The appellant arrested the respondent's cargo following a breach of contract dispute.
The arrest was later set aside, and the respondent counterclaimed for damages for wrongful arrest, including loss of interest on security and loss of working capital.
The Federal Court of Appeal awarded damages for both.
The Supreme Court of Canada allowed the appeal in part, upholding the award for loss of interest as a valid exercise of discretion over costs, but overturning the damages for loss of working capital because damages for wrongful arrest require a finding of bad faith or gross negligence, which was absent.
