Graymar Equipment (2008) Inc. v. Cosco Pacific Shipping Ltd.

In Collisions and Ships, Discovery on (Updated )

Précis: The Federal Court ordered the defendant to pay damages arising from a collision between their moving container ship and a stationary scow.

Facts: On 28 October 2016 the Cosco Pacific was involved in an allision striking a stationary scow, the FRPD Rupert, and a derrick, the T.L. Sharpe, both of which were owned by the plaintiff Graymar and on charter to the plaintiff Fraser River. The scow and the derrick were part of a construction operation to extend a dock at the Fairview Container Terminal in Prince Rupert. The T.L. Sharpe was damaged, and it took eight days to repair. The Cosco Pacific had a pilot onboard who admitted liability and had a consent judgment entered against him for $1000.00 under his statutory limit of liability plus interests and costs. The plaintiffs claimed $513,955.53 for cost of repair, business interruption due to lost business of another derrick, the Peter D. Anderson, supervisory, construction and administrative staff expenses for those on site an additional eight day, and indirect costs for maintaining facilities, access roads, offices and project security for those additional eight days. With liability admitted, quantum proceeded by way of summary trial.

Decision: The defendants were jointly and severally liable to pay combined damages and pre-judgment interest of $485,506.89 to the plaintiff Fraser River. Failing payment, the Cosco Pacific is ordered to be sold with Fraser River to be paid out of the proceeds thereof.

Held: Fraser River had standing as bailee in possession to sue for both the cost of repair and business interruption. Graymar, as owner, had standing to sue for the cost of repair, but suffered no loss.

Without any contest by the defendants as to the cost of repairs, the Court accepted the cost of repairs of the T.L. Sharpe as $187,865.5. The $31,320.00 reduction in the plaintiffs’ claim arose after it was discovered in examination that the Peter D. Anderson was not idle for the whole 8 days. The defendants argued that the plaintiffs did not prove what business the Peter D. Anderson would have had and at what rate, which was said to be necessary for establishing a claim of business interruption and additional expenses with reasonable certainty in the shipping context. Yet, the defendants took no position on the cost of repairs for the Peter D. Anderson, and the Court allowed the claim less $31,320.00 for a total of $186,544.00.

As for costs to staff, the defendants argued that evidence including payrolls should have been tendered by the plaintiffs. Dismissing that argument, the Court found that on a motion for summary trial, such evidence is not needed and would be “excessive” to require evidence from the payroll master, as the project director’s affidavit contained the required evidence to support the claim. Without any cross-examination or other evidence tendered by the defendants, the Court found that no evidence of pay-stubs would be required. In reducing the overhead from 15% to 10%, the Court allowed the claim of $87,183.82 for supervisory construction and administrative staff expenses.

The claim for project security, maintenance of access roads and facilities and offices was disallowed as the Court could not say with any certainty that Fraser Rivers presence on site was extended solely due to the Costco Pacific. As the project with a joint venture between Fraser River and another contractor, it was not clear when Fraser River’s work was actually completed.