T-3106-72
Swiss Bank Corporation (Plaintiff)
v.
Air Canada, Swissair and Swiss Transport Co.
Ltd. (Defendants)
Trial Division, Addy J.—Montreal, May 6;
Ottawa, May 20, 1975.
Jurisdiction—Aeronautics—Claim for loss of cargo shipped
by air—Defendant admitting liability, but alleging limitation
imposed by Carriage by Air Act—Plaintiff alleging gross
negligence and claiming limitation not applicable—Defendant
moving to dismiss for lack of jurisdiction—Carriage by Air
Act, R.S.C. 1970, c. C-14, Sch. I, Arts. 22, 25, 30 and Sch. III,
Arts. XI, XIII.
A cargo of Canadian bank notes was shipped from Switzer-
land to Montreal, and was lost after being unloaded. Defend
ant, Air Canada, admits liability, but alleges it is limited to
$73.25 under the Carriage by Air Act. Plaintiff alleges that the
loss and failure to notify police constitute gross negligence and
that the limitation does not apply. Defendant moves for dismis
sal for lack of jurisdiction.
Held, granting the motion, the Court has not been granted
jurisdiction. According to Canadian Fur Company (NA) Ltd. v.
KLM [1974] 2 F.C. 944, the Court has no jurisdiction to hear a
cargo claim against an air carrier. Air Canada is not "a
corporation agent of the Crown" so as to create jurisdiction
under section 17 of the Federal Court Act. Nor is it a servant
of the Crown within the ambit of section 17(4). As to the
meaning of "aeronautics" in section 23, there is nothing in the
Okanagan Helicopters decision [1974] 1 F.C. 465 which
implies that the word would apply to a cargo claim against an
air carrier. Jurisdiction over carriage of goods by air is careful
ly excluded by the wording of section 22(3)(b). As to the
argument that the Court has jurisdiction under section 23 on
the grounds that the right of action is founded on an Act of
Canada, the Carriage by Air Act, and specifically, the Warsaw
Convention, and that such carriage consists of "works and
undertakings ... extending ... beyond the limits of a province",
although the right of recovery may be founded in the Act,
carriage of air freight does not constitute a work or undertaking
of the Crown.
Canadian Fur Company (NA) v. KLM [1974] 2 F.C. 944,
and King v. The Queen (unreported, T-2573-71), followed.
Okanagan Helicopters v. Canadian Pacific Limited [1974]
1 F.C. 465, distinguished.
APPLICATION.
COUNSEL:
V. Prager and M. De Man for plaintiff.
A. Giard and M. Martineau for defendant Air
Canada.
J. Roger for defendant Swissair.
SOLICITORS:
Stikeman, Elliot, Tamaki, Mercier & Robb,
Montreal, for plaintiff.
Boudreau, Giard & Gagnon, Montreal, for
defendant Air Canada.
Doheney, Day & Co., Montreal, for defendant
Swissair.
The following are the reasons for judgment
rendered in English by
ADDY J.: This is an application by way of a
motion by the defendant Air Canada to have the
action dismissed as against it for lack of jurisdic
tion. The ,motion was brought after pleadings had
been closed.
The claim arises out of the loss of a cargo
consisting of $60,400.00 in Canadian bank notes
shipped from Basel, Switzerland via Zurich to
Montreal. The defendant applicant carried the
cargo on the second leg of the journey, that is,
from Zurich to Montreal. The bank notes arrived
at Montreal but were lost after being unloaded and
before the consignee, The Royal Bank of Canada,
received them or was notified of their arrival.
The defendant applicant admits liability for the
loss and has paid into Court the sum of $73.25
alleging that its liability is limited to that amount
pursuant to the hereinafter-mentioned provisions
of the Carriage by Air Act'. The plaintiff respond
ent alleges that the loss of the cargo and the
failure to notify the police of the loss amount to
gross negligence and, as a result, the limitation of
liability does not apply.
The bank notes were shipped under an air way-
bill and the claim is governed by a convention
entitled Certain Rules Relating to International
R.S.C. 1970, c. C-14.
Carriage by Air signed at Warsaw in 1929 and
amended by a further convention signed at The
Hague in 1955, both of which are adopted by and
incorporated in the Carriage by Air Act. The issue
is clearly whether there was gross negligence on
the part of Air Canada or its agents which, by
reason of the operation of Article 25 of the
Warsaw Convention, as amended by Article XIII
of The Hague Convention, would prevent the
defendant from availing itself of the limitation of
liability provided for in Article 22 of the Warsaw
Convention as amended by Article XI of The
Hague Convention.
In the case of Canadian Fur Company (NA)
Ltd. v. KLM Royal Dutch Airlines [1974] 2 F.C.
944, I held that this Court had no jurisdiction to
hear a cargo claim against an air carrier. In that
judgment I went at some length into the reasons
why no such jurisdiction existed and no useful
purpose will be served by reiterating them here.
In the case at bar, I can find nothing either in
the facts or in the arguments advanced by counsel
for the respondent which would lead me to a
different conclusion from that which I arrived at in
the former case. From a factual standpoint, the
mere fact that the applicant defendant is Air
Canada does not create jurisdiction pursuant to
section 17 of the Federal Court Act as Air Canada
is not the Crown nor a "corporation agent of the
Crown" which could be sued as if it were in fact
the Crown. Furthermore, even if the Crown were a
party to the action, Air Canada, on the facts, could
not be sued either as a "servant" of the Crown
within the meaning of section 17(4) of the Federal
Court Act. (Refer to judgment of my brother
Gibson J. in King v. The Queen; King v. Air
Canada, unreported, dated November 17, 1971,
Court File No. T-2573-71, wherein the status of
Air Canada is considered at some length.)
Counsel for the plaintiff respondent argued that
the word "aeronautics," in section 23 of the Fed
eral Court Act, should be given a broad interpreta
tion by reason of the principle enumerated in the
case of Okanagan Helicopters Ltd. v. Canadian
Pacific Limited 2 . At page 467 in that case, my
brother Mahoney J. stated as follows:
The Oxford English Dictionary defines aeronautics as: "the
science, art or practice of sailing in the air; aerial navigation."
Other acceptable dictionaries are no more elaborate in their
definitions. The question is whether or not a helicopter, resting
on the ground with its rotor in motion in anticipation of
take-off is engaged in aeronautics. I think it is. Clearly if it
were airborne it would be and I think it would be a strained and
artificial interpretation to separate activities on the ground
essential to the act of flying from the flight itself.
Furthermore, in the absence of any clear contrary intention
in the statute, the Court should conclude that Parliament
intended it, in the application of its judicial jurisdiction, to give
the word the same meaning that Parliament itself, in the
application of its legislative jurisdiction, has given it. Parlia
ment has legislated with respect to the use and operation of
aircraft and to accidents involving aircraft and that legislation
applies as well to use, operation or accidents on the ground as
in the air.
(This case was reversed in part by a judgment of
the Court of Appeal on the 18th, of December,
1974 [A-127-741, but the appeal does not affect
the above-quoted passage. As a matter of fact, the
question of jurisdiction was not raised on appeal
and the Court of Appeal carefully stated that it
was refraining from making any finding regarding
jurisdiction.)
In my view, there is nothing in the above pas
sage which, in any way, either directly or indirect
ly implies that the word "aeronautics" would apply
to a cargo claim against an air carrier. On the
contrary, I feel that the interpretation given to the
word "aeronautics" falls well within the normal
dictionary definition and generally accepted mean
ing of the word.
An article, published in 1969 by Colin H.
McNairn in (1969) 47 Can. Bar. Rev. 355 was
also quoted, at some length, by counsel as author
ity for the proposition that the meaning of the
word "aeronautics" should be extended to include
the rights between the shipper and the carrier in
contracts of carriage of goods by air. I have con
sidered the article carefully and cannot find that it
supports such a proposition. In any event, for the
purpose of the Federal Court Act, in view of the
fact that, where jurisdiction covering contracts of
carriage of goods by ship is given to this Court by
2 [1974] 1 F.C. 465.
section -22(2)(f), jurisdiction over such contracts,
in so far as carriage by air is concerned, is careful
ly excluded by reason of the wording of section
22(3)(b), it seems clear that the word cannot be
taken to include contracts of carriage of goods by
air. Section 22(3)(b) reads as follows:
22. (3) For greater certainty it is hereby declared that the
jurisdiction conferred on the Court by this section is applicable
(b) in relation to all aircraft where the cause of action arises
out of paragraphs (2)(j), (k) and (I) whether those aircraft are
Canadian or not and wherever the residence or domicile of the
owners may be; [The underlining is mine.]
Finally, it was argued that the Federal Court
has been granted jurisdiction pursuant to section
23 of the Federal Court Act on the grounds that
the right of action is founded on an act of the
Parliament of Canada, namely, the Carriage by
Air Act and, more specifically, Article 30 of the
Warsaw Convention annexed as Schedule I of the
Act, and that such carriage constitutes: "... works
and undertakings ... extending beyond the limits
of a province ...." Although the right of recovery
against Air Canada may well be founded on
Article 30 of Schedule I of the Carriage by Air
Act, I do not hesitate in coming to the conclusion
that the carriage of air freight does not constitute
a work or undertaking of the Crown; it is the work
and undertaking of Air Canada, a corporation
created by the Crown.
I therefore conclude that this Court has not
been granted jurisdiction to entertain the present
action against Air Canada. The motion of the
applicant Air Canada will be granted with costs
and the action against it shall be dismissed with
costs to be paid by the plaintiff forthwith after
taxation thereof.
In so far as the other defendant Swissair and
Swiss Air Transport Co. Ltd. is concerned,
although it did have a representative at the hear
ing of the motion, it was not a party to the
application nor did it participate in any way in the
application. However, since it will be obviously
entitled to the dismissal of the action on the same
grounds as Air Canada, in order to avoid further
proceedings and unnecessary expense, this Court
ex proprio motu will be dismissing the action as
against that defendant with costs.
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.