Date: 20120830
Docket: A-258-11
A-259-11
Citation: 2012 FCA 225
CORAM: NADON
J.A.
DAWSON J.A.
MAINVILLE
J.A.
Docket : A-258-11
BETWEEN:
SIEMENS CANADA LIMITED
Appellant
and
J.D. IRVING, LIMITED,
MARITIME MARINE CONSULTANTS
(2003) INC.,
SUPERPORT MARINE SERVICES LTD.,
and
NEW BRUNSWICK POWER NUCLEAR
CORPORATION
Respondents
Docket: A-259-11
BETWEEN:
SIEMENS CANADA LIMITED
Appellant
and
MARITIME MARINE CONSULTANTS
(2003) INC.,
J.D. IRVING, LIMITED, SUPERPORT
MARINE SERVICES LTD.,
NEW BRUNSWICK POWER NUCLEAR
CORPORATION,
BMT MARINE AND OFFSHORE SURVEYS
LTD.
Respondents
REASONS FOR JUDGMENT
NADON J.A.
[1]
Before
us are two appeals which arise from events that occurred on October 15, 2008,
at the port of Saint John, New Brunswick, where, in the course of loading upon
a barge, two valuable steam turbine rotors fell into the waters of Saint John
harbour.
[2]
As
a result, the appellant, Siemens Canada Limited (“Siemens”), commenced
proceedings in the Ontario Superior Court of Justice against, inter alia,
the respondents J.D. Irving, Ltd. (“Irving”), and Maritime Marine Consultants
(2003) Inc. (“MMC”) for recovery of its loss. That action was commenced on
April 8, 2010.
[3]
On
April 7, and on April 30, 2010, Irving and MMC respectively filed statements of
claim in the Federal Court seeking, inter alia, a declaration that they
were entitled to limit their liability in regard to the October 15, 2008 incident
(“the incident”), to a sum of $500,000, plus interest, to the date of the
constitution of a limitation fund pursuant to paragraph 29(b), section 29.1,
and subsection 32(2) of the Marine Liability Act, S.C. 2001, c. 6 (the
“MLA”), and an order constituting a limitation fund pursuant to paragraph 33(1)(a)
of the MLA. Irving and MMC’s proceedings were both commenced pursuant to
subsection 32(2) of the MLA.
[4]
In
the Federal Court proceedings, Siemens brought motions for an interlocutory stay
of the actions to the extent that they pertained to the constitution and
distribution of a limitation fund pursuant to section 33 of the MLA, and for a
permanent stay of the actions insofar as Irving and MCC claimed an entitlement
to limit their liability pursuant to sections 28 and 29 of the MLA. In response
to Siemens’ motions, Irving and MMC filed motions in which they sought, inter
alia, directions from the Federal Court as to the manner in which their limitation
actions were to be heard and determined, as well as an order enjoining Siemens
and others from commencing or continuing proceedings against them before any
court other than the Federal Court in respect of the incident.
[5]
On
June 29, 2011, in an order cited as 2011 FC 791, Heneghan J. (the “judge”) dismissed
Siemens’ motions for an interlocutory and a permanent stay of the Federal Court
proceedings and she enjoined Siemens and others from commencing or continuing
proceedings against Irving and MMC before any court or tribunal other than the
Federal Court.
[6]
Siemens
now appeals both the order dismissing its motions to stay the Federal Court
proceedings and the order enjoining it from commencing or continuing
proceedings against Irving and MMC in any court other than the Federal Court.
The Facts
[7]
In
September 2006, Siemens contracted to provide three “low pressure modules” (the
“modules”) to Atomic Energy of Canada Ltd. (“AECL”). The modules are extremely
complex and expensive pieces of equipment essential for operating nuclear
generating stations. Each module comprised an outer casing and an internal
turbine rotor weighing 115 tonnes and costing $12,500,000 to manufacture (the
“rotors”). AECL subsequently assigned this contract to the respondent, New
Brunswick Power Nuclear Corporation (“NBPNC”).
[8]
In
January 2007, Irving contracted with Siemens to transport the rotors by water
from Saint John harbour to Point Lepreau, New Brunswick (the “move”). Due to the
size and value of the rotors, the move necessitated special arrangements. In
October 2008, Irving chartered a barge of approximately 258 tonnes – the SPM
125 – from the respondent Superport Marine Services Ltd. (“Superport”), a Nova Scotia company. Irving retained MMC to act as marine architect, to approve the barge’s
stability for the move, and to prepare a plan for the safe loading and securing
of the rotors on the barge. MMC’s work involved conducting a number of stability
calculations. BMT Marine and Offshore Surveys Ltd. (“BMT”), a Quebec-based
company, was retained by Siemens to ensure that the barge could properly
accommodate the dynamics of the load, to approve the use of the barge, and to witness
and supervise the handling of the rotors.
[9]
On
October 15, 2008, during the course of loading, two rotors fell off the barge
into the waters of Saint John harbour. As a result, the rotors were significantly
damaged and Siemens had to take a number of steps to mitigate NBPNC’s loss.
[10]
Transport
Canada investigated the incident under the Canada Shipping Act, S.C.
2001, c. 26 (the “Shipping Act”). While no charges were laid, it
concluded that the incident arose from a failure to conduct a number of
important calculations.
[11]
As
I indicated earlier, Irving and MMC commenced limitation actions in the Federal
Court, pursuant to the MLA and Rule 496(1) of the Federal Court Rules,
SOR/98-106. They sought, without admitting liability, a declaration that their
liability for the incident was limited to $500,000 plus interest and an order
constituting a limitation fund. In these proceedings, Irving and MMC named
Siemens, inter alia, as a defendant.
[12]
In
its action commenced in the Ontario Superior Court, Siemens claimed a sum of
$40,000,000 in damages against, inter alia, Irving and MMC, for
negligence and breach of contract. The thrust of Siemens’ action is that MMC
failed to make the calculations necessary to ensure the safety of the move from
Saint John to Point Lepreau. By reason of this failure, Siemens says that both
Irving and MMC are precluded from limiting their liability pursuant to the MLA.
The Relevant Legislative
Provisions
[13]
The
following provisions of the Federal Courts Act, R.S.C. 1985, c. F-7, the
Federal Courts Rules, and the MLA are relevant to these appeals:
Federal Courts Act
22. (1) The Federal
Court has concurrent original jurisdiction, between subject and subject as
well 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.
(2)
Without limiting the generality of subsection (1), for greater certainty, the
Federal Court has jurisdiction with respect to all of the following:
…
(e)
any claim for damage sustained by, or for loss of, a ship including, without
restricting the generality of the 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;
(f)
any claim arising out of an agreement relating to the carriage of goods on a
ship under a through bill of lading, or in respect of which a through bill of
lading is intended to be issued, for loss or damage to goods occurring at any
time or place during transit;
…
(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;
(j) any claim for salvage
including, without restricting the generality of the foregoing, claims for
salvage of life, cargo, equipment or other property of, from or by an
aircraft to the same extent and in the same manner as if the aircraft were a
ship;
…
50. (1) The Federal Court of
Appeal or the Federal Court may, in its discretion, stay proceedings in any
cause or matter
(a) on the ground that the
claim is being proceeded with in another court or jurisdiction; or
(b) where for any other reason
it is in the interest of justice that the proceedings be stayed.
Federal Courts Rules
496. (1) A party
bringing an application under subsection 33(1) of the Marine Liability Act
shall bring it as an action against those claimants whose identity is known
to the party.
(2) A party referred to in
subsection (1) may bring an ex parte motion for directions respecting service
on possible claimants where the number of possible claimants is large or the
identity of all possible claimants is unknown to the party.
Marine Liability Act
2. The definitions in this section
apply in this Act.
“Admiralty Court” means the
Federal Court.
…
24. The definitions in this
section apply in this Part.
“Convention” means the
Convention on Limitation of Liability for Maritime Claims, 1976, concluded at
London on November 19, 1976, as amended by the Protocol, Articles 1 to 15 of
which Convention are set out in Part 1 of Schedule 1 and Article 18 of which
is set out in Part 2 of that Schedule.
“maritime claim” means a claim
described in Article 2 of the Convention for which a person referred to in
Article 1 of the Convention is entitled to limitation of liability.
25. (1) For the purposes of this
Part and Articles 1 to 15 of the Convention,
(a) “ship” means any vessel or
craft designed, used or capable of being used solely or partly for
navigation, without regard to method or lack of propulsion, and includes
(i) a ship in the process of
construction from the time that it is capable of floating, and
[…]
(b) the definition “shipowner”
in paragraph 2 of Article 1 of the Convention shall be read without reference
to the word “seagoing” and as including any person who has an interest in or
possession of a ship from and including its launching; and
(c) the expression “carriage by
sea” in paragraph 1(b) of Article 2 of the Convention shall be read as
“carriage by water”.
(2) In the event of any
inconsistency between sections 28 to 34 of this Act and Articles 1 to 15 of
the Convention, those sections prevail to the extent of the inconsistency.
26. (1) Subject to the other
provisions of this Part, Articles 1 to 15 and 18 of the Convention and
Articles 8 and 9 of the Protocol have the force of law in Canada.
(2) The Governor in
Council may, by regulation, amend Part 3 of Schedule 1 to add or delete a
reservation made by Canada under Article 18 of the Convention.
(3) This Part does not apply to
a claim that is the subject of a reservation made by Canada.
29. The maximum liability for
maritime claims that arise on any distinct occasion involving a ship of less
than 300 gross tonnage, other than claims referred to in section 28, is
(a) $1,000,000 in respect of
claims for loss of life or personal injury; and
(b) $500,000 in respect of any
other claims.
32. (1) The Admiralty Court has
exclusive jurisdiction with respect to any matter relating to the
constitution and distribution of a limitation fund under Articles 11 to 13 of
the Convention.
(2) Where a claim is made
or apprehended against a person in respect of liability that is limited by
section 28, 29 or 30 of this Act or paragraph 1 of Article 6 or 7 of the
Convention, that person may assert the right to limitation of liability in a
defence filed, or by way of action or counterclaim for declaratory relief, in
any court of competent jurisdiction in Canada.
33. (1) Where a claim is made or
apprehended against a person in respect of liability that is limited by
section 28 or 29 of this Act or paragraph 1 of Article 6 or 7 of the
Convention, the Admiralty Court, on application by that person or any other
interested person, including a person who is a party to proceedings in
relation to the same subject-matter before another court, tribunal or
authority, may take any steps it considers appropriate, including
(a) determining the amount of
the liability and providing for the constitution and distribution of a fund
under Articles 11 and 12 of the Convention;
(b) joining interested persons
as parties to the proceedings, excluding any claimants who do not make a
claim within a certain time, requiring security from the person claiming
limitation of liability or from any other interested person and requiring the
payment of any costs; and
(c) enjoining any person from
commencing or continuing proceedings in any court, tribunal or authority
other than the Admiralty Court in relation to the same subject-matter.
|
Loi sur les Cours fédérales
22. (1) La Cour
fédérale a compétence concurrente, en première instance, dans les cas —
opposant notamment des administrés — où une demande de réparation ou un
recours est présenté en vertu du droit maritime canadien ou d’une loi
fédérale concernant la navigation ou la marine marchande, sauf attribution
expresse contraire de cette compétence.
(2) Il demeure entendu
que, sans préjudice de la portée générale du paragraphe (1), elle a
compétence dans les cas suivants :
…
e) une demande d’indemnisation
pour l’avarie ou la perte d’un navire, notamment de sa cargaison ou de son
équipement ou de tout bien à son bord ou en cours de transbordement;
f) une demande d’indemnisation,
fondée sur une convention relative au transport par navire de marchandises
couvertes par un connaissement direct ou devant en faire l’objet, pour la
perte ou l’avarie de marchandises en cours de route;
…
h) une demande d’indemnisation
pour la perte ou l’avarie de marchandises transportées à bord d’un navire,
notamment dans le cas des bagages ou effets personnels des passagers;
i) une demande fondée sur une
convention relative au transport de marchandises à bord d’un navire, à
l’usage ou au louage d’un navire, notamment par charte-partie;
j) une demande d’indemnisation
pour sauvetage, notamment pour le sauvetage des personnes, de la cargaison,
de l’équipement ou des autres biens d’un aéronef, ou au moyen d’un aéronef,
assimilé en l’occurrence à un navire;
…
50. (1) La Cour d’appel fédérale
et la Cour fédérale ont le pouvoir discrétionnaire de suspendre les
procédures dans toute affaire :
a) au motif que la demande est
en instance devant un autre tribunal;
b) lorsque, pour quelque autre
raison, l’intérêt de la justice l’exige.
Règles des Cours fédérales
496. (1) Toute requête
présentée par une partie en vertu du paragraphe 33(1) de la Loi sur la
responsabilité en matière maritime est introduite par voie d’action contre
les réclamants dont elle connaît l’identité.
(2) La partie visée au
paragraphe (1) peut présenter à la Cour une requête ex parte pour obtenir des
directives sur la signification aux réclamants éventuels lorsque leur nombre
est élevé ou qu’elle ne connaît pas l’identité de chacun d’eux.
Loi sur la responsabilité en droit
maritime
2. Les définitions qui suivent
s’appliquent à la présente loi.
« Cour d’amirauté » La Cour
fédérale.
…
24. Les définitions qui
suivent s’appliquent à la présente partie.
« Convention » La Convention de
1976 sur la limitation de la responsabilité en matière de créances maritimes
conclue à Londres le 19 novembre 1976 — dans sa version modifiée par le
Protocole — dont les articles 1 à 15 figurent à la partie 1 de l’annexe 1 et
l’article 18 figure à la partie 2 de cette annexe.
« créance maritime » Créance
maritime visée à l’article 2 de la Convention contre toute personne visée à
l’article 1 de la Convention.
25. (1) Pour l’application de la
présente partie et des articles 1 à 15 de la Convention :
a) « navire » s’entend d’un
bâtiment ou d’une embarcation conçus, utilisés ou utilisables, exclusivement
ou non, pour la navigation, indépendamment de leur mode de propulsion ou de
l’absence de propulsion,
…
b) la définition de «
propriétaire de navire », au paragraphe 2 de l’article premier de la
Convention, vise notamment la personne ayant un intérêt dans un navire ou la
possession d’un navire, à compter de son lancement, et s’interprète sans
égard au terme « de mer »;
c) la mention de « transport
par mer », à l’alinéa 1b) de l’article 2 de la Convention, vaut mention de «
transport par eau ».
(2) Les articles 28 à 34
de la présente loi l’emportent sur les dispositions incompatibles des
articles 1 à 15 de la Convention.
26. (1) Sous réserve des autres
dispositions de la présente partie, les articles 1 à 15 et 18 de la
Convention et les articles 8 et 9 du Protocole ont force de loi au Canada.
(2) Le gouverneur en conseil
peut, par règlement, modifier la partie 3 de l’annexe 1 pour y ajouter ou en
supprimer toute réserve faite par le Canada au titre de l’article 18 de la
Convention.
(3) La présente partie ne
s’applique pas à la créance qui fait l’objet d’une réserve faite par le
Canada.
29. La limite de responsabilité
pour les créances maritimes — autres que celles mentionnées à l’article 28 —
nées d’un même événement impliquant un navire d’une jauge brute inférieure à
300 est fixée à :
a) 1 000 000 $ pour les créances pour
décès ou blessures corporelles;
b) 500 000 $ pour les autres créances.
32. (1) La Cour d’amirauté a
compétence exclusive pour trancher toute question relative à la constitution
et à la répartition du fonds de limitation aux termes des articles 11 à 13 de
la Convention.
(2) Lorsque la responsabilité
d’une personne est limitée aux termes des articles 28, 29 ou 30 de la présente
loi ou du paragraphe 1 des articles 6 ou 7 de la Convention, relativement à
une créance — réelle ou appréhendée — , cette personne peut se prévaloir de
ces dispositions en défense, ou dans le cadre d’une action ou demande
reconventionnelle pour obtenir un jugement déclaratoire, devant tout tribunal
compétent au Canada.
33. (1) Lorsque la responsabilité
d’une personne est limitée aux termes des articles 28 ou 29 de la présente
loi ou du paragraphe 1 des articles 6 ou 7 de la Convention, relativement à
une créance — réelle ou appréhendée — , la Cour d’amirauté peut, à la demande
de cette personne ou de tout autre intéressé — y compris une partie à une
procédure relative à la même affaire devant tout autre tribunal ou autorité —
, prendre toute mesure qu’elle juge indiquée, notamment :
a) déterminer le montant de la
responsabilité et faire le nécessaire pour la constitution et la répartition
du fonds de limitation correspondant, conformément aux articles 11 et 12 de
la Convention;
b) joindre tout intéressé comme
partie à la procédure, exclure tout créancier forclos, exiger une garantie
des parties invoquant la limitation de responsabilité ou de tout autre
intéressé et exiger le paiement des frais;
c) empêcher toute personne
d’intenter ou de continuer quelque procédure relative à la même affaire
devant tout autre tribunal ou autorité.
|
Also
of relevance to these proceedings are a number of provisions of the Convention
on Limitation of Liability for Marine Claims, 1976 (the “Convention”):
Article 1
1.
Shipowners and salvors, as hereinafter defined, may limit their liability in
accordance with the rules of this Convention for claims set out in Article 2.
2.
The term "shipowner" shall mean the owner, charterer, manager and
operator of a seagoing ship.
[…]
4.
If any claims set out in Article 2 are made against any person for whose act,
neglect or default the shipowner or salvor is responsible, such person shall
be entitled to avail himself of the limitation of liability provided for in
this Convention.
Article 2
1.
Subject to Articles 3 and 4 the following claims, whatever the basis of
liability may be, shall be subject to limitation of liability:
(a)
claims in respect of loss of life or personal injury or loss of or damage to
property (including damage to harbour works, basins and waterways and aids to
navigation), occurring on board or in direct connexion with the operation of
the ship or with salvage operations, and consequential loss resulting
therefrom;
(b)
claims in respect of loss resulting from delay in the carriage by sea of
cargo, passengers or their luggage;
(c)
claims in respect of other loss resulting from infringement of rights other
than contractual rights, occurring in direct connexion with the operation of
the ship or salvage operations;
(d)
claims in respect of the raising, removal, destruction or the rendering
harmless of a ship which is sunk, wrecked, stranded or abandoned, including
anything that is or has been on board such ship;
(e)
claims in respect of the removal, destruction or the rendering harmless of
the cargo of the ship;
(f)
claims of a person other than the person liable in respect of measures taken
in order to avert or minimize loss for which the person liable may limit his
liability in accordance with this Convention, and further loss caused by such
measures.
Article 4
A
person liable shall not be entitled to limit his liability if it is proved
that the loss resulted from his personal act or omission, committed with the
intent to cause such loss, or recklessly and with knowledge that such loss
would probably result.
Article 11
1.
Any person alleged to be liable may constitute a fund with the Court or other
competent authority in any State Party in which legal proceedings are
instituted in respect of claims subject to limitation. The fund shall be
constituted in the sum of such of the amounts set out in Articles 6 and 7 as
are applicable to claims for which that person may be liable, together with
interest thereon from the date of the occurrence giving rise to the liability
until the date of the constitution of the fund. Any fund thus constituted
shall be available only for the payment of claims in respect of which
limitation of liability can be invoked.
|
Article 1
1. Les propriétaires de navires
et les assistants, tels que définis ci-après, peuvent limiter leur
responsabilité conformément aux règles de la présente Convention à l’égard
des créances visées à l’article 2.
2. L’expression « propriétaire
de navire », désigne le propriétaire, l’affréteur, l’armateur et
l’armateur-gérant d’un navire de mer.
…
4. Si l’une quelconque des
créances prévues à l’article 2 est formée contre toute personne dont les
faits, négligences et fautes entraînent la responsabilité du propriétaire ou
de l’assistant, cette personne est en droit de se prévaloir de la limitation
de la responsabilité prévue dans la présente Convention.
Article 2
1. Sous réserves des articles 3
et 4, les créances suivantes, quel que soit le fondement de la
responsabilité, sont soumises à la limitation de la responsabilité :
a) créances pour mort, pour
lésions corporelles, pour pertes et pour dommages à tous biens (y compris les
dommages causés aux ouvrages d’art des ports, bassins, voies navigables et
aides à la navigation) survenus à bord du navire ou en relation directe avec
l’exploitation de celui-ci ou avec des opérations d’assistance ou de
sauvetage, ainsi que pour tout autre préjudice en résultant;
b) créances pour tout préjudice
résultant d’un retard dans le transport par mer de la cargaison, des
passagers ou de leurs bagages;
c) créances pour d’autres
préjudices résultant de l’atteinte à tous droits de source
extracontractuelle, et survenus en relation directe avec l’exploitation du
navire ou avec des opérations d’assistance ou de sauvetage;
d) créances pour avoir
renfloué, enlevé, détruit ou rendu inoffensif un navire coulé, naufragé,
échoué ou abandonné, y compris tout ce qui se trouve ou s’est trouvé à bord;
e) créances pour avoir enlevé,
détruit ou rendu inoffensive la cargaison du navire;
f) créances produites par une
personne autre que la personne responsable, pour les mesures prises afin de
prévenir ou de réduire un dommage pour lequel la personne responsable peut
limiter sa responsabilité conformément à la présente Convention, et pour les
dommages ultérieurement causés par ces mesures.
Article 4
Une
personne responsable n’est pas en droit de limiter sa responsabilité s’il est
prouvé que le dommage résulte de son fait ou de son omission personnels,
commis avec l’intention de provoquer un tel dommage, ou commis témérairement
et avec conscience qu’un tel dommage en résulterait probablement.
Article 11
1. Toute personne dont la
responsabilité peut être mise en cause peut constituer un fonds auprès du
tribunal ou de toute autre autorité compétente de tout État Partie dans
lequel une action est engagée pour des créances soumises à limitation. Le
fonds est constitué à concurrence du montant tel qu’il est calculé selon les
dispositions des articles 6 et 7 applicables aux créances dont cette personne
peut être responsable, augmenté des intérêts courus depuis la date de
l’événement donnant naissance à la responsabilité jusqu’à celle de la
constitution du fonds. Tout fonds ainsi constitué n’est disponible que pour
régler les créances à l’égard desquelles la limitation de la responsabilité
peut être invoquée.
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The Federal Court Decision
[14]
The
judge began by reviewing the procedural history of the matter before her and
the evidence adduced by the parties. She then turned to Siemens’ argument that
the Federal Court was without jurisdiction to hear its claim for damages, i.e.
because the claim did not fall within the Court’s maritime jurisdiction. More
particularly, Siemens argued that its claim was one for breach of contract by Irving, pursuant to a purchase order dated January 11, 2007, for the transportation of the
rotors from Saint John to Point Lepreau. In Siemens’ submission, that contract
was not a contract for the carriage of goods by sea.
[15]
The
judge rejected Siemens’ argument. While agreeing with Siemens that mere
proximity to water was insufficient to ground maritime jurisdiction in the
Federal Court (Judge’s reasons, paragraph 48), the judge concluded that “… it
is clear that the nature of Siemens’ claim is essentially maritime law”
(Judge’s reasons, paragraph 53).
[16]
In
so concluding, the judge relied on a number of factors, namely: (a) that the incident
occurred on water, (b) that the rotors were on board a ship; (c) marine
surveyors were involved in the transportation preparations; (d) that the incident
was investigated by Transport Canada in accordance with the Transport Canada
Marine Safety Policy for investigating maritime occurrences under the authority
of section 219 of the Shipping Act; and (e) that Siemens’ allegation of
misrepresentations pertained to the preparation for the loading of the rotors
on the barge, thus raising an issue of seaworthiness, which issue was subject
to applicable admiralty laws, principles and practices.
[17]
Also
of relevance, in the judge’s opinion, was the fact that the alleged breach of
contract and negligence pertained to an agreement for the carriage of goods by
sea, i.e. carriage of the rotors from Saint John to Point Lepreau, and
that MMC had been engaged by Irving to provide marine architectural services in
regard to the loading and the carriage of the rotors.
[18]
In
coming to this conclusion, the judge relied on the Supreme Court of Canada’s
decisions in ITO-Int’l Terminals Operators v. Miida Electronics, [1986]
1 S.C.R. 752 (“ITO”), Q.N.S. Paper Co. v. Chartwell Shipping Ltd.,
[1989] 2 S.C.R. 683 (“Q.N.S.”), and Isen v. Simms, [2006] 2
S.C.R. 349 (“Isen”). She also relied on this Court’s decision in Radil
Bros. Fishing Co. v. Canada (Department of Fisheries and Oceans, Pacific
Region), [2002] 2 F.C. 219 (“Radil”). The judge also relied on
subsection 22(1) and paragraphs 22(2)(e), (h) and (i) of the Federal Courts Act.
In addition, she also found relevant the Shipping Act and the MLA which,
by way of subsection 26(1) thereof, incorporated a number of provisions of the
Convention. At paragraph 64 of her reasons, the judge made the following
remarks:
[64] Regardless of the merit
of Siemens’ submissions regarding the entitlement of Irving, MMC and BMT to
limit their liability, it is clear that the ultimate findings on these issues
will be made with reference to the provisions of the MLA and the Convention.
Put another way, Canadian maritime law will apply to the issues Siemens raises
regarding the limitation of liability of Irving, MMC, and BMT.
[19]
Then,
beginning at paragraph 67 of her reasons, the judge turned to Siemens’ stay
motions. She held that the two-part test of Mon-Oil Ltd. v. Canada,
[1989] F.C.J. No. 227 (Q.L.), 26 C.P.R. (3d) 379 (F.C.T.D.) (“Mon-Oil”),
was the appropriate legal test for determining whether to grant a stay. At
paragraph 77 of her reasons, she wrote:
77. … The two part test of Mon-Oil
Ltd. v. Canada (1989), 26 C.P.R. (3d) 379 (F.C.T.D.), should be considered
in respect of Siemens’ motion for a stay. That test requires the Court to
consider two questions, that is will the continuation of the action cause
prejudice to the defendant, in this case Siemens, and will the stay cause an
injustice to the plaintiffs, that is Irving and MMC.
[20]
The
application of the Mon-Oil test led the judge to dismiss both Siemens’
motion for an interlocutory stay and its motion for a permanent stay. With
regard to the interlocutory stay, she held that Siemens had not demonstrated
that the limitation actions commenced by Irving and MMC would cause it
prejudice. As a result, exercising her discretion, she declined to grant an
interlocutory stay of the limitation actions. With regard to the motion for a
permanent stay of the limitation actions, the judge held that Siemens’ argument
that because Irving’s conduct had been reckless and was thus not entitled to
limit its liability, was premature. In her view, it was not possible, on the
basis of the evidence, to conclude that Irving or MMC were not entitled to
limit their liability in regard to Siemens’ loss. At paragraphs 83 and 84 of
her reasons, the judge made the following remarks:
[83] I am not persuaded that
Siemens has presented evidence to show that it would be prejudiced by the
continuation of the limitation proceedings. It has proceeded on the premise
that the Defendants will not be able to limit liability, due to their conduct,
relying on the application of Article 4 of the Convention. However, this is
only an argument. The application of Article 4 will require evidence; see Société
Telus Communications v. Peracomo Inc., 2011 FC 494.
[84] Regardless of the
ultimate characterization of the Defendants’ conduct, Siemens’ current
arguments do not demonstrate prejudice and in any event, legal arguments are no
substitution for evidence.
[21]
Finally,
the judge turned to the motions to enjoin filed by Irving and MMC, noting that
these motions had been brought pursuant to section 33 of the MLA. She began, at
paragraph 122 of her reasons, by stating that the first order of business was
to determine the test applicable to the exercise of the power to enjoin. She
referred to Prothonotary Hargrave’s decision in Canadian Pacific Railway Co.
v. Sheena M (The), [2000] 4 F.C. 159 (F.C.T.D.) (“The Sheena M”),
where the learned prothonotary suggested that the tripartite test in RJR-MacDonald
Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311 (“RJR-MacDonald”),
was the test applicable to a motion to enjoin proceedings before another court
or tribunal, noting however that in the case before him, the prothonotary had
not decided the point.
[22]
The
judge then turned to subsection 33(1) of the MLA, which provides that the
Federal Court may, on application by a person who may be entitled to limit his
or her liability pursuant to sections 28 or 29 of the MLA, take any step that
it considers appropriate, including, inter alia, “enjoining any person
for commencing or continuing proceedings in any court, tribunal or authority
other than the Admiralty Court, in relation to the same matter”. At paragraph
124 of her reasons, the judge opined as follows:
[124] The language of section
33 of the Act is very broad. Subsection 33(1) says that the “Admiralty Court… may take any steps it considers appropriate”, including the extraordinary
remedy identified in paragraph 33(1)(c) of enjoining proceedings before any
other court, tribunal or authority. The availability of this remedy indicates
the value attached to the importance of adjudicating all issues relevant to the
constitution and distribution of a limitation fund, in one forum. Proceeding in
one Court contributes to the expeditious disposition of issues relating to
limitation of liability.
[23]
The
judge then stated, at paragraph 125 of her reasons, that “[t]he concept of ‘appropriate’
includes the element of suitability”. Turning to the facts before her, she
opined that both the action commenced by Siemens in the Ontario Superior Court
and the limitation actions commenced by Irving and MMC in the Federal Court were
proceedings in relation to the same “subject matter”, i.e. “damage to the
rotors, liability for that damage and any limitation of that liability”
(Judge’s reasons, paragraph 128).
[24]
The
judge was also of the view that proceeding with the limitation actions in the
Federal Court and enjoining Siemens from pursuing its proceedings in the Ontario
Superior Court would save significant costs to the parties. She reasoned as
follows at paragraph 137 of her reasons:
[137] The fact that Siemens’
claim is in the millions is not a principled reason to postpone adjudication of
the issues in the limitation proceedings, foremost whether limitation of
liability is available. Indeed, in my opinion the discrepancy between the
amount claimed and the prima facie amount of the limitation fund is a factor
weighing heavily in favour of proceeding with the limitation actions and enjoining
the liability action. This is a practical consideration which the Court
acknowledges. There will be significant costs saved for all parties and persons
by proceeding in this manner.
[25]
Also
of relevance, in the judge’s opinion, was the fact that the class of potential
plaintiffs or claimants against the limitation fund remained unknown and that
it was open for Siemens to begin another action in the Federal Court or to file
a counterclaim in the limitation actions in which it was a defendant. At
paragraph 156 of her reasons, the judge summarized her view of the matter in
the following terms:
[156] Contrary to Siemens’
submissions, the Federal Court is the most efficient forum to determine all the
issues relative to the incident. It is beyond doubt that the Federal Court has
jurisdiction over the issue of liability. Only the Federal Court has
jurisdiction over the constitution and distribution of a limitation fund. While
such a fund may be incidental to the determinations of liability and
limitation, having the entirety of the proceedings considered in one Court
would be the most efficient. The issue of entitlement to limit can be
determined in the limitation actions.
[26]
As
a result, the judge allowed the motions to enjoin and ordered that no
proceedings be continued or commenced before any court or tribunal other than
the Federal Court, in respect of the incident.
[27]
I
should also say that in addition to disposing of the motions to stay and the
motions to enjoin, the judge ordered the establishment of a limitation fund
pursuant to Articles 9 and 11 of the Convention. In making this order, the
judge reasoned as follows. First, the Federal Court was the Admiralty Court, as
defined at section 2 of the MLA. Second, by reason of section 32 of the MLA,
the Federal Court had exclusive jurisdiction with regard to the constitution
and distribution of a limitation fund. Lastly, the barge was a ship of less
than 300 tonnes in regard to which the maximum liability for all claims, pursuant
to section 29(b) of the MLA, was $500,000.
The Issues
[28]
In
order to determine the appeals before us, the following issues must be
addressed:
a.
What
is the appropriate standard of review?
b.
Whether
the Federal Court has jurisdiction over Siemens’ action for damages.
c.
Whether
the judge erred in enjoining Siemens and others from pursuing their claims
against Irving and MMC in a tribunal other than the Federal Court.
d.
Whether
the judge erred in dismissing Siemens’ motions for a stay of the limitation
actions commenced in the Federal Court.
Analysis
1. What is the
appropriate standard of review?
[29]
The
judge’s Order enjoining Siemens and others from commencing or continuing
proceedings in any court other than the Federal Court and her Order dismissing
Siemens’ motions for a stay of the Federal Court proceedings, are mostly
discretionary orders, to which deference is usually accorded on appeal.
However, this Court is entitled to substitute its own discretion if the judge
is found to have given insufficient weight to relevant factors, proceeded on a
wrong legal principle, misapprehended the facts or an obvious injustice would
otherwise arise from the discretionary order (see: Elders Grain Co. v. Ralph
Misener (The), 2005 FCA 139, [2005] 3 F.C.R. 367, at paragraph 13; Éditions
Ecosociété v. Banro Corp., 2012 SCC 18, at paragraph 41). The criteria for
exercising legal discretion are legal criteria and, hence, their definition or
misapplication raise questions of law that are subject to appellate review
(see: British Columbia (Min. of Forests) v. Okanagan Indian Band,
2003 SCC 71, [2003] 3 S.C.R. 371, at paragraph 43).
2. Whether the Federal
Court has jurisdiction over Siemens’ action for damages
[30]
As
I indicated earlier, the judge had no difficulty concluding that the
proceedings to which the incident gave rise fell within the maritime
jurisdiction of the Federal Court. In my view, Siemens’ action against Irving
and MMC is within the Federal Court’s maritime jurisdiction and, as a result,
the judge made no error in so concluding.
[31]
Siemens
argues, at paragraphs 85 to 91 of its Memorandum of Fact and Law, that “some or
all of the matters raised in the Ontario action are not maritime in nature, and
thus outside the jurisdiction of the Federal Court” (Siemens’ Memorandum, paragraph
85). It further argues, at paragraph 89, that its claim is directed at Irving’s
failure to direct a complete transportation plan, adding that the fact that
Irving’s breach of the transportation plan “happened to materialize when the rotors
were being loaded onto a barge does not change the nature” of its claim.
Siemens also argues that since neither MMC nor BMT are shipowners under the
MLA, its claim against them does not fall under the enumerated heads of
jurisdiction under subsection 22(2) of the Federal Courts Act, nor under
the general grant of jurisdiction under subsection 22(1).
[32]
Both
Irving and MMC take the position that there is maritime jurisdiction in the
Federal Court over Siemens’ claim for damages.
[33]
My
reasons for concluding that the judge made no error on this point are as
follows.
[34]
Beginning
at paragraph 38 of her reasons, the judge comprehensively reviewed the Federal
Court’s maritime jurisdiction. The general grant of maritime jurisdiction to
the Federal Court is found in section 22 of the Federal Courts Act. It
is very broad and includes any claim under or by virtue of Canadian maritime
law or any other law of Canada relating to navigation or shipping. For greater
certainty, subsection 22(2) non-exhaustively lists a variety of claims that
fall within this jurisdiction. More particularly, the Court has jurisdiction in
respect of:
22. (2) Without limiting the
generality of subsection (1), for greater certainty, the Federal Court has
jurisdiction with respect to all of the following:
[…]
(e) any claim for damage
sustained by, or for loss of, a ship including, without restricting the
generality of the 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;
[Emphasis added]
|
22. (2) Il demeure entendu que,
sans préjudice de la portée générale du paragraphe (1), elle a compétence
dans les cas suivants:
…
e) une demande d’indemnisation
pour l’avarie ou la perte d’un navire, notamment de sa cargaison ou
de son équipement ou de tout bien à son bord ou en cours de transbordement;
…
h) une demande d’indemnisation
pour la perte ou l’avarie de marchandises transportées à bord d’un navire,
notamment dans le cas des bagages ou effets personnels des passagers;
i) une demande fondée sur
une convention relative au transport de marchandises à bord d’un navire, à
l’usage ou au louage d’un navire, notamment par charte-partie;
[Non-souligné dans
l’original]
|
[35]
Once a
particular claim is found to fall within the enumerated headings, there is
necessarily substantive maritime law to support the claim (See: Skaarup Shipping Corp. v. Hawker Industries Ltd., [1980] 2 F.C. 746 (C.A.)).
[36]
By its
express wording, subsection 22(1) bestows concurrent original
jurisdiction on the Federal Court. As courts of inherent jurisdiction,
provincial superior courts also have general jurisdiction over maritime
matters, which can only be extinguished by clear and explicit statutory
language (See: Ordon Estate v. Grail, [1998] 3 S.C.R. 437 (“Ordon
Estate”); Ontario (A.G.) v. Pembina Exploration Canada, [1989] 1
S.C.R. 206 (“Pembina”)). Thus, provincial superior courts can assume
jurisdiction over maritime matters so long as they respect the rules of private
international law. Hence, a provincial superior court will have jurisdiction if
a defendant is present in its geographical territory, the defendant consents to
the court’s jurisdiction (either contractually or through attornment) or a real
and substantial connection between the litigation’s subject matter and the
province exists (See: Club Resorts Ltd. v. Van Breda, 2012 SCC 17, (“Van
Breda”) at paragraph 79; Breeden v. Black, 2012 SCC 19, at paragraph
19 (“Breeden”)).
[37]
The scope of
the Federal Court’s maritime jurisdiction has been litigated on numerous
occasions. In Monk Corp. v. Island Fertilizers Ltd, [1991] 1 S.C.R. 779 (“Monk”),
the Supreme Court held that the test for determining whether the subject-matter
under consideration was one of maritime law required that the subject-matter be
“so integrally connected to maritime matters as to be legitimate Canadian
maritime law”. The test can be made out even if the parties are not privy to a
formal maritime contract: see Monk at paragraph 40. More recently, this
test was reiterated by the Supreme Court in Ordon Estate at paragraph 46,
and in Isen at paragraph 21.
[38]
A number of
cases illustrate the application of this deceptively simple principle. A claim
against the vendor of vegetable oil drums which leaked and caused damage to a
ship was found to be a matter of maritime law: Pakistan National Shipping
Corp. v. Canada, [1997] 3 F.C. 601 (C.A.). Stuffing a container that was to
be placed on a ship was also found to raise maritime issues: Caterpillar
Overseas S.A. v. "Canmar Victory" (The) [1999] F.C.J. No. 1186
(Q.L.), 153 F.T.R. 266, 250 N.R. 192 (F.C.A.). Claims relating to warehousing
and storing of goods after their unloading from a ship were also found to be of
a maritime nature: in Pantainer Ltd. v. 996660 Ont. Ltd. [2000] F.C.J.
No. 334 (Q.L.), 183 F.T.R. 211 (F.C.) and in ITO. However, personal
injury suffered when attaching a pleasure craft to a trailer on land using a
bungee cord, although occurring very close to water, was found not to constitute
a maritime matter (See: Isen), nor was a shipowner’s action against an
agent regarding a contract to negotiate fishing licenses found to be within the
Federal Court’s jurisdiction (See: Radil).
[39]
The essence
of Siemens’ argument is that its claims are not maritime in nature because Irving agreed to provide a “full transportation plan” and that the property damage just
“happened to occur when being loaded onto a barge” (Siemens’ Memorandum, paragraph
89). This appears to be the same argument made before the judge.
[40]
With respect
to the first prong of Siemens’ argument, the judge clearly set out the factors which,
in her opinion, justified a conclusion that Siemens’ claim was maritime in
nature. At paragraphs 54 to 56 of her reasons, the judge opined as follows:
[54] The incident occurred on
the water. Preparations for the transportation of the rotors involved marine
surveyors, that is MMC and BMT, and a cargo insurer, that is AXA. The rotors
were on board a ship, that is the SPM 125. The incident was investigated in
accordance with the Transport Canada Marine Safety Policy for investigating
maritime occurrences under the authority of section 219 of the Canada Shipping
Act, 2001.
[55] The misrepresentations
alleged by Siemens relate to the preparation for loading the barge, raising an
issue of seaworthiness. That issue is subject to applicable admiralty laws,
principles and practices.
[56] The alleged breach of
contract and negligence relate to an agreement for the carriage of goods by
sea. Siemens argues that the purchase order, which is a contract, is not a
matter subject to Canadian maritime law. Nevertheless, the object of that
contract is the transportation of the rotors from the harbour in Saint John to the nuclear plant at Point Lepreau. The obligation of a carrier, in respect
of a contract of carriage of goods, is to safely load and deliver the goods;
see The "Muncaster Castle", [1961] 1 Lloyd's Rep. 57 (H.L.):
Judgment, paras. 54-56.
[41]
Thus, the
judge reviewed the factual context of Siemens’ claim as required by the Supreme
Court. The factors which she considered clearly support her conclusion that the
subject matter of Siemens’ claim is sufficiently connected to maritime matters
to be within the Federal Court’s jurisdiction. Further, to the extent that
Siemens is relying on the form of its agreement with Irving to avoid maritime
jurisdiction, its argument must fail based on the Supreme Court’s decision in Monk.
[42]
With regard
to the second prong of Siemens’ argument, i.e. that the damage to the rotors
“happened to materialize when the rotors were being loaded onto a barge does
not change the nature” of its claim and, hence, that its claim is not of a
maritime nature, the judge referred to the Supreme Court’s decision in Isen
where the Court, at paragraph 22, made the following remarks:
22. Commercial shipping was
traditionally viewed as within the scope of Parliament's jurisdiction over
navigation and shipping. Shipping contracts involve not only the safe carriage
of goods over the sea, but also the movement of goods on and off a ship…
[43]
It is
indisputable that Siemens’ claim arises from the movement of goods onto a ship.
In my view, Siemens’ claim against Irving and MMC is clearly of a maritime
nature. The fact that the agreement was made in the form of a purchase order, that
Siemens argues that the precise promise that was breached was Irving’s promise
to provide “a complete transportation plan” or that the rotors were near the
port or the barge are, in my respectful view, of no relevance. Siemens’ claim
is one arising from an agreement relating to the carriage of goods in or on a
ship, it is a claim for loss or damage to goods carried in or on a ship, and it
is also a claim for damage to or loss of cargo or property in or on or being loaded
on or off a ship (paragraphs 22(e), (h) and (i) of the Federal Courts Act).
[44]
Consequently,
the judge’s conclusion on this point is, in my opinion, without error.
[45]
I now turn to
the third issue.
3. Whether the judge
erred in enjoining Siemens and others from pursuing their claims against Irving
and MMC in a tribunal other than the Federal Court.
[46]
In order to
give answers to this question and to the following one with regard to the
motions to stay the Federal Court proceedings, it is necessary to have a brief
look at the MLA, the Convention and the Protocol Amending the Convention (“the
Protocol”). I note that subsection 26(1) of the MLA provides that Articles 1 to
15 and 18 of the Convention and Articles 8 and 9 of the Protocol have the force
of law in Canada. It is of crucial importance to remember that the provisions
of the MLA at issue in this appeal, particularly those pertaining to the right
to limit liability and the constitution and distribution of a limitation fund,
are meant to give effect to the Convention of 1976 and the Protocol of 1996.
[47]
Prior to
Canada’s adoption of the 1976 Convention and the 1996 Protocol, the relevant
provisions of the Canada Shipping Act gave effect to the International
Convention Relating to the Limitation of the Liability of Owners of Seagoing
Ships, Brussels, 10 October 1957 (“the 1957 Convention”). Under that
regime, a shipowner, in order to limit his liability, had the burden of
establishing that damage or loss caused by his ship did not result from his
fault or privity (see: Stein et al v. Kathy K. (The), [1976] 2 S.C.R.
802 (“The Kathy K”); Rhône (The) v. Peter A.P. Widener (The),
[1993] 1 S.C.R. 497) (“The Rhône”). The relevant provisions of the Canada
Shipping Act, R.S.C. 1970, c. S-9, as they read at the relevant time, are
as follows:
647.
…
(2) The owner of a ship, whether registered in Canada or not, is not, where
any of the following events occur without his actual fault or privity,
namely,
.
. .
(d)
where any loss or damage is caused to any property, other than property
described in paragraph (b), or any rights are infringed through
(i)
the act or omission of any person, whether on board that ship or not, in the
navigation or management of the ship, in the loading, carriage or discharge
of its cargo or in the embarkation, carriage or disembarkation of its
passengers, or
(ii)
any other act or omission of any person on board that ship;
liable
for damages beyond the following amounts, namely,
…
(f)
in respect of any loss or damage to property or any infringement of any
rights mentioned in paragraph (d), an aggregate amount equivalent to 1,000
gold francs for each ton of that ship's tonnage.
649.
(1) Sections 647 and 648 extend and apply to
…
any
person acting in the capacity of master or member of the crew of a ship and
to any servant of the owner or of any person described in paragraphs (a) to
(c) where any of the events mentioned in paragraphs 647(2)(a) to (d) occur,
whether with or without his actual fault or privity.
(2) The limits set by section 647 to the liabilities of all persons whose
liability is limited by section 647 and subsection (1) of this section
arising out of a distinct occasion on which any of the events mentioned in
paragraphs 647(2)(a) to (d) occurred apply to the aggregate of such
liabilities incurred on that occasion.
[Emphasis added]
|
647. …
(2) Le propriétaire
d'un navire, immatriculé ou non au Canada, n'est pas, lorsque l'un quelconque
des événements suivants se produit sans qu'il y ait faute ou complicité
réelle de sa part, savoir:
. .
d) avarie ou perte de biens,
autres que ceux qui sont mentionnés à l'alinéa b), ou violation de tout droit
(i)
par l'acte ou l'omission de toute personne, qu'elle soit ou non à bord du
navire, dans la navigation ou la conduite du navire, le chargement, le
transport ou le déchargement de sa cargaison, ou l'embarquement, le transport
ou le débarquement de ses passagers, ou
(ii)
par quelque autre acte ou omission de la part d'une personne à bord du
navire;
responsable des dommages-intérêts
au-delà des montants suivants, savoir:
…
f) à l'égard de toute avarie
ou perte de biens ou de toute violation des droits dont fait mention l'alinéa
d), un montant global équivalant à 1,000 francs-or pour chaque tonneau de jauge
du navire.
649. (1) Les articles
647 et 648 s'étendent et s'appliquent
. .
à toute personne agissant en
qualité de capitaine ou à tout membre de l'équipage d'un navire et à tout
employé du propriétaire ou de toute personne dont font mention les alinéas a)
à c) lorsque l'un quelconque des événements mentionnés aux alinéas 647(2)a) à
d) se produit, qu'il y ait ou non faute ou complicité réelle de leur part.
(2) Les limites
que l'article 647 impose aux obligations de toutes les personnes dont la
responsabilité est restreinte par l'article 647 et le paragraphe (1) du
présent article, qui découlent d'une occasion distincte où est survenu l'un
ou l'autre des événements mentionnés aux alinéas 647(2)a) à d), s'appliquent à
l'ensemble desdites obligations encourues à cette occasion.
[Non souligné dans
l’original]
|
[48]
Where a
shipowner was successful in establishing that he was entitled to limit his
liability for a loss or damage, the limitation fund for vessels of a tonnage of
less than 300 tonnes was somewhere in the region of $30,000 to $50,000 (See: Rhône).
[49]
In 1998, Canada adopted the 1976 Convention and the 1996 Protocol. Two major changes resulted from
the adoption of the new regime. First, by reason of Article 4 of the
Convention, the burden is now on a claimant seeking to prevent a shipowner from
limiting his liability to demonstrate that the loss or damage “resulted from
his personal act or omission, committed with the intent to cause such loss, or
recklessly and with knowledge that such loss would probably result.”. Second,
by reason of Article 15(2)(b) of the Convention, which allows state parties to
regulate the limitation fund pertaining to vessels of less than 300 tonnes,
Canada has set the limitation for such ships at $500,000 for loss or damage
other than loss of life or personal injury (specifically, at paragraph 29(b) of
the MLA).
[50]
On the one
hand, section 2 of the MLA defines the “Admiralty Court” as being the Federal
Court and confers upon that Court exclusive jurisdiction with respect to any
matter pertaining to the constitution and distribution of a limitation fund
under Articles 11 to 13 of the Convention (see: subsection 32(1) of the MLA).
On the other hand, subsection 32(2) of the MLA provides that where a person may
limit his liability pursuant to sections 28, 29 and 30 of the MLA or paragraph
1 of Articles 6 or 7 of the Convention, that person may assert his right to
limit either by way of a defence filed to an action or by way of an action or
counterclaim for declaratory relief in any court of competent jurisdiction in
Canada. In other words, the MLA gives a shipowner the right to choose the forum
in which he will assert his right to limit, irrespective of the forum in which
the claimant has filed or may file his or her action for damages. In the
present instance, both Irving and MMC are seeking to assert their right to
limit their liability by way of an action for declaratory relief filed in the
Federal Court.
[51]
Finally,
section 33 of the MLA allows a shipowner, who may be entitled to limit his
liability by reason of sections 28 or 29 of the MLA or paragraph 1 of Articles
6 or 7 of the Convention, to apply to the Federal Court for, inter alia:
(a) a determination of the amount of the liability; (b) the constitution and
distribution of a fund under Articles 11 and 12 of the Convention; and (c) an order
enjoining any person from commencing or continuing proceedings in any court
other than the Federal Court in relation to the subject matter raised by the
shipowner’s proceedings.
[52]
I now turn to
those provisions of the 1976 Convention which are relevant to this appeal.
Paragraph 2 of Article 1 of the Convention defines a “shipowner” as the owner,
charterer, manager, and operator of a seagoing ship, and paragraph 4 of Article
1 provides that those persons for whose act, neglect or default a shipowner is
responsible, are entitled to avail themselves of the limitation of liability
provided for in the Convention. It is pursuant to this provision that MMC
asserts that it is entitled to limit its liability for the incident. As the
judge pointed out in her reasons, that issue is one which will be vigorously
fought by Siemens. Finally, with regard to Article 1 of the Convention,
paragraph 7 thereof provides that by invoking his right to limit his liability,
a shipowner is not deemed to have admitted his liability.
[53]
Article 4 of
the Convention, as I indicated earlier, sets out the circumstances which will
lead to a shipowner losing his right to limit his liability, namely, “that the
loss resulted from his personal act or omission, committed with the intent to
cause such loss, or recklessly and with knowledge that such loss would probably
result” (for a discussion of this provision, see the recent decision of
Harrington J. of the Federal Court in Société Telus Communications v.
Peracomo Inc. (Peracomo (FC)), 2011 FC 494, which this Court upheld
in Peracomo Inc. v. Société Telus Communications (Peracomo (FCA), 2012
FCA 199).
[54]
Articles 6 to
8 of the Convention set out the limits of liability for loss of life or personal
injury and for other claims and the manner in which these limits are to be
calculated.
[55]
Paragraph 1
of Article 10 provides that a shipowner may invoke his right to limit his
liability even though a limitation fund has yet to be constituted.
[56]
Article 11 of
the Convention deals with the constitution of the limitation fund. In
particular, it provides at paragraph 1 thereof that the fund shall be
constituted “in the sum of such of the amounts set out in Articles 6 and 7 as
are applicable to claims for which” a shipowner may be liable. Paragraph 2 of
Article 11 sets out the ways in which the fund may be constituted and Article
12 of the Convention establishes how the fund is to be distributed among those
persons who have made a claim against it.
[57]
Article 13
provides that once a fund has been constituted, the persons who have made
claims against it “shall be barred from exercising any right in respect of any
such claim against any other assets” of a shipowner on behalf of whom the fund
has been constituted.
[58]
Finally,
relevant for our purposes, Article 14 of the Convention provides that all rules
pertaining to the constitution and distribution of the fund “and all rules of
procedure in connection therewith, shall be governed by the law of the State
Party in which the fund is constituted”.
[59]
That is the
context in which the judge’s orders regarding the stay motions and the motions
to enjoin must be considered.
[60]
I now turn to
the judge’s Order enjoining Siemens and others from pursuing their claims
against Irving and MMC in a tribunal other than the Federal Court. Before
proceeding, however, it must be said that the success of either the motions to
enjoin or the motions to stay necessarily lead to the dismissal of the others,
in that the issue which these motions raise is whether the Federal Court is the
proper court to hear and determine the limitation actions and whether during
the conduct of those proceedings, the action for damages commenced by Siemens
in Ontario should also proceed.
[61]
By its motion
to stay the Federal Court proceedings, Siemens is, in effect, taking the
position that its action for damages should proceed and that the Ontario
Superior Court, in the conduct of that case, should be allowed to determine
whether Irving and MMC are entitled to limit their liability. It is from that
perspective that it seeks an order staying the Federal Court proceedings.
[62]
In contrast
to Siemens’ position, Irving and MMC say that the limitation proceedings
commenced in the Federal Court are in their natural forum because only that
court can constitute and distribute the limitation fund which it has asked the
Federal Court to constitute.
[63]
In addition,
Irving and MMC say that proceeding with the limitation action in the Federal
Court and preventing the Ontario action from proceeding while the Federal Court
determines the issues which the limitation actions raise, will give effect to Canada’s adoption of the 1976 Convention. More effective use of judicial resources would be
made and the parties would be allowed to deal with the issue which is at the
heart of their dispute, i.e. their right to limit their liability.
[64]
With these
comments in mind, I now turn to the motions to enjoin.
[65]
Siemens
argues that the judge erred in enjoining it from continuing its proceedings in
the Ontario Superior Court. It says that the judge failed to apply the correct
test and that she failed to give proper weight to important factors.
[66]
With respect
to the applicable test, Siemens takes the position that the proper test under
paragraph 33(1)(c) of the MLA is the anti-suit injunction test enunciated by
the Supreme Court of Canada in Amchem Products Inc. v. British Columbia
(Workers Compensation Board), [1993] 1 S.C.R. 897 (“Amchem”). That
test, in Siemens’ view, “ensures compliance with the guiding principles of
comity, order and fairness” and “ensures due respect for the inherent
jurisdiction of superior courts” (Siemens’ Memorandum of Fact and Law, paragraph
36).
[67]
In support of
that proposition, Siemens points out that the Ontario Superior Court exercises
concurrent jurisdiction with the Federal Court in regard to maritime matters
other than with respect to the constitution and distribution of the limitation
fund, adding that pursuant to subsection 32(2) of the MLA, the Ontario Superior
Court can hear and determine the issue of limitation of liability.
[68]
Siemens
further says that an anti-suit injunction will only be granted in rare
circumstances, i.e. when five criteria are met: (i) a foreign
proceeding is pending; (ii) an application for a stay in the foreign court has
failed; (iii) the domestic court is alleged to be and is potentially an
appropriate forum; (iv) the foreign court could not reasonably have assumed
jurisdiction on a basis consistent with the principles of forum non conveniens;
and (v) that granting the injunction will not deprive the plaintiff of
legitimate personal or juridical advantages in the foreign forum of which it
would be unjust to deprive him or her.
[69]
Siemens then
asserts that three of the criteria are not met in the present instance. First,
it says that neither Irving nor MMC have asked the Ontario Superior Court to
stay its proceedings. Second, it then says that the Ontario Superior Court has
jurisdiction on a basis consistent with the principles of forum non conveniens.
Finally, it says that it will be deprived of three juridical advantages if it
is unable to pursue its recourse in the Ontario Superior Court, namely, the
right to broader discovery, the right to a jury trial, and the right to have
all claims and defences decided in one proceeding.
[70]
In the
alternative, Siemens argues that even if the power granted to the Federal Court
under paragraph 33(1)(c) of the MLA is not in the nature of an anti-suit
injunction, it is still in the nature of injunctive relief. Thus, the
applicable test is the one developed by the Supreme Court in RJR-MacDonald,
which test allows the granting of an interlocutory injunction only where there
is a serious issue to be tried, where the failure to grant the injunction will
result in irreparable harm to the moving party, and where the balance of
convenience favours the moving party. In Siemens’ view, Irving and MMC do not
meet the requirements of the test.
[71]
As another argument,
Siemens submits that the plain language of sections 32 and 33 of the MLA
requires the Federal Court to exercise its power to enjoin only in the clearest
of cases, adding that the tests enunciated in Amchem and RJR-MacDonald
are necessary to ensure that the Federal Court, in exercising its broad powers
under those provisions, uses them only in “proper cases and in a manner
respectful of superior courts’ inherent jurisdiction” (Siemens’ Memorandum, paragraph
60). More particularly, Siemens says that since the Ontario Superior Court has
concurrent maritime jurisdiction with the Federal Court, which includes the
determination of the validity of a right to limit under the MLA, the Federal
Court must exercise great care before enjoining proceedings, the effect of
which would be to defeat Parliament’s grant of concurrent jurisdiction on the
Ontario Superior Court.
[72]
Siemens
points out that the only exclusive jurisdiction conferred on the Federal Court
is in respect of the constitution and distribution of a limitation fund, and
that Article 10 of the Convention does not require that a limitation fund be
constituted a priori. Hence, Siemens says that where a fund is not
needed or a vessel is not arrested, there is no basis for the Federal Court to
enjoin other proceedings.
[73]
As a final argument,
Siemens argues that the power to enjoin is not available until the right to
limit liability has been determined, adding that in the present matter no such
determination has been made.
[74]
For the
reasons that follow, I am of the opinion that the judge made no error in
enjoining Siemens and others from commencing or continuing proceedings before a
court or tribunal other than the Federal Court.
[75]
I begin with
Siemens’ argument that the Federal Court’s power to enjoin is not available
until the right to limit liability has been determined. That argument, in my
respectful view, flies in the face of subsection 33(1) of the MLA.
[76]
As Irving argues, a fair reading of section 33 “compels the opposite conclusion” (Irving’s Memorandum, paragraph 73). Subsection 33(1) provides that a person, i.e. a
shipowner, may seek a determination of the amount of the liability and an order
enjoining any person from commencing or continuing proceedings in any court
other than the Federal Court where a claim is made or apprehended against that
shipowner “in respect of liability that is limited by section 28 or 29 of this
Act or paragraph 1 of Articles 6 or 7 of the Convention”.
[77]
I cannot see
how subsection 33(1) of the MLA can be read as supporting the view taken by
Siemens that no order enjoining it and others from commencing or continuing
proceedings in a court other than the Federal Court can be made prior to a
determination of whether or not a shipowner can limit his liability. The raison
d’être of the provision is clearly to allow a shipowner against whom a
claim has been made or where one is apprehended to have the Federal Court
determine whether or not he can limit his liability in respect of the loss
suffered by the claimant. If that were not the case, there would be no reason
to allow the shipowner to seek a determination of the amount of his liability
and an order enjoining others from proceeding in a different court. Thus,
subsection 33(1) of the MLA clearly contemplates situations where the right to
limit has not been judicially determined.
[78]
In my view,
the text of both the French and English versions of subsection 33(1) is to the
effect that where a shipowner, by reason of section 28 or 29 of the MLA or
paragraph 1 of Article 6 or 7 of the Convention, may be entitled to limit his
liability in respect of a claim that has been made or one that is apprehended,
the shipowner may seek from the Federal Court the orders which the Court may
make under paragraphs 33(1)(a) and (c) of the MLA.
[79]
The
expression “that is limited by section 28 or 29 of this Act or paragraph 1 of
Article 6 or 7 of the Convention”, found at subsection 33(1), cannot possibly
refer to a judicial determination on entitlement to limitation, as judicial
determination is the very purpose of the limitation action. The expression
refers to a type of liability, i.e. one that is limited by section 28 or
29 of the MLA or Article 6 or 7 of the Convention. Of great significance to the
interpretation of subsection 33(1) is the fact that a shipowner may approach
the Federal Court not only when a claim has been made against him, but also when
a claim is “apprehended”. Thus, if a shipowner may proceed under subsection
33(1) when a claim against it is simply “apprehended”, it cannot be the case
that a judicial determination must have occurred before proceeding under the
provision.
[80]
In my
respectful opinion, no other interpretation of the provision is possible. Consequently,
Siemens’ argument must be rejected.
[81]
I now turn to
Siemens’ argument that where a fund is not needed or a vessel is not arrested,
there is no basis for the Federal Court to enjoin other proceedings. Again, I
see no merit in this argument. There is nothing in the MLA and, in particular,
in section 33 thereof, that could possibly support Siemens’ argument. The power
to establish a fund and the power to enjoin proceedings are set out in separate
paragraphs of subsection 33(1), and the making of an order enjoining proceedings
is clearly not dependent on the constitution of a limitation fund. In my view,
the Court can enjoin other proceedings, whether or not it has agreed to
constitute a limitation fund under Articles 11 and 12 of the Convention.
[82]
I will now address
Siemens’ arguments concerning the test applicable under subsection 33(1) of the
MLA. For the reasons that follow, I conclude that the applicable test is that
of “appropriateness” and not the tests set out in Amchem and RJR-MacDonald.
[83]
The specific
issue which arises from Irving and MMC’s motions to enjoin is whether the
Federal Court can prevent Siemens from pursuing its action in Ontario while the
limitation actions proceed in the Federal Court. In the context of their
proceedings in the Federal Court, Irving and MMC have asked the Court, pursuant
to subsection 33(1) of the MLA, to determine the amount of their liability, to
constitute a limitation fund and to enjoin Siemens and others from commencing
or continuing proceedings in a court other than the Federal Court. I understand
the words “determining the amount of their liability”, found in paragraph 33(1)(a)
of the MLA, to mean a determination of the amount of the liability that is
limited by section 28 or 29 of the MLA or paragraph 1 of Article 6 or 7 of the
Convention.
[84]
In the
Ontario Superior Court, Siemens has commenced an action in which it seeks
compensation for the loss it claims to have suffered as a result of the incident.
More particularly, Siemens seeks an amount of compensation which, by far,
exceeds the amount of limitation to which Irving and MMC might be entitled to
should they succeed in their limitation actions in the Federal Court. That
amount, as I have already indicated, is $500,000.
[85]
Although I
have already discussed the judge’s reasons for granting Irving and MMC’s
motions to enjoin, I will briefly summarize them for ease of reference.
[86]
First, the
judge expressed the view that there was a presumptive right to limit liability
under the MLA and the Convention and that there was a heavy burden placed on a
claimant who sought to prevent a shipowner from limiting his liability.
[87]
She then
indicated that the fact that the limitation amount of $500,000 for all claims
arising from the incident was far inferior to the amount claimed by Siemens in
its action, i.e. $40,000,000, was a factor which weighed heavily in
pursuing with the limitation action in the Federal Court. In her view, determining
Irving and MMC’s right to limit their liability first would no doubt contribute
to a significant saving of costs for all those involved in the proceedings.
[88]
The judge
then remarked that Irving appeared to meet the definition of “shipowner” of Article
1 of the Convention, adding that in the case of MMC, the issue was not as
clear. She indicated that MMC’s claim to entitlement was based on paragraph 4
of Article 1 of the Convention, but that its claim to entitlement would be
“robustly debated”. At paragraph 149 of her reasons, she emphasized the fact
that although Siemens had chosen Ontario as the forum in which to advance its
claim for damages, the MLA gave Irving and MMC the option to choose the forum
in which they wished to pursue their limitation actions, noting that such
proceedings were meant to be expeditious.
[89]
The judge
then turned to Siemens’ argument that Ontario’s Rules of Civil Procedure
allow for a broader range of discovery and that jury trial was available. She
dealt with these arguments by saying that in the Federal Court a case
management judge could allow broader discovery if such discovery was warranted,
and that Siemens’ option “to have its claim considered by a jury is outweighed
by the inconvenience and repetition that will be required to have the issue of
limitation considered in this Court and the issue of liability considered in
the Ontario Superior Court of Justice”.
[90]
She then
opined that the Federal Court had jurisdiction over all claims pertaining to
the incident and that the issue of liability could be addressed in the context
of the limitation actions, adding that Siemens could commence its action in the
Federal Court or proceed by way of a counterclaim to the limitation actions
pursuant to paragraph 33(4)(a) of the MLA. The judge concluded her remarks on
this issue by saying at paragraph 156 of her reasons:
[156] Contrary to Siemens’
submissions, the Federal Court is the most efficient forum to determine all the
issues relative to the incident. It is beyond doubt that the Federal Court has
jurisdiction over the issue of liability. Only the Federal Court has
jurisdiction over the constitution and distribution of a limitation fund. While
such a fund may be incidental to the determinations of liability and
limitation, having the entirety of the proceedings considered in one Court
would be the most efficient. The issue of entitlement to limit can be
determined in the limitation actions.
[91]
I begin by
stating what I believe to be the obvious, that is, that the proceedings commenced
by Irving and MMC in the Federal Court stem from subsection 32(2) of the MLA
whereby Parliament gave shipowners, i.e. those who might be entitled to
limit their liability pursuant to section 28 or 29 of the MLA or paragraph 1 of
Article 6 or 7 of the Convention, the choice of the forum in which they
intended to assert their right to limitation. Thus, notwithstanding the fact
that Siemens was entitled to commence its proceedings in the Ontario Superior
Court, Irving and MMC properly commenced their limitation proceedings in the
Federal Court. As a result, the Federal Court was properly seized of those
actions and could thus exercise the powers granted to it by Parliament under
subsection 33(1) of the MLA.
[92]
Thus, on the
facts, it is my view that the only court that can adjudicate Irving and MMC’s
right to limit their liability for the incident is the Federal Court. Hence,
the issue as to whether Irving and MMC’s conduct bars them from limiting their
liability is an issue that only the Federal Court can determine. Consequently,
whether Siemens’ loss “resulted from his [Irving and/or MMC] personal act or
omission, committed with the intent to cause such loss, or recklessly and with
knowledge that such loss would probably result” is what the Federal Court will
have to determine in the context of the limitation proceedings before it. In
other words, that issue is not one which a jury in Ontario would be faced with
in the context of the Ontario proceedings commenced by Siemens. That jury
would, no doubt, hear evidence regarding liability and damages but, in my
respectful view, the issue pertaining to the right to limit is not one which an
Ontario judge would put to it, by reason of the Federal Court being properly
seized of that issue pursuant to subsection 33(1) of the MLA.
[93]
To this, I
would add that intent and recklessness are of no relevance other than in the
context of the limitation proceedings before the Federal Court. Whether Irving
and MMC intended the loss to happen or whether they were reckless with the knowledge
that the loss would result has no bearing on their liability for the loss.
These concepts only become relevant when Irving and MMC seek to limit their
liability pursuant to the relevant provisions of the MLA and the Convention.
[94]
It is also obvious
to me that the true issue which arises from both the Ontario proceedings and
those in the Federal Court is whether Irving and MMC can limit their liability.
If both can limit their liability, the case against them will likely go away
upon payment by them of the limitation amount of $500,000 plus interest. If
both or one of Irving and MMC are not entitled to limit their liability, then the
proceedings in Ontario will proceed against the party or parties not entitled
to limitation and again, in my respectful view, the likelihood of settlement is
very high. In effect, a judge of the Federal Court will have concluded that the
loss resulted from intent or recklessness within the meaning of Article 4 of
the Convention or, in the case of MMC, that it does not fall under the
protection of paragraph 4 of Article 1 of the Convention. In other words, the
fundamental issue between the parties is not liability nor damages, but the
right to limit liability. Once the right to limit liability has been determined,
the debate between the parties will most likely be at an end.
[95]
With these
considerations in mind, I now turn to the applicable test.
[96]
I begin by
referring to Prothonotary Hargrave’s decision in The Sheena M, where he
made a clear and concise statement regarding the approach to be taken when
dealing with motions such as the ones that are now before us.
[97]
In The
Sheena M, the issue was whether an action for damages – arising out of an
accident in which a barge, in tow of a tug, struck a bridge – should be stayed so
as to allow the owner, master and crew members of the Sheena M to pursue their
limitation of liability action commenced under the 1976 Convention and the
Protocol of 1996. Unlike the present matter, both actions had been commenced in
the Federal Court.
[98]
Also before
the prothonotary was the question of whether the action for damages and the
limitation action should be consolidated. In refusing consolidation, the
Prothonotary made the following remarks at paragraph 3 of his reasons:
3. I have thoroughly considered
the aspects of the consolidation motion urged by counsel for the CPR and by
counsel for Rivtow Marine Ltd., but have rejected consolidation for many
reasons. These reasons include that the limitation and the liability actions
are incompatible for consolidation because they are different issues, a
conflicting burden of proof and different standards of conduct at issue; that
the limitation action should border on a summary procedure, particularly
here where the Sheena M interests do not want discovery, but in contrast,
the liability action will almost inevitably prove a complex piece of litigation;
that consolidation will save little in cost and indeed could result in
substantial extra cost; and that the Sheena M interests, as plaintiffs in the
limitation action, are substantially ahead of the CPR, as plaintiffs in the
liability action: the Sheena M interests ought not to be delayed in having
their relatively narrow position determined. I thus rejected the consolidation
motion.
[Emphasis
added]
[99]
In my view, the
considerations emphasized above are also relevant in determining whether the
motions to enjoin should be granted.
[100]
After making
his determination with regard to consolidation, the prothonotary turned to the
stay motion and explained the essential differences between the 1957 Convention
and the 1976 Convention, highlighting the fact that under the new regime, the
burden of proof was now on the claimant and not on the shipowner. As I
indicated above, another notable change is the fact that the limit of liability
under the new regime was dramatically increased for vessels of a tonnage of
less than 300 tonnes. That limitation, $500,000, is at least tenfold the amount
of limitation prevailing under the 1957 Convention.
[101]
The
prothonotary then referred to the remarks made by Mr. Justice Sheen of the
English High Court, Queen’s Bench Division (Admiralty Division), in The
Breydon Merchant, [1992] 1 Lloyd’s Rep. 373, who remarked at page 376 that
one of the purposes of the Convention was to establish a right to limit
liability that was almost “indisputable”, adding that “[i]n exchange for those
rights, the ship-owners agree to a higher limit of liability”.
[102]
The
prothonotary then referred to a passage from Limitation of Liability for
Maritime Claims, Lloyd’s of London Press, 1998, at page 3, where the
learned authors Patrick Griggs and Richard Williams make the point that one of
the goals of the Convention was to reduce the amount of litigation as far as
actions for limitations of liability were concerned, explaining that to achieve
that goal, the signatories to the Convention had agreed to increase the
limitation fund and to create “a virtually unbreakable right to limit
liability”. I note that in this Court’s recent judgment in Peracomo
(FCA), Gauthier and Trudel JJ.A., who wrote the opinion for the Court with
which Létourneau J.A. concurred, referred with approval to the remarks of
Griggs and Williams which appear in Prothonotary Hargrave’s reasons in The
Sheena M.
[103]
This led the
prothonotary to state, at paragraph 9 of his reasons, that while the right to
limit under the Convention was not absolute, it would be very difficult to
break the limitation, adding that “[o]ne must question the sense of allowing a
complex trial on liability to proceed when there is a quicker, cheaper and
likely resolution by way of a limitation action”. At paragraph 11, the prothonotary
then expressed the view that where a claimant was successful in preventing a
shipowner from limiting his liability, “it is difficult to conceive that a shipowner
could even wish to defend a liability action”.
[104]
At paragraph
16 of his reasons, in determining whether the Federal Court had lost
jurisdiction by reason of res judicata, i.e. by reason of an
earlier order made by him whereby he had enjoined the plaintiffs in the action
for damages from commencing or continuing proceedings before any court other
than the Federal Court, the prothonotary opined that the issue on the
enjoinment motion had been whether the shipowner interests could avoid “facing
actions on another front”, specifically in the British Columbia Supreme Court,
until the limitation action had been dealt with by the Federal Court. The
motion to enjoin which he had disposed of had been brought under paragraph
581(1)(c) of the Shipping Act which, as I indicated earlier, was the
predecessor provision of subsection 33(1) of the MLA.
[105]
In making
these remarks, the prothonotary indicated that the test for enjoining was “that
of appropriateness set out in the preamble to subsection 581(1) of the Shipping
Act”, which subsection reads as follows:
581.
(1) Where a claim is made or apprehended against a person in respect of a
liability that is limited by section 577 or 578 or paragraph 1 of Article 6
or 7 of the Convention, the Admiralty Court, on application by that person or
any other interested person, including a person who is a party to proceedings
in relation to the same subject matter in any other court, tribunal or other
authority, may take any steps it considers appropriate, including, without
limiting the generality of the foregoing,
(a)
determining the amount of the liability and providing for the constitution
and distribution of a fund pursuant to Articles 11 and 12, respectively, of
the Convention, in relation to the liability;
(b)
proceeding in such manner as to make interested persons parties to the
proceedings, excluding any claimants who do not make a claim within a certain
time and requiring security from the person claiming limitation of liability
or other interested person and the payment of any costs, as the court
considers appropriate; and
(c)
enjoining any person from commencing or continuing proceedings before any
court, tribunal or other authority other than the Admiralty Court in relation
to the same subject matter.
|
581.
(1)
Lorsqu’une créance est formée ou appréhendée relativement à la responsabilité
d’une personne, laquelle peut être limitée en application des articles 577 ou
578 ou du paragraphe 1 des articles 6 ou 7 de la Convention, la Cour
d’Amirauté peut, sur demande de cette personne ou de tout autre intéressé – y
compris une partie à une procédure relative à la même affaire devant tout
autre tribunal ou autorité –, prendre toute mesure qu’elle juge appropriée,
notamment :
a) déterminer le montant de la
responsabilité et faire le nécessaire pour la constitution et la répartition
du fonds de limitation y afférent conformément aux articles 11 et 12 de la
Convention;
b) joindre les intéressés aux
procédures, exclure tout créancier qui ne respecte pas un certain délai,
exiger une garantie des parties invoquant la limitation de responsabilité ou
de tout autre intéressé et exiger le paiement des frais qu’elle estime
indiqués;
c) empêcher toute personne de
commencer ou continuer toute procédure relative à la même affaire devant tout
autre tribunal ou autorité.
|
[106]
As the
prothonotary correctly held, the test for granting a motion to enjoin is that
of “appropriateness”. I do not see how it is possible to come to a different
view, considering the words used by Parliament in subsection 33(1) of the MLA
that the Federal Court “… may take any steps it considers appropriate,
including:… (c) enjoining any person from commencing or continuing proceedings
in any court, tribunal or authority other than the Admiralty Court in relation
to the same subject matter”.
[107]
This test is,
no doubt, a broad and discretionary one. The words of the provision could not
be clearer in that Parliament has directed the Federal Court to make an order
of enjoinment where it is of the view that it would be appropriate to make such
an order. Thus, I am of the view that the Court may enjoin if, in all of the
circumstances, that is the appropriate order to make. The judge, after
performing that exercise, was satisfied that an order enjoining Siemens and
others was appropriate. Not only do I see no error in her reasons, such an
order was the correct one to make when all of the circumstances of the case are
taken into consideration.
[108]
I will now set
out the circumstances which lead to the conclusion that the judge made no error
in enjoining Siemens and others from commencing or continuing proceedings in
any a court or tribunal other than the Federal Court.
[109]
First, Irving
and MMC have chosen, pursuant to subsection 32(2) of the MLA, to have their
limitation actions determined in the Federal Court. In furtherance of that
decision, they have asked the Federal Court to determine the amount of their
liability and to constitute a limitation fund under Articles 11 and 12 of the Convention.
Hence, as I have already indicated, the Federal Court is the only court which
can determine Irving and MMC’s right to limit their liability for the incident.
[110]
Next, both
the action for damages in Ontario and the limitation proceedings in the Federal
Court arise from the same incident. Another consideration is that Irving and
MMC have a presumptive right to limit their liability and that Siemens, as a
claimant, bears the onus of demonstrating that Irving and MMC’s conduct is such
that limitation is not available to them or that MMC cannot invoke to its
benefit paragraph 4 of Article 1 of the Convention. In that perspective, it is
important to remember that one of the purposes of the Convention was to do away
with unnecessary litigation with regard to the right to limitation by transferring
the burden of proof onto claimants and by increasing the limitation fund
tenfold.
[111]
Consequently,
should the limitation actions succeed, a fund of $500,000 will be available to
meet Siemens’ claim and that of other possible claimants. Whether or not there
are other claimants is, in my view, an irrelevant consideration. As I indicated
earlier, the right to limit liability is, for all intents and purposes, the
sole issue of the proceedings arising from the incident. Although Irving and
MMC have not admitted liability, the fact of the matter remains that the rotors
fell into the waters of Saint John harbour and thus there is likely no real
defence to the action for damages other than the assertion by Irving and MMC that
they are entitled to limit their liability. I am obviously not to be taken as
opining that Irving and MMC do not have a defence, but I am simply pointing out
that the crux of these proceedings is whether or not Irving and MMC can limit
their liability. I am therefore unable to avoid the observation that the
dispute between the parties will likely be resolved by the Federal Court’s
determination of the right to limit liability, in that the limitation
proceedings will allow the parties to deal immediately with the true issue
between them and, as a result, will achieve a significant cost saving to all
concerned.
[112]
Further, because
of the view which I expressed earlier in these reasons, the issue of limitation
would not, in any event, go to a jury even if the Ontario proceedings were not
enjoined, as a finding of liability for the loss does not depend on a finding
of intent or recklessness. To this, I would add that in determining the
limitation action, the Federal Court is not called upon to determine, as a
matter of law, whether Irving and MMC are liable for the loss. It should be
remembered that paragraph 7 of Article 1 of the Convention makes it clear that
by invoking his right to limit liability, a shipowner is not admitting his
liability for the loss. Again, to repeat myself, there can be no doubt
whatsoever that should Irving and MMC be entitled to limit their liability, the
limitation fund of $500,000 plus interest will be paid to Siemens and other
claimants, if any, and that will be the end of the proceedings commenced in
Ontario, as far as Irving and MMC are concerned.
[113]
In these
circumstances, it is my view that it would not be reasonable, prior to a
determination of Irving and MMC’s right to limit their liability, to allow
Siemens to pursue its action before the Ontario Superior Court. I should say
here, on the basis of the evidence before us, that Irving appears to be a
“shipowner” as defined at paragraph 2 of Article 1 of the Convention;
therefore, Irving is clearly entitled to assert its right to limit liability.
With respect to MMC’s right to limit liability, it is not as clear as that of Irving. However, MMC asserts that it is also entitled to limit liability by reason of
paragraph 4 of Article 1 of the Convention which provides that “any person for
whose act, neglect or default, the shipowner… is responsible” may “avail
himself of the limitation of liability provided for in this Convention”. I
would complete these remarks by saying that, at the very least, there is no
evidence that would lead us to conclude that either Irving or MMC’s entitlement
to limitation cannot possibly succeed. I can see no prejudice to Siemens in
temporarily preventing it from continuing its action in Ontario and by forcing
it to proceed in the Federal Court to resolve the limitation issue.
[114]
Also of
relevance is the fact that the judge, as she was entitled to, ordered the
establishment of a limitation fund in the amount of $500,000 plus interest from
the date of the incident and that that fund is for the benefit of Irving as a
shipowner and for MMC as any person for whose act, neglect or default Irving is
responsible.
[115]
In my
respectful view, Siemens’ attempt to pursue the matter in the Ontario Superior
Court is the result of its belief that it stands a better chance of succeeding
on intent and recklessness before a jury as opposed to a judge. Whether or not
there is some basis for this view is, in my opinion, an irrelevant
consideration. Further, as I have indicated on a number of occasions, the issue
pertaining to the right to limit is now a matter for the Federal Court only because
of the choice made by Irving and MMC to have that issue determined, pursuant to
subsection 32(2) of the MLA, by that Court. That choice, in my respectful
opinion, cannot be overridden by the courts, either the Federal Court or the
Ontario Superior Court.
[116]
I would conclude
my remarks on this point by saying that although the Federal Court does not
have exclusive jurisdiction regarding the issue of limitation of liability, it
does, for all practicable purposes, have that exclusive jurisdiction. I am of
this view because first, subsection 32(2) allows a shipowner to choose the
forum in which he will assert his right to limit his liability. Second, the
Federal Court is the only court which has jurisdiction with regard to the
constitution and distribution of a limitation fund. Thus, save in exceptional
circumstances, shipowners will almost invariably choose to assert their right
to limit liability in the court which has exclusive jurisdiction with respect
to the constitution of the limitation fund. To this, I would add that the
Federal Court is the court which has the expertise in admiralty matters and that
that fact is well known to the shipping community here in Canada and internationally.
[117]
It is my view
that Parliament was aware of these considerations and had them in mind when it
gave the Federal Court the broad powers, including that of enjoining, found in
subsection 33(1) of the MLA. The words of subsection 33(1) constitute a clear recognition
by Parliament that the Federal Court was the court to which broad powers should
be given so as to allow it to deal effectively with all issues pertaining to
the limitation fund and the underlying claims for limitation of liability.
[118]
In the end,
the determination of a motion to enjoin pursuant to subsection 33(1) of the MLA
is a discretionary decision which must be made taking into account all of the
relevant circumstances. In my respectful opinion, that is what the judge did in
determining, on the facts before her, that it was appropriate to enjoin Siemens
and others from commencing or continuing with proceedings in a court other than
the Federal Court. I see no basis whatsoever to interfere with her decision.
[119]
Before
turning to the stay motions, I will say a few words regarding Siemens’
submissions that the proper test is either that of Amchem or that of RJR-Macdonald.
[120]
With respect
to the tests proposed by Siemens, I am of the view that those are inconsistent
with the relevant provisions of the MLA. It is clear that the power to enjoin
given to the Federal Court by the MLA does not arise under either common law or
equity. It results from a specific grant of power by Parliament to that court.
In my view, as I indicated earlier, the basis upon which the Federal Court is
to exercise its power to enjoin could not have been made clearer by Parliament
when it enacted subsection 33(1) of the MLA. Further, not only is the view
taken by Siemens inconsistent with the clear language of section 33, but it is
also inconsistent with the nature and purpose of section 33 and the
international limitation of liability regime to which Canada adhered to when it
adopted the Convention and the Protocol, in that the power granted to the
Federal Court by paragraph 33(1)(c) of the MLA is, without doubt, to give
effect to international maritime policy and that this power cannot be
analogized to a court’s ability to grant anti-suit injunctions in the context
of whether the court of one country or the other should accept jurisdiction
over a given matter. One cannot avoid the reality that subsection 33(1) can only
be properly understood in light of the current limitation of liability regime
as set out in the Convention, of which Articles 1 to 15 and 18 are given force
of law pursuant to subsection 26(1) of the MLA.
[121]
As a result
of the Convention, shipowners are entitled to set up one fund and to have all
claims against the fund brought in one proceeding and in one court for the
distribution of that fund. Consequently, I have no difficulty stating that
subsection 33(1) and the test of “appropriateness” which appears therein are in
no way analogous to a conflict of laws situation where one jurisdiction may be more
appropriate than another jurisdiction. Considerations such as comity have no
relevance in making a determination under subsection 33(1). As counsel for MMC argues
in his Memorandum at paragraph 26, “[t]he paramount consideration is
practicality and giving effect to the purpose of the legislation: [t]he need to
bring all claims into concursus”.
[122]
In the
circumstances of this case, and in the circumstances of most actions for
limitation of liability, subsection 33(1) of the MLA clearly enables the
Federal Court and its judges to provide the ways and means to deal in the most
expeditious manner with the issues arising from a shipowner’s claim that he is
entitled to limit his liability. Consequently, the question of forum non
conveniens is not one that arises in the context of a claim for limitation
of liability, particularly when, as here, the Federal Court’s jurisdiction over
the matter before it cannot be disputed. To this, I would add that there is
also no question that the Ontario court is properly seized with the action for
damages commenced by Siemens. This is in sharp contrast to the situation which
arises in anti-suit injunctions where the main question is whether a foreign
court has improperly assumed jurisdiction over a matter which is pending in a
Canadian court. Thus, in my respectful view, the Amchem test is not the
relevant test in dealing with a motion brought under subsection 33(1) of the
MLA.
[123]
With regard
to the test enunciated by the Supreme Court in RJR-MacDonald, I see no
basis whatsoever for the application of that test.
4. Whether the judge
erred in dismissing Siemens’ motions for a stay of the limitation actions
commenced in the Federal Court
[124]
As I
indicated earlier, it is my view that the success of either the motions to
enjoin or the motions to stay leads to the dismissal of the other motions. By
concluding that the motions to enjoin were properly granted, I conclude that
the motions for a stay of the limitation actions must be dismissed. In other
words, if the Federal Court was correct in finding, as I conclude, that it was
appropriate in the circumstances to enjoin Siemens and others from commencing
or continuing with proceedings in a court other than the Federal Court, it
necessarily follows that it is not in the interest of justice to stay the
Federal Court proceedings. In any event, I am of the view that the judge made
no error in concluding that Siemens’ motions to stay the limitation actions
should be dismissed.
[125]
Pursuant to
subsection 50(1) of the Federal Courts Act, the Federal Court may stay
proceedings in any cause or matter where: (a) a claim is being proceeded with
in another court or jurisdiction; (b) for any other reason, it is in the
interest of justice that the proceedings be stayed. Thus, as in the case of the
motions to enjoin, the decision to stay proceedings in the Federal Court is a
discretionary decision. As I indicated earlier, the judge agreed with the view
expressed by Prothonotary Hargrave in The Sheena M that the two-part
test in Mon-Oil is the test that should apply in determining a motion
for a stay. In my view, in the context of these proceedings grounded in section
32 of the MLA, the judge made no error in the choice of the applicable test.
[126]
There can be
no doubt that in The Sheena M, the prothonotary dismissed the motion for
a stay before him on the basis of paragraph 50(1)(b) of the Federal Courts
Act (The Sheena M, paragraph 21). In the present matter, the motions
to stay the Federal Court proceedings stand to be decided on the basis of that
provision and not on the basis of paragraph 50(1)(a). Contrary to Siemens’ assertion,
the action pending in Ontario is not a “parallel proceeding” to the limitation
actions in the Federal Court, in that the limitation actions are summary in
nature and that they are meant to deal, not with liability or damages, but with
a precise issue, i.e. Irving and MMC’s right to limit their liability
for the loss which arises from the incident. Clearly, the relief sought in the Ontario proceedings and that sought in the Federal Court are not the same.
[127]
Consequently,
the sole question before the judge was whether it was in the interest of
justice that the Federal Court proceedings be stayed. Under the Mon-Oil
test which, in my view, is the correct test, the judge had to determine two
questions, namely, whether the continuation of the Federal Court proceedings
would cause prejudice to Siemens and whether the stay of the Federal Court
proceedings would cause an injustice to Irving and MMC. The judge asked herself
these questions and she concluded that the test was not met by Siemens.
[128]
First, with
regard to the question of whether the continuation of the Federal Court
proceedings would cause prejudice to Siemens, I cannot see how Siemens can
suffer prejudice by reason of the Federal Court proceedings. As I have already
indicated, if Irving and MMC are entitled to limit their liability, that will
be the end of the litigation between Siemens and these two entities. Siemens’s
arguments with respect to its right to broader discovery and to trial by jury
are, in my view, of no relevance. To the contrary, the Federal Court proceedings
will resolve the main, if not the only issue, between the parties, and this in
a more cost effective manner in that unnecessary litigation may well be
avoided.
[129]
As to the
question of whether a stay of the Federal Court proceedings would cause an
injustice to Irving and MMC, the answer is that there would be an injustice to
them in that they have a presumptive right to limit their liability under the
Convention. In effect, both Irving and MMC enjoy a presumptive right to limit
their liability and they need not be engaged in unnecessary litigation in Ontario if they are found to be entitled to limit their liability. Thus, both Irving and
MMC are entitled to proceed with their limitation proceedings in the Federal
Court, which, inter alia, has agreed to constitute a limitation fund for
all claims arising as a result of the incident. It would thus be unjust to
Irving and MMC to stay the limitation actions and, consequently, I can find no
error in the reasons given by the judge in refusing to grant a stay of the
limitation actions.
DISPOSITION
[130]
For these
reasons, I would dismiss Siemens’ appeals with costs in favour of the
respondents, Irving and MMC.
“M. Nadon”
“I
agree.
Eleanor
R. Dawson J.A.”
“I
agree.
Robert M. Mainville
J.A.”