MARITIME LAW |
Carriage of Goods |
Mediterranean Shipping Co. S.A. v. BPB Westroc Inc.
T-652-01
2003 FC 942, Lafrenière P.
31/7/03
16 pp.
Plaintiff Mediterranean Shipping Co. S.A. (MSC) seeking to recover from BPB Westroc Inc. (Westroc), defendant shipper, amount of $65,187 on account of freight for carriage of Westroc's goods on three separate occasions, plus interest and costs--Westroc admitting owned cargo, received it, cargo carried by MSC to correct destination in proper condition but denying liability on grounds freight already paid to J.T. Knight Export Services Inc., freight forwarder Westroc understood had authority to receive payment on MSC's behalf --J.T. Knight went bankrupt after having been paid by Westroc--Court left with unenviable task of deciding whether shipper should, in particular circumstances of this case, be made to pay twice, or whether carrier will not be paid at all--Issues whether MSC, by its conduct, induced Westroc to conclude J.T. Knight authorized to receive payment for shipments; whether MSC estopped from claiming freight charges by reason of its knowledge of J.T. Knight's financial difficulties, and its failure to so inform Westroc--Action allowed--According to C.P. Ships v. Les Industries Lyon Corduroys Ltée, [1983] 1 F.C. 736 (T.D.), general approach to be taken that shipper remaining liable unless shipper can show released by carrier--This result agreeing with economic reality, as freight forwarders may have few assets, and yet book cargo far exceeding their net worth--While carrier may extend credit to forwarder, no economically rational motive for carrier to release shipper--Legitimate policy reasons for adopting rebuttable presumption in favour of shipper liability --Here, burden on Westroc, not MSC, to prove liability released--Did not do so--On evidence, J.T. Knight acting as typical freight forwarding agent on behalf of Westroc towards MSC--Since Westroc appointed J.T. Knight as its agent for purposes of billing, collecting freight charges, and as party to whom all documents necessary for that purpose would be sent, MSC cannot be faulted for following trade practice of dealing with Westroc solely through agent--Under general principles of agency and by operation of law, non-payment by agent deemed non-payment by principal--Westroc must be taken to have assumed risk of paying twice if party it relied upon to perform essential function of its export program abused its position of trust by converting freight monies received for designated purpose for its own use--Westroc failed to take proper precautions to protect itself--Shipper remaining liable to carrier unless it can present clear and unequivocal evidence that carrier somehow released it from liability--Westroc has failed to meet burden.