Docket: T-772-14
Citation:
2015 FC 558
Ottawa, Ontario, April 29, 2015
PRESENT: Madam Prothonotary Mireille Tabib
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ADMIRALTY ACTION IN REM AGAINST
THE VESSEL “CMA CGM FLORIDA”
AND IN PERSONAM AGAINST
THE OWNERS, CHARTERERS AND
ALL OTHERS INTERESTED IN
THE VESSEL “CMA CGM FLORIDA” ET AL.
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BETWEEN:
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ALLCHEM INDUSTRIES INDUSTRIAL;
HAILIDE AMERICA INC.;
HOUGHTON MIFFIN HARCOURT;
BEL INCORPORATED;
CHAUVET & SONS INC.;
BADIA SPICES, INC.;
OMNI GEAR;
TO COMERICA BANK;
EASTMAN CHEMICAL COMPANY
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Plaintiffs
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and
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THE VESSEL “CMA CGM FLORIDA”;
THE OWNERS, CHARTERERS AND ALL OTHERS INTERESTED IN THE VESSEL
“CMA CGM FLORIDA”;
CMA CGM S.A.;
BDP TRANSPORT INC.;
HECNY TRANSPORT (CANADA) LTÉE;
C.H. ROBINSON INTERNATIONAL INC.;
TOPOCEAN CONSOLIDATED SERVICE INC.;
CHINA SHIPPING CONTAINER LINES (HONG KONG) CO., LTD;
BRILLANT GLOBE LOGISTICS INC.;
DSV OCEAN TRANSPORT;
SEA GLOBAL SCM LTD
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Defendants
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ORDER AND REASONS
[1]
The Plaintiffs are all owners or persons
interested in various cargoes that were carried on board the vessel “CMA CGM
Florida” when that vessel was involved in a collision at sea. The Plaintiffs,
through this action, seek to recover for the damage allegedly caused to the
cargoes as a result of the collision and to be indemnified for any general
average or salvage contributions they may be required to make.
[2]
All of the cargoes were loaded on board the
vessel in China or in Thailand, and all were destined to be unloaded and
delivered in various locations in the United States. The transportation of the
cargoes on this particular vessel was booked through various freight forwarders
or common carriers. The Defendants are all of those freight forwarders or
carriers, as well as the owners of the vessel itself. Other than the
Plaintiff’s general allegation to the effect that all of the Defendants “carry on business in Canada”, there is nothing to
connect the contracts of carriage, the voyage, the Plaintiffs, the cargoes or
the facts giving rise to the claim to Canada. The majority of the Defendants
have made motions to stay proceedings on the basis of forum non conveniens.
These motions have, on consent, been adjourned.
[3]
The moving Defendant, Topocean Consolidation
Service Inc. (“Topocean”) has, in addition, moved for a declaration that
service of the Statement of Claim was not validly made upon it. The Plaintiffs
have opposed Topocean’s motion, but have also brought a cross-motion, de
bene esse, to extend the time for serving the Statement of Claim or to
authorize substitutional service on Topocean’s attorneys in Canada. For the
following reasons, I find that service was validly made on Topocean, and
therefore, I will not rule on the Plaintiffs’ cross-motion.
Motion to contest service
Topocean’s position:
[4]
The Plaintiffs first attempted to serve the
Statement of Claim on April 3, 2014 at 800-211 boul. Stewart Graham in
Montreal. However, the bailiff reported that the premises were not occupied by
Topocean but by Garda Sécurité. The Plaintiffs then directed a process server
to serve Topocean at “c/o Manitoulin Global Forwarding”
at 7035 Ordan Drive, Mississauga, Ontario. Service was accepted on April
9, 2014 by Vivian, “an adult person who appeared to be
in control or management” of that place of business at the time.
[5]
Topocean’s evidence it to the effect that it
does use the services of Manitoulin “as agent” for some of its shipments that
depart from or arrive in Canada, but that Manitoulin was not involved in any
capacity in relation to the cargo on board the “CMA CGM Florida”, or in
relation to any services ever rendered by Topocean to the Plaintiffs or to the
receivers of the cargo. Topocean’s evidence is also to the effect that
Manitoulin’s Assistant Manager forwarded the Statement of Claim served at its
premises to Topocean by messenger two days after receiving it, addressed to “Tammy” or “Kenny Tam”.
However, Topocean states that it did not receive the package, that Kenny Tam no
longer works for it and that the package or its whereabouts can no longer be
traced. According to Topocean, it only became aware of the Canadian proceedings
some 5 months later, upon which it promptly brought the present motion to
contest service.
[6]
On the basis of the above evidence, Topocean
argues that service on it cannot have properly been effected in Canada pursuant
to Rule 130(1)(a)(ii) of the Federal Courts Rules, SOR/98‑106,
because the addresses in Montreal and Toronto are not Topocean’s places of
business and because Manitoulin is not a “branch or agency” of Topocean.
Topocean further argues that service cannot validly have been effected pursuant
to Rule 135 because Topocean did not make use of Manitoulin’s services in
connection with the transportation of the cargo at issue.
Plaintiffs’ position:
[7]
The Plaintiffs essentially concede that Rule 135
is not applicable in this instance. Rule 135 allows service in Canada on a
person who is not necessarily an “agent” of a non-resident defendant, but whose
services the defendant regularly uses in the course of its business and
whose services were used in connection with the transaction giving rise to the
proceedings. It is very clear here that Manitoulin’s services were not used by
Topocean in connection with the carriage of the cargo nor with the contract
pursuant to which it was carried.
[8]
The Plaintiff’s position, however, is to the
effect that Manitoulin is “a branch or agency in
Canada” of Topocean, upon which it validly effected service in
accordance with Rule 130(1). The Plaintiff’s argument is based on the fact that
it found the Montreal and the Toronto addresses, at which it respectively attempted
and effected service, on Topocean’s own website, specifically on the “Branch Directory” page of the “Topocean Group” website
(https://www.topocean.com/BranchDirectory.htm, Exhibit “C” to the Affidavit of Audrey
Préfontaine). This page states that:
The Topocean Group operates a network of owned and agent offices
throughout the Asia Pacific. In those locations where Topocean has agents, they
are companies that have a proven track record within their respective
countries. Most Topocean agents have been within the Topocean Network for more
than five years.
[9]
The page goes on to provide a lengthy list of
physical addresses throughout Asia, the United States, Canada and Mexico. The
relevant entry is as follows:
CANADA
Topocean Canada
C/O
Manitoulin Global Forwarding
Toronto
Main Office
7035
Ordan Drive Mississauga
Ontario
L5T 1T1 Canada
Tel:
905 283 1600
Fax:
905 677 8938
Email:
globalinfo@topocean.com
[10]
The existence or accuracy of this webpage has
not been contested by Topocean.
Analysis:
[11]
The relevant parts of Rule 130(1) read as
follows:
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130. (1) Subject to subsection (2), personal service of a document
on a corporation is effected
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130. (1) Sous réserve du paragraphe (2), la signification à personne
d’un document à une personne morale s’effectue selon l’un des modes suivants
:
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(a) by
leaving the document
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a) par remise du document :
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(…)
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(…)
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(ii) with the
person apparently in charge, at the time of the service, of the head office
or of the branch or agency in Canada where the service is effected;
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(ii) à la personne
qui, au moment de la signification, semble être le responsable du siège
social ou de la succursale ou agence au Canada où la signification est
effectuée;
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(…)
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(…)
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(Subsection
130(2) concerns service on municipal corporations and is not relevant to this
analysis.)
[12]
There is no definition in the Rules as to what
constitutes a “branch or agency” for the purpose of Rule 130(1)(a)(ii),
and it does not appear that this Court has ever opined as to the exact scope of
that expression. The only case concerning the application of that expression of
which the Court is aware is Iscar Ltd v Karl Hertel GmbH, (1986) 10 CPR
(3d) 523, 5 FTR 292. The Court in that case found that a Canadian company who
acted as an exclusive distributor in Canada of a product manufactured by a
foreign company was not a branch or agency of the foreign company. The Court
considered that the Canadian company merely purchased and re-sold the product,
even if it did use the foreign company’s technical expertise and literature.
The Court did not otherwise attempt to define the term “branch or agency”.
[13]
The words “branch or agency” have been used in
provisions regulating service of judicial documents in several provinces and
these provisions have given rise to a significant body of jurisprudence. I
note, however, that where the expression “branch or
agency” is or was used in provincial statutes or rules of practice; it
is often followed by a provision defining what persons will be deemed an agent
of a non-resident corporation for the purpose of service. For example, former
Rule 11(2)(b) of the Rules of Court, 1990, BC Reg 221/90 read as
follows:
(2) Service of a document is effected on (…)
(b) a corporation by leaving a copy of the
document with the president, chairman, mayor, or other chief officer of the
corporation, or agent of the corporation or of any branch or agency of
the corporation in the Province and, for the purpose of serving a document
upon a corporation whose chief place of business is outside British Columbia, every
person who, within the Province, transacts or carries on any of the business
of, or any business for, that corporation shall be deemed its agent.
(Emphasis
mine)
[14]
Similar rules of practice were also found, inter
alia, in Ontario and New Brunswick.
Most decisions interpreting or applying these provisions are more concerned
with this deeming provision than with the interpretation of the expression “branch or agency”. Indeed, because the deeming
provision applies to corporations whose principal place of business is outside
the province, and because the jurisdiction of Superior Courts was traditionally
based on a defendant’s presence in their territorial jurisdiction, the reported
case law on whether a person is “an agent” for
the purpose of service in effect goes to the more fundamental question of
whether a foreign defendant is sufficiently “present” in the jurisdiction
through that agent for the Court to have jurisdiction over it, as discussed in Central
Trust Co of China et al v Dolphin Steamship Co Ltd, [1950] 2 WWR 516, at para 34 and 36.
[15]
The Federal Courts Rules do not contain a
deeming provision. Further, as determined in Santa Maria Shipowning and
Trading Co SA v Hawker Industries Ltd, [1976] 2 FC
325, the jurisdiction of the Federal Court in admiralty matters is not territorially
limited. It can be exercised on a foreigner, based on service out of the
jurisdiction or on substitutional service. Given those distinctions,
jurisprudence from other Canadian courts as to what constitutes a “branch or agency” for the purpose of service
should be considered with caution when interpreting Rule 131(a)(ii). Indeed, I
note the very interesting historical analysis and discussion of Egbert J. of
the Alberta Supreme Court in Alberta Pulpwood Exporting Co v Falls Paper &
Power Co, (1954) 11 W.W.R. (N.S.) 97, as to the applicability of the
English and Ontario case law in Alberta, given the absence in the Alberta Rules
of Court of the deeming provision mentioned above.
[16]
That said, because the criteria developed in
Canadian case law for a person to be an agent for the purpose of service are
stringent enough to also fix that agent’s principal with residency in a
province for jurisdictional purposes, I am satisfied that a person who meets
these criteria would also meet the criteria for service under Rule 130(1)(a)(ii).
Having found, as discussed below, that Manitoulin meets the criteria developed
under these provincial statutes, I do not need to determine the minimal test
that a person must meet to qualify as a “branch or agency” under the Federal
Courts Rules.
[17]
The Ontario Court of Appeal in Murphy v
Phoenix Bridge Company et al, 18 PR 495, cited with approval by the New
Brunswick Court of Queen’s Bench in Simmental Farms (NB) Ltd v Maritime Beef
Testing Society, (1997) 18 NBR (2d) 343, and the British Columbia Court of
Appeal in Central Trust Co of China et al v Dolphin Steamship Co Ltd,
above, interpreted the deeming provision as follows:
I think what is meant by “a person who
transacts or carries on any of the business of, or any business for, a corporation,”
is, at the least, some person who is an agent of the corporation, who transacts
or carries on here, or controls or manages for them here, some part of the
business which the corporation profess to do and for which they were
incorporated.
[18]
In Canada Alliance Assurance Co v Canadian
Imperial Bank of Commerce, (1974) 3 OR (2d) 70, 44 DLR (3d) 486, the Court
adopted the three part test first set out in Ingersoll Packing Co Limited v
New York Central and Hudson River R.R. Co., (1918) 42 OLR 330 as to what
carrying on a business in the province requires:
a) the business has been carried on for a sufficiently substantial
period of time;
b) the acts in carrying on business have been done at a fixed place of
business; and
c) the acts are carried out by a person who carries out this business
for it in the jurisdiction, i.e., its agent.
[19]
The Court went on to describe that agent as
follows:
33 In my
opinion, the judgment of Sidney Smith, J.A., provides a correct analysis of the
relevant Ontario law. Although certain of the cases, as I have indicated, have
stated that the Ontario Rule is broader than that of England, the cases
generally suggest that this greater breath is more apparent than real, for,
with the exception of the Ingersoll case,
they are unanimous in the view that "agent" means, as in England,
"[one] who transacts or carries on here ... some part of the business
which the corporation profess[es] to do ...". Further, as noted above,
it seems clear that the "business" carried on by the agent must be an
"integral part" of the corporation's business: Droeske
et al. v. Champlain Coach Lines Inc., supra; it will not suffice if it is
something merely "incidental" to a business carried on and transacted
elsewhere: Appel
v. Anchor Ins. & Investment Corp. Ltd., supra. Finally, the person
served should be one "notice to whom would be notice to the corporation,
or whose duties would cast it upon him to bring it to their notice": Murphy
v. Phoenix Bridge Co., supra, at p. 500.
(Emphasis
mine)
[20]
By its own admission, Topocean does use
Manitoulin as its agent for shipments that have a Canadian connection,
that is, that depart or arrive in Canada. It is undisputed that Topocean’s
business is to organize and carry shipments worldwide. As such, it is clear
that Manitoulin carries on in Canada some integral part of the business Topocean
professes to do. The fact that it did not act in this capacity for the shipment
giving rise to the action does not detract from the fact that Topocean
otherwise carries on business in Canada through Manitoulin. On the facts of
this case, Manitoulin also clearly considered that part of its duties to Topocean
would be to bring to Topocean’s attention notice of the service effected on it:
Its manager promptly forwarded the Statement of Claim to Topocean by messenger.
Again, it does not matter that the package in this instance apparently went
astray; what is relevant is that Manitoulin considered it its duty as agent to
forward it.
[21]
There is no direct evidence as to how long
Topocean has been carrying on business in Canada through Manitoulin. However,
the evidence suggests an arrangement that is sufficiently longstanding to meet
the test: Service was effected in April 2014; in October 2014, when the Motion
Records were constituted, Topocean was still using Manitoulin’s services as
agent. Topocean’s website itself promotes a sense of permanence: It touts that
most of its agents have been with their network for more than five years. While
there is no evidence that this desirable quality applies specifically to
Manitoulin, Topocean has not led evidence to contradict the impression its
website sought to create. Finally, Manitoulin clearly operates from a fixed
place of business, advertised by Topocean itself on its website.
[22]
It is worth emphasizing that Topocean publicly
promotes itself on its website as a group of “owned and
agent offices” that carries on business as “a
network” worldwide, including, through the agency of Manitoulin, at a
specific address in Canada. The impression created by the website, no doubt
intentionally, is that one can contact Topocean and transact business with it
at any of the physical addresses listed on its website, whether the address is
operated by a corporate subsidiary or by an unrelated corporate entity acting
as agent. The impression formed by the website, as it concerns Manitoulin, was
not contradicted by the events as they unfolded at the time of service: The
person apparently in charge of Manitoulin’s premises did accept service of the
proceedings directed to Topocean, and its manager did promptly take steps to
direct the proceedings to Topocean. On the evidence before me, apart from Topocean’s
affiant’s bald statement that “[None of the Topocean
companies] have any place of business […] in Canada”, Topocean has put
forward no evidence to contradict the impression created by the website’s
statements or the correctness of the legal relationship these statements imply,
that is, that Manitoulin is Topocean’s agent in Canada, where it carries out
part of the business of Topocean.
[23]
I am satisfied that service of the Statement of
Claim was validly effected on Topocean by service at Manitoulin’s premises, in
accordance with Rule 130(1)(a)(ii).
Motion to extend the time for service or to authorize
substitutional service
[24]
Given my conclusion that service was validly
effected at Manitoulin’s premises, I do not need to consider the Plaintiffs’
cross-motion to extend the time for service or to authorize substitutional
service on Topocean’s Canadian solicitors.
[25]
However, if I am wrong as to my determination of
the validity of service, I would have extended the time for service of the
Statement of Claim so that the Plaintiffs could effect service of the Statement
of Claim in accordance with Rule 137 and the Hague Convention on Service Abroad.
[26]
The criteria to be considered in extending the
time for service are well-known, and it is clear that the Plaintiffs meet all
of them: The Plaintiffs, by attempting service on Topocean within the deadlines
provided in the Federal Courts Rules, and by seeking an extension of
time to serve Topocean, de bene esse, in response to Topocean’s motion
to contest the validity of service, have shown a continuing intention to
proceed. Any delay in effecting proper service is explained and justified by
the Plaintiffs’ reasonable reliance on Topocean’s own representations on its
website, as further reinforced by Manitoulin’s acceptance of service. I do not
accept Topocean’s suggestion that the Plaintiffs are the authors of their own
misfortune “for their procedural maneuvering by
avoiding proper service in the United States pursuant to Rule 137 FCR and the
Hague Convention in the first place”. The evidence before me supports a
finding that the Plaintiffs’ solicitors consulted and relied upon the
statements made on Topocean’s website in searching for a branch or agency in
Canada to effect service. Although Topocean has sought a stay of proceedings in
favour of another jurisdiction, Topocean does not contest that the Plaintiffs
have a reasonable cause of action against it. Finally, an extension of time
would not cause prejudice to Topocean. Topocean makes much of the expiration of
the one year limitation period applicable to this claim, and argues that
extending the time for service would cause it prejudice by reviving a claim
that has been extinguished by limitation. However, pursuant to the United
States Carriage of Goods by Sea Act (“COGSA”), which Topocean argues
governs the bill of lading, the limitation is avoided if suit is brought
within one year. Here, the Statement of Claim was issued, and thus suit was
brought, within the limitation period. COGSA does not impose any delay for the
service of suit, nor is a statement of claim automatically void if not served
within the delays provided in the Rules. Thus, even if the service of the
statement of claim was held to be invalid, it would not automatically have the
effect of voiding the statement of claim or of invalidating its effect as
interrupting the limitation, so as to entitle Topocean to the benefit of the
limitation.
[27]
The jurisprudence cited by Topocean is not on
point, as in all cases the statement of claim had been issued after the
expiration of the limitation. The Court is aware of no case where service has
been declared invalid, or where an extension of time to serve has been refused,
on the basis of the expiration of a limitation period between the time the
statement of claim had been issued and the time it was, or was intended to be,
served.
[28]
For those reasons, I would have, if necessary,
extended the time for service of the statement of claim by sixty (60) days from
the date of this order.
[29]
I note here that I would not have ordered
substitutional service on Topocean’s attorneys. If Topocean had been correct
that Manitoulin was not its agent, then under the Rules, the Plaintiffs would
have had to serve Topocean in the United States, in accordance with the Hague
Convention on Service Abroad. Where a foreign defendant successfully
contests the validity of service upon it, and unless that defendant has
maneuvered inappropriately to avoid valid service, it would be unfair, would
render the defendant’s efforts nugatory and would encourage plaintiffs to attempt
questionable service, to then permit substitutional service upon the successful
defendant’s Canadian solicitors.
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