A-152-76
May & Baker (Canada) Ltd. (Plaintiff)
v.
The Motor Tanker Oak and her Owners, Skibs
A/S Hassel & A/S Spesialtank, (A/S Rederiet
Odfjell, Managers) (Defendants)
Court of Appeal, Jackett C.J., Pratte and Heald
JJ.—Ottawa, June 23, 1978.
Practice — Service — Orders made on ex parte application
to extend time for service of declaration Defendants without
opportunity to be heard until motion to set aside on grounds
that extensions granted without sufficient reason — Appeal
from judgment of Trial Division dismissing motion — Federal
Court Rule 306.
This appeal is by the corporate defendants from the judg
ment of the Trial Division dismissing the motion to set aside
service of the declaration "on the grounds that the extensions of
time for service ... were granted without sufficient reason".
The orders were made on ex parte application and the corpo
rate defendants were given no opportunity to be heard until the
motion to set aside the service—in essence a motion for an
order to set aside such orders in so far as necessary to make a
consequential order to set aside the service. No appeal from the
orders had been launched, thereby preventing the Court's
granting relief on that basis.
Held, the appeal is allowed. The material submitted in
support of the ex parte orders extending the time disclosed no
"sufficient" reason for extending the time of service. When an
order is made ex parte, in the absence of something to the
contrary, there is an inherent jurisdiction in the Court, after the
party adversely affected has been heard, if it then appears that
the ex parte order or judgment should not have been made, to
set aside the ex parte order and to make such ancillary order as
may be necessary to restore the party adversely affected to the
position he would have been in if the ex parte order or
judgment had not been made. The party aggrieved is entitled,
upon an application to set aside an ex parte order, to obtain
such relief. Appellant (the corporate defendants) should have
been granted such relief by the judgment that is the subject of
this appeal.
APPEAL.
COUNSEL:
Gerald P. Barry for plaintiff.
Victor DeMarco for defendants.
SOLICITORS:
McMaster, Meighen, Montreal, for plaintiff.
Brisset, Bishop, Davidson & Davis, Montreal,
for defendants.
The following are the reasons for judgment
delivered orally in English by
JACKETT C.J.: This is an appeal from a judg
ment of the Trial Division dismissing an applica
tion of the appellants (the corporate defendants) to
set aside service of the statement of claim.
The relevant facts may be summarized chrono
logically as follows:
October 27, 1971: A cargo consigned to the
respondent was, allegedly, delivered in bad order
in the Province of Quebec by the ship named in
the declaration.
October 24, 1972: A statement of claim was
issued out of the Trial Division for the respond
ent's claim.
October 22, 1973: An order of the Trial Divi
sion extended the time for service of the declara
tion until October 22, 1974.
February 1, 1974: The ship Oak was sold by the
corporate defendants named as owner.
September 30, 1974: An order of the Trial Divi
sion extended the time for service of the declara
tion until September 30, 1975, and ordered that
"service be made in accordance with the law of
Norway".
September 9, 1975: Service of the declaration
was made on the ship and corporate respondents
named in the style of cause in Norway.
October 6, 1975: On an application for leave to
file a conditional appearance, the Trial Division
granted the appellant a 30 day stay.
October 29, 1975: A conditional appearance
was entered by the appellant.
November 3, 1975: A motion to set aside the
service of the declaration "on the grounds that
the extensions of time for service ... were grant
ed without sufficient reason" was referred to the
judge of the Trial Division who granted the
second extension.
February 24, 1976: The aforesaid application
was dismissed.
This appeal is by the corporate defendants from
the judgment of the Trial Division of February 24,
1976, dismissing the motion to set aside service of
the declaration "on the grounds that the extensions
of time for service ... were granted without suffi
cient reason".
Two aspects of the matter may be mentioned to
put them aside, viz:
(a) the declaration was used to launch an action
in rem against the ship and an action in perso-
nam against the owners and manager but this
appeal relates only to the service of the declara
tion on the corporate defendants,' and
(b) I do not have to consider certain objections
of a more or less technical nature (the form of
the document served and the form of the order
for service ex iuris) relied on by the appellant
having regard to my conclusion on the point of
substance raised in the motion in the Trial
Division to set the service aside.
It is not irrelevant to note that, notwithstanding
a statutory requirement that an action of the kind
here involved be launched within 12 months of the
cause of action arising, if the judgment a quo is
correct, the defendant is faced with an action in
which the originating document was served almost
four years after the alleged cause of action arose.
Leaving aside the technical objections to which I
have referred, the service in question was duly
made as contemplated by Rule 306, which reads:
Rule 306. A statement of claim or declaration may be served
under Rule 304 within 12 months from the day when the
statement of claim or declaration was filed; but where, for any
sufficient reason, a statement of claim or declaration has not
been served within that time, the Court may, by order, made
either before or after the expiration of such time, extend the
time for service for a period not exceeding 12 months at any
one time, each of such extensions to be calculated from the date
of the order.
unless the orders extending time are subject to
attack and have been properly attacked.
I In my view, a declaration in an action in rem cannot be
served ex iuris. See The "Mesis" v. Louis Wolfe & Sons
(Vancouver) Limited [1977] 1 F.C. 429.
In my view, the material submitted in support of
the ex parte orders extending time disclosed no
"sufficient" reason for extending the time for
service. 2 An obvious "sufficient reason" would be
that the defendant was avoiding service. There are,
of course, other sufficient reasons. In my view,
however, when the defendant was available for
service and the plaintiff was not inhibited from
serving or induced by the defendant not to serve, it
is almost impossible to think of a "sufficient rea
son" for not serving within the time fixed for
serving. The material filed in support of the two
orders extending time does not reveal any facts
that, in my view, disclose "sufficient reason".
If, therefore, the appellant had chosen to appeal
(after obtaining appropriate extensions of time,
which, I should have thought, would have been
granted almost of course if sought in a timely
way), I should have been of the view that the
orders extending time should be set aside and that
a consequential order should be made setting aside
the service made pursuant thereto.' As, however,
there was no such appeal, on the proceedings as
they exist, this Court cannot grant relief on that
basis.
However, here the orders were made on ex parte
applications and the appellant was given no oppor
tunity to be heard with regard thereto until the
motion to set aside the service, which motion, in
my view, should be treated as a motion for an
order to set aside such orders in so far as necessary
to make a consequential order to set aside the
service. This appeal is from the dismissal of that
motion.
Generally speaking, when a court makes an
order or delivers a judgment, in the absence of
special provision, it is without authority to review
2 Compare Sumitomo Shoji Kaisha Ltd. v. First Steamship
Co. [1970] Ex.C.R. 754, and Grace Kennedy & Company
Limited v. Canada Jamaica Line (1968) (unreported), a copy
of which is set out in an ANNEX hereto.
3 Such a consequential order would follow just as an order to
repay would be granted to repay money collected under a
judgment if the judgment were set aside on appeal. See Wilby
v. Minister of Manpower and Immigration [1975] F.C. 636,
footnote 8 at page 642.
such order or judgment. Its correctness can only be
dealt with on appeal. When, however, an order is
made ex parte, in my view, in the absence of
something to the contrary, there is an inherent
jurisdiction in the Court, after the party adversely
affected has been given an opportunity to be
heard, if it then appears that the ex parte order or
judgment should not have been made,
(a) to set aside the ex parte order or judgment
as of the time when the order setting aside is
made, and
(b) to make such ancillary order as may be
necessary to restore the party adversely affected
to the position he would have been in if the ex
parte order or judgment had not been made. 4
It follows, in my view, that, in such a case, the
party aggrieved is entitled, upon an application to
set aside an ex parte order, to obtain such relief,
and that the appellant, as such an aggrieved party,
should have been granted such relief by the judg
ment that is the subject matter of this appeal.
I am, therefore, of opinion that the appeal
should be allowed with costs, that the judgment of
the Trial Division of February 24, 1976, should be
set aside, that the orders of the Trial Division
extending time, of October 22, 1973 and Septem-
ber 30, 1974, respectively, should be set aside and
that the service of the declaration on the appel
lants should be set aside.
* * *
PRATTE J. concurred.
* * *
HEALD J. concurred.
ANNEX
to the Reasons in
May & Baker (Canada) Ltd. v. The Motor Tanker
"OAK"
" By ex parte order or judgment I refer to one where the
party adversely affected was not given an opportunity to
respond. When the Court reviews the matter it will do so after
considering either
(a) further evidence offered by such party, or
(b) representations made by him,
or both.
IN THE EXCHEQUER COURT OF CANADA
—IN ADMIRALTY—
No. 410
Messrs. Grace Kennedy & Company Limited
(Plaintiff)
v.
Canada Jamaica Line, Canada West Indies Ship
ping Company Limited A/S Dovrefjell and A/S
Rudolf (Defendants)
and
No. 422
Philipp Brothers (Canada) Limited and Eduardo
K. L. Earle S.A. (Plaintiffs)
v.
Hamburg-Amerika Linie and Balfour Guthrie
(Canada) Limited (Defendants)
The following are the reasons for judgment
rendered in English by
JACKETT P.: Applications have been made by
mail in both these cases for extension of the time
for service of the writ of summons for a period of
one year.
In Grace Kennedy & Company Limited v.
Canada Jamaica Line the writ was issued on
December 30, 1966, and the endorsement shows
that the subject matter of the action is shortage
and damage in respect of a cargo on a vessel that
arrived at Kingston, Jamaica on December 30,
1965.
In Philipp Brothers (Canada) Limited the writ
was issued on January 23, 1967, and the endorse
ment shows that the action relates to loss and
damage in respect of a cargo on a vessel that
arrived at Bilbao, Spain on December 7, 1965.
In each case the writ carries a notation reading
in part, "This Writ may be served within twelve
months from the date thereof exclusive of the day
of such date, but not afterwards".
The motion in each case indicates that the
application is made under Rule 17 of the Admiral
ty Rules, which reads in part as follows:
17. (1) A writ of summons, whether in rem or in personam
may be served within 12 months from the date thereof.
(2) Where for any sufficient reason a writ has not been
served on a defendant within the time limited for service, the
Court may by order, made either before or after the expiration
of such time, extend the time for service for a period not
exceeding 12 months at any one time, each of such extensions
to be calculated from the date of the order.
In the Grace Kennedy & Company Limited
action, the motion reads as follows:
WHEREAS suit has been instituted by Plaintiff against
Defendants in this Honourable Court under number 410 by a
Writ of Summons in personam issued on the 30th day of
December 1966.
WHEREAS Plaintiff's claim is presently under negotiation
with Defendants Canada Jamaica Line and Canada West
Indies Shipping Company Limited with a prospect of settle
ment of the claim being concluded.
WHEREAS in view of the negotiations presently being carried
on as aforesaid, the service of the Writ of Summons upon
Defendants A/S DOVREFJELL and A/S RUDOLF has been
withheld.
WHÉREAS it is justified and in the interest of all parties that
the date for service of the Writ of Summons herein be extended
for an additional period of one year up to and including the
30th day of December 1968, in order that the parties may
arrive at a settlement without the necessity of entering into
litigation.
WHEREAS Plaintiff will suffer a prejudice if this motion is
not granted.
THAT Plaintiff prays for judgment herein extending the
validity and the date for service of the Writ of Summons herein
up to and including the 30th day of January 1968, or any other
date that this Honourable Court see fit to fix, the whole with
costs to follow suit.
It is supported by the affidavit sworn by Bruce
Cleven, reading as follows:
I, Bruce Cleven, Advocate of the City of Town of Mount
Royal, District of Montreal and therein residing and domiciled
at 223 Lazard Avenue, being duly sworn do depose and say:-
1. THAT I am one of the attorneys for the Plaintiffs herein.
2. THAT the facts contained in the foregoing Motion are true.
In the Philipp Brothers (Canada) Limited
action the motion is worded exactly the same as in
the Grace Kennedy & Company Limited motion
except for differences in detail, and is supported by
an affidavit also taken by Bruce Cleven sworn on
the same date and in precisely the same words as
in the Grace Kennedy & Company Limited case.
In effect, what the motion says, in each case, is
that, because negotiations are being carried on
with one or some of the defendants, service of the
writ on the other defendant or defendants has been
withheld and that the plaintiffs will suffer a preju
dice if an extension of the period of time for
service is not granted.
The submission set out in the motion is that it is
"justified" and "in the interest of all the parties"
that the date for service of the writ of summons be
extended for an additional year "in order that the
parties may arrive at a settlement without the
necessity of entering into litigation".
The question that I have to decide is whether
these motions reveal "any sufficient reason" for
the writs not having been served on the defendants
on whom they have not been served within the
time limited for service within the meaning of
those words in Rule 17(2) of the Admiralty Rules
of this Court.
I have had occasion previously to refuse to grant
a motion made on substantially the same grounds.
Where the policy reflected by the law is that a
lawsuit in respect of a cause of action be launched
within a limited period from the time the cause of
action arises and that the defendant or defendants
in such a lawsuit be served with the initiating
document within a limited period from the launch
ing of the proceedings, it does not appear to me to
be a "sufficient reason" for not serving a particu
lar defendant within the specified period to show
that the plaintiff is carrying on settlement discus
sions with some other defendant. Each defendant,
as it seems to me, is entitled to the benefit of the
law. If such a reason were accepted as a "sufficient
reason", it would operate to frustrate the obvious
purpose of statutes limiting the periods for com
mencing actions.
In these cases, it is noted that the applications
for extension of the periods for service are being
made after the periods for service have expired.
Since the time when I had occasion to deal with
this matter on the occasion to which I have
referred, the same question has arisen in the Court
of Appeal in England in Osborne v. Distillers
Company Ltd., and has been dealt with by the
Court of Appeal in a judgment that is reported in
the London Times newspaper law reports of
November 18, 1967. The report of that case reads
in part as follows:
That made it plain that an action about thalidomide had been
started by someone else in 1962; so the writ should have been
issued, served, and then negotiated to stand over pending the
outcome of the earlier action.
The solicitor did issue the writ on May 28, 1965, within the
three years against the three defendants. From what the Court
had heard the effective defendant was Distillers Co. (Biochemi-
cals) Ltd. It was hardly suggested that the doctor was to blame.
It claimed damages for negligence, breach of duty and the
like, but gave no date when the wrong was done. And it was not
served.
The rules allowed 12 months in which to serve a writ on
defendants. But when the Statute of Limitations had run or was
running, the practice was not to extend it beyond the 12 months
unless there was good reason, as, for example, if the defendant
was avoiding service.
In the present case the solicitor did not serve the writ within
12 months. Instead, he applied ex parte to the District Regis
trar for it to be renewed, making an affidavit in which he said:
"There is a test action pending ... in connexion with a similar
claim, and in order to obviate unnecessary costs, the plaintiffs
have instructed me to take no further steps until the court has
... decided the test action."
He could not have read Battersby v. Anglo-American Oil Co.
Ltd. ([1945] 1 K.B. 23, at p. 32) which said that "ordinarily it
is not a good reason (for renewing a writ) that the plaintiff
desires to hold up the proceedings while some other case is tried
or to await some future development".
Judge right
Nor in the affidavit did the solicitor say anything about the
time when the cause of action arose or about the limitation
period having expired. The Registrar renewed it for 12 months
and it was served on May 2, 1967.
That was the first that the Distillers Company heard of the
claim. They entered a conditional appearance and applied to
have the renewal set aside because no good reason had been
shown. Master Jacob did not set it aside, but Mr. Justice
Chapman did on appeal.
That meant that the action failed. His Lordship was satisfied
that the judge was right. The company should have had notice
of the claim from the beginning; and when the solicitor got the
legal aid certificate, he should not only have issued but served
the writ, stated the time when the baby was born, and in
applying for renewal should have drawn attention to the dates
and how the Act would run.
If the Registrar had been put on notice he would probably
have refused the extension. When a plaintiff let time run it was
prejudicial to defendants to have the writ renewed so that an
action could be brought against them when they had, so to
speak, closed their books. The Court had been told that some
70 writs had been issued against the companies and negotia
tions were on foot for their settlement and that the defendants
or their insurers wanted to know the extent of the claims
because that might be an important element in negotiations for
a settlement. They were entitled to know where they stood. It
would be prejudicial to them to let the writ be renewed unless
good reason was shown; and no good reason was shown here.
The case came within the general principle that a writ was
not to be renewed so as to deprive the defendant of the benefit
of the statute save for good reason.
I have no information before me as to whether
there is a statute of limitations that has any
application in this case.
The decision of the Court of Appeal in Osborne
v. Distillers Company Limited confirms the view
that I had already formed, that it is not ordinarily
a good reason to extend the time of service of a
writ when the "plaintiff desires to hold up the
proceedings while some other case is tried or to
await some future development".
Unless, within ten days from the date of these
reasons, an application is made by the plaintiffs
for an opportunity to make submissions to the
contrary, the application will be dismissed with
costs.
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.