Digests

Canadian Imperial Bank of Commerce v. Le Chene No. 1 (The)

T-194-97

2003 FCT 292, Lafrenière P.

10/3/03

10 pp.

Motion involving competing claims by plaintiff, Canadian Imperial Bank of Commerce (CIBC), based on mortgages on defendant ships, and by Chief Engineer Donald MacKenzie (MacKenzie) upon proceeds of sale of vessels Le Chêne No. 1, L'Orme No. 1 and Le Saule No. 1 (defendant ships)-- Whether MacKenzie's claims for severance pay or damages for wrongful dismissal (severance pay) giving rise to maritime lien, thus taking precedence over CIBC's security--Central to dispute: nature of underlying contractual relationship between employer and MacKenzie--Two preliminary matters: MacKenzie's claim for unpaid bonuses; right to claim damages for wrongful dismissal--First, regarding claim for annual bonuses, fact employees did not grieve employer's failure to pay bonuses over years suggesting employees recognized such payments entirely discretionary--As MacKenzie's entitlement to bonuses under contract of employment, or otherwise, not established, that portion of claim not allowed--Second, regarding damages for wrongful dismissal, ability of terminated employee seeking damages for wrongful dismissal from bankrupt employer directly related to manner in which employer assigned in bankruptcy--If assignment occurred on petition of creditor, employee's right to damages may not exist--However, if assignment made voluntarily, in sense that employer's choice to trigger bankruptcy, employer effectively terminates employment-- Based on evidence, MacKenzie's employment relationship terminated as result of act of employer--Since termination without cause and without notice, MacKenzie entitled to damages for wrongful dismissal--As to principal issue, maritime lien arising by operation of law in respect of limited number of claims under Canadian maritime law, including claims for seamen's wages or remuneration--Maritime lien for wages has expanded to embrace any form of emolument properly as wages--Severance pay, including damages for wrongful dismissal, eligible for inclusion in maritime wages lien--Seaman must show relationship between severance pay and particular ship in respect of which lien claimed--Need for wages to be referable to ship go to very essence of maritime lien--Lien over ship only because wages in question relate to ship--Particular employment contract giving rise to right to compensation claimed must be carefully considered--To extend maritime lien to severance pay stemming from "company service agreement" however, as opposed to specific maritime lien property, would be contrary to rationale for lien: The "Tacoma City", [1997] 1 Lloyd's Rep. 330 (C.A.)--If true source of severance pay not contract specific to ship, but company service agreement, required link between severance pay and ship lacking--Circumstances giving rise to claim for compensation herein stemmed from company service agreement, not any agreement specific to defendant ships-- Court unable to conclude claim for severance pay or damages referable to services provided on defendant ships--Claimed wages in lieu of notice or damages for wrongful dismissal give no lien upon defendant ships, save and except for vacation pay and personal expenses, as conceded by CIBC-- Motion allowed in part--Balance of monies paid into Court, plus interest, to be paid to CIBC.