Amican Navigation Inc. v. Densan Shipping Co.
T-1357-97
Lutfy J.
21/10/97
12 pp.
Security-Appeal from prothonotary's orders as to amount of bail and production of supplementary affidavit-Main action for damages in amount of $590,000 ($336,954 for loss of profit as result of its inability to execute cargo shipment from Eilat; $138,920 for toll fees incurred to transit Suez Canal during redelivery of ship; hire statement balance of $114,387 owing by defendant owner) for breach of parties' charter party agreement-Defendant's ship Necat A arrested and released upon payment of $605,000 bail-Upon defendant's motion, prothonotary set aside bail corresponding to two of plaintiff's claims (loss of profits and Suez Canal toll charges), reducing bail to $124,387, including additional security of $10,000 for legal costs-Arrest: plaintiff must show arrest requested necessary for protection of its rights and lawfully carried out-On application to set aside arrest with no provision for bail, defendant must show statement of claim disclosing no reasonable cause of action, or frivolous, or vexatious within meaning of R. 419-In Canada, determination of bail has generally followed English decision in Moschanthy (The), [1971] 1 Lloyd's Rep. 37 (Adm.): plaintiff entitled to sufficient security to cover amount of his claim with interest and costs on basis of his reasonably arguable best case; also, Court cannot try case in interlocutory proceedings such as those pertaining to security-Not plain and obvious or beyond doubt plaintiff has no case to assert in law with respect to claim for loss of profit-Speculative calculations, attractive as they might be at first glance, not sufficient-Wrong for prothonotary to reduce to zero security for claim for loss of profits unless he concluded plaintiff's reasonably arguable best case, was, in effect, no case at all-Claim for Suez Canal toll charges: plaintiff having right to claim over toll charges against defendant-On face of record, defendant has established reasonably arguable case even with invoice remaining unpaid as yet-No justification to have reduced, particularly not to zero, security for this portion of claim-In reducing to zero security for claims for loss of profit and Suez Canal charges, prothonotary implied arrest was unlawful and security unnecessary-His conclusions do not reflect proper application of reasonably arguable best case set out in The Moschanthy-Prothonotary erred in that he exercised his discretion upon wrong principle within meaning of Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425 (C.A.)-Prothonotary's discretion ought now to be exercised by reviewing judge-Plaintiff's claim for loss of profit representing 60% of its projected revenues from shipment-Bail reduced by half in this respect; amount of security, representing profit of almost 30% of revenues, sufficient to protect rights of plaintiff-Otherwise, security remaining same-Bail set at $436,784-Federal Court Rules, C.R.C., c. 663, R. 419.