TT Talk - Delivery under a 'Straight' bill of lading under Canadian law

TT Talk Edition 127 of 4 March 2010 published an article by US attorney-at-law Conte Cicala on 'Delivery under a 'Straight' bill of lading under United States law'. In contrast to US law, which generally permits delivery without presentation of a 'straight' bill of lading, Canadian law requires surrender of one original 'straight' bill of lading in return for the good

• The identical wording of the conditions on the back of the document in question and the Westwood bill of lading.

This position has been reaffirmed in June 2009 by the Federal Court of Canada (a superior court with nationwide jurisdiction) in Cami Automotive v Westwood Shipping Lines. Mr Justice Blanchard, when required to classify a Transport Operator's carriage document either as a 'Straight' bill of lading or as a sea waybill, referred to 'The Rafaela S' (UK House of Lords 2005) and explained that a bill of lading might be either negotiable or non-negotiable, but that in either case the bill was a document of title and therefore had to be presented at the port of delivery to ensure the delivery of the goods. The judge also cited the Federal Court judgement of 25 June 2008 in Timberwest Forest v Pacific Link Ocean Services in support, where Mr Justice Harrington said that 'a fundamental aspect of a contract of carriage covered by a bill of lading is that the carrier, or its agents, delivers the cargo to the holder of the bill'.

As Canadian law requires surrender of a 'straight' bill of lading for delivery, but allows delivery under a sea waybill without such presentation, distinguishing the two is critical.

In Cami Automotive v Westwood Shipping Lines, Westwood assumed liability for carriage of palletised assemblies and modules by sea from Nagoya (Japan) to Seattle, then by truck to Vancouver and finally by rail to Toronto. The train operated by Canadian National Railway derailed in northern Ontario. Cargo interests sued Westwood for USD1.213 million. The classification of the document as a sea waybill allowed Westwood to rely on the US COGSA 1936 with its limit of USD500 per package, with the result that Westwood was able to rely on a total liability limit of just USD50,000.

Mr Justice Blanchard scrutinized the front of the Westwood carriage document (to determine whether the Hague-Visby Rules applied by force of law) and concluded that the document was not a 'straight' bill of lading but a sea waybill based on the following entries on the front of the document:

• The word 'waybill' appeared in the top-left corner (where another Westwood document states 'bill of lading');

• A stamp said 'non negotiable waybill';

• Another stamp included the requirement of 'delivery against proof of identity',

• A statement in the bottom-left corner stated that only 'one' document was to be signed.

Also, the judge felt the following factors were of little assistance:

• The printed term 'Bill of Lading No', because the judge held this to be subordinated to stamped terms;

• The stamped term 'Straight Bill of Lading (Waybill)', which the judge viewed as 'apparent confusion of terms'; and

Incidentally, Mr Justice Blanchard also held that the reference in the Westwood sea waybill conditions to a 'bill of lading' did not make these conditions inapplicable.

Please use the following web link for the full text of the judgement by the Federal Court (Mr Justice Blanchard) in Cami Automotive v Westwood Shipping Lines of 24 June 2009:

http://www.canlii.org/en/ca/fct/doc/2009/2009fc664/2009fc664.html