Docket: T-1226-10
Citation: 2011 FC 904
Vancouver, British Columbia, July
19, 2011
PRESENT: The Honourable Mr. Justice O'Reilly
ADMIRALTY ACTION IN REM AGAINT THE
VESSEL “QE014226C010”
AND IN PERSONAM
BETWEEN:
|
|
OFFSHORE INTERIORS INC.
|
|
|
|
Plaintiff
|
|
and
|
|
|
WORLDSPAN MARINE INC.,
CRESCENT CUSTOM YACHTS INC., THE OWNERS AND ALL OTHERS INTERESTED
IN THE VESSEL "QE014226C010"
|
|
|
|
Defendants
|
|
|
|
|
REASONS FOR ORDER AND ORDER
I. Overview
[1]
The
Defendants appeal a decision of Prothonotary Lafrenière granting the Plaintiff,
Offshore Interiors Inc., default judgment and denying the Defendants an
extension of time to file a Statement of Defence.
[2]
The
Defendants argue that the learned Prothonotary erred in his findings that a
valid contract existed between the Plaintiff and the Defendants, that the
Defendant Crescent Custom Yachts Inc. was an agent of the Defendant Worldspan
Marine Inc., and that the Defendants had failed to show that their defence to Offshore’s
action had merit.
[3]
I
am not persuaded that the Prothonotary erred in respect of any of his findings
and must, therefore, dismiss this appeal.
II. Factual
Background
[4]
Offshore
Interiors Inc. builds and installs custom cabinetry on yachts. Offshore was
hired by the Defendant Crescent Custom Yachts Inc. to build and install
cabinetry on a 144-foot yacht that Crescent had been engaged by Worldspan
Marine Inc. to build on behalf of a client of Worldspan. Crescent is a
wholly-owned subsidiary of Worldspan.
[5]
At
a certain point in the construction of the yacht, Worldspan’s client ceased
making instalment payments. At that point, Offshore had already installed
interior woodworking, some of which was paid for and some of which was not.
Offshore commenced an action for the outstanding amounts against Crescent and
Worldspan by way of a Statement of Claim served in August 2010. By that time,
Offshore had already arrested the vessel. However, Offshore informed Worldspan
that it would be holding off on its action and that it was not yet necessary to
file a Statement of Defence. Eight months later, Offshore informed Worldspan
that a statement of defence was now required, but the person who received that
information apparently failed to notify others at Worldspan. Soon thereafter,
that person left the company. In due course, Crescent and Worldspan applied
for an extension of time to file a statement of defence.
III. Prothonotary
Lafrenière’s Decision
[6]
Prothonotary
Lafrenière noted that the main issue was whether there was any merit to the
defence put forward by the Defendants. He observed that the Defendants had
conceded that there was a verbal agreement between Offshore and Crescent, that
Offshore had provided services and materials pursuant to that agreement, that there
was no dispute about the amount or the quality of the work, and that some
invoices remain unpaid. However, the Defendants disputed whether the agreement
constituted a valid contract, and questioned whether Crescent could be regarded
as an agent of Worldspan.
[7]
Prothonotary
Lafrenière concluded there was overwhelming evidence that Worldspan owned the
vessel and had absolute control over Crescent. He acknowledged that some minor
terms of the contract between Offshore and Crescent might be in doubt, but was
satisfied that judgment should nevertheless issue in Offshore’s favour.
IV. Did
Prothonotary Lafrenière Err?
[8]
The
main issues before the Prothonotary were questions of mixed fact and law: Did
the evidence support Offshore’s contention that it had a valid contract with
Crescent? Did the evidence show that Crescent was an agent of Worldspan?
Because the Prothonotary’s decision was vital to a final issue in the case, the
very outcome of Offshore’s action, I must decide these questions anew.
[9]
Regarding
the contract, it is clear that there was a verbal agreement between Crescent
and Offshore, and that at least some terms of the agreement were reduced
to writing. The most important matters – the work to be done, the amounts to be
billed, the deposits to be paid, the time frame for payments, interest on
outstanding accounts – were clear. There were no disputes over these issues
between Crescent and Offshore from June 2009 to the end of March 2010. Work was
done; invoices arrived; payments were made.
[10]
In
support of its contention that a contract existed between it and Crescent,
Offshore relied on the affidavit of its President, Mr. Robert Ruzzi. Mr. Ruzzi
states that discussions on the work to be done and the amounts to be charged
began in the spring of 2009. A document Offshore sent to Crescent on May 29,
2009 sets out the particulars. Work on the vessel began shortly thereafter.
Obviously, there were no significant disputes on the main terms of their
agreement.
[11]
The
Defendants have not offered any evidence to contradict the existence of a
contract. They contend that the contract was not valid because not all of its
terms were expressly agreed to. But their submissions do not seriously
cast doubt on the existence of a valid contract for materials and services
during the relevant time frame.
[12]
On
the question of agency, Offshore presented evidence showing that Worldspan was
the owner of the vessel under construction, that Worldspan and Crescent shared
a business address, that Worldspan and Crescent had a common director in
Mr. James Hawkins (whose email address included the domain name
“worldspanmarine”), that Worldspan used Crescent as a brand name, that Crescent
engaged suppliers and trades for the construction of a vessel on behalf of a
client of Worldspan, and that payments to Worldspan from its client were
distributed to Crescent without the need for invoices.
[13]
The
Defendants dispute that Worldspan and Crescent had an agency relationship, but have
not offered evidence to support their position. While it is clear that the two
companies are separate, and that Crescent is a subsidiary of Worldspan, this
does not defeat the evidence put forward by Offshore establishing that Crescent
was acting on Worldspan’s behalf in building the vessel and engaging the
services, such as those provided by Offshore, that were necessary to complete
the work.
IV. Conclusion
and Disposition
[14]
Based
on the evidence before Prothonotary Lafrenière and the submissions made to me,
I am satisfied that the learned Prothonotary did not err in finding on the
balance of probabilities that there was a valid contract between Offshore
and Crescent and an agency relationship between Crescent and Worldspan.
Accordingly, he did not err in finding that the Defendants had not presented
evidence that their defence to the action was meritorious. It follows that he
did not err in refusing to grant the Defendants an extension of time to
file their statement of defence.
[15]
The
Defendants’ appeal, therefore, is dismissed with costs.
ORDER
THIS COURT
ORDERS that the Defendants’ appeal is dismissed with costs.
“James
W. O’Reilly”
Email this Content