Federal Court Decisions

     T-1452-92

BETWEEN:

     ME THIERRY VAN DOOSSELAERE, Syndic

     es qualité representing United Maritime Belgium N.V.

     Plaintiff

     - and -

     UNISPEED GROUP INC.

     - and -

     S.G.S. SUPERVISION SERVICES INC.

     Defendants

     REASONS FOR ORDER

ROULEAU, J.

     This is an application by the plaintiff for an order awarding it lump sum costs in the amount of $100,000.00.

     This action was commenced in June of 1992, seeking recovery of 178,223.92 Deutch Marks ($130,674.00 Canadian) for excessive freight charges paid by the plaintiff to the defendant Unispeed Group Inc. ("Unispeed") for the carriage of a cargo by sea from Sorel, Quebec to Casablanca, Morocco. The claim was initially brought by Alfons Koster International Forwarders Ltd. ("Koster") of Antwerp, Belgium. The style of cause describing the plaintiff was amended in February of 1994 to read United Maritime Belgium M/V and subsequently amended again in April of 1994 to read Me Thierry Van Doosselaere, Syndic, es-qualité representant United Maritime Belgium M.V., since the plaintiff filed for bankruptcy in 1994 and the action was carried on by the trustee. The principal behind Koster was Mr. Marc De Wert.

     By decision dated January 27, 1997, I ordered the defendants to jointly and severally pay to the plaintiff the sum of $130,674.00 Canadian, together with interest at the prime Belgian commercial lending rate plus 2% per annum, compounded semi-annually, from October 15, 1991, through to the date of Judgment as well as post-Judgment interest at the same rate until payment. In addition, I offered to entertain a separate application with respect to costs. A hearing took place in that regard on July 7, 1997, at which time there was before the court a detailed Bill of Costs indicating a breakdown in chargeable units as well as an outline of the disbursements incurred by the plaintiff. Following the debate between the parties, I reserved my decision and rendered an order permitting the parties to file affidavit evidence before I would determine the award for costs.

     In accordance with Rule 344(1) of the Federal Court Rules, the Court has full discretionary power over the payment, amount and allocation of costs. There are a number of factors set out in Rule 344(3) which may be taken into account by the Court in exercising its discretion in awarding costs, as well as in determining their quantum. These Rules provide as follows:

344. (1) The Court shall have full discretionary power over payment of the costs of all parties involved in any proceeding, the amount and allocation of those costs and determining the persons by whom they are to be paid.

(3) In exercising its discretionary power pursuant to subsection (1) the Court may consider

(a) the result of the proceeding;

(b) the amounts claimed and the amounts recovered;

(c) the importance of the issues;

(d) the apportionment of liability;

(e) any confession of judgment under Rule 405 and the amount thereof;

(f) any payment of money into Court under Rules 441 et seq. and the amount of that payment;

(g) any offer of settlement made in writing;

(h) any offer of contribution made pursuant to Rule 1732 that is brought to its attention pursuant to a reserved right to do so;

(i) the volume of work;

(j) the complexity of the issues;

(k) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;

(l) the denial of or the neglect or refusal of any party to admit anything that should have been admitted;

(m) whether any stage in the proceedings was,

(i) improper, vexatious, or unnecessary, or

(ii) taken through negligence, mistake or excessive caution;

(n) whether or not two or more parties should be allowed more than one set of costs, where they defended the proceeding by different counsel or where, although they defended the proceeding by the same counsel, they separated their defence unnecessarily;

(o) whether two or more parties, represented by the same counsel, initiated separate proceedings unnecessarily; and

(p) any other matter relevant to the question of costs

     Once the trial of this matter was completed, the evidence made it exceedingly clear that it was the incompetent conduct of the defendants which was the direct cause of Mr. De Wert's eventual bankruptcy. As I stated in my decision of January 27, 1997, had Mr. De Wert been named as a plaintiff and sought punitive damages, I would have been inclined to make such an award. Furthermore, given the outcome of the trial and the award which was made in the plaintiffs' favour, the defendants' offers of settlement were exposed as meaningless and absurd.

     Having said that however, there was also conduct on the part of plaintiff's counsel which leads me to conclude that the lump sum of $100,000.00 sought is excessive. After commencing its action, the plaintiff did not pursue it with due diligence. Although he initially succeeded in obtaining default judgment against the defendants, that judgment was subsequently set aside by Pinard, J. by decision dated April 5, 1993 and further confirmed by subsequent orders of Muldoon, J. The plaintiff's appeal from the decision of Pinard, J. was dismissed and costs were awarded against him.

     A trial date had been set by the Judicial Administrator some considerable months before it was scheduled to begin on April 15, 1996. Of significance plaintiff's counsel did not file complete affidavits of his expert witnesses, Mr. Sbihi and Mr. Farouk, thirty days prior to the commencement of the trial, as required by Rule 482. Though counsel for the plaintiff suggests that proper expert affidavits were filed and served on the defendants at least 30 days prior to the commencement of the proceeding, it was obvious at the outset on April 15, 1996 that these affidavits were not satisfactory, far from complete and not in accordance with the requirements of Rule 482. The parties sought an adjournment on the first day of trial, April 15, 1996, as a result of this default. I ordered that the now completed experts' affidavits would be filed and accepted on that day and I ordered cross-examination to take place during the following two days and that this cross-examination could eventually be filed with the Court at the resumption of the trial and would be accepted as evidence in the proceeding; all in order to avoid the expense of having to bring the witnesses back at a later date. Also at the opening, counsel had failed to produce all of his documents by the first day of trial and the Court ordered him to do so forthwith. There is no question that these oversights on the part of plaintiff's counsel led to an unwarranted delay in the commencement of proceedings.

     Finally, after my decision of January 27, 1997, was rendered, counsel for the plaintiff brought a motion pursuant to Rule 337 on the grounds that the award may not have been accurate and the Court should reconsider the terms of the pronouncement, or that there may have been an accidental slip or omission. I entertained this application in open court dismissing it on the basis that there was no grounds to support such an application and I awarded costs to both defendants for preparation and appearance on that date.

     After carefully reviewing the Bill of Costs as submitted by the plaintiff seeking a lump sum award taking into account the fact that costs were awarded against him in the initial setting aside of the default judgment as well as in the Federal Court of Appeal; also considering the fact that approximately 1" days at the outset of the trial were lost because of the plaintiff's failure to produce proper expert affidavits, causing cross-examination which tied up defendants' counsel for approximately 3 days unnecessarily; taking into account that I awarded costs against the plaintiff for an unjustified application under Rule 337 for reconsideration of my judgment, I am not prepared to allow the lump sum payment of $100,000. As I consider the discretion afforded a trial judge under Rule 344 of the Federal Court Rules , taking into account the amounts recovered (in excess of $200,000), the considerable success met by the plaintiff and as I said at the opening both defendants' incompetence lead to the bankruptcy of the initial plaintiff, Mr. De Wert, and taking into account the meaningless offer of settlement put forward by the defendants and setting off awards that were given defendants' counsel, I am ordering a lump sum for costs to the plaintiff of $50,000.00 in lieu of all taxed costs excluding tariff B, Part III Disbursements, which disbursements shall be taxed by the taxing officer in accordance with the following directions:

(i) all necessary and reasonable transportation and living expenses of Mr. De Wert during the conduct of the trial will be allowed, as he was clearly an essential witness whose testimony was invaluable to the Court in making its determination;

(ii) all necessary and reasonable transportation and living expenses of the plaintiff's two expert witnesses, as well as their professional fees, will be allowed but only for the attendance in April of 1996. No expenses or fees will be allowed for the plaintiff's expert witness who was required to return for a second time;

(iii) no disbursements relating to the appeal of Mr. Justice Pinard's interlocutory decision, dated April 5, 1993, will be permitted;

(iv) all other reasonable disbursements incurred by the plaintiff.

     The plaintiff's application is therefore allowed in part, costs to be awarded in accordance with these reasons.

JUDGE

OTTAWA, Ontario

September 23, 1997