Judgments

Decision Information

Decision Content

A-247-77
Domestic Converters Corporation, David Kirsch Ltd., Barmish Bros. Inc., G.K. Marshall Fabrics of Montreal Inc., Daly & Morin Ltd., Reich Brothers Ltd., Diamond Yarn Canada Corp. (Plaintiffs)
v.
Arctic Steamship Line, March Shipping Limited, ITO-International Terminal Operators Ltd. and the Queen in right of Canada (Defendants)
Court of Appeal, Pratte, Le Dain JJ. and Lalande D.J.—Montreal, February 27, 28, 29, March 5 and 6; Ottawa, October 29, 1980.
Crown — Torts — Liability as building owner — Goods stored in shed owned by Crown and leased by terminal opera tors damaged following collapse of shed — (1) Trial judgment holding Crown solely liable and ordering payment of interest at 8% from date of mishap, and payment of taxable costs of all parties varied — Plaintiffs' action based on s. 3(1), Crown Liability Act and art. 1055, Quebec Civil Code — S. 3(1)(a) not applicable as collapse not resulting from fault of servant but due to accumulation of snow on roof — Crown liable under s. 3(1)(b) — Breach of duty as owner — Failure to remove snow — Crown having duty to ensure vis-à-vis third parties safety of building — Damage foreseeable in view of fragility of building — Tenant not responsible for snow re moval under terms of lease — No reference possible to art. 1055 of Civil Code to determine whether breach of duty described in s. 3(1)(b) exists when 3(1)(b) applied to case of damage resulting from ruin of building owned by Crown and located in Province of Quebec — Under art. 1055 owner required to compensate for damage whether resulting from fault of owner or third party — Breach of duty under s. 3(1)(b) breach by Crown itself as owner — S. 3(1)(b) not providing for liability of Crown for damage caused by breach by third party of Crown's duty — (2) Appeal by Crown from dismissal of action in warranty against terminal operators dismissed — Action governed by Quebec civil law— (3) Appeal by plaintiffs from dismissal of action against carrier and terminal opera tors dismissed — Carrier's liability excluded by terms of contract of carriage — Action against terminal operators not within jurisdiction of Court — Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, ss. 2, 22, 35, 40, 42 — Federal Court Rules, C.R.C., c. 663, RR. 500, 1726 — National Harbours Board Act, R.S.C. 1970, c. N-8, s. 11(2) — Crown Liability Act, R.S.C. 1970, c. C-38, s. 3(1) — Quebec Civil Code, arts. 1055, 1056c.
Jurisdiction — Maritime law — Goods stored in shed owned by Crown and leased by terminal operators damaged following collapse of shed — Appeal from trial judgment dismissing cargo owners' action against terminal operators dismissed — Claim not within jurisdiction of Court — Claim not based on federal statute nor on Canadian maritime law as outside specific heads of s. 22(2) of Federal Court Act — Whether claim "maritime" or "admiralty" matter within fed eral jurisdiction over navigation and shipping — Claim having no maritime connotation — Tort committed on land not maritime matter — No contractual "lien de droit" between cargo owners and terminal operators and no "stipulation pour autrui" in favour of cargo owners — Shipowners entering into terminal operation agreement as principals on own account not as agents of cargo owners — Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, ss. 2, 22(2), 42 — Crown Liability Act, R.S.C. 1970, c. C-38, s. 3(1).
Practice — Interest — Costs — Goods stored in shed owned by Crown and leased by terminal operators damaged following collapse of shed — Liability in tort of Crown — Trial Judge ordering payment of 8% interest on amount of compensation from date damage occurred — Power of Court under s. 40 of Federal Court Act to order payment and rate of interest, and time after judgment from which interest begins to run — Under s. 35, Crown to pay interest on debt existing before judgment if required to do so by statute or contract — Failing contract, Crown Liability Act applicable — Crown liable as if private person thus liable under art. 1056c of Civil Code — Under art. 1056c interest payable from date of institution of action at rate as high as 8% — Improper exercise by Trial Judge of discretion as to costs — Trial Judge failing to consider (1) that plaintiffs, before undertaking action, could have determined that carrier's liability not involved; and (2) that action by plaintiffs against terminal operators and action in warranty by Crown against latter not within jurisdiction of Court — Trial judgment varied accordingly — Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, ss. 35, 40 — Crown Liability Act, R.S.C. 1970, c. C-38, s. 3(1) — Quebec Civil Code, art. 1056c.
Plaintiffs sued in the Trial Division to obtain compensation for the damage suffered by their goods as a result of the collapse of the shed in which they were stored. After being unloaded from a vessel belonging to Arctic Steamship Line, the goods were given to ITO-International Terminal Operators Ltd. and March Shipping Limited pursuant to an agreement
concluded between ITO and the carrier, Arctic. (For the purposes of this appeal, although these two latter companies played different roles, they were regarded as one and referred to as ITO.) The goods were placed in a shed located in the Port of Montreal. The shed, which had been built by the National Harbours Board, had been leased by ITO. Plaintiffs sought a ruling of joint liability against Arctic, the carrier and owner of the vessel, against ITO, the occupier of the shed and custodian of the goods and against the Crown, the owner of the shed. The Trial Judge held the Crown solely liable for the damage and ordered it to pay damages and interest at 8% from the date of the mishap, dismissed the action in warranty by the Crown against ITO, dismissed plaintiffs' action against Arctic and ITO and the action in warranty instituted by the two latter companies, and ordered the Crown to pay the taxable costs of all parties. That decision is the basis of three appeals heard concurrently.
Held, (1) The appeal by the Crown (A-245-77) from the judgment ordering it to compensate plaintiffs is allowed, the trial judgment varied only as to interest and costs.
A/ Crown liability
The Trial Judge correctly held the Crown liable for the damage sustained by plaintiffs. Plaintiffs relied, in their state ment of claim, on subsection 3(1) of the Crown Liability Act and on article 1055 of the Quebec Civil Code which provides that the owner of a building is responsible for the damage caused by its ruin. The Crown may only be liable in tort in cases provided for in the Crown Liability Act; and the only provision of that Act under which the Crown can be liable for damages as owner of a building is paragraph 3(1)(b). This does not, at first sight, preclude the application of article 1055. Under paragraphs 3(1)(a) and (b) of the Crown Liability Act, the Crown is liable as if it were a "private person" and the tortious liability of private persons is governed by provincial law. Thus, reference to provincial law may be had to determine whether there was a breach of duty under paragraph 3(1)(b) and what the consequences are for private persons of such a breach. The failure to perform one of the duties referred to in paragraph 3(1)(b) gives rise to liability. However, the last paragraph of article 1055 does not impose a duty of this kind on the owner of the building; it simply imposes on him an obligation to compensate for certain damage, whether this damage results from the fault of the owner or that of a third party. The breaches which, under paragraph 3(1)(b), may result in liability for the Crown are breaches by the Crown itself of duties imposed on it by its capacity as owner, possessor or occupier of property. Paragraph 3(1)(b) does not provide for liability of the Crown for damage caused by the breach by a third party of its duty as owner, possessor or occupier. Thus, in applying paragraph 3(1)(b) to the case of damage resulting from the ruin of a building owned by the Crown and located in the Province of Quebec, it is neither necessary nor possible to refer to article 1055 of the Civil Code to determine whether there was a breach of one of the duties described in paragraph 3(1)(b). To succeed, plaintiffs must show that the collapse of the building is due either to fault by a servant of the Crown (paragraph 3(1)(a)) or to a breach by the Crown of one of the
duties referred to in paragraph 3(1)(b). Paragraph 3(1)(a) is ruled out: the evidence shows that the building in all probability collapsed because of a particularly heavy accumulation of snow on its roof. With respect to paragraph 3(1)(b), the fact that the Crown leased the shed to ITO is insufficient to relieve the Crown of its obligation to remove the snow: the lease did not expressly make the tenant responsible for removing snow on the roof; the removal of the snow was made necessary by the special fragility of the leased building; and the owner was in at least as good a position as her tenant to determine whether too much snow had accumulated on the roof. In these circum stances the Crown retained, at least where third parties are concerned, a duty to ensure that the presence of snow on the roof of its building was not a source of danger. The damage was foreseeable. The Crown could not disassociate itself from its building and assume that its tenant would see and bring to its attention any damage which might imperil the safety of the building.
B/ Interest
The Trial Judge had the power to order the Crown to pay interest on the amount of compensation at a rate of 8%, but did not have the power to order that that interest would begin to run on the date the damage occurred. Under section 40 of the Federal Court Act, the Court has the power to order a judg ment to bear or not interest and to set the rate of such interest and the time after the judgment from which it will begin to run. Under section 35 of the Act, the Crown may be ordered to pay interest on a debt which existed before the judgment and which was recognized as existing by the judgment, only if it is required to do so by contract or statute. In the case at bar, there being no contract, the Crown Liability Act applies where by the Crown is liable as "if it were a private person", thus liable under article 1056c of the Quebec Civil Code. Pursuant to that article, interest may be paid from the date of the institution of the action at a rate as high as 8%. The decision of the Trial Judge must accordingly be corrected.
(2) The appeal by the Crown (A-246-77) from the judgment dismissing its action in warranty against ITO is dismissed.
The decision of the Trial Judge dismissing the action in warranty which the Crown had brought against ITO was correct. The Trial Division had no jurisdiction to hear this action, since it constituted a separate proceeding from the principal action and was governed exclusively by Quebec civil law. On this issue, reference might be made to McNamara Construction (Western) Limited et al. v. Her Majesty The Queen, [1977] 2 S.C.R. 654 and to Her Majesty The Queen v. Thomas Fuller Construction Co. (1958) Limited, [1980] 1 S.C.R. 695.
(3) The appeal by plaintiffs (A-247-77) from the judgment dismissing their action against Arctic and ITO is dismissed.
A/ Liability of Arctic
The Trial Judge correctly held that Arctic's liability was excluded by the terms of the contract of carriage. The damage
occurred without any fault on the part of the carrier after the goods had been unloaded and when they were in the custody of the handler to which they had been entrusted.
B/ Liability of ITO
The Trial Judge properly dismissed plaintiffs' action against ITO as not being within the jurisdiction of the Trial Division. To be within the jurisdiction of the Court under section 22 of the Federal Court Act, a case must be governed by existing federal statutes or Canadian maritime law. Plaintiffs' action is not based on any federal statute. Accordingly, it can only be within the purview of the Federal Court if it is based on Canadian maritime law within the meaning of section 2 of the Act. However, since the case at bar does not fall within any of the specific heads of subsection 22(2) of the Act, it cannot be said to be governed by Canadian maritime law and ITO's allegedly tortious conduct must be assessed in accordance with Quebec civil law. The fact that the damaged goods had been the subject of maritime carriage and that the shed was located in the Port of Montreal does not by itself impart a maritime aspect to the case. Plaintiffs' argument that ITO is also liable in contract fails. Under this contract, which ITO concluded with the carrier of the goods, ITO assumed custody of the goods after they had been unloaded. That is not a maritime contract. It is a contract by which ITO undertook to provide services on land only. Even if plaintiffs were entitled to rely on this contract (to which they were not parties), their action would not come within the jurisdiction of the Court.
(4) Costs
The Crown's complaint that the Trial Judge improperly exercised his discretion in ordering the Crown to pay an exorbitant amount of costs, is partially justified. The Trial Judge did not take into consideration (1) that the plaintiffs could easily have determined before undertaking their action that the damage occurred in circumstances such that the carrier's liability could not have been involved; and (2) that the action brought by plaintiffs against March and ITO and the action in warranty brought by the Crown against these two companies was not within the jurisdiction of the Court.
Per Le Dain J.: The Federal Court does not have jurisdiction with respect to the claim of the plaintiff cargo owners against March and ITO.
The claim against ITO clearly does not fall within any of the specific heads of jurisdiction in subsection 22(2) of the Federal Court Act. Paragraph 22(2)(h) contemplates a claim for damage to cargo while carried on a ship and not one for damage after its discharge from a vessel. As to paragraph 22(2)(i), ITO was not a party to the contract of carriage. Any contractual relationship between the cargo owners and ITO would not be an agreement relating to the carriage of goods in or on a ship within the meaning of that paragraph.
Jurisdiction would then have to be based on the general terms of subsection 22(1), as completed by the definition of "Canadian maritime law" in section 2. The effect of these provisions together with section 42, which continues substantive
Canadian maritime law as so defined, is that notwithstanding the enumeration of claims in subsection 22(2), the Court has jurisdiction with respect to any other claim that may properly be held to be a maritime matter, provided that it is a matter which falls within federal legislative jurisdiction with respect to navigation and shipping. This view does not go against the decision of the Supreme Court in Antares Shipping Corpora tion v. The Ship "Capricorn", et al., [1980] 1 S.C.R. 553; where the words "if that Court had had, on its Admiralty side, unlimited jurisdiction in relation to maritime and admiralty matters" in the definition of Canadian maritime law, were not dealt with.
Is there a contractual foundation for the claim of the plain tiff cargo owners against ITO that may properly be held to be a maritime matter? The legal relationship between the two par ties cannot be characterized as sub-bailment since sub-bailment may exist apart from contract; moreover, the common law of bailment is not known to Quebec law where in the absence of a contractual relationship, the civil responsibility of one who assumes the custody of the goods of another would be governed by the law of delict and quasi-delict. Nor can the Court adopt the view expressed by Marceau J. in Marubeni America Cor poration, et al. v. Mitsui 0.5.K. Lines Ltd. et al., [1979] 2 F.C. 283 (T.D.), to the effect that there is a contractual lien de droit between the cargo owner and the terminal operator based on the notion that the shipowner enters into an agreement with the terminal operator as agent of the cargo owner or that the agreement contains a stipulation pour autrui in favour of the cargo owner. The terminal operation agreement is entered into by the shipowners as principals for their own account and not as agents or mandataries of any identified cargo owners. It is a general agreement not related to particular contracts of car riage, under which the terminal operator assumes an obligation towards the shipowners to perform a terminal service on a continuing basis for vessels of the owners. It could not have been contemplated that cargo owners would assume the obliga tion of payment of the terminal charge to the terminal opera tor. Furthermore, the terminal operation contract cannot be held to contain a stipulation pour autrui in favour of the cargo owners. It is exclusively concerned with obligations assumed by the terminal operator towards the shipowners and for the benefit of the shipowners. The terminal operator takes custody of the cargo pursuant to and in accordance with the general agreement with the shipowners. Therefore, there is no contrac tual lien de droit between the cargo owner and the terminal operator.
There remains the issue whether the claim of the cargo owners against the terminal operator, characterized as one of delictual responsibility for damage to cargo caused and occur ring on land, could properly be held to be a maritime matter. The whole of admiralty tradition holds that a maritime tort is one committed on water and not on land, whereas a maritime contract, if it has the requisite general character because of its subject-matter, may nevertheless be a maritime contract although it is to be performed on land. It would be against that tradition to hold that a tort or delict committed on land is a maritime matter. In the United States, the practical difficulty created by the conclusion that the claim of the cargo owner against a terminal operator is not within the admiralty jurisdic tion of the federal courts may be avoided by the assumption of
pendent jurisdiction. Such an exercise of jurisdiction is not open to this Court.
CASES JUDICIALLY CONSIDERED
FOLLOWED:
McNamara Construction (Western) Limited et al. v. Her Majesty The Queen, [1977] 2 S.C.R. 654; Her Majesty The Queen v. Thomas Fuller Construction Co. (1958) Limited, [1980] 1 S.C.R. 695; Quebec North Shore Paper Company et al. v. Canadian Pacific Limited et al., [1977] 2 S.C.R. 1054.
NOT FOLLOWED:
The Robert Simpson Montreal Limited v. Hamburg- Amerika Linie Norddeutscher, et al., [1973] F.C. 1356 (C.A.).
DISTINGUISHED:
Marubeni America Corporation, et al. v. Mitsui 0.5.K. Lines Ltd. et al., [1979] 2 F.C. 283 (T.D.).
CONSIDERED:
Antares Shipping Corporation v. The Ship "Capricorn", et al., [1980] 1 S.C.R. 553.
REFERRED TO:
De Lovio v. Boit et al., 7 Fed. Cas. 418 (Mass. Cir. Ct. 1815); Leather's Best, Inc. v. S.S. Mormaclynx et al., 451 F.2d 800 (2d Cir. 1971); Pacific Western Airlines Ltd. et al. v. The Queen, et al., [1980] 1 F.C. 86 (C.A.), affirming [1979] 2 F.C. 476 (T.D.); Bullock v. The London General Omnibus Company and others, [1907] 1 K.B. 264 (C.A.); MacMillan Bloedel Limited v. Canadi- an Stevedoring Co. Ltd., et al., [1969] 2 Ex.C.R. 375; The Queen v. Canadian Vickers Limited, [1978] 2 F.C. 675 (T.D.); Tropwood A.G. et al. v. Sivaco Wire & Nail Company et al., [1979] 2 S.C.R. 157; Gilchrist Watt & Sanderson Pty Ltd v York Products Pty Ltd, [1970] 3 All E.R. 825 (P.C.); Commissaires du Havre de Québec v. Swift Canadian Company (1929), 47 Que. K.B. 118; Franco Canadian Dyers Ltd. v. Hill Express Depot Ltd., [1951] Que. S.C. 177; Robert Simpson Montreal Ltd. v. Canadian Overseas Shipping Ltd.; Brown & Ryan Ltd.; Fjell-Oranje Lines and Fjell Line and Oranje Lijn (Maatschappij Zeetransport N.V.) (The "Prins Willem III"), [1968] 2 Lloyd's L.R. 192 (Que. S.C.); [1973] 2 Lloyd's L.R. 124 (Que. C.A.); Her Majesty The Queen v. Nord-Deutsche Versicherungs-Gesellschaft, et al., [1971] S.C.R. 849; Sanderson v. Blyth Theatre Com pany, [1903] 2 K.B. 533 (C.A.).
COUNSEL:
S. J. Harrington for plaintiffs.
P. W. Davidson for defendant Arctic Steam ship Line.
W. D. Angus and M. de Man for defendants March Shipping Limited and ITO-Interna tional Terminal Operators Ltd.
G. Côté and C. Joyal for defendant the Queen in right of Canada.
SOLICITORS:
McMaster, Minnion, Patch and Ass., Mon- treal, for plaintiffs.
Brisset, Bishop and Davidson, Montreal, for defendant Arctic Steamship Line.
Stikeman, Elliott, Tamaki, Mercier & Robb, Montreal, for defendants March Shipping Limited and ITO-International Terminal Operators Ltd.
Deputy Attorney General of Canada for the Queen in right of Canada.
The following is the English version of the reasons for judgment rendered by
PRATTE J.: This appeal is from a judgment of the Trial Division [judgment dated January 18, 1977, T-3081-72, not reported]; the same judg ment is also the subject of two other appeals.
In February 1971 the Sasha Borodulin, a vessel belonging to defendant Arctic Steamship Line, put into Montreal and unloaded goods. These goods had been carried from European ports on a bill of lading; part were on their way to plaintiffs. After being unloaded, and while waiting for the recipi ents to take delivery, the goods were given to ITO-International Terminal Operators Ltd. and March Shipping Limited,' pursuant to an agree ment concluded earlier between ITO and the carri er Arctic, and were placed in shed 38, a warehouse located in the Port of Montreal which ITO had leased from the National Harbours Board. 2 The goods were still there when, on February 23, 1971, part of shed 38 collapsed, and when on February 26 the remainder of the building collapsed.
' In actuality these two companies, ITO and March, played different roles in this matter; however, the parties agreed at the hearing that, for the purposes of this appeal, they could be regarded as one and the same; I shall accordingly treat them as one, and use the abbreviation ITO to refer to either.
2 Counsel for ITO contended that the contract under which ITO occupied shed 38 was not a true lease. It is unnecessary for the Court to rule on this argument.
Plaintiffs sued to obtain compensation for the damage suffered by their goods as a result of this catastrophe. They brought their action, seeking a ruling of joint liability against defendants, against Arctic, the carrier, against ITO, which was occu pying shed 38 and had custody of the goods at the time of the accident, and finally against the Crown, the owner of the shed which collapsed.' Each of the defendants pleaded to the action, and in addition, instituted actions in warranty against the others. The principal action and the actions in warranty were heard concurrently by the Trial Division, after the parties had agreed to limit the discussion solely to the question of liability, on the assumption that if necessary the determination of the amount of the damages would be subject to a "reference" under Rules 500 et seq.
After a lengthy trial, the Trial Judge held that the Crown was solely liable for the damage for which plaintiffs claimed to be compensated. Accordingly,
(a) he allowed plaintiffs' action against Her Majesty, whom he ordered to pay damages the amount of which would be subsequently deter mined, with interest at 8% per annum from the date of the mishap, February 23, 1971;
(b) he dismissed the action in warranty by Her Majesty against ITO;
(c) he dismissed plaintiffs' action in so far as it was brought against Arctic and ITO, and also dismissed the actions in warranty instituted by these defendants; and
(d) he ordered the Crown to pay the taxable costs of all parties to the case and gave certain instructions regarding the taxation of these costs.
This judgment was a basis for three appeals:
(1) the Crown first appealed from the judgment allowing the action brought against it and order ing it to compensate plaintiffs; this is appeal No. A-245-77;
' Subsection 11(2) of the National Harbours Board Act
[R.S.C. 1970, c. N-81 provides that:
11... .
(2) All property acquired or held by the Board is vested in
Her Majesty in right of Canada.
(2) the Crown also appealed from the decision dismissing the action in warranty which it had brought against ITO; this appeal is No. A-246-77;
(3) finally, plaintiffs appealed from the part of the judgment dismissing their action against ITO and Arctic; this is appeal No. A-247-77.
All these appeals were heard concurrently and I shall consider all three of them here.
I—Appeal by the Crown from the judgment order ing it to compensate plaintiffs.
To begin with, this appeal raises the question of whether the Trial Judge correctly held the Crown liable for the damage sustained by plaintiffs. If this question is to be answered in the affirmative, two other subsidiary questions arise: did the Trial Judge err in ordering the Crown to pay, first, interest on the amount of the damages at 8% from the time of the mishap, and second, the costs of all the parties to the case?
A/ Crown liability.
Plaintiffs' action against Her Majesty has a purely tortious basis. It is based on subsection 3(1) of the Crown Liability Act, 4 under which:
3. (1) The Crown is liable in tort for the damages for which, if it were a private person of full age and capacity, it would be liable
(a) in respect of a tort committed by a servant of the Crown, or
(b) in respect of a breach of duty attaching to the ownership, occupation, possession or control of property.
In their statement of claim plaintiffs further expressly cited the last paragraph of article 1055 of the Civil Code of the Province of Quebec:
Art. 1055... .
The owner of a building is responsible for the damage caused by its ruin, where it has happened from want of repairs or from an original defect in its construction.
It is first necessary to consider whether this provi sion can be relied on against the Crown.
The Crown may only be liable in tort in the cases provided for by the Crown Liability Act; and
R.S.C. 1970, c. C-38.
the only provision of that Act under which the Crown can be liable for damages as owner of a building is paragraph 3(1)(b).
However, that is not to say that a rule enacted by a provincial legislator, like article 1055 of the Civil Code of the Province of Quebec, may not apply to the Crown. Subsection 3(1) in fact pro vides that, in the cases dealt with by paragraphs (a) and (b), the Crown is liable as "if it were a private person" and the tortious liability of private persons is governed by provincial law. It may be seen from a careful reading of paragraph 3(1)(b) that its application requires reference to provincial law, first, to determine whether there has been any breach of the duty referred to by paragraph (b); and secondly, to determine what the consequences of such a breach are for a private person.
I think it is clear that in applying paragraph 3(1)(b) to the case of damage resulting from the ruin of a building owned by the Crown and located in Quebec, it is neither necessary nor possible to refer to article 1055 of the Civil Code of the Province of Quebec to determine whether there was a breach of one of the duties described in paragraph (b) of subsection 3(1). The duties dealt with by this provision are duties which the failure to perform gives rise to liability. The last para graph of article 1055 of the Civil Code of the Province of Quebec does not impose a duty of this kind on the owner of the building; it simply imposes on him an obligation to compensate for certain damage, whether this damage results from the fault of the owner or that of a third party.
However, should it not be said that article 1055 of the Civil Code of the Province of Quebec assumes that a building fell into ruins because someone (whether the present owner of the build ing or a third party) breached one of the duties described in paragraph (b) of subsection 3(1) of the Crown Liability Act, and that in such a case it provides that the owner shall compensate for the damage resulting from the ruin? Should article 1055 not therefore be applied to the Crown in order to ensure that the latter is liable as "if it were a private person" for the damage resulting from the fact that someone breached one of the duties provided for by paragraph (b) of subsection
3(1)? I do not think so. In my view, the "breaches" which, under paragraph 3(1)(b), may result in liability for the Crown are breaches by the Crown itself of duties imposed on it by its capacity of owner, possessor or occupier of prop erty. I do not think that paragraph 3(1)(b) pro vides that the Crown can be held liable for damage caused by the breach by a third party of its duty as owner, possessor or occupier.
I therefore conclude that article 1055 does not apply to the Crown, and that the latter's liability cannot be based on this provision. In order to succeed, therefore, plaintiffs had to show that the damage for which they claim to be compensated was caused by the collapse of the shed, and that this collapse was itself due either to fault by a servant of the Crown (paragraph 3(1)(a)) or to a breach by the Crown of one of the duties referred to by paragraph (b) of subsection 3(1). Counsel for all parties admitted at the hearing that the damage sustained by plaintiffs resulted from the ruin of shed 38, and that the collapse of the first part of the shed on February 23, 1971 was the sole cause of the collapse of the remainder of the shed a few days later. The only problem for solution, therefore, is as to the cause of the collapse on February 23. Was this collapse caused by the fault of a servant of the Crown or by a breach by the Crown of its duty as owner? In my opinion, one cannot form an opinion on this point unless one knows the gist of the evidence presented at the trial.
Shed 38 was built in 1967. In that year, as the result of an agreement between the Canadian, Russian and Cuban governments, large quantities of flour were to be exported from Montreal to Russia and Cuba. However, there were not suffi cient sheds in the Port of Montreal for the flour to be stored before being loaded. A new one had to be built. As time was of the essence, this had to be done quickly; it had to be done without too great a cost, since it was anticipated that there would soon be too many sheds in the Port of Montreal in view of the increasing popularity of transportation by "containers". Rather than build a metal shed like those already existing in the Port, the National Harbours Board accordingly decided to build at a
lower cost a temporary wooden shed which could easily be dismantled after a few years. To avoid the lengthy process of public tenders, the Board had this new building put up by its own employees, using plans prepared by an engineer in its employ. Building commenced in early April 1967, under the supervision of an engineer employed by the Board; it ended in early May.
Shed 38 was therefore built entirely of wood. The walls and roofing were made of plywood 3/4" thick, nailed to a wood framework. The two-sided covering had a slope of 14° and was covered with tar paper. The building measured 448 feet long by 100 feet wide. It was put up alongside the river at a location where the ground was asphalted; it was this asphalt surface, which in addition was not level, which served as a flooring. The base of the walls rested on pieces of timber 12" by 12" set into the ground to a depth of 12"; there were no other foundations. The framework of the lateral walls, made from 2" by 8" and 2" by 4" timbers, sup ported the outer ends of the trusses of the roof, and these were held up at the centre by a trussed beam running from one end of the shed to the other; this beam rested on a series of pillars 12" by 12" placed at 18-foot intervals.
When built, shed 38 was leased in the same way as the other transit sheds in the Port of Montreal. The National Harbours Board does not appear to operate the transit sheds belonging to it in Mon- treal itself. It in fact leases them to carriers and shipping agents. Each year the latter are asked to communicate their requirements in this area; the information so obtained enables the Board to dis tribute the available space between the various interested parties and to make a rental offer to each.
In 1967 the Board leased shed 38 on the express condition that it would only be used for the storage of flour. In the fall of 1967, the Board waived this condition, and the various tenants of shed 38 were subsequently authorized to store all kinds of goods in it. This was the situation when, in March 1970,
ITO leased shed 38 for one year on the conditions contained in a document titled [TRANSLATION] "Permit of Occupation". By this contract the Board granted to ITO, in return for payment of the stipulated rental, the right to occupy shed 38 till March 31, 1971, but on condition that it would only be used for goods in transit. Before ITO took possession, representatives of the company and of the Board visited the shed, which was then empty, together and drew up a statement of the premises; this document does not indicate that the structure of the building was damaged at that time.
The shed collapsed on February 23, 1971. There was a lot of snow that winter; 113 inches of snow had fallen since the first part of November. (In the 1967-68 winter, 44.5 inches fell; in 1968-69, there was 78.7 inches, and in 1969-70, 58.7 inches.) It was established that no one ever removed the snow that may have accumulated on the roof of shed 38 and the other sheds in the Port of Montreal. However, it is not known exactly what quantity of snow was on the roof of shed 38 at the time it collapsed. No one examined the building before the mishap on February 23. The next day an engineer employed by the Board, Mr. Thibodeau, went to look at the premises and, from the ground, estimated that there was from 18 to 30 inches of snow on the roof of the part of the shed that remained standing: 12 to 18 inches of dense snow mixed with ice, and above that from 6 to 12 inches of powdery snow. Two days later another employee of the Board, Constable Forget, went up on the roof covering what remained of shed 38 and, with a 15-inch metal ruler, measured the depth of the snow on it. According to him, the depth varied between 9 and 20 inches depending on the loca tion, and there was a thin layer of ice of about 1/16" in the centre of this layer of snow.
I would add that, visiting the location between February 23 and 26, two engineers employed by the Board, Messrs. Thibodeau and Grenier, inspected the uncollapsed portion of the shed and noted that the framework of the walls was damaged. Mr. Grenier then took some photos which indicate primarily the fact that, in several
places, 2" by 8" posts had been reduced to a low level as if they had been dealt a powerful blow. With certain exceptions, it would not appear that this damage could have been caused by the col lapse of the first part of the shed.
Why did the shed collapse? The testimony of the workmen who were at work in the shed when it collapsed casts little light on this question: they had noticed nothing unusual when, suddenly, they heard a loud noise and were able to see the sky through the roof, which was collapsing. Several expert witnesses were heard on this point at the trial. None of them had been able to examine shed 38. They were consulted too late for that to be done. However, they were given all the informa tion which I have just summarized and they had the opportunity to study the plans which were used in building the shed. Their opinions as to the cause of the mishap were based on these data. The opinions differed. According to Mr. Bluteau, the expert witness for the plaintiffs, the collapse was due primarily to the presence of an excessive quan tity of snow on the roof, which led to the crushing of a weak structure, which may have been weak ened by the damage which users of the shed caused to the framework of the walls. The expert witness for defendant March, Mr. Martin, was more categorical: the collapse was due to an error by the engineer who prepared the building plans. In his view, one part of the roof framework, which he described in his testimony as the [TRANSLA- TION] "8-9 framework", was so weak that it was hard to believe the shed had lasted as long as it had. The two expert witnesses for defendant ITO, Messrs. Kostitch and Léonard, also attributed the collapse of the shed to a construction defect, but to a different defect from the one found by the expert witness Martin. In their view, the shed collapsed not because its framework was not strong enough, but because it lacked rigidity, a defect primarily attributable to the absence of longitudinal wind- braces; the effect of the weather over a period of time was to aggravate this defect until such a time as the framework became too weak to stand. The two expert witnesses for the Crown, Messrs. Roberge and Gagné, expressed another opinion: they saw no error in the plans for the shed, which in their view ought to have been solid enough to support the weight of the snow on the roof. They considered that the collapse of the shed was not
due to a construction defect but to the progressive weakening of the walls as a result of damage caused by users of the shed. The expert witnesses based this opinion on the evidence which I have referred to above that the walls of the part of the shed which finally collapsed were damaged, and on the fact, established inter alia by the testimony of the former Port manager, that the longshoremen who worked in the Port sheds were in the habit of causing considerable damage by bumping their lift trucks into the walls and pillars and resting heavy goods against the walls. 5
According to the expert witnesses, therefore, the destruction of the shed could have been due to one of three causes: too much snow was allowed to accumulate on the roof, the building was badly designed, or the building was weakened by the damage caused by the longshoremen to its framework.
If, contrary to what I have said, the rule in the last paragraph of article 1055 of the Civil Code of the Province of Quebec could be relied on against the Crown, the latter's liability would not be in doubt in the case at bar. In that case, whether the damage was due to one or the other of the three causes already mentioned, the Crown would be liable. When damage has been caused by the destruction of a building, article 1055 makes the owner liable, even if there has been no fault on his part, in all cases where such destruction resulted from a construction defect or a maintenance defect. If this provision applied here, therefore, the Crown would be liable to plaintiffs on the assump tion that the destruction was caused, as the expert witnesses for ITO and March contended, by a construction defect, whether this defect consisted in the weakening of part of the framework of the roof or in the absence of longitudinal wind-braces. The same would be true if the accident was caused by the presence of too great a quantity of snow on the roof since, as counsel for Her Majesty conced ed, the fact of not removing the snow from the roof
5 These longshoremen were not servants of the Crown, and, in most cases, were not servants of the tenants of the sheds either.
was equivalent to a failure of maintenance. Final ly, the conclusion would not be any different if the collapse was caused by the damage inflicted by longshoremen on the framework. There is no reason to think that such damage, assuming that it did exist, was caused so suddenly and such a short time before the accident that it could not and should not have been repaired. Even in this case, therefore, the destruction would have been attributable to a failure of maintenance.
Should the Court come to some other conclusion in light of the fact that the rule contained in article 1055 of the Civil Code of the Province of Quebec does not apply here? I do not think so. If the collapse should be attributed to a construction defect, the Crown would certainly be liable for it since the building was designed and built by its servants. However, I do not consider that this assumption can be made. In my view, the expert witnesses for the Crown showed that the construc tion defect found by the expert witness Martin could not have caused the collapse; with respect to the construction defect noted by Messrs. Kostitch and Léonard (lack of rigidity in the building), I think this is very unlikely to have been the cause of the destruction, since there was very little wind on the day of the mishap and the building had with stood violent winds a short time earlier. However, although this building may not have been badly constructed, the fact remains that it was a fragile building (especially if its intended purpose is borne in mind), which in all probability collapsed because during the severe winter of 1970-71 more snow had accumulated on the roof than the build ing could bear. Should the Crown be held liable for the fact that this snow was not removed? There is no doubt that it should be if it had been the occupier of the property itself. Is the fact that it leased the shed to ITO sufficient to relieve it of this obligation, since snow removal is ordinarily a maintenance function performed by the tenant? I do not think so, at least in a case such as this, in which the lease did not expressly make the tenant responsible for removing snow on the roof, in which removal of such snow was made necessary by the special fragility of the leased building, and finally, in which the owner was in a position, as well as or even more than her tenant, to determine whether too much snow had accumulated on the
roof. 6 In these circumstances, in my opinion, the Crown retained, at least where third parties are concerned, a duty to ensure that the presence of snow on the roof of its building was not a source of danger.
It is true that, as the expert witnesses for the Crown emphasized, the workers in the shed may have damaged it, and in so doing contributed to its collapse; however, this does not in any way alter the Crown's liability to plaintiffs, since the evi dence established that such damage was foresee able. That being the case, in my opinion the Crown may not disassociate itself from its building, and assume that its tenant would see and bring to its attention any damage which might imperil the safety of the building.
For all these reasons, I consider that the Trial Judge correctly held the Crown liable for the damage sustained by plaintiffs.
In view of this conclusion, it is necessary to answer the two subsidiary questions raised by this appeal by the Crown: that relating to interest and that relating to costs. However, I shall at this stage limit myself to the matter of interest. It will be easier to discuss the problems of costs after decid ing on the other appeals which have arisen from the decision of the Trial Division.
B/ Interest.
The judgment a quo ordered the Crown to pay interest on the compensation owed to the plaintiffs, calculated at 8% per annum from the day of the mishap, February 23, 1971. Her Majesty disputed the power of the Trial Judge to make such an order.
The Federal Court Act [R.S.C. 1970 (2nd Supp.), c. 10] contains two provisions on interest: section 35, which applies only to the Crown, and section 40, which applies to the Crown and other litigants. The text of these two provisions is as follows:
6 I am thinking here of the fact that the Board had at its disposal employees assigned specifically to maintenance of the sheds in the Port of Montreal, and that these employees continued to have access to shed 38 despite the lease on it.
35. In adjudicating upon any claim against the Crown, the Court shall not allow interest on any sum of money that the Court considers to be due to the claimant, in the absence of any contract stipulating for payment of such interest or of a statute providing in such a case for the payment of interest by the Crown.
40. Unless otherwise ordered by the Court, a judgment, including a judgment against the Crown, bears interest from the time of giving the judgment at the rate prescribed by section 3 of the Interest Act.
As may be seen, section 35 relates to interest on the amount owed by the Crown before the judg ment is made. Section 40 deals with interest on the amount of the judgment after the judgment has been pronounced; a judgment cannot bear interest before it has been made.
Under section 40, the Court has the power to order a judgment to bear or not to bear interest, and in the first case, to set the rate of such interest and the time after the judgment from which it will begin to run. The Trial Judge accordingly had the power to order the Crown to pay interest at 8% from the date of the judgment liquidating the amount of the damages. However, did he have the power to order that this interest would begin to run on the date the damage occurred rather than on the date of the judgment?
The interest which may be owed for the period prior to the judgment is, clearly, interest on the debt which existed before the judgment and which was recognized as existing by the judgment. Under section 35 of the Federal Court Act, the Crown may be only ordered to pay interest of this kind if it is required to do so by a contract or a statute. In the case at bar, there being no contract, there was an applicable statute, the Crown Liability Act, which provides that in a case such as this the Crown is liable as "if it were a private person". If the Crown were a private person, its liability to plaintiffs would be governed exclusively by the Civil Code of the Province of Quebec, and in particular by article 1056c; 7 under this article, it may be ordered to pay interest on the amount of
7 See Her Majesty The Queen v. Nord-Deutsche Versi- cherungs-Gesellschaft, et al., [1971] S.C.R. 849, especially at pp. 864 and 880 et seq.
the damages from the day on which the proceed ings commenced at a rate as high as 8%. The Trial Judge therefore could not order the Crown to pay interest at 8% from the day of the mishap; he could only order it to pay such interest from the date on which the action was instituted, October 20, 1972. His decision must accordingly be cor rected. I should add that it is not possible to rely, in support of the decision a quo, on earlier deci sions by which the Court may, in maritime mat ters, order the party liable to compensate the victim, with interest, from the day of the damage. This is not a maritime matter. Her Majesty's liability to plaintiffs is governed entirely by the Crown Liability Act, and to the extent that this Act refers to it, by the civil law of Quebec.
I now come to the second appeal resulting from the decision of the Trial Division: that which dis missed the action in warranty brought by the Crown against ITO.
II—Appeal by the Crown from the judgment dis missing its action in warranty against ITO. 8
The Trial Judge dismissed the action in warran ty which the Crown had brought against ITO in the manner provided in Rules 1726 et seq. This decision is correct, since it follows from decisions of the Supreme Court of Canada in McNamara Construction (Western) Limited et al. v. Her Majesty The Queen, [1977] 2 S.C.R. 654 and Her Majesty The Queen v. Thomas Fuller Construc tion Co. (1958) Limited, [[1980] 1 S.C.R. 695], that the Trial Division had no jurisdiction to hear this action in warranty, since the action constitut ed a separate proceeding from the principal action and was governed exclusively by Quebec civil law.
Accordingly, this appeal should be dismissed.
III—Appeal by plaintiffs from judgment dis missing their action against defendants other than the Crown.
9 It will be recalled that when I refer to ITO, I am referring interchangeably to March and/or ITO; in fact, the action in warranty brought by the Crown was brought against both March and ITO.
The Trial Judge found that the Crown was solely liable for the damage sustained by plaintiffs. He accordingly dismissed their action to the extent that it was brought against the carrier, Arctic Steamship Line, and against ITO. Plaintiffs seek to have this part of the judgment a quo revised: they contend that the Trial Division should have allowed their action not only against the Crown but against the other defendants as well. Let us consider first whether the Trial Judge should have held Arctic liable; we may then consider the liabil ity of ITO.
A/ Liability of Arctic.
Arctic Steamship Line was sued by plaintiffs in its capacity of carrier. The action brought against this company was therefore based on the contract of carriage, the terms of which appeared in the various bills of lading issued by the carrier. The action was therefore one governed by Canadian maritime law, which was within the jurisdiction of the Trial Division.
However, the Trial Judge was correct to rule as he did with regard to Arctic. This defendant's liability is excluded in the case at bar by the terms of the contract of carriage. Each of the bills of lading in fact contained the following clauses:
2. Negligence. The Carrier will not be responsible for damage, injury, delay, detention and loss or other consequences arising from:
... Snow, Frost, Ice, Climatic influences, Oxidation, or Consequences resulting from these Causes, Damage done on land ...
even if such damage ... is brought about, occasioned or increased by any acts, negligence, error in judgment or default of the pilots, masters, engineers, ship's crew, stevedores or agents ... or other persons for whose conduct the Carrier would otherwise be liable ....
4. Limitation of Liability ....
The responsibility of the Carrier ceases in all cases, when the cargo leaves the deck of the vessel, for which this Bill of Lading has been signed.
5. Loading & Discharging ....
The Carrier or their agents are at liberty to lighten or to land the goods on the quay, wharf, into lighters, bulk, temporary
depot or lazarette, at the risk and expense of the receivers or consignees of the goods ....
6. Tally. The receiver must hold a proper tally over the cargo during the discharge and as same proceeds, in default hereof the receiver is understood to have silently acknowledged the quantity as stated in the Bill of Lading and has thereby, independent of the time when he takes possession of the cargo thereafter, forfeited his right to claim against the ship, which is "not responsible for the cargo, either with regard to quality or quantity after same has been thus delivered on the quay.
In my view these clauses, the exact meaning of which may be difficult to define, undoubtedly had the effect of excluding the carrier's liability in a case such as the one at bar, where the damage occurred without any fault on its part after the goods had been unloaded and when they were in the custody of the handler to which they had been entrusted.
B/ Liability of ITO.
The Trial Judge also dismissed the action against ITO, which had custody of the goods at the time of the mishap, and which in the submis sion of the Crown was at least partially responsible for their loss. This action raised difficult questions, beginning with that of jurisdiction.
Was the action brought against ITO within the jurisdiction of the Trial Division? Plaintiffs main tained that it was, and cited subsection 22(1) of the Federal Court Act (which defines the "mari- time" jurisdiction of the Court) and the decision handed down by this Court in The Robert Simp- son Montreal Limited v. Hamburg-Amerika Linie Norddeutscher, et al., [1973] F.C. 1356 [C.A.]. However, since the decisions of the Supreme Court of Canada in Quebec North Shore Paper Com pany et al. v. Canadian Pacific Limited et al., [1977] 2 S.C.R. 1054, and McNamara Construc tion (Western) Limited et al. v. Her Majesty The Queen, [1977] 2 S.C.R. 654, this decision does not have the authority claimed for it by plaintiffs. Since these decisions by the Supreme Court it is clear that, contrary to what was decided in The Robert Simpson Montreal Limited, it is not enough, in order for an action to be within the jurisdiction of the Trial Division under section 22 of the Federal Court Act, that it raise questions on which the federal Parliament has the power to
legislate under its legislative power respecting "navigation and shipping". For a case to be within the jurisdiction of the Court under section 22, it must be governed either by existing federal stat utes or by Canadian maritime law.
Plaintiffs' action is not based on any federal statute. Accordingly, it can only be within the purview of the Federal Court if it is based on Canadian maritime law, within the meaning which section 2 of the Federal Court Act 9 gives to this expression. If this were a case which is mentioned in subsection 22(2) of the Federal Court Act it could be said, in accordance with the decision of the Supreme Court in Antares Shipping Corpora tion v. The Ship "Capricorn", et a1., 1 ° that it is governed by Canadian maritime law. However, as the case is not mentioned in subsection 22(2), the decision of the Supreme Court in Antares is not applicable in the case at bar. The Trial Division therefore only had jurisdiction in the case at bar if it was a "maritime" or "admiralty" case.
To the extent that it has a tortious basis, I do not consider that plaintiffs' action against ITO is within the jurisdiction of the Trial Division. The tortious act which plaintiffs alleged was committed by ITO has no maritime connotation: it therefore must be decided upon in accordance with Quebec civil law. The fact that the damaged goods had been the subject of maritime carriage and that shed 38 was located in the Port of Montreal does not by itself suffice, in my opinion, to give a maritime aspect to this case, which appears to be a purely civil action governed by provincial law.
However, plaintiffs' statement of claim men tioned not only ITO's tortious liability, but its
9 This part of section 2 reads as follows:
2. In this Act
"Canadian maritime law" means the law that was adminis tered by the Exchequer Court of Canada on its Admiralty side by virtue of the Admiralty Act or any other statute, or that would have been so administered if that Court had had, on its Admiralty side, unlimited jurisdiction in rela tion to maritime and admiralty matters, as that law has been altered by this or any other Act of the Parliament of Canada;
1° [1980] 1 S.C.R. 553.
contractual liability as well. That still does not make plaintiffs' action within the jurisdiction of the Trial Division. The contract relied on by plain tiffs against ITO is that by which ITO assumed custody of the goods after they had been unloaded. In my view this contract, which ITO concluded with the carrier of the goods, is not a maritime contract; it is a contract by which ITO undertook to provide services on land only. Even if plaintiffs were entitled to rely on this contract, to which they were not parties, their action would not thereby become within the jurisdiction of the Court.
I therefore consider that the Court has no juris diction over the action by plaintiffs against ITO, whether the action is regarded as one in tort or in contract. Because of this, I consider that the Trial Judge properly dismissed it.
Only one question therefore now remains to be resolved, that of costs.
IV—Costs.
In finding that plaintiffs had acted reasonably by suing all the defendants, and that the defend ants other than the Crown had also acted reason ably in instituting actions in warranty, the Trial Judge relied on well-known English precedents (Sanderson v. Blyth Theatre Company, [1903] 2 K.B. 533 [C.A.] and Bullock v. The London Gen eral Omnibus Company and others, [1907] 1 K.B. 264 [C.A.]), and ordered the Crown to pay the taxable costs of all the parties to the case. The Crown disputed this part of the judgment. It, of course, admitted that the Trial Judge enjoys a very wide discretion in the matter of costs, but it com plained that he had exercised it improperly by ordering the Crown to pay an exorbitant amount of costs which, it would appear, exceeds the amount claimed by plaintiffs.
The Crown's complaints appear to me to be partially justified. In my view, the Trial Judge did not take into consideration that plaintiffs could easily have determined before undertaking their action that the damage occurred in circumstances such that Arctic's liability could not have been
involved. If the Trial Judge had taken that into consideration, he would not have ordered the Crown to pay Arctic's costs, which would then have been charged by him to plaintiffs.
The Trial Judge further did not take into con sideration that the action brought against March and ITO and the action in warranty brought by the Crown against these two companies was not within the jurisdiction of the Court.
If the Trial Judge had taken all the circum stances of the case into account, he could not have ordered the Crown to pay all the costs. The least favourable order he could have made against the Crown would have been to order it to pay plain tiffs' costs and half the costs of March and ITO, leaving plaintiffs responsible for paying Arctic's costs and the other half of the costs of March and ITO.
For all these reasons, I would decide the three appeals before this Court as follows:
(1) I would allow the appeal of Her Majesty bearing No. A-245-77 (the one brought against the judgment making an order against the Crown), and I would vary the trial judgment only with respect to interest on the amount of the compensa tion and costs; with regard to the interest, I would say that it should only begin to run on October 20, 1972, and with regard to the costs at trial, I would say that the Crown should pay plaintiffs' costs and half those of March and ITO, and that plaintiffs should pay the costs of Arctic and the other half of the costs of March and ITO; in determining the costs of the appeal, taking into consideration that Arctic really had no interest therein and also that the Crown succeeded only on relatively minor points which do not affect March and ITO, I would not award any costs to Arctic and I would find that the Crown should pay 4/5 of plaintiffs' appeal costs and all the appeal costs of March and ITO;
(2) I would dismiss with costs the appeal of Her Majesty against the judgment dismissing her action in warranty against ITO and March (appeal No. A-246-77);
(3) I would dismiss plaintiffs' appeal bearing No. A-247-77 against the part of the judgment which dismissed their action against March, ITO and Arctic; I would make no order as to costs in the appeal between plaintiffs and March and ITO, since in reality this was only a cross-appeal; how ever, I would order plaintiffs to pay the costs of Arctic.
* * *
The following are the reasons for judgment rendered in English by
LE DAIN J.: I agree with the conclusion and reasons of Mr. Justice Pratte with respect to the liability of the Crown. On a balance of probabili ties the cause of the collapse of shed 38, which resulted in the damage to the goods of the cargo owners, was the particularly heavy accumulation of snow on the roof of a building not strong enough to support it. In all the circumstances the Crown had a duty as owner to cause the snow to be removed where, as in the present case, there was reason to conclude that it might present a danger. In my opinion nothing in the terms of the permit of occupation, the practice with respect to snow removal, such as it was, and the Crown's continu ing relationship to the building relieved it of this duty. On the contrary, the circumstances point in the other direction. The Crown maintained a con tinuing responsibility for maintenance and repair with respect to the transit shed, and it removed the snow from the roof of the adjoining office when requested to do so by the occupants. It knew of the nature and design of the shed, and, in particular, of its relative strength or solidity. It knew or was in a position to know, because of its continuing access to the shed, of the extent to which its structure may have been further weakened by the acts of users. It knew of the effect which the accumula tion of snow had had on the roof of the adjoining office. In all these circumstances it was fault on the part of the Crown not to have caused the snow to be removed from the roof of shed 38.
I am also in agreement with the conclusions and reasons of Mr. Justice Pratte with respect to the questions of interest and costs, the Crown's third party proceedings against March Shipping Lim ited ("March") and ITO-International Operators
Ltd. ("ITO"), and the plaintiffs' claim against Arctic Steamship Line ("Arctic").
The claim of the plaintiff cargo owners against March and ITO raises a question of some impor tance concerning the maritime jurisdiction of the Court under section 22 of the Federal Court Act. The question has a bearing on the convenience and practical operation of that jurisdiction in relation to cargo claims. I have come to the conclusion, not without difficulty and concern, that the Court does not have jurisdiction with respect to this claim.
The claim is directed against the shipping agent March as the holder of the permit of occupation from the National Harbours Board for the transit shed 38 and against the terminal operator ITO, which occupied the shed by arrangement with March and ran the terminal operation under its own agreement with the shipowners. While March played a role in relation to the delivery of the goods it was not charged under its agency agree ment with the owners with the physical care and delivery of the goods after discharge. It sent the consignees advice notes of the arrival of the vessel, indicating that the goods would be in shed 38, that they should be cleared through customs without delay, and that upon payment of the freight (if not prepaid) and other charges the bill of lading should be exchanged for a delivery order. The claim against March is not based on its perform ance in respect of these functions. It is based essentially on its alleged responsibility as the nomi nal occupier or tenant of shed 38. I shall not discuss the question of jurisdiction with reference to March because if the Court lacks jurisdiction with respect to the claim against ITO there is even less reason to find jurisdiction with respect to March.
Under its agreement with the shipowners ITO assumed responsibility for carrying out a terminal operation for the owners in the Port of Montreal. It was to guarantee a berth for vessels and to maintain shed and open dock space for cargo. It received export cargo for loading and assumed responsibility for the physical care and delivery of cargo after discharge. The stevedoring operations
involved in the loading and discharge of vessels were carried out by a stevedoring company (in this case Eastern Canada Stevedoring) under a sepa rate agreement with the owners. ITO played some role in relation to loading and discharge, but not in the physical handling of the cargo. On loading it prepared the stowage plan and directed where the cargo was to be stowed, and on discharge it had a checker for each hatch who instructed the steve dores where to place the cargo in the shed. The cargo was brought into the shed by employees of the stevedoring company. Delivery was made by ITO to cargo owners, or transport companies sent to pick up cargo for them, upon presentation of the delivery order issued by March in exchange for the bill of lading. On receipt of cargo for export ITO issued a non-negotiable dock receipt on behalf of Arctic which was subject to the terms and condi tions of the Arctic bill of lading and exchanged for it upon shipment. For its services under the termi nal operation agreement ITO received a "terminal charge" from the shipowners at rates specified in the agreement. The only charge collected directly from consignees in connection with the terminal operation was the charge for "tailgating", which is the delivery made by ITO to the tailgates of trucks sent to take delivery of cargo.
The Arctic bill of lading does not make express reference to the terminal operation. It provides that the carrier's responsibility for the cargo ceases when it leaves the deck of the vessel. It may be that there is an implied reference to the terminal operation in certain provisions of the bill of lading: the requirement that the bill of lading be surren dered in exchange for the goods or a delivery order; the right of the carrier "to lighten or to land the goods on the quay, wharf, into lighters, bulk, temporary depot or lazarette"; and the reference in the "Himalaya clause" to independent contractors employed from time to time by the carrier. In any event, I think it is a reasonable inference from the evidence concerning the custom and practice of the Port that it was at least an implied term of the contract of carriage that the cargo would be dis charged into the custody of the terminal operator from whom the cargo owners would take delivery.
Whether the claim against ITO must rest on delict or quasi-delict, or whether it can be based on contract as well, it would clearly not appear to fall within any of the specific heads of jurisdiction in subsection 22(2) of the Federal Court Act. The only two that call for comment are paragraphs (h) and (i), which read as follows:
22. (2) ...
(h) any claim for loss of or damage to goods carried in or on a ship including, without restricting the generality of the foregoing, loss of or damage to passengers' baggage or personal effects;
(i) any claim arising out of any agreement relating to the carriage of goods in or on a ship or to the use or hire of a ship whether by charter party or otherwise;
Paragraph (h) contemplates a claim for damage to cargo while carried on a ship and not one for damage after its discharge from a vessel. As for paragraph (i), the claim against ITO is not and could not be based on the contract of carriage. ITO was not a party to that contract. Any contrac tual relationship between the cargo owners and ITO would not be an "agreement relating to the carriage of goods in or on a ship" within the meaning of that paragraph.
In the absence of an applicable head of jurisdic tion in subsection 22(2), jurisdiction would have to be based on the general terms of subsection 22(1), as completed by the definition of "Canadian mari time law" in section 2. These provisions read as follows:
22. (1) The Trial Division has concurrent original jurisdic tion 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.
2....
"Canadian maritime law" means the law that was administered by the Exchequer Court of Canada on its Admiralty side by virtue of the Admiralty Act or any other statute, or that would have been so administered if that Court had had, on its Admiralty side, unlimited jurisdiction in relation to mari time and admiralty matters, as that law has been altered by this or any other Act of the Parliament of Canada;
The effect of these provisions—and, in particu lar, the words "if that Court had had, on its Admiralty side, unlimited jurisdiction in relation to maritime and admiralty matters"—together with section 42, which continues substantive Canadian maritime law as so defined, is that not withstanding the enumeration of claims in subsec tion 22(2), which is expressly declared not to restrict the generality of subsection 22(1) but to be for greater certainty, the Court has jurisdiction with respect to any other claim that may properly be held to be a maritime matter; provided, of course, that it is a matter which falls within feder al legislative jurisdiction with respect to navigation and shipping. In my respectful opinion we are not prevented from taking that view of the Court's jurisdiction by anything that what was said by the Supreme Court of Canada in the Tropwood" and Antares 12 cases, where it was not found necessary to consider the effect of the words "if that Court had had, on its Admiralty side, unlimited jurisdic tion in relation to maritime and admiralty mat ters" in the definition of "Canadian maritime law".
Although in my opinion these words permit the recognition of new maritime contracts as being within the jurisdiction of the Court, they cannot be applied without reference to what has historically been considered to be of a maritime nature when admiralty jurisdiction has been exercised to its greatest extent. Compare MacMillan Bloedel Limited v. Canadian Stevedoring Co. Ltd., et al., [1969] 2 Ex.C.R. 375 and The Queen v. Canadian Vickers Limited, [1978] 2 F.C. 675 [T.D.] at pages 687-688.
I turn now to the question whether there is a contractual foundation for the claim of the plain tiff cargo owners against ITO that may properly be held to be a maritime matter. Counsel for the plaintiffs characterized the legal relationship that arose when ITO took custody of the goods as one of sub-bailment. This does not necessarily import a contractual relationship since sub-bailment may exist apart from contract: Gilchrist Watt & Sand- erson Pty Ltd v York Products Pty Ltd, [ 1970] 3
1 1 Tropwood A.G. et al. v. Sivaco Wire & Nail Company et al., [1979] 2 S.C.R. 157.
12 Antares Shipping Corporation v. The Ship "Capricorn", et al., [1980] 1 S.C.R. 553.
All E.R. 825 [P.C.]. Moreover, the common law of bailment is not known to the law of Quebec, where, in the absence of a contractual relationship, the civil responsibility of one who assumes the custody of the goods of another would be governed by the law of delict and quasi-delict.
Counsel also referred, for the hypothesis of a contractual relationship, to the view that was sug gested of the legal relationship between the cargo owner and the terminal operator by Marceau J. in Marubeni America Corporation, et al. v. Mitsui O.S.K. Lines Ltd. et al., [1979] 2 F.C. 283 [T.D.]. That view, as I understand it, is that there was a contractual lien de droit between the cargo owner and the terminal operator based on the notion either that the shipowner entered into the agree ment with the terminal operator as agent or man- datary of the cargo owner or that the agreement contained a stipulation pour autrui in favour of the cargo owner. Assuming that the agreement between the shipowners and the terminal operator in the present case would be governed by Quebec law as the law with which it has its closest and most real connection, I am unable, with respect, to adopt this view of its effect. In his rationale of a contractual lien de droit in the Marubeni case Marceau J. seems to have proceeded on the view that the bill of lading contained an implied author ity to the shipowner to enter into the terminal operation agreement on behalf of the shipper or cargo owner and that the agreement was in fact entered into after the bill of lading was issued. That is certainly not the case here. The terminal operation agreement was entered into in December 1970, and the bills of lading were issued in the last week of January 1971. Moreover, the terminal operation agreement is a general agreement, not related to particular contracts of carriage, under which the terminal operator assumes an obligation towards the shipowners to perform a terminal service on a continuing basis for vessels of the owners. It was entered into by the shipowners as principals for their own account and not as agents or mandataries of any identified cargo owners. It could not have been contemplated that cargo owners would assume the obligation of payment of the terminal charge to the terminal operator. For similar reasons, I do not think the terminal opera tion contract can be held to contain a stipulation pour autrui in favour of the cargo owners. It does
not evidence any intent to create contractual rights in favour of determined or determinable third persons. It is rather, in my opinion, exclusively concerned with obligations assumed by the termi nal operator towards the shipowners and for the benefit of the shipowners. I have considered whether there is any basis for adopting the view that at the time of the discharge of the cargo into the custody of the terminal operator the carrier or his agent makes a contract with the terminal oper ator on behalf of each of the cargo owners, but I have come to the conclusion that there is not. There appears to me to be no further contractual intervention by or on behalf of the shipowners with respect to the terminal operation. The terminal operator takes custody of the cargo pursuant to and in accordance with the general agreement with the shipowners. I am, therefore, of the opinion that there is no contractual lien de droit between the cargo owner and the terminal operator, which relieves me of the necessity of considering that vexed question of Quebec law, whether, if there were a contract between them, it should be charac terized as one of deposit or lease and hire, having regard to the fact that it is not gratuitous. Cf. Commissaires du Havre de Québec v. Swift Canadian Company (1929), 47 Que. K.B. 118, and Franco Canadian Dyers Ltd. v. Hill Express Depot Ltd., [1951] Que. S.C. 177. I note that the conclusion that there is no contractual lien de droit between the cargo owner and the terminal operator is the one that was reached by both the Quebec Superior Court and Court of Appeal in Robert Simpson Montreal Ltd. v. Canadian Over seas Shipping Ltd.; Brown & Ryan Ltd.; Fjell- Oranje Lines and Fjell Line and Oranje Lijn (Maatschappij Zeetransport N. V.) (The "Prins Willem III"), [1968] 2 Lloyd's L.R. 192 [S.C.]; [1973] 2 Lloyd's L.R. 124 [C.A.].
In view of this conclusion it is not necessary to express an opinion as to whether, if the cargo owner were a party to it, the agreement between the shipowners and the terminal operator could properly be held to be a maritime contract within federal legislative jurisdiction with respect to navi gation and shipping. That question is rendered more difficult by the fact that in the present case the terminal operator was not responsible for the
stevedoring operations involved in loading and dis charge, unlike the terminal operation that was considered by this Court in The Robert Simpson Montreal Limited v. Hamburg-Amerika Linie Norddeutscher, et al., [1973] F.C. 1356 [C.A.]. In that case the question was whether the Court had jurisdiction with respect to third party proceedings by the shipowners against the terminal operator for breach of the terminal operation contract. Similar proceedings were brought in the present case by Arctic against ITO. I regard the question of jurisdiction raised by such proceedings to be different from the one raised by the cargo owner's action against the terminal operator.
It remains to be considered whether the claim of the cargo owners against the terminal operator, characterized as one of solely delictual responsibil ity for damage to cargo caused and occurring on land, could properly be held to be a maritime matter. There has historically been a fundamental distinction in respect of the criteria of maritime jurisdiction at its greatest extent between maritime torts and maritime contracts. The distinction was expressed by Justice Story in De Lovio v. Boit et al., 7 Fed. Cas. 418 [Mass. Cir. Ct. 1815] at page 444, where he said that jurisdiction with respect to maritime torts was "necessarily bounded by local ity", whereas jurisdiction with respect to maritime contracts extended "over all contracts, (whereso- ever they may be made or executed, or whatsoever may be the form of the stipulations,) which relate to the navigation, business or commerce of the sea". A maritime tort has been one committed on water and not on land, whereas a maritime con tract, if it has the requisite general character because of its subject-matter, may nevertheless be a maritime contract although it is to be performed on land. At its height the jurisdiction with respect to torts of the Court of Admiralty in England extended only to torts on the high seas and on the British seas and in ports within the ebb and flow of the tide. See De Lovio v. Boit and MacMillan Bloedel, supra. In the United States the require ment of jurisdiction has been that the tort must be committed on the high seas or other navigable waters. Paragraph 22(3)(c) of the Federal Court Act defines the waters to which the Court's juris-
diction extends. It would be against the whole tradition of admiralty jurisdiction with respect to maritime torts to hold that a tort or delict commit ted on land is a maritime matter. In the United States the practical difficulty created by the con clusion that the claim of a cargo owner against a terminal operator is not within the admiralty juris diction of the federal courts may be avoided in appropriate cases by the assumption of pendent jurisdiction. See Leather's Best, Inc. v. S.S. Mor- maclynx et al., 451 F.2d 800 (1971) [2d Cir.]. Unfortunately, such an exercise of jurisdiction is not open to this Court: Pacific Western Airlines Ltd. et al. v. The Queen, et al., [1980] 1 F.C. 86 [C.A.], affirming [1979] 2 F.C. 476 [T.D.]; Her Majesty The Queen v. Thomas Fuller Construc tion Co. (1958) Limited, [1980] 1 S.C.R. 695.
For these reasons, I agree with the disposition of the appeals proposed by Mr. Justice Pratte.
* * *
The following is the English version of the reasons for judgment rendered by
LALANDE D.J.: I have had an opportunity of reading the reasons for judgment of Pratte J., which admirably delineate the various aspects of the case and have been of great assistance to me.
I agree with my brother that, in principle, the third paragraph of article 1055 of the Civil Code cannot be applied to the Crown in right of Canada. Under that provision the Crown might be obliged to compensate for damage regardless of its liability under the ordinary rules of the civil law. This would go beyond what is provided for by the Crown Liability Act.
So far as liability for this mishap is concerned, I would go beyond the decision of Pratte J. and, in common with the Trial Judge, conclude that the Crown is solely liable for the mishap. In my view, there is no convincing proof that the use the tenant made of the shed contributed to its collapse. Fur ther, I think it is apparent from the record that
ITO's employees committed no fault in failing to foresee what occurred.
In my view, there is no need to consider whether the act of the thing, and the resulting presumption for the occupier, should play any part in the resolution of the case, as I find with the Trial Judge that the sole cause of the damage was an excessive accumulation of snow and ice on the roof of this shed, and that appellant is solely liable for what ensued.
Once the Crown had been found solely liable, Decary J. could only dismiss its action in warranty against ITO. Since his judgment, the Supreme Court of Canada has decided the Fuller case, referred to by Pratte J., and this is a further reason for dismissing the Crown's action in warranty.
In plaintiffs' appeal (A-247-77) from the judg ment dismissing their action against the defend ants other than the Crown, I concur with my brother as to the absence of any liability by Arctic. I have indicated why ITO cannot be held liable. This conclusion makes it unnecessary for me to rule on the question of jurisdiction.
However, I will say that, to the extent that the action has a tortious basis, I concur in the opinion of Pratte J. that it is not derived from "Canadian maritime law". On the other hand, I express no opinion on whether application of the contract concluded between Arctic and ITO, with reference to custody of the goods while they were in transit after being unloaded in the Port of Montreal, is within the jurisdiction of the Federal Court. I prefer not to rule on this point, which does not have to be decided in the case at bar.
I concur with my brother on the matter of interest and that of the costs at trial. I subscribe to the findings of his judgment and would dispose of the three appeals as he does.
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