Magic Sportswear Corp. et al. v. OT Africa Line Ltd. et al., (2006) 352 N.R. 331 (FCA)

• Judge: Décary, Evans and Sharlow, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: June 21, 2006
• Jurisdiction: Canada (Federal)
• Citations: (2006), 352 N.R. 331 (FCA);2006 FCA 284

Magic Sportswear v. OT Africa Line (2006), 352 N.R. 331 (FCA)

MLB headnote and full text

Temp. Cite: [2006] N.R. TBEd. SE.006

OT Africa Line Ltd., OT Africa Line, and the Owners and Charterers and all others interested in the Ship "Mathilde Maersk": and in the Ship "Suzanne Delmas" (appellants/defendants) v. Magic Sportswear Corp. and Blue Banana (respondents/plaintiffs)

(A-444-04; 2006 FCA 284)

Indexed As: Magic Sportswear Corp. et al. v. OT Africa Line Ltd. et al.

Federal Court of Appeal

Décary, Evans and Sharlow, JJ.A.

August 23, 2006.

Summary:

The plaintiffs hired the defendants to ship cartons from New York to Liberia. The bill of lading was issued at and the freight was pay­able at Toronto, Ontario. When the con­tainer arrived in Liberia, cartons were miss­ing. The plaintiffs commenced proceed­ings in the Federal Court. The defendants com­menced court proceedings in England. The defend­ants moved for a stay of the Canadian pro­ceedings.

A Prothonotary of the Federal Court, in a decision reported at [2003] F.T.R. Uned. 924; 2003 FC 1513, dismissed the motion. The defendants moved to set aside the order.

The Federal Court, in a decision reported at 264 F.T.R. 1; 2004 FC 1165, dismissed the motion. The defendants appealed.

The Federal Court of Appeal allowed the ap­peal, set aside the orders below and stayed the plaintiffs' action in the Federal Court con­ditional on the defendants pursuing, with­out delay, their action in England.

Conflict of Laws - Topic 728

Jurisdiction - Jurisdiction excluded by con­tract - Stay of proceedings - When avail­able - [See first Courts - Topic 4033.3 ].

Conflict of Laws - Topic 2402

Admiralty - General - Forum conveniens - The plaintiffs hired the defendants to ship cartons from New York to Liberia - When the container arrived in Liberia, cartons were miss­ing - The contract of carriage pro­vided that claims would be exclusively governed by English law and determined by the High Court in London - The plain­tiffs commenced proceedings in the Feder­al Court, submitting that s. 46(1) of the Marine Liability Act granted the court jur­is­diction to hear the claim - The defend­ants com­menced court proceedings in Eng­land - The Federal Court of Appeal held that while s. 46(1) conferred jurisdic­tion on the Federal Court over the plain­tiffs' claim, it was still necessary to decide if the Federal Court or the High Court in London was the more convenient forum - See paragraph 37.

Conflict of Laws - Topic 2402

Admiralty - General - Forum conveniens - The plaintiffs hired the defendants to ship cartons from New York to Liberia - When the container arrived in Liberia, cartons were miss­ing - The contract of carriage provided that claims would be exclusively governed by English law and determined by the High Court in London - The plain­tiffs commenced proceedings in the Feder­al Court, submitting that s. 46(1) of the Marine Liability Act granted the court jur­isdiction to hear the claim - The defend­ants com­menced court proceedings in Eng­land - The English courts issued judg­ments asserting their jurisdiction - The Federal Court of Appeal held that s. 46(1) had not ousted the principles of international com­ity - Accordingly, weight should be given to the English judgments asserting their jur­isdic­tion to determine if, compared to the High Court in London, the Federal Court was forum non conveniens - See para­graphs 70 to 83.

Conflict of Laws - Topic 2402

Admiralty - General - Forum conveniens - The plaintiffs hired the defendants to ship cartons from New York to Liberia - When the container arrived in Liberia, cartons were miss­ing - The contract of carriage pro­vided that claims would be exclusively governed by English law and determined by the High Court in London - The plain­tiffs commenced proceedings in the Feder­al Court, submitting that s. 46(1) of the Marine Liability Act granted the court jur­isdiction to hear the claim - The defend­ants com­menced court proceedings in Eng­land - The Federal Court of Appeal held that s. 46(1) had not ousted exclusive jur­isdiction clauses - Accordingly, giving weight to the parties' choice of forum was not inconsistent with the policy underlying s. 46(1) - See paragraphs 84 to 88.

Conflict of Laws - Topic 2402

Admiralty - General - Forum conveniens - [See first Courts - Topic 4033.3 ].

Conflict of Laws - Topic 2402.1

Admiralty - General - Choice of forum by par­ties - [See first Courts - Topic 4033.3 ].

Courts - Topic 4033.3

Federal Court of Canada - Jurisdiction - Trial Division - Stay of proceedings - Con­tractual agreement to submit dispute to foreign jurisdiction - The plaintiffs hired the defendants to ship cartons from New York to Liberia - When the container ar­rived in Liberia, cartons were miss­ing - The contract of carriage provided that claims would be exclusively governed by English law and determined by the High Court in London - The plaintiffs com­menced proceedings in the Federal Court - The defendants com­menced court proceed­ings in England - The Federal Court of Ap­peal stayed the Canadian proceedings - The court considered that the factors fa­vouring Canada (where the bill of lading was issued and the freight was payable) bore little weight because they were irrel­evant to the dispute - There was no evi­dence that litigation in England would cause the plaintiffs undue hardship - The factors connecting the dispute to England were cumulatively more significant (com­ity, parallel proceedings, difficulty re recognition of Canadian judgment in Eng­land, choice of forum and convenience) - Accordingly, England was the more appro­priate forum - See paragraphs 89 to 100.

Courts - Topic 4033.3

Federal Court of Canada - Jurisdiction - Trial Division - Stay of proceedings - Contractual agreement to submit dispute to foreign jurisdiction - The plaintiffs hired the defendants to ship cartons from New York to Liberia - When the container ar­rived in Liberia, cartons were miss­ing - The contract of carriage provided that claims would be exclusively governed by English law and determined by the High Court in London - The plaintiffs com­menced proceedings in the Federal Court, submitting that s. 46(1) of the Marine Liability Act granted the court jurisdiction to hear the claim - The defendants argued that s. 46(1) not only conferred jurisdiction on the Federal Court over the dispute, but also directed the court to exercise its juris­diction, without considering whether it, or the High Court in London, was the more con­venient forum for litigating it - Accord­ingly, the Federal Court was wrong to de­cide otherwise - The Federal Court of Ap­peal rejected the argument - Section 46(1) merely provided that, when it ap­plied, a claim­ant could institute proceed­ings in a court in Canada that would have jurisdic­tion if the contract had referred the claim to Canada - It gave no directive to the court in Canada in which the claimant elected to proceed respecting that court's exercise of its jurisdiction - Second, s. 46(1) did not expressly remove the broad discretion of the Federal Court and the Federal Court of Appeal under s. 50(1) of the Federal Courts Act to stay a proceed­ing over which they had jurisdiction, but where "the claim is being proceeded with in another jurisdiction" or a stay "is in the interests of justice" - See paragraphs 25 to 34.

Courts - Topic 4033.3

Federal Court of Canada - Jurisdiction - Trial Division - Stay of proceedings - Con­tractual agreement to submit dispute to for­eign jurisdiction - The plaintiffs hired the defendants to ship cartons from New York to Liberia - When the container ar­rived in Liberia, cartons were miss­ing - The con­tract of carriage provided that claims would be exclusively governed by English law and determined by the High Court in London - The plaintiffs com­menced pro­ceed­ings in the Federal Court, claiming that s. 46(1) of the Marine Liabil­ity Act granted the court jurisdiction to hear the claim - The defendants argued that s. 46(1) was redundant if it was not interpreted as removing the Federal Court's discretion to grant a stay on the ground that it was not the more convenient forum - The Federal Court of Appeal rejected the argument - First, s. 46(1) affirmed the court's jurisdic­tion by specifying that claimants who satis­fy one of the three connecting factors set out in paragraphs (a), (b), and (c) could pursue their claim in Canada, despite a contractual foreign ex­clusive jurisdiction clause - Second, the statutory bases of jur­isdiction were simpler to apply than the com­mon law's "real and substantial con­nec­tion" test for determining whether the court had jurisdiction over a claim and, ar­guably, more easily satisfied - Third, it removed the court's discretion to stay solely on the ground that the parties had selected an exclusive forum outside Canada - See paragraphs 35 and 36.

Courts - Topic 4033.3

Federal Court of Canada - Jurisdiction - Trial Division - Stay of proceedings - Con­tractual agreement to submit dispute to foreign jurisdiction - The Federal Court of Appeal discussed the interpretation and ap­plicability of s. 46(1) of the Marine Liabil­ity Act - See paragraphs 56 and 66.

Shipping and Navigation - Topic 1950

Carriage of goods - Bills of lading - Forum selection clauses - [See first Courts - Topic 4033.3 ].

Cases Noticed:

Jian Sheng Co. v. Great Tempo S.A. et al., [1998] 3 F.C. 418; 225 N.R. 140 (F.C.A.), refd to. [para. 20].

Pompey (Z.I.) Industrie et al. v. Ecu-Line N.V. et al., [2003] 1 S.C.R. 450; 303 N.R. 201; 2003 SCC 27, refd to. [para. 32].

Incremona-Salerno Marmi Affini Siciliani (I.S.M.A.S.) s.n.c. et al. v. Ship Castor et al., [2003] 3 F.C. 220; 297 N.R. 151; 2002 FCA 479, refd to. [para. 34].

Ford Aquitaine Industries SAS et al. v. Ship Canmar Pride et al., [2005] 4 F.C.R. 441; 271 F.T.R. 224; 2005 FC 431, refd to. [para. 37].

Amchem Products Inc. et al. v. Workers' Compensation Board (B.C.), [1993] 1 S.C.R. 897; 150 N.R. 321; 23 B.C.A.C. 1; 39 W.A.C. 1, refd to. [para. 54].

Vimar Seguros y Reaseguros S.A. v. M/V Sky Reefer (1995), 515 U.S. 528 (S.C.), refd to. [para. 76].

Westec Aerospace Inc. v. Raytheon Air­craft Co. (1999), 122 B.C.A.C. 18; 200 W.A.C. 18; 173 D.L.R.(4th) 498 (C.A.), refd to. [para. 82].

Dongnam Oil & Fats Co. v. Chemex Ltd. et al. (2004), 264 F.T.R. 264; 2004 FC 1732, refd to. [para. 85].

Spar Aerospace Ltd. v. American Mobile Satellite Corp. et al., [2002] 4 S.C.R. 205; 297 N.R. 83; 2002 SCC 78, refd to. [para. 92].

Statutes Noticed:

Marine Liability Act, S.C. 2001, c. 6, sect. 46(1) [para. 2].

Authors and Works Noticed:

Canada, Hansard, House of Commons Debates, No. 058, 1st Sess., 37th Parlia­ment (May 9, 2001), p. 1645 [para. 59].

Canada, House of Commons, Evidence of the Standing Com­mittee on Transport and Government Operations (March 27, 2001), pp. 1140, 1205 [para. 58].

Davies, Martin, Jurisdiction and Forum Selection in International Maritime Law: Essays in Honor of Robert Force (2005), pp. 4 to 8 [para. 76].

Force, Robert, and Davies, Martin, Forum Selection Clauses in International Mari­time Contracts, in Davies, Martin, Juris­diction and Forum Selection in Interna­tional Maritime Law: Essays in Honor of Robert Force (2005), pp. 4 to 8 [para. 76].

Hansard - see Canada, Hansard, House of Commons Debates.

Talpis, Jeffrey A., and Kath, Shelley J., The Exceptional as Com­monplace in Québec Forum Non Conveniens Law (2000), 34 R.J.T. 761, pp. 790 to 794 [para. 91].

Tetley, William, Jurisdiction Clauses and Forum Non Conveniens in the Carriage of Goods by Sea, pp. 24 to 38 [para. 76].

Counsel:

C. William Hourigan, for the appellants;

Marc D. Isaacs, for the respondents.

Solicitors of Record:

Fasken Martineau, Toronto, Ontario, for the appellants;

Strathy & Associates, Toronto, Ontario, for the respondents.

This appeal was heard on June 21, 2006, at Ot­tawa, Ontario, by Décary, Evans and Shar­low, JJ.A., of the Federal Court of Appeal. The following judgment of the Court of Ap­peal was delivered by Evans, J.A., on Au­gust 23, 2006.