MARITIME LAW |
Liens and Mortgages |
Finansbanken ASA v. GTS Katie (The)
T-2009-00
2002 FCT 73, Morneau P.
22/1/02
13 pp.
Whether claim by supplier of necessaries in maritime law has priority in proceeds of sale of ship over two mortgagees-- Based on verbal agreement supplier Clipper Inc. asked Court to have diverted from proceeds of sale of ship GTS Katie value corresponding to property on ship which latter's owner Third Ocean transferred to it outright--Third Ocean transferred property on ship to Clipper Inc. on August 10, 2000--At time of transfer of ownership of property on ship latter subject to two registered mortgages--According to Bank and Lloyd only "ship's plans, manuals and drawings", or collectively "documents", had some value, though intrinsic, while ship's other property worth at most $3,307.20--Dispute between parties as to whether documents subject to mortgage held by Bank and covered by word "appurtenances" as used in mortgage--Word should not be given limiting sense--Documents essential to proper operation of ship and formed part of it--In this sense documents included in word "appurtenances" as used in mortgage--Ship's property, and in particular documents, subject to mortgage--Question then whether, as Clipper maintained, Bank consented verbally with full knowledge of facts to Third Ocean making transfer of ship's property--Hearsay evidence not sufficient to establish Bank agreed to such transfer--Clipper Inc. did not enjoy valid right of ownership over ship's property which could be set up against Bank and Lloyd, enabling it to obtain declaration deducting sum of US $50,000 by priority in its favour from proceeds of sale of ship--Clipper's arguments regarding claim to protection, priority or diversion, enabling it to be paid in priority over Bank and Lloyd, dismissed with costs.