Voest-Alpine Stahl Linz GmbH (the plaintiff) was the owner of a cargo of 32 hot-dipped galvanized steel coils. Federal Pacific Ltd (the defendant) was the owner of the Federal St Clair (now renamed the Hui Fu). The cargo was manufactured in Austria in September 1993. The cargo was transported to Antwerp and loaded on board the Federal St Clair on 15 November 1993. The vessel arrived at Montreal on 30 November 1993. The cargo was unloaded from the ship in Montreal and then transported by truck from the harbour of Montreal to the warehouse of Samuel et Fils & Cie Ltée in Laval. It was not until February 1994 that Samuel et Fils & Cie Ltée discovered that the cargo was damaged.

The plaintiff submitted that the cargo was received by the defendant in good order and condition at Antwerp as evidenced by the bill of lading. The plaintiff contended that the cargo was damaged whilst under the care, custody and control of the defendant, ie during the voyage from Antwerp to Montreal, due to condensation and water ingress. The plaintiff submitted that it had met the burden of proof as provided for under the Hague-Visby Rules and consequently, a presumption of liability lay against the defendant. The plaintiff submitted that the defendant had failed to establish that the damage was attributable to one of the exceptions set out in the Hague-Visby Rules. The plaintiff submitted that a survey showed that the cause for damage was attributed to contact with water at some point in transit. According to the expert evidence, damage occurred on the vessel due to its wet condition in the holds.

The defendant submitted that the damage did not occur during sea carriage. The defendant further submitted that the burden rested with the plaintiff, since the damage was concealed; and that the plaintiff had to prove that the cargo was loaded in good condition and received in damaged condition. The packing of this particular cargo suggested that damage could have occurred at any time during its long history of transportation from Austria to Montreal.

Held: Judgment for the plaintiff.

The only issue that this Court needs to determine is whether the damage to the cargo occurred during sea carriage. The burden of proof is the central issue. Initially, it is the plaintiff who has the burden of proof, and it must prove all six of the following facts: a) That the plaintiff is the owner of the goods and/or is the person entitled to make the claim; b) The contract or the tort (delict); c) That the person claimed against is the responsible person; d) That the loss or damage took place in the carrier’s hands. This is usually done by proving the condition of the goods when received by the carrier and their condition at discharge; e) The physical extent of the damage or the loss; f) The actual monetary value of the loss or damage.

This Court has to decide initially whether the plaintiff has met its burden of proof that the cargo was received in good order at Antwerp and that it was received in a damaged condition at the port in Montreal. Upon hearing the testimony of witnesses, the Court is convinced that the damage effectively occurred whilst under the care, custody and control of the defendant. Since the plaintiff has met its burden of proof, a presumption of liability lies with the defendant, who then has to demonstrate to the Court another cause for the loss and that due diligence was observed to make the vessel seaworthy at the beginning of the voyage in respect of the loss, or one of the exculpatory clauses. The defendant has not succeeded in rebutting the presumption that the cargo was loaded in good order and condition at the port of Antwerp, and the Court finds in favour of the plaintiff on this issue.

The plaintiff's second claim is that both the defendant as the shipowner and Fednav International Ltd (Fednav) as the time charterer are liable since they operated under a joint venture.

It is the Court's understanding that the usual role of a charterer is only to find space on a vessel. Once the time charterer has booked space on a vessel, it finds cargo and asks the carrier or the owner of the vessel to carry the cargo. Then, the carrier or the owner issues a bill of lading which becomes the contract of carriage between cargo interests and the carrier. It would therefore appear that in the absence of a specific undertaking, the theory of joint venture can only find application if upon the documents and the circumstances of the case it is apparent that such a venture was entertained.

There is no specific undertaking in the present case. Based on the theory of joint venture, the relevant documents, and the circumstances of this case, the plaintiff’s second argument must be rejected. The defendant is not engaged in a joint venture with Fednav for the delivery of the cargo