2018-04-11

Federal Court takes action on derelict trawlers at the Port of Bridgewater

by Gayle Wilson

  • <p>GAYLE WILSON PHOTO</p><p>The Cormorant and the two trawlers that have been languishing in the Port of Bridgewater for years. The Port of Bridgewater is meeting with the Federal Court this week regarding the Cormorant. It has already received a judgment in its favor against the two trawlers, allowing it to field offers from potential buyers for the vessels and pass them onto the court.</p>

At least two of the three derelict ships that have angered town residents for years with their unsightly berth are inching closer to a departure from the Port of Bridgewater.

Rick Welsford, owner of the Port of Bridgewater, has received a Federal Court judgment concerning the two trawlers languishing there, the Hannah Atlantic and Ryan Atlantic II. The latter is known more widely by its former name, the Cape Rouge.

And lawyers concerned with the Cormorant, which has been tangled in a legal web of ownership disputes, lawsuits and allegations of sabotage, are holding a conference call with the court on April 10 to discuss next steps with that vessel.

"What the judgment allows me to do is entertain any offers and make a recommendation back to the court," Welsford told LighthouseNOW, adding that any offer must include a plan of how the prospective owner would remove the two trawlers.

If the court accepts his and his lawyer's recommendation, "then the boat is yours and it's sold," said Welsford.

The judgment, by the Honourable Justice Anne Mactavish, was rendered on January 23, 2018 but took effect February 15.

The defendants listed in the case are MV Ryan Atlantic II, Hannah Atlantic and Tracy Donald Dodds.

A scrap metal dealer from Wolfville, Dodds was jailed for 20 days and fined last year after he refused to remove the Farley Mowat from the Port of Shelburne.

The administrator for the Ship-source Oil Pollution Fund (SOPF) is claiming $382,353.33 for salvage costs against Dobbs after the Cape Rouge sank in 2014, as well as $$839,863.02 for recovery of the Farley Mowat in 2015.

The court ordered that the Port of Bridgewater shall "have judgment against" both MV Ryan Atlantic and MV Hannah Atlantic in the amount of $100,000 each, plus post-judgment interest at three per cent and court costs.

Welsford points out the vessels likely won't sell for that.

"I don't care. As long as it gets [them] out of Bridgewater," he said.

The judgment also indicated the port's claim against Dodds is "dismissed, without costs."

"Our priority is to get the upper hand on the disposal of the vessels. I'm not, at this point, chasing Tracy Dodds for anything. I want those boats out of there and that's what we've got to do to get this document through," Welsford commented.

Welsford and his lawyer, Jay Straith of British Columbia, are hoping for a similar resolution in respect to the Cormorant. But its situation is more complicated.

The SOPF is claiming $534,340.76 against the owner of the Cormorant for salvage costs incurred when the vessel toppled onto the Port's jetty in March, 2015.

A complicating issue is who actually owns Cormorant.

"Who's the owner is very much in dispute in these lawsuits that are pending before the court. The fund has sued ... three companies and one individual, one or more of whom, we say, could be the owner. But which one or more it actually is is not yet decided," reports the SOPF's lawyer, Will Moreira.

Straith confirmed the Port of Bridgewater is among a broader list of parties the fund has named as owners, and noted that it also includes Neil Hjelle and the American company, Cormorant Marine Services.

Beyond ownership, Straith suggested, there are other issues, including Nova Scotia and Nevada laws.

"What law applies and whether the ship was even properly transferred by the federal government in the first place. It's a mess," says Straith.

In any case, "no matter which way you cut it, the Port of Bridgewater is owed a fortune," he added, referring to unpaid mooring fees since about 2011.

However, Straith maintains that any sale is not likely to bring in much. He points to a survey that was done last year by Universal Marine Consultants (Atlantic) Ltd.

In its report dated May 30, 2017, Universal Marine indicated it was advised by Welsford that during the re-floating of the vessel, "it was discovered that the nuts and bolts which connect a sea cock valve to an overboard had been removed. This caused seawater to flood the space for some time and eventually it led to the vessel sinking at the wharf."

Welsford has claimed he was told that the toppling of the Cormorant was the result of intentional damage to its valves.

"And we continue to collect evidence around that criminal act," he said.

Stephen Bornais, a media spokesperson with the federal government's Department of Fisheries and Oceans (DFO), commented in an e-mail to LighthouseNOW previously the Coast Guard "does not investigate ship sinkings. The Coast Guard's principal concern with the sinking of the Cormorant was the threat of pollution to the LaHave River."

In 2009, Universal Marine valued the Cormorant at between $100,000 and $150,000 maximum.

"That valuation was based on the fact that although the vessel needed considerable work and investment to recommission it, it was possible."

The company subsequently suggested that because of damage caused by exposure to salt water during the flooding, the vessel is worth at best about $40,000, "and that would only depend on very buyer favorable sale conditions (i.e. cheap cost to move it from its current location, good scrap steel value, etc.)."

Meanwhile, the Port of Bridgewater is claiming the vessel is a navigational and potential further environmental hazard and is seeking permission to channel sales offers on the vessel through to the Federal Court for judgment upon.

Straith has described it as a "270-foot-long lump of peanut butter stuck to the roof of the Port of Bridgewater's mouth."

He is arguing to get the ship liquidated as soon as possible and before a lengthy legal challenge by creditors.

"If we want to argue with the administrator of the Ship Source as to who gets the money, fine. But let's get the ship out of there and get the money paid into court," said Straith.

How well this argument ultimately will float with the Federal Court remains to be seen, although there should be some indication following the conference call on April 10 between the federal case management judge and the lawyers, including that for Hjelle, who is named as one of the owners but claims he had sold the vessel.

For his part, Moreira wasn't offering a periscope on SOPF's position, suggesting only, "It's before the court and it will proceed along the schedule that the court will fix."

Meanwhile, the DFO's Bornais advised in an e-mail to LighthouseNOW last week that the Coast Guard is continuing to monitor the Cormorant.

"A visual inspection of the vessel by Coast Guard's Environmental Response personnel last month indicated the vessel was stable and did not pose a threat of pollution," said Bornais.

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