T-2934-76
International Marine Banking Co. Limited
(Plaintiff)
v.
M/T Dora and Abyreuth Shipping Company Lim
ited (Defendants)
Trial Division, Collier J.—Montreal, March 7;
Ottawa, March 11, 1977.
Maritime law — Motion to review taxation of Marshal's
account — Whether Federal Court Rules provide for Mar
shal's fees — Whether Marshal employed by Public Service
entitled to take and retain fees — Federal Court Act, ss.
46(1)(j) and 55(5) — Federal Court Rules 1003(9),(10) and
1007(7),(8).
MOTION.
COUNSEL:
Guy Vaillancourt for plaintiff.
Marc Nadon for defendants.
SOLICITORS:
Langlois, Drouin, Roy, Fréchette & Gau-
dreau, Quebec, for plaintiff.
Martineau, Walker, Allison, Beaulieu, Mac-
Kell & Clermont, Montreal, for defendants.
The following are the reasons for judgment
rendered in English by
COLLIER J.: This is a motion by the plaintiff to
review the taxation of the Marshal's account. It is
brought pursuant to Rule 1007(8), which reads:
(8) A taxing officer shall tax the marshal's account, and
shall report the amount at which he considers it should be
allowed; and any party who is interested in the proceeds may be
heard on the taxation. Application may be made to the Court
on motion to review the taxing officer's taxation.
The review sought is in respect of one item only
in the Marshal's account, a sum of $99,750,
claimed by the Marshal as "poundage fees". At
the conclusion of argument I reduced the fee
payable to the Marshal from the amount sought to
$15,000. I now set out my reasons.
It is necessary to recount a background of facts.
The Dora is a motor tanker of some 95,000
dead-weight tons. On July 26, 1976, she was
arrested at the Port of Quebec on a warrant
obtained on behalf of her master and crew. On the
next day the plaintiff, a mortgagee, commenced
action, obtained a warrant, and executed it for the
vessel's arrest. The Dora has since been sold. As it
turns out, the mortgagee's claim exceeds the
amount realized on the sale. The mortgagee and
her solicitors, since July 27, 1976, have taken all
the initiative in having the vessel sold.
Rule 1003(9) provides that service of a warrant
for arrest
... does not vest possession in, or impose responsibility for the
care and maintenance of the property arrested on, the marshal
or other officer by whom the seizure was effected, but such
possession and responsibility shall continue in the persons in
possession of the property immediately before the arrcst.
In this case I do not know who, de jure or de
facto, had possession immediately before the
Dora's arrest. Certainly, from a practical point of
view, the plaintiff was in control of her destiny
after July 27, 1976, until the appointment of a
marshal.
An abortive attempt was made by the plaintiff
to have the Court appoint agents (in effect,
retroactively) to ensure the care and maintenance
of the vessel. The plaintiff had already itself taken
those steps and incurred the expense. Thurlow
A.C.J., on August 19, 1976, rejected that
application.'
On August 24, 1976, the Associate Chief Justice
handed down decision on another motion by the
plaintiff. 2 That was for an order authorizing the
sale of the Dora, by private contract, to a particu
lar buyer for $5,900,000. That application was
rejected.
The plaintiff then launched a further applica
tion. This time the order sought was that the
Marshal take possession of the Dora and that she
be appraised, advertised and sold in the usual way.
Certain other directions were also requested. A
difficulty arose as to who, in the District of
Quebec (where the vessel was), could act as mar
shal. There was no sheriff. The plaintiff had sug-
1 [1977] 1 F.C. 282.
2 [1977] 1 F.C. 603.
gested a firm of bailiffs be named as marshal. The
Court felt that would not be proper. To solve the
difficulty, the Court made a special order, for this
particular case, pursuant to subsection 55(5) of the
Federal Court Act. (See reasons Of Thurlow
A.C.J. dated September 7, 1976.)
The person appointed was L. J. Daoust. Mr.
Daoust happened to be District Administrator of
the Federal Court at Montreal. His appointment
was effective September 8. He was given wide
powers and responsibilities. He was authorized to
employ a named ship's agent in respect of the
maintenance of the vessel and the payment and
repatriation of her crew; a named insurance broker
to effect necessary insurance coverage pending the
sale; a named shipbroker as his agent for the sale
of the vessel. The commission to the latter was
fixed in the order at 1%.
Mr. Daoust did not take possession nor assume
his duties until September 20, 1976. The plaintiff
had been required to file an undertaking and a
surety bond in respect of payment of any costs or
fees incurred by the Marshal. The form and
amount of that bond was not finally approved until
September 20.
To complete the history I record that the vessel
was sold for $6,650,000. The Marshal turned over
possession to the purchaser effective October 29,
1976. The shipbrokers' commission was $66,500.
They incurred expenses of $3,907.51. The ship's
agents' fees were $100 per day.
In calculating his fees, the Marshal used section
8 of Tariff A of the Rules. It is found under a
heading "Sheriff". If section 8 is applicable and
binding, then the amount of $99,500 was, in fact,
"receivable" by him. I set out the section:
8. In a province where the law does not provide for fees for
realization on execution, or "poundage", a sheriff may also
take and receive the following: poundage on executions and on
writs in the nature of executions on the sum made; up to and
including $1,000, five per cent; excess over $1,000 and up to
and including $4,000, two and one-half per cent; and on excess
over $4,000, one and one-half per cent (exclusive of mileage for
going to seize and sell and of all reasonable and necessary
actual disbursements incurred in the care and removal of
property).
In Re the `Xanadu": West Line Inc. v. The
`Xanadu" (T-3709-73, August 9, 1974, unreport-
ed), I had to consider whether sections 7-9 applied
to fees chargeable by marshals. There the person
acting as marshal was the sheriff of the County of
Vancouver. He had never been appointed as sheriff
or marshal of the Federal Court pursuant to sub
section 13(1) of the Federal Court Act. Under
subsection 13(2) he was, however, ex officio a
sheriff of the Court. Subsection 13(4) provides
that every sheriff (not necessarily ex officio sher
iffs) is ex officio a marshall of the Court. I stated
at that time I was unclear whether the sheriff in
the Xanadu then became an ex officio marshal. (I
am still unclear.) The parties in that case, how
ever, proceeded on the basis he was at all times
acting as a marshal. He had, as Mr. Daoust here,
calculated his fees pursuant to Tariff A. He had,
however, used the British Columbia percentages,
as permitted by section 7.
I held sections 7-9 did not apply to fees charge
able by marshals:
I have concluded that Tariff A, sections 7 to 9, applies only to
sheriffs and those acting as sheriffs in the particular circum
stances, and does not apply to marshals or those acting as
marshals in the particular circumstances (page 6).
I concluded that the Federal Court Rules (in
contrast to the former Admiralty Rules in the
Exchequer Court) were silent on the method of
calculating marshals' fees. But I held that mar
shals were nevertheless entitled to fees: At page 8,
I said:
I have concluded the only provisions applicable in this case
are to be found in paragraphs 7 and 8 of Rule 1007. The
marshal's account there referred to, as I see it, includes his own
account for fees. No assistance is given as to how his fees
should be calculated.
I should have then added that subsection 55(5)
of the Federal Court Act and Rule 1003(10)
contemplate marshals, or those acting as marshals,
charging and being paid fees. Paragraph 46(1)(f)
of the Federal Court Act provides for the making
of rules for fixing of fees for marshals or sheriffs,
and for regulating their obligation to account for
fees or their right to retain them for their own use.
Mr. Vaillancourt, for the plaintiff, relied on the
Xanadu decision to the extent that it holds section
8 of Tariff A inapplicable to marshals. In this case
he argued, the Court (because of the unusual
circumstances), by a special order pursuant to
subsection 55(5), directed "... the process ... to
such other person ... and any such person is
entitled to take and retain for his own use such
fees as may be provided by the Rules or such
special order"; Mr. Daoust is an officer of the
Court appointed under the Public Service
Employment Act; the Rules of Court do not,
according to Xanadu, provide for marshals' fees;
the special order of the Court did not provide for
the fees Mr. Daoust could take and retain for his
own use; as a civil servant Mr. Daoust could not
retain any fees for his own use; therefore, in this
particular case, no fee at all is chargeable or
receivable.
I do not accept those contentions. In my opinion,
and assuming the Xanadu decision to be correct,
the fact that the Rules do not at the moment set
out the fees that marshals may receive and take,
does not mean that no fees are payable. Nor does
it mean that the fees payable must be set out in a
special order. The fee fixing powers under para
graph 46(1) (f) and subsection 55 (5) are permis
sive only. The failure to specify fees in either
situation does not, in my view, disentitle a marshal
or person acting as a marshal. The statute and the
rules, I say, contemplate the charging and paying
of fees for marshal services (paragraph 46(1)(f),
subsection 55(5); Rule 1003(10); Rule 1007(7),
( 8 )).
Nor do I consider that the provisions permitting
the Court, by rule or special order, to regulate
what fees may be retained by marshals for their
own use, or must be accounted for to departments
or employers, affect the matter. Those provisions
do not deal with the right of a marshal to charge
litigants for services. They merely regulate, after
the charge and payment, where the fees go.
I am satisfied, therefore, the Marshal in this
case is entitled to fees. The remaining problem is
the amount.
At my direction the Marshal filed an affidavit
setting out briefly what he did in respect of this
arrest and sale, and the time he, or those of his
staff, spent. I also gave leave to the plaintiff to file
affidavit material setting out what it, its solicitors,
the ship's agents and brokers did. All that material
came before me.
Mr. Daoust, before taking possession, attended
two meetings with representatives of the plaintiff
and others. That took about six hours. He spent
two full days, September 20 and 21, on the matter,
including a trip to Quebec City. In respect of
opening of tenders and attending to the sale, trans
fer of title, he spent 2' days. On sundry other
matters, he spent a total of 24 hours. According to
my calculations, he spent roughly 9' days in time.
Undoubtedly the plaintiff, its representatives,
and its solicitors spent a great deal of time in
respect of this matter from the first arrest to the
sale. Obviously, a lot of the work, done prior to the
Marshal's taking possession, redounded to the
Marshal's benefit. Unquestionably, the Marshal
had also the benefit of the plaintiff's assistance
and work after the possession date.
I have kept in mind also that the Marshal did
not have an active part, as marshals frequently do,
in advertising and obtaining bidders on the sale. In
this case, too, experienced ship's agents did the
work necessary for responsible possession in main
taining the ship and her skeleton crew.
But this also must always be kept in mind. The
ultimate and overall responsibility was the Mar
shal's; no one else's. Costly mistakes by the ship's
agents, the brokers, the insurance agents, or by
persons they retained, would have to be made
good, in the legal sense, by the Marshal. Time
spent by the marshal is merely one factor in
assessing fees. Responsibility, potential financial
risk, and ultimate accountability are weighty fac
tors as well.
Mr. Vaillancourt, without prejudice to his tech
nical argument that no fees at all were chargeable,
suggested an amount of $12,000. That was quite a
fair estimate. I decided $15,000 was reasonable. I
had in mind the fees allowed to the Marshal in the
Xanadu ($25,000). That vessel was not as valu
able. Her sale brought $1.6 million. The Vancou-
ver Marshal in that case had a great deal of
assistance from the mortgagees who had instigated
the arrest and sale. He did not, however, have, as
here, the assistance of a professional ship's agent
to manage and maintain the vessel, nor did he have
the assistance of a broker on the sale.
In my view, $15,000 is, in all the circumstances
and in trying to strike a balance with the Xanadu
fees, a reasonable amount to be paid to the
Marshal.
The taxing officer's decision is varied
accordingly.
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.