Finansbanken ASA v. The “GTS Katie”

In Maritime Liens, Mortgages & Priorities on (Updated )

The issue in this case was whether the claimant had a subrogated interest in the wage lien of the crew of the defendant vessel. The claimant alleged that he had entered into an agreement with the vessel owner to provide the owner with US$40,000.00 to pay the crew. In return, and with the full knowledge and participation of the crew, the claimant was to be subrogated to the crew’s wage claim in the amount of US$ 50,0000.00 (ie. a 25% premium). Further, it was alleged that the agreement was subject to U.S. law. The Prothonotary rejected the subrogated claim primarily on the basis that the evidence was hearsay and did not establish an agreement in which the crew participated. Moreover, the Prothonotary held that there was no good evidence establishing an agreement that U.S. law would apply and that under Canadian law a wage claim could not be assigned or subrogated without the consent of the court. Finally, the Prothonotary held there were no equitable reasons to allow the claim since the claimant was not a voluntary organization that paid the crew wages out of altruism. The fact of the 25% premium discounted altruism as a motive.