Ford Aquitaine Industries SAS et al. v. The “Canmar Pride” et al.

In Admiralty Practice, Stays of Proceedings on (Updated )

This action concerned the loss of or damage to several containers carried from LeHavre to Montreal. The damages were estimated at $6 million. The carriage was pursuant to a transportation services agreement which provided for American law and jurisdiction. The carrier under the transportation services agreement was OOCL but OOCL was expressly permitted to subcontract the carriage, which it did, to CP Ships. The Plaintiff originally commenced proceedings against only OOCL in a U.S. District Court. The Plaintiff attempted to discontinue those proceedings but was not allowed to do so. The Plaintiff also commenced this proceeding in the Federal Court against both OOCL and CP Ships. The Defendants brought this application to stay the Canadian proceedings. At first instance, the Prothonotary granted the application for a stay. He held that section 46 of the Marine Liability Act did not oust the court’s jurisdiction under section 50 of the Federal Court Act to grant a stay on grounds other than a forum selection clause. He then applied the test from the decision of the British Columbia Court of Appeal in Westec Aerospace v Raytheon Aircraft Co., (1999) 173 DLR (4th) 498. That test was: 1) Are there parallel proceedings underway?; 2) If so, is the other jurisdiction an appropriate forum?; and, 3) Has the Plaintiff established by cogent evidence that there is some personal or juridical advantage available to him in the British Columbia action that is of such importance that it would be unjust to deprive him of it? The Prothonotary held that the Plaintiff had failed to meet the third element of that test. In this regard a main point argued by the Plaintiff was that a U.S. Court would apply the COGSA limit which was substantially lower than the limitation that would apply in a Canadian court applying the Hague-Visby Rules. The Prothonotary, however, considered that the issue of the applicable limitation would be argued in either court. On appeal, the appeal Judge first considered the appropriate standard of review from a discretionary order of a Prothonotary and noted that the test had been recently reformulated to require the reviewing judge to first determine whether the questions raised are vital to the final issue in the case. If so, the discretion should be exercised de novo and the reviewing judge need not consider the second branch of the test (whether the orders were clearly wrong). The appeal Judge considered the Prothonotary’s decision final and thus proceeded to exercise her discretion de novo. The appeal Judge held that the Prothonotary had erred in applying the test from Westec. She considered that the Westec approach was incorrect in that it set up “loss of juridical advantage” as a separate test or step rather than weighing it with the other usual factors to be taken into account. Moreover, she considered that the objective was not just to determine if the foreign forum was equally appropriate to the domestic forum but whether it was more appropriate than the domestic forum. Nevertheless, weighing the relevant factors she concluded that the U.S District Court was a more appropriate forum and upheld the decision of the Prothonotary.