Between:
BELGO NINEIRA COMERCIAL EXPORTADORA S.A.
CHINA STEEL CORPORATION
ARBED INTERNATIONAL TRADING PTE. LTD.,
Plaintiff,
- and -
HADLEY SHIPPING CO. LTD.
THE SHIP "CERINTHUS", HER OWNERS AND ALL
OTHERS INTERESTED IN HER AND THE SHIPS
"CLARE", "CLYMEME" AND "CONTINGA", THEIR
OWNERS AND ALL OTHERS INTERESTED IN THEM,
Defendants.
REASONS FOR ORDER
JOHN A. HARGRAVE
PROTHONOTARY
BACKGROUND
In this action the Statement of Claim, which is against a wrong-doing vessel and three sister ships, was renewed on two occasions, for the Plaintiff had not located any of the named vessels and thus was not able to serve the Statement of Claim. The extension orders, ex parte in each of the two instances, were without prejudice to an owner applying to set them aside, in case one or more of the ships had been within the jurisdiction since the commencement of the action in September of 1994. The Clymene (referred to in error in the pleadings as the Clymeme) had been within the jurisdiction, at the port of Vancouver: there was a reasonable opportunity to serve the vessel over a period of about 4 weeks.
In January of this year, or possibly a little earlier, the Plaintiff apparently threatened to arrest the Clymene when next she came into this jurisdiction. In response, counsel for the owner of the Clymene pointed out that the vessel had been within the jurisdiction and indeed forwarded evidence to that effect. Undeterred, counsel for the Plaintiff threatened to arrest the vessel in order to obtain security, which was given by the Britannia Steam Ship Insurance Association Limited, through their local agents, in the amount of $165,000 (US), specifically without prejudice to any rights that they might have, given that the Clymene had been within the jurisdiction.
THE MOTION
This brings us to the present motion, to set aside the time extensions, to strike out the Statement of Claim as against the sister ship Clymene,1 to have the letter of undertaking returned and to obtain solicitor/client costs. Counsel were able to agree that the extension of time for the service of the Clymene be set aside and that the letter of undertaking be returned. At issue remain the striking out of the Statement of Claim as against the Clymene and an appropriate award of costs.
Counsel for the Defendant looks upon the Application as one to strike out for want of a cause of action, particularly being a lack of an in rem jurisdiction against the Clymene and as a proceeding to rectify an abuse of process.
Counsel for the Plaintiffs expresses some concern that to remove the Clymene from the proceeding might in some way prejudice the Plaintiffs. He suggests there is no particular harm in leaving the Statement of Claim as it presently stands, for when it was originally filed there was a proper cause of action against the Clymene and that I should look no further than the Statement of Claim, accept it at face value, assume it to be true and find no reason to strike out any portion of it.
The Defendant owner of the Clymene has provided affidavit material to show the Clymene was in the port of Vancouver for some weeks, shortly after the Statement of Claim was filed here in Vancouver and also to show that counsel for the Plaintiff was advised of this before security was given in the face of a threat to arrest the ship. To the extent that affidavit material goes to striking out for lack of a reasonable cause of action, in the context of want of jurisdiction, I may consider it2.
ANALYSIS
To begin, a Plaintiff need not watch for and arrest the first sister ship coming over the horizon and into a port within the jurisdiction. Thus a Statement of Claim may be renewed, notwithstanding a sister ship has been within the jurisdiction, as against those ships that have not come into the jurisdiction: see for example Eleconor S.A. v. The "Soren Toubro" (1996) 114 F.T.R. 134 and 3 F.C. 422. I must now deal with the issue of what becomes of the reference to the sister ship Clymene in the present style of cause and in the Statement of Claim. Such references may be an embarrassment to an owner, for a number of reasons, including as a cloud on title from the point of view of a mortgagee or in the event of a sale of the ship.
The Supreme Court in England has developed a procedure to deal with this problem of renewal of a writ that has not been served on a vessel. It is touched on briefly by Mr. Justice Brandon, as he then was, in The "Berny" [1979] 1 Q.B. 80 at 102. The renewal procedure, on a refusal to renew as against a ship or ships that have been within the jurisdiction during the currency of the writ, is dealt with by the Registrar. Mr. Justice Brandon observed that the Registrar had renewed the writ as against the Berny and against all of the sister ships except the Dalmy, which had visited a port within the jurisdiction and, an interesting point in the present context, that the Clyde firm, who acted for the Plaintiff, had voluntarily amended their writ by striking out the "Dalmy" before applying for the renewal. He noted that while the procedure was not without some shortcomings, it had apparently been accepted and acted upon for a considerable number of years. The important aspect in The "Berny" is that the plaintiff recognized the propriety of dropping the sister ship Dalmy from the action because she had been within the jurisdiction, thus preventing a renewal of the claim against that particular sister ship. However, this apparently accepted and sensible approach is, in itself, not of particular assistance in the present instance, for there is no indication of the reasoning behind the apparent convention of removing surplus sister ships from the style of cause.
In our situation, jurisdiction over the Clymene, as a sister ship, is founded upon section 43 (8) of the Federal Court Act which provides, to paraphrase, that a maritime claim as conferred by section 22 of the Act may be exercised in rem against a sister ship, subject to common beneficial ownership of the wrong-doing ship and the sister ship at the time the action is brought. On a refusal to extend the time for service or, as is the case here, rescission of the Rule 306 time extension order, there is no in rem jurisdiction to bring into play section 43 (8) of the Act. Thus the Court now has no jurisdiction over the sister ship Clymene.
The Clymene ought, at this point, to be deleted from the action by an amendment to the style of cause, just as in the case of any other party over whom the Court finds it has no jurisdiction. Indeed, to apparently leave the Clymene in the action, even in name only, could easily be an embarrassment to the owner and an abuse of process. For both of these reasons, lack of jurisdiction and an abuse of process, the Clymene is removed from the style of cause. Further, the reference and description of the Clymene, in paragraph 5 of the Statement of Claim, is also removed. The Plaintiff will file an amended Statement of Claim within the next 30 days.
COSTS
Counsel for the owner of the Clymene seeks costs on a solicitor/client basis, or alternatively, on a substantial party and party basis, submitting that costs ought to be paid forthwith in that there was no assurance that the action would ever proceed further.
Solicitor/client costs "... are exceptional and generally to be awarded only on the ground of misconduct connected with the litigation.": Amway Corporation v. The Queen [1986] 2 C.T.C. 339 at 340 (F.C.A.). Indeed, "Solicitor-client costs are generally awarded only where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties.": Young v. Young (1994) 160 N.R. 1 at 41 (S.C.C.).
In the present instance, the Plaintiff ought not to have threatened to arrest the Clymene once her owner forwarded evidence indicating that the ex parte extension for service of the Statement of Claim should be set aside. This may border on misconduct, but it stops short of being reprehensible conduct. However, the owner of the Clymene has been put to some substantial expense by the questionable approach adopted by the Plaintiff. Thus an award of costs ought to approach an indemnity: costs in this instance will be at the maximum under column IV of Tariff B. That costs are not at a higher scale is first because this is an isolated incident and second, because the Plaintiff voluntarily returned the letter of undertaking and agreed that the extension ought not to have been granted, when faced with the Defendant's motion. If the parties are unable to arrive at an appropriate figure, they may arrange a taxation.
Payment of costs shall be forthwith, for this is a situation in which there is no certainty that the action will proceed any further. Thus the general practice, that costs be dealt with at the conclusion of an action, when there may be allowances for set off and when all aspects may be considered at one time by a taxing officer, does not apply.
(Sgd.) "John A. Hargrave"
Prothonotary
14 May 1997
Vancouver, British Columbia
NAMES OF COUNSEL AND SOLICITORS OF RECORD
STYLE OF CAUSE: BELGO MINEIRA COMERCIAL
| EXPORTADORA S.A., CHINA STEEL |
| CORPORATION, ARBED INTERNATIONAL TRADING PTE. LTD. |
- and -
| HADLEY SHIPPING CO. LTD., THE SHIP "CERINTHUS", HER OWNERS AND ALL OTHERS INTERESTED IN HER AND THE SHIPS "CLARE", "CYLMEME" AND "CONTINGA", THEIR OWNERS AND ALL OTHERS INTERESTED IN THEM |
COURT NO.: T-2161-94
PLACE OF HEARING: Vancouver, B.C.
DATE OF HEARING: May 12, 1997
REASONS FOR ORDER OF Mr. John A. Hargrave, Prothonotary,
dated May 14, 1997
APPEARANCES:
Mr. A. B. Oland for Plaintiff
Mr. D.G. Morrison for Defendant
SOLICITORS OF RECORD:
A. B. Oland Law Corporation for Plaintiff
Vancouver, BC
Bull, Housser & Tupper for Defendant
Vancouver, BC
__________________
1 The Defendant's motion was argued, in part, in the context of disclosing no reasonable cause of action, by reason of a lack of jurisdiction, under rule 419 (1) (a). It is more appropriate to bring such a motion under Rule 401. However, to refer to the wrong rule is not fatal: see for example the apt comments of Mr. Justice Denault in Cairns v. Farm Credit Corporation [1992] 2 F.C. 115 at 128, 49 F.T.R. 308 at 315.
2 Dene Nation v. Canada [1992] 2 F.C. 681 at 687 (F.C.A.)
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