Sunrise Co. v. Lake Winnipeg (The)

Sunrise Co. v. Lake Winnipeg (The)
Collection
Supreme Court Judgments
Date
1991-01-17
Report
[1991] 1 SCR 3
Case number
21264, 21288
Judges
Lamer, Antonio; Wilson, Bertha; La Forest, Gérard V.; L'Heureux-Dubé, Claire; Sopinka, John; Gonthier, Charles Doherty; McLachlin, Beverley
On appeal from
Federal Court of Appeal
Subjects
Maritime law
Notes
SCC Case Information: 21264, 21288
Decision Content
Sunrise Co. v. Lake Winnipeg (The), [1991] 1 S.C.R. 3
Sunrise Company Limited and Ceres Hellenic
Shipping Enterprises Ltd. Appellants
v.
The Ship Lake Winnipeg and Her Owners Respondents
and between
The Ship Lake Winnipeg and Her Owners Appellants
v.
Sunrise Company Limited and Ceres Hellenic
Shipping Enterprises Ltd. Respondents
Indexed as: Sunrise Co. v. Lake Winnipeg (The)
File Nos.: 21264, 21288.
1990: May 23; 1991: January 17.
Present: Lamer C.J.* and Wilson, La Forest, L'Heureux‑Dubé, Sopinka, Gonthier and McLachlin JJ.
on appeal from the federal court of appeal
Maritime law ‑‑ Liability ‑‑ Loss of earnings while ship in dry dock ‑‑ Dry dock repairs required after ship grounded avoiding collision ‑‑ Near collision fault of other vessel ‑‑ Ship ran aground a second time on way to anchorage through no fault of vessel involved in first incident ‑‑ Damage from both incidents repaired concurrently ‑‑ If effected consecutively, repair arising from first incident requiring more time than repair from second incident ‑‑ Whether negligent vessel responsible for lost earnings for entire period in dry dock or whether losses for time spent repairing damage from second incident should be set off.
Maritime law ‑‑ Negligence ‑‑ Ship grounded avoiding collision ‑‑ Near collision found to be fault of other vessel ‑‑ Findings of fact indicating negligence ‑‑ Whether or not palpable error in findings of fact of trial judge.
The Kalliopi L, while downbound on the St. Lawrence River, met but did not collide with the upbound Lake Winnipeg and went aground. The trial judge found the Lake Winnipeg entirely responsible for this grounding. The ship ran aground a second time while proceeding to an anchorage area and was further damaged. This incident was unrelated to the first and occurred through no fault of the Lake Winnipeg. The damage caused by the first incident required 27 days in dry dock to repair. The repairs necessitated by the second incident were effected during this 27-day period and would have required 14 days in dry dock if they had been done separately. The time in dry dock solely attributable to the first incident, therefore, was 13 days.
The sole issue raised by the appeal by Sunrise Company Limited was responsibility for the loss of profit resulting from Kalliopi L's 27 days in dry dock. The appeal by the Lake Winnipeg (the cross‑appeal) raised the issue of liability of the Lake Winnipeg for the first grounding. At trial, the Lake Winnipeg was found to be solely responsible for the first grounding and held liable for the lost revenue flowing from the 27 days in dry dock consequent on that grounding. The Court of Appeal upheld the finding as to responsibility for that grounding but deducted the damages for lost revenue for the 14 days required to repair the damages caused by the second grounding from the damages that arose because of the 27 days in dry dock. Both parties appealed to this Court.
Held (Gonthier and McLachlin JJ. dissenting in part): The appeal by Sunrise Company Limited should be allowed.
Held: The appeal by the ship Lake Winnipeg should be dismissed.
Per Lamer C.J. and Wilson, La Forest, L'Heureux‑Dubé and Sopinka JJ.: It is not enough to consider whether the ship was detained by the wrongful act of the defendant. It is essential to consider whether damages were caused to the plaintiff by reason of such detention. Sequence in and of itself means little; the perspective must be broadened by an examination of the existing state of the vessel.
The case law on the subject matter is consistent. In particular, The Carslogie and The Haversham Grange can stand side by side and lead to a principled resolution of the issue here. The Lake Winnipeg was solely responsible for the first incident and accordingly was solely responsible for the profit loss flowing from the 27 days in dry dock. It was not sufficient here merely to determine that the damage caused by the second incident was a cause of the detention. The second incident, while it caused time in dry dock, did not result in any loss of profit. The profit‑making enterprise was brought to a halt by the meeting with the Lake Winnipeg. Repairs due to the second incident were completed within the 27 days detention required by the first incident and therefore did not diminish the ship's profit‑earning capacity.
The nature of the second casualty, whether tortious or otherwise, was irrelevant in any determination as to profit‑earning capacity. The link between the second incident and the loss of profit suffered by the Kalliopi L was merely coincidental, not causal.
Per Gonthier and McLachlin JJ. (dissenting in part): The party responsible for the initial damage need not always bear the whole of the loss resulting from detention, regardless of intervening causes which may also require detention. Damages are to restore the plaintiff to the position it would have been in but for the tortious conduct of the defendant ‑‑ no less and no more. The matter to be determined is what loss the plaintiff has established to have been caused by the defendant's wrongful act, viewing the matter as it stands at the time of trial, and taking into account any factors which have diminished the loss in the interval following the defendant's tort. To the extent that an event which occurs after and independently of the tort diminishes the loss caused by the tortious event, that diminution must be reflected in the award for damages.
The diminution in a loss due to detention caused by a subsequent event can be recognized by pro rata apportionment. This approach is philosophically compatible with the contributory negligence approach to damages now prevalent in virtually all areas of tort law, and reflected in legislative provisions such as the Canada Shipping Act and the Ontario Negligence Act. Contributory negligence per se, although arguably available on the legislation, was not canvassed in the case at bar.
The rule of apportionment might be summarized as follows: (1) where there are two or more contributing causes to the loss of use of the vessel as a profit‑earning machine; and (2) where each cause, considered independently, makes it necessary to detain the vessel to effect repairs, which are made concurrently; (3) then, to the extent that the two or more sets of repairs are effected concurrently, the loss due to detention is equally allotted between the causes; and (4), to the extent that the time is not used concurrently to repair both sets of damage, the resultant losses are borne solely by the party that caused those losses.
The effective cause of the grounding was the wrongful act of the Lake Winnipeg and the manner in which it forced the Kalliopi L into the perilous position close to the southern bank of the river. Liability was not imposed on the Lake Winnipeg because it chose to enter the narrow channel, but because in exercising this choice, it was under a duty to ensure that its actions did not threaten the safety of the downbound ship as it negotiated this part of the channel. No reversible or significant error occurred at trial or on appeal.
Cases Cited
By L'Heureux‑Dubé J.
Considered: The Haversham Grange, [1905] P. 307; Carslogie Steamship Co. v. Royal Norwegian Government, [1952] A.C. 292; The Chekiang, [1926] A.C. 637; referred to: The Hauk (1927), 30 Ll. L. Rep. 139; Baker v. Willoughby, [1969] 1 Q.B. 38; Stene and Lakeman Construction v. Evans and Thibault (1958), 24 W.W.R. 592; Performance Cars Ltd. v. Abraham, [1962] 1 Q.B. 33.
By McLachlin J. (dissenting in part in appeal by Sunrise Company Limited)
Carslogie Steamship Co. v. Royal Norwegian Government, [1952] A.C. 292; The Oinoussian Friendship, [1987] 1 Lloyd's Rep. 258; Baker v. Willoughby, [1969] 3 All E.R. 1528; Ruabon Steamship Company v. London Assurance (1899), 9 Asp. M.C. (N.S.) 2, rev'g [1898] 1 Q.B. 722; The Haversham Grange, [1905] P. 307; Marine Insurance Co. v. China Transpacific Steamship Co. (The Vancouver) (1886), 11 App. Cas. 573; The Acanthus, [1902] P. 17; The Chekiang, [1926] A.C. 637; The Ferdinand Retzlaff, [1972] 2 Lloyd's Rep. 120; Stein v. The Ship "Kathy K", [1976] 2 S.C.R. 802.
Statutes and Regulations Cited
Canada Shipping Act, R.S.C. 1970, c. S‑9, ss. 635, 638.
Negligence Act, R.S.O. 1980, c. 315, ss. 2, 4, 5.
Authors Cited
McGregor, Harvey. McGregor on Damages, 15th ed. London: Sweet & Maxwell, 1988.
McGuffie, Kenneth C. The Law of Collisions at Sea. (British Shipping Laws, vol. 4.) London: Stevens & Sons, 1961.
APPEALS from a judgment of the Federal Court of Appeal (1988), 96 N.R. 310, allowing in part an appeal from a judgment of Cullen J. Appeal by Sunrise Company Limited and Ceres Hellenic Shipping Enterprises Ltd. allowed, Gonthier and McLachlin JJ. dissenting in part. Appeal by the ship Lake Winnipeg and Her Owners dismissed.
T. H. Bishop, for Sunrise Company Limited and Ceres Hellenic Shipping Enterprises Ltd.
Sean Harrington and Nicholas Spillane, for the ship Lake Winnipeg and Her Owners.
//L'Heureux-Dubé J.//
The judgment of Lamer C.J. and Wilson, La Forest, L'Heureux-Dubé and Sopinka JJ. was delivered by
L'Heureux‑Dubé J. -- I have had the advantage of the opinion of my colleague, Justice McLachlin but, with respect, cannot adopt her reasons nor reach the result she proposes as regards the principal appeal. I however agree with her reasons and disposition in the cross‑appeal.
Although my colleague has set out the facts, for clarity I will summarize them here.
On June 7, 1980, the Kalliopi L, while downbound on the St. Lawrence River, met but did not collide with, the upbound Lake Winnipeg. Immediately after the meeting, the Kalliopi L went aground. The trial judge found that the Lake Winnipeg and her owners were entirely responsible for this grounding. In proceeding to an anchorage area, the Kalliopi L again, though through no fault of the Lake Winnipeg, went aground and suffered further damage. The second incident was unrelated to the first. Each grounding alone would have required the Kalliopi L to proceed immediately to dry dock for repairs once her cargo had been discharged. The time in dry dock necessitated by damage repairs occasioned by both incidents was 27 days. The detention in dry dock for repairs from the first incident alone would have required the full 27 days. If, however, repairs relating to the second incident were carried out separately, only 13 days in dry dock would have been necessary.
Liability for the cost of repairs is not an issue in the principal appeal as each party assumed responsibility for these costs. The loss in dispute is that resulting from the detention of the ship. Accordingly, the sole issue raised by the principal appeal is who is responsible for the loss of profit resulting from the detention for 27 days of the Kalliopi L.
The cross‑appeal raises the issue of liability of the Lake Winnipeg for the first grounding. At trial, Cullen J. held that the Lake Winnipeg was solely responsible for the first grounding and further, that the Lake Winnipeg was liable for the 27 days detention consequent on the first grounding. On appeal, Hugessen J. for the Court upheld the trial judge's finding that the Lake Winnipeg was wholly responsible for the first grounding but held that the trial judge erred in holding the Lake Winnipeg responsible for the entire 27 days in dry dock. Since I agree entirely with the reasons of my colleague for dismissing the cross‑appeal, I will deal exclusively with the issue raised by the principal appeal.
Based upon the principles my colleague derives from the case law, she concludes that the losses suffered as a result of the delay of the ship should be apportioned between what she finds to be the two parties who caused that detention, the Lake Winnipeg and the Kalliopi L. According to her analysis, to the extent repairs are effected concurrently, the loss is apportioned equally, otherwise the loss falls on the party causing that loss.
While I agree with my colleague that The Haversham Grange, [1905] P. 307, and Carslogie Steamship Co. v. Royal Norwegian Government (The Carslogie), [1952] A.C. 292, bear heavily in the resolution of the issue in this case, I must respectfully disagree with her analysis and the conclusions she draws from the cases. It is my opinion that The Haversham Grange, and The Carslogie, are consistent with one another and are applicable to the issue confronting us in this appeal.
Before turning to these cases I will refer briefly to the works of McGuffie, The Law of Collisions at Sea (1961), and McGregor, McGregor on Damages (15th ed. 1988). At page 000 of her reasons, McLachlin J. sets out a passage from each and concludes that "[there] is a welter of confused and confusing jurisprudence, a state of affairs reflected in the fact that the two leading scholars commenting on it arrive at different conclusions as to the rules applicable to this case." Both authors attempt to summarize the law in this area; McGuffie sets out a number of propositions, while McGregor divides the case law into four separate areas. To end up with a true comparison, one must choose a proposition from each that proceeds from the same jurisprudential base. Due to the summary nature of the works, there is some difficulty in comparing their respective positions. I will however attempt to set out what, in my opinion, are the proper corresponding propositions.
To begin with, to be meaningful the proposition cited by my colleague from McGregor's work must, in my opinion, be viewed in its proper context. For ease of reference I will reproduce here the proposition McLachlin J. extracts from McGregor at p. 000 of her reasons:
It would therefore seem clear that even where only one casualty is caused tortiously and the other without liability upon anyone, as by heavy weather, the dock expenses and loss of profits will be attributable solely to the casualty first in time. If that is the casualty caused by the tortfeaser he will be wholly liable, but if it is the casualty caused by the heavy weather the plaintiff will have no redress.
This quotation occurs within a larger discussion centred on The Haversham Grange, a discussion that attempts to solve the question of liability when two events, each in isolation, render a ship unseaworthy and consequently in need of dry dock. Such a situation is mirrored by the facts in the instant case. At page 787, McGregor concludes that in such a case:
. . . the sequence of casualties becomes important and the loss of profits and the dock expenses will be properly attributed to the first in time.
McGregor goes on to discuss The Haversham Grange and the House of Lords decision in The Carslogie, and how these cases lead one to this result. It is within this larger context, a discussion of The Haversham Grange, that the above quotation must be evaluated.
In order to compare this statement with one of the propositions set out by McGuffie, one must choose that proposition which flows from the same case, The Haversham Grange. The proposition so chosen, located at p. 398 reads:
(6)If it is necessary to effect collision repairs in respect of two collisions, damages for detention are payable by the wrongdoer in the first collision, so far as not increased by the second.
In my opinion, this comparison is the more accurate one. In addition, the summaries found in McGregor's work offer more in the way of factual background and analysis. The propositions found in McGuffie's work seem vacuous in comparison, due to the acontextual fashion in which they are presented. In my opinion, his analysis is unhelpful and confusing.
As far then as these two authors are concerned, I respectfully disagree with my colleague's conclusion that they are in conflict. Furthermore, I feel more comfortable in relying upon the work of McGregor.
I turn now to a consideration of The Carslogie, and The Haversham Grange. It is my contention that the results in these two cases are not inconsistent, and further, that the proper application of these two cases resolves the issue here.
The facts of The Haversham Grange are strikingly similar to those in the present case; therefore I will set them out at some length. The ship Maureen was struck by the ship Caravellas and, on the following day, was struck by the Haversham Grange. The damage incurred as a result of either collision would have necessitated time in dry dock. The repairs consequent upon the two collisions were carried out at the same time. The repairs due to the second collision did not increase the amount of time spent in dry dock. Carried out alone, repairs due to the first collision would have required 22 days, while repairs due to the second collision would have required only six. The owners of the Maureen claimed against the Haversham Grange for the six days detention time.
The Registrar rejected the Maureen's claim. Gorell Barnes, President, on a motion in objection to the Registrar's decision, upheld the decision of the Registrar on the ground that as the Maureen had already been rendered unseaworthy and in need of dry docking due to the first incident, the repairs required by the second collision were not a factor in her delay and thus the Haversham Grange should bear no responsibility for the time spent in dry dock.
It must be stressed that, on appeal, the claim against the Haversham Grange for loss of profit was abandoned. Therefore, the bulk of the reasons rendered on appeal were concerned solely with the issue of dock dues and other expenses which the Court of Appeal apportioned between the two wrongdoers. In so far as the issue of the claim for detention of the ship was discussed, the Court of Appeal confirmed the opinion of the President. At page 317 Collins M.R. stated:
It turns out that the ship must have been, and in point of fact was, detained the whole time in dock by the repairs which had to be executed in consequence of the damage done by the first of the two ships, the Caravellas, and that in point of fact although the repairs occasioned by the Haversham Grange were done simultaneously, the ship was not detained an hour longer by reason of that fact. In view of that state of things, it seems to me impossible to say that any claim for demurrage exists against the Haversham Grange, and that, therefore, so far as that part of the case is concerned, it must be dismissed.
The internal inconsistency in The Haversham Grange that my colleague refers to appears to have been eliminated by the House of Lords in The Carslogie which overruled the Court of Appeal on the issue of dock dues. While I will discuss this in greater length when I turn to The Carslogie, I would like to note at this point that consideration of that portion of the case apportioning dock dues seems inappropriate in view of the fact that the House of Lords emphatically rejected the reasoning on this point. Therefore, I do not think that any conclusion can be drawn from that part of the case as regards the point in issue here.
In a case prior to The Carslogie, the House of Lords considered the Court of Appeal's reasons in The Haversham Grange on the issue of loss of profits. In The Chekiang, [1926] A.C. 637, an owner of a ship damaged in a collision decided that while the ship was in dry dock for repairs it might as well have its annual refit done, a refit not due for another four months. The question arose as to whether the owner was responsible for that period of detention necessitated by the decision to refit. In this context, Lord Phillimore considered The Haversham Grange, and approved of the Court of Appeal's reasons on the detention issue. He extracted from the Court of Appeal's reasons a larger and more general expression of principle. At page 653, Lord Phillimore set out the principle in these words:
If a vessel has got to go into dry dock for a periodical survey for class or in the case of King's ships by the practice of the Admiralty, or to repair previous damage, her detention for repairs due to some collision which occurs after the previous damage or after the determination to put her into dry dock has been made, will not be a charge against the wrongdoer; otherwise it will.
Interestingly, this case also foreshadowed the decision of the House of Lords in The Carslogie which overruled that portion of the Court of Appeal's reasons in The Haversham Grange that apportioned dock dues. At page 653, Lord Phillimore disapproved of the manner in which the dock expenses were dealt with, calling the ground used by the Court of Appeal to distinguish between them and the damage due to detention, "not very easy to appreciate" but left reconsideration for the future.
I turn now to The Carslogie. This more recent House of Lords decision is, in my view, consistent with The Haversham Grange. Furthermore, The Carslogie, renders the decision in The Haversham Grange internally consistent and provides strong support for the result, a result that should, in my opinion, obtain on the facts of the case before us.
The facts in The Carslogie are these. The Carslogie ran into the Heimgar. There was an admission of liability on the part of the Carslogie. Temporary repairs were effected but permanent repairs had to be carried out in the United States. Important for an understanding of the result in this case is the fact that, after the collision with the Carslogie and prior to crossing the Atlantic, the Heimgar was given a certificate of seaworthiness, authorizing her to be continued in her present class without fresh record of survey, subject to permanent repairs at the owner's convenience. She was held to be fit to carry dry and perishable cargoes. During the crossing of the Atlantic, the Heimgar encountered heavy weather and sustained such damage as rendered her unseaworthy. This necessitated immediate dry docking. Thus, prior to encountering rough weather on the Atlantic, the Heimgar was a seaworthy vessel, capable of earning profits for her owners. Repairs due to the collision and to heavy weather, as well as the owner's repairs were all carried out at the same time. Of the 50 days in dry dock, it was agreed that 10 days should be allocated to the repair of the collision damage and 30 for the weather damage. The question for the House of Lords was whether the owners of the Carslogie were liable for the 10 days detention. The House of Lords answered this question in the negative.
In order to support my contention that the result in this case is consistent with and supportive of that in The Haversham Grange, it is necessary to quote at some length from the reasons in The Carslogie. It will be seen that the House of Lords both clarifies the reasoning of the Court of Appeal in The Haversham Grange, and also resolves the issue facing them in a manner consistent with that case.
After setting out some of the basic principles referred to by my colleague McLachlin J., Viscount Jowitt offered what is, to my mind, one of the most important principles in resolving questions of liability for loss of profit in cases such as these. At pages 300‑301, he stated:
If I may use the expression of Bucknill L.J. . . . damages are payable for the detention of a ship because she is "a profit‑earning machine". If she ceases to be a profit‑earning machine it follows that she can sustain no damage from being detained until she again becomes capable of earning profit. In other words, it is not enough to consider whether the ship was detained by the wrongful act of the defendant. It is essential to consider whether damages were caused to the plaintiff by reason of such detention. [Emphasis added.]
Viscount Jowitt proceeded to distinguish the cause of detention from the cause of loss of profit, a distinction that is seized on in all of the opinions in the case. Viscount Jowitt noted that the cause of loss of profit in this case was the heavy weather damage since the Heimgar was a profit‑making, seaworthy vessel after the collision and prior to the crossing of the Atlantic. While the collision may have been a cause of her detention, it did not figure in the loss of profits.
As to The Haversham Grange, Viscount Jowitt disapproved of that portion of the case dealing with dock dues but noted at p. 303 that, ". . . the decision as to damages for delay was correct." At page 306 he stated that there was no conflict between the result in The Carslogie and The Haversham Grange. He reconciled these cases, along with The Hauk (1927), 30 Ll. L. Rep. 32, a case similar to The Carslogie, supra, with these words:
My Lords, both in The Hauk and in the present case the unseaworthiness was caused by an event which happened after the collision, and I see nothing in the rule laid down in The Haversham Grange which in any way conflicts with the decision in The Hauk. That rule . . . rightly treats the first wrong‑doer who renders the vessel unseaworthy as responsible for the consequent delay, notwithstanding the act of a second wrong‑doer who also rendered the ship unseaworthy . . . .
Although the opinions of the other Lords depart little from the reasoning of Viscount Jowitt, I will nevertheless refer to them briefly.
Lord Normand also had little difficulty in reconciling The Carslogie and The Haversham Grange. He made clear that the sequence of events is largely irrelevant. Viewed superficially in terms of sequence, the cases are indeed hard to reconcile. After discussing The Haversham Grange, Lord Normand, at p. 310, provided the proper perspective, a perspective similar to that enunciated by Viscount Jowitt and one that allows the two cases to stand together:
As in that case [The Haversham Grange] so in this the claim fell to be disallowed because the plaintiffs failed to prove that the ship could have earned profits during the period of detention caused by the repairs rendered necessary by the defendants' tort.
Further, at p. 311:
Bucknill L.J. fell into what I humbly think is the error of supposing that The Haversham Grange is authority for a rule that liability for detention attaches to a tortfeasor merely because the damage done by his tort is prior in time to a subsequent damage, whether caused by a tort or by some other cause . . . if the fact is that one of two casualties made the vessel unseaworthy and the other did not, the problem of liability is solved and the time sequence is irrelevant. In The Haversham Grange the time sequence was important because the damage suffered by the Maureen in each of the two collisions was enough to make her unseaworthy. [Emphasis added.]
Like the other Lords, Lord Normand concluded that, as the Heimgar was a profit‑earning vessel prior to incurring the heavy weather damage, the loss of earnings was not caused by the collision.
Lord Tucker made the same important point; sequence in and of itself means little. Only when the perspective is broadened by an examination of the existing state of the vessel can a principled decision regarding liability be made. He noted that an examination of the cases from the viewpoint of where liability is found ultimately to rest, on the intervening or initial casualty, is misleading and confusing. He explained, at pp. 316-17:
. . . both the Hauk and the Heimgar were rendered unseaworthy by events which happened after the collision in each case. So far as the claim for demurrage was concerned in The Haversham Grange, it was rejected not because the collision between the Maureen and the Haversham Grange was subsequent to the collision with the Caravellas, but because it turned out that the Maureen must have been and in point of fact was detained the whole time in dock for the repairs which had to be executed in consequence of the damage done by the Caravellas which had rendered her unseaworthy. It was immaterial that the damage done by the Haversham Grange would also by itself have made the Maureen unseaworthy or that it occurred after the first collision. [Emphasis added.]
The judgment of Lord Morton of Henryton is to the same effect.
Before applying this reasoning to the facts of the case before us, I will briefly comment on the comparison of loss of profit cases in the shipping area with personal injury cases. While, as my colleague McLachlin J. points out at p. 000 of her reasons, the general principles may be the same, their application is of necessity different. Inherent differences in the nature of the injuries sustained militate against any meaningful comparisons between the two areas. The problems that may arise upon such an attempt can be seen in the difficulties experienced by the court in the personal injuries case referred to by McLachlin J., Baker v. Willoughby, [1969] 1 Q.B. 38.
Another example in the case law of an attempted comparison can be found in Stene and Lakeman Construction v. Evans and Thibault (1958), 24 W.W.R. 592 (Alta. S.C.A.D.). At trial, The Carslogie was held to be inapplicable. On appeal, McBride J.A. implicitly warned against such comparisons. At page 596 he spoke of his inability to find any meaningful similarities in the shipping cases:
I find it difficult to see any similarity or parallel between a seaworthy motor vessel damaged but still requiring further repairs because of original collision damage, then later and further severely damaged in mid‑Atlantic, and the plaintiff Stene's position after the doctors had done all they could for him with respect to the first accident and he had made his maximum recovery and had started to learn accountancy.
It seems to me that a more meaningful use of the principles in the shipping cases occurs in Performance Cars Ltd. v. Abraham, [1962] 1 Q.B. 33, in that, as in the shipping cases, the issue revolved around property damage. In this case, a car was involved in two collisions. The damage done was slight although the first collision necessitated the respraying of the whole of the lower part of the car. As the plaintiff was unable to recover the amount needed for respraying from the first tortfeasor, he reasoned that, as the damage caused by the second tortfeasor would have independently required respraying, he would look to the second tortfeasor for recovery of this cost. Lord Evershed M.R. in coming to a conclusion, relied partly on the reasoning in The Carslogie and The Haversham Grange. At page 40, he concluded:
In my judgment in the present case the defendant should be taken to have injured a motor‑car that was already in certain respects (that is, in respect of the need for respraying) injured; with the result that to the extent of that need or injury the damage claimed did not flow from the defendant's wrongdoing. [Emphasis added.]
While in the case before us liability for the cost of repairs is not in issue, I have referred to this case to illustrate what is, in my opinion, a more appropriate context for meaningful use to be made of those principles laid down in the shipping cases. The conclusion reached by Lord Evershed M.R. is also helpful in the search for a principled conclusion in the case presently before us.
I turn now to the disposition in this case. As I have hopefully made clear above, the two leading cases, The Haversham Grange and The Carslogie can stand side by side and lead to a principled resolution of the issue in the present appeal. The necessary result is that the Lake Winnipeg, which was solely responsible for the first incident which required 27 days in dry dock, is wholly responsible for the profit loss due to this detention. It is not sufficient in this case merely to determine that the damage caused by the second incident was a cause of the detention. Notwithstanding an affirmative answer to this question, one must, on the principles set out above, answer the further and more important question of liability for loss of profit. While the second incident caused time in dry dock it did not have as a consequence any loss of profit. This conclusion is necessitated both on principle and on the clear reasons on this point offered by the House of Lords. The profit‑making enterprise was brought to a halt by the meeting with the Lake Winnipeg. Repairs due to the second incident were completed within the 27 days detention required by the first incident. The second incident did not therefore, have as a consequence a diminution in profit‑earning. Thus this further question in the determination of liability must be answered in the negative.
As was made clear above, the nature of the second casualty, be it tortious or otherwise, is irrelevant in this determination. It does not seem useful then, in focussing on the nature of the second incident, to characterize this case as a Carslogie‑type case as does my colleague McLachlin J, at p. 000 of her reasons:
The Carslogie, unlike The Haversham Grange but like the case at bar, was a case where the intervening event was not the act of another tortfeasor.
Such a characterization has little place in what is, in my respectful opinion, the proper analytical framework. At page 31 of his factum the appellant states:
. . . if the first casualty directly prevented the vessel from continuing her profit‑making venture and the length of the period of repairs arising from the first casualty exceeded that of any repairs resulting from any other cause, such as a second accident, then the detention and dry docking expenses fall upon the party responsible for the first accident, whether the second accident was caused by the fault of the ship owner, the fault of a third party or the fault of no one, such as heavy weather.
In my opinion, the appellant has, on the facts of this case, asserted a correct proposition of law, one that commends itself to me both on the cases and on principle. On my interpretation of the case law in reaching a result in this case, there is no need to "conjure up explanations aimed at reconciling the disparate results in The Haversham Grange and The Carslogie". When one adopts the view I take of the cases, in my opinion the result here is clear.
In summary, there is no causal link between the second incident and the loss of profit suffered by the owners of the Kalliopi L, such damage being merely coincidental. The Lake Winnipeg must, as a consequence bear the responsibility for the full 27 days detention in dry dock.
For the foregoing reasons, I would dismiss the cross‑appeal with costs, set aside the judgment of the Court of Appeal as regards the principal appeal and restore the findings of the trial judge, the whole with costs both in the Court of Appeal and in this Court.
//McLachlin J.//
The reasons of Gonthier and McLachlin JJ. were delivered by
McLachlin J. (dissenting in part) --
Introduction
This appeal involves a dispute over who should bear the losses resulting from the detention of a ship to repair the damage caused by two unrelated groundings. The respondents were found liable for the injury to the appellant's ship that resulted from their meeting in the Brockville Narrows section of the St. Lawrence. The repair of this damage would have taken 27 days. Before the repairs were made, the ship ran aground again in an unrelated incident, and suffered damage to another section of the hull. The repair of this injury would have required that the ship be taken out of service for the disputed 14 days. Repairs to the damage arising from both incidents were made some time later in Greece. Because the repairs were effected at the same time, the total time the ship was out of operation was 27 days -‑ the time it would have taken to repair the damage from the first mishap.
The issue on the appeal is whether the defendants are liable for the loss sustained as a result of the ship's being out of commission the whole period of 27 days, or whether the defendants are entitled to have deducted the 14 days which would have been required in any event to repair the damage caused by the second incident. The trial judge awarded the plaintiffs damages against the defendants for the full 27 days. The Federal Court of Appeal deducted the 14 days from this on account of delay attributed to the second incident. The plaintiffs appeal.
The defendants cross‑appeal alleging that the first incident was caused wholly or in part by the negligence of the plaintiffs.
Facts
The appellant, Sunrise Company Limited, is the owner of the Kalliopi L, a ship of approximately 16,000 tons and 585 feet. The appellant, Ceres Hellenic Shipping Enterprises Ltd., was the agent and operator of the vessel. The respondent vessel, the Lake Winnipeg, is a ship of approximately 19,000 tons and 828 feet.
On June 7, 1980, the Kalliopi L was travelling down the St. Lawrence Seaway, in transit from Thunder Bay, through Montréal, its final destination being the Black Sea. It was carrying a cargo of rye. The Lake Winnipeg was travelling upbound through the Seaway. There was evidence from an independent witness to the effect that the Lake Winnipeg was travelling in the centre of the channel. Downbound ships have the right of way, according to the Rules passed pursuant to s. 635 of the Canada Shipping Act, R.S.C. 1970, c. S‑9. As required, the appellant vessel had given notice of its location at a checkpoint, and this information was available to the respondent vessel.
When he saw the Lake Winnipeg the pilot of the Kalliopi L gave one signal blast, thus indicating a port‑to‑port meeting. This signal was acknowledged by the captain of the Lake Winnipeg but was not acted upon. When it became apparent that the Lake Winnipeg was not moving to the starboard (right) side of the channel, as it was required to do in order to avoid a collision, the pilot of the Kalliopi L moved further to his starboard side of the channel. As a result of being forced into the area adjacent to shore, the Kalliopi L became a victim of "bank suction". While trying to free itself from this interaction with the starboard (southern) bank the ship yawed across the river, ran aground on the northern side of the channel and sustained damage. The precise location at which the ship grounded was at the eastern end of Smith Island, near Brockville, Ontario. The ships met in the Brockville Narrows, an area which was described as dangerous by the trial judge, due to the channel's narrow width, a bend in the channel, a cross channel component in the current, and rocks. Visibility that day was excellent. While proceeding upbound to an anchorage area, the Kalliopi L sustained damages in a second grounding. The respondents were not involved in this incident.
The ship, while damaged by these two incidents, remained capable of making its planned, projected journey with its cargo across the Atlantic. After being unloaded, it was repaired in Greece. The total time for all repairs was 27 days ‑‑ the amount of time it would have taken to repair the damage arising from the first incident alone. Fourteen days of this period was also used for the repair of damage arising from the second incident. During this time, the owners incurred costs of dry docking the ship and suffered a loss of earning capacity. The allocation of these consequential losses is the subject of this appeal.
Judgments Below
Federal Court of Canada, Trial Division (Cullen J.)
The trial judge held that the Lake Winnipeg had every opportunity to avoid problems because it had warning of the presence of the Kalliopi L and it could have calculated how to avoid meeting in the Brockville Narrows. He held that the appellants were not in any way negligent in the situation and that the respondents were completely responsible for the collision. Having so held, he considered it unnecessary to deal with the issue of apportionmen