T-1259-96
ACTION IN REM AGAINST THE SHIP
"JENNIE W"
B E T W E E N:
CESAR REANO, JOSE SANCHEZ, LUIS ARCE VELA,
HELMANN PALMA, DAVID LOAYZA, PABLO MEZA
AGUILAR AND BENITO HUANGAL
Plaintiffs,
AND:
THE OWNERS AND ALL
OTHERS INTERESTED IN THE SHIP "JENNIE W"
Defendant.
REASONS FOR ORDER
NADON J.:
The Defendant, owner of the ship JENNIE W, seeks to set aside a default judgment rendered by Denault J. on November 26, 1996, pursuant to which the defendant was condemned to pay to the Plaintiffs the following sums of money:
| Cesar Reano $ 65,950.04 |
| Jose Sanchez $ 24,453.14 |
Luis Arce Vela $ 23,104.60
Helmann Palma $ 27,959.27
David Loayza $ 22,442.20
Pablo Meza Aguilar $ 10,809.44
Benito Huangal $ 10,809.44
In addition, Denault J. ordered the Defendant to pay a sum of $7,354.59 for security and other expenses.
The Defendant"s motion is brought under Rule 439(3) of the Federal Court Rules which provides:
| The Court may, on such terms as seem just, set aside or vary any judgment given under Rules 432 to 438. |
The Plaintiffs" grounds for bringing this application, as they appear from the notice of motion, are:
| (a) That there are valid and compelling reasons which explain the Defendant"s delay in filing a Defence including service of a defective Statement of Claim without required indorsement, a lack of understanding on the Defendant"s part of the significance and effect of the legal proceedings commenced against it in a jurisdiction foreign to it further exacerbated by the fact that the spoken and written language of the Defendant is Spanish while all proceedings and communications in this matter were in the English language. |
| (b) That there are strong and substantial grounds of defence in this matter. The Plaintiffs, Cesar Reano and Jose Sanchez have settled their claims against the Defendant and have consented to this motion. Further, the wages and benefits sought by the remaining Plaintiffs greatly exceed the wages and benefits agreed to by them in their contracts of employment with the Defendant, are unreasonable and cannot be substantiated or sustained in law. |
With respect to the first ground, I am of the view that the explanations given for the delay to file a defence and for the delay to file the present motion are not satisfactory.
I am not ready to subscribe to counsel"s submission that her client failed to retain Canadian counsel and enter a defence to the action before November 26, 1996 because of the Defendant"s lack of understanding of the nature of the proceedings and an inability to speak or read English as alleged in paragraph (a) above.
Counsel for the Plaintiffs acted with the utmost of fairness in keeping the Defendant informed at all times with respect to the proceedings. On many occasions counsel for the Plaintiffs warned the Defendant to engage Canadian counsel to file a defence and thus prevent a default judgment. The Defendant did not seem to be concerned by the Canadian legal proceedings until it was informed that its ship could be sold to satisfy the default judgment.
In my view, the evidence does not support the Defendant"s submission that language difficulties prevented it from understanding the Canadian legal process. I have examined the evidence closely and I see no reasonable explanation for the failure by the Defendant to act prior to November 26, 1996.
I now turn to the delay in bringing the present motion. Counsel for the Defendant was retained on December 16, 1996 and the present motion was filed on March 27, 1997. No reasonable explanation for this delay has, in my view, been offered. Counsel for the Defendant argued that there were two explanations for the delay. Firstly, she argued that her client was negotiating with some of the Plaintiffs. Secondly, counsel argued that upon being retained on December 16, 1996, she immediately advised counsel for the Plaintiffs that she had been instructed to move to set aside the default judgment. In response to this communication, counsel for the Plaintiffs advised counsel for the Defendant that he would not apply to have the ship sold until the default judgment issue had been resolved.
These explanations are not, in my view, satisfactory. Notwithstanding the negotiations, the Defendant was not prevented from filing its motion to have the default judgment set aside. There is nothing in the evidence to the effect that the Plaintiffs ever suggested or represented to the Defendant that it could or should delay the filing of its motion. Further, I do not see how counsel for the Plaintiffs" decision not to apply for the sale of the ship can have any bearing on the Defendant"s failure to file its application to set aside Denault J."s judgment of November 26, 1996.
I am therefore of the view that neither the delay prior to November 26, nor the delay between December 16, 1996 and March 27, 1997 have been satisfactorily explained.
With respect to the Defendant"s second ground, I agree that the Defendant appears to have a serious defence concerning the amounts owing to the Plaintiffs.
The applicable test for determining whether a default judgment should be set aside or varied was explained as follows by Joyal J. in Television Broadcast Ltd. v. Trinh (1991), 46 F.T.R. (6th) 161 at 162 where he states:
| First, the defendant must establish substantial reasons preventing him from defending the action brought against him. Second, he must establish not beyond all doubt, but on a reasonable basis, that he has good grounds for his defence. |
As I have already indicated, the Defendant has advanced "good grounds for his defence". However, the Defendant has not, in my view, "established substantial reasons preventing him from defending the action brought against him". When one examines the period between May 1996, when the statement of claim and the warrant of arrest were served upon the ship, and November 26, 1996, when Denault J. rendered his default judgment, one cannot escape the conclusion that the delay was willful. That is why I stated earlier that the Defendant had not offered a reasonable explanation for the delay which occurred prior to November 26, 1996. As to the delay in bringing this motion, the explanation advanced by the Defendant is not convincing.
In these circumstances, not without some reluctance in view of what appears to be a serious defence, I am of the view that I should not exercise my discretion in setting aside the judgment rendered by Denault J.
Costs shall be in favour of the Plaintiffs.
"MARC NADON"
Judge
Montreal, Quebec
May 6, 1997
T-1259-96
ACTION IN REM AGAINST THE SHIP
"JENNIE W"
CESAR REANO, JOSE SANCHEZ,
LUIS ARCE VELA, HELMANN PALMA,
DAVID LOAYZA, PABLO MEZA AGUILAR
AND BENITO HUANGAL
Plaintiffs
THE OWNERS AND ALL OTHERS
INTERESTED IN THE SHIP "JENNIE W"
Defendant
REASONS FOR ORDER
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
COURT NUMBER: T-1259-96
BETWEEN: ACTION IN REM AGAINST THE SHIP "JENNIE W"
CESAR REANO, JOSE SANCHEZ, LUIS ARCE VELA,
HELMANN PALMA, DAVID LOAYZA, PABLO MEZA
AGUILAR AND BENITO HUANGAL
Plaintiffs
AND:
THE OWNERS AND ALL
OTHERS INTERESTED IN THE SHIP "JENNIE W"
Defendant
PLACE OF HEARING: Ottawa, Ontario
DATE OF HEARING: May 1st, 1997
REASONS FOR ORDER BY: The Honourable Mr. Justice Nadon
DATED: May 6, 1997
APPEARANCES:
Mr. Edward Shortall for the Plaintiffs
Mrs. Cecily Strickland for the Defendant
SOLICITORS OF RECORD:
Lewis, Sinnott, Shortall for the Plaintiffs
Suite 301, Toronto Dominion Place
140 Water Street
St.John's, Newfoundland
A1C 5L7
Stewart McKelvey Stirling Scales for the Defendant
P.O. Box 5038
St.John's, Newfoundland
A1C 5V3