Federal Court of Canada maintains jurisdiction over maritime disputes, even where provincial law applies

In the recent case of Fraser Point Holdings Ltd. v Vision Marine Technologies Inc., 2023 FC 738, affirming Fraser Point Holdings Ltd. v Vision Marine Technologies Inc., 2022 CanLII 134244 (FC), the Federal Court found it maintained jurisdiction over maritime disputes even when a provincial law or statute applies. In Fraser Point, the court denied an appeal challenging its jurisdiction to hear a maritime dispute relating to the sale of a pleasure craft, where the contract at issue did not contain a governing law, jurisdiction or forum selection clause and where the Civil Code of Quebec applied. Justice Rochester’s decision dismissing the appeal affirmed and clarified the Federal Court’s jurisdiction over all maritime disputes, regardless of whether federal or provincial law applies.

In her reasons, Justice Rochester considered and addressed an important question pertaining to the Federal Courts’ jurisdiction over maritime matters following the Supreme Court of Canada’s decision in Desgagnés Transport Inc. v Wärtsilä Canada Inc. 

In Wärtsilä, the Supreme Court of Canada held where there is no statutory federal maritime law of application, statutory provincial law, including the Civil Code of Quebec, will prevail over any otherwise applicable maritime common law. Significantly, in Wärtsilä the application of the Civil Code of Quebec to the contract for the sale of marine engine parts meant that a $50,000 limitation of liability clause was unenforceable, and Wärtsilä was obligated to pay damages in excess of $5 million to the plaintiff in that case.

In Fraser Point, the court was faced with the argument that in cases where the Civil Code of Quebec or another provincial statute takes precedence over non-statutory Canadian maritime law, the Federal Court entirely lacks jurisdiction to hear the dispute. In response to this argument, Justice Rochester was clear that once a court finds that Canadian maritime law can validly regulate a dispute the modern conception of federalism, as expressed in Wärtsilä, means the Federal Court maintains jurisdiction to hear claims that are integrally connected to maritime matters.¹  

Justice Rochester further observed that, 

[49] […] Had the Supreme Court in Wärtsilä intended to deprive the Federal Courts of jurisdiction in admiralty and maritime matters, then clear and express language would have been required. I find no such language in the majority’s reasons.² 

Recognizing the confusion and rather candid commentary from some corners of the legal community following the Supreme Court of Canada’s Wärtsilä decision, and observing the need for clarity required by the legal community advising their clients on such issues, Justice Rochester further stated, 

[53] To the extent that I may provide such clarity, where there is a double aspect scenario and provided that Canadian maritime law is one of the applicable bodies of law, then the Federal Court retains jurisdiction to hear the matter. This remains the case even where provincial legislation ultimately prevails over non-statutory Canadian maritime law. The fact that the Plaintiff may now be entitled to avail itself of certain provisions of the Civil Code along with Canadian maritime law in order to seek recovery from the Defendant, does not curtail or lessen this Court’s “unlimited jurisdiction in relation to maritime and admiralty matters” [citations omitted] [emphasis added].³  

At the outset and again at the conclusion of her reasons, Justice Rochester highlighted the significant decision of the parties not to include a choice-of-law clause.⁴ Since Wärtsilä, it has become essential for the parties to maritime and maritime adjacent agreements to carefully consider if they wish to include a choice-of-law clause that expressly states Canadian maritime law will apply and prevail over any applicable provincial law. 

As Justice Rochester observed, the Federal Court and the Federal Court of Appeal are well equipped to apply both Canadian maritime law and the provisions of the Civil Code of Quebec and other applicable provincial laws to maritime and admiralty matters.  

We look forward to more decisions from the Federal Court that not only demonstrate its deep maritime expertise, but that seek to provide needed clarity and guidance to the legal community advising their clients on important legal issues.

The authors wish to thank Garry Benedict-Balaganthan, articling student, for his help in preparing this legal update.