Date: 20020327
Docket: T-447-01
Neutral Citation: 2002 FCT 353
Ottawa, Ontario, this 27st day of March 2002
PRESENT: THE HONOURABLE MR. JUSTICE PELLETIER
BETWEEN:
GEARBULK POOL LIMITED,
-and-
THULELAND SHIPPING PTE LTD.
Plaintiffs
- and -
SCAC TRANSPORT CANADA INC.,
-and-
SDV LOGISTICS (CANADA) INC.
Defendants
REASONS FOR ORDER AND ORDER
[1] This is an appeal from a decision of Prothonotary Morneau with respect to a determination of a point of law under Rule 220 of the Federal Court Rules, 1998, SOR/98-106. The materials in this motion were filed in the English language and one of the parties argued in that language. Consequently these reasons will be released initially in English.
[2] The determination proceeded under an Agreed Statement of Facts. In the course of the argument before the Prothonotary, counsel for the defendant sought leave to introduce an additional document which was not referred to in the Statement of facts. Leave was refused and the first leg of this appeal seeks to have this document put before the court in disposing of the appeal. It was suggested that the court should allow the document into evidence because its relevance only became apparent after Gearbulk argued that the claim for freight did not arise out of the same set of facts as the Cargo Action (see below). The letter purports to show that the only reason the remaining transformers were not loaded was because of the fact that the first crate fell. When parties agree to proceed by Agreed Statement of Facts, they should not be surprised when they are held to those facts. The court has no way of knowing what compromises were made to arrive at the Agreed Statement of Facts which is put before the court. To allow one party to introduce new facts outside the agreed upon facts is unfair. In this particular case, the issue which is said to justify the admission of the additional facts is one which should have been anticipated by the applicant. Leave will not be given to introduce the document in question into the record.
[3] The second leg of the appeal deals with the effect to be given to a Mutual Release given by parties in another action which arises out of the same factual nexus. The Plaintiff Gearbulk entered in a voyage note agreement with the defendants by which 10 transformers were to be shipped from Sorel Quebec to Antwerp Belgium aboard the vessel Thuleland. The transformers were delivered to the port crated and ready for loading but as the first of the ten was being brought aboard, it fell to the ground and was damaged. It was subsequently determined that the other 9 crates were identical to the first, leading to the conclusion that the crates were not suitable for loading. The Thuleland sailed without the transformers.
[4] The owners of the damaged transformer brought an action seeking damages for the damage to their property (the Cargo Action). The defendants included the plaintiff and defendants in this action, as well as the stevedoring company. In the course of the Cargo Action a counterclaim and cross claim were brought seeking to recover the amounts paid to the stevedoring company for cleanup of the fluid which escaped when the transformer was damaged. The Cargo Action was settled by means of a Mutual Release signed by all the parties to the action.
The material portions of the release are as follows:
The Plaintiffs, on their own behalf as well as on behalf of their servants, agents, assigns, and underwriters, through their undersigned solicitors, hereby acknowledges to have received the sum of SEVENTY-FIVE THOUSAND DOLLARS (Canadian currency) (CA $75,000.00) from the Defendant SCAC Transport Canada Inc. acting on its own behalf as well as on behalf of its employees, servants, agents and underwriters, in full and final settlement in principal, interest and costs of all manner of actions, causes of actions, claims and demands with respect to any damage occasioned to a shipment of electrical transformers belonging to the Plaintiffs (the "Cargo"), as set out in the Statement of Claim filed with respect to this action.
In consideration of the said payment, the Plaintiffs through their undersigned solicitors agree to pay to Defendant Gearbulk Pool Ltd., from the said proceeds, and Defendant Gearbulk Pool Ltd. agrees to accept the amount of TEN THOUSAND THREE HUNDRED AND ELEVEN DOLLARS AND FORTY-EIGHT CENTS (Canadian currency) (CA $10,311.48) in full and final payment of the amount paid by Gearbulk Pool Ltd. to Quebec Stevedoring Co. Ltd. with respect to any and all invoices relating to the damage to and caused by the said Cargo, as more fully set out in the proceedings, and in particular the relevant Third Party action.
In consideration of the foregoing, the Parties on their own behalf and on behalf of their employees, servants agents, and underwriters, and on behalf of the vessel "THULELAND", her master, officers, owners, charterers, and underwriters on the other part, do give to each other, and one another, a full and final release and discharge from all manner of actions, claims, demands, suits, and proceedings in principal, interest and costs of any nature whatsoever and for all legal purposes which the parties may have against each other, or as between themselves, with respect to any damage to the Cargo as set out in the Statement of Claim and in the Counterclaim and Third Party action in relation thereto and as set out above.
[5] Subsequent to the settlement of the Cargo Action, Gearbulk brought this action on the voyage agreement note seeking damages for lost freight (the Freight Action). The defendants raised the Mutual Release as a defence to the action. Given that the amount of the claim was under $50,000, the Freight Action proceeded under the simplified procedure rules. At the pre-trial conference, the plaintiff moved on behalf of both parties to have the question of the effect of the release decided as a question of law. The parties put before the court an Agreed Statement of Facts which is Annex A to these reasons. On the basis of that Agreed Statement of Facts and the arguments made before him, the Prothonotary decided that the Mutual Release was not a bar to the plaintiff's claim and ordered the matter on to trial. An appeal is now taken from that decision.
[6] In the course of argument, it was asserted that Gearbulk had cross-claimed against the defendants for the cost of the clean up of the dock in the Cargo Action. The basis of the defendant's argument was that in cross claiming, Gearbulk was bound to bring forward all of its claims against the defendants. This principle was referred to by Laing J. in Ostapowich v. Bank of Montreal (1998), 165 Sask. R. 231 at p. 236 where that learned and experienced judge quoted from Henderson v. Henderson (1843), 3 Hare 100, as cited in Greenhalgh v. Mallard, [1947] 2 All E.R. 255:
I believe I state the rule of the court correctly, when I say, that where a given matter becomes the subject of litigation in, and of adjudication by, a court of competent jurisdiction, the court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation and which the parties, exercising reasonable diligence, might have brought forward at the time.
[7] Laing J. went on to find that the same principle applied to settlements so that once a matter was "fully settled", it was not open to the parties to unearth fresh causes of action which undo the finality of the settlement. I would bring to this one qualification. It is not unusual for parties to commercial transaction to have a variety of contracts between them. Each of those contracts and the underlying transactions can give rise to claims, which may or may not impinge on the other transactions. Even within a single transaction, one event may give rise various recourses, some of which may implicate strangers to the contract who are nonetheless parties to the transaction. In such a multi party, multi transaction, multi recourse universe, I would not assume that a release given with respect to one event covered all possible claims between the two parties, unless the parties clearly indicated that this was their intention. All this to say that I would qualify the principle enunciated by Laing J. by suggesting that before a release can be extended to all possible claims between two parties there must be some evidence that it was the parties intention to achieve that result. This is not to encourage artfully drawn releases but to require those who hope to drive a benefit from such documents to clearly define the advantage they seek.
[8] The language of the Mutual release executed between the parties to the Cargo Action is very specific. In the first instance, the owners of the cargo, the plaintiffs in the Cargo Action, acknowledged receipt of a sum of money "in full and final settlement in principal, interest and costs of all manner of actions, causes of actions, claims and demands with respect to any damage occasioned to a shipment of electrical transformers belonging to the plaintiffs ("the cargo") as set out in the Statement of Claim filed with respect to this action." Subsequently, all of the parties to the action did " ... give to each other, and one another, a full and final release and discharge from all manner of actions, claims, demands, suits and proceedings in principal, interest and costs of any nature whatsoever and for all legal purposes which the parties may have against each other, or as between themselves, with respect to any damage to the cargo as set out in the Statement of Claim and in the Counterclaim and Third party action in relation thereto and as set out above." (emphasis added).
[9] A Mutual Release, like any other document, must be construed according to its terms. In this case, the express terms of the document limit the releases granted to claims arising out of the damage to the cargo. The action was commenced by the owners of the cargo against all who had anything to do with the cargo. This had nothing to do with the voyage note agreement between Gearbulk and the defendants. The only rationale for expanding the scope of the release is the argument that having commenced proceedings against the defendants, Gearbulk was bound to advance all its claims at once. The question then becomes whether Gearbulk commenced proceedings against the defendants. It is said that they did by means of a cross claim for the cost of clean-up. Unfortunately, the Agreed Statement of Facts does not disclose this, and the pleadings in the Cargo Action are not before the court. In the absence of evidence that there was a claim between Gearbulk and the defendants, the court is not in a position to hold that the Mutual Release acts as a release of claims which Gearbulk could have but did not advance against the Defendants.
[10] As can be seen, there is a significant possibility that the record before the prothonotary was defective. Is it possible to set aside a determination made upon a defective factual record? The disposition of a question set down for determination as a question of law is binding upon the parties in the action unless varied upon appeal. See Rule 220(3) of the Federal Court Rules, 1998. As a result the choices before the court are to dismiss the appeal, thus confirming the decision of the prothonotary, or to reverse the prothonotary and to find that the Mutual Release is a bar to the present action. The decision to proceed by way of setting a question down for determination of a point of law is not appealed, and is beyond the scope of the present appeal. The problem of the inadequate record is one which arises from the Agreed Statement of Facts which the parties put before the court. If there is an injustice in proceeding on the basis of that record, it is an injustice created by the parties who had ample opportunity to put the complete record before the court.
[11] In view of the fact that the prothonotary's decision is not discretionary but is a question of law, there is no basis for a claim of judicial deference to the prothonotary's decision on a question of law. In my view, the standard of review is correctness. I find that on the basis of the record before him, the Prothonotary's decision is correct and not subject to review.
ORDER
The motion is dismissed with costs.
"J.D. Denis Pelletier"
Judge
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