Federal Court Grants Judicial Sale of Deteriorating Vessel

Date: 20260402 Docket: T-879-21 Citation: 2026 FC 432 Ottawa, Ontario, April 2, 2026 PRESENT: The Honourable Mr. Justice Southcott ADMIRALTY ACTION IN REM AGAINST THE SHIP “KINDNESS” , THE SHIP “MYSTIQUE V” AKA THE “[NAME]” AND IN PERSONAM BETWEEN: [NAME] Plaintiff and [NAME], [COMPANY], THE OWNERS AND ALL OTHERS INTERESTED IN THE SHIP “MYSTIQUE V” AKA THE “[NAME]” , THE OWNERS AND ALL OTHERS INTERESTED IN THE SHIP “KINDNESS” , THE SHIP “MYSTIQUE V” AKA THE “[NAME]” ( “MYSTIQUE V” ), AND THE SHIP “[NAME]” ( “[NAME]” ) Defendants

REASONS FOR

ORDER I. Overview [ 1 ] This decision addresses a motion brought by [NAME], Global Federal Credit Union [[NAME]], by Motion Record filed on February 13, 2026, in writing under Rule 369 of the Federal Courts Rules , SOR 98/-106, [Rules], seeking an Order: (a) permitting the judicial sale of the Defendant Vessel “[NAME]” [the Vessel], pursuant to Rules 490 to 492; (b) granting [NAME] the status of [NAME]’s expenses for all expenses incurred by [NAME] that are required to bring the Vessel to sale; and (c) staying all other Federal Court proceedings relating to the Vessel, pursuant to section 50 of the Federal Courts Act , RSC 1985, c F-7 [the Act]. [ 2 ] As explained in greater detail below, the Court is prepared to grant the relief sought by [NAME], materially in the form of its proposed Order and related Commission of Sale, although with modifications to a paragraph of [NAME]’s proposed Order that addresses the status to be afforded to expenses incurred in connection with the sale of the Vessel. While my Order will be issued as a document separate from these Reasons, so as not to encumber the Order with the added length, these Reasons explain the basis for the Court’s decision to issue the Order.

II. Background [ 3 ] [NAME] is a not-for-profit credit union, with its main office in Anchorage, Alaska, United States of America [USA], and asserts that it is the mortgagee of the Vessel. CFCU is a Caveator in the within action, in which the Vessel is an in rem Defendant. [ 4 ] The Vessel is described as a recreational vessel of 112 gross tons, built in 2005 and registered in the USA. The other Defendants include [COMPANY] [[NAME]], described as a limited liability company incorporated under the laws of Florida, USA, and the owner of the Vessel; [NAME], who GCFU asserts has held himself out to be a manager/member of [NAME] with the authority to contract on behalf of [NAME] and the Vessel; and [COMPANY] [[NAME]], another company incorporated under the laws of Florida, USA, in which [NAME] may have an interest. While there are other in rem Defendants named in this action, they are not material to the present motion. [ 5 ] The Plaintiff, [NAME], initiated this action by Statement of Claim filed on May 31, 2021, which describes Ms. [NAME] as a businesswoman with an address on Bowen Island, British Columbia. The Plaintiff asserted a claim against the Defendants for labour, goods, materials and services provided to the Defendant vessel and a claim for a declaration that the Defendants held the Vessel (and another of the in rem Defendants) in a constructive trust for her. A Warrant for the arrest of the Vessel was issued on May 30, 2021, and it was arrested on May 31, 2021, where it lay on land on the north bank of the Fraser River in Richmond, British Columbia. On June 30, 2021, a Statement of Defence was filed on behalf of the Defendants (other than [NAME]). [ 6 ] This action proceeded to trial before Justice Pamel over six days in May and October 2024. On December 17, 2024, Justice Pamel issued his decision in [NAME] v [NAME] , 2024 FC 2048, which granted judgment in the Plaintiff’s favour in the amount of $4032.11 (with $1330.68 being allocated to the Vessel and $2701.43 being allocated to another in rem Defendant), related to expenses, equipment and material that the Plaintiff purchased for the benefit of the in rem Defendants, but dismissed the Plaintiff’s claim for a declaration of constructive trust. [ 7 ] The Plaintiff has not subsequently moved to have the Vessel sold, and it remains under arrest at a [COMPANY] and repair facility operated by [COMPANY]. [[NAME]] on property owned by [COMPANY]. [[NAME]] in Richmond, British Columbia. [NAME] has filed a Caveat Release against the Vessel, as has [NAME] and another company named [COMPANY]. [Osborn]. [ 8 ] Asserting that the Vessel is deteriorating in condition and value, [NAME] has filed this motion to initiate a process for judicial sale of the Vessel. In this motion, [NAME] claims that on or about August 10, 2023, [NAME] executed a promissory note in favour of [NAME] in connection with a loan of USD $600,000.00, with interest accruing at a rate of 7.99% per annum, and granted [NAME] a mortgage over the Vessel as security for that indebtedness. [NAME] also claims that [NAME] negotiated this financing on behalf of [NAME] and personally guaranteed [NAME]’s indebtedness under the promissory note and the mortgage. [NAME] also asserts malfeasance on the part of [NAME], alleging that during the negotiation of the financing [NAME] failed to disclose the fact that the Vessel was under arrest and furnished a falsified survey report related to the Vessel. [ 9 ] [NAME] claims that, between September 2023 and October 2024, [NAME] or [NAME] made monthly payments to [NAME] but that, despite several written demands, no further payments have been made. [NAME] asserts that on June 19, 2025, its counsel sent a demand letter to then counsel for the Defendants (copied to the other Caveators), demanding payment of the outstanding mortgage arrears alleged to be owing by [NAME] and [NAME], then in the amount of USD $609,621.43. In its motion materials, [NAME] further asserts that, as of the filing of the motion on February 13, 2026, the total owing was USD $645,873.98 inclusive of principal, interest and costs, with interest continuing to accrue at the per diem rate of USD $125.56. [ 10 ] As previously noted, [NAME]’s motion seeks an Order granting three categories of relief: (a) permitting the judicial sale of the Vessel; (b) granting [NAME] the status of [NAME]’s expenses for all expenses incurred by [NAME] that are required to bring the Vessel to sale; and (c) staying all other Federal Court proceedings relating to the Vessel. In connection with the requested stay, [NAME] identifies in particular Court files T-592-26 ( [COMPANY] et al ); T-2977-25 ( [COMPANY] et al ); 25-T-112 ( [COMPANY] et al ); T-3225-24 ( [COMPANY] v “[NAME]” et al ); and T-106-24 ( [COMPANY] v “[NAME]” et al ) [together, the Other Proceedings]. [ 11 ] [NAME]’s Motion Record includes the following evidence upon which it relies in support of its requested relief: Affidavit affirmed on February 12, 2025, by [NAME], who is the Executive Director, Business and Commercial Services, of [NAME]. Mr. [NAME] provides evidence as to the negotiations leading to [NAME]’s financing of the Vessel, including attaching copies of relevant loan and mortgage documentation, and the amounts advanced and owing, as well as the alleged malfeasance by [NAME]. [NAME]’s affidavit also attaches a copy of a 2025 survey report prepared by [NAME], a marine surveyor, assessing the Vessel to be in restorable condition and assigning it a value of USD $699,000 [the 2025 Survey Report]; Affidavit affirmed on February 11, 2026, by [NAME], intended to support [NAME]’s allegation that, in connection with the financing of the Vessel, [NAME] falsified a 2023 survey report as having been prepared by [NAME]; and Affidavit affirmed on February 13, 2026, by [NAME], a Legal Assistant in the offices of [NAME]’s counsel, which references steps in this litigation and attaches copies of pleadings and correspondence between counsel. Ms. [NAME] also describes efforts to identify brokers to assist with the judicial sale of the Vessel and attaches related correspondence, including identifying the willingness of [NAME] Ltd. [[NAME]] to perform such services. [ 12 ] The process and deadlines for filings by [NAME] and responding parties in this motion, to be adjudicated in writing under Rules 369, were established in an Order issued on January 13, 2026, by Case Management Judge Ring. In addition to [NAME]’s Motion Record, the record before the Court in this motion includes the following: Motion Record dated March 2, 2026, described as filed on behalf of the responding Defendants other than [NAME] and [NAME] [the [NAME]]; Motion Record dated March 2, 2026, filed on behalf of [NAME]; Motion Record dated March 2, 2026, which references both [NAME] and [NAME] as respondents [[NAME]]; and Reply written representations filed on behalf of [NAME] on March 9, 2026. [ 13 ] The [NAME] consent to the requested judicial sale of the Vessel pursuant to Rule 490 (including the form of Order proposed by [NAME]), agreeing with [NAME]’s position that the sale is in the best interest of all parties, given the prolonged arrest of the Vessel since May 31, 2021, and the need to realize value for the benefit of all interested parties and creditors. The [NAME] take no position on [NAME]’s request for a stay of other proceedings involving the Vessel and take no position on the classification of [NAME]’s legal fees or survey costs as [NAME]’s expenses or on the quantum of such costs, stating that these matters may be determined in a subsequent adjudication of priorities following the Vessel’s sale. [ 14 ] [NAME] also agrees with [NAME]’s position that the sale of the Vessel is necessary at this stage in the litigation, and it supports [NAME]’s position that a stay is necessary to ensure an orderly resolution of all claims to the Vessel, to protect the priority of all claims, and to avoid unnecessary costs. However, [NAME] asks that [NAME]’s proposed form of Order be amended to recognize as [NAME]’s costs the preservation costs that [NAME] says it has incurred and will continue to incur to preserve the Vessel for the benefit of all interested parties. [ 15 ] [NAME]’s Motion Record includes an Affidavit sworn on February 2, 2026, by its President, [NAME]. He describes the Vessel having entered [NAME]’s [COMPANY] on March 2, 2021, for the purpose of certain repairs and maintenance, and states that the Vessel was arrested “while on the hard” in [NAME]’s property on or about May 31, 2021, where it has remained since that date. [NAME] asserts that [NAME] has performed various modifications to the vessel that have compromised its integrity, such that it cannot be safely returned to the water without further work, precluding its removal from the [COMPANY]. [ 16 ] [NAME] further asserts that, from the date of the Vessel’s arrest to present, [NAME] has incurred significant expenses with respect to the preservation of the Vessel and the supply of electricity to it [[NAME]]. He notes that [NAME] operates on [NAME] property, pursuant to which arrangement [NAME] is invoiced and obliged to pay [NAME] monthly for vessels on that property, including being required to pay electricity charges for a Vessel even if no electricity is used. Supported by documentation attached as exhibits, [NAME] states that [NAME] invoices [NAME] for [NAME] and that [NAME] has made payments toward same, but that the current balance owing is $146,263.02, exclusive of costs of repair work to the Vessel performed by [NAME] and accrued interest. [ 17 ] [NAME] also asserts that [NAME] did not become aware of the claim of [NAME] until on or about June 4, 2025, when it was served with [NAME]’s Caveat Release. [ 18 ] [NAME] also do not in principle oppose a judicial sale of the Vessel, if the Court determines that sale is appropriate under Rule 490. However, they oppose aspects of the relief sought by [NAME], arguing that [NAME]’s motion improperly seeks to: (a) expand the scope of Rule 490; (b) secure priority findings in advance of a priority hearing; (c) elevate survey fees and legal costs to the status of [NAME]’s expenses; (d) impose a broad stay of unrelated proceedings (although [NAME] acknowledge that a stay limited to procedural steps necessary to achieve sale of the Vessel may be appropriate); and (e) obtain findings concerning alleged fraud, mortgage validity, or quantum of indebtedness, which are irrelevant to the Rule 490 motion. [ 19 ] [NAME]’ motion record includes an Affidavit sworn by [NAME] on March 2, 2026, in support of the above positions. [NAME] also refers to having obtained an arbitration award confirming unpaid wages that he is owed and that he advanced, for which he asserts maritime lien status, and to having paid in excess of $150,000.00 toward storage and preservation of the Vessel. [NAME] also disputes [NAME]’s entitlement to its claim for unpaid storage fees. [ 20 ] Neither the Plaintiff nor Osborne has filed a response to [NAME]’s motion. [ 21 ] On March 20, 2026, the Court issued a Direction to the parties, seeking additional information on the mechanics of sale intended to be reflected in the proposed form of Order included in [NAME]’s motion materials. On March 27, 2026, having consulted with the other parties, [NAME]’s counsel provided a joint response to this Direction [the [NAME]], including furnishing a revised version of the proposed Order capturing that response.

III. Issues [ 22 ] This motion raises the following issues for the Court’s determination: A. Should the Court issue an Order for sale of the Vessel under Rule 490 and, if so, on what terms? B. If the Court issues an Order for sale of the Vessel, what determinations, if any, should be made at this stage of the sale process with respect to [NAME]’s expenses? C. Should the Court order a stay of all other Federal Court proceedings relating to the Vessel? IV. Analysis A. Should the Court issue an Order for sale of the Vessel under Rule 490 and, if so, on what terms? [ 23 ] Rule 490 provides that, on motion, the Court may order the sale of property under arrest, by public auction or private contract, with or without appraisal as to its value, and through various methods of identifying a purchaser. [ 24 ] As explained in [COMPANY] v [COMPANY] , 2014 FC 655 at paragraph 34, the only formal requirement for the exercise of the power of sale under Rule 490 is that the property to be sold be under arrest. That requirement is met that in the case at hand, as the Vessel remains under the arrest of the Plaintiff in the within action. [ 25 ] [NAME] refers the Court to the explanation in Canada ([NAME]) v Cormorant (Ship) , 2019 FC 977 [ Cormorant ] at paragraph 20 that, in deciding whether to exercise its power to order the sale of a vessel before judgment (described as a sale pendent lite ), relevant elements to be considered by the Court include: The value of the vessel compared with the amount of the claim; Whether there is an arguable defence; Whether the owner can carry on or whether it reasonable to assume that there must be a sale of the vessel at some point; Whether there will be any diminution in the value of the vessel or of the sale price by the delay, including the cost of keeping crew aboard the vessel, the cost of maintaining the vessel and the cost of insuring the vessel; Whether the vessel will depreciate by further delay; and Whether there is any good reason for a sale before trial. [ 26 ] Cormorant also explains that these elements do not represent a mechanical test, but rather are intended to assist the Court in balancing the competing considerations of the interests of the creditors in preserving the value of the vessel and the ownership interest of the owners (at para 21). [ 27 ] While the Plaintiff has already obtained a Judgment against the Vessel, this motion might nevertheless be characterized as a motion for sale pendent lite , as the moving party ([NAME]) does not have the benefit of a judgment on its mortgage claim against the Vessel. In any event, I am satisfied that the Court should be guided by the elements articulated above. [ 28 ] As previously noted, the Vessel was assessed in 2025 as having a value of USD $699,000. The claims against the Vessel evident from the record before the Court include [NAME]’s mortgage claim, which [NAME]’s Affidavit quantifies at USD $645,873.98 plus interest that continues to accrue; [NAME]’s claim, which [NAME]’ Affidavit quantifies as exceeding $146,263.02; [NAME]’s claim, which his Affidavit quantifies as exceeding $150,000 for storage and preservation, plus a claim for master’s wages and the advance of crew wages; and, the Plaintiff’s judgment for $4032.11. As such, the volume of claims against the Vessel exceeds its value based on the assessment before the Court. [ 29 ] As for whether the owners of the Vessel have an arguable defence to [NAME]’s mortgage claim (or, for that matter, to any of the other claims) and whether it is reasonable to assume that there must be a sale of the Vessel at some point, all parties that have responded to [NAME]’s motion either consent to or do not oppose [NAME]’s request for an Order for sale of the Vessel. This includes the [NAME] and [NAME] (which, together, I understand represent all parties with an ownership interest in the Vessel). The evidence and submissions of all responding parties also reference the Vessel’s ongoing deterioration. [ 30 ] As such, it is evident that there is a good reason for sale of the Vessel at this stage in this proceeding, and I am prepared to issue an Order to initiate that process. [ 31 ] As for the terms of such an Order, [NAME]’s motion includes a proposed form, to which the [NAME] consent. [NAME] also appears to approve of [NAME]’s proposed form of Order, other than seeking an amendment to afford [NAME]’s expense status to the [NAME] and ongoing expenses of the same nature. [NAME] oppose aspects of the relief sought in this motion, they have not identified concerns with the proposed sale terms. [ 32 ] I will address shortly, under the remaining issues in this motion, the points on which [NAME] and [NAME] seek to amend or oppose aspects of the relief claimed by [NAME]. Subject to considering the elements of [NAME]’s proposed form of Order that are directed at those points, I agree that, with the benefit of non-material adjustments, its terms (in the version provided with the [NAME]) including the Commission of Sale attached as a schedule to the Order represent an appropriate process for seeking a sale for the Vessel and completing that sale. That process will employ the services of [NAME] as an acting Sheriff, with the proceeds of sale to be held in the trust account of [NAME]’s legal counsel (and deemed to be funds held in Court), pending further motion to, and Order by, the Court adjudicating priorities and distributing the proceeds. As reflected in the Order, the completion of any sale identified through this process will be subject to prior approval of the Court. B. If the Court issues an Order for sale of the Vessel, what determinations, if any, should be made at this stage of the sale process with respect to [NAME]’s expenses? [ 33 ] [NAME]’s form of Order provides for the treatment as [NAME]’s expenses, costs of sale, or Sheriff’s costs (terms which I interpret to be interchangeable) various categories of fees and costs that may be incurred by [NAME] as acting Sheriff of this Court in achieving the sale of the Vessel. The principal provisions to this effect are found in paragraphs 3, 6 and 11 of the draft Order. However, [NAME] submits that the Court should also afford such status to expenses it has incurred and will incur in bringing the Vessel to sale, including without limitation the cost of the 2025 Survey Report, [NAME]’s legal fees and disbursements (on a solicitor-client basis) in connection with this action and the sale of the vessel including its Caveat Release and this motion, and Sheriff’s fees for the sale of the vessel. [ 34 ] The disagreement among some of the parties on this issue focuses in part upon paragraph 11 of the proposed form of Order, which provides as follows:

11. All reasonable expenses of advertisement of the sale, agency fees and all other costs, disbursements, commissions and other expenses such as reproduction of plans, photographs, courier services, and survey fees, necessary or inherent to giving effect to this Order and the commission of sale, shall be treated as Sheriffs costs, who, upon notice to the other parties identified herein, shall be paid out to them or as they may direct out of the proceeds of sale in priority to all other claims. Any party shall have seven (7) days from receipt of notice of such fees to deliver written objection thereto, failing which the fees shall be deemed approved. For greater certainty, pre-sale maintenance of the vessel, including insurance, officer and crew wages, benefits, and repatriation, as well as berthage, remain the responsibility of, and shall be paid for by the [NAME]. [ 35 ] [NAME] takes particular issue with the final sentence of this paragraph, which it submits is inconsistent with precedent and was included by [NAME] in an effort to preclude the [NAME] from being afforded the status of [NAME]’s expenses. [NAME] submits that it is standard practice in this Court for a sale order to recognize as [NAME]’s expenses costs incurred prior to sale in relation to berthage, security, preservation, safekeeping, and maintenance of a vessel. [NAME] proposes that paragraph 11 be revised to expressly provide that costs related to the preservation, safekeeping or maintenance of the Vessel, incurred by the Sheriff and/or funded on behalf of the [NAME] and [NAME], from the date of the Vessel’s arrest, be treated as [NAME]’s expenses. [ 36 ] In the alternative, [NAME] submits that, if the Court is not prepared to recognize as Sheriff’s costs the [NAME] incurred to date, the sale Order should at least afford such status to such expenses from the date of the sale Order forward and preserve [NAME]’s right to assert at a subsequent priorities hearing a claim that the [NAME] incurred to date be recognized as akin to [NAME]’s expenses. [ 37 ] As previously noted, [NAME] dispute [NAME]’s claim and, more generally, argue that the purpose of a Rule 490 motion is to achieve the preservation of value through the sale of the res , not to determine either the validity of claims or their priorities. [NAME] submit that the status of [NAME]’s expenses should be confined to Court-directed arrest expenses, Sheriff’s statutory fees, and necessary preservation expenses authorized while a vessel is in custodia legis . [NAME] therefore oppose [NAME]’s efforts to achieve such status for any components of its claim, as well as [NAME]’s effort to afford such status to its litigation costs. [ 38 ] In its reply written submissions, [NAME] disputes [NAME]’s position that the [NAME] were incurred for the benefit of all creditors. [NAME] takes the position that creditors have not benefited from these expenses, which relate to passive storage and power supplied to the Vessel in the past. [NAME] cites authorities in support of its position and further argues that elements of [NAME]’s claim may be time-barred. [ 39 ] As a general principle, [NAME] are correct that the Court’s role at this stage in the vessel sale process is to endorse a process for the efficient and cost-effective sale of the res , with the adjudication of liability, quantification, and priorities of competing claims to be addressed at a later stage of the litigation. The exception to this principle is that it is standard practice for the order initiating the process for sale of a ship to recognize that the cost of achieving that sale should be treated as [NAME]’s expenses, which are traditionally treated as the highest priority claim against the proceeds of sale. Indeed, consistent with paragraph 11 of the proposed form of Order, it is not unusual for a sale order to provide a process for payment of [NAME]’s expenses from the proceeds of sale prior to the parties embarking upon a process for adjudication of other categories of competing claims (see. e.g., Fraser Shipyard and Industrial Centre Ltd v Expedient Maritime Co, [1998] FCJ No 1676 at para 2; [COMPANY] v [NAME] (Ship) , 2016 FC 570 [ [NAME] ] at para 33). [ 40 ] [NAME] has cited a number of authorities that it argues support its position that expenses incurred for the preservation, safekeeping and maintenance of a vessel while under arrest and even before the issuance of an order for sale may be properly assessable as [NAME]’s expenses ( [COMPANY] v [NAME]) , 2012 FC 1168 at para 32; Hawker Siddeley Canada Ltd v St. Ninian (Ship) , [1978] FCJ No 413; [NAME] at para 76; [COMPANY] v [NAME]) , 2007 FC 434 at paras 10-12). [ 41 ] However, as I read these authorities, they all relate to priorities decisions made following the sale of a vessel. It is of course available to [NAME] to argue at a later stage of this litigation, when priorities are being adjudicated, that the [NAME] incurred following the Vessel’s arrest and up to the date of the sale order should be afforded a high level of priority, as akin to [NAME]’s expenses, pursuant to a possessory lien, or through an equitable adjustment of priorities. [NAME] also cites [COMPANY] v [NAME] (Trustee of) , [1997] FCJ No 626, in which [NAME]’s expense status was afforded to the cost of removing containers from a containership in order to facilitate its judicial sale. However, that case is distinguishable from the claim for the [NAME] which extends to a period significantly predating the current efforts to sell the Vessel. [ 42 ] [ADDRESS] is not at this stage prepared to afford [NAME]’s expense status to the [NAME] incurred from time of the Vessel’s arrest to the present. As for comparable charges for services provided by [NAME] moving forward, it may be that they would qualify for [NAME]’s expense status under the Order that the Court will issue in this motion. While the Court is not prepared to prejudge this point through an express reference to [NAME]’s services in the Order, [NAME] will remain at liberty to advance that position after those charges are incurred. I also agree with [NAME] that [NAME]’s drafting of paragraph 11 of the proposed Order is inadequate. Unlike a number of precedent sale orders identified by [NAME]’s draft makes no mention of [NAME]’s expense status being afforded to costs incurred for berthage, security, preservation, safekeeping or maintenance of the relevant vessel. Indeed, as [NAME] notes, the final sentence of [NAME]’s paragraph 11 expressly excludes expenses such as berthage and pre-sale maintenance from being afforded such status. [ 43 ] My Order will not include that final sentence and will adopt language for paragraph 11 more compatible with the precedents that [NAME] has identified. I note that my language will allow for payment of Sheriff’s costs from the proceeds of sale following taxation but will not include language that appears to have been included in some precedents in order to override the application of Rules 490(5) and (6). Those Rules provide for assessment and the right of any interested party or caveator to be heard in such assessment. In the absence of any submissions from the parties on this point, and particularly given the potential for disputes as to the qualification and quantification of particular costs as [NAME]’s expenses, I see no reason why the application of those Rules should be excluded. [ 44 ] The precedent language that I will adopt will include a reference to [NAME]’s expense status being afforded not only to costs incurred by the Sheriff but also to costs funded by or on behalf of [NAME] or any other party or caveator. [ 45 ] For ease of reference in reading the above Reasons, the language I will adopt in paragraph 11 of my Order is as follows:

11. All reasonable expenses of advertisement of the sale, agency fees, insurances and all other costs, disbursements, commissions and other expenses such as costs of berthage, security, reproduction of plans, photographs, courier services, survey reports, and appraisal necessary or inherent to giving effect to this Order and the commission of sale and for the preservation, safekeeping or maintenance of the Vessel incurred by the Sheriff and/or funded by or on behalf of [NAME] or any other party or caveator shall be treated as Sheriff’s costs payable immediately after taxation by an assessment officer in priority from the proceeds of the sale. [ 46 ] I will address [NAME]’s claim to have its litigation costs treated as [NAME]’s expenses when addressing costs of this motion later in these Reasons. C. Should the Court order a stay of all other Federal Court proceedings relating to the Vessel? [ 47 ] [NAME] requests that the Court exercises its discretion under subsection 50(1) of the Act to stay the Other Proceedings, which are five other actions involving the Vessel. [NAME] refers the Court to the explanation in [NAME] v Canada , 2001 FCT 1388 at paragraph 10, to the effect that a multiplicity of proceedings is to be avoided whenever possible and that the issuance of a stay of one proceeding may serve to avoid the risk of inconsistent findings, excessive costs, and duplication of effort. [ 48 ] Applying that principle to the case at hand, [NAME] argues that a stay of the Other Proceedings is necessary to protect the Court’s control over the res and to prevent conflicting orders. [NAME] submits that parallel actions risk duplication of steps, prejudice to parties, and interference with the sale process, while the requested stay would ensure an orderly resolution of all claims against the Vessel, protect the priority of such claims, and avoid unnecessary costs. [ 49 ] [NAME]’s request for a stay is unopposed other than by [NAME], although they do not necessarily oppose some form of stay. [NAME] argue that a limited administrative stay for purposes of sale mechanics may be appropriate but that a broad stay of all proceedings is not. In support of this position, [NAME] recognize that stay is appropriate to avoid a multiplicity of proceedings or conflicting findings but argue that the sale of a vessel does not require staying priority disputes, wage claims, or enforcement proceedings. [ 50 ] [NAME] have not articulated the details of the sort of stay that they consider appropriate or provided any submissions as to how their interests in the Other Proceedings could not be pursued through a priorities adjudication process in the case at hand. Nor have they explained how a multiplicity of proceedings and conflicting findings could be avoided without ensuring that the adjudication of all claims and priority disputes takes place in one proceeding. At the risk of stating the obvious, the Vessel can only be sold (and its proceeds of sale distributed among claimants) once. [ADDRESS] therefore agrees with the other parties that it is in the interests of the efficient administration of justice, including the avoidance of a multiplicity of proceedings and conflicting findings and the minimization of costs, that the Court issue a stay to achieve a single process for the adjudication of claims and priorities. [ 51 ] In its reply written submissions, [NAME] states its understanding that [NAME] wants one of the Other Proceedings to be the lead action through which all claims and priorities would be determined. It is not apparent to the Court that [NAME] are taking that position. However, if the question is which of the various proceedings involving the Vessel should be employed to achieve the required determination of all claims against it, I agree with [NAME] that the Court should select the matter at hand, in which [NAME] has taken the initiative to pursue judicial sale of the Vessel. [ 52 ] I also note that the [NAME] conveyed the following further submission on behalf of [NAME]: On behalf of [NAME] and [COMPANY] we consent to the draft order with the exception that the stay on judgement T-592-26 which was granted by the court is not hindered in any way with respect to completion of that judgment with respect to providing certified copy and proof of service or compliance with Para 3) of that order. [ 53 ] The [NAME] reiterated [NAME]’s position that all actions, including T-592-26, should be stayed for the reasons advanced in its motion record. [ 54 ] [NAME]’ submission appears to relate to the Order of Justice Strickland dated February 18, 2026, which recognized an arbitration award in [NAME]’s favour as binding and enforceable as if it were a judgment of the Court. Paragraph 3 of that order provided that the judgement would come into effect following certain service and filing obligations to be met by [NAME]. [ 55 ] As [NAME]’s submission does not articulate a basis for the Court to treat that step in T-592-26 differently from the steps necessary to advance the other matters constituting the Other Proceedings, the Court declines to adopt that position. [ 56 ] However, I note that it is of course available to [NAME] (or any interested party) to move in the future pursuant to subsection 50(3) of the Act to make a case that the stay of the Other Proceedings (or any of them) should be lifted or varied. [ 57 ] My Order will include a stay of the Other Proceedings materially on the terms of [NAME]’s proposed form of Order. As a housekeeping point, I note that, while paragraph 15 of the proposed form of order (which imposes the stay) includes all the Other Proceedings, the list of matters in paragraph 16 (which identifies the files in which a copy of this Order is to be placed) omits T-592-26. My Order will include all the Other Proceedings in paragraph 16.

V. Costs [ 58 ] As previously noted, [NAME] seeks to have its litigation costs, including costs of this motion, awarded on a solicitor-client basis and treated as [NAME]’s expenses. I note that, in support of such treatment, [NAME] relies on a provision of its loan documentation that it submits entitles it to claim its legal fees and expenses on a solicitor-client basis. I make no current comment on this provision, other than to say that a determination of whether [NAME] may be able to claim its solicitor-client costs with the priority afforded by its mortgage is for another day, when the Court is adjudicating competing claims and their priorities. [ 59 ] [NAME] also cites [NAME] (at para 8) in support of its position but, again, that decision was made in the context of a priorities determination, in the course of which the Court analysed various components of the costs claim of the party that had brought the ship to sale and awarded priority to only some of those costs and not on a solicitor-client basis (at paras 34-38). [ 60 ] That said, as previously noted, [NAME] has taken the initiative to present this motion, which has been for the benefit of all creditors and, with the exception of modifications to paragraph 11 of the proposed Order, it has succeeded in obtaining its requested relief. My Order will therefore award [NAME] its costs of this motion, payable not by the other parties but from the proceeds of sale of the Vessel, but will reserve adjudication as to the priority and quantification of those costs, including whether such quantification should be on a solicitor-client or party-and-party basis. "Richard F. Southcott" Judge FEDERAL COURT SOLICITORS OF RECORD DOCKET: T-879-21 STYLE OF CAUSE: [NAME] v [NAME], [COMPANY], THE OWNERS AND ALL OTHERS INTERESTED IN THE SHIP “MYSTIQUE V” AKA THE “[NAME]”, THE OWNERS AND ALL OTHERS INTERESTED IN THE SHIP “KINDNESS”, THE SHIP “MYSTIQUE V” AKA THE “[NAME]” (“MYSTIQUE V”), AND THE SHIP “[NAME]” (“[NAME]”) MOTION DEALT WITH IN WRITING

REASONS FOR

ORDER: SOUTHCOTT J. DATED: APRIL 2, 2026 WRITTEN SUBMISSIONS : [NAME] For The PlaintifF [NAME] FOR THE DEFENDANTS ([NAME]) [NAME] FOR THE DEFENDANT (ON THEIR OWN BEHALF) [NAME] FOR THE DEFENDANTS ([COMPANY].) [NAME] FOR THE DEFENDANTS ([COMPANY].) SOLICITORS OF RECORD : [COMPANY], British Columbia FOR THE DEFENDANTS ([NAME]) [NAME], British Columbia FOR THE DEFENDANTS ([COMPANY].) [NAME], British Columbia FOR THE DEFENDANTS ([COMPANY].)