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T-3806-81
Islensk Kaupskip HF (Icelandic Cargo Ships Lim ited), a body corporate (Plaintiff)
v.
The Motor Vessel Charm (Defendant)
and
The Owners and all others interested in the Motor Vessel Irving Beech, New Brunswick Publishing Company Limited, Moncton Publishing Company Limited, and Atlantic Towing Ltd. (Third Parties)
Trial Division, Mahoney J.—Ottawa, April 16, 1982.
Practice — Third party application for leave under Rule 1717 to file and serve a cross-demand on the plaintiff — Plaintiffs ship was towed by applicant's ship after a collision between plaintiffs ship and defendant ship — Defendant seeks contribution from the applicant in third party proceedings — Applicant wishes to assert a right to indemnity from plaintiff under their towing contract — Whether the appropriate proce dure is for the applicant to seek leave to make a cross-demand under Rule 1717 or to issue a third party notice under Rule 1731(3) — Leave granted to file a notice under Rules 1731 and 1726 — Federal Court Rules 1717, 1726, 1731.
Till v. Town of Oakville (1913) 5 O.W.N. 601, agreed with.
APPLICATION. COUNSEL:
Gerald B. Lawson for third party Atlantic Towing Ltd.
SOLICITORS:
Stewart, MacKeen & Covert, Halifax, for plaintiff.
McInnes, Cooper & Robertson, Halifax, for defendant.
Lawson & Lawson, Saint John, for third parties.
The following are the reasons for order ren dered in English by
MAHONEY J.: Atlantic Towing Ltd., hereinafter "the applicant", one of the third parties, seeks leave under Rule 1717 to file and serve a cross- demand on the plaintiff. It has already filed and served its defence to the statement of claim issued against it by the defendant pursuant to the order for third party directions made herein December 21, 1981. The situation may most easily be explained in terms of facts alleged on the record or in the applicant's affidavit.
The plaintiff's ship collided with the defendant ship. The plaintiff's ship was taken under tow by the applicant's ship under an arrangement between the plaintiff and applicant. The defendant says that the plaintiff's ship was damaged while under tow as well as in the collision and seeks, in the third party proceedings, contribution from the applicant. The applicant wishes to assert a right to indemnity from the plaintiff under their contract.
Third party proceedings in this Court are, sub stituting only the term "third party notice" for "third party summons", accurately defined as to nature and purpose by the following:'
The third party summons is practically the institution of a new action by the defendant against the third party. For conve nience this summons is issued in the old action, and culminates in a trial either at the same time as the trial of the plaintiff's claim, or at some other time, as may be directed; but the fundamental object is to have the issues in relation to the plaintiff's claim determined in a way that will be binding upon the third party, as well as the defendant.
I take the word "practically" to have been used in the sense of "for all practical purposes" rather than "almost". I should say that the order for third party directions herein is entirely in harmony with that definition.
With that in mind, I turn to the Rules. Rule 1717 provides for a counterclaim or cross-demand.
' Till v. Town of Oakville (1913) 5 O.W.N. 601 at p. 602.
Rule 1717. (1) A defendant in any action who claims that he is entitled to any relief or remedy against a plaintiff in the action in respect of any matter, whenever and however arising, may, instead of bringing a separate action, make a counterclaim or cross-demand in respect of that matter.
(2) A counterclaim or cross-demand shall be included in the same document as the defence.
Rule 1731 provides for the joinder of fourth and subsequent parties and incorporates by reference Rule 1726, the material portions of which follow:
Rule 1731. (1) Where a defendant has served a third party notice and the third party makes such a claim as is mentioned in Rule 1726 or Rule 1730, Rules 1726 to 1729 shall, with necessary modifications, apply as if the third party were a defendant; and similarly where any further person to whom by virtue of this Rule Rules 1726 to 1729 apply as if he were a third party, makes such a claim.
(3) A third party notice may not be issued under this Rule without leave of the Court.
Rule 1726. (1) Where a defendant claims to be entitled to contribution or indemnity from, or to relief over against, any person not a party to the action (hereinafter called the "third party"), he may file a third party notice ....
It is the limitation of Rule 1726(1) to a claim against "any person not a party to the action" that has led the applicant to seek leave to make a cross-demand under Rule 1717 rather than leave to issue a third party notice under Rule 1731(3).
The cross-demand under Rule 1717 would be appropriate if the applicant were seeking to claim relief against the defendant but it is not; it is asserting a right to indemnity from the plaintiff contingent on it being found liable to the defend ant in the third party proceedings. Adopting the terminology of Till v. Town of Oakville, the plain tiff is a party to the old action but not a party to the new action, while the applicant is a party to the new action but not the old one. The appropri ate procedure, in the circumstances, is for the applicant to serve a notice on the plaintiff under Rule 1731.
ORDER
Leave is given to the applicant, Atlantic Towing Ltd., to file and serve a notice on the plaintiff under Rules 1731 and 1726. To avoid unnecessary confusion, the notice shall be entitled a fourth party notice.
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