Oceanex Inc. v. Praxair Canada Inc.

In Carriage of Goods by Sea on (Updated )

Précis: The shipper was held liable for damage caused to the ship as a consequence of a rupture of a container of liquid oxygen.

Facts: The ship “Cabot” was damaged while discharging cargo when a 20 foot tank container filled with liquid oxygen ruptured. The escaped liquid oxygen fell onto the ship’s plating causing it to become extremely brittle which ultimately led to the plate cracking. The ship owner brought this action against the defendant, the lessee of the container, for the costs to repair the ship and for loss of revenue during the nine days required to repair the ship. The defendant counterclaimed against the ship for the damage to the container. The defendant alleged that the carrier had dropped or mishandled the container resulting in damage to the bottom railings and a misalignment of the piping which caused increased pressure on the valves and the leak. The defendant further challenged the damages claimed. In particular, the defendant argued that the plaintiff could not recover the costs of forwarding other cargoes to their consignees as it could have declared an event of force majeure.

Decision: Judgment for the ship owner.

Held: The evidence established that the container was leaking from two fire block valves, the purpose of which is to seal the tank in the event of a fire. The evidence further established that these valves had leaked previously and only one of them had been tightened. The valves leaked because they had not been sufficiently tightened and not because of the damage to the bottom rails of the container which, in any event, did not occur during or in connection with the voyage. Pursuant to the Consolidated Transportation of Dangerous Goods Regulations, dangerous goods must be loaded by the shipper in a “means of containment” to prevent damage. Also, at common law, a carrier is not liable for damage caused by insufficiency of packing. Concerning damages, the ship owner’s duty to mitigate did not require it to jeopardize its contracts with others by claiming force majeure. The costs of forwarding other cargoes to their consignees was recoverable.