Walking A Fine Line - Bill Of Lading Stomps Liability For Cargo Theft

The Federal Court recently released the decision of Black & White Merchandising Co. Ltd. v. Deltrans International Shipping Corporation. The case involved the transportation and theft of over 8000 pairs of children's shoes. While the decision is silent as to the brand of the shoes, we can only assume the perpetrator was disappointed with his luck on the black market. The cargo loss resulted in a lawsuit brought by the consignee, with some interesting findings regarding liability and jurisdiction of the Federal Court.

Background

Black & White Merchandising Co. Ltd ("B&W") purchase the shoes from a Chinese manufacturer and hired Delmar International Inc. to transport the shoes from China to Montreal. Behind the scenes, Delmar hired Deltrans International Shipping Corporation as well as a logistics company, which in part arranged for storage.

Delmar dealt directly with B&W as to the various details of the shipping. Deltrans issued a through Bill of Lading on January 12, 2017, which indicated that the cargo was to be delivered to Montreal and the type of move was "CY/CY" ("container yard to container yard").

The goods made their way from China to Quebec, where they were then stored at Canchi's warehouse. Next, the cargo was to be "de-stuffed", repackaged, and transported to the B&W warehouse which was also in Quebec. The cargo, however, was stolen from the Canchi warehouse.

B&W asserted that Deltrans was responsible under the BoL and that it was reckless in hiring the storage facility. Deltrans denied liability as it no longer had possession of the cargo at the time of loss and had no role in arranging for the warehousing. It further argued that its contract of carriage ended upon delivering the goods to the CN yard, prior to being taken to Canchi.

B&W argued that the BoL, on its face, did not fully capture the entire delivery. It was standard practice in its dealings with Delmar that deliveries would go to the B&W warehouse. Deltrans argued that, if there was some agreement between Delmar and B&W for further delivery beyond the Canchi warehouse, that was beyond the scope of its contract of carriage.

Deltrans brought a motion to strike the Statement of Claim. It argued that the contract of carriage had ended and thus the Federal Court did not have jurisdiction over the claim. Secondly, Deltrans brought a motion for summary judgment on the basis that it had discharged its obligations under the BoL. Deltrans also relied upon a clause in the...