Date: 19980209
Docket: T-153-98
BETWEEN:
CORCOVADO YACHT CHARTERS LTD.,
Plaintiff,
- and -
FORESHORE PROJECTS LTD.,
Defendant.
REASONS FOR ORDER
MR. JOHN A. HARGRAVE
PROTHONOTARY
[1] These reasons arise out of the Defendant's application for a stay on the grounds that the Federal Court has no jurisdiction to deal with an action involving the lease of business premises. The Plaintiff, Corcovado Yacht Charters Ltd. ("Corcovado"), which operates a tackle shop, fishing charter booking centre and fishing charter operation from a building in part built on piling at Granville Island, in False Creek, a part of Vancouver Harbour, received a refusal to renew its sublease from the Defendant landlord, Foreshore Projects Ltd. ("Foreshore"). Foreshore in turn leases an area, of which the business premises is a part, from the Canada Mortgage and Housing Corporation ("C.M.H.C.").
[2] Corcovado's lease expired 31 January 1998. Corcovado believes there was a renewal or an implied right of renewal and on this basis claims injunctive and declaratory relief, specific performance, or alternatively, damages. When the Plaintiff brought an ex parte application for an interim injunction the judge hearing the matter expressed concern whether this Court had jurisdiction and therefore adjourned the application, suggesting the question of jurisdiction be determined.
[3] The result of this suggestion was a hearing on 5 January 1998 at which the Defendant brought a motion to stay the action for want of jurisdiction. At the same time the Plaintiff sought an adjournment to allow time within which to cross-examine on the Defendant's affidavits opposing the injunction application and also to obtain the Defendant's headlease and a copy of a 1973 Order-in-Council, which is said to form part of Foreshore's headlease and which apparently set up the Granville Island operation. I denied Corcovado's motion for an adjournment, but allowed Foreshore's motion for a stay for want of jurisdiction.
[4] While the law is fairly well settled as to the jurisdiction of the Court to deal with a case such as the present, there is no such thing as an unimportant case, from the point of view of the parties. Moreover, the parties are entitled to know, by more than a few extemporaneous remarks on the completion of the hearing, the reason for the outcome. Thus these promised reasons which, while they break no new ground, set out the analysis leading to the stay of the Plaintiff's action.
BACKGROUND
[5] Granville Island is in part reclaimed land belonging to the Federal Government and administered by C.M.H.C. Since 1989 Corcovado has operated from Granville Island premises called Building 45 which is subleased from Foreshore. As I have said the building is built partly on piling, with the sea wall running beneath, however Building 45 is accessed directly from the land. I would note here that whether the building is all on piling, with water beneath, or only partly on piling and partly landward of the seawall, has no bearing on the Court's jurisdiction in this instance.
[6] Corcovado's operation includes a fishing tackle shop and a charter booking centre. It is an operations base, in a paperwork sense, for Corcovado's five charter vessels which range from 20 ft. to 36 ft., all moored at a float to the west of Building 45.
[7] Corcovado's landlord, Foreshore, holds the property under a lease from C.M.H.C. Corcovado's most recent sublease from Foreshore, on what appears to be a standard typed form, for one year, was dated 20 January 1995: the lease contains two one-year renewal options which were exercised to extend Corcovado's leasehold until 31 January 1998. The reasons leading to the present refusal by Foreshore to grant a new sublease are not pertinent to the present motions, however I would note the Defendant has subleased Building 45 to a new tenant using the same standard form lease and at the same rate as the Plaintiff would have paid. In any event Corcovado commenced this action and made its ex parte application on 29 January, 1998.
[8] The time between the commencement of the hearing of the Plaintiff's ex parte application for injunctive relief and the scheduled reconvening of that hearing, with counsel for the Defendant present, was brief. The Defendant therefore coupled to its motion for a stay of the Plaintiff's action a request for short leave. The Plaintiff also brought a new motion, on short leave, to obtain cross-examination on the Defendant's affidavits filed in opposition to the motion for an injunction, for an order that the Plaintiff produce a copy of its headlease and to require that C.M.H.C., which is not a party to the action, produce a copy of Order-in-Council P.C. 1973-1453 (the "Order-in-Council"). Counsel for the Plaintiff added an oral motion for an adjournment of the present hearing so the Plaintiff might have time to obtain and consider the headlease and the Order-in-Council. I would note here that the content of both documents is unknown, however it may be that the Order-in-Council is a vesting of the responsibility for Granville Island, which is federal land, in the C.M.H.C.
ANALYSIS
[9] Counsel agreed that in order to deal with the motion for documents and the oral motion for adjournment, they needed to present argument on the motion for a stay.
[10] The simple answer to the question of maritime jurisdiction might be that given by Mr. Justice Pratte in his reasons for the Court of Appeal in Domestic Converters Corporation v. Arctic Steamship Line [1984] 1 F.C. 211. There, part of the issue was the jurisdiction of the Court over the defendant lessee of a shed in the Port of Montréal, built and owned by the National Harbours Board. The shed had collapsed under snow load, damaging the plaintiffs' goods. The only basis for jurisdiction was the argument that the claim was based on Canadian maritime law as defined in s. 2 of the Federal Court Act.
[11] In Domestic Converters Corporation (supra), the plaintiffs argued both liability in tort and under a contract for the custody of the goods after discharge. Both the Trial Judge and the Court of Appeal dismissed this portion of the claim: the mere fact that the goods had been the subject of maritime carriage, which extended to storage ashore and that the storage shed was in the Port of Montréal, on National Harbours Board territory, did not give the matter a maritime aspect. Rather it was held to be a purely civil action governed by provincial law. However the outcome of the present motion perhaps deserves a little more explanation and analysis. In analyzing the present claim I should look at the transaction as a whole, for example, as was done by the Federal Court of Appeal in Monk Corporation v. Island Fertilizers Ltd. (the "Super Spirit") (1989) 97 N.R. 384.
[12] Key to the approach of counsel for the Plaintiff is the submission that the action is governed by Canadian maritime law and thus falls within the Court's jurisdiction by way of s. 22 (1) of the Federal Court Act. Counsel for the Defendant submits that the Plaintiff has met none of the three-pronged test for jurisdiction set out in ITO - International Terminal Operators Ltd. v. Miida Electronics Inc. [1986] 1 S.C.R. 752.
[13] The scope of the jurisdiction of the Federal Court, a statutory court, has been a pitfall for many litigants despite the fairly concise statement of the requirements essential to support a finding of jurisdiction set out by the Supreme Court of Canada in the International Terminal Operators case (supra) at p. 766:
| "1. There must be a statutory grant of jurisdiction by the federal Parliament. |
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| 2. There must be an existing body of federal law which is essential to the disposition of the case and which nourishes the statutory grant of jurisdiction. |
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| 3. The law on which the case is based must be 'a law of Canada' as the phrase is used in s. 101 of the Constitution Act, 1867.". |
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As a statutory court, the Federal Court must find its jurisdiction within this framework.
[14] The Plaintiff submits its action is founded on Canadian maritime law and thus the first element of the test, a statutory federal grant of jurisdiction, has been met by way of s. 22 (1) of the Federal Court Act:
| "The Trial Division 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.". (emphasis added) |
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[15] Just what is Canadian maritime law? It is sometimes defined in a circular manner to the effect that once a claim is found to come within one of the subheads of jurisdiction in s.22 (2) of the Federal Court Act there is necessarily substantive Canadian maritime law to support the claim: see for example Skaarup Shipping Corporation v. Hawker Industries Ltd. [1980] 2 F.C. 746 at 750. Unfortunately for the Plaintiff, in the present instance, the cause of action does not fall within any of the specific subsections of s. 22 (2) of the Federal Court Act.
[16] Canadian maritime law is also defined in s. 2 of the Federal Court Act:
| "'Canadian maritime law' means the law that was administered by the Exchequer Court of Canada on its Admiralty side by virtue of the Admiralty Act, chapter A-1 of the Revised Statutes of Canada, 1970, or any other statute, or that would have been so administered if that Court had had, on its Admiralty side, unlimited jurisdiction in relation to maritime and admiralty matters, as that law has been altered by this Act or any other Act of Parliament;". |
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The courts and particularly the Supreme Court of Canada, have had a good deal to say as to what constitutes Canadian maritime law. By way of explanation of s. 2 of the Federal Court Act, Mr. Justice McIntyre, who wrote the Court's decision in International Terminal Operators (supra), was of the view that part of the definition of Canadian maritime law, in the Federal Court Act, was adopted so that it would include an unlimited jurisdiction in relation to maritime and admiralty matters (p. 774) and that the words "maritime" and "admiralty" should be interpreted within the modern context of commerce and shipping. In Mr. Justice McIntyre's view, "Canadian maritime law" is that body of law which was adopted from England, encompassing both specialized rules and principles of admiralty together with adopted common law rules and principles as they have been and continue to be modified, expanded and amended by Parliament and by judicial precedent (ibid, pp. 771 and 776).
[17] To bring judicial precedent up to date there is currently some discussion among members of the Vancouver Admiralty Bar, as to the extent that Madam Justice McLachlin's comments in Bow Valley Husky (Bermuda) Ltd. v. St. John Shipbuilding Ltd. (an unreported Supreme Court of Canada decision of 18 December 1997) on the scope of application of maritime law principles have modified the way in which we think of Canadian maritime law. In Bow Valley fire damage to electrical and communications cables put the Bow Drill III, an offshore drilling rig, out of service. Among the issues were the recovery of economic loss and the applicability of contributory negligence principles under Canadian maritime law.
[18] In Bow Valley the Plaintiff urged that maritime law should not apply because the defective equipment, a heat tracing circuit, had no relationship to navigation and shipping, but rather the claims were advanced in contract and tort in the context of a local matter involving property and civil rights. Madam Justice McLachlin wrote on Canadian maritime law in her dissenting reasons (the majority decided the case on an analysis of a contractual limitation clause and thus did not have to consider the scope of Canadian maritime law). In my view, other than on the subject of recovery, in the face of contributory negligence, Madam Justice McLachlin has not expanded the scope of Canadian maritime law, but rather, using the case law to date, has provided a sound analysis of the application of Canadian maritime law. She points out that "... the legal nature of a claim is not the decisive factor in the determination of whether the principles of maritime law apply." (para. 84). She then turns to ITO - International Terminal Operators v. Miida Electronics Inc. (supra), for the concept that the subject matter being considered must be so "... integrally connected to maritime matters as to be legitimate Canadian maritime law within federal legislative competence." (p. 774). At the end of the relevant passage, which I will shortly quote in full, Madam Justice McLachlin concludes, by using the "pith and substance" test, that the matter before the Supreme Court is not one of merely local concern, coming within s. 92 of the Constitution Act, 1867, that is, it did not come within the provincial jurisdiction as a matter of property and civil rights, but is integrally connected with maritime matters and thus should be resolved by the application of Canadian maritime law. This interesting passage is as follows:
| "84 The plaintiffs submit that maritime law should not apply because the Thermaclad had no relationship to the rig's navigational equipment and because the claims are advanced in tort and contract, rather than navigation and shipping. However, the legal nature of a claim is not the decisive factor in the determination of whether the principles of maritime law apply. What is required is 'that the subject-matter under consideration in any case [be] so integrally connected to maritime matters as to be legitimate Canadian maritime law within federal legislative competence": [1986] 1 S.C.R. 752=">ITO -- International Terminal Operators Ltd. v. Miida Electronics Inc., [1986] 1 S.C.R. 752, at p. 774, per McIntyre, J. It follows that 'tortious liability which arises in a maritime context is governed by a body of maritime law within the exclusive legislative jurisdiction of Parliament': [1990] 3 S.C.R. 1273=">Whitbread v. Walley, [1990] 3 S.C.R. 1273, at p. 1289, per La Forest, J. |
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| 85 This case involves tortious liability arising in a maritime context. The Court of Appeal, per Cameron J.A., held that '[t]he activities of the Bow Drill 3 are essentially maritime in nature, albeit a modern view of maritime activity' (p. 134). The rig was not only a drifting platform, but a navigable vessel. As Cameron J.A. put it at pp. 133-34, the rig 'is capable of self-propulsion; even when drilling, is vulnerable to the perils of the sea; is not attached permanently to the ocean floor and, can travel world wide to drill for oil.' Alternatively, even if the rig is not a navigable vessel, the tort claim arising from the fire would still be a maritime matter since the main purpose of the Bow Drill III was activity in navigable waters. The operation of the rig's heat trace system was hazardous because the GFCB system that was installed was not appropriate in the ungrounded marine context. The claims against the defendants for failure to warn included allegations that the defendants knew about the special marine material requirements such as non-combustibility or flame retardancy. The products liability issues in this case are clearly dominated by marine considerations. |
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| 86 This is not a case that "is in 'pith and substance' a matter of local concern involving property and civil rights or any other matter which is in essence within exclusive provincial jurisdiction under s. 92 of the Constitution Act, 1867": ITO, supra, at p. 774, per McINtyre J. I conclude that the issues for resolution in this case are integrally connected with maritime matters, and fall to be resolved under Canadian maritime law.". |
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[19] Applying all of this I must consider whether the business of the Plaintiff and the transaction between the Plaintiff and the Defendant are so clearly dominated by marine considerations, or are so integrally connected to maritime matters, that they should, or indeed must, fall to be resolved under Canadian maritime law and thus come within the Court's jurisdiction. In doing so I must be aware of and avoid encroachment on any matter which is in pith and substance a local matter involving property rights or civil rights which in essence is exclusively a provincial jurisdiction.
[20] Certainly the Plaintiff's business may well be on federal land, land which in part has been reclaimed from the sea (albeit from and on a provincial seabed) and is a business of selling fishing tackle and supplying charter vessels, conducted from a building standing in part on piling driven into the bottom of False Creek. But it is also a business that could be and indeed is often conducted from venues well inland. Is this business so closely connected with the federal sphere of navigation and shipping that Canadian maritime law, which includes the law of contract, must be searched to find particular law that is applicable? I do not believe so. I find it even more difficult to say that the sublease of Building 45 by the Plaintiff, a landlord holding the property from the C.M.H.C. and a British Columbia company, to the Defendant, another British Columbia company, is so integrally connected to any maritime matter as to fall to be resolved under Canadian maritime law.
[21] Rather, the lease and its cancellation or non-renewal and any breach of the lease are, in pith and substance, matters of property law falling clearly within the provincial spheres of property and civil rights in the province and matters of a merely local or private nature within the province, all matters allocated to the province by s. 92 of the Constitution Act, 1867.
[22] Counsel for the Plaintiff urges that I ought to suspend judgment as to jurisdiction until he can obtain a copy of Privy Council Order-in-Council P.C. 1973-1453, ostensibly giving the C.M.H.C. authority as landlord over Granville Island and a copy of the headlease from C.M.H.C. to the Defendant, Foreshore Projects Ltd. I do not see how either of these documents might assist the Plaintiff. Rather, any authority to the C.M.H.C. could not grant jurisdiction to individual subjects to have a property dispute between a sublandlord and a subtenant adjudicated upon by the Federal Court.
[23] Plaintiff's counsel also notes the sublease is subject to the Navigable Waters Protection Act, now chapter N-22 R.S.C. 1985. By s. 21.19 of the specimen lease which the Plaintiff has provided, the tenant, Corcovado, agrees particularly that it will not construct or use any works unless the provisions of the Navigable Waters Protection Act have been complied with and both the landlord and C.M.H.C. have given consent. At best this raises the question of whether the lease between the parties is somehow founded upon or so closely connected with the Navigable Waters Protection Act as to give this Court jurisdiction.
[24] One brief paragraph of a 25 page lease merely requires the tenant to abide by the Navigable Waters Protection Act. The Act, governs, among other things, disposal of waste, the construction of works including wharves and docks, the dumping of dredged material and the removal of wrecks, all in relation to navigable waters and the penalties for various violations. This is of no assistance to the Plaintiff as it does not touch on contractual relations or remedies applicable to a sublease of Crown land, or confer any right of action on the Plaintiff.
CONCLUSION
[25] Reduced to its simplest terms, the issue is whether the Plaintiff's action should be characterised as the breach of a marine agreement, governing a maritime venture requiring the application of Canadian maritime law, or as the breach of an agreement for the lease of a waterfront property. If the former it is within the jurisdiction of the Court: if it is the latter, it falls outside the scope of Canadian maritime law. I do not see any factors which import a maritime character so as to make the transaction one clearly dominated by marine considerations or which integrally connect it to maritime matters so that it should be resolved under Canadian maritime law.
[26] This is a civil dispute over a building. It is a matter which is of purely local and provincial concern, a matter of property rights as between subject and subject. It is clearly a provincial matter within the ambit of the British Columbia Courts, at least to the extent that it is not governed by the arbitration provision contained in the lease.
[27] The Defendant has sought and has obtained a stay for want of jurisdiction, rather than a dismissal of the action. However, so far as the Plaintiff's application for documents is concerned, once this Court finds it has no jurisdiction, it cannot then make any further order. Thus the Plaintiff's motion is dismissed.
(Sgd.) "John A. Hargrave"
Prothonotary
Vancouver, British Columbia
9 February, 1998
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