Date: 20030915
Docket: T-854-02
Citation: 2003 FC 1061
Vancouver, British Columbia, Monday, the 15th day of September, 2003
Present: MR. JOHN A. HARGRAVE, PROTHONOTARY
SIMPLIFIED ACTION
ACTION IN REM AGAINST THE VESSEL "HANDY PRINCE"
BETWEEN:
DSL CORPORATION
Plaintiff
and
BULK ATLANTIC INC., HANDY PRINCE LTD.,
THE SHIP "HANDY PRINCE", HER OWNERS AND
ALL OTHERS INTERESTED IN THE "HANDY PRINCE"
Defendants
REASONS FOR ORDER
HARGRAVE P.
[1] This simplified action involves a claim of about $14,000 (US) for damage to steel pipe carried from Turkey to Houston, Texas, the action having been commenced on the last minute instruction of cargo underwriters in order to prevent the running of limitation against the Plaintiff, who had been able to obtain a time extension from the owner, but not from the charter. The present motion is to either set aside the ex juris service of the Statement of Claim on Bulk Atlantic Inc. and Handy Prince Ltd. or stay the proceedings, on the grounds that there is no real and substantial connection, or legal nexus between this matter and Canada and thus the Federal Court has no jurisdiction. Here the Defendants point out that the Plaintiff is an American company, the Defendant, Handy Prince Ltd., is Maltese, with a manager in Greece, that the "Handy Prince", which has not been arrested, is registered in Malta. Handy Prince Ltd. takes the position that neither they nor the Greek manager, Eldrima Maritime Enterprises S/A has either a place of business or a branch or agency in Canada. Neither the actual nor intended ports of loading or discharge were in Canada. Bulk Atlantic Inc., the time charterer, is a Marshall Island company: Bulk Atlantic says it has neither an office nor an agent in Canada. To the contrary, American Shipping and Chartering, ships' agents, of Houston, Texas, who handled the "Handy Prince" at that port, advised the Plaintiff that their principals were Atlantic Maritime Inc. of Montreal, the latter apparently being brokers and claims agents for the owners, Bulk Atlantic Inc. of the Marshall Islands.
[2] Often ship owners and operators, for business reasons, conduct their affairs from various diverse and distant locations. However this can become a shell game to the great frustration of those who wish to determine proper defendants and an appropriate jurisdiction in which to institute legal proceedings to claim for cargo loss or damage.
[3] The Defendants rely upon The Martha Russ [1973] F.C. 394, a decision of Mr. Justice Collier, for the proposition that, in the case of an action in personam, there must be a real and substantial connection, or legal nexus, between the carriage and Canada and between the parties and Canada before the Federal Court has jurisdiction over foreign entities. Here they refer to The Martha Russ, at page 399 where Mr. Justice Collier pointed out what he took to be:
...a basic principle in asserting jurisdiction over foreigners: that there must be some legal nexus between the foreign defendants and the territorial jurisdiction of the Court. This nexus must arise from some act, conduct or agreement by the foreign defendant which is or can be related in personam to the territorial jurisdiction of Canada
[emphasis added]
The Court of Appeal upheld the Trial Judge's order, setting aside service of the Statement of Claim, [1974] F.C. 410. In considering The Martha Russ one must keep in mind that it deals with service ex iuris and Rule 307, at that time the rule dealing with service out of the jurisdiction: Rule 307 did not provide for service of the Statement of Claim out of the jurisdiction and allowed service of a notice of statement of claim only with leave. The Martha Russ seems to have been based on the proposition that, historically, the English courts had no jurisdiction over foreign entities unless served within the jurisdiction. This limitation on jurisdiction is contrary to the view of Lord Wilberforce in The Atlantic Star [1974] A.C. 436 (H.L.) to which I will shortly refer.
[4] The Martha Russ was followed in The Canmar Victory (1998) 153 F.T.R. 266, affirmed (1999) 250 N.R. 192, both Courts looking for a nexus to Canada by way of an act, conduct or agreement.
[5] Counsel for the Plaintiff relies upon United Nations v. Atlantic Seaways Corporation [1979] 2 F.C. 541, a decision of the Federal Court of Appeal, for the proposition that jurisdiction in personam, in respect of a cargo claim, contains no qualification, express or implied, based on the place where the cause of action arose, so long as the claim falls within one of the categories of jurisdiction specified in section 22(2) of the Federal Court Act. The Atlantic Seaways case was followed by the Trial Division in a subsequent case between the same parties, United Nations v. Atlantic Seaways Corporation [1980] 2 F.C. 345 and was explained by Mr. Justice Collier in Elesguro Inc. v. Ssangyong Shipping Company [1981] 2 F.C. 326 where Mr. Justice Collier referred to another contemporaneous Court of Appeal decision, to the same effect as Atlantic Seaways, being Santa Maria Shipowning and Trading Company v. Hawker Industries Limited [1976] 2 F.C. 325.
[6] In Atlantic Seaways Justice of Appeal LeDain relied on various authorities for the proposition that the Court's jurisdiction in cargo damage claims extended beyond Canada, looking upon the question of whether the Court should, in any given case, assume jurisdiction, as a discretionary decision to be made when granting leave to serve ex juris. Here I would observe that leave to serve ex juris is not required under the present rules. Among the authorities referred to in Atlantic Seaways is The Atlantic Star (supra), being a case upon which Mr. Justice LeDain relied. In the Atlantic Star Lord Wilberforce had this to say about the jurisdiction of the English Admiralty Court:
...the Admiralty court in this country is one with a long history and a wide international reputation. It is one to which resort is made from all over the world in matters having no intrinsic connection with England. The proportion (we were supplied with figures researched by counsel) of the purely foreign suits which it entertains is substantial. It is a forum of choice often selected by parties to contracts: it is accustomed to applying foreign law, it is well-equipped to take expert advice which itself has a high repute. While all of these considerations still obtain today, there are now in existence, in other maritime countries, courts with Admiralty jurisdiction with comparable, if not equal, experience and I think it would be right that weight should be given to this when one of such courts is presented as the alterative forum.
(page 469)
This passage limits jurisdiction only in the sense that some weight should be given when some other court is presented as an alternative, which is to some degree the situation here, counsel for the Defendants submitting that because the receiver of the cargo was in Texas, that ought to be the forum. However, there is no offer of a waiver of any time bar in Texas in return for agreement to a stay.
[7] Returning to the Atlantic Seaways case, Mr. Justice Collier distinguished that case in the Ssangyong Shipping case (supra) on the basis that it dealt not with service ex juris, which was the situation in both Ssangyong Shipping and in The Martha Russ (supra), but rather with jurisdiction over certain types of claims. Of course, under the present Federal Court Rules, service ex juris is automatic.
[8] To the same effect as and referred to in the Atlantic Seaways case is Santa Maria Shipowning & Trading Co. v. Hawker Industries Ltd. [1976] 2 F.C. 325 in which Chief Justice Jackett delivered the decision of the Court of Appeal. At issue in Santa Maria was jurisdiction on the basis of section 22(2)(n) of the Federal Court Act, being jurisdiction to entertain a claim for ship repair. The whole of the cause of action was situated outside of Canada and while Hawker Industries did have a branch of some sort in Halifax, it was the American operation which was involved in the action, with the Court of Appeal deciding that the service ex juris order, against the American Hawker Industries Ltd., should be left to the time of trial when more facts might be known. However in passing Chief Justice Jackett had this to say about The Martha Russ and its relationship to jurisdiction:
Authorities concerning service ex iuris and the recognition of foreign judgments would not, as it seems to me, be of much help on the question although it is worthy of note that this Court in the Martha Russ case made it clear that it was not deciding that appeal on a question of "jurisdiction" to authorize service ex iuris and that the decision of the Supreme Court of Canada in Antares Shipping Corporation v. The Ship "Capricorn" of January 30 last provided for service ex iuris in a case in which the cause of action would not seem to be situate in Canada any more than, on the view taken by the appellant, the cause of action in question here is situate in Canada. (The question of the Court's jurisdiction" in the latter case would, as I understand it, still seem to be open for consideration.)
(pages 334 and 335)
Santa Maria Shipowning was, as I indicated, a service ex juris case. However the Court of Appeal certainly recognized the limitations on The Martha Russ as reflected in Antares Shipping Corporation v. The Capricorn (1976) 65 D.L.R. (3d) 105 (S.C.C.).
[9] Counsel for the Defendants submits that the Court of Appeal, in Atlantic Seaways, relied upon Quebec Northshore Paper Company v. Canadian Pacific Limited [1977] 2 F.C.R. 1054 and MacNamara Construction (Western) Limited v. The Queen [1977] 2 F.C.R. 654, however the better term is that Justice of Appeal LeDain considered those cases. The argument of counsel for the Defendant continues to the effect that, according to the overview of jurisdiction, in the current edition of Sgayias on the Federal Court Practice, at page 28 and 29, Quebec Northshore andMacNamara and by extension The Capricorn (supra) had been called into question by ITO Int. Terminal Operators Ltd. v. Miida Electronics Inc. [1986] 1 F.C.R. 752. However Sgayias goes on to conclude that all of this is academic in that section 22(2) of the Federal Court Act is still the guide post in determining the content of Canadian maritime law. All of this goes too far afield in the present instance, where the question is that of the jurisdiction in personam with respect to cargo claims, with Atlantic Seaways being clearly distinguishable from The Martha Russ, which was a service ex juris case and which has been superceded by Federal Court Rule 137, allowing service ex juris without leave.
[10] Initially, the material available to the Plaintiff indicated that Atlantic Maritime Co. Inc., of Montreal, Quebec, were charterers of the "Handy Prince". Atlantic Maritime, by correspondence to Plaintiff's counsel, advised that they were merely brokers for Bulk Atlantic Inc., of the Marshall Islands, the time charterer of the "Handy Prince". This advice, of 21 June 2002 was followed up by various documents from Atlantic Marine on 26 June 2002, being a portion of a charter party, a letter from another broker and a letter from Bulk Atlantic Inc. all to the effect that Bulk Atlantic Inc. was indeed the time charterer. Had the matter rested there, the position taken by the Defendants is certainly a strong one. However the agents involved with the vessel in Houston, Texas, American Shipping and Chartering, had not left things well enough alone.
[11] American Shipping and Chartering advised the cargo underwriters that their principles were Atlantic Maritime of Montreal, Quebec. Atlantic Maritime of Montreal, previously characterized as a broker, was thus held out not only as the broker but also as the agent for Bulk Atlantic Inc. who would deal with the claim. A broker is an agent primarily employed to negotiate a contract between two parties: see Anson's Law of Contract, 22nd edition, 1964, Clarindon Press, Oxford at page 545. Here the position of Atlantic Maritime, that of being held out as a claim settling agent for the charterer, Bulk Atlantic goes beyond that of a broker for Atlantic Maritime. The Plaintiff having been invited to deal with Atlantic Maritime, in Montreal, Quebec, there is some form of act and conduct tying the matter to Canada. In the alternative Atlantic Seaways still being good law, there is no qualification on in personam jurisdiction under section 22 of the Federal Court Act, so long as the claim falls, as it does here, within one of the specific categories.
[12] As there is a connection with Canada, by way of Atlantic Maritime of Montreal, I do not see that Handy Prince Ltd., who was in fact served with the Statement of Claim, can avoid remaining a party . Here I also rely upon the Atlantic Seaways Corporation case (supra) for the general proposition that a cargo claim in personam extends to the cause of action arising outside of Canada, for as the Court of Appeal pointed out, the Federal Court Act contains no qualification, express or implied, based on the place where the cause of action arises.
[13] The Defendants, Bulk Atlantic Inc. and Handy Prince Ltd. may have 21 days within which to file their defences. One set of costs to the Plaintiff, payable jointly by the Defendants, in any event of the cause.
(Sgd.) "John A. Hargrave"
Prothonotary
Vancouver, British Columbia
September 15, 2003
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-854-02
STYLE OF CAUSE: DSL Corporation v. The Ship "Handy Prince" et al.
PLACE OF HEARING: Vancouver, BC
DATE OF HEARING: September 8, 2003
REASONS FOR Order : Hargrave P.
DATED: September 15, 2003
APPEARANCES:
Mr. Barry Oland FOR PLAINTIFF
Mr. Shane Nossal FOR DEFENDANT
SOLICITORS OF RECORD:
Oland & Co. FOR PLAINTIFF
Vancouver, BC
Bull Housser & Tupper FOR DEFENDANT
Vancouver, BC
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