Digests

Royal and Sun Alliance Insurance Co. of Canada v. Renegade III (The)

T-1396-01

2001 FCT 1050, Hargrave P.

25/9/01

15 pp.

By present motion, defendant vessel owners seek stay, or partial stay, of this Federal Court proceeding, on basis they have B.C. Supreme Court in personam action in which they seek payment of balance of their vessel damage claim, some $12,000--Matter arising out of in rem and in personam claim by plaintiff underwriter for return of some $100,000 in Renegade III insurance proceeds with respect to damage suffered by ship during 2000 Victoria-Maui race which underwriter had paid out, policy subsequently being voided by underwriter because of alleged non-disclosure or misrepresentation by defendant vessel owners--As security for claim, plaintiff underwriter has Renegade III under arrest, in this action, but no security has been provided--Renegade III racing yacht of 19.2 metres, built in 1993 in Tallinn, Estonia--Insured value $880,000--B.C. Supreme Court action marginally ahead of Federal Court action--Stay denied--Test for stay set out in Compulife Software Inc. v. Compuoffice Software Inc. (1997), 97 C.P.R. (3d) 451 (T.D.): court will exercise discretion, granting stay "only in clearest of cases"--In order to establish proceeding falling within "clearest of cases test", party with onus must show that to allow action to continue would cause prejudice or injustice, not merely inconvenience or additional expense to defendant, and that stay itself would not be unjust to plaintiff--On analysis of Amchem Products Inc. v. British Columbia (Workers' Compensation Board), [1993] 1 S.C.R. 897 (Sopinka J.) and Avenue Properties Ltd. v. First City Dev. Corp. (1986), 7 B.C.L.R. (2d) 45 (C.A.) (McLachlin J.A. (as she then was)), defendant must clearly establish more appropriate forum in order to displace forum selected by plaintiff--Corollary of this: even if party applying for stay successful in clearly establishing existence of more appropriate forum, plaintiff, nonetheless, may be able to prevent stay by showing deprivation of legitimate personal or juridical advantage which would be available in court chosen by plaintiff--In Avenue Properties, McLachlin J.A. summed this up as balancing of interests between any advantage to plaintiff on one hand, and any disadvantage to defendant on other hand--While defendant vessel owners have established prima facie case B.C. Supreme Court convenient place for action to proceed, have not established clearly more appropriate place to do so--Were underwriters forced to proceed in B.C. Supreme Court proceeding, by reason of stay here, they would have to commence in rem proceeding in B.C. Supreme Court, arresting vessel, for second time, in B.C. Supreme Court, in order to give that court jurisdiction over ship, resulting in multiplicity of proceedings--Discussion as to whether B.C. Supreme Court'sin rem jurisdiction might possibly be flawed and subject to constitutional challenge--To stay present action would most certainly result in multiplicity of proceedings with at least two B.C. Supreme Court actions and consolidation, together with re-arrest of vessel--That two parallel actions, one in each court, might result in any substantial additional time or expense in proceeding to resolution, certainly not foregone conclusion--Danger of inconsistent outcomes minimal, for once decision rendered in one court, whole matter likely becoming res judicata--Vessel owners mentioning might decide to add their insurance broker as party and referred to Intermunicipal Realty & Development Corp. v. Gore Mutual Insurance Co., [1978] 2 F.C. 691 (T.D.) for proposition Court without jurisdiction over marine insurance broker in agency and misrepresentation--First, nothing to suggest might be claim against vessel owners' broker; second, while marine insurance might, strictly speaking, form part of property and civil rights jurisdiction of province, it has nevertheless been assigned to Parliament and is part of navigation and shipping: Zavarovalna Skupnost Triglav (Insurance Community Triglav Ltd.) v. Terrasses Jewellers Inc., [1983] 1 S.C.R. 283--In result, not clear case for stay--While may be inconvenience and perhaps minimal extra cost, no real prejudice or injustice to vessel owners in denying stay--Conversely, taking all circumstances in consideration, choice of underwriter, as plaintiff, to litigate in Federal Court, reasonable one--Stay would deprive underwriter of legitimate juridical advantage, that of being able to have complete matter disposed of, including as to realizations through sale of arrested ship, in one court, being Federal Court--Vessel owners may elect to bring in personam claim, for balance of their insurance claim, in this Federal Court action--No apparent hardship, in suggesting vessel owners ought to come into Federal Court, for luxury yacht of high value, with amount at stake fraction of vessel's value.