Bayside Towing Ltd. v. Canadian Pacific Railway, docket T-1692-99

Date: 20000628

Docket: T-1692-99

            

BETWEEN:

     BAYSIDE TOWING LTD.

     EUGENE BECKSTROM and WILLIAM FRIZELL

     Plaintiffs

     - and -

     CANADIAN PACIFIC RAILWAY

     B.C. TEL and RIVTOW MARINE LTD.

     Defendants

     REASONS FOR ORDER

MR. JOHN A. HARGRAVE,

PROTHONOTARY

[1]      On 2 June 1999 the loaded wood-chip barge Rivtow 901, in tow of Bayside Towing Ltd."s tug Sheena M , struck and damaged the Mission railway bridge to the extent of some $5,000,000. The motion which gives rise to these reasons is an exploration of the scope of Rule 238, the Rule governing examination of someone who is not a party. The context of the proposed examination is that of a Canada Shipping Act limitation action and the desire of the Canadian Pacific Railway ("CPR"), as owner of the bridge, to take the evidence of a local tug boat operator as to the circumstances in which his firm, Catherwood Towing Ltd., used assist-tugs in moving barges through the swing span of the bridge, this evidence to extend to each instance in which an assist tug has been utilized.

[2]      The tug operator whom the CPR wishes to examine is Mr. Ernie Catherwood, President of Catherwood Towing Ltd., which firm docks its eight or nine locally operating tugs at its Fraser River facility just above the bridge. The CPR sent to Catherwood Towing Ltd., attention of Mr. Catherwood as president, a list of seven questions, of a basic factual nature, to which Mr. Catherwood gave answers and a seventh question:

Under what circumstances (eg. at what river level and flow conditions, and at what time of day), and each case, why, has Catherwood Towing Ltd. used assist tugs in the downstream or upstream transit of the swing span of the Mission railway bridge by a tug and a loaded chip-barge in tow?

Mr. Catherwood, through counsel, advised that he would not respond to this question on the grounds that he did not wish to become involved. The CPR then turned to Rule 238, a discretionary rule which permits examination for discovery of a person who is not a party to an action:

238.(1) Examination of non-parties with leave " A party to an action may bring a motion for leave to examine for discovery any person not a party to the action, other than an expert witness for a party, who might have information on an issue in the action.

ANALYSIS

[3]      There is no debate as to the requirements a potential examining party must satisfy, for they are set out in Rule 238(3):

(3) Where Court may grant leave " The Court may, on a motion under subsection (1), grant leave to examine a person and determine the time and manner of conducting the examination, if it is satisfied that

(a) the person may have information on an issue in the action;

(b) the party has been unable to obtain the information informally from the person or from another source by any other reasonable means;

(c) it would be unfair not to allow the party an opportunity to question the person before trial; and

(d) the questioning will not cause undue delay, inconvenience or expense to the person or to the other parties.

While all four terms must be satisfied, in the present instance only the first two are at issue.

[4]      The CPR makes a reasoned argument that it has met all four conditions set out in Rule 238 and thus it should be granted leave to examine Mr. Catherwood. Mr. Catherwood"s counsel, in opposition to the position of the CPR, submits that the first and second criteria, whether Mr. Catherwood has information to contribute and whether there are other sources for the same information which the CPR ought to have explored, have not been met. Counsel for the Plaintiff concurs and adds submissions on these issues, but also touches on further considerations such as to the relevance of the testing of practice, for the standard is not negligence tested by the practice of others, but rather is recklessness; that a request for the evidence of a company does not fall within Rule 239; and, this point being related to what information Mr. Catherwood has to give within Rule 238, whether Rule 238 is in fact limited to taking the evidence of an eye witness to an incident.

A Witness with Information on an Issue

[5]      The Plaintiff Bayside did not use an assist tug to transit the bridge. If the CPR were able to establish that this conduct was reckless and undertaken with the knowledge that the present damage and loss would be the probable result, as the CPR has pleaded in its defence, then the Plaintiffs would be denied limitation of liability under Article 4 of Schedule VI to the Canada Shipping Act, which is the Canadian enactment of the 1976 Limitation of Liability Convention.

[6]      We know that Catherwood Towing Ltd. has operated a number of tugs in the area of the Mission bridge and that the senior CPR bridge tender believes Mr. Catherwood is himself an experienced tug master. Moreover the bridge tender has observed Catherwood tugs bringing chip-barges through the Mission bridge on many occasions.

[7]      Certainly Mr. Catherwood may have information on how he personally views the use of assist-tugs at the Mission bridge. He may also have second hand information about how he believes other masters, running his company"s tugs, view bridge assistance. Catherwood Towing Ltd. likely also has information in log books and accounting records, as to when assist tugs were in fact used. However, both counsel for the Plaintiff and counsel for Catherwood Towing Ltd. say that corporate views are not information falling within Rule 238.

[8]      First, there is a basic question of whether, if the request is for corporate information, including corporate information on how other masters running the company"s tugs view assistance at the Mission bridge, such information may be elicited under Rule 238. Counsel for the CPR refers to Confederation Life Insurance Co. v. Juginovic¹, a decision of a British Columbia Master in Chambers. At issue was British Columbia Rule 28 which, for practical purposes, parallels Federal Court Rule 238. The question was whether an employee of an insurance company, pursuant to a Rule 28 request to the company, might be examined for discovery when it was not a party. The application was allowed, however The British Columbia Practice, second edition, Butterworths, edited by Madame Justice McLachlin and Mr. James Taylor, Q.C., points out that Confederation Life was wrongly decided for it ignored the fact that witnesses, being discovered as corporate representatives, are just that, representatives or agents of the corporation. However, under Rule 28, the witness is to be examined as one who speaks for no one but himself or herself. In any event the editors of The British Columbia Practice come to the conclusion at page 28-12, that Rule 28 "contemplates examination only of a natural person: ...", there referring to Aintree Investments Ltd. v. West Vancouver² and to Cansulex Ltd. v. Perry³. In the latter Mr. Justice Berger referred to yet another Aintree Investments decision, the unreported decision of Mr. Justice Kirke Smith in action C764758/76, of 10 November 1977 to the effect that "R. 28 contemplates examination of a natural person and not a representative thereof". In any event Mr. Justice Berger was of the view that Rule 28 was not applicable to pre-trial examination of witnesses as officers of a corporation.

[9]      As I have indicated Federal Court Rule 238 tracks the essentials of B.C. Supreme Court Rule 28. Both are phrased in terms of examination of a person who may have either information (Rule 238) or evidence (Rule 28), terms with no real difference given the context. However, I must consider what in fact occurred in Pakistan National Shipping Corporation v. Canada⁴.

[10]      In Pakistan National at issue was the collapse and leakage of drums of canola oil during shipboard transit. The Crown wished to obtain information as to the filling and storage of the drums, before the ocean carriage, but were not able to maintain third party claims against the companies involved, for they were beyond the Court"s jurisdiction. The Crown, in the view of Mr. Justice Teitelbaum, satisfied the four requirements under the Rule and was allowed to examine various named employees as to the purchase, transportation, filling and storing of the drums. The motion had been opposed, but only on the grounds that the Court did not have jurisdiction over the corporations who had contracted those services. Mr. Justice Teitelbaum, in allowing the discovery, did not deal directly with the issue of whether the Rule permitted only discovery of individuals as witnesses as opposed to discovery as agents or representatives of corporations. Indeed, I think he did not have to, for the individuals in question signed various contracts for the pre-shipment services in question: in Mr. Justice Teitelbaum"s words "All persons to be examined were "major players" ...". He went on to refer to "a clear indication that the persons to be examined have information" and that he was satisfied on that score (see particularly pages 255-256). None of this is inconsistent with view of the editors of The British Columbia Practice , that the Rule applies only to the examination of natural persons who speaks for no one but themselves.

[11]      Bringing this concept of examination of a witness in his or her own right back to the present instance, the question is whether Mr. Catherwood ought to be examined for discovery under Rule 238 in his own right.

[12]      I put less practical weight than would counsel for Catherwood Towing and the Plaintiff on the fact that the letter requesting information on towing practices at the Mission bridge is addressed to Catherwood Towing Ltd., attention Mr. Catherwood as president and refers to the experience of Catherwood Towing Ltd. By implication the CPR is looking to the experience of Mr. Catherwood, the proprietor of Catherwood Towing, who is also established to be a tugboat master. If this implication is improper, the matter could easily be rectified by a second letter, for it is really the evidence of Mr. Catherwood that the CPR seeks. On the basis of the case law the CPR may not have discovery of a corporate experience, however, the CPR could, if it meets the tests set out in Rule 238, have discovery of Mr. Catherwood personally, so long as Mr. Catherwood has information on a live issue in the action. On this point, counsel for Catherwood Towing refers to Delphi Petroleum Inc. v. Derin Shipping & Trading Ltd. ⁵, particularly at page 102. In Delphi Petroleum, at issue was the precursor to present Rule 238, being Rule 466.3, by which leave could be obtained to question under oath a person who might have information on an issue in an action. In Delphi Petroleum, the Applicant sought to illicit information as to delay. However, the order was refused because delay had already been dealt with by an arbitrator, thus res judicata applied and there was no tryable issue on which to examine. Similarly, in Lord v. Royal Columbian Hospital⁶, the witness which the Appellant sought to examine, under British Columbia Rule 28, a rule similar to our Rule 238, had refused an interview because he believed he had nothing of substance to contribute as he had no direct involvement in the events and little memory of the details of what he had done at the time. The Court of Appeal suggested that the Plaintiff"s efforts might be better employed by seeking further discovery of some administrative person connected with the Hospital.

[13]      In the present instance, the CPR presumably looks for information on how Mr. Catherwood has taken barges through the Mission bridge and when and why he has used assist tugs. Counsel for the Plaintiff doubts this has bearing on a live issue in the limitation action, submitting that while Mr. Catherwood"s practice might establish a norm or a reasoned usual practice and that while an unjustified deviation from the norm might constitute negligence, it is recklessness under the 1976 Convention on Limitation of Liability for Maritime Claims, not negligence, that is the live issue.

[14]      I dealt with these contrasting concepts of negligence and recklessness in my earlier reasons in this action, 2 February, 2000, there quoting Mr. Justice Devlin in Albert E. Reed & Co. Ltd. v. London & Rochester Trading Co. Ltd.⁷ at pages 475-476, to the effect that recklessness is more than mere negligence or inadvertence in that it is a deliberately run risk. However, I refused to strike out the particulars of negligence to which the CPR referred in its pleadings for while I felt that the CPR"s case for recklessness, founded at least in part upon particulars of negligence, was a difficult one, it was not forlorn. Being consistent, to examine Mr. Catherwood as to his actual practice may be difficult to parlay into a standard having bearing on recklessness, but neither is it a forlorn exercise. Indeed it might establish a standard of care against which to measure recklessness. Thus, what Mr. Catherwood might have to say, as to his practice, may be information on an issue in the action.

[15]      Finally, still under the submission that Mr. Catherwood has no information on an issue in this action, counsel for Catherwood Towing takes the position that the CPR is improperly attempting to force an independent person, with no involvement in the litigation, to give evidence of his specialized practice, in effect expert evidence about taking barges through the bridge at other times and under other conditions. Counsel submits that the evidence would only be relevant if supported by an opinion as to how the bridge ought to have been transited with tug and tow, on 2 June, 1999, the day the accident happened. This argument concludes that the CPR is attempting to obtain opinion evidence which would be improper, even if Catherwood Towing Ltd. was a party to the litigation. Here counsel refers to two decisions of our Court of Appeal.

[16]      In Rivtow Straits Ltd. v. B.C. Marine Shipbuilders Ltd.⁸, the Court of Appeal pointed out that discovery questions seeking an expression of opinion, "... if permissible at all, are permissible only if they are put to a witness whose expertise is put in issue by the allegation of the pleadings." (page 736). Here it is the practice of Mr. Catherwood, not his opinion, which the CPR seeks.

[17]      Perhaps more pertinent is the view of the Court of Appeal in The Queen v. Irish Shipping Ltd.⁹, there at issue being a ship grounding in a voluntary traffic separation scheme at Haddington Island, just north of Alert Bay. The Crown had appealed an order from the Trial Division directing that its witness, an experience mariner, who had played a part in designing the traffic separation scheme, be required to explain how he would the navigate the passage and indeed to set out what in his view was the correct way to navigate the passage. The Court noted that the questions did not relate to the traffic separation scheme itself. Moreover, the questions were not permissible merely because the witness had taken part in the preparation of the scheme, or because the Crown had contended that the accident had occurred not through the design of the traffic separation scheme, but rather because of the neglect of Irish Shipping"s master, for the allegation of negligence did not raise the issue of the expertise of the witness:

In our view, contrary to what was said by counsel for the respondent, since the questions did not relate to the "traffic separation scheme", they were not rendered permissible by the fact that the expertise of Captain Burrill as one who had taken part in the preparation of the scheme, was put in issue by the allegations of the statement of claim. Moreoever, in our view, the fact that those questions might be related to the allegation of the respondent"s negligence contained in the statement of defence does not alter the situation since that allegation of negligence clearly did not raise the issue of the expertise of Captain Burrill.      (at page 420)

The important point in comparing the question in Irish Shipping, to that which the CPR wishes to ask of Mr. Catherwood, is that Irish Shipping sought an opinion as to how might the passage be navigated, or as to the correct way to navigate the passage, as opposed to what the CPR is seeking, not an opinion but evidence based on actual transits of the bridge, with a barge in tow, from Mr. Catherwood. Granted the conditions under which each transit took place would never be identical, however, from evidence of Mr. Catherwood"s experience the CPR might well be able to develop a general practice. This general practice as a guide to the proper way to approach the bridge with tug and tow and the use of an assist tug may be information bearing on issues set out in the pleadings and bearing on limitation of liability under the Convention.

[18]      The CPR has satisfied the first criteria under Rule 238 that Mr. Catherwood may himself have information on an issue in this action. I now turn to the question of whether the CPR had made reasonable efforts to obtain the information from other sources by any other reasonable means.

Information From Another Source

[19]      The second portion of Rule 238(3) requires that the Court must be satisfied that the party requesting leave to examine "...has been unable to obtain information informally from the person or from another source by any other reasonable means; ...".

[20]      The CPR submits that it has asked information of Mr. Catherwood and that he has refused to answer as he does not want either to become involved or to take sides. This is said to satisfy subsection 3(b) of Rule 238.

[21]      The CPR"s difficulty is that it has satisfied only half of the Rule: it has demonstrated a clear inability to obtain Mr. Catherwood"s evidence which is about his practice of transiting the Mission bridge with a barge in tow, but it has not tried to obtain the equivalent information elsewhere. Put another way, the submission by opposing counsel is that Mr. Catherwood is surely not the only person and perhaps even not the most knowledgeable person who could explain from personal experience how to tow barges through the Mission railway bridge.

[22]      Counsel for the CPR submits that Mr. Catherwood"s practice is unique. Now the senior CPR bridge tender is able to say that Catherwood Towing towed loaded chip barges through the bridge on many occasions, that Catherwood Towing has for many years owned and operated a number of tugs from a dock near the bridge and that Mr. Catherwood is an experienced tug master, particularly in the vicinity of the Mission bridge. However, there is no evidence either that the Catherwood"s tugs and the Plaintiff"s tug are the only tugs which move barges through the bridge or that Mr. Catherwood has unique information.

[23]      I would not go so far as counsel for Catherwood Towing, who suggests that the CPR bridge tenders, who are on the bridge swing span to open it from marine traffic, ought to be canvassed by the CPR for their views. However, it is for the CPR to demonstrate that evidence as to towing through the bridge is not available elsewhere, as required by the Rule, rather than merely show that information is available from Mr. Catherwood but that they have been unable to obtain it from him.

CONCLUSION

[24]      Rule 238 is a useful Rule, but it is not an ordinary rule. The usual discovery process, is available to learn from a witness on the other side the nature of their case so as to be prepared to meet the case and to destroy it. However, Rule 238 extends the discovery process, beyond that one witness, to bystanders and to those who might merely have information on an issue. It therefore ought to be construed and applied carefully.

[25]      The Rule clearly requires a reasonable extent of canvassing to find those who might have information on an issue and the refusal to give the information, in each instance, before the additional discovery of someone who is not a party may be granted. I need not consider the third and fourth requirements of the Rule, those of fairness and of delay, inconvenience or expense to the person to be examined or to other parties, for those elements were not put at issue. The motion is denied.

[26]      As to costs, this is instance in which counsel have explored a Federal Court Rule which has had only limited previous examination. The matter was not, at the outset, obvious. Costs will be in the cause.

                             (Sgd.) "John A. Hargrave"

                                 Prothonotary

28 June, 2000

Vancouver, British Columbia

     FEDERAL COURT OF CANADA

     TRIAL DIVISION

     NAMES OF COUNSEL AND SOLICITORS ON THE RECORD

COURT FILE NO.:              T-1692-99

STYLE OF CAUSE:              BAYSIDE TOWING LTD. ET AL.

                     v.

                     CANADIAN PACIFIC RAILWAY ET AL.

PLACE OF HEARING:          VANCOUVER

DATE OF HEARING:          12 June, 2000

REASONS FOR ORDER OF      MR. JOHN A. HARGRAVE, PROTHONOTARY

DATED:                  28 June, 2000

APPEARANCES:

Mr. David McEwen              for Plaintiffs

Mr. William Everett              for Defendant, Canadian Pacific Railway

Mr. Doug Morrison              for Defendant, Rivtow Marine Ltd.

SOLICITORS OF RECORD:

McEwen Schmitt

Vancouver, BC              for Plaintiffs

Lawson Lundell

Vancouver, BC              for Defendant, Canadian Pacific Railway

Bull, Housser & Tupper

Vancouver, BC              for Defendant, Rivtow Marine Ltd.

__________________

¹      (1996), 48 C.P.C. (3d) 60

²      (1978), 5 B.C.L.R. 216 (B.C.S.C.)

³      [1982] 37 B.C.L.R. 397

⁴      (1995), 94 F.T.R. 250 (F.C.T.D.).

⁵      (1995), 24 Admin L.R. (2d) 94 (F.C.T.)

⁶      (1981), 23 B.C.L.R. 141 (B.C.C.A.)

⁷      [1954] 2 Lloyds 463 (Q.B.)

⁸      [1977] 1 F.C. 735

⁹      [1976] 1 F.C. 418