T-702-74
K. J. Preiswerck Limited (Plaintiff)
v.
The Ship Allunga and Pad Shipping Australia
Pty. and Associated Container Transportation
(Australia) Ltd., Pad Shipping Australia Pty. Ltd.
Rederiaktiebolaget Transatlantic carrying on
business under the firm name and style of Pacific
Australia Direct Line and Buderim Ginger Grow
ers Co-operative Association Limited (Defend-
ants)
Trial Division, Collier J.—Vancouver, June 14, 15,
16 and 30, 1976.
Maritime law—Jurisdiction—Plaintiff contracting to buy
ginger from defendant "B" — "B" contracting with ocean
carriers for carriage of ginger in non-ventilated refrigerated
container and loading ginger into such container supplied by
carrier—Claim that "B" was negligent—Motion to set aside
order for service ex juris on "B"—Motion for order granting
leave to state case for determination whether Court had juris
diction over "B"—Federal Court Act, s. 22(1)—Federal Court
Rule 475.
Plaintiff contracted to buy ginger from B Limited, an Aus-
tralian company, and claimed that B had contracted with the
carriers to carry the ginger in a non-ventilated refrigerated
container. B loaded the ginger into such container, supplied by
the carrier. Plaintiff claimed B was negligent in contracting for
carriage of fresh ginger in such manner. B moved to set aside
the order for service ex furls, claiming that the Court lacked
jurisdiction to hear the claim, and, alternatively, for an order
under Rule 475 granting leave to state a case to determine
whether the Court had jurisdiction over B on the facts as
stated. On the above facts, B argued that the negligence claim
was not a matter that could reasonably be said to fall under
section 22(1) of the Federal Court Act (the "navigation and
shipping" jurisdiction). B claimed that it was merely a producer
and marketer not engaged in navigation and shipping; that it
did not participate in or make a contract of carriage by water;
that once the goods were delivered to the ship in Australia, B's
duties ceased; that any tort, if committed, occurred in Aus-
tralia; that any connection of plaintiff with the carriage of
goods was purely incidental to the contract of sale and the
arrangement to load them into a particular container.
Held, both motions are dismissed. (1) The discretion to
permit service ex juris was not wrongly exercised. While
affidavits by a protesting defendant purporting to set out facts
or evidence which might be in dispute ought not to be con
sidered, it is not the case that such material is never admissible.
There may be cases where no reasonable objection could be
raised, particularly if there is agreement as to essential facts or
no dispute as to factual matter put foward by defendant in the
affidavit.
(2) While B is not, in the ordinary sense, in the general
business of navigation and shipping, the company did partici
pate in the arrangement for the carriage of the ginger, and it is
admitted that B was negligent in contracting with the ocean
carriers for non-ventilated shipment. While the action against B
was not founded on breach of that contract, but on negligence,
the admitted negligence was in the arrangements of B with the
carriers as to the method of carrying out the contract. There
was more than a mere incidental involvement by B with naviga
tion and shipping. As to the question of connection with
Canada, the contract was not to be performed only in Aus-
tralia. But, plaintiff's cause of action was not the contract, but
the tort of negligence. However, the Supreme Court of Canada
has held that the alleged tort can be said to have occurred in a
country "substantially affected by the defendant's activities or
its consequences and the law of which is likely to have been in
the reasonable contemplation of the parties". Thus, the Court
has jurisdiction; the claim falls within "navigation and ship
ping"; and the tort can be said to have occurred in Canada.
City of Montreal v. Harbour Commissioners of Montreal
[1926] A.C. 299 and Moran v. Pyle National (Canada)
Ltd. [1975] 1 S.C.R. 393, applied.
MOTIONS.
COUNSEL:
D. F. McEwen for plaintiff.
N. E. Daugulis for defendants.
SOLICITORS:
Ray, Wolfe, Connell, Lightbody & Reynolds,
Vancouver, for plaintiff.
Bull, Housser & Tupper, Vancouver, for
defendants.
The following are the reasons for judgment
rendered in English by
COLLIER J.: There are here two motions. The
first is to set aside an order of the Trial Division
authorizing service ex juris in Australia on the
defendant Buderim Ginger Growers Co-operative
Association Ltd. (Buderim). The grounds asserted
are that this Court has no jurisdiction to entertain
the claim advanced against Buderim and that the
original ex parte order permitting service ex juris
ought not to have been made.
The second motion, by agreement of counsel and
the Court, was treated as an alternative one. It is a
motion on behalf of Buderim for "... AN ORDER
pursuant to Rule 475 granting leave to state a case
for the purpose of the Court's determination of the
following question:
Does the Federal Court of Canada have jurisdiction over the
defendant Buderim Ginger Growers Co-operative Association
Ltd. on the facts stated
AND FOR a determination of that question."
At the hearing, the defendant - sought to
introduce, in respect of the first motion, an affida
vit sworn by Mr. Morrison on March 31, 1976. I
ruled against its use and indicated my opinion
that, generally speaking, affidavits by the protest
ing defendant purporting to set out facts or evi
dence which might be in dispute ought not to be
considered. The argument then proceeded on the
basis of the materials which were before the Judge
who made the order. I then ruled, at the end of the
submissions on the first motion, that Buderim had
not, in my opinion, shown that the discretion of the
Trial Division in permitting service ex juris had
been wrongly exercised. I do not think it necessary
to elaborate further, in these reasons, on the dis
missal of the first motion, except to say this. It is
not my view that affidavit material, filed on behalf
of a defendant seeking to set aside an order for
service ex juris, is never admissible. There may
well be many cases where no reasonable objection
could be raised to that procedure, particularly if
there is agreement as to the essential facts or no
dispute as to the factual material put forward by
the defendant in the affidavit)
I turn now to the second motion.
Counsel agreed:
(1) all the facts alleged in the statement of
claim are, for the purposes of the determination
of the jurisdictional question only, deemed to be
true.
(2) on a statement of agreed facts, in addition
to those asserted in the statement of claim.
(3) that the combination of (1) and (2) above
provided the Court with all necessary facts to
determine the question put; that no additional or
other facts would be adduced at the trial of the
action.
(4) if the determination of the question were
adverse to the plaintiff, then an order dismissing
the action as against Buderim would follow.
(5) if the determination of the question were
adverse to Buderim, the jurisdictional question
would not be raised by Buderim at trial.
To make these reasons intelligible, I shall sum
marize as briefly as possible the relevant facts.
The plaintiff is a British Columbia company and
as part of its business in previous years had
imported fresh ginger during a season running
from late July until late October. Buderim is an
Australian company producing and marketing
' In England, the practice appears to be to permit a defend
ant, on a motion to set aside an ex parte order for service ex
juris, to file affidavit material. See The Supreme Court Prac
tice 1976 (vol. 1) pp. 88-89 (para. 11/4/7). The cases cited are
mainly pre-1900. See also Canadian Brine Ltd. v. Wilson
Marine Transport Co. [1964] 2 O.R. 278 (Senior Master).
Where the defendant wishes to have the question of jurisdic
tion decided in advance of trial, it is my view the parties should
endeavour, as here, to proceed on agreed facts and have the
question of law determined. Failing agreement as to that
procedure or as to the facts, it seems to me the defendant can,
in a proper case, apply under Rule 327 for the trial of an issue,
and for directions.
ginger in that country. It does not have an office or
place of business in Canada.
In previous years the plaintiff imported ginger
by vessel during the season referred to. The ginger
was carried as unrefrigerated but ventilated cargo.
Buderim has apparently developed techniques,
including cold storage, which allows it to market
fresh ginger during the whole year.
In the latter part of 1972 the plaintiff made
inquiries of Buderim as to the price and availabili
ty of a shipment of ginger. Buderim advised the
plaintiff ginger could be best shipped in a
refrigerated container at 55° F. Further corre
spondence ensued. In February 1973 the plaintiff
asked Buderim to book a number of cases of
ginger to be shipped to Vancouver in refrigerated
space. The plaintiff was relying on Buderim's
advice that shipment as refrigerated cargo was the
proper method. Buderim replied at some length. It
agreed refrigerated freight rates were excessively
high, but expressed the opinion "... refrigerated
transport is essential to ensure arrival in the best
possible condition and with complete freedom (and
the subsequent loss) from shooting and deteriora
tion." Buderim indicated they were prepared to
allocate three refrigerated containers to the
plaintiff.
The plaintiff then, by cable, requested Buderim
to endeavour to ship one container of ginger,
refrigerated, aboard the vessel Dilkara. Subse
quently the plaintiff sent a purchase order ordering
400 cartons of green ginger in one container, the
terms of payment being letter of credit F.O.B.
Brisbane, Australia. The shipping instructions
were: "April via refrigerated cargo."
On April 19, 1973 Buderim issued to the plain
tiff an invoice for 672 crates of ginger at 23.68
Australian cents per pound F.O.B. Brisbane. The
invoice further provided "for shipment per Allun-
ga 22.4.73." I now set out in full paragraph 11 of
the statement of agreed facts.
Buderim, pursuant to the request of Preiswerck for April
refrigerated shipment, made arrangements in Australia for the
ocean carriage including booking space on the Allunga and
advising the ocean carrier that the temperature of the container
should be kept at 50°/55° F. The said goods were loaded by
Buderim at their premises into a refrigerated container belong
ing to or supplied by the ocean carrier. Buderim delivered the
loaded container to the wharf at Brisbane and/or the ocean
carrier's agent and had no further physical contact with the
goods. Preiswerck had no dealings with the ocean carrier in
connection with details of shipment and carriage. Buderim was
at no time agent for the ocean carrier.
Paragraph 11 must, however, be read with para
graph 6 of the amended statement of claim. I set
out the latter paragraph as well:
The Plaintiff relied upon the knowledge of the Defendant
Buderim Ginger Growers Co-operative Association Limited in
regard to the said goods, and their methods of shipping the said
goods, and the Defendant, Buderim Ginger Growers Co-opera
tive Association Limited entered into a Contract with the
Defendant Shipowners for the carriage of the said goods in a
non-ventilated refrigerated container to Vancouver, British
Columbia, and the Defendant, Buderim Ginger Growers Co
operative Association Limited loaded the said goods into a
non-ventilated shipping container, supplied by the Defendant
Shipowners.
A bill of lading covering the cargo was issued on
behalf of Pacific Australia Direct Line, the char-
terer of the Allunga. The ginger was to be delivered
in Vancouver. On arrival there, the ginger was
found to be wet and mouldy.
The plaintiffs action has been brought against
the owners and charterers of the Allunga claiming
damages for breach of a contract of sea carriage as
well as for negligence, as carriers for reward, on
the part of those defendants. The claim asserted
against Buderim is set out in paragraph 10 of the
amended statement of claim. I quote:
In the alternative to the preceding paragraph if the Defend
ant shipowners were not negligent nor in breach of their duty as
carriers for reward, the Plaintiff says that the Defendant
Buderim Ginger Growers Co-operative Association Limited
was negligent in contracting with the Defendant shipowner for
carriage of fresh ginger in a non-ventilated refrigerated con
tainer and placing fresh ginger which required ventilation in a
non-ventilated container for the voyage from Brisbane, Aus-
tralia to Vancouver, British Columbia.
As I read the agreed statement of facts and the
relevant portions of the amended statement of
claim this occurred:
(1) A contract of sale of ginger was entered into
in Australia between the plaintiff and Buderim.
(2) Buderim entered into a contract of some
kind with the ocean carriers for the carriage of
the ginger in a non-ventilated refrigerator con
tainer to Vancouver.
(3) Buderim loaded the ginger into a refrigerat
ed but a non-ventilated shipping container, the
container being supplied by the ocean carrier.
(4) Buderim was negligent in
(a) contracting with the carriers for carriage
of fresh ginger in a non-ventilated but
refrigerated container and
(b) in placing fresh ginger (which required
ventilation) in a non-ventilated container for
ocean carriage from Australia to Vancouver.
The defendant Buderim says that on those facts
this Court has no jurisdiction to hear the claim
advanced against it. It is said the particular claim,
that of negligence in contracting with the carrier
for carriage in a non-ventilated refrigerated con
tainer, is not a matter that can reasonably be said
to fall within the "navigation and shipping" juris
diction set out in section 22(1) of the Federal
Court Act. 2
It is argued, on the facts here, Buderim was
merely a producer and marketer who agreed to sell
goods to the plaintiff; that Buderim was not
engaged in any way in the business of navigation
and shipping; it did not participate in or make a
contract of carriage by water; once the goods were
delivered to the vessel in Brisbane, Buderim's
duties and responsibilities ceased; if any tort was
committed it was committed in Australia; any
connection of the plaintiff with carriage of goods
was purely incidental to the contract of sale of
goods, and the arrangement to load them into a
particular container.
It is true Buderim is not, in the ordinary day-to
day commercial sense of that expression, in the
general business of navigation and shipping. But
2 If the allegation against Buderim of "negligence" in placing
fresh ginger which required ventilation in a non-ventilated
container stood alone, I would have serious doubt as to whether
that particular claim ought to be entertained in this Court. In
making that comment I am not overlooking or disregarding
Moran v. Pyle National (Canada) Ltd., later referred to.
on the facts here Buderim did, in my view, partici
pate (even though it may have been an isolated
transaction) in the contractual and practical
arrangement for the carriage of the ginger from
Brisbane to Vancouver. Buderim, on the admitted
facts, contracted with the ocean carriers for car
riage of the product in a non-ventilated container.
It is admitted Buderim was negligent in so con
tracting for that method of transport. It seems to
me the plaintiff is saying that contract should have
been one for carriage in a refrigerated container,
but with ventilation ensured by Buderim or by the
cargo owners on the direction of Buderim.
It is true the cause of action against Buderim is
not framed in breach of that contract, but in
negligence. The admitted negligence, however, is
in the arrangements made by Buderim with the
carriers as to the method by which (apart from
transport in a vessel) the contract of ocean car
riage was to be carried out.
As I see it, there is, on the facts, more than a
mere incidental involvement by Buderim and its
actions with navigation and shipping.' The claim
asserted therefore falls within that head of juris
diction. That does not end the matter, or necessari
ly clothe this Court with jurisdiction in respect of
this particular claim.
Buderim goes on to say that even if there is
some aspect of navigation and shipping in respect
of its actions in this case, there is no connection or
relationship with Canada, so as to allow this Court
to entertain the claim. It is said the contract
between the plaintiff and Buderim for the sale of
the ginger was made in Australia; even if, as part
of that contract, Buderim was to make some kind
of contractual arrangement with the carrier that
the cargo should be shipped in a refrigerated as
3 In City of Montreal v. Harbour Commissioners of Mon-
treal [1926] A.C. 299 the Privy Council held that the phrase
"navigation and shipping" as used in the British North Ameri-
ca Act should be widely construed. In my view, a similar broad
construction should be given to the phrase, as used in subsec
tion 22(1) of the Federal Court Act.
well as ventilated state, the whole contract was to
be performed entirely in Australia. I am not con
vinced the contract between the carrier and Bude-
rim was, as a practical or legal matter, to be
performed only in Australia. The plaintiff, how
ever, does not allege it was a party to that particu
lar contract nor does it attempt to found jurisdic
tion on any breach of that contract. The plaintiffs
cause of action is the tort of negligence. But
Buderim then says that the tort alleged against
Buderim (negligence in contracting for the faulty
method of carriage used) was committed in
Australia.' This Court, it is urged, has not, or
should not claim, jurisdiction; there is no "connec-
tion" or relationship with this country.
In my view, that particular contention of Bude-
rim is met by the decision of the Supreme Court of
Canada in Moran v. Pyle National (Canada) Ltd. 5
The tort alleged against Buderim can be said to
have occurred in a country ... "substantially
affected by the defendant's activities or its conse
quences and the law of which is likely to have been
in the reasonable contemplation of the parties." 6
For the word "country" there must of course be
substituted in this case "Canada".
Counsel for the plaintiff urged that under sec
tion 22 of the Federal Court Act it is not neces
sary, to found jurisdiction, to invoke the Moran
doctrine. He contended that once it is established
the tort (in this case) falls within the ambit of
claims embraced by "navigation and shipping"
then as a matter of substantive jurisdiction it
matters not where the tort was committed, nor
where a defendant resides or carries on business.
The Court has jurisdiction; the only question re
maining is whether this country and this Court is a
° I was asked by Buderim to infer that the damage to the
ginger must have occurred long before the cargo reached
Vancouver, or Canadian territorial waters (whatever those
limits today are); that the negligent act and the resulting
damage occurred outside Canada. I do not think, on the facts
before me, the inference sought should be drawn. If necessary,
that matter should be the subject of evidence, expert or other
wise, at trial.
5 [1975] 1 S.C.R. 393.
6 Moran at page 409.
forum conveniens. 7
I do not feel it necessary to express any view as
to the correctness or otherwise of the proposition
put forward. Nor is it necessary in this particular
case, to my mind, to invoke the broad general
principle propounded. On the facts before me, I
conclude this Court has jurisdiction: the claim falls
within the general category of "navigation and
shipping"; the tort giving rise to the claim can be
said to have occurred in Canada; this Court is
entitled to entertain the claim in personam 8
against Buderim.
The motions are dismissed, with costs (in any
event of the cause) to the plaintiff.
Counsel for the plaintiff relied on a number of authorities,
including: Oy Nokia Ab v. The "Martha Russ" [1974] 1 F.C.
410 (App. Div.); Antares Shipping Corporation v. The
"Capricorn" (1976) 7 N.R. 518 (S.C.C.); Santa Maria Ship-
owning and Trading Co. S.A. v. Hawker Industries Ltd. [1976]
2 F.C. 325 (App. Div.).
8 Buderim was not a party to the original litigation. It was
added by amendment. The original statement of claim was a
combined action in rem and in personam. The Allunga was
sued in rem. Her owners and charterers were sued individually
in personam. The file indicates no order for service ex juris on
the owners and charterers was ever made. There is nothing, as
well, to indicate whether the Allunga was ever arrested in
Canada, or threatened here with arrest. The claim advanced
against the vessel and the individuals is based on a contract of
carriage to transport the plaintiff's goods from Australia to
Vancouver. It is alleged there was breach of that contract, or
alternatively negligence on the part of the defendants in carry
ing the plaintiff's goods. A defence was filed in this Court by
the defendants. What precipitated (from a legal or jurisdiction
al point of view) the filing of the defence in this Court, I do not
actually know. I can visualize a number of reasons, including
business comity, or agreements by the carriers.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.