Canadian National Railway Co. et al. v. Norsk Pacific Steamship Co. and Tug "Jervis Crown" et al., (1990) 104 N.R. 321 (FCA)

• Judge: Heald, Stone and MacGuigan, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: January 05, 1990
• Jurisdiction: Canada (Federal)
• Citations: (1990), 104 N.R. 321 (FCA)

CNR v. Norsk Pacific Steamship Co. (1990), 104 N.R. 321 (FCA)

MLB headnote and full text

Canadian National Railway Company (respondent/plaintiff) v. Norsk Pacific Steamship Company Limited, Norsk Pacific Marine Services Ltd., Fletcher Challenge Ltd., The Tug "Jervis Crown", Francis MacDonnell (appellants/defendants) and Crown Forest Industries Ltd., The Barge "Crown Forest No. 4", Rivtow Straits Ltd. and R.V.C. Holdings Ltd. operating under the firm name and style of Westminster Tug Boats and the said Westminster Tug Boats, The Tug "Westminster Chinook" and Barry Smith (defendants) and Her Majesty The Queen (respondents/third party)

(No. A-226-89)

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

Federal Court of Appeal

Heald, Stone and MacGuigan, JJ.A.

January 5, 1990.

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 Company 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 railway's claim for damages for pure economic loss. The tug and its owners appealed.

The Federal Court of Appeal dismissed the appeal.

Damages - Topic 531

Limits of compensatory damages - Remoteness - Torts - Recoverable damages - Pure economic loss - A barge being towed by two tugs hit a Public Works Canada railway bridge, causing extensive damage - The head tug was at fault - The Canadian National Railway Co. which used the bridge, sued the head tug and its owners for damages for pure economic loss - The Federal Court of Canada, Trial Division, allowed the railway's claim - The Federal Court of Appeal affirmed the decision - The Court of Appeal examined the Canadian and English jurisprudence respecting pure economic loss and set out the principles currently applicable in Canada.

Cases Noticed:

Ontario v. Fatehi, [1984] 2 S.C.R. 536; 56 N.R. 62; 15 D.L.R.(4th) 132, consd. [paras. 4, 43, 44, 77].

D. & F. Estates Ltd. v. Church Commissioners for England, [1989] 1 A.C. 177; 94 N.R. 286, consd. [paras. 15, 29, 30].

Anns v. Merton London Borough Council, [1978] A.C. 728, consd. [paras. 16, 25, 47, 51, 60, 81, 82].

Donoghue v. Stevenson, [1932] A.C. 562, consd. [paras. 16, 17, 34, 60].

Home Office v. Dorset Yacht Co. Ltd., [1970] A.C. 1004, refd to. [para. 16].

Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd., [1964] A.C. 465, consd. [paras. 16, 18, 19, 30, 34, 36, 48, 50, 59, 83].

Cattle v. The Stockton Waterworks Company (1875), L.R. 10 Q.B. 453, consd. [paras. 17, 34, 74, 75, 77, 84].

Ultramares Corporation v. Touche (1931), 255 N.Y. 170; 174 N.E. 441, consd. [paras. 17, 39].

Morrison Steamship Co. Ltd. v. Greystoke Castle (Cargo Owners), [1947] A.C. 265, refd to. [para. 18].

Caltex Oil (Aust) Pty. Ltd. v. The Dredge "Willemstad" (1976), 11 A.L. R. 227, consd. [paras. 19-24, 26, 27, 30, 50, 56, 59, 79, 83, 86, footnote 4].

Junior Books Ltd. v. Veitchi Co. Ltd., [1983] A.C. 520; [1982] 3 All E.R. 201, consd. [paras. 25, 26, 28, 29, 30, 47, 59, 79].

Candlewood Navigation Corporation Ltd. v. Mitsui O.S.K. Lines Ltd. ("The Mineral Transporter"), [1986] 1 A.C. 1; [1985] 2 All E.R. 935, consd. [paras. 26, 78, 79, 82, 84, 86, footnote 4].

Leigh and Sillavan Ltd. v. Aliakmon Shipping Co. Ltd., [1986] 1 A.C. 785; [1986] 2 All E.R. 145; 66 N.R. 60 (H.L.), consd. [paras. 28, 30, 78, 84].

East River Steamship Corporation v. Transamerica Delaval Inc. (1986), 106 S. Ct. 2295, refd to. [para. 29].

Reid v. Rush & Tompkins Group, [1989] 3 All E.R. 228, refd to. [para. 29, footnote 3].

Rivtow Marine Ltd. v. Washington Ironworks and Walkem Machinery and Equipment Ltd., [1974] S.C.R. 1189; 40 D.L.R.(3d) 530, consd. [para. 31 et seq.].

J. Nunes Diamonds Ltd. v. Dominion Electric Protection Company, [1972] S.C.R. 769, consd. [para. 36].

Nielsen v. Kamloops, City of and Hughes and Hughes, [1984] 2 S.C.R. 2; 54 N.R. 1; 10 D.L.R.(4th) 641; [1984] 5 W.W.R. 1, consd. [paras. 36-40, 44, 45, 74, footnote 1, 77, 80, 81, 83, 86, footnote 4].

Attorney General for Ontario v. Fatehi (1981), 34 O.R.(2d) 129 (Ont. C.A.), consd. [paras. 40, 42].

Cummer-Yonge Investments Ltd. v. Agnew-Surpass Shoe Stores Ltd., [1976] 2 S.C.R. 221; 4 N.R. 547; 55 D.L.R.(3d) 676, consd. [paras. 44, 47, 55, 58, 77].

Haig v. Bamford, [1977] 1 S.C.R. 466; 9 N.R. 43; 72 D.L.R.(3d) 68; [1976] 3 W.W.R. 331, consd. [paras. 45, 55, 58, 83, 86, footnote 4].

Hofstrand Farms Limited v. B.D.C. Ltd., [1986] 1 S.C.R. 228; 65 N.R. 261; 26 D.L.R.(4th) 1, consd. [paras. 47, 59, 60, 80, 81, 84, 87, footnote 5].

Central Trust Company v. Rafuse and Cordon, [1986] 2 S.C.R. 147; 69 N.R. 321; 31 D.L.R.(4th) 481, consd. [paras. 48, 49, 67].

Baird et al. v. Canada, [1984] 2 F.C. 160; 48 N.R. 276; 148 D.L.R.(3d) 1 (F.C.A.), consd. [paras. 50, 58].

Gypsum Carrier Inc. v. The Queen, [1978] 1 F.C. 147; 78 D.L.R.(3d) 175, consd. [paras. 51, 52, 53, 85].

Bethlehem Steel Corporation v. St. Lawrence Seaway Authority, [1978] 1 F.C. 464; 79 D.L.R.(3d) 522, consd. [paras. 51, 52].

Interocean Shipping Company v. The Ship "M/V Atlantic Splendour", [1984] 1 F.C. 931, consd. [paras. 51, 53].

Nicholls v. Corporation of Township of Richmond, [1983] 4 W.W.R. 169, refd to. [para. 54].

Maughan v. International Harvester Co. of Canada Ltd. (1980), 38 N.S.R.(2d) 101; 69 A.P.R. 101; 112 D.L.R.(3d) 243 (N.S.C.A.), refd to. [para. 55].

Yumerovski v. Dani (1977), 83 D.L.R.(3d) 558 (Ont. Co. Ct.), affd. (1979), 120 D.L.R.(3d) 768 (Ont. C.A.), refd to. [para. 56].

University of Regina v. Pettick (1986), 51 Sask.R. 270; 23 C.L.R. 204 (Sask. Q.B.), refd to. [para. 57].

Dominion Tape of Canada Ltd. v. L.R. McDonald & Sons. Ltd. (1971), 21 D.L.R.(3d) 299 (Ont. Co. Ct.), refd to. [para. 57].

Smith v. Melançon, [1976] 4 W.W.R. 9 (B.C.S.C.), refd to. [para. 57].

MacMillan Bloedel Ltd. v. Foundation Company of Canada Ltd. (1977), 75 D.L.R.(3d) 294 (B.C.S.C.), refd to. [para. 57].

Trappa Holdings Ltd. v. Surrey and Imperial Paving Ltd., [1978] 6 W.W.R. 545 (B.C.S.C.), refd to. [para. 57].

Gold v. The Dehavilland Aircraft of Canada Limited, [1983] 6 W.W.R. 229 (B.C.S.C.), refd to. [para. 57].

Spartan Steel & Alloys Ltd. v. Martin & Co. (Contractors) Ltd., [1973] 1 Q.B. 27 (C.A.), consd. [paras. 59, 63].

S.C.M. (United Kingdom) Ltd. v. W.J. Whittal and Son Ltd., [1971] 1 Q.B. 337 (C.A.), refd to. [para. 59, footnote 6].

Sutherland Shire Council v. Heyman (1985), 60 A.L.R. 1, refd to. [para. 64].

Simpson and Company v. Thomson (1877), 3 App. Cas. 279, consd. [paras. 74, 76].

Hill v. Chief Constable of West Yorkshire, [1989] 1 A.C. 53, refd to. [para. 81, footnote 2].

Yeu et al. v. Hong Kong (Attorney General), [1988] A.C. 175; 82 N.R. 321, refd to. [paras. 81, 82, foot notes 2, 3].

Governors of the Peabody Donation Fund v. Sir Lindsay Parkinson & Co. Ltd., [1985] A.C. 210, refd to. [para. 82].

Ross v. Caunters, [1980] 1 Ch. 287, refd to. [paras. 83, 87].

Authors and Works Noticed:

Atiyah, P.S., Negligence and Economic Loss (1967), 83 L.Q. Rev. 248, p. 265 [para. 4].

Blom, Joost, Economic Loss: Curbs on the Way Ahead? (1987), 12 Can. Bus. L.J. 275 [para. 26, footnote 2].

Burns, Peter J., Recent Developments in Negligence Law, Negligence Law in the 1990's (1985), p. 10 [para. 54, footnote 4].

Cane, Peter, Economic Loss in Tort: Is the Pendulum Out of Control? (1989), 52 M.L. Rev. 200, p. 214 [para. 15].

Feldthusen, Bruce, Economic Loss: Where Are We Going After Junior Books? (1987), 12 Can. Bus. L.J. 241, p. 273 [para. 26, footnote 2].

Feldthusen, Bruce, Economic Negligence (2nd Ed. 1989), p. 200 [para. 17].

Feldthusen, Bruce, Pure Economic Loss Consequent Upon Physical Damage to a Third Party (1977), 16 U.W.O.L. Rev. 1, pp. 4 [para. 4]; 26 [para. 5].

Fleming, John G., The Law of Torts (7th Ed.), pp. 162, 163 [para. 5].

Jones, Michael A., Note (1986), 102 L.Q. Rev. 13, p. 15 [para. 66].

Jutras, Daniel, Civil Law and Pure Economic Loss: What Are We Missing? (1987), 12 Can. Bus. L.J. 295, p. 309 [para. 58, foonote 5].

Linden, Canadian Tort Law (4th Ed.), p. 393 [para. 63].

Markesinis, B.S., An Expanding Tort Law -- The Price of a Rigid Contract Law (1987), 103 L.Q. Rev. 354 [para. 58, footnote 5].

Smillie, J.A., Negligence and Economic Loss (1982), 32 U. Tor. L.J. 231 [para. 17].

Counsel:

P.D. Lowry and J.W. Perret, for the appellants;

D.F. McEwen, for the respondents.

Solicitors of Record:

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

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

This appeal was heard in Ottawa, Ontario, on November 7-9, 1989, before Heald, Stone and MacGuigan, JJ.A., of the Federal Court of Appeal. The decision of the Court of Appeal was delivered on January 5, 1990, including the following opinions:

MacGuigan, J.A. (Heald, J.A., concurring) - see paragraphs 1 to 72;

Stone, J.A. - see paragraphs 73 to 88.