Vaccher et al. v. Kaufman et al., [1981] 1 SCR 301

Supreme Court of Canada

Vaccher et al. v. Kaufman et al., [1981] 1 S.C.R. 301

Date: 1981-04-06

Donald Vaccher, Owner of the Ship “Blue Waters” and the Ship “Blue Waters” Appellants;

and

Donald Henry Kaufman and Jan Jacobson Respondents.

1980: June 19; 1981: April 6.

Present: Ritchie, Dickson, Beetz, McIntyre and Chouinard JJ.

ON APPEAL FROM THE FEDERAL COURT OF APPEAL

Maritime law—Collision—Negligence—Liability of owner of vessel—Applicability of statutory limitation to liability—Whether or not loss occurred without actual fault or privity of vessel’s owner—Canada Shipping Act, R.S.C. 1970, c. S-9, ss. 647(2), 649(1).

This action for damages brought by respondent arose out of a maritime collision. On a clear night, appellant’s vessel collided with and sank respondent’s vessel which had been at anchor and properly lighted. The two inexperienced crew members in charge of appellant’s vessel at the time of the collision had misjudged the distance between vessels. While the appellant ship owner’s acts were not “the sole or next or chief cause” of the collision, he had been aware of the two crew members’ lack of experience and had cautioned one to rouse him should they have any doubts or difficulties. The main issue was appellant’s assertion that any damage occurred without his actual fault or privity and that his possible liability was limited by the provisions of the Canada Shipping Act.

Held: The appeal should be dismissed.

Appellant appealed from a judgment of the Federal Court of Appeal which varied the judgment rendered at trial and concluded that the appellant was not entitled to limit his liability to damages of 300,000 gold francs in his capacity as owner of the vessel.

A ship owner, even if it could be shown that he was not “the sole or next or chief cause” of the collision, would nevertheless not be entitled to limit his liability unless he were able to show that in his capacity as owner he was “in no way in fault or privy to what occurred”. Appellant Vaccher did not discharge that heavy onus. The decision to employ inexperienced men with a view

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to having them in charge of the ship constituted fault on Vaccher’s part, and while not “the sole or next or chief cause” of the mishap, it was a circumstance which prevented the owner from discharging the burden resting on him to show he was “no way in fault or privy to what occurred”. Vaccher should have realized the potential for danger. No practice whereby inexperienced crew members were permitted to stand watches and take turns at the wheel without supervision was established by the evidence.

The protection afforded by the limitation of liability provisions does not extend to the relief of ship owners deliberately employing crew, known to them to be inexperienced, for the purpose of undertaking a voyage involving danger to other shipping. In employing these young men Vaccher was acting in his capacity as owner and his error in overestimating their competence as seamen was a fault which precluded him from enjoying the provisions of s. 647.

The limitation of liability found in s. 649 did not apply to the circumstances.

Stein Estate v. The Ship “Kathy K”, [1976] 2 S.C.R. 802; British Columbia Telephone Company and other persons v. Marpole Towing Limited [Chugaway II], [1971] S.C.R. 321, referred to.

APPEAL from a judgment of the Federal Court of Appeal[1], varying a judgment rendered at trial and concluding that statutory limitation of damages recognized at trial was not available to appellant. Appeal dismissed.

A.B. Oland, for the appellants.

Timothy P. Cameron, for the respondents.

The judgment of the Court was delivered by

RITCHIE J.—This is an appeal from a judgment of the Federal Court of Appeal varying the judgment rendered at trial by Mr. Justice Collier and concluding that the appellant was not entitled to limit his liability to damages in the amount of 300,000 gold francs in his capacity as owner of the vessel Blue Waters when that vessel collided with and sank the motor vessel Centennial 71.

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This action was a claim for damages brought by the respondents arising out of the collision above referred to. The respondent Kaufman was the owner of the MV Centennial 71 and the respondent Jacobson was one of his crew. The appellant Vaccher was the owner of Blue Waters. Both were fishing vessels, the Blue Waters being a steel trawler, whereas Centennial 71 was a smaller wooden fishing vessel. I adopt the following recitation of the relevant facts to be found in the reasons for judgment of the Court of Appeal:

The collision took place in Queen Charlotte Sound on June 5, 1977, at about 11:00 p.m., at which time the appellants’ vessel was at anchor exhibiting the regulation anchor light. The respondent’s vessel was under way and the collision resulted in the total loss of the motor vessel “CENTENNIAL 71”. Two young crew members, Olson and Redman, were in charge of the vessel at the time of the collision.

After reciting the facts in his Reasons, the learned Trial Judge made the following findings…

I have little hesitation in coming to the conclusion these two young seamen were negligent. They ran over and sank, on a clear night, an admittedly normally lighted anchored small vessel. That was inexcusable. The defendant Vaccher, as owner, is liable for their negligence.

This portion of the Judgment of the learned Trial Judge is not under appeal.

The respondent, Vaccher, however, counter-claimed to limit his liability to the value of 1,000 gold francs per ton in respect of a tonnage of 300 tons pursuant to the provisions of the Canada Shipping Act. The learned Trial Judge found that Vaccher was entitled to limit his liability as provided by that Act. It is from that part of the Judgment that the appellants appeal.

At the time of the collision the Blue Waters was manned by Donald Vaccher, the master, and the following three crew members: (1) Trevor Redman who was the engineer of whom Vaccher said he “basically changed oil in the engines and fuel filter and stuff like that”, but also had deck duties; (2) Olson, who had joined the vessel in mid-April 1977, after which she had spent a month in dry dock in Vancouver prior to the date of the collision; and Leo Palmer who was the cook but also

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had some deck duties. All these young men were, to Vaccher’s knowledge, inexperienced in the ways of seamanship and navigation and this is apparent from Vaccher’s own evidence respecting Olson who was on “wheel watch” when the collision occurred. This is made clear from the following passage from the judgment of the learned trial judge:

Olson is now 22 years old. He has a grade 11 education. He had, prior to joining the Blue Waters, worked for two years as a logger. He joined the vessel about the middle of April, 1977. The vessel operated out of Prince Rupert. On his first trip out he was an “in-breaker”. That means he went along as an extra man, learning what to do on board the vessel, in respect of its operation and navigation, and in respect of its business of catching fish. On the second trip he was a regular crew member. On that trip the vessel continued to Vancouver for an annual re-fit. She was there for approximately a month. The third trip was the one I have described, from Vancouver to the Goose Island grounds.

Vaccher himself gave the following evidence in this regard:

Q. Would you not agree with me that insofar as the ability to navigate a large fishing vessel at night, he was relatively inexperienced?

A. There’s no doubt he was inexperienced, but I believed he had enough knowledge to do the job I asked him to do.

Q. Well, this accident wouldn’t have happened if you had been at the wheel, would it?

A. I don’t believe it would have. It’s only an opinion.

Shortly before the collision, Olson retired to the washroom and Vaccher went to bed leaving the navigation of the vessel to Redman.

The events of the evening of June 5th prior to the collision are accurately described by the trial judge in the following passage:

The Blue Waters set out about 10:30 p.m. Vaccher laid out a course of 317 degrees true. He set it on the auto-pilot. He told Olson to take the first two hours wheel watch, to be succeeded by Redman, and then

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Palmer. He told Olson there might be anchored “boats” in the area, and to keep his eyes open for them; if he had any doubts or problems, Olson was to call him. Vaccher, about ten to eleven, went to his cabin. He slept. He was awakened, by the collision. [The italics are my own]

The finding of the learned trial judge with respect to the actions of these two young men is to be found in the following paragraphs of his judgment:

Counsel for the defendants argued there was no negligence on the part of Olson and Redman; the collision was a pure accident; the only criticism that could be levelled against them was an error in visual perception; this was not negligence in law.

I disagree.

The look-out or observations by Olson and Redman were, in my view, faulty. They completely misjudged the distance away of the Centennial 71. That fault, and negligence, cannot be excused on the grounds of inexperience or of some error in distance perception.

There is thus a clear finding of negligence by the trial judge on the part of the two young crewmen in charge of the navigation of the ship immediately before and at the time of the collision.

The fact that Vaccher as owner of the Blue Waters was liable for the negligence of the two young crewmen on the basis of respondeat superior, is not disputed but, as has been indicated, the main issue raised by this appeal is concerned with the effect, if any, to be given to the counterclaim filed by Vaccher whereby he asserted that if the plaintiffs (the present respondents) had any claim against him and if any loss or damage was caused to any property of theirs, all of which is denied, the said damage occurred.

…without the actual fault or privity of the Defendant Donald Vaccher, owner of the vessel “BLUE WATERS” and the Defendant Donald Vaccher pleads the provisions of Sections 647, 649, 651, 652 and 653 of The Canada Shipping Act, R.S.C. 29 [sic], and claims to limit his liability to the value of 1,000 Gold Francs per ton in respect of the tonnage of 300 tons of the said “BLUE WATERS”. [The italics are my own]

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The relevant provisions of s. 647(2) of the Act read as follows:

647. …

(2) The owner of a ship, whether registered in Canada or not, is not, where any of the following events occur without his actual fault or privity, namely,

…

(b) where any damage or loss is caused to any goods, merchandise or other things whatever on board that ship;

(d) where any loss or damage is caused to any property, other than property described in paragraph (b), or any rights are infringed through

(i) the act or omission of any person, whether on board that ship or not, in the navigation or management of the ship, in the loading, carriage or discharge of its cargo or in the embarkation, carriage or disembarkation of its passengers, or

(ii) any other act or omission of any person on board that ship;

liable for damages beyond the following amounts, namely,

(f) in respect of any loss or damage to property or any infringement of any rights mentioned in paragraph (d), an aggregate amount equivalent to 1,000 gold francs for each ton of that ship’s tonnage.

Section 649 which is also pleaded in the counterclaim, reads as follows:

649. (1) Sections 647 and 648 extend and apply to

(a) the charterer of a ship;

(b) any person having an interest in or possession of a ship from and including the launching thereof; and

(c) the manager or operator of a ship and any agent of a ship made liable by law for damage caused by the ship

where any of the events mentioned in paragraphs 647(2)(a) to (d) occur without their actual fault or privity, and to any person acting in the capacity of master or member of the crew of a ship and to any servant of the owner or of any person described in paragraphs (a) to (c) where any of the events mentioned in paragraphs 647(2)(a) to (d) occur, whether with or

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without his actual fault or privity. [The italics are my own]

It will be seen that where a ship owner is not able to establish that he was in no way at fault or privy to what occurred he is not entitled to the limitation of liability for which provision is made in s. 647.

The burden of proof resting upon a ship owner under s. 647 is a heavy one as was described in the judgment of this Court in Stein Estate v. The Ship “Kathy K”[2], at p. 819, where it was said that:

The burden resting on the shipowners is a heavy one and is not discharged by their showing that their acts were not “the sole or next or chief cause” of the mishap. As Viscount Haldane stated in Standard Oil Co. of New York v. Clan Line Steamers, Ltd., [1924] A.C. 100, at p. 113:

…they must show that they were themselves in no way in fault or privy to what occurred. [The italics are my own]

It is clear therefore that even if it can be shown, as I think it is in this case, that the owner’s acts were not “the sole or next or chief cause” of the collision, he would nevertheless not be entitled to limit his liability unless he was able to show that in his capacity as owner he was “in no way in fault or privy to what occurred”.

On a consideration of the evidence the learned trial judge found that Vaccher had discharged the heavy onus resting upon him under s. 647 and that he was accordingly entitled to limit his liability as owner. In so doing he found:

Here there were faults in navigation and seamanship on the part of Vaccher’s crew. But, I repeat, Vaccher, in my view, discharged the onus on him and established there was no fault, of any kind, of his which contributed to the casualty.

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The Court of Appeal, unlike the trial judge, found that the evidence disclosed Vaccher to have been at fault in his capacity as owner and that he was accordingly not entitled as such to invoke the limitation provisions of s. 647. I agree with this conclusion although I am far from agreeing with all the reasons which the Court of Appeal assigned for reaching it.

In holding that Vaccher had discharged the onus on him to establish that there was no fault, the learned trial judge made the following finding concerning Vaccher and his crew:

He was satisfied they were competent to handle the vessel in open waters such as the area where the collision occurred. I, too, am satisfied these two young men were capable of handling the vessel in these particular waters and in those particular circumstances.

I can find no evidence whatever in the record to support the finding that these two young men were capable of handling the vessel in the circumstances. In my opinion all of the evidence points in the opposite direction. The trial judge himself found that

The look-out or observations by Olson and Redman were… faulty. They completely misjudged the distance away of the Centennial 71.

Vaccher knew these young men, at least one of whom had been an “in-breaker” or learner on his ship, and it is apparent from the evidence that he also knew of the dangers to small boats anchored in his path when he entrusted the fate of his ship to these inexperienced hands at night. In my view, under all the circumstances, Vaccher should have appreciated that there was potential danger in adopting the course which he did.

In finding no fault on Vaccher’s part, the trial judge concluded, speaking of the young crewmen,

They were inexperienced. But one can only get practical experience by, as was done here, standing watches and taking turns at the wheel.

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I find no evidence of any practice whereby such crew members are permitted to stand watches and take turns at the wheel without supervision. It is true that Vaccher was training these young men in the ways of their future profession and there can be no objection to this so long as the risks entailed involved no more than the property of the owner, but we are here faced with a decision which involved potential danger to the property and indeed to the lives of others, and as I have indicated, Vaccher’s decision to employ these young men with a view to leaving them in charge of his ship constituted fault on his part, and while this was not “the sole or next or chief cause” of the mishap, it was nevertheless a circumstance which prevented the owner from discharging the burden resting upon him to show that he was “in no way in fault or privy to what occurred”.

It is true, as was pointed out in this Court in British Columbia Telephone Company and other persons v. Marpole Towing Limited [Chugaway II][3], at p. 338 that:

…the limitation of liability provisions… are expressly designed for the purpose of encouraging shipping and affording protection to ship owners against bearing the full impact of heavy and perhaps crippling pecuniary damage sustained by reason of the negligent navigation of their ships on the part of their servants or agents.

However, in my opinion, the protection so afforded does not extend to the relief of ship owners when they deliberately employ crew whom they know to be inexperienced for the purpose of undertaking a voyage involving danger to other shipping.

As I have pointed out, Vaccher himself testified that there was no doubt as to Olson’s inexperience “but” he said, “I believe he had enough experience to do the job I asked him to”. In this belief Vaccher was in error as to the event proved and this error dominated the events which ensued. There can be no doubt that in employing these young men Vaccher was acting in his capacity as owner and in my opinion his error in overestimating their competence as seamen was a fault which

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precluded him from enjoying the limitation provisions of s. 647 of the Canada Shipping Act.

It was however contended on behalf of the appellant that the proximate cause of the collision was the negligence of Vaccher in assigning Olson and Redman to keep watch at night in crowded waters and that this action was taken in his capacity as master so as to entitle him to limit his liability under s. 649 of the Canada Shipping Act, whether or not he was actually at fault or privy to the events which followed. This submission was supported by reference to the case of Walithy Charters Limited et al. v. Doig and City of Vancouver et al. [Golden Summer][4], which followed the reasoning of the case of The Annie Hay[5].

The learned trial judge in the present case did not find it necessary to refer to the effect of s. 649 of the Canada Shipping Act because he had found that there was no fault on Vaccher’s part. I am however, like the Court of Appeal, satisfied that the section does not apply to the circumstances here under consideration and I share the view expressed by Mr. Justice Heald in the Court of Appeal when he said:

Vaccher must have known that the exigencies of the situation would require these inexperienced crew members to stand watch if the other two crew members were to obtain adequate rest during the voyage. In my view, therefore, the respondent Vaccher was at fault qua owner in assembling a crew, one half of whom were so inexperienced as to be unable to function adequately throughout the voyage.

For all these reasons I would dismiss this appeal and thus reverse that portion of judgment of the learned trial judge permitting the appellant to limit his liability to damages in the amount of 300,000 gold francs and would also refer the matter back to the Trial Division of the Federal Court in the manner proposed by the Court of Appeal.

The respondents are entitled to their costs of the claim and counterclaim throughout.

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Appeal dismissed with costs.

Solicitors for the appellants: Owen, Bird, Vancouver.

Solicitors for the respondents: McMaster & Co., Vancouver.