VOL. XII.] EXCHEQUER COURT REPORTS. 243 ON APPEAL FROM THE QUEBEC ADMIRALTY DISTRICT. BETWE EN THE RICHELIEU AND ONTARIO NAV I OAT I 0 .` C 0 M PAN Y APPELLANTS; 1909' (PLAINTIFFS) Feb. 2 AND THE STE A MSIIIP IMP .E R I A L 1 R AND OTHERS EBPUNDENTS. (DEFENDANTS) f ,Shipping--Collision—Action in rem against ship whose owners are in liquidation—Jurisdiction of Exchequer Court -- Winding-Up Act---R. S. 1906, c. 144, secs. and .28•—Leave to bring action—Practice— " Sequestration." Held, (reversing the judgment of the Deputy Local Judge) that the jurisdiction of the Exchequer Court in respect' of proceedings in rem for collision against a ship (whose owners are at the time in liquidation) is not taken away by the provisions of secs. 22 and 23 of the Winding-Up Act (R. S. 1906, c. 144) ; and where leave is obtained from the proper forure to bring an action, as provided by sec. 22 of the Wind-ing-Up Act, the Exchequer Court is competent to entertain the same. Semble, that the word "sequestration " as used in sec. 23 of the Winding. Up Act means a sequestration to recover payment of a judgment already obtained. in re Australian Direct Steam 1Vavigatiou Co. (L. R. 20 Eq. 325) referred to. . THIS was an appeal from two judgments of the Deputy Local Judge in Admiralty for the District of Quebec: . The nature of the judgments appealed from, and the findings of the learned trial judge, are stated in the reasons for judgment on appeal. January 9th, 1909. - The appeal was now argued. A.R. Angers, K.C., for the appellants; C. A. Pope for the respondent. 16%
244 EXCHEQUER COURT REPORTS. [VOL. XII. 1909 Mr. Angers contended that inasmuch as the leave of THE the Superior Court, which was seized of the winding-up RICHELIEU AND ONTARIO proceedings against the owners of the ship, was obtained NA` co Tro` to bring the action in rem in the Exchequer Court, there v was no question as to the competency of the pro- THE STEAMSHIP ceedings. (Cites Marsden on Collisions (1). By The IMPERIAL. Admiralty Act, 1891, sec. 4, the Exchequer Court is Argument of Counsel. given jurisdiction in all cases of " contract and tort and proceedings in rem and in personam arising out of or connected with navigation, shipping, trade or commerce," &c., which may be had or enforced in any Colonial Court of Admiralty under the Colonial Courts of Admiralty Act (Imp.). This jurisdiction is as wide as the A dmi-ralty Court's in England with reference to actions in rem for collision. It could never have been the intention of Parliament to oust the jurisdiction of a federal court, with all its convenient procedure and process, in favour of a provincial court which was never contemplated to exercise admiralty jurisdiction in the ordinary way. The learned trial judge has erred. Mr. Pope argued that the Winding-up Court had no power to grant the order for leave to proceed against the ship in the Exchequer Court. The Superior Court; under all the English authorities, is the proper court to entertain the suit, and it cannot divest itself of its juris- diction. It cannot delegate what the statute has expressly given it for a special purpose. M oreover, sec. 23 of the Winding-up Act expressly prohibits sequestration of property within the control of the Winding-up Court. There is no technical meaning to be given to " sequestration" as used in the Act. It simply means the detention of property by a court of justice for the purpose of answering a demand that is made. That is exactly what the arrest of a ship is, and as I read sec. 163 of the Imperial Companies Act, it is void in the case of a creditor (1) 5th ed. pp. 74, 78.
VOL. XII.] EXCHEQUER COURT REPORTS. who can prove under the Winding-up—that is when the sequestration takes place after the Winding-up order is made. (In re Australian Direct Steam Navigation pany, (1). An arrest by the process of another court cuts out the jurisdiction over the property of the Winding-up Court. The Superior Court has jurisdiction to grant the STEAMSHIP full remedy open to the plaintiffs in respect of the colli-sion claim ; and where the res and the parties are before (r Coun the court the claim must be prosecuted there. Grande Steamship Company (2). I submit that the present proceedings are vexatious and unnecessary in that the plaintiffs could and should enforce their lien before the Superior Court. Mr. Angers, in reply, contended that the Superior Court had not the necessary procedure and machinery to try out an admiralty claim for collision ; for instance, the court has 'no power to call in the assistance of a nautical assessor. Again, there is no provision in the procedure of the Superior Court for filing a. preliminary act, a matter so essential to obtaining the truth and the whole truth in respect to a collision claim. Nor is there any process for the arrest of the ship in the Superior Court. The Rio Grande Steamship' Company's Case, counsel for the ship, is not in point, because there the lien was liquidated, and here our damages ""are not liquidated. CASSELS, J., now (February 2nd, 1909), delivered judgment. These appeals are from judgments of Mr. Justice Dun- lop,, Deputy Local Judge for the Quebec Admiralty District at Montreal, bearing date respectively, the 14th December, 1908 and the 81st December, 1908. The action is one for damages arising out of a collision in the River St. Lawrence, near Varennes, (1) L. R. 20 Eq. 325. (2) L. R. 5 C13. D., 282. 245 19 u9 THE lû lC xLf.IErJ ~y CO M- ONTAR IO v c o T lor L vH. E IMPERIAL. -- 3r„n i e n ~ nt se i, In re Rio cited by on the 5th
246 EXCHEQUER COURT REPORTS. [VOL. XII. 1909 day of July, 1908. The learned trial Judge states the THE allegations of fact as follows :-- RICHELIEU AND ONTARIO " On the 5th July, 1908, plaintiffs allege that the NAVIGATION << s Co. teamer Imperial, being improperly navigated, came , v. x, " into collision with the steamboat Quebec in the River STEAMS] LFP " St. Lawrence, near Varennes, causing the Quebec con- IMPERIAL. ---- " siderable damage and disabling her ; that the Quebec ItP,O.(,II. or .I41hIgin,•F<t. " came to anchor, and was subsequently towed up to " Montreal for repairs ; that the St. Lawrence Navigation " Co., the owners of the steamboat Imperial are in liquida-" tion under the Winding- Up Act ; that in compliance " with chapter 144, section 22, R. S. C. 1906, the Riche-" lieu and Ontario Navigation Co., the owners of the " Quebec, the vessel damaged, applied to the Winding-up " Court, the powers and jurisdiction of which are vested " in the Superior Court, for leave to take an action in " rem in admiralty against the steamer Imperial." Leave was granted, and admiralty proceedings against the S. S. Imperial were instituted. The statement of claim was filed on the 19th October, 1908, and the statement in defence on the 7th November, 1908. By the 14th paragraph of the statement in defence the respondents alleged that the action was not within the jurisdiction of the Court in view of Cap, 144 R. S. 1906 (The Winding -Up Act). To this paragraph of the defence the plaintiffs demurred. The plaintiffs moved to have the questions of law raised by paragraph 14 of the defence and by the plaintiffs' demurrer, determined, and they were fully argued before the learned trial Judge, who, after carefully 'considering the questions before him, came to the conclusion that the defence raised by paragraph 14 was well founded, and on the 14th December, 1908, pronounced judgment in favour of the defendants. The finding of the learned Judge is that the Exchequer Court on its admiralty side has no jurisdiction in respect
VOL. XII.I EXCHEQUER COURT REPORTS. 247 of this claim by virtue of the provisions of the Winding- 1909 Up Act (R. S. 1906, ch. 114). THE Ric HELlr rr The logical conclusion from this finding that the Court AND ONTARIO is without jurisdiction followed, and the action was dis- NA`'TAT TON missed by judgment pronounced on the 31st December, THE 1908. The appeals heard before me are from these two s T EA rrsxre IMPERIAL. judgments. They were fully' and ably argued by Mr. Angers, K.C. for the appellants, and Mr. Pope for the J:dgme t. respondents. I have considered the case and I am unable to concur in the decision of the learned trial Judge. The sole question is whether or not the admiralty jurisdiction of the Exchequer Court in respect of such a matter has been taken away by virtue of sections 22 and 23 of the W inding-Up Act. After hearing counsel for both parties, and considering the facts set out in the various affidavits filed, the Judge of the Superior Court of Montreal, being the Judge having jurisdiction in the Winding-up proceedings, made an order giving leave to the plaintiffs to institute'proceedings in the Exchequer Court in Admiralty. No appeal was taken from the judgment, and had the order been appealed from it would not likely have bèen varied, as it was a question of discretion. ( Thames Plate Glass Co. y. Land and Sea Telegraph Co. (1). I do not think this order would confer jurisdiction if such jurisdiction had been taken away by the statute ; but it has a strong bearing on the question to be considered. The provisions of section 22 of the Winding- Up Act (R.S. 1906. ch. 144) read as follows :— " After the winding-up order is made, no suit, action or other proceeding shall be proceeded with or commenced against the company, except with the leave of the Court and subject to such terms as the Court imposes." The provisions of section 23 are as follows (1) L. R. 6 Ch. 643.
248 EXCHEQUER COURT REPORTS. [VOL XII. 1909 " Every attachment, sequestration, distress or execu- Tiih' tion, put in force against the estate or effects of the RI AND ONTARIO company after the making of the winding-up order shall NAVIGATION Co. be void " . r' Practically similar provisions are to be found in sections TILL STEAMSIIR' 87 and 163 of the Imperial Companies Act 1862 (25-26 IMPERIA L. Vict. chap. 89). Reasons for Judgment. Section 87 :— " When an order has been made winding up a company under this Act, no suit, action, or other proceeding shall be proceeded with or commenced against the company except with the leave of the Court and subject to such terms as the Court may impose." Section 163 :— " Where any company is being wound up by the Court, or subject to the supervision of the Court, any attachment, sequestration, distress, or execution, put in force against the estate, or effects of the company, after the commencement of the winding.up shall be void to all intents ". Buckley, in his work on the Companies Act, 8th ed. at page 274, states as follows :— " By section 163, where a company is being wound up by or under the supervision of the court, any attachment, sequestration, distress or execution, put in force against the estate or effects of the company after the commencement of the winding-up shall be void to all intents. But it was decided in 1864(1) that section 163 is to be read with and is controlled by the 85th and 87th sections, and that the joint effect of these sections is to put the creditor who desires to proceed to execution after the winding-up order to the necessity of coming to the Court and asking for leave to so proceed, and whether he shall be allowed to proceed or•not is a question for the discretion of the Court. It is difficult no doubt to see why the clear and precise provi- (1) Exhall Mining Co. 4 De G. J. & S. 377.
VOL. XII.] EXCHEQUER COURT REPORTS. 249 sions of section 163 should be read as if a distress were a 1909 proceeding ' within section 87, but the Court is now THE PUI HOELIE U bound by the decision and the many subsequent cases AND ONTARIu- which have followed it". NAVIGATION Co. This statement of the law is amply supported by the v. THE authorities. STEAMSHIP IMPERIAL. The first decision was that of Eehall Mining Co., in 1864, reported in 4 De G. J. & S. :377. Then there is the Jûâgén case of Railway Plant and Steel Co., In re Taylor (1) in which the judgment was delivered by Hall ; V.C. After this decision follows Lancashire Cotton Spinning Co. Ex. p. Carnelly (2). This was a judgment of Lord Justices Cotton, Lindley and Bowen,. given in 1887. Then comes the case of Higginshaw Mills v. Spinning Co. (3), that being a decision of Lord Justices Lindley and Lopes in 1896. And see also Lindley on the Law of Companies (4). To the like effect will be found a series of decisions in the Ontario Courts : See In re Lake Superior Native Copper-Co. (5). In Parker and Clark's Company Law, (1909) commencing at page 388, numerous authorities are cited. But it will be seen that the judgment of Osler, J. at page 485 of 23 Ont. A. R., in the case of Shaver y. Cotton is on a different question, namely, the right to proceed against contributories, the Canadian statute not being similar to the English Act in this respect. The finding of the learned trial Judge and the argument of the respondents are mainly based on two authorities, namely, In re Australian Direct Steam Navigation Co. (6) and The Rio Grande Steamship Co: (7). . . On the question of the jurisdiction of the Exchequer Court on its Admiralty side being ousted, the only matter for consideration, these authorities support the appellants' (1) L. R. 8 Ch. D. 189. (4) 6th ed. at page 907. (2) 35 Ch. D. 656. (5) 9 Ont. R. 277,' at page 283. (3) (1S96) 2 Ch. 544. (6) L. R. 20 Eq. 325. (7) L. R. 5 Ch. D. 282.
250 EXCHEQUER COURT REPORTS. [VOL XII. 1900 contention. The head-note to In re Australian Direct THE Steam Navigation Cc., is as follows :— RICHELIEU AN L) ONTARIO " The proper mode of enforcing a maritime lien on a N°` TIL A'PIoN vessel belonging to a company which has been ordered to be wound up is by a proceeding in the winding-up and Ti IE STEAM -SIIII' not by a proceeding in rem in the Admiralty Court. The IhieETtrAL, arrest of a vessel by the Admiralty Court is a sequestra- Reasons fox , Judgment t ion within the meaning of the Companies Act, 1862 n , section 163." Were it not for this judgment of a very able Judge, which seems to have been accepted, I would have thought that " sequestration " as used in section 23 of the Dominion Winding-Up Act, meant a sequestration to recover pay -ment in respect of a judgment already obtained. I have already quoted the provisions of this section. It would have occurred to me that what is contemplated by this section is to prevent judgment creditors who have not already obtained liens, from getting higher rights after the winding-up order had been made. The result of the proceeding in the present action may be a dismissal of the action. However, in the case of Re Australian Direct Steam Navigation Co. (supra) no leave bad been obtained by the plaintiff. Besides in that case the learned Master of the Rolls only stayed the proceedings upon a sum being carried to a separate account to answer the damages, an order which would not have been made had there been no jurisdiction. The Master of the Rolls evidently treated the case before him as an application for leave to proceed, and refused the leave on security being given. In the Rio Grande Steamship Company's Case (supra) the jurisdiction is expressly upheld by the Court of Appeal. An order had been made on the 1st of October, 18.75, giving leave to proceed in Admiralty. At page 285, James, L. J. says :—
VOL. XII.] EXCHEQUER COURT REPORTS. u An order was made .accordingly on the 1st October 1875, and notwithstanding what is stated to have been said by the Vice-Chancellor as to that order, I am of opinion that it was the. right order to be made unless the company was able and willing to give the. applicant suf_ ficient .security for the amount of his debt, and cosh, charges and .expenses." I think that the judgments of the 14th and 31st De- JÛsglentr comber, 1908 should be reversed, and that the application of the plaintiffs (appellants) to reject paragraph 14 of the defence, should be granted ; and that the plaintiff's' action be declared to be within the jurisdiction of the Local Judge in Admiralty for the Admiralty District of Quebec. I also think that the case should be sent back to the Deputy Local Judge at Montreal for trial before him. The costs of this appeal, and the costs before the Deputy Local Judge to be paid by the defendants (respondents). Judgment aecordingty. Solicitors for appellants : Angers, Delorimier & Solicitors for respondent : Lafleur, Macdougall, Mac- 251 190!! • Tanm R lcxI.LTM J AND O NPAR.I 0 NAvCA TION Tx~ STEAMSHIP IMPERIAL. _ Godin. Farlane & Pope.
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.