Date: 19990609
Docket: T-469-99
BETWEEN:
TOWN SHOES LIMITED and
EMFARO CALZATURE S.R.I.
Plaintiffs
_
- and -
PANALPINA INC., PANALPINA S.P.S.,
PANTAINER LTD.,
PANALPINA WELTTRANSPORT A.G.,
PANALPINA WELTTRANSPORT GmbH,
PANTAINER EXPRESS LINE and
M.G. TRANSPORT LTD.
Defendants
REASONS FOR ORDER
TEITELBAUM J.:
[1] On March 15, 1999, the Plaintiffs, Town Shoes Limited (Town Shoes) and Emfaro Calzature S.R.L. (Calzature) served a Statement of Claim on the Defendants and filed the said statement of claim into the Registry of the Federal Court.
[2] For the present purposes the Defendants will be referred to as Panalpina and M.G. Transport, the two major defendant "players" in the present dispute.
[3] In the Statement of Claim the Plaintiffs claim $50,000.00 for loss, damages and expenses related to the loss of a shipment of shoes sent with Panalpina, as carrier, from Italy to Canada pursuant to a contract of carriage evidenced by a Bill of Lading dated July 27, 1997.
[4] Pursuant to the Bill of Lading, Panalpina undertook to arrange for the carriage of the cargo of shoes by sea from Leghorn, Italy to Montreal, Canada and to deliver the cargo to the Plaintiff, Town Shoes.
[5] Panalpina engaged M.G. Transport, also, I am told, part of the Defendants corporate group, to carry and store the cargo prior to the delivery of the cargo to the consignee Town Shoes.
[6] The cargo of shoes was picked up by M.G. Transport from the rail terminal in Montreal and brought to the facilities of M.G. Transport in St-Laurent, Quebec..
[7] The container which contained the shoes was stolen from the M.G. Transport facility in St-Laurent, Quebec resulting in, according to the Statement of Claim in a loss "in the amount of $51,934.31".
[8] Plaintiffs sued, in the Federal Court, the Defendants as a result of this loss.
[9] The Defendants now make a Motion for an Order staying or dismissing the proceedings commenced by the Plaintiffs "in favour of the jurisdiction of the Court of Hamburg (Germany) as contractually required" or in the alternative an Order extending the time for the Defendants to file their Statement of Defence.
[10] The grounds of the motion, as stated in the Notice of Motion are:
| 1. The Terms and Conditions of the Bill of Lading relied upon by the Plaintiff specifically state |
| 18. Law and Jurisdiction: Any dispute arising under or in connection with this Bill of Lading shall be exclusively decided by the Court of Hamburg according to the Law of the Federal Republic of Germany. Carrier reserves the right to bring suit against Merchant at Merchant"s domicile. |
| 2. Section 50 of the Federal Court Act. |
[11] In the affidavit of Nathalie Payenberg filed with the Notice of Motion, she states:
| 2. I have spoken with Ms. U. Köpke of the Law/Claims Department of the Defendant and I am advised by her and verily believe that Pantainer Ltd. was the only contracting party with the Plaintiffs. To the extent that any of the other Defendants were involved in the subject matter of this litigation, it was solely as agents of Pantainer Ltd. All of the other Defendants are related companies to Pantainer Ltd. |
| 3. As is admitted in the Statement of Claim the agreement between the parties is subject to the Terms and Conditions indicated on the Bill of Lading of Pantainer Ltd. A copy of Pantainer Ltd."s Bill of Lading / Terms and Conditions is attached hereto as exhibit "A". Unfortunately, because of the paper and print used for the Bill of Lading, photocopying is difficult. Of prime importance is clause 18. Of the Terms and Conditions and for clarity it states as follows. |
| 18. Law and Jurisdiction: Any dispute arising under or in connection with this Bill of Lading shall be exclusively decided by the Court of Hamburg according to the Law of the Federal Republic of Germany. Carrier reserves the right to bring suit against Merchant at Merchant"s domicile. |
4. The Defendants request that this dispute be determined by the Court of Hamburg.
[12] In reply, the Plaintiffs filed the affidavit of George R. Strathy in which he states:
8. The Defendants contend that these proceedings should be stayed based on the "Law and Jurisdiction" clause in the "Pantainer" bill of lading, which provides as follows:
"Any dispute arising out of or in connection with this Bill of Lading shall be exclusively decided by the Court of Hamburg according to the Law of the Federal Republic of German. Carrier reserves the right to bring suit against Merchant at Merchant"s domicile."
9. I verily believe that this clause, insofar as it calls for the application of German law, is inconsistent with clause 1 of the bill of lading, the "Clause Paramount", which provides, in part, as follows:
"All carriage under this Bill of Lading to or from Canada shall be subject to COGWA (Carriage of Goods by Water Act Canada). The applicable law shall govern before the goods are loaded on and after they are discharged from the vessel whether the goods are carried on deck or under deck and throughout the entire time the goods are in the custody of the Carrier."
10. The term "Carrier" is defined in the bill of lading to mean the defendant Pantainer Ltd.
11. I verily believe that the loss in this case occurred prior to the completion of the contract of carriage evidenced by the bill of lading and while the goods were in the custody of the defendant Pantainer Ltd. or its agent the defendant M.G. Transport Ltd.
12. I therefore verily believe that the liability of the defendants falls to be determined by Canadian law pursuant to the "Clause Paramount.".
13. Further, I verily believe that the defendant M.G. Transport Ltd., whether or not it is "related" to Panalpina Ltd., has a liability to the plaintiffs in tort, quite apart from the terms of the bill of lading. The tort of negligence having occurred in Quebec, the said defendant"s liability falls to be determined under Canadian Maritime Lw and/or Quebec civil law.
14. Based on my review of this matter, I verily believe that there is no connection between Germany and the circumstances giving rise to this claim. The only connection appears to be that one of the defendants, Panalpina Welttransport GmbH, is based in Hamburg. The defendant Pantainer Ltd., described in the bill of lading as the "Carrier", appears to have its base of operations in Basle, Switzerland, according to clause 2.2 of the bill of lading.
15. I verily believe that the result of staying these proceedings and requiring the plaintiffs to bring their claim in Germany would be to cause serious prejudice to the plaintiffs, inasmuch as a suit time limitation, which had previously been extended by the defendants (this action having been commenced in the interim) has expired.
16. I further believe that the result of requiring the plaintiffs to litigate in Germany would be to cause serious prejudice and would greatly extend the time and expense of determining this dispute, for the following reasons:
| (a) the key witnesses in this case, relating to liability and damages, are based in Canada - these include: |
| (i) managerial personnel of Town Shoes Limited, to prove the Plaintiffs" contracts and damages; |
| (ii) the plaintiffs" marine surveyor, who investigated the loss; |
| (iii) representatives of the warehouse, in whose custody the goods were at the time of the loss; |
| (b) the legal issues, including the application of any limitation of liability, fall to be determined by Canada law; |
| (c) to prove Canadian law in the Court of Hamburg would call for expert evidence of Canadian lawyers and the fees and disbursements of bringing such lawyers to Germany would greatly increase the costs of litigation. |
17. I verily believe that the sole reasons that the defendants seek to rely on the so-called "law and jurisdiction" clause is to delay these proceedings and to cause increased expense and great inconvenience to the plaintiffs in the prosecution of an uncomplicated claim.
18. I verily believe that the cost and expense of prosecuting this claim in Germany would be disproportionate to the amount at issue and that the Federal Court of Canada offers the least expensive and most expeditious forum in which to determine this claim on its merits.
...
20. I am familiar with the defendant Panalpina Inc. and its related companies ("Panalpina"). To my knowledge, Panalpina is one of the largest frieght forwarding and transportation organizations in the world, with operations "on six continents", as its letterhead states. I am aware that Panalpina carries on an extensive business in Canada and that it has operations, offices and warehouses in Ontario and Quebec.
[13] I believe it important to incorporate the statements made by Mr. Strathy in his affidavit as it speaks to many factors that I must consider before granting or dismissing the present application.
[14] The issue is to determine whether, because of clause 18 of the Bill of Lading, the present matter be stayed so as to allow the parties to proceed before the Court in Hamburg, Germany.
[15] I believe in order to determine where jurisdiction should lie, one must refer to the case of The "Eleftheria" reported in Lloyd"s Law Reports [1969] Vol 1 at page 237. Mr. Justice Brandson states at page 242, in discussing the principles to be followed, the following:
The principles established by the authorities can, I think, be summarized as follows: (1) Where plaintiffs sue in England in breach of an agreement to refer disputes to a foreign Court, and the defendants apply for a stay, the English Court, assuming the claim to be otherwise within the jurisdiction, is not bound to grant a stay but has a discretion whether to do so or not. (2) The discretion should be exercised by granting a stay unless strong cause for not doing so is shown. (3) The burden of proving such strong cause is on the plaintiffs. (4) In exercising its discretion the Court should take into account all the circumstances of the particular case. (5) in particular, but without prejudice to (4), the following matters, where they arise, may be properly regarded: (a) In what country the evidence on the issues of fact is situated or more readily available, and the effect of that on the relative convenience and expense of trial as between the English and foreign Courts. (b) Whether the law of the foreign Court applies and, if so, whether it differs from English law in any material respects. (c) With what country either party is connected, and how closely. (d) Whether the defendants genuinely desire trial in the foreign country, or are only seeking procedural advantages. (e) Whether the plaintiffs would be prejudiced by having to sue in the foreign Court because they would (i) be deprived of security for that claim; (ii) be unable to enforce any judgment obtained; (iii) be faced with a time-bar not applicable in England; or (iv) for political, racial, religious or other reasons be unlikely to get a fair trial.
[16] What I take from Mr. Justice Brandson"s decision is that I have discretion as to whether or not I grant a stay but that in exercising that discretion I must be convinced, after considering all of the facts and circumstances of the case before me, that a strong case exists not to follow what the parties allegedly agreed was to be the jurisdiction where the dispute is to be heard and what law would apply. I must consider in what country the evidence on the issues of fact is situated or more readily available and the effect of that on the issue of convenience and expense of trial as between German and Canadian Courts, what law would apply, with what country are the parties connected, whether the Defendants genuinely desire trial in Germany or are seeking procedural advantages, whether the Plaintiffs would be prejudiced in having to sue in Germany because "faced with a time-bar not applicable in Canada".
[17] Plaintiffs also submit that Clause 1 of the Bill of Lading which reads, in full,
All carriage under this Bill of Lading shall be subject to the Hague Rules (as contained in the International Convention for the Unification of Certain Rules Relating to Bills of Lading, August 1924), the Hague-Visby Rules (as contained in the Protocol of Brussels, February 1968) or the Hamburg Rules (as contained in the United Nations Convention on Carriage of Goods by Sea, March 1978), where compulsory or if there be no such applicable law, in accordance with the Hague-Visby Rules. All carriage under this Bill of Lading to or from the United States shall be subject to COGSA (Carriage of Goods by Sea Act of the United States). All carriage under this Bill of Lading to or from Canada shall be subject to COGWA (Carriage of Goods by Water Act of Canada). The applicable law shall govern before the goods are leaded on and after they are discharged from the vessel whether the goods are carried on deck or under deck and throughout the entire time the goods are in the custody of the Carrier.
is to be considered as a "Clause Paramount" and appears to be in contradiction with Clause 18 of the Bill of Lading which states that in the event of any dispute arising out of the Bill of Lading, the dispute is to be "exclusively decided by the Court of Hamburg according to the Law of the Federal Republic of Germany".
[18] Mr. Justice Strayer, at the time a Judge of the Trial Division of the Federal Court, in the case of Ontario Bus Industries Inc. v. Ship "Federal Calumet" et al 47 F.T.R. 149 at 154 states:
In reaching this conclusion I am applying the rule of interpretation of contracts that were there is an ambiguity the contract should be construed contra proferentem ... . The defendants prepared this bill of lading. The choice of Belgian law favours the plaintiff and not the defendants in this case, as will be seen. It should also be noted that the choice which I attribute to the parties as described in the third sentence of paragraph 3, is that of the "Hague-Visby Rules as enacted in the country of the port of loading ...".
[19] In the case of Methanex New Zealand Ltd. V. Kinnganwa (The) [1998] 2 F.C. 583, a decision of John Hargrave, Prothonotary of the Federal Court, it was held that "Duplicate proceedings which run the risk of conflicting judgements and waste time and money, are always strong grounds for refusing a stay".
Discussion
[20] It appears clear from a reading of Clause 18 in the Bill of Lading that the parties had agreed that any dispute under or in connection with the Bill of Lading, that is, any dispute with regard to the shipment of Plaintiffs shoes would be decided by the German Court in Hamburg according to German Law. Nevertheless, in Clause 1, the "Clause Paramount", it stipulated that "All carriage under this Bill of Lading to or from Canada shall be subject to COGWA (Carriage of Goods by Water Act of Canada).
[21] I agree with the submission of Counsel for the Plaintiffs that the application of the jurisdiction clause gives rise to uncertainty and the inconsistency between clause 1 and clause 18 of the Bill of Lading creates, at least, some ambiguity and should be decided in favour of the Plaintiffs.
[22] Even if I am wrong and basing myself on the factors to be considered as enunciated by Mr. Justice Brandson in The "Eleftheria" case, supra, I am satisfied that the present application cannot succeed.
[23] First, as I have said, I have a discretion in deciding where it is best to have this case tried. I am satisfied that the facts are such that there is strong reason to have the case heard in Canada and not in Germany.
[24] In the case at bar, the cargo of shoes was stolen from the warehouse of M.G. Transport whose warehouse is situated in the Province of Quebec in Canada. It would appear that the evidence of fact would be found in the Province of Quebec. In that, I am satisfied, the factual evidence or almost all of it is to be found in the Province of Quebec as it relates to the theft, it would be a waste of money and time to send witnesses to prove the theft and value of the goods stolen to Germany.
[25] In the present case, the Plaintiff Town Shoes is the consignee and has its Head Office in Canada. The evidence of George R. Strathy regarding the Defendants attachment to Germany is found in paragraph 14 of his affidavit. In that only one Defendant, Panalpina Wilttransport GmbH is based in Hamburg, Germany, and the carrier, Pantainer Ltd. appears to be based in Basle, Switzerland, it appears that the Defendants have very little connection to Germany.
[26] I questioned counsel for the Defendants as to how many, if any, witnesses he could foresee Defendants would be required to bring to Canada to defend the claim made by the Plaintiffs. I fully understand that this is the start of the proceedings and that it may be difficult for him to answer, but he was unable to reply other than to say "I don"t know". I therefore have no evidence of any prejudice to the Defendants if the case were to be heard in Canada.
[27] The Plaintiffs would, I am satisfied, suffer severe prejudice. According to Mr. Strathy"s affidavit (Paragraph 15), the Plaintiffs claim could well be time-barred (prescribed) if Plaintiffs were forced to proceed in Germany.
[28] After reviewing the evidence (the affidavits and the Bill of Lading) I am satisfied that the Defendants do not have a genuine desire to have the trial take place in Germany, but are using this as a means to cause Plaintiffs additional and unnecessary expenses to possibly force a settlement.
[29] I make the above statement solely from the evidence that is in front of me, that is, I see absolutely no reason for the Defendants to insist that this matter be heard in Germany other than to cause additional problems for the Plaintiffs to make their case.
[30] For the above reasons, the application for stay is denied with costs in favour of the Plaintiffs.
"Max M. Teitelbaum"
J.F.C.C.
Toronto, Ontario
June 9, 1999
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
COURT NO: T-469-99
STYLE OF CAUSE: TOWN SHOES LIMITED and
| EMFARO CALZATURE S.R.I. |
Plaintiffs
| _ - and - |
| PANALPINA INC., PANALPINA S.P.S., |
| PANTAINER LTD., |
| PANALPINA WELTTRANSPORT A.G., |
| PANALPINA WELTTRANSPORT GmbH, |
| PANTAINER EXPRESS LINE and |
| M.G. TRANSPORT LTD. |
Defendants
DATE OF HEARING: MONDAY, JUNE 7, 1999
PLACE OF HEARING: TORONTO, ONTARIO
REASONS FOR ORDER BY: TEITELBAUM J.
DATED: WEDNESDAY, JUNE 9, 1999
APPEARANCES: Ms. Lorelei M. Amlin
For the Plaintiffs
Mr. Kevin A. Johnson
For the Defendants
SOLICITORS OF RECORD: Strathy & Richardson
| Barristers & Solicitors |
| 401 Bay Street, Suite 2420, Box 69 |
| Toronto, Ontario |
| M5H 2Y4 |
For the Plaintiffs
| Lette, Whittaker |
| Barristers & Solicitors |
| 20 Queen Street West, Suite 3330 |
| P.O. Box 33 |
| Toronto, Ontario |
| M5H 3R3 |
For the Defendants
FEDERAL COURT OF CANADA
Date: 19990609
Docket: T-469-99
Between:
| TOWN SHOES LIMITED and |
| EMFARO CALZATURE S.R.I. |
Plaintiffs
| _ - and - |
| PANALPINA INC., PANALPINA S.P.S., |
| PANTAINER LTD., |
| PANALPINA WELTTRANSPORT A.G., |
| PANALPINA WELTTRANSPORT GmbH, |
| PANTAINER EXPRESS LINE and |
| M.G. TRANSPORT LTD. |
Defendants
REASONS FOR ORDER