Morlines Maritime Agency Ltd. v. IKO Industries Ltd.
T-2522-96
Lutfy J.
7/12/99
12 pp.
Action for recovery of freight costs-Defendant (IKO) paying freight forwarder which went bankrupt before paying carrier-Plaintiff (Morlines) acting as agent for shipping line, BOL-Marine Marketing Ltd. (Marine) freight forwarder arranging for shipment of cargo-IKO manufacturer of roofing parts-In 1996 IKO contacting Marine, requesting flat rate for shipment from terminal in Montréal to door of IKO's plant in Belgium-All-inclusive rate including freight, handling charges, freight forwarder's commission-Marine contacting Morlines to arrange for shipment of IKO's cargo-Agreeing invoices for freight costs would be sent directly to Marine, Marine would provide Morlines with post-dated cheques on receipt of bills of lading-No direct communication between shipper IKO, carrier BOL, agent Morlines, but bills of lading evidence of relationship between shipper, carrier-IKO delivered cargo directly to Montréal terminal using containers, sheds provided by Morlines, knew Morlines actually carrying some of its cargo, knew Marine setting up shipments on behalf of IKO-IKO never knew of amount of Morlines' freight charge because invoice from Marine only showed allinclusive flat rate-IKO never in receipt of bills of lading issued by Morlines-For each shipment carried by Morlines, Marine invoicing IKO, IKO paying in full-Problems with payments from Marine to Morlines beginning in June, early July 1996-Morlines always contacted Marine, never IKO to deal with problems-In September 1996 Morlines withholding delivery of some containers, but IKO led to believe not due to financial problems-In October 1996 Morlines sending letter of demand to IKO for payment of outstanding shipping charges first direct communication between IKO, Morlines-Action dismissed-Shipper not held liable to pay carrier if can set up one of defences in C.P. Ships v. Les Industries Lyon Corduroys Ltée, [1983] 1 F.C. 736 (T.D.)-Both third, fourth branches of C.P. Ships test met by defendant shipper IKO-Morlines' conduct inducing IKO to believe Marine actually authorized to receive payments-IKO making 10 payments to Marine between May, September 1996-Four months passing without any communication from Morlines that expected IKO to pay them directly, even when Marine's cheques not being accepted for payment-No communication from Morlines until sent default letter-IKO aware shipments being delivered for entire period-No reason to doubt should continue to pay Marine-Reasonable for IKO to have believed Marine actually authorized to receive payment for shipments being carried by Morlines-Both carrier, shipper expecting payment to be made to third party Marine-Morlines' conduct throughout entire transaction such that IKO would be induced to believe Marine authorized to receive payment.