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Newsletters 2011 > December 2011

In this issue:
1. Firm and Industry News
2. Defamation in the Internet Age
3. Verbal Notice of a Claim
4. Bailment Not Applicable in Carriage Contract
5. Registration of Foreign Arbitration Awards in Federal Court
6. Halsbury's Laws of Canada - Transportation

 

1. Firm and Industry News

  • January 13th, 2012, Toronto: Fernandes Hearn LLP Annual Maritime and Transportation Conference
  • January 14-15, 2012, New Orleans: Conference of Freight Counsel
  • January 20th, 2012, Chicago: Transportation Lawyers Association Chicago Regional Seminar
  • January 20th, 2012, Toronto: Marine Club Annual Dinner
  • February 8-9, 2012, Miami: Trucking Industry Defence Association Advanced Seminar
  • April 19 - 22, 2012, Athens: Institute of Air & Space Law Conference on Aviation Law and Insurance
  • May 8-9, 2012, Toronto: Supply Chain Canada Annual Conference
  • May 23 & 24, 2012, Banff Springs: Semi-Annual Meeting Canadian Board of Marine Underwriters

    Halsbury's Laws of Canada has just published its Transportation - Carriage of Goods and its Transportation - Railways titles in one text. Rui Fernandes is the author for both of these works. See the summary of the works below in item 7.

    Gordon Hearn will be representing the firm at the Conference of Freight Counsel being held in New Orleans, LA. on January 14-15, 2011.

    Kim Stoll will be representing the firm at the Chicago Regional Conference of the Transportation Lawyers Association in Chicago, IL. on January 20th, 2011.

    The Fernandes Hearn LLP 12th Annual Maritime & Transportation Conference 2012 "Winning Cases with Experts" will take place as per below:

    Date: Thursday January 19th, 2012
    Location: Royal & Sun Alliance Lecture Theatre (Courtesy RSA)
    10 Wellington St. East, Toronto ON
    Cost: $50.00 - Includes light lunch and materials on CD ROM
    Registration: Shannon Manna, Fernandes Hearn LLP 416-203-9500
    BY INVITATION ONLY
    Send cheques to: Fernandes Hearn LLP,
    155 University Ave. Suite 700, ON M5H 3B7
    Limited to 100 attendees RIBO Credits (Technical)

    TOPICS

    8:00-8:30 Registration & Coffee
    8:30-8:45 Welcome
    8:45-9:15 Use of Experts at Trial
    9:15-9:45 Insurance Issues: Reservation of Rights, Non-Waiver Agreements, Additional Insureds, Coverage Gaps and Overlaps, Subrogation
    9:45-10:15 Frozen & Refrigerated Foods
    10:15-10:45 Determining Cause in Engine Failures
    10:45-11:00 Coffee Break - Sponsored by Zurich Canada
    11:00-11:30 Energy Update
    11:30-12:00 Valuations of Economic Losses
    12:00-12:30 Accident Reconstructions
    12:30-1:30 LUNCH
    1:30-2:30 Modal Updates
    Aviation
    Marine
    Trucking
    Rail & Forwarders
    Insurance
    2:30-330 Expert Panel: TBA


 

2. DEFAMATION IN THE INTERNET AGE: HYPERLINKS ARE NOT NECESSARILY "PUBLICATION" TO A THIRD PARTY

The Supreme Court of Canada recently released its decision in Crookes v Newton (*1) (no relation to the author). In Crookes, the Court considered the issue of whether having hyperlinks on a webpage constituted a "publication" of defamatory material to a third party for the purposes of a defamation lawsuit. The judgment of the majority was delivered by Justice Abella. who concluded that "mere reference" to content by hyperlink is not publication, but that publication exists where the reference to the hyperlinked website "actually repeats the defamatory content".

Chief Justice McLachlin and Justice Fish agreed with the majority, but proposed a different test: in some circumstances, "the combined text and hyperlink may amount to publication of defamatory material" such as where "the text indicates adoption or endorsement of the content of the hyperlinked text".

Finally, Justice Deschamps dissented as to the relevant test, (but agreed with the other judges on the outcome of the appeal) and considered the particular issue on appeal in the broader context of communications media and preferred to revise the publication rule. He held that a more nuanced approach, compared to that of Justice Abella, is to consider whether the defamatory content can satisfy the requirements of the publication rule, in particular considering that only deliberate acts can lead to liability for defamation.

Facts

The respondent Jon Newton operated a website containing commentary about free speech and the internet, including an article titled "Free Speech in Canada" which contained hyperlinks to other websites which, in turn, contained information about the appellant, Mr. Wayne Crookes (*2). Mr. Wayne Crooks was the president and sole shareholder of West Coast Title Searches Ltd., and he commenced lawsuits against Mr. Newton and others, claiming that they published allegedly defamatory articles by using the hyperlinks (*3).

The hyperlinks (identified by underlining in the decision) with which Mr. Crooks took issue were:

Under new developments, . . . I've just met Michael Pilling, who runs OpenPolitics.ca. Based in Toronto, he, too, is being sued for defamation. This time by politician Wayne Crookes.

We've decided to pool some of our resources to focus more attention on the appalling state of Canada's ancient and decrepit defamation laws and tomorrow, p2pnet will run a post from Mike [Pilling] on his troubles. He and I will also be releasing a joint press statement in the very near future.
(*4)

The "OpenPolitics.ca" hyperlink, a "shallow" hyperlink, took viewers to the "OpenPolitics" website where ten articles were posted, three of which Mr. Crookes alleged were defamatory (*5). The "Wayne Crookes" hyperlink, a "deep" hyperlink, took viewers directly to an allegedly defamatory article published on www.USGovernetics.com (*6).

Mr. Crookes and his lawyer asked Mr. Newton to remove the hyperlinks, but Mr. Newton refused (*7). Mr. Crookes alleged in his defamation suit that Mr. Newton defamed him by "creating hyperlinks to the allegedly defamatory articles, or by refusing to remove those hyperlinks when told of their defamatory character, Mr. Newton himself became a publisher of the articles" (*8). Mr. Crookes' website had been viewed 1,788 times but there was no information "about whether, or how many times, the hyperlinks themselves had been clicked on" (*9). Mr. Crookes argued before the Supreme Court of Canada that inserting a hyperlink on a webpage should result in a presumption that the hyperlinked content "has been brought to the knowledge of a third party and has therefore been published" (*10).

Abella J. for the Majority

The test for an action in defamation was set out by the Supreme Court of Canada in Grant v Torstar Corp (*11), wherein it was stated that the plaintiff must "prove on a balance of probabilities that the defamatory words were published; that is, that they were 'communicated to at least one person other than the plaintiff'" (*12). Courts have held that "any act which has the effect of transferring the defamatory information to a third person constitutes a publication", such that the actual form of the defendant's act of publication is irrelevant (*13).

Initially, "publication" was held to exist in a wide variety of circumstances, such as pointing at a sign or speaking loudly enough to be overheard in another room. However, more recently, courts have moved toward the notion that "some acts are so passive that they should not be held to be publication" (*14). After referring to several older U.S. cases, Justice Abella stated that she agreed with the approach of the British Columbia Court of Appeal in Carter v BC Federation of Foster Parents Assn (*15) where the court held that "reference to an article containing defamatory comment without repetition of the comment itself should not be found to be a republication of such defamatory comment" (*16).

Justice Abella first described references to other content in general, and then hyperlinks specifically:

[26] A reference to other content is fundamentally different from other acts involved in publication. Referencing on its own does not involve exerting control over the content. Communicating something is very different from merely communicating that something exists or where it exists. The former involves dissemination of the content, and suggests control over both the content and whether the content will reach an audience at all, while the latter does not. Even where the goal of the person referring to a defamatory publication is to expand that publication's audience, his or her participation is merely ancillary to that of the initial publisher: with or without the reference, the allegedly defamatory information has already been made available to the public by the initial publisher or publishers' acts. These features of references distinguish them from acts in the publication process like creating or posting the defamatory publication, and from repetition.

[27] Hyperlinks are, in essence, references. By clicking on the link, readers are directed to other sources. Hyperlinks may be inserted with or without the knowledge of the operator of the site containing the secondary article. Because the content of the secondary article is often produced by someone other than the person who inserted the hyperlink in the primary article, the content on the other end of the link can be changed at any time by whoever controls the secondary page. Although the primary author controls whether there is a hyperlink and what article that word or phrase is linked to, inserting a hyperlink gives the primary author no control over the content in the secondary article to which he or she has linked. …

[29] Although the person selecting the content to which he or she wants to link might facilitate the transfer of information (a traditional hallmark of publication), it is equally clear that when a person follows a link they are leaving one source and moving to another. In my view, then, it is the actual creator or poster of the defamatory words in the secondary material who is publishing the libel when a person follows a hyperlink to that content. The ease with which the referenced content can be accessed does not change the fact that, by hyperlinking, an individual is referring the reader to other content. (See Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34, [2007] 2 S.C.R. 801, at paras. 97-102.)

[30] Hyperlinks thus share the same relationship with the content to which they refer as do references. Both communicate that something exists, but do not, by themselves, communicate its content. And they both require some act on the part of a third party before he or she gains access to the content. The fact that access to that content is far easier with hyperlinks than with footnotes does not change the reality that a hyperlink, by itself, is content neutral - it expresses no opinion, nor does it have any control over, the content to which it refers.

Justice Abella noted that this interpretation accords with the fact that defamation actions involve not only the plaintiff's "interest in protecting his or her reputation, but also the public's interest in protecting freedom of expression", (*17) and that a proper balance must be struck between these two factors. Thus, excluding mere references from the test of defamation accords with such balancing of the two factors, and "also with the dramatic transformation in the technology of communications" (*18). Facilitating use of the internet's capacity to disseminate information should be encouraged, and without hyperlinks "the web would be like a library without a catalogue: full of information, but with no sure means of finding it" (*19).

The internet cannot "provide access to information without hyperlinks", and "subjecting them to the traditional publication rule would have the effect of seriously restricting the flow of information and, as a result, freedom of expression" (*20). Justice Abella and the majority of the Court did not wish to risk the functional impairment of the internet by stifling the use of hyperlinks. Her Honour recognized that the internet has "tremendous power" to harm the reputation of others, but she was not convinced that applying the traditional publication rule to hyperlinks would protect those reputations (*21). Use of hyperlinks may result in liability for defamation, however, where, "understood in context", the hyperlink itself expresses something defamatory.

In summary:

[42] Making reference to the existence and/or location of content by hyperlink or otherwise, without more, is not publication of that content. Only when a hyperlinker presents content from the hyperlinked material in a way that actually repeats the defamatory content, should that content be considered to be "published" by the hyperlinker. Such an approach promotes expression and respects the realities of the Internet, while creating little or no limitations to a plaintiff's ability to vindicate his or her reputation. While a mere reference to another source should not fall under the wide breadth of the traditional publication rule, the rule itself and the limits of the one writer/any act/one reader paradigm may deserve further scrutiny in the future.

Justice Abella for the majority, therefore, held that, because nothing on Mr. Newton's webpage was itself defamatory, and because the court decided that the use of a hyperlink cannot by itself amount to publication, Mr. Crookes did not succeed in his action for defamation. Even when taken in context, the hyperlinks did not express any opinion, defamatory or otherwise, of Mr. Crookes.

Chief Justice McLachlin and Justice Fish

This is one of the relatively few Supreme Court of Canada decisions where the Court is not unanimous in its pronouncement of its decision. Here, the Chief Justice and Justice Fish issued separate concurring reasons, proposing a different test for when a hyperlink constitutes a publication for the purposes of an action in defamation. They stated that, in some circumstances, "the combined text and hyperlink may amount to publication of defamatory material", such as where "the text indicates adoption or endorsement of the content of the hyperlinked text", but a mere reference is not enough (*22).

Justice Deschamps

Finally, Justice Deschamps also issued lengthy separate reasons concurring with the result, but with a different analysis than that of the other judges. His decision framed the issue as whether "notwithstanding these defences [to liability for defamation], the scope of conduct that may attract prima facie liability for defamation is itself too broad and in need of adjustment to further promote freedom of expression" (*23).

Defamation requires proof of publication, and publication involves "(1) an act that makes the defamatory information available to a third party in a comprehensible form, and (2) the receipt of the information by a third party in such a way that it is understood" (*24). Justice Deschamps noted that while this appeal dealt with internet hyperlinks, the "answer must [also] be adaptable to other modes of communication and to future technological change" (*25).

Justice Deschamps disagreed with the approach taken by Justice Abella and the majority. A "blanket exclusion" of hyperlinks from the publication rule "exaggerates the difference between references and other acts of publication", but also "treats all references, from footnotes to hyperlinks, alike" (*26). Rather, Justice Deschamps preferred a different approach:

A more nuanced approach to revising the publication rule, and one that can be applied effectively to new media, would be for the Court to hold that in Canadian law, a reference to defamatory content can satisfy the requirements of the first component of publication if it makes the defamatory information readily available to a third party in a comprehensible form. In addition, the Court should make it clear that not every act, but only deliberate acts, can lead to liability for defamation (*27).

The requirement of a deliberate act has already been applied in internet defamation cases. In Godfrey (as noted by Justice Deschamps), an ISP was found to have published defamatory material when it failed to act after being alerted that its news server contained defamatory information and a request that it be removed. In Bunt, (as noted by Justice Deschamps), an ISP did not publish defamatory material because their role was passive. These cases illustrate that "not every act that makes the defamatory information available" constitutes publication; rather, the plaintiff must prove "that the act is deliberate", which requires proving that "the defendant played more than a passive instrumental role in making the information available" (*28).

Justice Deschamps proposed that the proper approach, rather than Justice Abella's approach to exclude hyperlinks from the scope of the publication rule, is:

… (1) to explicitly recognize the requirement of a deliberate act as part of the Canadian common law publication rule, and (2) to continue developing the rule incrementally in order to circumscribe the matter in which a deliberate act must make defamatory information available if it is to result in a finding of publication (*29).

Justice Deschamps did provide some guidance with respect to hyperlinks:

… In determining whether hyperlinked material was readily available, a court should consider a number of factors, including whether the hyperlink was user-activated or automatic, whether it was a shallow or a deep link, and whether the linked information was available to the general public (as opposed to being restricted). This list of no factors is by no means exhaustive … (*30).

There is no presumption of liability for persons posting hyperlinks. Rather, the plaintiff must prove that "the hyperlinker performed a deliberate act that made defamatory information readily available to a third party in a comprehensible form" and that "a third party received and understood the defamatory information" (*31). A legal test that "focuses on how a hyperlink makes defamatory information available" versus the bright line test advocated by Justice Abella "offers a more contextual and more nuanced response to developments in communications media" (*32).

Determining whether a third party received and understood the defamatory hyperlinked material by clicking on the link, will depend on "a variety of factors" that are similar to those considered to determine whether the defamatory information was readily available, but which also add:

… whether the page contained more than one hyperlink and, if so, where the impugned link was located in relation to others; the context in which the link was presented to users; the number of hits on the page containing the hyperlink; the number of hits on the page containing the linked information (both before and after the page containing the link was posted); whether access to the Web sites in question was general or restricted; whether changes were made to the linked information and, if so, how they correlate with the number of hits on the page containing that information; and evidence concerning the behaviour of Internet users (*33).

Justice Deschamps disagreed with Justice Abella for the majority that a simple reference to defamatory material does not constitute publication to the extent that it means "a simple reference cannot form the basis for a finding of publication without actually expressing something defamatory" (*34).

However, if the person referencing the hyperlink did not know the information in the hyperlinked material was defamatory, and was aware of no circumstances to put him or her on notice to suspect that the material was defamatory, then the defence of innocent dissemination should be made available (*35). This defence should also mitigate any "chilling effect" on free speech. If the defence of innocent dissemination is not available, the defences of fair comment and reasonable communication of matters on public interest then may apply.

In conclusion:

It should be evident that the law of defamation, viewed as a whole, is the result of a sustained effort to maintain a balance between the protection of reputation and freedom of expression. An approach that limits the discussion to the fact that what is in issue is a reference and disregards the context, including the nature of the reference and the various aspects of the law of defamation, is too narrow. In my view, the question of publication must be approached from a wider perspective, bearing in mind the incremental adjustments made to the law of defamation in recent years (e.g., WIC and Grant). Moreover, any further adjustments to defamation law should also be made incrementally, not by way of a sweeping declaration that treats all forms of reference alike and rules out the possibility of a reference to defamatory material supporting a finding of publication (*36).

Justice Deschamps noted that Mr. Newton "acted as more than a mere conduit in making the hyperlinked material available"; rather, his actions were deliberate (*37). The shallow link to OpenPolitics did not make the defamatory content readily available because "the reader would have to take further action in order to find the defamatory material" (*38). However, the deep link to www.USGovernetics.com did make content readily available because "all the reader had to do to gain access to the article was to click on the link" (*39). However, there was no evidence indicating that a third party received and understood the information, therefore the second part of the test was not satisfied.

Conclusion

This decision illustrates the degree of care that should be taken with regard to information one posts online, in either private or commercial posts. Both approaches stipulated by the Supreme Court of Canada leave this area relatively unclear. The majority held that mere reference to a hyperlink does not constitute defamation (even if the hypelinked material is defamatory), but that publication does occur when the content of that hyperlink is published. The question of what constitutes publication of the content still very much depends on the context of that publication. In addition, an element of uncertainty has been added by the concurring opinion of the Chief Justice and Justice Fish, and that of Justice Deschamps. Particularly given Justice Deschamps' disagreement with the majority's pronouncement that a mere hyperlink reference is not defamatory, persons or companies posting material on the internet should be particularly careful to review hyperlinked material to ensure there is no defamatory content in the hyperlinked material, and to properly review and respond to allegations from third parties that any material is defamatory.

Kimberly Newton


*1 2011 SCC 47 [Crookes].
*2 Crookes, supra note 1 at para 5.
*3 Ibid at paras 4 and 6.
*4 Ibid at para 7.
*5 Ibid at paras 6 and 8.
*6 Ibid.
*7 Ibid at para 9.
*8 Ibid at para 10.
*9 Ibid.
*10 Ibid at para 14.
*11 2009 SCC 61, [2009] 3 SCR 640.
*12 Crookes, supra note 1 at para 1.
*13 Ibid at para 16, citing Stanley v Shaw, 2006 BCCA 467 at para 5, 231 BCAC 186.
*14 Ibid at paras 18-21.
*15 2005 BCCA 398, 42 BCLR (4th) 1.
*16 Crookes, supra note 1 at paras 24 and 25.
*17 Ibid at para 31.
*18 Ibid at para 33.
*19 Ibid at para 34.
*20 Ibid at para 36.
*21 Ibid at paras 37 and 39.
*22 Ibid at para 48.
*23 Ibid at para 54.
*24 Ibid at para 55.
*25 Ibid at para 56.
*26 Ibid at para 58.
*27 Ibid at para 59.
*28 Ibid at para 91.
*29 Ibid at para 92.
*30 Ibid at para 99.
*31 Ibid at para 100.
*32 Ibid at para 106.
*33 Ibid at para 110.
*34 Ibid at para 111.
*35 Ibid at para 113-114, citing Society of Composers, Authors and Music Publishers of Canada v Canadian Assn of Internet Providers, 2004 SCC 45, [2004] 2 SCR 427.
*36 Ibid at para 117.
*37 Ibid at para 63.
*38 Ibid at para 124.
*39 Ibid at para 125.



3. A "Verbal" Notice of Claim: The Door Is Open in Quebec

The recent decision of the Quebec Superior Court, 6357318 Canada Inc v. Transport Verville Ltée, 2011 QCCS 5475 (CanLII) could be a game changer for the insurers and adjusters involved with cargo claims in Quebec. The three conditions regarding the validity of a cargo notice of claim prescribed by section 2050 of the Quebec Civil Code (being 1) a written notice, 2) detailing the claim and 3) that same be sent within 60 days of the delivery of the goods) could now be more flexibly interpreted than before.

The Facts

This decision is a classic example of a cargo claim in Canada. The Plaintiff 6357318 Canada Inc., a shipper, contracted with the Defendant, Transport Verville Ltée, a carrier, for the carriage of cargo. Upon delivery to the consignee, the cargo was found to be damaged. A representative of the shipper was immediately advised of the damage, who in turn, advised a representative of the carrier. The same day, representatives of both companies together inspected the damage to the cargo. The incident was followed by a lawsuit brought by the shipper against the carrier for damages pursuant to the contract of carriage.

The Motion for Dismissal of the Action for Lack of Written Notice

The Defendant sought the dismissal of an action, through the Quebec equivalent of a motion for summary judgment, regarding the cargo claim on the basis that the written notice of claim had been delivered 62 days after the delivery of the goods, hence two days too late.

The Plaintiff defended that motion on the basis that while, on the one hand the written notice of claim might have been delivered two days too late on the other hand the carrier had been advised immediately of the loss and, as a result of that verbal notice, it had the chance to conduct a thorough inspection of the goods the same day.

The Ruling

After review of the case law regarding the requirement of a written notice of claim pursuant to section 2050 of the Quebec Civil Code, the Honourable Judge found that the Court in the past had put more importance on the ultimate purpose of the Notice of Claim, which is to advise the carrier and to provide him with the opportunity to conduct an inspection, than the actual form of that notice.

Given the high burden upon a Defendant seeking a dismissal of an action at a preliminary stage as in this case and the possibility, based on the jurisprudence on the topic, that in fact, a verbal notice of claim could be sufficient to fulfill the first or written notice requirement of section 2050 of the Quebec Civil Code, the Honorable Judge in this case refused to dismiss the action and found in favour of the Plaintiff.

Conclusion

It is still highly recommended that anyone involved with cargo claims in Quebec should send written notice of claim within 60 days. However, it appears that a verbal notice of claim could serve the same ultimate purpose as a written notice of claim and could, therefore, be sufficient to fulfill the first requirement of section 2050 of the Quebec Civil Code.

David Huard


 

4. Bailment Not Applicable in Carriage Contract

In Pro Transport Ltd. v. Day & Ross Inc., 2011 NBCA 104, the New Brunswick Court of Appeal had occasion to comment on the relationship between the law of bailment and the limitation of liability under a bill of lading. The trial judge held the amount for which the carrier was liable, after losing the appellant's hydraulic pump, was limited to the amount fixed in accordance with the bill of lading.

According to the bill of lading, the carrier's liability for non-delivery was limited to $2/lb, unless the consignor declared the value of the goods on the face of the bill of lading. The consignor had failed to do so and, hence, the carrier insisted that its liability was to be calculated by reference to the weight of the pump (2,815 lb) and not the value of a new replacement pump ($18,785) as claimed by the appellant. The trial judge accepted the carrier's argument and fixed the damages at $5,630, while provisionally assessing the appellant's loss at $5,910, in the event the limitation of liability clause should be declared inapplicable.

An issue arose as to whether the bill of lading applied or whether the law of bailment applied. The trial judge rejected the appellant's contention that, in fact, the pump had arrived in Edmonton, Alberta, from Bathurst, New Brunswick and was mistakenly transferred or delivered to another consignor. On a balance of probabilities, the trial judge concluded the pump was lost in transit. This finding was central to the appellant's bailment argument. The appellant had argued that, once the goods had arrived in Edmonton, the contractual relationship between the parties was governed by the law of bailment and the Warehouse Receipts Act, R.S.N.B. 1973, c. W-3, (now R.S.N.B. 2011, c. 236), and, therefore, the respondent carrier could no longer rely on the limitation clause found in the bill of lading.

The appellant insisted that the trial judge made a palpable and overriding error in concluding, as a matter of fact, that the pump was lost in transit.

The Court of Appeal, however, concluded that:

…it makes no difference whether the pump was lost in transit or lost after it arrived in Edmonton. In either case the bill of lading prevails. There is no logical reason or legal support for the proposition that the contractual relationship between the parties was transformed from a contract for the carriage of goods to a bailment contract once the goods arrived in Edmonton. The reality is that the bill of lading placed an express limitation on the carrier's liability with respect to the "non-delivery of the goods" to the consignor (the appellant). The law of bailment simply has no application and nothing found in the provincial legislation alters this legal reality. Hence, this case comes squarely within the legal framework, governing bills of lading and limitation of liability clauses, outlined in Day & Ross v. Beaulieu, 2005 NBCA 25 (CanLII), 2005 NBCA 25, 280 N.B.R. (2d) 201.

The Court of Appeal dismissed the appeal. No additional analysis is provided but it clearly appears that, in a carriage situation where a bill of lading is issued, bailment does not play a part.

Rui Fernandes

 


5. Registration of Foreign Arbitration Awards in Federal Court

In the recent decision of Orient Overseas Container Line Limited v. Sogelco International, 2011 FC 1466, Justice Harrington of the Federal Court of Canada had occasion to consider the application of Rule 326 of the Federal Courts Rules, which allows for the registration and enforcement of a foreign arbitral award.

In September 2009, the applicant carrier "OOCL," obtained an arbitration award from Manfred W. Arnold, a New York arbitrator, against Sogelco International ("Sogelco") for unpaid freight, demurrage and related charges arising from five shipments of frozen fish from Halifax to Antwerp. Sogelco has always maintained the position that the arbitrator did not have jurisdiction as it had never agreed, in writing or otherwise, to arbitrate.

In February 2010, OOCL applied ex parte for the registration and enforcement of the award in accordance with rule 326 to 334 (and following) of the Federal Courts Rules. Sogelco was given leave to contest the application.

By order dated 27 April 2010, Prothonotary Morneau dismissed Sogelco's opposition and granted the application for registration and enforcement.

Sogelco appealed the order of Prothonotary Morneau.

Justice Harrington reviewed the OOCL arbitration and the application for registration and enforcement and stated:

OOCL's motion is founded on rule 326 of the Federal Courts Rules which defines a "foreign judgment" as including an arbitral award that may be registered here in accordance with articles 35 and 36 of the Commercial Arbitration Code, set out in the Schedule to the Commercial Arbitration Act. It is important to note that rule 326 refers only to articles 35 and 36 of the Code, rather than the entire code. The Code is based on, but is not identical, to the Model Law on International Commercial Arbitration as adopted by the United Nations Commission on International Trade Law in 1985. More particularly, article 1(2) explicitly states: "The provisions of this Code, except articles 8, 9, 35 and 36, apply only if the place of arbitration is in Canada." This point seems to have been lost. Furthermore, the Code only applies if one of the parties is Her Majesty, or if in relation to maritime or admiralty matters. This is unquestionably a maritime matter. The Court has to ensure that the claim is maritime in nature (Compania Maritima Villa Nova S.A. v Northern Sales Co, reflex, [1992] 1 FC 550, 137 NR 20).

Justice Harrington reviewed Article 35. He concluded that Article 35 sets out what OOCL had to do to have the award recognized in Canada as binding and subject to enforcement. It was required to provide copy of the award, which it did, and the original or a certified copy of the "arbitration agreement referred to in article 7…" Article 7 provides that the arbitration agreement shall be in writing. The agreement need not be signed, as "a writing" would include an exchange of letters, telex, telegrams or other means of telecommunication, which can record the agreement.

Justice Harrington then reviewed the evidence to determine whether there was an agreement to arbitrate. He found that:

The undisputed evidence before the arbitrator, and before the Prothonotary, is that on 10 April 2006 an OOCL Services Contract was signed by Mr. Elbaz, the president of Sogelco, and by the pricing director of OOCL. It is Mr. Elbaz' uncontradicted evidence that he only signed and received the one page. That one page, however, states that it is page one of eight. There is no evidence that Mr. Elbaz ever asked for the other seven pages. Clause 12 on page four of eight provides that the contract is governed by the law of the United States and "any dispute in connection with the Contract shall be resolved by arbitration in New York, NY, or as may be mutually agreed…" The parties did not agree to resolve their dispute in any other way.

Justice Harrington dismissed Sogelco's appeal. Moral of the story - if you get a one page contract and it says that it is page one of eight - get the rest of the document.

Rui Fernandes

 


6. Halsbury's Laws of Canada - Transportation Law

Transportation - Carriage of Goods
Rui M. Fernandes, B.Sc., J.D., LL.M.

With carriage of goods law often at the forefront of commercial transactions, Halsbury's Transportation - Carriage of Goods title offers the ideal resource for lawyers who require a concise explanation of how this specialized area of law operates.[1] Timely and accessible, and written by one of Canada's leading transportation lawyers, this valuable reference delivers a clear narrative of the legislative framework and identifies the relevant case law that practitioners need to be aware of. It contains useful answers to questions on a wide range of topics, including:

  • Federal and provincial powers and areas of responsibility
  • Carriage of goods by road
    • Federal legislation regulating extra-provincial trucking
    • Provincial licensing of carriers
    • Powers and procedures of transport authorities
    • Equipment and personnel
    • Duties and responsibilities of carriers
    • Passenger and luggage liability issues
    • Hazardous goods
  • Carriage of goods by rail
    • Contractual arrangements
    • Loss, damage or delay
    • Accommodation for goods
    • Connecting carriers
  • Carriage of goods by water
    • Formation and interpretation of Charter parties
    • Loading and discharge of goods
    • Frustration of contracts
    • Hague-Visby rules regarding bills of lading
    • Responsibilities, liabilities, rights and immunities of carrier
  • Arbitration clauses, letters of indemnity

Transportation - Railways
Rui M. Fernandes, B.Sc., J.D., LL.M.

Once at the very heart of commercial activity and the Canadian Dream, railways still play an important part in the transport of passengers and goods, and rail lines are omnipresent in virtually every populated region in Canada. Transportation - Railways provides a comprehensive and national treatment of the law governing the construction, operation, safety and oversight of federal and provincial railways, including matters such as:

  • The legislative framework
  • Role and powers of the Canadian Transportation Agency
    • Orders, enforcement and appeals
    • Mediation and arbitration
    • Violations and offences under the legislation
  • Regulation of railway construction
    • Expropriation of land
    • Location, re-location and approval procedures
    • Construction and maintenance costs
  • Safety standards and regulation
    • Duty of care, rights of way and railway crossings
    • Environmental protection
    • Passenger car safety requirements
  • Powers, responsibilities and management of railway companies
  • Traffic operations and rules
  • Carriage of passengers
    • Service requirements, persons with disabilities and personnel training
    • Baggage issues
  • Tariffs, rates and freight

 



 

 


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