Docket:
T-2259-12
Citation: 2014 FC 136
Ottawa, Ontario, February
7, 2014
PRESENT: The
Honourable Madam Justice Heneghan
ADMIRALTY
ACTION IN REM AGAINST THE SHIPS CAPE APRICOT,
ASIAN GYRO, BORON NAVIGATOR, CIELO
DI AMALFI, LEO ADVANCE,
LEO AUTHORITY, LEO FELICITY, LEO MONO, LEO OSAKA,
LEO PERDANA, MEDI GENOVA, MOL PARAMOUNT, MOL SOLUTION,
OOCL OAKLAND, ROYAL ACCORD, ROYAL CHORALE,
ROYAL EPIC, SEASPAN OSPREY, SEASPAN RESOLUTION,
AND A TUG BOAT WHOSE NAME IS UNKNOWN
AND IN PERSONAM
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BETWEEN:
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WESTSHORE TERMINALS LIMITED PARTNERSHIP BY ITS GENERAL PARTNER
WESTSHORE TERMINALS LTD.,
WESTSHORE TERMINALS INVESTMENT CORPORATION, AND
WESTAR MANAGEMENT LTD.
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Plaintiffs
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and
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LEO OCEAN, S.A.,
TOKEI KAIUN COMPANY LIMITED,
KAWASAKI KISEN KAISHA LIMITED ('K'-LINE), SEASPAN ULC,
JEFFREY MCDONALD, AND THE OWNERS AND ALL OTHERS INTERESTED IN THE
SHIPS CAPE APRICOT, ASIAN GYRO,
BORON NAVIGATOR, CIELO
DI AMALFI,
LEO ADVANCE, LEO
AUTHORITY,
LEO FELICITY, LEO MONO,
LEO OSAKA,
LEO PERDANA, MEDI
GENOVA,
MOL PARAMOUNT, MOL SOLUTION,
OOCL OAKLAND, ROYAL ACCORD,
ROYAL CHORALE, ROYAL EPIC,
SEASPAN OSPREY,
SEASPAN RESOLUTION, AND A TUG BOAT
WHOSE NAME IS UNKNOWN
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Defendants
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and
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JEFFREY MCDONALD, SEASPAN ULC,
SEASPAN OSPREY, SEASPAN RESOLUTION
AND CHARLES H. CATES VII OR ALTERNATIVELY A TUG BOAT WHOSE NAME IS
UNKNOWN AND THE OWNERS AND ALL OTHERS INTERESTED IN THE SHIP CAPE APRICOT,
THE SHIP CAPE APRICOT, LEO OCEAN S.A., TOKEI KAIUN COMPANY LIMITED
AND KAWASAKI KISEN KAISHA LIMITED (‘K’-LINE)
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Third Parties
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REASONS FOR ORDER AND ORDER
INTRODUCTION
[1]
Westshore Terminals Limited Partnership by its
General Partner Westshore Terminal Ltd., Westshore Terminals Investment
Corporation, and Westar Management Ltd. (the “Plaintiffs” or “Westshore”),
pursuant to Rules 3, 220(1)(a), 385(1)(a), 481 of the Federal Courts Rules,
SOR/98-106 (the “Rules”) and the inherent jurisdiction of the Court in respect
of a warrant to arrest, seek determination of the following questions:
1. Whether there was a binding agreement in place pursuant to which
Westshore agreed to waive its right to arrest sister ships of the Defendant
ship “Cape Apricot”;
2. Whether pursuant to subsection 43(8) of the Federal Courts Act,
R.S.C. 1985, c. F-7 a plaintiff can arrest the offending Vessel and a sister ship.
[2]
Although notice of this motion was given to all
parties, submissions were made only by the Plaintiffs, Defendant and Third Party Leo Ocean S.A. (“Leo Ocean” or “Leo”), and Defendant and Third Party Kawasaki
Kisen Kaisha Limited (“Kawasaki”).
BACKGROUND
[3]
The factual background below is taken from the
affidavits, including exhibits, filed on behalf of the Plaintiffs, that is the
affidavits of lawyer Mr. Peter Roberts and Mr. Nick Desmarais, a lawyer and
Corporate Secretary of Westshore Terminals Limited Partnership, and the
affidavit of Mr. Gary Wharton, Counsel for the Defendant Leo.
[4]
On December 7, 2012 the Vessel “Cape Apricot” (the
“Vessel”), owned by Leo hit a marine terminal trestle owned and operated
by the Plaintiffs at Roberts Bank, British Columbia, leading from the shore to
Berth #1 (the “incident”). As a result of the incident the Berth was rendered
unusable pending repairs, allegedly causing a loss to the Plaintiffs that is
estimated to be in excess of $60 million.
[5]
On December 7, 2012, the Plaintiffs commenced an
action in the Supreme Court of British Columbia and obtained a warrant for the arrest
of the Vessel.
[6]
On December 7, 2012 counsel for the parties
entered negotiations to arrange for the release of the Vessel from arrest.
Westshore was represented at the time by Mr. Peter Roberts, a partner in the Vancouver law firm Lawson Lundell LLP. Leo Ocean was represented by Mr. Gary Wharton, a
lawyer with the Vancouver firm of Bernard and Partners.
[7]
On December 8, 2012, Counsel for Leo Ocean offered to provide a Letter of Undertaking (”LOU”) in the amount of US$24 million
in exchange for the release of the Vessel from arrest.
[8]
On December 10, 2012, according to Mr.
Desmarais, he was asked by the Westshore insurers to instruct Mr. David McEwen,
Q.C. to “represent Westshore and provide maritime expertise to assist Mr.
Roberts”. Mr. McEwen was given those instructions on the same day.
[9]
In the course of the negotiations for the
release of the Vessel from arrest, Mr. Roberts raised the question “of
availability of sister ships in the name of Leo Ocean SA” as recorded in an
email sent at 5:59 p.m. on December 10, 2012; a copy of that email is exhibit L
to the affidavit of Mr. Roberts.
[10]
Mr. Roberts further deposed that he spoke with
Mr. Wharton between 6:00 and 7:00 p.m. on December 10, 2012 and advised that
the Plaintiffs were looking for security in the amount of C$100 million for the
release of the Vessel. According to Mr. Roberts, Mr. Wharton advised him that
the basis for the arrest of sister ships was very weak and that those
ships were likely mortgaged to close to their value.
[11]
According to Mr. Roberts, in this conversation
Mr. Wharton told him that his clients would resist efforts to move the Vessel
from Westshore’s Berth until the issue of security was settled. Paragraph 29 of
Mr. Roberts’ affidavit refers to that conversation as follows:
In this conversation,
Mr. Wharton also advised that the Vessel would resist efforts to move off
Westshore’s dock unless the issue of security was sorted out. This included the
likelihood that the owners of the Vessel would apply to Court to post bail for
its actual value at which time the Court would be told that Westshore’s demand
for security at C$100 million was not reasonable, hence the need for a bail
application.
[12]
Mr. Roberts accepted what Mr. Wharton said. He
did not conduct research on the issue of the maximum amount that could be
posted as security for the release of the Vessel or on the availability of
sister ship arrest.
[13]
Mr. Desmarais deposes in his affidavit that
early in the evening of December 10, 2012 Mr. Roberts advised him that the best
security Westshore could obtain from the shipowner was US$26 million. Mr.
Roberts also advised that the amount of available security was capped at the
value of the offending Vessel, Leo would resist moving the Vessel from Berth
#2, and that the claim to arrest sister ships depended on them coming to Canada. On the basis of this discussion, Mr. Desmarais instructed Mr. Roberts to accept the
LOU for US$26 million.
[14]
Further communications took place between Mr.
Roberts and Mr. Wharton. At 6:23 a.m. on December 11, 2012 Mr. Wharton sent an
email to Mr. Roberts advising that he had instructions to issue the LOU at US$26
million.
[15]
After reviewing a revised version of the LOU
received from Mr. Wharton at 7:24 a.m., Mr. Roberts spoke to Mr. Wharton at
8:00 a.m. by telephone and advised him that subject to some minor changes, the
LOU was acceptable. At 10:29 a.m. Mr. Wharton sent Mr. Roberts the signed LOU
by email, together with a draft Release from arrest. The LOU signed on December
11, 2012 contained a provision that Westshore would refrain from arresting any
other ships or property under the same ownership as the Vessel.
[16]
Shortly after 10:30 a.m. on December 11, 2012,
Mr. McEwen, Mr. Roberts and Mr. Wharton participated in a conference call where
they discussed the right to arrest sister ships. Paragraph 40 of Mr. Roberts’
affidavit provides, in part, as follows:
[…] Mr. McEwen
advised Mr. Wharton that the inclusion in the LOU of the clause preventing the
arrest of sisterships [sic] was unacceptable to Westshore. Mr.
Wharton advised that based upon the discussions between him and myself, his
client had an agreement with Westshore and that the Vessel ought to be allowed
to depart on that basis. It was agreed during this call to seek a hearing
before the Court at 2:00 p.m. to address the conflicting positions. Mr. Wharton
did not agree to Mr. McEwen’s suggestion during that call to move the Vessel
from Berth #2 at the Terminal. Mr. Wharton advised that the loaded Vessel would
have to remain at Berth #2 until the Court dealt with the terms of release.
[17]
The original LOU in the amount of US$26 million
dollars was delivered to Mr. Roberts during this teleconference.
[18]
Counsel for the Plaintiffs, including Mr. McEwen,
and Leo appeared before a judge of the Supreme Court of British Columbia at
2:00 p.m. on December 11, 2012. Mr. Wharton argued that the Vessel should
remain at Berth #2 until the Court ruled on whether there was a binding
agreement to provide security and the motion was adjourned until the following
day.
[19]
In his affidavit, Mr. Desmarais states that he
was informed by Mr. McEwen about his suggestion to counsel for Leo that the Vessel
be moved only a few hundred metres to Berth #1 pending the Court’s decision.
Mr. Desmarais was also advised by Mr. McEwen that Mr. Wharton rejected that
suggestion, and insisted the Vessel remain at Berth #2 until the issue of
whether there was a valid agreement in place was decided.
[20]
According to Mr. Demarais, on December 12, 2012
it was decided that Mr. McEwen would take conduct of the action on behalf of
Westshore. Concerned with the continuing presence of the Vessel at Berth #2,
Mr. Desmarais instructed Mr. McEwen to offer to release the Vessel on the basis
that a second LOU would be provided without the condition against arresting
other ships. This alternate LOU was forwarded in draft form to Mr. Wharton by
email from the office of Mr. McEwen late in the morning of December 12, 2012.
[21]
Mr. Wharton, at paragraph 39 of his affidavit,
gives a different perspective on the question of a second LOU, as follows:
Following the British
Columbia Supreme Court appearances post-morning of December 11, 2012 (as described
by Mr. Roberts and Mr. Desmarais), it was me who contacted Mr. McEwen to
suggest the provisional second LOU in order to get the vessel clear of Berth
#2.
[22]
Mr. Roberts justifies his actions in accepting
the form of LOU offered by Mr. Wharton on the need to have the Vessel moved
from Berth #2 and “to mitigate what I understood to be the significant and
mounting financial losses to Westshore”.
[23]
Likewise, Mr. Desmarais deposes that he
instructed Mr. Roberts to accept the LOU signed on December 11, 2012 in light
of the significant financial consequences that would be faced by Westshore if the
Vessel remained moored at Berth #2. According to Mr. Desmarais, when he instructed
Mr. Roberts to accept the LOU of December 11, 2012, he was unaware that
Westshore would be “waiving a realistic right to obtain further security from
the insurer of Leo by arresting a sistership [sic]”.
[24]
The original LOU offered security in the amount
of US$26 million against Westshore’s claim, following adjudication of that
claim either in the British Columbia Supreme Court or the Federal Court, at the
option of the Plaintiffs.
[25]
On December 19, 2012, Mr. Douglas Schmitt, a
lawyer with the Vancouver law firm Alexander Holburn, that is Mr. McEwen’s law
firm, wrote to Mr. Wharton, inquiring if the latter would accept service of the
Statement of Claim issued on that date by the Federal Court.
SUBMISSIONS
The Plaintiffs
[26]
The Plaintiffs argue that their “agreement” to
accept the original LOU is not binding upon them because it was based upon mistake
and coercion.
[27]
They submit that there was a common mistake,
shared by the Defendant Leo Ocean, that the amount of available security is
capped at the value of the Vessel. The Plaintiffs argue that this is wrong.
[28]
Second, they submit that there was another
mistake, either common or unilateral, that the right to arrest sister ships was
“weak and of little or no value” to them.
[29]
Finally, the Plaintiffs argue that they were
subject to economic duress in “agreeing” to accept the LOU from Leo Ocean. In this regard, they rely on the decision of the Privy Council in Pao On v.
Lan Yiu Long, [1979] 3 All E.R. 65 (P.C.). The Plaintiffs plead that they
were forced to accept the terms offered by Leo Ocean in order to minimize
disruption to their business and to mitigate financial losses.
Leo Ocean
[30]
Leo denies that there was any mistake that
induced the Plaintiffs to accept the proffered LOU. It argues that equity
should not be applied to rescind the LOU, noting that at all material times the
Plaintiffs were represented by Counsel experienced in matters of maritime law.
Leo rejects the contention that Lawson Lundell, the firm at which Mr. Roberts
is a partner, was inexperienced in maritime law.
[31]
The Defendant Leo further submits that there was
no coercion of the will sufficient to void the Plaintiffs’ agreement to accept
the LOU. It says that the terms of the LOU were negotiated between the parties
between December 7 and December 11, 2012, prior to being accepted by the
Plaintiffs on December 11, 2012.
Kawasaki
[32]
Kawasaki takes the
position that the issue raised in this matter is simply whether the Plaintiffs
can arrest multiple ships in order to obtain security in an amount greater than
the value of the wrongdoing Vessel or another ship that was arrested.
[33]
Kawasaki submits that as
a matter of statutory interpretation of subsection 43(8) of the Federal
Courts Act, R.S.C. 1985, c. F-7 (the “Act”), there is no right to arrest
multiple ships. The provision speaks only to an action in rem “against
any ship”. Nothing is said about the right to arrest or the provision of
security to obtain the release of arrested property.
[34]
Kawasaki further argues
that the decision relied upon by the Plaintiffs to support their argument in
favour of multiple arrests, that is Norcan Electrical Systems Inc. v. F.B.
XIX (The) (2003), 235 F.T.R. 237, does not assist the Plaintiffs’ position.
In that case, there were two proceedings for necessaries supplied to four
different ships, that is T-1959-02 and T-2091-02. The issue before the Court
was whether the two ships arrested in cause number T-1959-02 could be arrested
in cause number T-2091-02 to secure the claims for necessaries for the two
ships that were the subject of T-2091-02. The question of the right to arrest
multiple sister ships was not an issue.
[35]
In short, Kawasaki argues that the Plaintiffs erroneously
rely on an obiter comment of the late Prothonotary Hargrave at paragraph
14 where he said “Evident here is that there is no limit, under the Canadian
sister ship legislation, on the number of sister ships that may be arrested”.
[36]
In any event, Kawasaki argues that it is well
established that bail can be obtained only to the value of the ship under
arrest.
[37]
Kawasaki submits if the
Plaintiffs succeed in establishing a right to arrest multiple ships, in any
event they are barred from doing so in light of the agreement between Counsel
as to the provision of security by means of the LOU on December 11th,
2012. That document bars the arrest of sister ships in addition to the arrest
of the Vessel.
DISCUSSION AND
DISPOSITION
[38]
The Plaintiffs raise two issues in this motion.
The first relates to whether there was a legally binding agreement between
Counsel for the Plaintiffs and Counsel for Leo Ocean concerning the provision
of security by means of a LOU which prohibits the arrest of other property
owned by Leo and further, that sets the amount of security at US$26 million.
The Plaintiffs seek a determination that the agreement concerning the LOU is
void.
[39]
The second ground of the motion is a determination
of the scope of subsection 43(8) of the Act, in other words a question of
statutory interpretation.
[40]
I will first address the contract issues. The
Plaintiffs submit that the agreement to accept the LOU from Leo on December 11,
2012, should be set aside on the ground of mistake, either unilateral or common,
or on the basis of economic duress.
[41]
In the simplest terms, a contract is a legally
recognized agreement between two or more parties giving rise to an obligation
that may be judicially enforced; see the decision in 406868 Alberta Ltd. v.
Westfair Foods Ltd., [1997] A.J. No. 790. A contract can be avoided by
factors including mistake or duress. A mistake on the part of one or both
parties may mean that there was no consensus ad idem; see Colonial
Investment Co. v. Bortland (1911), 1 W.W.R. 171. The decision in Stott
v. Merit Insurance Corporation (1988), 63 O.R. (2d) 545 reviews the
elements necessary to establish economic duress.
[42]
The first mistake alleged by the Plaintiffs is
that Counsel for Leo erroneously advised Mr. Roberts that the right to arrest sister
ships, in addition to the arrest of the allegedly offending ship, was weak and
of little or no value to Westshore.
[43]
On the basis of the evidence filed in respect of
this motion, there is a conflict between Mr. Roberts, on behalf of the
Plaintiffs, and Mr. Wharton, Counsel for the Defendant, on that point. At
paragraph 20 of his affidavit, Mr. Wharton says the following:
In response to
paragraphs 24 and 26 of Mr. Roberts’ Affidavit regarding the conversation about
sistership [sic] arrest, I did talk to Mr. Roberts about this issue. I
gave him my view that once security is posted, there is a question as to
whether you can arrest one or more sisterships [sic] as the
international convention allows only one vessel arrest (offending vessel or
sistership [sic] but not both) while our own legislation is unclear on
this point. I also advised him that my personal view was that a case for
multiple arrests once security was posted was weak.
[44]
The Plaintiffs appear to be arguing that Mr.
Wharton was “mistaken” in his opinion as to the availability of multiple arrests
and that Mr. Roberts was “mistaken” in relying upon Mr. Wharton’s advice.
[45]
Mr. Wharton was acting in his capacity as
Counsel to the Defendant Leo. His primary duty, as a Solicitor, lay with his
client, not to Mr. Roberts; see Canadian National Railway Co. v. McKercher
LLP (2013), 446 N.R. 1 and Canada (Minister of National Revenue –
M.N.R.) v. Vlug, 2006 FC 86.
[46]
I see no merit in the protestations of Mr.
Roberts, as set out in paragraph 4 of his affidavit, that he had never before
been involved in the arrest of a ship in either the Federal Court or in the
Supreme Court of British Columbia. Assistance was available and indeed,
according to Mr. Roberts, he spoke with Mr. David McEwen, Q.C., on December 10,
2012 and said that the Plaintiffs “wished to retain him to provide advice on
the admiralty aspect of this matter”. As well, according to paragraph 5 of his
affidavit, Mr. Desmarais said that Mr. McEwen was instructed to act on behalf
of Westshore in particular to provide “maritime expertise to assist Mr.
Roberts”.
[47]
Mr. McEwen was available to advise the
Plaintiffs about the acceptability of the LOU that was negotiated with Mr.
Wharton. I take judicial notice of the fact that Mr. McEwen is a senior
counsel, with recognized expertise in the field of maritime law.
[48]
I am not convinced that Mr. Wharton’s advice was
mistaken or in error. It appears that in bringing this motion with respect to
multiple arrests, the Plaintiffs themselves implicitly acknowledge that the
issue is not clear cut since they are seeking determination of that question by
the Court.
[49]
In any event, insofar as the LOU represents an
agreement, it was negotiated between Mr. Roberts as the lawyer for the Plaintiffs,
and Mr. Wharton as Counsel for Leo. Mr. McEwen was involved, as another lawyer,
prior to the delivery of the signed LOU by email at approximately 10:29 a.m. on
December 11, 2012.
[50]
The second “mistake” alleged by the Plaintiffs
again refers to advice from Mr. Wharton to the effect that the limit of
security to be posted is the value of the ship. According to the Plaintiffs,
Mr. Wharton “mistakenly” advised Mr. Roberts that security would be capped at
the value of the Vessel.
[51]
The Plaintiffs argue that this was wrong and the
mistaken belief in that regard was fundamental to the agreement, in light of
the amount of the claim for damages.
[52]
In my opinion, there was no mistake here. In Norcan,
supra, Prothonotary Hargrave said the following at paragraph 10:
As to setting bail,
the general rule is that a plaintiff is entitled to bail in an amount
sufficient to cover his or her reasonably arguable best case, together with
interest and costs, limited by the value of the wrongdoing vessel: see for
example Brotchie v. Karey T (The) reflex, (1994), 77 F.T.R. 71
(F.C.T.D.) at page 72, Moschanthy, The, [1971] 1 Lloyd’s Rep. 37 (Adm.),
at page 44, a decision of Mr. Justice Brandon. As to the cap on bail at the
value of the ship, see Staffordshire, The (1872), 1 Asp. M.L.C. 365
(P.C.) at page 372; Charlotte, The, [1920] P. 78 (Adm.) at page
80 and “Admiralty Practice” by Kenneth McGuffie, British Shipping Laws, Vol. 1,
London: Stevens and Sons Ltd., 1964 at page 140. This cap on bail applies even
though the claim, costs and interest may exceed the value of the arrested ship.
[53]
There was no error, and there is no basis to set
aside the agreement on the ground of mistake.
[54]
The Plaintiffs’ arguments about economic duress
are likewise ill founded. In Stott, supra, the Ontario Court of
Appeal identified the following facts necessary to establish duress:
1. The pressure must amount to coercion of the will;
2. The pressure must be illegitimate;
3. The party seeking relief must have taken steps to avoid the act complained
of.
[55]
The “pressure” here is the Defendant Leo’s
refusal to allow the Vessel to be moved before security was in place. In my
opinion, while Leo’s position may have put pressure on the Plaintiffs and their
lawyers, including Mr. Desmarais, an in-house lawyer and Corporate Secretary of
Westshore Terminals Limited Partnership, I fail to see how this amounted to
“coercion of the will”.
[56]
It seems to me that Counsel for Leo was entitled
to take the position that the Vessel would not be moved until security was posted.
It is the usual consequence of an arrest that the ship will not be moved while
under arrest, in the absence of consent or of a Court order; see the decision
in Whyte v. “Sandpiper IV” (The) (2002), 217 F.T.R. 314. On the basis of
the evidence submitted and the general law in Canada regarding movement of the ship
while under arrest, I find that there was no “coercion of the will”. Rather,
there was bargaining.
[57]
I am equally satisfied that the pressure was
legitimate. Leo wanted its Vessel released from arrest. The Vessel had been moored
at Berth #2 on December 7, 2012. The Plaintiffs chose to arrest the Vessel
while so moored. The Plaintiffs are deemed to know the law concerning the
consequences of arrest. There was nothing illegitimate in the position adopted
by Leo. Commercial realities involving ships are not unique to the Plaintiffs
in this case.
[58]
Leo had a reasonable and legitimate interest in
securing the release of its Vessel from arrest as soon as possible. That
release would be obtained either by agreement with the Plaintiffs as to the
form and amount of security or by way of a Court order following a hearing.
[59]
Insofar as Leo refused to consent to movement of
the Vessel prior to positing security to obtain its release from arrest, it was
allowed to do so. There was nothing illegal or unfair, at law, in its refusal
to accommodate the Plaintiffs’ request.
[60]
The Plaintiffs were at liberty to seek recourse
from the Courts. Although they filed an application before the British Columbia
Supreme Court on December 11, 2012 and appeared on that date before that Court,
they did not pursue their application to a final hearing and order.
[61]
According to the test in Stott, supra, in
order to obtain relief on the basis of economic duress a party must demonstrate
that it took steps to avoid the act complained of. The Plaintiffs’ took some
steps, but did not carry them through to a determination. It is inappropriate
for them now to complain that they were compelled to accept the security
offered by Leo if they were dissatisfied with it. In any event, I am satisfied
that there was no economic duress in this case, as defined in Stott, supra.
[62]
There remains the question as to the
availability of multiple arrests.
[63]
Subsection 43(8) of the Act provides as follows:
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43(8) The jurisdiction conferred on the
Federal Court by section 22 may be exercised in rem against any ship
that, at the time the action is brought, is owned by the beneficial owner of
the ship that is the subject of the action.
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43(8) La compétence de la Cour fédérale
peut, aux termes de l’article 22, être exercée en matière réelle à l’égard de
tout navire qui, au moment où l’action est intentée, appartient au véritable
propriétaire du navire en cause dans l’action.
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[64]
The reference to actions in rem means
that an action can be taken in certain circumstances directly against the ship;
see subsections 43(2) and (3) as follow:
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43(2) Subject to subsection (3), the jurisdiction
conferred on the Federal Court by section 22 may be exercised in rem
against the ship, aircraft or other property that is the subject of the
action, or against any proceeds from its sale that have been paid into court.
(3) Despite subsection (2), the jurisdiction conferred on
the Federal Court by section 22 shall not be exercised in rem with respect to
a claim mentioned in paragraph 22(2)(e), (f), (g), (h),
(i), (k), (m), (n), (p) or (r)
unless, at the time of the commencement of the action, the ship, aircraft or
other property that is the subject of the action is beneficially owned by the
person who was the beneficial owner at the time when the cause of action
arose.
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43(2) Sous réserve du paragraphe (3),
elle peut, aux termes de l’article 22, avoir compétence en matière réelle
dans toute action portant sur un navire, un aéronef ou d’autres biens, ou sur
le produit de leur vente consigné au tribunal.
(3) Malgré le paragraphe (2), elle ne
peut exercer la compétence en matière réelle prévue à l’article 22, dans le
cas des demandes visées aux alinéas 22(2) e), f), g), h),
i), k), m), n), p) ou r), que si,
au moment où l’action est intentée, le véritable propriétaire du navire, de
l’aéronef ou des autres biens en cause est le même qu’au moment du fait
générateur.
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[65]
Paragraph 22(2)(e) is relevant and provides as
follow:
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22(2)(e) any claim for damage
sustained by, or for loss of, a ship including, without restricting the
generality of the foregoing, damage to or loss of the cargo or equipment of,
or any property in or on or being loaded on or off, a ship;
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22(2)e) une demande d’indemnisation
pour l’avarie ou la perte d’un navire, notamment de sa cargaison ou de son
équipement ou de tout bien à son bord ou en cours de transbordement;
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[66]
The damage in this case was caused by the impact
of the Vessel against the Plaintiffs’ Berth.
[67]
As noted by Kawasaki in its submissions,
subsection 43(8) does not speak of “arrest” per se but addresses actions
in rem. Arrest is a procedural right that is available to an injured
party as a means of obtaining security for a future judgment; see Benson
Bros. Shipbuilding Co. (1960) Ltd. v. The “Miss Donna”, [1978] 1 F.C.R.
379.
[68]
The Plaintiffs arrested the Vessel in the British Columbia proceedings. Did they have the right to arrest multiple ships? The right
to arrest sister ships exists pursuant to subsection 43(8) of the Act as quoted
above. The scope of that right involves the interpretation of subsection 43(8).
[69]
As noted by the Supreme Court of Canada in Canada
Trustco Mortgage Co. v. Canada, [2005] 2 S.C.R. 601 at paragraph 10:
The interpretation of
a statutory provision must be read according to a textual, contextual and
purposive analysis to find a meaning that is harmonious with the Act as a
whole. When the words of a provision are precise and unequivocal, the ordinary
meaning of the words play a dominant role in the interpretive process. On the
other hand, where the words can support more than one reasonable meaning, the
ordinary meaning of the words plays a lesser role. The relative effects of
ordinary meaning, context and purpose on the interpretive process may vary, but
in all cases the court must seek to read the provisions of an Act as a
harmonious whole.
[70]
Pursuant to section 12 of the Interpretation
Act, R.S.C. 1985, c. I-21, statutes are to receive a fair, large and
liberal construction:
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Enactments deemed
remedial
12. Every enactment is deemed remedial,
and shall be given such fair, large and liberal construction and
interpretation as best ensures the attainment of its objects.
|
Principe et
interprétation
12. Tout texte est censé apporter une
solution de droit et s’interprète de la manière la plus équitable et la plus
large qui soit compatible avec la réalisation de son objet.
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[71]
The right to arrest sister ships was addressed in the 1952
International Convention For The Unification Of Certain Rules Relating To The
Arrest Of Sea-Going Ships, 10 May 1952, 439 U.N.T.S. 193 (the
“Convention”).
[72]
Article 3(1) of the Convention provides as follows:
[…] a claimant may arrest either the
particular ship in respect of which the maritime claim arose, or any other ship
which is owned by the person who was, at the time when the maritime claim
arose, the owner of the particular ship.
[73]
The Senior Courts Act 1981 (U.K.), c. 54 says the following at
subparagraph 21(4)(b)(ii):
21 Mode of exercise
of Admiralty jurisdiction.
[…]
(4)(b)an action in rem may
(whether or not the claim gives rise to a maritime lien on that ship) be brought
in the High Court against
[…]
(ii)any other ship of which, at the time
when the action is brought, the relevant person is the beneficial owner as
respects all the shares in it.
[74]
Subsection 43(8) allows for an in rem action against “any ship
that, at the time the action is brought, is owned by the beneficial owner of
the ship that is the subject of the action”. Subsection 43(8) was introduced in
Canada following an amendment to the Act which came into force on February 1,
1992; see the decision in Noranda Sales Corp. v. British Tay (The)
(1993), 77 F.T.R. 8 at paragraph 1. To date, it appears that this subsection
has not been the subject of judicial interpretation.
[75]
The Plaintiffs argue that subsection 43(8) is ambiguous
and that, unlike the situation in England, the Canadian legislation does not
clearly state that only one ship may be arrested.
[76]
The scope of subsection 43(8), in my opinion, turns on the meaning to be
given to the words “any ship”. Do those words mean more than one? Can a
plaintiff arrest the offending ship, as well as one or more sister ships, that
is a ship or ships that are beneficially owned by the same owner as the ship
subject to the action?
[77]
According to The Oxford English Dictionary, 2d ed., the word
“any” is defined as follows:
1. gen. An indeterminate
derivative of one, or rather of its weakened adj. form a, an,
in which the idea of unity (or, in plural form, partivity) is
subordinated to that of indifference as to the particular one or ones that may
be selected. In sing. = A --- no matter which; a--- whichever, of
whatever kind, of whatever quantity. In pl. = Some--- no matter which,
of what kind, or how many [emphasis in original].
[78]
The French language version of subsection 43(8) refers to “de tout
navire”. According to Dictionnaire Francais-Anglais LaRousse, 1st ed., the
word “tout” is defined as:
f. toute, pl. tous,
toutes… adj. All, whole (total)… All, sole, only, one and only (seul)…
Any, every (chaque)… Pl. All.
[79]
In the Le Petit Robert Dictionnaire de la langue française,
1st ed., “tout”, without an article, is defined as follows:
TOUT, TOUTE (suivi
d’un nom sans art.) : un quelconque, n’importe quel; un individu pris au hasard
parmi la totalité des individus semblables.
[80]
Consideration must be given to both the English and French version of
the legislation. Section 13 of the Official Languages Act, R.S.C. 1985,
c. 31 (4th Supp.) reads as follows:
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Both versions
simultaneous and equally authoritative
13. Any journal, record, Act of
Parliament, instrument, document, rule, order, regulation, treaty,
convention, agreement, notice, advertisement or other matter referred to in
this Part that is made, enacted, printed, published or tabled in both
official languages shall be made, enacted, printed, published or tabled
simultaneously in both languages, and both language versions are equally
authoritative.
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Valeur des deux
versions
13. Tous les textes qui sont établis,
imprimés, publiés ou déposés sous le régime de la présente partie dans les
deux langues officielles le sont simultanément, les deux versions ayant
également force de loi ou même valeur.
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[81]
In R v. Daoust, [2004] 1 S.C.R. 217 at paragraph
28, the Supreme Court of Canada said the following about the interpretation of
bilingual legislation:
If there is an
ambiguity in one version but not the other, the two versions must be
reconciled, that is, we must look for the meaning that is common to both versions.
[82]
In my opinion, the key word in subsection 43(8) for the purposes of this
motion is “any”. Is this word ambiguous?
[83]
In Bell ExpressVu Ltd. v. Rex, [2002] 2 S.C.R. 559 at
paragraph 29, the Supreme Court of Canada commented on ambiguity as follows:
[…] an ambiguity must be "real" (Marcotte,
supra, at p. 115). The words of the provision must be "reasonably
capable of more than one meaning" (Westminster Bank Ltd. v. Zang,
[1966] A.C. 182 (H.L.), at p. 222, per Lord Reid). By necessity, however, one
must consider the "entire context" of a provision before one can
determine if it is reasonably capable of multiple interpretations.
[84]
In my view, having regard to the definitions found in both an English
and two French dictionaries, the words “any” and “de tout” are, per se,
ambiguous. The words can mean one or more than one, depending on the way in
which they are used.
[85]
However, the inherent ambiguity of “any” and “de tout” is not
determinative of the question posed here by the Plaintiffs for determination.
The words are to be considered in the context in which they are found and used.
[86]
In subsection 43(8) the words are used in the context of in rem
actions. Such actions can include the exercise of the power to arrest. The
Convention referenced above deals with the arrest of sister ships. Canada is not a party to that Convention but in 1992 adopted subsection 43(8) of the Act.
[87]
In my opinion, the inherent ambiguity in “any” or “de tout” is resolved
by reference to the use of the singular “ship” in the English version and
“navire” in the French version. The French version says “de tout navire”; this
suggests that the singular is intended because otherwise Parliament could have
said “de tous navires”.
[88]
Likewise, the English version of subsection 43(8) says “any ship”. The
use of the word “ship” suggests that the meaning is singular. If Parliament had
intended otherwise, it could have used the words “any ships” or “any other
ship”.
[89]
In any event, according to the dictionary definitions above, “any” and
“de tout” can mean “one among many”.
[90]
There is no evidence before me that Parliament intended to provide a
right to multiple arrests in the domestic domain when the Convention makes it
clear that only one ship may be arrested, that is either the offending ship or
another ship that meets the requirements of Article 3.
[91]
Shipping is an international enterprise and ships from the international
community frequent Canadian waters. In the absence of evidence to the contrary,
I am not prepared to find that the Parliament of Canada intended to introduce a
radical change in the matter of multiple arrests of ships, without a clear
expression of that intention.
[92]
I am satisfied that subsection 43(8) of the Act does not give the right to
multiple arrests. It follows that the Plaintiffs are not entitled, as a matter
of law, to arrest a sister ship to the Vessel, once they had exercised their
right to arrest the offending ship.
CONCLUSION
[93]
In conclusion, the motion is dismissed and the questions posed by the Plaintiffs
are answered as follows:
1. Whether
there was a binding agreement in place pursuant to which Westshore agreed to
waive its right to arrest sister ships of the Defendant ship “Cape Apricot”?
[94]
Yes, there was a binding agreement in place between the Plaintiffs and
Leo whereby the Plaintiffs agreed to waive their right to arrest sister ships
of the Vessel.
2. Whether pursuant to subsection
43(8) of the Federal Courts Act, R.S.C. 1985, c. F-7 a plaintiff can arrest the
offending vessel and a sister ship?
[95]
No, pursuant to subsection 43(8) a plaintiff cannot arrest both an
offending ship and a sister ship.
[96]
In the result, the motion is dismissed with costs against the Plaintiffs,
in any event of the cause, in favour of the Defendant and Third Party Leo Ocean
S.A. and the Defendant and Third Party Kawasaki Kisen Kaisha Limited. If the
parties are unable to agree on costs, brief submissions not exceeding five (5)
pages can be made on or before February 25, 2014.
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