Federal Court Decisions

                                 T-2015-89

BETWEEN:

     MURRAY MACKAY

                                 Plaintiff/Applicant,

     - and -

     SCOTT PACKING AND WAREHOUSING CO. (CANADA) LTD.

                                 Defendant/Respondent.

     REASONS FOR ORDER

GIBSON J.:

These reasons arise out of an application by the Plaintiff for an Order for Directions supported by a draft Order proposing that a hearing in connection with this matter take place at which counsel for the Plaintiff and counsel for the Defendant might make argument in law upon the evidence already in the record at the close of the trial of this action in relation to whether the loss found to have been sustained by the Plaintiff and for which the Defendant has been found liable shall be recovered in full by the Plaintiff against the Defendant or whether the Defendant's liability can be limited by application of a contractual or legal limitation, and if so, the amount of the Defendant's limited liability.

The background to the motion is the following.

On March 31, 1994, I signed judgment in this action in the following terms:

This Court orders and adjudges that the Plaintiff recover from the Defendant damages calculated in accordance with the limitation of liability clause found, in accordance with reasons for this judgment, to form part of the contract between the parties for removal of the Plaintiff's belongings by the Defendant from Toronto, Ontario to London, England, which contract was entered into on or about the 24th day of November, 1987.

     My reasons in support of the judgment, signed the same day as the judgment, concluded in the following terms:

The defendant failed to fulfil its obligations to the plaintiff in its packing, inventorying, tagging and moving of the plaintiff's belongings which resulted in the loss or damage of many of those belongings. However, the defendant is able to rely upon the limitation of liability clause that was part of the contract between the plaintiff and the defendant Scotpac. Damages are payable by the defendant to the plaintiff calculated in accordance with the limitation of liability clause in the contract. If the parties are unable to agree on the quantum of damages so calculated, either party may apply to the court for guidance after first having given notice to the other party of the intention to do so.

The plaintiff is entitled to pre and post judgment interest at a rate and calculated in a manner agreed to between the parties. In the event of failure of agreement, either party, on notice to the other party, may make written representations to the Court and directions will be provided.

On the issue of costs, given the result, I am of the view that each party should be responsible for his or its own. However, if either party wishes to make written representations in this regard, counsel should so advise the Court on notice to the other party and directions will be provided.

No evidence was adduced at the trial of this action as to quantum of damages, calculated in accordance with the limitation of liability clause in the contract referred to in my judgment and in the first paragraph of the quotation from my reasons that appears above.

     The Plaintiff appealed my judgment to the Federal Court of Appeal. In an affidavit sworn the 2nd day of August, 1996, counsel for the Plaintiff at the trial of this matter and before the Court of Appeal, attests in part as follows:

12.      At the beginning of the hearing of the Appeal before the Court of Appeal, the Court expressed its concerns that the Judgement of the Trial Division was premature, since, as the Judgement failed to determine the quantum of the Judgement, it was not a final Judgement;

13.      The Plaintiff had attempted to have this very issue clarified by the Honourable Judge Gibson prior to filing its Notice of Appeal, the whole, as appears from a copy of the Plaintiff's "Motion for Completion of Judgement and for Shortening of Delays" which was filed into the Court Record on April 13, 1996. Unfortunately, I was advised by the Registry of the Court that Judge Gibson was away at the time the Motion was to be presented, and the Motion could not be heard by Justice Gibson prior to the expiration of the Delays for Appealing the Judgement, if, they were to be applicable. The parties having failed to reach an agreement to extend the delays for filing an Appeal, the Plaintiff had no choice but to proceed with the Appeal on the basis that the Judgement of the Honourable Justice Gibson was a final Judgement, ...

     On December 22, 1995, the Court of Appeal issued judgment, subsequently amended in a technical way only, that, in its amended form, is in the following terms:

The appeal is dismissed with costs.

The matter is, however, returned to the trial judge for a resolution of the issues that remain to be considered to determine the amount to which the appellant is entitled to recover from the respondent and for final judgment.

In supporting reasons, Robertson J.A. wrote:

With respect to the third issue, in both the reasons and the judgment, the Trial judge left open the determination of the quantum of damages and the rate of interest. That option, of course, was not open to him. As a result, the appeal before us appeared to be premature. At the respectful insistence of the parties, and in the interests of the administration of justice, the Court decided to hear the appeal as if an order in the nature of one made pursuant to Rule 480 of the Federal Court Rules had been made authorizing the Trial judge to dispose of the question of liability leaving the question of damages for a reference. In the circumstances, the issue of damages under the limitation of liability clause must be referred back to the Trial judge for assessment in the unlikely event that the parties are unable to reach an agreement on quantum.1

[underlining added by me for emphasis]

Robertson's J.A. reference to "... as if an order made pursuant to Rule 480..." is worthy of note. No application for an order under Rule 480 was in fact made before trial and no such order was made at any time before or during trial either on the motion of counsel or on the Court's own motion.

    

     From both my reasons and the reasons of the Court of Appeal, it is apparent that an assumption was made that the parties would agree on the calculation of damages in accordance with the contract for removal of the Plaintiff's goods. Unfortunately, I am now advised by counsel for the parties that no such agreement can be reached. Thus, I am left with the unenviable task of assessing damages in accordance with the contract with no evidence having been adduced at trial that would allow me to fulfil the task.

     The directions proposed in the Plaintiff's draft order would be of little help. To reiterate, they invite me to direct that a hearing take place for argument

...in law ...upon the evidence already in the record at the close of the trial of this action... in relation to whether the loss found to have been sustained by the Plaintiff and for which the Defendant has been found liable shall be recovered in full by the Plaintiff from the Defendant or whether the Defendant's liability can be limited by application of a contractual or legal limitation, and if so, the amount of the Defendant's limited liability.

                             [underlining added by me for emphasis]

In effect, the Plaintiff invites me to give directions that would allow his counsel either to argue, in law, that my judgment is in error in finding the Defendant's liability to be limited in accordance with the contract or, if I insist on maintaining my judgment in that regard, to determine the quantum of damages from the evidence in the record. As I have already indicated, no evidence was adduced at trial as to what the quantum of damages determined in accordance with the contract might be. With great respect, the directions proposed in the Plaintiff's draft order would provide no solution whatsoever.

     I nonetheless propose to take advantage of the Plaintiff's motion for directions to provide alternative directions urged before me by counsel for the Defendant, that I believe will allow me to fulfil the mandate contemplated by my reasons and given to me by the Court of Appeal and that will allow me to issue a final judgment as to quantum of damages. Rule 500 of the Federal Court Rules reads in part as follows:

500.(1)      The Court may, for the purpose of taking accounts or making inquiries, or for the determination of any question or issue of fact, refer any matter to a judge nominated by the Associate Chief Justice, a prothonotary, or any other person deemed by the Court to be qualified for the purpose, for inquiry and report.

...

(3)      Upon a reference having been made under this Rule, the referee shall, on the application of any party, fix a time and place for the hearing of the reference, of which due notice shall be given to the other side.

(4)      The hearing of a reference shall proceed in the same manner as a trial before the Court.

(5)      The party who applies to a referee to fix a time and place or to make an appointment for the hearing of any reference shall furnish to the referee for his use a certified copy of the pleadings, issues and order of reference, certified by an officer of the Registry.

[underlining added by me for emphasis]

     It is of interest that the "Court" may refer the determination of any question or issue of fact to a referee who may be a judge. A judge proposed to be nominated is to be nominated by the Associate Chief Justice but, in light of the fact that I am seized of this matter by virtue of the judgment of the Court of Appeal, I regard the obtaining of a nomination of myself as a mere formality, with great respect to the responsibility of the Associate Chief Justice in these matters. The words in the judgment of the Court of Appeal referred to earlier, speaking as the Court, could be interpreted as being a reference to me for the determination of a question or issue of fact in accordance with Rule 500, but I am satisfied that it is not necessary to rely wholly on such an interpretation. On the motion before me, I speak for the Court. I conclude that it is open to me, given the judgment of the Court of Appeal, to refer, to myself, the issue of quantum of damages for determination as a question or issue of fact, and I have so ordered.

     Rule 500 contemplates an application by a party to fix a time and place for a hearing of the reference. My Order provides for such an application by the Defendant.

     Counsel for the Plaintiff, in arguing that a reference is an inappropriate vehicle to bring this matter to final judgment, referred to my reasons for judgment in Upjohn Co. et al v. Apotex Inc.² At page 296, I wrote that a judge considering an application under Rule 480 for a reference, on the facts of that case, on an appeal of an order of a prothonotary denying a reference,

...should be guided by the principle that an order under rule 480 providing for a reference after trial is an exceptional procedure and that, in the absence of consent or compelling reasons bearing on the conduct of the action as a whole, conventional procedures should be maintained.

Here, there is no application under Rule 480 before me and the time for such an application in this action is long past. However, the process that I am contemplating involves an implied reference by the Court of Appeal or a reference of my own volition, in light of my reasons and the judgment of the Court of Appeal. There is certainly no consent on behalf of the Plainitff to a reference. However, in the absence of consent, I am satisfied that there are compelling reasons bearing on the conduct of the action as a whole which justify a reference in this matter. I can conceive of no other option for bringing this matter to final judgment short of, in effect, reopening those portions of my judgment which are now final and which have not been brought into question by the Court of Appeal. I regard that as an option that is simply not open to me.

     In the result, on this application by the Plaintiff for directions, an order has gone directing a reference pursuant to Rule 500 to provide for the determination of the questions or issues of fact necessary to be determined in order to allow a final judgment to be issued in this matter.

             ___________________________________

                     Judge

Ottawa, Ontario

September 9, 1996

__________________

     ¹          Earlier in the reasons, Robertson J.A. described the "third issue" in the following terms:
     The third issue relates to the Trial Judge's apparent failure to make certain findings of fact in relation to the calculation of damages under the limitation clause.
The relevant portions of Rule 480 of the Federal Court Rules read as follows:
480. (1)      Any party desiring to proceed to trial without adducing evidence upon any issue of fact including, without limiting the generality thereof,
     ...
...shall, at least 10 days before the day fixed for the commencement of trial, apply for an order that such issue of fact be, after trial, the subject of a reference under Rules 500 et seq. if it then appears that such issue requires to be decided.
(2)      An Order of the kind contemplated by paragraph (1) may be made at any time before or during trial and may be made by the Court of its own motion.

     ²      (1993) 71 F.T.R. 290.