Miida Electronics Inc. v. Mitsui O.S.K. Lines Ltd. and ITO-International Terminal Operators Ltd., (1986) 68 N.R. 241 (SCC)

• Judge: Dickson, C.J.C., Beetz, Estey, McIntyre, Chouinard, Lamer and Wilson, JJ.
• Court: Supreme Court (Canada)
• Case Date: June 26, 1986
• Jurisdiction: Canada (Federal)
• Citations: (1986), 68 N.R. 241 (SCC);34 BLR 251;68 NR 241;1986 CanLII 91 (SCC);[1986] ACS no 38;[1986] CarswellNat 14;[1986] SCJ No 38 (QL);28 DLR (4th) 641;[1986] 1 SCR 752

Miida Electronics v. Mitsui OSK Lines (1986), 68 N.R. 241 (SCC)

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Ito-International Terminal Operators Ltd. v. Miida Electronics Inc. and Mitsui O.S.K. Lines Ltd.

(16674)

Indexed As: Miida Electronics Inc. v. Mitsui O.S.K. Lines Ltd. and ITO-International Terminal Operators Ltd.

Supreme Court of Canada

Dickson, C.J.C., Beetz, Estey, McIntyre, Chouinard, Lamer and Wilson, JJ.

June 26, 1986.

Summary:

Miida was the owner and consignee of 250 cartons of calculators shipped by marine carrier (Mitsui) from Japan to Montreal. ITO, a stevedore and terminal operator, unloaded and temporarily stored the goods until Miida took delivery. During storage 169 cartons were stolen because of lax security. Miida sued Mitsui and ITO for the value of the stolen calculators ($26,656.37).

The Federal Court of Canada, Trial Division, dismissed the action. Miida appealed.

The Federal Court of Appeal, in a judgment reported, [1982] 1 F.C. 406; 37 N.R. 396, allowed the appeal in part. The court (Pratte, J., dissenting) allowed the appeal against ITO and held ITO liable for the loss. The court (Le Dain, J., dissenting) affirmed that Mitsui was not liable. Miida appealed the finding that Mitsui was not liable. ITO appealed the finding that it was liable.

The Supreme Court of Canada dismissed Miida's appeal and allowed ITO's appeal, holding that neither party was liable for the loss. The court held that Mitsui's liability was excluded by an exemption clause in the bill of lading and that the Himalaya clause was effective to extend that exemption to ITO.

Courts - Topic 4005

Federal Court of Canada - Jurisdiction - General - The Supreme Court of Canada stated that the essential requirements to support a finding of jurisdiction in the Federal Court were (1) there must be a statutory grant of jurisdiction by the federal Parliament, (2) there must be an existing body of federal law which is essential to the disposition of the case and which nourishes the statutory grant of jurisdiction and (3) the law on which the case is based must be "a law of Canada" as the phrase is used in s. 101 of the Constitution Act, 1867 - See paragraphs 10-24.

Courts - Topic 4026

Federal Court of Canada - Jurisdiction - Trial Division - Maritime or admiralty matters - Section 22(1) of the Federal Court Act gave the Federal Court jurisdiction over "Canadian maritime law" - The Supreme Court of Canada stated that "Canadian maritime law", as defined in s. 2 of the Act, included "all that body of law which was administered in England by the High Court on its admiralty side in 1934 as such law may, from time to time, have been amended by the federal Parliament, and as it has developed through judicial precedent to date"; it also includes an unlimited jurisdiction in relation to maritime and admiralty matters and not just those claims which fit within the historical limits as to what maritime law encompasses - See paragraphs 15-21.

Courts - Topic 4026

Federal Court of Canada - Jurisdiction - Trial Division - Maritime or admiralty matters - The owner of shipped goods sued the carrier and stevedore for the negligent loss of goods by theft - The theft occurred after unloading and while the goods were being temporarily stored awaiting delivery to the owner - The terminal operation was in close proximity to the sea, the stevedore's activity was closely connected with the contract of carriage by sea and storage was short term - The Supreme Court of Canada held that "incidental storage before delivery and before the goods pass from the custody of a terminal operator within the port area is sufficiently linked to the contract of carriage by sea to constitute a maritime matter within the ambit of 'Canadian maritime law'" as defined in s. 2 of the Federal Court Act - The court held that therefore the Federal Court had jurisdiction under s. 22(1) of the Act - See paragraphs 15-21.

Courts - Topic 4026

Federal Court of Canada - Jurisdiction - Trial Division - Maritime or admiralty matters - The Supreme Court of Canada stated that the admiralty law adopted from England as Canadian maritime law encompasses both the specialized rules and principles of admiralty and the rules and principles adopted from the common law and applied in admiralty cases, including the principles of tort, contract and bailment - See paragraphs 22-23.

Courts - Topic 4040

Federal Court of Canada - Jurisdiction - Trial Division - Choice of law - Maritime matters - An action in Quebec against a carrier and stevedore was within the Federal Court's jurisdiction over Canadian maritime law under s. 22(1) of the Federal Court Act - One of the parties submitted that the Quebec civil law, rather than the common law principles of negligence, contract and bailment, should be applied to resolve the action - The Supreme Court of Canada stated that this was not a conflict of laws problem, that although the Federal Court may apply provincial law incidentally necessary to resolve the dispute, reference to the Quebec civil law was unnecessary where the common law principles of negligence, contract and bailment were incorporated into and formed part of the uniform federal law respecting maritime matters - See paragraphs 24-31.

Shipping and Navigation - Topic 2604

Carriage of goods - Liability - Limitations - Himalaya clauses - The Supreme Court of Canada stated that a Himalaya clause was effective to permit a stevedore/terminal operator to claim the same exemptions as are allowed the carrier under a bill of lading if: (1) the bill of lading clearly states that the stevedore is intended to be protected, (2) it is clear that the carrier is contracting not only on his own behalf but as agent for the stevedor, (3) the carrier has authority to act as agent and (4) any difficulties concerning lack of consideration are overcome - See paragraphs 33-38.

Shipping and Navigation - Topic 2605

Carriage of goods - Liability - Limitations - Negligence - The Supreme Court of Canada discussed the test to determine whether an exemption clause in a bill of lading excluded liability for negligence - The court stated that if negligence was expressly exempted there was no liability; if negligence was not expressly exempted then you look at whether the words used are wide enough to cover negligence; if the words are wide enough and the only possible head of damages is negligence the parties must have intended the clause to exclude liability for negligence, and if negligence is not the only available head of damages, the clause will generally be construed as not excluding liability for negligence - See paragraphs 44-46.

Shipping and Navigation - Topic 7468

Terminals - Liability of terminal operator - Bailment - Exclusionary clauses - A stevedore was negligent in the loss of shipped goods by theft - A Himalaya clause gave the stevedore the same exemptions from liability applicable to the carrier under the bill of lading - The exemption clause did not expressly exclude liability for negligence, but the words used were wide enough to achieve that result - The only basis of liability on the part of the stevedore would be negligence - The Supreme Court of Canada held that the clause excluded the stevedore from liability for negligence, because the contracting parties must have intended the clause to exclude liability for negligence - See paragraphs 4448.

Words and Phrases

Canadian maritime law - The Supreme Court of Canada defined "Canadian maritime law", as found in s. 2 of the Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10 - See paragraphs 15-21.

Cases Noticed:

Domestic Converters Corp. et al. v. Arctic Steamship Line et al., [1984] 1 F.C. 211, refd to. [para. 7].

Quebec North Shore Paper v. Canadian Pacific Ltd., [1977] 2 S.C.R. 1054; 9 N.R. 471, appld. [para. 10].

Government of Canada v. McNamara Construction (Western) Ltd. et al., [1977] 2 S.C.R. 654; 13 N.R. 181, appld. [para. 10].

R. v. Canadian Vickers Ltd. and Canadian General Electric Co. Ltd., [1978] 2 F.C. 675, refd to. [para. 11].

Tropwood A.G. et al. v. Sivaco Wire & Nail Company, [1979] 2 S.C.R. 157; 26 N.R. 313, appld. [para. 11].

The Yuri Maru, The Woron, [1927] A.C. 906, refd to. [para. 15].

MacMillan Bloedel Ltd. v. Canadian Stevedoring Co. Ltd., [1969] 2 Ex. C.R. 375, refd to. [para. 16].

Toronto Harbour Commissioners v. The Ship Robert C. Norton, [1964] Ex. C.R. 498, refd to. [para. 16].

De Lovio v. Boit & others (1815), 2 Gall. 398, refd to. [para. 18].

Reference re Validity and Applicability of the Industrial Relations and Dispute Investigations Act, [1955] S.C.R. 529, refd to. [para. 20].

The Ship "Cuba" v. McMillan and Others (1895), 26 S.C.R. 651, refd to. [para. 22].

The Winkfield, [1902] P. 42 (C.A.), refd to. [para. 22].

Wire Rope Industries of Canada (1966) Ltd. v. B.C. Marine Shipbuilders et al., [1981] 1 S.C.R. 363; 35 N.R. 288, refd to. [para. 22].

Associated Metals and Minerals Corporation et al. v. Ship Evie W. Aris Steamship Co. Inc. and Worldwide Carriers Ltd., [1978] 2 F.C. 710; 20 N.R. 50 (F.C.A.), refd to. [para. 26].

National Gypsum Company Inc. v. Northern Sales Limited, [1964] S.C.R. 144, refd to. [para. 27].

Kellogg Company v. Kellogg, [1941] S.C.R. 242, refd to. [para. 29].

Midland Silicones Ltd. v. Scruttons, [1962] A.C. 446, appld. [para. 34].

Canadian General Electric Co. v. Pickford & Black Ltd., [1971] S.C.R. 41, refd to. [para. 34].

Greenwood Shopping Plaza Ltd. v. Pettipas, [1980] 2 S.C.R. 228; 32 N.R. 163, refd to. [para. 34].

New Zealand Shipping Co. Ltd. v. A.M. Satterthwaite & Co. Ltd. (The Eurymedon), [1975] A.C. 154, folld. [para. 35].

Salmond and Spraggon (Australia) Pty. Ltd. v. Port Jackson Stevedoring Pty. Ltd. ("The New York Star"), [1980] 2 Ll. Law Rep. 317, refd to. [para. 35].

Canada Steampship Lines Ltd. v. The King, [1952] A.C. 192, refd to. [para. 44].

Alderslade v. Hendon Laundry Ltd., [1945] K.B. 189 (A.C.), appld. [para. 44].

Gillespie Brothers & Co. Ltd. v. Roy Bowles Transport Ltd et al., [1973] 1 All E.R. 193 (C.A.), refd to. [para. 44].

Hollier v. Rambler Motors (AMC) Ltd., [1972] 1 All E.R. 399 (C.A.), refd to. [para. 44].

Rutter v. Palmer, [1922] 2 K.B. 87 (C.A.), refd to. [para. 44].

Smith et al. v. South Wales Switchgear Ltd., [1978] 1 All E.R. 18 (H. L.), refd to. [para. 44].

Lamport & Holt Lines Ltd v. Coubre & Scrutten (M. & I.) Ltd., (The "Raphael"), [1982] 2 Ll. Law Rep. 42, appld. [para. 45].

Statutes Noticed:

Bills of Lading Act, R.S.C. 1970, c. B-6, sect. 2 [para. 42].

Constitution Act, 1867, sect. 91(10), sect. 101 [para. 23]; sect. 129 [para. 26].

Canadian Admiralty Act, S.C. 1891, c. 29, sect. 4 [para. 8].

Admiralty Act, S.C. 1934, c. 31, sect. 18(2), sect. 18(3) [para. 15].

Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, sect. 2 [para. 12]; sect. 22(1) [para. 13]; sect. 22(2)(h), sect. 22(2)(i) [para. 17]; sect. 42 [para. 26].

Authors and Works Noticed:

Mayers, E., Admiralty Law and Practice in Canada (1916), p. 146 [para. 22].

Castel, J.G., Canadian Conflict of Laws (2nd Ed.), p. 4 [para. 25].

Dawson, F., Himalaya Clauses, Consideration and Privity of Contract (1975), 6 N.Z.U.L.R. 161 [para. 33].

Waddams, S., Comment (1977), 55 Can. Bar Rev. 327 [para. 33].

Tetley, Marine Cargo Claims, "The Himalaya Clause - Heresy or Genius?" (2nd Ed. 1978), c. 33 [para. 33].

Clarke, P., The Reception of "The Eurymedon" Decision in Australia, Canada and New Zealand (1980), 29 Int'l. and Comp. L.Q. 132 [para. 33].

Tedeschi, M., Consideration, Privity and Exemption clauses; Port Jackson Stevedoring Pty. Ltd. v. Salmond and Spraggon (Australia Pty. Ltd.) (1981), 55 A.L.J. 876, generally [para. 33]; p. 878 [para. 39].

Carver, Carriage by Sea (1982), pp. 410 [para. 37]; 1565 [para. 46].

Counsel:

David Marler and J. Kenrick Sproule, for ITO-International Terminal Operators Ltd;

Marc Nadon, for Miida Electronics Inc.;

Trevor Bishop and Robert Cypihot, for Mitsui O.S.K. Lines Ltd.

This appeal was heard on October 2 and 3, 1984, before Dickson, C.J.C., Beetz, Estey, McIntyre, Chouinard, Lamer and Wilson, JJ., of the Supreme Court of Canada.

On June 26, 1986, the judgment of the Supreme Court of Canada was delivered and the following opinions were filed:

McIntyre, J. (Dickson, C.J.C., Estey and Wilson, JJ., concurring) - see paragraphs 1-49;

Chouinard, J., (Beetz and Lamer, JJ., concurring) - see paragraphs 50-51.