Précis: The Federal Court held it had no jurisdiction to adjudicate a third party claim for indemnity brought by the ocean carrier against a trucker who took delivery of the cargo either unlawfully or negligently.
Facts: The plaintiff and defendant entered into a contract for the carriage of one container of frozen shrimp from Ecuador to Montreal. The container was discharged at Montreal and was later released by the terminal, the defendant’s agent, to a trucking company who was not entitled to delivery. The plaintiff commenced proceedings in the Federal Court against the defendant for wrongful delivery. The defendant then commenced these third party proceedings against the trucking company that took delivery alleging that it took delivery either unlawfully or negligently. The trucking company brought an application for an order striking out the third party claim on the grounds that the Federal Court did not have jurisdiction to hear the third party claim. At first instance (2017 FC 460), the Prothonotary agreed with the third party and held that the court did not have jurisdiction to adjudicate the claim. The defendant appealed.
Decision: Appeal dismissed.
Held: The order of the Prothonotary is discretionary and can only be interfered with if incorrect in law or based on a palpable and overriding error of fact. The defendant argues that the Prothonotary failed to take into account the modern context of navigation and shipping and mischaracterized the third party action as a matter of trucking governed by provincial law rather than as theft from a sea terminal which it says is governed by Canadian maritime law. Whether the claim is governed by Canadian maritime law requires a consideration of whether the subject matter of the claim is integrally connected to maritime matters. Here there is hardly any proximity between the activities of the third party and the sea and there is no contractual connection between the third party and the contract for the carriage of the cargo by sea. In fact, there is no contractual relationship with the third party at all. The activities of the third party are essentially those of a trucker and are governed by provincial law not Canadian maritime law. It is therefore plain and obvious that the Federal Court is without jurisdiction to hear the third party claim.