Heddle Marine Service (NL) Inc. v. Kydy Sea (Ship), 2019 FC 1140 (2019-09-05)
Facts: This was a motion in writing for an extention of time for the applicant, Halthorn Marine Group Inc. (“Halthorn”), to file a claim against the ship “Kydy Sea”. Halthorn serviced the “Kydy Sea” which was laid up alongside at the Port of Sydney, Nova Scotia. Pursuant to an arbitral award against the “Kydy Sea” and her owners, on 7 February 2019 Heddle Marine Service (NL) Inc. (“Heddle”) made an application to register that award with the Court. On 26 February 2019 the Court granted Heddle’s application and ordered and the owners and “Kydy Sea” were to pay the amounts, with interest, and that the sale of the “Kydy Sea” was authorized. On 3 April 2019 the Court ordered the appraisal and sale of the “Kydy Sea” on terms that all claims against the Ship shall be filed with the Court within 30 calendar days of the publication of the advertisement and notice to creditors failing which such claims shall be barred. The advertisement was published the next day along with the notice to creditors. Halthorn’s managing director was made aware on 10 May 2019 of the advertisement and attempted to file its claim, but was informed by the Court registry that the documents were incomplete and suffered from procedural inconsistencies. Halthorn’s managing director then contacted Heddle’s counsel on 16 May 2019 for consent to a request for extension of time for filing Halthorn’s claim and an agreement was concluded on 10 June that Heddle would agree to such a request. On 30 May 2019 the Court ordered the sale of the “Kydy Sea” to GFY International S.A. (“GFY”) . On 24 June Halthorn filed the present motion. However, GFY failed to pay the purchase price and on 17 July 2019 the Court declared GFY’s initial deposit forfeited and approved the sale of the “Kydy Sea” to South Eastern Shipping Corporation Inc. (South Eastern).
Held: Motion granted.
Decision: After a review of the Federal Court of Appeal’s decision in the Polar Paraguay No. 2 and the Court’s decision in The Kimissis Ii, the Court found that it had discretion under Rule 8 of the Federal Courts Rules to extend the time to file a claim which is otherwise barred under Rule 492(2). The Court found that Halthorn was aware of the time limit to file its notice of claim and also that it had a continuing intention to pursue their application. Further, the claim was where there was at least a reasonably arguable case to be made and the plaintiff and other claimant consented to Halthorn’s motion so there was no prejudice to be suffered despite the owners of the “Kydy Sea” not taking part in these proceedings. The overriding consideration that justice be done was considered by the Court and found that justice sided with allowing the motion. Lastly, the Court found that compelling service on the owners of the “Kydy Sea” was not warranted as the owners took no part in the proceedings or the arbitration.