Nsc Corp. v. Krupp Mak Machinenbau Gmbh, docket T-1536-90

Date: 19990226

Docket: T-1536-90

BETWEEN:

     NsC CORPORATION LTD.

     Plaintiff

     - and -

     KRUPP MAK MACHINENBAU GmbH,

     HALIFAX-DARTMOUTH INDUSTRIES LTD.

     and HER MAJESTY THE QUEEN

     Defendants

     REASONS FOR ORDER

MacKAY J.

[1]      These Reasons explain an Order that this proceeding cease to be conducted as a specially managed proceeding and that the plaintiff's action as against each and all of the defendants be dismissed, with costs.

[2]      In accord with the Court's Rules the parties were notified of a status review on June 11, 1998, to which notice the plaintiff and the defendants Krupp Mak Machinenbau GmbH ("Krupp") and Her Majesty the Queen (the "Crown") responded in writing in July, 1998. By Order of Mr. Justice Lutfy dated October 6, 1998, this matter was continued as a specially managed proceeding and by Order dated October 16, 1998 the undersigned was designated as case management judge in the matter.

[3]      By written Direction dated December 7, 1998 a hearing was directed, by telephone or otherwise, when the plaintiff should show cause why this action should not be dismissed against any or all defendants, as proposed by written submissions filed earlier in response to the Direction for a status review. The plaintiff was also directed to propose a schedule for completion of preparations for trial in the event the action is not dismissed and to deal specifically in its submissions with the relief claimed in the action and the basis for jurisdiction in relation to each of the defendants. A hearing of the matter was arranged by telephone, with some re-scheduling, for February 24, 1999. Counsel appeared for each of the defendants and Mr. Frederick W. L. Black, Chief Executive Officer of the plaintiff, who is not a lawyer, appeared, representing the plaintiff, pursuant to the Order of the Associate Senior Prothonotary dated February 1, 1993.

[4]      Written submissions were received from all of the parties in advance of the telephone conference. The submissions on behalf of the plaintiff did not respond to any of the Directions issued by the Court on December 7, 1998 and in particular, did not suggest any schedule for completion of the plaintiff's preparations for trial in the event the action were to continue. Rather, the written submissions concerned the plaintiff's interests in pursuing proceedings in the Nova Scotia courts pursuant to the Bankruptcy Act in order to arrange for examinations under that Act, apparently with the support of the trustee in bankruptcy of another company, which company and Mr. Black, it was proposed, would ultimately be seeking to be added as plaintiffs in this action. It was hoped by Mr. Black that by the end of this calendar year the proceedings in the Nova Scotia courts would permit an application to join further plaintiffs and to proceed with this action.

[5]      The plaintiff did not respond in writing to the Direction to deal with the jurisdiction of the Court in relation to each of the defendants and the relief sought in this matter but in response to questions certain acknowledgements were made by Mr. Black. It was acknowledged that the principal claim against the defendant Krupp is one in contract, supported by a possible claim for acting with wrongful intent, which I understand to be a claim in tort. Further, it was acknowledged, as alleged by counsel on behalf of Krupp, that the same factual background and much of the relief, at least as against that defendant, form the substance of actions in the Ontario Court of Justice, General Division, while the same facts underlie continuing proceedings in relation to bankruptcy of a third party, NsC Diesel Corporation Limited, in the courts of Nova Scotia. It was urged on behalf of the plaintiff that relief sought against Her Majesty and against Halifax-Dartmouth Industries Ltd. ("HDIL"), and some relief claimed against the defendant Krupp in this action, were not at issue in the Ontario action. Finally, it was also acknowledged by Mr. Black, as urged by counsel for Her Majesty and for HDIL, that the moneys claimed at issue as against those two parties have apparently been paid out some years ago to the defendant Krupp.

[6]      Submissions on behalf of Krupp emphasized that the key remedy sought by the plaintiff in this action is injunctive relief but its motion for this was dismissed by Order of the Court dated April 12, 1991, on consent that was based on an agreement of March 21, 1991 between Krupp and the plaintiff. It is Krupp's view that there has been an inordinate delay in this proceeding which was not explained or excusable. Moreover, Krupp claims to be seriously prejudiced as a result of delay, for one key employee witness is deceased and another has left the company. Moreover, Krupp submits the Court lacks jurisdiction in this claim against it which arises out of a contract, and moreover, neither the Crown nor HDIL were parties to that contract.

[7]      For the defendant HDIL, which has heard nothing from the plaintiff since 1991, it is urged that the claim against it in this proceeding related to injunctive relief prohibiting payment, and an accounting of any sums held at a certain date, and that relief was precluded by dismissal of the plaintiff's application for an injunction in 1991. The contract between Krupp and HDIL was subsequently completed and all payments held by HDIL have been disbursed to Krupp in accord with that contract. The relief claimed against the defendant HDIL is moot and there are said to be no issues outstanding between the plaintiff and that defendant.

[8]      For the Crown, it is urged that the relief sought as against it, a declaration, an accounting, and an injunction or payment into Court, all concern certain moneys said to have been held and not advanced as of September 21, 1989 but which have long since been paid by the Government of Canada. Any relief claimed would be ineffective even if granted. Moreover, it is the Crown's view that in any event there was no relationship between it and the plaintiff by contract, by trust obligation or otherwise, set out in the statement of claim.

[9]      All of the defendants urge that the representations of the plaintiff in support of the interests of third parties who are not plaintiffs in this action, are irrelevant in relation to the proceeding at this stage, which, by the Court's Direction, requires the plaintiff to show cause why its action should not be dismissed.

[10]      On the basis of the written submissions from the parties and their oral submissions in the course of the telephone conference the Court concluded that the action of the plaintiff should now be dismissed.

[11]      That determination was reached on the basis of the following conclusions after hearing submissions of the parties:

Conclusion

[12]      An Order has gone pursuant to Rule 385(3), dated February 24, 1999, directing that this proceeding shall cease to be conducted as a specially managed proceeding (pursuant to Rule 385(3)) and further, that the plaintiff's action as against each and against all of the defendants is dismissed, with costs.

                                         Judge

OTTAWA, Ontario

February 26, 1999.