Cameco Corporation v. The MCP Altona

In Admiralty Practice, Judicial Sales on (Updated )

Précis: A party was ordered to pay the costs of a priorities hearing, an unusual order as normally costs are a charge on the funds in court.

The “MCP Altona” was sold by judicial sale following a spill of yellowcake uranium in one of her holds. Following the sale, the mortgagee of the vessel brought an application for payment out of the proceeds of sale. Cameco, the owner of the uranium cargo, defended that motion arguing that it had priority over the mortgagee. The court ultimately determined (at 2013 FC 23) that the mortgagee had priority and ordered payment of the proceeds to it. The mortgagee now moved for costs from Cameco on an enhanced basis.

Decision: The mortgagee is entitled to its costs against the cargo owner based on the tariff.

Held: The procedure in priorities disputes is similar to that for applications. Each party is to file written submissions supported by affidavits and documents to be relied on. Parties are entitled to cross-examine affiants. Although Cameco was unsuccessful in challenging the mortgagee’s priority, it had legitimate points. Further, although the issues were complicated and interesting, for the reasons given in Universal Sales, Ltd v Edinburgh Assurance Co, 2012 FC 1192, costs should be based on the tariff.

Comment 1: In Universal Sales, Ltd v Edinburgh Assurance Co, 2012 FC 1192, the court held that there must be reprehensible conduct to justify an order for enhanced costs.

Comment 2: The decisions addressing the taxation of the costs can be found at 2013 FC 1263 and 2013 FC 1264. An appeal from the taxation can be found at 2014 FC 255