A-516-76
Hawker Industries Limited (Appellant) (Defend-
ant)
v.
Santa Maria Shipowning and Trading Company,
SA. (Respondent) (Plaintiff)
Court of Appeal, Jackett C.J., Ryan and Le Dain
JJ.—Ottawa, September 8, 1977.
Practice = Rule 324 application — Fatal flaw Opportu
nity to remedy if possible — Federal Court Rule 324.
Jurisdiction — Application under s. 52(a) for order to quash
Trial Division decision for want of jurisdiction — Application
made before matter heard in Court of Appeal — Federal
Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 52(a).
Appellant applies under Rule 324 for an order quashing the
proceedings of the Trial Division, even before the appeal was
heard, under section 52(a) of the Federal Court Act. The Court
of Appeal proceedings were launched as an appeal from a Trial
Division judgment determining respondent's right to recover
damages for failure to perform a contract to install a rudder on
its ship. Appellant argues that the Federal Court, in view of
recent Supreme Court of Canada decision, had no au
thority to entertain plaintiff's (respondent) claim.
Held, the application is dismissed. The applicant (appellant)
seeks an order to have the judgment of the Trial Division set
aside by the Court of Appeal before the hearing of the appeal
from that judgment and not to have the appeal itself quashed.
This seemingly cannot be done under section 52(a), for the
proceeding in the Court of Appeal is the appeal from the Trial
Division. In absence of authority, the Court of Appeal has no
jurisdiction to set aside the judgment appealed against until
after both parties have been heard on appeal.
APPLICATION.
COUNSEL:
Stewart McInnes for appellant (defendant).
Donald A. Kerr, Q.C., for respondent
(plaintiff).
SOLICITORS:
McInnes, Cooper & Robertson, Halifax, for
appellant (defendant).
Stewart, MacKeen & Covert, Halifax, for
respondent (plaintiff).
The following are the reasons for judgment
rendered in English by
JACKETT C.J.: This is a motion in writing under
Rule 324', whereby the appellant applies "for an
order quashing these proceedings under section
52(a) of the Federal Court Act."
The proceeding in the Federal Court of Appeal
was launched by way of a notice of appeal dated
July 21, 1976 whereby the appellant appealed
against a judgment of the Trial Division that
determined that the respondent was "entitled to
recover from the appellant damages for failure to
perform a contract".
In support of the Rule 324 motion to quash, the
solicitors for the appellant have written a letter
dated July 27, 1977, to the administrator, the body
of which reads as follows:
This is an Application by the Appellant, Hawker Industries
Limited, under Section 52(a) of the Federal Court Act to
quash these proceedings for lack of jurisdiction pursuant to
Rule 324. The Application is made pursuant to Notice of
Motion, copy of which is enclosed and which has been served
on the solicitor for the Respondent, Donald A. Kerr, Q.C.
I Rule 324 reads as follows:
Rule 324. (1) A motion on behalf of any party may, if the
party, by letter addressed to the Registry, so requests, and if
the Court or a prothonotary, as the case may be, considers it
expedient, be disposed of without personal appearance of that
party or an attorney or solicitor on his behalf and upon
consideration of such representations as are submitted in writ
ing on his behalf or of a consent executed by each other party.
(2) A copy of the request to have the motion considered
without personal appearance and a copy of the written
representations shall be served on each opposing party with the
copy of the notice of motion that is served on him.
(3) A party who opposes a motion under paragraph (1) may
send representations in writing to the Registry and to each
other party or he may file an application in writing for an oral
hearing and send a copy thereof to the other side.
(4) No motion under paragraph (i) shall be disposed of until
the Court is satisfied that all interested parties have had a
reasonable opportunity to make representations either in writ
ing or orally.
The circumstances giving rise to this action are set out in the
pleadings which are incorporated in an Appeal Book filed in
this Honourable Court. A Notice of Appeal was duly filed and
dated July 21, 1976 and the parties are still awaiting a tran
script of the evidence given at trial. The written decision of Mr.
Justice Bastin set out the circumstances giving rise to the action
which is a claim for damages by the Respondent rising out of a
contract with the Appellant to repair the Respondent's ship at
Halifax, Nova Scotia.
The Appellant submits there is no jurisdiction in the Federal
Court of Canada to entertain the Plaintiff's claim for damages
as set out in its amended Statement of Claim filed the 20th day
of April, 1975. The Appellant refers to the decision of Mr.
Justice Thurlow in Her Majesty the Queen v. Canadian Vick-
ers Limited and Canadian General Electric Company Limited,
filed June 22, 1977. In that case the Associate Chief Justice
held that a contract for the building of a ship was not a
Maritime contract and was not within the jurisdiction of The
Federal Court under Section 22(2)(n) of The Federal Court
Act. The contract in that case is for the repair of the ship and
these circumstances which are the subject of these proceedings
cannot be distinguished with respect to the matter of
jurisdiction.
The Appellant requests that an Order be issued out of this
Honourable Court dismissing the claim of the Respondent with
no costs to either party.
With reference to this, motion, counsel for the
respondent has written a letter dated September 2,
1977, to the Registry, the body of which reads as
follows:
I am afraid that I am overdue in filing a Response to Stewart
McInnes' Notice of Motion to quash the proceedings, and his
Representations in Writing dated July 27th. As you will
appreciate, the question of jurisdiction is an extremely complex
one, arising out of the recent decisions in the McNamara,
Quebec North Shore, Canadian Vickers and Sivaco cases. I
understand that the latter two—and particularly the Canadian
Vickers decision, upon which Mr. McInnes bases his applica-
tion—are under appeal to the Supreme Court of Canada.
As I think you are aware, I have also been involved, during
the past month or so, in some six or eight other cases where
jurisdictional questions are being raised. I suppose I am in the
same position as most other lawyers who have marine cases
before the Federal Court, in that I am not sure that the status,
or eventual solution, of these jurisdictional problems will be.
For the moment, rather than attempt to respond in writing to
Mr. McInnes' Representations, I must apply for an oral hear
ing. I would greatly appreciate if you would pass this letter to
the Administrator by way of telecopier, and we will await his
instructions with respect to the time and place of hearing.
I need hardly say that the matter is of vital importance to my
client. In fact, it was Hawker Industries Limited which chose
the Federal Court in an action against the shipowner. For
reasons which are fully set out in the correspondence in your
file, my client decided not to defend that action. Instead we
commenced a new action with Hawker Industries Limited and
Bethlehem Steel as co-Defendants. We agreed to let the first
action go to judgment, and then in the second action counter
claimed for the amount of the judgment.
We went through a lengthy trial, with witnesses coming to
Halifax from Vancouver, various points in the U.S.A., Ber-
muda, etc. My client won a resounding decision on all points.
(The sum at issue is approximately $400,000.)
Hawker filed, a Notice of Appeal, but only on the merits and
not on jurisdictional grounds. Had that Notice not been filed,
then of course the case would be completely over, and my client
would have recovered the large damages awarded by the Trial
Judge.
If the Court were to divest itself of jurisdiction now, after the
trial and decision, the hardship to which my client would be put
would be extreme.
I mention these matters only in a preliminary way. At the
time of a hearing, I will of course be advancing arguments in an
attempt to distinguish the Canadian Vickers and other relevant
decisions, but it may be that the Supreme Court will have filed
a definitive decision on the point by that time in any event.
I am sending a copy of this letter to Mr. McInnes. I look
forward to hearing from you.
Before dealing with the merits of this matter, I
deem it advisable to say something about the
procedure provided for by Rule 324.
Having regard to the requirement of section
16(3) of the Federal Court Act that "... sittings
of the Court of Appeal shall be arranged by the
Chief Justice to suit, as nearly as may be, the con
venience of the parties", the provision in Rule 324
for motions in writing serves the very useful pur
pose of enabling interlocutory work of the Court to
be dealt with more expeditiously and with much
less expenditure of public money than would other
wise be the case. It is also, I believe, in many
instances, more economical from the point of view
of the parties. There are of course cases where
motions in writing are not appropriate having
regard to the character of the subject of the
application.
With certain exceptions 2 , an application is only
2 See Rule 1107 re applications in the Court of Appeal for
leave or extension of time.
made under Rule 324 when the applicant (in this
case, the appellant) has elected to have the
application disposed of in that way (Rule 324(1));
and an order cannot be made against the "oppos-
ing party" based on the submissions in writing, if
he exercises his option (Rule 324(3)) for an "oral
hearing". In addition, the practice of the Court is
to require an oral hearing in any case where it is
not satisfied that the matter can be adequately
considered on the written submissions (Rule
324(4)).
Furthermore, in my view, just as happens in the
case of an application made in the presence of
members of the Court, where an applicant makes a
Rule 324 application based on submissions that do
not call for any reply from the opposing party, it
may be dismissed without waiting for such submis
sions. It is a corollary of this view that, if there is a
reasonable possibility that the applicant may have
a reply to what seems to the Court, at first blush,
to be fatal to the application, the Court may (just
as it does during oral argument) find a means of
giving the applicant an opportunity to reply
thereto.
As will be seen from what I am about to say,
this is an application to which, as I appreciate it
having regard to the applicant's submissions, there
is a fatal objection. In the circumstances, I am
loath to take the responsibility for the public ex
penditure involved in setting up a special court to
hear "oral argument" unless the applicant, who
has elected to have his application disposed of on
written submissions, can show that there is a rea
sonably arguable answer to that objection.
I turn to the merits of the application.
Section 52(a) authorizes the Court of Appeal,
inter alia, to "quash proceedings in cases brought
before it in which it has no jurisdiction...." The
proceeding in the Court of Appeal in this case is
an appeal from the judgment of the Trial Division.
It is obvious from the written representations filed
on behalf of the applicant (appellant) that the
applicant is not seeking to have that appeal
quashed but is seeking to have the Court of Appeal
quash the proceeding in the Trial Division on the
ground that that proceeding is beyond the jurisdic-
tion of the Trial Division'. In other words, if I
properly apprehend the order that the applicant is
seeking, it is to have the judgment of the Trial
Division set aside by the Court of Appeal before
the hearing of the appeal from that judgment and
not to have the appeal itself quashed. It would not
seem that this can be done under section 52(a).
In the absence of some authority of which I am
unaware, the Court of Appeal has no jurisdiction
to set aside the judgment appealed against until
after both parties have been heard on the appeal.
Unless, therefore, the applicant can show some au
thority for the proposed order sought by this Rule
324 motion, I am of the view that it must be
dismissed. I should, however, wish to be satisfied
that the applicant does not have knowledge of
some authority under which the order can be made
that is not mentioned in the submissions. I propose
therefore that an order be made dismissing the
Rule 324 motion unless further submissions are
deposited by the applicant in the Registry within
20 days from communication by the Registry to
the applicant's solicitor of the proposed order and
the reasons therefor by registered mail as evi
denced by an "A.R." card. If such submissions are
submitted the Court can consider whether they
show a sufficiently arguable case for this 324
application to warrant arranging for the "oral
argument" sought by the respondent.
The disposition that I propose of this Rule 324
application does not mean that I am of the view
that it may not be proper for the appellant to seek
a disposition of its appeal on the jurisdiction ques
tion without preparing the material for hearing of
the appeal on the merits. It may well be that the
parties can agree on a joint application for a
hearing of the appeal on the jurisdiction question
alone subject to a further hearing if the Court of
Appeal comes to the conclusion that the Trial
Division had jurisdiction or that, if the parties
By its submissions under Rule 324, the applicant states that
it is seeking an order "dismissing the claim of the Respondent".
cannot so agree, the appellant might make an
application for an order for such a hearing, in
which event, the Court could, after considering
representation from both parties, decide whether it
would be expedient to proceed in some such way.
* * *
RYAN J.: I concur.
* * *
LE DAIN J.: I concur.
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.