On the 11th, they were 300 miles off  Vigo, Spain .  It was a calm, cloudless evening. At 2035, a  lone, four engine German FW-200 aircraft appeared,  circling the convoy but out of range. Half an hour later, two more arrived in response to his signals. High level bombing began and there was no doubt about their accuracy. Both California and Duchess of York were hit amidships and were soon burning fiercely. At 2136 the aircraft made for Port Fairy, but Iroquois' 4 inch and 2 pdr guns drove them off. Three minutes later there was another attack but the bombs fell astern  then the FW-200's flew away. Moyola and Douglas took off survivors from the burning ships, their flames serving as a beacon for U-boats lurking in the gathering darkness. Iroquois carried out Asdic sweeps and then closed the Duchess of York to take off 628 men, including nine Czech officers. Canadian seamen dived overboard to rescue people struggling in the water. Incredibly, one of the survivors, a Royal Canadian Air Force Sergeant from Arnprior, Ontario came aboard Iroquois from a lifeboat and didn't even get his feet wet! At 0135, the two blazing hulks were sunk by the group and Port Fairy was escorted to Casablanca, Morocco.

The survivors disembarked, Iroquois was refueled, reprovisioned then headed for the UK escorting another convoy. Aboard,  was one German officer from U-506, sunk off Gibraltar by US aircraft.  Leaving the convoy off  Lands End,  Iroquois returned to the naval base at  Devonport, England.  She would be the first ship to dock and intelligence wanted the German officer ashore for questioning as quickly as possible.

While returning to Devonport, the officer's jacket was taken at Captain Holm's order to be laundered. After all, the prisoner was a naval officer, and in navy tradition, he should face his interrogators in a clean uniform. When returned, the officer jokingly remarked that apparently someone wanted a souvenir and had taken the "wings" off his uniform. There is no doubt that its removal was an infringement of the Geneva Convention and of course, such unofficial acquisitions hampered the work of Allied Intelligence. Capt. Holms became very agitated and gave an ultimatum over the PA system that the badge be returned by 0800 or there would be no shore leave when the ship arrived at the naval base in Devonport. A "ship's buzz" came around immediately after Capt. Holm's  ultimatum to the effect that "if you have the badge, keep it.  To hell with Holms".  The badge never did show up.

Accordingly, all shore leave was stopped until the item was returned. The crew took this negatively and when ordered to sea on 19th July, all personnel below Leading Seaman refused duty. This situation was such a shock to the captain that he had a heart attack and had to be taken ashore. Making things more complicated was Iroquois scheduled sailing that night with HMCS Athabaskan and HMS Orkan in a Biscay patrol. Shortly after that patrol, Iroquois was deployed to Scapa Flow, Scotland.

When the ship arrived in Scapa,  Leading Seamen and below were mustered forward and blasted by the Rear Admiral Of  Destroyers (RAD).  Petty Officers and above were mustered aft and blasted as well. Captain James Hibbard then joined Iroquois as her new Commanding Officer. As a result of the "work stoppage", Iroquois was banished to the  Murmansk convoy run for six months.

Sources: Martin Brice, Britt Deedo and Tom Ingham.
 

Leading Seaman Erland Hugh Grant, 21, and Able Seaman Wilbert Carson Spence, 19, both of Ottawa were singled out for special mention as the "central figures" in the rescue operation. They stripped off their clothing and plunged into the sea time and again to rescue drowning men who jumped from the blazing merchantman.  Where the merchant ship was sunk was not disclosed in the Navy statement, and neither was the number of survivors picked up, but Iroquois and other ships accounted for all but a few of her complement.

When the destroyer—then commanded by  Cmdr. W. B. L. Holms of Victoria- finally docked "some days" later food lockers were empty and "there wasn't even a sweat rag that hadn't been converted into some article of wear".