Tahsis Company Limited v. Vancouver Tug Boat Company Limited

Tahsis Company Limited v. Vancouver Tug Boat Company Limited
Collection
Supreme Court Judgments
Date
1968-10-01
Report
[1969] SCR 12
Judges
Abbott, Douglas Charles; Martland, Ronald; Ritchie, Roland Almon; Spence, Wishart Flett; Pigeon, Louis-Philippe
On appeal from
British Columbia
Subjects
Transportation
Decision Content
Supreme Court of Canada
Tahsis Company Limited v. Vancouver Tug Boat Company Limited, [1969] S.C.R. 12
Date: 1968-10-01
Tahsis Company Ltd. (Plaintiff) Appellant;
and
Vancouver Tug Boat Co. Ltd. (Defendant) Respondent.
1967: October 19, 20, 23, 24; 1968: October 1.
Present: Abbott, Martland, Ritchie, Spence and Pigeon JJ.
ON APPEAL FROM THE COURT OF APPEAL FOR BRITISH COLUMBIA
Shipping—Contract for carriage of goods—Obligations of carrier and shipper—Seaworthiness—Loading instructions—Capsize of barge during loading—Expert advice subsequent to accident—Responsibility for loss.
Under a contract entered into by the plaintiff and the defendant, the latter undertook to provide tugs and scows for transporting pulp chips from the plaintiff’s plant to their destination. The agreement provided, inter alia, that: “(a) Tugs and scows shall be approved by a representative of Marine Surveyors of Western Canada or other competent surveyor; (b) Carrier shall in all cases exercise due diligence to make and keep all vessels used seaworthy; (c) Shipper shall be responsible for all scows from the time they are made fast to moorings until carrier has placed a line aboard with intention of removing the same from the dock; (d) Scows shall be loaded and trimmed in accordance with loading instructions provided by carrier to shipper from time to time; (e) All shipments of pulp chips shall be carried subject to all the terms and conditions of carrier’s bill of lading.” The first condition on the reverse side of the form of bill of lading annexed to the contract was that “it shall have effect subject to the Water Carriage of Goods Act”.
In the performance of this contract the defendant at first used barges of approximately 700 units carrying capacity, but the intention was that it would later use much larger barges. Due to their greater width, the plaintiff’s loading equipment did not project far enough to make it possible to centre the load within the box of the larger barges, as could be done with the smaller ones. It was agreed between the parties that the necessary alterations would not be made until some experience had been gained in the loading of the big barges. In the meantime, the load was to be put on eccentrically, the barge being turned around by a tug from time to time as the loading progressed. One of the defendant’s scows capsized while it was moored to the plaintiff’s dock and in the last stages of being loaded with chips through the plaintiff’s equipment. Loading instructions with respect to permissible list had been given verbally by the defendant’s superintendent to the plaintiff’s mill foreman, who was also superintending the loading of the barges.
Judgment at trial was given in favour of the plaintiff. On appeal, the Court of Appeal unanimously allowed the appeal and dismissed the plaintiff’s action and allowed the defendant’s counterclaim. An appeal from the judgment of the Court of Appeal was then brought to this Court.
Held (Abbott and Ritchie JJ. dissenting): The appeal should be allowed and the judgment of the trial judge restored.
Per Martland and Pigeon JJ.: It was clear that the provision for responsibility for the scows during loading could not have the effect of suppressing during that period the obligation of the carrier to use due diligence to make the ship seaworthy and, accordingly, it was unnecessary to decide whether the Water Carriage of Goods Act, R.S.C. 1952, c. 291, applied. Seaworthiness requires more than structural soundness; it also requires proper instructions. Even if this was not a legal requirement, the contract between the parties would make it such under (d) above.
As to whether the defendant did in fact provide proper loading instructions or at least used due diligence to that end, it was obvious that it did not use due diligence. The defendant had failed to obtain the advice of a naval architect or of a person of equivalent qualifications, in respect of a vessel, a substantial part of which had not been designed by such a person. The loading instructions verbally given by the defendant’s superintendent to the plaintiff’s foreman prior to the accident were not proper and adequate. There was no reason to believe that if competent expert advice had been sought, as it should have been before the barges were put in service, such advice would have been any different from that which was subsequently given as suitable under the conditions of eccentric loading in which the defendant had acquiesced.
On the question of whether the capsize was in fact due to the insufficient and defective loading instructions or to the negligence of the plaintiff’s foreman, the conclusion was reached, following an examination of the evidence, that the Court of Appeal was wrong in finding that the capsize was due to the plaintiff’s negligence. On the contrary, the accident was due to the insufficient and imprudent loading instructions given by the defendant’s representatives.
Per Spence J.: The obligations of the plaintiff and the defendant were fixed by the terms of the contract entered into by the parties and under the circumstances the bill of lading was merely a receipt. Under the contract the defendant had not merely a right but a duty to issue proper instructions as to loading and it was the breach of that duty which created the occasion for the capsize of the scow. Per Abbott and Ritchie JJ., dissenting: It was the agreement and not the Water Carriage of Goods Act which controlled the relationship between the parties. Under the agreement the responsibility for the scow while moored at the plaintiff’s dock during loading rested with the plaintiff subject to the fact that it was required to comply with any instructions provided by the carrier as to loading and trimming. The carrier had the right but not the duty to give such instructions subject to the fact that any instructions which it did give must be such as to not endanger the safety of the scow or cargo, and even if the agreement be construed as imposing a duty upon the carrier to give loading instructions, there was no breach of such a duty in the present case.
Under all the circumstances of the case, before the defendant could be fixed with the responsibility for the loss it was incumbent on the plaintiff to show not only that the instructions given by the defendant’s superintendent were wrong, but that this error was the cause of the mishap. The evidence indicated that there was nothing wrong with the instructions given as to permissible list.
The underlying causes of the collapse of the vessel were that the plaintiff company was employing loading equipment which was not thoroughly adapted to the loading of these large scows and that its superintendent was not exercising the care required to supervise the undertaking. The immediate cause of the capsizing was the negligence of the foreman who was responsible for the loading of this particular scow.
[Standard Oil Co. of New York v. Clan Line Steamers Ltd., [1924] A.C. 100; Canadian Transport Co. Ltd. v. Court Line Ltd., [1940] A.C. 934; Kruger & Co. Ltd. v. Moel Tryvan Ship Co. Ltd., [1907] A.C. 272, considered.
APPEAL from a judgment of the Court of Appeal for British Columbia[1], reversing a judgment of Collins J. Appeal allowed, Abbott and Ritchie JJ. dissenting.
W.J. Wallace, Q.C., and D.B. Smith, for the plaintiff, appellant.
D. McK. Brown, and B. Trevino, for the defendant, respondent.
The judgment of Abbott and Ritchie JJ. was delivered by
RITCHIE J. (dissenting):—I have had the benefit of reading the reasons for judgment of my brother Pigeon in which he has made an extensive analysis of a great deal of the evidence, but as I take a somewhat different approach to the problem involved and as I place a different interpretation on some of the facts, it is perhaps as well for me to state independently the issues as I see them. I will endeavour to refrain from repetition in so far as is consistent with making my opinion clear.
This appeal arises out of the capsizing of one of the respondent’s scows while it was moored to the dock at the appellant’s plant and in the last stages of being loaded with wood chips through the appellant’s equipment.
In my view the respective obligations of the appellant and the respondent concerning the supplying of scows and the loading thereof with pulp chips at the appellant’s plant, are fixed by the terms of the contract (hereinafter referred to as the agreement) entered into between the parties on April 26, 1962, wherein it is recited that the carrier, i.e., Vancouver Tug Boat Company Limited, has agreed with the shipper, i.e., Tahsis Company Limited, to supply suitable tugs and scows to transport pulp chips from the shipper’s plant to their destination. This is a contract to carry the appellant’s goods in the respondent’s scows between the Tahsis Company’s plant and the St. Regis Paper Mill and in my view it has the character of a charter party covering a succession of voyages by these scows from the point of loading to the destination specified.
By clause 10 of the charter agreement it is provided that all shipments
…shall be carried subject to all the terms and conditions of Carrier’s Bill of Lading… which together with the provisions of this contract shall constitute the terms and conditions under which the said pulp chips are carried. In the event of any conflict between the said Bill of Lading and this Agreement, the terms of this Agreement shall govern.
Carrier shall supply Shipper with Bill of Lading forms which shall be completed by Shipper and signed by each party hereto prior to the sailing of each scow…
I mention this clause because the learned trial judge took the view that the provisions of the “Rules Relating to Bills of Lading” which are a schedule to the Water Carriage of Goods Act, R.S.C. 1952, c. 291, governed the loading and carriage of the chips shipped under the agreement and as I disagree with this conclusion and consider the matter may be of some importance in determining the rights of the parties, it appears to me to be desirable to state at the outset the reasons for my disagreement. In this regard it is to be observed that the rules in question, with the exception of art. 6, only apply to “contracts of carriage” as defined in art. 1(b) of the schedule, and are therefore limited to:
…contracts of carriage 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 sea, including any bill of lading or any similar document as aforesaid issued under or pursuant to a charterparty 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.
In the present case it was the shipper, i.e., Tahsis, who chartered the vessel directly from the owner as opposed to the common situation in which an owner has chartered his vessel and the charterer in turn contracts with the shipper. There is a long line of cases to the effect that where, as here, the shipper has chartered the vessel directly from the owner, the bill of lading in so far as it may differ from the terms of the charterparty, is to be treated as a mere receipt for the goods.
The effect of these cases is well summarized in the reasons for judgment of Lord Halsbury in Kruger & Co. Ltd. v. Moel Tryvan Ship Co. Ltd.[2] where he said:
The bill of lading cannot control what has been agreed upon before between the shipowner and the merchant and what has been expressed in a written instrument which is the final and concluded agreement between the parties. It is in truth a bill of lading; it is somewhat inaccurately described as a contract in the Bills of Lading Act, but Bramwell L.J. said in Wagstaff v. Anderson, (1880), 5 C.P.D. 171, 177, that “to say it is a contract superseding, adding to or varying the former contract under the charterparty is a proposition of law to which I never can consent.”
In Scrutton on Charterparties and Bills of Lading, 17th ed. at p. 397, the matter is dealt with in relation to the language used in the schedule to the Water Carriage of Goods Act. The learned author there says:
For as between the charterer and the shipowner the operative document is the charterparty, the bill of lading being generally a mere receipt… and there is between them no “contract of carriage” within the meaning of Article 1(b) and, therefore, the shipowner is not within the meaning of Article 1(a) a “carrier” (i.e., a person who “enters into a contract of carriage”)…
I am accordingly of the opinion that it is the agreement and not the Water Carriage of Goods Act which controls the relationship between the parties. I have dealt with this matter at such length because counsel for the appellant invited us to adopt the conclusion of the learned trial judge that the respondent had failed to exercise due diligence “before and at the beginning of the voyage to make the ship seaworthy” as is required by art. 3(1) of the schedule to the Water Carriage of Goods Act. The word “seaworthy” is not defined in that Act or in the schedule thereto and it has been variously interpreted by the Courts having regard to the facts of the various cases before them, but the meaning of the word “seaworthy” as used in the agreement is fixed by the provisions of clause 1(b) thereof and the combined effect of that clause and clause 3(c) makes it clear that the obligation of Vancouver Tug in this regard was limited to exercising due diligence to make and keep the scow “in a normal condition, safe to tow in the trade for which” it was “being used and that the amount of water contained within the hull” did not “exceed the equivalent of 4 inches depth over the entire bottom of any single main compartment of” the scow.
The agreement itself describes in some detail the carrier’s obligation to supply scows and to arrange towing operations so as to provide efficient transportation and the shipper’s obligation to load the chips on the scows. The following provisions appear to me to be most relevant to the present inquiry:
Clause 3(a)
Carrier shall provide sufficient tugs and scows all of which shall be approved by a representative of Marine Surveyors of Western Canada, or other competent surveyor, for the purposes of transporting not less than 60,000 units, nor more than 80,000 units, of pulp chips per annum. Scows provided hereunder shall have a minimum aggregate carrying capacity of 3,000 units and a maximum aggregate carrying capacity of 4,500 units and shall be properly boxed and fitted for the transportation.
Clause 3(c)
Carrier shall in all cases exercise due diligence to make and keep all vessels used hereunder in good order and condition and in all respects seaworthy.
Clause 5(b)
Carriers shall deliver the scows to Shipper at loading places in good order and condition and in all respects ready to load.
Clause 5(e)
Shipper shall be responsible for all such scows from the time they are made fast to moorings as directed by Shipper until Carrier has placed a line aboard such scows with the intention of removing the same from the plant, whether loaded or empty. 7. Loading.
(a) All pulp chips shall be loaded and trimmed by Shipper solely at the expense of Shipper, PROVIDED ALWAYS that Carrier shall bear any costs occasioned as a result of faulty equipment supplied by Carrier.
(b) Scows shall be loaded and trimmed in accordance with loading instructions provided by Carrier to Shipper from time to time.
(c) Loading shall be deemed to be completed when any loaded scow has been examined and accepted by the master of the tug.
(d) Shipper shall load each scow to capacity with all reasonable despatch.
11. Risk and Liability.
(a) Shipper shall be liable for and shall pay for all damage caused to vessels provided by Carrier hereunder which shall be caused by the negligence of Shipper, its servants or agents, and shall indemnify and save Carrier harmless from all loss and damage whatsoever caused by the negligence of St. Regis Paper Company, its servants or agents.
(b) Shipper shall procure and maintain at its expense, insurance on all pulp chips carried hereunder to the full insurable value thereof against all sea, fire and marine risks which may arise during the loading, transportation and discharge thereof.
It appears to me that the division of responsibility between the parties under this agreement was that the shipper would be responsible for the scows from the time they were made fast to the moorings at its dock until the tug master put a line aboard to tow them away, while the carrier undertook to provide scows approved by a representative of Marine Surveyors of Western Canada and accepted the responsibility for safe carriage of the cargo to the specified destination. In so doing, the carrier reserved the right to have the scows loaded and trimmed in accordance with its instructions from time to time. Loading was “deemed to be completed when any loaded scow” had “been examined and accepted by the master of the tug”.
In my opinion, by virtue of the provisions of clause 7(d) the shipper accepted the responsibility of loading “each scow to capacity with all reasonable despatch” and further agreed under clause 7(a) to load and trim all pulp chips solely at its expense. As the carrier was responsible for the scow and its cargo during the voyage, it appears to me to be only reasonable that the agreement should contain a provision that the scows would be loaded and trimmed in accordance with such instructions as the carrier might, from time to time, provide and that the loading would not be deemed to be completed until the tug master had examined and accepted the loaded scow. Clause 7(b) undoubt- edly placed the shipper under the obligation to load and trim in accordance with any instructions provided by the carrier, but I do not read it as creating any concomitant obligation on the carrier to provide such instructions. The loading was left to the shipper but the carriage at sea was left to the carrier. As will hereafter appear, instructions were in fact given by the carrier to the shipper as to the maximum permissible list to be allowed in loading the type of scow with which we are here concerned, and whether these instructions were wrong, and whether or not they were carried out by the shipper, are two of the questions involved in this appeal.
During the early months of the life of the agreement, the respondent was supplying barges of its 100 series with a carrying capacity of approximately 700 units which could be readily loaded with chips from the then existing chip conveyor and chip delivery spout at the appellant’s plant, but it decided to acquire a much larger type of barge which was later known as its 150 series and which had a capacity of 1,680 units of chips. This decision was conveyed to the appellant with a view to determining what effect the change would have on the method of loading with its existing loading facilities.
The discussions between the parties at this stage of the proceedings are well described in the evidence of Mr. W.G. Beale, who was the superintendent and former manager of planning and engineering for the Tahsis company, and who said:
We had previously received drawings of the proposed barges, the V.T. 150 and 151 in order to determine whether it was—whether these barges would present any difficulty in so far as loading with our facilities was concerned. As a result of having received these and made a preliminary investigation, we had determined that it was quite possible and practical to load these barges and this was discussed at this meeting. I conveyed to Mr. Plester and to Mr. Lindsay that we would load the barges with the present facilities in the initial stages, but that once we had seen physically what the barges looked like, what the problems were, we would then extend the conveyor then we could load the barges more economically.
Q. What do you mean by more economically?
A. I explained to Mr. Plester that we proposed to turn the barges during the process of loading. This was a fairly—this was something which we had done—that I had done during my stay in B.C. Forest Products in Victoria, and it was a fairly common type of procedure. He was later again asked:
Q. Now, you mentioned that—I think I asked this question about—you mentioned something about being economical, that you would make changes to make it economical. What did you mean by that?
A. Oh, we proposed to accept the cost during the initial stages of turning the barges during the loading, and this of course, was a direct cost. We proposed to use the local tug owned by Texada Towing at their going rates to turn the scow.
It is, I think, fair to conclude from this evidence that the problem in loading the V.T. 150 and 151 scows as opposed to the 100 series was created because Tahsis had not got the proper facilities for loading such large scows directly, that this problem was discussed before the scows were ever constructed, that it was the Tahsis managing engineer who suggested loading by turning the barges so as to cover first one side and then the other with chips, and that he had, on behalf of Tahsis, made a preliminary investigation as a result of which he determined that it was practical to so load the scows. Mr. Beale had had experience in loading in this fashion and it is clear that the whole operation was to be conducted independently of Vancouver Tug by the use of the “local tug” for turning. This procedure appears to have been adopted on a temporary basis until Tahsis had found out “what the problems were” after which it was contemplated that the conveyor would be extended.
It was not until October 13 that the first of the new barges arrived at the Tahsis plant. Captain Plester, who was port superintendent for the tug company had intended to be present during most of the loading but unfortunately his arrival was delayed until October 17 after the loading was practically completed and the scows had been turned end for end five times in order to assist in the distribution of the load.
It was at this time that Captain Plester had a conversation with Mr. Kovlaske, who was in charge of loading the 150 series scows for Tahsis under the direction of Mr. Beale, which he describes as follows:
…I asked Mr. Kovlaske when he expected to turn the barge again as he had informed me that he would be turning her once more before completion, and he then asked me, and while he was asking me he was looking at the width of the barge, and he said, now he said, “How much list should I put on this barge before I turn her as this is an unfamiliar piece of equipment to me?” So I said, “Well, Al, two to three feet. You can go two to three feet to be quite safe, but you should not exceed three feet in any case.”
It is with respect to this evidence that the learned trial judge made the following comment:
However, he did not tell Kovlaske that in the final stages of loading the effect on stability by the placement of the latter part of the cargo could be controlled by watching to keep the list within the limit of three feet, nor how tricky this could become in the final stages of loading. I particularly find that although Captain Plester advised him not to allow a list to exceed three feet he did not advise him of any plan or sequence of placement of cargo which would enable Kovlaske to keep the list under three feet. In my view it is meagre advice to advise one to keep the list not more than three feet and to fail to explain how this can be done.
In quoting the evidence of the conversation between Plester and Kovlaske, the learned trial judge omitted to refer to what followed after Kovlaske had been told that he should not exceed three feet in any case. Mr. Plester’s evidence, which is uncontradicted, continues:
Q. Alright, and what did he say in response to that?
A. And he said, “Okay,” and I said, now, I said, “Due to the size the barges you should take measurements from time to time or have your loader take measurements to establish the list.” I said, “These can be very confusing due to the size of the barge. You can get more than that if you don’t watch.” He said, “Okay. I’ll watch that pretty carefully.”
As I have indicated, the loading procedure adopted by Tahsis was on a temporary basis and to some extent was a question of trial and error to find out what the problems were, but whatever the exact instructions may have been which were given to Kovlaske by Captain Plester, it is clear that having received these instructions Kovlaske had successfully superintended the loading of six such scows eccentrically between October 15 and December 30 and that on December 27 when the V.T. 151 was delivered by Vancouver Tug, he was the only person who had had any actual experience in superintending the loading of these scows with the equipment available and he was in a better position than anyone else to know what was a safe load.
It is in my view highly significant and clearly indicative of the responsibility accepted by Tahsis for loading that after observing the first two loads, the superintendent and managing engineer of Tahsis decided to change the loading arrangements at the plant. As to this he gave the following evidence:
Q. Well, now, as a result of this loading and your experience what plans were made with respect to the conveyor?
A. After we had observed a couple of loadings of V.T. 150 we were still somewhat undecided as to exactly what action we should take. We then laid out again in great detail the barge at all water levels and all load conditions.
Q. What do you mean you laid it out?
A. We drew a sketch to scale showing the conveyor, the dock face, the water at high tide, the barge at full load and empty, to examine completely the relationship of the barge to the conveyor and to the spout. Having done this, we decided that we should then lengthen the conveyor and re-hang the spout and lengthen the spout.
It is to be remembered that Mr. Beale was a qualified engineer with years of experience in the loading of scows and his next answer deals with details of re-hanging the conveyor. He then says:
We then would add one section to the conveyor spout so that the chips could be directed further away from the dock, further in all directions. This course of action was decided upon. It was uncertain at this point how much inconvenience we would run into in loading the scows this way. We determined for certain that we could load them, and I think below 5 or 6 foot tide we could load a scow in any condition. We would have to plan our loading so that the top load was built at tides so that the corners of the top loads would have to be built at tides below 5 or 6 feet, something in that order.
If this proved to be inconvenient, which we did not anticipate, then it would be no more costly to raise the conveyor after these changes were made than to raise the conveyor before the changes were made, so we decided we would do it in 2 steps, we would make the 3 changes to the conveyor, and observe what happened for a period of time, and if we found it was inconvenient or costly, then we would raise the conveyor, and as a second step—Now, having decided this we then went ahead with it.
Q. What relative dates are involved there, Mr. Beale?
A. Well, in the middle of October we loaded the first scow. Some time in November we made these decisions after several sketches and some fairly detailed layouts. As to the exact timing, I am not sure, but between that time, between the middle of November and the end of December, we fabricated and installed a new support mechanism for the conveyor, in order to support the additional lengths, and this had been installed when the conveyor was knocked down by the barge.
I have quoted at considerable length from the evidence of Mr. Beale because he was the general superintendent of the Tahsis company and because it was he who suggested the method of loading the scows “to a list” which was undoubtedly a factor contributing materially to the capsizing of the V.T. 151 at the dock side on December 31. It is to be noted that when he was called out to view the scow shortly before its collapse, his reaction was “that it may have been loaded very poorly.”
As I have indicated, I take the view that the responsibility for the V.T. 151 while moored at the appellant’s dock during loading rested with the appellant (see clause 5(e)) subject to the fact that it was required (under clause 7 (b)) to comply with any instructions provided by the carrier as to loading and trimming.
In the course of investigating the cause of the accident, both parties took the opinions of experts in naval architecture and I think it is fair to say that the effect of their evidence is that the scow was “tender” and the loading had to be closely watched even before the list reached the three feet specified by Captain Plester, although none of these experts was prepared to say that the scow would have capsized as the result of loading alone if Captain Plester’s instructions had been followed and the list not allowed to exceed three feet.
Based on the very exhaustive analysis made by its experts after the event, it is now contended on behalf of the appellant that the scow was unseaworthy in that the loading instructions given by Plester to Kovlaske on October 17 were insufficient. It is to be remembered that under the provisions of clause 1(b) and 3(c) of the agreement, pursuant to which the loading was being conducted, the carrier’s agreement was to exercise due diligence to keep the scow in all respects in “normal condition, safe to tow in the trade for which” it was “being used” and that the water contained in any main compartment of the bottom of any scow did not exceed four inches.
There is no suggestion that the scow was not in normal condition, or that it was unsafe to tow in the trade or that there was any water contained within the hull. The scow was in this sense seaworthy within the meaning of the agreement, but it is contended on behalf of the appellant that a ship which is structurally sound may nevertheless be unseaworthy if those who charter it are not instructed in the proper method of using it. The contention is based on the case of Standard Oil Co. of New York v. Clan Line Steamers Ltd.[3], (hereinafter called “Clan Line”) and it is in my opinion important that this case should be analysed so as to determine whether it affords authority for the proposition that a structurally sound ship chartered by an owner for loading by a shipper is not seaworthy unless it is accompanied by detailed loading instructions embodying the conclusions of a marine architect based on stability data compiled by him concerning the ship. In The “Hildina”[4], Lord Merriman, who was then President of the Admiralty Division, had occasion to make the following explanatory comment on the Clan Line case. He said, at p. 258:
This was the case, to put it quite shortly, of the turret ship which turned turtle and it is a little important, in comparing so far as possible one set of circumstances with another, to know that an earlier turret ship of the same construction had turned turtle. The whole point was this, that in a ship of that description it proved on subsequent investigation after the loss of the first ship that unless there was water ballast in two of the holds up to a certain measure the ship was unseaworthy. If she was properly ballasted she was perfectly seaworthy, and, as the result of the first loss, the builders had circularized elaborate instructions to those in whose possession their ships were, about the absolute necessity of keeping the water ballast intact. In the case of the second ship, some nine years later than the original casualty, it was proved that those instructions had not been passed on to her master, who had deliberately, but in absolute ignorance of the necessity for keeping these holds full of water ballast, pumped the ballast out…
It was under these circumstances that the House of Lords held “that the ship was inherently unseaworthy under certain not improbable conditions unless special precautions were taken which it was the duty of the owners to enjoin as being required by the structure of their ship and that the owners were therefore liable for the loss of their cargo”.
When he came to consider the Clan Line case in relation to the facts of The “Hildina”, Lord Merriman observed, at p. 260:
…I do not think there is anything in the circumstances of this case which remotely resembles the outstanding fact in the Clan Line case that nine years before the casualty in question another ship had turned turtle for lack of the very precaution with which the owners had in the case in question failed to acquaint the master of the ship involved in the second casualty. There is nothing comparable to that at all in this case. With the greatest respect for those who may hold a different view, I think that this language of Lord Merriman is applicable to the present case, and I do not think that the Clan Line case affords authority for the proposition that when a shipowner delivers a structurally seaworthy scow into the hands of a shipper for loading and that shipper is experienced in the loading of the cargo to be carried, that the scow can be said to be unseaworthy because its owners have not retained naval architects to devise a detailed loading plan and conveyed detailed loading instructions to the shipper as to the point beyond which it becomes dangerous to overload the scow on one side. In the present case there had been no similar collapse of such a scow at its moorings while loading, the plant superintendent at Tahsis was a man of long experience in loading scows and only a very short time before the accident his company had prepared a scale sketch of the barge and loading facilities and had “laid out again in great detail the barge at all water levels and all load conditions”.
In the case of the Clan Line the owners knew that the vessel was only seaworthy so long as the detailed instructions furnished by the builders were complied with, but they failed to convey these instructions to the master of the ship. The real question in that case was whether the owners had proved “that the loss occurred without their actual fault and privity” within the meaning of s. 503 of the Merchant Shipping Act, 1894, and it was held that the failure to give the instructions to the master brought the fault home to the owners.
It is, however, also contended that the provisions of clause 7(b) of the agreement placed upon the respondent the burden of providing the shipper with the kind of detailed instructions which were worked out by the marine architects after the event and in this regard it is to be observed that the right to control the manner in which a ship is to be loaded rests primarily with the shipowner as it has to protect its ship from being made unseaworthy, but that the obligation to discharge the function of loading may be shifted to the shipper by the terms of the contract of carriage. As I have indicated, I read the provisions of clause 7(b) as giving expression to the carrier’s right to dictate loading instructions and I think that the shipper is required to comply with such instructions, but I do not think that the carrier is placed under any obligation to give them although if it does so, its instructions must be such as not to endanger the safety of the scow or cargo.
In my view there is a strong analogy between the circumstances of the present case and those which were considered in Canadian Transport Co. Ltd. v. Court Line Ltd.[5] In the present case clauses 7(b) and (c) of the agreement, when read together, provide that the cargo (i.e. pulp chips) “shall be loaded and trimmed solely at the expense of the Shipper—in accordance with loading instructions provided by the Carrier—from time to time” whereas in the Court Line case clause 8 of the charterparty provided in part that “charterers are to load, stow and trim the cargo at their expense under the supervision of the captain…”. In that case the captain stood in the place of the shipowners who brought the action against the charterers for damage due to improper stowage of cargo. In the course of his reasons for judgment, Lord Atkin said, at p. 937:
The shipowners claimed to recover this sum which had been paid to the bill of lading holders from the charterers on the ground that they were liable to the owners for improper stowage under clause 8. The first answer which the charterers made was that there was no such liability because the duty of the charterers was expressed to be to stow, etc., “under the supervision of the captain”. This, it was said, threw the actual responsibility for stowage on the captain; or at any rate threw upon the owners the onus of showing that the damage was not due to an omission by the master to exercise due supervision. This, we were told, was the point of commercial importance upon which the opinion of this House was desired. My Lords, it appears to me plain that there is no foundation at all for this defence; and on this point all the judges so far have agreed. The supervision of the stowage by the captain is in any case a matter of course; he has in any event to protect his ship from being made unseaworthy; and in other respects no doubt he has the right to interfere if he considers that the proposed stowage is likely to impose a liability upon the owners. If it could be proved by the charterers that the bad stowage was caused only by the captain’s orders, and that their own proposed stowage would have caused no damage no doubt that might enable them to escape liability. But the reservation of the right of the captain to supervise, a right which in my opinion would have existed even if not expressly reserved, has no effect whatever in relieving the charterers of their primary duty to stow safely…
In that case the charterparty was in “time-charter” form but it was in fact a charter for a single voyage from Rotterdam to the Northern Pacific and return to the United Kingdom or the Continent. In my opinion the position of the charterers was analagous to that of the shippers in the present case and as I have said, the captain stood in the place of the owners. I therefore think the decision of the House of Lords, when applied to the interpretation of clause 7 of the agreement in the present case can be construed as meaning that the reservation of the right of the owner to give loading instructions from time to time and to require that the loaded scow be examined by its master (clauses 7(b) and (c)) has no effect whatever in relieving the shippers of their primary duty under clauses 5(e) and 7(a) to stow safely, and I think also that in order to succeed in the present action the shippers would have to prove that the bad stowage resulting in the collapse of the scow was caused only by the loading instructions given by the carrier and that their own proposed stowage would have caused no damage at all.
As I have indicated, I am of opinion that the shipper was required to comply with any instructions which were given to it by the carrier and that the carrier had the right but not the duty to give such instructions subject to the fact that any instructions which it did give must be such as to not endanger the safety of the scow or cargo. I am, however, in any event of opinion that even if clause 7(b) be construed as imposing a duty upon the carrier to give loading instructions, there was no breach of such a duty in the present case because, as will hereafter appear