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A-516-76
Hawker Industries Limited (Appellant) (Defend- ant)
v.
Santa Maria Shipowning and Trading Company, SA. (Respondent) (Plaintiff)
Court of Appeal, Jackett C.J., Ryan and Le Dain JJ.—Ottawa, September 8, 1977.
Practice = Rule 324 application — Fatal flaw Opportu nity to remedy if possible — Federal Court Rule 324.
Jurisdiction — Application under s. 52(a) for order to quash Trial Division decision for want of jurisdiction — Application made before matter heard in Court of Appeal — Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 52(a).
Appellant applies under Rule 324 for an order quashing the proceedings of the Trial Division, even before the appeal was heard, under section 52(a) of the Federal Court Act. The Court of Appeal proceedings were launched as an appeal from a Trial Division judgment determining respondent's right to recover damages for failure to perform a contract to install a rudder on its ship. Appellant argues that the Federal Court, in view of recent Supreme Court of Canada decision, had no au thority to entertain plaintiff's (respondent) claim.
Held, the application is dismissed. The applicant (appellant) seeks an order to have the judgment of the Trial Division set aside by the Court of Appeal before the hearing of the appeal from that judgment and not to have the appeal itself quashed. This seemingly cannot be done under section 52(a), for the proceeding in the Court of Appeal is the appeal from the Trial Division. In absence of authority, the Court of Appeal has no jurisdiction to set aside the judgment appealed against until after both parties have been heard on appeal.
APPLICATION. COUNSEL:
Stewart McInnes for appellant (defendant).
Donald A. Kerr, Q.C., for respondent (plaintiff).
SOLICITORS:
McInnes, Cooper & Robertson, Halifax, for appellant (defendant).
Stewart, MacKeen & Covert, Halifax, for respondent (plaintiff).
The following are the reasons for judgment rendered in English by
JACKETT C.J.: This is a motion in writing under Rule 324', whereby the appellant applies "for an order quashing these proceedings under section 52(a) of the Federal Court Act."
The proceeding in the Federal Court of Appeal was launched by way of a notice of appeal dated July 21, 1976 whereby the appellant appealed against a judgment of the Trial Division that determined that the respondent was "entitled to recover from the appellant damages for failure to perform a contract".
In support of the Rule 324 motion to quash, the solicitors for the appellant have written a letter dated July 27, 1977, to the administrator, the body of which reads as follows:
This is an Application by the Appellant, Hawker Industries Limited, under Section 52(a) of the Federal Court Act to quash these proceedings for lack of jurisdiction pursuant to Rule 324. The Application is made pursuant to Notice of Motion, copy of which is enclosed and which has been served on the solicitor for the Respondent, Donald A. Kerr, Q.C.
I Rule 324 reads as follows:
Rule 324. (1) A motion on behalf of any party may, if the party, by letter addressed to the Registry, so requests, and if the Court or a prothonotary, as the case may be, considers it expedient, be disposed of without personal appearance of that party or an attorney or solicitor on his behalf and upon consideration of such representations as are submitted in writ ing on his behalf or of a consent executed by each other party.
(2) A copy of the request to have the motion considered without personal appearance and a copy of the written representations shall be served on each opposing party with the copy of the notice of motion that is served on him.
(3) A party who opposes a motion under paragraph (1) may send representations in writing to the Registry and to each other party or he may file an application in writing for an oral hearing and send a copy thereof to the other side.
(4) No motion under paragraph (i) shall be disposed of until the Court is satisfied that all interested parties have had a reasonable opportunity to make representations either in writ ing or orally.
The circumstances giving rise to this action are set out in the pleadings which are incorporated in an Appeal Book filed in this Honourable Court. A Notice of Appeal was duly filed and dated July 21, 1976 and the parties are still awaiting a tran script of the evidence given at trial. The written decision of Mr. Justice Bastin set out the circumstances giving rise to the action which is a claim for damages by the Respondent rising out of a contract with the Appellant to repair the Respondent's ship at Halifax, Nova Scotia.
The Appellant submits there is no jurisdiction in the Federal Court of Canada to entertain the Plaintiff's claim for damages as set out in its amended Statement of Claim filed the 20th day of April, 1975. The Appellant refers to the decision of Mr. Justice Thurlow in Her Majesty the Queen v. Canadian Vick- ers Limited and Canadian General Electric Company Limited, filed June 22, 1977. In that case the Associate Chief Justice held that a contract for the building of a ship was not a Maritime contract and was not within the jurisdiction of The Federal Court under Section 22(2)(n) of The Federal Court Act. The contract in that case is for the repair of the ship and these circumstances which are the subject of these proceedings cannot be distinguished with respect to the matter of jurisdiction.
The Appellant requests that an Order be issued out of this Honourable Court dismissing the claim of the Respondent with no costs to either party.
With reference to this, motion, counsel for the respondent has written a letter dated September 2, 1977, to the Registry, the body of which reads as follows:
I am afraid that I am overdue in filing a Response to Stewart McInnes' Notice of Motion to quash the proceedings, and his Representations in Writing dated July 27th. As you will appreciate, the question of jurisdiction is an extremely complex one, arising out of the recent decisions in the McNamara, Quebec North Shore, Canadian Vickers and Sivaco cases. I understand that the latter two—and particularly the Canadian Vickers decision, upon which Mr. McInnes bases his applica- tion—are under appeal to the Supreme Court of Canada.
As I think you are aware, I have also been involved, during the past month or so, in some six or eight other cases where jurisdictional questions are being raised. I suppose I am in the same position as most other lawyers who have marine cases before the Federal Court, in that I am not sure that the status, or eventual solution, of these jurisdictional problems will be.
For the moment, rather than attempt to respond in writing to Mr. McInnes' Representations, I must apply for an oral hear ing. I would greatly appreciate if you would pass this letter to the Administrator by way of telecopier, and we will await his instructions with respect to the time and place of hearing.
I need hardly say that the matter is of vital importance to my client. In fact, it was Hawker Industries Limited which chose the Federal Court in an action against the shipowner. For reasons which are fully set out in the correspondence in your file, my client decided not to defend that action. Instead we
commenced a new action with Hawker Industries Limited and Bethlehem Steel as co-Defendants. We agreed to let the first action go to judgment, and then in the second action counter claimed for the amount of the judgment.
We went through a lengthy trial, with witnesses coming to Halifax from Vancouver, various points in the U.S.A., Ber- muda, etc. My client won a resounding decision on all points. (The sum at issue is approximately $400,000.)
Hawker filed, a Notice of Appeal, but only on the merits and not on jurisdictional grounds. Had that Notice not been filed, then of course the case would be completely over, and my client would have recovered the large damages awarded by the Trial Judge.
If the Court were to divest itself of jurisdiction now, after the trial and decision, the hardship to which my client would be put would be extreme.
I mention these matters only in a preliminary way. At the time of a hearing, I will of course be advancing arguments in an attempt to distinguish the Canadian Vickers and other relevant decisions, but it may be that the Supreme Court will have filed a definitive decision on the point by that time in any event.
I am sending a copy of this letter to Mr. McInnes. I look forward to hearing from you.
Before dealing with the merits of this matter, I deem it advisable to say something about the procedure provided for by Rule 324.
Having regard to the requirement of section 16(3) of the Federal Court Act that "... sittings of the Court of Appeal shall be arranged by the Chief Justice to suit, as nearly as may be, the con venience of the parties", the provision in Rule 324 for motions in writing serves the very useful pur pose of enabling interlocutory work of the Court to be dealt with more expeditiously and with much less expenditure of public money than would other wise be the case. It is also, I believe, in many instances, more economical from the point of view of the parties. There are of course cases where motions in writing are not appropriate having regard to the character of the subject of the application.
With certain exceptions 2 , an application is only
2 See Rule 1107 re applications in the Court of Appeal for leave or extension of time.
made under Rule 324 when the applicant (in this case, the appellant) has elected to have the application disposed of in that way (Rule 324(1)); and an order cannot be made against the "oppos- ing party" based on the submissions in writing, if he exercises his option (Rule 324(3)) for an "oral hearing". In addition, the practice of the Court is to require an oral hearing in any case where it is not satisfied that the matter can be adequately considered on the written submissions (Rule 324(4)).
Furthermore, in my view, just as happens in the case of an application made in the presence of members of the Court, where an applicant makes a Rule 324 application based on submissions that do not call for any reply from the opposing party, it may be dismissed without waiting for such submis sions. It is a corollary of this view that, if there is a reasonable possibility that the applicant may have a reply to what seems to the Court, at first blush, to be fatal to the application, the Court may (just as it does during oral argument) find a means of giving the applicant an opportunity to reply thereto.
As will be seen from what I am about to say, this is an application to which, as I appreciate it having regard to the applicant's submissions, there is a fatal objection. In the circumstances, I am loath to take the responsibility for the public ex penditure involved in setting up a special court to hear "oral argument" unless the applicant, who has elected to have his application disposed of on written submissions, can show that there is a rea sonably arguable answer to that objection.
I turn to the merits of the application.
Section 52(a) authorizes the Court of Appeal, inter alia, to "quash proceedings in cases brought before it in which it has no jurisdiction...." The proceeding in the Court of Appeal in this case is an appeal from the judgment of the Trial Division. It is obvious from the written representations filed on behalf of the applicant (appellant) that the applicant is not seeking to have that appeal quashed but is seeking to have the Court of Appeal quash the proceeding in the Trial Division on the ground that that proceeding is beyond the jurisdic-
tion of the Trial Division'. In other words, if I properly apprehend the order that the applicant is seeking, it is to have the judgment of the Trial Division set aside by the Court of Appeal before the hearing of the appeal from that judgment and not to have the appeal itself quashed. It would not seem that this can be done under section 52(a).
In the absence of some authority of which I am unaware, the Court of Appeal has no jurisdiction to set aside the judgment appealed against until after both parties have been heard on the appeal. Unless, therefore, the applicant can show some au thority for the proposed order sought by this Rule 324 motion, I am of the view that it must be dismissed. I should, however, wish to be satisfied that the applicant does not have knowledge of some authority under which the order can be made that is not mentioned in the submissions. I propose therefore that an order be made dismissing the Rule 324 motion unless further submissions are deposited by the applicant in the Registry within 20 days from communication by the Registry to the applicant's solicitor of the proposed order and the reasons therefor by registered mail as evi denced by an "A.R." card. If such submissions are submitted the Court can consider whether they show a sufficiently arguable case for this 324 application to warrant arranging for the "oral argument" sought by the respondent.
The disposition that I propose of this Rule 324 application does not mean that I am of the view that it may not be proper for the appellant to seek a disposition of its appeal on the jurisdiction ques tion without preparing the material for hearing of the appeal on the merits. It may well be that the parties can agree on a joint application for a hearing of the appeal on the jurisdiction question alone subject to a further hearing if the Court of Appeal comes to the conclusion that the Trial Division had jurisdiction or that, if the parties
By its submissions under Rule 324, the applicant states that it is seeking an order "dismissing the claim of the Respondent".
cannot so agree, the appellant might make an application for an order for such a hearing, in which event, the Court could, after considering representation from both parties, decide whether it would be expedient to proceed in some such way.
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RYAN J.: I concur.
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LE DAIN J.: I concur.
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