Miscellaneous Maritime Law Topics
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The database contains 31 case summaries relating to Miscellaneous Maritime Law Topics. The summaries are sorted in reverse date order with 20 summaries per page. If there are more than 20 summaries, use the navigation links at the bottom of the page.
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Moorage - Expulsion - Membership - Society - Slip
Brun v. Deep Cove Yacht & Sport Club, 2019 BCSC 1409
Précis: The plaintiff's membership at the defendant yacht club was reinstated despite being in arrears on moorage payment.
Facts By letter dated 13 December 2017, the plaintiff was informed he was “no longer a member” at the defendant yacht club because of “non-full payment of accounts owing”, a decision made by the yacht club’s executive committee. The yacht club, a non-profit recreational association incorporated under the Societies Act, S.B.C. 2015, c. 18, is governed by a Code of Conduct, Bylaws and Regulations. The Bylaws included, among other things, that every member must promptly pay dues and moorage (2.3), and that failing to do so means the member would not be in good standing (2.3.1). The Bylaws also specified that a person may appeal expulsion from the yacht club at the next meeting of the Executive Committee (2.9.1), that consideration by the Executive Committee to expel or reinstate a member shall be conducted in camera (2.9.2), and must be approved by 75% of those present (2.9.3). Importantly, the Bylaws provisioned that an individual ceases to be a member upon resolution of the Executive Committee for cause, provided that the member had been given fourteen days’ notice that a meeting is to be held to consider their expulsion and inviting the member to attend (2.9(b)). The plaintiff brought this action to quash the executive committee’s decision and restore his membership pursuant to s 105 of the Societies Act, which provides the court with jurisdiction to address errors and irregularities in the conduct of the society's affairs.
Decision: Plaintiff's relief sought is granted.
Held: The Court found that the correct interpretation of the Bylaws was that non-payment of dues as an expulsion for cause was governed by s. 2.9. In doing so, the Court held that by writing to the plaintiff on 13 December 2017 that the Executive Committee considered the expulsion to be governed by s. 2.9 of the Bylaws. By expelling the plaintiff as a non-member before the procedure in s. 2.9.3, the yacht club failed to comply with its own Bylaws and thus denied the plaintiff procedural fairness.
TSB Report - Request for Information - Passenger Eyewitnesses - Refusal to Comply with Notice
Mackenzie v. Canada (Transportation Safety Board), 2019 FCA 39
Précis: The Federal Court of Appeal held a notice requesting information of passengers on board a vessel that touched bottom was a reasonable use of the TSB's statutory powers.
Facts: The appellant sought to challenge the respondent’s request for information via notice (the “Notice”) relating to passengers on board a vessel when that vessel touched bottom in 2017. The respondent made this request under statutory authourity to investigate a marine occurrence under the Canadian Transportation Accident and Safety Board Act, 1989, c. 3. The appellant contended that the Federal Court erred in finding the information requested was relevant to the investigation, that the Court below failed to find the Notice was authorized by the investigating officer, and that the Court below failed to find the respondent had the relevant information as requested by the Notice.
Decision: appeal dismissed.
Held: The Federal Court of Appeal saw no merit in the case before it. The respondent issued the Notice in accordance with its mandate to advance transportation safety. In issuing the Notice, the information sought to be obtained formed part of the legitimate effort to obtain pertinent information regarding the marine occurrence. The Court below properly concluded the Notice was a reasonable use of the statutory powers available to the Respondent in discharging its legal mandate. No further issue was found by the appeal Court with respect to the authorizing officer or his geographical location. Further, the appellant was expected to have the information requested so there was no basis for this court to intervene.
Return of Vehicles to Canada - Jurisdiction to Order Return - Theft - Intervenor Status
Mercedes-Benz Financial Services Canada Corp. v. Maersk Line A/S, 2018 FC 1119
Précis: The Federal Court dismissed a motion for injunctive relief when the applicant failed to satisfy the legal test thereof.
Summary not yet available.
Jet ski - Collisions - Rental - Liable for damages
Lever v. Mehr and Qaderi, 2018 CarswellOnt 16288
Précis: The Ontario Superior Court of Justice awarded judgment for damages arising from negligent operation of two jet skis rented from the plaintiff.
Facts: The defendants rented two jetskis from the plaintiff’s business in July 2016. The rental period was for 90 minutes around the waters off Turkey Point, Ontario. Approximately halfway into the rental period, the defendants collided causing damage to the jetski operated by the defendant Mehr. When the defendants returned the jetskis, the Mehr jetski had a “football sized hole” in its front. Mehr was charged with operation of a vessel in a careless manner contrary to the small vessel regs under the Canada Shipping Act, pleading guilty and paying the $340.00 fine. At trial, Mehr argued that since he did not remember being told he would be liable for damages to the jet skis, and because that was not in writing, it would be reasonable for him to assume damage to the jetskis would be covered by the plaintiff’s insurance.
Decision: The defendants are jointly and severally liable to the plaintiff for the damages suffered as a result of their negligence.
Held: the judge relied on common law of bailment to hold that absent contractual terms to the contrary a bailee is responsible for chattel property received from the bailor, with the onus on the bailee to prove any damage is not due to his negligence. The onus was not discharged in this case.
Moorage - Bylaws - Societies - Powerboats - Sail boats
Dauphinee v. White Rock Harbour Board, 2018 BCSC 1286
Précis: The BC Supreme Court upheld a bylaw of the harbour board and ordered an assignment of a powerboat slip to the plaintiff.
Facts: The plaintiff sought a petition declaring that the affairs of the respondent were being conducted in a manner oppressive or unfairly prejudicial to him, and, an order directing the Harbour Board to assign him a powerboat moorage slip in place of his sailboat moorage slip at the wharf operated by the Harbour Board. The defendant Harbour Board acts as agent for the City of White Rock in the operation of the Wharf. There are 33 slips at the defendant’s wharf, 4 of which are for powerboats only. The plaintiff was a member of the defendant harbour board and had been allotted a sailboat slip at the Wharf since 2003. In April 2017 the plaintiff submitted a request to the Harbour Board to assign him an available powerboat slip in place of his sailboat slip. Rule 16 of the defendant Harbour Board’s rules allowed an existing Harbour Board member with a minimum of five years occupation of a slip to sell their existing sailboat and purchase a powerboat or sell their existing power boat and purchase a sailboat and change their moorage designation accordingly. Such members who wish to do so would be placed at the head of the waitlist. The Harbour Board refused to assign the plaintiff a powerboat slip and did not want to uphold its own rule.
Decision: Order granted.
Held: Nothing in the agreement with the city, the constitution or the bylaws were inconsistent or prohibited the operation of rule 16. The rule was valid. It was not material what the past or future bylaws and rules would read, as the issue was the situation now and the year that has past since the plaintiff made his request for the slip. The judge found for the plaintiff that it is oppressive and unfairly prejudicial for the Harbour Board to refuse to implement a validly adopted rule.
TSB Investigation - Warrant - Collateral Attack
Mackenzie v. Canada (Transportation Safety Board), 2018 FC 322
Précis: The Federal Court refused to quash a warrant granted by the provincial court on the grounds that it was a collateral attack on the order of the provincial court.
Facts: In August 2017 a boat owned by Kingston and the Islands Boatlines (KTI) ran aground in waters near Kingston, Ontario. The Transportation Safety Board (TSB) commenced an investigation. The owners/operators of the vessel refused to provide information to the TSB. The applicant, an employee of KTI, sought an interlocutory injunction for the respondent making use of evidence obtained by a warrant pursuant to the TSB investigation until a judicial review was heard.
Decision: Motion dismissed.
Held: The Federal Court’s jurisdiction would be challenged if it allowed the applicant’s motion, as the applicant would have successfully undermined the basis of the warrant without ever having to engage legal proceedings in the Provincial court. This was the definition of “collateral attack”. The court was also of the opinion it could not determine an abuse of process issue created by a procedure authorized by statute in another court in another jurisdiction.
Coasting Trade - Standing to Challenge Transport Canada Decision - Mootness
Mckeil Marine Limited v. Canada, 2016 FC 1063
Précis: An appeal from a decision of Transport Canada that the towing of two decommissioned vessels from British Columbia to Nova Scotia via the Panama Canal was not "coasting trade" was dismissed on the grounds the applicant did not have standing and the issue was moot.
Facts:The applicant was a Canadian tug and barge company. It wrote to Transport Canada requesting whether the towing of two decommissioned Canadian warships from British Columbia to Nova Scotia via the Panama Canal was “coasting trade” within the meaning of the Coasting Trade Act . Its concern was that the towage of the two decommissioned warships was to be done by an American tug company and that a license had not been obtained. Transport Canada responded that, in its view, the towage would not constitute “coasting trade” and no license was required. Thereafter, the towage was in fact performed by the American company. The applicant then brought this application before the Federal Court for a declaration that the towage did constitute “coasting trade”.
Decision:The application is dismissed.
Held:The applicant does not have direct standing to bring this application as it is not “directly affected” in the sense that the matter at issue affects its legal rights, imposes legal obligations on it, or prejudicially affects it in some manner. The applicant’s concern that the decision of Transport Canada has a negative precedential affect is speculative. The applicant further does not have “public interest” standing. Public interest standing arises where the case raises a serious justiciable issue, the party has a real stake or a genuine interest in its outcome and the proposed suit/proceeding is a reasonable and effective means to bring the case to court. Here there is a serious justiciable issue and the applicant has a real stake or genuine interest in the outcome but this is not an appropriate case to grant public interest standing. Even if the applicant had standing, the matter is moot as the towage of the warships has already been completed and a case with these particular facts is not likely to reoccur.
Judicial Review of Permit Authorizing Artificial Reef – Dismissal for Delay
Save Halkett Bay Marine Park Society v. Canada (Environment), 2015 FC 302
Précis: An Application for judicial review of a decision authorizing the sinking of a destroyer to create an artificial reef was dismissed for delay and also on the merits.
Facts: The respondent had obtained a Disposal at Sea Permit from the Minister of the Environment to sink a decommissioned destroyer in the waters of Halkett Bay near Vancouver for the purpose of creating an artificial reef. The applicant filed an objection to the permit and ultimately commenced these proceedings for judicial review of the Minister’s decision. The issues were: (1) was the Application filed late? (2) Did the Minister fail to consider that the destroyer contained TBTs which are banned in Canada? and, (3) was the issuance of the permit unreasonable?
Decision: Application dismissed.
(1) Section 18.1(2) of the Federal Courts Act requires that an Application for judicial review be commenced within 30 days. This Application was filed more than two months beyond that time limit and is therefore filed late. The court does, however, have a discretion to extend the time limit. The relevant factors are whether: (i) there was a continuing intention to pursue the application; (ii) there is merit to the application; (iii) the other parties have suffered prejudice as a result of the delay, and (iv) there is a reasonable explanation for the delay. Here, there is substantial prejudice to the respondent from the delay and the delay has not been explained. Accordingly, the Application is dismissed for delay.
(2) The Applicant argues that TBTs are subject to a complete ban in Canada and that the Minister failed to take this into account. However, there is no such complete ban in the relevant statutes and the Minister was entitled to issue a permit.
(3) Finally, the Applicant argues the Minister’s decision was unreasonable in that: (i) the basis for the decision was not explained; (ii) the Minister failed to follow accepted protocols for the testing of anti-fouling paint; and (iii) the existence of any TBTs whatsoever in the hull required the permit be refused. However, the Minister was under no duty to issue detailed reasons for the decision separate and apart from the decision record and the permit itself. The record discloses the reasons of the Minister. Also, contrary to the submissions of the Applicant, the Minister did observe the accepted protocols for testing anti-fouling paint. Finally, there is no clear and compelling evidence that the vessel did contain TBTs and, in the absence of such evidence, the Minister’s decision is deserving of deference.
Damage to Yacht while being re-positioned - Is the contract one of carriage? - Jurisdiction of Quebec Courts
St. Paul Fire & Marine Insurance Company v. Vallée, 2015 QCCQ 1891
Précis: The Court of Quebec held that a contract to deliver a yacht by sea was a services contract and not a contract of carriage.
Facts: The plaintiff was the insurer of a yacht that was damaged while being re-positioned. The yacht owner contracted with the defendant to transport the yacht from Quebec City to the State of New York. The transportation involved the defendant taking possession of the vessel and sailing it to the destination. During the voyage the yacht was damaged. The plaintiff fully indemnified its insured and commenced these subrogation proceedings against the defendant. The defendant then brought this application to dismiss the action on the basis that: (1) the Quebec courts were without jurisdiction: and, (2) no notice of claim was provided within 60 days of delivery as required by art. 2050 of the Quebec Civil Code.
Decision: Application dismissed.
Held: (1) The Quebec Court has jurisdiction in admiralty and s. 22 of the Federal Courts Act does not operate to restrict that jurisdiction. (2) The contract was not a contract of carriage but a service contract and art. 2050 does not apply. In any event, notice is not required where, as here, the carrier notifies the property owner of the damage.
Comment: Although the plaintiff in this action was the insurer of the vessel, in the common law provinces it is not usual for an insurer to be named as the plaintiff in subrogation proceedings. In the common law provinces the insured is normally the named plaintiff.
Damage to Vessel Caused by Grinding Dust – Liability – Practice - Summary Judgment – Motion for Non-Suit – Joint and Several Liability
0871768 B.C. Ltd. v. Aestival (Vessel), 2014 FC1047
Précis: One of two defendants was found liable for damage caused to an adjacent vessel by grinding dust. As the damages were separate and divisible, it was not a case of joint and several liability.
Facts: The plaintiff commenced these proceedings for damage allegedly caused to his vessel by grinding dust, including metal particles, that spread from the defendant vessel. The plaintiff’s vessel had been on blocks next to the defendant vessel while grinding work was being carried out. The defendants were the owner of the defendant vessel and a repairer hired by that owner. The defendants denied liability. Shortly before trial the defendant owner brought an application for non-suit and/or no-evidence and, at the trial brought a motion to file affidavit evidence.
Decision: Judgment for the plaintiff against the defendant owner but not the repairer.
Held: With respect to the non-suit motion, there is doubt as to whether such a motion is compatible with a motion for summary judgment or summary trial but, in any event, the defendant owner did not comply with the time requirements for bringing such a motion. Moreover, even if the motion for non-suit had been properly brought, it would not succeed as the plaintiff has established a prima facie case. The defendant owner says there is no causal link between the grinding and the damage done to the plaintiff’s vessel but there is some evidence supporting causation and this is sufficient to dispose of the non-suit motion.
The defendant owner’s motion to file affidavit evidence is also dismissed. Non-suit rules require a defendant to elect whether to call evidence. If they elect to call no evidence, the non-suit motion is decided immediately and the defendant forfeits the right to call evidence.
The plaintiff has established the four elements necessary to support its claim against the defendant owner, those elements being: a duty of care; breach of the standard of care, causation and compensable damage. On the evidence there was a duty of care. The vessels were “neighbours” in close physical proximity and the defendants knew or should have known that the defendant vessel should be tarped before sanding or grinding. It was reasonably foreseeable that failure to contain debris would cause damage to other vessels. The standard of care is that expected of an ordinary, reasonable and prudent person in the same circumstances as the defendant. Grinding without a tarp or other containment mechanism was in breach of the standard of care. However, the evidence establishes that only the defendant owner was carrying out grinding on 26 July 2012 and only the defendant repairer was carrying out the grinding on 27 July 2012. Accordingly, the defendant owner breached the standard of care on 26 July and the defendant repairer breached the standard on 27 July. With respect to causation, the proper test is the “but for” test. The plaintiff must prove that “but for” the negligence of the defendant the damage would not have occurred. This burden has been met but, because the damages caused by the 26 July grinding are divisible and separate from the damages caused by the 27 July grinding, this is not a case of joint and several liability. Each defendant is liable only for the damages caused by their own negligent acts. The defendant owner is liable for the damage caused as a result of the grinding that occurred on 26 July. The defendant repairer would have been liable for any damage caused on 27 July but no damage was caused to the plaintiff’s vessel that day.
Judicial Review of Port Authority Decision Denying Application to Operate Tour Boat - Public Right of Navigation
Adventure Tours Inc. v. St. John's Port Authority, 2014 FC 420
Précis: The Federal Court upheld the decision of a Port Authority denying an application to conduct tour boat operations from port managed property.
Facts: The applicant had conducted tour boat operations in the Port of St. John's and in October 2001 requested that the St. John's Port Authority (the "Authority") permit it to renew its operations from port managed property. The Authority denied the request as it had implemented a policy in 2006 restricting the number of such operators to three, none of whom were the Applicant. The Applicant then brought a judicial review application to set aside the decision of the Authority. On motion by the Authority that application was struck on the grounds that there was neither a formal request nor an application made by the Applicant that could be the subject of judicial review (2012 FC 305). An appeal from that decision was dismissed on 22 January 2013 (2013 FC 55). In March 2013 the Applicant again requested permission to resume its tour boat operations from port managed property and the Authority again declined the request. The Applicant then brought this second judicial review application. The main issue was whether the Authority had the power to require that commercial tour boat operators be licensed.
Decision: Application denied.
Held: Pursuant to the Canada Marine Act and its letters patent, the Authority has the power to license operations relating to the carriage of passengers. Good management of a port requires that the activities of tour operators be licensed. The decision of the Authority is not ultra vires on the grounds that it is an infringement of the public right of navigation. The public right of navigation is not unrestricted. Parliament has the right to legislate in respect of navigation and shipping and is not restricted to using only one statute, the Canada Shipping Act, 2001, to so legislate. The Canada Shipping Act, 2001 may be the primary legislative vehicle used to regulate navigation and shipping but other legislation such as the Canada Marine Act can also be used.
Judicial Review – Application to Strike – Port Authority Powers
Adventure Tours Inc. v. St. John's Port Authority, 2012 FC 305 2013 FC 55
The applicant wrote to the St. John’s Port Authority advising he wished to resume providing a tour boat service and inquiring whether a licence was required. The Authority wrote back advising that they had agreements in place with tour boat operators and were not accepting any further applications. The applicant brought an application for judicial review arguing that the Authority had no right to require him to obtain a licence. The Authority brought this motion to strike the application.
Decision: The motion to strike was allowed.
Held: The letter from the Authority did not attract rights of judicial review.
Comment: A second issue in the case was whether the Authority was a federal body exercising a public function and therefore subject to judicial review. Although the Court did not need to address this issue, it held that the Authority was a federal body exercising a public function.
Note: an Appeal from this decision was reportedly dismissed at 2013 FC 55 but we have not been able to locate the decision on the Federal Courts website or CanLii. The appeal decision is referenced in the related case, Adventure Tours Inc. v. St. John's Port Authority, 2014 FC 420.
Ice Breaking Services Fee
The "Stormont" v. Canada, 2012 FCA 93
Précis: A challenge to an ice breaking services fee was dismissed.
The issue in this case was whether the ice breaking services fee in the Oceans Act applied to the defendants who operated a truck ferry service utilizing tug and barge between Windsor, Ontario and Detroit, Michigan. The defendants argued, inter alia, that they did not have to pay the fee as it was not applicable to international voyages and that the Minister did not have the power to impose such fees. The defendants’ argument turned upon the interpretation of the Oceans Act. The trial Judge rejected these and other arguments on the basis of simple statutory interpretation. The defendants appealed.
Decision: Appeal dismissed.
Held: The applicable sections of the Oceans Act and Fee Schedule authorized an ice breaking fee on each transit to or from a Canadian port. The Minister was both authorized and required to provide icebreaking services and was entitled to charge a fee for such services.
Canada Marine Act – Container Fee – Fair and Reasonable
Shipping Fed. of Cda. v. Vancouver Fraser Port Authority, 2012 FC 301
Précis: The court dismissed a challenge by ship owners to a container fee imposed under the Canada Marine Act.
This was an application for judicial review challenging the ability of the Vancouver Fraser Port Authority to impose a fee on ship owners for container cargo. Section 49 of the Canada Marine Act specifically requires that any fees charged be “fair and reasonable”. The applicants alleged the fee charged was not fair and reasonable as ship owners receive no benefit for the infrastructure improvements for which the fee was assessed. The applicants further argued that the fee was an illegal tax as it was unconnected with any service.
Decision: Application dismissed.
Held: The Court held that the fee was a charge connected with a regulatory scheme and therefore a regulatory charge and not a tax. The Court further held that there was no requirement to link the fee with a service or benefit.
Application to remove barge from Foreshore
Western Forest Products Inc. v. O'Brien, 2011 FC 1528
The plaintiff in this matter held a foreshore lease granted by the province of British Columbia over certain foreshore lands. The defendant was the owner of a barge anchored within the foreshore lease without the permission of the plaintiff. The plaintiff brought this action and application for an interlocutory injunction compelling the defendant to remove the barge. The Court granted the injunction. The Court held that there was a prima facie case of trespass, and that any right of riparian passage the defendant had did not include long term fixed moorage. The Court further said that injunctions are the presumed remedy in situations of trespass.
Arbitration – Application to Set Aside Award – Bias
New World Expedition Yachts LLC v. P.R. Yacht Builders Ltd., 2010 BCSC 1496
This was an application under the International Commercial Arbitration Act to set aside an award of an arbitrator relating to the construction of a ship. The applicant argued, inter alia, that the award should be set aside on the grounds that the arbitrator was biased. The bias allegations included that there were private communications with the arbitrator and that there was a close and familiar relationship between counsel and the arbitrator. With respect to the issue of private communications, the Court noted that the arbitrator was asked to act as both mediator and arbitrator and that any private communications took place in the context of the mediation. With respect to the relationship between the arbitrator and counsel, the Court noted that arbitrators are often chosen from practicing lawyers in a specialized area who know one another. The Court considered the fact that first names were used did not give rise to a reasonable apprehension of bias.
Arbitration - Appeal of Arbitral Award - Factors to be Considered
Lafarge Canada Inc. v. JJM Construction Ltd., 2010 BCSC 1168
The parties entered into four identical charter parties which required that disputes be settled by arbitration. Pursuant to the charter parties the charterer was to be liable for damage to the barges except for normal wear and tear and was also responsible for obtaining hull and machinery insurance naming the owner as an additional insured. The barges were returned with damage but not all of the damage was covered by the insurance that had been obtained by the charterer. At the arbitration the charterer argued that the agreement to insure relieved it of liability to pay the repair costs for the uninsured damage. The arbitrator disagreed, ruled in favour of the owner and ordered the charterer to pay damages of $650,000. The charterer then brought this application under the Commercial Arbitration Act of British Columbia for leave to appeal the arbitrator's decision. The Motions Judge considered the various factors relevant to an application for leave to appeal an arbitral award, namely, whether the issue was question of law and the importance of the issue to the parties or public. The Motions Judge held that the issue on appeal was a question of law that raised an important matter of principle and was of considerable financial consequence to the parties. The Judge further held it was not necessary for the applicant to show the arbitrator was "obviously in error". The test is whether there is sufficient substance to the proposed appeal to warrant its proceeding. In result, the Motions Judge allowed the application.
Harbour Dues - Unlawful Tax
Algoma Central Corporation v. Canada, 2009 FC 1287
The issue in this case was the validity of harbour dues in respect of public (regional) ports under the Canada Marine Act. The first issue was whether the case ought to have been brought by way of judicial review proceedings. The Court held that the case should have been so brought but nonetheless decided to hear the case on the merits. The second issue concerned whether the case was appropriate for summary judgment and the Court held that it was. The third issue was the validity of the harbour dues. The plaintiff‟s argument was that the dues were in the nature of a tax since the government provided no services and that pursuant to s. 53 of the Constitution Act only Parliament had the authority to levy a tax. The Court reviewed the Act and noted that the Minister‟s authority to charge fees was not contingent on services being provided. The Court further reviewed the relevant authorities on the distinction between a regulatory charge and a tax and held that the dues were a regulatory charge. The final issue was whether the practice of not charging similar dues to U.S. ships was discriminatory. On this issue the Court held that the Minister had broad discretion to distinguish between different users and that the exercise of this discretion was not a grounds to invalidate the dues.
Purchase Survey - Liability of surveyor
Perera v. De Groot et al, 2006 BCSC 1281 2007 BCCA 242
In this matter the plaintiffs alleged that a surveyor retained to perform a pre-purchase survey of a sailing vessel had negligently failed to inform them of existing dry rot in the vessel. Approximately one year after the survey,the plaintiffs hired a second surveyor who found extensive dry rot in the vessel. At trial (2006 BCSC 1281) the Trial Judge found that the rot existed at the time of the initial survey and that the surveyor was negligent in not finding it and reporting it. The Judge awarded the plaintiffs the value of the vessel less salvage plus insurance costs and $3,000 for loss of use. On appeal (2007 BCCA 42), the Court of Appeal held that there was no evidence upon which the Trial Judge could conclude that the rot existed at the time of the initial survey. Accordingly, the appeal was allowed and the claim against the surveyor dismissed.
Port State Control – Wrongful Detention – Liability of Steamship Inspectors
Canada v. Berhad, 2005 FCA 267
This matter concerned the liability of Canada Steamship Inspectors for their alleged negligence and wrongful detention of the vessel “Lantau Peak”. The facts were that the “Lantau Peak” arrived at Vancouver on 5 April 1997. It was intended to repair hull frames found to be detached during the voyage from Japan and then to load a cargo of coal. Upon arrival the vessel was inspected by Canada Steamship Inspectors and was ordered detained as a measure under Port State Control for safety at sea. The reason for the detention was that the hull frames were wasted and corroded beyond the acceptable limit of 17%. The owner objected to the detention but ultimately repaired the vessel to a lesser standard. The ship remained in detention until 17 August 1997 notwithstanding that the vessel met its classification requirement and its flag state petitioned for its release. The primary defence to the claim of the Plaintiff was that the inspectors were acting under a statutory authority given by the Canada Shipping Act and were therefore immune from suit. At trial the Judge held that the provisions of Canada Shipping Act and Regulations, in particular s. 310 authorizing detention of vessels, did not apply to foreign flag vessels engaged on international voyages. He found that the detention was pursuant to the Tokyo Memorandum of Understanding on Port State Control, with reliance on the Safety of Life at Sea Convention, however, the MOU did not have the force of law and could not be considered a “legal authority” to detain a ship. The trial Judge found the Defendants had been negligent in failing to conduct a detailed inspection of the ship, in the reporting of observations and evidence to the Chairman of the Board of Steamship Inspectors, in failing to properly supervise inspectors and by unduly delaying the review of the detention order. In result, the trial Judge found the Defendants liable for damages plus interest in the amount of almost $6 million. On appeal, the judgment of the trial Judge was set aside. The Federal Court of Appeal held that s. 310 of the Act did apply and authorized the detention of foreign ships. The Court of Appeal further held that decisions of Steamship Inspectors are discretionary and that the standard of review of such decisions is at least one of reasonableness. (Indeed, the Court of Appeal noted that strong arguments could be made in support of a standard of patent unreasonableness.) The Court of Appeal held that a “decision will be unreasonable only if there is no line of analysis within the given reasons that could reasonably lead the tribunal from the evidence before it to the conclusion at which it arrived” and further noted that deference should be given to the expertise and experience of Steamship Inspectors. Applying this standard and after extensively reviewing the evidence, the Court of Appeal held that the actions of the Steamship Inspectors were reasonable and the detention of the ship was proper. In concluding, the Court of Appeal said: “The trial judge did not have the power to review the merits of the decisions taken by the Steamship Inspection Service and the Chairman, and to substitute his views for theirs as to safety. It belonged to them, not to the court, to appreciate the acceptability of the risk to human life and the marine environment.”