Executive Summary: Key Legal and Evidentiary Issues

• MacKay Communications seeks $38,965.50 for unpaid marine navigation and communications equipment supplied to the vessel "Starfish I"

• BIM Yachting Ltd. challenged the court's jurisdiction and sought to set aside the warrant of arrest and admiralty caveat against the Starfish I

• Disputed beneficial ownership of the vessel at the time the cause of action arose is central to whether the in rem claim can proceed

• Plaintiff was granted leave to further amend its notice of civil claim and add BIM, Mahmud Muhammed Topbas, and Promotors as defendants

• The Proposed Defendants' abuse of process argument failed as they had not suffered prejudice from the amendments

• BIM's application to strike the in rem claim and release the vessel was dismissed, with the plaintiff and West Bay Shipyards Ltd. granted their costs in the cause

The construction of the Starfish I and the supply of marine equipment

On February 27, 2023, Promotors Otomotiv Turizm Yatcilik Tasimacilik Elektronik San Ve Dis Ticaret Ltd. STI ("Promotors") entered into a vessel construction agreement with Coastal Craft Yachts Ltd. for the construction of a custom-built 45-foot white/grey Coastal Craft sport fishing boat known as the "Starfish I," with a contract price of $2,198,300 USD. It does not appear as though the plaintiff or West Bay Shipyards Ltd. knew of the existence of the Vessel Construction Agreement until after the commencement of the proceeding. In October 2025, MacKay Communications — Canada Inc. delivered marine navigation and communications equipment to the Starfish I and issued an invoice in the amount of $38,965.50. That invoice remains unpaid, and responsibility for payment is disputed. On December 10, 2025, West Bay Shipyards Ltd. commenced an action in the Vancouver Registry of the Federal Court of Canada, alleging it is owed $20,214.34 relating to fiberglass, fairing, painting, carpentry, joinery, cabinetry, and other services it says were provided for the benefit of the Starfish I. On December 15, 2025, the UK Maritime and Coast Guard Agency issued a Certificate of Provisional Registration for the Starfish I, and on January 15, 2026, a receiver was appointed for Coastal Craft Yachts Ltd.

The arrest of the vessel and competing applications

On January 8, 2026, MacKay Communications was granted a warrant to arrest the Starfish I and filed its notice of civil claim. On January 19, 2026, the plaintiff filed its amended notice of civil claim. West Bay Shipyards Ltd. filed an admiralty caveat against the vessel on January 16, 2026. BIM Yachting Ltd., in its capacity as "owners and all others interested" in the Starfish I, filed a Jurisdictional Dispute on January 23, 2026, and then brought an application seeking an order setting aside the warrant and caveat and seeking to strike the in rem claim contained in the amended notice of civil claim, pursuant to Rules 21-8(1) or 9-5(1) of the Supreme Court Civil Rules. BIM had made arrangements to transport the Starfish I to Turkey on an ocean carrier scheduled between January 25 and February 10, 2026, and argued urgency in having a decision rendered. It was not disputed that if the warrant and caveat were released, both MacKay Communications and West Bay Shipyards Ltd. would have no remedy to collect the amounts owed, as the Starfish I would be removed from Canada.

The dispute over beneficial ownership and the in rem jurisdiction

The central legal issue concerned whether the in rem claim could stand. Under section 43 of the Federal Courts Act (RSC 1985, c F-7) and Rule 21-1(2) of the Supreme Court Civil Rules, an action in rem requires that personal liability (in personam) be established against the ship's owner, and the vessel must be beneficially owned by the same person at the time the cause of action arose and when the action was commenced. BIM argued that the amended notice of civil claim did not advance any in personam claim against BIM as owner, and that the asserted statutory right in rem was precluded because the beneficial owner of the Starfish I was not the same at the time the cause of action arose and when the action was commenced. BIM contended that any amounts owed to the plaintiff were the responsibility of Coastal Craft Yachts Ltd. However, when the court asked BIM's counsel who it asserts was the beneficial interest holder of the Starfish I at the time the cause of action arose, counsel advised that the beneficial interest holder is not identified in the record and that question may be a triable issue. The plaintiff argued there was a triable issue regarding whether Mahmud Muhammed Topbas, through his corporate agents Promotors and BIM, was the beneficial owner of the Starfish I at all material times, relying in part on clause 3.1 of the Vessel Construction Agreement.

The plaintiff's application to amend its pleadings

MacKay Communications filed an application on February 2, 2026 seeking to add BIM, Mahmud Muhammed Topbas, and Promotors as defendants and to further amend its amended notice of civil claim. The proposed amendments were significant: they removed the pleading that Coastal Craft Yachts Ltd. was at all material times the owner of the Starfish I and replaced it with the assertion that Mahmud Muhammed Topbas, through his corporate agent Promotors, was the beneficial owner at all material times; added allegations that Coastal Craft Yachts Ltd. acted as agent for Mahmud Muhammed Topbas, Promotors, and BIM in the procurement of the maritime navigation and communication equipment supplied to the Starfish I; pleaded that pursuant to clause 3.1 of the Vessel Construction Agreement, Mahmud Muhammed Topbas had the right to demand proof from Coastal Craft Yachts Ltd. that equipment procured for the Starfish I had been paid in full; and introduced claims that Coastal Craft Yachts Ltd., acting as agent, knew it was insolvent or verging on insolvency and committed a fraud on the plaintiff. The Proposed Defendants opposed the amendments, arguing abuse of process, inconsistency with earlier pleadings, lack of material facts supporting the alleged agency relationships, and insufficient particulars of the alleged misrepresentation and fraud.

The court's analysis of abuse of process and the sufficiency of the amendments

Justice LeBlanc rejected the abuse of process argument, finding that the Proposed Defendants had not previously been named as defendants in the claim and had not filed a response to civil claim, meaning they had not suffered any prejudice by having to previously engage in the litigation. The court accepted that identifying the beneficial owner of the Starfish I at the time the action arose had not been a simple matter, and that the plaintiff had been responding to information as it became known. The court noted that the identity of the legal and beneficial owners is likely an issue that will have to be determined at trial, and the plaintiff should not be unnecessarily restricted in bringing its claim forward. The court further found that the proposed amendments did advance a claim, noting that a party is not required to adduce evidence in support of a pleading before trial, and that if further particulars were sought, there is a process available for further particulars to be demanded. The court was unable to fully consider the argument regarding whether the proposed pleading contained the necessary particulars of the alleged misrepresentation and fraud, as the parties did not argue this matter before the court, and the court was not aware of what particulars the Proposed Defendants say ought to be there to sustain a claim. However, the court did not foreclose the Proposed Defendants from applying in the future to strike the alleged misrepresentation and fraud claims.

The ruling and outcome

The Honourable Justice LeBlanc granted the plaintiff's application in full, permitting MacKay Communications to further amend its notice of civil claim and add BIM, Mahmud Muhammed Topbas, and Promotors as defendants. BIM's application to set aside the warrant of arrest and admiralty caveat and to strike the in rem claim was dismissed. The court found that BIM had not put evidence before the court that would allow a finding that one of the Proposed Defendants was not a beneficial owner at the time the claim arose and when the claim was filed, and noted there was at least some evidence to suggest that one of the Proposed Defendants was the beneficial owner at all material times, though no finding was made on that point as it is a matter to be decided at trial. The court found it would be improper at this early stage in the absence of any compelling evidence to set aside the warrant and caveat, and that the question of whether a right in rem and in personam exists is a triable issue. The court noted that should BIM wish to remove the Starfish I from the jurisdiction, it can do so by posting security for the claims advanced by the plaintiff and West Bay Shipyards Ltd. The plaintiff and West Bay Shipyards Ltd. were granted their costs in the cause. No exact monetary amount was determined at this stage, as the underlying claim of $38,965.50 by MacKay Communications has yet to be adjudicated on its merits, and the $20,214.34 claim by West Bay Shipyards Ltd. remains the subject of a separate action in the Federal Court.