Nestlé Canada Inc. et al. v. Ship Viljandi et al., (2002) 230 F.T.R. 99 (TD)

• Court: Federal Court (Canada)
• Case Date: Monday August 26, 2002
• Jurisdiction: Canada (Federal)
• Citations: (2002), 230 F.T.R. 99 (TD)

Nestlé Can. Inc. v. Ship Viljandi (2002), 230 F.T.R. 99 (TD)

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[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2002] F.T.R. TBEd. OC.027

Action in rem contre M.V. "Viljandi", Tropical Shipping of Canada Inc., Tropical Shipping & Construction Co. Ltd., Tropical Shipping International Ltd., MOS Shipping Ltd. et CIS Navigation Inc.

Nestlé Canada Inc. et Nestlé Puerto Rico Inc. (demanderesses) v. The Vessel "Viljandi" et Tropical Shipping of Canada Inc. et Tropical Shipping & Construction Co. Ltd. et Tropical Shipping International Ltd. et MOS Shipping Ltd. care of Estonian Shipping et CIS Navigation Inc. et International Shipping Agency Inc. (défenderesses)

(T-49-02; 2002 CFPI 987; 2002 FCT 987)

Indexed As: Nestlé Canada Inc. et al. v. Ship Viljandi et al.

Federal Court of Canada

Trial Division

Morneau, Prothonotary

September 19, 2002.

Summary:

Nestlé et al. sued the defendants for damages following the destruction in Puerto Rico of a cargo of evaporated milk that had been shipped from Canada. Certain defendants sought a stay based on a jurisdiction clause in a bill of lading in favour of the New York courts.

A Prothonotary of the Federal Court of Canada, Trial Division, dismissed the motion. The Prothonotary held that Nestlé was bound by the clause and there were insufficient reasons to deny its operation on the basis of the Ship Eleftheria test. However, s. 46 of the Marine Liability Act applied to permit Nestlé to prosecute its action in the Federal Court of Canada.

Agency - Topic 1046

Authority of agent - Express authority - General - Limitations on powers of agent - Nestlé contracted with Tropical for the shipment of cargo - Tropical issued a bill of lading which provided that if it was not the owner or demise charterer of the ship, the bill of lading would take effect only as a contract with the owner or demise charterer and Tropical would be an agent only - Tropical was neither the owner nor demise charterer of the ship indicated on the bill of lading - Tropical signed a bill of lading with MOS, the charterer of the ship - This second bill of lading, unlike the first, contained a jurisdiction clause - A Prothonotary of the Federal Court of Canada, Trial Division, held that Nestlé was bound by the jurisdiction clause - Nestlé could not repudiate the clause where it had relied on it in its statement of claim - Further, Nestlé had not, in the first bill of lading, limited Tropical from going beyond it - Finally, even if Tropical exceeded the terms of its mandate, MOS could rely on Tropical's apparent mandate - See paragraphs 12 to 19.

Agency - Topic 1407

Authority of agent - Apparent authority - Reliance by person dealing with agent - [See Agency - Topic 1046].

Conflict of Laws - Topic 7286

Contracts - Jurisdiction - Choice of forum by parties - Nestlé sued the defendants for damages following the destruction in Puerto Rico of cargo shipped from Canada - Certain defendants sought a stay based on a jurisdiction clause in a bill of lading in favour of the New York courts - A Prothonotary of the Federal Court of Canada, Trial Division, held that while Nestlé was bound by the jurisdiction clause and there were insufficient reasons to deny its operation on the basis of the Ship Eleftheria test - See paragraphs 28 to 40.

Practice - Topic 1307

Pleadings - General principles - Alternative or inconsistent pleadings - [See Agency - Topic 1046].

Shipping and Navigation - Topic 1946

Carriage of goods - Bills of lading - When applicable - [See Agency - Topic 1046].

Statutes - Topic 6703

Operation and effect - Commencement, duration and repeal - Retrospective and retroactive enactments - What constitutes retrospective or retroactive operation - Nestlé sued the defendants for damages following the destruction in Puerto Rico of cargo shipped from Canada - Certain defendants sought a stay based on a jurisdiction clause in a bill of lading in favour of the New York courts - A Prothonotary of the Federal Court of Canada, Trial Division, held that while Nestlé was bound by the clause, s. 46 of the Marine Liability Act applied to permit it to prosecute its action in the Federal Court of Canada, even though the incidents that gave rise to the statement of claim all took place before the Act came into effect - Where the hearing of a motion to stay took place after the Act came into effect, s. 46 applied without retrospective application of the Act - See paragraphs 20 to 24.

Cases Noticed:

Incremona-Salerno Marmi Affini Siciliani (I.S.M.A.S.) s.n.c. et al. v. Ship Castor et al. (2001), 213 F.T.R. 308 (T.D.), folld. [para. 11].

Ship Eleftheria, Re, [1969] 1 Lloyd's L.R. 237, appld. [para. 11].

Pompey (Z.I.) Industrie et al. v. Ecu-Line N.V. et al. (2001), 268 N.R. 364 (F.C.A.), refd to. [para. 28].

Atlantic Cement Carriers Ltd. v. Atlantic Towing Ltd. et al. (2002), 222 F.T.R. 215 (T.D.), refd to. [para. 29].

Can-Am Produce and Trading Ltd. v. Ship Senator et al. (1996), 112 F.T.R. 255 (T.D. Protho.), refd to. [para. 40].

Statutes Noticed:

Marine Liability Act, S.C. 2001, c. 6, sect. 46(1) [para. 20].

Counsel:

Laurent Fortier, for the plaintiffs;

Danièle Dion, for the defendants, Tropical;

P. Jeremy Bolger, for the defendants, MOS Shipping Ltd. and CIS Navigation Inc.

Solicitors of Record:

Stikeman, Elliott, Montreal, Quebec, for the plaintiffs;

Brisset Bishop, Montreal, Quebec, for the defendants, Tropical;

Borden Ladner Gervais, Montreal, Quebec, for the defendants, MOS Shipping Ltd. and CIS Navigation Inc.

This motion was heard at Montreal, Quebec, on August 26, 2002, by Morneau, Prothonotary, of the Federal Court of Canada, Trial Division, who delivered the following decision on September 19, 2002.