Executive Summary: Key Legal and Evidentiary Issues

• Global Federal Credit Union (GFCU), as mortgagee, sought a judicial sale of the arrested vessel "Kindness to the World" under Rule 490 of the Federal Courts Rules, along with marshal's expense status and a stay of related proceedings.

• Allegations of malfeasance arose against Mr. Rohland for allegedly concealing the vessel's arrest and furnishing a falsified survey report during the negotiation of a USD $600,000 loan secured by the vessel.

• Competing claims against the vessel — including GFCU's mortgage debt of USD $645,873.98, Bracewell's preservation expenses exceeding $146,263.02, and Mr. Rohland's storage and wage claims exceeding $150,000 — collectively surpassed the vessel's appraised value of USD $699,000.

• Bracewell challenged paragraph 11 of GFCU's proposed sale order, arguing it excluded berthage and pre-sale maintenance from marshal's expense status, contrary to established precedent.

• The Rohland Defendants opposed GFCU's attempt to elevate litigation costs and survey fees to marshal's expense status and resisted a broad stay of five related Federal Court proceedings.

• Determination of the priority and quantification of all competing claims — including whether GFCU's solicitor-client costs enjoy mortgage-level priority — was deferred to a subsequent priorities hearing following the vessel's sale.

The underlying dispute and the parties involved

This case originates from an admiralty action in the Federal Court of Canada (Docket T-879-21), involving the plaintiff Inga Zane, a businesswoman with an address on Bowen Island, British Columbia, and several defendants including Gregory Rohland, Destiny Yachts Holdings LLC (Destiny), and Boundless Holdings LLC (Boundless). The central asset in dispute is the recreational vessel "Kindness to the World," a 112-gross-ton vessel built in 2005 and registered in the United States. Destiny, a limited liability company incorporated under the laws of Florida, USA, is identified as the owner of the vessel, while GFCU asserts that Mr. Rohland held himself out as a manager/member of Destiny with the authority to contract on behalf of Destiny and the vessel.

The plaintiff's original claim and the vessel's arrest

Ms. Zane initiated the action by Statement of Claim filed on May 31, 2021, asserting claims against the defendants for labour, goods, materials and services provided to the defendant vessel, as well as a claim for a declaration that the defendants held the vessel in a constructive trust for her. A warrant for the arrest of the vessel was issued on May 30, 2021, and it was arrested on May 31, 2021, where it lay on land on the north bank of the Fraser River in Richmond, British Columbia. On June 30, 2021, a Statement of Defence was filed on behalf of the defendants (other than Boundless). The case eventually proceeded to trial before Justice Pamel over six days in May and October 2024. On December 17, 2024, Justice Pamel issued his decision in Zane v Rohland, 2024 FC 2048, granting judgment in the plaintiff's favour in the amount of $4,032.11 (with $1,330.68 being allocated to the vessel and $2,701.43 being allocated to another in rem defendant), related to expenses, equipment and material that the plaintiff purchased for the benefit of the in rem defendants, but dismissing the plaintiff's claim for a declaration of constructive trust.

GFCU's mortgage claim and allegations of malfeasance

Global Federal Credit Union (GFCU), a not-for-profit credit union with its main office in Anchorage, Alaska, entered the picture as a caveator asserting that it is the mortgagee of the vessel. GFCU claimed that on or about August 10, 2023, Destiny executed a promissory note in GFCU's favour in connection with a loan of USD $600,000.00, with interest accruing at a rate of 7.99% per annum, and granted GFCU a mortgage over the vessel as security for that indebtedness. GFCU also claimed that Mr. Rohland negotiated this financing on behalf of Destiny and personally guaranteed Destiny's indebtedness under the promissory note and the mortgage. GFCU further asserted malfeasance on the part of Mr. Rohland, alleging that during the negotiation of the financing, Mr. Rohland failed to disclose the fact that the vessel was under arrest and furnished a falsified survey report related to the vessel. Although between September 2023 and October 2024, Destiny or Mr. Rohland made monthly payments to GFCU, despite several written demands, no further payments were made. GFCU asserted that on June 19, 2025, its counsel sent a demand letter to then counsel for the defendants, demanding payment of the outstanding mortgage arrears then in the amount of USD $609,621.43. As of the filing of the motion on February 13, 2026, GFCU further asserted that the total owing was USD $645,873.98 inclusive of principal, interest and costs, with interest continuing to accrue at the per diem rate of USD $125.56.

The vessel's deterioration and mounting claims

Following its arrest in May 2021, the vessel remained at a boatyard and repair facility operated by Bracewell Marine Group Ltd. (Bracewell) on property owned by Shelter Island Marina and Boatyard Inc. in Richmond, British Columbia, where it continued to deteriorate. Bracewell's president, Mr. Jason Curtis, attested that Mr. Rohland had performed various modifications to the vessel that compromised its integrity, such that it could not be safely returned to the water without further work, precluding its removal from the boatyard. Bracewell incurred significant preservation expenses with respect to the preservation of the vessel and the supply of electricity to it, with a current balance owing of $146,263.02, exclusive of costs of repair work performed by Bracewell and accrued interest. Meanwhile, Mr. Rohland referred to having paid in excess of $150,000.00 toward storage and preservation of the vessel and also asserted maritime lien status for unpaid wages confirmed by an arbitration award. A 2025 survey report prepared by marine surveyor Mr. George Malhiot assessed the vessel to be in restorable condition and assigned it a value of USD $699,000, yet the aggregate claims against it clearly exceeded that figure.

GFCU's motion for judicial sale and the parties' positions

GFCU brought a motion under Rule 490 of the Federal Courts Rules seeking three forms of relief: permission for the judicial sale of the vessel, marshal's expense status for all expenses incurred by GFCU that are required to bring the vessel to sale, and a stay of all other Federal Court proceedings relating to the vessel. The Non-Rohland Defendants consented to the requested judicial sale and the form of order proposed by GFCU, agreeing that the sale was in the best interest of all parties, given the prolonged arrest of the vessel since May 31, 2021, and the need to realize value for the benefit of all interested parties and creditors. Bracewell also agreed that the sale of the vessel was necessary and supported the stay, but challenged paragraph 11 of GFCU's proposed order, which it submitted was inconsistent with precedent and was included by GFCU in an effort to preclude Bracewell's preservation expenses from being afforded the status of marshal's expenses. Bracewell proposed that paragraph 11 be revised to expressly provide that costs related to the preservation, safekeeping or maintenance of the vessel be treated as marshal's expenses. The Rohland Defendants did not in principle oppose a judicial sale but objected to aspects of the relief sought, arguing that GFCU's motion improperly sought to: expand the scope of Rule 490; secure priority findings in advance of a priority hearing; elevate survey fees and legal costs to the status of marshal's expenses; impose a broad stay of unrelated proceedings; and obtain findings concerning alleged fraud, mortgage validity, or quantum of indebtedness, which are irrelevant to a Rule 490 motion.

The Court's analysis on judicial sale

Justice Southcott, applying the framework set out in Canada (Ship-Source Oil Pollution Fund) v Cormorant (Ship), 2019 FC 977, considered several elements including the value of the vessel compared to the amount of the claims, whether there was an arguable defence, whether the owner could carry on, whether there would be diminution in value by delay, and whether there was any good reason for a sale. The Court found that the only formal requirement for the exercise of the power of sale under Rule 490 — that the property to be sold be under arrest — was satisfied, as explained in Offshore Interiors Inc v Worldspan Marine Inc, 2014 FC 655. Given that all parties that had responded either consented to or did not oppose the request for an order for sale of the vessel, and that the volume of claims against the vessel exceeded its value based on the assessment before the Court, the Court concluded there was good reason for sale of the vessel at this stage in the proceeding and approved a process employing the services of Accurate Court Bailiff Services Ltd. as an acting Sheriff, with the proceeds of sale to be held in the trust account of GFCU's legal counsel (and deemed to be funds held in Court), pending further motion to, and order by, the Court adjudicating priorities and distributing the proceeds.

Marshal's expenses and the modification to paragraph 11

On the contentious issue of marshal's expenses, the Court was not at this stage prepared to afford marshal's expense status to the Bracewell Preservation Expenses incurred from the time of the vessel's arrest to the present, noting that such a determination was more properly suited to a subsequent priorities hearing. However, the Court agreed with Bracewell that GFCU's drafting of paragraph 11 of the proposed order was inadequate. Unlike a number of precedent sale orders identified by Bracewell, GFCU's draft made no mention of marshal's expense status being afforded to costs incurred for berthage, security, preservation, safekeeping or maintenance of the relevant vessel, and the final sentence expressly excluded such expenses from being afforded such status. The Court removed the final sentence and adopted revised language for paragraph 11 more compatible with the precedents that Bracewell identified, recognizing marshal's expense status for all reasonable expenses necessary or inherent to giving effect to the order and the commission of sale and for the preservation, safekeeping or maintenance of the vessel, incurred by the Sheriff and/or funded by or on behalf of GFCU or any other party or caveator, payable immediately after taxation by an assessment officer in priority from the proceeds of the sale.

The stay of proceedings

The Court exercised its discretion under subsection 50(1) of the Federal Courts Act to stay all five related proceedings, identified as Court files T-592-26, T-2977-25, 25-T-112, T-3225-24, and T-106-24. Justice Southcott reasoned that a single proceeding was necessary to avoid a multiplicity of proceedings and conflicting findings and to minimize costs. The Court rejected the Rohland Defendants' argument that a limited administrative stay for purposes of sale mechanics was sufficient but that a broad stay of all proceedings was not, noting they had not articulated the details of the sort of stay they considered appropriate or provided any submissions as to how their interests in the Other Proceedings could not be pursued through a priorities adjudication process in the case at hand. The Court also declined to carve out an exception for Mr. Rohland's arbitration-related judgment in Court file T-592-26, relating to the Order of Justice Strickland dated February 18, 2026, as Mr. Rohland's submission did not articulate a basis for treating that step differently from the steps necessary to advance the other matters. The Court noted, however, that it remained available to any interested party to move in the future pursuant to subsection 50(3) of the Act to make a case that the stay should be lifted or varied.

The ruling and outcome

Justice Southcott granted GFCU's motion materially in the form of its proposed order and related Commission of Sale, with modifications. The Court ordered the judicial sale of the vessel "Kindness to the World" under Rule 490, approved the sale process with revised language for paragraph 11, stayed the five related Federal Court proceedings, and awarded GFCU its costs of this motion, payable not by the other parties but from the proceeds of sale of the vessel. However, the Court reserved adjudication as to the priority and quantification of those costs, including whether such quantification should be on a solicitor-client or party-and-party basis, for the future priorities hearing. No specific monetary distribution to any single party was determined at this stage, as the exact allocation of the sale proceeds remains subject to the subsequent adjudication of all competing claims and their priorities.