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Worldspan Marine Inc. v. Sargeant

In Admiralty Jurisdiction, Appeals, Judicial Sales on

Facts: Worldspan and Restaurant moved to request the stay of the order of the Federal Court (2019 FC 546) that permitted the proceeds of sale of the vessel to be paid to Sargeant. In the Court below, Worldspan, brought a motion seeking that Sargeant or Comerica Bank was in breach of the VCA for failure to pay claims certificates to Worldspan when due, and Offshore and Restaurant brought motions that their claims ranked in priority to that of Sargeant. The Federal Court dismissed those motions and it was that order directing payment to Sargeant which was appealed in this present motion. Sargeant argued the stay should not be granted as Worldspan and Offshore were in default of previous orders awarding costs to him, and Restaurant was in breach of the order for costs from the 2019 FC 546 action.

Decision: Restaurant motion granted, Worldspan motion dismissed.

Held: The failure of a person to comply with a court order may be a basis for denying a stay that is requested by that person. As such the Court only had to address the motion for stay of Restaurant as they were not in default of any outstanding costs orders prior to the order under appeal in this action, and in using its discretionary power under s. 50 of the FCA the Court held it would not be in the interest of justice to deny Restaurant’s request for stay because Worldspan and Offshore are in default of paying their outstanding cost awards. The Court applied the RJR-MacDonald test to determine if a stay should be granted. The Court held that Restaurant’s appeal was neither frivolous or vexatious, and that Restaurant established irreparable harm on the basis of Sargeant’s unwillingness to pay a judgment against him in Florida. The Court also held that the balance of convenience favours granting the stay as Sargeant had a history of avoiding payment of judgments against him and the difficulty in Restaurant to collect on a judgment (if successful) outweigh the inconvenience of Sargeant in waiting for his money if the stay was granted.