Western Great Lakes Pilots' Assn. c. Navitrans Shipping Agencies Inc., 2002 FCT 915

                                                                                                                                            Date: 20020827

                                                                                                                                       Docket: T-1404-01

Neutral Citation: 2002 FCT 915

ADMIRALTY ACTION IN REM AND IN PERSONAM

BETWEEN:

                                                          WESTERN GREAT LAKES

PILOTS' ASSOCIATION (DISTRICT 3)

and

LAKES PILOTS ASSOCIATION, INC. (DISTRICT 2)

and

ST. LAWRENCE SEAWAY PILOTS'

ASSOCIATION (DISTRICT 1)

and

GREAT LAKES PILOTAGE AUTHORITY

and

LAURENTIAN PILOTAGE AUTHORITY

                                                                                                                                                        Plaintiffs

                                                                                 and

                                             NAVITRANS SHIPPING AGENCIES INC.

                                                                                                                                                      Defendant

and

ATTIKA SHIPPING CORP.

and

GOLDEN SUN CRUISES

and

CAPTAIN VANGELIS PANAGIOTAKIS

and

THE VESSEL ARCADIA

and

THE OWNERS AND ALL OTHERS

INTERESTED IN THE VESSEL ARCADIA

                                                                                                                                               Third Parties

REASONS FOR JUDGMENT

RICHARD MORNEAU, PROTHONOTARY:

[1]         In the present action, which was conducted for the purposes of trial as a simplified action, each of the plaintiffs is suing the defendant for less than $50,000 for compulsory pilotage services within the meaning of the Pilotage Act, R.S.C. 1985, c. P-14 (the Act).

Context

[2]         The context, which is essential to understanding this action, is indicated by the agreed statement of facts filed by the parties and the affidavit of Captain Daniel Trottier filed as evidence in chief by the plaintiffs. The agreed statement of facts reads as follows:

1.             Plaintiff Laurentian Pilotage Authority is a federal government (Crown) Corporation having its head office in Montreal, Quebec, (sic) it provided compulsory pilotage services to the passenger cruise ship MTS ARCADIA, under agency of the Defendant Navitrans Agencies Inc. ("Navitrans"), on its up-bound voyage on June 9, 10 and 11, 2001 from Les Escoumins to the entrance to Saint-Lambert Lock in Montreal, Quebec.

2.             Plaintiff Great Lakes Pilotage Authority is a federal government (Crown) Corporation having its head office at Cornwall, Ontario. It provided compulsory pilotage services to the passenger cruise ship MTS ARCADIA under the agency of Navitrans, from June 11 to July 11, 2001, by despatching its own employee pilots to the ship MTS ARCADIA from Saint-Lambert Lock to the Great Lakes, alternating with American pilots grouped in three separate associations known as Saint-Lawrence Seaway Pilots' Association of International District 1 (Snell Lock to Lake Ontario inclusive), Lakes Pilots Association, Inc. of International District 2 (Welland Canal, Lake Erie and entrance to Lake Huron), and Western Great Lakes Pilots Association of International District 3 (Saint-Mary's River, Lake Huron and Lake Superior). Canadian and American pilots for Districts 2 and 3 were also dispatched to MTS ARCADIA through US dispatchers for these districts. MTS ARCADIA sailed in all three International Districts between the dates aforementioned.

3.             During its cruising operations, a Warrant of Arrest was issued by the Federal Court (T-1266-01) on July 13, 2001, which was served on the ship at Windsor, Ontario on July 17, 2001.

4.             By letter dated July 19, 2001, Me George Pollack, Solicitor for Navitrans, advised the treasurer of the Laurentian Pilotage Authority, Mr. Yvon Martel, that the Laurentian Pilotage Authority should exercise its right of recovery as against the Owners by arresting the ship. A Copy of the said letter is attached as Exhibit "A".

5.             The Federal Court, under an Order of associate senior prothonotary Peter A. K. Giles, dated July 20, 2001, permitted that the ship to (sic) move under arrest from the Port of Windsor to Montreal.

6.             On the 20^th of July, 2001, Me Guy Major, solicitor for the Plaintiffs, sent a series of demand letters setting out the sums owed to the various plaintiffs for compulsory pilotage services and attaching the corresponding invoices. The said claims are in the following amounts:

                 Great Lakes Pilotage Authority                        $26,270.60 (Exhibit "B" en liasse)

                 Laurentian Pilotage Authority                           $6,675.82 (Exhibit "C" en liasse)

                 Lakes Pilots Association                                   $18,698.28 (Exhibit "D" en liasse)

             (US $12,415.86 X 1.506)

                 Western Great Lakes Pilots' Association         $25,141.16 (Exhibit "E" en liasse)

                 (US $16,694 X 1.506)

                 Saint-Lawrence Seaway Pilots Association            $3,400.55 (Exhibit "F" en liasse)

                 (US $2,258 X 1.506)

                 TOTAL:                                                                                                     $80,186.41

7.             The applicable rate of exchange is of 1.506 Canadian dollars per one US dollar.

8.             On or about July 22, 2001, the vessel proceeded from Windsor to Montreal under the ship Agency of Robert Reford which promptly paid the pilotage charges for that particular voyage of the MTS ARCADIA.

9.             Pursuant to an Order of September 19, 2001, of Prothonotary Richard Morneau in Federal Court file No. T-1620-01, which is an Admiralty Action IN REM and IN PERSONAM taken by the master, officers and crew of the ARCADIA against the ship and the Owners and Charterers, Plaintiffs filed their respective claims by Affidavit on November 29, 2001.

10.           Third Party proceedings filed in Federal Court on August 14, 2001 by Defendant Navitrans Agencies Inc. against Attika Shipping Corp., Golden Sun Cruises, Captain Evangelis Panagiotakis, the Vessel Arcadia and the Owners and all others interest (sic) in the vessel Arcadia are discontinued.

[3]         Mr. Trottier's affidavit reads as follows:

I, Daniel Trottier, resident of the City of Cornwall, province of Ontario, having been duly sworn, depose and say:

1.             I am the superintendent of pilots Eastern Region, Great Lakes Pilotage Authority (GLPA) of Cornwall, ON; I hold a marine certificate as master home trade - ON-1.

2.             I am familiar with and have the information concerning the June and July 2001 sailings of the passenger cruise ship MTS ARCADIA, with licensed pilots in the compulsory pilotage areas of the GLPA, International Districts 1, 2 and 3.

3.             Canadian licensed pilots as well as American licensed pilots, pursuant to section 6 of the Great Lakes Pilotage Regulations (Canada) and the U.S. Pilotage Act and Regulations (section 401.120) are equally authorized to perform pilotage services in International Districts Nos. 1, 2 and 3 as defined at section 3 of our Canadian regulations.

4.             The working arrangements for pilotage services in the International Districts are governed by the Memorandum of Arrangements between the Minister of Transport Canada and the U.S. Secretary of Transportation, and is annexed hereto as Appendix "A" to my Affidavit.

5.             During its passage in the Seaway and Great Lakes in June and July 2001, the MTS ARCADIA, sailed to and from Canadian ports to and from American ports with Canadian and/or American pilots as appears in Appendix "B" to my Affidavit.

6.             Ships sailing through the International Districts 1, 2 and 3 traverse continuously the border between Canada and the United States.

7.             In District No. 1, between Snell Lock and Cape Vincent, ships are mostly in Canadian waters of the Seaway system such as at and near Morrisburg, ON, Iroquois Lock, all of Brockville Narrows and part of the Thousand Islands.

8.             In District No. 2, the Welland Canal is entirely in Canadian waters and ships continuously traverse the border while crossing Lake Erie and the St. Claire River to Port Huron.

9.             In District No. 3, ships sail in both countries in traversing Lake Huron and Lake Superior.

10.           When ordering pilots, the owner, master or agent of a ship nor the Pilotage Authority specify the nationality of the pilot which is to perform the service for that ship; the dispatching of pilots being governed by the provisions of article 3 of the Memorandum of Arrangements.

11.           At no time when ordering pilots did Navitrans as agents advise the GLPA and its dispatch offices, that it was acting as agent for the owners, charterers or sub-charterers of the ship or in the capacity of a principal agent or sub-agent for a principal agent.

(It should be noted that paragraph 11 of this affidavit was substantially toned down on cross-examination. However, we will not be addressing this aspect of the matter.)

Analysis

[4]         In an order dated May 8, 2002, it was established that the questions to be determined at trial were the following:

(a)            Would the Defendant as ship agent be liable to the American Plaintiffs for payment of pilotage fees under the law of contract?

(b)            In light of Sections 3 and 6 of the Canadian Great Lakes Pilotage Regulations and the Memorandum of Arrangements Canada-U.S., does Section 42 apply in respect of U.S. pilots providing pilotage services in the Canadian waters of international Districts 1, 2 and 3 of the Canadian Great Lakes Pilotage Authority and/or simultaneously pursuant to the U.S. legislation above referred to.

(c)            Did the Plaintiffs fail to mitigate their damages in providing pilotage services to the MTS "Arcadia" on the 22^nd of July, 2001 without previously insisting on the payment of sums already due?

(d)            Did the Plaintiffs fail to mitigate their damages by electing to exercise their right of action against Navitrans only notwithstanding that they had a right of action IN PERSONAM against the Owners and Charterers and IN REM against the vessel?

[5]         I intend to deal with question (b) first. In fact, it seems sufficient to answer this question simply in terms of whether section 42 of the Act applies to U.S. pilots providing pilotage services in the compulsory pilotage areas of international districts 1, 2 and 3.

[6]         Section 42 of the Act reads as follows:

[7]         In the case at bar, it must be assumed for the purposes of section 42 that the defendant was acting as the ship's agent within the meaning of this section. In this sense, there is no dispute that the Canadian plaintiffs, that is the Laurentian Pilotage Authority and the Great Lakes Pilotage Authority (the Canadian Authorities), are covered by section 42 of the Act. Should it now be considered that the pilots working for the other plaintiffs, the American plaintiffs, are excluded from the ambit of section 42 of the Act?

[8]         I do not think so.

[9]         It seems to me that on the facts - see the agreed statement of facts and the affidavit of Mr. Trottier at paragraphs [2] and [3], supra - the Canadian Authorities, and in particular the Great Lakes Pilotage Authority, have established some mechanisms that are specifically addressed at fulfilling the purposes of the Act and, in particular, what the Act provides in sections 18 and 20(2). These provisions read:

[10]       Thus, when we come to section 42 of the Act, where Parliament deals with "any pilotage charges" without distinction, it must be assumed that Parliament is well aware of the reality it sets forth, inter alia, in sections 18 and 20(2) of the Act. In other words, an interpretation of the Act in terms of its context and purposes points to the conclusion that Parliament, in so enacting, must certainly have had in mind the situation of the boundary waters between Canada and the United States, i.e., as a primary example, the waters of the Great Lakes. Accordingly, when Parliament discusses "any pilotage charges" without distinction, it must be concluded that it consciously expressed itself in this way in order to cover the pilotage charges owing to any pilot, whether Canadian or American. Had Parliament wished to protect only the pilotage charges of Canadian pilots, it would have stated in section 42, given the operational context of the Act, that it was addressing the pilotage charges of each Authority contemplated by section 3 of the Act, that is, the Canadian Authorities. It did not state this, and the succinctness of its language implies that it intended to cover the pilotage charges of both Canadian and American pilots.

[11]       Question (b) of the order of May 8, 2002 must therefore be answered in the affirmative.

[12]       This answer now leads us to look at questions (c) and (d) of that order. For reference purposes, those questions read:

(c)           Did the Plaintiffs fail to mitigate their damages in providing pilotage services to the MTS "Arcadia" on the 22^nd of July, 2001 without previously insisting on the payment of sums already due?

(d)            Did the Plaintiffs fail to mitigate their damages by electing to exercise their right of action against Navitrans only notwithstanding that they had a right of action IN PERSONAM against the Owners and Charterers and IN REM against the vessel?

[13]       In regard to question (c), it will be recalled that paragraph 8 of the agreed statement of facts states:

8.             On or about July 22, 2001, the vessel proceeded from Windsor to Montreal under the ship Agency of Robert Reford which promptly paid the pilotage charges for that particular voyage of the MTS ARCADIA.

[14]       In my opinion, question (c) must be answered in the negative. It is alleged that as of July 22, 2001, the defendant wanted the plaintiffs to seize the opportunity to force one of their two debtors under section 42 to pay or guarantee the payment of their pilotage charges. I do not think the fact that a creditor does not exert pressure on one of its debtors in order to obtain payment can be raised by the other debtor, in this case the defendant, to argue that the said creditor failed in its duty to mitigate its damages. Otherwise, the purpose and scope of section 42 of the Act would disappear for the plaintiffs' purposes. The plaintiffs' damages, i.e. their pilotage charges, were settled and certain. The fact that they did not attempt to recover them from a debtor at the first opportunity is not a breach of the obligation to mitigate their damages. Going after one debtor rather than another is not an exercise aimed at avoiding the aggravation of the harm suffered.

[15]       As to question (d), I do not think the circumstances of this case mean that we can speak here of a breach of a duty to mitigate. First, an action IN PERSONAM against a foreign owner or charterer is not a reasonable means to which the plaintiffs should have resorted. As to an action IN REM, the plaintiffs advanced their claim against the proceeds of the sale of the vessel in a court case in which, following the arrest of the ship, it was sold by court order and the proceeds of its sale are now sought by various creditors. In the circumstances I fail to see what more the plaintiffs could have done under question (d).

[16]       In view of my conclusions on questions (b), (c) and (d) of the order of May 8, 2002, I need not look at question (a) of that order and assess whether, at the end of the day, if section 42 does not apply to the American pilots, the defendant contracted on its own behalf or solely in the capacity of an agent.

[17]       The action shall therefore be allowed and the defendant ordered to pay the various plaintiffs the following sums as detailed below in the statement of claim:

a) Western Great Lakes Pilots' Association:                                $ 25,141.16

            b) Lake Pilots' Association Inc.:                                                               $ 18,698.28

            c) Saint-Lawrence Seaway Pilots' Association:                                       $ 3,400.55

            d) Great Lakes Pilotage Authority:                                                            $ 26,270.60

            e) Laurentian Pilotage Authority:                                                               $ 6,675.82

[18]       The whole, with costs.

[19]       At the conclusion of submissions, counsel for the defendant moved orally, pursuant to paragraph 50(1)(b) of the Federal Court Act, R.S.C. 1985, c. F-7, that I stay the effect of any judgment allowing the plaintiffs' action on the ground that the plaintiffs could be paid double should they be able to participate in the distribution of the vessel's proceeds of sale.

[20]       I do not intend to allow this oral motion by the defendant, since it did not submit any affidavit evidence to establish that it would suffer irreparable damage if a stay was denied. Moreover, it appears at this point that the chances are rather slim that the plaintiffs may receive any money from the proceeds of sale of the ship, since some prior claims are pending in the matter.

[21]       Judgment shall issue accordingly.

Richard Morneau

Prothonotary

Montréal, Quebec

August 27, 2002

Certified true translation

Suzanne M. Gauthier, C. Tr., LL.L

Date: 20020827

                                            Docket: T-1404-01

Montréal, Quebec, the 27^th day of August, 2002

Present:          Mr. RICHARD MORNEAU, PROTHONOTARY

ADMIRALTY ACTION IN REM

AND IN PERSONAM

BETWEEN:

            WESTERN GREAT LAKES

PILOTS' ASSOCIATION (DISTRICT 3)

and

LAKES PILOTS ASSOCIATION, INC. (DISTRICT 2)

and

ST. LAWRENCE SEAWAY PILOTS'

ASSOCIATION (DISTRICT 1)

and

GREAT LAKES PILOTAGE AUTHORITY

and

LAURENTIAN PILOTAGE AUTHORITY

                                                             Plaintiffs

                                   and

NAVITRANS SHIPPING AGENCIES INC.

                                                           Defendant

and

ATTIKA SHIPPING CORP.

and

GOLDEN SUN CRUISES

and

CAPTAIN VANGELIS PANAGIOTAKIS

and

THE VESSEL ARCADIA

and

THE OWNERS AND ALL OTHERS

INTERESTED IN THE VESSEL ARCADIA

                                                    Third Parties

JUDGMENT

The plaintiffs' action is allowed and the defendant is ordered to pay the various plaintiffs the following sums as detailed below in the statement of claim:

a) Western Great Lakes Pilots' Association:                                $ 25,141.16

            b) Lake Pilots' Association Inc.:                                                               $ 18,698.28

            c) Saint-Lawrence Seaway Pilots' Association:                                       $ 3,400.55

            d) Great Lakes Pilotage Authority:                                                            $ 26,270.60

            e) Laurentian Pilotage Authority:                                                               $ 6,675.82

The whole, with costs.

Furthermore, the defendant's oral motion to stay the judgment is dismissed.

Richard Morneau

Prothonotary

Certified true translation

Suzanne M. Gauthier, C. Tr., LL.L

FEDERAL COURT OF CANADA

TRIAL DIVISION

Date: 20020827

                                                            Docket: T-1404-01

ADMIRALTY ACTION IN REM AND IN PERSONAM

Between:

WESTERN GREAT LAKES

PILOTS' ASSOCIATION (DISTRICT 3) and

LAKES PILOTS ASSOCIATION, INC. (DISTRICT 2) and

ST. LAWRENCE SEAWAY PILOTS'

ASSOCIATION (DISTRICT 1) and

GREAT LAKES PILOTAGE AUTHORITY

and

LAURENTIAN PILOTAGE AUTHORITY

                                                                           Plaintiffs

and

NAVITRANS SHIPPING AGENCIES INC.

                                                                         Defendant

and

ATTIKA SHIPPING CORP. and

GOLDEN SUN CRUISES and

CAPTAIN VANGELIS PANAGIOTAKIS and

THE VESSEL ARCADIA and

THE OWNERS AND ALL OTHERS

INTERESTED IN THE VESSEL ARCADIA

                                                                     Third Parties

REASONS FOR JUDGMENT

FEDERAL COURT OF CANADA

TRIAL DIVISION

NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET NO:                         T-1404-01

STYLE:                                      ADMIRALTY ACTION IN REM AND IN PERSONAM

Between:

WESTERN GREAT LAKES

PILOTS' ASSOCIATION (DISTRICT 3) and

LAKES PILOTS ASSOCIATION, INC. (DISTRICT 2) and

ST. LAWRENCE SEAWAY PILOTS'

ASSOCIATION (DISTRICT 1) and

GREAT LAKES PILOTAGE AUTHORITY and

LAURENTIAN PILOTAGE AUTHORITY

                                                                                                       Plaintiffs

and

NAVITRANS SHIPPING AGENCIES INC.

                                                                                                     Defendant

and

ATTIKA SHIPPING CORP. and

GOLDEN SUN CRUISES and

CAPTAIN VANGELIS PANAGIOTAKIS and

THE VESSEL ARCADIA and

THE OWNERS AND ALL OTHERS

INTERESTED IN THE VESSEL ARCADIA

                                                                                                                                                     Third Parties

PLACE OF HEARING:         Montréal, Quebec

DATE OF HEARING:            July 15, 2002

REASONS FOR JUDGMENT OF RICHARD MORNEAU, PROTHONOTARY

DATED:                                   August 27, 2002

APPEARANCES:

Guy P. Major                                                                      for the plaintiffs

George J. Pollack                                                              for the defendant

Jean-Marie Fontaine

SOLICITORS OF RECORD:

Guy P. Major                                                                      for the plaintiffs

Montréal, Quebec

Gowling Lafleur Henderson                                               for the defendant

Montréal, Quebec