11111

Conditions Fail on Misdelivery

Forwarderlaw commented on a recent case where air freight was improperly delivered on behalf of a forwarder to a commercial warehouse (Uniserve) and not to the intended receiving terminal at the airport. Shortly after its arrival at the warehouse and before it could be located and re-routed to the airport, thieves made off with the cargo. The parties requested a court ruling by a motions judge on a preliminary point of law concerning the application of the BIFA terms to the handling of the goods by the warehouse. The cargo owner naturally claimed that BIFA terms could not apply when the warehouse received the goods due to an error by the trucker who misdelivered the cargo. Go to http://www.forwarderlaw.com/library/view.php?article_id=485

The motions judge concluded that the BIFA terms could apply even though the goods had been left with the warehouse by mistake and not pursuant to a contractual arrangement. This conclusion was based upon a factual record before the motions judge that was incomplete. At trial further witnesses testified as to the circumstances of the delivery to the warehouse, and the handling of the cargo and documents after delivery. From this evidence the trial judge concluded that

“. . . it seems to me wholly inappropriate for it to be submitted that I should accept as fact what all the evidence, including that of [other warehouse employees], shows to be false.”

So despite the finding by the first judge, the trial judge was free to draw his own factual conclusions from the evidence before him. He rejected the claim of Uniserve that the BIFA conditions applied, stating:

“None of the different ways in which [Uniserve] claims the protection of BIFA terms can succeed. That is an unsurprising conclusion when one recalls that neither [the shipper] Matrix and Birkart nor [Uniserve] ever intended to contract with each other over this consignment. ”

BIFA terms are most appropriate where there is a contractual relationship between a customer, generally the owner or purchaser of goods or its agent, and a forwarder. The trial judge observed:

“There is a distinction to be drawn between contracts between a forwarder and its supplier (as distinct from its customer) where forwarders trade on a wide variety of terms depending upon the service requirement. Forwarders trade on RHA terms with hauliers, on what were then NAWK terms with warehouse men, on CMR for international road movement, on FIATA for air movement as well as on BIFA terms when relevant.”

Given the variety of industry terms that could possibly apply, the trial judge was unwilling to imply that the BIFA terms governed the relationship. A similar conclusion was reached by David Hall in his commentary at http://www.forwarderlaw.com/library/view.php?article_id=49.

Uniserve also claimed that BIFA terms are express terms as a result of a prior course of dealing. After examining the evidence, the judge rejected this claim, commenting that:

“The situation is a long way removed from the dealings over a long period on terms continuously made known by one party to the other which arose in Hardwick Game Farm -v- Suffolk Agricultural Poultry Produces Association [1968] 1 Lloyd’s Rep 547. See especially 571 and 2.”

This interesting judgment also reviewed the law of bailment and burden of proof, which will be the subject of a second Forwarderlaw article.

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