CALGARY CORE-MARK INC v DIRECT INTEGRATED TRANSPORTATION ULC

The consignor (“Core-Mark”) appealed a Summary Judgment Decision that capped recovery against its carrier (“Direct Integrated”) at the Bill of Lading Regulation’s $2/lb limit after a shipment was stolen. The carriage relationship was governed by two written contracts, the Transportation Agreement (“TA”) and a separate Rate Agreement (“RA”), each containing insurance provisions. The dispute raised whether the statutory cap barred a parallel contractual claim for breach of a covenant to insure under those agreements.

The Court affirmed that the matter was properly decided by Summary Judgment under Rule 7.3(1). Applying Hryniak v Mauldin, 2014 SCC 7 and Weir-Jones Technical Services Incorporated v Purolator Courier Ltd, 2019 ABCA 49, Justice Labrenz held the record allowed the necessary fact-finding and application of the law in a proportionate way. There were no material factual disputes, both sides put their best case forward, and a fair, just determination could be made without Trial.

On the statutory framework, Labrenz J. clarified that the Bill of Lading Regulation imports conditions of carriage into every shipment, including the $2/lb limit where no higher value is declared on the face of the bill of lading. That limit governs “loss or damage to goods”. It does not cap a separate contractual cause of Action. Thus, while the Regulation limited recovery for the cargo loss to $38,894 (no declared value), it did not bar a claim for breach of a contractual covenant to insure.

Turning to the contracts, the Court interpreted the TA as containing a covenant to procure cargo insurance and to name the consignor as an additional insured. Even if the RA governed, its incorporated terms also required a minimum of $250,000 in cargo insurance for the consignor’s benefit. The carrier breached that obligation. Because no value was declared or otherwise communicated, expectation damages for the covenant-to-insure breach were limited to the contractual minimum of $250,000 (less the $10,000 deductible evidenced on the policy), with any higher figure being too remote on these facts.

Accordingly, the Court varied the result of the Summary Judgment to reflect both regimes: statutory damages of $38,894 under the Regulation for loss of the goods, plus $250,000 for breach of the covenant to insure, less a $10,000 deductible, for a total of $278,894, with pre-judgment interest.