Date: 19980811
Docket: T-2057-85
BETWEEN:
PORTO SEGURO CAMPANHIA DE SEGUROS GERAIS
Plaintiff,
AND:
BELCAN S.A.
- and -
FEDNAV LIMITED
- and -
UBEM S.A.
- and -
THE OWNERS AND ALL OTHERS INTERESTED IN THE VESSEL
"FEDERAL DANUBE"
- and -
THE VESSEL "FEDERAL DANUBE"
Defendants.
REASONS FOR ORDER
JOYAL, J.
[1] This is a motion brought by the Plaintiff for an order revising in part an Order rendered by the Prothonotary on April 28, 1998, for payment out of a portion of the security for costs and the interest accrued thereon held by the Registry.
The Facts
[2] On December 11, 1984, the MV Beograd collided with an anchored ship, the MV Federal Danube, in the St. Lawrence Seaway. The collision allowed water to enter the holds and damage the cargo on the Beograd. The plaintiff, Porto Seguro, insurer of the cargo, made good the loss and sued the owners of the two vessels for compensation. I note that at the trial of the action, the Court was assisted by two assessors. In the event, the trial judge had refused to allow to entertain the evidence of three experts called by the plaintiff.
[3] The plaintiff's action against the defendants was dismissed: (1994), 82 F.T.R. 127. The case was appealed on the ground that the trial judge's refusal to hear the expert witnesses constituted a denial of natural justice. The Federal Court of Appeal, by a two-to-one majority, dismissed the appeal: [1996] 2 F.C. 751. The plaintiff then appealed to the Supreme Court of Canada, which allowed the appeal and ordered a new trial: [1997] 3 S.C.R. 1278. The plaintiff was also allowed its costs before the Supreme Court and before the Federal Court of Appeal.
[4] In April 1998, both the plaintiff and the defendants filed their respective motions pursuant to section 315 of the Federal Court Rules, asking the Court to allocate to either one or the other or both of them, in whole or in part, the amounts posted by the plaintiff as security for the defendants' costs in the first trial.
The Prothonotary's Decision
[5] The Prothonotary dismissed in full the plaintiff's motion, indicating that the Supreme Court of Canada had ordered a new trial, but had not ordered that the parties be reinstated to the status quo ante. As well, the Prothonotary noted that orders for security rendered under section 446 of the Federal Court Rules should not be altered, since no future order for security could have a retroactive effect to cover the costs already engaged by the defendant in the past proceedings.
[6] The Prothonotary also dismissed, in part, the defendants' motion, since the Supreme Court of Canada had not granted costs to them for the first trial, but he agreed with the alternative demand that the monies paid in not be touched at this time. The Prothonotary also ruled that the plaintiff's application should be refused and that the amount of security should be kept in Court for ultimate disposal by the trial judge at the new trial.
The Issue
[7] The plaintiff takes issue with the Prothonotary's decision, submitting that a part at least of the security paid in by the plaintiff should be returned.
Standard of Intervention
[8] In recent years, two approaches have been taken by the Court with respect to intervention in a Prothonotary's decision1. Of these two approaches, the second one seems to have earned the favour of this Court.
[9] In Canada v. Aqua-Gem Investment Ltd., supra, the Federal Court of Appeal departed from its more interventionist stand and held that, although the Trial Division retains the power to exercise its discretion de novo on an appeal from a Prothonotary's decision, this power should only be exercised under specific circumstances. Mr. Justice MacGuigan, for the majority, articulated the following standard at pp. 462-63:
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I also agree with the Chief Justice in part as to the standard of review to be applied by a motions judges to a discretionary decision of a prothonotary. Following in particular Lord Wright in Evans v. Bartlam, [1937] A.C. 473 (H.L.) at page 484, and Lacourcière J.A. in Stoicevski v. Casement (1983), 43 O.R. (2d) 436 (Div. Ct.), discretionary orders of prothonotaries ought not to be disturbed on appeal to a judge unless: |
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(a) they are clearly wrong, in the sense that the exercise of discretion by the prothonotary was based upon a wrong principle or upon a misapprehension of the facts, or; |
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(b) they raise questions vital to the final issue of the case. |
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Conclusion
[10] The Prothonotary's decision in the present case does not require intervention as is contemplated in the first part of the Aqua-Gem test. It is clear to me that the decision was not based on a wrong principle or upon a misapprehension of the facts.
[11] As for the second part of the test, I do not think that the question of costs is vital to the final issue of the case at hand. The issue is purely a new trial to determine the responsibility of either or both parties for the marine collision. Furthermore, the monies in Court are not in jeopardy.
[12] The issue is one of costs which the plaintiff, a non-resident, has paid in as security for the defendants' costs. There is an item for the services of the assessors at the trial of the action, which the Court paid and which was reimbursed by the plaintiff after the trial. There is also the item of costs awarded to the plaintiff for both the Federal Court of Appeal proceedings and for the appeal to the Supreme Court of Canada. As of the date of the appeal before me, no application to tax these costs had been filed by the plaintiff, but one can presume that some amount might be set-off. And finally, there is the fact that the Supreme Court did not deal with the issue of costs of the trial proceedings. One can only presume that the Court preferred to leave that to the discretion of the trial judge presiding at the new trial.
[13] It appears to me to be well-settled practice that costs at trial should be left to be decided by the judge hearing the new trial2. Depending on the outcome, the question of costs and the amount paid in to date will be the subject of the trial judge's ruling. In the meantime, I believe the learned Prothonotary was right in refusing to order any payment out and in maintaining the status quo.
[14] The appeal is therefore dismissed with costs, payable by the plaintiff, in any event of the cause.
L-Marcel Joyal
J U D G E
O T T A W A, Ontario
August 11, 1998.
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1 See Canada v. "Jala Godavari" (The) (1991), 135 N.R. 316 (F.C.A.); and Canada v. Aqua-Gem Investment Ltd. [1993] 2 F.C. 425. (F.C.A.).
2 Orkin, Mark M., The Law of Costs , 2d Edition, Aurora: Canada Law Book Inc., 1997, at p. 2-174.14.
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