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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.
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