Date: 20020405
Docket: T-134-02
Neutral Citation: 2002 FCT 385
SIMPLIFIED ACTION
BETWEEN:
DAVID W COATH
Plaintiff
and
THE OWNERS AND ALL OTHERS
INTERESTED IN THE SHIP "BRUNO GERUSSI",
564460 BRITISH COLUMBIA LTD.,
P.J. PROPERTIES LTD., ASTROLABE GROUP INC.,
ASTROLABE MARINE INC., ASTROLABE TRANSPORTATION,
THE SHIP "BRUNO GERUSSI"AND MAURICE NOEL GAGNE
Defendants
REASONS FOR ORDER
HARGRAVE P.
[1] The Plaintiff sets out in his Statement of Claim that he performed repair and maintenance work on the "Bruno Gerussi" in the amount of $2,237.50. The Plaintiff presently holds a judgment by way of default of defence against the Defendant, Maurice Gagne who, on the basis of a recently current company search, is president and secretary of the Defendant 564460 British Columbia Ltd. That numbered company is the registered owner of the "Bruno Gerussi". The Plaintiff now seeks judgment in default of defence against both 564460 British Columbia Ltd. and the ship "Bruno Gerussi".
[2] In support of the present application for default judgment, the Plaintiff deposes that on 28 January 2002 he personally served Maurice Gagne, with the Statement of Claim, both as president and secretary of the numbered company and as the person in charge of the "Bruno Gerussi". That the format of that portion of the 22 March 2002 affidavit in support of this motion, which deals with service, does not correspond with Form 146A is not critical for, by Rule 146, the manner of proving service is permissive. The Rule leaves it open for the Court to find service on the basis of an affidavit such as the present. The Plaintiff is thus granted judgment in default of defence against 564460 British Columbia Ltd. in the amount of $2,237.50.
[3] Service on the ship is set out in the 22 March 2002 affidavit as follows:
4. On January 28, 2002, I served the Statement of Claim on the ship "Bruno Gerussi" by serving Maurice Gagne as the person in charge of the ship and the representative of the ships owner, which is 564460 British Columbia Ltd. Pursuant to Rule 479(2). (Copy of the Ships Certificate of Registry and Transcript of Federal Ships Registry attached.)
As an example of the situation in which a lay litigant acts for himself or herself and is not familiar with the Rules, Mr. Coath has overlooked the mandatory nature of Rule 479(1) which governs the service of statements of claim on ships, the Rule reading, in part,:
479. (1) Service of statement of claim - Subject to subsection (2), the statement of claim in an action in rem shall be served
(a) in respect of a ship or cargo or other property on board a ship, by attaching a certified copy of the statement of claim to some conspicuous part of the ship;
The proviso, the reference to Rule 479(2), is to the effect that if access to the ship cannot be obtained, then the statement of claim may be served upon the person apparently in charge of the ship: there is nothing in the affidavit material to indicate access to the ship was denied and that Rule 479(2) applies. In the result default judgment against the ship "Bruno Gerussi" is denied, but without prejudice to any future motion for judgment based on new facts.
[4] The Plaintiff claims interest, in the affidavit in support of this motion, at 12 ½ percent, here relying upon a letter of 12 March 2001 to Mr. Gagne. The Statement of Claim, filed 28 January 2002, merely seeks "Interest from November 23, 2000 at the Admiralty rate compounded semi-annually; . . .". None of the invoices, which are referred to in the Statement of Claim, are in evidence. Thus I am left with the plea for interest at the admiralty rate, compounded semi-annually. While at one time there may have been a so-called admiralty rate of interest in the United Kingdom, we do not have such a convention here in Canada. Rather, interest should be governed by the principle of restitution. Here I would adopt a passage from Tetley on Marine Cargo Claims, third edition, Blais International Shipping Publications at pages 349 and 350 which, with footnotes omitted, is as follows:
In accordance with the principle of restitutio in integrum, the rate of interest awarded should reflect the cost of borrowing an amount of money equivalent to that which has been wrongfully withheld by the defendant. Thus the courts rely on the actual commercial rates prevailing at the time. The prime bank lending rate at the time the right to interest arose has been considered to be a useful guide. In Davie Shipbuilding v. Canada, the Federal Court of Appeal held that the most sensible method of ascertaining the rate of prejudgment interest was to refer to the rate payable on moneys paid into court.
In the present instance I have not been provided with material to indicate the Plaintiff's cost of borrowing, or commercial rates, or prime bank lending rates. Therefore I have followed the lead of the Court of Appeal in Davie Shipbuilding v. The Queen [1984] 1 F.C. 461 at page 473 and will award pre-judgment interest at the rate paid on monies paid into the Federal Court. By inspection, since 23 November 2000, the average rate has been approximately 3.6 percent.
[5] Interest at a compound rate is discretionary. To elaborate on compound interest, section 36(1) of the Federal Court Act provides that prejudgment interest, except as otherwise provided in the Federal Court Act, is governed by the laws in force in the province in which the cause of action arose. Section 2 of the British Columbia Court Order Interest Act, ch 79, R.S.C.B. 1996, precludes compound interest. However section 36(7) of the Federal Court Act provides an exception to interest in maritime matters, such as the present, where the claim is one which is essentially for necessaries. Here I would refer to The "Netuno" (1996) 100 F.T.R. 120 at 132 where Madam Justice Tremblay-Lamer makes the point that by reason of section 36(7), setting interest in admiralty matters, on a compound basis, is a matter of discretion.
[6] In Ontario Buslines v. The "Federal Calumet" (1992) 47 F.T.R. 149 Mr. Justice Strayer, as he then was, compounded interest semi-annually, a determination which was upheld by the Federal Court of Appeal (1992) 150 N.R. 149. However Mr. Justice Nadon, as he then was, pointed out in Alcan Aluminium Ltd. v. Unican International S.A. (1996) 113 F.T.R. 81 at 116-117, that the Court of Appeal in The "Federal Calumet" remarked that compound interest was appropriate because one of the factors taken into consideration had been a limitation of liability clause. Mr. Justice Nadon went on to say, at page 117:
I am of the view that the discretion to award compound interest should exercised in favour of a successful party when such an award is necessary to fully compensate the plaintiff: in other words, on the basis of the principle "restitutio in integrum". In my view, a successful party must demonstrate that his or her loss cannot be fairly compensated in damages without an award of compound interest. In the present case, I have not been so persuaded.
To summarize, while compound interest is a commercial reality and a fact of life, it is still discretionary, with a burden upon the successful plaintiff to establish that compound interest is necessary to restore him or her to a fully compensated position in an admiralty matter.
[7] In the present instance, the difficulty which I have with compound interest is that the Plaintiff sat on his rights for a number of months, during which he was ignored by the Defendants. On the one hand, there may be a reason why the Plaintiff did not commence proceedings at an earlier date, however that does not appear in the evidence. On the other hand, if the Plaintiff had received payment within a reasonable time, it could have been earning compound interest in a bank account. On balance I am satisfied that the Plaintiff requires pre-judgment interest at 3.6 percent, compounded semi-annually, to be appropriately compensated. Post judgment interest shall be at Royal Bank Commercial Prime Rate, compounded semi-annually.
[8] As to costs, the Plaintiff who, acts for himself, claims the lump sum of $500.00, submitting that it reflects time spent researching and preparing documents and attending in the Federal Court Registry office. Generally a party who acts for himself or herself is not eligible to receive counsel fees, being the costs referred to in Federal Court Rule 400 and which are set out in a table in Tariff B. However there is an exception to this general rule, which I considered at length in Rahman v. Minister of Citizenship and Immigration, unreported reasons of 5 February 2002 in file IMM-6095-00. Essentially, pursuant to Canada v. Kahn (1999) 160 F.T.R. 83 a lay litigant may receive out of pocket expenses for lost time in defending his interests, which may include an allowance for time spent photocopying documents, for service of documents and for time lost. In Kahn Mr. Justice Teitlebaum awarded not only out of pocket disbursements, but also a reasonable lump sum, to reimburse the plaintiff for time lost pursuing his legitimate interests.
[9] In the present instance there is no affidavit material by way of justification for the lump sum of $500.00 for court costs claimed by the Plaintiff, but rather an assertion in written argument. Reasonably the Plaintiff must have spent some time preparing his Statement of Claim, serving it and putting together material. He has incurred filing fees. In the absence of a detailed claim for a lump sum in lieu of counsel fees and for disbursements I must therefore do the best that I can, on a rough and ready basis, to calculate an appropriate award of costs. An appropriate award of costs, including disbursements, is $300.00.
(Sgd.) "John A. Hargrave"
Prothonotary
Vancouver, British Columbia
5 April 2002
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-134-02
STYLE OF CAUSE: David W Coath v. The Ship "Bruno Gerussi" et al.
EX PARTEMOTION DEALT WITH IN WRITING
REASONS FOR ORDER: Hargrave P.
DATED: April 5, 2002
WRITTEN REPRESENTATIONS:
David W. Coath FOR PLAINTIFF
SOLICITOR OF RECORD:
David W. Coath FOR PLAINTIFF
Vancouver, British Columbia
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