Sargeant v. Worldspan Marine Inc.

In Maritime Liens, Mortgages & Priorities, Stays of Proceedings on (Updated )

Précis: The British Columbia Supreme Court refused to stay the action before it where a similar but not identical action was proceeding in the Federal Court.

Facts: Sargeant commissioned Worldspan build a luxury yacht. Disputes arose during the course of construction which resulted in the vessel being arrested in the Federal Court by Offshore, an unpaid supplier of materials and services. Various in rem claims were filed against the vessel in the Federal Court including claims by Sargeant and Worldspan. Subsequent to the commencement of the Federal Court action, Sargeant commenced this action against Worldspan in the Supreme Court of British Columbia for breach of duty, breach of trust, conversion, fraud and breach of contract. Worldspan brought this application for a temporary stay of these proceedings pending the adjudication of Sargeant’s claim in the Federal Court proceeding.

Decision: Application dismissed.

Held: The jurisdiction to grant a stay of proceedings is to be exercised cautiously taking into account all relevant factors and prejudice to the parties. Worldspan says it will be prejudiced if it must take steps in this proceeding before the in rem claims are determined in the Federal Court and further says that the Federal Court action will fully determine the claims of the parties. However, Sargeant’s claims for fraud and conversion will not be addressed in the Federal Court. Additionally, the potential recovery in the Federal Court is limited by the in rem claim and proceeds whereas the damages in this action are not so limited. A stay of proceedings will also not promote judicial economy and efficiency since Sargeant intends to pursue the fraud claim regardless of the outcome of the Federal Court proceeding. Finally, there is little risk of inconsistent verdicts since the adjudication of the conversion and fraud claims will not be part of the Federal Court proceeding. The balance of convenience favours dismissing the stay application.