Federal Court Decisions

Date: 19980915

Docket: T-536-98

     ACTION IN REM ET IN PERSONAM

ENTRE :      GILLES JEAN, domicilié et résidant au 155,

         Place du Quai, C.P. 244, Percé, Québec GOC 2L0

         District de Gaspé

     Demandeur

ET :          GEORGES MAMELONET, domicilié et

         résidant au 836, Rang d'Irlande, C.P. 201, Percé,

         Québec G0C 2L0 District de Gaspé

     Demandeur

ET :          FRANCE LEBREUX, domiciliée et résidant au

         836 Rang d'Irlande, C.P. 201, Percé, Québec

         G0C 2L0 District de Gaspé

     Demanderesse

ET :          LE NAVIRE "CAPITAINE DUVAL"

     Défendeur

ET :          LE NAVIRE "CAPITAINE DUVAL II"

     Défendeur

ET :          LE NAVIRE "EXPLORATHOR CAPITAINE DUVAL III"

     Défendeur

ET :          LES PROPRIÉTAIRES ET TOUTES LES AUTRES

         PERSONNES AYANT UN DROIT SUR LES NAVIRES

         "CAPITAINE DUVAL", "CAPITAINE DUVAL II" ET

         "EXPLORATHOR CAPITAINE DUVAL III"

     Défendeurs

ET :          SET-HA (DIVISION INTERNATIONAL) INC.,

         personne morale légalement constituée, ayant son

         siège au 155, Place du Quai, C.P. 244, Percé, Québec

         G0C 2L0 District de Gaspé

     Défenderesse

     REASONS FOR ORDER

TEITELBAUM J.:

[1]      For a complete background to this case, one must look at the decision of this Court dated June 26, 1998. In that decision, I allowed an application to strike the action in rem and in personam commenced by the plaintiffs for want of the Court"s jurisdiction, with costs.

[2]      On July 27, 1998, the defendants filed a Notice of Motion to have the Court determine the costs that the defendants are entitled to in the action. The defendants, in their Notice of Motion, seek an order of the Court awarding costs on a solicitor and client basis to be paid jointly and severally by the plaintiffs (in the Notice of Motion, it is stated "to be paid jointly and severally by the defendants) or, alternatively, defendants seek an order that costs be awarded on a lump sum basis in accordance with the maximum number of units under column IV under Part I of Tariff B, in addition to the disbursements incurred under Part III of Tariff B for a total lump sum amount of $16,357.28 to be paid jointly and severally by the plaintiffs (as before, defendants are mentioned in the Notice of Motion).

[3]      Pursuant to Rule 400(1) of the Federal Court Rules, the Court has a very broad discretion in determining the issue of costs.

400. (1) The Court shall have full discretionary power over the amount and allocation of costs and the determination of by whom they are to be paid.

400. (1) La Cour a entière discrétion pour déterminer le montant des dépens, les répartir et désigner les personnes qui doivent

les payer.

[4]      This "discretion" must be exercised judicially. Rule 400(3) lists some, but not all, of the factors that the Court may consider in exercising its "discretion".

(3) In exercising its discretion under subsection (1), the Court may consider      (a) the result of the proceeding;      (b) the amounts claimed and the amounts recovered;      (c) the importance and complexity of the issues;      (d) the apportionment of liability;      (e) any written offer to settle;      (f) any offer to contribute made under rule 421;      (g) the amount of work;      (h) whether the public interest in having the proceeding litigated justifies a particular award of costs;      (i) any conduct of a party that tended to shorten or unnecessarily lengthen the duration of the proceeding;      (j) the failure by a party to admit anything that should have been admitted or to serve a request to admit;      (k) whether any step in the proceeding was      (i) improper, vexatious or unnecessary, or      (ii) taken through negligence, mistake or excessive caution;      (l) whether more than one set of costs should be allowed, where two or more parties were represented by different solicitors or were represented by the same solicitor but separated their defence unnecessarily;      (m) whether two or more parties, represented by the same solicitor, initiated separate proceedings unnecessarily;      (n) whether a party who was successful in an action exaggerated a claim, including a counterclaim or third party claim, to avoid the operation of rules 292 to 299; and

(o) any other matter that it considers relevant.

(3) Dans l'exercice de son pouvoir discrétionnaire en application du paragraphe (1), la Cour peut tenir compte de l'un ou l'autre des facteurs suivants :      a) le résultat de l'instance;      b) les sommes réclamées et les sommes recouvrées;      c) l'importance et la complexité des questions en litige;      d) le partage de la responsabilité;      e) toute offre écrite de règlement;      f) toute offre de contribution faite en vertu de la règle 421;      g) la charge de travail;      h) le fait que l'intérêt public dans la résolution judiciaire de l'instance justifie une adjudication particulière des dépens;      i) la conduite d'une partie qui a eu pour effet d'abréger ou de prolonger inutilement la durée de l'instance;      j) le défaut de la part d'une partie de signifier une demande visée à la règle 255 ou de reconnaître ce qui aurait dû être admis;      k) la question de savoir si une mesure prise au cours de l'instance, selon le cas :      (i) était inappropriée, vexatoire ou inutile,      (ii) a été entreprise de manière négligente, par erreur ou avec trop de circonspection;      l) la question de savoir si plus d'un mémoire de dépens devrait être accordé lorsque deux ou plusieurs parties sont représentées par différents avocats ou lorsque, étant représentées par le même avocat, elles ont scindé inutilement leur défense;      m) la question de savoir si deux ou plusieurs parties représentées par le même avocat ont engagé inutilement des instances distinctes;      n) la question de savoir si la partie qui a eu gain de cause dans une action a exagéré le montant de sa réclamation, notamment celle indiquée dans la demande reconventionnelle ou la mise en cause, pour éviter l'application des règles 292 à 299;      o) toute autre question qu'elle juge pertinente.

[5]      Pursuant to Rule 400(6), the Court has a further discretion.

(6) Notwithstanding any other provision of these Rules, the Court may      (a) award or refuse costs in respect of a particular issue or step in a proceeding;      (b) award assessed costs or a percentage of assessed costs up to and including a specified step in a proceeding;      (c) award all or part of costs on a solicitor-and-client basis; or      (d) award costs against a successful arty.

(6) Malgré toute autre disposition des présentes règles, la Cour peut :      a) adjuger ou refuser d'adjuger les dépens à l'égard d'une question litigieuse ou d'une procédure particulières;      b) adjuger l'ensemble ou un pourcentage des dépens taxés, jusqu'à une étape précise de l'instance;      c) adjuger tout ou partie des dépens sur une base avocat-client;      d) condamner aux dépens la partie qui obtient gain de cause.

[6]      In the case of Belgo Nineira Comercial Exportadora S.A. et al. v. Hadley Shipping Co. 131 F.T.R. 36, Prothonotary Hargrave, at page 40, states:

[12] Solicitor/client costs "... are exceptional and generally to be awarded only on the ground of misconduct connected with the litigation.": Amway Corp. v. R. , [1986] 2 C.T.C. 339, at 340 (F.C.A.). Indeed, "Solicitor-client costs are generally awarded only where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties.": Young v. Young et al. , [1993] 4 S.C.R. 3; 160 N.R. 1; 34 B.C.A.C. 161; 56 W.A.C. 161, at 41.

[7]      There is no doubt that there was misconduct on the part of the plaintiffs in the manner in which they commenced the present action.

[8]      As I said in my decision of June 26, 1998, Gilles Jean and Georges Mamelonet with 30 or 31 other persons or corporations were shareholders in the defendant, Set-Ha (Division International) Inc. Gilles Jean was, up to February 15,1998, "Président et Directeur général" and therefore, I am satisfied, had full knowledge of the affairs of the company when he commenced his legal proceedings and had the three vessels belonging to Set-Ha arrested.

[9]      Georges Mamelonet was a shareholder of Set-Ha and was its Vice-President. I am also satisfied that he, as well, had knowledge of the affairs of the company when he commenced his action and had the company"s three vessels arrested.

[10]      In any event, the plaintiffs, on March 27, 1998, had their attorneys send a mise en demeure giving Set-Ha to March 30, 1998 to pay $229,999.62 "à défaut de quoi nous n"aurons d"autre choix que d"intenter une action contre vous et ce, sans autre avis ni délai".

[11]      I said, in my June 26, 1998 decision, at page 4, in paragraphs 7, 8 and 9:

[7]      It would appear obvious to any reasonable person that there would be no default on the part of Set-Ha if, by March 30, 1998, at 5:00 p.m., Set-Ha paid the amount claimed and it would appear obvious that Court proceedings (une action) are not to be commenced before 5:00 p.m. on March 30, 1998, unless some very special reason, not previously known, became apparent.

[8]      Notwithstanding the above mise-en-demeure giving Set-Ha to 5:00 p.m. on March 30, 1998 to make payment for "des salaires dus" or for "des dépenses", the plaintiffs, Gilles Jean, Georges Mamelonet and France Lebreux commenced legal proceedings by filing into the Federal Court Registry an action in rem and in personam and this on March 27, 1998.

[9]      In addition, at what appears to be the same time, Gilles Jean, Georges Mamelonet and France Lebreux filed affidavits to Lead Warrant to arrest the vessels "CAPITAINE DUVAL", "CAPITAINE DUVAL II" and "EXPLORATHOR CAPITAINE DUVAL III" for their salary and expense claims.

[12]      I am satisfied that this action on the part of the plaintiffs, to have the three vessels arrested before the delay given in the mise en demeure, is misconduct on the part of the plaintiffs warranting more than simple costs.

[13]      Furthermore, the insured value of one of the vessels, the M.V. "CAPITAINE DUVAL " was $2,000,000. Surely, Jean and Mamelonet, as past President and Vice-President, had knowledge of this fact.

[14]      Why, one may ask, did they issue warrants for the arrest of the three vessels owned by the defendant Set-Ha? To cause the company, I am satisfied, serious embarrassment.

[15]      The evidence in the main file is to the effect that the vessel M.V. "CAPITAINE DUVAL" has a mortgage on it for a sum of approximately $575,000., which mortgage is held by the Bank of Montreal, leaving a net worth of the said vessel at approximately $1,425,000., a sum much greater than the $229,999.62 claimed by all three plaintiffs.

[16]      Although I have no evidence before me as to the effect the arrest had with regard to the mortgage holder, I am satisfied the defendant would have to "explain" to the mortgage holder what is happening and why the vessel was under arrest.

[17]      I am satisfied that the arrest was done to purposely embarrass the defendant in the eyes of the mortgage holder.

[18]      I believe it is not necessary to find further examples to indicate that the arrests of the vessels were made to purposely cause very serious problems to the defendant and to prevent the defendant from having the vessels ready for the upcoming tourist season to commence in May 1998. The arrests were effected in April 1998.

[19]      In that I am satisfied that the actions of the plaintiffs clearly show "misconduct" on their part, I am satisfied they should pay a lump sum of $20,000. as costs, including disbursements and costs for the present motion. I am satisfied that the plaintiffs" conduct stops just short of what one may consider "reprehensible misconduct". For this reason, I will not award costs on a solicitor and client basis.

                            

                         "Max M. Teitelbaum"                                  J.F.C.C.

OTTAWA, ONTARIO

September 15, 1998