T-2082-80
McAllister Towing & Salvage Ltd. (Plaintiff)
v.
General Security Insurance Company of Canada
(Defendant)
Trial Division, Mahoney J.—Toronto, August 20;
Ottawa, August 27, 1980.
Practice — Motion to strike pleadings — Third party seeks
to strike out third party notice — Defendant contracted with
plaintiff to recover cargo which belonged to third party —
Third party cause of action was based on fact that no contract
of insurance existed between defendant and third party
Whether or not Court has jurisdiction pursuant to par. 22(2)(r)
of Federal Court Act — Motion allowed — Federal Court Act,
R.S.C. 1970 (2nd Supp.), c. 10, s. 22(2)(r).
Green Forest Lumber Ltd. v. General Security Insurance
Co. of Canada [1977] 2 F.C. 351; aff d. [1978] 2 F.C.
773; [1980] 1 S.C.R. 176, referred to.
MOTION.
COUNSEL:
V. Prager for defendant.
W. V. Sasso for third party.
SOLICITORS:
Brisset, Bishop, Davidson & Davis, Montreal,
for plaintiff.
Stikeman, Elliott, Tamaki, Mercier & Robb,
Montreal, for defendant.
Rose, Persiko, Arnold, Gleiberman, Toronto,
for third party.
The following are the reasons for order ren
dered in English by
MAHONEY J.: Green Forest Lumber Limited,
hereinafter "Green Forest" moves to strike out the
third party notice delivered herein on the ground
that the subject matter of the third party action is
not within this Court's jurisdiction or, alternative
ly, that it discloses no reasonable cause of action.
Pursuant to a salvage agreement between the
plaintiff and the defendant, the plaintiff salved the
M.V. Elarkadia and its cargo. The remuneration
payable in respect of the cargo was fixed by arbi
tration pursuant to the agreement at $213,963.45.
The plaintiff seeks to recover that amount, its costs
of the arbitration, interest and costs. The plaintiff
and defendant have agreed to submit to the juris
diction of this Court for that purpose.
The defendant had agreed to insure the cargo. It
had not agreed to insure Green Forest's interest in
the cargo. Green Forest owned the cargo when the
loss occurred. That is all res judicata.'
The third party notice states the cause of the
third party action as follows:
The said Defendant claims to be indemnified by you for any
liability which they may have towards the Plaintiff, by reason
of the fact that the salvage services would have been secured by
the Defendant only on the basis that the Defendant had insured
your said cargo, which has now turned out not to be the case. In
that regard, by judgment of the Supreme Court of Canada,
Green Forest Lumber Limited v. General Security Insurance
Company of Canada, A-88-77, rendered on February 14, 1980,
the Court concluded that the cargo was at all material times
owned by you and at your risk, but that the Defendant General
Security Insurance of Canada was not the insurer of the cargo
carried on the "ELARKADIA" and had no obligation whatsoever
to effect payment for damages to said cargo. Since Defendant
General Security Insurance Company of Canada had no inter
est in the said cargo any agreement to guarantee the salvage
services of the Plaintiff was without any consideration.
The defendant says that the Court has jurisdic
tion by virtue of paragraph 22(2)(r) of the Federal
Court Act 2 , whereby this Court is vested with
jurisdiction with respect to "any claim arising out
of or in connection with a contract of marine
insurance ...". The defendant stresses "in connec
tion with".
The third party cause of action is based entirely
on the fact that, as between the defendant and
Green Forest, there is no contract of insurance; if
there were, there would be no cause of action.
Clearly, the cause of action does not arise out of a
contract of marine insurance.
It is obvious that the defendant would not have
contracted with the plaintiff if it had not insured
someone's interest in the cargo. Whatever scope is
added to the Court's jurisdiction by the words "in
I Green Forest Lumber Limited v. General Security Insur
ance Company of Canada [1977] 2 F.C. 351; aff d. [1978] 2
F.C. 773; [ 1980] 1 S.C.R. 176.
2 R.S.C. 1970 (2nd Supp.), c. 10.
connection with" in paragraph 22(2)(r), it does
not extend it so far as to embrace a cause of action
in which the existence of the contract of marine
insurance is a mere background fact explaining
how or why the cause of action arose but is
entirely immaterial to its resolution.
The defendant did not argue that its claim
against Green Forest is a claim for salvage within
paragraph 22(2)(j) of the Federal Court Act. In
the circumstances, it is not necessary for me to
consider whether the third party notice discloses a
reasonable cause of action at all.
ORDER
The third party notice is struck out. Green
Forest Lumber Limited may recover its costs of
the application from the defendant.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.