Nickimen Co. Inc. and B.F. Goodrich Canada
Ltd. (Applicants)
v.
The ship Executive Venture and the owners of
the ship Executive Venture (Respondents)
Trial Division, Walsh J.—Montreal, October 26;
Ottawa, October 30, 1973.
Practice and procedure—Maritime law—Ship in Montreal
Harbour subject to general average proceedings in New
York—No action pending—Right of cargo owner to examine
ship to ascertain cause of breakdown at sea—No Federal
Court Rule—Resort to provincial practice—Federal Court
Rule 5, Quebec Code of Civil Procedure, s. 438.
A ship on a voyage from Cape Town to Canada suffered
engine breakdowns at sea and was towed to Montreal for
repairs. General average was declared and a general adjuster
appointed in New York in accordance with the bill of lading.
Applicants whose head offices are in Montreal and Kitchen-
er respectively and who were owners of cargo going to
Toronto and Hamilton were obliged to issue guarantees for
payment and then applied for an order to inspect the ship's
engines in contemplation of a defence to an expected claim
for general average contribution on the ground that the
engine breakdowns resulted from the ship's unseaworthi-
ness.
Held, in the absence of a Federal Court Rule permitting an
order for inspection of evidence pending legal proceedings,
Federal Court Rule 5 permitted resort to the appropriate
provincial procedure, in this case section 438 of the Quebec
Code of Civil Procedure which permitted such inspection.
MOTION.
COUNSEL:
Peter R. D. MacKell, Q.C., and Bruce
Cleven for applicants.
Trevor H. Bishop for respondents.
SOLICITORS:
Martineau, Walker, Allison, Beaulieu,
Phelan and MacKell, Montreal, for applicants.
Brisset, Reycraft, Bishop and Davidson,
Montreal, for respondents.
WALSH J.—Applicants move for an order for
the inspection of the engine of the Executive
Venture and as justification for their motion
allege that applicant Nickimen Co. Inc., a body
corporate having its head office and principal
place of business in Montreal, and applicant
B.F. Goodrich Canada Ltd., a body corporate
having its head office and principal place of
business in Kitchener, Ontario, are respectively
owners of certain cargo carried on board the
vessel Executive Venture from outside Canada
to Toronto and Hamilton respectively, said
cargo having a value of approximately $127,-
000. The vessel had engine problems and was
towed to Cape Town, South Africa where
repairs were made but subsequently the engine
broke down again and she was again towed back
to Cape Town for further repairs. A third engine
breakdown occurred outside the Port of Dacar
where further repairs were undertaken. Finally
the vessel continued her voyage bound for the
St. Lawrence Seaway and again suffered an
engine breakdown and was towed to Montreal
where she is presently undergoing repairs by
Canadian Vickers Limited. The Master of the
said vessel, Executive Venture, declared general
average and a general average adjuster has been
appointed and a settlement will be made in New
York in accordance with clause 24 of the Bill of
Lading. Applicants were obliged to and did
issue guarantees for the payment through Wil-
liam H. McGee and Company of New York
according to a statement made by applicants'
counsel. Applicants however intend to contest
the claim for general average contribution on
the basis that the engine breakdown resulted
from unseaworthiness of the vessel before and
at the beginning of the voyage and it is for this
reason that they wish to inspect the engine
while it is in a dismantled condition and before
it is repaired and reassembled in order to obtain
full information as to the cause of the engine
breakdown. Applicants allege that although the
contribution to general average is to be settled
in New York, any action against them arising
out of the disputed claim would have to be
taken in Canada where they are located and
within the jurisdiction of this Court and in par
ticular applicant Nickimen Co. Inc. is within the
jurisdiction of the Montreal Registry of the
Court. It is applicants' contention that the guar
antee issued in New York for the payment of
general average charges can only be used for
this purpose after respondents' right to general
average contribution from the cargo interest
and, in particular, from applicants has been con
firmed and that proceedings for this purpose
would have to be taken in Canada as no direct
action can be taken against the parties providing
the guarantee which is only in the nature of an
indemnity to take effect when the right to the
claim itself has been established. Applicants
contend that their defence to such an action will
be prejudiced if the inspection does not take
place.
Since there is no provision in the Federal
Court Rules for such an order, applicants invoke
the gap rule, Rule 5, reading as follows:
Rule 5. In any proceeding in the Court where any matter
arises not otherwise provided for by any provision in any
Act of the Parliament of Canada or by any general rule or
order of the Court (except this rule), the practice and
procedure shall be determined by the Court (either on a
preliminary motion for directions, or after the event if no
such motion has been made) for the particular matter by
analogy
(a) to the other provisions of these Rules, or
(b) to the practice and procedure in force for similar
proceedings in the courts of that province to which the
subject matter of the proceedings most particularly
relates,
whichever is, in the opinion of the Court, most appropriate
in the circumstances.
and refer to section 438 of the Quebec Code of
Civil Procedure which reads as follows:
438. Anyone who, expecting to be a party to a legal
proceeding, has reason to fear that some evidence that he
will need may become lost or more difficult to present may,
by motion, ask:
a that the witnesses whose absence or incapacity he fears
be heard ad futuram memoriam;
b that anything moveable or immoveable, the condition of
which may affect the outcome of the expected legal
proceeding, be examined by a person of his choice.
This rule would appear to be particularly apt in
the present circumstances since, although appli
cants' cargo has suffered no damage and there
are no proceedings between the parties in this
Court as yet, this section is applicable to anyone
"expecting to be a party to a legal proceeding".
Certainly, in any contestation of an action for
general average contributions on the basis of
unseaworthiness of the vessel due to defective
engines, applicants would have "reason to fear
that some of the evidence that (they) will need
may become lost or more difficult to present",
and subsection b of section 438 provides that
"anything moveable or immoveable, the condi
tion of which may affect the outcome of the
expected legal proceeding," may be examined.
In commenting on general average Lowndes
& Rudolf in Volume 7 of British Shipping Laws
have this to say at paragraph 62, page 33:
If the necessity for a general average act arose as a result
of the fault of one of the parties to the adventure, the act
retains its general average character and contribution is due
between the parties to the adventure, subject to the impor
tant exception that the party at fault is not entitled to
recover contribution from any other at whose suit the fault
was actionable at the time at which the sacrifice or expendi
ture was made or incurred. The justification for this excep
tion has been attributed to the policy of the courts of
avoiding circuity of action and to the principle that a person
shall not recover from any other person in respect of the
consequences of his own wrong. The better view is that
contribution is irrecoverable because the sacrifice or expen
diture by the party at fault is made or incurred wholly or
partially for the benefit of that party alone and not for that
of the adventure as a whole, since the party at fault would
have been wholly or partially liable to the proposed con
tributor in respect of the loss averted by the general average
act. It may perhaps be added that in the majority of cases in
which the right to contribution in general average is disput
ed, the defence raised is that there has been actionable fault
by the party seeking contribution, e.g., the ship was at all
material times unseaworthy.
The fact that general average has already
been declared and a general average adjuster
appointed gives applicants reasonable grounds
to fear that litigation will eventually take place,
most probably within the jurisdiction of this
Court, to which proceedings they may have a
valid defence.
The question of making an order for inspec
tion is not without precedent in this Court as
such an order was made by Associate Chief
Justice Noël (then Noël J.) in case No. 1712,
Fiat Motors of Canada Limited v. The Ship
"Continental Pioneer" on January 28, 1970. It is
true that in that case an action had already been
instituted for breach of contract and tort for "a
claim anticipated to be in the sum of twenty
thousand dollars" whereas in the present case
no action has been brought by any of the parties
to date. I do not believe, however, that this need
defeat applicants' claim for what appears to be a
useful and desirable procedure, which can
moreover cause little harm to respondents, and
in fact, should the inspection fail to disclose any
condition of the engine indicating unseaworthi-
ness of the vessel at the time the voyage was
commenced, might well lead to an early settle
ment of the claim without the necessity of litiga
tion. On the other hand, such an inspection may
be very necessary to establish applicants'
defence of unseaworthiness should the inspec
tion tend to reveal such a condition. Possibly
some analogy with respect to applicants' posi
tion may be drawn from the quia timet proceed
ings which are recognized under the laws relat
ing to trade marks and unfair competition.
Respondents' counsel objected to the form of
affidavit supporting the motion which was
apparently hastily drawn and did not contain
certain statements which would have been
desirable such as an indication as to why the
inspection was so urgent that a motion for same
had to be made without giving respondents the
usual delay and presentable on a non-motion
day, and an indication of where and by whom
the guarantee for general average charges had
been put up. There was also clumsy and ambig
uous wording in paragraph 14 of the motion
which reads:
14. WHEREAS this Court has jurisdiction over the appli
cants' claim against the Carrier for the damages it suffered
and will suffer arising out of the General Average
Adjustment ....
whereas actually what is in issue is a foresee
able claim by the carrier against applicants for
their share of general average adjustment.
These matters were explained and the additional
information provided at the hearing by appli
cants' counsel in the presence of respondents'
counsel and I do not consider them to be of
sufficient substance as to justify a refusal of the
order prayed for.
Respondents' most serious argument is the
danger of creating a precedent by the applica
tion of Rule 5 to the circumstances of this case.
It has frequently been pointed out that this rule
should not be used so as to provide a rule of
general application which was not included
when the general rules were made. Moreover, it
must only be applied restrictively and in unusual
and exceptional circumstances that appear not
to have been foreseen in the general rules.
While it is true that any judgment of the Court
does, to some extent, create a precedent, it is
clear that the granting of an order to permit the
inspection in the circumstances of this case
would not, as respondents' counsel contended,
have the effect of opening the door to such
motions on every occasion when general aver
age is claimed, but each case would have to be
considered on its own merits and the desirability
of the application of Rule 5 dealt with accord
ingly. In the present case I believe that the
application is justified and accordingly I ren
dered from the Bench an order reading as
follows:
Motion granted in view of alleged urgency—reasons to
follow, without costs. Inspection of the engines of the
Executive Venture to be made where she lies in Montreal
Harbour at a time to be mutually agreed upon between
counsel for the parties but so as not to delay the sailing of
the ship. Inspection not to be allowed to interfere in any
way with normal progress of repairs to engines, and not to
include any right to question officers or crew or examine
any documents in connection with the repairs.
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.