ARC-EN-CIEL PRODUCE INC., A BODY POLITIC v. CORPORATE LOCATED AT 122 THE WEST MALL, TORONTO,, 2022 FC 843

Date: 20220607 Dockets: T-2184-18 T-2185-18 Citation: 2022 FC 843 Ottawa, Ontario, June 7, 2022 PRESENT: The Honourable Madam Justice Rochester ADMIRALTY ACTION IN REM AND IN PERSONAM Docket: T-2184-18 BETWEEN: ARC-EN-CIEL PRODUCE INC., A BODY POLITIC AND CORPORATE LOCATED AT 122 THE WEST MALL, TORONTO, ONTARIO, CANADA M9C 1B9 Plaintiff and THE SHIP "BF LETICIA" AND THE OWNERS AND ALL OTHERS INTERESTED IN THE SHIP “BF LETICIA” AND BF LETICIA FOROOHARI SCHIFFS, A BODY POLITIC AND CORPORATE CARE OF PETER DOEHLE SCHIFFAHRTS-KG, ELBCHAUSSEE 370, 22609, HAMBURG, GERMANY, C/O MONTSHIP INC., 360 ST.

JACQUES STREET, SUITE 100, MONTREAL, QUEBEC H2Y 1R2 AND GREAT WHITE FLEET, A BODY POLITIC AND CORPORATE OF THE UNITED STATES, C/O MONTSHIP INC., 360 ST. JACQUES STREET, SUITE 100, MONTREAL, QUEBEC H2Y 1R2 Defendants Docket: T-2185-18 AND BETWEEN: ARC-EN-CIEL PRODUCE INC., A BODY POLITIC AND CORPORATE LOCATED AT 122 THE WEST MALL, TORONTO, ONTARIO, CANADA M9C 1B9 Plaintiff and THE SHIP "MSC BELLE" AND THE OWNERS AND ALL OTHERS INTERESTED IN THE SHIP “MSC BELLE” AND BELLE INC., A BODY POLITIC AND CORPORATE CARE OF MSC MEDITERRANEAN SHIPPING CO.

SA, CHEMIN RIEU, 12-14, 1208 GENEVA, SWITZERLAND, C/O MONTSHIP INC., 360 ST. JACQUES STREET, SUITE 100, MONTREAL, QUEBEC H2Y 1R2 AND GREAT WHITE FLEET, A BODY POLITIC AND CORPORATE OF THE UNITED STATES, C/O MONTSHIP INC., 360 ST. JACQUES STREET, SUITE 100, MONTREAL, QUEBEC H2Y 1R2 Defendants JUDGMENT AND REASONS TABLE OF CONTENTS: I. Introduction II. Facts III. Procedural History IV. Issues V. Analysis A. Bills of Lading

(1) First Function – Receipt

(2) Second Function – Evidence of the Contract of Carriage

(3) Third Function – Document of Title

(4) The Form of a Bill of Lading B. The Hague-Visby Rules – Introduction and Context C. Is the Shipping Document a Contract of Carriage Covered by a Bill of Lading or Any Similar Document of Title Under the Hague- Visby Rules ? D. Is the Shipping Document akin to a Waybill? E. The Service Contract F. Conclusion – Characterization of the Shipping Documents and the Service Contract under the Hague-Visby Rules and

section 43 of

the Act G. Does

Section 46 of the Act Apply to the Shipping Documents? H. Is There a Strong Cause Not to Enforce the Forum Selection Clause in Favour of the United States District Court, Southern District of New York? VI. Conclusion I. Introduction The history of maritime law bears the stamp of a constant search for stability and security in the relations between the men who commit themselves and their belongings to the capricious and indomitable sea. Since time immemorial, the postulate which has inspired all the approaches to the problem has implied the establishment of a uniform law.

L’histoire du droit maritime porte l’empreinte d’une recherché constant de stabilité et de sécurité dans les rapports entre les hommes qui confient leur personne et leurs biens à la mer capricieuse et indomptable. Depuis des temps immémoriaux, le postulat qui a inspiré toutes les approches du problème, implique l’établissement d’un droit uniforme. Lilar et Bosch, Le Comité Maritime International 1897-1972. [ 1 ] Save for the use of the term " “men” " rather than persons, this statement holds true today.

The parties in this action are seeking certainty as to the legal regime applicable to the contractual arrangements for the carriage of the goods at issue. [ 2 ] This matter concerns several containerized shipments of fresh produce transported from Costa Rica to Etobicoke, Canada. The Plaintiff, Arc-En-Ciel Produce Inc. [the Cargo Claimant] alleges that the cargo arrived at its destination in a damaged and deteriorated state. The Cargo Claimant commenced two actions in this Court, naming as Defendants, Great White Fleet, the vessels that carried the cargo, and their respective owners.

The Defendant, Great White Fleet [the Carrier], is a defendant in both actions. [ 3 ] The Carrier and the Cargo Claimant have a business relationship spanning several years. The nature of the contractual relationship between them, as it pertains to the shipments in question, is at issue in the present motions. [ 4 ] The Carrier brought a motion in each of the actions seeking a stay, pursuant to subsection 50(1) of the Federal Courts Act , RSC 1985, c F-7 , on the basis of a forum selection clause in favour of the United States District Court, Southern District of New York.

The Carrier’s position is that the parties should be held to their bargain and, consequently, this Court should exercise its discretion to grant a stay. The Carrier submits that the Cargo Claimant has failed to show a " “strong cause” " as to why the forum selection clause should not be enforced.

The Carrier relies on ZI Pompey Industrie v ECU-Line NV , 2003 SCC 27 [ ZI Pompey ], in which the Supreme Court of Canada endorsed the " “strong cause” " test as set out in Cargo Owners v “Eleftheria” (The) , [1969] 1 Lloyd's Rep. 237 at 242 (Adm Div) [ The Eleftheria ] . [ 5 ] The Cargo Claimant asks this Court to decline to enforce the forum selection clause on two grounds. First, the Cargo Claimant submits that the contracts at issue fall within the scope of

section 46 of the Marine Liability Act , SC 2001, c 6 [the Act ].

Section 46 of the Act permits a claimant to institute proceedings in Canada despite a foreign jurisdiction clause, provided certain requirements are met. Second, and in the alternative, the Cargo Claimant submits that it has demonstrated that a " “strong cause” " exists to set aside the forum selection clause. [ 6 ] The two issues in the present motion are therefore (

i) whether

section 46 of the Marine Liability Act applies to the contracts at issue; and (ii) if not, whether there is a " “strong cause” " to refuse to enforce the forum selection clause. [ 7 ] In order to rule on the first issue, it is necessary to consider the nature of the contractual arrangements between the Carrier and the Cargo Claimant. I will state from the outset that this is not an easy task. The applicable provisions of the Act , including the international convention known as the Hague-Visby Rules appended thereto, are rooted in provisions that were negotiated in 1893.

Those 1893 provisions were in turn based on pre-existing mercantile and maritime trade practices. These maritime trade practices had existed and evolved over the course of approximately six centuries prior to 1893. They have continued to evolve over the course of the 20 th and 21 st centuries, while much of the statutory language at issue, conceived in the 19 th century, remains the same. [ 8 ] This Court thus finds itself faced with a choice between, on the one hand, a strict

interpretation of the Act based on the meaning of language used and the documents in existence in the 19 th century, and on the other hand, an expansive

interpretation taking into account the modern realities of the international carriage of goods and the objective of protecting Canadian consumers. A consideration of the origins of the documentation and the legislative texts at issue is therefore, among other things, appropriate and necessary to the determination of the present motions. I wish to note that I have been assisted in this task by the able submissions of counsel, both practitioners of the maritime bar, whose efforts on behalf of their respective clients were thorough, considered, and clear. II.

Facts [ 9 ] Before turning to the origins of the type of documents at issue and the history of the language contained in Canada’s carriage of

goods by water regime, I shall briefly set out the facts, and following that, the procedural history of this case. [ 10 ] The Carrier and the Cargo Claimant have filed affidavits in support of their motion materials. The Carrier relies upon the affidavit of Luis Rodriguez Contreras, Transportation Claims Analyst, who handles claims for the Carrier, including the claims that are the subject of this action. Mr.

Contreras describes in detail the business relationship between the parties and the process followed, along with the documentation used, with respect to cargo transported by the Carrier under the terms of its arrangements with the Cargo Claimant. The relevant documentation to which Mr.

Contreras refers is appended to his affidavit. [ 11 ] The Cargo Claimant relies upon the affidavit of Sam Hak, President of the Claimant, who also sets out the relationship between the parties, addresses the shipments at issue, and attaches the relevant documentation to his affidavit. [ 12 ] The Carrier and the Cargo Claimant have had a business relationship since 2012. The Cargo Claimant is a Canadian company that specializes in the importation and distribution of fresh produce to local merchants. The Carrier specializes in dry and refrigerated containerized cargo services between Central and North America.

The Carrier is an affiliate of Chiquita Fresh North America LLC and has its principal place of business in Florida. [ 13 ] Over the course of the business relationship, the Carrier provided the Cargo Claimant with door-to-door transportation services for produce from Central America to Toronto or Etobicoke, Ontario using refrigerated containers. As of June 2019, the Carrier had transported approximately 185 containers of produce for the Cargo Claimant. With respect to shipments originating from Costa Rica, the Carrier and the Cargo Claimant had entered into a series of what are termed service contracts.

The most recent service contract, entitled Confidential Service Contract [Service Contract], was entered into in June 2017, and remained in effect through June 30, 2018. It was in effect at the time of the shipments at issue. [ 14 ] The Service Contract provided for discounted rates, as compared to the Carrier’s published tariff, provided the minimum cargo commitment was reached.

The Service Contract contained a clause incorporating the " “Carrier’s bill of lading” " and providing that said, " “bill of lading will determine the terms and conditions of the shipment” " . [ 15 ] The Carrier’s standard form bill of lading is a one-page form with printed text on both sides. The vast majority of the clauses containing the terms and conditions are printed on the reverse side of the one-page form. The clauses include a jurisdiction clause, also known as a forum selection clause, providing for the exclusive jurisdiction of the United States District Court, Southern District of New York.

They further include a " “clause paramount” " which provides that the carriage shall be governed by the United States Carriage of Goods by Sea Act, 1936 [US COGSA], and an applicable law clause specifying the application of United States federal law, or where there is no governing federal law, the laws of the State of New York. [ 16 ] The Cargo Claimant states that at no time was it provided with a copy of the terms and conditions of the Carrier’s standard form bill of lading.

In response, the Carrier states that it was available and referenced in all the contractual documentation between the parties. [ 17 ] The Carrier filed evidence of the modus operandi between the parties for door-to-door shipments. This method of operating also formed the subject of submissions during the hearing.

The Cargo Claimant has not contradicted the parties’ modus operandi and it is common ground that the shipments at issue were door-to-door shipments. [ 18 ] In order to initiate a shipment in Costa Rica, a company called Arcsam de Costa Rica [the Shipper], which the Carrier believes to be an affiliate of the Cargo Claimant, contacts the Carrier’s representative in Costa Rica with a booking request. The booking request confirms, among other things, the type of produce, quantities, place of pick up and requested date for the delivery of one or more empty containers.

The Carrier then arranges for a local trucking company to deliver the required number of containers to be stuffed and sealed by the Shipper. Once stuffed and sealed, the containers are then transported by truck to the vessel’s port of loading, Puerto Limon, in Costa Rica. [ 19 ] The containers are shipped as " “shipper load, stow and count” " , meaning it is the Shipper who provides the information to the Carrier about the contents of the container.

The Shipper provides the Carrier with, among other things, the seal numbers of the containers, the description and quantity of the goods therein, and the required temperature setting for the refrigeration unit.

This information is then entered into the Carrier’s database. [ 20 ] Once the containers arrive in Puerto Limon, they are stored until such time as they are loaded onto a vessel for a short-sea transit to Guatamala, following which they are discharged and then loaded onto a vessel bound for Wilmington, United States. [ 21 ] Once the containers are loaded, the Carrier sends an email to the Cargo Claimant with (

i) a notice of arrival and (ii) a copy of what shall be referred to as a shipping document [Shipping Document] for each container. The Carrier refers to the Shipping Document as an " “unsigned non-negotiable Express Release Bill of Lading” " . The Cargo Claimant refers to the Shipping Document as a " “non- negotiable International Bill of Lading” " . The nature and characterization of the Shipping Document and the consequences that flow from that characterization are central to the present motion. [ 22 ] For the cargo at issue, six

(6) Shipping Documents were issued, copies of which are in the record. A copy of one of the Shipping Documents is appended to these reasons as Appendix A. I shall discuss the contents of the Shipping Documents, along with the Service Contract, in greater detail in the analysis

section of these reasons. For the moment, it is sufficient to say that the Shipping Documents bear the printed name of the Carrier on the top left and the printed heading " “INTERNATIONAL BILL OF LADING” " on the top right. Each Shipping Document contains a reference to the Service Contract number. The Shipping Documents indicate a door-to-door transport, the name of the vessel, the container number and contents, an " “express release” " notation, and are unsigned. The Cargo Claimant is identified as both the consignee and the notify party.

The places of receipt are indicated as inland in Costa Rica (Ujarras and Chachagua), the port of loading is Puerto Limon, Costa Rica, the port of discharge is Puerto Barrios, Guatemala, and the place of delivery is Etobicoke, Ontario. Once issued, the Cargo Claimant receives copies of the Shipping Documents, but the Cargo Claimant does not receive any originals. [ 23 ] To continue with the modus operandi , once the vessel arrives in Wilmington, United States, the containers are discharged and the

Carrier obtains authorization from customs to move the cargo. The Carrier then engages a road carrier to collect the containers at the Port of Wilmington and deliver them to the final destination of Etobicoke, Ontario. Upon delivery of the containers to the Cargo Claimant, the truck driver requests that a representative of the Cargo Claimant sign a copy of a trucking bill of lading.

A copy of the trucking bill of lading, also known as a road carrier’s bill of lading, is not in the record. [ 24 ] It is common ground that in order to obtain delivery of the cargo, the Cargo Claimant was not required to tender or present a copy of the Shipping Document. [ 25 ] The carriage of the cargo at issue was booked between December 8, 2017 and January 15, 2018. The Shipping Documents pertaining to each of the containers were issued between December 15, 2017 and January 28, 2018. The shipments arrived in Etobicoke between January 4 and February 26, 2018.

The Cargo Claimant claims that when it unsealed the containers, it discovered that the cargoes exhibited various forms of damage. [ 26 ] The Cargo Claimant notified the Carrier of the loss and submitted claims to the Carrier. As to the claims process with the Carrier, the Cargo Claimant dealt with Montship Inc., the Carrier’s agent, based in Montréal, Canada. [ 27 ] On December 21, 2018, the Cargo Claimant commenced the present actions. The Carrier filed the present motions on June 7, 2019. As will be discussed below, the procedural path of the motions has been a lengthy one. III.

Procedural History [ 28 ] The motions were initially heard by my colleague Justice Elizabeth Heneghan. In a judgment dated January 29, 2020, Justice Heneghan found that it was premature to determine the nature of the contractual arrangements between the parties, and in particular whether the contractual arrangements in question constituted a " “contract for the carriage of goods by water” " within the scope of

section 46 of the Act ( Arc-En-Ciel Produce Inc v MSC Belle (Ship) , 2020 FC 23 [ Arc-En-Ciel 2020]). Nevertheless, Justice Heneghan found sufficient grounds to decline to grant the requested stay. [ 29 ] The Carrier appealed. In Great White Fleet v Arc-En-Ciel Produce Inc , 2021 FCA 70 [ Arc-En-Ciel 2021], the Federal Court of Appeal allowed the Carrier’s appeal, finding that the question of whether the contractual arrangements between the parties falls within the scope of

section 46 of the Act should generally be settled before trial. The Federal Court of Appeal noted that leaving this question to the trial judge defeats one of the purposes of

section 46 of the Act, namely bringing certainty to the question of jurisdiction. Consequently, the Federal Court of Appeal held that the proper recourse was to remit the matter to a different judge of the Federal Court for determination of the applicability of

section 46 of the Act . [ 30 ] The Federal Court of Appeal also confirmed that if

section 46 of the Act is found to apply then the test to determine whether a stay should be granted is the forum non conveniens test. If

section 46 is found not to apply, then the appropriate test for determining whether a stay should be granted is the strong cause test as set out in The Eleftheria . I note that the Carrier abandoned its forum non conveniens arguments at the hearing before Justice Heneghan. This was also the case when the matter was pleaded before me. Accordingly, if I find that

section 46 of the Act applies, then the Carrier’s motions shall be dismissed and the matter shall proceed in Canada. If I find that

section 46 of the Act does not apply, then the Cargo Claimant bears the burden of demonstrating a strong cause to refuse to enforce the forum selection clause. [ 31 ] If the nature of the contractual arrangement is one that attracts the application of

section 46 of the Act, a claimant is permitted to institute a claim in Canada provided one or more of the connecting factors listed in

section 46 of the Act exist. The listed factors connecting a claim to Canada include, but are not limited to, that the actual port of loading or discharge is in Canada, that the intended port of loading or discharge in the contract is in Canada, and where the defendant has a place of business, branch or agency in Canada. The complete text of

section 46 is appended to these reasons (see Appendix B). The Federal Court of Appeal instructed that the question of whether the Carrier had an agent in Canada had been decided by Justice Heneghan, thereby satisfying the requirement in paragraph 46(1) (

b) of the Act . If I find that

section 46 of the Act applies to the contractual arrangements at issue, then I do not need to reanalyze whether a connecting factor exists. IV. Issues [ 32 ] The issues for determination are as follows: A . What is the nature of the contractual arrangements between the Carrier and the Cargo Claimant, as evidenced by the Service Contract and the Shipping Documents? B . Do the contractual arrangements attract the application of

section 46 of the Act with the result that the Cargo Claimant may continue its proceedings in Canada despite the forum selection clause? C . If

section 46 of the Act does not apply, should the forum selection clause be nevertheless be set aside on the basis of the strong cause test as set out in The Eleftheria and adopted by the Supreme Court of Canada in ZI Pompey ? [ 33 ] As alluded to in the introduction to these reasons, the determination of issues A and B above require a detailed consideration of the history and evolution of certain contractual arrangements used in the context of carriage of goods by sea, along with an examination of the history, meaning and context of certain provisions of Canada’s carriage of goods by water regime as contained in

Part 5 and

Schedule 3 the Act . The contractual arrangements at issue are rooted in centuries-old maritime trade practices; however, the arrangements also reflect the modern conveniences of multi-modal door-to-door transport. Certain language contained in the Act that is relevant to the matter at hand dates to a time before containers, containerships and radio transmitters were even invented. To put it succinctly, I am, in part, applying centuries’ old terms and statutory language to modern facts.

V. Analysis [34] At the beginning of each

section of my analysis below, I introduce the topic and state why the particular topic is relevant to thedetermination of the Carrier’s motions. A. Bills of Lading [35] The Cargo Claimant pleads that the Shipping Document is a bill of lading. The Carrier pleads that it is not a "“bill of lading”" in thesense that it attracts the application of sections 43 and 46 of the Act, despite the language on the heading of the document. Whether ornot the Shipping Document is a bill of lading is ultimately important because that will impact how the Shipping Document is treatedunder the Act.

The Act, however, does not provide a definition of a bill of lading (Wells Fargo Equipment Finance Company v Barge“MLT-3”, 2012 FC 738 at para 73 [Wells Fargo]). Consequently, we must first turn to the common law, and thereafter to theinternational convention governing the carriage of goods by sea known as the Hague-Visby Rules, in order to ascertain the meaning ofthis term. [36] Unfortunately, "“[l]ike an elephant, a bill of lading is generally easier to recognize than to define”" (Richard Aikens et al, Bills ofLading, 2nd ed (Informa Law 2016) at 19 [Aikens, Bills of Lading]).

Nevertheless, to begin with the basics, a bill of lading is a documentthat is widely used in the carriage of goods by sea. It tends to be employed in the liner trade and on chartered ships in certain trades(Edgar Gold et al, Canadian Maritime Law, 2nd ed (Irwin 2016) at 564 [Canadian Maritime Law]). It is important to note from theoutset that there are various types of documents used in the carriage of goods by sea that are loosely referred to as bills of lading.

Whilethe documents may have similar characteristics, certain documents perform different legal and commercial functions (see Sir Treitel,Carver on Bills of Lading, 4th ed (Sweet & Maxwell 2017) at 1-002 – 1-011 [Carver]). For the purposes of the present section, it isimportant to define the features and functions of what are referred to as "“order”" or "“negotiable”" bills of lading (Canadian MaritimeLaw at 564-565).

For the moment, I shall simply refer to them as a bill of lading. [37] Justice Sean Harrington has described a bill of lading as "“a venerable document with centuries of use in the transportation ofgoods”" (H Paulin & Co Ltd v A Plus Freight Forwarder Co Ltd, 2009 FC 727 at para 27 [H Paulin]). It is generally accepted that a billof lading fulfills three key functions: (

a) to act as a receipt for the goods received by the carrier; (

b) to evidence the terms of the contractof carriage; and (

c) to act as a "“document of title”" (Canadian Maritime Law at 565; Canadian General Electric Company Limited et alv Les Armateurs du St-Laurent Inc et al (The Maurice Desgagnes), (FC), [1977] 1 FC 215 at para 14 [The MauriceDesgagnes]; Cami Automotive, Inc v Westwood Shipping Lines Inc, 2009 FC 664 at para 13 [Cami Automotive]; H Paulin at para 27). Inits argument, the Carrier has relied on these three functions, which it refers to as "“three essential characteristics”". The Carrier pleadsthat the Shipping Document does not fulfill the three functions, and thus, is not a bill of lading.

The Cargo Claimant does not dispute thatbills of lading can have three functions or characteristics, but as shall be discussed further below, pleads that it is the term bill of lading asused on the Shipping Document that is, among other things, determinative. [38] While there is no universally accepted definition of a bill of lading, a document that has all three characteristics will almost certainlybe one, while a document that does not will rarely be one (Aikens, Bills of Lading, at 19).

I now turn to the three functions orcharacteristics of a bill of lading, noting, however, that such a review cannot be isolated from the historical context in which thefunctions of a bill of lading developed (Aikens, Bills of Lading at 19).

(1) First Function – Receipt [39] The first function is that of a receipt. The earliest bills of lading were devised in the 14th century. By that time, the trade betweenports in the Mediterranean had grown significantly, and the trade practices had evolved such that certain merchants sent their goods tocorrespondents at the ports of destination rather than travelling with the goods as they had previously done (Aikens, Bills of Lading at1.1). Thus, the earliest bills of lading were merely receipts issued to merchants once their goods had been received by the carrier(Canadian Maritime Law at 565).

(2) Second Function – Evidence of the Contract of Carriage [40] By the 16th and 17th centuries, bills of lading began to include terms of the contract, thus performing a contractual function (Aikens,Bills of Lading, at 1.12 – 1.25). As to this second function, it is not to say that the bill of lading is the contract of carriage. It is wellsettled that the bill of lading is not, in and of itself, the contract between the shipper and the carrier.

Rather it is considered to be the"“best evidence”" of the terms of that contract (The Maurice Desgagnes at para 19; The Ardennes [1951] 1 KB 55; Canadian MaritimeLaw at 567). One of the reasons for this is that the bill of lading will generally only be issued after the goods have been received andshipped, but the agreement to ship the goods will have been reached before that (Canadian Maritime Law at 567). Hence the commonlaw evolved to accommodate the commercial practice (ibid).

(3) Third Function – Document of Title [41] The third function, acting as a "“document of title”", has its origins in transferability and the need to demonstrate entitlement to the delivery of the goods. In the 16th century, we see changes in the form of the bills of lading, likely caused by changes in trading practice(Aikens at 1-8 – 1.11). Shipments were dispatched before the shipper knew to whom the goods were destined, consequently the bill oflading needed to evidence entitlement to the goods (Aikens ibid).

The bill of lading therefore gave the holder of the bill a right againstthe carrier to call for delivery, and in turn it indicated to the carrier to whom the goods should be delivered (Aikens, ibid). In this sense,the bill of lading is a transferable key to the floating warehouse (The Delfini [1990] 1 Lloyd’s Rep. 347 at 359 [Delfini]). It must beproduced to the carrier by the person claiming delivery of the goods.

[ 42 ] As of the 1782 case Lickbarrow v Mason , the courts have recognized what may be loosely termed as the modern version of the bill of lading (Aikens, Bills of Lading at 1.28; Canadian Maritime Law at 565). In Lickbarrow v Mason , a merchant jury decided that by the custom of merchants, a shipped, negotiable, and transferable bill of lading may transfer the property in the goods through the endorsement and delivery, or the transmission, of the bill of lading ((1794) 5 TR at 683, 685-686).

Since Lickbarrow v Mason, the common law has accepted the commercial practice of transferring or trading the bill of lading as if it represented the goods while the goods are in transit ( Canadian Maritime Law at 570; The Rafaela S [2005] UKHL 11, [2005] 1 Lloyd’s Rep. 347 (HL) at para 59 [ The Rafaela S ] ).

It has been noted, at the time, that while the courts spoke of transfer, it was clear that the transfer of a bill of lading raised a presumption of an intention to transfer property, but that the presumption was rebuttable (Aikens, Bills of Lading , at 1.33). [ 43 ] The function of a bill of lading as " “document of title” " can therefore be broken down into two elements: (

i) the bill of lading’s transfer is a transfer of constructive possession entitling the holder to receive the goods from the carrier (the key to the floating warehouse); and (ii) while strictly speaking it does not transfer property in the goods which it represents (it is not a negotiable instrument akin to a bill of exchange or a cheque), it is capable of being part of the mechanism by which property is passed ( Delfini at 359; Canadian Maritime Law at 570; William Tetley, Marine Cargo Claims, 4 th ed, (Thompson) at 533 [Tetley]). [ 44 ] The concept that the bill of lading is a " “document of title” " , based on Lickbarrow v Manson, has been described, in its traditional sense, as meaning a document " “relating to goods the transfer of which operates as a transfer of the constructive possession in the goods, and may, if so intended operate as a transfer of them” " ( Carver at 6-002).

Sir Guentel Treitel in Carver on Bills of Lading notes that " “at common law there is no other class of documents which is recognized as a document of title in this sense” " ( Carver at 6-002). [ 45 ] For those unfamiliar with bills of lading, the expression " “document of title” " could be inadvertently understood to mean a document that necessarily transfers ownership, i.e. title, in the goods when it is transferred from one holder to another. As explained above, this is not the case, and thus it is better understood as a document entitling the holder to receive the goods at the end of the voyage.

Professor William Tetley’s explanation in this regard is helpful: The term “document of title” as applied to a bill of lading generally refers not to “title” in the sense of ownership of the goods carried under the bill, but, more precisely, to the right to possession of them. “Title” thus has to do primarily with the right of the consignee or last endorsee of the bill to demand delivery of the goods from the carrier or its agent at the port of discharge. In this sense, the bill of lading, although traditionally termed “a document of title”, is better understood as being a document of transfer.

It is important to make this distinction. (Tetley at 533; see also The Rafaela S. ) [ 46 ] The bill of lading can thus be described as a document entitling possession of the goods described therein rather than necessarily identifying the legal owner or the person with the right of property in the goods. By transferring or negotiating the bill of lading, the right to possession is transferred.

(4) The Form of a Bill of Lading [ 47 ] The foregoing briefly defines the three key functions of a bill of lading under common law. As to its form, in practice, a bill of lading tends to follow a fairly standardized two-page format with the details of the shipper, the cargo, the date, the name of the ship, and the ports of loading and discharge on the front (also known as the face), and the carrier’s standard printed terms on the back ( Canadian Maritime Law at 565).

Bills of lading have traditionally been issued in sets of at least three original copies, which, as described by Professor Gold, have generally been dealt with as follows: One is given to the shipper (for transmittal to the consignee), one is kept by the shipping company for its records, and one is carried on board attached to the manifest of the ship. The latter is required for customs purposes for entry of the ship at the port of discharge, as well as to match the original bill presented by the consignee or endorsee in exchange for the delivery of the goods.

The practice of issuing sets of bills of lading reflects the vagaries and inefficiencies of communications in times past; the principle remains that once one copy had been validly presented to the carrier, the rest stand void. ( Canadian Maritime Law at 566.) [ 48 ] In the introduction to this section, I referred to bills of lading as being " “order” " or " “negotiable” " bills of lading. This refers to the transferability of the bills of lading.

An order bill of lading is made out to " “order” " , " “order or assigns” " or a named consignee and to his " “order and assigns” " , or similar words of transferability ( Carver at 1-011 – 1-012).

Where the bill of lading is to a named consignee or his " “order” " , the practice to transfer it is to simply for the consignee to endorse the bill of lading with the name of the transferee under its signature and provide the transferee with possession of the bill ( Canadian Maritime Law at 570). [ 49 ] As will be discussed further below, certain types of bills of lading and shipping documentation have evolved alongside commercial practices with the result that these newer documents (

i) are not referred to as order bills of lading, (ii) are no longer transferable or negotiable, and (iii) in certain cases, but not all, they no longer need to be presented in order to obtain delivery. This is relevant to the matter at hand, as the presence of the statement " “not negotiable unless consigned to order” " and the question of presentation at delivery relate to the characterization of the Shipping Document. For the purposes of the present

section and

section V.B (The Hague-Visby Rules – Introduction and Context) of these reasons below, references to a bill of lading shall mean an order or a negotiable bill. Before turning to the more recent forms of shipping documents, we first turn to the international convention, applicable in Canada, that governs carriage of goods by sea under bills of lading. B. The Hague-Visby Rules – Introduction and Context [ 50 ] A discussion of the Hague-Visby Rules provides context that assists in the determination of this matter. The Hague-Visby Rules are appended to the Act and incorporated into it by reference. It has been pled by the Carrier that the definition of a contract of carriage as

contained in the Hague-Visby Rules does not include the Shipping Document, with the result that neither

section 43 nor

section 46 of the Act apply. The Cargo Claimant disagrees, and invites this Court to consider the imbalance in bargaining power between carriers and cargo interests that led to the development of international regimes, such as the Hague Visby Rules , and ultimately to

section 46 of the Act.

The Cargo Claimant relies on the reasons authored by Justice Gauthier in The Federal Ems , where Federal Court of Appeal considered the liner trade and the imbalance of power that the international regimes sought to address ( Canada Moon Shipping Co Ltd v Companhia Siderurgica Paulista-Cosipa (The Federal Ems) 2012 FCA 284 [ The Federal Ems ]). [ 51 ] Like Justice Gauthier before me, I consider that, as part of the legal context of the provisions that will be interpreted, it is worth considering how the Hague-Visby Rules came to be, what they covered, and the mischief they sought to address ( The Federal Ems at para 45 ; see also Riverstone Meat Co Pty Ltd v Lancashire Shipping Co Ltd (The Muncaster Castle) [1961] 1 Lloyd’s Rep 57 at 67 [ The Muncaster Castle ] ). [ 52 ] By the 17 th century, in most European nations and new world colonies, ocean carriers were held strictly liable for the goods they carried.

In the centuries that followed, carriers were effectively treated as insurers of the cargo they carried ( Canadian Maritime Law at 596; The Federal Ems at para 46 ; Riley v Horne (1828) 130 ER 1044 at 1045) . By the same token, under common law, a carrier is entitled to contractually limit its liability. Prior to the 19 th century, attempts by carriers to escape liability through contractual exemptions were restricted by adverse reactions from cargo interests. In the 19 th century, however, advances in shipping and increases in world trade resulted in an increase in the relative bargaining power of carriers.

As a result, extensive exculpatory clauses were inserted into bills of lading, resulting in little or no liability on the part of the carriers ( Canadian Maritime Law at 596; The Federal Ems at para 46 ; Rafaela S at para 8). Divergences in the law began to appear where previously it had been fairly uniform. The courts in England were willing to enforce such exculpatory clauses on the basis of freedom of contract, while courts in the United States began to invalidate the clauses on the basis of public policy. [ 53 ] It soon became clear that certainty and uniformity were desirable for all involved.

In 1882, the International Law Association attempted to reach an agreement on a model bill of lading that would regulate the rights and duties as between the carriers and the cargo interests, but was ultimately unsuccessful. Not long thereafter, a number of states " “adopted what might be considered the first consumer protection legislation regulating the rights and obligations of ocean carriers under bills of lading, albeit in the commercial world” " ( The Federal Ems at para 47 ).

In 1893, the United States enacted the Harter Act , creating what was considered at the time to be a balanced regime between carriers and cargo interests. Shortly thereafter, New Zealand (in 1903), Australia (in 1904), Fiji (in 1906), Canada (in 1910), and Morocco (in 1919) all adopted legislation modelled after the Harter Act .

Furthermore, many other nations were contemplating introducing similar legislation, notably Denmark, Finland, France, Iceland, the Netherlands, Norway, South Africa, Spain and Sweden (Comité Maritime International, The Travaux Préparatoires of the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading of 25 August 1924, The Hague Rules, and of the Protocols of 23 February 1968 and 21 December 1979, The Hague-Visby Rules

(1997) CMI Headquarters at 23-24). [ 54 ] As noted by Professor Gold and quoted by Justice Gauthier, it had become " “clear that a proliferation of national legislation imposing different rules on merchant ships, which, by the nature of their business, call in many different countries, would cause legal confusion and inhibit trade.” " ( Canadian Maritime Law at 596; The Federal Ems at para 48 ). This proliferation of national legislation was brought to an end by work of the International Law Association and the newly founded Comité Maritime International [CMI].

The CMI, a non-governmental international organization founded in 1897, brought together experts in maritime law from around the world to contribute towards the unification of maritime law. After meetings and diplomatic conferences held in Brussels over the course of several years, a compromise was struck between the rights, duties and obligations of the parties to contracts of carriage of goods as evidenced by bills of lading. The resulting Hague Rules of 1924, which entered into force in 1931, was a success and was widely ratified and adopted throughout the world ( The Federal Ems at para 49 ).

So much so, that it has even been argued that the Hague Rules has acquired the status of international customary shipping law – lex maritima (Maris Lejnieks, " “Diverging solutions in the harmonisation of carriage of goods by sea: which approach to choose?” "

(2003) Uniform Law Review at 304). [ 55 ] As explained by Viscount Simonds in The Muncaster Castle , the aim of the Hague Rules " “was broadly to standardise within certain limits the rights of every holder of a bill of lading against the shipowner, prescribing an irreducible minimum for the responsibilities and liabilities to be undertaken by the latter.

To guide them the framers of the rules had amongst other precedents the American Harter Act of 1893, the Australian Sea Carriage of Goods Act , 1904, the Canadian Water Carriage of Goods Act , 1910, and, though they had no British Act as a model, they had decisions of the English courts in which the language of the Harter Act had fallen to be construed by virtue of its provisions being embodied in bills of lading.” " ( The Muncaster Castle at 67). [ 56 ] In 1936, Canada incorporated the Hague Rules into its domestic legislation entitled the Carriage of Goods by Water Act , thereby replacing the Water-Carriage of Goods Act (1910). [ 57 ] As a result of advancements and changes in the shipping industry, including the advent of containers, certain updates were made to the Hague Rules in 1968 by way of a protocol.

The resulting Hague-Visby Rules came into force in 1977. They were incorporated into Canadian law by way of the 1993 Carriage of Goods by Water Act . [ 58 ] In parallel, it was recognized that the Hague-Visby Rules were in need of modernization. The United Nations Commission on International Trade Law (UNCITRAL) undertook the work of creating a new convention dealing with carriage of goods by sea, resulting in the Hamburg Rules of 1978 ( The Federal Ems at para 49 ). The Hamburg Rules raised the limits of liability and narrowed the number of exceptions from which the carrier may benefit.

Unlike the Hague-Visby Rules, they included provisions dealing with arbitration and jurisdiction clauses. The Hamburg Rules were also meant to apply to new types of shipping documents used by carriers that had characteristics that differed from those of the traditional bills of lading ( The Federal Ems at para 51 ). [ 59 ] As noted by both Professor Gold and the Federal Court of Appeal, the Hamburg Rules have not been widely adopted ( The Federal Ems at para 51 ; Canadian Maritime Law at 597).

Few, if any, of those states who ratified the Hamburg Rules are considered significant maritime trading nations ( Canadian Maritime Law at 597). A further convention, The Rotterdam Rules of 2009, was the latest effort at modernization but it has not entered into force. As a result, most nations operate under Hague or Hague-Visby Rules regimes. In practice, while the variety of shipping documentation used in the liner trade has increased in recent years, the law governing the carriage of goods

by common carriers has remained substantially the same since 1924, and in many respects even earlier ( Canadian Maritime Law at 564).

Professor Gold has stated that " “[u]ndoubtedly a new internationally uniform regime that meets the needs of carriers and cargo owners operating modern, containerized traffic by streamlined electronic processes is required.” " ( Canadian Maritime Law at 564). [ 60 ] Given that there has not been a widely adopted carriage of goods by sea convention since the Hague and Hague-Visby Rules, and that many countries did not embrace the Hamburg Rules, an appreciable number of nations have taken steps to modernize certain aspects of their carriage regimes through domestic legislation, while nevertheless retaining many aspects of the Hague and Hague-Visby Rules .

Such nations include the United Kingdom, Australia, New Zealand, South Africa, Singapore, Denmark, Sweden, Norway, Finland, Germany, the Republic of Korea and the People’s Republic of China ( Cami Automotive at para 46 ; Tetley at 2304, 2420, 2446, 2533, 2555, 2581, 2597). [ 61 ] Canada’s carriage of goods by water regime remains a Hague-Visby Rules based regime. In 2001,

Part 5 of the Act replaced the 1993 Carriage of Goods by Water Act. Save for

section 46 of the Act, Canada’s carriage regime has remained the same. As of the date of this judgment, no legislation updating the Hague-Visby Rules based regime has been passed in Canada. [ 62 ] It is helpful to keep the foregoing history and context in mind. The Cargo Claimant pleads that the Shipping Document was issued by a common carrier in the context of the liner trade on the basis of standard carrier terms that were not negotiable.

The Cargo Claimant submits that it is in need of protection and should be afforded it in line with the aims of Canada’s carriage of goods by water regime as applied in the context of modern carriage. The Carrier disagrees and submits that the material provisions of the Act simply do not cover the Shipping Document, because Canada’s carriage of goods by water regime is a Hague-Visby Rules based regime . If the Hamburg Rules or the Rotterdam Rules had been enacted in Canada, this would not be an issue, but they are not.

Consequently, we must turn to the definition of a contract of carriage contained in the Hague-Visby Rules. C. Is the Shipping Document a Contract of Carriage Covered by a Bill of Lading or Any Similar Document of Title Under the Hague-Visby Rules ? [ 63 ]

Section 46 of the Act applies to " “a contract for the carriage of goods by water” " . This expression is not defined in the Act . The Carrier pleads that the same expression is also used in

section 43 of the Act , where it provides that the " “ Hague-Visby Rules have the force of law in Canada in respect of contracts for the carriage of goods by water” " . In other words, if a contract is a " “contract for the carriage of goods by water” " , then, pursuant to

section 43, and provided the other conditions are met, the Hague-Visby Rules apply to that contract. The Carrier submits that a " “contract for the carriage of goods by water” " , be it in

section 43 or

section 46 of the Act must have the same meaning. If, pursuant to

section 43 , a contract for the carriage of goods by water is the type of contract to which the Hague-Visby Rules apply by force of law, then

section 46 can only apply to those same types of contracts. [ 64 ] The Carrier relies on Cami Automotive , where Justice Edmond P. Blanchard found that to determine the meaning of the phrase a " “contract for the carriage of goods by water” " in the context of

section 43 of the Act , one must turn to the definition of " “contract of carriage” " as contained in

Article 1(

b) of the Hague-Visby Rules, appended to the Act .

Article 1(

b) defines a contract of carriage as a contract " “covered by a bill of lading or any similar document of title…” " . [ 65 ] The Carrier’s position is that neither the Service Contract nor the Shipping Documents are contracts " “covered by a bill of lading or similar document of title” " as per the Hague-Visby Rules . Consequently, they are not the type of contract that attracts the application of the Hague-Visby Rules by force of law pursuant to

section 43 of the Act , and thus do not attract the application of

section 46 of the Act . Simply put, the phrase cannot mean one thing in

section 43 and another in

section 46 of the Act . [ 66 ] The Cargo Claimant pleads that (

i) the Shipping Document is a bill of lading, as it clearly says so on the face of the document, and (ii) the phrase contained in

section 46 of the Act, whose policy it is to protect Canadian importers and exporters, should be given a wider scope than the same phrase found in

section 43 of the Act or the definition contained in

Article 1(

b) of the Hague-Visby Rules. [ 67 ] Prior to considering the scope of

section 46 of the Act , I shall first consider whether the Shipping Document and/or the Service Contract constitute a contract of carriage as defined by

Article 1(

b) of the of the Hague-Visby Rules, such that it is the type of contract that attracts the application of the Hague-Visby Rules by force of law. [ 68 ] For the purposes of the application of the Hague-Visby Rules,

Article 1(

b) defines a contract of carriage to which they apply as follows: …contracts of carriage covered by a bill of lading or any similar document of title , in so far as such document relates to the carriage of goods by water, including any bill of lading or any similar document as aforesaid issued under or pursuant to a charter-party from the moment at which such bill of lading or similar document of title regulates the relations between a carrier and a holder of the same. " " […] contrat de transport constaté par un connaissement ou par tout document similaire formant

titre pour le transport des marchandises par eau, il s’applique également au connaissement ou document similaire émis en vertu d’une charte-partie à partir du moment où ce

titre régit les rapports du transporteur et du porteur du connaissement; " " [Emphasis added.] " " [Soulignement ajouté.] " "

[ 69 ] For the purposes of the matter at hand, the material phrase is " “a bill of lading or any similar document of title” " . Bear in mind that the

interpretation of this phrase has been informed by the trade practices and the common law functions of a bill of lading as described in

section V.A ( Bills of Lading ) of these reasons, namely (

a) a receipt for the goods; (

b) evidence of the contract of carriage; and (

c) a " “document of title” " . [ 70 ] It is common ground between the parties that the Shipping Document was used as an acknowledgement of receipt for the cargo. Moreover, it is clear from the record that the Shipping Document evidences the terms of carriage as between the Cargo Claimant and the Carrier. The material issue, as plead by the Carrier, is whether the Shipping Document is a " “document of title” " .

The Carrier submits that it is not. [ 71 ] The Shipping Document names the Cargo Claimant as consignee, meaning, the Cargo Claimant is identified on the Shipping Document as the party to whom the cargo is to be delivered. There is no language contained on the face of the Shipping Document that indicates that it is transferable, as would have been the case had it been made out to the named consignee (the Cargo Claimant) and its " “order or assigns” " or similar words of transferability ( Carver at 1-011 – 1-112).

The upper right-hand corner of the Shipping Document contains the printed words " “NOT NEGOTIABLE UNLESS CONSIGNED TO ORDER” " . Not only is there no language permitting transferability in the Shipping Document, there is language negating transferability ( Carver at 1-011; Cami Automotive at para 15 ). [ 72 ] The fact that a bill of lading is not transferable does not necessarily mean that it is excluded from

Article 1(

b) of the Hague-Visby Rules on the basis that it is not a " “document of title” " . A " “straight bill of lading” " is one that is consigned to a named consignee and cannot be transferred. The lack of transferability is often made clear by the bill being stamped, or containing the phrase, " “non- negotiable” " . Historically, non-negotiable bills of lading have not been viewed as a document of title in the common law sense, due to their lack of transferability ( Carver at 6-016). [ 73 ] In The Rafaela S , the House of Lords considered the question of whether a straight bill of lading was " “a bill of lading or any similar document of title” " for the purpose of

Article 1(

b) of the Hague-Visby Rules . The House of Lords concluded that a straight bill of lading was a document of title for the purposes of the Hague-Visby Rules on the basis that, inter alia , it had to be presented in order to obtain delivery of the cargo (at para 20). It was found that production of the straight bill of lading to the carrier was a prerequisite to delivery given the express terms it contained, but also that production of a straight bill of lading is a necessary precondition to delivery even in the absence of an express provision requiring it (at para 20 per Lord Bingham).

The straight bill of lading in the Rafaela S indicated on its face that a set of three (3) original bills of lading was issued and it contained an attestation clause: " “IN WITNESS whereof the number of Original Bills of Lading stated above all of this tenor and date, has been signed, one of which being accomplished, the others to stand void. One of the Bills of Lading must be surrendered duly endorsed in exchange for the goods or deliver order” " (at para 32).

Placing aside the last sentence of the attestation clause, Lord Steyn found as follows: In any event, the issue of a set of three bills of lading, with the provision "one of which being accomplished, the others to stand void" necessarily implies that delivery will only be made against presentation of the bill of lading.

In my view the decision of the Court of Appeal of Singapore in Voss v APL Co Pte Ltd [2002] 2 Lloyds LR 707 at 722 that presentation of a straight bill of lading is a requirement for the delivery of the cargo is right. [ 74 ] Lord Steyn distinguished straight bills of lading from waybills noting authority that waybills are not required to be produced in order to obtain delivery and that " “straight bills of lading are invariably issued in sets of three and waybills are not” " ( Rafaela S at para 46). Note that waybills are defined and addressed in detail in

section V.D of these reasons, further below. [ 75 ] In Voss v APL Co Pte Ltd [2002] 2 Lloyds LR 707, referenced by Lords Steyn, Bingham and Rodger in the Rafaela S , the Court of Appeal of Singapore considered a non-negotiable straight bill of lading issued by a carrier in a set of three originals and containing the language " “Upon surrender to the Carrier of any one negotiable bill of lading, properly endorsed, all others shall stand void” " (at para 4). The Court of Appeal found that presentation of the straight bill of lading was required in order to obtain delivery of the goods.

If the parties had wished to avoid the requirement of presentation, they would not have issued a bill of lading with three originals (at para 49). The Court of Appeal contrasted a waybill with a straight bill of lading noting that a waybill is retained by the shipper and all the consignee need show to take delivery is proof of his identity (para 53).

While a waybill is a receipt, it is unlike a straight bill of lading in that it is not a document of title (at para 53). [ 76 ] This Court, relying on the Rafaela S, has recognized that both negotiable bills of lading and non-negotiable bills of lading (straight bills of lading) are " “documents of title” " and as such must be presented at the port of discharge to obtain delivery of the goods ( Cami Automotive at para 16 ).

In Cami Automotive , Justice Blanchard found that a shipping document was not a " “document of title” " because, among other things, it did not have to be produced at the port of discharge and only one copy was issued by the carrier, rather than in triplicate as is usually the case for bills of lading (at paras 28, 30).

Consequently, the Court found the document to be a waybill rather than a straight bill of lading. [ 77 ] Justice Harrington in Timberwest Forest Corp v Pacific Link Ocean Services Corporation , 2008 FC 801 [ Timberwest ] described a bill of lading as follows, noting the fundamental importance of delivering the cargo to the holder of the bill: [13] Although the bill of lading is a venerable document, it is not defined in either the Hague-Visby Rules or in our Bills of Lading Act.

Article I of the Rules provides that they only apply to "...contracts of carriage covered by a bill of lading or similar document of title." Depending on its terms, a bill of lading may, or may not, be a negotiable instrument.

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 … [Emphasis added.] [ 78 ] In the present matter, the Carrier highlights that only one copy of the Shipping Document was issued and that the copy did not have to be presented by the Cargo Claimant in order to obtain delivery of the cargo. [ 79 ] I find that the fact that the Shipping Document was not required to be surrendered to the Carrier or its agent in order to obtain

delivery of the cargo substantially weighs against the Shipping Document being considered a straight bill of lading or other document oftitle under the Hague-Visby Rules. It is clear from the record that the parties did not intend that the Shipping Document be presented inorder to obtain the cargo. Moreover, it was the practice of the parties for such shipments, the modus operandi, that presentation was notrequired. For the particular cargo at issue, the Cargo Claimant was not required to present or tender a copy of the Shipping Document inorder to obtain delivery.

The Shipping Document contains the notation "“express release”", which is in fact what took place. [80] Alongside the practice of the parties, I also find that the terms contained in the Shipping Document speak against its production as aprerequisite to delivery. The Shipping Document contains a printed attestation clause "“IN WITNESS WHEREOF, the Carrier hassigned ____ original Bills of Lading, all of the tenor and date, and if one is accomplished the others shall be void. Dated________Signature________”".

Unlike in the Rafaela S, it was the practice in this case that no originals were issued and only one copy was issuedfor each cargo. In the copies of the Shipping Documents that were issued by the Carrier for the cargos, the attestation clause is left blankindicating no original bills were ever issued nor was the Shipping Document signed. No original bill was thus tendered for delivery thatwould render the other originals void.

That no original bills, let alone a set of three, were issued weighs against the Shipping Documentbeing a document of title as covered by the Hague-Visby Rules. [81] The date and signature lines contained in the Shipping Document, right below the attestation clause quoted above, were also leftblank. The Carrier, relying upon The Maurice Desgagnes, pleads that the fact that the Shipping Document is unsigned is decisive.

In TheMaurice Desgagnes, the Court sought to determine whether a document issued in relation to the carriage of cargo was a bill of ladingsuch that it attracted the application of the Hague Rules as annexed to the Carriage of Goods by Water Act (the predecessor to the Act).As noted previously,

Article 1(

b) of the Hague-Visby Rules remains the same. Justice Dube noted that the document was unsigned andconducted an extensive review of numerous authorities in order to determine whether a signature was an essential element of a bill oflading. Justice Dube cited British Shipping Laws, both the first and second editions, as setting out the essential facts in a bill of ladingthat include (at paras 17-18): The number of signed negotiable copies. The bill of lading must state how many negotiable copies have been signed.

Two orthree copies are most usual, but sometimes there are more or even only one, according to the requirements of the shipperrather than of the shipping company… A bill of lading is a document which is signed by the shipowner or his agent… [82] Following his review of the authorities, Justice Dube concluded that he was "“of the view therefore that the unsigned documentreferred to in this application is not a bill of lading within the meaning of the Carriage of Goods by Water Act”" (at para 32).

JusticeDube also considered negotiability to be of "“the utmost importance”" in determining whether a document is a bill of lading under thepredecessor to the Act (at para 25). It was these two factors, the lack of signature and the non-negotiability of the document, that led toJustice Dube’s finding that the Hague Rules did not apply (at para 25). As to the non-negotiability of the document, I respectfullydisagree with Justice Dube.

In light of more recent authorities, it is clear that a bill of lading that attracts the application of the Hague-Visby Rules can be either negotiable or non-negotiable (Rafaela S, Timberwest, Cami Automotive, and H Paulin (at para 28)). I note thatJustice Dube’s decision was overturned on appeal (Canadian General Electric Co v Armateurs du St-Laurent (FCA),[1977] 2 FC 503 (CA)), although on grounds that do not detract from his analysis on bills of lading.

This analysis has since been cited bythis Court (Cami Automotive at para 13). [83] With respect to the signature or lack thereof, I find this to be, in the words of Justice Dube, "“an important evidentiary element”"(The Maurice Desgagnes at para 16). In the matter at hand, the Shipping Document contains no signature, whether written or electronic.Moreover, it is clear from the record that they were never intended to be signed. The lack of signature by the Carrier or its agent was notan oversight, rather it was part of the modus operandi.

While I would not go so far as to say that the lack of signature is determinative ofthe matter at hand, it certainly weighs against the Shipping Document being considered a bill of lading or other document of title underthe Hague-Visby Rules. [84] I pause here to underscore the importance of whether the Shipping Document was intended to be signed. As noted above, the secondfunction of the bill of lading is to evidence the terms of the contract of carriage.

The bill of lading is not in itself the contract of carriage(Saint John Shipbuilding & Dry Dock Co v Kingsland Maritime Corp, (1981) (FCA), 126 DLR (3d) 332 (FCA) atpara 17) [Saint John Shipbuilding] , although it has often been described as the "“best evidence”" of the contract (Tetley at 524) Asstated by Lord Goddard and relied on by this Court, "“a bill of lading it not in itself the contract between the shipowner and the shipper ofthe goods, thought [sic] it is said to be excellent evidence of its terms.

The contract has come into existence before the bill of lading issigned; the latter is signed by one party only, and handed by him to the shipper usually after the goods have been put on board.”" (TheArdennes [1951] 1 KB 55 at 59; see also H Paulin at para 27; The Maurice Desgagnes at para 19; Saint John Shipbuilding at para 15). [85] A contract of carriage therefore comes into existence before a bill of lading is even issued or signed.

The contract ultimately may becomprised of a variety of documents and exchanges, including the arrangements for shipment, the tariffs of the carrier, a booking note, amate’s receipt, the exchanges with the carrier and/or its agents, and the bill of lading, if issued (or waybill or other document issued orintended to be issued by the carrier or its agent, if no bill of lading is used). Consequently, when facing a claim, it is no defence to saythat no bill of lading was ever in fact signed, if it had been the intention of the parties for one or more bills to be issued and signed.

Thesecomments hold equally true with respect to the intention of the parties as to whether a document so issued had to be tendered in order toobtain delivery. It would be no defence to a claim in misdelivery if the parties had intended that delivery be made against thepresentation of a bill of lading.

In the matter at hand, the modus operandi evidences a clear intention, and practice, on the part of theparties that the Shipping Documents remain unsigned, are stamped non-negotiable, and are not tendered in order to obtain delivery. [86] The Cargo Claimant acknowledges that the Shipping Documents were unsigned and did not need to be presented in order to obtaindelivery of the cargo, however, it pleads that the Shipping Document clearly states on its face "“INTERNATIONAL BILL OFLADING”" and accordingly that the Carrier should be bound by the legal meaning of this term.

In short, the Carrier is a sophisticatedcarrier, who chose to use the term "“bill of lading”" in the context of a standard form document that it prepared. The Cargo Claimantsubmits that, when interpreting a contract between the parties, one must presume that the Carrier intended the legal consequences of thewords the Carrier used (Geoff R. Hall, Canadian Contractual

Interpretation Law, 4th ed (2020) at 120; Eli Lilly & Co v Novopharm Ltd,

(SCC), [1998] 2 SCR 129 at para 56 [Eli Lilly]). [87] On the contrary, the Carrier submits that Eli Lilly in fact supports its position because one must equally assume that the partiesintended the legal consequences of the other terms contained in the Shipping Document. The Carrier pleads that while the ShippingDocument does have "“bill of lading”" on its face, its other terms support an

interpretation that the document is not a "“bill of lading orsimilar document of title”" under the Hague-Visby Rules, including: the stipulation that it is not negotiable unless consigned to order (nottransferable), the fact that it is unsigned, that no originals are issued, that it is stamped non-negotiable, that the attestation clause remainsblank, the reference to the Service Contract, and has the notation "“express release”". [88] The difficulty, legally speaking, is that there is a measure of ambiguity in the Shipping Document’s terms.

Practically speaking, thisderives from the use of what is termed a hybrid or dual purpose form (Carver at 06-21). A hybrid form of carriage document is one that,according to the way in which the blanks are filled in and how it is stamped, can be used either as an order bill of lading, a straight bill oflading, or neither (Carver at 06-21). Often, such hybrid forms are used either as order bills or straight bills (Rafaela S at para 6; Carver at06-21), but I do not find such forms to be restricted to those two types of carriage documents.

The use of hybrid forms has been said to bean unfortunate development that invites errors and spawns litigation. Lord Justice Rix of the Court of Appeal in The Rafaela S [2003]EWCA Civ 556, affirmed by the House of Lords, criticized the use of hybrid forms: 146 It seems to me that the use of these hybrid forms of bill of lading is an unfortunate development and has spawnedlitigation in recent years in an area which for the previous century or so has not caused any real difficulty. Carriers shouldnot use bill of lading forms if what they want to invite shippers to do is to enter into sea waybill type contracts.

It may betrue that ultimately it is up to shippers to ensure that the boxes in these hybrid forms are filled up in the way that best suitsthemselves; but in practice I suspect that serendipity often prevails. In any event, these forms invite error and litigation,which is best avoided by a simple rule. [89] The Carrier noted during the hearing that the situation would have been clearer if the Carrier had the practice of using separateforms for waybills and bills of lading. This was, however, simply not their practice. The Carrier used the same base, or hybrid, form formultiple type of commercial arrangements.

The Carrier submits that the use of the hybrid form does not make the Shipping Documentsat issue a "“bill of lading or similar document of title”" because, by virtue of how they are filled in (i.e., express release, non-negotiable,unsigned, not requiring presentation), they lack the essential characteristics of a bill of lading or similar document of title under theHague-Visby Rules.

As noted above, the Cargo Claimant disagrees. [90] As in the Rafaela S, the use of a hybrid form in the present matter has spawned a dispute over the nature of the Shipping Document.It is true that the commercial arrangements between participants in the transportation and logistics chain do not always fit into neat, tidyand easily identifiable legal categories. In such cases, as here, it is the task of the Court to determine the true nature and legal effect ofthe contractual arrangements between the parties.

When considering a mercantile document, issued in the ordinary course of trade, acourt will often be slow to reject the description which the document bears, particularly where such a document has been issued by theparty seeking to reject the description (Rafaela S at para 5).

This is the essence of the Cargo Claimant’s argument: that the Carrier shouldbe held to the term it chose, "“bill of lading”", and should not now be entitled to distance itself from that term. [91] The Cargo Claimant relies on the judgment of Justice Harrington in H Paulin for the proposition that the Carrier ought to be boundby the term "“bill of lading”" and that it cannot escape the wording of its own document. I find that the circumstances in H Paulin differfrom those in the present matter. In H Paulin, the transport document had been stamped "“freight prepaid”".

Justice Harrington foundthat the "“freight prepaid”" notation was not a representation as between the carrier and the shipper, but it was vis-à-vis others who relyon the document. As such, the carrier who represented by virtue of the stamp that freight had been paid was bound by thatrepresentation, and could not claim freight from the ultimate receiver of the cargo (H Paulin at paras 1-2, 63). [92] I do not find that the header on the hybrid form ("“INTERNATIONAL BILL OF LADING – NOT NEGOTIABLE UNLESSCONSIGNED TO ORDER”") is a representation in the same manner as "“freight prepaid”" was in H Paulin.

Rather, the header on thehybrid form is one of numerous factors that one must consider when determining the true nature of the Shipping Document. I agree thatthe Court should be slow to reject a description given to a document by the Carrier, but the header on the form cannot be wholly divorcedfrom manner in which the form is filled in, the options that are selected or left blank, the stamps that are applied to the form, and thepractice of the parties. I therefore do not find the term "“bill of lading”" in the Shipping Document to be determinative.

While the use ofthe term is a factor that does weigh in favour of the Shipping Document being considered a bill of lading under the Hague-Visby Rules, itdoes not, in my view, outweigh the other factors discussed in detail above. [93] Ultimately, Sir Richard Aikens notes that the definition of a bill of lading depends on the relevant context, and furthermore, "“…thequestion of whether a document satisfies the relevant definition depends on the substance of the document and not its form. A documentdescribing itself as a bill of lading will not be one unless it has the necessary attributes.

Conversely, a document may be a bill of ladingwithout those words appearing in it”" (Aikens, Bills of Lading at 2.8). [94] To summarize, the Shipping Document is non-negotiable, both by virtue of the printed term ("“NOT NEGOTIABLE UNLESSCONSIDERED TO ORDER”") and the large "“NON-NEGOTIABLE”" stamp on the face of the document. The form used was a hybridform that is titled "“INTERNATIONAL BILL OF LADING – NOT NEGOTIABLE UNLESS CONSIGNED TO ORDER”", andcontains numerous references to the "“bill of lading”". The Cargo Claimant is the consignee and the notify party.

No originals wereissued, nor was it signed, and the attestation clause was left blank. The Shipping Document contains the notation "“express release”",and the Cargo Claimant was not required to present it in order to obtain delivery. It was the practice between the parties that suchdocuments were left unsigned, with no originals issued, and did not have to be surrendered to the Carrier or its agent for delivery. Savefor the printed references to the bill of lading on the form, I find that the remainder of the factors are either neutral or support theCarrier’s position.

In particular, the fact that the Shipping Document was unsigned, with no originals issued, and presentation was notrequired to obtain delivery of the Cargo, weighs heavily against the Shipping Document being a contract of carriage, i.e., a bill of ladingor other document of title, under the Hague-Visby Rules. [95] The foregoing indicates therefore that the Shipping Document is not a bill of lading or other document of title under the Hague-

Visby Rules. The Carrier pleads that, instead, the Shipping Document is a waybill. I will therefore consider the characteristics of waybills, before concluding on the true nature and effect of the Shipping Document. D. Is the Shipping Document akin to a Waybill? [ 96 ] As noted previously, as mercantile custom and practice have evolved, so has the documentation used by those involved with the carriage of goods by sea. Conventional negotiable bills of lading have numerous advantages and have developed to facilitate international trade. As addressed previously in

section V.A ( Bills of Lading ) of these reasons, above, their function as a document of title permitted the right to possession of the cargo to be transferred and formed part of the mechanism by which property in the cargo passed. A negotiable bill of lading is a useful document for merchants and bankers who wish to buy, sell or borrow against cargo while in transit ( Canadian Maritime Law at 571). [ 97 ] Negotiable and straight bills of lading, however, come with challenges. As they must be presented in order to obtain delivery of the cargo, delays in documentation may well result delays in delivery.

A bill of lading will be issued by a carrier once the cargo is loaded onboard. If a shipper is lucky, an original bill of lading will be ready for pick-up the day after the vessel sails, however, it is common place for it to take several days (Susan Beecher, “Can the Electronic Bill of Lading Go Paperless?” (2006) 40 Int’l Law at 633 [Beecher]).

Modern container vessels operate so quickly that they often arrive at the port of discharge before the bills of lading have been processed through the shipping and banking systems (Nicholas Gaskell et al, Bills of Lading: Law and Contract (Informa Law, 2000) at 20 [Gaskell]). If a consignee is unable to promptly receive their cargo at the port of discharge due to documentation delays, they are then exposed to financial penalties such as demurrage charges (Beecher at 634). [ 98 ] In addition to potential delays and the costs associated thereto, simply obtaining a conventional bill of lading has a cost to it.

Carriers charge fees in order to issue such bills of lading. The risk and the cost of the features of a bill of lading are not always necessary. In many instances, the identity of the consignee is known from the outset and the cargo is not being sold or financed while in transit.

Take for example, where one company in a group ships cargo overseas to another company in the same group or where there is an in-house transfer within a multinational corporation (Gaskell at 20). [ 99 ] Carriers responded to the problems caused by bills of lading by developing simpler documents known as waybills or sea waybills (Gaskell at 20; Canadian Maritime Law at 571). The introduction of computers and technical advancements in the later part of the twentieth century also facilitated the development of waybills ( Cami Automotive at para 14 ).

Although waybills share certain characteristics with traditional bills of lading, they differ in a number of respects ( The Federal Ems at para 51 ). A waybill, when issued, is made out to a named consignee to whom the cargo is to be delivered. It is effectively a non-negotiable receipt which contains contractual terms (Gaskell at 20).

A waybill therefore performs two of the three functions of a bill of lading, in that it acts as a receipt for the goods and as evidence of the contract of carriage (Gaskell at 20; Canadian Maritime Law at 571; Cami Automotive at para 17 ). [ 100 ] A waybill is not a document of title, and thus, it does not have to be presented to the carrier in order to receive delivery of the cargo ( Canadian Maritime Law at 571-572; Cami Automotive at para 17 ; Aikens, Bills of Lading at 22; Rafaela S at para 46).

It is simply documentary evidence of the consignee’s right to receive the cargo from the carrier ( Canadian Maritime Law at 572). To receive delivery, a recipient simply provides the carrier with the information required to show that the recipient is the consignee named in the waybill (i bid ). This is the principal advantage of using a waybill. Cargo interests are not exposed to the inconvenience and cost of having to wait for the bill of lading to arrive with the consignee before the cargo can be delivered by the carrier (Aikens, Bills of Lading at 22).

Unless presentation is required (and possibility negotiability as well), there are good commercial reasons why parties avail themselves of convenient and less costly waybills. [ 101 ] Given that waybills are not considered to be bills of lading or similar documents of title, the Hague-Visby Rules do not apply to them by force of law ( Cami Automotive at paras 44-45 ; Aikens Bills of Lading at 22; David Colford, " “The Federal Courts and Admiralty Law” " in The Federal Court of Appeal and the Federal Court 50 Years of History, (Irwin Law 2021) at 493). As detailed in

Section V.C of these reasons, in order for the Hague-Visby Rules to be compulsory, there must be a contract of carriage as defined in

Article 1(

b) of the Hague-Visby Rules meaning one covered by a bill of lading or similar document of title. As such, when a waybill is used, the parties are free of the imposition of the rights and obligations contained in the Hague-Visby Rules . This is distinguished from the Hamburg Rules and the Rotterdam Rules , which do apply to such documents. That is not to say, however, that the Hague-Visby Rules are not relevant when considering a waybill, because in practice, the Hague or Hague-Visby Rules are frequently incorporated by reference into contracts evidenced by waybills.

In the matter at hand, the Shipping Document provides for US COGSA to apply, a Hague Rules based regime. [ 102 ] With respect to non-negotiable documents, the Hague-Visby Rules apply by force of law to straight bills of lading, addressed in

Section V.C of these reasons, but not to waybills. The legal characterization of a transport document as either a waybill or a straight bill of lading is not always easy ( Canadian Maritime Law at 572; Carver at 17). Carver highlights the distinctions between the two being: the label on the document, whether the document contains clauses found in bills of lading that would be meaningless in the case of a waybill, and whether it is issued in triplicate rather than one original document (Carver at 17-18).

Canadian Maritime Law instructs that the distinction appears to depend on the intention of the maker as can be collected from the document, and may turn on the presence or absence of an attestation clause that asserts the requirement that the document be presented in exchange for delivery (at 572). [ 103 ] This Court has found that the distinction between a waybill and a straight bill of lading lies with the manner in which the document is entitled, that bills of lading are issued in triplicate while a single copy is issued for waybills, whether presentation is required for delivery of the cargo, and the intention of the parties ( Cami Automotive at paras 30-35 ).

The House of Lords has highlighted the differences between the terms, the number of documents issued, and stated that a waybill is never a document of title and no " “trader, insurer or banker would assimilate the two” " ( Rafaela S at para 46). [ 104 ] In the matter at hand, although the Shipping Document is entitled " “INTERNATIONAL

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