Supreme Court of Canada
R. v. Nord-Deutsche Versicherungs-Gesellschaft, [1971] S.C.R. 849
Date: 1971-04-27
Her Majesty The Queen (Respondent) Appellant;
and
Nord-Deutsche Versicherungs-Gesellschaft, United Kingdom Mutual Steam Ship Assurance Limited and Fischer Bearings Manufacturing Limited (Suppliants) Respondents;
and
Koninklijke Nederlandsche Stoomboot-Maatschappij N.V. (The Royal Netherlands Steamship Company) (Third Party Defendant) Respondent.
1970: May 5, 6, 7, 8, 11; 1971: April 27.
Present: Fauteux C.J. and Abbott, Ritchie, Hall and Pigeon JJ.
ON APPEAL FROM THE EXCHEQUER COURT OF CANADA
Shipping—Crown—Collision—Displacement of range light—Misalignment—Liability of Crown—Bank suction—Speed—Contributory negligence—Joint and several liability—Apportionment of damages—Claim by ship owner’s assignee—Claim by cargo owners—Limitation of liability—Allowance of interest—Crown Liability Act, 1952-53 (Can.), c. 30—Canada Shipping Act, R.S.C. 1952, c. 29—Civil Code, art. 1056, 1106, 1112, 1117.
As a result of a collision at the Yamachiche bend in Lake St. Peter between the upbound Transatlantic and the downbound Hermes on April 10, 1965, the Transatlantic caught fire and sank. Immediately before the collision, both ships were proceeding at full manoeuvering speed, the Hermes at 15 knots and the Transatlantic at 12. As a downbound ship approaches the anchorage area at the Yamachiche bend, it has available as an aid to navigation the range lights which are known as the Rivière du Loup lights astern, but after entering the broader waters, the ship comes to a point where the Pointe du Lac range lights are visible ahead, and it is the accepted practice to negotiate the bend by changing course so as to line up with these latter lights. It was just after the Hermes had made this turn and was lined up on the Pointe du Lac range lights that the collision occurred. The lower range light of
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Pointe du Lac had shifted over the years so that at the time in question it was some 40 feet to the south of its original position, with the result that the line indicated by the lights was some 230 feet south of mid-channel. This factor exposed down-bound ships to the risk of coming dangerously close to the south bank of the channel. Due to bank suction, the Hermes sheered to port. The trial judge was of the opinion that the reason for the Hermes being brought so far to the south as to be subject to bank suction was the fact that her pilot relied, as he was entitled to, upon the position of the Pointe du Lac range lights as indicating a safe passage through the narrow area of deep water as he entered the cut at the east end of the anchorage. It was held that the misalignment of these lights was therefore the sole cause of the collision. The Crown contended that the pilot of the Hermes should have known that the range lights which had to his knowledge been out of line in 1964 could not be relied upon to ensure a safe passing of the approaching vessel.
Held (Pigeon J. dissenting in part): The appeal should be allowed. The liability should be apportioned 50 per cent against the Crown, 30 per cent against those responsible for the Hermes and 20 per cent for those responsible for the Transatlantic.
Per Fauteux C.J. and Abbott, Ritchie and Hall JJ.: A reasonably careful and cautious pilot faced with the conditions which confronted the pilot of the Hermes before he left the anchorage area would have reduced speed or stopped so as to ensure that he would meet the upbound vessel in the wide part of the channel. He was guilty of negligence which contributed to the collision in continuing at full speed into the narrower waters without being sure of the accuracy of the range lights or the position of the Transatlantic in the channel.
The pilot of the Transatlantic was also negligent. To travel under the conditions existing on the day in question through comparatively narrow waters at full manoeuvering speed when it was apparent that there was an approaching ship already in difficulty, was a breach of the duty which a careful and prudent pilot owes to others who are using the waters in which he is navigating.
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A major share of the blame for the collision should be borne by the Crown because there was a breach of duty on the part of the servants of the Crown responsible for the care and maintenance of the range lights at Pointe du Lac and Rivière du Loup upon which lights mariners were entitled to place reliance. The Crown is not entitled to limit its liability under the provisions of the Canada Shipping Act.
Per Pigeon J., dissenting in part: In view of the fact that the seriously defective condition of the range lights persisted throughout the preceding year, without anything being done about it, the trial judge was fully justified in finding as he did that there had been a failure in the performance of duties owed to the public by a servant of the Crown, and that this was a cause of the accident. However, some other faults contributing to the accident were committed by those on board the two ships. The fact that the Transatlantic was not on her side of the channel was, of itself, prima facie evidence of a fault in navigation because it was a breach of a clear duty which was not excused by the defective condition of the range lights. Navigators are not entitled to rely on these lights exclusively. The evidence was quite decisive as to the imprudence of the Hermes in attempting to meet at full speed an incoming ship in the channel, close to the end of the anchorage, without any means of ascertaining the location of the submerged bank other than distant range lights that were known to be to a certain extent inaccurate. The Crown’s counterclaim for limitation of liability was properly dismissed.
The contention that if this Court found common fault chargeable to the Crown and to the Hermes, the suppliants should not be entitled to recover from the Crown for the Hermes share of responsibility because that share is subject to the possibility of limitation of liability, should be rejected. The limitation of liability is a purely personal exception within the meaning of art. 1112 of the Civil Code, Therefore, the limitation of liability which the owner of the Hermes may be entitled to cannot be invoked by the Crown against the suppliants. Under art. 1117 of the Civil Code, the Crown in entitled to claim from the Hermes an amount equal to the latter’s share of their joint and several obligation.
Because this is a claim governed by the Civil Code the admiralty rule of s. 648 of the Canada
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Shipping Act is not applicable to the claim of the cargo owners. They are entitled to recover in full from the Crown. However the Crown is entitled by reason of the fault for which the Transatlantic is liable, to set off against the share of the ship owner in the total damages recoverable by its assignees, 20 per cent of the whole damages including the loss of the cargo. For this reason, the recovery from the Hermes ought to be defined as three eighths of the condemnation including interest and cost, subject to limitation of liability.
Interest of 5 per cent on the amount recoverable should be allowed from the date of the filing of the petition of right. Article 1056c of the Civil Code is properly applicable to a claim against the Crown by virtue of the Crown Liability Act.
APPEAL from a judgment of Noël J. of the Exchequer Court of Canada, in which the Crown was held liable for a collision between two ships in the St. Lawrence River. Appeal allowed, Pigeon J. dissenting in part.
Jules Deschênes, Q.C., P.M. Ollivier, Q.C., P.M. Troop, Q.C., and B.M. Deschênes, Q.C., for the appelant.
F.O. Gerity, Q.C., A.S. Hyndman, Q.C., Jean Brisset, Q.C., and P.C. Cathcart, for the respondents.
The judgment of Fauteux C.J. and of Abbott, Ritchie and Hall JJ. was delivered by
RITCHIE J.—This is an appeal from a judgment of the Exchequer Court of Canada1 whereby it was found that the displacement of the Pointe du Lac front range light plus the misalignment of the Riviere du Loup range lights was the sole cause of a collision which took place at the Yamachiche Bend in Lake St. Peter between the upbound M/V Transatlantic and the downbound M/V Hermes in the early morning of April 10, 1965, as a result of which the Transatlantic caught fire and sank. The reasons for judgment of the Exchequer Court, rendered by Mr. Justice Noël, are reported in [1969] 1 Ex. C.R. at pages
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117 to 240, and I would adopt the following findings of fact which are to be found in those reasons:
1. That at the time of the collision it was a fine day with maximum visibility, little or no wind and virtually no ice of any consequence in Lake St. Peter (page 123).
2. There were a few winter buoys on the north side of the channel between Riviere du Loup and Yamachiche Bend. There were no buoys on the south side of the channel. (page 123).
3. The collision occurred at 0628 hours and about two cables down River from the eastern end of Yamachiche Bend. (page 126).
4. The southerly displacement of the Pointe du Lac front light had reached 25 to 30 feet by the year 1964 and it is not unreasonable to assume that the actual movement by the time of the accident was some 40 feet. (page 135).
5. The pilot of the Hermes knew that in 1964 the line up of the lights of Point du Lac did not take a vessel along the center of the channel but somewhat south thereof. (p. 149).
6. Immediately before the collision both vessels were proceeding at full manoeuvring speed, the Hermes at 15 knots and the Transatlantic at some 12 knots. (page 125).
The stretch of water known as Lake St. Peter is a portion of the St. Lawrence River 6 miles in width, running from southwest to northeast for a distance of some 14 miles through which a ship channel has been dredged to a minimum depth of 35 feet. This channel is 550 feet in width but at the Yamachiche Bend there is an anchorage area where the minimum depth of 35 feet extends over a width of 2000 feet. As a downbound ship approaches the anchorage area it has available as an aid to navigation the range lights which are known as the Riviere du Loup lights astern, but after entering the broader waters, such a ship comes to a point where the Pointe du Lac range lights are visible ahead, and it is the accepted practice to negotiate the Bend by changing course so as to line up with these latter lights. As the
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Bend is negotiated, the channel reverts to a width of 550 feet and the Pointe du Lac range lights are intended to indicate the center line of this channel. Although in the summer time there is a buoy placed on the southward side of the channel so as to indicate this turning point, there were no buoys on the southern side of the channel at the time of this accident. It was just after the Hermes had made this turn and was lined up on the Point du Lac range lights that the collision occurred.
The two ships came together at 0628 hours of the early morning of the 10th of April, 1965, in broad daylight when the weather was clear, and it is conceded that the lower range light of Pointe du Lac had shifted over the years so that at the time in question it was some 40 feet to the south of its original position, with the result that the line indicated by the lights was some 230 feet south of mid-channel. I agree with the learned trial judge that this factor exposed downbound vessels to the risk of coming dangerously close to the south bank of the channel, and that the collision would probably not have occurred if the light had been in place. This, however, is far from saying that the misalignment of the range light was the sole cause of the accident.
I think it desirable at this stage to indicate the various interests represented in this litigation and in so doing I am greatly assisted by the synopsis prepared by the learned trial judge at pages 119 to 123 of his judgment.
The suppliant, Nord-Deutsche Versicherungs-Gesellschaft, is a hull and machinery underwriter acting herein on its own behalf and also on behalf of all those underwriters concerned or having an interest in certain policies of insurance covering hull and machinery, crew’s personal effects and radar and wireless equipment. The United Kingdom Mutual Steam Ship Assurance Association Limited is the protection and indemnity club in which the Transatlantic was entered at the time of the accident. The third suppliant, Fischer Bearings Manufacturing Limited, is acting on its own behalf as a consignee of cargo on board the Transatlantic and also on behalf of all those interested in the cargo. The respondent, Her Majesty the Queen, contested the petition and instituted
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third party proceedings against the Royal Netherland Steamship Company, the owner of the Hermes, in which latter proceedings the statement of claim alleged that the collision between the two vessels had been caused by the fault and negligence of the third party and its servants, officers and pilot aboard the Hermes. By this proceeding the Crown asks that the third party be condemned to indemnify it for any damage it might be condemned to pay by the judgment to be rendered in the action between it and those representing the Transatlantic interests.
The Crown and the Royal Netherlands Steamship Company both claim to be entitled to limit their liability pursuant to different sections of the Canada Shipping Act.
The Hermes had spent the previous night at Sorel and had left at approximately 5:16 a.m. bound for the open sea, whereas the Transatlantic, having berthed at Trois Rivieres on the previous night, had left at about 5:05 a.m. on its route up the River to Montreal. The two ships were of much the same size. The Hermes was 420 feet in length, 57.6 feet in width with a gross tonnage of 5,708 tons and a net tonnage of 3,154 tons. She was partly laden with a general cargo of 2,500 tons and was drawing 16.7 feet forward and 20 feet aft.
The Transatlantic was 407 feet in length with a mean draft of 19 feet and a width of 54 feet. Her tonnage was 5,521 tons gross and 3,215 tons net.
The course followed by the Hermes while in Lake St. Peter is described by the learned trial judge in the following summary at page 124:
At 0535 hours, the lower light of the Ile de Grace leading lights was brought abeam on the port hand and shortly thereafter the HERMES entered Lake St. Peter; at 0610 hours, the light pier in the centre of no. 2 curve in Lake St. Peter was brought abeam on the port hand, the bearing being taken on the centre light. The HERMES had up to this point guided herself along this course by means of the leading lights known as Riviere du Loup range lights, situated at curve no. 2. …These ranges were used to lead the HERMES down to curve no. 2 by keep-
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ing the vessel in line with them and once these ranges were reached, the same front range lights with a different back light, however, were used to guide it further down and beyond this point (by keeping them in line directly astern of the vessel) towards a point in the channel called Yamachiche bend where, at some point in the middle of the bend, other range lights, the Pointe du Lac lights, were available and made use of. Immediately after reaching the curve and whilst steering on the Riviere du Loup downbound ranges, the HERMES successively met and passed three inward bound vessels (the MONTCALM, the LUNDEFJELL and the THORSRIVER) about half a mile to two miles apart from each other without incident; there was no reduction of speed and the ships were passed port to port at a normal and safe meeting distance.
The learned trial judge proceeded to trace the course followed by the Hermes after lining up with the Pointe du Lac leading beacons and he stated, at pages 124 and 125, as follows:
…when the vessel had been steadied on her new course, she then made use of what the pilot and her officers considered as the only reliable aid to navigation at that point, namely, the range lights at the lower end of the course known as the Pointe du Lac range lights situated some five miles from Yamachiche bend. The chart on board the HERMES at the time …showed that when the Pointe du Lac range lights came in line, they were intended to show a bearing of 056 degrees 13 minutes and indicate the centre line of the channel.
Having brought herself into position with the two range lights, the HERMES proceeded down-stream with the M/V TRANSATLANTIC coming upstream some short distance away. Both vessels were proceeding at full manoeuvring speed, the HERMES at 15 knots and the TRANSATLANTIC at some 12 knots. The M/V TRANSATLANTIC at this time was also making use of the Pointe du Lac range lights but had them astern instead of having them in front as the HERMES.
Both vessels were anticipating a normal port to port meeting, but as the learned trial judge further explains at page 125:
Very shortly after, and at a time when the vessels were about three ship lengths apart and still shaping courses to pass safely and all clear port to port, the
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head of the HERMES swung to port and despite instant corrective starboard helm actions, as observed by the position of the indicators and the fact that the engine was put full speed astern, the head of the HERMES still continued to swing rapidly to port. To those on the TRANSATLANTIC, this turn to port became increasingly fast until it became obvious that the HERMES was out of control and was sheering across the channel and that a collision was inevitable.
A great deal of evidence was called to prove that the violent sheer to port by the Hermes which was the immediate cause of the collision was occasioned by her having been brought too close to the south shore of the channel and having thus been exposed to a phenomenon described as bank suction which occurs when, because of a ship’s proximity to a channel bank, its stern is drawn closer to the bank and the bow thus moves away from it. The force of this suction is described by Captain Goulet, who has had long experience on the St. Lawrence River, as being proportionate to the speed of the vessel and the proximity of the bank so that the closer the ship is to the bank and the greater her speed, the more suction is felt and the more difficult the vessel is to control. In my opinion the Hermes was brought so close to the south shore of the channel that she did become a prey to the forces induced by bank suction which caused her bow to be thrust to port out of control of her rudder and engines and it was the sheer to port so induced which was the immediate cause of the collision with the upbound Transatlantic.
The learned trial judge was of opinion that the reason for the Hermes being brought so far to the south as to be subject to bank suction was the fact that her pilot was entitled to rely and did rely upon the position of the Pointe du Lac range lights as giving him a safe passage through the narrow area of deep water as he entered the cut at the east end of the anchorage and that the misalignment of these lights was therefore the sole cause of the collision.
The appellant, however, contends that the pilot of the Hermes should have known that the range
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lights which had to his knowledge been out of line in 1964 could not be relied upon to ensure a safe passing of the approaching vessel.
As I have indicated, the fact was that in 1964 the lower light of the Pointe du Lac range lights had shifted from 25 to 35 feet to the southward and in this regard pilot Belisle of the Hermes testified:
[TRANSLATION] It was known that the lights were a little to the south of the center of that area.
After having made the turn so as to line up with the Pointe du Lac lights, pilot Belisle, who had just negotiated a difficult bend, was faced with an upbound ocean going vessel almost immediately ahead of him which was also travelling at its full speed (12 knots). The situation at this time was that the pilot knew that by following the range lights he would be put somewhat to the south of the center line of the channel and he appears to have taken it for granted that the approaching vessel was on the northern side. As a matter of fact, as will hereafter appear, the Transatlantic was slightly to the south of the center line, but this was not appreciated on board the Hermes. I think that it must be accepted that pilot Belisle did not know where his ship was in the channel when he entered the cut at the east end of the anchorage, and it is also apparent that he did not know where the Transatlantic was in relation to the banks of the channel. Under these circumstances pilot Belisle does not appear to have sought any means of determining the position with more accuracy but was content to rely upon the range lights without reducing speed.
As I have indicated, at the time of the accident there were spar buoys placed on the northern side of the channel and according to the evidence of the pilot Vallee of the Transatlantic, he had inquired from the signal service and been advised that these buoys had been checked the day before. In my opinion, having regard to the provisions of s. 10(4) of the Pilotage Regulations, pilot Belisle should have been in the possession of the same information. The section in question reads:
10. (4) Every pilot shall, before his departure to pilot any vessel, comply with any standing orders
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made by the Supervisor and shall obtain from the pilotage office information as to the state of the buoys, beacons and channels in the District.
Belisle did not make any inquiries but acted on the assumption that the buoys were not a reliable guide in winter time. The learned trial judge expressed the view that neither of the vessels would have been justified in placing any reliance on the spar buoys having regard to the notice to mariners issued by the Director of Marine Works of the Department of Transport on the 13th of November 1964 and numbered 932 which reads:
Commercial shipping using the St. Lawrence River Ship Channel between Montreal and Quebec is hereby warned that floating aids to navigation cannot be depended upon after November 30 owing to possible ice conditions
and Mr. Justice Noël, speaking of the fact that the Transatlantic was in a better position to use the northerly buoys than the Hermes, said at page 162:
…they were also subject to the admonition of November 13, 1965, (this should obviously read 1964) issued by respondent that they should not rely on them during winter navigation, but use instead fixed aids, such as the range lights of Pointe du Lac. Having regard to this advice, the use of these lights in the same manner as they had been using them in 1964 and without any reason to anticipate that circumstances had changed in the meantime, was not, in my opinion, negligence, and cannot be regarded as a cause of the collision.
With the greatest respect, it appears to me that the learned trial judge has very substantially overstated the terms of the notice to mariners (No. 932) which is reproduced at page 127 of his judgment in the form in which it appears in paragraph 14 of the suppliants’ petition. The notice makes no reference to the use of the range lights of Pointe du Lac and in my opinion, in the present case, as the northern spar buoys were in place, it would have been prudent to make use of them.
In my opinion a reasonably careful and cautious pilot faced with the conditions which confronted Belisle before he left the anchorage
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area would have reduced speed or stopped so as to ensure that he would meet the upbound vessel in the wider part of the channel and I think that he was guilty of negligence which contributed to the collision in continuing at full speed into the narrower waters without being sure of the accuracy of the range lights or the position of the Transatlantic in the channel. In this regard, pilot Belisle gave the following somewhat extraordinary evidence:
[TRANSLATION] Q. On April tenth (10th), did you consider the possibility of meeting the TRANSATLANTIC in the anchorage, when you saw it some distance away?
A. Oh yes, if I were going to meet it, it would be in the anchorage, I was the down bound ship, “le bateau descendant”.
Q. Did you consider this possibility, of meeting it in the anchorage?
A. No, perhaps I might have done so, but I did not consider the danger that might be involved.
It appears to me to be obvious that pilot Belisle must have known that he was going to have to meet the Transatlantic and his answers appear to indicate that he appreciated the desirability of waiting in the anchorage.
It is said on behalf of the Hermes that on her way down from Sorel to the anchorage area she had passed three vessels in safety and that she had passed other vessels below the anchorage in reliance on the Pointe du Lac range lights as they existed in 1964. I do not think that any of these arguments is sufficient to justify the course taken by the Hermes in advancing towards a position of potential danger at full speed and without having ascertained with certainty its position in the channel. The finding of the learned trial judge that there was no negligence on the part of the Hermes is expressed in his reasons for judgment at page 154 in the following terms:
The navigators of the HERMES (and in particular the master and officers) however, had no way of knowing at the time, and there is no reason why they should have apprehended that they were being led astray by the range lights into an area in proximity to the bank (the latter being covered with water and not perceptible in any manner) where there was danger of bank effect. Under these circumstances, it is difficult to see how they can be faulted for the
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speed at which their vessel was operated at the time (15 knots) even if such speed would increase the unforseeable bank effect on their vessel. Had the HERMES been on the course on which the lights would have guided her in 1964, as the pilot was entitled to assume that she was, with the ranges in line, there was no imprudence in entering the cut at the east end of the anchorage at full manoeuvering speed and there would have been no accident had this been the case.
In my view the actions of the Hermes is not to be judged in terms of the knowledge of her master and officers. Belisle, a pilot with long experience in the St. Lawrence River, was operating in broad daylight under conditions of perfect visibility and could have made use of the spar buoys on the north side of the channel in order to assist him in determining how far south of the center line his ship was heading. After careful consideration of all the circumstances, I am satisfied for the reasons which I have indicated, that the actions taken and the course followed by pilot Belisle amounted to negligence and that this negligence contributed to the collision.
The learned trial judge notes that the experienced assessor who sat with him at the trial agrees that “there was no imprudence in entering the cut… at full manoeuvring speed…” but it is worth observing the trial judge’s comment on the assessor’s opinion where he reports at page 154 that:
He added, however, that after listening to the evidence in this case, he thought it would be a good thing for the authorities to regulate the speed of vessels during winter navigation in this channel.
In my view it would not only be “a good thing for the authorities to regulate the speed of vessels” under the circumstances here disclosed, but it would have been the prudent thing for pilot Belisle to so regulate the speed of the Hermes as he left the Yamachiche anchorage on the day in question.
The pilot of the M/V Transatlantic stated that at a distance of 3 miles he noticed that the Hermes was acting strangely. At this time the Hermes was still in the anchorage and the learned trial judge found that she had been led somewhat to the south of her proper course because of the
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displacement of the Riviere du Loup lights. He did not, however, think that her movements had been as strange as those described by the Transatlantic pilot. In any event, the Transatlantic did nothing to reduce speed or otherwise prepare for potential difficulty and by the time she was 1/2 to 3/4 of a mile away it was apparent that the Hermes was in real difficulty and that she was making her turn into the cut more suddenly than she should have done. This pilot stated that he was being guided by the northerly buoys which he knew to be in place, but I am nevertheless in agreement with the learned trial judge that as the two vessels approached each other, the Transatlantic was not on the northern side of the channel but probably on the center part or even somewhat to the south thereof and it follows that I agree with the finding that she was not as close to the north buoys as her pilot said she was. The learned trial judge attributes her position to the misalignment of the range lights, but it seems to me to be clear from the pilots’ own evidence, that he had ample opportunity to rely upon the buoys which he knew to be in place.
To travel under the conditions existing on the day in question through comparatively narrow waters at full manoeuvring speed when it was apparent that there was an approaching ship which was already in difficulty, appears to me to have been a breach of the duty which a careful and prudent pilot owes to others who are using the waters in which he is navigating. In this regard, it appears to me to be helpful to refer to s. 12 of the St. Lawrence River Regulations which stipulates that:
A vessel navigating against the current or tide shall before meeting another vessel at any sharp turn or narrow passage, or where the navigation is intricate, stop, and if necessary, come to a position of safety below or above the point of danger and there remain until the channel is clear.
The pilot of the Transatlantic was navigating against the current and should have realized before the Hermes left the anchorage area that he was going to be faced with a situation where navigation would be intricate. If he had complied
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with section 12 of the Regulations when he first saw the difficulties of the Hermes, it is quite possible that the accident would never have taken place. As I have indicated, the initial cause of this collision was the misplacement of the Point du Lac range light, but the collision, in my opinion, became inevitable when the two ships continued to approach each other at full speed under the circumstances which I have outlined. There is considerable evidence concerning the action taken by both ships after the Hermes entered the narrower waters and started to be affected by bank suction. In my view at this stage the collision was inevitable and if it was an error in judgment of the Hermes to put her engines full astern, it was an error made in the most stringent circumstances and in the hope of avoiding imminent disaster.
In my opinion a major share of the blame for this collision should be borne by the appellant because, for the reasons stated by the learned trial judge, I am of opinion that there was a breach of duty on the part of servants of the Crown responsible for the care and maintenance of the range lights at Pointe du Lac and Riviere du Loup upon which lights mariners were entitled to place reliance. I agree with the learned trial judge that the evidence supports the finding of liability on the part of the Crown such as was found to exist in the case of Grossman v. The King, and I further agree that for the reasons which he has stated, the Crown is not entitled to limit its liability under the provisions of the Canada Shipping Act, R.S.C. 1952, c. 29, s. 660.
The liability to make good the damage occasioned by this collision should be borne 50 per cent by the appellant, 30 per cent by those responsible for the navigation of the M/V Hermes, and 20 per cent by those responsible for the M/V Transatlantic.
As I see no reason to disturb the findings of fact made by the learned trial judge to the effect that the capsizing of the Transatlantic on the evening of the 10th of April was not a natural and direct consequence of the collision which had
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taken place 12 hours earlier, I would dismiss the cross appeal of the respondent United Kingdom Mutual Steam Ship Assurance Limited.
No blame attaches to those interested in the cargo who are entitled to recover 100 per cent of their damages. As the obligation to the cargo owners’ representatives arises from the common fault of the appellant and the two ships concerned, the provisions of art. 1106 C.C. must govern. That article reads:
1106. The obligation arising from the common offence or quasi-offence of two or more persons is joint and several.
In the result, the suppliants, other than Fischer Bearings Manufacturing Limited, which represents the cargo interests, will recover 80 per cent of their damages from the appellant. Fischer Bearings Manufacturing Limited, however, recovers 100 per cent of its damages from the appellant, but the appellant is entitled to recover 20 per cent of such amount from the representatives of the owners of the Transatlantic.
Subject to the disposition which may hereafter be made of the third party’s counter-claim for limitation of liability, the appellant is entitled to recover from the third party 30 per cent of the total damages sustained by those on whose behalf claim has been made by the suppliants.
The damages should bear interest at the rate of 5 per cent from the day of the deposit of the Petition of Right in accordance with the provisions of art. 1056c C.C., s. 3(1)(a) and 2(d) of the Crown Liability Act, 1952-53 (Can.), c. 30 and s. 3 of the Interest Act, R.S.C. 1952, c. 156. In this regard I agree with the careful reasoning of the learned trial judge at pages 232 to 240 of his reasons for judgment.
The appeal should be allowed and the judgment of the Exchequer Court varied by replacing para. 1 and 2 by the following:
1. The suppliant’s Petition of Right is maintained with costs and the suppliants, other than
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Fischer Bearings Manufacturing Limited, declared entitled to 80 per cent of whatever damages may be assessed from the respondent; the suppliant Fischer Bearings Manufacturing Limited is entitled to the full amount of its damages from the respondent and the latter is entitled to deduct 20 per cent of such amount from the other suppliants, representing the owners of the Transatlantic, with interest on the net amounts at the rate of 5 per cent per annum from the date of the deposit of the Petition of Right.
2. The third party proceedings taken by respondent against the third party defendant are maintained with costs and the respondent is entitled to recover from the defendant thirty per cent of the total damages sustained by those on whose behalf claim has been made by the suppliants, including a proper proportion of interest and costs, subject to whatever order may be made on the third party defendant’s counter-claim for limitation of liability.
The case should be referred back to the Exchequer Court for the disposition of the counterclaim by the third party defendant and the assessment of the suppliants’ damages.
The appellant having achieved substantial success in this appeal will have its costs in this Court against the respondents other than Fischer Bearings Manufacturing Limited which is entitled to its costs throughout and I would not disturb the order as to costs in the Exchequer Court in respect of the other suppliants. The Crown will have its costs against the third party throughout.
PIGEON J. (dissenting in part)—On April 10, 1965, shortly after 5.00 a.m., the M.V. Transatlantic and the M.V. Hermes went on their way in the St. Lawrence River. The ice was not completely gone and, under the rules governing winter navigation, sailing was not permitted in the darkness. The Transatlantic upbound had put in at Trois-Rivières, the Hermes downbound, at Sorel. The two ships were therefore due to meet
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in Lake St. Peter. It was a fine day with perfect visibility, practically no wind and virtually no ice floes in the lake.
The two ships were of almost equal size. The Transatlantic was 407 feet long, 54 feet wide, drawing 19 feet and bearing 5,521 tons gross. The Hermes was 420 feet long, 57.7 wide, drawing as partly loaded 16.7 feet forward and 20 feet aft, her gross tonnage was 5,708 tons. Both were proceeding at full manoeuvering speed i.e. about 12 knots for the Transatlantic, 15 knots for the Hermes.
Lake St. Peter is a stretch of the River St. Lawrence some 6 miles wide and 14 miles long, running from south-west to north-east. The natural depth is only about 10 feet but a ship channel has been dredged to a minimum of 35 feet. There are several bends one of which, a little below the middle of the lake, is known as the Yamachiche bend. The channel was at the time 550 feet wide, but, on the south side of the Yamachiche bend, a wide anchorage had been dredged extending the width to some 2,000 feet over something like a mile. At that point, a down bound ship comes guided by what is known as the Rivière du Loup Range from curve no. 2 above until she reaches, more than half way down the wide anchorage, the intersection of the Point du Lac Range. This is a very long range that was then marked by a rear light on shore and a front light on a crib built for that purpose in the lake outside the channel more than a mile off shore. There were some winter buoys, spar buoys, marking the north side of the channel. The southern side was unmarked.
The Hermes went past the lower end of the anchorage while the Transatlantic was getting close. It was soon apparent when the latter was only three ship lengths away, that the Hermes was sheering to port. It is not now disputed that this was due to bank suction. The sheering could not be counteracted by helm action. The engine was reversed while the Transatlantic was veering to starboard. A collision occurred about three ship lengths below the end of the anchorage. As a re-
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sult, the Transatlantic took fire. This could not be extinguished, the ship was abandoned and ultimately capsized and sank a little lower down in the channel.
Proceedings were instituted by petition of right under the Crown Liability Act in the Exchequer Court. The three suppliants were:
1. Nord-Deutsche Versicherungs-Gesellschaft (“Nord-Deutsche”), a hull and machinery insurer representing all the underwriters or others interested in various policies covering the Transatlantic;
2. United Kingdom Mutual Steam Ship Assurance Association Limited (“United Kingdom Association”), the Protection and Indemnity Club in which the Transatlantic was entered;
3. Fischer Bearings Manufacturing Limited (“Fischer Bearings”), a consignee of cargo on board the Transatlantic representing all those interested in the cargo.
The basis of the claim against the Crown is that the crib on which the lower light of the Pointe du Lac range stood had shifted from its original position to such an extent that, at the date of the collision, the range, instead of leading ships in mid-channel, led them dangerously close to the submerged south bank of the channel at the lower end of the anchorage area. On behalf of the Crown, it was contended that the collision was due to the fault of both ships involved and, in addition to a statement of defence giving particulars of such faults, third party proceedings were instituted claiming indemnity from the owner of the Hermes, Koninklijke Nederlandsche Stoomboot-Maatschappij N.V. (The Royal Netherlands Steamship Co.). The latter filed, in addition to a defence, a counter-claim for limitation of liability. Subsequently, a counter-claim for limitation of liability was also filed on behalf of the Crown on the basis that the channel through Lake St. Peter was a canal within the meaning of s. 660 of the Canada Shipping Act.
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The trial judge found as a fact that at the date of the accident the crib supporting the front light of the Pointe du Lac range had shifted almost exactly 40 feet south of its original position so that, due to the 5.4 admitted multiplication factor, the range lights instead of leading up the centre line of the channel, led dangerously close to the south bank at the end of the anchorage area, a point shown on the charts as the site of buoy 51L. This finding was not challenged in this Court.
The trial judge found liability against the Crown on the basis that the defective condition of the front range light was due to a quasi-delict committed by servants of the Crown and also to a breach of duty attaching to the ownership, occupation, possession or control of property. He was also of opinion that the damage could be considered as caused by a thing under the control of the Crown within the meaning of art. 1054 of the Quebec Civil Code.
It does not appear necessary to consider any basis other than the first. Assuming that to support a judgment on that ground it is necessary, as contended by counsel for the appellant, to identify the servant and the specific fault chargeable to him, there is in the record ample evidence of omissions on the part of some public servants that are in law faults committed in the performance of their duties. That the proper maintenance of the range lights was at the material time within the scope of duties of at least one of those servants, namely the District Marine Agent, is not denied. It is clear that those duties were owed to the public using the channel in the same way as the duty to maintain a public airport in the proper condition was held to be owed to the public thus making the Crown answerable for the negligence of the servant omitting to perform it in Grossman v. The King.
The trial judge found that in the year preceding the accident, that is in 1964, the displacement of the front light pier of the Pointe du Lac range had
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reached between 25 and 30 feet and he also found that the pilots were all aware that these range lights did not mark the center of the channel but were open to the north. What was known by the pilots ought to have been known by the man whose duties included:
…to be responsible for the direction and administration of all departmental activities pertaining to the construction, operation and maintenance of aids to navigation within the Sorel District; to direct the operations of Canadian Marine Service steamers engaged on this work, in supplying and placing aids to navigation;…
The pilots did not know that the defective condition of the range lights was due to the displacement of the front pier and I agree with the trial judge that they could not be blamed for not trying to find out. However, it was otherwise for the man responsible for the proper maintenance of the range lights. A defect that was obvious to anyone properly piloting a ship down the range ought to have been ascertained by the man responsible for the maintenance of the range lights. Due to the vital importance of the proper alignment of those lights, once he knew of their defective condition, it was his strict duty to ascertain the cause and to take steps to correct the situation. In view of the fact that a seriously defective condition persisted throughout the preceding year, without anything being done about it, it appears to me that the trial judge was fully justified in finding as he did that there had been a failure in the performance of duties owed to the public by a servant of the Crown and this was a cause of the accident. As this is sufficient to support a conclusion adverse to the appellant on the issue of liability, it does not appear necessary to consider the other bases on which the trial judge relied and I express no opinion on those points. However, it is necessary to consider whether some other faults contributing to the accident were committed by those on board the two ships.
With respect to the Transatlantic, the trial judge made the following finding (p. 162):
…the only inference that can be drawn is that the Transatlantic was not on the northern side of the
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channel but probably on the centre part or even somewhat to the south thereof if the lateral distance of both vessels, as stated by their navigators, is considered. The vessel was, at the time, lined up on the Pointe du Lac ranges which were opened to the north and, therefore being conducted, as all pilots conducted ships in 1964, on the assumption that so operated they would effect a safe passage. Although the navigators of the Transatlantic were closer to the six north buoys which incidentally were at variable distances from each other (some were one half mile, others one mile apart over a total distance of some five miles) than those on board the Hermes, and in a better position to use them, they also were subject to the admonition of November 13, 1965, issued by respondent that they should not rely on them during winter navigation, but use instead fixed aids, such as the range lights of Pointe du Lac.
In my view, with respect, the trial judge has greatly overstated the effect of the Notice to Mariners of November 13, 1964 which read:
Commercial shipping using the St. Lawrence River Ship Channel between Montreal and Quebec is hereby warned that floating aids to navigation cannot be depended upon after November 30th owing to possible ice conditions.
This notice in general terms routinely issued every year at the proper time did not mean, it seems to me, that buoys were to be ignored throughout the winter season. This would have made them useless. If the Department was going to the trouble and expense of putting some winter buoys in place, this certainly implied that they were intended to be of some use. What the notice said was merely that owing to possible ice conditions “they cannot be depended upon”. However, as was his duty under the regulations, the pilot on board the Transatlantic inquired from the proper authority as to the condition of the buoys before leaving port. He was told that the buoys had been checked the previous day. As there was practically no floating ice he thus knew that the buoys were reliable. Under those circumstances, the general notice did not mean that he was not to rely on them but only on the range lights.
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In connection with his finding that the Transatlantic was not on the northern side of the channel prior to the collision, the trial judge stated (at p. 162):
I say this notwithstanding Vallée’s evidence that the northern buoys were being used as a guide and that the starboard side of the vessel was some 100 to 150 feet away from them. Had this been so, I have no doubt that the impact of the Hermes, together with the 30 degree starboard action taken by the Transatlantic would have projected the vessel against the north bank.
It will be noted that Vallée did not say that he had paid no attention to the buoys on the north side of the channel. On the contrary, he said he had used them as a guide and he also claimed he had kept the starboard side of his ship between 100 and 150 feet from them. Of course, this cannot be reconciled with the contention that he was at the same time navigating by the range lights and it is also inconsistent with the other facts noted by the trial judge. This being so, why was the erroneous statement made with respect to the position of the ship relative to the buoys if not that the pilot was fully aware that it was his duty to navigate the ship as he said he did.
The fact that the Transatlantic was not on her side of the channel was, of itself, prima facie evidence of a fault in navigation because it was a breach of a clear duty. Was this breach fully excused by the defective condition of the range lights? I do not think so. There can be no doubt that this condition did contribute to the accident because navigators were entitled to rely on those lights. This does not mean that they were to rely on them exclusively. With deference, the trial judge made an error in law in so holding by reason of the Notice to Mariners above quoted. While I agree with him that the pilot did not know of the most recent displacement of the range, he did know that the range did not lead down the center of the channel and that the buoys were reliable. These were on his side of the channel and there was no reason not to use them as he claims that he did. It should also be noted that where the accident occurred, there were two buoys on the north side of the channel: one near the end of the anchorage, the other 3,100 feet below. There was
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no reason for a competent pilot to be unable to line up properly within 100 and 150 feet from the northern side of the channel as marked by those buoys. This was specially imperative due to another ship coming down, namely the Hermes. In order to ensure a safe meeting at full speed, it was necessary that the Transatlantic should be well on her side of the channel.
As to the Hermes, her pilot was for the first time navigating a vessel down the St. Lawrence without the aid of buoys on the south side of the channel through Lake St. Peter. The trial judge held that he could not be blamed for not using the buoys on the north side of the channel and not enquiring as to their accuracy, not only on account of the aforementioned Notice to Mariners but also because, under the conditions prevailing at the time, these buoys were for him difficult to use and of doubtful assistance. With reference to evidence on this point, he said (at p. 150):
According to Captain Atkinson, these buoys could only have been of some assistance to the Hermes had they been lined up and this was possible at one spot only, i.e., when the ship came off Rivière du Loup downbound lights to come up to the Pointe du Lac lights. This would have, therefore, been possible for a few fleeting seconds only and at about 900 feet from buoy 54L, at a time when the Hermes was guiding herself on another defective light, the downward Rivière du Loup beacon (which the evidence established guided her some one hundred feet south of her proper position) and when her navigators were looking towards the Pointe du Lac lights, as they had to,….
I would not venture to disagree on this technical point. The situation with respect to the use of the buoys was not at all the same for the downbound ship that did not have any on her side as for the upbound ship that had several on her side of the channel.
There remains to be considered what the trial judge termed (at p. 153) “the main criticism levelled at the navigators of the Hermes”. “It is that they entered a narrow part of the channel at full speed during winter navigation when a meeting with the Transatlantic was imminent, instead
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of reducing the speed of the vessel and meeting in the Yamachiche anchorage”. In this respect, he said (at p. 147):
I should add that I would also have great difficulty in accepting the evidence of Captain Irvine (whose nickname is “Sputnik” because he has a reputation for not losing any time in navigating vessels) that a vessel should reduce speed in order to meet in the anchorage a ship coming upstream. Furthermore, such a course of action is, I am told by the assessor, not the practice followed in the channel and would unduly delay navigation.
In my view, the advice of the assessor on the question of speed was greatly weakened by the following remark related by the trial judge (at p. 154):
He added, however, that after listening to the evidence in this case, he thought it would be a good thing for the authorities to regulate the speed of vessels during winter navigation in this channel.
There would be no reason to regulate the speed unless safety required it but the duty of the pilots in respect of what safety requires is not lessened by the absence of a specific regulation (see Gagné v. Côte). Furthermore, the importance of the practice was very questionable because winter navigation of some intensity was then such a recent development. This was the first time the front light at Pointe du Lac was left in place for the winter.
With respect to the imprudence in failing to avoid meeting an upbound ship a short distance (2 cables) below the entrance of the narrow channel, one might start by contrasting pilot Bélisle’s attitude [TRANSLATION] “except in bad weather …there is no slowing down”, with that of pilot Tremblay the preceding day. The latter was navigating at the same place a somewhat larger vessel with another large vessel, a tanker, coming upbound: [TRANSLATION] “with the class of ship I had, meeting a tanker in a 550-foot channel without aids to navigation is not the same thing as with two small boats. So it was better not to strain my nerves, and to meet in the 2,000-foot channel.” Led too far south by the defective range lights, pilot Tremblay’s vessel sheered to port due
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to bank suction but there was no accident because he had slowed down a little in order to meet the tanker before entering the channel and, because this was a twin-screw vessel, the sheering was effectively controlled by slowing down the starboard screw.
In my view, what is significant is what pilot Tremblay did, not what he said about smaller ships. The special risk that be appreciated and avoided was a meeting in a 550-foot wide channel, of two vessels some 30 feet wider than those involved in this case. This special risk was such a meeting when entering the channel without buoys on the south side. That risk was largely independent of the size of the ships. In a way, it was greater for the Hermes than for pilot Tremblay’s ship because with twin screws the latter was better able to overcome sheering due to bank suction.
With respect to the contention that to reduce speed in order to meet an upbound ship in the anchorage area would unduly delay navigation, it must be observed that this course of action was one which Captain Irvine said should have been taken only in the particular circumstances of the case, namely in the absence of buoys on the south side of the channel and with another ship coming up to be met near the end of the narrower channel. He expressly said that he would have met the other upbound ships in the channel. This distinction is of crucial importance because it disposes of the objections that navigation would be unduly delayed by slowing down in order to meet in the anchorage and that the Hermes had met without difficulty three other ships in the channel above Yamachiche bend.
The reason for the distinction is the special risk of sheering due to bank suction when entering the channel at the end of the anchorage without being able to rely on anything but two range lights, some six and seven and a quarter nautical miles away respectively. With an upbound ship to be met, it
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was necessary for the Hermes to be lined up almost exactly in the center of the southern half of the channel, a 275-foot wide fairway. If the side of the ship got too close to the submerged bank, suction effects could be disastrous. Because this was not a gradual narrowing but a rather sharp corner, those effects would come quite suddenly and violently, not gradually and mildly as they would if, per chance, once in the channel, the ship happened to creep too close to the submerged bank. In my view, the evidence afforded by the example of pilot Tremblay and the opinion of Captain Irvine, not to mention that of other experts, was quite decisive as to the imprudence in attempting to meet at full speed an incoming ship in the channel, close to the end of the anchorage, without any means of ascertaining the location of the submerged bank other than distant range lights that were known to be to a certain extent inaccurate. This was a special risk that could easily be avoided and it was an imprudence not to avoid it, especially when the pilot was confronted with such a situation for the first time in his experience.
On the whole I reach the conclusion that the liability should be apportioned 50 per cent against the appellant, 20 per cent against those responsible for the Transatlantic and 30 per cent against those responsible for the Hermes.
As to the Crown’s counterclaim for limitation of liability, it was, in my opinion, properly dismissed because the channel through Lake St. Peter is an improved natural navigable channel, not a canal.
The third party’s counterclaim for limitation of liability was not heard by the trial judge because, at the outset of the case, he stayed the hearing of the counterclaims until the Court had reached a decision on the liability for the collision (p. 123). In view of his finding wholly against the Crown, the third party’s counterclaim was not proceeded with. It will therefore be necessary to refer back that issue to the Exchequer Court as well as the assessment of the damages.
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Concerning the cross-appeal by the United Kingdom Association, I see no reason to disturb the trial judge’s findings of fact by reason of which he held that the increased cost of salvaging the Transatlantic from where she capsized, as compared to where she could have been taken downstream, is not recoverable because it was not an unavoidable consequence of the collision.
On the main appeal it was contended, chiefly on the authority of some French authors, that, if this Court found common fault chargeable to the Crown and to the M.V. Hermes, the suppliants should not be entitled to recover from the Crown for the Hermes share of responsibility because that share is subject to the possibility of limitation of liability. If this is allowed, the amount payable by the third party will obviously be but a fraction of the sum otherwise recoverable. This raises the question of joint and several liability under the law of Quebec as it is common ground that these proceedings having been initiated by petition of right under The Crown Liability Act, they are to be decided in accordance with the law of the province.
As was pointed out in Martel v. Hôtel-Dieu St-Vallier, there is on that subject a difference of some importance between the Quebec Civil Code and the Code Napoléon. The latter has no provision similar to art. 1106 C.C.
1106. The obligation arising from the common offence or quasi-offence of two or more persons is joint and several.
In view of this explicit and unconditional provision, it is not clear that the opinions of French authors respecting exceptions to the rule of joint and several (or in solidum) liability in delicts or quasi-delicts are fully applicable in a Quebec case. At any rate, the only exceptions recognized by the French courts and authors referred to in appellant’s factum are thus stated by Lalou (Traité Pratique de la Responsabilité civile, 6th ed., p. 59, para. 107):
[TRANSLATION] …judicial decisions exclude joint and several liability for delicts in three cases:
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1. Where the victim is in part responsible for a quasi-delict: then, even his legal representatives may not invoke joint and several liability to claim from the co-author of the accident full reparation of the damage suffered by them (Crim. March 6, 1936, D.H. 1936. 237; Trib. civ. Saint-Dié, Feb. 21, 1938, D.H. 1938. 334; Crim. Dec. 14, 1938, Gaz Trib. March 4, 1938; see however, Civ. Dec. 22, 1959. D. 1960, J. 165, note R. Rodière). Cf. also infra, n. 654).
2. Where among the parties responsible there is a master arbitrarily liable under the previous legislation on industrial accidents, parties other than the master or his servants may be held liable only to the extent of their share of responsibility. (Douai, July 26, 1939, Rec. Douai 1940, p. 276; Civ. July 31, 1941, Gaz. Pal. Nov. 4, 1941). See infra, n. 109.
3. Where liability for the damage caused by an inanimate object rests on several guardians as co-owners, in the absence of fault on their part.
Eliminating the last exception that is completely irrelevant, only two are left for consideration. The first rests on principles that are clearly valid in Quebec as in France. One of the persons responsible for a damage cannot recover without deduction of his share of the responsibility and this applies to those who are claiming under him. Such is the situation of the suppliants other than the persons interested in the cargo. Those two suppliants are insurers and they are claiming as subrogated in the rights of the owner of the Transatlantic.
The position of the persons interested in the cargo., represented by the suppliant Fischer Bearings Manufacturing Limited, is not the same as that of the two insurers. They are claiming independently in their own right against one of the persons found responsible for the damage they have suffered. Their recovery must stand unaffected by the finding that the common fault of other persons contributed to the loss. They are in the same situation as a passenger in a motor vehicle suing a third party jointly with the driver. In the absence of a statute providing otherwise (such as s. 5 of The Tortfeasors and Contributory Negligence Act of Manitoba quoted in The Queen v. Murray), his recovery is not affected by a find-
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ing that the driver was guilty of common fault contributing to the accident.
I do not think that the Crown can rely on the admiralty rule embodied in s. 648 of the Canada Shipping Act to have its liability towards the persons interested in the cargo reduced in proportion to the degree in which the vessel carrying the cargo was in fault. Subsection (1) of s. 648 is as follows:
648. (1) Where, by the fault of two or more vessels, damage or loss is caused to one or more of those vessels, to their cargoes or freight, or to any property on board, the liability to make good the damage or loss shall be in proportion to the degree in which each vessel was in fault.
In Gartland Steamship Co. v. The Queen, this Court held that this provision was not applicable in the case of a claim by the Crown against a ship for damages to a bridge. Such a claim was held to be governed by the law of the province respecting contributory negligence, subject to limitation of liability. Of course, the present case is different in that damage was caused to a vessel by the fault of two vessels. However, it is not the damage so caused that was claimed by the petition of right but the damage caused by the fault of servants of the Crown. In other words, the basis of the claim against the Crown is not the fault of the vessels but that of its servants. For this reason, it appears to me that this liability does not come within the terms of s. 648. As this is an exception to the ordinary rules of liability for damages caused by fault, it cannot be extended to apply beyond its terms.
However, the finding that to the extent of 20 per cent the damage caused by the collision was due to the fault of persons for whom the owner is liable, affects the owner’s right of recovery to the full extent of that proportion of the whole loss. This means that the Crown being obliged to pay the full amount of the cargo loss is entitled to set off 20 per cent of that amount against the damage
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that the owner is entitled to recover. If the cargo loss had been claimed in separate proceedings, the Crown could not have exercised this right without instituting special proceedings for that purpose, but as all the claims, although independent, were joined in a single petition of right, the allegation that the collision was caused by the fault of persons for whom the owner of the Transatlantic is liable appears sufficient to support the conclusion that on the assessment of the damages, 20 per cent of all the damage found to have been suffered as a result of the collision, including the damage to the cargo, should be deducted to establish the amount recoverable by the suppliants and such amount, after deducting the sum payable in respect of the cargo, should then be apportioned between the two insurers. In the result, the liability of the Crown is unlikely to be greater than under s. 648, and whatever may be the rights of the suppliants among themselves, these cannot affect their right of recovery from the Crown.
Turning now to Lalou’s second exception, it seems clear that it is the result of the peculiar provisions of the law of France respecting workmen’s compensation. I do not find it necessary to consider whether the same conclusion was properly reached by the Superior Court on the basis of the Quebec Workmen’s Compensation Act in Noël v. Les Petites Sœurs Franciscaines, a case which was relied on by appellant. It is clear to me that such an exception in the case of accidents covered by workmen’s compensation legislation, rests exclusively on the special principles governing such compensation which involve, in Quebec as in France, although in a completely different way, a fundamental alteration in the law of responsibility for damage caused by accidents.
It appears to me that the legislation respecting the limitation of liability of shipowners is of a different nature. It is essentially of the same nature as legislation respecting arrangements and bankruptcy. There can be no doubt that if the effective recovery possible from one of many joint and several debtors is reduced or suppressed by bank-
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ruptcy, the right to recover the full amount from the other debtors remains unaffected. This is the consequence of art. 1112 C.C.:
1112. A joint and several debtor sued by the creditor may plead all the exceptions which are personal to himself as well as such as are common to all the codebtors.
He cannot plead such exceptions as are purely personal to one or more of the other codebtors.
In my view, the limitation of liability is a “purely personal” exception within the meaning of this provision just as bankruptcy undoubtedly is. Therefore, the limitation of liability which the owner of the Hermes may be entitled to cannot be invoked by the Crown against the suppliants. This is clearly what is really involved in the contention that because of this possibility, the Crown is not liable to the suppliants for the share of the Hermes in the liability.
Under art. 1117 C.C. the Crown is entitled to claim from the third party an amount equal to the latter’s share of their joint and several obligation. Because 20 per cent of the damages are to be deducted from the suppliants’ share, the recovery from the third party ought to be defined as three eighths of the condemnation including interest and costs, subject to limitation of liability. The third party has to share in the full liability towards the persons interested in the cargo. Should the deduction from the other suppliants’ share be insufficient to allow for the full 20 per cent of the overall damages, it should bear its share of the consequences.
The next issue to be considered is the allowance of interest of 5 per cent on the amount recoverable, from the date of the filing of the petition of right. The trial judge gave this by application of art. 1056c C.C.:
1056c. The amount awarded by judgment for damages resulting from an offence or a quasi-offence shall bear interest at the legal rate as from the date when the action at law was instituted.
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The only question is whether this provision is properly applicable to a claim against the Crown by virtue of The Crown Liability Act. I do not find it necessary to review the numerous authorities that were relied on, the basic principle is, in my view, established as follows by the judgment of this Court in The King v. Carroll:
It is settled jurisprudence that interest may not be allowed against the Crown, unless there is a statute or a contract providing for it.
Nothing else than art. 1056c was relied on as so providing and the only question is whether it is applicable under The Crown Liability Act. The applicability of the article is disputed on two grounds:
1. that it is not in respect of liability for damages in delicts or quasi-delicts;
2. that its enactment is subsequent to the enactment of The Crown Liability Act.
On the first point, one must start from the premise that s. 3 of that Act provides that “the Crown is liable in tort for the damages for which, if it were a private person of full age and capacity, it would be liable…”. By virtue of the definition section, “tort” in respect of any matter arising in the Province of Quebec, means “delict or quasi-delict”. On that basis, it is clear that art. 1056c can have application only if it is to be characterized as an enactment pertaining to liability for damages in delicts or quasi-delicts.
It must first be noted that when enacted, art. 1056c was inserted in the Code as the last provision under the heading “Offences and Quasi-Offences”, in French “Des Délits et Quasi‑Délits”. However, the wording is “The amount awarded by judgment for damages… shall bear interest”. Does this mean that the provision really is with respect to interest, not with respect to liability for damages? Such a construction would be unduly literal. It would lose sight of the fact that the so-called interest is in fact nothing but a part of the compensation allowed to the successful claimant. Properly speaking, a judgment cannot bear interest
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before it is rendered. Up to that time, there is in the case of unliquidated damages such as those resulting from a delict or quasi-delict, no fixed sum or debt on which interest can run. The so-called interest is really a part of the judgment debt that is established at the time when the amount is fixed and this debt is made up of
(a) the damages assessed without taking into account the prejudice suffered by the delay in the payment resulting from the necessity of instituting proceedings not merely for recovering the debt but for establishing it;
(b) 5 per cent per annum on (a) from the date of the institution of the proceedings to the date of the judgment, as compensation for the delay.
In determining the legal nature of the enactment in question it is, I think, proper to consider that Parliament has, to the exclusion of the provincial legislatures, sole jurisdiction over interest. Therefore, if art. 1056c was to be characterized as legislation on interest, it would be invalid. Although by claiming interest at 5 per cent from the date of the institution of the proceedings the suppliants clearly indicated that they were relying on this provision, no question was raised respecting its constitutional validity. In Lynch v. The Canada North-West Land Co., this Court held that legislation directing an additional 10 per cent to be added on municipal taxes unpaid by a certain date was not in relation to interest. It is true that in that case, the word “interest” was not used and the amount did not accrue day by day. Nevertheless, the principle established was that the addition of a percentage on account of delay in the payment of taxes was considered as legislation in relation to taxes, not as legislation in respect of interest. This principle was carried to its logical conclusion and applied to interest on municipal bonds in the case of Ladore v. Bennett when the rate of interest was affected by municipal amalga-
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mation legislation. This was held to be municipal law. However, it was held otherwise when the Province of Alberta attempted to reduce by one half the interest on certain provincial guaranteed securities. (Trustees of Lethbridge Irrigation District v. Independent Order of Foresters).
Of course, special considerations apply in the construction of constitutional provisions and it often happens that a given word is not to be ascribed the same meaning in a federal statute as in the BNA Act (see for instance Mitchell v. Tracey). However, on this point the problem is one of characterization in a context in which, in my view, it seems proper to be guided by similar principles in deciding whether art 1056c C.C. is legislation in respect of liability for damages in delicts and quasi-delicts or in relation to “interest”. Furthermore, to characterize it as legislation in respect of interest would imply that it is constitutionally invalid in a case in which its constitutional validity is not questioned. It might be noted that no such question arose in the case of Toronto Ry. v. City of Toronto, referred to by the learned trial Judge in a foot-note at p. 239. The statute in that case was a reproduction of a pre-Confederation statute, such as is the case for the original Quebec Civil Code.
Although not directly applicable because they were made in an Admiralty case, the following observations of Lord Selborne in the Khedive case might be noted respecting the legal characterization of interest on claims for unliquidated delictual damages:
The computation of interest by the registrars, in cases of this class, might, at first sight, seem to imply that there was, in that stage, an ascertained judgment debt, carrying interest. But I think this cannot
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be a correct view, whatever (in other respects) may be the effect of the decrees under which the Registrars acted. It does not appear to have been the general course of the Court that those decrees should contain any direction as to interest; and I think it more probable that the principle on which interest was computed under them is that mentioned by Mr. Sedgwick in his book on Damages (chapter 15, pp. 373 and 385-7), where he treats of the power of a jury to allow interest, as in the nature of damages, for the detention of money or property improperly withheld, or to punish negligent, tortious, or fraudulent conduct; the destruction of or injury to property involving the loss of any profit which might have been made by its use or employment.
On the second point the learned trial judge relied on the decision of the Quebec Court of Appeal in Leduc v. Laurentian Motor Products Ltd., where it was held that art. 1056c did not create a new right but merely specified the manner in which the courts should give effect to a right already existing. With deference, I cannot agree with that view of the enactment. In Pratt v. Beaman, Anglin C.J.C. speaking for this Court said (at p. 287):
The third ground of appeal is that the courts below, in dealing with the question of interest on compensation, appear to have followed the ordinary practice of not allowing interest on unliquidated damages prior to the ascertainment of their amount. We see nothing in this case to justify any departure from that wholesome practice.
In view of this authoritative pronouncement in a case governed by art. 1053 and following C.C., I fail to see how an enactment requiring interest to be allowed in all such cases without distinction, from the date of the institution of the action, can be described as specifying the manner in which the courts should give effect to a right already existing.
In the Leduc case reference was made to Blouin v. Dumoulin, a previous decision of the Quebec Court of Appeal. In that case, reference
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was made to Montreal Gas Co. v. Vasey as setting down the general rule that interest should normally be awarded from the date of institution of the action. It must, however, be noted that the damages were there claimed for breach of contract. Interest on such claims was allowed by this Court against the Crown as against subjects, in cases governed by the law of Quebec, as in St. Louis v. The Queen and Langlois v. Canadian Commercial Corporation, cited by the learned trial judge. However, we were not referred to any case in this Court in which the decision of this Court in Pratt v. Beaman was departed from, on the contrary, the principle therein appears to have been followed in the case of unliquidated delictual or quasi-delictual damages prior to the enactment of art. 1056c, see Grimaldi v. Restaldii
In support of the contention that a provincial statute extending liability for damages, enacted after the date of The Crown Liability Act does not apply to a claim under that Act, counsel for appellant relied essentially on Gauthier v. The King. The decision in that case turned upon the construction of the provisions of the Exchequer Court Act then in force respecting the extent of jurisdiction to deal with liabilities of the Crown. That decision was duly considered in a recent appeal: The Queen v. Murray. This Court did not consider it applicable to a case under s. 50 of the Exchequer Court Act which is in the following terms:
50. For the purpose of determining liability in any action or other proceeding by or against Her Majesty, a person who was at any time since the 24th day of June, 1938, a member of the naval, army or air forces of Her Majesty in right of Canada shall be deemed to have been at such time a servant of the Crown.
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Speaking for the Court, Martland J. said (at p. 268):
The situation is that as a result of s. 50 of the Exchequer Court Act, Parliament enabled the Crown, in the event of an injury to a member of the armed services, to enforce such rights as would be available to a master seeking compensation for loss of the services of his injured servant. What those rights may be can only be determined by the law in force at the time and the place when and where the injury to the servant occurred.
I can see no reason for not construing s. 3 of the Crown Liability Act in the same way as s. 50 of the Exchequer Court Act namely, as referring to the law in force at the time and place when and where the delict or quasi-delict occurs.
There remains the question of costs. As the appellant has achieved substantial success in this appeal, it should have its costs in this Court against the respondents other than Fischer Bearings. It does not seem reasonable that the division of those costs against the respondents should depend on the number of parties involved on each issue. In my view, those costs should be borne equally by the suppliants other than Fischer Bearings on the one hand and the third party on the other hand. The cross-appeal should be dismissed with costs. The order as to costs in the Exchequer Court should not be disturbed, save on the third party proceedings on which the Crown now recovers substantially and should accordingly recover costs in full due to the nature of those proceedings.
For the above reasons, I am of the opinion that the appeal should be allowed with costs as above mentioned and that the judgment of the Exchequer Court be varied by replacing para. 1 and 2 by the following:
1. The Suppliants’ Petition of Right is maintained with costs and they are entitled to eighty per cent (80%) of whatever damages may be assessed, the deduction of twenty per cent (20%) of the total amount being applied exclusively against the suppliants other than the persons interested in the cargo represented by Fischer Bearings Manufacturing Limited, with
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interest on the net amount at the rate of five per cent (5%) per annum from the date of the deposit of the Petition of Right.
2. The Third Party proceedings taken by Respondent against the Third Party Defendant are maintained with costs and the Respondent is entitled to recover from the latter three-eighths of the total sum payable to the Suppliants including interest and costs subject to whatever order may be made on the Third Party Defendant’s counterclaim for limitation of liability.
The case should be referred back to the Exchequer Court for the disposition of the counterclaim by the Third Party Defendant in that Court and the assessment of the Suppliants’ damages.
Appeal allowed with costs, PIGEON J. dissenting in part.
Solicitor for the appellant: D.S. Maxwell, Ottawa.
Solicitors for the suppliants: McMaster, Meighen, Minnion, Patch & Cordeau, Montreal
Solicitors for the third party defendant: Beauregard, Brisset & Reycraft, Montreal
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