Date: 19971203
Docket: T-1514-97
BETWEEN:
Timothy Maxwell-Humm, on his own behalf and on behalf of the
members of Lloyd's Syndicates Nos. 625, 990, 1036, 329, 488, 483,
741, 500, 535, 123, 28 and 114 subscribing to policy of insurance
No. 94YP4016 for the policy year March 4, 1994 to March 3, 1995,
Commercial Union Assurance Company PLC
The Tokio Marine & Fire Insurance Company (UK) Ltd.
The Threadneedle Insurance Co. Ltd.
Aegon Insurance Company (UK) Limited
Ocean Marine Insurance Co. Ltd.
Indemnity Marine Assurance Co. Ltd.
Gan Minster Assurance Co. Ltd.
Compagnie d'Assurances Maritimes Ariennes et Terrestres Assurances
Generales de France I.A.R.T.
The Yorkshire Insurance Co. Ltd.
Northern Assurance Company Ltd.
The Scottish Lion Insurance Co. Ltd.
Terra Nova Insurance Company Ltd.
Wurttembergische Versicherung AG
Plaintiffs
- and -
Sloan D'Orsay Mauran
Sloan Financial Corporation
The Vessel "Beaugeste"
Defendants.
REASONS FOR ORDER
WETSTON J.
[1] The defendants, Sloan D'Orsay Mauran ("Mauran"), Sloan Financial Corporation (the "corporate defendant"), and the Vessel "Beaugeste", have brought this motion for a stay of proceedings under s. 50(1) of the Federal Court Act, R.S.C. 1985, C. F-7.
[2] In their action before this Court, the plaintiffs have claimed damages from the defendants for repayment of certain insurance proceeds paid by the insurers of the vessel, Beaugeste. The claim relates to the adjustment of a loss involving the Beaugeste while it was sailing in the Mediterranean Sea on September 14, 1994. The repairs to the vessel that are the subject of this action were done in Mallorca, Spain.
[3] One month after the action was brought in this Court, Mauran and the corporate defendant commenced their own action in the Circuit Court for the Seventeenth Judicial Circuit in and for Broward County at Fort Lauderdale, Florida, claiming entitlement to a further payment under the policy.
[4] The vessel Beaugeste is registered in Canada and sails under the Canadian flag. Mauran, the registered owner of the vessel, is a Canadian citizen who lives and works in Toronto. The corporate defendant is a Liberian corporation that carries on business from the Bahamas. The corporate defendant is the loss payee named under the insurance policy in question, while Mauran is the assured.
[5] The plaintiffs are English underwriters and Lloyd's Syndicates. The insurance policy was placed in the London market by brokers Bowring Marsh & McLennan Ltd. and the certificates of insurance were issued out of the Bowring office in Southampton, England. The request for the policy to be placed was initiated by the sole director of the corporate defendant, Richard C.W. Mauran, through an insurance broker in Florida. The Florida broker is not a party to either action, and there is no question concerning whether the policy was properly in place.
[6] Section 50(1) of the Act provides:
| The Court may, in its discretion, stay proceedings in any cause or matter, |
| (a) on the ground that the claim is being proceeded with in another court or jurisdiction; or |
| (b) where for any other reason it is in the interest of justice that the proceedings be stayed. |
[7] At issue in this motion is whether:
| (a) the "service of suit clause" contained within the policy provides the Florida Court with exclusive jurisdiction over the matter; or |
| (b) the proceedings should be stayed on the ground that the Florida Court is the more appropriate forum for adjudication of the dispute. |
[8] The defendants argue that the service of suit clause contained within the subject insurance policy clearly mandates that the courts of the United States have exclusive jurisdiction to resolve all matters involving a dispute over amounts claimed to be due under the policy. I cannot accept this interpretation.
[9] It is clear that the service of suit clause provides an assured with the right to serve the underwriters of a policy with process in a United States court of the assured's choice. It does not restrict the assured from bringing an action in the United States and it does not restrict the insurer from bringing an action outside the United States: Excess Insurance Co. v. Allendale Mutual Insurance Co., [1995] NLOR No. 2416 (Eng. C.A.) (Q.L.). In fact, where an action is initiated by an insurer, rather than the assured it would appear that under U.S. Law, the service of suit clause has no application: International Insurance Co. v. McDermott Inc., 956 F.2d 93 (5th Cir.), cert. den'd 113 S.Ct. 82 (1992); International Surplus Lines Ins. Co. v. University of Wyoming Research Corp., 850 F. Supp. 1509 (D. Wyo. 1994).
[10] The choice of the most appropriate forum, in the application of the forum non conveniens doctrine, "is to be made on the basis of factors designed to ensure, if possible, that the action is tried in the jurisdiction that has the closest connection with the action and the parties and not to secure a juridical advantage to one of the litigants at the expense of others in a jurisdiction that is otherwise inappropriate": Achem Products Inc. et al. v. Workers" Compensation Board et al. (1993), 102 D.L.R. (4th) 96 at 104 (S.C.C.).
[11] To displace the forum selected by the plaintiff, the defendant must clearly establish the existence of a more appropriate forum. It must do so by showing that there is a jurisdiction with a more real and substantial connection to the dispute, and to the parties. In making its determination, the Court is to weigh the convenience, expense and availability of juridical advantages in each forum: Achem, supra.
[12] The defendants argue that the action should proceed in Florida because the "beneficial owner" of the vessel maintains a residence there, and because the vessel sails in the general vicinity on an annual basis. They argue that the insurance contract was made in Florida, and that the premiums were paid in Florida. The defendants further submit that the material witnesses are or may more conveniently be in Florida, and that the plaintiffs carry on a business in Florida.
[13] The defendants also argue that the plaintiffs have sought the juridical advantage of this jurisdiction, which does not have jury trials, through launching the action in this Court " a less appropriate forum. It is further submitted that Mauran would not be inconvenienced by a change of venue, and that the plaintiffs would never be able to execute an in rem right on the vessel in Canada.
[14] The plaintiffs argue that the defendants have failed to prove that proceedings in the Florida Court would be less expensive, and argue that it would be more efficient for them to proceed in this jurisdiction, and to enforce judgement against the defendants, if successful. They argue that the relevant witnesses for this dispute will be those who repaired the vessel and adjusted the claim. These individuals are located in Spain, not Florida.
[15] The plaintiffs also argue that the vessel is registered in Canada; and that the defendant Mauran is a citizen of Canada, who lives and works in Toronto. None of the parties are based in the United States.
[16] In my opinion, the defendants have failed to clearly demonstrate that the Florida Court is the more appropriate venue for this dispute. The Florida Court does not have a more real and substantial connection to the parties. Two of the defendants, Mauran and the vessel, Beaugeste, have a clear connection to Canada. None of the parties to this dispute are based in Florida.
[17] Further, it has not been clearly demonstrated that the Florida Court has a more real and substantial connection to the dispute, i.e., the quantum of the repairs made to the vessel in Spain. The key witnesses, i.e., those who did the repairs and appraised the cost of the repairs, have no connection to Florida whatsoever. Moreover, the insurance policies were concluded in England, not Florida.
[18] The motion shall be dismissed with costs in the cause.
(Sgd.) "Howard I. Wetston"
Judge
Vancouver, B.C.
December 3, 1997
FEDERAL COURT TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
HEARING DATED: October 6, 1997
COURT NO.: T-1514-97
STYLE OF CAUSE: TIMOTHY MAXWELL-HUMM et al.
v.
SLOAN D'ORSAY MAURAN et al.
PLACE OF HEARING: Toronto, ON
REASONS FOR ORDER OF WETSTON, J.
dated December 3, 1997
APPEARANCES:
Mr. Paul Richardson for Plaintiffs
Mr. Nigel Frawley for Defendants
SOLICITORS OF RECORD:
Strathy & Richardson
Toronto, ON for Plaintiffs
Meighen, Demers
Toronto, ON for Defendants