Antarres Shipping v. The Ship "Capricorn" et al.

Antarres Shipping v. The Ship "Capricorn" et al.
Collection
Supreme Court Judgments
Date
1976-01-30
Report
[1977] 2 SCR 422
Judges
Laskin, Bora; Ritchie, Roland Almon; Pigeon, Louis-Philippe; Beetz, Jean; de Grandpré, Louis-Philippe
On appeal from
Federal Court of Appeal
Subjects
Maritime law
Decision Content
SUPREME COURT OF CANADA
Antarres Shipping v. The Ship "Capricorn" et al., [1977] 2 S.C.R. 422
Date: 1976-01-30
Antares Shipping Corporation (Plaintiff) Appellant;
and
The Ship "Capricorn" (also known as the Ship "Alliance"), Delmar Shipping Limited and Portland Shipping Inc. (Defendants) Respondents.
1975: June 23 and 24; 1976: January 30.
Present: Laskin C.J. and Ritchie, Pigeon, Beetz and de Grandpré JJ.
ON APPEAL FROM THE FEDERAL COURT OF APPEAL
Maritime law — Jurisdiction in rem and in personam — Arrest of the ship in Canada — Private international law — Service ex juris — Federal Court Act, R.S.C. 1970, (2nd Supp.), c. 10, ss. 22(a), 43, 44 — Federal Court Rules, Rule 307.
The appellant ("Antares"), a Liberian corporation, claims to have bought the Ship "Capricorn" (renamed the "Alliance") from the respondent Delmar Shipping Limited ("Delmar"), another Liberian corporation, on May 17, 1973. Delmar then chartered the ship, which was to be delivered to the charterer between July 15 and August 30, 1973. On June 5, 1973, while the ship was en route to Quebec, Delmar sold it to the respondent Portland Shipping Inc. ("Portland"), also a Liberian company, through registration of a bill of sale in the United States. On June 7, 1973, Antares had the ship arrested in the Port of Quebec pursuant to a writ of the Federal Court. While at the same time bringing in rem proceedings against the ship, the appellant claimed personal relief against Delmar and Portland and cancella­tion of the sale of the ship by Delmar to Portland. On June 11, 1973, an appearance "without admitting the jurisdiction of the Court" was entered by solicitors on behalf of the ship. On June 22, 1973, the Federal Court granted the release of the vessel upon a bail bond in the amount of $4,000,000. The solicitors, appearing for Portland as well as for the ship, moved for leave to enter an additional appearance to object to the jurisdiction of the Court; the motion was denied. The solicitors for the ship and for Portland then moved to strike out the statement of claim and set aside the arrest. Pratte J. of the Federal Court concluded that the action brought by Antares was merely an action in rem and that it was not open to the appellant to obtain personal remedies against Delmar and Portland, neither of which was impleaded. At the same time, he made an order that both Delmar and Portland be added as defendants, that proceedings be stayed and that if Delmar and Portland were not served within sixty days the statement of claim and the arrest of the ship should be struck out. In an effort to comply with this order and since neither Delmar nor Portland appeared to have any presence in Canada, Antares moved on November 7, 1973 for an order for service upon them ex furls. On November 12, 1973 Pratte J. dismissed the motion for service ex juris since, in his opinion, the subject matter of the action did not have any relation or connection with Canada. The Federal Court of Appeal upheld the judgment of the Trial Division judge. Hence the appeal to this Court.
Held (Laskin C.J. dissenting): The appeal should be allowed.
Per Ritchie, Pigeon, Beetz and de Grandpré JJ.: This Court agrees with the lower courts that the Federal Court has jurisdiction to hear an action in rem against the ship and that claims for relief in personam could be joined. All that remains to be determined is whether the Federal Court exercised its discretion judiciously in dismissing the motion for service ex furls on the foreign companies, Delmar and Portland, thus refusing to exer­cise the jurisdiction conferred upon it.
The overriding consideration which should have guided the trial court in exercising its discretion was the existence of some other forum more convenient and appropriate for the pursuit of the action and for securing the ends of justice. In the case at bar the record discloses that the sale to the appellant took place in England, the bill of sale between the respondents was registered in the United States and the ship was registered in Liberia, where all the companies involved were incorporated. This cause of action has some relationship, therefore, with at least three jurisdictions outside of Canada and the issue is whether any one of them is more convenient or suitable than the Federal Court. There is no factual basis for concluding that any one of the foreign jurisdictions would provide a forum in which the facts could be assembled and the issue tried without causing inconvenience to one or more of the parties. There are, on the other hand, two factors that weigh heavily in favour of the Federal Court as the appropriate forum for the trial of this action: participation by Portland and the position of Delmar. Portland participated actively in the present litigation by securing the release of the ship and giving the bond fixed by the Court. Even though the appearance was made under protest as to the jurisdiction of the Court, the giving of the bond constituted a waiver of this protest. As for Delmar, the arrested ship was its sole asset and the only fund then available anywhere to respond to a judgment against it was the bail bond in the Federal Court. The action is not limited to a claim for possession of the ship since there is a joint and several claim between the respondent Companies which would probably exceed $2,000,000. In the event of the appel­lant's success in this action recovery could not be had against Delmar in any court other than the Federal Court.
The Federal Court erred in principle in refusing to exercise its jurisdiction under Rule 307 on the sole ground that the cause of action had no relation or connection with Canada.
Per Laskin C.J., dissenting: There are two grounds upon which this appeal should be dismissed. First, the appeal to this Court has been brought from an affirma­tion of an admittedly discretionary order, and it is rare for this Court to interfere on a discretionary matter of procedure, especially when there have been concurrent decisions below. The consequences for an adjudication on the merits resulting from this Court's refusal to interfere do not justify a substitution of discretion espe­cially when the courts below cannot be said to have erred in any matter of principle. Secondly, even if it is acknowledged that the Federal Court has jurisdiction to hear the action in rem, considerations of comity and considerations of forum convenience are strongly against a direction of this Court for service ex juris upon Delmar or upon Portland.
The plaintiff and the defendants are foreign and the only contact of any of the issues between those parties with Canada lies in the arrest of the ship in a Canadian port. The arrest of the foreign ship, unless it was made to enforce an asserted maritime lien, does not authorize the Federal Court to extend Rule 307 so far as to allow a foreign plaintiff to pursue one or more claims against a foreign defendant when none of the incidents giving rise to the claims arose in Canada or had any contact with Canada. Furthermore, there is no nexus between the action in rem and the claims joined therein for personal relief. The appellant is not the acknowledged owner of the ship and any claim to the ship itself depends on a prior determination of the validity of the contract of sale on which the appellant relies. The personal claims would not, taken alone, be entertained by the Federal Court against a foreign defendant who was not served here and who did not submit to the jurisdiction. The arrest of the ship in Canada, the validity of which has not yet been established, does not alter the situation.
[Vitkovice Horni v. Korner, [1951] A.C. 869 C.A.P.A.C. v. International Good Music, [1963] S.C.R. 136; The Jupiter (No. 2), [1925] P. 69; Société générale de Paris v. Dreyfus Brothers (1887), 37 Ch. D. 215: G.A.F. v. Amchem, [1975] 1 Lloyd's Rep. 601; Gulf Oil Corp. v. Gilbert (1947), 330 U.S. 501; The Atlantic Star (1973), 2 All. E.R. 175; La Société du Gaz de Paris v. La Société Anonyme de Navigation, [1926] S.C. (H.L) 13; Dunbar & Sullivan Dredging Co. et al. v. The Ship "Milwaukee" (1907), 11 Ex. C. R. 179. referred to.]
APPEAL from a judgment of the Federal Court of Appeal affirming the decision of the Trial Divi­sion judge dismissing a motion for an order of service ex juris. Appeal allowed, Laskin C.J. dissenting.
R. Langlois and G. Vaillancourt for the appellant.
G. de Billy, Q.C., and S. Harrington for the respondents.
THE CHIEF JUSTICE (dissenting)—This appeal concerns the in rem jurisdiction of the Federal Court of Canada on its admiralty side, the joinder of claims for personal remedies in the in rem proceedings against Court—added foreign defendants and the propriety of leave to serve those defendants ex juris. It comes here by leave of this Court to enable the appellant plaintiff to challenge the judgment of the Federal Court of Appeal affirming the order of Pratte J. in the Federal Court, Trial Division, refusing leave for service ex juris upon the defendants Delmar Shipping Co. Ltd. and Portland Shipping Company Inc.
The Ship "Capricorn" (renamed the "Alliance" during the unfolding of the issues herein), a ship of Liberian registry, was arrested in the Port of Quebec on June 7, 1973 pursuant to a warrant of arrest issued at the instance of the appellant plaintiff, a Liberian corporation, claim­ing to be owner of the ship and entitled to its possession. The appellant claims to have purchased the ship from its then owner Delmar, also a Liberi­an corporation, on or about May 17, 1973 follow­ing negotiations between the appellant's Italian brokers and Delmar's English brokers. The appel­lant's amended declaration states that the appel­lant had immediately entered into a three year less one day charter of the ship, which was to be delivered to the charterer between July 15, 1973 and August 30, 1973 but that Delmar then purported to withdraw the ship from the market and thereafter purported to sell it to Portland, also a Liberian company, through registration of a bill of sale in the United States on June 5, 1973. The ship was then on the high seas en route to Quebec.
Although bringing in rem proceedings against the ship alone, the appellant claimed relief by way of specific performance and damages against Delmar and Portland and, necessarily, also sought a declaration of the nullity of the alleged sale by Delmar to Portland. An appearance "under all legal reserves ... and especially without admitting the jurisdiction of this Court" was entered by solicitors on behalf of the ship on June 11, 1973. The vessel was subsequently released on June 22, 1973, upon a bail bond in the amount of $4,000,-000 being furnished, the surety acknowledging therein and submitting to the jurisdiction of the Court. Immediately thereafter the solicitors for the ship moved for leave to enter a conditional appearance to object to the jurisdiction of the Court acknowledging in the motion that they were appearing for Portland as well as for the ship but the motion was denied. A later motion to strike out the statement of claim and to set aside the arrest of the ship was likewise denied, and it is the judgment on that motion that lies at the base of the issues that are involved in the present appeal.
I think it important to notice that the matters now before this Court are here before any statement of defence has been filed. They are, moreover, jurisdictional matters and do not turn on any question of what is the proper law to be applied on the substantive questions raised by the statement of claim but, of course, the question of choice of law has some relevance. Pratte J., in dismissing the motion to strike out the statement of claim, came to the conclusion in reasons delivered on October 1, 1973[1] (a necessary conclusion if the motion was to be dismissed) that the Federal Court of Canada had jurisdiction over the ship and, more specifical­ly, that (in his words) "the plaintiff's claim, which is a claim for the enforcement of an agreement of sale of a ship, is within the jurisdiction of the Court". He also concluded that in the action as framed, being merely an action in rem, it was not open to the appellant to obtain the personal reme­dies sought against Delmar and Portland, neither of which was impleaded. In his reasons, Pratte J. said this:
The Plaintiff's action was instituted solely against the Defendant ship. Neither Delmar nor Portland were ever impleaded. And even if it can perhaps be argued that Portland has become a party to the action as a conse­quence of its taking an active part in the proceedings prior to its making the present application, the same thing cannot be said of Delmar.
... I cannot but reach the conclusion that the Plaintiff in this action against the Defendant ship could neither seek an order for specific performance against Delmar nor seek the annulment of the sale made by Delmar to Portland. Moreover, since the Plaintiff's claim for damages is not secured by a maritime lien, the Plaintiff could not arrest the Defendant ship without, at the same time, seeking the annulment of the sale made by Delmar to Portland.
It follows that, from a strict technical point of view, the arrest of the Defendant ship could be set aside and the statement of claim could be struck out in its entirety. However, having in mind that, under Rule 1716 "no action shall be defeated by reason of the misjoinder or nonjoinder of any party", I am of the view that the Plaintiff shall be given leave to add both Delmar and Portland as Defendants provided that the statement of claim be served on these two companies within 60 days of the date of this order.
Pratte J. thereupon made an order that both Delmar and Portland be added as defendants, that all proceedings be stayed for 60 days and that, if in the meantime the appellant did not file evidence of service upon the added defendants the statement of claim and the arrest of the ship should be struck out. He concluded his reasons as follows:
What I have just said must not be interpreted as implying the view that the Plaintiff should be given leave to serve ex juris in the event of its being unable to have the statement of claim served on Delmar or Portland within Canada.
Having regard to the foregoing order, and since neither Delmar nor Portland appeared to have any presence in Canada, the appellant moved on November 7, 1973 for an order for service upon them ex juris. In the meantime, the solicitors for the ship and for Portland had appealed the order of Pratte J. of October 1, 1973, affirming the Court's jurisdiction. The appellant's motion for service ex juris was heard by Pratte J. on Novem­ber 12, 1973 and dismissed with the following endorsement:
As it appears that the subject matter of this action does not have any relation or connection with Canada, the Plaintiff's application to serve 'ex juris' is dismissed with costs.
The next day a notice of appeal from this dismissal to the Federal Court of Appeal was issued by the appellant, and on the same day it also gave notice of intention to cross-appeal from the order of Pratte J. of October 1, 1973. The ship, through its solicitors acting on its behalf alone, thereupon moved to quash and set aside the notice of cross-appeal.
At this stage there were pending in the Federal Court of Appeal an appeal by the ship and by Portland from the order of Pratte J. of October 1, 1973, a notice of intention by the appellant to cross-appeal and a motion to quash the cross-appeal, and an appeal by the appellant from the order of Pratte J. of November 12, 1973 refusing an order for service ex juris. The proceedings now took what I can only term an extraordinary turn. Without hearing the parties involved, and address­ing himself to the notice of motion to quash the cross-appeal and to the appeal from dismissal of the application for service ex juris, the Chief Justice of the Federal Court issued what he desig­nated as a "Memorandum for the Registry" dated November 29, 1973. It was appended as a schedule to a certificate issued on November 30, 1973 by the Deputy Clerk of Process of the Federal Court of Appeal, the certificate referring to and setting out an order of the Chief Justice endorsed on the certificate. I set out the certificate (which is entitled in the two styles of cause referable to the two proceedings aforementioned) in full:
Upon the suggestion of the Chief Justice as expressed in his Memorandum to the Registry dated November 29, 1973 (copy of Memorandum attached as Schedule A to this my certificate) and,
Upon the consent of the solicitors for both parties by telephone to the Registry on November 30, 1973;
I HEREBY CERTIFY that the Chief Justice pro­nounced and endorsed the following order on the above mentioned memorandum.
ORDER
Pursuant to consents received by the Registry by telephone, I hereby make an order to the effect of paras (a), (b), (c), (d) and (f) supra and I order that the appeal on A-200-73 be heard at Quebec City on Monday, December 17, 1973, commencing at 10:30 a.m.
November 30, 1973
W. R. JACKETT
C.J.
DATED AT OTTAWA, this 30th day of November, 1973.
The memorandum, which was the foundation of the certificate and of the order which the certifi­cate incorporated, must also be set out in full to show why the order and the certificate were issued. It is in these words:
FEDERAL COURT OF APPEAL
DANS LA COUR D'APPEL FÉDÉRALE
November 29, 1973.
MEMORANDUM FOR THE REGISTRY:
re: A-169-73 The "Capricorn" v. Antares Ship­ping-A-200-73 Antares Shipping v. The "Capricorn" Please communicate with the solicitors for the parties, in the first instance by telephone, and ask them to consider whether there is any advantage in hearing the Appellant's application to quash the Notice of Intention to Cross-Appeal on A-169-73 before the appeal from dismissal of the application for service ex juris on A-200-73 is ready for hearing. If there is no such advantage, I suggest that the hearing of the latter appeal be expedited and that the application to quash, which is now set down for December 7, 1973, be deferred for hearing immediately after the result of the appeal on A-200-73 has been finally determined.
As it seems to me on a preliminary reading of the papers, if the refusal of leave to serve ex juris is ultimately upheld, either by a decision of this Court or by a decision of the Supreme Court of Canada, the judgment of the Trial Division of October 1st will operate to strike out the action and set aside the arrest of the ship, in which event the Defendant Ship will have got everything sought by its motion to strike and there will be no alternative to its appeal being discontinued or quashed. If that happens and the appeal from the Octo­ber 1st judgment is discontinued or quashed, there will then be no "appeal" in the Court to act as a foundation for the Rule 1203 Notice of intention to ask, upon the hearing of the "appeal", that the decision that is the subject of the "appeal" be varied and the notice that is the subject of the application to quash will become of no effect.
On the assumption that the offhand view of the matter that I have indicated is correct, it does seem to me that the question as to whether there is going to be compliance with the condition in the October 1st judg­ment must be settled before there will be any point in hearing the application to quash.
Unless, in my above appraisal of the situation, I am overlooking something, I suggest
(a) that the motion to quash be adjourned sine die subject to paragraph (f);
(b) that the appeal book on A-200-73 be prepared immediately (this should not take more than a couple of days);
(c) that the Appellant file and serve his memoran­dum (Rule 1208) not later than December 6, 1973;
(d) that the Respondent file his memorandum (Rule 1208) not later than December 12, 1974;
(e) that the appeal be heard either (i) at Quebec City or Montreal on Monday, December 17, 1973, commencing at 10:30 a.m., or
(ii) at Ottawa on Friday, December 14, 1973, com­mencing at 10:30 a.m.
(f) that the motion to quash be heard on the same day if, after the hearing of the appeal on A-200-73, it appears to be settled that the appeal on A-169-73 is going to proceed.
If the applicant is of the view that there is some substantial reason for proceeding with its motion to quash on December 7, the Court will be ready to hear it in Quebec on that day. Otherwise, I hope that the parties can agree on the arrangement that I have sug­gested above, in which case, I will so order. I should, of course, be glad to consider any variation in the above, particularly if the parties can agree on it. (If the parties agree on my proposal, I should appreciate it if they would agree on the place and date for hearing of the appeal.)
W. R. JACKETT Chief Justice
The appeal from the order of Pratte J. of November 12, 1973, refusing to permit service ex juris, came before the Federal Court of Appeal on February 25, 1974. It was dismissed by a unani­mous Court upon the following oral reasons deliv­ered by Jackett C.J.:
"Assuming, without deciding,
(a) that the Court has jurisdiction in respect of the cause of action set out in the Declaration, and
(b) that that cause of action can be enforced by way of an action in rem to the extent that relief can be obtained by an action in rem,
there is no connection between the same cause of action as against either of the corporate Defendants and Canada that would justify the exercise of the Court's discretion under Rule 307 to order service of the Decla­ration on such Defendants outside Canada".
Leave to appeal to this Court from this order of dismissal was given on May 21, 1974. In the interval between the order of dismissal and the granting of leave to come here, another memoran­dum, this time styled "Memorandum for Coun­sel", dated April 9, 1974, was issued by Jackett C.J. This followed upon a notice of appeal filed by the appellant on March 7, 1974, from Pratte J.'s judgment of October 1, 1973 and upon a motion to quash this appeal lodged on behalf of the ship on March 26, 1974. The "Memorandum for Coun­sel", an unusual document to come from a Judge in respect of a motion returnable some three weeks later, is as follows:
THE FEDERAL COURT OF CANADA
The Chief Justice
OTTAWA, K1A 0H9
April 9, 1974
MEMORANDUM FOR COUNSEL
Re: Antares Shipping Corporation v. The Ship "Capricorn" A-65-74
This is an application by the respondent to quash an appeal from the Trial Division to the Federal Court of Appeal.
The Notice of Appeal, which was filed on March 7, 1974, was filed to launch an appeal from a judgment delivered on October 1, 1973.
An appeal may be brought to this Court from the Trial Division, by virtue of section 27 of the Federal Court Act, by "filing a notice of appeal" within either ten days or thirty days, depending on the sort of appeal from the "pronouncement" of the judgment appealed from or within such further time as the Trial Division may fix or allow.
Obviously this appeal was not launched within thirty days and there is in the Notice of Appeal a statement, supported by affidavit, that the Trial Division has not fixed or allowed any other time limit.
Superficially, it is impossible to imagine any fairly arguable basis for not quashing the appeal, and I am loathe to set up a Court of three judges in Quebec City to hear a motion which would seem to be beyond contestation.
I should appreciate it if counsel would discuss the matter and either
(a) assure me, through the Registry, that there is some fairly arguable question to be decided, or
(b) find some other way of disposing of the matter.
W. R. JACKETT Chief Justice Jackett C.J.'s memorandum had its effect because on April 23, 1974 the appellant issued a notice of discontinuance of its proposed appeal from the order of October 1, 1973.
All of the proceedings touching the matter of service ex juris and touching the appellant's notice of intention to cross-appeal and its subsequent notice of appeal and the discontinuance thereof left untouched the appeal of the ship and of Portland from the October 1, 1973 order of Pratte J. affirming the Federal Court's in rem jurisdiction and its jurisdiction over a claim for enforcement of the alleged agreement for sale of the ship. At the hearing before this Court on the question of service ex juris, counsel for the ship and for Portland conceded that the judgment of October 1, 1973 must be taken as well-founded on the question of jurisdiction. It must equally be taken to have been well-founded when the Federal Court of Appeal heard the appeal from Pratte J.'s order of Novem­ber 12, 1973, refusing to allow service ex juris. Since the notice of appeal from the order of Octo­ber 1, 1973 brought by the respondent ship and by the respondent Portland was dated October 9, 1973, there would have been merit in bringing it on at least as early, if not at the same time as the appeal on the question of service ex juris, an appeal which Jackett C.J. forced on under his "Memorandum for the Registry" of November 29, 1973. I say this because the parties have been involved in a series of proceedings extending over two years and no statement of defence has as yet been filed.
Although that extra-curial memorandum took cognizance of the conditional nature of the order of October 1, 1973, so far as its effect on the action and on the arrest was concerned, it was also based on an anticipated decision of this Court in respect of service ex juris, and that is not a matter upon which the Federal Court of Appeal should posit any calculations on what its own course of conduct should be with respect to proceedings that are properly before it. Neither Pratte J. nor the Federal Court of Appeal gave any extended reasons for their deci­sions on the question of service ex juris. There was no reference to the Federal Court Rules which, in my view, have an important bearing on the ques­tion. Division G of the Federal Court Rules con­sists of "Special Rules for Admiralty Proceedings", the Court being invested with admiralty jurisdiction under s. 22 of the Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10. Rule 1001 provides that "except to the extent that they are inconsistent with a rule in this Division, the rules applicable to other proceedings are applicable to Admiralty proceedings". One of these not incon­sistent rules is Rule 1716 under which Pratte J. acted in his judgment of October 1, 1973 in order­ing that Delmar and Portland be added as defen­dants. It provides that no action shall be defeated by reason of the misjoinder or nonjoinder of any party, and it goes on to provide, inter alia, that the Court may order the joinder of a party (in the case of a defendant, his or its consent is not required) where necessary to ensure that all matters in dispute in the action may be effectually and com­pletely determined.
Rule 1002(7) provides that "subject to the rules applicable to joinder of causes of action, proceedings in rem may be joined in the same action with proceedings in personam". I do not read this as requiring any particular sequence of proceedings, so that, apart from any question of proper joinder of causes of action or parties or of service ex juris, there is no fatal defect in the present proceedings in the joinder of personal claims in the in rem proceedings. I should say here that the association of personal claims with the in rem proceedings was not, as such, attacked in this Court.
In short, I am of the opinion that the judgment of Pratte J. of October 1, 1973 must be taken, for present purposes, as determining in favour of the appellant any question as to the frame of the action and as to the claims for relief. I think it unnecessary therefore to dwell on whether jurisdic­tion arises under s. 22(1) or under s. 22(2) of the Federal Court Act, or to consider the application of s. 22(3), s. 43(1)(2)(3) or s. 44. The only question to be determined is whether, jurisdiction in rem being established and claims for relief in personam being properly joined, the foreign defendants may be subject to service ex juris.
Such service is dealt with in Rule 307 of the Federal Court Rules. It is couched in the most general of terms, as follows:
RULE 307. (1) When a defendant, whether a Canadi­an citizen, British subject or a foreigner, is out of the jurisdiction of the Court and whether in Her Majesty's dominions or in a foreign country, the Court, upon application, supported by affidavit or other evidence showing that, in the belief of the deponent, the plaintiff has a good cause of action, and showing in what place or country such defendant is or probably may be found, may order (Form 5) that a notice of the statement of claim or declaration may be served on the defendant in such place or country or within such limits as the Court thinks fit to direct. (Form 6)
(2) An order under paragraph (1) shall fix a time, depending on the place of service, within which the defendant is to file his defence or obtain from the Court further time to do so.
(3) If any problem arises concerning service of an originating document in a matter other than an action, an application may be made to the Court for directions.
On its face Rule 307 leaves the matter of service ex juris completely in the discretion of the Court. There is no specification of the cases in which such service may be ordered, not even any standards by which the discretion is to be guided. Prior to the promulgation of Rule 307 and prior to the estab­lishment of the Federal Court, service ex juris in the predecessor Exchequer Court of Canada was governed by s. 75 of the Exchequer Court Act , R.S.C. 1952, e. 98, now repealed, and by Rule 76 of the Exchequer Court Rules, also now repealed. These provisions did not differ substantially from the present Rule 307 , and likewise gave no guid­ance as to what situations might justify an order for service ex juris. However, the Exchequer Court on its admiralty side did have prescribed standards under Rule 20 of the Admiralty Rules, promulgated under the Admiralty Act, R.S.C. 1952, c. 1, s. 31(1)(a), and likewise in force under the later revision of the Act in R.S.C. 1970, c. A-1, s. 31(1)(a). The Admiralty Act was repealed upon the coming into force of the Federal Court Act by R.S.C. 1970 (2nd Supp.), c. 10, s. 64(1), and with the repeal the Admiralty Rules likewise ceased to have effect.
The former admiralty jurisdiction vested in the Exchequer Court under the now repealed Admi­ralty Act was vested in the Federal Court Act under s. 22 of its constituent Act, and in the promulgation by the Federal Court of its rules of practice and procedure a separate division, Divi­sion G, was devoted to special rules for admiralty proceedings. Nothing is said therein as to service ex juris; there is, however, a general referential Rule 1001 which provides that except as to incon­sistency with a rule in Division G, "the rules applicable to other proceedings are applicable to Admiralty proceedings". In short, it is Rule 307 which governs in the issue before this Court. There was a canvass of this situation recently by Collier J. of the Federal Court in Oy Nokia Ah v. The Ship "Martha Russ"[2], which was an in personam action only where there had been no arrest of the ship in the jurisdiction and, failing any other nexus in respect of the claim made for damages to cargo transhipped to Canada by another vessel, service ex juris on the owner of the ship was set aside.
To a large extent, Collier J. was concerned in the Martha Russ case with whether there was jurisdiction in the substantive sense, i.e. in respect of the subject matter of the action, although this spilled over, on the facts of the case, into a ques­tion of procedural jurisdiction over foreign defendants. He rightly pointed out the concern generally noted in relevant cases about drawing foreign defendants into the local forum by service out of the jurisdiction under local rules (with consequent strain on international comity) even where there is express authorization under the local rules to do so. This consideration was likewise stressed by the Federal Court of Appeal in sustaining the order of Collier J. setting aside the direction for service ex juris[3].
The Federal Court of Appeal in the Martha Russ case noted, and I agree, that Rule 307 allows the Court to exercise its discretion as to service ex juris at large; and, clearly, the question of forum conveniens is integral to the exercise of that discre­tion. Known specifications of situations in which service ex juris may be ordered, such as those under former Admiralty Rule 20, or those under Ontario Rule 25 or under English Order XI, will no doubt continue to offer guidelines, but Rule 307 reflects a deliberate decision in favour of flexibility without compartmentalization, thus leaving ques­tions of service ex juris to a disciplined discretion, with necessary regard to whether the local forum is a proper one in the light of all the circumstances attending the issues in dispute.
A guideline offered by old Admiralty Rule 20(d), and the similar Ontario Rule 25(1)(f) and the English Rule I (e) of Order XI, requires adap­tation and extension of its provisions to be the basis for an order for service ex juris here. The rule provides for such service where "any person out of the jurisdiction is a necessary or proper party to an action properly brought against some other person duly served within the [jurisdiction]". This presupposes that there is a party who has been properly served in the ordinary course within the jurisdiction, and not a foreign defendant who has, say by entering an appearance, submitted to the jurisdiction, or whose appearance has been compelled as it has been here: see Dicey and Morris, The Conflict of Laws (9th ed. 1973), at pp. 191-192. The matter is germane to the position of Delmar vis-à-vis Portland. The arrangements made by Portland for a bond in the in rem action necessarily involved it in an appearance, albeit not by a formal entry, and with a consequent submis­sion to the jurisdiction: see Dicey and Morris, The Conflict of Laws (9th ed. 1973), p. 201; 1 British Shipping Laws, Admiralty Practice (1964), para. 324, p. 141. This, however, under the construction put on Admiralty Rule 20(d), and its counterparts elsewhere, is not enough to justify an order to serve Delmar as a necessary or proper party. I see no reason, however, why the application of Rule 307 should be limited by such strict considerations as obtain under the old Admiralty Rule and its counterparts, if in fact there has been a voluntary submission to the jurisdiction by one foreign co-defendant and the other one is, indeed, a neces­sary or proper party in respect of the relief claimed in personam against both.
Neither Pratte J. nor the Federal Court of Appeal appears to have looked upon Portland as having submitted to the jurisdiction in respect of the action in personam. In view of the joinder of the claims for in personam relief with the claim in rem (the joinder not being attacked), it would appear to me to be a necessary consideration on the issue of service ex juris whether the Court in the exercise of its discretion would entertain the suit in rem. There is no dispute that, in the abstract, the Federal Court has statutory jurisdic­tion over the claims for relief, but this does not conclude either the question whether the jurisdic­tion should be exercised or the question whether leave for service ex juris should be granted. I point to two grounds upon which I think that this appeal should be dismissed. First, the appeal to this Court has been brought from an affirmation of an admit­tedly discretionary order, and it is rare for this Court to interfere on a discretionary matter of procedure, especially when there have been concurrent decisions below. I appreciate the conse­quences here for an adjudication on the merits if this Court should refuse to interfere but that does not justify a substitution of discretion especially when, in my view, the Courts below cannot be said to have erred in any matter of principle. Second, and dealing with the question at issue as one fully open to this Court, I think that considerations of comity and considerations of forum convenience are strongly against a direction of this Court for service ex juris upon Delmar or upon Portland.
We have here a foreign plaintiff as well as foreign defendants, and the only contact of any of the issues between those parties with Canada lies in the arrest of the ship in a Canadian port. It would be one thing if that arrest was made to enforce an asserted maritime lien but no such lien exists in the present case, and the plain fact is that the arrest was a coercive act to compel appearance (see The Heinrich Bjorn[4], at pp. 53-54) without any other incident relating either to parties or to issues that would connect it with the territorial jurisdiction of the Federal Court. When Pratte J. concluded that the Federal Court had jurisdiction over the ship he was asserting territorial jurisdic­tion only without (as his later decision on service ex juris showed) any determination that jurisdic­tion as to the claims for relief should be taken in respect of the parties named in the proceedings.
A court like the Federal Court, invested with statutory jurisdiction to entertain specified claims for relief, cannot reasonably extend Rule 307 so far as to allow a foreign plaintiff to pursue one or more of such claims against a foreign defendant by giving leave to serve him ex juris when none of the incidents allegedly giving rise to the claims arose in Canada or had any contact with Canada. In short, merely because the Federal Court is com­petent under its governing statute to entertain certain causes of action, it does not follow that this alone can be a proper basis for directing service ex juris under Rule 307. It would be an astonishing gloss to put upon that Rule and a rejection of all considerations of international comity.
If the claims for relief here are considered without taking into consideration the presence of the ship in Canada, I can see no possible ground upon which a court in this country could properly assert jurisdiction over the parties by way of giving leave for service ex juris. Does then the arrest of the ship in a Canadian port alter the situation when its ownership and possession are claimed under a contract of sale made out of Canada but whose enforcement is sought in a Canadian Court? Unless the arrest of the foreign ship is made to enforce a maritime lien, which is not this case, I see no ground upon which a foreign plaintiff can be given leave to serve a foreign defendant ex juris if there are no contacts with the local forum apart from the arrest.
Although, perforce, no statement of defence has been filed, I cannot shut my eyes to the fact that the ship is also claimed by Portland under another contract of sale, also made out of Canada. So far as this Court is aware, no proceedings for the relief sought here are pending elsewhere, but there are three places where such proceedings may more appropriately be brought than in Canada. The parties here are all Liberian companies and the ship is of Liberian registry; and the places where the two competing contracts were allegedly entered into (I need not decide here what those places are) are also likely forums, additionally because some at least of those persons who allegedly negotiated the contracts would be found there. This Court was not told that any necessary witnesses in the action were in Canada, and I can safely conclude that none are he