It is often said that a bill of lading is not a contract of
carriage, but is merely "excellent evidence" of its
terms.1 However, the courts are divided on how far
beyond the bill of lading we can go, specifically in terms of
declaring the value of a shipment. This unpredictability in the law
can mean the difference of hundreds of thousands of dollars for a
carrier who has lost or damaged cargo in its possession.
The reason is due to the limitations of liability imposed by
Ontario legislation in contracts of cargo by motor carriers.
Pursuant to s. 9 of Sch. 1 of Ontario Regulation
643/05,2 the liability of such carriers is limited to
$4.41 per kilogram of the transporting cargo. Typically the value
to replace those goods, in the event that delivery is not effected
in good condition, will be far above that amount (consider gold,
while an extreme example, is over $60,000 CAD / kg!) If, however, a
value is declared on the face of the contract of carriage, this
"declared value" becomes the limit of the carrier's
liability (usually the full amount of the goods).
As the regulation uses the words "contracts of
carriage" and not "bills of lading", this door has
been left open to argue that the bill of lading may not be the
complete contract. It is now common to see a carrier relying on the
absence of a declared value in the bill of lading in order to limit
their liability to $4.41 per kilogram, whereas the
consignor/consignee relies on other external documentation to claim
the full value of the consignment.
Justice Bielby of the Superior Court in A&A Trading Ltd.
v. DIL's Trucking Ltd.3 found that an invoice
attached to the bill of lading (with the invoice number written on
the bill) had effectively been incorporated into the contract of
carriage. It was likely significant that there were purported
discussions around the value of the goods between the parties, as
well as the existence of adequate insurance. In any event, the
limitation of liability did not apply, and the consignor recovered
the full value of his goods being $263,520.00. If the limitation
were to apply, the carrier would have only been liable for
Fast forward a year to the May 2016 decision of the Court of
Appeal for Ontario in National Refrigeration v.
Celadon.4 The trial judge in this case had found
that a copy of a commercial invoice issued by the Mexican shipper
to the consignee, and subsequently passed to the carrier, was
incorporated into the contract of carriage. In a very different
outcome, the Court of Appeal strongly disagreed with the trial
judge, unanimously stating that the invoice had "nothing to do
with the contract of carriage and providing a copy of the invoice
to the carrier was not declaring the value of the goods on the face
of the contract of carriage within the meaning of the
regulation". As such, the statutory limitation applied. The
value by weight was $110,830.00 CAD, whereas the full value of the
goods totalled $220,928.98 USD.
Interestingly, many of the Canadian provinces specifically
require declarations of value to be made on the bills of lading
themselves – the major exception being Ontario. While the
Ontario regime allows for the courts to apply their discretion and
examine the entirety of the contract, this obviously injects a
definite level of uncertainty which I find counterproductive in
Despite the Court of Appeal's decision in National
Refrigeration, I suspect that trial level courts will continue
to expand the definition of the "contract of carriage"
falling back on a "case-by-case" analysis to justify the
resulting inconsistency. What is certain, though, is that the bill
of lading cannot simply be taken at "face" value in these
1. The Ardennes,  1 K.B. 55 at p. 59 per
Lord Goddard C.J.
2. This is a regulation made under the Highway
Traffic Act, R.S.O. 1990, c. H.8.
3. 2015 ONSC 1887.
4. 2016 ONCA 339.
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