Laurentian Pilotage Authority v. Gestion C.T.M.A. Inc., 2005 FCA 221

                                                                                                                                  Date: 20050610

                                                                                                                               Docket: A-501-04

                                                                                                                     Citation: 2005 FCA 221

CORAM:        DESJARDINS J.A.

DÉCARY J.A.

PELLETIER J.A.

BETWEEN:

LAURENTIAN PILOTAGE AUTHORITY

Appellant/Plaintiff

and

GESTION C.T.M.A. INC.

and

NAVIGATION MADELEINE INC.

and

THE OWNERS AND OTHERS HAVING AN INTEREST

IN THE SHIP C.T.M.A. VOYAGEUR

Respondents/Defendants

and

CORPORATION DES PILOTES DU BAS ST-LAURENT

Intervener

Hearing held at Montréal, Quebec, on May 31, 2005.

Judgment delivered at Ottawa, Ontario, on June 10, 2005.

REASONS FOR JUDGMENT:                                                                                      DÉCARY J.A.

CONCURRING:                                                                                                    DESJARDINS J.A.

                                                                                                                                 PELLETIER J.A.

                                                                                                                                  Date: 20050610

                                                                                                                               Docket: A-501-04

                                                                                                                     Citation: 2005 FCA 221

CORAM:        DESJARDINS J.A.

DÉCARY J.A.

PELLETIER J.A.

BETWEEN:

LAURENTIAN PILOTAGE AUTHORITY

Appellant/Plaintiff

and

GESTION C.T.M.A. INC.

and

NAVIGATION MADELEINE INC.

and

THE OWNERS AND OTHERS HAVING AN INTEREST

IN THE SHIP C.T.M.A. VOYAGEUR

Respondents/Defendants

and

CORPORATION DES PILOTES DU BAS ST-LAURENT

Intervener

REASONS FOR JUDGMENT

DÉCARY J.A.

[1]         The Laurentian Pilotage Authority (the appellant or the Authority) is claiming from the respondents the sum of $1,860,265.34 for unpaid pilotage charges on the ship "Le Voyageur" between 1987 and 2002. The Authority relies on section 44 of the Pilotage Act, which reads as follows:

[2]         The respondents have argued three defences: the first, on which the Federal Court judge did not rule (apparently because of the ultimate conclusion he reached to dismiss the action), involves the Authority's option to sue one of the respondents, Gestion C.T.M.A. Inc.; the second has to do with the waiver which, in their opinion, had been granted to the "Voyageur" by the Authority in 1992; the third relies on the three-year prescription in article 2925 of the Civil Code of Québec (the Code).

[3]         Mr. Justice Lemieux, of the Federal Court, dismissed the Authority's argument based on the waiver, but he accepted the one based on the three-year prescription. Although this conclusion, prima facie, means that the action must be allowed in part (i.e. in respect of the last three of the fifteen years in dispute), the judge dismissed it in its entirety, using the following language:

For all these reasons, the plaintiff's action is dismissed with costs on the ground that the claim made is prescribed. The Court did not receive sufficient particulars to decide whether during the years when the Voyageur was operating there were unpaid pilotage charges that were not prescribed. I invite the parties to contact the Court on this point, if necessary.

[2004 FC 939, para. 90]

[4]         The same arguments were made before us, some in the context of a cross-appeal filed by the respondents which, in my opinion, was not really necessary. A new argument was advanced by the appellant in relation to the costs.

[5]         I will address the arguments in the aforesaid order.

Status of Gestion C.T.M.A. Inc.

[6]         Because the captain of the "Voyageur", when sometimes completing the pilotage cards, wrote Gestion C.T.M.A. Inc. in the "agent" box, the Authority argues that Gestion C.T.M.A. Inc. is jointly and severally liable for pilotage charges under section 42 of the Act, which reads:

[7]         This argument is without merit. The "agent of a ship", within the meaning of this section, refers to the entity which, in maritime terminology, represents a ship for certain purposes. In A/S Ornen v. Duteous (Le), [1987] 1 F.C. 270, at pages 291 and 292, Mr. Justice Dubé adopted the following definition of "ship's agent":

A basic definition of a ship's agent is provided by Pearson L.J. in Blandy Brothers & Co., Lda. v. Nello Simoni, Ltd. [at page 404]:

The ship's agent is, in the normal case, the agent of the shipowner at the particular port, and the ship's agent, therefore, at that port stands in the shoes of the shipowner; and it is reasonable to suppose that he has the authority to do whatever the shipowner has to do at that port.

(see, also, Western Great Lakes Pilot's Assn. (District 3) v. Navitrans Shipping Agencies Inc., [2002] F.C.J. No. 1231, Prothonotary Morneau).

[8]         Gestion C.T.M.A. Inc., a management company, is simply the sole shareholder of the defendant Navigation Madeleine Inc., which is the sole owner of the ship in question. No evidence was submitted tending to demonstrate that it is comparable to an "agent" within the meaning of section 42.

[9]         The action brought against Gestion C.T.M.A. Inc. should therefore be dismissed, irrespective of the Court's findings on the other issues.

The waiver

[10]       The "waiver" ("dispense" in the French text) referred to in section 44 of the Act is nowhere defined in the Act, and in fact is found elsewhere in the Act only in paragraph 20(1)(c), which gives the Authority the power to make regulations "prescribing the circumstances under which compulsory pilotage may be waived".

[11]       In the Laurentian Pilotage Authority Regulations, C.R.C. c. 1268, section 5 has identified three situations in which a waiver may be allowed:

[12]       In the case at bar, the "waiver" is alleged to result from a series of letters, one of which is dated June 22, 1992, sent to the respondents by the Authority, and which reads as follows:

[translation] We have been informed by the president of the Corporation of Mid St. Lawrence Pilots, Jean-Pierre Leroux, that we should no longer dispatch pilots to the ship CTMA Voyageur, since it is not subject to compulsory pilotage except in emergency or distress situations.

[A.R. Vol. 1, p. 134]

[13]       The respondents acknowledge that this exchange of letters, which suggests that the "Voyageur" is not subject to compulsory pilotage except in emergency or distress situations, does not fall within the framework of the situations described in section 5 of the Regulations. They argue, however, that section 5 does not exhaust all possible forms of "waiver" and that the exchange of letters amounts to a new form of waiver.

[14]       This is not my opinion. There can be a "waiver", within the meaning of section 40 of the Act, only in the situations covered in a regulation adopted under paragraph 20(1)(c). A "waiver" of compulsory pilotage is a significant exception to the application of an Act the primary objective of which is to secure "the interests of safety" (section 18 of the Act), and the Court ought not to go beyond what is allowed by section 5 of the Regulations.

[15]       To grant a "waiver", the Authority must know that a ship is subject to compulsory pilotage. In this case, since the Authority thought the ship was not subject to compulsory pilotage, there would have been no reason for it to exempt the "Voyageur" from charges that it did not have to pay.

The Prescription

[16]       The relevant articles of the Civil Code of Québec are articles 2904, 2922 and 2925. Although the claim in this case covers certain periods governed by the Civil Code of Lower Canada, it was not argued that the differences in language between the articles in the old Code and those in the new Code had any impact on the outcome of this litigation and I will discuss here only the articles in the new Code:

[17]       The appellant argues that prescription is in its case suspended under article 2904 C.C.Q. because it would have been impossible for it to take earlier action owing to the respondents' negligence. If prescription is not suspended in its case, the appellant claims it is the ten-year prescription established in article 2922 C.C.Q. that applies, and not the three-year prescription established in article 2925 C.C.Q.

The suspension

[18]       Mr. Justice Lemieux concluded that the Authority had failed to demonstrate that it had been "impossible in fact for [it] to act", as required by article 2904 C.C.Q.

[19]       The judge was properly apprised of the law and the conclusion he reached is one of fact (see Carole Giguère v. J.P. Parenteau, (1990) R.D.J. 598 (Que. C.A.); Cathy Chouinard v. Centre Hospitalier St. Mary's, (2002) R.J.Q. 12 (Que. C.A.)), in regard to which this Court should not intervene unless there was palpable and overriding error (Housen v. Nikolaisen, [2002] 2 S.C.R. 235). The judge noted correctly, relying on the remarks of Mr. Justice Gonthier in Gauthier v. Brome Lake (Town), [1998] 2 S.C.R. 3, at paragraphs 65 and 66, that prescription is suspended where the impossibility to act results from the fault of the debtor of the obligation. He then turned to a very detailed review of the evidence that had been filed on both sides and concluded that "the facts as a whole indicate that it was not impossible for the LPA to determine the true net tonnage of the Voyageur" (paragraph 76).

[20]       The decisive factor, in my opinion, even though it was not defined as such by the judge, is this exchange of correspondence between 1991 and 2002 which indicates that the Authority, rightly or wrongly, was satisfied that throughout this period the "Voyageur" was not subject to compulsory pilotage.

[21]       The appellant's thesis is based on the premise that the respondents had been engaging in [translation] "deceitful manoeuvres" since 1987 for the purposes of concealing from the Authority, the pilots and the pilots' corporations, the actual amount of the ship's net tonnage. Lemieux J. found no deceitful manoeuvres in the respondent's actions and counsel for the Authority had to acknowledge at the hearing that there was no evidence in the record of anything "deliberate" about the alleged acts. The fact is that the captain of the ship used pilotage services until the Authority informed him that these services would only be provided to him in cases of distress or [translation] "firm request". The judge's finding, for all intents and purposes, is that there was a misunderstanding over the actual net tonnage from the very first time that the "Voyageur" took a pilot aboard, in November 1987 (A.R. vol. 1, p. 99), and that this misunderstanding continued until 2002. The pilots themselves and the associations that represent them (who nevertheless have an interest in ensuring that a ship is subject to compulsory pilotage), as well as the Authority itself, helped to perpetuate this misunderstanding. For instance, this letter sent to the Authority on April 9, 1991 by the Corporation of Mid St. Lawrence Pilots:

[translation]

Pursuant to clause 14.04 of the service contract, the purpose of this letter is to ask that you no longer dispatch pilots to the vessel C.T.M.A. Voyageur, a vessel that is not subject to compulsory pilotage, except in the following circumstances:

(a)            if there is an emergency or distress situation; or

(b)            if the C.T.M.A. Voyageur files with the Dispatch Centre a firm request for a pilot before it embarks, accompanied by a waiver of correcting the estimated time of departure 4 hours before that time (section 8(b) of the Laurentian Pilotage Authority Regulations).

We would ask as well that you warn the company that the captain of the vessel is to follow the instructions of the pilot who has the conduct thereof, failing which the pilotage services will be available only in emergency or distress situations.

You will understand that this request has become necessary owing to the lack of discipline of the captain, which affects the overall quality of the service.

[A.R. vol. 1, p. 130)

[Emphasis added]

[22]       This corporation sent another letter on June 19, 1992 (A.R. vol. 1, p. 132), in these terms:

[translation]

Effective immediately, pursuant to clause 14.04 of the service contract, the purpose of this letter is to ask that you no longer dispatch pilots to the vessel C.T.M.A. Voyageur, a vessel that is not subject to compulsory pilotage, unless there is an emergency or distress situation.

You will understand that this request has become necessary owing to the manifest ill will of the Company, which affects the overall quality of the service.

[Emphasis added]

[23]       This would lead the Authority to send the respondents, on June 22, 1992, with a copy to the said corporation, the letter that I reproduced in paragraph 11 of my reasons.

[24]       It is true, as the appellant's counsel argues, that these letters were written in the context of a quarrel between the pilots and the respondents over the latter's use of pilotage services. However, the fact remains that the Authority, the pilots and their corporations were convinced that the "Voyageur" was not subject to compulsory pilotage, and that the respondents themselves, who knew they were in theory subject to it because of the ship's net tonnage, thought they were being exempted. This conviction of the respondents is confirmed, moreover, in the fact that it was they themselves who, on May 16, 2002, challenged what they believed to be a waiver by trying to make it applicable to the vessel "Vacancier", which came into service on June 1, 2002 (A.R. vol. 2, pp. 206, 218).

[25]       Briefly put, in reaching the conclusion that he did, Lemieux J. based himself on evidence that allowed him to draw the inferences that he drew. In my opinion, the appellant's counsel is confusing the "fault" of the respondents - which leads to their obligation to reimburse, and which is conceded, that is, the failure to pay the charges by which they were bound because of the actual net tonnage of the ship - with the "fault" leading to the suspension of the prescription, the latter fault not having been proved to the satisfaction of the trial judge. An obligation there certainly is, but a suspension of prescription for the payment of this obligation, there is not.

[26]       It remains to determine the applicable prescription.

The applicable prescription

[27]       Faced with deciding whether it was the three-year prescription established by article 2925 C.C.Q. in regard to a "personal right", or the ten-year prescription established by article 2922 C.C.Q. in regard to a claim with a prescriptive period that is not "otherwise fixed by law", that applied, Lemieux J. chose the three-year period. That is a question of law which, of course, is subject, on appeal, to the correctness standard.

[28]       Although it may seem, prima facie, that article 2922 is the general rule, the cases and authorities tend to the view that the general rule is in article 2925. As Tancelin and Gardner state, in Jurisprudence commentée sur les obligations (Montréal, Wilson & Lafleur, 8th edition, 2003), at page 930,

[translation]

Article 2922 C.C.Q., which replaces article 2242 C.C., constitutes in theory the period in ordinary law. But it is in fact article 2925 C.C.Q. that represents the general rule in this area.

                                                                     . . . .

Through the generality of the "personal right" criterion, the provision is applicable to a whole series of hypotheses in which the thirty-year prescription was previously recognized.

                                                                     . . . .

(See Longpré v. Gouin, [2003] R.J.Q. 1459 (C.A.), at paragraphs 48 and 49). What the actual text of article 2922 invites the Court to verify first is whether a shorter prescriptive period is not otherwise provided by law, including by the Code. It is only if no shorter prescriptive period is applicable that article 2922 will apply.

[29]       Article 2925 is addressed to "an action to enforce a personal right". The concept of "personal right" is clearly established in civil law. Mignault, in Le droit civil canadien, Tome II, stated in 1896 that,

[translation]

A personal right is a person's ability to require that one or more other persons, specifically named, give him some advantage either by doing or by refraining from doing something. The person authorized to require the advantage that is the subject matter of the obligation is called a creditor; the person who is required to provide it is referred to as a debtor. Thus the custom has developed of referring to a personal right as a claim [créance], and to an obligation as a debt [dette] . . .

The claim that I have against you, that binds you to execute this or that obligation that you owe to me . . . is a personal right, a claim.

[pp. 389, 390]

[30]       The fact that an obligation is statute-based, as in this case, in no way alters its personal nature. In fact, a fair number of so-called personal claims are established by statute, such as the Companies Act of Quebec (Pires v. Zaccheo, [1998] R.J.Q. 2973 (C.A.)) and the Civil Code of Québec (Gabriel Caux-Nadeau v. Nadeau, [1999] R.L. 331 (C.A.)) (see also Basil Holding Corp. v. Côte St-Luc (City of), [1998] R.L. 661 (S.C.) and Commission des normes du travail v. Perreault, J.E. 2002-2144 (C.Q.)). It is the nature of the right that is exercised that must be examined, not its source, which may be statutory, regulatory, contractual, customary, etc.

[31]       The appellant's counsel contends that what is involved here is a request for payment of a penalty, which he says is beyond the scope of article 2925 C.C.Q. Irrespective of the prescriptive period applicable to the payment of a penalty - on which I take no position - it is clear that section 44 of the Pilotage Act is not a provision of a penal nature. This section is confined to making the ship "liable to the Authority" to the same degree as if the pilotage service had been rendered. The liability established in section 44 is not different from that established in section 42.

[32]       Since the applicable prescriptive period is three years, and the action was commenced on March 31, 2003, it follows that the pilotage charges owing before March 31, 2000, can no longer be claimed.

[33]       Lemieux J. went further, however. He said that in his opinion, apparently in connection with the pilotage charges payable after March 31, 2000, he "did not receive sufficient particulars to decide whether . . . there were unpaid pilotage charges that were not prescribed" and he dismissed the action in its entirety, while inviting the parties to contact him on this point.

[34]       It seems clear to me that the judge was not withdrawing himself from the case and that his judgment was not final since he invited the parties to clarify, in light of the evidence in the record, the amount of the charges that were not prescribed.

[35]       In fact, he had before him a claim that reported annual amounts for each of the years 1987 to 2002 (A.R. vol. 1, p. 164) without specifying the amount during the year in which these charges had become payable. The record also contained an order of Prothonotary Tabib which, after the pre-trial conference was held, stated that the parties had agreed on certain admissions, including one to the effect that [translation] "the amounts claimed by the plaintiff are consistent with the tariff and the voyages made" (A.R. vol. 1, p. 89). Finally, the record contained, in the agreed statement of facts filed by the parties on April 8, 2004, paragraph 21 in which the defendants (the respondents), [translation] "without acknowledging that they owe the amounts, have acknowledged that if the Court were to conclude that the amounts are owing, the amount claimed is correct and the calculation and determination of this amount is not in dispute" (A.R. vol. 1, p. 94).

[36]       Furthermore, replying to the invitation extended to them by the judge at the very end of his reasons, the parties' counsel sent him their observations, on July 5 and 7, 2004, respectively. The appellant's counsel asked the judge to [translation] "set aside at most a half day for the necessary submissions on the quantum of the plaintiff's claim . . . for the last three years". He also manifested a desire to [translation] "make some submissions concerning costs . . ." (A.R. vol.1, p. 50). The respondents' counsel objected, for his part, to the appellant's request on the ground that the judge had become functus officio, but in the same breath asked the judge to order the discharge from seizure that he had failed to order (A.R. vol. 1, p. 52). It does not appear that the judge responded to any of these requests.

[37]       In the circumstances, I am of the opinion that the judge erred in not accepting the request that was made to him by both sides and that the case should be returned to him so that he can rule on the requests made by the parties' counsel.

Disposition

[38]       I would allow the appeal, overturn in part the judgment of the Federal Court delivered on June 30, 2004, dismiss the action without costs in regard to Gestion C.T.M.A. Inc., dismiss the action taken against the other defendants pertaining to any claim prior to March 30, 2000 and return the matter to Mr. Justice Lemieux for him to rule on the requests made to him by counsel for the parties on July 5 and 7, 2004.

[39]       I would not award any costs on appeal, as each party has been partially successful.

           "Robert Décary"

                                          J.A.

"I concur.

Alice Desjardins, J.A."

"I concur.

J.D. Denis Pelletier, J.A."

Certified true translation

K.A. Harvey

FEDERAL COURT OF APPEAL

SOLICITORS OF RECORD

DOCKET:                                           A-501-04

STYLE:                                                Laurentian Pilotage Authority v.

Gestion C.T.M.A. Inc. et al.

PLACE OF HEARING:                     Montréal, Quebec

DATE OF HEARING:                        May 31, 2005

REASONS FOR JUDGMENT:       Décary J.A.

CONCURRING:                                Desjardins J.A.

Pelletier J.A.

DATE OF REASONS:                        June 10, 2005

APPEARANCES:

Guy P. Major                                                                 FOR THE APPELLANT

Francis Gervais                                                  FOR THE RESPONDENT

SOLICITORS OF RECORD:

Guy P. Major                                                                 FOR THE APPELLANT

Montréal, Quebec

Deveau, Lavoie, Bourgeois, Lalande                              FOR THE RESPONDENT

& Associés, LLP

Laval, Quebec