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Manitoba Moose

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Jul 27, 2009
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Otterburne, MB
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Does anyone know the laws about collecting from a shipper / reciever if the broker doesn't pay?
I've read something about this before but for the life of me can't find the thread I need.
I had something to do with if the broker doesn't pay, the shipper or reciever is liable for the fees.
Thanks in advance
 
Shipper's deal is with the broker...If shipper can prove he paid broker for services rendered...and notwithstanding any contractual arrangements that obligate shipper to broker's suppliers in the event of nonpayment by broker..shipper is not required to pay the carrier. In any event..why should the shipper pay twice? Your deal is with the broker...go after him.
 
freightbroker

I hate to tell you FB, but you're wrong on that one. The shipper is required to ensure that the carrier is paid. The broker is working on behalf of the shipper not the carrier. In the courts it has happened time and time again, where the broker has fled with the money, and the shipper has been obligated to pay the carrier for services rendered. If the broker is not paying the freight charges, then the shipper will indeed have to pay twice.
 
You might be right..I don't know where the law falls on this one. But I do know the law is an ass alot of the time. Shipper hired the broker in good faith..Carrier hired the broker in good faith too. It is patently unfair to burden the shipper with the broker's nonpayment (even if the law allows it)...carrier should go after broker...nail him. Two wrongs don't make a right.. even if the law allows it as it may here...do the RIGHT thing..regardless of what the law says.
 
Lawyer to represent trucking company against shipper

Manitoba Moose,

The thread is in "Report a Non Paying Freight Broker" starting on 10/29 by Jim L.

The law addressing this issue is Mercantile Law Amendment Act. , and I showed a Link to Fernandes Hearn LLP. in one of my posts.

If you want to know more PM me.

Howard
 
It's not that black and white

Yes, the shipper is responsible for freight charges, except:

(1)WHERE THE CARRIER ACTUALLY AUTHORIZED THE BROKER TO
RECEIVE THE MONEY ON ITS OWN BEHALF,

(2) WHERE THE CARRIER HELD THE BROKER OUT AS BEING
AUTHORIZED TO RECEIVE PAYMENT FROM THE SHIPPER ON
ITS OWN BEHALF'

(3) WHERE THE CARRIER, BY ITS CONDUCT LEADS THE SHIPPER
TO BELIEVE THAT THE BROKER WAS AUTHORIZED TO RECEIVE
THE FREIGHT PAYMENT AND

(4) WHERE A CUSTOM OF THE TRADE EXISTS THAT IN THE PARTICULAR
CIRCUMSTANCES, BOTH THE CARRIER AND THE SHIPPER WOULD
EXPECT THE FREIGHT PAYMENT BE MADE TO THE BROKER.

Basically, it's pretty easy to show #3 and #4 by the fact that the carrier invoiced the broker and expected payment from the broker. In which case you're going to find it hard to collect from the shipper. This is upheld in case law pretty regularly. However, it's not black and white and subject to the interpretation of the court.

The Mercantile Act is an new strategy that carriers are applying. It's an ONTARIO regulation that makes all parties on the BOL liable for freight charges. Don't know if the final destination for the goods were Ontario or not. That's the only way it would apply. This is VERY GREY, it's a new regulation that has not tested to any great degree... there was a case where this was used. Consumers Glass sold bottles to Molson's freight prepaid. Molson's purchased the bottles and then Consumers Glass went bankrupt and failed to pay the carriers. The carriers were successful in recovering freight charges from Molson's because Molson's was not able to show that they had paid for the freight (it was included in their price as "delivered").

If your serious about exploring this, then I suggest you private message SCAMCHASER. He's a paralegal for the trucking industry and may be able to help you.
 
So what happens if the shipper won't pay? Shipper quite legitimately will not want to pay twice and he certainly will not unless he has a really bad lawyer. The law can't make a broker pay once...but it CAN make a shipper pay twice? BULLSHI. Much better to go after the broker...you've got a bond to go after..you've got an address..you've got a legitimate claim against him...go get em.
 
Freight Broker, the bond you refer to would only be applicable if the shipment originated in, or was destined for a US address. If the shipment was domestic (within Canada) there is no bond requirement on behalf of the broker. If the broker operated in Ontario, the carrier could try to get their money from the "trust account" that the broker must maintain. If the shipper has paid the broker, that money should have been placed into the "trust account" for distribution to the carrier. If it isn't there, the carrier can go after the directors of the broker, even if the brokerage company is a limited or incorporated entity. I believe that this has been before the courts here in Ontario and the directors were held personally responsible.
 
loaders said:
Freight Broker, the bond you refer to would only be applicable if the shipment originated in, or was destined for a US address. If the shipment was domestic (within Canada) there is no bond requirement on behalf of the broker. If the broker operated in Ontario, the carrier could try to get their money from the "trust account" that the broker must maintain. If the shipper has paid the broker, that money should have been placed into the "trust account" for distribution to the carrier. If it isn't there, the carrier can go after the directors of the broker, even if the brokerage company is a limited or incorporated entity. I believe that this has been before the courts here in Ontario and the directors were held personally responsible.
Click to expand...

That's true...no bond requirement if the shipment is domestic Canada. Nevertheless...carrier shouldn't let the broker off the hook..go after him with all you've got. Nonpayment is tantamount to THEFT..you get a criminal record if you steal a bag of dog food from Food Basics..yet the law is useless as far as collecting money from crooked brokers who tarnish the whole industry with their misdeeds. I'm a broker myself, and it makes me mad to see a carrier get shafted like this...makes it that much harder for everyone else.
 
Thanks guys, I really appreciate your insightfullness.

There was no bond as this was a Canadian broker, Accurate Logistics, from Alberta and the load was from Calgary to Estevan, SK. I've reported on them before.

BTW, this is the 5th broker from Alberta to try and stiff us. I'm so tired of chasing money.

And you guys think you have problems in PQ and Brampton, lol...

Maybe AB brokers should be put on the watch list also.

Since Accurate Logistics is in recievership, would the Mercantile Act apply as a "Right of Reversal"?
 
Good luck to you on this...I don't think one can isolate bad operators based on where they're located...unfortunately they're everywhere. But I like to look at the glass as half full..there are good operators everywhere too.
 
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