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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.
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