A-57-73
Jasmin Construction Inc. (Appellant) (Respond-
ent in Cross-Appeal)
v.
Resolute Shipping Limited (Respondent) (Appel-
lant in Cross-Appeal)
Court of Appeal, Jackett C.J., Pratte J. and
Hyde D.J.—Montreal, September 26; Ottawa,
December 13, 1974.
Maritime law—Contract for carriage of goods by water—
Fixed price—Excess of weight about 30% more than stipu
lated in contract—Whether breach of contract—Amendment
of statement of claim to include claim for damages because
of inaccurate information—Counterclaim and cross-appeal
for alleged damages to cargo—Federal Court Rule 1104.
Appeal from a judgment of the Trial Division maintaining
an action on a breach of contract for the carriage by the
respondent of 14 mobile medical units from the Port of
Quebec to the Ports of Broughton Island North West Terri
tories and Clyde River, Baffin Island North West Territories
aboard the vessel Tavastland. The action was based on
costs incurred by the respondent as a result of an increase in
weight of the cargo by about 30% more than the weight
estimated by the said respondent which was the basis for
making the fixed price offer for the transportation opera
tion. The respondent also claimed for a toll charge for top
wharfage of $110.61 owing to the National Harbours Board
and $1,000 expended on insurance because of the failure of
the appellant to supply a letter of credit.
The appellant counterclaimed for $2,707.61 being the
amount suffered in damages by the fall overboard of one of
the units at the time of loading.
The Trial Judge assessed the additional expenses incurred
by the respondent at $24,722.88 as a result of the excessive
weight of the cargo and allowed the claim on the basis of
unjust enrichment. He also allowed the claim for top wharf-
age and the insurance. On the appellant's counterclaim the
Trial Judge allowed only one-fourth to the appellant because
of negligence of the crane operator and three-fourths to the
respondent because of appellant's negligence in giving inac
curate information as to weight of the cargo.
Held, allowing the appeal, the Trial Judge erred in basing
the claim on unjust enrichment when the action was found
ed on breach of contract. In delivering the cargo on the dock
near the respondent's ship, the appellant performed one of
its obligations under the contract and the fact that both
parties were mistaken as to the weight did not constitute a
breach of contract on the part of the appellant. Although an
amendment to the statement of claim was allowed under
Rule 1104 of. the Federal Court Rules which permitted a
claim for damages in tort against the appellant for the giving
of inaccurate information on the weight of the cargo, the
action must fail since the evidence shows that both parties
were aware that the weights were only approximate weights;
there was no undertaking on the part of the appellant to pay
any additional charges and the respondent carried the cargo
at its own risk in determining to enter into that contract. The
Trial Judge's decision as to top wharfage charge and insur
ance charge should not be disturbed.
As to the counterclaim, the fall of the unit at the time of
loading was caused exclusively by the respondent's negli
gence in not ascertaining the weight of the units before
loading them or using a crane powerful enough to lift
weights heavier than those mentioned.
APPEAL.
COUNSEL:
Denis Rousseau for appellant (respondent
in cross-appeal).
W. David Angus for respondent (appellant
in cross-appeal).
SOLICITORS:
Rousseau & Charbonneau, Quebec, for
appellant (respondent in cross-appeal).
Stikeman, Elliott, Tamaki, Mercier & Robb,
Montreal, for respondent (appellant in
cross-appeal).
The following are the reasons for judgment
delivered in English by
JACKETT C. J. AND PRATTE J.: This is an
appeal from a judgment of the Trial Division
[not reported, T-3922-71] in favour of the
respondent for $25,833.49 with interest and
costs, and both an appeal and cross-appeal
against a judgment of the Trial Division allow
ing the appellant $676.90 with interest and costs
on a counterclaim, "which amount" the judg
ment provided "can be set off against the
amount awarded plaintiff in the principal
action".
The principal action was for breach of con
tract and the statement of claim reads, in part,
as follows:
1. During the month of August 1971, Defendant approached
Federal Commerce and Navigation Company Limited (here-
inafter referred to as Federal), as duly authorized agent of
Plaintiff, for the carriage by Plaintiff of fourteen mobile
medical units from the Port of Quebec, Province of Quebec,
to the Ports of Broughton Island, North West Territories,
and Clyde River, Baffin Island, North West Territories, on
board the vessel TAVASTLAND, operated by Plaintiff;
2. Negotiations were entered into and an agreement con
cluded, the agreement between Plaintiff and Defendant
being reflected in telexes dated August 27, 1971 and Sep-
tember 2, 1971, and in a letter dated September 7, 1971, all
three documents being produced herewith as Exhibit P-1 as
if herein recited at length;
3. Plaintiff has fulfilled each and every one of the obliga
tions undertaken by it in the said agreement, and in particu
lar and without restricting the generality of the foregoing
Plaintiff duly carried Defendant's cargo to and delivered it
in good order and condition at the said Ports of Broughton
Island and Clyde River, North West Territories;
4. Defendant, on the other hand, has substantially breached
the said agreement, said breaches having caused Plaintiff
considerable prejudice and damages;
5. Without limitation of the generality of the foregoing,
Defendant has breached the said agreement in that:
(a) The mobile units presented for shipment by Defendant
weighed considerably more than the weights as stipulated
and represented by Defendant to Plaintiff during the
period when the contract of carriage was negotiated and
agreed;
(b) Defendant failed to present the cargo for shipment
and loading during normal working hours on the agreed
date;
(c) Defendant failed to furnish a letter of credit in accord
ance with the said agreement;
(d) Defendant failed to insure the cargo in accordance
with the said agreement;
(e) Defendant has refused to remit to Plaintiff the amount
claimed for top wharfage, the whole in accordance with
the custom of the trade and with the said agreement;
6. As a result of Defendant's breach of contract, Plaintiff
has suffered a loss of at least $36,787.18 detailed as
follows:
(a) Extra costs in receiving cargo after hours $ 898.11
(b) Top wharfage 185.58
(c) Insurance 1,000.00
(d) 3 days extended loading time due to over
weight of the units 8,550.00
(e) Extra expenses for crane equipment and
labour as a result of the overweight of the
medical units 11, 603.49
(f) Special survey resulting from the over
weight of the said units 300.00
(g) Lost time during the voyage and lost time
at Broughton Island due to the overweight of
the said units 14,250.00
TOTAL $36,787.18
7. At all times material hereto, Federal was acting solely as
agent of Plaintiff, Plaintiff being the principal, the carrier
and the operator of the vessel TAVASTLAND;
On the appeal, the respondent was given leave
to amend by adding the following paragraph:
10. Furthermore, and under reserve of the foregoing, Plain
tiff states that Defendant is legally liable in delict (tort) to
pay to it the aforesaid sum of $36,787.18 in that Defendant,
as a result of its negligence, want of skill, imprudence and
fault, provided it with inaccurate information as to the
weight of the aforesaid 14 units and failed to provide a letter
of credit.
The counterclaim is for $2,146.89 for failure to
deliver in good order the goods that were the
subject matter of the contract referred to in the
statement of claim.
The facts are not really in dispute in their
essential details.
In early August, the appellant and the
respondent were negotiating a contract along
the general lines represented by a telex dated
August 6, 1971, from the respondent's parent
company to the appellant reading as follows:
[TRANSLATION] IT IS AGREED BETWEEN MESSRS JASMIN CON
STRUCTION INC., SHIPPERS, AND FEDERAL COMMERCE AND
NAVIGATION CO. LTD., AGENT FOR MESSRS RESOLUTE SHIP
PING LTD., SHIPOWNERS, THAT THE AFOREMENTIONED PAR
TIES UNDERTAKE THE FOLLOWING:
1. THE SHIPPER TO MAKE AVAILABLE, AND THE SHIPOWNER
TO CARRY, THE FOLLOWING CARGO:
14 HOUSE TRAILERS OF THE SIZES DESCRIBED BELOW:
12 UNITS 52 FEET LONG
12 FEET WIDE
14 FEET HIGH
2 UNITS 52 FEET LONG
8 FEET WIDE
14 FEET HIGH
(HEIGHTS EXCLUDING WHEELS, WHICH MAY BE REMOVED
WITHOUT DIFFICULTY AT THE OPTION OF THE SHIPOWNER)
TWO UNITS WEIGH 30,000 LBS AND THE TWELVE OTHERS
ABOUT 20,000 LBS EACH.
WITH THE UNITS ARE INCLUDED ABOUT THIRTY TONS OF
BUILDING MATERIALS WHICH THE SHIPOWNER MAY USE FOR
TRIMMING, BUT THE LENGTHS OF WOOD SHALL UNDER NO
CIRCUMSTANCES BE CUT.
2. THE SHIPOWNER SHALL TRANSPORT ALL UNITS ON THE
DECK OF THE M.V. "TRULELAND", BRITISH REGISTRY AND
CLASSIFIED "LLOYDS ICE CLASS 1"
3. APPROXIMATE DATES OF LOADING: SEPTEMBER 15, 1971.
4. FREIGHT PAYABLE BY THE SHIPPER TO THE SHIPOWNER
C.C. $14,000 (FOURTEEN THOUSAND DOLLARS) PER UNIT ON
A MINIMUM FOURTEEN UNITS.
5. THE SHIPPER SHALL DELIVER THE UNITS TO THE WHARF
AT QUEBEC CITY; THE SHIPOWNER SHALL LOAD AND DELIVER
SEVEN UNITS TO THE SITE AT BROUGHTON ISLAND AND
SEVEN UNITS TO THE SITE AT CLYDE RIVER, BAFFIN ISLAND,
AT WHICH LOCATIONS THE SHIPPER WILL USE A BULLDOZER
WITH THE NECESSARY ATTACHMENTS TO REMOVE THE UNITS
FROM THE BARGES.
6. NO INSURANCE ON THE VESSEL, EVEN IF INCURRED ON A
VOYAGE TO THE AFOREMENTIONED LOCATIONS, SHALL BE
PAYABLE BY THE SHIPPER.
7. THE SHIPPER SHALL BE RESPONSIBLE FOR ALL INSURANCE
PREMIUMS REQUIRED ON THE CARGO FROM THE WHARF AT
QUEBEC CITY TO THE SITES AT BROUGHTON ISLAND AND
CLYDE RIVER.
The information contained in this telex about
the weights of the objects to be carried was
obviously a matter of special concern to the
respondent, which company was negotiating a
contract to carry some very large objects as
deck cargo on one of its vessels. Helge Tomter,
Commercial Manager for the respondent, had
been away from Montreal during the first half
of August and he testified, concerning the time
after his return, as follows:
Q. Could you tell the Court as much as you can about
weights, your efforts to find out about the weights and
what you were told and who you were dealing with at
the Defendant Company?
A. Yes. We felt that it was important that we should get
more information about the weights; the term "approx-
imately" we don't like it very well, and we found it
was an important factor to have established as much
as possible. In the end of August, one of the super-
cargoes, Captain Kuyper, and myself—well, I should
say that in the interim we had been in touch with
Jasmin Construction, Mr. Proulx, and we asked repeat
edly for the exact weight for each unit, and the impres
sion we had been left with was that these weights were
not, would not be available to us—
Mr. Tomter was sufficiently concerned about
the weights at that time that he ascertained from
the appellant the name of the company that was
supplying the objects in question, which was a
company called "Treco" in Quebec City, and he
obtained permission from the appellant to go to
Treco's premises to "inspect" the units. He and
a Captain Kuyper thereupon went to Quebec on
August 31, 1971, where they spoke to the Vice-
President of the supplier company who showed
them the objects in question. His evidence
about his inspection of them is as follows:
They were all boarded up. All the doors and windows
were surrounded with plywood sheets, and Captain
Kuyper and I proceeded to verify the dimensions by
actually a measuring tape. And then the next question,
of course, was: "What do these units weigh?" We
were told by Terco [sic] that the dimensions, they
could see no way this could be done on public scales
because of the location of the public scale in Quebec
area, and that really the, the, the, if anybody was
interested in the weight, this would be up to the
shipper, Jasmin Construction. They then referred us to
Jasmin Construction, that if Jasmin Construction
wanted to make the necessary arrangements for having
the units weighed before shipment, well, this would be
up to them, whatever means they could find available.
BY THE COURT:
In other words, the manufacturers claimed they had no
knowledge of what they would weigh?
BY THE WITNESS:
No, they said the weights were "approximately".
This visit resulted in the respondent returning to
the appellant about the question of weights and
Mr. Tomter describes the resulting discussion
with the'appellant as follows:
Q. Fine, so the next day did you go back to Jasmin?
A. We went back to Montreal and we got in touch with
Jasmin and we told them that we were leery about
these units, that they were of course higher than a
normal prefabricated house in that they had this, about
four (4) feet crawler space in the bottom which con
stituted a sort of a basement, and we told Jasmin that
we would like for them to make the arrangement of
having them weighed, to have the weight verified. It
was Mr. Proulx we were talking to, I was speaking to
about this, and Mr. Proulx took this very lightly, I
would say; he smiled and said: "Don't worry about it.
These weights are probably much less than these
weights we have indicated to you. These are maximum
weights." And that we had nothing to worry about.'
' Mr. Proulx was heard as a witness and he denied having
ever given any such assurance. Both he and Mr. Jasmin
testified that they had indicated that the weights of 30,000
and 20,000 were approximate weights.
In the meantime, on August 27, 1971, the
respondent had sent to the appellant a telex
reading, in part, as follows:
[TRANSLATION] IT IS AGREED BETWEEN MESSRS JASMIN CON
STRUCTION INC., SHIPPERS, AND FEDERAL COMMERCE AND
NAVIGATION CO. LTD., AGENT FOR MESSRS RESOLUTE SHIP
PING LTD., SHIPOWNERS, THAT THE AFOREMENTIONED PAR
TIES ABSOLUTELY UNDERTAKE:
1. THE SHIPPER TO MAKE AVAILABLE, AND THE SHIPOWNER
TO CARRY, THE FOLLOWING CARGO:
14 HOUSE TRAILERS OF THE SIZES DESCRIBED BELOW:
12 UNITS 52 FEET LONG
12 FEET WIDE
14 FEET HIGH
2 UNITS 52 FEET LONG
8 FEET WIDE
14 FEET HIGH
(HEIGHTS EXCLUDING WHEELS, WHICH MAY BE REMOVED
WITHOUT DIFFICULTY AT THE OPTION OF THE SHIPOWNER)
TWO UNITS WEIGH 30,000 LBS AND THE TWELVE OTHERS
ABOUT 20,000 LBS EACH.
WITH THE UNITS ARE INCLUDED ABOUT THIRTY TONS OF
BUILDING MATERIALS WHICH THE, SHIPOWNER MAY USE FOR
TRIMMING, BUT THE LENGTHS OF WOOD SHALL UNDER NO
CIRCUMSTANCES BE CUT.
2. THE SHIPOWNER SHALL TRANSPORT ALL UNITS ON THE
DECK OF THE M.V. "TRULELAND", BRITISH REGISTRY AND
CLASSIFIED "LLOYDS ICE CLASS 1", OR OTHER SUBSTITUTE
VESSEL. THE SHIPOWNER SHALL MAKE AVAILABLE A VESSEL
WHICH WILL BE APPROVED BY THE "C.T.C."
3. APPROXIMATE DATES OF LOADING: SEPTEMBER 15, 1971.
4. FREIGHT PAYABLE BY THE SHIPPER TO THE SHIPOWNER:
C.C. $14,000 (FOURTEEN THOUSAND DOLLARS) PER UNIT ON
A MINIMUM OF FOURTEEN UNITS. ON COMPLETION OF LOAD
ING AT QUEBEC CITY THE TOTAL FREIGHT IS EARNED,
WHETHER OR NOT THE VESSEL AND/OR GOODS ARE LOST
DURING THE VOYAGE.
5. THE SHIPPER SHALL DELIVER THE UNITS TO THE WHARF
AT QUEBEC CITY; THE SHIPOWNER SHALL LOAD AND DELIVER
IN 1971 SEVEN UNITS TO THE SITE AT BROUGHTON ISLAND
AND SEVEN UNITS TO THE SITE AT CLYDE RIVER, BAFFIN
ISLAND, AT WHICH LOCATIONS THE SHIPPER WILL USE A
BULLDOZER WITH THE NECESSARY ATTACHMENTS TO
REMOVE THE UNITS FROM THE BARGES.
6. NO INSURANCE ON THE VESSEL, EVEN IF INCURRED ON A
VOYAGE TO THE AFOREMENTIONED LOCATIONS, SHALL BE
PAYABLE BY THE SHIPPER.
7. THE SHIPPER SHALL BE RESPONSIBLE FOR ALL INSURANCE
PREMIUMS REQUIRED ON THE CARGO FROM THE WHARF AT
QUEBEC CITY TO THE SITES AT BROUGHTON ISLAND AND
CLYDE RIVER.
8. ON MONDAY, AUGUST 30, 1971 THE SHIPPER SHALL PRO
VIDE THE SHIPOWNER WITH A LETTER OF CREDIT IN THE
AMOUNT OF ONE HUNDRED AND NINETY-SIX THOUSAND DOL-
LARS; THE TEXT OF THIS LETTER SHALL BE SUBMITTED TO
THE SHIPPER BY SHIPOWNER ON MONDAY, AUGUST 30, 1971.
On September 7, 1971, the respondent's parent
company wrote to the appellant as follows:
In accordance with your telex of September 2, 1971 you
agreed to clause 1, 2, 3, 4, 5, 6, 7 and 9 of our telex to you
of August 27, 1971.
We now confirm our subsequent conversations to the
effect that your proposed changes to clause 8 set out in your
telex of September 2, 1971 are revoked and that you agree
instead to furnish us a letter of credit in the terms and
conditions, as per the attached sample in the amount of
$196,000. This letter of credit will be given to us within 7
days of the date of this letter.
In addition the proposed additional clause 10 will be
replaced by the following.
[TRANSLATION] Running gear will have to be returned to
Montreal in 1971 if possible; if not, to some other port or
ports at our convenience.
Could you kindly sign this letter and return the original to
us to signify your agreement to the foregoing.
That letter was accepted by the appellant.
When the officials of the respondent respon
sible for loading and unloading the objects in
question saw them on the dock on Friday, Sep-
tember 17, 1971, there was some alarm. Micha-
el O'Connor, for the respondent, testifies:
Q. Now, Mr. O'Connor, could you tell the Court basically
what, how you planned to do this job and how you
planned and what you planned to do in Quebec, and
what happened?
A. Yes. Captain Garvie told me over the telephone what
we had to load, and how we proposed to load this
cargo, and I asked him the weights of each piece and
he gave me two (2) units of thirty thousand (30,000)
pounds maximum and twelve (12) units of twenty
thousand (20,000) pounds maximum. He indicated to
me that these were maximum weights, and from the
conversations he had with our Head Office in Mont-
real, it was his feeling that the units, that the weights
he gave me were maximum, and we discussed the
capacity of the gear and the capacity of the crane we
intended to purchase or rent in order to help to dis
charge these units at their destinations, Broughton
Island and Clyde River. If I remember right, Lou
Parker and I arrived in Quebec on a Friday. We
immediately looked around at the units that were on
the dock, and I said to Captain Garvie, I said: "There
are no weights stencilled on these units" and he said:
"Well, we have got the weights from the Head Office;
these must be the weights." Well, I said, "it is very
unusual to have the units like this and no weights
stencilled on them," and I kept insisting that we got
the proper weights inasmuch as I had a big responsibil
ity in that I had to, I had to really worry about how
those units got off on Broughton Island or Clyde
River.
Nevertheless, the respondent proceeded to build
cribbing on the deck of the ship assigned to the
contract on the assumption that the units did not
weigh more than 20,000 lbs and 30,000 lbs,
respectively, and made their plans on the basis
of lifting the units from the dock to the deck of
the ship with equipment that could not be used
with any degree of safety with objects weighing
more than 30,000 lbs.
On Sunday, September 19, 1971, the respond
ent made its first "lift" of one of the objects and
the "Crane lost balance" with the result that the
unit fell across the gunwale and became partial
ly submerged.
A decision was then taken by the respondent
to weigh the other objects (house trailers) that
were still on the wharf; and, on Tuesday, Sep-
tember 21, 1971, the respondent's parent com
pany sent to the appellant a telex reading as
follows:
M.S. "TAVASTLAND" AT QUEBEC
LOADING PREFAB HOUSING UNITS FOR
BROUGHTON ISLAND AND CLYDE RIVER N.W.T.
REFERENCE MOVEMENT 14 MOBILE HOUSING UNITS FROM
QUEBEC TO BROUGHTON ISLAND AND CLYDE RIVER, WE REFER
YOU TO OUR TELEX DATED AUGUST 27TH, 1971, PARTICULAR
LY CLAUSE NO. 1, IN WHICH THE WEIGHTS OF THE UNITS WERE
SPECIFIED AS FOLLOWS:
[TRANSLATION] "TWO UNITS WEIGH 30,000 LBS AND THE
TWELVE OTHERS ABOUT 20,000 EACH."
AND YOUR TELEGRAM OF SEPTEMBER 2ND, 1971 IN WHICH YOU
ACCEPTED THE OFFER INCLUDING ACCEPTANCE OF CLAUSE NO.
1 SPECIFYING THE WEIGHTS OF THE UNITS.
AS ALREADY NOTIFIED IN OUR TELTEX OF THIS MORNING,
(SEPTEMBER 21ST, 1971 AT 11:11), IT HAS COME TO OUR
ATTENTION THAT APPARENTLY SOME OF THE SPECIFIED UNITS
ARE IN EXCESS OF THE WEIGHTS STIPULATED AND AGREED.
SPECIFICALLY, AS A RESULT OF WEIGHING TODAY BY DYNOME-
TER, THE FOLLOWING WEIGHTS HAVE BEEN ESTABLISHED:
BLUE NO. 1 27,400 LBS.
BLUE NO. 4 30,800 LBS.
RED NO. 1 28,200 LBS.
FURTHER WEIGHING IS BEING CONDUCTED AND WE HOPE TO BE
ABLE TO ESTABLISH THE WEIGHTS OF ALL UNITS WHICH HAVE
NOT YET BEEN LOADED. THIS WILL INCLUDE ALL 7 OF THE
BLUE UNITS.
IT APPEARS THAT THE ACTUAL WEIGHTS OF THE UNITS ARE
MUCH IN EXCESS OF THE SPECIFIED AND AGREED WEIGHTS,
ESPECIALLY INSOFAR AS IT SHOULD BE BORNE IN MIND THAT
THE WEIGHTS ORIGINALLY SPECIFIED AND AGREED WERE
INCLUSIVE OF RUNNING GEAR AND THE WEIGHTS OUTLINED
ABOVE ARE WITH THE RUNNING GEAR REMOVED. AS A PROVI
SIONAL ESTIMATE THE RUNNING GEAR IS ESTIMATED TO BE
ABOUT 1800 LBS PER UNIT. WE BRING TO YOUR ATTENTION THE
FACT THAT THE STABILITY OF ANY VESSEL IS CRITICALLY
AFFECTED BY THE WEIGHT OF CARGO ON DECK AND AS PER
PROVISIONALLY STIPULATED AND AGREED WEIGHTS IT WAS
ANTICIPATED THAT THE 14 UNITS WOULD TOTAL APPROXIMATE
LY 150 SHORT TONS. THE ENTIRE STABILITY CALCULATIONS
FOR THIS VOYAGE WERE BASED UPON THESE WEIGHTS TO
GETHER WITH A REASONABLE MARGIN FOR SECURING MA
TERIAL, ETC. AND PERHAPS SOME MINOR FLUCTUATION IN
ACTUAL WEIGHTS OF THE UNITS. AT NO TIME COULD IT HAVE
BEEN FORESEEN THAT THE WEIGHTS OF THE UNITS MIGHT
TOTAL AS MUCH AS 40 OR 50 SHORT TONS MORE THAN AGREED.
WE BRING TO YOUR ATTENTION THE FACT THAT THE ADDITION
AL WEIGHT OF 50 TONS WOULD BE EQUIVALENT TO AN
INCREASE OF 30 PERCENT OF THE ACTUAL WEIGHT
STIPULATED.
IN VIEW OF THE FOREGOING WE PUT YOU ON NOTICE AS
FOLLOWS:
1. YOU ARE AT LIBERTY TO CHECK OUR WEIGHING PROCE
DURES. IF YOU CAN, WE WOULD WELCOME YOU PRODUCING
OFFICIAL WEIGHT CERTIFICATES OUTLINING THE WEIGHTS AS
STIPULATED AND AGREED IN TELTEXES REFERRED TO ABOVE.
2. IF YOU ARE ABLE TO EFFECT WEIGHT REDUCTION WITH
OUT DELAYING THE LOADING OPERATION YOU MAY DO SO
AND IN THIS REGARD WE URGE YOUR URGENT ACTION.
3. WE HOLD YOU ENTIRELY RESPONSIBLE FOR ALL CONSE
QUENCES, DAMAGES AND/OR LOSSES THAT MAY OCCUR
THROUGH THE EXCESSIVE WEIGHT OF THESE UNITS.
IN THIS REGARD THE VESSEL HAS BEEN EQUIPPED WITH
CERTAIN CRANES, ETC. DESIGNED TO LIFT THE UNITS AS
ORIGINALLY SPECIFIED. WE HOLD YOU RESPONSIBLE FOR
ANY DAMAGE THAT MAY BE CAUSED TO THIS EQUIPMENT,
AND WE HOLD OURSELVES HAMLESS [SIC] TO ANY DAMAGE
THAT MAY BE CAUSED TO THE CARGO THROUGH THE EXCESS
WEIGHTS.
4. WE HOLD YOU RESPONSIBLE FOR PAYMENT OF ADDITION
AL FREIGHT IN PROPORTION TO THE EXCESS CARGO WEIGHT
OVER THAT ORIGINALLY STIPULATED.
IN ORDER THAT THE ABOVE STATEMENTS CAN BE CLEARLY
RECORDED WE INTEND TO APPOINT AN INDEPENDENT SUR
VEYOR IMMEDIATELY TO ASSESS THE FACTS AS STIPULATED
ABOVE AND WE INVITE YOU TO APPOINT YOUR OWN SURVEY
OR TO REPORT EITHER ON A JOINT SURVEY BASIS OR AN
INDEPENDENT SURVEY BASIS.
IN VIEW OF THE EXTREME URGENCY OF THIS ENTIRE OPERA
TION WE INTEND TO MITIGATE DAMAGES AS BEST AS CAN BE
BY PROCEEDING WITH THE LOADING OPERATION AND WITH
THE TRANSPORTATION OF THESE UNITS TO DESTINATION.
THERE IS NEITHER THE TIME NOR OPPORTUNITY AT THIS
MOMENT TO UNDERTAKE ANYTHING OTHER THAN THE SUR
VEYS AND WEIGHING OPERATIONS AS OUTLINED ABOVE.
WE NEED HARDLY TELL YOU THAT AS PROFESSIONAL SHIP-
OWNERS AND OPERATORS WITH EXPERIENCE IN HANDLING
NUMEROUS PROJECTS OF SIMILAR DIFFICULTY THAT WE CON
SIDER THIS APPARENT CARELESS REGARD FOR ACCURATE
INFORMATION TO BE OF A MOST SERIOUS NATURE IF FOR NO
OTHER REASON THAT IT SUBJECTS OUR PERSONNEL AND
EQUIPMENT TO UNNECESSARY HAZARDS.
WE WOULD APPRECIATE YOUR ACKNOWLEDGING RECEIPT OF
THIS TELTEX BY TELEGRAM.
There is no evidence of any reply to this telex
but it was established that the objects presented
by the appellant for carriage under the contract
weighed some 30% more than the weights given
in the telex of August 27, 1971. Nevertheless,
the respondent re-built the cribbing on the deck
of the ship to carry the greater weight and
successfully made the extra expenditure and
incurred whatever risk was involved in carrying
out the carriage of such objects in accordance
with the terms of the telex of August 27. The
reason for carrying such objects in this way
even though they so grossly exceeded the
weights contemplated by the contract were
given by Mr. Bell, Executive Vice-President of
the respondent, as follows:
BY THE COURT:
You said that had you known the weight, you would
never have undertaken the contract, but in effect when
you did know it, you went ahead with it anyway?
BY THE WITNESS:
Yes. Well, you know, my Lord, when you are faced
with something like this and your reputation is on the
line, we didn't at this point want to consider anything
but getting our units up there. Our customer Jasmin
had the government in on this a great deal, and the
government put a tremendous amount of pressure on
us to perform this job. They wanted those units like
they really wanted them in the north, and they were
twelve (12) months late as it was, at this time, because
others had refused to lift even though they had origi
nally stated they would lift.
Q. But once you knew the proper weights of the units,
why did you accept to transport them?
A. Because we have a job to perform. We were given the
units—
Q. But you knew the risks at that time?
A. We knew them and took them because we had to—
Q. Why?
A. To get the cargo up there, you mean?
Q. Yes.
Q. Well, you meant that you accepted the risks—when
the ship left Quebec, you knew exactly the risks it was
involving in accepting the cargo?
A. We knew all the time that the vessel, once she left
Quebec, had on her fourteen (14) units which were
different from the fourteen (14) units that had been
described to us initially. We had to have some very
expert stevedores who managed somehow to get that
cargo off even though they were stretching their own
capacity to the full extreme.
Q. You said at first that the first figures you had about
the weights of the units, that the ship itself, it was in
its limit capacity, so after that you learned that the
units were weighing more than that and you accepted
to travel those units up to the north?
A. We managed to do it. Isn't that good enough? The ship
was straining in all respects, and in fact, in retrospect,
I perhaps, it would be true to say that we should have
said, "Listen, we are not going to perform this for
you." But at the time when we, we acknowledge and
we are acknowledged as having more experience than
other people, we will do almost anything to perform a
contract that is given us to perform. If in good faith
our customer had come to us and said we have a very
difficult job to do, and we take it on knowing that it is
a very difficult job, you have got to go a very, very
long way to get a company like ours actually stop
doing it.
Q. Well, you didn't think about leaving the ship at the
wharf for a few days and negotiate another contract?
A. It shows that you know very little about the Arctic. If I
might be allowed to suggest that we had left it more
than another day or two, that cargo would never have
got there. After all, there is such a thing as heavy
freezing up there and you just can't get in after.
Q. Did you know at the time in the harbour that you were
going to have some difficulties with the weight on the
ship?
A. Oh, quite clearly. We said that quite clearly in our
telexes to you.
Q. And you went on?
A. We did, because we are that sort of people. We don't
give up if we can see any possible way of doing it.
After all, it was public knowledge and we knew that
these units were desperately needed. People had told
us—
Q. Who told you?
A. I think the government. The government in Ottawa had
come to us and said, these are already twelve (12)
months behind time.
Q. You were talking a few times about the pressure of the
government. How do you know that?
A. Because they came to my office and actually made a
plea to me to perform this function if we humanly
could.
Q. You never thought about leaving some units on the
wharf?
A. I don't know what the hospital unit which is in seven
(7) bits and it hasn't got the operating theatre, what it
would be like, but we did think of leaving some behind
but it was clearly told to us that the whole thing
depended on getting it all there. After all, if you don't
get the anesthetic room and the operating room it isn't
much use.
The loading was completed and the ship sailed
midnight of September 24-25.
The principal part of the $36,787.18 claimed
by the respondent (all except top wharfage in
the sum of $185.58 and $1,000 for insurance)
would seem to be based on the costs incurred
by the respondent as a result of the weights of
the objects carried being in excess of those
stipulated in the contract. The amount claimed
was the amount by which the respective costs
actually incurred by the respondent were
claimed to be in excess of those estimated by
the respondent as the basis for making its fixed
price offer for the transportation operation. We
have, in setting out the facts and evidence up to
this point, restricted our references to the facts
and evidence that related to the amount so
claimed and will return later to the other, rela
tively minor, amounts, and to the counterclaim.
The learned Trial Judge's Reasons for Judg
ment read in part as follows:
I cannot accept defendant's contention that the weight of
the units was not material since the price quoted did not
depend on the weight but was for a fixed price of $14,000
per unit. Neither can I accept defendant's contention that
plaintiff was imprudent in not arranging to have the units
weighed before commencing loading them. The units in
question were manufactured according to defendant's own
plans and specifications by the Treco Company, a manufac
turer acting for defendant. It was defendant who furnished
to plaintiff the information as to their approximate weights,
allegedly having obtained this information from Treco, and
these weights were included in the contract. Plaintiff's rep
resentatives did inspect the units in the yard of Treco with a
view to seeing their general appearance so as to determine
the manner in which hooks or lifting equipment could be
attached to them, and to verify the overall dimensions given,
but no further information was given them as to the weight.
They were told they could not be weighed on public scales
and the Treco representatives referred them back to the
defendant Jasmin for figures as to their weight. Plaintiff's
representatives again asked Mr. Proulx of the Jasmin com
pany if the weight figures were correct and he said that
there was nothing to worry about as they probably weighed
less than the figures given. Certainly the defendant, as
designer of the units, and the Treco company as manufac
turer of them should be expected to know the weight of the
units within a reasonable range of accuracy and plaintiff was
entitled to rely on the information given. I cannot find that a
difference between 150 tons and 215 tons is a, small or
immaterial difference especially when all parties knew that
this cargo was to be carried on deck to the arctic near the
close of the navigation season there.
I am satisfied that there was error in the contract as to the
substance of the thing which was the object of it in view of
the weight, and that this weight was a principal consider
ation for making it within the meaning of article 992 of the
Quebec Civil Code which reads as follows:
992. Error is a cause of nullity only when it occurs in
the nature of the contract itself, or in the substance of the
thing which is the object of the contract, or in some thing
which is a principal consideration for making it.
and that this error was induced by the representations of
defendant as to the weight of the units, even though these
representations may have been made in good faith. Plaintiff
would therefore have been justified in refusing to carry out
the contract. This course of action would have caused very
heavy damage to defendant which was under pressure from
the government to get the units in question delivered. They
had been ready for nearly a year but defendant had appar
ently been unable to arrange for a ship willing to carry them
to the arctic at a price which it was prepared to pay. There
was some indication in the evidence that several other
shipping companies had been asked to tender for the con
tract but either they had not done so or defendant had not
accepted their tender. The navigation season was about to
close and if plaintiff had decided not to carry the units in
question because of the excess weight and to abandon them
where they were on the dock at Quebec, it is highly probable
that no alternative arrangements could have been made and
the delivery would again have been delayed until the follow
ing summer.
The fact that plaintiff undertook to carry them despite the
great increase in weight and the very hazardous nature of
the voyage resulting from this does not, I believe, deprive it
of any claim against defendant for additional expenses
directly attributable to the increase in weight for which
defendant should be held responsible. As soon as the
increase in weight was ascertained, the plaintiff advised
defendant of this by telex dated September 21, 1971, notify
ing defendant that it would be held responsible for the
consequences. Later the same day a more detailed telex
gave the weights which had already been established for
four of the units which had been weighed, referred to the
extent to which they exceeded the weight stipulated in the
contract and how this would affect the stability of the vessel
and gave formal notice that defendant would be held respon
sible for all consequences, damages or losses that might
occur through the excessive weight, including damages to
the crane and equipment of the vessel. It further stated that
plaintiff would hold itself harmless for any damage caused
to the cargo through the excess weight, and that defendant
would be held responsible for payment of additional freight
in proportion to the excess of the cargo weight over that
originally stipulated. This latter stipulation was never
enforced and plaintiff's claim does not include anything for
extra freight charges based on the weight of the units as
finally determined, and in fact it is doubtful whether plain
tiff could have succeeded in a claim on this basis in view of
the fixed price contract, without a new agreement with
defendant. The telex went on to state that:
In view of the extreme urgency of this entire operation we
intend to mitigate damages as best as can be by proceed
ing with the loading operation and with the transportation
of these units to destination.
Neither of these communications were acknowledged
although defendant did have a representative, Leandre
Turcot, its Construction Foreman, present during part of the
weighing. In a further telex of September 25 advising that
the ship had sailed, reference was again made to an eventual
claim for compensation for excess weight. Defendant cannot
therefore be said to have agreed to plaintiff's conditions for
continuing to carry out the contract, nor did it admit that
there had been any breach of contract, maintaining through
out that the weight was immaterial. It did, however, benefit
from the fact that plaintiff completed the contract success
fully and since plaintiff was put to considerable additional
expense in carrying it out as a result of the excess weight,
defendant would benefit by an unjust enrichment and plain
tiff suffer a corresponding impoverishment if it were not
compensated for these additional expenses resulting from
the fault of defendant in giving highly inaccurate informa
tion as to the weight of the units.
The learned Trial Judge then proceeded to
calculate the additional expenses incurred by
the respondent as a result of the excessive
weight of the cargo. He assessed those expenses
at $24,722.88, which sum he awarded the
respondent.
It should first be observed that if the respond
ent's claim is founded on unjust enrichment, as
held by the Trial Judge, then the compensation
to which the respondent is entitled should not
be assessed in the way that was adopted by the
Trial Judge. On the basis of unjust enrichment,
the only obligation of the appellant would be to
pay to the respondent an amount equal to the
value of the services rendered by the respond
ent; it would not be to compensate the respond
ent for the additional expense incurred by it as a
result of the excessive weight of the cargo.
A second, and more fundamental, observation
indicates clearly that the action is founded on
breach of contract; it is not based on unjust
enrichment. In our view, it was not open to the
Trial Judge, if he were of opinion that the claim
for damages could not succeed, to allow it on
the basis of unjust enrichment.
When it was realized, at the hearing of the
appeal, that it could perhaps be argued that the
statement of claim did not allege all the causes
of action that could be invoked, it was suggest
ed to counsel that he should envisage the possi
bility of amending the statement of claim 2 .
After a recess, counsel for the respondent
applied for leave to amend by adding a new
paragraph to the statement of claim alleging, as
an alternate basis of the claim, the liability in
tort of the appellant. Counsel for the appellant
a Rule 1104 reads as follows:
Rule 1104. (1) At any time during the pendency of an
appeal or other proceeding in the Court of Appeal, the
Court may, upon the application of any party, or without
any such application, make all such amendments as are
necessary for the purpose of determining the appeal or
other proceeding, or the real question in controversy
between the parties as disclosed by the pleadings, evi
dence or proceedings.
(2) An amendment may be made under paragraph (1),
whether the necessity for the same is or is not occasioned
by the defect, error, act, default or neglect of the party
applying to amend.
(3) Every amendment shall be made upon such terms
as to payment of costs, postponing or adjourning a hear
ing or otherwise, as to the Court seem just.
did not oppose that application which was,
therefore, granted.
In these circumstances, the question to be
answered on this appeal, in relation with this
part of the respondent's claim, is whether the
respondent is entitled to recover from the appel
lant, as contractual or delictual damages, the
amount of the loss it suffered as a result of the
excessive weight of the cargo.
Inasmuch as the claim is based on breach of
contract, we are of the opinion that it cannot
succeed for the very simple reason that the loss
suffered as a consequence of the weight of the
cargo did not result from any breach of the
contract by the appellant. In our view, the con
tract of affreightment was a contract for the
carriage of specific objects previously agreed
upon. In delivering those objects on the dock
near the respondent's ship, the appellant per
formed one of its obligations under the contract
and the fact that both parties might have been
mistaken as to the weight of those objects did
not constitute a breach of the contract on the
part of the appellant.
But can the claim of the respondent succeed
inasmuch as it is now based on the delictual
liability of the appellant company which, by its
fault (this fault consisting of the giving of inac
curate information on the weight of the cargo)
would have caused the respondent to agree to
carry the cargo for too low a price?—We do not
think so. In our view, the evidence shows that,
before the formation of the contract, the
respondent was fully aware that the weights that
had been mentioned earlier were only approxi
mate weights. In those circumstances, it is our
opinion that the fact that the respondent never
theless agreed to carry the cargo for what it now
considers to be an insufficient price (without
any undertaking on the part of the appellant to
pay any additional charges), was not due to any
fault on the part of the appellant but, rather, to
the respondent's determination to enter into that
contract in spite of the risk that the information
it had received as to the weight of the cargo
might prove to be inaccurate.
We are therefore of the opinion that the
respondent is not entitled to the damages
claimed as a result of the excessive weight of
the cargo.
In addition to the damages resulting from the
weight of the cargo, the learned Trial Judge
allowed the respondent sums of $110.61 and
$1,000.00. His decision, in respect of those
amounts, should not be disturbed. The sum of
$110.61 represents the amount of a toll that the
respondent had to pay to the National Harbours
Board under a by-law adopted under the Na
tional Harbours Board Act. Under the by-law,
that toll, which is imposed on the cargo and is
payable by the carrier, can be recovered by the
carrier from the shipper. As to the sum of
$1,000.00, it was paid by the respondent in
order to insure its freight. Under the contract,
the appellant was to supply the respondent,
before September 14, 1971, with a letter from a
bank guaranteeing the payment of the freight.
This, the appellant failed to do. As a conse
quence, the respondent thought it necessary to
insure its freight and, for that purpose, paid a
premium of $1,000.00. In our view, that dis
bursement was a reasonable one for the
respondent to make in the circumstances and
can be considered as having been made as a
result of the appellant's failure to perform one
of its obligations under the contract.
For these reasons we are of the opinion that
the Judgment of the Trial Division which
allowed the respondent's claim should be varied
by reducing its amount from $25,833.49 to
$1,110.60.
We now turn to that part of the judgment of
the Trial Division which, disposing of the appel
lant's counterclaim, for alleged damages to the
cargo, allowed the appellant $676.90. Against
that judgment the appellant appeals and the
respondent cross-appeals.
The respondent submits that the appellant's
counterclaim should have been dismissed in so
far as it relates to damages to goods that were
not the object of the contract of carriage.
It is common ground that at least part of the
damages awarded to the appellant on its coun-
terclaim represents compensation for damages
to some plumbing supplies which, unknown to
both parties, had been stored in the crawlspace
of the hospital unit that fell overboard at the
time of the loading at Quebec. The contract did
not contain any reference to this box of plumb
ing supplies and it is for that reason that the
respondent submits that it had no obligation
whatsoever respecting their carriage. We cannot
agree with that submission. The contract was
for the carriage of specific mobile units which,
as the respondent knew, were to be assembled
into two hospitals. Even if the contract did not
mention the presence of the box of plumbing
supplies in one of the units, it was reasonably
foreseeable in the circumstances, that those
units would contain the fittings that were neces
sary for the assembly and the completion of the
hospitals. For this reason, we are of opinion that
the respondent's cross-appeal against that part
of the judgment must fail.
It is the appellant's submission, however, that
its counterclaim in the amount of $2,707.61
should have been allowed in full.
If the Trial Judge allowed only one-fourth of
the appellant's counterclaim, it is because he
considered
(a) that it related to damages caused by the
fall overboard of one of the units at the time
of loading, and
(b) that the fall of the unit had been caused,
in the proportion of one-fourth, by the negli
gence of the crane operator, and in the pro
portion of three-fourths by the negligence of
the appellant in giving inaccurate information
as to the weight of the cargo.
We cannot agree with the finding of the learned
Trial Judge that the accident which took place at
the time of the loading was attributable to the
appellant's fault. At the time of the loading of
the cargo, the respondent knew that the infor
mation it had received as to the weight of the
units might not be accurate. In these circum
stances, the respondent had the duty either to
ascertain the weight of the units before loading
them or to use a crane powerful enough to lift
weights much heavier than those mentioned by
the appellant. The fall of the unit at the time of
loading was, in our view, caused exclusively by
the respondent's negligence to perform that
duty.
It is therefore our opinion that the learned
Trial Judge should have allowed the sum of
$2,707.61 to the appellant on its counterclaim.
For these reasons the appeal of the appellant
against the judgment in the main action will be
allowed and the amount awarded the respondent
by that judgment will be reduced from
$25,833.49 to $1,110.61 with interest; the
appeal of the appellant against the judgment on
the cross-demand will be allowed and the
amount awarded the appellant by that judgment
will be increased from $676.90 to $2,707.61
with interest; the cross-appeal of the respondent
will be dismissed.
The appellant will be entitled to its costs of
defending the main action in the Trial Division
and to its costs of the appeal from the judgment
in the main action; neither the appellant nor the
respondent will be entitled to any costs, either
in the Trial Division or in this Court, with
respect to the cross-demand and to the appeal
and cross-appeal from the judgment on the
cross-demand.
* * *
HYDE D.J.—I concur.
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.