Ship Ownership, Construction, Repair, and Registration

AuthorEdgar Gold; Aldo Chircop; Hugh M. Kindred; William Moreira
This chapter discusses the ownership and registration of ships. It out-
lines the steps taken by a potential owner of a ship from the time he
decides to build, through registration, to the time of mortgage and sale
of a ship. It also covers ship repair issues.
Before embarking on a discussion of ownership and registration,
it is necessary to understand what the legal notion of “ship” entails
in Canadian maritime law. There are various generic concepts, such as
vessel, craft, boat and so on, that are frequently used, and sometimes
interchangeably. Chapter 2 described a variety of ships in commercial,
government and recreational service. However, not every shape and
form of vessel qualif‌ies as a “ship” and because there are far-reaching
legal consequences upon such a designation, it is important to consider
what qualif‌ies as a ship, for what purpose, and with what consequences.
Characterizing a particular structure as a ship, or otherwise, may en-
gage or disengage maritime law jurisdiction. Indeed, it may give rise to
a constitutional issue in terms of what head of power applies when a
particular structure is considered a ship or simply real property, that is,
whether it is a federal (navigation and shipping) or provincial (prop-
erty and civil rights or local undertaking) matter. The ship has a par-
ticular legal personality as maritime property and can be the subject of
legal proceedings. It can cause harm to other ships or stationary objects
(“damage done by ship”). The ship is entitled to limitation of liability,
whether in general liability, carriage of goods or pollution liability. Fur-
ther, qualifying not simply as a “ship,” but also as a particular type of
vessel, may engage technical, safety, and environmental requirements. It
is thus useful, before proceeding with the discussion on ownership and
registration, to consider how “ship” is def‌ined in Canadian maritime
law and the diff‌iculties that may be encountered.
There are different ways how ownership over a ship may be ac-
quired, such as through the construction of a new ship, a purchase and
sale agreement of an existing ship, capture, inheritance, bankruptcy, or
judicial sale (e.g., as a result of an action in rem). The discussion in this
chapter focuses on construction and purchase and sale agreements. In-
sofar as judicial sale is concerned, this subject is left for other chapters
in this book (Chapters 6 and 8). The acquisition of a ship by way of
capture by the Crown or inheritance is omitted as these have become
rather unusual in modern shipping practice. Acquisition as a result of
bankruptcy proceedings is more appropriately dealt with in a commer-
cial law textbook. As will be seen, Canada has its own distinguishing
rules on the ownership and registration of ships (including licensing
of small vessels) and the statutory requirements are set out in Part 2,
“Registration, Listing and Recording” of the Canada Shipping Act, 20011
and regulations.2
A considerable amount of Canadian benef‌icial ownership of ships is
not registered in the Canadian Register of Vessels. Shipping is essential-
ly an international business and there are many states that do not main-
tain benef‌icially owned tonnage under their f‌lags. Others compete to
attract foreign tonnage. In addition to the discussion on the Canadian
Register, it will be necessary to consider the practice of some foreign
f‌lags, in particular open registers (also known as f‌lags of convenience),
and states that maintain dual registers. This discussion will be useful to
understand what lures Canadian shipowners to other f‌lags. The Can-
adian Register is a traditional registry in many ways. There are import-
ant legal issues, many going beyond Canadian maritime law, that need
to be weighed in advising on registration under a foreign f‌lag.
1 SC 2001, c 26 [CSA, 2001].
2 Vessel Registration and Tonnage Regulations, SOR/2007-126; Vessels Registry Fees
Tariff, SOR/2002-172; Small Vessel Regulations, SOR/2010-91.
Ship Ownersh ip, Construction, Repair, and Reg istration 277
1) What Is a Ship?
a) General Def‌initions
In the following discussion, the generic term that will be used to capture
every possible variety of “ship” is vessel, bearing in mind that “vessel”
also has a legal def‌inition. Not every vessel in a common usage of the
term is a ship in Canadian maritime law. There is no one general and
all-purpose def‌inition of ship across Canadian legislation. Federal mari-
time statutes and regulations use various def‌initions of ship and vessel,
mostly for two purposes: (1) def‌initions for the application of general
maritime statutes, such as the CSA, 2001, Federal Courts Act, and Marine
Liability Act, unless otherwise indicated; and (2) modif‌ied or special-
ized def‌initions for the purposes of certain parts of the CSA, 2001, Ma-
rine Liability Act, and other federal statutes. In examining each of these
def‌initions, care must be exercised in reading the def‌inition against the
backdrop of a statutory context or regulatory scheme.
The CSA, 2001 does not def‌ine ship and instead uses a streamlined
and expansive def‌inition of vessel for general application in the Act.
The def‌inition of vessel is as follows:
“vessel” means a boat, ship or craft designed, used or capable of being
used solely or partly for navigation in, on, through or immediately
above water, without regard to method or lack of propulsion, and in-
cludes such a vessel that is under construction. It does not include a
f‌loating object of a prescribed class.3
By including (1) boat and craft, (2) partial navigational use, (3) capab-
ility of navigation, (4) navigation through and above water, and (5) ves-
sel under construction, while (6) disregarding mode of propulsion, the
provision produces an expansive def‌inition of vessel. This is clearly a
def‌inition that intends to include, more than exclude. Exclusions apply
only in relation to f‌loating objects of a prescribed class.
The Federal Courts Act def‌ines ship, but not vessel. This def‌inition
reads as follows:
“ship” means any vessel or craft designed, used or capable of being
used solely or partly for navigation, without regard to method or lack
of propulsion, and includes
(a) a ship in the process of construction from the time that it is capable
of f‌loating, and
3 CSA, 2001, above note 1, s 2.

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