North Shore Health Region v. Cosmos Shipping Lines

This was an appeal of a decision by the Prothonotary in which the Prothonotary upheld personal service of a Statement of Claim on solicitors as business agents for the Defendant. The facts were that a crew member of one of the Defendant’s vessels was seriously injured at Vancouver. The crew member was hospitalized. His medical bills were sent to the offices of the solicitors for the vessel’s P&I Club. The solicitors paid four of the bills. Thereafter, no payments were made and the hospital commenced proceedings against the shipowner for payment of the ongoing medical costs pursuant to section 285 of the Canada Shipping Act. The hospital served the Defendant by delivering a copy of the Statement of Claim to the solicitors who had paid the bills. The Hospital argued that the service was valid pursuant to Rule 135 which authorizes personal service on an agent where the Defendant "in the ordinary course of business, enters into contracts or business transactions in Canada" through an agent in Canada and who actually used the agent in respect of the contract or transaction giving rise to the action. The Prothonotary and the appeal judge agreed and upheld the service. The appeal judge further held that, if the requirements of Rule 135 had not been complied with, he would have validated service pursuant to Rule 147.