Paulin (H.) & Co. v. A Plus Freight Forwarder Co. et al., 2009 FC 727

• Judge: Harrington, J.
• Court: Federal Court (Canada)
• Case Date: July 16, 2009
• Jurisdiction: Canada (Federal)
• Citations: 2009 FC 727;(2009), 349 F.T.R. 192 (FC)

Paulin & Co. v. A Plus Freight (2009), 349 F.T.R. 192 (FC)

MLB headnote and full text

Temp. Cite: [2009] F.T.R. TBEd. AU.002

H. Paulin & Co. Ltd. (plaintiff) v. A Plus Freight Forwarder Co. Ltd., Scanwell Logistics (Toronto) Inc., Scanwell Logistics (Taiwan) Ltd. and Baltrans Logistics (Canada) Ltd. (defendants)

(T-1340-07; 2009 FC 727)

Indexed As: Paulin (H.) & Co. v. A Plus Freight Forwarder Co. et al.

Federal Court

Harrington, J.

July 16, 2009.

Summary:

In this action, Scanwell Logistics (Taiwan) Ltd., who issued "freight prepaid" shipping documents, counterclaimed for unpaid freight from H. Paulin Co. Ltd., the ultimate receiver, for the carriage of 29 containers of cargo from Taiwan to Vancouver by sea, and from there to Edmonton, Toronto and Montreal by rail. There were three distinct contracts of affreightment covering this multi-model transport. H. Paulin, the purchaser of the cargo, hired A Plus Freight Forwarder Co. Ltd., who hired Scanwell who in turn hired Orient Overseas Container Line Ltd. (OOCL). H. Paulin paid freight charges to A Plus and Scanwell paid OOCL. No one had paid Scanwell. A Plus was defunct. Having obtained judgment in Taiwan against A Plus, but being unable to collect, Scanwell looked to H. Paulin for payment. It asserted a number of reasons why H. Paulin was liable to it, one being that A Plus was its undisclosed agent, and another being that it was not bound by the "freight prepaid" documents it issued.

The Federal Court dismissed the counterclaim. Scanwell was bound by its representation that freight had been paid.

Shipping and Navigation - Topic 1944

Carriage of goods - Bills of lading - Effect of - In this action, Scanwell Logistics (Taiwan) Ltd., who issued "freight prepaid" shipping documents, counterclaimed for unpaid freight from H. Paulin Co. Ltd., the ultimate receiver, for the carriage of 29 containers of cargo from Taiwan to Vancouver by sea, and from there to Edmonton, Toronto and Montreal by rail - There were three distinct contracts of affreightment covering this multi-model transport - H. Paulin, the purchaser of the cargo, hired A Plus Freight Forwarder Co. Ltd., who hired Scanwell who in turn hired Orient Overseas Container Line Ltd. (OOCL) - H. Paulin paid freight charges to A Plus and Scanwell paid OOCL - No one had paid Scanwell - A Plus was defunct - Having obtained judgment in Taiwan against A Plus, but being unable to collect, Scanwell looked to H. Paulin for payment - It asserted a number of reasons why H. Paulin was liable to it, one being that A Plus was its undisclosed agent, and another being that it was not bound by the "freight prepaid" documents it issued - The Federal Court dismissed the counterclaim - Scanwell was bound by its representation that freight had been paid - The court stated that "[t]he entire contract as between the shipper and the carrier was not contained in the bills of lading. The overall contract included an obligation of the shipper to pay freight. Even if property passed in virtue of the bills of lading, the consignees' liability is under the Act 'as if the contract contained in the bill of lading had been made with himself'. That contract clearly stated that freight had been prepaid. The freight prepaid notation was a representation by the carrier, just as much as is a statement as to the apparent good order and condition of the cargo, or that the cargo has in fact been shipped on board. A deliberate misrepresentation by the issuance of a clean bill of lading when the cargo is obviously damaged is a conspiracy between the shipper and the carrier. It is a fraudulent representation made by the carrier with the intention that it be relied upon." - See paragraphs 35 to 63.

Cases Noticed:

Mount Royal/Walsh Inc. v. Ship Jensen Star et al. (1988), 17 F.T.R. 289 (T.D.), revd. in part [1990] 1 F.C. 199; 99 N.R. 42 (F.C.A.), refd to. [para. 17].

Ship Ardennes, Re (1950), 84 Lloyd's Rep. 340, refd to. [para. 27].

St. John Shipbuilding and Dry Dock Co. v. Kingsland Maritime Corp. et al. (1981), 43 N.R. 1; 126 D.L.R.(3d) 332 (F.C.A.), refd to. [para. 27].

MacWilliam (J.I.) Co. v. Mediterranean Shipping Co. SA; Ship Rafaela S, Re, [2005] Lloyd's Rep. 347; 331 N.R. 201; [2005] UKHL 11, consd. [para. 28].

Cami Automotive Inc. et al. v. Westwood Shipping Lines Inc. et al., Ship WSL Anette, Re (2009), 351 F.T.R. 236; 2009 FC 664, consd. [para. 28].

Jones v. European and General Express Co. (1920), 25 Com. Cas. 296, refd to. [para. 37].

Marston Excelsior Ltd. v. Arbuckle, Smith & Co., [1971] 2 Lloyd's Rep. 306 (C.A.), refd to. [para. 37].

Gillespie Brothers & Co. v. Bowles (Roy) Transport Ltd., [1973] 1 Lloyd's Rep. 10 (C.A.), refd to. [para. 37].

Morlines Maritime Agency Ltd. v. Iko Industries Ltd. (1999), 180 F.T.R. 12 (T.D.), refd to. [para. 38].

Ship Chastine Maersk v. Trans-Mar Trading Co., [1974] F.C.J. No. 1003 (T.D.), refd to. [para. 45].

Canadian Pacific Ships v. Industries Lyon Corduroys Ltée, [1983] 1 F.C. 736 (T.D.), refd to. [para. 46].

Mondel Transport Inc. v. Afram Lines Ltd., [1990] 3 F.C. 684; 36 F.T.R. 187 (T.D.), refd to. [para. 47].

American President Lines Ltd. v. Pannill Veneer Co., [1997] F.T.R. Uned. 539; 36 B.L.R.(2d) 1 (T.D.), refd to. [para. 47].

Mediterranean Shipping Co. S.A. v. BPB Westroc Inc. (2003), 238 F.T.R. 135; 2003 FC 942, refd to. [para. 47].

Morris v. Martin (C.W.) & Sons Ltd., [1966] 1 Q.B. 716; [1965] 2 Lloyd's Rep. 63 (C.A.), refd to. [para. 49].

Ship K.H. Enterprise (Cargo Owners) v. Ship Pioneer Container, [1994] 2 A.C. 324; 166 N.R. 207; [1994] 1 Lloyd's Rep. 593 (P.C.), refd to. [para. 49].

SGT 2000 Inc. v. Molson Breweries of Canada Ltd., 2007 QCCA 1364, dist. [para. 50].

2318-1654 Quebec Inc. v. Swiss Bank Corp. (Canada), [1996] Q.J. No. 3606 (S.C.), refd to. [para. 51].

Brown Jenkinson & Co. v. Percy Dalton (London) Ltd., [1957] 2 Lloyd's Rep. 1, refd to. [para. 60].

Authors and Works Noticed:

Palmer, N.E., Bailment (2nd Ed. 1991), pp. 1015, 1016 [para. 57].

Tetley, William, Marine Cargo Claims (3rd Ed. 1988), p. 692 [para. 38].

Counsel:

Marc Isaacs, for the plaintiff;

No one appearing for the defendant, A Plus Freight Forwarder Co. Ltd.;

Gavin Magrath and Sarah O'Connor, for the defendants, Scanwell Logistics (Toronto) Inc. and Scanwell Logistics (Taiwan) Ltd.;

No one appearing for the defendant, Baltrans Logistics (Canada) Ltd.

Solicitors of Record:

Isaacs & Co., Toronto, Ontario, for the plaintiff;

No one appearing for the defendant, A Plus Freight Forwarder Co. Ltd.;

Magrath, O'Connor, Toronto, Ontario, for the defendants, Scanwell Logistics (Toronto) Inc. and Scanwell Logistics (Taiwan) Ltd.;

William M. Sharpe, Toronto, Ontario, for the defendant, Baltrans Logistics (Canada) Ltd.

This matter was heard on July 2 and 3, 2009, at Toronto, Ontario, by Harrington, J., of the Federal Court, who delivered the following judgment at Vancouver, British Columbia, on July 16, 2009.