Carriage of Goods by Road

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Carriage of Goods by Road

The law applicable to carriage of goods by road depends on whether the carriage is intra-provincial (within a single province) or extra-provincial (between provinces or between a province and a foreign state).

Where the carriage is intra-provincial, the law of the province in which the carriage occurs applies and most provinces have legislation addressing the rights and obligations of the parties to a contract of carriage. Luckily, there is general, although not complete, uniformity between the various provincial statutes and regulations. For carriage within British Columbia, the governing regulation is Division 37 of the Motor Vehicle Act Regulations, BC Reg 26/58. (The section of the Motor Vehicle Act, RSBC 1996, c. 318, authorizing the making of these regulations is s.212.2(2)(g).)

In general, the provincial statutes require that the motor carrier issue a bill of lading in a more or less prescribed form that includes or incorporates by reference a number of required terms and conditions. These conditions generally: make the carrier liable for any loss or damage to the cargo;provide a limited number of defences to the carrier (Act of God, the Queen’s or public enemies, riots, strikes or a defect or inherent vice in the goods); and, entitle the carrier to limit liability to $4.41 per kilogram ($2.00 per pound) unless the shipper declares a value for the cargo on the bill of lading. Notice of loss or damage must be given to the carrier within within 60 days after the delivery of the goods, or, in the case of failure to make delivery, within 9 months after the date of shipment of the goods. A final statement of the claim must be filed within 9 months after the date of shipment, together with a copy of the paid freight bill.

A frequent issue that arises, especially in the context of multi-modal carriage, is the carrier fails to issue a bill of lading. The result of such failure can disentitle the carrier to limit liability, if the applicable act requires the carrier to issue a bill of lading. (See for example, Valmet Paper Machinery Inc. v. Hapag-Lloyd AG, 2004 BCCA 518)

Where the carriage is extra-provincial, the Conditions of Carriage Regulations, SOR/2005-404 under the Federal Motor Vehicle Transport Act, RSC 1985, c 29 (3rd Supp) apply. Pursuant to these regulations "the conditions of carriage and limitations of liability that apply to transport by an extra-provincial truck undertaking are those set out in the laws of the province in which the transport originates, as amended from time to time, that are applicable to transport by a motor carrier undertaking within that province". In essence, for extra-provincial carriage, it is the law of the province of origin that applies. If there is no provincial law that applies, then the conditions of carriage and limitations of liability that apply are those agreed to by the parties.

Carriage of Goods by Rail

Rail carriage is governed by the Canada Transportation Act and the Railway Traffic Liability Regulations, SOR/91-488. Pursuant to s. 137 of the Canada Transportation Act a railway cannot not limit or restrict its liability except by means of a written agreement signed by the shipper or by an association or other body representing shippers. If there is no agreement, the railway’s liability is limited or restricted to the extent provided in any terms and conditions that the Canadian Transportation Agency may have specified for the traffic; or as prescribe by regulation. (See Canadian Pacific Railway Company v. Canexus Chemicals Canada LP, 2015 FCA 283 for an in depth consideration of the effect of s. 137).

The Railway Traffic Liability Regulations specify that the railway is liable for any loss, damage or delay unless caused by: act of God; war or an insurrection; riot, strike or lock-out;
any defect in the goods; any act, negligence or omission of the shipper or owner of the goods;
an authority of law; or a quarantine. A notice of claim must be filed within the railway within 4 months. Although the regulations do not provide a limitation amount, most railways will limit their liability by contract.

Statutes and Regs