Duplicate proceedings will likely be joined as opposed to dismissed

This is a motion by two Defendants in two cases with the same factual matrix arising out of the same event to have the second action struck. The two Plaintiffs are the same in the first action, with one of those Plaintiffs becoming a Defendant in the second action. The motion was dismissed and the actions were ordered restructured, so that both Plaintiffs could pursue their subrogated and uninsured claims against each set of Defendants in a specially managed proceeding.

Hodder Tugboat Co. v. J.J.M. Construction Ltd., [2009] F.C.J. No. 204, February 13, 2009, The Federal Court, Lemieux, J.

Hodder owned two barges, which were placed under charter with J.J.M. Construction. J.J.M. contracted with Pacific to tow the barges from Texada Island to Vancouver. Texada Quarrying loaded those barges.

One of the barges capsized near Vancouver. The second barge was towed to the J.J.M. wharf, where it was secured. Once there, it began to list and subsequently sank. Pursuant to the Charter Agreement, J.J.M. insured the barges and named Hodder as co-assured through Navigators Insurance. Navigators indemnified Hodder for the damages to the barges and Hodder subrogated their rights to Navigators. In the first action, Hodder and J.J.M. are the Plaintiffs, while Texada and Pacific are Defendants.

In the second action Hodder is the Plaintiff, with the Defendants being J.J.M., Texada and Pacific. The grounds for liability against Texada and Pacific as Defendants are essentially the same in both actions. In the second action, Hodder claims against J.J.M., that it improperly secured the barge to its ramp, grounding it, and causing damage to the bottom of the hull with the resulting loss of the barge.

The solicitors for the Plaintiffs in the first action and the second action are different. There are competing principles in these actions: The Court is opposed to multiplicity of actions, yet if an insurer wants to control the litigation then it must provide for complete indemnity of the insured. There can be no subrogation of the rights of a party whose claim is not wholly satisfied.

The Court ordered the following: Counsel for Hodder in the second action and for both Plaintiffs in the first action cooperate to achieve the restructuring of the two actions whereby J.J.M. becomes the sole Plaintiff in the first action pursuing its subrogated and insured claims against the two Defendants, and Hodder becomes the sole Plaintiff in the second action pursuing his subrogated and uninsured claims against the three Defendants.

Both actions will continue as “specially-managed” proceedings that will be heard together but not consolidated. The motion brought by Texada and Pacific to strike the second action was dismissed.

This case was originally summarized by Neil J. MacDonald and originally edited by David W. Pilley.

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