Date: 20020121
Docket: A-473-00
Neutral citation: 2002 FCA 28
CORAM: STONE J.A.
ACTION IN REM AGAINST THE VESSEL CANMAR CONQUEST
AND IN PERSONAM AGAINST GUARDIAN INSURANCE
COMPANY OF CANADA AND CANADA MARITIME LIMITED
BETWEEN:
RAINBOW TECHNICOLOURED WOOD VENEER LTD.,
ALL THOSE PERSONS HAVING AN INTEREST
IN THE CARGO LADEN ON BOARD
THE VESSEL "CANMAR CONQUEST"
Appellants
and
GUARDIAN INSURANCE COMPANY OF CANADA,
CANADA MARITIME LIMITED,
THE OWNERS AND CHARTERERS
OF THE VESSEL "CANMAR CONQUEST",
THE VESSEL "CANMAR CONQUEST"
Respondents
Heard at Montreal, Quebec, on January 21, 2002.
Judgment delivered from the Bench at Montreal, Quebec, on January 21, 2002.
REASONS FOR JUDGMENT OF THE COURT BY: STONE J.A.
Date: 20020121
Docket: A-473-00
Neutral citation: 2002 FCA 28
CORAM: STONE J.A.
ACTION IN REM AGAINST THE VESSEL CANMAR CONQUEST
AND IN PERSONAM AGAINST GUARDIAN INSURANCE
COMPANY OF CANADA AND CANADA MARITIME LIMITED
BETWEEN:
RAINBOW TECHNICOLOURED WOOD VENEER LTD.,
ALL THOSE PERSONS HAVING AN INTEREST
IN THE CARGO LADEN ON BOARD
THE VESSEL "CANMAR CONQUEST"
Appellants
and
GUARDIAN INSURANCE COMPANY OF CANADA,
CANADA MARITIME LIMITED,
THE OWNERS AND CHARTERERS
OF THE VESSEL "CANMAR CONQUEST",
THE VESSEL "CANMAR CONQUEST"
Respondents
REASONS FOR JUDGMENT OF THE COURT
(Delivered from the Bench at Montreal, Quebec
on January 21, 2002.)
[1] This is an appeal from a judgment of Dubé J. dated January 28, 2000, dismissing the appellant's claim that loss to its woodworking machine while being transported from Italy to Canada was not covered by a marine insurance policy issued to the appellant by the respondent insurer. That policy had attached to it the Institute Cargo Clauses (A).
[2] The record reveals that the manufacturer of the machine made arrangements with a third party at Borzano, Italy, where the machine was manufactured, to stow and secure it in a shipping container which the ocean carrier dropped off at the manufacturer's premises. After the stowing and securing was completed, the manufacturer placed the top on the container and it was sealed before the truck carrying it departed for the Port of Genoa where it was loaded on board the vessel M. V. "CANMAR CONQUEST" for carriage to Montreal.
[3] After the vessel arrived at Montreal it was discovered that the machine had been severely damaged during the transit because of shifting in the container. A number of marine cargo surveyors attended at Montreal to determine the extent of the damage and its cause after the container was opened for inspection. The machine was found to be a total loss. The surveyors who testified at trial were unanimous in the view that the damage resulted from inadequate securing of the machine inside the container. One of the surveyors, testifying as an expert witness, found the securing to be "totally inadequate and improper" and that the only evidence of securing were small pieces of 3 X 2 inch timber with nails driven through them. These nails were found to be "bent and twisted" and many pieces of timber "broken and heavily scored". Dubé J. accepted that evidence.
[4] Expert evidence led at trial with respect to the proper method of securing the machine in a shipping container such as that employed, was accepted by Dubé J. in determining that the machine had not been sufficiently stowed and secured before commencement of the transit. On the basis of that finding he concluded that coverage under the policy was excluded by Clause 4.3. In any event, he found that by Clause 8.1 of the policy coverage attached only from the time the goods left the manufacturer's premises for commencement of the transit. It was his view, at paragraph 13, that Clauses 4.3 and 8.1 were "crystal clear".
[5] The Institute Cargo Clauses (A) covers "all risks of loss of or damage to the subject matter except that provided in Clauses 4, 5, 6, 7". Clause 4.3 reads:
4. In no case shall this insurance cover
...
4.3 loss, damage or expense incurred by insufficiency or unsuitability of packing or preparation of the subject-matter insured (for the purpose of this Clause 4.3 "packing" shall be deemed to include stowage in a container or liftvan but only when such stowage is carried out prior to attachment of this insurance or by the Assured or their servants).
[6] Clause 8.1 of the policy describes the duration of coverage in the following terms:
8.1 This insurance attaches from the time the goods leave the warehouse or place of storage at the place named herein for the commencement of the transit, continues during the ordinary course of transit and terminates either
...
8.1.1. on delivery to the Consignees or other final warehouse or place of storage at the destination named herein, ...
[7] Four arguments are advanced by the appellant in favour of coverage under the policy. First, that the insufficiency of stowage is not excluded by Clause 4.3 so long as the assured was not responsible for the stowage. Second, and alternatively, any insufficiency of stowage occurred while the machine was in transit and, therefore, after attachment of coverage. Third, that Clause 4.3 contains a latent ambiguity which ought to be resolved in favour of the appellant. Fourth, where as here two proximate causes of the loss exist (insufficiency of stowage and heavy weather), the occurrence of the latter cause was sufficient to trigger coverage under the policy.
[8] The appellant focussed in oral argument on the assertion that the loss is not excluded by Clause 4.3 because under Clause 8.1 the insurance attached "from the time the goods leave the warehouse or place of storage ... for the commencement of the transit". The record suggests, however, that the shipping container in which the machine was stowed was dropped off at the manufacturer's premises and, further, that the machine was placed and stowed in the container before the truck on which it was loaded departed for the Port of Genoa. There is no evidence that the stowing and securing was done sometime after the transit commenced. In our view, therefore, the record does not support the appellant's contention that stowage in the container occurred after the attachment of the insurance.
[9] The remaining arguments may be conveniently considered together. The language of Clause 4.3 excludes coverage of goods which are insufficiently or unsuitably stowed in a container or liftvan for transit. However, this exclusion binds "only when such stowage is carried out prior to the attachment of this insurance or by the Assured or their servants". As we have stated, it is apparent from the record that the insufficiency or unsuitability of stowage of the machine in the shipping container was carried out before the transit of the machine commenced and, therefore, the loss is excluded by the clear wording of Clause 4.3. It is of no relevance, in our view, that neither the appellant nor its servants played any part in the stowage. We can detect no ambiguity in this regard in the language of the clause. Nor are we persuaded on the record before us and the Judge's findings that the cause of the loss was anything but the failure to sufficiently and suitably stow and secure the machine in the shipping container. As was found by Dubé J., it was this failure that allowed the machine to shift in stow during the transit from Italy to Canada and to become a total loss. To the extent the heavy weather may have been a contributing cause of the loss, it cannot be contended to be a proximate cause because such weather in the North Atlantic during winter months is to be anticipated as not out of the ordinary.
[10] For the foregoing reasons, the appeal will be dismissed with costs.
"A. J. Stone"
J.A.
FEDERAL COURT OF CANADA
APPEAL DIVISION
Date: 20020121
Docket: A-473-00
BETWEEN:
ACTION IN REM AGAINST THE VESSEL
CANMAR CONQUEST
AND IN PERSONAM AGAINST GUARDIAN
INSURANCE COMPANY OF CANADA
AND CANADA MARITIME LIMITED
BETWEEN:
RAINBOW TECHNICOLOURED WOOD VENEER LTD.,
ALL THOSE PERSONS HAVING AN INTEREST
IN THE CARGO LADEN ON BOARD
THE VESSEL "CANMAR CONQUEST"
Appellants
and
GUARDIAN INSURANCE COMPANY OF CANADA,
CANADA MARITIME LIMITED,
THE OWNERS AND CHARTERERS
OF THE VESSEL "CANMAR CONQUEST",
THE VESSEL "CANMAR CONQUEST"
Respondents
REASONS FOR JUDGMENT OF THE COURT
FEDERAL COURT OF CANADA
APPEAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-473-00
CORAM: STONE J.A.
EVANS J.A.
MALONE J.A.
STYLE OF CAUSE:
RAINBOW TECHNICOLOURED WOOD VENEER LTD.,
ALL THOSE PERSONS HAVING AN INTEREST
IN THE CARGO LADEN ON BOARD
THE VESSEL "CANMAR CONQUEST"
Appellants
and
GUARDIAN INSURANCE COMPANY OF CANADA,
CANADA MARITIME LIMITED,
THE OWNERS AND CHARTERERS
OF THE VESSEL "CANMAR CONQUEST",
THE VESSEL "CANMAR CONQUEST"
Respondents
PLACE OF HEARING: Montreal, Quebec
DATE OF HEARING: January 21, 2002
REASONS FOR JUDGMENT OF THE COURT BY STONE J.A.
DATED: January 21, 2002
APPEARANCES:
|
Mr. George J. Pollack |
FOR THE APPELLANTS |
|
Mr. David F.H. Marler |
FOR THE RESPONDENTS |
SOLICITORS OF RECORD:
|
Sproule Castonguay Pollack Montreal, Quebec |
FOR THE APPELLANT |
|
Marler & Associates Montreal, Quebec |
FOR THE RESPONDENT |