This is the first appellate decision to interpret
subsection 43(2) of Canada's Marine Liability
Act, which makes the Hague-Visby Rules apply
compulsorily to certain contracts of carriage by water between
places in Canada. Alexander Holburn partner Doug Schmitt
represented the successful plaintiffs, whose truck was damaged when
it fell off the defendants' barge. The barge operator
issued no bill of lading. A central issue was whether the
Hague-Visby Rules apply to the plaintiffs' claim, making it
time barred after one year. The Court held that Hague-Visby
did not apply and the claim succeeded.
BASIS OF ORIGINAL RULING IN OUR CLIENTS' FAVOUR
Subsection 43(2) of the MLA reads:
The Hague-Visby Rules also apply in respect of contracts for the
carriage of goods by water from one place in Canada to another
place in Canada, unless there is no bill of lading and the contract
stipulates that those Rules do not apply.
The trial Judge held that under subsection 43(2) of the MLA the
Hague-Visby Rules only apply if the contract is incorporated into
or evidenced by a bill of lading or similar document of title; oral
contracts not evidenced by such a document are not caught by
subsection 43(2) of the MLA.
BASIS OF APPEAL RULING IN OUR CLIENTS' FAVOUR
On April 4th, 2013 the Federal Court of Appeal upheld the result
of the trial Judge but for different reasons, and overruled the
trial Judge's requirement that there must be a written document
in order for MLA subsection 43(2) to invoke Hague-Visby.
The Court of Appeal held that Hague-Visby did not apply to the
transport of the truck on the barge because the term
"contracts for the carriage of goods" in subsection 43(2)
of the MLA does not include a charter party. The Court of
Appeal held that the contract was a charter party because it was
for the use of the barge on an hourly basis (whether or not there
is cargo on the barge); and, also, because the truck remained in
the possession of the truck owner's driver and was never
delivered to the barge owner as a bailee.
PRECEDENT SET BY DECISION - IMPLICATIONS FOR COASTING
The result of the appeal decision is a simple rule for Canadian
coastal carriers and shippers:
(a) If they want Hague-Visby to apply to a contract of carriage,
no bill of lading or similar document of title, or any document at
all, is necessary: Hague-Visby will apply by default. If the
contract is a charter party, the contract should expressly
incorporate Hague-Visby by reference.
(b) If they do not want Hague-Visby to apply, no bill of lading
or similar document of title may be issued, and the contract should
stipulate that Hague-Visby does not apply.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).