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T-3106-72
Swiss Bank Corporation (Plaintiff) v.
Air Canada, Swissair and Swiss Transport Co. Ltd. (Defendants)
Trial Division, Addy J.—Montreal, May 6; Ottawa, May 20, 1975.
Jurisdiction—Aeronautics—Claim for loss of cargo shipped by air—Defendant admitting liability, but alleging limitation imposed by Carriage by Air Act—Plaintiff alleging gross negligence and claiming limitation not applicable—Defendant moving to dismiss for lack of jurisdiction—Carriage by Air Act, R.S.C. 1970, c. C-14, Sch. I, Arts. 22, 25, 30 and Sch. III, Arts. XI, XIII.
A cargo of Canadian bank notes was shipped from Switzer- land to Montreal, and was lost after being unloaded. Defend ant, Air Canada, admits liability, but alleges it is limited to $73.25 under the Carriage by Air Act. Plaintiff alleges that the loss and failure to notify police constitute gross negligence and that the limitation does not apply. Defendant moves for dismis sal for lack of jurisdiction.
Held, granting the motion, the Court has not been granted jurisdiction. According to Canadian Fur Company (NA) Ltd. v. KLM [1974] 2 F.C. 944, the Court has no jurisdiction to hear a cargo claim against an air carrier. Air Canada is not "a corporation agent of the Crown" so as to create jurisdiction under section 17 of the Federal Court Act. Nor is it a servant of the Crown within the ambit of section 17(4). As to the meaning of "aeronautics" in section 23, there is nothing in the Okanagan Helicopters decision [1974] 1 F.C. 465 which implies that the word would apply to a cargo claim against an air carrier. Jurisdiction over carriage of goods by air is careful ly excluded by the wording of section 22(3)(b). As to the argument that the Court has jurisdiction under section 23 on the grounds that the right of action is founded on an Act of Canada, the Carriage by Air Act, and specifically, the Warsaw Convention, and that such carriage consists of "works and undertakings ... extending ... beyond the limits of a province", although the right of recovery may be founded in the Act, carriage of air freight does not constitute a work or undertaking of the Crown.
Canadian Fur Company (NA) v. KLM [1974] 2 F.C. 944, and King v. The Queen (unreported, T-2573-71), followed. Okanagan Helicopters v. Canadian Pacific Limited [1974] 1 F.C. 465, distinguished.
APPLICATION.
COUNSEL:
V. Prager and M. De Man for plaintiff.
A. Giard and M. Martineau for defendant Air
Canada.
J. Roger for defendant Swissair.
SOLICITORS:
Stikeman, Elliot, Tamaki, Mercier & Robb, Montreal, for plaintiff.
Boudreau, Giard & Gagnon, Montreal, for defendant Air Canada.
Doheney, Day & Co., Montreal, for defendant Swissair.
The following are the reasons for judgment rendered in English by
ADDY J.: This is an application by way of a motion by the defendant Air Canada to have the action dismissed as against it for lack of jurisdic tion. The ,motion was brought after pleadings had been closed.
The claim arises out of the loss of a cargo consisting of $60,400.00 in Canadian bank notes shipped from Basel, Switzerland via Zurich to Montreal. The defendant applicant carried the cargo on the second leg of the journey, that is, from Zurich to Montreal. The bank notes arrived at Montreal but were lost after being unloaded and before the consignee, The Royal Bank of Canada, received them or was notified of their arrival.
The defendant applicant admits liability for the loss and has paid into Court the sum of $73.25 alleging that its liability is limited to that amount pursuant to the hereinafter-mentioned provisions of the Carriage by Air Act'. The plaintiff respond ent alleges that the loss of the cargo and the failure to notify the police of the loss amount to gross negligence and, as a result, the limitation of
liability does not apply.
The bank notes were shipped under an air way- bill and the claim is governed by a convention entitled Certain Rules Relating to International R.S.C. 1970, c. C-14.
Carriage by Air signed at Warsaw in 1929 and amended by a further convention signed at The Hague in 1955, both of which are adopted by and incorporated in the Carriage by Air Act. The issue is clearly whether there was gross negligence on the part of Air Canada or its agents which, by reason of the operation of Article 25 of the Warsaw Convention, as amended by Article XIII of The Hague Convention, would prevent the defendant from availing itself of the limitation of liability provided for in Article 22 of the Warsaw Convention as amended by Article XI of The Hague Convention.
In the case of Canadian Fur Company (NA) Ltd. v. KLM Royal Dutch Airlines [1974] 2 F.C. 944, I held that this Court had no jurisdiction to hear a cargo claim against an air carrier. In that judgment I went at some length into the reasons why no such jurisdiction existed and no useful purpose will be served by reiterating them here.
In the case at bar, I can find nothing either in the facts or in the arguments advanced by counsel for the respondent which would lead me to a different conclusion from that which I arrived at in the former case. From a factual standpoint, the mere fact that the applicant defendant is Air Canada does not create jurisdiction pursuant to section 17 of the Federal Court Act as Air Canada is not the Crown nor a "corporation agent of the Crown" which could be sued as if it were in fact the Crown. Furthermore, even if the Crown were a party to the action, Air Canada, on the facts, could not be sued either as a "servant" of the Crown within the meaning of section 17(4) of the Federal Court Act. (Refer to judgment of my brother Gibson J. in King v. The Queen; King v. Air Canada, unreported, dated November 17, 1971, Court File No. T-2573-71, wherein the status of Air Canada is considered at some length.)
Counsel for the plaintiff respondent argued that the word "aeronautics," in section 23 of the Fed eral Court Act, should be given a broad interpreta tion by reason of the principle enumerated in the case of Okanagan Helicopters Ltd. v. Canadian
Pacific Limited 2 . At page 467 in that case, my brother Mahoney J. stated as follows:
The Oxford English Dictionary defines aeronautics as: "the science, art or practice of sailing in the air; aerial navigation." Other acceptable dictionaries are no more elaborate in their definitions. The question is whether or not a helicopter, resting on the ground with its rotor in motion in anticipation of take-off is engaged in aeronautics. I think it is. Clearly if it were airborne it would be and I think it would be a strained and artificial interpretation to separate activities on the ground essential to the act of flying from the flight itself.
Furthermore, in the absence of any clear contrary intention in the statute, the Court should conclude that Parliament intended it, in the application of its judicial jurisdiction, to give the word the same meaning that Parliament itself, in the application of its legislative jurisdiction, has given it. Parlia ment has legislated with respect to the use and operation of aircraft and to accidents involving aircraft and that legislation applies as well to use, operation or accidents on the ground as in the air.
(This case was reversed in part by a judgment of the Court of Appeal on the 18th, of December, 1974 [A-127-741, but the appeal does not affect the above-quoted passage. As a matter of fact, the question of jurisdiction was not raised on appeal and the Court of Appeal carefully stated that it was refraining from making any finding regarding jurisdiction.)
In my view, there is nothing in the above pas sage which, in any way, either directly or indirect ly implies that the word "aeronautics" would apply to a cargo claim against an air carrier. On the contrary, I feel that the interpretation given to the word "aeronautics" falls well within the normal dictionary definition and generally accepted mean ing of the word.
An article, published in 1969 by Colin H. McNairn in (1969) 47 Can. Bar. Rev. 355 was also quoted, at some length, by counsel as author ity for the proposition that the meaning of the word "aeronautics" should be extended to include the rights between the shipper and the carrier in contracts of carriage of goods by air. I have con sidered the article carefully and cannot find that it supports such a proposition. In any event, for the purpose of the Federal Court Act, in view of the fact that, where jurisdiction covering contracts of carriage of goods by ship is given to this Court by
2 [1974] 1 F.C. 465.
section -22(2)(f), jurisdiction over such contracts, in so far as carriage by air is concerned, is careful ly excluded by reason of the wording of section 22(3)(b), it seems clear that the word cannot be taken to include contracts of carriage of goods by air. Section 22(3)(b) reads as follows:
22. (3) For greater certainty it is hereby declared that the jurisdiction conferred on the Court by this section is applicable
(b) in relation to all aircraft where the cause of action arises out of paragraphs (2)(j), (k) and (I) whether those aircraft are Canadian or not and wherever the residence or domicile of the owners may be; [The underlining is mine.]
Finally, it was argued that the Federal Court has been granted jurisdiction pursuant to section 23 of the Federal Court Act on the grounds that the right of action is founded on an act of the Parliament of Canada, namely, the Carriage by Air Act and, more specifically, Article 30 of the Warsaw Convention annexed as Schedule I of the Act, and that such carriage constitutes: "... works and undertakings ... extending beyond the limits of a province ...." Although the right of recovery against Air Canada may well be founded on Article 30 of Schedule I of the Carriage by Air Act, I do not hesitate in coming to the conclusion that the carriage of air freight does not constitute a work or undertaking of the Crown; it is the work and undertaking of Air Canada, a corporation created by the Crown.
I therefore conclude that this Court has not been granted jurisdiction to entertain the present action against Air Canada. The motion of the applicant Air Canada will be granted with costs and the action against it shall be dismissed with costs to be paid by the plaintiff forthwith after taxation thereof.
In so far as the other defendant Swissair and Swiss Air Transport Co. Ltd. is concerned, although it did have a representative at the hear ing of the motion, it was not a party to the application nor did it participate in any way in the application. However, since it will be obviously entitled to the dismissal of the action on the same grounds as Air Canada, in order to avoid further proceedings and unnecessary expense, this Court ex proprio motu will be dismissing the action as against that defendant with costs.
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