Précis: The British Columbia Supreme Court held a rail carrier was entitled to limit its liability even though there was no contract between it and the plaintiff.
As a consequence of a train derailment cargo owned by the plaintiff was severely damaged. The cargo was being carried under a “Master Transportation Agreement” between the plaintiff and Fujitrans, a freight forwarder. The cargo originated in Japan and was carried by sea to Vancouver where it was discharged for further carriage to Ontario by rail. The defendant rail carrier alleged, pursuant to s. 137(1) of the Canada Transportation Act, S.C. 1996 c. 10 and an agreement between it and Casco, another forwarder, that it was entitled to limit its liability to $50,000.
Decision: The rail carrier was entitled to limit its liability.
Held: The right of the defendant rail carrier to limit its liability depends on it establishing the existence of a “confidential contract” under ss. 126 and 137 of the Canada Transportation Act that is a “written agreement signed by the shipper” and that contains a limitation of liability. The “shipper” within the meaning of the Canada Transportation Act in the circumstances of this case was Casco not the plaintiff. The requirement of a “signed” copy of the agreement does not necessarily require that an actual signed copy be produced. In this case, the existence of signed assignment of the agreement was sufficient. The plaintiff impliedly or expressly consented to and authorized the subcontracting by Fujitrans to Casco and by Casco to the rail carrier. Moreover, the plaintiff had express knowledge of the terms of the agreement between Casco and the rail carrier. Accordingly, the plaintiff is bound by the limitation even without any privity of contract between it and the rail carrier.