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carriage of goods by sea, is subject to being "repealed, abol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.
* * *
PRATTE J.: I agree.
* * *
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.