Date:
20130812
Docket:
T-1106-12
Citation: 2013
FC 864
Ottawa, Ontario,
August 12, 2013
PRESENT: The
Honourable Mr. Justice Roy
BETWEEN:
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ADMIRALTY ACTION IN REM
AND IN PERSONAM
LAKELAND BANK
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Plaintiff/Cross-Defendant
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and
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THE SHIP “NEVER E NUFF”,
HULL NO. DNAZ8012C303
and
PATRICK SALVAIL SAINT‑GERMAIN
and
LOCATION HOLAND (1995) LTÉE
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Defendants/Cross-Plaintiffs
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and
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BREEN P. McMAHON
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Defendant
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AND BETWEEN
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THE SHIP “NEVER E NUFF”,
HULL NO. DNAZ8012C303
and
PATRICK SALVAIL SAINT‑GERMAIN
and
LOCATION HOLAND (1995) LTÉE
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Plaintiffs in Warranty
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REASONS FOR JUDGMENT
AND JUDGMENT
[1]
The
plaintiff, Lakeland Bank is an American banking institution. It believes it is
entitled to a summary judgment, in accordance with Rule 213 of the Federal
Courts Rules, SOR/98-106 (the Rules).
[2]
The
plaintiff claims that the rights over a vessel, the “Never E Nuff” (the vessel),
are uncontested. It seeks to execute on its in rem rights and dispose of
the vessel in a prompt manner.
[3]
For
the reasons that follow, the motion for summary judgment is dismissed.
I. Facts
[4]
For
the purpose of the motion, the plaintiff offers the affidavit of one of its
vice-president who deposes on matters that have occurred in the United States of America.
[5]
It
would appear that the plaintiff entered into an agreement with one Breen
McMahon, an American citizen of the state of New York, for the purchase of the
vessel. Mr. McMahon would have entered into a First Preferred Ship’s Mortgage
with the plaintiff on January 17, 2007, in New York State.
[6]
Patrick
Salvail Saint-Germain and Location Holand (1995) Ltée (the defendants), did not
take part in the transaction granting the plaintiff the First Preferred Ship’s
Mortgage.
[7]
Without
the knowledge of the plaintiff, Mr. McMahon would have indicated that he
thought he had sold the vessel to one “Patrick” but, in fact, he would have sold
the vessel to Location Holand (1995) Ltée. It would appear that the sale took
place in April 2007. Mr. McMahon would have ceased to make the loan payments to
the plaintiff in March 2008.
[8]
The
plaintiff proceeded to obtain a judgment in default against Mr. McMahon in the
United States District Court, Northern District of New York. The purported
judgment, bearing the date of August 24, 2010, is for an amount of more than
USD $190 000. It allows the plaintiff to take possession of the vessel and
dispose of it. The problem was that Mr. McMahon had disposed of the vessel,
which was in a jurisdiction outside the United States.
[9]
The
plaintiff arrested the vessel on June 11, 2012, in the province of Québec, in the hands of Mr. Salvail Saint-Germain.
[10]
It
will suffice, for the purpose of the present motion, to state that the
defendants oppose the motion. There was a relationship involving the two
defendants, but it is not relevant and there is no need to explore it in order
to dispose of the motion for summary judgment, other than to state that
Mr. Salvail Saint-Germain, after having leased, through a corporate
identity he controlled, the said vessel, purchased it from Location Holand
(1995) Ltée. The circumstances under which “Never E Nuff” was acquired by
Location Holand (1995) Ltée are unknown at this stage.
[11]
The
plaintiff alleges that its cause of action is in rem against the vessel
and that it is not concerned with the dispute between the defendants that is
presented as being in personam. Having a right to the vessel, the
plaintiff wishes to be granted a summary judgment.
II. Analysis
[12]
As
it was discussed during the hearing of the motion, the plaintiff would have to
show a clear right to the vessel. As paragraph 215(1) of the Rules state:
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215. (1) If on a motion
for summary judgment the Court is satisfied that there is no genuine issue
for trial with respect to a claim or defence, the Court shall grant summary
judgment accordingly.
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215. (1) Si, par suite
d’une requête en jugement sommaire, la Cour est convaincue qu’il n’existe pas
de véritable question litigieuse quant à une déclaration ou à une défense,
elle rend un jugement sommaire en conséquence.
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[13]
Here,
at this stage, the plaintiff refers to contracts entered into and a judgment
rendered in a foreign jurisdiction, under laws that are foreign to this
jurisdiction, affecting parties other than the two defendants who have owned
and have been in possession of the vessel. Indeed, section 23 of the Canada
Evidence Act, RSC, 1985, c C-5, requires the exemplification of the record
of any court of record of the United States before it can be admitted in
evidence, let alone acted upon. The plaintiff, instead, seeks to introduce
those instruments through an affidavit of one of its vice-presidents. That
cannot be done. They must be proved. On that sole basis, the motion could be
dismissed, without more, in view of the burden on the plaintiff and the lack of
evidence before this Court.
[14]
Furthermore,
on its face the plaintiff seeks the recognition and enforcement of a foreign
decision. It wants to enforce what is presented as the judgment in default
against an American citizen.
[15]
The
plaintiff has argued that Maritime Law applies in the circumstances.
However, it never explained the significance it was putting on this, especially
as to how a foreign judgment, which was not even exemplified in this country to
at least be in evidence before the Court, could be the basis for execution,
without more.
[16]
The
Court is not satisfied that there is no genuine issue for trial. On the
contrary, I believe that a full hearing, with evidence properly presented and
tested need to take place. As Tetley put it in Maritime Liens and Claims,
Business Law Communications Ltd, 1985, in the context of the integrity of a
judicial sale: “Although a judgment may not be enforced without being
recognized, it may easily be recognized without being inforced.”
[17]
Not
only is there no proper evidence before this Court on the motion for summary
judgment per se, but the issue of the enforcement of a foreign judgment
is central to the claim. In Canada (Attorney General) v. Lameman,
2008 SCC 14, [2008] 1 S.C.R. 372, one can read, at paragraph 11, that evidence is
needed (in that case, it was the defendant who was seeking summary judgment).
The person who seeks summary judgment “cannot rely on mere allegations or the
pleadings.” As the Court put it “. . .
the
bar on a motion for summary judgment is high.”
[18]
The
defendant, Location Holand (1995) Ltée, argues that no security was registered
in the Province of Québec. Both defendants raise issues about the application
of the Civil Code of Québec, SQ, 1991, c 64. Premusably, the plaintiff
will argue that the application of Maritime Law, if it is appropriate,
takes away any argument based on the Civil Law of Quebec. This is an
issue that should be explored properly.
[19]
Assuming,
without deciding, that Maritime Law applies to this case, there will
remain the issue of the execution of a foreign judgment obtained against a
foreigner, without any involvement of the defendants who vehemently contest and
raise the application of the Civil Code of Québec.
[20]
This
matter is not fit for summary judgment. Genuine issues are for trial. As a result,
the motion for summary judgment sought by the plaintiff will be dismissed.
JUDGMENT
THIS
COURT’S JUDGMENT is that the motion for summary judgment sought
by the plaintiff is dismissed, with costs in favour of the defendants, Location
Holand (1995) Ltée and Patrick Salvail Saint-Germain.
“Yvan Roy”
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