Canpotex Shipping Services Limited v. Marine Petrobulk Ltd.

Canpotex Shipping Services Limited v. Marine Petrobulk Ltd.
Court (s) Database
Federal Court Decisions
Date
2018-09-28
Neutral citation
2018 FC 957
File numbers
T-109-15
Decision Content
Date: 20180928
Docket: T-109-15
Citation: 2018 FC 957
Ottawa, Ontario, September 28, 2018
PRESENT: The Honourable Mr. Justice Russell
BETWEEN:
CANPOTEX SHIPPING SERVICES LIMITED, NORR SYSTEMS PTE. LTD., OLDENDORFF CARRIERS GMBH & CO. K.G. AND STAR NAVIGATION CORPORATION S.A.
Plaintiffs
and
MARINE PETROBULK LTD., O.W. SUPPLY & TRADING A/S, O.W. BUNKERS (UK) LIMITED, 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
Defendants
JUDGMENT AND REASONS
I. INTRODUCTION
[1] These motions are by way of re-hearing in accordance with the directions and reasons of the Federal Court of Appeal [FCA] in its decision of ING Bank NV v Canpotex Shipping Services Limited, 2017 FCA 47 [FCA Decision] that dealt with my Judgment and Reasons of September 23, 2015 in Canpotex Shipping Services Limited v Marine Petrobulk Ltd, 2015 FC 1108 [First Decision].
[2] There are three motions for summary judgment pursuant to Rules 108 and 216 of the Federal Courts Rules, SOR/98-106 [Federal Courts Rules] before the Court. Pursuant to an Order of Prothonotary Lafrenière (as he then was) dated March 27, 2015, Canpotex Shipping Services Limited [Canpotex] paid USD$661,050.63 into trust [Funds] which was to be treated as the equivalent to a payment into Court. Canpotex seeks summary judgment that its payment into Court has extinguished any liabilities against Canpotex related to the purchase and delivery of certain fuel bunkers. ING Bank [ING] and Ian David Green, Anthony Victor Lomas and Paul David Copley [Receivers] seek summary judgment that ING is entitled to the Funds. Marine Petrobulk Ltd [MP] seeks summary judgment that it is entitled to the Funds, minus a mark-up sum as set out in detail later in these reasons.
II. BACKGROUND
[3] I set out the general background to this dispute in my First Decision which, for convenience, I reproduce here.
[4] On February 14, 2014, Canpotex and O.W. Supply & Trading A/S [OW Trading] entered into a contract for the time-to-time purchase of marine bunkers by Canpotex from OW Trading, for vessels that Canpotex charters [Fixed Price Agreement]. The contract was not signed until sometime in June 2014.
[5] On October 3, 2014, Canpotex time chartered the vessel MV Star Jing. The vessel is owned by the Plaintiff, Olendorff Carriers GmbH & Co KG, a company incorporated in Germany and with its head office in Germany. The contract provides that Canpotex will pay for all fuel and will not allow any liens against the vessel.
[6] On October 7, 2014, Canpotex time chartered the vessel MV Ken Star which is owned by the Plaintiff, Star Navigation Corporation SA, a company incorporated in Liberia with its head office in Greece. The contract provides that Canpotex will pay for all fuel and will not allow any liens against the vessel.
[7] On October 22, 2014, Canpotex ordered marine bunkers from the Defendant, O.W. Bunkers (UK) Limited [OW UK], a subsidiary of OW Trading. The marine bunkers were to be delivered to the MV Ken Star.
[8] On October 22, 2014, Canpotex also ordered marine bunkers from OW UK to be delivered to the MV Star Jing.
[9] Both Sales Order Confirmations show that the physical supplier of the fuel was to be the Defendant, MP, a British Columbia bunker fuel supply company.
[10] The parties disagreed about whether the Fixed Price Agreement, OW UK’s general terms and conditions [GTCs], or MP’s standard terms and conditions [STCs] governed the fuel purchases. [This issue has now been settled by the FCA in the FCA Decision.]
[11] On October 27, 2014, MP provided the marine bunkers for use on the MV Ken Star and MV Star Jing [collectively, the Vessels] in Vancouver.
[12] On October 27, 2014, OW UK invoiced Canpotex for the marine bunkers – USD$375,525.000 for the MV Ken Star and USD$278,968.15 for the MV Star Jing. The invoices indicated that payment was due to OW UK by November 26, 2014.
[13] On October 28 and 29, 2014, MP invoiced OW UK for the marine bunkers supplied – USD$372,300.00 for the MV Ken Star and USD$276,617.40 for the MV Star Jing.
[14] Pursuant to an agreement of December 19, 2013, OW Trading, and certain subsidiaries including OW UK, assigned all rights, interest and title in their third party and intercompany receivables to ING. Receivables from the sale of marine bunkers were specifically assigned to ING. Canpotex was notified of the assignment in December 2013.
[15] On November 7, 2014, OW Trading filed for bankruptcy; OW UK, and other related subsidiaries, filed for bankruptcy shortly thereafter.
[16] On November 12, 2014, ING appointed the Receivers as receivers of OW Trading and OW UK’s receivables.
[17] On December 12, 2014, Charles Christopher Macmillen [Administrator] was appointed administrator of OW UK.
[18] On December 22, 2014, the Administrator, the Receivers and ING entered into a cooperation agreement, pursuant to which money owed in relation to OW UK receivables would be paid into ING accounts.
[19] OW UK never paid MP’s invoices.
[20] On December 22, 2014, MP demanded payment of USD$648,917.40 from Canpotex for the marine bunkers that MP had supplied to the Vessels. MP claimed it had a maritime lien in accordance with its contract with OW UK and would arrest the Vessels unless Canpotex paid the invoices.
[21] On January 8, 2015, the Receivers demanded payment from Canpotex for the amount owing under the OW UK invoices. The Receivers advised that if payment was not forthcoming, they reserved the right to exercise all powers available to them, including the arrest of the Vessels.
[22] Canpotex does not dispute that it owes the sum of USD$654,493.15 under the OW UK invoices. It says that it has held back the funds because it has received competing demands for them and does not want to expose the Vessels to any liability or liens.
[23] On April 2, 2015, in accordance with the March 27, 2015 Order of Prothonotary Lafrenière, as he then was, Canpotex paid the Funds, USD$661,050.63 (the principal amount owed under the OW UK invoices plus admiralty interest), into the United States trust account of its solicitor. Prothonotary Lafrenière’s Order deemed this deposit to be a payment into the Court.
[24] On June 22, 2015, the Plaintiffs brought a motion in this Court for a declaration establishing:
a) Which of the Defendants is entitled to all, or part, of the Funds;
b) The specific entitlement of each Defendant to receive part, or all, of the Funds;
c) Payment out in accordance with a) and b);
d) That any and all liability of the Plaintiffs and the Vessels to the Defendants in respect of the marine bunkers supplied to the Vessels on October 27, 2014 in Vancouver is extinguished upon payment out of the Funds; and,
e) That the Plaintiffs recover the costs of the action from one of the Defendants or the Funds.
[25] On June 22, 2015, ING and the Receivers brought a motion for:
a) A declaration that the Funds be paid to ING in satisfaction of Canpotex’s debt to OW UK; and,
b) Costs of the proceedings.
[26] On June 22, 2015, MP brought a motion for:
a) Judgment in the Canadian equivalent of MP’s invoices for the supply of the marine bunkers – USD$372,300.00 for the MV Ken Star and USD$276,617.40 for the MV Star Jing;
b) A declaration that MP is entitled to be paid from the Funds;
c) Interest on the amounts payable to MP at admiralty rates; and,
d) Costs of the proceedings.
III. FIRST DECISION
[27] In my First Decision, I decided as follows:
1. Canpotex shall pay to the Defendant, Marine Petrobulk Ltd, the sum of USD$648,917.40 together with admiralty interest thereon;
2. The Defendant, Marine Petrobulk Ltd, shall be paid the above amount from the Funds presently held in trust pursuant to the Order to March 27, 2015;
3. Canpotex shall pay (subject to the costs payable in accordance with paragraph 5 of this Order set out below) to the Defendants, 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 (U.K.) Limited, and others, an amount equal to the mark-up payable to O.W. Bunkers (U.K.) Limited for the supply by Marine Petrobulk Ltd of bunkers to the Vessels, together with the maritime interest payable thereon. The balance of the Funds held in trust shall be applied against this amount after Marine Petrobulk Ltd has been paid in full in accordance with paragraphs 1. and 2. above;
4. Upon payment in accordance with paragraphs 1., 2. and 3. above, any and all liability of the Plaintiffs and the Vessels to the Defendants in respect of the marine bunkers supplied to the Vessels on or about October 27, 2014 in Vancouver, British Columbia together with any and all liens, is extinguished;
5. The Defendants, 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 (U.K.) Limited, and others shall pay the costs of the Plaintiffs and the Defendant, Marine Petrobulk Ltd, for this action and motion which costs may be deducted and paid from the amount payable to 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 (U.K.) Limited, and others from the Funds held in trust in accordance with paragraph 3. above; and,
6. Any balance remaining of the Funds held in trust after payments and costs are made as set out above shall be returned to Canpotex.
IV. FCA DECISION
[28] In its decision of March 10, 2017, the FCA allowed the appeal and returned the matter to me for reconsideration in accordance with the FCA’s reasons.
[29] The principal findings and conclusions of the FCA that govern this reconsideration are, in my view, as follows:
(1) Section 139 Claim
[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 [Marine Liability Act, SC 2001, c 6], 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.
…
[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.
…
[71] However, because the section 139 claim was not a conflicting claim under Rule 108, it should not, in my respectful view, have been dealt with in the context of interpleader relief. In other words, that claim should have either proceeded separately or waited for the outcome of the Judge’s determination of the contractual claims against Canpotex.
[72] Although he does not say so in express terms, the Judge appears to have recognized that Petrobulk’s section 139 claim gave Petrobulk no rights against the Trust Funds. At paragraph 142 of his reasons, where he concludes that Petrobulk has a valid maritime lien under section 139 of the MLA, the Judge says that:
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.
He completed his thoughts on this point at paragraph 144 where he stated that “I don’t think it is necessary for me to decide whether MP has a contractual or a s 139 maritime lien in the Funds.”
[73] There can be no doubt that the Trust Funds did not replace the res as the section 139 claim was not a conflicting claim; it constituted a separate cause of action against the Vessels and the Shipowners. Consequently, it is my opinion that, to the extent that the Judge could make any determination regarding the section 139 claim, he could not extinguish the Shipowners’ liability. Nor could he do so in regard to Petrobulk’s assertion of a contractual lien against the Shipowners. In any event, it is clear from paragraph 144 of the Judge’s reasons that he did not decide whether Petrobulk had a contractual or a section 139 maritime lien against the Trust Funds.
[74] Hence, in my respectful view, it was wrong for the Judge to extinguish Canpotex’s and the Shipowners’ liability in regard to the section 139 claim. All that the Judge could do was to extinguish Canpotex’s liability in regard to the contractual claims asserted by OW UK and Petrobulk.
[75] Needless to say, it necessarily follows that if the Judge’s determination of the contractual claims is correct, then Petrobulk, having been paid out of the Trust Funds, will not pursue its section 139 claim against the Vessels and the Shipowners. In other words, Petrobulk’s claim having been satisfied by the Trust Funds, there will remain no grounds for it to pursue that claim. There will be no issue remaining for litigation.
[76] However, to make myself perfectly clear, it was not open to the Judge on the interpleader application to extinguish the Shipowners’ liability and that of Canpotex arising out of its obligations under the Charter Parties. I now turn to the second question at issue in this appeal.
…
(2) Contractual Dispute
[96] In my respectful view, the Judge erred in concluding that Schedule 3 of the Fixed Price Agreement, and more particularly clause L.4 thereof, applied to the bunkers delivered to the Vessels on October 27, 2014.
[97] I begin by saying that I do not have much doubt that were it not for Mr. Ball’s evidence, the Judge would necessarily have concluded that Schedule 3 of the Fixed Price Agreement did not apply to the bunker purchases at issue in these proceedings. Instead, the Judge would have concluded, in my respectful view, that the OW Group’s General Terms and Conditions were applicable to the bunker purchases. A brief review of the relevant documents, and more particularly of the relevant provisions found in those documents, will demonstrate the soundness of this proposition.
…
[120] In my respectful opinion, the Judge should not have considered Mr. Ball’s evidence. More particularly, his evidence could not be used to, in effect, replace the words used by the parties. In other words, to paraphrase what Mr. Justice Rothstein said at paragraph 57 of his reasons in Sattva, Mr. Ball’s evidence could not serve to either “overwhelm the words of” the Fixed Price Agreement or of the spot contracts or “to deviate from the text such that the court effectively creates a new agreement”.
…
[127] I therefore conclude that Schedule 3 of the Fixed Agreement does not apply to the bunker purchases of October 22, 2014. Consequently, the terms applicable are those found in the OW Group’s General Terms and Conditions. Hence, clause L.4 of those General Terms and Conditions is the relevant L.4 and not the one found in Schedule 3.
[128] Because of his conclusion that Schedule 3 applied to the bunker purchases at issue, the Judge did not turn his mind to the OW Group’s General Terms and Conditions, and consequently, he did not examine clause L.4 of those terms. The parties are in agreement that clause L.4 of the OW Group’s General Terms and Conditions differs from the one found in Schedule 3 in that the clause requires that the third party “insists”. The Judge did not address the meaning of the word “insists” and he made no finding as to whether Petrobulk had insisted that Canpotex be bound by its terms and conditions.
[129] Although the parties have not pointed to any other difference between the two L.4 clauses, I see two additional differences which may be material. It is useful to again reproduce the two L.4 clauses which can already be found at paragraph 38 of these reasons:
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]
[130] The first additional difference that I see between the two clauses is found in the sixth and seventh lines of the L.4 clause of the OW Group’s General Terms and Conditions where the words “the Buyer is also bound by its own terms and conditions” appear. Those words do not appear in L.4 of Schedule 3. The other difference is found in L.4 of Schedule 3 where the words “on the Seller” appear at the end of the clause. These words are absent in L.4 of the OW Group’s General Terms and Conditions. Whether these differences have an impact or not on the ultimate determination is not a question which I intend to answer as I am satisfied that the proper remedy in the circumstances of this case is to return the matter to the Judge for reconsideration.
[131] Because the Judge made no finding in respect of the OW Group’s General Terms and Conditions, and in particular with regard to clause L.4 thereof, the appeal before us was argued exclusively on the basis of clause L.4 of Schedule 3. The parties did not make any arguments as to the meaning of clause L.4 of the General Terms and Conditions, except for a brief submission by Petrobulk that it had insisted that Canpotex be bound by its Standard Terms and Conditions. Consequently, it is my view that it would not be wise for us to make the determination which should be made by the Judge. Should the matter return to us in a further appeal, we would also, it goes without saying, benefit from the Judge’s view on the meaning of clause L.4 of the OW Group’s General Terms and Conditions and its effect on the relationship between OW UK, Canpotex and Petrobulk.
[30] I think I have to assume that the FCA found no objection to the balance of my analysis or my conclusions.
V. ISSUES
[31] My duty in this proceeding is to reconsider the matter in light of the FCA’s reasons.
[32] The parties are not entirely in agreement as to what this involves.
[33] MP says that the following points are at issue before me:
(a) As noted above the key issue for determination is whether there is any material difference between the L4 clause you relied upon in your initial decision and the L4 clause the FCA concluded applies.
(b) If for any reason Marine Petrobulk is not entitled to payment from the Trust Funds can their maritime lien in relation to the supply of bunkers be extinguished?
[34] The other Defendants say there is only one issue before me:
26. The only question to be resolved in this proceeding is whether OW (and thus ING) or MP is contractually entitled to the Funds—i.e., the sum due under the OW Invoices. To the extent Canpotex also seeks a determination of MP’s s. 139 lien claim, the Court of Appeal’s judgment precludes that determination here.
[35] Canpotex characterizes the issues before me as follows:
A. Is there a material difference between the GTC and the negotiated GTC which you previously considered?
B. Which of the Defendants is entitled to all, or part, of the Funds paid into the U.S. Trust Account of Alexander Holburn Beaudin + Lang LLP in accordance with the Order of March 27, 2015?
C. The specific entitlement of each Defendant to receive part, or all of the Funds.
D. An Order for payment out in accordance with sub-paragraphs (B) and (C) above.
E. Upon payment out of the Funds in accordance with sub-paragraph (D) above, that any and all liability of the Plaintiffs and the Vessels to the Defendants in respect of the marine bunkers supplied to the Vessels on or about October 27, 2014, in Vancouver, British Columbia, is extinguished.
F. If OW UK is found to be contractually entitled to receive payment of its invoice, is MP entitled to a s. 139 MLA maritime lien?
[36] In my view, the reasons of the FCA are clear that the s 139 Maritime lien issue cannot be part of the interpleader relief that I can address in this re-hearing.
[37] This means, in my view, that I can do nothing more than consider the conflicting contractual claims to the Funds advanced by OW UK and MP. I must confine myself to the issue of “[w]ho, as between OW UK and Petrobulk, was contractually entitled to the Trust Funds under the contractual arrangements with Canpotex” (para 66, FCA Decision).
[38] MP says that the words in para 71 of the FCA Decision allow me to reconsider and decide the contractual issue and then decide the s 139 claim separately. I don’t think the FCA Decision can be read in this way. The s 139 claim lien cannot now be considered as part of the interpleader process ordered by Prothonotary Lafrenière – as he then was – and so falls outside of the scope of the interpleader proceedings that are before me.
VI. THE CONTRACTUAL CLAIMS – SCOPE
[39] There is further disagreement between the parties regarding the scope of my reconsideration of the contractual claims. Canpotex and MP are of the view that the FCA did not question or overturn many of my conclusions about the respective contractual obligations of the parties and that I must confine my reconsideration to the FCA’s finding that clause L.4 of OW’s GTCs is the relevant L.4 clause and not the L.4 found in Schedule 3.
[40] In written submissions, MP puts the matter before me as follows:
11. Importantly, in our submission, the FCA did not overturn your conclusions found at paragraphs 130-134 of your Reasons and Judgment regarding the terms under which the bunkers were supplied (i.e. the MP Standard Terms and Conditions), or the contractual consequences of the MP Standard Terms and Conditions as referenced in paragraphs 134-137 of your Reasons and Judgment (i.e. that Canpotex and OW have joint and several liability to Marine Petrobulk).
12. Many of your conclusions are not, in our submission, dependent upon any particular interpretation of clause L.4, although you do, from time to time, reference the impugned clause L.4. As you stated at paragraph 130-131:
[130] MP supplied the marine bunkers directly to the Vessels on MP’s Standard Terms and Conditions, as revised May 2013. This was made clear in the confirmations that MP provided to OW on October 22, 2014. Both of the confirmations are clear on this issue and specify as follows:
This sale is subject to Marine Petrobulk’s Standard Terms and Conditions, as revised May 2013, which is hereby incorporated in full in this Confirmation. The acceptance of this Confirmation and Marine Petrobulk’s Standard Terms and Conditions shall be deemed final unless objected to by Buyer within three business days of receipt of this Confirmation.
[131] The relevant MP Standard Terms and Conditions are set out in paragraph 121(c) above.
[132] The record before me shows that OW UK provided purchase order confirmations for the supply of bunkers to both Vessels. No objection was raised to the Standard Terms and Conditions, and no objection has [ever] been raised. So it is clear that OW UK understood and accepted that MP would supply the bunkers to the Vessels on MP’s Standard Terms and Conditions. It is also clear from Schedule 3 of the General Terms and Conditions between Canpotex and OW UK that Canpotex and OW UK understood and agreed that their contractual arrangements 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. Consequently, I conclude that both Canpotex and OW UK were bound by MP’s General Terms and Conditions for the supply of the marine bunkers to the Vessels that are the subject of this dispute.
[133] Given the clear import of the documentation between MP and OW UK, I cannot accept ING’s argument that OW UK contracted with MP on OW’s Standard Terms and Conditions.
[emphasis added]
13. You clearly found that Marine Petrobulk agreed to contract for the supply of bunkers on its standard terms and conditions, not OW’s terms and conditions. Fundamentally, the L4 provision is not determinative of that issue. Rather, Marine Petrobulk’s requirement to contract on their terms is determinative, particularly once those terms were accepted by OW as was the case
[41] ING, on the other hand, is of the view that I must consider all contractual issues de novo and should not rely upon my previous findings.
[42] It is my view that, had the FCA found fault with my contractual analysis on grounds other than my failure to apply the parol evidence rule and the application of the wrong L.4 clause, it would clearly have said so. If the FCA had accepted other aspects of ING’s contractual analysis, there would have been no need for the FCA to require me to reconsider the implications of applying the correct L.4 clause, and the FCA would simply have set aside my judgment entirely. I think that Justice Nadon’s reasons are precise about what the FCA wants me to reconsider. See paras 127-131 of the FCA Decision quoted above.
[43] It is also telling, I think, that the FCA clearly states one of my principal conclusions in para 41 of the FCA Decision and never questions this conclusion: “This led the Judge to conclude that Canpotex and OK 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.” Nor does the FCA list the additional contractual issues that ING raises again in this re-hearing as being issues that the FCA needed to address on appeal. See para 4 of the FCA Decision. Had the FCA thought that Canpotex was not bound by MP’s STCs then that would, effectively, have resolved the contractual issues between the parties and there would be no need for me to reconsider the meaning and implications of the L.4 clause found in OW UK’s GTCs.
VII. ARGUMENTS
A. Canpotex
(1) Contractual Issues
[44] Canpotex says that the only words in the applicable L.4 clause that could arguably make a difference to my previous contractual analysis are “which insists that the Buyer is also bound by its own terms and conditions” so that, pursuant to this wording, the Court must decide whether MP insisted that Canpotex was bound by the STCs.
[45] Canpotex refers the Court to the decision of Justice Haight in NCL (Bahamas) Ltd v OW Bunker USA Inc et al, 3:17-CV-01327 at pp 25-32 [NCL] for the proposition that “insists” is analogous to “request” or “demand” and that if there is any ambiguity in the words it must be construed in the manner most favourable to the buyer (which in the present case would be Canpotex) in accordance with the contra proferentem rule.
[46] Also in NCL, as in the present case, the physical supplier, EKO, and the OW Trading entity involved in that case had knowledge of the physical supplier’s terms and conditions from their history of prior dealings. In the words of Justice Haight:
8. I conclude that O.W. Malta, as Buyer of the NORWEGIAN SPIRIT’S bunkers under its contract with EKO, knew of and agreed to be bound by EKO’S standard terms and conditions, including law and forum selection provisions different from those contained in the OWB T&Cs. O.W. Malta purchased these bunkers from EKO in order to perform O.W. Malta’s contract to sell the same amount of bunkers to O.W. USA, which had forged the first link in the chain by contracting to sell that amount of bunkers to NCL, so that the NORWEGIAN SPIRIT might be refueled in Piraeus on October 18, 2014. Nothing in these additional contracts amended EKO’s standard terms and conditions or erased O.W. Malta’s knowledge of and agreement to the EKO T&Cs. Given this chain of contracts, O.W. USA as Buyer rom O.W. Malta, and NCL as Buyer from O.W. USA, impliedly knew of and agreed to the EKO terms and conditions. That is sufficient to satisfy the preconditions in the contract in suit to the application of Article L4.
[47] In the present case, Canpotex points out that the STCs clearly incorporate the laws of Canada and British Columbia by way of clause L.4(b)(ii) of the STCs and the evidence shows that OW UK was well aware of MP’s STCs for Sale and Delivery of Marine Fuels used by MP because of 49 previous Sales Oder Confirmations which Canpotex received from OW UK, between January 10, 2014 and September 30, 2014 in respect of bunkers ordered by Canpotex from OW UK which were supplied by MP. See Affidavit of Keith J. Ball, Director, Ocean Transportation of Canpotex Shipping Services Limited sworn July 26, 2018. Mr. Ball swears to “50” additional Sales Order Confirmations, but counsel for Canpotex confirmed in oral argument that one of them involved other parties and was not relevant to these motions. This evidence was not disputed by the other parties.
[48] Canpotex also points out that my previous reasons make clear (paras 132-134) that “As MP’s Standard Terms and Conditions make clear, ‘Customers’ are bound and the agreement ‘will prevail notwithstanding any variance with the terms and conditions of any acknowledgement or other document submitted by the Customer’,” I also found (at para 134) that “Customer” in the present case includes Canpotex as either “a “charterer” or a “party benefitting from consuming the Marine Fuel”.” I also found (at para 134) that the STCs were never “added to, modified, superseded or otherwise altered in any way either by OW UK or Canpotex….”
[49] So Canpotex takes the position that the “insistence” required to satisfy the applicable L.4 provision originated in the contract between MP and OW UK as contained in MP’s STCs and continued thereafter. Canpotex also says that consistent with this is the fact that, since the initial demand letter of December 22, 2014 from MP’s solicitor, MP has continually insisted that its STCs are the applicable contractual terms and that they bind Canpotex. See Affidavit of K. Ball (#1), Exhibit H.
[50] Canpotex also takes the position that the doctrine of privity of contract (relied upon heavily by OW UK) cannot be invoked to defeat the clear intentions of all three parties involved:
37. This is not a situation in which a third party beneficiary (MP) is attempting to take the benefit of a contract to which it is not privy. In the negotiated GTCs, Canpotex and CW UK agreed to be bound by the terms and conditions of the physical supplier MP. In the CW UK/MP contract, it was agreed that the charterer of the vessel (Canpotex) would be bound by the MP terms and conditions. There is a clear consensus ad idem between the three parties on this point. it would be inappropriate to apply the concept of privity of contract, which is intended to carry out the intentions of the contracting parties, to frustrate those concurrent intentions.
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43. It has been held that when the wording of a contract is unambiguous, the courts should not give, it a meaning different from that which is expressed by its clear terms, unless the contract is unreasonable or has an effect contrary to the intentions of the parties. In the instance at bar, clause L.4 of the negotiated GTC clearly contemplates incorporating the terms and conditions of the physical supplier. The intention of clause L4 is clear, particularly when considering paragraphs (b) and (c), that make it clear that the rights and liabilities as between the three parties shall be identical and shall be decided in the same forum based upon the same law. This provision is unambiguous, and as you decided previously, must be given effect under the circumstances.
[References omitted.]
(2) Section 139 Claim
[51] Notwithstanding the FCA’s findings on this issue, Canpotex continues to argue before me that if OW UK (and hence ING) is found to be contractually entitled to receive payment of its invoice for the full amount, then I should deal with the s 139 maritime lien issue as part of these interpleader proceedings and extinguish MP’s s 139 claim:
62. In Canada, as you noted in your previous judgment, it is an open question whether in order to have an enforceable claim under s.139 of the MLA, the physical supplier must have contracted with the owner. It would achieve the intended result of putting a Canadian bunkers supplier on equal footing with a US counterpart if this Court held that a condition precedent for a s.139 maritime lien was that the supplier contracted directly with the owner, charterer or agent of those parties.
63. It is important to understand the practical effect of the decision of the FCA differing with the appellate decisions in the US and holding that a s.139 maritime lien claim cannot be dealt with in an interpleader proceeding. An example is the “Elliott Bay” case referred to in affidavit #4 of Mr. Ball where the fuel was supplied to a Canpotex chartered ship in Colombia, and Canpotex has been faced with an in rem claim and arrest, and being required to provide security in Chile to the physical supplier, and later an arrest in Italy and requiring posting of duplicate security in a claim brought by ING, as well as an in personam arbitration in London by ING. A decision that encourages such duplication of proceedings, with the attendant wasted legal costs and judicial or arbitral time creates a serious injustice and should be avoided. It is respectfully submitted that as the debts arise from the same supply to suggest that the procedural difference of in rem proceedings makes the maritime lien claim a different claim is to elevate form over substance.
64. Therefore, if this Court should hold on the interpleader issue that if OW UK, not MP, is contractually entitled to payment, then the s.139 maritime lien claim of MP should be dismissed.
[References omitted]
B. MP
(1) Contractual Issues
[52] MP says that the only issue before me for reconsideration is whether there is any material difference between the L.4 clause I relied upon in my First Decision and the L.4 clause that the FCA decided was applicable to the present situation.
[53] MP says it is important to note that the FCA did not overturn my conclusions regarding the terms under which the bunkers were supplied (i.e. the MP STCs), or the contractual consequences of MP’s STCs as referenced in paras 134-137 of my First Decision (i.e. that Canpotex and OW UK have joint and several liability to MP).
[54] MP points out that many of my previous conclusions are not dependant upon any particular interpretation of clause L.4 and, most importantly, I clearly found that MP agreed to contract for the supply of bunkers on MP’s STCs and not on OW UK’s GTCs. The L.4 issue is not determinative of this issue.
[55] For the most part, MP agrees and adopts Canpotex’s submissions on the L.4 issue. In addition, however, MP makes the following points:
16. In addition to the foregoing, it is important to review the circumstances that resulted in the supply of bunkers to two foreign flagged vessels in the port of Vancouver. As set out in our original submissions:
6. On October 22, 2014, Marine Petrobulk was contacted by Giorgia of O.W. Bunkers, apparently on behalf of OW UK, requesting whether Marine Petrobulk Ltd. could provide marine bunkers to two vessels, the M/V “Ken Star” (IMO # 9619593) and MN “Star Jing” (IMO # 9644823) (collectively the “Vessels”) both scheduled to be in the port of Vancouver in late October 2014.
7. In response, Marine Petrobulk replied to Giorgia at O.W. Bunkers the same day confirming details of the planned bunker stem including quantities and pricing. Both confirmations expressly referenced that the sale is subject to Marine Petrobulk’s Standard Terms and Conditions, as revised May 2013 (the “Standard Terms”). Specifically each confirmation provided expressly as follows:
This sale is subject to Marine Petrobulk’s Standard Terms and Conditions, as revised May 2013, which is hereby incorporated in full in this Confirmation. The acceptance of this Confirmation and Marine Petrobulk’s Standard Terms and Conditions shall be deemed final unless objected to by Buyer within three business days of receipt of this Confirmation.
…
9. Purchase order confirmations were provided by OW UK confirming acceptance of the planned bunker stern for both the Vessels. The Purchase order confirmations make no objection to the Standard Terms as referenced in the Confirmation quoted above.
10. Indeed, no objection of any sort to the application of the Standard Terms was ever provided by or on behalf of the OW group