Bank of Scotland plc v. Kimisis III (Ship)

In Maritime Liens, Mortgages & Priorities on (Updated )

This was a motion by a mortgagee for an order that the owner of a cargo of wheat on board the "Kimisis III" remove the cargo at its expense. The motion was denied on the grounds that it was premature as the mortgagee had not entered into possession of the vessel and had not applied for a court ordered sale. However, during the course of his reasons, Prothonotary Hargrave noted that there was a difference between the English approach to the removal of cargo from a ship under arrest and the American approach. The English approach is that the costs of discharging the cargo should fall upon the cargo owner whereas the American approach is that the costs of discharging cargo are in the nature of custodia legis and are therefore recoverable from the fund in priority to other claims. (Note: It would appear to be an open question which of these two approaches a Canadian court will follow.)