Facts: An affiliate of the appellants contracted with the respondent for the provision of freight forwarding services (FFSA) which saw the respondent arranging, collecting, handling, storing and transporting materials and equipment from the place of shipment to destinations designated by the affiliate for a hydroelectric construction project. The respondent issued invoices which included quotes from the other two respondents to the appeal for stevedoring and carrier services, but at no time was the affiliate in any contract with the two other respondents. Two shipments of the materials on 2 June and 2 November 2015 were damaged, and on 9 September and 2 November 2015 the affiliate advised the respondent that it would claim damages in relation to those shipments. The appellant commenced the underlying action for damages on 29 May 2017.
To be decided by the Court was whether the respondent 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 respondents could rely on the one year time limitation under the Hague Rules as incorporated by reference in the sea waybills issued by the respondent carrier, 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 appellant and respondents.
The Federal Court rejected the plaintiffs’/appellants’ arguments that they were 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 quotes provided. The Court further 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 defendant carrier and stevedoring company 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/appellants and the preforming carrier which had incorporated the Hague Rules to the carriage and thus a one-year time limitation applied.
The plaintiffs appealed to the Federal Court of Appeal, arguing that the trial Judge erred in four ways:
i. The Judge erred in holding the CIFFA terms were applicable to the parties;
ii.. The Judge erred in holding that the respondents did not consent to an extension of time or were not estopped from invoking the CIFFA terms or Sea Waybill Terms;
iii. The judge erred in holding that the Sea Waybill terms applied and that all three respondents could benefit from them; and
iv. The Judge erred in holding that the carrier could benefit from a double costs rule.
Decision: Appeal dismissed.
Held: On the first ground of appeal, the Federal Court of Appeal found that it was open to the Federal Court on the evidence before it to find the CIFFA terms applied, noting the plaintiffs/appellants had notice of the CIFFA terms hundreds of times through the quotes and invoices provided for each shipment. While the Federal Court of Appeal did not condone the assumption made by the Federal Court that the appellants were a party to the FFSA, it found that the ultimate conclusion of the inapplicability to the FFSA to be correct, noting that the appellants were not a party to the FFSA and as such the appellants could not rely on the two year limitation provided therein. The Federal Court of Appeal refused to apply the contra proferentum rule as the trial Judge was able to ascertain the meaning and application of the CIFFA terms and no contractual ambiguity remained unresolved. On the second ground of appeal, the Federal Court of Appeal found that the Federal Could made no reviewable error in rejecting the appellant’s argument at first instance on consent to an extension of time and estoppel as the particular email communication from one of the respondents supporting this argument was hearsay and that the factors for a finding of estoppel were not met. The Federal Court of Appeal did not consider the third ground of appeal as it found no error in the trial Judge’s holding that the CIFFA terms applied and there was no estoppel, and the trial Judge’s comments on this argument were in any case obiter dicta. On the last ground of appeal, the Federal Court of Appeal found no errors in the Federal Courts awarding of double costs as it was within the trial Judge’s discretion to do so under the Federal Courts Rules, and stated a notice of appeal should have been filed pursuant to the separate judgment on costs in 2019 FC 850.