Date: 20001013
Docket: A-166-99
CORAM: DESJARDINS J.A.
ROTHSTEIN J.A.
NOËL J.A.
BETWEEN:
FRANK IAN LAING
Appellant
- and -
BOREAL PACIFIC, A DIVISION OF BOREAL
PROPERTY AND CASUALTY INSURANCE COMPANY
Respondent
Heard at Vancouver, British Columbia, on Thursday, October 5, 2000.
Delivered at Ottawa, Ontario, on Friday, October 13, 2000.
REASONS FOR JUDGMENT: DESJARDINS J.A.
CONCURRED IN BY: ROTHSTEIN J.A.
NOËL J.A.
Date: 20001013
Docket: A-166-99
CORAM: DESJARDINS J.A.
ROTHSTEIN J.A.
NOËL J.A.
BETWEEN:
FRANK IAN LAING
Appellant
- and -
BOREAL PACIFIC, A DIVISION OF BOREAL
PROPERTY AND CASUALTY INSURANCE COMPANY
Respondent
REASONS FOR JUDGMENT
DESJARDINS, J.A.
[1] This is an appeal from a decision of the Trial Division1 dismissing the appellant's claim under a marine insurance policy for the loss of an excavator following an accident at sea. The respondent refused to pay any part of the appellant's loss on the ground that the appellant's vessel (the "Palaquin") was not seaworthy for the voyage undertaken and that the appellant was privy to this unseaworthiness.
[2] Subsections 37(4) and (5) of the Marine Insurance Act,2 which are relevant to the case at bar, provide the following:
37. (4) There is no implied warranty in any time policy that the ship will be seaworthy at any stage of the marine adventure, but where, with the privity of the insured, the ship is sent to sea in an unseaworthy state, the insurer is not liable for any loss attributable to unseaworthiness.
(5) A ship is deemed to be seaworthy if it is reasonably fit in all respects to encounter the ordinary perils of the seas of the marine adventure insured.
[Emphasis added]
37. (4) Il n'y a aucun engagement implicite dans la police à temps quant au fait que le navire est en bon état de navigabilité à toute étape de l'opération maritime; cependant, si, avec l'assentiment de l'assuré, le navire prend la mer en état d'innavigabilité, l'assureur n'est pas responsable des pertes qui en résultent.
(5) Le navire est réputé en bon état de navigabilité lorsqu'il est, à tous égards, raisonnablement paré contre les fortunes de mer ordinaires de l'opération maritime assurée.
[Je souligne]
[3] The parties do not dispute the meaning of seaworthiness adopted by the trial judge:3
| Seaworthiness is a relative term and varies with the nature of the voyage to be undertaken: its location, whether in a river, or canal, or on the ocean; the type of weather to be expected on the voyage, summer conditions or winter storms. Improperly stowed cargo will make a vessel unseaworthy, if the improper stowage endangers the safety to the ship. When the policy covers both the vessel and the cargo, however, a vessel will not be seaworthy if in order to save the ship the cargo must be jettisoned. If a vessel is overloaded it is not seaworthy. |
[4] After a detailed narrative of the facts, the trial judge concluded that two factors had combined to render the "Palaquin" unseaworthy: (1) the vessel had been too heavily laden for the sea conditions it could reasonably be expected to encounter, and (2) the excavator, not being secured, was not stowed in a safe manner for the sea conditions the vessel could reasonably be expected to encounter.
[5] On the basis of the English Court of Appeal's decisions in Compania Maritima San Basilio S.A. v. The Oceanus Mutual Underwriting Association (Bermuda) Ltd. (The "Eurysthenes")4 and the Manifest Shipping & Co. Ltd. v. Uni-Polaris Insurance Co. Ltd. And La Réunion Européene (The "Star Sea")5, the trial judge concluded that the appellant had been privy to the "Palaquin"'s unseaworthiness. She said:6
| I am forced to conclude that Mr. Laing had knowledge not only of the facts that made the vessel unseaworthy but also "blind eye" knowledge that those facts rendered the Palaquin unseaworthy. As noted above, his evidence was that he did not consider it safe to voyage in 20 knot winds. On the morning in question the weather information demonstrates that when he started the voyage 20 knot winds existed. Those winds were from the southeast and the forecast was for increasing winds from that direction and deteriorating weather conditions. Mr. Laing knew erratic conditions exist in the Strait, especially in November. When asked why he had not secured the excavator to the barge, he told Captain Vale (and I have no reason to doubt this evidence) that he had not done so because if he got into trouble the excavator would take the barge to the bottom with it. I can reach no other conclusion than that he was privy to unseaworthiness as that concept has been described in the jurisprudence to which I was referred. |
[6] In The "Eurysthenes" case, Lord Denning, M.R., for one,7 set out the test of privity in the following manner:8
| To disentitle the shipowner, he must, I think, have knowledge not only of the facts constituting the unseaworthiness but also knowledge that those facts rendered the ship unseaworthy, that is, not reasonably fit to encounter the ordinary perils of the sea. And, when I speak of knowledge, I mean not only positive knowledge but also the sort of knowledge expressed in the phrase "turning a blind eye". If a man, suspicious of the truth, turns a blind eye to it, and refrains from inquiry--so that he should not know if for certain--then he is to be regarded as knowing the truth. This "turning a blind eye" is far more blame-worthy than mere negligence. Negligence in not knowing the truth is not equivalent to knowledge of it. |
[7] In order to conclude as she did, the trial judge had to satisfy herself that the appellant turned a blind eye to the facts giving rise to the "Palaquin"'s unseaworthiness.
[8] In my view, she correctly applied the test of privity as developed in these English cases. She addressed her mind to the wind factor and the deteriorating weather conditions known to the appellant, and also to the fact that he knew erratic conditions existed in the Strait of Georgia during that particular month of the year. She also noted that by not securing the excavator to his vessel, the appellant accepted the possibility that he might need to sacrifice his cargo. She inferred from these factors that the appellant deliberately decided to ignore a known risk contrary to his usual concern for safety.
[9] The trial judge's statement leaves no doubt that she analysed the state of mind of the appellant, and that she did so according to the high standard set by the law in this regard. There was evidence to support the conclusion she arrived at.
[10] I would dismiss this appeal with costs.
"Alice Desjardins"
J.A.
"I agree
"I agree
__________________
1Laing v. Boreal Pacific et al. (1999), 163 F.T.R. 226 (F.C.T.D.), Reed J.
2S.C. 1993, c. 22.
3Laing v. Boreal Pacific et al. (1999), 163 F.T.R. 226 at 227, para. 3 (F.C.T.D.), Reed J.
4[1976] 2 Lloyd's Law Reports 171.
5[1997] 1 Lloyd's Law Reports 360.
6(1999), 163 F.T.R. 226 at 239, para. 48.
7See also Roskill, L.J., [1976] 2 Lloyd's Law Reports 171 at 183; and Geoffrey Lane, L.J., at 187.
8[1976] 2 Lloyd's Law Reports 171 at 179.
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