Tug and Tow
Towage vs Carriage
It is always important to distinguish a contract of towage from one of carriage as different legal regimes apply. A contract of towage is one where the tug owner supplies a tug to tow (or push or assist) a ship, barge or other object belonging to someone else. Examples of towage are where a tug owner assists a ship in docking or undocking or when a tug owner is hired to tow a barge (loaded or unloaded) provided by the customer from point A to Point B. In contrast, a contract of carriage is one where the tug owner agrees to supply both the tug and the barge for the transportation of the customer’s goods from point A to point C. Where the contract is one of carriage, the duties and liabilities of the tug owner are those of a carrier and the legal regime applicable is that governing contracts for the carriage of goods by sea.
Responsibilities and Liabilities of Tug Owner
The responsibilities and liabilities of a tug owner at common law are: (1) to provide a seaworthy tug, properly manned and equipped to carry out the work in the weather and circumstances reasonably to be expected; and (2) to carry out the work with due care and skill. (Wire Rope British Columbia v BC Marine Shipbuilders,  SCR 363 at p. 392) This duty would appear to include an obligation to inspect the tow. (Fraser River Pile & Dredge Ltd. v. Empire Tug Boats Ltd., 92 F.T.R. 26) If the tug owner fails to provide a seaworthy tug or fails to carry out the work with due care and skill, it will be liable for any resulting loss caused by such failure.
In The West Cock,  P 208, it was said that where the tow is lost or damaged during the course of the tow, the onus is on the tug owner to relieve himself of liability by proving there was no negligence or want of reasonable care or skill on his part. Although this is possibly true for an unmanned tow where the tow has been transferred to the possession and control of the tug owner (a bailment)Canadian decisions are contradictory (The Tug Champlain v Canada Steamship Lines Ltd.,  Ex. C.R. 89; Mitsubishi Canada Limited v Rivtow Straits Ltd., (May 12, 1977) Vancouver Registry No. C763146 (S.C.B.C.); Fraser River Pile & Dredge Ltd. v. Empire Tug Boats Ltd., 92 F.T.R. 26)
Responsibilities and Liabilities of Tow Owner
The owner of the tow has an obligation to ensure that proper skill and diligence is exercised by those on board the tow (Hamilton Marine & Engineering Ltd. v. CSL Group Inc., (1995), 95 F.T.R. 161), that the tow is fit for the towing operation and to disclose any fact or matter which could affect the towing operation. However, this will not absolve a tug owner from liability where a reasonable inspection of the tow would have disclosed the defect. (Again see Fraser River Pile & Dredge Ltd. v. Empire Tug Boats Ltd., 92 F.T.R. 26)
Additionally, where the tow is manned, there is a presumption that the tow is in control of the towing operation and will be liable for any resulting damage (The Queen v. The Delta Pride et al., 2003 FCT 11). However, the question of who has control is one of fact and the vicarious liability of the tow will depend upon the nature of the negligent act that caused the damage. (Grieg Shipping A/S v. Fortune Marine Ltd. (The Dubai Fortune), 2013 FCA 218)
It is quite usual for the common law duties to be varied or eliminated entirely by the terms and conditions of the specific contract between the tug owner and the owner of the tow. There are a variety of common standard conditions that are in use for this purpose. The most well known internationally are the UK Conditions for Towage of which there are various versions. There are essentially three main elements to standard towing conditions: first they provide that the master and crew of the tug are deemed to be the servants of the tow and under the control of the tow (this makes the tow owner vicariously liable for the negligence of the tug crew); secondly, they provide a very broad exemption clause in favour of the tug owner exempting the tug owner from liability for loss or damage however caused, including negligence; finally, they provide that the tow owner shall indemnify the tug owner against and in respect of any claims for loss or damage made against it.
Provided the towing conditions are drafted in a clear and unambiguous fashion, they will be given effect to by Canadian courts. However, if they are unclear or ambiguous, they will be interpreted strictly against the interest of the tug owner or disregarded entirely (Meeker Log and Timber Ltd. et. al. v. The Sea Imp VIII, 1996 CanLII 2229 ).
It is also today quite common to find clauses in towage contracts that require one party or the other to have insurance on either the tug, tow or cargo. Such clauses are generally considered to be for the benefit of the other party and have been held to have the effect of relieving that party from liability for damage that is covered by the insurance. (St. Lawrence Cement Inc. v. Wakeham & Sons Ltd., 1995 CanLII 2482)
Limitation of Liability
Tug owners are entitled to take advantage of the limitation of liability provisions of the Marine Liability Act. An issue which sometimes arises in the context of limitation of liability and towage is whether the tonnage to be used in the calculation is that of the tug or tow or both. In The "Rhone" v The "A.B. Widener",  1 S.C.R. 497, the Supreme Court affirmed that the limitation fund should be calculated on the combined tonnage of the tug and tow when the tug and tow are in common ownership (the "flotilla principle"). In the absence of common ownership and where the barge is a "dumb barge", the fund is to be calculated on the basis of the tonnage of the tug alone.
The operational requirements for tug owners are, for the most part, contained in the Canada Shipping Act, 2001 and the Regulations passed under that Act. Particular regard should be paid to: the Hull Construction Regulations, CRC c. 1431, Part VIII, which provide construction standards for tug boats; The Safe Working Practices Regulation, CRC c. 1467; the Marine Personnel Regulations, SOR/2007-115, which mandate the number and qualifications of crew; and, the Towboat Crew Accommodation Regulations, CRC c. 1498, which contain other standards specific to tug boats.
It is also possible that Provincial statutes and regulations relating to safety, hours of work and other aspects of tug boat operations need to be complied with. Such statutes have been held to apply to fishing vessels (see, for example: Jim Pattison Ent. v. Workers’ Compensation Board, 2011 BCCA 3, and R. v. Mersey Seafoods Ltd., 2008 NSCA 67) and would likely be held to be equally applicable to tug boat operations unless there is a conflicting Federal statute. In particular, in British Columbia, the hours of work and overtime requirements contained in the Employment Standards Act have been held by the Employment Standards Tribunal to be applicable to tug boat operations except in limited circumstances. (See: Williston Navigation Inc. v. British Columbia, 2000 Carswell BC 3836, and Wichito Marine Services Ltd., Re, 2015 Carswell BC 379, but note that the correctness of these particular decisions is debatable and a court has not yet ruled on the issue.)
Statutes and Regulations
- Canada Shipping Act, 2001
- Marine Personnel Regulations
- Towboat Crew Accommodation Regulations
- Safe Working Practices Regulation
- Hull Construction Regulations