Westcan Stevedoring Ltd. (Plaintiff)
v.
The ship Armar (Defendant)
Trial Division, Collier J.—Vancouver, Decem-
ber 5 and 20, 1973.
Maritime law—Action in rem by supplier of necessaries—
Liability of vessel and owners—Jurisdiction of Federal
Court—Federal Court Act, ss. 22(2)(m), 43(2).
The plaintiff brought an action in rem claiming $9,541.85
for stevedoring services requested of it by the charterers or
their sub-agents in connection with the loading of cargo on
board the defendant ship. The plaintiff contended that the
services were necessaries within the meaning of paragraph
22(2)(m) of the Federal Court Act for which the vessel or
owner is liable by virtue of reading paragraph 22(2)(m)
together with subsection 43(2) of the Act.
Held, the action is dismissed. Personal liability of the
vessel or the owner has not been proved. Prior to the
coming into force of the Federal Court Act, the Exchequer
Court on its admiralty side by statute had jurisdiction in
respect of claims for necessaries. Legislation enabled the
claimant to enforce his rights in rem but was dependent on
his establishing a liability on the owners, apart from statute.
The admiralty jurisdiction provisions of the Federal Court
Act do not alter the previous position; Parliament did not
intend to enlarge the liability of the vessel or owner or to
create a liability which did not in law exist prior to the
passing of the Federal Court Act.
The `Heiwa Maru" v. Bird & Co. (1923) I.L.R. 1 Ran
78; "The Tolla" [1921] P. 22; The Rochester & Pitts-
burg Coal and Iron Co. v. "The Garden City" (1902) 7
Ex.C.R. 34; The `David Wallace" v. Bain [1904] 8
Ex.C.R. 205; The Upson Walton Co. v. The "Brian
Boru" (1909) 11 Ex.C.R. 109; "The Sara" (1889) 14
App. Cas 209; "The Mogileff" [1921] P. 236; Coastal
Equipment Agencies Ltd. v. The "Corner" [1970]
Ex.C.R. 13, followed.
ACTION in rem.
COUNSEL:
L. M. Candido for plaintiff.
P. G. Bernard for defendant.
SOLICITORS:
Lawson, Lundell, Lawson and McIntosh,
Vancouver, for plaintiff.
Macrae, Montgomery, Spring and Cunning-
ham, Vancouver, for defendant.
COLLIER J.—The plaintiff claims $9,541.85
for stevedoring services requested of it in con
nection with the loading of cargo on board the
vessel Armar in February, 1973, at Harmac and
Port Alberni, British Columbia. To be more
precise, the plaintiff asserts it supplied gangs of
stevedores on the days and times referred to in
the evidence, but because of inadequacies in the
ship's gear which had to be corrected before
work could start at Harmac, and because of late
arrival of the vessel at Port Alberni, the steve-
doring gangs engaged by the plaintiff were, at
those times, in effect on "standby" and had to
be paid in any event by the plaintiff.
The basic facts are not really in dispute. The
essential question is one of law as to whether, in
the circumstances, the vessel and her owners
are liable to satisfy this claim which has been
brought in rem.
The Armar at all material times was under a
time charter to a Cuban organization, conven
iently referred to as "CUFLET". Gerald Lutz, the
office manager of the plaintiff, had been
informed the Armar was to arrive in British
Columbia in February to take on a cargo of
baled pulp. He was in communication with
CUFLET in Havana and gave a rate quotation for
loading services, to which, after some negotia
tion, CUFLET agreed. Mr. Lutz, who was a very
frank witness, said he understood CUFLET was
the charterer of the vessel. Subsequently, he
was advised by Mann Shipping Ltd. of Vancou-
ver the vessel was moving from Gold River to
Victoria and would be ready for loading. He
understood Mann Shipping Ltd. to be a sub-
agent of CUFLET, or an agent for Colley Motor-
ships Ltd. of Montreal. He understood Colley to
be the Canadian agent for CUFLET. As a result
of these various communications, the plaintiff
arranged for stevedoring gangs to be present for
the loading of the vessel at Harmac and Port
Alberni.
Mr. Lutz candidly admitted he never at any
time dealt with the owners of the vessel or the
master of the vessel in respect of the supplying
of these stevedoring services. He said his com
pany was not looking to the credit of the vessel
or her owners, but was supplying the services
on the credit of the charterers or their sub-
agents. The defendant (in this case, the owner
of the vessel) has raised several issues in
defence, but I propose to deal primarily with the
main contention, which is this: Assuming these
services to be in the nature of necessaries, the
liability, on the facts here, is that of the charter-
er or its agents, and not a liability of the vessel
or its owners; therefore this action in rem
cannot be maintained.
Counsel for the plaintiff, while conceding the
evidence shows that all dealings were with or on
behalf of the charterers, contends:
a) the services rendered were necessaries,
within the meaning of that term as used in
general admiralty law, or within the meaning
of par. 22(2)(m)' of the Federal Court Act,
and the vessel is therefore liable.
b) the effect of reading par. 22(2)(m) and
subsection 43(2) of the Federal Court Act
together is to impose liability on the vessel.
I do not find it necessary to decide whether
the stevedoring services contracted for, or ren
dered here, were necessaries within the general
meaning of that term as used in admiralty law. I
am prepared to assume, for the purposes of this
case, the services referred to were necessaries,
whether because of general maritime law or
because of the provisions of par. 22(2)(m).
Prior to the enactment of the Federal Court
Act, the law as to the liability of a vessel or her
owners for necessaries, in circumstances such
as those found here, is in my view best stated in
the "Heiwa Maru" v. Bird & Co. (1923) I.L.R. 1
Ran. 78. In that case, advances in respect of
necessaries were made solely on the credit of
charterers of a vessel. An action was brought in
rem and it was sought to make the vessel and
her owners liable.
Heald J. of the Appellate Civil Court said at
p. 87-88:
Necessaries supplied to a ship are of course primâ facie
presumed to have been supplied on the credit of the ship but
there is a passage in the judgment of their Lordships of the
Privy Council in the case of Foong Tai v. Buchheister (L.R.
App. Cas. (1908), p. 458) which shows that that presump
tion can be rebutted, and in the case of The Castlegate (L.R.
App. Cas. (1893), p. 38) Lord Herschell said that disburse
ments made by the master on account of the ship must be
limited to disbursements which he had a right to make on
the credit of the owners of the ship and did not extend to
disbursements made by him for purposes for which the
charterers ought to have made provision, even though in a
sense they might be said to have been made on account of
the ship.
May Oung J. said at p. 99-100:
If in the case under appeal the plaintiffs had been appoint
ed agents of the defendants, as the plaintiffs at first tried to
make out in paragraph 1 of their plaint, I should have to
consider whether the ruling in The Mogileff should not be
followed. But the plaintiffs found that their original position
was untenable and abandoned it. Their final position cannot
be placed higher than that they had a claim in personam
against Kader, a party other than the owners; this claim they
seek to enforce by an action in rem against the owners. In
my view such a remedy is not open to the plaintiffs.
It would seem therefore that though necessaries supplied
to a ship are primâ facie presumed to have been supplied on
the credit of the ship, this primâ facie presumption may be
rebutted by evidence of facts going to show that the person
who has supplied or paid for the necessaries looked for
payment to the person at whose instance he furnished the
supplies or advance monies, and not to the owner of the
ship.
Mr. Candido suggested in argument the "Hei-
wa Maru" and somewhat similar cases 2 ought
not to be followed. He contended that in the
marine and business world, services such as
those in question here were obviously rendered
for the benefit of the vessel or for the economic
success of the particular voyage, and the sup
pliers should therefore have the security of the
vessel in order to satisfy the outstanding claim 3 .
In my opinion, the principles previously stated
are not outmoded, but seem to me to be in
accord with general concepts of contract and
agency law. I think it too wide a proposition,
that suppliers such as the plaintiff invariably
look to or ought to have the credit of the vessel.
There may be sound business reasons for look
ing to the credit of others. In this case, Mr. Lutz
testified that his company, as a matter of prac
tice, did not usually look to the credit of the
vessel (where there were charterers). He said
his company did not normally wish to become
involved with owners or other third parties in
respect of payment for services arranged for by,
with, or on behalf of, charterers.
I therefore rule against the plaintiff's first
argument.
I turn now to the plaintiff's contention that
subsection 43(2) 4 and par. 22(2)(m) when read
together impose, on the facts here, a liability in
rem on the vessel or her owners. I understand
the submission to be as follows: Prior to the
passing of the Federal Court Act, liability in this
case was (for the purposes of this argument) on
the charterer alone. The intent of the provisions
of the Act referred to is to create a liability in
rem on the vessel or her owners, regardless of
what the liability in personam might be.
In my view, Parliament did not intend to
enlarge the liability of a vessel or her owners in
the factual situation which exists here, or to
create a liability on the vessel or her owners
which did not in law exist prior to the passing of
the Federal Court Act.
Analogous arguments have been advanced in
some earlier English decisions, in which similar
provisions of admiralty Acts in England were
considered. I cite as examples of those situa
tions: "The Tolla" [1921] P. 22; "The Sara"
(1889) 14 App. Cas. 209; "The Mogileff" [1921]
P. 236. See also Coastal Equipment Agencies
Ltd. v. The "Corner" [1970] Ex.C.R. 13. In
those cases, the history of admiralty jurisdiction
in respect of necessaries and master's disburse-
ments was, to varying degrees, reviewed. It was
held that the statutory provisions providing that
a suit for necessaries or master's disbursements
could be enforced by an action in rem did not
per se impose a liability on the vessel or her
owners. There first must be a personal liability
at law which by virtue of the legislation became
enforceable in rem.
To my mind, the same reasoning applies in
this case. Prior to the coming into force of the
Federal Court Act, the Exchequer Court on its
admiralty side by statute had jurisdiction in
respect of claims for necessaries. Legislation
enabled the claimant to enforce his rights in rem
but was dependent on his establishing a liability
on owners, apart from statute. In my view, the
so-called admiralty jurisdiction sections of the
Federal Court Act did not alter the previous
position.jiThe reasoning of Hill J. in "The Mogi-
leff" is apt. At pp. 242-243 he said:
Before coming to the sections and cases, it is well to
warn oneself, as one has often to do in this Court, not to be
misled by our habit of personifying the ship. We speak of a
ship being to blame, when we mean that some person is
guilty of negligence in relation to the ship. We speak of
advances to a ship, when we mean that money is lent for
ship's purposes to some person who becomes liable as
debtor. It is convenient to speak in brief of advances made
upon the credit of the owner as advances made upon the
credit of the ship. But it is an essential element of all
actionable claims for necessaries that there should be a
debtor liable in personam. This personal liability may or may
not be enforceable by proceedings in rem against the ship.
But a proceeding in rem is only machinery for enforcing a
right in personam. There is no such thing in a necessaries
case as an advance upon the credit of the ship detached
from the credit of some person who is personally liable as
debtor. As was said by Lord Watson in The Heinrich Bjorn
11 App. Cas. 270, 278: The whole provisions of the Act 3
& 4 Vict. c. 65 appear to me to relate to the remedies and
not to the rights of suitors. ... That enactment enables
every person having a claim of the nature of one or other of
those specified in s. 6 to bring an action for its recovery in
the Admiralty Court, but it cannot in my opinion have the
effect of altering the nature and legal incidents of the claim.'
Before any one can sue in rem for necessaries, there must
be a debt presently due to the plaintiff in respect of the
necessaries which are the subject of the claim. One who
supplies to a ship, upon the order of the master, necessaries
which it is not within the actual or apparent authority of the
master to order on the credit of the owner, has no right to
recover against the owner by any proceedings whether in
personam or in rem. A repairer who repairs the ship or a
tradesman who supplies stores upon terms of a deferred
payment—e.g., by taking a six months' bill—has no right to
recover in either form of action until the agreed period of
credit has expired. If he has bargained to be paid not in cash
but in kind or by a set-off, he cannot recover at all except
upon the special contract. These are only illustrations of the
principle that you cannot sue in rem for necessaries unless
at the date of the suit you could maintain an action of debt
in respect of the very subject matter of your claim.
The action is therefore dismissed, with costs.
"any claim in respect of goods, materials or services
wherever supplied to a ship for her operation or mainten
ance including, without restricting the generality of the
foregoing, claims in respect of stevedoring and lighterage"
2 See for example: "The Tolla" [1921] P. 22; The Roches-
ter & Pittsburg Coal and Iron Co. v. "The Garden City"
[1902] 7 Ex.C.R. 34; The `David Wallace" v. Bain [1904] 8
Ex.C.R. 205; The Upson Walton Co. v. The "Brian Boru"
[1909] 11 Ex.C.R. 109.
3 While it is not technically relevant to my decision, I
should point out the plaintiff has been paid by, or on behalf
of, the charterers for the actual stevedoring services ren
dered. The dispute centres over the so-called "standby"
services.
4 "subject to subsection (3), the jurisdiction conferred on
the Court by section 22 may be exercised in rem against the
ship, aircraft or other property that is the subject of the
action, or against any proceeds of sale thereof that have
been paid into court."
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.