Governor and Co. of the Bank of Scotland v. Nel ( The )
T-2416-97
Hargrave P.
5/2/98
11 pp.
Plaintiff, mortgagee, seeking recovery out of sale proceeds of bulk and container carrier Nel sum in excess of amount required to satisfy lien claimants, including interest for two years at 7 1/2%-Practice in court to pay out from sale proceeds, funds clearly in excess of amount needed to secure those with claims of lien-Procedure bound by strict guidelines: applicant for early payment must make full disclosure of other claimants; proceeds from sale ought not normally be distributed until all claims before Court-All claimants now before Court-Appropriate advertising for lien claimants herein-Time within which claims must be filed with Court has run-Federal Court Rules, R. 1008(2) completely barring out-of-time claim-Vrac Mar Inc. v. Demetries Karamanlis, [1972] F.C. 430 (T.D.) wherein held priorities, amounts should be resolved at same time, distinguished-More than enough money in trust to satisfy all of lien claimants-Payment out to plaintiff, having taken initiative in making proceeds of Nel available to creditors, reasonable approach in all circumstances-Not establishing precedent-While allowing payment out merely on basis of default judgment, without testing affidavit evidence of judgment creditor could lead to abuse in certain circumstances, here owner of Nel completely abandoning vessel, taking no part in proceedings-Amount of security determined by assuming each lien claimant will be successful-Past rule of thumb that security for claim, interests, costs should be one and one half times amount of claim rejected-While that figure might, by chance be appropriate at any given time, amount of security should be determined by times, circumstances of each case-12% allowed for interest-As to reserve for costs, changes to Court's Tariff of Taxable Costs moving recoverable costs closer to actual litigation costs-As serious, complex issues as to entitlement, quantum, priority raised, $100,000 set aside for costs-Plaintiff to file undertaking to repay any portion of advance if necessary to meet entitlements, priorities determined in due course by Court-Federal Court Rules, C.R.C., c. 663, R. 1008(2).