Labrador-Island Link General Partner Corporation v. Panalpina Inc., 2019 FC 740 (2019-05-24)
Facts: This was a motion by the defendants for summary judgment to dismiss the action on the basis it was time barred. The underlying action arose from damage to two cargo shipments of aluminum conductor reels (collectively, the “Cargo”). The plaintiffs retained the defendant Panalpina to provide, inter alia, freight forwarding services for an electrical transmission project under a Freight Forwarding Service Agreement (“FFSA”) in which the plaintiffs would provide specifics of cargos and make a Request for Quotation (“RFQ”) for Panalpina to obtain quotes from carriers for the shipment of same. If the quote was accepted, the plaintiffs would issue Panalpina a Material Moving Ticket (“MMT”) which confirmed various details about a cargo’s movement. Panalpina contracted the defendant Logistec Stevedoring Inc. for the receipt and storage of the Cargo at its terminal in Trois-Riviers, and also contracted the defendant Desgagnes Transarctik Inc. for the transportation of the Cargo by sea. The Cargo was to be shipped by sea from Quebec to Newfoundland, with the first shipment shipped on 28 May 2015 (the “May Shipment”) and the second on 28 October 2015 (the “October Shipment”). During discharge operations both the May Shipment and October Shipment were found to be damaged, and the Plaintiff put Panalpina on notice of intent to claim for damages to the Cargo on 09 September 2015 and 02 November 2015 respectively. The plaintiff commenced the underlying action for damages on 29 May 2017.
To be decided by the Court was whether Panalpina could invoke the nine-month limitation period prescribed by the Canadian International Freight Forwarders Association Standard Trading Conditions (the “CIFFA Terms”), or in the alternative, whether any of the defendants can rely on the one year time limitation under the Hague Rules as incorporated by reference in the sea waybills issued by the defendant Desgagnes, either on the basis of the Paramount clause in the sea waybill, a sub-bailment, or the Himalaya clause contained in the booking notes between the plaintiffs and Panalpina.
Decision: Motion granted, action dismissed.
Held: The Court rejected the plaintiffs’ arguments that Panalpina never advised it of the CIFFA Terms and that the CIFFA terms contradicted the FFSA terms in that the CIFFA Terms provisioned a shorter limitation period than the provincial laws of Newfoundland and Labrador which were referred to in the FFSA. The Court found that the CIFFA Terms were brought to the attention of the plaintiffs by the explicit reference to those terms in Panalpina’s quotes provided in the document pursuant to the RFQ, and that the plaintiffs would issue MMTs in response approving the terms proposed by Panalpina. On the second argument, the Court found that the CIFFA Terms did not contradict the FFSA terms as on a plain reading of the FFSA the reference to laws of Newfoundland and Labrador and Canada were only to apply to the construction of the FFSA and resolution of any dispute arising in respect of the FFSA itself. The Court held that the Himalaya clause in section 2 of the CIFFA Terms also covered the defendants Desgagnes and Logistecs as that clause extended the benefit of the carrier’s contractual limitations to sub-carriers or other third parties engaged by the carrier to assist in the transportation of goods. The Court further held that, even if it were wrong on the Himalaya clause, the sea waybills had named the plaintiffs and the preforming carrier which had incorporated the Hague Rules to the carriage and thus a one-year time limitation applied.