The Wartsila case was argued on January 24 in the Supreme Court of Canada.  Judgment was reserved, as is usually the case, and will issue on a date to be announced (probably in the order of 3-4 months or so from now).

This is an important case dealing with the scope of Canadian maritime law.  In short, the case concerns the sale of a marine engine later found to have a defective component.  The trial court held that as a straight sale of goods matter, it was subject not to Canadian maritime law (essentially a body of federal law informed by statute law and common law), but rather to the sale of goods provisions of the Province of Quebec’s Civil Code.  The Quebec Court of Appeal disagreed last year, and held that the case was subject to Canadian maritime law, which excluded the application of Quebec law.  There was a material difference in the outcome depending on what law applied.  Per Quebec law, the claimant shipowner would recover all of its damages because Quebec law would prohibit certain contractual limitations from operating; if it was Canadian maritime law which applied, the contractual limitations would operate and reduce the shipowner’s recovery to a fraction of its claim.

While the Court could choose to confine its reasoning to the immediate sale of goods context, it may choose to speak to the broader context: the overall definition and circumscription of what Canadian maritime law is.

For a good 40 years now, there has been generally a gradual and expansive judicial notion of what Canadian maritime law is, and save for the inevitable but relatively few “new” situations in which the Courts have had to delve into the issue, for at least 20 years -plus, this has developed into a fairly clear and consistent definition of Canadian maritime law, as well as of the legal analysis which determines whether or not a given case falls within Canadian maritime law.

This case potentially puts all of that into play, as relatively recent concepts such as interjurisdictional immunity and cooperative federalism in other areas, which might or might not be applied in the case, have taken a larger role in Supreme Court reasoning and a relatively more open door for the application of provincial law .

In last week’s argument, there was naturally no inkling as to how the Court might be leaning in deciding the case.  The Court probed both sides with questions, which is only normal in the Supreme Court, and the Justices did so from the perspectives of both sides of the case.

Some of the questions discussed were:

  • Is a watertight view (that Canadian maritime law is federal to the absolute exclusion of provincial law) outdated? Could it encompass both federal and provincial law?
  • What is the relevance of the Federal Courts Act’s definition of Canadian maritime law and its maritime jurisdiction provisions?
  • Is the Wartsila case a plain case of quintessential navigation and shipping (aka maritime) subject-matter (a federal power)?
  • What is the possibility for co-existence of federal maritime law and provincial law?
  • Is it determinative if the goods in question go to the very seaworthiness of the ship?  How far would that extend; would the purchase of an oar at a store be subject to Canadian maritime law?

We will be monitoring for the judgment and report it here.

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