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.
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.