Tropwood A.G. et al. v. Sivaco Wire & Nail Co. et al., [1979] 2 SCR 157

Supreme Court of Canada

Tropwood A.G. et al. v. Sivaco Wire & Nail Co. et al., [1979] 2 S.C.R. 157

Date: 1979-03-06

Tropwood A.G. and the Owners of the Vessel Tropwood (Defendants) Appellants;

and

Sivaco Wire & Nail Company (Plaintiff)

and

Atlantic Lines & Navigation Company, Inc. (Defendant) Respondents.

1979: February 7; 1979: March 6.

Present: Laskin C.J. and Martland, Ritchie, Pigeon, Dickson, Beetz, Estey, Pratte and Mclntyre JJ.

ON APPEAL FROM THE FEDERAL COURT OF APPEAL

Courts—Federal Court—Jurisdiction—Maritime law—Navigation and shipping—Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, ss. 2, 22, 42—The Admiralty Act, 1891 (Can.), c. 29—The Admiralty Act, 1934 (Can.), c. 31—Carriage of Goods by Water Act, R.S.C. 1970, c. C‑15.

The respondent (Sivaco) instituted an action in the Federal Court for damages to goods shipped by sea from France to Montreal. The defendants appellants were the owner of the ship on which the cargo was carried. The statement of defence raised the issue of jurisdiction of the Federal Court: it alleged that the plaintiff was not claiming relief or seeking a remedy under or by virtue of Canadian maritime law or any other law of Canada relating to any matter coming within the class of subject of navigation and shipping. The matter came before the Trial Division of the Federal Court for preliminary determination of a question of law. Walsh J., giving consideration to Quebec North Shore Paper Co. v. Canadian Pacific Ltd., [1977] 2 S.C.R. 1054, and McNamara Construction (Western) Ltd. v. The Queen, [1977] 2 S.C.R. 654, upheld the jurisdiction of the Federal Court and his judgment was affirmed by the Federal Court of Appeal.

Held: The appeal should be dismissed.

The Federal Court of Canada is given jurisdiction, under s. 22 of the Federal Court Act, to adjudicate on questions of admiralty law. The jurisdiction having so been conferred, the question is whether there was a body of federal law, be it statute, common law or other, upon which the jurisdiction could be exercised. Section 4 of

[Page 158]

the Admiralty Act of 1891 introduces as part of the law of Canada a body of admiralty law upon which that jurisdiction could operate. And the Federal Court Act, which governs the present case, defining Canadian maritime law in s. 2, refers to the law that was administered by the Exchequer Court “by virtue of the Admiralty Act or any other statute”. The reference to the Admiralty Act is undoubtedly to the Act of 1934, but the Admiralty Act of 1891, although repealed, may certainly be considered as “any other statute” by virtue of which law was administered by the Exchequer Court on its admiralty side.

Two questions remain: (1) whether a claim of the kind made here was within the scope of admiralty law as it was incorporated into the law in 1891; and (2) if so, whether such a claim fell within the scope of federal power in relation to navigation and shipping.

(1) The effect of s. 4 of the Canadian Admiralty Act of 1891, having regard to its interplay with the British Colonial Courts of Admiralty Act of 1890 (and therefore with s. 6 of the British Admiralty Act of 1861) was to bring claims arising from damage to in-bound cargo within the purview of the Exchequer Court of Canada, entitling it to treat them as part of admiralty law. In consequence of s. 2 of the Federal Court Act, such claims are similarly within the scope of Canadian maritime law cognizable by the Federal Court.

(2) The statutorily-recognized law governing the claim made here in the Federal Court is constitutionally attributable to federal power in relation to navigation and shipping. The relationship between carriers of goods by ship and the shippers or owners or consignees of such goods is one upon which Parliament is entitled to legislate, just as it is entitled to and has legislated on liability in respect of the carriage of goods by rail or by air.

The appellant also raises the point as to whether it is open to the Federal Court, in exercising its jurisdiction in the matter brought before it, to determine, pursuant to conflict of law rules of a forum, a choice of law rule to govern the determination of the suit. In the present case, the Federal Court has jurisdiction over the appellant and over the cause of action and there is a body of law which it can apply. This body of law embraces conflict rules and entitles the Federal Court to find that some foreign law should be applied to the claim that has been put forward.

[Page 159]

Quebec North Shore Paper Co. v. Canadian Pacific Ltd., [1977] 2 S.C.R. 1054; McNamara Construction (Western) Ltd. v. The Queen, [1977] 2 S.C.R. 654 followed; The Queen v. Canadian Vickers Ltd. (1977), 77 D.L.R. (3d) 241; MacMillan Bloedel Ltd. v. Canadian Stevedoring Co. Ltd., [1969] 2 Ex. C.R. 375; Grand Trunk Railway Co. v. Attorney General of Canada, [1907] A.C. 65, referred to.

APPEAL from a judgment of the Federal Court of Appeal affirming a judgment of Walsh J. who, on a motion for preliminary determination, upheld the jurisdiction of the Federal Court. Appeal dismissed.

Sean Harrington, for the appellants.

Peter R.D. MacKell, Q.C., and Marc Nadon, for the respondent, Sivaco Wire & Nail Company.

The judgment of the Court was delivered by

THE CHIEF JUSTICE—We are faced in this case with a question of the jurisdiction of the Federal Court of Canada, not with jurisdiction in the abstract but with whether there is operative law under which the Federal Court may properly entertain an action, framed both in contract and in tort, arising out of damage to in-bound cargo shipped by sea from Caen, France to Montreal. The plaintiff in the action is the owner and consignee of the goods so shipped, which were found damaged after they arrived in Montreal, and the defendant appellant is the owner of the ship on which the cargo was carried. Damages in the amount of $110,000 are claimed in the action which was instituted in the Federal Court.

The issue of jurisdiction arises from an allegation in the statement of defence that the plaintiff is not claiming relief or seeking a remedy under or by virtue of Canadian maritime law or any other law of Canada relating to any matter coming within the class of subject of navigation and shipping. The plaintiff thereupon moved for a preliminary determination of the question of jurisdiction, pursuant to the Rules of the Federal Court. The matter came before Walsh J. who necessarily gave consideration to the judgments of this Court in Quebec North Shore Paper Co. v. Canadian

[Page 160]

Pacific Ltd.[1] and in McNamara Construction (Western) Ltd. v. The Queen[2]. He upheld the jurisdiction of the Federal Court over the subject matter of the action in comprehensive reasons and his judgment was affirmed without more on appeal.

It is common ground between the parties that legislative power to support a body of federal maritime law resides in Parliament’s exclusive authority in relation to navigation and shipping, and it is, hence, unnecessary here to inquire whether any other head of federal legislative power, for example, power in relation to the regulation of trade and commerce, may be called in aid. Admittedly, it was open to the Parliament of Canada to establish a federal Court, pursuant to s. 101 of the British North America Act, to administer its maritime law concurrently with provincial superior courts.

The Federal Court of Canada, as the successor to the Exchequer Court, is given jurisdiction, under s. 22 of the Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, to adjudicate on questions of admiralty law. The general specification of this adjudicative power is in s. 22(1), reading as follows:

22. (1) The Trial Division has concurrent original jurisdiction as well between subject and subject as otherwise, in all cases in which a claim for relief is made or a remedy is sought under or by virtue of Canadian maritime law or any other law of Canada relating to any matter coming within the class of subject of navigation and shipping, except to the extent that jurisdiction has been otherwise specially assigned.

Without limiting the generality of what is given by that provision, s. 22(2) declares that, for greater certainty, jurisdiction resides in the Trial Division of the Federal Court with respect to “any claim or question arising out of any one or more” of a specification of claims or questions listed in consecutive clauses (a) to (s). Section 22(2)(e), (h) and (i) cover the present case in their wording which is as follows:

(e) any claim for damage sustained by, or for loss of, a ship including, without restricting the generality of the

[Page 161]

foregoing, damage to or loss of the cargo or equipment of or any property in or on or being loaded on or off a ship;

…

(h) any claim for loss of or damage to goods carried in or on a ship including, without restricting the generality of the foregoing, loss of or damage to passengers’ baggage or personal effects;

(i) any claim arising out of any agreement relating to the carriage of goods in or on a ship or to the use or hire of a ship whether by charter party or otherwise;

Section 22(3) settles any doubts on the question whether the jurisdiction extends to foreign ships and to claims arising on the high seas or within the territorial, internal and other waters of Canada or elsewhere. What is important to notice is that the heads of jurisdiction specified in s. 22(2) are nourished, so far as applicable law is concerned, by the ambit of Canadian maritime law or any other existing law of Canada relating to any matter coming within the class of navigation and shipping.

In the light of the Quebec North Shore and McNamara cases, Walsh J. addressed himself to the question whether, jurisdiction having so been conferred, there was a body of federal law, be it statute, common law or other, competently enacted or recognized by Parliament, upon which the jurisdiction could be exercised. The learned Federal Court Judge traced the chequered history of admiralty jurisdiction both in England and in Canada, relying on the recent judgment of Thurlow A.C.J. in The Queen v. Canadian Vickers Ltd.[3] and on the earlier judgment of Jackett P. (as he then was) in MacMillan Bloedel Ltd. v. Canadian Stevedoring Co. Ltd.[4] For present purposes, it is enough to look at the Canadian statutes enacted following the British Colonial Courts of Admiralty Act, 1890, and following the abrogation of limitations on federal legislative power by the Statute of Westminster, 1931. These Canadian statutes are (1) The Admiralty Act, 1891 (Can.), c. 29; (2) The Admiralty Act, 1934 (Can.), c. 31;

[Page 162]

and the Federal Court Act, enacted in 1970, with effect from June 1, 1971.

Under the Admiralty Act of 1891, s. 3, the Exchequer Court of Canada was constituted a Colonial Court of Admiralty with all the jurisdiction, powers and authority conferred by The British Act of 1890 and by this Canadian Act, s. 4 was as follows:

4. Such jurisdiction, powers and authority shall be exercisable and exercised by the Exchequer Court throughout Canada, and the waters thereof, whether tidal or non-tidal, or naturally navigable or artificially made so, and all persons shall, as well in such parts of Canada as have heretofore been beyond the reach of the process of any Vice‑Admiralty court, as elsewhere therein, have all rights and remedies in all matters, (including cases of contract and tort and proceedings in rem and in personam), arising out of or connected with navigation, shipping, trade or commerce, which may be had or enforced in any Colonial Court of Admiralty under “The Colonial Courts of Admiralty Act, 1890.”

I am in agreement with Walsh J., and with Thurlow A.C.J. in the Canadian Vickers case, that s. 4 (aided perhaps by s. 3 although I do think that s. 4 can stand alone) introduces as part of the law of Canada a body of admiralty law under its specification that “all persons shall… have all rights and remedies in all matters (including cases of contract and tort and proceedings in rem and in personam), arising out of or connected with navigation, shipping, trade or commerce, which may be had or enforced in any Colonial Court of Admiralty under the Colonial Courts of Admiralty Act, 1890”.

It is unnecessary at this point to determine what this body of admiralty law embraces. I think it more fruitful, in the light of submissions by the appellant, to see what connection, if any, there is in respect of introduced admiralty law, between the Act of 1891 and the federal Acts which followed and superseded it. The appellant concedes that the Act of 1891 not only gave jurisdiction but also incorporated a body of law upon which that jurisdiction could operate. It denies however, that there was any carrying forward of any body of law by the Act of 1934, which repealed and replaced the Act of 1891. For my part, I do not think it

[Page 163]

matters here whether the Act of 1934 failed to incorporate or recognize a body of admiralty law. I leave that question open, although I would be inclined to find that s. 18 of the Act of 1934 was an adequate source of authority to apply a body of admiralty law. Since the present case is admittedly governed by the Federal Court Act, it is that Act to which we must look to determine whether the jurisdiction now reposed in the Federal Court to try what I may compendiously call admiralty matters relates to a body of law, which can be attributed to federal competence, upon which the jurisdiction can operate.

I come, therefore, to the Federal Court Act. I have already quoted s. 22(1) and I refer to the words “Canadian maritime law” therein, words which are defined in s. 2 of the Act as follows:

“Canadian maritime law” means the law that was administered by the Exchequer Court of Canada on its Admiralty side by virtue of the Admiralty Act or any other statute, or that would have been so administered if that Court had had, on its Admiralty side, unlimited jurisdiction in relation to maritime and admiralty matters, as that law has been altered by this or any other Act of the Parliament of Canada;

This definition is supplemented by s. 42 of the Federal Court Act, reading as follows:

Canadian maritime law as it was immediately before the first day of June, 1971 continues subject to such changes therein as may be made by this or any other Act.

This definition of Canadian maritime law in s. 2 refers to the law that was administered by the Exchequer Court “by virtue of the Admiralty Act or any other statute”. The reference to the Admiralty Act is undoubtedly to the Act of 1934, but the Admiralty Act of 1891, although it was repealed, may certainly be considered as “any other statute” by virtue of which law was administered by the Exchequer Court on its admiralty side. If therefore there was a deficient incorporation of admiralty law by the Act of 1934, the same cannot be said of the Act of 1891.

Two questions, therefore, remain. The first is whether a claim of the kind made here was within the scope of admiralty law as it was incorporated

[Page 164]

into the law of Canada in 1891. If so, the second question is whether such a claim fell within the scope of federal power in relation to navigation and shipping. It would be unnecessary to canvass the first question if the Carriage of Goods by Water Act, R.S.C. 1970, c. 15 could be invoked but, as the appellant points out, that Act, which gives effect to the Hague Rules set out as a schedule to the Act, applies only to bill of lading shipments from Canadian ports, which is not this case. I accept as a starting point for the answer to the first question the assertion of the respondent in its factum that it is essential to ascertain what was the jurisdiction of the High Court in England (referentially included in the Act of 1891 through the Colonial Courts of Admiralty Act, 1890) as of 1891 and what kinds of claims were cognizable therein as part of English admiralty law. In short, were claims for damage to cargo included?

As the history of admiralty jurisdiction and law shows, such claims were expressly covered by an ordinance of the Long Parliament of Cromwell, passed in 1648, but it was repealed upon the restoration of the monarchy: see Roscoe, Admiralty Jurisdiction and Practice (5th ed. 1931), pp. 13 ff. It was not until the enactment of the Admiralty Act, 1861 (U.K.), c. 10 that damage to in-bound cargo was brought within the jurisdiction of the then High Court of Admiralty under s. 6 thereof, reading as follows:

The High Court of Admiralty shall have Jurisdiction over any Claim by the Owner or Consignee or Assignee of any Bill of Lading of any Goods carried into any Port in England or Wales in any Ship, for Damage done to the Goods or any Part thereof by the Negligence or Misconduct of or for any Breach of Duty or Breach of Contract on the Part of the Owner, Master, or Crew of the Ship, unless it is shown to the Satisfaction of the Court that at the Time of the Institution of the Cause any Owner or part Owner of the Ship is domiciled in England or Wales: Provided always, that if in any such Cause the Plaintiff do not recover Twenty Pounds he shall not be entitled to any Costs, Charges or Expenses

[Page 165]

incurred by him therein, unless the Judge shall certify that the Cause was a fit one to be tried in a said Court.

The effect of s. 4 of the Canadian Admiralty Act of 1891, having regard to its interplay with the British Colonial Courts of Admiralty Act of 1890, was to bring claims of this kind within the purview of the Exchequer Court of Canada, entitling it to treat them as part of admiralty law. In consequence of s. 2 of the Federal Court Act, such claims were similarly within the scope of Canadian maritime law cognizable by the Federal Court under the jurisdiction conferred upon it by s. 22(1) and s. 22(2)(e),(h),(i). In coming to this conclusion, I have not found it necessary to examine that part of the definition of “Canadian maritime law” which embraces “the law… that would have been so administered if [the Exchequer Court of Canada] had had on its admiralty side unlimited jurisdiction in relation to maritime and admiralty matters”.

The second question above-mentioned is whether claims for damage to cargo, notwithstanding that they became cognizable as part of English admiralty law, fall within the scope of federal legislative power in relation to navigation and shipping. I observe that the Carriage of Goods by Water Act, supra, which gives statutory expression to such claims in respect of out-bound cargo, is interwoven with s. 657 of the Canada Shipping Act, R.S.C. 1970, c. S-9, declaring the responsibility of carriers by water for goods delivered to them for conveyance, and binding them to use due care and diligence in the safekeeping and punctual conveyance of such goods.

I have no doubt that both Acts in their dealing with water carriage of goods are constitutionally attributable to federal power in relation to navigation and shipping, and I am of the like opinion in respect of the statutorily-recognized law governing the claim made here in the Federal Court. The relationship between carriers of goods by ship and the shippers or owners or consignees of such goods is one upon which Parliament is entitled to legis-

[Page 166]

late, just as it is entitled to and has legislated on liability in respect of the carriage of goods by rail or by air: see Railway Act, R.S.C. 1970, c. R-2, ss. 102(1)(i), 262(1)(c), (7); Carriage by Air Act, R.S.C. 1970, c. C-14. Federal legislative authority to deal with contractual aspects of transportation services, which are within federal regulatory power, was affirmed many years ago in Grand Trunk Railway Co. v. Attorney-General of Canada[5].

Two other matters must be mentioned. The appellant makes a point of the fact that the bills of lading in the present case provide that the Hague Rules relating to Bills of Lading, as enacted in the country of shipment, are to apply and, further, that any dispute arising under the bills of lading in this case shall be decided in the country where the carrier has its principal place of business and that the law of that country shall apply. It is accordingly submitted by the appellant that the stipulation that foreign law would apply reinforces its principal contention that there is no existing federal law by which the Federal Court could deal with the cause of action in this case. (It is conceded that the Hague Rules enacted in France are similar to those enacted in Canada under the Carriage of Goods by Water Act, supra, save for the package or unit limitation, but, as already pointed out, the Canadian Act relates only to out‑bound cargo.)

What is raised by the appellant, shortly put, is whether it is open to the Federal Court, in exercising its jurisdiction in the matter brought before it, to determine, pursuant to conflict of law rules of the forum, a choice of law rule to govern the determination of the suit. In the present case, the Federal Court has jurisdiction over the appellant and over the cause of action and there is a body of law which it can apply. It is my opinion that this body of law embraces conflict rules and entitles the Federal Court to find that some foreign law should be applied to the claim that has been put

[Page 167]

forward. Conflicts rules are, to put the matter generally, those of the forum. It seems quite clear to me that s. 22(3) of the Federal Court Act, which I have already referred to, envisages that the Federal Court, in dealing with a foreign ship or with claims arising on the high seas may find it necessary to consider the application of foreign law in respect of the cause of action before it.

The second matter that needs to be mentioned relates to the opposing positions of the parties on whether Canadian maritime law is uniform law, applicable in the same way throughout the whole of Canada. This question, strictly speaking, does not arise in respect of the issue posed for preliminary determination. I think it the wise course to leave the question of uniform application open since this case has not yet been heard on the merits.

For the reasons given, I would dismiss the appeal with costs.

Appeal dismissed with costs.

Solicitors for the appellants: McMaster, Meighen, Montreal.

Solicitors for the respondent, Sivaco Wire & Nail Company: Martineau, Walker, Allison, Beaulieu, MacKell & Clermont, Montreal.

Solicitors for the respondent, Atlantic Lines & Navigation Company, Inc.: Chauvin, Marler & Beaudry, Montreal.