Date: 19991230
Docket: T-38-96
BETWEEN:
BARZELEX INC.
Plaintiff
- and -
THE M.V. "EBN AL WALEED" ET ALS
Defendants
REASONS FOR ORDER
(Delivered orally from the Bench at Ottawa
and Montreal on Friday, December 17, 1999)
Hugessen J.
[1] This is a motion brought by the defendants to obtain a direction with respect to the costs of this action.
[2] On November 29th last I gave an order disposing of the trial of an issue herein which had been ordered pursuant to Rule 107 of the Federal Court Rules, 1998. That order determined the applicable limitation of liability which the defendants were entitled to invoke in their favour pursuant to the Hague Rules as enacted in Turkey, the country from which the shipment in issue had originated. The effect of that order is for practical purposes now to put an end to this litigation subject of course to any intervention by the Court of Appeal.
[3] On February 11, 1999, the defendants made an offer in an amount which it is common ground was more than adequate to meet any possible liability the defendants might have in principal, interest and costs with regard to the claim herein as limited in accordance with the Hague Rules. That is why I say that the effect of the order of November 29 was in practical terms to put an end to the action.
[4] The defendants had earlier made an offer of a lesser amount which they concede was not enough to meet the then amount that the plaintiff would have been entitled to in principal, interest and costs. Notwithstanding the defendants invitation to me to give some sort of effect to that inadequate offer, I decline to do so. An offer is either enough or it is not enough. The earlier offer was not enough and it does not improve the defendants" position with regard to costs.
[5] As far as concerns the offer that was made in February 1999, however, it seems to me that that clearly engages the terms of Rule 420. The plaintiff is entitled to its costs on a party and party basis up to the date of that offer. The defendants are entitled to double costs from the latter date subject to what I am about to say.
[6] First of all, the defendants have asked in addition to an order for double costs, that those costs should be calculated on Column V of Tariff B. I am not persuaded that this is a case to which Column V should be made applicable. The defendants have suggested that this is a case of unusual difficulty, I do not agree. The point, while novel, was not exceptionally difficult and does not justify an award of more than would otherwise be normal, that is to say Column III. The defendants also invoke the fact that there has been an offer made but of course, the defendants are more than compensated for the fact that that offer was made by the application of Rule 420 to which I have just adverted. Finally, the defendants in support of their request that this case should attract Column V costs suggest that there has been good cooperation between the parties. That is perfectly true. There has been excellent cooperation between counsel but as counsel for the plaintiff points out, that is a two edge sword and the fact that counsel have cooperated and assisted in bringing this matter on and having it resolved by the Court in an expeditious and relatively inexpensive manner is hardly a ground for penalizing the plaintiff.
[7] The trial of the issue was badly broken up due to circumstances which were to some extent beyond the control of the parties. At a first hearing, which was held in June of 1999 the defendants" expert witness from Turkey Mr. Kavak was present. Unfortunately the plaintiff"s expert witness did not present himself for reasons of illness but he did not make his unavailability known to plaintiff"s counsel and therefore, of course, to the Court and defendants" counsel as well until too late to avoid Mr. Kavak coming as he did from Turkey. So we heard Mr. Kavak"s evidence on that hearing date in June. At that time, however, Mr. Kavak"s evidence was by no means as full as it later became and in particular he did not have available for us a recent decision of the Turkish Court of Appeal which played a not unimportant part in the final determination which this Court made of the issue before it. He relied upon jurisprudence which had not been mentioned in the written report which he had filed in accordance with the Rules. I made some comments at the time on the defendants" conduct in bringing expert evidence before the Court on what I then called an ambush basis. The result of that as far as I am concerned is that I think both parties conducted themselves in connection with that June hearing in a manner that would make it inappropriate for me to make an award of costs to either in respect of that day of hearing. So that day will be at the expense of both parties each bearing its own costs.
[8] I propose to make the same disposition with regard to an abortive second day of hearing which was to have taken place in August 1999. That date was very shortly after the catastrophic earthquake that struck Turkey. The Court itself took the initiative to suggest to the parties that we should not attempt to hold the hearing at a time when it would obviously be difficult for the expert witnesses to come from Turkey and when as might well be expected they could be very preoccupied by their own personal affairs and those of their families. The Turkish earthquake was in my view an act of God and I think it only proper that the costs of that abortive day when no hearing was in fact held should equally be borne by each party.
[9] Finally, when the case did come on again in October, both experts were present and that is a day of hearing of the trial which may properly form part of the costs in this case and since it was posterior to the offer made by the defendants, an offer which has now been found to be adequate, it entitles the defendants to double the regular costs which they would be entitled to for that day of hearing.
[10] I have indicated that I do not think this is an appropriate case for Column V. I would however, direct the taxing officer that in exercising his discretion to choose within the range of figures for units under Column III, the default Column, he should choose at high end of that range.
[11] Finally, the defendants have raised the possibility of my making a lump sum order. In my view, as a matter of policy the Court should favour lump sum orders. It saves time and trouble for the parties and it is a more efficient method for them to know what their liability is for costs. I would be perfectly prepared therefore if the defendants who are largely successful on this motion wished to draw an order calculating the amounts of the costs to which each party is entitled to make a further order in fact awarding a lump sum. That lump sum would be arrived at in this way:
| a) the plaintiff"s costs up to the date of the February 1999 offer should be calculated in accordance with Column III and choosing the high end of the range in that Column. Added to the fees would of course be the disbursements. |
| b) the defendants" costs from and after February 11, 1999 would be calculated in the same manner using the high end of the range of Column III and doubling the amount of the fees but excluding any costs for the hearing dates in June and August. Added to those fees would be the proper and reasonable travelling and living expenses of the expert witness in connection with the hearing date in October and any other disbursements that are appropriate. |
[12] The amount thus calculated in b) above would be reduced by the amount of the plaintiff"s costs by virtue of set off and the balance would be the amount to which the defendants would be entitled as a lump sum. After making such calculations I would normally round that sum to the nearest $100.
[13] Accordingly, I shall file these reasons and invite counsel for the defendants to move pursuant to Rule 369 for an order either specifying a detailed direction to the assessment officer if parties want to take that route or specifying a lump sum calculated in the way that I have indicated. Of course, if the parties can agree on the sum, it would not be necessary to take out an Order at all.
"James K. Hugessen"
Judge
Ottawa, Ontario
December 30, 1999