Docket: T-1106-12
Citation:
2016 FC 1096
Ottawa, Ontario, September 30, 2016
PRESENT: The
Honourable Mr. Justice Harrington
ADMIRALTY ACTION
IN REM AND IN PERSONAM
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BETWEEN:
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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
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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
Plaintiffs
in
Warranty
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and
LOCATION HOLAND (1995) LTÉE
Defendant in
Warranty
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JUDGMENT AND REASONS
[1]
In essence, this is a case concerning the
enforcement in Canada of an American mortgage on the “Never
E Nuff” a 38-foot pleasure craft. Many of the relevant facts are
found in an Agreed Statement.
I.
Lakeland’s Case
[2]
In 2007, the plaintiff, Lakeland, an American
bank, lent the American defendant McMahon US $146,390 so he could purchase the “Never E Nuff”. As security, the Bank took out
a First Preferred Ship’s Mortgage registered at the National Vessel Document
Center, United States Coast Guard.
[3]
Mr. McMahon stopped making payments on the loan
in March 2008. The Bank instituted proceedings in personam against Mr.
McMahon and in rem against the “Never E Nuff”
in the United States District Court, Northern District of New York. However, it
could not proceed in rem as the ship could not be found, served and
arrested. Unbeknownst to the Bank, the ship had been sold and exported to
Canada. The Bank obtained a judgment against Mr. McMahon personally in the amount
of US $190,948.79. However, it has been unable to collect thereon.
[4]
It came to learn that the “Never E Nuff” was in the ownership of Patrick
Salvail St-Germain, and was to be found near Montreal.
[5]
In June 2012, it instituted proceedings in this
Court in personam against Mr. McMahon and Mr. St-Germain (sometimes
simply known as Mr. Salvail) and in rem against the “Never E Nuff”. It obtained a Warrant for
Arrest and not only arrested the ship but obtained an order putting the Bailiff
(acting Marshal) in possession. The amount of the action is for the Canadian
equivalent of US $190,948.79, the amount of the American judgment, plus
interest and costs. It seeks judgment against the defendants jointly and
severally.
II.
The Case against Mr. McMahon
[6]
Mr. McMahon was never served with these Canadian
proceedings, be it personally or by court ordered substitutional service.
Consequently, the action as against him must be dismissed. In any event, the
action would have been dismissed against him on the principle of res judicata.
Although the pleadings are somewhat ambiguous, the action against Mr. McMahon is
on the loan. It is not an application to enforce a foreign judgment, which
under the rules of this Court is subject to a completely different procedure.
III.
The Case against Mr. St-Germain
[7]
Mr. St-Germain was sued jointly and severally
with Mr. McMahon and with the ship. The only alleged basis of his personal
liability is that he was, and still is, the current owner of the “Never E Nuff”. There is no allegation in the
Statement of Claim as filed, or as amended shortly before trial, that Mr.
McMahon was a prête-nom for Mr. St-Germain, or that they were otherwise in
cahoots so that Mr. St-Germain would be responsible for Mr. McMahon’s
indebtedness to the Bank.
[8]
In my opinion, Mr. St-Germain should have
immediately moved under Rule 221 to have the action struck against him on the
basis that the pleadings disclosed no reasonable cause of action. An innocent
purchaser for value, without notice of an existing lien or encumbrance, is not
personally liable. However, Mr. St-Germain filed a Statement of Defence in
which he denied liability both personally, and on behalf of the ship.
IV.
Mr. St-Germain as Claimant
[9]
Mr. St-Germain submits that the Bank’s
proceedings were an abuse of process and counterclaims in the amount of
$50,000.00. His counterclaim includes damages for stress occasioned by the risk
of being found personally liable, the fact that the arrest was illegal (which
shall be covered in the case against the ship) and that in any event the
Bailiff arrested more than simply the “Never E Nuff”.
He also arrested the trailer on which the she sat on land, the on board fuel
which he had purchased, which he valued at $1,000.00 and various personal items
such as safety equipment, crockery and the like.
[10]
He also instituted third party proceedings
against Holand, a leasing company. Holand, at Mr. St-Germain’s request, had
purchased the “Never E Nuff” from Mr.
McMahon in April 2007. This purchase was without the knowledge or consent of
the Bank. Indeed, Mr. McMahon kept up his payments on the loan for almost
another year.
[11]
Holand then leased the “Never
E Nuff” to Modes CSG Inc., a company wholly owned by Mr. St-Germain.
After extensions of and the expiry of the lease, on August 31, 2010, Mr.
St-Germain purchased the “Never E Nuff”
from Holand.
[12]
The third-party proceedings against Holand are
narrow in scope. They only provide that if Mr. St-Germain is found personally
liable to the Bank he then claims indemnity. It is not a claim based on the
fact that Holand may have sold him a ship which was not free and clear of liens
and encumbrances. I was informed that there are pending proceedings between Mr.
St-Germain and Holand in the Quebec Superior Court.
V.
The Case against the “Never
E Nuff”
[13]
The claim is based on s 22(3)(d) of the Federal
Courts Act which gives this Court jurisdiction in relation to all mortgages
on a ship, registered or not, whether legal or equitable, and whether created
under foreign law or not.
[14]
Mr. St-Germain has mounted a vigorous defence on
the ship’s behalf. He submits:
a)
Lakeland failed to prove American law.
Consequently it failed to prove that the mortgage is valid;
b)
Lakeland’s claim is time-barred or prescribed
under American law;
c)
that Quebec law is applicable as the “Never E Nuff” was not, and need not have been,
registered federally pursuant to the Canada Shipping Act, 2001. In order
to enforce the mortgage against him, a purchaser in good faith, for value, and
without notice, the Bank’s interest had to be registered in accordance with provisions
of the Quebec Civil Code. It was not.
[15]
Mr. St-Germain also alleged that Holand was
obliged to guarantee him title free and clear of liens and encumbrances.
However, as aforesaid, this allegation is beyond the conclusions sought in this
Court. Holand’s position, again not relevant to this action, is that it was Mr.
St-Germain who was supposed to take care of title issues.
VI.
The Trial
[16]
Upon confirmation that Mr. McMahon had never
been served, I immediately dismissed the action as against him, without costs.
[17]
As regards Mr. St-Germain, at some point before
trial the Bank indicated that it would limit its claim against him to the costs
incurred by the Bailiff in storing the “Never E Nuff”.
Nevertheless, on its motion to amend its Statement of Claim, which was heard
the week before trial, it was still claiming US $190,748.79 against the ship,
Mr. McMahon and Mr. St-Germain jointly and severally. However, during the the
Bank’s opening statement, counsel reconfirmed that the claim against Mr.
St-Germain personally was limited to the storage costs incurred by the Bailiff.
He went on to say that following his cross-examination of Mr. St-Germain, the
Bank might drop that storage claim as well.
[18]
Mr. St-Germain was cross-examined by the Bank, to
be followed by Holand. After the Bank’s cross-examination it stated it was
discontinuing its entire action against Mr. St-Germain. The result is that Mr.
St-Germain’s third party action against Holand in this Court also falls.
[19]
There are obviously cost consequences. I stated
that I would deal with costs after these reasons and judgment were issued.
Holand’s counsel, with my leave, did not participate further.
[20]
This leaves the “Never
E Nuff” as the only defendant.
[21]
I begin with what the action against her is not.
It is not an action in this Court as Canada’s Admiralty Court to enforce an in
rem judgment of a Foreign Admiralty Court. In the City of Mecca
(1879), 5 P D 28, Sir Robert Phillimore held that the English Court of
Admiralty could and ought to enforce an in rem judgment of a Foreign
Admiralty Court. This was done on the grounds of international comity. He was
reversed in the Court of Appeal, (1881), 6 P D106, not on the point of law, but
rather because the foreign judgment in issue, a judgment of a Portuguese Court,
was in personam only. Likewise in this case the decision in the United
States District Court was in personam only.
[22]
The Bank emphasized at trial that it seeks a
judgment in rem against the ship followed by a Marshal’s sale and
payment out of the proceeds thereof. This is, and always has been, the classic
conclusion of a successful action in rem. This is what Lord Watson had
to say in Northcote v the Owners of The Henrich Bjӧrn (1886), 11
App Cas 270 (The Henrich Bjӧrn) at pp 276-277:
The action is in rem, that being, as
I understand the term, a proceeding directed against a ship or other chattel in
which the plaintiff seeks either to have the res adjudged to him in property or
possession, or to have it sold, under the authority of the Court, and the
proceeds, or part thereof, adjudged to him in satisfaction of his pecuniary
claims.
[23]
The Bank called one witness, a Vice-President,
Tarik Hussain, who joined it some four and a half years ago, after the events
in the United States took place. However, he had access to the Bank’s business
records. He produced a number of exhibits, which were subject to objection on
various grounds such that they were photocopies, not originals, not certified,
not produced by a competent witness and did not meet the requirements of the Canada
Evidence Act. These objections were taken under advisement.
[24]
The Bank’s involvement began in January 2007
with a Retail Instalment Contract between First Choice Marine as seller and Mr.
McMahon as buyer of the “Never E Nuff”. The
cash price was US $245,695.00 with $146,390.00 to be financed, at an annual
percentage rate of 9.99%. It would appear that this contract was assigned to
the Bank although the assignment portions thereof were not signed.
[25]
The ties between the Bank and Mr. McMahon became
tighter with another document on Lakeland’s letterhead titled “Indirect Dealer Loan Application”, signed by Mr.
McMahon. The loan requested was US $149,900.00.
[26]
The best evidence rule has to be tempered these
days by a sense of proportionality. Given the admission that the Bank lent US
$146,390.00 to Mr. McMahon, objection to the production of these documents does
not sit well. I dismiss the objections thereto. The Bank was given leave to replace
a copy with the original Retail Instalment Contract, which it did. However, I
disallow a page which was not in the copy produced by Mr. Hussain.
[27]
On January 17, 2007, a First Preferred Ship’s
Mortgage given by Mr. McMahon to Lakeland was registered at the National Vessel
Documentation Center, United States Coastguard. The total amount of the
mortgage was US $146,390.00, plus interest. The mortgage was to mature January
6, 2027. There is no suggestion whatsoever that this certified copy is not the
document specified in the Agreed Statement of Facts and so I dismiss the
objections to its production.
[28]
After Mr. McMahon failed to maintain his
payments, the Bank took action in the United States District Court, Northern
District of New York, but as aforesaid, could not proceed in rem against
the ship. Although Mr. McMahon did not defend, upon being threatened with
contempt for not appearing for a deposition, he did appear and on or about
January 13, 2009, deposed that he had sold the “Never
E Nuff” to a man named “Patrick”
whose last name he did not know, that Patrick had written him a cheque for
$146,000.00 and had taken the “Never E Nuff”
to Canada. All this had occurred more than one year before his deposition. The
US judgment against Mr. McMahon was certified and so is certainly receivable as
an exhibit pursuant to the Canada Evidence Act.
[29]
Since the Bank relies upon the judgment, it is
certainly taken to know in January 2009 that the ship had been previously exported
to Canada.
[30]
Mr. St-Germain’s version of events coincides
with what the Bank had learned. He was interested in buying a pleasure craft
and through internet searches came across Mr. McMahon. Through a financing
arrangement with Holand, with whom he had done business in the past, it was
actually Holand who purchased the ship on April 23, 2007, as per the Agreed
Statement of Facts. The sales contract was not produced.
[31]
This brings us to Mr. St-Germain’s defences
asserted on behalf of the ship.
[32]
The first is that the Bank has not established
that it holds a valid US mortgage on the ship. It led no evidence as to
American law.
[33]
In my opinion, the Bank does hold a valid US
mortgage. It did not have to prove American law. This is not a case in which
the Bank was trying to assert greater rights under a foreign law than to which
it would be entitled under Canadian domestic maritime law. For instance,
necessaries men, for the most part, have no preferred status in Canada while in
some countries they enjoy a maritime lien. See World Fuel Services Corp v
Nordems (The), 2010 FC 332, affm’d 2011 FCA 73, [2012] 4 FCR 183.
[34]
In JP Morgan Chase Bank v the Lanner, 2006
FC 409, [2007] 1 FCR 289, Madam Justice Gauthier, as she then was, had to deal
with a foreign mortgage. She said at paras 33 and 34:
[33] Moreover, as mentioned, where
foreign law is relevant, it is a question of fact that needs to be established.
As indicated in The Golden Trinity, above, and in Backman v. Canada,
[1999] F.C.J. No. 1327 at paragraphs 38-41 (F.C.A.) (QL), aff'd [2001] 1 S.C.R.
367, "if foreign law is not pleaded and proved or insufficiently proved,
it is assumed to be the same as the lex fori".
[34] A review of the documentation
produced satisfies the Court that under Canadian law, the loan agreement and
the registered mortgage are valid. Like the Prothonotary, I am satisfied that
the plaintiffs have established the basis of their claim.
[35]
Although the judgment was varied in appeal, 2008
FCA 399, [2009] 4 FCR 109, her opinion that in the absence of proof of foreign
law the lex fori applies, was not challenged.
[36]
The mortgage document, on its face, would have
been perfectly valid under Canadian Maritime Law, more particularly the Canada
Shipping Act, 2001. In accordance with sections 46 and 47 of that Act, the “Never E Nuff”, as a “pleasure
craft”, was not subject to mandatory registration, but rather, at the
option of a qualified owner, could have been registered. If it had been
registered, then the mortgage could have been registered. It follows, however,
that if title was not registered, then the mortgage could not have been
registered.
[37]
Absent registration, and indeed should I be wrong
in holding that the Bank held a valid registered US mortgage, the Bank holds a
legal unregistered mortgage which under Canadian Maritime Law is opposable to
Mr. St-Germain as a bona fide purchaser for value without notice. I so
held in Ballantrae Holdings Inc v The Phoenix Sun, 2016 FC 570, which
dealt with a mortgage which should have been, but was not, registered in
Panama. Reliance was placed in that case upon The Shizelle, [1992] 2
Lloyd’s Rep 444, a decision of the English Admiralty Court.
[38]
Mr. St-Germain submits that my reliance in The
Pheonix Sun on The Shizelle was misplaced. While it is true that
Canadian Maritime Law includes those principles of English common law
administered by the English Admiralty Courts, (ITO-International Terminal
Operators v Miida Electronics, [1986] 1 S.C.R. 752 (The Buenos Aires Maru)),
that law can be displaced by subsequent Canadian jurisprudence or legislation.
[39]
At common law, the mortgage is a security device
wherein legal title to the chattel is transferred to the lender, with the
borrower maintaining the equitable right of redemption.
[40]
Now s 65 and following of the Canada Shipping
Act, 2001, deal with mortgages registered thereunder.
[41]
Sections 68 and 69(1) read:
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68 A
mortgage of a vessel or a share in a vessel does not have the effect of the
mortgagee becoming, or the mortgagor ceasing to be, the owner of the vessel,
except to the extent necessary to make the vessel or share available as
security under the mortgage.
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68 Sous
réserve de ce qui peut être nécessaire pour faire du bâtiment ou de la part
hypothéqué une garantie de la dette hypothécaire, le créancier hypothécaire
n’est pas, du fait de l’hypothèque, réputé être propriétaire du bâtiment ou
de la part. Le débiteur hypothécaire n’est pas non plus réputé avoir cessé d’en
être le propriétaire.
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69 (1) A
mortgagee of a vessel or a share in a vessel has the absolute power, subject
to any limitation set out in the registered mortgage, to sell the vessel or
the share.
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69 (1) Tout
créancier hypothécaire d’un bâtiment ou d’une part dans un bâtiment a le
pouvoir absolu, sous réserve des restrictions prévues dans l’hypothèque
enregistrée, de vendre le bâtiment ou la part.
|
[42]
I very much doubt that ss 68 and 69 are
applicable as the ship was not registered under the Act. However, all s 68 does
is make it clear that the mortgage creditor is not the owner, except to the
extent necessary to make the ship available as security. For example, a shipowner
faces strict or quasi-strict liability in a number of areas including oil
pollution and wreck removal. Section 68 makes it clear that a mortgage creditor,
as such, is not liable in respect thereof.
[43]
Section 69(1) confirms the traditional right of
a mortgage creditor to sell the ship. However, in this case, as is common, were
the Bank to sell the “Never E Nuff” it
would only be selling Mr. McMahon’s interest therein. If it is going to recover
anything, it wants a Marshal’s sale which would give title to a purchaser free
and clear of all liens and encumbrances.
[44]
Anyway one looks at it, the Bank continues to
enjoy a droit de suite which allowed it to arrest the “Never E Nuff” in Mr. St-Germain’s hands.
[45]
Based on a textbook, Mr. St-Germain submits that
under US law the Bank’s claim was subject to a three-year limitation. He did
not prove US law. In any event in this Court, except perhaps with respect to
matters arising wholly in Quebec, time-bar is a matter of procedure governed by
the lex fori, and must be pleaded, as it does not extinguish a right.
[46]
The earliest possible date on which time would
have begun to run is 2007 when Mr. McMahon sold the ship without the Bank’s
permission. The Bank’s claim was subject to a six-year time-bar under s 39(2)
of the Federal Courts Act as a cause of action arising otherwise than in
a province. Thus the action was timely when instituted in June 2012.
[47]
Section 140 of the Marine Liability Act
came into force September 21, 2009 and has established a general limitation
period of three years, subject to any overriding Act of Parliament, for all
causes of action arising under Canadian Maritime Law. This would displace the
six-year limitation period under s 39(2) of the Federal Courts Act.
[48]
Unlike other procedural statutes, statutes of
limitation of actions are not interpreted retrospectively so as to deprive a
party of an acquired right (Angus v Sun Alliance Insurance Co, [1988] 2
SCR 256; P.A. Côté, “Interprétation des Lois”, 4e
ed. (Toronto Carswell, 2011 at para 711 and 712); R. Sullivan, “Sullivan on the Construction of Statutes”, 5th
ed (LexisNexis 2008 at p 700).
[49]
Mr. St-Germain further submits that since
registration was not required under the Canada Shipping Act 2001, and in
fact was not registered while the ship was in his ownership, or Holand’s,
Quebec law applies. There is no question that under Quebec law (leaving aside
conflict provisions) the Bank’s mortgage is not opposable to Mr. St-Germain
because it was not registered pursuant to the provisions of the Quebec Civil
Code.
[50]
I have no hesitation in saying that if this were
purely a Quebec matter, a lender could register security on a pleasure craft
under Quebec law, which security would certainly be enforceable in the Federal
Court in virtue of s 22(3) of the Federal Courts Act. It does not follow,
however, that in the absence of such registration the security would not have
been enforceable. Furthermore, registration by the Bank of its mortgage under
the provisions of the Quebec Civil Code after Mr. McMahon had sold the
ship to Holand would have had no value.
[51]
The Federal Court was created by Parliament
under s 101 of the Constitution Act, 1867 for the better administration
of the federal laws of Canada be they statute, regulation or common law (Quebec
NorthShore Paper Co v CP Ltd, [1977] 2 S.C.R. 1054).
[52]
Canadian Maritime Law is uniform throughout the
country, is not provincial law and includes those English statutes and
principles of English common law applied in the English admiralty courts until
1934. The Federal Court only applies such provincial law as may be incidentally
relevant (The Buenos Aires Maru, above).
[53]
In order to determine whether a provincial
statute of general application is incidental to a claim based on Canadian
Maritime Law, one must consider Ordon Estate v Grail, [1998] 3 S.C.R. 437
as modified by Marine Services International Ltd v Ryan Estate, 2013 SCC
44, [2013] 3 S.C.R. 53 (The Ryan’s Commander). They set out four factors.
[54]
The first issue is whether a mortgage on a ship
is a claim under the exclusive federal legislative competence over navigation
and shipping. The answer is yes. The focus is on the object of the transaction,
not the transaction itself. Although in the abstract contracts of sale and
insurance fall within provincial legislative competence as matters of property
and civil rights, the sale of a ship and a marine insurance contract are matters
of navigation and shipping and form part of Canadian Maritime Law (Antares
Shipping Corp v The Capricorn, [1980] 1 S.C.R. 553; Skaarup Shipping Corp v
Hawker Industries Ltd, [1980] 2 FC 746 (FCA); and Zavarovalna Skupnost
Triglav v Terrasses Jewellers Inc., [1983] 1 S.C.R. 283). Mortgages on
maritime property clearly fall within Canadian Maritime Law.
[55]
The second issue is whether there is a federal
statutory counterpart to the provisions of the Quebec Civil Code.
Strictly speaking, it is not necessary to answer this question. The Canada
Shipping Act, 2001, would not have applied to the “Never E Nuff” as an American ship and to the
Bank’s American mortgage. This Court’s jurisdiction arises from its inherent
conflict of law rules (Tropwood AG et al v Sivaco Wire & Nail Co et al,
[1979] 2 S.C.R. 157 (The Tropwood)), and since foreign law was not proved,
the merits are governed by common law.
[56]
If we take the position that there is no
Canadian statute directly on point, the third question to be posed is whether
the lex non scripta of Canadian Maritime Law should be altered. The
answer, in my opinion, is no. Canadian Maritime Law recognizes unregistered
mortgages (The Phoenix Sun, above).
[57]
The fourth and final issue is if the lex non
scripta should not be changed, does the provincial law trench upon a
protected “core” of federal competence? In my
opinion, it does. This is not a case such as The Ryan’s Commander in
which the Supreme Court noted that provincial Workers’ Compensation statutes
had been applied in maritime matters for more than a century. In the case of
conflict, the federal law would be paramount.
[58]
Having concluded that Lakeland holds a valid
mortgage on the “Never E Nuff” which is
opposable to Mr. St-Germain, the next issue is that of quantum, both principal
and interest. This may be an exercise in futility as no evidence has been led
as to the “Never E Nuff’s” present value.
There is no information as to the manner in which she has been maintained over
the past four years.
[59]
I begin with the conversion of the US dollar
into Canadian dollars. This Court follows the breach-day rule (Gatineau
Power Co v Crown Life Insurance Co, [1945] S.C.R. 655; NV Bocimar SA v
Century Insurance Co (1984), 53 NR 383, [1984] FCJ No 510, reversed, but
not on this point at [1987] 1 S.C.R. 1247).
[60]
Although it could be said that Mr. McMahon
breached the Retail Instalment Contract in 2007 when he sold the ship to Holand
without the Bank’s knowledge and consent, it only had knowledge of a breach in
March 2008 when Mr. McMahon stopped making payments. The exchange rate at that
time, which rate I shall use, is that the US dollar was worth 1.0028, at the
Bank of Canada’s noon day rate.
[61]
The American judgment rendered in 2010 covered
principal, interest and costs. The Statement of Claim filed in this Court in
2012 did not claim interest with respect to that two-year gap. I am not
prepared to grant what the Bank did not ask. Mr. Hussein adopted the Bank’s
testimony in the US action. I accept that as of April 14, 2010, the principal
amount owing on the loan was US $132,042.55 with accrued interest of
$24,241.79. The balance of the judgment covered the transfer of monies from a
reserve fund, costs and attorneys’ fees which had been covered in the loan
application. No evidence has been led in this Court about the reserve fund and
I am not prepared to award American costs which were awarded against Mr.
McMahon, much less solicitor-client costs, against the ship. Costs are a matter
of discretion.
[62]
Thus, as of June 8, 2012, the date on which this
action commenced, the amounts which could be levied against the ship were US $132,042.55
in principal and US $24,241.79 in interest or CAD $132,412.26 and $24,309.66.
[63]
In Canadian Maritime Law, prejudgment interest
is a function of damages, left to the discretion of the Court (Bell
Telephone Company of Canada v The Mar-Tirenno, [1974] 1 FC 294 (FCTD); Kuehne
+ Nagel Ltd v Agrimax Ltd, 2010 FC 1303). The Court in its discretion may
decide not to apply the contractual rate agreed between the parties (Mount
Royal/Walsh Inc v The Jensen Star, 17 FTR 289, [1988] FCJ No 141 (FCTD)
(QL), varied but not on this point [1990] 1 FC 199, 1989 FCJ No 450 (FCA) (QL)).
[64]
The Bank claims interest at commercial rates,
but has made no proof thereof. Under the Interest Act, the legal rate is
5%. I will grant pre-judgment interest at that rate on the sum of $132,412.26
from June 8, 2012, i.e. $28,550.40.
[65]
Turning now to Mr. St-Germain’s counterclaim, there
are two elements thereto. He claims an abuse of process because the Bank sued
him personally and a further abuse of process because the Bank seized items not
covered by the mortgage and would not return them.
[66]
I dismiss the counterclaim, but there may be
cost elements. The claim against Mr. St-Germain personally had no merit. He
should have moved at the outset to have that portion of the action struck, but
he did not.
[67]
Although he vigorously defended the claim
against the ship, I have found that the Bank held a valid mortgage. There may
well be costs consequences flowing therefrom.
[68]
On the other hand, the Bank arrested more than
what was covered by the mortgage. Although the mortgage, as is usual, includes
accessories, a trailer, which is used to haul the ship on land, not in the
water, cannot be considered an accessory. See Isen v Simms, 2006 SCC 41,
[2006] SCR 349.
[69]
Mr. St-Germain’s uncontradicted evidence is that
he demanded return of the trailer and other items but the Bank refused. On the
other hand, he should have exercised his rights and promptly moved to have that
portion of the arrest set aside.
[70]
I do not consider the Bank’s activities
malicious, although they were ill-advised. The remedy for wrongful arrest
absent such behaviour is costs. (Armada Lines Ltd. v Chaleur Fertilizers Ltd.,
[1997] 2 S.C.R. 617). The Bank is to return the trailer and Mr. St-Germain’s other
personal items. Nothing prevents Mr. St-Germain and the Bank entering into a
purchase agreement.
[71]
Finally, as aforesaid, Mr. St-Germain’s claim
against Holand falls because the Bank’s claim against him is dismissed. Again,
costs may be spoken to.
VII.
Official Languages Act
[72]
Mr. St-Germain’s pleadings, evidence and
submissions were in French. The other parties pleaded in English. Section 20 of
the Official Languages Act provides a final judgment should be issued
simultaneously in both English and French when the proceedings were conducted
in whole or in part in both official languages. However, the section goes on to
provide that a judgment may be first issued in one language if simultaneous
publication would, among other things, result in an injustice or hardship to
any party. The parties are most anxious to have a decision rendered as soon as
possible and so agreed that it first be issued in one language, with a
translation to follow. It should be noted that a similar situation arose in The
Phoenix Sun, above. That decision was rendered May 26, 2016. A translation
is not yet available.
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