Date: 20000223
Docket: T-891-94
Action in rem against the vessel "CHERKASSY" and the vessel "ANADYR"
(a sister ship) and in personam against the owners and charterers
of the vessel "CHERKASSY"
Between:
PIONEER GRAIN COMPANY LTD.,
M/S SAMPAT INDUSTRIAL AND CONSTRUCTION
CO. LTD., ALL OTHERS HAVING AN INTEREST
IN THE CARGO LADEN ON BOARD THE VESSEL
"CHERKASSY",
Plaintiffs/Appellants
- and -
FAR-EASTERN SHIPPING CO. (FESCO),
THE OWNERS AND CHARTERERS OF THE
VESSELS "CHERKASSY" AND "ANADYR"
AND THE VESSELS "CHERKASSY" AND "ANADYR",
Defendants/Respondents.
Heard at Vancouver, British Columbia on January 31, 2000.
Order delivered at Ottawa, Ontario on February 23, 2000.
REASONS FOR ORDER BY: MULDOON J.
Date: 20000223
Docket: T-891-94
Action in rem against the vessel "CHERKASSY" and the vessel "ANADYR"
(a sister ship) and in personam against the owners and charterers
of the vessel "CHERKASSY"
Between:
PIONEER GRAIN COMPANY LTD.,
M/S SAMPAT INDUSTRIAL AND CONSTRUCTION
CO. LTD., ALL OTHERS HAVING AN INTEREST
IN THE CARGO LADEN ON BOARD THE VESSEL
"CHERKASSY",
Plaintiffs/Appellants
- and -
FAR-EASTERN SHIPPING CO. (FESCO),
THE OWNERS AND CHARTERERS OF THE
VESSELS "CHERKASSY" AND "ANADYR"
AND THE VESSELS "CHERKASSY" AND "ANADYR",
Defendants/Respondents.
REASONS FOR ORDER
MULDOON J.
[1] This is an appeal by the plaintiffs/appellants from the prothonotary's order dated December 15, 1999, wherein the prothonotary allowed the defendants/respondents' motion to strike out the plaintiffs' statement of claim, for their failure to comply with Prothonotary Hargrave's order dated March 25, 1999, his order dated April 20, 1999, his order dated July 21, 1999, and Associate Chief Justice Richard's order dated September 20, 1999, together with taxable costs of the action awarded to the defendants.
[2] In their statement of claim, the plaintiffs allege that they suffered damages to a portion of cargo which was carried by the "CHERKASSY" from Vancouver to Mumbai, India, in the amount of $351,775.80 (U.S.). In his reasons of December 15, 1999, the Learned Prothonotary wrote, in paragraph [1] that the (ultimate) motion was successful because the breach of the Court's orders, in that ultimate instance constituted conduct amounting to abuse. The Learned Prothonotary was quite correct in that assessment.
[3] In paragraph [2] et. seq. of the prothonotary's reasons herein, he stated:
| [2] There is no doubt that some of the [cargo of dried] peas became wet during ocean carriage, however the Defendant, Far Eastern Shipping Co., quite properly, wished to be certain as to the actual amount of damages suffered once all of the cargo had been sold. After a series of requests, motions, and partial discoveries, the Defendant was unable to obtain from M/S Sampat Industrial and Construction Co. Ltd. (also referred to as "Sampat") the production of documents ordered by the Court. Thus this motion to strike out the Statement of Claim, not, as might have been argued, on the basis of delay and lack of interest on the part of the Plaintiffs, as was the case in Trusthouse Forte California Inc. v. Gateway Soap & Chemical Co. (1999), 86 C.P.R. (3d) 28 (F.C.T.D.), but on the basis of a breach of a series of specific orders from the Court for production of documents. This result is a drastic one, but the result reflects the circumstances. However, the result is not a reflection upon counsel for the Plaintiffs, or upon the co-Plaintiff, Pioneer Grain Company Ltd., or upon subrogated underwriters. |
| [3] Beginning with some relevant procedural events, the Defendant has not been able to obtain production of a certain and specific run of computer-produced documents from the Plaintiff, M/S Sampat Industrial and Construction Co. Ltd., of Bombay, documents acknowledged by Sampat to exist, in storage near Calcutta. The documents, being clearly relevant, for they consist of original computer printouts, including invoices, prepared for tax purposes, are documents by which the Defendant might test the damages claimed: the relevance of such material is clearly set out in Redpath Industries Ltd. v. The Crisco, [1994] 2 F.C. 279 (F.C.A.). In The Crisco the Plaintiff sugar refiner blended small amounts of damaged raw sugar with undamaged sugar, sharply reducing the damage claim. Here the Defendant wishes to explore, by the discovery process, a similar possibility. |
| [4] Turning to the prosecution of the claim, this action for some $350,000 (US) was commenced in April of 1994, about a year after the cargo was shipped. In due course, the action having apparently languished, the Court issued a Notice of Status Review, in effect a show cause request requiring the Plaintiffs to explain why the action ought not to be dismissed for delay. From the submissions to the Notice of Status Review it is clear that sound market value of the cargo on arrival was a contentious issue, that the Defendant had requested documents bearing on the sound market value, leading to the determination of the quantum of the claim and that the material by which to test the sound market value had not, in the Defendant's view, been produced. This brings us to a series of motions and orders for production of documents and for examinations for discovery. |
[4] The prothonotary's paragraph [5] is quite telling against the plaintiffs apparent sloth and neglect in prosecuting this action which the plaintiffs themselves have levied against the defendants. The Learned Prothonotary observed: "the plaintiffs had, between the loss in 1993 and the production of their affidavit of documents nearly three years later, 14 February 1996, ample time to consider, learn about and understand their case and" how to prove their case. Nevertheless, the plaintiffs affidavit as to documents was notably deficient because it contained little or no material as to the sale, storage, handling or ultimate disposition of the peas cargo. Requests for such material went begging. So, the defendants on March 29, 1999, received an order to the effect that the plaintiffs were obliged to provide a further and better affidavit as to documents on or by April 19, 1999. That order was quite specific, and is summarized in particular in paragraph [5] of the prothonotary's reasons of December 15, 1999. The plaintiffs neglected or refused to comply with that order by April 19, 1999.
[5] The defendants obtained a second order on April 20, 1999 requiring the plaintiffs to produce a witness from Sampat, a representative of the surveyor who attended at the cargo's discharge and to produce all the documents ordered on March 29, 1999. The plaintiffs failed to honour that second order, but the witness from Sampat, Mr. Kothari, related that all of the documents sought by the defendants were lodged in a warehouse in Gauhati, north of Calcutta. Given the documents' apparently easy accessibility, it is strange indeed that the plaintiffs persist in their provocative resistance to obeying the Court's orders. This, after all, is the plaintiffs' action at law, not the defendants'.
[6] Worth repeating here are paragraphs [8] through [13] of the Learned Prothonotary's reasons dated December 15, 1999:
| [8] The Plaintiffs, failing to produce the requested documents during the next dozen weeks, the Defendant [sic] brought a motion in July, 1999, seeking, among other things, to strike out the Statement of Claim or, as one of several alternatives, a further order for a further and better affidavit of documents and that the next trip to India, to complete the discovery of Mr. Kothari, be at the Plaintiffs expense. I decided that the motion to strike out, in view of failure to comply with previous Orders, came perilously close to success however, because it would be a Draconian remedy, the Plaintiffs ought to have another opportunity to produce documents and thus another specific Order as to what must be produced, including the documents said to be at the Gauhati warehouse, with the Plaintiffs paying the costs and disbursements of Defendant's counsel and court reporter for their second attendance in India. Production was to be accomplished on or before 20 September 1999. |
| [9] The Plaintiffs were apparently unable to provide the documents within the required time. They thus brought a motion before Associate Chief Justice Richard, as he was then, to obtain further time for production. They succeeded on that motion, for while the Associate Chief Justice required production of the documents as previously ordered, he extended the time for production until 10 a.m. on 3 November 1999, with examinations for discovery in India to be completed by the 5th of November 1999. Here I would note and this is not contradicted, that there was an [sic] statement by Plaintiffs' counsel, to the Associate Chief Justice, that if documentation were not produced the action must be dismissed. This brings us to the present motion and the events leading up to it. |
| [10] The Defendant has established, on discovery, that the original computer printouts, which were done for tax purposes, are in a warehouse at Gauhati, in eastern India, where the actual records of the Bombay operation of M/S Sampat Industrial and Construction Co. Ltd. are kept. Counsel for the Defendant also established that the discovery witness knew that there were, as of the November 1999 discovery, four outstanding Federal Court Orders for production of specific documents, but reasoned that similar material might be reproduced by computer and thus it was not necessary to produce the earlier specific material. Moreover, the witness said that to go to Gauhati and bring the documents back would cost a lot of money. The witness suggested that counsel was most welcome to travel to Gauhati and search for the documents himself. Here one notes a certain lack of interest in the whole proceeding by the Plaintiffs' witness, but probably M/S Sampat Industrial and Construction Co. Ltd. had already been paid out by their subrogated underwriters. Indeed, the witness deposed, at page 135 of the discovery transcript, through counsel, that: |
| The invoices for all the sales exist in a ledger, in a book, and they've been marked, but these cannot be produced, they have to keep them, so what they've done is from their computer, they've produced an exact same copy of the invoices. |
| Thus, in the view of the witness produced by Sampat, there was no need to produce the documents from Gauhati. |
| [11] Finally, that witness, Mr. Kothari, said, on the 5 November 1999 discovery in India, that Sampat had checked its files in Gauhati and the material in those files was the same as the computer in Bombay would produce and thus: "... there was no point in bringing the same documents from Gauhati to here." (Page 164 of the transcript). In effect Mr. Kothari, in the face of four Court Orders, seemed to be making some decision as to the relevance both of a small bundle of documents and of the Court's Orders. |
| [12] Counsel for the Plaintiffs, doing the best that he might for his clients, sought to rationalize the failure to produce as a cultural misunderstanding and an error on the part of counsel who did not realize that while the original invoices generated for tax purposes were in Gauhati, that material was in fact computer generated, with the original information being in the computer. That is putting the best possible light on the matter, but it does not explain the failure to produce accessible specific documents in the face of four clear and specific Court Orders. |
| [13] Nor did the Plaintiffs seek to mitigate the situation by offering, either by affidavit or even by letter produced in the Plaintiff's motion brief, to bring the documents from Gauhati. Indeed, given the lead time on the present motion it would have been a simple matter for M/S Sampat Industrial and Construction Co. Ltd. to have the documents brought from Gauhati to Bombay and delivered or faxed to counsel for the Defendants. Alternately, given the large amount at stake, someone could have been sent from Canada to Gauhati to bring the documents, for Sampat says, through its witness, that it knows exactly where the documents are located. Instead, near the very end of the hearing of the present motion, when it became fairly obvious that things were not going well for the Plaintiffs, counsel for the Plaintiffs offered to try to bring the documents from Gauhati. This was far too late given the past history of the Plaintiffs ignoring the Orders of the Court for production. |
[7] Paragraph [14] of the prothonotary's reasons states the plaintiffs' point, that the original documents are in the computer and all else is a copy, but "documents" include any material which can be read, computer preserved records being no exception. The prothonotary continued in his paragraphs [15] and [16] to state without error:
| [15] At issue is the breach of four Court Orders, with some rationalization, but without any excuse. Now a court will not generally strike out a claim when production of documents does not comply with a court order, for that is a drastic remedy. Yet orders are meant to be obeyed so long as it is reasonably possible to do so. When the failure to comply is conduct amounting to an abuse an action will be terminated and here I would refer to Smith Packing Corporation v. Gainvir Transport Ltd. (1992), 46 F.T.R. 62, a decision of Mr. Justice MacKay. In Smith Packing the plaintiffs sought to strike out a defence because a list of documents filed by the defendant, pursuant to Court Order, did not comply either with the Court's Order or with the Federal Court Rules. Mr. Justice MacKay noted that: |
| The relief sought, striking the defence, is a very drastic remedy for procedural failure and it ought not to be provided except where it is very clear that the defendant party's conduct constitutes an abuse of the process of the Court. (Page 70) |
| [Emphasis not in prothonotary's text.] |
| [16] In the present instance there is a clear abuse by a Plaintiff who has ignored four Court Orders for production of documents, even though the documents are, by the Plaintiff's own admission, in existence and available. The Defendants are entitled to see that specific set of documents. They have been frustrated time and again by a Plaintiff who seems to have no interest in producing the documents and who is prepared to run the risk associated with ignoring four specific Court Orders. The action is thus dismissed by reason of abuse of process. |
[8] There is no error of law here. Surely to have initiated an action in Court, and then to ignore the Court's orders for the better management of the proceedings, is to abuse the Court's process. In civil proceedings in which the abusive party can be dealt with simply by dismissing that party's pleadings (by which such party is seeking the Court's aid) the Court is, according to its well known rules, amply justified in denying its aid to the abuser. On page 17 of the transcript of the hearing the plaintiffs' counsel is reported as allowing: "that in some other circumstances" his clients' behaviour could amount to abuse of process. On pp. 17 and 18, that same counsel is reported as quoting the prothonotary in holding that the defendants/respondents' "motion is successful because the breach in this instance constitutes conduct amounting to abuse", tab MR4, the small binder. The prothonotary did not err.
[9] There was no surprise, in this appeal from the Learned Prothonotary's decision, that both sides cited the case of The Queen v. Aqua-Gem Investments Ltd. [1993] 2 F.C. 425 (C/A). Various passages were referred to by the parties' respective counsel. Perhaps the pithiest passage in that appellate judgment comes from the majority's opinion at p. 464, thus:
| Jala Godavari should not, I think, be read as meaning that the prothonotary's discretion should never be respected, but rather that it is subject to an overriding discretion by a judge where the question involved is vital to the final issue of the case. (Error of law is, of course, always a reason for intervention by a judge, and is not in any way in controversy). |
Here, this judge finds no error in the cited decision nor in the prothonotary's decision.
[10] The defendants/respondents' counsel mentioned to the Court that one of his adversary's affidavits ought strictly to be inadmissible, but that he would consent to its admission for illustrative purposes. The transcript runs thus, starting at p. 69 and proceeding to p. 71:
| MR. HAWKINS: My Lord, my friend a few moments ago referred to the new affidavit, and it wasn't an affidavit that was before Prothonotary Hargrave but it contained -- it does contain two letters that he wrote to the Indian receivers, the plaintiff Sampat, after Prothonotary Hargrave's order to dismiss the action. |
| THE COURT: Yes, well, ought I to pay no attention to that affidavit? Is that what you're moving? |
| MR. HAWKINS: No, My Lord. I think -- we had some discussion about that, but I am prepared to deal with it because I think it's very telling. |
| MR. HAWKINS: If you'd turn, My Lord, to the MR1 in the little black binder, that's the Amended Notice of Motion, and there's the short affidavit of Ms. Bernier, and then there's Exhibit A. |
| So that's page 7 of Exhibit A of MR1. And I'm not going to read the letter, but the letter is as Mr. Bilodeau suggests. It's simply a letter from him to Mr. Kothari directly, dated December 13th, 1999, after this case was struck, basically saying: The case was struck, we want to appeal, we demand you produce these documents and invoices from Guwahati. |
| The second letter, if you turn over the page a couple of pages, I guess it's page 10, there's a handwritten "page 10" at the bottom. That's the second letter that my friend wrote, again a few days later on the December 17th to Mrs. [sic] Kothari in India saying, you know: Here's the order. The case is dismissed. We filed a Notice of Appeal. |
| "We reiterate our demand to be provided with two copies of the documents located in your Guwahati warehouse which we require to successfully appeal the order striking the claim." |
| Nothing. There's no other evidence. The plaintiffs didn't even respond, from what I can see. |
| THE COURT: You mean Mr. Kothari did not even respond? |
| MR. HAWKINS: There's nothing else filed. Now, we talked about the deathbed repentance. In my respectful submission, My Lord, this says it all, these two letters say it all. My friend has gone -- |
| THE COURT: So that's why you were willing to tolerate their introduction. |
| MR. HAWKINS: Yes, My Lord. |
| I understand my friend is in a difficult position, but the fact is he has done everything he can, I suppose. And I may say that -- and he has brought up the fact that he has underwriters involved. Fair enough. To my knowledge, there's no evidence from the underwriters that a representative went to India, knocked on Mr. Kothari's door and said, "We're going to Guwahati to get these documents," before or after the order -- certainly after this order. And someone should have gone over there, clearly. |
[11] This litigation occurs strictly in the area of private law, so there is no overriding reason of public law why the parties should not be entitled to put such relevant evidence as they choose before the Court. In the area of private law litigation, the litigation "belongs" to the parties, and not to the public, to the Court, or to the State. On the other hand, the law is clear -- matters and documents in cases such as this, which were not before the first-instance tribunal, are simply inadmissible on review or appeal. In this instance, probably the private law consideration ought to prevail, but this judge will leave it to another judge on another day to produce the definitive solution.
[12] As has been emphasized herein, this is the plaintiffs' action and they have abused the Court's process as they or some of them saw fit, apparently without their counsel's complicity, but this last factor subtracts nothing from the plaintiffs' liability for costs, because their abusive conduct cannot be condoned or overlooked. Costs of high-range, Column IV of tariff B, are hereby awarded to the defendants/respondents payable forthwith after agreement as to quantum, or forthwith after assessment.
"F.C. Muldoon"
F.C. Muldoon
Ottawa, Ontario
February 23rd, 2000
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