Précis: The Federal Court of Appeal held that there was sufficient evidence to determine if the claim was one of pure economic loss and referred the matter back to the trial division for a decision.
Facts: On 7 December 2012 the “Cape Apricot” collided with and destroyed part of a trestle holding the conveyor system at the terminal leased and operated by the plaintiff. As a consequence, terminal operations were shut down for a period of time. The plaintiff commenced proceedings and arrested the vessel. The owner of the “Cape Apricot” subsequently brought limitation proceedings and the Federal Court ordered that all claims against the limitation fund were to be filed by 8 November 2013. A claim was filed by the Vancouver Fraser Port Authority, the owner and lessor of the lands on which the terminal was constructed. It claimed that as a consequence of the temporary shutdown of the terminal it suffered losses in excess of $1 million. The Port Authority’s claim was premised on the terms of a lease between it and the plaintiff whereby it received “participation rent” based on the tonnage shipped through the terminal. The plaintiff, with the support of the defendant ship owner, brought this summary trial application for an order dismissing the claim of the Port Authority on the basis that it was a claim for pure economic loss and not recoverable.
At first instance (2015 FC 130), the motions Judge refused to dispose of the matter by way of summary trial. She noted that as a general rule there is a bar against recovery of pure economic loss but that there were exceptions to the rule, notably: (1) where the claimant has a proprietary or possessory interest in the damaged property, (2) maritime general average cases, and (3) cases of a joint or common venture. She was not convinced that the Port Authority did not have a proprietary or possessory interest under the lease and specifically considered it arguable that the Port Authority had a proprietary or possessory interest in the trestle. She therefore held that there was a genuine issue as to whether the Port Authority had a sufficient proprietary or possessory interest and dismissed the motion for summary trial. The plaintiff and ship owner appealed.
Decision: Appeal allowed.
Held: It is clear that the decision of the motions Judge was not based on credibility. The principal issue to be decided was whether the Port Authority had a proprietary or possessory interest in the property damaged and, once that issue was decided, whether the claim fell within one of the exceptions to the rule against recovery of economic loss. These issues depended on the construction of the lease. The parties agree that credibility is not an issue and further agree that additional discovery will not lead to additional evidence relevant to the interpretation of the lease. As set out in Teva Canada Ltd. v. Wyeth LLC, 2001 FC 1169, summary judgment is appropriate when: the issues are well defined; the facts necessary to resolve the issues are already in the evidence; the evidence is not controversial and there are no issues of credibility; and the questions of law, although far from simple, can be dealt with as easily now as after a full trial. This test is met in this case and motions Judge was in error in failing to decide the matter by way of summary trial. The matter is to be returned to the Federal Court for determination of the issues.