Date: 20050209
Docket: T-1942-98
Citation: 2005 FC 206
ADMIRALTY ACTION IN REM AND IN PERSONAM
BETWEEN:
STELLA-JONES INC.
and
AXA BOREAL ASSURANCES INC.
Plaintiffs
and
HAWKNET LTD.
and
SUNLIGHT COMPANIA NAVIERA S.A.
and
SEBILAN COMPANIA NAVIERA S.A.
and
THE OWNERS AND ALL OTHERS INTERESTED
IN THE SHIP MARIANA (Ex "ANAMELI")
Defendants
REASONS FOR ORDER
RICHARD MORNEAU, PROTHONOTARY:
[1] By way of a motion under paragraph 220(1)(a) of the Federal Courts Rules (the Rules), the defendant, Mariana Maritime S.A., is asking this Court to determine the following questions:
1. Did the Plaintiffs, Stella-Jones Inc. and Axa Boreal Assurances Inc., and the Defendant, Mariana Maritime S.A., agree to settle Federal Court Action T-1942-98 on or about July 7, 2004?
2. If the answer to the previous question is in the affirmative, did the settlement constitute a valid binding agreement from which the Defendant, Mariana Maritime S.A., is entitled to exercise its rights flowing therefrom?
Background
[2] Essentially, the general background to this motion may be summarized as follows.
[3] Following a fire that broke out aboard the defendant's vessel, the plaintiffs sued the defendant for damages to the cargo of telephone poles belonging to the plaintiffs. The defendant counter-claimed against the plaintiffs for contribution to the general average.
[4] On or about July 7, 2004, the parties' counsel discussed settlement in this case and at some point that day exchanged the following e-mails.
[5] The first e-mail is from counsel for the defendant and reads:
Sent: July 7, 2004 15:25
...
This message refers to our telephone conversation earlier this afternoon. I confirm that the parties have agreed to settle this matter on an all-inclusive basis for CDN [amount omitted]. Settlement is subject to execution of a Receipt & Release in a form satisfactory to both sides and the filing of a formal discontinuance of both the principal action and the counter-claim for GA contribution.
The target date for provision of funds will be within 14 days. I understand that this should not present a problem.
The terms of settlement are to remain strictly confidential.
The Letter of Undertaking given to you to stand as security for your clients is to be returned upon receipt of the settlement funds and execution of discontinuation and release documentation.
Please confirm your agreement to the above by return e-mail. I confirm my agreement that once you have done so you may advise Mr. Justice Hugessen that the parties have reached an amicable resolution of the case and that the dates for both the dispute resolution conference and the trial may be vacated.
[Emphasis added]
[6] The second e-mail is from counsel for the plaintiffs and reads:
Sent: Wednesday, July 07, 2004 3:38 PM
...
For the sake of clarity, I feel the need to add that the settlement is for a net lump sum all-inclusive payment of Cdn. [amount omitted] payable by your clients to mine (i.e. without any deductions whatsoever) in full and final settlement of all claims and counter-claims our clients may have arising out of the fire which broke out on board the "Mariana" on June 9th, 1998. This settlement also includes settlement of all claims for costs which may arise out of the interlocutory appeals to the Federal Court of Appeal as well as of the protective "arbitration" proceedings which had been launched in London pending the outcome of your clients' application for a stay. All your other terms are agreed.
Please confirm your agreement to the above.
[7] The third e-mail is from counsel for the defendant and reads:
Sent: Wednesday, July 07, 2004 4:56 PM
...
As discussed, I am unaware of the London arbitration issue and thus must confirm that one minor point with my clients in Greece overnight. Aside from that issue, however, I concur with all of the other points you have raised assuming the arbitration proceedings to which you refer were nothing more than a protective measure as you state and relate solely to the same issues as those which were in dispute in the Federal Court action, I expect that my clients will confirm my authority to agree that last point.
as discussed, in the circumstances, you will advise Mr. Justice Hugessen that the action is settled in principle, save one issue which is subject to clarification/ confirmation overnight.
[8] The defendant acknowledges that the vast majority of the conditions referred to in these e-mails, including the completion of out-of-court settlement documents, payment within 14 days, the settlement of the other proceedings in the Federal Court of Appeal or in arbitration in London, are items that were not completed in the days following July 7, 2004. However, it says, these things must be seen as very secondary matters of paperwork. The defendant argues that the fact that counsel were not in complete agreement on these things does not take away from the fact that the first e-mail of July 7, 2004, captures the essence of an agreement between counsel from which the plaintiffs cannot now extricate themselves. The question of whether there was an agreement between the parties on July 7, 2004, it says, is a question of law.
[9] The plaintiffs argue that the agreement of July 7, 2004, was at most an agreement in principle and would actually become a firm agreement only upon compliance with the various conditions referred to in the e-mails of July 7, 2004. As of August 10, 2004, they say, these conditions had not been fulfilled and the plaintiffs' counsel were then justified in breaking off negotiations, especially since some fresh allegations of facts had just been brought to their attention, disclosing that the fire on board the defendant's ship was due to circumstances quite different from those disclosed on the examination for discovery of the defendant, two years earlier. These new allegations, the plaintiffs say, are such as to vitiate any consent that their counsel might have been willing to give on July 7, 2004.
Analysis
[10] Paragraph 220(1)(a) of the Rules reads:
|
220 (1) A party may bring a motion before trial to request that the Court determine (a) a question of law that may be relevant to an action; |
220 (1) Une partie peut, par voie de requête présentée avant l'instruction, demander à la Cour de statuer sur : a) tout point de droit qui peut être pertinent dans l'action; |
[11] A motion under this paragraph, the ancestor of which in the old rules of this Court was paragraph 474(1)(a), must follow a two-step procedure and meet some very specific requirements (see Perera v. Canada, [1998] 3 F.C. 381, at pages 391 et seq.). In terms of the procedure, it should be noted that the actual adjudication of a point occurs only at the second step. An initial step must in fact be taken earlier, where the Court must be satisfied that the point or question submitted to it under this paragraph 220(1)(a) meets some very specific requirements.
[12] As mentioned in Minister of National Revenue v. Webster et al. (2002), 291 N.R. 128, at page 130:
[4] The requirements to be satisfied for an order for the determination of a preliminary question of law have been set out in Berneche et al. v. Canada (1991), 133 N.R. 232, at paragraph 6 (F.C.A.) per Mahoney, J.A., I paraphrase them in the context of rule 58(1)(a) of the Tax Court Rules. The Court must be satisfied:
1. that there is no dispute as to any fact material to the question of law to be determined;
2. that what is to be determined is a pure question of law; and
3. that determination of the question may dispose of all or a part of the proceeding, substantially shorten the hearing or result in a substantial saving of costs.
[13] I think the first thing to look at here is whether the questions submitted by the defendant (see paragraph [1], supra) are in the circumstances pure questions of law. As indicated in Perera, at page 392, a question of law is a question that can be answered without making any findings of fact whatsoever.
[14] Paragraph 220(1)(a) of the Rules must therefore be distinguished from rule 49.09 of the Ontario Rules of Civil Procedure. That rule, as reproduced in Cellular Rental Systems Inc. v. Bell Mobility Cellular Inc. (1995), 6 W.D.C.P. (2d) 169, at paragraph 16, reads:
Where a party to an accepted offer to settle fails to comply with the terms of the offer, the other party may,
(a) make a motion to a judge for judgment in the terms of the accepted offer, and the judge may grant judgment accordingly.
[15] I think it is extremely difficult, given the earlier summary of the facts, to find that the determination of whether the parties settled the case on July 7, 2004, constitutes a pure question of law. To my mind, this is at best a question of mixed law and fact in this case. Moreover, the defendant did not refer to any case law in which questions similar to this had been characterized as pure questions of law and decided under the exceptional framework of paragraph 220(1)(a) of the Rules.
[16] In addition, to come back to another requirement mentioned in Webster - no dispute as to any material fact - I am not satisfied that the differences of opinion between the parties on the fulfilment of the conditions contained in the July 7, 2004 e-mails cannot be seen precisely as a dispute as to material facts.
[17] It appears, in fact, that these differences of opinion between the parties call for an analysis of the considerations reviewed by the Court in Cellular Rental Systems Inc., supra, at paragraphs 17 to 19.
[18] Clearly, the actual causes of the fire aboard the defendant's vessel, as the plaintiffs have understood them since August 10, 2004, are facts that are not admitted by the defendant and that might retroactively affect the validity of any agreement on July 7, 2004.
[19] For the preceding reasons, therefore, I am of the view that the questions submitted by the defendant do not clear the first step under paragraph 220(1)(a) of the Rules and cannot be referred on to a second step for adjudication on the merits.
[20] The defendant's motion will therefore be dismissed, with costs under column III of the Tariff.
[21] As to the affidavit of Mr. Buteau dated January 26, 2005, it is removed from the file and was not considered in the context of this decision, as it contravenes subsection 84(2) of the Rules.
"Richard Morneau"
Prothonotary
Montréal, Quebec
February 9, 2005
Certified true translation
Peter Douglas
FEDERAL COURT
SOLICITORS OF RECORD
DOCKET: T-1942-98
STYLE OF CAUSE: ADMIRALTY ACTION IN REM AND IN PERSONAM
BETWEEN:
STELLA-JONES INC.
and
AXA BOREAL ASSURANCES INC.
Plaintiffs
and
HAWKNET LTD.
and
SUNLIGHT COMPANIA NAVIERA S.A.
and
SEBILAN COMPANIA NAVIERA S.A.
and
THE OWNERS AND ALL OTHERS INTERESTED
IN THE SHIP MARIANA (Ex "ANAMELI")
Defendants
PLACE OF HEARING: Montréal, Quebec
DATE OF HEARING: January 31, 2005
REASONS FOR ORDER: Richard Morneau, Prothonotary
DATE OF REASONS: February 9, 2005
APPEARANCES:
Jean-François Bilodeau FOR THE PLAINTIFFS
Peter Pamel FOR THE DEFENDANTS
SOLICITORS OF RECORD:
Robinson Sheppard Shapiro FOR THE PLAINTIFFS
Montréal, Quebec
Borden Ladner Gervais FOR THE DEFENDANTS
Montréal, Quebec
Date: 20050209
Docket: T-1942-98
Montréal, Quebec, February 9, 2005
Present: RICHARD MORNEAU, PROTHONOTARY
ADMIRALTY ACTION IN REM AND IN PERSONAM
BETWEEN:
STELLA-JONES INC.
and
AXA BOREAL ASSURANCES INC.
Plaintiffs
and
HAWKNET LTD.
and
SUNLIGHT COMPANIA NAVIERA S.A.
and
SEBILAN COMPANIA NAVIERA S.A.
and
THE OWNERS AND ALL OTHERS INTERESTED
IN THE SHIP MARIANA (Ex "ANAMELI")
Defendants
ORDER
The defendant's motion is dismissed, with costs under column III of the Tariff.
As to the affidavit of Mr. Buteau dated January 26, 2005, it is removed from the file and was not considered in the context of this decision, as it contravenes subsection 84(2) of the Rules.
"Richard Morneau"
Prothonotary
Certified true translation
Peter Douglas