Date: 20010125
Docket: A-29-00
CORAM: LINDEN J.A.
ISAAC J.A.
BETWEEN:
ECU-LINE N.V.
Appellant
- and -
Z.I. POMPEY INDUSTRIE
- and -
SOCIÉTÉ LYONNAISE DE MESSAGERIES NATIONALES
- and -
JOHN S. JAMES CO.
- and -
POLYFIBRON TECHNOLOGIES INC.
- and -
ELLEHAMMER PACKAGING INC.
- and -
ALL OTHERS HAVING AN INTEREST IN THE CARGO LADEN
ON BOARD THE M.V. "CANMAR FORTUNE"
Respondents
Heard at Vancouver, British Columbia on Tuesday, December 5, 2000
Judgment delivered at Ottawa, Ontario on Thursday, January 25, 2001
REASONS FOR JUDGMENT BY: Isaac J.A.
CONCURRED IN BY: Karen R. Sharlow J.A.
A.M. Linden J.A.
Date: 20010125
Docket: A-29-00
BETWEEN:
ECU-LINE N.V.
Appellant
- and -
Z.I. POMPEY INDUSTRIE
- and -
SOCIÉTÉ LYONNAISE DE MESSAGERIES NATIONALES
- and -
JOHN S. JAMES CO.
- and -
POLYFIBRON TECHNOLOGIES INC.
- and -
ELLEHAMMER PACKAGING INC.
- and -
ALL OTHERS HAVING AN INTEREST IN THE CARGO LADEN
ON BOARD THE M.V. "CANMAR FORTUNE"
Respondents
REASONS FOR JUDGMENT
ISAAC J.A.
[1] This is an appeal from an order made by a Motions Judge in the Trial Division on 21 December 1999, dismissing the appellant's appeal from an order made by the Prothonotary at Vancouver on 22 September 1999, dismissing the appellant's motion for a stay of proceedings.
[2] The reasons of the Motions Judge are reported in [1999] F.C.J. No. 2017. Those of the Prothonotary are reported in [1999] F.C.J. No. 1984.
Facts
[3] The facts of the case appear at length in the reasons of the Motions Judge and of the Prothonotary and need not be repeated here in detail. However, in order to facilitate appreciation of the argument presented to us by counsel for the parties, I will recite them in summary form.
[4] The dispute between the parties arises out of a contract for the carriage of goods from Anvers, Belgium, to Seattle, Washington. The contract is a bill of lading signed on behalf of the appellant, as carrier, on 23 January, 1997, to carry two crates of goods therein described from Anvers, Belgium to Seattle, U.S.A. In the trade such a bill of lading is referred to as a port to port bill of lading.
[5] On 23 January, 1996, the respondent, Z.I. Pompey Industrie, as plaintiff, commenced an action in the Trial Division alleging in the statement of claim, that the appellant, in breach of the port-to-port contract of carriage by sea, carried goods from Anvers to Montreal by sea and from there shipped them by rail to Richmond, British Columbia where damage to the cargo was noted. Thereafter, the goods were shipped to Seattle, U.S.A.
[6] The respondents say that this unilateral change in the mode of carriage amounted to a fundamental breach of the contract and entitles them to damages.
[7] In paragraph 12 of the Statement of Claim, they plead all presumptions of fact and law which apply in their favour.
[8] On 17 June, 1998, the appellant, as defendant, delivered a statement of defence in which, inter alia, they pleaded several articles of the Hague-Visby Rules and that the bill of lading contained an express term that any claims in dispute shall be determined by the Court of Antwerp and no other Court.
[9] The appellant also pleaded that the bill of lading contained a deviation clause which allowed them to change the mode of carriage.
[10] By notice of motion dated 17 November 1998, the appellant brought a motion seeking a stay of proceedings. The grounds of the motion were stated to be:
| ... that the Bill of Lading requires any claim or dispute arising under the Bill of Lading shall be determined by the courts in Antwerp and no other Courts", and that the contract evidence [sic] by or contained in the Bill of Lading is governed by the law of Belgium. |
[11] As stated earlier, the Prothonotary at Vancouver dismissed the appellant's motion for the stay of proceedings for the reasons contained in [1999] F.C.J. No. 154. The appellant appealed the order which the Prothonotary made to the Trial Division. The appeal was heard by the Motions Judge who dismissed it for the reasons contained in 1999 F.C.J. No. 2017. The appellant now appeals from the latter order.
Issues
[12] In his memorandum of fact and law filed in this appeal, counsel for the appellant raised three issues for the consideration of the Court, namely:
| a) What is the standard of review of the decision of the Motions Judge? |
| b) What is the standard of review of the decision of the Prothonotary? |
| c) Whether the Prothonotary exercised his discretion in a manner that required intervention by the Motions Judge. |
[13] In his reasons, the Motions Judge addressed, first, the issue whether the Prothonotary erred in law or in principle by embarking, in the context of a stay application, on a preliminary determination whether the appellant had committed a fundamental breach of the contract of carriage. After quoting from the passage in The Eleftheria1 and reviewing the conclusions of the Prothonotary in light of it, he concluded at paragraph 32 of his reasons:
| The decision to stay a proceeding is a question of facts of each case [sic] and the Prothonotary had the discretion to render the decision he had, based on the facts before the Court after addressing the criteria established by The Eleftheria case. |
[14] He rejected the appellant's submission that the preliminary finding of fundamental breach by the Prothonotary foreclosed any further judicial consideration of that issue, stating that the issue was to be decided by the judge trying the case.
[15] In dismissing the appeal, the Motions Judge concluded that the Prothonotary did not err in considering the issue of breach of contract in his assessment of the facts of the case, in the exercise of his discretion.
Positions of the Parties
[16] The appellant contends that there exists between the parties a valid contract and that no fundamental breach or unreasonable deviation occurred. The appellant also contends that even if a fundamental breach or unreasonable deviation had occurred, this would not have rendered the jurisdiction clause enforceable.
[17] The appellant's second contention was that this Court is without jurisdiction to deal with the merits of this case because of the existence of a jurisdiction clause in the contract. On this basis, the Prothonotary was wrong to refuse the motion for a stay.
[18] The appellant's third contention was that the Prothonotary erred in inquiring into the merits of the dispute between the parties in the context of a stay application.
[19] The appellant stated correctly, in my view, that the test for reviewing decisions by a prothonotary is whether the exercise of discretion by the prothonotary was clearly wrong, i.e., he based his decision on a wrong principle of law or a misapprehension of the facts, or his decision raises a question vital to the final issue of the case.
[20] He then contended that since the Prothonotary proceeded on a wrong principle and had decided a question that was vital to the final issue of the case, the Motions Judge was wrong to dismiss the appellant's appeal.
[21] Relying on the decision of this Court in Jian Sheng Co. et al. v. Great Tempo S.A. et al.2 that in reviewing a discretionary order of a Motions Judge, an appellate court should uphold it unless it was arrived at on a wrong basis or was plainly wrong, the appellant contended that this Court should reverse the decision of the Motions Judge because his decision was arrived at on a wrong basis.
[22] The respondents are in agreement with the appellant respecting the test to be applied in reviewing discretionary orders made by prothonotaries. However, they contend that the Court of Appeal should only interfere with the exercise of discretion by the Motions Judge where the exercise of such discretion resulted in an error of law or where it was shown that the Motions Judge had failed to take into account all relevant considerations in reaching his decision.
[23] Reza v. Canada3 is the leading authority in Canada on the issue of appellate review of the discretionary decision of a Motions Judge. At issue in the Supreme Court of Canada was whether there was any basis for the interference by the Court of Appeal with the exercise of discretion of the Motions Judge in granting a stay.
[24] The Court concluded unanimously that the Motions Judge properly exercised his discretion and that there was no basis for interfering with his decision to stay the proceedings which the appellant had commenced. Rejecting Abella J.A.'s test of patent unreasonableness for reviewing the exercise of judicial discretion by the Motions Judge, the Court concluded that
| ... the test for reviewing the exercise of judicial discretion is whether the judge at first instance has given sufficient weight to all relevant considerations. |
[25] In my view, that is the test which this Court must apply in reviewing the discretionary order made by the Motions Judge in this case.
[26] Here, the Motions Judge considered the extensive reasons of the Prothonotary and, like him, found that The Eleftheria did not govern the case. He then proceeded to consider the other matters which the Prothonotary had considered and concluded that the decision of the Prothonotary should stand. I am in respectful agreement with the decision of the Motions Judge for the reasons that follow.
[27] The burden of the appellant's submission is that when, as here, a contract contains a jurisdiction clause requiring that all disputes, wherever they arise, are to be dealt with by the Courts of a particular jurisdiction, Anglo-American and Anglo-Canadian jurisprudence both conclude that the dispute must be dealt with by the Courts of the jurisdiction the parties have agreed to. The appellant says that since The Eleftheria no case in Anglo-Canadian or Anglo-American jurisprudence has held otherwise. I disagree. Jian Sheng Co., supra, is a case where this Court held that a prothonotary was right to refuse a stay in circumstances where the appellant had not led sufficient evidence to support the existence of jurisdiction elsewhere than Canada.
[28] The Eleftheria was decided in 1969. In 1975, the House of Lords decided American Cyanamid Co. v. Ethicon Ltd.4 In that case, their Lordships relaxed the requirements that an applicant must show in order to obtain an interlocutory injunction. Henceforth, the test to be applied on applications for interlocutory injunctive relief is three fold; first, a preliminary and tentative assessment of the merits of the case to show that there is a serious issue to be tried; second, a consideration as to whether the party seeking the interlocutory injunction would suffer irreparable harm unless the injunction is granted; and third, a determination as to which party would suffer the greater harm as a result of the granting or refusal of an interlocutory injunction.
[29] In Manitoba (Attorney General) v. Metropolitan Stores (MTS) Ltd.5 Beetz J., writing for a unanimous Court, stated (at paragraph 30):
| A stay of proceedings and an interlocutory injunction are remedies of the same nature. In the absence of a different test prescribed by the statute, they have sufficient characteristics in common to be governed by the same rules and the courts have rightly tended to apply to the granting of interlocutory stay the principles which they follow with respect to interlocutory injunctions... |
[30] In my respectful view, although he did not refer to these authorities, it would appear that this is what the Prothonotary had in mind when he wrote the following passage which the Motions Judge reproduced at paragraph 29 of his reasons.
| ECU-Line submits I ought not to deal with fundament breach or deviation, for those are factual issues to be determined on the merits by the trial judge. The answer to this is not complex. An interim injunction, obtained on an interlocutory application, which requires a testing of the waters by looking at the strength of the case, the harm being caused and the balance of convenience, is analogous to denial of a stay of [sic] the basis of a strong case that the jurisdiction clause is just not applicable. The interim injunction does not handicap the trial judge, nor should the denial of a stay on the basis that the jurisdiction clause is in all likelihood not available. Any prejudice to ECU-Line in having to litigate in Canada can be compensated by costs. |
[31] Since the 1975 decision in American Cyanamid, supra, both British and Canadian jurisprudence have evolved and the proper test to apply in stay applications is the tripartite test employed in cases of applications for interlocutory injunctions. In my view, the Motions Judge in this case took into account all relevant considerations. I therefore see no reason to interfere with his order dismissing the appellant's appeal.
[32] I would, therefore, dismiss the appeal with costs.
J.A.
"I agree
"I agree
Karen R. Sharlow J.A."
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1 [1969] 1 Lloyd's Rep. 237.
2 [1998] 3 F.C. 418.
3 [1994] 2 S.C.R. 394.
4 [1975] 1 All ER 504 (H of L).
5 [1987] 1 S.C.R. 110.
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