JPMorgan Chase Bank v. Mystras Maritime Corp., 2005 FC 383

Date: 20050317

Docket: T-531-03

Citation: 2005 FC 383

Montréal, Quebec, March 17, 2005

Present:           RICHARD MORNEAU, ESQ., PROTHONOTARY

                                                  ADMIRALTY ACTION IN REM

BETWEEN:

                                             JPMORGAN CHASE BANK (formerly

                                                      The Chase Manhattan Bank)

                                                                           and

                                       J.P. MORGAN EUROPE LIMITED (formerly

                                            Chase Manhattan International Limited)

                                                                                                                                             Plaintiffs

                                                                           and

                                          MYSTRAS MARITIME CORPORATION

                                                                           and

                                               THE OWNERS AND ALL OTHERS

                                          INTERESTED IN THE SHIP "LANNER"

                                                                           and

                                                          THE SHIP "LANNER"

                                                                                                                                         Defendants

                                            REASONS FOR ORDER AND ORDER

[1]                CONSIDERING the motion by the claimants, Kent Trade & Finance Inc., Praxis Energy Agents S.A, Ashland Specialty Chemical Company and CP3500 International Ltd. (hereinafter the Claimants) to revoke and alternatively to amend two (2) directions issued by the Court dated February 22, 2005.

[2]                CONSIDERING that the said directions (collectively the Directions) essentially directed not to file into the court record on behalf of the Claimants a supplemental affidavit of U.S. law of one Andrew S. de Klerk dated February 18, 2005 (the Supplemental Affidavit) as well as supplementary written representations signed by counsel for the Claimants and dated February 21, 2005 (collectively the Supplemental Materials).

[3]                CONSIDERING that contrary to what the Claimants alleged, the Supplemental Materials, when presented to the Registry on February 21, 2005, were not accepted by same for filing but were only received to be submitted to the Court for directions.

[4]                CONSIDERING that the Court is more than satisfied that at least at the time it issued its second direction on February 22, 2005 it was clear that the Plaintiffs and mortgagee for the purpose of the Priorities Hearing to be held on February 24, 2005 were objecting to the acceptance and filing of both components forming the Supplemental Materials and not only to the Supplemental Affidavit.

[5]                CONSIDERING that the Court is satisfied that it was proper in its second direction to indicate that the Court would not entertain any more correspondence or motions on the matter dealt with by the Directions given the barrage of correspondence that the intended introduction of the Supplemental Materials was creating and the fact that the whole situation was a major distraction less than three days prior to the Priorities Hearing which was to deal with sixteen (16) claims in total.

[6]                CONSIDERING - as to the appropriateness of the Directions - that the Claimants allege in essence that the Court erred in not allowing the filing of the Supplemental Materials, or, in the alternative, in not allowing direct rebuttal evidence viva voce, thereby effectively preventing the Claimants from being given a full hearing, and compromising the principle of audi alteram partem.

[7]                CONSIDERING that for the following reasons, the Court wholly disagrees with the Claimants.

[8]                CONSIDERING that one must remember at the outset that the issue of proof of foreign law as between claimants was clearly raised as far back as June 9, 2003 when the Court ordered the judicial sale of the Defendant Ship "Lanner". In the Order for Sale, the Court indicated that: "The time for filing any additional affidavit evidence such as that required for the proof of foreign law shall be reserved for further direction of the Court".

[9]                CONSIDERING that on September 15, 2004 the Court dealt with a motion by the Plaintiffs under rule 492(1)(d) of the then Federal Court Rules, 1998 for an order providing directions as to the procedure to be followed in determining the rights of the parties.

[10]            CONSIDERING that all of the remaining claimants, including the Claimants herein, had proper notice of the Plaintiffs' motion for directions and not one of them objected to the Plaintiffs' proposed form and content of order or the Order for Directions ultimately issued by the Court. The Order for Directions dated September 15, 2004 stated in part the following in terms of deadlines and sequence of events:

1.              The remaining Claimants shall serve and file affidavits of law and written submissions regarding priority of their remaining claims no later than November 1, 2004;

2.              The Plaintiffs and all remaining Claimants shall complete all cross-examinations on affidavits of claim and the remaining Claimants' affidavits of law no later than December 10, 2004;

3.              The Plaintiffs shall serve and file any materials in response to the remaining Claimants' affidavits of law and written submissions no later than January 7, 2005;

[11]            CONSIDERING that the Claimants did serve and file affidavits of foreign law, i.e. of U.S. law, by the deadline of November 1, 2004 ordered by the Court, and that the Plaintiffs, in turn, did the same by January 7, 2005.

[12]            CONSIDERING, however, that the Claimants served the Supplementary Materials less than three (3) days prior to the Priorities Hearing scheduled for February 24, 2005.

[13]            CONSIDERING against that late service that it was clear to all as early as September 15, 2004 that there was no provision in the Order for Directions for the filing of any additional or supplementary submissions or affidavits in rebuttal or reply regarding foreign law submitted by the plaintiffs.

[14]            CONSIDERING that the Claimants have had every opportunity as early as the beginning of September 2004 to have their say regarding the procedure to be followed to determine the rights of all claimants and, if felt appropriate, to serve and file in a timely manner prior to the Priorities Hearing a motion for leave to cross-examine the Plaintiffs' affiant on foreign law and/or to be allowed to serve and file the Supplemental Materials.

[15]            CONSIDERING that the Claimants made no motion for such relief before January 26, 2005, the date originally ordered for the Priorities Hearing (which was re-scheduled to February 24, 2005 as a result of the severe snowstorms and travel difficulties experienced during that week), and only attempted to introduce the Supplemental Materials three days before the re-scheduled Priorities Hearing without even proceeding by way of a motion.

[16]            CONSIDERING that this late attempt by the Claimants was unfair and inexcusable, and justified the Court to issue the Directions.

[17]            For all the foregoing reasons, IT IS HEREBY ORDERED that the Claimants' motion is dismissed with costs.

[18]            As to costs, the Plaintiffs requested an opportunity to speak to costs at a later date. It was agreed at the end of the hearing on the instant motion that the parties involved herein would address this issue in writing by way of written representations to be served and filed in accordance with the following schedule:

-            The Plaintiffs shall file and serve written representations on costs [no more than three (3) pages] no later than ten (10) days after the date of this Order;

-            The Claimants shall file and serve their written representations [no more than three (3) pages] no later than twenty (20) days after the date of this Order and the plaintiffs shall file a reply [no more than two (2) pages], if necessary, no later than twenty-five (25) days after the date of this Order.

                                     FEDERAL COURT

                              SOLICITORS OF RECORD

DOCKET:

STYLE OF CAUSE:

T-531-03

JPMORGAN CHASE BANK (formerly The Chase Manhattan Bank)

and

J.P. MORGAN EUROPE LIMITED (formerly Chase Manhattan International Limited)

            Plaintiffs

and

MYSTRAS MARITIME CORPORATION

and

THE OWNERS AND ALL OTHERS INTERESTED IN THE SHIP "LANNER"

and

THE SHIP "LANNER"

            Defendants

PLACE OF HEARING:                              Montréal, Quebec (by Teleconference)

DATE OF HEARING:                                March 14, 2005

REASONS FOR ORDER:                        RICHARD MORNEAU, ESQ., PROTHONOTARY

DATE OF REASONS FOR ORDER:       March 17, 2005

APPEARANCES:

SOLICITORS OF RECORD: