Court capped carrier's liability due to the absence of a higher value declared on the bill of lading
In a recent ruling, the Alberta Court of King’s Bench applied statutory liability limits, capping the carrier’s liability for a stolen shipment due to the absence of a higher declared value on the bill of lading.
The dispute in Calgary Core-Mark International Inc. v. Direct Integrated Transportation Ulc, 2024 ABKB 637 stemmed from the theft of Core-Mark International’s cargo—a shipment of cigarettes valued at $534,451.78. Core-Mark sought summary judgment to determine whether the carrier, Direct Integrated Transportation’s liability, should reflect the wholesale value of the goods, a lower statutory amount, or a $250,000 threshold based on alleged contractual insurance obligations.
The parties operated under two agreements: a transportation services agreement and a rate agreement. The transportation services agreement included insurance provisions requiring the carrier to maintain minimum cargo insurance coverage of $250,000 per vehicle. Core-Mark argued that this clause imposed a covenant to insure and sought to hold Direct Integrated liable for at least this amount.
However, the court found otherwise. The Court of King’s Bench concluded that clause 15.1(c) of the transportation services agreement did not obligate Direct Integrated to name Core-Mark as an additional insured or to provide coverage beyond the stipulated minimum. Instead, liability was governed by Alberta’s Bill of Lading and Conditions of Carriage Regulation.
Under the regulation, unless a higher value is declared on the bill of lading, liability for lost or damaged goods is capped at $2.00 per pound. This statutory limit applied to the stolen shipment, reducing the carrier’s liability to $38,894 based on the cargo’s weight.
The court relied on the Alberta Court of Appeal decision in Hoskin v. West, which held that carriers’ liability defaults to statutory limits unless the consignor declares a higher value. Core-Mark had not declared such a value, reinforcing the court’s determination that the regulatory cap applied.
The court noted that while the transportation services agreement contained strong insurance clauses, the statutory limits prevailed in this case. The agreements lacked clarity on which governed specific shipments and the absence of a higher declared value on the bill of lading rendered the statutory cap decisive. Ultimately, the court ruled in favour of Direct Integrated, limiting its liability to $38,894.
