T-1453-74
The Queen (Plaintiff)
v.
Canadian Vickers Limited (Defendant)
and
Canadian General Electric Company Limited
(Third Party)
Trial Division, Thurlow A.C.J.—Montreal, May
16; Ottawa, June 22, 1977.
Jurisdiction — Maritime law — Shipbuilding contract —
Action for damages and specific performance of contract to
build ship — Whether or not Federal Court has jurisdiction to
entertain action in view of Quebec North Shore and McNama-
ra cases — Federal Court Rule 474(1)(a) — Federal Court
Act, R.S.C. 1970 (2nd Supp.), c. 10, ss. 3, 22(2)(n) Canada
Shipping Act, R.S.C. 1970, c. S-9 — Supreme and Exchequer
Courts Act, S.C. 1875, c. 11, ss. 58, 59 — Colonial Courts of
Admiralty Act, 1890, 53-54 Vict., c. 27, s. 3 (Imp.) — The
Admiralty Act, 1891, S.C. 1891, c. 29, ss. 3, 4 — The
Admiralty Act, 1934, S.C. 1934, c. 31, s. 18(1).
This is an application by defendant under Rule 474 for a
determination before trial of whether the Court has jurisdiction
to entertain the plaintiff's claim for damages for alleged breach
of a contract for the construction and delivery of an icebreaker,
and for specific performance, or additional damages if the
contract is not specifically performed. The defendant submits
that what is in issue is the performance of a shipbuilding
contract governed by provincial law, that there is no existing
and applicable federal law to support plaintiff's claim, and that
in view of the Quebec North Shore and McNamara cases, this
Court is without jurisdiction to entertain the action. Plaintiff
argues, on the other hand, that should Quebec North Shore and
McNamara cases not be distinguishable, there is Canadian
maritime law, which is federal law, to support the claim.
Held, the application to dismiss the action is allowed. There
is nothing in the Canada Shipping Act and Regulations giving
a shipowner a statutory right or cause of action against a
builder for damages resulting from defective construction or
equipment, or any statutory right to have the construction
contract specifically enforced; this Act cannot serve as a basis
for jurisdiction or for distinguishing Quebec North Shore and
McNamara cases. The law introduced by The Admiralty Act,
1891 (Can.) did not include substantive law giving the shipown-
er a remedy in admiralty against a shipwright for damages for
breach of a contract for building a ship. The Court is not aware
of any authority indicating that the maritime law administered
in the Admiralty Court ever included law dealing with the right
of a shipowner on such a contract. The fact that this contract is
one for the construction of a ship to be delivered afloat is not
sufficient to characterize it a maritime contract. No new
liability is specifically or inferentially imposed on a shipwright
and no new right is specifically or inferentially conferred on the
shipowner under the Federal Court Act.
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.
R. v. Armstrong (1908) 40 S.C.R. 229, distinguished.
Nisbet Shipping Co. Ltd. v. The Queen [1955] 4 D.L.R. 1,
distinguished. National Gypsum Co. Inc. v. Northern
Sales Ltd. [ 1964] S.C.R. 144, referred to. De Lovio v. Boit
(1817) 2 Gall. 398 (Gallison's Reports), referred to. Bow,
McLachlan & Co., Ltd. v. The "Camosun" [1909] A.C.
597, considered.
APPLICATION.
COUNSEL:
P. R. Coderre, Q.C., for plaintiff.
T. Montgomery, Q.C., for defendant.
B. Lacombe for third party.
SOLICITORS:
Deputy Attorney General of Canada for
plaintiff.
Ogilvy, Cope, Porteous, Montgomery,
Renault, Clarke & Kirkpatrick, Montreal,
for defendant.
Martineau, Walker, Allison, Beaulieu,
MacKell & Clermont, Montreal, for third
party.
The following are the reasons for order ren
dered in English by
THURLOW A.C.J.: This is an application under
Rule 474 on behalf of the defendant for determi
nation before trial of the question whether the
Court has jurisdiction to entertain the plaintiff's
claim for damages and other relief as set forth in
the statement of claim. The claim is for damages
of some $3,675,146.52 in respect of alleged
breaches of a contract made on December 31,
1964', for the building and delivery of a ship
referred to as a Triple Screw Steam Turbo-Elec-
Paragraph 1 alleges the date as December 31, 1974, and is
obviously in error, the statement of claim having been filed on
April 16, 1974.
tric Arctic Patrol Icebreaker and for specific
performance of the contract or additional damages
to be sustained if the contract is not specifically
performed.
A proceeding under Rule 474 ordinarily should
have two stages. The first is an application under
Rule 474(1)(a) on which the Court decides wheth
er it is expedient to determine the question before
the trial of the action and, if so, gives directions
under Rule 474(2) as to the case on which the
question is to be determined and sets the matter
down for hearing. The second stage is the hearing
itself 2 . In the present instance on the hearing of
the application, counsel for the plaintiff and the
defendant were in agreement that the case on
which the question should be determined consisted
only of the statement of claim and the contract
therein referred to, a copy of which was filed by
agreement; and, as it appeared to me that it would
be expedient to have the question determined
before trial, the argument proceeded forthwith as
if an order setting the matter down and giving
directions had been made, counsel for both parties
having expressed their preference that the question
be determined on the basis of the materials men
tioned and the argument presented. Counsel for
the third party was present but did not wish to be
heard and made no presentation.
It is alleged in the statement of claim that the
contract was breached when by August 29, 1964,
less than a month after the ship was handed over
to the plaintiff, and in the months that followed,
the ship's propulsion generators proved defective,
that the defendant failed to remedy the situation
or correct the defects and refused to abide the
result of an arbitration held at its request and, that
the plaintiff has sustained the damages claimed
and will sustain further damage in the future if the
defects are not corrected.
Under the terms of the contract, the ship was to
be delivered afloat at Montreal. The address of the
defendant is declared to be Montreal, Quebec, and
that of the plaintiff, the Department of Transport,
Ottawa. The contract contains, however, no state
2 See Jamieson v. Carota [ 1977] 2 F.C. 239.
ment of where it was made nor any agreement as
to the law by which it was to be governed. And,
though there are in it references to the defendant's
shipyard at Montreal, in particular in paragraph 9
as the place at which the defendant agreed to
make good defective parts, there is no express
agreement that the ship would be built there, nor
does it appear from the statement of claim where
the ship was built.
The defendant's submission was that what is in
issue in the action is the performance of a ship
building contract governed by the law of the Prov
ince of Quebec, that there is no existing and
applicable federal law to support the plaintiff's
claim and that, on the authority of the judgments
of the Supreme Court in Quebec North Shore
Paper Company v. Canadian Pacific Limited 3 and
McNamara Construction (Western) Limited v.
The Queen'', this Court is without jurisdiction to
entertain the action.
The position taken by counsel for the plaintiff
was that if the claim was not one under Canadian
maritime law the Quebec North Shore Paper and
McNamara cases could not be distinguished but
he submitted that there is Canadian maritime law,
which is federal law, to support the claim. He
pointed out that prior to 1971 the Exchequer
Court of Canada had jurisdiction in admiralty and
by the Federal Court Act 5 the Court was con
tinued as a Court of Admiralty and assigned the
jurisdiction in admiralty defined in section 22, that
the Act went on to define the Canadian maritime
law to be administered by the Court as the law
that would have been administered by the Excheq
uer Court if it had had unlimited jurisdiction in
admiralty but as altered by the Federal Court Act
or any other Act and that in paragraph 22(2)(n)
there is a declaration of some of the matters
coming within that category including claims aris
ing out of any contract for the building or equip
ping of a ship. Counsel also submitted that the
provisions of the Canada Shipping Act 6 and Regu
lations made under it which regulate many aspects
of the building, financing, mortgaging, recording,
3 [1977] 2 S.C.R. 1054.
4 [1977] 2 S.C.R. 654.
5 R.S.C. 1970 (2nd Supp.), c. 10, s. 3.
6 R.S.C. 1970, c. S-9.
registration, transferring, inspection, trials, safety
requirements, hull construction and life-saving
equipment of ships show the extent to which the
whole subject of shipping is governed by statute
and afford an additional source of federal law
which provides a basis for assigning jurisdiction in
the matter of the construction of a ship to a Court
designated by Parliament. Finally, counsel submit
ted that as the Court had admiralty jurisdiction
under the statutes which preceded the Federal
Court Act to enforce the claim of a builder when
the ship or the proceeds thereof were under arrest
of the Court and to do so must have had admiralty
or maritime law relating to the contract to apply,
it involved no extension of that same substantive
law to confer authority on the Court to enforce the
contract at the suit of the shipowner as well.
Turning first to the submission based on the
provisions of the Canada Shipping Act and Regu
lations, while a great deal of statutory federal law
is therein contained, I can find nothing therein
which gives a shipowner a statutory right or cause
of action against a builder for damages resulting
from defective construction or defective equipment
or any statutory right to have a construction con
tract specifically enforced. I do not think, there
fore, that anything in the Canada Shipping Act or
Regulations will serve as a basis for jurisdiction or
for distinguishing the Quebec North Shore Paper
Company or McNamara cases.
To deal with the other two submissions it
appears to be desirable to outline some of the
history of the Court and its jurisdiction. The Ex
chequer Court of Canada was created as a Court
of Exchequer by section 1 of the Supreme and
Exchequer Courts Act', enacted in 1875. At that
7 Statutes of Canada, 1875, c. 11.
1. There are hereby constituted, and established, a Court
of Common Law and Equity, in and for the Dominion of
Canada, which shall be called "The Supreme Court of
Canada," and a Court of Exchequer, to be called "The
Exchequer Court of Canada."
time, its jurisdiction, as defined in sections 58 and
59 8 , was limited to claims by the Crown and
against the Crown or an officer of the Crown.
From time to time since then, jurisdiction, both
in proceedings to which the Crown is a party and
proceedings between subject and subject, has been
conferred on the Court in other types of matters
over which the Parliament of Canada has legisla
tive authority, but throughout the several revisions
of the applicable statute since then and in particu
lar the major reorganizations effected in 1887 and
1971, the Court constituted by the 1875 statute
has been continued and it is still the same Court.
Initially, it was entirely a Court set up under the
authority of section 101 of The British North
America Act, 1867. But when, on the coming into
force of The Admiralty Act, 1891 9 , it became a
court of admiralty as well, the authority of Parlia
ment to constitute it as such was at least in part
derived from the Colonial Courts of Admiralty
Act, 1890 1 °. Under section 3 of that Act and
section 3 of The Admiralty Act, 1891, as a court
of admiralty, the Exchequer Court from 1891 to
1934 had, but at the same time was restricted to",
jurisdiction comparable to that of the admiralty
jurisdiction of the High Court of Justice in Eng-
land as of the year 1890. However, the provision
by which such jurisdiction was conferred on the
8 58. The Exchequer Court shall have and possess concur
rent original jurisdiction in the Dominion of Canada, in all
cases in which it shall be sought to enforce any law of the
Dominion of Canada relating to the revenue, including
actions, suits, and proceedings, by way of information, to
enforce penalties and proceedings by way of information in
rem, and as well in qui tam suits for penalties or forfeitures
as where the suit is on behalf of the Crown alone; and the
said Court shall have exclusive original jurisdiction in all
cases in which demand shall be made or relief sought in
respect of any matter which might in England be the subject
of a suit or action in the Court of Exchequer on its revenue
side against the Crown, or any officer of the Crown.
59. The Exchequer Court shall also have concurrent origi
nal jurisdiction with the Courts of the several Provinces in all
other suits of a civil nature at common law or equity, in
which the Crown in the interest of the Dominion of Canada
is plaintiff or petitioner.
9 Statutes of Canada, 1891, c. 29.
10 1890, 53-54 Vict., c. 27 (Imp.).
11 The Yuri Maru [1927] A.C. 906.
Exchequer Court, as I see it, also brought into
Canada as a part of Canadian law the system of
substantive law theretofore administered in the
Admiralty and Vice-Admiralty Courts of the Brit-
ish Empire, including those which operated in
Canada, which had been established by commis
sions under the Great Seal of the United Kingdom
and functioned under statutes of the British Parlia
ment. The same body of law had previously been
brought into effect in Ontario by The Maritime
Jurisdiction Act, 1877 12 . On the coming into force
of The Admiralty Act, 1891, the Maritime Court
of Ontario and the Vice-Admiralty Courts operat
ing in other parts of Canada were abolished. By
sections 3 and 4, it was provided that:
3. In pursuance of the powers given by "The Colonial
Courts of Admiralty Act, 1890," aforesaid, or otherwise in any
manner vested in the Parliament of Canada, it is enacted and
declared that the Exchequer Court of Canada is and shall be,
within Canada, a Colonial Court of Admiralty, and as a Court
of Admiralty shall, within Canada, have and exercise all the
jurisdiction, powers and authority conferred by the said Act
and by this Act.
4. Such jurisdiction, powers and authority shall be exercis-
able and exercised by the Exchequer Court throughout Canada,
and the waters thereof, whether tidal or non-tidal, or naturally
navigable or artificially made so, and all persons shall, as well
in such parts of Canada as have heretofore been beyond the
reach of the process of any Vice-Admiralty court, as elsewhere
therein, have all rights and remedies in all matters, (including
cases of contract and tort and proceedings in rem and in
personam), arising out of or connected with navigation, ship
ping, trade or commerce, which may be had or enforced in any
Colonial Court of Admiralty under "The Colonial Courts of
Admiralty Act, 1890." [Emphasis added.]
The wording which I have emphasized appears
to me to be an enactment of substantive law which
confers on "all persons" rights of the kind therein
described. The law administered by the Court
under these provisions is described as follows in
Mayers' Admiralty Law and Practice (1916) at
pages 41-42:
Having dealt with the question of jurisdiction, there remains
to be considered the character of the law applied in the
Exchequer Court on its Admiralty side. By the Colonial Courts
of Admiralty Act, 1890 (53 & 54 Vict., cap. 27), sec. 2, subsec.
2, the Exchequer Court may exercise its jurisdiction "in like
manner ... as the High Court in England"; and "the law which
is administered in the Admiralty Court of England is the
12 Statutes of Canada, 1877, c. 21, s. 1. And see The 'Pic-
ton" (1879) 4 S.C.R. 648 at 655, holding the statute intro vires
as legislation in relation to navigation and shipping and under
section 101.
English maritime law. It is not the ordinary municipal law of
the country, but it is the law which the English Court of
Admiralty either by Act of Parliament or by reiterated deci
sions and traditions and principles has adopted as the English
maritime law" (Brett, L.J., in The Gaetano and Maria, 7 P.D.
at p. 143). Much of this tradition and many of these principles
may be traced back to the Digest and the various ordinances of
the maritime states, such as the Consolato del Mar, and the
laws of the Rhodians, of Oleron, of Wisbey, and the Hanse
towns; but none of these codes are of themselves any part of the
Admiralty law of England, unless they, or rather the principles
they embody, have been incorporated into "the continuous
practice and the judgments of the great Judges who have
presided in the Admiralty Court, and the judgments of the
Courts at Westminster." (Lord Esher in The Gas Float Whit-
ton, No. 2 (1896) P. at 47.)
In the period from 1890 to 1931, the au
thority of Parliament to legislate with respect to
merchant shipping was to some extent restricted
by the Colonial Laws Validity Act, 1865, 28 & 29
Vict., c. 63, but, by section 2 of the Statute of
Westminster, 1931 13 , that Act ceased to apply in
respect of subsequent legislation by the parlia
ments of the self-governing Dominions. Further,
under section 6, restrictions on the powers of Par
liament imposed by the Colonial Courts of Admi
ralty Act, 1890 ceased to have effect, and by
subsection 2(2), authority was given to repeal
Imperial enactments in so far as they applied in
the Dominion.
In 1934, The Admiralty Act, 1891 was replaced
by a new Act, S.C. 1934, c. 31, which continued in
force until 1971. By it, the Exchequer Court was
continued as a Court of Admiralty for Canada and
was given jurisdiction co-extensive with that of the
admiralty jurisdiction of the High Court of Justice
in 1925 and somewhat wider jurisdiction in some
matters, in particular those referred to in subsec
tion 18(3). At the same time, The Admiralty Act,
1891 (Can.) and the Colonial Courts of Admiral
ty Act, 1890 (Imp.) in its application to Canada,
were repealed. It would seem to follow that after
the repeal of the latter, the authority of Parliament
to establish the Exchequer Court as a Court of
Admiralty was limited to that given by section 101
13 1931, 22 Geo. V, c. 4 (Imp.). [See R.S.C. 1970, Appendix
II, No. 26.]
of The British North America Act, 1867 14 . The
substantive law administered by the Court on the
admiralty side, having been established by a feder
al statute, had become, however, as I see it, a part
of the law of Canada and, while the provisions of
The Admiralty Act, 1934 are not as specific in
conferring rights as was section 4 of The Admiral
ty Act, 1891, the same law continued to be admin
istered thereafter in respect of matters falling
within the expanded jurisdiction of the Exchequer
Court on its admiralty side. By subsection 18(1), it
was provided that:
18. (1) The jurisdiction of the Court on its Admiralty side
shall extend to and be exercised in respect of all navigable
waters, tidal and non-tidal, whether naturally navigable or
artificially made so, and although such waters be within the
body of a county or other judicial district, and, generally, such
jurisdiction shall, subject to the provisions of this Act, be over
the like places, persons, matters and things as the Admiralty
jurisdiction now possessed by the High Court of Justice in
England, whether existing by virtue of any statute or otherwise,
and be exercised by the Court in like manner and to as full an
extent as by such High Court. [The emphasis is added.]
The body of law administered by the Court in
this period was described by Cartwright J. (as he
then was), as follows in the course of his dissenting
reasons in National Gypsum Company Inc. v.
Northern Sales Limited 15 :
It is first necessary to consider what is the law applied by the
Exchequer Court in the exercise of jurisdiction on its Admiralty
side. In Robillard v. The Sailing Sloop St. Roch and Char-
land, Maclennan D.L.J.A. said at pp. 134 and 135:
The first important question to be decided is:—Is it the
Maritime Law of England or the Canadian Law which
governs the rights of the parties in respect to plaintiff's claim
for title and possession of the sailing sloop St. Roch? The
14 The point was mentioned by Kerwin J. (as he then was) in
In the Matter of a Reference as to the Legislative Competence
of the Parliament of Canada to Enact Bill No. 9, ... entitled
"An Act to Amend the Supreme Court Act." [1940] S.C.R. 49
at pages 108-109:
The ingenious contention is that as Parliament by The
Admiralty Act, 1934, had repealed the Colonial Courts of
Admiralty Act, 1890 (with the exception noted), it thereby
lost its jurisdiction in Admiralty, which, it is argued, was
derived solely from the repealed Act. But that overlooks the
fact that Parliament has jurisdiction under head 10 of section
91 of the Act over the subject matter of "Navigation and
Shipping" and that it could, therefore, invest the Exchequer
Court with jurisdiction over actions and suits in relation to
that subject matter (Consolidated Distillers Limited v. The
King ([1933] A.C. 508 at 522)).
15 [1964] S.C.R. 144 at pp. 152-153.
Exchequer Court of Canada as a Court of Admiralty is a
court having and exercising all the jurisdiction, powers and
authority conferred by the Colonial Courts of Admiralty Act,
1890 (Imp.), over the like places, persons, matters and things
as are within the jurisdiction of the Admiralty Division of the
High Court in England, whether exercised by virtue of a
statute or otherwise, and as a Colonial Court of Admiralty it
may exercise such jurisdiction in like manner and to as full
an extent as the High Court in England.
In the Gaetano and Maria, 7 P.D. 137, Brett L.J., at p.
143, said:—
The law which is administered in the Admiralty Court
of England is the English Maritime Law. It is not the
ordinary municipal law of the country, but it is the law
which the English Court of Admiralty, either by Act of
Parliament or by reiterated decisions and traditions and
principles, has adopted as the English Maritime Law.
Although the Exchequer Court in Admiralty sits in
Canada it administers the Maritime Law of England in like
manner as if the cause of action were being tried and
disposed of in the English Court of Admiralty.
By s. 35 of The Admiralty Act, 1934 (Can.), 24-25 George
V, c. 31, the Colonial Courts of Admiralty Act, 1890, was
repealed "in so far as the said Act is part of the law of
Canada", and the matter is now governed by the provisions
of the Admiralty Act, R.S.C. 1952, c. 1, subs. (1) of s. 18 of
which reads as follows:
(1) The jurisdiction of the Court on its Admiralty side
extends to and shall be exercised in respect of all navigable
waters, tidal and non-tidal, whether naturally navigable or
artificially made so, and although such waters are within
the body of a county or other judicial district, and, gener
ally, such jurisdiction shall, subject to the provisions of this
Act, be over the like places, persons, matters and things as
the Admiralty jurisdiction now possessed by the High
Court of Justice in England, whether existing by virtue of
any statute or otherwise, and be exercised by the Court in
like manner and to as full an extent as by such High
Court.
Sub-section (2) of the same section provides that, in so far as
it can apply, s. 22 of the Supreme Court of Judicature (Con-
solidation) Act, 1925, of the United Kingdom, which is printed
as Schedule A to the Act, shall be applied mutatis mutandis by
the Exchequer Court on its Admiralty side.
While all jurisdiction formerly vested in the High Court of
Admiralty now forms part of the Admiralty jurisdiction of the
High Court of Justice the law administered is still the English
Maritime law. In the article on "Admiralty" in Halsbury, 3rd
ed., vol. 1, one of whose authors was Lord Merriman, it is said
at p. 50, para. 92:
The law administered in Admiralty actions is not the
ordinary municipal law of England, but is the law which by
Act of Parliament or reiterated decisions, traditions, and
principles, has become the English maritime law.
The substantive law applied by the Exchequer Court on its
Admiralty side is, of course, the same throughout Canada and
does not vary according to the Admiralty District in which the
cause of action arises.....
The body of admiralty law introduced by The
Admiralty Act, 1891 included law under which a
shipwright might, when a ship or her proceeds
were under arrest of the Court, enforce in that
Court his right to be paid for building or equipping
the ship. This has been specifically provided for in
England by The Admiralty Court Act, 1861 16 ,
which conferred on the Court of Admiralty juris
diction in such cases. It had also been a jurisdic
tion asserted in earlier times by the Court of
Admiralty".
16 1861, 24 Vict., c. 10 (Imp.).
' 7 See Roscoe's Admiralty Jurisdiction and Practice, Fifth
Edition, 1931, at pages 12 and 13, note (i), and De Lovio v.
Boit (1817) 2 Gall. 398 Gallison's Reports, which contains an
elaborate review by Story J., of the history of Admiralty
jurisdiction and includes the following passages at pages 400
and 475 respectively:
What was originally the nature and extent of the jurisdic
tion of the admiralty cannot now with absolute certainty be
known. It is involved in the same obscurity, which rests on
the original jurisdiction of the courts of common law. It
seems, however, that, at a very early period, the admiralty
had cognizance of all questions of prize; of torts and offences,
as well in ports within the ebb and flow of the tide, as upon
the high seas; of maritime contracts and navigation; and also
the peculiar custody of the rights, prerogatives, and authori
ties of the crown, in the British seas. The forms of its
proceedings were borrowed from the civil law; and the rules
by which it was governed, were, as is every where avowed,
the ancient laws, customs and usages of the seas. In fact,
there can scarcely be the slightest doubt, that the admiralty
of England, and the maritime courts of all the other powers
of Europe, were formed upon one and the same common
model; and that their jurisdiction included the same subjects,
as the consular courts of the Mediterranean. These courts are
described in the Consolato del Mare, as having jurisdiction
of "all controversies respecting freight; of damages to goods
shipped; of the wages of mariners; of the partition of ships by
public sale; of jettison; of commissions or bailments to mas
ters and mariners; of debts contracted by the master for the
use and necessities of his ship; of agreements made by the
master with merchants, or by merchants with the master; of
goods found on the high seas or on the shore; of the arma
ment or equipment of ships, gallies or other vessels; and
generally of all other contracts declared in the customs of the
sea."
The next inquiry is, what are properly to be deemed
"maritime contracts." Happily in this particular there is little
room for controversy. All civilians and jurists agree, that in
this appellation are included among other things, charter
parties, affreightments, marine hypothecations, contracts for
maritime service in the building, repairing, supplying, and
(Continued on next page)
But while, under the Act of 1861, the shipbuild
er might sue in rem or in personam in the Admi
ralty Court, if the condition of its jurisdiction was
fulfilled, the statute did not apply at all to a claim
by the shipowner against the shipwright 18 .
So much for the situation prior to the coming
into force of the Federal Court Act, R.S.0 1970
(2nd Supp.), c. 10. I turn now to the effect of that
statute.
By subsection 64(1) of that Act, The Admiralty
Act, 1934 was repealed, but by section 3 the Court
was continued as a Court of Admiralty as an
(Continued from previous page)
navigating ships; contracts between part owners of ships;
contracts and quasi contracts respecting averages, contribu
tions and jettisons; and, what is more material to our present
purpose, policies of insurance. And in point of fact the
admiralty courts of other foreign countries have exercised
jurisdiction over policies of insurance, as maritime contracts;
and a similar claim has been uniformly asserted on the part
of the admiralty of England. There is no more reason, why
the admiralty should have cognizance of bottomry instru
ments, as maritime contracts, than of policies of insurance.
Both are executed on land, and both intrinsically respect
maritime risks, injuries and losses.
Story J., also cites, at page 450, the following from the agree
ment of the twelve judges made in 1632, which, however,
appears to have no authoritative legal effect:
"If suit be before the admiral for freight or mariners' wages,
or for the breach of charter parties for voyages to be made
beyond the seas, though the charter parties happen to be
made within the realm; and though the money be payable
within the realm, so as the penalty be not demanded; a
prohibition is not to be granted. But if suits be for the
penalty, or if the question be made whether the charter party
be made or not, or whether the plaintiff did release or
otherwise discharge the same within the realm, that is to be
tried in the king's court at Westminster, and not in the king's
court of admiralty, so that first it be denied upon oath, that
the charter party was made, or a denial upon oath ten-
dered."—"If suit shall be in the court of admiralty for
building, amending, saving, or necessary victualling, of a
ship, against the ship itself and not against any party by
name, but such as for his interest makes himself a party, no
prohibition shall be granted, though this be done within the
realm." [In each case, the emphasis is added.]
18 Bow, McLachlan & Co., Limited v. The "Camosun"
[1909] A.C. 597.
additional court for the better administration of
the laws of Canada. By subsection 22(1), the
Court was given jurisdiction
... 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.
By subsection 22(2), it was declared for greater
certainty, but without limiting the generality of
subsection (1), that the Trial Division has jurisdic
tion with respect to any claim or question arising
out of inter alia:
22. (2) ...
(n) any claim arising out of a contract relating to the
construction, repair or equipping of a ship;
On the face of it, these words are broad enough to
include the claim of an owner against a builder for
damages for breach of a contract for building or
equipping a ship. But it seems to me that the
paragraphs of subsection (2), in their description
of categories of claims enforceable in the Court,
must be read as subject to the limitation that the
claims are enforceable in the Court only when they
are founded on Canadian maritime law or other
federal law, whether such as is mentioned in sub
section 22(1) or otherwise. Canadian maritime law
is defined in section 2 as meaning:
... the law that was administered by the Exchequer Court of
Canada on its Admiralty side by virtue of the Admiralty Act or
any other statute, or that would have been so administered if
that Court had had, on its Admiralty side, unlimited jurisdic
tion in relation to maritime and admiralty matters, as that law
has been altered by this or any other Act of the Parliament of
Canada;
By section 42, which is a substantive provision, it is
provided that:
42. Canadian maritime law as it was immediately before the
1st day of June 1971 continues subject to such changes therein
as may be made by this or any other Act.
In my view, the effect of these provisions is to
continue in effect as law of Canada the body of
admiralty law that had become part of the law of
Canada by The Admiralty Act, 1891 and had been
administered thereafter by the Exchequer Court of
Canada both under that Act and The Admiralty
Act, 1934, and possibly to introduce as well mari
time law, based on the sources of law referred to in
the passage I have cited from Mayers' Admiralty
Law and Practice, which was administered in the
Admiralty Court in the reign of Edward III and
prior to the statutes of Richard II and Henry IV
which were subsequently interpreted and enforced
by the common law courts, applying common law
principles, so as to severely restrict the jurisdiction
of the Admiralty Court. But, as I have already
indicated, the law introduced by The Admiralty
Act, 1891 (Can.), in my opinion, did not include
substantive law giving the shipowner a remedy in
admiralty against a shipwright for damages for
breach of a contract for the building, equipping or
repairing of a ship and I have not been referred to
any authority, nor have I found any, which indi
cates that the maritime law administered in the
Admiralty Court ever included law dealing with
the rights of a shipowner against a shipwright on
such a contract or giving a shipowner a remedy in
damages in a case such as the present. Moreover, I
do not think that the fact that the contract here in
question is one for the construction of a ship to be
delivered afloat is sufficient to characterize it as a
maritime contract, as that expression is used in the
cases which I have examined, or as, in any relevant
sense, a maritime or admiralty matter.
It remains to consider whether any change in
that situation has been made by paragraph
22(2)(n) of the Federal Court Act. In support of
his position that this provision works a substantive
change, counsel referred to The King v.
Armstrong 19 wherein it was held that the provision
of section 16 of the Act to amend "The Supreme
and Exchequer Courts Act," and to make better
provision for the Trial of Claims against the
Crown, Statutes of Canada, 1887, c. 16, giving the
court jurisdiction to hear and determine
16....
(c) Every claim against the Crown arising out of any death
or injury to the person or to property on any public work,
resulting from the negligence of any officer or servant of the
Crown, while acting within the scope of his duties or
employment;
19 (1908) 40 S.C.R. 229.
created a substantive right in the petitioner who
previously had no right of action in tort against the
Crown. The authority of the Armstrong decision
and other decisions to the same effect, was later
confirmed by the Privy Council in Nisbet Shipping
Co. Ltd. v. The Queen 20 . The wording of the
enactment considered in the Armstrong case was,
however, different from the present wording and,
as the background against which it was enacted
was one in which there was no liability on the
Crown to be "determined", it was to be inferred
that Parliament intended to impose liability on the
Crown when the injury or damages had been
caused by negligence in the circumstances defined.
That inference appears to have been supported as
well by the fact that there were, in the same
statute, provisions authorizing the prosecution of
any claim against the Crown by petition of right
and requiring the Minister of Finance to pay out
of unappropriated moneys in the Consolidated
Revenue Fund any money or costs awarded to any
person against the Crown. Here, as I see it, no
comparable situation exists. No new liability is
specifically or inferentially imposed on a ship
wright and no new right is specifically or inferen-
tially conferred on the shipowner. Their respective
liabilities and rights under the contract are, as it
seems to me, simply those arising under whatever
provincial law is applicable thereto.
Accordingly, and notwithstanding the very able
argument presented for the Crown by Mr. Nuss, I
reach the conclusion that there is no federal law to
support the jurisdiction of the Court to entertain
the plaintiff's claim. As the result of this is at
variance with the conclusion reached by Mr. Jus
tice Addy in 1975 on an application to strike out
the third party notice for want of jurisdiction, I
20 [19 55] 4 D.L.R. 1 at page 3:
The Exchequer Court Act both in its original and amend
ed form purported only to confer jurisdiction, but by a series
of decisions, the authority of which cannot be questioned, it
has been held that it not only conferred jurisdiction on the
Court but also imposed liability on the Crown: see for
instance City of Quebec v. The Queen (1894) 24 S.C.R. 420;
Filion v. The Queen (1894) 4 Ex.C.R. 134; R. v. Armstrong
(1908) 40 S.C.R. 229; Gauthier v. The King (1918) 56
S.C.R. 176. The question then is what is the measure of the
liability which is not defined by the Act but is to be inferred
from the creation of jurisdiction.
should point out that his judgment was rendered
prior to those of the Supreme Court in the Quebec
North Shore Paper Company and McNamara
cases which were the basis for the objection now
raised by the defendant.
The action will, accordingly, be dismissed but,
as both the plaintiff and the defendant proceeded,
from the time of the institution of the action until
the judgment of the Supreme Court in the
McNamara case, on the assumption that the Court
had jurisdiction, the defendant will be entitled only
to the costs of the proceedings under Rule 474.
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.