Précis: The court held that the Administrator of the Ship-source Oil Pollution Fund does not have the right to require a claimant to execute a Release and Subrogation Agreement as a condition precedent to payment of their claim.
Facts: A vessel was reported to the Canadian Coast Guard as sinking and discharging oil. In response, the Coast Guard contained the pollution from the vessel and later raised and removed the wreck. The Coast Guard subsequently submitted its expenses relating to the pollution prevention and wreck removal to the Administrator of the Ship-source Oil Pollution Fund pursuant to the provisions of Part 7 of the Marine Liability Act. The Administrator allowed a substantial portion of the claim but requested that the Coast Guard sign a Release and Subrogation Agreement before the claim was paid. The Coast Guard refused to sign the Agreement. The Administrator then brought this application for a determination as to whether it had the right to require a claimant to execute a Release and Subrogation Agreement as a condition precedent to payment of their claim.
Decision: The Administrator has no such right.
Held: Section 106 of the Marine Liability Act provides that once an offer from the Administrator has been accepted by a claimant, the Administrator must pay the claim “without delay”. Section 106 also addresses the release of claims and the rights of subrogation that flow upon payment. There is no requirement that a claimant execute a release or subrogation agreement.