Budget Steel Ltd. v. Seaspan International Ltd.

In Admiralty Practice, Delay and Time Extensions on (Updated )

This was an appeal to the Federal Court of a Prothonotary’s order granting the Plaintiffs an extension of time to file a defence to counterclaim. The Plaintiffs claimed damages for the loss of a cargo of scrap steel when the Defendant’s barge capsized. The Defendant filed a defence and counterclaimed for loss of freight and damage to the barge as a constructive total loss. Plaintiff’s counsel could not obtain instructions to defend the counterclaim and wrote to Defendant’s counsel asking that they not take default judgment without prior notice. Defendant’s counsel did not respond to that letter. The Prothonotary granted the application applying the test in Canada (Attorney General) v. Hennelly (1999), 244 N.R. 399. Although finding that there was not a particularly strong continuing intention to defend and the reasons for delay were weak, there appeared to be possible defences and there was no prejudice to the Defendant in granting the extension. The Prothonotary on these factors alone considered the issue balanced, but on the basis that the Plaintiffs’ counsel had written at the outset explaining the need for time to obtain instructions and that the Defendants had not responded and had not taken steps to advance the counterclaim along, the Prothonotary held it would be unjust not to grant the time extension. The decision was upheld on appeal. The appeal Judge held that this was a discretionary matter and that the discretion had been properly exercised.