Date: 20000330
Docket: T-738-96
BETWEEN:
HOLT CARGO SYSTEMS, INC.
a body corporate
Plaintiff
- and -
MESSRS T. VAN DOOSSELARE AND
F. DE ROY AS TRUSTEES IN BANKRUPTCY
OF ABC CONTAINERLINE N.V.THE OWNERS,
CHARTERERS AND ALL OTHERS INTERESTED
IN THE SHIP "BRUSSEL" AND THE SHIP
"BRUSSEL"
Defendants
- and -
SOCIÉTÉ NATIONALE DE CRÉDIT A L'INDUSTRIE S.A.
Intervenor
ASSESSMENT OF COSTS - REASONS
François Pilon
Assessment Officer
[1] Mr. Tom Hart, counsel for the plaintiff, filed a Statement of Claim on March 30, 1996 and requested the issuance of a Warrant against the ship "Brussel". In May 1996 the plaintiff obtained Court orders for default judgment against the defendants and for the appraisement and sale of the vessel. Following two months of complex litigation the ship was sold at an auction in Halifax on July 24, 1996 in the amount of $6,313,270.00. Except for a few partial payments out of Court most of the principal sum still remains in the Consolidated Revenue Fund (hereafter called the " Fund").
[2] On February 11, 2000 the Court rendered a Judgment allowing the plaintiff's costs in the following terms:
| c) cost to the plaintiff of solicitors' fees, on a solicitor-client scale, for arranging appraisal and sale of the ship "Brussel", which are not yet paid, shall be paid from the fund as costs akin to Marshall's costs incurred for the general benefit of creditors when a claim by the plaintiff, with a bill of costs for all reasonable expenses, as here allowed, is presented to the Registry. |
[3] The plaintiff's bill of costs, filed on March 2, 2000, is meant to compensate counsel for the plaintiff for his fees in arranging for the appraisement, advertisement and sale of the "Brussel". Those fees, presented on a solicitor client basis, are fully recoverable if held to be appropriate and reasonable.
[4] The plaintiff's actual expenses to arrange for the appraisement, advertisement and sale of the ship have been taxed and paid from the Fund in September 1996 in the amount of $42,365.57.
[5] The law firm of Brisset Bishop, who acted on behalf of the defendants at the onset of the litigation, continued to act on behalf of the Trustees in Bankruptcy after being so appointed by a Belgian Court. Mr. David Colford is the solicitor of record. He has filed a Notice of Objection with respect to the plaintiff's bill of costs and relies on his representations made before the Assessment Officer.
[6] Mr. Edouard Baudry had filed a notice of application on June 11, 1996 for leave to intervene in the action on behalf of the Société Nationale de Crédit à l'Industrie, S.A.., holder of first and second ranking ship mortgages on the ship "Brussel". Leave to intervene was granted by the Court shortly thereafter.
First contested Issue
Does the bill of costs relate exclusively to plaintiff's fees in arranging for the sale of the ship?
Submissions on behalf of the Trustees in Bankruptcy and the Intervenor.
[7] Mr. Baudry argues that a good deal of the work in the litigation during the four month period between the arrest and the sale of the ship relates to various issues other than to arrange for the sale of the vessel. Among many others, counsel mentions hearings in Montreal before the Quebec Superior Court where the jurisdiction of the Federal Court was challenged. Mr. Baudry maintains that Mr. Hart is trying to recover fees associated with several distinct aspects of the litigation which were not linked to the sale process. Mr. Colford supports Mr. Baudry's contentions.
Submissions on behalf of the plaintiff.
[8] Mr. Hart replies that he chose to follow the usually simple process of a judicial sale according to the Rules of the Federal Court so that the Fund created from the proceeds of sale would be for the benefit of all potential creditors. Counsel emphasizes that during the course of arranging for the judicial sale several other important issues were brought up by other interested parties and those issues had to be dealt with prior to the completion of the sale.
[9] As mentioned briefly by counsel, one can refer to the Court file and take notice of the different applications heard by the Court between April and July 1996 such as:
- motions to discharge containers;
- defendants' motion to move the ship;
- motions to sell abandoned cargo;
- plaintiff's motion for default judgment;
- plaintiff's motion for appraisement and sale;
- defendants' motion to re-consider an Order;
- defendants' motion for a reversal and variation of Judgment;
- Trustees' motion for leave to file a conditional appearance, to set aside the arrest and to stay the action;
- motion for leave to intervene;
- motions on behalf of several potential claimants to extend time to file claims;
- Trustees' motion for directions regarding the sale process;
- Trustees' motion to say execution pending hearing of an appeal.
[10] Counsel further argues that the various applications filed by the Defendant/Trustees and by the Intervenor not only delayed the sale process, but were intended to prevent the ship to be sold in the Federal Court.
Disposition
[11] I accept Mr. Hart's statement that the items listed in his bill of costs which do not relate to his arranging for the appraisement and sale of the ship "Brussel" are not very significant.
[12] Furthermore, I also accept Mr. Hart's argument that his priority at that time was to conclude the sale process for the benefit of all creditors. I find that his own notice of motion for appraisement and sale reflects clearly what he intended to do. Paragraph (b) of the grounds for the motion is reproduced below:
| (b) that the Defendant ship is subject to numerous claims filed in this Court by way of Statements of Claim in other proceedings and by way of caveats against the release of the vessel from arrest; the Defendant, ABC Container line N.v. is in bankruptcy in its home jurisdiction of Belgium and the value of the ship available for distribution to creditors is falling day by day due to the incurrance of crew costs, port charges and berthage which may take priority over the claims of the Plaintiff in this proceeding and other claimants. |
[13] Finally I agree with Mr. Hart's argument that the various issues brought up by the Trustees and by the Intervenor to delay or prevent the sale of the ship had to be dealt with by the parties and by the Court before a final sale could take place. I will therefore answer the first contested issue in the affirmative.
Second contested issue
Does the bill of costs reflect counsel fees for professional services provided to the plaintiff as well as to other claimants?
Plaintiff's submissions
[14] Mr. Hart does not dispute the fact that the bill of costs includes fees in relation to services rendered to the plaintiff as well as to various U.S. maritime liens claimants. Counsel confirmed from invoices that the proportion of work done on behalf of the plaintiff as opposed to other claimants is in the ratio of sixty percent (60%) to forty percent (40%).
[15] Mr. Hart argues that his fees should not be reduced because he has spent a great deal of time and effort to make the judicial sale possible in the first place which in turn created a Fund from which many potential creditors could be compensated. Counsel maintains that the fees came out of the same account and was billed globally.
Submissions on behalf of the Trustees and of the Intervenor
[16] Mr. Baudry and Mr. Colford argue that the bill of costs includes fees for services rendered to the plaintiff as well as to many other claimants who were also represented by Mr. Hart during the sale process. They maintain it would not be reasonable for Mr. Hart to collect from the sale Fund the portion of his fees for services rendered to parties other than to the plaintiff.
[17] In support of the above submission Mr. Baudry refers to the Judgement of the Court allowing "costs to the plaintiff of solicitor's fees". Mr. Colford also refers to paragraph [45] of the Reasons for Judgment of the Court which specifically refers to solicitor's costs for Holt Cargo Systems Inc., the plaintiff in these proceedings. Counsel feel strongly that it would not be fair to expect fees for services provided by Mr. Hart to other claimants to be paid from the proceeds of the sale of the ship. In their view the Judgment of the Court is clear on this issue. Mr. Baudry and Mr. Colford do not object to the proportion of 60-40 as indicated by Mr. Hart in his representations.
Disposition
[18] Although Mr. Hart's work and efforts during that specific period can be appreciated, this issue is decided in favour of Messrs. Baudry and Colford. Mr. Hart has been allowed to recover his solicitor"s fees for professional services provided to Holt Cargo Systems Inc. I think it would be unfair and unreasonable to include fees for services to any other client. In my opinion the wording of the Judgment and the Reasons for Judgment support this conclusion.
[19] Accordingly the amount of $59,550.00 claimed for solicitor's fees will be reduced by 40%. The sum allowed is $35,730.00.
[20] The amount of $7,820.94 sought for miscellaneous items of disbursements was explained by Mr. Hart and was not opposed by counsel for the other parties. It will therefore be allowed as presented.
[21] The amount of $4,715.96 for the GST is reduced to $3,048.56 to reflect the lower amount allowed for counsel fees.
[22] In conclusion, the costs of the plaintiff are assessed in the amounts of $35,730.00 for fees, $7,820.94 for disbursements and an adjusted amount of $3,048.56 for GST. A Certificate of Assessment in the total amount of $46,599.50 will issue accordingly.
"Francois Pilon" Francois Pilon
Assessment Officer
Halifax, Nova Scotia
March 30, 2000
TRIAL DIVISION
NAMES OF SOLICITORS AND SOLICITORS OF RECORD
HOLT CARGO SYSTEMS, INC., a body corporate
Plaintiff
- and -
MESSRS T. VAN DOOSSELARE AND F. DE ROY AS
TRUSTEES IN BANKRUPTCY OF ABC CONTAINERLINE
NV., THE OWNERS, CHARTERERS AND AL OTHERS
INTERESTED IN THE SHIP "BRUSSEL" AND THE
SHIP "BRUSSEL"
Defendants
- and -
SOCIÉTÉ NATIONALE DE CRÉDIT A L"INDUSTRIE S.A.
Intervenor
PLACE AND DATE OF ASSESSMENT: Halifax N.S., March 20 and 23, 2000
REASONS BY: F. Pilon, Assessment Officer
DATE OF REASONS: March 30, 2000
APPEARANCES:
Thomas E. Hart for the Plaintiff
David C. Colford for the Trustees in Bankruptcy
Edouard Baudry for the Intervenor
SOLICITORS OF RECORD:
McInnes Cooper
Barristers & Solicitors
Halifax, N.S. for the Plaintiff
Brisset Bishop
Barristers & Solicitors
Montreal, Quebec for the Trustees in Bankruptcy
Lavery DeBilly
Barristers & Solicitors
Montreal, Quebec for the Intervenor
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