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Jurisdiction under the Athens Convention
Published in the July 2009 issue of Transportation Notes - View Article
In a recent decision from the Divisional Court of Ontario, the Court allowed the appeal of a Small Claims Court judge’s decision and in so doing, affirmed the existence of limits to the discretionary powers of the lower courts.
The respondents were cruise passengers who travelled on a cruise between Italy and England with the appellant, Princess Cruises. The respondents subsequently commenced a Small Claims Court action in Hamilton, Ontario against the appellant, alleging that some $5,000 of foreign currency was stolen from the safe in their stateroom during the trip due to the negligence of the appellant. The booking was made through the respondents’ travel agent in Hamilton.
The appellant brought a motion for summary judgment before the Small Claims Court on the basis that the court lacked territorial jurisdiction pursuant to the Athens Convention on liability for the carriage of passengers and their luggage by sea (“the Convention”). Canada is a party to the Convention and it is given the force of law in Canada pursuant to the Marine Liability Act. There was no question that the Convention applied to the case. Article 2 provides that it applies, inter alia, to contracts of carriage made in a State Party to the Convention.
At issue on appeal was the application of Article 17(1) of the Convention which provides that an action shall be brought before a court located in a State Party to the Convention that is: (a) the court of the place of permanent residence or principal place of business of the defendant; or (b) the court of the place of departure or that of destination according to the contract of carriage; or (c) the court of the State of the domicile or permanent residence of the claimant, if the defendant has a place of business and is subject to jurisdiction in that State; or (d) a court of the State where the contract of carriage was made, if the defendant has a place of business and is subject to jurisdiction in that State.
The motion judge held that the action could be brought in Canada (and thus Ontario) under Article 17(1), paragraphs (c) or (d). As it was undisputed that the contract was made in Canada and Canada is the domicile of the claimants, at issue was whether Princess Cruise Lines has a place of business in Canada. Princess Cruise Lines is owned and operated by Princess Cruise Lines Ltd., whose head office is in California. There was no objection in allowing the claim to be brought against Princess Cruise Lines Ltd. as Princess Cruise Lines. However, the motion judge discovered through his own research on the internet that the appellant is allegedly owned by Carnival Corporation which has places of business in the Yukon Territory and British Columbia. There was no suggestion that Princess Cruise Lines Ltd. is involved in these businesses. The Divisional Court overruled the lower court’s judgment on the basis that there was no evidence that Princess Cruises was a cruise brand of Carnival (rather than a cruise brand of Princess Cruise Lines Ltd.) and that it was Princess Cruise Lines that was the corporate entity that contracted with the respondents.
The most interesting aspect of the appeal decision is the Divisional Court’s discussion of the motion judge’s findings in support of establishing jurisdiction and the way in which he reached his conclusions. The Divisional Court held that whether or not the motion judge’s internet research was properly undertaken, the judge should have let counsel know about it before the conclusion of trial so that the issue could be addressed in argument or by calling further evidence.
In support of his proceeding, the motion judge had adverted to section 25 of the Courts of Justice Act which directs the judge in a small claims proceeding to decide all questions of fact and law in a summary way and allows such orders as are considered just, and agreeable to good conscience. While recognizing the reality of small claims proceedings, the Divisional Court held that section 25 does not “abrogate basic principles of procedural fairness, jurisdiction or statutory interpretation.”
Furthermore, in support of the conclusion that the appellant had a place of business in Canada, the motion judge had relied on evidence that Princess Cruise Lines had ships that docked at Canadian ports from time to time. The Divisional Court rejected this conclusion. It held the fact noted by the judge below could, at most, show the appellant does business in Canada from time to time but does not support the inference the appellant has a place of business in Canada.
This decision represents a much-needed judicial check on a result oriented decision. The interpretation and application of jurisdictional provisions in international agreements is a serious matter and should not be determined by palm tree justice.
Princess Cruises v. Nicolazzo,
[2009] O.J. No. 2294 (S.C.J.).