Date: 20080729
Docket: T-1740-04
Citation: 2008 FC 923
Montréal, Quebec, July
29, 2008
PRESENT: Richard Morneau, Prothonotary
ACTION IN REM
AGAINST THE VESSEL M.V. “GRATEFUL ONE”
ACTION IN PERSONAM
AGAINST THE OWNERS –
THANKFUL TOO FAMILY FISHERIES INC.
BETWEEN:
D'EON BOATBUILDING LIMITED
Plaintiff
and
THANKFUL TOO FAMILY
FISHERIES INC.,
THE VESSEL “GRATEFUL
ONE”, AND
THE OWNERS AND ALL
OTHERS INTERESTED
IN THE VESSEL M.V. “GRATEFUL ONE”
Defendants
REASONS FOR JUDGMENT AND JUDGMENT
Procedural background
(a) Was the
contract between the parties one of a fixed price to be adjusted in accordance
with agreed changes made and material supplied or was the contract one of a
cost plus nature ab initio?
(b) What is the
value of the material supplied by the Defendant?
(c) What is the
value of the changes made during the construction of the vessel?
(d) What is the
amount owed by the Defendants to the Plaintiff, consequent upon the Court’s
rulings on the above issues?
[3]
Both parties swore detailed affidavits and at trial, the
deponents were also called upon to provide rebuttal evidence orally. Each deponent
was also cross-examined by counsel for the adverse party. The General Manager
of D’Eon Boatbuilding, Michel Herman Surette, and the actual owner of the
company, Maurice Camille d’Eon, testified for the plaintiff.
[4]
Rodney Charles MacDonald testified for the defendant.
Facts
[5]
The facts concerning the key aspects of this case can be
summarized as follows.
[6]
Seeking to purchase a new fishing vessel to accommodate one
of his sons’ more aggressive fishing, Mr. MacDonald approached
Mr. Surette in November 2003 at D’Eon Boatbuilding to find out how much it
would cost to build such a boat.
[7]
This was not the parties’ first experience of this nature
since it appears that D’Eon Boatbuilding had built fishing vessels for
Mr. MacDonald twice before.
[8]
Beginning in November 2003, negotiations took place between
the parties during which Mr. Surette of D’Eon Boatbuilding prepared a certain
number of quotes. One of these quotes constitutes the basic contract between
the parties. However, they do not agree which one it is.
[9]
According to the defendant, it is the quote dated February
5, 2004, which was filed at tab 14 of the joint book of documents
(hereinafter JBD) whereas D’Eon Boatbuilding contends that it was the quote dated
April 21, 2004, filed at tab 20 of the JBD. This is one of the three major
substantive issues dividing the parties, which our analysis will seek to
resolve.
[10]
Whichever quote is accepted as the contract between the
parties, there is no dispute that during the construction of the vessel, Mr.
MacDonald asked for changes to the quote. This resulted either in additions
entailing more costs (the parties spoke of extras) or credits in favour of the
defendant; in the latter case, material described in the quote was not used or,
more often, Mr. MacDonald, on behalf of the defendant, provided the equipment
himself. Each party tendered in evidence its accounting of extras and credits.
This is the second factual issue dividing the parties.
[11]
Last, on September 15, 2004, members of Mr. MacDonald’s
family, acting under his instructions, seized the vessel before the defendant
had paid the final balance that was still being discussed by the parties. In
fact, on September 15, 2004, discussions on this point took place but later in
the day. This is the third issue dividing the parties.
I The contract between the parties
[12]
It is common ground that at the outset, most of the
discussions between Messrs. Surette and MacDonald focused on the construction
of a vessel with a 45-foot hull to be provided and paid by D’Eon Boatbuilding.
[13]
Thus, the quote of February 5, 2004, (tab 14 of the JBD)
refers to those facts and also provides that this quote was valid for a 60-day
period, which means that it was valid until around April 5, 2004.
[14]
The evidence shows that Mr. MacDonald ultimately wanted and
obtained a vessel with a hull that was five feet longer, i.e., a total length
of 50 feet. The final agreement also
stated that Mr. MacDonald himself would provide the said 50-foot hull to D’Eon
Boatbuilding. This hull was delivered to D’Eon Boatbuilding on or about April
21, 2004, after the February 5, 2004, quote had ceased to be valid.
[15]
Mr. Surette maintained in his affidavit and testified
confidently that he had given the said quote to Mr. MacDonald on April 21,
2004.
[16]
Although Mr. MacDonald testified that the first time he saw
this April 21, 2004, quote was during his discussions with representatives of
D’Eon Boatbuilding on September 15, 2004, I do not accept this version. In
fact, Mr. Surette seemed to me much more sure of himself when he testified that
he had given the said quote to Mr. MacDonald on April 21, 2004. Furthermore,
each of the four partial payments totalling $263,000 that Mr. MacDonald made to
D’Eon Boatbuilding while the work was being carried out on the vessel
corresponds roughly to 25% of the price or total cost that appears on the quote
dated April 21, 2004. Regarding this schedule of payments, I also do not accept
Mr. MacDonald’s version that these payments were made somewhat randomly after
sporadic requests by Mr. Surette to Mr. MacDonald. Rather, I believe that these
payments complied with the schedule of four payments that the parties had
agreed to.
[17]
Last, I believe that the various increases set out in the
April 21, 2004, quote were justified and were accurately communicated to Mr.
MacDonald by Mr. Surette during conversations they had before the quote was
drawn up. The Court concludes that Mr. MacDonald accepted all the information
in the quote.
[18]
The above facts are all facts that lead this Court to find
that the April 21, 2004, quote, which refers to a total cost, before
modifications, of $263,000 constitutes the basic contract between the parties.
[19]
This first finding enables the Court to comment on the
significance of a note at the end of the April 21, 2004, quote (this note is
also found on all the quotes exchanged between the parties). The note reads as
follows:
This project is based upon a “Cost + 10%” basis.
If any modifications or alterations are required it will reflect the “Cost + 10%”
basis.
[20]
In response to questions by the Court, Mr. Surette
testified that it must be understood that the cost of $263,000 in the quote of
April 21, 2004, already included the “Cost + 10%”. Thus, if no
additions had been made to the April 21, 2004, contract, this sum of $263,000
would have been considered the final firm price. In the case before me, since
there were extras, the second part of the note beginning with “If any” means
that any extra was to be calculated at “Cost + 10%”. This explanation
is accepted by the Court and is provided here to respond in the affirmative to
the first equation in question (a) that the Court had listed following the
pre-trial conference in this matter (see paragraph [2], supra).
II The accounting of extras and credits prepared by the
respective parties
[21]
As stated above, each party acknowledged that there were
extras and credits to take into account. Each of them prepared a document
reflecting that party’s accounting in this regard. D’Eon Boatbuilding’s is at
tab 22 of the JBD and the defendant’s is an exhibit to the affidavit of
Mr. MacDonald.
[22]
The parties did not really use Mr. Surette or Mr. MacDonald
as witnesses in Court to attempt to extensively undermine the accounting
exercise of the other party.
[23]
The only specific exercise that took place in Court in this
regard dealt with a deduction claimed by Mr. MacDonald in the final amount of
$9,200 ($14,000 - $4,800) relating to a hydraulic system. Mr. Surette testified
that this deduction was too high since Mr. MacDonald only provided the pump for
the system (not the entire system) and that the cost claimed by
Mr. MacDonald for this pump would be too high based on the appropriate
market.
[24]
Here again, the self-confidence in Mr. Surette’s testimony
and the reasonableness of tab 22 of the JBD lead me to accept D’Eon
Boatbuilding’s version and to extend it to all the extras and credits to be
calculated. Thus, the Court accepts the accounting of the extras and credits
prepared by D’Eon Boatbuilding at tab 22 of the JBD.
[25]
Although that document states that the defendant still owes
$30,328, I intend to limit D’Eon Boatbuilding’s claim to $27,979.23 since that
was the amount claimed by D’Eon Boatbuilding in its statement of claim. This
finding responds to questions (b) to (d) in paragraph [2], supra.
III The events of September 15, 2004
[26]
Two series of events come under this heading.
[27]
The first series of events has to do with the $63,000
payment made by Mr. MacDonald on September 15, 2004, i.e., the fourth
partial payment discussed earlier, and an agreement that the parties entered
into the same day, which provided that the balance of $27,979.23 would be
reduced by $5,000 if payment was made in the next two days.
[28]
Given that the Court has determined that the defendant must
pay $27,979.23 to D’Eon Boatbuilding, it does not seem necessary to analyze in
depth whether the payment of $63,000 made by Mr. MacDonald on September 15,
2004, was based on the contract of April 21, 2004, or whether the parties were
in agreement or not about the prompt payment of $27, 979.23. The evidence that
I heard leads me to answer those two issues in the affirmative. The testimony
of Messrs. Surette and d’Eon was more convincing that the sometimes hesitant
testimony of Mr. MacDonald about this sequence of events.
[30]
On the morning of September 15, 2004, although
Mr. MacDonald was well aware that he had not paid the full balance owing for
the construction of the boat, he nonetheless went to D’Eon Boatbuilding’s
shipyard around 5:30 a.m., accompanied by one of his sons and his
brother-in-law.
[31]
On the specific instructions of Mr. MacDonald, the two men
broke the padlock on the vessel that prevented access to the pilot’s cabin and,
it must be inferred, tampered with the vessel’s ignition so that they were able
to start it without having the keys. The men who assisted Mr. MacDonald escaped
with the boat to a location in New Brunswick.
[32]
After the vessel left the shipyard, Mr. MacDonald himself
left the shipyard. Several hours later when the representatives of D’Eon
Boatbuilding realized that the boat had left, they had great difficulty trying
to reach Mr. MacDonald to see if he was the person who had seized the boat
without their consent.
[33]
D’Eon Boatbuilding was right in denouncing this
unprecedented situation that Mr. MacDonald was unable to justify in any way
when he testified. In this regard, he put forward, inter alia, the fact
that the tides in the Bay of Fundy forced him to act quickly that morning.
However, on cross-examination, counsel for D’Eon Boatbuilding made it clear
that ultimately there was no emergency requiring Mr. MacDonald to act on the
sly as he did.
IV Conclusion
[34]
Accordingly, D’Eon Boatbuilding’s action will be allowed
based on its findings, and the defendants shall pay to the plaintiff the sum of
$27,979.23, with post-judgment interest and costs in accordance with column III
of Tariff B.
JUDGMENT
The
action of the plaintiff D’Eon Boatbuilding Limited
is allowed based on its findings, and the defendants shall pay to the plaintiff
the sum of $27,979.23, with post-judgment interest and costs in accordance with
column III of Tariff B.
“Richard
Morneau”
Email this Content