| Date:19990107 |
Docket: T-2015-89
BETWEEN:
MURRAY MACKAY
Plaintiff
AND
SCOTT PACKING AND
WAREHOUSING CO. (CANADA) LTD.,
Defendant
REASONS FOR SUPPLEMENTARY JUDGMENT
GIBSON J.:
BACKGROUND
[1] These reasons arise out of a hearing to determine damages and to dispose of the issue of costs in this action. The hearing was essentially in the nature of a hearing on a reference under Rules 500 to 507 of the Federal Court Rules1. The background to the reference hearing is long and somewhat complex. What follows is a brief summary of that background.
[2] On or about the 24th of November, 1987, the plaintiff entered into a contract with the defendant for the packing and removal of the contents of his apartment in Toronto and some other articles to his new residence in London, England. The belongings to be moved included valuable antiques and works of art.
[3] The move of the plaintiff"s belongings did not go well. Some of the belongings were never delivered. Other were delivered in damaged condition.
[4] The plaintiff commenced this action for damages by reason of the loss and damage that he suffered. The Statement of Claim was issued the 27th of September, 1989.
[5] I granted judgment in favour of the plaintiff on the 31st of March, 1994, in the following terms:2
This Court orders and adjudges that the Plaintiff recover from the Defendant damages calculated in accordance with the limitation of liability clause found, in accordance with reasons for this judgment, to form part of the contract between the parties for removal of the Plaintiff"s belongings by the Defendant from Toronto, Ontario to London, England, which contract was entered into on or about the 24th day of November, 1987.
[6] Thus, although the plaintiff was successful in his action against the defendant, the limitation of his damages to an amount calculated in accordance with the contractual limitation of liability clause had the effect, potentially at least, of substantially limiting his recovery when compared with the damages claimed.
[7] I concluded my reasons in support of my judgment in the following terms:3
| The defendant failed to fulfill its obligations to the plaintiff in its packing, inventorying, tagging and moving of the plaintiff"s belongings which resulted in the loss or damage of many of those belongings. However, the defendant is able to rely upon the limitation of liability clause that was part of the contract between the plaintiff and the defendant Scotpac. Damages are payable by the defendant to the plaintiff calculated in accordance with the limitation of liability clause in the contract. If the parties are unable to agree on the quantum of damages so calculated, either party may apply to the court for guidance after first having given notice to the other party of the intention to do so. |
| The plaintiff is entitled to pre and post judgment interest at a rate and calculated in a manner agreed to between the parties. In the event of failure of agreement, either party, on notice to the other party, may make written representations to the Court and directions will be provided. |
On the issue of costs, given the result, I am of the view that each party should be responsible for his or its own. However, if either party wishes to make written representations in this regard, counsel should so advise the Court on notice to the other party and directions will be provided.
[8] The plaintiff appealed the judgment. The appeal was dismissed with costs. However, the judgment in the Court of Appeal included the following paragraph:
The matter is, however, returned to the trial judge for a resolution of the issues that remain to be considered to determine the amount to which the respondent is entitled to recover from the applicant and for final judgment.
[9] The parties were unable to settle the determination regarding damages and interest and the issue of costs.
[10] The plaintiff applied to the Court for directions, supported by a draft Order proposing that a hearing take place at which counsel would argue in law, upon the evidence already in the record at the close of the trial, the issue of whether or not the loss found to have been sustained by the plaintiff and for which the defendant had been found liable should be recovered in full by the plaintiff against the defendant or whether the defendant"s liability could be limited by application of a contractual or legal limitation, and if so, the amount of the defendant"s limited liability. Following a hearing, I ordered, pursuant to Rule 500 of the Federal Court Rules , a reference to myself for determination of the following question of fact:
the quantum of damages payable by the Defendant to the Plaintiff calculated in accordance with the limitation of liability clause in the contract between the Plaintiff and the Defendant for removal of the Plaintiff"s belongings by the Defendant from Toronto, Ontario to London, England, which contract was entered into on or about the 24th day of November, 1987.
My order further provided for a series of procedural steps leading up to the reference hearing. Those steps were ordered to be:
...[f]or the purposes of insuring that all outstanding matters in connection with the trial and judgment in this matter are finally disposed of as expeditiously as considerations of fairness and justice allow... .
[11] The plaintiff appealed this Order. The appeal was dismissed with costs. Thus, finally, on the 30th of October, 1998, the hearing in the nature of a reference took place before me.
THE CONTRACTUAL LIMITATION
[12] The preamble to the conditions of the contract and condition 7 (the "limitation clause") read in part as follows:
CONDITIONS UPON WHICH ALONE WORK IS DONE, PROPERTY IS REMOVED AND/OR PACKED AND/OR WAREHOUSED AND/OR SHIPPED BY SCOTT PACKING & WAREHOUSING COMPANY LIMITED. Having their principal place of business at Kilsyth Road, Kirkintilloch (hereinafter called "the Company"). The persons with whom the Company does business under these Conditions being hereinafter referred to as "the Customer".
...
| 7. LIABILITY OF THE COMPANY |
| LOSS OF OR DAMAGE TO GOODS. The customer bears all the risks of loss or damage both during transit and whilst goods are in store and the Company shall not be liable for any loss or failure to produce or damage (howsoever caused) to the goods and accordingly no claim shall be made upon the Company in respect of any loss, failure to produce or damage to any article or articles howsoever caused. In particular, but without prejudice to the foregoing generality, the Company shall not be liable for any loss, failure to produce or damage howsoever caused - |
| (i) By fire |
| (ii) By war, invasion, acts of foreign enemies, hostilities (whether war be declared or not), civil war, rebellion, insurrection or militarily usurped power, wear and tear or gradual deterioration, leakage or deficiency or articles of a perishable or a leaky nature or acts of God or due to causes beyond the Company"s immediate control or due to the acts of third parties whether criminal or otherwise. |
| (iii) By moths or insects of any kind or vermin or other pests. |
| (iv) Arising from any process of cleaning, repairing or restoring unless such cleaning, repairing or restoring of the goods was carried out by the Company themselves, and at the request (in writing) of the customer. |
| (v) To any articles in wardrobes or drawers or in any package, bundle, case or other container not both packed and unpacked by the Company"s employees. |
| (vi) To jewellery, watches, trinkets, precious stones etc., money, deeds, securities, stamps, coins or collections of all kinds nor livestock. |
| (vii) Where goods are removed from or delivered to unattended premises or where third parties are present. |
| (viii) Where the loss or damage is proved to have been due to any inherent defect in the goods. |
| (ix) Where the customer has failed to advise the Company prior to the commencement of the Contract the value of any article which is in excess of "1000. |
| Without prejudice to the foregoing, the Company"s liability, if any, for loss, damage and/or failure to produce howsoever caused, in respect of all goods entrusted to the Company by the customer, whether in the Company"s possession in respect of the Contract or otherwise shall be subject to the following limitation - |
| (a) A sum calculated at the rate of "10 Sterling per cubic foot of the cubic capacity of the item lost or damaged or at the Company"s sole option the cost of repairing or replacing the damaged or missing article. |
| (b) In respect of articles being part of a pair or set the Company"s liability shall be calculated by reference to the cubic capacity of the particular part or parts so lost or damaged irrespective of any special value which such article or articles may have as a part of such pair or set. |
Declaring, however, that the Company shall, so far as they are able to do, transfer to the customer the benefit of any right they may have against any railway, steamship, dock or transport company or authority or other Company in respect of the goods but the Company does not undertake that any such right will exist.
...
The limitation of liability set out in this clause shall be adjusted upon 1st January of each year by such percentage as shall be represented by the annual percentage increase in the Retail Price Index published by H.M. Stationery Office or any other official publication substituted therefore. Such percentage increase shall be calculated by reference to the Retail Price Index upon 1st January 1980.
[13] Neither party argued that any of the absolute limitations in the opening words of paragraph 7 and in sub-paragraphs 7(i) to (ix) apply. Rather, there was at least tacit agreement that the words following sub-paragraph (ix) govern. Thus, the limitation is at the rate of "10 per cubic foot of the cubic capacity of the items lost or damaged or, at the defendant"s sole option, the cost of repairing or replacing any of the lost or damaged articles. It was not in dispute before me that the adjustment in the "10 per cubic foot limitation provided in the last quoted paragraph of the limitation clause is applicable.
THE ISSUES
[14] Subject to a preliminary issue to which I will shortly refer, the issues before me were the following:
| (1) Lost or damaged articles in respect of which the defendant had effectively chosen the cost of repair or replacement option and the resulting quantum; |
| (2) The adjusted limitation of liability; |
| (3) The cubic capacity of the items lost or damaged in respect of which the cost of repair or replacement option was not chosen; |
| (4) The resultant quantum of liability; |
| (5) The calculation of pre and post judgment interest; |
| (6) The conversion to Canadian funds; and |
| (7) Costs. |
POSITIONS OF THE PARTIES AND ANALYSIS
| (a) Preliminary issue |
[15] In reasons for judgment4 arising out of the second appeal in this matter referred to earlier, Mr. Justice Létourneau wrote:
This whole saga which started in 1989 has lasted long enough. Ideally, the issue of damages should have been dealt with at the same time as the issue of liability by the Trial judge as this Court said in its previous decision of December 1995, but it was not and we now have to make the best out of the situation. The limitation [of] liability clause is linked to the cubic foot [sic] of the cubic capacity of the items lost or damaged. Although such items appear to have been identified, there is on the record no evidence in relation to each one of them as to their specific cubic size.
On the other hand, the evidence reveals that the appellant"s goods were put in a twenty-foot container and that there were some left-overs which were later loaded in another container with the items of nine other individuals. The cubic capacity of these containers, bearing in mind that in the case of the second container the Trial judge would have to assess the extent of the space occupied by the appellant, would certainly set the outer limit of the respondent"s liability under the clause. The record also reveals that not all the items, however, were lost or damaged. The Trial judge would than have to somewhat arbitrarily determine the size of each item to establish the overall cubic capacity in litigation under the limitation [of] liability clause and we can expect almost for sure a third appeal, this time on the quantum of damages.
We do not think that, in the peculiar circumstances of this case, it is in the interest of justice to leave the Trial judge to struggle with the existing record, especially as he had left the matter open for further guidance should the parties be unable to agree on the quantum of damages. We believe that he is entitled to take the steps that are necessary to factually and satisfactorily determine the quantum of the damages under the limitation [of] liability clause. [emphasis added]
[16] Consistent with the foregoing, and consistent with the directions that I gave concerning the reference, both the plaintiff and the defendant filed affidavit evidence speaking to the cubic capacity of the belongings that were lost or damaged and those affidavits were before me on the reference, together with transcripts of cross-examinations on the affidavits. More will be said about the affidavit evidence later in these reasons.
[17] Counsel for the plaintiff urged that the defendant had introduced no factual evidence, but rather only opinion evidence, on the cubic capacity of the lost and damaged belongings. This allegation is not in dispute.
[18] An estimate of the cubic volume of all of the plaintiff"s belongings to be shipped, including the lost and damaged belongings, was prepared during the course of the discussions leading up to the contract. This estimate was reflected in an inventory list prepared by the defendant that, in my original reasons in this matter, I described as "totally inadequate".
[19] The affidavit evidence before me on behalf of the defendant as to estimated cubic volume of the lost or damaged belongings was also, it was urged on behalf of the plaintiff, totally inadequate.
[20] Counsel for the plaintiff urged that, since in his submissions it is the defendant who is claiming "the benefit of its limitation clause", the defendant should have measured the cubic capacity of each of the plaintiff"s belongings and, having failed to do so, I should conclude that the defendant has failed to prove the quantum of cubic capacity under the limitation clause. He urged, therefore, that I should award the plaintiff the total damages claimed as the measure of damages under the limitation clause. For this proposition, counsel for the plaintiff cites New York Central Railroad Company v. Siegel.5 The head note of that decision reads:
Where a railroad company limits its liability, as carrier, for the transportation of furniture to sixty-five cents per pound, if the articles are delivered in a damaged condition, the onus probandi is on the company to prove the weight of the furniture damaged. If such evidence is not made, the Court will grant the amount of damages suffered according to common law.
[21] A review of the reasons of the Cour du Banc du Roi, given in French and not before me in an English translation, demonstrates that the facts of that case are distinguishable. In that case, the goods that were the subject of a contract for delivery were damaged. There is no indication that any goods were lost and therefore it can be assumed that after the damage was done, the damaged goods were available for measurement or weighing. The plaintiff was seeking the cost of repair. There was no indication that that option was not open to him. The Cour du Banc du Roi confirmed a judgment in his favour in the amount claimed in the absence of evidence as to the value of the goods under the weight-based limitation of liability. Here, there is no absence of evidence as to the cubic volume of the belongings lost and damaged. Both the defendant and the plaintiff have provided me with evidence in that regard, albeit in the form of estimates. While the plaintiff may well question, as he has, the quality and reliability of the defendant"s evidence in that regard, that is as far as he can go and it is left for me to evaluate the evidence and reach a conclusion as to the cubic volume.
[22] Given the judgments and orders in this proceeding to this point in time, both at the level of the trial division and on appeal, I do not regard it as open to me to now simply determine the cubic volume of the belongings lost and damaged in a manner that produces a quantum of damages equal to the damages claimed by the plaintiff. Not even the plaintiff"s own evidence would support such a determination. Thus, even if it were open to me to make such a determination, I would decline to do so.
| b) Determination of quantum of judgment |
| (1) Lost or damaged articles in respect of which the defendant had effectively chosen the cost of repair or replacement |
[23] In the defendant"s affidavit primarily directed to the issue of cubic volume of the lost and damaged belongings, the affiant, Vincent Parry, attests that: "According to [the plaintiff"s] estimates and the terms of the limitation of liability clause, the defendant would have the option to reimburse [the plaintiff] for the repair or replacement costs of [four items with a total repair or replacement cost of "67.50]." Clearly implied on the face of the affidavit is that the defendant chooses the repair or replacement costs in respect of these items. No other evidence as to this exercise of discretion in the hands of the defendant is before me. In the affidavit of the plaintiff filed in reply (the "Mackay affidavit"), the following paragraph appears:
| 2. It is clear from Mr. Parry"s affidavit that he is no longer in the employ of the Defendant, and is thus not in a position to take decisions for the Defendant. Because of this, and because at no time either directly to me or within the dossier of this action, has Defendant exercised its "sole option" as contained in Clause 7 of the Liability of the Company ... [condition of the contract] to substitute "the cost of repairing or replacing the damaged or missing article" for limitation for "a sum calculated at the rate of "10 Sterling per cubic foot of the cubic capacity of the item lost or damaged ...", any limitation which is finally taken into account must only be based on a cubic limitation. |
[24] While the foregoing paragraph quoted from the Mackay affidavit is clearly argument and not the proper subject matter of an affidavit, and while the argument reflected in the paragraph was not otherwise repeated in the plaintiff"s material filed before me on the reference hearing or in oral argument on behalf of the plaintiff, I adopt the reasoning of the quoted paragraph as my own. The defendant never exercised the "repair or replacement" option available to it under the limitation clause, an option that, at least with respect to the items in question, would have been more favourable to it. In the result, I conclude that the items in question must be valued under the limitation clause on the basis of their cubic volume.
| (2) The adjusted limitation of liability |
[25] The defendant produced at the reference hearing a brief calculation indicating that the "10 limitation, adjusted in accordance with the last paragraph of the limitation clause quoted earlier in these reasons, produces a limitation of "22.72. This adjusted figure was adopted on behalf of the defendant in argument and was accepted on behalf of the plaintiff. I determine the appropriate limitation under the limitation clause to be "22.72 per cubic foot of volume of the lost and damaged belongings.
| (3) The cubic capacity of the items lost or damaged in respect of which the cost of repair or replacement option was not chosen |
[26] As indicated earlier in these reasons, I have concluded that the cost of repair or replacement option was not effectively chosen in respect of any of the lost or damaged belongings.
[27] In his affidavit on behalf of the defendant (the "Parry affidavit"), Mr. Parry estimates the cubic volume of the lost or damaged goods other than those in respect of which he purports to exercise the defendant"s option as to repair or replacement value, as 112.5 cubic feet. On the face of the Parry affidavit, it is acknowledged that the cubic volume of the belongings for which the repair or replacement cost option was ineffectively chosen is estimated by him at 39 cubic feet. Further, at the reference hearing, counsel for the defendant acknowledged that belongings of a cubic volume estimated in the Mackay affidavit at 17 cubic feet were overlooked in the Parry affidavit. In the result, it is estimated on behalf of the defendant that the cubic volume of belongings lost or damaged amounts to 168.5 cubic feet and that this volume should be used in the determination of damages under the limitation clause.
[28] Counsel for the plaintiff and the plaintiff on the face of the Mackay affidavit raised doubts as to the qualifications of Mr. Parry to produce any volume estimate whatsoever and raised further doubts as to the efficacy of the volume estimate that he did produce. On the face of the Mackay affidavit, and through counsel at the reference hearing, it is urged that a cubic volume equivalent to the total cubic volume of the belongings shipped or, at a minimum, a cubic volume of 700 cubic feet should be adopted. It is further urged that, in the absence of evidence brought forward by the defendant, and there is no such evidence, as to the portion of the overflow container devoted to the plaintiff"s belongings, I should adopt as the total volume of the plaintiff"s belongings the total volume of the dedicated container plus the total volume of the overflow container. I reject outright this last submission. It is clear on the evidence that was before me at the trial of this matter that only a portion of the volume of the overflow container was occupied by the plaintiff"s belongings. Further, it was also apparent on the evidence that far from all of the plaintiff"s belongings were lost or damaged.
[29] From the face of the Parry affidavit, it is clear that Mr. Parry has extensive experience in the estimation of volume of household belongings. That being said, it is not so clear how extensive his experience is with respect to the estimation of volume of antique belongings and I am prepared to accept that such belongings, to the extent that they are household furnishings which was in many cases the situation here, exceeds the volume of more modern equivalent furnishings.
[30] That being said, counsel for the plaintiff pointed out to me that, in my reasons following trial on this matter, I acknowledged, as did counsel for the defendant at the trial, that the plaintiff is an expert in the valuation of antiques and decorative arts and is a "knowledgeable person" regarding antiques and decorative arts. I further acknowledged in my reasons that the plaintiff is "a serious and sophisticated professional" and that in giving evidence before me he was both "forthright and credible". None of the foregoing acknowledges that he has any experience or expertise in the estimation of cubic volume of personal belongings, whether antique or otherwise.
[31] I refer back to the quotation earlier in these reasons from the reasons of Mr. Justice Létourneau on the second occasion on which this matter has gone to the Court of Appeal. Mr. Justice Létourneau acknowledged that I am obliged to "somewhat arbitrarily determine the size of each item to establish the overall cubic capacity...". While I find that, on the evidence before me, it would be problematic to deal with the lost or damaged belongings item by item, I conclude that I have no alternative but to "somewhat arbitrarily" make a determination as to the aggregate cubic volume of the lost and damaged belongings on the basis of the evidence before me. I am satisfied that the aggregate volume to be derived from the Parry affidavit is somewhat low. Equally, I conclude that the minimum aggregate volume advocated, and I use that term advisedly, on the face of the Mackay affidavit is high.
[32] In the result, having regard to all of the evidence before me, I , nonetheless "somewhat arbitrarily", arrive at a cubic volume of the lost and damaged belongings of four hundred and fifty cubic feet.
| (4) The resultant quantum of liability |
[33] Applying the adjusted limitation of liability per cubic foot of volume to the volume that I have determined for the lost and damaged belongings, the defendant"s liability under the limitation clause amounts to "10,224.00.
| (5) The calculation of pre and post judgment interest |
[34] Counsel for the defendant urged that the adjustment formula provided in the limitation clause is effectively in substitution for pre judgment interest and that therefore pre judgment interest should not be allowed. This argument was not made before me at trial. While my judgment following trial did not, on its face, provide for prejudgment interest, the conclusion to my reasons in support of the judgment clearly and unequivocally anticipated an award of pre and post judgment interest. I do not propose to now revisit my reasons in that regard. I simply do not accept the interpretation of the adjustment formula in the limitation clause that is urged on behalf of the defendant.
[35] That pre judgment interest is a normal feature of judgments in admiralty matters before this Court is beyond question.6 This principle appears to be reflected in section 36 of the Federal Court Act6. Subsection 36(1) provides as follows:
| 36. (1) Except as otherwise provided in any other Act of Parliament, and subject to subsection (2), the laws relating to prejudgment interest in proceedings between subject and subject that are in force in a province apply to any proceedings in the Court in respect of any cause of action arising in that province. |
36. (1) Sauf disposition contraire de toute autre loi fédérale, et sous réserve du paragraphe (2), les règles de droit en matière d'intérêt avant jugement qui, dans une province, régissent les rapports entre particuliers s'appliquent à toute instance devant la Cour et dont0 le fait générateur est survenu dans cette province. |
Subsection 36(2) is not relevant for the purpose of this proceeding. It was not in question before me that this action arose in Ontario. Thus, unless otherwise provided in an Act of Parliament other than the Federal Court Act, it would appear that Ontario law would apply. But I am satisfied that that is not the case. Subsection 36(7) of the Federal Court Act reads as follows:
| (7) This section does not apply in respect of any case in which a claim for relief is made or a remedy is sought under or by virtue of Canadian maritime law. |
(7) Le présent article ne s'applique pas aux procédures en matière de droit maritime canadien. |
I am satisfied that this is a case in which the claim for relief is made "...under or by virtue of Canadian maritime law." Thus, the "well established" principle referred to in the quotation from Fednav appearing in footnote 6 comes into play.
[36] Counsel for the plaintiff urged that interest should be compounded, a proposition supported with respect to pre judgment interest by the Fednav decision as being within the discretion of a Trial judge.7
[37] By reference to the sentences quoted from Fednav in footnote 6, this is clearly a case in which an important limitation of liability is "imposed" against the "victim", the plaintiff, albeit I am reluctant to describe the plaintiff as a victim, given the nature and extent of his experience. Similarly, I find it hard to accept that here, the limitation of liability is "imposed" against the plaintiff, when I can only conclude that he voluntarily entered into the contract that included the limitation clause.
[38] If it be necessary to the exercise of my discretion to provide for compounding of pre judgment interest that I find that the plaintiff demonstrate that his loss cannot otherwise be fairly compensated,8 then I so find, based upon the totality of the evidence before me both at trial and at the reference hearing.
[39] Based on the foregoing analysis, I conclude that pre judgment interest should be awarded in the plaintiff"s favour and should be compounded on a semi-annual basis.
[40] Section 37 of the Federal Court Act deals with post judgment interest. Subsection 37 (1) reads as follows:
| 37. (1) Except as otherwise provided in any other Act of Parliament and subject to subsection (2), the laws relating to interest on judgments in causes of action between subject and subject that are in force in a province apply to judgments of the Court in respect of any cause of action arising in that province. |
| 37. (1) Sauf disposition contraire de toute autre loi fédérale et sous réserve du paragraphe (2), les règles de droit en matière d'intérêt pour les jugements qui, dans une province, régissent les rapports entre particuliers s'appliquent à toute instance devant la Cour et don"t le fait générateur est survenu dans cette province. |
Subsection 37(2) is not relevant for the purpose of this proceeding. In respect of section 37, there is no equivalent to subsection 36(7) of the Act, quoted above. Thus, I conclude that Ontario law applies.
[41] Subsection 129(1) of the Courts of Justice Act9 reads as follows:
129.(1) Money owing under an order, including costs to be assessed or costs fixed by the court, bears interest at the post judgment interest rate, calculated from the date of the order.
The Courts of Justice Act appears to give no guidance with regard to compounding of post judgment interest. Certainly I was referred to no such guidance by counsel.
[42] I conclude that post judgment interest in the plaintiff"s favour should be provided on a simple interest basis.
[43] Counsel before me were in agreement that an appropriate average rate of interest from March 31, 1988 to the date of the reference hearing before me, October 30, 1998 is 9.2%. I accept this as an appropriate rate, and also as the rate to apply in respect of post judgment interest.
[44] In the result, the plaintiff will be entitled to pre judgment interest at the rate of 9.2% on the amount of the judgment herein, calculated from March 31, 1988, the nominal date when his loss was determined, to the date of my judgment, March 31, 1994, such interest to be compounded semi-annually. Interest so calculated amounts to "7,314.85. Post judgment interest at the rate of 9.2% on the amount of the judgment, exclusive of costs fixed by my judgment herein or to be taxed, calculated on a simple interest basis, shall run from March 31, 1994 to the date of payment. Interest so calculated to the date of the reference hearing amounts to "7,395.53. Per diem interest from October 30, 1998 to date of the payment of the judgment will be "4.42 or, converted as hereafter provided, $11.48. .
| (6) The Conversion to Canadian Funds |
[45] Counsel for the defendant adduced evidence before me at the reference hearing that the appropriate conversion rate from pounds sterling to Canadian dollars on October 29, 1998 was 2.5967. Counsel for the plaintiff accepted this as the appropriate rate at which the judgment, including pre judgment interest, in Pounds Sterling, should be converted to Canadian dollars. I adopt this rate. In the result, the judgment herein, inclusive of interest to October 30, 1998, will be in the amount of $64,747.10.
PAYMENT OUT OF COURT
[46] On the 26th of November, 1992, the defendant paid into court in connection with this action an amount of $2,500.
[47] That amount, together with accumulated interest, shall be paid out of court to the defendant or its nominee on provision of evidence satisfactory to an appropriate official of the Court that the judgment herein has been fully satisfied.
POST-REFERENCE HEARING SUBMISSIONS
[48] At the close of the reference hearing, I indicated to counsel that I would distribute a draft of these reasons for the purpose of allowing counsel to provide any comments they might wish to make as to the calculations reflected in these reasons and further for the purpose of allowing for submissions as to costs. As indicated earlier in these reasons, in my earlier reasons for judgment, I wrote:
On the issue of costs, given the result, I am of the view that each party should be responsible for his or its own. However, if either party wishes to make written submissions in this regard, counsel should so advise the Court on notice to the other party and directions will be provided.
[49] Draft reasons were distributed and counsel were provided an opportunity to make written submissions. Counsel for both parties availed themselves of this opportunity.
[50] In submissions on behalf of the defendant, counsel noted that, on the two occasions on which this matter has gone to the Court of Appeal at the instance of the plaintiff, the appeals were dismissed with costs in favour of the defendant. Thus, counsel urged, the costs that are at my discretion relate to three days of pre-trial examinations, five days of trial, a one-day hearing on a motion for directions and the one day reference hearing. Counsel noted that, as early as the 28th of September, 1993, the defendant submitted a written offer to settle in an amount of $75,000., an amount substantially in excess of the judgment that I have awarded together with pre-judgment interest to the date of the offer. Counsel urged that costs to the date of the offer to settle should go in favour of the plaintiff with costs after that date to go in favour of the defendant. Counsel urged that I fix costs rather than prolong this matter further. With respect to those costs that are at my discretion, counsel urged a net order as to costs in favour of the defendant in the amount of $125,000.00. Counsel also urged that I fix the costs awarded on the two appeals and recommended an amount of $45,000.00 in favour of the defendant.
[51] Counsel for the plaintiff indicated that the plaintiff was "... content to accept the Reasons of the Honourable Trial Judge "that each party should be responsible for his or its own"." Counsel urged that, to achieve a neutral costs result, given the awards of costs to the defendant in the Court of Appeal, I should award the plaintiff costs in an equal amount in respect of the proceedings over which I have discretion as to costs. Counsel for the plaintiff concluded his representations with the following paragraph:
The foregoing are only general representations as to costs in answer to what appear to the Plaintiff as equally general representations made by the Defendant. In view of the magnitude of the Defendant"s demand of costs, and in view of the Court"s suggestion of a further hearing if costs could not be agreed, the Plaintiff requests that no order resulting in a payment of costs to the Defendant be made without the opportunity to make full-detailed representations. [emphasis added]
[52] Counsel for both parties made representations as to the calculation of the amount of the judgment in accordance with these reasons. Counsel for the defendant urged that the quantum of the judgment and of prejudgment interest should be determined, along with the conversion rate to Canadian dollars, as at the date of my original judgment in this matter rather than as at the date of the reference hearing that will give rise to my final judgment on damages, interest and costs as opposed to liability. The result would be a substantially reduced judgment in favour of the plaintiff. By contrast, counsel for the plaintiff urged that I use the date of my original judgment as a determinative date regarding costs, with the clear objective of reducing costs ordered against the plaintiff on the basis of the defendant"s settlement offer. Counsel for the plaintiff further urged that I adjust upward my determination of the number of cubic feet on which the quantum of judgment in favour of the plaintiff is based. I am not prepared to modify my reasons and my judgment in any of these regards on the basis of the written representations received.
[53] I turn then to the costs determination.
[54] Rule 400(1) of the Federal Court Rules, 1998 vests this Court with broad discretion in the determination of costs. That Rule reads as follows:
| 400.(1) The Court shall have full discretionary power over the amount and allocation of costs and the determination of by whom they are to be paid. |
400.(1) La Cour a entière discrétion pour déterminer le montant des dépens, les répartir et désigner les personnes qui doivent les payer. |
[55] Rule 400(3) lists a number of factors that may be considered in exercising the Court"s discretion as to costs.
[56] Rule 420(2) deals with the costs consequences to a plaintiff of failing to accept an offer to settle made by a defendant. Rule 420(2) reads as follows:
| 420.(2) Unless otherwise ordered by the Court, where a defendant makes a written offer to settle that is not revoked, (a) if the plaintiff obtains a judgment less favourable than the terms of the offer to settle, the plaintiff shall be entitled to party-and-party costs to the date of service of the offer and the defendant shall be entitled to double such costs, excluding disbursements, from that date to the date of judgment; or (b) if the plaintiff fails to obtain judgment, the defendant shall be entitled to party-and-party costs to the date of the service of the offer and to double such costs, excluding disbursements, from that date to the date of judgment. |
420.(2) Sauf ordonnance contraire de la Cour, lorsque le défendeur présente par écrit une offre de règlement qui n"est pas révoquée et que le demandeur: (a) obtient un jugement moins avantageux que les conditions de l"offre, le demandeur a droit aux dépens partie-partie jusqu"à la date de signification de l"offre et le défendeur a droit au double de ces dépens, à l"exclusion des débours, à compter du lendemain de cette date jusqu"à la date du jugement; (b) n"obtient pas gain de cause lors du jugement, le défendeur a droit aux dépens partie-partie jusqu"à la date de signification de l"offre et au double de ces dépens, à l"exclusion des débours, à compter du lendemain de cette date jusqu"à la date du jugement |
Clearly Rule 420(a) is here applicable. No suggestion has been made on behalf of the plaintiff that the defendant"s offer to settle was revoked. Quite properly, at the time I wrote regarding the concept of each party bearing its own costs, I had not been advised of the offer to settle.
[57] Against the principles set forth in the Federal Court Rules, 1998 to which I have referred, and bearing in mind that, by reason, in part at least, of the nature of the evidence regarding value of the plaintiff"s belongings that were lost or damaged and also, in part, the positions adopted, or not adopted, pleaded or argued by the parties and their counsel, this action has been prolonged and rendered more complex than might otherwise have proved necessary, and given the evidence of the settlement offer that is now properly before me on the issue of costs, I abandon my earlier position that each party should bear its own costs. I am satisfied that, in the exercise of my discretion, this is a proper matter for an order as to those costs to which my discretion applies.
[58] Further, given the position of counsel for the defendant that whether I proceed solely on the basis of the written submissions now before me or reconvene, by teleconference or otherwise, is left to my discretion, and given the fact that counsel for the plaintiff has had full opportunity to provide written submissions and, if those submissions have been general in nature, that was his choice, I would propose to dispose of the issue of costs without further hearing and solely on the basis of the written representations received to date if I were satisfied that the written representations provided on behalf of the defendant were sufficient to allow me to do so. No undertaking or suggestion has been given or made by the Court that this matter would be reconvened "...if costs could not be agreed", as suggested by counsel for the plaintiff in his representations. That being said, I am in agreement with the position of counsel for the plaintiff that the defendant"s submissions are of a nature such that I cannot reasonably fix costs on the basis of the material before me.
DISPOSITION AS TO COSTS
[59] Costs to the date of the defendant"s offer of settlement referred to above will go in favour of the plaintiff. Such an order is not resisted on behalf of the defendant. As indicated, I will not fix those costs. They will be left to be assessed in the ordinary manner.
[60] Costs incurred in the Trial Division, that is to say costs that are at my discretion, and that post-date the defendant"s offer of settlement will go in favour of the defendant. Those costs will also be left to be assessed in the ordinary manner with direction to the assessing officer to take into account the offer of settlement on behalf of the defendant earlier referred to and Rule 420(2) and to treat the judgment to which these reasons relate, rather than my earlier judgment herein dated the 31st of March 1994, as the final judgment in this matter for purposes of the costs determination. That this is the appropriate disposition is, I am satisfied, made clear by the first judgment of the Court of Appeal herein.
[61] Further, I leave costs ordered by the Court of Appeal in favour of the defendant to be assessed in the ordinary manner.
_____________________________
Judge
Ottawa, Ontario
January 7, 1999
__________________1 C.R.C. 1978, c. 663 (as amended). Since the hearing was ordered, the Federal Court Rules have been repealed and replaced by the Federal Court Rules, 1998 SOR/98-106, with effect from April 25, 1998.
2 [1994] F.C.J. No. 457 (F.C.T.D.) (QL).
3 Supra, note 2, paras 91-93 of the reasons.
4 [1998] F.C.J. 442 at para 3 (F.C.A.).
5 (1923), 35 K.B. 118 (Cour du Banc du Roi du Québec)
See Fednav Limited, et al. v. Ontario Bus Industries Inc., (1992), 150 N.R. 149 (F.C.A.), where Mr. Justice Marceau wrote: It is well established that pre-judgment interest in admiralty cases is considered to be an integral part of damages and stems from the principle of restitutio in integram or the right to full compensation as of the date of the tort or breach of the contract. On this basis, especially in a case as this one, where an important limitation of liability is [imposed] against the victim, we see no reason to preclude the award of compound interest where these returns are regularly available from our financial institutions. In any event, this was a matter within the judge"s discretion with which we would have no reason to interfere... . [reference omitted]
6 R.S.C. 1985, c. F-7 (as amended).
7 For a slightly more recent decision with respect to a trial judge"s discretion, see Canastrand Industries Ltd. v. Ship Lara S et al., (1993), 60 F.T.R. 1 at 44.
8 See Alcan Aluminium Ltd. v. Unican Int. S.A.(1996), 113 F.T.R. 81.