Date:
20080528
Docket:
T-1928-07
Citation:
2008 FC 677
[ENGLISH
TRANSLATION]
Montréal, Quebec, May 28, 2008
PRESENT:
Richard Morneau, Esq., Prothonotary
BETWEEN:
FEDERAL INSURANCE
COMPANY
and
THE ESTEY CORPORATION
(LUCKY
ESTEYS DISTRIBUTIONS GROUP)
Plaintiffs
and
THE SHIP “MAERSK PENANG”,
and
THE OWNERS AND ALL OTHERS
NTERESTED
IN THE SHIP “MAERSK PENANG”
and
THE SHIP “MAERSK PERTH”,
and
THE OWNERS AND ALL OTHERS
INTERESTED IN
THE SHIP “MAERSK PERTH”,
and
MAERSK LINE, and NIPPON YUSEN
KAISHA (NYK LINE),
and
DHL DANZAS AIR & OCEAN (DHL
GLOBAL FORWARDING),
and
DANMAR LINES LTD.,
and
RIKA
METALLWARENGESELLSCHAFT m.b.H. & Co. KG
Defendants
and
DHL DANZAS AIR & OCEAN (DHL
GLOBAL FORWARDING),
and
DANMAR LINES LTD.,
Third Party Claimants
and
THE SHIP “MAERSK PENANG”,
and
THE OWNERS AND ALL OTHERS
NTERESTED
IN THE SHIP “MAERSK PENANG”
and
THE SHIP “MAERSK PERTH”,
and
THE OWNERS AND ALL OTHERS
INTERESTED IN
THE SHIP “MAERSK PERTH”,
and
MAERSK LINE, and NIPPON YUSEN
KAISHA (NYK LINE),
and
Rika Metallwarengesellschaft m.b.H.
& Co. KG
Third
Party Defendants
REASONS
FOR ORDER AND ORDER
[1]
This
is a motion by the respondent Rika Metallwarengesellschaft m.b.H. & Co. KG
(hereinafter “Rika”) to strike the statement of claim against it by the
applicants, Federal Insurance Company (hereinafter “Federal Insurance insurers”)
and The Estey Corporation (Lucky Esteys Distributions Group) (hereinafter “The
Estey Corporation”), on the grounds stated in its motion record that this Court
does not have jurisdiction on this action because of the application of an
arbitration clause to that cause of action.
I.
Background
[2]
In
their statement of claim, Federal Insurance insurers and The Estey Corporation
seek more than $1 million for damage to a cargo of stoves manufactured and
shipped by Rika by sea from Austria to Montréal, which was found to be severely
damaged upon its final arrival in Oregon, United States.
[3]
The
action in this case was therefore instituted, inter alia, against Rika, who is
seen as the shipper. The other respondents are the entities involved in the
actual marine transportation of the stoves.
[4]
An
affidavit by Stacy Walters, dated May 2, 2008, was filed by the applicants
against the motion under consideration. Paragraph 13 of the affidavit
stated that the applicants held Rika at fault for improperly packaging the
stoves for shipping purposes. Subsequently, some of the respondents instituted
a third-party claim against Rika.
[5]
It
appears that the stoves were shipped in three shipments from September 2006 to
November 2006.
[6]
Later,
on March 10, 2006, Lucky Distributing, Inc. (hereinafter “Lucky”), a
subsidiary of the applicant The Estey Corporation, signed a “Distributorship
Agreement” (hereinafter “Distributorship Agreement”) with Rika.
[7]
The
following clauses of the Distributorship Agreement appear to me to reveal the
nature of this agreement:
I. Basis of the Agreement
(1) (…)
(2) Lucky is a distribution company with
registered offices in Oregon (U.S.A.) engaged in the distribution of stoves
throughout all of North America. Lucky is taking on the distribution of
wood, gas and pellet fireplace stoves with the registered trademark “Rika” in
North America (U.S.A. and Canada).
(3) The present agreement is entered into in
order to set forth the rights and obligations of both Contracting Parties
flowing from this business relationship.
II. Subject of the Agreement
(1) RIKA grants Lucky exclusive distribution
rights for the national territories of the U.S.A. and Canada for the
Contract Products defined under Item I. (1) of the present agreement. This
means that RIKA will supply these Contract Products in the U.S.A. and Canada
exclusively to Lucky.
[Emphasis added.]
[8]
Like
the applicants, I understand that the purpose of the Distributorship Agreement
is to define and allow the arbitration, if necessary, of the rights and
obligations of Rika and Lucky with respect to the following issues, all of
which is mentioned in part in paragraph 30 of the applicants’ written
submissions:
30.
Moreover,
the Distributorship Agreement only covers issues of distribution, protection of
trade names and trade marks, sale conditions, licences, certificates,
inventories, marketing, promotional materials, orders and purchases, prices and
payment terms, products liability claims, manufacturer’s liability (…)
II.
Analysis
[9]
Although
Rika’s motion to strike cites rule 208, it appears from the following
excerpt by authors Saunders et al., Federal Courts Practice 2008,
Carswell, at page 551, that this motion must be viewed implicitly as
relying primarily on paragraph 221(1)(a) of the Federal Courts
Rules (the Rules):
Rule
208 governs only the consequences of a preliminary objection. It does not
provide a substantive basis for objection, which must be found in other
provisions of the Federal Courts Act or Rules or the general law. The
appropriate rule under which to challenge the jurisdiction of the Court was a
source of debate under the former Rules: MIL Davie Inc. v. Hibernia Mgmt.
& Dev. Co. (1998), 226 N.R. 369, 85 C.P.R. (3d) 320 (Fed. C.A.). Under
the Federal Courts Rules the most likely basis for objections to
jurisdiction is rule 221(1)(a). (…)
[Emphasis added.]
[10]
Thus,
the following passage from Hodgson et al. v. Ermineskin Indian Band et al.
(2000), 180 F.T.R. 285, page 289 (affirmed on appeal: 267 N.R. 143; leave to
appeal to the Supreme Court of Canada refused: 276 N.R. 193) establishes that
an approach raising a question of jurisdiction or the absence of a cause of
action under that paragraph must be plain and obvious for the Court to allow
it. This passage also notes that with respect to jurisdiction, evidence is
admissible:
[9]
I agree that a motion to strike under rule 221(1)(a) [previously rule
419(1)(a)] on the ground that the Court lacks jurisdiction is different from
other motions to strike under that subrule. In the case of a motion to strike
because of lack of jurisdiction, an applicant may adduce evidence to support
the claimed lack of jurisdiction. In other cases, an applicant must accept
everything that is pleaded as being true (see MIL Davie Inc. v. Société d’exploitation et de
développement d’Hibernie ltée
(1998),
226 N.R. 369 (F.C.A.), discussed in Sgayias, Kinnear, Rennie, Saunders, Federal
Court Practice 2000, at pages 506-507).
[10]
[....] The “plain and obvious” test applies to the striking out of pleadings
for lack of jurisdiction in the same manner as it applies to the striking out
of any pleading on the ground that it evinces no reasonable cause of action.
The lack of jurisdiction must be “plain and obvious” to justify a striking out
of pleadings at this preliminary stage.
[11]
However,
for the two main reasons that follow, I cannot find that it is plain and
obvious that the arbitration clause in the Distributorship Agreement means that
this Court does not have jurisdiction over the action instituted by the
applicants against Rika.
[12]
First,
the Distributorship Agreement was entered into between Rika and Lucky. Although
for discussion purposes it can probably be argued that the Federal Insurance
insurers are subrogated in the rights of their insured, The Estey Corporation,
and thus their source of rights, derives from those owned by The Estey
Corporation, the fact remains that the applicant, The Estey Corporation, is not
a party to the agreement entered into by its subsidiary Lucky.
[13]
Although
paragraphs 7 and 8 of Sebastian Köck’s affidavit, dated March 11,
2008, and produced by Rika, mean that at Lucky’s request, the invoices for the
sale of the stoves at issue were addressed to Lucky Esteys Distributions Group,
and that these stoves were delivered to the same address and the invoices were
therefore paid, it has not been established that Rika demanded and obtained
that Lucky’s parent corporation, The Estey Corporation, be notified and bound
by the Distributorship Agreement and, thus, by the arbitration clause contained
in the Agreement. These circumstances do not establish that all parties must
understand that Lucky thereby exercised the apparent mandate to bind The Estey
Corporation.
[14]
Although
in paragraph 3 of its statement of claim, the applicant, The Estey
Corporation, considers itself to have always been the relevant owner of the
stoves at issue, this state of ownership does not necessarily mean that it is
covered by the Distributorship Agreement entered into by Lucky.
[15]
Finally,
the fact that the invoices are addressed to “Lucky Esteys Distributions Group”,
as mentioned above, and that this expression is repeated in parentheses in the
style of cause alongside the applicant, The Estey Corporation, these two
elements do not clarify the situation since the evidence on either side of the
motion records is silent as to the status and exact meaning of the term “Lucky
Esteys Distributions Group.”
[16]
Second,
and even if we were to consider that the applicant, The Estey Corporation, is
bound by the Distributorship Agreement, I cannot consider it to be plain and
obvious that the damage to the stoves due possibly to improper packaging is the
type of issue that constitutes a “dispute [ ] arising from the present
agreement or related to its infringement, termination or nullity” within the meaning
of Clause XII(1) of the Distributorship Agreement. This clause reads:
XII. General Contract Provisions
(1) All disputes arising from the present
agreement or related to its infringement, termination or nullity, shall be
finally decided in accordance with the Schieds- und Schlichtungsordnung
des internationalen Schiedsgerichtes der Wirtschaftskammer Osterreich in Wien [Rules of arbitration
and conciliation of the Vienna International Arbitral Centre of the Austrian
Federal Economie Chamber] (Vienna Rules) by three arbitrators appointed in
accordance with these rules.
(...)
[17]
Rather,
the nature and purpose of the Distributorship Agreement, as outlined in
paragraphs [7] and [8], supra, argue in favour of the opposite
view.
[18]
It
is actually only at the hearing of this motion that Rika sought to argue that
the applicants’ cause of action would be a question of civil law and therefore
cannot be seen as related to Canadian maritime law.
[19]
If
Rika wishes to raise this point, it will have to do so by filing a motion where
its motion record must contain all the evidence and the written argumentation
to enable this Court to render a valid decision.
[20]
For
these reasons, Rika’s motion to strike the statement of claim instituted by the
applicants will be dismissed, the whole with costs to the applicants.
ORDER
THIS
COURT’S JUDGMENT is that Rika Metallwarengesellschaft m.b.H.
& Co. KG’s motion to strike the statement of claim instituted by the
applicants be dismissed, the whole with costs to the applicants.
“Richard Morneau”
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