Prism Sulphur Corp. v. Byatt International S.A. et al., 2013 BCCA 427

• Judge: Donald, Neilson and Hinkson, JJ.A.
• Court: Court of Appeal (British Columbia)
• Case Date: June 11, 2013
• Jurisdiction: British Columbia
• Citations: 2013 BCCA 427;(2013), 344 B.C.A.C. 103 (CA)

Prism Sulphur v. Byatt Intl. (2013), 344 B.C.A.C. 103 (CA);

    587 W.A.C. 103

MLB headnote and full text

Temp. Cite: [2013] B.C.A.C. TBEd. OC.008

Prism Sulphur Corporation (petitioner) v. Byatt International S.A. (appellant/respondent) and Canworld Shipping Company Limited and MUR Shipping BV (respondents/respondents)

(CA040070; 2013 BCCA 427)

Indexed As: Prism Sulphur Corp. v. Byatt International S.A. et al.

British Columbia Court of Appeal

Donald, Neilson and Hinkson, JJ.A.

October 4, 2013.

Summary:

This was a contest over money paid into trust in interpleader proceedings concerning the freight for shipping sulphur from Vancouver to Australia aboard the M.V. Loyalty. Byatt International S.A. granted a time charter of the M.V. Loyalty to Korea Line Corp. (KLC). KLC gave a time charter to MUR Shipping BV which in turn gave a trip charter to Canworld Shipping Co. Canworld agreed to carry the sulfur from Vancouver to Australia for Prism Sulphur Corp. By the time KLC defaulted on its payment to Byatt under their time charter, MUR had already paid its hire to KLC. The indebtedness between Canworld and MUR was outstanding. Prism made the interpleader application and paid US $268,596.60 and US $65,100 into trust when Byatt took steps to intercept the freight and to exercise a lien on the freight payable by Prism to Canworld. Insolvency proceedings were taken in South Korea concerning KLC. Byatt's initial claim of US $16,360,079.41 was approved in a settlement agreement at US $10,741,166.91. Byatt took steps to recover its losses. The chambers judge ordered the funds interpleaded by Prism to be paid to MUR based on principles of equity. Byatt appealed.

The British Columbia Court of Appeal allowed the appeal. The chambers judge erred by failing to determine whether Byatt had a legal entitlement to the interpleaded funds. The terms of the settlement between KLC and Byatt did not negate Byatt's right to direct the freight of sub-charters to itself. The record did not reveal any applicable principles of equity to bar Byatt's claim.

Practice - Topic 3415

Interim proceedings - Interpleader - Priorities - See paragraphs 13 to 32.

Restitution - Topic 62

Unjust enrichment - General - What constitutes - See paragraphs 13 to 26.

Cases Noticed:

Dry Bulk Handy Holding Inc. v. Fayette International Holdings Limited, [2012] EWHC 2107 (Comm.), affd. [2013] EWCA Civ 184, refd to. [para. 24].

Wehner v. Dene Steam Shipping Co., [1905] 2 K.B. 92, refd to. [para. 27].

The "Cebu", [1983] 1 Lloyd's L.R. 302 (Q.B.), refd to. [para. 27].

Counsel:

J.W.A. Bromley and A.J. Stainer, for the appellant;

H.P. Swanson, for the respondent, Canworld Shipping Company Limited;

G. Walker and D. Rossi, for the respondent, MUR Shipping BV.

This appeal was heard at Vancouver, B.C., on June 11, 2013, by Donald, Neilson and Hinkson, JJ.A., of the British Columbia Court of Appeal. The following reasons for judgment of the Court of Appeal were delivered by Donald, J.A., on October 4, 2013.