Sable Offshore
Energy Inc. v. Bingley 2003
NSSC 020 (N.S.S.C.) (LeBlanc, J.)
This case involved an action by a
lobster fisherman against the builder of an underwater pipeline for loss of
income due to a decrease in his lobster catch alleged to have been caused by
construction activities while laying an the pipeline. At the conclusion of a Small Claims hearing, a Small Claims court
adjudicator awarded damages to the fisherman on the following basis:
I find on
the balance of probabilities that the decrease in the catch rate in the
sub-areas of Mr. Bingley was due to construction of the pipeline. The precise manner in which the construction of the pipeline impacted on
the fishery is not known. However I find the conclusion inescapable given Mr.
Bingley’s fishing history and detailed data that the construction of the
pipeline and the ancillary activities did, in fact, negatively impact on his
catch. (para. 4).
Upon appeal, the Nova Scotia Supreme
Court found that the Small Claims adjudicator erred in law by determining
causation before he or she determined that the defendant had committed a
negligent act. In particular, the adjudicator failed to address the difficult
issue of whether or not such a loss of income claim could be established for
economic loss as opposed to physical harm. Accordingly the matter was remitted back to the Small Claims court before
a different adjudicator for a rehearing.
Torts
– Limitation of Liability – Calculation of damages for net damage
claim
– consequently economic loss – unjust enrichment – punitive damages
Capilano Fishing
Ltd. v. Qualicum Producer (The) 2001 BCCA 244 (B.C.C.A.)
This was a net damage case involving a
claim for damages incurred by a vessel when its net was fouled by another
vessel during a very short opening in the 1997 herring seine fishery. The issues raised by this case included the following:
- Recovery
for contractual relational economic loss;
- Limitation
of Liability;
- Restitution
for unjust enrichment with an accounting of profits earned by the
defendants; and
- Punitive
damages;
- Quantification
of damages.
At the trial level, Warren J.
applied the former provisions of the s. 574 of the Canada Shipping Act to
allow the defendants to limit their liability to approximately $40,000 dollars.
Although damages were limited to
$40,000, the trial court also addressed the issue of how damages should be
quantified.
With respect to unjust enrichment, the
trial judge applied the reasons of Lowry J. in the “Cape Flattery” (1
December 1997) Vancouver C953623 (B.C.S.C.) to reject this claim. With respect of quantification of the loss of fish, the court based its
award upon the daily average of the vessels fishing in the area. In doing so,
the court said “[f]rom time immemorial fish have been among the more elusive
of prey. The only certain catch
is the one stored on board.”
The trial court also rejected the
claim for punitive damages.
With respect to contractual relation
economic loss, the trial court followed the decision of Lowry J. in the “Cape
Flattery” to allow the claim of members of a fishing pool who had an
interest in the catch of the plaintiff vessel. However, it rejected the claim of a fish processor, which had supplied
a licence to the plaintiff vessel at a discounted rate in exchange for the
right to purchase its catch.
Upon appeal, the decision was varied
as set out below.
With respect to limitation of
liability, the court reversed the trial court and prevented the defendants
from limiting their liability. In
doing so, it adopted the following quote from Lowry J. in Savage Fisher
(The) v. Prosperity (The) (2000) 78 B.C.L.R. (1124) (B.C.S.C.):
I would have considered that
the owner or the charterer of a vessel that participates in a shotgun herring
opening must be privy to damage to the property of others its vessel may
cause. I say that because of the
nature of the activity. As
indicated at the outset, large trawlers are operated in a high stakes
competition for fish which forces them to maneuver (sic) at speed in close
proximity. Masters are encouraged
to catch as much herring as they can in what is most often a very short period
of time . . . It is an activity
where an owner’s instruction to exercise caution, end even to put safety
first, must for all practical purposes be lost in the priority of making a
large catch. As I said at the
outset, it is a most unusual kind of maritime adventure – one that compels
masters to sacrifice good seamanship for profit as happened in this case. [para.
51]
. . . I have difficulty seeing
on what basis an owner or charterer that engages its vessel in that activity
could meet the standard of care required to be permitted the privilege of
limiting its liability. [para. 52]
With respect to quantification of
damages, instead of basing it award on the daily average as did the trial
court, the court made a larger award based upon ½ of the amount caught by the
offending vessel. In doing so,
the court considered the maxim omnia praesumuntur contra spoliatorem (all
things presumed against a wrongdoer) as well as the fact that “[f]rom time
immemorial fish have been among the more elusive of prey. The only certain catch is the one stored on board” (para. 36).
With respect to the claim of a fish
processor for the value of a herring licence given to the claimants at a
discounted price in exchange for a promise by the claimants to sell their
catch to the fish processor, the court was unable to find any evidence to
support the claim, as the processor had led no evidence regarding its profits.
The court also cautioned that it did “not wish to be taken as holding
that such a claim for economic loss would lie” (para. 50).
With respect to the claim based on
unjust enrichment, the court said “actions for negligence in the operation
of vessels are actions for compensation for losses caused. There is no need to
complicate such actions with notions of unjust enrichment” (para. 49). Similiarly, with respect to the claim for punitive damages the court
said, “it is not for this Court to introduce into maritime law a concept
which is unknown to it” (para. 49).
Torts – Application of Collision Regulations to “Shotgun Herring Opening” –
Limitation of Liability
North
Ridge Fishing Ltd. et al. v. The “Prosperity” 2000 B.C.S.C. 1124 (Lowry J.)
This case involved a collision between
the net of the fishing vessel Savage Fisher (plaintiff) and the fishing vessel
“Prosperity” in the 1997 herring seine fishery. This fishery was described by the trial judge as a “high stakes race
. . . 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.” The issues in this case
included:
- The
application of Rule 15 (Crossing Situation) of the Collision
Regulations;
- Apportionment
of fault;
- Tonnage
of fish caught; and
- Limitation
of Liability.
Rule 15
With respect to the application
of Rule 15, the court ruled that this was not a crossing situation because
“the Crossing Rule can only apply where what would be a give-way vessel can
ascertain the future course of the stand-on vessel from observing her movement
and making due allowance for the nature of the locality”. In rejecting the application of the Crossing Rule, the court pointed
out that the Crossing Rule must always be read with the Responsibility Rule
(Rule 2), which refers to the precaution to be taken by ordinary seam or by
the special circumstances of the case.
Apportionment of Fault
With respect to apportionment of
fault, the court apportioned 75% of the fault to the plaintiff based primarily
upon the “woefully inadequate” look out being kept by the vessel (there
was no assistant in the wheel house). In
addition, the court found that the master of the plaintiff vessel also failed
to exercise the caution that good seamanship dictated because he was being
driven by his desire to maximize his catch.
The court also assessed 25% of
the fault to the defendant vessel for not taking earlier measures to avoid the
collision when it ought to have been apparent that one was going to occur.
Tonnage of Fish Caught
Given the uncertainties in the
evidence regarding the amount of fish caught in the damaged net, the court
followed the approach taken in two previous cases and made an award based upon
the daily average of all of the vessels at the opening.
Limitation of Liability
Although
the amount of the award made this issue largely academic, the court reviewed
limitation of liability under the pre-1997 amendments to the Canada
Shipping Act and found that it would have allowed the vessel to limit.
The court advised that it would have done so based upon two previous
decisions of the court. However,
it questioned the correctness of those earlier decisions by expressing the
view that it would not have been prudent for any owner to allow its vessel to
partake in such a shotgun style opening.
Editor’s Note: As a result of a change of management approach from an overall quota
fishery to an individual (shared) quota type fishery, these types of high
intensity shotgun openings no longer occur at same intensity as they used to
on the British Columbia coast.