Date: 20010926
Docket: T-387-98
Montréal, Quebec, September 26, 2001
Present: Mr. Richard Morneau, Prothonotary
ACTION IN PERSONAM AGAINST ABTA SHIPPING
COMPANY LIMITED AND TRADE FORTUNE INC. S.A.
BETWEEN:
REMARLO EVANGELISTA NAPA,
CHONA A. NAPA,
CYRUS J. FERRAREN,
CONCEPTION FERRAREN,
PETER JULIAN EYMARD SORIANO,
ALMA MOTILLA NOCES,
MILAGROS JAVINES SANORJO,
RITA SANORJO,
EDWINA VIRAY ORBE,
ANNA LIZA AGUDOS CALINGA-ON
and
CONCHITA B. ORTEGA
Plaintiffs
and
ABTA SHIPPING COMPANY LIMITED
and
TRADE FORTUNE INC. S.A.
Defendants
ORDER
This motion by the defendants under Rule 107 is dismissed, with costs to the plaintiffs in each of dockets T-387-98 and T-1344-98.
In regard to the schedule to be adhered to in this case, the parties will have to proceed with settlement discussions under Rule 257 by October 26, 2001, and, failing a settlement of the case, the plaintiffs shall serve and file a requisition for a pre-trial conference under Rule 258 on or before November 26, 2001.
This order is applicable as well in docket T-1344-98.
Richard Morneau
Prothonotary
Certified true translation
Suzanne M. Gauthier, LL.L., Trad. a.
Date: 20010926
Docket: T-387-98
Neutral Citation: 2001 FCT 1055
ACTION IN PERSONAM AGAINST ABTA SHIPPING
COMPANY LIMITED AND TRADE FORTUNE INC. S.A.
BETWEEN:
REMARLO EVANGELISTA NAPA,
CHONA A. NAPA,
CYRUS J. FERRAREN,
CONCEPTION FERRAREN,
PETER JULIAN EYMARD SORIANO,
ALMA MOTILLA NOCES,
MILAGROS JAVINES SANORJO,
RITA SANORJO,
EDWINA VIRAY ORBE,
ANNA LIZA AGUDOS CALINGA-ON
and
CONCHITA B. ORTEGA
Plaintiffs
and
ABTA SHIPPING COMPANY LIMITED
and
TRADE FORTUNE INC. S.A.
Defendants
REASONS FOR ORDER
MR. RICHARD MORNEAU, PROTHONOTARY
Introduction
[1] This is a motion by the defendants under Rule 107 of the Federal Court Rules, 1998 (the Rules) to have the Court order that the contractual aspect of this case be tried first; this trial, therefore, would not include the issues of extracontractual (or tortious) liability cited by the plaintiffs in their action.
[2] According to the defendants, the damages to which the plaintiffs might be entitled are covered in full by the contracts between the parties. A trial on the contractual aspect would show relatively quickly (via a ten (10) day trial) that the defendants have paid all of the compensation owing to the plaintiffs. Consequently, the defendants should not be forced to defend against the tortious liability aspects cited by the plaintiffs.
Context
[3] On January 16, 1998, the vessel M.V. FLARE was heading toward Montréal to take on a cargo of grain. While it was in Canadian waters, that is, in the Gulf of St. Lawrence off the coast of Newfoundland, the M.V. FLARE broke in two and subsequently sank.
[4] According to the plaintiffs, at the time of the wreck the atmospheric and marine conditions were normal.
[5] The FLARE had a crew of twenty-five, the majority of them Filipino sailors. Some crew members were of Greek origin and at least one was a Yugoslav national.
[6] Of the twenty-five crew members, only four were rescued and survived the shipwreck.
[7] Three of them, Filipinos, are among the plaintiffs in this case. The fourth, Petar Markovic, a Yugoslav, is the plaintiff in docket T-1344-98. These two cases also include some claims by the spouses and dependants of both the surviving sailors and the deceased.
[8] Under Rule 105(a), it was ordered on November 20, 1998 that the two proceedings be tried jointly. Consequently, although the contracts affecting the Filipino sailors may differ somewhat from the one affecting the Yugoslav sailor, Petar Markovic, the situation of all the plaintiffs must be considered comprehensively for the purposes of this review.
[9] These reasons and the order accompanying them are applicable as well in docket T-1344-98.
[10] The contractual situation of the parties appears to be as follows.
[11] In the case of the Filipino sailors, the defendants now concede that the collective agreement, which they describe as the "National Collective Agreement between Cypriot Shipowners Association and the Federation of Transport, Petroleum & Agriculture Workers of Cyprus (SEK) - FTPAW SEK and the Cyprus Agricultural, Forestry Transport, Port, Seamen and Allied Occupations Trade Union PEO - SEGDAMELIN PEO for Cyprus Flag Vessels Beneficially Owned by Cypriots" (the collective agreement), does not prevail over the individual contract of employment signed by each sailor. However, this individual contract includes a series of so-called standard clauses and conditions. One of these clauses, clause 20.A.1, reads as follows:
SECTION 20. COMPENSATION AND BENEFITS
A. COMPENSATION AND BENEFITS FOR DEATH
1. In case of death of the seafarer during the term of his contract, the employer shall pay his beneficiaries the Philippine Currency equivalent to the amount of Fifty Thousand US dollars (US$50,000) and an additional amount of Seven Thousand US dollars (US$7,000) to each child under the age of twenty-one (21) but not exceeding four (4) children, at the exchange rate prevailing during the time of payment.
...
[12] In the case of the Yugoslav sailor, Petar Markovic, although his individual contract of employment contains an insurance clause, it does not appear to have a clause like the clause 20.A.1 quoted above. However, the defendants argue that the said contract of employment incorporates the collective agreement by reference. The plaintiff Markovic vigorously disputes that there is such an incorporation. Let us note for the moment that the clause in the collective agreement on which the defendants rely, inter alia, to argue the exclusion of any tortious liability on their part, reads:
2. Compensation for incapacity
A Seafarer who sustains an accident during his employment, not through his own fault, including any accident while travelling to the vessel to assume duty or back from the vessel and whose capacity to work is reduced as a result of such accident, is entitled compensation, irrespective of duration of service. The compensation is based on the insurable amount of DRS 16,200,000 and is calculated according to the following ratios:
...
Analysis
[13] Rule 107 reads:
| 107. (1) The Court may, at any time, order the trial of an issue or that issues in a proceeding be determined separately. (2) In an order under subsection (1), the Court may give directions regarding the procedures to be followed, including those applicable to examinations for discovery and the discovery of documents. |
107. (1) La Cour peut, à tout moment, ordonner l'instruction d'une question soulevée ou ordonner que les questions en litige dans une instance soient jugées séparément. (2) La Cour peut assortir l'ordonnance visée au paragraphe (1) de directives concernant les procédures à suivre, notamment pour la tenue d'un interrogatoire préalable et la communication de documents. |
|
[14] It is trite law that the granting of an order under this rule is discretionary (see Depuy (Canada) Ltd. v. Joint Medical Products Corp. (1996), 67 C.P.R. (3d) 145, quoting at page 146 Urie J.A. of the Federal Court of Appeal in Abramsky v. Canada (1985), 60 N.R. 6 at page 8).
[15] Of course, the burden of persuading the Court under this rule rests on the shoulders of the applicants, in this case the defendants.
[16] As the following extract from the decision of the Federal Court of Appeal in Illva Saronno S.p.A. v. Privilegiata Fabbrica Maraschino "Excelsior", [1999] 1 F.C. 146, at page 154, illustrates, the applicable test under Rule 107 is the following:
| Accordingly, on the basis of previous authority and in light of the changes introduced by the 1998 Rules, I would formulate the test to be applied under rule 107 as follows. On a motion under rule 107, the Court may order the postponement of discovery and the determination of remedial issues until after discovery and trial of the question of liability, if the Court is satisfied on the balance of probabilities that in the light of the evidence and all the circumstances of the case (including the nature of the claim, the conduct of the litigation, the issues and the remedies sought), severance is more likely than not to result in the just, expeditious and least expensive determination of the proceeding on its merits. [Emphasis added] |
Par conséquent, compte tenu des décisions qui ont été rendues et des modifications qui ont été apportées par les Règles de 1998, je formulerais le critère à appliquer en vertu de la règle 107 comme suit: dans le cadre d'une requête présentée en vertu de la règle 107, la Cour peut ordonner l'ajournement des interrogatoires préalables et de la détermination des questions de redressement tant que les interrogatoires préalables et l'instruction concernant la question de la responsabilité n'auront pas eu lieu, si elle est convaincue selon la prépondérance des probabilités que, compte tenu de la preuve et de toutes les circonstances de l'affaire (y compris la nature de la demande, le déroulement de l'instance, les questions en litige et les redressements demandés), la disjonction permettra fort probablement d'apporter au litige une solution qui soit juste et la plus expéditive et économique possible. [mes soulignés] |
|
[17] In Saronno, the Court concluded, at pages 156-57:
| On balance, I have decided that the defendants have not discharged the burden of establishing on the balance of probabilities that savings of expense and time are sufficiently likely, nor the interest of a just disposition of the proceeding on its merits liability to be advanced, as to justify departing from the general principle that all issues in a proceeding should be dealt with together. In reaching this conclusion, I have been particularly influenced by the following considerations: the paucity of information in the defendants' affidavit; discovery is already under way; the existence of profits is questionable; delays in the final disposition of the case are likely to be prejudicial to the plaintiff; and the difficulty of totally disentangling questions of law that go to liability from those pertaining to the remedy to be granted, if any. [Emphasis added] |
Somme toute, j'ai décidé que les défenderesses ne se sont pas acquittées de l'obligation qui leur incombait d'établir selon la prépondérance des probabilités que la possibilité d'effectuer des économies de temps et d'argent et d'apporter une solution juste au litige est telle qu'est justifiée une dérogation au principe général voulant que toutes les questions qui se posent dans une instance soient examinées ensemble. En arrivant à cette conclusion, je me suis arrêté en particulier aux considérations suivantes: la faible quantité de renseignements figurant dans l'affidavit des défenderesses; le fait que les interrogatoires préalables sont déjà en cours; le fait qu'il est contestable que des profits aient été réalisés; le fait que si l'on tarde à régler l'affaire d'une façon définitive, la demanderesse subira probablement un préjudice et le fait qu'il est difficile de démêler complètement les questions de droit qui se rapportent à la responsabilité et celles qui se rapportent au redressement à accorder le cas échéant. [mes soulignés] |
|
[18] Although Saronno and the judgments cited therein approached Rule 107 from the standpoint of the traditional intellectual property situation, where the Court is asked to separate the relief issue from the liability issue, I must agree with the defendants that the language of Rule 107 does not limit the possibility of a postponement to those questions alone, and it is conceivable therefore that Rule 107 does apply in this case, to separate the contractual relationship between the parties from the issue of tortious liability.
[19] In its essential features, as referred to in paragraph [2], supra, the defendants' thesis is that the contracts between them and the plaintiffs in both cases must be seen as exhaustive of the compensation or damages owing to the plaintiffs or their dependents. Having paid the contractual indemnities to the sailors as generously as possible (at least to the Filipino sailors), they argue that the Court should register this reality in a trial that the defendants estimate will potentially last ten (10) days, instead of letting the plaintiffs engage both parties in a trial that would deal with both the contractual aspect and the tortious liability and that could last more than twelve (12) weeks, again according to the defendants' estimates.
[20] As a rule, of course, this Court will try to adopt any solution that is likely to accomplish the goals expressed in Rule 3, i.e. the just, most expeditious and least expensive determination of the proceeding.
[21] However, have the defendants in the case at bar established, on a balance of probabilities, that it more likely than not that a trial on the contractual aspect will be sufficient and decisive?
[22] I do not think so.
[23] This does not mean, in the context of this motion, substituting ourselves for the Court on the merits and trying to determine how the contracts between the parties will ultimately be interpreted. However, the defendants' position that it is sufficiently clear that the relevant contracts govern the situation necessarily leads us to consider, in a limited way, the relative value of the defendants' position.
[24] In this regard, it must be noted, in so far as the Yugoslav plaintiff Markovic is concerned, that he has so far not received any compensation under his contract, owing to the fact -- judging by what was disclosed at the hearing -- that the parties do not agree on whether the collective agreement is actually incorporated in the plaintiff's individual contract.
[25] According to the defendant, the collective agreement should be considered as being incorporated in the said contract. However it seems to me that there is nothing in the evidence submitted by the defendants to show that this is probably the case. Furthermore, I do not think the following comments by Nadon J. of this court in his reasons dismissing a motion for summary judgment in the case of this plaintiff help to tilt the balance of probabilities in favour of the defendants:
Whether or not the terms and conditions of the Collective Agreement have been incorporated in the Plaintiff's contract of employment, I cannot say. There is not sufficient evidence before me to come to a conclusion. However, what I can say is that Captain Nikitovic's evidence is sufficient, at this stage, to lead me to the conclusion that there appears to be a genuine issue to be tried in regard to the terms and conditions of the contract of employment and more particularly with regard to the Defendant's undertaking to insure the Plaintiff.
[Emphasis added]
[26] These remarks by the Court show that the contractual situation between the plaintiff and the defendants is not at all clear.
[27] Given this uncertainty as to the incorporation of the collective agreement, it cannot be argued that the clause in that agreement (see paragraph [12], supra), which would immunize it from any claim of any kind by the plaintiff or his dependents, applies.
[28] As to the Filipino sailors, and although the collective agreement is no longer a factor, the defendants argue that clause 20.A.1 quoted above (see paragraph [11], supra) and the general nature of the contracts between these sailors and the defendants means that the total amounts payable to the sailors or their dependents are those already paid by the defendants pursuant to its contractual relationship.
[29] As to the scope or force of clause 20.A.1, I am unable to identify anything that is really conclusive in its language that would lead me to tilt in favour of the defendants' thesis.
[30] As to the more general nature of these contracts, the defendants refer to certain comments by the British Columbia Court of Appeal in Sarabia v. "Oceanic Mindoro", [1997] 2 W.W.R. 116, since the plaintiffs' contracts are similar, it is argued, to the one that Court had to examine. In that judgment, the Court had to consider as its ratio decidendi whether the contract covering the employee in question required him to sue his employer only in the Philippines, that is, before the institution referred to as the POEA. Thus the following comments by the Court, at page 123, must be read as obiter dictum:
This is a contract dictated to shipowners and seafarers by the Philippine government as part of its effort to balance the interests of shipowners and seafarers and to ensure that citizens of the Philippines benefit from the export of labour that not only provides jobs, but also satisfies much of the country's foreign currency needs. In these circumstances, deciphering the intention of the parties seems a singularly artificial endeavour. The government wrote the contract. There can be little doubt that the government intended that claims in tort, wherever the wrongdoing occurred, would be adjudicated by the POEA and limited to the compensation provided in the contract, for that is what the Supreme Court of the Philippines says the relevant legislation means.
[31] Moreover, the following reasons given by the Court at pages 121-22 tend to show that the Court's statement that the contract was exclusive in terms of claims is subject to some nuances:
Their essential points are that the POEA has exclusive jurisdiction over all claims of a seafarer against his employer shipping company, including a claim in tort, whenever and wherever committed, so long as it is work-related, that the POEA has that exclusive jurisdiction by virtue of the Executive Order; and that the exclusivity of that jurisdiction had been affirmed by the Supreme Court of the Philippines
In opposition, Pompeyo Nolasco, an experienced labour lawyer, says that the POEA contract does not prevent the respondent from suing in tort. He does not comment on whether the parties agreed in the contract that the POEA would have exclusive jurisdiction over a claim based on negligence, just as Mr. Agcaoili, Mr. Carale and Mr. Siddayao did not comment on whether the contract excluded a claim before the POEA based on negligence.
[Emphasis added]
[32] According to the defendants, Sarabia is prima facie proof of the merits of their position on this motion. Although that decision helps the defendants' thesis, I am not prepared to consider that the dictum to which the defendants refer makes their thesis, such as it becomes, probable.
[33] Considering that the defendants' contractual thesis does not tilt the balance of probabilities in regard to the sailors' right of action, I do not think it is necessary to pursue this analysis to include the dependants' right of action. If at this stage it is improbable, on a balance of probabilities, that the sailors themselves are unable to sue in tort or delict, reasoning of at least a similar nature must apply to the dependents, whether their right of action is the same as that of the sailors or whether it has some separate existence or source.
[34] Similar logic, it seems to me, must be applied in regard to the plaintiffs' right to claim punitive damages, given that theoretically the latter might derive their source, at least, from a right of action in tort or delict.
[35] On the other hand, in view of my conclusion that it is not probable that a trial on the contractual aspect will be determinative of the situation as a whole, it becomes obvious that the holding of two trials would further prejudice the plaintiffs, since there would necessarily be a certain duplication in the energy spent on the preparation of each of these trials and, moreover, the time lost while awaiting the scheduling of the second trial would be to the disadvantage primarily of the plaintiffs or their dependents.
[36] The fact that the defendants do not in this case have the benefit of security for their costs that is actually proportionate to the expenses they will probably have to incur is not, in my opinion, a factor that can significantly assist the defendants.
[37] Consequently, I do not think the defendants have in this case discharged their onus of proof in accordance with the principles laid down in the cases. For these reasons, this motion of the defendants will be dismissed, with costs to the plaintiffs in each of dockets T-387-98 and T-1344-98.
[38] In regard to the schedule to be adhered to in this case, the parties will have to proceed with settlement discussions under Rule 257 by October 26, 2001, and, failing a settlement of the case, the plaintiffs shall serve and file a requisition for a pre-trial conference under Rule 258 on or before November 26, 2001.
Richard Morneau
Prothonotary
MONTRÉAL, QUEBEC
September 26, 2001
Certified true translation
Suzanne M. Gauthier, LL.L., Trad. a.
FEDERAL COURT OF CANADA
TRIAL DIVISION
Date: 20010926
Docket: T-387-98
ACTION IN PERSONAM AGAINST ABTA SHIPPING COMPANY LIMITED AND TRADE FORTUNE INC. S.A.
Between:
REMARLO EVANGELISTA NAPA,
CHONA A. NAPA,
CYRUS J. FERRAREN,
CONCEPTION FERRAREN,
PETER JULIAN EYMARD SORIANO,
ALMA MOTILLA NOCES,
MILAGROS JAVINES SANORJO,
RITA SANORJO,
EDWINA VIRAY ORBE,
ANNA LIZA AGUDOS CALINGA-ON and
CONCHITA B. ORTEGA
Plaintiffs
and
ABTA SHIPPING COMPANY LIMITED and
TRADE FORTUNE INC. S.A.
Defendants
REASONS FOR ORDER
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET NO: T-387-98
STYLE: ACTION IN PERSONAM AGAINST ABTA SHIPPING COMPANY LIMITED AND TRADE FORTUNE INC. S.A.
Between:
REMARLO EVANGELISTA NAPA, CHONA A. NAPA, CYRUS J. FERRAREN, CONCEPTION FERRAREN, PETER JULIAN EYMARD SORIANO, ALMA MOTILLA NOCES, MILAGROS JAVINES SANORJO, RITA SANORJO, EDWINA VIRAY ORBE, ANNA LIZA AGUDOS CALINGA-ON and CONCHITA B. ORTEGA
Plaintiffs
and
ABTA SHIPPING COMPANY LIMITED and TRADE FORTUNE INC. S.A.
Defendants
PLACE OF HEARING: Montréal, Quebec
DATE OF HEARING: September 10, 2001
REASONS FOR ORDER OF MR. RICHARD MORNEAU, PROTHONOTARY
DATED: September 26, 2001
APPEARANCES:
Laurent Fortier FOR THE PLAINTIFFS
Danièle Dion FOR THE DEFENDANTS
SOLICITORS OF RECORD:
Stikeman, Elliott FOR THE PLAINTIFFS
Montréal, Quebec
Brisset Bishop FOR THE DEFENDANTS
Montréal, Quebec
Sproule & Pollack FOR THE PLAINTIFFS IN
Montréal, Quebec DOCKET T-1344-98