Holt Cargo Systems Inc. v. Ship Brussel, (2000) 185 F.T.R. 1 (TD)

• Judge: MacKay, J.
• Court: Federal Court (Canada)
• Case Date: Friday February 11, 2000
• Jurisdiction: Canada (Federal)
• Citations: (2000), 185 F.T.R. 1 (TD)

Holt Cargo Systems Inc. v. Ship Brussel (2000), 185 F.T.R. 1 (TD)

MLB headnote and full text

Temp. Cite: [2000] F.T.R. TBEd. MR.037

Holt Cargo Systems Inc. (plaintiff) v. Messrs. T. Van Dooselare and F. De Roy as Trustees in Bankruptcy of ABC Containerline N.V., the owners, Charterers and all Others Interested in the Ship "Brussel", and the Ship "Brussel" (defendants) and Société Nationale de Crédit à l'Industrie S.A. (intervenor)

(T-738-96)

Indexed As: Holt Cargo Systems Inc. v. Ship Brussel

Federal Court of Canada

Trial Division

MacKay, J.

February 11, 2000.

Summary:

A New Jersey plaintiff obtained a default judgment against a vessel for unpaid fees and charges relating to stevedoring services provided in the U.S. Other parties filed claims against, inter alia, the vessel. The vessel's owners went bankrupt. The vessel's sale proceeds were paid into court. The vessel's mortgagee filed a claim for more than the sale proceeds. At issue in this ap­plication was whether the claimants, other than the mortgagee, had secured claims that ranked in priority ahead of the mortgagee.

The Federal Court of Canada, Trial Divi­sion, ordered accordingly, determining the priority of each claim.

Admiralty - Topic 8342

Practice - Action in rem - Liens - Prior­ities - A New Jersey plaintiff obtained a default judgment against a vessel - The vessel's owner went bankrupt - Various parties filed claims against the vessel's sale pro­ceeds - The vessel's mortgagee claimed for more than the sale proceeds - The Halifax Port Corp. claimed against the fund for (1) fees and charges for services levied against the vessel in Halifax based on a statutory lien (Canada Ports Corpo­ration Act), (2) interest, and (3) amounts owing for ser­vices provided to the vessel's sister ships - The Federal Court of Canada, Trial Divi­sion, allowed (1) and (2), but denied (3) - Regarding (1), given there were no claims by seamen for wages, the lien had first priority - Regarding (3), the Act did not extend the statutory claim to sister ships, but Halifax Port Corp. had a claim in rem which ranked behind the mortgagee's claim - See paragraphs 34 to 38.

Admiralty - Topic 8342

Practice - Action in rem - Liens - Prior­ities - A New Jersey company (Holt) ob­tained a default judgment against a vessel for unpaid fees and charges related to steve­doring services provided to the vessel and interest - The judgment con­tained a declar­ation that Holt's interest in the ves­sel was a maritime lien - The vessel's owner went bankrupt - Holt's solicitor's costs associ­ated with the appraisement, advertisement and sale of the vessel had not been taxed or paid - Holt claimed against the vessel's sale proceeds - The vessel's mortgagee claimed for more than the sale proceeds - Holt asserted that its claim raised an American maritime lien, giving it priority over the mortgagee's claim - The Federal Court of Canada, Trial Division, held that Holt had priority over the mortgagee's claim and should be paid from the fund when billed - See para­graphs 44 and 45.

Admiralty - Topic 8342

Practice - Action in rem - Liens - Prior­ities - A New Jersey plaintiff obtained a default judgment against a vessel - The vessel's owner went bankrupt - Various parties filed claims against the vessel's sale pro­ceeds - The vessel's mortgagee claimed for more than the sale proceeds - Ashland Chemical Co. claimed for amounts owing for providing goods and services at Phila­delphia to the vessel and its sister ships - The Federal Court of Canada, Trial Divi­sion, held that Ashland had a maritime lien for providing goods and services provided only to the vessel, which took priority to the mortgagee's claim - Ashland had a statutory in rem claim against the vessel for the goods and services provided to the sister ships (Fed­eral Court Act, s. 43(8)), but this did not take priority to the mort­gagee's claim - See paragraphs 46 to 47.

Admiralty - Topic 8342

Practice - Action in rem - Liens - Prior­ities - A New Jersey plaintiff obtained a default judgment against a vessel - The vessel's owner went bankrupt - Various parties filed claims against the vessel's sale pro­ceeds - The vessel's mortgagee claimed for more than the sale proceeds - Some U.S. parties claimed for amounts owing for necessaries to the vessel and the vessel's sister ships, asserting their claims raised an American maritime lien, giving it priority over the mortgagee's claim - The Federal Court of Canada, Trial Division, ordered accordingly regarding the priori­ties of these companies.

Admiralty - Topic 8343

Practice - Action in rem - Liens - Mari­time lien - Assignment of - A New Jersey plain­tiff obtained a default judgment against a vessel - The vessel's owner went bankrupt - Various parties filed claims against the vessel's sale proceeds - The vessel's mort­gagee claimed for more than the sale pro­ceeds - Halterm, pursuant to its contract with Halifax Port Corp., agreed to pay the Port's fees for wharfage and dock­age that the ships owed to Port - Halterm then billed the ships for these fees and the ships would pay Halterm - Hal­term as­serted that it had the same priority as Port regarding the vessel's wharfage and dock­age charges because Halterm's interest was a subrogated lien - The Federal Court of Canada, Trial Division, held that Port did not assign its right to enforce its claims for fees by liens against the vessel to Halterm - See paragraphs 70 to 75.

Admiralty - Topic 8345

Practice - Action in rem - Liens - Mari­time lien for necessities - [See fourth Ad­miral­ty - Topic 8342].

Admiralty - Topic 8347

Practice - Action in rem - Liens - Mari­time lien created by law of foreign juris­diction - A New Jersey plaintiff obtained a default judgment against a vessel - The vessel's owners went bankrupt - The ves­sel was sold - The vessel's mortgagee filed a claim for more than the sale pro­ceeds - Some U.S. claimants asserted that their claims raised American maritime liens, which took priority to the mortga­gee's claim - The trustees in bankruptcy asserted that the American maritime liens did have priority to the mortgagee's claim where a similar lien was not available under Cana­dian maritime law - Such ranking was not justifiable in an "interna­tional bankruptcy" - The Federal Court of Canada, Trial Divi­sion, followed the Supreme Court of Canada's jurisprudence, recognizing and enforcing maritime liens arising under U.S. law on the same basis accorded to them under American law - See para­graphs 15 and 16.

Admiralty - Topic 8347.1

Practice - Action in rem - Liens - Mari­time liens - Enforcement - Sister ship procedure - A New Jersey plaintiff ob­tained a default judgment against a vessel - The vessel's owner went bankrupt - The vessel was sold - Various parties filed claims against the sale proceeds, including the vessel's mort­gagee - Some claimants with American statutory mari­time liens claimed against ships that were beneficial­ly owned by the vessel's owners - At issue was whether s. 43(8) of the Federal Court Act (sister ship provision) gave maritime lien holders with a claim against one ship the same priority as a maritime lien against a sister ship arrested in Canada, regardless of whether the claims originated in Canada or abroad - The U.S. did not have a similar sister ship provision - The Federal Court of Canada, Trial Division, held that the maritime liens' special pri­ority was not portable to sister ships - The maritime liens against the sister ships was enforceable against the vessel under s. 43(8), but were ranked below the mort­gagee's claim - See para­graphs 17 to 25.

Bankruptcy - Topic 3927.2

Secured creditors - What constitutes a secured creditor - Maritime lien claimant - [See second, third and fourth Admiralty - Topic 8342, Admiralty - Topic 8347 and Admiralty - Topic 8347.1].

Conflict of Laws - Topic 2454

Admiralty - Liens - Maritime lien created by law of foreign jurisdiction - [See sec­ond, third and fourth Admiralty - Topic 8342, Admiralty - Topic 8347 and Adm­iralty - Topic 8347.1].

Cases Noticed:

Ship Strandhill v. Hodder (Walter W.) Co., [1926] S.C.R. 680, refd to. [para. 16, footnote 6].

Todd Shipyards Corp. v. Altema Com­pania Maritima S.A. and Ship Ioannis Daska­lelis, [1974] S.C.R. 1248; [1974] 1 Lloyd's Rep. 174, refd to. [para. 16, footnote 7].

Fraser Shipyard and Industrial Centre Ltd. v. Expedient Maritime Co. et al. (1999), 170 F.T.R. 1 (T.D. Protho.), varied on other grounds (1999), 170 F.T.R. 57 (T.D.), agreed with [para. 18, footnote 9].

Wilbur (Lee S.) & Co. v. Ship Martha Ingraham, [1989] F.C.J. No. 427 (T.D.), refd to. [para. 26, footnote 12].

Alcan Aluminium Ltd. et al. v. Unican International S.A. et al. (1996), 120 F.T.R. 44 (T.D.), refd to. [para. 26, foot­note 13].

Shibamoto & Co. et al. v. Western Fish Producers Inc. (Bankrupt) et al. (1991), 48 F.T.R. 176 (T.D.), refd to. [para. 26, footnote 13].

Osborne Refrigeration Sales and Service Inc. v. Ship Atlantean I (1982), 52 N.R. 10; 7 D.L.R.(4th) 395 (F.C.A.), refd to. [para. 27, footnote 14].

Gatineau Power Co. v. Crown Life Insur­ance Co. et al., [1945] S.C.R. 655, refd to. [para. 29, footnote 15].

N.V. Bocimar S.A. v. Century Insurance Co. of Canada (1984), 53 N.R. 383 (F.C.A.), revd. on other grounds, [1987] 1 S.C.R. 1247; 76 N.R. 212, refd to. [para. 29, footnote 15].

Osborne Refrigeration Sales and Service Inc. v. Ship Atlantean I et al., [1979] 2 F.C. 661 (T.D.), varied on other grounds (1982), 52 N.R. 10; 7 D.L.R.(4th) 395 (F.C.A.), refd to. [para. 40, footnote 19].

Ultramar Canada Inc. v. Pierson Steam­ships Ltd. et al. (1982), 43 C.B.R.(N.S.) 9 (F.C.T.D.), refd to. [para. 40, footnote 20].

Ship Comet, Re, [1965] 1 W.L.R. 479, refd to. [para. 45, footnote 22].

Ship Leoborg (No. 2), Re, [1964] 1 Lloyd's Rep. 380, refd to. [para. 45, footnote 22].

Metaxas et al. v. Ship Galaxias et al. (No. 4) (1988), 24 F.T.R. 243 (T.D.), refd to. [para. 72, footnote 26].

Lamplugh Iron Ore Co., Re, [1927] 1 Ch. 308, refd to. [para. 73, footnote 27].

Authors and Works Noticed:

Tetley, William, Maritime Liens and Claims (2nd Ed. 1998), pp. 59, 60 [para. 19, footnote 10]; 463 [para. 40, footnote 21]; 609 to 613 [para. 81, footnote 29]; 1230 [para. 74, footnote 28].

Counsel:

Thomas Hart, for the plaintiff and thirteen claimants;

David Colford, for the trustees in bank­ruptcy;

Edouard Baudry and François Touchette, for the intervenor;

Richard Southcott, for the claimants, Hal­term, Tricon Steamship and Atlantic Pilotage Authority;

James Youden and Sandra Attersley, for the claimants, Bridge Oil and Ashland Chemical;

Matthew Williams, for the claimant, CN Railway.

Solicitors of Record:

McInnes Cooper and Robertson, Halifax, Nova Scotia, for the plaintiff and thir­teen claimants;

Brisset, Bishop, Montreal, Quebec, for the trustees in Bankruptcy;

Lavery, de Billy, Montreal, Quebec, for the intervenor;

Stewart McKelvey Stirling Scales, Halifax, Nova Scotia, for the claimants Halterm, Tricon Steamship and Atlantic Pilotage Authority;

Metcalf & Co., Halifax, Nova Scotia, for the claimants Bridge Oil and Ashland Chemical;

Daley, Black & Moreira, Halifax, Nova Scotia, for the claimant CN Railway.

This application was heard at Halifax, Nova Scotia, on July 26 and 27, 1999, be­fore MacKay, J., of the Federal Court of Canada, Trial Division, who delivered the following judgment on February 11, 2000.