam
ages amounted to $32,063.66.
The Hapag-Lloyd ocean bill of lading, issued in
Hamburg, carries on its face the following data
relevant to the matter. The cargo is described as
follows: "1/40 foot Container—chair-lift installa
tion dismantled". The bill of lading also bears the
stamp: "House to House Traffic—Shipper's Load,
Stowage and Count". The following conditions are
also worth bearing in mind.
Under the heading "Definitions":
The word "goods" shall include containers and other pack
ages said to contain goods and the goods themselves herein
mentioned and described; the word "package" shall include
containers.
In the paragraph headed "Responsibility and
Jurisdiction", paragraph 2c) and subparagraphs
1), 5) and 7):
2....
c) If either the place of receipt or place of delivery or both as
set forth herein are inland points (through-transportation),
the responsibility of the carrier with respect to the transpor
tation of the goods shall be as follows:
1) during sea-carriage according to the provisions of any
legislation which incorporates the Hague Rules contained
in the International Convention for the Unification of
Certain Rules Relating to Bills of Lading dated Brussels
August 1924 as set forth under a) above;
5) for inland-transportation in North America the carrier
undertakes to procure as merchant's agent transportation
by inland-carriers authorized by competent authority to
engage in U.S. or Canadian inland-transportation and
such transportations shall be subject to the inland-carriers'
contracts of carriage and tariffs. The carrier guarantees
the fulfilment of such inland-carriers' obligations under
their contracts and tariffs.
7) If the goods have been lost or damaged during through-
transportation and it cannot be established in whose cus
tody the goods were when the damage or loss occured
[sic], it shall be deemed to have occured [sic] during the
carriage by sea and the carrier shall be responsible in the
case of goods shipped to a U.S. port according to the
Carriage of Goods by Sea Act of the United States,
approved April 16, 1936, and in the case of goods shipped
to a Canadian port according to the Water Carriage of
Goods Act of Canada, 1936.
The rail bill of lading between CN and Mon-
treal Shipping Co. Ltd., the agent and representa
tive of the ocean carrier, is subject to the terms
and conditions of General Order T-5 of the
Canadian Transport Commission, and of Order
No. R-13820 respecting the special terms and
conditions for the carriage of export/import con
tainers by canadian railways.
The relevant provisions of the said Order
R-13820 read as follows:
1. (A) The carrier (hereinafter called the "Carrier") of any
container owned by other than rail or highway common
carrier shall not be liable for any loss, damage or delay
to any container or contents thereof except for loss or
damage caused by, or resulting from negligence on the
part of the Carrier, providing, however, that in no event
shall the liability of the Carrier exceed the following
amounts:
(ii) In respect of 40 foot containers and their contents
(aa) in respect of the container, the depreciated
book value thereof, or the sum of $2,500,
whichever is the lesser, and
(bb) in respect of the contents of any such contain
er, (1) the value of such contents at the place
and time that such contents were loaded into
the container (including the freight charges if
paid and the duty if paid or payable and not
refunded or refundable), (2) the sum of
$20,000.00, or (3) an amount equal to the
liability of the steamship company pursuant to
the Ocean Bill of Lading, whichever sum shall
be the lesser.
The parties agreed that the liability of the ocean
carrier under the Hague Convention, as applicable
on departure from the German port of Hamburg
in October 1977, was $600 per package or unit,
and that if the loss had occurred at sea the ocean
carrier's liability would have been for that amount
for the entire container (including the installa
tion). The parties therefore agreed that the liabili
ty of CN under subparagraph 1(A)(ii)(bb) of
Order R-13820 above should be the least of:
[TRANSLATION] 1) the value of the contents of the container at
the place and time of loading, namely $32,063.66;
2) the sum of $20,000.00;
3) a sum equal to the liability of the shipping company, under
the ocean bill of lading.
As the first two amounts are known, namely
$32,063.66 and $20,000, the Court must deter
mine CN's liability under the ocean bill of lading,
and this is precisely the question raised by the
parties following their stated case; it reads:
[TRANSLATION] QUESTION
In order to enable the parties to determine the least of the
three (3) stated amounts, as the limit of the liability of the rail
carrier under 1(A)(ii)(bb) of Order R-13820, what interpreta-
tion should be given to the phrase "A sum equal to the liability
of the shipping company, under the ocean bill of lading"?
Thus, a double reference. While the ocean bill of
lading defines liability for inland carriage as being
subject to the contract of carriage and the rail
tariff, the said tariff refers back to the bill of
lading. References in perpetuity are repugnant to
the law. The solution to the problem must there
fore be sought in the bill of lading.
If the loss had taken place at sea, obviously, and
as admitted by both parties, the Hague Rules
would prevail. The Hague Rules, however, only
apply at sea from tackle to tackle and would not
normally extend their reach to inland transporta
tion, unless by extension they have been incorpo
rated in the bill of lading to cover the whole
voyage.
The instant bill of lading, on its face, is from a
shipper in Hamburg to a consignee in Vancouver,
B.C. The port of loading is Hamburg and the place
of delivery is Vancouver. The bill of lading is
stamped "House to House". It addresses itself to
the responsibility of both the sea carriage and the
inland transportation. During the sea voyage, the
Hague Rules limit the carrier's liability to $600
per container. As to the transportation overland,
the liability is subject to contracts of carriage and
tariffs. The tariffs extend to the land carrier under
provision 1(A)(ii)(bb)(3), a liability equal to the
liability of the steamship company pursuant to the
ocean bill of lading: thus, in my view, its liability
at sea of $600 per container.
Paragraph 2c)7) of the bill of lading is a further
indication that the Hague Rules are not restricted
to the sea voyage, but also apply where it cannot
be established whether the cargo was lost at sea or
on land. My conclusion, therefore, is that the
Hague Rules have by extension been incorporated
in the bill of lading and cover the whole voyage to
its ultimate destination.
In Quebec Liquor Corporation v. The Owners
and Charterers of the Vessel "Dart Europe"', I
was called upon to place a construction on that
same Order No. R-13820 and a similar clause in a
bill of lading: I concluded that the amount equal to
the liability of the steamship company pursuant to
the ocean bill of lading was the per unit limitation
of the Hague Rules which I deemed to have been
incorporated by extension to the bill of lading so as
to cover the whole voyage.
There is a presumption in law against redundan
cy. If provision 1(A)(ii)(bb)(3) means an amount
equal to the unlimited liability of a land carrier, as
the plaintiffs allege, then it is nothing but a mere
repetition of provision 1(A)(ii)(bb)(1), i.e. the full
value of the loss. In other words, the liability of the
steamship company pursuant to this ocean bill of
lading is not equal to the unlimited liability of an
overland carrier, but equal to the liability it has
assumed by virtue of that document, i.e. the lim
ited liability prescribed by the Hague Rules. After
all, the purpose of provision (3) is to limit the
liability of the land carrier, not to enlarge it.
Accordingly, in answer to the stated question,
"A sum equal to the liability of the shipping
company, under the ocean bill of lading" is the
sum of $600. Under the circumstances, in accord
ance with the written agreement between the par
ties, this sum will bear interest at the rate of 12
per cent per annum from December 1, 1977, and
the plaintiffs will pay the cost of the proceedings
both for the principal defendant and the third
party for a Class II action.
' Federal Court, T-1465-75, judgment dated June 27, 1979.
The first three words of the second last paragraph of that
judgment should read "The first amount" and not "The third
amount".
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.