A-47-79
Miida Electronics, Inc. (Appellant)
v.
Mitsui O.S.K. Lines Ltd. and ITO—International
Terminal Operators Ltd. (Respondents)
Court of Appeal, Pratte and Le Dain JJ. and
Lalande D.J.—Montreal, December 2 and 5,
1980; Ottawa, May 22, 1981.
Maritime law — Torts — Contracts — Bill of lading —
Appeal from dismissal of action for theft of cargo from transit
shed after discharge — Stevedoring contract required terminal
operator to perform watching and guard services subject to
limitations of liability in bill of lading — Terminal operator
did not make a security check in accordance with regulations
— Whether Court has jurisdiction — Whether terminal oper
ator was negligent in the performance of its duties — Whether
terminal operator is relieved of liability for negligence by the
bill of lading — Appeal allowed in part — Quebec Civil Code,
arts. 1053, 2388 — Federal Court Act, R.S.C. 1970 (2nd
Supp.), c. 10, s. 2.
Appeal from dismissal of appellant's action against the carri
er and the terminal operator for theft of cargo after discharge.
The goods were stolen from a transit shed operated by ITO in
which they were stored. National Harbours Board regulations
require that each shed must be checked inside at least once
every two hours. ITO failed to have a guard make a security
check for a period of five hours. The contract with the carrier
required ITO to perform "such ... terminal services as may be
required" including "watching and guard services". ITO agreed
to perform those services with the benefit of the "rights,
immunities and limitation of liability" provided by the bill of
lading. Clauses 4 and 7 of the bill of lading give ITO the
benefit of the rights and immunities, exemption from and
limitation of liability afforded by the Hague Rules. Appellant's
action was in breach of contract and in delict. The Trial Judge
held that as the whole loss had occurred after the goods had left
the ship, the carrier's liability was excluded by the bill of lading
and that the plaintiff had failed to prove fault within the
meaning of the general law and that ITO was protected by the
bill of lading from liability for after-discharge negligence. The
questions are whether the bill of lading relieved the carrier
from liability when the loss resulted from a failure to exercise
due care for the safety of the goods; whether the Court has
jurisdiction to hear the claim; whether ITO was negligent in the
performance of its duties; and, whether ITO is relieved of
liability for negligence by the bill of lading.
Held, the appeal is allowed with respect to ITO (Pratte J.
dissenting) and is dismissed with respect to Mitsui O.S.K.
Lines Ltd. (Le Dain J. dissenting).
Per Pratte J. dissenting with respect to ITO: The appellant
failed to show that the stevedoring company, ITO, had a duty
to take care of the goods. In the absence of such a duty, the
failure of ITO to do more than it actually did to preserve the
appellant's goods is not a fault within the meaning of article
1053 of the Civil Code. Regardless, the appellant's claim must
fail because ITO is protected by the Himalaya clause in the bill
of lading. Another more fundamental reason why the appel
lant's claim cannot succeed is that a claim of that nature is not
within the jurisdiction of the Federal Court. The Trial Judge
was correct in dismissing the action against the carrier because
the bill of lading relieved it from the duty to take care of the
goods once they had left the ship.
Per Le Dain J. dissenting with respect to Mitsui O.S.K.
Lines Ltd.: The claim of the cargo owner against the terminal
operator is a maritime matter and the Court has jurisdiction to
entertain the claim. The terminal operator was paid by the
shipowner for the terminal services performed. The terminal
operator was therefore a sub-bailee for reward. As such it had a
duty to the cargo owner to take reasonable or due care to keep
the goods safe. The degree of care required of a bailee depends
upon the circumstances in which and the purposes for which
the goods were delivered to him. The terminal operator as
sumed a duty of care which included the provision of an
adequate system of security. This results from the nature of the
function and responsibility assumed by the terminal operator as
indicated by the stevedoring and terminal services agreement
and by the National Harbours Board regulations. Failure to
carry out the inspection was negligence in the care of the cargo.
The Himalaya clause provides that the various classes of
persons who are to enjoy the carrier's exemptions, immunities
and limitation of liability are to be entitled to "same, but no
further" exemptions of liability as the carrier. Clauses 8 and 18
do not exclude liability for negligence. They do not contain an
express reference to negligence. The words "in any capacity
whatsoever" do not constitute such a reference. As against the
carrier, the appeal should be allowed. Since clauses 8 and 18 of
the bill of lading do not relieve the carrier of its contractual
obligations to deliver the cargo and care for it pending delivery,
the carrier could not relieve itself of these obligations by
delegating their performance to a third person. Also, in provid
ing the terminal services, the terminal operator was acting as
agent of the carrier. On either view, the carrier would be liable
for the negligence which caused the loss of the cargo.
Per Lalande D.J.: The action was properly dismissed as
against the carrier on application of clause 8 of the bill of
lading. ITO was negligent in the performance of "watching and
guard" services and its fault is actionable. The appellant agreed
by the Himalaya clause that the carrier would engage a
terminal operator in the performance of its contract to deliver
the goods. ITO agreed to perform those services with the
benefits of the "rights, immunities and limitations of liability"
provided by the bill of lading. ITO became a depositary or
bailee of the goods. The claim of the cargo owner can be said to
be ex contractu. The Himalaya clause and clause 7 have
nothing to do with the after-discharge negligence. These clauses
give the terminal operator the benefit of the rights and immuni-
ties, exemption from and limitation of liability afforded by the
Hague Rules. Nothing in those Rules exonerates the carrier
from liability for loss of goods by theft because of negligence in
the care and custody of the goods after their discharge. The
Federal Court does have jurisdiction to entertain the plaintiff's
claim against the terminal operator because it is a matter
connected with "navigation and shipping" and was within the
jurisdiction of the Exchequer Court of Canada.
R. v. Domestic Converters Corporation A-247-77, judg
ment dated October 29, 1980, disagreed with. Gilchrist
Watt & Sanderson Pty. Ltd. v. York Products Pty. Ltd.
[1970] 1 W.L.R. 1262; [1970] 3 All E.R. 825, referred to.
National Gypsum Company Inc. v. Northern Sales Lim
ited [1964] S.C.R. 144, referred to. Associated Metals &
Minerals Corp. v. The "Evie W" [1978] 2 F.C. 710,
referred to. Inverness Railway and Coal Co. v. Jones
(1908) 40 S.C.R. 45, referred to. Building and Civil
Engineering Holidays Scheme Management Ltd. v. Post
Office [1966] 1 Q.B. 247, referred to. Moyer Stainless &
Alloy Co. Ltd. v. Canadian Overseas Shipping Ltd. [1973]
2 Lloyd's Rep. 420, referred to. Executive Jet Aviation,
Inc. v. City of Cleveland, Ohio 1973 A.M.C. 1, referred to.
Morris v. C. W. Martin & Sons, Ltd. [1965] 2 All E.R.
725; [1966] I Q.B. 716, referred to. British Road Services,
Ltd. v. Arthur V. Crutchley & Co., Ltd. [1968] 1 All E.R.
811, referred to. Canada Steamship Lines Ld. v. The King
[1950] S.C.R. 532; [1952] A.C. 192, referred to. Smith v.
South Wales Switchgear Ltd. [1978] 1 All E.R. 18,
referred to. Tropwood A.G. v. Sivaco Wire & Nail Co.
[1979] 2 S.C.R. 157, referred to. Scruttons Ltd. v. Mid
land Silicones Ltd. [1962] A.C. 446, discussed. New Zea-
land Shipping Co. Ltd. v. A. M. Satterthwaite & Co. Ltd.
(The "Eurymedon") [1975] A.C. 154, discussed. Port
Jackson Stevedoring Pty. Ltd. v. Salmond & Spraggon
(Australia) Pty. Ltd. (The "New York Star") [1980] 3 All
E.R. 257, discussed. Canadian General Electric Co. Ltd. v.
Pickford & Black Ltd. (The "Lake Bosomtwe") [1971]
S.C.R. 41, considered. Greenwood Shopping Plaza Ltd. v.
Beattie [1980] 2 S.C.R. 228, considered. Robert Simpson
Montreal Ltd. v. Hamburg-Amerika Linie Norddeutscher
[1973] F.C. 1356, applied.
APPEAL.
COUNSEL:
Marc Nadon for appellant.
R. Cypihot for respondent Mitsui O.S.K.
Lines Ltd.
D. F. H. Marler for respondent ITO—Inter-
national Terminal Operators Ltd.
SOLICITORS:
Martineau, Walker, Allison, Beaulieu,
MacKell & Clermont, Montreal, for appel
lant.
Brisset, Bishop, Davidson & Davis, Montreal,
for respondent Mitsui O.S.K. Lines Ltd.
Chauvin, Marier & Baudry, Montreal, for
respondent ITO—International Terminal
Operators Ltd.
The following are the reasons for judgment
rendered in English by
PRATTE J. (dissenting): On September 14,
1973, a theft was committed in the Port of Mon-
treal. In the early evening, a large number of desk
calculators were stolen from shed 50. The stolen
goods belonged to the appellant, Miida Electron
ics, Inc.; they had just arrived from Japan on
board the Buenos Aires Maru, a vessel- of the
respondent, Mitsui O.S.K. Lines Ltd. (Mitsui),
and had been discharged and placed in shed 50 by
the other respondent, International Terminal
Operators Ltd. (ITO). Most of those goods were
never recovered.
Following that loss, the appellant sued both
Mitsui, the carrier which had transported the
stolen goods from Japan to Montreal, and ITO,
the terminal operator in whose care Mitsui had
placed the goods after their discharge. As against
Mitsui, the action was founded on the contract of
transport; the plaintiff contended that Mitsui's
failure to deliver the goods in Montreal was a
breach of the contract evidenced by the bill of
lading issued by Mitsui with respect to the stolen
goods. As against ITO, the action was based on
the allegation that ITO had been negligent in
failing to take the proper steps to prevent the theft
of the goods which had been committed to its care.
The Trial Division dismissed the action against
both defendants [[1979] 2 F.C. 283]. The appel
lant appeals from that judgment.
1. The action against Mitsui
The Trial Judge dismissed the action against
Mitsui because, having found that the whole loss
had occurred after the goods had left the ship and
been placed in shed 50, he held that Mitsui's
liability was excluded by clause 8 of the bill of
lading that had been issued with respect to the
appellant's goods. That clause reads as follows:
8. The carrier shall not be liable in any capacity whatsoever
for any delay, non-delivery, misdelivery or loss of or damage to
or in connection with the goods occurring before loading
and/or after discharge, whether awaiting shipment landed or
stored or put into craft, barge, lighter or otherwise belonging to
the carrier or not or pending transhipment at any stage of the
whole transportation. "Loading" provided in this bill of lading
shall commence with the hooking on of the vessel's tackle or, if
not using the vessel's tackle, with the receipt of goods on deck
or hold or, in case of bulk liquids in the vessel's tank. "Dis-
charging" herein provided shall be completed when the goods
are freed from the vessel's tackle or taken from deck or hold, or
the vessel's tank.
At the hearing of the appeal, counsel for the
appellant did not challenge the finding that the
loss suffered by his client resulted in its entirety
from the theft that was committed when the goods
were stored in shed 50. He argued, however, that
clause 8 of the bill of lading did not relieve the
carrier from liability when, as in this case, the loss
resulted from a failure to exercise due care for the
safety of the goods. Non-liability clauses, said
counsel, must be construed strictly and do not
protect those in whose favour they are made from
liability for damage caused by negligence save
when it is clear that the parties intended to exclude
that type of liability; he quoted, in support of that
proposition, the decision of the Privy Council in
Canada Steamship Lines Ld. v. The King'.
In my view, clause 8, particularly when it is read
with clause 18, 2 has the effect of excluding the
carrier's liability in a case like the present one
when the loss occurred after discharge without any
fault or negligence on the carrier's part. It cannot
be said that Mitsui did not exercise due care for
the safety of the goods because, in my view, claus
es 8 and 18 relieved Mitsui from the duty to take
' [1952] A.C. 192.
2 That clause provided, inter alia, that:
In any case the carrier's responsibility shall cease at the time
when the goods are discharged from the vessel and in any
case all risks and expenses (including expenses for landing,
lighterage, storage, cartage, port charges etc.) incurred by
delivery otherwise than from the vessel's side shall be borne
by shipper and/or consignee notwithstanding any custom of
the port to the contrary.
care of the goods once they had left the ship. The
fact that the loss may, as contended by the appel
lant, have been caused by the negligence or fault
of ITO is irrelevant since ITO was an independent
contractor and never acted as Mitsui's servant.
The decision of the Privy Council in Canada
Steamship Lines Ld. v. The King (supra) has no
application here; it was merely held in that case
that a non-liability clause does not normally exon
erate the party in whose favour it is made from the
liability arising from the negligence of that party
and of that party's servants.
I am therefore of opinion that the Trial Judge
was correct in dismissing the appellant's action
against Mitsui.
2. The action against ITO
ITO is a stevedoring firm which also provides its
customers with terminal services. In 1973, it
occupied various sheds in the Port of Montreal
which had been leased from the National Har
bours Board; shed No. 50 was one of them. In
April 1973, ITO had made a contract with Mitsui
and agreed to load and discharge all Mitsui's
vessels, and supply terminal services, at the Port of
Montreal and at other specified Canadian ports.
Pursuant to that contract, ITO discharged the
appellant's goods and placed them in shed 50 until
they be claimed by their owner.
According to counsel for the appellant, the
action against ITO is based solely on delict or tort.
The appellant, said he, never contracted with ITO
and, being not a party to the contract made by
ITO with Mitsui, cannot avail itself of its stipula
tions. Accordingly, counsel did not challenge the
Trial Judge's conclusion that the action against
ITO could not succeed in so far as it was based on
contract.
Counsel's sole argument on this branch of the
case was that the appellant's claim against ITO,
envisaged as a purely delictual claim, was entitled
to succeed, whether it be governed by the law of
Quebec or by English law, because the appellant's
loss had been caused by the failure of ITO to
exercise due care for the safety of the goods.
In order to understand that argument, it is
necessary to have in mind the circumstances in
which the appellant's goods were stolen from
shed 50. Those circumstances, as well as some of
the inferences that the appellant draws from them,
are accurately summarized in the following pas
sage of the judgment of the Trial Division [at
pages 293-294]:
The theft took place on the evening of September 14. An
employee of the firm used by defendant to provide the neces
sary security measures surprised the thieves in the act while
making his round. Owing to the darkness and the distance, he
could see only shadows that fled toward the water and disap
peared over the end of the wharf. The thieves had evidently
made use of a boat which they had moored along the wharf
opposite the shed in which the goods were stored. When they
fled they even left a pallet loaded with cartons halfway between
the door of the shed and the side of the wharf. The port police
were alerted and arrived on the scene at once. It was soon
discovered that a hole about six or eight inches in diameter had
been made in the wall of the warehouse beside one of the large
front doors. Through this hole it was possible to reach the
endless chain inside, which is used to operate a lever and raise
the door.
This sequence of events leaves a number of questions unan
swered, however, and it is in the replies to these questions that
plaintiff finds proof of the faults which it alleges against
defendant. First, how long were the thieves able to work
undisturbed? Normally the security guards make their rounds
at least every two hours after 5:30 p.m., and in fact this is
suggested by the by-laws of the National Harbours Board, from
which defendant leased its space. On that particular evening,
however, as one of the two guards on duty had been delayed in
another shed where work had gone on after normal hours and
the other one had to stay in the security guards' shelter, there
was no round at 7:30. The first round was the one during which
the thieves were discovered. Secondly, was it only necessary for
the thieves to reach the chain in order to open the door? Was
there no security bolt on the door? Usually, these doors were
locked using a padlock that held the two sections of the chain to
a metal ring attached to the wall. That evening, however, the
padlock was only holding the two sections of chain together,
thus leaving two or three feet of play, and this allowed the door
to be raised enough to permit entry. Thirdly, could the thieves
handle the cases without any equipment? It was discovered that
a motorized lifter had been left in the shed that evening, which
was unusual, and that its motor was still warm shortly after the
theft. Fourthly, are the premises not provided with some light
ing that might hinder operations of this kind at night? Some
lights are in fact left on, but there are not many of them and
that evening there were even fewer than usual in the shed, since
burned-out bulbs had not yet been replaced.
Plaintiff argues that the theft was unquestionably facilitated
by defects in the security measures used to protect the goods:
insufficient rounds by security guards, somewhat ineffective
bolting, the presence of a lifter in the shed, poor lighting. In
plaintiffs view this is enough to justify the conclusion that
defendant was at fault and is therefore liable.
Counsel for the appellant first submitted that
the claim was entitled to succeed under the law of
Quebec. He said that the failure of ITO to exercise
due care for the safety of the goods was a fault
which made ITO liable under article 1053 of the
Quebec Civil Code. Now, in determining the valid
ity of that submission, it must be borne in mind
that the appellant cannot take advantage of the
provisions of the contract for terminal services
made by ITO and Mitsui. Those provisions are, in
so far as the appellant is concerned, "res inter
alios acts". It follows that the fact that ITO may
have failed in its contractual duty of care toward
Mitsui does not help the appellant. In order for the
action to succeed, it must be shown that, even if
the contract for terminal services had not imposed
any duty on ITO with respect to the safety of the
goods after their discharge, that company would
nevertheless have had the duty to take care of the
goods in the manner suggested by the appellant.
This the appellant has not established. Had not the
contract for terminal services imposed any obliga
tion with respect to the safety of the goods after
discharge, ITO would, in the circumstances of this
case, have been under no legal or moral duty to
take special measures for the safekeeping of those
goods. In the absence of such a duty, the failure of
ITO to do more than it actually did to preserve the
appellant's goods is not a fault within the meaning
of article 1053 of the Civil Code.
Counsel for the appellant also argued, however,
that the claim was not governed by the law of
Quebec but by the common law of England which
would be applicable as part of the "Canadian
maritime law" as well as by virtue of article 2388
of the Civil Code of Quebec. Under English law,
Mitsui was bailee of the appellant's goods while
ITO was a sub-bailee. The decisions of the English
Court of Appeal in Morris v. C. W. Martin &
Sons, Ltd. ([ 1966] 1 Q.B. 716) and of the Privy
Council in Gilchrist Watt and Sanderson Pty. Ltd.
v. York Products Pty. Ltd. ([1970] 1 W.L.R.
1262) are authorities for the proposition that a
sub-bailee of goods, although there is no contrac
tual relation between himself and the owner,
nevertheless owes the owner a duty to take due
care of his goods. It follows, according to counsel,
that ITO, as a sub-bailee of the appellant's goods,
owed a duty of care to the appellant. As the loss
would not have occurred, according to counsel's
argument, if ITO had exercised reasonable care, it
also follows that ITO should be held liable for that
loss.
Assuming for the sake of argument that English
law is applicable in this matter (a point on which I
have, to say the least, strong doubts), I am still of
the view that the appellant's claim must fail
because ITO would then be protected by the
Himalaya clause contained in clause 4 of the bill
of lading issued by Mitsui with respect to the
appellant's goods. That clause reads as follows:
4. It is expressly agreed between the parties hereto that the
master, officers, crew members, contractors, stevedores, long
shoremen, agents, representatives, employees or others used,
engaged or employed by the carrier in the performance of this
contract, shall each be the beneficiaries of and shall be entitled
to the same, but no further exemptions and immunities from
and limitations of liability which the carrier has under this bill
of lading, whether printed, written, stamped thereon or incorpo
rated by reference. The master, officers, crew members and the
other persons referred to heretofore shall to the extent provided
be or be deemed to be parties to the contract in or evidenced by
this bill of lading and the carrier is or shall be deemed to be
acting as agent or trustee on behalf of and for the benefit of all
such persons.
If the validity of such a clause is still a subject of
discussion in Canadian law, it can no longer be
doubted, I think, in English law when the clause
has been stipulated by the carrier with the author
ity of those it is intended to protect. (See the
decisions of the Privy Council in New Zealand
Shipping Co. Ltd. v. A. M. Satterthwaite & Co.
Ltd. (The "Eurymedon") [1975] A.C. 154 and
Port Jackson Stevedoring Pty. Ltd. v. Salmond &
Spraggon (Australia) Pty. Ltd. (The New York
Star) [1980] 3 All E.R. 257.) In the present case,
the terms of the second paragraph of clause 7 of
the terminal services contract make clear that ITO
had conferred on Mitsui the authority to stipulate
a Himalaya clause in the bill of lading:
7. Responsibility for Damage or Loss. It is expressly under
stood and agreed that the Contractor's responsibility for
damage or loss shall be strictly limited to damage to the vessel
and its equipment and physical damage to cargo or loss of
cargo overside through negligence of the Contractor or its
employees. When such damage occurs to the vessel or its
equipment or where such loss or damage occurs to cargo by
reason of such negligence, the vessel's officers or other repre
sentatives shall call this to the attention of the Contractor at
the time of accident. The Company agrees to indemnify the
Contractor in the event it is called upon to pay any sums for
damage or loss other than as aforesaid.
It is further expressly understood and agreed that the Com
pany will include the Contractor as an express beneficiary, to
the extent of the services to be performed hereunder, of all
rights, immunities and limitation of liability provisions of all
contracts of affreightment as evidenced by its standard bills of
lading and/or passenger tickets, issued by the Company during
the effective period of this agreement. Whenever the customary
rights, immunities and/or liability limitations are waived or
omitted by the Company, as in the case of ad valorem cargo,
the Company agrees to include the Contractor as an assured
party under its insurance protection and ensure that it is
indemnified against any resultant increase in liability.
There is another more fundamental reason why
the appellant's claim against ITO, whether gov
erned by Quebec or English law, could not suc
ceed: as was decided by this Court in The Queen v.
Domestic Converters Corporation,' a claim of that
nature is not within the jurisdiction of the Federal
Court.
For these reasons, I would dismiss the appeal
with costs.
* * *
The following are the reasons for judgment
rendered in English by
LE DAIN J.: The facts and the issues in this
appeal are set out in the reasons of my brothers
Pratte and Lalande which I have had the advan
tage of reading.
Because the conclusion I have reached with
respect to the appeal from the judgment dismissing
the action of the appellant cargo owner as against
the carrier Mitsui O.S.K. Lines Ltd. differs from
that of my colleagues it is convenient for me to
deal first with the appeal from the judgment dis
missing the action as against the terminal operator
3 Court File No. A-245-77; that decision was pronounced on
October 29, 1980, after the decision of the Trial Division in this
case.
ITO. I agree with the inference drawn from the
evidence by the learned Trial Judge that the loss
occurred after discharge while the cargo was in the
custody of the terminal operator. The appeal in
respect of the claim against the terminal operator
raises three questions: (a) whether the Court has
jurisdiction to entertain the claim; (b) whether the
loss of the cargo was attributable to negligence for
which ITO is responsible; and (c) whether ITO is
relieved of liability for negligence by the Himalaya
clause in the bill of lading.
On the question of jurisdiction, I am now of the
view that I was wrong in the conclusion which I
reached in the Domestic Converters case 4 . I am,
however, still of the opinion for the reasons
indicated in that case that there is no contractual
foundation for the claim of the cargo owner
against the terminal operator. I am unable, with
great respect, to see how the stevedoring and ter
minal services contract between the shipowner and
Logistec Corporation (which by agreement of the
parties is to be regarded for purposes of the case as
one and the same with ITO) can be said to have
been entered into by the shipowner on behalf of
the individual shipper or cargo owner or to contain
a stipulation pour autrui in his favour. It was a
general operating agreement entered into by the
shipowner as principal for its own account and
benefit without regard to any particular contract
of carriage. It created no contractual relationship
between the terminal operator and a particular
shipper or cargo owner. The terminal operator
took possession of the cargo pursuant to this gener
al agreement and not pursuant to any agreement
with the cargo owner. I have been persuaded,
however, by further argument and reflection that
the question of jurisdiction should be considered
on the assumption that if the claim of the cargo
owner against the terminal operator were governed
by Canadian maritime law it would be based on
the common law liability of a sub-bailee arising
apart from contract, as in the case of Gilchrist
Watt & Sanderson Pty. Ltd. v. York Products Pty.
Ltd. [1970] 3 All E.R. 825, and that because of
the special nature of the liability upon bailment it
is inappropriate to apply to it the test of locality
that has traditionally been applied to admiralty
jurisdiction in tort. If the liability of the terminal
4 Domestic Converters Corporation v. Arctic Steamship Line
A-247-77, judgment October 29, 1980.
operator to the cargo owner should be regarded as
a maritime matter within the definition of
"Canadian maritime law" in section 2 of the Fed
eral Court Act, R.S.C. 1970 (2nd Supp.), c. 10,
because of the close practical relationship of the
terminal operation to the performance of the con
tract of carriage, the law which governs it should
be uniform throughout Canada. Cf. National
Gypsum Company Inc. v. Northern Sales Limited
[1964] S.C.R. 144 at pages 153 and 163;
Associated Metals & Minerals Corporation v. The
"Evie W" [1978] 2 F.C. 710 at page 717. I am
reinforced in this view by the fact that the
common law of bailment provides a more coherent
and certain basis for the duties and liability of the
terminal operator than does the civil law of delic-
tual responsibility. Such a result is in the interests
of maritime commerce and it is certainly not
against the general spirit of the Quebec civil law as
indicated by article 2388 of the Civil Code, which
appears to have been treated as of general import
in the judgment of Girouard J. in Inverness Rail
way and Coal Company v. Jones (1908) 40 S.C.R.
45 at page 55. On the assumption, then, that the
liability of the terminal operator to the cargo
owner, if governed by Canadian maritime law,
would be the common law liability of a sub-bailee
arising apart from contract, I do not think it
should be regarded as falling within the traditional
distinction or dichotomy, for purposes of jurisdic
tion, between maritime contracts and maritime
torts because of the body of opinion that has
characterized the liability upon bailment as sui
generis or independent of contract or tort. See
Winfield, The Province of the Law of Tort, 1931,
chapter V; Building and Civil Engineering Hol
idays Scheme Management Ltd. v. Post Office
[1966] 1 Q.B. 247 per Lord Denning M.R. at page
261; Palmer, "The Application of the Torts (Inter-
ference with Goods) Act 1977 to Actions in Bail-
ment" (1978) 41 M.L.R. 629 at page 630. More
over, to the extent that the liability upon bailment
arising apart from contract is to be regarded,
according to some authorities (cf. Winfield and
Jolowicz on Tort, 11th ed., 1979, pages 9-10) as
essentially tortious, I do not think that the test of
locality should be determinative of jurisdiction
because of the close relationship of the terminal
operation to maritime commerce. It must not be
forgotten that in addition to its post-discharge
services the terminal operator receives cargo for
shipment and issues a dock receipt on behalf of the
carrier that is subject to the terms and conditions
of the carrier's standard bill of lading for which it
is exchanged on shipment. This aspect of the ter
minal operator's services is necessitated by the
provisions of section 657 of the Canada Shipping
Act, R.S.C. 1970, c. S-9, as was pointed out by
Madam Justice Rejane Colas in Moyer Stainless
& Alloy Co. Ltd. v. Canadian Overseas Shipping
Ltd. [1973] 2 Lloyd's Rep. 420, at page 426. I
have no doubt that the regulation of a terminal
operator would fall within federal legislative juris
diction with respect to navigation and shipping. As
for the test of locality as a criterion of what should
be considered to be a maritime tort, counsel for the
cargo owner in this appeal pointed out that that
test was the subject of considerable critical reser
vation by the Supreme Court of the United States
in Executive Jet Aviation, Inc. v City of Cleve-
land, Ohio 1973 A.M.C. 1. While the issue in that
case was the very particular one of whether the
federal courts had admiralty jurisdiction in respect
of an action in tort arising out of the crash of an
aircraft in Lake Erie shortly after taking off from
an airport in Cleveland, and turned essentially on
the conclusion that the flight had no connection
with traditional maritime activity, the following
general observation of Mr. Justice Stewart, [at
page 10] who delivered the opinion of the Court, is
of significance as a guide to the application of the
test of locality as a criterion of maritime jurisdic
tion: "In sum, there has existed over the years a
judicial, legislative, and scholarly recognition that,
in determining whether there is admiralty jurisdic
tion over a particular tort or class of torts, reliance
on the relationship of the wrong to traditional
maritime activity is often more sensible and more
consonant with the purposes of maritime law than
is a purely mechanical application of the locality
test." For these reasons I am of the opinion that
the claim of the cargo owner against the terminal
operator is a maritime matter within the definition
of Canadian maritime law in section 2 of the
Federal Court Act and that accordingly the Court
has jurisdiction to entertain the claim.
Under the stevedoring and terminal services
agreement the terminal operator was paid by the
shipowner for the terminal services performed. The
terminal operator was therefore a sub-bailee for
reward. As such it had a duty to the cargo owner
to take reasonable or due care to keep the goods
safe, and the burden was on the terminal operator
in case of loss to show that the loss occurred
without neglect, default or misconduct on its part
or those to whom it had delegated its duty: Morris
v. C. W. Martin & Sons, Ltd. [1965] 2 All E.R.
725 at page 731; Gilchrist Watt & Sanderson Pty.
Ltd. v. York Products Pty. Ltd., supra, page 829.
The degree of care required of a bailee depends
upon the circumstances in which and the purposes
for which the goods were delivered to him: Morris
v. C. W. Martin & Sons, Ltd., supra, at page 734.
In the present case the terminal operator
assumed a duty of care which included the provi
sion of an adequate system of security. This results
from the nature of the function and responsibility
assumed by the terminal operator as indicated by
the terms of the stevedoring and terminal services
agreement, which required "Watching and guard
services", and by section 54A of the National
Harbours Board's "Regulations Governing the
Occupancy and Use of Transit Sheds for the
Handling of Cargo", which reads in part: "There
must be a security guard on duty inside a shed
whenever the shed is open. When a shed is closed,
unless in the opinion of the Harbour Master the
type of cargo justifies a security guard being on
duty at all times, continuous watching is not
required; each shed must however be checked
inside frequently (at least once every two hours) to
ensure that cargo is safe and no fire hazards
exist." The foundation of the duty and liability of
a bailee is the voluntary assumption of the posses
sion or custody of the property of another under
certain circumstances and for certain purposes. It
is this which I think makes the security require
ment in the stevedoring and terminal services
agreement and the Board's "regulations" appli
cable as a measure of the standard of care required
of the terminal operator. But even if the matter is
to be regarded from the point of view of privity of
contract I think there is a significant distinction to
be made with respect to the "regulations" of the
Board. While these "regulations" are not strictly
speaking true regulations or provisions of law but
rather conditions of the permit of occupation, they
are imposed by the Board acting as a public
authority upon the occupants of transit sheds in
the exercise of what is essentially a regulatory
responsibility. As such I think they should be
taken as affecting the scope of the duty of care and
safekeeping that was owed by the terminal opera
tor to the cargo owner.
Having regard to the requirement that each
shed be checked inside at least every two hours,
the failure to carry out an inspection of shed 50
between the hours of 7:30 p.m. and 10:30 p.m. on
September 14, 1973, was negligence in the care of
the cargo for which the terminal operator is
responsible. I agree with the reasons of Mr. Justice
Lalande for concluding that had the necessary
inspection been carried out it is probable that the
loss would have been prevented. The terminal
operator cannot escape this responsibility by
reason of having arranged for the security guard
service to be provided by an independent contrac
tor: British Road Services, Ltd. v. Arthur V.
Crutchley & Co., Ltd. [1968] 1 All E.R. 811.
I turn now to the question whether the terminal
operator is relieved of liability for negligence by
clause 4 (the Himalaya clause) of the bill of lading
which reads:
4. It is expressly agreed between the parties hereto that the
master, officers, crew members, contractors, stevedores, long
shoremen, agents, representatives, employees or others used,
engaged or employed by the carrier in the performance of this
contract, shall each be the beneficiaries of and shall be entitled
to the same, but no further exemptions and immunities from
and limitations of liability which the carrier has under this bill
of lading whether printed, written, stamped thereon or incorpo
rated by reference. The master, officers, crew members and the
other persons referred to heretofore shall to the extent provided
be or be deemed to be parties to the contract in or evidenced by
this bill of lading and the carrier is or shall be deemed to be
acting as agent or trustee on behalf of and for the benefit of all
such persons.
By virtue of this clause the terminal operator
invokes the limitation or exclusion of liability in
clause 8 of the bill of lading, which provides in
part that "The carrier shall not be liable in any
capacity whatsoever for any delay, non-delivery,
misdelivery or loss of or damage to or in connec
tion with the goods occurring before loading
and/or after discharge, whether awaiting shipment
landed or stored or put into craft, barge, lighter or
otherwise belonging to the carrier or not or pend
ing transhipment at any stage of the whole trans
portation", and in clause 18, which provides in
part that "In any case the carrier's responsibility
shall cease at the time when the goods are dis
charged from the vessel and in any case all risks
and expenses (including expenses for landing,
lighterage, storage, cartage, port charges, etc.)
incurred by delivery otherwise than from the ves
sel's side shall be borne by shipper and/or con-
signee notwithstanding any custom of the port to
the contrary".
The Privy Council has held in two decisions, on
the basis of the requirements suggested by Lord
Reid in Scruttons Ltd. v. Midland Silicones Ltd.
[1962] A.C. 446, at page 474, that a form of
Himalaya clause could be invoked by stevedores.
In the first of these cases, New Zealand Shipping
Co. Ltd. v. A. M. Satterthwaite & Co. Ltd. (The
"Eurymedon"), (supra), the loss occurred in the
course of discharge and the immunity that was
applied was the one-year time bar in Article III,
paragraph 6, of the Hague Rules. In the second
case, Port Jackson Stevedoring Pty. Ltd. v. Sal-
mond & Spraggon (Australia) Pty. Ltd. (The New
York Star), (supra), the loss occurred after dis
charge while the goods were in the custody of the
stevedores pending delivery to the cargo owners
and again the immunity that was applied was the
one-year time bar.
The Supreme Court of Canada has not had an
opportunity to rule on the effect of a Himalaya
clause in the light of these decisions. In Canadian
General Electric Company Limited v. Pickford &
Black Limited (The "Lake Bosomtwe") [1971]
S.C.R. 41 at page 43, Mr. Justice Ritchie, deliver-
ing the judgment of the Supreme Court of
Canada, cited with approval the decision of the
House of Lords in Midland Silicones, supra, and
said that "as the stevedoring company is a com
plete stranger to the contract of carriage it would
not be affected by any provisions for limitation of
liability or otherwise contained in the bills of
lading", although the nature of the provision that
was being invoked is not clear. In Greenwood
Shopping Plaza Limited v. Beattie [1980] 2
S.C.R. 228, at pages 237-238, Mr. Justice McIn-
tyre, delivering the judgment of the Supreme
Court of Canada, noted the adoption in The Lake
Bosomtwe case of the rule of privity of contract as
affirmed and applied in Midland Silicones and
referred without commentary to the decision of the
Privy Council in The Eurymedon as an example of
the "agency exception".
In this state of the law, I am of the respectful
opinion that the decisions of the Privy Council in
The Eurymedon and The New York Star cases
should be taken as having correctly applied the
requirements of the agency theory indicated by
Lord Reid in Midland Silicones and thus to have
properly permitted the stevedores to invoke the
Himalaya clauses in those cases, and that this
conclusion is not in conflict with what has so far
been said by the Supreme Court of Canada with
reference to this question.
In the present case the requirements of the
agency theory appear to have been clearly satis
fied, in particular by the agreement in clause 7 of
the stevedoring and terminal services contract be
tween the shipowner and the stevedoring and ter
minal services contractor that the shipowner "will
include the Contractor as an express beneficiary,
to the extent of the services to be performed
hereunder, of all rights, immunities and limitation
of liability provisions of all contracts of affreight-
ment as evidenced by its standard bills of
lading .... "
The issue, as I see it, is whether clause 4 of the
bill of lading—the Himalaya clause—contem-
plates the exclusion of liability for after-discharge
loss in clauses 8 and 18 of the bill of lading, and if
so, whether the latter exclude liability for
negligence.
It is true that none of the decisions recognizing
that the Himalaya clause may be invoked by steve
dores or terminal operators has applied the after-
discharge clause as one of the immunities covered
by it, but I am, with respect, of the view that the
words "shall be entitled to the same, but no further
exemptions and immunities from and limitations
of liability which the carrier has under this bill of
lading" are broad enough to include the exclusion
of liability for after-discharge loss in clauses 8 and
18 of the bill of lading in the present case. As I
read these words they apply to all exemptions,
immunities and limitations of liability provided by
the bill of lading and not merely to those provided
by the Hague Rules and made applicable by the
clause paramount. The exclusion of liability pro
vided by the after-discharge loss clause falls into
the category of provisions expressly permitted by
Article VII of the Hague Rules, which reads:
"Nothing herein contained shall prevent a carrier
or a shipper from entering into any agreement,
stipulation, condition, reservation or exemption as
to the responsibility and liability of the carrier or
the ship for the loss or damage to or in connection
with the custody and care and handling of goods
prior to the loading on and subsequent to the
discharge from the ship on which the goods are
carried by water."
In The New York Star there was a question as
to whether the immunity in issue in that case—the
one-year time bar—applied to a case of after-dis
charge loss. The Privy Council held, on the basis
particularly of clause 5 of the bill of lading, which
spelled out the nature of the carrier's liability, if
any, after discharge, that the carrier's immunity
covered the period of responsibility for the cargo
after discharge and in consequence the immunity
of the stevedore covered the same period. In the
present case there is no clause in the bill of lading,
comparable to clause 5 of the bill of lading in The
New York Star case, which expressly contemplates
that the carrier may have a defined liability as
bailee where delivery is not taken at the time and
place of discharge. Clause 4 (the Himalaya clause)
of the bill of lading extends to persons engaged or
employed by the carrier "in the performance of
this contract"—that is, in the performance of the
contract of carriage as evidenced by the bill of
lading. The bill of lading provides that the goods
are to be carried to the port of discharge and
"there to be delivered or transhipped", and that
"If requested, one signed bill of lading duly
endorsed must be surrendered in exchange for the
goods or delivery order." In my opinion clause 8 of
the bill of lading does not purport to define the
carrier's obligations under the contract of carriage,
which include the obligation to deliver the goods to
the consignee or other holder of the bill of lading
and the obligation to care for the goods pending
delivery. See Carver's Carriage by Sea, 12th ed.,
1971, vol. 2, para. 1018, p. 865, and paras. 1022
and 1023, p. 869. What clause 8 purports to do is
to relieve the carrier of liability for non-perform
ance of these obligations. This is apparent from
the words "shall not be liable in any capacity
whatsoever for any delay, non-delivery, misdeliv-
ery or loss of or damage to or in connection with
the goods occurring before loading and/or after
discharge .... " The implication of this clause is
that the carrier would otherwise be liable for
non-performance of the obligations of delivery and
safekeeping. The words in clause 18, "In any case
the carrier's responsibility shall cease at the time
when the goods are discharged", when read in the
light of clause 8, do not in my opinion purport to
define the scope or duration of the contract of
carriage but rather purport to limit or exclude
liability. Clause 18 does define the carrier's right
to discharge the goods, but discharge is not
synonymous with delivery. The place at which the
goods are discharged is normally the place at
which the consignee or other holder of the bill of
lading is required to take delivery (Carver, op. cit.,
par. 1004, p. 855; par. 1008, pp. 857-858), but
clause 18 of the bill of lading contemplates that
the goods may be discharged into a warehouse
selected by the carrier and that there may be
"delivery otherwise than from the vessel's side",
and the stevedoring and terminal services agree
ment, the occupation and operation of the transit
shed, and the testimony in the case show that
delivery as a general rule was to be taken from the
terminal operator. The case therefore discloses a
mode of operation or course of dealing essentially
similar to that which was described by Barwick
C.J. in the High Court of Australia in The New
York Star case [1979] 1 Lloyd's Rep. 298 at page
308, and in the Privy Council by Lord Wilber-
force, who said at page 264: "These provisions
must be interpreted in the light of the practice that
consignees rarely take delivery of goods at the
ship's rail but will normally collect them after
some period of storage on or near the wharf. The
parties must therefore have contemplated that the
carrier, if it did not store the goods itself, would
employ some other person to do so." I am, there
fore, of the opinion that the provisions of bill of
lading in the present case necessarily contemplated
that the contractual obligations of the carrier
extended beyond discharge and the carrier's limi
tation or exclusion of liability was intended to
cover the period between discharge and delivery,
so that what was held by the Privy Council in The
New York Star case with reference to the question
that was referred to as the "capacity" point is
applicable to the present case.
It is necessary, then, to consider whether clause
8 and that portion of clause 18 which has been
quoted exclude liability for negligence. It is to be
noted that clause 4 (the Himalaya clause) provides
that the various classes of persons who are to enjoy
the carrier's exemptions, immunities and limita
tions of liability are to be entitled to "same, but no
further" exemptions, immunities and limitations of
liability as the carrier has under the bill of lading.
It is thus necessary to determine the effect of such
exemptions, immunities and limitations in respect
of the carrier's liability. In the light of the princi
ples affirmed by the Privy Council in Canada
Steamship Lines Ld. v. The King (supra) at page
208 it is my opinion that clause 8 and that portion
of clause 18 that has been quoted do not exclude
liability for negligence. They do not contain an
express reference to negligence. The words "in any
capacity whatsoever" do not constitute such a
reference: Smith v. South Wales Switchgear Ltd.
[1978] 1 All E.R. 18 at pages 22 and 26. In so far
as they may be considered broad enough to include
negligence they are not directed to liability which
could only be based on negligence, but they could
be intended to exclude the carrier's liability as an
insurer of the safety of the goods, apart from
negligence. The relevant authorities in support of
this distinction with respect to carriers were
reviewed in the dissenting opinion of Locke J. in
the Canada Steamship Lines case, [ 1950] S.C.R.
532 at pages 560 ff. In the result, then, I am of the
opinion that the Himalaya clause in this case does
not have the effect of relieving the terminal opera
tor of liability for the loss of the cargo.
As indicated at the outset of these reasons, I
must with respect differ from my colleagues con
cerning the proposed disposition of the appeal
from the judgment dismissing the action as against
the carrier Mitsui O.S.K. Lines Ltd. In my opinion
that appeal should be allowed. Since I am of the
view that clauses 8 and 18 of the bill of lading did
not relieve the carrier of its contractual obligations
to deliver the cargo and care for it pending deliv
ery, the carrier could not relieve itself of these
obligations by delegating their performance to a
third person, even one who was an independent
contractor. But I am also of the view, in any event,
that in providing the terminal services the terminal
operator was acting as agent of the carrier. This is
reflected in clause 2 of the standard terms and
conditions attached to the stevedoring and termi
nal services contract between the shipowner
(referred to therein as the "Company") and Logis-
tec Corporation (referred to therein as the "Con-
tractor"), which reads in part as follows: "In the
event that receiving, delivery, checking and/or
watching services are required, it is expressly
agreed that the Contractor will arrange for such
services as Agent only for the Company .... " On
either view the carrier would be liable for the
negligence which caused the loss of the cargo.
For these reasons I would allow the appeal, set
aside the judgment of the Trial Division and order
the respondents jointly and severally to pay the
appellant the sum of $26,656.37 with interest at
the rate of 8% from September 14, 1973, with
costs in this Court and in the Trial Division.
The following are the reasons for judgment
rendered in English by
LALANDE D.J.: This is an appeal from a judg
ment of the Trial Division [supra] dismissing
plaintiff's (now appellant's) action for loss of cargo
by theft after discharge in the Port of Montreal.
The goods had been carried under a bill of lading
on the vessel Buenos Aires Maru from Kobe,
Japan, to Montreal "there to be delivered" to the
consignee. On September 14, 1973, burglars broke
into a terminal transit shed operated by respondent
ITO who also had discharged the shipment of 250
cartons containing 500 electronic desk calculators,
169 of which were stolen and not delivered.
The action was taken in breach of contract and
in delict against both the carrier and the terminal
operator (paragraph 12 of the statement of claim).
It was dismissed as against the carrier on
application of the tackle-to-tackle clause (clause 8)
of the bill of lading and with that judgment I
agree.
As to the terminal operator, an independent
contractor, the learned Trial Judge found
"defects" in its security measures on the night of
the break-in but concluded that if the case were to
be decided on "the purely delictual level" the
plaintiff had in his view "failed to prove fault
within the meaning of the general law" (loc. cit.
page 295), that is to say under article 1053 of the
Quebec Civil Code.
Principally what was found to be defective in the
watch kept over the cargo was failure to have a
guard make a security check of the shed for a
period of some five hours when rounds should have
been made at least every two hours. 5
As a consequence there was failure to ascertain,
as it would have been if an earlier round had been
made, that a door to the shed was not securely
locked and fastened down. The burglars, by cut
s The terminal operator occupied and ran the shed under
regulations requiring that it be "checked inside" at least once
every two hours (section 54A of the National Harbours Board's
Regulations Governing the Occupancy and Use of Transit
Sheds for the Handling of Cargo).
ting a small hole in the shed wall near the door,
were able to reach in, pull a chain, raise the door a
few feet, gain entry and take the stolen goods out
on the wharf to two small boats. Their activities
were interrupted by the first security round at
about 11:30 p.m. If the 7:30 p.m. security round
had not been cancelled, the padlock on the cargo
door dockside inside shed 50 would have been
checked and the door secured early in the evening,
and it is a reasonable assumption that the burglars
would not have been able to move the door as they
did, gain entry and get away with the stolen goods.
By its contract with the carrier defendant ITO
agreed to perform "such ... terminal services as
may be required" including "watching and guard
services". In my opinion ITO was negligent in the
performance of those services and its fault is
actionable, by a damaged person such as the plain
tiff, under article 1053.
The Trial Judge, however, did not limit the
plaintiff "solely to delictual grounds" because, as
he says at page 301:
... plaintiff can avail itself of this contract for services between
the carrier and ITO, concluded in part for its own benefit as
owner [of the goods] and with its express authorization.
By this I understand that the plaintiff as holder
of the bill of lading must be taken to have agreed
by clause 4 thereof that the carrier would engage a
terminal operator in the performance of its con
tract to deliver the goods to the consignee at
Montreal. By the second paragraph of clause 7 of
its contract with the carrier, ITO agreed to per
form those services with the benefit of the "rights,
immunities and limitation of liability" provided by
the bill of lading.
I conclude from these arrangements that ITO
became a depositary or bailee of the goods and it is
sued for failure in its duty with respect to their
safekeeping. I agree with the Trial Judge that the
claim of the cargo owner can be said to be ex
contractu, in so far as it arises from a fault in the
performance of a contract, though there be no
direct or immediate contractual relationship be
tween plaintiff and defendant ITO.
The Trial Judge then considered whether ITO
could have the benefit of clause 4 of the bill of
lading, and be protected by that clause from liabil
ity for after-discharge negligence. He came to the
conclusion, on a review of authorities, that ITO
was entitled to oppose the action by relying on that
clause and he dismissed it for that reason in so far
as it was founded on grounds other than delict.
I am in respectful disagreement with the Trial
Judge on the applicability of clause 4 of the bill of
lading and of the second paragraph of clause 7 of
the stevedoring contract to this case. I think these
clauses are irrelevant because they have nothing to
do with the after-discharge negligence that we
have here.
Clause 4 of the bill of lading reads as follows:
It is expressly agreed between the parties hereto that the
master, officers, crew members, contractors, stevedores, long
shoremen, agents, representatives, employees or others used,
engaged or employed by the carrier in the performance of this
contract, shall each be the beneficiaries of and shall be entitled
to the same, but no further exemptions and immunities from
and limitations of liability which the carrier has under this bill
of lading, whether printed, written, stamped thereon or incorpo
rated by reference. The master, officers, crew members and the
other persons referred to heretofore shall to the extent provided
be or be deemed to be parties to the contract in or evidenced by
this bill of lading and the carrier is or shall be deemed to be
acting as agent or trustee on behalf of and for the benefit of all
such persons.
The second paragraph of clause 7 of the printed
clauses of the stevedoring contract between Mitsui
and ITO reads as follows: 6
It is further expressly understood and agreed that the Com
pany will include the Contractor as an express beneficiary, to
the extent of the services to be performed hereunder, of all
rights, immunities and limitation of liability provisions of all
contracts of affreightment as evidenced by its standard bills of
lading and/or passenger tickets issued by the Company during
the effective period of this agreement. Whenever the customary
rights, immunities and/or liability limitations are waived or
omitted by the Company, as in the case of ad valorem cargo,
6 I omit the first paragraph because it deals with negligence
during the discharging operations and not with care of the
cargo after discharge.
the Company agrees to include the Contractor as an assured
party under its insurance protection and ensure that it is
indemnified against any resultant increase in liability.
These clauses give the terminal operator the
benefit of the rights and immunities, exemption
from and limitation of liability afforded by the
Hague Rules to which the bill of lading is subject
by clause 1 (Clause Paramount). There is nothing
in those Rules that exonerates the carrier from
liability for loss of goods by theft because of
negligence in the care and custody of the goods
after their discharge.
We are not concerned in this case with limita
tion of liability under Article IV, paragraph 5 of
the Hague Rules (the package limitation), nor
with exemption or discharge from liability under
paragraph 6 if suit is not brought within one year,
nor with a loss resulting from any of the causes
enumerated in Article IV, paragraph 2.
Having found defendant ITO negligent and not
exonerated from liability for that negligence by
any provision of its contract with the carrier or of
the bill of lading, my conclusion is that the appeal
as against International Terminal Operators Ltd.
must be allowed with costs and that it be ordered
to pay the plaintiff, as was agreed in that event,
the sum of $26,656.37 with interest at the rate of
8% from September 14, 1973, with costs in the
Trial Division.
The appeal as against Mitsui O.S.K. Lines Ltd.
should be dismissed with costs.
With regard to this Court's jurisdiction, the
subject was not raised at the trial,' but it was
canvassed before us, the matter having come to the
fore since this Court's decision of October 29,
1980, in The Queen v. Domestic Converters Cor
poration, (supra).
In my opinion the Federal Court does have
jurisdiction to entertain the plaintiff's claim
against the terminal operator here because it is a
7 See footnote 2, page 292 (ioc. cit.).
matter "connected with" navigation and shipping
in the words of section 4 of The Admiralty Act,
1891 of Canada, S.C. 1891, c. 29, and therefore
was within the jurisdiction of the Exchequer Court
of Canada under the provisions of that Act. 8
Moreover I agree with the view expressed by
Mr. Justice Thurlow (as he then was) in The
Robert Simpson Montreal Limited v. Hamburg-
Amerika Linie Norddeutscher [1973] F.C. 1356
where, referring to the definition of "Canadian
maritime law" in section 2 of the Federal Court
Act, he says at page 1369:
... if the Exchequer Court had had on its Admiralty side
unlimited jurisdiction in relation to maritime matters it would
plainly have had jurisdiction to administer the law which
governed the rights inter se of ocean carriers and terminal
operators in respect of the performance by terminal operators
on behalf of the ocean carriers of the obligations of the ocean
carriers to discharge, care for and deliver cargo to the persons
entitled thereto. That seems to me to be as maritime a matter
as is the contract for the carriage of the cargo by sea. The
arrangements between these parties are for the performance of
a part of that contract and the activities which the terminal
operators carry out under them are "part and parcel of the
activities essential to the carriage of goods by sea". (Re Indus
trial Relations and Disputes Investigation Act [1955] S.C.R.
529 per Locke J. at page 578.)
In the Robert Simpson case the issue was be
tween carrier and terminal operator, here it is
between cargo owner and terminal operator, but
the arrangements for the care after discharge and
delivery of the cargo were the same. I can see no
reason for a distinction to be made between the
two cases.
If the foundation of plaintiff's claim were purely
delictual I would be faced with the opinion I
expressed on jurisdiction in Domestic Converters,
an opinion that was not necessary to the judgment
I came to in that case and needs to be reviewed.
8 Laskin C.J. for the Court in TropwoodA.G. v. Sivaco Wire
& Nail Company [1979] 2 S.C.R. 157, at 162, 163.
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.