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A. G. Kelloway, J. J. Wakeham, K. R. Janes, P. W. Flynn, J. Hynes, J. Follett, B. Fushell, C. Dominaux, Sr., P. J. Flynn, R. P. Coady, E. R. Parsons, I. Ward, H. Russell, I. Matthews, M. Evans, T. G. Carroll, T. Mulrooney, E. Scott, C. T. Bruce, M. Hillard, A. Clarke, W. G. Loder, F. O. Mills, and L. Banfield (Plaintiffs)
v.
Engineering Consultants Limited, Kent Lines Limited, J. D. Irving Limited, and Universal Sales Limited (Defendants)
Trial Division, Walsh J.—St. John's, Newfound- land, June 21; Ottawa, July 6, 1972.
Maritime law—Action for salvage—Not brought within two year prescription period—Extension of time granted— Canada Shipping Act, R.S.C. 1970, c. S-9, s. 536(1).
Because of pressure of other work, plaintiffs' solicitor failed to commence an action for salvage services by plain tiffs within the two years allowed by section 536(1) of the Canada Shipping Act.
Held, plaintiffs' application under section 536(2) for an extension of time to commence proceedings should be granted. Plaintiffs appeared to have a valid prima facie claim and defendants appeared to have suffered no preju dice from the delay and did not contest the application.
Chemainus Towing Co. v. The Capetan Yiannis [1966] Ex.C.R. 717, referred to.
MOTION.
R. Wells for plaintiffs.
WALSH J.—By motion heard in St. John's, Newfoundland, plaintiffs ask that leave be granted pursuant to section 536(2) of the Canada Shipping Act for plaintiffs to issue a writ claiming for salvage services rendered to defendants by plaintiffs on February 12, 1970. The affidavit of plaintiffs' solicitor supporting the motion indicates that he was consulted in January 1971 by a Mr. Joseph Hynes of Pla- centia, Newfoundland, a representative of the master and crew of the Canadian National Rail ways motor vessel Petite Forte with respect to a possible salvage claim on their behalf against the owners of the motor vessel Aimé Gaudreau, which vessel had been on fire and which they had towed on the high seas from 11.20 hours
until 17.30 hours on February 12, 1970, where by the vessel was towed to a point of safety some two miles from the port of Argentia, New- foundland. The owners of the Petite Forte did not propose to make a claim for salvage. By virtue of section 531 of the Canada Shipping Act, where salvage services are rendered by a ship belonging to Her Majesty, or by the com mander or crew thereof, no claim shall be allowed or adjudicated upon, unless the consent of the Governor in Council to the prosecution of the claim is proved, and accordingly he made application on January 11, 1971 to the Clerk of the Privy Council on behalf of the master and crew for such consent but it was not until July 15, 1971 that he received from the Department of Transport in Ottawa copies of an Order in Council dated June 1, 1971, granting the neces sary consent. As it was out of term by this time he put the file aside with the intention of issuing a writ in the fall term of the Court and proceed ing with the action, but during the autumn of 1971 and the winter of 1972 he was engaged in matters of a public nature and as there was no correspondence from his clients with respect to the claim during this period he overlooked the commencement of proceedings until April 1972 when he prepared to issue a writ only to find that it was prescribed by the two year limitation set forth in section 536(1) of the Canada Ship ping Act, which reads as follows:
536. (1) No action is maintainable in respect of any sal vage services, unless proceedings therein are commenced within two years from the date when the salvage services were rendered.
He alleges that no prejudice has accrued to the defendants, which companies are owners of the motor vessel Aimé Gaudreau by reason of the delay in proceeding with the action and asks the Court to exercise the power granted under section 536(2) of the Canada Shipping Act to extend the time for the issue of a writ.
Section 536(2) reads as follows:
536. (2) The court having jurisdiction to deal with an action to which this section relates may, in accordance with the rules of court, extend any such period to such extent and on such conditions as it thinks fit, and shall, if satisfied that there has not during such period been any reasonable opportunity of arresting the defendant vessel within the jurisdiction of the court, or within the territorial waters of the country to which the plaintiff's ship belongs or in which the plaintiff resides or has his principal place of business, extend any such period to an extent sufficient to give such reasonable opportunity.
In argument before me it was conceded that the latter part of section 536(2) has no applica tion in the present case as the defendant vessel was within the territorial waters of Canada during the period when the proceedings might have been served and, in any event, the pro ceedings are not being brought as an action in rem but merely as an action in personam against the owners of the vessel. He contended, how ever, that section 536(2) really breaks down into two parts, the latter part being mandatory since it is preceded by the word "shall" so that if there has been no reasonable opportunity of arresting the defendant vessel within the juris diction of the court or within the territorial waters of the country to which plaintiff's ship belonged, the court would be obliged to extend the period for service, but that the first part of section 536(2) gives the widest possible discre tion to the court permitting it to extend the two year period within which section 536(1) requires the proceedings to be commenced "to such extent and on such conditions as it thinks fit" in accordance with the rules of court. The jurisprudence referred to appears to support this interpretation.
The case of Chemainus Towing Co. v. The Capetan Yiannis [1966] Ex.C.R. 717, although it dealt with the latter part of section 536(2) (then section 655(2)) and refused to grant the extension because the vessel had been within the jurisdiction of the court before the expira tion of the limitation period even though plain tiffs were not aware of this, discussed at some length the British jurisprudence dealing with a substantially similar section of the Maritime Conventions Act, 1911. At page 721 Sheppard D.J. refers to the judgment of Hill J. in The Espanoleto [1920] P. 223 where he said at page 226:
In general, leave will not be granted if, but for the enlargement of time, the plaintiff's claim would be barred by a statute of limitations. That is to say, it will not be granted to revive a barred cause of action: see Doyle v. Kaufman ((1877) 3 Q.B.D. 7, 340); and with reference to that case Smallpage v. Tonge ((1886) 17 Q.B.D. 644, 648) and especially Hewett v. Barr ([1891] 1 Q.B. 98). In general the Court must not by renewal deprive a defendant of an existing right to the benefit of a statute of limitations. But s. 8 of the Maritime Conventions Act is a limitation section of a very peculiar kind, for it contains a proviso unknown to any other statute of limitations; in one event—namely, if there has not been any reasonable opportunity of arresting the defendant vessel within the period—it directs the extension of the limited period of two years, and further gives the Court power to extend it on any other sufficient grounds.
In my judgment, when an application to extend the time for the renewal of a writ in an action which comes within s. 8 is made, the matter is not to be disposed of merely by saying that the two years have elapsed and the claim is statute barred and no renewal can be granted. The applica tion to renew must be considered on its merits, and the Court must inquire whether the circumstances are such that the Court would give leave to issue a writ, notwithstanding that the time had expired.
While in the present case the writ had never been issued so we are not dealing with an application to extend the time for service of the writ but rather for leave to issue it, the same principles would seem to apply.
The judgment of Sheppard D.J. also refers to the case of The Arraiz (1924) 132 L.T. 715 in which Pollock M.R. said at page 716:
All that is quite true: but to the section there is a proviso. It is in two parts; and the first says that the court may extend the period to such an extent and on such conditions as it thinks fit. Now it seems to me that those words give the widest possible discretion to the court.
The second part of the proviso says that the court shall if satisfied in a particular way extend the period to an extent sufficient to give a reasonable opportunity to arrest the ship.
Sheppard D.J. also refers to two judgments dealing with the conditions which might justify the Court extending the period, stating at page 722:
It is clear, therefore, that Sec. 655(2) is divided into two parts. The first is prefaced by the words, "to such extent and on such conditions as it thinks fit", and that is deemed
to require special circumstances described in The Kashmir ([1923] P. 85), by Hill J. at p. 90 as follows:
The only reason alleged in the present case for interfer ing is that the plaintiff, though she knew of the loss of her son, did not know that the loss gave her any cause of action. It seems to me that that is a wholly insufficient ground for depriving the defendants of a right which they had otherwise acquired, especially after so long an interval.
and in The James Westoll ([1923] P. 94), by Lord Parker of Waddington at p. 95 as follows:
It appears to me that what the Court has to do is to consider the special circumstances of the case and see whether there is any real reason why the statutory limitation should not take effect. I have carefully read the affidavit which has been filed and really it only amounts to this, that it was not until a comparatively recent date namely, April, 1913, that the amount of the claim could be ascertained. I think that is not a sufficient reason.
Those do not here apply.
I would also refer to the judgment of Jackett P., as he then was, in the case of Sumitomo Shoji Kaisha Ltd. v. First Steamship Co. [1970] Ex.C.R. 754 in which he was dealing not with an exceptional provision such as section 536(2) of the Canada Shipping Act permitting the com mencement of proceedings notwithstanding the fact that the defendants had already acquired the benefit of the limitation set out in section 536(1), but merely with an application for per mission to extend the delay for service of a writ ex juris when the year delay within which it should have been served was about to expire. In that case the solicitors of plaintiffs had been dealing with lawyers for an insurer protecting only the parties for whom an appearance had been filed and he stated at pages 760-62:
No action has been taken by the plaintiffs to communicate to the foreign defendants that they are being held liable for the damages complained of. There is no evidence that there was any reason, much less any sufficient reason, for not taking steps to serve these defendants immediately after the writ of summons was issued.... The rules of court contem plate, and the justice of the matter requires, that, when an action is commenced, the appropriate papers be com municated to the defendants. The law is designed to put some limit on the length of time that can be allowed to elapse before facing a person with a lawsuit.
In the present case, while it is true that nearly a year elapsed between the date of the salvage and the date when plaintiffs' attorney was first instructed and that a further six months then elapsed before he obtained the Order in Council authorizing the proceedings, and that this was
during the summer recess, nevertheless he still had from July 1971 until February 12, 1972 to issue a writ and serve same on defendants in Saint John, New Brunswick, and he concedes that his failure to do so was an error on his part.
If I were to adopt as strict an interpretation of the requirements of the first part of section 536(2) as the British courts have in refusing to extend the period in The Kashmir and The James Westoll cases (supra), I would be obliged to dismiss this motion, as mere oversight by an attorney can hardly be considered as "sufficient reason" for not bringing the proceedings within the proper delay, but these cases while persua sive are not binding on me, and it should be noted that neither section 8 of the Maritime Conventions Act, 1911, on which these judg ments were based, nor section 536(2) of the Canada Shipping Act, which is identical with that section, use the words "sufficient reason" but merely use the words "on such conditions as it thinks fit" thereby leaving the discretion of the Court unfettered in each individual case. Moreover, the judgment of Jackett C.J. in the Sumitomo Shoji Kaisha case (supra) was deal ing with section 17(2) of the Admiralty Rules in effect at the time, permitting the extension of the delay for serving a writ of summons when "for any sufficient reason a writ has not been served on a defendant within the time limited for service", and hence an inquiry into the sufficiency of the reason was necessary, so that judgment can be distinguished from the present case.
While I cannot, therefore, find that there was "sufficient reason" in the present case for not commencing proceedings within two years from the date when the salvage services were ren dered, I am not required to so find, and I think it fit to extend the delay for the following reasons:
1. Plaintiffs would appear to have a valid prima facie claim against defendants for the salvage services rendered (although I am, of
course, not so deciding in the absence of any evidence at this stage of the proceedings).
2. Defendants must have at all times been aware that such a claim could be made and would appear to have suffered no prejudice by the delay, while on the contrary if they were released from liability for such a claim as a result of an oversight on the part of plaintiffs' attorney, this would constitute a serious prejudice to plaintiffs.
3. Defendants have not contested the present motion, although duly served, and while their failure to do so is not equivalent to a consent to same, it indicates a willingness to leave the matter to the discretion of the Court, rather than an insistence on availing themselves of the limitation period in section 536(1) of the Act.
The motion is therefore granted, but without costs in any event of the cause, and the delay to issue the claim shall be extended for thirty days from the date of this judgment.
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