In an interesting case involving the law applicable to Crown ships, the plaintiff Society obtained possession of a decommissioned Canadian Navy vessel under an agreement with the Department of National Defence (DND), intending to use the old ship as a museum. When that plan failed, the vessel was returned to the Crown, which nevertheless agreed to give the Society a chance to present an alternate plan should a decision be made to dispose of the ship. When the Crown later proposed disposing of the ship, the Society responded by proposing to send the vessel to the Caribbean, where it could be sunk and used as an artificial reef. The Crown, however, was not prepared to expend the estimated $5 to $6 million needed to ready the vessel for "ocean disposal". Grenada was prepared to use the ship as an artificial reef but not to pay for its transportation to that country. The Society, for its part, had no plan to finance the towage. DND therefore contracted to have the ship moved to Ontario and broken up. The Society responded by instituting an action in rem in Federal Court in Halifax and causing the vessel to be arrested there two days before her scheduled departure for Ontario.
In quashing the warrant of arrest, the court held that section 14 of the Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50 (CLPA) precludes actions in rem against Crown property, as well as the arrest, detention or sale of any Crown ship, and prohibits liens in respect of any such vessel. Instead, it was well-settled that maritime claims against the Crown relating to Crown ships must be pursued solely by way of damages. The court also noted that 43(7) of the Federal Courts Act, R.S.C. 1985, c. F-7, also prohibits in rem actions against warships, coast-guard ships, police vessels and any ships operated by Canada or a province engaged in government service, as well as ships owned or operated by foreign States for non-commercial government purposes. Although subsection 43(7) does not expressly deal with a Crown-owned ship that is not engaged in government service, the court held that this gap does not override the immunity bestowed by section 14 of the CLPA.
Accordingly, the court concluded that there was no authority to arrest this Crown ship, whether or not the vessel was actively engaged in government service or decommissioned awaiting disposal.
The Court agreed that preserving the vessel (described as a "Cadillac of the Cold War") in connection with the 100th anniversary of the Royal Canadian Navy, was important. Accordingly, the Court suggested that the ship be preserved for the 12-day transfer period to Lake Erie, which the Defendant accepted, in order to give the Plaintiff time to prepare a new motion for the preservation of the property.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
