This was an appeal from the Trial Division wherein the trial Judge apportioned liability for a grounding 75% to the “Lake Charles” and 25% to the “Robert John”. The case arose out of an alleged collision between the “Lake Charles” and the tug “Robert John” in the Port of Thunder Bay. The Plaintiff, the owner of the “Robert John”, alleged that, when the tug and another tug were hooked up to the “Lake Charles” to assist her to berth, the “Lake Charles” negligently drifted into the “Robert John” and caused her to go aground. The Defendants denied there was a grounding and denied negligence. The trial Judge found as a fact that there had been a grounding and further held that the parties were both partly at fault. Liability was apportioned 75% to the “Lake Charles” and 25% to the “Robert John”. The Plaintiff also claimed that its standard terms and conditions entitled it to contribution and indemnity from the Defendants. The trial Judge held, however, that the towage contract was between the Plaintiff and the charterer of the vessel. The owners and managers of the “Lake Charles”were never a party to the agreement and were therefore not bound. On the issue of damages, the trial Judge allowed damages for replacement of a rudder stock on the principle that “no deduction is made from the damages recoverable on account of the increased valued of the tug or the substitution of new for old materials”. The trial Judge disallowed damages for steering gear repairs on the grounds that the damage to the gear resulted from delay in drydocking the vessel and not from the original grounding. The trial Judge also disallowed a claim for re-drydocking to re-install the original propeller holding that this could be done at the next scheduled five year drydocking. On appeal, the Federal Court of Appeal noted that the Appellant’s arguments were virtually all related to findings of fact by the trial Judge and that such findings could not be reversed unless it was established that the trial Judge made a palpable and overriding error which affected his assessments of the facts. With respect to the trial Judge’s apportionment of liability, these findings should not be disturbed unless it can be clearly shown that the trial Judge’s conclusion was based on an error in law or a mistaken conclusion of fact. The Court of Appeal held that these tests had not been met by the Appellant and dismissed the appeal with the exception that the damages were reduced by $7,000.00 to take into account a concession that was made by the Respondent at trial.