Canadian National Railway Co. et al. v. Norsk Pacific Steamship Co. and Tug Jervis Crown et al.

Judgment Cited authorities (47) Cited in (499) Precedent Map Related
JurisdictionFederal Jurisdiction (Canada)
CourtSupreme Court (Canada)
JudgeCory, McLachlin, Stevenson and Iacobucci, JJ.
Citation(1992), 137 N.R. 241 (SCC),[1992] ACS no 40,91 DLR (4th) 289,1992 CanLII 105 (SCC),[1992] 1 SCR 1021,33 ACWS (3d) 357,[1992] CarswellNat 168,53 FTR 79,[1992] SCJ No 40 (QL),[1991] RRA 370,11 CCLT (2d) 1,137 NR 241
Date02 May 1991

CNR v. Norsk Pacific Steamship Co. (1992), 137 N.R. 241 (SCC)

MLB headnote and full text

Norsk Pacific Steamship Company Limited, Norsk Pacific Marine Services Ltd., The Tug Jervis Crown and Francis MacDonnell (appellants) v. Canadian National Railway Company (respondent)

(No. 21838)

Indexed As: Canadian National Railway Co. et al. v. Norsk Pacific Steamship Co. and Tug Jervis Crown et al.

Supreme Court of Canada

La Forest, L'Heureux-Dubé, Sopinka,

Cory, McLachlin, Stevenson

and Iacobucci, JJ.

April 30, 1992.

Summary:

A barge was being towed by the Tug "Jervis Crown" which was being assisted by another tug. As the vessels proceeded along the Fraser River, the barge collided with a Public Works Canada railway bridge, caus­ing extensive damage. The Canadian Na­tional Railway Co. and other users of the bridge, commenced an action against the Tug "Jervis Crown" and its owners for damages for pure economic loss resulting from the collision.

The Federal Court of Canada, Trial Divi­sion, in a decision reported 26 F.T.R. 82, allowed the Canadian National's claim for damages for pure economic loss. The tug and its owners appealed.

The Federal Court of Appeal, in decision reported 104 N.R. 321, dismissed the appeal. The tug and its owners appealed again.

The Supreme Court of Canada, La Forest, Sopinka and Iacobucci, JJ., dissenting, dis­missed the appeal.

Damages - Topic 531

Limits of compensatory damages - Re­moteness - Torts - Recoverable damages - Pure economic loss - The Supreme Court of Canada reviewed the law respect­ing recovery of economic loss - The court affirmed the flexible test for recovery of economic loss set out by the court in Nielson v. Kamloops, 54 N.R. 1 (S.C.C.) - The court extended the categories of cases in which economic loss may be recovered to cases where the plaintiff's operations are so closely allied to the operations of the party suffering physical damage and to its property that the plaintiff can be con­sid­ered a joint or common venturer with the property owner even though the plain­tiff has suffered no physical damage to its own property.

Damages - Topic 531

Limits of compensatory damages - Re­moteness - Torts - Recoverable damages - Pure economic loss - A barge being towed by a tug hit a Public Works Canada railway bridge, causing extensive damage - The tug was at fault - The Cana­dian National Railway Co. which used the bridge sued the tug and its owners for damages for pure economic loss - The Federal Court of Canada, Trial Division, allowed the railway's claim - The Supreme Court of Canada affirmed the decision - The court held that the necess­ary duty and proximity were established, that valid purposes would be served by permitting recovery and that recovery would not open the floodgates to unlimited liability.

Cases Noticed:

Donoghue v. Stevenson, [1932] A.C. 562 (H.L.), refd to. [paras. 9, 87, 191].

Ultramares Corp. v. Touche Niven & Co. (1931), 174 N.E. 441, refd to. [paras. 9, 100].

Cattle v. Stockton Waterworks Co. (1875), L.R. 10 Q.B. 453, refd to. [para. 10 et seq.].

Nielson v. Kamloops (City) and Hughes, [1984] 2 S.C.R. 2; 54 N.R. 1; [1984] 5 W.W.R. 1, folld. [para. 15 et seq.].

Riv­tow Mar­ine Ltd. v. Washington Iron Works, [1974] S.C.R. 1189, consd. [para. 15 et seq.].

Spartan Steel & Alloys Ltd. v. Martin & Co. (Contractors) Ltd., [1973] Q.B. 27 (C.A.), refd to. [paras. 17, 159, 268].

Leigh and Sillivan Ltd. v. Aliakmon Shipping Co., [1985] 1 Q.B. 306, refd to. [para. 18].

Hedley Byrne & Co. v. Heller & Partners Ltd., [1964] A.C. 465 (H.L.), refd to. [para. 21 et seq.].

Junior Books Ltd. v. Veitchi Co. Ltd., [1983] 1 A.C. 520 (H.L.), refd to. [paras. 22, 117].

Anns v. Merton Lon­don Borough Coun­cil, [1978] A.C. 728; [1977] 2 W.L.R. 1024; [1977] 1 All E.R. 492 (H.L.), refd to. [para. 22 et seq.].

Morrison Steamship Co. v. Greystoke Castle (Cargo Owner), [1947] A.C. 265 (H.L.), refd to. [paras. 22, 69, 89, 249, 253, 254].

Greystoke Castle, The - see Morrison Steamship Co. v. Greystoke Castle (Cargo Owner).

Murphy v. Brent­wood District Coun­cil, [1991] 1 A.C. 398; 113 N.R. 81 (H.L.), not folld. [para. 23 et seq.].

Caltex Oil (Aust.) Pty. Ltd. v. The Dredge Willemstad (1976), 11 A.L.R. 227 (Aust. H.C.), refd to. [paras. 24, 110, 112, 116, 174, 270, 274, 283-288, 299].

Domar Ocean Transportation v. Martin (1985), 754 F. 2d 616 (5th Cir.), refd to. [para. 25].

Amoco Transport Co. v. S/S Mason Lykes (1985), 768 F. 2d 659 (5th Cir.), refd to. [paras. 25, 69].

Union Oil Co. v. Oppen (1974), 501 F. 2d 588 (9th Cir.), refd to. [para. 25].

East River S.S. Corp. v. Transamerica Delaval Turbine Inc. (1985), 752 F. 2d 903 (3rd. Cir.), affd. (1986), 476 U.S. 858, refd to. [para. 25].

Marcailloux v. R.A.T.V.M. - see Cass. Civ. 2e, D.S. 1965.777.

Cass. Civ. 2e, April 28, 1965, D.S. 1965.777, refd to. [paras. 26, 214].

Joly v. Ferme Ré-Mi Inc., [1974] C.A. 523, refd to. [para. 26].

Regent Taxi v. Congrégation des petits frères de Marie, dits frères maristes, [1929] S.C.R. 650, refd to. [para. 27].

Laurent et al. v. Hôpital Notre-Dame de l'Espérance, [1978] 1 S.C.R. 605; 17 N.R. 593, refd to. [para. 27].

Cummer-Yonge In­vest­ments Ltd. v. Agnew-Surpass Shoe Stores Ltd., [1976] 2 S.C.R. 221; 4 N.R. 547, refd to. [paras. 30, 81].

Hof­strand Farms Ltd. v. B.D.C. Ltd., [1986] 1 S.C.R. 228; 65 N.R. 261, refd to. [paras. 30, 32, 48, 82, 198, 199].

MacMillan Bloedel Ltd. v. Foundation Co. of Canada Ltd., [1977] 2 W.W.R. 717 (B.C.S.C.), refd to. [para. 32].

Gypsum Carrier Inc. v. The Queen, [1978] 1 F.C. 147 (F.C.T.D.), refd to. [paras. 32, 142, 227].

Star Village Tavern v. Nield (1976), 71 D.L.R.(3d) 439 (Man. Q.B.), refd to. [paras. 32, 159].

Sutherland Shire Council v. Heyman (1985), 60 A.L.R. 1, refd to. [para. 45].

Simpson & Co. v. Thomson (1877), 3 App. Cas. 279 (H.L.), refd to. [paras. 86, 173, 226].

Ross v. Caunters, [1980] Ch. 297, refd to. [paras. 91, 116, 118].

Candlewood Navigation Corp. v. Mitsui O.S.K. Lines Ltd., [1986] A.C. 1 (J.C.P.C.), refd to. [paras. 107, 117, 173, 179, 202, 226, 238, 241, 275].

Leigh and Sillavan Ltd. v. Aliakmon Ship­ping Co., [1986] A.C. 785 (H.L.), refd. to [paras. 107, 179, 246, 297].

Société anonyme de Remorquage à Hélice v. Bennetts, [1911] 1 K.B. 243, refd to. [paras. 108, 191].

Weller & Co. v. Foot & Mouth Disease Research Institute, [1966] 1 Q.B. 569, refd to. [paras. 108, 159].

San Sebastian Pty. Ltd. v. The Minister (1986), 162 C.L.R. 340 (Aust. H.C.), refd to. [para. 111].

Candler v. Crane, Christmas & Co., [1951] 2 K.B. 164 (C.A.), refd to. [paras. 115, 276].

Clarke v. Bruce Lance & Co., [1988] 1 All E.R. 364 (C.A.), refd to. [para. 118].

Haig v. Bam­ford et al., [1977] 1 S.C.R. 466; 9 N.R. 43, refd to. [paras. 123, 198, 276].

Bethlehem Steel Corp. v. St. Lawrence Seaway Authority, [1978] 1 F.C. 464, refd to. [para. 159].

S.C.M. (United Kingdom) Ltd. v. W.J. Whittall & Son Ltd., [1971] 1 Q.B. 337, refd to. [paras. 159, 210].

State of Louisiana v. M/V Testbank (1985), 752 F. 2d 1019, refd to. [paras. 171, 204].

Robins Dry Dock & Repair Co. v. Flint (1927), 275 U.S. 303, refd to. [paras. 174, 202-206].

Abramovic v. Canadian Pacific Ltd. (1989), 69 O.R.(2d) 487, refd to. [para. 177].

Rivtow Marine Ltd. v. Washington Iron Works (1972), 26 D.L.R.(3d) 559 (B.C. C.A.), refd to. [para. 182].

Man­olakos v. Ver­non (City), [1989] 2 S.C.R. 1259; 102 N.R. 249, refd to. [para. 197].

Elliott Steam Tug Co. v. Shipping Con­troller, [1922] 1 K.B. 127, refd to. [para. 202].

MacPherson v. Buick Motor Co. (1916), 217 N.Y. 382, refd to. [para. 203].

Wagon Mound, The, [1961] A.C. 388, refd to. [para. 210].

Cass. civ 2e, June 25, 1975, Bull. II no. 195, refd to. [para. 211].

Cour d'appel de Colmar (Ch. détaché à Metz), April 20, 1955, D.1956.723, refd to. [para. 213].

Cass. civ. 2e, November 14, 1958, G.P. 1959.1.31, refd to. [para. 213].

Morin v. Blais, [1977] 1 S.C.R. 570; 10 N.R. 489, refd to. [para. 215].

J.E. Construction Inc. v. General Motors du Canada Ltée, [1985] C.A. 275, refd to. [para. 222].

Baumwoll Manufactur von Carl Schreibler v. Furness, [1893] A.C. 8 (H.L.), refd to. [para. 226].

Father Thames, The, [1979] 2 Lloyd's Rep. 364, refd to. [para. 226].

Konstantinidis v. World Tankers Corp. (The World Harmony), [1967] P. 341, refd to. [para. 235].

Venore Transportation Co. v. M/V Struma (1978), 583 F. 2d 708, refd to. [para. 243].

Aktieselskabet Cuzco v. The Sucarseco (1934), 294 U.S. 394, refd to. [paras. 249, 253, 254].

Smith v. Bush, [1990] 1 A.C. 831; 104 N.R. 355 (H.L.), refd to. [para. 297].

Lamb v. Camden London Borough Coun­cil, [1981] Q.B. 625 (C.A.), refd to. [para. 298].

Photo Production Ltd. v. Securicor Trans­port Ltd., [1980] A.C. 827, refd to. [para. 311].

Statutes Noticed:

Civil Code of Lower Canada, art. 1053 [paras. 27, 215].

Authors and Works Noticed:

American Law Institute, Restatement of the Law of Torts (2nd Ed. 1979), vol. 4, s. 766C [paras. 202, 207].

Atiyah, P.S., Negligence and Economic Loss (1967), 83 L.Q. Rev. 248, generally [para. 175], p. 270 [para. 219].

Atiyah, P.S., Note: Economic Loss in the United States (1985), 5 Oxf. J. Legal Studies 485, generally [para. 311].

Baudouin, J.L., La responsabilité civile délictuelle, 3e éd., 1990, nos. 177, 349, 354 [para. 215].

Bishop, W., Economic Loss in Tort (1982), 2 Oxf. J. Legal Studies 1, gen­erally [para. 308]; p. 2 [para. 58].

Chambers, Robert S., Economic Loss, in P.D. Finn, Essays on Torts (1989), p. 43 [para. 90].

Durry, Georges, Obligations et contrats spéciaux (1976), 74 Rev. trim. dr. civ. 132, p. 134 [para. 212].

Durry, Georges, Obligations et contrats spéciaux, [1979] Rev. trim. dr. civ. 612, generally [para. 211].

Feldthusen, Bruce, Economic Negligence (2nd Ed. 1989), pp. 8-14 [paras. 11, 98]; 129 [para. 91]; 170 [para. 92]; 200 [para. 158]; 201 [para. 201]; 207 [paras. 264, 321]; 208 [para. 264]; 234 [para. 243].

Feldthusen, Bruce, Economic Loss in the Supreme Court of Canada: Yesterday and Tomorrow (1991), 17 Can. Bus. L.J. 356, pp. 357, 358 [para. 157]; 375 [para. 178]; 376 [paras. 167, 276]; 377 [paras. 162, 276].

Finn, P.D., Essays on Torts (1983), pp. 36, 37 [para. 111]; 43 [para. 90].

Fleming, John G., The Law of Torts (7th Ed. 1987), pp. 8, 9 [para. 56]; 11 [para. 300]; 162ff [paras. 16, 108, 110]; 164, 165 [para. 245]; 202, 224 [para. 298]; 226 [para. 314]; 341 [para. 290].

Ghestin, Traité de droit civil, 1982, nos. 288 et seq. [para. 211].

Herbots, J., Le "duty of care" et le dommage purement financier en droit comparé, [1985] Rev. dr. int. et dr. comp. 7, generally [para. 105], pp. 21 [para. 223]; 32 [para. 218].

Irvine, John, Case Comment: Kamloops v. Nielsen (1984), 29 C.C.L.T. 185, p. 190 [para. 39].

James, F., Limitations of Liability for Economic Loss Caused by Negligence: A Pragmatic Appraisal (1972), 12 Jo. S.P.T.L. (No. 2) 105, generally [para. 203], pp. 113 [para. 311]; 114 [paras. 310, 311]; 115, 116 [para. 311].

Jutras, Daniel, Civil Law and Pure Econ­omic Loss: What Are We Missing? (1986-87), 12 Can. Bus. L.J. 295, gen­erally [paras. 105, 110], pp. 295, 296 [para. 218]; 310 [paras. 209, 218]; 311 [para. 218].

Limpens, Jean, Robert M. Kruithof and Anne Meinerthagen-Limpens, Liability for One's Own Act, in Andre Tunc, International Encyclopedia of Compara­tive Law, vol. 9, c. 2, IV [para. 218].

Markesinis, Basil S., La politique jurispru­dentielle et la réparation du préjudice économique en Angleterre: une approche comparative, [1983] Rev. int. dr. comp. 31, pp. 44, 45 [para. 212].

Markesinis, Basil S., A Comparative In­troduction to the German Law of Torts (2nd Ed. 1990), p. 37ff [para. 105]; 39 [para. 218].

McHugh, M.H., Neighbourhood, Proximity and Reliance, in P.D. Finn, Essays on Torts (1989), pp. 36, 37 [para. 111].

Scrutton, Sir Thomas Edward, Scrutton on Charterparties and Bills of Lading (19th Ed. 1984), pp. 47-52 [para. 226].

Smillie, J.A., Negligence and Economic Loss (1982), 32 U.T.L.J. 231, pp. 240-242 [para. 311].

Smith, J.C., Liability in Negligence (1984), p. 166 [paras. 16, 110].

Stapleton, Jane, Duty of Care and Econ­omic Loss: A Wider Agenda (1991), 107 L.Q. Rev. 249, pp. 255 [para. 267]; 259-261 [para. 175]; 270, 271, 278, 279 [para. 297].

Starck, Boris, Droit civil: Obligations: 1. Responsabilité délictuelle, 3e éd., by H. Roland and L. Boyer, Librairie de la Cour de cassation, 1986, no, 851 [para. 212].

Tetley, William, Damages and Economic Loss in Marine Collision: Controlling the Floodgates (1991), 22 J. Mar. L. & Com. 539, generally [para. 105]; pp. 575 [para 25]; 584 [paras. 28, 210].

Tunc, André, International Encyclopedia of Comparative Law, vol. 9, c. 2, IV [para. 218].

Viney, Geneviève, Les obligations: La responsabilité: Conditions, in J. Ghestin, Traité de droit civil, 1982, nos. 288 et seq. [para. 211].

Waddams, S.M., The Law of Damages (2nd Ed. 1991), p. 14.330 [para. 309].

Winfield and Jolowicz on Tort (13th Ed. 1989), p. 86 [paras. 16, 110].

Zweigert, Konrad, and Hein Kötz, An Introduction to Comparative Law (2nd Ed. 1977), p. 31 [para. 209].

Counsel:

P. D. Lowry and M.A. Clemens, for the appellants;

David McEwen, for the respondent.

Solicitors of Record:

Campney & Murphy, Vancouver, British Columbia, for the appellants;

McEwen, Schmitt & Co., Vancouver, British Columbia, for the respondent.

This appeal was heard on May 2, 1991, before, La Forest, L'Heureux-Dubé, Sopin­ka, Cory, McLachlin, Stevenson and Iaco­bucci, JJ., of the Supreme Court of Canada. The decision of the court was delivered in both official languages on April 30, 1992, including the following opinions:

McLachlin, J. (L'Heureux-Dubé and Cory, JJ., concurring) - see paragraphs 1 to 77;

Stevenson, J. (concurring) - see para­graphs 78 to 126;

La Forest, J., dissenting (Sopinka and Iacobucci, JJ., concurring) - see para­graphs 127 to 336.

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    ...C.P.R. (2d) 206................................................ 265, 268 Canadian National Railway Co. v. Norsk Pacific Steamship Co., [1992] 1 S.C.R. 1021, 91 D.L.R. (4th) 289, 137 N.R. 241 ......................... 56, 57 Canadian Pacific Railway v. Gill — see Gill v. Canadian Pacific Rai......
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    • June 15, 2005
    ...[1990] B.C.J. No. 569 (C.A.) ...................................... 398 Canadian National Railway Co. v. Norsk Pacific Steamship Co., [1992] 1 S.C.R. 1021, 91 D.L.R. (4th) 289 .................................................................... 17 Candler v. Crane, Christmas & Co [1951] 2 K......
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