Salvage and Wrecks
Case Summaries
Wrecks - Right to Salvage Sovereign Warship - Provincial Statutes
Chameau Exploration Ltd. v. Nova Scotia (Attorney General), 2007 NSSC 386
This interesting case concerned attempts to explore what was believed to be the 1812 wreck of a Royal Navy sloop. The case came before the court as an application for judicial review of a decision of the Executive Director of the Nova Scotia Museum. The Director had declined to issue a research permit to explore the wreck under the Nova Scotia Special Places Protection Act. Such a permit was required to carry out any exploration or excavation. The decision to decline the permit was because of a letter received from the British High Commission claiming ownership and sovereign immunity over the wreck as a warship but the applicant was not given the opportunity to make submissions on the British claim. The Court held that this was a breach of procedural fairness and quashed the decision of the Director. The Court did not, however, order that the permit be granted or decide the merits of the British claim. (Note: It is interesting that no challenge seems to have been made to the constitutional validity or applicability of the Special Places Protection Act, a provincial statute. One would think it at least arguable that the provinces have no jurisdiction over wrecks and the exploration and salvage thereof.)
Salvage – Jurisdiction over Aircraft – Protection of Finders' Rights
Brooks Aviation Inc. v Boeing SB-17G, 2004 FC 710
This was an application by the Plaintiff for summary judgment in respect of a claim for salvage. The res was a B-17 aircraft that had crash landed on a lake in Labrador during the winter of 1947. The following year the aircraft sank during the spring thaw. The wreck was discovered by the Plaintiff in July 1998. The Plaintiff sought a declaration for the following relief: that the Federal Court had exclusive jurisdiction to determine the salvage claim; that the Plaintiff had a maritime lien; that the Plaintiff had possession of the res and that other parties are enjoined from interfering with the Plaintiff's salvage rights; and, that the Plaintiff was entitled to a full and liberal salvage award. On the question of jurisdiction the Court noted that the Federal Court had maritime jurisdiction and that the law of salvage was a traditional area of maritime law. The Court specifically considered whether section 449 of the Canada Shipping Act limits the law of salvage to aircraft on or over the seas, tidal waters or Great Lakes. The Court held, however, that this section did not limit the traditional maritime law which had been extended to aircraft. (Note: In reaching this conclusion the Court refused to follow a contrary decision Smith v Smith, [1979] 4 WWR 665.) The Court then turned to the salvage claims. It noted that a claim of salvage requires: that the res be in peril; that the salvor be a volunteer; and that the salvage be successful. The Court found that the res was in peril and that the Plaintiff was a volunteer but, as the aircraft had not yet been recovered, the salvage was not yet successful. Accordingly, the Court held that the Plaintiff did not yet have a salvage claim. However, the Court did indicate it was prepared to protect the Plaintiff's priority rights as finder of the res upon further application of the Plaintiff.
Joinder of Parties – Owners of Salved Property
Early Recovered Resources Ltd. v. Gulf Log Salvage Co-operative Association et al., 2003 FCT 549
This was a motion to add two associations of forestry companies who were owners of logs as either interveners or defendants in the Plaintiff’s action for salvage in respect of 17 unidentified logs from the BC coast. In the original action, the Province had been named as a Defendant but had a limited interest to stumpage fees which had likely already been paid prior to salvage. After noting that the style of cause should have been in rem to name the 17 unidentified logs, the Prothonotary held that the owners of the salved property, who would be liable for the salvage claim, should be defendants as they should have notice and be afforded the chance to protect their position. The two associations had an interest in rem in the logs (although ownership was unidentified) and an interest in protecting the existing log recovery system. The motion was granted adding the associations as defendants.
Salvage Awards
Cox v The "Trade Up", (February 20, 1998), No.T-466-95 (F.C.T.D.).
This was a reference to determine a salvage award. The Plaintiff successfully salvaged the Defendant vessel which had been stranded on rocks. The salvor had retained two other vessels to assist him in the salvage and paid the owners of those vessels what the court considered "overgenerous" amounts. The Court noted that salvage awards "are intended to award a person who comes to the aid of a vessel in distress, and to reward that person handsomely so as to encourage persons to render aid in the future. Salvage awards are not intended to provide a living for the maritime community of the area in which salvage takes place." The Court ultimately awarded the Plaintiff $15,000.00 being 1.5 times the actual and prospective out of pocket expenses of the Plaintiff.
Insurer - Whether Volunteeer
General Accident Indemnity Company v. The "Panache IV",(October 31, 1997) No. T-1497-95 (F.C.T.D.)
This case has a good discussion of salvage. The case involved a claim for a salvage award by the underwriter of the "Panache IV". The "Panache IV" had an insured value of $275,000.00 and sank in deep waters under suspicious circumstances. The underwriter, suspecting the vessel had been scuttled, undertook salvage efforts. After two failed attempts the underwriter was finally able to raise the vessel. The raising of the vessel provided crucial evidence that the vessel had, in fact, been scuttled. The salvage of the vessel cost the underwriter in excess of $307,000.00. The salved vessel was sold for slightly in excess of $30,000.00. The underwriters sought a salvage award out of the sale proceeds to defray some of the costs of the salvage. The mortgagee of the vessel, who was owed approximately $240,000.00, opposed the salvage award arguing that the underwriter was a party interested in the vessel and its services were not therefore rendered voluntarily such as to attract a salvage award. The Court, however, held that the underwriter was entitled to a salvage award and awarded the underwriter $12,000.00 plus additional expenses of $2,600.00.
Jurisdiction - Rights of the Crown
Ontario v Mar-Dive Corp., (December 20, 1996) Nos. 92-CU-60398, 92-CU-60588 & 92-CQ-21849 (Ont. Ct. Gen. Div.)
This very interesting case concerned a dispute over the ownership of and salvage rights to the S.S. "Atlantic", a double-sided wheeled paddle steamer that sank in 1852 on the Ontario side of Lake Erie. The competing claimants were the Crown in the Right of Ontario, Michael Fletcher, a diver who had found and marked the wreck in 1984, and various U.S. companies whose principals found the wreck in 1989. The U.S. companies removed various artifacts which they transported to California. They then commenced proceedings in California which resulted in a judgment granting them salvage rights and recognizing their "uncontested claim of title". The California District Court further issued an injunction against Fletcher who continued to dive on the wreck. The U.S. companies then sought to enforce this judgment in Ontario. The Ontario Court General Division, however, declined to do so. The Ontario Court held that the District Court of California did not have jurisdiction as there was no real and substantial connection with California. The Court further found that even if the California Court had jurisdiction the judgments were obtained by means of half-truths and artificiality and as such it would be against public policy to enforce them. The Court then went on to consider the claim of the Ontario Crown to ownership. The Court held that the "Atlantic" had been abandoned by her owners at the time of the sinking. It further held that the vessel became the property of the Crown either as owner of the lake bed in which the vessel had become embedded or pursuant to the Crown's Royal Prerogative which entitles it to all unclaimed wrecks.