Antares Shipping Corporation (Plaintiff)
v.
The Ship Capricorn (Defendant)
Trial Division, Pratte J.—Quebec, July 26;
Ottawa, October 1, 1973.
Maritime law—Jurisdiction—Action in rem for breach of
contract to sell ship—Whether cognizable by Federal
Court—Federal Court Act, s. 22.
Plaintiff brought action in rem against a ship, alleging
breach of contract by her owner D, a foreign company, to
sell the ship to plaintiff and then fraudulently selling the ship
to another foreign company, P. Plaintiff sought a declaration
that the sale of the ship by D to P was void, for the
performance by D of its contract to sell the ship to plaintiff,
and also for damages. The ship was arrested in Quebec and
released on bail bond.
Held, the Court had jurisdiction to entertain the action,
and leave should be given to add P and D as parties.
(1) Even if plaintiff's claim did not fall within one of the
categories of jurisdiction mentioned in section 22(2) of the
Federal Court Act and was not a claim under "Canadian
maritime law" under section 22(1), plaintiff sought a remedy
under a law of Canada relating to shipping and this gave the
Court jurisdiction under section 22(1). The jurisdiction of
the Federal Court in maritime matters under section 22(1) is
co-extensive with the legislative power of Parliament over
"navigation and shipping" even though Parliament has not
actually legislated thereon, and that jurisdiction is not
excluded because under the rules of private international
law the action is governed by foreign law.
The jurisdiction of the Court over shipping extends to all
those parts of maritime law which relate to ships and
persons employed in and about them and includes the sale
of a ship.
(2) Since the action was instituted solely against the ship,
plaintiff could seek only such relief as could be enforced
against the ship and that did not include an order for specific
performance against D nor the annulment of the sale of the
ship by D to P. Moreover, since plaintiff's claim for dam
ages was not secured by a maritime lien it could not arrest
the ship without at the same time seeking the annulment of
the sale. Leave should however be given to plaintiff to add
D and P as parties upon service of the statement of claim on
them within 60 days.
ACTION.
COUNSEL:
R. Langlois and L. Côté for plaintiff.
G. de Billy and S. Harrington for defendant.
SOLICITORS:
Langlois, Drouin and Laflamme, Quebec,
for plaintiff.
Gagnon, de Billy and Cantin and Co.,
Quebec, for defendant.
PRATTE J.—This is a motion for an order
striking out the statement of claim and setting
aside the arrest of the defendant ship.
The action instituted by the plaintiff is purely
an action in rem. The defendant ship, which was
arrested in Quebec, is a Liberian tanker; it is
now registered in the name of Portland Shipping
Company Inc. (hereinafter called "Portland")
which purchased it from Delmar Shipping Co.
Ltd. (hereinafter called "Delmar"). The plain
tiff, as well as the present and former owners of
the defendant ship, is a Liberian company.
The allegations of the statement of claim may
be summarized as follows:
(1) In May 1973, Delmar, which was then the
registered owner of the defendant ship agreed
to sell her to the plaintiff; this contract was
entered into in England.
(2) Delmar failed to carry out its obligations
under this contract and, with the intent of
defrauding the plaintiff, sold the defendant
ship. to Portland; this sale, which was made
outside Canada, is a sham and, in any event,
is void.
(3) The plaintiff has suffered and will suffer
damages as a consequence of the failure of
Delmar to sell and deliver the defendant ship
to the plaintiff.
The plaintiff seeks the following reliefs:
(1) a declaration that the sale of the defend
ant ship by Delmar to Portland is null and
void and that, as a consequence, the defend
ant ship still belongs to Delmar;
(2) a judgment ordering Delmar to perform
its obligations under the agreement entered
into with the plaintiff;
(3) damages.
After the arrest, Portland secured the release
of the defendant ship by giving a bond ir. the
amount that had been fixed by the Court; it also
made various applications to the Court, the
nature of which need not be mentioned here. It
is only after having thus taken an active part in
these proceedings that Portland moved for an
order striking out the statement of claim and
setting aside the arrest.
This motion is made on two grounds:
(1) The Court does not have jurisdiction in
this case;
(2) The relief sought by the plaintiff is of
such a nature that it cannot be obtained in an
action in rem.
What is conveniently called the "Admiralty
jurisdiction" of the Federal Court is described
in section 22 of the Federal Court Act. Subsec
tion (1) of section 22 describes this jurisdiction
in general terms while subsection (2) contains
an enumeration of various categories of claims
which are specifically declared to be within the
jurisdiction of the Court.
Section 22(1) reads as follows:
22. (1) The Trial Division has concurrent original juris
diction as well between subject and subject as otherwise, in
all cases in which a claim for relief is made or a remedy is
sought under or by virtue of Canadian maritime law or any
other law of Canada relating to any matter coming within
the class of subject of navigation and shipping, except to the
extent that jurisdiction has been otherwise specially
assigned.
Counsel for the applicant submitted that the
Court lacked jurisdiction to try this case
because, in his view, the plaintiff's claim
(1) does not fall within the enumeration con
tained in section 22(2);
(2) is not covered by section 22(1) in that it is
not a claim made
a) under Canadian maritime law or
b) under any other law of Canada relating
to navigation and shipping.
Assuming that the plaintiff's claim would, as
submitted by counsel, neither fall within one of
the categories mentioned in section 22(2) nor be
a claim made under "Canadian maritime law", I
am nevertheless of the opinion that this Court
has jurisdiction in this case since, in my view,
the plaintiff seeks a remedy under a law of
Canada relating to shipping.
In my view, a claim which relates to "naviga-
tion and shipping", a subject-matter which is
within the exclusive legislative jurisdiction of
Parliament under section 91(10) of the British
North America Act, 1867, is a claim made
under a law of Canada relating to navigation and
shipping. In other words, the jurisdiction of this
Court in maritime matters under section 22(1) is
co-extensive with the legislative power of Par
liament over "navigation and shipping"; it is not
limited to the matters coming within that subject
on which Parliament has actually legislated)
On the other hand, an action which is within
the jurisdiction of the Court, as being a claim
which relates to navigation and shipping, is not
excluded from that jurisdiction by reason of the
fact that, under rules of private international
law, this action is governed by foreign law.
Strictly speaking, a Canadian Court never
applies foreign law. As Lord Parker said in
Dynamit Actien-Gesselschaft v. Rio Tinto Com
pany, Limited [1918] A.C. 292 at page 302:
Every legal decision of our Courts consists of the applica
tion of our own law to the facts of the case as ascertained
by appropriate evidence. One of these facts may be the state
of some foreign law, but it is not the foreign law but our
own law to which effect is given, whether it be by way of
judgment for damages, injunction, order declaring rights and
liabilities, or otherwise.
The word "shipping" in section 91(10) of the
British North America Act, 1867, and in section
22(1) of the Federal Court Act, in my opinion,
has the same meaning as in the well known
expression "law of shipping" which is defined
as follows in Black's Law Dictionary 4th ed.
1951, vbo "shipping":
A comprehensive term for all that part of the maritime
law which relates to ships and the persons employed in or
about them. It embraces such subjects as the building and
equipment of vessels, their registration and nationality, their
ownership and inspection, their employment, (including
charter-parties, freight, demurrage, towage, and salvage,)
and their sale, transfer, and mortgage; also, the employment,
rights, powers, and duties of masters and mariners; and the
law relating to ship-brokers, ship-agents, pilots, etc. 2
Such being, in my view, the meaning of the
word "shipping", it follows that I am also of the
opinion that, in the exercise of its legislative
power over that subject, Parliament could regu
late the sale of ships.
For these reasons, I am of the opinion that
the plaintiff's claim, which is a claim for the
enforcement of an agreement of sale of a ship,
is within the jurisdiction of the Court.
I turn now to the second ground relied on by
the applicant, namely that the remedies sought
by the plaintiff cannot be obtained by an action
in rem.
The plaintiff's action was instituted solely
against the defendant ship. Neither Delmar nor
Portland were ever impleaded. And even if it
can perhaps be argued that Portland has become
a party to the action as a consequence to its
taking an active part in the proceedings prior to
its making the present application, the same
thing cannot be said of Delmar.
In my view, the following propositions are so
plain as not to require any explanations:
1. The relief claimed in an action in rem,
which is an action against a res, must be such
that it could be enforced against the res itself.
2. A Court cannot order the specific perform
ance of a contract if the person against whom
the order is sought has not been made a party
to the action.
3. A Court cannot declare a contract to be
void in an action in which the parties to that
contract have not been impleaded.
In the light of these propositions, I cannot but
reach the conclusion that the plaintiff in this
action against the defendant ship could neither
seek an order for specific performance against
Delmar nor seek the annulment of the sale made
by Delmar to Portland. Moreover, since the
plaintiff's claim for damages is not secured by a
maritime lien, the plaintiff could not arrest the
defendant ship without, at the same time, seek
ing the annulment of the sale made by Delmar
to Portland.
It follows that, from a strict technical point of
view, the arrest of the defendant ship could be
set aside and the statement of claim could be
struck out in its entirety. However, having in
mind that, under Rule 1716 "no action shall be
defeated by reason of the misjoinder or non-
joinder of any party", I am of the view that the
plaintiff shall be given leave to add both Delmar
and Portland as defendants provided that the
statement of claim be served on these two com
panies within 60 days of the date of this order.
I will therefore order that both Delmar and
Portland be added as defendants in this case and
that the style of cause be modified accordingly;
I will further order that all proceedings in this
case be stayed for a period of 60 days from the
date of this order and that, at the end of this
period, the statement of claim be struck out and
the arrest of the defendant ship be set aside if,
in the meantime, the plaintiff has not filed evi
dence of the service of the action upon both
Delmar Shipping Co. Ltd. and Portland Shipping
Company Inc.
What I have just said must not be interpreted
as implying the view that the plaintiff should be
given leave to serve ex juris in the event of its
being unable to have the statement of claim
served on Delmar or Portland within Canada.
The costs of this application shall be in the
cause.
' See the definition "laws of Canada" in section 2 of the
Federal Court Act. Compare Consolidated Distilleries Ltd. v.
The King [1933] A.C. 508 at pages 521-522.
z In so far as I could ascertain, this modern definition of
the "law of shipping" gives an accurate description of the
contents of the various books, be they old or recent, that
have been written on that subject.
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.