Federal Court Reports
Global Enterprises International Inc. v. Aquarius (The) (T.D.) [2002] 3 F.C. 50
Date: 20011128
Docket: T-16-01
Neutral citation: 2001 FCT 1311
ACTION IN REM AGAINST THE SHIP "AQUARIUS", THE SHIP
"SAGRAN" and THE SHIP "ADMIRAL ARCISZEWSKI"
AND IN PERSONAM
BETWEEN:
GLOBAL ENTERPRISES INTERNATIONAL INC.
Plaintiff
and
THE OWNERS AND ALL OTHERS INTERESTED IN THE
SHIPS "AQUARIUS", "SAGRAN" AND "ADMIRAL
ARCISZEWSKI", THE SAID SHIPS "AQUARIUS",
"SAGRAN" and "ADMIRAL ARCISZEWSKI", THE SAID
SISTERSHIPS "AQUARIUS", "SAGRAN" and "ADMIRAL
ARCISZEWSKI" and GRYF DEEP SEA FISHING COMPANY
Defendants
and
SK SHIPPING CO. LTD., and
COLTRANE TRADING LIMITED
Intervenors
AUTHORITIES OF THE THIRD PARTY SK SHIPPING CO. LTD.
REASONS FOR ORDER
JOHN A. HARGRAVE, PROTHONOTARY
[1] The "Aquarius", "Sagran" and "Admiral Arciszewski", which are substantial factory trawlers (collectively the "Trawlers" ), together with their crews, were abandoned at Vancouver by the owner of the Trawlers, Gryf Deep Sea Fishing Company. This proceeding involves the arrest of the Trawlers by maritime creditors, the sale of the ships, the filing of affidavits of claim against the sale proceeds and a determination of priorities to the sale proceeds. The first three steps being accomplished, the issue of priorities remains to be determined in due course.
[2] As a procedural matter the Intervenor, SK Shipping Co. Ltd., now seeks to strike out the affidavit of claim supporting a request by the Polish Trustee in bankruptcy of the former owner of the Trawlers, that the entire sale proceeds be sent to Poland to form the estate of the bankrupt, Gryf Deep Sea Fishing Company. The affidavit is in the form of a notarial deed, setting out, second hand, the advice received by the notary from the Syndic, being the trustee in bankruptcy.
[3] Also relevant on this present motion are the claims in this action, which have been made by affidavits of claim against the sale proceeds. By reason of conditions at the time of the sale the Trawlers fetched a price in excess of their market value appraisals. However, the apparent in rem claims, claims which prima facie appear sound, including the claim of the mortgagee, being secured claimants, substantially exceed the available sales proceeds. To elaborate, the Trawlers were appraised at a total of $2,650,000 (US); the market, strengthening by the time of the sale, the Trawlers realized, before sale expenses, $4,840,000 (US); sale expenses were approximately $150,000 (US), leaving net proceeds of $4,690,000 (US) and those who claim as secured creditors, with deemed marshall's expenses or prima facie liens and mortgages, and those with prima facie statutory rights in rem, applying rough and ready exchange rates, seek about $10,170,000 (US). Of the $10,170,000 (US) claim figure, in excess of $9,500,000 is sought by those who are said to be secured by either deemed marshall's expenses, maritime liens or mortgages. On this basis there may well be nothing for those who claim by statutory right in rem, let alone for those with only in personam rights.
ANALYSIS
Issues to Consider
[4] The initial issue is that of when the Federal Court will strike out an affidavit, here the affidavit of claim in support of the claim of the estate of the owner in bankruptcy. The estate is represented by a Syndic: I do not take the term Syndic to have any meaning beyond that of one who has been deputed to represent and transact the affairs of Gryf Deep Sea Fishing Company. In short, the Syndic, as the term is used here, is a trustee rather than a person with magisterial powers.
[5] There then follows the consideration of the grounds relied upon by SK Shipping Co. Ltd. ("SK Shipping") on its motion to strike out the affidavit, being that:
1. The affidavit of claim of the Syndic is not in the first person as required by Rule 80; and it is not prepared on personal knowledge, or on information believed supported by evidence, as required by Rule 81;
2. The affidavit of claim of the Syndic has no supporting evidence whatsoever, and as such will delay the fair trial of this action and prejudice other claimants;
3. The affidavit of claim of the Syndic does not set out an in rem claim;
4. The Federal Court is without jurisdiction to hear a claim in bankruptcy;
5. The affidavit of claim and the actions of the Syndic are an abuse of the process of this Court.
SK Shipping, among other rules, relies upon Rules 221(1)(b), (c), (d), and (f). More specifically, the affidavit is said to be immaterial, scandalous, frivolous or vexatious, that it may prejudice or delay a fair trial and that both the affidavit of claim and the tactics employed by the Syndic are an abuse of the process of the Court.
Striking out an Affidavit
[6] Generally, affidavits ought not to be struck out at a preliminary stage. For the sake of efficiency, impugned affidavits should be left for the trial judge, who may be in a better position to assess and weigh that evidence. However, there are exceptions to this general observation, exceptions which involve special circumstance, including where an affidavit is abusive, or is clearly irrelevant, or where the Court is convinced that admissibility should be resolved at an early stage, so that the ultimate hearing might proceed in an orderly manner, or where there is conjecture, speculation or legal opinion in the affidavit. This is set out, together with some of the case authority, in the Governor and Company of the Bank of Scotland v. The Ship Nel, an unreported decision of 19 October 1998 in action T-2416-97:
[3] The present proceeding, a determination of in rem priorities by motion and on affidavit material, is summary in nature. To maintain the efficiency of such proceedings parties ought not, generally, to be permitted to strike out each other's affidavits. The exceptions to this generalization are where an affidavit is abusive or clearly irrelevant, or where a party has obtained leave to admit evidence which proves to be obviously inadmissible, or where the court is convinced that admissibility should be resolved at an early date so the eventual hearing may proceed in an orderly manner: see for example Home Juice Company v. Orange Maison Ltd., [1968] 1 Ex.C.R. 163 at 166 (President Jackette) and Unitel Communications Co. v. MCI Communications Corporation (1997), 119 F.T.R. 142. In the latter Mr. Justice Richard, as he then was, observed that the trial judge would be in a better position to assess the weight and admissibility of such affidavit material (pages 143 and 145). Of course, conjecture, speculation and legal opinion have no place in an affidavit . . .
On this basis and keeping in mind Rule 221, SK Shipping must convince me that the Syndic's affidavit is abusive, or clearly irrelevant, in the sense of being immaterial or vexatious, or is an abuse in the sense of prejudicing or delaying and orderly and fair hearing of the priorities determination, or contains elements which have no place in an affidavit. The burden on S.K. Shipping is to establish that it is plain, obvious and beyond doubt that the Syndic's claim to the sale proceeds, or indeed to any part of them, cannot succeed. This is a heavy burden.
The Affidavit
[7] Much of the affidavit of 9 July 2001, which is in the form of a notarial deed, is taken up with formalities, including an identification of Mr. Kucharuk, the Syndic, and a memorandum of the notarial fees. The documents only substance is a short statement apparently given by the Syndic to the notary public, which is then set out by the notary in the third person:
1. Michal Kucharuk, Attorney at Law, states as the Syndic of the Estate in Bankruptcy (the Trustee) of Deep Sea Fishing Company, "GRYF", the State owned company in Szczecin that in accordance with the Polish Bankruptcy Law he acts as the Judicial Body of universal execution on behalf and in interest of all the creditors. Thus, all the proceeds obtained from selling any elements of the bankrupted debtor estate should be added to the funds of the estate in bankruptcy.
He states that he lays, on behalf of all the creditors, the claim in amount of PLN 75.346.746,50 (seventy five million and three hundred forty six thousand and seven hundred forty six Polish zloty and 50/100 PLN), having - in accordance with the Polish Bank exchange rate of 6th July 2001 - equivalent value of USD 18.416.783,95 (eighteen million and four hundred sixteen thousand seven hundred eighty three US Dollars and 95/100 USD) and he tables a motion of remitting all the amounts, up to the amount obtained from the buyers offering purchase of the vessels: M/t "AQUARIUS", M/t "ADMIRAL ARCISZEWSKI", M/t "SAGRAN", arrested in Port of NORTH VANCOUVER, into the bank account: Portis Bank Polska S.A. O/Szczecin Account No.: 16001260-4090-270238-021. He states that in accordance with an earlier advertisement in "Lloyd's List" and cautions addressed to the Federal Court in Vancouver and to the appointed by this Court Acting Sheriff as well, Mr. Kucharuk proceeding with distribution of the aforesaid amounts not within the bankruptcy proceedings is unlawful.
[8] As I say, the affidavit is in the third person. However, it is also a bare statement by the Syndic, some of it opinion and even legal opinion, with neither documentary verification of the amounts claimed, nor identification of the creditors, nor identification of the sources of the information which, at best, must be at least third hand heresay. Interestingly, the Syndic claims on behalf of all creditors: this would seem to ignore the fact that there are a number of creditors, including Polish creditors, who have made claim by themselves in the Federal Court, at least one group of which, the officers and crew members who claim maritime liens, seem to have ignored the Polish proceedings entirely.
[9] I now turn to the grounds for the motion upon which SK Shipping relies. It is unfortunate both that the material which the Syndic has sent to the Court and to the parties by facsimile is irrelevant in that it does not meet the points raised in the motion record of SK Shipping and that the Syndic, who has gone through either two or three lawyers here in Canada, did not see fit to appoint counsel or at least get some professional advice, for the Syndic may, as Mr. Justice Rouleau suggested in his 18 October 2001 order, end up without any standing before the Court and indeed, as I have found, without any claim.
Form of the Affidavit
[10] Under this subheading I will consider whether the affidavit, in the third person and not prepared on either information or belief supported by evidence and indeed, without any supporting evidence, ought to be accepted. I will also consider whether, because of these shortcomings, the affidavit will delay a fair trial, to the prejudice of the other claimants who have made the effort to produce affidavits, which contain the necessary evidence, in a more conventional form.
[11] The rules relied upon by counsel for SK Shipping are 80(1) and 81(1), however I also believe that Rule 81(2) comes into play:
80. (1) Form of affidavits - Affidavits shall be drawn in the first person, in Form 80.
81. (1) Content of affidavits - Affidavits shall be confined to facts within the personal knowledge of the deponent, except on motions in which statements as to the deponent's belief, with the grounds therefor, may be included.
(2) Affidavits on belief - Where an affidavit is made on belief, an adverse inference may be drawn from the failure of a party to provide evidence of persons having personal knowledge of material facts.
The reference to Form 80 is to the general format for an affidavit which is set out following the Federal Court Rules themselves.
[12] In the present instance there is the difficulty that affidavits in Poland are apparently not in the first person, but done as a notarial deed, the notary setting out what he or she has been told and then swearing to that himself or herself. There are older cases in which English courts have accepted affidavits made in the third person, where that was customary in the country of origin and returning the affidavits to have them re-sworn was unreasonable: see for example Blamey v. Blamey [1902] W.N. 138 and Re Husband (1865) 12 L.T. 303. However this certainly puts the other side at a disadvantage, for there is no one, with any real knowledge, to cross-examine. The Syndic submitted, at some point, that it was not possible to swear an affidavit in Poland other than in the form of a notarial deed. Mr. Justice Cattanach, in Kemanord AB v. PPG Industries Inc. (1980) 49 CPR (2nd) 29 suggests a simple and sensible approach to having affidavits sworn outside of Canada: such an affidavit may, through the use of a combination of rules, be sworn before a foreign notary public. This approach would avoid having to locate an appropriate diplomatic or consular officer or other Canadian official as specified in sections 49 and 50 of the Canada Evidence Act.
[13] Rule 80(1) makes it clear that an affidavit must be in the first person, a rule clearly breached by the Syndic's affidavit. Mr. Justice Collier, in Nissho Iwai Corporation v. The Opal City (1987) 11 FTR 134 at 139 dealt with an affidavit which was not drawn in the first person. He pointed out that cross-examination on that affidavit would likely have been relatively unproductive and that, in his view, it detracted from the weight to be given to the affidavit evidence.
[14] Turning to Rule 81(1), which allows affidavits, upon motions, to be sworn on the grounds of information and belief, with the grounds included, the Syndic's affidavit is clearly in breach. Moreover, the failure on the part of the Syndic to provide the best evidence, that is, his own affidavit, or the affidavits of the actual claimants, goes to the weight to be accorded to the affidavit: see for example Lumonics Research Ltd. v. Gould [1983] 2 FC 360 (C.A.). In Lumonics Mr. Justice Pratte declined to find an affidavit, sworn on rather tenuous information and belief, to be inadmissible. Rather, he felt it might have little or no weight or probative value. This is consistent with Ethier v. Canada [1993] 2 FC 659 (C.A.), in which Mr. Justice Hugessen noted, on the basis of the Supreme Court of Canada decision in R. v. Smith [1992] 2 S.C.R. 915, that the categorical approach to heresay has given way to admissibility on a principled basis, that is, the reliability of the evidence and its necessity (page 933 of Smith). The Supreme Court of Canada in Smith went on to point out that necessity and reliability being determined, an inability to test the evidence by cross-examination goes not to admissibility, but rather to weight: page 935. In the present instance it would appear that a judge might, despite some of the questionable evidence, legal opinions and abusive comments, attributed to the Syndic, determine that there was some residual reliability in the affidavit. The matter of necessity would be much more difficult to establish. However it is certain that the affidavit would be given little weight and all the more so because the claims are neither explained, nor identified, nor documented with exhibits, and indeed, were the affidavit accepted, it would clearly invoke the adverse inference referred to in Rule 81(2) by reason of its third hand approach. However, this aspect requires further consideration.
[15] That there is no documentary evidence supporting the Syndic's claim to the sale proceeds is surprising, for it prevents the Federal Court claimants from knowing the identity of the creditors whom Syndic purports to represent, or whether the debts are with respect to the Trawlers, the extent, if any, of the duplication between Federal Court claimants and claimants in the bankruptcy proceedings and whether the debts claimed by the Syndic are valid and properly admissible.
[16] All of this in turn could well deprive a Federal Court claimant from any real cross-examination of the creditors, for there is no indication of who should be examined and nothing to indicate whether that person even ought to be examined. The principle which has recently been applied by the Federal Court is that irregularity will not result in an affidavit being struck out unless the moving party can show prejudice: see for example Sawridge Band v. Canada, unreported reasons 10 February 2000 in Court file numbers T-66-86A and T-66-86B, in a decision of Mr. Justice Hugessen. In Sawridge the affidavit at issue was clearly improper, however a saving grace was that almost all of the improprieties in the affidavit were proper argument. Mr. Justice Hugessen observed:
. . . I have not been persuaded that the affidavit should be struck. In my view, in a sane modern procedure, irregularities in proceedings should not be made subject of motions and should not require the Court to give orders striking out or correcting such irregularities unless the party attacking the irregularity can show that it suffered some sort of prejudice as a result thereof. (Paragraph 6)
In the present instance the very essence of affidavits of claim in a ship sale proceeding is to set out the nature of the claim so that it may be fitted into the long established framework of in rem priorities and, where necessary, the claim be subjected to rigorous cross-examination. Merely to lay claim to some eighteen million dollars (US), "on behalf of all creditors", without identifying the creditors or the nature of their claims in order to establish in rem priorities and to indicate whether cross-examination might be called for, may well prejudicial to those who claim only in the Federal Court and it is particularly prejudicial to the secured in rem claimants who have apparent maritime liens and mortgages. Yet the Syndic's affidavit it patently of so little substance and weight that I do not see, in this instance, how any real prejudice, as called for in Sawridge, might arise.
[17] In summary, while the affidavit is very irregular and contains many deficiencies, there is no real prejudice and thus, even such a light weight affidavit ought not to be struck out for those shortcomings alone.
Claim not In Rem
[18] Counsel for SK Shipping submits that only claims with respect to the res ought to be permitted in a priorities proceeding. Here counsel refers to a 24 April 2001 order in this action directing that in rem creditors and mortgagees must file their claims by way of affidavit in the Federal Court. Counsel also, by way of further anecdotal authority on this aspect, observes that the holder of an in personam claim in The "Nel" [2001] 1 FC 408, at 461-462, was unable to succeed.
[19] There is substance in the argument that since the Syndic does not allege that any of the debts are in rem, or even that the debts are in relation to the subject Trawlers themselves, that the claim ought not to be permitted at a priorities hearing. However there are other aspects to consider. Here I would note that the admiralty jurisdiction of the Federal Court may, by section 22 of the Federal Court Act, be exercised between subject and subject, as well as in rem pursuant to section 43 of the Act. In The Nel (supra) there were no surplus funds, after payment of the balance of the sale proceeds to the mortgagee, which might have gone to those with merely statutory rights in rem. However, had those statutory rights in rem been satisfied, and had the owner appeared in personam, any balance, might well have been claimed by those who merely had in personam claims.
[20] At this point one must also keep in mind the relationship between in personam and in rem proceedings in Canada, with the latter being firmly founded on the in personam liability of the owner. Yet in the present proceeding there seems to have been no service on the owner of the Trawlers, nor has the owner appeared and for good reason. We are left with a pure in rem proceeding, but there is no in rem facet to the Syndic's affidavit of claim. This is no mere procedural difficulty, for the difference between the apparent in personam claim which the Syndic makes by affidavit, and the in rem required in order to partake in the sale proceeds, is a matter of substance: see, for example, The City of Mecca (1881) 6 P.D. 106.
[21] The City of Mecca highlights the importance of differentiating between in rem and in personam proceedings. There the plaintiffs obtained an in personam judgment in Lisbon against the master and owners of the ship, which they then sought to enforce in rem in England. The Court of Appeal set aside the proceedings in England, noting the importance that proceedings clearly differentiate between in rem and in personam causes of action. Jessel, M.R., after observing that the proceeding to sell the vessel in England had an in personam base, asked "what is there to argue" (page 112), but then went on to observe that the Portuguese in personam proceeding and judgment had no effect on the ship whatsoever. Dr. Lushington, who was also on the panel, wrote reasons, a portion of which are quoted from time to time. He observed that it was most important that proceedings involving the sale of a ship show, on their face, not only the reasons for the claim and sale, but also that the claim is not merely in personam against the owners. A portion of his reasons, at page 116, is worth setting out:
... It is part of the law of nations that Courts of Admiralty in different countries have the power to condemn vessels and order them to be sold for the satisfaction of a maritime lien. Maritime liens are recognised by all civilized nations, and damage by collision is classed among those things which create a maritime lien; and had this been a judgment in rem, that is to say a judgment condemning the ship and ordering the ship to be sold in order to satisfy the maritime lien, that judgment would have been recognised in this country and every other civilized country. But it is most important that proceedings under which the sale of another vessel takes place should shew on the face of them the authority why that property is to be diverted from the owner; because the purchaser's title is recognised by all nations, and the title depends on the circumstances under which the sale takes place. Therefore it is important that the judgment should shew on the face of it that the proceedings against the vessel are not merely against the owners as such, or the captain, but that the proceedings had in contemplation the ultimate sale of the ship and a judgment ordering the ship to be sold; and if this does not appear on the face of the proceedings then the title of the purchaser has nothing to support it. It is not a mere matter of form but a matter of substance that the decree under which the sale is attempted to be justified should be shewn on the face of the proceedings.
[22] In the present proceeding, there is nothing on the face of the Syndic's affidavit of claim to indicate an in rem aspect, or any link to the ships. This, as Dr. Lushington notes, goes beyond a mere procedural difficulty. That the Syndic may have, as trustee in bankruptcy, an apparent in personam claim, is completely irrelevant. The Syndic's claim, as presented, has no effect on the Trawlers or on their sale proceeds.
[23] Of interest here is Ultramar Canada Inc. v. Pierson Steamship Ltd.(1982) 43 C.B.R. 9 (F.C.T.D.), a proceeding both in rem and in personam, during which proceeding the Canadian defendant owners filed for bankruptcy. The statements of claim appeared to set out reasonable in rem causes of action within the jurisdiction of the Federal Court. The trustee in bankruptcy moved to cancel the various statements of claim and arrest warrants with a view to having the vessels released to the trustee. While Mr. Justice Mahoney was prepared to release the ships, it was only on condition that the trustee deposit funds in court to completely secure those creditors who were secured by their maritime liens against the vessels
[24] As I read the Ultramar case it did not constitute participation by the trustee in bankruptcy in anin rem action, but merely the trustee acting, as could any owner, to post bail in order to obtain release of arrested ships.
[25] That the trustee in bankruptcy in Ultramar then intended to proceed with his action in the Bankruptcy court has no direct relevance here, except that were there sale proceeds in excess of the claims of secured lien on mortgage holders, the Syndic ought to have proceeded in the B.C. Supreme Court as the proper jurisdiction for a bankruptcy proceeding, relying upon Part XIII of the Bankruptcy Act, as amended.
[26] The Syndic's affidavit, which lacks an in rem claim, is completely irrelevant. It may, on the basis of Governor and Company of the Bank of Scotland v. The Ship Nel (supra), be struck out. Moreover, the claim of the Syndic is in bankruptcy, an aspect to which I now turn.
No Jurisdiction to Hear the Affidavit
[27] The affidavit of the Syndic does make it clear that the claim is one in bankruptcy. A close consideration of the affidavit does not reveal anything which would bring the claim within the jurisdiction of the Federal Court. While a trustee in bankruptcy may continue the action of a bankrupt (see Rules 116 and 237(5)), any proceedings by a trustee in bankruptcy must begin in the superior courts of the relevant province: see section 183 of the Bankruptcy Act, Chapter B3 of RSC 1985, as amended.
[28] As I have already said, the Syndic does not purport to set out a claim in rem, or a claim for anything other than a claim in bankruptcy. That being the case the Federal Court, as a statutory court and on the basis of ITO Int. Terminal Operators Ltd. v. Miida Electronics Inc. [1986] 1 S.C.R. 752 at 766, has no jurisdiction, for there is no statutory grant of jurisdiction by the Federal Parliament. Further, no amendment would assist the Syndic. Thus, on this ground, the affidavit is struck out, without leave to amend. To allow it to proceed, through to the priorities hearing itself, would be to allow a clearly and completely irrelevant claim to perpetuate an abuse not only of the Court's procedure, but also of all of the bona fide Federal Court claimants.
[29] This outcome should come as no surprise to the Syndic, for Mr. Justice Rouleau wrote, in his order of 18 October 2001 that:
It is evident from the correspondence between counsel and the Trustee in Bankruptcy that the latter has failed to follow the advice of his counsel by failing to bring a motion in Supreme Court of British Columbia to have the Trustee recognized as a foreign representative of the Polish bankruptcy proceeding. In light of this deficiency, thought he Trustee has attempted to participate in these proceedings, he cannot be considered a Defendant to this matter and possibly could end up without standing before the Court.
The Affidavit as an Abuse of the Process of the Court
[30] Leaving aside that the affidavit is a claimant bankruptcy and should be struck out as being beyond the jurisdiction of the Federal Court, I should, so that the Syndic might know all of what transpired on the hearing of the motion to strike out the affidavit, consider the final ground argued, that of abuse of process.
[31] Counsel for SK Shipping submits that both the affidavit and the conduct of the Syndic is an abuse of the Federal Court process and that such abuses are grounds for striking out the affidavit. In considering this aspect I would refer to The Nel (supra) for authority for striking out an abusive affidavit and for striking out an affidavit which contains conjecture and legal opinion.
[32] In striking out an affidavit as an abuse of process I am particularly aware that I ought to exercise my jurisdiction to strike out with restraint: see for example Sierra Club of Canada v. Canada (1999) 159 FTR 24 at 34. On this principle, I am prepared to strike out portions of paragraphs which clearly appear to be severable, as in Sierra Club at page 35. However, I am not prepared to go so far as to dissect and delete portions of sentences, a point made by Mr. Justice Teitelbaum in Gingras v. Canadian Security & Intelligence Service (1988) 19 C.P.R. (3rd) 283 at 287.
[33] The first paragraph of section 1 of the notarial deed, as phrased in a single sentence, constitutes legal opinion and conjecture. It is thus struck out.
[34] The first sentence of the second paragraph of section 1, claiming eighteen million dollars, also sets out that the Syndic purports to act for all creditors, at best a doubtful proposition, but one which otherwise might remain.
[35] As to the remaining substance of the notarial deed, a last sentence in the second paragraph, there the Syndic advises, through his notary, as to the unlawfulness of the actions of the Federal Court and the Court appointed acting sheriff. The Syndic then goes on to refer, through his notary, to an advertisement of 12 June 2001 in Lloyd's List. That advertisement, which appeared well after the Syndic and his then counsel were directly involved and were seeking relief in this proceeding, handicapped the sheriff in selling the Trawlers, for it gave notice to the shipping community, world wide, that the Federal Court sale was, in the view of the Syndic, illegal and that no bill of sale would be effective to delete the Trawlers from the Polish shipping registry unless it were signed by the Syndic. At that point counsel for the Syndic was advised of The "Cerro Colorado" [1993] 1 Lloyd's 58, a decision of Mr. Justice Sheen. There the Court ordered the "Cerro Colorado" appraised and sold by the admiralty marshal, the marshal also to deal with the safety of the ship and the repatriation of master and crew. The Court's order was made 13 April 1992.
[36] On 10 June 1992, the sale of the "Cerro Colorado" was opposed by off shore trade unions, who placed an advertisement in Lloyd's List in June of 1992 impugning the court ordered sale. In effect the advertisement amounted to a warning that the debt owed to the trade union members would remain not withstanding the sale ordered by the Court of Queen's Bench. There followed an order of an offshore court, apparently in personam and the intervention of various offshore embassy and councillor officials. Mr. Justice Sheen was not amused, particularly in that the claim by the trade unions was for redundancy money, which did not enjoy a claim of maritime lien. He went on to point out that a sale by court order gave the purchaser a title free of all liens and encumbrances, a title valid against the whole world and recognized by the courts of all countries, a concept at one time set out in English case law, but now embodied in the Arrest Convention.
[37] In The "Cerro Colorado" Mr. Justice Sheen then turned to the topic of contempt of court. He found that there was no doubt that the advertisement in Lloyd's List and indeed a subsequent article commenting on the advertisement, might be treated as contempt of court, as tending to interfere with the administration of justice. He went on to say that no action would be taken in respect of the advertisement or the article, but that any repetition would be regarded as a serious contempt.
[38] In the present instance, it is best for all concerned, as a saving in time and expense, merely to look upon the warning given by the Syndic in Lloyd's List, as an abuse of the process of the Federal Court, not as a contempt. It is all the more so an abuse in that the Syndic, while casting aspersions on the Federal Court, in a statement made to the international maritime community at large, still seeks to take advantage of the process of the Federal Court by claiming entitlement to the entire proceeds of the judicial sale. However I do not think the abuse stops here.
[39] Throughout the course of this action the Syndic has hampered the efficient and orderly progress of this action. Twice the Syndic appealed orders, but did not proceed with the appeals. In one instance an appeal and allegations in the material had the effect of clouding the title of the purchasers of the Trawlers. That appeal was particularly insidious in that it was served on the participants in this action and generally became public knowledge, but the material was never filed in the Court and was not proceeded with. This forced the purchasers to bring a motion to have the so called appeal declared of no force and effect.
[40] The actions of the Syndic have been an abuse of the process of the Court. Had I not struck out the affidavit on the basis of an absence of jurisdiction of the Federal Court as to bankruptcy, I would strike out the affidavit by reason of being abusive in the context of an overall abuse by the Syndic of the process of this Court.
CONCLUSION
[41] The notarial deed of 9 July 2001, which I have also referred to as an affidavit, is struck out as this Court does not have jurisdiction to deal with bankruptcy proceedings. No amendment will be of assistance and thus the striking out is without leave to amend.
[42] The intervenor, SK Shipping, the Plaintiff and Triton Marine Group Inc., a claimant, who participated actively on this motion, shall have their costs, all as more fully set out in the order of 19 November 2001.
[43] I thank counsel for their efforts, both in presenting their positions to the Court and in endeavouring to explain to me what might best be characterized as generally unclear material filed, from time to time, by the Syndic.
(Sgd.) "John A. Hargrave"
Prothonotary
Vancouver, British Columbia
28 November 2001
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-16-01
STYLE OF CAUSE: Global Enterprises International Inc. v. The Ships
" Aquarius", "Sagran" and "Admiral Arciszewski" et al.
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: November 19, 2001
REASONS FOR ORDER OF HARGRAVE P.
DATED: 28 November 2001
APPEARANCES:
Ms. Pauline Gardikiotis FOR PLAINTIFF
Mr. Chris Giaschi FOR INTERVENOR SK Shipping Co. Ltd.
Mr. William Perrett FOR CAVEATOR Triton Marine Group Inc.
Mr. Simon Barker Vancouver Port Authority
SOLICITORS OF RECORD:
Campney & Murphy FOR PLAINTIFF
Vancouver, British Columbia
Giaschi & Margolis FOR INTERVENOR SK Shipping Co. Ltd.
Vancouver, British Columbia
Faskin Martineau DuMoulin FOR INTERVENOR Coltrane Trading Limited
Vancouver, British Columbia
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