Date: 20030508
Docket: T-298-01
Citation: 2003 FCT 567
SIMPLIFIED ACTION
ADMIRALTY ACTION IN PERSONAM
BETWEEN:
VALENTINO GENNARINI SRL
Plaintiff
AND:
ANDROMEDA NAVIGATION INC.
Defendant
REASONS FOR JUDGMENT AND JUDGMENT
[1] This is an action on account against the Defendant for disbursements incurred and for ship agency services rendered by the Plaintiff at the Port of Taranto, Italy, between June 25th and 30th, 2000. The services included, in particular, the coordination of loading and discharging operations of cargo of the "Evangelia IV", such cargo belonging to the Department of National Defence ("DND"). The Plaintiff seeks to recover the Canadian dollar equivalent of LIT 79,267,340 (Italian Lira), interest thereon since August 10, 2000 at commercial rates, compounded semi-annually until final payment is made to it, and costs, including costs of all exhibits and expert evidence.
BACKGROUND FACTS
[2] The Plaintiff operates a shipping agent company with a place of business in Taranto, Italy, and offers agency services to Italian and foreign flag vessels that are called to Italian ports. These services include, among other things, ship agency services and the coordination of loading and discharging operations of cargo aboard and from vessels at the port of Taranto.
[3] The evidence shows that Amican Navigation Ltd. ("Amican") was awarded the contract by the Canadian military for the purpose of transporting on board the "Evangelia IV" from Thessaloniki, Greece, a shipment stowed with containers and belonging to the Canadian military, for eventual discharge at, and on-carriage from, Taranto, Italy. The "Evangelia IV" had been voyage-chartered by the Defendant Andromeda.
[4] Under the agreement concluded with the Defendant ("the Agreement"), the Plaintiff handled the discharging operations at the port of Taranto of certain quantity of containers loaded on board the vessel and coordinated the transport of the containers inland to the required military facilities pursuant to instructions received from the Defendant. More specifically, the operations which had to be undertaken with respect to the cargo in question were: to arrange for the discharging of the containers from the vessel; to stack the containers at the port of Taranto awaiting on-carriage; to arrange for the loading and delivery by truck of the containers to the military base at Namsa, Italy; to discharge the containers from the trucks; and, finally, to stack the containers at Namsa as per the instructions of the Canadian military personnel.
[5] At the Defendant's request, the Plaintiff issued a pro forma estimate of expenses to be incurred. The purpose of this estimate was to assist the vessel's operators in evaluating the agency fees and port expenses to be incurred by the vessel's owners during its attendance at the port of Taranto as is customary. Separate pro forma estimates were also provided with respect to the discharging and forwarding of the cargo in question. The disbursement estimate was in the amount of LIT 53,400,00.
[6] As matters turned out, the port expenses relating to the vessel's call to the port of Taranto (other than the discharging and forwarding costs relating to the cargo of military equipment and the unlashing costs which the Defendant agreed to settle directly with the Plaintiff) were finally settled by the vessel's owners. The Plaintiff was informed by the Defendant that it reached an agreement with the vessel's owners whereby the latter accepted to pay these charges directly. These charges, which included the Plaintiff's agency fees, were billed directly to the vessel owners and fully paid by them.
[7] As is customary in the agency business, the Plaintiff requested an advance from the Defendant in the amount of US $25,000.00 for the operations which were to be rendered and disbursements to be incurred. However, this advance was never received. The Defendant, rather, undertook by telephone to pay upon receipt of the final disbursement account for services rendered and all incidental expenses.
[8] On June 27th, 2000, the Plaintiff advised the Defendant that the discharging of the 239 containers from the said vessel was completed at 9:15 a.m. on the same day. On June 28th, 2000, seven trucks were employed to take delivery of the cargo at the port of Taranto and the Plaintiff arranged the inland transportation of the containers to the military base at Namsa.
[9] On June 29th, 2000, the Plaintiff informed the Defendant that 124 containers of the 239 containers were already transferred from the port of Taranto to the Namsa facilities and the Plaintiff again requested in writing the amount of US $25,000.00 as advance for expenses incurred with respect to discharging and transferring operations. Again, the Defendant omitted to forward the requested advance. On June 30th, 2000, all 239 containers discharged from the vessel were transported and delivered to the military base in Namsa.
[10] On or about July 31st, 2000, Plaintiff issued an invoice to the Defendant in the amount of LIT 79,267,340 covering several expenses incurred on behalf of the Defendant together with the supporting vouchers. Although a number of reminders were sent to the Defendant, the latter never responded with respect to the outstanding payment of its account. Therefore, on February 20th, 2001, the Plaintiff instituted this action against it.
THE PARTIES' SUBMISSIONS
[11] The Plaintiff submits that it met its obligations under the terms and conditions of the Agreement. At no time did the Defendant dispute or question the Plaintiff's final invoice which was issued in accordance with the terms of the Agreement. Rather, by a fax message dated June 30th, 2000, the Defendant expressed its entire satisfaction with the Plaintiff's handling of the discharge operations by affirming that the Plaintiff's service was outstanding and its performance extraordinary. Furthermore, notwithstanding the assurances given by the Defendant to settle the invoice, it has not done so nor has it acknowledged the several requests for payment which have been issued by the Plaintiff.
[12] The Plaintiff submits that the pro forma estimate has no relevance to the present matter. The sole purpose of the estimate was to evaluate port expenses to be incurred by the vessel's owners or operator of the vessel who would normally be called upon to pay such expenses. The estimate was provided to, and at the request of, the Defendant in the event that the latter decided to undertake the operation of the vessel and the payment of such charges on account of the vessel.
[13] As matters turned out, the port expenses were finally settled by the vessel's owners. It is argued that the Plaintiff's claim against the Defendant relates solely to the handling of the discharging operations and coordination of the inland transportation of the cargo on behalf of the Defendant.
[14] The Plaintiff further submits that it never agreed to cut its agency fees by half as stated by the Defendant as the agency fee was to be paid to the Plaintiff by the owners of the vessel. Rather, it agreed with the Defendant that upon payment by the latter of Plaintiff's disbursement account, the Plaintiff would rebate to the Defendant 30% of the agency fee that the Plaintiff received from the vessel's owners upon receiving from the Defendant an invoice for this amount. However, no invoice was ever received from the Defendant in this respect although requested by the Plaintiff. The latter states it remains ready and willing to effect such rebate to the Defendant under the terms of the agreement between the parties. The agency fee was in the amount of LIT 8,516,875.
[15] In reply to the Defendant's contentions, it is further submitted that no agency fee has been charged to the Defendant. At no time was it ever discussed by the parties that some of the costs and charges included in the final invoice should be absorbed by the Plaintiff, nor did the Defendant ever complain about the Plaintiff's quotations or disbursement accounts prior to the institution of the present action.
[16] The Defendant submits in its Statement of Defence that the Plaintiff overcharged the services rendered which significantly exceed the initial quotation issued to it.
[17] Firstly, it is argued that at the time of entering into the contract with the Plaintiff, Mr. Vincenzo Eletti, the person in charge of the particular operation to be carried out with the Defendant on behalf of the Plaintiff, verbally confirmed to the Defendant that the total costs would not exceed US $25,000.00. It is submitted that the Plaintiff further agreed verbally to cut its agency fee by half which it failed to do in its final invoice. The commission rebate was in the amount of LIT 4,453,000. It is argued that there was no discussion whatsoever in respect of an invoice being provided to the Plaintiff in this regard. In fact, there is no such standard practice in the shipping industry.
[18] It is submitted that the Plaintiff also overcharged the expenses for the fork lift transportation and its rental costs. It further included charges in its invoice which should have been absorbed by the Plaintiff in its agency fees such as the watchmen services, the communications and car expenses and the various stamp expenses.
[19] Consequently, the Defendant submits that the charges comprising the amount of LIT 79,267,340 are incorrect and the true amount of the invoice, subject to the issue of the quote in the amount of US $25,000.00 to be determined by the Court, is $US $33,071.00. The Defendant thus submits that it is justified in refusing to pay the final invoice forwarded by the Defendant since it is inflated and incorrect.
ANALYSIS
Procedural questions
[20] At the commencement of the hearing of this matter, two motions came before me. The Plaintiff moved for an Order striking the evidence provided by way of the Affidavits of Ms. Rita Chirola and Mr. James Karathanos dated October 11, 2002 as it related to the alleged communication of the agency agreement between the Defendant and Amican to the Plaintiff. The Defendant, on its part, moved for an Order, firstly, to grant it leave to present its motion on less than two (2) clear days' notice; secondly, to grant it leave to amend its Statement of Defence; thirdly, to grant it the costs of the motion payable forthwith and in any event.
[21] At the outset of the trial, I communicated to the parties my decision to grant the Plaintiff's motion and to deny the Defendant's. The following my written reasons for doing so.
[22] As may be seen from the sworn Affidavit of Rita Chirola, the Defendant and its alleged principal, Amican, are related companies operating in the same office and using the same personnel. This is confirmed in the Affidavit of James Karathanos. The Defendant is thus seeking to introduce evidence of an agency relationship as between itself and a third party, and that such agency relationship was allegedly communicated to the Plaintiff.
[23] The Plaintiff denies that any communication of such agency relationship was made to it. It further argues that the agency relationship that existed between the Defendant and Amican, and the alleged communication of that relationship, were never pleaded in the Defendant's Statement of Defence. Consequently, the evidence sought to be introduced by the Defendant is improper and should be struck from the record.
[24] A careful examination of the pleadings is warranted. Firstly, in paragraph 2 of its Statement of Defence, the Defendant acknowledges that it retained the services of the Plaintiff to act as stevedoring agent for the discharge of certain cargo at the port of Taranto. There is no mention that it retained those services as an agent of a third party and not in its own capacity. In paragraph 3 of the Statement of Defence, the Defendant also admitted that it was the charterer of the "Evangelia IV". Further, in paragraph 15, it implicitly acknowledged that it was liable to pay the Plaintiff, merely stating it was "justified in refusing to pay the invoice forwarded by the Plaintiff since it is inflated and incorrect".
[25] Paragraph 4 of the Statement of Defence states that the Defendant "was retained to organize the discharge at the port of Taranto". The Defendant contends that while this allegation of fact does not specifically refer to the fact that it was, at all material times, acting as an agent, it did provide the Plaintiff with sufficient notice that the function and role of the Defendant was one of organization and that therefore it was not acting as a principal. It is argued that if the Plaintiff had concerns with respect to this allegation, it could have sought particulars, but failed to do so.
[26] Rules 174 and 183 of the Federal Court Rules, 1998 specifically provide that in a Statement of Defence, a party shall admit every allegation of material fact that is not in dispute and where it is intended to prove a version of facts that differs from that relied upon by the Plaintiff, plead that version of the facts. A defendant must also plead any fact and defence that might take an adverse party by surprise if it were not pleaded: Consumers' Gas Co. v. Canada, [1984] 1 F.C. 779 (F.C.A.). Accordingly, the Court should not consider any evidence which is irrelevant to the pleadings as they are formulated or which contradicts the pleadings: Glisic v. Canada, [1988] 1 F.C. 731 at 740 (F.C.A.).
[27] From my reading of the Statement of Defence, it is clear that the Defendant does not allege, nor even allude to the fact, that it was acting as an agent for a third party, or that such agency relationship was communicated to the Plaintiff during the course of their dealings. For the Defendant now to attempt to introduce evidence to the effect that it was acting as an agent for the third party Amican and, more importantly, that such evidence was communicated to the Plaintiff is tantamount to withdrawing an admission on the record without seeking leave from the Court and contradicts the Defendant's very pleadings themselves. It is for the Defendant to tell the Plaintiff what it is coming to Court to prove, not for the Plaintiff to be left guessing and to seek further particulars regarding what defence, in addition to those expressly pleaded, may be relied upon by the Defendant at trial.
[28] Accordingly, I ordered that the Affidavit of James Karathanos be struck from the record and, regarding the Affidavit of Rita Chirola, I ordered the following: that the reference to the words "entered into between Amican, through the agencies of Andromeda, and the plaintiff" at paragraph 8 be deleted; that paragraph 9, 10 and 14 be struck; and that reference to the words "as agent for Amican" at paragraph 12 be deleted.
[29] I turn now to the Defendant's motion to amend its Statement of Defence. This Court has consistently held that as a general rule, an amendment should be allowed for the purpose of determining the real question in controversy between the parties, provided that the allowance would not result in an injustice to the other party not capable of being compensated by an award of costs and that it would serve the interests of justice: Canderel Ltd. v. Canada, [1994] 1 F.C. 3 (F.C.A.). Factors relevant to the assessment of whether an amendment would cause prejudice to the other party that cannot be compensated by an award of costs include the timeliness of the motion to amend, the extent to which the amendment would delay an expeditious trial, the extent to which the original position caused another party to follow a course which is not easily altered, and whether the amendment facilitates the Court's consideration of the merits of the action: Scannar Industries Inc. et al. v. Canada (Minister of National Revenue) (1994), 172 N.R. 313 (F.C.A.).
[30] As I see it, there are many factors weighing against allowing the amendment to the Defendant's Statement of Defence in the case at bar.
[31] Firstly, the Defendant's motion to amend was filed almost 18 months after its original pleadings and presented one day before the scheduled time for trial whereas it could have been brought many months earlier. No amendment was sought after the examination for discovery of Ms. Chirola where the issue of agency relationship was first raised. Even more telling is the fact that the Defendant's Pre-Trial Conference Memorandum, rather than containing an argument or assertion that the Defendant was acting only as agent for Amican and/or that such agency was disclosed to the Plaintiff, admits to the version of events set out by the Plaintiff.
[32] Secondly, the amendment is not being made to refocus and particularize points in controversy but rather seeks to introduce a distinct and entirely new cause of defence. Therefore, it will not help clarify issues in dispute.
[33] Finally, and contrary to the Defendant's contention, the proposed amendments would inevitably delay an expeditious trial since an amended reply would presumably have to be filed by the Plaintiff and fresh examinations for discovery would have to be undertaken on the basis of the Amended Statement of Defence. In Montana Band v. Canada, [2002] F.C.J. No. 774 (QL) (F.C.T.D.), this Court held that an amendment that substantially changes the factual basis of the claim, made on the eve of a lengthy trial and requiring the parties to revise their legal opinions, pleadings, discovery and production should be refused because it inflicts a prejudice that cannot be compensated for by an award of costs.
[34] For these reasons, the Defendant's motion to seek leave to amend its Statement of Defence was denied.
[35] In any event, there is no evidence here to support the Defendant's allegation that it contracted with the Plaintiff as an agent for a third party. What the evidence does show is that on May 30th, 2000, the Defendant entered into discussions with the Plaintiff in view of obtaining information and a quote for the coordination of loading and discharging operations of cargo of the "Evangelia IV" in Taranto, Italy (Exhibit P-1). Regular communications by phone and by fax under the Defendant's letter-head culminated in the giving of a quote by the Plaintiff to the Defendant (Exhibits P-2 to P-6). Following further dialogue (Exhibits P-7 to P-11), the Defendant formally appointed the Plaintiff to act as an agent (Exhibit P-12). After the services were rendered, the Defendant wrote to the Plaintiff to express its thanks and appreciation for the latter's excellent and professional work (Exhibit P-31). At no time did the Defendant ever mention that it retained the Plaintiff's services as an agent of a third party and not in its own capacity.
[36] Mr. Vincenzo Eletti, who negotiated the stevedoring, discharging and trucking agreement on behalf of the Plaintiff, testified at trial that his counterpart at Andromeda was Rita Chirola, who did not tell him that the Defendant was acting as agent for Amican for the stevedoring, discharging and trucking operations. Further, on cross-examination, the Defendant's representative, Ms. Chirola, admitted, after strenuously denying it, that she was acting in June of 2000 as the Traffic Manager of the Defendant Andromeda in her dealings with the Plaintiff regarding the logistics and operations of that company and the chartering of the "Evangelia IV". This is in fact confirmed at para. 1 of her affidavit.
[37] Aside from the affidavit evidence of Rita Chirola, no evidence has been led by the Defendant to establish that it disclosed any agency relationship to the Plaintiff. In fact, this is contrary to the evidence of Mr. Eletti which was filed with his affidavit and contrary to the very documents and correspondence themselves give no indication whatsoever that disclosure of an agency relationship was made to the Plaintiff at any time in the course of its dealings with the Defendant. It is clear that Andromeda contracted with the Plaintiff as principal and not as an agent for any third party. Consequently, it is personally liable for the payment of the outstanding stevedoring charges arising out of the services the Plaintiff performed on its behalf.
[38] At the beginning of the hearing on the merits, Plaintiff's counsel sought to have the Court accept as filed the original documents referentially incorporated at paragraph 21 of the Affidavit of Vincenzo Eletti (the "Eletti Affidavit"). It was urged that these documents had been in the possession of the Defendant for over a year and were simply the documents that have been listed in the Plaintiff's Affidavit of Documents which was served upon the Defendant over a year ago pursuant to Rule 295.
[39] Counsel for the Defendant took issue with the method by which these documents were being introduced into evidence, arguing that they had to be introduced through the proper witnesses authoring the documents, whether in a normal trial or a simplified action. Otherwise, the Defendant would lose its right to reply to the allegations stated therein.
[40] This action is proceeding as a simplified action. Rules 299(1) and (2) govern the manner in which evidence will be adduced. Rule 299(1) allows the parties to introduce evidence by way of affidavit but this rule is subject to the requirement in rule 299(2), which requires the availability for cross-examination of a witness whose evidence has been tendered by affidavit, unless the adverse party agrees to forego that opportunity.
[41] What the Eletti Affidavit effectively does is to incorporate by reference into the affidavit, as if it was an integral part it, every document listed in the Plaintiff's Affidavit of Documents that the Plaintiff wishes to introduce as evidence in chief. The process of examination in chief which, by definition, includes the introduction of documents into evidence has thus been taken care of with the Eletti Affidavit filed pursuant to Rule 299(1). As for the effect of Rule 299(2) in the case at bar, counsel for the Defendant consented to waive his right to cross-examine Mr. Eletti. This means that the Defendant agreed that the Eletti Affidavit, including all documents incorporated by reference therein, be introduced into the Court record as the Plaintiff's evidence in chief without the need for cross-examination. Of course, this does not prevent the Defendant from adducing counterproof to rebut that evidence.
[42] The purpose of Rule 299 is to require the Plaintiff to file its evidence in chief by way of affidavit, including all the documents mentioned therein. There is no process in the rules on simplified actions requiring an affidavit, including all the documents referred to therein, to be introduced in evidence only through the person swearing that affidavit or authoring those documents. That process is taken care of by the affidavit and the documents that are attached pursuant to Rule 299(1). In the case at bar, if there was an issue as to whether there was anything said in the Eletti Affidavit that counsel for the Defendant wanted to cross-examine on, or if there was any issue regarding the introduction of documents referentially incorporated in that affidavit, the proper method was the cross-examination of Mr. Eletti, the deponent of the affidavit. However, the Defendant chose not to exercise its right.
[43] Thus, the Court accepted as filed the original documents incorporated by reference at paragraph 21 of the Eletti Affidavit since they had been listed in the Plaintiff's Affidavit of Documents which was already served upon the Defendant over one year ago along with copies of the documents themselves.
[44] Counsel for the Plaintiff also sought to read-in excerpts from the transcript of the examination for discovery of Ms. Chirola as part of his evidence in chief. Counsel for the Defendant objected however to any references to the discovery examination, arguing that pursuant to Rule 299, the Plaintiff is required to file its evidence in chief by way of affidavit.
[45] Rule 288 allows a party to introduce as its own evidence at trial any part of its examination for discovery of an adverse witness. Pursuant to the rules on simplified procedures however, there is no oral discovery. Rule 296 states that all discoveries are made in writing only and limited to 50 questions, and then evidence in chief is brought by way of affidavit.
[46] The present action was instituted pursuant to the regular rules of this Court. Subsequently, at the Pre-Trial Conference, it was ordered to proceed, by consent of the parties, pursuant to the rules for simplified procedures. However, when the examination on discovery took place, this action was still governed by the regular rules.
[47] With respect to introduction of evidence, the rules on simplified procedures do not provide for read-ins of oral discovery because there can be no read-ins of oral discovery; there is no oral discovery to begin with. As I read the rules of this Court on simplified procedures however, nowhere is there any indication that having an action converted from an ordinary one to a simplified procedure negates the application of Rule 288 regarding read-ins of the examination on discovery.
[48] In my view, Rule 288 applies mutatis mutandis to simplified proceedings converted from an ordinary action so as to allow read-ins from an oral discovery conducted under the general rules at the commencement of the action. If this were not the case, there would be no way to introduce transcripts of oral discovery other than by securing the affidavit of the discovered witness, Ms. Chirola in this case.
[49] Accordingly, I allowed the Plaintiff to read-in excerpts from the transcript of the examination for discovery of the Defendant's representative, Ms. Chirola, as its own evidence. I cautioned however that where the matter to be read-in was being introduced to impeach her credibility, the questions on discovery would have first to be put to the witness, pursuant to Rule 291.
Substantive issues
[50] As mentioned, the Plaintiff's claim in the present proceedings is for services rendered concerning the stevedoring, the discharge and the forwarding of the containers on shore on behalf of the Defendant. It has nothing to do with the disbursement account for port services which was incurred by the owner of the voyage-chartered vessel "Evangelia IV". The question to be determined is whether the Defendant is entitled to any adjustments to the invoices sent by the Plaintiff on the basis of its contested terms.
[51] As noted, the Plaintiff forwarded to the Defendant an invoice dated July 31, 2000, covering expenses incurred and ship agency services rendered by it at the Port of Taranto, Italy, between June 25th and 30th, 2000. The total invoice cost is LIT 79,267,340 broken down between the following elements (Exhibit P-44):
ITEM DESCRIPTION AMOUNT (LIT)
Discharging/Loading expenses
- Stevedores 74,419,810
- Customs Brokers dues/expenses 2,602,500
- Watchmen service 1,440,000
- Various communications services 397,530
- Car expenses for attending operations 360,000
Various expenses
- Legal papers per various matters 40,000
Stamps
- Stamps on original and copies 7,500
79,267,340
[52] The Plaintiff's invoice regarding the stevedoring and discharging operations of the 239 containers at the port of Taranto, Italy and their delivery by truck to the military base at Namsa, Italy further gives the following breakdown:
ITEM DESCRIPTION AMOUNT (LIT)
Expenses sustained for discharging containers
Lire 125.000 x n. 239 containers = 29,875,000
Expenses sustained for re-loading containers from
stocking area on to trucks
Lire 121.740 x n. 239 containers 29,095,860
Expenses sustained for transporting a fork-lift from
premises to Namsa base 6,200,000
Rental cost of a.m. fork-lift splitted as follows
a) n. 24 hours in straight time at Lire 165.000 each 5,490,000
b) n. 9 hours in overtime at Lire 170.000 each
Port dues and Taxes on net cargo handling
Lire 975 x M/t 1.182 = 1,152,450
Cost of stocking area in the port 60,000
Expenses for un-lashing operations carried out 2,544,000
by vessel
74,419,810
[53] As mentioned, Rita Chirola, the Defendant's Director of Operations, was the only witness on behalf of the Defendant at trial and she did not in any significant way rebut the detailed explanations provided by the Plaintiff's witness, Mr. Eletti.
Total cost of Plaintiff's services not exceeding US $25,000
[54] At trial, the Defendant led evidence by way of the examination for discovery of Rita Chirola that there was an agreement between her and Mr. Eletti over the phone that the total cost of the Plaintiff's services would be US $ 25,000. This discussion was predicated on a two-page detailed quotation dated June 3rd, 2000 sent by the Plaintiff to the Defendant (Exhibits P-6 and P-43). Paragraphs 1 to 9 of that quote relate to the stevedoring, discharging and trucking operations.
[55] On cross-examination, Ms. Chirola admitted that the agreement concerning the lump sum amount of US $25,000 pertained to paragraphs 2 to 9 of the quote only. Thus, it excluded the expenses sustained for the discharging of the containers at the Port of Taranto which amounted to LIT 29,875,000. This was confirmed by Mr. Eletti's own evidence at trial. The latter further testified that the amount of US $25,000 was also related to the advance payment requested by the Plaintiff from the Defendant for expenses incurred with discharging and transferring operations, as it is customary (Exhibits P-29 and P-36).
[56] In my view, based on Mr. Eletti's testimony and Ms. Chirola's own admissions during cross-examination, there is no justification for the Defendant wanting to make the adjustment it pressed on the Plaintiff under this item.
Rental cost of the forklift
[57] On cross-examination, Ms. Chirola was asked why she had struck the amount of LIT 3,960,000 under this head on the invoice and replaced it with the amount of LIT 1,320,000. She explained that she received a fax from the Plaintiff dated June 7, 2000, stating that it was going to charge the Defendant LIT 1,320,000 per day (Exhibit P-8), and that she understood one day as entailing 24 hours of work. Mr. Eletti testified however that one day was equivalent to 8 hours of work and, consequently, the Defendant was billed for twenty-four hours in straight time (three days) at LIT 165,000 per hour, which amounted to LIT 3,960,000.
[58] At trial, Mr. Eletti's attention was drawn to the fact that the rate of LIT 1,320,000 per day provided by the Plaintiff in its fax dated June 7, 2000 for the rental of the fork-lift did not correspond to the amount of LIT 1,020,000 per day at paragraph 8 of the quotation provided by the Plaintiff on June 3, 2000. Mr. Eletti explained that the reason for this was that at a certain point in time, the DND people decided they needed the containers to be stacked within the Namsa premises three lines high. Thus, the fork-lift for which the rate of 1,020,000 per day was quoted was too small to reach the third tier. Consequently, Ms. Chirola was informed of this and she agreed to rent a bigger fork-lift. An amended quotation was therefore provided by the Plaintiff to the Defendant by fax dated June 7, 2000 for the rental cost of the bigger fork-lift, which would explain the rate of LIT 1,320,000 per day.
[59] Mr. Eletti further testified that the rate of LIT 165,000 per hour appearing of the invoice was obtained by dividing LIT 1,320,000 by eight hours, which constitutes a normal work day. His evidence is consistent with the documentary evidence, namely the fax dated June 3, 2000 which states at para. 9: "Should employment of fork-lift overcome the standard 8 hrs/day straight time [...]". Thus, a total of twenty-four hours was charged because the discharging and storing of the containers took three days of work, which explains the amount of LIT 3,960,000 for the rental cost of the larger fork-lift.
[60] Based on Mr. Eletti's uncontradicted evidence at trial, which is consistent with the documentary evidence, I find the Defendant's objection to paying the Plaintiff's invoice, on this item, to be unwarranted.
Overtime in the rental of the forklift
[61] On cross-examination, Ms. Chirola was asked why she had struck the amount of LIT 170,000 per hour under this head on the invoice and replaced it with the amount of LIT 55,000. First, she explained that the Plaintiff never mentioned that overtime with respect to the rental of the forklift would be needed and she never authorized any overtime. When asked why she did not strike the amount completely rather than change it, she simply stated that this was an internal note she made and not something which had been agreed to. Further, when she was asked where she got the rate of LIT 55,000 per hour, she said she must have got it from one of the quotations before stating she may have obtained it over the phone. Ms. Chirola then stated that overtime was specifically mentioned in the quotation provided by the Plaintiff to the Defendant on June 2, 2000. The latter states at paragraph 9:
9. Rental cost of above fork-lift manned by driver and equipped with spreader Lit. 1.560.000 per day (equivalent to usd 740 abt) Should employment of fork-lift overcome the standard 8 hrs/day straight time, any extra hour (during weekdays) would be charged at It. Lire 142.000 per hour if no spreader is used or Lit. 205.000 per hour if spreader is used.
[62] When asked again why she had replaced the amount indicated on the invoice by the amount of LIT 55,000 rather than striking it altogether, if indeed she had not authorized overtime, Ms. Chirola said she wasn't sure, but that it was possible that the need for overtime was contemplated by the parties.
[63] Mr. Eletti testified on behalf of the Plaintiff that overtime was needed with respect to the discharging and storing of the containers at the Namsa premises and that the Defendant was informed of this. The reason for overtime was that the operation of off-loading the trucks and properly storing the containers at Namsa in the exact places where the DND people required them to be fitted resulted in the Plaintiff's agents having to move the containers around since certain kinds of containers had to be stored in certain specific areas. This operation took nine hours more than the expected time.
[64] As for the rate of LIT 170,000 per hours charged to the Plaintiff for overtime, Mr. Eletti admitted there was no mention of overtime in the amended quotation provided by the Plaintiff in its fax dated June 7, 2000 regarding the larger forklift. He pointed out however, that overtime was contemplated in the fax dated June 3, 2000. Further, the quotation for overtime provided to the Defendant on June 3, 2000 indicates a rate of LIT 142,000 per hour for the smaller fork-lift, and the rate of LIT 170,000 simply indicates a slight increase proportionate with the increase in the rate for the straight-time rental cost of the larger fork-lift which was quoted in the fax dated June 7, 2000.
[65] I accept the evidence of Mr. Eletti and in light of the inconsistencies in Ms. Chirola's own evidence at trial, I find that the Defendant's objection to paying the Plaintiff's invoice, on this item, unwarranted.
Cost of stocking area in the port
[66] Ms. Chirola was asked during cross-examination why she struck out the amount of LIT 60,000 under this head when she had stated during her examination on discovery that the containers had to be stocked at the port. She replied that the Plaintiff never mentioned in either of its quotations that it was going to charge the Defendant for the cost of stocking area in the port. Mr. Eletti testified that the amount of LIT 60,000 charged to the Plaintiff is the port duty paid to the port authorities for occupation of the land, a compulsory charge. The original receipt by the port authority for the payment of this duty was enclosed with the final invoice sent to the Defendant (Exhibit 44).
[67] I accept the explanation put forward by Mr. Eletti on behalf of the Plaintiff and find that the Defendant's is not justified in refusing to pay Plaintiff's invoice on this item.
Expenses for watchmen and various communications services
[68] Ms. Chirola was asked during cross-examination why she struck out the amount for watchmen services. She replied that nothing was ever mentioned by the Plaintiff about the appointment of a watchman and she never authorized the Plaintiff to appoint a watchman. She added that, in any event, it is normally the ship owner who pays for that. As for the expenses for various communication services (Exhibits P-34 and P-44), Ms. Chirola explained that she had no idea that the Plaintiff would charge her for all the phone calls Mr. Eletti would make on a daily basis. She added that she deals with agents around the world and in all of her dealings never has any of them charged the Defendant for phone communications.
[69] Mr. Eletti testified that once the containers got off-loaded on pier, the Plaintiff's agents realized that they could not move them contemporaneously toward the Namsa premises because lorries were not allowed to travel overnight and because Namsa could not receive the cargo overnight. He then personally called Ms. Chirola from the pier to ask her whether she thought it reasonable to entrust a watchman's service to look after the containers overnight before moving them to Namsa. She agreed to having the Plaintiff appoint a watchman to look after the containers rather than having the cargo remain unattended on the pier. As for the amount charged to the Defendant for various communications services, Plaintiff's counsel submitted that it is customary for an agent to charge for such expenses as every day agency expenses. Based on the evidence, I am satisfied that the amounts in question should be allowed as claimed by the Plaintiff.
Rebate of certain amount of agency fees to the Defendant
[70] Finally, evidence was led at trial by the Defendant by way of the examination for discovery of Rita Chirola to the effect there was an agreement between her and Mr. Eletti over the phone that the Plaintiff would rebate to the Defendant fifty percent (50%) of the full agency fee charged to the owner of the "Evangelia IV". It was stressed there were no conditions the Defendant had to comply with to receive the rebate such as the need to provide an invoice to the Plaintiff.
[71] In his affidavit, Mr. Eletti confirms that there was an agreement with respect to the rebate. However, the agreement was to the effect that the Plaintiff would return to the Defendant thirty percent (30%) of the agency fees paid by the owners of the vessel upon receiving the Defendant's invoice for this amount.
[72] The documentary evidence confirms Mr. Eletti's testimony that the remittance of the rebate to the Defendant was conditional upon the Plaintiff receiving an invoice from the latter (Exhibit P-39). However, there is contradictory evidence regarding both the total amount of the agency fees paid by the vessel's owners (the first quotation dated June 3, 2000 states an amount of LIT 8,084 whereas the Eletti affidavit indicates an amount of LIT 8,516,875) and the share of the agency fees which was agreed to be rebated to the Defendant Under the circumstances, the proper course is to allow 50% of LIT 8,084.
Conclusion in respect of the payment of Plaintiff's invoices by the Defendant
[73] For all these reasons, the Plaintiff is entitled to LIT 75,225,340 with interest from August 10, 2000 at commercial rates compounded semi-annually until full payment is made by the Defendant, together with costs and disbursements, including expert evidence.
JUDGE
OTTAWA, Ontario
May 8, 2003
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-298-01
STYLE OF CAUSE:
VALENTINO GENNARINI SRL
Plaintiff
and
ANDROMEDA NAVIGATION INC.
Defendant
PLACE OF HEARING: Montreal, Quebec
DATE OF HEARING: October 22, 2002
DATE OF REASONS
FOR JUDGMENT: May 8, 2003
APPEARANCES:
Mr. Peter G. Pamel FOR THE PLAINTIFF
Mr. J. Kenrick Sproule FOR THE DEFENDANT
SOLICITORS OF RECORD:
Mr. Peter G. Pamel FOR THE PLAINTIFF
Borden, Ladner, Gervais
Montreal, Quebec
Mr. J. Kenrick Sproule FOR THE DEFENDANT
Montreal, Quebec