The case of Voest-Alpine Canada Corp. v. Pan Ocean Shipping Co. (The Sammi Crystal) introduced the Last Carrier Presumption to Canada. The Plaintiffs brought an action for damages arising from the shipping of 1288 pieces of pipe purchased from Korea. When the pipe arrived in Calgary, Alberta, 1130 of the pieces of pipe were damaged and unusable.
In shipping cases, a carrier is prima facie liable for all loss or damage to cargo that the carrier received in good order and out-turned short or in bad order. This presumption is rebuttable and the carrier has the burden of proof of proving the cause of the damage.
In Cargill Grain Co. v. N.M. Paterson & Sons , for example, Wells D.J.A. held:
… the fact that the goods were damaged raises a prima facie case of negligence, which can only be met by showing what actually occurred.
In The Sammi Crystal, the pipe was carried aboard the vessel the Sammi Crystal to New Westminster. It was then handled and stored by three different companies in New Westminster and carried by another company, by truck, to Calgary. The Plaintiffs brought their claim against all five carriers.
One month after the pipe was delivered in Calgary, it was inspected and it was determined that 1130 pieces were damaged. The issue was that the successive chain of carriers made it impossible for the Plaintiffs to prove who caused the damage to the pipe. The Court held:
In my view, the governing principle should be that where there is a successive chain of bailees and the owner of the goods has proven delivery of the goods to the first bailee in good order and the receipt of those goods in bad order at the end of the chain of successive carriers, there is a presumption that the loss occurred during the time the last custodian had control of the goods.
The Court relied on decisions from the United States and England in coming to its conclusion respecting the Last Carrier Presumption, as well as international conventions on the carriage of goods by road and air. The Court particularly relied on cases from the United States, including Julius Klugman’s Sons v. Oceanic Steam Navigation Co. , where the Court said:
It may also be said in support of the rule that the final custodian who has received the goods in apparent good order without noting any defect, should not complain if an unexplained loss is attributed to him rather than to prior custodians; in many cases a careful inspection by him at the time the goods were turned over to him would have revealed the defect, if any then existed, and would have saved him from liability.
The Court in The Sammi Crystal stated that uniformity in the law with respect to claims for loss or damage in international carriage of goods should prevail, wherever possible, as a matter of policy and common sense.
The Last Carrier Presumption is rebuttable, as the Court said:
…where there is a successive chain of carriers and the goods were initially delivered for shipment in good order and condition but have arrived in a damaged condition, the last bailee in the chain has the burden of proof to show that it did not damage the goods and that it received the goods in a damaged condition, or that the damage, although while in its custody, occurred without negligence on its part.
The Last Carrier Presumption requires all parties to keep careful records of the condition of the goods carried at the various stages of their voyage. As the Court stated in The Sammi Crystal, the key to this kind of case is documentation. The Plaintiff need only prove that the cargo was delivered to the first carrier in good condition and that it was received in damaged condition. It is then for the last carrier to shift responsibility for the damage to the other carriers, if they are responsible. Each carrier must carefully document all damage as it receives the goods. Failure to do so will, prima facie, impose on it liability for damage that is noted by a subsequent carrier. The Defendant carrier may be unable to discharge its burden of proof if its documentation is inconclusive, contradictory or confused.
Ultimately, in The Sammi Crystal, the Court did not rely on that Last Carrier Presumption as the Plaintiffs had not proved that the pipe examined and found damaged was the pipe that was the subject matter of the litigation. On appeal , the Court of Appeal did not consider the correctness of the Last Carrier Presumption as the parties did not raise any issue with it.
The Last Carrier Presumption has since been applied and discussed in various Canadian cases. In Myers v. Kingsway Transport Ltd. , the Court considered a case of an antique settee and chairs shipped from England to Winnipeg. The antiques were carried by various companies, with the Defendant trucking company being the last carrier. The Court relied on The Sammi Crystal to find the Defendant liable based on the Last Carrier Presumption. As the Defendant did not give any evidence, it could not rebut the presumption.
In Imperial Granite Supply Ltd. v. Sea Pearl, The , the Plaintiff sued for damage to granite slabs shipped aboard the Sea Pearl and unloaded by Fraser Surrey Docks Limited. The evidence respecting when the damage occurred, aboard the vessel or in the unloading, was inconclusive. The Plaintiff sought to rely on the Last Carrier Presumption. The Court commented that The Sammi Crystal was an example of the very onerous nature of the presumption. However, the Court continued that the presumption has been employed in the resolution of claims for damage to cargo delivered to Canadian West Coast ports and had encouraged the proper documentation of carriage damage. The correction of the Last Carrier Presumption was not challenged in this case and was applied to the benefit of the Plaintiff. Fraser Surrey had been given a clean report indicating that the contained of granite was received in good order and condition. The presumption operated to found liability with Fraser Surrey, the last carrier.
In Canadian Forest Products Ltd. v. B.C. Rail Ltd. , the Plaintiff pulp manufacturer had a contract to supply a Scottish company with pulp to be used for paper making. The pulp was shipped to Scotland using three carriers. When the pulp arrived in Scotland, it was discovered that it was contaminated by splinters. The Plaintiff attempted to rely on the Last Carrier Presumption. The Court held that the last carrier (the ocean carrier) and the second-to-last carrier (a marine terminal where the goods were stored prior to loading) successfully rebutted the presumption of liability. The Court found that the first carrier (the rail carrier) had not rebutted the presumption. The Court will consider all the evidence of the handling of the cargo at each stage of the voyage in determining whether or not each carrier has rebutted the presumption.
See also Go Island Hopper Helicopters Ltd. v. Rotech Industries Inc. and Mitsui & Co. Ltd. v. Y.O.W. Shipping Co. for additional application and discussion of the Last Carrier Presumption.
