Date: 20040817
Docket: T-156-03
Citation: 2004 FC 1140
ACTION IN REM AGAINST THE VESSEL "PACIFIC RANGER II"
EX. "SWIFTSURE II" AND THE VESSEL "DELTA KING"
BETWEEN:
BUDGET STEEL LTD.
Plaintiff
and
FMW TOWING LTD.,
SHIELDS NAVIGATION LTD.,
PACIFIC TOWING SERVICES LTD., THE SHIP "PACIFIC RANGER II" EX. "SWIFTSURE II",
HER OWNERS AND ALL OTHERS INTERESTED IN HER,
THE SHIP "DELTA KING", HER OWNERS AND ALL OTHERS INTERESTED IN HER,
DAVID LOGAN, JOHN DOE 2 AND JOHN DOE 3
Defendants
and
THE SHIP "NAVARINO" ex "ZIM SHENZHEN", DEVONSHIRE CORPORATION,
THE OWNERS AND ALL OTHERS INTERESTED IN THE SHIP "NAVARINO",
ex "ZIM SHENZHEN"
Third Parties
REASONS FOR ORDER
HARGRAVE P.
[1] This action involves the capsize of the barge Delta King and the resulting loss of a cargo of scrap metal, on 25 January 2002, the capsizing occurring when the Zim Shenzhen (now the Navarino) passed close by at speed. These reasons arise out of the Plaintiff's motion to add the Zim Shenzhen and owners, Devonshire Corporation, who are presently third parties, as the defendants. While the motion is late, after considering all the circumstances, including those bearing on fairness, common sense and the interest of all concerned that justice be done, it is appropriate that the passing ship, Zim Shenzhen and Devonshire Corporation be added as defendants as set out in the proposed amended statement of claim. I now consider this more detail.
CONSIDERATION
[2] This is an instance in which the Plaintiff had the necessary knowledge and could easily have elected to add Devonshire Corporation, the former owner of the Navarino, a ship which at the time of the accident called was the Zim Shenzhen, as defendants, said to be liable by way of a new cause of action, some 16 months ago. This would have unduly prejudiced no one and would have done justice between the parties.
[3] Counsel, on behalf of the proposed defendants, the ship and her former owner, the latter whom I shall call Devonshire, says they should not be added because limitation has run. While a new cause of action may, in certain circumstances, be introduced after time has run, the focus here is on adding Devonshire as a party after time has run. Generally, subject to other considerations, a late addition of a defendant has been allowed: here I would refer to SOCAN v. Landmark Cinemas of Canada Ltd. (2003), 25 C.P.R. (4th) 496 (T.D.) at 504 where Madam Justice Heneghan disposed of the argument to the contrary in a peremptory manner:
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[27] ... The addition of the new defendants as parties to this action does not deprive them of their limitation defence.. Time and again the Courts have said that the applicability of a limitation defence depends upon the evidence adduced. I refer to Canastrand Industries Ltd., supra, at para. 8; Watt v. Canada (Transport Canada), [1998] F.C.J. No. 49 (QL) (C.A.) [summarized 77 A.C.W:S. (3d) 563], leave to appeal to S.C.C. refused, [1998] S.C.C.A. No. 118 (QL) [noted 231 N.R. 396n]; and Kibale v. Canada (1990), 123 N.R. 153 (F.C.A.).
[28] In the present case, the new defendants are not deprived of reliance on a limitation defence. However, that defence is a matter properly to be considered in the context of the whole action and following the testing of evidence at trial.
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On the basis of the SOCAN decision and the cases referred to there by Madam Justice Heneghan, without more, it would be appropriate to add Devonshire as a defendant. However there are other considerations.
[4] I discount the submission that to allow amendment would delay a trial: the matter is not yet that far advanced.
[5] More pertinent is Devonshire's submission that as a third party it was not initially required to become actively involved and that time having passed, "it is difficult, if not impossible, now for Devonshire to develop the same kind of defence that it would have developed have the amendments been made in a timely manner." (paragraph 20 of Written Representations). Indeed, on 12 June 2003, counsel for the Plaintiff wrote to counsel for Devonshire to say:
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We have taken the position that the cause of the loss can be attributed to a lack of freeing ports and to the fact that there were no temporary battens on the bow; both of which allowed water to collect on deck, thereby effecting the vessel's stability. Interestingly, FMW Towing experienced a water retention problem during a prior voyage in the summer of 2000, some 18 months before the capsize. It is our position that both the lack of freeing ports and the absence of battens at the bow are issues of seaworthiness at the commencement of the charter/voyage and during. The Defendants have simply taken the position that wake wash created by the passing vessel caused the capsize.
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This view, that "The Defendants have simply taken the position that wake wash created by the passing vessel caused the capsize", is an over-simplification, for the allegation that Devonshire's vessel, passing close by, caused the capsize, is set out in detail in the defence of the suppliers of the tug and barge and is then particularized. One might surmise that Devonshire was, nearly a year and a half after the accident, lulled into thinking that nothing would come of their involvement, beyond the third party claim. However the master of the intended defendant ship, Navarino, then the Zim Shenzhen, through the pilot aboard and by way of the American coast guard, was certain to have become aware of the incident at the time.
[6] On 30 May 2002 some four months after the accident, solicitors for the underwriters of the tug, Pacific Ranger II, which had the barge Delta King in tow and which barge capsized when the Zim Shenzhen passed, wrote to Devonshire, in Greece, in effect putting Devonshire on notice. Devonshire's managers responded, on 21 June 2002, rather downplaying the whole matter, pointing out that at that point no one had been sued.
[7] The tug and barge owners and suppliers were sued 24 January 2003. They delivered a third party claim, in rem and in personam, seeking contribution and indemnity, to Devonshire, in Greece, on 13 May 2003 asking whether Devonshire would accept service and suggesting the appointment of Vancouver counsel. In due course, 12 June 2003, Devonshire filed a defence to the third party claim.
[8] All of this is set out as an indication that Devonshire certainly knew about the accident within hours, if not minutes, of their ship passing the tug Pacific Ranger II and the barge Delta King capsizing, and that Devonshire became aware of the seriousness of the incident some 16 months later so the present proceeding certainly came as no surprise. The question is whether Devonshire ought to have been more concerned at an earlier date to gather some evidence, for the American coast guard records clearly indicate that the Zim Shenzhen, now the Navarino, did pass the tug and barge close by, indeed perhaps needlessly close by, just south of Marrowstone Point in a broad reach of Admiralty Inlet, which is part of Puget Sound, leading to the destination of the tug and tow at Tacoma, Washington.
[9] At this point I accept that Devonshire has been prejudiced through not gathering evidence from the Zim Shenzhen and those aboard at an early stage, however that prejudice was, at least in part, brought about by Devonshire not assessing the situation seriously enough when it had the opportunity to investigate.
[10] Turning to the law as to amendment Mr Justice Bowman, in Continental Bank Leasing Corp. v. Canada (1993), 93 D.T.C. 298 (T.C.C.), took a very practical approach, that of assigning all the factors which were present a proper weight, keeping in mind fairness, common sense and the interest of the courts to have justice done. Certainly, in Martel Building Ltd. v. Canada (1998), 229 N.R. 187 at 193 and following, the Federal Court of Appeal made the same point, in the context of an amendment impinging upon an existing defendant, that a late amendment would only be allowed when it would not result in an injustice and when it was being capable of being compensated for by an award in costs. (Martel was overturned by the Supreme Court, [2002] 2 S.C.R. 860, but not on this point.)
[11] Scannar Industries Inc. v. Canada (Minister of National Revenue) (1993), 69 F.T.R. 310 (T.D.), which is a case parallel in reasoning to Mantel (supra) is instructive, although it also deals with amendments between the parties, not with adding parties. In Scannar Mr Justice Denault began with the basic proposition, from Francoeur v. Canada (Minister of National Revenue), [1992] 2 F.C. 333 (T.D.) at 337 that:
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"the general rule is that an amendment should be allowed 'for the purpose of determining the real questions in controversy between the parties' provided that the allowance would not result in an injustice to the other party not capable of being compensated by an award of costs."
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Mr Justice Denault then went on to refer to Continental Bank (supra), posing the issue of amendment on a broad basis, "... is the amendment in the interests of justice?" (page 316). The passage from Continental Bank upon which Mr Justice Denault relied in Scannar, adding to the concept of justice and compensation by award of costs is that:
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The tests mentioned in cases in other courts are of course helpful but other factors should also be emphasized, including the timeliness of the motion to amend or withdraw, the extent to which the proposed amendments would delay the expeditious trial of the matter, the extent to which a position taken originally by one party has led another party to follow a course of action in the litigation which it would be difficult or impossible to alter and whether the amendments sought will facilitate the court's consideration of the true substance of the dispute on its merits. No single factor predominates nor is its presence or absence necessarily determinative. All must be assigned their proper weight in the context of the particular case. Ultimately it boils down to a consideration of simple fairness, common sense and the interest that the courts have that justice be done.
Continental Bank at page 302
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[12] As I have indicated, there is some prejudice to Devonshire in being added as a defendant at this late date and after examinations for discovery have taken place. This prejudice can, to a degree, be compensated for in costs, for it might well be that if Devonshire was overlooked when it came to scheduling examinations for discovery, the re-holding of discoveries, for the benefit of Devonshire, could be subsidized by the Plaintiff who did not add Devonshire as a defendant in a timely manner, if that was reflected in Devonshire missing discoveries. However, the actions of the Plaintiff have, in part, put Devonshire into a situation in which it may be difficult for Devonshire to mount a complete defence. Here, I must also use as a balance the fact that Devonshire knew of the incident at least within hours of it happening, that is by way of the U.S. Coast Guard making inquiry of the pilot aboard the Zim Shenzhen, but seemed not to have taken the matter seriously enough to investigate, or perhaps not even seriously enough to ask for a report from the master and to take steps to preserve documents. But for this oversight or lack of an initial assessment and investigation, on the part of Devonshire, I would be inclined to deny the addition of Devonshire and the ship as defendants. However, the prejudice inflicted upon Devonshire, which now has to collect evidence to deal with the matter, including the American Coast Guard report of the close passing of the tug and barge by the overtaking Zim Shenzhen and the Coast Guard's speed determination of 18 knots over the ground is to a degree, on the part of the Zim Shenzhen and Devonshire, self-inflicted.
[13] While Devonshire may have a good defence, in the time bar issue, a balancing of the factors leads me to the conclusion that, for justice to be done, Devonshire and the vessel, Navarino, ex-Zim Shenzhen must be added as defendants. The Plaintiff may have 45 days within which to file an amended statement of claim, in the form which was attached this motion and to serve the amended statement of claim on Vancouver counsel for Devonshire and, if necessary, on the Navarino.
(Sgd.) "John A. Hargrave"
Prothonotary
Vancouver, British Columbia
17 August 2004
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
MOTION DEALT WITH IN WRITING WITHOUT THE APPEARANCE OF PARTIES
DOCKET: T-156-03
STYLE OF CAUSE: Budget Steel Ltd. v. FMW Towing Ltd. et al.
REASONS FOR ORDER BY: Hargrave P.
DATED: 17 August 2004
WRITTEN REPRESENTATIONS BY:
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A Barry Oland
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FOR PLAINTIFF
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Andrew P Mayer
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FOR DEFENDANTS
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M Clete Purcell
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FOR THIRD PARTIES
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SOLICITORS ON THE RECORD:
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Oland & Co.
Barristers & Solicitors
Vancouver, British Columbia
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FOR PLAINTIFF
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Bernard & Partners
Barristers & Solicitors
Vancouver, British Columbia
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FOR DEFENDANTS
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Bull, Housser & Tupper
Barristers & Solicitors
Vancouver, British Columbia
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FOR THIRD PARTIES
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