Ship Rhone v. Ship Peter A.B. Widener et al., (1993) 148 N.R. 349 (SCC)

• Judge: McLachlin and Iacobucci, JJ.
• Court: Supreme Court (Canada)
• Case Date: May 26, 1992
• Jurisdiction: Canada (Federal)
• Citations: (1993), 148 N.R. 349 (SCC);1993 CanLII 163 (SCC);101 DLR (4th) 188;[1993] 1 SCR 497;[1993] SCJ No 19 (QL);58 FTR 239;[1993] ACS no 19

Ship Rhone v. Ship Peter AB Widener (1993), 148 N.R. 349 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Great Lakes Towing Company (appellant) v. The Owners and operators of the MV Rhone, Vinalmar S.A. of Basle, Switzerland, the MV Rhone (respondents) and The MV Peter A.B. Widener, the owners and operators of the MV Peter A.B. Widener, Seaway Towing Inc. and North Central Maritime Corporation (respondents)

Great Lakes Towing Company (appellant) v. The MV Peter A.B. Widener, the owners and operators of the MV Peter A.B. Widener, Seaway Towing Inc. and North Central Maritime Corporation (respondents)

(Nos. 21885; 21886)

Indexed As: Ship Rhone v. Ship Peter A.B. Widener et al.

Supreme Court of Canada

La Forest, L'Heureux-Dubé,

Sopinka, Gonthier, Cory,

McLachlin and Iacobucci, JJ.

February 25, 1993.

Summary:

The Ship "Rhone" was moored at a pier in the Port of Montreal. The ship was struck by a barge (the Ship "Widener"), which went out of control while being towed by four tugs, the "Ohio", the "Ste. Marie II", the "South Carolina" and the "Rival". Both the Ship "Rhone" and the Ship "Widener" were damaged. The Ship "Widener" and the tug "Ste. Marie II" were owned by North Central Maritime Corp. The tugs "South Carolina" and "Ohio" were owned by Great Lakes Towing Co. and the tug "Rival" was owned by McAllister Towing. As a result of this mishap two actions were commenced. In the first action, the Ship "Rhone" and its owners sued the barge and tug owners for damages. In the second action the owners of the Ship "Widener", North Central Maritime Corp., sued Great Lakes Towing Co. (the owner of the "Ohio" and the "South Carolina"), for damages for breach of its contract of towage. Great Lakes Towing Co. denied liability in both actions and counterclaimed for limita­tion of liability under s. 647(2) of the Canada Shipping Act. The actions were joined for trial.

The Federal Court of Canada, Trial Divi­sion, in a decision reported 18 F.T.R. 81, in the action commenced by the Ship "Rhone", apportioned 80% of the liability to Great Lakes Towing Co., based on the negligence of the "South Carolina" and the "Ohio", and 20% to North Central Maritime Corp., based on the negligence of the captain of the "Widener". In the action commenced by North Central Marine Corp., the court ordered Great Lakes Towing Co. to pay all of the damages incurred by the "Widener". The court would not allow Great Lakes Towing to limit its liability under the Canada Shipping Act. Great Lakes Towing Co. appealed both decisions and North Central cross-appealed the finding of fault against the "Widener".

The Federal Court of Appeal, in a decision reported 106 N.R. 113, dismissed the appeals except to the extent of striking out the con­demnation against the tug "South Carolina". The court also dismissed the cross-appeal. The court affirmed that the captain of the tug "Ohio" was a directing mind of Great Lakes Towing Co., at least for the purpose of towing the "Widener", and therefore, Great Lakes was not entitled to limit its liability under the s. 647(2) of the Shipping Act since the damage did not occur "without Great Lakes' actual fault or privity". Great Lakes Towing Co. appealed, arguing that it was entitled have its liability limited under the Shipping Act.

The Supreme Court of Canada, McLachlin and L'Heureux-Dubé, JJ., dissenting in part, allowed Great Lakes' appeals. The court ruled that Great Lakes was entitled to limit its liability and liability in both actions respecting all the losses and damages result­ing from the collision of the "Rhone" and the "Widener" was limited to the tonnage of the "Ohio" alone.

Shipping and Navigation - Topic 501

Ships - Ownership and control - Liability of owner - Limitation of - General - The Canada Shipping Act 1985, s. 575(1) (formerly s. 647(2)), limited the liability of a shipowner where accidents occurred without the owner's actual fault or privity - The Supreme Court of Canada reviewed the general principles pertaining to the limitation of liability under the Canada Shipping Act and the development of the doctrine of corporate identification - See paragraphs 23 to 42.

Shipping and Navigation - Topic 505

Ships - Ownership and control - Liability of owner - Limitation of - Where owner's master directs other vessels in a flotilla - A barge being towed by four tugs went out of control and crashed into a moored ship - In court proceedings arising from the inci­dent, the lead tug, the "Ohio" was found to be primarily at fault - The tug owner, Great Lakes, sought to limit its liability under s. 575(1) (formerly s. 647(2)) of the Canada Shipping Act, argu­ing that the accident occurred without the actual fault or privity of Great Lakes - The other parties argued that s. 575(1) did not extend to limit Great Lakes' liability for the lead tug master's direction of other vessels within the flotilla, not owned by Great Lakes - The Supreme Court of Canada rejected this argument - See para­graphs 43 to 52.

Shipping and Navigation - Topic 506

Ships - Ownership and control - Liability of owner - Limitation of - Calculation of amount of limitation - A barge being towed by four tugs crashed into another ship - Great Lakes owned the lead tug, the "Ohio" and one other tug, the "South Carolina" - The "Ohio" was primarily at fault and the "South Carolina" not at fault - Great Lakes sought to limit its liability under the Canada Shipping Act, s. 575(1) (formerly s. 647(2)), on the basis of the "Ohio's" tonnage only - The other parties argued that the limitation was the com­bined tonnage of the "Ohio" and the "South Carolina" - The Supreme Court of Canada reviewed the law respecting limi­tation of liability for collisions involving tugs and tows - Great Lakes' liability was limited to the tonnage of the "Ohio" only, where the helper tug, the "South Carolina" was without fault - See paragraphs 53 to 67.

Shipping and Navigation - Topic 508

Ships - Ownership and control - Liability of owner - Limitation of - Onus on owner to prove lack of fault - In court proceed­ings, Great Lakes Towing was ordered to pay damages for a shipping accident pri­marily caused by its tug - The lower courts found that the tug's master was part of the directing mind of Great Lakes, and therefore, Great Lakes was not allowed to limit its liability under s. 575(1) (formerly s. 647(2)) of the Canada Shipping Act, since the damage did not occur without Great Lakes' actual fault or privity - The Supreme Court of Canada held that the courts below erred respecting the master's relationship with Great Lakes, and there­fore, Great Lakes was entitled to limit its liability because the accident occurred without its actual fault or privity - See paragraphs 23 to 42.

Words and Phrases

Actual fault or privity - The Supreme Court of Canada discussed the meaning of this phrase as it appeared in s. 647(2) of the Canada Shipping Act, R.S.C. 1970, c. S-9, and s. 575(1) of the Canada Shipping Act, R.S.C. 1985, c. S-9 - See paragraphs 23 to 52.

Cases Noticed:

Ship Lady Gwendolen, [1965] 1 Lloyd's Rep. 335 (C.A.), refd to. [paras. 18, 34].

Grand Champion Tankers Ltd. v. Norpipe A/S (The Marion), [1984] 2 All E.R. 343 (H.L.), refd to. [paras. 18, 33].

Northern Fishing Co. (Hull) v. Eddom (The Norman), [1960] 1 Lloyd's Rep. 1 (H.L.), refd to. [para. 18].

Wishing Star Fishing Co. et al. v. Ship B.C. Baron, [1988] 2 F.C. 325; 81 N.R. 309 (F.C.A.), refd to. [paras. 20, 35].

Tesco Supermarkets Ltd. v. Nattrass, [1972] A.C. 153 (H.L.), refd to. [paras. 23, 29, 30].

Stein Estate v. Ship Kathy K, [1976] 2 S.C.R. 802; 6 N.R. 359; 62 D.L.R.(3d) 1, refd to. [paras. 24, 62, 79].

Lennard's Carrying Co. v. Asiatic Petro­leum Co., [1915] A.C. 705 (H.L.), affing. [1914] 1 K.B. 419 (C.A.), refd to. [paras. 25 to 27].

Paterson Steamships Ltd. v. Robin Hood Mills Ltd. (The Thordoc) (1937), 58 Ll. L. Rep. 33 (P.C.), refd to. [para. 26].

British Columbia Telephone Co. v. Mar­pole Towing Ltd., [1971] S.C.R. 321, refd to. [paras. 26, 34, 50].

Bolton (H.L.)(Engineering) Co. v. Graham (T.J.) & Sons Ltd., [1957] 1 Q.B. 159 (C.A.), refd to. [para. 28].

H.L. Bolton (Engineering) Co. - see Bol­ton (H.L.)(Engineering) Co.

R. v. Canadian Dredge & Dock Co., Ma­rine Industries Ltd., Porter (J.P.) Co. and Richelieu Dredging Corp., [1985] 1 S.C.R. 662; 59 N.R. 241, refd to. [paras. 31, 41].

Continental Bank of Canada v. Riedel International Inc. (1991), 121 N.R. 311; 78 D.L.R.(4th) 232 (F.C.A.), refd to. [para. 33].

Ship Garden City, [1982] 2 Lloyd's Rep. 382 (Q.B. Adm. Ct.), refd to. [paras. 34, 50].

Société anonyme des minerais v. Grant Trading Inc. (The Ert Stefanie), [1989] 1 Lloyd's Rep. 349 (C.A.), refd to. [para. 35].

Grant v. Norway (1851), 20 L.J.C.P. 93, refd to. [para. 40].

Ship Bramley Moore, [1963] 2 Lloyd's Rep. 429 (C.A.), refd to. [paras. 45, 51, 59, 61, 62, 67, 78, 82, 83].

Robertson v. Ship Maple Prince (Owners), [1955] Ex. C.R. 225, refd to. [paras. 48, 55, 58, 66].

Ship Ran; Ship Graygarth, [1922] P. 80 (C.A.), refd to. [paras. 54, 55, 58, 59, 77].

Ship Harlow, [1922] P. 175 (Adm.), refd to. [paras. 54, 55, 59, 66].

Ship Freden (1950), 83 Ll. L. Rep. 427 (Adm.), refd to. [paras. 54, 66].

Ship M.S. Pacific Express (Owners) v. Tug Salvage Princess, [1949] Ex. C.R. 230, refd to. [paras. 55, 62, 66, 77].

Monarch Towing & Trading Co. v. British Columbia Cement Co., [1957] S.C.R. 816, refd to. [paras. 57, 58, 62, 66, 77].

London Dredging Co. v. Greater London Council (The Sir Joseph Rawlinson), [1972] 2 Lloyd's Rep. 437 (Q.B. Adm. Ct.), refd to. [paras. 60 to 62, 78, 83].

Ship Alvah H. Boushell (1930), 38 F.2d 980, dist. [paras. 63, 81].

Ship Bordentown (1889), 40 F. 682, refd to. [paras. 81, 87].

Ship Anthracite (1909), 168 F. 693, cert. denied (1909), 214 U.S. 522, refd to. [para. 81].

The Ship - see ship.

Statutes Noticed:

Canada Shipping Act - see Shipping Act.

Shipping Act, R.S.C. 1970, c. S-9, sect. 647(2), sect. 649 [para. 10].

Shipping Act, R.S.C. 1985, c. S-9, sect. 575(1), sect. 577 [para. 10].

Authors and Works Noticed:

Donovan, James, J., The Origins and De­velopment of Limitation of Shipowners' Liability (1979), 53 Tul. L. Rev. 999, generally [para. 88].

Ewaschuk, E.G., Corporate Criminal Lia­bility and Related Matters (1975), 29 C.R.N.S. 44, pp. 52, 53 [para. 30].

Gilmore, Grant, and Charles L. Black, Jr., The Law of Admiralty (2nd Ed. 1975), p. 822 [para. 51].

Hill, Christopher Julius Starforth, Maritime Law (3rd Ed. 1989), pp. 242 [para. 50]; 260 [para. 61].

Jones, Walter W., Flotilla or Several Vessels of Same Owner as Liable Under Federal Statute Providing for Limitation of Shipowner's Liability (46 USC §183(a)) (1971), 9 A.L.R. Fed. 768, generally [para. 81].

Kovats, L.J., The Law of Tugs and Towage (1980), p. 172 [para. 61].

Marsden, Reginald G., The Law of Colli­sions at Sea (11th Ed. 1961), pp. 131-134 [para. 88].

Muir, I.A., Tesco Supermarkets, Corporate Liability and Fault (1973), 5 N.Z.U. Law Rev. 357, p. 365 [para. 30].

Williams, Glanville, Textbook of Criminal Law (2nd Ed. 1983), p. 973 [para. 30].

Counsel:

Marc Nadon and George J. Pollack, for the appellant;

Edouard Baudry, for the respondents.

Solicitors of Record:

Martineau Walker, Montreal, Quebec, for the appellant;

Lavery, de Billy, Montreal, Quebec, for the respondents.

This appeal was heard on May 26, 1992, before La Forest, L'Heureux-Dubé, Sopinka, Gonthier, Cory, McLachlin, and Iacobucci, JJ., of the Supreme Court of Canada. The decision of the court was delivered in both official languages on February 25, 1993, including the following opinions:

Iacobucci, J. (La Forest, Sopinka, Gon­thier and Cory, JJ., concurring) - see paragraphs 1 to 68;

McLachlin, J., dissenting in part (L'Heureux-Dubé, J., concurring) - see paragraphs 69 to 94.