Bornstein Seafoods Canada Ltd. v. Hutcheon, docket T-2059-97

                                        

Date: 19971230

Docket: T-2059-97

     ADMIRALTY ACTION IN REM AGAINST

     THE VESSEL "STEADFAST"

     AND IN PERSONAM

BETWEEN:

     BORNSTEIN SEAFOODS CANADA LTD.

                                             Plaintiff

AND:

     FRED HUTCHEON, FRIEDA HUTCHEON,

     KELVIN WILLIAM MARK, LANDMARK FISHING LTD.,

     THE OWNERS AND ALL OTHERS INTERESTED IN THE

     VESSEL "STEADFAST", JOHN DOES 1-20 AND JANE DOES 1-20

                        

                                             Defendants

     REASONS FOR ORDER

GIBSON J.:

BACKGROUND

[1]      By Statement of Claim filed the 19th of September, 1997, the plaintiff claims against the defendants, and each of them,:

(a)      For an Order directing the Defendants to transfer to the Plaintiff the quota which was misappropriated;

(b)      Tracing of the quota and an accounting for all benefits derived from the misappropriation of the quota;

(c)      All damages resulting from the conspiracy and misappropriation of the quota;

(d)      An injunction prohibiting the Defendants, and each of them, from dealing with the quota or any proceeds derived from the quota;

(e)      If the Defendants, or any of them, have merged the quota with any other quota, an injunction prohibiting the Defendants, or any of them, from dealing with such quota;

(f)      A condemnation of the vessel "STEADFAST" or her bail;

(g)      Prejudgment interest at admiralty rates;

(h)      The costs of this action on a solicitor and own client basis, or as ordered by the Court;

(i)      Such further and other relief as to this Honourable Court may seem just.

[2]      The reference to "...quota which was misappropriated" in the first relief and all further references to that quota are references to groundfish fishery quota originally assigned in March of 1997 to the motor vessel "Gypsy Lass", to the licence associated with the "Gypsy Lass" or to her owners. Which of these options was the case is central to this litigation. Apparently "Gypsy Lass" was lost at sea.

[3]      On or about the 26th of May, 1995, the plaintiff acquired the Category T commercial groundfish trawl licence associated with the "Gypsy Lass". The plaintiff pleads that the groundfish quota assigned to the "Gypsy Lass" followed the commercial groundfish trawl licence purchased by the plaintiff. In the result, the plaintiff pleads, the transfer of the quota to the vessel "Steadfast", owned and operated by the defendants Landmark Fishing Ltd. and Kelvin William Mark, constituted a conspiracy and misappropriation of the quota.

[4]      The same day that the Statement of Claim was filed, the plaintiff obtained a warrant arresting the vessel "Steadfast". Also on the same day that the Statement of Claim was filed, the plaintiff obtained an ex parte interim injunction, effective until 12:00 noon on the 30th of September 1997:

...restraining the defendants and each of them, and their respective representatives or substitutes and any person or persons acting under their instructions or on their behalf or for any of them:

a.      from using, transferring or otherwise dealing with any quota which was at any time associated with a certain Category T Licence T25041 or any proceeds of sale or monetary benefit derived from the use of the Licence, and to further restrain any person from using, transferring or dealing with any groundfish quota now associated with "Steadfast".

[5]      By Order dated the 29th of September, 1997 the interim injunction was extended, on consent, to 9:30 a.m. on the 7th of October, 1997.

[6]      By further Order dated the 7th of October, 1997 the interim injunction was "...continued as issued", on consent, for an indefinite term.

[7]      A Statement of Defence and Counterclaim on behalf of the defendants Fred Hutcheon and Frieda Hutcheon (the "Hutcheon defendants") was filed on the 10th of October, 1997. A Statement of Defence on behalf of the defendants Kelvin William Mark, Landmark Fishing Ltd., and the owners and all others interested in the vessel "Steadfast" (the "Mark defendants") was filed on the 21st of October, 1997.

[8]      Apparently following a hearing on the 16th of October, 1997, it was determined that the issue of the in rem jurisdiction of this Court in respect of this action was a priority issue. The Court Registry's abstract of the hearing concludes with the following comments:

All outstanding pleadings and affidavits on the issue of jurisdiction to be filed by October 25, 1997; cross-examination on affidavits completed by November 1, 1997; Argument and Authorities on jurisdictional issue filed by November 8, 1997; hearing date week of November 19, 1997;

[9]      A draft decision reflecting this outcome was to be submitted on behalf of the plaintiff but no draft decision or decision appears on the Court's file. One half day commencing at 9:30 a.m on the 19th of November, 1997 was tentatively reserved on the agenda of the Rota Judge at Vancouver for the hearing of the jurisdictional issue.

[10]      The hearing of the jurisdictional issue as a separate and discrete matter was effectively preempted, without leave of the Court, by the filing on the 10th of November, 1997 of a motion on behalf of the Mark defendants seeking the following relief:

(1)      an order pursuant to Rule 469(5) rescinding and setting aside the injunction granted by the Honourable Mr. Justice Richard herein pursuant to Rule 469 on the 19th day of September 1997, restraining the Defendants and each of them and their respective representatives or substitutes and any person or persons acting under their instructions or on their behalf or for them or any of them from using, transferring or otherwise dealing with any quota which was at any time associated with a certain Category T licence T 25041 or any proceeds of sale or monetary benefit derived from the use of the Licence, and to further restrain any person from using, transferring or dealing with any groundfish quota now associated with "Steadfast";

(2)      an order pursuant to Rule 469(5) rescinding and setting aside the Order of the Honourable Mr. Justice Rouleau on the 7th day of October, 1997, continuing on consent the injunction referred to in paragraph (a) [11] of this Notice of Motion;

(3)      an order pursuant to Rules 1003(2)(b) and 1006(1) setting aside the warrant to arrest the ship "Steadfast" and releasing the ship "Steadfast" from arrest;

(4)      an order awarding solicitor and client costs to the Applicants [Mark defendants].

[11]      At the eventual hearing of the Mark defendants' Motion, counsel for the applicants further requested an Order directing a reference to determine the damages of the applicants by reason of the injunction granted and the arrest of the "Steadfast", the affiant on behalf of the plaintiff, Myer Jay Bornstein, in his affidavit filed in support of the application for the injunction as President of the plaintiff, having given the following undertaking:

23.      Should the Court be prepared to grant an injunction restraining the Defendants and all other persons from dealing with the Licence quota, the "STEADFAST" 's quota, or any proceeds from the purchase or sale of such quota, Bornstein [the plaintiff] undertakes to pay any damages which may result as a result of the granting of this injunction.

[12]      The motion on behalf of the Mark defendants came on for hearing before me on the regular motions day at Vancouver on the 17th of November, 1997. At that time, I expressed concern with respect to the interpretation of the Order of the 7th of October, 1997 continuing on consent for an indefinite term, the injunction originally issued ex parte on the 19th of September, 1997. Counsel for the plaintiff, while not objecting to the Court proceeding with the Mark defendants' motion at a later date, expressed concern that he was not than ready to proceed with the motion. In the result, the Mark defendants' motion was set over for hearing on the afternoon of Friday, the 21st of November, 1997 with a schedule fixed to ensure that the parties would be ready to argue the motion at that time.

[13]      During an adjournment of the consideration of the Mark defendants' motion on the 17th of November, 1997, counsel contacted Justice Rouleau in Toronto, by teleconference, with a view to clarifying the interpretation of his Order of the 7th of October. Immediately following the teleconference, Justice Rouleau issued an Order in the following terms:

(1)      The time for reconsidering the terms of the Order of October 7, 1997 is extended to November 17, 1997;

(2)      The Order of October 7, 1997 extended the interim injunction made by Richard J. on September 19, 1997 without prejudice to the rights of any of the parties to the action;

(3)      The injunction made on September 19, 1997 and extended on October 7, 1997 may be set aside by the Defendants on any ground which is available to the Defendants on 2 days notice as set out in the Order of Richard J.;

(4)      The onus of establishing that an interlocutory injunction should be granted remains on the Plaintiff.

[14]      Following almost four hours of argument on the Mark defendants' motion on the afternoon of the 21st of November, I reserved my decision to provide counsel with additional time to put in place, by agreement, an arrangement that would lift the injunction against use of the groundfish quota in question and result in a release of the "Steadfast" from arrest. I indicated that I would be available for a teleconference between Vancouver and Ottawa in the early part of the following week and that I would not long delay in issuing my Order. A teleconference took place between Vancouver and Ottawa on Tuesday, the 25th of November. During that conference, counsel indicated progress towards an interim solution but could go no further.

[15]      In the result, I advised counsel that I would issue my Order that day and advised them of the substance of my Order. My Order issued the 25th of November is in the following terms:

(1)      subject to further order of this Court, the injunction granted by the Honourable Mr. Justice Richard herein pursuant to Rule 469 on the 19th day of September, 1997, restraining the Defendants and each of them and their respective representatives or substitutes and any person or persons acting under their instructions or on their behalf or for them or any of them from using, transferring or otherwise dealing with any quota which was at any time associated with a certain Category T licence T 25041 or any proceeds of sale or monetary benefit derived from the use of the Licence, and to further restrain any person from using, transferring or dealing with any groundfish quota now associated with "Steadfast" is rescinded and set aside;

(2)      the Order of the Honourable Mr. Justice Rouleau on the 7th day of October, 1997, as clarified by further order of the Honourable Mr. Justice Rouleau on the 17th day of November, 1997, continuing on consent the injunction referred to in paragraph (1) of this Order is rescinded and set aside;

(3)      the warrant to arrest the ship "Steadfast" filed the 19th day of September, 1997 is set aside and the ship "Steadfast" is released from arrest; and

(4)      the Defendants Kelvin William Mark and Landmark Fishing Ltd., and the Owners and All Others Interested in the Vessel "Steadfast" are entitled to costs of this application, as against the Plaintiff, in any event of the cause, and there is no order as to costs as between the Plaintiff and the Defendants Fred Hutcheon and Frieda Hutcheon.

(5)      Reasons will follow.

The following are my reasons for the foregoing order.

THE INJUNCTION

[16]      In RJR - MacDonald Inc. v Canada (Attorney General)¹ the Supreme Court adopted the test for a preliminary stay or an interlocutory injunction laid down in Manitoba (Attorney General) v Metropolitan Stores (MTS) Ltd.² Justices Sopinka and Cory wrote on behalf of the Court at page 334:

Metropolitan Stores adopted a three-stage test for courts to apply when considering an application for either a stay or an interlocutory injunction. First, a preliminary assessment must be made of the merits of the case to ensure that there is a serious question to be tried. Secondly, it must be determined whether the applicant would suffer irreparable harm if the application were refused. Finally, an assessment must be made as to which of the parties would suffer greater harm from the granting or refusal of the remedy pending a decision on the merits.

[17]      Counsel for the plaintiff urged that, on the material before me, it was apparent that this action involves a serious question to be tried. Counsel for the Mark defendants did not dispute this assertion. I am in agreement that the material before me disclosed a serious issue to be tried in this action.

[18]      With respect to the "irreparable harm" element of the three-stage test, Justices Sopinka and Cory wrote at page 341 of the RJR - MacDonald decision:

At this stage the only issue to be decided is whether a refusal to grant relief [in the form of an interlocutory injunction or, on the application before me, by granting the application to lift the injunction] could so adversely affect the applicants' [here the plaintiff's] own interests that the harm could not be remedied if the eventual decision on the merits does not accord with the result of the interlocutory application.

"Irreparable" refers to the nature of the harm suffered rather than its magnitude. It is harm which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other. Examples of the former include instances where one party will be put out of business by the court's decision...; where one party will suffer permanent market loss or irrevocable damage to its business reputation ...; or where a permanent loss of natural resources will be the result when a challenged activity is not enjoined... . The fact that one party may be impecunious does not automatically determine the application in favour of the other party who will not ultimately be able to collect damages, although it may be a relevant consideration... .[citations omitted]

[19]      In this matter, I conclude that the only evidence as to irreparable harm to the plaintiff is contained in three paragraphs of the affidavit of Myer Jay Bornstein, the President of the plaintiff. Mr. Bornstein attests:

...

19.      As a result of the transfer of quota from the Licence, the quota from the Licence will have merged with other quota of the "STEADFAST".... Any quota of a class specified which is added merges and becomes indistinguishable from other quota of such class. Any further transfer of quota from "STEADFAST" will make it increasingly difficult if not impossible to trace the quota associated with the Licence.

20.      Without the quota from the Licence, Bornstein Seafoods Canada Ltd. has been forced to borrow quota from other operators in order to continue its operations and to avoid disruption of other fishing operations. Without the return of the quota, production of vessels and production facilities will be disrupted.

21.      Further, much of the quota for the Licence was for species in areas which will be difficult to replace if sold or otherwise disposed of by Landmark Fishing Ltd.

....

[20]      The evidence speaks of increasing difficulty and perhaps impossibility of tracing of the quota. It stops short of categorically alleging impossibility of tracing. It fails to speak directly to the damage resulting from the difficulty or impossibility of tracing. The evidence speaks of the plaintiff being forced to borrow quota to "continue its operations" and to "avoid disruption" of other fishing operations. It speaks of "disruption" of production of vessels and production facilities. Finally, it speaks of "difficulty" in replacement of the quota. Before me, counsel for the plaintiff put forward additional concerns respecting irreparable harm. Counsel's representations, of course, are not evidence.

[21]      On the basis of the evidence before me, whether or not stronger evidence might have been provided, I could find no basis on which to conclude that the plaintiff would suffer harm that, by its nature, would be irreparable as described in the quotations above from RJR - MacDonald, if its injunction were lifted.

[22]      I turn to the third element of the test from Metropolitan Stores described in a heading in the reasons of Justices Sopinka and Cory inRJR - MacDonald as "The Balance of Inconvenience and Public Interest Considerations." Immediately following the foregoing heading, Justices Sopinka and Cory wrote:

The third test to be applied in an application for interlocutory relief was described by Beetz J. in Metropolitan Stores at p. 129 as: "a determination of which of the two parties will suffer the greater harm from the granting or refusal of an interlocutory injunction, pending a decision on the merits".

[23]      In the affidavit of the defendant Kelvin William Mark filed in this matter, Mr. Mark attests:

.....

19.      Based upon revenues obtained from Landmark Fishing Ltd.'s recent operations, I estimate that Landmark Fishing Ltd. is losing between $150,000 to $200,000 of gross revenue per month while the Steadfast remains under arrest and the injunction referred to in paragraph 2 effectively prevents any use or dealing with the groundfish quota now attached to the vessel.

20.      If the injunction referred to in paragraph 2 is not dissolved or varied, and the vessel "Steadfast" is not released from arrest, it is likely that Landmark Fishing Ltd. will be unable to continue operations and will become insolvent in the near future.

[24]      In contrasting the evidence of the defendant Kelvin William Mark with that of Myer Jay Bornstein on behalf of the plaintiff, I could only conclude that the balance of convenience or inconvenience favoured the Mark defendants. I placed little weight on Mr. Mark's evidence regarding lost gross revenue. In the absence of equivalent cost figures, gross revenue figures, while impressive, appeared to me to be essentially meaningless. However, Mr. Mark's evidence of inability to continue operations and of impending insolvency contrast dramatically with Mr. Bornstein's evidence of increasing difficulty and disruption.

[25]      Based upon the foregoing, and bearing in mind Mr. Justice Rouleau's Order of the 17th of November to the effect that "[T]he onus of establishing that an interlocutory injunction should be granted remains on the Plaintiff", I concluded that the plaintiff had failed to discharge its onus in this regard. In the result, by paragraphs (1) and (2) of my Order of the 25th of November, I rescinded and set aside the injunction earlier granted and continued.

THE WARRANT OF ARREST

The Maritime Jurisdiction of this Court

[26]      Subsection 22(1) and the relevant portions of subsection 22(2) of the Federal Court Act³ (the "Act") read as follows:

22. (1) The Trial Division has concurrent original jurisdiction, between subject and subject as well as otherwise, in all cases in which a claim for relief is made or a remedy is sought under or by virtue of Canadian maritime law or any other law of Canada relating to any matter coming within the class of subject of navigation and shipping, except to the extent that jurisdiction has been otherwise specially assigned. (2) Without limiting the generality of subsection (1), it is hereby declared for greater certainty that the Trial Division has jurisdiction with respect to any one or more of the following: .... (d) any claim for damage or for loss of life or personal injury caused by a ship either in collision or otherwise;

22. (1) La Section de première instance a compétence concurrente, en première instance, dans les cas " opposant notamment des administrés " où une demande de réparation ou un recours est présenté en vertu du droit maritime canadien ou d'une loi fédérale concernant la navigation ou la marine marchande, sauf attribution expresse contraire de cette compétence. (2) Il demeure entendu que, sans préjudice de la portée générale du paragraphe (1), la Section de première instance a compétence dans les cas suivants_: ... d) une demande d'indemnisation pour décès, dommages corporels ou matériels causés par un navire, notamment par collision;

The expression "Canadian maritime law" is defined in section 2 of the Act in the following terms:

"Canadian maritime law" means the law that was administered by the Exchequer Court of Canada on its Admiralty side by virtue of the Admiralty Act, chapter A-1 of the Revised Statutes of Canada, 1970, or any other statute, or that would have been so administered if that Court had had, on its Admiralty side, unlimited jurisdiction in relation to maritime and admiralty matters, as that law has been altered by its Act or any other Act of Parliament;	"droit maritime canadien" Droit " compte tenu des modifications y apportées par la présente loi ou par toute autre loi fédérale " dont l'application relevait de la Cour de l'Échiquier du Canada, en sa qualité de juridiction de l'Amirauté, aux termes de la Loi sur l'Amirauté, chapitre A-1 des Statuts revisés du Canada de 1970, ou de toute autre loi, ou qui en aurait relevé si ce tribunal avait eu, en cette qualité, compétence illimitée en matière maritime et d'amirauté.
Finally, section 42 of the Act provides:
42. Canadian maritime law as it was immediately before June 1, 1971 continues subject to such changes therein as may be made by this Act or any other Act of Parliament.	42. Le droit maritime canadien en vigueur au 31 mai 1971 continue à s'appliquer, sous réserve des modifications éventuelles par la présente loi ou toute autre loi.

[27]      Counsel before me were in general agreement that the leading authority on the interpretation of "Canadian maritime law" is ITO - International Terminal Operators Ltd. v Miida Electronics Inc. et al.⁴ In that decision, Mr. Justice McIntyre, by reference to Quebec NorthShore Paper Co. v Canadian Pacific Ltd.⁵, and McNamara Construction (Western) Ltd. v the Queen⁶, at page 766, described the essential requirements to support a finding of jurisdiction in the Federal Court. He described them in the following terms:

1.      There must be a statutory grant of jurisdiction by the federal Parliament.

2.      There must be an existing body of federal law which is essential to the disposition of the case and which nourishes the statutory grant of jurisdiction.

3.      The law on which the case is based must be "a law of Canada" as the phrase is used in s. 101 of the Constitution Act 1867.

Mr. Justice McIntyre continued at page 769:

Canadian maritime law, as defined in s. 2 of the Federal Court Act, can be separated into two categories. It is the law that:

(1)      was administered by the Exchequer Court of Canada on its Admiralty side by virtue of the Admiralty Act or any other statute; or

(2)      would have been so administered if that court had had on its Admiralty side unlimited jurisdiction in relation to maritime and admiralty matters.

Once again, Mr. Justice McIntyre continued at page 771:

I would be of the opinion then that the term 'Canadian maritime law' includes all that body of law which was administered in England by the High Court on its Admiralty side in 1934 as such law may, from time to time, have been amended by the federal Parliament, and as it has developed through judicial precedent to date.

Finally, Mr. Justice McIntyre continued at page 774:

I would agree that the historical jurisdiction of the Admiralty courts is significant in determining whether a particular claim is a maritime matter within the definition of Canadian maritime law in s.2 of the Federal Court Act. I do not go so far, however, as to restrict the definition of maritime and admiralty matters only to those claims which fit within such historical limits. An historical approach may serve to enlighten, but it must not be permitted to confine. In my view the second part of the s.2 definition of Canadian maritime law was adopted for the purpose of assuring that Canadian maritime law would include an unlimited jurisdiction in relation to maritime and admiralty matters. As such, it constitutes a statutory recognition of Canadian maritime law as a body of federal law dealing with all claims in respect of maritime and admiralty matters. Those matters are not to be considered as having been frozen by The Admiralty Act, 1934. On the contrary, the words "maritime" and "admiralty" should be interpreted within the modern context of commerce and shipping. In reality, the ambit of Canadian maritime law is limited only by the constitutional division of powers in the Constitution Act, 1867. I am aware in arriving at this conclusion that a court, in determining whether or not any particular case involves a maritime or admiralty matter, must avoid encroachment on what is in "pith and substance" a matter of local concern involving property and civil rights or any other matter which is in essence within exclusive provincial jurisdiction under s. 92 of the Constitution Act, 1867. It is important,therefore, to establish that the subject-matter under consideration in any case is so integrally connected to maritime matters as to be legitimate Canadian maritime law within federal legislative competence. [underlining added by me for emphasis]

[28]      Without focussing in detail on the first two "essential requirements" to support a finding of jurisdiction in the Federal Court quoted above from ITO, counsel for the plaintiff focussed directly on the third essential requirement and in particular on the highlighted words in the final quotation from ITO above. He urged that the subject-matter of this action "... is so integrally connected to maritime matters as to be legitimate Canadian maritime law within federal legislative competence" which therefore supports the in rem jurisdiction of this Court which in turn supports the arrest of the "Steadfast". Plaintiff's counsel's written submissions on the motion that was before me provided in part:

The nature of the claim against Mark and Landmark is as follows:

(a)      Mark and Landmark conspired with the Hutcheons to transfer quota associated with the licence to the "STEADFAST" knowing that rights associated with the licence had previously been purchased by the Plaintiff from the Hutcheons;

(b)      Mark and Landmark then used the "STEADFAST" to fish the quota causing loss and damage to the Plaintiff.

[29]      The licence referred to in the quoted paragraph (a) is the licence that was formerly associated with the fishing vessel "Gypsy Lass". According to the Statement of Claim, the licence was sold to the plaintiff by agreement dated the 26th of May, 1995, significantly before the groundfish quota in question was issued to the Hutcheons. On the basis of the foregoing, counsel for the plaintiff argued that the plaintiff's claim is framed as a "maritime tort" and such torts are part of "Canadian maritime law" by virtue of subsection 22(1) and paragraph 22(2)(d) of the Federal Court Act, quoted earlier in these reasons.

[30]      Despite the able argument of counsel for the plaintiff, I could not conclude that the subject-matter of this action is so integrally connected to maritime matters as to be legitimate Canadian maritime law. That is not to say that the subject-matter of this action might not well be within federal legislative competence, relating as it does to groundfish quota and the entitlement thereto, which in turn relates to the federal head of jurisdiction "seacoast and inland fisheries". However, on the facts of this matter, quota entitlement turns substantially on the interpretation of the contract referred to earlier between the plaintiff and the Hutcheon defendants as well as on laws, practices and procedures related to Canada's westcoast groundfish fishery.

[31]      In summary then, I concluded that, since the subject-matter of this action does not fall within the jurisdiction of this Court as Canadian maritime law or any other law of Canada relating to any matter coming within the class of subject of nagivation and shipping, the in rem action is unfounded. Accordingly, the warrant for the arrest of the "Steadfast" issued pursuant to Rule 1003 of the Federal Court Rules could not stand.

THE AFFIDAVIT TO LEAD WARRANT

[32]      Federal Court rule 1003(2) provides that an Affidavit to Lead Warrant shall contain a statement showing, among other things "the nature of the claim". The Affidavit to Lead Warrant filed in this action to support the arrest of the "Steadfast" provides as follows in respect of the nature of the claim:

The nature of the claim which is the subject of the action against the ship named herein is described in the Statement of Claim attached hereto as Exhibit "A".

Counsel for the Mark defendants argued before me that the arrest of a vessel is a serious step which can give rise to severe losses to the vessel owner, and in such circumstances, the affidavit to lead warrant should comply strictly with the requirements of the Federal Court Rules. He referred me to Kiku Fisheries Ltd. v the "Limanskiy"⁷ where prothonotary Hargrave examined in some detail the question of whether or not an Affidavit to Lead Warrant was so defective as to warrant being set aside. At page 17 of his reasons, he wrote:

In Margem Chartering Inc. v. The "Bocsa", an unreported decision of March 5, 1997, in action T-2418-96, I wrote that a plaintiff need not set out the defendant's case in the affidavit to lead warrant, but did take the deponent of an affidavit to lead warrant to task for seeking to arrest a ship when there was not privity of contract between the plaintiff and the owner, such constituting an abuse of process. However, I went on to point out that as the test of abuse of process carried a high onus, a court would try to salvage a warrant, just as a court would give the benefit of any doubt to plaintiffs so they might not be deprived of a day in court.

[underlining added by me for emphasis]

Prothonotary Hargrave continued at page 20:

I do not see the actual shortcomings of the Affidavit to Lead Warrant to be, even cumulatively, fatal. Rather they are the product of a hurried arrest. While it is essential that lawyers involved in the arrest procedure attach great importance to affidavits to lead warrants, errors in such affidavits have always, among members of the BC bar, been minimal. In this instance there is neither any indication that the errors in the affidavit were deliberate nor that if the errors had not crept in that the arrest procedure would have affected the Plaintiff's substantive rights in any way. In the result the warrant is not [be] set aside.

[33]      In light of my finding regarding the lack of jurisdiction of this Court to issue the arrest warrant against the "Steadfast", it was unnecessary that I adjudicate the issue regarding the alleged deficiency in the Affidavit to Lead Warrant. I decline to do so. That being said, were I required to do so, though I regard the Affidavit to Lead Warrant in this matter as indeed being defective, I would have concluded in the same manner as Prothonotary Hargrave in Kiku Fisheries.

A REFERENCE TO DETERMINE THE DAMAGES OF THE MARK DEFENDANTS

[34]      As indicated earlier in these reasons, though not reflected in the Notice of Motion, counsel for the Mark defendants requested an order directing a reference to determine his clients' damages by reason of the injunction granted in this matter and the arrest of the "Steadfast". I declined to order a reference. Despite the fact that I set aside the injunction and the warrant to arrest, I simply was not satisfied on the evidence that was before me that the Mark defendants are entitled to damages, and if they are, on what basis. The injunction was first issued, on an ex parte basis, on the 19th of September, 1997. It was continued or extended on consent on the 29th of September to the 7th of October. It was further continued on consent on the 7th of October for an indefinite term.

[35]      The warrant to arrest "Steadfast" was issued on the 19th of September, 1997.

[36]      It was not until the 10th of November that this motion seeking to have the injunction and the arrest of the "Steadfast" set aside was filed. The evidence before me simply failed to satisfy me that the Mark defendants acted in an expeditious manner to seek relief from the injunction and the arrest and thus to mitigate any damages that might follow as a result of the conclusions I reached. To the contrary, on two occasions they consented to the continuation of the injunction. In the circumstances, it remains for the Mark defendants to satisfy this Court that they are entitled to damages before a reference to determine the quantum of damages, if any, is justified.

COSTS

[37]      In the Notice of Motion that was before me, the Mark defendants sought costs of their application on a solicitor and client basis. In argument before me, counsel for the Mark defendants did not pursue the application for solicitor and client costs but rather requested costs as if their motion were two separate motions before me and the Mark defendants were entitled to costs on both such motions. Once again, for reasons related to the way in which this matter has proceeded before the Court to this point in time, I declined the request for a special order as to costs. I ordered costs to the Mark defendants as against the plaintiff, in any event of the cause, but on no special basis. I made no order as to costs as between the plaintiff and the Hutcheon defendants.

                             ______________________________

                                  Judge

Ottawa, Ontario

December 30, 1997

__________________

     ¹      [1994] 1 S.C.R. 311

     ²      [1987] 1 S.C.R. 110

     ³      R.S.C. 1985, c. F-7 (as amended)

     ⁴      [1986] 1 S.C.R. 752

     ⁵      [1977] 2 S.C.R. 1054">[1977] 2 S.C.R. 1054

     ⁶      [1977] 2 S.C.R. 654">[1977] 2 S.C.R. 654

     ⁷      15 September 1997, Court file T-1666-97 (unreported)(F.C.T.D.)