Korea Heavy Industries & Construction Co. v. Polar Steamship Line, 2002 FCT 444

Date: 20020418

Docket: T-1698-95

Montréal, Quebec, April 18, 2002

Before: Richard Morneau, prothonotary

Action in rem against the vessels "VOLTA RIVER" and "KETA LAGOON" and in personam against State Shipping Corporation (Black Star Line), Polar Steamship Line and Pum Yang Express U.S.A. Inc., the Owners, Charterers and all those interested in the vessels "VOLTA RIVER" and "KETA LAGOON"

BETWEEN :

                        KOREA HEAVY INDUSTRIES & CONSTRUCTION CO. LTD.,

DOMINION BRIDGE INC.,

SSANGYONG FIRE & MARINE INSURANCE CO. LTD.

and

ALL THOSE PERSONS HAVING AN

INTEREST IN THE CARGO LADEN

ON BOARD THE VESSEL "VOLTA RIVER"

(bills of lading No. PYE-106687 and/or No. 01)

                                                                                                                                                        Plaintiffs

                                                                                 and

POLAR STEAMSHIP LINE,

PUM YANG EXPRESS U.S.A. INC.,

STATE SHIPPING CORPORATION (BLACK STAR LINE),

THE VESSEL "VOLTA RIVER",

THE OWNERS, CHARTERERS AND ALL OTHERS

INTERESTED IN THE VESSEL "VOLTA RIVER",

THE VESSEL "KETA LAGOON"

and

THE OWNERS, CHARTERERS AND ALL OTHERS

INTERESTED IN THE VESSEL "KETA LAGOON"

                                                                                                                                                    Defendants

                                                                                 and

                                                   PUM YANG EXPRESS U.S.A. INC.

                                                                                                                                  Plaintiff in Indemnity

                                                                                 and

                                                          POLAR STEAMSHIP LINE

                                                                                 and

                                                  STATE SHIPPING CORPORATION

                                                               (BLACK STAR LINE)

                                                                                                                            Defendants in Indemnity

ORDER

The plaintiffs' action is dismissed with costs to each of the defendants. The actions in indemnity brought by either defendant are, as a corollary, dismissed without costs.

Certified true translation

Suzanne M. Gauthier, C. Tr., LL.L.

Date: 20020418

Docket: T-1698-95

Neutral citation: 2002 FCT 444

Action in rem against the vessels "VOLTA RIVER" and "KETA LAGOON" and in personam against State Shipping Corporation (Black Star Line), Polar Steamship Line and Pum Yang Express U.S.A. Inc., the Owners, Charterers and all those interested in the vessels "VOLTA RIVER" and "KETA LAGOON"

BETWEEN :

                        KOREA HEAVY INDUSTRIES & CONSTRUCTION CO. LTD.,

DOMINION BRIDGE INC.,

SSANGYONG FIRE & MARINE INSURANCE CO. LTD.

and

ALL THOSE PERSONS HAVING AN

INTEREST IN THE CARGO LADEN

ON BOARD THE VESSEL "VOLTA RIVER"

(bills of lading No. PYE-106687 and/or No. 01)

                                                                                                                                                        Plaintiffs

                                                                                 and

POLAR STEAMSHIP LINE,

PUM YANG EXPRESS U.S.A. INC.,

STATE SHIPPING CORPORATION (BLACK STAR LINE),

THE VESSEL "VOLTA RIVER",

THE OWNERS, CHARTERERS AND ALL OTHERS

INTERESTED IN THE VESSEL "VOLTA RIVER",

THE VESSEL "KETA LAGOON"

and

THE OWNERS, CHARTERERS AND ALL OTHERS

INTERESTED IN THE VESSEL "KETA LAGOON"

                                                                                                                                                    Defendants

                                                                                 and

                                                   PUM YANG EXPRESS U.S.A. INC.

                                                                                                                                  Plaintiff in Indemnity

                                                                                 and

                                                          POLAR STEAMSHIP LINE

                                                                                 and

                                                  STATE SHIPPING CORPORATION

                                                               (BLACK STAR LINE)

                                                                                                                            Defendants in Indemnity

REASONS FOR ORDER

RICHARD MORNEAU, PROTHONOTARY

[1]        The Court has before it motions filed simultaneously by the three defendants in the case at bar, Polar Steamship Line ("Polar"), Pum Yang Express U.S.A. Inc. ("Pum Yang") and State Shipping Corp. ("Black Star Line") and the ship Volta River to dismiss the plaintiffs' action essentially on the basis that the terms of this Court's order dated August 23, 2001 ("the order") have not been complied with and the non-compliance has resulted in an unwarranted delay in the case.

[2]        Although each of the defendants cited slightly different rules in support of its motion, it appears to me, as mentioned before, that they all clearly base their motions on the fact that the terms of the order were not complied with and that this non-compliance has resulted in an unwarranted delay in the case. In this connection, it can reasonably be said that the motions in question are all based on Rules 167, 382(1)(a) and 385 of the Federal Court Rules (1998) ("the Rules"), and indeed this Court's decision in Ferrostaal Metals Ltd. v. Evdomon Corp. (2000), 181 F.T.R. 265 (affirmed at trial by a decision of June 21, 2000 and in the Federal Court of Appeal by a decision of October 11, 2001, neutral citation 2001 FCA 297).

[3]        In that case (which also involved an action in maritime law which was the subject of a status review notice), the following principles were laid down regarding a schedule not observed:

[14]         The court might have expected that this schedule would be observed, since it was taking this action in a case that was already in breach of the rules (there had had to be a notice of status review issued in the case) and which the court was allowing to continue. Any schedule imposed by the court certainly should have been taken seriously at that point. This is particularly true for any plaintiff since ultimately it is the plaintiff's action that is at stake, and primary responsibility for ensuring that the case moves forward lies with the plaintiff. This is a matter of the credibility of and respect for the orders of this court.

(...)

[20]         In my opinion, any unjustified non-compliance with an order of the court establishing a schedule is a serious matter in itself. When that order was made pursuant to a status review, any unjustified default is even more serious, and the degree of tolerance shown by the court will be correspondingly lower. After all, the court is then dealing with a case that is delinquent for the second time. It seems to me that the test that then applies should be even simpler than what we find in France-Canada Éditions et Publications Inc. et al v. 2845-3728 Québec Inc., [1999] F.T.R. Uned. 149 (T.D.), and Baroud v. Canada, [1998] F.C.J. No. 1729; 160 F.T.R. 91 (T.D.). In my view, the sound administration of justice justifies saying that a finding of unjustified default is then sufficient in itself for a plaintiff's action to be struck for delay.

[21]         Of course, striking an action will definitely prejudice a plaintiff to some extent. However, in terms of a status review, an assessment of the prejudice to a party is not part of the equation that is applied (see Multibond Inc. v. Duracoat Powder Manufacturing Inc., [1999] F.T.R. NO.029 (T.D.). This seems to me to be particularly true when, as here, we have a situation that arose after the notice of status review. If any prejudice should be taken into consideration at this point, it is the prejudice to the court and those of its users who comply with the rules and orders. As my colleague Hargrave wrote in Trusthouse Forte California Inc. et al. v. Gateway Soap & Chemical Co. (1998), 161 F.T.R. 88 (T.D. Protho.), at p. 89:

These reasons touch on the need for litigants to recognize that they must not delay proceedings unreasonably so as to tie up the court's resources needlessly. If a plaintiff should do so he or she stands to have the action dismissed. For the court to do otherwise results in stale proceedings which not only bring the court and its case management process into disrespect, but also affects and indeed may prejudice other litigants who wish to have their litigation resolved expeditiously.

(...)

[24]         A party who has an order from the court, and particularly a plaintiff, cannot allow the various steps set out in that order to expire without attempting, in a timely manner, to obtain a variation of the order by motion.

[4]        The schedule which was ultimately not observed here is that contained in the order. The full order read as follows:

                                                                      ORDER

          CONSIDERING the Orders of this Court dated January 15, 2001 and June 27, 2001 which relate to previous Orders of this Court dated April 4, 2000, January 11, 2000, November 15, 1999 and September 7, 1999;

          CONSIDERING the written representations submitted by the parties further to the Order of June 27, 2001;

           IT IS HEREBY ORDERED that this case shall be continued and that the parties - and especially the Plaintiffs - abide by the following schedule :

1.              Answers to all remaining undertakings shall be served by the Plaintiffs on the Defendants on or before September 24, 2001.

2.              Any questions arising from the answers to the undertakings already provided, and those which may arise from the answers to the remaining undertakings, shall be asked on or before October 24, 2001, and the answers to them shall be provided by the Plaintiffs on or before November 8, 2001.

3.              Considering the extensive delays already incurred in this case; considering paragraph 3 of the Order of this Court dated January 15, 2001 whereby the Plaintiffs were ordered to decide by February 15, 2001 whether or not they wished to examine on discovery representatives of any of the Defendants; considering that no requests for any discovery appear to have been made; considering therefore that no discoveries of any of the Defendants took place before March 30, 2001, the Plaintiffs are hereby precluded from proceeding to the discovery of any of the Defendants.

4.              Thereafter, the parties shall proceed in accordance with rule 257 of the Federal Court Rules, 1998 on or before November 21, 2001.

5.              If this case is not settled through the process of rule 257, the Plaintiffs shall serve and file a requisition for a pre-trial conference in accordance with rule 258 on or before December 21, 2001.

6.              The Plaintiffs shall pay forthwith costs of $1,500 to each of the Defendants who submitted written representations further to the Order of this Court dated June 27, 2001.

(my emphasis.)

[5]        It is clear on the face of the order that the Court had sufficiently lost patience with the plaintiffs and - as was naturally the case - was expecting this order to be carried out to the letter. The fact that the order referred to several past orders in the case, the fact that the Court specially directed the plaintiffs to carry out the order, the fact that the Court withdrew the plaintiffs' opportunity to question any defendant, the fact that the Court directed the plaintiffs to pay each defendant $1,500, are all points which should have been sufficient to draw the plaintiffs' attention to their being in a most delicate position. The plaintiffs also could not have been unaware that on August 23, 2001 the Court was then resisting for at least the second time an application to strike made by the defendants against the plaintiffs' action on account of delay in the case.

[6]        Since August 23, 2001 the plaintiffs have only partially answered the undertakings and have demonstrated no compliance with points 4 and 5 of the order. Although they brought an appeal against points 3 and 6 of the order, the plaintiffs have made no concurrent effort to stay execution of the order pursuant to s. 398(1)(b) of the Rules. Through their very experienced counsel, the plaintiffs should have known that an appeal against an order does not as such stay execution of the latter. Further, on October 16, 2001 the Trial Division upheld the order, except for one point of detail. Although the decision of October 16, 2001 was appealed, it appears that the defendants are seeking dismissal of that appeal in the Appeal Division for failure to prosecute.

[7]        The explanations contained in the various paragraphs of the affidavit submitted by the plaintiffs against the motions at bar provide no valid justification of the breaches noted in connection with the order.

[8]        Point 1 of the order states that all remaining undertakings should be answered by September 24, 2001. It should be noted that the order refers to all undertakings without any further qualification to reduce their extent. In his affidavit counsel for the plaintiffs simply stated briefly that "all undertakings which can be answered have now been answered" (my emphasis). This is completely insufficient, in view of a point or matter that was already in this Court's order of January 15, 2001. It appears that to date 14 undertakings have still not been carried out.

[9]        As to the action in point 4 of the order, namely the negotiating period, this should have taken place at the time stated in the order and it is not enough for the plaintiffs to indicate that there were discussions towards a settlement in 1999 and 2000. Even though certain defendants made no move within the deadline in point 4 of the order, it was for the plaintiffs in the case to take the initiative and begin new discussions for settlement.

[10]      As to the action in Rule 258, namely the pre-trial conference application, it is not sufficient to say that the appeal filed against point 3 of the order means that the examinations for discovery were not completed. As mentioned above, an appeal on this point does not as such have the effect of suspending its application in the meantime. Accordingly, it cannot validly be said that the examinations for discovery were not completed so as to avoid compliance with this point in the order.

[11]      Finally, the affidavit submitted by the plaintiffs offers no strict, careful and conclusive schedule on which the Court could fall back, even if it had considered that to be desirable.

[12]      Consequently, although the Court is reluctant to draw such a conclusion, in the circumstances it must dismiss the plaintiffs' action with costs to each of the three defendants for unjustified delay and non-compliance with the order. At this stage, and in view of the past events, it cannot be said that the Court is giving procedure precedence over law here.

Montréal, Quebec

April 18, 2002

Certified true translation

Suzanne M. Gauthier, C. Tr., LL.L.

FEDERAL COURT OF CANADA

TRIAL DIVISION

                    Date: 20020418

             Docket: T-1698-95

ACTION IN REM AGAINST THE VESSELS "VOLTA RIVER" AND "KETA LAGOON" AND IN PERSONAM AGAINST STATE SHIPPING CORPORATION (BLACK STAR LINE), POLAR STEAMSHIP LINE AND PUM YANG EXPRESS U.S.A. INC., THE OWNERS, CHARTERERS AND ALL THOSE INTERESTED IN THE VESSELS "VOLTA RIVER" AND "KETA LAGOON"

Between:

KOREA HEAVY INDUSTRIES & CONSTRUCTION CO. LTD.,

DOMINION BRIDGE INC.,

SSANGYONG FIRE & MARINE INSURANCE CO. LTD.

and

ALL THOSE PERSONS HAVING AN INTEREST IN THE CARGO LADEN ON BOARD THE VESSEL "VOLTA RIVER" (bills of lading No. PYE-106687 and/or No. 01)

                                   Plaintiffs

and

POLAR STEAMSHIP LINE,

PUM YANG EXPRESS U.S.A. INC.,

STATE SHIPPING CORPORATION (BLACK STAR LINE),

THE VESSEL "VOLTA RIVER",

THE OWNERS, CHARTERERS AND ALL OTHERS INTERESTED IN THE VESSEL "VOLTA RIVER",

THE VESSEL "KETA LAGOON" and

THE OWNERS, CHARTERERS AND ALL OTHERS INTERESTED IN THE VESSEL "KETA LAGOON"

                               Defendants

and

PUM YANG EXPRESS U.S.A. INC.

                Plaintiff in Indemnity

and

POLAR STEAMSHIP LINE

and

STATE SHIPPING CORPORATION (BLACK STAR LINE)

          Defendants in Indemnity

REASONS FOR ORDER

                          FEDERAL COURT OF CANADA

                                       TRIAL DIVISION

                                SOLICITORS OF RECORD

FILE:                                   T-1698-95

STYLE OF CAUSE:         ACTION IN REM AGAINST THE VESSELS "VOLTA RIVER" AND "KETA LAGOON" AND IN PERSONAM AGAINST STATE SHIPPING CORPORATION (BLACK STAR LINE), POLAR STEAMSHIP LINE AND PUM YANG EXPRESS U.S.A. INC., THE OWNERS, CHARTERERS AND ALL THOSE INTERESTED IN THE VESSELS "VOLTA RIVER" AND "KETA LAGOON"

Between:

KOREA HEAVY INDUSTRIES & CONSTRUCTION CO. LTD.,

DOMINION BRIDGE INC.,

SSANGYONG FIRE & MARINE INSURANCE CO. LTD.

and

ALL THOSE PERSONS HAVING AN INTEREST IN THE CARGO LADEN ON BOARD THE VESSEL "VOLTA RIVER" (bills of lading No. PYE-106687 and/or No. 01)

                                                                                                       Plaintiffs

and

POLAR STEAMSHIP LINE,

PUM YANG EXPRESS U.S.A. INC.,

STATE SHIPPING CORPORATION (BLACK STAR LINE),

THE VESSEL "VOLTA RIVER",

THE OWNERS, CHARTERERS AND ALL OTHERS INTERESTED IN THE VESSEL "VOLTA RIVER",

THE VESSEL "KETA LAGOON"

and

THE OWNERS, CHARTERERS AND ALL OTHERS INTERESTED IN THE VESSEL "KETA LAGOON"

                                                                                                  Defendants

and

PUM YANG EXPRESS U.S.A. INC.

                                                                                    Plaintiff in Indemnity

and

POLAR STEAMSHIP LINE

and

STATE SHIPPING CORPORATION (BLACK STAR LINE)

                                                                             Defendants in Indemnity

PLACE OF HEARING:                                                Montréal, Quebec

DATE OF HEARING:                                                  April 8, 2002

REASONS FOR ORDER BY: RICHARD MORNEAU, PROTHONOTARY

DATED:                                                                           April 18, 2002

APPEARANCES:

Claude F. Proulx                                                               for the plaintiffs

Trevor H. Bishop                                                               for the defendant Polar Steamship Line

J.D.L. Morrison                                                                 for the defendant State Shipping Corp.

Peter G. Pamel                                                                  for the defendant Pum Yang Express

SOLICITORS OF RECORD:

Law Firm of J. Kenrick Sproule                                       for the plaintiffs

Montréal, Quebec

Brisset Bishop                                                                  for the defendant Polar Steamship Line

Montréal, Quebec

Bull, Housser, Tupper                                                        for the defendant State Shipping Corp.

Vancouver, B.C.

Borden Ladner Gervais                                                     for the defendant Pum Yang Express

Montréal, Quebec