Précis: The B.C. Court of Appeal affirmed the decision of the lower Court to restore a company without prejudice to rights acquired in the interval between dissolution and restoration.
Facts:The Province of British Columbia (the “Province”) appealed against an order of the B.C. Supreme Court ( BCSC 793) that restored the registered corporate owner of the vessel Chilcotin Princess (the “Vessel”) on terms that the restoration of the company was without prejudice to the rights of acquired by persons, including the Administrator of the Ship Source Oil Pollution Fund (the “Administrator”), in the interval between dissolution of the company and restoration. The registered corporate owner was dissolved on 06 January 2014 and was restored on 14 May 2018. During that time the Vessel vested with the Province pursuant to s. 344 of the Business Corporations Act, S.B.C. 2002, c. 57, with the Administrator presenting its claim for reimbursement during that same time. The Province appealed to restore the company on terms of “with prejudice”, the effect of which would have the registered owner, rather than the Province, liable for reimbursement costs to the Administrator.
Decision: Appeal dismissed.
Held: Under the Business Corporations Act, the purpose of “without prejudice” was to preserve legitimate claims of third parties that arose during the interval between dissolution and restoration. The Court found that the claim for reimbursement by the Administrator was a legitimate claim that arose in the interval between dissolution of the company and restoration. The Administrator was not seeking a tactical claim that arose only because of the dissolution of the corporate owner. The Court of Appeal rejected the Province’s argument that the Marine Liability Act was intended to create a “polluter pays” regime and that the B.C. Supreme Court judge should have exercised his discretion to order the restoration with prejudice based on that “polluter pays” regime. In doing so, the Court of Appeal found the Marine Liability Act imposed liability for the expense of preventing or minimizing pollution damage as an incident of ownership, imposing that liability on the person who has the rights of the owner of the ship with respect its possession and use at the time clean up expenses are incurred. Acceptance of the Province’s argument, the Court held, would amount to a request to rewrite the Marine Liability Act so as to impose liability on another entity other than the person who has for the time being, either by law or by contract, the rights of the owner of the ship with respect to its possession and use.