Précis: The Federal Court of Appeal upheld a decision of the Federal Court that: (1) the Crown was not liable for damages caused to a ship running aground on an un-charted shoal in the Arctic when the shoal had been the subject of a Notice to Shipping; and (2) the ship was liable to the Crown for the costs of pollution abatement.
Facts: The “Clipper Adventurer”, a small cruise ship, ran aground in the Canadian Arctic on 27 August 2010 while en route from Port Epworth to Kugluktuk. The shoal had been the subject of Notice to Shipping A102/07 issued in September 2007 but it had not been marked on the applicable chart. The chart being used by the vessel had been issued by the Canadian Hydrographic Service on 30 May 1997 and had been updated/corrected with Notices to Mariners but not with Notices to Shipping. The Canadian Hydrographic Service had intended to replace the Notice to Shipping with a Notice to Mariners but due to an apparent miscommunication this was not done.
As a consequence of the grounding, a number of the vessel’s double-bottomed tanks were breached resulting in a small amount of pollution. The vessel was re-floated on 14 September 2010, underwent temporary repairs in Canada and then sailed to Poland for permanent repairs. The plaintiff, the owner of the “Clipper Adventurer”, commenced this action against the Crown for the Canadian dollar equivalent of approximately US$13.5 million alleging that the Canadian Coast Guard and Canadian Hydrographic Service had failed to properly warn mariners of the danger and were in breach of their SOLAS obligations to publish, disseminate and update nautical information. The Crown counter-claimed under the Marine Liability Act and the International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001 for the costs and expenses incurred to prevent, repair, remedy or minimize oil pollution damage in the amount of CDN$468,000.
At trial, the action by the owner of the “Clipper Adventurer” was dismissed and the counter-claim of the Crown was allowed. The trial Judge held:
– There was no duty on the Crown to seek out and chart unchartered shoals but, once the presence of the shoal became known, the Canadian Coast Guard and Canadian Hydrographic Service were under a duty to warn mariners of its presence;
– The issuance of the Notice to Shipping A102/07 was sufficient to discharge the duty to warn imposed on the Crown. Pursuant to section 7 of the Charts and Nautical Publications Regulations, 1995 (SOR/95-149), it is the responsibility of Masters to ensure all charts “are correct and up-to-date based on information that is contained in Notices to Mariners, Notices to Shipping and radio navigation warnings”;
– The crew of the “Clipper Adventurer” were negligent in that they should have known there were unchartered shoals and should have proceeded at a slower speed; and
– With respect to the counter-claim of the Crown, liability does not depend on proof of negligence. Pursuant to section 77(3) of the Marine Liability Act, to escape liability the shipowner must establish that the occurrence was wholly caused by the negligence or other wrongful act of a government authority. Thus, even if there was contributory negligence on the part of the Crown, the shipowner would still be liable in full.
The ship owner appealed the finding that the issuance of Notice to Shipping A102/07 was sufficient to discharge the Crown’s duty to warn and also appealed a minor issue relating to interest.
Decision: Appeal dismissed.
Held: The appellant does not challenge the finding that it was negligent but only the finding that the publication of Notice to Shipping A102/07 was sufficient to discharge the Crown’s duty to warn. The appellant argues that this finding is an extricable error of law and therefore subject to the standard of review of correctness. This is not correct. Questions involving the standard of care are normally mixed questions of law and fact and reviewable only if there is a palpable and overriding error. Additionally, there is no issue of the trial Court having improperly characterized the legal test before it. The trial Court clearly understood the issue was whether Notice to Shipping A102/07 satisfied the Crown’s duty to warn. The trial Court held that it did and there was ample evidence to support this conclusion.
One final issue concerned whether the trial Court correctly held that the interest rates under s. 116(1) of the MLA did not apply to the claim of the Crown. Section 116 only applies to claims under Part 7 of the MLA involving the Ship Source Oil Pollution fund. It has no application to a direct claim by the Crown against a shipowner.