T-4371-76
Sivaco Wire & Nail Company (Plaintiff)
v.
Atlantic Lines & Navigation Company, Inc., and
Tropwood A.G. and the owners and charterers of
the vessel Tropwood and the vessel Tropwood
(Defendants)
Trial Division, Walsh J.—Montreal, May 30;
Ottawa, July 11, 1977.
Jurisdiction — Maritime law — Motion, pursuant to Rule
474, for preliminary determination — Cargo damaged at sea,
and damage ascertained at Montreal — Action in contract and
in delict and tort — Whether or not jurisdiction of Court
affected by Quebec North Shore and McNamara decisions in
maritime matters over claims for damage to cargoes — Feder
al Court Act, R.S.C. 1970 (2nd Supp.), c. 10, ss. 2(b), 22(1),(2),
42 — Federal Court Rule 474 — The Admiralty Act, 1934,
S.C. 1934, c. 31, s. 18(1),(2) Canada Shipping Act, R.S.C.
1970, c. S-9, s. 657.
Plaintiff's cargo was damaged during the voyage from
France to Montreal, and plaintiff holds defendants liable both
in contract and in delict and tort. This motion, pursuant to
Rule 474, seeks a preliminary determination as to what extent,
if any, the jurisdiction of the Court in maritime matters over
claims for damage to or loss of cargo ascertained on arrival of
the vessel has been affected by Quebec North Shore and
McNamara decisions.
Held, the motion is allowed. The Court has jurisdiction over
the subject matter. Even though, by virtue of Quebec North
Shore and McNamara decisions, the Federal Court may not
have jurisdiction over the subjects enumerated in subsection
22(2) of the Federal Court Act unless there is applicable
federal law to support the proceedings, neither case is au
thority for the proposition that applicable federal law concern
ing claims for damages to or loss of cargo carried on a ship into
Canadian waters cannot be found by the incorporation of
maritime law administered by the High Court of Justice in
England as of 1925. That admiralty law (including jurispru
dence) has been incorporated into Canada by virtue of appli
cable Canadian statutes and such law and jurisprudence
became part of Canadian maritime law over which the Court
would have jurisdiction.
Quebec North Shore Paper Co. v. Canadian Pacific Ltd.
[1977] 2 S.C.R. 1054, discussed. McNamara Construction
(Western) Ltd. v. The Queen [1977] 2 S.C.R. 654, dis
cussed. R. v. Canadian Vickers Ltd. [1978] 2 F.C. 675,
distinguished. Bow, McLachlan & Co., Ltd. v. The
"Camosun" [1909] A.C. 597, referred to. Goodwin John-
son Ltd. v. The (scow) [1954] S.C.R. 513, referred to.
MacMillan Bloedel Ltd. v. Canadian Stevedoring Co. Ltd.
[1969] 2 Ex.C.R. 375, referred to.
MOTION.
COUNSEL:
Marc Nadon for plaintiff.
David F. H. Marler for defendant Atlantic
Lines & Navigation Company, Inc.
Sean J. Harrington for defendants Tropwood
A.G. and the owners and charterers of the
vessel Tropwood and the vessel Tropwood.
SOLICITORS:
Martineau, Walker, Allison, Beaulieu,
MacKell & Clermont, Montreal, for plaintiff.
Chauvin, Marler & Baudry, Montreal, for
defendant Atlantic Lines & Navigation Com
pany, Inc.
McMaster, Minnion, Patch, Hyndman,
Legge, Camp & Paterson, Montreal, for
defendants Tropwood A.G. and the owners
and charterers of the vessel Tropwood and the
vessel Tropwood.
The following are the reasons for judgment
rendered in English by
WALSH J.: This matter came on for hearing on
plaintiff's motion for preliminary determination of
a question of law pursuant to Rule 474 of the
Rules of this Court on the issue of whether the
Court has jurisdiction over the subject matter of
this action. The action arises out of cargo damage
to a shipment of wire rods and wire coil carried
from France to Montreal on the vessel Tropwood
where it was ascertained on inspection that consid
erable damage had been caused to it for which
plaintiff holds defendants liable both for breach of
contract and in delict and tort. Defendants Trop-
wood A.G. and the owners of the vessel Tropwood
plead that at the time the Tropwood was time
chartered, not by demise, to defendants Atlantic
Lines & Navigation Company, Inc., that the cargo
was not in apparent good order and condition
when received on board, that the shipment was
subject to the Hague Rules, invoking the limita
tion of liability contained therein, and in addition
to pleading all the usual defences on the issue of
liability they plead that the plaintiff is not claim
ing relief or seeking a remedy 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.
As a result of this plaintiff brought the present
motion and in the supporting affidavit it is set out
that two recent decisions of the Supreme Court of
Canada have cast a doubt as to the jurisdiction of
the Federal Court of Canada over the subject
matter of this action by holding that it is a pre
requisite to the exercise of jurisdiction by this
Court that there be existing and applicable Feder
al law, whether under statute, regulation or
common law, which can be invoked as a basis of
the proceedings before the Court. The two cases in
question are Quebec North Shore Paper Company
v. Canadian Pacific Limited' and McNamara
Construction (Western) Limited v. The Queen 2 .
Plaintiff invokes the following sections of the
Federal Court Act as conferring jurisdiction:
2....
"Canadian maritime law" means the law that was adminis
tered 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 jurisdiction in relation to
maritime and admiralty matters, as that law has been altered
by this or any other Act of the Parliament of Canada;
22. (1) The Trial Division has concurrent original jurisdic
tion 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:
e) any claim for damage sustained by, or for loss of, a ship
including, without restricting the generality of the foregoing,
damage to or loss of the cargo or equipment of or any
property in or on or being loaded on or off a ship;
h) any claim for loss of or damage to goods carried in or on
a ship including, without restricting the generality of the
foregoing, loss of or damage to passengers' baggage or
personal effects;
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 or otherwise;
' [1977] 2 S.C.R. 1054.
2 [1977] 2 S.C.R. 654.
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 addition, in arguing the plaintiff is seeking
relief under Canadian maritime law, section 657 of
the Canada Shipping Act 3 which reads as follows
is invoked:
657. Subject to the Carriage of Goods by Water Act, carri
ers by water are responsible not only for goods received on
board their vessels, but also for goods delivered to them for
conveyance by any such vessel, and they are bound to use due
care and diligence in the safekeeping and punctual conveyance
of such goods.
Plaintiff also refers to article 68 of the Quebec
Code of Civil Procedure relating to the jurisdiction
of the Quebec Courts and concludes that they
would not have jurisdiction over the subject matter
of this action unless the defendants have assets
within the Province of Quebec, which the affidavit
states does not appear to be the case, since the
defendants have no domicile in the Province of
Quebec nor was the contract of carriage entered
into there, and hence should the Federal Court not
have jurisdiction over the subject matter of the
action plaintiff would have to seek relief in a
foreign jurisdiction. This is an argument based on
expediency, however, and cannot affect the ques
tion of whether this Court has jurisdiction or not.
It should be pointed out, however, that there are in
practice serious difficulties if plaintiff is required
to bring proceedings for loss of or damage to
in-bound cargo in the courts of one of the prov
inces of Canada by virtue of their concurrent
jurisdiction, in that they clearly do not have juris
diction over proceedings in rem and since the
vessels carrying the cargo are frequently of foreign
registry and ownership or under foreign charter
and only transiently in Canada, cargo owners
suffer serious prejudice if proceedings for such
losses cannot be instituted in rem so as to ensure
payment of a claim or a judgment. Furthermore,
as Cartwright J., as he then was, stated in the case
of National Gypsum Company Inc. v. Northern
Sales Limited 4 at page 153:
3 R.S.C. 1970, c. S-9.
4 [1964] S.C.R. 144.
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, ... .
To subject cargo claim to the varying laws of
contract and delict in effect in the different prov
inces would therefore be undesirable. Nevertheless
if in fact this Court does not have jurisdiction
ratione materiae these considerations cannot be
invoked so as to give such jurisdiction to it.
The question of the jurisdiction of this Court
was considered in some detail by Associate Chief
Justice Thurlow recently in The Queen v. Canadi-
an Vickers Limited'. In that case the claim was
for damages for alleged breaches of a contract for
the building and delivery of a ship and counsel for
plaintiff contended that there was applicable
Canadian maritime law within the meaning of the
Quebec North Shore Paper and McNamara cases
in that prior to 1971 the Exchequer Court of
Canada had jurisdiction in admiralty and by sec
tion 3 of the Federal Court Act the Court was
continued as a Court of Admiralty and assigned
the jurisdiction in admiralty defined in section 22
which included in paragraph (n) of subsection (2):
22. (2) ...
(n) any claim arising out of a contract relating to the
construction, repair or equipping of a ship;
and that moreover the Act defines Canadian mari
time law as the law that would have been adminis
tered by the Exchequer Court if it had had un
limited jurisdiction in Admiralty, but as altered by
the Federal Court Act or any other Act (section 2
supra).
Considering the history of the Federal Court,
Thurlow A.C.J. points out that the Exchequer
Court of Canada was created by section 1 of the
Supreme and Exchequer Courts Act 6 and that
throughout the several revisions including the 1971
statute' which now governs the Federal Court, the
Court constituted by the 1875 statute has been
continued and is still the same Court, having ini-
5 Supra, p. 675.
6 Statutes of Canada, 1875, c. 11.
R.S.C. 1970 (2nd Supp.), c. 10.
tially been set up under the authority of section
101 of The British North America Act, 1867. On
the coming into force of The Admiralty Act, 1891 8
it became a Court of Admiralty as well, Parlia
ment having obtained the authority to constitute it
as such in part from the Colonial Courts of Admi
ralty Act, 1890 9 . Under section 3 of both of these
statutes the Exchequer Court from 1891 to 1934
had, but was restricted to, jurisdiction comparable
to that of the admiralty jurisdiction of the High
Court of Justice in England as of the year 1890.
(See The Yuri Maru [1927] A.C. 906.)
On the coming into force of The Admiralty Act,
1891, the Maritime Court of Ontario and the
Vice-Admiralty Courts operating in other parts of
Canada as a result of having been established by
Commissions under the Great Seal of the United
Kingdom and functioning under statutes of the
British Parliament were abolished. Section 4 of the
Act reads as follows:
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."
As Mr. Justice Thurlow states the underlined
portions would appear to be an enactment of sub
stantive law.
With the passage of the Statute of Westminster,
1931 1 ° the authority of Parliament to legislate
with respect to merchant shipping became unre
stricted and under section 6 restrictions on the
powers of Parliament imposed by the Colonial
Courts of Admiralty Act, 1890, ceased to have
effect.
In 1934, The Admiralty Act, 1891, was replaced
by a new Act, S.C. 1934, c. 31, which continued in
force until 1971, the Exchequer Court being con
8 Statutes of Canada, 1891, c. 29.
9 1890, 53-54 Vict., c. 27 (Imp.).
1° 1931, 22 Geo. V, c. 4 (Imp.). [See R.S.C. 1970, Appendix
II, No. 26.]
tinued as a Court of Admiralty for Canada and
being 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 such as those referred to in subsec
tion 18(3). Section 18(1) of The Admiralty Act,
1934" reads as follows:
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. [Emphasis mine.]
Section 18(2) states that subject to the provi
sions of subsection (3), section 22 of the Supreme
Court of Judicature (Consolidation) Act, 1925,
(Imp.) 1925, 15-16 Geo. 5, c. 49, shall be applied
to this Court mutatis mutandis. Section 18(3)(a)
reads as follows:
18...
(3) Notwithstanding anything in this Act or in the Act
mentioned in the next preceding subsection contained, the
Court shall have jurisdiction to hear and determine:—
(a) Any claim—
(i) arising out of an agreement relating to the use or hire
of a ship; or
(ii) relating to the carriage of goods in a ship; or
(iii) in tort in respect of goods carried in a ship;
provided, in respect of any such claim, that no action in rem
shall be within the jurisdiction of the Court unless it is shown
to the Court that at the time of the institution of the
proceedings no owner or part owner of the ship was domi
ciled in Canada;
This latter provision is not applicable in the
present case where the statement of claim indi
cates that the owners of the ship were not domi
ciled in Canada. In the case of Gaetano and
Maria' 2 , Brett L.J. said at p. 143:
l' 24-25 George V, c. 31.
12 7 P.D. 137.
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.
In National Gypsum Company Inc. v. Northern
Sales Limited (supra) Cartwright J. (as he then
was), after referring to this quotation, states [at
page 153]:
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.
The effect of the 1934 statute was commented
on 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"" 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 juris
diction over actions and suits in relation to that subject matter
(Consolidated Distillers Limited v. The King ([1933] A.C. 508
at p. 522)).
In commenting on the effect of section 22 of the
Federal Court Act conferring jurisdiction on the
Trial Division in all cases in which the claim is
made 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 ship
ping, Thurlow A.C.J. states at page 687:
... 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 subsection 22(1) or otherwise.
After quoting the definition of Canadian maritime
law in section 2 (supra) and referring to section 42
(supra) he states at pages 687-688:
In my view, the effect of these provisions is to continue in
effect as law of Canada the body of admiralty law that had
13 [1940] S.C.R. 49.
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 maritime law, based on the
sources of law referred to in the passage I have cited from
Mayers' Admiralty Law and Practice,' 4 which was adminis
tered 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.
The learned Associate Chief Justice concludes
however that, with respect to the action before him
the Federal Court does not have jurisdiction as the
law introduced by The Admiralty Act, 1891
(Can.) did not include substantive law giving a
shipowner a remedy in admiralty against a ship
wright for damages for breach of contract for the
building, equipping or repairing of a ship nor has
he found any authority to indicate that the mari
time law administered in the Admiralty Court ever
included law dealing with the right to claim on
such a contract which he does not consider to be a
maritime contract even though it is one for the
construction of a ship to be delivered afloat. He
then considers whether section 22(2)(n) of the
Federal Court Act has made any substantive
change in the law and concludes that no new
14 This passage from Mayers' Admiralty Law and Practice,
1916, pp. 41-42 referred to earlier in the judgment reads as
follows:
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 Eng-
land"; and "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" (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 West-
minster." (Lord Esher in The Gas Float Whitton, No. 2
(1896) P. at 47).)
liability is specifically or inferentially imposed on a
shipwright and no new right specifically or infer-
entially conferred on the shipowner but that their
liabilities and rights under the contract are simply
those arising under whatever provincial law is
applicable thereto.
It may well be, however, that in the present case
and any other claims for loss of or damage to
cargo the situation is different, and even if para
graphs (e), (h) and (i) of section 22(2) (supra) are
insufficient to create any new substantive right,
the jurisdiction of the Court may nevertheless be
founded on the admiralty jurisdiction possessed by
a High Court of Justice in England. Canadian
maritime law is not limited to maritime law set out
in Canadian statutes, for if Canadian statutes have
incorporated by reference the maritime law of
England (which consists not only of statutory law
but of British jurisprudence) then this law and
jurisprudence itself becomes part of Canadian
maritime law.
Although it is an American decision the case of
De Lovio v. Boit 15 an 1815 case in a District Court
of the United States contains a very comprehen
sive review of the history of British maritime law.
In the summary of the conclusions at page 467 it is
stated:
4. That the interpretation of the same statutes by the admiral
ty does not abridge any of its ancient jurisdiction, but leaves to
it cognizance of all maritime contracts, and all torts, injuries
and offences, upon the high sea, and in ports as far as the tide
ebbs and flows.
Commenting on United States statutes which had
given to the District Court "cognizance of all civil
causes of admiralty and maritime jurisdiction" the
judgment states at page 468:
If we examine the etymology, or received use, of the words
"admiralty" and "maritime jurisdiction," we shall find, that
they include jurisdiction of all things done upon and relating to
the sea, or, in other words, all transactions and proceedings
relative to commerce and navigation, and to damages or inju
ries upon the sea. In all the great maritime nations of Europe,
the terms "admiralty jurisdiction" are uniformly applied to the
courts exercising jurisdiction over maritime contracts and
concern .
The jurisdiction of the High Court of Justice in
England in admiralty is dealt with by the Privy
15 (1817) 2 Gall. 398.
Council in a case commonly referred to as The
"Camosun". 16 In rendering judgment Lord Gorell
stated at page 608:
It was suggested by Idington J. that the Admiralty jurisdic
tion of the High Court in England had been altered by the
Judicature Acts of 1873 and 1875, and he referred to s. 24 of
the first of those Acts. Those Acts amalgamated the English
Courts and transferred to the High Court all the jurisdiction
which had been previously exercised by the different Courts, so
that every judge of the High Court can exercise every kind of
jurisdiction possessed by the High Court, but these changes
conferred no new Admiralty jurisdiction upon the High Court,
and the expression "Admiralty jurisdiction of the High Court"
does not include any jurisdiction which could not have been
exercised by the Admiralty Court before its incorporation into
the High Court, or may be conferred by statute giving new
Admiralty jurisdiction. It is true that a judge of the High Court
sitting in the Admiralty Division thereof may, as judge of the
High Court, exercise any jurisdiction which is now possessed by
a judge thereof, but he does so by virtue of the general
jurisdiction conferred upon him, and not by virtue of any
alteration in his Admiralty jurisdiction. In their Lordships'
opinion this case is unaffected by the Judicature Acts.....
In the Supreme Court case of Goodwin Johnson
Limited v. The (scow)" Justice Rand stated at
page 521:
As a preliminary to that question, I think it desirable to
review briefly the broad principles and rules of maritime law
from which the rule applicable to the circumstances must be
deduced. That law, constituting the customs of the sea enforced
generally by the maritime states of Europe, conceived a voyag
ing ship to be a venture in which all interests, ownership, bond
or other liens, cargo, wages and material, under the superin
tendence of the master, in many cases a part owner, were
committed to the risks of the voyage. Among them was that of
collision and from the earliest times damage caused by negli
gent navigation resulting in collision gave rise to a lien against
the offending vessel that took precedence over all existing
interests. The lien was enforceable in an action in rem. Through
that procedure the Court of Admiralty exercised a jurisdiction
which dealt with ownership in an absolute sense and by its
decree bound all persons and interests, foreign or domestic.
[Emphasis mine.]
Reference might also be made to the judgment
of Jackett P. (as he then was) in the case of
MacMillan Bloedel Limited v. Canadian Steve-
doring Co. Ltd. 18 in which, in considering the
interpretation to be given to section 22(1)(b)(i) of
16 [1909] A.C. 597.
17 [1954] S.C.R. 513.
18 [1969] 2 Ex.C.R. 375.
the Supreme Court of Judicature (Consolidation)
Act, 1925, 19 which included in the admiralty juris
diction of the High Court Section any other juris
diction "formerly" vested in the High Court of
Admiralty, he stated at pages 383-384:
My conclusion is, therefore, that section 22(1)(b) extends to
any matter that was within the jurisdiction of the High Court
of Admiralty before the enactment of the Statutes of Richard
II and Henry IV referred to above; and that, as that jurisdic
tion extended to torts committed in an ocean harbour (a
conclusion that I do not pretend to be able to investigate as
carefully as I should like in the time available), the jurisdiction
of this court extends to such a tort.
In the same judgment at page 381 he had previ
ously stated:
The High Court of Admiralty was a court whose origins
probably went back as far as the reign of Richard I. It had
inter alia jurisdiction over torts committed on the high seas
and, while the limit of the high seas for this purpose is not too
clear, it would seem that this jurisdiction extended to torts in
ports within the ebb and flow of the tide. See De Lovio v. Boit,
2 Gall. 398, per Story J., and The "Zeta" [1893] A.C. 468 per
Herschell L.C. at pp. 480 et seq.
In the case of The Robert Simpson Montreal
Limited v. Hamburg-Amerika Linie Nord-
deutscher 20 , the Court of Appeal found that the
Court had jurisdiction with respect to a contract of
carriage including the operation of removing goods
from a ship after completion of the ocean voyage
and delivering them to the consignee. At pages
1368 and 1369 Mr. Justice Thurlow (as he then
was) stated:
Reading the definition of section 2(b) and without presuming
in advance anything as to what was intended it appears to me
to be perfectly plain that the Canadian maritime law which the
Trial Division is given authority to administer by section 22(1)
means the whole of the law which the Exchequer Court would
have administered if it had had on its Admiralty side "unlimit-
ed jurisdiction in relation to maritime and admiralty matters".
I do not read the words "as that law has been altered by this or
any other Act of the Parliament of Canada" as limiting the
generality of what precedes them.
It seems to me, moreover, that if the Exchequer Court had
had on its Admiralty side unlimited jurisdiction in relation to
maritime matters it would plainly have had jurisdiction to
administer the law which governed the rights inter se of ocean
carriers and terminal operators in respect of the performance
by terminal operators on behalf of the ocean carriers of the
obligations of the ocean carriers to discharge, care for and
deliver cargo to the persons entitled thereto.
19 Imperial Statutes, 1925, c. 49.
20 [1973] F.C. 1356.
He makes reference to the judgment of the
Supreme Court In the Matter of a Reference as to
the Validity of the Industrial Relations and Dis
putes Investigation Act, R.S.C. 1952, c. 152, and
as to its Applicability In Respect of Certain
Employees of the Eastern Canada Stevedoring
Company Limited 21 in which Mr. Justice Locke
stated at page 578:
...it appears that the loading and unloading of cargo are part
and parcel of the activities essential to the carriage of goods by
sea, and that, as in the case of the seamen, legislation for the
regulation of the relations between employers and employees is,
in pith and in substance, legislation in relation to shipping.
The question which arises is to what extent, if
any, the jurisdiction of the Court in maritime
matters, and more especially for the purposes of
the present application, over claims for damage to
or loss of cargo ascertained on arrival of the vessel
transporting same to Canada has been affected by
the judgments in the Quebec North Shore Paper
Company and McNamara Construction (supra).
The Quebec North Shore Paper case arose from
an alleged breach of a contractual obligation to
build a rail car marine terminal at Baie -Comeau
which was part of an overall scheme to transport
newsprint to points in the United States. It was
contended that the contract pertained to an inter-
provincial work or undertaking within the meaning
of section 23 of the Federal Court Act which reads
as follows:
23. The Trial Division has concurrent original jurisdiction 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 an
Act of the Parliament of Canada or otherwise in relation to any
matter coming within any following class of subjects, namely
bills of exchange and promissory notes where the Crown is a
party to the proceedings, aeronautics, and works and undertak
ings connecting a province with any other province or extending
beyond the limits of a province, except to the extent that
jurisdiction has been otherwise specially assigned.
In rendering the judgment of the Court Chief
Justice Laskin stated [at page 10581:
In the present case there is no Act of the Parliament of
Canada under which the relief sought in the action is claimed.
The question of jurisdiction of the Federal Court hinges there
fore on the words in s. 23 "or otherwise", and this apart from
the additional and sequential question whether the claim is in
relation to any matter coming within any of the classes of
subjects specified in the latter part of s. 23. The contention on
the part of the respondents, which was in effect upheld in the
Federal Courts, was that judicial jurisdiction under s. 101 is
21 [1955] S.C.R. 529.
co-extensive with legislative jurisdiction under s. 91 and, there
fore, s. 23 must be construed as giving the Federal Court
jurisdiction in respect of the matters specified in the latter part
of the section, even in the absence of existing legislation, if
Parliament has authority to legislate in relation to them. The
contention is complemented by the assertion that there is
applicable law to govern the claims for relief, pending any
legislation by Parliament, and that it is the law of the Province
which must, pro tanto, be regarded as federal law. This conten
tion suggests a comprehensive incorporation or referential
adoption of provincial law to feed the jurisdiction of the
Federal Court under s. 23.
This contention was rejected by the Court.
In conclusion the learned Chief Justice stated [at
pages 1065-1066]:
It is also well to note that s. 101 does not speak of the
establishment of Courts in respect of matters within federal
legislative competence but of Courts "for the better administra
tion of the laws of Canada". The word "administration" is as
telling as the plural words "laws", and they carry, in my
opinion, the requirement that there be applicable and existing
federal law, whether under statute or regulation or common
law, as in the case of the Crown, upon which the jurisdiction of
the Federal Court can be exercised. Section 23 requires that the
claim for relief be one sought under such law. This requirement
has not been met in the present case .... [Emphasis mine.]
It is important to note that in this case the
Court did not go into the question of whether the
Federal Court had jurisdiction in admiralty co-
extensive to that of the admiralty jurisdiction pos
sessed by the High Court of Justice as of 1925. I
have concluded that a claim of this nature would
have come within the admiralty jurisdiction of that
Court. It is significant to note, moreover, that in
the second passage quoted above, Chief Justice
Laskin refers to the requirement that there be
applicable and existing federal law "whether under
statute or regulation or common law, as in the case
of the Crown, upon which the jurisdiction of the
Federal Court can be exercised". It is therefore
not necessary to look for a Canadian statute creat
ing substantive law for dealing with the subject
matter of this claim, for if the admiralty law
administered by the High Court of Justice in
England including the jurisprudence pertaining
thereto has been incorporated into Canada by
virtue of applicable Canadian statutes then such
law and jurisprudence become part of Canadian
maritime law over which the Court would have
jurisdiction.
In the second Supreme Court case which has
caused doubt as to the jurisdiction of the Federal
Court, that of McNamara Construction, a con
tractual dispute was again involved relating to the
construction of a penitentiary in Alberta. It was
held that although the Parliament of Canada had
exclusive legislative authority with respect to
"public debt and property" and to "the establish
ment, maintenance and management of penitenti
aries" and that the subject matter of the construc
tion contract might well fall within either or both
these legislative subjects, nevertheless the Federal
Court did not have jurisdiction as there was no
relevant substantive federal law. Proceedings had
been brought by the Crown which relied on section
17(4) of the Federal Court Act as giving concur
rent original jurisdiction to the Court in proceed
ings of a civil nature in which the Crown of
Canada claims relief. The Court overruled the
earlier judgment in Farwell v. The Queen 22 . Chief
Justice Laskin in rendering judgment stated [at
page 660]:
The common law rule that the Crown may sue in any Court
having jurisdiction in the particular matter, developed in uni
tary England, has no unlimited application to federal Canada
where legislative and executive powers are distributed between
the central and provincial levels of legislature and government
and where, moreover, there is a constitutional limitation on the
power of Parliament to establish Courts.
Even though by virtue of these judgments the
Federal Court may not have jurisdiction over the
subjects enumerated in the paragraphs of subsec
tion (2) of section 22 of the Federal Court Act
relating to navigation and shipping unless there is
applicable federal law to support the proceedings,
I believe that neither case is authority for the
proposition that applicable federal law with
respect to claims for damage to or loss of cargo
carried on a ship into Canadian waters cannot be
found by the incorporation into Canadian mari
time law of the maritime law administered by the
High Court of Justice in England, which would
include jurisdiction over such claims.
It is of interest to note that the learned Chief
Justice in his textbook, Laskin's Canadian Consti
tutional Law, Fourth Edition, at page 796 states
that the recognition to be given to substantive law
by the Federal Court depends not "even on the
22 (1893) 22 S.C.R. 553.
statutory jurisdiction of the Court, but on the
substantive law declared by Parliament under s.
101 of the B.N.A. Act to be applicable therein or,
failing such statutory declaration, on the common
law (or admiralty law as well) applicable to the
assigned jurisdiction." [Emphasis mine.] This
statement is the precursor of his similar statement
quoted from the Quebec North Shore Paper case
(supra) save that it specifically includes admiralty
law as being applicable.
Also of some interest are two Supreme Court
cases applying principles of admiralty law, as
opposed to common law, so as to allow interest on
damages awarded in cargo claims. In the first of
these, Canadian General Electric Company Lim
ited v. Pickford & Black Limited 23 , Ritchie J.
stated at page 56:
The rule in the Admiralty Court is the same as that in force
in admiralty matters in England ....
and again at page 57:
It is thus well settled that there is a clear distinction between
the rule in force in the common law courts and that in force in
admiralty with respect to allowing a claim for interest as an
integral part of the damages awarded.
The second such case is that of Drew Brown
Limited v. The "Orient Trader" 24 in which Laskin
J. (as he then was) stated at page 1335:
In line with the principle considered by this Court in Canadian
General Electric Co. Ltd. v. Pickford and Black Ltd. ([1972]
S.C.R. 52), the respondent should have interest from the date
of the general average adjustment to the date of judgment.
These cases are instances of the application in the
Exchequer Court and Federal Court respectively
of the substantive rules of English admiralty law.
It is my conclusion, therefore, that this Court
does have jurisdiction over the subject matter of
this action namely a claim arising out of contract
or tort for damage to cargo carried from France to
Montreal on the defendant vessel Tropwood. Since
the question of jurisdiction is one which has not
been specifically raised before in this context and
is a very important one, judgment of this applica
tion will be rendered without costs.
23 [1972] S.C.R. 52.
24 [1974] S.C.R. 1286.
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.