Franklin Lumber Ltd. v. Essington II,(Ship)

Franklin Lumber Ltd. v. Essington II,(Ship)

Time for service of the statement of claim was extended and the court authorized arrest and a sale pendente lite by private contract at $380,000 without formal appraisal or further advertising because the plaintiff demonstrated continuing intent to pursue the in rem claim, an arguable case, minimal prejudice to defendants, imminent and ongoing diminution of the vessel's value and costs, claims against the vessel exceed its value, and a ready willing and able buyer existed; Rule 490(1)(a) permits such a private sale in these circumstances.

Citation
2005 FC 95
Parties
Plaintiff (mortgagee): Franklin Lumber Ltd.; Vessel/defendant (res): The Ship "Essington II" her owners and all others interested; Defendant (owner/mortgagor): Bullco Pile & Dredge Ltd.
Court
Federal Court
Jurisdiction
Canada
Judgment Date
20 January 2005
Procedural Posture
Maritime Mortgage Foreclosure / in Rem Action / Interlocutory Motion for Extension of Time to Serve in Rem and for Approval of Sale Pendente Lite (court Ordered Private Sale)
Outcome
Extension of time granted; vessel may be served, arrested and sold pendente lite by private contract; court approved sale to the identified buyer at $380,000 and ordered insurance and movement of the vessel for inspection
Legal Topics
Extension of Time for Service, In Rem Arrest, Sale Pendente Lite, Marine Mortgage, Promissory Note, Court Ordered Sale Without Appraisal, Priority of Claims
Source Language
English
Maritime Law Civil Procedure Property Security/mortgage Law Extension of Time for Service In Rem Arrest Sale Pendente Lite Marine Mortgage Promissory Note +2 more

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Parties

Franklin Lumber Ltd.

Plaintiff (mortgagee)

The Ship "Essington II" her owners and all others interested

Vessel/defendant (res)

Bullco Pile & Dredge Ltd.

Defendant (owner/mortgagor)

Procedural Posture

Maritime Mortgage Foreclosure / in Rem Action / Interlocutory Motion for Extension of Time to Serve in Rem and for Approval of Sale Pendente Lite (court Ordered Private Sale)

Legal Issues

  1. 1 Whether time for service of the statement of claim in rem should be extended
  2. 2 Whether the court should approve a private sale pendente lite without appraisal or further advertising
  3. 3 Whether the plaintiff has an arguable case and continuing intention to pursue the claim

Ratio Decidendi

Time for service of the statement of claim was extended and the court authorized arrest and a sale pendente lite by private contract at $380,000 without formal appraisal or further advertising because the plaintiff demonstrated continuing intent to pursue the in rem claim, an arguable case, minimal prejudice to defendants, imminent and ongoing diminution of the vessel's value and costs, claims against the vessel exceed its value, and a ready willing and able buyer existed; Rule 490(1)(a) permits such a private sale in these circumstances.

Court Disposition

Extension of time granted; vessel may be served, arrested and sold pendente lite by private contract; court approved sale to the identified buyer at $380,000 and ordered insurance and movement of the vessel for inspection

Orders

  • Extend time for service of the Statement of Claim and permit in rem service and arrest of the Essington II
  • Authorize sale pendente lite of the Essington II by private contract without formal appraisal or further advertising