Federal Courts Rules (SOR/98-106)

Marginal note:Defence of action in rem

• 480 (1) An action in rem against a ship or other thing named as a defendant in the action may be defended only by a person who claims to be the owner of the ship or thing or to be otherwise interested therein.

• Marginal note:Interest to be pleaded

  (2) A defence filed by a person referred to in subsection (1) shall disclose the interest that the person claims in the ship or thing.

Arrest of Property

Marginal note:Warrant for the arrest of property

• 481 (1) A designated officer may issue a warrant for the arrest of property in an action in rem, in Form 481, at any time after the filing of a statement of claim.

• Marginal note:Affidavit

  (2) A party seeking a warrant under subsection (1) shall file an affidavit, entitled “Affidavit to Lead Warrant”, stating

  • (a) the name, address and occupation of the party;

  • (b) the nature of the claim and the basis for invoking the in rem jurisdiction of the Court;

  • (c) that the claim has not been satisfied;

  • (d) the nature of the property to be arrested and, where the property is a ship, the name and nationality of the ship and the port to which it belongs; and

  • (e) where, pursuant to subsection 43(8) of the Act, the warrant is sought against a ship that is not the subject of the action, that the deponent has reasonable grounds to believe that the ship against which the warrant is sought is beneficially owned by the person who is the owner of the ship that is the subject of the action.

Marginal note:Service

• 482 (1) A warrant issued under subsection 481(1), the Affidavit to Lead Warrant and the statement of claim in the action shall be served together by a sheriff in the manner set out in rule 479, whereupon the property subject to the warrant is deemed to be arrested.

• Marginal note:Proof of service

  (2) Proof of service of the documents referred to in subsection (1) shall be filed forthwith after the documents are served.

Marginal note:Possession and responsibility

• 483 (1) Subject to subsection (2), possession of, and responsibility for, property arrested under subsection 482(1) does not vest in the sheriff but continues in the person in possession of the property immediately before the arrest.

• Marginal note:Order for possession of arrested property

  (2) The Court may order a sheriff to take possession of arrested property on condition that a party assume responsibility for any costs or fees incurred or payable in carrying out the order and give security satisfactory to the Court for the payment thereof.

Marginal note:Prohibition against moving arrested property

484 No property arrested under a warrant shall be moved without leave of the Court or the consent of all parties and caveators.

Bail

Marginal note:Release of arrested property

485 On motion, the Court may fix the amount of bail to be given for the release of arrested property.

Marginal note:Form of bail

• 486 (1) Unless the parties agree otherwise, bail shall consist of

  • (a) the guaranty of a bank;

  • (b) the bond of a surety company licensed to do business in Canada or to furnish security bonds in the part of Canada where the bond is executed, in Form 486A; or

  • (c) a bail bond in Form 486A.

• Marginal note:Notice of bail

  (2) A party who intends to give bail in the form of a bond referred to in paragraph (1)(b) or (c) shall serve and file a notice of bail, in Form 486B, at least 24 hours before filing the bond.

• Marginal note:Notice of objection to bail

  (3) An adverse party or caveator who is not satisfied with the sufficiency of a bond set out in a notice of bail shall serve and file a notice of objection in Form 486C.

• Marginal note:Sufficiency of bail bond

  (4) Any question as to the form of bail or the sufficiency of a surety may be determined by a designated officer or referred by that officer to the Court.

Release from Arrest

Marginal note:Release of arrested property

• 487 (1) Unless a caveat has been filed under subsection 493(2), a designated officer may issue a release of arrested property in Form 487

  • (a) on payment into court of

    • (i) the amount claimed,

    • (ii) the appraised value of the property arrested, or

    • (iii) where cargo is arrested for freight only, the amount of the freight, verified by affidavit;

  • (b) if bail has been given in an amount fixed under rule 485 and in accordance with subsections 486(1) and (2) and no objection under subsection 486(3) is outstanding;

  • (c) on the consent in writing of the party at whose instance the property was arrested; or

  • (d) on the discontinuance or dismissal of the action in respect of which the property was arrested.

• Marginal note:Referral to judge or prothonotary

  (2) Where a release is sought under subsection (1), a designated officer may refer the matter to a judge or prothonotary.

Marginal note:Release at any time

• 488 (1) On motion, the Court may, at any time, order the release of arrested property.

• Marginal note:Release of ship

  (2) Where, pursuant to subsection 43(8) of the Act, a ship that is not the subject of an action has been arrested, any owner or other person interested in the ship may bring a motion to the Court for the release of the ship, and if it is found that the ship is not beneficially owned by the person who is the owner of the ship that is the subject of the action, the Court shall order its release without the taking of bail.

• Marginal note:Release of ship without bail

  (3) Where on a motion under subsection (2) the Court is satisfied that the action in which the ship has been arrested is for a claim referred to in any of paragraphs 22(2)(a) to (c) of the Act, the Court may order the release of the ship without the taking of bail.

Marginal note:Release from arrest

489 Property shall be released from arrest on service of a release on the sheriff and payment of all fees and costs of the sheriff in respect of the arrest or custody of the property.

Sale of Arrested Property

Marginal note:Disposition of arrested property

• 490 (1) On motion, the Court may order, in respect of property under arrest, that

  • (a) the property be appraised and sold, or sold without appraisal, by public auction or private contract;

  • (b) the property be advertised for sale in accordance with such directions as may be set out in the order, which may include a direction that

    • (i) offers to purchase be under seal and addressed to the sheriff,

    • (ii) offers to purchase all be opened at the same time in open court, that the parties be notified of that time and that the sale be made pursuant to an order of the Court made at that time or after the parties have had an opportunity to be heard,

    • (iii) the sale not necessarily be to the highest or any other bidder, or

    • (iv) after the opening of the offers and after hearing from the parties, if it is doubtful that a fair price has been offered, the amount of the highest offer be communicated to the other persons who made offers or to some other class of persons or that other steps be taken to obtain a higher offer;

  • (c) the property be sold without advertisement;

  • (d) an agent be employed to sell the property, subject to such conditions as are stipulated in the order or subject to subsequent approval by the Court, on such terms as to compensation of the agent as may be stipulated in the order;

  • (e) any steps be taken for the safety and preservation of the property;

  • (f) where the property is deteriorating in value, it be sold forthwith;

  • (g) where the property is on board a ship, it be removed or discharged;

  • (h) where the property is perishable, it be disposed of on such terms as the Court may order; or

  • (i) the property be inspected in accordance with rule 249.

• Marginal note:Commission

  (2) The appraisal or sale of property under arrest shall be effected under the authority of a commission addressed to the sheriff in Form 490.

• Marginal note:Sale free from liens

  (3) Property sold under subsection (1) is free of any liens under Canadian maritime law.

• Marginal note:Execution of commission

  (4) As soon as possible after the execution of a commission referred to in subsection (2), the sheriff shall

  • (a) file the commission with a return setting out the manner in which it was executed;

  • (b) pay into court the proceeds of the sale; and

  • (c) file the sheriff’s accounts and vouchers in support thereof.

• Marginal note:Sheriff’s accounts

  (5) An assessment officer shall assess the sheriff’s accounts and report the amount that the assessment officer considers should be allowed.

• Marginal note:Assessment

  (6) Any party or caveator who is interested in the proceeds of sale referred to in subsection (4) may be heard on an assessment under subsection (5).

• Marginal note:Review of assessment

  (7) On motion, the Court may review an assessment done under subsection (5).

Marginal note:Payment out of money paid into court

491 On a motion for payment out of any money paid into court under subsection 490(4), the Court may

• (a) determine the rights of all claimants thereto;

• (b) order payment of all or part of the money to any claimant; and

• (c) order immediate payment of any fees or costs of the sheriff in connection with the arrest, custody, appraisal or sale of property, including expenses incurred in maintaining the property between the time of arrest and the sale of the property.

Marginal note:Directions

• 492 (1) The Court may, in making an order under rule 490 or 491 or at any time thereafter, give directions as to

  • (a) notice to be given to possible claimants to the proceeds of sale;

  • (b) advertising for other such claimants;

  • (c) the time within which claimants must file their claims; and

  • (d) the procedure to be followed in determining the rights of the parties.

• Marginal note:Claims barred

  (2) A claim that is not made within the time limited and in the manner prescribed by an order of the Court under subsection (1) is barred, and the Court may proceed to determine other claims and distribute the money among the parties entitled thereto without reference to any claim so barred.

Caveats

Marginal note:Caveat warrant

• 493 (1) A person who desires to prevent the arrest of property shall serve and file a caveat warrant in Form 493A undertaking to give, within three days after being required to do so, bail in respect of any action that has been, or may be, brought against the property.

• Marginal note:Caveat release

  (2) A person who desires to prevent the release of any property under arrest shall serve and file a caveat release in Form 493B.

• Marginal note:Caveat payment

  (3) A person who desires to prevent the payment of money out of court shall serve and file a caveat payment in Form 493C.

• Marginal note:Service of caveat

  (4) A caveat under subsection (1), (2) or (3) shall be served on all parties and caveators.

• Marginal note:Caveat by non-party

  (5) Where a person filing a caveat under this rule is not a party to the action, the caveat shall state the person’s name and provide an address for service.