Radil Bros Fishing Co. Ltd. v. Canada (Regional Director-general of the Department of Fisheries and Oceans), 2001 FCA 317

Date: 20011019

Docket: A-786-00

Neutral citation: 2001 FCA 317

CORAM:        DESJARDINS J.A.

DÉCARY J.A.

SEXTON J.A.

BETWEEN:

                                                   RADIL BROS. FISHING CO. LTD.

                                                                                                                                                       Appellant

                                                                                 and

                                HER MAJESTY THE QUEEN IN RIGHT OF CANADA,

                     REPRESENTED BY THE REGIONAL DIRECTOR-GENERAL OF

             THE DEPARTMENT OF FISHERIES AND OCEANS, PACIFIC REGION,

                                  and BRITISH COLUMBIA PACKERS LIMITED and

                                                              TITAN FISHING LTD.

                                                                                                                                               Respondents

                                Heard at Vancouver, British Columbia, on September 25, 2001.

                                 Judgment delivered at Ottawa, Ontario, on October 19, 2001.

REASONS FOR JUDGMENT BY:                                                                                     DÉCARY J.A.

CONCURRED IN BY:                                                                                                 DESJARDINS J.A.

                                                                                                                                               SEXTON J.A.

Date: 20011019

Docket: A-786-00

Neutral citation: 2001 FCA 317

CORAM:        DESJARDINS J.A.

DÉCARY J.A.

SEXTON J.A.

BETWEEN:

                                                   RADIL BROS. FISHING CO. LTD.

                                                                                                                                                       Appellant

                                                                                 and

                                HER MAJESTY THE QUEEN IN RIGHT OF CANADA,

                     REPRESENTED BY THE REGIONAL DIRECTOR-GENERAL OF

             THE DEPARTMENT OF FISHERIES AND OCEANS, PACIFIC REGION,

                                  and BRITISH COLUMBIA PACKERS LIMITED and

                                                              TITAN FISHING LTD.

                                                                                                                                               Respondents

                                                        REASONS FOR JUDGMENT

DÉCARY J.A.

[1]                 This is an appeal from an Order of McKeown J. (2000 F.C.J. 1885) allowing an appeal from an Order of Prothonotary Hargrave (reported at (1999) 175 F.T.R. 182) and striking out in its entirety the Statement of Claim in Court File T-382-99.

[2]                 The appeal illustrates once again the confusion that may arise from a misunderstanding of the system of parallel proceedings which the Federal Court Act imposes on litigants where they wish, on the one hand, to challenge the legality of a federal board's decision by an application for judicial review, and on the other hand, to seek damages from the Crown through an action in tort.

[3]                 The appeal also raises an interesting question as to the extent of the Federal Court's jurisdiction in maritime matters.

[4]                 To fully understand the reasons that follow, it is essential to have an extensive look at the facts as they are alleged in the Statement of Claim and the proceedings which are relevant to the issues raised in the appeal.

The facts as alleged in the Statement of Claim

[5]                 The action arises out of fishing licence transactions which involve the appellant (Radil), the Regional Director General of the Department of Fisheries and Oceans for the Pacific Region (the Minister), British Columbia Packers Limited (B.C. Packers) and Titan Fishing Ltd. (Titan).

[6]                 Radil was the owner, in 1993, of the fishing vessel "Seacrest", an eighty-six foot vessel used to fish for groundfish in the Pacific Groundfish Trawl Fishery. Since 1976, a fishing licence was required in order to participate in the groundfish trawl fishery.

[7]                 A fishing licence is a document by which the Minister of Fisheries and Oceans (the Minister) grants permission to an individual, company or vessel to engage in the harvest of certain species of fish, subject to any conditions attached to the licence. A licence is issued for one year. A category "T" licence was required with respect to the groundfish trawl fishery. Commencing in or about 1986, and continuing until 1992, a category "T" licence together with validation tab 0008 (the T8 licence) was issued to Radil with respect to the "Seacrest".

[8]                 At all times material to the action, B.C. Packers held themselves out as offering administrative, financial and management services to the parties who fished for them and comprised their fishing fleet, including Radil. The services provided by B.C. Packers included: applying for fishing licences on behalf of the members of its fishing fleet and advising these members of changes to fishing regulations and fisheries management.

[9]                 On January 13, 1993, B.C. Packers submitted to the Department of Fisheries and Oceans (the Department) an application for the reissuance of licence T8 to Radil for the "Seacrest" for 1993. The licence was issued on January 22, 1993.

[10]            On June 7, 1993, Radil and B.C. Packers entered into an agreement whereby B.C. Packers agreed to transfer a category "A" licence (for salmon) to the "Seacrest" in consideration for payment of $250,000 by Radil.

[11]            At that time, B.C. Packers owned or held licence T92, which was issued and placed on the fishing vessel "Pacific Eagle", a vessel then owned by Polar Star Enterprises Ltd. and with whom B.C. Packers had an arrangement for the placement of the T92 licence.

[12]            At the time of the transfer of the "A" licence from B.C. Packers to Radil, B.C. Packers and the Department, without the knowledge or consent of Radil, purported to exchange licence T8 issued to Radil in respect of the "Seacrest" for licence T92 owned by B.C. Packers and issued in respect of the "Pacific Eagle".

[13]            Radil paid B.C. Packers for the "A" licence and was advised by B.C. Packers on August 3, 1993, that the "A" licence had been transferred and issued by the Department in respect of the "Seacrest".

[14]            Prior to the swap of licences T8 and T92, and unknown to Radil at the time, the Department represented to B.C. Packers that the swap would not impact on the catch history of the "Seacrest" for the purposes of calculating the Individual Vessel Quota (IVQ) of the "Seacrest" and that the catch history of the "Seacrest" would remain with the "Seacrest" even though the licence had been swapped.

[15]            On May 25, 1995, the "Pacific Eagle", together with licence T8, was sold to Titan.

[16]            On March 18, 1997, it was announced that a new Groundfish Trawl Fishery Management Plan that introduced IVQs in that fishery had been approved by the Minister. The information used to generate the IVQ allocation for the "Seacrest" was mailed that very day to Radil.

[17]            On receiving the letter of March 18, 1997, Radil first became aware that the "T" licence referred to as being held by Radil with respect to the "Seacrest" was T92 rather than T8 and that the IVQ of the "Seacrest" was calculated based on the catch history of the "Pacific Eagle" rather than the "Seacrest". As a result, the "Seacrest" received a significantly lower IVQ than it would have, based on its own catch history.

The proceedings

[18]            On February 4, 1998, Radil filed an Originating Notice of Motion under section 18 of the Federal Court Act in the Federal Court of Canada, Trial Division (File No. T-192-98). It sought the following remedies:

(a)            an order of mandamus or in the nature of mandamus requiring the Respondent the Director General of the Department of Fisheries and Oceans, Pacific Region, to make a decision with regard to the issuance of licence "T" 0008 to the Applicant for the 1998-1999 fishery,

(b)           a declaration that the purported transfer of licence "T" 0008 on August 3, 1993, was unauthorized, illegal, invalid, or otherwise ineffective and that the Applicant is the rightful holder of the licence,

(c)            a declaration that the Applicant is entitled to the issued "T" licence 0008 for the 1998-1999 fishery and is entitled to the individual vessel quota issued to "T" licence 0008 in 1997.

                                                                                                                                (A.B. 113, 114)

[19]            In February 1998, Titan brought a motion seeking an Order striking out Radil's application as an abuse of process or, in the alternative, to have the application treated and proceeded with as an action pursuant to subsection 18.4(2) of the Federal Court Act. Campbell J. dismissed the application to strike but directed that the matter be treated and proceeded with as an action.

[20]            On March 24, 1998, in order to comply with Campbell J.'s Order, Radil filed a Statement of Claim in T-192-98 whose prayer for relief reads as follows:

WHEREFORE THE PLAINTIFF CLAIMS AGAINST THE DEFENDANT, HER MAJESTY THE QUEEN, as represented by the DIRECTOR GENERAL OF THE DEPARTMENT OF FISHERIES AND OCEANS, PACIFIC REGION:

(a)            a declaration that the purported transfer of licence ‘T' 0008 on August 3, 1993 was unauthorized, illegal, invalid, or otherwise ineffective and that the Plaintiff is the rightful holder of the licence,

(b)           a declaration that the Plaintiff is entitled to be issued licence ‘T' 0008 and is entitled to the individual vessel quotas issued to licence ‘T' 0008,

(c)            damages for loss of revenue which the Plaintiff has suffered and will suffer as a result of the substitution of licence ‘T' 0092 for licence ‘T' 0008,

(d)           general damages relating to the diminution in value between licence ‘T' 0008 and ‘T' 0092

[...]

WHEREFORE THE PLAINTIFF CLAIMS AGAINST THE DEFENDANT, BRITISH COLUMBIA PACKERS LIMITED:

(a)            damages for loss of revenue which the Plaintiff has suffered and will suffer as a result of the substitution of licence ‘T' 0092 for licence ‘T' 0008,

(b)           general damages relating to the diminution in value between licence ‘T' 0008 and ‘T' 0092

[...]

WHEREFORE THE PLAINTIFF CLAIMS AGAINST THE DEFENDANT, TITAN FISHING LTD.:

(a)            a declaration that the Plaintiff is entitled to be issued licence ‘T' 0008 and is entitled to the individual vessel quotas issued to licence ‘T' 0008,

[...]

                                                                                                                                (A. B. 123,124)

[21]            On September 28, 1998, Titan brought a motion for summary judgment dismissing the claim for relief against both the Crown and Titan. On November 30, 1998, Rouleau J. dismissed the motion for summary judgment but held that Radil was not entitled to include a claim for damages in the Statement of Claim as the conversion of a judicial review application into an action did not permit a party to seek new or additional relief than originally sought. On December 15, 1998, Radil filed an Amended Statement of Claim in T-192-98 in which it sought only the two following remedies:

(a)            a declaration that the purported transfer of licence ‘T' 0008 on August 3, 1993, was unauthorized, illegal, invalid, or otherwise ineffective and that the Plaintiff is the rightful holder of the licence,

(b)           a declaration that the Plaintiff is entitled to be issued licence ‘T' 0008 and is entitled to the individual vessel quotas issued to licence ‘T' 0008,

                                                                                                                                         (A.B. 144)

[22]            On March 5, 1999, Radil filed a Statement of Claim in the Trial Division (File No. T-382-99) seeking the following remedies:

THE PLAINTIFF CLAIMS AGAINST THE DEFENDANT, HER MAJESTY THE QUEEN IN RIGHT OF CANADA, as represented by the REGIONAL DIRECTOR-GENERAL OF THE DEPARTMENT OF FISHERIES AND OCEANS for the PACIFIC REGION:

(a)            a declaration that the purported transfer of licence ‘T' 0008 in 1993, was unauthorized, illegal, invalid, or otherwise ineffective and that the Plaintiff is the rightful holder of the licence,

(b)           a declaration that the Plaintiff is entitled to be issued licence ‘T' 0008 and is entitled to the Individual Vessel Quota issued to licence ‘T' 0008,

(c)            in the alternative, a declaration that the Plaintiff is entitled to the Individual Vessel Quota based on the catch history of the "SEACREST",

(d)           damages for loss of revenue which the Plaintiff has suffered and will suffer as a result of the substitution of licence ‘T' 0092 for licence ‘T' 0008,

(e)            general damages relating to the diminution in value between licence ‘T' 0008 and ‘T' 0092

[...]

THE PLAINTIFF CLAIMS AGAINST THE DEFENDANT, BRITISH COLUMBIA PACKERS LIMITED:

(a)            damages for loss of revenue which the Plaintiff has suffered and will suffer as a result of the substitution of licence ‘T' 0092 for licence ‘T' 0008,

(b)           general damages relating to the diminution in value between licence ‘T' 0008 and ‘T' 0092

[...]

THE PLAINTIFF CLAIMS AGAINST THE DEFENDANT, TITAN FISHING LTD.:

(a)            a declaration that the Plaintiff is entitled to be issued licence ‘T' 0008 and is entitled to the individual vessel quota issued to licence ‘T' 0008,

[...]

                                                                                                                                     (A.B. 91, 92)

[23]            On March 17, 1999, Radil filed an identical action in the Supreme Court of British Columbia (File C-99-1428).

[24]            On June 8, 1999, the Queen filed a motion for an Order setting aside, striking out or summarily dismissing the Statement of Claim in T-382-99 or, in the alternative, staying the proceeding as Radil has brought an identical action in respect of the same claim in the Supreme Court of British Columbia.

[25]            On June 16, 1999, Prothonotary Hargrave made the following Order:

1.             The onus on a party seeking to strike out a statement of claim is a heavy one. Moreover, a proceeding ought not to be struck out if there is a scintilla of a chance that an amendment might be successful. The motion is denied and the action shall not be struck out, provided the Plaintiff amends the Statement of Claim within 14 days, to add to the pleading, as it stands, grounds upon which the Minister's discretionary decision might be challenged, grounds which might include malfeasance, or grounds similar to those set out in Thompson v. MCI (1997), 37 Imm.L.R. (2d) 9 at 15-16 (T.D.) or in Williams v. Canada (1997), 212 N.R. 63 at 71 (F.C.A.);

2.             The motion for a stay is denied;

                                                                                                                                     (A.B. 58, 59)

He issued his reasons on July 12, 1999.

[26]            Also on June 16, 1999, Prothonotary Hargrave ordered that the action in Files T-192-98 and T-382-99 "be heard at the same time, or one immediately following after the other, as the trial judge may determine" (A.B. 60).

[27]            On June 25, 1999, Radil, in compliance with the Prothonotary's Order, filed an Amended Statement of Claim, the content of which I will ignore for the purposes of this appeal since, on the same day, the Crown appealed the Order of the Prothonotary and it is this appeal which is now before this Court.

[28]            On November 17, 2000, McKeown J. allowed the appeal and struck out the Statement of Claim in T-382-99. This appeal is with respect to McKeown J.'s Order.

[29]            Mr. McEwen, whose first appearance in this matter was in the appeal before us, argued for the appellant Radil. He does not question the part of McKeown J.'s Order which strikes out the totality of the declaratory relief sought in the Statement of Claim. The appeal must therefore be dismissed at least in that regard.

[30]            The issues that remain to be decided in this appeal are the following: 1) Is there a reasonable cause of action against the Crown? 2) Does the Federal Court of Canada have jurisdiction with respect to the claim against B.C. Packers? 3) If question 1) or 2) is answered in the affirmative, should a stay be ordered?

The appeal against Titan

[31]            Radil having abandoned at the hearing of the appeal all declaratory relief, there is no longer any relief sought against Titan. The appeal with respect to Titan should therefore be dismissed with costs.

A reasonable cause of action against the Crown

[32]            Motions under Rule 221(1)(a) to strike out statements of claims as disclosing no reasonable cause of action are only to be granted if it is plain and obvious, assuming the facts as stated in the statement of claim can be proved, that the plaintiff has no chance of success (see Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959). It is not an easy burden to satisfy.

[33]            In addition, in cases where, as here, relief has to be sought in parallel proceedings because of the unusual requirements of the Federal Court Act, the Court may be more disposed to allow a party to make amendments of a wider nature to a statement of claim than it might otherwise be (see Sweet v. Canada, [1999] F.C.J. No. 1403 (C.A.)).

[34]            Both the Prothonotary and the Motions Judge appear to have misunderstood the true nature of the cause of action alleged by Radil in its claim for damages against the Crown.

[35]            The Prothonotary seemed to be of the view that the cause of action was "the way in which he (the Minister) calculated the IVQ" (at para. 35 of his reasons), which led him in his Order to allow amendments on "grounds which might include malfeasance or grounds similar to those set out in Thompson v. MCI (1997), 37 Imm.L.R. (2d) 9 at 15-16 (T.D.) or in Williams v. Canada (1997), 212 N.R. 63 at 71 (F.C.A.)" (see para. 25, supra). This, clearly, was a misdirection. Both these cases dealt with applications for judicial review, not with actions in tort, and malfeasance was not a cause of action relied upon by Radil.

[36]            The Motions Judge, in turn, seems to have based his decision on the understanding that the cause of action was the illegality of the decision of the Minister, rather than the duty of care owed to Radil by the Minister or his officers whatever the legality of the decision. In relying on the decision of this Court in Comeau's Sea Foods Ltd. v. Canada (Minister of Fisheries and Oceans), [1995] 2 F.C. 467, to find that the opportunity given to Radil to seek judicial review of the Minister's decision negated the duty of care, the Motions Judge went beyond what was actually said by Stone J.A. at page 488:

"the availability of adequate administrative law remedies by way of judicial review is a consideration to be taken into account under the second branch of the Anns [(Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.)] test in deciding whether the scope of prima facie duty of care should be negatived in the circumstances of this case".

                                                                                                                                 (my emphasis)

[37]            It is premature, at this early stage of the proceedings, to conclude that Radil has no chance, with appropriate amendments, to demonstrate that the alleged negligent misrepresentation was part of an operational, as opposed to policy decision, that there was a prima facie duty of care and that the scope of the duty was not, in the circumstances, to be negatived or limited. Radil has a steep hill to climb, but it cannot, at this stage, be said that it cannot be done.

[38]            The Prothonotary committed no reviewable error when he allowed the action to go on with appropriate amendments. He erred, however, when he went on to allow the amendments on grounds of malfeasance or on grounds similar to those associated with judicial review proceedings. He should, instead, have invited Radil to make amendments that would plead in more explicit terms negligent misrepresentation by a servant of the Crown and would open the door to findings with respect to the five general requirements listed by the Supreme Court of Canada in The Queen v. Cognos, [1993] 1 S.C.R. 87, i.e.:

The required elements for a successful Hedley Byrne claim have been stated in many authorities, sometimes in varying forms. The decisions of this Court cited above suggest five general requirements: (1) there must be a duty of care based on a "special relationship" between the representor and the representee; (2) the representation in question must be untrue, inaccurate, or misleading; (3) the representor must have acted negligently in making said misrepresentations; (4) the representee must have relied, in a reasonable manner, on said negligent misrepresentation; and (5) the reliance must have been detrimental to the representee in the sense that damages resulted. In the case at bar, the trial judge found that all elements were present and allowed the appellant's claim.

                                                                                                                           (Iacobucci, at 110)

[39]            I would allow the appeal with respect to the claim in damages against the Crown and order that the Statement of claim filed in Court File T-382-99 on March 5, 1999 and the Amended Statement of Claim filed on June 25, 1999 be struck out, but with leave to file a Re-amended Statement of Claim in accordance with these reasons and within fourteen days of the date of the judgment in this appeal.

The claim in damages against B.C. Packers:

does the Federal Court have jurisdiction?

[40]            In its motion to strike out the Statement of Claim, the Crown alleged the following ground:

(f)            the pleading fails to disclose a reasonable cause of action and is otherwise an abuse of the process of the court as beyond the jurisdiction of the court pursuant to the Federal Court Act insofar as the claims in the nature of negligence, fraud, fiduciary or otherwise seeking relief in damages, interest and costs as against the defendant, British Columbia Packers Limited:

                                                                                                                                           (A.B. 33)

[41]            Neither the Prothonotary nor the Motions Judge addressed that issue.

[42]            Counsel for the Crown submits that the Federal Court has no jurisdiction to hear private law claims based on fraud, negligence and fiduciary duty against B.C. Packers. Essentially, the argument goes, the claim by Radil against B.C. Packers cannot be qualified as being based on Canadian maritime law.

[43]            It is settled law that, in order for the Federal Court to have jurisdiction, 1) there must be a statutory grant of jurisdiction by Parliament, 2) there must be an existing body of federal law which is essential to the disposition of the case which nourishes the statutory grant of jurisdiction and 3) the law on which the case is based must be "a law of Canada" as the phrase is used in section 101 of the Constitution Act, 1867 (see ITO - Int'l Terminal Operators v. Miida Electronics, [1986] 1 S.C.R. 752, at 766, per McIntyre J.).

[44]            Subsection 22(1) of the Federal Court Act reads as follows:

[45]            "Canadian maritime law", in turn, is defined as follows in subsection 2(1):

[46]            For subsection 22(1) to apply, the relief must be sought under either Canadian maritime law or any other law of Canada relating to any matter coming within the class of subject of navigation and shipping. I shall deal first with the latter.

[47]            "The class of subject" of "Navigation and Shipping" is precisely that enumerated in section 91(10) of the Constitution Act, 1867. That class of subject is to be contrasted with that of "Sea Coast and Inland Fisheries" found in section 91(12). No authority has been quoted for the proposition that federal laws pertaining to fisheries could be equated, for the purposes of subsection 22(1) of the Federal Court Act, with laws pertaining to navigation and shipping. Clearly, the federal laws at issue in this part of the appeal (the claim of Radil against B.C. Packers), should there be any, would be laws relating to fisheries, not laws relating to navigation and shipping. I am not prepared to hold that a matter which falls under a class of subject listed in section 91 other than the one listed in subsection 91(10) may be found, for the purposes of interpreting subsection 22(1) of the Federal Court Act, to fall also under subsection 91(10) of the Constitution Act, 1867.

[48]            It is sufficient to look at section 23 of the Act, which confers jurisdiction on the Federal Court "in relation to any matter coming within any of the following classes of subjects, namely (a) bills of exchange and promissory notes, where the Crown is a party to the proceedings; (b) aeronautics; and (c) works and undertakings connecting a province with any other province or extending beyond the limits of a province," to be satisfied that when Parliament refers to one class of subject enumerated in section 91 of the Constitution Act, 1867, it refers to that class only, and even then, not necessarily to the whole of the class, as in the case of "Bills of Exchange and Promissory Notes" (s. 91(18)), where the Federal Court is given jurisdiction only when the Crown is a party to the proceedings.

[49]            Is the matter at issue a matter of "Canadian maritime law"?

[50]            What is at issue here is a claim in tort by the owner of a fishing vessel against his agent for failure to ensure a proper transfer of fishing licences by the Department of Fisheries and Oceans.

[51]            The expression "Canadian maritime law" was given a broad meaning by McIntyre J. in ITO:

I would agree that the historical jurisdiction of the Admiralty courts is significant in determining whether a particular claim is a maritime matter within the definition of Canadian maritime law in s. 2 of the Federal Court Act. I do not go so far, however, as to restrict the definition of maritime and admiralty matters only to those claims which fit within such historical limits. An historical approach may serve to enlighten, but it must not be permitted to confine. In my view the second part of the s. 2 definition of Canadian maritime law was adopted for the purpose of assuring that Canadian maritime law would include an unlimited jurisdiction in relation to maritime and admiralty matters. As such, it constitutes a statutory recognition of Canadian maritime law as a body of federal law dealing with all claims in respect of maritime and admiralty matters. Those matters are not to be considered as having been frozen by The Admiralty Act, 1934. On the contrary, the words "maritime" and "admiralty" should be interpreted within the modern context of commerce and shipping. In reality, the ambit of Canadian maritime law is limited only by the constitutional division of powers in the Constitution Act, 1867. I am aware in arriving at this conclusion that a court, in determining whether or not any particular case involves a maritime or admiralty matter, must avoid encroachment on what is in "pith and substance" a matter of local concern involving property and civil rights or any other matter which is in essence within exclusive provincial jurisdiction under s. 92 of the Constitutional Act, 1867. It is important, therefore, to establish that the subject-matter under consideration in any case is so integrally connected to maritime matters as to be legitimate Canadian maritime law within federal legislative competence.

[...]

It is clear, in my view, that such incidental storage by the carrier itself or by a third party under contract to the carrier is also a matter of maritime concern by virtue of the "close, practical relationship of the terminal operation to the performance of the contract of carriage" (per Le Dain J. in the Court of Appeal). It may then be concluded that cargo-handling and incidental storage before delivery and before the goods pass from the custody of a terminal operator within the port area is sufficiently linked to the contract of carriage by sea to constitute a maritime matter within the ambit of Canadian maritime law, as defined in s. 2 of the Federal Court Act.

At the risk of repeating myself, I would stress that the maritime nature of this case depends upon three significant factors. The first is the proximity of the terminal operation to the sea, that is , it is within the area which constitutes the port of Montreal. The second is the connection between the terminal operator's activities within the port area and the contract of carriage by sea. The third is the fact that the storage at issue was short-term pending final delivery to the consignee. In my view, it is these factors, taken together, which characterize this case as one involving Canadian maritime law.

                                                                                                                                      (at 774-776)

[52]            In Monk Corp. v. Island Fertilizers Ltd., [1991] 1 S.C.R. 79, Iacobucci J. said the following:

Indeed, I agree with Hugessen J.A. when he said that the "connecting factors", as I have called them, to maritime law in this case are stronger than they were in ITO itself.

                                                                                                                                             (at 797)

To conclude on this first point, many of the undertakings in the telex relate to a contract of carriage, which is, in my view, clearly a maritime matter within the scope of maritime law. However, under the ITO reasoning of McIntyre J., it is not enough to show that maritime undertakings are involved, rather it must be shown that the specific claims advanced are integrally connected to maritime matters because if they are so connected to the sale of goods, they will be governed, as Island argues, by the provisions of the Sale of Goods Act of Prince Edward Island.

                                                                                                                                             (at 797)

Similarly, with the claim for demurrage, its maritime character, as Pratte J.A. found, cannot be denied. Demurrage relates directly to the discharge of a vessel's cargo, again in this case finding its source in the contract of carriage aspects of the agreement entered into between the parties. The nature and scope of demurrage is clearly a topic that is defined and informed by maritime law considerations.

                                                                                                                                             (at 798)

[...] In my view, the activity of employing shore cranes to discharge a ship's cargo has even more of a proximity with a contract of carriage and maritime matters than the short-term storage of goods was found to have by McIntyre J. in ITO.

In short, the underlying activity to which the claims of Monk relate was the discharge of cargo, which was an obligation on Island arising from the contract of carriage aspects of the agreement between the parties and which had a maritime character.

                                                                                                                                             (at 799)

The maritime character of the claims is not diminished by the fact that Monk was the seller of the urea and Island was the purchaser with no privity between Island and the owners of the vessel Super Spirit. Island assumed a maritime obligation -- the discharge of cargo -- in connection with the sale and purchase of the urea. It is that maritime obligation that is the foundation for the claims by Monk. Parties can assume maritime obligations governed by maritime law even though they may not formally be parties to a charter-party or even a contract of carriage by sea. What is important for purposes of maritime law jurisdiction is that their claim be integrally connected with maritime matters.

Finally, I would say that the claims of Monk are maritime in character and are not in any way an encroachment of what is in "pith and substance" a matter falling within s. 92 of the Constitution Act, 1867. The claims here advanced do not in my view have as their foundation or source sale of goods elements of the telex arrangement between Monk and Island and therefore are not within the provincial scope of property and civil rights or within any other heading of s. 92.

I should also like to add that the approach I have taken in this matter corresponds with McIntyre J.'s urging that the terms "maritime" and "admiralty" should be interpreted within the modern context of commerce and shipping and should not be static or frozen. Such terms should rather be capable of adjusting to evolving circumstances unencumbered by rigid doctrinal categorization and historical straitjackets.

                                                                                                                               (at 800 and 801)

                                                                                                                                 (my emphasis)

[53]            I do not read ITO and Monk as suggesting that the courts should readily expand the concept of "Canadian maritime law". Quite to the contrary, the Court was careful to ensure that the "foundation or source" of the claim was so "integrally connected with maritime matters" as to not be encroaching on what was, in pith or substance, a matter falling within provincial competence. This is not an easy requirement to meet, as is evidenced by the lengthy analysis both McIntyre J. in ITO and Iacobucci J. in Monk went through before finding in favour of the Court's jurisdiction and as is evidenced, also, by the dissenting opinions of Justices Beetz, Chouinard and Lamer in ITO and L'Heureux-Dubé in Monk. To the extent that any enlargement of the concept of "Canadian maritime law" is generally made at the expense of the provincial competence in the matter of "Property and Civil Rights in the Province", it is easy to understand the reluctance of civil law judges to include into federal maritime law matters that have traditionally not been associated with the context of commerce and shipping. It is indeed one thing to adjust, as the Supreme Court invites us to do, the maritime jurisdiction of the Federal Court to "the modern context of commerce and shipping", it is another to extend it, through the pretext of modernity, to claims the foundation or source of which was, and still is, essentially a non-maritime matter.

[54]            The appellant recognizes, at paragraph 16 of its Reply Memorandum of Fact and Law, that its claim against B.C. Packers "initially arises out of an agreement to purchase a fishing licence from B.C. Packers". It goes on to say that "In order to transfer the fishing licence to the appellant, B.C. Packers entered into an agreement with the Department of Fisheries and Oceans which resulted in the appellant's "T" licence being transferred (or swapped) with a "T" licence owned by B.C. Packers".

[55]            The appellant then jumps, at paragraph 17, to the conclusion that "the grant of jurisdiction by section 22(1) is very broad" and "includes any claim 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 and encompasses the common law principles of tort, i.e. negligence, fraud and fiduciary duty". I pause here to note that these common law principles of tort are only encompassed by section 22(1) to the extent that the matters in which they arise are integrally connected to maritime law.

[56]            I know of no authority, and counsel for the appellant has provided the Court with none, that has gone so far as to extend the concept of "Canadian maritime law" to matters initially arising out of an agreement to purchase a fishing licence from a private party, or to matters arising out of a breach of an agency contract entered into for the purpose of purchasing a fishing licence from a private party. Further, I know of no authority which has included in "Canadian maritime law" matters related to the issuance of fishing licences or the attribution of fishing quotas independent of a cause of action already integrally connected to maritime matters.

[57]            In Pakistan National Shipping Corp. v. Canada (C.A.), [1997] 3 F.C. 601, this Court found that it had jurisdiction with respect to the appellant's third party claim in tort for negligent representation in relation to the suitability of the cargo to withstand the stresses and strains of an ocean voyage. The Court had first found, however, that the claims asserted against the appellant in the main action were indisputably maritime matters (shipping of goods by sea under a contract of carriage). At p. 622, Stone J.A. expressed the following view:

I do not regard the circumstance that the alleged misrepresentation may have been made on land as conclusively establishing a want of jurisdiction. The cause of action in tort, if it can be made out, did not become crystallized until the loss or damage -- if proven -- occurred after some of the drums collapsed in the course of the ocean voyage. In Whitbread, supra [Whitbread v. Walley, [1990] 3 S.C.R. 1273], at pages 1288-1289, in referring to the above quoted statement of principle of McIntyre J. in ITO, supra, at page 779, La Forest J. stated "that tortious liability which arises in a maritime context is governed by a body of maritime law within the exclusive legislative jurisdiction of Parliament".

[58]            In H. Smith Packing Corp. v. Gainvir Transport Ltd. (1989), 61 D.L.R. (4^th) 489 (F.C.A.), Desjardins J.A. decided as follows:

In the case at bar, the representations by the shipping agents both with regard to the conditions of carriage of the cargo and its coverage by insurance arose because of the existence of the contract of carriage by sea. There would have been no occasion for them to occur had there not been such a contract. It would be hard not to concede that those representations were integrally connected with the contract of carriage by sea and with the shipping operation itself. In such circumstances, the law of agency becomes "a law of Canada" within the meaning of s. 101 of the Constitution Act, 1867.

                                                                                                                                             (at 494)

[...] In view of the wide definition of Canadian maritime law under the second part of the definition contained in s. 2 of the Federal Court Act, the law of agency in situations where it is integrally connected with shipping becomes part of Canadian maritime law as defined in that section.

                                                                                                                                             (at 495)

She added, at page 495:

The factual situation in the case at bar is to be distinguished from that of Intermunicipal Realty & Development Corp. v. Gore Mutual Ins. Co., supra [[1978] 2 F.C. 691], where it was decided that a claim against an insurance broker based on allegations that the insurance broker had negligently misrepresented certain facts, was not in respect of any maritime or admiralty matter that was part of "Canadian maritime law". The court was, however, careful to note that the allegations in question were not "allegations of negligence under the subject contract policies of marine insurance" but were allegations "founded in the agency relationship generally". This is not our case. Here both types of misrepresentations made by the shipping agents are interwoven with the fact that there existed a contract of carriage by sea.

[59]            The appellant also relies on Kuhr v. The "Friedrich Busse", [1982] 2 F.C. 709, where Addy J. found that a contract, whereby the plaintiffs were to supply fish at sea to the defendant vessel which was obliged to remain within the specified fishing areas and receive delivery of and pay for the fish, was a maritime contract. As I understand the reasons for judgment and assuming them to be correct in law, the foundation of the decision resides, in my view, in the following observations:

What is of equal importance, however, is the question of whether a contract between the owners of two ships, one of which is to supply the fish on the high seas to the other which is obliged to remain within the specified fishing areas and receive delivery of and pay for the fish, would fall within the meaning of the words "Canadian maritime law or any other law of Canada relating to any matter coming within the class of subject of navigation and shipping" contained in subsection 22(1).

[...]

The contract is not merely one covering the transfer of property in goods but also more essentially one which deals with the actual transfer and delivery of possession of those goods on the high seas between two ships. The goods themselves are to come from an agreed area of the sea and the contracting parties have mutually agreed that their vessels are to operate there and carry out the provisions of the contract in that specified area. It is difficult to conceive of a situation or of an undertaking which is more maritime in nature that the subject-matter covered by the contract in issue and I feel confident that had any Admiralty Court in England been faced with that factual situation, it would necessarily have assumed jurisdiction and legally disposed of the issue between parties.

The applicant also relied on another decision of Mr. Justice Collier in support of his argument , namely the case Sumitomo Shoji Canada Ltd. v. The Ship "Juzan Maru" [1974] 2 F.C. 488; 49 D.L.R. (3d) 277. In that case the Court declined jurisdiction, but it was clearly on the basis that, on examining the true essence of the contract in the light of all the circumstances and the particular facts of the case, it appeared that the maritime or shipping aspects of the business arrangement between the parties were minuscule or incidental, (ref. p. 284 of the above-mentioned report) [[1974] 2 F.C. at pp. 496-497], and that the essence of the arrangement was not maritime. I fully agree with that principle and with the test of dominant features and objects applied in the case of Underwater Gas Developers Ltd. v. Ontario Labour Relations Board (1960) 24 D.L.R. (2d) 673; [1960] O.R. 416. Those are precisely the tests which, when applied to the facts of the present case, convince me that the matter is predominantly maritime in character.

                                                                                                                                      (at 716-717)

                                                                                                                                 (my emphasis)

[60]            None of these cases is helpful to the appellant. Quite to the contrary, they tend to show that the Court will not assert its admiralty jurisdiction in agency claims unless the true essence of the contract relied upon is maritime. This is not the case here, where the sole factor possibly connected to maritime law is the fact that the licence with respect to which the agency contract was entered into happens to be issued in relation to an activity occurring at sea. There is no contract for carriage of goods by sea. There is no marine insurance. There are no goods at issue. Nothing has happened at sea. There is no issue as to the seaworthiness of the ships. The ships are not party to the action. There are no in rem proceedings. There are no shipping agents. There are no admiralty laws or principles or practices applicable. The claim, at best and incidentally, may be said to relate to the ability of a ship to perform certain fishing activities in accordance with requirements that have nothing to do with navigation and shipping and everything to do with fisheries.

[61]            The following decisions, it seems to me, are much more relevant to the issue before us than those referred to by the appellant.

[62]            In Bornstein Seafoods Canada Ltd. v. Hutcheon et al (1997), 140 F.T.R. 245 (F.C.T.D.), Gibson J. found that a dispute over the ownership of a fishing quota does not come within the definition of maritime law. He stated, at paragraph 30 of his decision:

Despite the able argument of counsel for the plaintiff, I could not conclude that the subject matter of this action is so integrally connected to maritime matters as to be legitimate Canadian maritime law. That is not to say that the subject matter of this action might not well be within federal legislative competence, relating as it does to groundfish quota and the entitlement thereto, which in turn relates to the federal head of jurisdiction "seacoast and inland fisheries". However, on the facts of this matter, quota entitlement turns substantially on the interpretation of the contract referred to earlier between the plaintiff and the Hutcheon defendants as well as on laws, practices and procedures related to Canada's westcoast groundfish fishery.

[63]            In Inter Atlantic Canada Ltd. v. The Rio Cuyaguatije, [2001] F.C.J. No. 549, MacKay J. confirmed the ruling of Prothonotary Morneau to the effect that a dispute over an agreement to exploit a fishing quota did not fall within the jurisdiction of the Federal Court.

[64]            In Amirault v. The Prince Nova (1998), 147 F.T.R. 133 (T.D.), MacKay J. held that a claim for damages arising out of breach of an agreement of sale for a ship was within the jurisdiction of the Federal Court, but that a claim in tort for interference in said contract against a private citizen was not.

[65]            In Transports Insurance Co. Inc. v. The Ship "Ondine" (1982), 138 D.L.R. (3d) 745 (F.C.A.), leave to appeal to the Supreme Court of Canada refused September 22, 1982, this Court held that although the Federal Court had jurisdiction with respect to an action arising out of a collision between two ships, third party proceedings arising from the attempt to settle the claim did not fall within the court's jurisdiction. Chief Justice Thurlow, at 746-747, held that the claim is

"simply a claim that arises from negotiations carried on by the defendant and the third party or from a contract arranged between them. It does not appear to us to arise out of the collision or out of the claim for damages caused by the collision or to arise out of or to be connected with any claim on a contract of marine insurance".

[66]            Counsel for the appellant suggested that this claim fell under paragraph 22(2)(m) of the Federal Court Act:

[67]            This argument has no merit. A fishing licence, and even more so a quota attributed to a fishing licence, cannot be equated with "goods, materials or services...supplied to a ship". This Court, in Joys v. M.N.R. (1995), 128 D.L.R. (4^th) 385 (F.C.A.), has held that fishing licences are not "goods" (at 393), that they are not an integral part of the vessel (at 394 and 401) and that they are not, properly speaking, issued to a vessel, but to a person in respect of a vessel (at 395).

[68]            It is also very doubtful that the concept of ‘necessaries" in maritime law could be invoked in the present case. Counsel for the appellant has not referred the Court to any authority for the proposition that a fishing licence could form part of the "necessaries" provided to a ship. Necessaries, in my view, do not extend to fishing licences issued by the Minister with respect to a ship. As noted by William Tetley, in Maritime Liens and Claims, 2^nd Ed., International Shipping Publications, Blais, Montréal 1998,

"Necessaries may be defined as supplies, repairs and equipment (and in some jurisdictions other goods and services) ordered on the credit of the ship and which are generally beneficial to the ship, so that it may carry out the common venture."

                                                                                                                                             (at 551)

(For a list of goods or services to which the concept of "necessaries" has been extended, and which does not include fishing licences, see Nigel Meeson, Admiralty Jurisdiction and Practice, 2^nd Ed., 2000, at 2-163.) Fishing licences are not issued on the credit of a ship and the Minister of Fisheries and Oceans can hardly be compared with a claimant for necessaries or a creditor.

[69]            I would add that even if paragraph 22(2)(m) were found to be applicable, it would not bring the appellant very far. As noted by McIntyre J. in ITO, at page 772:

[...] Even if a claim could be shown to fall within s. 22(2) the inquiry does not end. That section does no more than grant jurisdiction and it does not create operative law. One must still be able to point to some applicable and existing federal law which nourishes the grant of jurisdiction: see Quebec North Shore Paper [[1977] 2 S.C.R. 1054">Quebec North Shore Paper Co. v. Canadian Pacific Ltd.., [1977] 2 S.C.R. 1054] and McNamara [[1977] 2 S.C.R. 654">McNamara Construction (Western) Ltd. v. The Queen, [1977] 2 S.C.R. 654] cases.

[70]            For example, in Quebec and Ontario Transportation Company Limited v. The Ship Incan St. Laurent, [1979] 2 F.C. 834 (F.C.A.), confirmed by the Supreme Court of Canada at [1980] 2 S.C.R. 242">[1980] 2 S.C.R. 242, the Federal Court of Appeal found that an action based on a Joint Venture Agreement and seeking to determine whether the appellant was the beneficial owner of some interest in the respondent ship, was beyond this Court's admiralty jurisdiction. Le Dain J. noted that the claim was based on an alleged failure to perform an obligation to transfer ownership found in a contract and, on the basis of the decision of the Supreme Court of Canada in [1977] 2 S.C.R. 1054">Quebec North Shore Paper Company v. Canadian Pacific Limited, [1977] 2 S.C.R. 1054, he ruled that the Federal Court had no jurisdiction in the matter as there was no applicable and existing federal law upon which the jurisdiction of the Federal Court could be exercised.

[71]            In the end, I reach the conclusion that the claim in damages by Radil against B.C. Packers for breach of an agency contract entered into for negotiating the purchase of a fishing licence with officials of the Department of Fisheries and Oceans does not fall under the admiralty jurisdiction of the Federal Court of Canada. The appeal should be dismissed with costs and the Statement of Claim in Court File T-382-99 should be struck out as regards B.C. Packers.

[72]            This is not to say that the Federal Court has no jurisdiction with respect to fisheries issues, assuming the present claim against B.C. Packers to be a fisheries issue. But such issues do not come to this Court under its admiralty jurisdiction but under its jurisdiction with respect to the judicial review of the legality of decisions made by officers of the Department of Fisheries and Oceans or under its jurisdiction with respect to actions in tort against the Crown.

The application for a stay

[73]            The judicial review (converted to an action) of the Minister's decision -- i.e. Court File T-192-98 -- can only proceed in the Federal Court of Canada.

[74]            The claim in damages against B.C. Packers can only proceed in the Supreme Court of British Columbia.

[75]            The claim in damages against the Crown can proceed in the Federal Court of Canada or in the Supreme Court of British Columbia.

[76]            No single Court, therefore, can resolve the totality of Radil's claims. Yet, the claims in damages against the Crown and against B.C. Packers may, in a large measure, be influenced by the fate of the judicial review application (Court File No. T-192-98) which should preferably be heard first. It makes more sense, in my view, not to stay the claim in damages against the Crown in Court File No. T-382-99 which, according to the Order of Prothonotary Hargrave dated June 16, 1999, may be heard at the same time as Court File No. T-182-98 or immediately following it, as the trial judge may determine.

[77]            Furthermore, Radil was precisely told by this Court to do what it eventually did, i.e. institute two parallel proceedings. Radil was also told, in an Order which is still in force, that it could have its two proceedings heard by the Federal Court. In the circumstances, it would be unfair to Radil and it would serve no useful purpose to stay Court File No. T-382-99. I would let Radil decide on its own whether it wants to proceed in its claim in damages against the Crown in the Federal Court.

[78]            The application for a stay should be dismissed. There should be no costs on the appeal with respect to that application.

DISPOSITION

[79]            The appeal should be granted in part and the following Order substituted to that of the Motions Judge to take effect as from the date of the judgment in this appeal:

With respect to the declaratory relief sought in the Statement of Claim, the appeal from the Order of the Prothonotary is allowed and the Statement of Claim is struck out.

With respect to the claim in damages against the Crown, the appeal from the Order of the Prothonotary is dismissed and both the Statement of Claim and the Amended Statement of Claim are struck out with leave to amend within fourteen days of the date of judgment. Costs to plaintiff.

With respect to the claim against B.C. Packers, the appeal from the Order of the Prothonotary is allowed with costs and the Statement of Claim is quashed for lack of jurisdiction of the Federal Court of Canada.

With respect to the claim against Titan, the appeal from the Order of the Prothonotary is allowed with costs and the Statement of Claim is quashed.

No stay is ordered.

[80]            B.C. Packers and Titan should have their costs on the appeal as against Radil.

[81]            Radil should have its costs on the appeal as against the Crown.

                                                                                                                                            "Robert Décary"                               

                                                                                                                                                                  J.A.

"I agree.

     Alice Desjardins, J.A."

"I agree.

     J. Edgar Sexton, J.A."

                                                    FEDERAL COURT OF APPEAL

                              NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:                                             A-786-00

STYLE OF CAUSE:                           Radil Bros Fishing Co. Ltd. v. The Queen and others

PLACE OF HEARING:                     Vancouver, British Columbia

DATE OF HEARING:                       September 25, 2001

REASONS FOR

JUDGMENT :                                     Décary

CONCURRED IN BY:                      Desjardins, J.A.

Sexton, J.A.

DATED:                                                October 19, 2001

APPEARANCES:

Mr. Raymond Pollard                           FOR THE APPELLANT

Mr. Paul Partridge                                  FOR THE RESPONDENT, Her Majesty the Queen

Mr. Murray B. Bloc                              FOR THE RESPONDENT, British Columbia Packers Limited

Mr. David Brown                                  FOR THE RESPONDENT, Titan Fishing Ltd.

SOLICITORS OF RECORD:

Richard Buell Sutton                               FOR THE APPELLANT

Vancouver, B.C.

Mr. Morris Rosenberg                          FOR THE RESPONDENT, Her Majesty the Queen

Deputy Attorney General of Canada

Frasken Martineau DuMoulin              FOR THE RESPONDENT, British Columbia Packers

Vancouver, B.C.                                    Limited

Stikeman Elliott                                     FOR THE RESPONDENT, Titan Fishing Ltd.

Vancouver, B.C.