Boutique Jacob Inc. v. Pantainer Ltd. et al., (2008) 375 N.R. 160 (FCA)

• Judge: Noёl, Nadon and Pelletier, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: March 06, 2008
• Jurisdiction: Canada (Federal)
• Citations: (2008), 375 N.R. 160 (FCA);2008 FCA 85

Boutique Jacob Inc. v. Pantainer Ltd. (2008), 375 N.R. 160 (FCA)

MLB headnote and full text

Temp. Cite: [2008] N.R. TBEd. AP.059

Canadian Pacific Railway Company (appellant) v. Boutique Jacob Inc. (respondent) and Zim Integrated Shipping Services Ltd., A.P. Moller-Maersk A/S, Hapag-Lloyd Container Line GmbH, Safmarine Container Lines N.V., American Steamship Owners Mutual Protection and Indemnity Association Inc. et al. (intervenors)

(A-116-06; 2008 FCA 85)

Indexed As: Boutique Jacob Inc. v. Pantainer Ltd. et al.

Federal Court of Appeal

Noёl, Nadon and Pelletier, JJ.A.

March 6, 2008.

Summary:

Through the agency of Panalpina Inc., Boutique Jacob Inc. hired Pantainer Ltd. to carry cargo from Hong Kong to Montreal. In turn, Pantainer hired Orient Overseas Container Line Ltd. (OOCL) to carry the cargo. OOCL carried the cargo by sea to Vancouver. OOCL then hired Canadian Pacific Railway (CPR) to carry the cargo by rail from Vancouver to Montreal. There was a train derailment and the cargo was damaged and lost. Jacob sued Panalpina, Pantainer, OOCL and CPR. Negligence was not at issue. At issue was the liability of each defendant and damages.

The Federal Court, in a judgment reported (2007), 288 F.T.R. 78, dismissed Jacob's action against Pantainer, Panalpina and OOCL. The action against CPR was allowed in part and damages were assessed at $35,116.58. CPR appealed, submitting its liability was limited to $1,432.89. Boutique Jacob cross-appealed, submitting that damages should have been $71,550.47.

The Federal Court of Appeal allowed the appeal and dismissed the cross-appeal. Since CPR's liability was limited to $1,432.89 by either tariff or the Himalaya clause in the OCCL agreement, it was unnecessary resolve the issue raised by cross-appeal.

Damage Awards - Topic 1402

Contracts - Carriage contracts - Breach of - Through the agency of Panalpina Inc., Boutique Jacob Inc. hired Pantainer Ltd. to carry cargo from Hong Kong to Montreal - In turn, Pantainer hired Orient Overseas Container Line Ltd. (OOCL) to carry the cargo - OOCL carried the cargo by sea to Vancouver - OOCL then hired Canadian Pacific Railway (CPR) to carry the cargo by rail from Vancouver to Montreal - There was a train derailment and the cargo was damaged and lost - The cargo consisted of women's clothing and cost $33,598.64 - The Federal Court held that the CPR was liable for Jacob's losses - It was impossible for Boutique Jacob to replace the cargo - The court assessed Boutique Jacob's losses at its lowest discounted sales prices, which was agreed to be $35,116.58, rejecting Boutique Jacob's submission that its damages should be based on the average post-loss sales of goods of the same nature and style as the lost goods ($71,550.47) - The Federal Court of Appeal found it unnecessary to resolve the issue on Boutique Jacob's cross-appeal, where CPR's damage appeal was allowed and liability was limited to $1,432.89 in any event - See paragraph 60.

Damages - Topic 6628

Contracts - Carriage contracts - Breach by carrier - Meaning of "value" of goods - [See Damage Awards - Topic 1402 ].

Railways - Topic 5135

Operation - Carriage of goods - Limitation of liability - Through the agency of Panalpina, Boutique Jacob hired Pantainer to carry cargo from Hong Kong to Montreal - In turn, Pantainer hired OOCL to carry the cargo - OOCL carried the cargo by sea to Vancouver, then hired Canadian Pacific Railway (CPR) to carry the cargo by rail from Vancouver to Montreal - There was a train derailment and the cargo was damaged and lost - Jacob sued Panalpina, Pantainer, OOCL and CPR - CPR was clearly liable for the loss of Jacob's cargo under s. 137 of the Canada Transportation Act and ss. 4 and 5 of the Railway Traffic Liability Regulations - The CPR argued that its liability was limited by its confidential rate agreement with OOCL (i.e., Himalaya clause limiting liability to $1,432.89), of which Boutique Jacob had no knowledge - The trial judge held that s. 137 precluded CPR from relying on the Himalaya clause, because a railway company "shall not limit or restrict its liability to a shipper except by means of 'a written agreement'" - There was no written agreement between Jacob as shipper and CPR - In any event, the trial judge found that the agreement, by its terms, could not limit CPR's liability - The Federal Court of Appeal held that CPR was entitled to limit its liability to $1,432.89 - Section 137 did not apply because OCCL, not Boutique Jacob, was the "shipper" and there was a written agreement, as required by s. 137, between OCCL and CPR limiting liability - Boutique Jacob knew or ought to have known that the railway portion of the carriage might be performed by a sub-carrier (CPR) whose terms and conditions would apply to it - CPR, by reason of Tariff CPRS 7589, incorporated into the confidential rate contract with OCCL, was entitled to limit liability to that found in the OCCL bill of lading, which limited liability to $2 per kilogram ($1,432.89) - Alternatively, the Himalaya clauses in the OCCL and Pantainer bills of lading likewise limited liability - See paragraphs 32 to 59.

Shipping and Navigation - Topic 2604

Carriage of goods - Liability - Limitations - General - Himalaya clause - [See Railways - Topic 5135 ].

Cases Noticed:

Morris v. Martin, [1966] 1 Q.B. 716, refd to. [para. 16].

Ship K.H. Enterprise (Cargo Owners) v. Ship Pioneer Container, [1994] 2 A.C. 324; 166 N.R. 207 (P.C.), refd to. [para. 17].

Singer Co. (U.K.) Ltd. v. Tees and Hartlepool Port Authority, [1988] 2 Lloyd's Rep. 164 (P.C.), refd to. [para. 17].

Punch v. Savoy's Jewellers Ltd. et al. (1986), 14 O.A.C. 4 (C.A.), refd to. [para. 18].

Bombardier Inc. v. Canadian Pacific Ltd. - see Mitsubishi Electric Corp. et al. v. Canadian Pacific Ltd. et al.

Mitsubishi Electric Corp. et al. v. Canadian Pacific Ltd. et al. (1991), 52 O.A.C. 30; 85 D.L.R.(4th) 558 (C.A.), refd to. [para. 18].

Midland Silicones Ltd. v. Scruttons Ltd., [1961] 2 Lloyd's Rep. 365 (H.L.), refd to. [para. 24].

New Zealand Shipping Co. v. Satterthwaite (A.M.) & Co.; Ship Eurymedon, Re, [1974] 1 Lloyd's Rep. 534 (P.C.), refd to. [para. 24].

Fraser River Pile & Dredge Ltd. v. Can-Dive Services Ltd., [1999] 3 S.C.R. 108; 245 N.R. 88; 127 B.C.A.C. 287; 207 W.A.C. 287, refd to. [para. 24].

Canadian National Railway Co. v. Sumitomo Marine and Fire Insurance Co., [2007] J.Q. 7207; [2007] Q.C.C.A. 985, refd to. [para. 34].

Norfolk Southern Railway Co. v. Kirby (2004), 125 S. Ct. 385 (U.S.), refd to. [para. 34].

Statutes Noticed:

Canada Transportation Act, S.C. 1996, c. 10, sect. 6, sect. 113(1)(c), sect. 113(4), sect. 116(5), sect. 116(6), sect. 117(1), sect. 118, sect. 121(1), sect. 121(2), sect. 121(3), sect. 126 [para. 44]; sect. 137 [paras. 25, 44]; sect. 164 [para. 44].

Counsel:

David Rheault and Karine Joizil, for the appellant;

J. Kendrick Sproule and Shawn Faguy, for the respondent;

Jean-Marie Fontaine and Peter Pamel, for the intervenors.

Solicitors of Record:

Fasken Martineau DuMoulin, Montreal, Quebec, for the appellant;

J. Kendrick Sproule, Montreal, Quebec, for the respondent;

Borden Ladner Gervais LLP, Montreal, Quebec, for the intervenors.

This appeal and cross-appeal were heard on November 19, 2007, at Montreal, Quebec, before Noёl, Nadon and Pelletier, JJ.A., of the Federal Court of Appeal.

On March 6, 2008, Nadon, J.A., delivered the following judgment for the Court.