Collisions and Ships
Commentaries are intended as an introduction or overview of the topic. The commentaries for some topics are more detailed than others but none of them should be taken as a complete and full recitation of the law applicable to the topic.
See the Collision Regulations
The database contains 44 case summaries relating to Collisions and Ships. 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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St. Lawrence Seaway - Vessel Collision - Bridge - Contractual Relationship Between Crown and Plaintiff
St. Lawrence Seaway Management Corporation v. BBC Lena (Vessel), 2018 FC 1026
Précis: The Federal Court held that the plaintiff was entitled to recover losses for repair of a bridge under its operation and management that was struck by the defendants' ship.
Facts: On 30 September 2015 the “BBC Lena” struck Bridge 19, a bridge which forms part of the St. Lawrence Seaway. The non-profit corporate plaintiff was at all times, pursuant to a s. 80(5) Canada Marine Act, S.C. 1998, c. 10 agreement with the Crown, charged with the management and operation of the Seaway, including the struck bridge. The plaintiffs claimed $1 million in damages for the cost of repairing the bridge, commencing actions in rem against the vessel and in personam against its owners and all others interested in it. The defendants’ submitted that the plaintiff’s damages were not accompanied by damage to property owned by the plaintiff, making the damages pure economic loss, recoverable only in certain circumstances, none of which cover the case at bar.
The case drew heavily on the agreement between the plaintiff and the Crown pursuant to ss. 80(5) and 91(1) of the Canada Marine Act. The defendants claimed that s.91 of the CMA meant the plaintiff can only conduct itself and engage in legal proceedings to “protect Her Majesty’s interests, not the Plaintiff Corporation’s interests”.
Decision: Plaintiff entitled to recover losses.
Held: The Court found that the matter boils down to the nature of the contractual relationship between the plaintiff and the Crown. Analyzing the CMA and jurisprudence on relational economic loss, the court decided the case in reference to the following points:
i. the plaintiff's right to pursue its claim;
ii. whether the right is restricted;
iii. whether the intent of the agreements was to exclude recovery by the plaintiff;
iv. whether the plaintiff’s loses were relational economic loss; and if that last point was answered in the affirmative, whether the losses are unrecoverable.
On the first point, the court found that responsibility for the management and operation of the damaged bridge lies exclusively with the plaintiff. As the Crown transferred to the plaintiff all risks and responsibilities pertaining to the bridge, the plaintiff can and had the exclusive right to pursue claims for damages. The court went further to state it was also commercially prudent for the plaintiff to recover such costs due to negligence by parties such as the defendant.
On the second point, the court found that the rights of the plaintiff were not restricted to protecting crown property and crown interests on behalf of the crown. Neither s.91 of the CMA or the purpose of the act was to restrict the rights of the plaintiff. It would be contrary to the purpose of the act if the Plaintiff had no right of recovery in circumstances such as this case, as the purpose of the act is to manage the Seaway in a commercially sound manner.
On the third point, the court found that the agreement makes the plaintiff responsible for the bridge, its operation, management and repair at its own expense, operating the Seaway on a commercially sound basis and as a prudent owner would. The court found that in order for that to be accomplished, the plaintiff must be able to pursue actions to recover costs it incurs to repair damage to the assets under the agreement caused by the negligence of third parties. This authority stems from the CMA and is implemented by the agreements.
The fourth point provided the bulk of the judgment, for obvious reasons: The plaintiff’s claim did not fit neat within circumstances previously held as defining contractual relational economic loss. The judge resolved the issue by determining If the plaintiff’s repair cost damages fell within the possessory interest exception to the general presumption against recovery of relational economic loss. By virtue of s. 80(5) of the CMA and the agreements, the judge found that the Crown relinquished possession of the Seaway assets, and the plaintiff “stepped into the shoes of the Crown in all relevant respects, short of outright ownership”. Importantly, the plaintiff sought the costs of repairing the bridge, and not seeking recovery of loss of use. Thus as the plaintiff had exclusive possession of and a possessory interest in the bridge, the claim falls within the possession or proprietary interest exception and as such are recoverable relational economic losses
Collisions - Claim for Repair & Business Interruption - Summary Trial - Cause of Action
Graymar Equipment (2008) Inc. v. Cosco Pacific Shipping Ltd., 2018 FC 974
Précis: The Federal Court ordered the defendant to pay damages arising from a collision between their moving container ship and a stationary scow.
Facts: On 28 October 2016 the Cosco Pacific was involved in an allision striking a stationary scow, the FRPD Rupert, and a derrick, the T.L. Sharpe, both of which were owned by the plaintiff Graymar and on charter to the plaintiff Fraser River. The scow and the derrick were part of a construction operation to extend a dock at the Fairview Container Terminal in Prince Rupert. The T.L. Sharpe was damaged, and it took eight days to repair. The Cosco Pacific had a pilot onboard who admitted liability and had a consent judgment entered against him for $1000.00 under his statutory limit of liability plus interests and costs. The plaintiffs claimed $513,955.53 for cost of repair, business interruption due to lost business of another derrick, the Peter D. Anderson, supervisory, construction and administrative staff expenses for those on site an additional eight day, and indirect costs for maintaining facilities, access roads, offices and project security for those additional eight days. With liability admitted, quantum proceeded by way of summary trial.
Decision: The defendants were jointly and severally liable to pay combined damages and pre-judgment interest of $485,506.89 to the plaintiff Fraser River. Failing payment, the Cosco Pacific is ordered to be sold with Fraser River to be paid out of the proceeds thereof.
Held: Fraser River had standing as bailee in possession to sue for both the cost of repair and business interruption. Graymar, as owner, had standing to sue for the cost of repair, but suffered no loss.
Without any contest by the defendants as to the cost of repairs, the Court accepted the cost of repairs of the T.L. Sharpe as $187,865.5. The $31,320.00 reduction in the plaintiffs’ claim arose after it was discovered in examination that the Peter D. Anderson was not idle for the whole 8 days. The defendants argued that the plaintiffs did not prove what business the Peter D. Anderson would have had and at what rate, which was said to be necessary for establishing a claim of business interruption and additional expenses with reasonable certainty in the shipping context. Yet, the defendants took no position on the cost of repairs for the Peter D. Anderson, and the Court allowed the claim less $31,320.00 for a total of $186,544.00.
As for costs to staff, the defendants argued that evidence including payrolls should have been tendered by the plaintiffs. Dismissing that argument, the Court found that on a motion for summary trial, such evidence is not needed and would be “excessive” to require evidence from the payroll master, as the project director’s affidavit contained the required evidence to support the claim. Without any cross-examination or other evidence tendered by the defendants, the Court found that no evidence of pay-stubs would be required. In reducing the overhead from 15% to 10%, the Court allowed the claim of $87,183.82 for supervisory construction and administrative staff expenses.
The claim for project security, maintenance of access roads and facilities and offices was disallowed as the Court could not say with any certainty that Fraser Rivers presence on site was extended solely due to the Costco Pacific. As the project with a joint venture between Fraser River and another contractor, it was not clear when Fraser River’s work was actually completed.
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.
Dangerous operation of vessel- Collision - Criminal Code - Evidence
R v. Gettle, 2018 BCSC 1221
Précis: The B.C. Supreme Court found the accused guilty of operating a vessel in a manner dangerous to the public and causing bodily harm.
Summary not yet available.
Small Vessel Collision - Stationary Boat - Presumption of Fault
Baril v. Beaumier, 2018 QCCQ 3111
Précis: The defendant vessel was found 100% at fault for a collision with a stationary vessel.
Facts: The plaintiffs were fishing from a small aluminum boat that was at anchor between two points of land. A second vessel operated by the defendant was proceeding at a speed of approximately 25 knots and collided with the plaintiff's vessel causing property damage and minor personal injury.
Decision: The defendant is 100% at fault.
Held:The incident is governed by federal maritime law. There is a presumption that when a moving vessel collides with a stationary vessel the moving vessel is at fault. The defendant has failed to rebut this presumption. The visibility at the time of the collision was clear. The defendant has not explained why he did not see the plaintiff's boat. Either he was not maintaining a proper lookout or his vision forward was obscured by the raised bow of his boat.
Uncharted Shoal - Liability of Crown - Pollution- Liability of Vessel - Effect of Signed Treaties/Conventions - Damages - Breach Date Rule - Appeals - Standard of Review
Adventurer Owner Ltd. v. R., 2017 FC 105 2018 FCA 34
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.
Personal Injury - Small Vessel Collision – Evidence - Effect of Guilty Plea in Criminal Proceedings – Adverse Inference
Banford v. Mitchelson, 2016 SKQB 328
Précis: The operator of a vessel involved in a collision is not precluded from denying liability where his guilty plea was entered for economic reasons. He was nevertheless found liable.
Facts:The plaintiff was a passenger in a small pleasure craft. She suffered personal injuries when a second pleasure craft collided with the boat in which she was riding. The collision occurred at night. The operator of the second boat was charged with dangerous operation of a vessel and pleaded guilty to the charge. In his defence to this civil action, the operator of the second boat denied he was involved in the collision.
Decision:Judgment for the plaintiff.
Held:The defendant has testified that he pleaded guilty to the criminal charge to avoid having to take additional time off work to defend the charge. In these circumstances, the defendant’s guilty plea is not determinative of civil liability. Nevertheless, based on the testimony of the witnesses, it is more likely than not that the defendant was the operator of the second boat and is liable for the injuries suffered by the plaintiff. The defendant’s failure to call his spouse, who was with him in his boat on the night of the accident, as a witness justifies the drawing of an adverse inference.
Small Vessel Collision - Stationary Vessel Unlit - Liability of Owner
Holman v. Oberg, 2016 ABQB 448
Précis: The owner of a vessel is not vicariously liable for the negligence of the operator absent actual fault or privity.
Facts:The plaintiff, a 28 year old man, took a pontoon boat owned by his parents out onto a lake at night to go for a swim. While on the lake but while drifting the pontoon boat was hit by a boat owned by the first defendant and operated by the second defendant. The plaintiff was injured in the collision. At the time, the lights of the pontoon boat were not working, to the knowledge of the plaintiff but not to the knowledge of his parents. The plaintiff commenced this proceeding against the two defendants. The defendants then commenced a third party claim against the parents, the owners of the pontoon boat. This was an application for summary judgment on the third party claim.
Decision:The third party claim is dismissed.
Held:Although the evidence is somewhat unclear, it is assumed that the pontoon boat did not meet the lighting requirements of the Canada Shipping Act, 2001 and that the collision occurred in full darkness. Notwithstanding these assumptions, the parents did not know the navigation lights were not working and there was “no actual fault or privity” on their part. There is no vicarious liability under maritime law in the absence of actual fault or privity on the part of the owner.
Collisions - Pleasure Craft
Turcotte v. Dufour, 2015 QCCA 1914
Précis: Where two vessels were proceeding on parallel courses at speed and one vessel suddenly veers sharply putting itself in front of the other, the turning vessel is 100% liable for the resulting collision.
Facts:On 23 August 2008, a vessel operated by the appellant was involved in a collision with another pleasure craft. The two vessels were traveling at about 40 miles per hour in the same direction in a channel having a width of 150 to 200 metres with little traffic. The trial Judge found that the appellant swerved in front of the second vessel spraying the operator of the other vessel with water and then stopped. The second vessel was not able to stop in time to avoid a collision. The trial Judge found that the appellant was 100% at fault for the collision. The appellant appealed.
Held:The evidence was sufficient to enable the trial Judge to find that the sole cause of the collision was the sudden and unpredictable manoeuvre of the appellant.
Pleasure Craft Collision - Apportionment of Liability - Liability of Owner - Failure to Keep Lookout - Alcohol - Costs
Atkinson (Guardian ad litem of) v. Gypsea Rose (Ship), 2014 BCSC 1017
Précis: A small vessel collision case in which liability was apportioned 80% to the moving vessel whose operator was impaired and 20% to the stationary vessel. The case is also notable for holding that the owner of the moving vessel was not liable even though there were some maintenance issues with the boat that contributed to the accident.
On 30 June 2008 a vessel owned by Maridee Skidmore and driven by her son Cory Skidmore (the "Skidmore Vessel") collided with a vessel owned and operated by Norman Atkinson (the "Atkinson Vessel") causing personal injury and property damage. At the time of the collision, the Atkinson Vessel was stationary in the water with its engine off and had been stationary for about 30 minutes. The operator of the Atkinson Vessel was at the back of the boat attempting to untangle a tow line from the propeller. A passenger in the Atkinson Vessel noticed the Skidmore Vessel approaching at a distance of about 300 feet with its hull straight out of the water. She alerted the others in her vessel and jumped on the seat to wave her arms and scream at the approaching vessel. The operator of the Skidmore Vessel did not see the Atkinson Vessel because he could not see over the bow and did not hear the screams until it was too late. The Skidmore Vessel hit the starboard bow of the Atkinson Vessel at a speed of 15 mph. The operator of the Skidmore Vessel was impaired at the time and the Skidmore Vessel had the wrong propeller with the result that at a speed of 15 mph it would not plane and the operator could not see over the bow.
Three actions were commenced against the owner of the Skidmore Vessel, the operator of the Skidmore Vessel and the owner/operator of the Atkinson Vessel. The operator of the Skidmore Vessel admitted his liability. The issues were whether the Owner of the Skidmore Vessel and the owner/operator of the Atkinson Vessel were also liable and how liability ought to be apportioned.
The Owner of the Skidmore Vessel is not liable. The owner/operator of the Atkinson Vessel is liable. Liability is apportioned 80% to the operator of the Skidmore Vessel and 20% to the owner/operator of the Atkinson Vessel.
With respect to the liability of the owner of the Skidmore Vessel, it was held by the Nova Scotia Court of Appeal in Conrad v Snair, 1995 CanLII 4175, that a boat owner's responsibilities could be divided into three principal categories: (1) the ship must be seaworthy for the intended voyage, in good repair and properly equipped and safe for those on board; (2) the ship must be provided with proper navigational aids including charts, rules and information; and, (3) the ship must be properly and competently staffed. In addition, for the owner to be at fault there must be consent, express or implied, for the operator to have the vessel at the time of the accident. The owner of the Skidmore Vessel had a strict rule that no one was to drive or be on board the vessel if they had been drinking alcohol. The operator was aware of this rule and had been refused permission to use the boat on two prior occasions when he had been drinking. On this occasion, the operator did not ask for permission to use the boat as he knew it would be refused. On the facts, the owner did not provide consent and no consent can be implied. Further, although the Skidmore Vessel was unseaworthy to the knowledge of the owner because it had the wrong propeller, the lack of consent vitiates the breach of that duty.
With respect to the liability of the owner/operator of the Atkinson Vessel, he was not keeping a proper lookout and did not instruct the other adults to keep a look out.
The apportionment of liability under the Marine Liability Act is to be handled in the same way as under the Negligence Act. The Court is to assess the degree to which each party is at fault not the degree to which each party's fault has caused the loss. In other words, the Court is to assess the respective blameworthiness of the parties. The actions of the operator of the Skidmore Vessel are far more blameworthy than those of the owner/operator of the Atkinson Vessel. He drunkenly set out in an unseaworthy vessel with reckless indifference and disregard for the safety of others. In contrast, the negligence of the owner/operator of the Atkinson Vessel was a minor lapse of care. Therefore, liability is apportioned 80% to the operator of the Skidmore Vessel and 20% to the owner/operator of the Atkinson Vessel.
The costs of the action were similarly apportioned 805 and 20%. The decision concerning costs is reported at 2016 BCSC 8
The finding that the operator of the Atkinson vessel was 20% at fault for not keeping a proper lookout might be questioned. As is apparent from the facts, the Skidmore vessel was observed prior to the collision and efforts to alert the driver of that vessel were not successful. Under these circumstances, it is difficult to say there was not a proper lookout and, even if that was true, the lack of a proper lookout was not causative. Also, in the circumstances, one might question whether the owner of the Skidmore vessel should have been held liable as she was aware it had the wrong propeller and would not plane properly. Her lack of consent had nothing to do with the unseaworthiness of the vessel.
The costs decision relating to this matter can be found at 2016 BCSC 8
Collisions – Cutting of Submarine Cable – Liability – Limitation - Meaning of "Such Loss" - Insurance – Wilful Misconduct
Peracomo Inc. v. Telus Communications, 2012 FCA 199 2014 SCC 29
Précis: The Supreme Court of Canada overturned a decision of the Federal Court of Appeal in which a vessel operator was held to be disentitled to the benefit of limitation of liability. The Supreme Court of Canada held that limitation of liability was available to the operator who had intentionally cut a submarine cable. However, the operator’s conduct did constitute “wilful misconduct” within the meaning of the Marine Insurance Act and, as a consequence, the loss was excluded from the insurance coverage.
Facts: The respondent was the owner of two submarine cables on the bottom of the St. Lawrence River. The appellants were the corporate owner and operator of a fishing vessel. The operator snagged one of the submarine cables belonging to the respondent while fishing. The operator cut the cable with a saw believing that it was not in use. A few days later he snagged the cable a second time and did the same thing. The respondent commenced these proceedings alleging negligence and damages of approximately $1 million to repair the cable. The appellants denied liability saying insufficient notice had been given of the location of the cables and that, in any event, the cables should have been buried. The appellants further disputed the damages and claimed the right to limit liability. A further issue was whether the appellants’ insurance coverage was jeopardized by reason of “wilful misconduct” on the part of the appellants.
At trial (reported at 2011 FC 494), the trial Judge found that the cables were included in notices to mariners and were shown on navigation charts and that it was the duty of the appellants to be aware of them. The trial Judge further found that it was not practical to bury the cables and held that the sole cause of the loss was the intentional and deliberate act of the appellant operator. With respect to damages, the trial Judge held that the respondent was entitled to damages in the nature of superintendence and overhead and allowed 10% for this. The trial Judge then turned to limitation of liability and noted that to avoid limitation the respondent had to prove a personal act or omission of the appellants committed either “with intent to cause such loss” or “recklessly and with knowledge that such loss would probably result”. The trial Judge held, for the first time in Canada, that this test had been met and the appellants were not entitled to limit liability. The trial Judge said that the operator had intentionally cut the cable and that the loss was the diminution in value of the cable, not the cost of repair. The trial Judge said the operator intended the very damage that occurred but just did not think the cable would be repaired. The trial Judge further held that the operator was “reckless in the extreme” and that the loss was a certainty. Turning to the insurance issue, the trial Judge referred to authorities that established wilful misconduct “implies either a deliberate act intended to cause the harm, or such blind and uncaring conduct that one could say that the person was heedless of the consequences”. The trial Judge had little difficulty in concluding this test had been met and the insurance coverage void.
On appeal (reported at 2012 FCA 199), the Federal Court of Appeal agreed with the trial Judge on the issue of liability finding, among other things, that the appellants ought to have used up-to-date charts which disclosed the existence of the cable. A liability issue raised on appeal that does not appear to have been raised at trial was whether the operator could be jointly and severally liable with the corporate appellant. The operator argued that he should not be liable as his acts were those of the corporation. However, the Court of Appeal said that employees, officers and directors are personally liable for their tortious conduct causing property damage even when their actions are pursuant to their duties to the corporation. Concerning the limitation issue, the Court of Appeal also agreed with the trial Judge that the appellants intended to physically damage the cable and that it did not matter whether they were aware of the actual loss that would result. Finally, on the insurance issue, the Court of Appeal was not persuaded the trial Judge had made an error in concluding that the conduct of the appellants was "a marked departure from the norm and thus misconduct". Further, the Court of Appeal agreed that this misconduct was the proximate cause of the loss. The appellants appealed to the Supreme Court of Canada. There were three issues on the appeal:
1. Is the operator personally liable?
2. Are the appellants entitled to limit their liability?
3. Was the loss caused by wilful misconduct such that it is excluded from coverage under the insurance policy?
Decision: Appeal allowed, in part. The appellants were entitled to limit liability but the loss is excluded from the insurance coverage.
(1) The Federal Court of Appeal correctly held that the operator was personally liable even though he was carrying out his corporate duties.
(2) The Federal Court of Appeal took too narrow a view of the intent requirement under art. 4 of the Convention on Limitation of Liability for Maritime Claims. The Federal Court of Appeal held that if the operator knew he was cutting a cable that the intent requirement is satisfied. This undermines the Convention’s purpose to establish a virtually unbreakable limit on liability and does not accord with its text. The conduct barring limitation is expressed in restrictive language. The person is entitled to limit liability unless it is proved that “the loss resulted from his personal act or omission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result”. There is some dispute in the authorities as to how specifically the loss must have been intended. Some authorities say the “very loss” intended must have resulted. Other authorities say it is sufficient if the resulting loss was the “type of loss” intended. We do not have to take a firm position on this issue as, on either view, the appellants are entitled to limit their liability. The trial Judge found as a fact that the operator thought the cable was useless. The operator did not think his actions would damage someone’s property or necessitate the repair of the cable. Therefore, there was neither “the intent to cause such loss” or “knowledge that such loss would probably result”.
(3) The policy of insurance covered the appellants in respect of their liability for damage to any fixed or movable object arising from an accident or occurrence. The policy was subject to s.53(2) of the Marine Insurance Act which excludes coverage for any loss attributable to the “wilful misconduct” of the assured. The standard of fault under s. 53(2) is not the same as the standard under the Convention. Both the purposes and the texts are different. The essence of wilful misconduct includes not only intentional wrongdoing but also conduct exhibiting reckless indifference in the face of a duty to know. The findings of fact by the trial judge make it clear that the operator’s conduct constituted wilful misconduct. He had a duty to be aware of the cable and “he failed miserably in that regard”. His conduct exhibited a “lack of elementary prudence”. His actions were “far outside” the range of conduct expected of a person in his position. He was aware he was cutting a submarine cable and had knowledge of the risk that he could be cutting a live cable. His conduct is consistent with indifference to the risk in the face of his duty to know. The fact he believed the cable was not in use is beside the point. “To hold otherwise is to conflate recklessness with intention.” Wilful misconduct does not require either intention to cause the loss or subjective knowledge that the loss will probably occur. “It requires simply misconduct with reckless indifference to the known risk despite a duty to know.”
Comment: This is obviously a critically important case on limitation of liability and what is required to actually break limitation. The decision confirms that limitation under the LLMC convention 1976 is virtually unbreakable.
Collisions - Pilotage - Whether pilot with expired certificate is a licensed pilot - - Liability of Ship Owner if Pilot not licensed
Westshore Terminals Limited v. Leo Ocean S.A. (The Cape Apricot), 2014 FC 132
Précis: The Federal Court held that a pilot whose certificate of competency issued under the Canada Shipping Act, 2001 had expired was nevertheless a “licensed pilot” within the meaning of the Pilotage Act with the result that the pilot was entitled to limit his liability and the ship owner was liable for his negligence.
Facts: On 9 December 2012 the defendant vessel collided with and caused significant damage to a trestle/causeway at the plaintiff’s coal loading facility. At the time of the collision the ship was under the command of a compulsory pilot. After the collision the pilot realized that his certificate of competency issued pursuant to the Canada Shipping Act, 2001 had expired. He took immediate steps to rectify this and his certificate of competency was renewed. Nevertheless, the ship owner brought this motion for a determination of points of law including:
(1) Was the pilot a “licensed pilot” within the meaning of the Pilotage Act;
(2) Is the pilot entitled to limit his liability to $1,000 pursuant to s. 40 of the Pilotage Act; and
(3) Is the ship owner liable for the negligence of the pilot pursuant to s. 41 of the Pilotage Act.
Decision: The pilot was a licensed pilot at the time of the collision and is entitled to limit his liability. The ship owner is liable for the acts of the pilot.
(1) This motion raises an issue of statutory interpretation concerning the meaning of the words “licensed pilot” in ss. 22(4), 40 and 41 of the Pilotage Act. The ship owner argues that the pilot was not licensed within the meaning of the Pilotage Act with the result that the pilot cannot limit his liability and the ship owner is not liable for the pilot’s negligent acts. The ship owner says it can rely upon the common law defence of compulsory pilotage. The ship owner argues that, because a valid certificate of competency is required to initially obtain a pilot’s licence, an expired certificate of competency means the license is no longer valid. The interpretation of the words “licensed pilot” begins with a consideration of the purpose of the act and the definition of the words in the act and related regulations. The purpose of the Pilotage Act is to establish compulsory pilotage areas. Safety is a paramount concern, a factor that is addressed by ensuring only qualified individuals are licensed. There are, however, no temporal restrictions on a pilot license once issued. Section 27 of the Pilotage Act gives the licensing authority the power to suspend, cancel or revoke a license. Once issued a license remains in force unless suspended, cancelled or revoked by the licensing authorities. Accordingly, the pilot was licensed.
(2) As the pilot was a “licenced pilot”, it follows that he is entitled to limit his liability pursuant to s. 40.
(3) Further, because the pilot was licensed, pursuant to s. 41 the ship owner is responsible for the acts of the pilot.
Offences – Operating a Vessel in a Careless Manner – Collision Regulations – Narrow Channels - Passing
R v. Cowan, 2014 BCPC 334
Précis: A small vessel operator was found guilty of careless operation of a vessel for transiting a narrow pass on the wrong side and creating a close quarters situation with a large passenger ferry.
Facts: The accused was charged with operating a vessel in a careless manner contrary to s. 1007 of the Small Vessel Regulations passed under the Canada Shipping Act, 2001. The charge arose out of a close quarters situation that developed between the accused’s sailboat and a large ferry in Active Pass. The ferry was transiting the pass westbound from Tsawwassen to Swartz Bay on Vancouver Island. The accused was transiting the pass eastbound but was on the North side of the pass at the pinch point at precisely the time the ferry needed to execute a 90 degree turn.
Decision: The accused is guilty.
Held: This offence is a strict liability offence meaning the prosecution must prove the offence took place and, once it does so, the accused is guilty unless he proves on a balance of probabilities that he exercised due diligence. The act of transiting Active Pass on the North side at the pinch point at precisely the time the ferry was executing a 90 degree turn was operating a vessel in a careless manner. The pass is a narrow channel and the rule is that vessels are to pass port to port. “It is careless, and without reasonable consideration for persons navigating vessels the size of the [ferry], for a person to navigate through Active Pass such that vessels pass starboard to starboard, rather than port to port.” The accused has failed to establish a defence of due diligence. He was aware of the risk of meeting a ferry and, having taken the route he did, he put himself in a position of not being able to see it until the last moment.
Tug and Tow - Vicarious Liability of Vessel for Damage caused by Tug - Collisions - Limitation of Liability
Grieg Shipping A/S v. Fortune Marine Ltd. (The Dubai Fortune), 2012 FC 1110 2013 FCA 218
Précis: The Federal Court of Appeal confirmed the trial judgment that, in the circumstances, the vessel was not vicariously liable for the negligent acts of the master of the tug.
The ship “Star Hansa” was safely moored at her berth when her propeller was struck by the tug “Tiger Shark 2”. At the time, the “Tiger Shark 2” was one of three tugs assisting in the berthing of the “Dubai Fortune”. The “Dubai Fortune” was under the command of a compulsory pilot. As a consequence of the incident the plaintiff, the owner of the “Star Hansa” brought proceedings claiming damages of $2.7 million from the owner of the “Dubai Fortune” as well as the owner of the three tugs. The plaintiff and the owner of the tugs settled the action as between them by the payment of the limitation fund of $500,000 and the proceedings against the tugs were discontinued. The settlement was conditional on the plaintiff being able to pursue the claim against the owner of the “Dubai Fortune” on the basis that the “Dubai Fortune” was vicariously liable for the negligence of the Master of the “Tiger Shark 2”. It was admitted that there was no negligence on the part of the pilot and that the “Dubai Fortune” was entitled to limit its liability. The only issues were whether the “Dubai Fortune” was vicariously liable for the negligence of the Master of the “Tiger Shark 2” and, if so, whether the limitation fund was to be calculated on the basis of the tonnage of the “Dubai Fortune” or that of the “Tiger Shark 2”. At trial (2012 FC 1110) the action was dismissed. The trial Judge held the imposition of vicarious liability requires justification which, in the case of an employer-employee relationship, is founded in the control the employer has over the manner in which the employee does his work. This control test applied to tug and tow cases and the question of whether the tug or tow has control was held to be a question of fact. The focus of the inquiry is the relevant negligent act and who was entitled to give orders or directions as to how the work should be done to prevent it. The trial Judge said in this case the pilots gave only general orders to the tugs and gave no orders at all to the “Tiger Shark 2”. The negligent act was the manner in which the “Tiger Shark 2” was manoeuvred. The trial Judge said the evidence was overwhelming that the control test had not been made out. As the “Dubai Fortune” was not vicariously liable for the negligence of the “Tiger Shark 2”, the trial Judge did not need to consider the limitation issue. The Plaintiff appealed.
Held: Appeal Dismissed.
Decision: There was no reviewable error on the part of the trial Judge.
Offences - Dangerous Operation of a Vessel Causing Death
R v. Escott, 2012 BCSC 1922
The accused was charged with dangerous operation of a vessel causing death. The charge arose out of a collision between a vessel being operated by the accused and another vessel. A passenger in the accused’s vessel died as a result. The collision occurred at night in total darkness. The accused’s vessel was displaying no navigation or running lights. The accused’s evidence was that the running lights impeded his night vision and his practice was to turn them off in conditions of reduced visibility. The accused’s vessel was proceeding at a speed of 26 miles per hour and the other vessel was proceeding at 32 miles per hour.
Decision: Accused guilty.
Held: The Crown must prove both the actus reus (the act) and the mens rea (the mental element) of the offence beyond a reasonable doubt. In this case the actus reus is the operation of a vessel in a manner that is dangerous to the public having regard to all the circumstances. The focus is on the risks created by the manner of driving not the consequences. The focus of the mens rea is whether the manner of operation is a “marked departure” from the standard of care of a reasonable person. It is not required to prove the accused deliberately operated the vessel in a dangerous manner. The accused was operating his vessel at an unsafe speed, without navigation lights, in a narrow channel where there was a risk of collision and he did not keep a proper look-out. This is operation of a vessel in a manner dangerous to the public and the actus reus is proved. With respect to the mens rea element, the accused’s manner of operation of the vessel displayed a reckless disregard of extreme risk and in the circumstances, exhibited a marked departure from the norm.
Comment: The accused was later sentenced to two years in prison. The reasons can be found at 2013 BCSC 555.
Collisions – Apportionment – Vessel Engaged in Fishing
Hogan v. Buote, 2012 PESC 10
Précis: Liability for a collision was apportioned 75% to the give way vessel and 25% to the other vessel.
This case concerned a collision involving two fishing vessels. One vessel, under the command of the plaintiff, was in the process of laying lobster traps and proceeding in a northerly direction while the other vessel, under the command of the defendant, was proceeding westerly. The defendant argued he had the right of way pursuant to Rule 15 of the Collision Regulations (the vessel which has the other on her starboard side shall give way). The plaintiff, on the other hand, said he had the right of way as he was a vessel engaged in fishing pursuant to Rule 3.
Decision: The plaintiff was 75% at fault and the defendant 25% at fault.
Held: The plaintiff, although laying traps, was not restricted in his ability to manoeuvre and therefore Rule 3 did not apply. The defendant had the right of way but he ought to have exercised greater care and his failure to see the plaintiff’s boat was a failure to keep a proper lookout contrary to Rule 5.
Limitation of Liability - Pleasure Craft - Collisions - Interest - Passengers
Buckley v. Buhlman, 2012 FCA 9
Précis: The Federal Court of Appeal upheld a decision of the Federal Court wherein it was determined that the limits of liability under the MLA applicable to “passengers” apply only to persons on board the ship seeking to limit liability.
The plaintiffs brought this action for limitation of liability under Part 3 of the Marine Liability Act. The plaintiffs were the owners of a fishing lodge that offered their guests the use of boats and motors. The defendants were a family of four who were guests at the lodge. During the defendants’ stay at the lodge they were involved in a collision between two of the plaintiffs’ boats. The first boat was operated by one of the plaintiffs and had two of the defendants as passengers. The second boat was operated by one of the defendants with the fourth defendant as a passenger. The defendants in the second boat were injured. The main issue in the case was whether the applicable limitation was under s. 28 or s. 29 of the MLA. At the time s. 29 applied to “passengers” of ships of less than 300 gross tons and provided a limit of liability of at least 2 million SDRs (approximately CDN$3 million). Section 28 applied to all ships of less than 300 gross tons except passenger claims under s. 29 and provided for a limit of liability of $1 million. (The limitations of Part 4 of the MLA, which implements the Athens Convention, were not applicable as the defendants were not passengers “under a contract of carriage”.) The term “passenger” is a defined term in Part 3 of the MLA and includes a person carried on board a vessel “operated for a commercial or public purpose”. The parties apparently presented arguments relating to whether the vessels were used for commercial purposes. However, at trial, the Judge pointed out that this argument was misplaced. The trial Judge noted that the two defendants who were injured were not aboard the vessel operated by one of the plaintiffs. Therefore, regardless of whether the vessels were used for a commercial purpose, the injured defendants were not passengers vis-a-vis the plaintiffs and the s. 29 limitation did not apply. Accordingly, the limitation applicable was $1 million under s. 28. The trial Judge further dealt with a subsidiary issue of whether the limitation amount included interest and costs and held that it did not. The defendants appealed to the Federal Court of Appeal arguing that the limitation should have been under s. 29.
Decision: Appeal dismissed.
Held: The appellate Court agreed that s. 29 of the MLA had no application as the injured parties were not on board the first boat. The Court noted that Art. 7 of the Convention on Limitation of Liability for Maritime Claims, from which s. 29 of the MLA is derived, favoured the interpretation that s. 29 applies only to persons on board the ship seeking to limit liability. A cross-appeal from the trial Judge’s decision that the limitation amount was exclusive of interest and costs was abandoned. The Court said this was a question to be left for another day.
Comment: This case concerns sections 28 and 29 of the Marine Liability Act but the Reasons for Judgment refer to the section numbers as they existed in 2006. This can be confusing for anyone familiar with the current numbering because the section numbers have since been transposed. What was s. 28 is now s. 29 and vice versa. To be consistent with the Reasons and to avoid adding to the confusion, I have decided to use the 2006 section numbers in this summary
Collisions - Inevitable Accident - Hurricane
Wolverine Motor Works Shipyard LLC v. Canadian Naval Memorial Trust, 2011 NSSC 308
In this case the defendant’s steel hulled vessel broke loose from its moorings and struck and sank the plaintiff’s sail boat which was moored alongside. The incident occurred as Hurricane Juan was pounding the Nova Scotia coast. The plaintiff alleged the defendant was negligent. The court, however, found that the defendant was aware of the approaching hurricane and prepared for it but could not have anticipated the severity of the weather. The plaintiff’s case was therefore dismissed. The Court had been particularly troubled that the defendant had led expert evidence but the plaintiff had not.
Collisions - Ship at Moorage - Liability – Damages - Betterment - Expert’s Reports -Representative Proceedings
Laichkwiltach Enterprises Ltd. v. F/V Pacific Faith (Ship), 2009 BCCA 157
This was an action for damages arising out of a collision. The plaintiff’s ship was moored at a wharf when the defendant’s vessel struck it while attempting to dock. The trial Judge held that the defendants were prima facie negligent as there is a presumption of fault when a moored vessel is struck by a moving vessel. The trial Judge accepted that there was a clutch failure on the defendant’s vessel but, in the absence of evidence of the history or maintenance of the clutch, this did not absolve the defendant of liability. The plaintiff sought a total of $105,000 in damages including approximately $14,000 for lost fishing income. The trial Judge, however, found that the plaintiff had failed to prove much of the damages it claimed and those damages it had proved were reduced by 67% to reflect “new for old” or betterment. Part of the reason for the lack of proof was the trial Judge gave no weight to the opinions of the plaintiff’s expert because the expert’s report had apparently been drafted by a lawyer and the trial Judge was uncertain as to whose opinions were expressed in the report. The claim for lost income was denied on the grounds that the plaintiff had unreasonably delayed in effecting the repairs. The plaintiff appealed the damages issues. The Court of Appeal refused to intervene with respect to the findings of what had been damaged. These were findings of fact that were supported by the evidence. With respect to "betterment" the plaintiff/appellant argued that this concept did not apply to admiralty cases. The Court of Appeal disagreed holding that betterment was commercially realistic. The Court of Appeal did, however, find that the Trial Judge had not properly calculated the betterment. The Court noted that betterment calculations must be reasonable and fair to both parties and that it must be remembered that the cause of immediate repairs was the tortious act of the defendant/respondent. In result, the Court of Appeal adjusted the betterment reduction from 67% to 33%.
Collision - Failure to give way - Contributory Negligence
Vogelsang v. Vandale, 2008 SKPC 137
This was a collision between two small pleasure craft on a lake. The Defendant admitted negligence but also alleged that the Plaintiff, the operator of the other vessel, had been partly at fault. When the collision occurred the Plaintiff had been heading west and the Defendant North. The Defendant was towing water tubers. The Defendant’s boat struck the Plaintiff’s boat at midship. The Court found that the vessels were both proceeding at a safe speed, the Plaintiff’s vessel had the right of way, and neither party saw the other before the collision. The Court held that the Plaintiff was not guilty of contributory negligence and the Defendant was solely liable. Damages were assessed at approximately $7,000 including $5,000 for pain and suffering. (Note: Even though the Defendant’s vessel was the give-way vessel in this situation and clearly failed to comply with Rules 15 and 16 of the Collision Regulations, the Plaintiff failed to comply with Rule 17 and, given the Plaintiff had not seen the Defendant before the collision, also failed to maintain a proper lookout contrary to Rule 5. The finding that there was absolutely no contributory fault on the part of the Plaintiff is difficult to understand.