The cases digested on this page consider two separate but closely related topics; the definition, nature and scope of the body of law known as Canadian Maritime Law and the Admiralty jurisdiction of the Federal Court.
Canadian Maritime Law is a separate and distinct body of law enacted by s. 42 of the Federal Court Act and defined in section 2 of the Federal Court Act. It is the law that governs matters relating to ships and the sea regardless of the court in which proceedings are commenced. The rights and remedies that apply under Canadian Maritime Law are often different from those that would otherwise apply under the provincial laws of general application. It is therefore important to always determine if a matter is governed by Canadian Maritime Law and to determine the nature of that law. The determination of whether a matter is governed by Canadian Maritime Law frequently involves a constitutional law analysis of the division of powers between the Federal and Provincial Governments, as can be seen in many of the cases digested below.
The admiralty jurisdiction of the Federal Court is closely connected to the definition, nature and scope of Canadian Maritime Law since it is a statutory court and has only the jurisdiction specifically given it by statute. Section 22 of the Federal Court Act gives it jurisdiction to hear and determine any case "in which a claim for relief is made or a remedy is sought under or by virtue of Canadian maritime law".
For further background and a review of the important cases in this area please see the paper entitled Confused Seas: The Application of Provincial Laws to Maritime Matters.
Synopsis of significant developments in 2011-2012
The nature and scope of Canadian maritime law and the constitutional limits of Parliament’s jurisdiction over navigation and shipping continues to generate a multiplicity of cases. Most recently, in Tessier Ltee. v. Quebec, 2012 SCC 23, the Supreme Court of Canada addressed whether and when stevedoring activities are governed by provincial occupational health and safety legislation. Notably, the court said that shipping activities undertaken solely within a province are subject to provincial law. In Ryan Estate v. Universal Marine, 2009 NLTD 120, affd. 2011 NLCA 42, the Newfoundland Court of Appeal held that the litigation bar in the provincial Workers Compensation Act did not apply to dependents of crew members who lost their lives when their vessel sank. In Jim Pattison Enterprises v. Workers' Compensation Board, 2009 BCSC 88 affirmed 2011 BCCA 35, the British Columbia Court of Appeal dismissed an appeal from the B.C. Supreme Court and held that the Occupational Health and Safety Regulation under the provincial Workers Compensation Act was applicable to commercial fishing vessels. The intraprovincial nature of the fishing activities was an important factor in the decision. Other cases of interest include: Croisières Charlevoix Inc. v. Quebec, 2012 QCCS 1646 where it was held that intra-provincial carriage of passengers was subject to provincial law; Chalets St-Adolphe inc. c. St-Adolphe d'Howard (Municipalité de), 2011 QCCA 1491, where a municipal by-law that restricted the persons who could use a lake was declared invalid by the Quebec Court of Appeal; Alcan Primary Metal v. Groupe Maritime Verreault Inc., 2011 FCA 319 , where it was held that a brokerage/commission contract in respect of tugs was governed by maritime law and within the jurisdiction of the Federal Court; and, Canada v. Toney, 2011 FC 1440, 2012 FCA 167 where the Federal Court of Appeal agreed with the trial Judge that the Federal Court had jurisdiction in an admiralty action against a provincial crown.
Synopsis of significant developments in 2009-2010
The extent to which provincial statutes apply to maritime matters continues to trouble the courts and confound litigants. In Jim Pattison Enterprises v. Workers' Compensation Board, 2009 BCSC 88 affirmed 2011 BCCA 35, the British Columbia Court of Appeal dismissed an appeal from the B.C. Supreme Court and held that the Occupational Health and Safety Regulation under the provincial Workers Compensation Act was applicable to commercial fishing vessels. The intraprovincial nature of the fishing activities was an important factor in the decision. Similarly, in Durham v. Todd, 2010 ONCJ 122 and R. v. Latouche, 2010 ABPC 166, provincial statutes and municipal bylaws were held to apply to anchoring in a local harbour and river rafting respectively. Also, In Québec v Croisières Charlevoix Inc., 2010 QCCQ 10990, the Quebec Transport Act was held to apply to the intraprovincial carriage of passengers. However, in Ryan Estate v. Universal Marine, 2009 NLTD 120, the Newfoundland Supreme Court held that the bar against actions for injuries or fatalities in the course of employment contained in the provincial Workplace Health, Safety and Compensation Act was not applicable to an accident on board a fishing vessel. (The author recently presented a paper entitled Confused Seas: The Application of Provincial Laws to Maritime Matters at a seminar held by the Judicial Council and Canadian Maritime Law Association in Ottawa on April 15, 2011. Readers interested in this topic can download the paper here.)
Synopsis of significant developments in 2007-2008
The most significant developments of 2007-2008 in relation to the scope and content of Canadian maritime law were the decisions of the Supreme Court of Canada in Canadian Western Bank v. Alberta,  2 S.C.R. 3, 2007 SCC 22 (a non-marine case) and British Columbia (Attorney General) v. Lafarge Canada Inc.,  2 S.C.R. 86, 2007 SCC 23. In these cases the Supreme Court of Canada has said that constitutional issues relating to the application of provincial statutes to matters within the constitutional jurisdiction of the federal Parliament should preferably be resolved by the application of the paramountcy doctrine rather than the interjurisdictional immunity doctrine. The interjurisdictional immunity doctrine should be limited to cases where the provincial legislation actually “impairs” or places in jeopardy the core of the federal power. Merely affecting the federal power is not sufficient to invoke the doctrine. The paramountcy doctrine will apply where there are valid provincial and federal laws and it is either impossible to comply with both laws or the application of the provincial law would frustrate the purpose of the federal law. This restatement of the law means that there is a greater possibility of provincial statutes of general application applying to maritime matters which is reflected in: R. v. Mersey Seafoods Ltd., 2008 NSCA 67, where the provincial Occupational Health and Safety Act was held to apply to fishing vessels; and, Salt Spring Island Local Trust Committee v. B & B Ganges Marina Ltd., 2008 BCCA 544, affirming 2007 BCSC 892, where local land use controls were held to apply to a floating camp that was held not to be a ship because it was not being used in navigation.
Insolvency Proceedings - Judicial Sale of Ship -Competing Jurisdiction of Federal Court and Provincial Superior Court
Roynat Inc v. Phoenix Sun Shipping Inc, 2013 ONSC 7308,
A full summary is not yet available but in this case the Ontario Superior Court refused to approve the sale of a ship by a receiver when there were concurrent proceedings in the Federal Court, the vessel had been arrested in Federal Court and a sale order had been issued in Federal Court. A link to the decision is not yet available but it should appear on CanLii (www.canlii.org) in the near future.
Federal Court Jurisdiction- Crown Immunity - Federal Court Has No Jurisdiction Over Province
The Federal Court of Appeal has held that the Federal Court has no in personam jurisdiction over a province. The full summary will be available in due course
Canadian Maritime Law - Application of Provincial Statutes - Workers Compensation
This was a judicial review of a decision of the Workplace Health, Safety and Compensation Commission of Newfoundland. The issue was whether the Workplace Health, Safety and Compensation Act of Newfoundland prohibited an action by the estates and dependents of two crew members who lost their lives when their fishing vessel sank. It was undisputed that the deceased crew members had been “workers” under the Act and that the defendants were
“employers” under the Act. At trial, the Court noted that questions of liability in a marine context “clearly and obviously fall within federal jurisdictions” and said that the issue was whether the statutory bar in the Workplace Health, Safety and Compensation Act was “merely casual or incidental” such that it would not give rise to the doctrine of interjurisdictional immunity. The Court noted that the interjurisdictional immunity doctrine would be invoked where a provincial statute intrudes on the “core” of a federal power to the extent that it “impairs” that power. The Court further said that “there can be no greater level of impairment of the power to sue than to bar the exercise of that power” and held that the Workplace Health, Safety and Compensation Act must be read down so as not to apply. Although this was sufficient to dispose of the case, the Court did consider the paramountcy doctrine and held that it was also applicable.
On appeal, the Newfoundland Court of Appeal upheld the judgement of the Trial Judge but with a dissenting Justice. The majority began its analysis by applying the pith and substance doctrine and had no difficulty finding that the Workplace Health, Safety and Compensation Act was valid provincial legislation. It then considered the interjurisdictional immunity doctrine noting that this involved answering two questions: (i) does the provincial law trench on the core of a federal power? and (ii) is the provincial law’s effect on federal power sufficiently serious? (i.e. does it impair and not merely affect the federal power?). Relying heavily upon the Supreme Court of Canada’s decision in Ordon v Grail, the majority held that the doctrine of interjurisdictional immunity applied and the statute should be read down. The majority also considered and applied the paramountcy doctrine holding that “if a maritime claimant wishes to avail of the right to sue, he or she will be precluded from doing so. He or she cannot comply with the federal law without violating the provincial. The two provisions cannot, in an operative sense, co-exist.” The dissenting Justice would have held: that the Workplace Health, Safety and Compensation Act was in pith and substance a no fault insurance scheme and not maritime negligence law; that there was no operational conflict under the paramountcy doctrine as the federal law did not compel claimants to make claims; and the interjurisdictional immunity doctrine did not apply because the core of the federal power was not engaged.
A further appeal to the Supreme Court of Canada (2013 SCC 44)was allowed. The Supreme Court held that neither interjurisdictional immunity nor paramountcy applied and that the bar to litigation in the Newfoundland Workplace Health, Safety and Compensation Act applied.A full summary of the Supreme Court's decision will be prepared in due course.
Jurisdiction - Sale of Property not in Canada
SDV Logiostiques (Canada) Inc. v. Dieselgenset Type 8M 25, Engine No. 45085 EX the Barge Andrea, 2013 FC 671,
Not yet available
Federal Court Jurisdiction over Provincial Crown – Practice – Pleadings - Motion to Strike
Ship Source Oil Pollution Fund v. British Columbia (Finance), 2012 FC 725,
This action by the plaintiff was pursuant to the Marine Liability Act to recover costs it paid to clean up oil pollution from a vessel that sank in Brittania Bay, British Columbia. The defendant was the Crown in right of the Province of British Columbia who had allegedly became the “owner” of the vessel when its registered and beneficial owner was dissolved under the Society Act of British Columbia. The BC Crown brought this application to strike the claim on various grounds including that the Federal Court does not have in personam jurisdiction against it or, alternatively, that that Federal Court is without subject matter jurisdiction because the issue of ownership depended on provincial law.
Decision: Application dismissed.
Held: The test on a motion to strike for lack of jurisdiction is whether it is plain and obvious the claim discloses no reasonable cause of action. For the purpose of the application, the allegations of fact in the pleadings are accepted as proved unless patently ridiculous or incapable of proof. The onus is on the party moving to strike the pleading. The BC Crown is asking the Federal Court to engage in a complex exercise of statutory interpretation to justify the “draconian” measure of striking the Statement of Claim. “A motion to strike is not the proper forum to make a final determination on such weighty matters.” Alberta v Toney, 2012 FCA 167, is dispositive of the issue and, in any event, it is not plain and obvious the Federal Court is without jurisdiction. Jurisdiction is based on a three part test: there must be a statutory grant of jurisdiction; there must be an existing body of federal law essential to the disposition of the case that nourishes the statutory grant; and, the law on which the case is based must be “a law of Canada” within the meaning of s.101 of the Constitution Act. Section 22(2)(d) of the Federal Courts Act grants jurisdiction with respect to “damage done by a ship” and the sinking of a ship resulting in pollution is arguably damage within the meaning of s. 22(2)(d). There is case authority that the Federal Court has jurisdiction over a claim against a province as owner of a vessel where the claim is a maritime claim. Section 43(7) of the Federal Courts Act also suggests the Federal Court has in rem jurisdiction against a ship owned by a province. Section 3 of the Marine Liability Act also expressly provides that act is binding on a province. At the very least it is not plain and obvious the Federal Court does not have personal jurisdiction over the BC Crown. The fact that the ownership issue may require the application by the Federal Court of provincial law does not matter. The ancillary application of provincial law does not affect the jurisdiction of the Federal Court.
Federal Court Jurisdiction - Action vs Provincial Crown - In Rem Proceedings
This was an in rem and in personam action against both the federal and provincial crowns and a vessel owned by the Alberta government. The action concerned a fatal accident that occurred on an Alberta lake. The plaintiffs alleged that the defendants were negligent in their performance of search and rescue duties. The Alberta defendants moved to strike the in rem action on the basis that the vessel had been sold prior to the commencement of the action and also moved to strike the in personam action against them on the basis that actions against a provincial crown should be commenced in the provincial courts. The federal defendants also moved to stay the action or to have it struck as an abuse of process. At first instance, the trial Judge allowed the motions only with respect to the action in rem. The trial Judge held that the sale of the vessel prior to the commencement of the action did defeat the action in rem but it did not affect the action in personam. The trial Judge (2011 FC 40) held that the fact one of the defendants was a provincial crown was irrelevant as the action (and the Federal Court’s jurisdiction) was not grounded in s. 17 of the Federal Courts Act (which governs actions against the Federal Crown) but in s.6 and following of the Marine Liability Act. The Alberta defendants appealed.
Decision: Appeal dismissed.
Held: The Federal Court of Appeal Court noted that it was undisputed the plaintiffs’ claims fall within the subject of navigation and shipping and within the express terms of section 22 of the Federal Courts Act. It was not plain and obvious that the Federal Court was without jurisdiction.
Comment: In Toney v. Canada, 2012 FC 1412, the same point was brought to the court on a question of law (as opposed to the above case which was a motion to strike). At first instance the Federal Court held that it had jurisdiction in personam against a province in a maritime matter. However, on appeal, at 2013 FCA 217, the Federal Court of Appeal held that the Federal Court has no jurisdiction over a provincial crown.
Constitutional Law - Division of Powers - Labour Relations - Stevedoring Activities
Tessier Ltee. v. Quebec, 2012 SCC 23,
The plaintiff was engaged in the business of renting heavy equipment, including cranes, and also in the business of equipment repair and road transportation. All of its activities were conducted in the Province of Quebec. Approximately 14% - 20% of its activities involved crane rentals for stevedoring services but the employees involved in these services were also involved in other activities. Because of its stevedoring activities, the plaintiff sought a declaration that it was subject to federal jurisdiction and not to Quebec's occupational health and safety legislation.
Decision: The plaintiff was subject to provincial law.
Held: The Supreme Court of Canada began its analysis by noting that legislation respecting labour relations is presumptively a provincial matter since it engages the provinces’ authority over property and civil rights. The Court further noted that the federal government has jurisdiction to regulate employment in two circumstances: when the employment relates to a work, undertaking, or business within the legislative authority of Parliament; or when it is an integral part of a federally regulated undertaking. Although it was recognized that s.91(10) of the Constitution Act gives Parliament exclusive jurisdiction over navigation and shipping, the court said it did not give Parliament absolute authority. Section 91(10) had to be read in light of s. 92(10) which gives the provinces jurisdiction over local works and undertakings. Shipping undertakings within a province are subject to provincial jurisdiction. Therefore jurisdiction in a particular case depends on the territorial scope of the shipping activities in question. Moreover, since stevedoring is not a transportation activity that crosses provincial boundaries, it cannot come within federal jurisdiction under s. 91(10) but can only be subject to federal jurisdiction if it is integral to a federal undertaking. The test is met when the services provided to the federal undertaking form the exclusive or principal part of the related work’s activities or when the services provided to the federal undertaking are performed by employees who form a functionally discrete unit that can be constitutionally characterized separately from the rest of the related operation. The plaintiff’s stevedoring activities formed a relatively minor part of its overall operations which were local in nature and the stevedoring operations were integrated with its other activities and did not form a functionally discrete unit.
Carriage of Passengers - Application of Provincial Laws
Croisières Charlevoix Inc. v. Quebec, 2012 QCCS 1646,
The appellant was a shipbuilder and tourist boat operator based in La Malbaie, Quebec, with offices in Quebec City and Saint-Siméon. It primarily provided tourist excursions for watching whales and marine mammals on the St. Lawrence River in Quebec. In each of 2005 and 2006, the appellant made one excursion between Quebec and Ontario. In 2007 and 2008, the appellant organized three interprovincial cruises. The appellant was found guilty and fined for having operated as a carrier of passengers by water without the permit required by ss. 36 and 74.1 of Quebec's Transport Act, R.S.Q., c. T-12, and sect. 1 of its Regulation respecting the transport of passengers by water, R.R.Q., c. T-12, r. 15. The appellant appealed to the Quebec Superior Court, arguing that its operations were within exclusive federal jurisdiction and that it was not bound by the provincial statute and regulations. The appellant also argued that its tourist excursions did not constitute "transport" within the meaning of Quebec's Transport Act. Quebec’s Transport Act applies to the "transport of persons... by... water from one place to another... by ship" . The appellant argued the Act did not apply because the tourists transported on the cruises concerned embarked and disembarked at the same "place".
Decision: Appeal dismissed and conviction upheld.
Held: The appellate Judge held that ss. 91(29) and 92(10)(a) and (b) of the Constitution Act, when read together, exclude marine transport operations carried on within the boundaries of a single province from the jurisdiction of Parliament. Where some operations of a marine carrier are carried on intraprovincially and others extraprovincially, the business becomes subject to federal legislation exclusively, but only if the extraprovincial operations are "regular and continuous” and not where such activities are merely "occasional or exceptional". The appellate Judge also rejected the appellant’s argument that the provincial Transport Act did not apply holding that the appellant’s interpretation was far too restrictive and one that would not coincide with the intention of the legislator. Moreover, the definition of “lieu” in Le Petit Robert dictionary (2000) was wide enough to include the site visited and the area travelled, as well as the points of embarkation and disembarkation.
Comment: Regrettably this decision is reported only in French. Therefore, this summary is based on a translation provided by Robert Wilkins of Borden Ladner Gervais, Montreal.
Brokerage contract – Jurisdiction – Canadian Maritime Law
Alcan Primary Metal v. Groupe Maritime Verreault Inc, 2011 FCA 319,
This case concerned whether the Federal Court had the jurisdiction to determine a dispute between the parties involving alleged breaches of a brokerage contract relating to tugs. The parties had entered into a contract whereby the plaintiff was to be paid a commission in the event that it found a tug or tugs that met the needs of the defendant. The plaintiff claimed it was owed commission under the contract and brought this action to recover the commission. The defendant responded by challenging the jurisdiction of the Federal Court. At first instance, the Motions Judge dismissed the motion finding that the contract was maritime in nature and fell within Canadian maritime law. The Federal Court of Appeal affirmed the Motions Judge. The Court did not accept that there was any distinction to be drawn between the purchase of a tug and brokerage services that enable the purchase. The Court held the two were inseparable.
Constitutional Law - Validity of Municipal Bylaws
Chalets St-Adolphe inc. v. St-Adolphe d'Howard (Municipalité de), 2011 QCCA 1491,
This case concerned the validity of a municipal bylaw which restricted the use of a municipal boat ramp and a lake to residents. The bylaw was challenged by a local businessman who had a small cottage rental business and used the municipal boat ramp to launch his customers’ boats. At first instance the validity of the bylaw was upheld, on the basis of the double aspect doctrine with the Trial Judge holding that the dominant aspect of the impugned bylaw was protection of the environment. On appeal, the Quebec Court of Appeal held that the pith and substance of impugned provisions encroached upon the basic, minimum and unassailable core of the exclusive jurisdiction of Parliament over navigation and shipping. (Note: Regrettably, this decision appears to be reported only in French and the author has only a limited understanding of the French language.)
Canadian Maritime Law - Application of Provincial Statutes - Occupational Health and Safety
Jim Pattison Ent. v. Workers' Compensation Board, 2011 BCCA 3,
The central issue in this case was whether and to what extent the British Columbia Occupational Health and Safety Regulation (“OHSR”) of the Workers Compensation Act applied to commercial fishing vessels. It was argued that the OHSR was constitutionally invalid or inapplicable on the grounds that the safety of ships and crew is a matter within the sole jurisdiction of Parliament under its navigation and shipping power or, alternatively, that fishing is a federal work or undertaking. At trial (reported at 2009 BCSC 88) the Trial Judge began by reviewing the history of occupational health and safety in British Columbia in relation to fishing and reviewed various federalprovincial agreements that had been entered into. The Trial Judge then turned to the constitutional issue beginning, predictably, with the recent Supreme Court of Canada decisions in Canadian Western Bank v. Alberta,  2 S.C.R. 3, 2007 SCC 22 and British Columbia
(Attorney General) v. Lafarge Canada Inc.,  2 S.C.R. 86, 2007 SCC 23. The Trial Judge noted that the doctrine of interjurisdictional immunity goes against the dominant tide of constitutional interpretation and should be applied with restraint. The Trial Judge further noted that the doctrine of interjurisdictional immunity does not apply except where the adverse impact of a law adopted by one level of government is such that the core competence of the other level of government (or the vital or essential part of an undertaking it duly constitutes) is placed in jeopardy. The Trial Judge then dealt with the pith and substance analysis and concluded that the pith and substance of the OHSR were the health and safety of workers which are matters within the legislative competence of the province. The Trial Judge then turned to the doctrine of paramountcy as there are many federal laws relating to the safety of ship and crew. The Trial Judge summarized the test as requiring the petitioners to establish either that: (a) it is impossible to comply with both laws; or (b) that to apply the provincial law would frustrate the purpose of the federal law. After reviewing the legislation, the Trial Judge concluded that there was considerable overlap and potential for confusion and that compliance with both regimes could be difficult and expensive, however, as it was not “impossible” to comply with both there was not operational incompatibility. The Trial Judge further found that the OHSR did not undermine the purpose of the federal statutes and therefore concluded that the doctrine of paramountcy was not operative. The Trial Judge then turned to the interjurisdictional immunity doctrine. The Trial Judge first considered whether fishing was afederal undertaking and held that it was not because the undertaking did not play any role in “connecting” British Columbia with any other province or country. The Trial Judge then considered whether the provincial law impaired or placed in jeopardy the core of federal competence over navigation and shipping and concluded that it did not.
Upon appeal, the British Columbia Court of Appeal began its analysis noting that the modern approach to Canadian federalism is “cooperative federalism”. It then turned to the pith and substance analysis and found the purpose and effect of the provincial legislation to be the
occupational health, safety and well-being of workers employed on fishing vessels, a matter of labour relations and, as such, coming within provincial jurisdiction over “property and civil rights”. The Court next considered whether the fishing operations at issue were a provincial or federal undertaking. The appellants argued that as the normal fishing activities of the concerned vessels were beyond the limits of the province their operations should be characterized as a federal undertaking. However, the Court found that the business of the appellants was exclusively intraprovincial and there was no operational connection to another jurisdiction. Accordingly, the Court held that the operational activities were a provincial and not a federal undertaking. Although not necessary, the Court did go on to consider the doctrines of interjurisdictional immunity and paramountcy but held that neither applied. The impugned provisions did not impair the core competence of federal jurisdiction over navigation and shipping and there was no evidence of operational conflict or frustration of the purpose of the federal legislation.
Federal Court Jurisdiction - Dispute Between Shareholders over Funds in Court
JP Morgan Chase Bank v. Mystras Maritime Corporation, 2010 FC 1053 ,
This matter concerned a dispute between two former shareholders and directors of the judgment creditor concerning who was entitled to the proceeds of an in rem action. The Court held that it was without jurisdiction to determine the dispute which was held not to be integrally connected to maritime matters.
Constitutional Law – Division of Powers – Municipal Bylaw
R. v. Latouche, 2010 ABPC 166,
In this case the applicants were charged with not wearing life jackets while floating on an inflatable raft down the Elbow River in Calgary contrary to a municipal bylaw. The applicants challenged the constitutional validity of the bylaw saying that the bylaw encroached on Parliament’s exclusive jurisdiction over navigation and shipping. It was conceded that Parliament had jurisdiction over navigation and shipping but was argued that the incidental application of local law was permissible. The Court found that the pith and substance of the impugned bylaw was the promotion of safety of Calgarians and that the bylaw did not impair an essential or vital element of a federal power over navigation and shipping. Further, the Court said there was no incompatibility between the bylaw and the federal legislation. Accordingly, the Court held the bylaw was valid. (Note: In the view of the author, this is a questionable decision. Even if there was no incompatibility between the federal regulations and local bylaw, the local bylaw still frustrates the purpose of the federal law (uniformity) and ought to attract the paramountcy doctrine.)
Constitutional Law - Application of Municipal by-Laws
Durham v. Todd, 2010 ONCJ 122,
In this matter the defendant boat owner was charged with trespass under the Ontario Trespass to Property Act and with infractions of various municipal by-laws. The charges all related to anchoring in Port Whitby Harbour which was a harbour designated under the Fisheries and Recreational Harbours Act. The harbour was administered by the municipality pursuant to an agreement with the Department of Fisheries. The accused defended the charges on the grounds that the province and the municipality had no constitutional jurisdiction. The Court, however, found that the agreement between the municipality and the Department of Fisheries gave the municipality the requisite authority and rendered nugatory any issue of interjurisdictional immunity. (Note: Has the learned Judge in this case confused an agreement for the administration of a harbour with a delegation of legislative authority?)
Constitutional Law - Boating Restriction Regulations - Right to Anchor - Charter of Rights
R v. Lewis, 2009 BCPC 386,
The issue in this case was the constitutional validity of the Boating Restrictions Regulations under the Canada Shipping Act. Specifically, the challenge was to restrictions imposed on anchoring in False Creek, Vancouver. The accused were charged with anchoring without a permit. The defence was that the Boating Restrictions Regulations was an attempt by the Federal Government to legislate in respect of property and civil rights, a provincial jurisdiction, and were contrary to the Charter of Rights. The Court first noted that there is a common law right to navigation which includes a right to anchor but said this was a right to anchor for a reasonable time, not permanently. The Court then considered the constitutional validity of the regulations which required a consideration of the pith and substance of the regulations having regard to both their purpose and effect. The Court had little difficulty in concluding the regulations were in pith and substance in relation to navigation and therefore valid. The Court next turned to the Charter of Rights. The argument was that the regulations were contrary to s. 7 of the Charter which provides that everyone has the right to life, liberty and security. Essentially, the accused argued that they needed to anchor in False Creek for reasons of safety and could not obtain anchorage elsewhere. The Court accepted that False Creek was a safe anchorage and that alternative moorage facilities were limited, however, the Court found that the accused anchored in False Creek for economic or lifestyle reasons, not for reasons of safety or shelter.
Meaning of Ship - Constitutional Law – Application of Provincial Statutes - Land use By-Law
The issue in this case was whether a municipal bylaw limiting the size and height of buildings applied to an oil-tank barge that had been converted to a two storey floating camp. The Defendant marina argued the bylaw was constitutionally invalid or inapplicable which turned, in part, on whether the floating camp was a ship. The marina had originally been given a temporary permit allowing it to use the floating camp as an office but the permit was conditional on the redevelopment of the marina. The redevelopment did not proceed and the marina was eventually asked to remove the floating camp. The evidence disclosed that the floating camp had electrical, water and telephone connections with the land. At first instance, the motions Judge held that the floating camp was not a ship (although he recognized that it might in the future be used as a ship) and held that the bylaw applied. The Judge held that the paramountcy doctrine did not invalidate the bylaw because there was no conflicting federal legislation. The Judge further held that the interjurisdictional immunity doctrine did not invalidate the bylaw because land-use control is not “absolutely indispensable or necessary” to federal jurisdiction over shipping and navigation. The bylaw incidentally affected the federal power over navigation and shipping but did not impair or paralyze the core of the federal power. In result, the bylaw was valid. The marina appealed.
On appeal to the British Columbia Court of Appeal, two separate sets of Reasons were given. The majority agreed with the motions Judge that the floating camp in its present configuration and use was not a ship or vessel or boat. In fact, the majority suggested that once it was converted from an oil-tank barge to a floating camp it was no longer designed to be used in navigation and no longer a ship. The majority then declined to consider the constitutional issues saying that because the floating camp was not a ship the constitutional issue did not arise. The minority did consider the constitutional issues and agreed with the motions Judge that the doctrine of paramountcy did not apply. The minority held that paramountcy requires a direct collision between federal and provincial legislation and there was no such collision in this case. The minority also agreed that the interjurisdictional immunity doctrine did not apply, noting that the key consideration in the case was the “use” to which the floating camp was put. If an object is being used as a ship, that use may engage the federal power over navigation. If an object is not being used as a ship, the federal power over navigation is not engaged.
Mortgages - Priorities - Application of Provincial Statutes
Royal Bank v. 1132959 Ontario Ltd., 2008 CanLii 40231,
This was an application by the Appellant bank (the “Bank”) for possession of a yacht pursuant to rights allegedly acquired through a general security interest. The application was opposed by the Respondent, who was registered as the owner of the yacht under the Canada Shipping Act (“CSA”), on the grounds that the bank’s interest was not registered under the CSA. The background facts are important. The Bank entered into a general security agreement dated 9 March 2001 with a numbered company (“Numbered Co.”) and registered its interest under the Ontario Personal Property Security Act (“PPSA”). On 17 April 2004 the Numbered Co. acquired title to the yacht and, although it is not entirely clear from the judgment, it appears that the yacht was registered under the CSA at that time. On 13 February 2008 the sole shareholder of the Numbered Co. made an assignment in bankruptcy. On 12 March 2008 the Numbered Co. entered into a security agreement with the Respondent, the brother of the company’s sole shareholder. The security agreement was allegedly to secure a prior debt owed to the Respondent. This security agreement was never registered under the PPSA. On 20 March 2008 the Respondent was given a marine mortgage over the yacht as further security for the debt allegedly owed between the brothers. This marine mortgage was registered under the CSA but not the PPSA. On 10 April 2008 the marine mortgage was discharged and the yacht was transferred to the Respondent in full payment of the debt allegedly owed. On these facts the Court held that there was no doubt that on 17 April 2004 the Bank acquired a perfected security interest in the yacht pursuant to the after acquired property clause in the security agreement. The Court further held that the Bank’s interest had priority over any interest the Respondent had pursuant to the agreement of 12 March 2008 since that agreement was not registered. However, the Court recognized that the real issue was whether a registered interest under the CSA could take priority over a prior interest registered under the PPSA. The Respondent alleged that the CSA provided a complete code and registry of all interests in vessels. The Court disagreed and held that the CSA created two types of registers; mandatory and voluntary. Pleasure craft are not required to be registered and fall within the voluntary registry. Therefore, the Court held the Bank was not required to register its interest under the CSA registry. In result, the Court held the Bank’s interest had priority. (Note: This has been a vexing issue for years and has the potential to cause serious difficulties for both lenders and borrowers. Although the equities of this case certainly favoured the bank, the Court’s analysis does not withstand any serious scrutiny. The distinction between mandatory and voluntary registration is no more than descriptive and does not provide a legal basis for the decision. Also, the mandatory - voluntary distinction is probably not accurate in respect of a mortgagee. The prevailing view is that if the vessel is registered (whether voluntarily or mandatorily) then any mortgage or security interest must be registered. It is submitted that the Court should have done a proper constitutional analysis taking into account the dual aspect doctrine, interjurisdictional immunity and paramountcy. Also, one cannot help but think that if, after the constitutional analysis, Canadian maritime law applied, then equitable considerations would have played an important part in any ranking.)
Constitutional law- Application of Provincial Statutes - Occupational Health and Safety
R. v. Mersey Seafoods Ltd., 2008 NSCA 67,
The accused in this case was a corporation that operated various factory fishing vessels. The accused was charged with offences under the Nova Scotia Occupational Health and Safety Act (“OHSA”). The charges were dismissed in the lower courts on grounds that the safety and operation of vessels was within the exclusive jurisdiction of the Federal Government and the OHSA was inapplicable. On appeal to the Nova Scotia Court of Appeal, the Court first considered whether, and had little difficulty in concluding that, the pith and substance of the OHSA was within a head of power granted to the provinces. The Court next considered whether the OHSA infringed Parliament’s constitutional powers in relation to navigation and shipping. The Court referred to and relied extensively on the Supreme Court of Canada’s decisions in Canadian Western Bank v. Alberta,  2 S.C.R. 3, 2007 SCC 22 and British Columbia (Attorney General) v. Lafarge Canada Inc.,  2 S.C.R. 86, 2007 SCC 23. The Court noted that under the revised test established in those cases a provincial statute will only attract federal interjurisdictional immunity when the statute “impairs” (rather than merely “affects”) either (1) the “core”of a federal competence or (2) a vital or essential part of a federal undertaking. The Court held that any impact of the OHSA on navigation and shipping was merely incidental. The Court therefore held that the interjurisdictional immunity doctrine did not apply to oust the application of the OHSA. The Court next considered the paramountcy doctrine and noted that for the doctrine to apply there must be both federal and provincial laws and that it must be impossible to comply with both laws or that to apply the provincial law would frustrate the federal law. The Court found that the only applicable federal law was the Canada Shipping Act but held that there was no “operational conflict” between the OHSA and the Canada Shipping Act and the OHSA did not frustrate the purpose of the Canada Shipping Act. Accordingly, the Court confirmed that the OHSA applied to vessels operated by the accused.
Personal Injury - Athens Convention - Limitation Period - No Power to Extend - Applicable Law
Russell et al. v. MacKay, 2007 NBCA 55,
The Plaintiff was a passenger on a whale watching vessel and was injured at sea when she tripped over a cooler while leaving the washroom on the vessel. The accident occurred on 3 August 2003 but action was not commenced until 20 July 2006. The Defendants brought this motion to dismiss the Plaintiff's claim on the grounds that it was statute-barred by the two year limitation period in the Athens Convention as enacted by the Marine Liability Act. The Plaintiff argued that the applicable limitation period was six years as provided the New Brunswick Limitation of Actions Act. Alternatively, the Plaintiff argued that the Court had the discretion to suspend or interrupt the running of the limitation period. The trial Judge concluded that the Plaintiff's claim was in pith and substance in relation to navigation and shipping and governed by federal Canadian maritime law and not the provincial limitations statute. The trial Judge then considered whether the court had a discretion to suspend or interrupt the running of the limitation period. The trial Judge referred to art. 16(3) of the Athens Convention which provides that “The law of the court seized of the case shall govern the grounds of suspension and interruption of limitation periods...”. The trial Judge held that the phrase “law of the court seized of the case” referred to Canadian maritime law and not the law of New Brunswick. The trial Judge noted that a three part test had been established to determine when an extension of a limitation period should be made under s. 572(3) of the Canada Shipping Act and that this was the appropriate test to apply. The test was: 1. did the Plaintiff have a valid prima facie case; 2. was the Defendant aware of the claim and would it suffer prejudice by an extension, other than the loss of the limitation defence; and 3. having regard to all the circumstances, was it in the best interest of justice that time be extended. Applying this test the trial Judge held it was in the best interests of justice that the limitation period be interrupted or extended.
On appeal to the New Brunswick Court of Appeal, the Court of Appeal agreed with the trial Judge that the case was to be governed by federal maritime law and further agreed that the limitation period was to be found in the Athens Convention but disagreed with respect to the powers of the court to suspend or extend the limitation period. Specifically, the Court of Appeal said that the trial Judge erred in relying upon and applying the test flowing from the old s. 572(3) of the Canada Shipping Act which dealt with collisions between ships (as does its successor in s.23 of the Marine Liability Act ) not injuries to passengers. The Court said that Art. 16 of the Athens Convention did not include any power to extend the limitation period and held that superior courts do not have inherent powers to extend limitation periods. The Court of Appeal next considered the meaning of Art. 16(3) and noted that the reference to the law of the court seized of the case did not imply such law would necessarily provide grounds for suspension or interruption. The Court held that there was no federal legislation that would provide grounds for suspension or interruption. Finally, the Court considered whether the law should be reformed to include a power to suspend or interrupt a limitation period and suggested, without deciding, that 1) waiver; (2) estoppel; (3) absence from the jurisdiction; (4) infancy; and (5) mental incompetency might be grounds. However, as the evidentiary record supported none of these grounds, the matter was not decided.
Constitutional Law – Application of Provincial Statutes - Harbours - Municipal By-Law
British Columbia (Attorney General) v. Lafarge Canada Inc., 2007 SCC 23,
The issue in this case was whether the Vancouver Port Authority was required to obtain a City development permit to build a ship unloading facility on port lands. The Supreme Court of Canada noted that the development of waterfront lands could come under either federal or provincial jurisdiction but applied the doctrine of paramountcy and held that the City bylaw was not applicable. In reaching this conclusion the Court considered and rejected the doctrine of interjurisdictional immunity. The Court said the doctrine of interjurisdictional immunity should generally not be applied where the subject matter has a double aspect and both the federal and provincial governments have a compelling interest. Further, the Court said the interjurisdictional immunity doctrine does not apply to every element of a federal undertaking but is restricted to the “essential and vital elements” of the undertaking. Here, the land use controls in the Canada Marine Act were not a core or vital element of the federal power over navigation and shipping and therefore, the interjurisdictional immunity doctrine did not prevent the province and City from legislating. However, the Supreme Court went on to find that the preconditions for the application of the paramountcy doctrine were met. Those preconditions are: 1. valid and applicable federal law; 2. valid and applicable provincial law; and, 3. these valid laws are incapable of simultaneous enforcement. (Note: In separate reasons Justice Bastarache reached the same conclusion as the majority but did so solely on the basis of the interjurisdictional immunity doctrine.)
Constitutional law- Application of Provincial Statutes - Validity of Local Bylaw Prohibiting Mooring
Ramara (Township) v. Guettler, 2007 CanLII 16453,
The Defendant argued that a municipal bylaw prohibiting mooring in any “canal, waterway or slip” owned by the municipality was constitutionally invalid. In very short reasons the Court held that as the municipality owned the lands above and below the water of the canal it had the power to legislate. The Court noted that the federal Parliament also had the power to legislate and this was a straightforward case of overlapping jurisdiction.
Enforcement of Foreign Judgements – Proper Test – Attornment – Application of Provincial Statutes
Morgan v. Guimond Boats Ltd., 2006 FCA 401,
In this matter the Plaintiff, a resident of Hawaii, commenced proceedings against the Defendant, a New Brunswick company, in Hawaii in relation to a contract for the design, manufacture and sale of a boat. The Defendant unsuccessfully contested the jurisdiction of the Hawaiian courts, filed a Statement of Defence to the action and participated in a pre-trial conference before withdrawing from the action. The Plaintiff subsequently obtained a default judgment against the Defendant and then brought this action and motion for summary judgement to enforce of the U.S. judgment. The Defendant contested the motion on the ground, inter alia, that the U.S. Court was without jurisdiction. At first instance, the motions Judge held that the appropriate test was whether there was a “real and substantial connection” with the foreign jurisdiction and noted that a fleeting or relatively unimportant connection will not be enough. The motions Judge further held that the connection with Hawaii was such a fleeting or unimportant connection given that the preliminary contract negotiations between the parties, the execution of the work, the delivery of the boat and the payment for the boat all occurred in New Brunswick and the contract was governed by the law of New Brunswick. The Plaintiff's main argument was that the Defendant had attorned to the jurisdiction of the Hawaiian courts. On this issue the motions Judge said that the law of attornment was in a state of flux and suggested that attornment could only bolster an otherwise real and substantial connection. In result, the motion for summary judgment was dismissed. On appeal to the Federal Court of Appeal, however, the Court of Appeal held that attornment to a foreign court was not simply a factor to take into account in determining whether there was a real and substantial connection with the foreign court but was determinative. The Court of Appeal further held that the Defendant had attorned to the Hawaiian courts by filing a defence and participating in settlement conferences. Accordingly, the Court of Appeal allowed the appeal and recognized the foreign judgment. (A noteworthy issue dealt with by the motions Judge but not addressed in the Court of Appeal was whether the Foreign Judgments Act of New Brunswick had any application. The motions Judge held that the statute, being a provincial statute, can have no application to Canadian maritime law, even in the absence of applicable federal legislation.)
Jurisdiction – Personal Injury During Boat Trailering - Limitation of Liability
Isen v. Simms, 2006 SCC 41,
The Defendant was injured when a bungee cord that was being used to secure the engine cover of a small pleasure boat slipped from the hands of the Plaintiff shipowner and struck the Defendant in the eye. At the time of the incident the pleasure boat had just been removed from the lake and was on a trailer being prepared for road transportation. The Defendant commenced proceedings against the Plaintiff in the Ontario Supreme Court for damages in excess of $2,000,000. The Plaintiff commenced this action in the Federal Court to limit his liability to $1,000,000 and brought this application under Rule 220(1)(c) of the Federal Court Rules to determine a question of law, namely: whether the facts and circumstances constituted “claims arising on any distinct occasion involving a ship with a tonnage of less than 300 tons” pursuant to section 577(1) of the Canada Shipping Act. The Defendant contested both the jurisdiction of the Federal Court and the substantive relief sought. The Federal Court and the Federal Court of Appeal both held that the claim was a maritime law claim that was subject to the limitation of liability. On appeal to the Supreme Court of Canada, the Supreme Court held that the matter was governed by provincial law, that the Federal Court was without jurisdiction and that the limitation was not applicable. In reaching this conclusion Rothstein J. noted that Parliament did not have jurisdiction over pleasure craft per se and that the Court must look at the allegedly negligent acts “and determine whether that activity is integrally connected to the act of navigating the pleasurecraft on Canadian waterways such that it is practically necessary for Parliament to have jurisdiction over the matter”. Although he agreed with the Federal Court of Appeal that launching of pleasurecraft and their retrieval from the water would be within Parliament's jurisdiction over navigation, he did not agree that the securing of the engine cover with a bungee cord was part of the retrieval process. He stated that the securing of the engine cover had nothing to do with navigation and everything to do with preparing the boat to be transported on provincial highways.
Constitutional Law – Occupiers Liability Act – Personal Injury on Wharf
Jackson v. Fisheries and Oceans Canada, 2006 BCSC 1492,
This case concerned the constitutional applicability of the Occupiers Liability Act of British Columbia to a slip and fall that occurred while the Plaintiff was walking down a ramp from the shore to a wharf administered by Fisheries and Oceans Canada. The Defendants argued that the Occupiers Liability Act had no application as the matter was to be governed by Canadian Maritime Law. The Judge considered the decision of the Supreme Court of Canada in Ordon v Grail,  3 SCR 437 but held that a provincial statute could incidentally affect matters coming within the exclusive jurisdiction of Parliament. The Judge noted that the Defendants needed to show that the subject matter of the Plaintiff's claim “is so integrally connected to maritime matters as to be legitimate Canadian Maritime law within federal competence” and held that they had failed to do this. It is noteworthy that the Judge considered the case of Peters v ABC Boat Charters,  B.C.J. No. 2345, where it was held that the Occupiers Liability Act applied to a slip and fall on board a ship, and was asked to not follow it on the grounds that it had been implicitly overruled by Ordon v Grail. The trial Judge held, however, that Peters v ABC Boat Charters was still good law.
Constitutional Law – Division of Powers – Log Salvage - Forest Act – Salvage Convention
Early Recovered Resources Inc. v. British Columbia, 2005 FC 995,
The issue in this case was the constitutional validity or applicability of: first, Part 9 of the Forest Act of British Columbia and the associated Log Salvage Regulation passed pursuant thereto; and second, the Canada Shipping Act and the International Convention on Salvage (the “Salvage Convention”). Part 9 of the Forest Act and the Log Salvage Regulation regulate, inter alia, the recovery of logs adrift within a prescribed geographic area. The Plaintiff argued that the Forest Act and Log Salvage Regulation were invalid regulation by the province of “marine salvage”, a core element of exclusive federal jurisdiction over navigation and shipping. The Judge reviewed relevant authorities and held that the appropriate approach to the analysis was to employ a “pith and substance” analysis to determine: 1. whether the impugned provisions intrude on a federal head of power and to what extent; 2. If they do intrude, are they nevertheless part of a valid provincial legislative scheme; and, 3. If they are part of a valid provincial scheme, are they sufficiently integrated with that scheme. The Judge specifically rejected the suggestion that the appropriate analysis was to apply the “inter-jurisdictional immunity” test set out in Ordon v Grail,  3 SCR 437. He held that the “inter-jurisdictional immunity” doctrine need not be considered if the pith and substance of the impugned provision does not intrude into a power of the other government. He then reviewed the provisions of Part 9 of the Forest Act and the associated regulations and noted that Part 9 provided a framework for dealing with forestry resources that had become drift timber and needed to be recovered and salvaged to realize its value. He held that these provisions had nothing to do with navigation and shipping and that any connection with navigation and shipping was tenuous. He further held that Part 9 of the Forest Act and the regulations were an integral part of a valid resource management scheme and even if they intruded on the federal navigation and shipping power such intrusion was merely incidental and did not affect the constitutional validity of the legislation. The Judge then considered the constitutional validity of the Canada Shipping Act and the Salvage Convention insofar as they purported to regulate the recovery and sale of logs and the distribution of the proceeds of sale. He addressed the issue of whether logs were “property” within the meaning of the convention and held that they were. He then declared that the Canada Shipping Act and the Salvage Convention were invalid insofar as they purported to regulate the recovery and sale of logs and the distribution of the proceeds of sale. The reason given for this declaration was to remain consistent with his previous holding that the Forest Act was valid provincial legislation.
Federal Court Jurisdiction – Enforcement of Foreign Arbitration Awards – Piercing Corp
Trans-Pacific Shipping Co. v. Atlantic & Orient Trust Co. Ltd. et al., 2005 FC 311,
In this matter the Plaintiff shipowner had obtained an arbitration award against one of the Defendants in London for breach of a charterparty. The Plaintiff subsequently registered the award in the Federal Court and then brought this action against the charterer and against various related companies and the individual alleged to have effective control of all of the Defendants. The relief claimed by the Plaintiff was a declaration that the debts of the charterer were the debts of all of the Defendants and a declaration that the assets of one of the Defendants were the assets of the charterer. The Defendants brought this application challenging the jurisdiction of the Federal Court arguing that the declarations sought were matters of Property and Civil Rights and therefore within provincial jurisdiction. The Prothonotary, however, held that enforcement of foreign arbitral awards had long been considered within Federal Court jurisdiction. Further, the Federal Court had the implied jurisdiction necessary to enforce its judgments, including the recognition of the foreign arbitral award. The Prothonotary next considered the issue of the piercing of the corporate veil and concluded that it was arguable that the various Defendants were for many purposes one and the same entity and thus should not be entitled to the protection of incorporation as separate entities. The Prothonotary expressly did not decide this issue but merely decided that it was not plain and obvious the Plaintiff could not succeed. (Note: This case should be compared with that of the British Columbia Court of Appeal in Pan Liberty Navigation Co. Ltd. v World Link (HK) Resources Ltd., 2005 BCCA 206, and TMR Energy Limited v. State Property Fund of Ukraine et al., 2005 FCA 28, both of which are summarized below.)
Federal Court Jurisdiction – Scope of Canadian Maritime Law
Kusugak v. Northern Transportation Co. et al., 2004 FC 1696,
In this case the Plaintiffs were the dependants of crew members of the “Avatuq” which sank on 25 August 2002 while en route from Churchill, Manitoba to Arviat, Nunavut. All of the crew members perished. The Defendants included the Commissioner of Nunavut, the Government of Nunavut and some of their employees (the “Nunavut Defendants”). The allegations against the Nunavut Defendants were that they failed to have in place or implement proper procedures in relation to the search and rescue operation. The Nunavut Defendants brought this application to strike the Statement of Claim against them on the grounds that the Federal Court was without jurisdiction. The Plaintiff, on the other hand, argued that the claim was within the maritime jurisdiction of the court. The motions Judge reviewed the applicable authorities, in particular Dreifelds v Burton, (1998) 38 OR (3d) 393, and noted that a matter will only fall to be determined by Canadian Maritime Law if it is sufficiently connected with navigation and shipping. She held that the claims had nothing to do with navigation and shipping and were grounded solely in common law principles of negligence. Accordingly, she concluded that the Court was without jurisdiction. She further held that the Nunavut Defendants were public authorities over whom the Court had no jurisdiction.
Canadian Maritime Law – Workers Compensation
Laboucane v. Brooks et al., 2003 BCSC 1247,
The issue in this important summary trial application was whether section 10(1) of the Workers Compensation Act of British Columbia was valid provincial law or whether it was ultra vires the province as infringing upon Federal jurisdiction over navigation and shipping. The underlying facts were that the Plaintiff was injured while performing a welding job on the Defendant's fishing vessel. The Plaintiff commenced these proceedings against the Defendant alleging his injuries were caused by the Defendant's negligence. The main defence to the action was that both Plaintiff and Defendant were “workers” within the meaning of the Workers Compensation Act, that the accident arose out of and during the course of employment and that s. 10(1) of that Act prohibited the Plaintiff from commencing or continuing the action. The Court reviewed many of the leading constitutional authorities and concluded that the proper approach was to first determine the “pith and substance” of the enactment and then to determine whether the pith and substance of the enactment relates to one of the heads of power granted to the enacting legislature. Further, the Court noted that if the pith and substance falls within the class of subjects assigned to the Province then the legislation will be valid notwithstanding that it may have incidental or ancillary affects in areas of Federal jurisdiction. The Court rejected the submissions of the Plaintiff that the appropriate analysis was to assume the constitutional validity of the provision and to commence with the tests set out in Ordon v Grail,  3 SCR 437. Applying the pith and substance approach the Court had little difficulty in concluding that the pith and substance of s. 10(1) of the Workers Compensation Act was solely within the exclusive jurisdiction of the Province in relation to Property and Civil Rights. The Court further held that the fact that the accident took place on a vessel was of no relevance and that the subject matter was not integrally connected with maritime matters and did not fall to be resolved under Canadian Maritime Law. In fact, the Court found there was no encroachment upon the Federal power over navigation and shipping. (Editors Note: It is arguably difficult to reconcile the approach in this case with the four part test set out in Ordon v Grail,  3 SCR 437. Additionally, it is difficult to reconcile the finding in this case that there was no encroachment on Federal jurisdiction when the Supreme Court of Canada in Ordon v Grail held that Maritime negligence law is a core element of Federal jurisdiction and that it was constitutionally impermissible for a provincial statute to regulate this area.)
Constitutional Law - Division of Powers - s. 92(10) of the Constitution Acts 1867-1992
Island Tug & Barge Ltd. v. Communication, Energy and Paperworkers Union, 2003 BCCA 247,
The Respondent union had set up a “water” picket attempting to prevent vessels from berthing at the Petro-Canada terminal in Vancouver where the union was on strike. The Appellant tug and barge operators sought an injunction from the BC Supreme Court to restrict or limit the picketing. The BC Supreme Court held that it did not have jurisdiction as the matter fell within provincial jurisdiction and the provincial Labour Relations Code removed the courts’ jurisdiction to enjoin picketing. The decision was affirmed on appeal on the basis that the Appellant’s business was conducted wholly within the province and s. 92(10) of the Constitution Acts 1867-1992 therefore governed. That section assigns to provincial jurisdiction local works except, inter alia, shipping lines connecting the province to other provinces or beyond the limits of the province. By implication, therefore, a shipping line operated wholly within the province was within provincial jurisdiction and the BC Labour Relations Code applied.
Constitutional Law – Distribution of Powers – Navigation and Shipping – Salvage
Gulf Log Salvage Co-Operative Assoc. v. Early Recovered Resources, 2003 FCA 35,
This case concerned the constitutional validity of the Log Salvage Regulations of British Columbia. An application for summary judgment was brought by the Province of British Columbia for a declaration that the Regulations were valid. The motions Judge dismissed that application leaving no doubt that he considered the Regulations ultra vires (2002 FCT 184). The Province of British Columbia appealed to the Federal Court of Appeal but the Court of Appeal held that it was not appropriate to rule on the constitutional validity of a statute except upon an adequate record and that there was not an adequate record before the Court.
Provincial Court Jurisdiction – Steamship Inspectors - Offshore Accord
Secunda Marine Services Limited v. The Queen et al., 2003 NSSC 2,
In this matter the Plaintiff shipowner had obtained an arbitration award against one of the Defendants in London for breach of a charterparty. The Plaintiff subsequently registered the award in the Federal Court and then brought this action against the charterer and against various related companies and the individual alleged to have effective control of all of the Defendants. The relief claimed by the Plaintiff was a declaration that the debts of the charterer were the debts of all of the Defendants and a declaration that the assets of one of the Defendants were the assets of the charterer. The Defendants brought this application challenging the jurisdiction of the Federal Court arguing that the declarations sought were matters of Property and Civil Rights and therefore within provincial jurisdiction. The Prothonotary, however, held that enforcement of foreign arbitral awards had long been considered within Federal Court jurisdiction. Further, the Federal Court had the implied jurisdiction necessary to enforce its judgements, including the recognition of the foreign arbitral award. The Prothonotary next considered the issue of the piercing of the corporate veil and concluded that it was arguable that the various Defendants were for many purposes one and the same entity and thus should not be entitled to the protection of incorporation as separate entities. The Prothonotary expressly did not decide this issue but merely decided that it was not plain and obvious the Plaintiff could not succeed. (Note: This case should be compared with that of the British Columbia Court of Appeal in Pan Liberty Navigation Co. Ltd. v World Link (HK) Resources Ltd., 2005 BCCA 206 (summary), and TMR Energy Limited v. State Property Fund of Ukraine et al., 2005 FCA 28 (summary))
Jurisdiction - Rail Carriage
Herrenknecht Tunnelling Systems USA Inc. v. Canadian Pacific Railway, 2002 FCT 1089,
The issue in this case was whether the Federal Court had jurisdiction over a claim for damage caused to cargo during the course of carriage from Quebec to Tacoma, Washington. The cargo was damaged when the train derailed in Ontario. The Judge identified the test as being: 1. There must be a statutory grant of jurisdiction by the federal parliament; 2. There must be an existing body of federal law which is essential to the disposition of the case and which nourishes the statutory grant of jurisdiction; and, 3. The law on which the case is based must a “law of Canada” as the phrase is used in s. 101 of the Constitution Act. The Judge found the statutory grant of jurisdiction in s.23(c) of the Federal Court Act which vests the court with jurisdiction in all cases where a claim for relief or a remedy is sought in relation to works and undertakings connecting one province with any other province. The second branch of the test was met by sections 113 and 116 of the Canada Transportation Act which oblige railways to receive, carry and deliver cargo and which provide a right of action to any person against a railway for neglect or refusal to fulfill its service obligations. Finally, the Judge held that the Canada Transportation Act was a “law of Canada” within the meaning of s. 101 of the Constitution Act and hence satisfied the third branch of the test.
Arrest - Release - Security - Arbitration - Jurisdiction - Meaning of Ship
Cyber Sea Technologies Inc. v. Underwater Harvester, 2002 FCT 794,
In this matter a submersible was arrested and the Defendant brought an application, inter alia, to release the submersible without bail or, in the alternative, to post security. The grounds for the Defendant’s application were that the action was without merit and that the dispute was subject to arbitration. The Prothonotary held that it is only in exceptional circumstances that a vessel will be released from arrest without bail. Moreover, the fact that the dispute was subject to arbitration did not disentitle the Plaintiff to security. The fact of arbitration was, however, relevant to the amount of security. In setting the amount of the security the Prothonotary took into account that each party was required to pay its own costs of the arbitration.
Another issue was whether a submersible device used to cut trees in a flooded but unlogged reservoir was a ship so as to attract the admiralty jurisdiction of the Federal Court. The Prothonotary referred to the definition of ship in the Federal Court Act, being, “any vessel or craft designed, used or capable of being used solely or partly for navigation, without regard to the method or lack of propulsion...”. The Prothonotary noted that this was a very general and broad definition that seemed to encompass anything on or in the water and ultimately concluded that the submersible was, in all probability, a ship and that the Federal Court therefore had jurisdiction.
Application of Provincial Statutes
R v. Kupchanko, 2002 BCCA 63,
This case raised the issue of the constitutional validity of an Order made pursuant to section 7(4) of the Wildlife Act of British Columbia prohibiting motorized vessels in excess of 10 horsepower from navigating part of the Columbia River. The accused argued that the Order was an invalid infringement on Federal Government jurisdiction over navigation and shipping. At first instance, the Provincial Court agreed and the accused was acquitted. On appeal, the summary conviction appeal judge held that the impugned order was aimed at promoting the dominant purpose of the Act to which it was a part. That purpose was to protect wildlife and their habitat, a matter clearly within the constitutional jurisdiction of the provinces. The judge held that the fact that the Federal Government through the Canada Shipping Act had also legislated restrictions on boating similar to those in the impugned Order did not render the Order invalid as the Federal Government had not legislated specifically with respect to that part of the Columbia River the Order regulated. The summary conviction appeal judge held that there would have to be an express contradiction between federal legislation and provincial legislation before otherwise valid provincial legislation could be declared invalid. In reaching this decision the summary conviction appeal judge relied in large measure upon dicta of the British Columbia Court of Appeal in Windermere Watersports Inc. v Invermere, (1989) 37 BCLR (2d) 112. On further appeal the Court of Appeal of British Columbia reconsidered the Windermere case in light of recent judgments of the Supreme Court of Canada which were recognized to significantly narrow the scope for the application of provincial laws to maritime matters. The Court of Appeal affirmed the result in the Windermere case but noted that the holding therein that the province could enact legislation affecting a matter of shipping and navigation was incorrect. Accordingly, the Court of Appeal allowed the appeal and held that the Order under the Wildlife Act was inapplicable to conveyances operating in navigable waters.
Jurisdiction - Fisheries - Agency
Radil Bros. Fishing Co. Ltd. v. Her Majesty the Queen et al., 2001 FCA 317,
The facts of this case are quite complicated involving licence swaps, fishing quotas and catch history. One of the issues in the case was whether the Federal Court had jurisdiction to entertain a claim arising out of an agreement of purchase and sale of a fishing licence. The Federal Court of Appeal concluded that such a claim did not fall under section 91(10) of the Constitution Act (navigation and shipping) as it was more specifically dealt with under section 91(12) (Sea Coast and Inland Fisheries). The Federal Court of Appeal also extensively reviewed the jurisprudence in relation to the definition of Canadian Maritime Law and concluded that Canadian Maritime Law does not include a claim arising out of an agreement to purchase a fishing licence or to matters arising out of a breach of an agency contract entered into for the purpose of purchasing a fishing licence. The Court of Appeal noted that agency claims cannot be entertained under the court’s admiralty jurisdiction “ unless the true essence of the contract relied upon is maritime”.
Stay of Proceedings - Insurance - Jurisdiction - Marine - Insurance - Brokers
Royal & Sun Alliance v. The “Renegade III”, 2001 FCT 1050,
This was an application for a stay of proceedings. The applicant was the owner of the Defendant yacht which had been damaged during the 2000 Victoria-Maui race. The applicant made a claim under his insurance policy for approximately $122,000 which was paid except for the sum of approximately $12,000. Subsequent to the payment the underwriters learned of circumstances which might void the policy and advised the applicant of this. On the same day the applicant commenced proceedings in the British Columbia Supreme Court for payment of the $12,000 he alleged was owing under the policy. Underwriters later did purport to void the policy for material non-disclosure and commenced in rem and in personam proceedings in the Federal Court claiming the return of the moneys paid. The applicant then brought this motion to stay the Federal Court proceedings. The application for a stay was denied. The Prothonotary noted that the Court would grant a stay only in the clearest of cases. The onus was on the applicant to prove (1) the continuation of the action would cause prejudice or injustice, not merely inconvenience or additional expense and (2) the stay would not be unjust to the Plaintiff. The Prothonotary held that although the British Columbia Supreme Court was a convenient forum it was not clearly the more appropriate forum. The Prothonotary noted that if underwriters were forced to bring their claim in the British Columbia Supreme Court they could not bring an in rem action by way of counterclaim and would have to start new proceedings and arrest the vessel for a second time. Further, the Prothonotary noted, without deciding, that there might be an issue as to whether the British Columbia Supreme Court had in rem jurisdiction. The Prothonotary concluded that there was no real prejudice or injustice to the applicant and that to allow the stay would deprive the underwriter of a legitimate juridical advantage. It is noteworthy that during the course of his reasons the Prothonotary considered whether a claim by the assured against his broker could be properly brought in the Federal Court. The Prothonotary seemed to suggest that Canadian maritime law had developed to the point where claims against brokers in a marine insurance context might be within the jurisdiction of the Federal Court.
Standing to Sue - Collisions - Insurance - Subrogation
Porto Seguro Companhia De Seguros Gerais v. The “Federal Danube” et al., 2001 CanLII 22115 (FC),
This was the re-trial of an action that had been previously dismissed by the Federal Court Trial Division in a judgment reported at  82 F.T.R. 127. That judgment was ultimately overturned by the Supreme Court of Canada and a new trial ordered on the grounds that the Trial Judge erred in refusing to hear three expert witnesses because assessors had been appointed by the court (see  3 S.C.R. 1278).
The Plaintiff was the cargo underwriter who had indemnified the cargo owners for damages suffered as a result of a collision in the St. Lawrence Seaway between the “Beograd” and the “Federal Danube”. The Plaintiff argued that the “Federal Danube” was wholly at fault for the collision and liable for the damage to the cargo in the principal amount of $4.4 million. There were two issues in the case; the standing of the Plaintiff to bring the action in its own name and the liability for the collision. On the first issue, the Defendant argued that under Canadian maritime law the Plaintiff ought to have commenced the action in the name of the cargo owners. The Court, however, held that the matter was governed either by the law of Brazil (where the insurance contract was made) or the law of Quebec and that in either case the insurers became subrogated to the rights of their insured upon payment and were entitled to bring the action in their own name. With respect to the second issue, the liability for the collision, the Court held that the “Beograd” was wholly at fault for the collision. The faults found against the “Beograd” included: navigating through the anchorage area rather than in the navigation channel; navigating at an unsafe speed; and, failing to keep out of the way of an anchored vessel. In reaching the conclusion that the “Beograd” was wholly at fault the Court noted that where a vessel underway strikes a vessel at anchor the underway vessel is prima facie at fault unless it is proven the accident could not have been avoided by the exercise of ordinary skill. In the result, the Plaintiff’s action was dismissed.
Jurisdiction - Claims against Crew Members - Inducing Breach of Contract
Ruby Trading S.A. v. Parsons et al.,  2 FC 174,
This matter concerned the jurisdiction of the Federal Court to entertain an action by a foreign ship owner against foreign crew members for breach of contract of employment and against a Canadian union for inducing breach of contract. While the "Japan Rainbow II" was loading a cargo of grain wage demands were made by the Defendants which were not satisfied by the Plaintiff. A strike sign was posted on the ship which resulted in the cessation of the loading activities. The Plaintiff then commenced this proceeding and obtained an injunction restraining the picketing for 14 days. The order granting the injunction was appealed but as the loading was completed during the time the injunction was in effect the issue of the appropriateness of the injunction was moot and the Court of Appeal declined to hear argument on this point. The Court of Appeal did, however, agree to adjudicate the issue of whether the Federal Court had jurisdiction to hear the claim of the Plaintiff. The Defendant argued that it did not have jurisdiction as the claims were in personaum and not in rem, did not fall within the maritime jurisdiction of the court and jurisdiction was specifically assigned by the Canada Labour Code to the Canada Industrial Relations Board. The Plaintiff argued that the claims fell within the court’s admiralty jurisdiction.
The Court of Appeal reviewed the authorities and reiterated that the test for jurisdiction was threefold: (1) there must be a statutory grant of jurisdiction by Parliament; (2) there must be an existing body of federal law essential to the disposition of the case that nourishes the grant of jurisdiction; and (3) the law on which the case is based must be a "law of Canada" as that phrase is used in s. 101 of the Constitution Act. The Court of Appeal held that all three branches of this test had been met. The statutory grant of jurisdiction was found in s. 22 of the Federal Court Act and the nourishing law and the "law of Canada" was found in Canadian maritime law. The Court of Appeal held that the claims advanced were integrally connected with maritime matters as to be legitimate Canadian maritime law. The Court of Appeal expressly held that it did not matter that the claims were in personam and not in rem as the court had jurisdiction in either event. The Court of Appeal further held that the Canada Labour Code had no application as it did not govern relations between a foreign ship owner and a foreign crew. In the result, it was held that the Federal Court had jurisdiction.
Application of Provincial Statutes
R v. Jail Island Aquaculture Ltd.,  N.B.J. No. 338,
In this matter the accused had been charged with various offences under the Occupational Health and Safety Act of New Brunswick. The charges arose out of a fatal accident that occurred on board the accused’s barge while smolt salmon were being unloaded into a salmon cage. The accused argued that as the accident occurred on a ship it fell within exclusive federal jurisdiction with respect to maritime law and, in particular, navigation and shipping. At first instance, the Provincial Court Judge dismissed the motion holding that the case was not about shipping but was about aquaculture, a matter coming within provincial jurisdiction under property and civil rights. The accused then brought an application for judicial review to the Court of Queen’s Bench. The Court of Queen’s Bench did not deal with the substantive issues raised in the application as it was of the view that the application was in pith and substance an appeal from the order of the Provincial Court Judge and held that there was no right to appeal such an interlocutory decision.
Jurisdiction - Breach of Agreement of Sale
John E. Canning Ltd. v. Tripap Inc., 2000 CanLII 15207,
This was an application to dismiss the Plaintiff’s claim on the grounds that it was not a maritime matter and the Federal Court lacked jurisdiction. The claim arose from an agreement between the Plaintiff and Defendant pursuant to which the Plaintiff had agreed to sell and deliver by barge wood to the Defendant. The Defendant later purported to terminate the agreement on the grounds that the Plaintiff had failed to perform its obligations. The Plaintiff then brought this action alleging that the Defendant breached the agreement without cause and sought damages including expenses covering the barge. The Court held that, although the agreement between the parties included some undertakings involving maritime matters, the sole claim advanced of unlawful termination of a purchase and sale agreement had nothing to do with the marine aspects of the agreement. In the result, the Court held that it was without jurisdiction and dismissed the claim.
Claim for Freight - Set-off - Jurisdiction - Warehousing
Pantainer Ltd. v. 996660 Ontario Ltd., 2000 CanLII 15080 ,
This was a claim for freight charges owing. The Defendant alleged that it was entitled to a set-off for damage caused to cargo carried by the Defendant. The Court held the general rule was that freight is to be paid without deduction and that the Defendant accordingly had no right of set-off.
One of the issues in this case was whether the Defendant’s counterclaim against the Plaintiff for damage caused to cargo in a warehouse after the carriage by sea was within the jurisdiction of the Federal Court as coming under maritime law. The Court held that claims for warehousing and storage that arose out of contracts of the carriage of goods by sea are within the jurisdiction of the Court.
Application of Provincial Statutes
R v. Williams, 2000 BCSC 449,
In this matter the accused was charged with selling liquor on board his vessel without a liquor licence in contravention of the Liquor Control and Licencing Act of British Columbia. The defences argued were that the Liquor Control and Licencing Act was ultra vires the province insofar as it attempted to regulate vessels, a matter coming under Federal maritime law, and that the vessel was operating outside the territorial jurisdiction of the province. The court determined that the proper test to apply was whether the provinical legislation affected a vital part of the federal undertaking or whether it impaired or sterilised a federal undertaking. If it did either, it was ultra vires. The court found, however, that the sale of liquor on a vessel was not a vital part of a ship's operations. The court held, therefore, that the Liquor Control and Licencing Act did not encroach upon federal jurisdiction over navigation and shipping and did not impair a federal undertaking.The court further held that the vessel was, at the material times, operating in and around the Greater Vancouver area which was within the territorial jurisdiction of the Province of British Columbia.
Fatal Accidents - Limitation Periods - Application of Provincial Prescription Statute
Nicholson v. Canada,  3 FC 225,
This was a summary judgment motion by the Crown for an order dismissing the claims of the Plaintiffs as time barred. The Plaintiffs were the dependents and the executor of the deceased who died when his vessel hit a rock and sank. The Plaintiffs alleged that the accident was caused by the breach of statutory duties on the part of the Coast Guard. The accident occurred on April 2, 1992, but the action was not commenced until March 30, 1994. The Defendant argued that the applicable limitation period was one year from the time of death as prescribed by section 649 of the Canada Shipping Act. (Note: This provision has since been amended and the limitation period is now two years.) The Plaintiffs argued that the discoverability principle operated to extend the time bar under the circumstances of the case, that the court had inherent jurisdiction to extend the limitation period, that there was a non-statutory cause of action to which section 649 did not apply, that the tolling provision of the Ontario Limitations Act applied, and that, in any event, the claim of the estate was not covered by section 649. The court dealt with each of these arguments. With respect to the discoverability principle (i.e. that the limitation does not run until the Plaintiff is aware of the material facts giving rise to a cause of action) the court held that this principle applied but that it did not assist the Plaintiffs as they were aware of the material facts at the conclusion of the inquest into the death of the deceased yet they did not commence their action within one year from that date. With respect to the inherent jurisdiction of the court to extend the limitation period, the court held that, in the absence of a clear statutory authority it had no such jurisdiction. (Note: This is contrary to the decision of the Ontario Court of Appeal in Dreifelds v Burton, (March 6, 1998) No. C 2456 &: C24580 (Ont. C.A.) but is consistent with the decision of the British Columbia Supreme Court in Vogel v Sawbridge, (April 3, 1996) No. 24638 Kelowna Registry.) With respect to the alleged common law non-statutory cause of action, the court held that there was no such cause of action. With respect to the argument that the tolling provisions of the Ontario Limitation Act applied, the court held that the incorporation of the tolling provisions would be inconsistent with the statutory scheme set out in Part XIV of the Canada Shipping Act. Finally, with respect to the action by the executor of the estate of the deceased, the court held that this action (which was newly created by the Supreme Court of Canada in Ordon Estate v Grail,  3 S.C.R. 437) was not time barred as it was not a claim by dependents and was governed by the two year limitation period in the Ontario Trustee Act as incorporated by section 39 of the Federal Court Act. (Note: It is not apparent why the limitation period in the Ontario Trustee Act would apply to the action by the executor as that action is a common law action and is not based on the Trustee Act.)
Federal Court Jurisdiction Breach of Fishing Agreement
Inter Atlantic Canada Ltd. v. The Rio Cuyaguateje, 2000 CanLII 14805,
This was an application to strike out the Statement of Claim and set aside the warrant of arrest on the grounds that the Federal Court lacked jurisdiction. The subject matter of the action was an alleged breach of an agreement relating to the utilization and allocation of North Atlantic shrimp to Cuba. The court held that this was not a claim involving Canadian maritime law and, therefore, held that it was without jurisdiction and allowed the motion.
Third Party Jurisdiction - Stuffing of Container
Caterpillar Overseas S.A. v. Canmar Victory (The), 1999 CanLII 9118 ,
This was an appeal from a decision of the Trial Division denying a motion by the Third Party Defendant for an order dismissing the Third Party Claim on the grounds that the court lacked jurisdiction. The main claim by the Plaintiff was for damage caused to an engine shipped in a container and carried from Chicago to Denmark via the Port of Montreal. The Defendant brought Third Party proceedings against the American company who was responsible for loading the container. The Third Party challenged the jurisdiction of the Federal Court on the grounds that its services were performed in Illinois and that there was therefore not a sufficient nexus between it and the territorial jurisdiction of the court. The Court of Appeal held that the stuffing of a container to be placed on board a ship at Montreal was an undertaking of a maritime nature integrally connected with the carriage of goods by sea. The Court of Appeal further held that the knowing preparation of cargo for a marine voyage beginning in Canada is an "act, conduct or agreement" that can be related in personam to the territorial jurisdiction of the Federal Court.
Application of Provincial Statutes
The Queen v. Will, 44 O.R. (3d) 315,
At issue in this case was the constitutional validity of a regulation passed pursuant the Provincial Parks Act of Ontario requiring visitors to provincial parks to purchase a $10 permit to stay in the park overnight. The accused anchored his boat in Echo Bay on the eastern shore of Georgian Bay in Lake Huron. Echo Bay was within the boundaries of a provincial park. The accused, however, refused to purchase the $10 permit and was charged. The accused argued that the regulation was constitutionally inapplicable. The Justice of the Peace that heard the case at first instance (reported at  O.J. 5922) held that the Federal Government had exclusive power to legislate in respect of navigation and shipping and that this included the right to anchor without charge. He held that only the Federal Government may interfere with navigation. He further held that "a province cannot justify even a slight interference with navigation". Accordingly, the Justice of the Peace found the impugned regulation to be constitutionally not applicable to the accused. The court on appeal agreed with the Justice of the Peace. (Note: It is difficult to reconcile this decision with that in The Queen v Kupchenko summarized below.)
Definition of Canadian Maritime Law - Applicability of Provincial Statutes - Fatal Accident Limitation Period
Ordon Estate v. Grail,  3 SCR 437,
This case is essential reading for all Canadian maritime law practitioners. It concerns four separate actions commenced in the Ontario Court General Division. The actions involved two boating accidents which resulted in fatalities and in serious personal injury. The actions gave rise to similar legal issues. The issues were:
Do the superior courts of the provinces have jurisdiction over maritime fatal accident claims or are such claims within the exclusive jurisdiction of the Federal Court?;
When can provincial statutes of general application apply to maritime negligence claims? Specifically:
Do the provisions of the Ontario Family Law Act allowing claims for loss of care, guidance and companionship by dependants (including common law spouses and siblings) apply to boating accidents?
Do the provisions of the Ontario Trustee Act allowing the estate of a deceased person to bring an action for damages apply to boating accidents?
Do the provisions of the Ontario Negligence Act apply to boating accidents?
Is the the limitation period for fatal boating accidents one or two years?
The Supreme Court of Canada held as follows:
Provincial superior courts have an inherent general jurisdiction over maritime matters that can only be taken away by clear and explicit statutory language. The provisions of the Canada Shipping Act granting jurisdiction over fatal accident claims to the "Admiralty Court" (which is defined as the Federal Court) do not expressly exclude superior court jurisdiction. Therefore the superior courts have concurrent jurisdiction with the Federal Court over maritime claims.
The determination of whether a provincial statute is constitutionally applicable to a maritime negligence action involves a four part analysis:
Step 1: First, it must be determined whether the matter at issue is within the exclusive federal legislative competence over navigation and shipping, ie. is the subject matter under consideration so integrally connected to maritime matters so as to be legitimate Canadian Maritime Law;
Step 2: If the answer to step 1 is yes, the second step is to determine whether Canadian Maritime Law provides a counterpart to the statutory provision. If it does, Canadian Maritime Law applies;
Step 3:If there is no counterpart provided by Canadian Maritime Law, the third step is to consider whether the non-statutory Canadian Maritime Law should be altered in accordance with the principles of judicial reform established by the court, ie. to reflect the changing social, moral and economic fabric of the country. Such changes should only be incremental. Changes with complex or uncertain ramifications should be left for the legislature. Additionally, in making changes to Canadian Maritime Law the courts should consider the fabric of the broader international community of maritime states and the desirability of maintaining uniformity in maritime law;
Step 4: Finally, and only if the matter cannot be resolved through the application of steps 1 through 3, the court must determine whether the provincial statute is constitutionally applicable to a maritime claim. The Supreme Court noted that matters within exclusive federal jurisdiction are subject to provincial statutes of general application provided the provincial laws do not go to the core of the federal jurisdiction. If they do, they will be read down. The Court held that Maritime negligence law is a core element of federal jurisdiction over maritime law and that it would therefore be constitutionally impermissible for a provincial statute to regulate this area of law. The Court cautioned that they were not saying that no provincial statute could ever apply in any maritime context, however, the Court was of the opinion that this would be a relatively rare occurrence.
With respect specifically to the application of the Ontario Family Law Act to boating accidents, the Supreme Court applied the above analysis and held that Canadian Maritime Law should be reformed to allow claims by dependants for loss of guidance, care and companionship in respect of both personal injury accidents and fatal accidents. The Court further held that "dependants" should include common law spouses but not siblings. Because the Court was able to incrementally reform Canadian Maritime Law to address the issues raised it did not need to consider the constitutional applicability of the Family Law Act (step 4) except with reference to whether siblings could be plaintiffs and, on this issue, the Court held the Family Law Act should be read down so as not to apply to maritime negligence actions;
With respect to the application of the Ontario Trustee Act, the Supreme Court also held that Canadian Maritime Law should be reformed to allow a claim by an executor of a deceased. Accordingly, the Court did not decide the constitutional applicability of the Act;
With respect to the application of the Ontario Negligence Act, the Supreme Court noted that Canadian Maritime Law includes a general regime of apportionment of liability resulting in joint and several liability and contribution among tortfeasors. Thus, once again, having found a remedy in Canadian Maritime Law the Court did not address the constitutional question of whether the Negligence Act applied;
The final issue considered in the case was whether a fatal accident claim is subject to a one or two year limitation period. The issue arises because section 649 of the Canada Shipping Act provides that the limitation period for a fatal accident is one year whereas section 572(1), which deals with collisions, provides for a two year limitation period. The Court held that the plaintiff's claims prima facie came within section 572(1). The Court further held that the ambiguity created by the two sections must be resolved in favour of allowing the plaintiff to rely on the longer period.
Federal Court Jurisdiction - Expenses paid by Shareholders - Practice - Affidavit to Lead Warrant
Jean v. The "Capitaine Duval", 1998 CanLII 8067,
This was an application to strike out the Statement of Claim as being outside the jurisdiction of the Court. The Plaintiffs were former shareholders and officers of the Defendant. The claim was to recover various expenses paid by the Plaintiffs on behalf of the Defendant. The expenses were in relation to the construction of a vessel being built by the Defendant. The motions judge held that the Plaintiffs' claims were not maritime matters and were therefore outside the jurisdiction of the court.
In the course of his reasons the motions judge noted that an affidavit to lead warrant sworn by the Plaintiffs' solicitor had been based on double hearsay. The motions judge said that although signing such an affidavit might not be technically illegal it was most unusual and should not in normal circumstances be done.
Jurisdiction - Evidence on Motions
MIL Davie Inc. v. Hibernia Management and Development Co., 1998 CanLII 7789 ,
This was a motion by the Defendant to strike the Statement of Claim as being outside the jurisdiction of the Federal Court. The Plaintiff relied on the Competition Act as the jurisdictional basis for the claim. The Plaintiff alleged that the Defendants engaged in anti-competitive behaviour, contrary to that Act, in the awarding of a construction contract. The Federal Court of Appeal reviewed the Statement of Claim and concluded that the Plaintiff had pleaded sufficient facts to invoke the Competition Act and the court's jurisdiction. In the course of its reasons the Court noted that there was some confusion in the caselaw as to whether a motion challenging the court's jurisdiction should be brought under Rule 401 or 419 and further noted that no evidence was generally allowed in a motion under Rule 419. The Court expressed the view that the prohibition against evidence in Rule 419(2) did not apply if the motion was to challenge the jurisdiction of the Court.
Fatal Diving accident - Application of Canadian Maritime Law - Limitation Periods
Dreifelds v. Burton, 1998 CanLII 5013,
This was an appeal from a decision of the Ontario Court General Division. The case concerned a fatal scuba diving accident in Lake Ontario. A chartered vessel was used to take the divers to the dive site but the vessel was otherwise not involved in the accident. The deceased died from a gas embolism. The issue in the case was whether the accident was governed by Canadian maritime law and the one year limitation period in the Canada Shipping Act or by the two year period in the Ontario Family Law Act. Both at the trial level and on appeal it was held that the case was not governed by Canadian maritime law and that the two year period in the Family Law Act applied. The Court of Appeal noted that "not every tortious activity engaged in on Canada's waterways is subject to Canadian maritime law. Only if the activity sued about is sufficiently connected with navigation or shipping... will it fall to be resolved under Canadian maritime law."
It is noteworthy that the Court of Appeal said, in obiter dicta, that if the case was governed by the one year limitation period in the Canada Shipping Act, the Court would nevertheless have the inherent jurisdiction to extend the one year limitation period and would have done so in the absence of any prejudice to the Defendants. (Editor's Note: Compare this to the decision of the British Columbia Supreme Court in Vogel v Sawbridge et.al.(April 3, 1996) No. 24638 Kelowna Registry (B.C.S.C.) where that Court refused to recognize any such inherent jurisdiction.)
Jurisdiction of the Federal Court - Land Lease
Corcovado yacht Charters Ltd. v. Forshore Projects Ltd., 1998 CanLII 7346,
The issue in this case was whether the Federal Court had jurisdiction to determine a dispute relating to the refusal of a landlord to renew a lease on a building that was, in part, built on pilings at Granville Island in False Creek, Vancouver. The Court held that the lease and its cancellation or non-renewal were in pith and substance matters within the property and civil rights jurisdiction of the provinces and not governed by Canadian maritime law. In the result, the Court declined jurisdiction.
Bow Valley Husky Ltd. v. St. John Shipbuilding Ltd., 1997 CanLII 307,
This is an extremely important case that all maritime law practitioners should read carefully. The case involved a breach of contract and negligence claim relating to the building of an off shore oil platform owned by the Plaintiff. The significant maritime law issue was whether the Plaintiff's claim was barred by reason of contributory negligence. The Defendant argued that because the matter was governed by Canadian Maritime Law the Newfoundland Contributory Negligence Act, which would have apportioned liability, did not apply and the Plaintiff's claim was barred. The Supreme Court of Canada agreed that the Newfoundland Contributory Negligence Act did not apply to maritime torts. The court noted that the "(a)pplication of provincial laws to maritime torts would undercut the uniformity of maritime law". Nevertheless, the court said that this was "an appropriate case for ... an incremental change to the common law in compliance with the requirements of justice and fairness". The court held that the contributory negligence bar did not apply to maritime torts. This case is of significance not only because of the ruling on contributory negligence but also because the court dealt specifically with the so called "gap rule" (which holds that, for matters within the constitutional jurisdiction of both the provinces and the federal government, the provinces may legislate where the federal government has not done so). The court held that the absence of federal legislation did not mean there was a "gap" which the provinces could fill because the common law applied to fill any such gap. ( Although not specifically enunciated in the judgement, presumably this is because the Federal Court Act enacts the common law as Canadian Maritime Law.) The significance of this may be that no provincial statute can ever apply to a matter governed by Canadian Maritime Law.
Contribution and Indemnity
Ferguson v. Arctic Transportation Ltd. et.al., No. T-1941-93 (F.C.T.D.),
The issue in this matter was whether the Federal Court had jurisdiction to determine issues of contribution and indemnity raised in a Third Party action. The facts were that the Plaintiff, a pilot with the Panama Canal Commission, was injured on board a ship owned and operated by the Defendants while it was transiting the Panama Canal. The Defendant commenced Third Party proceedings against the Panama Canal Commission alleging that the Plaintiff's injuries were caused by the negligence of employees of the Commission. The Commission argued that the claim for contribution and indemnity was not a claim recognized by Canadian Maritime Law and was therefore not within the jurisdiction of the Federal Court. The Court, however, held that it did have jurisdiction as the claim related to pilotage. The Court further noted that Canadian Maritime Law includes the law of torts.
Claim vs. Supplier of Packaging
Pakistan National Shipping Corp. v. Canada ,  3 FC 601,
This was an interlocutory application to strike a third party action on the grounds that the Federal Court had no jurisdiction over the subject matter. The main action was brought by the Plaintiff carrier against the Defendant shipper to recover expenses incurred when plastic drums containing the Defendant's cargo of canola oil began to leak and caused a collapse of stow. The Defendant, in turn, commenced Third Party proceedings alleging that the Third Party had negligently represented the quality and capacities of the plastic drums. The motions Judge allowed the Third Parties application to strike the Third Party claim. On appeal, the Court of Appeal noted that the claim was not simply for supplying defective drums but was for negligent misrepresentation and that the Third Party was well aware that the intended use of the drums was to transport oil by ships. The Court of Appeal held that the Court did have jurisdiction as the claim was integrally connected to the Court's admiralty and maritime jurisdiction.
Jurisdiction over motor carriers
Matsuura Machiner Corporation et.al. v. Melburn Truck Lines Ltd, 1997 CanLII 4905,
These three appeals concerned the jurisdiction of the Court over a road carrier in a through transit situation. Specifically, the Court considered whether s. 22(2)f (which grants the Court jurisdiction over claims "arising out of an agreement relating to the carriage of goods on a ship under a through bill of lading") supported jurisdiction against the road carrier. The Court of Appeal held that this section did not allow an action against a road carrier who was not a party to the through bill of lading.
Contribution and Indemnity
Canada v. Mallett and Associates Engineering Ltd., 1997 CanLII 9838,
This was an action against the Defendant for breach of contract and negligence in relation to dredging of the Liverpool Harbour and construction of a containment facility. The Defendant in turn brought Third Party proceedings against subcontractors. The Third Parties brought this application to strike out the Third Party proceedings on the grounds that they were governed by Canadian Maritime Law which did not recognize a claim for contribution and indemnity. The Court refused to strike out the proceedings holding, first, that it was not clear the matter was entirely governed by Canadian Maritime Law and, secondly, that it was arguable whether there was a right to contribution and indemnity under Canadian Maritime Law.
Negligence of Refinery - Contributory Negligence
Newfoundland Processing Ltd. v. The "South Angela",,  1 FC 154,
The issue in this case was who was responsible for an oil spill that occurred at the Come By Chance Oil refinery. The spill resulted after the Defendant vessel had discharged its cargo of crude and was involved in a line draining process. The Court held that both the Plaintiff and Defendant were equally at fault. The Plaintiff was at fault in that the cause of the spill was a backflow from the refinery and there were no check valves in place which, although not required by law, would have made the Plaintiff aware of the backflow. The Defendant was at fault in that it had failed to close a valve which, if closed, would have prevented the backflow from entering the slop tank and overflowing into the sea. The Court further held that the contributory negligence of the Plaintiff was not a bar to recovery. In doing so the Court relied upon and adopted the reasoning of the Newfoundland Court of Appeal in Bow Valley (Husky) Bermuda v Saint John Shipbuilding Limited, (1995) 130 Nfld. & PEIR 92.
I. Deveau Fisheries Ltd. v. Cummins Americas, Inc., No. T-1312-95 (F.C.T.D.),
This case concerned a claim by the Plaintiff against the Defendant for negligent repair of a ship's engine. The Defendant in turn commenced Third Party proceedings against a sub-contractor for contribution and indemnity in respect of work done by the sub-contractor to the cylinder heads of the engine. The sub-contractor brought a motion to strike the Third Party action on the grounds that it was not within the jurisdiction of the Federal Court. The sub-contractor argued that all of the work that it did was done in its own shop. It did not do any work to the ship or on the ship. The Court, however, held the work done was necessary to enable the ship to carry out its operations and was therefore governed by maritime law and within the admiralty jurisdiction of the Court.
Fatal Accidents - Application of Provincial Legislation - Limitation Periods
Vogel v. Sawbridge et.al., No. 24638 No. 24639 Kelowna Registry (B.C.S.C.) ,
This was a summary trial to dismiss two actions as time barred. The actions arose out of the deaths of two persons aboard the yacht "Kingfisher" while it was moored at Nanaimo Harbour, British Columbia. It was alleged in the Statement of Claim that the deaths were caused by the faulty operation of a heater in the yacht which emitted high levels of carbon monoxide. The deaths occurred on December 22, 1992 but actions were not commenced until December 21, 1994. The Plaintiffs claimed relief under the Family Compensation Act of British Columbia. The British Columbia Supreme Court, following the earlier decision of the British Columbia Court of Appeal in Shulman v McCallum  7 W.W.R. 567, held that the actions were governed by Canadian Maritime Law and not the provincial Family Compensation Act. Accordingly, the Court held that the actions were governed by the fatal accident provisions of the Canada Shipping Act and that the applicable limitation period was therefore the one year period provided by s.649 of that Act. The Court refused to exercise any inherent jurisdiction to extend the limitation period stating that to do so would conflict with and abrogate the clear provisions of a statute which contained no curative provisions. EDITORS NOTE: This decision should be read and relied upon with care given the subsequent Supreme Court of Canada decision in Ordon v Grail.
Liability - Unsafe Speed - Anchor lights - Contributory Negligence - Limitation - Owner/Master Entitlement to Limit
Conrad v. Snair, 1995 CanLII 4175,
This case involved a collision at night between a Boston Whaler and an anchored unlit sailboat. As a result of the collision, a passenger of the Boston Whaler was seriously injured. The issues concerned the liability for the collision, contributory negligence, and limitation of liability. Both the trial Judge and the Court of Appeal found that the driver of the Boston Whaler was entirely at fault for the collision. The driver was found to have been traveling at an excessive rate of speed and failed to maintain a proper lookout. With respect to the sailboat, the trial Judge and the Court of Appeal held that there was no presumption of fault because of the failure to exhibit an anchor light. They further found that there was a local custom to not display anchor lights. The driver of the Boston Whaler also argued that his passenger was contributorily negligent in that she knew of his propensity to drive his boat in a particular manner. The Court of Appeal held that even if the master was known to be reckless, that would be an insufficient basis for a finding of contributory negligence. Although in light of these findings, the Court of Appeal did not need to decide whether contributory negligence on the part of the plaintiff would be a complete bar to damages, it nevertheless gave the opinion that if the Plaintiff had been negligent, the Provincial contributory negligence statute would apply to apportion damages. Finally, the driver of the Boston Whaler argued that he was entitled to limit his liability under the Canada Shipping Act because the accident occurred while he was acting in his capacity as master and not owner of the vessel. In lengthy reasons the Court of Appeal analyzed the problems that arise where the master is also the owner. Ultimately, the Court agreed with the trial Judge that the owner/master of the Boston Whaler was at fault as owner in failing to ensure his alter ego, the master, traveled at a safe speed.
Claim against Sub-contractor
Marley Co. v. Cast North America (1983) Inc. et.al., No. T-2718-93,
The Plaintiff in the case had entered into a contract with CAST for the carriage of a container of goods from Illinois to Holland via Montreal. CAST in turn entered into a contract with a rail carrier for carriage of the container to Montreal. The container was damaged while being loaded in Illinois. The Plaintiff joined both CAST and the rail carrier as Defendants. The rail carrier brought a motion to dismiss the claim on the basis that the Federal Court was without jurisdiction. The Court held that its maritime jurisdiction under section 22(2)(f) of the Federal Court Act did not extend to the rail carrier because the rail carrier was not a party to the through bill of lading. The Court held that section 22(2)(f) only gives it jurisdiction against the actual parties to the through bill of lading. Accordingly, section 22(2)(f) would give the Court jurisdiction against CAST but not the rail carrier. The Court went on, however, to dismiss the rail carrier's motion on the grounds that it was possible the Court might have jurisdiction pursuant to section 23(c) of the Federal Court Act. Section 23(c) gives the Federal Court jurisdiction over extra-provincial works and undertakings. The Court found that there was insufficient evidence to determine this issue.