T-4271-74
Glen David Kramer and Lisa Josephine Kramer,
infants under the age of 18 years, by their next
friend, Helen Elizabeth Kramer, and the said
Helen Elizabeth Kramer (Plaintiffs)
v.
The Queen (Defendant)
and
Crewjet International Limited (Third Party)
Trial Division, Walsh J.—Ottawa, June 24 and
July 4, 1975.
Practice—Third party directions—Defendant's counsel dis
covering consent order not in form which he had intended
should be granted—Contending that revised draft order pre
judicial to defendant—Whether error can be rectified—No
fraud involved—In interests of orderly procedure, orders made
in four cases, set aside and new orders substituted—Federal
Court Rules, 2(3), 529, 1726, 1729, 1733.
Defendant's counsel wrote to third party's counsel enclosing
draft order for third party directions. He received a letter in
return enclosing an order for third party directions with consent
executed thereon, and did not notice that it had been consider
ably revised. The consent order was then approved by the
Court. Subsequently, defence counsel learned that this was not
the form of order which he had intended should be granted.
Defendant's counsel contends that the revised order is prejudi
cial to defendant.
Held, the error was bona fide. There is no suggestion of
fraud, nor is the variation sought as a result of a matter arising
subsequently. A broad interpretation of Rule 1733 is called for.
In the absence of agreement between counsel, *it is up to the
Court to decide the form of the order. While Rule 1729 governs
in the giving of third party directions, and the Court is given
wide discretion so that Form 55 must be considered merely as a
suggested form, it is almost universally used in this Court, and
it is desirable that it should be followed whenever possible
unless there is a very specific reason for departing from any of
its clauses. It is in the interests of orderly procedure to set aside
the orders and substitute new ones. However, discretionary
clauses 5 and 6 permitting the third party to plead in the main
action, and participate in discovery should not be omitted.
Suriano v. Suriano [1972] 1 O.R. 125, discussed.
MOTION.
COUNSEL:
B. Crane for plaintiffs.
P. Evraire for defendant.
E. W. Lane for third party.
SOLICITORS:
Gowling and Henderson, Ottawa, for
plaintiffs.
Deputy Attorney General of Canada for
defendant.
Patterson, Lane & McDougall, Toronto, for
third party.
The following are the reasons for judgment
rendered in English by
WALSH J.: Motions for an order setting aside an
order for third party directions made on January
28, 1975 by Mahoney J. and for new third party
directions were argued at the same time and on the
same facts as similar motions in the case of Han-
nelore Buechler, Morris Gogek, and Cyril Rosen-
thal, Executors of the Estate of Horst Maximil-
ian Buechler, Deceased; and Revel Builders (1972)
Limited v. Her Majesty the Queen and Crewjet
International Ltd. (Court No. T-3134-74), Bre-
thour Realty Services (1961) Limited v. Her
Majesty the Queen and Crewjet International Ltd.
(Court No. T-3133-74), and Brethour Realty Ser
vices (1961) Limited v. Patrick Maguire, Ubald
Christin, Gordon Marchello, Clause Caza and
Her Majesty the Queen and Crewjet International
Ltd. (Court No. T-3109-74).
The motion by defendant, Her Majesty the
Queen, to set aside the order for third party direc
tions is supported by an affidavit of her counsel
who states that on January 9, 1975 he wrote the
solicitor for Crewjet International Ltd., the third
party, enclosing draft order for third party direc
tions, prepared in accordance with Federal Court
Rules 2(3), 1726, and Form 54'. On January 23,
1975 he received a letter from the said solicitor for
the third party enclosing an order for third party
directions with his consent executed thereon which
he then forwarded to the Court and Mahoney J.,
when the said consent order was produced before
him to be dealt with in accordance with Rule 324,
approved same. It was only subsequently that
counsel for defendant learned that this was not the
1 Evidently the reference is intended to be to Rule 1729 and
Form 55.
form of order which he had intended should be
granted. When the form of draft order was
returned to him, approved on behalf of the third
party, he did not examine same to note that it was
changed considerably from the draft order which
he had sent for approval, nor did he note that the
covering letter referred to "the Consents and
revised Orders For Directions" [emphasis mine] .
He contends that the revised draft order approved
by Mahoney J. is highly prejudicial to defendant.
It is not seriously disputed this was a bona fide
error by counsel made in good faith, the only
question for the Court being whether this error can
be rectified and whether, in any event, the draft
order prepared by counsel for defendant should be
the order made rather than the order prepared by
counsel for the third party, Crewjet International
Ltd. and made by Mahoney J., or some other form
of order suitable to the circumstances of the action
and differing somewhat from both of these orders.
On the question of procedure, defendant invokes
Rule 1733 which reads as follows:
Rule 1733. A party entitled to maintain an action for the
reversal or variation of a judgment or order upon the ground of
matter arising subsequent to the making thereof or subsequent
ly discovered, or to impeach a judgment or order on the ground
of fraud, may make an application in the action or other
proceeding in which such judgment or order was delivered or
made for the relief claimed.
This is substantially similar to Rule 529 of the
Ontario Rules of Practice and reference is made to
the jurisprudence thereunder and in particular to
the case of Suriano v. Suriano 2 where Kelly J.A.
stated:
An application to the Court to impeach a judgment or order
of the Court on the grounds of fraud practised upon the Court
is properly made to the trial Court, not to the Court of Appeal.
It does not entail a review upon the record of the regularity of
the proceedings and the soundness of the law expounded by the
trial Court. It involves the decision by the Court of issues raised
by the allegation of fraud, an issue entirely distinct from the
issues passed upon by the trial Court in its decision. That new
and original issue is one to be decided by the trial Court. While
an appeal from the decision of the trial Court on that issue lies
2 [1972] 1 O.R. 125 at 130.
to this Court, the authority of the Court of Appeal to entertain
such an appeal must proceed from the decision on that issue
and not from the decision sought to be impeached.
If a judgment or order is obtained as a result of
fraud, therefore, it lies with the Trial Court to
decide whether it should be impeached rather than
with the Appeal Court. It is not suggested that
there was any fraud involved by counsel for either
party in connection with the order made by
Mahoney J. and strictly speaking it cannot be said
that the variation is sought as a result of a matter
arising subsequent to the making of the order, but
counsel for defendant contended that the same
principle should nevertheless be applied. I agree
that in the circumstances of this case a broad
interpretation should be given to Rule 1733. Cer
tainly, Mahoney J. could not correct the order by
the application of Rule 337(5) or (6) dealing with
reconsideration of judgments to deal with matters
that have been overlooked or accidentally omitted
as a result of clerical mistakes or accidental slips
or omissions, since there was no error on his part.
The whole purpose of Rules of Procedure is to
ensure that the action can eventually be brought to
trial on the merits in an orderly manner with the
issues involved being clearly brought before the
Court and it would be improper if either defend
ant, Her Majesty the Queen, or the third party,
Crewjet International Ltd. should suffer prejudice
as a result of an order having been made as a
result of an apparent consent of counsel to the
form of the order when, in fact, there was no
meeting of minds between counsel as to the form
which the order should take. In the absence of
agreement between counsel it is up to the Court to
decide the form of the order. Form 55 itself which
sets forth a suggested order for third party direc
tions contains optional paragraphs 5 and 6 dealing
with the right of the third party to file a defence to
the principal action and to participate in examina
tions for discovery between plaintiff and defend
ant. The draft order prepared by counsel for
defendant omitted these two clauses but otherwise
followed Form 55. On the other hand, the draft
order prepared by counsel for the third party and
signed by Mahoney J. under the impression that it
had been consented to differs very substantially
from this form as well as from the draft order
prepared by counsel for defendant. While it does
permit third party to file a statement of defence to
plaintiffs' statement of claim, it does not provide
that the third party shall be bound in the third
party issue by the final judgment in the action
between plaintiffs and defendant, it gives the third
party twenty days to file and serve a defence to
defendant's statement of claim instead of the ten
days suggested in Form 55, it provides that the
third party shall be at liberty to appear at the trial
and take part therein without adding the words "to
such extent as the trial judge may direct" as
appear in clause 7 of Form 55, it does not provide
that the third party issues shall be tried at or after
the trial of the action between plaintiffs and
defendant as the trial judge may direct as clause 4
of Form 55 suggests, and it departs from the
carefully worded clause 9 of Form 55 on the
question of the costs of the application. While it is
Rule 1729 which governs the Court in giving third
party directions, and the Court is allowed wide
discretion, so that Form 55 must merely be con
sidered as a suggested form of order, this Form has
been carefully thought out, is almost universally
used in this Court with or without the optional
clauses included, and it is desirable that it should
be followed whenever possible unless there is a
very specific reason for departing from one or
more of the clauses of same. Since the application
to Mahoney J. was made by virtue of Rule 324
and there were no written submissions or argu
ment, his attention was not specifically directed to
any of these issues. I am of the view, therefore,
that although the setting aside of the orders for
third party directions' made in the four cases by
him involves a very broad interpretation of Rule
1733, it is in the interests of orderly procedure that
they should be set aside and that new orders for
third party directions should be substituted
therefor.
I do not agree with counsel for defendant, how
ever, that the discretionary clauses 5 and 6 permit
ting the third party to plead to the principal action
and participate in examinations for discovery be
tween plaintiffs and defendant should be omitted
on the basis of his contention that the third party
can have no interest in the defence of the action
brought by plaintiffs against Her Majesty the
Queen. In particular, in the present action,
T-4271-74, there is already in the record a state
ment of defence of the third party to plaintiffs'
statement of claim resulting from the judgment of
Mahoney J. in which it is pleaded that the plain
tiffs in consideration of the sum of $100,000 exe
cuted 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 defend
ant 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 princi
pal action. 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, Crew-
jet 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.
I see no reason to depart from the ten day delay
allowed in Form 55 for pleading, and I consider it
of considerable importance that it shall be speci
fied that the third party shall be bound in the third
party issue by the final judgment in the action
between plaintiffs and defendant, that the trial
judge shall have unfettered discretion to determine
the extent to which the third party shall be at
liberty to appeal at trial and to take part therein
and that the costs of the application for third party
notice shall be determined as set out in clause 9 of
Form 55. The draft orders for third party direc
tions in the four cases submitted by counsel for
defendant will therefore be granted subject to
adding paragraphs 5 and 6 thereto worded in the
manner set out in paragraphs 5 and 6 of Form 55
and renumbering paragraphs 5, 6 and 7 as para
graphs 7, 8 and 9 to make the numbering corre
spond with the numbering of the said paragraphs
in Form 55 from which they have been taken.
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.