Date: 20081216
Docket: T-1793-08
Citation: 2008 FC
1376
Montréal, Quebec, December
16, 2008
PRESENT: The Honourable Mr.
Justice Shore
BETWEEN:
RIO TINTO SHIPPING (ASIA) PTE LTD.
Applicant
and
KOREA LINE CORPORATION
and
GLORY WEALTH PTE LTD.
Respondents
REASONS FOR ORDER AND ORDER
I. Overview
[1]
This is a situation
where Rio Tinto, the Applicant, is facing conflicting claims from the Respondents
with respect to the payment of freight for the carriage of cargo. Should Rio
Tinto pay either Glory Wealth Pte Ltd. or Korea Line Corporation, Rio Tinto
would be doing so at its own peril. In G. & N. Angelakis Shipping Co.
S.A. v. Compagnie National Algerienne de Navigation (The “Attika Hope”),
[1988] 1 Lloyd’s Rep. 439 (Comm.
Ct.), a voyage charterer
was facing competing claims for the payment of the freight between two parties.
The owner of the vessel sought to exercise his lien on the sub-freight while
the assignee in the rights of the time charterer sought to enforce his rights
to payment. Justice Steyn determined, however, that the assignee had been
entitled to the freight. The voyage charterer had paid the owner of the vessel
at his peril and was bound to make a second payment to the assignee.
[2]
In
order to avoid any liability for multiple payments, Rio Tinto seeks to
extricate itself from the competing claims of Korea Line and Glory Wealth. For
this reason, Rio Tinto claims no interest in the freight. In any case, Rio
Tinto recognizes its obligation to pay the freight under the terms of the
voyage charterparty. Moreover, it has shown its willingness to place the
disputed portion of the freight in escrow for the Respondents. Given that the
Respondents have failed to agree to such an in escrow payment, Rio Tinto is now
willing to deposit the disputed amount with this Court or dispose of it as this
Court directs.
[3]
Rio Tinto meets the
requirements of Rule 108.(1) of the Federal Courts Rules, SOR/98-106 and
thus properly brings this ex parte motion.
[4]
[37] …
it should be said for
clarity and completeness, because the issue of the availability of a court
injunction and other judicial remedies was ever present in the arguments
presented by the parties to this Court, that the initial process in injunction
undertaken by the court in these proceedings was within the jurisdiction of the
court, and that this jurisdiction has not been reduced by the labour relations
statute or indeed by the presence of the collective agreement and its provision
for arbitration.
(St.
Anne Nackawic Pulp & Paper v. CPU, [1986] 1 S.C.R. 704).
II.
Introduction
[5]
In this ex parte
motion, the Applicant, Rio Tinto, seeks by way of interpleader directions under
Rule 108.(1) of the Federal Courts Rules and an Order directing that
US$1,576,246.79 be deposited with the Court, at which time any and all
liability of Rio Tinto will be extinguished.
III.
Background
The Charterparty
[6]
On October 16, 2008,
Rio Tinto entered into a voyage charterparty (Voyage Charterparty) with
Respondent Glory Wealth for the use of the vessel M/V Ermis to carry a load of Carol Lake iron ore pellets (Cargo) from Sept-Îles, Québec, to Whyalla, Australia.
Under this agreement, Rio Tinto is the “Charterer” and Glory Wealth is the
“Owner”.
[7]
The parties agreed to
a Voyage Charterparty on the same terms as an earlier voyage charterparty
(Master Charterparty) with any modifications and amendments provided for in the
Fixture Recap, which is a summary of terms of a charterparty. The Voyage
Charterparty provided, both in the Fixture Recap and at Clause 21 of the Master
Charterparty, that Rio Tinto would pay the fee for transporting the Cargo (freight)
to Glory Wealth's nominated bank account within 10 banking days of the Bill of
Lading date.
The Contract of Sale
[8]
The shipper of the
Cargo, Iron Ore Company of Canada (IOC), of whom Rio Tinto is the majority
shareholder, entered into a contract of sale with OneSteel Manufacturing Pty
Ltd. (OneSteel) for the Carol Lake iron ore pellets. This contract of
sale stipulated that IOC would sell and ship the Cargo to OneSteel in
consideration for an irrevocable letter of credit negotiable by IOC upon
presentation of, inter alia, a clean on board bill of lading to the
paying bank (the Letter of Credit). On October 22, 2008, the Letter of Credit,
with a November 30, 2008 expiry date, was issued and transmitted to IOC.
[9]
The Cargo, consisting
of 43,964 mts of Carol lake iron ore pellets, was loaded on the M/V Ermis in
Sept-Îles, on November 7, 2008, and the ship sailed soon thereafter bound for Whyalla, Australia.
On that same day, a bill of lading was prepared according to the instructions
of Rio Tinto. This bill of lading was signed by Iron Ore Company of Canada, Marine Services (IOC (Marine)), which is the agent
nominated by Rio Tinto and appointed by Glory Wealth.
[10]
In accordance with
the Voyage Charterparty, the freight, in the amount of US$1,576,246.79, is now
(as extended to December 17, 2008) payable to Glory Wealth.
The Notice of Lien on Sub-Freight
[11]
On November 4, 2008,
Rio Tinto received a notice from Respondent Korea Line purporting to exercise a
lien upon the freight due under the Voyage Charterparty (Notice of Lien). Korea
Line indicated in the Notice of Lien that the M/V Ermis was the subject of a
time charterparty, dated August 7, 2007, (Time Charterparty) between Parkroad
Corporation (Parkroad) as deponent owner and Glory Wealth as time charterer.
The Notice of Lien further indicated that by an assignment, dated October 24,
2008, and a notice of assignment dated October 27, 2008, Parkroad had assigned
the benefit of the Time Charterparty to Korea Line. Finally, the Notice of Lien
also included a statement of account showing that Glory Wealth failed to pay
US$1,206,823.18 for hire payable under the Time Charterparty.
[12]
On this basis, Korea
Line purports to exercise a lien on all sub-freights pursuant to Clause 18 of
the Time Charterparty, which provides that Parkroad shall have a lien upon all
cargoes and all sub-freights and all sub-hires for any amounts due under the
Time Charterparty. Accordingly, Korea Line thereby demanded that the freight owing
to Glory Wealth under the Voyage Charterparty, US$1,576,246.79, be paid
directly to it.
The Failure of the Respondents to Resolve
the Dispute over the payment of the freight
[13]
Glory Wealth directed
that Rio Tinto not pay any portion of the freight to Korea Line. It denied
owing Parkroad any outstanding payments and contested the validity of the
assignment made by Parkroad in favour of Korea Line.
[14]
Rio Tinto responded
to both parties by indicating that, while its intention was to pay the freight,
it was not for Rio Tinto to determine who was entitled to the freight since it
had conflicting obligations under the Voyage Charterparty and the Notice of
Lien. Accordingly, Rio Tinto suggested that the parties agree that the
contested amount be deposited in escrow pending the resolution of their
dispute, failing which, Rio Tinto would seek the assistance of the Court.
[15]
To date, Glory Wealth
and Korea Line have failed to resolve their dispute or to reach an agreement
with respect to the payment of freight into escrow.
IV.
Issues
[16]
(1) Does the
Applicant meet the requirements of Rule 108.(1) of the Federal Courts Rules?
(2) Should the freight be deposited with
this Court?
V.
Analysis
[17]
The interpleader rule
of the Federal Courts Rules provides as follows:
|
108. (1) Where
two or more persons make conflicting claims against another person in respect
of property in the possession of that person and that person
(a) claims no interest
in the property, and
(b)
is willing to deposit the property with the Court or dispose of it as the
Court directs,
that person
may bring an ex parte motion for directions as to how the claims are
to be decided
|
108. (1) Lorsque deux ou plusieurs
personnes font valoir des réclamations contradictoires contre une autre personne
à l’égard de biens qui sont en la possession de celle-ci, cette dernière
peut, par voie de requête ex parte, demander des directives sur la
façon de trancher ces réclamations, si :
a) d’une part, elle ne revendique aucun droit sur ces biens;
b) d’autre part, elle accepte de remettre les biens à la Cour ou
d’en disposer selon les directives de celle-ci.
|
(1) Does the Applicant meet the
requirements of Rule 108.(1) of the Federal Courts Rules?
[18]
This is a situation
where two parties, the Respondents, are making conflicting claims against the freight,
which is property in possession of Rio Tinto. Should Rio Tinto pay either Glory
Wealth or Korea Line, Rio Tinto would be doing so at its own peril. In G.
& N. Angelakis Shipping Co. S.A. v. Compagnie National Algerienne de
Navigation (The Attika Hope), [1988] 1 Lloyd’s Rep. 439 (Comm. Ct.), a voyage charterer was facing competing claims for the
payment of the freight between two parties. The owner of the vessel sought to
exercise his lien on the sub-freight while the assignee in the rights of the
time charterer sought to enforce his rights to payment. Justice Steyn
determined, however, that the assignee had been entitled to the freight. The
voyage charterer had paid the owner of the vessel at his peril and was bound to
make a second payment to the assignee.
[19]
In
order to avoid any liability for multiple payments, Rio Tinto seeks to
extricate itself from the competing claims of Korea Line and Glory Wealth. For
this reason, Rio Tinto claims no interest in the freight. In any case, Rio
Tinto recognizes its obligation to pay the freight under the terms of the
Voyage Charterparty. Moreover, it has shown its willingness to place the
disputed portion of the freight in escrow for the Respondents. Given that the
Respondents have failed to agree to such an in escrow payment, Rio Tinto is now
willing to deposit the disputed amount with this Court or dispose of it as this
Court directs.
[20]
Rio Tinto meets the
requirements of Rule 108.(1) of the Federal Courts Rules and thus
properly brings this ex parte motion.
(2) Should the freight be deposited
with this Court?
[21]
Rio Tinto is to
deposit US$1,576,246.79 with this Court. Recognizing the lack of information,
however, the Court is unable to evaluate the exact amount subject to competing
claims. As further evidence is required, by which all that could be attributed
to any entity or appropriated therefrom or thereto is substantiated in light of
any and all evidence to be made available in proceedings on the merits of the
issues, the Court presently concludes that the entire amount of the freight,
that is, US$1,576,246.79, be deposited with the Court. Upon depositing the full
amount with this Court, any and all liability of Rio Tinto (Asia) Pte Ltd. in
respect of the payment of such portion of the freight be extinguished.
ORDER
THIS
COURT ORDERS
1.
The freight payable under the voyage charterparty, dated October 16, 2008, between Rio Tinto Shipping (Asia) Pte. Ltd. and Glory Wealth Pte Ltd.,
up to the amount of US$1,576,246.79 be deposited with the Court;
2.
Upon payment of US$1,576,246.79, any and all liability of Rio Tinto
Shipping (Asia) Pte Ltd. in respect of the payment of such portion of the
freight be extinguished;
3.
The whole with costs against Glory Wealth Pte Ltd. and Korea Line
Corporation;
4.
It will be for the parties, Glory Wealth Pte Ltd. and Korea Line
Corporation, in and of themselves, to decide any further procedures in their
regard; they may want to put into motion subsequently.
“Michel
M.J. Shore”
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