Supreme Court of Canada
The Queen v. Nisbet Shipping Co. Ltd., [1953] 1
S.C.R. 480
Date: 1953-04-28
Her Majesty The Queen (Defendant) Appellant;
and
Nisbet Shipping Company Limited (Suppliant) Respondent.
1953: February
2, 3; 1953: April 28.
Present: Rinfret C.J. and Kerwin, Rand, Kellock, Estey, Locke
and Cartwright JJ.
ON APPEAL FROM THE EXCHEQUER COURT OF CANADA
Crown—Collision at sea between foreign merchant ship and
Canadian warship—Negligence in navigation—Application of s. 19(c) of the
Exchequer Court Act, R.S.C. 1927, c. 34—Governing law—Whether effective in
circumstances—Whether Crown entitled to limitation of damages under s. 649 of
the Canada Shipping Act, 1934.
Action for damages resulting from a collision in the Irish Sea
in February, 1945, between a foreign merchant ship and a Canadian warship on
her way to take over escort duty for a convoy. The vessels were on crossing
courses and the merchant ship was struck on her port bow. For the purpose of
this case counsel for the appellant admitted that s. 19(c) of the Exchequer
Court Act was not restricted to claims based on negligence occurring within
Canada.
Held: That the warship was solely to blame for the
collision and for the loss of the merchant ship.
Held: That at the time of the collision the warship was
not engaged in warlike operations in a theatre of war so as to take it out of
the operation of ss. 19(c) and 50A of the Exchequer Court Act.
Held (Locke J. dissenting): That notwithstanding s. 712
of the Canada Shipping Act, 1934, the Crown is entitled to limit its liability
under s. 649 of that Act if it is able to show that the damage or loss occurred
without its actual fault or privity.
Per Rinfret C.J. and Band J.: The sources of law
imposing regulations upon a merchant vessel and a naval ship are different; but
the rules, originating in the uniform practices of navigators for centuries,
have since their enactment been universally followed. They have become
[Page 481]
the de facto international or (maritime
rules on the high seas, and the duties raised on the two vessels were therefore
rules of law proceeding from a recognized paramount source.
Per Kerwin and Estey JJ.: The International Rules of
the Road, as established by Canadian Order in Council P.C. 259, dated February
9, 1897, and those contained in the King's Regulations and Admiralty
Instructions (as amended to November 1943) and incorporated in the Naval
Service Act, R.S.C. 1927, c. 139, were the governing rules to be applied under
ss. 19(c) and 50A of the Exchequer Court Act in the present case.
Per Locke J.: The International Rules of the Road, not
being by their terms made applicable to the Crown, did not apply. The fact,
however that that portion of the rules governing the conduct of vessels
proceeding on crossing courses had been almost universally adopted by ships of
seafaring nations and that an identical rule forms part of the King's Regulations
and Admiralty Instructions affords evidence from which the inference may
properly be drawn that failing to comply with it is negligent conduct. In
addition there was evidence justifying the finding that there had been no
proper lookout kept on the naval vessel.
Per Locke J. (dissenting in part) : The Crown is not
entitled to limit the amount of its liability under s. 649 of the Canada
Shipping Act of 1934, since such limitation of the liability of His Majesty qua
owner is excluded by s. 712 of that Act. Furthermore, the principle that the
Crown may invoke the benefit of any statute, though not named in it, has no
application where as here the matter has been dealt with by Parliament.
APPEAL from the judgment of the Exchequer Court of
Canada, Thorson P. ,
holding, in an action brought under s. 19(c) of the Exchequer Court
Act, that the respondent was entitled to recover the full amount of its
damages from the appellant for the total loss of its vessel, the S.S. Blairnevis,
when she collided on February 13, 1945, with the Canadian frigate, H.M.C.S.
Orkney, in the Irish Sea.
F. P. Varcoe Q.C. and A. J. MacLeod for
the appellant.
C. R. McKenzie Q.C. and
L. A. Sherwood for the respondent.
The judgment of the Chief Justice and Rand J. was delivered
by:—
Rand J. :—This
litigation arises out of a collision between H.M.C.S. Orkney and the
ship Blairnevis on the morning of February 13, 1945 in the Irish Sea, a
few miles north of The Skerries. Besides that of negligence in the navigation
of the Orkney, questions were raised at trial of the applica-
[Page 482]
tion of s. 19(c)
of the Exchequer Court Act, which gives a right of action against the
Crown for negligence, to acts causing damage on the high seas; of the governing
law and whether it could be said to be effective in the special circumstances
of the collision; and whether the Crown was entitled to invoke s. 649 of the Canada
Shipping Act in limitation of damages.
On the argument before this Court, Mr. Varcoe stated that,
for the purposes of the appeal, he would not contest the application of s. 19(c),
and we are not then concerned with that issue.
On the second point, the controlling fact is that the Crown,
not liable for the tortious acts of its servant, has by statute accepted
liability. The legislation by which that has been done must be taken as
impliedly envisaging the law according to which the liability of both the
servant and master, in any case, arises. The courts in applying s. 19(c)
have uniformly held that within Canada that law is the law of the province in
which the act takes place, and as of the time of the enactment of the statute;
but as to acts on the high seas, the situation is somewhat complicated.
In 1943 by c. 25 of the Dominion Statutes, enacting s. 50A
of the Exchequer Court Act, the members of the naval, military or air
services of His Majesty were declared as from June 24, 1938 to be deemed
servants of the Crown for the purposes of s. 19(c). To what law, then,
applicable to a collision on the high seas between a Canadian naval vessel and
a merchant ship registered in Scotland must we relate the accepted liability,
the law creating liability of the persons actually to blame for it and vicariously
of the Crown, as an employer, for whom they were acting. If Parliament itself
has legislated in relation to either or both of these matters, that would seem
to me necessarily to be the law to which that liability must be related.
Under the Imperial Shipping Act of 1894, regulations
governing navigation were in 1910 promulgated by Order in Council. The Act by
s. 424 provided that with the consent of foreign countries the regulations
could, by Order in Council, be extended to apply to their ships when either
within or beyond British jurisdiction as if they were British ships; and by the
same order they were so applied, with unimportant exceptions, to all maritime
European countries,
[Page 483]
to most of the countries of North and South America,
including the United States, and to a number in Asia.
These regulations affected only merchant vessels but in the
same year the Admiralty issued Instructions identical with them to govern the
ships of the navy. By the Naval Service Act, (1910) c. 139, R.S.C. 1927,
these Instructions, so far as applicable, were adopted for the Canadian naval
service, and they were in effect at the time of the collision. It was found by
the President ,
and not challenged before us, that the particular rules governing the situation
here were the same as those prescribed by the Imperial orders.
The sources of law imposing the regulation on the merchant
vessel and on the naval ship here are seen to be different: but the rules,
first codified in 1863 under the Merchants' Shipping Amendment Act of
that year and assented to by the maritime nations, originating in the uniform
practices of navigators for centuries, have since their enactment been
universally followed. They have become the de facto international
or maritime rules on the high seas, and it would be to disregard realities to
deal with the duties raised on the two vessels otherwise than as rules of law
proceeding from a recognized paramount source: The Scotia .
Their adoption by the statute for the governance of Canadian
naval vessels is in fact the recognition of their international character. It
was the statutory enactment by Congress in 1864 of identical rules, that was
treated by the British government as the "consent" of the United
States under the Act of 1863. The principle that the maritime or
international law applicable in any country is that interpretation of it given
by that country can here be accorded its full effect, and its result is simply
the submission of the naval forces to that broader but identical law. The
observance of the rules by Canadian vessels, not only towards other ships of
Canadian registry but towards all vessels bound by them, as the law of the sea,
is inherent in the language of the statute. Within the western seas, certainly,
they create the duties on the part of those in
[Page 484]
charge of Canadian naval ships out
of which their liability for negligence must arise: Vaughan-Williams L.J. in H.M.S.
Sans Pareil .
The scope of that liability at common and maritime law has
been modified by statute. The Canada Shipping Act in ss. 640 et seq., deals with negligence on the part of two or more
vessels in collision and attributes responsibility according to the degree of
fault. These provisions constitute likewise part of the general law of
negligence applicable to the liability of the servant, on which, in turn, the
Crown's liability is founded.
The same principle attracts finally those provisions of
Dominion law which deal directly with the imputed responsibility of owners. By
ss. 649 to 655 inclusive, provision is made for the limitation of the damages
issuing from that liability. It was argued that, because of s. 712, these
sections had no application to the Crown. By force of the statute alone, that
is so, but being part of the general law from which the liability of a master
arises, they are within the contemplation of s. 19(c). What is sought is
the law governing the collision: Parliament has enacted its own laws of
negligence; and the liability, in all its aspects, of the owner in the case of
private persons, for the negligence of servants, so arising, is that adopted by
19(c).
The President of the Exchequer Court , after a careful examination of
the facts, found the Orkney solely to blame for the collision and
rejected the contention that the Blairnevis had aggravated the damages
by unreasonable delay in seeking assistance. On the argument I was satisfied
that the President's findings had not been successfully challenged, and further
consideration has confirmed that view.
The substantial point against the applicability of the law
was as follows. The Orkney at the time was, under Admiralty orders,
moving southeasterly to take up escort duty into Liverpool of a portion of a
convoy that was to divide near The Skerries, off Anglesey, the other portion
proceeding north to Glasgow; the Blairnevis had in the meantime detached
herself from the convoy and was proceeding northerly to Workington; in
February, 1945, the allies were still at war with Germany and its associates;
we must assume, as the facts indicate, that the hazards
[Page 485]
from submarine and air bombing were at all times, in the
Irish Sea, to be anticipated; and that in this situation the civil law of
negligence is not to be taken as operative.
Three authorities bear upon this proposition. There is,
first, the case of H.M.S. Hydra
in which a steamship was damaged by a collision with a destroyer. The action
was heard in camera and we do not know all the facts ; but as the collision
took place in the English Channel in February, 1917, the destroyer was
undoubtedly engaged in at least equal warlike activities and in an area that
was surcharged with war dangers. In the judgment as reported no reference is
made to the supersession of the law of negligence, the controversy was decided
solely upon the ordinary rules of seamanship, and the destroyer held alone to
blame. In H.M.S. Drake ,
a naval vessel having been torpedoed and heading southeasterly from Rathlin
Island in a damaged condition collided with a steamship. This took place in
October, 1917 in Rathlin Sound, and again it is necessary to assume that the
same warlike operations and war perils were present as in the previous case;
but the judgments of Roche J. and of the Court of Appeal deal with the case
only in relation to the rules of good seamanship. The action was, in fact,
dismissed but there is no hint of any suspension of the ordinary law.
The last examination of the question arose in the High Court
of Australia. In Shaw Savill & Albion Company Limited v. The Commonwealth
, the action was brought against
the Crown for negligence by a naval vessel. A special defence was pleaded to
the effect that the naval vessel was proceeding on its course pursuant to
Admiralty instructions during a state of war, and that at the time of the
collision it was engaged in active naval operations against the enemy. In
reply, the plaintiff both denied the facts and pleaded a demurrer; and it was
on the latter that the case went to appeal. The court, consisting of Rich,
A.C.J., Starke J., Dixon J. (now C.J.), McTiernan J. and Williams J. agreed in
the general proposition that in the circumstances of actual hostile engagement
the civil laws are in effect supplanted and no act of persons participating in
it can give rise to liability in negligence. On the other
[Page 486]
hand it was agreed that not all warlike activity can be said
to be active operations against the enemy; that, as the two authorities already
mentioned show, there may be activity which, though warlike, is nevertheless
accompanied by the duty of care towards civilian interests, to be judged, as in
all other cases, in the light of the existing conditions. No theory by which
the point at which the liability ceases is attempted. The substance of the
opinions is stated in these words of Dixon J.:—
A real distinction does exist between actual operations
against the enemy and other activities of the combatant services in time of
war. For instance, a warship proceeding to her anchorage or manoeuvring among
other ships in a harbour, or acting as a patrol or even as a convoy must be
navigated with due regard to the safety of other shipping and no reason is
apparent for treating her officers as under no civil duty of care, remembering
always that the standard of care is that which is reasonable in the
circumstances … It may not be easy under conditions of modern warfare to say in
a given case upon which side of the line it falls.
The court agreed that the question of the existence of the
state of things excluding liability was one for the civil tribunals.
The facts here do not, in any conception of the principle,
bring the case within those overriding operations in which by their nature the
civil law is superseded, conditions in which the responsibility rather is cast
upon the civilian to extricate himself as best he can both for his own interest
and to avoid interference with them. Although the Orkney in her passage
to join the convoy was under a primary duty of alertness to enemy presence of
any kind, yet the movement was not what, by any reasonable interpretation,
could be called actual operations against the enemy. It was a period not of
encounter but anterior to possible encounter, a period of apprehension, of lookout,
of watchfulness with a view to detection ; but, at the same time, a period in
which duties to civilian interests were, in fact, intended to be continued. In
such circumstances, unless the exercise of care is, at the moment, incompatible
with that paramount vigilance, I can see no ground for excusing the failure to
exercise it. It has not been suggested that any feature or requirement of that
duty operated to the slightest degree in the faulty navigation: it was, by the
facts themselves, demonstrated that the observance of the rules would have been
as indifferent to the fulfilment of the naval duty as was their disregard. In
that character of action, there is
[Page 487]
no public interest to exempt the individual from the
consequences of his delinquency; and in view of the role that goods of every
conceivable kind now play in war, practical considerations would be clearly
against it. That was the view of the President in the court below, and I think
he was right.
There remains the claim for limitation of damages, on which
the President held against the Crown. The latter, by its defence, sought the
benefit of s. 649 of the Canada Shipping Act:—
649. (1) The owners of a ship, whether registered in Canada
or not, shall not in cases where all or any of the following events occur
without their actual fault or privity
* * *
(iii) Where any loss or damage is, by reason of the improper
navigation of the ship, caused to any other vessel …
be liable beyond an amount based on the vessel's
tonnage. Mr. Mackenzie challenges the right of the Crown both to avail itself
of this provision and to raise the question by the plea. He argues that the
matter is controlled by s. 650 which, "where any liability is alleged to
have been incurred by the owner of a British or foreign ship" permits the
owner to apply to a judge of the Exchequer Court to determine the limited
amount for which he is liable and to distribute that amount ratably among
whoever may be claimants. The section contemplates two or more claims made or
apprehended: other proceedings in the same or other courts may be stayed;
provision is made for bringing in persons interested, and for the exclusion of
those who do not claim within a specified time.
It seems to be settled in England that where there is only
one claimant, the matter can be raised by a defence and determined in the
action: Wahlberg v. Young , where the claim was for damage
to a tow by stranding; Beauchamp v. Turrell , a claim by a widow of a member of a
crew who had, through a defective rope, fallen into the sea and drowned. The
same procedure was followed in Waldie v. Fullum . But it is obvious that if other
claimants are apprehended, the issue cannot be conclusively adjudicated in an
action limited to one alone; in that case a counterclaim directed to the
plaintiff and all other claimants can be resorted to: The Clutha . The purpose of
[Page 488]
s. 650 is to determine, once for
all, whether limitation is in order or not and to conclude the question against
all interests. Since the vessel and her cargo were, here, a total loss, the
question of other claimants should be cleared up, and it would seem to me to be
improper to enter upon that question as the action now stands in this Court.
Mr. Varcoe argued his right to limitation on another ground.
It is a recognized rule that the Sovereign "may avail himself of the provisions
of any Act of Parliament": Chitty's Prerogatives, p. 382. Where liability,
then, on the same footing as that of a subject, is established, giving a right
to damages, I can think of no more appropriate enactment to which that basic
rule of the prerogative could be applied than to a statutory limitation of those
damages.
If it should appeal that there are no other or apprehended
claims, then the preliminary condition of actual fault or privity of the Crown
will be determined by a judge of the court and the tonnage at the same time
ascertained. It may be that, prima facie at least, the circumstances of a
collision themselves exclude the existence of fault or privity, and I do not at
the moment see how, on the facts shown here, there can be any doubt upon it. If
other claims appear, the matter will be dealt with according to the procedure
of the Court.
I would, therefore, dismiss the appeal subject to a
variation in the judgment at trial by adding thereto a declaration that the
Crown is entitled to avail itself, under the conditions prescribed, of s. 649
of the Canada Shipping Act, 1934, limiting liability. The Crown will be
at liberty to take such steps toward the determination of the question of
limitation as it may be advised. There will be no costs in this Court.
The judgment of Kerwin and Estey, JJ. was delivered by:—
Kerwin J.:—On
February 13, 1945, a collision occurred on the high seas between His Majesty's
Canadian frigate Orkney and the respondent's ship Blairnevis. In
its petition of right filed in the Exchequer Court of Canada, the respondent
claimed from His Majesty the King damages suffered by it as a result of the
loss of its ship. The President ,
found that negligence on the part of the
[Page 489]
Commander and officers of the frigate
alone had caused such damages, declared that His Majesty should pay the amount
thereof, and directed a reference to the Registrar to determine the proper sum.
Her Majesty the Queen now appeals.
The claim of the respondent is based upon s. 19(c) of
the Exchequer Court Act (R.S.C. 1927, c. 34) which, as amended in 1938,
reads as follows:—
19. The Exchequer Court shall also have exclusive original
jurisdiction to hear and determine the following matters:
(c) Every claim against the Crown arising out of any
death or injury to the person or to property resulting from the negligence of
any officer or servant of the Crown while acting within the scope of his duties
or employment.
With this must be read s. 50A of the Exchequer
Court Act as enacted in 1943:—
50A. For the purpose of determining liability in any action
or other proceeding by or against His Majesty, a person who was at any time
since the twenty-fourth day of June, one thousand nine hundred and
thirty-eight, a member of the naval, military or air forces of His Majesty in
right of Canada shall be deemed to have been at such time a servant of the
Crown.
In the Court below it was argued that s. 19(c) must
be restricted to claims based on negligence occurring within Canada. Such a
contention was abandoned before us but in view of at least one other question
that requires consideration, I deem it advisable to state that I concur in the
opinion of the President. To the reasons given by him, I would add a reference
to the wording in s. 50A : "a member of the naval,
military or air forces of His Majesty in right of Canada", which
contemplates that such a servant of the Crown may perform a negligent act
within the scope of his duties or employment outside the limits of Canada.
Furthermore, in The Diana , the
Court was concerned with the Admiralty Court Act, 1861 (24 Vict. c. 10)
"An Act to extend the jurisdiction and improve the practice of the High
Court of Admiralty", s. 7 of which enacted:—
The High Court of Admiralty shall have jurisdiction over any
claim for damage done by any ship.
This was held to confer jurisdiction over a cause instituted
as a result of a collision between foreign vessels in foreign waters. Similarly
upon a consideration of s. 19(c) the conclusion is reached that the
Exchequer Court has jurisdiction in the present proceedings.
[Page 490]
It has always been held that s. 19(c) imposed
liability upon the Crown as well as conferred jurisdiction upon the Exchequer
Court. This, it should be noted, is the Exchequer Court proper and not on its
Admiralty side. Where the events complained of arise in a province, the law
that applies is the provincial law as between subject and subject as of the
date of the enactment of the relevant provisions imposing such liability,
unless, of course, Parliament has chosen to establish the standard of care of
its own officers or servants. The question here is as to the law to be applied
where a collision occurred on the high seas between one of His Majesty's
Canadian warships and a private merchant ship registered in Scotland.
The words that formerly appeared at the end of s. 19(c)
"upon any public work" were omitted in 1938 and it was by s. 1 of c.
25 of the Statutes of 1943-44 that s. 50A was enacted.
From that time until the date of the collision, February 13, 1945, the
applicable law remained the same. The Canadian Order in Council establishing
collision regulations under the authority of the Canada Shipping Act, 1934,
c. 44, was not promulgated until April 8, 1948, so that, if any regulations
relating to collisions at sea be relevant, the proper ones would be those
established by P.C. 259 of February 9, 1897 (Canada). The Naval Service Act,
1944, c. 23, although assented to July 24 of that year was not brought into
force by proclamation until October 15, 1945. The previous Naval Service Act
(R.S.C. 1927, c. 139) therefore applied, and subsection 1 of s. 45 thereof
provided:—
45. The Naval Discipline Act, 1866, and the Acts in
amendment thereof passed by the Parliament of the United Kingdom for the time
being in force, and the King's Regulations and Admiralty Instructions, in so
far as the said Acts, regulations and instructions are applicable, and except
in so far as they may be inconsistent with this Act or with any regulations
made under this Act, shall apply to the Naval Service and shall have the same
force in law as if they formed part of this Act.
The King's Regulations and Admiralty Instructions (as
amended to November, 1943) referred to in this subsection contain, in chapter
16, regulations for preventing collisions at sea. Paragraph 660 states:—
The following regulations are to be observed in
order to prevent collisions at sea and all executive officers are to
make themselves thoroughly acquainted therewith.
[Page 491]
Then follow regulations identical for present purposes with
the Collision Regulations under the Imperial Merchant Shipping Act of 1894 and
with those established by Canada, P.C. 259 of February 9, 1897, including
article 19:—
When two steam vessels are crossing so as to involve risk of
collision, the vessel which has the other on her own starboard side shall keep
out of the way of the other.
Therefore the rule to be followed by His Majesty's Canadian
naval ships on the high seas where the proper circumstances existed were set by
the authority of the same Parliament which by s. 19(c) of the Exchequer
Court Act imposed liability on the Crown.
The Orkney had the Blairnevis on her own
starboard side. The President found that the Commander and officers of the frigate
failed to obey the injunction contained in article 19 and failed to observe the
standard of care demanded under the circumstances. I am satisfied on the
evidence that this was the correct conclusion and Mr. Varcoe has not persuaded
me that the President was in error in finding that there was no negligence on
the part of those on board the Blairnevis. However, it was contended
that even if the officers of the Orkney were negligent and caused
damages, those damages did not include the loss of the Blairnevis because,
it was said, that loss resulted from the negligence of the latter's Master and
officers in not applying for a tug to take their ship to Liverpool sooner than
they did. When such a contention is raised, all the circumstances must be investigated.
They are not at all similar to those that existed in The King v. Hochelega
Shipping and Towing Co. Ltd. , and
the evidence set forth in the reasons for judgment in this case in the Court
below satisfied me that there is no basis for the contention now under
consideration.
It was next argued that at the time of collision the Orkney
was engaged in warlike operations in a theatre of war and that, therefore,
ss. 19(c) and 50A of the Exchequer Court Act did not apply.
Reference has been made to several cases but the only one I need mention is Shaw,
Seville and Albion Co. Limited v. The Commonwealth . That was a decision of the High
Court of Australia on a demurrer where, of course, the allegations in the
statement
[Page 492]
of claim were taken as being true. The judgment of Sir Owen
Dixon is a carefully reasoned one and I think that he put the position
correctly when he stated that the principle that civil liability did not arise
for supposedly negligent acts or omissions in the course of an actual
engagement with the enemy extended to all active operations against the enemy
but that a real distinction existed between the latter and other activities of
the combatant services in times of war. In each instance the precise
circumstances must be considered and in the present case, in my view, the Orkney
was not engaged in a warlike operation against an enemy but in something
anterior and preparatory, and the point must therefore be decided against the
appellant.
The final point raised by the appellant is that in any event
it is entitled to a limitation of liability under s. 649 of the Canada
Shipping Act. As the owner of the Orkney, the Crown would ordinarily
be entitled to take advantage of this provision but it is said that s. 712 of
the Act prevents this result. That section provides:—
This Act shall not except where specially provided apply to
ships belonging to His Majesty.
In my opinion this section has no reference to a claim for
limitation for liability under s. 649, which can only be put forward by an
owner. The President considered that in The King v. St. John Tug Boat
Co. Ltd. , I
had expressed a larger view of the operation of s. 712 but, there, I was
considering s. 640 of the Act which deals with the fault of two or more
vessels causing damage or loss to one or more of them, their cargoes or
freight, or any property on board.
The question therefore remains, what order should now be
made? The respondent is justified in its contention that the onus is on the
appellant to show that the damage or loss happened without its fault or privity
: Patterson Steamship Ltd. v. Canadian Co-Operative Wheat Producers
Ltd. .
While in the statement of defence the appellant asked:—
(b) For a declaration that if His Majesty the King is
liable in the-premises he had the right to limit his liability to the sum of $38.92
for each ton of H.M.C.S. Orkney's tonnage, the said tonnage to be
determined in conformity with Sections 649 and 654
[Page 493]
of the Canada Shipping Act; that he is liable only for the
damage resulting from the collision and not for the subsequent loss of the S.S.
Blairnevis, and that he is not liable for interest;
and while s. 650 of the Canada Shipping Act provides
that "The President or the Puisne Judge of the Exchequer Court may"
determine the amount of the owners liability, the usual practice is that an action
for limitation of liability would be brought against the present respondent and
every person or persons whomsoever claiming or being entitled to claim in
respect of the damage or loss alleged to have been occasioned in any way by the
collision between the Orkney and Blairnevis on or about February
13, 1945. It is quite probable that little difficulty will be encountered in
ascertaining the tonnage of the Orkney but all interested parties should
have an opportunity of disputing the claim of the Crown that it is able to
bring itself within s. 649 by showing that the damage or loss happened without
its actual fault or privity. The judgment appealed from with its order that the
respondent recover its costs of the action might well stand. The appeal to this
Court should be dismissed subject to an addition to the trial judgment of a
declaration that the Crown is entitled to limit its liability in accordance
with s. 649 of the Canada Shipping Act 24-25 Geo. V. 1934. c. 44, if it
is able to show that the damage or loss occurred without its actual fault or
privity. The respondent has won in this Court on all issues except that of
limitation of liability. In view of the expense entailed in connection with the
preparation and presentation of this appeal on the other points, there should
be no costs in this Court.
The judgment of Kellock and Cartwright, JJ. was delivered
by:
Kellock J.:—I
agree with my brothers Kerwin and Rand that the appeal fails on all grounds
except as to the right of the appellant to limit liability under s. 649 of the Canada
Shipping Act. With respect to the excepted point, I desire to express my
own view.
In The City of Quebec v. The Queen , Strong, C.J., with whom Fournier J.
concurred, in considering the provisions of s. 16(d) of the Exchequer
Court Act (now s. 19(d)), said at p. 429:
Proceeding upon this principle, we should, I think, be
required to say that it was not intended merely to give a new remedy in respect
of some
[Page 494]
pre-existing liability of the Crown, but that it was
intended to impose a liability and confer a jurisdiction by which a remedy for
such new liability might be administered in every case in which a claim was
made against the Crown which, according to the existing general law, applicable
as between subject and subject, would be cognizable by the courts.
Gwynne J., with whom King J., concurred, expressed a similar
view at p. 449 with respect to paragraph (c) of s. 16 (now s. 19(c)):
The object, intent and effect of the above enactment was, as
it appears to me, to confer upon the Exchequer Court, in all cases of claim
against the government, either for the death of any person, or for injury to
the person or property of any person committed to their charge upon any railway
or other public work of the Dominion under the management and control of the
government, arising from the negligence of the servants of the government,
acting within the scope of their duties or employment upon such public work,
the like jurisdiction as in like cases is exercised by the ordinary courts over
public companies and individuals.
In Filion v. The Queen , Burbidge J., said at p. 144:
It was the intention of Parliament that the Crown should
within the limitations prescribed in section 16 of the Exchequer Court Act be
liable in any case in which a subject would in like circumstances be
liable.
On appeal ,
Strong C.J., expressly agreed with the reasons of the trial judge, considering
that the question of jurisdiction was precluded by the decision in the Quebec
case. Gwynne J. is, I think, to be taken as affirming the view he had already
expressed in the earlier case, while Sedgewick J. expressly concurred in that
view, considering himself "bound by the judgment" in the Quebec
appeal. King J. also concurred. That this is the settled jurisprudence of this
court, which was never departed from, is, I think, fully established.
In Gauthier v. The King , the law was again affirmed in the
same sense. The matter there in issue was governed by s. 19 of the 1906 statute
(R.S.C., c. 140) to which s. 18 of the present statute corresponds. S. 20 of
the 1906 statute corresponds to s. 19 of the present statute.
In Gauthier's case Fitzpatrick C.J., contrasted the
situation with respect to the applicable law under the then ss. 19 and 20. At
p. 182 he said:
I agree also with Mr. Justice Anglin that section 19 of the
"Exchequer Court Act" merely recognizes pre-existing liabilities; and
cases falling within it must be decided not according to the law applicable to
the subject matter as between subject and subject, but to the general law of
province in which the cause of action arises applicable to the Crown in right
of the Dominion.
[Page 495]
Anglin J., with whom Davies J. also agreed, said at p. 190:
There are, however, two fallacies in the appellant's
contention—one the assumption that liability ex contractu of the Crown
in right of the Dominion depends upon the "Exchequer Court Act"; the
other, that a series of decisions, culminating in The King v. Desrosiers, (41 Can. S.C.R. 71) holding that a liability of
the Crown imposed by clauses of section 20 of that Act is the same as would be
that of a subject under like circumstances in the province in which the cause
of action arises, applies to cases falling within section 19. This latter
provision (originally found in section 58 of 38 Vict. ch. 11) does not create
or impose new liabilities. Recognizing liabilities (in posse) of the
Crown already existing, it confers exclusive jurisdiction in respect of them
upon the Exchequer Court and regulates the remedy and relief to be
administered. In regard to the matters dealt with by this section there is no
ground for holding that the Crown thereby renounced whatever prerogative
privileges it had theretofore enjoyed and submitted its rights and obligations
to be determined and disposed of by the Court according to the law applicable
in like cases between subject and subject. The reasons for which it was so held
in regard to liabilities imposed by section 20, are stated by Strong C.J. in
the earlier part of his dissenting judgment in The City of Quebec v. The
Queen (24 Can. S.C.R. 420). See, too, The Queen v. Filion (24
Can. S.C.R. 482), The King v. Armstrong (40 Can. S.C.R. 229) and The
King v. Desrosiers (41 Can. S.C.R. 71). No
other law than that applicable between subject and subject was indicated in the
"Exchequer Court Act" as that by which these newly created
liabilities should be determined. Placing upon that section a "wide and
liberal"—a "beneficial construction"—"the construction
calculated to advance the rights of the subject by giving him an extended
remedy,"—it was the view of the former learned Chief Justice, and is now
the established jurisprudence of this Court, that it was thereby
not intended merely to give a new
remedy in respect of some preexisting liability of the Crown but that it was
intended to impose a liability and confer a jurisdiction by which the remedy
for such new liability might be administered in every case in which a claim was
made against the Crown, which, according to the existing general law,
applicable as between subject and subject, would be cognizable by the Courts.
But, since section 19 merely recognizes pre-existing
liabilities, while responsibility in cases falling within it must, unless
otherwise provided by contract or statute, binding the Crown in right of the
Dominion, be determined according to the law of the province in which the cause
of action arises, it is not that law as applicable between subject and subject,
but the general law relating to the subject-matter applicable to the Crown in
right of the Dominion which governs. That law in the Province of Ontario is the
English common law except in so far as it has been modified by statute binding
the Crown in right of the Dominion.
In Armstrong v. The King , the statement of the law in the same
sense was expressly approved on appeal to this court , by at least three of the members of
the Court,
[Page 496]
Davies, Maclennan and Duff JJ., while
again in The King v. Desrosiers ,
Fitzpatrick J., said at p. 76:
All these questions were decided by this court against the
appellant in the Armstrong Case (40 Can. S.C.R. 229) on the ground that the law
had been settled in a long series of cases; and, on the application for leave
to appeal to the Privy Council from that judgment, Lord MacNaghton said as a
ground for refusing the application, referring to the decisions of this court:
This seems to have been the law for eighteen years,
(See report of argument in Privy Council, p. 17), (Cf. per Girouard J. in Abbott v. City of St.
John (40 Can. S.C.R. 597) at p. 602).
In these circumstances, we are of opinion that the judgment
in the Armstrong Case is conclusively binding on this court.
Accordingly, in determining the liability of the Crown in
any case under s. 19(c) of the Exchequer Court Act, if the
petitioner can make out a cause of action on the basis of the law applicable as
between subjects, he thereby makes out a cause of action against the Crown and
is entitled to the same relief as he would be entitled to in the former case.
The question arises, therefore, as to the law applicable as
between subject and subject in circumstances such as are here present. In my
view the legislative subject matter with respect to navigation and shipping
being exclusively a matter for the federal Parliament, the law applicable in so
far as the question of negligence or no negligence on the part of those in
charge of the navigation of the Orkney at the material time is
concerned, is to be found in the King's Regulations and Admiralty Instructions
made applicable by s. 45 of the Naval Service Act, R.S.C., 1927, c. 139.
Negligence being thus established, it is then necessary, in order to determine
the extent of the liability of a subject, to resort to the provisions of the Canada
Shipping Act, which is the law applicable, and s. 649 provides the answer.
It is contended on the basis of the presence of s. 712 in
the Canada Shipping Act that resort cannot be had to that Act in
a case such as the present. In my view this is erroneous. The resort to that
statute is not at all for the purpose of determining what that statute has to
say with respect to the Crown, but as to what it has to say with respect to the
liability of a subject. In that inquiry it is
[Page 497]
obvious that s. 712 is quite
irrelevant. When this inquiry is thus answered, it is s. 19(c) of the Exchequer
Court Act which applies that answer to the Crown.
I would therefore vary the judgment below to the extent
indicated and would dismiss the appeal otherwise. In my opinion there should be
no costs in this court.
Locke, J.
(dissenting in part) :—This action was commenced by a Petition of Right by the
respondent company, incorporated in Great Britain, as the owner of the
steamship Blairnevis, against the Crown as owner of H.M.C.S. Orkney, in
respect of damages caused by a collision between these two vessels which
occurred in the Irish Sea on February 13, 1945. The jurisdiction invoked is
that vested in the Court by s. 18 of the Exchequer Court Act and the
cause of action is based upon s. 19(c) of that Act, in respect of
the alleged negligence of certain naval officers, while acting within the scope
of their duties, who are to be deemed servants of the Crown by virtue of s. 50A.
There are three questions to be determined. The first is as
to whether there was negligence on the part of the naval officers which caused
the accident: the second, was there contributory negligence on the part of
those in charge of the Blairnevis: and the third, whether, if there be
liability upon the Crown, is it entitled to limit the amount of that liability
under the provisions of s. 649(1) of the Canada Shipping Act of 1934.
I agree with the contention of counsel for the Crown that
the International Rules of the Road, not being by their terms made applicable
to the Crown, did not apply to H.M.C.S. Orkney at the time in question.
While the King's Regulations and Admiralty Instructions referred to in s. 45 of
the Naval Service Act (R.S.C. 1927, cap. 139) were not proven at the
trial of this action, the matter has been contested on the footing that they
were in effect at the time in question and that they are identical in their
terms with the International Rules of the Road, and that this is a fact should,
in my opinion, be accepted in disposing of this appeal. In The Truculent
, Willmer J. expressed the view that a
breach of these regulations was a breach of the duty owed by His Majesty's
ships to other mariners. I do not share this view but it is unnecessary
[Page 498]
for the disposition of the present case to decide the
matter. I respectfully agree with the learned President of the Exchequer Court that the fact that the International
Rules of the Road, as established by Order-in-Council P.C. 259 dated February
9, 1897, require that when two vessels are crossing so as to involve risk of
collision the vessel which has the other on her starboard side shall keep out
of the way of the other, that this rule has been almost universally adopted for
a very long time past by ships of seafaring nations, and that an identical rule
forms part of the King's Regulations and Admiralty Instructions affords
evidence from which the inference may properly be drawn that the course
prescribed is in accordance with good seamanship, and that failing to comply
with it is negligent conduct. In addition, the failure of the naval officers to
keep a proper lookout, which was found to have contributed to the accident, was
a failure to take that reasonable care in the circumstances to avoid injury to
the property of others, which is the duty of those at sea as well as ashore. In
my opinion, the inference was properly drawn in the present matter that it was
the negligent acts of the two naval officers referred to in the reasons for
judgment of the learned President which were the proximate cause of the
collision and the resulting damage. I am further of the opinion that the
defence that at the time of the collision the Orkney was engaged in
warlike operations to protect merchant vessels against enemy action and that
the Crown cannot, therefore, be held liable for loss, fails for the reasons
given by the learned President. Upon the issue of contributory negligence, I
also agree with his conclusion.
The third question arises by reason of the contention that,
if liable, the Crown is entitled to the benefit of the provisions of s. 649(1)
of the Canada Shipping Act of 1934. So far as relevant to the present
proceedings, that section reads:—
The owners of a ship, whether registered in Canada or not,
shall not, in cases where all or any of the following events occur without
their actual fault or privity, that is to say—
* * *
(iv) where any loss or damage is,
by reason of the improper navigation of the ship, caused to any other vessel,
or to any goods, merchandise, or other things whatsoever on board any other
vessel;
be liable to damages … to an aggregate amount exceeding
thirty-eight dollars and ninety-two cents for each ton of the ship's tonnage.
[Page 499]
The respondent contends that any such claim on behalf of the
Crown is excluded by s. 712 of the Act reading:—
This Act shall not, except where specially provided, apply
to ships belonging to His Majesty.
The claim to limit the liability was advanced in paragraph
19 of the Statement of Defence and, by the prayer for relief, a declaration was
asked that if His Majesty was liable in the premises he had the right to limit
his liability in conformity with the provisions of ss. 649 and 654 of the Canada
Shipping Act. The right to so limit the liability, if I appreciate
correctly the argument advanced by counsel for the Crown, is that as the
position of the Crown in respect of claims under s. 19(c) is the same as
if the claim was asserted against a subject qua employer and as a subject
would be entitled to invoke the benefit of s. 649, so may the Crown. Secondly,
it is said that under the principle that the Crown may invoke the benefit of
any statute, though not named in it and presumably, therefore, not being bound
by its provisions, it may rely upon s. 649.
In support of the first contention, we have been referred to
a passage from the dissenting judgment of Strong, C.J. in City of Quebec v.
The King . The
claim of the appellant in that case was considered by a majority of the Court
to be based upon ss. (c) of s. 16 of the Exchequer Court Act,
which first imposed liability upon the Crown under certain circumstances in
respect of the negligence of its servants, but the learned Chief Justice
considered that any right of the City must depend upon ss. (d) which
gave jurisdiction to the Court to hear and determine:—
Every claim against the Crown arising under any law of
Canada or any regulation made by the Governor in Council.
It was in considering this subsection that Strong C.J. said
(p. 429) as to its interpretation and, after referring to a passage from the
judgment of the Judicial Committee in Attorney-General of the Straits
Settlement v. Wemyss:
Proceeding upon this principle, we should, I think, be
required to say that it was not intended merely to give a new remedy in respect
of some pre-existing liability of the Crown, but it was intended to impose a
liability and confer a jurisdiction by which a remedy for such new liability might
be administered in every case in which a claim was made against the Crown
which, according to the existing general law, applicable as between subject and
subject, would be cognisable by the Courts.
[Page 500]
Gwynne, J., who disagreed with the
Chief Justice as to the proper disposition to be made of the appeal, referred
to ss. (c) of s. 16, which, in his opinion, gave to the Exchequer Court
"the like jurisdiction as in like cases is exercised by the ordinary
courts over public companies and individuals."
In The Queen v. Filion , Sedgwick, J. quoted the passage from
the judgment of Gwynne, J. in the City of Quebec case, from which the
above quotation is taken, as authority for finding that ss. (c) not only
created a liability but gave jurisdiction to the Court.
In Gauthier v. The King , where the claim was in contract,
Anglin J. (as he then was), in discussing liabilities imposed by s. 20 of the Exchequer
Court Act (the former s. 16), said that no other law than that applicable
between subject and subject was indicated in the Exchequer Court Act as
that by which these newly created liabilities should be determined and,
following this, quoted from the judgment of Strong, C.J. in the City of
Quebec case the passage above cited.
These statements, in so far as they are applicable to the
construction of ss. (c) of s. 19 of the Exchequer Court Act, are,
in my opinion, authority only for this, that the same events which, upon the
application of the maxim respondiat superior, impose liability upon a
subject qua employer, apply in determining the liability of the Crown in
that capacity. That question is entirely distinct from the matter in question
here, which is whether the liability so imposed upon the Crown may be limited
in its extent by a statute which, by its terms, is declared to be inapplicable
to the Crown. Nothing said by the learned members of this Court in the above
mentioned cases or in any others to which we have been referred was directed to
any such question.
In England the liability of the owners of vessels in respect
of harm caused without their actual fault or privity has been restricted by
various statutory enactments since 1733 (Mayers Admiralty Law, p. 161). S. 503
of the Merchant Shipping Act of 1894 limited the damage to £8 for each
ton of the ship's tonnage. That section, with changes which do not alter its
meaning, was incorporated as s. 921 in
[Page 501]
the Canada Shipping Act (c. 113, R.S.C. 1906) and
re-enacted as s. 903 in the revision of 1927. When the new Canada Shipping
Act was enacted in 1934 and the previous Act repealed as well as the
Merchant Shipping Acts of 1894 to 1898, in so far as they were part of the law
of Canada, the section was enacted in its present form.
S. 4 of the Merchant Shipping Act of 1854 provided
that the Act should not, except as provided, apply to ships belonging to
His Majesty, As section 741 the provision formed part of the Merchant
Shipping Act of 1894. When the Canada Shipping Act of 1906 was
enacted, however, while by a number of sections (of which s. 4 was an example)
particular parts of the statute were declared to be inapplicable to ships
belonging to His Majesty, there was no such provision in Part XIV of which s.
921 formed a part, nor was there any such section in that part of the Canada
Shipping Act as it appeared in the Revised Statutes of 1927 of which s. 903
formed a part. When, however, the new Act was passed in 1934 and the
Merchant Shipping Acts of England, in so far as they formed part of the law of
Canada, were repealed, s. 712 was enacted in the precise terms of s. 741 of the
Act of 1894.
Parliament thus, discarding the manner which had been
adopted in the earlier Canada Shipping Acts of exempting His Majesty's ships
from the operation of defined parts of the Act, adopted the form of the
legislation which had been in effect in England of providing generally that,
except where specially provided, the Act should not apply to them. It is
clear that, with certain exceptions provided by the terms of the statute which
are irrelevant to the present consideration (such as sections 557 to 564), none
of the provisions of the Merchant Shipping Act of 1894 were ever held to
apply to vessels of His Majesty's Navy. It is no doubt for this reason that
when the Crown Proceedings Act, 1947 (c. 44), which for the first time
imposed liability upon the Crown in respect of torts committed by its servants
or agents, was enacted, s. 5(1) provided that:—
The provisions of the Merchant Shipping Acts, 1894 to 1940,
which limit the amount of the liability of the owners of ships shall, with any
necessary modifications, apply for the purpose of limiting the liability of His
Majesty in respect of His Majesty's ships; and any provision of the said Acts
which relates to or is ancillary to or consequential on the provisions so applied
shall have effect accordingly.
[Page 502]
There is no such legislation in Canada.
It is, however, to be noted that while it is the
"owners of a ship" who are entitled to the benefit of the limitation
of liability by s. 649(1), s. 712 says that the Act shall not, except
where specially provided, apply to ships belonging to His Majesty. In my
opinion, s. 712 should be construed as applying to or in respect of ships
belonging to Her Majesty and that, accordingly, the limitation of the liability
of His Majesty qua owner is excluded by s. 712. To construe that section
otherwise would be, in my judgment, to fail to interpret the section in such
manner as will best ensure the attainment of the object of the enactment, as
required by s. 15 of the Interpretation Act.
The contention that the Crown may take advantage of s.
649(1) is apparently based upon a principle which is stated in Chitty on the
Prerogatives of the Crown, p. 382, in the following terms:—
The general rule clearly is that, though the King may avail
himself of the provisions of any Acts of Parliament, he is not bound by such as
do not particularly and expressly mention him.
When the necessity arises and, in my opinion, it does not
arise in the present case, it will be necessary to consider the entire accuracy
of this statement. As to this, I refer to the comments of Scrutton, L.J. in Cayzer
v. Board of Trade . The
right to invoke the statute is asserted as an exercise of the prerogative and
there is no room, in my opinion, for its exercise when the matter has been
dealt with by Parliament. In Attorney-General v. De
Keyser's Royal Hotel ,
Lord Dunedin said in part:—
The prerogative is defined by a learned constitutional
writer as "The residue of discretionary or arbitrary authority which at
any given time is legally left in the hands of the Crown." Inasmuch as the
Crown is a party to every Act of Parliament it is logical enough to consider
that when the Act deals with something which before the Act could be effected
by the prerogative, and specially empowers the Crown to do the same thing, but
subject to conditions, the Crown assents to that, and by that Act, to the
prerogative being curtailed.
Here s. 712 provides that any provision of the Act may
be made applicable to the Crown and the provisions of s. 649 and the following
sections have not been so made applicable. Lord Atkinson said in part (p. 539)
:—
It is quite obvious that it would be useless and meaningless
for the Legislature to impose restrictions and limitations upon, and to attach
[Page 503]
conditions to, the exercise by the Crown of the powers
conferred by a statute, if the Crown were free at its pleasure to disregard
these provisions, and by virtue of its prerogative do the very thing the
statutes empowered it to do.
There is no authority binding upon us to which we have been
referred or of which I am aware where His Majesty has been held entitled to the
benefit of the provisions of a statute which, by its terms, declares it to be
inapplicable to the Crown.
I would dismiss this appeal with costs.
Appeal dismissed without costs subject to
limitation of liability under s. 649 of the Canada Shipping Act, 1934.
Solicitor for the appellant: Lucien
Beauregard.
Solicitor for the respondent: C. Russell McKenzie.
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