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