In this issue:
1. Firm and Industry News
2. Update on Motions For Summary Judgment
3. Port Authority Fees
4. Cargo Damage Not Covered by Auto Policy
5. Halsbury's Laws of Canada - Transportation
1. Firm and Industry News
- April 19 - 22, 2012, London
U.K.: McGill University / PEOPIL Conference on Aviation Law
- April 25 - 29, 2012, New Delhi, India: Workshop
& International Conference on Law & Regulation of Air
Transport & Law of Space Applications
- May 8 - 9, 2012, Toronto: Supply Chain &
Logistics Association of Canada Annual Conference
- May 23 & 24, 2012, Banff Springs: Semi-Annual Meeting Canadian Board of Marine Underwriters
Gordon Hearn will be moderating a Webinar on
April 4th being produced by the Transportation Lawyers Association.
The panel presentation deals with Insurance Issues Pertaining to
Trucking Casualty and Cargo claims.
Gordon Hearn will be presenting a paper on
the "Canadian Import and Export Regulatory Regime" at
the April 23rd annual meeting of the Transportation & Logistics
Council in Orlando, Florida.
Gordon Hearn will be presenting a paper on
"Legal Considerations in Managing Export Trade Risks"
at an industry conference on April 26th in Mississauga, Ontario.
Halsbury's Laws of Canada has just published
its Transportation - Carriage of Goods and its Transportation -
Railways titles in one text. Rui Fernandes is the author
for both of these works. See the summary of the works below in item
2. Motions for
Summary Judgment: What's Up? (A Review of Events and Developments
since the January 1, 2010 Amendments to Rule 20)
The Ontario Court of Appeal recently released its
decision in Combined Air Mechanical Services Inc. v. Flesch.
(*1) This decision revisits the purpose and availability of the
'summary judgment' mechanism in our court system. This case lists
the guiding principles to be applied by a court in deciding whether
to award summary judgment in favour of a party to a lawsuit. It
follows that the principles cited below must be considered in the
context of any litigation strategy: does the matter warrant proceeding
all the way to trial?
Litigation is expensive. It drains resources. It is
important for a party to a lawsuit to assess the viability of determining
a dispute earlier than later by way of a motion for summary judgment.
This is particularly the case when the discovery process is completed
and a factual 'record' has taken shape.
To put the new list of guiding principles in context,
it is helpful to first review what our system has for some time
now contemplated in terms of 'summary judgment'. It will then be
important to consider how the court rules governing this process
have evolved with a view to even more aggressively trying to 'weed
out' those cases that should be disposed of without a trial from
those that should proceed to the formal trial process. This article
finishes with a summary of the governing factors recently listed
by the Court of Appeal as to when summary judgment should be awarded.
Background - A Brief History of the Summary Judgment
Mechanism (rule 20).
Before January 1, 2010, the relevant mechanism [Rule
20] provided that:
20.01(1) A plaintiff may, after the defendant has
delivered a statement of defence or served a notice of motion,
move with supporting affidavit material or other evidence for
summary judgment on all or part of a claim in the statement of
(3) A defendant may, after delivering a statement
of defence, move with supporting affidavit material or other evidence
for summary judgment dismissing all or part of the claim in the
statement of claim.
20.04(1) In response to affidavit material or other
evidence supporting a motion for summary judgment, a responding
party may not rest on the mere allegations or denials of the party's
pleadings, but must set out, in affidavit material or other evidence,
specific facts showing that there is a genuine issue for trial.
(2) The court shall grant summary judgment if,
a) the court is satisfied that there is no genuine
issue for trial with respect to a claim or a defence; or
b) the parties agree to have all or part of the
claim determined by a summary judgment and the court is satisfied
that it is appropriate to grant summary judgment.
Under this former Rule 20, a motion for summary judgment
was heard entirely on the basis of the 'paper record', typically
consisting of affidavits sworn by witnesses, transcripts of cross-examinations
(if conducted) on the affidavits filed, and (if the parties chose
to refer to them) any transcripts taken from examinations for discovery
in the action. Based on these materials, the court was required
to determine if there was a 'genuine issue' for trial respecting
a claim or a defence. If there court determined that there was no
genuine issue for trial then summary judgment was to be awarded,
with the action either being allowed or dismissed without the need
for a formal trial with evidence from 'live' witnesses.
The meaning of a 'genuine issue for trial' had been
defined as follows:
It is safe to say that "genuine" means
not spurious and, more specifically, that the words "for
trial" assist in showing the meaning of that term. If the
evidence on a motion for summary judgment satisfies the court
that there is no issue of fact which requires a trial for its
resolution, the requirements of the rule have been met. It must
be clear that a trial is unnecessary. The burden is on the moving
party to satisfy the court that the requirements of the
rule have been met. Further, it is important to keep in mind that
the court's function is not to resolve an issue of fact but to
determine if a genuine issue of fact exists. (*2)
The purpose of summary judgment had been explained
A litigant's "day in court", in the sense
of a trial, may have traditionally been regarded as the essence
of procedural justice and its deprivation the mark of procedural
injustice. There can, however, be proceedings in which, because
they do not involve any genuine issue which requires a trial,
the holding of a trial is unnecessary and, accordingly, represents
a failure of procedural justice. In such proceedings the successful
party has been both unnecessarily delayed in the obtaining of
substantive justice and been obliged to incur added expense. Rule
20 exists as a mechanism for avoiding these failures of procedural
What, however, was to be done where there was a dispute
on a point of evidence or where something in controversy was presented
to the court on a point of fact? Could the judge hearing the application
for summary judgment actually assess the quality of the evidence
being heard - or would the matter have to wait for a formal trial
with all of its trimmings including witnesses evidence during 'examination
in chief' and being exposed to 'cross examination' for a 'trier
of fact' to come to a 'finding'?
Various court decisions followed, confirming that
judges were restricted in their analyses when considering applications
for summary judgment. To cite one passage from Mr. Justice Borins:
In ruling on a motion for summary judgment, the
court will never assess credibility, weigh the evidence, or find
the facts. Instead, the court's role is narrowly limited to assessing
the threshold issue of whether a genuine issue exists as to material
facts requiring a trial. Evaluating credibility, weighing evidence,
and drawing factual inferences are all functions reserved for
the trier of fact. (*4)
Mr. Justice Borins further articulated the restriction
placed on the availability of summary judgment as follows:
However, in my respectful view, in determining this
issue (of the necessity of a trial) it is necessary that motions
judges not lose sight of their narrow role, not assume the role
of a trial judge and, before granting summary judgment, be satisfied
that it is clear that a trial is unnecessary.
At the end of the day, it is clear that the courts
accord significant deference to the trial process as the final
arbiter of the dispute which has brought the parties to litigation.
If there is a genuine issue with respect to material facts then,
no matter how weak, or how strong, may appear the claim, or the
defence, which has been attacked by the moving party, the case
must be sent to trial. It is not for the motions judge to resolve
the issue. (*5)
The Changes to Rule 20 in 2010
In June 2006 the Ontario Government commissioned a
study and recommendations to make the civil justice system in Ontario
more accessible and affordable. The resulting report - the Osborne
Report (the "Report") - noted the strict limits mentioned
above that the case law placed on a judge's power to assess the
quality and cogency of the evidence when determining the 'genuine
issue for trial' question. The Report noted that that such restrictions
tended to undermine the utility of Rule 20 by deterring litigants
from bringing motions under this Rule to summarily resolve disputes.
In light of the Osborne Report, Rule 20 was amended
effective January 1, 2010. The important highlights of the new Rule
are as follows:
20.04(2) The court shall grant summary judgment
a) the court is satisfied that there is no genuine
issue requiring a trial with respect to a claim or a defence;
b) the parties agree to have all or part of the claim determined
by a summary judgment and the court is satisfied that it is appropriate
to grant summary judgment.
(2.1) In determining under clause (2)(a) whether
there is a genuine issue requiring a trial, the court shall consider
the evidence submitted by the parties and, if the determination
is being made by a judge, the judge may exercise any of the following
powers for the purpose, unless it is in the interest of justice
for such powers to be exercised only at a trial:
1. Weighing the evidence.
2. Evaluating the credibility of a deponent.
3. Drawing any reasonable inference from the evidence.
(2.2) A judge may, for the purposes of exercising
any of the powers set out in sub-rule (2.1), order that oral evidence
be presented by one or more parties, with or without time limits
on its presentation.
This certainly presents a sea change from the old
rule. While the intent is not to allow a judge to turn a motion
for summary judgment into a 'mini-trial' - it is now clear that
a mechanism exists for a judge to use such tools to take a hard
look into whether there is indeed a genuine issue for trial.
Developments Since the January 1, 2010: Amendments
to Rule 20
In the months following the amendments to Rule 20,
it has become a matter of some controversy and uncertainty as to
whether it is appropriate for a motion judge to use the new powers
conferred by the amended Rule 20 to decide an action on the basis
of the evidence presented on a motion for summary judgment. Judges
of the Ontario Superior Court of Justice have expressed differing
views on this and other interpretive issues raised by the amendments.
As a result, both the bench and the bar turned to the Court of Appeal
for clarification on what the amended rule does and does not accomplish.
To provide some guidance to the profession, the Court of Appeal
convened a five-judge panel to hear five appeals from decisions
under the amended rule. (*6)
The Combined Air case before the Ontario Court
The Combined Air decision involved the Court
of Appeal assessing the outcome of motions for summary judgment
in five different lawsuits, all brought in first instance before
judges of the Ontario Superior Court. This brought into stark relief
the issues concerning the interpretation of the new Rule 20, including
the nature of the test for determining whether or not summary judgment
should be granted, the scope and purpose of the new powers that
have been given to judges hearing motions for summary judgment,
and the types of cases that are amenable to summary judgment. In
its ruling, the Court of Appeal pronounced 'go-forward' general
principles to be followed in the application of the amended Rule
20. In fact, the Court of Appeal has characterized the statement
of governing principles pronounced by it in Combined Air as "a
new departure and a fresh approach to the interpretation and application
of the amended Rule 20".
The New Guiding Principles
As articulated by the Court of Appeal:
1. The motion judge may now weigh the evidence,
evaluate the credibility of a deponent, and draw any reasonable
inference from the evidence in determining whether there is a
genuine issue requiring a trial with respect to a claim or a defence
2. The new rule also enables the motion judge to
direct the introduction of oral evidence to further assist the
judge in exercising these powers: Rule 20.04(2.2).
3. The purpose of the new rule is to eliminate unnecessary
trials, but not all trials. The guiding consideration is whether
the summary judgment process, in the circumstances of a given
case, will provide an appropriate means for effecting a fair and
just resolution of the dispute before the court.
4. Generally speaking, there are three types of
cases that are amenable to summary judgment. The first is where
the parties agree to submit their dispute to resolution by way
of summary judgment. The second type of case encompasses those
claims or defences that are shown to be without merit. The third
type of case concerns situations where a case can be disposed
of on its merits where the trial process is not required in the
"interest of justice".
5. In deciding whether the new powers under 20.04(2.1)
should be employed to weed out a claim as having no chance of
success or be used to resolve all or part of an action, the motion
judge must ask the following critical question: can the full
appreciation of the evidence and the issues that is required to
make dispositive findings be achieved by way of summary judgment,
or can this full appreciation only by achieved by way of a trial? In cases that call for multiple findings of fact on the basis
of emanating from a number of witnesses and found in voluminous
record, a summary judgment motion cannot serve as an adequate
substitute for the trial process. Generally speaking, in these
cases, the motion judge simply cannot achieve the full appreciation
of the evidence and issues that is required to make dispositive
findings. Accordingly, the full appreciation test is not met and
the "interest of justice" requires a trial. (*7)
6. In contrast, in document-driven cases with limited
testimonial evidence, a motion judge would be able to achieve
the full appreciation of the evidence and the issues that is required
to make dispositive findings. Similarly, the full appreciation
test may be met in cases with limited contentious factual issues.
The full appreciation test may also be met in cases where the
record can be supplemented to the requisite degree at the motion
judge's direction by hearing oral evidence on discrete issues.
7. The real point being driven home by the Court
of Appeal is as follows: A motion judge is required to assess
whether the attributes of the trial process are necessary to enable
him or her to fully appreciate the evidence and the issues posed
by the case. In making this determination, the motion judge is
to consider, for example, whether he or she can accurately weigh
and draw inferences from the evidence without the benefit of the
trial narrative, without the ability to hear the witnesses speak
in their own words, and without the assistance of counsel as the
judge examines the record in chambers.
8. While revisiting matters and adopting the "full
appreciation test', the Court of Appeal has reconfirmed the historical
evidentiary obligation as still existing on each party to a motion
for summary judgment: each side must put their 'best foot forward'
with respect to the existence or non-existence of material issues
to be tried". On a motion for summary judgment, a party is
not "entitled to sit back and rely on the possibility
that more favourable facts may develop at trial".
9. The Court of Appeal has noted that it will not
be in the 'interest of justice' to exercise any of the Rule 20.04(2.1)
powers in cases where the nature and complexity of the issues
demand that the normal process of production of documents and
oral discovery be completed before a party is required to respond
to a summary judgment motion. In such a case, forcing a responding
party to build a record through affidavits and cross-examinations
will only anticipate and replicate what should happen in a more
orderly and efficient way through the usual discovery process.
*1 Combined Air Mechanical
Services Inc. v. Flesch (2011) O.J. No. 5431 (Ont. C.A.)
*2 Irving Ungerman Ltd. v. Galanis (1991) 4 O.R. (3d) 545
(C.A.) at p. 551
*3 Ibid, at p. 550-551
*4 Aguonie v. Galion Solid Waste Material Inc. (1998) 38
O.R. (3d) 161 at p. 163
*5 Dawson v. Rexcraft Storage and Warehouse Inc. (1998) 164
D.L.R. (4th) 257 (Ont. C.A.) at paras. 20 and 28
*6 Hence, the decision in the Combined Air case, supra. This
discussion and the purpose for the ruling is addressed at paragraphs
5 and following in the Court's decision.
*7 Ibid, at paras. 50 - 51
*8 ibid, at para. 52
3. Federal Court Confirms Ability of Port Authorities
to Charge Fees to Ship-Owners Based on Volume of Containerized Cargo
Imported / Exported
The recent decision Shipping Federation of Canada
v. Vancouver Fraser Port Authority, 2012 FC 301 (CanLII) involved
the judicial review by the Federal Court of Canada of a fee schedule
whereunder the Vancouver Fraser Port Authority imposed a fee on
ship-owners in respect of the volume of containerized cargo imported
or exported through the port.
Based on an analysis of the source of the port's legal
authority to impose such fees (the Canada Marine Act, S.C.
1998 C.10), the Court concluded that the fees were legal in the
circumstances and dismissed the application.
The Vancouver Fraser Port Authority ("VFPA"),
doing business as Port Metro Vancouver, is a non-shareholder, financially
self-sufficient corporation, established by the Government of Canada
in January 2008, pursuant to the Canada Marine Act and is
accountable to the federal Minister of Transport. It is Canada's
largest and busiest port and, of note, it is the fourth largest
port (by tonnage) in North America. (*1)
The VFPA is part of the Asia-Pacific Gateway and Corridor
(the "Gateway Project"), a network of transportation infrastructure
that includes the ports of the Lower Mainland and the principal
road and rail connections across Western Canada. The Gateway Project
was launched in October 2006 and, as a result, the Federal Government
commissioned a series of infrastructure projects to be undertaken
in the Lower Mainland area to improve the reliability of the Gateway
Project for Canadian exports and to increase the region's share
of container imports from Asia. (*2)
With regard to said improvements, seventeen projects
in three major areas that are under the control of the VFPA were
improved under the Gateway Project and, as a result, the VFPA committed
substantial sums to be repaid through the implementation of a new
fee known as the Gateway Infrastructure Fee ("GIF"). VFPA's
authority to fix fees is pursuant to s. 49 of the Canada Marine
49. (1) A port authority may fix fees to
be paid in respect of
(a) ships, vehicles, aircraft and persons coming
into or using the port;
(b) goods loaded on ships, unloaded from ships
or trans-shipped by water within the limits of the port or moved
across the port; and
(c) any service provided by the port authority,
or any right or privilege conferred by it, in respect of the
(3) The fees fixed by a port authority shall
be at a level that permits it to operate on a self-sustaining
financial basis and shall be fair and reasonable [emphasis
Under VFPA's fee scheme, the GIF is payable in respect
of containerized cargo by the owner of the vessel on volumes imported or exported over the wharf and in respect of non-containerized cargo, by the owner of the cargo based on tonnage loaded or unloaded over the wharf. (*3) The fee
scheme was set out in a letter of March 10, 2011 and is what the
Applicants style as the "decision" for the purposes of
their application for judicial review.
The Application for Judicial Review
Judicial review is the process whereby an applicant
asks the Court to review an administrative decision made by a person
or entity pursuant to legislative authority.
The applicants, twelve international shipping lines
calling at VFPA's port and their trade association, the Shipping
Federation of Canada, objected to the VFPA's decision to assess
the GIF in respect of containerized shipments against the owner
(which includes the charterer) of the respective vessels. (*4) Note
that, for the purposes of the application, the applicants did not
contest the GIF as it applied to non-containerized cargo.
The Applicants contended that "the ship owners
did not receive any benefit from the Gateway Projects nor do they
receive any service or services in respect of the GIF." (*5)
On this basis, the Applicants argued that the GIF was not "fair
and reasonable" as required by s. 49(3) of the Canada Marine
Act, and that it was a "tax" rather than a user fee
or regulatory fee. (*6) Based on the limited grant of authority
to impose fees established by s. 49 of the Canada Marine Act, the
imposition of a "tax" would be beyond the ambit of VFPA's
jurisdiction and therefore without legal enforceability.
In practical terms, the Court summed up the applicants'
complaint as follows: (*7)
[T]he charging mechanism on containers imposes an
undue administrative burden and costs which cannot easily be passed
on to the container owners or to the owners of the goods who presumably
receive some benefit from improved Gateway infrastructure in terms
of the efficiency of port container handling and ultimate delivery
In essence, the applicants complaint was of a business
nature in that the fees were causing the ship-owner or charterer
to expend funds in connection with the GIF that were not easily
recoverable from customers.
As the Applicants framed their issues as being "jurisdictional",
i.e. the assertion that VFPA acted without jurisdiction, the standard
of review was that of "correctness," most recently confirmed
by the Supreme Court of Canada in Dunsmuir v. New Brunswick,
2008 SCC 8 (CanLII) as: (*8)
When applying the correctness standard, a reviewing
court will not show deference to the decision maker's reasoning
process; it will rather undertake its own analysis of the question.
The analysis will bring the court to decide whether it agrees
with the determination of the decision maker; if not, the court
will substitute its own view and provide the correct answer. From
the outset, the court must ask whether the tribunal's decision
In short, was the "decision" (in this case
being VFPA's fee scheme) correct in light of the VFPA's legislative
Issue 1: Is the GIF "Fair and Reasonable"?
The first issue considered by the Court was whether
the GIF was "fair and reasonable" as mandated by s. 49(3)
of the Canada Marine Act.
Considering the substance of the GIF, the Court looked
to the definition of "Fees" contained in the Act:
"fees" includes harbour dues, berthage
and wharfage, as well as duties, tolls, rates and other charges,
but does not include payments made under a lease or licence agreement
Without much ado, Court found that the GIF would fall
within the category of "other charges." The applicants,
however, relying on administrative decisions made in the context
of the Pilotage Act, R.S.C. 1985, c. P-14, argued that, in
order for the fees to be "fair and reasonable," that "there
must be a direct link between the fee charged and either a service
provided or a benefit received." (*9)
The Court found that the applicants' reliance on decisions
decided under the Pilotage Act to be "misplaced"
as the Canada Marine Act is differently constituted and,
with that, the Court embarked on a discussion of the relevant provisions
therein. Specifically, the Court looked at the language in s. 49,
which expressly permits a port to fix fees in respect of:
(a) ships, vehicles, aircraft and persons coming into or using the port;
(b) goods loaded on ships, unloaded from ships
or trans-shipped by water within the limits of the port or moved
across the port; and
(c) any service provided by the port authority, or any right or privilege conferred by it, in respect of
the port [emphasis added].
Without going beyond the face of the statute, the
Court concluded that the GIF was valid against container ship owners
and ruled that: (*10)
The decision to levy the fee against the ship owner
is reasonable as the ship is the primary contact with the port.
The ease of collecting the fee from the ship owner versus assessing
the fee against each owner of each piece of cargo in the container
or against each container owner is obvious. In any event, such
a decision is within the operation of the VFPA home statute and
Further, the Court dismissed the applicant's argument
that the VFPA needed to link the GIF to a benefit in order to justify
the ship-owners having to pay and, as an extra jab, the Court remarked
that even if a direct link were required, such a link was present
in the circumstances as ship-owners benefit from a more efficient
port where cargo can be released more quickly and, as a result,
ships are freed to provide more voyages. (*11)
Issue 2: "Tax" versus "Fee"
Going on to consider whether the GIF was a tax or
a fee, the Court considered the applicants' argument that the GIF
was a "disguised tax" on the basis that it was: (*12)
imposed for a broader, more public, purpose to encourage
the growth of the Asia-Pacific Gateway and Corridor through better
use of capacity. Insofar as the VFPA is concerned, it was investing
in infrastructure "beyond traditional port activities and
In consideration of this argument, the Court turned
to one of its previous decisions, Algoma Central Corp v. Canada,
2009 FC 1287 (CanLII), wherein the Court discussed the distinction
between a harbour fee and a tax. Therein, Justice O'Keefe determined:
- the regulation of public ports under the Canada
Marine Act constitutes a national system which is clearly
a regulatory scheme.
- the users of those public ports and the surrounding
waters benefit from the regulation of public ports.
- to be a regulatory fee, a harbour fee need not
be specifically traceable to specific regulatory costs - it is
sufficient if the revenues obtained were less than the money expended
on the regulatory system.
Applying the above principles to the facts, the Court
found that (a) "the regulation and operation of port authorities
constitutes part of a national scheme for the self-sufficient, independent
but interrelated operations of ports in Canada;" (b) "users
of the port authority's ports and surrounding waters benefit from
the regulation of these ports;" and (c) the VFPA, through the
GIF, will only recover 90% of the amount expended on the projects,
which is less than the money expanded on the system. On these bases,
the Court found that the GIF was not a tax. (*14)
In these times of austerity and highly-competitive
shipping markets, ship-owners will have to determine how to efficiently
transfer these fees to their customers as this decision suggests
that these types of fees appear to be here to stay.
*1 Port Metro Vancouver website: http://www.portmetrovancouver.com/en/about/portoverview.aspx.
*2 Shipping Federation of Canada v. Vancouver Fraser Port Authority,
2012 FC 301 (CanLII) ("Shipping Federation") at
*3 Ibid, at para. 8.
*4 Ibid, at para. 9.
*5 Ibid, at para. 10.
*7 Ibid, at para. 12.
*8 Dunsmuir v. New Brunswick, 2008 SCC 8 (CanLII) at para.
*9 Shipping Federation, at para. 23.
*10 Ibid, at para. 35.
*11 Ibid, at paras. 31-32.
*12 Ibid, at para. 38.
*13 Ibid, at para. 40.
*14 Ibid, at paras. 42-44.
4. Cargo Damage Not Covered by Auto Policy
The recent decision of Siena-Foods Limited v. Old
Republic Insurance Company of Canada, 2011 ONSC 7250 (CanLII)
confirms that an automobile policy in Ontario does not provide certain
coverage for cargo damage.
The plaintiff rented a refrigerated transport truck
(the "truck") and 26-foot cab/trailer from Ryder Canada.
At that time, the plaintiff purchased automobile insurance through
the rental agreement from the defendant Old Republic Insurance Company
of Canada. The insurance coverage was set out in the terms and conditions
of the rental agreement between the plaintiff and Ryder Canada.
The plaintiff's employee was using the truck to transport
a Dixie DV 2000, a food packaging machine used in the plaintiff's
business to vacuum seal its product as part of its food packaging
process. The employee was driving the truck southbound on Brock
Road in Durham, Ontario. A Pontiac motor vehicle, that had been
proceeding northbound on Brock Road, crossed the centre lane and
entered the southbound lane, colliding head on with the truck. The
plaintiff alleges that the collision caused serious damage to the
plaintiff's equipment contained in the truck.
The plaintiff alleged that, pursuant to Subsection
263 of the Insurance Act, it was entitled to coverage for the damaged
equipment from its automobile insurer, Old Republic Insurance Company
Subsection 263(1) of the Insurance Act provides
that section 263 applies if an automobile or its contents or both
suffer damage arising directly or indirectly from the use or operation
in Ontario of one or more other automobiles and the damaged automobile
and one other automobile involved in the accident are insured under
a contract evidenced by a motor vehicle policy by an insurer licensed
If the conditions in subsection 263(1) of the Insurance
Act are met, subsection 263(2) provides that an insured is entitled
to recover for the damages to its automobile and its contents from
the insured's insurer under the coverage described in subsection
239(1), as though the insured were a third party.
The relevant provisions of subsection 247(b) of the Insurance Act state that the insurer may provide under a
contract evidenced by a motor vehicle liability policy that it shall
not be liable for loss of or damage to property carried in or upon
the automobile or to any property owned or rented by or in the care,
custody or control of the insured.
The court found that section 5.A of the rental agreement
between the plaintiff and Ryder Canada precluded insurance coverage
for loss and/or damage to the property owned by the plaintiff, which
was carried in the Ryder rental truck, and under the care, custody
or control of the plaintiff: "there is liability protection
against bodily injury or property damage claimed by others; and
if elected, the liability protection plan (which the plaintiff obtained)
and supplemental liability protection plan (which was not elected
by the plaintiff) do not apply if the rented vehicle was obtained,
used or operated in violation of any provision of the rental agreement
and/or to loss or damage to property owned by the plaintiff, in
the vehicle, or for any reason, in the plaintiff's care, custody
or control." (paragraph 15)
The court concluded that Old Republic expressly excluded
coverage for damage to property belonging to or in the possession
of the plaintiff in the rented truck, in accordance with the provisions
of subsection 247(b) of the Insurance Act. As a result, subsection
263(2) of the Insurance Act has no application to this case
with respect to the property damage claimed by the plaintiff and
cannot be interpreted in the circumstances of the present case to
provide coverage to the plaintiff where no coverage existed under
the Old Republic policy.
The court also found that the terms and conditions
contained in the rental agreement between the plaintiff and Ryder
Canada precluded the plaintiff from any entitlement because the
plaintiff materially misrepresented (whether innocently or otherwise)
the cargo contents of the rented truck in violation of the rental
"There is no question that Ryder Canada was led
to believe by the plaintiff that the plaintiff was transporting
produce in the rented truck: on the face of the rental agreement,
the plaintiff identified that the "cargo contents" were
produce; and consistent with the transportation of produce, the
truck was a refrigerated truck and a refrigerated truck rate was
charged. There is no dispute that the information provided regarding
the goods to be transported was incorrect in that the plaintiff
was carrying in the rented truck its Dixie DV 2000 and not produce
as represented. At no time did the plaintiff advise Ryder Canada
that it was transporting a large piece of equipment." (paragraph
As a result, the court concluded that the Old Republic
insurance policy did not provide coverage for the plaintiff's alleged
property damage and that, in any event, the plaintiff was precluded
by the terms of the rental agreement and the insurance policy, and
its material misrepresentation of the cargo contents, from recovering
any damages from Old Republic for loss of the plaintiff's equipment.
Laws of Canada - Transportation Law
Transportation - Carriage of Goods
Rui M. Fernandes, B.Sc., J.D., LL.M.
With carriage of goods law often at the forefront of commercial
transactions, Halsbury's Transportation - Carriage of Goods title offers the ideal resource for lawyers who require a concise
explanation of how this specialized area of law operates. Timely
and accessible, and written by one of Canada's leading transportation
lawyers, this valuable reference delivers a clear narrative of the
legislative framework and identifies the relevant case law that
practitioners need to be aware of. It contains useful answers to
questions on a wide range of topics, including:
- Federal and provincial powers and areas of responsibility
- Carriage of goods by road
- Federal legislation regulating extra-provincial
- Provincial licensing of carriers
- Powers and procedures of transport authorities
- Equipment and personnel
- Duties and responsibilities of carriers
- Passenger and luggage liability issues
- Hazardous goods
- Carriage of goods by rail
- Contractual arrangements
- Loss, damage or delay
- Accommodation for goods
- Connecting carriers
- Carriage of goods by water
- Formation and interpretation of Charter parties
- Loading and discharge of goods
- Frustration of contracts
- Hague-Visby rules regarding bills of lading
- Responsibilities, liabilities, rights and immunities
Arbitration clauses, letters of indemnity
Transportation - Railways
Rui M. Fernandes, B.Sc., J.D., LL.M.
Once at the very heart of commercial activity and the Canadian Dream,
railways still play an important part in the transport of passengers
and goods, and rail lines are omnipresent in virtually every populated
region in Canada. Transportation - Railways provides a comprehensive
and national treatment of the law governing the construction, operation,
safety and oversight of federal and provincial railways, including
matters such as:
- The legislative framework
- Role and powers of the Canadian Transportation
- Orders, enforcement and appeals
- Mediation and arbitration
- Violations and offences under the legislation
- Regulation of railway construction
- Expropriation of land
- Location, re-location and approval procedures
- Construction and maintenance costs
- Safety standards and regulation
- Duty of care, rights of way and railway crossings
- Environmental protection
- Passenger car safety requirements
- Powers, responsibilities and management of railway
- Traffic operations and rules
- Carriage of passengers
- Service requirements, persons with disabilities
and personnel training
- Baggage issues
- Tariffs, rates and freight
This newsletter is published to keep our clients and friends informed
of new and important legal developments. It is intended for information
purposes only and does not constitute legal advice. You should not
act or fail to act on anything based on any of the material contained
herein without first consulting with a lawyer. The reading, sending
or receiving of information from or via the newsletter does not
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The Content may not be otherwise used, reproduced, broadcast, published,or
retransmitted without the prior written permission of Fernandes