Canada ( Minister of Supply and Services ) v. Horizons Unbound Rehabilitation and Training Society
T-1620-96
Hargrave P.
19/11/96
21 pp.
Motion to sell Western Horizon pendente lite on grounds of deterioration, ongoing cost of moorage; motion for stay of sale-Horizons Unbound obtaining ship from Ministry of Supply and Services in 1990 for $1-Intending to implement training ship project for young offenders-Defendant giving various undertakings (covenants) as to goals to be attained over ensuing five years i.e. vessel to be refitted, ready for intended operation within 18 months; vessel to be used to rehabilitate no less than 10 young offenders at any time, such use not to be discontinued for any period of six months or more-Provided Horizons Unbound complying with covenants, demand note for $200,000 would be cancelled, marine mortgage discharged at end of five years-Crown seized vessel for alleged defaults of covenants-Total moorage bill exceeding $50,000-Vessel valued at $60,000 (break-up value)-Horizons Unbound alleging covenants not breached as running one program for more than 10 young offenders within six months of taking possession of ship-Prima facie case of default-Application of elements in Brotchie v. Ship Karey T (1995), 83 F.T.R. 262 (F.C.T.D.) to determine whether sale ought to take place, bearing in mind basic tenet Court should not easily interfere between mortgagor, mortgagee-(i) Vessel valued at less than mortgage-Owner having substantial equity in ship reason to delay sale as mortgagee having less at risk and possibly substantial injustice to shipowner-(ii) Evidence of no default unimpressive, but determination of default not made on interlocutory motion-Neither oral modifications to covenants nor positive acts of inducement, persuasion or leading on by plaintiff-(iii) Horizons Unbound unlikely to carry on with project-Operation's bleak outlook may well dictate sale of ship at some point-(iv) Cost of moorage might exceed value of vessel by conclusion of trial-(v) Horizon Unbound's own evidence indicating deterioration, supporting sale now-(vi) Ongoing cost of moorage, ongoing depreciation, owner having no equity in vessel, owners in poor financial position and sale eventual inevitability reasons for sale before trial-Vessel ought to be sold before trial-As to motion for stay, criteria set out in Manitoba (Attorney General) v. Metropolitan Stores Ltd., [1987] 1 S.C.R. 110 and RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311 applied-(i) Default not serious question to be determined-(ii) Allowing sale to proceed resulting in irreparable harm to Horizons Unbound as certain damages not quantifiable and demise of Horizons Unbound likely-(iii) Balance of convenience favouring plaintiffs as value of vessel will soon be less than ongoing cost of keeping it until completion of trial-As Horizons Unbound only establishing criteria of irreparable harm, plaintiff may proceed with and have conduct of sale, provided ship placed under arrest, with plaintiff continuing to have possession of and responsibility for ship-Beyond serving arrest warrant and making usual return, sheriff not to take part in appraisal, sale process.