Incremona Salernomarmi Affini Sicialiani v. Castor (ship), 2001 FCT 1330

Date: 20011204

Docket: T-2330-00

Neutral citation: 2001 FCT 1330

                                                       Admiralty Action in Rem

                                                              Simplified Action

BETWEEN:

                INCREMONA-SALERNO MARMI AFFINI SICILIANI (I.S.M.A.S.) s.n.c.

and DANZAS (CANADA) LIMITED

                                                                                                                                            Plaintiffs

                                                                           and

                   THE OWNERS AND ALL OTHERS INTERESTED IN THE SHIPS

                                                 "CASTOR" and "KATSURAGI",

                                     THE SHIPS "CASTOR" and "KATSURAGI",

                                       HAPAG-LLOYD CONTAINER LINE, GmbH

                 ATLAS TRAMPSHIP REEDEREI GmbH & Co. m.s. "CASTOR" KG

                                            and TAMA LAKE SHIP HOLDING SA

                                                                                                                                      Defendants

                                                        REASONS FOR ORDER

GIBSON J.:

Introduction

[1]                 By agreement among themselves, the parties seek a declaration as to whether subsection 46(1) of the Marine Liability Act ^[1], which came into force on the 8^th of August, 2001, applies on the facts of this matter, and related procedural relief. That subsection reads as follows:

More will be said later in these reasons about the motions before the Court that the parties rely on as the vehicles to support such a declaration.

Background

[2]                 In this proceeding, the plaintiffs claim damages and other relief against the defendants arising out of the shipment in a container of a consignment of polished granite from the port of Catania, Italy on the vessel "CASTOR" to the port of Marsaxlokk, Malta, where the container was transhipped to the vessel "KATSURAGI" for carriage to Halifax, Nova Scotia, and from there by train to Surrey, British Columbia. The plaintiffs' claim is based in part in contract evidenced by a bill of lading dated the 21^st of December, 1999 at Milan, Italy (the "Bill of Lading").

[3]                 The CASTOR left Catania, Italy on the 21^st of December, 1999 with the container of polished marble on board. It discharged that container at Marsaxlokk, Malta the next day. On the 27^th of the same month, the container was loaded on board the KATSURAGI. It was discharged from the KATSURAGI at Halifax, Nova Scotia on the 4^th of January , 2000. It was transported from Halifax to Vancouver by rail, leaving Halifax on the 4^th of January, 2000 and arriving on the 11^th of January.

[4]                 The plaintiffs allege that the polished granite cargo was damaged in shipment.

[5]                 The plaintiffs filed their statement of claim in this Court on the 15^th of December, 2000, shortly before the expiration of the limitation period in respect of their claim.

[6]                 The KATSURAGI defendants, Hapag-Lloyd Container Line, GmbH, Tama Lake Ship Holding SA, the owners and all others interested in the ship KATSURAGI and the ship itself, filed a motion for a stay of proceedings in this Court on the 2^nd of February, 2001. The remaining defendants, the CASTOR defendants, filed a similar motion on the 26^th of March 2001. The requested stay is based on a jurisdiction clause in the bill of lading to the following effect:

Except as otherwise provided specifically herein any claim or dispute arising under this Bill of Lading shall be governed by the law of the Federal Republic of Germany and determined in the Hamburg courts to the exclusion of the jurisdiction of the courts of any other place. In case the Carrier intends to sue the Merchant, the Carrier has also the option to file suit at the Merchant's place of business. In the event this clause is inapplicable under local law, then jurisdiction and choice of law lie in either the Port of loading or the Port of Discharge at Carrier's option.

[7]                 For reasons which I consider to be irrelevant for present purposes, neither of the motions for a stay of proceedings was heard nor determined, either before the date on which section 46 of the Marine Liability Act came into force, or indeed, before the date on which I heard this matter. It is these motions that are now relied on as the vehicle to support the relief now sought. I was satisfied at the hearing before me that neither the Court nor any party would be inconvenienced or prejudiced by the somewhat unorthodox procedure advocated by the parties. Indeed, I was satisfied that adoption of the proposed procedure was consistent with the best interests of justice and the most expeditious and least expensive determination of this proceeding. In the result, I considered the relevant materials before the Court and the thoughtful presentations of counsel. These reasons follow.

Issue

[8]                 The sole issue before me was whether or not subsection 46(1) of the Marine Liability Act applies on the facts before me to effectively render moot the motions on behalf of the CASTOR defendants and the KATSURAGI defendants to stay this action.

[9]                 The stay motions are brought pursuant to subsection 50(1) of the Federal Court Act^[2]. That subsection reads as follows:

More particularly, the stay applications are brought pursuant to paragraph 50(1)(b). Put another way, the issue is whether subsection 46(1) of the Marine Liability Act in effect limits the discretion of this Court under paragraph 50(1)(b) of the Federal Court Act in its determination of where it is in the interest of justice that a proceeding be stayed, and does so retroactively or retrospectively. Clearly, subsection 46(1) does limit the discretion of this Court to stay proceedings in the interest of justice where there is a jurisdiction clause, such as on the facts before me, in a bill of lading. But whether or not that limitation of this Court's discretion applies retroactively or retrospectively is, at least in the opinion of this judge, not equally clear and certainly counsel appearing before me adopted different points of view on that question.

Analysis

[10]            In Gustavson Drilling (1964) Ltd. v. The Minister of National Revenue^[3], Mr Justice Dickson, as he then was, for the majority, wrote at page 279:

The general rule is that statutes are not to be construed as having retrospective operation unless such a construction is expressly or by necessary implication required by the language of the Act.

[11]            Mr. Justice Dickson further commented at page 282 on the issue of interference or non-interference with vested rights. He wrote:

The rule is that a statue should not be given a construction that would impair existing rights as regards person or property unless the language in which it is couched requires such a construction ...                                                                                                                    [citation omitted]

[12]            Mr. Justice Dickson specifically commented on the concept of "retrospectivity" rather than "retroactivity", the two terms being distinguished, albeit sometimes in a manner that muddies the already somewhat arcane subject of statutory interpretation. The distinction between the two terms was emphasized in the second edition of Driedger on the Construction of Statutes ^[4] where he defined "retroactive" as describing legislation that changes the past legal consequences of completed transactions, and "retrospective" as describing legislation that changes the future consequences of completed transactions by imposing new liabilities or obligations.

[13]            The distinction was effectively abandoned in the third edition of Driedger on the Construction of Statutes,^[5] edited by Professor Ruth Sullivan. There the learned author wrote:

Some years ago, in an effort at refinement, a distinction was drawn between "retroactive legislation", defined as legislation that changes the past legal consequences of completed transactions, and "retrospective legislation", defined as legislation that changes the future consequences of completed transactions by imposing new liabilities or obligations. The legislature was presumed to eschew both retroactive and retrospective applications, both of which were distinguished from interference with vested rights, a less serious matter.

Although this analysis has been adopted by courts on many occasions, it is not always clearly understood and the result has been a growing confusion around the term "retrospective" in Canadian case law. The term is used in three different ways: (1) as a synonym for "retroactive", to describe legislation that applies to past facts; (2) in the special sense explained above, to describe legislation that attaches new prejudicial consequences to closed transactions; and (3) most frequently perhaps, to describe legislation that if applied immediately and generally would attach new prejudicial consequences to ongoing facts. Because of the confusion around the term "retrospective", it is avoided here.                                                                      [citation omitted]

I am satisfied that, on the facts of this matter, the distinction is not of great significance. To the extent that there is a difference of significance, I am satisfied that we are here speaking of retrospectivity in the third sense described in the foregoing quotation. In what follows, I adopt the term "retrospective" in that sense, rather than the term "retroactive".

[14]            Are there any words in the Marine Liability Act that counter the general common law rule against retrospective application? The general rule against construing statutes to have retrospective application or operation is a presumption, albeit a strong one. In his treatise on statutory interpretation^[6], Professor Côté posits that legislative intent must be considered prior to any presumptions, which are effectively guideposts of interpretation and which can be set aside. He notes, however, at page 123, that:

If the text is silent, or there is insufficient information within the enactment to determine legislative intent, the judge may rely on certain presumptions. Where there is a choice between retroactivity and prospective operation, the rule against retroactivity favours the latter.

On its face, the Marine Liability Act is silent on its application, with one exception. Section 108 in Part 8 reads as follows:

108. Part 4 applies in respect of

(a) carriage by water under contracts of carriage entered into after that Part comes into force; and

(b) carriage by water, otherwise than under contracts of carriage, commencing after that Part comes into force.

108. La partie 4 de la présente loi s'applique:

(a) au transport par eau sous le régime d'un contrat de transport conclu après son entrée en vigueur;

(b) faute de contrat de transport, au transport par eau qui débute après la date de son entrée en vigueur.

Section 46 is in Part 5, not Part 4, and thus section 108 is of no direct assistance.

[15]            Counsel for the plaintiffs submits that, since Part 4 of the Marine Liability Act is the only Part with an explicit restriction of its application, namely, to carriage by water, under contract or otherwise, entered into or commencing after the Part comes into force, I should conclude that no other section or Part of the Act is so limited. Put another way, counsel urges that since section 46 is not in Part 4, it should apply to the parties here before the Court from the moment the Act came into force, that is to say the 8^th of August, 2001, notwithstanding that by then the bill of lading containing the jurisdiction clause here at issue had come into effect many months earlier. I reject this submission. I am not satisfied that section 108 can or should be read to effectively bolster or create a legislative intention of retrospectivity with respect to all substantive provisions of the Marine Liability Act except those contained in Part 4. Part 4 relates to the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974, as amended by the Protocol of 1990 to amend that Convention which Protocol is set out in Part 1 of Schedule 2 to the Marine Liability Act. The Act, through Part 4, among other things, expands the meaning of "contract of carriage" in the Convention and, I am satisfied, is unique in this regard as against other provisions of the Act.

[16]            I conclude that section 108 of the Marine Liability Act simply cannot be relied on as an indicator of Parliament's intention with regard to the application of other Parts of the Act.

[17]            The Marine Liability Act being otherwise silent as to the application of its provisions, I am satisfied that it is for this Court to determine the "temporal" application of subsection 46(1) in accordance with generally accepted principles. Those principles are enunciated in Professor Côté's analysis at pages 128 to 130 of the third edition of his text and are adopted by Professor Sullivan in the 3^rd edition of Driedger at pages 514 and 515: first, the Court must identify the relevant facts that trigger the statute's application; second, the Court must situate the facts in time; and third, the Court must apply the statute. If facts that occur subsequent to the effective date of the statute are essential for it to apply, then there will be no retroactivity or retrospectivity.

[18]            Counsel for the plaintiffs submits that the applications for stays of proceedings and the disposition of those applications are relevant facts necessary for subsection 46(1) of the Marine Liability Act to apply with respect to this proceeding. Since the applications for stays were not disposed of on the coming into force of the Marine Liability Act, and remain undisposed of, there remained relevant facts situated in time after the coming into force of the Marine Liability Act and therefore there is no retroactive or retrospective effect in applying subsection 46(1) here.

[19]            In essence, counsel urges that the issue of retroactivity or retrospectivity is a "red herring"; subsection 46(1) applies in any event without reference to retroactivity or retrospectivity. By contrast, counsel for the defendants urge that the relevant facts that might trigger the application of the Marine Liability Act all centered around the moment of the alleged loss, damages or wrongdoing, or, put another way, the moment when the defendants allegedly became civilly liable. Counsel for the defendants urge that all subsequent facts or events merely relate to how the parties will dispose of the issues surrounding liability.

[20]            I am satisfied that all of the relevant facts or events surrounding or giving rise to the claim occurred or commenced many months before the Marine Liability Act came into force. As earlier noted, the polished granite shipment arrived at Vancouver on the 11^th of January, 2000, where damage was first presumably noted. The statement of claim herein was issued on the 15^th of December, 2000. The KATSURAGI defendants filed their motion for a stay of proceedings on the 2^nd of February, 2001. The CASTOR defendants filed their equivalent motion on the 26^th of March, 2001.

[21]            I concur with the position advanced on behalf of the plaintiffs. I conclude that the motions for a stay of proceedings filed by the KATSURAGI and the CASTOR defendants are relevant facts that are continuing in nature; that is to say, they represent situations that consist of one or more facts that endure over a period of time, such time extending to the time at which they are ultimately disposed of. They were not ultimately disposed of when the Marine Liability Act came into force.

[22]            At page 515 of the 3^rd edition of Driedger, supra, Professor Sullivan notes:

In the case of a provision that attaches legal consequences to a continuing fact, such as a relationship or a state of affairs, the provision is not retroactive unless the relationship or state of affairs has ended before commencement. In the case of a provision that attaches legal consequences to successive facts, the provision is not retroactive unless the final fact in the series has ended before commencement.                                    

Against the foregoing, if the applications for a stay are considered to be continuing facts, they are continuing facts that have not ended before the coming into force of the Marine Liability Act. If they are considered to be a series of successive facts, they constitute a series in which the final fact had not ended or been accomplished before the Act came into force.

[23]            Based upon the foregoing brief analysis, I conclude that subsection 46(1) of the Marine Liability Act applies on the facts of this matter and that it applies neither retroactively nor retrospectively.

[24]            In light of submissions of counsel, despite my view that my foregoing conclusion is dispositive, I will briefly review the issue of the presumption against interference with vested rights reflected in the Gustavson Drilling decision of the Supreme Court of Canada, as quoted in paragraph [11] above. Mr. Justice Dickson continues in the same paragraph at page 282 of the reported decision from which the earlier quotation is drawn in the following words:

The presumption that vested rights are not affected unless the intention of the legislature is clear applies whether the legislation is retrospective or prospective in operation. A prospective enactment may be bad if it affects vested rights and does not do so in unambiguous terms.

To somewhat the same effect, see Martin v. Perrie^[7] and Angus v. Sun Alliance Insurance Co.^[8] At page 267 of the reasons in Angus, Mr. Justice LaForest adopts Professor Côté's view that since a victim's rights have crystallized the moment of the wrongdoing, then no subsequent statute can either reduce or extend those rights.

[25]            I conclude that the simple answer to the issue of "vested" or "crystallized" rights on the facts of this matter is that rights under the jurisdiction clause of the bill of lading simply were not vested or crystallized at the time subsection 46(1) of the Marine Liability Act came into force. The KATSURAGI and CASTOR defendants appear to have recognized this fact when this action was brought and they felt compelled to seek an order staying this proceeding. As noted earlier in these reasons, a stay of this proceeding under subsection 50(1) of the Federal Court Act is a discretionary relief. In the absence of the exercise of that discretion in favour of the KATSURAGI and CASTOR defendants, and such an exercise of discretion has not yet taken place, as against this proceeding in this Court, the rights of the KATSURAGI and CASTOR defendants under the jurisdiction clause in bill of lading have neither vested nor crystallized.

CONCLUSION

[26]            In the result, I conclude that subsection 46(1) of the Marine Liability Act applies on the facts of this matter. In reaching this conclusion, I further conclude that its application on the facts of this matter is neither retroactive nor retrospective, nor is it an interference with vested or crystallized rights. If it can be said that the KATSURAGI and CASTOR defendants have suffered a prejudice as a result of my conclusions, this Court need accept no responsibility. Motions for a stay in this Court were filed months in advance of the coming into force of the Marine Liability Act. The date of the coming into force of the Marine Liability Act was known well in advance of that date. Only the KATSURAGI and CASTOR defendants and their counsel know why those motions were not disposed of prior to the coming into force of the Act. If they had been, I can only presume that the hearing giving rise to these reasons and these reasons would have been obviated.

[27]            An Order will go declaring that subsection 46(1) of the Marine Liability Act applies to these proceedings as instituted. Further, my Order will provide that the defendants shall, within thirty (30) days of the date of my Order, either file their statements of defence or set down their applications for a stay of proceedings in this action. Finally, costs of the hearing before me will be ordered payable by the defendants to the plaintiffs in any event of the cause.

__________________________

     J. F.C.C.

Ottawa, Ontario

December 4, 2001

FEDERAL COURT OF CANADA

TRIAL DIVISION

NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:                                    T-2330-00

STYLE OF CAUSE:                   INCREMONA-SALERNO MARMI AFFILAI SICILIANI AND OTHERS v. THE OWNERS AND ALL OTHERS INTERESTED IN THE SHIPS "CASTOR" AND "KATSURAGI" AND OTHERS

PLACE OF HEARING:              VANCOUVER, B.C.

DATE OF HEARING:                 NOVEMBER 19, 2001

REASONS FOR:                        THE HONOURABLE MR. JUSTICE GIBSON

DATED:                                       DECEMBER 4, 2001

APPEARANCES:

MR. JOHN W. BROMLEY                                                FOR PLAINTIFF

MR. PETER G. BERNARD Q.C.     FOR DEFENDANT MR. DOUGLAS G. MORRISON        FOR DEFENDANT SOLICITORS OF RECORD:

BROMLEY CHAPELSKI

VANCOUVER. B.C.                                                       FOR PLAINTIFF

CAMPNEY & MURPHY

VANCOUVER, B.C.                                                       FOR DEFENDANT

BULL, HOUSSER & TUPPER

VANCOUVER, B.C.                                                       FOR DEFENDANT