Carriage of Passengers
IntroductionThe carriage of passengers is regulated by Part 4 of the Marine Liability Act which implements the 1974 Athens Convention relating to the Carriage of Passengers and their Luggage by Sea and the 1990 Protocol and introduces special Canadian amendments. The operative section is Section 37 which gives the Convention and Protocol the force of law in Canada. ApplicationArticle 2 of the Athens Convention provides that the provisions of the conventions apply to: (a) any international carriage if the carrying “ship” is flagged or registered in a State party to the convention, (b) the “contract of carriage” is made in a State party to the convention, or (c) the place of departure or destination is, according to the contract of carriage, in a State party to the convention. The terms “ship” and “contract of carriage” are defined terms under the Athens Convention. “Ship” is defined as a seagoing vessel. “Contract of carriage” is defined as a contract for the carriage by sea of a “passenger”. “Passenger” is in turn defined as any person carried in a “ship”. The net effect of these definitions and Article 2 is that the Athens Convention applies of its own force only to international contracts for the carriage of passengers in seagoing ships. This application was considered too narrow for Canada and was therefore expanded by sections 36 and 37 of the MLA . Section 36 expands on the definition of ship to include ships of all types, whether seagoing or not. The effect of this change in definition is to make the Convention applicable to the carriage of passengers on inland lakes and rivers. Section 37(2)(a) expressly makes the Convention applicable to contracts for the domestic carriage of passengers as well as international carriage. Section 37 (2)(b) further extends the application of the convention by dispensing with the requirement that there be a contract of carriage in the case of persons (excluding the Master, crew or employees) carried on ships operated for a commercial or public purpose. This is achieved through the following strangely worded provision: 37(2) Articles 1 to 22 of the Convention also apply in respect of... (b) the carriage by water, otherwise than under a contract of carriage, of persons or of persons and their luggage, excluding (i) the master of a ship, a member of a ship’s crew or any other person employed or engaged in any capacity on board a ship on the business of the ship, and (ii) a person carried on board a ship other than a ship operated for a commercial or public purpose. The first clause of section 37(2)(b) extends the application of the Convention to the carriage of all persons regardless of whether there is a contract of carriage. The use of the term “persons” and the discarding of the requirement that there be a contract of carriage make the Convention applicable to virtually every person on board a ship for whatever reason. It is for this reason that the qualifiers in 37(2)(b)(i) and (ii) are introduced. Section 37(2)(b)(i) states that the Convention does not apply to the master or crew of the ship or other persons employed on board the ship. Section 37(2)(b)(ii) is intended to ensure that the Convention does not apply to persons carried on board pleasure craft. In summary, the combination of Article 2 of the conventions and sections 36 and 37 of the MLA make the Convention applicable to both domestic and international carriage of passengers in ships of all sorts on inland lakes and rivers as well as the high seas. In addition, persons (not being master, crew or employees) on board ships used for commercial or public purposes are governed by the Convention regardless of the existence of a contract of carriage. Liability and Burden of ProofPursuant to Article 3, the carrier under the Athens Convention is liable for damages suffered due to the death or personal injury of the passenger or for the loss of or damage to the passenger’s luggage where (1) the incident which caused the damage occurred during the course of carriage and (2) the damage was due to the fault or neglect of the carrier or his servants or agents acting within the scope of their employment. The burden of proving the incident which caused the damage occurred during the course of carriage is on the claimant. In cases of shipwreck, collision, stranding, explosion, fire or defect in the ship, the fault or neglect of the carrier is presumed. Similarly, for claims in respect of loss of or damage to luggage the fault of the carrier is presumed. In all other cases, the burden of proving the fault or neglect of the carrier is on the claimant. Who is LiableThe Athens Convention recognizes that there are often two types of carriers, contracting carriers and performing carriers, and makes both liable. The term “carrier” is defined in Article 1(a) as the person by or on behalf of whom a contract of carriage has been concluded regardless of whether the carriage is performed by him or a performing carrier. The term “performing carrier” is defined as the person who actually performs all or part of the contract of carriage. Pursuant to Article 4, where there is both a contracting and performing carrier, the “carrier” (ie. the contracting carrier) remains liable for the entire carriage. Further, pursuant to Article 4(2) the contracting carrier is made liable for the acts and omissions of the performing carrier. The liability of the “performing carrier” is invoked by Article 4(1) which makes the “performing carrier” subject to and entitled to the provisions of the Convention for that part of the carriage performed by him. Article 4(4) provides that where both the contracting and performing carriers are liable their liability is joint and several. Limitation of LiabilityThe carrier under the Athens Convention is given the right to limit his liability. Article 7 provides that the maximum liability of the carrier for the death of or personal injury to a passenger is 175,000 SDR (approximately C$350,000). Article 8 provides that the maximum liability of the carrier for loss of or damage to cabin luggage is limited to 1,800 SDR (C$3,600) and to 10,000 SDR (C$20,000) for loss of or damage to a vehicle including all luggage carried in the vehicle. Other types of luggage are subject to a limitation of 2,700 SDR (C$5,400) per passenger per carriage. (Note: All SDR amounts are converted to Canadian dollars at a rate of 1 SDR= C$2.) The above limits are individual limits applicable to claims by individual passengers. In the case of claims by multiple passengers, the carrier may seek the right to limit liability to a global figure pursuant to Part 3 of the MLA and the 1976 Convention on Limitation of Liability. Article 19 of the Athens Convention would appear to preserve this right in the carrier. Loss of Right to LimitArticle 13 provides that the carrier will lose his right to limit liability where it is proved that the damage resulted from an act or omission done with intent to cause damage or recklessly and with the knowledge that such damage would probably result. Notice ProvisionsArticle 15 prescribes a notice provision for claims for the loss of or damage to luggage. For “apparent” damage, the passenger is required to give written notice of such damage at the time of disembarkation for cabin luggage or the time of re-delivery for other luggage. In the case of loss of luggage or damage that is not “apparent”, the passenger must give written notice within 15 days from the date of disembarkation or re-delivery. In the absence of written notice, the luggage is presumed to have been received in good condition. Prescription/ Time LimitationArticle 16 prescribes the applicable limitation periods. In the case of personal injury or loss of or damage to luggage the limitation period is two years from the date of disembarkation. In the case of death of the passenger during the carriage the limitation period is two years from the date the passenger should have disembarked. In the case of a death resulting after disembarkation due to a personal injury received during the carriage, the limitation period is two years from the date of the death but shall not exceed three years from the date of disembarkation. JurisdictionArticle 17 prescribes the jurisdictions in which a claim under the Convention must be brought. Those jurisdictions are: the place where the defendant has his permanent residence or principal place of business; the place of departure or of destination under the contract; the place where the claimant is domiciled or has permanent residence provided the defendant also has a place of business in that State; or the place where the contract of carriage was made if the defendant has a place of business in that State. Exclusion ClausesPursuant to Article 18 of the Convention any contractual provision that tends to relieve the carrier of his liability or to fix a lower limit of liability than that prescribed shall be null and void. Similarly, any provision tending to shift the burden of proof which rests upon the carrier or to restrict the claimants right to commence proceedings in the specified jurisdictions is null and void. Case SummariesSynopsis of significant developments in 2007-2008 There have been a number of cases of interest in 2007-2008 relating to the carriage of passengers. Russell et al. v. MacKay, 2007 NBCA 55 and Frugoli c. Services Aériens des cantons de L'Est inc., 2007 QCCS 6203 confirm that the limitation periods for passenger claims are to be found in the Marine Liability Act and Athens Convention and further hold that there is no power to extend such limitation periods. Gundersen v. Finn Marine Ltd., 2008 BCSC 1665 is of interest in that it holds that the Athens Convention will apply domestically to a non-paying guest onboard a vessel used for commercial purposes and it also confirms the very heavy onus on a plaintiff who wishes to challenge the defendant’s right to limit liability. Finally, McDonald v. Queen of the North (Ship), 2008 BCSC 1777 is the first case to hold that dependents claiming under the Marine Liability Act and Athens Convention may not claim punitive, aggravated or exemplary damages. Personal Injury - Athens Convention - Limitation Period - No Power to Extend - Applicable Law Russell et al. v. MacKay, 2007 NBCA 55, reversing in part 2006 NBQB 350 The Plaintiff was a passenger on a whale watching vessel and was injured at sea when she tripped over a cooler while leaving the washroom on the vessel. The accident occurred on 3 August 2003 but action was not commenced until 20 July 2006. The Defendants brought this motion to dismiss the Plaintiff's claim on the grounds that it was statute-barred by the two year limitation period in the Athens Convention as enacted by the Marine Liability Act. The Plaintiff argued that the applicable limitation period was six years as provided the New Brunswick Limitation of Actions Act. Alternatively, the Plaintiff argued that the Court had the discretion to suspend or interrupt the running of the limitation period. The trial Judge concluded that the Plaintiff's claim was in pith and substance in relation to navigation and shipping and governed by federal Canadian maritime law and not the provincial limitations statute. The trial Judge then considered whether the court had a discretion to suspend or interrupt the running of the limitation period. The trial Judge referred to art. 16(3) of the Athens Convention which provides that “The law of the court seized of the case shall govern the grounds of suspension and interruption of limitation periods...”. The trial Judge held that the phrase “law of the court seized of the case” referred to Canadian maritime law and not the law of New Brunswick. The trial Judge noted that a three part test had been established to determine when an extension of a limitation period should be made under s. 572(3) of the Canada Shipping Act and that this was the appropriate test to apply. The test was: 1. did the Plaintiff have a valid prima facie case; 2. was the Defendant aware of the claim and would it suffer prejudice by an extension, other than the loss of the limitation defence; and 3. having regard to all the circumstances, was it in the best interest of justice that time be extended. Applying this test the trial Judge held it was in the best interests of justice that the limitation period be interrupted or extended On appeal to the New Brunswick Court of Appeal, the Court of Appeal agreed with the trial Judge that the case was to be governed by federal maritime law and further agreed that the limitation period was to be found in the Athens Convention but disagreed with respect to the powers of the court to suspend or extend the limitation period. Specifically, the Court of Appeal said that the trial Judge erred in relying upon and applying the test flowing from the old s. 572(3) of the Canada Shipping Act which dealt with collisions between ships (as does its successor in s.23 of the Marine Liability Act ) not injuries to passengers. The Court said that Art. 16 of the Athens Convention did not include any power to extend the limitation period and held that superior courts do not have inherent powers to extend limitation periods. The Court of Appeal next considered the meaning of Art. 16(3) and noted that the reference to the law of the court seized of the case did not imply such law would necessarily provide grounds for suspension or interruption. The Court held that there was no federal legislation that would provide grounds for suspension or interruption. Finally, the Court considered whether the law should be reformed to include a power to suspend or interrupt a limitation period and suggested, without deciding, that 1) waiver; (2) estoppel; (3) absence from the jurisdiction; (4) infancy; and (5) mental incompetency might be grounds. However, as the evidentiary record supported none of these grounds, the matter was not decided. Carriage of Passengers - Fatal Accident - Limitation Period - Applicable Law - Athens Convention - Extension Frugoli c. Services Aériens des cantons de L'Est inc., 2007 QCCS 6203 This was an action by dependents of two persons who werepresumed drowned when the boat they were in capsized. The boat had been chartered and operated by the Defendant. The issue was whether the limitation period was the three year period prescribed in the Quebec Civil Code, the two year period prescribed by s. 14(2) of the Marine Liability Act (MLA”) or the two year period as prescribed by Art. 16(2) of the Athens Convention as enacted by the MLA. Due to a mistake by Plaintiff’s counsel, the action was commenced more than two years after the accident but less than three years. The Court reviewed the various authorities and held without much difficulty that the claim should be subject to federal maritime law and not the Quebec Civil Code. The Court next considered whether it was the two year period in the MLA or the two year period in the Athens Convention that applied and whether the period could be extended. The issue was relevant because Art. 16(3) of the Athens Convention provides that “the law of the court seized of the case shall govern the grounds of suspension or interruption” of the limitation period. The Court held that the “law of the court seized of the case” meant Canadian maritime law. The Court then thoroughly reviewed the authorities and ultimately held that there was no discretionary power to extend the limitation period under maritime law except with respect to collision action governed by s. 23 of the MLA. Finally, the Court was of the view that in any event an error of counsel was not sufficient grounds for interruption or suspension of the limitation period in the circumstances. Carriage of Passengers - Athens Convention - Collision - Personal Injury - Limitation of Liability Gundersen v. Finn Marine Ltd., 2008 BCSC 1665 The Plaintiff was seriously injured when the vessel in which she was riding ran into Salt Spring Island. The vessel was a commercial water taxi and at the time of the accident it was on its way to pick up passengers. The Plaintiff, however, was not a paying passenger but was onboard as a non-paying guest. The Judge found as a fact that the incident occurred when the operator of the vessel fell asleep. The Defendants, the owner and operator of the vessel, applied for an order that they were entitled to limit their liability pursuant to Part 4 of the Marine Liability Act (“MLA”) dealing with carriage of passengers. The Plaintiff argued that the applicable limitation was found in Part 3 of the MLA, which would have been a substantially higher limitation. The Plaintiff also argued that the Defendants conduct was such that they had lost the right to limit. Dealing with the first issue the Judge agreed with the Defendants and held that the right to limit was to be found in Part 4 of the MLA and the Athens Convention. In so doing the Judge applied s.37(2) of the MLA which extends the Athens Convention “to domestic gratuitous passengers on a vessel operated for a commercial purpose”. The Judge next turned to the issue of whether the Defendants had lost the right to limit by reason that “the damage resulted from an act or omission of the carrier done with the intent to cause such damage, or recklessly and with knowledge that such damage would probably result”. The Judge noted that the onus of proof was on the Plaintiff, that it was a “heavy” onus, and that the reckless component required gross negligence and actual knowledge that the loss would probably result. The Judge ultimately held that the accident was not intentional, that the conduct of the operator was not gross negligence and that, in any event, the Plaintiff failed to establish that the operator knew the Plaintiff’s injuries would probably result. In result, the Defendants were entitled to limit their liability. (Note: If the vessel had been a pleasure craft being used for pleasure purposes then it is probable that Part 3 of the MLA would apply instead of Part 4.) Ferry Sinking - Athens Convention - Certification of Class Action Kotai v. Queen of the North (Ship), 2007 BCSC 1056 This was an application to certify a class action on behalf of passengers (and their dependants) of the Queen of the North which sank after running into Gill Island on 21 March 2006. The Court reviewed the requirement for certifying a class action under the Class Proceedings Act of British Columbia. These are: 1. there is a cause of action; 2. there is an identifiable class; 3. there are common issues; 4. a class proceeding is the preferred procedure for the fair and efficient resolution of the common issues; and 5. there is a representative plaintiff who can fairly and adequately represent the class interest, has a workable litigation plan and is not in conflict of interest with other class members. The Court found that all of the requirements had been met except those requirements relating to a representative plaintiff. Thus the application was adjourned so an appropriate representative plaintiff could be found. (Note: This issue was later overcome and the class action was subsequently certified.) Ferry Sinking – Athens Convention -Fatal Accident - Juries - Severance of issues Kotai v. Queen of the North (Ship), 2008 BCSC 1398 This was another application arising out of the sinking of the Queen of the North on 21 March 2006. This was an application by the ship owner for various relief including striking the jury notice. The ship owner argued, among other things, that the case was not appropriate for determination by a jury because the principal question in the action would be the construction of Article 13 of the Athens Convention relating to limitation of liability. The Court, however, noted that there is heavy burden to displace the plaintiff’s right to have a trial by jury and held any issues of construction could be separated from issues of fact. Fatal Accident – Dependents Claims – Marine Liability Act - Athens Convention - Availability of Punitive and Aggravated Damages McDonald v. Queen of the North (Ship), 2008 BCSC 1777 This is the final reported decision arising out of the sinking of the Queen of the North. The issue in this matter was whether punitive and aggravated damages are recoverable in a wrongful death action brought by dependents pursuant to the Marine Liability Act and the Athens Convention. The Court extensively reviewed the case law relating to the recovery of punitive and aggravated damages under wrongful death statutes. The Court concluded that claims under the Athens Convention and the Marine Liability Act are compensatory in nature and do not permit the recovery of punitive or exemplary damages. The Court further held that the Marine Liability Act did not permit recovery of aggravated damages. The Court also considered and declined a request by the Plaintiff to reform Canadian maritime law by permitting claims for punitive and aggravated damages in these circumstances. Carriage of Passengers – Jurisdiction Clause – Athens Convention Friesen v Norwegian Cruise Lines et al., 2003 BCSC 256 This was an application by the Defendant to stay proceedings commenced in British Columbia on the grounds of a jurisdiction clause contained in the passenger ticket. The Plaintiff, a British Columbia resident, was injured on an Alaskan cruise ship which had departed from the port of Vancouver. The Plaintiff argued that the matter was governed by the Athens Convention; Article 17 of which gave her the right to commence the proceedings in British Columbia. The Court, however, held that the Athens Convention was not applicable since Canada had not enacted the Convention at the time of the Plaintiff's accident. Moreover, the fact that the vessel was registered in the Bahamas, a signatory to the Convention, was held to not be sufficient to make Bahamian law applicable. The Court therefore held that the test set out in The Eleftheria, [1969] 2 All E.R. 641, was applicable and the onus was on the Plaintiff to establish a strong cause for not enforcing the jurisdiction clause. The Court held that the Plaintiff had met this onus in that virtually all of the witnesses resided in British Columbia and a stay of the action in favour of Florida would come close to denying the Plaintiff access to a court at all. Failure to Warn Efford v Bundy (January 24, 1996) Victoria Registry No. 1158/92 (B.C.S.C.) In this matter the Plaintiff was injured on board a rigid hull inflatable boat while whale watching off Tofino, British Columbia. The Plaintiff injured her back when the bow of the boat came down hard when crossing the wake of a large fishing vessel. The Plaintiff alleged the Defendant was negligent in his operation of the boat and in failing to warn of the danger. The Court found that the Defendant had operated the boat in accordance with accepted safe boating practices but it also found that the Defendant had failed to adequately warn the Plaintiff. Specifically, the Court held that it was not sufficient that the Defendant had advised the Plaintiff that the bow seat was the roughest and that people with back problems should sit further back. The Court held that the Defendant should also have instructed passengers with respect to the location of safe handholds and the way in which to brace themselves. Nevertheless, the Plaintiff was found 75% at fault because she had a prior back problem and had been warned by her doctors to avoid heavy lifting. For the full text of this decision, click here.
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