Case information

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Commercial law - Contracts - Bailment - Estoppel - Carriage of goods - Goods damaged during transport by a common carrier - Whether the Court of Appeal erred in formulating a unique test to be applied when a common carrier seeks to invoke the equitable defences of estoppel and waiver, rather than applying the test for estoppel required to be satisfied by any other civil defendant.

Canfor sought damages from three common carriers involved in the shipment of wood pulp from its mill in British Columbia to its customer in Scotland. The contract for the sale of the wood pulp indicated that it was essential that the pulp be delivered free from contamination. The pulp was found to be contaminated with wood splinters upon its arrival in Scotland and was rejected by the customer. It was determined at trial that the pulp became contaminated after it was loaded at Canfor's mill into the railway cars supplied by B.C. Rail. The contract between the Canfor and B.C. Rail provided that B.C. Rail would ensure that the cars were clean. The evidence disclosed that Canfor insisted upon wood lined box cars and also routinely inspected and swept out the rail cars before loading the bales of wood pulp. B.C. Rail argued that because of these two actions by Canfor, it was entitled to rely upon the defences of waiver and estoppel to the breach of contract claimed.
The trial judge held that the defences applied and dismissed Canfor's action against all three carriers. This judgment was overturned on appeal.