Digests

Inter Atlantic Canada Ltd. v. Rio Cuyaguateje (The)

T-2282-99

2001 FCT 306, MacKay J.

9/4/01

14 pp.

Appeal from Prothonotary's decision to strike statement of claim, warrant for arrest of defendant ship, and declaring arrest of ship, cargo invalid because claim underlying proceedings not within Court's jurisdiction--On February 12, 1999 plaintiff entered into agreement with Dragnets, holder of authorization for 100 fishing days to harvest shrimp allocated to Cuba by North Atlantic Fishing Organization (NAFO)--As consideration for use of allocation, plaintiff agreed to pay US$5000 per month for each month vessel operating under its direction fishing shrimp allocation--In return Dragnets agreed to prosecute shrimp fishery under plaintiff's direction under arrangements whereby plaintiff would pay costs of manning, operating, victualling, fuelling and supplying vessel--Prior to commencement of performance of agreement, Dragnets chartered defendant ship from sister corporation, Pesquera, and contracted allocation to defendant ship rather than to plaintiff--Subsequently sub-chartered vessel to Dragsea to carry out exploitation of fishing allocation--Cancelled agreement with plaintiff on August 8, 1999--Plaintiff initiated this action, claiming right of user in allocation, and provision of it to another fishing vessel constituted supply of necessary as harvest of shrimp in accordance with NAFO fishing regulations could not be undertaken without it--Argued fishing quota assigned to defendant vessel supply of necessary, wrongfully taken from plaintiff for which latter having claim against vessel--Prothonotary determined agreement, not maritime or navigation and shipping issues, subject-matter of action--Appeal dismissed--When making determination regarding jurisdiction, prothonotary held to standard of correctness--Test for determining whether Federal Court has jurisdiction set out in ITO--International Terminal Operators Ltd. v. Miida Electronics et al., [1986] 1 S.C.R. 752: subject-matter must be so integrally connected to maritime matters as to be legitimate Canadian maritime law within federal legislative competence--Federal Court Act, s. 22(2)(m) conferring jurisdiction on Trial Division with respect to any claim in respect of goods, materials, services supplied to ship for operation or maintenance of ship--Jurisdiction conferred in relation to supply of necessary or goods, materials or services to ship only when supplier remaining unpaid--As plaintiff not supplying anything to ship for its operation, maintenance, not remaining unpaid--Main purpose of agreement commercialization of NAFO shrimp fishing allocation--That purpose had nothing directly to do with shipping, navigation or activity on navigable waters--Agreement created to grant access to fishing quota, and any effects upon ships or shipping arising therefrom incidental--Subject-matter of action dealing with agreement to exploit fishing quota, matter not within Federal Court's jurisdiction as matter of navigation, shipping or Canadian maritime law within s. 22--S. 43(2) providing jurisdiction conferred by s. 22 may be exercised in rem against ship--Agreement contemplated use of unnamed third party vessel of Icelandic registry to exploit fishing allocation --At no time was defendant ship considered--Defendant ship not subject to Agreement--Only became involved as result of separate contract between Dragnets and Pesquera to which plaintiff not privy, following cancellation of original agreement--Prothonotary correctly held no in rem jurisdiction to be exercised--To conclude action based on property as permitted in s. 22(2)(m) connection between property seized, i.e. cargo, and cause of action must be apparent from facts--Basis for such claim not set out in statement of claim as not asserting performance of agreement commenced or that any consideration passed between parties--Conditions precedent not met, ownership of shrimp harvest not granted to plaintiff, no profits from shrimp harvest payable to plaintiff--Test for striking pleadings set out in Operation Dismantle Inc. et al. v. The Queen et al., [1985] 1 S.C.R. 441: applicant must show that clear, obvious pleading shows no reasonable cause of action--If Court not having jurisdiction to hear matter, proceeding must be struck as can be no reasonable cause of action if claim not satisfying threshold issue of jurisdiction--Prothonotary correctly finding central issue agreement--Action arising out of alleged breach of contract addressing fishing issues, but fails to connect defendant ship, cargo with agreement--In absence of such connection, claim in rem for necessaries cannot succeed as goods must be supplied to ship by claimant, not to some other party--Alleged breach of agreement not so integrally connected to maritime matters as to constitute legitimate Canadian maritime law or matters falling within class of navigation or shipping--Federal Court Act, R.S.C., 1985, c. F-7, ss. 22, 43.