Supreme Court of Canada
Alimport (Empresa Cubana Importadora de Alimentos) v. Victoria Transport Ltd., [1977] 2 S.C.R. 858
Date: 1976-05-05
Alimport (Empresa Cubana Importadora de Alimentos) (Plaintiff) Appellant;
and
Victoria Transport Ltd. (Defendant) Respondent.
1976: March 23; 1976: May 5.
Present: Laskin C.J. and Martland, Judson, Ritchie, Spence, Pigeon, Dickson, Beetz and de Grandpré JJ.
ON APPEAL FROM THE COURT FOR APPEAL OF QUEBEC
Declinatory exception—Mandatory limit—Jurisdiction ratione personae and ratione materiae—Election of domicile—Court determined by agreement of parties—Civil Code, arts. 57, 85 and 1013—Code of Civil Procedure, arts. 9, 68, 152, 161, 163, 164, 168 and 170.
Appellant (the purchaser), the head office of which is in Havana, Cuba, brought an action in the Superior Court of Montreal against respondent (the seller), which has its head office in Grand Falls, New Brunswick, for faulty performance of a contract. The contract contained a clause stipulating that in the case of a discrepancy in which the defendant is the seller, the parties will submit themselves to the courts in Montreal. Notice of the action was served by mail in Grand Falls on May 15, 1973, and the defendant appeared within the time fixed and submitted a motion for security. This motion was granted on June 28, the required security was provided on July 4, and notice thereof was given on the same date. On July 23, defendant served notice of a motion for particulars. These were provided on December 19. On April 29, 1974, respondent served notice of the declinatory exception in question. The Superior Court dismissed the exception for the sole reason that it was not submitted within the time limit which, in the case at bar, had started to run on the day on which the notice that security was being provided was given, namely, on July 4. A majority of the Court of Appeal reversed the judgment on the grounds that there was a lack of jurisdiction ratione materiae that could be raised at any time. Plaintiff appeals to this Court with its leave.
Held: The appeal should be allowed.
The delay provided by art. 161 of the Code of Civil Procedure is a mandatory delay applied to all cases contemplated in art. 168, with the exception of cases
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dealt with in art. 171, and also with the exception of the lack of jurisdiction ratione materiae which, under art. 164, can be raised at any time. By indicating that certain delays are mandatory, art. 170 does not prevent others from also being mandatory. It follows that the lack of jurisdiction ratione personae is covered by the appearance of the defendant and its failure to raise the point within the prescribed time. Further, the motion for particulars implied submission to the Court’s jurisdiction.
It was not a question of lack of jurisdiction ratione materiae that could be raised at any time, but of jurisdiction ratione personae since the problem is one of determining the domicile of one party. The Privy Council and the Court of Cassation both held that international jurisdiction may be determined by extension of the rules governing domestic territorial jurisdiction, found in Quebec in art. 27 C.C. and art. 68 C.C.P.
The clause in the contract constituted a true election of domicile in Montreal, even though the words “election of domicile” are not to be found there. In consensual contracts, the parties’ intention expressed with sufficient clarity is considered enough. In the case at bar, this intention was that the competent court should be in Montreal, which is an effect of an election of domicile.
Alliance des Professeurs catholiques de Montréal v. Labour Relations Board, [1953] 2 S.C.R. 140; Kondylis v. Greyhound Lines of Canada Ltd., [1973] R.P. 241; Trower and Sons, Ld. v. Ripstein, [1944] A.C. 254, set aside [1942] S.C.R. 107, restored (1940), 69 Que. K.B. 424, referred to; The First National Bank of Boston v. La Sarchi Compagnie, [1961] Que. Q.B. 702; Magann v. Auger (1901), 31 S.C.R. 186, distinguished.
APPEAL from a decision of the Court of Appeal of Quebec reversing the judgment of the Superior Court dismissing the declinatory exception. Appeal allowed and judgment of the Superior Court restored.
H. Solomon, Q.C., for the appellant.
George A. Allison, Q.C., and Claude Décarie, for the respondent.
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The judgment of the Court was delivered by
PIGEON J.—This appeal is against a majority decision of the Court of Appeal of Quebec reversing the judgment of Châteauguay Perrault J. of the Superior Court who had dismissed, for the sole reason that it was filed too late, the declinatory exception made by respondent Victoria Transport Ltd. against the action brought by appellant Alimport. This action claimed from Victoria Transport the sum of $433,622.59 for damages arising from the faulty performance of a contract of sale of seed potatoes. In this agreement, as in the writ of summons, Alimport, the purchaser, is described as having its head office in Havana, Cuba, and Victoria Transport, the vendor, as having its head office in Grand Falls, New Brunswick. The contract contains the following clause:
ARBITRATION
Both parties agree to comply with the terms and conditions of this Size Contract in good faith. Any discrepance (sic) which may arise from this Contract shall be settled through friendly negotiations between both parties. If the afore-mentioned negotiations fail and it become impossible to reach an agreement, both parties will submit themselves to the Courts in the City of Havana and to the currents (sic) laws in Cuba, in case the defendant be the BUYER, and to the Courts in the City of Montreal; and to the currents (sic) laws in Canada, in case the defendant be the SELLER. This should be confirmed by a Certificate issued by the Chamber of Commerce of the SELLER or BUYER’S Country.
In accordance with an authorization given under art. 138 C.C.P., notice of the action was served by mail and received in Grand Falls on May 15, 1973. The time limit for an appearance was thirty days. Defendant appeared on June 8 and on June 13, that is within the time fixed by art. 152 C.C.P., defendant asked that the time allowed for defending the action not commence to run until security for costs had been given. This motion was granted on June 28, the required security was provided on July 4 and notice thereof was given. Then, on July 23, defendant served notice of a motion for particulars. These were provided on December 19. Only on April 29, 1974 did Victoria Transport
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serve notice of its declinatory exception.
The two articles of the Code of Civil Procedure which deal with declinatory exceptions read as follows:
163. A defendant, summoned before a court other than that before which the suit should have been instituted, may ask that the suit be referred to the competent court within the legislative authority of the province, or that the suit be dismissed if there is no such court.
164. Lack of jurisdiction by reason of the subject matter may be raised at any stage of the case, and it may even be declared by the court of its own motion. The court adjudicates as to costs according to the circumstances.
Article 161 provides as follows for the time limit:
161. The grounds set forth in article 163 and in paragraphs 1, 4 and 8 of article 168 must be urged together within five days of the expiry of the time fixed to appear, or of the notice provided for by article 152 or, if there has been a motion in evocation, from the date of the judgment thereon.
The court first decides the declinatory exception; if it dismisses the declinatory, it decides all the other exceptions at the same time; if it maintains the declinatory the other grounds are referred to and decided by the competent court.
Victoria Transport never obtained an extension of the time limit laid down in art. 161. Furthermore, it seems clear that this time limit is mandatory, and art. 9 consequently forbids any extension of it:
9. A judge may, upon such conditions as he considers just, extend any delay which is not declared mandatory or relieve a party from the consequences of his failure to respect such delay.
It will be noted that the English version of art. 9 reads “any delay which is not declared mandatory” while the wording of art. 161 is quite peremptory: “must be urged together within five days…”. Furthermore, art. 164 dealing with lack of jurisdiction ratione materiae, is not among those mentioned as being subject to the five day time limit of art. 161, and it expressly allows such lack to be raised “at any stage of the case”. I must
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point out, however, that art. 170 might create a doubt in this regard. It is in Section IV of the Chapter on “Preliminary Exceptions”, a section which is entitled “Dilatory Exceptions” and which includes arts. 168 to 171. It reads as follows:
170. Subject to the provisions of article 171, the delays provided by articles 161 and 162 for urging the dilatory exceptions provided for in this section are mandatory.
In this provision, are the words which I have emphasized, to be understood as implying that the time limits set for urging other exceptions provided for in other sections are not mandatory? I do not think so. I feel this provision is merely intended to specify that the time limit must be applied strictly to all the cases contemplated in art. 168, with the sole exception of cases dealt with in art. 171, and not, as earlier decisions had held, all those cases which the last paragraph of art. 165 of the former Code (added by an act of 1901, c. 34) exempted from the requirement of a deposit, which requirement was completely abolished by the new Code. The principle that the mention of a particular case excludes application of other cases not mentioned is far from being recognized as a general rule of interpretation. On the contrary, an affirmative provision of limited scope does not ordinarily exclude the application of a general rule otherwise established. In Alliance des Professeurs catholiques de Montréal v. Labour Relations Board, Rinfret C.J. said (at p. 153):
[TRANSLATION] Maxwell (p. 467) anticipates the objection that an express stipulation for a specific case does not necessarily imply that this general precept must be considered as excluded from another case where the law remains silent. Summarizing the precedents on this point, he expresses the following opinion (p. 467):
Provisions sometimes found in statutes enacting imperfectly or for particular cases only that which was already and more widely the law have occasionally furnished ground for the contention that an intention to alter the general law was to be inferred from the partial or limited enactment; resting on the maxim ‘expressio unius est exclusio alterius’. But that maxim is inapplicable in such cases.
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I therefore feel that art. 170 does not have the effect of setting aside the important rule of long standing in Quebec, that, as indicated in art. 164, only the lack of jurisdiction ratione materiae may be raised at any time, and may even be declared by the court of its own motion, whereas any other lack of jurisdiction is covered by the appearance of defendant and his failure to raise the point within the prescribed time. It is true that in Quebec a defendant does not have to make a special motion to prevent his appearance from implying that he submits to the court’s jurisdiction. He has always been entitled to make a declinatory exception within the prescribed time. By putting arts. 152 to 154, which deal with the application for security for costs, in a separate chapter before the one on preliminary exceptions, the legislature appears to have intended that such application should not imply a submission to the court’s jurisdiction, because art. 161 makes the time limit for making preliminary exceptions run from the “notice provided for by article 152”, that is the notice that the security has been provided. I therefore hold that defendant was not precluded from making a declinatory exception merely by having submitted an application for security for costs. However, such is not the case for the motion for particulars. This was a procedural step taken without conditions, which implied submission to the jurisdiction, not to mention the long period of time which was subsequently allowed to elapse.
Finally, it should be pointed out that the two judges making up the majority in the Court of Appeal, as well as Mayrand J.A. dissenting, in no way denied the principle on which judgment of the Superior Court was based, namely that a declinatory exception which is not ratione materiae may be made only within the five-day time limit specified in art. 161. Rinfret J.A. said:
[TRANSLATION] The expiry of the mandatory period of five days specified in art. 161 C.C.P., even if voluntary, does not confer jurisdiction on the Superior Court if it does not have it otherwise. (Italics are mine)
Crête J.A., after saying that [TRANSLATION] “the Superior Court did not have jurisdiction ratione personae in the case at bar”, merely quoted the first paragraph of the head-note of the
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report of a judgment rendered under the 1897 Code of Civil Procedure: The First National Bank of Boston v. La Sarchi Compagnie, affirmed by this Court on May 4, 1962, as noted in the 1974 Index Gagnon. But the last paragraph of the reasons for this judgment by Casey J.A. reads as follows (at p. 704):
Defendant made its preliminary exception within the three-day delay and it is now too late for plaintiff to contend that defendant’s request for a three-day delay should not have been granted or that the exception made within this delay was tardy.
A similar observation must be made regarding the judgment of the Court of Appeal cited by Rinfret J.A.: Kondylis v. Greyhound Lines of Canada Ltd. I therefore have to agree with Mayrand J.A. who, in his dissenting reasons, wrote on this point.
[TRANSLATION] Concerning jurisdiction ratione personae, defendant alone may complain that plaintiff has not observed the rule in art. 68 C.C.P.; he must do so by declinatory exception within the mandatory time limit mentioned in art. 161 C.C.P. (five days from expiry of the time set for appearance): E. Lacroix Immeubles Ltée v. Poirier (J. Robert Beaudoin J.), [1967] R.P. 96. If it is not made within this time limit, the preliminary exception is tardy and must be dismissed:
Metropolitan Stores of Canada v. Tri Bec Inc., [1971] C.A. 315;
General Foods Ltd. v. Struthers Scientific Corp., [1970] R.P. 321 (Q.B.).
In Kondylis v. Greyhound Lines of Canada Ltd., [1973] R.P. 241, and in First National Bank v. La Sarchi Compagnie, [1961] Que. Q.B. 702, the declinatory exception was allowed, but it was not tardy; observations made in the latter case make it clear that the exception would have been dismissed if it had not been made within the time limit allowed by judgment.
When a defendant neglects to excercise in limine litis his right to a declinatory exception, he is deemed to accept trial of the case in the court in which he was sued: Traité de droit civil du Québec, vol. 1, by Gérard Trudel, p. 264:
It is generally taught that domicile, since it is a personal attribute, confers jurisdiction ratione per-
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sonae on a court. This jurisdiction may be waived, and the waiver may be tacit. A defendant, summoned before another court than that of his elected domicile, who pleads without raising by preliminary proceeding this irregularity in the summons, implicitly waives this jurisdiction ratione personae and validly submits to the jurisdiction of the court chosen by his adversary. Clearly, it will in addition be necessary that the court have jurisdiction according to the general rules of law.
The main ground relied on by Rinfret J.A. on appeal, in which Crête J.A. concurred, was that there was a lack of jurisdiction ratione materiae. However, they do not appear to have given consideration to the meaning of this expresssion. After citing the contrary view of the judge of first instance, they seem to assume that towards any person who does not have his domicile in the province and does not reside therein, the lack of jurisdiction is ratione materiae. Mayrand J.A., however, in his dissenting opinion, quite correctly said:
[TRANSLATION] The tardiness of his exception would not be fatal if it raised a question of jurisdiction ratione materiae, because this is a matter of public order. The Provincial Court, for instance, does not have jurisdiction ratione materiae to hear this case even if both parties agreed to bring their case before it. However, with respect for the contrary view, I feel that respondent has raised only a problem of jurisdiction ratione personae. If defendant-appellant had its domicile in Montreal, the jurisdiction of the Superior Court where the case was instituted would be indisputable. The criterion of jurisdiction ratione personae is precisely the determination of that jurisdiction by the domicile of a party to a case, usually that of the defendant, in conformity with the rule lites sequuntur personam (Cornu and Foyer, Procédure civile, p. 141).
Without unduly multiplying references, I shall quote from among the writers on procedure, Garsonnet, Traité de Procédure, Vol. I, at pp. 635-636:
[TRANSLATION] CXLIX. The theory of jurisdiction may be divided into two quite separate parts: jurisdiction ratione materiae and jurisdiction ratione personae. Jurisdiction ratione materiae is the right of the courts of a given jurisdiction to take cognizance of a case to the exclusion of the courts of another jurisdiction; jurisdiction ratione personae is the right of courts of a given jurisdiction to take cognizance of a case to the exclusion
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of the other courts of the same jurisdiction. The first jurisdiction is thus named because cases are divided among the different kinds of courts by reason of their nature, and the name of the other derives from that jurisdiction in courts of the same kind is usually determined by the defendant’s domicile or residence. On the other hand, a court has no jurisdiction ratione materiae in cases belonging to another jurisdiction; it is without jurisdiction ratione personae only in those cases which belong to another court of the same kind.
The application of these principles usually presents no difficulties. 1. The following do not have jurisdiction ratione materiae:
(i) an appellate court in cases which have not been heard at the first level of jurisdiction;
(ii) a Justice of the Peace in actions involving real property or relating to personal status;
(iii) a labor board in disputes which do not occur between an employer and an employee in the course of employment;
(iv) a commercial court in cases of a purely civil character.
In Solus and Perrot, Droit judiciaire privé, Vol. II, one reads at pp. 13 and 14:
[TRANSLATION] A. The first problem is that of ascertaining the scope, nature and category of the jurisdiction before which the case must be brought, according to the legal relationships in issue, the matter in dispute and its importance, even the actual personal character of the litigants. In fact, the legislator has established a close correlation between the respective jurisdictional powers of the various categories of jurisdiction on the one hand, and on the other hand the form of their organization and operation, their composition and the selection and specialization of the judges who make up the court. That is why, at this first stage of determining jurisdiction, the only question is to ascertain, objectively to some extent, which category of jurisdiction will hear the case: whether it will be an administrative tribunal or a criminal or civil court; and if a civil court has jurisdiction, whether it will be an inferior or superior court, a commercial court, a conciliation board or a court where both sides are equally represented in adjudicating rural land leases.
Traditionally, the rules intended to resolve this first problem were known as rules of absolute jurisdiction, or of jurisdiction ratione materiae.
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Mayrand J.A. rightly rejected in his dissenting opinion the theory that [TRANSLATION] “the above distinction is valid only in private domestic law, but in private international law it is first necessary to pass upon the competence of a national court to hear a case between two foreigners”. While the majority failed to cite anything that was really relevant, he cited Solus and Perrot, where one finds, in addition to what he has quoted, the following statement (No. 394, at p. 448):
[TRANSLATION] The prevailing opinion is that the problem of special jurisdiction is usually considered only from the point of view of domestic territorial jurisdiction, since in this view it is by an extension of the rule regarding domestic territorial jurisdiction that international jurisdiction may be determined.
In Lerebours-Pigeonnière and Loussourarn, Droit international privé, No. 398 (at p. 531) one may read:
[TRANSLATION] The court before which a case concerning international matters is heard must ascertain its general jurisdiction before deciding on its special jurisdiction ratione materiae et personae. The defendant must raise the exception of lack of general jurisdiction in limine litis, since this is a relative lack of jurisdiction in connection with a private interest like the exception of lack of jurisdiction ratione personae.
In the Dalloz 1963, Jurisprudence, p. 109, there is reported a decision of the Court of Cassation of October 30, 1962, containing the following:
[TRANSLATION] …whereas the foreign nationality of the parties is not a cause of the lack of jurisdiction of the French courts, whose international jurisdiction is moreover determined by extension of the rules governing domestic territorial jurisdiction;
According to the extract from Walter S. Johnson, Conflict of Laws, 2nd ed. 1962, at p. 575, quoted by Mayrand J.A., the Court of Cassation had begun to move in this direction since 1846, that is a long time before the drafting of the Civil Code of Quebec, which was adopted in 1866.
Much closer in time, it should be noted that in Trower and Sons, Ld. v. Ripstein, the Privy Council, reversing the decision of this Court, and
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restoring the conclusions of the Court of Appeal of Quebec, ruled on the jurisdiction of the Superior Court in the case of a person domiciled in London by applying the provisions of what was then art. 94 of the Code of Civil Procedure, and is today art. 68, under the significant heading: “Place of Instituting Actions”. It is important to emphasize that the objection to the jurisdiction had been raised by a preliminary exception. Article 94 C.C.P., which was in force at that time, was to the same effect as the present art. 68, the relevant part of which reads as follows:
68. Subject to the provisions of articles 70, 71, 74 and 75, and notwithstanding any agreement to the contrary, a purely personal action may be instituted:
1. Before the court of the defendant’s real domicile or, in the cases contemplated by article 85 of the Civil Code, before that of his elected domicile…
In short, the Privy Council held, like the Court of Cassation, albeit in other terms, that international jurisdiction may be determined by extension of the rules governing domestic territorial jurisdiction (at p. 264):
…art. 27 of the Civil Code is not dealing with service outside the jurisdiction. It is merely a general provision to show that aliens are not as such exempt in proper cases from the jurisdiction of the courts of the province.
Article 27 of the Civil Code reads as follows:
Art. 27. Aliens, although not resident in Lower Canada, may be sued in its courts for the fulfilment of obligations contracted by them in foreign countries.
Even though it is not strictly necessary for the decision of this case, I find it desirable to add that, in the case at bar, I cannot understand how the Court of Appeal could fail to see in the stipulation I have quoted at the outset, an election of domicile in Montreal. It is true that the words “election of domicile” are not to be found there and that the mention of the laws of Canada is not very precise, as Rinfret J.A. points out. That, however, is not a valid reason for depriving the clause from any effect. It has long been accepted that as a general rule there are no ritual words in our law. The invariable rule, at least in consensual contracts like this, is that it is enough that the parties express
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their intention with sufficient clarity. [TRANSLATION] “Except in cases where it must compulsorily accompany certain documents, the election of domicile is not subject to any formality” (Planiol and Ripert, Vol. I, No. 167, at p. 211).
In the case at bar, there can be no doubt as to what was intended. It was intended that, for an action against the vendor, the competent court should be in Montreal. This, it should be noted, is the only effect of an election of domicile made in a city without an indication of a person appointed to represent the debtor: Mignault, Droit civil canadien, Vol. I, at p. 247:
[TRANSLATION] Effects of election of domicile.—To appreciate these and to determine their extent, a distinction must be made. Domicile may be elected:
1° In a given town, with an indication of a person who shall represent the debtor and of the house where this person resides;
2° In a given town, but with no indication of a person appointed to represent the debtor.
In the first case, the election of domicile has two effects:
1° It confers jurisdiction on the court in the area of jurisdiction in which the election is made: accordingly, if the contract to which it relates gives rise to a dispute, such court will have jurisdiction over it;
2° It validates all summonses and service of documents done at the place where domicile is established.
In the second case, it has only one effect: it merely confers jurisdiction. Therefore if the contract to which it relates gives rise to a dispute, the court of the area of jurisdiction in which election is made will have jurisdiction over the case, but writs of summons must be served at the defendant’s actual domicile.
The only defect in the wording of the clause in dispute is that it expresses the desired result without stating what it involves: an election of domicile. With respect, I must say that to deprive this clause of any effect because of this defect in its wording is to contravene the most fundamental rule of interpretation, namely, that the intention “must be determined by interpretation rather than by an adherence to the literal meaning of the words of the contract” (art. 1013 C.C.).
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It may be noted that the situation here is completely unlike that in Magann v. Auger. The contract in that case contained no stipulation concerning the jurisdiction of the courts. There was not even an express stipulation of the place of payment. This Court holding that the contract had not been made in Quebec, nothing permitted the plaintiff to bring an action against a non-resident defendant. The judgment at first instance dismissing the declinatory exception was not based on the ground that defendant had not made it in the time allowed; it was based on the theory that defendant, against whom judgment had been rendered by default, had submitted to the jurisdiction by filing what was called an incidental demand, but was in fact a cross demand, although he subsequently discontinued it. The record shows that, in his first proceeding, his petition in revision, defendant had first raised the court’s lack of jurisdiction. However, to conform with art. 1164 of the Code then in force, which provided that such proceeding must contain all grounds, he had pleaded his defence on the merits and the cross demand, in addition to the lack of jurisdiction. He subsequently filed a declinatory exception, which was contested in writing and adjudicated upon by way of preliminary. It is easy to understand why, in the judgment of this Court, it was not deemed necessary to say much more than (at p. 192):
…if there has been a waiver at all, it was on the part of the respondents who asked the Court a judgment on the merits of the appellant’s declinatory exception without invoking waiver of it by the appellant.
Before concluding, I would note that defendant admitted its status as a trader in a document entered in the record, so that there can be no question here of applying the last paragraph of art. 85 C.C., which invalidates, as regards the jurisdiction of the courts, an election of domicile signed by a non-trader within the boundaries of the district in which he resides, save in the case of a notorial deed.
I conclude that the appeal should be allowed, the judgment of the Court of Appeal set aside and
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the judgment of the Superior Court restored, with costs against respondent throughout.
Appeal allowed with costs.
Solicitor for the appellant: H. Solomon, Montreal.
Solicitors for the respondent: Martineau, Walker, Allison, Beaulieu, MacKell & Clermont, Montreal.
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