Docket: A-146-16
Citation: 2016 FCA 224
Present: NADON
J.A.
|
BETWEEN:
|
|
PLATYPUS
MARINE, INC.
|
|
Appellant
|
|
and
|
|
THE OWNERS AND
ALL OTHERS INTERESTED IN THE SHIP "TATU” and THE SHIP "TATU"
|
|
Respondents
|
REASONS
FOR ORDER
NADON J.A.
[1]
Before me is a motion by the Appellant, Platypus
Marine Inc., pursuant to which it seeks an order declaring that the ship Tatu
(the Vessel) will remain under arrest until such time as security or bail for
its claim is posted pursuant to Rule 486 or that the Vessel is released
pursuant to Rule 487.
[2]
For the reasons that follow, I conclude that the
motion must be dismissed.
[3]
A brief summary of the relevant facts will be
helpful in understanding the issue raised by the Appellant’s motion.
[4]
In an action commenced by Loralee B. Vogel
(Federal Court File: T-1615-15), the Vessel, a 90 foot luxury yacht insured for
U.S. $5.8 million, was arrested in Vancouver on September 23, 2015 pursuant to
a warrant for its arrest issued by the Federal Court.
[5]
On October 29, 2015, the Appellant, a ship
repairer based in Port Angeles, Washington, commenced an action in personam
and in rem against the owners of the Vessel and the Vessel and served and
filed a Caveat Release pursuant to Rule 493(2).
[6]
By its action, the Appellant claimed the sum of
U.S. $285,508.92 pertaining to the costs of moorage, storage, repair and other
services rendered to the Vessel. The Appellant further claimed the sum of U.S. $100,000
representing an interest charge agreed to by the parties.
[7]
On December 15, 2015, the Respondents having
entered no defence regarding the principal amount of U.S. $285,508.92, Mr.
Justice Fothergill of the Federal Court granted judgment in full to the
Appellant for the Canadian equivalent of U.S. $285,508.92, i.e. Canadian
$363,455.61 plus costs in the amount of $1,500. However, with respect to the
agreed interest charge of U.S. $100,000, Mr. Justice Fothergill granted leave
to the Respondents to file and serve a statement of defence and directed that
the matter be dealt with by the Court at a later date.
[8]
At the end of January, 2016, the Respondents
made payment in full to the Appellant of the sum ordered to be paid by Mr.
Justice Fothergill, including costs and interest.
[9]
On May 3, 2016, Mr. Justice Hughes of the
Federal Court heard a motion brought by the Respondents which sought the
summary dismissal of the Appellant’s claim for interest in the sum of U.S.
$100,000.
[10]
On the following day, Mr. Justice Hughes
dismissed the Appellant’s claim for interest concluding that the agreed
interest charge violated the criminal interest provisions found in section 347
of the Criminal Code, R.S.C. 1985 c. C-46. As a result, Mr. Justice
Hughes refused to enforce the parties’ agreement regarding interest and, in lieu
thereof, he awarded the Appellant interest in the amount of Canadian $35,000,
i.e. interest at a rate of five percent per annum as provided by the Interest
Act, R.S.C. 1985 c. I-15, section 4.
[11]
Shortly thereafter, the Appellant filed a Notice
of Appeal in this Court challenging the validity of Mr. Justice Hughes’
decision. This appeal, I am told, will likely be heard in Vancouver by the end
of this year.
[12]
On August 19, 2016, late in the day, the
Respondents made a payment to the Appellant in the sum of Canadian $35,992.46
which represents payment in full of Mr. Justice Hughes’ judgment plus interest
on that amount at five percent calculated from the date of payment of the
initial judgment to date.
[13]
By reason of this payment, the Respondents say
that both judgments issued by the Federal Court have now been satisfied. Consequently,
in their view, they are entitled to have the Vessel released. If I understood
the parties correctly, it appears that the Respondents advised the Appellant
that they intended to bring proceedings in the Federal Court to have their ship
released. This seems to have prompted the Appellant to bring the present
motion.
[14]
As I indicated earlier, I am of the view that
the Appellant’s motion cannot succeed.
[15]
I begin by stating the obvious that the ship is
presently under arrest pursuant to a warrant issued by the Federal Court in
Federal Court File: T-1615-15 and in respect of which the Appellant filed a
Caveat Release pursuant to Rule 493(2). Consequently, notwithstanding a
dismissal of this motion, the Vessel will remain under arrest unless the
Appellant consents to its release or an order issues from the Federal Court
releasing the Vessel from arrest.
[16]
The Appellant submits that since its motion is
one that is akin to a motion for a stay, the three pronged test formulated by
the Supreme Court in RJR -- MacDonald Inc. v. Canada (Attorney General),
[1994] 1 S.C.R. 311 (RJR MacDonald) is the one that applies. In other
words, the Appellant says that in order to succeed on its motion, it must
demonstrate that there is a serious question to be decided on the appeal, that a
refusal to grant its motion will likely cause irreparable harm and that the
balance of convenience lies in its favour.
[17]
My first comment is that the motion now before
me is not a motion for a stay of the order rendered by Mr. Justice Hughes.
Describing its motion as one akin to a motion for a stay does not transform the
motion into a motion for a stay. I point out that although the Appellant has
appealed the judgment of Mr. Justice Hughes rendered on May 4, 2016, it has not
made any attempt to obtain a stay of that judgment. Consequently, the judgment
remains enforceable and, in fact, was satisfied by the Respondents when they
made payment of the sum of $35,992.46 on August 19, 2016. In my respectful
view, had the Appellant sought a stay of that judgment and been successful, it
would necessarily have followed that the Vessel could not have been released
pending a decision of this Court on the appeal. However, that did not happen
and therefore, with the greatest of respect, the Appellant’s submission that
its motion must be treated as a motion for a stay is ill conceived.
[18]
My second comment is, as I indicated earlier,
that the Vessel is presently under arrest and will so remain even though I will
be dismissing the Appellant’s motion. The Vessel remains under arrest because
of the Caveat Release filed by the Appellant.
[19]
A vessel can only be released on consent or if
the conditions of release provided in Rules 487 to 489 are met. In particular,
I note that Rule 488(1) provides that the Federal Court may on motion order the
release of arrested property. Hence, in my respectful view, notwithstanding the
fact that final judgments have been rendered, the Federal Court is not functus
in regard to the arrest of the Vessel. In other words, the Federal Court has
ordered that the Vessel be arrested and it can, subject to the rules and the
applicable law, order that it be released, upon motion, by the parties.
[20]
My third comment is that what the Appellant is
asking us to do has no basis in law. In other words, whether a ship under
arrest should be released is a matter that is governed by the Federal Court
Rules and stands to be adjudicated by the Federal Court. This Court does
not have original jurisdiction to order the arrest, the continuance of an
arrest, or the release of a vessel. That power belongs to the Federal Court.
[21]
In making its submission that I should allow its
motion, the Appellant relied on the decision of my former colleague Mr. Justice
Evans in Alpha Trading Monaco Sam v. Sarah Desgagnés (Ship), 2010 FCA
209 (Alpha Trading). Before Mr. Justice Evans in Alpha Trading
was a motion brought by the Appellant for an order staying the execution of a
Federal Court judgment wherein the Federal Court had ordered the Appellant to
cause the release of the Sarah Desgagnés from conservatory arrest in
Belgium.
[22]
Consequently, the question before my former
colleague was whether there was a basis justifying the stay of the Federal
Court judgment. In making that determination, Mr. Justice Evans applied the
three pronged test formulated in RJR MacDonald. In answering the
questions under that test, Mr. Justice Evans concluded that there was indeed a
serious issue on appeal, that refusing to stay the Federal Court judgment would
likely cause irreparable harm to the Appellant, and finally that the balance of
convenience favoured the Appellant. In Alpha Trading, the ship remained
under arrest because the Federal Court decision was stayed. Here, the Appellant
does not seek a stay, but seeks an order preventing the release of the Vessel.
[23]
There can therefore be no doubt that what is
before us is nothing comparable to what was before Mr. Justice Evans in Alpha
Trading. As I indicated earlier, the Appellant is asking me to treat its
motion as if it were a motion for a stay and, in that context, to determine the
motion on the basis of the test enunciated in RJR MacDonald. The motion does
not seek to stay the order rendered by Mr. Justice Hughes and consequently the RJR
MacDonald test is not applicable herein.
[24]
In my respectful view, the question that must be
determined, not by this Court but by the Federal Court, is whether there is a
legal basis to continue the arrest of the Vessel. Failing the obtainment of the
Appellant’s consent to the release of the Vessel, the Respondents must apply to
the Federal Court asking it to release the Vessel, presumably on the ground
that they have satisfied the judgments rendered by the Federal Court both in regard
to the principal amount and the interest charges. If there is no basis to keep
the Vessel under arrest, then the Federal Court will make the appropriate
order.
[25]
Should the Federal Court order the release of
the Vessel, the Appellant can then appeal that decision and seek a stay. It could
also, before filing an appeal, ask the Federal Court to stay its own judgment. However,
the Appellant cannot obtain through the present motion what it could have
obtained had it sought to stay the judgement of Mr. Justice Hughes.
[26]
For these reasons, the Appellant’s motion will
be dismissed with costs which I hereby fix in the sum of $2,000.
"M Nadon"
Email this Content