T-3325-75
Golden Eagle Canada Ltd. and New Brunswick
Electric Power Commission (Plaintiffs)
v.
The Queen (Defendant)
and
The Foundation Company of Canada Limited and
Joseph Fearon (Third Parties)
Trial Division, Walsh J.—Ottawa, December 16
and 17, 1976.
Practice—Motion for directions with respect to third party
issues pursuant to Rule 1729—Third party contractor seeking
insertion of discretionary paragraphs 5 and 6 of Form 55—
Pilot seeking limitation of liability in any event under Pilotage
Act—Whether third parties have interest in principal action—
Limitation of liability a matter for trial judge—Pilotage Act,
S.C. 1970-71-72, c. 52, s. 30—Canada Shipping Act, R.S.C.
1970, c. S-9, s. 650—Federal Court Rule 1729.
Third party seeks the insertion of paragraphs 5 and 6 of
Form 55 to be included in the order for third party directions as
is customary. Defendant and plaintiffs object to this on the
grounds that it will lengthen the proceedings and possibly
complicate the trial of the action and that there is no special
defence available to the third party which is not also available
to the defendant.
Held, an order will issue giving third party directions as set
out in Form 55 including paragraphs 5 and 6 and a further
paragraph will be included directing that the style of cause be
changed so as to include the names of the third parties. The
discretionary paragraphs are to be used not only when the third
party has a defence that the defendant cannot plead but should
also be used when the third parties have an interest in par
ticipating in the principal action. The limitation of liability
sought by the pilot involves a defence that can be raised in his
pleadings and should therefore be dealt with by the trial judge.
Kramer v. The Queen and Crewjet International Limited
[1976] 1 F.C. 242, discussed.
MOTION for directions re third party
proceedings.
COUNSEL:
The plaintiffs did not appear and were not
represented.
Robert Hynes and David Sgayias for
defendant.
David L. Beard, Q.C., for The Foundation
Company of Canada Limited (third party).
Guy P. Major for Joseph Fearon (third
party).
SOLICITORS:
Ogilvy, Cope, Porteous & Associates, Mont-
real, for plaintiffs.
Deputy Attorney General of Canada for
defendant.
Du Vernet, Carruthers, Toronto, for The
Foundation Company of Canada Limited
(third party).
Guy P. Major, Montreal, for Joseph Fearon
(third party).
The following are the reasons for judgment
rendered in English by
WALSH J.: Defendant moves for an order pursu
ant to Rule 1729 of this Court for directions with
respect to the third party issues herein. Counsel for
third party defendant, The Foundation Company
of Canada Limited, sought to have included in the
order paragraphs 5 and 6 of Form 55 being the
normal form of an order for third party directions,
the insertion of which two paragraphs are within
the discretion of the Court. This was opposed by
counsel for defendant who also submitted a letter
from counsel for plaintiff who was not present
indicating that he also supported the exclusion of
these two clauses. Counsel for third party defend
ant, Joseph Fearon, desired to have a clause insert
ed limiting the liability of his client in the third
party proceedings to $1,000 in any event pursuant
to section 30 of the Pilotage Act'.
The two paragraphs in question deal respective
ly with the right of third parties to serve a defence
to plaintiff's statement of claim and to participate
in examinations for discovery between plaintiff
and defendant. Defendant's only objection to their
inclusion was that this lengthens the examinations
for discovery and the pleadings and possibly com
plicates the trial of the action. However, these
paragraphs are normally included. Reference was
made to a judgment in the case of Kramer v. The
S.C. 1970-71-72, c. 52.
Queen and Crewjet International Limited 2 in
which the inclusion of these paragraphs was dealt
with and authorized in which it was stated at
pages 246-7:
In particular, in the present action, T-4271-74, there is already
in the record a statement of defence of the third party to
plaintiff's statement of claim resulting from the judgment of
Mahoney J. in which it is pleaded that the plaintiffs in con
sideration of the sum of $100,000 executed a release under seal
dated June 17, 1974 in favour of Crewjet International Ltd.
and others, which release operates as satisfaction pro tanto of
any right in the plaintiffs to recover damages from the said
third party, and affects its responsibility to contribute to or
indemnify the defendant to the extent of that consideration.
Counsel for third party states that it has no assurance that
defendant would or could plead this payment in its defence to
the principal action and in order to bring this to the attention of
the Court it is necessary that it be allowed to plead to the
principal action.
He contended that in the present case the situation
is different in that there is no special defence
which the third party defendants can plead to the
principal action which is not also available to the
defendant itself. However, I do not find that this
case is authority for only including these para
graphs when the third party defendant has such a
defence which it can plead and defendant itself
cannot, for later in the same paragraph it is stated:
While this same situation does not apply to the other three
actions bearing numbers T-3133-74, T-3109-74, and T-3134-
74, it is likely that all actions will be brought to trial simultane
ously and be heard at least in part on common evidence, so it
appears that the third party, Crewjet International Ltd. should
be given full latitude to plead not only as a third party
defendant to the third party action brought against it by Her
Majesty the Queen, but also to the actions brought by the
various plaintiffs against Her Majesty the Queen, and that it
will not be seriously prejudicial to defendant to have some
measure of assistance from the third party who will also be
seeking in its pleadings to have the principal actions dismissed
and to elicit in examinations for discovery evidence which
might assist in this.
The pleadings in the present case disclose briefly
that the action is for damages caused to the cargo
of a vessel which struck an underwater and
uncharted obstruction while allegedly navigating
in the centre of the navigational channel, for the
maintenance of which servants of defendant are
responsible. It is suggested that the uncharted
obstruction was a large boulder present on the
2 [1976] 1 F.C. 242.
slope of the bank of the navigational channel
resulting from dynamiting work which had been
done at the nearby construction site of the Govern
mental Wharf at Dalhousie. Defendant raises all
the normal grounds of defence including denial of
liability and makes a counterclaim invoking limita
tion of liability by the virtue of section 650 of the
Canada Shipping Act 3 . The third party notice
claims indemnity against third party The Founda
tion Company of Canada Limited which had car
ried out the contract for the construction of the
wharf at Dalhousie, one of the conditions of which
was to hold defendant harmless against claims
resulting therefrom, and against third party Joseph
Fearon, the pilot who allegedly had care and con
trol of the ship at the time.
It is not difficult to conclude that the third
parties have an interest in participating in the
contestation of the principal action which will
establish the nature of the obstruction struck by
the vessel and determine who was responsible for
this accident taking place. I therefore believe that
in this case, even at the risk of lengthening the
proceedings, paragraphs 5 and 6 of the standard
form should be included.
With respect to the suggestion by counsel for
the pilot, Joseph Fearon, that the order should
specifically limit his liability in the third party
proceedings to the sum of $1,000 and that the
Court has authority to do this since Rule 1729(2)
specifies that in the directions the Court may
determine "the mode and extent in or to which the
third party shall be bound or made liable by the
judgment in the action", I believe that this defence
is one which can be raised by third party Joseph
Fearon in his pleadings to the third party proceed
ings and that the validity of it should not be
adjudicated upon at this stage by limiting the third
party proceedings against him to this amount, but
that this should be left for determination by the
trial judge.
An order will issue therefore giving third party
directions as set out in the standard Form 55
including the discretionary paragraphs 5 and 6
3 R.S.C. 1970, c. S-9.
thereof. A further paragraph will be included in
the order so as to direct that the style of cause be
changed so as to include the names of The Foun
dation Company of Canada Limited and Joseph
Fearon as third parties.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.