Fibreco Pulp Inc. v. Star Dover ( The )
T-2178-96
Hargrave P.
26/2/98
24 pp.
Motion for stays in favour of litigation, arbitration; to cancel security as result of change of ownership of vessel, Star Gran, before litigation commenced; and to contest way in which action, involving carriage of two shipments of wood-pulp, commenced-Plaintiffs, Fibreco, providing pulp to Ekman, for shipment from British Columbia to Finland-Contract of affreightment (COA) between Ekman as shipper, Star Shipping as carrier, governed by English law, with any disputes to be arbitrated in London-Under COA Star Shipping arranging for carriage to Rotterdam to be performed by Star Dover, Star Gran-Star Gran, owned by defendant Kraft Line when used to transport pulp, but purportedly sold before action commenced-In bills of lading for carriage from British Columbia, carrier (Star Shipping) purporting to extend benefits of bill of lading by means of Himalaya clause, to its servants, agents-Bills of lading pure ocean through bills of lading whereby Star Shipping contracting to carry from British Columbia to Rotterdam onward to Finland-As jurisdiction clause in bills of lading in favour of country where carrier having principal place of business inconsistent with COA, latter governs-To complete commitment to carry pulp to Finland, Star Shipping chartering Stephanie, Veritas owned by Stephanie Co., F. S. Switynk-Neither bills of lading nor charter party containing jurisdiction or arbitration provisions-Pulp delivered damaged-Security for damage given at Vancouver to satisfy any Canadian judgments against Star Dover, Star Gran-Defendants conceding security given at Vancouver will stand in any London arbitration or Norwegian litigation in event of stay; any time bar waived-(1) Star Shipping, Stephanie Co., F. S. Switynk seeking stay so may arbitrate in London, or order striking out action as improperly commenced by reason of joinder of two separate causes of action-Stay granted-Sears Ltd. et al. v. Ceres Stevedoring Co. Ltd. et al. (1989), 88 N.R. 296 (F.C.A.) (hereinafter The Tolya Komar) referring to four-part test for obtaining benefit of immunity clauses in bill of lading by way of Himalaya clause set out in Midland Silicones Ltd v. Scruttons Ltd., [1962] A.C. 446 (H.L.)-The Tolya Komar pointing out to ratify clause one must not only be aware of its existence, but also such ratification must be made within reasonable time after contract made and before time fixed for commencement of performance-Neither evidence onward carriers within test set out in Midland Silicones nor evidence any ratification-(2) Events arising from transportation of pulp from British Columbia to Rotterdam within scope of COA-Although Finland ports not specifically within scope as set out in COA, Ekman, Star Shipping intending COA, including arbitration provision, to govern onward transportation-Ekman's claim against Star Shipping stayed, parties referred to London arbitration-(3) Claim against balance of defendants ought also to be stayed-Arbitration clause relating to disputes between shipper (Ekman), carrier (Star Shipping)-Since Star Shipping clearly carrier under pure through ocean bills of lading, arbitration between Ekman, Star Shipping may resolve most of issues-Action stayed for London arbitration may well resolve whole claim, except possibly that against Squamish Terminals (where pulp stored prior to shipping)-(4) Federal Court Act, s. 43(3) preventing exercise of various causes of action, including cargo claims, unless when statement of claim filed ship's beneficial ownership remaining unchanged from that when cause of action arising-Question of ownership must be dealt with before trial: any issue of irregularity of process cannot be pleaded as defence as unconditional appearance waiving irregularity-Although not clear sale at arm's length, plaintiffs raising nothing concrete to show transaction less than purporting to be-Onus on plaintiff to show same beneficial ownership of ship when claim arising as when action commenced-No positive evidence from plaintiffs establishing Gran Inc. owned beneficially by Kraft Line-Had plaintiffs mustered even some concrete evidence, Kraft Line would have had to produce additional evidence as party having particular means of knowledge enabling him to prove something false-Hargrave P. satisfied beneficial owner of Star Gran when cause of action arising not same entity presently beneficial owner-In rem proceedings against Star Gran set aside, security ordered returned-(5) Defendants alleging plaintiffs consolidating two distinct claims in one action without leave of Court contrary to R. 1715(1)(a)-R. 1715(1)(a) not requiring separate causes of action to have completely common questions of law or fact, but only some commonality-While two distinct claims, arising from two shipments of pulp, also many common questions of fact, law-Two claims ought to proceed as one action-No prejudice to anyone in allowing two claims to proceed in one action-Federal Court Act, R.S.C., 1985, c. F-7, s. 43(3)-Federal Court Rules, C.R.C., c. 663, R. 1715(1)(a).