Date: 19980427
Docket: T-2057-85
MONTRÉAL, QUEBEC, THIS 27th DAY OF APRIL 1998
PRESENT: RICHARD MORNEAU, PROTHONOTARY
Between:
PORTO SEGURO COMPANHIA DE SEGUROS GERAIS,
Plaintiff,
AND
BELCAN S.A.
and
FEDNAV LIMITED
and
UBEM S.A.
and
THE OWNERS AND ALL OTHERS INTERESTED
IN THE VESSEL "FEDERAL DANUBE"
and
THE VESSEL "FEDERAL DANUBE",
Defendants.
ORDER
The plaintiff's motion and the main remedy sought by the defendants in their motion are dismissed. The alternative remedy sought by the defendants is granted, and accordingly it is ordered that the sum of $101,731.62 be retained in the record of the Court as security for the costs of the defendants and assessors.
Costs in the cause.
Richard Morneau
Prothonotary
Certified true translation
C. Delon, LL.L.
Date: 19980427
Docket: T-2057-85
Between:
PORTO SEGURO COMPANHIA DE SEGUROS GERAIS,
Plaintiff,
AND
BELCAN S.A.
and
FEDNAV LIMITED
and
UBEM S.A.
and
THE OWNERS AND ALL OTHERS INTERESTED
IN THE VESSEL "FEDERAL DANUBE"
and
THE VESSEL "FEDERAL DANUBE",
Defendants.
REASONS FOR ORDER
RICHARD MORNEAU, PROTHONOTARY
Introduction
[1] The Supreme Court ordered that a new trial be held in this case, but did not award costs to either of the two parties at trial.
[2] There are now motions before the Court under rule 315, inter alia, of the Federal Court Rules, by each of the parties to the case seeking to be paid the full amount that was paid in by the plaintiff at trial as security for the defendants' costs. The total amount is $101,731.62, not counting the interest that has since accumulated on that amount.
[3] In the alternative, the defendants are seeking to have this money remain in the record of the Court as security for their costs, until the new trial that is to be held has taken place. Both parties are also seeking to have part of that money, at least, paid out to them.
Background
[4] What we know is that as a result of a collision between two ships the plaintiff commenced a liability action in this Court against the defendants. At trial, the plaintiff's action was dismissed with costs. The plaintiff then appealed to the Federal Court of Appeal, and then, having also lost at that level, it applied to the Supreme Court.
[5] The reason that the Supreme Court ordered a new trial was that it was of the opinion, contrary to the idea that the Federal Court of Appeal had accepted, that the Federal Court Trial Division had held a trial that violated the rules of natural justice. The violation resulted from the fact that at trial the Court had applied a common law rule that prohibits the Court from hearing expert witnesses on matters relating to navigation when it is assisted by assessors.
[6] In its judgment, the Supreme Court stated:
| The appeal is allowed and a new trial ordered. The appellant is entitled to costs of the appeal in this Court and in the Federal Court of Appeal. |
[7] However, the appellant, the plaintiff herein, had asked in its factum that its appeal be allowed with costs at all levels ("the whole with costs to the appellant throughout").
Analysis
[8] According to the position argued by counsel for the plaintiff, the fact that the Supreme Court ordered that a new trial be held without reaching any conclusion as to awarding costs at the first trial means that the Court sent the parties back to the starting line at trial and felt that there should be no entitlement to costs for that trial.
[9] Accordingly, the plaintiff feels that it is entitled to claim that the money it paid in to the registry of this Court as security for the defendants' costs be returned to it. According to counsel for the plaintiff, the defendants have only one right in respect of the trial to be held, and that is the right to make a motion in proper form under rule 446 for security for their costs.
[10] According to counsel for the defendants, the fact that the Supreme Court was silent as to costs at trial means that the Court intended that the rule that when a second trial is ordered to be held, the costs of the first trial are in the cause at the second trial should be followed. On this point, the Court was referred to various decisions cited by Mark M. Orkin at paragraph 226 of his book The Law of Costs, 2nd edition, 1997, Canada Law Book Inc.
[11] However, it seems to me that in those decisions the courts expressly ordered that this rule should apply. Here, as pointed out by counsel for the plaintiff, the Supreme Court did not order that this rule be followed, although it could very well have done so.
[12] What must be understood is that the Court did not award costs for the first trial. There can therefore be no question of paying the defendants the money paid in by the plaintiff. With respect to the $20,000 paid in by the plaintiff pursuant to an order of the Court to that effect dated February 6, 1995, I do not believe that the text of the reasons attached to that order establish with any certainty that the money was to be paid to the defendants regardless of the issue of the case. This money should therefore not be paid to the defendants.
[13] But does this mean that the money paid in by the plaintiff must necessarily be returned to it? I do not believe so.
[14] The Supreme Court ordered that a new trial be held, and not that the parties be returned to the positions they were in on the date the statement of claim was filed. There is nothing to suggest to me that all of the proceedings and steps taken by the parties, up to the day before the first trial, will have to be repeated for the purpose of the second trial. What must be realized is that the justification for a second trial has nothing to do with these pre-trial steps. As noted earlier, a new trial has been ordered because the plaintiff was unable to call its witnesses, and not because of what may have taken place between commencement of the action and commencement of the trial. It does not seem to me to be impossible to think that in the event that the plaintiff is successful at the second trial, the Court could award it the costs of the second trial and make a different ruling with respect to the phase that preceded the first trial.
[15] With respect to this stage, the Court has made a number of orders concerning the plaintiff, a foreign corporation, under rule 446. I believe that this part of the case must not be altered, since in my view no future order for security for the defendants' costs could have retroactive effect to cover the costs already incurred by the defendants. Such an order could cover only future costs. We should therefore consider that the $75,500 must remain in the record of the Court as security for the defendants' costs.
[16] With respect to the money paid by the plaintiff in respect of the assessors, we should consider that the assessors will have to be paid some day whether or not they are involved again in the new trial. It therefore appears preferable to me to keep that money in the record of the Court as well.
[17] Accordingly, the plaintiff's motion and the main remedy sought by the defendants will be dismissed. The alternative remedy sought by the defendants will be allowed, and accordingly it will be ordered that the $101,731.62 be retained in the record of the Court as security for the costs of the defendants and assessors.
[18] Costs in the cause.
Richard Morneau
Prothonotary
MONTRÉAL, QUEBEC
April 27, 1998
Certified true translation
C. Delon, LL.L.
FEDERAL COURT OF CANADA
Court File No. T-2057-85
between
| PORTO SEGURO COMPANHIA DE SEGUROS GERAIS, |
Plaintiff,
" and "
| BELCAN S.A. and |
| FEDNAV LIMITED and |
| UBEM S.A. and |
| THE OWNERS AND ALL OTHERS INTERESTED IN THE VESSEL "FEDERAL DANUBE" and |
| THE VESSEL "FEDERAL DANUBE", |
Defendants.
REASONS FOR ORDER
FEDERAL COURT OF CANADA
NAMES OF COUNSEL AND SOLICITORS OF RECORD
COURT FILE NO: T-2057-85
| STYLE OF CAUSE: PORTO SEGURO COMPANHIA DE SEGUROS GERAIS, |
Plaintiff,
AND
| BELCAN S.A. and FEDNAV LIMITED and UBEM S.A. and THE OWNERS AND ALL OTHERS INTERESTED IN THE VESSEL "FEDERAL DANUBE" and THE VESSEL "FEDERAL DANUBE", |
Defendants.
PLACE OF HEARING: Montréal, Quebec
DATE OF HEARING: April 20, 1998
REASONS FOR ORDER OF RICHARD MORNEAU, PROTHONOTARY
DATE OF REASONS FOR ORDER: April 27, 1998
APPEARANCES:
George Pollack for the plaintiff
Richard Gaudreau for the defendants
SOLICITORS OF RECORD:
Sproule, Castonguay, Pollack for the plaintiff
George Pollack
Montréal, Quebec
Langlois, Robert, Gaudreau for the defendants
Richard Gaudreau
Québec, Quebec