General Accident Indemnity Co. v. Ship Panache IV, (1997) 139 F.T.R. 167 (TD)

• Court: Federal Court (Canada)
• Case Date: July 31, 1997
• Jurisdiction: Canada (Federal)
• Citations: (1997), 139 F.T.R. 167 (TD)

General Accident v. Ship Panache IV (1997), 139 F.T.R. 167 (TD)

MLB headnote and full text

Temp. Cite: [1997] F.T.R. TBEd. DE.016

General Accident Indemnity Company (plaintiffs) v. The Owners and all Others interested in the Ship "Panache IV" and the Ship "Panache IV", Helmut Peter Hahn and Diana Mary Hahn (defendants)

(T-1497-95)

Indexed As: General Accident Indemnity Co. v. Ship Panache IV

Federal Court of Canada

Trial Division

Hargrave, Prothonotary

October 31, 1997.

Summary:

A yacht sank in deep water. The underwriter successfully raised the vessel and found that it had been scuttled. The vessel's owner was convicted of insurance fraud. The vessel was sold. The underwriter claimed a salvage reward from the sale proceeds. A mortgagee claimed the sale proceeds in satisfaction of its mortgage debt.

A Prothonotary of the Federal Court of Canada, Trial Division, determined that the underwriter was entitled to a salvage award from the sale proceeds.

Shipping and Navigation - Topic 6886

Salvage - Liability for salvage operations - General - Circumstances when compensation payable - A Prothonotary of the Federal Court of Canada, Trial Division, stated that the Canada Shipping Act gives an in personam right by a salvor for compensation from the owner of a vessel - There is not an in rem right against the ship or the sale proceeds - See paragraphs 24, 25.

Shipping and Navigation - Topic 6886

Salvage - Liability for salvage operations - General - Circumstances when compensation payable - A Prothonotary of the Federal Court of Canada, Trial Division, stated that s. 449.1 of the Canada Shipping Act may give an underwriter, no longer bound by a policy, a right to a salvage award - See paragraph 26.

Shipping and Navigation - Topic 6886

Salvage - Liability for salvage operations - General - Circumstances when compensation payable - A Prothonotary of the Federal Court of Canada, Trial Division, stated that the conditions precedent to a salvage award at common law were (1) danger to the salved vessel; (2) voluntary rendering of services; and (3) success or contribution to success - See paragraph 27.

Shipping and Navigation - Topic 6944

Salvage - Liability for salvage operations - Compensation - Considerations in fixing amount - An underwriter denied coverage after a yacht sank in deep water - With considerable difficulty and at considerable cost, the underwriter raised the vessel - The vessel had been scuttled - The underwriter sought an award from the proceeds of sale of the yacht - A Prothonotary of the Federal Court of Canada, Trial Division, determined the amount of the salvage award - The Prothonotary observed, inter alia, that the amount of a salvage award is a matter of discretion; misconduct will deprive a salvor of an award; the standard award to the salvor of a derelict used to be a moiety; a salvor may receive an enhanced award to cover out of pocket expenses - See paragraphs 49 to 79.

Cases Noticed:

Ship HMS Thetis, Re (1833), 3 Hag. Adm. 14; 166 E.R. 312, refd to. [para. 16].

Ship Ocean Grandeur, Re, [1972-73] A.L.R. 948 (Aust. H.C.), refd to. [para. 27].

Ship Neptune, Re, [1824] 1 Hag. Adm. 227; 166 E.R. 81, refd to. [para. 29].

Crouan v. Stanier, [1904] 1 K.B. 87, refd to. [para. 30].

Ship Pickwick, Re (1852), 16 Jur. 669, refd to. [para. 31].

Ship Purissima Concepcion, Re (1849), 3 Wm. Rob. 181; 166 E.R. 930, refd to. [para. 33].

Ship Liffey, Re, [1887] 6 Asp. MLC 255, refd to. [para. 40].

Ship Lomonosoff, Re, [1921] P. 97, refd to. [para. 40].

Simon v. Taylor, [1975] 2 Lloyd's Rep. 338 (Singapore), refd to. [para. 40].

Ship Favorite, Re, [1844] 2 Wm. Rob. 255; 166 E.R. 751, refd to. [para. 46].

Ship Honor (Cargo Ex.), Re (1866), L.R. 1 A & E. 87, refd to. [para. 47].

Ship Kate B. Jones, Re, [1892] P. 366, refd to. [para. 47].

Ship Happy Return, Re (1828), 2 Hag. Adm. 198; 166 E.R. 217, refd to. [para. 47].

Raubon Steamship Co. v. London Assurance, [1900] A.C. 6, refd to. [para. 49].

Ship Acanthus, Re, [1902] P. 17, refd to. [para. 49].

Ship Florence No. 2, Re, [1948] Ex. C.R. 426, refd to. [para. 52].

Ship Cythera, Re, [1965] 2 Lloyd's Rep. 454 (N.S.W.S.C.), refd to. [para. 54].

Ship Glengyle, Re, [1898] P. 104 (C.A.), refd to. [para. 55].

Ship Bartley, Re, [1857] Sw. 198; 166 E.R. 1093, refd to. [para. 57].

Ship Henry, Re, [1810] Edw. 192; 165 E.R. 1079, refd to. [para. 57].

Ship Cape Packet, Re (1848), 3 Wm. Rob. 122; 166 E.R. 909, refd to. [para. 62].

Ship Atlas, Re, [1862] Lush. 518; 167 E.R. 235 (P.C.), refd to. [para. 63].

Bligh v. Simpson; Ship Fusilier (1865), Brown & Lush. 342; 167 E.R. 391 (P.C.), refd to. [para. 69].

Ship Paust, Re, [1951] 2 Lloyd's Rep. 171, refd to. [para. 70].

Ship Jubilee, Re (1826), 3 Hag. Adm. 43; 166 E.R. 323, refd to. [para. 72].

Ship Watt, Re (1843), 2 Wm. Rob. 70; 166 E.R. 681, refd to. [para. 72].

Papayanni v. Hocquard; Ship True Blue, [1866] L.R. 1 P.C. 250 (P.C.), refd to. [para. 72].

Jacobson v. Ship Archer (1894), 3 B.C.R. 374 (Can.), refd to. [para. 74].

Glengyle (Owners) Cargo & Freight v. Neptune Salvage Co.; Ship Glengyle, [1898] A.C. 519 (H.L.), refd to. [para. 74].

Ship Scheldestd, Re (1933), 45 Ll. L.R. 269, refd to. [para. 74].

Ship Pacific, Re (1931), 41 Ll. L.R. 83, refd to. [para. 74].

Ship Topa Topa, Re, (1935) 50 Ll. L.R. 211, refd to. [para. 74].

Ship Evaine, Re, [1966] 2 Lloyd's Rep. 413 (C.A.), refd to. [para. 74].

Statutes Noticed:

Canada Shipping Act - see Shipping Act.

Shipping Act, R.S.C. 1985, c. S-9, sect. 452 [para. 25]; sect. 449.1 [para. 26].

Authors and Works Noticed:

Kennedy, William Rann, Salvage (4th Ed.), pp. 180 [para. 73]; 184 [para. 60].

Kennedy, William Rann, Salvage (5th Ed. 1985), pp. 18 [para. 49]; 25-26 [para. 40]; 161-163 [para. 34]; 193- 195 [para. 40]; 459, 460, 463 [para. 73]; 469 [para. 59].

Newson on Salvage (1886), p. 39 [para. 33].

Sutton on Assessing of Salvage Awards (1949), p. 2 [para. 52].

Counsel:

Shelley Chapelski, for the plaintiff;

Brad M. Caldwell, for the Canadian Imperial Bank of Commerce.

Solicitors of Record:

Harry Lipetz, Connell Lightbody, for the plaintiff;

Brad M. Caldwell, for the C.I.B.C.;

Murray B. Blok, Russel & DuMoulin, for the defendants.

This case was heard on July 31, 1997, at Vancouver, British Columbia, before Hargrave, Prothonotary, of the Federal Court of Canada, Trial Division, who delivered the following judgment on October 31, 1997.