Atlantic yacht & ship Inc. V. Sovereign yachts (Canada) Inc.

Atlantic yacht & ship Inc. V. Sovereign yachts (Canada) Inc.

The in rem aspect was struck out because Atlantic's claim is a personal contractual claim against the builder lacking the requisite statutory nexus to the vessel under s22(2)(a) or s22(2)(n); no proceeds of sale had been paid into court under s43(2); there was no contractual involvement by the owner/buyer to ground in rem jurisdiction, therefore the Federal Court lacked jurisdiction to proceed in rem and the arrest was void ab initio.

Citation
2003 FC 965
Parties
Plaintiff Broker: Atlantic Yacht & Ship Inc.; Defendant Shipbuilder: Sovereign Yachts (Canada) Inc.; Defendant Res/ship: The Owners And All Others Interested In The Ship "Status Quo" also known as Sovereign Hull Number SYCC9162001; Mortgagee and Buyer; Applicant Seeking Release of Arrest (movant): Don Davis
Court
Federal Court
Jurisdiction
Canada
Judgment Date
8 August 2003
Procedural Posture
Maritime / Admiralty (in Rem and in Personam) / Interlocutory Motion to Strike Out in Rem Claim and to Release Vessel From Arrest
Outcome
In rem claim dismissed; warrant of arrest void ab initio; vessel released from arrest; action to proceed without in rem aspect (in personam claims unaffected)
Legal Topics
In Rem Jurisdiction, Ship Arrest, Brokerage Commission Dispute, Beneficial Ownership, Statutory Interpretation of Federal Court Act S22(2) and S43(2)
Source Language
English
Maritime Law Admiralty Contract Law Civil Procedure In Rem Jurisdiction Ship Arrest Brokerage Commission Dispute Beneficial Ownership +1 more

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Parties

Atlantic Yacht & Ship Inc.

Plaintiff Broker

Sovereign Yachts (Canada) Inc.

Defendant Shipbuilder

The Owners And All Others Interested In The Ship "Status Quo" also known as Sovereign Hull Number SYCC9162001

Defendant Res/ship

Don Davis

Mortgagee and Buyer; Applicant Seeking Release of Arrest (movant)

Procedural Posture

Maritime / Admiralty (in Rem and in Personam) / Interlocutory Motion to Strike Out in Rem Claim and to Release Vessel From Arrest

Legal Issues

  1. 1 Whether the Federal Court has in rem jurisdiction to enforce a broker's contractual claim against a vessel
  2. 2 Whether a broker who contracted with a builder can arrest the buyer's beneficially owned vessel
  3. 3 Whether Atlantic's claim falls within s22(2)(a) (title/ownership/proceeds) or s22(2)(n) (contract relating to construction) of the Federal Court Act

Ratio Decidendi

The in rem aspect was struck out because Atlantic's claim is a personal contractual claim against the builder lacking the requisite statutory nexus to the vessel under s22(2)(a) or s22(2)(n); no proceeds of sale had been paid into court under s43(2); there was no contractual involvement by the owner/buyer to ground in rem jurisdiction, therefore the Federal Court lacked jurisdiction to proceed in rem and the arrest was void ab initio.

Court Disposition

In rem claim dismissed; warrant of arrest void ab initio; vessel released from arrest; action to proceed without in rem aspect (in personam claims unaffected)

Orders

  • In rem aspect of the Statement of Claim struck out
  • Warrant of arrest declared void ab initio