David G. Colford

The appellants, a Canadian shipping conglomerate, purchased reconditioned marine engine parts from the respondent supplier, whose contract contained a six-month warranty and a clause limiting liability to €50,000.

Well after the warranty expired, the ship's main engine suffered a major failure caused by a latent defect in the supplied crankshaft, and the appellants commenced proceedings for $5,661,830.33 in damages and lost profit.

The trial judge held that the Civil Code of Québec governed the dispute and that the limitation clause was unenforceable, but the Court of Appeal majority reversed, finding Canadian maritime law applicable and the clause valid.

A unanimous Supreme Court of Canada allowed the appeal, restoring the trial judge's conclusions, although the six-judge majority and the three-judge concurrence differed as to the constitutional analysis: the majority applied a modified pith and substance test followed by the integral connection test and concluded that while the sale of marine engine parts falls within both federal legislative authority and provincial property and civil rights power (a double aspect scenario), neither interjurisdictional immunity nor federal paramountcy displaces art. 1733 C.C.Q., which prevails over non-statutory Canadian maritime law; the concurrence would have resolved the matter solely through pith and substance, characterizing the dispute as one of sale of goods governed by s. 92(13).

The appellant appealed a Small Claims Court decision finding it liable for demurrage charges incurred due to delays in returning railcars to the respondent railway.

The appellant argued it was not a 'shipper' and had no direct contract with the respondent.

The Divisional Court dismissed the appeal, upholding the trial judge's finding that the appellant controlled the timing of the railcars' delivery and return, fitting the definition of a 'shipper' under the Canadian Transportation Act, and was therefore responsible for the delay and associated charges.

A Belgian ship was arrested in Halifax by a U.S. creditor claiming a maritime lien for stevedoring services.

The ship's owner was subsequently adjudged bankrupt in Belgium, and the Belgian trustees sought a stay of the Canadian maritime proceedings in favour of the Belgian bankruptcy court.

The Federal Court refused the stay, recognizing the U.S. creditor's maritime lien as a secured claim under Canadian maritime law.

The Supreme Court of Canada dismissed the trustees' appeal, holding that the Federal Court did not err in exercising its discretion to refuse the stay, balancing international comity against the rights of secured creditors under maritime law.

The appeal concerned whether claims arising from a fertilizer supply agreement involving ocean carriage, demurrage, discharge obligations, excess cargo, and shore crane rental fell within the Federal Court's maritime jurisdiction.

Applying the integrally connected test from the maritime jurisdiction jurisprudence, the majority held that the claims were rooted in the buyer's obligation to discharge cargo under the carriage aspects of the agreement and were therefore legitimate matters of Canadian maritime law.

The majority rejected the characterization of the dispute as merely one for the sale of goods under provincial law.

The appeal was allowed, the cross-appeal dismissed, and the trial judgment restored, with a dissent concluding the matter was in pith and substance a provincial sale of goods dispute.