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A-175-73
Associated Metals & Minerals Corporation, et al. (Plaintiff) (Appellant)
v.
The Ship Evie W, Aris Steamship Co. Inc. and Worldwide Carriers Limited (Defendants) (Respondents)
Court of Appeal, Jackett C.J., Pratte and Le Dain JJ.—Montreal, December 14 and 15; Ottawa, December 20, 1977.
Maritime law — Jurisdiction — Whether or not Parliament competent to confer s. 22 powers on Federal Court — Contract for carriage of goods at sea — Whether or not contract was with respondent as owner and operator of vessel — Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 22 — The British North America Act, 1867, 30 & 31 Victoria, c. 3 (U.K.) (R.S.C. 1970, Appendix II), ss. 101, 129.
This is an appeal from the Trial Division's dismissal of appellant's action based on a failure to deliver the goods in question at a destination contemplated by the contract of carriage. A preliminary question of jurisdiction, not raised at trial, arose as an objection to the granting of the appeal: whether or not section 22 of the Federal Court Act must be read so as not to confer jurisdiction on the Trial Division because Parliament did not have the legislative author ity to confer such jurisdiction on a court created under section 101 of The British North America Act, 1867. The substantive question involved in the appeal is whether or not on the facts the Trial Judge erred in holding that appellant's contract of carriage was not a contract with the respondent as owner and operator of the vessel.
Held, the appeal is allowed. In light of the Quebec North Shore and McNamara cases, section 101 is to be read as authorizing Parliament to confer on such a court jurisdiction to administer "existing federal law, whether statute or regulation or common law". Admiralty law, which includes contracts for carriage of goods by sea, is subject to being "repealed, abol ished or altered" by the Parliament of Canada. Although it might co-exist and overlap with some provincial laws, it is not part of the ordinary municipal law of the provinces. With respect to the substantive question involved on this appeal, there is no identifiable difference in respect of which the facts of this case differ from the facts that were under consideration in the Supreme Court of Canada in Paterson Steamships Ltd. v. Aluminum Co. of Canada Ltd. in such a way as to avoid the same conclusion in this case as was reached there.
Paterson Steamships Ltd. v. Aluminum Co. of Canada Ltd. [1951] S.C.R. 852, followed. R. v. Canadian Vickers Ltd. [1978] 2 F.C. 675, applied. Intermunicipal Realty &
Development Corp. v. Gore Mutual Insurance Co. [1978] 2 F.C. 691, applied. Quebec North Shore Paper Co. v. Canadian Pacific Ltd. [1977] 2 S.C.R. 1054, applied. McNamara Construction (Western) Ltd. v. The Queen [1977] 2 S.C.R. 654, applied.
APPEAL. COUNSEL:
D. J. Wright, Q.C., and R. N. Waterman for plaintiff, appellant.
R. Chauvin, Q.C., for defendant, respondent Aris Steamship Co. Inc.
SOLICITORS:
Lang, Michener, Cranston, Farquharson &
Wright, Toronto, for plaintiff, appellant.
Chauvin, Marler & Baudry, Montreal, for defendant, respondent Aris Steamship Co. Inc.
The following are the reasons for judgment rendered in English by
JACKETT C.J.: This is an appeal from a judg ment of the Trial Division [T-238-72] in so far as it dismissed an action by the appellant against the respondent Aris Steamship Co. Inc. (hereinafter referred to as the respondent) as the owner and operator of the ship on which goods belonging to the appellant were shipped from Finland to Canada. The action is based on a failure to deliver the goods in question at a destination contemplat ed by the contract of carriage.'
A preliminary question as to the jurisdiction of the Trial Division in such an action should be dealt with first. As I understand it, this question was not raised in the Trial Division but is raised by the respondent, as an objection to the granting of the appeal, in the light of the decision rendered by the Supreme Court of Canada since the decision appealed against, in Quebec North Shore Paper
' On the hearing of the appeal, counsel for the appellant made it clear, as I understood him, that he was not asking for judgment, notwithstanding what is contained in his memoran dum, except on the basis of a breach of contract between the appellant as shipper and the respondent as carrier.
Company v. Canadian Pacific Limited, 2 which decision must, as it seems to me, be read with the Supreme Court's decision in McNamara Con struction (Western) Ltd. v. The Queen.'
There is, as I understand it, no question that the action in the Trial Division was, in so far as the claim now in question is concerned, an action for a claim falling within the words "claim arising out of any agreement relating to the carriage of goods in ... a ship ..." within the ordinary meaning of those words as used in section 22(2)(i) of the Federal Court Act. 4 The question, as I understand it, is whether section 22 must be read so as not to confer jurisdiction on the Trial Division in respect of the claim in this case because Parliament did not have legislative authority to confer such juris diction on a court created under section 101 of The British North America Act, 1867.
The relevant portion of section 101 authorizes Parliament, notwithstanding anything in The Brit- ish North America Act, 1867, to provide for the constitution, maintenance and organization of courts for the "Administration of the Laws of Canada".
Prior to the decisions of the Supreme Court of Canada referred to above, there was a widely accepted view that Parliament could, by virtue of section 101, confer on'a court such as the Federal Court of Canada jurisdiction "in respect of mat ters that are within federal legislative jurisdic-
2 [1977] 2 S.C.R. 1054.
' [1977] 2 S.C.R. 654.
4 Section 22 reads, in part:
22. (1) The Trial Division has concurrent original juris diction as well between subject and subject as otherwise, in all cases in which a claim for relief is made or a remedy is sought under or by virtue of Canadian maritime law or any other law of Canada relating to any matter coming within the class of subject of navigation and shipping, except to the extent that jurisdiction has been otherwise specially assigned.
(2) Without limiting the generality of subsection (1), it is hereby declared for greater certainty that the Trial Division has jurisdiction with respect to any claim or question arising out of one or more of the following:
(i) any claim arising out of any agreement relating to the carriage of goods in or on a ship or to the use or hire of a ship whether by charter party or otherwise;
tion". In the light of those cases, however, section 101 is to be read as authorizing Parliament to confer on such a court jurisdiction to administer "existing federal law, whether statute or regula tion or common law". 5 [The italics are mine.] While not so said expressly, as I read the judg ments in those cases, they stand, at the least, for the proposition that Parliament cannot confer on a section 101 court jurisdiction to administer "pro- vincial" laws.
As it seems to me, in so far as the four original provinces are concerned, the key to the distinction so adumbrated between "federal" and "provincial" law is to be found in that part of section 129 of The British North America Act, 1867, which reads as follows:
129. Except as otherwise provided by this Act, all Laws in force in Canada, Nova Scotia, or New Brunswick at the Union, ... shall continue in Ontario, Quebec, Nova Scotia, and New Brunswick respectively, as if the Union had not been made; subject nevertheless (except with respect to such as are enacted by or exist under Acts of the Parliament of Great Britain ... ) 6 to be repealed, abolished, or altered by the Parliament of Canada, or by the Legislature of the respective Province, according to the Authority of the Parliament or of that Legisla ture under this Act. 7
For the purpose of the limitation on the possible jurisdiction of a section 101 court indicated by the Supreme Court of Canada by its decisions of 1976 and 1977, I should have thought that a law con tinued by section 129 would be a "federal" law if it could "be repealed, abolished, or altered by the Parliament of Canada" whether its origin was
(a) the Common Law of England,
(b) a United Kingdom statute, or
(c) a pre-Confederation colonial statute,
5 Query whether the words "laws of Canada" in section 101 extend only to "federal" as opposed to "provincial" law or whether they include also the Constitution of Canada. Cf the recent decision of this Court in The Queen (Canada) v. The Queen (F.B.I.) [1978] 1 F.C. 533.
6 This exception was removed by the Statute of Westminster, 1931, sections 2 and 7(2).
7 In so far as the other provinces are concerned, the same or a substantially similar result is achieved by the terms upon which they entered the Union or by a statute passed under The British North America Act, 1871.
and that the expression "federal" law would also include statutes enacted by the Parliament of Canada since 1867. 8 Similarly, for that purpose, a law continued by section 129 would be a "provin- cial" law if it could "be repealed, abolished, or altered ... by the Legislature of the respective Province" and the expression "provincial" law would include statutes enacted by a legislature of a province since 1867.
If that division between what is meant by "fed- eral" law and what is meant by "provincial" law is substantially correct, as it seems to me, the princi pal, if not the only, class of case where the new light cast by the 1976 and 1977 decisions reflects a difference in the possible jurisdiction of a section 101 court is the class that comprises any case where
(a) Parliament could make, but has not made, a special law concerning rights or obligations in relation to a particular class of persons or other subject matter (e.g., Her Majesty in right of Canada or banks or banking), and
(b) in the absence of such a special "federal" law, such rights and obligations fall to be deter mined by the general laws in relation to property and civil rights that are, apart from special laws, applicable to all persons, which laws are "pro- vincial" laws.
In such a case, under the old fallacious view, the general laws, in so far as they were applicable in areas in respect of which Parliament had jurisdic tion to enact special laws, were regarded as "laws of Canada" for the purposes of section 101 because they were to such extent subject to being "altered" by Parliament in the sense that, if Par liament enacted a special law in relation thereto, it would prevail over the general law and the general law would, to that extent, become inoperative. In the light of the 1976 and 1977 decisions of the Supreme Court of Canada, it becomes apparent that the general provincial law is not subject to be "altered" by Parliament but is merely subject to being made inoperative to such extent and for such time as there is an operative inconsistent law of
8 Query whether it extends to statutes enacted by the Parlia ment of Canada under The British North America Act, 1871, or introducing the laws of England into a territory before it became a province.
Parliament in relation to the particular federal class of legislative subject matter. 9
To illustrate what I mean, reference might be made to the 1976 and 1977 decisions, viz:
(1) In the Quebec North Shore Paper case, the claimant was invoking the general law of con tract prima facie applicable to all persons ("pro- vincial" law) in the Federal Court on the view that pro tanto such law could be "altered" by a federal law in relation to interprovincial or inter national transportation although there was no existing federal law on which it could found its claim; and
(2) In the McNamara case, Her Majesty in right of Canada was invoking the general law of contract prima facie applicable to all persons ("provincial" law) 10 in the Federal Court on the view that "pro tanto" such law could be "al- tered" by a federal law in relation to federal government operations" although there was no existing federal law on which She could found her claim.
9 Compare Attorney General for Ontario v. Attorney General for the Dominion [1896] A.C. 348, per Lord Watson at pages 366-367:
It has been frequently recognized by this Board, and it may now be regarded as settled law, that according to the scheme of the British North America Act the enactments of the Parliament of Canada, in so far as these are within its competency, must override provincial legislation. But the Dominion Parliament has no authority conferred upon it by the Act to repeal directly any provincial statute, whether it does or does not come within the limits of jurisdiction prescribed by s. 92. The repeal of a provincial Act by the Parliament of Canada can only be effected by a repugnancy between its provisions and the enactments of the Dominion; and if the existence of such repugnancy should become a matter of dispute, the controversy cannot be settled by the action either of the Dominion or of the provincial legislature, but must be submitted to the judicial tribunals of the coun try... .
The question must next be considered whether the provin cial enactments of s. 18 to any, and if so to what, extent come into collision with the provisions of the Canadian Act of 1886. In so far as they do, provincial must yield to Dominion legislation, and must remain in abeyance unless and until the Act of 1886 is repealed by the parliament which passed it.
10 Compare The Queen v. Murray [1965] 2 Ex.C.R. 663, for an attempt to develop this view. That decision was upheld on appeal. See [1967] S.C.R. 262.
" Compare Nykorak v. Attorney General of Canada [1962] S.C.R. 331.
In both cases,
(a) the claimant was basing its claim on the general law of property and civil rights prima facie applicable to all persons, which was "pro- vincial" law that could not, as such, be altered by Parliament, and
(b) the claimant was unable to base its claim on any existing federal law although, at least argu ably, Parliament could have enacted a special law in relation to a federal subject matter that would have prevailed over the provincial law and have made it, to that extent, inoperative. 12
Such being my understanding of the proper appreciation of the expression "laws of Canada" in section 101 of The British North America Act, 1867, in the light of the recent decisions of the Supreme Court of Canada, I turn to a consider ation of the submission of the respondent that, at least when the appellant's action was instituted in the Exchequer Court of Canada in 1967, the Ex chequer Court of Canada had no jurisdiction in relation to the subject matter of that action. In my view, that submission must be rejected.
The nature and history of admiralty is not easy to define or relate. For present purposes, I am happy to adopt the review thereof contained in the judgment of the Associate Chief Justice in The Queen v. Canadian Vickers Ltd. 13 as supplemented by the additional material contained in the judg ment of Gibson J. in Intermunicipal Realty & Development Corp. v. Gore Mutual Insurance Company [see supra, page 691].
Without being more precise and realizing that there are many aspects of admiralty law that are obscure, I am of opinion that the better view is
(a) that there is, in Canada, a body of substan tive law known as admiralty law, the exact limits of which are uncertain but which clearly includes substantive law concerning contracts for the carriage of goods by sea;
12 The question may well arise as to whether a federal statute that comes into play in such a dispute is a federal law on which the claim is based or merely plays some incidental part. Com pare The Queen v. Murray [19671 S.C.R. 262, per Martland J. at page 265. See also Blanchette v. Canadian Pacific Limited [1978] 2 F.C. 299 for discussion of a related problem.
13 Supra, page 675.
(b) that admiralty law is the same throughout Canada and does not vary from one part of Canada to another according to where the cause of action arises; 14
(c) that admiralty law and the various bodies of "provincial" law concerning property and civil rights co-exist and overlap and, in some cases at least, the result of litigation concerning a dis pute will differ depending on whether the one body of law or the other is invoked; and
(d) that admiralty law is not part of the ordi nary municipal law of the various provinces of Canada and is subject to being "repealed, abol ished or altered" by the Parliament of Canada.
I am further of the view that, if a Canadian statute was necessary to give Canada a body of admiralty law during the period, from 1934 to 1971, The Admiralty Act, 1934, must be read as having had that effect. 15
I turn to the substantive question involved in the appeal, which as I understand it is whether, on the facts of this case, the learned Trial Judge erred in holding that the appellant's contract of carriage was not a contract with the respondent as the owner and operator of the vessel whose servant, the Master of the vessel, in accordance with the complicated arrangements that governed the entering into of contracts with shippers for car riage of goods on the vessel, signed the bills of lading in respect of the carriage of the appellant's goods. I have not been able to identify any respect in which the facts in this case differ from the facts that were under consideration by the Supreme Court of Canada in Paterson Steamships Ltd. v. Aluminum Co. of Canada Ltd. 16 in such a way as to avoid the same conclusion in this case as was
14 Compare the dissenting judgment of Cartwright J. (as he then was) in National Gypsum Co. Inc. v. Northern Sales Ltd. [1964] S.C.R. 144.
15 In so far as the period commencing in 1971 is concerned, the matter was argued on the assumption that section 42 of the Federal Court Act supplies the necessary substantive law basis for admiralty law in Canada.
16 [1951] S.C.R. 852.
reached by the Supreme Court of Canada in that case. " In the absence of some relevant difference, I am of the view that the learned Trial Judge erred in not holding that the appellant's contract of carriage was with the respondent.
The final question is what form the judgment of the Court should take. The judgment of the Trial Division was in an action against inter alia the present respondent as operator of the ship and Worldwide Carriers Limited as charterer under a time charterparty. There was no effective defence by Worldwide and, in consequence, no agreement on quantum. In the result, judgment was rendered in the following terms:
Judgment is rendered in favour of plaintiffs against defend ant Worldwide Carriers Limited with costs and a reference is ordered with respect to the amount of such damages. Plaintiffs' action against defendant Aris Steamship Co. Inc. is dismissed without costs, and the cross-demand of Aris Steamship Co. Inc. is also dismissed without costs. Defendant Aris Steamship Co. Inc. is allowed its costs in the contestation of plaintiffs' action against it, said costs to be taxed against defendant Worldwide Carriers Limited.
In this Court for the purpose of the appeal, the appellant and the present respondent have agreed "that the damages ... (are) $140,000, with inter est on that sum at 5% from December 18, 1967". 18 My understanding of the reasoning on which the Paterson case was decided is that, where it applies, the party to the contract of carriage of goods by sea is the operator of the vessel. In my view, it is
" The only distinction that I understood counsel for the respondent to suggest was that the Paterson case did not apply where, as here, the true consignee under the bills of lading was the charterer under a "voyage" charterparty. However, as I understand it, in this case, the voyage charterparty was merely the pre-shipment contract for the carriage of goods that must exist in some form (written or verbal, express or implied, formal or informal) before goods are put on board, whereas a bill of lading (being a receipt for the goods as well as a title document and evidence of the terms of the contract of carriage) should not be issued until after the goods are put on board. I see no relevant difference between the verbal contract in Pater- son and the voyage charter here for present purposes. Compare Turner v. Haji Goolam Mahomed Azam [1904] A.C. 826.
1S See appellant's memorandum, paragraph 11(J), to which counsel for the respondent acquiesced during argument.
doubtful that the charterer under the time charter- party is such a party. Worldwide has, however, not appealed against that part of the judgment that is against it. In these circumstances, the appellant has filed in the Court a document, the body of which reads as follows:
In the event that this Court sees fit to allow the appeal by Associated Metals and Minerals Corp. from that part of the judgment of Mr. Justice Walsh dated September 13, 1973, dismissing the claim of Associated Metals and Minerals Corp. against the defendant Aris Steamship Co. Inc., the plaintiff Associated Metals and Minerals Corp. acquiesces in the Court setting aside that part of the judgment allowing its claim against the defendant Worldwide Carriers Limited.
My conclusion, having regard to the foregoing, is that the appeal should be allowed with costs, that the judgment of the Trial Division should be set aside and that the following should be sub stituted therefor:
Judgment is rendered in favour of plaintiffs against defendant Aris Steamship Co. Inc. with costs in the sum of $140,000 with interest on that sum at 5% from December 18, 1967. The cross-demand of Aris Steamship Co. Inc. is dismissed without costs.
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PRATTE J.: I agree.
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LE DAIN J.: I concur.
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