Topic One Seaworthiness and Common Venture, chapter 15
HK Fur Shipping Co. Ltd. v. Kawasaki Kisen Kaisha Ltd 1962—cb p24
Issue: whether the obligation of seaworthiness is a condition or warranty
Ratio:
- Unless provided for expressly in the K, the legal consequence of a breach does not follow automatically from a prior classification of the undertaking as a “condition” or a “warranty”, but depends on the nature of event to which the breach gives rise (intermediate/innominate/indeterminate).
2. A condition is a term, the failure to perform which entitled the other party to treat the contract as at an end. A warranty is a term, breach of which sounds in damages but does not terminate, or entitle the other party to terminate the K. An innominate or intermediate term is one, the effect of non-performance of which the parties expressly or impliedly agree will depend upon the nature and the consequences of breach. (another case, “bunge” case, cb p27)
3. Unseaworthiness is not by itself such a breach of a charterparty as to entitle the charterers to treat the charterparty as thereby repudiated by the shipowners.
- Seaworthiness is neither a warranty nor a condition, it is an indeterminate contractual undertaking, one breach of which may relieve the charterer of further performance of his undertakings if he so elects, and another breach of which may not give rise to such an event but entitle him only to monetary compensation in the form of damages.
Bunge Corp v. Tradax Export S.A., Panama 1981,
Issue: whether failure of complying with the K, giving notice of probable readiness of the vessel, gives the other party the right to repudiate the K
Ratio:
1. English law recognizes contractual terms which, upon a true construction of the contract of which they are part, are neither conditions nor warranties but are “intermediate”. The question is the construction of the stipulation and the K of which it is a part.
2. Time is considered of the essence in “mercantile” contract
3. It makes commercial sense to treat the clause in the context and circumstances of this K as a condition to be performed b/f the seller takes his steps to comply with the bargain.
4. definition of “condition” and “warranty”—p27, see the definitions above
Topic Two: The Contracts of Carriage, chapter 9
Pyrene v. Scindia—p35
Issue:
1. when the risk passes
2. could the carrier rely on the limitation of liability clause incorporated in the b/l
Ratio:
- Carriage of goods covers the period from the time when the goods are loaded on to the time when they are discharged from the ship (tackle to tackle).article 1. HW, in the K of sale FOB, the risk passes from the seller to the buyer when the goods pass the rail of the ship.
- whenever a K of carriage is concluded and it is contemplated that a b/l will be issued, that K is from its creation “covered” by a b/l.—p38
- explanation of “loading” to include the whole process of loading instead of the particular action of movement itself.
Anticosti [SCC] 1959—p42
Issue: when the b/l filled out but not issued, whether a K of carriage by water of a motor truck was or was not “covered” by a b/l contained in the schedule to the Water Carriage of Goods Act
Ratio: the K was for the carriage to be made under the terms of a b/l, because the b/l is contemplated. Therefore, the liability of the defendant must be limited to $500.
Mediterranean Marine v. Clark [US] 1980—p44
Issue:
- whether there was an outstanding b/l which extended the COGSA $500 limitation of liability
- whether the metal shear, as mounted on the wooden skid, constituted a “package” under COGSA
Ratio:
1. the deck receipt incorporated “all” conditions of American Export’s “usual form” of b/l. No b/l issued, but the Hague Rule applies.
Topic Three: Application of the Hague and Hague/Visby Rules—chapter 1,2
Canastrand Industries Ltd. v. The Lara S [Federal Court of Canada] 1993—p100
Issue:
1. the cause of the damage and specifically whether it arose as a result of insufficient packaging
2. whether the defendants and which of them were “carriers” under bl
3. whether the shipowner could be held liable in tort
4. whether the defendants Kim-nav and kim-sail had a valid defence based on expiracy of the limitation period
5. the value of the damages suffered by the plaintiff------p100
6. conflict of laws: Canadian of US law applies
Ratio:
1. contract
2. because the foreign law is not proved, the Canadian law apply.
3. general measure of damages
conflict of laws—contractual terms stipulating two different choice of law regimes—contract evidenced by bl to be construed and governed by American law—bl subject to Cogsa—booking note and bills of lading representing in substance single contract—choice of law provision found in carrier’s long form bl should prevail—no operational distinction between defendants kim-sail and kim-nav—both liable as carriers under bl—Canadian and American authorities as to liability of shipowner reviewed—Canadian law applicable as appropriate foreign law not proved—shipowner liable as carrier under Hague Rules
torts—negligence—whether carriers under bl liable in tort for negligent stowage—defendant responsible for foreseeable damage caused to plaintiff----catchwords at p100
“in case of possible alternative interpretations of conflicting provisions, one must give priority to that which was adopted last. Since the kimnav bl were issued later than either the booking note or the charterparty, the choice of law provision found it its long form bl should prevail---p100”—thf us law should apply but because it is not proved, Canadian law applies.
“under Canadian law, the shipowner would be liable as a carrier since the vessel was not under a demise charter and the bl were signed on behalf of the master. Carriage of goods is a joint venture of owners and charterers who should therefore be held jointly and severally responsible as carriers.”—p101
“the amendment adding kimnav was not the substitution of a new party after the limitation period has expired, but merely a clarification of the identity of the defendant”—101
“the arrived sound market value minus admv is the proper test to assess these damages”
“the logic of holding both the shipowner and the charterer liable as carriers seems entirely reasonable under a charter such as that which exists in this case---professor tetley’s argument cited—p111.”
-“under hague and hv, the person who issues the bl contracts both on his own behalf and oon behalf of the other persons who have responsibilities under the hague rules—the contracting carrier contracts in a dual capacity—as principal and as agent. The bl is usally signed by the master or on his behalf, and such a bl normally binds the owner for whom the master acts. The only exception is the master is employed directly by a demise charterer.----when a time or voyage charterer signs as agent for the master, the owner is still bound. This seems to be true even when the name of the charterer appears in the heading of the bl, as was held by the supreme court of Canada in paterson ss. Ltd v. aluminium co. this is also the position taken by Brandon J. in the Berkshire and the Supreme Court of Canada in the Evie W.----carriage of goods is effectively a joint venture of owners and charterers, except in the case of a bareboat charter, and, consequently, they should be held jointly and severally responsible as carriers”----cb 111
measure of damages: “it is agreed that the asmv of the goods was $20 per bale. The 3429 heavily damaged goods were put out for salvage sale. The highest of the few responses which came in, offered less than 13000 for the bales. The plaintiff bought the bales from its insurer for 5 per bale. The plaintiff claims 15 per bale as compensation, i.e., asmv less admv.” Plus surveying fees and handling fees. interests
Canadian Klockner v. D/SA/S [Canadian federal ct trial division, 1973]—p81
Facts: identity of carrier clause, ship owned by first def, managed by second, and chartered to the third (federal commerce and navigation co. ltd.) bl issued by third def for and on behalf of the master. Ship discharged on sept. 27, 1968, ppl sued on june 1, 1970
Issues:
Whether limitation period extended, whether cl. in bl lessing carriers’ liability void—Hague rules, art. Ii68
Held: judgment against the third def and for the first and second def.
Ratio:
1. on evidence the third def estopped from denying that they had granted an extension of the time for bringing an action, until June 6, 1970. so action against them was not time barred. The first and second def no such grant and relieved thanks to the one year period.
2. identity of carrier clause void
3. “Bullock Order”. It is proper to make such an order where, in the opinion of the court, it was reasonable, in all the circumstances, for the ppl to sue all the parties which it did sue. This position was one which the ppl was entitled to take at trial and to try to prove by evidence at trial and that plaintiff should not be penalized in costs bc of its failure to establish this position at trial. Mr. Justice Heald: “I direct that the ppl be allowed to add to its costs against the defendant federal commerce(3rd), any and all costs which are taxable against it by the defendants flint and ubon.(1st and 2nd.)”—pp85
Aris steamship v. associated metals & minerals. [sc of can. 1980]—86
Time charter-party, bl signed by captain
Captain contracts on behalf of owner, not on behalf of charterer.—see p88????
Glynwed steels ltd. Plaintiff, v. great lakes et.al. def.[1979amc]—p92
Under cogsa either the shipowner or the time charterer may be the carrier, depending on who entered into the k of carriage with the shipper where charterer’s bl nowhere mentioned the shipowner, the latter may not be held liable in personam for cargo damage, for cogsa precludes the application of any third party beneficiary doctrine treating cargo claimants as beneficiaries of the shipowner’s warranty of seaworthiness to the charterer.—art. Iii8 doesn’t allow that.
Canficorp appellant v. cormorant bulk, carriers, 1985 amc –p93
Time charterer sued shipper to enforce latter’s undertaking to indemnify it for any delay in discharging at Kuwait resulting from shipper’s representation that the cargo was not “in transit” to iraq.
Def’s undertaking was supported by consideration, and ppl was the “carrier” entitled to enforce it despite “identity of carrier” clause stipulating that bl was a k with the owner of the vessel.
Topic 4: Whom to Sue (who is the carrier), ch.10
The Berkshire [queen’s bench 1974]—p66
Facts: goods shipped under time charter made bw charterers and defendants. From Houston, texas to Massawa. (a port in aisaiebiya) Demise clause. Exclusion clause: “this carrier in making arrangements for any transhipment…shall be considered solely the forwarding agent of the shippers and without any responsibility whatsoever…”
Issue:
1. whether bl evidenced k bw shipowners and shippers
2. whether shipowners liable for damage to goods occurring after transhipment
3. whether shipowners entitled to rely on exclusion clause in bl.
Held: judgment for second plaintiff receiver.
Ratio:
1. bl contained or evidenced a k bw the shippers and the shipowners (the time charterers had authority to sign on behalf of the shipowners), and not bw shippers and charterers, so receivers entitled to sue shipowners upon k.---judge gave effect to the demise clause
2. the exception clause did not give shipowners right to discharge goods at Jeddah and forward them by transhipment in another vessel to massawa. By doing so shipowners were in breach of k.
3. by discharging the goods at Jeddah and transhipping them into another ship not owned or operated by them the shipowners made a fundamental departure from the method of performing the contract contemplated by the parties at the time it was made, and the shipowners were therefore prevented from relying on the exception in clause a “carrier shall not be liable for …while goods are not in the actual custody of the carrier”
obiter dictum: “I hold that the k contained in or evidenced by the bl purports to be a k bw the shippers and the shipowners, andnot one bw the shippers and the charerers”—p68
Paterson Steamships ltd. V. Aluminum co. of Canada [SCC, 1951], p71
Fact: Ship time-chartered. Bl signed by shipowner’s agent on behalf of the master. Cargo lost owing to unseaworthiness. Holder of bl sued as owner and consignee. Appellant contended not bound by the k evidenced by the bl, and there was no privity of contract as bw the parties.
Whether owner of ship liable for cargo lost at sea.
Held: dismissing the appeal, that the charter party was not a demise of the ship and the appellant was the carrier of the goods; the respondent was the owner and consignee of the goods was entitled to sue upon the bl.
“for the purpose of committing cargo to carriage, the captain, the charterer and the ship’s agent are all agents of the owner, acting in the name of the captain. Where the charterer has the authority to sign for the captain, that he may appoint and act by an agent would seem to me to be unquestionable. To hold him to a personal performance would, under modern conditions of traffic, be an intolerable restriction”--p71
Delano co. of America plaintiff v. saguenay terminals defendant. [Canada, 1965]—pp78