Day & Ross Inc. v. Beaulieu

This appeal from a judgment of the New Brunswick Court of Queen’s Bench addresses many of the arguments usually advanced to defeat a carrier’s right to limit liability pursuant to the Uniform Conditions of Carriage in force in most provinces. The case concerned the loss of a package valued at $1,350. The carrier accepted liability but relied on its limitation clause. At Small Claims Court it was held that the limitation clause did not apply to cases of gross negligence and that the failure of the carrier to sign the bill of lading rendered it unenforceable. At the Court of Queen’s Bench it was held, first, that the failure to deliver the goods was a fundamental breach and, second, that there was no privity of contract between the carrier and consignee. The Court of Appeal held that in a contract for the carriage of goods the shipper enters into the contract for and on behalf of the consignee and therefore there is no lack of privity between the consignee and carrier. On the issue of fundamental breach the Court of Appeal held that fundamental breach is a matter of construction of a contract and that there was no ambiguity in the limitation provision that would prevent the carrier from relying on it. The Court of Appeal then considered whether such limitation clauses are “unfair, unconscionable or unreasonable” and concluded that they were not, in part, because they are mandated by the statutory framework. The Court of Appeal then considered the concept of gross negligence as a means of avoiding limitation clauses and concluded that this approach has been categorically rejected. Finally, the Court of Appeal considered the failure of the driver to sign the bill of lading and suggested that such an omission was so trivial it should not invalidate the contract. In result, therefore, the carrier was entitled to limit its liability.