Canadian Transport Company Ltd v Court Line Ltd
| Jurisdiction | England & Wales |
| Judgment Date | 03 May 1939 |
| Date | 03 May 1939 |
| Court | Court of Appeal |
Court of Appeal
Scott, Clauson and Goddard, L.JJ.
Court Line Limited v. Canadian Transport Company Limited
Brys and Gylsen Limited v. J. and J. Drysadle and Co. 1920, 4 LI. L. Rep. 24
Harris v. BestDID=ASPM (1892) 7 Asp. Mar. Law Cas. 272 68 L. T. Rep. 76
Time charter-party Charterers to load, stow, and trim cargo Under supervision of the captain
View of Greer, J. in Brys and Gyslen Limited v. J. and J. Drysdale and Co. (1920, 4 Ll. L. Rep.24) followed.
Decision of Lewis, J. reversed.
ASPINALL'S MARITIME LAW CASES. 283 K.B. Div.] COURT LINE LIMITED V. CANADIAN TRANSPORT tO. LIMITED. [CT. OF APP. COURT OF APPEAL. May 1, 2, and 3, 1939 (Before SCOTT, CLAUSON, and GODDARD, L.JJ.) Court Line Limited Canadian Transport Company Limited, (a) [This decision was affirmed by the House of Lords on 30th May, 1910.-En.] Time charter-party- Charterers to load, stow, and trim cargo-Under supervision of the captain-Improper stowage-?? for, paid by shipowners to bill of lading .??lders -Recoupment by shipowners' indemnity club -Owners to give time-charterers the benefit of club insurances-" So far as club rules allow " -Interpretation of rules. By clause 8 of a time charter-party: " The captain (although appointed by the owners) shall be under the orders and direction of the charterers as regards employment or agency; and 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. 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 franchise, according to the club ?? was a provision that the ship-owner was to bear the first 101. as between himself and the club. By rule 2 of the West of England Protection and Indemnity Association, of which the ship-owners were members: " The members are protected and indemnified as shipowners in respect of losses or claims arising without their actual fault or prio??, which they shall have become liable to pay and shall have, in fact, paid as follows . . ." There followed a number of paragraphs dealing with the head of "protection." Then the rule deals with " indemnity," and under sub-rule (i.) provides : " For other claims arising in resrect of the shipment, carriage, discharge or delivery of goods or merchandise arising through other causes than ' improper navigat on,' the intention being to mutually protect and indemnify the members against the negligence or default of their servants or agents, the Association shall be entitled . . . to recover for its own account from third parties any damages that may be provable by reason of such neglect." By rule 17 : " No assignment or subrogation by a member of his cover with this Association to chaterers or any other persons shall be deemed to bind this Association to any extent whatsoever." (a) Reported by C. G. MORAN, Esq., Barris??.-at-law 284 ASPINALL'S MARITIME LAW CASES. CT. OF APP] COURT LINE LIMITED V. CANADIAN TRANSPORT CO. LIMITED. [CT. OF APP. At a loading port, during the currency of the charter, unseasoned timber full of sap was stowed on and subsequently caused damage to parcels of grain shipped under bills of lading, to the extent of 101l. 3s. id. The holders of the bills of lading claimed this amount from the shipowners on the ground that the grain cargo Sad been damaged by reason of improper stowage. The shipowners' club paid the amount and the shipowners then claimed this amount from the time-charterers. Held by the court, that by the first half of clause 8, this liability fell upon the charterers. For the words " under the supervision of the captain " did not replace the liability on the shipowners. These words, at the most, entitled the captain to interfere with the stowage for the limited purpose of protecting the ship from that which would interfere with her seaworthiness. They had no operation in shifting the onus save possiblywhere the master'sinterference had been the cause of the improper stowage. View of Greer, J. in Brys and Gylsen Limited v. J. and J. Drysdale and Co. (1920, 4 Ll. L. Rep. 24) followed Accordingly, the ship owners could recover this amount from the time-charterers unless the words in clause 8 of the charter-party - o "Owners to give time-charterers the benefit of their protection and indemnity club insurances as far as club rules allow " prevented them. Held by Scott and Clauson, L.J J.-Goddard, L.J., dissenting-that rules 2 (1) and 17 did not allow the shipowner members to give the time-charterers the benefit of their club insurances. The club was, in all events, entitled by way of subrogation to enforce the shipowner member's rights of recourse against all third parties, including charterers. Per Goddard, L.J. dissenting: There was nothing in the rules which prevented the ship-owners giving the time-charterers the benefit of their dub insurances. Rule 2 (1) was no more than a statement of an insurer's common law right of subrogation, when he had paid his assured. But before a right of subrogation could arise there must be a claim which the assured could raise against a third party; here the assured, the shipowners, had no such claim against the time-charterers, for they had contracted with the time-charterers that they were to have the benefit of their club insurances and were entitled to do so. Rule 17 was merely a prohibition of the member assigning his contract of insurance. Decision of Lewis, J. reversed. APPEAL by the plaintiffs, shipowners, and cross-appeal by the defendants, time charterers, from a judgment of Lewis, J., affirming the award of an arbitrator on a case stated by him. The facts are fully set out in the judgment of Scott, L.J. Mocatta for the appellants. Sir Robert Aske, K.C., Cyril Miller and Richard Hurst for respondents and cross-appellants. Scott, L.J.-This is an appeal from Lewis, J., who gave his decision upon a special case stated by an arbitrator, Mr. Willink. The arbitration took place pursuant to, or by agreement between the parties in connection with a time charter of a vessel called the Ovington Court, dated the 28th January, 1037, by which the owners of that ship agreed to let her to time charterers for a round voyage from Rotterdam to the West coast of North America and back to Europe-that is, to load cargoes outwards and homewards. The time charter was the Government form of time charter in which the ordinary provisions of a time charter are inserted, and in particular a provision, very common in time charters, requiring the master to sign bills of lading as presented. At the loading port on the West coast of North America a grain cargo was taken on board and also timber stowed on the top of the grain cargo. The timber was un?? and full of sap, and the dampness of the timber caused damage to the grain. In the result, parcels of grain shipped under bills of lading were damaged to the extent of 101l. 3s. 4d. The holders of the bill of lading on this side on the return voyage claimed from the ship, and that claim was paid in full under circumstances which I will mention presently. Having paid that claim to the bill of lading holders, payable because the cargo had been damaged by reason of improper stowage, the shipowner then turned round and sought, under circumstances which I will detail in a moment, to enforce against the charterer the liability to indemnify the shipowner, which always arises where a shipowner incurs liability to bill of lading holders through signing a bill of lading at charterer's request, where the reason of the liability being incurred is some act done by the charterer which he is not entitled to do under the terms of the charter-party. That is the simple basis at the back of the arbitration which took place over this matter. But the form of the arbitration was not that. The form of the arbitration was complicated by another provision of the charter-party which brought in the protection and indemnity rights of the shipowner with the West of England Protection and Indemnity Association of which he was a member. Those rights were made material to the elucidation of the relations between owner and time charterer by a clause in the time charter (No. 8) which reads, so far as material, as follows : " The captain (although appointed by the owners) shall be under the orders and direction of the charterers as regards employment or agency ; and 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." Then comes another sentence after a full stop : " 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." When the owners received their claim from the bill of lading holders, they communicated with the West of England Club, and the club, to save unnecessary inconvenience, paid the claim direct to the bill of lading holders-a claim of 101l. 3s. 4d. In that way the owners incurred at that time no out-of-pocket expense. But the club, on making the payment, expected, as insurers, to have the benefit of subrogation to...
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