Date: 20101222
Docket: T-1478-05
Citation: 2010 FC 1318
Ottawa, Ontario, December
22, 2010
PRESENT: The Honourable Justice Johanne Gauthier
BETWEEN:
CALOGERAS
& MASTER SUPPLIES INC.
Plaintiff
and
CERES HELLENIC SHIPPING
ENTERPRISES LTD. and
THE OWNERS AND ALL OTHERS INTERESTED IN
THE SHIP "CAP LAURENT" and THE
SHIP "CAP LAURENT"
and THE OWNERS AND ALL OTHERS INTERESTED
IN THE SHIP "CAP ROMUALD" and
THE SHIP "CAP ROMUALD"
and THE OWNERS AND ALL OTHERS INTERESTED
IN
THE SHIP "CAP GEORGES" and THE
SHIP "CAP GEORGES"
and THE OWNERS AND ALL OTHERS INTERESTED
IN THE SHIP "CAP LEON" and THE SHIP "CAP LEON"
and ALL OWNERS AND OTHERS INTERESTED IN
THE SHIP "CAP JEAN" and THE
SHIP "CAP JEAN"
and THE OWNERS AND ALL OTHERS INTERESTED
IN THE SHIP "CAP DIAMANT" and
THE SHIP "CAP DIAMANT"
and THE OWNERS AND ALL OTHERS INTERESTED
IN
THE SHIP "CAP PIERRE" and THE
SHIP "CAP PIERRE"
Defendants
REASONS FOR JUDGMENT AND JUDGMENT
[1]
The
plaintiff Calogeras and Master Supplies Inc. (Calogeras) seeks payment of
unpaid invoices for goods and services supplied at St-Romuald, Quebec, to various
ships under the management of Ceres Hellenic Enterprises Ltd. (Ceres) as well
as interest at a rate of 26.824% on all invoices paid after the agreed term
since August 2002.
[2]
It
is not disputed that the services referred to in the allegedly unpaid invoices
were provided. Thus, one would normally think that this case would be easy to
deal with. Unfortunately, it was anything but that. On the last day of the two-session
trial, after a change of solicitor took place on the final day of the first leg
of the trial, defendant counsel described the case as a “memorable trial”. I
agree.
[3]
In
effect, as will be explained later on, the situation was made so complex by a series
of blunders and the plaintiff’s lack of transparency during the parties’
relationship that it became almost impossible for the plaintiff to establish
its claim. Calogeras’ last counsel
described the situation as of June 14, 2001 as an “incredible mess” (cafouillis
incroyable).
Background
[4]
The
parties began their business relationship in September 1998 and ended it sometime
in March 2005.
Until the beginning of 2002, it appears that things went rather smoothly as
Ceres consistently paid Calogeras’ invoices on time. Then, in 2002 because of
what was referred to as bad investments, Ceres experienced cash flow problems and
it appears from the terms agreed to by Calogeras (90 days then 120 days) that
the supplier agreed to finance Ceres at least on a short term basis. There is a
dispute as to whether it was also agreed that, in exchange for future business,
Calogeras would not charge the interest referred to in its invoices and then in
its General Terms and Conditions (edition 2002) (hereinafter GTC) on overdue
amounts. The evidence which will be discussed in more detail later on appears
to indicate that the parties have played a game of hide and seek in respect of
that issue.
[5]
Although
it is agreed that, according to the usual practice, a statement of account listing
all amounts outstanding was sent monthly, at least until January 2005, only a
few samples of such statements were produced. The most relevant ones are, in my view, TX
65 (statement of account dated December 22, 2004 attached to the first demand
letter sent by Calogeras’ lawyer dated December 23, 2004), TX 69
(statement of account dated January 25, 2005 sent by Mr. Moutsios of Calogeras
to Mr. Lagonikas of Ceres on January 25, 2005) and TX 89 (statement of
account of August 16, 2005 attached to the second letter of demand sent by the
second counsel for Calogeras on August 18, 2005 (TX 91)). It was shortly after
this second letter of demand issued in August 2005 that a statement of claim
was issued together with a warrant of arrest.
[6]
Before
discussing the proceedings per se, it is useful to refer to two events
which are particularly significant.
[7]
In
effect, although Calogeras (particularly through Mr. Moutsios) regularly
reminded Ceres of the need to pay their invoices on time, there
were two main crises during this relationship: first in November 2003 and then
in December 2004/January 2005.
[8]
In
November 2003, Calogeras advised Ceres that its bank, who had an assignment on Calogeras’
receivables, was insisting that Calogeras lower the outstanding amount owed by
Ceres. At that time, the parties discussed a payment plan and Calogeras appears
to have even considered changing banks and extending Ceres’ future terms of
payment to 150 days. During that period, Mr. Lagonikas, the chief
accountant of Ceres, allegedly stated that if Ceres was forced to pay the
interest charges set out in Calogeras’ statements of account or any interest in
the future, it would simply stop doing business with Calogeras. Ceres
claims that Mr. Kottos, the President of Calogeras, agreed to waive Calogeras’ right
to claim such interest. However, in an e-mail dated November 10, 2003 from
Mr. Kottos to Mr. Lagonikas, an attached letter signed by Mr.
Moutsios, indicates that as far “as the interest of $63,148.61 we negotiate at
a later date”.
Apparently this amount was the total of all invoiced interest
charges included in Ceres’ statement of account as of that date.
[9]
It
appears that there were no further negotiations or discussions in that respect until
January 2005. However, it also appears that Calogeras’ statements of account
continued to show only the invoiced interest charges incurred as of November
2003. In effect, there is no evidence that Calogeras ever invoiced Ceres for
new interest charges before December 2004, and this, despite the fact that the
schedule of payment proposed in the November 10, 2003 letter was not adhered
to.
[10]
The
second crisis occurred in December 2004, when Calogeras sent a letter of demand
through its first legal counsel advising that Ceres’ failure to pay all outstanding
amounts set out in the statement of account attached thereto would result in
the arrest of vessels managed by Ceres. This statement of account (TX 65)
included various new interest charges (about $61,250) all dated December 2004
in addition to the interest charges invoiced prior to November 2003. According
to Mr. Kottos, it is impossible to relate these charges to any specific invoices
or services rendered. It also appears that the percentage used to calculate
these interest charges was not the one set out in Calogeras’ GTC, but rather a default
rate
set in by Calogeras’ accounting software. In this December statement of account
all outstanding invoices were described as overdue, presumably on the basis
that Ceres had lost the benefit of the 120-day term by failing to pay on time
(see paragraph 7D, Annex 1). Finally, the long-term charterer of Ceres’ vessels
calling at St-Romuald, Quebec, was
notified of Calogeras’ claim then amounting to $905,063.27 and of the
possibility of an arrest.
[11]
Ceres
promptly contacted Calogeras’ lawyer with detailed comments on this statement
of account. However, Calogeras could not be reached at least for a couple of
weeks during that period. Apparently, Calogeras had ceased its operations and
Ceres had to use another ship supplier for its vessels calling at St-Romuald on
a weekly basis.
[12]
Finally,
in mid-January 2005, Mr. Lagonikas was able to speak with Mr. Moutsios and he
asked him to send a revised up-to-date statement of account stating only what
was really owed by Ceres to Calogeras. In his view, based on their prior
agreement, same should not include any invoice for interest charges. This
conversation was carried out in Greek and could not be misunderstood by Mr.
Moutsios. This request was also confirmed in an e-mail dated January 21st,
2005 (TX 68).
[13]
Shortly
thereafter a revised statement of account dated January 25, 2005 (TX 69) was
sent showing a total amount outstanding of $834,187.99, of which $351,744.37 was
now described as current and $482,100.12 as past due. In the said statement, all
invoiced interest charges were deleted. According to Mr. Moutsios, for
reasons unknown and allegedly never understood by him, Ceres had asked him to
send a statement of account showing only the outstanding invoices for services
rendered. Apparently, this is reflected in his e-mail accompanying the said
revised statement where he says: “this list is complete and there are no other
outstanding invoices owed to us by Ceres Hellenic Shipping Enterprises Ltd.”.
[14]
On
January 25, 2005, Calogeras also apologized to Ceres’ operational department for
the inconvenience it may have caused noting that they wanted to continue their
relationship and that Calogeras was even going to expand operations into the
U.S., particularly, New York and Houston.
[15]
As
mentioned, out of necessity, Ceres had to use another ship supplier in December
and the personnel in the purchasing department clearly had some hesitation to
revert to business as usual. By that time, Ceres had also received a letter of
demand from a sub-contractor of Calogeras claiming that its invoices were
unpaid since September 2004. That said, it appears that subject to confirmation
of Calogeras’ financial situation, Ceres was willing to keep Calogeras as a
supplier but as a back-up or in competition with the other suppliers used by
Ceres in December-early January 2005. On that basis Calogeras did supply some
services in early 2005. However, in March 2005, Ceres’ principals sold the
tanker fleet (CAP vessels) calling at St-Romuald and their management was
transferred elsewhere.
[16]
After
receiving the January 25th statement of account, requesting missing invoices
and seeking notification to their charterer that there was no further dispute,
Ceres made several payments between January 28 and June 17, 2005, amounting to $727,198.65
(see TX 1).
In light of the fact that several invoices listed in TX 69 had already
been paid in August 2004, according to Ceres’ records, these payments were in
the defendant’s view sufficient to cover all amounts owed to Calogeras.
[17]
Despite
Ceres’ request for updated statements of account, none were sent until August
2005. However, on February 23, 2005, Mr. Kottos wrote to Ceres advising that
unless Calogeras received payment of $969,168.30 by Monday, February 28, 2005, it
would be forced to initiate legal action (TX 76). Then on about March 21, 2005,
Mr. Moutsios
(with Mr. Bolanis) met with various representatives of Ceres in Greece to tell
them that Calogeras wanted payment of all its outstanding invoices as well as
interest. On June 15, 2005, Mr. Moutsios wrote to Mr. Lagonikas stating
that an amount of $136,132.25 for invoices for services rendered was still
outstanding plus $172,884.90 for interest charges.
[18]
It
is to be noted that since the beginning of their relationship with Calogeras,
Ceres sent detailed instructions as to which invoices were being paid with each
of its bank transfers. Ceres also appears to have applied various credit notes
referred to in the said instructions. This was originally disputed by Messrs.
Kottos and Moutsios, who claimed that on at least four or five occasions those
instructions were missing.
Considering the documentary evidence produced which indicated that such
instructions were indeed usually given and that when said
instructions were missing or unclear Calogeras did ask for those details, the
position adopted by Calogeras during final argument was much more nuanced, admitting
that indeed as a general rule Calogeras did apply Ceres’ instructions.
[19]
However,
in August 2005, apparently on the advice of their second counsel, Calogeras
re-allocated the “payments” received to invoiced and uninvoiced interest
charges adjusted to the contract rate (26.824%) and thereafter to the oldest
invoices since December 2001.
Surprisingly, towards the end of the trial, the Court was advised by Calogeras’
fourth counsel that this re-allocation in fact only applied to three of the
payments received in 2005. Apart from this admission or statement of counsel
during arguments, the evidence in this respect remains unclear. Be it as it
may, it is on the basis of such re-allocation that the statement of account
dated August 16, 2005 was sent to Ceres by Calogeras’ second lawyer showing an
outstanding amount of $740,359.90 which, according to the parties, comprised
about $604,000 for services rendered between May 2004 and March 2005 and about
$136,000 for interest charges.
[20]
The
day after receiving Calogeras’ lawyer’s second letter of demand and this
statement of account, Ceres sent a reply listing the date of payment of each
invoice set out in this last statement (excluding those for interest charges).
This exercise was based on the payment instructions attached to Ceres’ bank
transfers.
[21]
After
the institution of the proceedings, a letter of guarantee was issued for an
amount of $1,600,000.
Also, given that Calogeras is not in operation anymore, the plaintiff was
ordered to put up $115,000 as security for costs.
[22]
Ceres
proceeded to an examination of discovery of Mr. Kottos, Mr. Moutsios and
Mr. Gassios, a technology consultant for Calogeras. It
appears that Calogeras did not exercise its right to examine on discovery a
representative of Ceres. Expert reports were exchanged and a date for trial was
set out.
[23]
At
the first Trial Management Conference in February 2010, having
perused, with the consent of the parties, the expert reports filed by them, the
Court advised the parties that Calogeras’ expert report was not particularly
helpful considering that it consisted essentially of a very thick accounting
printout based on documents that were not all provided to Ceres or its expert,
such as invoices, details of interest charges, etc. After lengthy discussions
in respect of various other relevant issues, the parties agreed that at the
trial they should focus on legal issues rather than quantum. Thus, the Court
issued an Order for a meeting to be presided by the Case Manager (Madam
Prothonotary Tabib) between counsel and their experts to deal with a series of
scenarios to be considered and quantified. On February 16, 2010, after several
hours of discussions, it became clear that the parties could not come to any
agreement. Apparently Mr. Moutsios discovered some discrepancies in the
schedule of payment used by the two experts. More will be said about this later.
[24]
The
Court also ordered that all documents referred to in Calogeras’ expert report
be served and filed no later than February 11, 2010. The parties also had until
February 12, 2010 to serve an amended affidavit(s) of documents as well
as copies of any document not already forwarded to the other party. Finally, the
plaintiff was given until February 15, 2010 to serve and amend its Statement of
Claim, given that it was apparent that it did not include the claim as
calculated by its expert, which appeared to reduce the amount claimed for
services rendered from $604,000 to $104,653.25 (in respect of 17 invoices
provided to the defendant shortly before trial) and increase plaintiff’s claim
for interest charges.
[25]
On
February 18, 2010, Calogeras’ counsel sought a Trial Management Conference
because of a dispute in respect of its revised affidavit of documents. It became
obvious that leave of the Court was required in respect of the filing of several
documents. Given that Ceres intended to hotly contest the granting of such
leave, a schedule was set out whereby Calogeras would present a formal motion to
be heard on the first day of trial. The Court gave explicit instructions as to the
details to be included in the revised list of documents and the motion. The
Registry was even asked to alert plaintiff’s counsel about paragraphs 81 and 82
of the Federal Courts Rules to avoid any dispute in that respect.
[26]
Despite
this, the proposed new affidavit of documents attached to Calogeras’ motion was
not properly detailed while the affidavit in support of said motion was signed
by Calogeras’ counsel. As expected, Ceres contested the motion on various bases
including that no explanation was given for the delay in providing this
additional documentation, that the affidavit had been signed by counsel without
leave of the Court and that if permission was granted at this late date it should
be entitled to special costs to cover the prejudice it suffered.
[27]
As
it was not clear at all how crucial this documentation was to establish the
plaintiff’s claim (plaintiff’s main argument), the Court decided to take the motion
under reserve and to start the evidence in chief.
[28]
Because
of a problem with locating Calogeras’ expert and the possibility that the Court
could still decide to appoint an assessor (although the parties had not been
able to come up with any suggestions and had indicated that this might be too
costly), it was agreed that both sides would present all their factual evidence
and that the expert evidence would be heard last.
[29]
The
first witness was Mr. Moutsios who described himself as a silent partner in
Calogeras
who was particularly
involved in the financial aspects of the company and the relationship with
Ceres. During his testimony,
he started testifying about a subject that had not previously been disclosed to
the defendant for it was the result of an exercise that had just been carried
out the weekend before trial. According to Mr. Moutsios, during the
meeting with Madam Prothonotary Tabib, Calogeras realized that there was a
discrepancy between the amounts used by the parties in their
reconciliation because TX 90 failed to include old invoices starting with a
number lower than 8129
and the payment received from Ceres in December 2001 ($119,530.52) had been
split in two by Calogeras, resulting in a difference of $82,882. With that in
mind, Calogeras had now tried to reconcile all of its accounts with the
instructions for payment received from Ceres. It is not clear whether the plaintiff
had ever done this before. As a result, Mr. Moutsios prepared a list of 137
invoices dated between 2001 and 2004 amounting to $131,919.94 for which Ceres had
allegedly failed to give instructions for payment. This list was marked as
Exhibit A, subject to an objection under reserve, after it was agreed that it
would be dealt with as part of the motion filed by Calogeras. Apparently, at
that time, this evidence was only meant to be a response to the defence set out
by Ceres since the beginning of the proceedings. It was not the basis of the plaintiff’s
claim. Finally, Calogeras sought to introduce two additional volumes of
invoices (volumes 31 and 32 not in the boxes of documents sent to the defendant
a week before trial). These again were added to the documents to be considered as
part of Calogeras’ motion.
[30]
In
addition to Mr. Moutsios, Calogeras presented two lay witnesses: Mr. Kottos,
its President, and Mr. Bolanis, a salesman who visited Ceres with Mr. Moutsios
in 2003 and 2005. Ceres presented only one witness: Mr. Lagonikas. Ceres also filed
various extracts from the examination for discovery (exhibits TX 111 and TX 112).
The parties relied on two volumes of documents filed by consent. The Court made
it clear to them, however, that unless the documents were properly explained, the
Court would not be in a position to give them much weight.
[31]
During
the cross-examination of Mr. Lagonikas, Calogeras’ counsel attempted to obtain
some admission in respect of the 137 invoices listed in Exhibit A. In his answer
to a question from the Court, Mr. Lagonikas acknowledged that given time and
despite the fact that it might be difficult to find all of the applicable
documentation, he could attempt to verify if those specific invoices which were
not included in either the August 16, 2005 statement of account or the January
25, 2005 one had been paid or not. It was agreed that if the Court were to
allow Exhibit A in evidence, Ceres would be entitled to respond with further
evidence from Mr. Lagonikas.
[32]
After
Calogeras’ counsel had announced that he had a very brief reply (between 5 and
15 minutes), Mr. Kottos advised the Court that Calogeras had lost confidence in
its counsel and wished an adjournment to enable him to find a replacement. After
discussions, it was agreed that Calogeras’ counsel would complete the
plaintiff’s reply and that the trial would be adjourned to enable Calogeras to
appoint a new counsel who would present its expert evidence and its final
arguments. At the time, it was made very clear that the factual evidence of
both sides was closed, subject only to Ceres’ right to provide additional
evidence from Mr. Lagonikas should the Court allow the filing of Exhibit A.
[33]
At
one of the Trial Management Conferences held before the resumption of trial, Calogeras’
new counsel sought the right to amend the Statement of Claim in order to include
an alternative basis for its claim which was, according to him, supported by
the evidence presented during the first leg of the trial. As the Court was to
deal with the issue of extra costs necessary to compensate the prejudice suffered
by Ceres, if any, as part of Calogeras’ motion (particularly in respect of Exhibit
A) and subject to their right to amend their own defence to rely on time
limitation, Ceres consented to the following amendments to paragraph 12:
12 a) As of August 16th,
2005 there remains overdue and owing by the Defendants to the Plaintiff a
balance of CDN $740,359.90 in capital and interest in relation to goods or
services supplied to the Defendant vessels for the period from May 2004 to
March 2005, inclusive, said balance remaining after and resulting from the
imputation of 648,378.72$ of Defendant’s remittances to interest accrued on
Plaintiffs’ invoices paid after their due date, such invoices having been
issued in relation to goods and services supplied to the Defendant’s vessels
within 3 years from said imputation.
b) Alternatively, if
Plaintiff’s method of imputation of said Defendant remittances is not approved
by this Court and if it is the imputation of the remittances as per Defendants’
instructions which prevails, there still remains overdue and owing by Defendant
to Plaintiff a balance of 761,795.00$ in capital and interest as of August 16,
2005 being 104,653.25$ of unpaid invoices and interest thereon of 175,324.22$
and 481,818.00$ of interest on other invoices paid after their due date, all
such capital and interest being in relation to goods or services supplied to
the Defendant vessels for the period from August 15, 2002 to March 2005,
inclusive.
(amendments underlined)
[34]
In
order to reduce costs, the parties also agreed to the filing of an affidavit
from Mr. Lagonikas in lieu of further testimony. Obviously, if Calogeras
wanted to cross-examine him, this could have been done by videoconference. However,
Calogeras did not exercise such right and the affidavit was filed under reserve
as exhibit TX 113 subject to the Court’s decision in respect of Exhibit A. In
the said affidavit dated May 26, 2010, Mr. Lagonikas, having checked Ceres’
accounting records that were still available, came to the conclusion that
$74,737.92 appeared to be outstanding in respect of 80 invoices listed in Exhibit
A (from a total of 137).
[35]
In
their Statement of Defence, Ceres alleged that any claim for interest charges
relating to invoices for services rendered before May 2004 was time-barred because
the claim described in paragraph 12(b) of the Amended Statement of Claim constituted
a new cause of action for which the time limitation could not have been
suspended by the filing of the statement of claim in August 2005. With respect
to the amount referred to in TX 113, Ceres agreed that if it became evidence,
it would waive its right to rely on time limitation to avoid the payment of the
invoices acknowledged to be due by Mr. Lagonikas.
[36]
When
the trial resumed in June 2010, Calogeras decided not to present any expert
evidence and to rely instead on the admission(s) of Mr. Lagonikas in respect of
80 of the invoices listed in Exhibit A. It also disputed the validity of the deduction
of credit notes referred to in paragraph 18 of TX 113 as well a few other
deductions under paragraph 10 of the said affidavit. It was made clear that the
claim referred to in paragraph 12(b) of the Amended Statement of Claim was
strictly in respect of the invoices referred to in Mr. Lagonikas’ affidavit in
Exhibit A, even though the amount set out in paragraph 12(b) on its face
appears not to be the same.
It was well understood that
by not presenting its expert, Calogeras renounced its claim to as calculated by
the said expert in respect of 17 invoices.
[37]
Calogeras’
new counsel then presented the Court with several Excel sheets which he had
allegedly prepared to calculate the interest owing on each invoice paid after
its due date at the “contractual” rate of 26.824% per annum. According to him, if
the Court were to accept Calogeras’ position that it was entitled to interest from
the date of each of these invoices to the date of the institution of the
proceedings in August 2005, there was no need for the plaintiff to present
expert evidence to calculate this amount.
[38]
Ceres
presented Mr. Pavelic who was accepted as an expert accountant by the Court.
Although Ceres filed his report which was originally meant as a reply to a
report that is not before the Court, this witness’ testimony focussed on what might
be relevant to the Court with regards to the claim for interest and he
explained the relevance of Calogeras’ financial statements (TX 105 to 107) and
general ledger (TX 108). Still, this testimony was not as useful as one would
have hoped.
[39]
Calogeras
bases its right to claim interest as well as reimbursement of its attorney
fees, court costs and other collection costs principally on the GTC which according to
Calogeras apply to all the above-mentioned transactions but also
on the terms appearing on their invoices since at least 2001. The GTC are
included in Annex I to these reasons. They are to be read with the terms of
Calogeras’ other contractual documentation including its quotation,
acknowledgement of order, delivery notes, etc. However, according to this document, “[i]n case of
inconsistency, the text of [these] general terms and conditions shall prevail”. Despite
this, Calogeras’ latest calculation of the interest claimed relies on a mention
in their invoices which is contrary to what one finds in paragraph 7 of Annex
I.
Analysis
[40]
It
is not disputed that there is no master agreement that regulated the relationship
of the parties. Ceres was free to use any supplier it wanted and Calogeras had
no right of exclusivity. Each purchase was made on the basis of a punctual
request for quotation. Each quotation is thus to be construed as a distinct
transaction to which certain terms of payment and conditions applied, which may
have an impact on how the payment of prior distinct transactions are dealt with (see for
example, section 7(b) Annex I).
[41]
The
parties made no representations in respect of the law applicable to such
transactions. They appear to agree
that the Court must apply the general principles of common law and civil law
that are part of Canadian Maritime Law as defined in the Federal Courts Act
at sections 2 and 42.
[42]
The
main issues to be determined are thus :
1) Does Calogeras
have the right to claim the amounts set out in its August 16, 2005 statement of
account? (paragraph 12(a) of the Amended Statement of Claim)
2) If not, does Calogeras
have the right to re-calculate its claim on the basis of the instructions for
payment received from Ceres? If so, can they also claim interest on all the
invoices paid after their due date? (paragraph 12(b) of the Amended Statement
of Claim)
3) Can Calogeras
recover the attorney fees (TX 98) and the other court expenses set out in paragraph
7(e) of the GTC?
[43]
I
must first deal with some of the documents that are the subject of Calogeras’
motion referred to above. I say some because before the end of the trial, it
was agreed that what was referred to in the motion as exhibit 12 would be
marked by consent as TX 110.
The Court was advised when this was done that this document was more or less
the same as exhibit TX 101. What was referred to in the motion as exhibits 4,
5, 6 and 7 were documents that could only be entered in evidence if and when
Calogeras’ expert testified. They are, thus, not part of the evidentiary
record.
[44]
With
respect to exhibit 13 (Tab 2 in the volume containing TX 110) the Court was
given no explanation as to why this document is relevant to the claim as it now
stands. There is no explanation either as to why a document purporting to
describe Calogeras’ internal records as of July 25, 2005 could not have been
printed and produced earlier than February 15, 2010. It shall not be admitted
in the evidentiary record.
[45]
Turning
now to the 32 volumes of invoices, the Court has decided to grant leave to Calogeras
to file volumes 1 to 29 and volume 30 excluding the two last invoices (numbered
IN0015134 and IN0015139). Obviously, Ceres had no opportunity to verify whether
these volumes of invoices are complete and whether there are discrepancies
between the amounts accepted by Ceres in its instructions to pay and the amounts
invoiced. With respect to volume 32, only those invoices appearing after Tab 3
shall be part of the record given that the invoices in Tabs 1 and 2 are, in my
view, irrelevant as they are not part of the invoices on which Calogeras based
its claim for interest. I have no doubt that these should have been produced
earlier if they were to have any useful purpose.
[46]
Volume
31 purports to contain the 137 invoices listed in Exhibit A. For reasons that I
will explain shortly, Exhibit A will enter into evidence, thus these invoices
are relevant. Ceres had an opportunity to carefully examine them. This is the
subject of Mr. Lagonikas’ affidavit.
[47]
As
is readily apparent from the position taken by Calogeras’ latest counsel and given
the Court’s conclusion in respect of the interest, it is obvious that Exhibit A
is crucial to the plaintiff’s case. No satisfactory explanation has been given
to explain why the exercise carried out in a couple of days on the last weekend
before trial was not done back in August 2005 when Ceres replied to Calogeras’
second letter of demand or, at the very least, when Calogeras sought an
alternative approach with the help of an expert the
amount.
Still, the Court has discretion to admit this evidence even if it does not meet
all the criteria set out in Canada (A.G.) v. Hennelly,[1999] FCJ No 846
(CA) (see Canada v. Hogervost 2007 FCA 41, [2007] FCJ No 37 at para 33) if
it is convinced that it is in the interest of justice to do so and if the
prejudice to the defendant can be properly compensated. In that respect, there
is no doubt in my mind, that the new position taken by Calogeras in paragraph
12(b), which can only be supported by reliance on Exhibit A renders meaningless
many steps taken and expenses incurred by Ceres, at least those related to the
defence of the claim described in Calogeras’ expert report.
[48]
That
said, the Court does not feel that it would be appropriate to quantify or
assess the monetary impact of its decision to admit this evidence, before it
has had the benefit of hearing the parties’ final arguments on costs. In
effect, both sides agreed that the matter of costs should be settled in a
distinct order after the judgment of the merits of the action is issued and after
giving them an opportunity to make further arguments including some relevant to
the application of Rule 420.
[49]
I
will now turn to the merits of the claim but before answering the questions
raised by the parties, it is worth mentioning how the Court generally assessed
the evidence. As the credibility of the lay witnesses is an important element
in this case, before reaching any conclusion, the Court spent an inordinate
amount of time reviewing and trying to reconcile the testimonies at the trial
and discovery and the documentation filed.
[50]
Although
the Court attempted to excuse various contradictions and discrepancies in the
testimonies of Messrs. Kottos and Moutsios on the account of nervousness and
difficulty to express themselves (especially Mr. Moutsios), it later
became clear that this could not be the sole explanation for most of them. While
the Court did not simply put aside their version of all the events, the weight
of their evidence was greatly diminished and this had an impact on the
plaintiff’s ability to meet its burden of proof.
[51]
On
the other hand, the Court finds that as a whole Mr. Lagonikas was a credible
witness who candidly answered difficult questions from the Court. His
willingness to admit Ceres’ liability vis-à-vis 80 of the new invoices referred
to in Exhibit A and to waive the time limitation in respect of these services is
worth mentioning again. Here I note that the Court does not believe that
Calogeras’ counsel (the last one) was right when he said that Mr. Lagonikas’
admissions only made things simpler for Calogeras given that it could still
have relied on its expert to establish an alternative claim based on the unidentified
17 invoices. In fact, it is far from clear that such a claim would have
succeeded.
[52]
As
a result of the above, where the version of Mr. Moutsios or Mr. Kottos or the
two of them taken together was not corroborated by other evidence and was in
direct contradiction with that of Mr. Lagonikas, the Court preferred the
evidence of the latter.
[53]
It
must be clear that this result has nothing to do with their legal
representation per se.
[54]
Calogeras’
principals and new counsel were quick to blame their legal representation for
the sorry state of the evidentiary record, one cannot but notice the fact that
four different law firms were involved in this file for Calogeras. To perform
efficiently counsel must receive clear and accurate disclosure of the facts.
[55]
During
argument the parties did not spent much time on the law. Their
main difference in respect of the claim set out in paragraph 12(a) of the
Amended Statement of Claim is not in my view that relevant. Whether in August
2005 Calogeras illegally -imputed Ceres’ payments as the defendant puts it or
simply, as the plaintiff puts it, exercised its right to impute payment as per paragraph
7(b) of the GTC,
is not important. What matters is whether Calogeras has established that there
was a debt of at least $648,378.72 for interest charges at the time they
proceeded to the imputation which resulted in the issuance of the August 16,
2005 statement of account.
[56]
The
evidence relevant to the issue of interest is for obvious reasons the most
difficult one to reconcile.
[57]
Probably,
for this reason, Calogeras’ position is simple. Since the very beginning, its
written terms provided for the payment of interest at 2% per month compounded
(26.824% per annum). After the GTC were implemented, nothing it did or said
could constitute a waiver of that right as clause 13 of the GTC clearly called
for a waiver in writing duly signed by Calogeras. Also, any waiver in respect
of one invoice could not be construed as a waiver in respect of another.
[58]
Calogeras,
in its final argument, did not address the period before the implementation of
the GTC but the Court understands from the notes filed by the previous counsel
that nothing done by Calogeras during the relationship could constitute, in its
view, a clear, unequivocal waiver of its right to rely on its written terms and
it could not be estopped from claiming the interest.
[59]
Ceres
argues that the parties had agreed that the terms concerning interest included
in Calogeras’ standard printed documentation were not
to apply. Ceres had a particular agreement with Calogeras in that respect.
[60]
Also,
if as Calogeras alleges, the GTC were meant to apply to Ceres, certainly
Calogeras consistently failed to respect its obligation to allocate all
payments received to the payment of such interest before applying the payment
to overdue amounts.
This provision in clause 7(b) is for the benefit of the debtor and the party
who does not respect its own contractual obligation loses its right to rely on
the strict application of clauses such as clause 13. At the very least, clause
13 should be construed strictly. Ceres argued that the issuance of Calogeras’
statements of account, particularly the January 25, 2005 statement sent under
the electronic signature of Mr. Kottos or Mr. Moutsios, constituted waivers
within the meaning of clause 13.
[61]
Mr.
Kottos was very clear that during the relationship up to August 2005, Calogeras
never applied any payment received from Ceres to interest charges, invoiced or
not.
[62]
There
is little evidence as to how the accounting program of Calogeras was set up in
respect of interest. Mr. Kottos acknowledged that it was impossible for Ceres
to trace to which set of invoices a charge for interest appearing in a
statement of account was applied. Although his evidence in that respect was not
very clear, Mr. Moutsios appeared to say that the system would start to
automatically charge interest on all overdue invoices shortly after the end of the
monthly period during which these invoices became due.
[63]
Finally,
Mr. Kottos testified that
the rate of interest used by the computer to calculate the interest charges was
not the contractual rate but rather a default rate set out in the software
program (ACCPAC).
[64]
There
is no statement of account for any period prior to March 4, 2003 before
the Court. The document purporting to be the statement as of March 4, 2003 does
include several interest charges which are also ordered numerically. Although
in the first five pages interest charges appear to have been entered in the
system as of June 30, 2002, there are on page 6 some batches starting with
number INT-000000017 dated February 28, 2002. However, in the next statement of
account before the Court which is dated November 2003 (TX 39), the oldest
batches (ending with number INT-000000017 to INT-000000044) as well as batches
numbered INT-000000046 and INT-000000052 disappeared while seven new interest
charges all bearing the date of February 28, 2003 were included.
[65]
The
next two statements before the Court, TX 51 and TX 52 cover the periods up to
July 24, 2004 and up to August 23, 2004 respectively. They do not include
any new charges for interest compared to TX 39 (November 2003). Mr. Pavelic
confirmed that Calogeras’ general ledger did not include any interest charge
for the period between November 2003 and the end of November 2004.
[66]
Certainly,
it is difficult to understand why interest charges that were invoiced simply
disappeared or why the accounting program did not add new charges monthly as
suggested by Mr. Moutsios. These issues were not addressed at all by
Calogeras’ witnesses. Given that no payment was ever applied to interest
invoiced or uninvoiced, did Calogeras purportedly alter its system so that no
automatic monthly charges would be added to Ceres’ account? Were the charges
deliberately deleted?
[67]
In
Calogeras’ ledger for the periods starting September 1, 2002 to August 31, 2003
and September 1, 2003 to August 31, 2004, one finds various unexplained entries
dealing with adjustment of interest batches including what appears to be a
deletion of about $62,104.99 as well as various entries under the heading of
“Bad debt expenses”.
[68]
All
this to say that Calogeras’ own documentation does not support the position
they put forth.
[69]
The
Court accepts as a fact that in November 2003, Mr. Kottos had verbally agreed
that no interest charges would be applied to outstanding invoices of Ceres in
the future. As to the interest charges already invoiced before this conversation,
although it is likely that Mr. Kottos was not very clear in that respect, the
most that Calogeras has established is that there was an amount of no more than
$63,148.61
to be negotiated.
[70]
Although
Calogeras has established to my satisfaction that Ceres did receive a copy of
its GTC in early 2003 at a meeting between Messrs. Lagonikas, Moutsios and
Bolanis, the Court agrees with Ceres that they were consistently disregarded by
Calogeras until it sent its first letter of demand in December 2004.
[71]
There
is no doubt that the issuance of the January 25th statement of account
with the accompanying e-mail from Mr. Moutsios constitutes a written waiver
within the meaning of clause 13 at least in respect of Calogeras’ right to deny
Ceres the benefit of the term (such as 120 days) on all the outstanding
invoices (See TX 65).
[72]
Before
deciding whether it also constitutes a waiver in respect of Calogeras’ claim
for interest, the Court must mention that even before the issuance of the
December 2004 statement of account, Calogeras was estopped from claiming any
interest other than the $63,148.61 for I am satisfied that it had made clear
unequivocal representations to that effect to Ceres (specifically, an express
agreement by Mr. Kottos in respect of future interest followed by the issuance
of statements of account that did not include any new interest charges after
November 2003). This is not a case where the creditor was merely indulgent with
its debtor.
[73]
Also,
having had the benefit of consulting with legal counsel, it appears that
subject only to the alleged error in the rate of interest, Calogeras had
quantified the maximum amount of interest that could be charged on all the
invoices listed as due in the December 2004 statement. The difference between
the total amount of such interest (not more than $125,000) and the amount of
interest to which payments were reapplied in the summer of 2005 (plus the
balance of $134,000 of interest shown in TX 89) in the scenario set out in
paragraph 12(a) of the Amended Statement of Claim cannot be explained simply by
the difference in the interest rate and the few months elapsed since December
2004.
[74]
Turning
back to the events of January 2005, in addition to the exchange of e-mails
found at TX 67, TX 68 and TX 69 and the testimonies of Messrs. Moutsios
and Lagonikas, the record includes unexplained entries in Calogeras’ general
ledger in respect of the new interest charges added in the December 2004
statement of account. In effect, most of these interest batches which were deleted
from the January 25th statement of account (TX 69) are listed on
pages 2239-2240 of the ledger for the period ending August 31, 2005 under the
heading “Bad debt” but under the name of Harbour Shipping and Trading S.A.,
while others appear under the name of Atlas Ship Services Inc. and M/V
ISMINAKI. Many such entries appear to have been made as early as December 30,
2004.
[75]
Mr.
Moutsios evidently attempted to finesse his answer to Ceres’ clear request for
a statement of account listing all amounts owing “for any reason whatsoever”.
Still, the Court is convinced that the statement of account sent on January 25th,
2005 was meant to induce Ceres to believe, and they did so at the time, that
Calogeras had waived not only the $63,148.12 that had been left in the air in
November 2003, but all and any interest that could be owed on any amount past
due. This last item only confirmed the clear and unequivocal representations
made earlier by Mr. Kottos and by the statements of account issued until
the first letter of demand.
[76]
The
Court has no hesitation to find that in the particular circumstances it was
issued, it constitutes a written waiver duly signed by Mr. Moutsios on behalf
of Calogeras. Thus even if Calogeras were entitled to rely on the GTC, the
conditions set out in clause 13 would be met.
[77]
In
light of the foregoing, the Court concludes that Calogeras has not met its
burden
of establishing its claim pursuant to paragraph 12(a) of the Amended Statement
of Claim nor its claim for any interest set out in paragraph 12(b) of the said
document.
[78]
This
leaves the issue of the invoices for services rendered as set out in Mr.
Lagonikas’ affidavit. In the final argument, Calogeras’ counsel advised the
Court that the plaintiff was not pursuing its claim in respect of invoices
number 8308, 8309, 9618, 9978 and 10041. Calogeras thus claims that it can recover
at least $95,067.80 for the invoices set out in paragraph 17 of TX 113. The
Court agrees.
[79]
Having
carefully considered the issue of the credit notes in the amount of $27,010.73,
the Court is satisfied that despite Mr. Moutsios’ testimony in that respect,
this amount should not be deducted given that the various credit notes
applicable throughout the relationship have been included in the instructions
for payment of Ceres. The Court also accepts the representations of Calogeras’
counsel in respect of two deductions
made under paragraph 10 of Mr. Lagonika’s affidavit. This means that Ceres
should pay Calogeras a total of $99,171.16.
[80]
As
mentioned, the Court does not believe that any contractual interest is due on
such invoices. That said, the Court still has discretion to grant some interest
on this amount prior to judgment. Such interest is fixed at 5% per annum (not
compounded) as of March 1, 2010 (date Exhibit A was filed). The same rate of
interest shall apply after judgment.
[81]
Finally,
with respect to the attorney fees and the other costs claimed, it is trite law
that although the type of clause found on Calogeras’ invoices and in the GTC
(paragraph 7(e)) is generally recognized by courts, the Court always retains
discretion to reduce the amount recoverable when there are special
circumstances requiring it to do so. (See for example Bossé v.
Mastercraft Group Inc., [1995] OJ No 884, 123 DLR (4th) 161
(Ont. C.A.) at para
65. The same rule now prevails even in Québec: Groupe Van Houtte Inc. (A.L. Van Houtte
ltée) v. Développements
industriels et commerciaux de Montréal Inc., 2010 QCCA 1970 at paras
99 et seq). Here not only is there clear duplication of services due to the
change of solicitor in the accounts produced under TX 98, but it is clear that these
services do not all relate to the claim set out in new paragraph 12(b) of the
Amended Statement of Claim. Also, these invoices appear to already include
various court costs that would normally be part of the costs that will be dealt
with in a distinct order. It is thus best to leave this question to be
determined in the distinct order, which will also deal with other outstanding
issues relating to costs, especially since the fees of the last counsel who
actually argued the case on the basis of Exhibit A are not in the record.
[82]
Unless
the parties are able to come to an agreement, they shall have until January 30,
2011 to file their written representations (a maximum of 15 pages) in respect
of costs, including the question of costs recoverable under clause 7(e) of the
GTC (or similar clause in Calogeras’ invoices) and the special costs arising
from the admission of Exhibit A. Each party shall include an affidavit with its
pro forma Bill of Costs or invoices for legal fees, if appropriate, to
enable the Court to quantify the costs awarded. Each party will be entitled to respond
to the other party’s submissions (a maximum of 5 pages) on or before February
7, 2011.
JUDGMENT
THIS COURT ORDERS AND
ADJUDGES that:
1. The
plaintiff’s action is granted in part as follows: the defendant shall pay $99,171.16
with simple interest at 5% beginning March 1, 2010 until the date of payment;
2. The Court
retains jurisdiction to deal with the costs including special costs arising
from the granting of leave to file Exhibit A, as well as any fees or costs
recoverable pursuant to the terms of Calogeras’ invoices or clause 7(e) of its
General Terms and Conditions (edition 2002);
3. Submissions
in respect of the issues set out above in paragraph 2 shall be filed in
accordance with paragraph 82 of my Reasons.
“Johanne Gauthier”
ANNEX I
Calogeras
& Master Supplies Inc.
GENERAL
TERMS AND CONDITIONS (EDITION 2002)
Effective from
January 1st, 2002, these are the General Terms and
Conditions of Calogeras & Master Supplies Inc. and of its
affiliate(s) (hereinafter collectively referred to as the "Ship Supplier") pursuant to which all goods and
services are supplied bye the Ship Supplier to the subject vessel, its
owners, master and to the person or entity ordering same (hereinafter collectively referred to as the
"Buyers"). These General Terms and Conditions apply to every sale, provision or delivery of ship supplies or
necessaries by the Ship Supplier to the Buyers and to
any agreement as to the supplying of goods and services
between the Ship Supplier and the Buyers. These General Terms and
Conditions are completed by the specific terms provided for in the Ship Supplier's quotation, acknowledgement of
order, delivery note and other documents. These General Terms and
Conditions, together with the Ship Supplier's quotation,
confirmation or acknowledgement of order and delivery note, taken all together,
shall constitute the full agreement between the Buyers and the Ship
Supplier. In case of inconsistency, the text of the present General Terms and
Conditions shall prevail.
1. INCORPORATION:
All
agreements for the provision of goods and services by the Ship Supplier to the
Buyers incorporate or shall be deemed as incorporating the present General
Terms and Conditions notwithstanding any declaration or statement to the contrary made by the Buyers and notwithstanding
any omission as to their incorporation in the documentation used.
2. PRICES: The prices to be paid
for the goods supplied or services rendered by the Ship Supplier to
the Buyers shall be the price stated 'in the Buyer's confirmation or
acknowledgement. Unless otherwise specified, all quoted prices are free
alongside the (f.a.s.) or free on board
(f.o.b.) the subject vessel provided that the subject vessel lies at a public
wharf accessible, free of charges, by the Ship Supplier's truck(s) such that
the Buyers shall pay any additional expenses
or costs for the use of a launch or of boatman, for demurrage, wharfage,
port dues, duties, taxes, fees and any other costs including, without limiting the generality of the foregoing,
those imposed by governmental authorities.
3. QUALITY: Unless otherwise
specified, the goods and services supplied by the Ship Supplier to the Buyers shall be of the quality or grade expressly ordered
by the Buyer or, in the alternative, as available on the market
at the time and place of their source of supply. The Buyers shall
have the sole responsibility for the selection, quality and quantity of goods and services ordered from the Ship Supplier
and as to their fitness for their intended use or purpose.
4.
QUANTITY: Subject to the
other terms of these, presents, the quantity of goods and services supplied by
the Ship Supplier shall be as per the agreement reached with the Buyers as stated in
-the confirmation or acknowledgement of order. Notwithstanding acceptance of the Buyer's
order, the Ship Supplier's obligation to supply the stated quantities of goods or services is subject to their availability
from the Ship Supplier's sources of supply at the time of their delivery. Unless the Ship Supplier agrees in writing, the
refusal or failure by the Buyers to fake delivery of the whole or part
of the ordered goods shall not relieve the Buyers from its duty to pay in full
the agreed price for same.
5.
TITLE: The property in the goods supplied by the Ship Supplier shall not pass
from the Ship Supplier to
the Buyers until they are full paid and notwithstanding their delivery to the
Buyers.
6.
CLAIMS: The Buyers irrevocably waive any claim they may have
against the Ship Suppliers with respect to the goods and services supplied by the
Ship Supplier unless notice of such claim is given in writing to the Ship Supplier within 48
hours from the completion of their provision or delivery. Under no circumstances shall the
Ship Supplier's liability to the Buyers exceed the value of the subject goods supplied or
services rendered. Furthermore, there shall
be no liability whatsoever on the Ship Supplier's part or any indirect,
incidental or consequential loss or damages
sustained by the Buyers or for any loss or damages arising from delay.
7.
PAYMENT:
a)
Unless
otherwise specifically agreed to in writing, all payments for goods supplied or services rendered by the Ship
Supplier to the Buyers shall be made in full, without any deduction whatsoever, in
immediately available in U.S. or Canadian funds (as agreed between the parties) upon receipt of the Ship
Supplier's invoice without any discount,
set-off or deduction whatsoever for any claim or dispute.
b)
All overdue
amounts shall bear interest, compounded monthly, at the rate of 2% per month for 26.824% per annum) from the date
each amount became due. All payments received from the Buyers after any
amount is overdue shall be first applied to accrued interest and legal
collection costs before they will be applied to the overdue amounts. The Ship
Supplier shall otherwise be at liberty to apply partial payments received to any overdue account of its choice and notwithstanding any designation made by the Buyers
as to the application of such partial payment. Any waiver by the Ship Supplier
of interest or legal collection costs on a particular invoice shall not
be construed as a waiver of the Ship Supplier's right to impose such charges on other deliveries of goods or provision
of services.
c)
If a payment due date falls on a weekend or a bank holiday in the
country where the payment is to be remitted, Buyers must
then effect payment on a prior available banking day.
d)
The Buyers are responsible for the payment of all bank charges.
e)
In addition, the Buyers agree to pay the attorney's fees, court costs
and other collection costs of any overdue amount, including the costs of
putting up bonds for a ship arrest, attachment or other legal proceeding or otherwise
associated with the enforcement of the Ship Supplier's maritime lien.
f)
Notwithstanding
any term of payment agreed to between the parties for a specific order, all unpaid invoices shall immediately be
considered overdue and the Ship Supplier shall be entitled to immediately put
the Buyers on notice and to exercise all its legal recourses for the recovery
of all amounts due if:
i)
The payment of any invoice payable by the Buyers becomes overdue beyond the agreed payment terms;
ii) Anyone of the
Buyers becomes insolvent, in receivership, in liquidation or file for bankruptcy;
iii) The subject
vessel or any sister-ship of that vessel is arrested or attached by the Ship Supplier or a third party for
unpaid debts; or if
iv) A change in the financial
circumstances or structural organization of the Buyers occur without the Ship Supplier's consent and which give
reasonable ground to the Ship Supplier to believe that the amounts owed
to it by the Buyers are jeopardized or that
its security interest in any of Buyer's owned or operated vessels is
jeopardized.
8.
CREDIT AND MARITIME
LIENS:
a)All goods and services are supplied on the credit of the
supplied vessel and of its sister ships as well as on the promise of the Buyers
to pay same. Therefore, if is expressly
agreed between the Buyers and the Ship Supplier and the Buyers warrant that
the Ship Supplier hold and may assert a maritime lien against the supplied vessel or its sister ships for all amounts due by
the Buyers. This maritime lien shall extend to the freight, hire and
insurance proceeds owed to or collected by or on behalf of the Buyers in
relation to the supplied vessel or its sister ships. Any disclaimer of the
existence of such a lien stamped or otherwise added by the Buyers' on the Ship
Supplier's delivery note shall be invalid.
b)
If
goods and services are ordered by an agent, then such agent, as well as its principal, shall be bound by and fully
responsible for all obligations of the Buyers, whether the identity of
such principal is disclosed or not.
c)All agreements for the supplying of goods
and services are entered into with, in addition to all parties stated in the
Buyer's confirmation or acknowledgement of order,
the owners and the Master of the supplied vessel. Therefore, all orders made by
a crewmember, agent, management company, charterer, broker or any other party
in apparent authority are also deemed to have been ordered on behalf of the
owners of the supplied vessel.
9.
DELIVERIES
a) The Buyers shall give the Ship Supplier
minimum of 48 hours notice, excluding Sundays and holidays, of the ETA of the
subject vessel's arrival at the port of delivery.
b) To the extent that a delivery must be
effected outside normal working hours and is permitted by the pertinent port
regulations, the Buyers shall pay for all overtime and additional expenses
incurred by the Ship Supplier in order to effect such delivery.
c) The Buyers and its representatives on
site shall provide all necessary assistance and make available, at Buyers' sole
costs and expenses, all cranes and other equipment required to promptly receive
the ordered ship supplies or necessaries.
d) Subject to due compliance with the
foregoing provisions by the Buyers, the Ship Supplier shall endeavor its best
efforts to effect timely deliveries. However, unless expressly agreed to in
writing by the Ship Supplier, the Ship Supplier does not warrant the timeliness
of any delivery and shall not be liable for any consequence arising from delay.
e) If the actual delivery date is
significantly later than the contracted date, the Ship Supplier shall be
entitled to claim an increase of the agreed prices or, shall the vessel not
have arrived after 48 hours of the agreed ETA, the Ship Supplier shall have the
right to cancel the Buyers' order without prejudice to any other rights the
Ship Supplier may have.
f)
The Ship Supplier
shall be at liberty to sub-contract, in whole or in part, the performance of
any order.
10.
CONTINGENCIES:
a) The Ship Supplier shall not be in breach
of its obligations in the event that performance is prevented, delayed, or made
substantially more expensive as a result of any one or more of the following
contingencies, whether or not such contingency
may have been foreseen or foreseeable at the time of contracting and
regardless or whether such contingency is direct or indirect:
i) Labor disturbance:
ii) Compliance with a
direction, request or order from any competent state, governmental or port
authority;
iii) Shortage in
product, transportation or manufacturing from the Ship Supplier's contemplated
source of supply; or
iv) Any cause beyond
the reasonable control of the Ship Supplier, whether or not foreseeable.
b) In the event that
performance is prevented, made substantially more expensive or delayed by such a contingency, the Seller
may cancel a particular delivery or increase
prices in fair proportion of the increased costs of operation under such a contingency.
c)The Ship Supplier
shall not be liable for demurrage or delay resulting from such a contingency.
d) Quantities not sold or purchased due to
the occurrence of such a contingency may be reduced or eliminated at the
discretion of the Ship Supplier.
e)Nothing in this
provision shall excuse the Buyers from their obligation to pay for the services and ship supplies received.
11. TAXES AND COMPLIANCE: The Buyers will pay
to the Ship Supplier all applicable taxes and customs duties which may apply, if any. The Buyers will provide the Ship
Supplier with all documentation required for the purpose of
complying with all national and local requirements at the port of delivery.
12.
SAFETY: It shall be the sole
responsibility of the Buyers to comply and advise its personnel, agents and/or
customers to comply, both during and after delivery, with all the health and safety requirements applicable to the goods
and services which are supplied by the Ship
Supplier. The Ship Supplier shall not be liable for any consequences arising
from the Buyer's
failure to comply with such health and safety requirements.
13. NON-WAIVER AND SEVERABILITY: No waiver of any of the provisions of this Agreement shall be effective
unless it is in writing and signed by the Ship Supplier, and any such waiver shall only be
applicable to the specific instance to which it relates and shall not be deemed to be a
continuing of future waiver of any such breach. If any part of this agreement was held
invalid by a competent tribunal, all other conditions and provisions of this agreement shall remain in full force as if the invalid portion
had never been part of the original agreement.
14.
LAW AND
JURISDICTION:
a) The Ship Supplier
shall be entitled to assert its maritime lien in any country where the subject
vessel or its sister ships may be found. The creation and existence of a
maritime lien in favor of the Ship Supplier over the subject vessel and its
sister ship shall be governed by the general maritime law of the United States
of America and the laws of the State of New York. For the purpose of asserting
the Ship Suppliers' maritime lien, all goods and services shall be deemed as
having been supplied to the subject vessel in the port of New York regardless of the
actual location or the port(s) where the subject deliveries were in fact
effected.
b) Any proceeding or
legal action against the Ship Supplier shall be brought in the country and
before the Court of the competent jurisdiction where the Ship Supplier has its
principal place of business and the laws of such of such country and place
shall apply except as otherwise provided herein.
FEDERAL COURT
SOLICITORS OF RECORD
DOCKET: T-1478-05
STYLE OF CAUSE: CALOGERAS
& MASTER SUPPLIES INC. v. CERES HELLENIC SHIPPING ENTERPRISES LTD. and THE
OWNERS AND ALL OTHERS INTERESTED IN THE SHIP “CAP LAURENT” et al
PLACE OF
HEARING: Montreal, Quebec
DATE OF
HEARING: March
1 - June 15, 2010
REASONS FOR JUDGMENT: GAUTHIER
J.
DATED: December
22, 2010
APPEARANCES:
|
Mr. André A.
Lévesque
|
FOR THE PLAINTIFF
|
|
Mr. Jean-Marie
Fontaine
Mr. Mark
Phillips
|
FOR THE DEFENDANTS
|
SOLICITORS
OF RECORD:
|
André A.
Lévesque
118, rue de
Plaisance
Bonaventure, Qc
G0C 1E0
|
FOR THE PLAINTIFF
|
|
Borden Ladner
Gervais
Montreal, Qc
|
FOR THE DEFENDANTS
|
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