Gundersen v. Finn Marine Ltd.

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.)