World Fuel Services Corp. v. Ship Nordems et al., (2010) 366 F.T.R. 118 (FC)

• Judge: Harrington, J.
• Court: Federal Court (Canada)
• Case Date: February 17, 2010
• Jurisdiction: Canada (Federal)
• Citations: (2010), 366 F.T.R. 118 (FC);2010 FC 332

World Fuel v. Ship Nordems (2010), 366 F.T.R. 118 (FC)

MLB headnote and full text

Temp. Cite: [2010] F.T.R. TBEd. MR.041

World Fuel Services Corporation (plaintiff) v. The Ship "Nordems" and the owners and all others interested in the Ship "Nordems", and Reederei "Nord" Klaus E. Oldendorff GmbH and Partenreederei m.s. "Nordems" and Parkroad Corporation (defendants)

(T-1914-08; 2010 FC 332)

Indexed As: World Fuel Services Corp. v. Ship Nordems et al.

Federal Court

Harrington, J.

March 25, 2010.

Summary:

The plaintiff supplied bunkers (fuel) to a ship at the request of her now bankrupt sub-time charterer Parkroad Corp. The plaintiff sued Parkroad, the ship and its owners and managers for nonpayment. The plaintiff sought summary judgment. The defendant owners and managers of the ship also sought summary judgment.

The Federal Court dismissed the plaintiff's motion, allowed the owners and managers' motion and dismissed the action against all defendants except Parkroad.

Admiralty - Topic 6031

Principles of law - Canadian Maritime Law - Agency and mandate matters - The plaintiff supplied bunkers (fuel) to a ship (a Cyprus flag bulk carrier) at the request of a Korean sub-time charterer Parkroad Corp. - Offer and acceptance were communicated in Korea - The bunkers was taken onboard in South Africa - Parkroad went bankrupt without paying for the bunkers - The plaintiff arrested the ship in Baie Comeau, Canada - The plaintiff sued Parkroad, the ship and its owners and managers for nonpayment - The plaintiff argued that Parkroad contracted not only on its own behalf, but also on behalf of the ship and her owners and managers - The provisions of the contract deemed it to have been made in the United States it was expressly governed by American law which created a maritime lien over the ship, even if the owners and managers were not personally liable - The Federal Court dismissed the action against all defendants except Parkroad - The ship owners were not party to the contract and were not bound by its terms - Parkroad had no actual or ostensible authority to contract on their behalf or on the credit of the ship - They were expressly prohibited form doing so - The plaintiff was on notice that Parkroad might not have actual authority to bind the ship and should have verified the matter with the owners - The presumption under Canadian maritime law that necessaries (the bunkers) were supplied on the credit of the ship was successfully rebutted - Under domestic Canadian maritime law the ship's owners and managers were not personally liable and so the action was dismissed in rem and in personam - See paragraphs 41 to 51 and 86.

Admiralty - Topic 8044

Practice - Actions in rem - When available - [See Admiralty - Topic 6031 ].

Admiralty - Topic 8045

Practice - Actions in rem - Claims for necessaries - [See Admiralty - Topic 6031 ].

Admiralty - Topic 8345

Practice - Actions in rem - Liens - Maritime lien for necessities - [See Admiralty - Topic 6031 ].

Admiralty - Topic 8347

Practice - Actions in rem - Liens - Maritime lien created by law of foreign jurisdiction - The plaintiff supplied bunkers (fuel) to a ship (a Cyprus flag bulk carrier) at the request of a Korean sub-time charterer Parkroad Corp. - Offer and acceptance were communicated in Korea - The bunkers was taken onboard in South Africa - Parkroad went bankrupt without paying for the bunkers - The plaintiff arrested the ship in Baie Comeau, Canada - The plaintiff sued Parkroad, the ship and its owners and managers for nonpayment - The plaintiff argued that Parkroad contracted not only on its own behalf, but also on behalf of the ship and her owners and managers - The provisions of the contract deemed it to have been made in the United States and was expressly governed by American law which created a maritime lien over the ship, even if the owners and managers were not personally liable - The owners and managers were in Germany - At no relevant time did the ship ply American waters - The Federal Court held Canadian conflict laws did not direct the court to United States law so as to give the plaintiff a maritime lien on the ship - The non-American factors outweighed the American ones - In a fact situation which had contact with several jurisdictions, pride of place had to be given to the place where the necessaries were provided (South Africa) - Here, that fact alone, or if necessary coupled with the place of arrest (Canada), outweighed the other factors - Alternatively, if American law was the proper law, it did not create a maritime lien on the ship or impose liability on her owners or managers - See paragraphs 68 to 86.

Conflict of Laws - Topic 2454

Admiralty - Liens - Maritime lien created by law of foreign jurisdiction - [See Admiralty - Topic 8347 ].

Cases Noticed:

Ship Monica S., Re, [1967] 3 All E.R. 740; [1967] 2 Lloyd's Rep. 113; [1968] P. 741, refd to. [para. 11].

Osborn 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. 12].

Marlex Petroleum Inc. v. Ship Har Rai and Shipping Corp. of India Ltd., [1984] 2 F.C. 345; 53 N.R. 1; 1984 AMC 1649 (F.C.A.), affd. [1987] 1 S.C.R. 57; 72 N.R. 75, refd to. [para. 13].

Imperial Oil Ltd. v. Petromar Inc. et al., [2002] 3 F.C. 190; 283 N.R. 182; 2002 AMC 536; 2001 FCA 391 (F.C.A.), refd to. [para. 13].

Holt Cargo Systems Inc. v. ABC Containerline N.V. (Bankrupt) et al., [2001] 3 S.C.R. 907; 280 N.R. 1; 2001 SCC 90, refd to. [para. 13].

Bankers Trust International Ltd. v. Todd Shipyards Corp. (Ship Halcyon Isle), [1980] 2 Lloyd's Rep. 325; 1980 AMC 1221, [1981] A.C. 221 (P.C.), refd to. [para. 14].

JPMorgan Chase Bank et al. v. Mystras Maritime Corp. et al. - see Kent Trade and Finance Inc. et al. v. JPMorgan Chase Bank et al.

Kent Trade and Finance Inc. et al. v. JPMorgan Chase Bank et al., [2007] 1 F.C.R. 289; 289 F.T.R. 165; 2006 AMC 812; 2006 FC 409, revd. (2008), 388 N.R. 39; 305 D.L.R.(4th) 442; 2008 FCA 399, refd to. [para. 16].

Vipond v. Furness Withy & Co. (1916), 54 S.C.R. 521, refd to. [para. 36].

Sivaco Wire & Nail Co. and Atlantic Lines & Navigation Co. v. Ship Tropwood A.G. and Owners of the Vessell Tropwood, [1979] 2 S.C.R. 157; 26 N.R. 313, refd to. [para. 38].

Chartwell Shipping Ltd. v. Q.N.S. Paper Co., [1989] 2 S.C.R. 683; 101 N.R. 1; 26 Q.A.C. 81; 62 D.L.R.(4th) 36; 1988 CarswellQue 157; 1989 AMC 2798, refd to. [para. 41].

Fraser River Pile & Dredge Ltd. v. Can-Dive Services Ltd., [1999] 3 S.C.R. 108; 245 N.R. 88; 127 B.C.A.C. 287; 207 W.A.C. 287; 1999 AMC 2840, refd to. [para. 42].

Westcan Stevedoring Ltd. v. Ship Armar, [1973] F.C. 1232 (T.D.), refd to. [para. 44].

Miida Electronics Inc. v. Mitsui O.S.K. Lines Ltd. and ITO-International Terminal Operators Ltd., [1986] 1 S.C.R. 752; 68 N.R. 241; 1986 AMC 2580, refd to. [para. 44].

London Drugs Ltd. v. Brassart and Vanwinkel, [1992] 3 S.C.R. 299; 143 N.R. 1; 18 B.C.A.C. 1; 31 W.A.C. 1, refd to. [para. 44].

Mount Royal/Walsh Inc. v. Ship Jensen Star et al., [1990] 1 F.C. 199; 99 N.R. 42 (F.C.A.), refd to. [para. 45].

Ship Strandhill v. Hodder (Walter W.) Co., [1926] S.C.R. 680; 1927 AMC 244, refd to. [para. 54].

Todd Shipyards Corp. v. Ship Ioannis Daskalelis, [1974] S.C.R. 1248; [1974] 1 Lloyd's Rep. 174; 1973 AMC 176, refd to. [para. 55].

Lauritzen v. Larsen (1953), 345 U.S. 571; 1953 AMC 1210 (Sup. Ct.), refd to. [para. 61].

Kirgan Holdings S.A. v. Ship Panamax Leader et al. (2002), 225 F.T.R. 273; 2002 AMC 2917; 2002 FCT 1235, refd to. [para. 64].

Liverpool and London Steamship Protection and Indemnity Association Ltd. v. Queen of Leman MV (2002), 296 F.3d 350 (C.A. 5th Cir.), refd to. [para. 70].

Trans-Tech Asia v. M/V Harmony Container et al. (2008), 518 F.3d 1120; 2008 AMC 684 (9th Cir.), refd to. [para. 70].

Triton Marine Fuels Ltd. S.A. et al. v. M/V Pacific Chukotka et al. (2009), 575 F.3d 409; 2009 AMC 1885 (C.A., 4th Cir.), refd to. [para. 70].

Rainbow Line Inc. v. M/V Tequila (1973), 480 F.2d 1024; 1973 AMC 1431 (2nd Cir.), refd to. [para. 70].

Authors and Works Noticed:

Castel, Jean-Gabriel, and Walker, Janet, Canadian Conflict of Laws (6th Ed. 2005), para. 7.3 [para. 71].

Dicey, Morris and Collins on the Conflict of Laws (14th Ed. 2006), pp. 73 ff [para. 52]; para. 7-033 [para. 14].

Fridman, Gerald Henry Louis, The Law of Contract in Canada (5th Ed. 2006), pp. 114 [para. 42]; 152 [para. 43].

Scrutton, Charterparties and Bills of Lading (21st Ed. 2006), pp. 55 to 61 [para. 20].

Counsel:

Marc de Man, for the plaintiff;

John O'Connor, for the defendants except for Parkroad.

Solicitors of Record:

De Man, Pilotte, Montreal, Quebec, for the plaintiff;

Langlois, Gaudreau, O'Connor, Quebec City, Quebec, for the defendants except for Parkroad.

These motions were heard at Montréal, Quebec, on February 17, 2010, before Harrington, J., of the Federal Court, who delivered the following judgment on March 25, 2010, in Ottawa, Ontario.