A-5-73
Oy Nokia Ab (Appellant)
v.
The ship Martha Russ and E. Russ & Co., Schif-
fahrt-U. Assekuranz-Gesellschaft and the ship
Korendyk and Nederlandsche-Ameri-Kaansche
Stoomvaart Maatschappij, N.V. (Respondents)
Court of Appeal, Thurlow and Pratte JJ. and
Sheppard D.J.—Vancouver, February 28 and
March 1, 1974.
Maritime law—Jurisdiction—"Canadian maritime law",
meaning—Cargo carried on foreign ship between foreign
ports—Subsequent shipment by different ship to Canada—
Cargo damaged on arrival—No jurisdiction over ship
engaged in first voyage—Federal Court Act, s. 2; Admiralty
Rules (English), 20(d).
Appeal from the order of Collier J. ([1973] F.C. 394)
setting aside the service of the statement of claim on the
German ship Martha Russ and her owners on the ground
that the Federal Court was without jurisdiction to entertain
the claim against that ship and her owners.
Cargo destined for appellant at Vancouver was carried
aboard the German ship Martha Russ from Finland to
Hamburg under a bill of lading for that voyage. At Ham-
burg, the cargo was barged to another ship and carried under
a separate bill of lading to Vancouver where it was found
damaged when unloaded. Appellant brought action for dam
ages against the two ships and their owners and service of
the statements of claim was made ex juris pursuant to
Federal Court Rule 307.
Held, that the order setting aside service upon respond
ents is affirmed. The claim against the respondent E. Russ &
Co. is upon a contract made by foreigners in Finland for the
carriage of goods from Finland to Germany, and the rights
of these parties under the contract are not governed by
Canadian law, but by foreign law. No satisfactory reason
has been established why steps were not taken to ascertain
the amount of damages sustained before the goods left
Germany when the facts show that the appellant was aware
that damages had been sustained there. The case is not a
proper one for the exercise of the discretion so as to compel
the respondent, E. Russ & Co. to defend the action in this
Court.
APPEAL.
COUNSEL:
D. McEwen for appellant.
J. D. L. Morrison for the Martha Russ and
E. Russ & Co.
V. R. Hill, Q.C., for the Korendyk.
SOLICITORS:
Ray, Wolfe, Connell, Lightbody and Rey-
nolds, Vancouver, for appellant.
Bull, Housser and Tupper, Vancouver, for
the Martha Russ.
Macrae, Montgomery, Spring and Cunning-
ham, Vancouver, for the Korendyk.
The judgment of the Court was delivered by
THURLOW J. (orally) —Notwithstanding the
very able and comprehensive arguments pre
sented by Mr. McEwen and Mr. Hill, Q.C., on
behalf of their respective clients we are all of
the opinion that the order setting aside service
upon the defendant, E. Russ & Co., should be
affirmed.
Assuming that the subject-matter of the plain
tiff's claim is of a kind in respect of which the
Court has jurisdiction and that there is no
reason why that jurisdiction would not be exer
cised over the defendant E. Russ & Co. if it
could be found and served in Canada, whether
or not service out of the jurisdiction should be
permitted remains a question for the exercise of
discretion by the Court. In our opinion this
holds true as well even when all the elements
required by the former Admiralty Rule 20(d) are
present. See The Hagen' per Farwell L.J. and
Société Générale de Paris v. Dreyfus Brothers 2 .
In the latter case Lindley M.R. said at page 224:
We are referred to Order XI., and it is contended, that
inasmuch as an injunction is asked, and as an affidavit has
been made in the terms required by that order, we have no
right to refuse leave to serve this writ, and it has been
contended, upon the authority of Call v. Oppenheim 1 Times
L.R. 622, that if we do we shall be running counter to a
decision of the other branch of this Court. I differ entirely
from every one of those allegations. In the first place, Order
XI. enumerates certain circumstances under which, and
under which alone, the Court can give leave to serve writs
out of the jurisdiction. It does not say that when those
circumstances occur the Court is bound to give leave. On
the contrary, the language is that service out of the jurisdic-
' [1908] P. 189.
2 (1888) 37 Ch. D. 215.
tion "may be allowed by the Court or a Judge" in certain
specified events. This shews that the Court has a discretion
and is bound to exercise its discretion. This becomes still
plainer by turning to rule 2, which states certain matters
which the Court is bound to have regard to when it is asked
for leave to serve a writ in Ireland, or Scotland. It is not that
you are entitled to have leave simply because you bring your
case within one or the other of the eleven rules of Order XI.
You cannot get the leave unless you do, but it does not
follow if you do you are to have the leave. The Court has a
discretion, and that discretion must of course be exercised
judicially, and upon proper grounds.
See also the remarks of Lord Porter in the
Brabo 3 and those of Lord Simonds in the same
case at page 305 as well as those of Diplock L.J.
in the passage cited by the learned trial judge
from Mackender v. Feldra A.G. 4
The Rule with respect to service ex juris in
this Court is Rule 307 which provides as
follows:
Rule 307. (1) When a defendant, whether a Canadian citi
zen, British subject or a foreigner, is out of the jurisdiction
of the Court and whether in Her Majesty's dominions or in a
foreign country, the Court, upon application, supported by
affidavit or other evidence showing that, in the belief of the
deponent, the plaintiff has a good cause of action, and
showing in what place or country such defendant is or
probably may be found, may order (Form 5) that a notice of
the statement of claim or declaration may be served on the
defendant in such place or country or within such limits as
the Court thinks fit to direct. (Form 6).
(2) An order under paragraph (1) shall fix a time, depend
ing on the place of service, within which the defendant is to
file his defence or obtain from the Court further time to do
so.
(3) If any problem arises concerning service of an origi
nating document in a matter other than an action, an applica
tion may be made to the Court for directions.
This rule does not describe categories of
cases in which service ex juris may be allowed,
as did the former Admiralty Rules. The discre
tion arising under it is thus at large but it must
still be exercised with the caution referred to in
the cases to which reference has been made as
well as in many other cases. In this connection
the observations made by Rand J. on the simi-
3 [1949] All E.R. 294 at 298.
4 [1967] 2 Q.B. 590 at 599.
larly worded provisions of Rule 76 of the Ex
chequer Court Rules in Muzak Corporation v.
CAPAC 5 are particularly appropriate. The
learned Judge said:
The rules of the Exchequer Court dealing with service of
this nature are of a most skeletal form. By r. No. 2 the
practice and procedure not otherwise provided shall con
form to and be regulated as near as may be by that at the
time in force in the Supreme Court of Judicature in England;
but it is not necessary, for the purposes of this appeal, to
treat the rules of Order No. 11 as being applicable by reason
of that provision. An order for such service is the exercise
of an unusual power by the domestic forum, and it has at all
times been limited to such situations as r.re consistent with a
proper appreciation of the limitations to be placed on exer
cising jurisdiction beyond a country's territorial boundaries.
If the person beyond those limits has been a party to an act
within them, that is a basic fact to which the power may be
related; but in all cases the minimal requirement is that a
prima facie case be shown.
The principal submission put forward on
behalf of the appellant was that the defendant,
E. Russ & Co., was a proper party to an action
properly brought against the other defendant
who had been served within the jurisdiction and
counsel went on to submit that when the case
fairly fell within that description there was
really no discretion left to be exercised against
permitting service ex juris. We think, however,
that the effect of the cases is that even when a
case falls within one of the categories of cases
in which service was permissible under the old
rules there was still and there still is under Rule
307 a judicial discretion to be exercised to
determine whether or not service ex juris should
be allowed.
Approaching the matter from that point of
view the most substantial reason put forward by
counsel in favour of permitting service ex juris
in this case is that the packages were not, in the
ordinary expectation of the parties, to be
opened from the time they left Finland until
they arrived in Vancouver, that the extent of the
damage to the goods was therefore not reason
ably ascertainable until after their arrival in
5 [1953] 2 S.C.R. 182 at 190.
Vancouver and that it would therefore be more
convenient to prove the extent of such damage
in the Court here. As against this, however, are
the facts that the defendant E. Russ & Co. is at
best a proper and not a necessary party to the
action against the Korendyk or her owner, that
the claim against the defendant E. Russ & Co. is
upon a contract made by foreigners in Finland
for the carriage of the goods from Finland to
Germany, that the rights of these parties under
the contract are not governed by Canadian law,
but by foreign law and that no satisfactory
reason has been established why, when the
plaintiff was aware before the goods left Ger-
many that damage had been sustained, steps
were not taken there in the presence of the
defendant, E. Russ & Co. or its representative
to have the extent of such damage ascertained.
Having regard to these features of the situation
we are of the opinion that the case is not a
proper one for the exercise of the discretion of
the Court so as to compel the defendant, E.
Russ & Co. to defend the plaintiff's claim in this
Court. In affirming this part of the learned
Judge's order, however, we should not be taken
as approving his reasoning as to the extent of
the jurisdiction of the Court to authorize service
ex juris.
We are also of the opinion that there is no
justification for staying the action against the
defendant, E. Russ & Co., and the ship Martha
Russ, as that operates to prevent service on that
defendant or the arrest of the ship within the
jurisdiction. Counsel for the respondent E. Russ
& Co. did not seek to support the stay and in
our opinion it should be set aside. To that extent
therefore the appeal will be allowed. In other
respects it will be dismissed. The respondent E.
Russ & Co. is entitled to its costs of the appeal
to be paid by the appellant.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.