Date: 20000515
Docket: T-123-00
ADMIRALTY ACTION IN REM AND IN PERSONAM
BETWEEN:
ROXFORD ENTERPRISES S.A.
Plaintiff
-and-
THE GOVERNMENT OF THE REPUBLIC OF CUBA, THE MINISTRY
OF FISHING INDUSTRY AND MERCHANT MARINE (MINISTERIO
DE LA INDUSTRIA PESQUERA Y MARINA MERCANTE), THE
MINISTRY OF TRANSPORT, EMPRESA NAVEGACION MAMBISA,
and NAVIERA POSEIDON, O.E.E.
Defendants
(In Personam)
-and-
THE OWNERS AND ALL OTHERS INTERESTED IN THE
VESSELS M/V CALIX, M/V AJANA (ex CARIBBEAN QUEEN),
M/V GABYANA (ex CARIBBEAN PRINCESS), M/V AVON, M/V
LOTUS ISLANDS, M/V LILAC ISLANDS, M/V AGATHE ISLANDS,
M/V WEST ISLANDS, M/V ODELYS (ex ROSE ISLANDS), M/V SOUTH
ISLANDS, M/V EAST ISLANDS, M/V TEPHYS, M/V RIO YATERAS, M/V
RIO CUYAGUATEJE, M/V RIO NAJASA, M/V LILIET, M/V SANTANITA,
M/V ANACAONA, M/V GUARIONEX, M/V DAIQUIRI, M/V CAJIO, M/V
MINAS DEL FRIO, M/V GRAN PIEDRA, M/V MAGNOLIA REEFER,
AND M/V BOLIVAR
Defendants
(In Rem)
REASONS FOR ORDER AND ORDER
GILES A.S.P.
[1] The following are abbreviated reasons for my decision made from the Bench at the conclusion of the hearing. The motions before me sought to strike, on the basis of lack of jurisdiction, those parts of the Statements of Claim related to an action in rem in connection with which a Cuban ship has been arrested and another action in rem in which a caveat release has been filed. Counsel for the caveator has stated that should I determine the Court has no jurisdiction in rem against the ship and order the ship released, the caveat should also be struck.
[2] The action arises from an alleged breach of a contract made for the purpose of the sale of a certain ship, the Canadian Challenge ex Calix ("the Calix") to the plaintiff. It is alleged that the ship was to be free and clear of all liens. After sale the plaintiff had to pay off liens to get title and then got a title which allegedly was clouded. Thereafter, when calling in Cuba the Calix was arrested. The plaintiff alleges that both the vendor company and the arresting company were agents of the government of Cuba. The Statements of Claim in rem name a number of Cuban ships which the plaintiff alleges are "sister ships". One of the alleged sister ships has been arrested. That arrest gives rise to these motions which, as previously stated, seek to strike those parts of the Statement of Claim relating to the actions in rem.
[3] At the start of the hearing, the moving defendant objected to the filing of a number of extracts of Lloyd"s Lists from over the years, attached to the plaintiff"s Memorandum of Argument and not supported by affidavits. The same extracts were also attached to the transcript of a cross-examination of one of the defendants" affiants. The plaintiff sought to file documents with respect to White Swan Shipping Company Limited (hereafter "White Swan"), also unsupported by affidavits. I noted that both the Lloyd"s and White Swan documents were improperly before me, but, both could be important and should really be before the Court. If I were to adjourn to allow these documents to be filed, supported by appropriate affidavits, there would have to be further adjournments for cross-examination on those affidavits. I therefore suggested I would allow the documents to be before the Court to avoid delay, noting the respective objections of the parties.
[4] The moving defendant argued first that the plaintiff was the registered owner and beneficial owner of the ship Calix, the subject of the action. The arrested ship and all the other defendant ships were not and never had been owned by the plaintiff and could not therefore be sister ships.
[5] Next the moving defendant argued that if the sister ship relationship was to determined before the time of sale, the company from which the Calix was purchased was not the same company which owned the arrested ship and further that the two companies which owned the arrested ship at the time of sale were not both emanations of the Cuban government. The one which owned 51% of the ship owning company at that time was not owned by Cuba. The company which owned 49% of the company which owned the arrested ship at the time of the sale of the Calix was a Cuban owned company but that it had sold its interests to White Swan by the time the action started. White Swan was not a Cuban government owned entity. Other arguments were put forward by the defendant which I do not mention as they were not considered in reaching my decision.
[6] At the opening of his response, counsel for the plaintiff sought to introduce an affidavit as to Cuban law filed in another action in which a writ of seizure and sale had been obtained against the arrested vessel. If such an affidavit were to be admitted, there would have to be an adjournment for cross-examination and no doubt it would be sought to file other contradicting affidavits which would further delay this motion.
[7] It was apparent to me that Cuban law was not relevant to the first issue raised by the defendant, namely, that based on the allegation that the plaintiff owned the subject ship and as the plaintiff did not own the arrested ship, the arrested ship could not be a sister ship. This issue would be settled by Canadian law. I therefore ordered that the argument should proceed on the first issue. If I were to decide in favour of the plaintiff on the first issue, the matter of the Cuban law affidavit would have to be dealt with before these current motions could be fully heard and disposed of. On the other hand, if I decided for the defendant and struck the in rem claim, and ordered the ship released from arrest, the matter of the Cuban law affidavit would not have to be dealt with. I therefore ordered the motion to continue only with respect to the first issue.
[8] The plaintiff responding to the motion argued that subsection 43(8) of the Federal Court Act should be read with subsection 43(3) and that the ownership at given times imposed by 43(3) to limit actions in rem should be used to limit the imposition of time ownership restraints in 43(8) and that where the restraints in 43(3) did not apply, they should not apply in 43(8). Subsection 43(3) does not limit actions in rem dealing with the matters mentioned inter alia in section 22(2)(a) or (c). It was argued that likewise 43(8) should not exclude actions in rem dealing with the matters mentioned in 22(2)(a) or (c) and because it was alleged that the Cuban government entities once owned the Calix, a ship now owned by the Cuban government was a sister ship.
[9] The responding plaintiff further argued that because good title had not been made by the vendor, the vendor had not fully performed the contract of sale and therefore the vendor still had an ownership interest in the Calix. The Calix and the arrested ship thus both being "owned" by the Cuban government, they were sister ships.
[10] In the Looiersgracht (Ssangyong Australia Pty. Ltd. v. Ship "Looiersgracht" et al (1994) 85 F.T.R. 265) it was pointed out that ownership of a part interest in two ships was not by itself sufficient to constitute the ships sisterships. The total interest must be the same.
[11] It is my view that the owner of the Calix at the time the action was brought was the plaintiff. It is also my view, although irrelevant, that the Calix was owned by the plaintiff at the time the cause of action arose. The reason for this being that the conveyance of the ship conveyed title to the purchaser even though that title was not free and clear of incumbrances. Any interest the Cuban government might have by virtue of liens held by it, would not be akin to ownership interests, equitable, beneficial, or otherwise, but would be akin to charges and mortgages which are not ownership interest in admiralty.
[12] With regard to the time constraints in subsection 43(8) it is, in my view, quite plain that subsection 43(8) is to be read on its own. The purpose of the time ownership provisions in 43(3) is to indicate that ownership, mortgage and maritime lien claims travel with the ship whereas such claims as claims for necessaries do not, but rather, remain with the owner incurring them even though charged upon the ship when in his ownership. The time constraints in 43(8) are in my view quite plain and logically attach only those interests of the defendant which he had at the time the action commenced. This is because historically, the arrest of the defendants" assets was permitted in order to secure any judgment the plaintiff might in the future get and all that could be arrested was the defendants" own property. Of course originally the defendant himself could also be arrested.
[13] To be a sister ship in my view, the arrested ship must be beneficially owned by the owner of the Calix. There is no suggestion that the plaintiff owned the arrested ship and if she was not owned by the plaintiff, it does not matter who owned her because she can not be a sister ship. Therefore, Cuban law is not required to determine that ownership.
[14] I thus conclude there is no jurisdiction in rem and that the in rem claims of Roxford should be struck out. That having been done there will be nothing to support the arrest and so far as the Roxford claims are concerned, the ship should be released. Adecon Ship Managment Inc. filed a caveat release to secure its claims against the government of Cuba. Adecon was not the owner of any ship at issue but its claims arose through the Calix. The Statement of Claim sought no relief in personam against Roxford and does not thereby have a claim in rem, and none is alleged against the Calix which at all material times was owned by Roxford. Adecon claims in rem seem to arise from a charge it was given on certain ships by the Cuban government for liabilities arising in connection with the Calix. No claim is made against the Calix and none against the ships on which it has a charge. There is therefore no ship to which the arrested ship could be a sister ship. There is no direct claim against the arrested ship. There is no claim in rem outlined in the Statement of Claim within the jurisdiction given to this Court by subsection 43(8).
ORDER
[15] Those parts of the Statement of Claim relating to an in rem action against the M/V Rio Cuyaguateje are struck out. I am informed that all caveats release have been withdrawn save that of Adecon Ship Management Inc. which is being contemporaneously set aside. The M/V Rio Cuyaguateje is released from arrest.
"Peter A. K. Giles"
A.S.P.
Toronto, Ontario
May 15, 2000
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
| STYLE OF CAUSE: ADMIRALTY ACTION IN REM AND IN PERSONAM |
ROXFORD ENTERPRISES S.A.
| THE GOVERNMENT OF THE REPUBLIC OF CUBA, THE MINISTRY |
| OF FISHING INDUSTRY AND MERCHANT MARINE (MINISTERIO |
| DE LA INDUSTRIA PESQUERA Y MARINA MERCANTE), THE |
| MINISTRY OF TRANSPORT, EMPRESA NAVEGACION MAMBISA, |
and NAVIERA POSEIDON, O.E.E.
-and-
THE OWNERS AND ALL OTHERS
INTERESTED IN THE VESSELS M/V
CALIX, M/V AJANA (ex CARIBBEAN
| QUEEN), M/V GABYANA (ex CARIBBEAN PRINCESS), M/V AVON, M/V LOTUS ISLANDS, M/V LILAC ISLANDS, M/V AGATHE ISLANDS, |
M/V WEST ISLANDS, M/V ODELYS
(ex ROSE ISLANDS), M/V SOUTH
ISLANDS, M/V EAST ISLANDS, M/V
TEPHYS, M/V RIO YATERAS, M/V
RIO CUYAGUATEJE, M/V RIO
NAJASA, M/V LILIET, M/V
SANTANITA, M/V ANACAONA, M/V
GUARIONEX, M/V DAIQUIRI, M/V
CAJIO, M/V MINAS DEL FRIO, M/V
GRAN PIEDRA, M/V MAGNOLIA
REEFER, AND M/V BOLIVAR
| DATE OF HEARING: THURSDAY, MAY 11, 2000 |
| PLACE OF HEARING: TORONTO, ONTARIO |
REASONS FOR ORDER
| AND ORDER BY: GILES A.S.P. |
| DATED: MONDAY, MAY 15, 2000 |
WRITTEN SUBMISSIONS BY: Mr. Peter F. Jones
For the Plaintiff
Ms. Cecily Y. Strickland
For the Defendant
SOLICITORS OF RECORD: Patterson, MacDougall
Barristers & Solicitors
1 Queen Street East
Suite 2100, Box 100
Toronto, Ontario
M5C 2W5
For the Plaintiff
Ms. Cecily Y. Strickland
Barrister & Solicitor
Cabot Place
Suite 1100
100 New Gower Street
St. John"s, Newfoundland
A1C 6K3
For the Defendant
FEDERAL COURT OF CANADA
Date: 20000515
Docket: T-123-00
Between:
ROXFORD ENTERPRISES S.A.
| REPUBLIC OF CUBA, THE MINISTRY |
| OF FISHING INDUSTRY AND MERCHANT MARINE (MINISTERIO |
| DE LA INDUSTRIA PESQUERA Y MARINA MERCANTE), THE |
| MINISTRY OF TRANSPORT, EMPRESA NAVEGACION MAMBISA, |
and NAVIERA POSEIDON, O.E.E.
AND ORDER
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