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T-891-76
Haida Helicopters Limited and Haida Industries Limited (Plaintiffs)
v.
Field Aviation Company Limited, C. C. Carruth- ers, R. E. Carruthers, Dominion Helicopters Ltd., George Gregg and the Queen in right of Canada (Defendants)
Trial Division, Mahoney J.—Toronto, May 29; Ottawa, June 7, 1978.
Jurisdiction — Practice — Application to strike statement of claim as against all defendants except the Queen in action for damages for breach of contract and negligence — Faulty installation and inspection of heater kit in helicopter that resulted in its being burned — Parallel action, except for defendant the Queen, in Supreme Court of Ontario — That action dismissed `without prejudice to the plaintiffs' pending action in the Federal Court of Canada" — Whether or not applicant defendants have acceded to the jurisdiction of the Federal Court because of position taken by them in the Supreme Court of Ontario — Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 23 — Federal Court Rules 419 and 474.
This is an application by defendants, other than the Queen, for an order striking out the statement of claim against them for want of jurisdiction. It is brought pursuant to Rules 419 and 474. The action is for damages for breach of contract and negligence. The situation involved a contract, between subjects, to install a heater kit in a helicopter, and a second contract, between subjects, for inspection after installation with a view to certification as to airworthiness and serviceability. The faulty installation, which was not detected during a negligently per formed inspection, resulted in a fire that destroyed the helicop ter. A parallel action in the Supreme Court of Ontario, (except for the Queen), was dismissed "without prejudice to the plain tiffs' pending action in the Federal Court of Canada". The applicant defendants rely on provisions of the Aeronautics Act, the Air Regulations, and the Canada-U.S. Bilateral Agree ment in respect of Aircraft, while plaintiffs challenge the Court's jurisdiction on the basis of the decision in Quebec North Shore Paper Co. v. Canadian Pacific Ltd. [1977] 2 S.C.R. 1054.
Held, the application is allowed. The challenge to the Court's jurisdiction is based on the decision of the Supreme Court of Canada in Quebec North Shore Paper Co. v. Canadian Pacific Ltd., which is directly on point notwithstanding the fact that section 23 of the Federal Court Act was considered in the context of extra-provincial works and undertakings in that case while here the section must be considered in the context of aeronautics. While the plaintiffs did not present their position in the aspect of an estoppel, that appears to be the substance of the position. An estoppel cannot operate to oust the general law
of the land. It cannot operate to confer jurisdiction on a Court where none exists. If regarded as an overt acquiescence to this Court's jurisdiction, as the plaintiffs argue, what happened in the Supreme Court of Ontario is entirely insufficient to achieve the desired result. The Court is unaware of any reported case where that result has been found in the absence of the acquies cence of the Court concerned as well as the parties.
Quebec North Shore Paper Co. v. Canadian Pacific Ltd. [1977] 2 S.C.R. 1054, applied. Maritime Electric Co.,
Ltd. v. General Dairies, Ltd. [1937] A.C. 610, applied.
APPLICATION. COUNSEL:
W. B. Williston, Q.C., and J. A. Campion for
plaintiffs.
K. C. Vaughan and M. J. Melko for
defendants.
G. R. Garton for defendant the Queen.
SOLICITORS:
Fasken & Calvin, Toronto, for plaintiffs.
Lane, Breck & Associates, Toronto, for defendants.
Deputy Attorney General of Canada for defendant the Queen.
The following are the reasons for judgment rendered in English by
MAHONEY J.: This is an application by the defendants (hereinafter "the applicant defend ants") other than Her Majesty the Queen, who takes no position, for an order striking out the statement of claim and dismissing the action against them for want of jurisdiction. It is brought pursuant to Rules 419 and 474.
This is an action for damages for breach of contract and negligence arising out of the follow ing material facts as alleged in the statement of claim. The first named plaintiff (hereinafter "Helicopters") was lessee and the second named plaintiff was owner of a helicopter registered in Canada as CF-BMK. Helicopters contracted with the defendant, Field, for the purchase and installa tion of a heater kit in CF-BMK. It was installed negligently and in breach of the contract by Field's employees, the two Carruthers. Helicopters also contracted with the defendant, Dominion, for the
inspection of CF-BMK, after installation of the heater, with a view to its certification as airworthy and serviceable. Dominion's servant Gregg carried out the inspection negligently and in breach of the contract and did not discover the faulty installa tion by Field's employees which resulted in a fire that began while CF-BMK was in flight and destroyed it on the ground.
The challenge to the Court's jurisdiction is based on the decision of the Supreme Court of Canada in Quebec North Shore Paper Company v. Canadian Pacific Limited' which is, in my view, directly on point notwithstanding that there sec tion 23 of the Federal Court Act 2 was considered in the context of extra-provincial works and under takings while here the section must be considered in the context of aeronautics.
23. The Trial Division has concurrent original jurisdiction 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 an Act of the Parliament of Canada or otherwise in relation to any matter coming within any following class of subjects, namely bills of exchange and promissory notes where the Crown is a party to the proceedings, aeronautics, and works and undertak ings connecting a province with any other province or extending beyond the limits of a province, except to the extent that jurisdiction has been otherwise specially assigned.
The Supreme Court held, at pages 1057-58, that
When s. 23 of the Federal Court Act speaks of a claim for relief or a remedy "under an Act of the Parliament of Canada or otherwise", it cannot be given a construction that would take it beyond the scope of the expression "administration of the laws of Canada" in s. 101.
Section 101 is, of course, section 101 of The British North America Act, 1867. 3
101. The Parliament of Canada may, notwithstanding any thing in this Act, from Time to Time provide for the Constitu tion, Maintenance, and Organization of a General Court of Appeal for Canada, and for the Establishment of any addition al Courts for the better Administration of the Laws of Canada.
' [1977] 2 S.C.R. 1054.
2 R.S.C. 1970 (2nd Supp.), c. 10.
3 30 & 31 Vict., c. 3 (U.K.).
After considering the question, the Court conclud ed, beginning at page 1065, that section 101, requires
that there be applicable and existing federal law, whether under statute or regulation or common law, as in the case of the Crown, upon which the jurisdiction of the Federal Court can be exercised. Section 23 requires that the claim for relief be one sought under such law.
In so far as the applicant defendants are con cerned, there is no question of Crown law apply ing. If this Court has jurisdiction, it is because the relief is sought under federal legislation.
The particulars allege that Field and the Carruthers
... failed to comply with rules governing the installation of combustion heaters as provided in the Aircraft Engineering and Inspection Manual and in particular Part II, Chapter III, Paragraph 3.7.1 and 3.7.2 thereof, contrary to section 211(9) of the Air Regulations.
As to Dominion and Gregg, it is alleged
... they certified that CF-BMK, with the Janitrol heater kit installed, was airworthy and serviceable when they knew or ought to have known from a proper inspection of CF-BMK, the installation of the Janitrol heater kit, and the aforesaid draw ings and reports that the said aircraft was not airworthy and serviceable by reason of the installation of the Janitrol heater kit in the manner described herein contrary to section 219A of the Air Regulations.
The plaintiffs plead and rely on provisions of the Aeronautics Act, 4 the Air Regulations, 5 particu larly sections 219A and 211(1),(8) and (9), and the Canada-U.S. Bilateral Agreement in respect of Aircraft.
It was not argued that either the Aircraft Engi neering and Inspection Manual or the Canada- U.S. Bilateral Agreement in respect of Aircraft are federal law. No substantive provision of the Aeronautics Act has been suggested or suggests itself to me as being a provision under which the relief herein is sought against the applicant defendants. The same is the case for the particular provisions of the Regulations pleaded. This Court is without jurisdiction to entertain the • action against the applicant defendants.
° R.S.C. 1970, c. A-3.
5 SOR/61-10, as amended.
It appears from the affidavit filed in opposition to this motion that the plaintiff, Haida Industries Limited, commenced an action against the appli cant defendants, arising out of the same facts, in the Supreme Court of Ontario on May 18, 1971. Pleadings closed February 23, 1972 and a notice of trial was served by the applicant defendants on that plaintiff on January 27, 1976. This action was commenced March 2, 1976, and, on May 24, 1976, an order issued in the Ontario action adding Helicopters as a plaintiff and amending the state ment of claim accordingly. Thus, from March 24, 1976, there were parallel actions in this Court and the Supreme Court of Ontario. As between the plaintiffs and applicant defendants the causes of action and allegations of fact were identical. The only distinguishing feature was that Her Majesty was a defendant in this Court. On November 26, 1976, on application by the applicant defendants, the Ontario action was dismissed with costs and "without prejudice to the plaintiffs' pending action in the Federal Court of Canada".
The plaintiffs' affidavit states:
I am informed by John Campion, counsel appearing on the motion to dismiss the Supreme Court action on behalf of the plaintiffs and do verily believe that, he, on behalf of the plaintiffs in the Supreme Court action, opposed the motion to dismiss the action therein on the grounds that there was a potential problem of jurisdiction in the Federal Court with respect to the first defendants. Counsel on behalf of the first defendants took the position that there was no issue as to jurisdiction being raised in the Federal Court proceedings.
The plaintiffs argue that, because of the position taken by them in the Supreme Court of Ontario, the applicant defendants have acceded to the juris diction of this Court. This argument cannot succeed.
While the plaintiffs did not present their posi tion in the aspect of an estoppel, that would appear to be the substance of the position. It is trite law that an estoppel cannot operate so as to oust the
general law of the land. 6 It cannot operate to confer jurisdiction on a court where none exists.
If regarded as an overt acquiescence to this Court's jurisdiction, as the plaintiffs argue, what happened in the Supreme Court of Ontario is entirely insufficient to achieve the desired result. I have found no reported case where that result has been found in the absence of the acquiescence of the court concerned as well as the parties.' That acquiescence is most frequently to be inferred from the fact that the court proceeded to judg ment, with the consent of the parties, notwith standing some doubt as to its jurisdiction. Where the court's acquiescence has been forthcoming, and the doubts as to its jurisdiction well founded, the court has been held to have acted as an arbitrator, with all that involves, rather than a court. In other words, it acts as a private rather than a public tribunal, something not to be under taken lightly in the best and most compelling of circumstances, and not at all in the absence of the clear and complete agreement of the parties.
The applicant defendants did not ask for costs.
The order sought will be granted and the action against the defendants, other than Her Majesty, will be dismissed without costs. This will obviously entail an extensive amendment to the statement of claim if the plaintiffs wish to proceed with their action against Her Majesty. Rather than fix dead lines and deal with details of what should be struck from the statement of claim and what other amendments ought to be made, I propose to grant leave to the plaintiffs to file and serve an amended statement of claim on Her Majesty and to stay proceedings herein in the interval.
6 Maritime Electric Company, Limited v. General Dairies, Limited [1937] A.C. 610.
7 Cases considered include:
Martin v. Cornhill Insurance Co. [1935] 2 D.L.R. 682. Attorney General of Nova Scotia v. Gregory (1886) 11 App. Cas. 229. Conant Paints Ltd. v. Clark [1955] 2 D.L.R. 151. Burgess v. Morton [1896] A.C. 136. Canadi- an Pacific Railway Company v. Fleming (1893) 22 S.C.R. 33.
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