ING Bank N.V. v. Canpotex Shipping Services Limited

ING Bank N.V. v. Canpotex Shipping Services Limited
Court (s) Database
Federal Court of Appeal Decisions
Date
2017-03-10
Neutral citation
2017 FCA 47
File numbers
A-462-15
Decision Content
Date: 20170310
Docket: A-462-15
Citation: 2017 FCA 47
CORAM:
NADON J.A.
DAWSON J.A.
WEBB J.A.
BETWEEN:
ING BANK N.V., IAN DAVID GREEN, ANTHONY VICTOR LOMAS and PAUL DAVID COPLEY IN THEIR CAPACITIES AS RECEIVERS OF CERTAIN ASSETS OF THE DEFENDANTS O.W. SUPPLY & TRADING A/S, and O.W. BUNKERS (UK) LIMITED, and OTHERS
Appellants
and
CANPOTEX SHIPPING SERVICES LIMITED, NORR SYSTEMS PTE. LTD., OLDENDORFF CARRIERS GMBH & CO K.G., and STAR NAVIGATION CORPORATION S.A.
Respondents
and
MARINE PETROBULK LTD., O.W. SUPPLY & TRADING A/S, O.W. BUNKERS (UK) LIMITED
Respondents
Heard at Vancouver, British Columbia, on June 16, 2016.
Judgment delivered at Ottawa, Ontario, on March 10, 2017.
REASONS FOR JUDGMENT BY:
NADON J.A.
CONCURRED IN BY:
DAWSON J.A.
WEBB J.A.
Date: 20170310
Docket: A-462-15
Citation: 2017 FCA 47
CORAM:
NADON J.A.
DAWSON J.A.
WEBB J.A.
BETWEEN:
ING BANK N.V., IAN DAVID GREEN, ANTHONY VICTOR LOMAS and PAUL DAVID COPLEY IN THEIR CAPACITIES AS RECEIVERS OF CERTAIN ASSETS OF THE DEFENDANTS O.W. SUPPLY & TRADING A/S, and O.W. BUNKERS (UK) LIMITED, and OTHERS
Appellants
and
CANPOTEX SHIPPING SERVICES LIMITED, NORR SYSTEMS PTE. LTD., OLDENDORFF CARRIERS GMBH & CO K.G., and STAR NAVIGATION CORPORATION S.A.
Respondents
and
MARINE PETROBULK LTD., O.W. SUPPLY & TRADING A/S, O.W. BUNKERS (UK) LIMITED
Respondents
REASONS FOR JUDGMENT
NADON J.A.
I. Introduction
[1] On October 27, 2014, at the request of the respondent Canpotex Shipping Services Limited (Canpotex) marine fuel (the bunkers) was delivered to two vessels, namely the M.V. Star Jing and the M.V. Ken Star (the Vessels), lying in the Port of Vancouver, British Columbia. The dispute now before us in this appeal seeks an answer to the question: “Who is entitled to payment in respect of the delivery of the aforesaid bunkers?”
[2] The contenders for payment are the respondent Marine Petrobulk Ltd. (Petrobulk) and the appellants ING Bank N.V. (ING), Ian David Green (Green), Anthony Victor Lomas (Lomas) and Paul David Copley (Copley), in their capacities as Receivers of certain assets of O.W. Supply & Trading A/S (OW S&T) and O.W. Bunkers (U.K.) Limited (OW UK) (referred to hereafter as the appellants). Confronted with a demand for payment from both Petrobulk and the appellants, Canpotex commenced proceedings in the Federal Court seeking a determination with regard to the entity it should pay and, upon payment to that entity, a declaration that its liability in regard to the delivery of the bunkers was extinguished.
II. Facts
A. The Parties
[3] At all material times, Canpotex was the time charterer of the Vessels. Pursuant to the terms and conditions of the Charter Parties, in the New York Produce Exchange Form, entered into between Canpotex and the owners of the Vessels, it was Canpotex’s responsibility to provide and pay for all bunkers required by the Vessels (clause 2 of the Charter Parties) and to ensure that no lien or encumbrance incurred by it and its agents would have priority over the title and interest of the owners of the Vessels (clause 18 of the Charter Parties).
[4] At all material times, Norr Systems Pte. Ltd. (Norr) was the registered owner of the M.V. Star Jing, Oldendorff Carriers GmbH & Co K.G. (Oldendorff) was its disponent owner and Star Navigation Corporation S.A. (Star) was the owner of the M.V. Ken Star (these entities shall hereafter be referred to as the Shipowners).
[5] With respect to the O.W. group of companies (OW Group), their activities included, inter alia, the supply, sale and trading of bunkers worldwide. More particularly, the business of OW UK, one of the entities of the OW Group, consisted primarily in the selling and arranging of delivery of bunkers to customers of the OW Group.
[6] The other party to these proceedings is Petrobulk, a British Columbia company whose business consists of the selling and providing of bunkers to deep sea vessels in and around the port of Vancouver.
B. The Bunker Purchases
[7] On February 14, 2014, Canpotex and OW S&T agreed on the terms of a fixed price trading agreement (the Fixed Price Agreement or the Agreement) that was to govern Canpotex’s purchase of bunkers on a “time to time” basis in respect of vessels chartered by Canpotex. The negotiations leading to the Fixed Price Agreement were conducted between Keith Ball, on behalf of Canpotex, and Messrs. Robert Preston and Serge Laureau, on behalf of the OW Group. The contract was signed in June, 2014.
[8] The purpose of the Fixed Price Agreement was, as I understand it, to allow Canpotex the option of purchasing bunkers at a set price over a set period when market rates were favourable. Because Canpotex never viewed market conditions as favourable during the relevant period, it never locked in the price of bunkers and hence made no purchases under the Agreement. In fact, such purchases never occurred as the OW Group went into bankruptcy in November, 2014.
[9] On October 22, 2014, Canpotex placed two orders with OW UK for the supply of bunkers to the Vessels in the Port of Vancouver. There is no dispute between the parties that those orders were “spot purchases” as opposed to fixed price transactions falling under the Fixed Price Agreement.
[10] Later that day, OW UK sent Canpotex two sales order confirmations (the OW UK Confirmations) which provided that the purchases were subject to the OW Group’s General Terms and Conditions of sale which were incorporated in the confirmations and made accessible by way of a URL link. The OW UK Confirmations further indicated that OW UK had made arrangements with a third party, namely Petrobulk, for the physical delivery of the bunkers at the Port of Vancouver. There were no further negotiations between Canpotex and the OW Group following the OW UK Confirmations.
[11] On October 22, 2014, following an inquiry from OW UK as to whether Petrobulk could provide bunkers to the Vessels in the Port of Vancouver, Petrobulk confirmed to OW UK that it was prepared to deliver the bunkers to the Vessels. Petrobulk’s written confirmations made it clear to OW UK that its services were subject to its own Standard Terms and Conditions of sale and delivery (Petrobulk’s Standard Terms and Conditions), which were incorporated in its confirmations (the Petrobulk Confirmations).
[12] Also on October 22, 2014, OW UK sent to Petrobulk purchase order confirmations in regard to the delivery of the bunkers to the Vessels.
[13] On October 27, 2014, Petrobulk delivered the bunkers to the Vessels in the Port of Vancouver. On that day, OW UK invoiced Canpotex in respect of the bunkers provided by Petrobulk to the Vessels for a total amount of USD $654,493.15 due on November 26, 2014. On October 28 and 29, 2014, Petrobulk invoiced OW UK in respect of the bunkers which it delivered to the Vessels for a total amount of USD $648,917.40. The difference between the two amounts constitutes OW UK’s mark up for its services.
C. Bankruptcy of the OW Group
[14] On December 19, 2013, OW S&T and a number of its subsidiaries, including OW UK, assigned their receivables from the sale of bunkers to ING. Canpotex was notified of this assignment during the month of December 2013.
[15] On November 7, 2014, OW S&T filed for bankruptcy and OW UK did the same shortly thereafter. On November 12, 2014, ING appointed Green, Lomas and Copley (the Receivers) as receivers of the OW Group’s receivables. On December 12, 2014, Charles Christopher Macmillan was appointed administrator of OW UK (the Administrator) in the English bankruptcy proceedings.
[16] Pursuant to a cooperation agreement entered into by ING, the Receivers and the Administrator on December 22, 2014, it was agreed that all monies owing to OW UK assigned to ING would be collected by ING and payment to it would satisfy the debtors’ obligations to OW UK.
[17] On December 22, 2014, by reason of OW UK’s failure to pay its invoices, Petrobulk requested payment from Canpotex of the amount owed to it following its delivery of the bunkers on October 27, 2014. In making its request for payment, Petrobulk made Canpotex aware of its Standard Terms and Conditions. Further, Petrobulk indicated to Canpotex that it had a contractual lien against its assets and a maritime lien against the Vessels.
[18] On January 8, 2015, the Receivers requested payment from Canpotex of USD $654,493.15 and advised Canpotex that, unless payment was made, they would exercise all of their rights including the arrest of the Vessels.
III. The Proceedings
[19] On January 23, 2015, Canpotex filed a statement of claim in the Federal Court seeking, inter alia, directions from the Court pursuant to Rule 108 of the Federal Courts Rules, SOR/98-106 (the Rules). More particularly, Canpotex sought an order granting it leave to deposit into Court the sum of USD $654,493.15 and an order declaring that, upon deposit into Court of the aforesaid funds, its liability in respect of the supply of the bunkers to the Vessels would be extinguished.
[20] Further to filing its statement of claim, Canpotex filed a motion on February 11, 2015, pursuant to Rule 108(1) and (2), seeking an order allowing it to deposit into Court the sum of USD $654,493.15 plus admiralty interest from November 26, 2014 to the date of the deposit and a declaration that upon said deposit, its liability in respect of the supply of the bunkers to the Vessels was extinguished.
[21] Canpotex’s motion was heard by Prothonotary Lafrenière (the Prothonotary) who, on March 27, 2015, ordered Canpotex to deposit the sum of USD $654,493.15, plus admiralty interest from November 26, 2014 to March 31, 2015 in the sum of USD $6,557.48, for a total sum of USD $661,050.63 (the Trust Funds) into the U.S. Trust account of its solicitors. This deposit was to be “treated as the equivalent of a payment into Court” (paragraph 2 of the Prothonotary’s order).
[22] The Prothonotary further ordered that the hearing of the claims against the Trust Funds should be held no later than July 17, 2015 “subject to the availability of the Court and counsel of record” and that, pending the hearing, no proceedings were to be commenced nor were any claims to be made against the Vessels or their owners in respect of the bunkers supplied to the Vessels on October 27, 2014.
[23] On April 2, 2015, Canpotex deposited the Trust Funds in its solicitors’ U.S. Trust account in compliance with the Prothonotary’s order.
[24] On April 14, 2015, the statement of claim filed by Canpotex on January 23, 2015 was amended by consent of all interested parties. More particularly, the Shipowners were added as plaintiffs to the action and the appellants Green, Lomas and Copley, in their capacities as Receivers, were added as defendants.
[25] On June 19, 2015, Canpotex and the Shipowners filed a motion seeking judgment, pursuant to Rules 216, 64 and 108(1) and (2), declaring which entity, Petrobulk and/or ING, was entitled to all, or part, of the Trust Funds and also declaring that any and all liability of Canpotex and the Shipowners, following payment out of the Trust Funds, was extinguished.
[26] On June 22, 2015, Petrobulk filed a motion, pursuant to Rules 108 and 216, seeking judgment in regard to its unpaid invoices totalling USD $648,917.40 in connection with its delivery of the bunkers on October 27, 2014, and a declaration that it was entitled to payment out of the Trust Funds.
[27] Also on June 22, 2015, the appellants (who shall hereafter be referred to as ING) filed a motion, pursuant to Rules 108 and 216, seeking judgment in regard to the unpaid invoices of OW UK totalling USD $654,493.15 in connection with the bunker delivery, and a declaration that it was entitled to be paid out of the Trust Funds.
[28] Petrobulk’s and ING’s claims against the Trust Funds were heard by Mr. Justice Russell (the Judge) on July 16, 2015 (2015 FC 1108). On September 23, 2015, the Judge disposed of the claims against the Trust Funds in the following way:
He ordered Canpotex to pay to the respondent Petrobulk USD $648,917.40 together with admiralty interest on that sum.
He ordered that Petrobulk be paid the aforesaid sum from the Trust Funds.
He ordered Canpotex to pay ING an amount equal to the mark up payable to OW UK for the supply by Petrobulk of the bunkers to the Vessels on October 27, 2014 together with maritime interest payable thereon.
He ordered that, following payment of the aforesaid sums, any and all liability of Canpotex, the Vessels and their owners in respect of the bunkers supplied to the Vessels on October 27, 2014 would be extinguished together with any and all liens.
Finally, he ordered ING to pay the costs of the respondents.
[29] The appeal before us is an appeal of the Judge’s decision of September 23, 2015. For the reasons that follow, I would allow the appeal with costs herein and below, and I would return the matter to the Judge for reconsideration in light of these reasons.
IV. The Prothonotary’s Order
[30] At paragraphs 21 and 22 of these reasons, I summarized the Prothonotary’s order. Consequently, I need not say anything further in that regard, other than to point out that there is a dispute between the parties as to the meaning and significance of his order. In brief, the respondents take the position that the Prothonotary made an order allowing interpleader relief for both Canpotex and the Shipowners in regard to the sums owed in connection with the delivery of the bunkers. ING, on the other hand, takes the position that the Prothonotary made no such order and that, consequently, Canpotex and the Shipowners are not entitled to interpleader relief in the circumstances of this case.
[31] Part of the difficulty in resolving this dispute lies in the fact that the Prothonotary did not give any reasons for his order other than a statement, to which I will return later in these reasons, found at pages 2 and 3 of his order, that it was “premature to make a full and final determination of Marine Petrobulk’s right to assert a maritime lien against the [Shipowners’] vessels, and that an interpleader application is not the proper forum to make such a determination in a summary way”.
V. The Federal Court’s Decision
[32] After setting out the relevant facts and the relevant statutory provisions, the Judge summarized the parties’ respective arguments in support of their claims against the Trust Funds. He then proceeded to discuss the issues before him. First, he dealt with three preliminary issues, namely: the availability of interpleader; the affidavit of Claus Erik Mortensen, the head of OW S&T’s quality support department; and whether the matter before him was an appropriate case for summary trial under Rule 216. He then turned to the main issue, entitlement to the Trust Funds.
A. Availability of Interpleader Relief
[33] First, the Judge held that the availability of interpleader relief had been decided by the Prothonotary. In other words, it was his view that the Prothonotary had dealt with and accepted Canpotex’s motion as falling within the ambit of Rule 108. Consequently, as ING had not appealed the Prothonotary’s order, it was now too late for it to challenge the availability of interpleader relief. At paragraph 97 of his reasons, the Judge wrote as follows:
[97] Clearly, ING is seeking to preserve the debt that Canpotex owed to OW UK in the event that the Court decides that the Funds are to be paid to MP. In my view, that bridge has already been crossed. ING has already accepted that the Court should decide the allocation of the Funds issue pursuant to interpleader proceedings under Rule 108. In my view, that acceptance necessarily involves the concession that these are suitable proceedings for interpleader under Rule 108.
[34] However, the Judge went on to decide, in the alternative, that the matter before him was suitable for interpleader. Paragraph 104 of his reasons captures his rationale for that conclusion and I hereby reproduce it:
[104] In the present case, it is my view that the contractual arrangements entered into by Canpotex, OW UK and MP for the supply of marine bunkers to the Vessels render the subject matter of the competing claims between MP and ING the same. MP and ING both claim entitlement to that portion of the Funds which represents the amount claimed by MP for the supply of marine bunkers to the Vessels.
B. The Mortensen Affidavit
[35] The issue before the Judge was whether he should strike paragraphs 7 to 13 of Mr. Mortensen’s affidavit on the grounds that these paragraphs constituted opinion and hearsay. After reviewing the affidavit and considering the parties’ submissions, the Judge struck paragraphs 9 to 13 of the affidavit which, in his view, were “totally inappropriate in that they are nothing more than an unsubstantiated opinion on the very issue that the Court is now called upon to determine” (paragraph 115 of the reasons).
[36] In addition to striking paragraphs 9 to 13 of Mr. Mortensen’s affidavit, the Judge drew an adverse inference against ING for failing to call as a witness someone from the OW Group who had been involved in the negotiation of the Fixed Price Agreement.
C. Rule 216
[37] The Judge indicated there was no dispute between the parties as to whether the matter before him was an appropriate one for summary trial under Rule 216. After a brief review of the requirements of Rule 216, the Judge indicated, at paragraph 119 of his reasons, why he believed that proceeding by way of a summary trial was appropriate in the circumstances:
[119] In my view, there is adequate evidence before me to allow me to dispose of this matter summarily. The cost of taking the matter to a full trial, bearing in mind the amounts involved, also suggest that this matter should be determined summarily. There is also some urgency in that the allocation of the Funds should be determined as soon as possible so as to avoid costs associated with the maintenance of the trust.
D. Entitlement to Funds
[38] The Judge first addressed the matter of which terms and conditions applied to Canpotex’s spot purchases of the bunkers. The parties agreed that the bunker purchases were not made under the Fixed Price Agreement previously negotiated by Canpotex and the OW Group. However, there was disagreement as to whether Schedule 3 of the Fixed Price Agreement, entitled “Terms and Conditions of sale for Marine Bunkers”, also applied to Canpotex’s spot purchases. The language of Schedule 3 differs from the terms that would otherwise apply-the OW Group’s General Terms and Conditions. In particular, clause L.4 of the two sets of terms differs as follows:
Fixed Price Agreement, Schedule 3
OW Group’s General Terms and Conditions
L.4 a) These Terms and Conditions are subject to variation in circumstances where the physical supply of the fuel is being undertaken by a third party. In such circumstances, these terms and conditions shall be varied accordingly, and the Buyer shall be deemed to have read and accepted the terms and conditions imposed by the said third party on the Seller.
L.4 a) These Terms and Conditions are subject to variation in circumstances where the physical supply of the Bunkers is being undertaken by a third party which insists that the Buyer is also bound by its own terms and conditions. In such circumstances, these Terms and Conditions shall be varied accordingly, and the Buyer shall be deemed to have read and accepted the terms and conditions imposed by the said third party.
[emphasis added]
[emphasis added]
[39] After considering the evidence, particularly that of Mr. Keith Ball, the Judge concluded that Schedule 3 of the Fixed Price Agreement also applied to spot purchases made by Canpotex. Consequently, those terms and conditions applied to the bunker purchases of October 2014. The Judge was also of the view that, by reason of clause L.4 of Schedule 3 of the Fixed Price Agreement, the terms of contract between Canpotex and OW UK were subject to variation when the physical supply of the bunkers was provided by a third party. In such circumstances, Canpotex would be deemed to have read and accepted the terms and conditions imposed by the third party, “on the Seller” i.e. the OW Group.
[40] The Judge then turned his attention to Petrobulk’s Standard Terms and Conditions, noting that the Petrobulk Confirmations had made it clear that its Standard Terms and Conditions applied to its provision of the bunkers and that acceptance of its confirmations, and of its Standard Terms and Conditions, would be deemed final unless the Buyer, OW UK, objected within three business days of receipt of the confirmations.
[41] The Judge then went on to find that OW UK had raised no objections with regard to the application of Petrobulk’s Standard Terms and Conditions and that it had “understood and accepted that MP would supply the bunkers to the Vessels on MP’s Standard Terms and Conditions” (paragraph 132 of the reasons). The Judge also indicated that both Canpotex and OW UK clearly understood that their contractual relationship “would be varied where the physical supply of the fuel was undertaken by a third party such as MP, and that the buyer was deemed to have read and accepted the terms and conditions imposed by the third party” (paragraph 132 of the reasons). This led the Judge to conclude that Canpotex and OW UK were bound by Petrobulk’s Standard Terms and Conditions with regard to the delivery of the bunkers to the Vessels on October 27, 2014.
[42] The Judge then reviewed Petrobulk’s Standard Terms and Conditions and concluded that Canpotex and OW UK were jointly and severally liable to pay to Petrobulk the full purchase price of the bunkers. At paragraph 136 of his reasons, the Judge wrote the following:
[136] In my view, the agreement is clear that Canpotex and OW UK were jointly and severally liable to pay MP the full purchase price for the marine bunkers delivered to the Vessels. This is so even though MP initially invoiced OW UK for the purchase price. In my view, this liability arises irrespective of whether OW UK acted as agent, broker or manager for this supply of the bunkers. The definition of “Customer” under s 1 of the MP’s Standard Terms and Conditions captures both Canpotex and OW UK as Customers, and s 2 also deems any principal, agent, manager or broker to be a Customer, “all of whom shall be jointly and severally liable as Customer under each Agreement.” Read in the context of the whole clause and agreement, these words, in my view, cannot possibly mean that joint and several liability only arises if there is a principal/agent, broker or manager relationship. The clause simply brings such parties within the meaning of “Customer” if there is such a relationship, and it is all customers who are jointly and severally liable “under each Agreement.” On the facts before me, this means that joint and several liability extends to MP [presumably the Judge meant Canpotex and not MP] and OW UK because they both meet the definition of “Customer” either under s 1, or under s 2 if there is an agency manager or broker relationship. The Court does not have to decide if a principal/agent relationship exits in this case between Canpotex and OW UK….
[43] The Judge also held that by reason of clause 10 of its Standard Terms and Conditions, Petrobulk had a contractual lien on the Vessels for the amount owed to it for the supply of the bunkers. However, he expressed doubt as to whether Petrobulk’s contractual lien could be exercised against the Trust Funds.
[44] The Judge then turned to section 139 of the Marine Liability Act, S.C. 2001, c. 6 (the MLA) and concluded that Petrobulk met the statutory requirements of that provision and hence that it had a maritime lien which could be exercised against the Vessels for non-payment of the delivery price of the bunkers. His rationale for that conclusion is found at paragraph 142 of his reasons where he says:
[142] I am prepared to accept that a maritime lien under s 139 does flow to MP because all of the statutory requirements are met in this case. MP is a Canadian company carrying on business in Canada and has supplied goods to the foreign Vessels for their operation. But whether a s 139 maritime lien in the Vessels can extend to the Funds in this case does not, in my view, automatically follow. The Funds were put up by Canpotex so that neither MP nor OW UK would asset [sic] liens and arrest the Vessels. This doesn’t mean that they replace the res.
[45] Finally, at paragraph 145 of his reasons, the Judge held that ING had no contractual or lien right against the Trust Funds or the Vessels and that consequently Petrobulk was entitled to payment out of the Trust Funds “as a function of contract law and equity”. He further stated that, on the basis of the Federal Court’s decision in Balcan ehf v. The Atlas, 2001 F.C.T. 1328, [2001] F.C.J. No. 1820, ING could not assert any in rem claims against the Vessels or the Trust Funds because the OW Group had not physically supplied the bunkers to the Vessels.
[46] Hence, in the Judge’s view, Petrobulk was contractually entitled to be paid out of the Trust Funds. He therefore ordered that Petrobulk be paid their due from the Trust Funds and that ING be paid the mark up owed to OW UK. He then extinguished both Canpotex’s and the Shipowners’ liability in regard to the bunker delivery of October 27, 2014, as well as any and all liens.
VI. Issues
[47] The appeal raises, in my view, the following questions:
Did the Judge err in deciding that interpleader relief was available?
Did the Judge err in striking parts of the Mortensen affidavit and in drawing an adverse inference against the appellant?
Did the Judge err in deciding that Schedule 3 of the Fixed Price Agreement applied to the bunker purchases?
Did the Judge err in finding that Canpotex and OW UK were jointly and severally liable to pay MP for the delivery of the bunkers?
VII. Analysis
[48] Before addressing the first issue, a few words regarding the applicable standard of review are necessary. As this is an appeal from a decision of the Federal Court, the standards enunciated by the Supreme Court in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235 (Housen), are applicable. Thus, questions of law are subject to a standard of correctness while questions of fact are subject to the palpable and overriding error standard. With respect to mixed questions of fact and law, they will also be subject to the palpable and overriding error standard except where there exists an extricable question of law in which case the applicable standard will be that of correctness.
[49] I now turn to the first issue.
A. Did the Judge err in deciding that interpleader relief was available?
[50] I begin by setting out Rule 108(1) and (2) pursuant to which the Prothonotary made his order of March 27, 2015:
Interpleader
Interplaidoirie
108 (1) Where two or more persons make conflicting claims against another person in respect of property in the possession of that person and that person
108 (1) Lorsque deux ou plusieurs personnes font valoir des réclamations contradictoires contre une autre personne à l’égard de biens qui sont en la possession de celle-ci, cette dernière peut, par voie de requête ex parte, demander des directives sur la façon de trancher ces réclamations, si :
(a) claims no interest in the property, and
a) d’une part, elle ne revendique aucun droit sur ces biens;
(b) is willing to deposit the property with the Court or dispose of it as the Court directs,
that person may bring an ex parte motion for directions as to how the claims are to be decided.
b) d’autre part, elle accepte de remettre les biens à la Cour ou d’en disposer selon les directives de celle-ci.
Directions
Directives
(2) On a motion under subsection (1), the Court shall give directions regarding
(2) Sur réception de la requête visée au paragraphe (1), la Cour donne des directives concernant :
(a) notice to be given to possible claimants and advertising for claimants;
a) l’avis à donner aux réclamants éventuels et la publicité pertinente;
(b) the time within which claimants shall be required to file their claims; and
b) le délai de dépôt des réclamations;
(c) the procedure to be followed in determining the rights of the claimants.
c) la procédure à suivre pour décider des droits des réclamants.
[emphasis added]
[Non souligné dans l’original]
[51] On Canpotex’s motion for interpleader relief, the Prothonotary ordered, after directing Canpotex to deposit the Trust Funds into its solicitors’ U.S. Trust account, that there be a “hearing of the respective claims to the Trust Funds”. The Prothonotary further ordered that pending such hearing, no one could institute proceedings or make any claims against the Vessels or the Shipowners in connection with the delivery of the bunkers on October 27, 2014.
[52] As they did before the Judge, the parties continue to disagree as to what the Prothonotary decided. ING argues that the Prothonotary did not grant interpleader relief since he did not extinguish Canpotex’s liability, but merely ordered that the Trust Funds be paid into Court. ING contends that interpleader relief is not available in this case since, at the time of the hearing before the Prothonotary, the evidence had not yet been settled. Consequently, it submits that the claims against Canpotex were simply put over for consideration at a full hearing. With respect to the merits of the issue, ING takes the position that the respondents do not meet the Rule 108 test for interpleader as they are not a single person interpleading a single item of property. In addition, ING contends that while Canpotex may in the future be indirectly exposed to multiple claims, those claims do not constitute conflicting claims within the meaning of Rule 108.
[53] Canpotex and the Shipowners say that the issue as to whether interpleader relief is available was decided by the Prothonotary’s order which left only for consideration the issue of potential liens against the Vessels and the appropriate division of the Trust Funds. Thus, they contend that the doctrine of issue estoppel precludes ING from relitigating the availability of interpleader. In the alternative, they say that interpleader is available in this case since there are conflicting claims for the same sum of money, the only difference between OW UK’s and Petrobulk’s claims being the mark up charged by OW UK for its services.
[54] Although I am not entirely certain of the respondents’ specific contention in regard to whose liability the Court should extinguish, it appears that they not only seek the extinguishment of Canpotex’s liability, but also that of the Shipowners. I come to this view because of paragraphs 62 and 74 of their memorandum of fact and law where they say:
62. As the argument had been raised by the Defendants that the in rem claims could not be extinguished by a declaratory judgment without the shipowners participating in the action, the shipowners and disponent owner were joined as Plaintiffs. As is clear from the charterparties, those parties are entitled to indemnities from Canpotex, and any in rem claim for unpaid bunkers would have had to be defended by Canpotex. The new parties were added to avoid having to address a peripheral point; however, it is clear that whether proceedings were brought in personam, or in rem, they would be directed to, and defended by, Canpotex. [internal citation omitted]
74. In this case, not only were the bunkers supplied in Canada, but the parties agreed that the proper law was Canadian law, and the appropriate forum was the Federal Court. It is respectfully submitted that in allowing interpleader relief in this case, the Trial Judge correctly applied Rule 108 and the Order extinguishing all in rem rights in precisely the same way as was done by this Court in previous jurisprudence.
[55] That view finds support in the fact that the Judge ordered the extinguishment of both Canpotex’s and the Shipowners’ liability in respect of the bunker delivery.
[56] Petrobulk argues that the Prothonotary’s order clearly decided that interpleader relief was available in this case. In the absence of an appeal from that order, it says that the Judge was correct to hold that it was no longer open to ING to reargue this issue. In any event, Petrobulk says that the Judge correctly concluded that this was a proper case for interpleader under Rule 108.
[57] The true meaning of interpleader was encapsulated by the Court of Appeal of California, Sixth Appellate District, in City of Morgan Hill v. Brown, 71 Cal. App. 4th 1114 at 1122 (Sixth 1999), 84 Cal. Rptr. 2d 361, when it said that “[t]he purpose of interpleader is to prevent a multiplicity of suits and double vexation.” The Court then went on to say, citing Pfister v. Wade, (1880) 56 Cal. 43 at 47, that “[t]he right to the remedy by interpleader is founded, however, not on the consideration that a [person] may be subjected to double liability, but on the fact that he is threatened with double vexation in respect to one liability.”
[58] To the same effect, but in more expansive terms, are the words of Mr. Justice Chong of the Singapore High Court in Precious Shipping Public Company Ltd v. O.W. Bunker Far East (Singapore) Pte Ltd, [2015] S.G.H.C. 187, where at paragraphs 59 and 60, he sets out his understanding of interpleader:
59 In other words, interpleader proceedings exist to assist applicants who want to discharge their legal obligations (to pay a debt, deliver up property etc.) but do not know to whom they should do so.…
60 The applicant in an interpleader summons is caught between the devil and the deep blue sea — if he discharges his obligation to one claimant, he exposes himself to suit from the other. In such a situation, the relief of interpleader comes to his aid by compelling the real claimants to present their cases in order that the court can determine which one of the competing claimants has the legal entitlement to call on the enforcement of the applicant’s admitted liability. The applicant, having disclaimed any interest in the subject matter of the dispute, “drops out” and is released from the proceedings (see De La Rue at 173). In other words, the object of an interpleader is the determination of the incidence of liability; ie, it serves to identify the person to whom the applicant is liable. It follows from this that interpleader relief is not available where the applicant is separately liable to both claimants (see Farr v. Ward [1837] 150 ER 1000) because there is no controversy in such a case: there are two obligations both of which the applicant is legally bound to discharge.
[italics in original]
[59] Chong J. then goes on to explain what constitute competing claims [as Rule 108 uses the expression “conflicting claims” that is the expression which I will use hereafter] which will give rise to interpleader relief. First, in his view, the claims must be claims pertaining to the same subject matter. Second, such claims must be mutually exclusive. In other words, a determination of the interpleader proceedings will extinguish the unsuccessful conflicting claims. Third, the claims must be such that “the applicant must face an actual dilemma as to how he should act” (paragraph 67 of Chong J.’s reasons).
[60] With the above in mind, it seems to me that the only claims that are “conflicting” and thus can give rise to interpleader relief under Rule 108 are the contractual claims advanced by OW UK and Petrobulk. In my view, Petrobulk’s assertion of a maritime lien, based on section 139 of the MLA, is not a conflicting claim within the meaning of Rule 108 as that claim is a claim against the Vessels, and hence against the Shipowners, and not against Canpotex. In other words, the Shipowners’ liability to Petrobulk on account of section 139 of the MLA constitutes a separate and distinct cause of action. The fact that the Shipowners may ultimately have a claim against Canpotex, based on the terms of the Charter Parties, does not transform the section 139 claim into a conflicting claim.
[61] I now turn to the question of whether it was open to ING to raise the availability of interpleader relief even though it did not appeal the Prothonotary’s order. As I indicated earlier, the Judge was of the view that it was too late for ING to challenge Canpotex’s right to interpleader relief. In order to decide whether the Judge was correct in so finding, I must now return to the Prothonotary’s order.
[62] I have no doubt that the Prothonotary was of the view that Canpotex was entitled to interpleader relief. That is why he ordered Canpotex to deposit the Trust Funds into its solicitor’s trust account. However, the Prothonotary clearly did not make any order of interpleader with respect to the Shipowners as they were not parties to the proceedings when he made his order. Thus, the issue of interpleader determined by the Prothonotary was limited to Canpotex’s liability.
[63] On my understanding of the Prothonotary’s order, it is my view that the Trust Funds would have to be paid either to OW UK, by reason of its agreement with Canpotex to supply bunkers to the Vessels, or to Petrobulk whose position was, leaving aside its assertion of a maritime lien, that both OW UK and Canpotex were contractually liable to it for the sums owed in connection with its delivery of bunkers. These claims, I am satisfied, fell under the Prothonotary’s order as OW UK and Petrobulk were, in effect, claiming the same amount under the same contract. That, in my respectful view, is the extent of the Prothonotary’s order. Consequently, pursuant to his order, either OW UK or Petrobulk was entitled to the Trust Funds by reason of its contractual claims, save for the small portion representing OW UK’s mark up which, without doubt, was owed to OW UK and hence payable to ING.
[64] If I am correct in my view of the matter, Canpotex is entitled to the extinguishment of its liability only in regard to the contractual claims. If, as the Judge concluded, Petrobulk is contractually entitled to payment out of the Trust Funds, Canpotex’s contractual liability to both Petrobulk and OW UK will be extinguished upon payment of the Trust Funds to Petrobulk. As a consequence, there will be no reason for Petrobulk to pursue its claim based on section 139 of the MLA.
[65] If, however, that determination is wrong and it is determined that OW UK is the party contractually entitled to payment of the Trust Funds, Canpotex’s contractual liability will be extinguished but Petrobulk’s section 139 claim will remain alive. As I indicated earlier, the section 139 claim, if founded, gives Petrobulk a right to arrest the Vessels owned by the Shipowners and to have the Vessels sold if its claim is not satisfied. In such circumstances, the Shipowners are the parties that would have to pay Petrobulk the amount due in respect of the bunkers in order to prevent the sale of their assets. Canpotex does not own the Vessels nor is it directly liable to Petrobulk in regard to the section 139 maritime lien. The fact that Canpotex may have to indemnify the Shipowners because of its obligations under the Charter Parties does not transform Petrobulk’s maritime lien claim into a conflicting claim under Rule 108 in regard to which Canpotex’s liability can be extinguished.
[66] Therefore, in my respectful view, what the Judge had to decide, and he did, was who, as between OW UK and Petrobulk, was contractually entitled to the Trust Funds under the contractual arrangements with Canpotex.
[67] A few additional remarks must be made before turning to the second issue.
[68] Although the Judge appears to have understood that the Prothonotary’s order regarding interpleader relief concerned Canpotex’s liability only, he nonetheless dealt with the S