Date: 19980216
Docket: T-2416-97
BETWEEN:
THE GOVERNOR AND COMPANY
OF THE BANK OF SCOTLAND,
Plaintiff,
- and -
THE OWNERS AND ALL OTHERS INTERESTED
IN THE SHIP "NEL" and
OCEAN PROFILE MARITIME LIMITED,
Defendants.
REASONS FOR ORDER
DUBÉ J:
[1] The appeal launched by Alfa Bunkering Co. Ltd. ("Alfa") is for an order reversing the order or decision of the Prothonotary dated January 30, 1998, whereby the request of Alfa for a one week postponement of the hearing of the plaintiff's motion was denied.
[2] By its notice of motion dated January 14, 1998, the plaintiff ("the Bank") notified the other creditors of its intention to move the Court for an order for payment out of the sale proceeds of the vessel "NEL" in excess of the amount required as security for all the other claims already filed. The hearing had been adjourned twice and on Tuesday, January 27, 1998, plaintiff's counsel faxed a letter to the other creditors to confirm that the hearing of the Bank's motion was scheduled for Friday, January 30, 1998.
[3] However, the telefax sent the previous evening by plaintiff's counsel was only brought to the attention of Alfa's counsel on the day of the hearing. Consequently, Alfa's counsel on January 30, 1998, faxed a letter to the Federal Court of Canada requesting either to participate by way of a telephone conference call or, in the alternative, that the application be adjourned for a week. The Prothonotary denied the request and proceeded with the hearing. His order reads as follows:
| 1. There has been ample notice of the substance of the motion to pay out proceeds: there is no apparent prejudice to the applicants. The application for an adjournment is denied; and |
| 2. While the Court is amenable to dealing with motions by telephone conference, or in part by telephone conference with one or more counsel present and encourages such procedure in appropriate circumstances, the Court in Vancouver does not have its own facilities, or the facilities of others, available on short notice, by which to deal with a motion by telephone when many other counsel are present in the courtroom: the application to allow counsel for the applicants to take part by telephone is denied. |
[4] On February 5, 1998, after the instant notice of appeal by Alfa was filed but, before it was heard, the Prothonotary released his order and reasons for order.
[5] The relevant paragraphs of the reasons read as follows:
| [1] On 3 December 1997 the bulk and container carrier Nel was sold, through a court approved sale at $5,000,000.00 (US). The sale was organized by the mortgagee of the Nel, the Plaintiff, The Governor and Company of the Bank of Scotland (the "Bank of Scotland"), which paid various costs including those incidental to the sale and the claim of the crew for wages. Appropriate advertising took place, flushing out 15 lien claimants (the "Lien Claimants") with claims totalling $1,718,325.60 (US), not including the claim of the Plaintiff, $12,047,788.08 (US). |
| . . . |
| [4] This motion was initially set for 19 January, 1998, but was twice adjourned, finally to be heard 30 January, 1998. The adjournments were to facilitate discussions between counsel for the Bank of Scotland and counsel for the lien claimant, Shell Canada Limited ("Shell"). In the result the claim of Shell, against the Nel, was reduced by some $1,350,000.00 (US). |
| [5] Counsel for the Alfa Bunkering Co. Ltd. and for HBI International Ltd., who were apparently served with the motion material in a timely manner, did not until shortly before the hearing of the motion receive the revised Schedule of Lien Claimants, showing the very substantial reduction of the Shell claim. Those two counsel, whose clients claimed some $500,000.99(US), apparently did not on 30 January have full instructions from their clients. They therefore sought, through counsel acting as an agent at the opening of the 30 January, 1997 hearing, an adjournment. Alternately, Alfa Bunkering Co. Ltd. sought an Order that the matter be heard by telephone conference. These requests were by way of an oral motion, unsupported by any material. |
| [6] I denied the motion for an adjournment. Leaving aside the last minute nature of the request for an adjournment, to allow the motion to proceed would not result in any prejudice to either Alfa Bunkering Co. Ltd. or to HBI International Ltd. |
| [7] While it would have been in keeping with the Federal Court trend to encourage the use of telephone conference as an economic means of participating in the hearing of motions, the Court here in Vancouver does not have equipment or the facilities necessary to provide a telephone conference connection to a hearing at which a substantial number of counsel, a number large enough to require the use of a large court room, are also present. Our facilities, for hearing a motion by telephone, consist of a speaker phone and a small conference room. These facilities are inappropriate when a large number of counsel are present and wish to make submissions. Thus I denied the oral motion of counsel for Alfa Bunkering Ltd. to participate by telephone. |
| . . . |
| [11] The Lien Claimants, some of whom claim maritime liens and others who claim as necessaries suppliers have, as I have noted, claims totalling $1,718,325.60 (US) together with interest. In the case of Alfa Bunkering Co. Ltd., with a claim of $168,174.53 (US), interest is said to run at 24%. Empire International, who are stevedores, with a claim of $5,846.56 (US) seek interest at 18%, as does Tymac Launch Services Ltd., which claims $522.44 (US). Other claimants appear to be content with interest at the rate the court might ordinarily award. |
| . . . |
| [27] Of the $5,000,000.00 (US) sale price and accrued interest the amount to be retained in trust and at interest, to secure the Lien Claimants, shall be the rounded figure of $2,220,000.00 (US). The Bank of Scotland may withdraw the balance of the sale proceeds and interest to date on filing their unsecured undertaking, in suitable terms, with the Court, to return to the Court any required portion of the amount withdrawn should it be necessary in order to meet the entitlements and priorities determined in due course by the Court. |
[6] Undoubtedly, all lien claimants are now protected, including Alfa. Even if counsel for Alfa had been present in court in Vancouver, he could not have secured a better deal. But, at the time he filed his notice of appeal against the Prothonotary's decision not to grant an adjournment or a telephone conference, he felt frustrated. Now that he has been made aware of the Prothonotary's reasons for order, he merely seeks a stay of that order until he has had the opportunity to consult with his client in Greece to find out whether or not they want him to appeal the Prothonotary's order. Why his client would want to appeal such a favourable decision is not readily understandable.
[7] Appeals from a Prothonotary's decision are governed by Rule 336(5) of the Federal Court Rules ("the Rules"). The standard on appeal of his decisions is well established by the Federal Court of Appeal in Canada v. Aqua-Gem Investments Ltd.1. Briefly, discretionary orders of prothonotaries ought not to be disturbed on appeal unless they are clearly wrong, in the sense that the exercise of the discretion was based upon a wrong principle, or misapprehension of the facts, or they raise questions vital to the final issue of the case.
[8] In the case at bar, it cannot be said that the Prothonotary exercised his discretion in such a way that his discretion ought to be disturbed. The reasons for his order are clearly outlined and are reasonable. Moreover, it obviously does not raise questions vital to the final issue of the case: the final issue was settled favourably for all the lien claimants, including Alfa. All lien claimants are fully protected.
[9] It is obvious that the Prothonotary would not have proceeded with the hearing in the absence of Alfa had there been a possibility that its interests were not to be protected. All parties to these proceedings were perfectly aware of the claim filed by Alfa. The purpose of the hearing was merely to determine the amount that the plaintiff could draw, after sufficient money to cover the other outstanding claims was secured in trust. Moreover, the second prong of the Prothonotary's order is to order the plaintiff to file an unsecured undertaking to return to the Court any amount withdrawn which would be necessary to meet entitlements and priorities determined in due course by the Court.
[10] Finally, as to telephone conferences, as mentioned by the Prothonotary, the Federal Court of Canada tries to proceed as often as possible by way of telephone conference when suitable and practical. However, there is no absolute right in a party to be heard by telephone conference. Experience has shown that it is very difficult to conduct a telephone conference with several lawyers present in court and another one wanting to be heard by phone. The solution in such a case is for the outsider to be represented in court by a local agent.
[11] Consequently, the appeal is denied but, under the circumstances, without costs to any party.
Judge
OTTAWA, Ontario
February 16, 1998
__________________1 [1993] 2 F.C. 425, [1993] 1 C.T.C. 186, 93 D.T.C. 5080, 149 N.R. 273 (C.A.).