Date: 19991215
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,
- and -
FAR-EASTERN SHIPPING CO. (FESCO),
THE OWNERS AND CHARTERERS OF THE
VESSELS "CHERKASSY" AND "ANADYR"
AND THE VESSELS "CHERKASSY" AND "ANADYR",
Defendants.
REASONS FOR ORDER
MR. JOHN A. HARGRAVE,
PROTHONOTARY
[1] These reasons arise out of a motion to strike out a statement of claim for cargo damage by reason of breaches of our successive Orders for the production of specific relevant available documents. The motion is successful because the breach in this instance constitutes conduct amounting to abuse.
[2] In more detail, the action itself involves a claim for wetting damage to a portion of a cargo of dried peas carried from Vancouver to Bombay and discharged at Mumbai, India. There is no doubt that some of the 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 Cisco, [1994] 2 F.C. 279 (F.C.A.). In The Cisco 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.
[5] 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 to determine what was required to prove that case. However, the Plaintiffs" affidavit of documents was demonstrably deficient for it contained little or no material as to sale, storage, handling or final disposition of the cargo of peas. Requests for that material were ineffective. As a result on 29 March 1999 the Defendant obtained an Order that the Plaintiffs provide a further and better affidavit of documents by the 19th of April, 1999, being an unsworn affidavit in view of the short time frame, for the Defendant wished to get on with examinations for discovery in India. The Order was fairly specific requiring production of documents by which to establish sound market value of the cargo:
| 1. The Plaintiffs shall provide an unsworn further and better affidavit of documents, by 19 April 1999, containing the type of documents set out in Schedule "A" to the motion, namely: |
| 1. All of the Plaintiffs' claim documents including those upon which it intends to rely to establish sound market value of the cargo and all documents relating to the ultimate disposition of the cargo. |
| 2. All documents of the Plaintiffs relating to the internal handling and or re-conditioning, warehousing, transport, contracts and invoices for sale showing the price obtained for all of the allegedly damaged cargo and for all of the sound cargo discharged from the vessel Cherkassy. |
| 3. All documents of the Plaintiffs relating to the disposal and or destruction of any portion of the allegedly damaged cargo including truck and weight receipts, tally check sheets and government certificates. |
| The affidavit shall be sworn at the first reasonable opportunity; |
| 2. The Plaintiffs shall produce the documents listed in the further and better affidavit by 19 April 1999; |
[6] The Plaintiffs failed to comply with the Order by the 19th of April. Given the breach of the Order and the apparent lack of cooperation, the Defendant obtained a second Order, 20 April 1999, requiring the Plaintiffs to produce a witness from Sampat, a representative of the surveyor who attended at the discharge of cargo and, again, all of the documents ordered on the 29th of March.
[7] The Plaintiffs ignored this second Order, although the witness from Sampat, Mr. Kothari, said that all of the specific original documents and invoices sought by the Defendant were located in a warehouse in Gauhati, north of Calcutta.
[8] The Plaintiffs, failing to produce the requested documents during the next dozen weeks, the Defendant 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 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 Plaintiffs" 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.
[14] Despite various submissions by counsel for the Plaintiffs, including that the original document is in the computer and all else is a copy, at issue here is not the nature of information stored electronically in a computer, information which Mr. Kothari desposed, on discovery, that he could immediately print out 50 times if asked. Certainly a document includes any material which is capable of being read, computer preserved records being no exception, so long as it is established that there was no improper use of the computer and that it was operating properly. But that is not the issue here.
[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) |
[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 Plaintiffs" 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.
[17] Counsel for the Defendants sought costs on an enhanced scale. To do so might be justified in order to bring home a point to a wayward litigant. However, in the present instance the sanction of having a large claim struck out is sufficient. Costs, mid-range in Column III are sufficient to go toward the Defendants" costs.
(Sgd.) "John A. Hargrave"
Prothonotary
December 15, 1999
Vancouver, British Columbia
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS ON THE RECORD
| STYLE OF CAUSE: PIONEER GRAIN COMPANY LTD., M/S SAMPAT INDUSTRIAL AND CONSTRUCTION CO. LTD., ALL OTHERS HAVING INTEREST IN THE CARGO LADEN ON BOARD THE VESSEL "CHERKASSY" |
v.
| FAR EASTERN SHIPPING CO. (FESCO), THE OWNERS AND CHARTERERS OF THE VESSELS "CHERKASSY" AND "ANADYR" AND THE VESSELS "CHERKASSY" AND "ANADYR" |
| PLACE OF HEARING: VANCOUVER, B.C. |
| DATE OF HEARING: December 6, 1999 |
| REASONS FOR ORDER OF MR. JOHN A. HARGRAVE, PROTHONOTARY |
APPEARANCES:
| Mr. Jean-Francois Bilodeau for the Plaintiffs |
| Mr. Thomas Hawkins for the Defendants |
SOLICITORS OF RECORD:
Sproule Castonguay Pollack
| Montréal, PQ for the Plaintiffs |
Campney & Murphy
| Vancouver, BC for the Defendants |
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