Docket: A-506-14
Citation:
2015 FCA 216
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CORAM:
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NADON J.A.
TRUDEL J.A.
DE MONTIGNY J.A.
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Docket:A-506-14
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BETWEEN:
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BURIN PENINSULA MARINE SERVICE CENTRE
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Appellant
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and
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MAXWELL FORSEY
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Respondent
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REASONS
FOR JUDGMENT
NADON J.A.
[1]
This is an appeal of a decision of Madam Justice
Heneghan of the Federal Court dated October 20, 2014 (2014 FC 974) wherein she
allowed with costs the respondent’s action in damages against the appellant.
More particularly, the Judge granted general damages to the respondent in the
sum of $269,206.38 in respect of an incident which occurred on July 10, 2011
when the respondent’s vessel, the fishing vessel “Eastern Gambler” (the Vessel),
fell from its cradle while stored at the appellant’s premises situated in
Fortune, Newfoundland.
[2]
On November 18, 2014, the appellant filed a
notice of appeal in which it challenged the Judge’s decision on numerous
grounds. However, in its memorandum of fact and law, the appellant submits that
only two questions should be determined in the appeal, namely whether the Judge
erred in drawing an adverse inference against the appellant for allegedly
disposing intentionally of relevant evidence and whether the Judge erred in
concluding that the exclusion clauses found in the contract between the parties
did not protect the appellant from its negligence.
[3]
For the reasons that follow, I conclude that we
ought to dismiss the appeal.
I.
Facts
[4]
The appellant’s business is in the storing and
servicing of vessels at its Marine Service Centre in Fortune, Newfoundland.
[5]
The respondent is the owner of the Vessel.
[6]
In late June, 2011, the appellant agreed to remove
the respondent’s vessel from the water and to place it on dry land in order to,
inter alia, effect repairs
to the Vessel’s hull.
[7]
However, prior to lifting the Vessel from the
water, the appellant required the respondent to sign a document entitled “Statement
of Acceptance of Responsibility” (hereinafter the Statement of Acceptance)
which the respondent signed on June 27, 2011. Because the Statement of
Acceptance is at the heart of this appeal, I reproduce it in its entirety.
I Max Forsey of
Hillveiw (sic) agree to accept responsibility for any and all damage which may
result to my boat ______________, ____________________
(Name of Vessel) (C.F.V.
Registration No.)
during the lift and/or launch by the Marine
Straddle Crane at the Marine Service Centre, provided such damage does not
result from the negligence of the Straddle Crane operator in operating the
Marine Straddle Crane.
Furthermore, I understand and agree that I
assume and accept all risk of loss, damage or injury, by fire or otherwise, to
my person and/or my property, or to the person and/or property of any other
persons caused by my negligence or acts of my employees, servants or agents.
Furthermore I agree to indemnify and save harmless the said Marine Service
Centre, its agents, servants or employees against all claims for such loss,
damage or injury sustained by me or any other person by any negligence and/or
acts of myself or any servants, agents or employees of mine.
I understand and agree that the securing and
locking of my boat is my responsibility, and not that of the said Marine
Service Centre, or of its agents, servants, employees, or otherwise.
Furthermore I agree to indemnify and save harmless the said Marine Service
Centre and its officers, agents, employees, servants or otherwise from, any
claims on my part with respect to the same.
I further understand and agree that the said
Marine Service Centre accepts no responsibility for any damage that may occur
to my boat as a result of acts of God; acts of theft; acts of vandalism, the
escape of fire or other peril from the neighbouring property or premises of
others onto the property of the said Marine Service Centre; or the illegal or
negligent actions of any third party or parties (howsoever caused).
Furthermore, I agree to indemnify and save harmless the said Marine Service
Centre and its officers, agents, employees, servants, or otherwise from any
claim on my part with respect to the same.
Furthermore, I agree to assume all liability
for any damage that may occur to the property or person of the said Marine
Service Centre, or its officers, agents, employees, servants or otherwise, or
to any third party resulting from improper or inadequate blocking of my vessel,
or any other acts of negligence (howsoever arising) of myself, or any of my agents,
servants, or employees; and I do agree to indemnify and save harmless the said
Marine Service Centre and its officers, agents, employees, servants or
otherwise from the claims of any third parties that may result from any such
improper or inadequate blocking, or other negligent act of myself, or of my
servants, agents, or employees.
I agree that I have read the “Notice of
Warning” sign posted on and around the said Marine Service Centre and fully
understand same.
I agree also that if any charge in respect
of my boat remains unpaid at the expiry of one month from the date of
notification thereof to me by the said Marine Service Centre in writing, the
said Marine Service Centre shall be empowered at its option to remove, sell, or
otherwise dispose of the boat; and I further agree that I shall have no claim
of any kind whatsoever against the said Marine Service Centre arising from or
in connection with such removal, sale or other disposal of the boat.
SIGNED SEALED AND DELIVERED by the parties hereto at the said Marine Service Centre herebefore
written on the 27th day of June, 2011.
SIGNED, SEALED AND DELIVERED
By (Boat Owner or Captain)
in the presence of:
____________________________ ____________________________
(Boat Owner or Captain) (Seal)
SIGNED, SEALED AND
DELIVERED
on behalf of Marine Service Centre
in the presence of:
____________________________ Per: ____________________________
(Marine
Service Centre) (Seal)
Manager/Equipment Operator
[8]
As appears from the Statement of Acceptance, it
incorporates by reference the Notice and Warning signs placed in two locations
on the appellant’s premises. The Notice and Warning provide as follows:
NOTICE
AND WARNING
ALL BOATS LEFT HERE MUST BE ACCEPTABLE TO
THE MARINE SERVICE CENTER AND BE AT THE RISK OF THE OWNER/OPERATOR OF THE BOAT.
ALL BOATS SHALL BE ACCEPTABLE ONLY UPON THE RECEIPT OF THE MARINE SERVICE
CENTER OF A SIGNED “STATEMENT OF ACCEPTANCE OF RESPONSIBILITY” BY THE
OWNER/OPERATOR.
ALL BOATS LEFT HERE BY THE OWNER/OPERATOR
AND UNCLAIMED AFTER 30 DAYS OF RECEIVING NOTICE BY THE MARINE SERVICE CENTER
SHALL BE DISPOSED OF WITH THE OWNER/OPERATOR BEING RESPONSIBLE FOR THE COST OF
THE SAME.
MARINE SERVICE CENTER
OF FORTUNE
[9]
As a result of the respondent signing the
Statement of Acceptance, the Vessel was lifted from the water by the
appellant’s employees. It was then stored and supported on land by a cradle
consisting of keel blocks, which are rectangular pieces of wood, placed under the
Vessel at perpendicular angles to the keel and two pieces of “cribbing” or “supports”
on each side. The supports on each side were joined by cross-braces. Each
support is a triangular piece made of wood which is inserted against the side
of the Vessel. The supports were adjusted against the hull of the Vessel by
means of “wedges” inserted between the support
and the Vessel’s hull (my description of the cradle arrangement for the Vessel
is taken verbatim from paragraph 6 of the Joint Statement of Facts dated
December 6, 2013 filed by the parties).
[10]
Between June 27, 2011 and July 10, 2011, the
Vessel remained stored at the appellant’s premises during which time the
appellant’s employees performed general maintenance and repairs to the Vessel.
More particularly, the appellant installed new zincs, removed and inspected the
propeller and removed the rudder. Further, the appellant’s employees removed
the Vessel’s tail shaft which was sent to St. John’s, Newfoundland for repair
and, upon its return to Fortune, they would reinstall it on the Vessel.
[11]
In the early morning of July 10, 2011, heavy
winds swept through the Burin Peninsula. During that time, Heber Lethbridge, a
truck driver who was on the premises, heard a loud noise and shortly thereafter
saw the Vessel lying on the ground on its starboard side.
[12]
Following the fall of the Vessel, the appellant’s
employees did their best to minimize the damage caused to it, namely by
staunching the oil leaking from the engines and by uprighting it using a
hydraulic lift and re-cradling it, but not before the Vessel had suffered
serious structural damage.
[13]
The respondent commenced an action on February
7, 2012 in which he alleged that the appellant was a bailee for reward and thus
responsible for the safe storage of the Vessel which had been placed in the
appellant’s care, custody and control and that the appellant had failed to
discharge its duty of care.
[14]
More particularly, the respondent alleged that
the appellant had failed to install sufficient cradle supports to ensure the
safety of the Vessel, that it had failed to install additional cradle supports
on July 9, 2011 when it ought to have been aware of the weather forecast and
that it had failed to supply adequate and proper cradling materials.
[15]
In its statement of defence, the appellant
alleged that it was the respondent’s responsibility to build the cradle to
secure the Vessel for the storage period, adding that the respondent had
decided to use materials stored at the appellant’s premises and that it was its
responsibility to ascertain that the materials were sound so as to properly
secure the Vessel during the storage period. The appellant further alleged that
it was only after the respondent’s employees declared themselves satisfied that
the cradle had been properly installed that it removed the slings from under the
Vessel to let her rest on the cradle.
[16]
Consequently, according to the appellant, the
fall of the Vessel resulted from the respondent’s fault and negligence in
failing to properly secure it onto the cradle installed by its employees on
June 27, 2011.
[17]
The appellant further alleged that, in any
event, it was not responsible for the loss suffered by the respondent by reason
of the exclusion clauses found in the Statement of Acceptance and more
particularly by that part of the Statement of Acceptance which reads:
I understand and agree that the securing
and locking of my boat is my responsibility, and
not that of the said Marine Service Centre, or of its agents, servants,
employees, or otherwise. Furthermore I agree to indemnify and save harmless the
said Marine Service Centre and its officers, agents, employees, servants or
otherwise from, any claims on my part with respect to the same.
(emphasis added)
[18]
The appellant also invoked the Notice and Warning
posted on its premises to the effect that it was not responsible for vessels
entrusted to it for storage.
[19]
The case proceeded before the Judge on January
27, 28 and 29, 2014. On October 20, 2014 the Judge delivered her judgment
concluding that the loss had been caused by negligence on the part of the
appellant’s employees. The Judge further concluded that the appellant’s
employee Robert Ayres, its manager, had intentionally disposed of relevant
evidence in order to thwart the respondent’s investigation into the loss. The
Judge also found that the exclusion clauses relied on by the appellant did not
protect it against its negligence.
[20]
I will now examine the Judge’s decision in
greater detail as her findings of fact and her legal conclusions are, it goes
without saying, of great importance to the determination of this appeal.
II.
The Federal Court Decision
[21]
The first factual determination which the Judge
had to make concerned the question of who had chosen the cribbing and who had built
the cradle. After reviewing the evidence and noting that there was a conflict
in that evidence, the Judge held that both the wood used to build the cradle
and the plywood used to construct the cross bracing were owned by the
appellant. She was further satisfied that the wedges used were also the
property of the appellant and that the cribbing, the wedges and the cross
bracing materials were at all times under the physical and managerial control
of the appellant. She also held that it was the appellant’s employees that had
chosen the materials used to build the cradle.
[22]
With respect to the building of the cradle, she
reviewed the evidence and again noted that there was a conflict in the
evidence. She held that the cradle had been constructed by the appellant’s
employees and that the respondent’s employees had not been directly involved in
the construction thereof.
[23]
The next factual issue which the Judge had to
determine concerned the fitness of the cribbing materials used to construct the
cradle. In that regard, the Judge noted that that issue was also relevant to
the issue of the disposal of the materials. Again, she reviewed the evidence on
point noting that the appellant had changed its policy regarding the use of
cribbing in that prior to June 2011 it was charging for the use of the cribbing
whereas by June, 2011 it was no longer charging for it but offering it to its
clients for use at no charge.
[24]
At paragraph 54 of her reasons, the Judge made
the point that although the appellant was no longer charging for the use of the
cribbing materials, that did not relieve it from its duty to provide adequate
materials. Since, in the Judge’s view, the appellant was responsible for the
security of the Vessel while on its premises, it was an irrelevant
consideration that it had not charged for the use of the materials since it was
its duty to ensure that the materials were adequate for the job at hand.
[25]
The Judge also found that the damaged cribbing
materials were not available when the respondent’s surveyor attended the
appellant’s premises on July 12, 2011 for inspection. In her view, the damaged
cribbing materials had been removed prior to the surveyor’s attendance and was
removed with the intent that it not be available for inspection.
[26]
She further found that the cribbing materials
used by the appellant to build the cradle had been stored outside and had been
exposed to wind, rain, snow and sun.
[27]
On the basis of these factual findings, the
Judge then turned to the legal issues and made a number of legal determinations.
[28]
First, after setting out the parties respective submissions
regarding the nature of the contract and the legal consequences which arose as
a result of the events of July 10, 2011, the Judge turned to the issue of
bailment.
[29]
In her view, there was a bailment between the parties
with respect to the placing of the Vessel in the appellant’s possession at its
premises for the purpose of repairs and this notwithstanding the existence of a
contract with regard to the lifting and storage of the Vessel. The fact that
the respondent’s employees had done work on the Vessel, including the painting
thereof, did not have the effect of reverting possession of the Vessel to the
respondent while on the appellant’s premises.
[30]
Because of the existence of a bailment, the
Judge then turned to the burden of proof. More particularly, she indicated that
the burden of proof had shifted to the appellant and that it was its obligation
to show that the loss had not occurred by reason of its negligence. She then
posed the question: “Has the [appellant] met its burden
to show that it was not negligent?” (Paragraph 105 of her reasons).
[31]
She began her analysis on this issue by stating
that the issue of negligence related both to the fitness of the materials and
the manner in which the cradle had been built, adding that as she had found
that the cribbing materials had been disposed of prior to inspection by the
respondent’s surveyor, the fitness of the materials could not be assessed.
[32]
This led the Judge to discuss whether a
reasonable inference could be drawn against the appellant because of the
destruction of the damaged cribbing materials in circumstances where litigation
ought to have been contemplated by the appellant.
[33]
In her view, the damaged cribbing materials
which the appellant had disposed of prior to inspection was evidence that
related directly to the issue of negligence, adding that she was satisfied that
the appellant knew or ought to have known that the disposal of the materials
would have an impact on the respondent’s claim.
[34]
As a result, the Judge was satisfied that she
could draw an adverse inference against the appellant that the evidence was
intentionally destroyed to thwart the course of litigation. At paragraph 118 of
her reasons, the Judge made the following statement:
My conclusion in this regard raises a
rebuttable presumption that the evidence was unfavourable to the [appellant],
that is, that the cribbing materials used to construct the cradle were unsound
and unfit. The burden is on the [appellant] to rebut this presumption by
showing that it did not intend to destroy evidence relevant to existing or
contemplated litigation.
[35]
The Judge then went on to state that the
appellant had not, in the circumstances, rebutted the presumption that it had
intentionally disposed of the materials.
[36]
She then held that the appellant had been
negligent in the selection and use of inadequate cribbing materials for the
construction of the cradle and that it had not met its burden of showing that
the loss had occurred without its negligence.
[37]
Lastly, she found that there was strong evidence
to the effect that the cribbing materials had been stored outside and thus had
been exposed to wind, rain, snow and sun. This suggested to the Judge that the
cribbing materials were no longer being properly maintained by the appellant.
[38]
The Judge then turned to the exclusion clauses
which the appellant invoked to argue that it could not be held responsible for
the respondent’s loss even if it was held to be negligent in regard thereto.
More particularly, at paragraph 127 of her reasons, she set out the issue that
she had to address in the following terms:
Having concluded that the [appellant] was
negligent in the construction of the cradle, the final issue that remains to be
determined is whether the [appellant] can rely on the Statement [the Statement
of Acceptance] and the two Notices [the Notice and Warning signs], which are
incorporated into the Statement by reference, to exclude its liability for its
negligence.
[39]
She first began her inquiry into this question
by stating that neither the Statement of Acceptance nor the Notice and Warning
signs expressly, or by necessary implication, excluded the appellant’s
negligence. She then pointed out that there was some ambiguity in regard to the
word “securing” found in paragraph 3 of the
Statement of Acceptance and asked herself whether the word “securing” meant that the respondent was responsible
for lifting lines and securing buoys, as argued by the respondent, or whether
the word “securing” indicated that the
respondent was responsible for his vessel while on the cradle on the
appellant’s premises, as submitted by the appellant.
[40]
Because she was of the view that the contract
was ambiguous, she applied the contra proferentem rule of construction against the appellant,
the drafter of the document. This led her to dismiss the appellant’s submission
that the words “securing and locking” found in
paragraph 3 of the Statement of Acceptance could only mean that the respondent
was responsible for the safety of its vessel while on the cradle. Her rationale
for this conclusion appears at paragraph 134 of her reasons where she says:
Mr. Ayres was consistent in his testimony
that he was ultimately responsible for the operations of the Marine Centre, and
I have already concluded that [appellant] was in control of the construction of
the cradle. Given the control exercised by the [appellant] throughout the
process of lifting and securing the Vessel, it could not have been the
intention of the parties that the word “securing” bear the meaning proposed by
the [appellant], that is, that the [respondent] was responsible for securing
the vessel during the period of the repairs.
[41]
She then held that she could also not accept the
appellant’s submission that even though the exclusion clauses did not expressly
cover the appellant’s negligence, that negligence was excluded by necessary
implication when the Statement of Acceptance was read in its entirety. At
paragraph 136 of her reasons, she dealt with that argument as follows:
In my opinion, having regard to the
principles of contract construction relative to exclusion clauses, the
Statement and the Notices do not exclude liability for negligence, and the [appellant]
cannot rely on them to exclude its liability for negligence in connection with
construction of the cradle.
[42]
As a result, she found that the appellant was
liable for the respondent’s loss.
III.
Issues
[43]
The parties are in agreement that two issues must
be decided in this appeal. The first concerns the adverse inference drawn by
the Judge in respect of the cribbing materials disposed of by the appellant’s
employees and the second concerns the Judge’s determination that the exclusion
clauses in the Statement of Acceptance did not exclude the appellant’s
negligence for the loss of July 10, 2011.
IV.
Analysis
[44]
At the hearing before us, counsel for the
appellant, correctly in my view, made a number of concessions. He did not
dispute the Judge’s finding that there existed a bailment with regard to the
respondent’s vessel nor did he dispute, in most regards, the findings of fact
made by the Judge. He did not agree with these findings but made it clear that,
on the evidence, he was in no position to argue that the Judge had made
palpable and overriding errors which explains why, with regard to the first
issue which I will now address, he essentially couched his arguments on the
basis of procedural unfairness.
[45]
With regard to the first issue, the appellant
makes a number of submissions. First, it says that there was no evidence to
support the Judge’s finding that Mr. Ayres had intentionally disposed of
relevant evidence. It then says, after referring to paragraph 74, 117 and 120
of the Judge’s reasons, that it was never given the opportunity of rebutting
the presumption that it had disposed of relevant evidence. In its view, there
was nothing in the pleadings that could allow the Judge to draw the inference
which she drew nor had the respondent asked for her to draw such an inference.
[46]
Thus, the appellant submits that it was an error
of law on the part of the Judge to conclude that Mr. Ayres had removed the
cribbing materials in order to prevent the respondent’s surveyor from examining
it, adding that the Judge’s inference constituted “a
fundamental violation of procedural fairness resulting in a serious and
unjustified stain on the reputation and goodwill of the appellant and its
employees” (paragraph 41 of the appellant’s memorandum of fact and law).
[47]
The appellant further says that the issue
concerning Mr. Ayres’ intention was raised proprio motu by the Judge and that the parties were unaware that she had done so
until they read her reasons. Thus, procedural fairness was breached in the
circumstances as the appellant was not given an opportunity to respond to the
Judge’s theory of the case.
[48]
The appellant concludes on this issue by
inviting us to “expunge from the judgment any reference
to Mr. Ayres’ intentional removal of evidence or apply any remedy that it deems
suitable” (paragraph 47 of the appellant’s memorandum of fact and law).
[49]
Consequently, as the issue is one pertaining to
procedural fairness, the appellant submits that the applicable standard of
review is that of correctness.
[50]
The respondent totally disagrees with the view
put forward by the appellant and submits that there was no violation of the
appellant’s procedural rights. In support of that view, the respondent says
that the appellant’s submission is contrary to the facts, in that:
1.
At the trial conference of October 30, 2012, the
parties agreed that there was an issue as to whether the respondent was
entitled to an inference that the damaged cribbing destroyed by the appellant
was unsuitable for the intended purpose.
2.
The joint book of authorities contains three
cases on the issue of spoliation, all of which were raised in oral argument
before the Judge.
3.
The issue of spoliation and the question of
whether intent was necessary to trigger the doctrine of spoliation were argued
by counsel for the respondent at the trial.
4.
Counsel for the appellant also argued the issue
of spoliation at the trial and asked the Judge to find that Mr. Ayres had not
intended to destroy relevant evidence.
5. Paragraph 11 of the statement of claim clearly raised the question
of the appellant having disposed of the cradling materials without giving
notice to the respondent.
[51]
Thus, the respondent submits that it is clear
beyond doubt that the appellant’s procedural rights were not violated. He
further says that the thrust of the appellant’s complaint is directed at the
Judge’s findings of fact and thus, on that basis and on the basis that the
applicable standard for findings of fact is that of palpable and overriding
error, the Judge made no error of law that would allow this Court to intervene.
[52]
I agree with the respondent that there was no
procedural unfairness when one considers the pleadings and the evidence put
forward by the parties. I further agree with the respondent that the true
question is whether the Judge made a palpable and overriding error in finding
that the cradling materials had been intentionally removed prior to the arrival
of the surveyor so as to prevent him from examining it, that the materials had
been destroyed intentionally to thwart the course of litigation and finally,
that the appellant had not offered any proof to disprove the inference made by
the Judge.
[53]
In my view, it is sufficient for the purposes of
this appeal to say that there is no basis to conclude that the Judge made a
palpable and overriding error in concluding that the appellant had not rebutted
the inference of negligence which she had drawn. Thus, I am satisfied that
there is no basis on which we could intervene with regard to that question.
[54]
As to the question of intent with regard to the
disposal of the cribbing materials, I believe that a few additional remarks are
necessary. First, because of the Judge’s finding that the appellant was a
bailee of the respondent’s vessel, the finding of intention to remove and
dispose of the cribbing materials was not, in my respectful view, necessary to
dispose of the case. In other words, since the burden of proving that the
Vessel had been damaged without its negligence had shifted to the appellant, it
was necessary for the appellant to produce the damaged materials in order to
demonstrate its soundness for the job at hand. Thus, the appellant, in order to
succeed on the issue of negligence, had to satisfy the Judge that the materials
supplied were in good condition. As it could not produce the materials, it was
not in a position to meet its burden of proof.
[55]
Thus, by failing to produce the damaged materials
the appellant was unable to disprove the presumption of negligence against it. Consequently,
the destruction of the damaged materials was, in the circumstances of the case,
highly prejudicial to the appellant’s case. Whether or not it removed and
destroyed the materials intentionally had no effect on the burden which it had
to meet in order to disprove the Judge’s inference.
[56]
Because of the conclusion at which I arrive in
regard to the second issue and as the question of intent was not, in my
respectful opinion, relevant to the determination of the first issue, I do not
believe that it is necessary for us to decide whether the Judge made a palpable
and overriding error in reaching her conclusion as to Mr. Ayres’ intention.
However, I would say that having carefully reviewed the evidence, I would have
been very reluctant to conclude that Mr. Ayres and the appellant’s other
employees had intentionally removed and destroyed the evidence.
[57]
I now turn to the second issue which the
appellant has framed as follows at paragraph 20 of its memorandum of fact and
law:
Did the Trial Judge commit an error of law
in concluding that the exclusion Provisions were inapplicable and did not
extend to the Appellant’s negligence?
[58]
With regard to this issue, the appellant argues
that the Judge erred in law by failing to consider and apply the correct legal
test. More particularly, it says that the Judge ought to have given effect to the
clear wording of the exclusion provisions found in the Statement of Acceptance
and in the Notice and Warning signs posted on its premises. In the appellant’s
submission, these exclusion provisions and the Notices were sufficient to
exclude its liability for all boats stored and secured on its premises.
[59]
With regard to the issue of negligence, the
appellant says that the Judge failed to consider a number of Supreme Court of
Canada decisions, i.e. Tercon Contractors Ltd. v. British Columbia
(Transportation and Highways), 2010 SCC 4, [2010] 1 S.C.R. 69 and ITO
International Terminal Operators Ltd. v. Miita Electronics Inc., [1986] 1
S.C.R. 752, where the Court sets out the proper analytical grid for determining
the applicability and the scope of exclusion clauses and whether the clauses
extend to negligence.
[60]
The appellant says that had the Judge applied
the proper test she would have found in its favour.
[61]
The appellant then goes on to examine the
specifics of the exclusion clauses found in the Statement of Acceptance. More
particularly, it says that applying the test set out by the Privy Council in Canada
Steamship Lines v. the King, [1952] A.C. 192 leads to the inevitable
conclusion that its negligence was excluded.
[62]
The appellant’s arguments must fail. I have not
been persuaded that the Judge made any reviewable error in concluding that the
exclusion clauses did not protect the appellant from its negligence.
[63]
Before proceeding, it is important to remind
ourselves of the contract entered into by the parties. The Judge found, at
paragraph 100 of her reasons, that the Vessel had been taken by the respondent
to the appellant’s premises for the purpose of repairs and maintenance. In
other words, that was the job which the appellant had undertaken to perform. It
goes without saying that before commencing this work, it was necessary for the
Vessel to be taken from the water and placed somewhere on the appellant’s
premises.
[64]
I now turn to the Statement of Acceptance on
which great reliance has been placed by the appellant. This document is the
only written evidence that we have in regard to the contract entered into by
the parties. As I indicated earlier, the appellant insisted that the respondent
sign the document before taking the Vessel out of the water.
[65]
The first paragraph of the Statement of
Acceptance deals with the lifting of the Vessel from the water by the
appellant. It says that the respondent accepts responsibility for damage that
may be caused to his boat during that operation unless caused by “the negligence of the Straddle Crane operator in operating
the Marine Straddle Crane”. In my view, there is no difficulty in
understanding that paragraph. It is clearly of no relevance in regard to the
loss which occurred on July 10, 2011.
[66]
The second paragraph of the Statement of
Acceptance deals with the occurrence of fire and other such perils which might
cause damage to the respondent’s property or to that of others. In such an
event, the respondent agrees that he will be responsible if such perils result
from his negligence or that of his employees, servants and agents and he furthermore
agrees to indemnify and save harmless the appellant, its agents, servants and
employees. This clause is also irrelevant in respect of the loss of July 10,
2011.
[67]
I will presently skip the third paragraph and
will return to it shortly.
[68]
The fourth paragraph makes it clear that the
appellant will not be responsible for any damage that may be caused to the
respondent’s boat by reason of acts of God, acts of thefts, acts of vandalism,
fire or other peril from the neighbouring property or premises of others onto
the property of the appellant or in regard to the illegal or negligent actions
of third parties, howsoever caused. Should such events occur, the respondent
agrees to indemnify and save harmless the appellant, its officers, agents,
employees, servants “or otherwise from any claim on my
part [the respondent] with respect to the same”. It also goes without
saying that this paragraph of the Statement of Acceptance is, in the particular
circumstances of this case, of no relevance to the issue before us.
[69]
The fifth paragraph is one wherein the
respondent agreed that he would be liable with regard to damage caused to the
property of the appellant or to the property of any third party resulting from the
improper or inadequate blocking of his vessel or from any act of negligence,
howsoever arising, on his part, or on the part of his agents, servants, and
employees. In this scenario, the respondent agreed to indemnify and save
harmless the appellant, its officers, agents, employees and servants with
regard to claims which could be made by third parties. As no one has argued or
suggested that the damage is the result of improper or inadequate blocking,
this clause is irrelevant for the present purposes.
[70]
As to the sixth paragraph of the Statement of
Acceptance, it states that the respondent agrees that he has read the “Notice of Warning” signs posted on the appellant’s
premises and that he understands their meaning.
[71]
The last paragraph of the Statement of Acceptance
deals with charges which may be owed by the respondent with regard to the
storage of his boat on the appellant’s premises and the consequences which may
arise should he fail to pay these charges. It is also of no relevance for
present purposes.
[72]
I now return to the third paragraph of the
Statement of Acceptance which is at the heart of the appellant’s arguments on
the second issue. For ease of reference, I again reproduce the third paragraph
of the Statement of Acceptance.
I understand and agree that the securing
and locking of my boat is my responsibility, and not that of the said
Marine Service Centre, or of its agents, servants, employees, or otherwise.
Furthermore I agree to indemnify and save harmless the said Marine Service
Centre and its officers, agents, employees, servants or otherwise from, any
claims on my part with respect to the same.
(emphasis added)
[73]
Before the Judge and before us in this appeal,
there was a debate between the parties as to the meaning of the words “securing and locking” found in the third paragraph.
The respondent says that these words pertain to the securing of lines, buoys
and equipment and the closing of hatches, windows and doors of their vessel
prior to the lift and while the Vessel was on the appellant’s premises.
[74]
On the other hand, the appellant says that the
words “securing and locking” are clearly
directed at the placing of the respondent’s vessel on the cradle. In support of
that view, the appellant referred us to the decision of Mr. Justice Barry in Howell
v. Newfoundland (Attorney General), 65 Nfld & P.E.I.R. 139, 5 A.C.W.S.
(3d) 412 where the learned Judge, in dealing with a Statement of Acceptance in
which words similar to those found in the third paragraph of the Statement of
Acceptance were used, held at paragraph 35 of his reasons, that the word “securing” meant “providing an
adequate support system for it [the boat] and for its security, i.e.,
maintaining such support while the boat is stored at the [appellant’s] [The
Marine Terminal] yard”.
[75]
The Judge dealt with this particular issue at
paragraphs 131 to 134 of her reasons. Applying the contra
proferentem rule of
construction, she could not agree with the appellant’s understanding of the
words “securing and locking”. In her view,
because it was clear on the facts before her that the appellant was responsible
for the erection of the cradle, the construction of the words “securing and locking” proposed by the appellant did
not make any sense in that the appellant exercised total control over the
Vessel from the time that it lifted the Vessel out of the water and secured it
on a cradle on its premises. In the Judge’s opinion, as stated at paragraph 134
of her reasons, “it could not have been the intention
of the parties that the word “securing” bear the meaning proposed by the [appellant],
that is, that the [respondent] was responsible for securing the vessel during
the period of repairs”.
[76]
In my view, there is no basis to interfere with
the Judge’s determination of the word “securing”
found in paragraph 3 of the Statement of Acceptance. The Judge carefully
reviewed the evidence so as to determine the parties’ intention which led her
to conclude that the word “securing” could not
mean what the appellant said it meant. In Sattva Capital Corp. v. Creston
Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633, the Supreme Court revisited
the principles pertaining to contractual interpretation and the standard
pursuant to which contractual interpretation was to be reviewed. At paragraphs
47 and 48, the Court, under the pen of Rothstein J., reaffirmed that the main
concern of contractual interpretation was the determination of the parties’
intent and the scope of their understanding and in order to do so, the Judge was
bound to consider the contract at issue as a whole giving the words found
therein their ordinary and grammatical meaning consistent with the relevant
surrounding circumstances existing at the time the contract was concluded. Rothstein
J. qualified that statement by saying that the meaning of the words found in a
contract was to be arrived at by considering a number of contractual factors
such as the purpose of the contract entered into and the nature of the
relationship resulting from the contract.
[77]
The Supreme Court then stated that contractual
interpretation did “not fit well with the definition of
a pure question of law identified in Housen and Southam” (paragraph 49
of Sattva). In its view, as the purpose of contractual interpretation was
the determination of the objective intention of the parties which it characterized
as a fact specific goal, by the use of known legal principles of
interpretation, the question then appeared to be not a question of pure law,
but one of a hybrid nature, i.e. of mixed fact and law which Housen
defined as “applying a legal standard to a set of
facts” (paragraph 49 of Sattva).
[78]
After stating that a number of courts in this
country had questioned whether the Housen definition of a question of
mixed fact and law could be applied to questions of contractual interpretation
as that question was primarily a legal question, Rothstein J. made the
following remarks at paragraphs 50 and 51.
[50] With respect for the contrary
view, I am of the opinion that the historical approach should be abandoned.
Contractual interpretation involves issues of mixed fact and law as it is an
exercise in which the principles of contractual interpretation are applied to
the words of the written contract, considered in light of the factual matrix.
[51] The purpose of the distinction
between questions of law and those of mixed fact and law further supports this
conclusion. One central purpose of drawing a distinction between questions of
law and those of mixed fact and law is to limit the intervention of appellate
courts to cases where the results can be expected to have an impact beyond the
parties to the particular dispute. It reflects the role of courts of appeal in
ensuring the consistency of the law, rather than in providing a new forum for
parties to continue their private litigation….
[79]
Consequently, the Judge’s determination of the
meaning of the word “securing” is one that can
only be interfered with if she made a palpable and overriding error. On my
understanding of the contractual relationship entered into by the parties, I
see no basis on which I could conclude that the Judge made a palpable and
overriding error.
[80]
I wish to emphasize that the contract at issue
is not a contract of storage. Although storage is part and parcel of the agreement,
the prime intent of the parties in removing the Vessel from the water and placing
it on the appellant’s premises was to allow the appellant to effect repairs and
general maintenance to the respondent’s vessel. The Judge’s interpretation of
the contract and more particularly of the word “securing”
must be understood in that context. Consequently, the appellant’s argument that
the respondent agreed to be responsible for the securing of its boat on a
cradle while at rest on the appellant’s premises must fail.
[81]
In any event, even if I had been prepared to find
that the Judge had erred in determining the meaning of the word “securing”, I would still have concluded that the
appellant’s appeal could not succeed. My rationale for this is as follows.
[82]
For the purpose of the following paragraphs, I
therefore approach the third paragraph of the Statement of Acceptance on the
premise that the word “securing” means that the
respondent agreed, when signing the Statement of Acceptance, that it was his
responsibility, and not that of the appellant to secure his vessel on the
cradle while on the appellant’s premises. In other words, I assume for the
purpose of the following discussion that the respondent recognized that it was
his part of the bargain to do what was necessary to make sure that his vessel
was properly secured, i.e. to build a cradle that could support his vessel
while on the appellant’s premises.
[83]
Consequently, on this understanding, once the
Vessel was lifted from the water and placed on blocks, the appellant had no
obligation to take further steps. The ball was now in the respondent’s court. The
appellant’s argument is, in effect, that because the respondent agreed that it
was his responsibility to secure his vessel, it necessarily follows that its
negligence in regard to the securing of the Vessel must be excluded as a ground
of liability. In other words, even though the appellant and its employees took
charge of securing the Vessel, it cannot be liable for its negligence.
[84]
In my respectful view, the clause at issue is
not an exclusion clause and cannot be used by the appellant to exclude its
negligence in the circumstances of the case. The clause is a contractual
provision whereby the respondent agreed to take care of the securing of his
vessel while on the appellant’s premises.
[85]
In addressing the clause and its effects, it is
of importance to remember what the Judge found:
(i)
She found that the wood and plywood used to
build the cradle and the cross bracing was owned by the appellant and that it
was at all times under its control and supervision.
(ii)
She also found that the appellant’s employees had
chosen the materials used in building the cradle.
(iii)
She further found that the cradle had been built
by the appellant’s employees and that the respondent’s employees were not
directly involved in that operation.
[86]
Because she also found that the damaged materials
used to build the cradle were not available for inspection, having been
disposed of prior to examination, she held that she was entitled to draw an
inference against the appellant.
[87]
On the Judge’s findings, there cannot be much
doubt that the appellant and its employees took over from the respondent the
obligation to secure the Vessel while on its premises. Why that occurred is not
for us to speculate. I would simply note that at the trial witnesses for the
appellant and the respondent offered contradictory evidence as to who was in
charge of the securing of the Vessel. To put it at its simplest, the
appellant’s evidence was that its employees had only helped the respondent to
secure the Vessel while the evidence tendered by the respondent’s witnesses was
that the operation had been entirely handled by the appellant and its
employees. As I have made clear, because the Judge found the respondent’s
evidence more credible she held that the securing operation had been conducted
entirely by the appellant and its employees.
[88]
Consequently, I can only conclude that
notwithstanding the contractual provision found at paragraph 3 of the Statement
of Acceptance, the appellant and its employees took over the operation of
securing the Vessel while it was on its premises. Further, there is no evidence
that in so acting, the appellant purported to act on behalf of the respondent. I
therefore conclude that the appellant, having decided to assume the obligation
of securing the Vessel while on its premises, was bound to secure it properly.
[89]
I therefore see no basis, on the assumption that
the word “securing” means what the appellant
says it means, on which the appellant could escape its liability for the loss
caused to the respondent’s vessel.
[90]
As I have attempted to explain, other than the
third paragraph of the Statement of Acceptance, none of the other paragraphs of
the Statement of Acceptance are relevant to the loss which occurred on July 10,
2011. This leaves only the Notice and Warning signs placed on the appellant’s premises
in regard to which the Judge found that they did not exclude the appellant’s
negligence.
[91]
With respect to the contrary opinion, the Notice
and Warning signs do not help the appellant. They clearly pertain to situations
where boats have been left on the appellant’s premises for the purpose of
storage. I again reiterate that the purpose for which the Vessel was placed on
the appellant’s premises was not storage, but repairs and general maintenance. The
Notice and Warning signs use the language “all boats
left here” which language suggests that they are not relevant here considering
the nature of the contract entered into by the parties. In other words, the
case before us is not a situation where the respondent’s vessel was “left here”. The vessel was entrusted to the appellant
for the purpose of repairs and general maintenance. In my respectful view, this
is a scenario which does not fall within the purview of the Notice and Warning
signs.
[92]
Consequently, I have not been persuaded,
notwithstanding Mr. Bilodeau’s forceful arguments to the contrary, that there
is any ground upon which we could interfere with the Judge’s decision.
V.
Conclusion
[93]
For these reasons I would dismiss the appeal
with costs.
"M Nadon"
“I agree.
Johanne Trudel J.A.”
“I agree.
Yves de Montigny J.A.”
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