Date: 20061222
Docket: A-116-06
Citation: 2006 FCA 426
Present: NADON
J.A.
BETWEEN:
CANADIAN PACIFIC RAILWAY
COMPANY
Appellant
and
BOUTIQUE JACOB INC.
Respondent
REASONS FOR ORDER
NADON J.A.
[1]
Before me
are four motions to intervene in the present appeal of a decision of de Montigny
J. of the Federal Court, 2006 FC 217, February 20, 2006.
[2]
By his
decision, the learned Judge maintained, in part, an action for damages
commenced by Boutique Jacob Inc. (the “respondent”) against a number of
defendants, namely, Pantainer Ltd., Panalpina Inc., Orient Overseas Container
Line Ltd. (“OOCL”) and Canadian Pacific Railway (“CPR”). Specifically, the
Judge granted judgment in favour of the respondent against the defendant CPR
and awarded it the sum of $35,116.56 with interest, and he dismissed the action
insofar as it was directed against the other defendants.
[3]
A brief
examination of the facts and issues leading to the judgement of de Montigny J. will
be helpful in understanding the basis upon which the motions to intervene are
being made.
[4]
At issue
before the Judge was the carriage by various modes of transport from Hong Kong
to Montreal of a container of goods,
namely, pieces of textile in cartons, destined for the respondent. As is usual
in the transport of containerized cargo, a number of entities were involved in
the carriage of the container, namely, an ocean carrier, OOCL, which carried it
from Hong Kong to Vancouver, and a railway carrier, CPR, which carried it from
Vancouver to Montreal.
[5]
On April
27, 2003, as a result of a train derailment which occurred near Sudbury, Ontario, part of the respondent’s
cargo was damaged and part of it was lost.
[6]
It should
be pointed out that at no time whatsoever did the respondent contract with
either OOCL or CPR. Rather, the respondent retained the services of Panalpina
Inc. which, in turn, retained the services of Pantainer Ltd. to carry the
respondent’s cargo from Hong Kong to Montreal.
Pantainer then proceeded to engage OOCL to carry the container from Hong Kong
to Montreal. In turn, OOCL entered into a
contract of carriage with CPR with respect to the carriage of the container
from Vancouver to Montreal.
[7]
The issues
before the Judge were, inter alia, whether the defendants, individually
or collectively, were liable for the damages suffered by the respondent and, in
the event of liability, whether the defendants could limit their liability
either by law or by contract.
[8]
As I have
already indicated, the Judge dismissed the respondent’s action against all of
the defendants, except CPR. In so concluding, the Judge held that CPR was not
entitled to limit its liability because it had not complied with the terms of
section 137 of the Canada Transportation Act, S.C. 1996, c. C-10 (the
“Act”), which provides as follows:
|
137.
(1) A railway company shall not limit or restrict its liability to a
shipper for the movement of traffic except by means of a written agreement
signed by the shipper or by an association or other body representing
shippers.
(2)
If there is no agreement, the railway company’s liability is limited or
restricted to the extent provided in any terms and conditions that the Agency
may
(a) on the application of the company, specify
for the traffic; or
(b) prescribe by regulation, if none are
specified for the traffic.
[Emphasis added]
|
137.
(1) La compagnie de chemin de fer ne peut limiter sa responsabilité
envers un expéditeur pour le transport des marchandises de celui-ci, sauf par
accord écrit signé soit par l’expéditeur, soit par une association ou un
groupe représentant les expéditeurs.
(2)
En l’absence d’un tel accord, la mesure dans laquelle la responsabilité de la
compagnie de chemin de fer peut être limitée en ce qui concerne un transport
de marchandises est prévue par les conditions de cette limitation soit fixées
par l’Office pour le transport, sur demande de la compagnie, soit, si aucune
condition n’est fixée, établies par règlement de l’Office.
[Le souligné est le
mien]
|
[9]
More
particularly, the Judge held that CPR could not limit its liability because it
had not entered into a “… written agreement signed by the shipper or by an
association or other body representing shippers” to that effect.
[10]
It will be
recalled that the services of CPR were retained by the ocean carrier, OOCL, and
not by the owner of the goods, the respondent Boutique Jacob. In the Judge’s
view, the written agreement between CPR and OOCL did not meet the requirements
of sub-section 137(1), as “the shipper” was not OOCL, but the respondent.
[11]
CPR also
argued that it was entitled to benefit from the limitations and exemptions of
liability found in the bills of lading issued both by OOCL and by Pantainer,
and more particularly, that it could benefit from the so-called Himalaya clause found in these bills
of lading. De Montigny J. concluded that by reason of section 137 of the Act, neither
the Himalaya clause nor the principles of sub-bailment could be successfully
invoked by CPR. At paragraph 50 of his Reasons, he explained his conclusion in
the following terms:
50. Alternatively,
counsel for CPR has argued that her client could take advantage of the
limitations and exemptions found in OOCL and Paintainer terms and conditions.
It is true that clause 1 of the OOCL waybill and clause 3 of the Pantainer bill
of lading explicitly provide that participating carriers shall be entitled to
the same rights, exemptions from liability, defences and immunities to which
each of these two carriers are entitled. But the application of these clauses
to a railway carrier would defeat the purpose of s. 137 of the Canada
Transportation Act. It would make no sense to protect the shipper by
prescribing that a railway company cannot limit its liability except by written
agreement signed by that shipper, if the railway company could nevertheless
achieve the same result through the means of a Himalaya clause found
upstream in the contract of another carrier. I recognize that such reasoning
results in a less advantageous position for railway companies as opposed to
other carriers. But this is true not only for the purpose of liability but also
in many other respects, since other modes of transportation are not as heavily
regulated as are railway companies.
[12]
On March
20, 2006, CPR filed a Notice of Appeal in this Court and on March 30, 2006, the
respondent filed a cross-appeal. On June 15, 2006, Zim Integrated Shipping
Services Ltd., A.P. Moller-Maersk A/S and Hapag-Lloyd Container Line GmbH filed
a motion for leave to intervene in the appeal. On July 13, 2006, August 23,
2006 and September 11, 2006, similar motions were filed respectively by 13
protection and indemnity clubs (“P&I Clubs”), by Canadian National Railway
Company (“CN”) and by Safmarine Container Line Ltd.
[13]
The
proposed interveners seek to intervene in this appeal on the following
questions:
1.
The
interpretation of section 137 of the Act, including, inter alia, the
definition of “shipper”, “association of” or “body representing shippers”.
2.
The right
of a railway to invoke the Himalaya clause found in the ocean carrier’s bill of
lading.
3.
The right
of a railway to enforce the terms of confidential contracts that it has with an
ocean carrier when sued by the owner of the damaged or lost cargo.
[14]
The
motions to intervene are all made pursuant to Rule 109 of the Federal Courts
Rules, which reads as follows:
|
109. (1) the Court may, on motion, grant
leave to any person to intervene in a proceeding.
(2)
Notice of a motion under subsection (1) shall
(a) set out the full name and address of the
proposed intervener and of any solicitor acting for the proposed intervener;
and
(b) describe how the proposed intervener
wishes to participate in the proceeding and how that participation will
assist the determination of a factual or legal issue related to the proceeding.
(3)
In granting a motion under subsection (1), the Court shall give directions
regarding
(a) the service of documents; and
(b) the role of the intervener, including costs,
rights of appeal and any other matters relating to the procedure to be
followed by the intervener.
[Emphasis added]
|
109. (1) La Cour peut, sur requête,
autoriser toute personne à intervenir dans une instance.
(2)
L’avis d’une requête présentée pour obtenir l’autorisation d’intervenir
a) précise les nom et adresse de la personne qui
désire intervenir et ceux de son avocat, le cas échéant;
b) explique de quelle manière la personne
désire participer à l’instance et en quoi sa participation aidera à la prise
d’une décision sur toute question de fait et de droit se rapportant à
l’instance.
(3)
La Cour assortit l’autorisation d’intervenir de directives concernant :
a) la signification de documents;
b) le rôle de l’intervenant, notamment en ce qui
concerne les dépens, les droits d’appel et toute autre question relative à la
procédure à suivre.
[Le souligné est le
mien]
|
[15]
Three of the motions
are brought by a number of companies, all represented by the same attorneys, which
I will hereinafter refer to as the ocean carriers. These proposed interveners,
with the exception of the P&I Clubs, are, like the defendant OOCL in the
proceedings below, engaged in the transportation of containerized cargo to Canada from various points around the world and from Canada to various points around the world. The other proposed
interveners in this group, the P&I Clubs, are insurance mutuals which
protect their member shipowners and operators against, inter alia, third-party
liability for cargo damage. For the present purposes, it is sufficient to note
that they insure about 90% of the world’s oceangoing tonnage and represent
most, if not all, of the international ocean carriers of containerized cargo
operating in Canada.
[16]
The other motion is
brought by CN, a federally-regulated railway which operates a continuous
railway system in Canada and in the United
States.
[17]
The ocean carriers
say that they meet the requirements for intervention and further say that their
participation in the appeal will assist this Court in determining the factual
and legal issues of the appeal for the following reasons:
·
The
ocean carrier involved in the trial of this action, OOCL, is not a party to the
appeal and hence the Court of Appeal will not have the benefit of the point of
view of one of the vital links to multimodal transportation, i.e., the ocean
carrier which issued a multimodal bill of lading;
·
An
ocean carrier, such as OOCL, can be a shipper in the context of the rail
movement of cargo as that term is understood in Section 137 of the Act, a point
that CPR may not need to make or cannot make in its arguments on appeal;
·
An
ocean carrier could, alternatively, be a “body representing shippers” as that
term is understood in Section 137 of the Act, an argument that CPR may not need
to make or cannot make in its arguments on appeal;
·
Himalaya
clauses similar to the one contained in the OOCL bill of lading at issue are
provisions which were developed by ocean carriers and are regularly found in
all bills of lading of ocean carriers of containerized cargo. They have been
developed to allow the ocean carrier’s sub-contractors such as railways to
benefit from, inter alia, the same liability regime and limits of
liability to which the ocean carriers benefit under the terms of their
contracts of carriage with cargo owners. Ocean carriers are therefore in the
best position to speak to the intent and application of such clauses.
·
Ocean
carriers are in the best position to make the argument regarding the
application of the rules on sub-bailment because CPR, in the present case, does
not have to reply on this argument as it is arguably protected by the indemnity
provisions found in its tariff. In any event, it is likely that the limits of
liability incorporated in the rail contract between OOCL and CPR may have
exceeded the value of the Plaintiff’s claim, hence CPR’s lack of interest to
press the issue of the application of the principles of sub-bailment.
[18]
With respect to its
proposed intervention, CN says that its presence in the appeal will be of
assistance to this Court in that:
·
CN
proposes to argue that the definition of shipper involves the control and not
necessarily the ownership of goods;
·
CN
is the only Canadian railway with a full North American network and proposes to
demonstrate the legal impact of the Trial decision on goods moving through
Canada en route from and to international points;
·
CN
proposes to argue that Himalaya clauses should receive an interpretation
harmonized with the interpretation given by the United States Supreme Court
considering that a significant portion of containerized traffic destined to the
United States enters that country through CN’s network;
·
CN
is in the best position to assist the Federal Court of Appeal with respect to
the issues raised in this appeal and in the appeal before the Quebec Court of
Appeal of the Quebec Superior Court’s decision in Sumitomo Marine and Fire
Insurance Co. Ltd. v. CN, [2004] J.Q. 11243 in connection with the
interpretation of section 137.
[19]
In Canadian Union of Public Employees (Airline Division)
v. Canadian Airlines International Ltd., 2000 F.C.J. No. 220, this Court, at paragraph 8 of the
Reasons of Noël J.A., enumerated the following factors as those which ought to
be considered in deciding whether a motion to intervene should be allowed:
8 It is fair to assume that in order to
grant the intervention the motions Judge would have considered the following
factors which were advanced by both the appellants and PSAC as being relevant
to her decision:
1) Is the proposed intervener directly affected
by the outcome?
2) Does there exist a justiciable issue and a
veritable public interest?
3) Is there an apparent lack of any other
reasonable or efficient means to submit the question of the Court?
4) Is the position of the proposed intervener
adequately defended by one of the parties to the case?
5) Are the interests of justice better served by
the intervention of the proposed third party?
6) Can the Court hear and decide the cause on
its merits without the proposed intervener?
[20]
In addition, Noël
J.A. indicated that the Court had to have regard to Rule 109(2), which required
a proposed intervener to indicate how its participation would assist the Court in
determining the factual or legal issues raised by the proceedings.
[21]
It must also be said
that for leave to intervene to be granted, it is not necessary that all of the
factors be met by a proposed intervener (see: Rothmans Benson and Hedges
Inc. v. Canada, [1990] 1 F.C. 84 (TD); affirmed [1990] 1 F.C. 90 (CA)) and
that, in the end, the Court has the inherent authority to allow intervention on
terms and conditions which are appropriate in the circumstances (see: Canada
(Director of Investigations and Research) v. Air Canada, [1989] 2 F.C. 88
(CA); affirmed [1989] 1 S.C.R. 236; also Fishing Vessel Owners Association
of B.C. v. Canada, [1985] 57 N.R. 376 (CA) at 381).
[22]
I now turn to the
ocean carriers’ motions to intervene.
[23]
The ocean carriers say
that the decision to be rendered by this Court in the appeal will have a
significant impact on the multi-modal transportation industry, as the factual
matrix represents a typical multi-modal transportation case and that the
contractual documents in evidence are common across the industry. They say that
de Montigny J.’s decision and that of the Quebec Superior Court in Sumitomo
Marine and Fire Insurance Co. Ltd. v. Canadian National Railway Co., [2004]
J.Q. 11243, are the only two interpretations of section 137 of the Act. They
further say that most ocean carriers of containerized cargo offer to their
clients multi-modal transportation services in Canada, that they have contracts
with either CN or CPR with respect to the inland portion of the transportation
services which they provide, and that such contracts consistently incorporate
tariffs which provide for, inter alia, limitations of liability in
favour of the railway for damage to cargo as well as an obligation of the part
of the ocean carrier to indemnify the railway in the event that the latter is
held liable to third parties in excess of such limits of liability.
[24]
Hence, the ocean
carriers point out that the direct consequence of de Montigny J.’s interpretation
of section 137 of the Act is that failing written agreements between railways
and cargo owners, the railways will be facing unlimited liability and,
consequently, will seek to pursue indemnity rights against the ocean carriers in
order to recover any amount paid in excess of the limits stipulated in the
contracts between them and the ocean carriers.
[25]
The ocean carriers
therefore submit that they will ultimately be paying the amount of damages to
which the railways have been condemned, to the extent that these amounts exceed
the railways’ limits of liability.
[26]
In my view, leave
ought to be granted to the ocean carriers. I am satisfied that the position
which the ocean carriers seek to assert will not be adequately defended by CPR
and that their participation will undoubtedly assist this Court in determining
the legal issues raised by the appeal. An important, if not crucial, consideration
in my decision to grant leave to the ocean carriers is that OOCL, the ocean
carrier which carried the respondents’ container from Hong Kong to Vancouver
and which sub-contracted the Vancouver to Montreal portion of the carriage to CPR, is not a
party in the appeal.
[27]
As a result, it is my
view that the interests of justice will be better served by allowing the ocean
carriers to intervene.
[28]
For these reasons, I
will grant leave to the ocean carriers to intervene in the appeal and costs
shall be spoken to. In so concluding, I am obviously not casting any aspersions
on CPR and its attorneys. My point is simply that the ocean carriers will be
bringing a different perspective to the issues which are before the Court.
[29]
I now turn to CN’s
motion.
[30]
I have not been
convinced that leave to intervene ought to be granted to CN. In my view, CN’s
position and the arguments which it seeks to make in the appeal are identical
to the position and the arguments that will be put forward by CPR. I have no
reason to believe, and CN has offered none, that CPR will not adequately defend
the position which it seeks to advance. As a result, this Court can hear and
decide the appeal on its merits without the participation of CN. In the end, I
do not believe that the interests of justice will be better served by allowing
CN to intervene in this appeal.
[31]
As a result, CN’s
motion will be dismissed. Costs shall be spoken to.
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