Logunov v. Sheduva (The), docket T-2514-96

Date: 19980424

Docket: T-2514-96

BETWEEN:

     ANATOLIJ LOGUNOV, KAZYS VALENTINAS DICKUS,

     ROBERTAS RIMKUS, VASIIJI SANIKOV, JURIJ

     GAMILOVSKIJ, JURIJ TURLOV, ALEKSANDR BUKATYJ,

     JEVGENIJ GAMILOVSKIJ, FINOGEJ CELPANOV,

     VLADIMIR MAMEDOV, VYTAUTAS SMILGINIS,

     ROLANDAS LUKOSEVICIUS, MIKALOJUS SUJETA,

     STEPAN BOGANOV, VLADIMIR ALISEIKO, JURIJ

     JEMELJANOV, JURIJ VDOVIN, JUOZAS URNIKIS, PETRAS

     KERSYS, ANTANAS SERPENSKAS, VIKTOR KULIGIN,

     GERMANAS SARAPOVAS, KAZYYS PAULAUSKAS, and

     FELIKSAS SALTYS,

     Plaintiffs,

     - and -

     THE OWNERS, UAB AZALIJA, AND ALL OTHERS

     INTERESTED IN THE SHIP "SHEDUVA",

     Defendants.

     REASONS FOR ORDER

MULDOON, J.

[1]      This is an unusual type of motion brought by the plaintiffs, being the master, officers and crew of the M.V. Sheduva. Quite likely many a judgment creditor confronted with a sheriff's bill for poundage has contemplated instituting just such proceedings as these. The notice of motion invokes rules 3(1)(c), 346(2) and 1007(8). There was intertwined in this matter an appeal of the taxing officer's decision by the Harbour Authority of Harbour Grace, but that matter was discontinued. Substantial reference to that appeal is hereinafter excised.

[2]      The plaintiffs' notice of motion, which helpfully otherwise delineates the issues before the Court, runs as follows:

Notice of Motion

[Rule 490 (Adjournment)

Rule 3(1)(c) (Extension of Time)

Rule 346(2)(Review of Taxation)

Rule 1007(8) (Review Taxing Officer's Taxation of Marshal's Costs)]

TAKE NOTICE that the Plaintiffs, the Master, Officers and Crew of the M. B. "Sheduva", will by their legal [sic] John L. Joy *** make a motion to the Federal Court of Canada ***.

The motions are for orders:

(a)      ***

(b)      Enlarging the time appointed by these rules for the filing of an application requesting that the court review the taxing of the Sheriff's costs which the taxing officer, Francoise [sic] Pilon, decided on October 17, 1997 pursuant to Rule 346(2);

(c)      Denying the payment of the Marshall's [sic] commission as claimed under the application to approve the Marshall's [sic] costs pursuant to Rule 346(2);

(d)      Allowing the Plaintiff's [sic] costs in arresting the ship, preserving the ship, obtaining summary judgment, arranging the appraisement and sale of the ship, arranging the public auction and obtaining the order confirming the sale of the ship as part of the Marshall's [sic] costs, or alternatively, as an amount ranking equal with the payment of the Marshall's [sic] costs pursuant to Rule 346(2);

(e)      Denying the Harbour Grace Harbour Authority claim *** [discontinued November 10th, 1997 (document 64)];

(f)      In the alternative to (b), (c), (d) and (e) reviewing the taxing officer's taxation of the Marshal's costs pursuant to Rule 1007(8) and granting the relief claimed in (b), (c), (d) and (e); and

(g)      costs.

2. The grounds of the motion are:

Adjournment (Rule 490)

1.      The Plaintiffs require further time to prepare their response to the Harbour Grace Authority application. *** The Plaintiffs have had no notice of the application until late on Wednesday, November 5, 1997.

Extension of Time (Rule 3(1)(c))

2.      The Plaintiffs understood that the taxing of the Marshal's costs occurred pursuant to Rule 1007(8) and that the Plaintiffs could make an application to the court to review the taxing officer's taxation of the Marshal's costs at any time before the final conclusion of the case up to the determination of priorities and the payment of the money out of court and the expiry of any appeal periods. The rule contains an inherent ambiguity which should not be read against the Plaintiffs.

3.      Rule 346 on its face appears to be a rule concerned with the taxation of party and party costs and solicitor-client costs pursuant to the Tariffs.

4.      The Plaintiffs will suffer prejudice in that the payment of the Sheriff's commission will result in these funds not being available to satisfy the Plaintiff's [sic] judgment.

5.      The Plaintiffs have been put to considerable expense in excess of $120,000.00 to bring this matter to its present position and both the Marshal and the Harbour Grace Harbour Authority are attempting to take advantage of the Plaintiffs' efforts in order to secure unreasonable charges for the commission and unwarranted harbour dues and wharfage contrary to the intentions Parliament.

Review of Taxation (Rule 346(2))

6.      The Taxing Officer, Francoise [sic] Pilon, although impressed by the arguments of the Plaintiffs, did not feel that he had the jurisdiction to refuse to allow the Marshal's commission as claimed. The Plaintiffs maintain that the Taxing Officer had the jurisdiction to make this decision and, given his comments he would have refused to allow the commission as claimed and would have ordered a commission which did not exceed $1,000.00.

7.      In the alternative, the Plaintiffs state that, if the Taxing Officer did not have jurisdiction to disallow the Marshal's commission, then the court certainly has the jurisdiction to do so and taking into account all of the arguments made during the taxation, the court ought to disallow the Marshal's commission, or should certainly reduce it to an amount not exceeding $1,000.00.

8.      [Harbour Grace Harbour Authority again]

9.      The Plaintiffs maintained that the Taxing Officer, or alternatively, the court should consider the costs of the Plaintiff [sic] in arresting the ship, preserving her, obtaining summary judgment, arranging for her appraisement and sale, conducting the auction and arranging for the confirmation of the sale as Marshal's costs, or alternatively, as costs ranking equal to the Marshal's costs.

Review of Taxing Officer's Taxtion [sic] (Rule 1007(8))

10.      The Plaintiffs seek the same remedies under this Rule as have been outlined under Rule 346(2) with respect to the Sheriff's commission which is unreasonable under all of the circumstances and which the Taxing Officer left to be determined by the court for want of his perceived jurisdiction to deal with the matter, *** and allowing the Plaintiffs [sic] costs for the arrest of the ship, her preservation, the obtaining of the summary judgment, the arranging of the appraisement and sale, the conduct of the public auction and the confirmation of the sale of the ship and the payment of the proceeds into court as Marshal's costs or alternatively as costs which rank equal with Marshal's costs. No fund would be available without the Plaintiffs [sic] efforts. The Plaintiffs [sic] efforts were substantial and remedial. The public policy of the court should encourage proper compensation to Plaintiffs and particularly seamen for these costs because otherwise the court will be denying such Plaintiffs [sic] access to the courts and to justice.

11.      The following documentary evidence will be presented:

1.      Affidavit of Captain Anatolij Logunov dated February 4, 1997.

2.      Affidavit of John Pratt dated April 11, 1997.

3.      Affidavit of Vitas Pujanauskas dated April 11, 1996 [sic - 1997]

4.      Affidavit of Anatolij Logunov dated March 20, 1997.

5.      Affidavit of Guergi Skhirtladze dated September 28 [sic 26], 1997.

[3]      The plaintiffs' basic complaint is that the High Sheriff of Newfoundland, hereinafter, the Marshal, (pursuant to section 13 and subsection 55(4) of the Federal Court Act) simply did not perform the duties of the office of marshal, and is not entitled to the full amount of the marshal's costs as taxed. Furthermore, they say that they did perform the marshal's duties by default because the marshal was unfamiliar; unable or unwilling to perform the prescribed duties; and that they, the plaintiffs, ought to benefit from a greater return on the ship's sale, by reason of the reduction of the amount of the marshal's account.

[4]      The marshal requests that the application be dismissed, because it was instituted out of time, whereas the plaintiffs urge that this Court extend the time for instituting this review of the taxing officer's taxation of the marshal's account. If there be justification for extending the time, if needed, it will be found in the facts of this matter which are about to be weighed.

[5]      The exotic flavour of this matter, which engages one's sense of justice, can be perceived in just a few early passages from the hearing transcript. Mr. Joy was appearing for the plaintiffs, and Mr. McDonald for the marshal.

MR. JOY: By way of background ***, with respect to the whole broad aspect of the application, the Plaintiffs' file, my lord, is four feet thick. It has been a great honour and a privilege to present, to represent this client. The case is first and foremost a claim for seamen's wages, but it is other things as well. It is a case of assaults, threats, guns, thugs and contempt by Defendant ship owners, UAB Azalija. My lord, it is a case of the abusive power by diplomatic immunity by Gueorgei Skhirtladze [?] of the Lithuanian Embassy. It is a case of a shortfall with the ship being unable to provide the funds sufficient to meet the crew's claim and judgment. It is a case where, as a result of the necessity to take possession of the ship and to arrange her sale, that there have been costs incurred where suppliers of services and goods have - - that has been a fixed cost in this matter and we've already paid out $35,000 in costs to various suppliers to arrange for the -

THE COURT:

Q.      Tell me this, Mr. Joy, if you will, do your adversaries admit this? That's quite a string of facts you've been reciting.

MR. JOY:

Q.      My lord, the facts are set out in the affidavits -

THE COURT:

Q.      Yes.

MR. JOY:

Q.      - that were filed in this case, and for the benefit of the Court I accumulated them and published them in a book, and all of these facts, my lord, are set forth in there. I don't believe that my learned friends essentially are disputing -

MR. MCDONALD:

Q.      My lord, the Marshal takes no dispute with the hardships that the Plaintiffs have gone through in this matter but I will speak to that further in my submissions.

THE COURT:

Q.      It's one thing to admit; it's another thing to contest.

MR. MCDONALD:

Q.      Exactly, my lord.

THE COURT:

Q.      And are you contesting?

MR. MCDONALD:

Q.      Well, my lord, there's the issue of -

THE COURT:

Q.      With what particularity Mr. Joy should attempt to persuade me of the credibility. There's been no cross-examination on affidavits, has there?

MR. MCDONALD:

Q.      No, my lord, there's not.

MR. JOY:

Q.      No, my lord.

MR. MCDONALD:

Q.      My lord, the issue there for the Marshal's office is that, yes, we do admit that the crew of "Sheduva" and the Plaintiffs in this matter have gone through much hardship and despair in this matter, but there is argument to be made of what effect that should have on the duties carried out under the Federal Court Act which the Marshal does under Section 13. What effect should the hardship of the Plaintiffs - - should that be given any weight whatsoever in reducing the Marshal's commission when the Marshal is obligated under Section 13 of the Federal Court Act to perform a duty?

That duty has been performed to the best extent and to the best ability of the Marshal's office, and the Marshal's office performed all obligations to sell this vessel, although the Marshal does admit Mr. Joy had gone beyond the Sheriff's office to perform additional work. But in our right, we did our obligation under the order of the Court to sell the vessel, and, therefore, little weight should be given to the hardships that the crew underwent, even though the Marshal's office does admit that there was hardship on their part.

(transcript pp. 8 to 11)

[6]      The affidavit of Anatolij Logunov the captain of the M.V. Sheduva, sworn February 4, 1997, tells the sad story of the owners cheating the crew of wages, obstructing the crew's efforts to obtain redress and behaving, through minions,with thuggish brutality toward crew members. Capt. Logunov's said affidavit tells of dire poverty and the generosity of "the people of Harbour Grace and the people of Newfoundland and Labrador generally to provide [the crew] with the food and necessary supplies to continue living on the ship". It tells of R.C.M.P. investigations into threats against the crew and their families in Lithuania, resulting in criminal charges, some of which, counsel related, have been prosecuted to conviction. Capt. Logunov stated that "these criminal acts of aggression by the director of the owner and the persons named in [the said affidavit] have caused the crew to fear for their safety and the safety of their families" from whom they were separated over a time span of many months.

[7]      The affidavit of Vitas Pujanauskas, the owner's purported substitute captain of the Sheduva, sworn April 11, 1997 (erroneously shown as 1996) is an eye-opener. He too was not paid his wages from November 8, 1996, until January 23, 1997, when he sought refugee status. He deposed:

5. That I was advised by Captain Logonuv [sic] and other crewmembers, and do verily believe the same to be true, that Saulius Staskus, one of the directors and shareholders of the shipowner, UAB Azalija, stands charged by the R.C.M.P. in a criminal case for uttering threats against the crew on November 22, 1996 only a few days after the crew caused the vessel to be arrested in this action on November 16, 1996.

6. That on the 11th day of March, 1997 Alexander Konstantinov, on behalf of Saulius Staskus, one of the directors and shareholders of the shipowner, asked me to give false evidence in the trial of Saulius Staskus on the charge uttering threats. He wanted me to give false evidence to contradict the evidence of the Crown and particularly the evidence of the Captain and the First Mate in the criminal case against Saulius Staskus for uttering threats against the crew on November 22, 1996. He wanted me to give evidence that Saulius Staskus had not threatened anyone even though he knew I was not present at the time of the alleged uttering of threats.

7. In return he said that Saulius Staskus promised not to be offended that the company was required to pay $7,000.00 Canadian to the Canadian authorities as a result of my applying for refugee status. He also promised to pay me the wages that were due and owing to me. He also said that Saulius Staskus would not do anything bad to me or my family and would not take any steps against me or my family.

8. That on or about March 24 or March 25, 1997 Saulius Staskus came to the Association of New Canadians office at the corner of Barnes Road and Military Road to talk to me. He clearly confirmed that he knew about the conversation with Alexander Konstantinov and that he had authorized Alexander Konstatinov [sic] to make the offer to me. At one point in the conversation I asked if he had offered me money through to testify and his reaction to the question confirmed that he had indeed made the offer.

9. That in December of 1996 I was present when representatives of the owner, including Renaldas Zakas, threatened members of the crew, including Jurij Jemeljamov, and I know that crew members made complaints to the RCMP and provided formal statements.

[8]      Of course none of the directors' crimes nor the embassy's interference can be attributed to the marshal. Those hardships on the crew are mentioned in regard to the Court's sense of justice, so as to make way for the plaintiffs' obtaining redress, albeit minor.

[9]      The affidavit of Gueorgi Skhirtladze, the plaintiffs' appointed attorney, interpretor and translator, sworn on September 26, 1997, outlines in detail the efforts which the plaintiffs expended toward realizing the final sale of the ship. It is too voluminous to recite here, ranging from paragraph 6 through paragraph 24 of Mr. Skhirtladze's affidavit, culminating in paragraphs.

25. That the Plaintiffs object to the claim by the Sheriff's Office for a commission of $7,089.50. While they admit that the Sheriff's Office did some work with respect to the arrangements for the judicial sale and the possession of the Ship, the Plaintiffs performed most of the work associated with these tasks.

26. That the Plaintiffs incurred legal fees and disbursements in the amount of $120,012.63 which is made up as follows:

Invoice #      Amount      Interest          Total

Invoice # 33664                      $1,585.80 (paid)

Invoice # 34683      $32,036.85      $2,559.44      $34,596.29 (unpaid)

Invoice # 34870      $11,985.52      $ 857.04      $12,842.56 (unpaid)

Invoice # 35281      $10,683.22      $ 605.87      $11,289.09 (unpaid)

Invoice # 35488      $17,960.21      $ 744.00      $18,704.21 (unpaid)

Invoice # 35769      $17,513.91      $ 466.39      $17,980.30 (unpaid)

Unbilled time and disbursement

from July 1 to Sept. 23, 1997              $ 1,518.00 (unpaid)

Legal Disbursements for

Translation $13,500.00 US (@ $1.40)          $18,900.00 unpaid)

Translator's disbursements                  $ 2,596.38 (unpaid)

TOTAL AMOUNT OF LEGAL FEES &

DISBURSEMENTS INCURRED BY PLAINTIFFS $120,012.63

27. The Plaintiffs have incurred costs and liabilities in the form of legal fees and disbursements as set out in the previous paragraph in the amount of $120,012.63 plus in order to bring the Plaintiffs' claim before the court, to attempt to negotiate a settlement, to obtain judgment and an Order for appraisement and sale, to proceed with the judicial sale of the Ship, to arrange for the Sheriff to take possession of the Ship, to preserve the Ship, to insure the Ship, to provide a port crew for the Ship and to do a whole range of legal services, to incur a whole range of legal disbursements which resulted in the sale of the Ship and the deposit of $100,000.00 US which converted to $136,790.00 CAN to take the place of the Ship and to be available for the payment of the Sheriff's costs, as a representative of the Marshall [sic] and the payment of the Plaintiffs' judgment.

TIME FOR PLAINTIFFS' MOTION

[10]      Fourteen days is a usual delay within which interlocutory motions can be brought under the Court's current rules. Indeed rule 346(2) specifies fourteen days in which to make application for review of the taxation of costs pursuant to rule 346. Rule 346 governs costs taxed under Part II of Tariff B "COUNSELS' FEES AND DISBURSEMENTS ALLOWABLE ON TAXATION".

[11]      Some applications, appeals, or motions do not have prescribed delays: such as, rule 349(4) which curiously turns on itself and prescribes a time before the event; rule 355(4) which might find limitations in the Criminal Code, but for summary convictions or indictable offences [?]; rule 401.1 which could have a "natural" or "functional" limitation, none being prescribed; rule 454, perhaps of the same nature as rule 401.1; and of a similar nature perhaps also rules 327 and 327.1. Rule 1007(8) specifically governing taxation of the marshal's account also provides no limitation within which to initiate a motion to review the taxing officer's taxation.

[12]      The plaintiffs are entitled to justice under law. They have been savaged by the owners, and they have had to do what the marshal ought to have done. The plaintiffs have themselves carried out some of the substantive law and rendered it effective by thwarting the owners nefarious schemes. Such is the intended effect of the rules pursuant to rule 2(2), not to thwart plaintiffs such as these. Nor would this Court permit an incidental lacuna in the rules to contort what to the Court seems just, pursuant to rule 3(1)(c) by failing to accord the plaintiffs time within which to place their motion properly afoot. The plaintiffs' motion herein is regularized and it proceeds without hindrance. The time limitation, such as there is in these circumstances, is enlarged for the above purpose.

THE MARSHAL'S ACCOUNT

[13]      Section 13 of the Federal Court Act makes provincial sheriffs willy-nilly, or rather ex officio, marshals of this Court. In such fashion, Parliament respects provincial power over the administration of justice in the province pursuant to section 92, head 14 of the Constitution Act 1867, unless a province declines to co-operate, in which case the Governor in Council may appoint a sheriff, or marshal. The duties of the sheriff, ex officio marshal, under the federal legislation are exigently no different, then, from duties imposed by provincial legislation. The demands of the Federal Court are accordingly a normal part of the duties of the provincial sheriff, unless the province abdicates its constitutional jurisdiction thereby inducing the appointment of a federal sheriff, ex officio marshal. There is no indication, in these circumstances, that the High Sheriff of Newfoundland is not a validly appointed marshal, operating as such with the tacit approval of the legislature of Newfoundland.

[14]      Now it is well understood, for centuries it appears, that sheriffs and marshals perform their sometimes difficult and dangerous duties with various degrees of skill and energy (and honesty, which is not in question here). Some are diligent, some less so. That fact is surely a principal reason for the taxing officer's discretion and its possible review, both provided in rule 1007(8), which rule is found in Division G of the rules: SPECIAL RULES FOR ADMIRALTY PROCEEDINGS. This is that special rule which provides no time limit for making a motion to review the taxing officer's taxation. It runs:

1007. (8) A taxing officer shall tax the marshal's account, and shall report the amount at which he considers it should be allowed; and any party who is interested in the proceeds may be heard on the taxation. Application may be made to the Court on motion to review the taxing officer's taxation.

[15]      The evidence before this Court shows that the marshal was not so diligent in performing his duties as he could and should have been, but rather, the plaintiffs to avoid a loss of their first priority claim for wages, took the necessary principal rôle in completing the appraisal and sale of the Sheduva. The marshal performed the minimum of the marshal's rôle in the matter. Perhaps the owner's threats and violence cooled the marshal's ardour for his work, a possibility which the Court merely mentions, short of making a finding to such effect. The Court takes into account proportionality of effort, as well as equity. The plaintiffs made an extraordinary effort to assist.

[16]      This Court considers that for his efforts herein, as disclosed in the evidence, upon which there was no cross-examination, the marshal is adequately paid for his services herein if his account for $7,089.50 were reduced to, and paid, at $2,089.50 - that which this Court orders, as the taxing officer could have done on a plain reading of rule 1007(8). The effect is to leave more for the plaintiffs' claim. The case of International Marine Banking Co. Ltd. v. The "Dora", [1977] 2 F.C. 506 is instructive.

[17]      The plaintiffs are entitled to their party and party costs of this motion to review the taxing officer's taxation dated October 17, 1997. The Court awards such costs to be paid by the marshal. These costs may be fixed by agreement, or taxed. No other costs are awarded, although the assistance of counsel for Royal Fishing Seafood is acknowledged. Hopefully this case will be a rare exception to the future cases which come before the taxing officer, since it turns on its own peculiar facts. The Court acknowledges the plethora of jurisprudence cited by counsel.

OTTAWA, ONTARIO

April 24, 1998     

     Judge