Canadian Transport Company Ltd v Court Line Ltd
| Jurisdiction | England & Wales |
| Judge | Viscount Maugham,Lord Atkin,Lord Wright,Lord Romer,Lord Porter |
| Judgment Date | 30 May 1940 |
| Judgment citation (vLex) | [1940] UKHL J0530-1 |
| Date | 30 May 1940 |
| Court | House of Lords |
[1940] UKHL J0530-1
Viscount Maugham
Lord Atkin
Lord Wright
Lord Romer
Lord Porter
House of Lords
After hearing Counsel, as well on Thursday the 4th, as on Monday the 8th, days of April last, upon the Petition and Appeal of The Canadian Transport Company, Limited, of Metropolitan Building, in the City of Vancouver, British Columbia, in the Dominion of Canada, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of His Majesty's Court of Appeal, of the 3d of May 1939, might be reviewed before His Majesty the King in His Court of Parliament, and that the said Order might be reversed, varied, or altered, or that the Petitioners might have such other relief in the premises as to His Majesty the King, in His Court of Parliament, might seem meet; as also upon the printed Case of The Court Line, Limited, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of His Majesty the King assembled, That the said Order of His Majesty's Court of Appeal, of the 3d day of May 1939, complained of in the said Appeal, be, and the same is hereby, Affirmed, and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellants do pay, or cause to be paid, to the said Respondents the Costs incurred by them in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments.
My Lords,
I have had the advantage of reading the opinion of my noble and learned friend Lord Atkin on this Appeal. As regards the first point, that since the duty of the charterers to stow was expressed to be "under the supervision of the captain" the responsibility for stowage was thrown upon the shipowners, I have had no doubt, nor I believe have any of Your Lordships. The contention is clearly an ill-founded one for the reasons given by my noble and learned friend.
As regards the second point which arises on the true construction of that part of Clause 8 of the charter-party which provides that the owners are to give to the charterers the benefit of their Protection and Indemnity Club insurances "as far as club rules allow," taken in conjunction with the club rules, I must confess that I have felt considerable doubt. The club rules, particularly Rule 2 and Rule 17, seem to me to present almost insoluble problems of interpretation, and a judicial mind must recoil from applying to the construction of written documents the principle of mere conjecture. On the whole I think the solution adopted by my noble friend is the best solution which the case admits of, and I concur with what he has said on the point.
I therefore agree with the order of the Court of Appeal and am of opinion that this Appeal should be dismissed.
My Lords,
This Appeal arises on a special case stated by the sole arbitrator on a claim by the Respondents the owners of the s.s. "Ovington Court" against the Appellants the charterers of the ship on time charter for damages for improper stowage. The charter party is dated 28th January, 1937, and though it is in time charter form it is for the hire of the ship for a voyage from Rotterdam to the North Pacific and return to the United Kingdom or Continent. The ship apparently proceeded to Vancouver and there loaded a cargo in respect of which the present claim arises. The special case is particularly niggardly of facts. It does not state from what port the ship sailed or at what port she arrived; it does not state the nature of the cargo, except that some was wheat in bulk, or how the damage arose. It does not annex the Bills of Lading upon which the owners' original liability arose. None of these particulars is in fact essential for determination of the case; but it is unusual to have to decide a commercial case such as this without being able to satisfy ones ingrained curiosity about them; and the learned arbitrator may be congratulated upon having achieved a degree of abstraction which is certainly rare and perhaps admirable.
By Clause 8 of the charter party "… the charterers are to load stow and trim the cargo at their expense under the supervision of the captain who is to sign Bills of Lading for cargo as presented in conformity with Mates' or Tally Clerks' receipts." By Clause 24 the charter was expressly made subject to the terms of the Carriage of Goods by Sea Act of the United States, 1st April, 1936, and the Canadian Water Carriage of Goods Act, 1936. On arrival at the port of discharge wherever it was a claim was made by holders of Bills of Lading of wheat in bulk against the shipowners for damage to the goods. The damage was due to improper stowage. The case finds that the owners were liable to pay to the receivers under the Bills of Lading £101 3s. 4d. We are not told why, but if as we were informed the ship loaded at Vancouver, presumably the liability arose under Article III 2 of the rules under the Canadian Water Carriage of Goods Act which correspond to those in the English Carriage of Goods by Sea Act, 1924. 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 the provisions of 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 his 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 they might 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; any more than the stipulation that a builder in a building contract should build under the supervision of the architect relieves the builder from duly performing the terms of his contract. This view of the clause is supported by the decision of Lord Fairfield (Greer J., as he then was) in Brys & Gylsen Ltd. v. J. & J. Drysdale & Co. (1920) 4 Lloyd's List Rep. 24. It is true that the judge does not refer to the words "under the supervision of the master" which were in the relevant clause; but this seems to me all the more significant. It is obvious that that very experienced judge attached no importance to the words as affecting the liability of the charterers arising from their contract "to provide and pay a stevedore to do the stowing of the cargo under the supervision of the master." The charterers were held liable for dead freight due to faulty stowage by the stevedore. This defence fails.
The second defence also arises under Clause 8 of the charter party "owners to give time charterers the benefit of their Protection and Indemnity Club Insurances as far as club rules allow, and in case of shortage or damage to cargo charterers to bear the franchise according to the club rules which owners would have otherwise borne." The shipowners were members of The West of England Steam Ship Owners Protection and Indemnity Association, Ltd., the rules of which are annexed to the case. Under rule 2 the members are protected and indemnified in respect of losses or claims which they are liable to pay for (i) claims arising in respect of the shipment, carriage, discharge or delivery of goods arising through other causes than improper navigation. The association therefore accepted the liability in respect of the Bill of Lading owners' …. claim, paid them direct the amount of this claim, and are putting forward the present claim in the name of their member by virtue of their right of subrogation. The charterers in effect say to the shipowners "You have promised to give me the benefit of your insurance. You have either received or are entitled to receive the £101 due to the Bill of Lading holders from your insurers, or they have paid the Bill of Lading holders direct. In any case we don't get the benefit of your insurance if we have to pay you; and if indeed we were to pay you you would have to hand over to us the amount you received from your insurers or were entitled to receive from them." I myself have had much difficulty in appreciating what the clause really means. It cannot mean that the owners are to hold the charterers covered against the same risks as those against which the association hold the owners covered. It cannot extend to losses which the owners incur but not the charterers: to losses which the charterers incur but not the owners. But I suppose it may refer to losses which the owners incur by reason of a default by the charterers as in the present case. But in such a case it is obvious that the owners are destroying any right of subrogation which the insurers would have against the...
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