Jan 5, 2016

Action Against Insurance Broker - Applicability of Canadian Maritime Law - Jurisdiction of Federal Court

Coastal Float Camps Ltd. v. Jardine Lloyd Thompson Canada Inc., 2014 FC 906 (CanLII)

Facts: The plaintiff’s vessel capsized and sank on 5 November 2009. The plaintiff’s insurer denied coverage on the grounds of material non-disclosure and misrepresentation. The plaintiff commenced this action against the insurer for a declaration that the loss was covered. The plaintiff later amended the statement of claim to include a claim against its marine broker for negligence and breach of contract. The broker then brought this application to strike the allegations against it on the grounds that the Federal Court had no jurisdiction in respect of those claims.

Decision: Application dismissed.

Held: The applicable test on a motion to strike is whether it is plain and obvious the claim discloses no reasonable cause of action. The fact that a claim is novel or difficult is not sufficient. “The burden on the defendant is very high and the Court should exercise its discretion to strike only in the clearest of cases.” The broker relies upon the decision in Intermunicipal Realty & Development Corp v Gore Mutual Insurance Co, [1978] 2 FC 691 where it was held the Federal Court did not have jurisdiction over a marine insurance broker in agency and misrepresentation. However, the plaintiff cites a number of authorities that show the law concerning the jurisdiction of the Federal Court has evolved considerably since Intermunicipal Realty was decided and that it may no longer be good law. In the circumstances, it is not plain and obvious the plaintiff’s claim cannot succeed.