T-2817-84
Trax Cargo Inc., Ross Foods Ltd. and Home
Insurance Co. (Plaintiffs)
v.
The Ship C.P. Ambassador, Tricity Finance Ltd.
and Canadian Pacific Steamships Ltd. (Defen-
dants)
INDEXED AS: TRAX CARGO INC v. "C.P. AMBASSADOR" (THE)
Trial Division, Teitelbaum J.—Montreal, May 12;
Ottawa, May 22, 1986.
Maritime law — Practice — Time limit for bringing suit —
Preliminary determination of question of law as to whether
plaintiffs' claim time-barred by Carriage of Goods by Water
Act or by bill of lading — Transport of goods by water from
Montreal to United Kingdom under bill of lading providing
carrier discharged of all liability for loss or damage unless
suit brought within one year of delivery or agreed date of
delivery — Goods damaged — Defendants granting plaintiffs
extension of time, up to specified date, to bring suit —
Specified date Saturday — Action commenced Monday, next
day Court office open — Carriage of Goods by Water Act
applicable — Applicable rule in Schedule thereto (Hague
Rules) providing for one-year time limit for bringing suit in
much same terms as bill of lading — Granting of extension of
time equals waiver of requirement time of essence — Time-bar
rules ire admiralty law, not Quebec civil law, apply — Time
limit provisions in Hague Rules and in bill of lading not to be
given narrow and restrictive meaning — Where last day of
one-year period falls on day when Court office closed, claim
validly filed on next day Court office open — Federal Court
R. 3(2) providing Saturday holiday — Interpretation Act, s.
25(1) providing when limitation period for doing thing expires
on holiday, thing validly done on first following day not
holiday — Claim not time-barred — Carriage of Goods by
Water Act, R.S.C. 1970, c. C-15, s. 2, Sch., Art. 111(6) —
Federal Court Rules, C.R.C., c. 663, RR. 3, 200(8),(9) (as
added by SOR/79-57, s. 1), 474 — Interpretation Act, R.S.C.
1970, c. I-23, ss. 25, 28.
CASES JUDICIALLY CONSIDERED
APPLIED:
The "Clifford Maersk", [1982] 2 Lloyd's Rep. 251
(Adm.); J. Aron & Co. v. "Olga Jacob", A.M.C. 311
(5th Cir. 1976).
DISTINGUISHED:
Schweizerische v. Atlantic Container (1986), 63 N.R.
104 (F.C.A.), overturning judgment dated July 7, 1983,
Federal Court, Trial Division, T-1233-78, not reported;
Dechène v. Montreal (City of), [1894] A.C. 640 (P.C.);
Corbeil Grégoire c. Fédération québécoise de la mon-
tagne, [1981] C.S. 238 (Que.), affirmed by J.E. 86-388
(Que. C.A.).
COUNSEL:
Peter J. Cullen for plaintiffs.
Peter W. Davidson for defendants.
SOLICITORS:
Stikeman, Elliott, Montreal, for plaintiffs.
Brisset, Bishop, Davidson & Davis, Montreal,
for defendants.
The following are the reasons for order ren
dered in English by
TEITELBAUM J.: This matter came on for hear
ing on a joint motion for preliminary determina
tion of a question of law pursuant to Rule 474 of
the Rules of this Court [Federal Court Rules,
C.R.C., c. 663] on the issue of whether plaintiffs'
claim is time-barred.
The exact question put to me is:
Is the claim of the Plaintiffs time-barred by virtue of the
provisions of the Schedule to the Canadian Water Carriage of
Goods Act (sic), R.S.C. 1970, Ch. C-15 or by virtue of the
provisions of the Bill of Lading?
I believe it necessary to state the following facts
upon which the question of law shall be decided.
The herein stated facts are not in dispute.
(a) Under Bill of Lading T02615 dated at Montreal August
20, 1983, a copy of which is annexed hereto as Exhibit "A",
the shipment referred to in the present action was received by
the Defendants on board the vessel "C.P. Ambassador" at
the Port of Montreal for carriage and delivery to the Plain
tiffs at the Port Felixstowe in the United Kingdom;
(b) The delivery of the shipment to the Plaintiffs at Felix-
stowe took place on or before September 2, 1983;
(c) On June 14, 1984, the Defendants received a claim from
the Plaintiffs and on August 8th of that year, the Plaintiffs
wrote the Defendants to request an extension of time in
which suit might be filed;
(d) The Defendants replied on August 17, 1984 by letter
stating "we are granting you an extension of the suit time up
to and including December 1, 1984 without any admission of
liability and without prejudice to all our rights";
(e) There was no other communication between the parties
until December 3, 1984 when the Plaintiffs telephoned the
Defendants to request a further suit time extension;
(f) The request was declined and suit was taken later the
same day;
(g) December 1, 1984 was a Saturday and December 3, 1984
was a Monday.
Clause 26 of the bill of lading, bearing the
signature of an agent of the carrier, Canadian
Pacific Steamships Ltd., reads in full:
26. Time of Claims. Unless notice of loss or damage and of the
general nature of such loss or damage be given in writing to the
carrier or his agent at the port or place of delivery before or at
the time of the removal of the Goods into the custody of the
Merchant or of the servants or agent of the Merchant, or, if the
loss or damage be not apparent, within three days of such
removal, shall be prima facie evidence of the delivery in good
order by the Carrier of the Goods as described in this Bill of
Lading.
In any event the Carrier shall be discharged from all liability
for loss of, damage to, or delay in the delivery of the Goods and
otherwise howsoever unless suit is brought within one year after
delivery of the Goods or the date when the Goods should have
been delivered, whichever is earlier. (The underlining is mine.)
The bill of lading is clear. Suit must be brought
within one year of delivery and if no suit within
the delay of one year, then the carrier "shall be
discharged from all liability".
Since the carriage of goods, in this instance,
originated from the Port of Montreal and was
destined for another port outside Canada, the
provisions of the Carriage of Goods by Water Act,
R.S.C. 1970, c. C-15 became applicable by virtue
of section 2 thereof, and, in particular, the Rules
[Hague Rules] appended in the Schedule to the
said Act became applicable. Section 2 of the Car
riage of Goods by Water Act states:
2. Subject to this Act, the Rules relating to bills of lading as
contained in the schedule (hereinafter referred to as "the
Rules") have effect in relation to and in connection with the
carriage of goods by water in ships carrying goods from any
port in Canada to any other port whether in or outside Canada.
Paragraph 6, third subparagraph of Article III
of the Rules relating to bills of lading provides, in
part, (much in the same way as the second para
graph to Clause 26 of the above bill of lading):
Article III
Responsibilities and Liabilities
6....
In any event the carrier and the ship shall be discharged
from all liability in respect of loss or damage unless suit is
brought within one year after delivery of the goods or the date
when the goods should have been delivered. (The underlining is
mine.)
It should be noted that the time begins to run
from the date of delivery of the goods, that is, from
the moment when the consignee named in the bill
of lading or its agent receives the goods in its
custody. Therefore, the latest date upon which suit
should normally have been brought was one year
from the delivery of the goods to the named con-
signee, Ross Foods Ltd., that is, one year from
September 2, 1983, the date the parties hereto
have agreed that delivery took place (see para
graph (b) of Agreement Respecting Issues and
Facts).
The only case in Canada that I am aware of that
has dealt with Article III, paragraph 6 of the
Rules is Schweizerische v. Atlantic Container
(1986), 63 N.R. 104 (F.C.A.). In this case, the
Federal Court of Appeal overturned the Federal
Court, Trial Division decision [judgment dated
July 7, 1983, T-1233-78, not reported] to dismiss a
cargo owner's action on the ground that it was
time-barred. The Trial Judge had held that a
clause in the bill of lading which set out the
carrier's liability from "tackle to tackle" had the
effect of making the Hague Rules applicable to
any claim against the carrier, and, since such
Rules contained the provision in Article III,
paragraph 6 prescribing the one-year time limit to
bring suit, the action was dismissed as not being
timely. The Court of Appeal was of the opinion
that it would have taken language stronger and
more express than that found in the bill of lading
clause to make the Hague Rules apply to pre-load
ing and post-discharge obligations.
Mr. Justice Hugessen stated at page 105:
No authority is needed for the proposition that the Hague
Rules, by their own terms, apply only from "tackle to tackle";
it is enough to read Article I and in particular the definitions of
"contract of carriage" and "carriage of goods". That being so,
it would take language stronger than what is found in Clause
3(I) of the bill of lading to extend them to contractual obliga
tions to which they would otherwise have no application
whatsoever.
It is true that the situation before me is different
in two respects:
(a) The bill of lading (Clause 26) is that the
consignee has a duty to bring suit within
one year from delivery
and
(b) There was an extension of the time period
by common accord (see paragraph (d) of
Agreement Respecting Issues and Facts).
There would seem to be little doubt that it is
valid for a carrier to extend the delay for suit, as
prescription, in this matter, is not of public order.
In the present case, the carrier agreed to extend
the delay to December 1, 1984, this by letter dated
August 17, 1984 granting an extension "of the
suit" up to and including December 1, 1984.
I believe that the defendants, by agreeing to
extend the delay to bring suit "contracted out" of
the provisions of prescription of the claim; the
defendants implicitly waived the requirement that
"time be of the essence". By means of extending
the time limit, the defendants implicitly agreed
that the plaintiffs would not have their claim
automatically extinguished by the passage of the
one year from the date of delivery clause in the bill
of lading.
The date of December 1, 1984 was a Saturday,
a day when the Registry of the Federal Court is
closed.
If the claim before me involved the Quebec civil
law, I believe that I would have no alternative but
to find plaintiffs' claim to be prescribed.
The attorney for the defendants has submitted
very impressive case law showing that notwith
standing the last day being a Saturday or Sunday
or a holiday, the next following day is of no
consequence. This was the finding in the cases of
Dechène v. Montreal (City of), [1894] A.C. 640
(P.C.), and Corbeil Grégoire c. Fédération québé-
coise de la montagne, [1981] C.S. 238 (Que.) and
the Quebec Court of Appeal decision of this case
rendered on March 3, 1986.
The case before me is very different. I am not
dealing with Quebec civil law. I am dealing with a
federal matter, namely, admiralty law. The rules
to being time-barred (prescribed) in admiralty law
are not, in my opinion, the same as the rules of
prescription in the Quebec civil law.
I believe that the rule with regard to being
time-barred (prescribed) in shipping matters
should be no different in Canada than what it is in
the United States or in Britain.
The case of The "Clifford Maersk", [1982] 2
Lloyd's Rep. 251 would seem to me to be a case
very similar to the one before me. This is a case of
the Queen's Bench Division (Admiralty Court).
In the Clifford Maersk case, a cargo of timber
was carried from Japan to Rotterdam and Amster-
dam. The contract of carriage incorporated the
Hague Rules, Article III, paragraph 6 providing
for a one year period after delivery to bring suit
for damage.
The cargo-owners applied for an extension of
the time limitation of one year by three months. It
was granted "up to and including" October 25,
1980. Further extensions were granted "up to and
including" June 21, 1981. The 21st of June 1981
was a Sunday and the cargo-owner issued their
writ on June 22, 1981, a Monday.
It can clearly be seen that the case of Clifford
Maersk is almost exactly the same as the present
case. In the present case only one extension was
granted, that is, to December 1, 1984, a Saturday.
In the present case, the statement of claim was
filed into the office of the Court on Monday,
December 3, 1984.
As Mr. Justice Sheen stated in the Clifford
Maersk case on page 253:
The question arises whether the last extension of time was in
fact an extension up to and including June 19, 1981....
All that I have to change is the date, November
30, 1984 instead of June 19, 1981. Other than the
date, the question remains the same.
The question arises whether that last extension
of time was in fact an extension up to and includ
ing Friday, November 30, 1984.
As in the Clifford Maersk case, I am also of the
opinion that there can be no doubt that the plain
tiffs would have issued their statement of claim on
time if the defendants would not have agreed to
extend the time limitation period.
The agreed facts show that the extension
requested and granted to the plaintiffs was
requested on August 8, 1984 and granted on
August 17, 1984, well before the prescription date
of September 2, 1984. Had the extension not been
granted, the action would have proceeded normally
and well within the delays of the claim being
time-barred (prescribed).
If the only reason, and this is the present case,
why the plaintiffs have not been able to issue their
statement of claim on the last day of the agreed
period is that the office of the Federal Court is
closed, then I hold that the agreement entitled the
plaintiffs to issue the statement of claim on the
next day on which the Court office was open. This
is consistent with decisions of the British courts as
well as United States courts.
A leading United States Court case is J. Aron &
Co. v. "Olga Jacob", A.M.C. 311 (5th Cir. 1976).
In this case, the United States Court of Appeals,
Fifth Circuit, in a very brief judgment, stated the
principle that where an agreement to extend the
one year time period for suit falls on a Sunday, the
suit filed on the following Monday is timely. This
case reversed the lower court's decision.
No person or corporation should be prevented
from presenting its case to the Federal Court as a
result of giving narrow and restricted meaning to
the words contained in paragraph III(6) of the
Hague Rules or to the words contained in section
26 of the bill of lading. The meaning to be given to
the words should be such that when the last day of
the one year period or agreed extension thereof
falls on a Saturday or Sunday or any other day
when the Court's office is closed, then the last day
of the period shall be the first day that the Court
office is open to receive a statement of claim.
The defendants expressed the view that in virtue
of Federal Court Rule 200, subsections (8) and (9)
[as added by SOR/79-57, s. 1], which state:
Rule 200... .
(8) Unless otherwise directed by the Chief Justice, every
office of the Court shall be open for the transaction of business
each day except holidays, from 9 in the forenoon until 5 o'clock
in the afternoon, and such other times as the Court may, for
special reason, direct.
(9) For greater certainty, it is hereby declared that, notwith
standing the other provisions of this rule, Registry business may
be carried on at any place and at any time by an officer of the
Registry who is acting within the scope of his authority.
the plaintiff would have been able to issue the
statement of claim on a Saturday.
I do not agree with this view expressed by the
defendants. Federal Court of Canada Staff Direc
tive No. 001-R-2 would indicate that the working
hours in Montreal are from 8:30 a.m. to 5:00 p.m.
Monday to Friday only.
This is a clear indication that the Federal Court
Registry office in Montreal is closed on a
Saturday.
Furthermore, the Interpretation Act, R.S.C.
1970, c. I-23, section 25 makes no reference to
Saturday as opposed to Sunday being a "holiday",
however, Rule 3 of the Federal Court Rules,
which borrows the definition "holiday" in the
Interpretation Act (supra), adds Saturday, to sec
tion 28 of the Interpretation Act in Rule 3(2). The
words "and any Saturday" are added at the end of
Rule 3(2). Consequently, no Court business has to
be conducted on a Saturday.
This rule should apply in the present case. The
fact that the delay ends on a Saturday is as a
result of an agreement between the parties hereto.
It should not, in my view, mean that Saturday
should not be considered a holiday and thus allow
a plaintiff an extension to the first next day when
the Court is open.
Section 25 (1) of the Interpretation Act states:
25. (1) Where the time limited for the doing of a thing
expires or falls upon a holiday, the thing may be done on the
day next following that is not a holiday.
In this case, it would seem to me that the filing
on a Monday in the Registry of the Federal Court
office of a statement of claim which would other
wise have had to be filed on a Saturday, would be
a timely act.
Therefore, the reply to the question put to me is
in the negative, that is, the plaintiffs' claim is not
time-barred by virtue of the provisions of the
Schedule to the Canadian Carriage of Goods by
Water Act, R.S.C. 1970, c. C-15 or by virtue of
the provisions of the bill of lading.
The costs to follow suit.
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.