Date: 20001023
Docket: T-1383-00
OTTAWA, Ontario, this 23rd of October, 2000
PRESENT: The Honourable Mr. Justice Rouleau
Action in rem against the owners and all others interested
in the freights and sub-freights for the ship GTS KATIE
BETWEEN:
THIRD OCEAN MARINE NAVIGATION COMPANY, LLC
Plaintiff
AND:
THE OWNERS AND ALL OTHERS INTERESTED
IN THE FREIGHTS AND SUB-FREIGHTS FOR THE SHIP GTS KATIE
Defendants
ORDER AND REASONS FOR ORDER
ROULEAU, J.
[1] These applications by the defendants arise from the following facts. On June 2, 2000, the plaintiff time chartered its ship, the G.T.S. KATIE, to Andromeda Navigation Inc. In turn, Andromeda entered into a contract of afreightment with SDV Logistics (Canada) Inc. ("SDV"), who in turn entered into a contract of afreightment with the Department of National Defence for the transportation of some of its military equipment from Greece to Canada. The bill of lading shows the Government of Canada as both the shipper and consignee and the carrier as the shipowner.
[2] On July 27, 2000, the plaintiff filed a Statement of Claim in this Court, seeking the following relief:
| A. Judgment ordering the Defendant owners of and those interested in the freights and sub-freights on the GTS KATIE to pay into Court the amount of $1,311,000.00, pending determination of Plaintiff's claims against Andromeda Navigation Inc. by way of arbitration under the charterparty dated June 2nd, 2000. |
| B. A stay of these proceedings pending determination of Plaintiff's claims against Andromeda Navigation Inc. by way of arbitration under the charterparty dated June 2nd, 2000 or, in the alternative, a declaration that Plaintiff's dispute with Andromeda Navigation Inc. shall be determined by way of arbitration in England in accordance with the provisions of the said charterparty. |
[3] On the same day, the plaintiff obtained a warrant for the arrest of property pursuant to Rules 481 to 484 of the Federal Court Rules. A warrant for arrest is issued by a designated officer of the Registry upon the filing of Affidavit to Lead Warrant. The warrant, Affidavit to Lead Warrant and the Statement of Claim are then served on the property and once arrested, the property is within the control of the Court. In the present case, the warrant provided "To any Sheriff and Bailiff in Canada, You are directed to arrest the freights and sub-freights for the Ship G.T.S. KATIE and to keep same under arrest until further Order of this Court."
[4] The warrant was served on the solicitors acting for the Crown, SDV Logistics Canada Inc. and Andromeda Navigation Inc. who then filed the Notices of Motion presently before the Court. The applications seek the following relief:
| 1. an order quashing the arrest of the in rem defendant freights and sub-freights for the vessel G.T.S. KATIE; exercised pursuant to the warrant issued by this Court on July 27, 2000; |
| 2. an order declaring that the plaintiff has no lien on or claim to the freights and sub-freights for the vessel G.T.S. KATIE; |
| 3. an order striking out the plaintiff's Statement of Claim; and, |
| 4. costs on a solicitor-client basis. |
[5] I am allowing the applications for the following reasons.
[6] It is clear that the purported arrest of the freights and sub-freights of the G.T.S. KATIE is not valid. Property in the hands of the Crown, whether belonging to the Crown or another, cannot be arrested, placed under lien or otherwise seized in any way. The Crown's immunity in this regard, long recognized at common law, is now statutory and is set out in Crown Liability and Proceedings Act as follows:
| 14. Nothing in this Act authorizes proceedings in rem in respect of any claim against the Crown, or the arrest, detention or sale of any Crown ship or aircraft, or of any cargo or other property belonging to the Crown, or gives to any person any lien on any such ship, aircraft, cargo or other property. 29. No execution shall issue on a judgment against the Crown. 30. (1) On receipt of a certificate of judgment against the Crown issued pursuant to the regulations, the Minister of Finance shall authorize the payment out of the Consolidated Revenue Fund of any money awarded by the judgment to any person against the Crown. (2) Any money or costs awarded to the Crown in any proceedings shall be paid to the Receiver General. |
14. La présente loi n'a pas pour effet d'autoriser les actions réelles visant des demandes contre l'État, non plus que la saisie, détention ou vente d'un navire, d'un aéronef, d'une cargaison ou d'autres biens appartenant à l'État, ni de conférer à quiconque un privilège sur un tel bien. S.R., ch. C-38, art. 6. 29. Les jugements rendus contre l'État ne sont pas susceptibles d'exécution par voie de contrainte. 30.(1) Sur réception d'un certificat réglementaire, le ministre des Finances autorise le paiement, sur le Trésor, de toute somme d'argent accodée à un particulier, par jugement contre l'État. (2) Les sommes d'argent ou les dépens adjugés à l'État dans toutes procédures sont versées au receveur général. |
[7] Furthermore, neither the bill of lading nor any contract for the carriage of the cargo to which SDV or the Crown was a party incorporates the lien clause that is contained in the charter party. The time charter party in the New York Produce Exchange form between the plaintiff and Andromeda provides at clause 18 "That the Owners shall have a lien upon all cargos, and all sub-freights for any amounts due under this Charter." Such a clause is perfectly valid between the parties. It constitutes an equitable assignment by Andromeda of freights it may be owed.
[8] However, that lien provision did not flow down through the chain of contracts which were subsequently entered into between Andromeda and SDV and later between SDV and the Crown. Neither the contract between Andromeda and SDV nor the contract between SDV and the Crown has any provision with respect to a contractual lien.
[9] Finally, the lien provided for in the bill of lading is contained in clause 12 which states that "The Carrier shall have a lien for any amount due and shall be entitled to sell the goods privately or by auction to cover any claims." The lien contemplated by this clause is a possessory lien on the cargo which was extinguished by the discharge of the cargo, and had nothing to do with freights, the res which the plaintiff purportedly arrested and upon which its claim is based.
[10] In summary, neither the bill of lading issued nor any other contract in respect of the carriage of the cargo aboard the G.T.S. KATIE incorporates the provisions of the charter party entered into between the plaintiff and Andromeda Navigation Ltd. Accordingly, the plaintiff does not have a lien on any freights or sub-freights owed in connection with the carriage of the cargo.
[11] For these reasons, the defendants' application is granted. The plaintiff's Statement of Claim as it relates to the Crown and SDV is struck. Costs to the applicants on a party to party basis.
[12] I wish to add that at the hearing of this matter, the plaintiff brought a motion to strike paragraphs 13 and 14 of the affidavit of Mr. Keith Harrison, submitted in support of the Crown's Notice of Motion. I am allowing the plaintiff's application on the grounds that the affiant has arrived at conclusions of law which are within the sole domain of the Court.
JUDGE
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1383-00
STYLE OF CAUSE: THIRD OCEAN MARINE NAVIGATION COMPANY, LLC v. THE OWNERS AND ALL OTHERS INTERESTED IN THE FREIGHTS AND SUB-FREIGHTS FOR THE SHIP GTS KATIE
PLACE OF HEARING: MONTRÉAL
DATE OF HEARING: SEPTEMBER 18, 2000
REASONS FOR ORDER OF ROULEAU, J.
DATED: OCTOBER 23, 2000
APPEARANCES:
NICHOLAS J. SPILLANE
TREVOR BISHOP FOR PLAINTIFF
GEORGE J. POLLACK FOR IN REM DEFENDANTS
SEAN J. HARRINGTON FOR HER MAJESTY THE QUEEN
SOLICITORS OF RECORD:
BRISSET BISHOP
MONTRÉAL FOR PLAINTIFF
SPROULE CASTONGUAY POLLACK
MONTRÉAL FOR IN REM DEFENDANTS
BORDEN LADNER GERVAIS
MONTRÉAL FOR HER MAJESTY THE QUEEN