T-144-85
Abitibi-Price Sales Corporation and Abitibi-Price
Sales Co. Ltd. (Plaintiffs)
v.
The Vessel Wilhelm Wesch and the Owners and
all others interested in the Vessel Wilhelm Wesch
and Partenreederei M.S. Wilhelm Wesch and
Reederei Jonny Wesch KG (Defendants)
INDEXED AS: ABITIBI-PRICE SALES CORP. V. WILHELM
WESCH (THE)
Trial Division, Teitelbaum J.—Montréal, Febru-
ary 9; Ottawa, March 6, 1987.
Practice — Service — Ex juris — Appeal from Prothono-
tary's decision setting aside service ex furls of notice of
statement of claim — Appeal allowed — Service properly
effected in Germany according to Federal Court Rules as
document served on employee having important managerial
responsibilities — Service not required to be effected according
to German law as Convention between Canada and Germany
on service of legal documents not applicable, having never been
ratified by Parliament of Canada — Federal Court Rules,
C.R.C., c. 663, RR. 2(2), 304(1), 307(1), 309(2)(b),(c) — Con
vention between His Majesty and the President of the German
Reich regarding legal proceedings in civil and commercial
matters, March 20, 1928, [1935/ Can. T.S. 11, Art. 3.
CASE JUDICIALLY CONSIDERED
CONSIDERED:
Duval Sales Corp. v. Ocean Cape Compania Naviera
S.A. (1986), 4 F.T.R. 231 (F.C.T.D.).
COUNSEL:
Peter J. Cullen for plaintiffs.
N. J. Spillane for defendants Partenreederei
M.S. Wilhelm Wesch and Reederei Jonny
Wesch KG.
SOLICITORS:
Stikeman, Elliott, Montréal, for plaintiffs.
McMaster Meighen, Montréal, for defendants
Partenreederei M.S. Wilhelm Wesch and
Reederei Jonny Wesch KG.
The following are the reasons for order ren
dered in English by
TEITELBAUM J.: The hearing before me is an
appeal of an order of the Prothonotary dated
January 21, 1987 wherein the Prothonotary grant
ed an application setting aside the service ex juris
upon the defendants, Partenreederei M.S. Wil-
helm Wesch and Reederei Jonny Wesch KG
(Wesch) of plaintiffs' notice of statement of claim
and setting aside service upon the defendants Par-
tenreederei M.S. Wilhelm Wesch and Reederei
Jonny Wesch KG of plaintiffs' statement of claim
effected at the offices of McMaster Meighen and
at the offices of Montreal Shipping Inc.
In the notice of appeal filed by the plaintiffs, the
plaintiffs rely on the following grounds of
objection:
a) the Prothonotary failed to recognize the
validity of the service in Germany accord
ing to Canadian law;
b) the Prothonotary failed to recognize that
the failure to serve by bailiff is a technical
defect, under German law, which may be
overcome by the facts of the case;
c) the Prothonotary failed to recognize that
through the course of dealings between
counsel, the services made in Canada and
the service ex juris the defendants received
constructive and actual notice of the
Canadian proceedings and obtained copies
of the statement of claim and notice in lieu
of service to be given out of the jurisdiction
prior to January 23, 1985.
d) the Prothonotary failed to invoke the equi
table jurisdiction of the Federal Court and
it was contrary to the spirit and intent of
Rule 2(2) of the Federal Court Rules
[C.R.C., c. 663];
e) the Prothonotary appears to rely on para
graph 5(i) of the affidavit of Dr. H. W.
Goetz dated August 8, 1986 which sub-
paragraph the plaintiffs believe to be
incorrect.
It therefore appears from the notice of appeal
that the plaintiffs find no fault with the decision of
the Prothonotary when he found that the service of
the statement of claim at the office of Montreal
Shipping Inc. and at the office of McMaster
Meighen to be invalid.
The issue to be decided by me is whether the
Prothonotary was correct in his conclusion that the
service ex juris of the notice of statement of claim
(in Germany) upon the defendants Partenreederei
M.S. Wilhelm Wesch and Reederei Jonny Wesch
KG was invalid.
At the conclusion of the arguments by counsel
of the parties, I ruled that the Prothonotary was in
error in granting defendants' application to set
aside the service ex juris of the notice of statement
of claim upon the defendants Partenreederei M.S.
Wilhelm Wesch and Reederei Jonny Wesch KG.
The reasons for so finding, are the following:
The following are the agreed, relevant facts of
this case.
On January 23, 1985, plaintiffs' attorney issued
a statement of claim in the Federal Court of
Canada and sent a telex of a notice of arbitration
to "Wesch".
The statement of claim and the notice of arbi
tration refer to the carriage of two shipments of
newsprint from Botwood, Newfoundland to the
Ports of Purfleet and Blyth in the United Kingdom
under bills of lading Nos. 1 and 2, both dated
January 9, 1980. The bills of lading are signed by
Montreal Shipping Company Ltd. (now Montreal
Shipping Inc.) as agents for the shipowner.
I am satisfied that Montreal Shipping Inc. was
acting as agent for the shipowner only on this
occasion and was not acting as agent for "Wesch"
in the ordinary course of business of "Wesch" as
claimed by counsel for the defendants. That is, I
am satisfied from the evidence filed that "Wesch"
did not ordinarily make use of the services of
Montreal Shipping Inc.
Montreal Shipping Inc. was advised of the
notice of arbitration telexed to "Wesch". Montreal
Shipping Inc.'s representative advised "Wesch"
that it received a copy of the notice of arbitration.
The firm of McMaster Meighen was retained by
"Wesch" to represent them in the matter of the
arbitration.
Between March 1, 1985 and August 21, 1985,
discussions took place between counsel for plain
tiffs and defendants in the matter of the arbitra
tion. Claim documents were submitted to counsel
for "Wesch" on or about August 21, 1985.
Counsel for the parties met on September 10,
1985 to review the entire file with a view to
resolving the dispute. On October 8, 1985, counsel
for "Wesch" was without instructions as to wheth
er "Wesch" wished to advance the arbitration,
nominate an arbitrator or settle plaintiffs' claim.
Counsel for "Wesch" was informed that a state
ment of claim had been issued.
On December 12, 1985 a copy of the issued
statement of claim was served on "Wesch" at the
office of McMaster Meighen as well as at the
office of Montreal Shipping Inc.
A representative of Montreal Shipping informed
"Wesch" that the statement of claim was served
on them. Counsel for "Wesch" informed counsel
for the plaintiffs that he was instructed by his
principals not to accept service. This obliged plain
tiffs to ask the Federal Court for leave to serve the
action ex juris.
On January 7, 1986, upon an application by
plaintiffs for ex furls service, the Prothonotary
issued the following order:
Upon reviewing Plaintiffs' Application and the attached
Affidavit This Honourable Court doth order that:
(a) service of a Notice of the Statement of Claim issued on
January 23, 1985 may be served on Defendants PAR-
TENREEDEREI M.S. WILHELM WESCH c/o Reederei
Jonny Wesch, Gehrden 15, 2155 Jork, Federal Republic
of Germany and REEDEREI JONNY WESCH, Gehrden
15, 2155 Jork, Federal Republic of Germany or at such
other premises in the Federal Republic of Germany
where the said Defendants may be located.
(b) Defendants PARTENREEDEREI M.S. WILHELM WESCH
and REEDEREI JONNY WESCH will have a delay of 30
days from the date of service to file a Statement of
Defence to the Action.
It is to be noted that the Prothonotary did not
give any directions on how the service was to be
effected.
Plaintiffs, in presenting their application for ex
juris service did not ask for any directions as to
how service should be effected.
The service of the notice of the statement of
claim was made upon "Wesch" on January 22,
1986 at 11:05 hrs. (German time) by a certain Mr.
Bernd Laudien, a German attorney, by leaving the
documentation with a Mr. Hans-Jochim Fursten-
berg, an employee of Reederei Jonny Wesch KG
at Gehrden 15, 2155 York, Federal Republic of
Germany. The above address is the address of the
office of "Wesch".
As I have previously stated herein, the above
facts are not contested.
I am satisfied that the defendants "Wesch" had
full and total knowledge of the proceedings that
were in progress in Canada, before January 22,
1986, notwithstanding the fact that the notice of
the statement of claim was not officially received
by "Wesch" until January 22, 1986.
McMaster Meighen is considered one of the
foremost law firms in Montréal and I am satisfied
that they fully reported to their principals about
the negotiations and legal proceedings that were
taking place in Canada.
Therefore, when the notice of the statement of
claim was served on "Wesch" in Germany, it came
as no surprise to them. They refused to allow
McMaster Meighen to accept service on their
behalf.
In order to refuse permission to accept service,
they had to know what it was that was served on
their counsel. As well, a representative of Mon-
treal Shipping Inc. informed "Wesch" of the state
ment of claim served at their office.
Counsel for "Wesch" did not, at any time, state
that "Wesch" was not aware of the discussions or
proceedings that were taking place between
respective counsel.
It only remains to determine, whether, on a
technicality, the service of the notice of the state
ment of claim on the defendants is invalid.
Since I have already stated that I have allowed
the appeal and thus state that the service ex juris
is valid, I believe it important to discuss the legal
arguments put forward by counsel for "Wesch"
and give the reasons why I have rejected them.
Counsel for "Wesch" states that as a general
principle there must be strict compliance with the
rules to bring a foreigner before our Courts.
I am in full agreement with counsel for
"Wesch" with regard to this principle. I have
stated, in speaking of effecting service outside the
jurisdiction, in the case of Duval Sales Corp. v.
Ocean Cape Compania Naviera S.A. (1986), 4
F.T.R. 231 (F.C.T.D.), at page 234:
I agree with the proposition that effecting service outside the
jurisdiction and forcing such a defendant to appear in, for it, a
foreign Court is and should be an exception to the general rule.
I also state, in the same case, at page 238:
I am of the belief that service ex juris is valid if the said service
was made in accordance with the instructions given by the
judge of the Federal Court of Canada and in accordance with
the laws of service in the country where the service is to be
effected, no diplomatic intervention should be necessary.
I do not agree with counsel, for "Wesch" if he
interprets the above statement to mean that service
ex juris can only be valid if the documentation is
served in accordance with the laws of service in the
country where the service is to be effected.
I do not "read" into the above statement that if
service is effected in accordance with the rules of
the Federal Court of Canada, and not in accord
ance with the rules of the country where service is
effected, it, the service, is invalid.
I believe it important to see what are the rules of
service of the Federal Court of Canada.
We must first look at Rule 304 regarding ser
vice of originating documents. In the present case
the originating document is the statement of claim
issued by plaintiffs.
Rule 304(1) is applicable and it states:
Rule 304. (1) Except in the case of an appeal from the Trial
Division to the Court of Appeal of an action, appeal or other
proceeding against the Crown, an originating document, that is
to say, a statement of claim or declaration, a notice of appeal,
an originating notice of motion, a petition, a notice of motion
for leave to appeal under section 31 of the Act or under any
other Act, a notice of an application under section 28 of the
Act, or other notice of an application that is not made in the
course of some other proceeding, shall be served on the defen
dant, respondent or other interested person personally (Affida-
vit of Service—Form 3).
What is important to note is that, generally,
originating documents must be served on the inter
ested person personally.
It is now necessary to see what is meant by
personal service. This is found in Rule 309. The
relevant section of Rule 309 for the present case is
found in Rule 309(2) which states:
Rule 309. ...
(2) Personal service of a document upon a corporation is
effected by leaving a certified copy of the document
(a) in the case of a municipal corporation, with the warden,
reeve, mayor or clerk,
(b) in any case other than a municipal corporation,
(i) with the president, manager, or other head officer, the
treasurer, the secretary, the assistant treasurer, the assist
ant secretary, any vice-president, or any person employed
by the corporation in a legal capacity, or
(ii) with the person apparently in charge, at the time of
the service, of the head office or of the branch or agency in
Canada where the service is effected, or
(c) in the case of any corporation, with any person discharg
ing duties for the particular corporation comparable to those
of an officer falling within paragraph (a) or subparagraph
(b)(i),
or such other method as may be provided by statute for the
particular case or as is provided for service of a document on a
corporation for the purposes of a superior court in the province
where the service is being effected.
In that the service of the statement of claim
(originating document) is to be served in Germany
on a German corporation, Rule 307(1) service ex
juris, must also be followed. This Rule states:
Rule 307. (1) When a defendant, whether a Canadian citizen,
British subject or a foreigner, is out of the jurisdiction of the
Court and whether in Her Majesty's dominions or in a foreign
country, the Court, upon application, supported by affidavit or
other evidence showing that, in the belief of the deponent, the
plaintiff has a good cause of action, and showing in what place
or country, such defendant is or probably may be found, may
order (Form 5) that a notice of the statement of claim or
declaration may be served on the defendant in such place or
country or within such limits as the Court thinks fit to direct
(Form 6).
Therefore, if valid ex juris service is to be
effected on a corporation, permission must be
obtained to effect the service, Rule 307, and that
the document must be served on the president,
manager or other head officer, the treasurer, the
secretary, the assistant treasurer, the assistant
secretary, any vice-president, or any person
employed by the corporation in a legal capacity.
An ex juris service was authorized by the senior
Prothonotary on January 7, 1986 satisfying Rule
307.
Service of the notice of statement of claim was
made by leaving the document with Hans-Jochim
Furstenberg, an employee of defendant "Wesch".
I am satisfied with the statement of Bernd
Laudien, the German attorney who effected the
service, that he had had previous dealings with the
defendants and that Mr. Furstenberg was the
person to address oneself to at the office of Reede-
rei Jonny Wesch KG.
The affidavit of Mr. Laudien of July 25, 1986
states, in paragraph 5:
I have personally known Mr. Furstenberg for 6 years and
Reederei Jonny Wesch KG (a former client) for 6 years. Mr.
Furstenberg has always been known in local and international
shipping services as the party to address oneself to at Reederei
Jonny Wesch KG. To my knowledge this is due to the fact that
both partners of the firm, Bernd and Egon Wesch, are often
absent from the office or difficult to reach by phone or in
person. One is generally referred to Mr. Furstenberg, who is
seemingly in charge.
Counsel for the defendants states that Mr. Fur-
stenberg does not fall into the classification of
individuals mentioned in Rule 309(2)(b) or (c).
I believe he does as is evidenced by the state
ment of Bernd Laudien by the statement of Egon
Wesch in his affidavit, which is undated on the
German original but is purported to have been
sworn to on the 8th day of August 1986 according
to the affidavit of Ulrich Hermann Stahl, the
person who translated Mr. Wesch's original
affidavit.
Egon Wesch, in paragraphs 2 and 3 of his
affidavit admits that Mr. Furstenberg is entrusted
with the preparation and conduct of the day to day
operation of the vessels of Reederei Jonny Wesch
KG and Partenreederei M/V "Wilhelm Wesch",
the defendants herein and that he is also the
person to address oneself to in respect of many day
to day operations of Reederei Jonny Wesch KG.
I am satisfied that Mr. Furstenberg is not an
ordinary employee. He has important managerial
responsibilities and cannot be considered as an
ordinary clerk as Mr. Wesch would like me to
believe.
I am therefore satisfied that under the rules of
service of the Federal Court of Canada, the notice
served on the defendants was properly served.
The problem that arises is the question of
whether the service of the notice on the German
defendants had to be effected in accordance with
German law. It is admitted by all parties that the
service effected was not in accordance with
German law. It is admitted that according to
German law, service must be effected by bailiff.
Mr. Bernd Laudien is not and was not a bailiff. He
is an attorney. Counsel for defendants also state
that the service if not made by bailiff must be
made by a diplomatic officer.
I have been referred to a treaty between Canada
and Germany with regard to service of civil and
commercial documents. The treaty is The Conven
tion between His Majesty and the President of the
German Reich regarding legal proceedings in civil
and commercial matters [[1935] Can. T.S. No.
11] signed at London (England) on March 20,
1928, Ratifications exchanged at Berlin on Febru-
ary 15, 1929 and in force August 1, 1935.
This treaty was suspended on the outbreak of
war with Germany. After World War II, an
Exchange of Notes done at Bonn, Germany, on
October 30, 1953 revived the Convention as be
tween Canada and the Federal Republic of Ger-
many, with effect from November 1, 1953 (see
letter dated August 25, 1985 signed Joe Clark,
Secretary of State for External Affairs).
The parties agree that this treaty was never
ratified by the Parliament of Canada. As is stated
by the Right Honourable Joe Clark, the Conven
tion was revived by an "Exchange of Notes". The
Convention, in speaking of service of judicial and
extra-judicial documents refers particularly to
Article 3 under this heading, which states:
ARTICLE 3
(a) The request for service shall be transmitted:—
In England by a German diplomatic or consular officer
to the Senior Master of the Supreme Court of Judica
ture in England.
In Germany by a British consular officer to the Presi
dent of the German "Landgericht".
(b) The request, containing the name of the authority from
whom the document transmitted emanates, the names and
descriptions of the parties, the address of the recipient and the
nature of the document in question shall be drawn up in the
language of the country in which the documents are to be
served. If in a particular case the judicial authority applied to
shall express a desire to that effect to the diplomatic or
consular officer by whom the request is transmitted, such
officer shall furnish a translation of the document to be served.
(e) Service shall be effected by the competent authority of
the country applied to. Such authority, except in the cases
provided for in paragraph (d) of this article, may limit his
action to effecting service by the transmission of the document
to the recipient if he is willing to accept it.
(d) If the document to be served is drawn up in the language
of the country applied to, or is accompanied by a translation in
that language, the authority applied to (should a wish to that
effect be expressed in the request) shall serve the document in
the manner prescribed by law of his own country for the service
of similar documents or in a special form which is not incom
patible with such law.
(e) The translation provided for in this article shall be
certified as correct by a diplomatic or consular officer of the
Contracting Party making the request or by an official or sworn
translator of one of the two countries concerned.
(f) The execution of the request for service can only be
refused if the Contracting Party in whose territory it is to be
effected considers it such as to compromise his sovereignty or
safety.
(g) The authority who receives the request shall send to the
diplomatic or consular officer by whom it was transmitted the
document proving the service or explaining the reason which
has prevented such service. Proof of service shall be furnished
by a certificate from the authority of the country applied to
setting forth the fact, the manner and date of such service. If
any document to be served is transmitted in duplicate, the
certificate of service shall be placed on one of the duplicates or
attached thereto.
It is defendants' contention that service of legal
documents, because of the Convention, must be
effected by diplomatic officers.
Dr. Heinrich-Werner Goetz, a German attor
ney, in an affidavit dated June 12, 1986, in para
graph 5(b) states:
... according to Article 3 of the said Convention service of
legal documents may be effected through diplomatic officers.
This course has not been adopted by the Plaintiff.
This is correct. Plaintiff served its documenta
tion in accordance with the rules of service of the
Federal Court of Canada and not in accordance
with the Convention.
I am of the opinion that plaintiff is not bound by
the terms of the Convention, in that, and as I have
stated, the Convention was never ratified by Par
liament. A Convention, treaty, between Canada
and another sovereign nation that tends to change
the domestic law of Canada must be ratified by
the Parliament of Canada.
Peter W. Hogg, in his book Constitutional Law
of Canada, 1977, The Carswell Company Limited,
pages 182 to 186 discusses the procedure for
making treaties, the ratification of treaties, the
role of Parliament and the implementing of trea
ties. These sections are important to note, in that,
they state that a valid treaty can be in existence
without affecting the domestic law of Canada
unless it is implemented by the Parliament of
Canada.
The Convention entered into between the Feder
al Republic of Germany and Canada was entered
into by means of an exchange of notes between the
respective Governments. This method is one of the
methods used by sovereign countries entering into
treaties.
Peter W. Hogg at page 183 states:
A third kind of treaty, which is less formal than the treaty in
intergovernmental form, and which is now more common, is the
treaty in exchange-of-notes form. This is concluded by an
exchange of notes (or letters) between the two agreeing states;
the notes may be signed by the state's foreign ministers or by
ambassadors or high commissioners or even by a minister in
charge of a department other than external affairs.
As is stated by the Rt. Hon. Joe Clark in his
letter of August 25, 1986:
After World War II an Exchange of Notes done at Bonn on
October 30, 1953 revived the Convention as between Canada
and the Federal Republic of Germany, with effect from
November 1, 1953.
Mr. Hogg, on page 183, states, as to when
treaties come into force, and more particularly,
treaties entered into by an exchange of notes:
Treaties in exchange-of-notes form and some treaties in
intergovernmental form come into force on the signing of the
agreement, or the delivery of the second note (the reply to the
first note) or on a date specified in the agreement.
The Rt. Hon. Joe Clark, in his letter of August
25, 1986 states that the treaty (Convention) came
into effect on November 1, 1953 while Dr. Hein-
rich-Werner Goetz states, in paragraph 5 of his
affidavit of June 12, 1986:
After the second world war the governments of Canada and the
Federal Republic of Germany on 14.12.1953 re-affirmed
applicability of said Convention after it had to be suspended by
reason of war hostilities.
From this statement, I assume that the treaty
was re-affirmed on December 14, 1953 but that it
became effective on November 1, 1953.
In order for the treaty to be "in effect" the
Canadian Parliament does not need to give its
approval. As Mr. Hogg states on page 184:
The Canadian Parliament plays no necessary role in the
making of treaties .... in other words, the executive branch of
government has the power to make treaties without the necessi
ty of parliamentary authority.
Therefore, it is important to know what effect
does a valid treaty have if the Parliament of
Canada has not sanctioned the agreement and has
not made the agreement part of Canadian law.
This is found at pages 184 and 185 of Mr.
Hogg's book:
But the making of a treaty must be distinguished from the
implementing of the treaty, that is to say, the performance of
the treaty obligations. As soon as a treaty is made and in force,
the states which are parties to the treaty come under an
obligation in international law to implement the treaty.
Canada's constitutional law, derived in this respect from the
United Kingdom, does not recognize a treaty as part of the
internal (or "municipal") law of Canada. Accordingly, a treaty
which requires a change in the internal law of Canada can only
be implemented by the enactment of a statute which makes the
required change in the law.
The internal law of Canada, insofar as service of
originating documents of the Federal Court of
Canada is concerned, is that the document can be
served by a literate person, of the age of majority
on an employee of the defendant, if the defendant
is a corporation.
This was done. The document was served on Mr.
Furstenberg, a person with authority on behalf of
the defendants, by Mr. Bernd Laudien, an attor
ney in Germany.
Because the Convention of 1928 was never rati
fied by Parliament, Canadian internal law has not
been changed. No statute was enacted by the
Canadian Parliament to make the required change
in our rules.
I therefore believe that to serve the notice of the
statement of claim on the defendants, it was not
necessary to have the document served by a
diplomatic officer or to have the document served
in accordance with German law. It is sufficient to
have served the notice in accordance with the laws
and rules governing service in the Federal Court of
Canada, which, in this case, was followed.
It is not the purpose of the Federal Court Rules
to prevent a litigant to attempt to enforce his
rights because of technicalities. As stated, the
defendants were aware of all the proceedings.
They were also aware that their counsel had
arrived at a settlement. They were certainly not
surprised when they were served with the notice of
the statement of claim.
For the above reasons, I allow the appeal, costs
to follow the outcome of the cause.
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.