T-2278-77
Bensol Customs Brokers Limited, D. H. Grosven-
or Incorporated, Neuchatel Swiss General Insur
ance Company Limited (Plaintiffs)
v.
Air Canada (Defendant)
Trial Division, Walsh J.—Montreal, May 8;
Ottawa, May 26, 1978.
Jurisdiction — Aeronautics — Air cargo on international
flight to Mirabel not delivered — Action based on breach of
contract and tort — Statutes, international convention adopted
by statute, and regulations affecting various aspects of car
riage of goods by air, including air waybill — Whether or not
action founded on applicable Canadian law necessary to exer
cise of Court's jurisdiction, pursuant to the Quebec North
Shore decision — Federal Court Act, R.S.C. 1970 (2nd Supp.),
c. 10, s. 23 — Carriage by Air Act, R.S.C. 1970, c. C-14, s. 2
— Convention for the Unification of Certain Rules Relating to
International Carriage by Air (Warsaw Convention), Articles
18(1),(2), 28(1), 30(3) — Aeronautics Act, R.S.C. 1970, c. A-3,
ss. 6(1), 14(1) — The British North America Act, 1867, 30 &
31 Victoria, c. 3 (U.K.) (R.S.C. 1970, Appendix II).
This is an application for preliminary determination of a
question of law pursuant to Rule 474 on the question of the
jurisdiction of the Court, by virtue of section 23 of the Federal
Court Act, to entertain this action. Defendant received cargo in
good order and condition from a company in London, England,
for carriage to Mirabel Airport, in the Province of Quebec. The
shipment was never delivered to the consignee, but was lost or
stolen while in defendant's custody. The action is based on the
contract of carriage and on the negligence of defendant's
employees. The issue is whether or not there is applicable
Canadian law as required by the Quebec North Shore case.
Held, the application is allowed and the action is dismissed.
The federal authority has the power to vest claims for relief or
remedies under an Act of the Parliament of Canada relating to
carriage of goods by air from abroad into Canada in the
Federal Court. The question before the Court is not whether
the federal authority has the right to adopt such legislation or
whether such legislation has been adopted but rather the
question of whether the proceedings find their origin in such
legislation. The plaintiffs cannot sue on the legislation alone.
What the legislation and more specifically the Convention does
is to set out the requirements of a waybill covering the interna
tional carriage of cargo. It is the waybill itself which is the
contract between the parties on which the action must be
brought. Plaintiffs' allegations of tort are matters within the
provincial area of jurisdiction.
McNamara Construction (Western) Ltd. v. The Queen
[1977] 2 S.C.R. 654, applied. Quebec North Shore Paper
Co. v. Canadian Pacific Ltd. [1977] 2 S.C.R. 1054,
applied. R. v. Prytula [1978] 1 F.C. 198, followed.
Canadian Fur Co. (NA) Ltd. v. KLM Royal Dutch Air
lines [1974] 2 F.C. 944, considered. Swiss Bank Corp. v.
Air Canada [1976] 1 F.C. 30, considered.
APPLICATION.
COUNSEL:
Gerald Barry for plaintiffs.
Jean Clerk and Michel Martineau for
defendant.
SOLICITORS:
McMaster Meighen, Montreal, for plaintiffs.
Giard, Gagnon, Clerk & Perron, Montreal,
for defendant.
The following are the reasons for judgment
rendered in English by
WALSH J.: This is an application for prelim
inary determination of a question of law pursuant
to Rule 474 of the Rules of this Court on the
question of the jurisdiction of the Court to enter
tain this action. On or about March 19 defendant
received from Ace Shipping Limited in London,
England for air carriage to Mirabel Airport in the
Province of Quebec one bale containing 1080 raw
mink skins in good order and condition for car
riage and delivery to plaintiff Bensol. The ship
ment was never delivered to the consignee but was
lost or stolen while in the custody of defendant.
The action is based on the contract of carriage and
on the negligence of defendant's employees. Plain
tiffs contend that the Court has jurisdiction by
virtue of section 23 of the Federal Court Act,
R.S.C. 1970 (2nd Supp.), c. 10, which reads as
follows:
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. [Underlining
mine.]
With respect to the question of whether there is
applicable Canadian law as required by the case of
Quebec North Shore Paper Company v. Canadian
Pacific Limited' in which Laskin C.J. stated at
pages 1065-66:
It is also well to note that s. 101 does not speak of the
establishment of Courts in respect of matters within federal
legislative competence but of Courts "for the better administra
tion of the laws of Canada". The word "administration" is as
telling as the plural words "laws", and they carry, in my
opinion, the requirement 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.
plaintiffs contend that such law is to be found in
an Act to give effect to a Convention for the
Unification of Certain Rules Relating to Interna
tional Carriage by Air (Carriage by Air Act) 2 and
the Convention annexed thereto. Section 2 of that
statute reads in part as follows:
2. (1) On and after the 1st day of July 1947, the provisions
of the Convention as set out in Schedule I, so far as they relate
to the rights and liabilities of carriers, passengers, consignors,
consignees and other persons and subject to the provisions of
this section, have the force of law in Canada in relation to any
carriage by air to which the Convention applies, irrespective of
the nationality of the aircraft performing that carriage.
(2) Subject to this section, the provisions of the Convention
set out in Schedule I, as amended by the Protocol set out in
Schedule III, in so far as they relate to the rights and liabilities
of carriers, passengers, consignors, consignees and other per
sons, have the force of law in Canada in relation to any
carriage by air to which the Convention as so amended applies,
irrespective of the nationality of the aircraft performing that
carriage.
The Convention requires that there be an air
waybill. Article 13(3) provides that if the carrier
admits the loss of the cargo the consignee is en
titled to put into force against the carrier the
rights which flow from the contract of carriage.
Article 18 (1) and (2) read as follows:
Article 18
(1) The carrier is liable for damage sustained in the event of
the destruction or loss of, or of damage to, any registered
baggage or any cargo, if the occurrence which caused the
damage so sustained took place during the carriage by air.
[1977] 2 S.C.R. 1054.
2 R.S.C. 1970, e. C-14.
(2) The carriage by air within the meaning of the preceding
paragraph comprises the period during which the baggage or
cargo is in charge of the carrier, whether in an aerodrome or on
board an aircraft, or, in the case of a landing outside an
aerodrome, in any place whatsoever.
Article 28 (1) of the Convention reads:
Article 28
(1) An action for damages must be brought, at the option of
the plaintiff, in the territory of one of the High Contracting
Parties, either before the Court having jurisdiction where the
carrier is ordinarily resident, or has his principal place of
business, or has an establishment by which the contract has
been made or before the Court having jurisdiction at the place
of destination.
Article 30(3) reads:
Article 30
(3) As regards baggage or cargo, the passenger or consignor
will have a right of action against the first carrier, and the
passenger or consignee who is entitled to delivery will have a
right of action against the last carrier, and further, each may
take action against the carrier who performed the carriage
during which the destruction, loss, damage or delay took place.
These carriers will be jointly and severally liable to the passen
ger or to the consignor or consignee.
In addition to this statute plaintiffs refer to the
Aeronautics Act 3 . Subsection 6(1) of this Act
provides for the making of regulations governing
inter alia
6. (1) .
(d) the conditions under which aircraft may be used or
operated;
(e) the conditions under which goods, mails and passengers
may be transported in aircraft and under which any act may
be performed in or from aircraft or under which aircraft may
be employed;
By section 14(1) of the Act the Canadian Trans
port Commission may make regulations inter alla
14. (1)...
(i) providing for uniform bills of lading and other
documentation;
(m) respecting traffic, tolls and tariffs and providing for
(i) the disallowance or suspension of any tariff or toll by
the Commission,
(ii) the substitution of a tariff or toll satisfactory to the
Commission, or
(iii) the prescription by the Commission of other tariffs or
tolls in lieu of the tariffs or tolls so disallowed;
3 R.S.C. 1970, c. A-3.
(n) respecting the manner and extent to which any regula
tions with respect to traffic, tolls or tariffs shall apply to any
air carrier licensed by the Commission or to any person
operating an international air service pursuant to any inter
national agreement or convention relating to civil aviation to
which Canada is a party;
Plaintiffs contend that these are laws of Canada
and that Parliament could validly confer jurisdic
tion on the Federal Court for the administration of
them, and that this has been done by section 23, by
virtue of the provisions of section 101 of The
British North America Act, 1867 which reads as
follows:
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.
In order to succeed in their contentions plaintiffs
must establish that the action comes within the
heading either of Aeronautics as used in section 23
or of Works and Undertakings Extending Beyond
the Limits of a Province. Aeronautics was not of
course referred to as such in The British North
America Act, 1867 but Works and Undertakings
are referred to in section 92(10)(a) giving exclu
sive jurisdiction to the provinces except for
92. (10)...
a. Lines of Steam or other Ships, Railways, Canals, Tele
graphs, and other Works and Undertakings connecting the
Province with any other or others of the Provinces, or
extending beyond the Limits of the Province:
Two judgments of my brother Justice Addy,
both rendered however before the judgment in the
Quebec North Shore case (supra), have dealt with
the jurisdiction of this Court over a claim arising
out of international carriage by air into Canada
both cases rejecting the jurisdiction. In the first of
these, that of Canadian Fur Company (NA) Ltd. v.
KLM Royal Dutch Airlines' a considerable part of
the argument appears to have been devoted to
attempting to establish that the words "navigation
and shipping" in section 22(1) of the Federal
Court Act included navigation by air. This conten
tion was categorically rejected, the argument that
navigation and shipping by air might have been
4 [1974] 2 F.C. 944.
intended to be included in the use of these words in
section 91(10) of The British North America Act,
1867 being found to be absurd. The second argu
ment however was based on the use of the word
"aeronautics" in section 23 of the Federal Court
Act and the question of whether the meaning was
to be extended to include a claim for loss of cargo
arising from negligence of the carrier was con
sidered, and the cases of Johannesson v. The
Rural Municipality of West St. Pauls, Okanagan
Helicopters Ltd. v. Canadian Pacific Limited 6 , In
re The Regulation and Control of Aeronautics in
Canada' and Attorney-General of Canada v.
Attorney-General of Ontario 8 as well as various
dictionary definitions of "aeronautics" were dealt
with. He states at page 952:
Nowhere can I find the word "aeronautics" used to describe,
even remotely, a body of laws, rules or jurisprudence governing
the right of a citizen to claim against an air carrier for
negligence or pursuant to a contract of carriage. Before extend
ing to a word in a statute, a meaning which is not to be found in
a dictionary and which is not of common usage, an extremely
cogent and compelling reason to do so must exist, a much more
compelling one than would be required to restrict the meaning
of a word. No reason whatsoever was advanced as to why such
an extended meaning should be given except to point to section
14(1)(i) of the Aeronautics Act wherein, among the many
other powers given to the Commission by section 14, it is given
the power to make regulations providing for uniform bills of
lading and other documentation. The mere fact that in the
Aeronautics Act such a power to make regulations concerning
bills of lading is included among the numerous matters in the
Act, all of which concern the control of air navigation and
airports generally, is certainly not sufficient grounds to inter
pret the word "aeronautics" as used in section 23 of the
Federal Court Act as including the jurisdiction to deal with
claims between subjects arising out of an air bill.
and again on page 953:
Parliament may well grant a remedy or create a right but the
Federal Court of Canada does not, by such enactment alone,
acquire jurisdiction if other courts in the land possess the
required jurisdiction to decide the matter (ref. Federal Court
Act, section 25) and, there is no doubt that the Superior Court
of Quebec possesses jurisdiction to deal with this matter.
5 [1952] 1 S.C.R. 292.
6 [1974] 1 F.C. 465.
[1932] A.C. 54.
8 [1937] 1 D.L.R. 673 and [1937] A.C. 326 at 351.
In the case of Swiss Bank Corporation v. Air
Canada 9 he makes the same conclusion as to the
meaning of the word "aeronautics". At page 34 he
states:
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. [Underlining mine.]
As pointed out in argument before me this passage
may not be entirely accurate in view of the word
ing of section 23 of the Federal Court Act (supra)
because of the comma after the word proceedings
which seems to indicate that jurisdiction is con
ferred inter alia over "bills of exchange and prom
issory notes where the Crown is a party to the
proceedings" but that the same limitation does not
apply to the word "aeronautics" which stands by
itself.
In the Trial judgment in the case of Canadian
Pacific Ltd. v. Quebec North Shore Paper
Con1Pany 10 which dealt with rail and sea transport
rather than air transport Addy J. no longer limited
the meaning of "works and undertakings" as used
in section 23 of the Federal Court Act to works
and undertakings of the Crown for he stated at
page 410:
The words "... works and undertakings ... extending
beyond a limit of a province ..." as used in section 23 of the
Federal Court Act are exactly the same words as used in
subsection 92(10)(a) of the British North America Act and
therefore if Parliament by that subsection does have jurisdic
tion in the present case, it is evident that the jurisdiction must
be taken to have been granted by Parliament to the Federal
Court since the former chose to use the precise words on which
its legislative power is founded.
This was confirmed in the Court of Appeal judg
ment in the said case" in which Le Dain J. stated
at page 652:
9 [1976] 1 F.C. 30.
10 [1976] 1 F.C. 405.
11 [1976] 1 F.C. 646.
It is reasonable to conclude that section 23 contemplates that
where Parliament has legislative jurisdiction to make laws in
relation to a matter because it falls within the class of subjects
described in section 92(10)(a) of the B.N,A. Act—"Lines of
Steam or other Ships, Railways, Canals, Telegraphs, and other
Works and Undertakings connecting the Province with any
other or others of the Provinces, or extending beyond the Limits
of the Province"—this Court has jurisdiction in a case in which
the claim for relief relates to such a matter.
The Supreme Court reversed these judgments
on the ground that there had to be applicable
federal law for the Federal Court to administer.
The Supreme Court judgment [[1977] 2 S.C.R.
1054] assessed section 23 under the terms of sec
tion 101 of The British North America Act, 1867
authorizing the establishment of the Court. In
rendering the judgment of the Court Chief Justice
Laskin stated at page 1058:
In the present case there is no Act of the Parliament of
Canada under which the relief sought in the action is claimed.
The question of jurisdiction of the Federal Court hinges there
fore on the words in s. 23 "or otherwise", and this apart from
the additional and sequential question whether the claim is in
relation to any matter coming within any of the classes of
subjects specified in the latter part of s. 23. The contention on
the part of the respondents, which was in effect upheld in the
Federal Courts, was that judicial jurisdiction under s. 101 is
co-extensive with legislative jurisdiction under s. 91* and,
therefore, s. 23 must be construed as giving the Federal Court
jurisdiction in respect of the matters specified in the latter part
of the section, even in the absence of existing legislation, if
Parliament has authority to legislate in relation to them. The
contention is complemented by the assertion that there is
applicable law to govern the claims for relief, pending any
legislation by Parliament, and that it is the law of the Province
which must, pro tanto, be regarded as federal law. This conten
tion suggests a comprehensive incorporation or referential
adoption of provincial law to feed the jurisdiction of the
Federal Court under s. 23.
Reference was made to the cases of Consolidat
ed Distilleries Limited v. Consolidated Exporters
Corporation Ltd. 12 and the judgment of the Privy
* In the present case since there is no question that this could
come under Navigation and Shipping which is assigned to the
federal authority under section 91(10) of The British North
America Act, 1867, it is section 92(10)(a) (supra) in which the
question of jurisdiction is argued, but the same reasoning would
apply.
12 [1930) S.C.R. 531.
Council in Consolidated Distilleries Limited v.
The King 13 setting aside the judgment of the
Supreme Court in the said case 14 . At page 1060
Chief Justice Laskin quotes the judgment of Duff
J. in the second Consolidated Distilleries Limited
case in the Supreme Court at page 422 in which he
stated:
I find no difficulty in holding that the Parliament of Canada
is capable, in virtue of the powers vested in it by section 101 of
the British North America Act, of endowing the Exchequer
Court with authority to entertain such actions as these. I do not
doubt that "the better administration of the laws of Canada,"
embraces, upon a fair construction of the words, such a matter
as the enforcement of an obligation contracted pursuant to the
provisions of a statute of that Parliament or of a regulation
having the force of statute.
In the Privy Council decision Lord Russell of
Killowen stated at page 521 in discussing section
30(d) of the Exchequer Court Act which gave the
Court jurisdiction "in all other actions and suits of
a civil nature at common law or equity in which
the Crown is plaintiff or petitioner":
It was suggested that if read literally, and without any limita
tion, that sub-section would entitle the Crown to sue in the
Exchequer Court and subject defendants to the jurisdiction of
that Court, in respect of any cause of action whatever, and that
such a provision would be ultra vires the Parliament of Canada
as one not covered by the power conferred by s. 101 of the
British North America Act. Their Lordships, however, do not
think that sub-s. (d), in the context in which it is found, can
properly be read as free from all limitations. They think that in
view of the provisions of the three preceding sub-sections the
actions and suits in sub-s. (d) must be confined to actions and
suits in relation to some subject-matter, legislation in regard to
which is within the legislative competence of the Dominion. So
read, the sub-section could not be said to be ultra vires, and the
present actions appear to their Lordships to fall within its
scope.
Commenting on this Chief Justice Laskin states at
page 1063 of the Quebec North Shore case:
I do not take its statement that "sub-s. (d) must be confined to
actions ... in relation to some subject matter legislation in
regard to which is within the legislative competence of the
Dominion" as doing anything more than expressing a limitation
on the range of matters in respect of which the Crown in right
of Canada may, as plaintiff, bring persons into the Exchequer
Court as defendants. It would still be necessary for the Crown
to found its action on some law that would be federal law under
that limitation.
13 [1933] A.C. 508.
14 [1932] S.C.R. 419.
Later on the same page in commenting on Addy
J.'s judgment he states:
Addy J. did not deal with the effect of s. 101 of the British
North America Act upon s. 23 of the Federal Court Act, and
appeared to assume that he had jurisdiction if the enterprise
contemplated by the agreement as a whole fell within federal
legislative power. As I have already indicated, the question
upon which he proceeded is not reached unless the claim for
relief is found to be one made "under an Act of the Parliament
of Canada or otherwise".
In the appeal judgment in this case Le Dain J. had
stated at page 653:
In so far as the civil law of Quebec applies to a matter within
federal legislative jurisdiction with respect to an extraprovincial
undertaking contemplated by section 92(10)(a) of the B.N.A.
Act, it forms part of the laws of Canada within the meaning of
section 101 of the B.N.A. Act since it could be enacted,
amended or repealed by the Parliament of Canada. In other
words, Parliament could validly enact contract law to apply to
matters falling within its jurisdiction with respect to such
undertakings.
Chief Justice Laskin states at pages 1064-65. of the
Supreme Court Judgment, after quoting the above
passage:
I do not agree with the statement in the foregoing passage
that "in so far as the civil law of Quebec applies to a matter
within federal legislative jurisdiction ... it forms part of the
laws of Canada within the meaning of s. 101 of the B.N.A. Act
since it could be enacted, amended or repealed by the Parlia
ment of Canada". I do not understand how provincial laws can
be amended or repealed by Parliament, albeit in relation to a
matter within federal competence, unless they first have been
made laws of Canada by adoption or enactment. I think it begs
the question raised by the words "or otherwise" to say that
merely because Quebec law applies to the claim for relief in
this case, as it clearly would if the action were brought in the
Quebec Superior Court, that law forms part of the laws of
Canada, although there is no federal re-enactment or referen
tial incorporation.
The learned Chief Justice however on page 1065
refers inter alia to the case of Johannesson v. West
St. Paul 15 stating in connection with this that
"Provincial legislation cannot interfere with the
integrity of enterprises under federal regulatory
jurisdiction". In the Johannesson case Chief Jus
tice Rinfret in discussing the decision of the Privy
Council in the Aeronautics case 16 stated at page
303:
15 [1952] 1 S.C.R. 292.
16 [1932] A.C. 54.
... I entertain no doubt that the decision of the Judicial
Committee is in its pith and substance that the whole field of
aerial transportation comes under the jurisdiction of the
Dominion Parliament.
The conclusion of Chief Justice Laskin as to juris
diction under section 23 is set out at page 1065
where he states:
Jurisdiction under s. 23 follows if the claim for relief is under
existing federal law, it does not precede the determination of
that question.
While defendant does not dispute the constitu
tional validity of the Aeronautics Act or the Car
riage by Air Act (hereinafter referred to as c.
C-14) it contends that the origin of the claim does
not arise from the statute or from the Convention
attached to C-14 as a Schedule. It is its contention
that the adopting of regulations for uniform bills
of lading tolls and tariffs and the right to prescribe
"conditions" of transportation for goods by air
must be distinguished from the contract itself. The
International Convention adopted in Canada by
C-14 provides minimal conditions and while it is
conceded that only the federal authority could
ratify it it is contended that this does not give
jurisdiction over contracts on which action can be
taken in the provincial courts. Reference was made
to section 2 of the waybill reading as follows:
2. (a) carriage hereunder is subject to the rules relating to
liability established by the Convention, unless such carriage is
not "international carriage" as defined by the Convention (See
carrier's tariffs and conditions of carriage for such definition);
(b) to the extent not in conflict with the foregoing, carriage
hereunder and other services performed by each carrier are
subject to:
(i) applicable laws (including national laws implementing
the Convention), Government regulations, orders and
requirements,
(ii) provisions herein set forth, and
(iii) applicable tariffs, rules, conditions of carriage, regula
tions and timetable (but not the times of departure and
arrival therein) of such carrier, which are made part
hereof and which may be inspected at any of its offices and
at airports from which it operates regular services.
(c) for the purpose of the Convention, the agreed stopping
places (which may be altered by carrier in case of necessity)
are those places except the place of departure and the place
of destination set forth on the face hereof or shown in
carrier's timetables as scheduled stopping places for the route
(d) in the case of carriage subject to the Convention, the
shipper acknowledges that he has been given an opportunity
to make a special declaration of the value of the goods at
delivery and that the sum entered on the face of the Air
Waybill as "Shipper's/Consignor's Declared Value For Car
riage", if in excess of 250 French gold francs (consisting of
65/ milligrams of gold with a fineness of 900 thousandths)
or their equivalent per kilogram constitutes such special
declaration of value.
and it was suggested that the applicable laws
might be the laws of the province in which delivery
was to be made in this case, Quebec, relating to
actions for breach of contract or negligence. In the
present case there is no proof as to where the loss
occurred or whether it occurred during transit; in
either event the carrier would be liable by virtue of
section 18(2) of the Convention (supra). Defend
ant argues however that this is merely a condition
of the contract and not the contract itself which
contains other conditions such as 120 days notice
of loss from the date of issue of the air waybill
which is not a requirement of the Convention.
Reference was also made in argument to section
2(5) of C-14 reading as follows:
2. ...
(5) Any liability imposed by Article 17 of Schedule I on a
carrier in respect of the death of a passenger shall be in
substitution for any liability of the carrier in respect of the
death of that passenger under any law in force in Canada, and
the provisions set out in Schedule II shall have effect with
respect to the persons by and for whose benefit the liability so
imposed is enforceable and with respect to the manner in which
it may be enforced.
and it was pointed out that there is no similar
provision with respect to loss of goods carried by
the carrier.
Plaintiffs contend on the contrary that their
rights against the carrier are a result of the opera
tion of law alone, relying inter alia on Articles
13(3) and 18(1) of the Convention (supra). It
should be noted however that the rights which the
consignee is entitled to put in force against the
carrier are "the rights which flow from the con
tract of carriage". Reference might be made to the
Aeronautics case (supra) in which the Privy Coun
cil stated at page 77:
Indeed, the terms of the Convention include almost every
conceivable matter relating to aerial navigation, and we think
that the Dominion Parliament not only has the right, but also
the obligation, to provide by statute and by regulation that the
terms of the Convention shall be duly carried out. With regard
to some of them, no doubt, it would appear to be clear that the
Dominion has power to legislate, for example, under s. 91, item
2, for the regulation of trade and commerce, and under item 5
for the postal services, but it is not necessary for the Dominion
to piece together its powers under s. 91 in an endeavour to
render them co-extensive with its duty under the Convention
when s. 132* confers upon it full power to do all that is
legislatively necessary for the purpose.
To sum up, having regard (a) to the terms of s. 132; (b) to
the terms of the Convention which covers almost every conceiv
able matter relating to aerial navigation; and (c) to the fact
that further legislative powers in relation to aerial navigation
reside in the Parliament of Canada by virtue of s. 91, items 2, 5
and 7, it would appear that substantially the whole field of
legislation in regard to aerial navigation belongs to the Domin
ion. There may be a small portion of the field which is not by
virtue of specific words in the British North America Act
vested in the Dominion; but neither is it vested by specific
words in the Provinces. As to that small portion it appears to
the Board that it must necessarily belong to the Dominion
under its power to make laws for the peace, order and good
government of Canada. Further, their Lordships are influenced
by the facts that the subject of aerial navigation and the
fulfilment of Canadian obligations under s. 132 are matters of
national interest and importance; and that aerial navigation is a
class of subject which has attained such dimensions as to affect
the body politic of the Dominion.
There is no doubt therefore that control over
aeronautics rests in the federal authorities and that
both the Carriage by Air Act (C-14) and the
Aeronautics Act fall in this authority and that the
incorporation into the former Act of the uniform
rules of the Warsaw Convention relating to inter
national air carriage and the regulations made by
virtue of the latter Act are infra vires and form
part of the law of Canada. The basis of the
judgment of the Supreme Court in the Quebec
North Shore case in finding that this Court did not
have jurisdiction over the contract because of the
absence of applicable federal law is therefore not
applicable in the proceedings.
Moreover, it is not seriously contested by
defendant that the service provided by Air Canada
* This refers to section 132 of The British North America
Act, 1867 reading as follows:
132. The Parliament and Government of Canada shall
have all Powers necessary or proper for performing the
Obligations of Canada or of any Province thereof, as Part of
the British Empire, towards Foreign Countries, arising under
Treaties between the Empire and such Foreign Countries.
for the carriage of passengers and cargo from
abroad into this country is a "work and undertak
ing" within the meaning of section 92(10)(a) of
The British North America Act, 1867. In this
connection reference might be made to the case of
Israel Winner, doing business under the name and
style of MacKenzie Coach Lines v. S.M.T. (East-
ern) Limited" at page 909 in which Kerwin J.
referred to the Privy Council case In re Regulation
and Control of Radio Communication in
Canada" s in which it was stated at page 315:
"Undertaking" is not a physical thing, but is an arrangement
under which of course physical things are used.
On this broad definition of "undertaking" a con
tract of carriage is such an undertaking.
Whether considered under the heading of
"Aeronautics" therefore or under the heading of
"Works and Undertakings connecting the Province
with any other . .. Provinces, or extending beyond
the Limits of the Province" the federal au
thority has the power to vest claims for relief or
remedies under an Act of the Parliament of
Canada relating to carriage of goods by air from
abroad into Canada in the Federal Court as was
done in section 23 of the Federal Court Act. As a
corollary it can be said that none of the provinces
of Canada has the right to legislate with respect to
international or interprovincial air traffic.
This is not the complete answer however to the
question raised as to the jurisdiction of the Court
in the present proceedings. We are not dealing
here with the right of the federal author
ity to adopt such legislation nor with the fact that
such legislation has in fact been adopted but with
the question of whether the proceedings find their
origin in such legislation. I disagree with plaintiffs'
contention that they could sue on the legislation
alone. What the legislation and more specifically
the Convention does is to set out the requirements
of a waybill covering the international carriage of
cargo. It is the waybill itself which is the contract
between the parties on which the action must be
brought. In addition to suing on this contract
17 [1951] S.C.R. 887.
18 [1932] A.C. 304.
plaintiffs also make certain allegations of acts and
omissions of defendant, its servants or agents with
intent to cause damage or recklessly with knowl
edge that damage would probably result, said alle
gations of tort being presumably made in an
attempt to avoid the limitation of liability provi
sion of the Convention as set out in the waybill.
These are matters within the area of provincial
jurisdiction.
Reference might be made in this connection to
the case of The Queen v. Prytula' 9 which I under
stand is now under appeal, in which my brother
Cattanach had to deal with an action by the
Crown to recover sums due by virtue of the
Canada Student Loans Act 20 having been subro-
gated by the bank which made the loan, and been
given the authority to institute proceedings in the
same manner as the bank by the provisions of
Regulation 21 adopted pursuant to the provisions
of the said Act. After discussing the finding of the
Supreme Court in McNamara Construction
(Western) Ltd. v. The Queen 21 Cattanach J. stated
at pages 203-204 in reference to the said Act and
Regulations:
While I accept without question that this is federal legislation, I
do not accept the contention that the action is "founded" upon
this legislation in the sense that the word "founded" is used by
the Chief Justice in the McNamara case.
It is true that the Minister is subrogated to the rights of the
bank on an unrepaid loan for which loss the Minister holds the
bank harmless but that does not bestow upon the Minister any
rights different from those of the bank in whose stead he
stands.
It is clear from the statement of claim that what the plaintiff
is suing upon is a breach of the agreement between the bank
and the student to which agreement the plaintiff is subrogated.
It is not enough that the liability arises in consequence of the
statute and regulations thereunder.
While the statute authorizes a bank to make a loan to a
student and prescribes the conditions of that loan and that the
bank is guaranteed against any loss by the Minister who, if he
makes good any loss by the bank, is then subrogated to the
rights of the bank, the statute does not, in itself, impose a
liability and there is no liability except that of the borrower
which flows not from the statute but from the borrower's
19 [1978] 1 F.C. 198.
2° R.S.C. 1970, c. S-17.
21 [1977] 2 S.C.R. 654.
contractual promise to repay the loan. The liability is based on
the agreement and the action is founded upon a breach of the
agreement, not upon a liability imposed by the statute as is the
case under the Income Tax Act, customs and excise legislation
and like federal legislation.
It may also be said that all the sections of an
Act must be read and interpreted not by them
selves but in the light of other sections of the said
Act. Section 23 of the Federal Court Act refers to
a claim for relief made or remedy sought "under
an Act of the Parliament of Canada". Section 25
reads as follows:
25. The Trial Division has original jurisdiction as well be
tween subject and subject as otherwise, in any case in which a
claim for relief is made or a remedy is sought under or by
virtue of the laws of Canada if no other court constituted,
established or continued under any of the British North Ameri-
ca Acts, 1867 to 1965 has jurisdiction in respect of such claim
or remedy. [Underlining mine.]
In the present case I am of the view that the
Superior Court of the Province of Quebec would
have jurisdiction over the subject matter of this
claim for breach of contract of carriage and tort,
although in doing so it would have to apply the
provisions of the Warsaw Convention made part of
federal law.
For the above reasons I find that this Court does
not have jurisdiction to entertain the present
action and dismiss same with costs.
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.