Arrest of Fishing Vessels

 Westcoast Fisherman May 1998

 On Saturday April 4, 1998, the Vancouver Sun reported an incident which was remarkably similar to the Alaska Ferry blockade (see both Sept. and Nov. issues of WCF).   According to the report, a large group of taxi cabs mounted a blockade of the access routes to Vancouver International Airport, causing a number of travellers to miss their flights.  Assuming that the Airlines will have to compensate the passengers for their missed flights, this blockade will cost the Airlines a considerable amount of money just as the Ferry blockade was alleged to have cost the State of Alaska  a lot of money.   

 Given the similarities in these cases, one would expect the legal remedies available to both the Airlines and the State of Alaska to also be similar.   To some extent this is true.  For example both the State of Alaska and the Airlines were able to quickly obtain a court injunction, preventing the continuation of the blockades.  Furthermore,  the State of Alaska advanced a claim for damages and, presumably, the Airlines will also be in a good position to advance such a claim. Where the legal remedies available to the Airlines and the State of Alaska differ, is in their ability to obtain pre-judgement execution against property.  In the case of the Ferry blockade, the State of Alaska was able to threaten to arrest all of the fishing vessels involved in the blockade unless security in excess of two million dollars was posted.   In the case of the Airport blockade, no such remedy is available.

 Except in very limited circumstances, the ability to seize property prior to obtaining a judgement of a court is limited to courts which have in rem jurisdiction over ships.   The purpose of this paper is to outline in detail the nature of this jurisdiction as it relates to the arrest of fishing vessels and to suggest that it may be time to re-assess whether or not the continuance of  in rem jurisdiction over fishing vessels is desirable.

 History and Purpose

The Latin words “in rem” simply mean “against the thing”.  It is reported that since the Elizabethan era, the English courts of admiralty have allowed a direct action against a ship (the “thing”) as opposed to just an action against the owner of the ship.  Given the highly mobile nature of ships, this was a very practical remedy as it facilitated service of claims and secured the payment of judgements when it was often difficult or impossible to realize upon a judgement of an English court in the country of origin of the ship.  In a recent court decision, the continued usefulness of this remedy, as it applies to deep sea ships, was noted by Prothonotary Hargrave, who said  “arrest procedure is particularly valuable in our jurisdiction, for Canada is not a nation with a foreign-going merchant marine and therefore must rely upon offshore carriers, often carriers in effectively judgement proof jurisdictions”. (“Limanskiy” p. 20)

Jurisdiction to Arrest  

 The courts have the jurisdiction to arrest all kinds of ships, including fishing vessels, in a broad range of claims so long as there is actual or, in some cases, presumed personal liability on the part of the owner of the ship.  Ships can be arrested to enforce claims to maritime liens such as liens for wages, salvage, and collision damage.  They can also be arrested to enforce claims to statutory liens such as claims for payment for  moorage, fuel and repairs to ships.  It is important to note, that although a statutory lien allows the claimant to arrest and sell a ship, once the ship is sold, the claimant has no special priority to the proceeds of sale and ranks merely as a general creditor.  In addition, depending upon the type of claim, the court can lose jurisdiction to arrest a ship, if the ownership of the vessel changes prior the commencement of the action.  

 In the Supreme Court of British Columbia, a claimant can only arrest the ship which was involved in the transaction giving rise to the cause of action.   In the Federal Court, sister ship arrest is allowed.  This means, a claimant can also arrest other ships, owned by the owner of the offending ship so long as the other ships are still commonly owned at the time of the commencement of the action.

 With respect to claims related to commercial fishing, claims where in rem jurisdiction has been recognized in the past include the following:

 1.   Disputes involving contracts for the use of vessels for the processing of fish at sea;

 2.   A dispute involving a contract for the use of a vessel for the purchase of fish at sea;

 3.   A claim of conspiracy to breach a contract involving the processing of fish at sea by a vessel which included claims of  fraud and deceit;

 4.   A claim of failing to notify a fish processor as required by a bill of lading of the delivery of a cargo of frozen herring, issuing a second bill of lading for such cargo without recovering the first bill of lading and failing to inter plead when two parties were claiming the same cargo; and

 5.   Claims for repairs performed by shipyards.

 Courts have refused to recognize in rem jurisdiction to arrest fishing vessels in the following circumstances:

 1.   A claim of conspiracy to improperly transfer ground fish quota to a fishing vessel and use the vessel to fish the quota; and

 2.   A claim of intentional cutting of ground line of a competing Black Cod vessel by non owner crew members and the use and subsequent disposal of the traps of the competing vessel.

 An area of jurisdiction which is unclear is the right to arrest a fishing vessel for the failure to pay a crew share.   There is clearly a right for normal crew members of a ship to arrest a vessel to collect unpaid wages.  However, since crew members on fish boats are generally considered co-adventurers, it is arguable that they do not have the same status as crew members working for straight wages.  I am not aware of any decision which has clearly decided this issue.

 Procedure for Arrest

 The procedure for arresting a vessel is relatively simple and inexpensive.  In British Columbia an action is commenced in either the Supreme Court of British Columbia or the Federal Court of Canada setting out a claim within the in rem jurisdiction of the court.  At the same time the action is filed, an affidavit to lead warrant can also be  filed.  The court registry will then ordinarily issue a warrant for arrest without the need for the claimant to appear before a judge.  The warrant and statement of claim are then delivered to a court appointed bailiff who will serve the documents on the vessel by attaching them to the vessel in a conspicuous place.  Since the arrest does not change the possession of the vessel, neither the arresting party nor the bailiff are under any obligation to maintain or look after the vessel.   However, if the vessel is moved without the consent of the court, the party moving the vessel will be in contempt of court and punishable with a possible jail term.

  If the vessel is  in a location where there is a resident court bailiff such as Vancouver, Nanaimo, Victoria, or Terrace, the bailiff will ordinarily arrest the vessel for a fee of approximately $375 dollars.  If the vessel is in a more remote location, it is necessary to pay additional travel expenses to the bailiff which can add up to several thousands of dollars.

After the vessel is arrested, the owner can arrange for the release of the vessel by posting security in the form of a bail bond or letter of undertaking from an insurer.  Normally it is necessary to post security in an amount sufficient to cover the amount claimed plus costs and pre-judgement interest.   In the case of insured claims, such as claims involving collisions or salvage, normally an insurer will arrange for release of the vessel without delay.   However, in the case of uninsured claims, it is often impossible for vessel owners to raise sufficient funds to release  the vessel.  Given that it can take up to two years for a case to come to trial, an arrest can have disastrous consequences to a fisherman.  Accordingly, owners of vessels are sometime forced into poor settlements with claimants in order to get their vessels released.

 Over the last several years, there have been a number of cases where vessel owners have unsuccessfully attempted to sue and obtain damages for wrongful arrest.  For example, recently in the case of Armada Lines Ltd. v. Chaleur Fertilizers Ltd., the Federal Court of Appeal awarded damages for wrongful arrest.  However the case was appealed to the Supreme Court of Canada, which upheld the law as applied in England and most other maritime countries to the effect that damages will only be awarded for wrongful arrest if the arrest was made in bad faith or with gross negligence. 

As an aside, it should be noted that in one case where an action had been commenced for some time in the Supreme Court, and on the eve of the opening of a herring fishery, an action was commenced in the Federal Court for the purpose of arresting the defendant’s fishing vessel, the court found that the arrest was an abuse of process and set aside the arrest on the condition that the arresting party could apply to re-arrest the boat at the end of the season.

Analysis

 It is interesting to note, that in the Armada case, the ship owner argued that the disparity between the rules which apply to non maritime actions (such as the Airlines in the example above), and maritime actions operate unfairly against defendants in in rem proceedings.  In coming to its decision, the Supreme Court of Canada expressed some sympathy for this argument but said that “any such change in the law falls not to the courts, but rather to the legislature to carry out.”  The court pointed out that in Australia, the legislature had changed the law by providing that a party may recover damages arising out of arrest of property if the arrest was obtained “unreasonably and without good cause”.  

 Given that the main rational for allowing the arrest of ships is to compensate for the difficulty of enforcing judgements in other countries, it seems to me that as a matter of policy it may not be necessary to give claimants the power of arrest to allow them to enforce judgements against vessels which do not normally leave Canada.  For example, few if any of the 202 fishing vessels named in the Alaska Ferry litigation fished in waters other than the coastal waters of B.C.   Accordingly, it would not have been an undue hardship  to require the State of Alaska to wait until after it obtained judgement to execute against the fishing vessel involved in the blockade.   As a consequence of its right of  arrest, as the herring season approached, the State of Alaska was able to exert an unfair amount of pressure on the vessel owners to settle the claim.  

 In my submission, the time may be ripe to consider excluding domestic fishing vessels from the in rem jurisdiction of the court.

Brad Caldwell is a Vancouver based lawyer and former fisher who’s practise is primarily devoted to fisheries and maritime matters.

Editor's note: For more up-to-date cases see the Practice section of both the Fisheries Page and the Case digest section of admiraltylaw.com.