Date: 19991210
Docket: T-1571-99
BETWEEN:
ANRAJ FISH PRODUCTS INDUSTRIES LTD.
and
BENGAL SEAFOODS INC.
Plaintiffs
- and -
HYNDAI MERCHAND MARINE CO. LTD.
THE OWNERS AND ALL OTHERS INTERESTED IN THE
SHIP "HYUNDAI EMPEROR"
THE OWNERS AND ALL OTHERS INTERESTED IN THE
SHIP "KOTA CAHAYA"
THE OWNERS AND ALL OTHERS INTERESTED IN THE
SHIP "HYUNDAI GENERAL"
THE OWNERS AND ALL OTHERS INTERESTED IN THE
SHIP "MSC BOSTON"
THE OWNERS AND ALL OTHERS INTERESTED IN THE
SHIP "MSC NEW YORK"
Defendants
REASONS FOR ORDER
REED, J.:
[1] This is an appeal by the plaintiffs of a decision of a prothonotary staying the plaintiffs' claim against the defendants (referred to sometimes as "Hyundai"). The stay is to operate pending litigation of the matter in dispute in the Seoul Civil District Court, in Seoul, Korea.
[2] The plaintiffs' claim is for $150,000, as compensation for damages arising out of the defendant's carriage of a cargo of fish, from Bangladesh to New York, on the defendants' ships. It is alleged that the cargo was delivered in a contaminated condition (unfit for human consumption), due to thawing in transit. The thawing was in breach of specific instructions given to Hyundai by the plaintiffs.
[3] The fish were destined for customers of the plaintiff Bengal, the buyer of the cargo, in New York. The cargo was inspected on arrival in New York and the evidence relating to the state of the fish, and their unsuitability for human consumption, will come from New York witnesses. The accident that allegedly gave rise to the damage occurred in France.
[4] The plaintiff Bengal is an Ontario corporation. The other plaintiff is the Bangladesh shipper. The conclusion of the contract with Hyundai, namely the surrender of the bill of lading, took place at Hyundai's Toronto office. Bengal was the "notify party" on the bill of lading and surrendered the bill of lading to Hyundai's Toronto office in order to obtain delivery of the cargo in New York. Hyundai is a Korean company, but it has offices around the world, including three offices in Canada, one of which is in Toronto.
[5] It is clear that Korean law does not apply to the matter in dispute. Most likely, United States law applies. There is a jurisdiction clause in the bill of lading stating that "all action concerning custody or carriage under this Bill of Lading ... shall be brought before the Seoul Civil District Court in Korea".
[6] Hyundai relies on this clause to obtain a stay of the proceedings in this Court.
[7] Litigation in Korea would be expensive. It would require translation of the documents and evidence into Korean. It would require a number of sessions before the Court, with the attendant travel expenses for the witnesses from New York, as well as for those from France and Canada. The procedure in Korea is similar to the European civil law procedure and was recently described by prothonotary Hargrave in Iotchu Canada Ltd. v. The "Fu Ning Hai", (17 August 1999) T-1102-98.
[8] The affidavit of Yakub Shiekh, the owner of Bengal, states that Bengal is a small Canadian company trading in seafood exclusively from Bangladesh to North America, and that it does not have the resources to go to Korea to take legal action against Hyundai. He states that if Bengal is required to do so, it will be forced to drop its claim because it cannot afford the expense. The cargo was not insured and the costs would be borne by Bengal directly.
[9] It is argued that there is no factual connection between the matter in issue and Korea, and the only reason Hyundai is asserting the jurisdiction clause is to obtain a procedural advantage, that is, to make it prohibitively expensive for Bengal to pursue the claim.
[10] In staying the plaintiffs' claim, the prothonotary correctly cited The "Eleftheria", [1969] 1 Lloyd's L.R 337 as setting out the applicable legal principle: when a jurisdiction clause exists in a bill of lading the onus shifts to the plaintiff to establish a "strong cause" to militate against staying the defendant's claim that the matter in issue should be litigated in the forum identified in the bill of lading.
[11] The Eleftheria identifies a number of factors that are relevant to determining whether a "strong cause" exists: (1) in what country is the evidence on the issues of fact situated, or more readily available, and the effect of that on the relative expense of trial as between the two jurisdictions; (2) whether the law of the foreign court applies and if so whether it differs in material respects from, in this case, Canadian law; (3) with what country each party is connected and how closely; (4) whether the defendant genuinely desires trial in the foreign country or is only seeking procedural advantages; (5) whether the plaintiff would be prejudiced by having to sue in the foreign court.
[12] The prothonotary considered that: (1) the plaintiffs may be seriously inconvenienced from having to sue in Korea, particularly with regard to the costs to be incurred, but this was not sufficient in itself to justify not giving precedence to the jurisdiction clause; (2) the Korean system of justice would not deny the plaintiffs a fair trial; (3) Canada is not the country where the evidence on the issues of fact is situated; (4) it could not be said that the defendants were merely seeking procedural advantage - the existence of a jurisdiction clause is an advantage to both parties as it avoids, or at least reduces, multiplicity of proceedings.
[13] The applicable test when reviewing a decision of a prothonotary is set out in Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425 (F.C.A.): discretionary orders of prothonotaries ought not to be disturbed on appeal unless based upon a wrong principle, or upon a misapprehension of the facts, or they raise questions vital to the final issue of the case.
[14] It is argued that the prothonotary's finding that Bengal would be "seriously inconvenienced" by having to sue in Korea is a misapprehension of the facts. Mr. Shiekh swore in an affidavit, which was not contested, and on which he was not cross-examined, that the plaintiff Bengal would be prohibited by the cost from pursuing its claim in Korea. I accept that affidavit evidence does not have to be accepted as true, nevertheless, Mr. Shiekh's evidence was unchallenged and it contains what appear to be credible reasons in support of the assertions that are made. Also, the evidence that was placed before the prothonotary, demonstrating the comparability of costs of an action in Canada with those of an action in Korea, relates only to court costs, not the added costs arising from matters such as the travel expenses of witnesses and translation costs.
[15] In this case, the applicable law will not be that of Korea. It is likely that it will be United States law. The only connection that Hyundai has with Korea is that its head office is there. The defendants have no connection with that country. Most significantly, there is no connection between the facts of this case and Korea. Also, Hyundai does business throughout the world, having offices in many countries, including three in Canada.
[16] Some of the relevant facts occurred in Canada (the presentation of the bill of lading) and some of the evidence (that of Bengal) will be located in this jurisdiction. It has not been shown that witnesses from France could more easily and less expensively attend in Korea, rather than in Canada. I think there is no doubt that as between Canada and Korea, the former is the jurisdiction where the evidence is more readily available and less expensive.
[17] I have been persuaded that the prothonotary erred in focusing on Canada not being the country where the evidence on the issues of fact is situated. The Eleftheria decision states that consideration should also be given to where the evidence is more readily available and least expensive. There is no doubt that Toronto is a location where the evidence from New York will be more readily available, not only as a result of geographic proximity, but also as a result of common language. This geographic proximity also means that costs will be less than would be the case if the dispute was litigated in Korea.
[18] I have concluded that the prothonotary erred in that he failed to apply the full test set out in the Eleftheria. He focused on one part of the test, the limited factual connection to Canada, without also asking in which jurisdiction the evidence would be more readily available and pursuit of the litigation less expensive.
[19] For the reasons given, I have been persuaded that the appeal should be allowed and the decision under appeal set aside.
Judge
OTTAWA, ONTARIO
December 10, 1999
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