Supreme Court Judgments

Supreme Court of Canada

Charles Goodfellow Lumber Sales Ltd. v. Verreault et al., [1971] S.C.R. 522

Date: 1970-10-06

Charles Goodfellow Lumber Sales Limited (Plaintiff) Appellant;

and

Borromée Verreault, Captain Fernand Hovington and Verreault Navigation Inc. (Defendants) Respondents.

1970: March 18, 19; 1970: October 6.

Present: Fauteux, Abbott, Ritchie, Spence and Pigeon JJ.

ON APPEAL FROM THE EXCHEQUER COURT OF CANADA

Shipping—Carriage of goods—Loss of cargo—Perils of the sea—Weather—Ship unseaworthy—Due diligence to make ship seaworthy—Water Carriage of Goods Act, R.S.C. 1952, c. 291.

The respondents were carrying the appellant’s cargo on their wooden ship from Quebec to Newfoundland, when a gross swell and winds were encountered. The water started to flow into the ship owing to the weakness of its hull and the influx continued steadily until the ship was abandoned. The appellant instituted an action for damages for the loss of the greater part of its shipment of 565 tons of creosoted timbers. The trial judge dismissed the action. The cargo owner appealed to this Court and the defendants cross-appealed.

Held: The appeal should be allowed and the cross-appeal dismissed.

The contract of carriage was one to which the Water Carriage of Goods Act, R.S.C. 1952, c. 291, was applicable and the burden upon the appellant was limited to proving (1) the ownership of the cargo at the time of the loss, (2) the amount and value of the cargo shipped and (3) the failure to deliver a quantity of that cargo and the value of the cargo so lost. This having been proved, the carrier may escape liability if it can be proved that the loss occurred as a result of one of the excepted perils enumerated in art. IV of the Schedule to the Act, unless it can be established that the loss was caused by the carrier’s negligence or by want of due diligence to make the ship seaworthy.

The accident leading to the jettisoning of the cargo was not a consequence of the perils of the sea. In order to constitute a peril of the sea, there

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must be something which could not have been foreseen or guarded against as one of the probable incidents of the voyage. The weather encountered was such as should have been foreseen as one of the probable incidents of a voyage in the waters in question. The damage to the cargo arose from the fact that the hull was not sufficiently strong to withstand the weather encountered. The incursion of water increased steadily as the weather worsened, but the evidence called by the respondents did not discharge the onus of proving that the loss was occasioned by perils of the sea.

The evidence discloses that the ship was unseaworthy. The only evidence adduced by the respondents in discharge of the burden of proving the exercise of due diligence to make the ship seaworthy before and at the beginning of the voyage, was the production of a certificate of seaworthiness signed by a steamship inspector appointed by the Department of Transport. This was not sufficient to discharge the statutory onus and any reliance placed upon it must be further weakened by the fact that it appears to have been known to the inspector that the vessel suffered from an inherent weakness. The preponderance of evidence is that it was this weakness which caused the loss.

APPEAL and CROSS-APPEAL from a judgment of Dumoulin J., District Judge in Admiralty of the Quebec Admiralty District, Division of Quebec, dismissing the appellant’s action for damages for the loss of its cargo. Appeal allowed and cross-appeal dismissed.

Trevor H. Bishop, for the plaintiff, appellant.

Reynold Langlois, for the defendants, respondents.

The judgment of the Court was delivered by

RITCHIE J.—This is an appeal from a judgment of Dumoulin J., sitting in his capacity as District Judge in Admiralty of the Quebec Admiralty District, Division of Quebec, whereby he dismissed the appellant’s action for damages for the loss of the greater part of its shipment of 565 tons of creosoted timbers while being carried on the M/V Claudette V on a voyage between Sorel, P.Q., and St. Bride, Newfoundland.

The action, which was based on the failure to deliver the said cargo in accordance with a con-

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tract of carriage evidenced by a booking note dated May 6, 1959, and also in tort, was originally instituted against Borromee Verreault, the registered owner of the Claudette V and against its master, Captain Hovington, but it was pleaded by way of defence and alleged in an affidavit made by Verreault, that at the time of the loss the Claudette V was under a verbal bare bottom charter to Verreault Navigation Inc., a company of which Mr. Verreault was the major shareholder, president and general manager.

After a lapse of approximately three years, the plaintiff applied to amend its statement of claim so as to join Verreault Navigation Inc., as a party defendant, and this application was granted by a judgment of Mr. Justice Smith dated June 30, 1966, which judgment was attacked at the trial of this action on the ground that it had the effect of instituting an action against Verreault Navigation Inc., after the time for bringing such action was statute barred. I agree with the learned trial judge that no such objection could properly be raised against the judgment of Mr. Justice Smith because the time for appealing from that judgment under s. 161(1) of the Rules in Admiralty had long since elapsed before the trial of this action without any appeal having been taken.

The contract of carriage was one to which the Water Carriage of Goods Act, R.S.C. 1952, c. 291, was applicable and the respondent quite properly admits that the burden upon the appellant under that contract is limited to proving: (1) the ownership of the cargo at the time of the loss; (2) the amount and value of the cargo shipped; and (3) the failure to deliver a quantity of that cargo and the value of the cargo so lost. This having been proved, the carrier may escape liability if it can be proved that the loss occurred as a result of one of the excepted perils enumerated in art. IV of the Schedule to the Water Carriage of Goods Act and upon proof that the loss was occasioned by one of those perils, the cargo owner cannot recover unless it can be established that the loss was caused by the carrier’s negligence or by want of due diligence to make the ship seaworthy.

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The relevant provisions of the Schedule to the Water Carriage of Goods Act are:

Article III. Responsibilities and Liabilities.

1. The carrier shall be bound, before and at the beginning of the voyage, to exercise due diligence to,

(a) make the ship seaworthy;

(b) properly man, equip, and supply the ship;

(c) make the holds, refrigerating and cool chambers, and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage and preservation.

2. Subject to the provisions of Article IV, the carrier shall properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried.

Article IV provides, in part, as follows:

Article IV. Rights and Immunities.

1. Neither the carrier nor the ship shall be liable for loss or damage arising or resulting from unseaworthiness unless caused by want of due diligence on the part of the carrier to make the ship seaworthy, and to secure that the ship is properly manned, equipped and supplied, and to make the holds, refrigerating and cool chambers and all other parts of the ship in which goods are carried fit and safe for their reception, carriage and preservation in accordance with the provisions of paragraph 1 of Article III.

Whenever loss or damage has resulted from unseaworthiness, the burden of proving the exercise of due diligence shall be on the carrier or other person claiming exemption under this section.

2. Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from,

(a) act, neglect, or default of the master, mariner, pilot or the servants of the carrier in the navigation or in the management of the ship;

* * *

(c) perils, danger, and accidents of the sea or other navigable waters; …

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I think it desirable to deal first with the finding of the learned trial judge that the accident leading to the jettisoning of the cargo in this case appeared to him “to be a consequence of the perils of the sea as mentioned in Article IV, paragraph 2, subparagraph (c)…”. If this finding were to be upheld it would dispose of the case as the statute relieves the carrier from all responsibility for loss or damage arising or resulting from perils of the sea, and it therefore appears to me to be important to give priority to a consideration of the reasons which led the learned trial judge to his conclusion.

In reaching his conclusion Mr. Justice Dumoulin relies inter alia on the comment made in para. 162 of Carver’s Carriage by Sea, 11th ed., vol. 2 at page 163, where the learned author says of the phrase “perils of the sea”:

Upon this, it must be remarked that by English law the losses need not be extraordinary, in the sense of arising from causes which are uncommon. Rough seas which are characteristically sea perils, are common incidents of a voyage. But damage arising from them, whether by their beating into the ship, or driving her on to rocks, is within the exception, if there has been no want of reasonable care and skill in fitting out the ship and in managing her.

This statement purports to be based on certain observations made by Lord Wright in Canada Rice Mills Limited v. Union Marine and General Insurance Company[1], which was an action on a marine insurance policy insuring against the risk of loss by “perils of the sea”.

As various different shades of meaning have been attached to the phrase “perils of the sea”, I think it desirable to review some of the main authorities in which the issue was raised.

The case of Wilson Sons & Co. v. Owners of Cargo per The “Xantho”[2] was an action for breach of contract contained in bills of lading and Lord Herschell dealt with the defence of perils of the sea in the following terms:

The question, What comes within the term ‘perils of the sea’ (and certainly the words ‘dangers and acci-

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dents of the sea’ cannot have a narrower interpretation), has been more frequently the subject of decision in the case of marine policies than of bills of lading. I will first notice the decisions pronounced with regard to the former instrument, and then inquire how far a different interpretation is to be applied in the case of the latter.

I think it clear that the term ‘perils of the sea’ does not cover every accident or casualty which may happen to the subject-matter of the insurance on the sea. It must be a peril ‘of the sea. Again, it is well settled that it is not every loss or damage of which the sea is the immediate cause that is covered by these words. They do not protect, for example, against that natural and inevitable action of the winds and waves, which results in what may be described as wear and tear. There must be some casualty, something which could not be foreseen as one of the necessary incidents of the adventure. The purpose of the policy is to secure an indemnity against accidents which may happen, not against events which must happen. It was contended that those losses only were losses by perils of the sea, which were occasioned by extraordinary violence of the winds or waves. I think this is too narrow a construction of the words, and it is certainly not supported by the authorities, or by common understanding. It is beyond question, that if a vessel strikes upon a sunken rock in fair weather and sinks, this is a loss by perils of the sea.

Later in his reasons for judgment Lord Herschell referred to the judgment of Willes J. in Grill v. General Iron Screw Collier Company[3] as expressing the “true view” of the distinction between insurance and bills of lading cases. Willes J. there said:

I may say that a policy of insurance is an absolute contract to indemnify for loss by perils of the sea, and it is only necessary to see whether the loss comes within the terms of the contract, and is caused by perils of the sea; the fact that the loss is partly caused by things not distinctly perils of the sea, does not prevent its coming within the contract. In the case of a bill of lading it is different, because there the contract is to carry with reasonable care, unless prevented by the excepted perils. If the goods are not carried with reasonable care, and are consequently lost by perils of the sea, it becomes necessary to

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reconcile the two parts of the instrument, and this is done by holding that if the loss through perils of the sea is caused by the previous default of the shipowner, he is liable for this breach of his covenant.

It thus appears to me that even if the loss is occasioned by perils of the sea, the ship owner is nevertheless liable if he failed to exercise due diligence to make the ship seaworthy at the beginning of the voyage and that unseaworthiness was a decisive cause of the loss. This proposition is fully explored in the judgment of Lord Wright in Smith, Hoag v. Black Sea and Baltic.[4]

That part of Lord Herschell’s reasons for judgment in which he had said that in order to constitute a peril of the sea “There must be some casualty, something which could not be foreseen as one of the necessary incidents of the adventure” was, in my opinion, the statement which influenced Sir Lyman Duff when he gave the judgment of this Court in Canadian National Steamships v. Bayliss[5], a bill of lading case where he said of the defence of perils of the sea:

The issue raised by this defence was, of course, an issue of fact and it was incumbent upon the appellants to acquit themselves of the onus of showing that the weather encountered was the cause of the damage and that it was of such a nature that the danger of damage to the cargo arising from it could not have been foreseen or guarded against as one of the probable incidents of the voyage.

(The italics are my own.)

The case of Canada Rice Mills Limited v. Marine and General Insurance Company, supra, was an action on a marine insurance policy which had been tried before a jury in British Columbia. In that case damage had been caused to a cargo of rice as a result of overheating caused by ventilators and hatches carrying air into the place where the cargo was stored being closed owing

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to the heavy weather encountered by the ship, and the danger of the rice being soaked in sea water. The jury found that the closing of the ventilators and hatches was the proximate cause of the damage and also that the weather and sea during the time when the ventilators and hatches were closed was such as to constitute a peril of the sea. On those findings the trial judge entered a judgment in favour of the cargo owners but, at page 319, Mr. Justice Sloan, who rendered the majority judgment on behalf of the Court of Appeal of British Columbia, interpreted the jury’s finding that the proximate cause of the damage was the closing of the ventilators as meaning that:

The loss was not caused by a peril of the sea but (assuming weather conditions constituted a peril of the sea) as the result of a successful attempt of the ship’s officer to avoid damage to the rice by a peril of the sea. In the words of Lord Reading in Kacianoff v. China Traders Ins. Co., [1914] 3 K.B. 112 at 117, the closing of the ventilators was a fact ‘preventing the peril from operating, it was making it impossible that the peril should operate’…

A voluntary action taken in expectation or apprehension of peril is not a peril of the sea:…

In the course of his reasons for judgment, Mr. Justice Sloan considered the meaning to be given to the phrase “perils of the sea” and adopted the definition accepted by this Court in the Bayliss case.

In delivering the opinion of the Privy Council and reversing the judgment of the Court of Appeal, Lord Wright had occasion to say at page 70:

In their Lordships’ judgment it cannot be predicated that where damage is caused by a storm even though its incidence or force is not exceptional a finding of loss by perils of the sea may not be justified.

This statement, together with other observations made by Lord Wright in the same case, have sometimes been relied on as authority for the proposition that there need not necessarily be anything extraordinary or unexpected about the weather in order to constitute a peril of the sea,

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but I do not think that Lord Wright’s judgment affects the proposition that, in a bill of lading case, the damage done to the cargo must be shown to have occurred as a result of some peril “which could not have been foreseen or guarded against as one of the probable incidents of the voyage” before the defence of “perils of the sea” can be said to have been made out.

In the result, the Privy Council decided that the jury’s verdict was to be viewed in light of the fact

…that where the weather conditions so require, the closing of the ventilators is not to be regarded as a separate or independent cause, interposed between the peril of the sea and the damage, but as being such a mere matter of routine seamanship necessitated by the peril that the damage can be regarded as the direct result of the peril.

I think it must be remembered that this was a marine insurance case, that no question of “unseaworthiness” was at issue and that the weather which was alleged to constitute perils of the sea had included “a strong gale with hurricane-like squalls at times”. The most important difference between the Court of Appeal and the Privy Council was that Mr. Justice Sloan took the view that even assuming that the weather conditions constituted a peril of the sea, the loss was not caused by that peril but by the closing of the ventilators and hatches, whereas Lord Wright regarded the damage as being a direct result of the peril.

In Keystone Transports Limited v. Dominion Steel & Coal Corporation, Limited[6], which was a bill of lading case, Mr. Justice Taschereau quoted at length from the Canada Rice Mills case and concluded “that to constitute a peril of the sea the accident need not be of an extraordinary nature or arise from irresistible force. It is sufficient that it be the cause of damage to goods at sea by the violent action of the wind and waves, when such damage cannot be attributed to someone’s negligence.”

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Less than a year later, however, in the case of Vanish & Heimbecker Limited et al v. Burke Towing & Salvage Company Limited[7] (another bill of lading case), Mr. Justice Kerwin, speaking on behalf of the same members of this Court who had agreed with Mr. Justice Taschereau in the Keystone Transports case, founded his judgment in part upon Lord Herschell’s statement that there must be “something which could not be foreseen as one of the necessary incidents of the adventure,” in order to constitute a peril of the sea and proceeded to adopt the test which had been laid down by Sir Lyman Duff in the Bayliss case.

I do not think that Lord Wright’s judgment in the Canada Rice Mills case is to be read as being in conflict with the law stated by Lord Herschell in The “Xantho” at page 509 where he said:

It must be a peril ‘of’ the sea. Again, it is well settled that it is not every loss or damage of which the sea is the immediate cause that is covered by these words. They do not protect, for example, against that natural and inevitable action of the winds and waves, which results in what may be described as wear and tear.

The test adopted by Sir Lyman Duff in the Bayliss case was again applied in this Court in N. M. Paterson and Sons Limited v. Mannix Limited[8], where it was said of a vessel that had been transporting goods which were lost overboard:

In my opinion the evidence discloses that the weather which was encountered by the Wellandoc on the 9th of December, although it was rough, was of a kind which an experienced master should have foreseen as a probable incident of such a voyage at the time of year.

Mr. Justice Dumoulin expressed the view that in the present case “the uncontradicted facts prove that the dangers of navigation were unforeseeable” and he based this finding on a statement made by Captain Hovington that during two

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preceding sailing seasons and “during the summer of 1958, Hovington’s ship had made three or four trips to Newfoundland and two or three more from Montreal to Port Cartier and Seven Islands, carrying loads of creosoted timber.” Mr. Justice Dumoulin appears to infer from these statements that because Captain Hovington had sailed the waters in question in the summer season in years gone by without incident, it therefore followed that the weather he encountered in the waters beyond Cap Ray on the 9th, 10th and 11th of June 1959 was “unforeseeable.”

The Claudette V left Sorel at midnight on June 5th and after having stopped at Lévis and Médians, proceeded on her voyage to St. Bride’s, Newfoundland. No heavy weather of any kind was encountered until the vessel was abeam of Cap Ray at 0032 hours on the 10th of June when a gross swell and winds of between 15 and 20 miles an hour were encountered, but by 1900 hours on the evening of the 10th the swell had increased and a south-east wind was blowing at between 27 and 28 miles per hour. It was at this time that water started to flow into the engine room from underneath the floor, and this appears to have continued until the ship’s pumps could no longer control it. The chief engineer gave the following evidence as to the sequence of events in the engine room after 1900 hours:

[TRANSLATION] About 7 o’clock on June 10th (1900 hours), the water entered the engine room. It was 6 to 7 inches deep, but it continued rising below the deck where there was a space of about 3 feet. The captain hurried in. The pumps were working well. Soon after, the three engineers went down to the engine room. Hovington told me to leave the main engine running, but at about 2205 hours on the 10th the onslaught of water stopped the engine. At this point there was a depth of nearly 5 feet of water above the deck in the engine room.

The condition of the weather at 1900 hours on the 10th of June appears to me to be of vital importance as I conclude that this was the time when the water started to flow into the ship owing to the weakness of its hull and that the influx continued steadily until the vessel was abandoned at 3 o’clock the next morning.

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The evidence of the chief engineer is, in my view, a strong indication of the fact that the hull was too weak to withstand the weather which was encountered at 1900 hours without leaking.

The respondents’ case in this regard was predicated on the assumption that at 1900 hours on June 10th the

Claudette V. being in the vicinity of Burgeo Bank about 65 miles east of Cap Ray and experiencing southeast winds of force 8 (Beaufort scale) together with rough seas, she began making water beyond the capacity of her bilge pumps. At 2100 on the same day the wind was force 9 and still increasing.

There is an obvious misunderstanding as to the force of the wind at the times mentioned and I think this must be due to the fact that Captain Hovington appears to have thought that force 7 to 8 on the Beaufort scale was represented by a wind of 27 or 28 miles an hour, which is in fact equivalent to force 6 or 7 on the Beaufort scale, and which Captain Hovington described as “normal”. On the Beaufort scale a force 6 wind is characterized as a strong breeze between 22 and 27 knots, whereas force 7 is designated as a moderate gale between 28 and 33 knots and a force 8 wind is a fresh gale of 34 to 40 knots per hour, while a force 9 wind is a strong gale of 41 to 47 knots.

I think it desirable at this point to quote from Captain Hovington’s evidence as to the weather at the time when the water first entered the vessel (1900 hours). His evidence was:

[TRANSLATION] Q. What was the force of the wind when the water entered the hold?

A. … between seven and eight.

Q. Force seven (7) to eight (8). That is on the Beaufort scale?

A. Yes.

THE COURT:

Q. Force 7 to 8?

A. That means twenty-seven (27) to twenty-eight (28) miles an hour.

M^e ÉDOUARD BEAUDRY, for the plaintiff:

Q. You say that means twenty-seven (27) to twenty-eight (28) miles an hour?

A. On the average.

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M^e LÉOPOLD LANGLOIS, Q.C., for the defendants:

Q. What force?

A. Seven to eight.

M^e ÉDOUARD BEAUDRY, for the plaintiff:

Q. At that point did you regard a wind of twenty-seven (27) to twenty-eight (28) miles an hour, and the swell—you indicated seven (7) to eight (8) feet—as being unusual?

A. No, it was normal. It was not a storm.

Q. So it was what you might expect in that area?

A. Definitely. You expect anything in Newfoundland, where weather is concerned.

THE COURT:

Q. That was on the tenth (10th) of June?

A. Yes, your honour.

M^e ÉDOUARD BEAUDRY, for the plaintiff:

Q. How did the water enter the ship?

A. I don’t know.

Q. Could it have come in the No. 1 hold, or by the hatch on No. 1? Could the water have entered forward?

A. No.

As the ship continued to take on increasing quantities of water, Captain Hovington turned her broadside to the wind and at 2115 on the 10th he allegedly cut the steel cable securing deck cargo. He was unable to estimate the force of the wind at this time other than to say that it was [Translation] “…twenty-five (25), thirty-five (35), forty and upwards”, and he also said: [Translation] “At that point it was rather difficult to check the wind velocity; I had too much work to do.”

At 3 a.m. on the morning of June 11th, he sent out a distress signal and ordered his crew to abandon the vessel. The reason given for this action in the defendant’s pleading is that “The main and auxiliary engines had been stopped by the rising water in the vessel which had become water logged” and as I have indicated, that process had started at 1900 hours on the 10th when the weather encountered by the Claudette V was in my view such as should have been foreseen as one of the probable incidents of a voyage in the waters in question.

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The Chief Meteorologist in Gander, Newfoundland, who had acted in that capacity for the past 12 years and had had 27½ years’ experience as a meteorologist, testified on behalf of the plaintiff as to weather conditions in the area in question at 2130 hours on June 10th and he said:

St. Pierre showed force 4, Grand Banks just north of Saint Pierre showed force 4, St. Andrew’s, Newfoundland which is near Cap Ray and about 100 miles north of the center showed only force 3 and the report from the U.S. Naval Vessel Ingham about 100 miles south of Burin showed a force 5.

It should perhaps be mentioned that a force 4 wind is a moderate breeze of 11 to 16 knots per hour and force 5 is a fresh breeze of 17 to 21 knots. This meteorologist also testified that it was not until 3:30 p.m. that afternoon of June 11th that any reports came from Cap Ray indicating that the winds had increased to force 8.

As I have indicated, I am of opinion that by invoking art. 4(2) (c) of the Schedule to the Water Carriage of Goods Act and raising the defence of perils of the sea, the respondents assumed the onus of showing that the weather encountered was the cause of the damage and that it was of such a nature that the danger of damage to the cargo arising from it could not have been foreseen or guarded against as one of the probable incidents of the voyage. I think that the damage to the cargo in this case arose from the fact that the hull was not sufficiently strong to withstand the weather encountered at 1900 hours on the 10th of June. The incursion of water at that time increased steadily as the weather worsened, but I am not satisfied that the evidence called by the respondents, and particularly that of its master, discharges the onus of proving that the loss was occasioned by “perils of the sea”.

It remains to be considered whether the respondent company and the ship’s owner had exercised due diligence to make the Claudette V seaworthy “before and at the beginning of the voyage”.

In this regard the first question to be determined is whether or not the evidence discloses that the Claudette V was unseaworthy.

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The test of seaworthiness most frequently adopted is to be found in the judgment of Lord Herschell in Gilroy Sons & Co. v. Price & Co.[9], where he said:

That the ship should be in a condition to encounter whatever perils of the sea a ship of that kind, and laden in that way, may be fairly expected to encounter in crossing the Atlantic, or in performing whatever is the voyage to be performed.

The learned trial judge based his finding that the Claudette V was seaworthy on the evidence of government inspectors and officials of insurance companies. His conclusion in this regard is phrased as follows:

I therefore feel that the Claudette V’s seaworthiness at the time of her ill-fated trip was satisfactorily established by the government inspectors and officials of the marine insurance companies.

The government inspector who certified the ship to be seaworthy on October 28, 1958 and again on April 23, 1959, was one Jean Lebas, steamship inspector at Quebec for the Department of Transport. The inspection in 1958 was a routine annual inspection and must be read together with the record of the short-term certificate issued by Robert Baird on August 6, 1958 which classed the Claudette V as a home trade Class 1 vessel.

The last paragraph of Mr. Lebas’ report of October 28th reads as follows:

I have considered this vessel seaworthy and fully equipped for the intended voyages. Inspection certificate form S.I.C. 17, issued 6.8.58, expired on 3.10.58, was extended to its full term, ending on August 5th, 1959, by Inspector Lebas, at St. Laurent, O.I. on October 31st, 1958.

The inspection held on April 3, 1959, followed upon the vessel having run aground at Grondine and after repairs had been made on this date, Mr. Lebas again certified that he considered the ship seaworthy.

It is argued on behalf of the respondents that proof of these certificates constitutes prima facie

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evidence not only that the ship was seaworthy but that due diligence was taken by the owners to make it so. These certificates must, however, in my opinion, be read in conjunction with the evidence given at the trial by Mr. Lebas where he testified that the cause of the incursion of water into the engine room of the Claudette V was the inherent weakness of its hull. At the outset of his examination-in-chief, Mr. Lebas was asked to give his opinion as to what was the cause of the inrush of water into the vessel. His evidence in this regard reads as follows:

[TRANSLATION] Q. Mr. Lebas, knowing the Claudette V as you did, and knowing the circumstances of the accident which is the subject of this action, according to the testimony you have now heard in this Court, can you say what, in your opinion, was the cause of this ship being flooded by water?

A. I think I must make a brief interjection in the case of the Claudette V, formerly Lady Cecil, which I inspected for the first time in about nineteen fifty-four (1954), and other similar vessels, such as the Carlisle Bay and the Marsoui. In general I could observe the same defects and the same weaknesses. In my opinion it is very likely that the rush of water into the vessel was caused by the inherent structural weakness of wooden ships. This is not to say…

THE COURT:

Q. Excuse me—the inherent weakness…

A. … in the structure of wooden ships. This in no way implies a shipbuilding defect, and certainly not in the case of the Claudette V.

It is likely that the flooding of the vessel was caused by the stress inflicted on it for, if I remember correctly, some fifty-five (55) hours by long deforming waves; and this stress forced open the planking and the plank joints.

It should, I think be pointed out that Mr. Lebas’ memory is in error when he says that the vessel was subject to the stress of deforming waves for 55 hours; the fact is that, as I have indicated, the ship began to encounter a long head swell at 0032 hours on the 10th and the captain abandoned the ship at between 0300 and 0400 on the 11th. I have, however, indicated the nature of the weather in the summary already given.

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It is to be noted that Mr. Lebas considered it very likely that the incursion of sea water into the boat was caused by inherent weakness. Mr. Lebas apparently had formed the opinion that the same weaknesses were present in all wooden ships, although he only refers to two such ships. It is indeed a sweeping indictment of wooden ships to say that they all suffer from an inherent weakness which disables them from sailing in normal weather (such as that encountered by the Claudette V at 1900 on June 10th) on a voyage to Newfoundland in the summertime. Whether or not Mr. Lebas’ opinion as to the inherent weakness of all wooden ships can be supported, the fact remains that he considered the Claudette V to be suffering from such a weakness and that notwithstanding this, he issued an official document certifying that she was seaworthy for the intended voyage. It was this inherent weakness which in his opinion caused the disaster.

It was strongly contended on behalf of the appellant that the evidence of officials of insurance companies and others who saw the vessel after she had been salvaged establishes that the water must have entered the ship either through the main deck planking forward of No. 1 hatch or through holes in the main deck and forecastle rather than through the weakened hull of the ship. If it had been satisfactorily proved that the sea water entered the ship from either of these sources, it would, of course, afford additional evidence that the ship was unseaworthy, but I am not satisfied that the evidence is sufficiently clear to warrant a finding of unseaworthiness based on either of these theories.

It seems to have been assumed by the respondents that Lebas’ evidence as to inherent weakness and deterioration in the hull of the Claudette V did not constitute evidence of “unseaworthiness” within the meaning of the Water Carriage of Goods Act and this also appears to have been assumed by the learned trial judge. With the greatest deference, I do not share this opinion. On the contrary, I take the view that the weakness described by Lebas made the ship unseaworthy for the intended voyage and that this was a decisive cause of the loss. In this regard I refer to what

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was said by Lord Wright in Monarch Steamship Co. Ltd. v. Karlshamns Oljefabriker (A/B)[10] (a bill of lading case) where he said, at page 227:

But unseaworthiness as a cause, operates immediately whenever it comes into effect; it has until then only been dormant. The maxim causa proxima non remota spectatur is either meaningless or misleading until ‘remota’ and ‘proxima’ are defined. Thus unseaworthiness as a cause cannot from its very nature operate by itself; it needs the ‘peril’ in order to evince that the vessel or some part or quality of it, is less fit than it should have been and would have been if it had been seaworthy, and hence the casualty ensues. A fitter ship would have passed through the peril unscathed. In this way unseaworthiness is a decisive cause or as it is called a dominant cause. If it is not expressly excepted, the shipowner cannot excuse himself by any specific exception for a loss for which he is himself responsible, because he is responsible for unseaworthiness.

It is true that in making this statement Lord Wright was speaking only for himself and Lord Uthwatt and that the other three members of the Court did not find it necessary to deal with this aspect of the matter, but I do not think that this reflects on the validity of Lord Wright’s reasoning.

In the case of Maxine Footwear Company Ltd. et al v. Canadian Government Merchant Marine Ltd.[11], it was said on behalf of the Privy Council, at pages 602 and 603, when speaking of the Schedule to the Canadian Water Carriage of Goods Act:

Article III, rule 1, is an overriding obligation. If it is not fulfilled and the non-fulfilment causes the damage the immunities of article IV cannot be relied on. This is the natural construction apart from the opening words of article III, rule 2. The fact that that rule is made subject to the provisions of article IV and rule 1 is not so conditioned makes the point clear beyond argument.

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Where the ship is found to have been unseaworthy the ship owner is seized with the burden of proving that he exercized due diligence to make her so, if he is to escape liability. When the Maxine Footwear case, supra, was heard in this Court[12], a dissenting judgment was delivered by Mr. Justice Cartwright (as he then was). The dissenting reasons for judgment were affirmed in the Privy Council and in the course of them Mr. Justice Cartwright adopted the following definition of the due diligence required by art. III, Rule 1:

‘Due diligence’ seems to be equivalent to reasonable diligence, having regard to the circumstances known, or fairly to be expected, and to the nature of the voyage, and the cargo to be carried. It will suffice to satisfy the condition if such diligence has been exercised down to the sailing from the loading port. But the fitness of the ship at that time must be considered with reference to the cargo, and to the intended course of the voyage; and the burden is upon the shipowner to establish that there has been diligence to make her fit.

It is not enough to satisfy the condition that the shipowner has been personally diligent, as by employing competent men to do the work. The condition requires that diligence to make her fit shall, in fact, have been exercised, by the shipowner himself, or by those whom he employs for the purpose. The shipowner ‘is responsible for any shortcoming of his agents or subordinates in making the steamer seaworthy at commencement of the voyage for the transportation of the particular cargo.’ (Per Brown Dist. J. in The Frey (1899), 92 F.667).

‘The obligation to make a ship seaworthy is personal to the owners, whether or not they entrust the performance of that obligation to experts, servants or agents.’ (Per Lord Wright in Northumbrian Shipping Company Limited v. E. Timm and Son, Limited, [1939] A.C. 397 at 403, [1939] 2 All E.R. 648). If such experts, servants or agents fail to exercise due diligence to make her seaworthy the owners are liable under Art. III, r. 1 of the Rules.

The burden of proving the exercise of due diligence which is placed upon the carrier under the provisions of art. IV(1) can only be discharged by affirmative proof that due diligence was exer-

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cised to make the ship seaworthy. In the present case the only such evidence adduced by the respondents in discharge of this burden was the production of a certificate of seaworthiness signed by a steamship inspector appointed by the Department of Transport. This is not in my opinion sufficient to discharge the statutory onus and any reliance placed upon it must be further weakened by the fact that it appears to have been known to the inspector who issued the certificate that the vessel suffered from an inherent weakness. The preponderance of evidence is that it was this weakness which caused the loss.

I agree with the learned trial judge that no case of negligence was made out against Captain Hovington and this appeal should be dismissed in so far as he is concerned.

The respondents also claim to be entitled to limit their liability on the ground that there is no evidence that the loss occurred as a result of “fault or privity” on behalf of either of them. As to this claim it should first be said that the burden of proof rests upon those who put it forward, and that the fact that there may be no evidence to show that the loss occurred as a result of “fault or privity” does not entitle the respondents to limit their liability.

The respondents allege that the charter to the respondent company was a demise charter and that company was therefore the owner of the vessel for the purpose of the voyage in question, and it is further alleged that as Verreault was not on board the vessel at any material time and as he took no part in the stowage or carriage of the lost cargo, he should escape liability.

I do not think that there is sufficient evidence to make it possible to determine the nature of the verbal charter between Verreault and his company, and I think further that this position as registered owner placed a burden upon him to satisfy the provisions of the Water Carriage of Goods Act.

In any event, I am of opinion that Verreault cannot be said to have been a mere servant or

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agent of the company. He was somebody for whose faults the company was liable because his actions were the very actions of the company itself. (See Robin Hood Mills v. Patterson Steamship Limited)[13].

For all these reasons I would allow this appeal and direct that judgment be entered against Borromée Verreault and Verreault Navigation Inc. in the amount of $53,426.33 being the value of the timber loaded plus the admitted portion of the salvage award less the salvage value still remaining after the casualty, together with interest on this award at five per cent from June 11, 1959, which is the date upon which the cargo should have been delivered; the whole with costs in this Court and in the court below.

The cross-appeal is dismissed with costs.

Appeal allowed with costs; cross-appeal dismissed with costs.

Solicitors for the plaintiff, appellant: Brisset, Reycraft, Bishop & Davidson, Montreal.

Solicitors for the defendants, respondents: Langlois, Langlois & Gaudreau, Quebec.