The Maritime Insurance Co. Ltd. (Plaintiff)
v.
The Gretafield and the owners of the Gretafield
(Defendants)
Trial Division, Walsh J.—Montreal, March 19;
Ottawa, March 23, 1973.
Maritime law—Parties--Damage to cargo—Bill of lading
declaring owner under management of F—Whether F a
proper party.
Damages were suffered by a cargo on a voyage from
Taiwan to Montreal. The bill of lading stated that the ship's
owner (who was resident outside Canada) was under the
management and operation of the F Co., Montreal, but that
the contract was between the merchant and the owner.
Plaintiff brought action against the ship and .her owner and
served the statement of claim on the F Co. Defendants
objected to such service alleging that F Co. was not their
agent for entering into contracts in Canada. Plaintiff there
upon moved to add F Co. as a defendant.
Held, dismissing the motion, in view of the terms of the
bill of lading no action would lie against F Co.
MOTION.
COUNSEL:
S. Gelfand for plaintiff.
R. Davis for defendants.
SOLICITORS:
Wood and Aaron, Montreal, for plaintiff.
Brisset, Bishop and Davidson, Montreal,
for defendants.
WALSH J.— Plaintiff moves for permission to
join the Federal Commerce and Navigation
Company Limited as an additional defendant in
the proceedings herein, which motion was con
tested by the attorneys for defendants. The pro
ceedings arose from damages sustained to cargo
shipped from Taiwan to Montreal, covered by
bill of lading dated September 25, 1971, which
bill of lading bears the printed heading:
FEDSEA LINE
Under management and operation of Federal Commerce and
Navigation Company Limited, Montreal, Canada.
and clause 2 of the bill of lading specifies that
the contract "... is between the Merchant and
the Owner of the vessel ...". There appears,
therefore, no reason why Federal Commerce
and Navigation Company Limited should have
been sued as one of the defendants in the action
as brought.
In due course, by letter dated June 15, 1972
to Federal Commerce and Navigation Company
Limited, plaintiff advised that a claim was being
made under its subrogation rights since it had
been called on to pay a claim for loss of or
damages to the shipment in the amount of $3,-
537.39. The necessary claim documents accom
panied this letter. During the course of negotia
tions with Federal Commerce and Navigation
Company Limited for settlement, a letter was
written by this company to plaintiff's represent
atives stating:
Following your request of December 1, 1972 we hereby
extend your time within which to commence suit, in accord
ance with the stipulations of the captioned B/L, up to and
including March 2, 1973 .. .
As a result of this plaintiff served defendants on
March 2, 1973 at the offices of Federal Com
merce and Navigation Company Limited as
appears by bailiff's return of service. It is of
interest to note that paragraph 6 of the state
ment of claim reads:
(6) Defendants are represented in Montreal by their agents,
Federal Commerce and Navigation Company Limited, who
extended delays for suit on behalf of Defendants to 2 March
1973.
Following this service, defendants, by notice
dated March 7, 1973, indicated that they would
move for permission to file a conditional
appearance for the purpose of objecting to the
purported service of the statement of claim. In
support of this motion an affidavit states:
3. The vessel "GRETAFIELD" and Owners of the vessel
"GRETAFIELD" are resident outside Canada and do not have
an office or regular agent in Canada and they do not, in the
ordinary course of their business, enter into contracts or
business transactions in Canada and in that connection,
regularly make use of services of such a person resident in
Canada.
4. Federal Commerce and Navigation Company Limited is
not and has never been an agent of Defendants and Defend
ants have never used Federal Commerce and Navigation
and [sic] Company Limited for the purposes of entering into
contracts or business transactions in Canada; ... .
The motion for leave to file a conditional
appearance was granted by consent and, no
doubt, in due course defendants will make a
motion to set aside the service on them by
leaving a copy of the statement of claim with
Federal Commerce and Navigation Company
Limited. I may say that were such a motion
before me at this time I would have little hesita
tion in dismissing it as the conduct of Federal
Commerce and Navigation Company Limited in
its correspondence with plaintiff, as well as the
heading of the bill of lading, give plaintiff ample
justification to believe that Federal Commerce
and Navigation Company Limited was in fact
the agent of defendants and authorized to
receive service of the documents on defendants'
behalf. Moreover, it is clear that defendants are
aware of the proceedings and have suffered no
prejudice as a result of such service.
However, that is not the motion which is
before me, which is merely concerned with
plaintiff's request to add Federal Commerce and
Navigation Company Limited as a defendant.
The affidavit accompanying plaintiff's motion
indicates that this is necessary in order to
adjudicate upon all the matters in dispute and,
in particular, the question of whether the
defendants are the principals of Federal Com
merce and Navigation Company Limited, and
whether the aforesaid acts of Federal Com
merce and Navigation Company Limited consti
tute a fraud upon plaintiff such as to render it
liable to plaintiff either in lieu of or jointly and
severally with defendants.
It is clear that the defendants originally
named and served are the parties who should be
sued and that under the terms of the bill of
lading no action would lie against Federal Com
merce and Navigation Company Limited. I do
not consider it necessary to add it as a defend
ant merely to justify the service on it as an
agent of the proceedings addressed to defend
ants. Neither do I consider that the conduct of
Federal Commerce and Navigation Company
Limited would amount to fraud or justify a
judgment on the merits being rendered against
it. The question of whether it was, in fact, an
agent of defendants, or alternatively held itself
out to be such in such a manner as to justify
plaintiff in making the service on it, are issues
which can only be decided when and if a motion
to set aside the service is made.
Plaintiff's motion to add Federal Commerce
and Navigation Company Limited as a defend
ant is therefore dismissed, but under the circum
stances of this case where I believe defendants
are attempting to raise a technical issue for the
purpose of avoiding a settlement or litigation of
the issue on the merits by the proper parties
thereto who have full knowledge of the claim
and are capable of dealing with same, no costs
will be allowed to defendants on dismissal of
plaintiff's motion.
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