Royal Bank of Scotland plc. v. Kimisis III ( The )
T-38-99
Hargrave P.
9/2/99
9 pp.
Motion of plaintiff for order that Noga Commodities (Canada) Inc. (Noga), who filed caveat against release of Kimisis III and who is owner of cargo of 37,663 metric tonnes of wheat (worth some US$7,000,000) recently loaded aboard, be required to remove cargo at Noga's own expense so that ship be offered for sale-Plaintiff, mortgagee of ship, under fleet mortgage, has not gone into possession of ship, but plans to shortly apply for court-ordered sale-Motion dismissed as premature-Plaintiff pointed to costs of maintaining ship and paying crew (US$60,000/month)-Plaintiff also concerned cargo be discharged to facilitate inspection by potential buyers, failing which, vessel would be less desirable to potential buyers and plaintiff's security represented by value of ship would be impaired-Plaintiff also concerned as to possible cargo deterioration-Noga replied discharging wheat cannot take place before two weeks, will cost US$1,100,000 -Evidence wheat could safely remain aboard ship for another month or two-Evidence cargo may not have too significant effect on value of vessel, provided cargo owners willing to pay reasonable market freight level to new owners for voyage down to Mexico, where Mexican millers still wishing to buy cargo-Evidence by ship and cargo broker of established ship operator's interest in purchasing ship and carrying cargo to Mexico-Evidence of two recent Federal Court-ordered sales of ships with cargo on board, with new owner to carry cargo to destination-While no perfect solution to shield innocent cargo owner when marine mortgagee enforces security, Court may look to see if mortgagee has taken undue advantage of situation and then Court may exercise discretion accordingly: The Mingren Development, [1979] H.K.L.R. 159-No need to make finding at this point as to whether cost of discharging cargo should fall upon cargo owner (general rule under English law), or whether cost of discharge of cargo should be Marshall's expense in getting ship ready for sale (American approach), or whether equitable considerations ought to apply-Present motion premature as plaintiff has neither gone into possession nor moved for Court-ordered sale-Court ought not to order cargo removed when order for sale of ship has not yet been sought, and even when sale order has been granted, it may be possible to obtain elusive perfect solution if, on further exploration, sale with cargo aboard and generous freight payable proves possible and profitable-Both parties ought to explore this aspect and then provide further material in support of their positions when sale order sought.