In Rem Actions and Arrest - Case Summaries
The database contains 72 case summaries relating to In Rem Actions and Arrest. The summaries are sorted in reverse date order with 20 summaries per page. If there are more than 20 summaries, use the navigation links at the bottom of the page.
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Breach of Contract of Sale - Specific Performance - Setting Aside Arrest
Gleason v. The Dawn Light, 1997 CanLII 5118 1998 CanLII 7318
This was a summary judgment application to dismiss the Plaintiff's claim for specific performance of an agreement of purchase and sale of the Defendant vessel and an application to set aside the arrest of the vessel. The Plaintiff alleged that the Defendant had agreed to sell the Defendant vessel to him but then sold it to the intervenor. The motions Judge held the evidence did not show the vessel was unique or irreplaceable and further held that the fact the vessel had been sold to a bona fide purchaser for value without notice was a strong discretionary reason not to grant specific performance. With respect to the application to set aside the arrest of the vessel, the Motions Judge held that the arrest could not be set aside as the Plaintiff still had a claim in damages for breach of contract. On appeal, the Court of Appeal held that the arrest ought to be set aside because the effect of the sale to a bona fide purchaser for value was that the vessel could not be used to satisfy any potential award of damages.
Breach of Agency Contract
Scandia Shipping Agencies Inc. v. Alam Veracruz (The), 1997 CanLII 5837
The issue in this case was whether an action In Rem is available against all property of a Defendant or only against the property that is the subject of the action. The underlying action involved a claim by the Plaintiff agent alleging that the Defendant shipping line had wrongfully terminated the brokerage agreement between them. The agent commenced In Rem proceedings and arrested the bunkers and freight of the "Alam Veracruz". Before the Prothonotary and on appeal, the Court struk out the In Rem action and set aside the arrest. The Court held that an In Rem action was available only against property that is the subject of the action. The Court further held that since the action was merely for breach of a brokerage contract there was no In Rem action and no right of arrest.
Arrest - Application to Set Aside
Viktor Overseas Ltd. v. The "Filomena Lembo" et.al., 1997 CanLII 5733
This was an application to set aside a Warrant for arrest in a claim for unpaid repairs to the vessel. The shipowner argued that the Plaintiff had no right to arrest because the repairs were ordered by the bareboat charterer who had no authority to contract on behalf of the owner. However, the Court noted that the Statement of Claim alleged that the repairs were ordered on behalf of the owner and that the repair contract itself stated that the repairs were ordered on behalf of the owner. In the result, the Court dismissed the application.
Amican Navigation Inc. v. The "Necat A" et al., 1997 CanLII 6185
This was an appeal from the Prothonotary. The original motion was by the shipowner to reduce the amount of bail that had been posted to secure the release of the ship from arrest. The underlying action was for breach of charterparty. The Plaintiff alleged the Defendant failed to provide a ship to load a cargo the Plaintiff had undertaken to transport. The Plaintiff claimed damages of $337,000.00 for loss of profit, $130,000.00 for Suez Canal fees and $114,000.0 for the balance owing on the hire statement. Bail was initially given in the amount of $605,000.00. The Prothonotary reduced this bail to $124,000.00 holding that the Plaintiff was not entitled to bail in respect of the loss of profits claim or in respect of the canal fees. On appeal, the Court reinstated bail for the loss of profits claim holding that the Plaintiff was entitled to bail based on its best arguable case and that speculative calculations should not be used to determine this. The Court did, however, find that the best arguable case on the loss of profits claim was 30% of revenues rather than the 60% the Plaintiff claimed. With respect to the canal fees, the Court held that the fact that the Plaintiff had not paid these fees was not relevant as the Plaintiff was obliged to pay them and, in fact, was being sued for them. The Plaintiff was held to also be entitled to bail in respect of these fees.
Armada Lines Ltd. v. Chaleur Fertilizers Ltd.,  2 SCR 617
This important case concerns when an arresting party is liable for wrongful arrest. In a ground breaking decision reported at  1 F.C. 3, the Federal Court of Appeal held that an arresting party could be liable for wrongful arrest merely upon a finding that the arrest was "illegal" or "without legal justification". The Supreme Court of Canada, however, reversed this ruling and re-established the rule from The "Evangelismos"(1858) 14 E.R. 945, that damages for wrongful arrest may only be awarded where the arresting party acts with either bad faith or gross negligence. The Supreme Court noted that a change in such a long standing rule should only be made by the legislature.
Renewal of Writ and Sisterships
Belgo Nineira Commercial Exportadora S.A. et. al. v. Hadley Shipping Co. Ltd. et.al., 1997 CanLII 5133
In this matter the Plaintiff had commenced action against the wrong-doing vessel and three sister ships. One of the sister ships had been in the jurisdiction but it had not been served by the Plaintiff who subsequently obtained an order extending the time for service of the Statement of Claim. The same sister ship later returned to the jurisdiction. The Defendant brought a motion to set aside the time extension and strike the Statement of Claim as against that sister ship. Counsel agreed that the time extension should be set aside but could not agree on whether the Statement of Claim should be struck as against that sister ship. The Prothonotary noted that a Plaintiff could renew a Statement of Claim as against only those ships that had not come in the jurisdiction. The Prothonotary ordered that the Plaintiff file an amended Statement of Claim deleting the sister ship from the style of cause.
Domtar Inc. v. Lineas De Navigation Gema S.A. et.al., 1997 CanLII 5004
This was a motion by the Defendant shipowner to set aside an arrest and strike the in rem portions of the claim. The Plaintiff's action was for breach of a booking note contract. The Defendant shipowner argued that the vessel could not be arrested as it was not a party to the booking note contract. The shipowner argued the booking note was between the Plaintiff and the other Defendant. The Court, however, noted that there was some evidence suggesting a close relationship between the shipowner and the other Defendant. The Court held that it was not obvious on the evidence that the shipowners were not liable in contract to the Plaintiff and refused to set aside the warrant or dismiss the in rem claim.
In Rem Actions - Arrest - Charterparty
Margem Chartering Co. Inc. v. Cosena SRL and The "Bocsa",  2 FC 1001
This was a motion by the shipowner to strike out the In Rem Statement of Claim and set aside the arrest . The Plaintiff had entered into a charter party agreement with the "disponent owner" of the ship for the carriage of coal. Upon arrival at the port of loading the vessel was detained by Coast Guard and was unable to load her cargo. The Plaintiff then commenced the action against the owners and arrested the ship for the breach of charter party. The main issue in the case was whether the charterparty was with the shipowner or with the "disponent owner". Upon reviewing the evidence the Prothonotary held that the charterparty was with the "disponent owner" and struck out those portions of the Statement of Claim alleging breach of contract by the shipowner. The Prothonotary, however, did not set aside the warrant for arrest as the Plaintiff had a possible cause of action against the shipowner in tort and such a claim was enforceable In Rem pursuant to section 22(2)(i) of the Federal Court Act.
Arrest and Equipment
Pacific Tractor Rentals (V.I.)Ltd. v. The "Palaquin", (June 14, 1996) No. T-2616-95
The issues in this case were whether an arrest warrant extends to property taken off a vessel prior to arrest and whether repairs to a vessel under arrest paid for by the vessel's owner form part of the arresting party's security. The case concerned machinery owned by the Plaintiff that had been lost overboard from the "Palaquin" during alleged heavy weather. The heavy weather also damaged the engine of the "Palaquin". Subsequent to the accident, but before action had been commenced, the engine was removed from the "Palaquin" for repair and the electronics were removed for safekeeping. A Warrant for Arrest was served on the vessel after the removal of these items. The Plaintiff brought a motion before the Prothonotary for an order that the arrest warrant extended to the engine and electronics removed from the vessel. The Court held that the arrest warrant extended to items that had been removed from the ship before the arrest. A second aspect of the case concerned whether the increase in the value of the ship as a consequence of the engine repairs would benefit the Plaintiff. The Court held that repairs done and paid for by the owner subsequent to the accident, but before arrest, increased the value of the res to the benefit of the arresting party. However, the value of repairs done and paid for by the owner after the arrest did not form part of the arresting party's security.
Elecnor S.A. v. The "Soren Tourbo" et.al.,  3 FC 422
This case addresses the issue of whether the Plaintiff must name all sisterships in a Statement of Claim. The action was originally commenced on January 25, 1995, against the ship "Soren Turbo". The Statement of Claim was renewed on January 15, 1996 for a further twelve months. This renewal was, however, subject to the proviso that if the "Soren Tourbo" had been within the jurisdiction, the Order could be set aside. The owner subsequently moved to set aside the Order on the grounds that a sistership of the "Soren Tourbo" had been within the jurisdiction during the initial currency of the Statement of Claim. The owner argued that the Plaintiff's failure to include the sistership in the Statement of Claim and to serve her while she was in the jurisdiction disentitled it to a renewal of the pleading. The Prothonotary held, however, that the sistership provisions in the Federal Court Act and Rules were permissive and not mandatory. The fact that a sistership not named in the Statement of Claim had been in the jurisdiction did not disentitle the Plaintiff to a renewal of the pleading.
Right to Re-Arrest
Atlantic Shipping (London) Ltd v. The Captain Forever, (June 12, 1995), No. T-1165-95 (F.C.)
In this matter the Plaintiff had commenced arbitration proceedings in England for reimbursement of moneys paid for bunkers under a charter party, and had negotiated security for the bunkers claim. The Plaintiff later commenced action for breach of charter party and for the bunkers claim. The Plaintiff sought a much higher sum as security. The issue in the case was whether the Plaintiff was entitled to re-arrest the ship and to claim a higher sum as security. The Court held that there was nothing preventing the Plaintiff from doing so in respect of the claims not included in the arbitration.
Summary Judgement - Sale of Bunkers
Feoso Oil Limited v. The "Sarla",  3 FC 68
This was a motion for summary judgment involving a claim by the Plaintiff for non-payment of an invoice relating to bunkers supplied to the Defendant ship. The ship had been under a time charter although it was not clear whether the charter had come to an end before the bunkers were ordered. The Defendant owners resisted the claim and the motion for summary judgment on the grounds that the bunkers were not ordered by or on behalf of the owners. The Court of Appeal re-affirmed the general principle that an action in rem cannot be sustained unless the bunkers (or other necessaries) were supplied to the ship at the request of owners or by someone acting on their behalf and with authority to bind them. The Court held, however, that the evidence as to who ordered the bunkers was contradictory and that there was an issue of credibility that could not be resolved on a motion for summary judgment. In result, the Court held that there was a genuine issue for trial.
Effect of Service on Ship
Key Marine Industries Ltd. v. The "Glen Coe", (1995), 92 F.T.R. 313, (F.C.T.
The Plaintiff in this matter applied for default judgment against the Defendants. The Plaintiff had effected service of the Statement of Claim on the ship but had not served the owners and no Statement of Defence had been filed. The filing of a defence would have amounted to an appearance in the action by the owners and would have converted the In Rem action into an In Personam action. The Court held that because the owners had not been served and had not filed a defence the Plaintiff was not entitled to judgment against them.