Date: 20040302
Docket: T-468-03
Citation: 2004 FC 304
Ottawa, Ontario this 2nd day of March 2004
Present: The Honourable Madam Justice Heneghan
BETWEEN:
NORTHWEST DELTA YACHT SERVICES INC.
Plaintiff
and
SOVEREIGN YACHTS (CANADA) INC.,
MR. & MRS. STEPHEN STRIEBEL,
THE OWNERS AND ALL OTHERS INTERESTED IN THE
MOTOR YACHT CHAIRMAN, also known as
SOVEREIGN HULL NUMBER 7644
Defendants
REASONS FOR ORDER AND ORDER
INTRODUCTION
[1] The Defendant Stephen Striebel (the "Defendant") seeks the entry of summary judgment against Northwest Delta Yacht Services Inc. (the "Plaintiff") pursuant to the Federal Court Rules, 1998 (the "Rules"). He seeks an Order dismissing the action against all Defendants except Sovereign Yachts (Canada) Inc. ("Sovereign") and an Order directing the payment out of the sum of $160,000.00 plus interest, representing the balance of the money paid into this Court in cause T-687-02.
FACTS
[2] The Plaintiff is a body corporate incorporated under the laws of British Columbia and engaged in the business of ship construction and repair. According to the Statement of Claim that was issued on March 24, 2003, the Plaintiff installed teak decking to the Motor Yacht "Chairman" pursuant to an agreement with the Defendant Sovereign. The Plaintiff alleges that it was not paid for the supply of goods and services, described in the Statement of Claim as "necessaries" within the meaning of subsection 22(2)(m) of the Federal Courts Act R.S.C. 1985, c. F-7, as amended (the "Act"), to a value of $79,057.00.
[3] The Plaintiff commenced its action both in personam against the individual Defendants and in rem against the Motor Yacht "Chairman". According to the affidavit of Mr. Stephen Striebel filed in support of this motion, service of the Statement of Claim on his behalf was accepted by his counsel on May 9, 2003. A Defence and Counterclaim were served and filed upon the Plaintiff on May 9, 2003. Service of the Statement of Claim on behalf of Mrs. Striebel or the Defendant Yacht has not been admitted or proven by way of affidavits of service.
[4] In his Defence, Mr. Striebel pleads that the Plaintiff has no cause of action against him in the absence of a contractual relationship and that the work giving rise to this action was done pursuant to a contract between the Plaintiff and Sovereign.
[5] The materials filed by the Defendant in support of this motion consist of an affidavit from the Defendant, as well as written representations stating the legal issues and arguments. The Plaintiff also filed a motion record, including the affidavit of Mike Pongracic sworn on August 15, 2002 and the affidavit of J.D. Duncanes sworn on August 12, 2002, both originally filed in cause T-687-02. The Plaintiff filed an additional motion record, with leave, on October 23, 2003; that document included the further affidavit of Mike Pongracic, sworn October 22, 2003.
[6] In his affidavit, the Defendant outlines the history of his involvement with the Defendant Motor Yacht "Chairman". He entered into a contract in June 2000 for the construction of a yacht, the Motor Yacht "Chairman". The Defendant executed a ship's mortgage in a form pursuant to the Canada Shipping Act, R.S.C. 1985, c. S-9, as amended, to secure payment of a current account in connection with the construction of the yacht. That mortgage was registered as Mortgage "A" at the Registry of Shipping, Vancouver, British Columbia.
[7] Problems arose with completion of the construction contract and on May 29, 2002, Mr. Striebel served a "Notice of Taking of Possession of Sovereign Hull Number 7644 by the Mortgagee". Ultimately, the Yacht was delivered to the Defendant in international waters between the Province of British Columbia and the State of Washington, United States of America, together with a duly executed Bill of Sale.
[8] On May 29, 2002, an action in personam and in rem was commenced in this Court by Mr. and Mrs. Stephen Striebel, as Plaintiffs, against Sovereign Yachts (Canada) Inc., the owners and all others interested in the Motor Yacht "Chairman", also known as Sovereign Hull Number 7644. The Yacht was arrested on May 29, 2002 pursuant to a warrant of arrest issued in cause T-687-02.
[9] The litigation history in that file is lengthy. The yacht was in the possession of Sovereign at the time of its arrest and Mr. Striebel subsequently applied to the Court for an order to have the Sheriff attend at the vessel and take it into possession, pending further Order of the Court. That Order was granted by Prothonotary Hargrave on April 29, 2002 and a motion by Sovereign for reconsideration was dismissed in part on May 6, 2002. An Order was issued on March 8, 2002.
[10] The Plaintiffs then sought an Order for the removal of the yacht from the premises of Sovereign to those of Arrow Marine Services Inc. for the completion of construction, by Arrow and other sub-contractors. An Order to that effect, with conditions, was granted on May 6, 2002 and an Order was issued, with directions, on May 8, 2002.
[11] Sovereign appealed the Order of Prothonotary Hargrave in favour of the Plaintiffs Striebel and that appeal was heard before Justice Blais on May 14, 2002. By Order dated May 15, 2002, the appeal was dismissed. Reasons for Order were filed on May 28, 2002.
[12] Then, on May 16, 2002, Northwest filed a Notice for Caveat Release in cause T-687-02. Northwest took no further steps in this action, T-687-02, except to appear before the Court on August 19, 2002, upon the hearing of a motion brought by the Plaintiffs Striebel, seeking an Order to fix the amount of bail, if any, to be provided to secure the claim of the Defendant Sovereign and any caveators.
[13] The motion for bail was granted. By Order issued on August 27, 2002, Prothonotary Hargrave ordered that total bail was set at $1,000,000.00 U.S., with the amount of $160,000 Canadian, including interest and costs, to secure the claim of Northwest as Caveator. The amount of $840,000.00 was to secure the claim, including interest and costs, of Sovereign. The Order was subsequently amended, on August 29, 2002, to reflect technical changes that did not affect the substance of the Order, including a correction to show that the bail was $1,000,000.00 Canadian.
[14] The Order of August 27, 2002 provided, as well, for the delivery of the Defendant Sovereign Hull Number 7644 to the Plaintiffs Striebel in international waters between British Columbia and the State of Washington, together with a duly executed Bill of Sale to transfer ownership. That occurred on or about October 2, 2002. A copy of the Bill of Sale is attached as Exhibit "D" to the Defendant's Affidavit filed in support of this motion.
[15] Sovereign appealed from the Order of August 27, as amended. Following a hearing on September 19, 2002, before Justice Gibson, the appeal was dismissed. Reasons for Order were issued on September 23, 2002. On September 27, 2002, the Plaintiffs Striebel tendered payment into this Court of bail in the amount of $1,000,000 and a release was issued from arrest of the Defendant Sovereign Hull Number 7644.
[16] Further interlocutory motions were brought by the Plaintiffs Striebel as part of the pre-trial process in cause T-687-02. On February 3, 2003, Prothonotary Hargrave granted a motion by former counsel for the Defendant to be removed as solicitor of record. By further Order dated February 24, 2003, the counterclaim of Sovereign was stayed pending appointment of a solicitor for the Defendant and the counterclaim was deemed to be dismissed if a solicitor were not appointed by April 25, 2003, with the further proviso that upon failure to comply with the Order by April 25, 2003 that judgment would issue in favour of the Plaintiffs.
[17] The Defendant Sovereign failed to comply with the Order of February 24, 2003 and by Order of May 20, 2003, the counterclaim was dismissed and judgment granted in favour of the Plaintiffs, with damages to be determined by a reference. Further, the amount of $840,000, together with interest, was ordered to be returned to counsel for the Striebels' in trust. The balance of the bail fund, that is $160,000, and interest, as security for the claim of Northwest as Caveator, was to remain on deposit with the Court pending further Orders. The sum of $840,000, together with accrued interest, was paid out by the Registry of this Court at Vancouver, on June 9, 2003.
[18] This is the factual background to the present motion for summary judgment. As of October 24, 2003, when the motion was heard, Northwest had filed a Caveat Release in cause T-687-02 and commenced the present action. It had not obtained a judgment against any of the Defendants and according to the Index of Recorded Entries, a Defence, together with a counterclaim, has been filed only on behalf of the Defendant Striebel.
SUBMISSIONS
i) The Defendant's Submissions
[19] The Defendant raises four arguments. First, he says that the Plaintiff has no claim in contract against him since there was no contract between those parties for the provision of the work that is the subject of the action. That work was done on behalf of Sovereign, the party with whom the Defendant had contracted for the construction of the Motor Yacht "Chairman". The Defendant submits that no breach of contract is pleaded by the Plaintiff and in fact, there was no contract between the Defendant and the Plaintiff.
[20] Second, the Defendant argues that there is no claim in rem by the Plaintiff against the Defendant Motor Yacht because beneficial ownership of the Yacht had changed prior to the commencement of this action and after the work was done. Here, the Defendant relies on section 43(3) of the Federal Court Act, supra and the Mount Royal/Walsh Inc. v. "Jensen Star" (The), [1990] 1 F.C. 199 (C.A.).
[21] Third, the Defendant submits that no in rem action lies against the Defendant Motor Yacht because the ship is not within the jurisdiction of the Court and the Statement of Claim was never served upon it when the ship was in Canada. In this regard, the Defendant relies on "Mesis" (The) v. Louis Wolfe & Son (Vancouver) Ltd., [1977] 1 F.C. 429 where the Court held that a Statement of Claim in an action in rem cannot be served ex juris.
[22] Finally, the Defendant says that even if this action had been commenced prior to October 2, 2002, the Plaintiff's claim would still be subordinate to his position as registered mortgagee of the Defendant ship.
ii) The Plaintiff's Submissions
[23] The Plaintiff argues that it has a good claim against the Defendant for the supply of necessaries, that the facts show that the Defendant was at all material times the "beneficial owner" of the Defendant Yacht, that it can sue monies on deposit in this Court in another action involving the Defendant ship, and that equity supports its position.
[24] Specifically, the Plaintiff refers to the contract for the construction of the Defendant Yacht and says that consistently, the Defendant acted as though he were the owner, supervising the completion of construction and appointing his own representative as inspector.
[25] The Plaintiff also argues that the mortgage entered into between the Defendant, as mortgagee and Sovereign, as mortgagor, to secure the completion of the vessel, is impeachable. The Plaintiff says that the mortgage does not adequately describe the parties nor the nature of the amount secured under it. It also argues that the mortgage appears to have been "amended" after it was executed.
[26] Next, the Plaintiff submits that its action against the Defendant ship is not affected by the absence of service of the Statement of Claim upon that party. Referring to Rule 479(1)(d) of the Rules, the Plaintiff argues that it is entitled to sue the sum of money that was deposited as security, to release the Defendant ship from arrest.
[27] Finally, the Plaintiff submits that it has raised sufficient questions about the status of the Defendant Mr. Striebel, the circumstances concerning the contract for the construction of the Defendant ship and the related mortgage, and the equities of its position as an unpaid creditor, to show that summary judgment is not warranted and that the action should proceed to trial.
ANALYSIS
[28] The Defendant bases his motion upon the Federal Court Rules, 1998, Rules 213 et seq., dealing with summary judgment. The principles governing the grant of summary judgment are summarized in Granville Shipping Co. v. Pegasus Lines Ltd. S.A., [1996] 2 F.C. 853, at pages 858-859. In this case, the following principles are instructive:
...
2. there is no determinative test (Feoso Oil Limited v. Sarla (1995), 184 N.R. 307 (F.C.A.)) but Stone J.A. seems to have adopted the reasons of Henry J., in Pizza Pizza Ltd. v. Gillespie (Pizza Pizza) (1990), 75 O.R. (2d) 225 (Gen. Div.). It is not whether a party cannot possibly succeed at trial, it is whether the case is so doubtful that it does not deserve consideration by the trier of fact at a future trial;
...
5. this Court may determine questions of fact and law on the motion for summary judgment if this can be done on the material before the Court (this is broader than Rule 20 of the Ontario Rules of Civil Procedure) (Patrick);
...
7. in the case of a serious issue with respect to credibility, the case should go to trial because the parties should be cross-examined before the trial judge (Forde, supra, and Sears, supra). The mere existence of apparent conflict in the evidence does not preclude summary judgment; the court should take a "hard look" at the merits and decide if there are issues of credibility to be resolved (Stokes, supra)."
i) Defendant Stephen Striebel
[29] Insofar as the Defendant Striebel is concerned, the determining question is whether the Plaintiff has a good cause of action against him, on the basis of the facts alleged, the evidence adduced and the relevant law. The Plaintiff does not allege that it has a contractual relationship with the Defendant but rather, that the Defendant acted at all times as if he was the owner of the Defendant Yacht and accordingly, he should be responsible to pay the Plaintiff's account. The Plaintiff argues that notwithstanding the execution of a ship's mortgage in which Sovereign is described as the registered owner and mortgagor, the Defendant Striebel was always the owner of the Yacht. However, no authority is cited to support that argument.
[30] The Plaintiff refers to the affidavit of Mike Pongracic, dated October 22, 2003 filed as part of its Motion Record, in which Mr. Pongracic says the following:
2. That prior to the arrest of the vessel, I discussed payment of my outstanding account with J.D. Ducanes, agent for the owners, Mr. & Mrs. Stephen Striebel, because I was concerned that I had not received further funds from Soverign [sic] Yachts (Canada) Ltd.
3. That J.D. Ducanes stated that "the owner does not have any beef with us. [sic] and not to worry that we will get paid for our work".
4. That based on that assurance, we continued working on the vessel including redoing the teak decking for the owner at the request of an insurance company for the company which provided faulty decking compound. We also finalized our work after the arrest of the vessel for which work we were paid for by the owners, Mr. & Mrs. Stephen Striebel. The amount set out in the Statement of Claim remains due and owing by them.
[31] Here, Mr. Pongracic is suggesting that there was an undertaking by the Defendant to pay. The contents of this affidavit are at odds with his statements in an earlier affidavit, sworn on August 15, 2002 and initially filed in cause T-687-02. In this affidavit, Mr. Pongracic deposes that the contract for the work on the Defendant Yacht was with Sovereign:
...
2. That on or about the 5th day of June 2001, I quoted decking and other woodwork to Sovereign Yachts (Canada) Inc. respecting a 120 foot motor yacht number 7644 being in an [sic] "Chairman". A copy of the quotation without schedules is attached as Exhibit "A".
3. That the quotation was accepted by Sovereign Yachts (Canada) Inc. and work was commenced on the "Chairman".
...
6. That on September 27, 2001 that I contacted Sovereign Yachts (Canada) Inc. on numerous occasions requesting payment of the sum of $25,000.00 which said payment was finally received by way of two payments, one payment in the sum of $10,000.00 in the month of March and a further payment in the sum of $15,000.00 in the month of April.
...
14. That as of this date I have completed the contract but have not invoiced the Sovereign Yachts (Canada) Inc. as I will be required to invoice for GST and the law requires Northwest to forthwith. The company does not have the means to pay the GST payment unless it is in receipt of monies from Sovereign Yachts (Canada) Inc.
[32] There is a contradiction between the sworn statements of Mr. Pongracic in his affidavits of August 15, 2002 and October 22, 2003. This discrepancy undermines the probative value of the latter affidavit, notwithstanding the lack of cross-examination of Mr. Pongracic. In my opinion, the different statements suggest that the Plaintiff is now attempting to create the basis of a claim against the Defendant Striebel but there is no reliable evidence to support such a claim. Indeed, this view of the facts is denied by the Defendant Striebel.
[33] In his affidavit filed in support of this motion, the Defendant deposes as follows at paragraphs 9, 11, 12 and 13:
9. All of the work done by Northwest in respect of the Yacht was done prior to October 2, 2002, while the owner was Sovereign.
...
11. I was not aware that Sovereign had not paid Northwest until Northwest filed a Caveat Release in Action No. T-687-02 on May 13, 2002. A copy of that Caveat Release is attached as Exhibit "F".
12. I was surprised as to the amount of the claim of Northwest as I had advanced to Sovereign US$40,000.00 in respect of extra work to be done on the Yacht by Sovereign and apparently Sovereign never paid that amount to Northwest.
13. The reason or excuse Sovereign gave for not paying Northwest is shown in the letter from the then solicitor for Sovereign, a copy of which is attached as Exhibit "G".
[34] The letter referred to in paragraph 13 is from former counsel for Sovereign to counsel for Northwest and reads, in part, as follows:
Sovereign acknowledges entering into a contract with Northwest calling for payment of $136,400 of which $25,000 has been paid.
Sovereign claims as a set-off against the amount owing under the contract, $2,596.80 in respect of damage to the vessel caused by your client while it performed its work. Sovereign is owed money by Northwest for moorage and in respect of defective work performed on the M/Y Waterford. These claims are quantified in the enclosed invoice no. SOV-707, which also identifies contingent claims which may be advanced by Sovereign against Northwest.
[35] I agree with the Defendant's argument that there is no contract nor breach of contract pleaded by the Plaintiff. There is no evidence to support the existence of a contractual relationship between the Plaintiff and the Defendant. In Feoso Oil Ltd. v. "Sarla" (The), [1995] 3 F.C. 68 (C.A.), the Federal Court of Appeal commented upon the necessity for a claim in contract against the owners of a ship to support an action in rem, at page 78 as follows:
There is a further refinement. It is well established that the fact that beneficial ownership has not changed since the necessaries were supplies is not in itself sufficient to support a statutory right in rem. The cases are all to the same effect, that it is only where the owners of a ship have incurred a debt for necessaries supplied that the creditor acquires a right to proceed in rem against their ship.
The Statement of Claim refers only to a contract between the Plaintiff and Sovereign for the installation of the decking. The affidavits of Mr. Pongracic do not assist the Plaintiff and do not raise a triable issue vis-à-vis the Defendant.
[36] I reject the Plaintiff's argument that the Defendant Striebel was, at all material times, the beneficial owner of the Defendant Yacht. That argument is not supported by the evidence and in this regard, I refer to the construction contract and mortgage document that are attached as Exhibits "A" and "B" to the affidavit of Stephen Striebel filed in support of this motion. The building contract describes Sovereign as the "Builder" and the Defendant Striebel as the "Buyer". This contract refers to a mortgage as Exhibit "F" and this document authorizes the mortgagee, that is the Defendant Striebel, to pursue all remedies available at law, in addition to those available under the construction contract in the event of default in the building of the Yacht.
[37] Upon the basis of the material filed by the Defendant Striebel and the Plaintiff upon this motion for summary judgment, it appears that the Defendant Striebel pursued his available remedies relative to the construction of the "Chairman" first, by executing a notice of possession as mortgagee and second, by commencing the action in cause T-687-02. It appears that Mr. Striebel was acting as a mortgagee, not as an owner, when he commenced that action.
[38] It further appears that the Defendant Striebel obtained possession of the "Chairman", pursuant to the Order of Prothonotary Hargrave that provided for the delivery of the Yacht, together with a duly executed bill of sale. This was not a judicial sale but an Order for the delivery of the Defendant Yacht, once bail had been posted in the manner determined by the Prothonotary, after a hearing in which both Sovereign and the Plaintiff were represented. The Reason for Order refers to the participation of the Plaintiff; see Striebel v. Sovereign Yachts (Canada) Inc. (2002), 222 F.T.R. 187 (Fed. Proth.).
[39] The evidence submitted upon this motion for summary judgment does not show a basis for personal liability of the Defendant Striebel for the claim of the Plaintiff. The evidence shows that the Defendant Striebel was the mortgagee pursuant to a ship's mortgage in which Sovereign is described as the "Registered owner/mortgagor". The evidence further shows that the Defendant Striebel received a bill of sale, on October 2, 2002, executed on behalf of Sovereign as the seller and Striebel as the purchaser. While there is no clear evidence as to the origin of that bill of sale, it purports to convey title in the following terms:
I (we) do hereby sell to the buyer(s) named above, the right, title and interest identified in Block 4 of this Bill of Sale, in the proportion specified herein.
Seller(s) warrant(s) that buyer shall receive from seller good and marketable title to the vessel, free and clear of all liens, mortgages and other encumbrances of any kind and nature. Vessel is sold together with an equal interest in the masts, bowsprit, sails, boats, anchors, cables, tackle, furniture, and all other necessaries thereto appertaining and belonging.
[40] In light of the evidence before me, that is the affidavit evidence, submitted by both the Defendant and the Plaintiff, I am satisfied that the Defendant Striebel has shown that there is no "genuine issue" for trial arising against him, arising from the Plaintiff's Statement of Claim. The Plaintiff has not shown that it has a reasonable cause of action against this Defendant. There are no issues of credibility relative to the evidence of the Defendant.
[41] The Plaintiff is not entitled to raise a collateral attack on the status of the mortgage granted by Sovereign to the Defendant Striebel for it was not a party to that mortgage and otherwise has provided no evidence or argument as to why it should be allowed to challenge the manner in which the Defendant Striebel acted in serving notice to enter into possession of the Defendant Yacht, pursuant to that mortgage. While impeachment of a ship's mortgage may be relevant in a dispute concerning a right to share in the proceeds of a judicial sale of a ship, see for example Scott Steel Ltd. v. "Alarissa" (The), [1996] 2 F.C. 883 (Proth.); affirmed (1997), 125 F.T.R. 284 (T.D.), that issue does not arise in the present case. There was no judicial sale of the Defendant Yacht and no proceeds of sale were available for distribution.
[42] The Plaintiff did not cross-examine the Defendant Striebel upon his affidavit nor did it advance probative evidence to show any basis upon which personal liability for its claim could be attributed to this Defendant. It has not shown that there are issues of credibility. It has not shown a legal basis for this action. Accordingly, the motion for summary judgment in favour of the Defendant Stephen Striebel will be granted.
ii) Mrs. Stephen Striebel and the Defendant Yacht
[43] The Defendant Striebel also seeks the entry of summary judgment, dismissing this action against Mrs. Striebel and the Defendant Yacht. According to his evidence, the Statement of Claim has not been served upon Mrs. Striebel or the Defendant Yacht. The Defendant Yacht, again according to the Defendant Striebel, is no longer within the jurisdiction of this Court and a Statement of Claim in rem cannot be served ex juris. Further, the Defendant Striebel argues that there are two further problems relative to the Plaintiff's claim against the Defendant Yacht.
[44] First, he argues that in the absence of personal liability of the owner, no action in rem can be advanced against the Defendant Yacht. Second, he submits that where a change in beneficial ownership has occurred between the time the cause of action arose and when the action was commenced, no claim in rem can be pursued against the Defendant Yacht. He relies here on Mount Royal/Walsh Inc. v. "Jensen Star" (The), supra and section 43(3) of the Act.
[45] Finally, the Defendant argues that the time limited for service of the Statement of Claim issued in this matter has expired. In this regard, the Defendant relies on Rule 203(1) which provides that a Statement of Claim shall be served within sixty (60) days after issuance.
[46] The Plaintiff does not deny that it has not served the Defendant Mrs. Striebel or the Defendant Yacht. However, in relation to the latter, it argues that it has a right to "sue" the funds deposited in cause T-687-02, to secure the release of the Yacht from the arrest warrant and caveats filed in that proceeding. In this regard, the Plaintiff relies on Rule 479(1)(d):
| Subject to subsection (2), the statement of claim in an action in rem shall be served
...
(d) in respect of any proceeds paid into court in another proceeding, by filing a certified copy of the statement of claim in that proceeding.
|
|
Sous réserve du paragraphe (2), dans une action réelle, la déclaration est signifiée :
...
(d) si l'action vise le produit d'une vente consigné à la Cour dans une autre instance, par dépôt d'une copie certifiée conforme de la déclaration relative à celle-ci.
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[47] I disagree. Rule 479 deals with the manner in which a statement of claim in rem is to be served and specifically identifies the kinds of property upon which service is to be effected, that is a ship or cargo or other property on board a ship (479(1)(a)); cargo or other property that is not on board a ship (479(1)(b)); freight (479(1)(c)); or any proceeds paid into court in another proceeding. In my opinion, Rule 479(1)(d) refers to the proceeds of a sale, not to money that is deposited to secure the release of property for arrest. In this regard, I refer to Black's Law Dictionary [7th ed. (1999)] at p. 1222 where the word "proceeds" is defined as follows:
proceeds, n. 1. The value of land, goods, or investments when converted into money; the amount of money received from a sale < the proceeds are subject to attachment > . 2. Something received upon selling, exchanging, collecting, or otherwise disposing of collateral. UCC _(1). _ Proceeds differ from other types of collateral because they constitute any collateral that has changed in form. For example, if a farmer borrows money and gives the creditor a security interest in the harvest, the harvested wheat is collateral. If the farmer then exchanges the harvest for a tractor, the tractor becomes the proceeds of the wheat.
[48] The receipt and distribution of proceeds of a Court-ordered sale of a vessel are governed by Rules 490 and 491. Rule 490(4)(b) speaks about the proceeds of a sale, as follows:
| As soon as possible after the execution of a commission referred to in subsection (2), the sheriff shall
...
(b) pay into court the proceeds of the sale; and
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Dès que possible après l'exécution d'une commission visée au paragraphe (2), le shérif :
...
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[49] It is clear from the terms of the Order made by Prothonotary Hargrave on August 27, 2002, as amended, that he was setting the terms of bail, pursuant to Rule 485. That Order provides, in part, as follows:
1. Total bail is set at $1 million (US). Of that amount, the equivalent of $160,000.00 (Canadian) shall go to secure the claim, including interest and costs of North West Delta Yacht Services Inc., as caveator. The balance of the $1 million (US) bail shall go to secure the claim, including interest and costs, of Sovereign Yachts (Canada) Inc. ("Sovereign").
2. Upon bail being posted Sovereign to deliver forthwith to the solicitor for the Plaintiffs an executed bill of sale and an executed builder's certificate. To the extent that Sovereign is unable or unwilling to comply with this provision, in part or in full, within 48 hours of a copy of this Order being delivered to Sovereign's solicitors, West Coast Bailiffs Inc., as an ex officio marshall of this Court, may execute whatever is required as to a bill of sale and/or a builder's certificate.
3. On the bail being posted as aforesaid the caveats against the Chairman, Sovereign Hull Number 7644, are set aside.
4. Upon bail being posted and the caveats being set aside, West Coast Court Bailiffs Inc. shall deliver possession of the Chairman to Mr. and Mrs. Striebel, or to Mr. Striebel, as counsel for the Plaintiffs may advise.
5. Upon bail being posted and the caveats set aside, the Chairman is released from arrest. The insuring requirements set out in the Order of 8 May 2002, as varied 22 May 2002, are then withdrawn.
[50] In Freighters (Steamship Agents) Co. v. "Number Four" (The), [1983] 1 F.C. 852 (C.A.) the Federal Court of Appeal discussed the role of bail, as follows:
... What the respondent obtains by his action in rem in Canada, accompanied by an arrest of the ship, is something entirely different, namely a bail for any judgment which may be rendered to guarantee satisfaction of the alleged lien. In other words, the bail of Rule 1004 replaces the ship.
The bail simply provides a fund upon which a successful plaintiff, after obtaining judgment, may execute that judgment.
[51] In my opinion, the service of a statement of claim in rem pursuant to Rule 479(1)(d) relates to service upon the proceeds of a sale, not upon money deposited by way of bail. The Plaintiff did not submit any authority to the contrary or other view.
[52] Although the Defendant's arguments are meritorious and supported by the jurisprudence, in my opinion, the Defendant Striebel is not entitled to dismissal of this action against Mrs. Stephen Striebel or the Defendant Yacht. Rule 213(2) provides as follows:
| A defendant may, after serving and filing a defence and at any time before the time and place for trial are fixed, bring a motion for summary judgment dismissing all or part of the claim set out in the statement of claim.
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|
Le défendeur peut, après avoir signifié et déposé sa défense et avant que l'heure, la date et le lieu de l'instruction soient fixés, présenter une requête pour obtenir un jugement sommaire rejetant tout ou partie de la réclamation contenue dans la déclaration.
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[53] The plain reading of this Rule makes it clear that a defendant may seek the entry of summary of judgment after serving and filing a defence. The Rule does not provide that a defendant who has served and filed a defence on his own behalf can move to strike an action on behalf of other defendants who have not defended an action. No defence has been served and filed on behalf of these other parties. It is not necessary for me to address the consequences of the Plaintiff's failure to serve these Defendants within the time limited for doing so. At some time, the Plaintiff will undoubtedly receive a Notice of Status Review pursuant to the Rules.
iii) Defendant's Motion for Payment out of Court
[54] The Defendant Striebel also seeks an Order for the payment out to him of the balance of the funds paid into this Court pursuant to the Orders of Prothonotary Hargrave in August 2002. That relief is denied.
[55] As mentioned above, that money was paid into Court in a different proceeding, that is cause T-687-02. It was paid as security to obtain release of the Defendant Yacht from arrest in an independent action. According to Transocean Gateway Corp. v. "West Isle" (The), [1974] 2 F.C. 90 (C.A.), a bail bond is security only in the action in which it is given. I see no difference in principle when the bail is deposited in cash. No authority was cited to show that I have jurisdiction to make such an Order. In my opinion, the motion for payment out, governed by Rule 491, should be brought in the action in which the money was deposited.
CONCLUSION
[56] The motion for summary judgment, on behalf of the Defendant Stephen Striebel, is granted and this action is dismissed against Stephen Striebel, with costs.
[57] The motion for summary judgment dismissing the action against Mrs. Stephen Striebel and the motor Yacht "Chairman", also known as Sovereign Hull Number 7644, is dismissed, no order as to costs.
[58] The motion for an order that the remaining security in the amount of $160,000.00 plus interest, paid into Court in cause T-687-02, is dismissed, no order as to costs.
ORDER
The motion for summary judgment, on behalf of the Defendant Stephen Striebel, is granted and this action is dismissed against Stephen Striebel, with costs.
The motion for summary judgment dismissing the action against Mrs. Stephen Striebel and the motor Yacht "Chairman", also known as Sovereign Hull Number 7644, is dismissed, no order as to costs.
The motion for an order that the remaining security in the amount of $160,000.00 plus interest, paid into Court in cause T-687-02, is dismissed, no order as to costs.
"E. Heneghan"
J.F.C.
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-468-03
STYLE OF CAUSE: Northwest Delta Yacht Services Inc. v. Sovereign Yachts (Canada) Inc. et al
PLACE OF HEARING: Vancouver, B.C.
DATE OF HEARING: October 24, 2003
REASONS FOR ORDER
AND ORDER: Heneghan, J
DATED: March 2, 2004
APPEARANCES:
Mr. Wayne Ryan FOR PLAINTIFF
Mr. David F. McEwen FOR DEFENDANT - Mr. Stephen Striebel
SOLICITORS OF RECORD:
Piters & Co. FOR PLAINTIFF
McEwen Schmitt FOR DEFENDANT - Mr. Stephen Striebel
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