Green Computer AB v. Federal Express Corp. et al.

This was a claim for the loss of one carton of integrated circuits valued at $50,000 carried by air from Sweden to Markham, Ontario. The Defendant air carrier argued that it was not liable as the Plaintiff had not given the notice required by Article 26 of the Warsaw Convention. Alternatively, the Defendant argued it was entitled to limit liability pursuant to the terms of the convention to $851. With respect to the notice issue, Article 26(2) provides that notice must be given within 7 days of receipt in the case of damage to cargo and within 21 days in the case of delay. At first instance, the Prothonotary held that these notice requirements were not applicable to a case of non-delivery or loss of cargo. With respect to the limitation issue, the Plaintiff argued that the Defendant was not entitled to limit its liability as the Defendant had been guilty of wilful misconduct pursuant to Article 25. Specifically, the Plaintiff argued that an inference should be made that the lost cargo had been stolen. The Prothonotary was not prepared to draw any such inference and found that the Defendant had merely lost the shipment in transit, something which did not constitute wilful misconduct. Finally, the Plaintiff argued that the Defendant was not entitled to limit liability as it had not proved the cargo was lost during the carriage by air as opposed to carriage by land. The Prothonotary noted the absence of proof as to where the damage occurred and applied the presumption contained in Article 18(3) of the Warsaw Convention which provides that “any damage is presumed, subject to proof to the contrary, to have been the result of an event which took place during the carriage by air”. Accordingly, the Prothonotary granted judgment in the limitation amount of $851. The Plaintiff unsuccessfully appealed the ruling in relation to the application of Article 18(3) of the Warsaw Convention first to a Judge of the Federal Court and then to the Federal Court of Appeal. At both levels of appeal the respective courts held that the presumption had been properly applied.