2002 FCA 479
A-28-02
The Owners and All Others Interested in the Ship Katsuragi, the Ship Katsuragi, Hapag-Lloyd Container Line, GmbH and Tama Lake Ship Holding SA (Appellants/Defendants)
v.
Incremona-Salerno Marmi Affini Siciliani (I.S.M.A.S.) S.N.C. and Danzas (Canada) Limited (Respondents/Plaintiffs)
A-30-02
The Owners and All Others Interested in the Ship Castor, the Ship Castor and Atlas Trampship Reederei GmbH & Co. m.s. Castor KG (Appellants)
v.
Incremona-Salerno Marmi Affini Siciliani (I.S.M.A.S.) S.N.C. and Danzas (Canada) Limited (Respondents)
Indexed as: Incremona-Salerno Marmi Affini Siciliani (I.S.M.A.S.) s.n.c. v. Castor (The) (C.A.)
Court of Appeal, Strayer, Nadon and Evans JJ.A.-- Vancouver, November 13; Ottawa, December 2, 2002.
Construction of Statutes -- Bill of lading for carriage of goods from Italy to Canada giving German courts jurisdiction in event of any claim -- Cargo damaged -- Plaintiffs claiming in Federal Court of Canada, defendants moving for stay based on jurisdiction clause -- Motion not yet heard when Marine Liability Act, s. 46(1) (providing notwithstanding contract stipulating adjudication elsewhere, action may be brought here if Canadian port of loading or discharge) -- F.C.T.D. Judge declaring s. 46(1) applicable herein -- Holding rule against retrospective statute application strong presumption, can be set aside -- Decision reversed by F.C.A. -- Issue on appeal: did Judge err in concluding stay motions continuing facts until disposition -- Only relevant facts were dates proceedings launched, subsection came into force -- To apply subjection to this case would be giving it retroactive effect -- Would confer on respondents rights not possessed when action commenced -- Argument, rule against retroactive application inapplicable to statute impacting only on procedural rights, considered -- Views of law professors adopted -- Attempt to apply procedural provision to stage in proceeding completed before provision in force refused unless legislative direction to contrary.
Maritime Law -- Carriage of Goods -- Shipment of polished granite from Italy to Canada damaged -- Bill of lading giving jurisdiction over disputes to German courts -- Action commenced in Federal Court of Canada -- Motion for stay based on jurisdiction clause -- Stay application yet to be heard when Marine Liability Act, s. 46(1) (providing that, contract notwithstanding, action may be taken here if Canadian port of loading or discharge) came into force -- Judge holding s. 46(1) applicable herein -- Reversed by F.C.A. -- Retroactive application of s. 46(1) would confer on respondents rights not possessed when lawsuit launched.
The claim of the plaintiffs (respondents herein) was in respect of damage to a cargo of polished granite transported from Italy to Surrey, British Columbia. The goods had been carried to Malta on the Castor and from there to Halifax on board the vessel Katsuragi. The granite then crossed Canada by rail. The bill of lading, dated December 21, 1999 at Milan, provided that any claim thereunder would be governed by German law and determined by the courts at Hamburg. Respondents filed their statement of claim in the Federal Court of Canada on December 15, 2000 but defendants moved under Federal Court Act, section 50 for a stay of the proceedings in reliance upon the jurisdiction clause. The stay applications were yet to be heard when subsection 46(1) of the Marine Liability Act came into force. That subsection provides that even if a contract for the carriage of goods by water stipulates adjudication or arbitration in a country other than Canada, litigation may be launched here if the port of either loading or discharge is in Canada. The Trial Division's Gibson J. granted a declaration that subsection 46(1) applied herein. That Judge held that the common law rule against the retrospective application of statutes, while a strong presumption, was one that could be set aside. The legislation had to be carefully examined to ascertain whether there was an indication of legislative intent that subsection 46(1) was to have retroactive effect. Finding no such indication, the Judge then had reference to leading works on statutory construction where he found support for the proposition that, where a provision of law attaches legal consequences to continuing facts, the provision is not retroactive unless the state of affairs had ended before the provision came into force. Gibson J. was of opinion that the stay applications were facts of a continuing nature so that the application of subsection 46(1) to these proceedings would be neither retroactive nor retrospective. He further held that the appellants' rights under the jurisdiction clause had not yet crystallized when subsection 46(1) came into force. Appellants argued that the lower Court Judge erred in concluding that the stay motions were continuing facts until disposed of.
Held, the appeals should be allowed.
The Motions Judge correctly found that the non-retroactivity presumption had not been overturned. However, contrary to the view taken by Gibson J., the only facts relevant to the determination of the temporal application of subsection 46(1) are those identified in the statute: the date the proceedings were instituted and the date the subsection came into force. The stay applications could not be considered ongoing facts not disposed of when subsection 46(1) came into force. Clearly, to apply that subsection to these proceedings would be to give it retroactive effect. In other words, it would be defining the legal regime of facts that arose prior to its commencement. It would confer upon the respondents rights which they did not have when they launched their lawsuit.
Respondents' submission, that since the subsection impacts only upon procedural rights, the rule against retroactive operation is inapplicable, could not be entirely agreed with. Two learned authors, Professors Côté and Sullivan, both express the view that procedural statutes are not to be accorded retroactive effect. Procedural statutes, from the time of their coming into force, apply to regulate future procedural steps. Here, respondents seek to apply subsection 46(1) to a stage of the proceedings--institution of their actions--that was completed before the subsection came into force. That would be a retroactive application.
statutes and regulations judicially
considered
Federal Court Act, R.S.C., 1985, c. F-7, s. 50.
| Marine Liability Act, S.C. 2001, c. 6, s. 46(1). |
cases judicially considered
referred to:
Gustavson Drilling (1964) Ltd. v. Minister of National Revenue, [1977] 1 S.C.R. 271; (1975), 66 D.L.R. (3d) 449; [1976] CTC 1; 75 DTC 5451; 7 N.R. 401; Angus v. Sun Alliance Insurance Co., [1988] 2 S.C.R. 256; (1988), 65 O.R. (2d) 638; 52 D.L.R. (4th) 193; 34 C.C.L.I. 237; 47 C.C.L.T. 39; [1988] I.L.R. 1-2370; 9 M.V.R. (2d) 245; 87 N.R. 200; 30 O.A.C. 210.
authors cited
Côté, P.-A. The Interpretation of Legislation in Canada, 3rd ed. Scarborough, Ont.: Carswell, 2000.
Sullivan, Ruth. Driedger on the Construction of Statutes, 3rd ed. Toronto: Butterworths, 1994.
APPEALS from an order of the Trial Division ([2002] 3 F.C. 477), granting a declaration that subsection 46(1) of the Marine Liability Act applied to the case at bar. Appeals allowed.
appearances:
Nils E. Daugulis for appellants (defendants) in A-28-02.
Peter G. Bernard, Q.C. for appellants in A-30-02.
John W. Bromley for respondents.
solicitors of record:
Bull, Housser & Tupper, Vancouver, for appellants (defendants) in A-28-02.
Bernard & Partners, Vancouver, for appellants in A-30-02.
Bromley Chapelski, Vancouver, for respondents.
The following are the reasons for judgment rendered in English by
[1]Nadon J.A.: These are appeals from an order of the Trial Division, dated December 4, 2001 [[2002] 3 F.C. 447]. At issue before us is whether the Motions Judge was correct in concluding that subsection 46(1) of the Marine Liability Act, S.C. 2001, c. 6 (the Act), which came into force on August 8, 2001, applies to the proceedings commenced by the respondents on December 15, 2000 in Court file T-2330-00. The facts which give rise to these appeals are straightforward and are not in dispute.
[2]By their statement of claim, the respondents, cargo owners, claim against the appellants, the owners and operators of the vessels Castor and Katsuragi, for damage caused to a cargo of polished granite carried in a container from Catania, Italy to Surrey, British Columbia.
[3]The container was carried from the port of Catania to the port of Marsaxlokk, Malta on the vessel Castor. At Marsaxlokk, the container was discharged and transhipped to the vessel Katsuragi for carriage to Halifax, Nova Scotia, where it was discharged and placed on a rail car for on-carriage to Surrey.
[4]The respondents' claim is founded, in part, on a contract of carriage, evidenced by bill of lading No. HLCUMIL991202103, dated December 21, 1999 at Milan. Clause 25 of the bill of lading provides that all claims or disputes arising thereunder shall be governed by German law and determined by the courts of Hamburg to the exclusion of the jurisdiction of all other courts. The clause reads as follows:
Except as otherwise provided specially herein any claim or dispute arising under this Bill of Lading shall be governed by the law of the Federal Republic of Germany and determined in the Hamburg courts to the exclusion of the jurisdiction of the courts of any other place. In case the Carrier intends to sue the Merchant, the Carrier has also the option to file suit at the Merchant's place of business. In the event this clause is inapplicable under local law, then jurisdiction and choice of law lie in either the Port of lading or the Port of Discharge at Carrier's option.
[5]The respondents filed their statement of claim on December 15, 2000. On February 2, 2001, the Katsuragi defendants filed a motion under section 50 of the Federal Court Act [R.S.C., 1985, c. F.-7] for an order staying the proceedings on the basis of the jurisdiction clause contained in the bill of lading. On March 26, 2001, the Castor defendants filed a similar motion. For reasons which need not concern us here, the stay applications had not been heard by the time subsection 46(1) of the Act came into force on August 8, 2001.
[6]In the event, the stay applications were argued before the Motions Judge on November 19, 2001. On December 4, 2001, the Motions Judge held that subsection 46(1) applied to the proceedings. He concluded that its application was neither retroactive nor retrospective, nor did it interfere with vested or crystallized rights.
[7]After setting out the general principle that statutes were not to be interpreted as having a retroactive effect, unless such a construction was expressly or by necessary implication required by the language of the statute (see Gustavson Drilling (1964) Ltd. v. Minister of National Revenue, [1977] 1 S.C.R. 271, at page 279), the Motions Judge carefully examined the Act in order to determine whether any of its provisions could be read as an indication of legislative intent that subsection 46(1) was to have retroactive effect. He concluded that no such indication could be found in the Act.
[8]The Motions Judge then turned his attention to the general principles of interpretation in order to determine the temporal application of subsection 46(1). The principles to which the Motions Judge referred are those set out in Pierre-André Côté, The Interpretation of Legislation in Canada, 3rd ed. (Scarborough, Carswell, 2000), at pages 128 to 130, which were adopted by Ruth Sullivan in Driedger on the Construction of Statutes, 3rd ed. (Toronto, Butterworths, 1994), at pages 514 and 515. They are as follows:
(i) the court must identify the relevant facts that trigger the statute's application;
(ii) the court must situate those facts in time;
(iii) the court must apply the statute; if facts that occur subsequent to the effective date of the statute are essential for it to apply, then there will be no retroactivity or retrospectivity.
At page 515 of Driedger, the Motions Judge found support for the proposition that where a provision of law attaches legal consequences to continuing facts, the provision is not retroactive unless the state of affairs has ended before the coming into force of the provision.
[9]With these principles in mind, the Motions Judge held that, although all of the relevant facts giving rise to the respondents' claim had occurred prior to the coming into force of subsection 46(1), the motions for an order staying the respondents' proceedings were facts of a continuing nature which had not ended or been accomplished prior to August 8, 2001. Hence, his conclusion that subsection 46(1) of the Act applies to the proceedings because its application is not retroactive nor retrospective.
[10]The Motions Judge further held that the appellant's rights under the jurisdiction clause had not vested nor crystallized when subsection 46(1) came into force, since no determination of these rights under section 50 of the Federal Court Act had been made.
[11]The appellants submit that the Motions Judge erred in concluding that subsection 46(1) applies to the proceedings. The appellants argue that the Motions Judge was wrong to conclude that the motions for a stay of proceedings were relevant continuing facts until ultimately disposed of. They say that the only relevant facts are the date on which the respondents instituted their proceedings and the date on which subsection 46(1) came into force. The appellants further argue that they had a tangible legal right upon which they relied, namely their contractual right to litigate in Hamburg, a right which they sought to assert when they brought their motions for a stay. They submit that such a right cannot be affected by subsection 46(1) of the Act. For the reasons that follow, I have come to the conclusion that the appellants' appeals must succeed.
[12]Subsection 46(1) of the Act reads as follows:
46. (1) If a contract for the carriage of goods by water to which the Hamburg Rules do not apply provides for the adjudication or arbitration of claims arising under the contract in a place other than Canada, a claimant may institute judicial or arbitral proceedings in a court or arbitral tribunal in Canada that would be competent to determine the claim if the contract had referred the claim to Canada, where
(a) the actual port of loading or discharge, or the intended port of loading or discharge under the contract, is in Canada;
(b) the person against whom the claim is made resides or has a place of business, branch or agency in Canada; or
(c) the contract was made in Canada.
[13]The effect of the subsection is to remove from this Court its discretion under section 50 of the Federal Court Act to stay proceedings on the ground of a jurisdiction or arbitration clause where the requirements of paragraphs 46(1)(a), (b) or (c) are met. In the case at bar, if the Motions Judge is correct in his view of the matter, paragraph 46(1)(a) would prevent the appellants from obtaining a stay based on clause 25 of the bill of lading, since the port of discharge was the port of Halifax. Consequently, if subsection 46(1) applies to these proceedings, the appellants' stay applications will likely be dismissed.
[14]The Motions Judge found, correctly in my view, that the presumption of non-retroactivity had not been overturned. I agree entirely with him that the Act does not provide, expressly or by necessary implication, that subsection 46(1) is to apply retroactively. However, contrary to the view taken by the Motions Judge, it is my opinion that the only facts relevant to the determination of the temporal application of subsection 46(1) are those identified in the statute, namely the date of institution of the proceedings and the date on which the subsection came into force. Consequently, in that context, the appellants' stay applications cannot be seen as ongoing facts or, in the words of the Motions Judge, "facts of a continuing nature which had not been disposed of prior to August 8, 2001". Since the applications for a stay are neither identified nor mentioned in the statute, they are clearly irrelevant in determining whether the subsection applies to these proceedings.
[15]I have no doubt whatsoever that applying subsection 46(1) to these proceedings would be giving the subsection a retroactive effect. At page 130, under the heading of "Characterization of application of the statute", professor Côté explains when a statute will have retroactive effect:
There is retroactive effect when the new statute defines the legal regime of a fact or group of facts that arose entirely before its commencement. The hypothesis of legal facts arising entirely after commencement may thereby be excluded: it seems clear that a statute is not retroactive if it only draws consequences from facts, whether momentary, ongoing or successive, which have occurred after its coming into force. Although this is more debatable, we should also consider as non-retroactive the application of a statute to a fact situation arising in part before and in part after its commencement, that is to say, to pending facts. In such a case, the problem is one of immediate application of the statute, not retroactive application.
But there is indeed retroactivity when the statute applies to a fact situation that arose entirely prior to its commencement. Examples include: 1) a statute which gives effects to the occurrence of a momentary fact when it is applied to such a fact that arose prior to commencement; 2) a statute giving effects to the occurrence of an ongoing fact when it is applied to such a fact which has ceased prior to its commencement; 3) a statute which gives effects to the occurrence of successive facts when applied to such facts where all of them have arisen prior to commencement. [Footnotes not reproduced.]
To paraphrase Professor Côté, if subsection 46(1) of the Act applies to these proceedings, the new statute would be defining the legal regime of a fact or group of facts that arose entirely before its commencement.
[16]In concluding that a statute had no retroactive effect, Dickson J. (as he then was) in Gustavson, supra, stated at page 279 that:
. . . it [the section] does not reach into the past and declare that the law or the rights of parties as of an earlier date shall be taken to be something other than they were as of that earlier date.
[17]In the present instance, subsection 46(1), if applied to the proceedings commenced on December 15, 2000, would reach into the past and declare that the rights of the parties as of that date are to be taken to be something other than they then were. Simply put, when the respondents commenced their action against the appellants on December 15, 2000, they could not institute proceedings in Canada in disregard of the jurisdiction clause in the bill of lading, even though the port of discharge was a Canadian port. The respondents did commence proceedings in Canada, but these proceedings were open to a challenge by the appellants by way of an application for a stay under section 50 of the Federal Court Act. The outcome of the stay applications is not a foregone conclusion, but in the light of the relevant case law, it is likely that the applications would be allowed and that the respondents would be forced to commence proceedings in Germany.
[18]The application of subsection 46(1) to the proceedings would confer rights on the respondents which they did not have when they commenced their lawsuit. Consequently, in my view, for subsection 46(1) to apply, it must apply retroactively.
[19]Although I am of the view that subsection 46(1) is a substantive provision, I will now deal with the respondents' submission that since the subsection does not affect substantive rights but, rather, procedural rights, the rule against retroactive operation does not apply. This proposition, in my view, is not entirely correct. In commenting on, amongst others, the Supreme Court of Canada's decision in Angus v. Sun Alliance Insurance Co., [1988] 2 S.C.R. 256, on which the respondents rely for their submission, Professor Côté states unequivocally, at pages 178 to 180 of his work, that procedural statutes are not given retroactive effect:
The authorities frequently state that procedural statutes are retroactive. This usually means that they apply to actions pending at the moment of their commencement.
Use of such terminology is open to question, for there is no retroactive effect associated with the immediate application of procedural enactments. The rule, simply stated, is that there are no vested rights in procedural matters. There is consequently no survival of the earlier act, and the new one is, from the moment of its commencement, applicable to the regulation of future procedural steps.
The confusion in terminology seems to stem from two sources. First, common law has no term to describe statutes which, though they only operate from their commencement, nevertheless encroach upon vested rights. Such laws have been traditionally called "retroactive" or "retrospective", although in fact they do not operate as of a time prior to their enactment. The other cause, inherent in procedural statutes, is the fact that they apply immediately even to pending actions. But this is not at all a case of retroactivity.
In general, new statutes affecting substantive matters do not apply to pending causes, even those under appeal. Since the judicial process is generally declaratory of rights, the judge declares the rights of the parties as they existed when the cause of action arose: the day of the tort, of the conclusion of the contract, the commission of the crime, etc. However, a new statute bringing substantive modification is applicable to a pending case if it retroactively modifies the law applicable on the day of the tort, the contract, the crime, etc. A pending case, even under appeal, can therefore be affected by a retroactive statute, and even by one enacted while proceedings are pending in appeal.
Because procedural provisions apply to pending cases, the term "retroactivity" has been used by analogy with the effect of statutes affecting substantive rights. But procedural enactments do not govern the law that the judge declares to have existed: they only deal with the procedures used to assert a right, and with the rules for conduct of the hearing. It is normal that a statute dealing with trial procedure will govern the future conduct of all trials carried out under the authority. This is not retroactivity but simply immediate and prospective application. [Footnotes not reproduced; emphasis added.]
[20]Professor Sullivan agrees with Professor Côté's view that procedural statutes are not to be given retroactive effect. At page 549 of Driedger, she writes:
Where a provision is found to be purely procedural, it is given immediate and general effect. It is not given retroactive effect. The presumption against the retroactive application of legislation applies to procedural provisions as it does to all legislation, without exception. Thus, any attempt to apply a procedural provision to a stage in a proceeding that was completed before the provision came into force would be refused, subject to a legislative direction to the contrary. [Emphasis added.]
[21]Thus, procedural statutes, from the time of their coming into force, apply to regulate future procedural steps. They are given an immediate and general effect, but they are not given retroactive effect. In the present matter, what the respondents seek is to apply subsection 46(1) to a stage of the proceedings, namely the institution of their action against the defendants, that was completed before the subsection came into force. Thus, as I have already indicated, for subsection 46(1) to apply herein, it must apply retroactively.
[22]Finally, I wish to add that a plain reading of subsection 46(1) leads me to the conclusion that the subsection does not apply to judicial proceedings commenced prior to its coming into force. In my view, the conditions set out in the subsection that "[i]f a contract for the carriage of goods by water to which the Hamburg Rules do not apply provides for the adjudication or arbitration of claims arising under the contract in a place other than Canada, a claimant may institute judicial . . . proceedings in a court . . . in Canada", are not readily applicable to proceedings commenced prior to the coming into force of the statute.
[23]In view of my conclusion that subsection 46(1) does not apply to proceedings commenced prior to August 8, 2001 and that its application thereto would be retroactive, I need not deal with the issue of the applicants' vested rights.
[24]For these reasons, these appeals should be allowed. The Motions Judge's December 4, 2001 order should be set aside and a declaration made that subsection 46(1) of the Marine Liability Act, S.C. 2001, c. 6, does not apply to the proceedings commenced by the respondents in file T-2330-00. The appellants should have their costs herein and below.
Strayer J.A.: I agree.
Evans J.A.: I agree.