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Federal Court
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Cour fédérale
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Date: 20121001
Docket: T-761-11
Citation: 2012 FC 725
PRESENT: Roger R. Lafrenière, Esquire
Prothonotary
BETWEEN:
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THE ADMINISTRATOR OF THE
SHIP-SOURCE OIL POLLUTION FUND
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Plaintiff
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HER MAJESTY THE QUEEN
IN RIGHT OF THE PROVINCE OF
BRITISH COLUMBIA AS REPRESENTED
BY THE MINISTER OF FINANCE
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Defendant
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and
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J. PAUL THOMAS AND
THE ATTORNEY GENERAL OF
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Third Parties
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REASONS FOR ORDER AND ORDER
[1] The Plaintiff, the Administrator of the Ship-Source Oil Pollution Fund (the Administrator), seeks to recover from the Defendant, Her Majesty the Queen in Right of the Province of British Columbia, as represented by the Minister of Finance (the BC Crown), costs it paid to Her Majesty the Queen in Right of Canada (Canada) for cleaning up oil pollution leaking from the Vessel “Seaspan Chinook”, also known as “La Lumiere” (the “Seaspan Chinook”), which sank at
[2] After filing its statement of defence and issuing third party claims against
[3] Both the Administrator and
Facts
[4] The allegations made in the Statement of Claim issued on May 3, 2011 may be summarized as follows.
[5] The registered and beneficial owner of the “Seaspan Chinook” was the Maritime Heritage Society of Vancouver (Society) until the Society was dissolved on June 23, 2006.
[6] Since the Society’s assets were not transferred to another charitable society prior to its dissolution, the Society’s assets, including the “Seaspan Chinook”, are alleged to have passed to the BC Crown by operation of section 73 of the Society Act of British Columbia [BC Society Act], RSBC 1996, c 433.
[7] The BC Crown served a notice on the Society on August 15, 2007 that several vessels registered to the Society, including the “Seaspan Chinook”, were trespassing at
[8] The “Seaspan Chinook” was in a seriously deteriorated condition and contained a substantial amount of diesel fuel and other pollutants prior to her sinking at
[9] The Canadian Coast Guard took remediation steps to minimize damage from the pollution caused by the “Seaspan Chinook”, and
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[11] The Administrator claims to be subrogated to the rights of
Subsequent pleadings
[12] In her Statement of Defence, the BC Crown denies ownership of the “Seaspan Chinook”. Instead, she alleges that the Society had abandoned the vessel at
[13] The BC Crown claims in the alternative that Thomas represented to the BC Crown that he was actively taking steps to restore the Society, and had exercised possession and control of the “Seaspan Chinook”, and was therefore the owner at the time of sinking.
[14] As a further alternative, the BC Crown alleges that if it was the owner,
[15] The BC Crown filed third party claims against Thomas and
[16] On November 1, 2011,
Principles Applicable on a Motion to Strike
[17] There is no dispute between the parties that the test upon a motion to strike is whether it is plain and obvious that the claim discloses no reasonable cause of action, as set out by the Supreme Court of Canada in Hunt v Carey Canada Inc [1990] 2 SCR 959.
[18] For the purpose of a motion to strike under Rule 221(1)(a), all allegations of fact in the impugned pleading must be accepted as proved, unless patently ridiculous or incapable of proof. The “plain and obvious” test applies to the striking out of pleadings for lack of jurisdiction in the same manner as it applies to the striking of a claim on the ground that it discloses no reasonable cause of action: Hodgson v Ermineskin Indian Band No 942 2000 CanLII 15066 (FC), (2000) 180 FTR 285 at para 10, aff'd (2000), 267 NR 143 (FCA) at para 4.
[19] The BC Crown submits that the onus is on the Administrator in the present motion to establish that the Federal Court has jurisdiction over both the parties and the cause ofaction. I disagree. Although the Administrator will ultimately have to establish this Court’s jurisdiction to succeed at trial, the fundamental rule is that, on a motion to strike, the Court is narrowly limited to assessing the threshold issue of whether a genuine issue exists as to material facts requiring a trial: Edell v Canada, 2010 FCA 26. It follows that the BC Crown bears the burden on this motion of demonstrating the lack of a genuine issue based on the facts as pleaded in the Statement of Claim.
Issues to be determined
[20] The BC Crown and the Administrator have framed the issues of jurisdiction in different ways. Their arguments can neatly be broken down into two issues: (a) personal jurisdiction; and (b) subject matter jurisdiction.
(a) In personam jurisdiction over the BC Crown
[21] The BC Crown submits that the Federal Court does not have a statutory grant of in personam jurisdiction over the BC Crown for the following reasons.
[22] First, section 17(1) of the Federal Courts Act, RSC 1985, c F-7 [FCA] confers concurrent jurisdiction on the Federal Court in all claims against the Crown. However, it is settled law that the “Crown” within the FCA does not include a province.
[23] Second, section 19 of the FCA only confers in personam jurisdiction on the Federal Court in cases regarding “controversies between
[24] Third, according to the BC Crown, there is no statutory provision which confers the Federal Court with jurisdiction to hear a claim from a party against a province. Althoughsection 22 of the FCA gives the Federal Court concurrent jurisdiction with respect to maritime law and matters concerning navigation and shipping, the jurisdiction is limited as “between subject and subject as well as otherwise”. In Lubicon Lake Indian Band v Canada, [1981] 2 FC 317, [1980] FCJ No 272 (QL) at par. 8 [Lubicon], Mr. Justice Addy concluded, based on the common rule of provincial immunity from general enactment, that “by no stretch of the imagination could the Crown in right of Alberta be considered as a “subject” of the Crown in right of Canada.” The BC Crown submits that section 22 of the FCA does not apply to her as she is not a “subject” of
[25] Fourth, the Administrator has claimed damages which cannot be maintained against the BC Crown in the Federal Court. Although section 2(c) of the Crown Proceeding Act, RSBC 1996, c 89 (BCCPA) provides that the BC Crown is liable for damages claims, the provision is said to be inoperative where the BC-FCJA applies.
[26] Finally, the BC Crown challenges the Administrator’s reliance on section 106(3)(d) of the MLA to confer jurisdiction on the Federal Court to hear this claim against the BC Crown. It argues that section 106 does not confer jurisdiction on the
analysis
[27] The BC Crown is asking this Court to engage in a complex exercise of statutory interpretation, which it contends will lead to an inevitable conclusion that would justify the draconian measure of striking the Administrator’s statement of claim. I conclude that a motion to strike is not the proper forum to make a final determination of such weighty matters.
[28] Although the BC Crown may ultimately prevail, the issue of provincial immunity from suit in the Federal Court for matters arising from its ownership or interest in a vessel has not been settled. In the recent case of Toney v Canada (Royal Canadian Mounted Police), 2011 FC 1440, [2011] FCJ No 1740 [Toney v RCMP], Mr. Justice Sean Harrington dismissed a motion by Her Majesty the Queen in Right of Alberta (Alberta Crown) to strike a statement of claim filed by the plaintiffs, Alan Toney, his wife and two daughters (the Toneys) for lack of jurisdiction.
[29] The underlying proceeding in Toney v RCMP was an action brought in this Court against the Alberta Crown and the RCMP for damages arising from the death of the Toneys’ young daughter and sister after the vessel then owned and operated by the Province of Alberta capsized during a rescue operation. Mr. Justice Harrington refused to strike the Toneys’ statement of claim. At paragraph 5 of his Reasons for Order and Order, Mr. Justice Harrington concluded as follows
The cause of action is grounded in sections 6 and following of the Marine Liability Act, SC, 2001, c 6. The fact that the ship has been sold by the provincial crown does not shield it from personal liability. This action falls within the federal legislative class of action of navigation and shipping, there is actual federal law to administer, and the administration of that law has been confided to this Court pursuant to section 22 of the Federal Courts Act (ITO-Internatinal Terminal Operators Ltd v Miida Electronics Inc, 1986 CanLII 91 (SCC), [1986] 1 SCR 752). The fact that one of the Defendants is a provincial crown is irrelevant as this is not an action against the crown as such under section 17 of the Federal Courts Act.
[30] After the hearing of the present motion, the Federal Court of Appeal released reasons for judgment in Her Majesty the Queen in Right of Alberta v Toney, 2012 FCA 167 (Alberta v Toney) dismissing an appeal by the Alberta Crown from Mr. Justice Harrington’s decision. The Federal Court of Appeal concluded that it was not plain and obvious that the Federal Court did not have personal jurisdiction over the Alberta Crown in the matter. At paragraph 5 of the Court’s Judgment, Madam Justice Johanne Gauthier observed that the arguments presented by the Toneys in response to the Alberta Crown’s motion based on the wording of section 22 and subsection 43(7) of the FCA had not been considered expressly in the past. She also noted that the impact of exclusive grants of jurisdiction to the Federal Court in respect of certain matters had yet to be considered.
[31] The BC Crown submits that the decision in
[32] In order to found jurisdiction in this Court, a three-part test must be met: ITO-International Terminal Operators Ltd v Miida Electronics Inc 1986 CanLII 91 (SCC), [1986] 1 SCR 752 (ITO). First, there must be a statutory grant of jurisdiction by the federal Parliament. Second, there must be an existing body of federal law which is essential to the disposition of the case and which nourishes the statutory grant of jurisdiction. Third, the law on which the case is based must be “a law of
[33] Section 19 of the FCA is but one legislative source by which the Federal Court can be conferred jurisdiction over a province.
[34] Paragraph 22(2)(d) of the FCA grants the Federal Court jurisdiction with respect to “any claim for damage or for loss of life or personal injury caused by a ship either in collision or otherwise…” When determining whether a claim falls within par 22(2)(d) as damagecaused by a ship, the Court must adopt a functional operational test. In Outhouse v “Thorshavn”, [1935] Ex CR 120; The Eschersheim, [1976] 2 Lloyd’s Rep 1, Local Judge in Admiralty,Demers concluded that damage by a ship did not require that the ship must come in contact with the thing damaged, but could include “damage done by those in charge of the ship, with the ship as the noxious instrument”. Accordingly, the sinking of a ship resulting in pollution of the surrounding water may, at least arguably, constitute “damage caused by a ship” within the meaning of the FCA.
[35] Subsection 22(1) of the FCA gives the Federal Court concurrent jurisdiction between “subject and subject as well as otherwise” overall 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 matter coming with the class of subject of navigation and shipping.
[36] The BC Crown submits that she is not a subject of
In my opinion, as the only alternative to an action between subject and subject is an action between a public authority and a subject, the phrase "as well between subject and subject as otherwise" means "between subject and subject as well as between Her Majesty or the Attorney General or another public authority and a subject".
[37] The Court’s reasoning in
[38] Section 43(7) of the FCA, which deals with ships owned by a sovereign power, and various provisions of the MLA also suggest legislative intent that an action in rem may be commenced against a ship owned by a province and the province itself in the Federal Court.
[39] Section 43(7)(c) provides that, “No action in rem may be commenced in
[40] Another source of jurisdiction of the Federal Court over a province is the MLA, which is the principal legislation dealing with the liability of shipowners and ship operators in relation to passengers, cargo, pollution and property damage. The intent of the legislation is to set limits of liability and establish uniformity by balancing the interests of ship-owners and otherparties. The MLA makes provision for the Ship-source Oil Pollution Fund and the appointment of the Administrator to administer that fund. Liability and compensation for ship-source oil pollution in
[41] Section 3 of the MLA expressly provides that that the Act “is binding on Her Majesty in right of
[42] The above provisions of the MLA, coupled with the broad jurisdiction of the Federal Court over Canadian maritime law granted in section 22 of the FCA, appear to confer onto the Federal Court personal jurisdiction over the BC Crown on the facts as alleged in the Statement of Claim. At the very least, it is not plain and obvious that this Court does not have personal jurisdiction over the BC Crown.
[43] The Administrator and Canada submit in the alternative that the claim for compensation could have been brought either in the name of the claimant (Canada) or the Administrator under section 106(3)(d) of the MLA and that the nature of the proceeding remains the same. Both parties invite the Court to grant leave to amend the Statement of Claim to replace the Administrator with
(b) Subject matter jurisdiction
[44] The second part of the ITO test states that there must be an existing body of federal law which is essential to the disposition of the case. BC Crown argues that the Administrator relies on the interpretation of the BC Society Act for the disposition of this matter instead of the definitions of the owner in the Canada Shipping Act, SC 2001, c 26.While acknowledging that the fact that the Federal Court may need to apply provincial law is not a bar to jurisdiction, the BC Crown argues that this case as pled by the Administrator is significantly dependant on whether the BC Crown is the owner of the ship by operation of a provincial law.
[45] Although some reference must be made in this case to the BC Society Act, claims for damage caused by a vessel are at the heart of Canadian maritime law. An ancillary application of provincial law does not affect the jurisdiction of the Federal Court as long as the issue is, in fact, “determined to some material extent by federal law”: see The Queen v Montreal Urban Community Transport Commission (1980), 112 DLR (3d) 266, [1980] 2 FC 151 at 153, quoting Bensol Customs Brokers Limited v Air Canada [1979] 2 FC 575 at 583.
[46] In the circumstances, I reject the BC Crown’s argument that this Court does not possess subject matter jurisdiction.
conclusion
[47] For the above reasons, the motion to strike shall be dismissed. If the parties are unable to agree on costs of the motion, they are directed to serve and file brief written submissions, not exceeding three pages in length, within 7 days of the date of this Order.
ORDER
THIS COURT ORDERS that the motion is dismissed.
“Roger R. Lafrenière”
Prothonotary
FEDERAL COURT
SOLICITORS OF RECORD
DOCKET: T-761-11
STYLE OF CAUSE: THE ADMINISTRATOR OF THE SHIP-SOURCE OIL
POLLUTION FUND v HER MAJESTY THE QUEEN IN
RIGHT OF THE
AS REPRESENTED BY THE MINISTER OF FINANCE ET AL
PLACE OF HEARING:
DATE OF HEARING: February 27, 2012
REASONS FOR ORDER
AND ORDER: LAFRENIÈRE, P.
DATED: October 1, 2012
APPEARANCES:
| David McEwen, QC
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FOR THE PLAINTIFF
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| Elizabeth Rowbotham
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FOR THE DEFENDANT
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| David Jones
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FOR THE THIRD PARTY,
J. PAUL THOMAS
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| Jennifer Chow
Patrick Grayer
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FOR THE THIRD PARTY,
THE ATTORNEY GENERAL OF
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SOLICITORS OF RECORD:
| Alexander Holburn Beaudin & Lang LLP
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FOR THE PLAINTIFF
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| Ministry of Attorney General
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FOR THE DEFENDANT
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| Bernard & Partners
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FOR THE THIRD PARTY,
J. PAUL THOMAS
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| Myles J. Kirvan
Deputy Attorney General of
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FOR THE THIRD PARTY,
THE ATTORNEY GENERAL OF
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[1]
Section 1(1) of the Federal Courts Jurisdiction Act, RSBC 1996, c 135 [BC-FCJA] provides as follows:
1 (1) The Supreme Court of Canada and the Federal Court of Canada, or the Supreme Court of Canada alone, according to the Acts of the Parliament of Canada known as the Supreme Court Act and the Federal Court Act, have jurisdiction in the following cases:
(a) controversies between Canada and British Columbia;
(b) controversies between British Columbia and any other province of Canada that has passed an Act similar to this Act;
(c) suits, actions or proceedings in which the parties to them, by their pleadings, have raised a question as to the validity of an Act of the Parliament of Canada, or of an Act of the Legislature, if, in the opinion of the court in which the suits, actions or proceedings are pending, the question is material.