Brooks Aviation Inc. v. Boeing SB-17G, Serial No. 44-83790 (Aircraft), 2004 FC 710

Docket: T-217-02

Citation: 2004 FC 710

Ottawa, Ontario, May 17, 2004

Present:           The Honourable Mr. Justice W. Andrew MacKay                          

BETWEEN:

                                                      BROOKS AVIATION, INC.

                                                                                                                                               Plaintiff

                                                                           and

                              THE WRECKED AND ABANDONED BOEING SB-17G

AIRCRAFT, SERIAL NO. 44-83790, ITS APPAREL AND

CARGO and the OWNERS, CHARTERERS AND ALL

OTHERS INTERESTED IN THE WRECKED AND

ABANDONED BOEING SB-17G AIRCRAFT, ITS

APPAREL AND CARGO

Defendants

                               REASONS FOR ORDER, ORDER AND JUDGMENT

[1]                The plaintiff, Brooks Aviation, Inc, seeks summary judgment under the Court's Rules in respect of the relief it claims in this in rem action against the wrecked and abandoned Boeing SB-17G Aircraft, Serial no. 44-83790, its apparel and cargo (the "res"), and against the owner and all others interested in the res.

[2]                On December 24, 1947, the defendant aircraft, a "flying fortress" well known for service through World War II, then operated by the United States Air Force, while flying from Greenland to certain bases in northern Canada and in Newfoundland, ran low on fuel and made a forced landing on the frozen surface of Lake Dyke, Labrador. Two days later the crew and passengers, who had survived the landing and had camped with their belongings and some parts of the aircraft on the shore of the lake, were rescued from the site. During the spring breakup of the ice on the lake, the res travelled with the ice and ultimately it came to rest at the bottom of Lobstick Lake, into which Lake Dyke apparently flows.

[3]                On August 1, 1998, the plaintiff, a company incorporated in the United States , having undertaken a search for the res, located it under approximately 25 feet of water at the bottom of Lobstick Lake. It also recovered parts of the aircraft that had been left on the shore of Dyke Lake when the crew and passengers had been rescued in the 1947. While the approximate location of the res was known to officials of the Province of Newfoundland and Labrador, the evidence is that the exact location was determined by the plaintiff in 1998 when it found the wrecked aircraft.

[4]                After discussions with provincial officials concerning possible recovery of the res, the plaintiff commenced this action, against the res and the owners and others interested in the res, and it applied to this Court for arrest of the res. The statement of claim, affidavit to lead warrant and the warrant of arrest, filed in the Court, were provided to the Province of Newfoundland and Labrador (the "Province") and to the receiver of wrecks, Canada Department of Fisheries and Oceans, and statements of defence were filed by the Province and by the Attorney General of Canada.

[5]                On April 2002, on the plaintiff's motion, this Court granted an order dispensing with service on the res of the statement of claim, the affidavit to lead warrant and warrant and the Order dispensed with further service and declared the res to have been arrested.

[6]                By its motion for summary judgment the plaintiff seeks an order with regard to certain relief sought by its statement of claim, as follows:

(A)           a declaration or finding that this Honourable Court has exclusive jurisdiction over the salvage of the B-17 Aircraft;

(B)            a declaration or finding that the Plaintiff salvors have a maritime lien for salvage services as against the wrecked B-17 Aircraft, its apparel and cargo;

©)             a declaration or finding that the Plaintiff salvors have entire and absolute possession and control of the B-17 aircraft for the purpose of the salvage effort and that all other parties are enjoined from interfering with the Plaintiff's exclusive salvage rights;

(D)           a declaration or finding that the Plaintiff salvors are entitled to and shall be awarded a full and liberal salvage award from the Receiver of Wrecks, if title to the B-17 Aircraft be unclaimed, or from any party determined to be the true owner of the res;

(E)            alternatively, if no salvage award is paid or if title to the B-17 Aircraft is unclaimed by the true owner of the res, then that the Plaintiff salvor be declared the sole and unencumbered owner of the B17- Aircraft.

[7]                In response to this motion both the Attorney General of Canada ("Canada") and the Province filed written submissions and the Province appeared by counsel when the matter came on for hearing. The issues raised are these:

            1.          Is this a matter appropriate for summary judgment?

            2.          Is this matter within the jurisdiction of the Court?

            3.          What is the significance of the ownership of the res?

            4.          Does the plaintiff have a valid salvage claim?

5.          What are the appropriate remedies in this case?

[8]                I deal with these issues in turn.

Is this matter appropriate for summary judgment?

[9]                This case is appropriate for summary judgment, here opposed only by the Province, since the material issues are matter of law, and any issues of fact essential for determination of those legal issues are determinable on the evidence now before the Court by affidavit. Other issues on which the parties may disagree, e.g. the historic significance of the res to the Province, are not relevant to the legal issues now determinable, or they are unlikely to be better determined with further evidence, e.g. the imminence of the peril likely to effect the res. In all the circumstances of this case, determination of legal issues on summary judgment serves the interest of justice, and avoids further costs involved if a trial were to proceed.

Is this matter within the jurisdiction of the Court?

[10]            The issue before the Court is the applicability of federal Canadian law concerning salvage of ships or aircraft, in this case in regard to recovery of a wrecked, derelict aircraft, located by the plaintiff under water on the bed of a lake in Labrador, which lies in Crown lands claimed by the Province. The Province claims title to the res as an archaeological object found on land within the Province, pursuant to the Historic Resources Act R.S.N.L., 1990, c. H-4, ss. 2, 11.

[11]            Under s. 2 of the Federal Courts Act, R.S.C. 1985 c. F-7 as amended, this Court has jurisdiction known as maritime jurisdiction in relation to navigation and shipping over all claims under or by virtue of Canadian maritime law or any other law of Canada (s-s. 22(1)), including "any claim for salvage...of life, cargo, equipment or other property, from or by an aircraft to the same extent and in the same manner as if the aircraft were a ship (paragraph 22(2)(j)). For greater certainty that jurisdiction is declared to be applicable "in relation to all aircraft where the cause of action arises out of paragraph (j) to (l), whether those aircraft are Canadian or not and wherever the residence or domicile of the owners may be" (s-s. 22(3)). Finally, under s-s. 43(2) of that Act the jurisdiction conferred by s. 22 may be exercised in rem against the ship, aircraft or other property that is the subject of the action.

[12]            The law of salvage is an aspect of traditional maritime law, a matter within the exclusive jurisdiction of Parliament in relation to navigation and shipping. It also includes statutorily enacted law dealing with claims in maritime and admiralty matters limited only by federal legislative competence (see ITO - Int. Terminal Operators Ltd v. Milda Electronics Inc., [1986] 1 S.C.R. 752, 68 N.R. 241, 28 D.L.R. (4^th) 641)). That includes federal legislation in relation to wrecked aircraft, pursuant to Parliament's exclusive authority in relation to navigation and shipping and to aeronautics.

[13]            So it is that in addition to the traditional law of salvage, i.e., within maritime law recognized by the common law and the constitution, Parliament has enacted legislation in relation to salvage within part VI of the Canada Shipping Act, R.S.C. 1985, c. S-9 as amended ("C.S.A."). I note that Parliament by its legislative sanction has also included the International Convention on Salvage, 1989 within Canadian maritime law, now as Schedule V to C.S.A. Its significance for federal jurisdiction in relation to salvage is dealt with by Mr. Justice Hugessen in Early Recovered Resources Inc. v. Gulfdog Salvage Co-operative Association et al 2002 FCT 184 (FCTD), upheld in result, [2003] 3 F.C. 447 (F.C.A.).

[14]            C.S.A defines "wreck" as including, inter alia,

[15]            The C.S.A. provides for the appointment of a receiver of wrecks in various regions of Canada and that officer has responsibilities in regard to wrecks and their salvage. That Act provides:

[16]            Clearly, a wrecked aircraft "within the limits of Canada", when possessed, shall be delivered to the receiver of wrecks, unless the Minister dispenses with delivery.

[17]            That responsibility and the rights of a salvor, in my view, are not adversely affected by reason of s. 449 of the C.S.A. which relates to aircraft in the following terms:

[18]            The Province urges that s-s. 449(1) excludes the aircraft wreck in this case from the application of the law relating to salvage because the aircraft is not on or over the sea or tidal waters or on or over the Great Lakes. I note that in Smith v. Smith, (1979), 12 B.C.L.R. 195, [1979] 4 W.W.R. 665, 101 D.L.R (3d) 189 (B.C.S.C.), Meredith J. dismissed a claim for salvage by the plaintiff who had towed an overturned aircraft for several miles on an inland lake, ultimately reaching a camp on the shore whence the aircraft was saved. His Lordship, referring to then s. 514 (the forerunner of the current S. 449 of C.S.A.) precluded the salvage claim since the aircraft was not on the sea, on tidal waters or on the Great Lakes.

[19]            With respect, I am not persuaded that suggested limitation on the law of salvage is apt. There is no indication that Parliament intended as the Province urges, and I do not read s-s. 449(1) of the C.S.A. as limiting the traditional maritime salvage law as that has been extended to recovery of wrecked aircraft. Had that been intended Parliament would have amended the Federal Courts Act, and would have omitted provisions of the C.S.A., in particular s-s. 436(1). As I read s-s 449(1) it concerns the law of salvage, and the duty to render assistance in relation to vessels in distress, not those which have sunk, and extends that aspect of salvage law to aircraft on or over the sea or the Great Lakes. Those are not the circumstances here.

The significance of the ownership of the res

[20]            All parties acknowledge that the owner of the res at the time of the forced landing of the B-17 aircraft was the United States, operating through the U.S. Air Force. All parties also acknowledge correspondence to the plaintiff from the U.S. Department of the Air Force which advises that the Air Force "is no longer interested in this aircraft and the official policy ... provides that aircraft that crashed before November 19, 1961 and remain partially or wholly unrecovered are considered formally abandoned." The Air Force indicates that it neither maintains title to, nor has property interest in, the aircraft.

[21]            The plaintiff urges that the letter, while helpful, may not be an official statement of abandonment under U.S. law, but I am satisfied for purposes of these proceedings concerning possible salvage rights, that the original owner has abandoned the res and any claim to title in it. The res is derelict and subject to salvage claims. Whether the claim of the original owner may be revived if there is successful salvage of the res need not be determined here.

[22]            The Province claims ownership and title to the res now located and abandoned on Crown land, and further, that as an archaeological object under provincial statutory law, property in the aircraft is vested in the Crown Provincial, whether or not it is in possession of the Crown. The plaintiff urges the res does not constitute an archaeological object, and it disputes the historic significance for the Province of this res which had no known ties to Newfoundland, apart from any possible refueling stops until, by accident it was forced to land on the ice at Lake Dyke whence it has not previously been recovered but has lain derelict.

[23]            The Province's claim to ownership of the res may or not ultimately be accepted or affirmed. It is unnecessary to resolve the matter of ownership at this stage, for whoever the owner may ultimately be determined to be, the owner cannot ordinarily preclude salvage of the res if that is considered derelict.

[24]            In Ontario v. Mar-Dive Corp. 141 D.L.R. (4^th) 577 20 O.T.C. 81 (Ont, Ct. Justice), the Province of Ontario, claiming title to an abandoned derelict vessel lost in Lake Erie in 1852 and found embedded in silt at the bottom of the lake within Canadian waters, was upheld in its claim against parties claiming to be salvors under a judgment of the Court of California. That judment was not recognized or given effect by the Ontario Court. While the Court found that the party claiming did not establish that they qualified as salvors, the decision turned primarily on the refusal to recognize the judgment of the California Court.

The plaintiff's salvage claim

[25]            Under traditional maritime law a valid salvage claim gives rise to a right in rem against the res that is saved. The res must be in peril at the time the salvage efforts are made, by a volunteer, i.e., a party with no obligation by contract or employment, or because of ownership, to recover the res. Generally, apart from salvage efforts under contract which may provide otherwise , the salvage effort must be successful in the sense that the res or part thereof is saved; otherwise the salvor may recover nothing. The adage "no cure, no pay" applies to any claim by a salvor, traditionally and under the international convention.

[26]            Under maritime law and the C.S.A. a salvor in possession of a wrecked aircraft is responsible to deliver possession to the receiver of wrecks, unless the Minister dispenses with that step. The receiver, if necessary under direction of this Court, is to transfer the property to the owner, upon payment by the latter of a reasonable salvage claim and any fees or costs incurred by the receiver. If the owner does not claim the res or does not pay the salvage claim and fees, the receiver may sell the res and the proceeds go first toward satisfaction of the fees and any salvage claim (see generally Part VI, C.S.A.). Thus, the ultimate limit of a salvage claim is, in essence, about the value of the res at a sale.

[27]            In my opinion the evidence supports the conclusion that the plaintiff is a volunteer, with no obligation or liability to seek recovery of the res. Further, it is my opinion that the res is in peril. The Province urges the evidence does not support that conclusion, primarily as I understand it, because the wreck has not yet deteriorated beyond the state where there would be any interest in its recovery. Yet its continuing deterioration, at some unpredictable time in future, will preclude possibilities of recovery and salvage of the res. In sum, while peril may not be imminent, it is inevitable. In my opinion, the res at this time is subject to efforts for its recovery and ultimately a claim for salvage if it is recovered in whole on in part.

[28]            Nevertheless, I am not satisfied that the plaintiff is in possession of the res at this stage, though it claims to be a salvor in possession of the res. It will be, in relation to the whole or any portion of the res that is recovered, but until recovery it cannot be the salvor and it does not have any claim in rem, the basic claim of a salvor, upon the res. Until then the plaintiff does not have a valid salvage claim.

[29]            The plaintiff's claim to possession of the res is based on the circumstances of the wreck and the substantial efforts of the plaintiff to identify, locate, and examine the aircraft, underwater, and, except for its exact location, to make publicly known its success in finding the res and its plans to recover it. It is urged that in the circumstances this constitutes constructive possession, the plaintiff having done all that it could prior to mounting the substantial effort necessary to recover the res. It is urged that even if the plaintiff's efforts are not found to give rise to a possessory lien, physical possession is not required for enforcement of a maritime lien or a statutory lien of the plaintiff as salvor. I am not persuaded that the plaintiff is a salvor with a maritime lien, or a statutory lien under the C.S.A., in this case. Here there is no actual possession, and constructive possession upon which the plaintiff relies rests only upon preliminary efforts, admittedly somewhat extensive, to find, examine and document the res, but all prior to continuing action at the site to recover it.

[30]            In the Tubantia (1924), 18 LI1c.1.Rep. 158, the Admiralty Division of the U.K. High Court upheld the plaintiff's right to a limited declaration that, without prejudice to the rights, if any, of the Crown or of third parties other than the defendants, plaintiffs were entitled to possession, and to an injunction to preclude interference with the plaintiff's efforts to salvage a derelict vessel lying under water. In Morris v. Lyonesse Salvage Company Ltd., [1970] 2 LI1. Rep. 59, the U.K. High Court declined to extend an interlocutory injunction originally granted, for a brief time, to enjoin interference in the operations of a party actively engaged in seeking to recover wrecks of vessels lying underwater, because any jeopardy to the plaintiff's salvage operations could be adequately compensated in damages. In that case Justice Dunn said (at p. 61):

In order to establish that they are in possession of a derelict salvors must show, firstly, that they have animus possidendi, and, secondly, that they have exercised such use and occupation as is reasonably practicable having regard to the subject-mater of the derelict, its location, and the practice of salvors.

[31]            In those cases, here relied upon by the plaintiff, the party claiming as salvor had commenced and was continuing action to recover a wreck or portions of a wreck at the time its claim to possession was recognized expressly or implicitly, in priority to the claim of a second party whose efforts followed upon those of the recognized party in possession. In this case the plaintiff's actions have not been continuing at the site of the wreck. Until its efforts at the site are initiated and continuing it cannot be said, in my opinion, that its use and occupation is as reasonably practicable as is possible of the derelict in its location. Currently, the plaintiff has no greater claim to possession than the Province or any third party.

[32]            Nevertheless its interests as first finder, if challenged, may be found sufficient, for a reasonable time, to permit recovery of the res. Those interests may be found to warrant protection by injunction or damages against any third party who would seek to interfere with its efforts, or to initiate a second effort to salvage the wreck.

Conclusions - the appropriate remedies in this case

[33]            Under Rule 216 (3) of the Federal Court Rules, 1998 where the Court decides that there is a genuine issue with respect to a claim or defence, the Court may nevertheless grant summary judgment either on an issue or generally if it is able on the evidence to find the facts necessary to decide the questions of fact and law.

[34]            The plaintiff's motion for summary judgment does raise genuine issues on which, in my opinion, the evidence supports findings of fact and law raised by the plaintiff's motion for some forms of relief.

[35]            I declare that the Court has jurisdiction in accord with s. 22 of the Federal Court Act over the plaintiff's claim as salvor of the defendant res. I am prepared also to declare the Court's jurisdiction to protect the res and the plaintiff's priority rights as finder of the wrecked aircraft.

[36]            On the other hand, I am not prepared to grant the other specific forms of relief sought by the plaintiff, that is, declarations that the plaintiff now has a maritime lien as salvor, that the plaintiff is entitled to entire and absolute possession and as a result others are enjoined from interfering with its salvage rights. Relief of those sorts requested would be considered only after some salvage effort is successful in recovery of all or part of the res. Finally, I agree with submissions of the Attorney General of Canada that the plaintiff is not entitled to a full and liberal salvage award from the receiver of wrecks, for that officer is not liable to pay a salvage claim except from funds recovered from the owner of salvaged res, or from sale of the res if it not be claimed.

[37]            I indicate also my sense of the ultimate position of the plaintiff if it does recover the res.     If the res is rescued by the plaintiff and in its actual possession as salvor, the plaintiff would be expected to transfer possession to or as the receiver of wrecks directs, subject to the plaintiff's claim in rem. Upon the owner of the res paying a reasonable salvage claim of the plaintiff to the receiver and the latter's payment of the claim to the plaintiff, the in rem claim of the plaintiff as salvor would be discharged. If no party claims as owner of the recovered res from the receiver of wrecks, or if the owner claims the res but does not pay a reasonable salvage claim of the plaintiff, the receiver may sell the res as provided under the C.S.A. and pay a reasonable salvage claim from proceeds of the sale so far as those are sufficient. It may be that the receiver may transfer possession and title of the res to the plaintiff as salvor, in satisfaction of its claim in rem.

[38]            While the matter was not raised in these proceedings, the Court urges that if salvage plans are to be carried out the plaintiff, it should consult with the province on appropriate arrangements to permit salvage of the aircraft and recognition of their respective interests in its recovery.

[39]            Both the plaintiff and the Province requested costs on this motion. In my opinion, recognizing that the issues are novel in Canadian law and that success on the motion is divided so that the plaintiff does not have judgment for all of the relief it sought, the interests of justice are best served if each party bears its own costs of the summary judgment motion.

                              ORDER AND JUDGMENT

[40]            For the record I note that some months after this matter was heard by me, on March 20, 2004 I ceased to hold office in accord with the Judges Act. Pursuant to s-s. 45(1) of the Federal Court Act, I was requested by the Chief Justice to give judgment in this matter. I was also named by the Chief Justice to be a Deputy Judge of the Court in accord with s-s. 10 (1.1) of the Federal Court Act, in which capacity I have the powers of a judge of the Court. I exercise my authority by signing these Reasons and Judgment, as Deputy Judge.

THIS COURT ORDERS AND ADJUDGES THAT:

[1]                The plaintiff's motion for summary judgment is allowed in part, and the Court adjudges that:                                                                                                                                                      

            1.         This Court has jurisdiction in accord with s. 22 of the Federal Courts Act over a claim for salvage of the defendant res , the wrecked and abandoned Boeing SB-17G Aircraft, Serial No. 44-83790, its apparel and cargo.

            2.         The Court has jurisdiction to protect the res, now arrested under the Court's process and, in the interests of facilitating salvage of the res, it may protect the plaintiff's priority rights as finder of the res to seek to recover and to take into its possession the whole or parts of the res. That relief, upon application by the plaintiff, might be directed against any named party or against a nominal defendant, John Doe, and any others who may be served or may have notice of an order prohibiting others from seeking to salvage part or all of the res, assuming that the plaintiff's interests in salvage of the res would be irreparably harmed without such relief.

3.          The plaintiff's claims for declaratory relief, i.e., to recognize that it now is a salvor with a maritime lien, that as salvor it has entire and absolute possession of the wrecked aircraft for purposes of its salvage effort and that all others are enjoined from interfering with the plaintiff's exclusive salvage rights, are hereby dismissed. Also dismissed in a claim to a declaration that the plaintiff salvor is entitled to a full and liberal salvage award from the receiver of wrecks if title to the res be unclaimed by its owners who is not prepared to pay a reasonable salvage award.

[2]                Each party shall bear its own costs of the motion.

"W. Andrew MacKay"

Deputy Judge

                                     FEDERAL COURT

                              SOLICITORS OF RECORD

DOCKET:                  T-217-02

STYLE OF CAUSE: Brooks Aviation , Inc.

v.

The THE WRECKED AND ABANDONED BOEING SB-17G AIRCRAFT, SERIAL NO. 44-83790, ITS APPAREL AND CARGO and the OWNERS, CHARTERERS AND ALL OTHERS INTERESTED IN THE WRECKED AND ABANDONED BOEING SB-17G AIRCRAFT, ITS APPAREL AND CARGO

PLACE OF HEARING:                                 St. John's, Newfoundland

DATE OF HEARING:                                   June 24, 2003

REASONS FOR ORDER,

ORDER AND JUDGMENT BY:    The Honourable Mr. Justice MacKay

DATED:                     May 17, 2004

APPEARANCES:

Cecily Strickland                                               FOR THE PLAINTIFF

Rolf Pritchard                                                    FOR THE DEFENDANTS

SOLICITORS OF RECORD:

                                                                        FOR THE PLAINTIFF

Stewart, McKelvey Stirling Scales

St. John's, Newfoundland and Labrador

FOR THE DEFENDANTS

Government of Newfoundland

and Labrador

Department of Justice

St. John's, Newfoundland

Attorney General of Canada

Department of Justice

Halifax, Nova Scotia.