Date: 20011211
Docket: T-625-97
Neutral citation: 2001 FCT 1363
Action in rem against the Ship "African Cape" and in personam
against the owners, Bonaveria Shipping Co. Ltd. ("BS"), Dimko International Company S.A. and all other parties interested in the ship "African Cape"
BETWEEN:
FRANCOSTEEL CANADA INC.
Plaintiff
AND
THE M.V. "AFRICAN CAPE"
and
her owners, BONAVERIA SHIPPING CO. LTD.
and
her managers, DIMKO INTERNATIONAL COMPANY S.A.
Defendants
[1] The parties to the present motion had applied jointly for the fixing of a special hearing on costs which was held on September 26, 2001 before Prothonotary Morneau.
[2] In an order dated November 6, 2001, Prothonotary Morneau awarded the plaintiff, in lieu of its assessed costs, a lump sum of $40,000.00.
[3] The defendants now ask this Court to reverse the Prothonotary's decision, vacate the award of costs in favour of the plaintiff and award costs to the defendants for an appropriate amount. At the hearing, the defendants abandoned their argument with regard to the interpretation of Rule 420 of the Federal Court Rules, 1998, SOR/98-106 (the "Rules"). The only argument that remains concerns the application of Rule 400.
[4] The defendants submit that the Prothonotary misapplied Rule 400 when he found that the settlement offer should not be considered under Rule 400(3)(a) because of late disclosure to the Court. The defendants argue that the Prothonotary failed to take into account that the settlement offer was higher than the damages awarded to the plaintiff by a considerable margin. As a result, the defendants argue that having determined that the defendants' settlement offer was reasonable and adequate, the Prothonotary should have awarded costs to the defendants under Rule 400.
[5] For the reasons set out below, I disagree with the defendants that the Prothonotary failed to properly exercise his discretion under Rule 400.
[6] While I agree with counsel for the defendants that pursuant to Rule 422, settlement offers must never be disclosed to the trial judge until a ruling on liability and quantum has been issued, I am unable to infer from Prothonotary Morneau's remarks that this is what he was suggesting.
[7] Upon reading the written representations made to Prothonotary Morneau at the special hearing on costs, (Defendant's Motion Record, Vol. II, at p. 232), I am satisfied that he was only addressing the issue of what happened during the arbitration itself and the position of the parties before the arbitrator. Therefore, in the context of the arbitration, the Prothonotary took into consideration the fact that up to the close of the hearing, the defendants had denied liability and presented evidence to the effect that there was no damage to the cargo, and that the arbitrator clearly decided the question of liability in favour of the plaintiff without any knowledge that an offer to settle was the subject of discussions between the parties. As such, Prothonotary Morneau was satisfied that the plaintiff was the successful litigant and that he was entitled to the costs.
[8] The general rule is that costs are normally awarded to the successful party, (Merck & Co. v. Novopharm Ltd. (1998), 152 F.T.R. 74 (F.C.T.D.); Ticketnet Corp. v. Canada (1999), 99 D.T.C. 5429). In the case at bar, Prothonotary Morneau determined that the plaintiff was the successful party and thus awarded it costs.
[9] Rule 400 gives a wide discretion to the Court in relation to costs. Rule 400(3) lists a number of factors that the Court may wish to consider in the exercise of its discretion. However, I also note that it is not restrictive and that the Court may consider any other matter that it considers relevant (Rule 400(3)(o)). The amount of the award of damages is only one factor in consideration of costs. (Doyle v. Sparrow (1979), 106 D.L.R. (3d) 551 (Ontario C.A.)).
[10] Furthermore, the Prothonotary did not state that an out-of-court settlement offer had no bearing on the determination as to entitlement of costs. Rather, he said that it had no bearing on his discretionary consideration of the "result of the proceeding". In fact, Prothonotary Morneau took into consideration the offer to settle in determining the quantum of costs (see paragraphs 16, 19 and 28 of his order).
[11] For these reasons, I reject the defendants' submission that the Prothonotary misapplied Rule 400 and consequently, the appeal is dismissed.
"Danièle Tremblay-Lamer"
JUDGE
Montreal, Quebec
December 11, 2001
FEDERAL COURT OF CANADA
TRIAL DIVISION
Date: 20011211
Docket: T-625-97
Action in rem against the Ship "African Cape" and in personam against the owners, Bonaveria Shipping Co. Ltd. ("BS"), Dimko International Company S.A. and all other parties interested in the ship "African Cape"
BETWEEN:
FRANCOSTEEL CANADA INC.
Plaintiff
AND
THE M.V. "AFRICAN CAPE"
and her owners,
BONAVERIA SHIPPING CO. LTD.
and her managers,
DIMKO INTERNATIONAL COMPANY S.A.
Defendants
REASONS FOR ORDER
AND ORDER
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-625-97
STYLE OF CAUSE: FRANCOSTEEL CANADA INC.
Plaintiff
AND
THE M.V. "AFRICAN CAPE"
and
her owners, BONAVERIA SHIPPING CO. LTD.
and
her managers, DIMKO INTERNATIONAL COMPANY S.A.
Defendants
PLACE OF HEARING: Montreal, Quebec
DATE OF HEARING: December 10, 2001
REASONS FOR ORDER AND ORDER OF
THE HONOURABLE MADAM JUSTICE TREMBLAY-LAMER
DATED: December 11, 2001
APPEARANCES:
Mr. Richard Desgagnés FOR PLAINTIFF
Mr. Victor DeMarco FOR DEFENDANTS
SOLICITORS OF RECORD:
Ogilvy Renault
Montreal, Quebec FOR PLAINTIFF
Brisset Bishop
Montreal, Quebec FOR DEFENDANTS