MDSI Mobile Data Solutions Inc. v. Federal Express

In Carriage of Goods by Air on (Updated )

This was an appeal from an application by the Plaintiff for summary judgment for damage to computer equipment that occurred during the course of air carriage from Vancouver, British Columbia to Atlanta, Georgia. At trial, the Plaintiff sought to recover the full amount of its loss (approximately $240,000) or, in the alternative, the declared value amount of $214,000. The Defendant carrier admitted liability but argued that the Plaintiff was not entitled to recover the declared value amount since the Plaintiff’s clerk who filled out the air waybill said on discovery that she believed the declared value amount set the amount that could be recovered from the Plaintiff’s insurer. The trial Judge found this argument wholly without merit. The Defendant next argued that its liability was limited to 250 francs per kilogram as per Art. 22(2) of the Warsaw Convention or, in the alternative, to $50,000 as per its standard terms and conditions, which limited the amount that could be declared for carriage and limitation purposes to $50,000. The Plaintiff’s position on these issues was that the Convention limit of 250 francs per kilogram did not apply because of the declaration of value and that the conditions of carriage were ambiguous and inconsistent and did not, in fact, limit the amount that could be declared to $50,000. Additionally, the Plaintiff argued that a provision limiting the amount that could be declared by a shipper for carriage and limitation purposes was null and void by Art. 23 of the Convention. The trial Judge agreed with the Plaintiff that the Warsaw Convention prohibited a carrier from limiting the amount that could be declared and further agreed that the declaration of value of $214,000 replaced the Convention limit of 250 Francs per kilogram. An additional issue was whether the air waybill failed to disclose the agreed stopping places and failed to include a statement that the carriage was subject to the Warsaw Convention, contrary to Art. 8. The trial Judge held that the air waybill did not contravene Art. 8 in these particulars as there was no stopping place actually agreed between the parties and the statement in the air waybill that the Convention “may” be applicable was sufficient compliance with Art. 8. In the result, the trial Judge granted summary judgment in the amount of the declared value. The Defendant appealed to the British Columbia Court of Appeal. The only issues on appeal were whether the conditions of the Defendant limited the value that could be declared for carriage to $50,000 and whether such a limit was contrary to the Warsaw Convention. The Court of Appeal was divided on the first issue. The majority found that the clauses relied upon by the Defendant were unclear and inconsistent and concluded that there was no $50,000 limit on the amount that could be declared for carriage. In view of this holding, the majority did not find it necessary to decide whether a $50,000 limit was contrary to the Warsaw Convention, however, they did say they tended to agree with the dissenting Judge that the Convention would not prohibit the parties to a contract of carriage by air from agreeing on a limit of liability that was in excess of the 250 francs per kilogram provided by the Convention but less than the actual value of the goods carried. In the result, therefore, the appeal was dismissed and the Plaintiff obtained judgment for the declared value amount of $214,000.