T-891-76
Haida Helicopters Limited and Haida Industries
Limited (Plaintiffs)
v.
Field Aviation Company Limited, C. C. Carruth-
ers, R. E. Carruthers, Dominion Helicopters Ltd.,
George Gregg and the Queen in right of Canada
(Defendants)
Trial Division, Mahoney J.—Toronto, May 29;
Ottawa, June 7, 1978.
Jurisdiction — Practice — Application to strike statement
of claim as against all defendants except the Queen in action
for damages for breach of contract and negligence — Faulty
installation and inspection of heater kit in helicopter that
resulted in its being burned — Parallel action, except for
defendant the Queen, in Supreme Court of Ontario — That
action dismissed `without prejudice to the plaintiffs' pending
action in the Federal Court of Canada" — Whether or not
applicant defendants have acceded to the jurisdiction of the
Federal Court because of position taken by them in the
Supreme Court of Ontario — Federal Court Act, R.S.C. 1970
(2nd Supp.), c. 10, s. 23 — Federal Court Rules 419 and 474.
This is an application by defendants, other than the Queen,
for an order striking out the statement of claim against them
for want of jurisdiction. It is brought pursuant to Rules 419 and
474. The action is for damages for breach of contract and
negligence. The situation involved a contract, between subjects,
to install a heater kit in a helicopter, and a second contract,
between subjects, for inspection after installation with a view to
certification as to airworthiness and serviceability. The faulty
installation, which was not detected during a negligently per
formed inspection, resulted in a fire that destroyed the helicop
ter. A parallel action in the Supreme Court of Ontario, (except
for the Queen), was dismissed "without prejudice to the plain
tiffs' pending action in the Federal Court of Canada". The
applicant defendants rely on provisions of the Aeronautics Act,
the Air Regulations, and the Canada-U.S. Bilateral Agree
ment in respect of Aircraft, while plaintiffs challenge the
Court's jurisdiction on the basis of the decision in Quebec
North Shore Paper Co. v. Canadian Pacific Ltd. [1977] 2
S.C.R. 1054.
Held, the application is allowed. The challenge to the Court's
jurisdiction is based on the decision of the Supreme Court of
Canada in Quebec North Shore Paper Co. v. Canadian Pacific
Ltd., which is directly on point notwithstanding the fact that
section 23 of the Federal Court Act was considered in the
context of extra-provincial works and undertakings in that case
while here the section must be considered in the context of
aeronautics. While the plaintiffs did not present their position
in the aspect of an estoppel, that appears to be the substance of
the position. An estoppel cannot operate to oust the general law
of the land. It cannot operate to confer jurisdiction on a Court
where none exists. If regarded as an overt acquiescence to this
Court's jurisdiction, as the plaintiffs argue, what happened in
the Supreme Court of Ontario is entirely insufficient to achieve
the desired result. The Court is unaware of any reported case
where that result has been found in the absence of the acquies
cence of the Court concerned as well as the parties.
Quebec North Shore Paper Co. v. Canadian Pacific Ltd.
[1977] 2 S.C.R. 1054, applied. Maritime Electric Co.,
Ltd. v. General Dairies, Ltd. [1937] A.C. 610, applied.
APPLICATION.
COUNSEL:
W. B. Williston, Q.C., and J. A. Campion for
plaintiffs.
K. C. Vaughan and M. J. Melko for
defendants.
G. R. Garton for defendant the Queen.
SOLICITORS:
Fasken & Calvin, Toronto, for plaintiffs.
Lane, Breck & Associates, Toronto, for
defendants.
Deputy Attorney General of Canada for
defendant the Queen.
The following are the reasons for judgment
rendered in English by
MAHONEY J.: This is an application by the
defendants (hereinafter "the applicant defend
ants") other than Her Majesty the Queen, who
takes no position, for an order striking out the
statement of claim and dismissing the action
against them for want of jurisdiction. It is brought
pursuant to Rules 419 and 474.
This is an action for damages for breach of
contract and negligence arising out of the follow
ing material facts as alleged in the statement of
claim. The first named plaintiff (hereinafter
"Helicopters") was lessee and the second named
plaintiff was owner of a helicopter registered in
Canada as CF-BMK. Helicopters contracted with
the defendant, Field, for the purchase and installa
tion of a heater kit in CF-BMK. It was installed
negligently and in breach of the contract by Field's
employees, the two Carruthers. Helicopters also
contracted with the defendant, Dominion, for the
inspection of CF-BMK, after installation of the
heater, with a view to its certification as airworthy
and serviceable. Dominion's servant Gregg carried
out the inspection negligently and in breach of the
contract and did not discover the faulty installa
tion by Field's employees which resulted in a fire
that began while CF-BMK was in flight and
destroyed it on the ground.
The challenge to the Court's jurisdiction is
based on the decision of the Supreme Court of
Canada in Quebec North Shore Paper Company v.
Canadian Pacific Limited' which is, in my view,
directly on point notwithstanding that there sec
tion 23 of the Federal Court Act 2 was considered
in the context of extra-provincial works and under
takings while here the section must be considered
in the context of aeronautics.
23. The Trial Division has concurrent original jurisdiction as
well between subject and subject as otherwise, in all cases in
which a claim for relief is made or a remedy is sought under an
Act of the Parliament of Canada or otherwise in relation to any
matter coming within any following class of subjects, namely
bills of exchange and promissory notes where the Crown is a
party to the proceedings, aeronautics, and works and undertak
ings connecting a province with any other province or extending
beyond the limits of a province, except to the extent that
jurisdiction has been otherwise specially assigned.
The Supreme Court held, at pages 1057-58, that
When s. 23 of the Federal Court Act speaks of a claim for
relief or a remedy "under an Act of the Parliament of Canada
or otherwise", it cannot be given a construction that would take
it beyond the scope of the expression "administration of the
laws of Canada" in s. 101.
Section 101 is, of course, section 101 of The
British North America Act, 1867. 3
101. The Parliament of Canada may, notwithstanding any
thing in this Act, from Time to Time provide for the Constitu
tion, Maintenance, and Organization of a General Court of
Appeal for Canada, and for the Establishment of any addition
al Courts for the better Administration of the Laws of Canada.
' [1977] 2 S.C.R. 1054.
2 R.S.C. 1970 (2nd Supp.), c. 10.
3 30 & 31 Vict., c. 3 (U.K.).
After considering the question, the Court conclud
ed, beginning at page 1065, that section 101,
requires
that there be applicable and existing federal law, whether under
statute or regulation or common law, as in the case of the
Crown, upon which the jurisdiction of the Federal Court can be
exercised. Section 23 requires that the claim for relief be one
sought under such law.
In so far as the applicant defendants are con
cerned, there is no question of Crown law apply
ing. If this Court has jurisdiction, it is because the
relief is sought under federal legislation.
The particulars allege that Field and the
Carruthers
... failed to comply with rules governing the installation of
combustion heaters as provided in the Aircraft Engineering and
Inspection Manual and in particular Part II, Chapter III,
Paragraph 3.7.1 and 3.7.2 thereof, contrary to section 211(9) of
the Air Regulations.
As to Dominion and Gregg, it is alleged
... they certified that CF-BMK, with the Janitrol heater kit
installed, was airworthy and serviceable when they knew or
ought to have known from a proper inspection of CF-BMK, the
installation of the Janitrol heater kit, and the aforesaid draw
ings and reports that the said aircraft was not airworthy and
serviceable by reason of the installation of the Janitrol heater
kit in the manner described herein contrary to section 219A of
the Air Regulations.
The plaintiffs plead and rely on provisions of the
Aeronautics Act, 4 the Air Regulations, 5 particu
larly sections 219A and 211(1),(8) and (9), and
the Canada-U.S. Bilateral Agreement in respect
of Aircraft.
It was not argued that either the Aircraft Engi
neering and Inspection Manual or the Canada-
U.S. Bilateral Agreement in respect of Aircraft
are federal law. No substantive provision of the
Aeronautics Act has been suggested or suggests
itself to me as being a provision under which the
relief herein is sought against the applicant
defendants. The same is the case for the particular
provisions of the Regulations pleaded. This Court
is without jurisdiction to entertain the • action
against the applicant defendants.
° R.S.C. 1970, c. A-3.
5 SOR/61-10, as amended.
It appears from the affidavit filed in opposition
to this motion that the plaintiff, Haida Industries
Limited, commenced an action against the appli
cant defendants, arising out of the same facts, in
the Supreme Court of Ontario on May 18, 1971.
Pleadings closed February 23, 1972 and a notice of
trial was served by the applicant defendants on
that plaintiff on January 27, 1976. This action was
commenced March 2, 1976, and, on May 24,
1976, an order issued in the Ontario action adding
Helicopters as a plaintiff and amending the state
ment of claim accordingly. Thus, from March 24,
1976, there were parallel actions in this Court and
the Supreme Court of Ontario. As between the
plaintiffs and applicant defendants the causes of
action and allegations of fact were identical. The
only distinguishing feature was that Her Majesty
was a defendant in this Court. On November 26,
1976, on application by the applicant defendants,
the Ontario action was dismissed with costs and
"without prejudice to the plaintiffs' pending action
in the Federal Court of Canada".
The plaintiffs' affidavit states:
I am informed by John Campion, counsel appearing on the
motion to dismiss the Supreme Court action on behalf of the
plaintiffs and do verily believe that, he, on behalf of the
plaintiffs in the Supreme Court action, opposed the motion to
dismiss the action therein on the grounds that there was a
potential problem of jurisdiction in the Federal Court with
respect to the first defendants. Counsel on behalf of the first
defendants took the position that there was no issue as to
jurisdiction being raised in the Federal Court proceedings.
The plaintiffs argue that, because of the position
taken by them in the Supreme Court of Ontario,
the applicant defendants have acceded to the juris
diction of this Court. This argument cannot
succeed.
While the plaintiffs did not present their posi
tion in the aspect of an estoppel, that would appear
to be the substance of the position. It is trite law
that an estoppel cannot operate so as to oust the
general law of the land. 6 It cannot operate to
confer jurisdiction on a court where none exists.
If regarded as an overt acquiescence to this
Court's jurisdiction, as the plaintiffs argue, what
happened in the Supreme Court of Ontario is
entirely insufficient to achieve the desired result. I
have found no reported case where that result has
been found in the absence of the acquiescence of
the court concerned as well as the parties.' That
acquiescence is most frequently to be inferred
from the fact that the court proceeded to judg
ment, with the consent of the parties, notwith
standing some doubt as to its jurisdiction. Where
the court's acquiescence has been forthcoming,
and the doubts as to its jurisdiction well founded,
the court has been held to have acted as an
arbitrator, with all that involves, rather than a
court. In other words, it acts as a private rather
than a public tribunal, something not to be under
taken lightly in the best and most compelling of
circumstances, and not at all in the absence of the
clear and complete agreement of the parties.
The applicant defendants did not ask for costs.
The order sought will be granted and the action
against the defendants, other than Her Majesty,
will be dismissed without costs. This will obviously
entail an extensive amendment to the statement of
claim if the plaintiffs wish to proceed with their
action against Her Majesty. Rather than fix dead
lines and deal with details of what should be struck
from the statement of claim and what other
amendments ought to be made, I propose to grant
leave to the plaintiffs to file and serve an amended
statement of claim on Her Majesty and to stay
proceedings herein in the interval.
6 Maritime Electric Company, Limited v. General Dairies,
Limited [1937] A.C. 610.
7 Cases considered include:
Martin v. Cornhill Insurance Co. [1935] 2 D.L.R. 682.
Attorney General of Nova Scotia v. Gregory (1886) 11
App. Cas. 229. Conant Paints Ltd. v. Clark [1955] 2
D.L.R. 151. Burgess v. Morton [1896] A.C. 136. Canadi-
an Pacific Railway Company v. Fleming (1893) 22
S.C.R. 33.
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