True North Services LLC v. 0969582 B.C. Ltd

True North Services LLC v. 0969582 B.C. Ltd

The proposed bank guarantee was rejected because it materially departs from the usual bail bond language, imports extensive ICC demand guarantee terms that increase payment risk, and improperly names and requires actions of the Federal Court Registrar as beneficiary/participant; absent admissible appraisal evidence...

Source-derived case information.

Citation
2022 FC 1736
Parties
Plaintiff: True North Services LLC; Defendant; Plaintiff by Counterclaim: 0969582 B.C. Ltd; Defendant (vessel): Vessel "K"; Defendant (vessel): Vessel "P"
Court
Federal Court
Jurisdiction
Canada
Judgment Date
14 December 2022
Procedural Posture
Admiralty / Maritime — Action in Rem Against Vessels and in Personam / Interim Motion for Approval of Bank Guarantee as Security for Release of Arrested Vessels and Fixing of Bail
Outcome
Motion to approve the proposed form of bank guarantee dismissed; bail fixed at CAD 606,196.51; 0969582 B.C. Ltd granted leave to apply within 30 days to seek reconsideration of bail with evidence of market value.
Legal Topics
Arrest of Vessel, Security for Release, Bank Guarantee, Bail for Arrested Vessel, Quantum of Security, Beneficiary of Guarantee, Appraisal of Vessel Value, Insurance and Maintenance Charges
Source Language
english
Admiralty / Maritime Law Civil Procedure Banking / Guarantees Enforcement of Security Arrest of Vessel Security for Release Bank Guarantee Bail for Arrested Vessel +4 more

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Parties

True North Services LLC

Plaintiff

0969582 B.C. Ltd

Defendant; Plaintiff by Counterclaim

Vessel "K"

Defendant (vessel)

Vessel "P"

Defendant (vessel)

Procedural Posture

Admiralty / Maritime — Action in Rem Against Vessels and in Personam / Interim Motion for Approval of Bank Guarantee as Security for Release of Arrested Vessels and Fixing of Bail

Legal Issues

  1. 1 Whether the proposed bank guarantee form is acceptable security for release of arrested vessels
  2. 2 Whether the Federal Court Registrar may be named as beneficiary/participant in the guarantee
  3. 3 What quantum of bail/security should be fixed in absence of an appraisal

Ratio Decidendi

The proposed bank guarantee was rejected because it materially departs from the usual bail bond language, imports extensive ICC demand guarantee terms that increase payment risk, and improperly names and requires actions of the Federal Court Registrar as beneficiary/participant; absent admissible appraisal evidence of vessel value, bail is fixed at the plaintiff's reasonably arguable best case, calculated at CAD 606,196.51, with leave for the defendant to apply within 30 days with evidence of market value to reconsider bail.

Court Disposition

Motion to approve the proposed form of bank guarantee dismissed; bail fixed at CAD 606,196.51; 0969582 B.C. Ltd granted leave to apply within 30 days to seek reconsideration of bail with evidence of market value.

Orders

  • The motion approving the proposed form of bank guarantee for security for the release of Vessel "K" and Vessel "P" is dismissed.
  • Bail is fixed at CAD 606,196.51.