Supreme Court Judgments

Supreme Court of Canada

Canadian General Electric Co. Ltd. v. Pickford & Black Ltd., [1972] S.C.R. 52

Date: 1971-04-27

Canadian General Electric Company Limited (Plaintiff) Appellant;

and

Pickford & Black Limited (Defendant) Respondent.

1971: March 23; 1971: April 27.

Present: Ritchie, Hall, Spence, Pigeon and Laskin JJ.

ON APPEAL FROM THE EXCHEQUER COURT OF CANADA

Shipping—Admiralty—Practice—Damages to cargo—Award of damages—Registrar’s report—Date when interest to be awarded on the damages.

A claim by the plaintiff for damage to its cargo by faulty stowage was allowed by the district judge

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in Admiralty, who directed that the items of damages and interest which were the subject of dispute between the parties be referred to the Registrar to report in accordance with the rules of Court. The Registrar ruled that the plaintiff was entitled to interest on its claim for damages from the date when the cargo should have been delivered to its intended destination. On a motion to vary the Registrar’s report, the President of the Exchequer Court substituted a provision that interest should only run from the date of the Registrar’s report. The plaintiff appealed to this Court.

Held: The appeal should be allowed.

The Registrar’s report should be affirmed. There is no rule in admiralty to the effect that if the plaintiff’s claim is for damages sustained by the plaintiff it is a claim not only for the damage but also for interest, whereas if it is a claim for damages sustained by his goods, it is a claim only for such damages. Where the jurisdiction of the Court of Admiralty has been invoked the practice, of awarding interest on damages from the time of the injury, applies to a case where the damage alleged is damage sustained by the plaintiff’s goods. Moreover, the plaintiff’s claim was “for damages sustained by the plaintiff as a result of the tortious injury done to his goods.”

APPEAL from a judgment of Jackett P. of the Exchequer Court of Canada[1], allowing a motion to vary the report of the Registrar. Appeal allowed.

F.O. Gerity, Q.C., and G.S. Black, Q.C., for the plaintiff, appellant.

D.D. Anderson, Q.C., and B.A. Crane, for the defendant, respondent.

The judgment of the Court was delivered by

RITCHIE J.—This is an appeal from a judgment of the President of the Exchequer Court[2] dated October 26, 1970, which allowed a motion to vary the report of the District Registrar of the Admiralty District of Nova Scotia, dated May 13, 1969, by deleting therefrom the provision that the present appellant is entitled to interest

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from the date when the cargo, the damage to which was the subject of the action, should have been delivered to its intended destination, and substituting therefore a provision that interest should only run from the date of the Registrar’s report.

In the main action, the claim of Canadian General Electric Co. Ltd., against Pickford and Black Limited for damage to its cargo by faulty stowage, was allowed by Mr. Justice Pottier, the District Judge in Admiralty, by order dated January 20, 1969, which reads, in part, as follows:

IT IS ORDERED that the Plaintiff’s claim herein against the Defendant be and the same is hereby allowed with costs;

AND IT IS FURTHER ORDERED that the Parties may apply to the Court for the purpose of having the damages to the cargo assessed.

On May 8, 1969, Mr. Justice Pottier granted a further order directing that «those items of damages and interest which are the subject of dispute between the parties be referred to Linden M. Smith, Registrar of the Nova Scotia Admiralty District to report in accordance with the rules of Court.»

Mr. Justice Pottier’s order of January 20, 1969, was reversed on appeal to the Exchequer Court[3], but on a further appeal being taken to this Court[4], the judgment of the District Judge was restored by order dated June 1, 1970.

No appeal has ever been asserted from Mr. Justice Pottier’s order of May 8, 1969, directing a reference to the Registrar and in the course of the reasons for judgment of the learned President which are the subject of this appeal, he states that he was informed “by counsel for the defendant, counsel for the plaintiff apparently concurring, that there was no such order, but the parties had arranged between themselves for a reference…”. The learned President goes on to point out that it was only through his own efforts that the order in question was discovered in the files. It appears to me to be significant that the Registrar’s report which is sought to be varied in these proceedings, was made a part of the case

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on appeal in the Exchequer Court and in this Court and it is recited in that report that the Judge in Admiralty of the Nova Scotia Admiralty District had “ordered that an account should be taken and referred the same to the Registrar to report the amount due”. As no reference to the Registrar was ordered by the order of January 20, 1969, it appears to me that the Registrar’s report makes it obvious that a subsequent order was granted pursuant to which the reference was conducted.

Whether counsel knew about it or not, it is quite clear to me from reading the Registrar’s report that he was holding a reference pursuant to Mr. Justice Pottier’s order of May 8, that both parties were represented by counsel and that at the hearing of the reference one of the items in dispute was whether interest should be awarded on the plaintiff’s claim for damages from the date when the goods should have been delivered.

A notice to vary the report of the Registrar was filed on May 23, 1969, pursuant to the provisions of Rule 129 of the Admiralty Court Rules which reads as follows:

129. Within fourteen days after service of the notice of the filing of any report, any party may, by a motion, setting out the grounds of appeal, of which at least eight days’ notice is to be given, appeal to the Court against any report, and upon such appeal, the Court may confirm, vary or reverse the findings of the report and direct judgment to be entered accordingly or refer it back to the referee for further consideration and report.

The Registrar’s report was in no way questioned on the main appeal to the Exchequer Court or in this Court, although it was made a part of the record in both appeals and the appeals were heard after the expiration of the time for appeal under s. 129, but the learned President nevertheless felt this to be an appropriate case in which to extend the time for hearing the appeal for more than one year as he was entitled to do under the provisions of Rule 200 which reads:

200. The judge may enlarge or abridge the time prescribed by these rules or forms or by any order

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made under them for doing any act or taking any proceedings, upon such terms as to him shall seem fit, and any such enlargement may be ordered after the expiration of the time prescribed.

Notwithstanding the circumstances outlined above, the learned President reached his conclusion in the present appeal on the basis that the order of Mr. Justice Pottier of the 8th of May should be ignored. The language which he used was: “In these circumstances I propose to ignore it in reaching my conclusion on this appeal.”

With the greatest respect, I do not think that this Court can ignore an order of a court of competent jurisdiction which bears the seal of that Court and the initials of the Judge who granted it, and which has never been reversed, set aside or varied, and indeed has never been the subject of an appeal of any kind. I accordingly am of the opinion that the questions raised on this appeal must be viewed in light of the fact that the “items of damage and interest” in dispute were referred to the Registrar by an order of the District Judge in Admiralty.

In the course of his reasons for judgment, the learned President was careful to point out that the principles administered by the Court of Admiralty in respect of the allowing of interest as an integral part of the damages awarded “must be applied in an admiralty case in this Court.” The relevant part of his reasons for judgment in this regard read as follows:

It appears therefore that, according to the principles administered by the Court of Admiralty, which principles are the principles that must be applied in an Admiralty case in this Court, a successful plaintiff is entitled not only to be indemnified in respect of the actual damage to his property sustained as a result of a breach of contract or a tort, but is also entitled to compensation in the form of interest in respect of the delay in payment of such damages to the extent that the Court decides in its discretion that he ought to be so compensated in the circumstances of a particular case.

The rule in the Admiralty Court is the same as that in force in admiralty matters in England, and in my view the position is accurately stated by Mr. Justice A.K. McLean, sitting as President

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of the Exchequer Court, in the case of The Pacifico v. Winslow Marine Railway and Shipbuilding Company[5], where he said:

The principle adopted by the Admiralty Court in its equitable jurisdiction, as stated by Sir Robert Phillimore in The Northumbria (1869), 3 A. & E. 5, and as founded upon the civil law, is that interest was always due to the obligee when payment was delayed by the obligor, and that, whether the obligation arose ex contractu or ex delicto. It seems that the view adopted by the Admiralty Court has been, that the person liable in debt or damages, having kept the sum which ought to have been paid to the claimant, ought to be held to have received it for the person to which the principal is payable. Damages and interest under the civil law is the loss which a person has sustained, or the gain he has missed. And the reasons are many and obvious I think, that a different principle should prevail, in cases of this kind, from that obtaining in ordinary mercantile transactions.

I think that in the exercise of the equitable jurisdiction of this Court, and in view of the fact that the Admiralty Court has always proceeded upon other and different principles from that on which the common law principles appear to be founded, that the plaintiff is in this case entitled to the claim of interest as allowed by the Court below, in its formal order for judgment.

It is thus well settled that there is a clear distinction between the rule in force in the common law courts and that in force in admiralty with respect to allowing a claim for interest as an integral part of the damages awarded.

In the present case, however, the learned President felt himself bound by the decision of the Court of Appeal of Ontario in Great Lakes SS. Co. v. Maple Leaf Milling Co.[6], a common law case to which the principles adopted by the courts of admiralty had no application, and in so doing he applied the following excerpt from the judgment of Chief Justice Mulock at page 676:

The plaintiff company appealed from the report on the ground that the Master erred in not allowing interest on the monies expended for the repair of the said damage. The appeal was heard by Riddell, J., and was dismissed, and this appeal is from such

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dismissal, and the question for this Court to determine is whether the Master should have allowed interest on the said expenditures.

The judgment does not declare the plaintiff company entitled to recover damages which it may have sustained because of the injury to the steamer, but merely that it is entitled to recover ‘the damage to the steamer’. This language limits the amount recoverable to the amount of actual damage to the steamer. Interest on the expenditure in repairs may be damage to the plaintiff company, but is not ‘damage to the steamer’.

His reliance on this passage from Chief Justice Mulock’s decision appears to have governed the learned President’s disposition of the matter before him. In this regard, after citing the passage, he went on to say:

Applying this decision, much depends upon how the plaintiff frames his ‘claim’, by the endorsement on his writ of summons and by his statement of claim, and upon how the Court’s decree disposing of the action is framed. If the plaintiff’s ‘claim’ is for the damages sustained by the plaintiff as a result of the tortious injury done to his goods, it is a claim not only for the damages sustained by his goods but for interest on the amount of such damages as compensation for the period from the time when he received, or would have received, the damaged goods until he is paid the amount of such damages. If, on the other hand, the plaintiff’s claim is for the damages sustained by his goods, it is a claim only for such damages. This difference in how the ‘claim’ may be framed is, of course, of great importance, because, if the ‘claim’ is framed in the broader way, the defendant will be on warning that he must defend himself against an implied claim for interest whereas, if the ‘claim’ is framed in the narrower way, the defendant is not faced with any such claim. This difference in how the ‘claim’ may be framed is also of importance because, if the Court’s “Decree” follows the suggestions contained in Form 67 of the Admiralty Rules, it would be framed to read that ‘The Court…pronounced in favour of the plaintiffs claim and condemned the…defendant…in the amount to be found due to the plaintiff’. (The italics are mine.)

In this case, the plaintiff’s claim is defined by the endorsement on the statement of claim as being ‘for damages sustained by the said cargo’ and, while

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the learned trial judge did not follow the exact terms of Form 67, he clearly adverted to the claim as so framed by the writ of summons, when having allowed ‘the Plaintiff’s claim’, he ordered that the parties might apply to the Court for the purpose of having ‘the damages to the cargo’ assessed.

Looking only at the learned trial judge’s decision and the order reflecting that decision, my conclusion would be, for the reasons that I have just given, that the Court’s decree in favour of the plaintiff was limited to the plaintiff’s claim for the damages to the cargo.¹ If that conclusion is correct, the District Registrar could not validly, as referee, have awarded any interest on such damages. The referee obviously has no power to do anything other than determine the amount of the ‘plaintiff’s claim’ in favour of which the Court has pronounced.

It accordingly appears to be clear that the learned President took the view that because there was no mention of interest in the decree issued by Mr. Justice Pottier on January 20, 1969, the Registrar could not validly have awarded any interest on the damages. This reasoning, of course, involves ignoring the order of May 8, 1969, but with all respect, it also appears to me to ignore the principle of admiralty law which has been established since the decision of Lord Selborne L.C. in The Khedive[7], where he says of decrees in the Admiralty Court:

It does not appear to have been the general course of that Court that those decrees should contain any directions as to interest and I think it more probable that the principle upon which interest was computed under them is that mentioned by Mr. Sedgwick in his book on damages where he treats the power of a jury to allow interest as in the nature of damages for the detention of money or property improperly withholding or to punish negligent, tortious or fraudulent conduct; the destruction of or injury to property involving loss of any property which might have been made by its use or employment. (The italics are my own).

There is, in my view, no rule in admiralty to the effect that if the plaintiff’s claim is for damages sustained by the plaintiff it is a claim not

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only for the damage but also for interest, whereas if it is a claim for damages sustained by his goods, it is a claim only for such damages.

The position in admiralty is well illustrated by the case of the Baron Aberdare[8]. The action in that case had been commenced in the Queen’s Bench Division by the owners of the Baron Aberdare against the London and St. Katharine’s Dock Company, for damages sustained by that vessel through the negligence of the dock company. After a verdict had been obtained by the plaintiffs, the action was transferred by consent to the Admiralty Division for the assessment of damages by the Registrar and merchants who awarded interest from the date that the damage was sustained. In the course of his reasons for judgement, Lord Esher, M.R. observed, at page 108:

…the registrar, in accordance with the practice which has existed for many years in the Admiralty Court, awarded interest on the damages from the time the injury occurred. To this award of interest objection has been taken,…

Lord Esher later continued:

It has been further urged that, assuming these were Admiralty cases, the practice in the Admiralty Division of awarding interest eo nomine on the amount of the assessed damages is wrong, and should be overruled, and the practice assimilated to that in the Queen’s Bench Division, but to this latter argument I cannot accede, because it does not seem to me that there is anything unjust in the mode in which the Admiralty Court has always assessed the damages. On the contrary, I am inclined to think that it is more just than the common law rule, and in the case of The Khedive Lord Selborne does not seem in any way to disapprove of this mode of assessing the damages.

I have cited this case to illustrate the fact that where the jurisdiction of the Court of Admiralty has been invoked the practice, of awarding interest on damages from the time of the injury, applies to a case where the damage alleged is damage sustained by the plaintiff’s goods (in that case “the vessel”).

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If, however, there were any such rule as that suggested by the learned President, it is not amiss to point out that the plaintiff in the present action, in alleging negligence, claimed by para. 10 of its statement of claim, that “the plaintiff sustained severe damage to the equipment and machinery referred to herein”. This would appear to me to be a claim which, to use the language of the learned President, “is for damages sustained by the plaintiff as a result of the tortious injury done to his goods.”

For all the above reasons I would allow this appeal, dismiss the motion to vary the report of the Registrar of the Nova Scotia Admiralty Distict dated May 13, 1969, and affirm that report. The appellant is entitled to its costs in this Court and in the Court below.

Appeal allowed with costs.

Solicitors for the plaintiff, appellant: F.O. Gerity, Toronto, and G.S. Black, Halifax.

Solicitor for the defendant, respondent: D.D. Anderson, Dartmouth.