This was an appeal from a judgment of the Trial Division dismissing a claim under a marine insurance policy for the loss of an excavator. The excavator was loaded on the self-propelled barge, "Palaquin", and was being carried across the Strait of Georgia. During the crossing the seas became rough and the excavator shifted and ultimately fell overboard. The Plaintiff settled an action brought by the owner of the excavator and brought proceedings for indemnity pursuant to the terms of his insurance policy. The Defendant insurer denied the claim on the basis that the vessel was unseaworthy at the commencement of the journey. The Trial Judge found that the barge was unseaworthy in that it was too heavily laden for the sea conditions that could reasonably be expected and the excavator was not properly secured. She further found that the Plaintiff had knowledge of the facts that made the vessel unseaworthy. In result, the Plaintiff’s action was dismissed. On appeal, the Court of Appeal held that the Trial Judge correctly applied the test of privity, ie. whether the shipowner had knowledge of the facts constituting the unseaworthiness and knowledge that those facts rendered the ship unseaworthy or turned a blind eye to the facts giving rise to the unseaworthiness. In the result, the appeal was dismissed.