CAPITAINES PROPRIÉTAIRES DE LA GASPÉSIE (A.C.P.G.) INC. v. PAULIN COTTON, 2011 FC 2

Federal Court Cour fédérale Date: 20110105 File: T-1444-09 Citation: 2011 FC 2 [UNREVISED CERTIFIED ENGLISH TRANSLATION] Ottawa, Ontario, January 5, 2011 Present: The Honourable Mr. Justice Pinard ADMIRALTY ACTION IN PERSONAM BETWEEN: CAPITAINES PROPRIÉTAIRES DE LA GASPÉSIE (A.C.P.G.) INC. and PAULIN COTTON and AXA ASSURANCES, INC. Applicants and PÊCHERIES GUY LAFLAMME INC. and GUY LAFLAMME Respondents REASONS FOR ORDER AND ORDER [ 1 ] The applicants, by this motion, want to obtain a

summary judgment in order to: 1. have the exclusion clause contained in the ​boat handling​ contract entered into by the parties on May 19, 2008, declared valid, operative and applicable between the parties; 2. have the respondents​ defence and counterclaim dismissed because of the application of the exclusion clause; 3. obtain any further order that this Court may consider appropriate in the circumstances; 4. the whole with costs against the respondents.

[ 2 ] The motion is made under sections 213, 214, 215, 359 and following and

section 70 of the Federal Court Rules , SOR/98- 106 . [ 3 ] At all material times in this matter, the Association des Capitaines-propriétaires de la Gaspésie (A.C.P.G.) Inc. (A.C.P.G.) was incorporated under

part 1A of the Companies Act , its head office being at 1 de la Langevin, Rivière-au-Renard, Quebec, Canada. [ 4 ] At all material times in this matter, the applicant Paulin Cotton was the employee of the applicant A.C.P.G. and the designated operator of the portal crane used by A.C.P.G. [ 5 ] At all material times in this matter, the applicant AXA Assurances, Inc. (AXA Assurances) was the insurer of the applicant A.C.P.G. under a policy (Marine Liability Policy) numbered 7822850. [ 6 ] The shareholders of the applicant A.C.P.G. are captains and owners of fishing vessels. [ 7 ] One of these shareholders is the respondent Guy Laflamme (the respondent).

He holds the majority of shares in the respondent company Pêcheries Guy Laflamme Inc., which has its head office at 232 Renard Boulevard East, Rivière-au-Renard, Quebec. The respondent Pêcheries Guy Laflamme Inc. (the respondent) itself owns the vessel Myrana I , official number 800832. [ 8 ] The applicant A.C.P.G. offers its shareholders towage services and operates a fleet of vessels. It operates a portal crane used for launching vessels in the spring and storing them in the fall.

These services are subject to the terms contained in a contract entitled ​Man​uvre de bateau - Autorisation d​exécuter les man​uvres / cale de halage de Rivière-au-Renard​. This contract is also required to bill for services rendered by the applicant to fishing captains.

The contract includes, among others, the following clause: [TRANSLATION] I, undersigned, ______________, residing at ______________, owner of the vessel V/M _______________, registration number ________, declare that I take responsibility for any risk resulting from the towage, docking, wintering and/or launching of this vessel and I release the Owner of this slip dock and its Operator _______________ of any civil liability resulting from these associated operations or handling. [ 9 ] The contract signed by Guy Laflamme, dated May 19, 2008, for the launching of Myrana I stated that the operator was the applicant Paulin Cotton. [ 10 ] On May 19, 2008, the respondent​s vessel was launched using the portal crane operated by applicant Paulin Cotton following the terms of the contract.

When the vessel had been lifted several metres from the surface of the water, a mechanical problem apparently caused the vessel to fall into the water.

After this incident, the respondents claimed that the vessel had incurred damages of as much as $552,181.07 and, by way of a letter from their counsel dated April 3, 2009, claimed this amount from A.C.P.G. and AXA Assurances. [ 11 ] Denying any liability, the applicants then sued the respondents for the purpose of obtaining a declaration from this Court to the effect that the exclusion clause in the contract operates against the respondents and that, consequently, they could not claim damages from them. [ 12 ] The applicants argue and base their action on Canadian maritime law as defined in

section 2 of the Federal Courts Act , R.S.C. (1985), c. F-7.

[13] In their defence, the respondents deny that the exclusion clause in question applies in their case. They also filed a counterclaimagainst AXA Assurances on the basis that, when handling vessels, it was never a question of evading liability from the insurancecompany with which the respondent signed a contract as a member of the A.C.P.G.

The counterclaim also alleges that AXA Assurancesis requiring payment for an obligation it does not fulfill, a fact that gives the respondent a disadvantage as a consumer and asks that AXAAssurances compensate the respondents for the total amount of $408,277.05 plus interest and the additional amount from the date of thedemand. [14] In its counterclaim, AXA Assurances argues that the majority of the alleged damages to the respondent​s vessel are not a resultof the incident of May 19, 2008; furthermore, it submits that the respondents are not insured under the insurance policy and that,therefore, there is no contractual relationship between it and the respondents.

Finally, AXA alleges that the exclusion clause operatesagainst the respondents and adds that even if the clause was not applicable, the respondent​s damages should not exceed $49,000. [15] The applicants subsequently sent the respondent a summons to appear under

section 91 of the Rules and an oral examinationof the respondent took place on June 11, 2010. It was then that the applicants filed this motion for

summary judgment. * * * * * * * * [16] A

summary judgment ​prevents claims or defences that have no chance of success from proceeding to trial​ (Canada (AttorneyGeneral) v. Lameman, 2008 SCC 14 , [2008] 1 S.C.R 372, para. 10). In Apotex Inc. v. Merck & Co., 2002 FCA 210 ,[2003] 1 F.C. 242, at para. 49, the Federal Court of Appeal stated the following: . . . It must be noted that the Federal Court Rules, 1998, insofar as they provide for

summary judgment where there is no genuine issuefor trial, are unique. The Federal Court Rules, 1998 empower a motions judge to make findings of fact or law necessary to dispose of themotion, provided the relevant evidence is available on the record, and does not involve a ​serious​ question of fact or law which turns onthe drawing of inferences. In essence, where a trial would add detail, but not significant additional evidence, it is better for the motionsjudge to determine the question of law or fact in issue (see Pawar v.

Canada, (FC), [1999] 1 F.C. 158 (TD), affirmed(1999), 247 N.R. 271 (FCA), leave to appeal to SCC denied (2000), 257 N.R. 398; Warner-Lambert v. Concord Confections Inc., 2001FCT 139; Wetzel v. Canada, [2000] F.C.J. No. 155 (T.D.). [17] In this case, while they acknowledge that they have the burden of proving that there is no genuine issue, the applicants refer toSuntec Environmental Inc. v. Trojan Technologies Inc., 2004 FCA 140, at para. 4 (citing Apotex Inc. v.

Her Majesty the Queen et al.,2003 FCT 414, at para. 10), that ​both parties must ​put their best foot forward​ to enable the motions judge to decide whether or not thereis a genuine issue for trial, and the judge is required to take ​a hard look​ at the merits and, if possible, make findings of fact and law if thematerials allow this​. The applicants also refer to the following paragraph of Suntec: [19] The scope of the

summary judgment rules was recently reviewed by this Court in MacNeil Estate v. Canada (Indian and NorthernAffairs Department) (MacNeil), 2004 FCA 50. Sexton J.A. reviewed the ambiguity at the heart of subsections 216(2) and 216(3). On theone hand, a judge who finds a genuine issue for trial is to send the matter on for trial in the ordinary course. On the other hand, evenwhere there is a genuine issue, the motions judge can decide the matter if he or she is able to find the facts necessary to decide thequestions of fact and law. This ambiguity gives rise to the risk of motions for

summary judgment becoming

summary trials on affidavitevidence. While both are useful measures in the struggle to contain the length and cost of litigation, one ought not to be confused for theother. It is important to note that Suntec reiterated that the case law is clear that issues of credibility must be left to the trial judge. [18] It is with all these principles clearly in mind that I analyze the facts and the law in this matter. [19] As regards, first, the respondents​ arguments that provincial law applies in this case, specifically

section 10 of the ConsumersProtection Act, R.S.Q., c. P-40.1, prohibiting ​any stipulation whereby a merchant is liberated from the consequences of his own act orthe act of his representative​ and the Civil Code of Québec, they seem to me to be without merit, since we are clearly dealing here with anissue that must be determined through the application of Canadian maritime law (see

section 22 of the Federal Courts Act and ITO ​International Terminal Operators v. Miida Electronics, (SCC), [1986] 1 S.C.R. 752). [20] Furthermore, the applicants raise an important issue of credibility related to the ability of the respondent, who claims to beilliterate, to fully understand the whole meaning and effect of the contract that he signed on May 19, 2008.

[ 21 ] In fact, upon examination on June 11, 2010, the respondent stated as follows: [TRANSLATION] - See, it​s because I don​t have my glasses and I quit school in seventh grade. I don​t read fast and I have trouble reading and writing. . . . - And anyway, I quit school in seventh grade. I have trouble reading and writing. It takes me a month to read a page. [ 22 ] Moreover, the respondent noted his lack of understanding of the scope of the contract in question and his illiteracy in his affidavit filed in support of his challenge of this

summary judgment, particularly the following paragraphs: [TRANSLATION] 14. I did not think that I would ever have to sue my own association for errors made in performing their duties as merchants; 16. It was never a question between the Association and me to exclude AXA Assurance Inc. of its obligations as an insurer to the members of the Association; 21. The Association (A.C.P.G.) and AXA Assurances Inc. have been trying to take advantage of me, a Quebec citizen without education who has managed to make an honest living with his boat, ever since I have owned a boat; 23.

The Association (A.C.P.G.) and AXA Assurances Inc., by their abusive conduct toward an illiterate like me, are putting my future and my career as a fisherman at risk, which penalizes me in terms of the requirements of the programs of Fisheries and Oceans Canada; [ 23 ] It therefore appears from the respondent​s affidavit that he was not well educated, he had difficulty reading, he had believed that as a shareholder of A.C.P.G., he was registered under the AXA insurance policy, he believed he was in a position of trust with A.C.P.G. and would never have thought that this association would try to place an exclusion on him as the one placed by the applicants, given his difficulty with reading and his minimal education. [ 24 ] In my view, the respondent​s allegations raise an important issue related to his credibility, in determining the value of his consent as to the meaning and effect of the exclusion clause alleged by the respondents.

The applicants submitted some evidence, such as similar previous contracts signed by the respondent, in an attempt to minimize the significance of his illiteracy with respect to his understanding of the exclusion clause in question. However, since everything is linked to the assessment of the applicant​s credibility, this important issue must be left to the trial judge​s assessment, as Justice Denis Pelletier pointed out on behalf of the Federal Court of Appeal, in Suntec , supra , at paragraph 20: . . . The jurisprudence is clear that issues of credibility ought not to be decided on

summary judgment applications (see MacNeil , supra , at para. 32). . . . [ 25 ] For these reasons, the application for

summary judgment is dismissed, costs to follow.

ORDER The applicants​ motion for

summary judgment is dismissed. Costs in the cause. ​Yvon Pinard​ Judge Certified true translation Catherine Jones, Translator FEDERAL COURT SOLICITORS OF RECORD DOCKET : T-1444-09 STYLE OF CAUSE : CAPITAINES PROPRIÉTAIRES DE LA GASPÉSIE (A.C.P.G.) INC. and PAULIN COTTON and AXA ASSURANCES, INC. v. PÊCHERIES GUY LAFLAMME INC. and GUY LAFLAMME PLACE OF HEARING : Montréal, Quebec DATE OF HEARING : December 14, 2010 REASONS FOR ORDER AND ORDER : Mr. Justice Pinard DATED : January 5, 2011 APPEARANCES : Jean-François Bilodeau FOR THE APPLICANTS

Guylaine Gauthier FOR THE RESPONDENTS SOLICITORS OF RECORD : Robinson Sheppard Shapiro, LLP FOR THE APPLICANTS Montréal, Quebec Guylaine Gauthier FOR THE RESPONDENTS Québec, Quebec