Tug and Tow
Commentaries are intended as an introduction or overview of the topic. The commentaries for some topics are more detailed than others but none of them should be taken as a complete and full recitation of the law applicable to the topic.
Tug and Tow
Towage vs Carriage
It is always important to distinguish a contract of towage from one of carriage as different legal regimes apply. A contract of towage is one where the tug owner supplies a tug to tow (or push or assist) a ship, barge or other object belonging to someone else. Examples of towage are where a tug owner assists a ship in docking or undocking or when a tug owner is hired to tow a barge (loaded or unloaded) provided by the customer from point A to Point B. In contrast, a contract of carriage is one where the tug owner agrees to supply both the tug and the barge for the transportation of the customer's goods from point A to point C. Where the contract is one of carriage, the duties and liabilities of the tug owner are those of a carrier and the legal regime applicable is that governing contracts for the carriage of goods by sea.
Responsibilities and Liabilities of Tug Owner
The responsibilities and liabilities of a tug owner at common law are: (1) to provide a seaworthy tug, properly manned and equipped to carry out the work in the weather and circumstances reasonably to be expected; and (2) to carry out the work with due care and skill. (Wire Rope British Columbia v BC Marine Shipbuilders,  SCR 363 at p. 392) This duty would appear to include an obligation to inspect the tow. (Fraser River Pile & Dredge Ltd. v. Empire Tug Boats Ltd., 92 F.T.R. 26) If the tug owner fails to provide a seaworthy tug or fails to carry out the work with due care and skill, it will be liable for any resulting loss caused by such failure.
In The West Cock,  P 208, it was said that where the tow is lost or damaged during the course of the tow, the onus is on the tug owner to relieve himself of liability by proving there was no negligence or want of reasonable care or skill on his part. Although this is possibly true for an unmanned tow where the tow has been transferred to the possession and control of the tug owner (a bailment)Canadian decisions are contradictory (The Tug Champlain v Canada Steamship Lines Ltd.,  Ex. C.R. 89; Mitsubishi Canada Limited v Rivtow Straits Ltd., (May 12, 1977) Vancouver Registry No. C763146 (S.C.B.C.); Fraser River Pile & Dredge Ltd. v. Empire Tug Boats Ltd., 92 F.T.R. 26)
Responsibilities and Liabilities of Tow Owner
The owner of the tow has an obligation to ensure that proper skill and diligence is exercised by those on board the tow (Hamilton Marine & Engineering Ltd. v. CSL Group Inc., (1995), 95 F.T.R. 161), that the tow is fit for the towing operation and to disclose any fact or matter which could affect the towing operation. However, this will not absolve a tug owner from liability where a reasonable inspection of the tow would have disclosed the defect. (Again see Fraser River Pile & Dredge Ltd. v. Empire Tug Boats Ltd., 92 F.T.R. 26)
Additionally, where the tow is manned, there is a presumption that the tow is in control of the towing operation and will be liable for any resulting damage (The Queen v. The Delta Pride et al., 2003 FCT 11). However, the question of who has control is one of fact and the vicarious liability of the tow will depend upon the nature of the negligent act that caused the damage. (Grieg Shipping A/S v. Fortune Marine Ltd. (The Dubai Fortune), 2013 FCA 218)
It is quite usual for the common law duties to be varied or eliminated entirely by the terms and conditions of the specific contract between the tug owner and the owner of the tow. There are a variety of common standard conditions that are in use for this purpose. The most well known internationally are the UK Conditions for Towage of which there are various versions. There are essentially three main elements to standard towing conditions: first they provide that the master and crew of the tug are deemed to be the servants of the tow and under the control of the tow (this makes the tow owner vicariously liable for the negligence of the tug crew); secondly, they provide a very broad exemption clause in favour of the tug owner exempting the tug owner from liability for loss or damage however caused, including negligence; finally, they provide that the tow owner shall indemnify the tug owner against and in respect of any claims for loss or damage made against it.
Provided the towing conditions are drafted in a clear and unambiguous fashion, they will be given effect to by Canadian courts. However, if they are unclear or ambiguous, they will be interpreted strictly against the interest of the tug owner or disregarded entirely (Meeker Log and Timber Ltd. et. al. v. The Sea Imp VIII, 1996 CanLII 2229 ).
It is also today quite common to find clauses in towage contracts that require one party or the other to have insurance on either the tug, tow or cargo. Such clauses are generally considered to be for the benefit of the other party and have been held to have the effect of relieving that party from liability for damage that is covered by the insurance. (St. Lawrence Cement Inc. v. Wakeham & Sons Ltd., 1995 CanLII 2482)
Limitation of Liability
Tug owners are entitled to take advantage of the limitation of liability provisions of the Marine Liability Act. An issue which sometimes arises in the context of limitation of liability and towage is whether the tonnage to be used in the calculation is that of the tug or tow or both. In The "Rhone" v The "A.B. Widener",  1 S.C.R. 497, the Supreme Court affirmed that the limitation fund should be calculated on the combined tonnage of the tug and tow when the tug and tow are in common ownership (the "flotilla principle"). In the absence of common ownership and where the barge is a "dumb barge", the fund is to be calculated on the basis of the tonnage of the tug alone.
The operational requirements for tug owners are, for the most part, contained in the Canada Shipping Act, 2001 and the Regulations passed under that Act. Particular regard should be paid to: the Hull Construction Regulations, CRC c. 1431, Part VIII, which provide construction standards for tug boats; The Safe Working Practices Regulation, CRC c. 1467; the Marine Personnel Regulations, SOR/2007-115, which mandate the number and qualifications of crew; and, the Towboat Crew Accommodation Regulations, CRC c. 1498, which contain other standards specific to tug boats.
It is also possible that Provincial statutes and regulations relating to safety, hours of work and other aspects of tug boat operations need to be complied with. Such statutes have been held to apply to fishing vessels (see, for example: Jim Pattison Ent. v. Workers' Compensation Board, 2011 BCCA 3, and R. v. Mersey Seafoods Ltd., 2008 NSCA 67) and would likely be held to be equally applicable to tug boat operations unless there is a conflicting Federal statute. In particular, in British Columbia, the hours of work and overtime requirements contained in the Employment Standards Act have been held by the Employment Standards Tribunal to be applicable to tug boat operations except in limited circumstances. (See: Williston Navigation Inc. v. British Columbia, 2000 Carswell BC 3836, and Wichito Marine Services Ltd., Re, 2015 Carswell BC 379, but note that the correctness of these particular decisions is debatable and a court has not yet ruled on the issue.)
Statutes and Regulations
The database contains 17 case summaries relating to Tug and Tow. The summaries are sorted in reverse date order with 20 summaries per page. If there are more than 20 summaries, use the navigation links at the bottom of the page.
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Coasting Trade - Standing to Challenge Transport Canada Decision - Mootness
Mckeil Marine Limited v. Canada, 2016 FC 1063
Précis: An appeal from a decision of Transport Canada that the towing of two decommissioned vessels from British Columbia to Nova Scotia via the Panama Canal was not "coasting trade" was dismissed on the grounds the applicant did not have standing and the issue was moot.
Facts:The applicant was a Canadian tug and barge company. It wrote to Transport Canada requesting whether the towing of two decommissioned Canadian warships from British Columbia to Nova Scotia via the Panama Canal was “coasting trade” within the meaning of the Coasting Trade Act . Its concern was that the towage of the two decommissioned warships was to be done by an American tug company and that a license had not been obtained. Transport Canada responded that, in its view, the towage would not constitute “coasting trade” and no license was required. Thereafter, the towage was in fact performed by the American company. The applicant then brought this application before the Federal Court for a declaration that the towage did constitute “coasting trade”.
Decision:The application is dismissed.
Held:The applicant does not have direct standing to bring this application as it is not “directly affected” in the sense that the matter at issue affects its legal rights, imposes legal obligations on it, or prejudicially affects it in some manner. The applicant’s concern that the decision of Transport Canada has a negative precedential affect is speculative. The applicant further does not have “public interest” standing. Public interest standing arises where the case raises a serious justiciable issue, the party has a real stake or a genuine interest in its outcome and the proposed suit/proceeding is a reasonable and effective means to bring the case to court. Here there is a serious justiciable issue and the applicant has a real stake or genuine interest in the outcome but this is not an appropriate case to grant public interest standing. Even if the applicant had standing, the matter is moot as the towage of the warships has already been completed and a case with these particular facts is not likely to reoccur.
Clearing of Fouled Anchor by Tug - Liability – Marine Personnel Regulations - Value of Lost Tug
Snow Valley Marine Services Ltd. v. Seaspan Commodore (The), 2015 FC 304
Précis: The sole cause of the sinking of a tug assisting with a fouled anchor was the failure of the defendant to properly secure a safety line.
Facts: The plaintiff’s assist tug was sunk and lost on 5 October 2011 when she was assisting the defendant vessel with a fouled anchor. Specifically, a line was attached from the plaintiff’s tug to the anchor of the defendant vessel and when the anchor came free it fell rapidly and sunk the plaintiff’s tug. The plaintiff commenced this proceeding against the defendant vessel and her owners and operators alleging they were solely responsible for the sinking. The defendants argued that the cause of the accident was the failure of the plaintiff’s crew to take reasonable steps for their own safety including that they failed to utilize a release mechanism when they attached the line to the tug. The defendant further argued that the crew of the plaintiff’s tug did not have the certificates required by the Marine Personnel Regulations passed under the Canada Shipping Act, 2001.
Decision: Judgment for the plaintiff.
Held: Neither of the crew of the plaintiff’s tug held a Master’s certificate as required by s. 212 of the Marine Personnel Regulations but they had years of experience and this cannot be ignored. They were responsible for the safety of their own tug and they were the ones that attached the line to the tug, however, that tow line connection was not the cause of the sinking. The cause of the sinking was the failure of a safety chain from the defendant vessel to the anchor and anchor chain. The defendants alone were responsible for securing the safety line and their failure to properly secure it caused the sinking. With respect to damages, the proper measure of damages is the value of the lost tug to the plaintiff as a going concern at the time and place of loss. This is to be assessed by considering the market value of comparable tugs, the costs of refitting tugs to do her work and the compensation required to put the plaintiff in the same position it would have been in had the loss not occurred.
Tug and Tow - Vicarious Liability of Vessel for Damage caused by Tug - Collisions - Limitation of Liability
Grieg Shipping A/S v. Fortune Marine Ltd. (The Dubai Fortune), 2012 FC 1110 2013 FCA 218
Précis: The Federal Court of Appeal confirmed the trial judgment that, in the circumstances, the vessel was not vicariously liable for the negligent acts of the master of the tug.
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: There was no reviewable error on the part of the trial Judge.
Carriage by Sea - Application of Hague-Visby Rules - In Rem Actions - Change of Ownership - Damage Done by a Ship
The Mercury XII (aka Wells Fargo) v. The MLT-3, 2012 FC 738 2013 FCA 96
Précis: The Federal Court of Appeal held that the hire of a tug and barge was not a contract of carriage to which the Hague-Visby Rules applied.
The plaintiff's truck was dumped into the water while being loaded onto a barge. At the time, the lines securing the barge to the loading ramp had been untied due to the rising tide. As a consequence, the barge moved away from the ramp when the truck was half on the barge. The driver of the truck applied the air brakes of the truck hoping to stop the movement of the barge away from the ramp but this was unsuccessful and the front end of truck became submerged. The parties then attempted to pull the truck onto the barge by attaching a line between the tug and truck. However, the truck tipped and sank. The plaintiff brought this action in rem against the barge and in personam against the owner/charterer of the tug and barge. In their defence, the defendants alleged the plaintiff was contributorily negligent and that there was no in rem action as the barge was not the instrument of damage. A further issue was whether the one year limitation period in the Hague-Visby Rules applied.
The trial Judge held (cited as Wells Fargo v The Barge "MLT 3", 2012 FC 738) that the defendants were 90% at fault and the plaintiff 10%. The defendants were negligent for loading the truck without having the mooring lines attached. The plaintiff was negligent for applying the air brakes. Concerning the existence of a claim in rem against the barge, the trial Judge held s. 22(2)(d) of the Federal Courts Act requires that "the ship itself must be the actual instrument by which the damage was done". As the barge was not the actual instrument of the damage, he held there was no claim under s. 22(2)(d) and no action in rem. With respect to the application of the one year limitation period in the Hague-Visby Rules, the trial Judge noted that section 43(2) of the Marine Liability Act provides that the rules apply to domestic carriage "unless there is no bill of lading and the contract stipulates that the Rules do not apply". The trial Judge held, however, that the lack of a bill of lading was sufficient by itself to oust the Rules. He said “oral contracts not evidenced by or incorporated into a bill of lading or similar document are not caught by subsection 43(2) of the Marine Liability Act”. The defendants appealed the ruling that that the one year limitation period in the Hague-Visby Rules did not apply.
Decision: Appeal dismissed.
Held: The trial Judge decided this issue on a grounds that had not been argued before him and the parties were in agreement that the Judge was wrong in holding that s. 43(2) of the Marine Liability Act limits the application of the Hague-Visby Rules to written contracts. The conclusion of the trial Judge was, nevertheless, correct. The appellant must prove all elements of s. 43(2) for the Rules to apply. The respondent argued that the contract was not “from one place in Canada to another place in Canada” since the contract was for a round-trip. This is “an unduly formalistic interpretation”. However, the respondent’s argument that there was no contract for the carriage of goods is accepted. A contract for the carriage of goods within the meaning of s. 43(2) does not include a contract for the charter or hire of a vessel. The plaintiff has not proven a contract for the carriage of goods. In fact, the evidence suggests a contract of hire rather than a contract of carriage. The contract was “for the use of the Tug and Barge” and charges were “on an hourly basis” regardless of whether there was cargo on the barge.
Comment: The parties also addressed whether the trial Judge had erred in holding the Hague-Visby Rules did not apply simply because no bill of lading had been issued. The Federal Court of Appeal did not address these arguments since it concluded the Rules did not apply on other grounds.
Wharfs – Safe Berth – Tug and Tow – Damage to Barge – Bailment Mercury Launch & T
Mercury Launch & Tug Ltd. v. Texada Quarrying Ltd., 2006 FC 464
The barge “MLT HWY” was damaged when she broke her moorings in extreme weather and grounded upon nearby rocks. The Plaintiff was the owner of the barge, which had been moored at the Defendant's facility for the loading of a cargo of crushed stone. The Plaintiff's tug, which had towed the barge to the facility, was moored to a buoy 0.75 miles from the facility awaiting the completion of the loading. The contract between the Plaintiff and the purchaser of the cargo, who was not a party, provided, inter alia, that the Plaintiff was to have the care, custody and control of the barge at all times. The Plaintiff alleged that the Defendant was a bailee of the barge and had the onus of proving the absence of fault on its part. The Plaintiff further alleged that the Defendant had failed to provide a safe berth, failed to provide sufficient mooring lines and failed to monitor the weather or advise it of developing bad weather. The Court noted that bailment involved a transfer of possession and required a high degree of physical control over the chattel and further noted that the Defendant had accepted the barge at its berth, had assumed responsibility for providing lines, had monitored and adjusted the lines, and maintained a barge loader at the berth to keep an eye on the barge. The Court further noted, however, that the Master of the tug knew he was responsible for deciding whether the barge should leave the berth because of bad weather and that the Plaintiff expected the Master to make this decision. The Court said that if the barge had been manned or if the tug had remained at the berth she would have had no difficulty in concluding there was not a bailment. The fact that the tug was 0.75 miles away and moored to a buoy did not alter this conclusion. In the Court's view “the keys to the barge were not delivered to” the Defendant and there was no bailment. The Court further said that even if there had been a bailment it would not have reversed the onus of proof as it was not a “pure bailment”. The Court next considered the various allegations regarding safe berth and negligence. The Court concluded that the berth was not unsafe merely because the barge had to be removed in bad weather as this was a well known fact. The Court rejected the other allegations of negligence, finding that the cause of the loss was the failure of the Master of the tug to monitor the deteriorating weather at the dock and his failure to remove the barge from the dock.
Charters– Bailment – Waiver of Subrogation
North King Lodge Ltd. v. Gowlland Towing Ltd. et al., 2005 BCCA 557
This matter concerned liability for the sinking of the barge “Sea Lion VI”. The barge had been hired by the Plaintiff, the owner of the barge, to the first Defendant, a logging company, for use as an accommodation barge at a remote logging camp. One of the terms of the agreement was that the owner would provide a watchman. When the logging operations had ceased the second Defendant, the towing company, was retained to remove the log booms. In doing so the crew of the tug untied the port side mooring lines of the “Sea Lion VI” which had been tied to the log booms. Shortly thereafter the “Sea Lion VI” went aground and sank. The trial Judge found as a fact that the removal of the port lines caused the sinking. The trial Judge held that the contract between the owner and the logging company was one of bailment and that the logging company was liable for failing to promptly advise the owner when it became apparent that the barge was in danger. The trial Judge further held, however, that because the owner was required by the contract to provide a watchman it had the primary responsibility for the safe moorage of the barge. With respect to the liability of the towing company, the trial Judge held that the owner had committed a trespass by tying the barge to the log booms and that the duty owed by the towing company to a trespasser was to not intentionally harm the Plaintiff, act recklessly or without common humanity. He held that although the towing company did not act with reasonable care it did not breach these duties. In the result, the action against the towing company was dismissed and the liability for the sinking was apportioned 80% to the Plaintiff and 20% to the logging company. The owner appealed the dismissal of the action against the towing company and the logging company appealed the finding that it was 20% liable. The British Columbia Court of Appeal dismissed the appeal by the owner and allowed the appeal by the logging company. The Court of Appeal rejected the argument that there was an implied permission to moor to log booms, agreed that the tying of the barge to the boom sticks was an act of trespass and agreed that the duty owed to a trespasser was to act with common humanity. The Court of Appeal held that this duty had not been breached by the towing company. With respect to the appeal by the logging company, the Court of Appeal disagreed with the trial Judge that there was a contract of bailment. The Court of Appeal held that there was no transfer of possession of the barge, that the logging company had a mere licence to use the barge and that the contract between the owner and the logging company was a time charter. The Court of Appeal further held that there was no implied term in the charter that the logging company was to inform the owner of any dangers to the barge. Such a term was inconsistent with the requirement that the towing company keep a watchman on the vessel and was neither reasonable, in the circumstances, nor required to make the contract effective.
Towage – Negligence – Benefit of Insurance – Betterment
Rough Bay Enterprises Ltd. v. Budden et al., 2003 BCSC 1796
The Plaintiff, the purchaser of a barge, sued the Defendants for negligence and breach of contract in the towage of the barge. The Plaintiff purchased the barge from the Defendant Budden for $90,000, paying a $5,000 deposit together with an initial payment of $42,500. The Defendant Budden agreed to tow the barge from Port Alberni to Campbell River with his fishing vessel for an additional sum. The balance of the purchase price was to be paid on delivery. The Plaintiff arranged with its insurer to add the barge to its insurance policy. The towage commenced but due to mechanical difficulties was interrupted at Bamfield. Discussions were then entered into between Budden and the Koprino Defendants for the Koprino Defendants to complete the tow with the fishing vessel “Koprino”. The Koprino Defendants advised Budden that they would complete the tow on the condition that the owners of the barge provide insurance for all parties. Budden agreed to this condition but he failed to advise the Plaintiffs of the condition and the Plaintiffs, therefore, did not obtain insurance protecting the Koprino Defendants. The “Koprino” took the barge in tow from Bamfield. At the time of departure the weather forecasts included gale warnings. The barge capsized off Port Renfrew and was later towed to Victoria, where it was repaired and substantially upgraded. The Plaintiff did not pay Budden the balance of the purchase price. The issues in the case included: whether the Defendants were negligent; if so, whether the Plaintiff's claim was barred by its failure to obtain insurance coverage for the benefit of the Defendants; and if not, what damages were attributable to the Defendants' actions. The Court held that the Plaintiff did not prove that the Defendants were negligent in deciding to leave Bamfield given the prevailing weather conditions or in continuing with the tow. The Court held that the capsize of the barge was due to localized storm conditions off Port Renfrew and that the Defendants were not negligent in failing to anticipate this. The Court found that the barge capsized because it was unseaworthy due to rot in its bow and stern planking. Notwithstanding the findings that the Defendants were not negligent the Court considered the insurance and damages issues. The Court found that there was an agreement to insure for the benefit of the Koprino Defendants and, even though this agreement was entered into between Budden and the Koprino Defendants, the Court held that Budden was acting as agent for the Plaintiff. Consequently, the Plaintiff's subrogated insurance claim was barred as against the Koprino Defendants but not as against Budden. With respect to damages the Court held that the repair costs should be depreciated by 25% to take into account betterment.
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.
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 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.
Tug and Tow - Pilotage Fees
Laurentian Pilotage Authority v. Techno Navigation Ltee., 998 CanLII 7968
The issue in this case was whether a tug and barge combination are exempt from the pilotage requirement imposed by the Laurentian Pilotage Authority Regulations passed pursuant to the Pilotage Act. At trial, the judge considered the regulations were "vague and imprecise" and held that both the tug and barge were exempt. On appeal, however, the Court of Appeal held that the trial judge had misread the regulations. The Court of Appeal agreed that the tug was exempt but held that the barge was subject to compulsory pilotage. The Court of Appeal further held that the Laurentian Pilotage Authority was entitled to take the dimensions of the tug into account when setting the pilotage charges for the barge.
Towage Conditions - Limitation Clauses
Primex Forest Products Ltd. v. Harken Towing Co., 1997 CanLII 4161
This case arose out of a collision involving a log tow and a bridge. As a consequence of the collision the log tow broke apart and the Plaintiff was required to pay for salvage. The Plaintiff claimed these expenses from the Defendant tug owner who alleged that it was not liable by reason of a set of standard towing conditions or, alternatively, that it was entitled to rely upon a limitation provision in the conditions. The issue in the case was whether these conditions were valid. The Plaintiff argued that the various clauses within the conditions were inconsistent and ambiguous and therefore of no force and effect. The Court agreed with the Plaintiff that the exclusion clauses within the conditions were inconsistent and of no effect, however, the Court gave effect to the limitation provision. In result, the Defendant was entitled to limit its liability to $500.
Towage Conditions - Limitation of Liability - Right of Tug to Limit
Meeker Log and Timber Ltd. et. al. v. The Sea Imp VIII, 1996 CanLII 2229
The British Columbia Court of Appeal rendered a short oral judgment from the bench dismissing an appeal and cross-appeal from the decision of Mr. Justice Peter Lowry, reported at 1 B.C.L.R. (3d) 320. The issues concerned the interpretation of standard towing conditions and limitation of liability pursuant to the Canada Shipping Act. The standard towing conditions were composed of multiple parts each of which contained a slightly different exclusion. They also incorporated parts of the Carriage of Goods by Water Act. The plaintiffs argued that the conditions when read as a whole, and with or without the incorporated provisions of the Carriage of Goods by Water Act, were so inconsistent and ambiguous that no effect could be given to them. The Trial Judge agreed and held the conditions were of no effect. On the limitation aspect of the case, the Trial Judge held that the tug owner was entitled to limit its liability as the cause of the accident was an error in navigation which the owner could not have guarded against. Both parties appealed. The Court of Appeal agreed with the Trial Judge's reasoning and dismissed both appeals. In result, the standard towing conditions were ruled invalid but the tug owner was entitled to limit its liability.
Tower's Legal Liability
Burrard Towing Co. v. Reed Stenhouse Limited, 1996 CanLII 1919 (BC CA)
This case involved the interpretation of a Tower's Legal Liability Policy. The facts were that a barge under demise charter to a tug company capsized while under tow and the cargo was lost. The barge was an insured vessel under the tug company's policy. The issue in the case was whether the tug company had legal liability coverage for the lost cargo. The policy contained an express exclusion for "liability in respect of cargo on board vessels insured herein ". It also, however, contained an endorsement which provided: "coverage is extended to include Legal Liability of the Assured...in respect of loss of, or damage to...her tow...or the property thereon... ". The Tug company argued that this endorsement extended the coverage to cargo on the barge notwithstanding the exclusion. The Court of Appeal held, however, that in interpreting the insurance policy it was necessary to distinguish between liabilities arising out of contracts of towage and those arising out of contracts of carriage. The Court held that the endorsement applied only to contracts of towage and not to contracts of carriage. It further held that, as the tug and barge were both supplied by the tug owner, the contract was one of carriage. Accordingly, the cargo exclusion applied and the Underwriters were not liable under the policy.
Towage Conditions - Agreement to Insure
St. Lawrence Cement Inc. v. Wakeham & Sons Ltd., 1995 CanLII 2482
This action involved a stranding of a barge due to the negligence of the tug. The towage contract specifically provided that the barge owner would be responsible for insurance on the barge and cargo and further provided that the towage was to be at the sole risk of the barge owner. At Trial, the Judge found that these provisions did not relieve the tug owner of liability for the loss. On appeal, however, the Court of Appeal held that the agreement to insure could have no purpose other than to relieve the tug owner of liability. It further held that the "sole risk" clause operated so as to relieve the tug owner from liability for negligence. In the course of its reasons the Ontario Court of Appeal suggested that the only basis upon which a tug owner could be held liable is in negligence and not as a bailee. (Editors Note: On the bailment issue, compare with Fraser River Pile & Dredge Ltd. v Empire Tug Boats Ltd.)
Capsize of Tug - Duty of Tug
Hamilton Marine & Engineering Ltd. v. CSL Group Inc., (1995), 95 F.T.R. 161
This matter involved the capsizing of a tug while it was assisting a larger vessel to undock. At issue in the case was the liability for the capsizing. The Federal Court Trial Division canvassed the rights and duties of tug and tow in such situations. It held that there is a presumption the tug is under the control of the tow and that the tow has a duty to ensure it does not cause damage to the tug. On the other hand, and notwithstanding that the tow is in command, a tug has the duty to look out for its own safety.
Liability - Collision - Duty to inspect tow
Fraser River Pile & Dredge Ltd. v. Empire Tug Boats Ltd., 92 F.T.R. 26, (F.C.T.D.)
The tug owner was held liable when the crane on a barge hit and damaged the Cambie Street bridge. The Court held the tug owner had a duty to inspect the tow, including the height of the crane, to ensure it was suitable for the intended voyage. The Court further considered the nature of the liability of a tug owner for an unmanned tow and questioned whether a tug could not be held liable in bailment for damage caused to an unmanned tow.