Dryburgh v. Oak Bay Marina (1992) Ltd.

In Docks Wharves and Marinas on (Updated )

This was an action for damages caused to a pleasure craft when docks at the Defendant marina broke apart during a severe wind storm. The claim was against the marina and its President. The Plaintiff alleged that the marina was poorly designed and constructed and that the President oversaw the design and construction. The Defendants argued that they were protected by an exclusion clause in the moorage contract signed by the Plaintiff. The exclusion clause provided:

“All vessels, boathouse and ancillary equipment of the Owner stored or moored on the Company’s premises shall be solely at the Owner’s risk, and the Company shall not be responsible under any circumstances for any loss oher caused by negligence of the Company, its servants or agents or the acts of third parties, or otherwise.”

On the face of the contract were the names of three entities, one of which was the Defendant marina. There was a mark in the box next to the name of the Defendant Marina. The Plaintiff argued that the exclusion clause did not apply to relieve the Defendants of liability because the identity of “Company” was ambiguous, the clause did not extend to past defects in design or construction of the marina, and the clause did not apply to the Defendant President. On the first point the Prothonotary held that it was clear that the contract was between the Plaintiff and the Defendant marina. On the second point, the Prothonotary noted that the exclusion clause was very broadly worded. It referred to any loss or damage without limitation. The Prothonotary held that to interpret the contract in the manner suggested by the Plaintiff would be to distort the contract and produce an unrealistic result not in accord with commercial reality. On the final point, the Prothonotary held that the President was protected by the test set out by the Supreme Court of Canada in London Drugs Ltd. v Kuehne & Nagel Ltd., [1993] 1 W.W.R. 1, in that, by implication it was intended that the benefit of the exclusion clause would extend to the President and the President was acting in the course of his employment. In the result, the exclusion clause was enforced and the Plaintiff’s claim was dismissed. An appeal by the Plaintiff was dismissed for substantially the same reasons as given by the Prothonotary. The Appeal Judge did note that he found it difficult to accept that the term “Company” as used in the exclusion clause should be interpreted to include the Defendant’s President but, given the decision of the Supreme Court of Canada in London Drugs Ltd. v Kuehne & Nagel Ltd. he concluded that view was not open to him.