[1995] 3 F.C. 124
A-1516-92
Her Majesty the Queen (Appellant) (Plaintiff)
v.
Maritime Group (Canada) Inc., Acari Shipping Co. Ltd., Transmed Shipping Ltd., John Shillien, D. P. Byrne, Robert Lyon, Dennis McLeod and the Montreal Board of Trade (Respondents) (Defendants)
Indexed as: Canada v. Maritime Group (Canada) Inc. (C.A.)
Court of Appeal, Marceau and Desjardins JJ.A. and Chevalier D.J.—Montréal, June 6; Ottawa, July 13, 1995.
Practice — Limitation of actions — Appeal from trial judgment striking out statement of claim as prescribed by Federal Court Act, s. 39 — Action in tort against those responsible for inspection, certification of ship lost at sea filed more than two years after cargo loaded at Montréal — “Cause of action” in s. 39 referring to damage suffered as well as act causing damage — In respect of prescription, law of province governing when all elements arising in province — Otherwise, time limit six years under s. 39(2) — S. 39(2) applied.
Construction of statutes — Federal Court Act, s. 39 — Laws relating to limitation of actions in force in province between subject and subject apply in respect of cause of action arising in province — Proceeding in respect of cause of action arising otherwise than in province shall be taken within six years after cause of action arising — “Cause of action” referring to damage suffered as well as act causing damage — Application of principle where meaning clear in one place, governs throughout — Also interpretation most reasonable solution to question of prescription in actions against Crown.
This was an appeal from the trial judgment striking out a statement of claim on the ground that the action was time-barred. Cargo was loaded on a ship at Montréal on January 13, 1990. The vessel was reported missing at sea on January 24, 1990. On January 22, 1992 a statement of claim was filed against defendants who were responsible for the inspection and certification of seagoing vessels at Montréal, alleging that they had negligently allowed the ship to sail on a transatlantic voyage in an unseaworthy state.
Federal Court Act, subsection 39(1) provided that the laws relating to the limitation of actions in force in any province between subject and subject applied to any proceedings in the Court in respect of any cause of action arising in that province. Subsection 39(2) provided that a proceeding in the Court arising otherwise than in a province shall be taken within six years after the cause of action arose. The Trial Judge held that “cause of action” referred to the breach of duty which provides a victim with a right of action. As the cause of action arose in Quebec, subsection 39(1) required that the rules relating to prescription in force “between subject and subject” in Quebec applied. The limitation period for torts in that province was two years so the action was out of time.
Held, the appeal should be allowed.
“Cause of action” in a proceeding in tort, as the expression is used in section 39, must refer to the damage suffered as well as the act that caused the damage. Parliament must have intended the phrase which it used three times in subsections 39(1) and (2) to have the same meaning throughout. If the meaning attributed to an expression is clear in at least one place where it appears, that meaning governs throughout. The phrase “when the cause of action arose” is used to identify the time when the prescription period begins running. In this context, “cause of action” refers to the advent of damage since before such advent there is no possible action. Also, such interpretation offers the most reasonable solution to the particular question of prescription in actions against the Crown. While respecting the idea of following local private law rules, section 39 introduces some unification and discards any possible conflict of law. In respect of prescription, the law of a province will govern when all the elements of the cause of action have arisen in that province; otherwise, the time within which the action must be commenced is six years. Subsection 39(2) applied herein.
STATUTES AND REGULATIONS JUDICIALLY CONSIDERED
Civil Code of Lower Canada, Arts. 2215, 2224, 2261.
Federal Court Act, R.S.C., 1985, c. F-7, s. 39.
APPEAL from trial judgment ([1993] 1 F.C. 131 (1992), 58 F.T.R. 253 (T.D.)) striking out the statement of claim on the ground that it was out of time. Appeal allowed.
COUNSEL:
Danièle Dion for appellant (plaintiff).
W. David Angus, Q.C. and Mireille A. Tabib for respondents (defendants).
SOLICITORS:
Deputy Attorney General of Canada for appellant (plaintiff).
Stikeman, Elliott, Montréal, for respondents (defendants).
The following are the reasons for judgment rendered in English by
Marceau J.A.: This is an appeal from the decision of the Trial Division [[1993] 1 F.C. 131 which overturned a decision of a senior prothonotary and granted a motion to strike a statement of claim on the ground that the action was time-barred.
The facts that gave rise to the issue may be quickly reviewed. On January 13, 1990, a cargo of wheat owned by the Canadian government was loaded on board the vessel the M.V. Charlie in the Port of Montréal for carriage to Mozambique. The ship was reported missing to the authorities by the owners on January 24, 1990 and it is believed that she sank with all hands somewhere in the mid-Atlantic. A statement of claim was filed shortly thereafter in March 1990 by Her Majesty the Queen in Federal Court action T-841-90 and served against the owners, managers and charterers of the M.V. Charlie, alleging joint and several liability for the damages incurred by the Crown. On January 22, 1992, following the release of an investigation report regarding the loading, sailing and subsequent loss of the ship, a second statement of claim was filed in the Federal Court against new defendants. It is this second action which is the subject of the current appeal. It alleges that Her Majesty is entitled to recover her loss from these new defendants because they were responsible for the inspection and certification of seagoing vessels in Montréal, Quebec and they had negligently allowed the M.V. Charlie to sail on a transatlantic voyage in an unseaworthy state. The second statement of claim was served on the respondent Board of Trade on June 17, 1992 and on the other respondents on August 4, 1992. The motion to strike alleging that the action was out of time was filed on August 10, 1992.
The Prothonotary dealt with the motion in a very succinct way. “The motion is denied”, he said, “on the grounds of section 17 of the Interpretation Act, articles 9 and 2215 of the Civil Code of Lower Canada; the damages arose at sea in extraterritorial water when the vessel sunk; this gives opening to this action.”
The learned Motions Judge was much more circumspect. He gave well developed reasons in support of his conclusion that the action was time-barred and the statement of claim had to be struck. In his reasons, he provides a long analysis of the arguments advanced by both counsel in support of their respective positions regarding the application of the relevant legislation which, in his view, is found in section 39 of the Federal Court Act [R.S.C., 1985, c. F-7] and articles 2261, 2224 and 2215 of the Civil Code of Lower Canada. He acknowledges that different meanings have been attributed to the expression “cause of action”, depending apparently on whether the issue arises with respect to jurisdiction, the commencement of a period of limitation, the proper forum or under section 39 of the Federal Court Act. In his view, the term “cause of action” as it appears in section 39, refers to the breach of duty which provides the victim with a right of action. The fact that the vessel sank in high seas and that, as a result, the damages were suffered outside Quebec, in international waters, does not alter the location of the cause of action. He admits that in certain cases, most of them involving product liability, the cause of action has been determined to have arisen where the damages were suffered. However, he views these as special cases in which the courts have developed and imposed on manufacturers a special duty of care which reaches into any jurisdiction where distribution of products can reasonably be contemplated to take place. A similar approach may have been adopted in some other types of cases, but it is not possible in this case. As he sees it, the cause of action here has clearly arisen in Quebec, and subsection 39(1) of the Federal Court Act requires that the rules relating to prescription in force “between subject and subject” in Quebec apply. Since, pursuant to those rules, the limitation period for torts is two years, a period that can be interrupted by the filing of a judicial demand provided the demand is served within 60 days, he concludes that the action is out of time and the statement of claim must, accordingly, be quashed as requested.
This is not meant to be a complete review of the learned Motions Judge’s reasons. It is merely a summary of his basic reasoning. In view of the position I take on this appeal, it is not necessary for me to go any further. In my respectful opinion, many of the arguments advanced by the parties and dealt with by the Motions Judge were not relevant to the disposition of the issue.
We are dealing here with a question of prescription, i.e. the time within which an action before the Court has to be brought to be receivable, and this question was expressly addressed by Parliament in a section of the Federal Court Act, section 39. Our task is, therefore, to interpret properly that specific provision of law. This is not a problem of conflict of laws or jurisdiction. We are not called upon to determine the body of law under which the respective rights of the litigants will be defined. It might have been necessary to do that if Parliament had not formally intervened, the rules of prescription being recognized as substantive and not only procedural, but Parliament did intervene. Nor are we called upon to discuss the rules governing the attribution of competence to one or several particular jurisdictions; these rules have nothing to do with time limits. Our task is strictly to determine the will of Parliament as expressed in section 39 which, before its wording was slightly amended in 1992, read as follows:
39.(1) Except as expressly provided by any other Act, the laws relating to prescription and the limitation of actions in force in any province between subject and subject apply to any proceedings in the Court in respect of any cause of action arising in that province.
(2) A proceeding in the Court in respect of a cause of action arising otherwise than in a province shall be taken within six years after the cause of action arose.
(3) Except as expressly provided by any other Act, the laws relating to prescription and the limitation of actions referred to in subsections (1) and (2) apply to any proceedings brought by or against the Crown.
On realizing that the expression “cause of action” is used as the point of reference, one cannot avoid being concerned at first by the various meanings the jurisprudence has attributed to that notion in cases of proceedings in tort according, as noted by the Motions Judge, to the purpose for which it had to be defined. I do not think, however, that the concern should persist. It does not appear to me that the interpretation of section 39 can in any way be affected by the various definitions that have been given to the notion of “cause of action” in the case law. As I read the provision, the “cause of action” in a proceeding in tort, as the expression is used therein, must necessarily refer to the damage suffered as well as the act that caused the damage. I say that for two reasons.
The first and compelling reason is that the wording of the provision requires that interpretation. It would be inconceivable, it seems to me, that Parliament would have used the phrase “cause of action arising” three times in the two leading paragraphs of the provision, twice in the short second one, without attributing to it the same meaning and import. That would have been a breach of the most basic rules governing the art of legislating. Thus, if the meaning attributed to the expression is clear and indisputable in at least one of the three places where it appears, that meaning will govern throughout. This is precisely what we have here since, at one place, the phrase “when the cause of action arose” is used to identify the point in time when the prescription period begins running. In this context, “cause of action” obviously refers to the advent of damage since before such advent, there is no possible action.
The second reason for my conviction that the expression is meant to refer to the advent of the damage as well as the act of the tort-feasor is that the provision so read offers the most reasonable solution to the particular question of prescription in actions against the Crown. While respecting the idea of following local private law rules, section 39 introduces some unification and has the significant merit of discarding any possible conflict of law. In respect of prescription, the law of a province will govern when all the elements of the cause of action have arisen in that province; otherwise, the time within which the action must be commenced is, in all cases, six years.
These are the reasons why I consider that the learned Motions Judge was wrong in concluding that, in the circumstances of this case, the law of Quebec with respect to prescription was applicable with the result that the action was time-barred. In my view, it is the second paragraph of section 39 of the Federal Court Act which is applicable, not the first one, and the prescription period is six years. The appellant’s action was not time-barred.
I would therefore set aside the order of the Trial Division and dismiss the respondents’ motion to strike, the whole with costs.
Desjardins J.A.: I concur.
Chevalier D.J.: I concur.