CANPOTEX SHIPPING SERVICES LIMITED, NORR SYSTEMS PTE. LTD., OLDENDORFF CARRIERS GMBH & CO. K.G. v. STAR NAVIGATION CORPORATION S.A., 2019 FC 89

Date: 20190122 Docket: T-109-15 Citation: 2019 FC 89 Ottawa, Ontario, January 22, 2019 PRESENT: The Honourable Mr. Justice Russell BETWEEN: CANPOTEX SHIPPING SERVICES LIMITED, NORR SYSTEMS PTE. LTD., OLDENDORFF CARRIERS GMBH & CO. K.G. AND STAR NAVIGATION CORPORATION S.A. Plaintiffs and MARINE PETROBULK LTD., O.W. SUPPLY & TRADING A/S, O.W. BUNKERS (UK) LIMITED, ING BANK N.V., IAN DAVID GREEN, ANTHONY VICTOR LOMAS AND PAUL DAVID COPLEY IN THEIR CAPACITIES AS RECEIVERS OF CERTAIN ASSETS OF THE DEFENDANTS O.W. SUPPLY & TRADING A/S AND O.W.

BUNKERS (UK) LIMITED AND OTHERS Defendants ORDER AS TO COSTS AND REASONS [ 1 ] The Plaintiffs and the Defendant, Marine Petrobulk Ltd [MP] have both brought motions to recover costs in these proceedings in accordance with my Judgment and Reasons of September 28, 2018: 5. The Defendants, ING Bank N.V., Ian David Green, Anthony Victor Lomas and Paul David Copley in their Capacities as Receivers of Certain Assets of the Defendants O.W. Supply & Trading A/S, and O.W. Bunkers (U.K.) Limited, and others shall pay the costs of the Plaintiffs and the Defendant, Marine Petrobulk Ltd, for these proceedings.

If the parties cannot agree on the scope and quantum of costs then the Court will deal with costs by separate order following written submissions by the parties and, if necessary, further oral arguments; [ 2 ] Their motions seek to recover costs for all proceedings in the Federal Court dealing with this matter, but not costs for proceedings before the Federal Court of Appeal [FCA] that dealt with my Judgment and Reasons of September 23, 2015 [First Decision]. I.

Scope of Cost Award [ 3 ] The Defendants other than MP [ING] have taken the position that I cannot deal with costs related to my First Decision because this matter has already been dealt with by the FCA in its decision of March 10, 2017 ( ING Bank NV v Canpotex Shipping Services Limited , 2017 FCA 47 ): 4. In ING Bank N. V. v. Canpotex Shipping Services Limited , 2017 FCA 47 , the Court of Appeal allowed ING’s appeal and awarded ING “costs herein and below” (para. 132). Costs for all steps leading to the First Trial and the appeal are res judicata and cannot be altered by this Court.

Accordingly, ING is entitled to costs from Canpotex and MP for these phases of the proceeding. [ 4 ] As regards the proceedings before the FCA, there would appear to be no dispute as to the following: (

a) ING sought the following alternative relief: 1. An order setting aside the September 23, 2015 order of the chambers judge, substituting judgment in favour of ING, and an order that the Funds held in trust be paid out to ING, together with the costs of this appeal and proceedings in the court below. 2. In the alternative, an order directing that this case be returned to the Trial Division for reconsideration or a new

summary trial in accordance with of the correct legal principles as determined on appeal. (

b) The parties had agreed to leave costs consequences in abeyance until the appeal decision was delivered; (

c) The FCA was not aware that the Plaintiffs and MP had made Offers to Settle; (

d) No arguments were made before the FCA in respect of the costs at trial. [ 5 ] Given these facts, it is clear enough why the FCA awarded ING " “costs herein” " but not why it awarded ING costs " “below” " in granting the " “reconsideration” " relief requested by ING in the alternative. [ 6 ] The alternative orders sought by ING before the FCA only asked for costs of the appeal and below if the first option was granted.

But it was the alternative order directing " “reconsideration” " that was granted. [ 7 ] As there were no arguments before the FCA, only the FCA could tell us why it chose to award ING the " “reconsideration” " option as well as costs of the appeal and in the court below. It may have been a simple mistake, but we just don’t know.

[8] In any event, it would seem that ING, notwithstanding the agreement between counsel that cost issues would be left until after theFCA decision was delivered, now wishes to avoid that commitment by relying upon the words "“and below”" knowing full well that itdid not ask for costs if the "“reconsideration”" option was granted, and that costs were never argued before the FCA so that the FCA wasentirely unaware of the agreement between the parties as well as the Offers to Settle. [9] On the record before me, I cannot believe that the FCA intended by the words "“and below”" to forestall and exclude the fulldiscussion and decision on cost issues for "“below”" that has now come before me and that was obviously anticipated by the partiesthemselves. [10] I think, then, that I must reject ING’s arguments for res judicata and issue estoppel because, notwithstanding the "“below”"wording, I am not convinced the FCA rendered a final decision on this issue given that there were no submissions on point before theFCA and there is no indication in the FCA’s reasons that it considered costs implications for "“below.”" Had it truly turned its mind tocosts, the FCA would obviously have allowed counsel to make submissions and would have discovered the Offers to Settle and any othermatters that are now being placed before me.

And even if the "“below”" words could be considered a final decision, this does not end thematter. Issue estoppel is an equitable doctrine and it would be a grave injustice to allow ING to rely upon it in these circumstances whereit entered into an agreement with other parties on how and when costs should be handled and did not even ask for costs if the"“reconsideration”" option was granted by the FCA.

As the British Columbia Court of Appeal pointed out some time ago in BritishColumbia (Minister of Forests) v Bugbusters Pest Management Inc, (BC CA), [1998] BCJ No 1043: 32 It must always be remembered that although the three requirements for issue estoppel must be satisfied before it canapply, the fact that they may be satisfied does not automatically give rise to its application. Issue estoppel is an equitabledoctrine, and as can be seen from the cases, is closely related to abuse of process. The doctrine of issue estoppel is designedas an implement of justice, and a protection against injustice.

It inevitably calls upon the exercise of a judicial discretion toachieve fairness according to the circumstances of each case. [11] My conclusion is that I am not prevented from considering and deciding the cost issues of these proceedings except for that part ofthe proceeding dealing with the appeal of my First Decision before the FCA. If I am wrong on this issue, then I am sure that the FCAwill correct me because ING has also appealed my decision of September 28, 2018 [Second Decision]. II.

The Offers to Settle [12] ING does not argue that the Offers to Settle do not comply with Rule 420 of the Federal Courts Rules, SOR/98-106 [Rules] exceptto the following extent: 3. Canpotex and MP made offers to settle on April 15, 2015 (the “Offers”). The Offers were made before the first hearing ofthe parties’

summary trial motions in July 2015 (the “First Trial”). … 5. Canpotex and MP did not reassert or renew the Offers either during the appeal or during the subsequent rehearing of thesummary trial motions (the “Second Trial”). 6. Offers made before the decision at first instance do not affect appellate costs, unless the offer is reasserted while theappeal is pending: CIBC World Markets Inc. v. Canada, 2012 FCA 3 at para. 6; WIC TVAmalco Inc. v. ITV TechnologiesInc., 2005 FCA 253; Century Services Inc. v. ZI Corp., 1998 ABCA 403. 7.

Similarly, if an offer is made prior to trial and a new trial is ordered on appeal, double costs are not available unless theoffer is renewed before the second trial: Eagle Resources Ltd. v. MacDonald, 2006 ABCA 49. 8. Here, the Offers were not renewed or reasserted. The Offers could not have affected costs at the appellate level.Similarly, the Offers should not affect costs for the Second Trial. [13] It is important to keep in mind that the FCA granted ING the "“reconsideration”" option that ING requested as alternative relief onappeal of my First Decision.

And this did not mean reconsideration of the whole of the First Decision. It was not a new

summary trial.As I made clear in my Second Decision, the re-hearing took place "“in accordance with the directions and reasons of the FCA”" and thisdid not involve a new

summary trial. As I said at para 31 of my Second Decision "“My duty in this proceeding is to reconsider the matterin light of the FCA’s reasons.”" And I also made it clear that the FCA had only asked me to reconsider one basic issue that was set out inpara 131 of the FCA decision: [131] Because the Judge made no finding in respect of the OW Group’s General Terms and Conditions, and in particularwith regard to clause L.4 thereof, the appeal before us was argued exclusively on the basis of clause L.4 of

Schedule 3. Theparties did not make any arguments as to the meaning of clause L.4 of the General Terms and Conditions, except for a briefsubmission by Petrobulk that it had insisted that Canpotex be bound by its Standard Terms and Conditions. Consequently, itis my view that it would not be wise for us to make the determination which should be made by the Judge.

Should the matterreturn to us in a further appeal, we would also, it goes without saying, benefit from the Judge’s view on the meaning ofclause L.4 of the OW Group’s General Terms and Conditions and its effect on the relationship between OW UK, Canpotexand Petrobulk. [14] This being the case, I don’t think ING can rely upon Eagle Resources Ltd v MacDonald, 2006 ABCA 49 in the presentcircumstances. There was no new or second trial and the Offers to Settle were fully compliant with Rule 420 and were never withdrawnand continued to be applicable to the reconsideration proceedings.

The Plaintiffs are entitled to be paid double costs from April 15, 2015onwards and MP from April 28, 2015 onwards.

[ 15 ] I agree with ING that the Offers to Settle do not affect the costs awarded for the appeal. [ 16 ] In the event that Rule 420 may not apply literally to MP, who is a co-Defendant in this matter, MP shall receive the same double costs in accordance with Rule 400(3)(e). See Dimplex North America Ltd v CFM Corp , 2006 FCA 1403 . III.

Appropriate Column of Costs [ 17 ] As the FCA recently re-affirmed in Nova Chemicals Corp v Dow Chemical Co , 2017 FCA 25 , an increased costs award cannot be justified solely on the basis that a successful party’s actual fees are significantly higher than the Tariff amounts, and the burden is on the party seeking increased costs to demonstrate why their particular circumstances warrant an increased award. [ 18 ] It is also well accepted that the Court’s discretion to award amounts in excess of the Tariff is the exception and should not be exercised lightly.

See Canadian Generic Pharmaceutical Assn v Canada (Minister of Health) , 2011 FC 1345 . [ 19 ] It is difficult to distil any coherent principle from the jurisprudence as to when Column V of the Tariff B is more appropriate than Column III, but I think it is basically a function of the general discretion granted by Rule 400 to consider factors that should be taken into account under the Rules . [ 20 ] The Plaintiffs and MP emphasize that the proceedings required the parties to consider complex issues and jurisprudence from a number of jurisdictions that required detailed legal arguments to deal with matters that were more difficult than the usual case. [ 21 ] But, as ING points out, these proceedings did not require a lengthy trial, numerous lay witnesses, or complex evidence, which are the usual justification for increased costs. [ 22 ] In the Second Decision, the Court was only dealing with an

interpretation issue and reconsideration of its First Decision in light of its

interpretation. And even in the First Decision, the issues were, for the most, an application of basic contract principles to a set of facts, that were not overly complex, in a one-day,

summary hearing. [ 23 ] In my view, then, I think I have to agree with ING that an increase in costs to Column V is not justified. ORDER IN T-109-15 THIS COURT ORDERS that 1 . The Plaintiffs shall have their costs for both phases of these proceedings and both my First and Second Decisions to be paid by the Defendants (other than Marine Petrobulk Ltd (MP), and the OW companies) to be calculated and assessed in accordance with the mid-point of Column III of Tariff B; 2 .

MP shall have its costs of both phases of these proceedings and both my First and Second Decisions to be paid by the Defendants (other than MP and the OW companies) and calculated and assessed in accordance with the mid-point of Column III of Tariff B. 3 . The Plaintiffs shall also, in accordance with Rule 420 , have double costs against the Defendants (other than MP and the OW companies), calculated from April 15, 2015; 4 . MP shall also, in accordance with Rule 420 , have double costs against the Defendants (other than MP and the OW companies), calculated from April 28, 2015; and 5 .

The Plaintiffs and MP shall also have their costs for this motion fixed at $1,000.00 CN each, payable forthwith by the Defendants other than MP and the OW companies. “James Russell” Judge FEDERAL COURT SOLICITORS OF RECORD DOCKET: T-109-15 STYLE OF CAUSE: CANPOTEX SHIPPING SERVICES LIMITED v MARINE PETROBULK LTD ET AL

PLACE OF HEARING: Vancouver, British Columbia DATE OF HEARING: January 17, 2019 ORDER AND REASONS: RUSSELL J. DATED: January 22, 2019 APPEARANCES : David F. McEwen For The Plaintiffs H. Peter Swanson For The Defendants, MARINE PETROBULK LTD. Patrick Williams For The Defendants, ING BANK N.V., IAN DAVID GREEN, ANTHONY VICTOR LOMAS AND PAUL DAVID COPLEY IN THEIR CAPACITIES AS RECEIVERS OF CERTAIN ASSETS OF THE DEFENDANTS O.W. SUPPLY & TRADING A/S, AND O.W.

BUNKERS (UK) LIMITED AND OTHERS SOLICITORS OF RECORD : Alexander Holburn Beaudin + Lang LLP Barristers & Solicitors Vancouver, British Columbia For The Plaintiffs Bernard LLP Barristers & Solicitors Vancouver, British Columbia For The Defendants, MARINE PETROBULK LTD. McCarthy Tetrault LLP Vancouver, British Columbia For The Defendants, ING BANK N.V., IAN DAVID GREEN, ANTHONY VICTOR LOMAS AND PAUL DAVID COPLEY IN THEIR CAPACITIES AS RECEIVERS OF CERTAIN ASSETS OF THE DEFENDANTS O.W. SUPPLY & TRADING A/S, AND O.W. BUNKERS (UK) LIMITED AND OTHERS