Siemens Canada Limited v. J.D. Irving Limited

Siemens Canada Limited v. J.D. Irving Limited
Court (s) Database
Federal Court of Appeal Decisions
Date
2012-08-30
Neutral citation
2012 FCA 225
File numbers
A-258-11, A-259-11
Notes
Reported Decision
Decision Content
Date: 20120830
Docket: A-258-11
A-259-11
Citation: 2012 FCA 225
CORAM: NADON J.A.
DAWSON J.A.
MAINVILLE J.A.
Docket : A-258-11
BETWEEN:
SIEMENS CANADA LIMITED
Appellant
and
J.D. IRVING, LIMITED,
MARITIME MARINE CONSULTANTS (2003) INC.,
SUPERPORT MARINE SERVICES LTD., and
NEW BRUNSWICK POWER NUCLEAR CORPORATION
Respondents
Docket: A-259-11
BETWEEN:
SIEMENS CANADA LIMITED
Appellant
and
MARITIME MARINE CONSULTANTS (2003) INC.,
J.D. IRVING, LIMITED, SUPERPORT MARINE SERVICES LTD.,
NEW BRUNSWICK POWER NUCLEAR CORPORATION,
BMT MARINE AND OFFSHORE SURVEYS LTD.
Respondents
Heard at Toronto, Ontario, on May 9, 2012.
Judgment delivered at Ottawa, Ontario, on August 30, 2012.
REASONS FOR JUDGMENT BY: NADON J.A.
CONCURRED IN BY: DAWSON J.A.
MAINVILLE J.A.
Date: 20120830
Docket: A-258-11
A-259-11
Citation: 2012 FCA 225
CORAM: NADON J.A.
DAWSON J.A.
MAINVILLE J.A.
Docket : A-258-11
BETWEEN:
SIEMENS CANADA LIMITED
Appellant
and
J.D. IRVING, LIMITED,
MARITIME MARINE CONSULTANTS (2003) INC.,
SUPERPORT MARINE SERVICES LTD., and
NEW BRUNSWICK POWER NUCLEAR CORPORATION
Respondents
Docket: A-259-11
BETWEEN:
SIEMENS CANADA LIMITED
Appellant
and
MARITIME MARINE CONSULTANTS (2003) INC.,
J.D. IRVING, LIMITED, SUPERPORT MARINE SERVICES LTD.,
NEW BRUNSWICK POWER NUCLEAR CORPORATION,
BMT MARINE AND OFFSHORE SURVEYS LTD.
Respondents
REASONS FOR JUDGMENT
NADON J.A.
[1] Before us are two appeals which arise from events that occurred on October 15, 2008, at the port of Saint John, New Brunswick, where, in the course of loading upon a barge, two valuable steam turbine rotors fell into the waters of Saint John harbour.
[2] As a result, the appellant, Siemens Canada Limited (“Siemens”), commenced proceedings in the Ontario Superior Court of Justice against, inter alia, the respondents J.D. Irving, Ltd. (“Irving”), and Maritime Marine Consultants (2003) Inc. (“MMC”) for recovery of its loss. That action was commenced on April 8, 2010.
[3] On April 7, and on April 30, 2010, Irving and MMC respectively filed statements of claim in the Federal Court seeking, inter alia, a declaration that they were entitled to limit their liability in regard to the October 15, 2008 incident (“the incident”), to a sum of $500,000, plus interest, to the date of the constitution of a limitation fund pursuant to paragraph 29(b), section 29.1, and subsection 32(2) of the Marine Liability Act, S.C. 2001, c. 6 (the “MLA”), and an order constituting a limitation fund pursuant to paragraph 33(1)(a) of the MLA. Irving and MMC’s proceedings were both commenced pursuant to subsection 32(2) of the MLA.
[4] In the Federal Court proceedings, Siemens brought motions for an interlocutory stay of the actions to the extent that they pertained to the constitution and distribution of a limitation fund pursuant to section 33 of the MLA, and for a permanent stay of the actions insofar as Irving and MCC claimed an entitlement to limit their liability pursuant to sections 28 and 29 of the MLA. In response to Siemens’ motions, Irving and MMC filed motions in which they sought, inter alia, directions from the Federal Court as to the manner in which their limitation actions were to be heard and determined, as well as an order enjoining Siemens and others from commencing or continuing proceedings against them before any court other than the Federal Court in respect of the incident.
[5] On June 29, 2011, in an order cited as 2011 FC 791, Heneghan J. (the “judge”) dismissed Siemens’ motions for an interlocutory and a permanent stay of the Federal Court proceedings and she enjoined Siemens and others from commencing or continuing proceedings against Irving and MMC before any court or tribunal other than the Federal Court.
[6] Siemens now appeals both the order dismissing its motions to stay the Federal Court proceedings and the order enjoining it from commencing or continuing proceedings against Irving and MMC in any court other than the Federal Court.
The Facts
[7] In September 2006, Siemens contracted to provide three “low pressure modules” (the “modules”) to Atomic Energy of Canada Ltd. (“AECL”). The modules are extremely complex and expensive pieces of equipment essential for operating nuclear generating stations. Each module comprised an outer casing and an internal turbine rotor weighing 115 tonnes and costing $12,500,000 to manufacture (the “rotors”). AECL subsequently assigned this contract to the respondent, New Brunswick Power Nuclear Corporation (“NBPNC”).
[8] In January 2007, Irving contracted with Siemens to transport the rotors by water from Saint John harbour to Point Lepreau, New Brunswick (the “move”). Due to the size and value of the rotors, the move necessitated special arrangements. In October 2008, Irving chartered a barge of approximately 258 tonnes – the SPM 125 – from the respondent Superport Marine Services Ltd. (“Superport”), a Nova Scotia company. Irving retained MMC to act as marine architect, to approve the barge’s stability for the move, and to prepare a plan for the safe loading and securing of the rotors on the barge. MMC’s work involved conducting a number of stability calculations. BMT Marine and Offshore Surveys Ltd. (“BMT”), a Quebec-based company, was retained by Siemens to ensure that the barge could properly accommodate the dynamics of the load, to approve the use of the barge, and to witness and supervise the handling of the rotors.
[9] On October 15, 2008, during the course of loading, two rotors fell off the barge into the waters of Saint John harbour. As a result, the rotors were significantly damaged and Siemens had to take a number of steps to mitigate NBPNC’s loss.
[10] Transport Canada investigated the incident under the Canada Shipping Act, S.C. 2001, c. 26 (the “Shipping Act”). While no charges were laid, it concluded that the incident arose from a failure to conduct a number of important calculations.
[11] As I indicated earlier, Irving and MMC commenced limitation actions in the Federal Court, pursuant to the MLA and Rule 496(1) of the Federal Court Rules, SOR/98-106. They sought, without admitting liability, a declaration that their liability for the incident was limited to $500,000 plus interest and an order constituting a limitation fund. In these proceedings, Irving and MMC named Siemens, inter alia, as a defendant.
[12] In its action commenced in the Ontario Superior Court, Siemens claimed a sum of $40,000,000 in damages against, inter alia, Irving and MMC, for negligence and breach of contract. The thrust of Siemens’ action is that MMC failed to make the calculations necessary to ensure the safety of the move from Saint John to Point Lepreau. By reason of this failure, Siemens says that both Irving and MMC are precluded from limiting their liability pursuant to the MLA.
The Relevant Legislative Provisions
[13] The following provisions of the Federal Courts Act, R.S.C. 1985, c. F-7, the Federal Courts Rules, and the MLA are relevant to these appeals:
Federal Courts Act
22. (1) The Federal Court has concurrent original jurisdiction, between subject and subject as well 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) Without limiting the generality of subsection (1), for greater certainty, the Federal Court has jurisdiction with respect to all of the following:
…
(e) any claim for damage sustained by, or for loss of, a ship including, without restricting the generality of the foregoing, damage to or loss of the cargo or equipment of, or any property in or on or being loaded on or off, a ship;
(f) any claim arising out of an agreement relating to the carriage of goods on a ship under a through bill of lading, or in respect of which a through bill of lading is intended to be issued, for loss or damage to goods occurring at any time or place during transit;
…
(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;
(j) any claim for salvage including, without restricting the generality of the foregoing, claims for salvage of life, cargo, equipment or other property of, from or by an aircraft to the same extent and in the same manner as if the aircraft were a ship;
…
50. (1) The Federal Court of Appeal or the Federal Court may, in its discretion, stay proceedings in any cause or matter
(a) on the ground that the claim is being proceeded with in another court or jurisdiction; or
(b) where for any other reason it is in the interest of justice that the proceedings be stayed.
Federal Courts Rules
496. (1) A party bringing an application under subsection 33(1) of the Marine Liability Act shall bring it as an action against those claimants whose identity is known to the party.
(2) A party referred to in subsection (1) may bring an ex parte motion for directions respecting service on possible claimants where the number of possible claimants is large or the identity of all possible claimants is unknown to the party.
Marine Liability Act
2. The definitions in this section apply in this Act.
“Admiralty Court” means the Federal Court.
…
24. The definitions in this section apply in this Part.
“Convention” means the Convention on Limitation of Liability for Maritime Claims, 1976, concluded at London on November 19, 1976, as amended by the Protocol, Articles 1 to 15 of which Convention are set out in Part 1 of Schedule 1 and Article 18 of which is set out in Part 2 of that Schedule.
“maritime claim” means a claim described in Article 2 of the Convention for which a person referred to in Article 1 of the Convention is entitled to limitation of liability.
25. (1) For the purposes of this Part and Articles 1 to 15 of the Convention,
(a) “ship” means any vessel or craft designed, used or capable of being used solely or partly for navigation, without regard to method or lack of propulsion, and includes
(i) a ship in the process of construction from the time that it is capable of floating, and
[…]
(b) the definition “shipowner” in paragraph 2 of Article 1 of the Convention shall be read without reference to the word “seagoing” and as including any person who has an interest in or possession of a ship from and including its launching; and
(c) the expression “carriage by sea” in paragraph 1(b) of Article 2 of the Convention shall be read as “carriage by water”.
(2) In the event of any inconsistency between sections 28 to 34 of this Act and Articles 1 to 15 of the Convention, those sections prevail to the extent of the inconsistency.
26. (1) Subject to the other provisions of this Part, Articles 1 to 15 and 18 of the Convention and Articles 8 and 9 of the Protocol have the force of law in Canada.
(2) The Governor in Council may, by regulation, amend Part 3 of Schedule 1 to add or delete a reservation made by Canada under Article 18 of the Convention.
(3) This Part does not apply to a claim that is the subject of a reservation made by Canada.
29. The maximum liability for maritime claims that arise on any distinct occasion involving a ship of less than 300 gross tonnage, other than claims referred to in section 28, is
(a) $1,000,000 in respect of claims for loss of life or personal injury; and
(b) $500,000 in respect of any other claims.
32. (1) The Admiralty Court has exclusive jurisdiction with respect to any matter relating to the constitution and distribution of a limitation fund under Articles 11 to 13 of the Convention.
(2) Where a claim is made or apprehended against a person in respect of liability that is limited by section 28, 29 or 30 of this Act or paragraph 1 of Article 6 or 7 of the Convention, that person may assert the right to limitation of liability in a defence filed, or by way of action or counterclaim for declaratory relief, in any court of competent jurisdiction in Canada.
33. (1) Where a claim is made or apprehended against a person in respect of liability that is limited by section 28 or 29 of this Act or paragraph 1 of Article 6 or 7 of the Convention, the Admiralty Court, on application by that person or any other interested person, including a person who is a party to proceedings in relation to the same subject-matter before another court, tribunal or authority, may take any steps it considers appropriate, including
(a) determining the amount of the liability and providing for the constitution and distribution of a fund under Articles 11 and 12 of the Convention;
(b) joining interested persons as parties to the proceedings, excluding any claimants who do not make a claim within a certain time, requiring security from the person claiming limitation of liability or from any other interested person and requiring the payment of any costs; and
(c) enjoining any person from commencing or continuing proceedings in any court, tribunal or authority other than the Admiralty Court in relation to the same subject-matter.
Loi sur les Cours fédérales
22. (1) La Cour fédérale a compétence concurrente, en première instance, dans les cas — opposant notamment des administrés — où une demande de réparation ou un recours est présenté en vertu du droit maritime canadien ou d’une loi fédérale concernant la navigation ou la marine marchande, sauf attribution expresse contraire de cette compétence.
(2) Il demeure entendu que, sans préjudice de la portée générale du paragraphe (1), elle a compétence dans les cas suivants :
…
e) une demande d’indemnisation pour l’avarie ou la perte d’un navire, notamment de sa cargaison ou de son équipement ou de tout bien à son bord ou en cours de transbordement;
f) une demande d’indemnisation, fondée sur une convention relative au transport par navire de marchandises couvertes par un connaissement direct ou devant en faire l’objet, pour la perte ou l’avarie de marchandises en cours de route;
…
h) une demande d’indemnisation pour la perte ou l’avarie de marchandises transportées à bord d’un navire, notamment dans le cas des bagages ou effets personnels des passagers;
i) une demande fondée sur une convention relative au transport de marchandises à bord d’un navire, à l’usage ou au louage d’un navire, notamment par charte-partie;
j) une demande d’indemnisation pour sauvetage, notamment pour le sauvetage des personnes, de la cargaison, de l’équipement ou des autres biens d’un aéronef, ou au moyen d’un aéronef, assimilé en l’occurrence à un navire;
…
50. (1) La Cour d’appel fédérale et la Cour fédérale ont le pouvoir discrétionnaire de suspendre les procédures dans toute affaire :
a) au motif que la demande est en instance devant un autre tribunal;
b) lorsque, pour quelque autre raison, l’intérêt de la justice l’exige.
Règles des Cours fédérales
496. (1) Toute requête présentée par une partie en vertu du paragraphe 33(1) de la Loi sur la responsabilité en matière maritime est introduite par voie d’action contre les réclamants dont elle connaît l’identité.
(2) La partie visée au paragraphe (1) peut présenter à la Cour une requête ex parte pour obtenir des directives sur la signification aux réclamants éventuels lorsque leur nombre est élevé ou qu’elle ne connaît pas l’identité de chacun d’eux.
Loi sur la responsabilité en droit maritime
2. Les définitions qui suivent s’appliquent à la présente loi.
« Cour d’amirauté » La Cour fédérale.
…
24. Les définitions qui suivent s’appliquent à la présente partie.
« Convention » La Convention de 1976 sur la limitation de la responsabilité en matière de créances maritimes conclue à Londres le 19 novembre 1976 — dans sa version modifiée par le Protocole — dont les articles 1 à 15 figurent à la partie 1 de l’annexe 1 et l’article 18 figure à la partie 2 de cette annexe.
« créance maritime » Créance maritime visée à l’article 2 de la Convention contre toute personne visée à l’article 1 de la Convention.
25. (1) Pour l’application de la présente partie et des articles 1 à 15 de la Convention :
a) « navire » s’entend d’un bâtiment ou d’une embarcation conçus, utilisés ou utilisables, exclusivement ou non, pour la navigation, indépendamment de leur mode de propulsion ou de l’absence de propulsion,
…
b) la définition de « propriétaire de navire », au paragraphe 2 de l’article premier de la Convention, vise notamment la personne ayant un intérêt dans un navire ou la possession d’un navire, à compter de son lancement, et s’interprète sans égard au terme « de mer »;
c) la mention de « transport par mer », à l’alinéa 1b) de l’article 2 de la Convention, vaut mention de « transport par eau ».
(2) Les articles 28 à 34 de la présente loi l’emportent sur les dispositions incompatibles des articles 1 à 15 de la Convention.
26. (1) Sous réserve des autres dispositions de la présente partie, les articles 1 à 15 et 18 de la Convention et les articles 8 et 9 du Protocole ont force de loi au Canada.
(2) Le gouverneur en conseil peut, par règlement, modifier la partie 3 de l’annexe 1 pour y ajouter ou en supprimer toute réserve faite par le Canada au titre de l’article 18 de la Convention.
(3) La présente partie ne s’applique pas à la créance qui fait l’objet d’une réserve faite par le Canada.
29. La limite de responsabilité pour les créances maritimes — autres que celles mentionnées à l’article 28 — nées d’un même événement impliquant un navire d’une jauge brute inférieure à 300 est fixée à :
a) 1 000 000 $ pour les créances pour décès ou blessures corporelles;
b) 500 000 $ pour les autres créances.
32. (1) La Cour d’amirauté a compétence exclusive pour trancher toute question relative à la constitution et à la répartition du fonds de limitation aux termes des articles 11 à 13 de la Convention.
(2) Lorsque la responsabilité d’une personne est limitée aux termes des articles 28, 29 ou 30 de la présente loi ou du paragraphe 1 des articles 6 ou 7 de la Convention, relativement à une créance — réelle ou appréhendée — , cette personne peut se prévaloir de ces dispositions en défense, ou dans le cadre d’une action ou demande reconventionnelle pour obtenir un jugement déclaratoire, devant tout tribunal compétent au Canada.
33. (1) Lorsque la responsabilité d’une personne est limitée aux termes des articles 28 ou 29 de la présente loi ou du paragraphe 1 des articles 6 ou 7 de la Convention, relativement à une créance — réelle ou appréhendée — , la Cour d’amirauté peut, à la demande de cette personne ou de tout autre intéressé — y compris une partie à une procédure relative à la même affaire devant tout autre tribunal ou autorité — , prendre toute mesure qu’elle juge indiquée, notamment :
a) déterminer le montant de la responsabilité et faire le nécessaire pour la constitution et la répartition du fonds de limitation correspondant, conformément aux articles 11 et 12 de la Convention;
b) joindre tout intéressé comme partie à la procédure, exclure tout créancier forclos, exiger une garantie des parties invoquant la limitation de responsabilité ou de tout autre intéressé et exiger le paiement des frais;
c) empêcher toute personne d’intenter ou de continuer quelque procédure relative à la même affaire devant tout autre tribunal ou autorité.
Also of relevance to these proceedings are a number of provisions of the Convention on Limitation of Liability for Marine Claims, 1976 (the “Convention”):
Article 1
1. Shipowners and salvors, as hereinafter defined, may limit their liability in accordance with the rules of this Convention for claims set out in Article 2.
2. The term "shipowner" shall mean the owner, charterer, manager and operator of a seagoing ship.
[…]
4. If any claims set out in Article 2 are made against any person for whose act, neglect or default the shipowner or salvor is responsible, such person shall be entitled to avail himself of the limitation of liability provided for in this Convention.
Article 2
1. Subject to Articles 3 and 4 the following claims, whatever the basis of liability may be, shall be subject to limitation of liability:
(a) claims in respect of loss of life or personal injury or loss of or damage to property (including damage to harbour works, basins and waterways and aids to navigation), occurring on board or in direct connexion with the operation of the ship or with salvage operations, and consequential loss resulting therefrom;
(b) claims in respect of loss resulting from delay in the carriage by sea of cargo, passengers or their luggage;
(c) claims in respect of other loss resulting from infringement of rights other than contractual rights, occurring in direct connexion with the operation of the ship or salvage operations;
(d) claims in respect of the raising, removal, destruction or the rendering harmless of a ship which is sunk, wrecked, stranded or abandoned, including anything that is or has been on board such ship;
(e) claims in respect of the removal, destruction or the rendering harmless of the cargo of the ship;
(f) claims of a person other than the person liable in respect of measures taken in order to avert or minimize loss for which the person liable may limit his liability in accordance with this Convention, and further loss caused by such measures.
Article 4
A person liable shall not be entitled to limit his liability if it is proved that the loss resulted from his personal act or omission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result.
Article 11
1. Any person alleged to be liable may constitute a fund with the Court or other competent authority in any State Party in which legal proceedings are instituted in respect of claims subject to limitation. The fund shall be constituted in the sum of such of the amounts set out in Articles 6 and 7 as are applicable to claims for which that person may be liable, together with interest thereon from the date of the occurrence giving rise to the liability until the date of the constitution of the fund. Any fund thus constituted shall be available only for the payment of claims in respect of which limitation of liability can be invoked.
Article 1
1. Les propriétaires de navires et les assistants, tels que définis ci-après, peuvent limiter leur responsabilité conformément aux règles de la présente Convention à l’égard des créances visées à l’article 2.
2. L’expression « propriétaire de navire », désigne le propriétaire, l’affréteur, l’armateur et l’armateur-gérant d’un navire de mer.
…
4. Si l’une quelconque des créances prévues à l’article 2 est formée contre toute personne dont les faits, négligences et fautes entraînent la responsabilité du propriétaire ou de l’assistant, cette personne est en droit de se prévaloir de la limitation de la responsabilité prévue dans la présente Convention.
Article 2
1. Sous réserves des articles 3 et 4, les créances suivantes, quel que soit le fondement de la responsabilité, sont soumises à la limitation de la responsabilité :
a) créances pour mort, pour lésions corporelles, pour pertes et pour dommages à tous biens (y compris les dommages causés aux ouvrages d’art des ports, bassins, voies navigables et aides à la navigation) survenus à bord du navire ou en relation directe avec l’exploitation de celui-ci ou avec des opérations d’assistance ou de sauvetage, ainsi que pour tout autre préjudice en résultant;
b) créances pour tout préjudice résultant d’un retard dans le transport par mer de la cargaison, des passagers ou de leurs bagages;
c) créances pour d’autres préjudices résultant de l’atteinte à tous droits de source extracontractuelle, et survenus en relation directe avec l’exploitation du navire ou avec des opérations d’assistance ou de sauvetage;
d) créances pour avoir renfloué, enlevé, détruit ou rendu inoffensif un navire coulé, naufragé, échoué ou abandonné, y compris tout ce qui se trouve ou s’est trouvé à bord;
e) créances pour avoir enlevé, détruit ou rendu inoffensive la cargaison du navire;
f) créances produites par une personne autre que la personne responsable, pour les mesures prises afin de prévenir ou de réduire un dommage pour lequel la personne responsable peut limiter sa responsabilité conformément à la présente Convention, et pour les dommages ultérieurement causés par ces mesures.
Article 4
Une personne responsable n’est pas en droit de limiter sa responsabilité s’il est prouvé que le dommage résulte de son fait ou de son omission personnels, commis avec l’intention de provoquer un tel dommage, ou commis témérairement et avec conscience qu’un tel dommage en résulterait probablement.
Article 11
1. Toute personne dont la responsabilité peut être mise en cause peut constituer un fonds auprès du tribunal ou de toute autre autorité compétente de tout État Partie dans lequel une action est engagée pour des créances soumises à limitation. Le fonds est constitué à concurrence du montant tel qu’il est calculé selon les dispositions des articles 6 et 7 applicables aux créances dont cette personne peut être responsable, augmenté des intérêts courus depuis la date de l’événement donnant naissance à la responsabilité jusqu’à celle de la constitution du fonds. Tout fonds ainsi constitué n’est disponible que pour régler les créances à l’égard desquelles la limitation de la responsabilité peut être invoquée.
The Federal Court Decision
[14] The judge began by reviewing the procedural history of the matter before her and the evidence adduced by the parties. She then turned to Siemens’ argument that the Federal Court was without jurisdiction to hear its claim for damages, i.e. because the claim did not fall within the Court’s maritime jurisdiction. More particularly, Siemens argued that its claim was one for breach of contract by Irving, pursuant to a purchase order dated January 11, 2007, for the transportation of the rotors from Saint John to Point Lepreau. In Siemens’ submission, that contract was not a contract for the carriage of goods by sea.
[15] The judge rejected Siemens’ argument. While agreeing with Siemens that mere proximity to water was insufficient to ground maritime jurisdiction in the Federal Court (Judge’s reasons, paragraph 48), the judge concluded that “… it is clear that the nature of Siemens’ claim is essentially maritime law” (Judge’s reasons, paragraph 53).
[16] In so concluding, the judge relied on a number of factors, namely: (a) that the incident occurred on water, (b) that the rotors were on board a ship; (c) marine surveyors were involved in the transportation preparations; (d) that the incident was investigated by Transport Canada in accordance with the Transport Canada Marine Safety Policy for investigating maritime occurrences under the authority of section 219 of the Shipping Act; and (e) that Siemens’ allegation of misrepresentations pertained to the preparation for the loading of the rotors on the barge, thus raising an issue of seaworthiness, which issue was subject to applicable admiralty laws, principles and practices.
[17] Also of relevance, in the judge’s opinion, was the fact that the alleged breach of contract and negligence pertained to an agreement for the carriage of goods by sea, i.e. carriage of the rotors from Saint John to Point Lepreau, and that MMC had been engaged by Irving to provide marine architectural services in regard to the loading and the carriage of the rotors.
[18] In coming to this conclusion, the judge relied on the Supreme Court of Canada’s decisions in ITO-Int’l Terminals Operators v. Miida Electronics, [1986] 1 S.C.R. 752 (“ITO”), Q.N.S. Paper Co. v. Chartwell Shipping Ltd., [1989] 2 S.C.R. 683 (“Q.N.S.”), and Isen v. Simms, [2006] 2 S.C.R. 349 (“Isen”). She also relied on this Court’s decision in Radil Bros. Fishing Co. v. Canada (Department of Fisheries and Oceans, Pacific Region), [2002] 2 F.C. 219 (“Radil”). The judge also relied on subsection 22(1) and paragraphs 22(2)(e), (h) and (i) of the Federal Courts Act. In addition, she also found relevant the Shipping Act and the MLA which, by way of subsection 26(1) thereof, incorporated a number of provisions of the Convention. At paragraph 64 of her reasons, the judge made the following remarks:
[64] Regardless of the merit of Siemens’ submissions regarding the entitlement of Irving, MMC and BMT to limit their liability, it is clear that the ultimate findings on these issues will be made with reference to the provisions of the MLA and the Convention. Put another way, Canadian maritime law will apply to the issues Siemens raises regarding the limitation of liability of Irving, MMC, and BMT.
[19] Then, beginning at paragraph 67 of her reasons, the judge turned to Siemens’ stay motions. She held that the two-part test of Mon-Oil Ltd. v. Canada, [1989] F.C.J. No. 227 (Q.L.), 26 C.P.R. (3d) 379 (F.C.T.D.) (“Mon-Oil”), was the appropriate legal test for determining whether to grant a stay. At paragraph 77 of her reasons, she wrote:
77. … The two part test of Mon-Oil Ltd. v. Canada (1989), 26 C.P.R. (3d) 379 (F.C.T.D.), should be considered in respect of Siemens’ motion for a stay. That test requires the Court to consider two questions, that is will the continuation of the action cause prejudice to the defendant, in this case Siemens, and will the stay cause an injustice to the plaintiffs, that is Irving and MMC.
[20] The application of the Mon-Oil test led the judge to dismiss both Siemens’ motion for an interlocutory stay and its motion for a permanent stay. With regard to the interlocutory stay, she held that Siemens had not demonstrated that the limitation actions commenced by Irving and MMC would cause it prejudice. As a result, exercising her discretion, she declined to grant an interlocutory stay of the limitation actions. With regard to the motion for a permanent stay of the limitation actions, the judge held that Siemens’ argument that because Irving’s conduct had been reckless and was thus not entitled to limit its liability, was premature. In her view, it was not possible, on the basis of the evidence, to conclude that Irving or MMC were not entitled to limit their liability in regard to Siemens’ loss. At paragraphs 83 and 84 of her reasons, the judge made the following remarks:
[83] I am not persuaded that Siemens has presented evidence to show that it would be prejudiced by the continuation of the limitation proceedings. It has proceeded on the premise that the Defendants will not be able to limit liability, due to their conduct, relying on the application of Article 4 of the Convention. However, this is only an argument. The application of Article 4 will require evidence; see Société Telus Communications v. Peracomo Inc., 2011 FC 494.
[84] Regardless of the ultimate characterization of the Defendants’ conduct, Siemens’ current arguments do not demonstrate prejudice and in any event, legal arguments are no substitution for evidence.
[21] Finally, the judge turned to the motions to enjoin filed by Irving and MMC, noting that these motions had been brought pursuant to section 33 of the MLA. She began, at paragraph 122 of her reasons, by stating that the first order of business was to determine the test applicable to the exercise of the power to enjoin. She referred to Prothonotary Hargrave’s decision in Canadian Pacific Railway Co. v. Sheena M (The), [2000] 4 F.C. 159 (F.C.T.D.) (“The Sheena M”), where the learned prothonotary suggested that the tripartite test in RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311 (“RJR-MacDonald”), was the test applicable to a motion to enjoin proceedings before another court or tribunal, noting however that in the case before him, the prothonotary had not decided the point.
[22] The judge then turned to subsection 33(1) of the MLA, which provides that the Federal Court may, on application by a person who may be entitled to limit his or her liability pursuant to sections 28 or 29 of the MLA, take any step that it considers appropriate, including, inter alia, “enjoining any person for commencing or continuing proceedings in any court, tribunal or authority other than the Admiralty Court, in relation to the same matter”. At paragraph 124 of her reasons, the judge opined as follows:
[124] The language of section 33 of the Act is very broad. Subsection 33(1) says that the “Admiralty Court… may take any steps it considers appropriate”, including the extraordinary remedy identified in paragraph 33(1)(c) of enjoining proceedings before any other court, tribunal or authority. The availability of this remedy indicates the value attached to the importance of adjudicating all issues relevant to the constitution and distribution of a limitation fund, in one forum. Proceeding in one Court contributes to the expeditious disposition of issues relating to limitation of liability.
[23] The judge then stated, at paragraph 125 of her reasons, that “[t]he concept of ‘appropriate’ includes the element of suitability”. Turning to the facts before her, she opined that both the action commenced by Siemens in the Ontario Superior Court and the limitation actions commenced by Irving and MMC in the Federal Court were proceedings in relation to the same “subject matter”, i.e. “damage to the rotors, liability for that damage and any limitation of that liability” (Judge’s reasons, paragraph 128).
[24] The judge was also of the view that proceeding with the limitation actions in the Federal Court and enjoining Siemens from pursuing its proceedings in the Ontario Superior Court would save significant costs to the parties. She reasoned as follows at paragraph 137 of her reasons:
[137] The fact that Siemens’ claim is in the millions is not a principled reason to postpone adjudication of the issues in the limitation proceedings, foremost whether limitation of liability is available. Indeed, in my opinion the discrepancy between the amount claimed and the prima facie amount of the limitation fund is a factor weighing heavily in favour of proceeding with the limitation actions and enjoining the liability action. This is a practical consideration which the Court acknowledges. There will be significant costs saved for all parties and persons by proceeding in this manner.
[25] Also of relevance, in the judge’s opinion, was the fact that the class of potential plaintiffs or claimants against the limitation fund remained unknown and that it was open for Siemens to begin another action in the Federal Court or to file a counterclaim in the limitation actions in which it was a defendant. At paragraph 156 of her reasons, the judge summarized her view of the matter in the following terms:
[156] Contrary to Siemens’ submissions, the Federal Court is the most efficient forum to determine all the issues relative to the incident. It is beyond doubt that the Federal Court has jurisdiction over the issue of liability. Only the Federal Court has jurisdiction over the constitution and distribution of a limitation fund. While such a fund may be incidental to the determinations of liability and limitation, having the entirety of the proceedings considered in one Court would be the most efficient. The issue of entitlement to limit can be determined in the limitation actions.
[26] As a result, the judge allowed the motions to enjoin and ordered that no proceedings be continued or commenced before any court or tribunal other than the Federal Court, in respect of the incident.
[27] I should also say that in addition to disposing of the motions to stay and the motions to enjoin, the judge ordered the establishment of a limitation fund pursuant to Articles 9 and 11 of the Convention. In making this order, the judge reasoned as follows. First, the Federal Court was the Admiralty Court, as defined at section 2 of the MLA. Second, by reason of section 32 of the MLA, the Federal Court had exclusive jurisdiction with regard to the constitution and distribution of a limitation fund. Lastly, the barge was a ship of less than 300 tonnes in regard to which the maximum liability for all claims, pursuant to section 29(b) of the MLA, was $500,000.
The Issues
[28] In order to determine the appeals before us, the following issues must be addressed:
a. What is the appropriate standard of review?
b. Whether the Federal Court has jurisdiction over Siemens’ action for damages.
c. Whether the judge erred in enjoining Siemens and others from pursuing their claims against Irving and MMC in a tribunal other than the Federal Court.
d. Whether the judge erred in dismissing Siemens’ motions for a stay of the limitation actions commenced in the Federal Court.
Analysis
1. What is the appropriate standard of review?
[29] The judge’s Order enjoining Siemens and others from commencing or continuing proceedings in any court other than the Federal Court and her Order dismissing Siemens’ motions for a stay of the Federal Court proceedings, are mostly discretionary orders, to which deference is usually accorded on appeal. However, this Court is entitled to substitute its own discretion if the judge is found to have given insufficient weight to relevant factors, proceeded on a wrong legal principle, misapprehended the facts or an obvious injustice would otherwise arise from the discretionary order (see: Elders Grain Co. v. Ralph Misener (The), 2005 FCA 139, [2005] 3 F.C.R. 367, at paragraph 13; Éditions Ecosociété v. Banro Corp., 2012 SCC 18, at paragraph 41). The criteria for exercising legal discretion are legal criteria and, hence, their definition or misapplication raise questions of law that are subject to appellate review (see: British Columbia (Min. of Forests) v. Okanagan Indian Band, 2003 SCC 71, [2003] 3 S.C.R. 371, at paragraph 43).
2. Whether the Federal Court has jurisdiction over Siemens’ action for damages
[30] As I indicated earlier, the judge had no difficulty concluding that the proceedings to which the incident gave rise fell within the maritime jurisdiction of the Federal Court. In my view, Siemens’ action against Irving and MMC is within the Federal Court’s maritime jurisdiction and, as a result, the judge made no error in so concluding.
[31] Siemens argues, at paragraphs 85 to 91 of its Memorandum of Fact and Law, that “some or all of the matters raised in the Ontario action are not maritime in nature, and thus outside the jurisdiction of the Federal Court” (Siemens’ Memorandum, paragraph 85). It further argues, at paragraph 89, that its claim is directed at Irving’s failure to direct a complete transportation plan, adding that the fact that Irving’s breach of the transportation plan “happened to materialize when the rotors were being loaded onto a barge does not change the nature” of its claim. Siemens also argues that since neither MMC nor BMT are shipowners under the MLA, its claim against them does not fall under the enumerated heads of jurisdiction under subsection 22(2) of the Federal Courts Act, nor under the general grant of jurisdiction under subsection 22(1).
[32] Both Irving and MMC take the position that there is maritime jurisdiction in the Federal Court over Siemens’ claim for damages.
[33] My reasons for concluding that the judge made no error on this point are as follows.
[34] Beginning at paragraph 38 of her reasons, the judge comprehensively reviewed the Federal Court’s maritime jurisdiction. The general grant of maritime jurisdiction to the Federal Court is found in section 22 of the Federal Courts Act. It is very broad and includes any claim under or by virtue of Canadian maritime law or any other law of Canada relating to navigation or shipping. For greater ce