The issue in this case was whether the tug owner’s P&I policy offered coverage in respect of loss of or damage to cargo on board a barge. The barge and cargo were owned by the same person and were being towed by the tug owner pursuant to a contract of towage at the time of the loss. The insurer denied coverage on the basis of a clause in the policy that excluded "all liability in respect of cargo ". The tug owner relied on the wording of a Tower’s Liability endorsement which extended coverage to the "tow or the freight thereof or to the property on board ". Both the trial Judge and the Court of Appeal held that the cargo exclusion in the policy applied only to cargo on board the insured vessel (i.e.. the tug) and not to cargo on board the barge which was owned by the cargo owner and not insured under the policy. Further, it was held that the word "freight " in the endorsement meant goods transported in a vessel. In result, there was coverage under the policy.