Date: 20031222
Docket: T-1372-03
Citation: 2003 FC 1513
Toronto, Ontario, December 22nd, 2003
Present: Madam Prothonotary Milczynski
BETWEEN:
MAGIC SPORTSWEAR CORP. and
BLUE BANANA
Plaintiffs
and
OT AFRICA LINE LTD., OT AFRICA LINE,
and the Owners and Charterers and all others interested
in the Ship "MATHILDE MAERSK"
and in the Ship "SUZANNE DELMAS"
Defendants
REASONS FOR ORDER AND ORDER
Introduction
[1] These reasons follow the order issued orally on the hearing of the motion on December 15, 2003, dismissing the Defendants' motion for a stay of the Plaintiffs' action.
[2] This action arises out of a claim for the partial loss of a cargo of goods that were shipped in a container by sea. The Plaintiffs, Magic Sportswear Corp., and Blue Banana, were the shipper and consignee of the goods respectively. The Defendants, OT Africa Line Ltd., and OT Africa Line were the carriers of the goods.
[3] This motion is brought by the Defendants, who seek a stay of the action on the basis of the forum selection clause contained in the bill of lading for the shipment of the goods, and on the basis of the doctrine of forum non conveniens. The Plaintiffs argue that they are entitled, as of right, to have their claim adjudicated by this Court on the basis of section 46 of the Marine Liability Act or alternatively, also on the basis of forum non conveniens.
Facts
[4] The Plaintiff, Magic Sportswear Corp., is a company incorporated in the United States that shipped 170 cartons of merchandise by container from New York City to the Plaintiff company Blue Banana in Monrovia, Liberia. The Plaintiffs claim that when the container arrived in Monrovia, 99 of the 170 cartons were missing.
[5] The resolution of any factual dispute regarding the missing cargo will depend upon the evidence of witnesses present when the container was opened in Monrovia. The Plaintiffs state that all of these witnesses are located in Liberia. Other Plaintiffs' witnesses may be called from New York.
[6] The Defendant, OT Africa Line issued the bill of lading for the shipment on February 5, 2002 at Toronto, Canada. The ocean freight payable for the shipment was payable at Toronto, Canada. There is also evidence, and I find as a fact, that the Defendant OT Africa Line has offices, maintains a call centre and conducts business from offices in the Toronto area and conducts business through an agency (Seabridge International Shipping Inc., or OTAL North America) in the greater Toronto area.
[7] The Plaintiffs commenced their action for damages in the amount of $30,000.00 in this Court on August 1, 2003, and served OT Africa Line at their Toronto area office on August 15, 2003. The claim is actually a subrogated claim by a Toronto based insurance company that paid out under its policy with the Plaintiffs for the loss of goods.
[8] On September 3, 2003, OT Africa Line commenced proceedings in the High Court of Justice in England for a determination that it was not liable for the Plaintiffs' loss. Notice of these proceedings was served on the Plaintiffs, who, on October 28, 2003, filed an Acknowledgment of Service form that indicated that the they would be contesting the jurisdiction of the English courts. The Plaintiffs have not, however, taken any further steps in that regard, but submit that they were awaiting the outcome of this motion.
[9] On September 8, 2003, on a motion made ex parte to the English court, the Defendants obtained an "anti-suit injunction" restraining the Plaintiffs from proceeding with this action, and then, on September 9, 2003, the Defendants filed this motion for a stay of the Canadian proceedings.
Analysis
[10] The Defendants rely on the following forum selection clause in the bill of lading:
Any claim or dispute whatsoever arising in connection with the carriage under the Bill of Lading shall exclusively be governed by English law and determined by the High Court of London.
[11] The Defendants also note that they have their head offices in England, issue financial statements there, and submit that overall, England is a more convenient and appropriate forum for the conduct of the trial.
[12] The Plaintiffs rely on section 46 of the Marine Liability Act, which states as follows:
46(1) If a contract for the carriage of goods by water to which the Hamburg Rules do not apply provides for the adjudication or arbitration of claims arising under the contract in a place other than Canada, a claimant may institute judicial or arbitral proceedings in a court or arbitral tribunal in Canada that would be competent to determine the claim if the contract had referred the claim to Canada, where
(a) the actual port of loading or discharge, or the intended port of loading or discharge under the contract, is in Canada;
(b) the person against whom the claim is made resides or has a place of business, branch or agency in Canada; or
(c) the contract was made in Canada.
[13] Clearly subsections 46(1)(b) and (c) are satisfied in this case. The Defendants have a place of business, branch or agency in Canada, and there is no dispute that the contract for the shipment and carriage of the 170 cartons was made in Canada. On that basis, and relying upon obiter comments by the Court in Z.I. Pompei Industrie v. ECU-Line N.V., [2003] S.C.J. No.23; Incremona-Salerno Marmi Affini Siciliani (IMAS) SNC v.Caster (The), [2003] 3 F.C. 220 (C.A.), the Plaintiffs submit that the Court no longer has any discretion to issue a stay of proceedings under section 50 of the Federal Court Act on either the ground that the claim is being proceeded with in another court or jurisdiction, or where for any other reason, it would be in the interest of justice that the proceedings be stayed.
[14] Section 46 of the Marine Liability Act clearly removes the determining or binding effect of a forum selection clause in a bill of lading or contract for carriage of goods by sea. I do not, however, read the obiter comments of either the Supreme Court of Canada or the Federal Court of Appeal to mean, as the Plaintiffs suggest, that on other grounds this Court could not order a stay of proceedings in the appropriate circumstances if it was in the interest of justice so to do. To conclude otherwise and adopt the Plaintiffs arguments, would mean that in cases where any provision of section 46 of the Marine Liability Act has been satisfied, the Court could never order a stay of proceedings. The result would be, as a consequence, that the Court would lose its ability to control the proceedings before it.
[15] At paragraph 37 of Z.I. Pompey, the Supreme Court states that "section 46(1) of the Marine Liability Act....has the effect of removing from the Federal Court its discretion under s.50 of the Federal Court Act to stay proceedings because of a forum selection clause where the requirements of s.46(1)(a), (b) or (c) are met" (emphasis added). Likewise, at paragraph 13 of the Incremona-Salerno, the Federal Court of Appeal states:
The effect of the subsection is to remove from this Court its discretion under section 50 of the Federal Court Act to stay proceedings on the ground of a jurisdiction or arbitration clause where the requirements of paragraphs 46(1)(a), (b) or (c) are met. In the case at bar, if the Motion Judge is correct in his view of the matter, paragraph 46(1)(a) would prevent the appellants from obtaining a stay based on clause 25 of the bill of lading [which provided for disputes to be adjudicated in Hamburg, Germany], since the port of discharge was the port of Halifax. Consequently, if subsection 46(1) applies to these proceedings, the appellants' stay applications will likely be dismissed. [emphasis added]
[16] These passages make clear that section 46 of the Marine Liability Act negates the determinative effect of forum selection clauses that would otherwise require adjudication in a jurisdiction other than Canada. They do not displace the jurisdiction of this Court under section 50 of the Federal Court Act to exercise its discretion in the appropriate circumstances to order a stay of proceedings, including consideration of the doctrine of forum non conveniens.
[17] In determining whether the Court should exercise its discretion to order a stay in these types of proceedings, a number of factors must be taken into account, including the jurisdiction in which the evidence is situated, the application of foreign law, with what country each party has a connection, whether the Defendant is seeking a procedural advantage by relying on the forum selection clause, and whether the Plaintiff would suffer any prejudice by having to pursue its claim in another jurisdiction.
[18] In this case, taking into account all of the facts and surrounding circumstances relating to the shipment of goods from New York to Monrovia, including the value of the goods, the fact that the true Plaintiffs are in Canada, the Defendants have business interests in Canada, and most particularly the fact that most if not all of the material witnesses will come from Monrovia and/or New York, (which factor favours neither England nor Canada), I find that the most convenient and appropriate forum for the determination of the Plaintiffs' claim, including the interpretation and application of English law, is this Court.
[19] With respect to the Defendants' argument that the Plaintiffs have attorned to the jurisdiction of the High Court of Justice in England, I do not accept such argument. Although the Notice of Acknowledgment signed and filed by the Plaintiffs with the High Court required them to file materials to contest jurisdiction within 28 days of filing, the annotations to the English Rules of Procedure indicate that the determination of the issue may be made at a later date. There may also be a practical reason for the Plaintiffs' failure to defend in the English courts, and that is simply the cost associated with pursuing a $30,000.00 claim in that jurisdiction outweighing the benefit of even a successful result.
ORDER
THIS COURT ORDERS that:
1. The Defendants' motion for a stay of these proceedings is dismissed.
2. The Defendants shall serve and file their Statement of Defence within thirty (30) days of this Order.
3. Costs of this motion are in the cause.
"Martha Milczynski"
Prothonotary
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1372-03
STYLE OF CAUSE: MAGIC SPORTSWEAR CORP. and
BLUE BANANA
Plaintiffs
and
OT AFRICA LINE LTD., OT AFRICA LINE,
and the Owners and Charterers and all others interested
in the Ship "MATHILDE MAERSK"
and in the Ship "SUZANNE DELMAS"
Defendants
PLACE OF HEARING: TORONTO, ONTARIO
DATE OF HEARING: DECEMBER 15, 2003
REASONS FOR ORDER
AND ORDER BY: MILCZYNSKI P.
DATED: DECEMBER 22, 2003
APPEARANCES BY: Mr. C. William Hourigan
FOR PLAINTIFFS
Mr. Marc D. Issacs
FOR DEFENDANTS
SOLICITORS OF RECORD: Fasken Martineau DuMoulin LLP
Toronto, Ontario
FOR PLAINTIFFS
Strathy & Associates
Toronto, Ontario
FOR DEFENDANTS
FEDERAL COURT
TRIAL DIVISION
Date: 20031222
Docket: T-1372-03
BETWEEN:
MAGIC SPORTSWEAR CORP. and
BLUE BANANA
Plaintiffs
and
OT AFRICA LINE LTD., OT AFRICA LINE,
and the Owners and Charterers and all others interested in the Ship "MATHILDE MAERSK"
and in the Ship "SUZANNE DELMAS"
Defendants
REASONS FOR ORDER
AND ORDER
Email this Content