Boutique Jacob Inc. v. Pantainer Ltd. et al., 2006 FC 217

• Judge: de Montigny, J.
• Court: Federal Court (Canada)
• Case Date: February 20, 2006
• Jurisdiction: Canada (Federal)
• Citations: 2006 FC 217;(2006), 288 F.T.R. 78 (FC)

Boutique Jacob Inc. v. Pantainer Ltd. (2006), 288 F.T.R. 78 (FC)

MLB headnote and full text

Temp. Cite: [2006] F.T.R. TBEd. MR.002

Boutique Jacob Inc. (plaintiff) v. Pantainer Ltd. and Panalpina Inc. and Orient Overseas Container Line Ltd. and Canadian Pacific Railway (defendants) and Pantainer Ltd. (plaintiff by counterclaim) and Orient Overseas Container Line Ltd. (defendant by counterclaim)

(T-39-04; 2006 FC 217)

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

Federal Court

de Montigny, J.

February 20, 2006.

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 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.

Agency - Topic 5032

Relations between agent and third parties - Contracts - Where agent contracts on behalf of principal - 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 - The Federal Court dismissed the action against Panalpina - Pantainer was the contracting party vis-à-vis Jacob and Panalpina was the agent at all times - An agent was not liable if it was clearly stated in the contract that he was contracting as an agent only on behalf of the principal - See paragraphs 4 and 5.

Bailment - Topic 3001

Liability of sub-bailees - General - [See second Shipping and Navigation - Topic 1803 ].

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 - See paragraphs 51 to 57.

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 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 - The CPR was clearly liable for the loss of Jacob's cargo pursuant to 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 contract with OOCL - The Federal Court held that s. 137 clearly provided that 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 and CPR, or between OOCL and CPR - In any event, the confidential agreement did not reduce CPR's liability - See paragraphs 42 to 50.

Shipping and Navigation - Topic 1803

Carriage of goods - Liability of carrier - General - 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 - The Federal Court held that Pantainer was liable as a contracting carrier for any and all damages sustained by the cargo unless it could limit its liability - The limitation clause in the bill of lading provided that liability was limited by the CRM Convention (for railways) or by any national transport law mandatorily applicable or if no such law was applicable, the maximum liability as provided for in s. 7.1(b) of the bill of lading - The CRM Convention did not apply as it was never ratified in Canada - The Canada Transportation Act could not be considered as a "national transport law mandatorily applicable" - Accordingly, s. 7.1(b) of the bill of lading applied and Pantainer could not be held liable for more than $1,976.40 for each bill of lading - As the cargo lost was covered by two bills of lading, the total liability was for $3,952.80 - See paragraphs 6 to 18.

Shipping and Navigation - Topic 1803

Carriage of goods - Liability of carrier - General - 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 - The Federal Court dismissed the action against OOCL - OOCL was liable as a sub-bailee - At issue was whether Jacob was bound by the conditions (including a liability limitation) found in OOCL's terms and conditions - An authorization to sub-contract the whole or any part of the carriage of goods "on any terms" demonstrated that the owner had "expressly consented" to the sub-bailment of their goods on any terms - Given the circumstances, Pantainer had knowledge of OOCL's standard terms due to previous dealings, the course of dealing and the fact that nothing in the terms that OOCL relied on was unduly burdensome or unconscionable in the commercial context - Further, the conditions were similar to those accepted by Jacob in Pantainer's bill of lading - Pursuant to clause 4(B)(a)(viii) OOCL was totally exempt from liability - See paragraphs 19 to 35.

Shipping and Navigation - Topic 2604

Carriage of goods - Liability - Limitations - General - Himalaya clause - 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 - OOCL sought to limit their liability based on a Himalaya clause in Pantainer's bill of lading - It purported to limit the liability of Pantainer's subcontractors and agents involved in the carriage of the cargo - The Federal Court dismissed the action against OOCL - See paragraphs 36 to 38.

Cases Noticed:

Chartwell Shipping Ltd. v. Q.N.S. Paper Co., [1989] 2 S.C.R. 683; 101 N.R. 1; 26 Q.A.C. 81, refd to. [para. 5].

Vlassopulos (N. & J.) Ltd. v. Ney Shipping Ltd.; Ship Santa Carina, Re, [1977] 1 Lloyd's Rep. 478 (C.A.), refd to. [para. 5].

Canada Steamship Lines Ltd. v. R., [1952] A.C. 192 (P.C.), refd to. [para. 15].

Tahsis Pacific Region v. Ship Beltimber - see Canadian Pacific Forest Products Ltd. v. Belships (Far East) Shipping (Pte.) Ltd. et al.

Canadian Pacific Forest Products Ltd. v. Belships (Far East) Shipping (Pte.) Ltd. et al., [1999] 4 F.C. 320; 243 N.R. 287 (F.C.A.), refd to. [para. 16].

Canadian National Railway Co. v. Harris, [1946] S.C.R. 352, refd to. [para. 23].

Canadian Forest Products Ltd. v. B.C. Rail Ltd. et al. (2005), 214 B.C.A.C. 174; 353 W.A.C. 174; 2005 BCCA 369, refd to. [para. 23].

Miida Electronics Inc. v. Mitsui O.S.K. Lines Ltd. and ITO-International Terminal Operators Ltd., [1986] 1 S.C.R. 752; 68 N.R. 241, refd to. [para. 24].

Morris v. Martin, [1966] 1 Q.B. 716, refd to. [para. 26].

Ship K.H. Enterprise (Cargo Owners) v. Ship Pioneer Container, [1994] 2 A.C. 324; 166 N.R. 207 (P.C.), refd to. [para. 27].

Singer Co. (U.K.) Ltd. v. Tees and Hartlepool Port Authority, [1988] 2 Lloyd's Rep. 164 (P.C.), refd to. [para. 27].

Punch v. Savoy's Jewellers Ltd. et al. (1986), 14 O.A.C. 4 (C.A.), refd to. [para. 28].

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. 28].

Anticosti Shipping Co. v. St. Amand, [1959] S.C.R. 372, refd to. [para. 31].

Midland Silicones Ltd. v. Scruttons Ltd., [1961] 2 Lloyd's Rep. 365 (H.L.), refd to. [para. 38].

New Zealand Shipping Co. v. Satterthwaite (A.M.) & Co.; Ship Eurymedon, Re, [1974] 1 Lloyd's Rep. 534 (P.C.), refd to. [para. 38].

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. 38].

Sumitomo Marine & Fire Insurance Co. v. Canadian National Railway Co., [2004] J.Q. no 11243, refd to. [para. 46].

Royal Insurance Co. of Canada v. Canadian National Railway Co., [1999] J.Q. no 812, refd to. [para. 46].

Penvidic Contracting Co. v. International Nickel Co. of Canada Ltd., [1976] 1 S.C.R. 267; 4 N.R. 1, refd to. [para. 53].

Authors and Works Noticed:

Carver, Thomas Gilbert, Carriage of Goods by Sea (13th Ed. 1982), vol. 1, para. 4 [para. 22].

Chitty on Contracts (26th Ed. 1989), vol. 2, para. 3160 ff. [para. 22].

Halsbury's Laws of England (1993) (4th Ed. - Reissue), p. 351 [para. 22].

Kahn-Freund, Otto, The Law of Carriage by Inland Transport (4th Ed. 1965), pp. 193, 194 [para. 23].

Tetley, William, Marine Cargo Claims (4th Ed.), c. 13, p. 12 [para. 52].

Counsel:

Kenrick Sproule, for the plaintiff;

Eric Préfontaine, for the defendants, Pantainer Ltd. and Panalpina Inc., and plaintiff by counterclaim Pantainer Ltd.;

David G. Colford, for the defendant and defendant by counterclaim, Orient Overseas Container Line Ltd.;

Karine Joizil, for the defendant, Canadian Pacific Railway.

Solicitors of Record:

Law Offices of J. Kenrick Sproule, Montreal, Quebec, for the plaintiff;

Stikeman, Elliott, Montreal, Quebec, for the defendants, Pantainer Ltd. and Panalpina Inc. and plaintiff by counterclaim, Pantainer Ltd.;

Brisset Bishop, Montreal, Quebec, for the defendant and defendant by counterclaim, Orient Overseas Container Line Ltd.;

Fasken Martineau Dumoulin, LLP, Montreal, Quebec, for the defendant, Canadian Pacific Railway.

This action was heard on September 19 and 20, 2005, at Montreal, Quebec, by de Montigny, J., of the Federal Court, who delivered the following judgment on February 20, 2006.