Synopsis of significant developments in 2011-2012
There have been two significant collision/limitation cases. Most recently in Peracomo Inc. v. Société Telus Communications, 2012 FCA 199 the Federal Court of Appeal upheld the decision of the trial division holding that a fisherman who had intentionally cut a submarine was disentitled to limit his liability. In Buckley v. Buhlman, 2012 FCA 9, the Federal Court of Appeal upheld a decision of the Federal Court where the differences between sections 28 and 29 of the Marine Liability Act were considered. It was determined that the limits applicable to “passengers” apply only to persons on board the ship seeking to limit liability. Other cases of interest are: J.D. Irving, Limited v. Siemens Canada Limited, 2011 FC 791, where the Federal Court upheld the right of a carrier/ship owner to limit its liability and enjoined an action in a provincial superior court; Hogan v. Buote, 2012 PESC 10 where the court apportioned liability for a collision between fishing vessels; and, Wolverine Motor Works Shipyard LLC v. Canadian Naval Memorial Trust, 2011 NSSC 308 where a claim against a ship that came loose from her moorings during a hurricane was dismissed on the grounds of inevitable accident.
Synopsis of significant developments in 2009-2010
Société Telus Communications v. Peracomo Inc., 2011 FC 494, is the first Canadian decision in which the test to break limitation under the 1976 Convention is held to have been met. The defendant intentionally cut a submarine cable that he had snagged believing it to be abandoned. Other collision/Limitation cases include: Buhlman v. Buckley, 2011 FC 73, where the Court had to consider the differences between sections 28 and 29 of the Marine Liability Act and which limitation applied to a collision between two pleasure craft; and, Laichkwiltach Enterprises Ltd. v. F/V Pacific Faith (Ship), 2009 BCCA 157 (additional Reasons at 2009 BCCA 308), a case involving a collision between a ship and a fish farm, which is of interest for its treatment of betterment in the assessment of damages.
Synopsis of significant developments in 2007-2008
Laichkwiltach Enterprises Ltd. v. F/V Pacific Faith (Ship), 2007 BCSC 1852, additional reasons 2008 BCSC 282, and Omega Salmon Group Ltd. v The “Pubnico Gemini”, 2007 BCCA 33, reversing in part 2006 BCSC 59, are two cases in which ships were held liable for colliding with stationary objects (a moored ship and a fish farm). R. v Cloutier, 2007 QCCQ 13533, R. v. Bridle, 2008 BCPC 52, and R. v. MacKay, 2008 NSPC 8, are three noteworthy cases where criminal or quasi criminal charges were laid following a collision.
Tug and Tow - Vicarious Liability of Vessel for Damage caused by Tug - Collisions - Limitation of Liability
The ship “Star Hansa” was safely moored at her berth when her propeller was struck by the tug “Tiger Shark 2”. At the time, the “Tiger Shark 2” was one of three tugs assisting in the berthing of the “Dubai Fortune”. The “Dubai Fortune” was under the command of a compulsory pilot. As a consequence of the incident the plaintiff, the owner of the “Star Hansa” brought proceedings claiming damages of $2.7 million from the owner of the “Dubai Fortune” as well as the owner of the three tugs. The plaintiff and the owner of the tugs settled the action as between them by the payment of the limitation fund of $500,000 and the proceedings against the tugs were discontinued. The settlement was conditional on the plaintiff being able to pursue the claim against the owner of the “Dubai Fortune” on the basis that the “Dubai Fortune” was vicariously liable for the negligence of the Master of the “Tiger Shark 2”. It was admitted that there was no negligence on the part of the pilot and that the “Dubai Fortune” was entitled to limit its liability. The only issues were whether the “Dubai Fortune” was vicariously liable for the negligence of the Master of the “Tiger Shark 2” and, if so, whether the limitation fund was to be calculated on the basis of the tonnage of the “Dubai Fortune” or that of the “Tiger Shark 2”. At trial (2012 FC 1110) the action was dismissed. The trial Judge held the imposition of vicarious liability requires justification which, in the case of an employer-employee relationship, is founded in the control the employer has over the manner in which the employee does his work. This control test applied to tug and tow cases and the question of whether the tug or tow has control was held to be a question of fact. The focus of the inquiry is the relevant negligent act and who was entitled to give orders or directions as to how the work should be done to prevent it. The Trial Judge said in this case the pilots gave only general orders to the tugs and gave no orders at all to the “Tiger Shark 2”. The negligent act was the manner in which the “Tiger Shark 2” was manoeuvred. The trial Judge said the evidence was overwhelming that the control test had not been made out. As the “Dubai Fortune” was not vicariously liable for the negligence of the “Tiger Shark 2”, the trial Judge did not need to consider the limitation issue. The Plaintiff appealed.
Held: Appeal Dismissed.
Decision: In very short reasons the Federal Court of Appeal held that there was no reviewable error on the part of the trial Judge.
Offences - Dangerous Operation of a Vessel Causing Death
R v. Escott, 2012 BCSC 1922,
The accused was charged with dangerous operation of a vessel causing death. The charge arose out of a collision between a vessel being operated by the accused and another vessel. A passenger in the accused’s vessel died as a result. The collision occurred at night in total darkness. The accused’s vessel was displaying no navigation or running lights. The accused’s evidence was that the running lights impeded his night vision and his practice was to turn them off in conditions of reduced visibility. The accused’s vessel was proceeding at a speed of 26 miles per hour and the other vessel was proceeding at 32 miles per hour.
Decision: Accused guilty.
Held: The Crown must prove both the actus reus (the act) and the mens rea (the mental element) of the offence beyond a reasonable doubt. In this case the actus reus is the operation of a vessel in a manner that is dangerous to the public having regard to all the circumstances. The focus is on the risks created by the manner of driving not the consequences. The focus of the mens rea is whether the manner of operation is a “marked departure” from the standard of care of a reasonable person. It is not required to prove the accused deliberately operated the vessel in a dangerous manner. The accused was operating his vessel at an unsafe speed, without navigation lights, in a narrow channel where there was a risk of collision and he did not keep a proper look-out. This is operation of a vessel in a manner dangerous to the public and the actus reus is proved. With respect to the mens rea element, the accused’s manner of operation of the vessel displayed a reckless disregard of extreme risk and in the circumstances, exhibited a marked departure from the norm.
Comment: The accused was later sentenced to two years in prison. The reasons can be found at 2013 BCSC 555.
Collisions – Cutting of Submarine Cable – Liability – Limitation - Meaning of "Such Loss" - Insurance – Wilful Misconduct
The plaintiff was the owner of two submarine cables on the bottom of the St. Lawrence River. The defendants were the corporate owner of a fishing vessel and the operator of the vessel who was also the principal of the owner. The operator snagged one of the submarine cables belonging to the plaintiff while fishing. The operator cut the cables with a saw believing that it was not in use. A few days later he snagged the cable a second time and did the same thing. The plaintiff commenced these proceedings alleging negligence and damages of approximately $1 million to repair the cable. The defendants denied liability saying insufficient notice had been given of the location of the cables and that, in any event, the cables should have been buried. The defendants further disputed the damages and claimed the right to limit liability. A further issue was whether the defendant’s insurance coverage was jeopardized by reason of “wilful misconduct” on the part of the insured/defendants.
At trial (2011 FC 494), the trial Judge found that the cables were included in notices to mariners and were shown on navigation charts and that it was the duty of the defendants to be aware of them. The trial Judge further found that it was not practical to bury the cables and held that the sole cause of the loss was the intentional and deliberate act of the defendant operator. With respect to damages, the trial Judge held that the plaintiff was entitled to damages in the nature of superintendence and overhead and allowed 10% for this. The trial Judge then turned to limitation of liability and noted that to avoid limitation the plaintiff had to prove a personal act or omission of the defendant committed either “with intent to cause such loss” or “recklessly and with knowledge that such loss would probably result”. The trial Judge held, for the first time in Canada, that this test had been met and the defendants were not entitled to limit liability. The trial Judge said that the defendant operator had intentionally cut the cable and that the loss was the diminution in value of the cable, not the cost of repair. The trial Judge said the defendant operator intended the very damage but just did not think the cable would be repaired. The trial Judge further held that the defendant operator was “reckless in the extreme” and that the loss was a certainty. Turning to the insurance issue, the trial Judge referred to authorities that established wilful misconduct “implies either a deliberate act intended to cause the harm, or such blind and uncaring conduct that one could say that the person was heedless of the consequences”. The trial Judge had little difficulty in concluding this test had been met and the insurance coverage void. The defendants appealed.
Decision: Appeal dismissed.
Held: The Federal Court of Appeal (2012 FCA 199) agreed with the trial Judge on the issue of liability finding, among other things, that the defendants ought to have used up-to-date charts which disclosed the existence of the cable. A liability issue raised on appeal that does not appear to have been raised at trial was whether the individual defendant could be jointly and severally liable with the corporate defendant. The individual defendant argued that he should not be liable as his acts were those of the corporation. However, the Court of Appeal said that employees, officers and directors will be held personally liable for tortious conduct causing property damage even when their actions are pursuant to their duties to the corporation. Concerning the limitation issue, the Court of Appeal also agreed with the trial Judge finding that the defendants intended to physically damage the cable and that it did not matter whether the defendants were aware of the actual loss that would result. Finally, on the insurance issue, the Court of Appeal was not persuaded the trial Judge had made an error in concluding that the conduct of the defendants was "a marked departure from the norm and thus misconduct". Further, the Court of Appeal agreed that this misconduct was the proximate cause of the loss.
Note: An application to appeal to the Supreme Court of Canada was granted on 24 January 2013.
Comment: This decision is somewhat troubling in that the LLMC Convention seems to require a specific intention to cause the precise loss or damage that results from the impugned act. The words in Art. 4 of the LLMC Convention are “…with intent to cause such loss…”. If the defendant truly believed the cable had been abandoned, it is doubtful he could have intended the loss that resulted. It is understood that this decision is under appeal to the Supreme Court of Canada.
Collisions – Apportionment – Vessel Engaged in Fishing
Hogan v. Buote, 2012 PESC 10,
This case concerned a collision involving two fishing vessels. One vessel, under the command of the plaintiff, was in the process of laying lobster traps and proceeding in a northerly direction while the other vessel, under the command of the defendant, was proceeding westerly. The defendant argued he had the right of way pursuant to Rule 15 of the Collision Regulations (the vessel which has the other on her starboard side shall give way). The plaintiff, on the other hand, said he had the right of way as he was a vessel engaged in fishing pursuant to Rule 3.
Decision: The plaintiff was 75% at fault and the defendant 25% at fault.
Held: The plaintiff, although laying traps, was not restricted in his ability to manoeuvre and therefore Rule 3 did not apply. The defendant had the right of way but he ought to have exercised greater care and his failure to see the plaintiff’s boat was a failure to keep a proper lookout contrary to Rule 5.
Limitation of Liability - Pleasure Craft - Collisions - Interest - Passengers
Buckley v. Buhlman, 2012 FCA 9,
The plaintiffs brought this action for limitation of liability under Part 3 of the Marine Liability Act. The plaintiffs were the owners of a fishing lodge that offered their guests the use of boats and motors. The defendants were a family of four who were guests at the lodge. During the defendants’ stay at the lodge they were involved in a collision between two of the plaintiffs’ boats. The first boat was operated by one of the plaintiffs and had two of the defendants as passengers. The second boat was operated by one of the defendants with the fourth defendant as a passenger. The defendants in the second boat were injured. The main issue in the case was whether the applicable limitation was under s. 28 or s. 29 of the MLA. At the time s. 29 applied to “passengers” of ships of less than 300 gross tons and provided a limit of liability of at least 2 million SDRs (approximately CDN$3 million). Section 28 applied to all ships of less than 300 gross tons except passenger claims under s. 29 and provided for a limit of liability of $1 million. (The limitations of Part 4 of the MLA, which implements the Athens Convention, were not applicable as the defendants were not passengers “under a contract of carriage”.) The term “passenger” is a defined term in Part 3 of the MLA and includes a person carried on board a vessel “operated for a commercial or public purpose”. The parties apparently presented arguments relating to whether the vessels were used for commercial purposes. However, at trial, the Judge pointed out that this argument was misplaced. The trial Judge noted that the two defendants who were injured were not aboard the vessel operated by one of the plaintiffs. Therefore, regardless of whether the vessels were used for a commercial purpose, the injured defendants were not passengers vis-a-vis the plaintiffs and the s. 29 limitation did not apply. Accordingly, the limitation applicable was $1 million under s. 28. The trial Judge further dealt with a subsidiary issue of whether the limitation amount included interest and costs and held that it did not. The defendants appealed to the Federal Court of Appeal arguing that the limitation should have been under s. 29.
Decision: Appeal dismissed.
Held: The appellate Court agreed that s. 29 of the MLA had no application as the injured parties were not on board the first boat. The Court noted that Art. 7 of the Convention on Limitation of Liability for Maritime Claims, from which s. 29 of the MLA is derived, favoured the interpretation that s. 29 applies only to persons on board the ship seeking to limit liability. A cross-appeal from the trial Judge’s decision that the limitation amount was exclusive of interest and costs was abandoned. The Court said this was a question to be left for another day.
Comment: This case concerns sections 28 and 29 of the Marine Liability Act but the Reasons for Judgment refer to the section numbers as they existed in 2006. This can be confusing for anyone familiar with the current numbering because the section numbers have since been transposed. What was s. 28 is now s. 29 and vice versa. To be consistent with the Reasons and to avoid adding to the confusion, I have decided to use the 2006 section numbers in this summary
Collisions - Inevitable Accident - Hurricane
Wolverine Motor Works Shipyard LLC v. Canadian Naval Memorial Trust, 2011 NSSC 308 ,
In this case the defendant’s steel hulled vessel broke loose from its moorings and struck and sank the plaintiff’s sail boat which was moored alongside. The incident occurred as Hurricane Juan was pounding the Nova Scotia coast. The plaintiff alleged the defendant was negligent. The court, however, found that the defendant was aware of the approaching hurricane and prepared for it but could not have anticipated the severity of the weather. The plaintiff’s case was therefore dismissed. The Court had been particularly troubled that the defendant had led expert evidence but the plaintiff had not.
Collisions - Ship at Moorage - Liability – Damages - Betterment - Expert’s Reports -Representative Proceedings
Laichkwiltach Enterprises Ltd. v. F/V Pacific Faith (Ship), 2009 BCCA 157,
This was an action for damages arising out of a collision. The plaintiff’s ship was moored at a wharf when the defendant’s vessel struck it while attempting to dock. The trial Judge held that the defendants were prima facie negligent as there is a presumption of fault when a moored vessel is struck by a moving vessel. The trial Judge accepted that there was a clutch failure on the defendant’s vessel but, in the absence of evidence of the history or maintenance of the clutch, this did not absolve the defendant of liability. The plaintiff sought a total of $105,000 in damages including approximately $14,000 for lost fishing income. The trial Judge, however, found that the plaintiff had failed to prove much of the damages it claimed and those damages it had proved were reduced by 67% to reflect “new for old” or betterment. Part of the reason for the lack of proof was the trial Judge gave no weight to the opinions of the plaintiff’s expert because the expert’s report had apparently been drafted by a lawyer and the trial Judge was uncertain as to whose opinions were expressed in the report. The claim for lost income was denied on the grounds that the plaintiff had unreasonably delayed in effecting the repairs. The plaintiff appealed the damages issues. The Court of Appeal refused to intervene with respect to the findings of what had been damaged. These were findings of fact that were supported by the evidence. With respect to "betterment" the plaintiff/appellant argued that this concept did not apply to admiralty cases. The Court of Appeal disagreed holding that betterment was commercially realistic. The Court of Appeal did, however, find that the Trial Judge had not properly calculated the betterment. The Court noted that betterment calculations must be reasonable and fair to both parties and that it must be remembered that the cause of immediate repairs was the tortious act of the defendant/respondent. In result, the Court of Appeal adjusted the betterment reduction from 67% to 33%.
Collision - Failure to give way - Contributory Negligence
Vogelsang v. Vandale, 2008 SKPC 137,
This was a collision between two small pleasure craft on a lake. The Defendant admitted negligence but also alleged that the Plaintiff, the operator of the other vessel, had been partly at fault. When the collision occurred the Plaintiff had been heading west and the Defendant North. The Defendant was towing water tubers. The Defendant’s boat struck the Plaintiff’s boat at midship. The Court found that the vessels were both proceeding at a safe speed, the Plaintiff’s vessel had the right of way, and neither party saw the other before the collision. The Court held that the Plaintiff was not guilty of contributory negligence and the Defendant was solely liable. Damages were assessed at approximately $7,000 including $5,000 for pain and suffering. (Note: Even though the Defendant’s vessel was the give-way vessel in this situation and clearly failed to comply with Rules 15 and 16 of the Collision Regulations, the Plaintiff failed to comply with Rule 17 and, given the Plaintiff had not seen the Defendant before the collision, also failed to maintain a proper lookout contrary to Rule 5. The finding that there was absolutely no contributory fault on the part of the Plaintiff is difficult to understand.
Collisions - Investigations - Transportation Safety Board - Release of Seized Data
British Columbia Ferry Services Inc. v. Canadian Transportation Accident Investigation & Safety Board, 2008 BCCA 40,
This application arose out of the sinking of a passenger ferry, the Queen of the North. The sinking was investigated by the Transportation Safety Board (“TSB”) who, as part of the investigation, retrieved the electronic chart system (“ECS”) hard drive from the sunken wreck. The data was provided to the ship owner by the TSB pursuant to an agreement in which the ship owner agreed to keep the data in confidence and only to use it to respond to the draft report of the TSB. The ship owner wanted to use the data for other purposes and brought this application for an order entitling it to do so. The ship owner argued that the disclosure of the data would not in any way impair the functions of the TSB. The Court, however, held that the terms of the agreement governed and should be enforced.
Collision - Limitation Period - Extension
Rioux v. Bégin, 2007 QCCQ 4119,
The issue in this case was whether the Court should exercises its discretion under s.23(2) of the Marine Liability Act to extend the limitation period. The Plaintiff was an infant and the limitation period had apparently been missed because legal advisors thought the provincial limitation period of two years applied. The Court granted the request for an extension. (Note: Unfortunately, this decision is only published in the French language, a language in which the author is not fluent, and it is not entirely clear to the author why the extension was granted.)
Collision with Fish Farm - Damages – Mitigation - Interest
Omega Salmon Group Ltd. v. The “Pubnico Gemini”, 2007 BCCA 33,
The Plaintiff was the owner of a fish farm that was damaged when the “Pubnico Gemini” collided with it. Liability for the collision was admitted and the only issues were in relation to damages. Specifically, the Defendants argued that: (i) the damages should be based on the cost to repair the damaged fish pens rather than the cost of replacement; (ii) the amount paid by the Plaintiff to expedite the delivery of the replacement section was excessive; and (iii) the Plaintiff failed to mitigate by not repairing and re-using the damaged section in another of its fish farms. The trial Judge decided all issues against the Defendants holding first that the damaged section was not a stand-alone fish pen but a component of a larger array and, in the normal course, such a single component would never be ordered or manufactured. Moreover, no expert evidence was led by the Defendants as to the cost of repairs and what evidence there was indicated the cost of repairs could exceed the cost of replacement. On the issue of whether the Plaintiff paid an excessive amount to replace the pen the trial Judge held that the pen system was a high end system and that the manufacturing had to be expedited to minimize production losses. The trial Judge considered the amount paid by the Plaintiff was not unreasonable given the urgent delivery requirements. On the final issue, the trial Judge noted that the Defendants had not offered any proof that the damaged section could be re-used or sold for salvage and held that the Defendants' arguments were mere conjecture. The trial Judge then turned to the question of interest and, after reviewing the various authorities on the point, declined to award compound interest and declined to award interest on damages for which the Plaintiff had been reimbursed by its insurer. The trial Judge did, however, award interest at a rate higher than prime based on evidence that the Plaintiff actually paid such higher rates. Not surprisingly, the Plaintiff appealed the failure to award interest on sums received from its insurer and the Court of Appeal had little difficulty in overturning this aspect of the decision. That the Plaintiff had received compensation from its insurer was said to be res inter alios acta, or more simply, not relevant. The Defendant also successfully appealed the trial Judge’s decision to award interest at rate higher than prime. The Court of Appeal reviewed the older authorities on interest and noted that the rate of interest awarded did not depend on the financial circumstances of the claimant. The Court therefore held that a conventional rate such as the prime rate was the appropriate rate.
Collisions – Vessel Data Recorders – Privilege – Accident Investigation
Wappen-Reederei GmbH & Co. KG v. The “Hyde Park”, 2006 FC 150,
This is an important case dealing with the interpretation of sections 28 and 29 of the Canadian Transportation Accident Investigation and Safety Board Act and questions of privilege. [Section 28 of the Act deals with “on-board recordings” (defined as recordings originating from or received on or in the bridge or control room of a ship) and provides that such recordings must be released to an investigator, are privileged and must not be produced in any legal proceeding “unless the court concludes that the public interest in the proper administration of justice outweighs in importance the privilege attached to the on-board recording” and must, in any event, not be used against the ship's officers or crew in any legal proceedings. Section 29 of the Act deals with recorded communications between ships and public authorities, such as Coast Guard and VTS, and provides that such records cannot be used against the ship's crew in any legal proceedings.] The case arose out of a collision on 26 September 2005 between the ships “Cast Prosperity” and “Hyde Park” in the St. Lawrence River. Following the collision, actions were commenced by each of the two vessels against the other and an investigation was conducted by the Transportation Accident Investigation and Safety Board (TSB). In the course of the investigation the Voyage Data Recorder from the “Cast Prosperity” was seized under section 28 of the Canadian Transportation Accident Investigation and Safety Board Act. The Voyage Data Recorder records various data including the ship's position, speed and heading, voice communications on the bridge (bridge recordings) and radio communications with other ships and shore stations (VHF recordings). The owners of the “Cast Prosperity” brought this motion, inter alia, to compel the TSB to return the VHF recordings and to provide the parties with copies of the bridge recordings. There were essentially two issues to be decided: first, whether s. 28 of the Canadian Transportation Accident Investigation and Safety Board Act had any application; and, second, whether the bridge recordings should be disclosed. With respect to the application of s. 28, the vessel owners argued that the recordings were actually captured and stored on equipment located in a utility room of the vessel and not on the bridge and that they therefore did not fall within the definition of “on-board recording” in the Act. The motions Judge had little difficulty in dispensing with this submission as the microphones that recorded the conversations were on the bridge and this was sufficient. With respect to the VHF recordings, however, the situation was different. The motions Judge, noting that radio communications were specifically dealt with in s. 29 of the Act, held that they were governed by s. 29 rather than s. 28. She then considered whether s. 29(6) prohibited their use in the present legal proceedings between the owners of the ships. It was noted that the wording of s. 29(6) only prohibited the use of VHF recordings in proceedings against crew members, however, after considering the scheme of the Act and the general context, the Judge held that the prohibition equally applied to the present proceedings involving the owners. Turning to the second issue of whether the privileged bridge recordings should be disclosed by TSB to the parties pursuant to s. 28(6), the Judge noted that the court had to consider four factors, namely: the nature and subject-matter of the litigation; the nature and probative value of the evidence; whether the evidence could be obtained in another way; and, the possibility of a miscarriage of justice. After reviewing the transcripts in her Chambers she concluded that they were of little evidentiary value and held that they need not be disclosed
Collision – Small Vessels – Improper lighting – Liability
Thatcher v. Schell, 2005 BCSC 1121,
This case involved a collision on Okanagan Lake between a 26' sailboat operating under power and a 19' motorboat. The collision occurred at dusk. Both vessels were destroyed and the occupants of each were injured. The owner of the sailboat alleged that the collision was caused by the negligence of the other vessel in proceeding at an excessive speed and failing to maintain a proper lookout. The owner of the motorboat argued that the collision was caused by the negligence of the sailboat in failing to have the proper running lights and in turning to port immediately before the collision instead of to starboard as required by the collision regulations. It was uncontested that the driver of the motorboat did not see the sailboat until immediately before the collision and took no steps to avoid the collision. After reviewing all of the evidence the Judge found as a fact that the sailboat was not properly lit and that this was the cause of the collision. The owner/operator of the sailboat was therefore held to be completely at fault.
Collisions – Docks – Causation – Damages – Tug and Tow
The Queen v. The “Delta Pride” et al., 2003 FCT 11,
This was an action for damage allegedly caused to a breakwater by the Defendant vessel while manoeuvring. The facts established that one of the tugs assisting the Defendant vessel made contact with the breakwater. The Defendants, the owners of the vessel, argued that they were not liable for any contact between the tug and the breakwater. The Court held that there is a general presumption that the tow is in the control of the tug and that this presumption had not been rebutted. Accordingly, the Court found that there was liability. However, the Court also found that the breakwater was in a deteriorated and weakened condition and that this was a contributing cause. In result, the damages were reduced to take into account the condition of the breakwater.
Collisions – Liability of Owner – Limitation
Dixon v. Leggat, 2003 CanLII 21626 (ON CA),
A pleasure craft ran into a rock face in Lake Rosseau, Ontario. As a result of the accident two passengers were injured, one fatally. These actions were commenced against the owner of the pleasure craft and the driver of the pleasure craft, the owner’s brother. At trial, the trial Judge found the driver liable in that he was operating the vessel at an unsafe speed, failed to maintain a proper lookout, and failed to properly navigate the vessel. The trial Judge also held the Canada Shipping Act, in particular s. 566, created a statutory liability on the owner of the boat. On the issue of limitation, the trial Judge found that the operator could limit his liability but that the owner could not. The trial Judge's finding with respect to the liability of the owner of the vessel was appealed. The Ontario Court of Appeal held that the trial Judge erred in his interpretation of s. 566 of the Canada Shipping Act. The Court of Appeal noted that this section merely provided for joint and several liability where there were joint tort-feasors and did not impose liability where none otherwise existed. The Court of Appeal then considered other sections of the Canada Shipping Act also referred to by the trial Judge but held that neither individually nor collectively did they impose a statutory liability on the owner of a boat. The Court of Appeal did, however, confirm that an owner could be liable on the principle of respondeat superior or on the basis of ordinary principles of tort law. In result, the Court of Appeal returned the case to the trial division for a new trial on the issue of the owner's liability.
Collision - Tug and Tow - Towage Conditions - Damages - Standard on Appeal
Gravel and Lake Services Ltd. v. Bay Ocean Management Inc., 2002 FCA 465,
This was an appeal from the Trial Division wherein the trial Judge apportioned liability for a grounding 75% to the “Lake Charles” and 25% to the “Robert John”. The case arose out of an alleged collision between the “Lake Charles” and the tug “Robert John” in the Port of Thunder Bay. The Plaintiff, the owner of the “Robert John”, alleged that, when the tug and another tug were hooked up to the “Lake Charles” to assist her to berth, the “Lake Charles” negligently drifted into the “Robert John” and caused her to go aground. The Defendants denied there was a grounding and denied negligence. The trial Judge found as a fact that there had been a grounding and further held that the parties were both partly at fault. Liability was apportioned 75% to the “Lake Charles” and 25% to the “Robert John”. The Plaintiff also claimed that its standard terms and conditions entitled it to contribution and indemnity from the Defendants. The trial Judge held, however, that the towage contract was between the Plaintiff and the charterer of the vessel. The owners and managers of the “Lake Charles”were never a party to the agreement and were therefore not bound. On the issue of damages, the trial Judge allowed damages for replacement of a rudder stock on the principle that “no deduction is made from the damages recoverable on account of the increased valued of the tug or the substitution of new for old materials”. The trial Judge disallowed damages for steering gear repairs on the grounds that the damage to the gear resulted from delay in drydocking the vessel and not from the original grounding. The trial Judge also disallowed a claim for re-drydocking to re-install the original propeller holding that this could be done at the next scheduled five year drydocking. On appeal, the Federal Court of Appeal noted that the Appellant’s arguments were virtually all related to findings of fact by the trial Judge and that such findings could not be reversed unless it was established that the trial Judge made a palpable and overriding error which affected his assessments of the facts. With respect to the trial Judge’s apportionment of liability, these findings should not be disturbed unless it can be clearly shown that the trial Judge’s conclusion was based on an error in law or a mistaken conclusion of fact. The Court of Appeal held that these tests had not been met by the Appellant and dismissed the appeal with the exception that the damages were reduced by $7,000.00 to take into account a concession that was made by the Respondent at trial.
Collision - Liability - Damage to Fishing Net
Wilson Fishing Co. Ltd. v. The Western Investor, 2001 FCT 1390,
This was another collision action that occurred during the shotgun roe herring fishery, a fishery which the Trial Judge described as “a most unusual kind of maritime adventure - one that compels masters to sacrifice good seamanship for profit”. The Plaintiff alleged that due to the negligence of the Defendants , the Defendant vessel collided with the Plaintiff’s skiff and the Plaintiff’s net became entangled in the propeller of the Defendant ship. As a result, the Plaintiff was unable to participate in the fishery. The Defendant denied liability. The Trial Judge reviewed the circumstances leading to the collision. She found that the Plaintiff’s Master was 100% responsible for creating a situation of imminent peril by failing to keep a proper lookout. She also found that the Plaintiff’s skiff and the Defendant vessel were equally responsible for the collision because they failed to take evasive action. However, she held that the damage to the Plaintiff’s net was not an inevitable consequence of the collision. She found that immediately after the collision the Plaintiff’s net was not entangled in the propeller of the Defendant ship. Rather, the entanglement occurred when the Defendant Master ordered the engines to be restarted too soon after the collision and before the net could be towed a safe distance away. The Trial Judge therefore held the damage to the net was caused solely by the Defendants. On the issue of damages, however, the Trial Judge held that the Plaintiff was not entitled to damages for a lost catch since the Plaintiff had aborted his set before the collision when a third party vessel cut him off.
Collisions - Mutual Legal Assistance Act - Standing
ALT Navigation Ltd. v. United States of America, 2001 CanLII 33796,
This case arose out of a collision 130 miles off the coast of Massachusetts between the F/V “Starbound” and an unidentified vessel. As a result of the collision the F/V “Starbound” sank and three of her crew drowned. The T/V “Virgo” subsequently called at ports in Newfoundland where she was inspected by Transport Canada officials and U.S. Coastguard. Three search warrants were obtained under the Mutual Legal Assistance Treaty and the Mutual Legal Assistance Act. As a result of the execution of those warrants some 98 exhibits were seized. The present application was to determine who would have standing at a subsequent hearing when it was determined what was to be done with the exhibits seized. The intervenors who requested standing were the owners of the “Virgo”, the three crew members of the “Virgo” who had been charged in the United States and were subject to extradition proceedings, The remaining crew members of the “Virgo”, the owner of the “Starbound” and the estates of the deceased seamen. The Court granted standing to the owner of the “Virgo”, the owner of the “Starbound”, the estates of the deceased seamen, the three crew members who were subject to extradition proceedings and two other crew members who “were directly connected to the chain of command” of the “Virgo.
Collision - Apportionment of Liability
De Merchant Estate v. Price, 2001 NBQB 98,
This matter involved a collision between a small runabout and a sailboat under power in a narrow channel. The main issue in the case was liability and apportionment. The Trial Judge found the parties equally at fault. The operator of the sailboat was at fault for not having the proper lights, for operating on the wrong side of the channel and for failing to take evasive action. The operator of the runabout was at fault for operating his vessel while impaired by alcohol and for failing to observe the other vessel.
Collisions - Limitation - Damage to Fishing Net
Capilano Fishing Ltd. v. The "Qualicum Producer", 2001 BCCA 244,
This was an action for damages suffered during the 1997 herring fishery when the Defendant's vessel cut the net of the Plaintiffs' vessel. The Plaintiffs claimed damages for the net, for the value of the lost catch and for the costs of fishing licences thrown away. The Defendants denied negligence and claimed the right to limit liability. On the issue of liability the trial judge found that the Master of the Defendant vessel was negligent in that he was aware of the Plaintiffs’ vessel yet manoeuvred his vessel in a direction that ultimately led to the collision. On the matter of limitation, the trial judge found that the Defendant vessel was well equipped and had a competent Master and crew and, therefore, held that the Defendants were without “fault or privity” and entitled to limit their liability to the amount of approximately $40,000.00. On appeal, the Court of Appeal upheld the finding on liability but overturned the finding on limitation. The appeal court adopted the reasoning from North Ridge Fishing Ltd. et al. v The “Prosperity” et al.,(2000) 78 B.C.L.R. (3d) 388 and held that any owner who permits his vessel to participate in the roe herring fishery is not entitled to limit liability since the fishery compels the sacrifice of safe navigation and good seamanship. (Note: This case was decided under the old limitation of liability regime. Under the new regime the limitation amount is substantially higher ($500,000.00 for vessels under 300 tons) and the owner is entitled to limit unless the claimant establishes a personal act or omission committed with intent to cause loss, or recklessly, with the knowledge that loss would probably result.)
Standing to Sue - Collisions - Insurance - Subrogation
Porto Seguro Companhia De Seguros Gerais v. The “Federal Danube” et al., 2001 CanLII 22115 (FC),
This was the re-trial of an action that had been previously dismissed by the Federal Court Trial Division in a judgment reported at  82 F.T.R. 127. That judgment was ultimately overturned by the Supreme Court of Canada and a new trial ordered on the grounds that the Trial Judge erred in refusing to hear three expert witnesses because assessors had been appointed by the court (see  3 S.C.R. 1278).
The Plaintiff was the cargo underwriter who had indemnified the cargo owners for damages suffered as a result of a collision in the St. Lawrence Seaway between the “Beograd” and the “Federal Danube”. The Plaintiff argued that the “Federal Danube” was wholly at fault for the collision and liable for the damage to the cargo in the principal amount of $4.4 million. There were two issues in the case; the standing of the Plaintiff to bring the action in its own name and the liability for the collision. On the first issue, the Defendant argued that under Canadian maritime law the Plaintiff ought to have commenced the action in the name of the cargo owners. The Court, however, held that the matter was governed either by the law of Brazil (where the insurance contract was made) or the law of Quebec and that in either case the insurers became subrogated to the rights of their insured upon payment and were entitled to bring the action in their own name. With respect to the second issue, the liability for the collision, the Court held that the “Beograd” was wholly at fault for the collision. The faults found against the “Beograd” included: navigating through the anchorage area rather than in the navigation channel; navigating at an unsafe speed; and, failing to keep out of the way of an anchored vessel. In reaching the conclusion that the “Beograd” was wholly at fault the Court noted that where a vessel underway strikes a vessel at anchor the underway vessel is prima facie at fault unless it is proven the accident could not have been avoided by the exercise of ordinary skill. In the result, the Plaintiff’s action was dismissed.
Collision With Wharf - Towage Contract - Exclusion Clause
Canadian Salt Company Limited v. The "Irving Cedar" et al., 2000 CanLII 16223,
This action arose out of a collision between a ship and a wharf that occurred when the ship was performing ice breaking operations for the Plaintiff in the vicinity of the wharf. The Defendants denied liability on the grounds that they were not negligent and further relied upon an exclusion clause and time for suit provision contained in the contract with the Plaintiff. The Plaintiff denied that the clauses were part of the contract and further argued that on their proper interpretation the clauses did not apply to exclude the Defendants’ liability or extinguish the claim. On the issue of negligence the Court seemed to accept that there was a presumption of negligence on the part of the Defendants given that the ship had struck a stationary object. In any event, the Court did find as a fact that the Defendants had been negligent. With respect to the application of the conditions, the Court found that the conditions applied. In reaching this conclusion the Court emphasized that the conditions had been provided to the Plaintiff by the Defendants together with their quotation and that the Plaintiff had accepted that quotation with only minor changes. The Court accepted that there may have been a subsequent conversation between the Plaintiff and Defendants in which the Plaintiff advised some terms of the contract were not acceptable, however, such conversation occurred after the quotation had been accepted and therefore after the contract had been entered into. The exclusion clause relied upon by the Defendants was as follows:
"The tug owner shall not in any circumstances be liable for any loss or damage suffered by the Hirer or caused to or sustained by the Tow in consequence of loss or damage howsoever caused to or sustained by the Tug or any property on board the tug."
The Court noted that such clauses must be interpreted against the interest of the person who made it. The Court considered that the clause was unclear and ambiguous and held that it did not apply to relieve the Defendants from liability for damage caused by their negligence to the wharf.
The Court next considered the notice and time for suit clause of the contract which provided that notice of a claim had to be given in writing within six months and that suit must be brought within one year. The Court held that this clause was most clear and that as the Plaintiff had not brought suit within one year its action was extinguished. In the result, the Plaintiff’s claim was dismissed.
Collisions - Liability - Limitation
North Ridge Fishing Ltd. et al. v. The Prosperity, 2000 BCSC 1124,
This action arose out of a shotgun opening in the roe herring fishery, an event described by the Court as "a most unusual maritime adventure where, from an opening ‘gun’, many vessels -sometimes dozens- would set their nets at speed in very close proximity during a short period of time". During the course of the opening the Defendant vessel "Prosperity" cut the net of the Plaintiffs’ vessel "Savage Fisher" with the result that the Plaintiffs allegedly lost a substantial tonnage of fish. The issues in the case were who was at fault, damages and limitation of liability. On the issue of fault the Court first considered whether Rule 15 of the Collision Regulations (the crossing rule) had any application. The Court held this rule did not apply as the vessels were not actually crossing and neither master considered that they were. The Court next considered Rules 5 (look-out) and 7 (risk of collision). The Court held that there was an insufficient look-out on the Plaintiffs’ vessel which deprived the master of the ability to determine whether a risk of collision existed. With respect to the "Prosperity" the Court held that there was a sufficient look-out of two persons in the wheelhouse but that the master of the "Prosperity" failed to go astern or stop when he should have. The Court ultimately apportioned liability 75% to the Plaintiffs and 25% to the Defendants. Regarding the issue of damages, and specifically the tonnage lost as a result of the net cutting, the Court held that the best approach was to use the average catch of the vessels involved in the opening. Finally, the Court considered the issue of limitation of liability, which was recognized as probably a moot point given the apportionment of liability and assessment of damages. The Court noted that there were two prior decisions that had allowed limitation of liability under similar circumstances and stated that it would have followed those decisions and allowed limitation, if necessary. It is noteworthy, however, that in the absence of precedent the Court indicated that it would not have allowed the Defendants to limit liability. The Court indicated that the decision of an owner to engage in a shotgun herring opening would be sufficient by itself to disentitle the owner to limitation. (Note: In supplementary reasons issued December 6, 2000,  B.C.J. No. 2443, the Court dealt with the issue of costs. The Court awarded the Plaintiffs 25% of their party and party costs and awarded the Defendants 75% of their pre-trial costs (taxed at 70% of special costs) and 75% of their costs from the first day of trial. The special cost award in respect of pre-trial costs was because of delay by the Plaintiffs in the pre-trial proceedings.)
Collisions - Similar Fact Evidence
Kajat v. The "Arctic Taglu",  3 FC 96,
This was an appeal from a judgement of the Trial Division in which the Defendants were found 85% at fault for a collision between the fishing vessel "Bona Vista" and a tug-barge combination operated by one of the Defendants. A critical determination made by the Trial Judge was that the accident occurred because of the use of a search light on the tug to warn mariners of the existence of the barge by panning the light up and down the port side of the barge . She found that this was perceived by those on board the "Bona Vista" as a signal of an unseen danger to the port side of the barge causing the "Bona Vista" to turn to port, a manoeuver which resulted in the collision. Her conclusions were based on the evidence of two mariners who each testified that they had encountered the tug-barge combination and that they had interpreted the panning search light as a signal of danger to the port side of the barge and turned to port to avoid the unseen danger. The Defendants argued that the Trial judge erred in allowing the evidence of these two mariners. The Federal Court of Appeal agreed. The court held that the Trial Judge had an obligation to determine whether the similar fact evidence was logically probative, i.e. whether it is logically relevant to determining the matter in issue. The court was unable to conclude from the record whether the Trial Judge had made a specific determination to that effect and, therefore, allowed the appeal and ordered a new trial. (It is noteworthy that the Court of Appeal did not determine that the evidence of the two mariners should not have been admitted by the Trial Judge. The court merely determined that the Trial Judge had not specifically addressed her mind to the appropriate test to be applied before admitting similar fact evidence.)
Liability of owner - Pleasure Craft
Sutton et.al. v. Petman, non Registry Nos. 14583 & 14612 (B.C.S.C.),
This was a motion to dismiss a Third Party action. The matter arose out of a fatal collision between two pleasure craft. One vessel was owned by the Third Party but had been loaned to, and was being operated by, the Third Party's son at the time of the accident. The Defendant, the owner and operator of the second vessel, commenced Third Party proceedings against the owner of the first vessel. The Court dismissed the Third Party action. It was conceded that the Third Party could not be held liable by mere reason of ownership of the vessel (as in an automobile case) but that the Defendant had to show a cause of action and evidence in support. The Court further held that the Third Party could not be held liable under the doctrine of vicarious liability as the Third Party had given possession of the vessel to his son and did not exercise any operational control thereafter. The only basis upon which the Third Party could be held liable was in negligence. The Defendant relied on the fact that the collision occurred at or near dusk and that the lights on the Third Party's boat were not operational. The Court, however, found that the Third Party was not aware the vessel would be operated at night and was not aware the lights were not working. The Court further held that there was no requirement that a boat owner periodically check the operation of the lights when it was not intended to use the boat at night.
Apportionment - Speed - Alcohol Impairment - Anchor Lights
Ens v. Gabany , No.75911/91Q,
Apportionment of liability was the issue in this small vessel collision case. The Plaintiff's vessel was at anchor and was hit by the Defendant's vessel. The Court apportioned liability 70% to the Defendant and 30% to the Plaintiff. The faults on the part of the Defendant were traveling at night at an excessive rate of speed when having consumed sufficient alcohol to have affected his judgment and vision. The faults on the part of the Plaintiff were not having an anchor light and anchoring his vessel in an area where through traffic was predictable and probable.
Collision - Fog - excessive Speed - Naval Exercises - Damages - Foreign Currency - Loss of Use
Nordholm I/S v. The Queen, (1996) No.T-1215-89, (F.C.T.D.),
This interesting case involved a collision between the Canadian Naval vessel "Kootenay" and the "Nordpol" on June 1, 1989, in conditions of fog. At the time of the collision the "Kootenay" was engaged in anti-submarine exercises that required her not to emit any radar or radio signals. The "Kootenay" was observed on radar by those on board the "Nordpol" but she could not be raised by radio and her movements were erratic suggesting she was a fishing vessel. The "Nordpol" therefore maintained her course and speed of 13.5 knots assuming the "Kootenay" would pass astern of the "Nordpol". Of course, the "Kootenay" did not pass astern. A close quarters situation developed and the two ships collided. The Court held that both ships were liable and apportioned liability 70% to the "Kootenay" and 30% to the "Nordpol". The "Kootenay" was held primarily responsible because she created the dangerous situation by participating in naval exercises in busy shipping lanes, in fog, without having given any notice to vessel traffic or shipping and without the use of any navigational aids such as radar. The "Nordpol" was also criticized for excessive speed, for failing to take avoiding action and for failing to appreciate the close quarters situation and risk of collision. On the issue of damages, the Court had to consider what was the appropriate date for conversion of foreign currency and what was the appropriate method of calculating loss of use for a warship. On the first issue, the Court reaffirmed that damages incurred in a foreign currency are to be converted to Canadian dollars using the prevailing rate on the date of the commission of the tort. On the second issue, the Court held that there should be damages for loss of use of the "Kootenay", calculated using the capital cost of the ship. It did not matter that the "Kootenay's" duties were performed by other naval ships. There was still a loss to the Defendant; a loss of a "margin of safety".
Liability - Unsafe Speed - Anchor lights - Contributory Negligence - Limitation - Owner/Master Entitlement to Limit
Conrad v. Snair, 1995 CanLII 4175,
This case involved a collision at night between a Boston Whaler and an anchored unlit sailboat. As a result of the collision, a passenger of the Boston Whaler was seriously injured. The issues concerned the liability for the collision, contributory negligence, and limitation of liability. Both the trial Judge and the Court of Appeal found that the driver of the Boston Whaler was entirely at fault for the collision. The driver was found to have been traveling at an excessive rate of speed and failed to maintain a proper lookout. With respect to the sailboat, the trial Judge and the Court of Appeal held that there was no presumption of fault because of the failure to exhibit an anchor light. They further found that there was a local custom to not display anchor lights. The driver of the Boston Whaler also argued that his passenger was contributorily negligent in that she knew of his propensity to drive his boat in a particular manner. The Court of Appeal held that even if the master was known to be reckless, that would be an insufficient basis for a finding of contributory negligence. Although in light of these findings, the Court of Appeal did not need to decide whether contributory negligence on the part of the plaintiff would be a complete bar to damages, it nevertheless gave the opinion that if the Plaintiff had been negligent, the Provincial contributory negligence statute would apply to apportion damages. Finally, the driver of the Boston Whaler argued that he was entitled to limit his liability under the Canada Shipping Act because the accident occurred while he was acting in his capacity as master and not owner of the vessel. In lengthy reasons the Court of Appeal analyzed the problems that arise where the master is also the owner. Ultimately, the Court agreed with the trial Judge that the owner/master of the Boston Whaler was at fault as owner in failing to ensure his alter ego, the master, traveled at a safe speed.
Damages - Owners Repairs
Sanmammas Compania Maritima S.A. v. The " Netuno", No. T-2428-89 (F.C.T.D.).,
The issue in this case was damages. The Plaintiff's ship was hit while moored. The Defendants, who admitted liability, argued that the ship was detained for a longer period than necessary because of other repairs being done at the same time as the repairs to the areas damaged by the collision. On the evidence presented, the Court rejected the arguments of the Defendant.
Disabling Safety Devices
Rast v. Killoran, 1995 CanLII 2397,
This case involved an action for personal injury suffered by a passenger when a small vessel collided with a submerged log. The impact caused the driver to lose his grip on the outboard motor and, as a consequence, to momentarily lose control over the vessel. The facts established that the boat driver had disabled two safety features found on the outboard engine. He had tightened the throttle screw on the outboard engine to prevent wrist fatigue and he failed to use the kill switch lanyard. The driver argued that it was a practice among fishing guides in the area to do these things. The Court, however, found these practices unreasonable and held the driver liable for the injuries to the passenger.
Sailboats - Damages - Loss of Use
Teschner v. Yarish,  O.J. No. 1569, (Ont. Ct. Gen.Div.),
This matter concerned a collision between two sailboats shortly before the commencement of a sailing race. The Plaintiff's vessel was on a starboard tack. The Defendant's vessel approached the Plaintiff's vessel on the port side at an angle higher than the perpendicular. The Defendant attempted a starboard tack to cross in front of the Plaintiff but the manoeuvre was not successful and the Defendant struck the Plaintiff's vessel amidships at a ninety-degree angle. The Defendant was held 100% liable for the accident. In addition to damages for cost of repairs and loss of value, the Plaintiff was also awarded damages for loss of use of his recreational sailboat, calculated as a percentage of the capital value.
Limitation Periods - CSA s.572 - Extension
Dupras v. Bezzina, No.214/91, (Ont.Ct. Gen. Div.). ,
This case dealt with an interesting issue concerning the validity and applicability of section 572 of the Canada Shipping Act. Section 572 provides for a two year limitation period in actions involving, inter alia, personal injury suffered by a person on board a vessel. The Plaintiffs had rented a vessel which went dead and was struck by the Defendant's vessel. Four years after the accident the Plaintiffs decided to join the lessor of their boat to the action as a Defendant. The lessor opposed the joinder on the basis that the action against it was time barred by section 572. The Plaintiffs, in turn, challenged the constitutional validity of section 572. The Court held that section 572 was valid legislation. The Court went on, however, to hold that it was at least arguable that section 572 applied only to actions by a person on board one ship against the owner of another ship. The Court further held that it was arguable that section 572(3) gives the plaintiff a prima facie right to have the time within which to commence an action extended unless the extension would prejudice the Defendant.