Garfield Container Transport Inc. v. Chubb Insurance Co. of Canada

The Plaintiff was a transportation company specializing in taking cargo from ships and delivering such cargo to the customs clearance warehouse and, eventually, to the purchaser. The Plaintiff was insured by the Defendant under a policy which provided coverage for goods shipped under a bill of lading and in due course of transit. In this instance the Plaintiff delivered equipment to the customs clearance warehouse as required by the bill of lading. While the equipment was at the warehouse the Plaintiff contacted the purchaser and was instructed to deliver the equipment to another trucking firm. The Plaintiff transported the equipment to another warehouse where it had the specialized loading equipment necessary to do the task. During the course of loading the equipment was damaged. The Defendant insurer denied coverage saying that the carriage under the bill of lading and in the due course of transit came to an end at the customs clearance warehouse. This argument was accepted at first instance. On appeal to the Quebec Court of Appeal, however, the Court of Appeal held that the carriage and course of transit did not come to an end at the customs clearance warehouse despite the fact that the ultimate destination was not specified in the bill of lading. The Court held that the Plaintiff was obliged to deliver the equipment to the ultimate destination and temporary disruptions that were not unreasonable did not break the chain of transit.