Date: 20070517
Docket: T-1140-02
Citation: 2007
FC 528
Ottawa, Ontario, May 17, 2007
PRESENT: The Honourable Madam Justice Snider
ADMIRALTY ACTION IN REM
BETWEEN:
INTERTECH MARINE LIMITED, a body
corporate
Plaintiff
and
RICARDO MENÉNDEZ, MARIA MENÉNDEZ,
THE OWNERS AND ALL OTHERS INTERESTED IN
THE YACHT "NAUTICA” and the Yacht
“NAUTICA”
Defendants
REASONS
FOR ORDER AND ORDER
[1] In Reasons for Judgment and Judgment (Intertech
Marine Ltd. v. Menéndez and others, 2006 FC 1445, 134 A.C.W.S. (3d) 1001, [2006]
F.C.J. No. 1811 (F.C.) (QL)) which followed a trial of the issues, this Court
concluded that the Plaintiff was entitled to certain relief as against the
Defendants. As discussed below, the Plaintiff was awarded only a very small
portion of the amount claimed and the counterclaim of the Defendants was
dismissed.
[2] The
parties were advised that, if they could not agree on the issue of costs, they
could make further submissions to this Court. They did so. These Reasons
address the matter of costs to be awarded on the unusual circumstances of this
case.
[3] An
award of costs is in the discretion of the Court, with such discretion being
exercised judicially with regard to the principles and factors enumerated at Rule
400(3) of the Federal Courts Rules, SOR/98-106. As a general rule, costs
should follow the event (Merck & Co. v. Novopharm Ltd. (1998), 82
C.P.R. (3d) 457 at 464 (F.C.T.D.), 152 F.T.R. 74).Where success has been fairly
evenly divided, there should normally be no order as to costs (Lubrizol
Corp. v. Imperial Oil Ltd. (1996), 67 C.P.R. (3d) 1 at 25 (F.C.A.), [1996]
3 F.C. 40, 197 N.R. 241). However, a defendant need not be successful in both
its defence and counterclaim in order to be entitled to its costs; if
successful in defending the main action, such a defendant is entitled to costs
(Illinois Tool Works Inc. v. Cobra Anchors Co., 2003 FCA 358 at para.
11, 312 N.R. 184, 29 C.P.R. (4th) 417).
[4] In
the case before me, the Defendants were almost entirely successful in defending
against the claims of the Plaintiff. The Court’s award of $13,273.71 was less
than 6% of the total initial claim of $247,773.77 by the Plaintiff. This Court
concluded that, because of the award of $13,273.71, the arrest of the yacht was
lawful. Thus, the Defendants were not successful in asserting their
counterclaim based on the lawfulness of the arrest. However, when the decision
of the Court is viewed in its entirety, success was not evenly divided; the end
result was that the Plaintiff was almost entirely unsuccessful. Accordingly,
costs should be awarded to the Defendants.
[5] The
Plaintiff relies on CCH Canadian Ltd. v. Law Society of Upper Canada
(2000),184 D.L.R. (4th) 186, 4 C.P.R. (4th) 129 (F.C.T.D.) in
arguing that each party should bear its own costs. In my view, this case is
readily distinguishable. In reaching his conclusion in CCH, above at
para. 13, Justice Gibson commented that, “I place particular emphasis on the
factors of divided result, the complexity of some of the legal issues and the
lack of Canadian jurisprudential guidance on some of those issues, and the
public interest in having these actions litigated”. In contrast, the issues
were not complex in the litigation before me; rather, the Court was dealing
with a relatively straight-forward contractual dispute between two parties that
raised no public interest issues.
[6] The
behaviour of the parties throughout the litigation process is also a relevant
factor. A review of the Court file demonstrates that the Plaintiff did not
pursue this litigation with the vigour and interest that one would expect.
Although the delays may not amount to an abuse of process, the fact is that the
litigation was unnecessarily prolonged due to the actions and inactions of the
Plaintiff, thereby causing an increase in the Defendants’ costs. This factor
favours the Defendants.
[7] In
the unusual circumstances of this case, I am prepared to award a lump sum in
lieu of assessed costs, as permitted by Rule 400(4) of the Federal Courts
Rules, and to order that the costs be set off against amounts owing to the
Plaintiff pursuant to my judgment. The practicality of this matter is that the
Plaintiff is a defunct company. Thus, it is unlikely that the Defendants will
be able to collect on any award of costs or to recover the additional costs
associated with an assessment. The interests of justice are best served by an
immediate lump sum award that will allow the parties to move forward to final
resolution of this matter.
[8] I
do not have before me the exact bill of costs of the Defendants and the
associated support documentation. However, I note that the Plaintiff, in
response to the Defendants’ submissions on costs, did not dispute their claim
that “the Defendants’ actual costs, if assessed, would far exceed $27,000”. I
agree; an award of $27,000, on the facts of this case would be a reasonable and
conservative lump sum award and I will exercise my discretion to award this
amount.
[9] As
noted, after trial of this dispute, I adjudged that the Plaintiff was entitled
to the following:
- Recovery of the sum of
$13,273.71;
- Reasonable storage, insurance,
movement and other expenses incurred by the Plaintiff in relation to the
arrest of the yacht Nautica; and
- Interest from between October 1,
2001 to the date of judgment.
[10] Any
award to which the Plaintiff is otherwise entitled under the judgment will be
reduced by the $27,000 in costs awarded to the Defendants. The Plaintiff
submits that the costs of storage, movement and other expenses are in the
amount of $20,810.94. While I have no reason to doubt that these amounts are
not reasonable, I also note that the Defendants have not made submissions on
these calculations. I trust that the parties will be able, without the
assistance of the Court, to reach agreement on this number and on the amount of
interest payable. If not, I will remain seized of the matter.
ORDER
This Court orders that:
- Costs, fixed in the amount of
$27,000, are awarded to the Defendants;
- The costs of $27,000 are to be
set off against the amounts awarded to the Plaintiff in the action, those
being:
- The sum of $13,273.71;
- Reasonable storage, insurance,
movement and other expenses incurred by the Plaintiff in relation to the
arrest of the Nautica, such amount not to exceed $20,810.94; and
- Interest from between October 1,
2001 to the date of judgment.
- If the parties cannot agree on
the net amount of the award, further submissions may be made to this
Court, provided that such submissions are made no later than June 30,
2007.
“Judith A. Snider”
________________________
Judge
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