Canadian Red Cross Society v. Air Canada, 2001 FCT 1012

Date: 20010911

Docket: T-2053-99

Neutral citation: 2001 FCT 1012

                                                  ACTION IN PERSONAM AGAINST

                                AIR CANADA AND EXPEDITORS INTERNATIONAL

BETWEEN:

                                                  CANADIAN RED CROSS SOCIETY

                                                                                                                                                          Plaintiff

                                                                              AND

                                                                       AIR CANADA

                                                                                 and

                                                   EXPEDITORS INTERNATIONAL

                                                                                                                                                      Defendant

                                                                              AND

                                                                       AIR CANADA

                                                                                                                                                    Third Party

                                                            REASONS FOR ORDER

RICHARD MORNEAU, PROTHONOTARY:

[1]         This motion to amend, filed by the plaintiff of record (the Red Cross) pursuant to rule 75 of the Federal Court Rules, 1998, (the Rules), seeks leave to add Alpha Therapeutic (Alpha) as a plaintiff in the style of cause.

[2]         The action in which this motion was brought is governed in substance by the Carriage by Air Act, R.S., 1985, c. C-26 (the Act) and the Warsaw Convention (the Convention) which is incorporated into that Act.

Facts

[3]         The relevant facts in this case are summarized below.

[4]         After merchandise belonging to the Red Cross was severely damaged during a flight between Los Angeles and Ottawa on or about November 26, 1997, the Red Cross filed an action for damages on November 22, 1999, against, inter alia, Air Canada (the defendant) in its capacity as carrier. In the air waybill, the Red Cross had been named as consignee, Air Canada as carrier and Alpha as consignor.

[5]         As sole plaintiff, the Red Cross brought the action within the two-year limitation period stipulated by article 29 of the Convention, which reads:

Analysis

[6]         Counsel for the Red Cross attempted to base the action on articles 12 to 14 of the Convention for the purpose of arguing that the action brought in a timely manner by their client had interrupted the limitation period in fact and in law in regards to both the Red Cross and Alpha. The relevant passages of those articles read as follows:                      

[7]         In my view, those articles do not apply in this case since they do not contemplate the factual situation faced by the Red Cross, i.e. loss of or damage to shipped cargo. Article 18 of the Convention is addressed to the Red Cross's situation and reads as follows:

[8]         Therefore, it cannot be determined that the action of the Red Cross also interrupted the limitation period with regards to Alpha.

[9]         In my view, the appropriate reasoning and the conclusion to draw can be found in Newfoundland Steamships Ltd. et al. v. Canada Steamship Lines Ltd. et al. (1979),

107 D.L.R. (3d) 84, a decision of the Federal Court of Appeal.

[10]       In that case, some plaintiffs listed specifically in an appendix to their statement of claim in which they had described themselves in the style of cause as "those persons interested in the cargo laden on board the ship ‘Fort St. Louis'" sought to add, after the expiry of the limitation period, the names of additional plaintiffs whose identity was not known at the time the action was commenced.

[11]       Mr. Justice Pratte, who set aside the decision of the judge below granting the amendment, made the following analysis:

The Judge below, nevertheless, rendered the judgment against which this appeal is directed and granted the application for reasons that he summarized as follows [90 D.L.R. (3d) 79, at p. 83; [1979] 1 F.C. 393]:

     On the whole, therefore, I am of the opinion that this is not a case where the claims of any new parties, appearing in the appendix, now sought to be substituted for the former appendix, are really new claimants whose claims are prescribed but rather that they are included in the designation of persons interested in the cargo on the ship. It is merely the substitution of new particulars which have since come to light for former particulars and, moreover, in the great majority of the cases merely adds the name of the shipper as well as the consignee, or conversely, provides defendants with greater details from which to check the claims. It is not necessary to decide at this stage of the proceedings whether the claimant should be the shipper or the consignee but justice requires that whoever suffered the loss should be compensated for it, provided that the total amount of the claim does not exceed $509,443.28 (which includes surveyors and adjusters fees) sought for the "Plaintiff cargo interest for distribution as their interests may appear" as stated in conclusion of the original statement of claim.

This judgment, in my respectful opinion, must be set aside.

It is common ground that the prescription of the plaintiffs' claim was governed by the law of Quebec where the cause of action arose (see s. 38 of the Federal Court Act, R.S.C. 1970, c. 10 (2nd Supp.)). The plaintiffs' claim was based either entirely on delict, as found by the Judge below, or, as argued by the plaintiffs' counsel, both on delict and contract. In either case, the statement of claim asserted a delictual claim which was subject to a prescription of two years (art. 2261 of the Quebec Civil Code) after the expiry of which the debt (in so far as it was founded on delict) was absolutely extinguished (art. 2267 Civil Code). In these circumstances, the Judge could not authorize the addition of new plaintiffs to the action unless he came to the conclusion that the commencement of the action in 1975 had interrupted the prescription of the claims of those new plaintiffs as well as of those who were named as plaintiffs in the original action: see Leesona v. Consolidated Textile Mills (1977), 82 D.L.R. (3d) 56 at p. 62, [1978] 2 S.C.R. 2">[1978] 2 S.C.R. 2 at p. 11, 35 C.P.R. (2d) 254.                                                                                              

It is argued, however, that the plaintiffs were not really seeking to add new parties to the action; they merely wanted, it is said, to particularize the description of the plaintiffs in the style of cause ("THOSE PERSONS INTERESTED IN THE CARGO etc. ..."). I do not agree. Had the plaintiffs been merely described as "those interested in the cargo ...", it is certainly arguable that the action would have been irregularly instituted and would not, for that reason, have interrupted the prescription. But this point need not be decided since, in this case, the plaintiffs were not described in that vague and general way: the style of cause as well as para. 3 of the statement of claim contained an express reference to annex A as containing the names of all those having an interest in the cargo. The action, in my opinion, was commenced in the name of the persons enumerated in annex A and the effect of the judgment under attack is clearly, in my view, to authorize that new plaintiffs be added to the action.

The decision of the Supreme Court of Canada in the Leesona case does not, in my opinion, support the decision of the Trial Division. Here the plaintiffs were not seeking to correct a misnomer or to overcome a mere technicality; they wanted to amend the statement of claim so as to add new parties whose identities had been unknown to all persons concerned at the time of the commencement of the action. That, in my view, could not be done because I do not see how the action commenced in 1975 could have interrupted the prescription of claims of persons who were not parties to that action.

In the exercise of its discretion under Rule 424, the Court cannot, even in order to achieve a fuller measure of justice, disregard the effect of prescription. This is, in my view, what the Trial Division has done here.

[Emphasis added]

[12]       In this case, as in Newfoundland Steampships, it cannot be argued that the plaintiffs are seeking to correct a misnomer or to overcome a mere technicality. Nor is this a case where fairness requires the court's intervention to ensure that procedure does not prevail over substance.

[13]      An example of such a situation is the Leesona decision, cited by Pratte J.A. in Newfoundland Steampships, where, despite the expiry of the limitation period, the Supreme Court allowed the defendant to correct its company name in order that the style of cause reflect the parties' intentions that the action be brought against the operating company and not the holding company.

[14]       In Pateman v. Flying Tiger Line, [1987] 3 F.C. 613, upheld on appeal as to the result in (1988), 89 N.R.155, a decision the Red Cross relied on heavily, an insurer, which had become legally subrogated to the rights of the insured, sought to add the name of the insured as a plaintiff to the action in damages it had brought pursuant to the Act and the Convention. Notwithstanding the expiry of the two-year limitation period under article 29 of the Convention, the insurer was allowed to make the change in order to prevent a potential challenge to its status in the action by the defendants.

[15]       It is clear from the reasons stated at the beginning and at the end of Pateman that the Court considered the insurer and the insured to constitute a single party in the action and that there was a blatant need to remedy the situation if the action was to proceed on the merits unhindered by procedural requirements.

[16]       The situation in this case is distinctly different from that in Leesona, Pateman and in similar cases mentioned in either of those decisions.

[17]       In the case at bar, the present plaintiff, the Red Cross, was aware from the outset of the existence of Alpha as a separate entity. Although an attempt was made to argue that Alpha had not been added as co-plaintiff by sheer inadvertence, no affidavit was produced as evidence in that regard.

[18]       It appears therefore that two separate entities had a right of action against the defendants but that for reasons unknown to this Court, only one of those entities exercised its right of action within the appropriate period. Since I am unable to conclude, as did the Court in Newfoundland Steamships, that the action brought by the Red Cross has interrupted the limitation period in favour of Alpha, I must find that Alpha's right of action is prescribed. Notwithstanding the latitude normally afforded the Court on motions to amend, the motion in this case must be dismissed with costs.

[19]       Although in Pateman, the trial division referred to the former rule 1716, the ancestor of rules 103 and 104, I think it would be inappropriate in this case to apply rules 76, 77 or 104(1)(b) since adding Alpha as a plaintiff would effectively disregard the substantive rules of prescription prescribed by the Convention.

[20]       For these reasons, the plaintiff's motion to amend will be dismissed with costs. In order to dispose of its other motion to extend the limitation period for service of its affidavit of documents, the plaintiff shall serve that affidavit within 10 days of the order accompanying these reasons.

                                                                                                        Richard Morneau   

Prothonotary

MONTRÉAL, QUEBEC

September 11, 2001

Certified true translation

S. Debbané, LL.B.                          

                               FEDERAL COURT OF CANADA

           NAMES OF COUNSEL AND SOLICITORS OF RECORD

COURT FILE NO.:

STYLE OF CAUSE:

T-2053-99

ACTION IN PERSONAM AGAINST AIR CANADA AND EXPEDITORS INTERNATIONAL

BETWEEN:

CANADIAN RED CROSS SOCIETY

                                                                             Plaintiff

AND

AIR CANADA

and

EXPEDITORS INTERNATIONAL

                                                                        Defendants

AND

AIR CANADA

                                                                        Third Party

PLACE OF HEARING:Montréal, Quebec

DATE OF HEARING:July 9, 2001

REASONS FOR ORDER BY RICHARD MORNEAU, PROTHONOTARY

DATE OF REASONS FOR ORDER:September 11, 2001

APPEARANCES:

SOLICITORS OF RECORD:

Date: 20010911

Docket: T-2053-99

Montréal, Quebec, September 11, 2001

Present:           Richard Morneau, prothonotary

                        ACTION IN PERSONAM AGAINST

      AIR CANADA AND EXPEDITORS INTERNATIONAL

BETWEEN:

                        CANADIAN RED CROSS SOCIETY

                                                                                                      Plaintiff

                                                    AND

                                             AIR CANADA

                                                       and

                         EXPEDITORS INTERNATIONAL

                                                                                                Defendants

                                                    AND

                                             AIR CANADA

                                                                                                Third Party

                                                  ORDER

The plaintiff's motion to amend is dismissed with costs. In order to dispose of its

other motion to extend the limitation period for service of its affidavit of documents, the

plaintiff shall serve that affidavit within 10 days of this order.

Richard Morneau   

                                                                                               Prothonotary                                          

Certified true translation

Sophie Debbané, LL.B.

                                                                Federal Court of Canada

Trial Division

Date: 20010911

Docket: T-2053-99

ACTION IN PERSONAM AGAINST

AIR CANADA AND EXPEDITORS INTERNATIONAL

Between:

CANADIAN RED CROSS SOCIETY

                                                        Plaintiff

AND

AIR CANADA

and

EXPEDITORS INTERNATIONAL

                                                Defendants

AND

AIR CANADA

                                                 Third Party

REASONS FOR ORDER