MULTI-MODAL TRANSPORT AND THE JURISDICTION OF THE FEDERAL COURT OF CANADA
Wylie Spicer QC
IIclKns COOPER An Atlantic Canadian Law Finn
April 28 2000
2 Jurisdiction amp Multi-modal Transport lIelllRBe COOPER
MULTI-MODAL TRANSPORT AND THE JURISDICTION OF THE FEDERAL COURT OF CANADA
WYLIE SPICER QCI
INTRODUCTION
A manufactures widgets in Sydney Australia B sells widgets in Aulae New Brunswick
B decides to purchase its widgets from A to sell in New Brunswick B says to A I will pay you
for the widgets when they are delivered to me in Aulac A then contracts with C to have the
widgets shipped from Sydney to Aulae New Brunswick C then makes arrangements for
shipment including truck transportation ship transportation and rail transportation
To begin the shipment C picks up the widgets and loads them into C-truck As a result
of the unexpected volume of widgets the C-truck collides with an overpass but is able to
continue and delivers the widgets to D who loads them onto D-ship in Sydney and begins the
voyage from Australia to the Port in Halifax Nova Scotia A leak in the hold of D-ship allows
water to enter the containers ofwidgets but that water has drained out and dried up when D-ship
reaches the Port in Halifax E-terminal operator then unloads D-ship but inadvertently drops
one of the containers of widgets The widgets are stored in E-shed until F arrives to load them
onto its railcar During the voyage F-train goes off its track but is eventually able to continue
its voyage to Aulac New Brunswick B arrives at the station in Aulac to pick up the widgets but
discovers upon examination that all of the widgets are damaged and unsaleable B does not pay
A for the widgets
Does the Federal Court of Canada have jurisdiction over As claims resulting from this
scenario or are those claims outside Federal Court jurisdiction
Following the decision of the Supreme Court of Canada in ITO-International Terminal
Operators Ltd v Miida Electronics Inc et a12 (ITO) the Federal Court of Canada has had to
re-
Wylie Spicer QC practices Maritime Law as a partner in the Halifax office of Mcinnes Cooper an Atlantic Canadian law firm
(1986)28 DLR 4th 641 2
3 Jurisdiction amp Multi-modal Transport 11101bullbullbull8 COOPER
examine its jur
isdiction in relation to claims arising out of multi-modal transportation The above scenario
while not likely to occur illustrates the problems created by these issues In particular to
resolve this issue the Court must consider federal legislation specifically the Federal Court Act
in light of the division ofpowers between Parliament and provincial legislatures as defined in the
Constitution Act 1867
ITOvMIIDA
The ITO case is the standard against which the Federal Court determines whether it may
exercise jQrisdiction in claims arising out ofmulti-modal transportation
Unlike the example used above the facts in ITO were not unusual A bill of lading
evidenced a contract between the defendant Mitsui and the plaintiff Miida for the shipment of
250 cartons of electronic calculators from Japan to Montreal Mitsui was a marine carrier and
made arrangements with ITO a cargo-handling company to unload and store the calculators in
its warehouse at the Montreal docks until delivery could be made to Miida While the goods
were being stored by ITO 169 of the cartons were stolen Miida sued both ITO and Mitsui
At trial Marceau J held that the Federal Court had jurisdiction over the claim against
ITO as a result of the close link between that contract and the contract for the carriage of goods
by sea between Miida and Mitsui In particular Justice Marceau held that Miida knew that a
stevedore would be involved to unload the cargo and Miida expected to receive that benefit
under its contract with Mitsui
The majority of the Court of Appeal agreed Justice Le Dain for the majority held that
the close relationship between the work performed by ITO and the contract for the carriage of
goods by sea was enough to bring the claim within the jurisdiction of the Federal Court pursuant
to its power to adjudicate matters of maritime law as defmed in s 2 of the Federal Court Act In
dissent Justice Pratte stated that earlier decisions of the Court required a finding of no
jurisdiction Pratte J held that this claim was solely a claim in delict or tort and thus was not
within the jurisdiction of the Federal Court
The Supreme Court of Canada agreed with the lower court decisions holding that the
Federal Court did have jurisdiction over Miidas claim against ITO Speaking for the majority
Justice McIntyre referred to earlier decisions of the Supreme Court of Canada for the test to be
Jurisdiction amp Multi-modal Transport 4 JIIclBS COOPBR
applied in detennining whether the Court had jurisdiction According to Justice McIntyre
earlier decisions from the Supreme Court ofCanada3 established three essential requirements for
a fmding ofjurisdiction Justice McIntyre lists those requirements as follows
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 ofjurisdiction
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 18674
1 Statutory Grant ofJurisdiction by Parliament
In this case Justice McIntyre held that s 22(1) of the Federal Court Act met the first
requirement Section 22(1) then stated
22(1) The Trial Division has concurrent original jurisdiction as well between subject and subject as otherwise in all cases in which a claim for relief is made or a remedy is sought under or by virtue of Canadian Maritime law or any other law of Canada relating to any other matter coming within the class of subject of navigation and shipping except to the extent that jurisdiction has been otherwise specially assigned
2 Existing body ofFederal Law essential to the disposition
To meet the second requirement it was necessary to consider whether there was a law of
Canada in relation to navigation and shipping which was essential to the disposition of this case
In that regard McIntyre J held that the defmition of maritime law in s 2 of the Federal Court
Act encompassed 2 categories5
3 Quebec North Shore Paper Co v Canadian Pacific Ltd (1976) 71 DLR (3d) 111 and McNamara Construction (Western) Ltd v The Queen (1977) 75 DLR (3d) 273 4 p650 5 See p652
5 Jurisdiction amp Multi-modal Transport McINNES COOPER
(1) The law administered by the Exchequer Court of Canada by virtue of the Admiralty Act or any other statute and
(2) Law that would have been administered by the Exchequer Court of Canada if it had exercised unlimited jurisdiction in relation to maritime and admiralty matters
McIntyre J concluded that the first category includes law administered by the High Court
of England on its Admiralty side in 1934 as that law has developed and been amended by both
cases and Parliament In considering whether the claim against ITO fell within the law in
category 1 McIntyre J stated that the claim did not arise from the contract of carriage between
Miida and Mitsui since ITO was not bound to perform any obligations under that bill of
lading6 The decision also points out that s 22(2) of the Federal Court Act could not assist the
Court since the claim against ITO could not fall within any of the specific categories listed in
that subsection As a result the first category of Maritime Law in s 2 did not encompass
Miidas claim against ITO
With respect to the second category ofmaritime law McIntyre J stated
In my view the second part of the s 2 definition of Canadian maritime law was adopted for the purpose of assuring that Canadian maritime law would include an unlimited jurisdiction in relation to maritime and admiralty matters The words maritime and admiralty should be interpreted within the modern context of commerce and shipping In reality the ambit of Canadian maritime law is limited only by the constitutional division of powers in the Constitution Act 1867 I am aware in arriving at this conclusion that a court in determining whether or not any particular case involves a maritime or admiralty matter must avoid encroachment on what is in pith and substance a matter of local concern involving property and civil rights or any other matter which is in essence within exclusive provincial jurisdiction under s 92 of the Constitution Act 1867 It is important therefore to establish that a subject matter under consideration in any case is so integrally connected to maritime matters as to be legitimate maritime law within federal legislative competence7
6 p654 7 pp 656-657
6 Jurisdiction amp Multi-modal Transport IIclES COOPER
Justice McIntyre then refers to an earlier decision of the Supreme Court ofCanada8 which held
that stevedoring was an integral part of shipping On this issue the majority of the Court in ITO
concluded as follows
cargo handling and incidental storage before delivery within the port area is sufficiently linked to the contract ofcarriage by sea to constitute a maritime matter within the ambit of Canadian maritime law9
According to McIntyre J there were three key factors dictating this result (1) the
terminal was within the port of Montreal (2) the connection between the terminal operators
activities within the port and the contract of carriage and (3) the storage in this case was shortmiddot
term pending ftnal delivery to Miida10 Since common law principles ofnegligence and contract
law had been employed in earlier admiralty cases there was a sufficient body of federal law
essential to the disposition ofthe case
3 The law in 2 is a law of Canada as defined in s 101 of the Constitution Act
1867
Canadian maritime law comes within federal powers over navigation and shipping as set
out in s 91(10) of the Constitution Act 1867 thus the third requirement for a ftnding of
jurisdiction was met in ITO
In a short dissenting judgment Chouinard J held simply that a claim for negligence
arising from the storage of goods in a warehouse fell only within the jurisdiction of the province
and thus was outside the jurisdiction of the Federal Court
The majority decision in ITO overruled earlier case law on those issues I I
8 Reference re Industrial Relations and Disputes Investigation Act etc [1955] 3 DLR 721 9 p657 10 See p 657 II See eg Robert Simpson Montreal Ltd v HamburgmiddotAmerika Linie Norddeutscher [1973] FC 304 (TD) where Walsh J dismissed a third party claim against a warehouseman unloading cargo for lack ofjurisdiction although the main action involved a claim for damaged cargo Sumitomo Shoji Canada Ltd v The Juzan Maru (1974) 49 DLR (3d) 277 (TD) Where Dollier J dismissed the plaintiffs claim against the terminal operators following receipt of damaged cargo Domestic Converters Corp v Arctic Steamship Line [1984] 1 Fe 211 where
7 Jurisdiction amp Multi-modal Transport MelbullbullSS coopsa
LeDain J speaking for the majority of the Court of Appeal stated that a finding ofjurisdiction over a tort committed on land would be against tradition
Jurisdiction amp Multi-modal Transport 8 McIlIlIBS COOPBR
OTHER CASE LAW
In determining jurisdictional issues today the Federal Court also has the benefit of
Iacobucci Js interpretation of ITO in Monk Corp v Island Fertilizers Ltd)2 The claims in the
Monk case arose out of a contract for the sale of fertilizer to be supplied by ship Monk had three
separate claims for damages 1) a claim related to excess product delivered 2) a demurrage
claim due to problems in unloading and 3) a claim for the cost of renting shore cranes to unload
the fertilizer
Iacobucci J speaking for the majority explained the findings in ITO as follows
Reduced to their essentials for purposes of this appeal the reasoning and conclusions ofMcIntyre J were as follows
(1) The second part of the s2 definition of Canadian maritime law provides an unlimited jurisdiction in relation to maritime and admiralty matters which should not be historically confined or frozen and maritime and admiralty should be interpreted within the modem context of commerce and shipping
(2) Canadian maritime law is limited only by the constitutional division of powers in the Constitution Act 1867 such that in determining whether or not any particular case involves a maritime or admiralty matter encroachment on what is in pith and substance a matter falling within Section 92 of the Constitution Act is to be avoided
(3) The test for determining whether the subject matter under consideration is within maritime law requires a finding that the subject matter is so integrally connected to maritime matters as to be legitimate Canadian maritime law within federal competence
(4) The connecting factors with maritime law were the proximity of the terminal operation to the Port of Montreal the connection between the terminal operator in activities within the port area and the contract of carriage by sea and the fact that the storage in issue in the case was short term pending final delivery to the consignee Miida I3
12 (1991) 80 DLR (4th) 58 (SCC) I3 p91
9 Jurisdiction amp Multi-modal Transport McINNES COOPER
Applying these standards Justice Iacobucci held that all three claims against Island
Fertilizers fell within the jurisdiction of the Federal Court In particular Iacobucci J noted that
the claim for excess product delivered related directly to Island Fertilizers obligation to
discharge cargo from the ship Similarly the claim for demurrage was directly related to the
discharge of cargo Finally the use of shore cranes was closely connected with maritime matters
because it resulted from the lack of equipment on the ship to discharge the cargo without aid
Since the discharge of cargo is clearly a maritime matter a failure to discharge cargo is also a
maritime matter
In conclusion Justice Iacobucci states simply What is important for purposes of
maritime law jurisdiction is that their claim be integrally connected with maritime matters14
For comparison purposes the decisions in SIO Export Trading Co v The Dart Europe15
and United Tires amp Rubber Co v Transco Shipping Inc 16 illustrate the difference between cases
decided prior to ITO and those decided after that decision
In the SIO Export case the goods had been transported inland from the ship for repacking
and were damaged in a traffic accident occurring on the way back to the ship Justice Dube held
that transportation within the province was not a traditional maritime activity The fact that the
truck was returning cargo to a ship could not bring the matter within the subject of navigation
and shipping thus the Court had no jurisdiction to hear the claim
In the United Tires case Richard J considered a similar action The plaintiff contracted
for the shipment of two containers of tires from Ontario to Cuba but the tires were stolen from a
storage area in Montreal before they could be placed on the ship The plaintiff sued inter alia
the owner of the yard from which the tires had been stolen Contrary to the decision in the Sio
Export case Justice Richard held that the Federal Court had jurisdiction over the claims against
both defendants because the contract entered into by the plaintiff was essentially a contract for
the carriage of goods by sea Without reference to ITO Richard J held that the Court could
exercise jurisdiction because of a through bill of lading evidencing the plaintiffs contract The
fact that the other party to the bill of lading arranged for transport to Montreal by truck for the
14 p95 15 (1983) 144 DLR (3d) 182 (Fe TD) 16 (1994) 88 FTR 12
Jurisdiction amp Multi-modal Transport 10 MelllllBS COOPBR
goods to be loaded on the vessel was not enough oust the jurisdiction of the Federal Court
Richard 1 particularly considered s 22(2)(f) of the Federal Court Act Section 22(2)(f) states
22(2)(f) any claim arising out of an agreement relating to the carriage of goods on a ship under a through bill of lading or in respect of which a through bill of lading is intended to be issued for loss or damage to goods occurring at any time or place during transit
The Court held that this subsection was enough for the exercise of jurisdiction over the claim
against the defendant trucking company
Another case addressing s 22 (2)(f) is Watt amp Scott Inc v Chantry Shipping SA17 In
that case the plaintiff purchased nuts to be shipped from Brazil to Manitoba The cargo left
Brazil on a ship but was loaded onto a train owned by the defendant in Alabama When the nuts
arrived in Manitoba they had become infected and had to be sold at a discount Joyal J held that
the Court had jurisdiction over both the claim against the shipowner and the claim against the
railway company ITO was considered but the case was decided on other grounds Initially the
Court focussed on whether there was a through bill of lading as described in Section 22(2)(f)
of the Federal Court Act Justice Joyal however held that the facts before the Court were
insufficient to make that determination As a result Joyal J turned to the decision of the
Supreme Court of Canada in ITO stating
The Supreme Courts reasoning nevertheless did extend the field of maritime law to stevedoring duties and responsibilities on the indicia of their proximity of their close relationship to the contract of carriage and of their short duration Quaere whether these tests may be applied with respect to Burlington Northerns carriage of the goods from Mobile to WinnipegI8
Joyal J again refuses to decide the case on that ground leaving the issue open and
focussing instead on s 23 of the Federal Court Act which reads
23 Bills of Exchange and Promissory Notes Aeronautics and Inter- Provincial Works and Undertakings - except to the extent that jurisdiction has been otherwise specially assigned the Trial Division has concurrent original jurisdiction between subject and subject as well as otherwise in all cases for which a claim for
17 [1988] 1 FC 537 (TD) 18 p546
Jurisdiction amp Multi-modal Transport 11 MclRRES COOPER
relief is made or a remedy is sought under an act of parliament or otherwise in relation to any matter coming within any of the following classes of subjects namely
(a) bills of exchange and promissory notes where the Crown is a party to the proceedings
(b) aeronautics and
(c) works and undertakings connecting a province with any other province or extending beyond the limits of a prOVInce
Joyal J applied the ITO test requiring 3 pre-requisites to a finding of jurisdiction To meet the
first requirement of a statutory grant ofjurisdiction Joyal J focussed not on the s 22 jurisdiction
over maritime matters generally but on whether the business of the railway company brought it
within the language of s 23 Joyal J held that the railway company was an undertaking
extending beyond the limits of Manitoba into Alabama bringing it within s 23( c) In meeting
the final two requirements (an existing body of federal law a law as defined in s 101 of the
Constitution Act 1867) s 262 of the Railway Act imposing a duty of due diligence on railway
companies was sufficient to meet both the second and third pre-requisite and was held to apply
in this case
Not limiting his analysis to ITO Joyal J went back to the basics of federal legislation In
this manner the decision looks at the roots of jurisdictional issues to see whether specific
legislation enacted by Parliament existed to deal with the issue This analysis avoided any
consideration of whether the claim against the railway was integrally connected to maritime
matters While this situation will not arise in all cases certainly many trucking and railway
companies extend beyond the limits of a province and may fall within s 23 Perhaps Joyal J
got it right by attempting to focus on federal legislation for a finding of jurisdiction instead of
relying solely on the integral connection standard from ITO
Marley Co v Cast North America (J 983) Inc 19 involved a similar action against a
defendant railroad The plaintiff contracted for the carriage of goods from Illinois to Holland
The carriers under that contract contracted with the defendant railway company to carry the
goods to Montreal for shipment by sea The railway company attempted to produce evidence
showing that it would not have carried the container to Montreal by itself but would have
19 (1995)94 FTR 45
Jurisdiction amp Multi-modal Transport 12 1101111188 COOP8R
retained another carrier This fact of course would not allow the Court to exercise jurisdiction
under s 23 of the Federal Court Act In determining whether the Court had jurisdiction Nadon
J examined s 22 of the Federal Court Act Nadon J distinguished this case from others by
stating that the defendant railway company had not been a party to any contract of carriage with
the plaintiffs Instead the railway company had contracted with another defendant only for
shipment by rail The plaintiffs goods here would have eventually been carried by rail ship
and truck Justice Nadon concluded
I am certainly not prepared to accept that a contract to carry goods by rail or by truck in the United States Canada or Europe is within the maritime jurisdiction of this Court simply because they are part of the on-going movement ofa container20
According to the decision the claim against this railway company did not fall within the
jurisdiction of s 22 of the Federal Court Act however there was insufficient evidence to
determine whether the company fell within the language used in s 23 of the Act As a result the
motion for a dismissal of the claim was dismissed The Court refused once again to look solely
at the ITO standard and referred only to federal legislation
In Matsuura Machiner Corp v Hapag Lloyd A G 21 NYK an ocean carrier agreed to
carry cargo under a through bill of lading from Japan to Toronto NYK then contracted with
Melburn for carriage of the cargo by truck to Mississauga where it would be loaded onto a
vessel Upon arrival by truck the goods were found to be damaged The plaintiffs sued both
NYK and Melburn The appellants agreed that the circumstances in ITO were not present in this
case but argued that jurisdiction should be found in s 22(2)(f) and s 23 of the Federal Court
Act Justice Pratte speaking for the Court held that s 22(2)(f) did not apply as the claims
against Melburn did not arise out of an agreement relating to the carriage of goods on a ship
under a through bill oflading as required in that subsection Further s 23 could not apply since
there was no federal law to support the claims made against Melburn
The Supreme Court of Canada almost had a third opportunity to review these issues in
the recent case of Pakistan National Shipping Corp v Canada22bull Leave to appeal was granted
but the appeal was eventually discontinued23 The disputed claim in this case involved a third
20 pp 49-50 21 (1997)211 NR 156 (CA) 22 [1997] 3 FC 601 23 [1997] SCCA No 375 (QL)
13 Jurisdiction amp Multi-modal Transport McINNES COOPER
party claim for negligent misrepresentation in relation to containers used to ship oil by sea The
canola oil in the containers leaked while being carried on the plaintiffs ship causing damage
The defendant shipper claimed indemnification from the container supplier Attempting to apply
ITO the Court of Appeal held that the claim was integrally connected to the maritime
jurisdiction of the Federal Court Stone JA referred to the decisions in both ITO and Monk
then stated
It would thus appear that the root of the claims in the main action for losses incurred by reason of the collapse of the plastic drums in stow during the voyage to Pakistan was the sufficiency of the drums themselves to withstand the conditions experienced by the ship In my view the third party claim is integrally connected to the Courts admiralty and maritime jurisdiction24
The main contract was for the carriage of goods by sea thus the Courts jurisdiction extended to
the alleged tort committed by the supplier of the oil drums
A recent decision on the topic of multi-modal transport is the Court ofAppeal decision in
Garfield Container Transport Inc v Uniroyal Goodrich Canada25 In that case the plaintiff
sued when it was not paid for its services in trucking cargo from Kitchener Ontario to a Port in
New Jersey The defendant had sold the goods in question to a company who then contracted
with a third company for the transportation of the goods The third company did not pay the
plaintiff for its services in relation to that transportation Denault J speaking for the Court
stated that this case was similar to that in Matsuura Machiner The Federal Court had no
jurisdiction over a claim relating only to road transportation of goods
ANALYSIS
Under the law established in ITO there are three pre-requisites to finding jurisdiction
over cases involving multi-modal transportation 1) a statutory grant ofjurisdiction by the federal
Parliament 2) an existing body of federal law essential to the disposition of the case and 3) an
existing body of law which is a law of Canada as defined in s 101 of the Constitution Act
1867
Many of the decisions after ITO have ignored the three-pronged test mandated by ITO
focussing instead on the words integrally connected to maritime law Justice McIntyres
24 p625 25 (1998)229 NR 201
14 Jurisdiction amp Multi-modal Transport MellflfB COOPER
decision did centre on prong 2 of the test but requirements 1 and 3 were easily met in that case
Where the case involves some aspect of maritime law as in ITO the Supreme Court of Canada
has decided that s 22 of the Federal Court Act meets the requirement for a statutory grant of
jurisdiction However where maritime law is not directly involved in the claim (as may have
been the case in both the Matsuura Machiner and the Garfield Container cases) the Court must
look further for a statutory grant of jurisdiction If there is no statutory law there is no
jurisdiction
Where the claim is related to maritime law the Court must then consider whether the
claim falls within either category of maritime law as defined in s 2 of the Federal Court Act If
the defendant and the plaintiff were both parties to a contract of carriage the claim will fall
within the first category of law as exercised by the High Court of England in 1934 on its
Admiralty side Where however one party was not obliged to perfonn any obligation under the
contract for carriage the Court must then consider the second category ofmaritime law
The second category includes unlimited jurisdiction in relation to maritime and admiralty
matters which jurisdiction is pennitted to evolve in the context of modern commerce and
shipping - enter the limits imposed by the division of powers in the Constitution Act 1867 It is
here that the Court must consider whether the claim is integrally connected with maritime
matters
While there is not yet an established rule to detennine which cases will be integrally
connected and which will not ITO and Monk provide helpful guidelines In particular the Court
must consider whether the essence of the claim is a matter that falls within provincial jurisdiction
under s 92 of the Constitution Act 1867 The Court must also consider whether it is the type of
claim traditionally connected with maritime matters (unloading and storage of cargo at a Port as
in ITO) or another federal power In Watt amp Scott Inc v Chantry Shipping for example Joyal
J held that the matter was within federal jurisdiction as a result of both the Railway Act and the
Federal Court Act Considerations of whether a particular claim has an integral connection to
maritime matters involves not only consideration of traditional and modern maritime law but
also consideration of the pith and substance of the matter to detennine whether it was a matter
delegated to the provinces exclusive jurisdiction or a matter over which the federal Parliament
retained jurisdiction Each case should be decided in light of the division of powers in s 91 and
s 92 of the Constitution Act 1867
15 Jurisdiction amp Multi-modal Transport McINNBS COOPBR
The third requirement is that the law in requirement 2 be a law of Canada as defined in
section 101 of the Constitution Act 1867 If the issue under requirement 2 is met there will be
no issue under requirement 3 If the matter is essentially federal in nature then the essential
law will be a law of Canada pursuant to s 101
Coming back to the example used at the outset we are now able to determine whether
As claims fall within the jurisdiction of the Federal Court If A wished to sue B for non~
payment the Federal Court would not have jurisdiction over that claim The arrangement
between B and A was in essence a contract for the sale of goods and thus falls properly within
the jurisdiction of provincial courts and not the Federal Court If however A wished to sue C for
the loss the claim would be within Federal Court jurisdiction A had contracted with C for
shipment of the widgets from Sydney to Aulac New Brunswick The essence of this
arrangement was for the carriage of goods by sea - A needed to transport widgets across the
world to B
Can C then claim indemnity from the various carriers involved C could certainly sue D
for any damage caused during the sea voyage and E for damage occurring during unloading or
storage since that is integrally connected to maritime matters under the ITO standard Could C
also bring an action for indemnity against F F is a railway company extending beyond the
limits ofa province within the meaning of s 23 of the Federal Court Act This brings Cs claim
against F also within the jurisdiction of the Federal Court not because of an integral connection
with maritime matters but because the Court has jurisdiction over the claim separate and apart
from any connection to the contract for the carriage of goods by sea
(2391211)
JCllcc
2 Jurisdiction amp Multi-modal Transport lIelllRBe COOPER
MULTI-MODAL TRANSPORT AND THE JURISDICTION OF THE FEDERAL COURT OF CANADA
WYLIE SPICER QCI
INTRODUCTION
A manufactures widgets in Sydney Australia B sells widgets in Aulae New Brunswick
B decides to purchase its widgets from A to sell in New Brunswick B says to A I will pay you
for the widgets when they are delivered to me in Aulac A then contracts with C to have the
widgets shipped from Sydney to Aulae New Brunswick C then makes arrangements for
shipment including truck transportation ship transportation and rail transportation
To begin the shipment C picks up the widgets and loads them into C-truck As a result
of the unexpected volume of widgets the C-truck collides with an overpass but is able to
continue and delivers the widgets to D who loads them onto D-ship in Sydney and begins the
voyage from Australia to the Port in Halifax Nova Scotia A leak in the hold of D-ship allows
water to enter the containers ofwidgets but that water has drained out and dried up when D-ship
reaches the Port in Halifax E-terminal operator then unloads D-ship but inadvertently drops
one of the containers of widgets The widgets are stored in E-shed until F arrives to load them
onto its railcar During the voyage F-train goes off its track but is eventually able to continue
its voyage to Aulac New Brunswick B arrives at the station in Aulac to pick up the widgets but
discovers upon examination that all of the widgets are damaged and unsaleable B does not pay
A for the widgets
Does the Federal Court of Canada have jurisdiction over As claims resulting from this
scenario or are those claims outside Federal Court jurisdiction
Following the decision of the Supreme Court of Canada in ITO-International Terminal
Operators Ltd v Miida Electronics Inc et a12 (ITO) the Federal Court of Canada has had to
re-
Wylie Spicer QC practices Maritime Law as a partner in the Halifax office of Mcinnes Cooper an Atlantic Canadian law firm
(1986)28 DLR 4th 641 2
3 Jurisdiction amp Multi-modal Transport 11101bullbullbull8 COOPER
examine its jur
isdiction in relation to claims arising out of multi-modal transportation The above scenario
while not likely to occur illustrates the problems created by these issues In particular to
resolve this issue the Court must consider federal legislation specifically the Federal Court Act
in light of the division ofpowers between Parliament and provincial legislatures as defined in the
Constitution Act 1867
ITOvMIIDA
The ITO case is the standard against which the Federal Court determines whether it may
exercise jQrisdiction in claims arising out ofmulti-modal transportation
Unlike the example used above the facts in ITO were not unusual A bill of lading
evidenced a contract between the defendant Mitsui and the plaintiff Miida for the shipment of
250 cartons of electronic calculators from Japan to Montreal Mitsui was a marine carrier and
made arrangements with ITO a cargo-handling company to unload and store the calculators in
its warehouse at the Montreal docks until delivery could be made to Miida While the goods
were being stored by ITO 169 of the cartons were stolen Miida sued both ITO and Mitsui
At trial Marceau J held that the Federal Court had jurisdiction over the claim against
ITO as a result of the close link between that contract and the contract for the carriage of goods
by sea between Miida and Mitsui In particular Justice Marceau held that Miida knew that a
stevedore would be involved to unload the cargo and Miida expected to receive that benefit
under its contract with Mitsui
The majority of the Court of Appeal agreed Justice Le Dain for the majority held that
the close relationship between the work performed by ITO and the contract for the carriage of
goods by sea was enough to bring the claim within the jurisdiction of the Federal Court pursuant
to its power to adjudicate matters of maritime law as defmed in s 2 of the Federal Court Act In
dissent Justice Pratte stated that earlier decisions of the Court required a finding of no
jurisdiction Pratte J held that this claim was solely a claim in delict or tort and thus was not
within the jurisdiction of the Federal Court
The Supreme Court of Canada agreed with the lower court decisions holding that the
Federal Court did have jurisdiction over Miidas claim against ITO Speaking for the majority
Justice McIntyre referred to earlier decisions of the Supreme Court of Canada for the test to be
Jurisdiction amp Multi-modal Transport 4 JIIclBS COOPBR
applied in detennining whether the Court had jurisdiction According to Justice McIntyre
earlier decisions from the Supreme Court ofCanada3 established three essential requirements for
a fmding ofjurisdiction Justice McIntyre lists those requirements as follows
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 ofjurisdiction
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 18674
1 Statutory Grant ofJurisdiction by Parliament
In this case Justice McIntyre held that s 22(1) of the Federal Court Act met the first
requirement Section 22(1) then stated
22(1) The Trial Division has concurrent original jurisdiction as well between subject and subject as otherwise in all cases in which a claim for relief is made or a remedy is sought under or by virtue of Canadian Maritime law or any other law of Canada relating to any other matter coming within the class of subject of navigation and shipping except to the extent that jurisdiction has been otherwise specially assigned
2 Existing body ofFederal Law essential to the disposition
To meet the second requirement it was necessary to consider whether there was a law of
Canada in relation to navigation and shipping which was essential to the disposition of this case
In that regard McIntyre J held that the defmition of maritime law in s 2 of the Federal Court
Act encompassed 2 categories5
3 Quebec North Shore Paper Co v Canadian Pacific Ltd (1976) 71 DLR (3d) 111 and McNamara Construction (Western) Ltd v The Queen (1977) 75 DLR (3d) 273 4 p650 5 See p652
5 Jurisdiction amp Multi-modal Transport McINNES COOPER
(1) The law administered by the Exchequer Court of Canada by virtue of the Admiralty Act or any other statute and
(2) Law that would have been administered by the Exchequer Court of Canada if it had exercised unlimited jurisdiction in relation to maritime and admiralty matters
McIntyre J concluded that the first category includes law administered by the High Court
of England on its Admiralty side in 1934 as that law has developed and been amended by both
cases and Parliament In considering whether the claim against ITO fell within the law in
category 1 McIntyre J stated that the claim did not arise from the contract of carriage between
Miida and Mitsui since ITO was not bound to perform any obligations under that bill of
lading6 The decision also points out that s 22(2) of the Federal Court Act could not assist the
Court since the claim against ITO could not fall within any of the specific categories listed in
that subsection As a result the first category of Maritime Law in s 2 did not encompass
Miidas claim against ITO
With respect to the second category ofmaritime law McIntyre J stated
In my view the second part of the s 2 definition of Canadian maritime law was adopted for the purpose of assuring that Canadian maritime law would include an unlimited jurisdiction in relation to maritime and admiralty matters The words maritime and admiralty should be interpreted within the modern context of commerce and shipping In reality the ambit of Canadian maritime law is limited only by the constitutional division of powers in the Constitution Act 1867 I am aware in arriving at this conclusion that a court in determining whether or not any particular case involves a maritime or admiralty matter must avoid encroachment on what is in pith and substance a matter of local concern involving property and civil rights or any other matter which is in essence within exclusive provincial jurisdiction under s 92 of the Constitution Act 1867 It is important therefore to establish that a subject matter under consideration in any case is so integrally connected to maritime matters as to be legitimate maritime law within federal legislative competence7
6 p654 7 pp 656-657
6 Jurisdiction amp Multi-modal Transport IIclES COOPER
Justice McIntyre then refers to an earlier decision of the Supreme Court ofCanada8 which held
that stevedoring was an integral part of shipping On this issue the majority of the Court in ITO
concluded as follows
cargo handling and incidental storage before delivery within the port area is sufficiently linked to the contract ofcarriage by sea to constitute a maritime matter within the ambit of Canadian maritime law9
According to McIntyre J there were three key factors dictating this result (1) the
terminal was within the port of Montreal (2) the connection between the terminal operators
activities within the port and the contract of carriage and (3) the storage in this case was shortmiddot
term pending ftnal delivery to Miida10 Since common law principles ofnegligence and contract
law had been employed in earlier admiralty cases there was a sufficient body of federal law
essential to the disposition ofthe case
3 The law in 2 is a law of Canada as defined in s 101 of the Constitution Act
1867
Canadian maritime law comes within federal powers over navigation and shipping as set
out in s 91(10) of the Constitution Act 1867 thus the third requirement for a ftnding of
jurisdiction was met in ITO
In a short dissenting judgment Chouinard J held simply that a claim for negligence
arising from the storage of goods in a warehouse fell only within the jurisdiction of the province
and thus was outside the jurisdiction of the Federal Court
The majority decision in ITO overruled earlier case law on those issues I I
8 Reference re Industrial Relations and Disputes Investigation Act etc [1955] 3 DLR 721 9 p657 10 See p 657 II See eg Robert Simpson Montreal Ltd v HamburgmiddotAmerika Linie Norddeutscher [1973] FC 304 (TD) where Walsh J dismissed a third party claim against a warehouseman unloading cargo for lack ofjurisdiction although the main action involved a claim for damaged cargo Sumitomo Shoji Canada Ltd v The Juzan Maru (1974) 49 DLR (3d) 277 (TD) Where Dollier J dismissed the plaintiffs claim against the terminal operators following receipt of damaged cargo Domestic Converters Corp v Arctic Steamship Line [1984] 1 Fe 211 where
7 Jurisdiction amp Multi-modal Transport MelbullbullSS coopsa
LeDain J speaking for the majority of the Court of Appeal stated that a finding ofjurisdiction over a tort committed on land would be against tradition
Jurisdiction amp Multi-modal Transport 8 McIlIlIBS COOPBR
OTHER CASE LAW
In determining jurisdictional issues today the Federal Court also has the benefit of
Iacobucci Js interpretation of ITO in Monk Corp v Island Fertilizers Ltd)2 The claims in the
Monk case arose out of a contract for the sale of fertilizer to be supplied by ship Monk had three
separate claims for damages 1) a claim related to excess product delivered 2) a demurrage
claim due to problems in unloading and 3) a claim for the cost of renting shore cranes to unload
the fertilizer
Iacobucci J speaking for the majority explained the findings in ITO as follows
Reduced to their essentials for purposes of this appeal the reasoning and conclusions ofMcIntyre J were as follows
(1) The second part of the s2 definition of Canadian maritime law provides an unlimited jurisdiction in relation to maritime and admiralty matters which should not be historically confined or frozen and maritime and admiralty should be interpreted within the modem context of commerce and shipping
(2) Canadian maritime law is limited only by the constitutional division of powers in the Constitution Act 1867 such that in determining whether or not any particular case involves a maritime or admiralty matter encroachment on what is in pith and substance a matter falling within Section 92 of the Constitution Act is to be avoided
(3) The test for determining whether the subject matter under consideration is within maritime law requires a finding that the subject matter is so integrally connected to maritime matters as to be legitimate Canadian maritime law within federal competence
(4) The connecting factors with maritime law were the proximity of the terminal operation to the Port of Montreal the connection between the terminal operator in activities within the port area and the contract of carriage by sea and the fact that the storage in issue in the case was short term pending final delivery to the consignee Miida I3
12 (1991) 80 DLR (4th) 58 (SCC) I3 p91
9 Jurisdiction amp Multi-modal Transport McINNES COOPER
Applying these standards Justice Iacobucci held that all three claims against Island
Fertilizers fell within the jurisdiction of the Federal Court In particular Iacobucci J noted that
the claim for excess product delivered related directly to Island Fertilizers obligation to
discharge cargo from the ship Similarly the claim for demurrage was directly related to the
discharge of cargo Finally the use of shore cranes was closely connected with maritime matters
because it resulted from the lack of equipment on the ship to discharge the cargo without aid
Since the discharge of cargo is clearly a maritime matter a failure to discharge cargo is also a
maritime matter
In conclusion Justice Iacobucci states simply What is important for purposes of
maritime law jurisdiction is that their claim be integrally connected with maritime matters14
For comparison purposes the decisions in SIO Export Trading Co v The Dart Europe15
and United Tires amp Rubber Co v Transco Shipping Inc 16 illustrate the difference between cases
decided prior to ITO and those decided after that decision
In the SIO Export case the goods had been transported inland from the ship for repacking
and were damaged in a traffic accident occurring on the way back to the ship Justice Dube held
that transportation within the province was not a traditional maritime activity The fact that the
truck was returning cargo to a ship could not bring the matter within the subject of navigation
and shipping thus the Court had no jurisdiction to hear the claim
In the United Tires case Richard J considered a similar action The plaintiff contracted
for the shipment of two containers of tires from Ontario to Cuba but the tires were stolen from a
storage area in Montreal before they could be placed on the ship The plaintiff sued inter alia
the owner of the yard from which the tires had been stolen Contrary to the decision in the Sio
Export case Justice Richard held that the Federal Court had jurisdiction over the claims against
both defendants because the contract entered into by the plaintiff was essentially a contract for
the carriage of goods by sea Without reference to ITO Richard J held that the Court could
exercise jurisdiction because of a through bill of lading evidencing the plaintiffs contract The
fact that the other party to the bill of lading arranged for transport to Montreal by truck for the
14 p95 15 (1983) 144 DLR (3d) 182 (Fe TD) 16 (1994) 88 FTR 12
Jurisdiction amp Multi-modal Transport 10 MelllllBS COOPBR
goods to be loaded on the vessel was not enough oust the jurisdiction of the Federal Court
Richard 1 particularly considered s 22(2)(f) of the Federal Court Act Section 22(2)(f) states
22(2)(f) any claim arising out of an agreement relating to the carriage of goods on a ship under a through bill of lading or in respect of which a through bill of lading is intended to be issued for loss or damage to goods occurring at any time or place during transit
The Court held that this subsection was enough for the exercise of jurisdiction over the claim
against the defendant trucking company
Another case addressing s 22 (2)(f) is Watt amp Scott Inc v Chantry Shipping SA17 In
that case the plaintiff purchased nuts to be shipped from Brazil to Manitoba The cargo left
Brazil on a ship but was loaded onto a train owned by the defendant in Alabama When the nuts
arrived in Manitoba they had become infected and had to be sold at a discount Joyal J held that
the Court had jurisdiction over both the claim against the shipowner and the claim against the
railway company ITO was considered but the case was decided on other grounds Initially the
Court focussed on whether there was a through bill of lading as described in Section 22(2)(f)
of the Federal Court Act Justice Joyal however held that the facts before the Court were
insufficient to make that determination As a result Joyal J turned to the decision of the
Supreme Court of Canada in ITO stating
The Supreme Courts reasoning nevertheless did extend the field of maritime law to stevedoring duties and responsibilities on the indicia of their proximity of their close relationship to the contract of carriage and of their short duration Quaere whether these tests may be applied with respect to Burlington Northerns carriage of the goods from Mobile to WinnipegI8
Joyal J again refuses to decide the case on that ground leaving the issue open and
focussing instead on s 23 of the Federal Court Act which reads
23 Bills of Exchange and Promissory Notes Aeronautics and Inter- Provincial Works and Undertakings - except to the extent that jurisdiction has been otherwise specially assigned the Trial Division has concurrent original jurisdiction between subject and subject as well as otherwise in all cases for which a claim for
17 [1988] 1 FC 537 (TD) 18 p546
Jurisdiction amp Multi-modal Transport 11 MclRRES COOPER
relief is made or a remedy is sought under an act of parliament or otherwise in relation to any matter coming within any of the following classes of subjects namely
(a) bills of exchange and promissory notes where the Crown is a party to the proceedings
(b) aeronautics and
(c) works and undertakings connecting a province with any other province or extending beyond the limits of a prOVInce
Joyal J applied the ITO test requiring 3 pre-requisites to a finding of jurisdiction To meet the
first requirement of a statutory grant ofjurisdiction Joyal J focussed not on the s 22 jurisdiction
over maritime matters generally but on whether the business of the railway company brought it
within the language of s 23 Joyal J held that the railway company was an undertaking
extending beyond the limits of Manitoba into Alabama bringing it within s 23( c) In meeting
the final two requirements (an existing body of federal law a law as defined in s 101 of the
Constitution Act 1867) s 262 of the Railway Act imposing a duty of due diligence on railway
companies was sufficient to meet both the second and third pre-requisite and was held to apply
in this case
Not limiting his analysis to ITO Joyal J went back to the basics of federal legislation In
this manner the decision looks at the roots of jurisdictional issues to see whether specific
legislation enacted by Parliament existed to deal with the issue This analysis avoided any
consideration of whether the claim against the railway was integrally connected to maritime
matters While this situation will not arise in all cases certainly many trucking and railway
companies extend beyond the limits of a province and may fall within s 23 Perhaps Joyal J
got it right by attempting to focus on federal legislation for a finding of jurisdiction instead of
relying solely on the integral connection standard from ITO
Marley Co v Cast North America (J 983) Inc 19 involved a similar action against a
defendant railroad The plaintiff contracted for the carriage of goods from Illinois to Holland
The carriers under that contract contracted with the defendant railway company to carry the
goods to Montreal for shipment by sea The railway company attempted to produce evidence
showing that it would not have carried the container to Montreal by itself but would have
19 (1995)94 FTR 45
Jurisdiction amp Multi-modal Transport 12 1101111188 COOP8R
retained another carrier This fact of course would not allow the Court to exercise jurisdiction
under s 23 of the Federal Court Act In determining whether the Court had jurisdiction Nadon
J examined s 22 of the Federal Court Act Nadon J distinguished this case from others by
stating that the defendant railway company had not been a party to any contract of carriage with
the plaintiffs Instead the railway company had contracted with another defendant only for
shipment by rail The plaintiffs goods here would have eventually been carried by rail ship
and truck Justice Nadon concluded
I am certainly not prepared to accept that a contract to carry goods by rail or by truck in the United States Canada or Europe is within the maritime jurisdiction of this Court simply because they are part of the on-going movement ofa container20
According to the decision the claim against this railway company did not fall within the
jurisdiction of s 22 of the Federal Court Act however there was insufficient evidence to
determine whether the company fell within the language used in s 23 of the Act As a result the
motion for a dismissal of the claim was dismissed The Court refused once again to look solely
at the ITO standard and referred only to federal legislation
In Matsuura Machiner Corp v Hapag Lloyd A G 21 NYK an ocean carrier agreed to
carry cargo under a through bill of lading from Japan to Toronto NYK then contracted with
Melburn for carriage of the cargo by truck to Mississauga where it would be loaded onto a
vessel Upon arrival by truck the goods were found to be damaged The plaintiffs sued both
NYK and Melburn The appellants agreed that the circumstances in ITO were not present in this
case but argued that jurisdiction should be found in s 22(2)(f) and s 23 of the Federal Court
Act Justice Pratte speaking for the Court held that s 22(2)(f) did not apply as the claims
against Melburn did not arise out of an agreement relating to the carriage of goods on a ship
under a through bill oflading as required in that subsection Further s 23 could not apply since
there was no federal law to support the claims made against Melburn
The Supreme Court of Canada almost had a third opportunity to review these issues in
the recent case of Pakistan National Shipping Corp v Canada22bull Leave to appeal was granted
but the appeal was eventually discontinued23 The disputed claim in this case involved a third
20 pp 49-50 21 (1997)211 NR 156 (CA) 22 [1997] 3 FC 601 23 [1997] SCCA No 375 (QL)
13 Jurisdiction amp Multi-modal Transport McINNES COOPER
party claim for negligent misrepresentation in relation to containers used to ship oil by sea The
canola oil in the containers leaked while being carried on the plaintiffs ship causing damage
The defendant shipper claimed indemnification from the container supplier Attempting to apply
ITO the Court of Appeal held that the claim was integrally connected to the maritime
jurisdiction of the Federal Court Stone JA referred to the decisions in both ITO and Monk
then stated
It would thus appear that the root of the claims in the main action for losses incurred by reason of the collapse of the plastic drums in stow during the voyage to Pakistan was the sufficiency of the drums themselves to withstand the conditions experienced by the ship In my view the third party claim is integrally connected to the Courts admiralty and maritime jurisdiction24
The main contract was for the carriage of goods by sea thus the Courts jurisdiction extended to
the alleged tort committed by the supplier of the oil drums
A recent decision on the topic of multi-modal transport is the Court ofAppeal decision in
Garfield Container Transport Inc v Uniroyal Goodrich Canada25 In that case the plaintiff
sued when it was not paid for its services in trucking cargo from Kitchener Ontario to a Port in
New Jersey The defendant had sold the goods in question to a company who then contracted
with a third company for the transportation of the goods The third company did not pay the
plaintiff for its services in relation to that transportation Denault J speaking for the Court
stated that this case was similar to that in Matsuura Machiner The Federal Court had no
jurisdiction over a claim relating only to road transportation of goods
ANALYSIS
Under the law established in ITO there are three pre-requisites to finding jurisdiction
over cases involving multi-modal transportation 1) a statutory grant ofjurisdiction by the federal
Parliament 2) an existing body of federal law essential to the disposition of the case and 3) an
existing body of law which is a law of Canada as defined in s 101 of the Constitution Act
1867
Many of the decisions after ITO have ignored the three-pronged test mandated by ITO
focussing instead on the words integrally connected to maritime law Justice McIntyres
24 p625 25 (1998)229 NR 201
14 Jurisdiction amp Multi-modal Transport MellflfB COOPER
decision did centre on prong 2 of the test but requirements 1 and 3 were easily met in that case
Where the case involves some aspect of maritime law as in ITO the Supreme Court of Canada
has decided that s 22 of the Federal Court Act meets the requirement for a statutory grant of
jurisdiction However where maritime law is not directly involved in the claim (as may have
been the case in both the Matsuura Machiner and the Garfield Container cases) the Court must
look further for a statutory grant of jurisdiction If there is no statutory law there is no
jurisdiction
Where the claim is related to maritime law the Court must then consider whether the
claim falls within either category of maritime law as defined in s 2 of the Federal Court Act If
the defendant and the plaintiff were both parties to a contract of carriage the claim will fall
within the first category of law as exercised by the High Court of England in 1934 on its
Admiralty side Where however one party was not obliged to perfonn any obligation under the
contract for carriage the Court must then consider the second category ofmaritime law
The second category includes unlimited jurisdiction in relation to maritime and admiralty
matters which jurisdiction is pennitted to evolve in the context of modern commerce and
shipping - enter the limits imposed by the division of powers in the Constitution Act 1867 It is
here that the Court must consider whether the claim is integrally connected with maritime
matters
While there is not yet an established rule to detennine which cases will be integrally
connected and which will not ITO and Monk provide helpful guidelines In particular the Court
must consider whether the essence of the claim is a matter that falls within provincial jurisdiction
under s 92 of the Constitution Act 1867 The Court must also consider whether it is the type of
claim traditionally connected with maritime matters (unloading and storage of cargo at a Port as
in ITO) or another federal power In Watt amp Scott Inc v Chantry Shipping for example Joyal
J held that the matter was within federal jurisdiction as a result of both the Railway Act and the
Federal Court Act Considerations of whether a particular claim has an integral connection to
maritime matters involves not only consideration of traditional and modern maritime law but
also consideration of the pith and substance of the matter to detennine whether it was a matter
delegated to the provinces exclusive jurisdiction or a matter over which the federal Parliament
retained jurisdiction Each case should be decided in light of the division of powers in s 91 and
s 92 of the Constitution Act 1867
15 Jurisdiction amp Multi-modal Transport McINNBS COOPBR
The third requirement is that the law in requirement 2 be a law of Canada as defined in
section 101 of the Constitution Act 1867 If the issue under requirement 2 is met there will be
no issue under requirement 3 If the matter is essentially federal in nature then the essential
law will be a law of Canada pursuant to s 101
Coming back to the example used at the outset we are now able to determine whether
As claims fall within the jurisdiction of the Federal Court If A wished to sue B for non~
payment the Federal Court would not have jurisdiction over that claim The arrangement
between B and A was in essence a contract for the sale of goods and thus falls properly within
the jurisdiction of provincial courts and not the Federal Court If however A wished to sue C for
the loss the claim would be within Federal Court jurisdiction A had contracted with C for
shipment of the widgets from Sydney to Aulac New Brunswick The essence of this
arrangement was for the carriage of goods by sea - A needed to transport widgets across the
world to B
Can C then claim indemnity from the various carriers involved C could certainly sue D
for any damage caused during the sea voyage and E for damage occurring during unloading or
storage since that is integrally connected to maritime matters under the ITO standard Could C
also bring an action for indemnity against F F is a railway company extending beyond the
limits ofa province within the meaning of s 23 of the Federal Court Act This brings Cs claim
against F also within the jurisdiction of the Federal Court not because of an integral connection
with maritime matters but because the Court has jurisdiction over the claim separate and apart
from any connection to the contract for the carriage of goods by sea
(2391211)
JCllcc
3 Jurisdiction amp Multi-modal Transport 11101bullbullbull8 COOPER
examine its jur
isdiction in relation to claims arising out of multi-modal transportation The above scenario
while not likely to occur illustrates the problems created by these issues In particular to
resolve this issue the Court must consider federal legislation specifically the Federal Court Act
in light of the division ofpowers between Parliament and provincial legislatures as defined in the
Constitution Act 1867
ITOvMIIDA
The ITO case is the standard against which the Federal Court determines whether it may
exercise jQrisdiction in claims arising out ofmulti-modal transportation
Unlike the example used above the facts in ITO were not unusual A bill of lading
evidenced a contract between the defendant Mitsui and the plaintiff Miida for the shipment of
250 cartons of electronic calculators from Japan to Montreal Mitsui was a marine carrier and
made arrangements with ITO a cargo-handling company to unload and store the calculators in
its warehouse at the Montreal docks until delivery could be made to Miida While the goods
were being stored by ITO 169 of the cartons were stolen Miida sued both ITO and Mitsui
At trial Marceau J held that the Federal Court had jurisdiction over the claim against
ITO as a result of the close link between that contract and the contract for the carriage of goods
by sea between Miida and Mitsui In particular Justice Marceau held that Miida knew that a
stevedore would be involved to unload the cargo and Miida expected to receive that benefit
under its contract with Mitsui
The majority of the Court of Appeal agreed Justice Le Dain for the majority held that
the close relationship between the work performed by ITO and the contract for the carriage of
goods by sea was enough to bring the claim within the jurisdiction of the Federal Court pursuant
to its power to adjudicate matters of maritime law as defmed in s 2 of the Federal Court Act In
dissent Justice Pratte stated that earlier decisions of the Court required a finding of no
jurisdiction Pratte J held that this claim was solely a claim in delict or tort and thus was not
within the jurisdiction of the Federal Court
The Supreme Court of Canada agreed with the lower court decisions holding that the
Federal Court did have jurisdiction over Miidas claim against ITO Speaking for the majority
Justice McIntyre referred to earlier decisions of the Supreme Court of Canada for the test to be
Jurisdiction amp Multi-modal Transport 4 JIIclBS COOPBR
applied in detennining whether the Court had jurisdiction According to Justice McIntyre
earlier decisions from the Supreme Court ofCanada3 established three essential requirements for
a fmding ofjurisdiction Justice McIntyre lists those requirements as follows
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 ofjurisdiction
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 18674
1 Statutory Grant ofJurisdiction by Parliament
In this case Justice McIntyre held that s 22(1) of the Federal Court Act met the first
requirement Section 22(1) then stated
22(1) The Trial Division has concurrent original jurisdiction as well between subject and subject as otherwise in all cases in which a claim for relief is made or a remedy is sought under or by virtue of Canadian Maritime law or any other law of Canada relating to any other matter coming within the class of subject of navigation and shipping except to the extent that jurisdiction has been otherwise specially assigned
2 Existing body ofFederal Law essential to the disposition
To meet the second requirement it was necessary to consider whether there was a law of
Canada in relation to navigation and shipping which was essential to the disposition of this case
In that regard McIntyre J held that the defmition of maritime law in s 2 of the Federal Court
Act encompassed 2 categories5
3 Quebec North Shore Paper Co v Canadian Pacific Ltd (1976) 71 DLR (3d) 111 and McNamara Construction (Western) Ltd v The Queen (1977) 75 DLR (3d) 273 4 p650 5 See p652
5 Jurisdiction amp Multi-modal Transport McINNES COOPER
(1) The law administered by the Exchequer Court of Canada by virtue of the Admiralty Act or any other statute and
(2) Law that would have been administered by the Exchequer Court of Canada if it had exercised unlimited jurisdiction in relation to maritime and admiralty matters
McIntyre J concluded that the first category includes law administered by the High Court
of England on its Admiralty side in 1934 as that law has developed and been amended by both
cases and Parliament In considering whether the claim against ITO fell within the law in
category 1 McIntyre J stated that the claim did not arise from the contract of carriage between
Miida and Mitsui since ITO was not bound to perform any obligations under that bill of
lading6 The decision also points out that s 22(2) of the Federal Court Act could not assist the
Court since the claim against ITO could not fall within any of the specific categories listed in
that subsection As a result the first category of Maritime Law in s 2 did not encompass
Miidas claim against ITO
With respect to the second category ofmaritime law McIntyre J stated
In my view the second part of the s 2 definition of Canadian maritime law was adopted for the purpose of assuring that Canadian maritime law would include an unlimited jurisdiction in relation to maritime and admiralty matters The words maritime and admiralty should be interpreted within the modern context of commerce and shipping In reality the ambit of Canadian maritime law is limited only by the constitutional division of powers in the Constitution Act 1867 I am aware in arriving at this conclusion that a court in determining whether or not any particular case involves a maritime or admiralty matter must avoid encroachment on what is in pith and substance a matter of local concern involving property and civil rights or any other matter which is in essence within exclusive provincial jurisdiction under s 92 of the Constitution Act 1867 It is important therefore to establish that a subject matter under consideration in any case is so integrally connected to maritime matters as to be legitimate maritime law within federal legislative competence7
6 p654 7 pp 656-657
6 Jurisdiction amp Multi-modal Transport IIclES COOPER
Justice McIntyre then refers to an earlier decision of the Supreme Court ofCanada8 which held
that stevedoring was an integral part of shipping On this issue the majority of the Court in ITO
concluded as follows
cargo handling and incidental storage before delivery within the port area is sufficiently linked to the contract ofcarriage by sea to constitute a maritime matter within the ambit of Canadian maritime law9
According to McIntyre J there were three key factors dictating this result (1) the
terminal was within the port of Montreal (2) the connection between the terminal operators
activities within the port and the contract of carriage and (3) the storage in this case was shortmiddot
term pending ftnal delivery to Miida10 Since common law principles ofnegligence and contract
law had been employed in earlier admiralty cases there was a sufficient body of federal law
essential to the disposition ofthe case
3 The law in 2 is a law of Canada as defined in s 101 of the Constitution Act
1867
Canadian maritime law comes within federal powers over navigation and shipping as set
out in s 91(10) of the Constitution Act 1867 thus the third requirement for a ftnding of
jurisdiction was met in ITO
In a short dissenting judgment Chouinard J held simply that a claim for negligence
arising from the storage of goods in a warehouse fell only within the jurisdiction of the province
and thus was outside the jurisdiction of the Federal Court
The majority decision in ITO overruled earlier case law on those issues I I
8 Reference re Industrial Relations and Disputes Investigation Act etc [1955] 3 DLR 721 9 p657 10 See p 657 II See eg Robert Simpson Montreal Ltd v HamburgmiddotAmerika Linie Norddeutscher [1973] FC 304 (TD) where Walsh J dismissed a third party claim against a warehouseman unloading cargo for lack ofjurisdiction although the main action involved a claim for damaged cargo Sumitomo Shoji Canada Ltd v The Juzan Maru (1974) 49 DLR (3d) 277 (TD) Where Dollier J dismissed the plaintiffs claim against the terminal operators following receipt of damaged cargo Domestic Converters Corp v Arctic Steamship Line [1984] 1 Fe 211 where
7 Jurisdiction amp Multi-modal Transport MelbullbullSS coopsa
LeDain J speaking for the majority of the Court of Appeal stated that a finding ofjurisdiction over a tort committed on land would be against tradition
Jurisdiction amp Multi-modal Transport 8 McIlIlIBS COOPBR
OTHER CASE LAW
In determining jurisdictional issues today the Federal Court also has the benefit of
Iacobucci Js interpretation of ITO in Monk Corp v Island Fertilizers Ltd)2 The claims in the
Monk case arose out of a contract for the sale of fertilizer to be supplied by ship Monk had three
separate claims for damages 1) a claim related to excess product delivered 2) a demurrage
claim due to problems in unloading and 3) a claim for the cost of renting shore cranes to unload
the fertilizer
Iacobucci J speaking for the majority explained the findings in ITO as follows
Reduced to their essentials for purposes of this appeal the reasoning and conclusions ofMcIntyre J were as follows
(1) The second part of the s2 definition of Canadian maritime law provides an unlimited jurisdiction in relation to maritime and admiralty matters which should not be historically confined or frozen and maritime and admiralty should be interpreted within the modem context of commerce and shipping
(2) Canadian maritime law is limited only by the constitutional division of powers in the Constitution Act 1867 such that in determining whether or not any particular case involves a maritime or admiralty matter encroachment on what is in pith and substance a matter falling within Section 92 of the Constitution Act is to be avoided
(3) The test for determining whether the subject matter under consideration is within maritime law requires a finding that the subject matter is so integrally connected to maritime matters as to be legitimate Canadian maritime law within federal competence
(4) The connecting factors with maritime law were the proximity of the terminal operation to the Port of Montreal the connection between the terminal operator in activities within the port area and the contract of carriage by sea and the fact that the storage in issue in the case was short term pending final delivery to the consignee Miida I3
12 (1991) 80 DLR (4th) 58 (SCC) I3 p91
9 Jurisdiction amp Multi-modal Transport McINNES COOPER
Applying these standards Justice Iacobucci held that all three claims against Island
Fertilizers fell within the jurisdiction of the Federal Court In particular Iacobucci J noted that
the claim for excess product delivered related directly to Island Fertilizers obligation to
discharge cargo from the ship Similarly the claim for demurrage was directly related to the
discharge of cargo Finally the use of shore cranes was closely connected with maritime matters
because it resulted from the lack of equipment on the ship to discharge the cargo without aid
Since the discharge of cargo is clearly a maritime matter a failure to discharge cargo is also a
maritime matter
In conclusion Justice Iacobucci states simply What is important for purposes of
maritime law jurisdiction is that their claim be integrally connected with maritime matters14
For comparison purposes the decisions in SIO Export Trading Co v The Dart Europe15
and United Tires amp Rubber Co v Transco Shipping Inc 16 illustrate the difference between cases
decided prior to ITO and those decided after that decision
In the SIO Export case the goods had been transported inland from the ship for repacking
and were damaged in a traffic accident occurring on the way back to the ship Justice Dube held
that transportation within the province was not a traditional maritime activity The fact that the
truck was returning cargo to a ship could not bring the matter within the subject of navigation
and shipping thus the Court had no jurisdiction to hear the claim
In the United Tires case Richard J considered a similar action The plaintiff contracted
for the shipment of two containers of tires from Ontario to Cuba but the tires were stolen from a
storage area in Montreal before they could be placed on the ship The plaintiff sued inter alia
the owner of the yard from which the tires had been stolen Contrary to the decision in the Sio
Export case Justice Richard held that the Federal Court had jurisdiction over the claims against
both defendants because the contract entered into by the plaintiff was essentially a contract for
the carriage of goods by sea Without reference to ITO Richard J held that the Court could
exercise jurisdiction because of a through bill of lading evidencing the plaintiffs contract The
fact that the other party to the bill of lading arranged for transport to Montreal by truck for the
14 p95 15 (1983) 144 DLR (3d) 182 (Fe TD) 16 (1994) 88 FTR 12
Jurisdiction amp Multi-modal Transport 10 MelllllBS COOPBR
goods to be loaded on the vessel was not enough oust the jurisdiction of the Federal Court
Richard 1 particularly considered s 22(2)(f) of the Federal Court Act Section 22(2)(f) states
22(2)(f) any claim arising out of an agreement relating to the carriage of goods on a ship under a through bill of lading or in respect of which a through bill of lading is intended to be issued for loss or damage to goods occurring at any time or place during transit
The Court held that this subsection was enough for the exercise of jurisdiction over the claim
against the defendant trucking company
Another case addressing s 22 (2)(f) is Watt amp Scott Inc v Chantry Shipping SA17 In
that case the plaintiff purchased nuts to be shipped from Brazil to Manitoba The cargo left
Brazil on a ship but was loaded onto a train owned by the defendant in Alabama When the nuts
arrived in Manitoba they had become infected and had to be sold at a discount Joyal J held that
the Court had jurisdiction over both the claim against the shipowner and the claim against the
railway company ITO was considered but the case was decided on other grounds Initially the
Court focussed on whether there was a through bill of lading as described in Section 22(2)(f)
of the Federal Court Act Justice Joyal however held that the facts before the Court were
insufficient to make that determination As a result Joyal J turned to the decision of the
Supreme Court of Canada in ITO stating
The Supreme Courts reasoning nevertheless did extend the field of maritime law to stevedoring duties and responsibilities on the indicia of their proximity of their close relationship to the contract of carriage and of their short duration Quaere whether these tests may be applied with respect to Burlington Northerns carriage of the goods from Mobile to WinnipegI8
Joyal J again refuses to decide the case on that ground leaving the issue open and
focussing instead on s 23 of the Federal Court Act which reads
23 Bills of Exchange and Promissory Notes Aeronautics and Inter- Provincial Works and Undertakings - except to the extent that jurisdiction has been otherwise specially assigned the Trial Division has concurrent original jurisdiction between subject and subject as well as otherwise in all cases for which a claim for
17 [1988] 1 FC 537 (TD) 18 p546
Jurisdiction amp Multi-modal Transport 11 MclRRES COOPER
relief is made or a remedy is sought under an act of parliament or otherwise in relation to any matter coming within any of the following classes of subjects namely
(a) bills of exchange and promissory notes where the Crown is a party to the proceedings
(b) aeronautics and
(c) works and undertakings connecting a province with any other province or extending beyond the limits of a prOVInce
Joyal J applied the ITO test requiring 3 pre-requisites to a finding of jurisdiction To meet the
first requirement of a statutory grant ofjurisdiction Joyal J focussed not on the s 22 jurisdiction
over maritime matters generally but on whether the business of the railway company brought it
within the language of s 23 Joyal J held that the railway company was an undertaking
extending beyond the limits of Manitoba into Alabama bringing it within s 23( c) In meeting
the final two requirements (an existing body of federal law a law as defined in s 101 of the
Constitution Act 1867) s 262 of the Railway Act imposing a duty of due diligence on railway
companies was sufficient to meet both the second and third pre-requisite and was held to apply
in this case
Not limiting his analysis to ITO Joyal J went back to the basics of federal legislation In
this manner the decision looks at the roots of jurisdictional issues to see whether specific
legislation enacted by Parliament existed to deal with the issue This analysis avoided any
consideration of whether the claim against the railway was integrally connected to maritime
matters While this situation will not arise in all cases certainly many trucking and railway
companies extend beyond the limits of a province and may fall within s 23 Perhaps Joyal J
got it right by attempting to focus on federal legislation for a finding of jurisdiction instead of
relying solely on the integral connection standard from ITO
Marley Co v Cast North America (J 983) Inc 19 involved a similar action against a
defendant railroad The plaintiff contracted for the carriage of goods from Illinois to Holland
The carriers under that contract contracted with the defendant railway company to carry the
goods to Montreal for shipment by sea The railway company attempted to produce evidence
showing that it would not have carried the container to Montreal by itself but would have
19 (1995)94 FTR 45
Jurisdiction amp Multi-modal Transport 12 1101111188 COOP8R
retained another carrier This fact of course would not allow the Court to exercise jurisdiction
under s 23 of the Federal Court Act In determining whether the Court had jurisdiction Nadon
J examined s 22 of the Federal Court Act Nadon J distinguished this case from others by
stating that the defendant railway company had not been a party to any contract of carriage with
the plaintiffs Instead the railway company had contracted with another defendant only for
shipment by rail The plaintiffs goods here would have eventually been carried by rail ship
and truck Justice Nadon concluded
I am certainly not prepared to accept that a contract to carry goods by rail or by truck in the United States Canada or Europe is within the maritime jurisdiction of this Court simply because they are part of the on-going movement ofa container20
According to the decision the claim against this railway company did not fall within the
jurisdiction of s 22 of the Federal Court Act however there was insufficient evidence to
determine whether the company fell within the language used in s 23 of the Act As a result the
motion for a dismissal of the claim was dismissed The Court refused once again to look solely
at the ITO standard and referred only to federal legislation
In Matsuura Machiner Corp v Hapag Lloyd A G 21 NYK an ocean carrier agreed to
carry cargo under a through bill of lading from Japan to Toronto NYK then contracted with
Melburn for carriage of the cargo by truck to Mississauga where it would be loaded onto a
vessel Upon arrival by truck the goods were found to be damaged The plaintiffs sued both
NYK and Melburn The appellants agreed that the circumstances in ITO were not present in this
case but argued that jurisdiction should be found in s 22(2)(f) and s 23 of the Federal Court
Act Justice Pratte speaking for the Court held that s 22(2)(f) did not apply as the claims
against Melburn did not arise out of an agreement relating to the carriage of goods on a ship
under a through bill oflading as required in that subsection Further s 23 could not apply since
there was no federal law to support the claims made against Melburn
The Supreme Court of Canada almost had a third opportunity to review these issues in
the recent case of Pakistan National Shipping Corp v Canada22bull Leave to appeal was granted
but the appeal was eventually discontinued23 The disputed claim in this case involved a third
20 pp 49-50 21 (1997)211 NR 156 (CA) 22 [1997] 3 FC 601 23 [1997] SCCA No 375 (QL)
13 Jurisdiction amp Multi-modal Transport McINNES COOPER
party claim for negligent misrepresentation in relation to containers used to ship oil by sea The
canola oil in the containers leaked while being carried on the plaintiffs ship causing damage
The defendant shipper claimed indemnification from the container supplier Attempting to apply
ITO the Court of Appeal held that the claim was integrally connected to the maritime
jurisdiction of the Federal Court Stone JA referred to the decisions in both ITO and Monk
then stated
It would thus appear that the root of the claims in the main action for losses incurred by reason of the collapse of the plastic drums in stow during the voyage to Pakistan was the sufficiency of the drums themselves to withstand the conditions experienced by the ship In my view the third party claim is integrally connected to the Courts admiralty and maritime jurisdiction24
The main contract was for the carriage of goods by sea thus the Courts jurisdiction extended to
the alleged tort committed by the supplier of the oil drums
A recent decision on the topic of multi-modal transport is the Court ofAppeal decision in
Garfield Container Transport Inc v Uniroyal Goodrich Canada25 In that case the plaintiff
sued when it was not paid for its services in trucking cargo from Kitchener Ontario to a Port in
New Jersey The defendant had sold the goods in question to a company who then contracted
with a third company for the transportation of the goods The third company did not pay the
plaintiff for its services in relation to that transportation Denault J speaking for the Court
stated that this case was similar to that in Matsuura Machiner The Federal Court had no
jurisdiction over a claim relating only to road transportation of goods
ANALYSIS
Under the law established in ITO there are three pre-requisites to finding jurisdiction
over cases involving multi-modal transportation 1) a statutory grant ofjurisdiction by the federal
Parliament 2) an existing body of federal law essential to the disposition of the case and 3) an
existing body of law which is a law of Canada as defined in s 101 of the Constitution Act
1867
Many of the decisions after ITO have ignored the three-pronged test mandated by ITO
focussing instead on the words integrally connected to maritime law Justice McIntyres
24 p625 25 (1998)229 NR 201
14 Jurisdiction amp Multi-modal Transport MellflfB COOPER
decision did centre on prong 2 of the test but requirements 1 and 3 were easily met in that case
Where the case involves some aspect of maritime law as in ITO the Supreme Court of Canada
has decided that s 22 of the Federal Court Act meets the requirement for a statutory grant of
jurisdiction However where maritime law is not directly involved in the claim (as may have
been the case in both the Matsuura Machiner and the Garfield Container cases) the Court must
look further for a statutory grant of jurisdiction If there is no statutory law there is no
jurisdiction
Where the claim is related to maritime law the Court must then consider whether the
claim falls within either category of maritime law as defined in s 2 of the Federal Court Act If
the defendant and the plaintiff were both parties to a contract of carriage the claim will fall
within the first category of law as exercised by the High Court of England in 1934 on its
Admiralty side Where however one party was not obliged to perfonn any obligation under the
contract for carriage the Court must then consider the second category ofmaritime law
The second category includes unlimited jurisdiction in relation to maritime and admiralty
matters which jurisdiction is pennitted to evolve in the context of modern commerce and
shipping - enter the limits imposed by the division of powers in the Constitution Act 1867 It is
here that the Court must consider whether the claim is integrally connected with maritime
matters
While there is not yet an established rule to detennine which cases will be integrally
connected and which will not ITO and Monk provide helpful guidelines In particular the Court
must consider whether the essence of the claim is a matter that falls within provincial jurisdiction
under s 92 of the Constitution Act 1867 The Court must also consider whether it is the type of
claim traditionally connected with maritime matters (unloading and storage of cargo at a Port as
in ITO) or another federal power In Watt amp Scott Inc v Chantry Shipping for example Joyal
J held that the matter was within federal jurisdiction as a result of both the Railway Act and the
Federal Court Act Considerations of whether a particular claim has an integral connection to
maritime matters involves not only consideration of traditional and modern maritime law but
also consideration of the pith and substance of the matter to detennine whether it was a matter
delegated to the provinces exclusive jurisdiction or a matter over which the federal Parliament
retained jurisdiction Each case should be decided in light of the division of powers in s 91 and
s 92 of the Constitution Act 1867
15 Jurisdiction amp Multi-modal Transport McINNBS COOPBR
The third requirement is that the law in requirement 2 be a law of Canada as defined in
section 101 of the Constitution Act 1867 If the issue under requirement 2 is met there will be
no issue under requirement 3 If the matter is essentially federal in nature then the essential
law will be a law of Canada pursuant to s 101
Coming back to the example used at the outset we are now able to determine whether
As claims fall within the jurisdiction of the Federal Court If A wished to sue B for non~
payment the Federal Court would not have jurisdiction over that claim The arrangement
between B and A was in essence a contract for the sale of goods and thus falls properly within
the jurisdiction of provincial courts and not the Federal Court If however A wished to sue C for
the loss the claim would be within Federal Court jurisdiction A had contracted with C for
shipment of the widgets from Sydney to Aulac New Brunswick The essence of this
arrangement was for the carriage of goods by sea - A needed to transport widgets across the
world to B
Can C then claim indemnity from the various carriers involved C could certainly sue D
for any damage caused during the sea voyage and E for damage occurring during unloading or
storage since that is integrally connected to maritime matters under the ITO standard Could C
also bring an action for indemnity against F F is a railway company extending beyond the
limits ofa province within the meaning of s 23 of the Federal Court Act This brings Cs claim
against F also within the jurisdiction of the Federal Court not because of an integral connection
with maritime matters but because the Court has jurisdiction over the claim separate and apart
from any connection to the contract for the carriage of goods by sea
(2391211)
JCllcc
Jurisdiction amp Multi-modal Transport 4 JIIclBS COOPBR
applied in detennining whether the Court had jurisdiction According to Justice McIntyre
earlier decisions from the Supreme Court ofCanada3 established three essential requirements for
a fmding ofjurisdiction Justice McIntyre lists those requirements as follows
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 ofjurisdiction
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 18674
1 Statutory Grant ofJurisdiction by Parliament
In this case Justice McIntyre held that s 22(1) of the Federal Court Act met the first
requirement Section 22(1) then stated
22(1) The Trial Division has concurrent original jurisdiction as well between subject and subject as otherwise in all cases in which a claim for relief is made or a remedy is sought under or by virtue of Canadian Maritime law or any other law of Canada relating to any other matter coming within the class of subject of navigation and shipping except to the extent that jurisdiction has been otherwise specially assigned
2 Existing body ofFederal Law essential to the disposition
To meet the second requirement it was necessary to consider whether there was a law of
Canada in relation to navigation and shipping which was essential to the disposition of this case
In that regard McIntyre J held that the defmition of maritime law in s 2 of the Federal Court
Act encompassed 2 categories5
3 Quebec North Shore Paper Co v Canadian Pacific Ltd (1976) 71 DLR (3d) 111 and McNamara Construction (Western) Ltd v The Queen (1977) 75 DLR (3d) 273 4 p650 5 See p652
5 Jurisdiction amp Multi-modal Transport McINNES COOPER
(1) The law administered by the Exchequer Court of Canada by virtue of the Admiralty Act or any other statute and
(2) Law that would have been administered by the Exchequer Court of Canada if it had exercised unlimited jurisdiction in relation to maritime and admiralty matters
McIntyre J concluded that the first category includes law administered by the High Court
of England on its Admiralty side in 1934 as that law has developed and been amended by both
cases and Parliament In considering whether the claim against ITO fell within the law in
category 1 McIntyre J stated that the claim did not arise from the contract of carriage between
Miida and Mitsui since ITO was not bound to perform any obligations under that bill of
lading6 The decision also points out that s 22(2) of the Federal Court Act could not assist the
Court since the claim against ITO could not fall within any of the specific categories listed in
that subsection As a result the first category of Maritime Law in s 2 did not encompass
Miidas claim against ITO
With respect to the second category ofmaritime law McIntyre J stated
In my view the second part of the s 2 definition of Canadian maritime law was adopted for the purpose of assuring that Canadian maritime law would include an unlimited jurisdiction in relation to maritime and admiralty matters The words maritime and admiralty should be interpreted within the modern context of commerce and shipping In reality the ambit of Canadian maritime law is limited only by the constitutional division of powers in the Constitution Act 1867 I am aware in arriving at this conclusion that a court in determining whether or not any particular case involves a maritime or admiralty matter must avoid encroachment on what is in pith and substance a matter of local concern involving property and civil rights or any other matter which is in essence within exclusive provincial jurisdiction under s 92 of the Constitution Act 1867 It is important therefore to establish that a subject matter under consideration in any case is so integrally connected to maritime matters as to be legitimate maritime law within federal legislative competence7
6 p654 7 pp 656-657
6 Jurisdiction amp Multi-modal Transport IIclES COOPER
Justice McIntyre then refers to an earlier decision of the Supreme Court ofCanada8 which held
that stevedoring was an integral part of shipping On this issue the majority of the Court in ITO
concluded as follows
cargo handling and incidental storage before delivery within the port area is sufficiently linked to the contract ofcarriage by sea to constitute a maritime matter within the ambit of Canadian maritime law9
According to McIntyre J there were three key factors dictating this result (1) the
terminal was within the port of Montreal (2) the connection between the terminal operators
activities within the port and the contract of carriage and (3) the storage in this case was shortmiddot
term pending ftnal delivery to Miida10 Since common law principles ofnegligence and contract
law had been employed in earlier admiralty cases there was a sufficient body of federal law
essential to the disposition ofthe case
3 The law in 2 is a law of Canada as defined in s 101 of the Constitution Act
1867
Canadian maritime law comes within federal powers over navigation and shipping as set
out in s 91(10) of the Constitution Act 1867 thus the third requirement for a ftnding of
jurisdiction was met in ITO
In a short dissenting judgment Chouinard J held simply that a claim for negligence
arising from the storage of goods in a warehouse fell only within the jurisdiction of the province
and thus was outside the jurisdiction of the Federal Court
The majority decision in ITO overruled earlier case law on those issues I I
8 Reference re Industrial Relations and Disputes Investigation Act etc [1955] 3 DLR 721 9 p657 10 See p 657 II See eg Robert Simpson Montreal Ltd v HamburgmiddotAmerika Linie Norddeutscher [1973] FC 304 (TD) where Walsh J dismissed a third party claim against a warehouseman unloading cargo for lack ofjurisdiction although the main action involved a claim for damaged cargo Sumitomo Shoji Canada Ltd v The Juzan Maru (1974) 49 DLR (3d) 277 (TD) Where Dollier J dismissed the plaintiffs claim against the terminal operators following receipt of damaged cargo Domestic Converters Corp v Arctic Steamship Line [1984] 1 Fe 211 where
7 Jurisdiction amp Multi-modal Transport MelbullbullSS coopsa
LeDain J speaking for the majority of the Court of Appeal stated that a finding ofjurisdiction over a tort committed on land would be against tradition
Jurisdiction amp Multi-modal Transport 8 McIlIlIBS COOPBR
OTHER CASE LAW
In determining jurisdictional issues today the Federal Court also has the benefit of
Iacobucci Js interpretation of ITO in Monk Corp v Island Fertilizers Ltd)2 The claims in the
Monk case arose out of a contract for the sale of fertilizer to be supplied by ship Monk had three
separate claims for damages 1) a claim related to excess product delivered 2) a demurrage
claim due to problems in unloading and 3) a claim for the cost of renting shore cranes to unload
the fertilizer
Iacobucci J speaking for the majority explained the findings in ITO as follows
Reduced to their essentials for purposes of this appeal the reasoning and conclusions ofMcIntyre J were as follows
(1) The second part of the s2 definition of Canadian maritime law provides an unlimited jurisdiction in relation to maritime and admiralty matters which should not be historically confined or frozen and maritime and admiralty should be interpreted within the modem context of commerce and shipping
(2) Canadian maritime law is limited only by the constitutional division of powers in the Constitution Act 1867 such that in determining whether or not any particular case involves a maritime or admiralty matter encroachment on what is in pith and substance a matter falling within Section 92 of the Constitution Act is to be avoided
(3) The test for determining whether the subject matter under consideration is within maritime law requires a finding that the subject matter is so integrally connected to maritime matters as to be legitimate Canadian maritime law within federal competence
(4) The connecting factors with maritime law were the proximity of the terminal operation to the Port of Montreal the connection between the terminal operator in activities within the port area and the contract of carriage by sea and the fact that the storage in issue in the case was short term pending final delivery to the consignee Miida I3
12 (1991) 80 DLR (4th) 58 (SCC) I3 p91
9 Jurisdiction amp Multi-modal Transport McINNES COOPER
Applying these standards Justice Iacobucci held that all three claims against Island
Fertilizers fell within the jurisdiction of the Federal Court In particular Iacobucci J noted that
the claim for excess product delivered related directly to Island Fertilizers obligation to
discharge cargo from the ship Similarly the claim for demurrage was directly related to the
discharge of cargo Finally the use of shore cranes was closely connected with maritime matters
because it resulted from the lack of equipment on the ship to discharge the cargo without aid
Since the discharge of cargo is clearly a maritime matter a failure to discharge cargo is also a
maritime matter
In conclusion Justice Iacobucci states simply What is important for purposes of
maritime law jurisdiction is that their claim be integrally connected with maritime matters14
For comparison purposes the decisions in SIO Export Trading Co v The Dart Europe15
and United Tires amp Rubber Co v Transco Shipping Inc 16 illustrate the difference between cases
decided prior to ITO and those decided after that decision
In the SIO Export case the goods had been transported inland from the ship for repacking
and were damaged in a traffic accident occurring on the way back to the ship Justice Dube held
that transportation within the province was not a traditional maritime activity The fact that the
truck was returning cargo to a ship could not bring the matter within the subject of navigation
and shipping thus the Court had no jurisdiction to hear the claim
In the United Tires case Richard J considered a similar action The plaintiff contracted
for the shipment of two containers of tires from Ontario to Cuba but the tires were stolen from a
storage area in Montreal before they could be placed on the ship The plaintiff sued inter alia
the owner of the yard from which the tires had been stolen Contrary to the decision in the Sio
Export case Justice Richard held that the Federal Court had jurisdiction over the claims against
both defendants because the contract entered into by the plaintiff was essentially a contract for
the carriage of goods by sea Without reference to ITO Richard J held that the Court could
exercise jurisdiction because of a through bill of lading evidencing the plaintiffs contract The
fact that the other party to the bill of lading arranged for transport to Montreal by truck for the
14 p95 15 (1983) 144 DLR (3d) 182 (Fe TD) 16 (1994) 88 FTR 12
Jurisdiction amp Multi-modal Transport 10 MelllllBS COOPBR
goods to be loaded on the vessel was not enough oust the jurisdiction of the Federal Court
Richard 1 particularly considered s 22(2)(f) of the Federal Court Act Section 22(2)(f) states
22(2)(f) any claim arising out of an agreement relating to the carriage of goods on a ship under a through bill of lading or in respect of which a through bill of lading is intended to be issued for loss or damage to goods occurring at any time or place during transit
The Court held that this subsection was enough for the exercise of jurisdiction over the claim
against the defendant trucking company
Another case addressing s 22 (2)(f) is Watt amp Scott Inc v Chantry Shipping SA17 In
that case the plaintiff purchased nuts to be shipped from Brazil to Manitoba The cargo left
Brazil on a ship but was loaded onto a train owned by the defendant in Alabama When the nuts
arrived in Manitoba they had become infected and had to be sold at a discount Joyal J held that
the Court had jurisdiction over both the claim against the shipowner and the claim against the
railway company ITO was considered but the case was decided on other grounds Initially the
Court focussed on whether there was a through bill of lading as described in Section 22(2)(f)
of the Federal Court Act Justice Joyal however held that the facts before the Court were
insufficient to make that determination As a result Joyal J turned to the decision of the
Supreme Court of Canada in ITO stating
The Supreme Courts reasoning nevertheless did extend the field of maritime law to stevedoring duties and responsibilities on the indicia of their proximity of their close relationship to the contract of carriage and of their short duration Quaere whether these tests may be applied with respect to Burlington Northerns carriage of the goods from Mobile to WinnipegI8
Joyal J again refuses to decide the case on that ground leaving the issue open and
focussing instead on s 23 of the Federal Court Act which reads
23 Bills of Exchange and Promissory Notes Aeronautics and Inter- Provincial Works and Undertakings - except to the extent that jurisdiction has been otherwise specially assigned the Trial Division has concurrent original jurisdiction between subject and subject as well as otherwise in all cases for which a claim for
17 [1988] 1 FC 537 (TD) 18 p546
Jurisdiction amp Multi-modal Transport 11 MclRRES COOPER
relief is made or a remedy is sought under an act of parliament or otherwise in relation to any matter coming within any of the following classes of subjects namely
(a) bills of exchange and promissory notes where the Crown is a party to the proceedings
(b) aeronautics and
(c) works and undertakings connecting a province with any other province or extending beyond the limits of a prOVInce
Joyal J applied the ITO test requiring 3 pre-requisites to a finding of jurisdiction To meet the
first requirement of a statutory grant ofjurisdiction Joyal J focussed not on the s 22 jurisdiction
over maritime matters generally but on whether the business of the railway company brought it
within the language of s 23 Joyal J held that the railway company was an undertaking
extending beyond the limits of Manitoba into Alabama bringing it within s 23( c) In meeting
the final two requirements (an existing body of federal law a law as defined in s 101 of the
Constitution Act 1867) s 262 of the Railway Act imposing a duty of due diligence on railway
companies was sufficient to meet both the second and third pre-requisite and was held to apply
in this case
Not limiting his analysis to ITO Joyal J went back to the basics of federal legislation In
this manner the decision looks at the roots of jurisdictional issues to see whether specific
legislation enacted by Parliament existed to deal with the issue This analysis avoided any
consideration of whether the claim against the railway was integrally connected to maritime
matters While this situation will not arise in all cases certainly many trucking and railway
companies extend beyond the limits of a province and may fall within s 23 Perhaps Joyal J
got it right by attempting to focus on federal legislation for a finding of jurisdiction instead of
relying solely on the integral connection standard from ITO
Marley Co v Cast North America (J 983) Inc 19 involved a similar action against a
defendant railroad The plaintiff contracted for the carriage of goods from Illinois to Holland
The carriers under that contract contracted with the defendant railway company to carry the
goods to Montreal for shipment by sea The railway company attempted to produce evidence
showing that it would not have carried the container to Montreal by itself but would have
19 (1995)94 FTR 45
Jurisdiction amp Multi-modal Transport 12 1101111188 COOP8R
retained another carrier This fact of course would not allow the Court to exercise jurisdiction
under s 23 of the Federal Court Act In determining whether the Court had jurisdiction Nadon
J examined s 22 of the Federal Court Act Nadon J distinguished this case from others by
stating that the defendant railway company had not been a party to any contract of carriage with
the plaintiffs Instead the railway company had contracted with another defendant only for
shipment by rail The plaintiffs goods here would have eventually been carried by rail ship
and truck Justice Nadon concluded
I am certainly not prepared to accept that a contract to carry goods by rail or by truck in the United States Canada or Europe is within the maritime jurisdiction of this Court simply because they are part of the on-going movement ofa container20
According to the decision the claim against this railway company did not fall within the
jurisdiction of s 22 of the Federal Court Act however there was insufficient evidence to
determine whether the company fell within the language used in s 23 of the Act As a result the
motion for a dismissal of the claim was dismissed The Court refused once again to look solely
at the ITO standard and referred only to federal legislation
In Matsuura Machiner Corp v Hapag Lloyd A G 21 NYK an ocean carrier agreed to
carry cargo under a through bill of lading from Japan to Toronto NYK then contracted with
Melburn for carriage of the cargo by truck to Mississauga where it would be loaded onto a
vessel Upon arrival by truck the goods were found to be damaged The plaintiffs sued both
NYK and Melburn The appellants agreed that the circumstances in ITO were not present in this
case but argued that jurisdiction should be found in s 22(2)(f) and s 23 of the Federal Court
Act Justice Pratte speaking for the Court held that s 22(2)(f) did not apply as the claims
against Melburn did not arise out of an agreement relating to the carriage of goods on a ship
under a through bill oflading as required in that subsection Further s 23 could not apply since
there was no federal law to support the claims made against Melburn
The Supreme Court of Canada almost had a third opportunity to review these issues in
the recent case of Pakistan National Shipping Corp v Canada22bull Leave to appeal was granted
but the appeal was eventually discontinued23 The disputed claim in this case involved a third
20 pp 49-50 21 (1997)211 NR 156 (CA) 22 [1997] 3 FC 601 23 [1997] SCCA No 375 (QL)
13 Jurisdiction amp Multi-modal Transport McINNES COOPER
party claim for negligent misrepresentation in relation to containers used to ship oil by sea The
canola oil in the containers leaked while being carried on the plaintiffs ship causing damage
The defendant shipper claimed indemnification from the container supplier Attempting to apply
ITO the Court of Appeal held that the claim was integrally connected to the maritime
jurisdiction of the Federal Court Stone JA referred to the decisions in both ITO and Monk
then stated
It would thus appear that the root of the claims in the main action for losses incurred by reason of the collapse of the plastic drums in stow during the voyage to Pakistan was the sufficiency of the drums themselves to withstand the conditions experienced by the ship In my view the third party claim is integrally connected to the Courts admiralty and maritime jurisdiction24
The main contract was for the carriage of goods by sea thus the Courts jurisdiction extended to
the alleged tort committed by the supplier of the oil drums
A recent decision on the topic of multi-modal transport is the Court ofAppeal decision in
Garfield Container Transport Inc v Uniroyal Goodrich Canada25 In that case the plaintiff
sued when it was not paid for its services in trucking cargo from Kitchener Ontario to a Port in
New Jersey The defendant had sold the goods in question to a company who then contracted
with a third company for the transportation of the goods The third company did not pay the
plaintiff for its services in relation to that transportation Denault J speaking for the Court
stated that this case was similar to that in Matsuura Machiner The Federal Court had no
jurisdiction over a claim relating only to road transportation of goods
ANALYSIS
Under the law established in ITO there are three pre-requisites to finding jurisdiction
over cases involving multi-modal transportation 1) a statutory grant ofjurisdiction by the federal
Parliament 2) an existing body of federal law essential to the disposition of the case and 3) an
existing body of law which is a law of Canada as defined in s 101 of the Constitution Act
1867
Many of the decisions after ITO have ignored the three-pronged test mandated by ITO
focussing instead on the words integrally connected to maritime law Justice McIntyres
24 p625 25 (1998)229 NR 201
14 Jurisdiction amp Multi-modal Transport MellflfB COOPER
decision did centre on prong 2 of the test but requirements 1 and 3 were easily met in that case
Where the case involves some aspect of maritime law as in ITO the Supreme Court of Canada
has decided that s 22 of the Federal Court Act meets the requirement for a statutory grant of
jurisdiction However where maritime law is not directly involved in the claim (as may have
been the case in both the Matsuura Machiner and the Garfield Container cases) the Court must
look further for a statutory grant of jurisdiction If there is no statutory law there is no
jurisdiction
Where the claim is related to maritime law the Court must then consider whether the
claim falls within either category of maritime law as defined in s 2 of the Federal Court Act If
the defendant and the plaintiff were both parties to a contract of carriage the claim will fall
within the first category of law as exercised by the High Court of England in 1934 on its
Admiralty side Where however one party was not obliged to perfonn any obligation under the
contract for carriage the Court must then consider the second category ofmaritime law
The second category includes unlimited jurisdiction in relation to maritime and admiralty
matters which jurisdiction is pennitted to evolve in the context of modern commerce and
shipping - enter the limits imposed by the division of powers in the Constitution Act 1867 It is
here that the Court must consider whether the claim is integrally connected with maritime
matters
While there is not yet an established rule to detennine which cases will be integrally
connected and which will not ITO and Monk provide helpful guidelines In particular the Court
must consider whether the essence of the claim is a matter that falls within provincial jurisdiction
under s 92 of the Constitution Act 1867 The Court must also consider whether it is the type of
claim traditionally connected with maritime matters (unloading and storage of cargo at a Port as
in ITO) or another federal power In Watt amp Scott Inc v Chantry Shipping for example Joyal
J held that the matter was within federal jurisdiction as a result of both the Railway Act and the
Federal Court Act Considerations of whether a particular claim has an integral connection to
maritime matters involves not only consideration of traditional and modern maritime law but
also consideration of the pith and substance of the matter to detennine whether it was a matter
delegated to the provinces exclusive jurisdiction or a matter over which the federal Parliament
retained jurisdiction Each case should be decided in light of the division of powers in s 91 and
s 92 of the Constitution Act 1867
15 Jurisdiction amp Multi-modal Transport McINNBS COOPBR
The third requirement is that the law in requirement 2 be a law of Canada as defined in
section 101 of the Constitution Act 1867 If the issue under requirement 2 is met there will be
no issue under requirement 3 If the matter is essentially federal in nature then the essential
law will be a law of Canada pursuant to s 101
Coming back to the example used at the outset we are now able to determine whether
As claims fall within the jurisdiction of the Federal Court If A wished to sue B for non~
payment the Federal Court would not have jurisdiction over that claim The arrangement
between B and A was in essence a contract for the sale of goods and thus falls properly within
the jurisdiction of provincial courts and not the Federal Court If however A wished to sue C for
the loss the claim would be within Federal Court jurisdiction A had contracted with C for
shipment of the widgets from Sydney to Aulac New Brunswick The essence of this
arrangement was for the carriage of goods by sea - A needed to transport widgets across the
world to B
Can C then claim indemnity from the various carriers involved C could certainly sue D
for any damage caused during the sea voyage and E for damage occurring during unloading or
storage since that is integrally connected to maritime matters under the ITO standard Could C
also bring an action for indemnity against F F is a railway company extending beyond the
limits ofa province within the meaning of s 23 of the Federal Court Act This brings Cs claim
against F also within the jurisdiction of the Federal Court not because of an integral connection
with maritime matters but because the Court has jurisdiction over the claim separate and apart
from any connection to the contract for the carriage of goods by sea
(2391211)
JCllcc
5 Jurisdiction amp Multi-modal Transport McINNES COOPER
(1) The law administered by the Exchequer Court of Canada by virtue of the Admiralty Act or any other statute and
(2) Law that would have been administered by the Exchequer Court of Canada if it had exercised unlimited jurisdiction in relation to maritime and admiralty matters
McIntyre J concluded that the first category includes law administered by the High Court
of England on its Admiralty side in 1934 as that law has developed and been amended by both
cases and Parliament In considering whether the claim against ITO fell within the law in
category 1 McIntyre J stated that the claim did not arise from the contract of carriage between
Miida and Mitsui since ITO was not bound to perform any obligations under that bill of
lading6 The decision also points out that s 22(2) of the Federal Court Act could not assist the
Court since the claim against ITO could not fall within any of the specific categories listed in
that subsection As a result the first category of Maritime Law in s 2 did not encompass
Miidas claim against ITO
With respect to the second category ofmaritime law McIntyre J stated
In my view the second part of the s 2 definition of Canadian maritime law was adopted for the purpose of assuring that Canadian maritime law would include an unlimited jurisdiction in relation to maritime and admiralty matters The words maritime and admiralty should be interpreted within the modern context of commerce and shipping In reality the ambit of Canadian maritime law is limited only by the constitutional division of powers in the Constitution Act 1867 I am aware in arriving at this conclusion that a court in determining whether or not any particular case involves a maritime or admiralty matter must avoid encroachment on what is in pith and substance a matter of local concern involving property and civil rights or any other matter which is in essence within exclusive provincial jurisdiction under s 92 of the Constitution Act 1867 It is important therefore to establish that a subject matter under consideration in any case is so integrally connected to maritime matters as to be legitimate maritime law within federal legislative competence7
6 p654 7 pp 656-657
6 Jurisdiction amp Multi-modal Transport IIclES COOPER
Justice McIntyre then refers to an earlier decision of the Supreme Court ofCanada8 which held
that stevedoring was an integral part of shipping On this issue the majority of the Court in ITO
concluded as follows
cargo handling and incidental storage before delivery within the port area is sufficiently linked to the contract ofcarriage by sea to constitute a maritime matter within the ambit of Canadian maritime law9
According to McIntyre J there were three key factors dictating this result (1) the
terminal was within the port of Montreal (2) the connection between the terminal operators
activities within the port and the contract of carriage and (3) the storage in this case was shortmiddot
term pending ftnal delivery to Miida10 Since common law principles ofnegligence and contract
law had been employed in earlier admiralty cases there was a sufficient body of federal law
essential to the disposition ofthe case
3 The law in 2 is a law of Canada as defined in s 101 of the Constitution Act
1867
Canadian maritime law comes within federal powers over navigation and shipping as set
out in s 91(10) of the Constitution Act 1867 thus the third requirement for a ftnding of
jurisdiction was met in ITO
In a short dissenting judgment Chouinard J held simply that a claim for negligence
arising from the storage of goods in a warehouse fell only within the jurisdiction of the province
and thus was outside the jurisdiction of the Federal Court
The majority decision in ITO overruled earlier case law on those issues I I
8 Reference re Industrial Relations and Disputes Investigation Act etc [1955] 3 DLR 721 9 p657 10 See p 657 II See eg Robert Simpson Montreal Ltd v HamburgmiddotAmerika Linie Norddeutscher [1973] FC 304 (TD) where Walsh J dismissed a third party claim against a warehouseman unloading cargo for lack ofjurisdiction although the main action involved a claim for damaged cargo Sumitomo Shoji Canada Ltd v The Juzan Maru (1974) 49 DLR (3d) 277 (TD) Where Dollier J dismissed the plaintiffs claim against the terminal operators following receipt of damaged cargo Domestic Converters Corp v Arctic Steamship Line [1984] 1 Fe 211 where
7 Jurisdiction amp Multi-modal Transport MelbullbullSS coopsa
LeDain J speaking for the majority of the Court of Appeal stated that a finding ofjurisdiction over a tort committed on land would be against tradition
Jurisdiction amp Multi-modal Transport 8 McIlIlIBS COOPBR
OTHER CASE LAW
In determining jurisdictional issues today the Federal Court also has the benefit of
Iacobucci Js interpretation of ITO in Monk Corp v Island Fertilizers Ltd)2 The claims in the
Monk case arose out of a contract for the sale of fertilizer to be supplied by ship Monk had three
separate claims for damages 1) a claim related to excess product delivered 2) a demurrage
claim due to problems in unloading and 3) a claim for the cost of renting shore cranes to unload
the fertilizer
Iacobucci J speaking for the majority explained the findings in ITO as follows
Reduced to their essentials for purposes of this appeal the reasoning and conclusions ofMcIntyre J were as follows
(1) The second part of the s2 definition of Canadian maritime law provides an unlimited jurisdiction in relation to maritime and admiralty matters which should not be historically confined or frozen and maritime and admiralty should be interpreted within the modem context of commerce and shipping
(2) Canadian maritime law is limited only by the constitutional division of powers in the Constitution Act 1867 such that in determining whether or not any particular case involves a maritime or admiralty matter encroachment on what is in pith and substance a matter falling within Section 92 of the Constitution Act is to be avoided
(3) The test for determining whether the subject matter under consideration is within maritime law requires a finding that the subject matter is so integrally connected to maritime matters as to be legitimate Canadian maritime law within federal competence
(4) The connecting factors with maritime law were the proximity of the terminal operation to the Port of Montreal the connection between the terminal operator in activities within the port area and the contract of carriage by sea and the fact that the storage in issue in the case was short term pending final delivery to the consignee Miida I3
12 (1991) 80 DLR (4th) 58 (SCC) I3 p91
9 Jurisdiction amp Multi-modal Transport McINNES COOPER
Applying these standards Justice Iacobucci held that all three claims against Island
Fertilizers fell within the jurisdiction of the Federal Court In particular Iacobucci J noted that
the claim for excess product delivered related directly to Island Fertilizers obligation to
discharge cargo from the ship Similarly the claim for demurrage was directly related to the
discharge of cargo Finally the use of shore cranes was closely connected with maritime matters
because it resulted from the lack of equipment on the ship to discharge the cargo without aid
Since the discharge of cargo is clearly a maritime matter a failure to discharge cargo is also a
maritime matter
In conclusion Justice Iacobucci states simply What is important for purposes of
maritime law jurisdiction is that their claim be integrally connected with maritime matters14
For comparison purposes the decisions in SIO Export Trading Co v The Dart Europe15
and United Tires amp Rubber Co v Transco Shipping Inc 16 illustrate the difference between cases
decided prior to ITO and those decided after that decision
In the SIO Export case the goods had been transported inland from the ship for repacking
and were damaged in a traffic accident occurring on the way back to the ship Justice Dube held
that transportation within the province was not a traditional maritime activity The fact that the
truck was returning cargo to a ship could not bring the matter within the subject of navigation
and shipping thus the Court had no jurisdiction to hear the claim
In the United Tires case Richard J considered a similar action The plaintiff contracted
for the shipment of two containers of tires from Ontario to Cuba but the tires were stolen from a
storage area in Montreal before they could be placed on the ship The plaintiff sued inter alia
the owner of the yard from which the tires had been stolen Contrary to the decision in the Sio
Export case Justice Richard held that the Federal Court had jurisdiction over the claims against
both defendants because the contract entered into by the plaintiff was essentially a contract for
the carriage of goods by sea Without reference to ITO Richard J held that the Court could
exercise jurisdiction because of a through bill of lading evidencing the plaintiffs contract The
fact that the other party to the bill of lading arranged for transport to Montreal by truck for the
14 p95 15 (1983) 144 DLR (3d) 182 (Fe TD) 16 (1994) 88 FTR 12
Jurisdiction amp Multi-modal Transport 10 MelllllBS COOPBR
goods to be loaded on the vessel was not enough oust the jurisdiction of the Federal Court
Richard 1 particularly considered s 22(2)(f) of the Federal Court Act Section 22(2)(f) states
22(2)(f) any claim arising out of an agreement relating to the carriage of goods on a ship under a through bill of lading or in respect of which a through bill of lading is intended to be issued for loss or damage to goods occurring at any time or place during transit
The Court held that this subsection was enough for the exercise of jurisdiction over the claim
against the defendant trucking company
Another case addressing s 22 (2)(f) is Watt amp Scott Inc v Chantry Shipping SA17 In
that case the plaintiff purchased nuts to be shipped from Brazil to Manitoba The cargo left
Brazil on a ship but was loaded onto a train owned by the defendant in Alabama When the nuts
arrived in Manitoba they had become infected and had to be sold at a discount Joyal J held that
the Court had jurisdiction over both the claim against the shipowner and the claim against the
railway company ITO was considered but the case was decided on other grounds Initially the
Court focussed on whether there was a through bill of lading as described in Section 22(2)(f)
of the Federal Court Act Justice Joyal however held that the facts before the Court were
insufficient to make that determination As a result Joyal J turned to the decision of the
Supreme Court of Canada in ITO stating
The Supreme Courts reasoning nevertheless did extend the field of maritime law to stevedoring duties and responsibilities on the indicia of their proximity of their close relationship to the contract of carriage and of their short duration Quaere whether these tests may be applied with respect to Burlington Northerns carriage of the goods from Mobile to WinnipegI8
Joyal J again refuses to decide the case on that ground leaving the issue open and
focussing instead on s 23 of the Federal Court Act which reads
23 Bills of Exchange and Promissory Notes Aeronautics and Inter- Provincial Works and Undertakings - except to the extent that jurisdiction has been otherwise specially assigned the Trial Division has concurrent original jurisdiction between subject and subject as well as otherwise in all cases for which a claim for
17 [1988] 1 FC 537 (TD) 18 p546
Jurisdiction amp Multi-modal Transport 11 MclRRES COOPER
relief is made or a remedy is sought under an act of parliament or otherwise in relation to any matter coming within any of the following classes of subjects namely
(a) bills of exchange and promissory notes where the Crown is a party to the proceedings
(b) aeronautics and
(c) works and undertakings connecting a province with any other province or extending beyond the limits of a prOVInce
Joyal J applied the ITO test requiring 3 pre-requisites to a finding of jurisdiction To meet the
first requirement of a statutory grant ofjurisdiction Joyal J focussed not on the s 22 jurisdiction
over maritime matters generally but on whether the business of the railway company brought it
within the language of s 23 Joyal J held that the railway company was an undertaking
extending beyond the limits of Manitoba into Alabama bringing it within s 23( c) In meeting
the final two requirements (an existing body of federal law a law as defined in s 101 of the
Constitution Act 1867) s 262 of the Railway Act imposing a duty of due diligence on railway
companies was sufficient to meet both the second and third pre-requisite and was held to apply
in this case
Not limiting his analysis to ITO Joyal J went back to the basics of federal legislation In
this manner the decision looks at the roots of jurisdictional issues to see whether specific
legislation enacted by Parliament existed to deal with the issue This analysis avoided any
consideration of whether the claim against the railway was integrally connected to maritime
matters While this situation will not arise in all cases certainly many trucking and railway
companies extend beyond the limits of a province and may fall within s 23 Perhaps Joyal J
got it right by attempting to focus on federal legislation for a finding of jurisdiction instead of
relying solely on the integral connection standard from ITO
Marley Co v Cast North America (J 983) Inc 19 involved a similar action against a
defendant railroad The plaintiff contracted for the carriage of goods from Illinois to Holland
The carriers under that contract contracted with the defendant railway company to carry the
goods to Montreal for shipment by sea The railway company attempted to produce evidence
showing that it would not have carried the container to Montreal by itself but would have
19 (1995)94 FTR 45
Jurisdiction amp Multi-modal Transport 12 1101111188 COOP8R
retained another carrier This fact of course would not allow the Court to exercise jurisdiction
under s 23 of the Federal Court Act In determining whether the Court had jurisdiction Nadon
J examined s 22 of the Federal Court Act Nadon J distinguished this case from others by
stating that the defendant railway company had not been a party to any contract of carriage with
the plaintiffs Instead the railway company had contracted with another defendant only for
shipment by rail The plaintiffs goods here would have eventually been carried by rail ship
and truck Justice Nadon concluded
I am certainly not prepared to accept that a contract to carry goods by rail or by truck in the United States Canada or Europe is within the maritime jurisdiction of this Court simply because they are part of the on-going movement ofa container20
According to the decision the claim against this railway company did not fall within the
jurisdiction of s 22 of the Federal Court Act however there was insufficient evidence to
determine whether the company fell within the language used in s 23 of the Act As a result the
motion for a dismissal of the claim was dismissed The Court refused once again to look solely
at the ITO standard and referred only to federal legislation
In Matsuura Machiner Corp v Hapag Lloyd A G 21 NYK an ocean carrier agreed to
carry cargo under a through bill of lading from Japan to Toronto NYK then contracted with
Melburn for carriage of the cargo by truck to Mississauga where it would be loaded onto a
vessel Upon arrival by truck the goods were found to be damaged The plaintiffs sued both
NYK and Melburn The appellants agreed that the circumstances in ITO were not present in this
case but argued that jurisdiction should be found in s 22(2)(f) and s 23 of the Federal Court
Act Justice Pratte speaking for the Court held that s 22(2)(f) did not apply as the claims
against Melburn did not arise out of an agreement relating to the carriage of goods on a ship
under a through bill oflading as required in that subsection Further s 23 could not apply since
there was no federal law to support the claims made against Melburn
The Supreme Court of Canada almost had a third opportunity to review these issues in
the recent case of Pakistan National Shipping Corp v Canada22bull Leave to appeal was granted
but the appeal was eventually discontinued23 The disputed claim in this case involved a third
20 pp 49-50 21 (1997)211 NR 156 (CA) 22 [1997] 3 FC 601 23 [1997] SCCA No 375 (QL)
13 Jurisdiction amp Multi-modal Transport McINNES COOPER
party claim for negligent misrepresentation in relation to containers used to ship oil by sea The
canola oil in the containers leaked while being carried on the plaintiffs ship causing damage
The defendant shipper claimed indemnification from the container supplier Attempting to apply
ITO the Court of Appeal held that the claim was integrally connected to the maritime
jurisdiction of the Federal Court Stone JA referred to the decisions in both ITO and Monk
then stated
It would thus appear that the root of the claims in the main action for losses incurred by reason of the collapse of the plastic drums in stow during the voyage to Pakistan was the sufficiency of the drums themselves to withstand the conditions experienced by the ship In my view the third party claim is integrally connected to the Courts admiralty and maritime jurisdiction24
The main contract was for the carriage of goods by sea thus the Courts jurisdiction extended to
the alleged tort committed by the supplier of the oil drums
A recent decision on the topic of multi-modal transport is the Court ofAppeal decision in
Garfield Container Transport Inc v Uniroyal Goodrich Canada25 In that case the plaintiff
sued when it was not paid for its services in trucking cargo from Kitchener Ontario to a Port in
New Jersey The defendant had sold the goods in question to a company who then contracted
with a third company for the transportation of the goods The third company did not pay the
plaintiff for its services in relation to that transportation Denault J speaking for the Court
stated that this case was similar to that in Matsuura Machiner The Federal Court had no
jurisdiction over a claim relating only to road transportation of goods
ANALYSIS
Under the law established in ITO there are three pre-requisites to finding jurisdiction
over cases involving multi-modal transportation 1) a statutory grant ofjurisdiction by the federal
Parliament 2) an existing body of federal law essential to the disposition of the case and 3) an
existing body of law which is a law of Canada as defined in s 101 of the Constitution Act
1867
Many of the decisions after ITO have ignored the three-pronged test mandated by ITO
focussing instead on the words integrally connected to maritime law Justice McIntyres
24 p625 25 (1998)229 NR 201
14 Jurisdiction amp Multi-modal Transport MellflfB COOPER
decision did centre on prong 2 of the test but requirements 1 and 3 were easily met in that case
Where the case involves some aspect of maritime law as in ITO the Supreme Court of Canada
has decided that s 22 of the Federal Court Act meets the requirement for a statutory grant of
jurisdiction However where maritime law is not directly involved in the claim (as may have
been the case in both the Matsuura Machiner and the Garfield Container cases) the Court must
look further for a statutory grant of jurisdiction If there is no statutory law there is no
jurisdiction
Where the claim is related to maritime law the Court must then consider whether the
claim falls within either category of maritime law as defined in s 2 of the Federal Court Act If
the defendant and the plaintiff were both parties to a contract of carriage the claim will fall
within the first category of law as exercised by the High Court of England in 1934 on its
Admiralty side Where however one party was not obliged to perfonn any obligation under the
contract for carriage the Court must then consider the second category ofmaritime law
The second category includes unlimited jurisdiction in relation to maritime and admiralty
matters which jurisdiction is pennitted to evolve in the context of modern commerce and
shipping - enter the limits imposed by the division of powers in the Constitution Act 1867 It is
here that the Court must consider whether the claim is integrally connected with maritime
matters
While there is not yet an established rule to detennine which cases will be integrally
connected and which will not ITO and Monk provide helpful guidelines In particular the Court
must consider whether the essence of the claim is a matter that falls within provincial jurisdiction
under s 92 of the Constitution Act 1867 The Court must also consider whether it is the type of
claim traditionally connected with maritime matters (unloading and storage of cargo at a Port as
in ITO) or another federal power In Watt amp Scott Inc v Chantry Shipping for example Joyal
J held that the matter was within federal jurisdiction as a result of both the Railway Act and the
Federal Court Act Considerations of whether a particular claim has an integral connection to
maritime matters involves not only consideration of traditional and modern maritime law but
also consideration of the pith and substance of the matter to detennine whether it was a matter
delegated to the provinces exclusive jurisdiction or a matter over which the federal Parliament
retained jurisdiction Each case should be decided in light of the division of powers in s 91 and
s 92 of the Constitution Act 1867
15 Jurisdiction amp Multi-modal Transport McINNBS COOPBR
The third requirement is that the law in requirement 2 be a law of Canada as defined in
section 101 of the Constitution Act 1867 If the issue under requirement 2 is met there will be
no issue under requirement 3 If the matter is essentially federal in nature then the essential
law will be a law of Canada pursuant to s 101
Coming back to the example used at the outset we are now able to determine whether
As claims fall within the jurisdiction of the Federal Court If A wished to sue B for non~
payment the Federal Court would not have jurisdiction over that claim The arrangement
between B and A was in essence a contract for the sale of goods and thus falls properly within
the jurisdiction of provincial courts and not the Federal Court If however A wished to sue C for
the loss the claim would be within Federal Court jurisdiction A had contracted with C for
shipment of the widgets from Sydney to Aulac New Brunswick The essence of this
arrangement was for the carriage of goods by sea - A needed to transport widgets across the
world to B
Can C then claim indemnity from the various carriers involved C could certainly sue D
for any damage caused during the sea voyage and E for damage occurring during unloading or
storage since that is integrally connected to maritime matters under the ITO standard Could C
also bring an action for indemnity against F F is a railway company extending beyond the
limits ofa province within the meaning of s 23 of the Federal Court Act This brings Cs claim
against F also within the jurisdiction of the Federal Court not because of an integral connection
with maritime matters but because the Court has jurisdiction over the claim separate and apart
from any connection to the contract for the carriage of goods by sea
(2391211)
JCllcc
6 Jurisdiction amp Multi-modal Transport IIclES COOPER
Justice McIntyre then refers to an earlier decision of the Supreme Court ofCanada8 which held
that stevedoring was an integral part of shipping On this issue the majority of the Court in ITO
concluded as follows
cargo handling and incidental storage before delivery within the port area is sufficiently linked to the contract ofcarriage by sea to constitute a maritime matter within the ambit of Canadian maritime law9
According to McIntyre J there were three key factors dictating this result (1) the
terminal was within the port of Montreal (2) the connection between the terminal operators
activities within the port and the contract of carriage and (3) the storage in this case was shortmiddot
term pending ftnal delivery to Miida10 Since common law principles ofnegligence and contract
law had been employed in earlier admiralty cases there was a sufficient body of federal law
essential to the disposition ofthe case
3 The law in 2 is a law of Canada as defined in s 101 of the Constitution Act
1867
Canadian maritime law comes within federal powers over navigation and shipping as set
out in s 91(10) of the Constitution Act 1867 thus the third requirement for a ftnding of
jurisdiction was met in ITO
In a short dissenting judgment Chouinard J held simply that a claim for negligence
arising from the storage of goods in a warehouse fell only within the jurisdiction of the province
and thus was outside the jurisdiction of the Federal Court
The majority decision in ITO overruled earlier case law on those issues I I
8 Reference re Industrial Relations and Disputes Investigation Act etc [1955] 3 DLR 721 9 p657 10 See p 657 II See eg Robert Simpson Montreal Ltd v HamburgmiddotAmerika Linie Norddeutscher [1973] FC 304 (TD) where Walsh J dismissed a third party claim against a warehouseman unloading cargo for lack ofjurisdiction although the main action involved a claim for damaged cargo Sumitomo Shoji Canada Ltd v The Juzan Maru (1974) 49 DLR (3d) 277 (TD) Where Dollier J dismissed the plaintiffs claim against the terminal operators following receipt of damaged cargo Domestic Converters Corp v Arctic Steamship Line [1984] 1 Fe 211 where
7 Jurisdiction amp Multi-modal Transport MelbullbullSS coopsa
LeDain J speaking for the majority of the Court of Appeal stated that a finding ofjurisdiction over a tort committed on land would be against tradition
Jurisdiction amp Multi-modal Transport 8 McIlIlIBS COOPBR
OTHER CASE LAW
In determining jurisdictional issues today the Federal Court also has the benefit of
Iacobucci Js interpretation of ITO in Monk Corp v Island Fertilizers Ltd)2 The claims in the
Monk case arose out of a contract for the sale of fertilizer to be supplied by ship Monk had three
separate claims for damages 1) a claim related to excess product delivered 2) a demurrage
claim due to problems in unloading and 3) a claim for the cost of renting shore cranes to unload
the fertilizer
Iacobucci J speaking for the majority explained the findings in ITO as follows
Reduced to their essentials for purposes of this appeal the reasoning and conclusions ofMcIntyre J were as follows
(1) The second part of the s2 definition of Canadian maritime law provides an unlimited jurisdiction in relation to maritime and admiralty matters which should not be historically confined or frozen and maritime and admiralty should be interpreted within the modem context of commerce and shipping
(2) Canadian maritime law is limited only by the constitutional division of powers in the Constitution Act 1867 such that in determining whether or not any particular case involves a maritime or admiralty matter encroachment on what is in pith and substance a matter falling within Section 92 of the Constitution Act is to be avoided
(3) The test for determining whether the subject matter under consideration is within maritime law requires a finding that the subject matter is so integrally connected to maritime matters as to be legitimate Canadian maritime law within federal competence
(4) The connecting factors with maritime law were the proximity of the terminal operation to the Port of Montreal the connection between the terminal operator in activities within the port area and the contract of carriage by sea and the fact that the storage in issue in the case was short term pending final delivery to the consignee Miida I3
12 (1991) 80 DLR (4th) 58 (SCC) I3 p91
9 Jurisdiction amp Multi-modal Transport McINNES COOPER
Applying these standards Justice Iacobucci held that all three claims against Island
Fertilizers fell within the jurisdiction of the Federal Court In particular Iacobucci J noted that
the claim for excess product delivered related directly to Island Fertilizers obligation to
discharge cargo from the ship Similarly the claim for demurrage was directly related to the
discharge of cargo Finally the use of shore cranes was closely connected with maritime matters
because it resulted from the lack of equipment on the ship to discharge the cargo without aid
Since the discharge of cargo is clearly a maritime matter a failure to discharge cargo is also a
maritime matter
In conclusion Justice Iacobucci states simply What is important for purposes of
maritime law jurisdiction is that their claim be integrally connected with maritime matters14
For comparison purposes the decisions in SIO Export Trading Co v The Dart Europe15
and United Tires amp Rubber Co v Transco Shipping Inc 16 illustrate the difference between cases
decided prior to ITO and those decided after that decision
In the SIO Export case the goods had been transported inland from the ship for repacking
and were damaged in a traffic accident occurring on the way back to the ship Justice Dube held
that transportation within the province was not a traditional maritime activity The fact that the
truck was returning cargo to a ship could not bring the matter within the subject of navigation
and shipping thus the Court had no jurisdiction to hear the claim
In the United Tires case Richard J considered a similar action The plaintiff contracted
for the shipment of two containers of tires from Ontario to Cuba but the tires were stolen from a
storage area in Montreal before they could be placed on the ship The plaintiff sued inter alia
the owner of the yard from which the tires had been stolen Contrary to the decision in the Sio
Export case Justice Richard held that the Federal Court had jurisdiction over the claims against
both defendants because the contract entered into by the plaintiff was essentially a contract for
the carriage of goods by sea Without reference to ITO Richard J held that the Court could
exercise jurisdiction because of a through bill of lading evidencing the plaintiffs contract The
fact that the other party to the bill of lading arranged for transport to Montreal by truck for the
14 p95 15 (1983) 144 DLR (3d) 182 (Fe TD) 16 (1994) 88 FTR 12
Jurisdiction amp Multi-modal Transport 10 MelllllBS COOPBR
goods to be loaded on the vessel was not enough oust the jurisdiction of the Federal Court
Richard 1 particularly considered s 22(2)(f) of the Federal Court Act Section 22(2)(f) states
22(2)(f) any claim arising out of an agreement relating to the carriage of goods on a ship under a through bill of lading or in respect of which a through bill of lading is intended to be issued for loss or damage to goods occurring at any time or place during transit
The Court held that this subsection was enough for the exercise of jurisdiction over the claim
against the defendant trucking company
Another case addressing s 22 (2)(f) is Watt amp Scott Inc v Chantry Shipping SA17 In
that case the plaintiff purchased nuts to be shipped from Brazil to Manitoba The cargo left
Brazil on a ship but was loaded onto a train owned by the defendant in Alabama When the nuts
arrived in Manitoba they had become infected and had to be sold at a discount Joyal J held that
the Court had jurisdiction over both the claim against the shipowner and the claim against the
railway company ITO was considered but the case was decided on other grounds Initially the
Court focussed on whether there was a through bill of lading as described in Section 22(2)(f)
of the Federal Court Act Justice Joyal however held that the facts before the Court were
insufficient to make that determination As a result Joyal J turned to the decision of the
Supreme Court of Canada in ITO stating
The Supreme Courts reasoning nevertheless did extend the field of maritime law to stevedoring duties and responsibilities on the indicia of their proximity of their close relationship to the contract of carriage and of their short duration Quaere whether these tests may be applied with respect to Burlington Northerns carriage of the goods from Mobile to WinnipegI8
Joyal J again refuses to decide the case on that ground leaving the issue open and
focussing instead on s 23 of the Federal Court Act which reads
23 Bills of Exchange and Promissory Notes Aeronautics and Inter- Provincial Works and Undertakings - except to the extent that jurisdiction has been otherwise specially assigned the Trial Division has concurrent original jurisdiction between subject and subject as well as otherwise in all cases for which a claim for
17 [1988] 1 FC 537 (TD) 18 p546
Jurisdiction amp Multi-modal Transport 11 MclRRES COOPER
relief is made or a remedy is sought under an act of parliament or otherwise in relation to any matter coming within any of the following classes of subjects namely
(a) bills of exchange and promissory notes where the Crown is a party to the proceedings
(b) aeronautics and
(c) works and undertakings connecting a province with any other province or extending beyond the limits of a prOVInce
Joyal J applied the ITO test requiring 3 pre-requisites to a finding of jurisdiction To meet the
first requirement of a statutory grant ofjurisdiction Joyal J focussed not on the s 22 jurisdiction
over maritime matters generally but on whether the business of the railway company brought it
within the language of s 23 Joyal J held that the railway company was an undertaking
extending beyond the limits of Manitoba into Alabama bringing it within s 23( c) In meeting
the final two requirements (an existing body of federal law a law as defined in s 101 of the
Constitution Act 1867) s 262 of the Railway Act imposing a duty of due diligence on railway
companies was sufficient to meet both the second and third pre-requisite and was held to apply
in this case
Not limiting his analysis to ITO Joyal J went back to the basics of federal legislation In
this manner the decision looks at the roots of jurisdictional issues to see whether specific
legislation enacted by Parliament existed to deal with the issue This analysis avoided any
consideration of whether the claim against the railway was integrally connected to maritime
matters While this situation will not arise in all cases certainly many trucking and railway
companies extend beyond the limits of a province and may fall within s 23 Perhaps Joyal J
got it right by attempting to focus on federal legislation for a finding of jurisdiction instead of
relying solely on the integral connection standard from ITO
Marley Co v Cast North America (J 983) Inc 19 involved a similar action against a
defendant railroad The plaintiff contracted for the carriage of goods from Illinois to Holland
The carriers under that contract contracted with the defendant railway company to carry the
goods to Montreal for shipment by sea The railway company attempted to produce evidence
showing that it would not have carried the container to Montreal by itself but would have
19 (1995)94 FTR 45
Jurisdiction amp Multi-modal Transport 12 1101111188 COOP8R
retained another carrier This fact of course would not allow the Court to exercise jurisdiction
under s 23 of the Federal Court Act In determining whether the Court had jurisdiction Nadon
J examined s 22 of the Federal Court Act Nadon J distinguished this case from others by
stating that the defendant railway company had not been a party to any contract of carriage with
the plaintiffs Instead the railway company had contracted with another defendant only for
shipment by rail The plaintiffs goods here would have eventually been carried by rail ship
and truck Justice Nadon concluded
I am certainly not prepared to accept that a contract to carry goods by rail or by truck in the United States Canada or Europe is within the maritime jurisdiction of this Court simply because they are part of the on-going movement ofa container20
According to the decision the claim against this railway company did not fall within the
jurisdiction of s 22 of the Federal Court Act however there was insufficient evidence to
determine whether the company fell within the language used in s 23 of the Act As a result the
motion for a dismissal of the claim was dismissed The Court refused once again to look solely
at the ITO standard and referred only to federal legislation
In Matsuura Machiner Corp v Hapag Lloyd A G 21 NYK an ocean carrier agreed to
carry cargo under a through bill of lading from Japan to Toronto NYK then contracted with
Melburn for carriage of the cargo by truck to Mississauga where it would be loaded onto a
vessel Upon arrival by truck the goods were found to be damaged The plaintiffs sued both
NYK and Melburn The appellants agreed that the circumstances in ITO were not present in this
case but argued that jurisdiction should be found in s 22(2)(f) and s 23 of the Federal Court
Act Justice Pratte speaking for the Court held that s 22(2)(f) did not apply as the claims
against Melburn did not arise out of an agreement relating to the carriage of goods on a ship
under a through bill oflading as required in that subsection Further s 23 could not apply since
there was no federal law to support the claims made against Melburn
The Supreme Court of Canada almost had a third opportunity to review these issues in
the recent case of Pakistan National Shipping Corp v Canada22bull Leave to appeal was granted
but the appeal was eventually discontinued23 The disputed claim in this case involved a third
20 pp 49-50 21 (1997)211 NR 156 (CA) 22 [1997] 3 FC 601 23 [1997] SCCA No 375 (QL)
13 Jurisdiction amp Multi-modal Transport McINNES COOPER
party claim for negligent misrepresentation in relation to containers used to ship oil by sea The
canola oil in the containers leaked while being carried on the plaintiffs ship causing damage
The defendant shipper claimed indemnification from the container supplier Attempting to apply
ITO the Court of Appeal held that the claim was integrally connected to the maritime
jurisdiction of the Federal Court Stone JA referred to the decisions in both ITO and Monk
then stated
It would thus appear that the root of the claims in the main action for losses incurred by reason of the collapse of the plastic drums in stow during the voyage to Pakistan was the sufficiency of the drums themselves to withstand the conditions experienced by the ship In my view the third party claim is integrally connected to the Courts admiralty and maritime jurisdiction24
The main contract was for the carriage of goods by sea thus the Courts jurisdiction extended to
the alleged tort committed by the supplier of the oil drums
A recent decision on the topic of multi-modal transport is the Court ofAppeal decision in
Garfield Container Transport Inc v Uniroyal Goodrich Canada25 In that case the plaintiff
sued when it was not paid for its services in trucking cargo from Kitchener Ontario to a Port in
New Jersey The defendant had sold the goods in question to a company who then contracted
with a third company for the transportation of the goods The third company did not pay the
plaintiff for its services in relation to that transportation Denault J speaking for the Court
stated that this case was similar to that in Matsuura Machiner The Federal Court had no
jurisdiction over a claim relating only to road transportation of goods
ANALYSIS
Under the law established in ITO there are three pre-requisites to finding jurisdiction
over cases involving multi-modal transportation 1) a statutory grant ofjurisdiction by the federal
Parliament 2) an existing body of federal law essential to the disposition of the case and 3) an
existing body of law which is a law of Canada as defined in s 101 of the Constitution Act
1867
Many of the decisions after ITO have ignored the three-pronged test mandated by ITO
focussing instead on the words integrally connected to maritime law Justice McIntyres
24 p625 25 (1998)229 NR 201
14 Jurisdiction amp Multi-modal Transport MellflfB COOPER
decision did centre on prong 2 of the test but requirements 1 and 3 were easily met in that case
Where the case involves some aspect of maritime law as in ITO the Supreme Court of Canada
has decided that s 22 of the Federal Court Act meets the requirement for a statutory grant of
jurisdiction However where maritime law is not directly involved in the claim (as may have
been the case in both the Matsuura Machiner and the Garfield Container cases) the Court must
look further for a statutory grant of jurisdiction If there is no statutory law there is no
jurisdiction
Where the claim is related to maritime law the Court must then consider whether the
claim falls within either category of maritime law as defined in s 2 of the Federal Court Act If
the defendant and the plaintiff were both parties to a contract of carriage the claim will fall
within the first category of law as exercised by the High Court of England in 1934 on its
Admiralty side Where however one party was not obliged to perfonn any obligation under the
contract for carriage the Court must then consider the second category ofmaritime law
The second category includes unlimited jurisdiction in relation to maritime and admiralty
matters which jurisdiction is pennitted to evolve in the context of modern commerce and
shipping - enter the limits imposed by the division of powers in the Constitution Act 1867 It is
here that the Court must consider whether the claim is integrally connected with maritime
matters
While there is not yet an established rule to detennine which cases will be integrally
connected and which will not ITO and Monk provide helpful guidelines In particular the Court
must consider whether the essence of the claim is a matter that falls within provincial jurisdiction
under s 92 of the Constitution Act 1867 The Court must also consider whether it is the type of
claim traditionally connected with maritime matters (unloading and storage of cargo at a Port as
in ITO) or another federal power In Watt amp Scott Inc v Chantry Shipping for example Joyal
J held that the matter was within federal jurisdiction as a result of both the Railway Act and the
Federal Court Act Considerations of whether a particular claim has an integral connection to
maritime matters involves not only consideration of traditional and modern maritime law but
also consideration of the pith and substance of the matter to detennine whether it was a matter
delegated to the provinces exclusive jurisdiction or a matter over which the federal Parliament
retained jurisdiction Each case should be decided in light of the division of powers in s 91 and
s 92 of the Constitution Act 1867
15 Jurisdiction amp Multi-modal Transport McINNBS COOPBR
The third requirement is that the law in requirement 2 be a law of Canada as defined in
section 101 of the Constitution Act 1867 If the issue under requirement 2 is met there will be
no issue under requirement 3 If the matter is essentially federal in nature then the essential
law will be a law of Canada pursuant to s 101
Coming back to the example used at the outset we are now able to determine whether
As claims fall within the jurisdiction of the Federal Court If A wished to sue B for non~
payment the Federal Court would not have jurisdiction over that claim The arrangement
between B and A was in essence a contract for the sale of goods and thus falls properly within
the jurisdiction of provincial courts and not the Federal Court If however A wished to sue C for
the loss the claim would be within Federal Court jurisdiction A had contracted with C for
shipment of the widgets from Sydney to Aulac New Brunswick The essence of this
arrangement was for the carriage of goods by sea - A needed to transport widgets across the
world to B
Can C then claim indemnity from the various carriers involved C could certainly sue D
for any damage caused during the sea voyage and E for damage occurring during unloading or
storage since that is integrally connected to maritime matters under the ITO standard Could C
also bring an action for indemnity against F F is a railway company extending beyond the
limits ofa province within the meaning of s 23 of the Federal Court Act This brings Cs claim
against F also within the jurisdiction of the Federal Court not because of an integral connection
with maritime matters but because the Court has jurisdiction over the claim separate and apart
from any connection to the contract for the carriage of goods by sea
(2391211)
JCllcc
7 Jurisdiction amp Multi-modal Transport MelbullbullSS coopsa
LeDain J speaking for the majority of the Court of Appeal stated that a finding ofjurisdiction over a tort committed on land would be against tradition
Jurisdiction amp Multi-modal Transport 8 McIlIlIBS COOPBR
OTHER CASE LAW
In determining jurisdictional issues today the Federal Court also has the benefit of
Iacobucci Js interpretation of ITO in Monk Corp v Island Fertilizers Ltd)2 The claims in the
Monk case arose out of a contract for the sale of fertilizer to be supplied by ship Monk had three
separate claims for damages 1) a claim related to excess product delivered 2) a demurrage
claim due to problems in unloading and 3) a claim for the cost of renting shore cranes to unload
the fertilizer
Iacobucci J speaking for the majority explained the findings in ITO as follows
Reduced to their essentials for purposes of this appeal the reasoning and conclusions ofMcIntyre J were as follows
(1) The second part of the s2 definition of Canadian maritime law provides an unlimited jurisdiction in relation to maritime and admiralty matters which should not be historically confined or frozen and maritime and admiralty should be interpreted within the modem context of commerce and shipping
(2) Canadian maritime law is limited only by the constitutional division of powers in the Constitution Act 1867 such that in determining whether or not any particular case involves a maritime or admiralty matter encroachment on what is in pith and substance a matter falling within Section 92 of the Constitution Act is to be avoided
(3) The test for determining whether the subject matter under consideration is within maritime law requires a finding that the subject matter is so integrally connected to maritime matters as to be legitimate Canadian maritime law within federal competence
(4) The connecting factors with maritime law were the proximity of the terminal operation to the Port of Montreal the connection between the terminal operator in activities within the port area and the contract of carriage by sea and the fact that the storage in issue in the case was short term pending final delivery to the consignee Miida I3
12 (1991) 80 DLR (4th) 58 (SCC) I3 p91
9 Jurisdiction amp Multi-modal Transport McINNES COOPER
Applying these standards Justice Iacobucci held that all three claims against Island
Fertilizers fell within the jurisdiction of the Federal Court In particular Iacobucci J noted that
the claim for excess product delivered related directly to Island Fertilizers obligation to
discharge cargo from the ship Similarly the claim for demurrage was directly related to the
discharge of cargo Finally the use of shore cranes was closely connected with maritime matters
because it resulted from the lack of equipment on the ship to discharge the cargo without aid
Since the discharge of cargo is clearly a maritime matter a failure to discharge cargo is also a
maritime matter
In conclusion Justice Iacobucci states simply What is important for purposes of
maritime law jurisdiction is that their claim be integrally connected with maritime matters14
For comparison purposes the decisions in SIO Export Trading Co v The Dart Europe15
and United Tires amp Rubber Co v Transco Shipping Inc 16 illustrate the difference between cases
decided prior to ITO and those decided after that decision
In the SIO Export case the goods had been transported inland from the ship for repacking
and were damaged in a traffic accident occurring on the way back to the ship Justice Dube held
that transportation within the province was not a traditional maritime activity The fact that the
truck was returning cargo to a ship could not bring the matter within the subject of navigation
and shipping thus the Court had no jurisdiction to hear the claim
In the United Tires case Richard J considered a similar action The plaintiff contracted
for the shipment of two containers of tires from Ontario to Cuba but the tires were stolen from a
storage area in Montreal before they could be placed on the ship The plaintiff sued inter alia
the owner of the yard from which the tires had been stolen Contrary to the decision in the Sio
Export case Justice Richard held that the Federal Court had jurisdiction over the claims against
both defendants because the contract entered into by the plaintiff was essentially a contract for
the carriage of goods by sea Without reference to ITO Richard J held that the Court could
exercise jurisdiction because of a through bill of lading evidencing the plaintiffs contract The
fact that the other party to the bill of lading arranged for transport to Montreal by truck for the
14 p95 15 (1983) 144 DLR (3d) 182 (Fe TD) 16 (1994) 88 FTR 12
Jurisdiction amp Multi-modal Transport 10 MelllllBS COOPBR
goods to be loaded on the vessel was not enough oust the jurisdiction of the Federal Court
Richard 1 particularly considered s 22(2)(f) of the Federal Court Act Section 22(2)(f) states
22(2)(f) any claim arising out of an agreement relating to the carriage of goods on a ship under a through bill of lading or in respect of which a through bill of lading is intended to be issued for loss or damage to goods occurring at any time or place during transit
The Court held that this subsection was enough for the exercise of jurisdiction over the claim
against the defendant trucking company
Another case addressing s 22 (2)(f) is Watt amp Scott Inc v Chantry Shipping SA17 In
that case the plaintiff purchased nuts to be shipped from Brazil to Manitoba The cargo left
Brazil on a ship but was loaded onto a train owned by the defendant in Alabama When the nuts
arrived in Manitoba they had become infected and had to be sold at a discount Joyal J held that
the Court had jurisdiction over both the claim against the shipowner and the claim against the
railway company ITO was considered but the case was decided on other grounds Initially the
Court focussed on whether there was a through bill of lading as described in Section 22(2)(f)
of the Federal Court Act Justice Joyal however held that the facts before the Court were
insufficient to make that determination As a result Joyal J turned to the decision of the
Supreme Court of Canada in ITO stating
The Supreme Courts reasoning nevertheless did extend the field of maritime law to stevedoring duties and responsibilities on the indicia of their proximity of their close relationship to the contract of carriage and of their short duration Quaere whether these tests may be applied with respect to Burlington Northerns carriage of the goods from Mobile to WinnipegI8
Joyal J again refuses to decide the case on that ground leaving the issue open and
focussing instead on s 23 of the Federal Court Act which reads
23 Bills of Exchange and Promissory Notes Aeronautics and Inter- Provincial Works and Undertakings - except to the extent that jurisdiction has been otherwise specially assigned the Trial Division has concurrent original jurisdiction between subject and subject as well as otherwise in all cases for which a claim for
17 [1988] 1 FC 537 (TD) 18 p546
Jurisdiction amp Multi-modal Transport 11 MclRRES COOPER
relief is made or a remedy is sought under an act of parliament or otherwise in relation to any matter coming within any of the following classes of subjects namely
(a) bills of exchange and promissory notes where the Crown is a party to the proceedings
(b) aeronautics and
(c) works and undertakings connecting a province with any other province or extending beyond the limits of a prOVInce
Joyal J applied the ITO test requiring 3 pre-requisites to a finding of jurisdiction To meet the
first requirement of a statutory grant ofjurisdiction Joyal J focussed not on the s 22 jurisdiction
over maritime matters generally but on whether the business of the railway company brought it
within the language of s 23 Joyal J held that the railway company was an undertaking
extending beyond the limits of Manitoba into Alabama bringing it within s 23( c) In meeting
the final two requirements (an existing body of federal law a law as defined in s 101 of the
Constitution Act 1867) s 262 of the Railway Act imposing a duty of due diligence on railway
companies was sufficient to meet both the second and third pre-requisite and was held to apply
in this case
Not limiting his analysis to ITO Joyal J went back to the basics of federal legislation In
this manner the decision looks at the roots of jurisdictional issues to see whether specific
legislation enacted by Parliament existed to deal with the issue This analysis avoided any
consideration of whether the claim against the railway was integrally connected to maritime
matters While this situation will not arise in all cases certainly many trucking and railway
companies extend beyond the limits of a province and may fall within s 23 Perhaps Joyal J
got it right by attempting to focus on federal legislation for a finding of jurisdiction instead of
relying solely on the integral connection standard from ITO
Marley Co v Cast North America (J 983) Inc 19 involved a similar action against a
defendant railroad The plaintiff contracted for the carriage of goods from Illinois to Holland
The carriers under that contract contracted with the defendant railway company to carry the
goods to Montreal for shipment by sea The railway company attempted to produce evidence
showing that it would not have carried the container to Montreal by itself but would have
19 (1995)94 FTR 45
Jurisdiction amp Multi-modal Transport 12 1101111188 COOP8R
retained another carrier This fact of course would not allow the Court to exercise jurisdiction
under s 23 of the Federal Court Act In determining whether the Court had jurisdiction Nadon
J examined s 22 of the Federal Court Act Nadon J distinguished this case from others by
stating that the defendant railway company had not been a party to any contract of carriage with
the plaintiffs Instead the railway company had contracted with another defendant only for
shipment by rail The plaintiffs goods here would have eventually been carried by rail ship
and truck Justice Nadon concluded
I am certainly not prepared to accept that a contract to carry goods by rail or by truck in the United States Canada or Europe is within the maritime jurisdiction of this Court simply because they are part of the on-going movement ofa container20
According to the decision the claim against this railway company did not fall within the
jurisdiction of s 22 of the Federal Court Act however there was insufficient evidence to
determine whether the company fell within the language used in s 23 of the Act As a result the
motion for a dismissal of the claim was dismissed The Court refused once again to look solely
at the ITO standard and referred only to federal legislation
In Matsuura Machiner Corp v Hapag Lloyd A G 21 NYK an ocean carrier agreed to
carry cargo under a through bill of lading from Japan to Toronto NYK then contracted with
Melburn for carriage of the cargo by truck to Mississauga where it would be loaded onto a
vessel Upon arrival by truck the goods were found to be damaged The plaintiffs sued both
NYK and Melburn The appellants agreed that the circumstances in ITO were not present in this
case but argued that jurisdiction should be found in s 22(2)(f) and s 23 of the Federal Court
Act Justice Pratte speaking for the Court held that s 22(2)(f) did not apply as the claims
against Melburn did not arise out of an agreement relating to the carriage of goods on a ship
under a through bill oflading as required in that subsection Further s 23 could not apply since
there was no federal law to support the claims made against Melburn
The Supreme Court of Canada almost had a third opportunity to review these issues in
the recent case of Pakistan National Shipping Corp v Canada22bull Leave to appeal was granted
but the appeal was eventually discontinued23 The disputed claim in this case involved a third
20 pp 49-50 21 (1997)211 NR 156 (CA) 22 [1997] 3 FC 601 23 [1997] SCCA No 375 (QL)
13 Jurisdiction amp Multi-modal Transport McINNES COOPER
party claim for negligent misrepresentation in relation to containers used to ship oil by sea The
canola oil in the containers leaked while being carried on the plaintiffs ship causing damage
The defendant shipper claimed indemnification from the container supplier Attempting to apply
ITO the Court of Appeal held that the claim was integrally connected to the maritime
jurisdiction of the Federal Court Stone JA referred to the decisions in both ITO and Monk
then stated
It would thus appear that the root of the claims in the main action for losses incurred by reason of the collapse of the plastic drums in stow during the voyage to Pakistan was the sufficiency of the drums themselves to withstand the conditions experienced by the ship In my view the third party claim is integrally connected to the Courts admiralty and maritime jurisdiction24
The main contract was for the carriage of goods by sea thus the Courts jurisdiction extended to
the alleged tort committed by the supplier of the oil drums
A recent decision on the topic of multi-modal transport is the Court ofAppeal decision in
Garfield Container Transport Inc v Uniroyal Goodrich Canada25 In that case the plaintiff
sued when it was not paid for its services in trucking cargo from Kitchener Ontario to a Port in
New Jersey The defendant had sold the goods in question to a company who then contracted
with a third company for the transportation of the goods The third company did not pay the
plaintiff for its services in relation to that transportation Denault J speaking for the Court
stated that this case was similar to that in Matsuura Machiner The Federal Court had no
jurisdiction over a claim relating only to road transportation of goods
ANALYSIS
Under the law established in ITO there are three pre-requisites to finding jurisdiction
over cases involving multi-modal transportation 1) a statutory grant ofjurisdiction by the federal
Parliament 2) an existing body of federal law essential to the disposition of the case and 3) an
existing body of law which is a law of Canada as defined in s 101 of the Constitution Act
1867
Many of the decisions after ITO have ignored the three-pronged test mandated by ITO
focussing instead on the words integrally connected to maritime law Justice McIntyres
24 p625 25 (1998)229 NR 201
14 Jurisdiction amp Multi-modal Transport MellflfB COOPER
decision did centre on prong 2 of the test but requirements 1 and 3 were easily met in that case
Where the case involves some aspect of maritime law as in ITO the Supreme Court of Canada
has decided that s 22 of the Federal Court Act meets the requirement for a statutory grant of
jurisdiction However where maritime law is not directly involved in the claim (as may have
been the case in both the Matsuura Machiner and the Garfield Container cases) the Court must
look further for a statutory grant of jurisdiction If there is no statutory law there is no
jurisdiction
Where the claim is related to maritime law the Court must then consider whether the
claim falls within either category of maritime law as defined in s 2 of the Federal Court Act If
the defendant and the plaintiff were both parties to a contract of carriage the claim will fall
within the first category of law as exercised by the High Court of England in 1934 on its
Admiralty side Where however one party was not obliged to perfonn any obligation under the
contract for carriage the Court must then consider the second category ofmaritime law
The second category includes unlimited jurisdiction in relation to maritime and admiralty
matters which jurisdiction is pennitted to evolve in the context of modern commerce and
shipping - enter the limits imposed by the division of powers in the Constitution Act 1867 It is
here that the Court must consider whether the claim is integrally connected with maritime
matters
While there is not yet an established rule to detennine which cases will be integrally
connected and which will not ITO and Monk provide helpful guidelines In particular the Court
must consider whether the essence of the claim is a matter that falls within provincial jurisdiction
under s 92 of the Constitution Act 1867 The Court must also consider whether it is the type of
claim traditionally connected with maritime matters (unloading and storage of cargo at a Port as
in ITO) or another federal power In Watt amp Scott Inc v Chantry Shipping for example Joyal
J held that the matter was within federal jurisdiction as a result of both the Railway Act and the
Federal Court Act Considerations of whether a particular claim has an integral connection to
maritime matters involves not only consideration of traditional and modern maritime law but
also consideration of the pith and substance of the matter to detennine whether it was a matter
delegated to the provinces exclusive jurisdiction or a matter over which the federal Parliament
retained jurisdiction Each case should be decided in light of the division of powers in s 91 and
s 92 of the Constitution Act 1867
15 Jurisdiction amp Multi-modal Transport McINNBS COOPBR
The third requirement is that the law in requirement 2 be a law of Canada as defined in
section 101 of the Constitution Act 1867 If the issue under requirement 2 is met there will be
no issue under requirement 3 If the matter is essentially federal in nature then the essential
law will be a law of Canada pursuant to s 101
Coming back to the example used at the outset we are now able to determine whether
As claims fall within the jurisdiction of the Federal Court If A wished to sue B for non~
payment the Federal Court would not have jurisdiction over that claim The arrangement
between B and A was in essence a contract for the sale of goods and thus falls properly within
the jurisdiction of provincial courts and not the Federal Court If however A wished to sue C for
the loss the claim would be within Federal Court jurisdiction A had contracted with C for
shipment of the widgets from Sydney to Aulac New Brunswick The essence of this
arrangement was for the carriage of goods by sea - A needed to transport widgets across the
world to B
Can C then claim indemnity from the various carriers involved C could certainly sue D
for any damage caused during the sea voyage and E for damage occurring during unloading or
storage since that is integrally connected to maritime matters under the ITO standard Could C
also bring an action for indemnity against F F is a railway company extending beyond the
limits ofa province within the meaning of s 23 of the Federal Court Act This brings Cs claim
against F also within the jurisdiction of the Federal Court not because of an integral connection
with maritime matters but because the Court has jurisdiction over the claim separate and apart
from any connection to the contract for the carriage of goods by sea
(2391211)
JCllcc
Jurisdiction amp Multi-modal Transport 8 McIlIlIBS COOPBR
OTHER CASE LAW
In determining jurisdictional issues today the Federal Court also has the benefit of
Iacobucci Js interpretation of ITO in Monk Corp v Island Fertilizers Ltd)2 The claims in the
Monk case arose out of a contract for the sale of fertilizer to be supplied by ship Monk had three
separate claims for damages 1) a claim related to excess product delivered 2) a demurrage
claim due to problems in unloading and 3) a claim for the cost of renting shore cranes to unload
the fertilizer
Iacobucci J speaking for the majority explained the findings in ITO as follows
Reduced to their essentials for purposes of this appeal the reasoning and conclusions ofMcIntyre J were as follows
(1) The second part of the s2 definition of Canadian maritime law provides an unlimited jurisdiction in relation to maritime and admiralty matters which should not be historically confined or frozen and maritime and admiralty should be interpreted within the modem context of commerce and shipping
(2) Canadian maritime law is limited only by the constitutional division of powers in the Constitution Act 1867 such that in determining whether or not any particular case involves a maritime or admiralty matter encroachment on what is in pith and substance a matter falling within Section 92 of the Constitution Act is to be avoided
(3) The test for determining whether the subject matter under consideration is within maritime law requires a finding that the subject matter is so integrally connected to maritime matters as to be legitimate Canadian maritime law within federal competence
(4) The connecting factors with maritime law were the proximity of the terminal operation to the Port of Montreal the connection between the terminal operator in activities within the port area and the contract of carriage by sea and the fact that the storage in issue in the case was short term pending final delivery to the consignee Miida I3
12 (1991) 80 DLR (4th) 58 (SCC) I3 p91
9 Jurisdiction amp Multi-modal Transport McINNES COOPER
Applying these standards Justice Iacobucci held that all three claims against Island
Fertilizers fell within the jurisdiction of the Federal Court In particular Iacobucci J noted that
the claim for excess product delivered related directly to Island Fertilizers obligation to
discharge cargo from the ship Similarly the claim for demurrage was directly related to the
discharge of cargo Finally the use of shore cranes was closely connected with maritime matters
because it resulted from the lack of equipment on the ship to discharge the cargo without aid
Since the discharge of cargo is clearly a maritime matter a failure to discharge cargo is also a
maritime matter
In conclusion Justice Iacobucci states simply What is important for purposes of
maritime law jurisdiction is that their claim be integrally connected with maritime matters14
For comparison purposes the decisions in SIO Export Trading Co v The Dart Europe15
and United Tires amp Rubber Co v Transco Shipping Inc 16 illustrate the difference between cases
decided prior to ITO and those decided after that decision
In the SIO Export case the goods had been transported inland from the ship for repacking
and were damaged in a traffic accident occurring on the way back to the ship Justice Dube held
that transportation within the province was not a traditional maritime activity The fact that the
truck was returning cargo to a ship could not bring the matter within the subject of navigation
and shipping thus the Court had no jurisdiction to hear the claim
In the United Tires case Richard J considered a similar action The plaintiff contracted
for the shipment of two containers of tires from Ontario to Cuba but the tires were stolen from a
storage area in Montreal before they could be placed on the ship The plaintiff sued inter alia
the owner of the yard from which the tires had been stolen Contrary to the decision in the Sio
Export case Justice Richard held that the Federal Court had jurisdiction over the claims against
both defendants because the contract entered into by the plaintiff was essentially a contract for
the carriage of goods by sea Without reference to ITO Richard J held that the Court could
exercise jurisdiction because of a through bill of lading evidencing the plaintiffs contract The
fact that the other party to the bill of lading arranged for transport to Montreal by truck for the
14 p95 15 (1983) 144 DLR (3d) 182 (Fe TD) 16 (1994) 88 FTR 12
Jurisdiction amp Multi-modal Transport 10 MelllllBS COOPBR
goods to be loaded on the vessel was not enough oust the jurisdiction of the Federal Court
Richard 1 particularly considered s 22(2)(f) of the Federal Court Act Section 22(2)(f) states
22(2)(f) any claim arising out of an agreement relating to the carriage of goods on a ship under a through bill of lading or in respect of which a through bill of lading is intended to be issued for loss or damage to goods occurring at any time or place during transit
The Court held that this subsection was enough for the exercise of jurisdiction over the claim
against the defendant trucking company
Another case addressing s 22 (2)(f) is Watt amp Scott Inc v Chantry Shipping SA17 In
that case the plaintiff purchased nuts to be shipped from Brazil to Manitoba The cargo left
Brazil on a ship but was loaded onto a train owned by the defendant in Alabama When the nuts
arrived in Manitoba they had become infected and had to be sold at a discount Joyal J held that
the Court had jurisdiction over both the claim against the shipowner and the claim against the
railway company ITO was considered but the case was decided on other grounds Initially the
Court focussed on whether there was a through bill of lading as described in Section 22(2)(f)
of the Federal Court Act Justice Joyal however held that the facts before the Court were
insufficient to make that determination As a result Joyal J turned to the decision of the
Supreme Court of Canada in ITO stating
The Supreme Courts reasoning nevertheless did extend the field of maritime law to stevedoring duties and responsibilities on the indicia of their proximity of their close relationship to the contract of carriage and of their short duration Quaere whether these tests may be applied with respect to Burlington Northerns carriage of the goods from Mobile to WinnipegI8
Joyal J again refuses to decide the case on that ground leaving the issue open and
focussing instead on s 23 of the Federal Court Act which reads
23 Bills of Exchange and Promissory Notes Aeronautics and Inter- Provincial Works and Undertakings - except to the extent that jurisdiction has been otherwise specially assigned the Trial Division has concurrent original jurisdiction between subject and subject as well as otherwise in all cases for which a claim for
17 [1988] 1 FC 537 (TD) 18 p546
Jurisdiction amp Multi-modal Transport 11 MclRRES COOPER
relief is made or a remedy is sought under an act of parliament or otherwise in relation to any matter coming within any of the following classes of subjects namely
(a) bills of exchange and promissory notes where the Crown is a party to the proceedings
(b) aeronautics and
(c) works and undertakings connecting a province with any other province or extending beyond the limits of a prOVInce
Joyal J applied the ITO test requiring 3 pre-requisites to a finding of jurisdiction To meet the
first requirement of a statutory grant ofjurisdiction Joyal J focussed not on the s 22 jurisdiction
over maritime matters generally but on whether the business of the railway company brought it
within the language of s 23 Joyal J held that the railway company was an undertaking
extending beyond the limits of Manitoba into Alabama bringing it within s 23( c) In meeting
the final two requirements (an existing body of federal law a law as defined in s 101 of the
Constitution Act 1867) s 262 of the Railway Act imposing a duty of due diligence on railway
companies was sufficient to meet both the second and third pre-requisite and was held to apply
in this case
Not limiting his analysis to ITO Joyal J went back to the basics of federal legislation In
this manner the decision looks at the roots of jurisdictional issues to see whether specific
legislation enacted by Parliament existed to deal with the issue This analysis avoided any
consideration of whether the claim against the railway was integrally connected to maritime
matters While this situation will not arise in all cases certainly many trucking and railway
companies extend beyond the limits of a province and may fall within s 23 Perhaps Joyal J
got it right by attempting to focus on federal legislation for a finding of jurisdiction instead of
relying solely on the integral connection standard from ITO
Marley Co v Cast North America (J 983) Inc 19 involved a similar action against a
defendant railroad The plaintiff contracted for the carriage of goods from Illinois to Holland
The carriers under that contract contracted with the defendant railway company to carry the
goods to Montreal for shipment by sea The railway company attempted to produce evidence
showing that it would not have carried the container to Montreal by itself but would have
19 (1995)94 FTR 45
Jurisdiction amp Multi-modal Transport 12 1101111188 COOP8R
retained another carrier This fact of course would not allow the Court to exercise jurisdiction
under s 23 of the Federal Court Act In determining whether the Court had jurisdiction Nadon
J examined s 22 of the Federal Court Act Nadon J distinguished this case from others by
stating that the defendant railway company had not been a party to any contract of carriage with
the plaintiffs Instead the railway company had contracted with another defendant only for
shipment by rail The plaintiffs goods here would have eventually been carried by rail ship
and truck Justice Nadon concluded
I am certainly not prepared to accept that a contract to carry goods by rail or by truck in the United States Canada or Europe is within the maritime jurisdiction of this Court simply because they are part of the on-going movement ofa container20
According to the decision the claim against this railway company did not fall within the
jurisdiction of s 22 of the Federal Court Act however there was insufficient evidence to
determine whether the company fell within the language used in s 23 of the Act As a result the
motion for a dismissal of the claim was dismissed The Court refused once again to look solely
at the ITO standard and referred only to federal legislation
In Matsuura Machiner Corp v Hapag Lloyd A G 21 NYK an ocean carrier agreed to
carry cargo under a through bill of lading from Japan to Toronto NYK then contracted with
Melburn for carriage of the cargo by truck to Mississauga where it would be loaded onto a
vessel Upon arrival by truck the goods were found to be damaged The plaintiffs sued both
NYK and Melburn The appellants agreed that the circumstances in ITO were not present in this
case but argued that jurisdiction should be found in s 22(2)(f) and s 23 of the Federal Court
Act Justice Pratte speaking for the Court held that s 22(2)(f) did not apply as the claims
against Melburn did not arise out of an agreement relating to the carriage of goods on a ship
under a through bill oflading as required in that subsection Further s 23 could not apply since
there was no federal law to support the claims made against Melburn
The Supreme Court of Canada almost had a third opportunity to review these issues in
the recent case of Pakistan National Shipping Corp v Canada22bull Leave to appeal was granted
but the appeal was eventually discontinued23 The disputed claim in this case involved a third
20 pp 49-50 21 (1997)211 NR 156 (CA) 22 [1997] 3 FC 601 23 [1997] SCCA No 375 (QL)
13 Jurisdiction amp Multi-modal Transport McINNES COOPER
party claim for negligent misrepresentation in relation to containers used to ship oil by sea The
canola oil in the containers leaked while being carried on the plaintiffs ship causing damage
The defendant shipper claimed indemnification from the container supplier Attempting to apply
ITO the Court of Appeal held that the claim was integrally connected to the maritime
jurisdiction of the Federal Court Stone JA referred to the decisions in both ITO and Monk
then stated
It would thus appear that the root of the claims in the main action for losses incurred by reason of the collapse of the plastic drums in stow during the voyage to Pakistan was the sufficiency of the drums themselves to withstand the conditions experienced by the ship In my view the third party claim is integrally connected to the Courts admiralty and maritime jurisdiction24
The main contract was for the carriage of goods by sea thus the Courts jurisdiction extended to
the alleged tort committed by the supplier of the oil drums
A recent decision on the topic of multi-modal transport is the Court ofAppeal decision in
Garfield Container Transport Inc v Uniroyal Goodrich Canada25 In that case the plaintiff
sued when it was not paid for its services in trucking cargo from Kitchener Ontario to a Port in
New Jersey The defendant had sold the goods in question to a company who then contracted
with a third company for the transportation of the goods The third company did not pay the
plaintiff for its services in relation to that transportation Denault J speaking for the Court
stated that this case was similar to that in Matsuura Machiner The Federal Court had no
jurisdiction over a claim relating only to road transportation of goods
ANALYSIS
Under the law established in ITO there are three pre-requisites to finding jurisdiction
over cases involving multi-modal transportation 1) a statutory grant ofjurisdiction by the federal
Parliament 2) an existing body of federal law essential to the disposition of the case and 3) an
existing body of law which is a law of Canada as defined in s 101 of the Constitution Act
1867
Many of the decisions after ITO have ignored the three-pronged test mandated by ITO
focussing instead on the words integrally connected to maritime law Justice McIntyres
24 p625 25 (1998)229 NR 201
14 Jurisdiction amp Multi-modal Transport MellflfB COOPER
decision did centre on prong 2 of the test but requirements 1 and 3 were easily met in that case
Where the case involves some aspect of maritime law as in ITO the Supreme Court of Canada
has decided that s 22 of the Federal Court Act meets the requirement for a statutory grant of
jurisdiction However where maritime law is not directly involved in the claim (as may have
been the case in both the Matsuura Machiner and the Garfield Container cases) the Court must
look further for a statutory grant of jurisdiction If there is no statutory law there is no
jurisdiction
Where the claim is related to maritime law the Court must then consider whether the
claim falls within either category of maritime law as defined in s 2 of the Federal Court Act If
the defendant and the plaintiff were both parties to a contract of carriage the claim will fall
within the first category of law as exercised by the High Court of England in 1934 on its
Admiralty side Where however one party was not obliged to perfonn any obligation under the
contract for carriage the Court must then consider the second category ofmaritime law
The second category includes unlimited jurisdiction in relation to maritime and admiralty
matters which jurisdiction is pennitted to evolve in the context of modern commerce and
shipping - enter the limits imposed by the division of powers in the Constitution Act 1867 It is
here that the Court must consider whether the claim is integrally connected with maritime
matters
While there is not yet an established rule to detennine which cases will be integrally
connected and which will not ITO and Monk provide helpful guidelines In particular the Court
must consider whether the essence of the claim is a matter that falls within provincial jurisdiction
under s 92 of the Constitution Act 1867 The Court must also consider whether it is the type of
claim traditionally connected with maritime matters (unloading and storage of cargo at a Port as
in ITO) or another federal power In Watt amp Scott Inc v Chantry Shipping for example Joyal
J held that the matter was within federal jurisdiction as a result of both the Railway Act and the
Federal Court Act Considerations of whether a particular claim has an integral connection to
maritime matters involves not only consideration of traditional and modern maritime law but
also consideration of the pith and substance of the matter to detennine whether it was a matter
delegated to the provinces exclusive jurisdiction or a matter over which the federal Parliament
retained jurisdiction Each case should be decided in light of the division of powers in s 91 and
s 92 of the Constitution Act 1867
15 Jurisdiction amp Multi-modal Transport McINNBS COOPBR
The third requirement is that the law in requirement 2 be a law of Canada as defined in
section 101 of the Constitution Act 1867 If the issue under requirement 2 is met there will be
no issue under requirement 3 If the matter is essentially federal in nature then the essential
law will be a law of Canada pursuant to s 101
Coming back to the example used at the outset we are now able to determine whether
As claims fall within the jurisdiction of the Federal Court If A wished to sue B for non~
payment the Federal Court would not have jurisdiction over that claim The arrangement
between B and A was in essence a contract for the sale of goods and thus falls properly within
the jurisdiction of provincial courts and not the Federal Court If however A wished to sue C for
the loss the claim would be within Federal Court jurisdiction A had contracted with C for
shipment of the widgets from Sydney to Aulac New Brunswick The essence of this
arrangement was for the carriage of goods by sea - A needed to transport widgets across the
world to B
Can C then claim indemnity from the various carriers involved C could certainly sue D
for any damage caused during the sea voyage and E for damage occurring during unloading or
storage since that is integrally connected to maritime matters under the ITO standard Could C
also bring an action for indemnity against F F is a railway company extending beyond the
limits ofa province within the meaning of s 23 of the Federal Court Act This brings Cs claim
against F also within the jurisdiction of the Federal Court not because of an integral connection
with maritime matters but because the Court has jurisdiction over the claim separate and apart
from any connection to the contract for the carriage of goods by sea
(2391211)
JCllcc
9 Jurisdiction amp Multi-modal Transport McINNES COOPER
Applying these standards Justice Iacobucci held that all three claims against Island
Fertilizers fell within the jurisdiction of the Federal Court In particular Iacobucci J noted that
the claim for excess product delivered related directly to Island Fertilizers obligation to
discharge cargo from the ship Similarly the claim for demurrage was directly related to the
discharge of cargo Finally the use of shore cranes was closely connected with maritime matters
because it resulted from the lack of equipment on the ship to discharge the cargo without aid
Since the discharge of cargo is clearly a maritime matter a failure to discharge cargo is also a
maritime matter
In conclusion Justice Iacobucci states simply What is important for purposes of
maritime law jurisdiction is that their claim be integrally connected with maritime matters14
For comparison purposes the decisions in SIO Export Trading Co v The Dart Europe15
and United Tires amp Rubber Co v Transco Shipping Inc 16 illustrate the difference between cases
decided prior to ITO and those decided after that decision
In the SIO Export case the goods had been transported inland from the ship for repacking
and were damaged in a traffic accident occurring on the way back to the ship Justice Dube held
that transportation within the province was not a traditional maritime activity The fact that the
truck was returning cargo to a ship could not bring the matter within the subject of navigation
and shipping thus the Court had no jurisdiction to hear the claim
In the United Tires case Richard J considered a similar action The plaintiff contracted
for the shipment of two containers of tires from Ontario to Cuba but the tires were stolen from a
storage area in Montreal before they could be placed on the ship The plaintiff sued inter alia
the owner of the yard from which the tires had been stolen Contrary to the decision in the Sio
Export case Justice Richard held that the Federal Court had jurisdiction over the claims against
both defendants because the contract entered into by the plaintiff was essentially a contract for
the carriage of goods by sea Without reference to ITO Richard J held that the Court could
exercise jurisdiction because of a through bill of lading evidencing the plaintiffs contract The
fact that the other party to the bill of lading arranged for transport to Montreal by truck for the
14 p95 15 (1983) 144 DLR (3d) 182 (Fe TD) 16 (1994) 88 FTR 12
Jurisdiction amp Multi-modal Transport 10 MelllllBS COOPBR
goods to be loaded on the vessel was not enough oust the jurisdiction of the Federal Court
Richard 1 particularly considered s 22(2)(f) of the Federal Court Act Section 22(2)(f) states
22(2)(f) any claim arising out of an agreement relating to the carriage of goods on a ship under a through bill of lading or in respect of which a through bill of lading is intended to be issued for loss or damage to goods occurring at any time or place during transit
The Court held that this subsection was enough for the exercise of jurisdiction over the claim
against the defendant trucking company
Another case addressing s 22 (2)(f) is Watt amp Scott Inc v Chantry Shipping SA17 In
that case the plaintiff purchased nuts to be shipped from Brazil to Manitoba The cargo left
Brazil on a ship but was loaded onto a train owned by the defendant in Alabama When the nuts
arrived in Manitoba they had become infected and had to be sold at a discount Joyal J held that
the Court had jurisdiction over both the claim against the shipowner and the claim against the
railway company ITO was considered but the case was decided on other grounds Initially the
Court focussed on whether there was a through bill of lading as described in Section 22(2)(f)
of the Federal Court Act Justice Joyal however held that the facts before the Court were
insufficient to make that determination As a result Joyal J turned to the decision of the
Supreme Court of Canada in ITO stating
The Supreme Courts reasoning nevertheless did extend the field of maritime law to stevedoring duties and responsibilities on the indicia of their proximity of their close relationship to the contract of carriage and of their short duration Quaere whether these tests may be applied with respect to Burlington Northerns carriage of the goods from Mobile to WinnipegI8
Joyal J again refuses to decide the case on that ground leaving the issue open and
focussing instead on s 23 of the Federal Court Act which reads
23 Bills of Exchange and Promissory Notes Aeronautics and Inter- Provincial Works and Undertakings - except to the extent that jurisdiction has been otherwise specially assigned the Trial Division has concurrent original jurisdiction between subject and subject as well as otherwise in all cases for which a claim for
17 [1988] 1 FC 537 (TD) 18 p546
Jurisdiction amp Multi-modal Transport 11 MclRRES COOPER
relief is made or a remedy is sought under an act of parliament or otherwise in relation to any matter coming within any of the following classes of subjects namely
(a) bills of exchange and promissory notes where the Crown is a party to the proceedings
(b) aeronautics and
(c) works and undertakings connecting a province with any other province or extending beyond the limits of a prOVInce
Joyal J applied the ITO test requiring 3 pre-requisites to a finding of jurisdiction To meet the
first requirement of a statutory grant ofjurisdiction Joyal J focussed not on the s 22 jurisdiction
over maritime matters generally but on whether the business of the railway company brought it
within the language of s 23 Joyal J held that the railway company was an undertaking
extending beyond the limits of Manitoba into Alabama bringing it within s 23( c) In meeting
the final two requirements (an existing body of federal law a law as defined in s 101 of the
Constitution Act 1867) s 262 of the Railway Act imposing a duty of due diligence on railway
companies was sufficient to meet both the second and third pre-requisite and was held to apply
in this case
Not limiting his analysis to ITO Joyal J went back to the basics of federal legislation In
this manner the decision looks at the roots of jurisdictional issues to see whether specific
legislation enacted by Parliament existed to deal with the issue This analysis avoided any
consideration of whether the claim against the railway was integrally connected to maritime
matters While this situation will not arise in all cases certainly many trucking and railway
companies extend beyond the limits of a province and may fall within s 23 Perhaps Joyal J
got it right by attempting to focus on federal legislation for a finding of jurisdiction instead of
relying solely on the integral connection standard from ITO
Marley Co v Cast North America (J 983) Inc 19 involved a similar action against a
defendant railroad The plaintiff contracted for the carriage of goods from Illinois to Holland
The carriers under that contract contracted with the defendant railway company to carry the
goods to Montreal for shipment by sea The railway company attempted to produce evidence
showing that it would not have carried the container to Montreal by itself but would have
19 (1995)94 FTR 45
Jurisdiction amp Multi-modal Transport 12 1101111188 COOP8R
retained another carrier This fact of course would not allow the Court to exercise jurisdiction
under s 23 of the Federal Court Act In determining whether the Court had jurisdiction Nadon
J examined s 22 of the Federal Court Act Nadon J distinguished this case from others by
stating that the defendant railway company had not been a party to any contract of carriage with
the plaintiffs Instead the railway company had contracted with another defendant only for
shipment by rail The plaintiffs goods here would have eventually been carried by rail ship
and truck Justice Nadon concluded
I am certainly not prepared to accept that a contract to carry goods by rail or by truck in the United States Canada or Europe is within the maritime jurisdiction of this Court simply because they are part of the on-going movement ofa container20
According to the decision the claim against this railway company did not fall within the
jurisdiction of s 22 of the Federal Court Act however there was insufficient evidence to
determine whether the company fell within the language used in s 23 of the Act As a result the
motion for a dismissal of the claim was dismissed The Court refused once again to look solely
at the ITO standard and referred only to federal legislation
In Matsuura Machiner Corp v Hapag Lloyd A G 21 NYK an ocean carrier agreed to
carry cargo under a through bill of lading from Japan to Toronto NYK then contracted with
Melburn for carriage of the cargo by truck to Mississauga where it would be loaded onto a
vessel Upon arrival by truck the goods were found to be damaged The plaintiffs sued both
NYK and Melburn The appellants agreed that the circumstances in ITO were not present in this
case but argued that jurisdiction should be found in s 22(2)(f) and s 23 of the Federal Court
Act Justice Pratte speaking for the Court held that s 22(2)(f) did not apply as the claims
against Melburn did not arise out of an agreement relating to the carriage of goods on a ship
under a through bill oflading as required in that subsection Further s 23 could not apply since
there was no federal law to support the claims made against Melburn
The Supreme Court of Canada almost had a third opportunity to review these issues in
the recent case of Pakistan National Shipping Corp v Canada22bull Leave to appeal was granted
but the appeal was eventually discontinued23 The disputed claim in this case involved a third
20 pp 49-50 21 (1997)211 NR 156 (CA) 22 [1997] 3 FC 601 23 [1997] SCCA No 375 (QL)
13 Jurisdiction amp Multi-modal Transport McINNES COOPER
party claim for negligent misrepresentation in relation to containers used to ship oil by sea The
canola oil in the containers leaked while being carried on the plaintiffs ship causing damage
The defendant shipper claimed indemnification from the container supplier Attempting to apply
ITO the Court of Appeal held that the claim was integrally connected to the maritime
jurisdiction of the Federal Court Stone JA referred to the decisions in both ITO and Monk
then stated
It would thus appear that the root of the claims in the main action for losses incurred by reason of the collapse of the plastic drums in stow during the voyage to Pakistan was the sufficiency of the drums themselves to withstand the conditions experienced by the ship In my view the third party claim is integrally connected to the Courts admiralty and maritime jurisdiction24
The main contract was for the carriage of goods by sea thus the Courts jurisdiction extended to
the alleged tort committed by the supplier of the oil drums
A recent decision on the topic of multi-modal transport is the Court ofAppeal decision in
Garfield Container Transport Inc v Uniroyal Goodrich Canada25 In that case the plaintiff
sued when it was not paid for its services in trucking cargo from Kitchener Ontario to a Port in
New Jersey The defendant had sold the goods in question to a company who then contracted
with a third company for the transportation of the goods The third company did not pay the
plaintiff for its services in relation to that transportation Denault J speaking for the Court
stated that this case was similar to that in Matsuura Machiner The Federal Court had no
jurisdiction over a claim relating only to road transportation of goods
ANALYSIS
Under the law established in ITO there are three pre-requisites to finding jurisdiction
over cases involving multi-modal transportation 1) a statutory grant ofjurisdiction by the federal
Parliament 2) an existing body of federal law essential to the disposition of the case and 3) an
existing body of law which is a law of Canada as defined in s 101 of the Constitution Act
1867
Many of the decisions after ITO have ignored the three-pronged test mandated by ITO
focussing instead on the words integrally connected to maritime law Justice McIntyres
24 p625 25 (1998)229 NR 201
14 Jurisdiction amp Multi-modal Transport MellflfB COOPER
decision did centre on prong 2 of the test but requirements 1 and 3 were easily met in that case
Where the case involves some aspect of maritime law as in ITO the Supreme Court of Canada
has decided that s 22 of the Federal Court Act meets the requirement for a statutory grant of
jurisdiction However where maritime law is not directly involved in the claim (as may have
been the case in both the Matsuura Machiner and the Garfield Container cases) the Court must
look further for a statutory grant of jurisdiction If there is no statutory law there is no
jurisdiction
Where the claim is related to maritime law the Court must then consider whether the
claim falls within either category of maritime law as defined in s 2 of the Federal Court Act If
the defendant and the plaintiff were both parties to a contract of carriage the claim will fall
within the first category of law as exercised by the High Court of England in 1934 on its
Admiralty side Where however one party was not obliged to perfonn any obligation under the
contract for carriage the Court must then consider the second category ofmaritime law
The second category includes unlimited jurisdiction in relation to maritime and admiralty
matters which jurisdiction is pennitted to evolve in the context of modern commerce and
shipping - enter the limits imposed by the division of powers in the Constitution Act 1867 It is
here that the Court must consider whether the claim is integrally connected with maritime
matters
While there is not yet an established rule to detennine which cases will be integrally
connected and which will not ITO and Monk provide helpful guidelines In particular the Court
must consider whether the essence of the claim is a matter that falls within provincial jurisdiction
under s 92 of the Constitution Act 1867 The Court must also consider whether it is the type of
claim traditionally connected with maritime matters (unloading and storage of cargo at a Port as
in ITO) or another federal power In Watt amp Scott Inc v Chantry Shipping for example Joyal
J held that the matter was within federal jurisdiction as a result of both the Railway Act and the
Federal Court Act Considerations of whether a particular claim has an integral connection to
maritime matters involves not only consideration of traditional and modern maritime law but
also consideration of the pith and substance of the matter to detennine whether it was a matter
delegated to the provinces exclusive jurisdiction or a matter over which the federal Parliament
retained jurisdiction Each case should be decided in light of the division of powers in s 91 and
s 92 of the Constitution Act 1867
15 Jurisdiction amp Multi-modal Transport McINNBS COOPBR
The third requirement is that the law in requirement 2 be a law of Canada as defined in
section 101 of the Constitution Act 1867 If the issue under requirement 2 is met there will be
no issue under requirement 3 If the matter is essentially federal in nature then the essential
law will be a law of Canada pursuant to s 101
Coming back to the example used at the outset we are now able to determine whether
As claims fall within the jurisdiction of the Federal Court If A wished to sue B for non~
payment the Federal Court would not have jurisdiction over that claim The arrangement
between B and A was in essence a contract for the sale of goods and thus falls properly within
the jurisdiction of provincial courts and not the Federal Court If however A wished to sue C for
the loss the claim would be within Federal Court jurisdiction A had contracted with C for
shipment of the widgets from Sydney to Aulac New Brunswick The essence of this
arrangement was for the carriage of goods by sea - A needed to transport widgets across the
world to B
Can C then claim indemnity from the various carriers involved C could certainly sue D
for any damage caused during the sea voyage and E for damage occurring during unloading or
storage since that is integrally connected to maritime matters under the ITO standard Could C
also bring an action for indemnity against F F is a railway company extending beyond the
limits ofa province within the meaning of s 23 of the Federal Court Act This brings Cs claim
against F also within the jurisdiction of the Federal Court not because of an integral connection
with maritime matters but because the Court has jurisdiction over the claim separate and apart
from any connection to the contract for the carriage of goods by sea
(2391211)
JCllcc
Jurisdiction amp Multi-modal Transport 10 MelllllBS COOPBR
goods to be loaded on the vessel was not enough oust the jurisdiction of the Federal Court
Richard 1 particularly considered s 22(2)(f) of the Federal Court Act Section 22(2)(f) states
22(2)(f) any claim arising out of an agreement relating to the carriage of goods on a ship under a through bill of lading or in respect of which a through bill of lading is intended to be issued for loss or damage to goods occurring at any time or place during transit
The Court held that this subsection was enough for the exercise of jurisdiction over the claim
against the defendant trucking company
Another case addressing s 22 (2)(f) is Watt amp Scott Inc v Chantry Shipping SA17 In
that case the plaintiff purchased nuts to be shipped from Brazil to Manitoba The cargo left
Brazil on a ship but was loaded onto a train owned by the defendant in Alabama When the nuts
arrived in Manitoba they had become infected and had to be sold at a discount Joyal J held that
the Court had jurisdiction over both the claim against the shipowner and the claim against the
railway company ITO was considered but the case was decided on other grounds Initially the
Court focussed on whether there was a through bill of lading as described in Section 22(2)(f)
of the Federal Court Act Justice Joyal however held that the facts before the Court were
insufficient to make that determination As a result Joyal J turned to the decision of the
Supreme Court of Canada in ITO stating
The Supreme Courts reasoning nevertheless did extend the field of maritime law to stevedoring duties and responsibilities on the indicia of their proximity of their close relationship to the contract of carriage and of their short duration Quaere whether these tests may be applied with respect to Burlington Northerns carriage of the goods from Mobile to WinnipegI8
Joyal J again refuses to decide the case on that ground leaving the issue open and
focussing instead on s 23 of the Federal Court Act which reads
23 Bills of Exchange and Promissory Notes Aeronautics and Inter- Provincial Works and Undertakings - except to the extent that jurisdiction has been otherwise specially assigned the Trial Division has concurrent original jurisdiction between subject and subject as well as otherwise in all cases for which a claim for
17 [1988] 1 FC 537 (TD) 18 p546
Jurisdiction amp Multi-modal Transport 11 MclRRES COOPER
relief is made or a remedy is sought under an act of parliament or otherwise in relation to any matter coming within any of the following classes of subjects namely
(a) bills of exchange and promissory notes where the Crown is a party to the proceedings
(b) aeronautics and
(c) works and undertakings connecting a province with any other province or extending beyond the limits of a prOVInce
Joyal J applied the ITO test requiring 3 pre-requisites to a finding of jurisdiction To meet the
first requirement of a statutory grant ofjurisdiction Joyal J focussed not on the s 22 jurisdiction
over maritime matters generally but on whether the business of the railway company brought it
within the language of s 23 Joyal J held that the railway company was an undertaking
extending beyond the limits of Manitoba into Alabama bringing it within s 23( c) In meeting
the final two requirements (an existing body of federal law a law as defined in s 101 of the
Constitution Act 1867) s 262 of the Railway Act imposing a duty of due diligence on railway
companies was sufficient to meet both the second and third pre-requisite and was held to apply
in this case
Not limiting his analysis to ITO Joyal J went back to the basics of federal legislation In
this manner the decision looks at the roots of jurisdictional issues to see whether specific
legislation enacted by Parliament existed to deal with the issue This analysis avoided any
consideration of whether the claim against the railway was integrally connected to maritime
matters While this situation will not arise in all cases certainly many trucking and railway
companies extend beyond the limits of a province and may fall within s 23 Perhaps Joyal J
got it right by attempting to focus on federal legislation for a finding of jurisdiction instead of
relying solely on the integral connection standard from ITO
Marley Co v Cast North America (J 983) Inc 19 involved a similar action against a
defendant railroad The plaintiff contracted for the carriage of goods from Illinois to Holland
The carriers under that contract contracted with the defendant railway company to carry the
goods to Montreal for shipment by sea The railway company attempted to produce evidence
showing that it would not have carried the container to Montreal by itself but would have
19 (1995)94 FTR 45
Jurisdiction amp Multi-modal Transport 12 1101111188 COOP8R
retained another carrier This fact of course would not allow the Court to exercise jurisdiction
under s 23 of the Federal Court Act In determining whether the Court had jurisdiction Nadon
J examined s 22 of the Federal Court Act Nadon J distinguished this case from others by
stating that the defendant railway company had not been a party to any contract of carriage with
the plaintiffs Instead the railway company had contracted with another defendant only for
shipment by rail The plaintiffs goods here would have eventually been carried by rail ship
and truck Justice Nadon concluded
I am certainly not prepared to accept that a contract to carry goods by rail or by truck in the United States Canada or Europe is within the maritime jurisdiction of this Court simply because they are part of the on-going movement ofa container20
According to the decision the claim against this railway company did not fall within the
jurisdiction of s 22 of the Federal Court Act however there was insufficient evidence to
determine whether the company fell within the language used in s 23 of the Act As a result the
motion for a dismissal of the claim was dismissed The Court refused once again to look solely
at the ITO standard and referred only to federal legislation
In Matsuura Machiner Corp v Hapag Lloyd A G 21 NYK an ocean carrier agreed to
carry cargo under a through bill of lading from Japan to Toronto NYK then contracted with
Melburn for carriage of the cargo by truck to Mississauga where it would be loaded onto a
vessel Upon arrival by truck the goods were found to be damaged The plaintiffs sued both
NYK and Melburn The appellants agreed that the circumstances in ITO were not present in this
case but argued that jurisdiction should be found in s 22(2)(f) and s 23 of the Federal Court
Act Justice Pratte speaking for the Court held that s 22(2)(f) did not apply as the claims
against Melburn did not arise out of an agreement relating to the carriage of goods on a ship
under a through bill oflading as required in that subsection Further s 23 could not apply since
there was no federal law to support the claims made against Melburn
The Supreme Court of Canada almost had a third opportunity to review these issues in
the recent case of Pakistan National Shipping Corp v Canada22bull Leave to appeal was granted
but the appeal was eventually discontinued23 The disputed claim in this case involved a third
20 pp 49-50 21 (1997)211 NR 156 (CA) 22 [1997] 3 FC 601 23 [1997] SCCA No 375 (QL)
13 Jurisdiction amp Multi-modal Transport McINNES COOPER
party claim for negligent misrepresentation in relation to containers used to ship oil by sea The
canola oil in the containers leaked while being carried on the plaintiffs ship causing damage
The defendant shipper claimed indemnification from the container supplier Attempting to apply
ITO the Court of Appeal held that the claim was integrally connected to the maritime
jurisdiction of the Federal Court Stone JA referred to the decisions in both ITO and Monk
then stated
It would thus appear that the root of the claims in the main action for losses incurred by reason of the collapse of the plastic drums in stow during the voyage to Pakistan was the sufficiency of the drums themselves to withstand the conditions experienced by the ship In my view the third party claim is integrally connected to the Courts admiralty and maritime jurisdiction24
The main contract was for the carriage of goods by sea thus the Courts jurisdiction extended to
the alleged tort committed by the supplier of the oil drums
A recent decision on the topic of multi-modal transport is the Court ofAppeal decision in
Garfield Container Transport Inc v Uniroyal Goodrich Canada25 In that case the plaintiff
sued when it was not paid for its services in trucking cargo from Kitchener Ontario to a Port in
New Jersey The defendant had sold the goods in question to a company who then contracted
with a third company for the transportation of the goods The third company did not pay the
plaintiff for its services in relation to that transportation Denault J speaking for the Court
stated that this case was similar to that in Matsuura Machiner The Federal Court had no
jurisdiction over a claim relating only to road transportation of goods
ANALYSIS
Under the law established in ITO there are three pre-requisites to finding jurisdiction
over cases involving multi-modal transportation 1) a statutory grant ofjurisdiction by the federal
Parliament 2) an existing body of federal law essential to the disposition of the case and 3) an
existing body of law which is a law of Canada as defined in s 101 of the Constitution Act
1867
Many of the decisions after ITO have ignored the three-pronged test mandated by ITO
focussing instead on the words integrally connected to maritime law Justice McIntyres
24 p625 25 (1998)229 NR 201
14 Jurisdiction amp Multi-modal Transport MellflfB COOPER
decision did centre on prong 2 of the test but requirements 1 and 3 were easily met in that case
Where the case involves some aspect of maritime law as in ITO the Supreme Court of Canada
has decided that s 22 of the Federal Court Act meets the requirement for a statutory grant of
jurisdiction However where maritime law is not directly involved in the claim (as may have
been the case in both the Matsuura Machiner and the Garfield Container cases) the Court must
look further for a statutory grant of jurisdiction If there is no statutory law there is no
jurisdiction
Where the claim is related to maritime law the Court must then consider whether the
claim falls within either category of maritime law as defined in s 2 of the Federal Court Act If
the defendant and the plaintiff were both parties to a contract of carriage the claim will fall
within the first category of law as exercised by the High Court of England in 1934 on its
Admiralty side Where however one party was not obliged to perfonn any obligation under the
contract for carriage the Court must then consider the second category ofmaritime law
The second category includes unlimited jurisdiction in relation to maritime and admiralty
matters which jurisdiction is pennitted to evolve in the context of modern commerce and
shipping - enter the limits imposed by the division of powers in the Constitution Act 1867 It is
here that the Court must consider whether the claim is integrally connected with maritime
matters
While there is not yet an established rule to detennine which cases will be integrally
connected and which will not ITO and Monk provide helpful guidelines In particular the Court
must consider whether the essence of the claim is a matter that falls within provincial jurisdiction
under s 92 of the Constitution Act 1867 The Court must also consider whether it is the type of
claim traditionally connected with maritime matters (unloading and storage of cargo at a Port as
in ITO) or another federal power In Watt amp Scott Inc v Chantry Shipping for example Joyal
J held that the matter was within federal jurisdiction as a result of both the Railway Act and the
Federal Court Act Considerations of whether a particular claim has an integral connection to
maritime matters involves not only consideration of traditional and modern maritime law but
also consideration of the pith and substance of the matter to detennine whether it was a matter
delegated to the provinces exclusive jurisdiction or a matter over which the federal Parliament
retained jurisdiction Each case should be decided in light of the division of powers in s 91 and
s 92 of the Constitution Act 1867
15 Jurisdiction amp Multi-modal Transport McINNBS COOPBR
The third requirement is that the law in requirement 2 be a law of Canada as defined in
section 101 of the Constitution Act 1867 If the issue under requirement 2 is met there will be
no issue under requirement 3 If the matter is essentially federal in nature then the essential
law will be a law of Canada pursuant to s 101
Coming back to the example used at the outset we are now able to determine whether
As claims fall within the jurisdiction of the Federal Court If A wished to sue B for non~
payment the Federal Court would not have jurisdiction over that claim The arrangement
between B and A was in essence a contract for the sale of goods and thus falls properly within
the jurisdiction of provincial courts and not the Federal Court If however A wished to sue C for
the loss the claim would be within Federal Court jurisdiction A had contracted with C for
shipment of the widgets from Sydney to Aulac New Brunswick The essence of this
arrangement was for the carriage of goods by sea - A needed to transport widgets across the
world to B
Can C then claim indemnity from the various carriers involved C could certainly sue D
for any damage caused during the sea voyage and E for damage occurring during unloading or
storage since that is integrally connected to maritime matters under the ITO standard Could C
also bring an action for indemnity against F F is a railway company extending beyond the
limits ofa province within the meaning of s 23 of the Federal Court Act This brings Cs claim
against F also within the jurisdiction of the Federal Court not because of an integral connection
with maritime matters but because the Court has jurisdiction over the claim separate and apart
from any connection to the contract for the carriage of goods by sea
(2391211)
JCllcc
Jurisdiction amp Multi-modal Transport 11 MclRRES COOPER
relief is made or a remedy is sought under an act of parliament or otherwise in relation to any matter coming within any of the following classes of subjects namely
(a) bills of exchange and promissory notes where the Crown is a party to the proceedings
(b) aeronautics and
(c) works and undertakings connecting a province with any other province or extending beyond the limits of a prOVInce
Joyal J applied the ITO test requiring 3 pre-requisites to a finding of jurisdiction To meet the
first requirement of a statutory grant ofjurisdiction Joyal J focussed not on the s 22 jurisdiction
over maritime matters generally but on whether the business of the railway company brought it
within the language of s 23 Joyal J held that the railway company was an undertaking
extending beyond the limits of Manitoba into Alabama bringing it within s 23( c) In meeting
the final two requirements (an existing body of federal law a law as defined in s 101 of the
Constitution Act 1867) s 262 of the Railway Act imposing a duty of due diligence on railway
companies was sufficient to meet both the second and third pre-requisite and was held to apply
in this case
Not limiting his analysis to ITO Joyal J went back to the basics of federal legislation In
this manner the decision looks at the roots of jurisdictional issues to see whether specific
legislation enacted by Parliament existed to deal with the issue This analysis avoided any
consideration of whether the claim against the railway was integrally connected to maritime
matters While this situation will not arise in all cases certainly many trucking and railway
companies extend beyond the limits of a province and may fall within s 23 Perhaps Joyal J
got it right by attempting to focus on federal legislation for a finding of jurisdiction instead of
relying solely on the integral connection standard from ITO
Marley Co v Cast North America (J 983) Inc 19 involved a similar action against a
defendant railroad The plaintiff contracted for the carriage of goods from Illinois to Holland
The carriers under that contract contracted with the defendant railway company to carry the
goods to Montreal for shipment by sea The railway company attempted to produce evidence
showing that it would not have carried the container to Montreal by itself but would have
19 (1995)94 FTR 45
Jurisdiction amp Multi-modal Transport 12 1101111188 COOP8R
retained another carrier This fact of course would not allow the Court to exercise jurisdiction
under s 23 of the Federal Court Act In determining whether the Court had jurisdiction Nadon
J examined s 22 of the Federal Court Act Nadon J distinguished this case from others by
stating that the defendant railway company had not been a party to any contract of carriage with
the plaintiffs Instead the railway company had contracted with another defendant only for
shipment by rail The plaintiffs goods here would have eventually been carried by rail ship
and truck Justice Nadon concluded
I am certainly not prepared to accept that a contract to carry goods by rail or by truck in the United States Canada or Europe is within the maritime jurisdiction of this Court simply because they are part of the on-going movement ofa container20
According to the decision the claim against this railway company did not fall within the
jurisdiction of s 22 of the Federal Court Act however there was insufficient evidence to
determine whether the company fell within the language used in s 23 of the Act As a result the
motion for a dismissal of the claim was dismissed The Court refused once again to look solely
at the ITO standard and referred only to federal legislation
In Matsuura Machiner Corp v Hapag Lloyd A G 21 NYK an ocean carrier agreed to
carry cargo under a through bill of lading from Japan to Toronto NYK then contracted with
Melburn for carriage of the cargo by truck to Mississauga where it would be loaded onto a
vessel Upon arrival by truck the goods were found to be damaged The plaintiffs sued both
NYK and Melburn The appellants agreed that the circumstances in ITO were not present in this
case but argued that jurisdiction should be found in s 22(2)(f) and s 23 of the Federal Court
Act Justice Pratte speaking for the Court held that s 22(2)(f) did not apply as the claims
against Melburn did not arise out of an agreement relating to the carriage of goods on a ship
under a through bill oflading as required in that subsection Further s 23 could not apply since
there was no federal law to support the claims made against Melburn
The Supreme Court of Canada almost had a third opportunity to review these issues in
the recent case of Pakistan National Shipping Corp v Canada22bull Leave to appeal was granted
but the appeal was eventually discontinued23 The disputed claim in this case involved a third
20 pp 49-50 21 (1997)211 NR 156 (CA) 22 [1997] 3 FC 601 23 [1997] SCCA No 375 (QL)
13 Jurisdiction amp Multi-modal Transport McINNES COOPER
party claim for negligent misrepresentation in relation to containers used to ship oil by sea The
canola oil in the containers leaked while being carried on the plaintiffs ship causing damage
The defendant shipper claimed indemnification from the container supplier Attempting to apply
ITO the Court of Appeal held that the claim was integrally connected to the maritime
jurisdiction of the Federal Court Stone JA referred to the decisions in both ITO and Monk
then stated
It would thus appear that the root of the claims in the main action for losses incurred by reason of the collapse of the plastic drums in stow during the voyage to Pakistan was the sufficiency of the drums themselves to withstand the conditions experienced by the ship In my view the third party claim is integrally connected to the Courts admiralty and maritime jurisdiction24
The main contract was for the carriage of goods by sea thus the Courts jurisdiction extended to
the alleged tort committed by the supplier of the oil drums
A recent decision on the topic of multi-modal transport is the Court ofAppeal decision in
Garfield Container Transport Inc v Uniroyal Goodrich Canada25 In that case the plaintiff
sued when it was not paid for its services in trucking cargo from Kitchener Ontario to a Port in
New Jersey The defendant had sold the goods in question to a company who then contracted
with a third company for the transportation of the goods The third company did not pay the
plaintiff for its services in relation to that transportation Denault J speaking for the Court
stated that this case was similar to that in Matsuura Machiner The Federal Court had no
jurisdiction over a claim relating only to road transportation of goods
ANALYSIS
Under the law established in ITO there are three pre-requisites to finding jurisdiction
over cases involving multi-modal transportation 1) a statutory grant ofjurisdiction by the federal
Parliament 2) an existing body of federal law essential to the disposition of the case and 3) an
existing body of law which is a law of Canada as defined in s 101 of the Constitution Act
1867
Many of the decisions after ITO have ignored the three-pronged test mandated by ITO
focussing instead on the words integrally connected to maritime law Justice McIntyres
24 p625 25 (1998)229 NR 201
14 Jurisdiction amp Multi-modal Transport MellflfB COOPER
decision did centre on prong 2 of the test but requirements 1 and 3 were easily met in that case
Where the case involves some aspect of maritime law as in ITO the Supreme Court of Canada
has decided that s 22 of the Federal Court Act meets the requirement for a statutory grant of
jurisdiction However where maritime law is not directly involved in the claim (as may have
been the case in both the Matsuura Machiner and the Garfield Container cases) the Court must
look further for a statutory grant of jurisdiction If there is no statutory law there is no
jurisdiction
Where the claim is related to maritime law the Court must then consider whether the
claim falls within either category of maritime law as defined in s 2 of the Federal Court Act If
the defendant and the plaintiff were both parties to a contract of carriage the claim will fall
within the first category of law as exercised by the High Court of England in 1934 on its
Admiralty side Where however one party was not obliged to perfonn any obligation under the
contract for carriage the Court must then consider the second category ofmaritime law
The second category includes unlimited jurisdiction in relation to maritime and admiralty
matters which jurisdiction is pennitted to evolve in the context of modern commerce and
shipping - enter the limits imposed by the division of powers in the Constitution Act 1867 It is
here that the Court must consider whether the claim is integrally connected with maritime
matters
While there is not yet an established rule to detennine which cases will be integrally
connected and which will not ITO and Monk provide helpful guidelines In particular the Court
must consider whether the essence of the claim is a matter that falls within provincial jurisdiction
under s 92 of the Constitution Act 1867 The Court must also consider whether it is the type of
claim traditionally connected with maritime matters (unloading and storage of cargo at a Port as
in ITO) or another federal power In Watt amp Scott Inc v Chantry Shipping for example Joyal
J held that the matter was within federal jurisdiction as a result of both the Railway Act and the
Federal Court Act Considerations of whether a particular claim has an integral connection to
maritime matters involves not only consideration of traditional and modern maritime law but
also consideration of the pith and substance of the matter to detennine whether it was a matter
delegated to the provinces exclusive jurisdiction or a matter over which the federal Parliament
retained jurisdiction Each case should be decided in light of the division of powers in s 91 and
s 92 of the Constitution Act 1867
15 Jurisdiction amp Multi-modal Transport McINNBS COOPBR
The third requirement is that the law in requirement 2 be a law of Canada as defined in
section 101 of the Constitution Act 1867 If the issue under requirement 2 is met there will be
no issue under requirement 3 If the matter is essentially federal in nature then the essential
law will be a law of Canada pursuant to s 101
Coming back to the example used at the outset we are now able to determine whether
As claims fall within the jurisdiction of the Federal Court If A wished to sue B for non~
payment the Federal Court would not have jurisdiction over that claim The arrangement
between B and A was in essence a contract for the sale of goods and thus falls properly within
the jurisdiction of provincial courts and not the Federal Court If however A wished to sue C for
the loss the claim would be within Federal Court jurisdiction A had contracted with C for
shipment of the widgets from Sydney to Aulac New Brunswick The essence of this
arrangement was for the carriage of goods by sea - A needed to transport widgets across the
world to B
Can C then claim indemnity from the various carriers involved C could certainly sue D
for any damage caused during the sea voyage and E for damage occurring during unloading or
storage since that is integrally connected to maritime matters under the ITO standard Could C
also bring an action for indemnity against F F is a railway company extending beyond the
limits ofa province within the meaning of s 23 of the Federal Court Act This brings Cs claim
against F also within the jurisdiction of the Federal Court not because of an integral connection
with maritime matters but because the Court has jurisdiction over the claim separate and apart
from any connection to the contract for the carriage of goods by sea
(2391211)
JCllcc
Jurisdiction amp Multi-modal Transport 12 1101111188 COOP8R
retained another carrier This fact of course would not allow the Court to exercise jurisdiction
under s 23 of the Federal Court Act In determining whether the Court had jurisdiction Nadon
J examined s 22 of the Federal Court Act Nadon J distinguished this case from others by
stating that the defendant railway company had not been a party to any contract of carriage with
the plaintiffs Instead the railway company had contracted with another defendant only for
shipment by rail The plaintiffs goods here would have eventually been carried by rail ship
and truck Justice Nadon concluded
I am certainly not prepared to accept that a contract to carry goods by rail or by truck in the United States Canada or Europe is within the maritime jurisdiction of this Court simply because they are part of the on-going movement ofa container20
According to the decision the claim against this railway company did not fall within the
jurisdiction of s 22 of the Federal Court Act however there was insufficient evidence to
determine whether the company fell within the language used in s 23 of the Act As a result the
motion for a dismissal of the claim was dismissed The Court refused once again to look solely
at the ITO standard and referred only to federal legislation
In Matsuura Machiner Corp v Hapag Lloyd A G 21 NYK an ocean carrier agreed to
carry cargo under a through bill of lading from Japan to Toronto NYK then contracted with
Melburn for carriage of the cargo by truck to Mississauga where it would be loaded onto a
vessel Upon arrival by truck the goods were found to be damaged The plaintiffs sued both
NYK and Melburn The appellants agreed that the circumstances in ITO were not present in this
case but argued that jurisdiction should be found in s 22(2)(f) and s 23 of the Federal Court
Act Justice Pratte speaking for the Court held that s 22(2)(f) did not apply as the claims
against Melburn did not arise out of an agreement relating to the carriage of goods on a ship
under a through bill oflading as required in that subsection Further s 23 could not apply since
there was no federal law to support the claims made against Melburn
The Supreme Court of Canada almost had a third opportunity to review these issues in
the recent case of Pakistan National Shipping Corp v Canada22bull Leave to appeal was granted
but the appeal was eventually discontinued23 The disputed claim in this case involved a third
20 pp 49-50 21 (1997)211 NR 156 (CA) 22 [1997] 3 FC 601 23 [1997] SCCA No 375 (QL)
13 Jurisdiction amp Multi-modal Transport McINNES COOPER
party claim for negligent misrepresentation in relation to containers used to ship oil by sea The
canola oil in the containers leaked while being carried on the plaintiffs ship causing damage
The defendant shipper claimed indemnification from the container supplier Attempting to apply
ITO the Court of Appeal held that the claim was integrally connected to the maritime
jurisdiction of the Federal Court Stone JA referred to the decisions in both ITO and Monk
then stated
It would thus appear that the root of the claims in the main action for losses incurred by reason of the collapse of the plastic drums in stow during the voyage to Pakistan was the sufficiency of the drums themselves to withstand the conditions experienced by the ship In my view the third party claim is integrally connected to the Courts admiralty and maritime jurisdiction24
The main contract was for the carriage of goods by sea thus the Courts jurisdiction extended to
the alleged tort committed by the supplier of the oil drums
A recent decision on the topic of multi-modal transport is the Court ofAppeal decision in
Garfield Container Transport Inc v Uniroyal Goodrich Canada25 In that case the plaintiff
sued when it was not paid for its services in trucking cargo from Kitchener Ontario to a Port in
New Jersey The defendant had sold the goods in question to a company who then contracted
with a third company for the transportation of the goods The third company did not pay the
plaintiff for its services in relation to that transportation Denault J speaking for the Court
stated that this case was similar to that in Matsuura Machiner The Federal Court had no
jurisdiction over a claim relating only to road transportation of goods
ANALYSIS
Under the law established in ITO there are three pre-requisites to finding jurisdiction
over cases involving multi-modal transportation 1) a statutory grant ofjurisdiction by the federal
Parliament 2) an existing body of federal law essential to the disposition of the case and 3) an
existing body of law which is a law of Canada as defined in s 101 of the Constitution Act
1867
Many of the decisions after ITO have ignored the three-pronged test mandated by ITO
focussing instead on the words integrally connected to maritime law Justice McIntyres
24 p625 25 (1998)229 NR 201
14 Jurisdiction amp Multi-modal Transport MellflfB COOPER
decision did centre on prong 2 of the test but requirements 1 and 3 were easily met in that case
Where the case involves some aspect of maritime law as in ITO the Supreme Court of Canada
has decided that s 22 of the Federal Court Act meets the requirement for a statutory grant of
jurisdiction However where maritime law is not directly involved in the claim (as may have
been the case in both the Matsuura Machiner and the Garfield Container cases) the Court must
look further for a statutory grant of jurisdiction If there is no statutory law there is no
jurisdiction
Where the claim is related to maritime law the Court must then consider whether the
claim falls within either category of maritime law as defined in s 2 of the Federal Court Act If
the defendant and the plaintiff were both parties to a contract of carriage the claim will fall
within the first category of law as exercised by the High Court of England in 1934 on its
Admiralty side Where however one party was not obliged to perfonn any obligation under the
contract for carriage the Court must then consider the second category ofmaritime law
The second category includes unlimited jurisdiction in relation to maritime and admiralty
matters which jurisdiction is pennitted to evolve in the context of modern commerce and
shipping - enter the limits imposed by the division of powers in the Constitution Act 1867 It is
here that the Court must consider whether the claim is integrally connected with maritime
matters
While there is not yet an established rule to detennine which cases will be integrally
connected and which will not ITO and Monk provide helpful guidelines In particular the Court
must consider whether the essence of the claim is a matter that falls within provincial jurisdiction
under s 92 of the Constitution Act 1867 The Court must also consider whether it is the type of
claim traditionally connected with maritime matters (unloading and storage of cargo at a Port as
in ITO) or another federal power In Watt amp Scott Inc v Chantry Shipping for example Joyal
J held that the matter was within federal jurisdiction as a result of both the Railway Act and the
Federal Court Act Considerations of whether a particular claim has an integral connection to
maritime matters involves not only consideration of traditional and modern maritime law but
also consideration of the pith and substance of the matter to detennine whether it was a matter
delegated to the provinces exclusive jurisdiction or a matter over which the federal Parliament
retained jurisdiction Each case should be decided in light of the division of powers in s 91 and
s 92 of the Constitution Act 1867
15 Jurisdiction amp Multi-modal Transport McINNBS COOPBR
The third requirement is that the law in requirement 2 be a law of Canada as defined in
section 101 of the Constitution Act 1867 If the issue under requirement 2 is met there will be
no issue under requirement 3 If the matter is essentially federal in nature then the essential
law will be a law of Canada pursuant to s 101
Coming back to the example used at the outset we are now able to determine whether
As claims fall within the jurisdiction of the Federal Court If A wished to sue B for non~
payment the Federal Court would not have jurisdiction over that claim The arrangement
between B and A was in essence a contract for the sale of goods and thus falls properly within
the jurisdiction of provincial courts and not the Federal Court If however A wished to sue C for
the loss the claim would be within Federal Court jurisdiction A had contracted with C for
shipment of the widgets from Sydney to Aulac New Brunswick The essence of this
arrangement was for the carriage of goods by sea - A needed to transport widgets across the
world to B
Can C then claim indemnity from the various carriers involved C could certainly sue D
for any damage caused during the sea voyage and E for damage occurring during unloading or
storage since that is integrally connected to maritime matters under the ITO standard Could C
also bring an action for indemnity against F F is a railway company extending beyond the
limits ofa province within the meaning of s 23 of the Federal Court Act This brings Cs claim
against F also within the jurisdiction of the Federal Court not because of an integral connection
with maritime matters but because the Court has jurisdiction over the claim separate and apart
from any connection to the contract for the carriage of goods by sea
(2391211)
JCllcc
13 Jurisdiction amp Multi-modal Transport McINNES COOPER
party claim for negligent misrepresentation in relation to containers used to ship oil by sea The
canola oil in the containers leaked while being carried on the plaintiffs ship causing damage
The defendant shipper claimed indemnification from the container supplier Attempting to apply
ITO the Court of Appeal held that the claim was integrally connected to the maritime
jurisdiction of the Federal Court Stone JA referred to the decisions in both ITO and Monk
then stated
It would thus appear that the root of the claims in the main action for losses incurred by reason of the collapse of the plastic drums in stow during the voyage to Pakistan was the sufficiency of the drums themselves to withstand the conditions experienced by the ship In my view the third party claim is integrally connected to the Courts admiralty and maritime jurisdiction24
The main contract was for the carriage of goods by sea thus the Courts jurisdiction extended to
the alleged tort committed by the supplier of the oil drums
A recent decision on the topic of multi-modal transport is the Court ofAppeal decision in
Garfield Container Transport Inc v Uniroyal Goodrich Canada25 In that case the plaintiff
sued when it was not paid for its services in trucking cargo from Kitchener Ontario to a Port in
New Jersey The defendant had sold the goods in question to a company who then contracted
with a third company for the transportation of the goods The third company did not pay the
plaintiff for its services in relation to that transportation Denault J speaking for the Court
stated that this case was similar to that in Matsuura Machiner The Federal Court had no
jurisdiction over a claim relating only to road transportation of goods
ANALYSIS
Under the law established in ITO there are three pre-requisites to finding jurisdiction
over cases involving multi-modal transportation 1) a statutory grant ofjurisdiction by the federal
Parliament 2) an existing body of federal law essential to the disposition of the case and 3) an
existing body of law which is a law of Canada as defined in s 101 of the Constitution Act
1867
Many of the decisions after ITO have ignored the three-pronged test mandated by ITO
focussing instead on the words integrally connected to maritime law Justice McIntyres
24 p625 25 (1998)229 NR 201
14 Jurisdiction amp Multi-modal Transport MellflfB COOPER
decision did centre on prong 2 of the test but requirements 1 and 3 were easily met in that case
Where the case involves some aspect of maritime law as in ITO the Supreme Court of Canada
has decided that s 22 of the Federal Court Act meets the requirement for a statutory grant of
jurisdiction However where maritime law is not directly involved in the claim (as may have
been the case in both the Matsuura Machiner and the Garfield Container cases) the Court must
look further for a statutory grant of jurisdiction If there is no statutory law there is no
jurisdiction
Where the claim is related to maritime law the Court must then consider whether the
claim falls within either category of maritime law as defined in s 2 of the Federal Court Act If
the defendant and the plaintiff were both parties to a contract of carriage the claim will fall
within the first category of law as exercised by the High Court of England in 1934 on its
Admiralty side Where however one party was not obliged to perfonn any obligation under the
contract for carriage the Court must then consider the second category ofmaritime law
The second category includes unlimited jurisdiction in relation to maritime and admiralty
matters which jurisdiction is pennitted to evolve in the context of modern commerce and
shipping - enter the limits imposed by the division of powers in the Constitution Act 1867 It is
here that the Court must consider whether the claim is integrally connected with maritime
matters
While there is not yet an established rule to detennine which cases will be integrally
connected and which will not ITO and Monk provide helpful guidelines In particular the Court
must consider whether the essence of the claim is a matter that falls within provincial jurisdiction
under s 92 of the Constitution Act 1867 The Court must also consider whether it is the type of
claim traditionally connected with maritime matters (unloading and storage of cargo at a Port as
in ITO) or another federal power In Watt amp Scott Inc v Chantry Shipping for example Joyal
J held that the matter was within federal jurisdiction as a result of both the Railway Act and the
Federal Court Act Considerations of whether a particular claim has an integral connection to
maritime matters involves not only consideration of traditional and modern maritime law but
also consideration of the pith and substance of the matter to detennine whether it was a matter
delegated to the provinces exclusive jurisdiction or a matter over which the federal Parliament
retained jurisdiction Each case should be decided in light of the division of powers in s 91 and
s 92 of the Constitution Act 1867
15 Jurisdiction amp Multi-modal Transport McINNBS COOPBR
The third requirement is that the law in requirement 2 be a law of Canada as defined in
section 101 of the Constitution Act 1867 If the issue under requirement 2 is met there will be
no issue under requirement 3 If the matter is essentially federal in nature then the essential
law will be a law of Canada pursuant to s 101
Coming back to the example used at the outset we are now able to determine whether
As claims fall within the jurisdiction of the Federal Court If A wished to sue B for non~
payment the Federal Court would not have jurisdiction over that claim The arrangement
between B and A was in essence a contract for the sale of goods and thus falls properly within
the jurisdiction of provincial courts and not the Federal Court If however A wished to sue C for
the loss the claim would be within Federal Court jurisdiction A had contracted with C for
shipment of the widgets from Sydney to Aulac New Brunswick The essence of this
arrangement was for the carriage of goods by sea - A needed to transport widgets across the
world to B
Can C then claim indemnity from the various carriers involved C could certainly sue D
for any damage caused during the sea voyage and E for damage occurring during unloading or
storage since that is integrally connected to maritime matters under the ITO standard Could C
also bring an action for indemnity against F F is a railway company extending beyond the
limits ofa province within the meaning of s 23 of the Federal Court Act This brings Cs claim
against F also within the jurisdiction of the Federal Court not because of an integral connection
with maritime matters but because the Court has jurisdiction over the claim separate and apart
from any connection to the contract for the carriage of goods by sea
(2391211)
JCllcc
14 Jurisdiction amp Multi-modal Transport MellflfB COOPER
decision did centre on prong 2 of the test but requirements 1 and 3 were easily met in that case
Where the case involves some aspect of maritime law as in ITO the Supreme Court of Canada
has decided that s 22 of the Federal Court Act meets the requirement for a statutory grant of
jurisdiction However where maritime law is not directly involved in the claim (as may have
been the case in both the Matsuura Machiner and the Garfield Container cases) the Court must
look further for a statutory grant of jurisdiction If there is no statutory law there is no
jurisdiction
Where the claim is related to maritime law the Court must then consider whether the
claim falls within either category of maritime law as defined in s 2 of the Federal Court Act If
the defendant and the plaintiff were both parties to a contract of carriage the claim will fall
within the first category of law as exercised by the High Court of England in 1934 on its
Admiralty side Where however one party was not obliged to perfonn any obligation under the
contract for carriage the Court must then consider the second category ofmaritime law
The second category includes unlimited jurisdiction in relation to maritime and admiralty
matters which jurisdiction is pennitted to evolve in the context of modern commerce and
shipping - enter the limits imposed by the division of powers in the Constitution Act 1867 It is
here that the Court must consider whether the claim is integrally connected with maritime
matters
While there is not yet an established rule to detennine which cases will be integrally
connected and which will not ITO and Monk provide helpful guidelines In particular the Court
must consider whether the essence of the claim is a matter that falls within provincial jurisdiction
under s 92 of the Constitution Act 1867 The Court must also consider whether it is the type of
claim traditionally connected with maritime matters (unloading and storage of cargo at a Port as
in ITO) or another federal power In Watt amp Scott Inc v Chantry Shipping for example Joyal
J held that the matter was within federal jurisdiction as a result of both the Railway Act and the
Federal Court Act Considerations of whether a particular claim has an integral connection to
maritime matters involves not only consideration of traditional and modern maritime law but
also consideration of the pith and substance of the matter to detennine whether it was a matter
delegated to the provinces exclusive jurisdiction or a matter over which the federal Parliament
retained jurisdiction Each case should be decided in light of the division of powers in s 91 and
s 92 of the Constitution Act 1867
15 Jurisdiction amp Multi-modal Transport McINNBS COOPBR
The third requirement is that the law in requirement 2 be a law of Canada as defined in
section 101 of the Constitution Act 1867 If the issue under requirement 2 is met there will be
no issue under requirement 3 If the matter is essentially federal in nature then the essential
law will be a law of Canada pursuant to s 101
Coming back to the example used at the outset we are now able to determine whether
As claims fall within the jurisdiction of the Federal Court If A wished to sue B for non~
payment the Federal Court would not have jurisdiction over that claim The arrangement
between B and A was in essence a contract for the sale of goods and thus falls properly within
the jurisdiction of provincial courts and not the Federal Court If however A wished to sue C for
the loss the claim would be within Federal Court jurisdiction A had contracted with C for
shipment of the widgets from Sydney to Aulac New Brunswick The essence of this
arrangement was for the carriage of goods by sea - A needed to transport widgets across the
world to B
Can C then claim indemnity from the various carriers involved C could certainly sue D
for any damage caused during the sea voyage and E for damage occurring during unloading or
storage since that is integrally connected to maritime matters under the ITO standard Could C
also bring an action for indemnity against F F is a railway company extending beyond the
limits ofa province within the meaning of s 23 of the Federal Court Act This brings Cs claim
against F also within the jurisdiction of the Federal Court not because of an integral connection
with maritime matters but because the Court has jurisdiction over the claim separate and apart
from any connection to the contract for the carriage of goods by sea
(2391211)
JCllcc
15 Jurisdiction amp Multi-modal Transport McINNBS COOPBR
The third requirement is that the law in requirement 2 be a law of Canada as defined in
section 101 of the Constitution Act 1867 If the issue under requirement 2 is met there will be
no issue under requirement 3 If the matter is essentially federal in nature then the essential
law will be a law of Canada pursuant to s 101
Coming back to the example used at the outset we are now able to determine whether
As claims fall within the jurisdiction of the Federal Court If A wished to sue B for non~
payment the Federal Court would not have jurisdiction over that claim The arrangement
between B and A was in essence a contract for the sale of goods and thus falls properly within
the jurisdiction of provincial courts and not the Federal Court If however A wished to sue C for
the loss the claim would be within Federal Court jurisdiction A had contracted with C for
shipment of the widgets from Sydney to Aulac New Brunswick The essence of this
arrangement was for the carriage of goods by sea - A needed to transport widgets across the
world to B
Can C then claim indemnity from the various carriers involved C could certainly sue D
for any damage caused during the sea voyage and E for damage occurring during unloading or
storage since that is integrally connected to maritime matters under the ITO standard Could C
also bring an action for indemnity against F F is a railway company extending beyond the
limits ofa province within the meaning of s 23 of the Federal Court Act This brings Cs claim
against F also within the jurisdiction of the Federal Court not because of an integral connection
with maritime matters but because the Court has jurisdiction over the claim separate and apart
from any connection to the contract for the carriage of goods by sea
(2391211)
JCllcc
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