The respondent carrier transported electronic calculators by sea to Montreal, where they were stored by the appellant stevedore/terminal operator.
Thieves stole a portion of the cargo from the terminal operator's shed due to inadequate security.
The consignee sued both the carrier and the terminal operator in the Federal Court.
The Supreme Court of Canada held that the Federal Court had jurisdiction because the short-term storage of cargo within the port area is integrally connected to the contract of carriage by sea, falling within Canadian maritime law.
The Court further held that the 'Himalaya clause' in the bill of lading effectively extended the carrier's limitation of liability to the terminal operator, and that the exemption clauses were broad enough to cover the terminal operator's negligence.
Consequently, the actions against both the carrier and the terminal operator were dismissed.
