Miscellaneous Maritime Law Topics
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The database contains 25 case summaries relating to Miscellaneous Maritime Law Topics. 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.
Judicial Review of Permit Authorizing Artificial Reef – Dismissal for Delay
Save Halkett Bay Marine Park Society v. Canada (Environment), 2015 FC 302
Précis: An Application for judicial review of a decision authorizing the sinking of a destroyer to create an artificial reef was dismissed for delay and also on the merits.
Facts: The respondent had obtained a Disposal at Sea Permit from the Minister of the Environment to sink a decommissioned destroyer in the waters of Halkett Bay near Vancouver for the purpose of creating an artificial reef. The applicant filed an objection to the permit and ultimately commenced these proceedings for judicial review of the Minister’s decision. The issues were: (1) was the Application filed late? (2) Did the Minister fail to consider that the destroyer contained TBTs which are banned in Canada? and, (3) was the issuance of the permit unreasonable?
Decision: Application dismissed.
(1) Section 18.1(2) of the Federal Courts Act requires that an Application for judicial review be commenced within 30 days. This Application was filed more than two months beyond that time limit and is therefore filed late. The court does, however, have a discretion to extend the time limit. The relevant factors are whether: (i) there was a continuing intention to pursue the application; (ii) there is merit to the application; (iii) the other parties have suffered prejudice as a result of the delay, and (iv) there is a reasonable explanation for the delay. Here, there is substantial prejudice to the respondent from the delay and the delay has not been explained. Accordingly, the Application is dismissed for delay.
(2) The Applicant argues that TBTs are subject to a complete ban in Canada and that the Minister failed to take this into account. However, there is no such complete ban in the relevant statutes and the Minister was entitled to issue a permit.
(3) Finally, the Applicant argues the Minister’s decision was unreasonable in that: (i) the basis for the decision was not explained; (ii) the Minister failed to follow accepted protocols for the testing of anti-fouling paint; and (iii) the existence of any TBTs whatsoever in the hull required the permit be refused. However, the Minister was under no duty to issue detailed reasons for the decision separate and apart from the decision record and the permit itself. The record discloses the reasons of the Minister. Also, contrary to the submissions of the Applicant, the Minister did observe the accepted protocols for testing anti-fouling paint. Finally, there is no clear and compelling evidence that the vessel did contain TBTs and, in the absence of such evidence, the Minister’s decision is deserving of deference.
Damage to Yacht while being re-positioned - Is the contract one of carriage? - Jurisdiction of Quebec Courts
St. Paul Fire & Marine Insurance Company v. Vallée, 2015 QCCQ 1891
Précis: The Court of Quebec held that a contract to deliver a yacht by sea was a services contract and not a contract of carriage.
Facts: The plaintiff was the insurer of a yacht that was damaged while being re-positioned. The yacht owner contracted with the defendant to transport the yacht from Quebec City to the State of New York. The transportation involved the defendant taking possession of the vessel and sailing it to the destination. During the voyage the yacht was damaged. The plaintiff fully indemnified its insured and commenced these subrogation proceedings against the defendant. The defendant then brought this application to dismiss the action on the basis that: (1) the Quebec courts were without jurisdiction: and, (2) no notice of claim was provided within 60 days of delivery as required by art. 2050 of the Quebec Civil Code.
Decision: Application dismissed.
Held: (1) The Quebec Court has jurisdiction in admiralty and s. 22 of the Federal Courts Act does not operate to restrict that jurisdiction. (2) The contract was not a contract of carriage but a service contract and art. 2050 does not apply. In any event, notice is not required where, as here, the carrier notifies the property owner of the damage.
Comment: Although the plaintiff in this action was the insurer of the vessel, in the common law provinces it is not usual for an insurer to be named as the plaintiff in subrogation proceedings. In the common law provinces the insured is normally the named plaintiff.
Damage to Vessel Caused by Grinding Dust – Liability – Practice - Summary Judgment – Motion for Non-Suit – Joint and Several Liability
0871768 B.C. Ltd. v. Aestival (Vessel), 2014 FC1047
Précis: One of two defendants was found liable for damage caused to an adjacent vessel by grinding dust. As the damages were separate and divisible, it was not a case of joint and several liability.
Facts: The plaintiff commenced these proceedings for damage allegedly caused to his vessel by grinding dust, including metal particles, that spread from the defendant vessel. The plaintiff’s vessel had been on blocks next to the defendant vessel while grinding work was being carried out. The defendants were the owner of the defendant vessel and a repairer hired by that owner. The defendants denied liability. Shortly before trial the defendant owner brought an application for non-suit and/or no-evidence and, at the trial brought a motion to file affidavit evidence.
Decision: Judgment for the plaintiff against the defendant owner but not the repairer.
Held: With respect to the non-suit motion, there is doubt as to whether such a motion is compatible with a motion for summary judgment or summary trial but, in any event, the defendant owner did not comply with the time requirements for bringing such a motion. Moreover, even if the motion for non-suit had been properly brought, it would not succeed as the plaintiff has established a prima facie case. The defendant owner says there is no causal link between the grinding and the damage done to the plaintiff’s vessel but there is some evidence supporting causation and this is sufficient to dispose of the non-suit motion.
The defendant owner’s motion to file affidavit evidence is also dismissed. Non-suit rules require a defendant to elect whether to call evidence. If they elect to call no evidence, the non-suit motion is decided immediately and the defendant forfeits the right to call evidence.
The plaintiff has established the four elements necessary to support its claim against the defendant owner, those elements being: a duty of care; breach of the standard of care, causation and compensable damage. On the evidence there was a duty of care. The vessels were “neighbours” in close physical proximity and the defendants knew or should have known that the defendant vessel should be tarped before sanding or grinding. It was reasonably foreseeable that failure to contain debris would cause damage to other vessels. The standard of care is that expected of an ordinary, reasonable and prudent person in the same circumstances as the defendant. Grinding without a tarp or other containment mechanism was in breach of the standard of care. However, the evidence establishes that only the defendant owner was carrying out grinding on 26 July 2012 and only the defendant repairer was carrying out the grinding on 27 July 2012. Accordingly, the defendant owner breached the standard of care on 26 July and the defendant repairer breached the standard on 27 July. With respect to causation, the proper test is the “but for” test. The plaintiff must prove that “but for” the negligence of the defendant the damage would not have occurred. This burden has been met but, because the damages caused by the 26 July grinding are divisible and separate from the damages caused by the 27 July grinding, this is not a case of joint and several liability. Each defendant is liable only for the damages caused by their own negligent acts. The defendant owner is liable for the damage caused as a result of the grinding that occurred on 26 July. The defendant repairer would have been liable for any damage caused on 27 July but no damage was caused to the plaintiff’s vessel that day.
Judicial Review of Port Authority Decision Denying Application to Operate Tour Boat - Public Right of Navigation
Adventure Tours Inc. v. St. John's Port Authority, 2014 FC 420
Précis: The Federal Court upheld the decision of a Port Authority denying an application to conduct tour boat operations from port managed property.
Facts: The applicant had conducted tour boat operations in the Port of St. John's and in October 2001 requested that the St. John's Port Authority (the "Authority") permit it to renew its operations from port managed property. The Authority denied the request as it had implemented a policy in 2006 restricting the number of such operators to three, none of whom were the Applicant. The Applicant then brought a judicial review application to set aside the decision of the Authority. On motion by the Authority that application was struck on the grounds that there was neither a formal request nor an application made by the Applicant that could be the subject of judicial review (2012 FC 305). An appeal from that decision was dismissed on 22 January 2013 (2013 FC 55). In March 2013 the Applicant again requested permission to resume its tour boat operations from port managed property and the Authority again declined the request. The Applicant then brought this second judicial review application. The main issue was whether the Authority had the power to require that commercial tour boat operators be licensed.
Decision: Application denied.
Held: Pursuant to the Canada Marine Act and its letters patent, the Authority has the power to license operations relating to the carriage of passengers. Good management of a port requires that the activities of tour operators be licensed. The decision of the Authority is not ultra vires on the grounds that it is an infringement of the public right of navigation. The public right of navigation is not unrestricted. Parliament has the right to legislate in respect of navigation and shipping and is not restricted to using only one statute, the Canada Shipping Act, 2001, to so legislate. The Canada Shipping Act, 2001 may be the primary legislative vehicle used to regulate navigation and shipping but other legislation such as the Canada Marine Act can also be used.
Judicial Review – Application to Strike – Port Authority Powers
Adventure Tours Inc. v. St. John's Port Authority, 2012 FC 305 2013 FC 55
The applicant wrote to the St. John’s Port Authority advising he wished to resume providing a tour boat service and inquiring whether a licence was required. The Authority wrote back advising that they had agreements in place with tour boat operators and were not accepting any further applications. The applicant brought an application for judicial review arguing that the Authority had no right to require him to obtain a licence. The Authority brought this motion to strike the application.
Decision: The motion to strike was allowed.
Held: The letter from the Authority did not attract rights of judicial review.
Comment: A second issue in the case was whether the Authority was a federal body exercising a public function and therefore subject to judicial review. Although the Court did not need to address this issue, it held that the Authority was a federal body exercising a public function.
Note: an Appeal from this decision was reportedly dismissed at 2013 FC 55 but we have not been able to locate the decision on the Federal Courts website or CanLii. The appeal decision is referenced in the related case, Adventure Tours Inc. v. St. John's Port Authority, 2014 FC 420.
Ice Breaking Services Fee
The "Stormont" v. Canada, 2012 FCA 93
Précis: A challenge to an ice breaking services fee was dismissed.
The issue in this case was whether the ice breaking services fee in the Oceans Act applied to the defendants who operated a truck ferry service utilizing tug and barge between Windsor, Ontario and Detroit, Michigan. The defendants argued, inter alia, that they did not have to pay the fee as it was not applicable to international voyages and that the Minister did not have the power to impose such fees. The defendants’ argument turned upon the interpretation of the Oceans Act. The trial Judge rejected these and other arguments on the basis of simple statutory interpretation. The defendants appealed.
Decision: Appeal dismissed.
Held: The applicable sections of the Oceans Act and Fee Schedule authorized an ice breaking fee on each transit to or from a Canadian port. The Minister was both authorized and required to provide icebreaking services and was entitled to charge a fee for such services.
Canada Marine Act – Container Fee – Fair and Reasonable
Shipping Fed. of Cda. v. Vancouver Fraser Port Authority, 2012 FC 301
Précis: The court dismissed a challenge by ship owners to a container fee imposed under the Canada Marine Act.
This was an application for judicial review challenging the ability of the Vancouver Fraser Port Authority to impose a fee on ship owners for container cargo. Section 49 of the Canada Marine Act specifically requires that any fees charged be “fair and reasonable”. The applicants alleged the fee charged was not fair and reasonable as ship owners receive no benefit for the infrastructure improvements for which the fee was assessed. The applicants further argued that the fee was an illegal tax as it was unconnected with any service.
Decision: Application dismissed.
Held: The Court held that the fee was a charge connected with a regulatory scheme and therefore a regulatory charge and not a tax. The Court further held that there was no requirement to link the fee with a service or benefit.
Application to remove barge from Foreshore
Western Forest Products Inc. v. O'Brien, 2011 FC 1528
The plaintiff in this matter held a foreshore lease granted by the province of British Columbia over certain foreshore lands. The defendant was the owner of a barge anchored within the foreshore lease without the permission of the plaintiff. The plaintiff brought this action and application for an interlocutory injunction compelling the defendant to remove the barge. The Court granted the injunction. The Court held that there was a prima facie case of trespass, and that any right of riparian passage the defendant had did not include long term fixed moorage. The Court further said that injunctions are the presumed remedy in situations of trespass.
Arbitration – Application to Set Aside Award – Bias
New World Expedition Yachts LLC v. P.R. Yacht Builders Ltd., 2010 BCSC 1496
This was an application under the International Commercial Arbitration Act to set aside an award of an arbitrator relating to the construction of a ship. The applicant argued, inter alia, that the award should be set aside on the grounds that the arbitrator was biased. The bias allegations included that there were private communications with the arbitrator and that there was a close and familiar relationship between counsel and the arbitrator. With respect to the issue of private communications, the Court noted that the arbitrator was asked to act as both mediator and arbitrator and that any private communications took place in the context of the mediation. With respect to the relationship between the arbitrator and counsel, the Court noted that arbitrators are often chosen from practicing lawyers in a specialized area who know one another. The Court considered the fact that first names were used did not give rise to a reasonable apprehension of bias.
Arbitration - Appeal of Arbitral Award - Factors to be Considered
Lafarge Canada Inc. v. JJM Construction Ltd., 2010 BCSC 1168
The parties entered into four identical charter parties which required that disputes be settled by arbitration. Pursuant to the charter parties the charterer was to be liable for damage to the barges except for normal wear and tear and was also responsible for obtaining hull and machinery insurance naming the owner as an additional insured. The barges were returned with damage but not all of the damage was covered by the insurance that had been obtained by the charterer. At the arbitration the charterer argued that the agreement to insure relieved it of liability to pay the repair costs for the uninsured damage. The arbitrator disagreed, ruled in favour of the owner and ordered the charterer to pay damages of $650,000. The charterer then brought this application under the Commercial Arbitration Act of British Columbia for leave to appeal the arbitrator's decision. The Motions Judge considered the various factors relevant to an application for leave to appeal an arbitral award, namely, whether the issue was question of law and the importance of the issue to the parties or public. The Motions Judge held that the issue on appeal was a question of law that raised an important matter of principle and was of considerable financial consequence to the parties. The Judge further held it was not necessary for the applicant to show the arbitrator was "obviously in error". The test is whether there is sufficient substance to the proposed appeal to warrant its proceeding. In result, the Motions Judge allowed the application.
Harbour Dues - Unlawful Tax
Algoma Central Corporation v. Canada, 2009 FC 1287
The issue in this case was the validity of harbour dues in respect of public (regional) ports under the Canada Marine Act. The first issue was whether the case ought to have been brought by way of judicial review proceedings. The Court held that the case should have been so brought but nonetheless decided to hear the case on the merits. The second issue concerned whether the case was appropriate for summary judgment and the Court held that it was. The third issue was the validity of the harbour dues. The plaintiff‟s argument was that the dues were in the nature of a tax since the government provided no services and that pursuant to s. 53 of the Constitution Act only Parliament had the authority to levy a tax. The Court reviewed the Act and noted that the Minister‟s authority to charge fees was not contingent on services being provided. The Court further reviewed the relevant authorities on the distinction between a regulatory charge and a tax and held that the dues were a regulatory charge. The final issue was whether the practice of not charging similar dues to U.S. ships was discriminatory. On this issue the Court held that the Minister had broad discretion to distinguish between different users and that the exercise of this discretion was not a grounds to invalidate the dues.
Purchase Survey - Liability of surveyor
Perera v. De Groot et al, 2006 BCSC 1281 2007 BCCA 242
In this matter the plaintiffs alleged that a surveyor retained to perform a pre-purchase survey of a sailing vessel had negligently failed to inform them of existing dry rot in the vessel. Approximately one year after the survey,the plaintiffs hired a second surveyor who found extensive dry rot in the vessel. At trial (2006 BCSC 1281) the Trial Judge found that the rot existed at the time of the initial survey and that the surveyor was negligent in not finding it and reporting it. The Judge awarded the plaintiffs the value of the vessel less salvage plus insurance costs and $3,000 for loss of use. On appeal (2007 BCCA 42), the Court of Appeal held that there was no evidence upon which the Trial Judge could conclude that the rot existed at the time of the initial survey. Accordingly, the appeal was allowed and the claim against the surveyor dismissed.
Port State Control – Wrongful Detention – Liability of Steamship Inspectors
Canada v. Berhad, 2005 FCA 267
This matter concerned the liability of Canada Steamship Inspectors for their alleged negligence and wrongful detention of the vessel “Lantau Peak”. The facts were that the “Lantau Peak” arrived at Vancouver on 5 April 1997. It was intended to repair hull frames found to be detached during the voyage from Japan and then to load a cargo of coal. Upon arrival the vessel was inspected by Canada Steamship Inspectors and was ordered detained as a measure under Port State Control for safety at sea. The reason for the detention was that the hull frames were wasted and corroded beyond the acceptable limit of 17%. The owner objected to the detention but ultimately repaired the vessel to a lesser standard. The ship remained in detention until 17 August 1997 notwithstanding that the vessel met its classification requirement and its flag state petitioned for its release. The primary defence to the claim of the Plaintiff was that the inspectors were acting under a statutory authority given by the Canada Shipping Act and were therefore immune from suit. At trial the Judge held that the provisions of Canada Shipping Act and Regulations, in particular s. 310 authorizing detention of vessels, did not apply to foreign flag vessels engaged on international voyages. He found that the detention was pursuant to the Tokyo Memorandum of Understanding on Port State Control, with reliance on the Safety of Life at Sea Convention, however, the MOU did not have the force of law and could not be considered a “legal authority” to detain a ship. The trial Judge found the Defendants had been negligent in failing to conduct a detailed inspection of the ship, in the reporting of observations and evidence to the Chairman of the Board of Steamship Inspectors, in failing to properly supervise inspectors and by unduly delaying the review of the detention order. In result, the trial Judge found the Defendants liable for damages plus interest in the amount of almost $6 million. On appeal, the judgment of the trial Judge was set aside. The Federal Court of Appeal held that s. 310 of the Act did apply and authorized the detention of foreign ships. The Court of Appeal further held that decisions of Steamship Inspectors are discretionary and that the standard of review of such decisions is at least one of reasonableness. (Indeed, the Court of Appeal noted that strong arguments could be made in support of a standard of patent unreasonableness.) The Court of Appeal held that a “decision will be unreasonable only if there is no line of analysis within the given reasons that could reasonably lead the tribunal from the evidence before it to the conclusion at which it arrived” and further noted that deference should be given to the expertise and experience of Steamship Inspectors. Applying this standard and after extensively reviewing the evidence, the Court of Appeal held that the actions of the Steamship Inspectors were reasonable and the detention of the ship was proper. In concluding, the Court of Appeal said: “The trial judge did not have the power to review the merits of the decisions taken by the Steamship Inspection Service and the Chairman, and to substitute his views for theirs as to safety. It belonged to them, not to the court, to appreciate the acceptability of the risk to human life and the marine environment.”
Pilotage – Ferries
Navigation Madeleine Inc. v. Canada,  FCA 10
The issue in this case was whether the ship “C.T.M.A. Vacancier” which operated on a route from the Iles-de-la-Madeleine to Montreal was a “ferry” within the meaning of the Pilotage Act and the Laurentian Pilotage Authority Regulations and therefore exempt from compulsory pilotage. The Federal Court of Appeal reviewed the relevant statutory provisions and dictionary definitions of “ferry” and concluded that the exemption was for traditional “ferry” vessels whose routes cut across the navigation channels in the St. Lawrence River. The “C.T.M.A. Vacancier”, in contrast, travelled over 340 miles following the channel throughout its length and was, therefore, not exempt from compulsory pilotage.
Fire – Res Ipsa Loquitur – Damages
Strachan v. The “Constant Craving” et al., 2003 FCT 86
This was an action by the Plaintiffs against the Defendants in negligence for damage caused to the Plaintiffs' vessel when the Defendant's vessel caught fire. The Plaintiffs established through expert evidence that the cause of the fire was the ignition of gas fumes in the Defendant's vessel. The source of the fumes was a rusted gas tank and the source of the ignition was an automotive battery charger. The Court considered the application of the res ipsa loquitur doctrine but concluded that the issue of the Defendant's negligence had to be determined on the evidence. The Court, however, had little difficulty in concluding the Defendant was negligent. On the issue of damages the Court held that the Plaintiffs were entitled to recover both the cost of repairs and the diminution in value of their vessel. Additionally, the Court awarded the Plaintiffs $1,500 each in damages for loss of use of their vessel. Finally, the Court considered whether the collateral benefit rule ought to apply to reduce the Plaintiffs' damages. This was an issue because the repair costs were initially paid by the Plaintiffs' insurer but, in subsequent proceedings between the insurers and the Plaintiffs, the insurers relinquished their right of subrogation. Thus, the Plaintiffs stood to be reimbursed twice for the cost of repairs. The Court held that this was a matter of private insurance which was a recognized exception to the collateral benefit rule.
Refund of Excise and Sales Tax on Diesel Fuel
Seaspan International Ltd. v. Canada, 2002 FCT 675
This case concerned the interpretation of section 23(8)(c) of the Excise Tax Act and in particular whether the Plaintiff was entitled to a refund of tax paid on diesel fuel used to generate electricity on board its vessels. The Court held that the Plaintiff was entitled to a refund of tax.
458093 BC Ltd. v. Dietterle et al., 2001 FCT 823
This case concerned the interpretation of an agreement between the Plaintiff and Defendant relating to the roe herring fishery. The Plaintiff alleged an agreement between it and the Defendant fishermen the terms of which required the Plaintiff to lease the Defendant fishing licences and to provide specific services such as packing and trucking. In return, the Defendant would fish exclusively for the Plaintiff. The agreement further specified how the profits from the fishing would be split between the parties but was silent on what would happen in the event of a loss. Precisely such an event occurred after the 1997 fishery and the Plaintiff sought to recover from the Defendant a portion of the loss. The Prothonotary dismissed the Plaintiff’s claim holding that there was no provision in the contract imposing personal liability on the foss and that the Plaintiff had failed to establish a “long standing and consistent practice” that such losses were shared.
Wage Claims - Set-off
Prior v. The "Talapus", 2000 CanLII 15911
This was an action for unpaid seaman’s wages. The Defendant defended the claim, inter alia, on the basis that a set-off should be made for food and accommodations supplied to the crew. The Court did not allow the set-off for these items as the evidence did not support that they were to be an agreed deduction.
Marine Navigation Fees
Canadian Shipowners Assoc. v. Canada, 1998 CanLII 8429
This was an appeal of a decision of the Trial Division in which the trial judge upheld the validity of the Marine Navigation Service Fees Regulations passed pursuant to the Financial Administration Act. The regulations provide for the payment of fees by commercial shipping, domestic and foreign, for marine navigation services provided by Canadian Coast Guard. The regulations were imposed as part of a policy of cost recovery instituted by the Government of Canada. The applicants argued that the regulations were not authorized by the Financial Administration Act, were discriminatory and were, in essence, a tax on commercial shipping. The trial judge, however, held that the regulations were made for valid reasons and in good faith and that the enabling statute impliedly authorized the creation of classes of users and the power to include or exclude certain types of ships from the payment of fees. The trial judge further held that the fees were not a tax and noted that the fees collected would not exceed the cost of providing the services. On appeal, the Court of Appeal in a short judgement indicated their approval of the reasons of the trial judge and dismissed the appeal.