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Potential problems with vessel ownership...by Catherine A. Hofmann, Bernard LLP - Subscriber Access Only

By BCShippingNews 14 December 2014

For anyone who owns a boat, either commercially or purely for pleasure, you might think that the purpose of this article is to detail the ongoing maintenance and costly repairs which are part and parcel of vessel ownership. Those problems are however, well known to all and certainly do not require in-depth analysis by any legal scholar, let alone by me. Instead, I propose to discuss the nature of vessel registration with the Transport Canada Ship Registry, the transfer of legal and beneficial ownership of a vessel and what laws may govern such transfer.

By way of background, there are several different ways in which one can acquire an ownership interest in a vessel, including construction, purchase and sale, bankruptcy or judicial sale. For these purposes, I will focus on the acquisition of a vessel through a typical purchase and sale.

The Canada Shipping Act, 2001 sets out the statutory requirements for the ownership and registration of ships in Canada and the applicable regime depends, in part, on the nature of the vessel in question. In particular, section 46 of the Act, requires that all vessels which are not pleasure craft, in excess of 15 gross tons, owned by a “qualified person” and not registered in a foreign state, must be registered with the Ship Registry. A qualified person means a Canadian citizen or a permanent resident within the meaning of subsection 2(1) of the Immigration and Refugee Protection Act (Canada) or a corporation incorporated under the laws of Canada or a province.