Alcan Aluminium Ltd. v. Unican International S.A.
T-1217-90
Nadon J.
14/6/96
68 pp.
Action for damages arising when ship Carrybulk failed to appear at Port Alfred to load plaintiffs' cargo of aluminum ingots for carriage to, delivery in Netherlands-Unican owner of Carrybulk-C.T.O. time charterer of Carrybulk-On January 19, 1990, Alcan Smelters entering into booking note contract with C.T.O. for carriage of 4,000 to 5,000 m.t. of aluminium ingots from ports of Port Alfred and Bécancour to Rotterdam where would be discharged into feeder vessels for carriage to Lebanon, Turkey with estimated arrival of April 18, 19, 1990-Intention to load 1,000 m.t. at Bécancour and 4,000 m.t. at Port Alfred-Booking note contract executed by C.T.O. "as Agents only" months after agreement concluded and by Alcan Smelters-Requiring Carrybulk to proceed first to Port Alfred and then to Bécancour, but Alcan Smelters agreeing to load Bécancour cargo prior to Port Alfred cargo-Provided for laycan dates of January 22 to 25, 1990, i.e. ship was to present self during these days failing which Alcan Smelters would have right to cancel booking note contract-When obvious Carrybulk unable to meet laycan days, Alcan not extending laycan days, but not cancelling booking note thereby waiving option to cancel booking note-After leaving Bécancour on January 31, 1990 C.T.O. ordering Carrybulk to proceed to Port Alfred-Encountering ice, engine problems-On February 1, C.T.O. ordering Carrybulk to return to Bécancour-Upon arrival in Bécancour C.T.O. learning engine problem not as serious as originally believed, but continuing with contingency plan i.e. loading Carrybulk with lumber belonging to another customer and portion of Port Alfred cargo transported to Bécancour by truck-Port Alfred cargo later loaded on Lady Franklin-Issues: (1) who are parties to contract; (2) whether plaintiff, defendant in breach of contract; (3) what was quantum of damages-(1) Only C.T.O. party to booking note contract with Alcan Smelters-Irrelevant that signed as agent-To bind Unican to booking note contract, authority, whether actual (express or implied) or apparent required-Representations, express or implied, made by principal will ground claim agent acting with apparent authority-Representations by agent alone not determinative of issue-No express or implied representations made by C.T.O. to Alcan Smelters to lead it to conclude C.T.O. acting as agent-Further no express or implied representations made by Unican-Alcan Smelters believing C.T.O. other party to booking note contract-No apparent authority allowing conclusion Unican bound to booking note contract-C.T.O. having neither express nor implied authority to enter into booking note contract on behalf of Unican-As Port Alfred cargo never loaded on Carrybulk Unican never party to any bill of lading contract-Cases dealing with effect of bill of lading issued on behalf of master or on behalf of owners of ship distinguished since Port Alfred cargo never loaded on Carrybulk, and as result Master of ship never issuing bills of lading in respect of cargo-Unican not carrier-Carrybulk under full control of C.T.O.-Only party to booking note contract C.T.O.-Unican not bound to contract of carriage evidenced by bill of lading-Action against Unican dismissed-(2) C.T.O. having no intention of ordering Carrybulk back to Port Alfred on February 2, 1990-Had C.T.O. any intention of sending Carrybulk to Port Alfred would have so advised Alcan Smelters-That Alcan Smelters chartered Lady Franklin on February 7, 1990 having nothing to do with C.T.O.'s decision not to send Carrybulk to Port Alfred-Time not of essence in booking note contract-When Alcan Smelters agreed to load cargo at Bécancour at end of January, 1990 and waived right to cancel booking note contract, Carrybulk had to proceed to Port Alfred "with reasonable despatch" and load Alcan Smelters' cargo-C.T.O. not intending to send Carrybulk back since bound for Europe with lumber cargo when departed Bécancour-Carrybulk not proceeding to Port Alfred with reasonable despatch-Requirements for anticipatory breach: (1) alleged breach must go to root of contract, i.e. must have effect of depriving party not in breach of substantially whole benefit of contract; (2) party to contract must indicate, expressly or by conduct, will not be able to perform contract when time comes for performance; (3) anticipated breach must be inevitable; (4) must be lack of justification for breaching party's contract-Requirements met herein-C.T.O.'s inability or refusal to carry Alcan Smelters' cargo going to very root of contract-C.T.O.'s conduct indicating to Alcan Smelters would be unable to perform contract-Thus breach anticipated by Alcan Smelters inevitable-No justification for C.T.O.'s inability to perform contract-Alcan Smelters, in making alternate arrangements to ship Port Alfred cargo, not breaching booking note contract, but correctly anticipating C.T.O. would not perform contract-Substitution clause, providing "carrier" shall be at liberty to carry goods to port of destination by said or other vessel or vessels, either belonging to carrier or others, possibly allowing carrier to substitute vessel for named vessel before beginning to perform contract, but not allowing carrier to substitute vessel where named vessel begun to perform under agreement-Since C.T.O. breached booking note contract counterclaim dismissed-Even had Court found in favour of C.T.O., counterclaim dismissed as, on evidence, proposed alternative ship unable to perform voyage-(3) Ordinary rule of mitigation that injured party acted reasonably in all circumstances-No loss recoverable in damages if party not in breach could have avoided loss with reasonable diligence-No evidence that unless Alcan Smelters shipped cargo around February 15, sales jeopardized-Even if plaintiffs establishing mid-February deadline, plaintiffs not justified in chartering Lady Franklin-C.T.O. not obliged to perform contractual obligations by February 15, but within reasonable period of time-Alcan Smelters not acting reasonably in chartering Lady Franklin under terms it did, since no evidence loss of business resulting if shipments not made by mid-February since letters of credit revealing latest shipment dates of March, April 1990 and, in any event, C.T.O. not agreeing to perform contract by deadlines invoked by plaintiffs-Plaintiffs should have accepted Jugo Navigator which would have been available during last week of February 1990-Plaintiffs' damages should be calculated on premise Port Alfred cargo should have gone on Jugo Navigator-Plaintiffs entitled to U.S. $42,473.78 based on tonnage of aluminium ingots that should have been shipped on Carrybulk, but which were not-Compound interest denied-Discretion to award compound interest should be exercised in favour of successful party when such award necessary to fully compensate plaintiff i.e. on basis of restitutio in integrum-Successful party must demonstrate loss not fairly compensated in damages without award of compound interest-Court not so persuaded.