Date:
20120111
Docket: A-82-11
Citation: 2012 FCA 9
CORAM: NOËL
J.A.
DAWSON J.A.
TRUDEL
J.A.
BETWEEN:
BRADLEY RICHARD FRANCIS BUCKLEY, KELLY
BUCKLEY, JOE WILLIAM BUCKLEY and CAROL J. BUCKLEY
Appellants
and
JAMES BUHLMAN and CINDY
MAISONVILLE
Respondents
REASONS FOR JUDGMENT
TRUDEL J.A.
Introduction
[1]
This appeal
is about the difference between sections 28 and 29 of the Marine Liability
Act, S.C. 2001, c. 6 (MLA) and which limitation applies to the collision
that happened between two pleasure boats on July 22, 2006. Unless otherwise
specified, I shall refer to the sections of the MLA as in force on July 22,
2006 mindful that these sections have been renumbered through a recent
legislative amendment (Marine Liability Act, S.C. 2001, c. 6, as am. by
S.C. 2009, c. 21), section 29 now reading mostly the way section 28 did in 2006.
In my view, this amendment is of no consequence on the outcome of this appeal.
[2]
In order
to limit their potential liability under the MLA, the respondents, James
Buhlman and Cindy Maisonville, sought summary judgment in the Federal Court against
the appellants, Bradley Richard Francis Buckley [Bradley], his wife Kelly
Buckley, Bradley’s father Joe William Buckley and his wife Carol J. Buckley. I
shall refer to Bradley and his father as the Buckleys.
[3]
As a
result of the respondents’ motion, the Federal Court order bearing neutral citation
2011 FC 73 provided as follows:
… the maximum liability of
James Buhlman and Cindy Maisonville for all claims arising out of bodily
injuries sustained by Bradley Richard Francis Buckley and Joe William Buckley
in a boating accident that occurred on Eagle Lake, District of Kenora, Province
of Ontario on July 22, 2006 is $1,000,000 pursuant to section 28 of the Marine
Liability Act, S.C. 2001, c. 6, exclusive of pre-judgment interest.
In the exercise of my discretion
pursuant to the Federal Courts Rules, SOR/98-106, I make no order as to
costs.
[4]
The
appellants raise a number of arguments in appeal to show that the Federal Court
Judge (the Judge) erred in not finding that the Buckleys’ claim for personal
injury is a maritime claim subjected to the higher limit of liability afforded
by subsection 29(2) of the MLA. Instead, she made her order pursuant to section
28 of the MLA.
[5]
The
respondents support the Judge’s conclusion. However, they disagree with the
Judge on two questions which are the focus of their cross-appeal: (1) Is the
maximum potential liability amount of $1,000,000 for claims respecting personal
injury pursuant to section 28 of the MLA inclusive of pre-judgment interest and
costs or exclusive of pre-judgment interest as found by the Judge? and (2) Were
the respondents entitled to their costs of the summary judgment motion?
The respondents’ cross-appeal
[6]
At the
outset of the hearing in front of this Court, the respondents informed the
panel that they were not pursuing the first issue in the cross-appeal, leaving
only the matter of costs to be addressed. It is their position that having
prevailed below on their motion for summary judgment, costs should have
followed the event and have been awarded to them.
[7]
As I
propose to uphold the decision of the Federal Court, I will dispose immediately
of this issue and of the cross-appeal.
[8]
The Judge
had full discretionary power over the amount and allocation of costs pursuant
to rule 400 of the Federal Courts Rules, SOR/98-106. It is trite law
that an appellate court is not at liberty merely to substitute its own exercise
of discretion for the discretion already exercised by the trial judge (see Elders
Grain Co. v. Ralph Misener (The), 2005 FCA 139, [2005] 3 F.C.R. 367 at
paragraph 13; Apotex Inc. v. Merck & Co., 2006 FCA 324 at paragraphs
3-4).
[9]
At
paragraph 45 of her reasons, the Judge explains that “(s)ince the [respondents]
have succeeded upon an argument that they did not raise and the [appellants]
did not answer, … I make no order as to costs”.
[10]
The
respondents are not challenging this finding, which, in my respectful view,
fully justifies the outcome. The respondents have failed to persuade me that
the Judge’s decision on costs was based on an error of principle or that it was
plainly wrong (Little Sisters Book and Art Emporium v. Canada (Commissioner of Customs and
Revenue)),
2007 SCC 2, [2007] 1 S.C.R. 38 at paragraph 49).
[11]
Therefore,
I propose to dismiss the cross-appeal with costs. In so doing, I take no position
on the question of whether the pre-judgment interest is inclusive or exclusive
of the maximum amount of liability. This question is left for another day where
the Court will have had the benefit of full arguments on this topic.
The appeal
A. The relevant facts
[12]
To better
understand the position of the parties to the within appeal, it is useful to
know the relevant facts. They are fully set out in the reasons of the Federal
Court and the parties take no issue with the Judge’s summary.
[13]
On July
22, 2006, Joe William Buckley, his son Bradley and two children checked-in at
the Eagle Lake Sportsmen’s Lodge (the Lodge) located, as the name suggests, on
Eagle Lake in Vermillion Bay, Ontario.
[14]
The Lodge,
owned and operated in partnership by the respondents Buhlman and Maisonville,
is a fishing resort where use of a motorboat is part of the services offered to
registered guests.
[15]
In the
evening of July 22, 2006, the Buckleys went to the dock for a tour of parts of Eagle Lake. Bradley and his father at the helm
took control of a seventeen-foot Lund Outfitter while respondent Buhlman and
the children went on board a Crestliner boat of similar size. The boats and
engines were owned by and licensed to the Lodge.
[16]
On the
return trip, the Crestliner collided with the Lund Outfitter. As a result of
this collision, both passengers of the Lund Outfitter sustained bodily
injuries, Bradley’s injuries being the most serious.
[17]
The
appellants have commenced an action against the respondents in the Ontario
Superior Court of Justice (Court File No. 548821) advancing claims in
negligence and damages pursuant to the Family Law Act, R.S.O. 1990, c.
F-3. They seek recovery of damages of approximately $8.2 million, together with
pre-judgment interest and costs.
[18]
Recently,
the parties have consented to a 6-month adjournment of the trial scheduling
hearing of the Ontario Superior Court file pending resolution of the within
appeal.
B. Summary of the Decision of
the Federal Court
[19]
In a
nutshell, the Federal Court Judge found that the Buckleys’ claims were maritime
claims as defined under section 24 of the MLA which refers to article 2 of
the Convention on Limitation of Liability for Maritime Claims, 1976
[the 1976 Convention], as amended by the Protocol of 1996 to amend the Convention
on Limitation of Liability for Maritime claims, 1976.
[20]
For our
purposes, it is sufficient to reproduce article 2(1)(a) of the 1976 Convention,
as found at paragraph 17 of the Judge’s reasons:
|
Claims subject to limitation
1.
Subject to Articles 3 and 4 the following claims, whatever the basis
of liability may be, shall be subject to limitation of liability:
(a) claims in respect of loss of
life or personal injury or loss of or damage to property (including
damage to harbour works, basins and waterways and aids to navigation), occurring
on board or in direct connexion with the operation of the ship or with
salvage operations, and consequential loss resulting therefrom;
[I underline]
|
Créances soumises à la
limitation
1.
Sous réserves des articles 3 et 4, les créances suivantes, quel que
soit le fondement de la responsabilité, sont soumises à la limitation de
la responsabilité :
a) créances pour mort, pour
lésions corporelles, pour pertes et pour dommages à tous biens (y compris
les dommages causés aux ouvrages d’art des ports, bassins, voies navigables
et aides à la navigation) survenus à bord du navire ou en relation directe
avec l’exploitation de celui-ci ou avec des opérations d’assistance ou de
sauvetage, ainsi que pour tout autre préjudice en résultant;
(Je souligne)
|
[21]
The Judge
found that the higher limit of liability under subsection 29(2) of the MLA did
not apply because the Buckleys were not on board the ship whose operator and
owners were seeking to limit liability (reasons for judgment at paragraphs 34,
36, 37 and 41). They were not on the “striking ship”. Instead, she concluded
that paragraph 28(1)(a) of the MLA applied, limiting the respondents’
liability to $1,000,000 as compared to $3,000,000 under section 29 of the MLA
(appellants’ memorandum of fact and law at paragraph 2).
[22]
I will
return to the Judge’s reasons in a more detailed fashion during my analysis.
C. Position of the parties and
relevant legislation
[23]
The
position of the parties has remained the same throughout the proceedings and is
fully canvassed in the reasons of the Federal Court. Sections 28 and 29 of the
MLA were central to the disposition of the motion for summary judgment. They
read as follows:
|
Liability for ships under 300 tons
28. (1) The
maximum liability for maritime claims that arise on any distinct occasion
involving a ship with a gross tonnage of less than 300 tons, other than
claims mentioned in section 29, is
(a) $1,000,000
in respect of claims for loss of life or personal injury; and
(b) $500,000
in respect of any other claims.
Calculation of tonnage
(2) For
the purposes of subsection (1), a ship’s gross tonnage shall be calculated in
accordance with the tonnage measurement rules contained in Annex I of the
International Convention on Tonnage Measurement of Ships, 1969, concluded at London
on June 23, 1969, including any amendments, whenever made, to the Annexes or
Appendix to that Convention.
Passenger claims, no
certificate
29. (1) The
maximum liability for maritime claims that arise on any distinct occasion for
loss of life or personal injury to passengers of a ship for which no
certificate is required under Part V of the Canada
Shipping Act is the greater
of
(a) 2,000,000
units of account; and
(b) the
number of units of account calculated by multiplying 175,000 units of account
by the number of passengers on board the ship.
Passenger claims, no contract of carriage
(2) Notwithstanding
Article 6 of the Convention, the maximum liability for maritime claims that
arise on any distinct occasion for loss of life or personal injury to persons
carried on a ship otherwise than under a contract of passenger carriage is
the greater of
(a) 2,000,000
units of account, and
(b) 175,000
units of account multiplied by
(i) the number of passengers that the ship is
authorized to carry according to its certificate under Part V of the Canada Shipping Act, or
(ii) if no
certificate is required under that Part, the number of persons on board the
ship.
Exception
(3) Subsection
(2) does not apply in respect of
(a) the
master of a ship, a member of a ship’s crew or any other person employed or
engaged in any capacity on board a ship on the business of a ship; or
(b) a
person carried on board a ship other than a ship operated for a commercial or
public purpose.
Definition of “passenger”
(4) In
subsection (1), “passenger”
means a person carried on a ship in circumstances described in paragraph 2(a)
or (b) of Article 7 of the Convention.
Definition of “unit of account”
(5) In subsections (1) and
(2), “unit of account” means a special drawing right issued
by the International Monetary Fund.
[I
underline]
|
Navires d’une jauge inférieure à 300 tonneaux
28. (1) La
limite de responsabilité pour les créances maritimes — autres que
celles mentionnées à l’article 29 — nées d’un même événement impliquant
un navire jaugeant moins de 300 tonneaux est fixée à :
a) 1
000 000 $ pour les créances pour décès ou blessures corporelles;
b) 500
000 $ pour les autres créances.
Jauge du navire
(2) Pour
l’application du paragraphe (1), la jauge brute du navire est calculée
conformément aux règles de jaugeage prévues à l’annexe I de la Convention
internationale de 1969 sur le jaugeage des navires, conclue à Londres le 23
juin 1969, y compris les modifications dont les annexes ou l’appendice de
cette convention peuvent faire l’objet, indépendamment du moment où elles
sont apportées.
Créances de passagers —
navire sans certificat
29. (1) La
limite de responsabilité pour les créances maritimes nées d’un même événement
impliquant un navire pour lequel aucun certificat n’est requis au titre de la
partie V de la Loi sur la marine marchande du
Canada, en cas de décès ou de
blessures corporelles causés à des passagers du navire, est fixée au plus
élevé des montants suivants :
a) 2
000 000 d’unités de compte;
b) le
produit de 175 000 unités de compte par le nombre de passagers à bord du
navire.
Créances de passagers sans contrat de transport
(2) Malgré l’article
6 de la Convention, la limite de responsabilité pour les créances maritimes
nées d’un même événement, en cas de décès ou de blessures corporelles causés
à des personnes transportées sur un navire autrement que sous le régime d’un
contrat de transport de passagers, est fixée au plus élevé des montants
suivants :
a) 2
000 000 d’unités de compte;
b) le
produit de 175 000 unités de compte par :
(i) le nombre
de passagers que peut transporter le navire aux termes du certificat requis
au titre de la partie V de la Loi sur la marine
marchande du Canada,
(ii) le nombre de personnes à bord du navire, si
aucun certificat n’est requis au titre de cette partie.
Exception
(3) Le
paragraphe (2) ne s’applique pas :
a) dans
le cas du capitaine d’un navire, d’un membre de l’équipage et de toute autre
personne employée ou occupée à bord, en quelque qualité que ce soit, pour les
affaires de ce navire;
b) dans
le cas d’une personne transportée à bord d’un navire autre qu’un navire
utilisé à des fins commerciales ou publiques.
Définition de « passager »
(4) Au
paragraphe (1), «
passager » s’entend de toute personne transportée sur le navire
dans les cas prévus aux alinéas a) et b) du paragraphe 2 de
l’article 7 de la Convention.
Définition de « unités de compte »
(5) Aux
paragraphes (1) et (2), « unités de compte » s’entend des droits de tirage spéciaux émis par le Fonds
monétaire international.
(Je souligne)
|
[24]
Both
sections can be found in Part 3 of the MLA entitled Limitation of Liability
for Maritime Claims. It was common ground, at the hearing of this appeal
that Part 4 of the MLA, entitled Liability for Carriage of Passengers by
Water was not relied upon by the parties. As a result, the parties did not
take support on the Athens Convention relating to the
Carriage of Passengers and their Luggage by Sea, 1974, as amended by the Protocol of
1990 (13 December 1974, 1463 U.N.T.S. 19). Therefore, the parties are not
challenging the Judge’s finding that Part 4 of the MLA does not apply to the
present case.
[25]
The
appellants opine that the Judge’s analysis under Part 3 of the MLA was
incomplete (appellants’ memorandum of fact and law at paragraph 16). They say
that after finding that the Buckleys’ claim was a maritime claim within the
meaning of the 1976 Convention, the Judge had to pursue her analysis under
section 29. Had she properly done so, she would have found that the Buckleys
were persons on board a ship operated for a commercial purpose. Subsection
29(2) would have applied to their case (appellants’ memorandum of fact and law
at paragraphs 45 and 46). Therefore, the respondents would have been subjected
to a higher limit of liability.
[26]
The
appellants argue that when deciding whether or not subsection 28(1) applies, a
two-step inquiry is mandated: (1) Does the claim involve “a ship with a gross
tonnage of less than 300 tons”? and (2) Is the claim, as stated in subsection
28(1), one “other than claims mentioned in section 29 of the MLA”? The
appellants argue that section 28 is engaged by default if section 29 does not
apply (ibidem at paragraph 20).
[27]
As for the
first question, there is no doubt here that both vessels weighed less than 300
tons. So the remaining question is whether or not the Buckleys’ claims fall
under section 29 of the MLA. The appellants argue that the Judge should have asked
herself (1) Do the maritime claims fall under subsection 29(1) following personal
injury to passengers of a ship for which no certificate is required? (2) If
subsection 29(1) does not apply, what about subsection 29(2) regarding maritime
claims of “persons carried on a ship otherwise than under a contract of
passenger carriage”? and (3) Were the persons carried on board “a ship other
than a ship operated for a commercial or public purpose”?
[28]
The appellants
argue that the Judge’s finding that the Buckleys’ claims are maritime claims
for the purposes of section 28, but not for section 29, is inconsistent and
incorrect (ibidem at paragraph 25), adding that “a claim that does not
meet the definition of maritime claim in section 29 cannot meet the definition
of section 28 – the same definition applies to both sections” (ibidem at
paragraph 25). So the Judge erred when excluding the Buckleys’ maritime claims
from the benefits of section 29 of the MLA because they were not claiming
against the vessel on which they were on board. Being on board the “striking
vessel” is not a pre-requisite for the application of subsection 29(2) of the
MLA. All that needs to be shown is that the injured person was on a ship.
Subsection 28(1) and paragraph 29(3)(b) of the MLA refer to “a” ship,
not “the” ship. For convenience, I reproduce them again.
|
Liability for ships under 300 tons
28. (1) The
maximum liability for maritime claims that arise on any distinct occasion
involving a ship with a gross tonnage of less than 300 tons, other
than claims mentioned in section 29, is
(a) $1,000,000
in respect of claims for loss of life or personal injury; and
(b) $500,000
in respect of any other claims.
Exception
29 (3) Subsection
(2) does not apply in respect of
…
(b) a
person carried on board a ship other than a ship operated for a
commercial or public purpose.
[I underline]
|
Navires d’une jauge inférieure à 300 tonneaux
28. (1) La
limite de responsabilité pour les créances maritimes — autres que
celles mentionnées à l’article 29 — nées d’un même événement impliquant un
navire jaugeant moins de 300 tonneaux est fixée à :
a) 1
000 000 $ pour les créances pour décès ou blessures corporelles;
b) 500
000 $ pour les autres créances.
Exception
29 (3) Le
paragraphe (2) ne s’applique pas :
[…]
b) dans le cas d’une
personne transportée à bord d’un navire autre qu’un navire utilisé à
des fins commerciales ou publiques.
(Je souligne)
|
[29]
The
appellants further allege that the Judge’s interpretation “creates an
incongruous result” as injured passengers would be treated differently whether
they were on board the “striking ship” or the “struck ship” at the time of the
collision.
[30]
For their
part, the respondents rest on the judgment of the Federal Court and generally
agree with the Judge’s reasoning.
Issue
[31]
Did the
Federal Court Judge err when applying section 28 of the MLA to the Buckleys’
maritime claims? No.
Standard of review
[32]
Neither of
the parties discussed the applicable standard of review. The issue is a
question of law involving the interpretation of sections 28 and 29 of the Act in
light of the 1976 Convention. The issue is therefore subject to review on a
standard of correctness (Housen v. Nikolaisen, 2002 SCC 33, [2002] 2
S.C.R. 235, at paragraph 8).
Analysis
[33]
The 1976
Convention addresses a wide variety of claims, which are subject to limitations.
In article 2(1)(a), it refers more specifically to events “occurring on board
or in direct connexion with the operation of the ship” (see paragraph [20] above).
[34]
In this
case, appropriately so, the Judge found that the injuries sustained on the Lund
Outfitter had occurred in direct connection with the operation of the
Crestliner (reasons for judgment at paragraph 18), the ship against which
liability was sought.
[35]
The Judge
framed the key issue as being “the status of [the Buckleys] vis-à-vis
the Crestliner vessel” (ibidem at paragraph 34). In search of the
correct answer, she embarked on an analysis of the limitation of liability
regime brought about by sections 28 and 29 of the MLA. Recognizing that
sections 28 and 29 address different scenarios and having already accepted that
she had maritime claims in front of her, the Judge turned her mind to section
29 of the MLA, the focus of the appellants’ thesis.
[36]
From the
outset, she ruled out the application of subsection 29(1) as it was agreed that
the Buckleys were not passengers under a contract of passenger carriage as
required by article 7(2)(a) of the 1976 Convention (ibidem at paragraphs
36 and 22).
[37]
Next, the
Judge considered subsection 29(2) of the MLA, which she also ruled out. In her
view, “(i)n order to engage subsection 29(2) the injured persons must be
claiming against the vessel on which they were on board” (reasons for
judgment at paragraph 37). The Buckleys were not on the Crestliner.
[38]
As
mentioned earlier, the appellants disagree with the Judge’s interpretation of
the relevant sections of the MLA. The purpose of the voyage and the use of the
indefinite article “a” to qualify the vessel as opposed to the definite article
“the” inform the appellants’ position in this appeal.
The commercial purpose
[39]
I shall deal
first with paragraph 29(3)(b) concerning claims of persons carried on
board a ship for a commercial or public purpose.
[40]
In her
reasons, the Judge was critical of both counsel for their attention to the
nature of the trip and whether it was for a commercial purpose as opposed to a
recreational one. She found this emphasis misplaced, preferring instead to
concentrate on the “role of the vessel for which limitation of liability is
sought” (ibidem at paragraph 32). After all, the respondents were not in
front of the Court to determine liability but rather to determine the
limitation of their liability under the MLA (ibidem at paragraph 33).
[41]
There is
no need in appeal to discuss this issue and whether or not the Lund Outfitter
and Crestliner were operated for a commercial purpose or recreational one. I
agree with the Judge that subsection 29(2) of the MLA has no application in
this case because the Buckleys were not on board the Crestliner. That finding
was sufficient to put the appellants’ arguments to rest without further examining
the purpose of the voyage.
The “a ship / the ship” argument
[42]
By
enacting the MLA, Parliament intended to set limits of liability and establish
uniformity by balancing the interests of shipowners and other parties. In that
vein, I agree with the respondents that section 29 affords certainty regarding
limits of potential liability and enables the owners of the ships and their
concomitant insurers to set a global limit of potential liability limits
arising from claims advanced by their passengers or by those that they
transport or carry for commercial or public purposes (respondents’ memorandum
of fact and law at paragraph 21). Shipowners and insurers have a clearer
indication of what they could be liable for, and to what degree.
[43]
Article 7
of the Convention, the source of section 29 of the MLA reads as follows:
|
Article 7
The limit for passenger claims
1. In respect
of claims arising on any distinct occasion for loss of life or personal
injury to passengers of a ship, the limit of liability of the shipowner
thereof shall be an amount of 175,000 Units of Account multiplied by the
number of passengers which the ship is authorized to carry according to the
ship’s certificate.
2. For the
purpose of this Article “claims for loss of life or personal injury to
passengers of a ship” shall mean any such claims brought by or on behalf of
any person carried in that ship:
(a) under
a contract of passenger carriage, or
(b) who, with the
consent of the carrier, is accompanying a vehicle or live animals which are
covered by a contract for the carriage of goods.
[I underline]
|
Article 7
Limite applicable aux créances
des passagers
1. Dans le
cas de créances résultant de la mort ou de lésions corporelles des passagers
d’un navire et nées d’un même événement, la limite de la responsabilité du
propriétaire du navire est fixée à un montant de 175 000 unités de
comptes multiplié par le nombre de passagers que le navire est autorisé à
transporter conformément à son certificat.
2. Aux fins
du présent article, l’expression « créances résultant de la mort ou
de lésions corporelles des passagers d’un navire » signifie toute
créance formée par toute personne transportée sur ce navire ou pour le compte
de cette personne :
a) en vertu d’un contrat de transport de passager; ou
b) qui,
avec le consentement du transporteur, accompagne un véhicule ou des animaux
vivants faisant l’objet d’un contrat de transport de marchandises.
(Je souligne)
|
[44]
In my
view, a combined reading of Article 7 of the Convention and of section 29 of
the MLA favours the Judge’s interpretation that subsection 29(2) of the MLA
refers to persons on the ship seeking to limit liability.
[45]
Although
found to be inapplicable to this case, subsection 29(1) of the MLA concerns
passengers on a ship, therefore persons carried on that ship, who are under a
contract of carriage. Subsection 29(2) applies to persons carried on that ship
for a commercial or public purpose without such a contract.
[46]
Together,
subsections 29(1) and (2) of the MLA provide for the class of persons on board
the vessel, either as passengers or as persons carried on a ship otherwise than
under a contract of carriage. Also, the formulae for determining the maximum
amount of potential liability, as stipulated in subparagraphs 29(2)(b)(i)
and (ii) considers either the number of passengers which the ship is
authorized to carry under its certificate or the number of persons on board
the ship at the time of the incident.
[47]
All this
leads me to the conclusion reached by the Judge: subsection 29(2) does not
apply to the maritime claims at issue. Accordingly, the Judge committed no
error of law or of principle warranting our intervention. She was correct in
concluding that section 29 of the MLA did not apply to the Buckleys who were neither
passengers nor persons being carried on board the Crestliner and that the
broader language of subsection 28(1) governed their maritime claims.
Conclusion
[48]
As a
result, I would dismiss the appeal with costs and the cross-appeal also with
costs.
"Johanne
Trudel"
“I
agree
Marc Noël J.A.”
“I
agree
Eleanor R. Dawson J.A.”
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