Canada v. Berhad

Canada v. Berhad
Court (s) Database
Federal Court of Appeal Decisions
Date
2005-08-04
Neutral citation
2005 FCA 267
File numbers
A-237-04
Notes
Digest
Decision Content
Date: 20050804
Docket: A-237-04
Citation: 2005 FCA 267
CORAM: LÉTOURNEAU J.A.
SEXTON J.A.
SHARLOW J.A.
BETWEEN:
HER MAJESTY THE QUEEN IN THE RIGHT OF CANADA,
B.S. WARNA and D.A. HALL
Appellants
and
BUDISUKMA PUNCAK SENDIRIAN BERHAD,
MARITIME CONSORTIUM MANAGEMENT SENDIRIAN BERHAD
Respondents
Heard at Vancouver, British Columbia, on June 20, 21 and 22, 2005.
Judgment delivered at Ottawa, Ontario, on August 4, 2005.
REASONS FOR JUDGMENT BY: LÉTOURNEAU J.A.
CONCURRED IN BY: SEXTON J.A.
SHARLOW J.A.
Date: 20050804
Docket: A-237-04
Citation: 2005 FCA 267
CORAM: LÉTOURNEAU J.A.
SEXTON J.A.
SHARLOW J.A.
BETWEEN:
HER MAJESTY THE QUEEN IN THE RIGHT OF CANADA,
B.S. WARNA and D.A. HALL
Appellants
and
BUDISUKMA PUNCAK SENDIRIAN BERHAD,
MARITIME CONSORTIUM MANAGEMENT SENDIRIAN BERHAD
Respondents
REASONS FOR JUDGMENT
LÉTOURNEAU J.A.
[1] On April 5, 2004, Campbell J. of the Federal Court of Canada found the Federal Government liable in tort and ordered it to pay to the respondents damages totalling $4,344,859. He ruled that employees of the Government were negligent in detaining the respondents' ship, the Lantau Peak. Her Majesty the Queen and two steamship inspectors appeal against that decision.
[2] In my respectful view, the appeal must be allowed. The decision is vitiated by a number of errors, notably by an application of the wrong legal regime to the facts of the case. For ease of reference, I include a table of contents that identifies the various issues considered in these reasons.
Table of contents
Para.
Facts and judicial history 3
The standard of review applicable to the decision of the trial judge 21
The legal regime relevant to the case at bar 22
a) International Convention for the Safety of Life at Sea, 1974 (SOLAS) 23
b) Memorandum of Understanding on Port State Control in the Asia-
Pacific Region (MOU) 25
c) Canada Shipping Act, 1985 26
The legal authority for inspecting and detaining the ship 27
Whether the ship should have been detained by the chief officer of customs
pursuant to section 329 of the Act 43
The standard of review applicable to the administrative decisions under attack 53
a) statutory mechanism of review 67
b) relative expertise of the steamship inspectors and of the Chairman of
the Board 68
c) purpose of the statute 71
d) nature of the question 76
Application of the standard of review to the facts: the reasonableness of the decisions
under attack 79
a) the fax sent by the Captain of the ship 81
b) the inspection that led to the finding that the ship was unsafe and to
its detention 90
c) the Elander Report 99
d) the Class NK Seaworthiness Certificates dated April 15 and May 5,
1997 107
e) the Flood Report 115
f) the Vertinsky Report 117
The reasonableness of the length of the detention 128
The respondents' allegations that the Chairman's decision rendered on July 18, 1997
was biased or created a reasonable apprehension of bias 148
Conclusion 156
Facts and judicial history
[3] The background to this appeal is the inspection and subsequent detention for over four months by Canadian authorities of the respondents' ship, sailing under the Malaysian flag, which arrived in Vancouver, British Columbia in April, 1997.
[4] The ship was a gearless bulk carrier with a gross tonnage of 62, 412 and was categorized as a "Capesize" vessel. It was built in 1977 in Japan under the supervision of the Japanese classification society Nippon Kaiji Kyokai (Class NK). The ship was first classed by Class NK in March, 1978 and remained classed with that society for its entire working life. At the time of its sale to the respondents in 1996, the ship was almost nineteen years old. Although a pre-sale inspection suggested that the vessel might, with proper maintenance, remain in active service for another ten years (see proceedings, vol. 4, at page 615), a more realistic assessment of the expected working life of such a ship was closer to the twenty-year mark (see the testimony of Mr. Akagi, compendium, tab 87, at page 1153). By the time of its detention in 1997, the vessel was engaged in a battle against corrosion that it would eventually lose. On December 23, 2000, it was sold for scrap (see appeal book, vol. 2, tab 118 and proceedings, vol. 4, at page 613). Over its history, the vessel engaged in worldwide trading for Showa Line of Japan and generally carried coal and iron ore from various source countries to Japan.
[5] Mr. Biant Warna and Mr. David Hall, two of the appellants, were the government steamship inspectors who inspected the vessel and ordered its detention.
[6] The respondents, Budisukma Puncak Sendirian Berhad (BPSB) and Maritime Consortium Management Sendirian Berhad (MCM), are both wholly-owned subsidiaries of Global Carriers Berhad, a company headquartered in Malaysia. BPSB was the owner of the vessel at all relevant times, having purchased the vessel in August of 1996.
[7] The ship was not unknown to Canadian steamship inspectors. In January 1996, it had been detained in Vancouver by Inspectors Warna and Hall. The 1996, week-long detention had been justified, among other things, on the basis that the vessel's hatch coamings were corroded and that it was unseaworthy.
[8] In the months leading up to its arrival in Vancouver, the ship underwent several inspections including a Port State Control inspection at Port Hedland, Australia on January 20, 1997. It also underwent Class NK inspections and surveys in China and Japan prior to departing for Vancouver on March 23, 1997.
[9] En route from Kawasaki, Japan to Vancouver, crew members noticed that eight of the vessel's hull frames in Holds Nos. 3 and 9 had become detached. On April 3, 1997, the ship's captain sent a fax to the charterer's agent in Vancouver indicating that the detachment was attributable to heavy corrosion. By the time the ship arrived in Vancouver, five more frames had become detached, for a total of thirteen. Within each hold, all of the detached frames but one in Hold No. 3 were adjacent; there were seven in Hold No. 3 and six in Hold No. 9. Arrangements were made through the ship's agent in Vancouver for those frames to be repaired upon arrival in Canada. The respondents had also been advised to be ready for Port State Control inspection upon arrival.
[10] On April 5, 1997, the ship arrived at Vancouver. A repairer boarded the vessel along with Inspectors Warna and Hall. Warna and Hall performed a Port State Control inspection and, as a result of that inspection, detained the vessel. It was taken off-hire the same day.
[11] The Report on Inspection ("Form A" and "Form B") completed on April 5, 1997 indicated that both a Safety Inspection and a Canadian Structural Inspection had been performed in accordance with the Tokyo Memorandum of Understanding on Port State Control in the Asia-Pacific Region (MOU) by Inspectors Warna and Hall and that the following deficiencies had been noted, many resulting from corrosion:
Magnetic compass to be adjusted & swung....
Accommodation ladders P & S: cranes -
Pad eyes on cranes corroded - to be replaced
Galley door to alleyway - lock to be removed
Galley screen door to deck - handles to be replaced.
Galley doors to be marked to show exit to boat deck.
The wasted, weld crack and or buckled shipside vertical frames (i) 7 frames No. 3 Hold and (ii) 6 frames - No. 9 Hold affected section to be cropped and renewed.
No.1 Hold aft Bulkhead Port & Stbd vertical main frame side stiffeners wasted at the base to be cropped and renewed. Several other side main frame face plates and frame side stiffeners damaged affected sections to be replaced.
All side vertical frames with sections exceeding 17% wastage in Holds Nos. 1, 2, 3, 4, 5, 7, 8 and 9, as listed in the Hull Condition Report dated January 9-11, 1995 to be cropped and renewed.
All deck plating with doublers between all hatch coamings to be permanently repaired (i.e. no doublers) instead plate inserts.
Ship holds and coamings to be further surveyed by the Class Surveyor and any recommendation to be included in the repair.
All above work to be done to the satisfaction of the ship safety surveyor and the Class Surveyor.
[12] Four of the above deficiencies were expressly identified as detainable deficiencies. Although the detached frames in Holds Nos. 3 and 9 also constituted a detainable deficiency, no mention of this was made in the report due to the fact that it had already been agreed that this problem would be repaired upon arrival in Vancouver.
[13] The Detention Order signed the same day, issued in accordance with the provisions of the Canada Shipping Act, R.S.C. 1985, ch. S-9 (Act), indicated that structural deficiencies were the reason for the detention and referred to "SOLAS Ch.1, Reg.11" which meant that the ship was found to be unseaworthy and would not be considered seaworthy until the structural deficiencies were repaired and until the adequacy of the repairs had been verified by port state authorities. A follow-up visit conducted by Inspector Warna on April 8th led to the following notation:
As agreed to, all highlighted sections exceeding wastage 17% in the Special Survey Thickness Report Number S/2 995/95 dated April 12 to 21st, 1995 of Shin Toyo Engineering Private Limited Singapore. Ship side vertical frames in Holds Nos. 1, 2, 3, 4, 5, 7, 8 and 9 to be cropped and renewed.
[14] The Shin Toyo Report referred to by Inspector Warna provides detailed ultrasound readings of the thickness of the steel of the hold frames as of the date it was prepared, which was during a special survey of the vessel completed in Singapore in April, 1995. These readings provide a gauge of the extent to which the ship's hull frames were affected by corrosion at that time. I will refer to the report's conclusions later in discussing the reasonableness of the decisions relating to the safety of the ship.
[15] Between April 5, 1997, the date of the initial inspection and detention of the vessel, and August 12, 1997, the date of the vessel's release, there was considerable communication between the appellants and the respondents concerning the vessel's status and the conditions that would have to be met in order to secure its release. There was also an exchange of correspondence at a higher level between Malaysian and Canadian authorities in their respective roles as representatives of the flag state and port state. The respondents expressed concerns about the extent to which Canadian authorities would insist that repairs be undertaken in Vancouver, rather than allowing the vessel to sail in ballast to China in order to complete repairs there at a much lower cost; they wanted to do only minimal repairs in Vancouver. The following chronology provides an outline of the exchanges that took place during the more than four months of detention:
April 5, 1997
Lantau Peak arrives at Vancouver. Commander Swa and a repairer board with Warna and Hall. A Port State Control inspection is performed and the ship is ordered detained. The Lantau Peak is taken off-hire.
April 6, 1997
A. Elander, at respondents' request, gauges frame webs in Hold No. 3, considered to be representative of all holds.
April 7-8, 1997
Inspector Warna re-attends at the ship.
April 10, 1997
The vessel's flag state Malaysia writes to Inspector Hall requesting release.
April 11, 1997
MCM writes to Inspector Hall et al. advising of the difference in cost between having repairs done in China versus in Canada.
April 15, 1997
Class NK issues a conditional Seaworthiness Certificate for the Lantau Peak, with a view to allowing it to sail in ballast to China in order to have repairs done there.
April 18, 1997
The vessel's compass is swung and a certificate issued in confirmation.
April 18, 1997
Class NK Tokyo faxes Class NK Vancouver confirming corrosion criteria of 25% for face plate and 7.5mm min. for web.
April 21, 1997
Class NK issues a further survey report indicating the vessel is within class as long as certain repairs are done.
April 22, 1997
A without prejudice meeting is held at the office of the appellants.
April 23-24, 1997
A briefing note is prepared by B. Warna, reviewed by D. Hall and Capt. P. Nelson and sent to B. Streeter by Capt. P. Nelson.
April 25 and 30, 1997
Ottawa advises Malaysia that the vessel would be released for a ballast voyage providing frames on Holds Nos. 4, 5, 7 and 8 with wastage greater than 25% were renewed and other detainable deficiencies referred to in the April 5 report were rectified.
May 1 and 5, 1997
Inspector Warna re-attends on vessel.
May 2, 1997
Letter sent on Mr. Streeter's behalf to Malaysia requesting that frames with wastage greater than 33% be renewed prior to the ship sailing from Vancouver.
May 5, 1997
Class NK issues a further conditional Seaworthiness Certificate.
May 6, 1997
Letter from Transport Canada confirming completion of work except disputed frames.
Letter from Transport Canada to Ministry of Transport Malaysia.
May 8, 1997
Class NK writes to Malaysian government setting out corrosion criteria as above. Information confirmed received in Ottawa on May 13, 1997 via Campney & Murphy letter dated May 12, 1997.
May 14, 1997
Counsel for respondents advises Mr. Streeter vessel ready to sail to Shanghai.
May 15, 1997
Mr. Jenkins writes to Malaysia (on Mr. Streeter's behalf), insisting 180 frames are wasted beyond class standards.
May 23, 1997
MCM writes to Ottawa reiterating standards and denying they are not met.
June 2, 1997
Capt. Khoo writes to Class NK proposing another letter be sent to Ottawa explaining Class criteria.
June 3, 1997
Class NK sends letter to Ottawa clearly stating corrosion criteria.
June 18, 1997
Mr. Flood, a naval architect in Ottawa, suggests conditions on which the Lantau Peak could sail to Shanghai.
June 23, 1997
Malaysia faxes Transport Canada section modulus calculations based on assumed thickness of 7.0mm and 6.0mm.
July 11, 1997
In response to a July 8th request from MCM to allow the vessel to be towed to China for repairs, Mr. Hall sets out conditions on which such a voyage could be undertaken.
July 15, 1997
Letter from Class NK confirming instructions to gauge all holds.
July 18, 1997
Mr. Streeter issues his appeal decision, stating inter alia that frames with web wastage of 33% or higher in Holds Nos. 4, 5, 7 and 8 are to be renewed prior to departure from Vancouver. The rest of the repairs are to be completed upon arrival in China.
July 18, 1997
Class NK letter to Malaysian government re: gauging.
July 22-23, 1997
Respondents engage CR Cushing of New York to do a structural survey of frames in Holds Nos. 4, 5, 7 and 8.
July 30, 1997
Mr. Warna re-attends on the Lantau Peak.
various dates
The respondents do the required repair work in Vancouver.
August 11, 1997
Mr. Warna re-attends on the Lantau Peak.
Class NK issues Class Survey Record, Statutory Survey Record, and Seaworthiness Certificate, outlining work done in Vancouver and work to be completed in China.
August 12, 1997
The vessel is released from detention.
September 20, 1997
Gauging of the cargo holds done in China. Report of thickness measurements of Nantong Ocean Ship Engineering Co. Ltd. issued (Nantong Report).
October 10, 1997
Additional repairs required by the Department of Transport completed on or about this date in China. The Lantau Peak is placed back on-hire.
Although the events which followed the detention will be reviewed in greater detail later in the reasons, the following key elements are worth underlining at this juncture.
[16] On April 6, 1997, at the request of the respondents, Mr. Allan Elander, the principal of Elander Inspection Ltd., attended on the ship and did an ultrasound reading to gauge the thickness of the side shell frames in Hold No. 3. This hold was chosen because its frames were considered to be representative of the condition of the ship's cargo hold side frames and would therefore permit an assessment of the level of corrosion affecting the ship's frames (see appeal book, vol. 16, tab 1, at page 3273).
[17] On July 11, 1997, Inspector Hall set out the conditions on which the vessel might be towed to China for repairs if, as requested by the respondents, they were authorized to do so.
[18] By letter dated July 18, 1997, Mr. Bud Streeter, Director General of Marine Safety for Transport Canada and Chairman of the Board of Steamship Inspection (Chairman), issued his decision in the respondents' appeal of the initial detention decision. In it, the Chairman confirmed most of the existing conditions for a ballast voyage to China, but did modify the two levels of corrosion that would act as triggers for either the requirement to do some of the repairs in Vancouver prior to departure or the requirement to do the rest of the repairs in China upon arrival. There was no modification to the requirement of repairing the detached hull frames in Vancouver prior to departure. For a voyage to Shanghai in ballast, it was stated that all frames with web wastage of 33% or higher in Holds Nos. 4, 5, 7 and 8 would have to be repaired in Vancouver prior to departure. As for the remaining frames with high levels of corrosion, it was stated that only those frames with corrosion of 25% (as opposed to 17%) or higher would need to be repaired in China. The same 25% standard would apply if the ship's owners decided to conduct repairs in Vancouver with a view to making the return voyage fully loaded.
[19] Although the vessel's compass was adjusted on April 18, 1997, the remainder of the work required by Canadian authorities did not commence until late July, 1997. In late July and early August, the vessel was repaired in Vancouver to the extent required in order to undertake the voyage in ballast to China for completion of repairs there. Following an inspection on August 11, 1997 by Inspector Warna, the ship was released from detention on August 12, 1997 and set sail for China, where outstanding repairs were completed by mid-October, 1997.
[20] Although, as indicated above, the respondents appealed the decision of the Inspectors to the Chairman under subsection 307(1) of the Act, they did not appeal that second-level decision to the Minister of Transport, as they could have under subsection 307(3) of the Act. Instead, almost a year and a half later, they commenced an action against the government in tort for negligence in the Federal Court. The trial judge found in their favour, hence the present appeal.
The standard of review applicable to the decision of the trial judge
[21] On appeal, this Court will not intervene with a trial judge's findings of fact or with his findings involving questions of mixed fact and law unless such findings disclose a palpable and overriding error. On questions of law, however, a standard of correctness applies. That standard also applies to the legal issue involved in a question of mixed fact and law where the legal issue can be easily extricated from the facts: Housen v. Nikolaisen, [2002] 2 S.C.R. 235 at paragraphs 8 and 10.
The legal regime relevant to the case at bar
[22] In order to understand the nature of the decision under review, it is important to have a sense of the legal regime governing the decision to inspect and detain the respondents' ship. This regime includes international instruments, mutual agreements as well as Part V of the Act, the principal piece of domestic legislation in this area.
a) International Convention for the Safety of Life at Sea, 1974 (SOLAS)
[23] This instrument is the latest iteration of an international maritime safety regime which dates back to 1914. The current treaty was adopted on November 1, 1974 (1184 U.N.T.S. 2) and entered into force at the international level on May 25, 1980. Canada became a contracting party and acceded to SOLAS on May 8, 1978. SOLAS specifies minimum standards for the construction, equipment and operation of merchant ships and prescribes various certificates that ships must carry in order to demonstrate that they have met these standards. States that have ratified SOLAS implement the treaty by incorporating its requirements into domestic legislation. In Canada, this has been done under the Act as well as by means of regulations enacted pursuant to it. Therefore, while it may be correct to say that Canada has not implemented SOLAS in its entirety, it has incorporated much of the treaty into domestic law through the Act.
[24] SOLAS represents a balance between respect for flag state jurisdiction and acknowledgment of the jurisdiction of the port state. Compliance with international obligations is verified by inspections and surveys that are carried out by representatives of the maritime administration of the port state, by representatives of the maritime administration of the flag state, or by organizations nominated by the flag state such as the recognized classification societies: see Gold, Chircop and Kindred, Maritime Law (Toronto: Irwin Law Inc., 2003) at pages 198-199. As was the case in this instance, inspections in Canadian waters of both Canadian and foreign-flag ships are carried out by the Canadian Steamship Inspection Service.
b) Memorandum of Understanding on Port State Control in the Asia-Pacific Region (MOU)
[25] The MOU is a non-binding mutual agreement which was concluded in Tokyo on December 1, 1993 by the maritime authorities of various Asia-Pacific states, including Canada. It attempts to harmonize and coordinate the process of Port State Control and the role of flag states, port states, shipowners and classification societies in ensuring compliance with international obligations such as those under SOLAS. Canada carries out its inspection role under the MOU pursuant to Part V of the Act.
c) Canada Shipping Act, 1985
[26] As noted above, the Act is the core piece of domestic legislation affecting navigation and shipping. It is through this legislation that Canada's participation in international instruments is implemented. In the same vein, it is through the regulatory powers of the Act that Canada carries out its undertakings under the MOU relating to inspections: see Gold, supra, at page 230. The Act is also, as we shall see, the source of the authority under which the decisions under review were made in this case.
The legal authority for inspecting and detaining the ship
[27] The appellants submitted before the trial judge that they acted under the authority of section 310 of the Act. The section reads:
310. (1) A steamship inspector, in the performance of his duties, may go on board any ship at all reasonable times and inspect the ship, or any of the machinery or equipment thereof, or any certificate of a master, mate or engineer, and if he considers the ship unsafe, or, if a passenger ship, unfit to carry passengers, or the machinery or equipment defective in any way so as to expose persons on board to serious danger, he shall detain that ship.
(2) A steamship inspector may detain any ship in respect of which any of the provisions of this Act have not been complied with, if, in his opinion, detention is warranted in the circumstances.
(3) When, under this section, a steamship inspector visits any ship, he may ask the owner or his agent, the master or chief engineer, or any other person on board and in charge or appearing to be in charge any pertinent question concerning the ship, or concerning any accident that has happened thereto, that he thinks fit, and every such person shall fully and truly answer every question.
(4) A steamship inspector may require that the machinery of a ship be put in motion so that he may satisfy himself as to its condition.
310. (1) Un inspecteur de navires à vapeur peut, dans l'exercice de ses fonctions, monter à bord de tout navire, à des heures convenables, inspecter le navire, ses machines ou son équipement et examiner le certificat ou brevet du capitaine, d'un officier de pont ou d'un officier mécanicien; si le navire lui paraît dangereux, ou dans le cas d'un navire à passagers, inapte au transport de passagers, ou si les machines ou l'équipement lui paraissent défectueux au point d'exposer sérieusement au danger les personnes à bord, il doit détenir ce navire.
(2) Un inspecteur de navires à vapeur peut détenir un navire à l'égard duquel l'une des dispositions de la présente loi n'a pas été observée, s'il juge que les circonstances le justifient.
(3) Durant la visite qu'il opère d'un navire en vertu du présent article, un inspecteur de navires à vapeur peut poser au propriétaire ou à son agent, au capitaine ou au chef officier mécanicien, ou à toute autre personne se trouvant à bord et ayant la direction du navire, ou paraissant l'avoir, toute question pertinente qu'il juge à propos concernant le navire ou un accident qui lui est survenu; ces personnes doivent répondre à la question d'une manière complète et conforme à la vérité.
(4) Un inspecteur de navires à vapeur peut exiger que les machines d'un navire soient mises en marche, afin de pouvoir se rendre compte de leur état.
(emphasis added)
Subsection 310(1) gives a steamship inspector the power to go on board any ship and inspect it. It also gives the inspector a discretionary power to assess the safety of the ship. When he considers the ship to be unsafe, he is then under a duty to detain it. The term "ship" is broadly defined in section 2 of the Act as including "any description of a vessel used in navigation and not propelled by oars". Some Parts of the Act are excluded from that definition, but they are not relevant to this case.
[28] Subsection 310(2) grants the inspector a separate discretionary power to detain any ship in respect of which there has been a violation of the Act.
[29] The respondents argued before the trial judge that a reading of the Act together with the Non-Canadian Ships Safety Order, C.R.C., c. 1452 (1978) (the NCSS Order) leads to the conclusion that Part V of the Act, in which section 310 is found, does not apply to their ship. Therefore, the respondents argue, the steamship inspector had no legal authority under the Act to detain the ship.
[30] The NCSS Order is a regulation enacted pursuant to section 481 (now section 420) of the Act. The text of the two sections is identical. I therefore reproduce the current section:
420. (1) The Governor in Council may direct that this Part or any of the provisions thereof shall apply to any ship or class of ship registered elsewhere than in Canada while within Canadian waters.
420. (1) Le gouverneur en conseil peut ordonner que la présente partie ou que l'une queconque de ses dispositions s'applique à un navire ou à une classe de navires immatriculés ailleurs qu'au Canada, pendant que ce navire ou un navire de cette classe se trouve dans les eaux canadiennes.
[31] The NCSS Order directs the application of section 110 of the Act (which requires certain ships to be provided with certificated engineers) and Part VIII of the Act (the provisions relating to ship safety, now Part V of the Act; section 310 is part of Part V) be extended to ships registered elsewhere than in Canada in certain circumstances. For example, the NCSS Order extends the application of what is now Part V of the Act to ships registered elsewhere than Canada that, among other things, are being used or operated at a place within Canadian waters: see subparagraph 3(c) of the Order.
[32] The trial judge found, properly so in my view, that the respondents' ship met that criterion since it was coming to Vancouver to load a shipment of coal. From there, he relied upon subparagraph 6(a)(ii) of the NCSS Order to conclude that Part V of the Act had been complied with and, therefore, that section 310 of Part V did not apply. That subparagraph reads:
6. A non-passenger ship or a passenger ship that carries not more than 12 passengers shall be regarded as complying with those provisions of Part VIII of the Act [now Part V of the Act] and the regulations thereunder dealing with
(a) the hull and machinery, if the ship has on board
(i) a valid Cargo Ship Safety Construction Certificate issued under the Safety Convention, or
(ii) a valid certificate issued by a recognized classification society showing that the ship is in class; and
(b) life saving and fire extinguishing equipment, if the ship has on board a valid Cargo Ship Safety Equipment Certificate issued under the Safety Convention,to the extent that those provisions are requirements of the Safety Convention or classification society rules, as the case may be.
6. Un navire non à passagers ou un navire à passagers transportant 12 passagers au plus est censé avoir observé les dispositions de la Partie VIII de la Loi [maintenant la Partie V de la Loi] et des règlements établis en exécution de cette partie
a) quant à la coque et aux machines, si le navire a à son bord
(i) un certificat valide de sécurité de construction pour navire de charge délivré selon la Convention de sécurité, ou
(ii) un certificat valable délivré par une société de classification reconnue constatant que le navire est coté, et
b) quant à l'équipement de sauvetage et au matériel d'extinction d'incendie, si le navire a à son bord un certificat valide de sécurité du matériel d'armement pour navire de charge délivré selon la Convention de sécurité,
dans la mesure où ces dispositions sont prévues dans la Convention de sécurité ou les règles de la société de classification, selon le cas.
(emphasis added)
[33] The trial judge accepted the respondents' submission and ruled, as a matter of law, that the Act, in particular Part V and, therefore, section 310, did not provide the legal authority for the seizure and detention of the ship. Rather, he concluded that such authority was to be found in the MOU and SOLAS. Surprisingly, he came to that conclusion after having accepted that all persons involved believed that the action taken was as a Port State Control measure, that the detention itself was under section 310 of the Act, that the detention order was issued pursuant to the Act and that respondents' appeal to the Chairman against the inspectors' detention order was an appeal of a section 310 decision: see paragraphs 91 to 93 of his decision.
[34] In fact, I am of the view that the trial judge came to exclude the application of the Act because of his misunderstanding of the purpose of the NCSS Order and his misapprehension of the Act.
[35] I am satisfied that the whole of Part V relating to the safety of ships, including inspection powers to ensure the seaworthiness of a ship (section 310) applies to non-Canadian ships, either because of the broad statutory definition of ship in section 2 of the Act, or as a result of the extension of Part V to non-Canadian ships under the NCSS Order.
[36] The NCSS Order creates, in subparagraph 6(a)(ii), a rebuttable presumption of compliance with the requirements of Part V of the Act for non-Canadian ships that possess a valid class certificate issued by a recognized classification society. Of course, conditions aboard a ship may change after the time a class certificate is issued. The hull or machinery of a ship may be damaged while loading or at sea, or may deteriorate, thereby causing a safety problem that Part V of the Act is designed to address. In other words, a valid class certificate is not an end in itself, let alone an immunity against safety inspections. Indeed, this is evidenced by the fact that Regulation 10 of SOLAS, for example, provides that the hull, machinery and equipment of a cargo ship "shall be surveyed on completion and thereafter in such a manner as the Administration may consider necessary in order to ensure that their condition is in all respects satisfactory". The provision requires inspections at intervals which cannot exceed five years. In addition to such periodical inspections, a tanker of ten years of age and over must undergo a minimum of one intermediate survey during the period of validity of its Cargo Ship Safety Construction Certificate.
[37] Subsection 328(3) of the Act is to the same effect. A non-Canadian cargo ship that holds a valid Cargo Ship Safety Equipment or Safety Construction Certificate or an exemption Certificate relating to either of the certificates is exempted from an inspection but only in respect of matters dealt with by such certificates. Moreover, under subsection 328(3), that exemption no longer applies "where it is necessary to determine that the condition of the ship and its equipment corresponds substantially with the particulars set out in the certificates". I see nothing in the NCSS Order that expressly or impliedly excludes the general regime of steamship inspection for safety. Specifically, the NCSS Order does not, and does not purport to, exempt any foreign ship from the requirement to submit to safety inspections under section 310 of the Act.
[38] The Act contains no provision authorizing the Governor-in-council to enact regulations exempting ships from safety inspections and shipowners from complying with safety regulations. Although section 421 of the Act gives the Minister the authority, in certain circumstances, to exempt foreign ships from the requirements of the Act, that authority does not permit any exemption from the provisions relating to the seaworthiness of a ship where the ship is unsafe and unfit by reason of its hull, equipment or machinery. Section 421 of the Act reads as follows:
421. (1) Notwithstanding anything in this Part, the Minister, on the recommendation of the Chairman, may relieve any Canadian ship or the owner of any such ship from compliance with any of the provisions of this Part or regulations made under this Part relating to steamship inspection, except provisions relating to radio installations in ships, in any specific case of emergency where the Minister may deem it necessary or advisable in the public interest, to such extent, in such manner and on such terms as he may consider proper in the circumstances, but the Minister shall not relieve any ship or owner from compliance with any such provision to such extent or in such manner as would permit any ship to proceed to sea or make any voyage or trip in an unseaworthy condition, that is to say, unfit by reason of the defective condition of its hull, equipment or machinery, or by reason of undermanning, overloading or improper loading, to proceed to sea or make any such trip or voyage without serious danger to life.
421. (1) Nonobstant toute autre disposition de la présente partie, le ministre peut, sur la recommandation du président, dispenser un navire canadien ou le propriétaire d'un tel navire de l'observation de l'une quelconque des dispositions de la présente partie ou de ses règlements d'exécution qui se rapportent à l'inspection des navires à vapeur, exception faite des dispositions visant les installations radio sur les navires, dans tout cas particulier d'urgence où le ministre peut le juger nécessaire ou opportun pour l'intérêt public, dans la mesure, de la manière et aux conditions qu'il peut juger appropriées aux circonstances; mais le ministre ne peut dispenser un navire ou un propriétaire de l'observation de l'une quelconque de ces dispositions dans une mesure ou d'une manière qui permettrait à un navire de prendre la mer ou d'accomplir un voyage ou un trajet en état d'innavigabilité, c'est-à-dire inapte, en raison de l'état défectueux de sa coque, de son équipement ou de ses machines, ou de l'insuffisance de son équipage, de surchargement ou de vice de chargement, à prendre la mer ou à accomplir un voyage ou un trajet sans mettre gravement en danger la vie humaine.
(emphasis added)
[39] I am compelled to conclude that the trial judge was wrong to find that the Act did not apply to the respondents' ship because of the NCSS Order and, therefore, that the Act was not the legal authority under which the ship was detained. Contrary to what the trial judge found, the purpose of the NCSS Order was not to create this kind of exemption. The NCSS Order did not and could not legally have that effect.
[40] It was also an error for the trial judge to conclude that the legal authority for detention was to be found in the MOU. At best, the MOU can provide a consensual authority among the maritime authorities who are a party to the agreement. However, the preamble of the MOU expressly indicates that "the Memorandum is not a legally binding document and is not intended to impose any legal obligation on any of the Authorities". Moreover, in Section 3 entitled Inspection Procedure, Rectification and Detention, subsection 3.2.3 preserves the scope of a local authority's power to take measures within its jurisdiction. After having described a suggested procedure for the inspection and detention of a ship, subsection 3.2.3 states:
Nothing in these procedures should be construed as restricting the powers of the Authorities to take measures within their jurisdiction in respect of any matter to which the relevant instruments relate.
[41] As previously mentioned, SOLAS was ratified by Canada and implemented in part in the Act through section 316 and regulations enacted pursuant to section 314: see Gold, supra, at page 198. The two sections read:
314. The Governor in Council may make regulations to implement the Safety Convention and the Load Line Convention.
316. (1) Every Canadian Safety Convention ship that is a passenger ship and every nuclear ship registered in Canada shall have its hull, machinery and equipment inspected by a steamship inspector in accordance with the regulations before the ship is first put into service and at least once in each year thereafter.
(2) Every Canadian Safety Convention ship that is a cargo ship of five hundred tons gross tonnage or more, other than a nuclear ship, shall have
(a) its equipment inspected by a steamship inspector in accordance with the regulations before the ship is first put into service and at least once every two years thereafter; and
(b) its hull and machinery inspected by a steamship inspector in accordance with the regulations before the ship is first put into service and at least once in each year thereafter or, if surveys or inspections referred to in subsection 319(4) are made, in such longer period, not exceeding twenty-five years, as may be prescribed by regulations made under paragraph 319(5)(f).
(3) Subject to sections 405 to 407, every Canadian steamship that is not a ship described in subsection (1) or (2) shall have its hull, machinery and equipment inspected by a steamship inspector in accordance with the regulations before the ship is first put into service and at least once in each year thereafter or, if surveys or inspections referred to in subsection 319(4) are made, in such longer period, not exceeding twenty-five years, as may be prescribed by regulations made under paragraph 319(5)(f).
(4) Notwithstanding subsections (2) and (3), where the hull, machinery and equipment of a ship described in those subsections are inspected at intervals less frequent than once a year, the ship shall, in addition, be inspected by a steamship inspector at least once in each year to the extent prescribed in the regulations.
(4.1) Notwithstanding the definitions "equipment" and "hull" in section 2, anchors and cables shall, for the purposes of subsections (2), (3) and (4), be deemed to be part of the hull and not part of the equipment.
(5) It is the duty of the owner to have an inspection made under this section, and no steamship described in this section shall be used unless there is on board and in force a certificate or certificates issued under section 318 or 319, applicable to the voyage on which the steamship is about to proceed and to the trade in which it is engaged.
(6) The owner or person in charge for the time being of any steamship that makes any voyage contrary to this section is guilty of an offence and liable to a fine of not more than one thousand dollars and not less than one hundred dollars.
(7) Where a fine imposed under subsection (6) and the costs of conviction are not paid forthwith, the steamship, subject to the direction of the Minister, is liable to be seized and sold by a chief officer of customs, or any person thereto directed by the Minister, and the fine, the costs of conviction and the costs of the seizure and sale shall be paid out of the proceeds of the sale, and the surplus, if any, shall be paid over to the owner of the steamship.
314. Le gouverneur en conseil peut prendre des règlements pour mettre en oeuvre la Convention de sécurité et la Convention sur les lignes de charge.
316. (1) La coque, l'équipement et les machines de tout navire canadien ressortissant à la Convention de sécurité, qui est un navire à passagers, et de tout navire nucléaire immatriculé au Canada doivent être inspectés par un inspecteur de navires à vapeur comme l'exigent les règlements, avant l'entrée en service du navire et, par la suite, au moins une fois par année.
(2) Tout navire canadien soumis à l'application de la Convention de sécurité, qui est un navire de charge d'une jauge brute de cinq cents tonneaux ou plus, autre qu'un navire nucléaire, doit soumettre à l'inspection d'un inspecteur de navires à vapeur, conformément aux règlements, les éléments suivants :
a) son équipement, avant l'entrée en service du navire et, par la suite, au moins une fois tous les deux ans;
b) sa coque et ses machines, avant l'entrée en service du navire et, par la suite, au moins une fois chaque année ou, si des visites ou des inspections visées au paragraphe 319(4) sont faites, à intervalle plus long mais n'excédant pas vingt-cinq ans tel qu'il est prévu par les règlements pris en vertu de l'alinéa 319(5)f).
(3) Sous réserve des articles 405 à 407, la coque, l'équipement et les machines de tout navire à vapeur canadien, qui n'est pas un navire décrit au paragraphe (1) ou (2), doivent être inspectés par un inspecteur de navires à vapeur conformément aux règlements, avant l'entrée en service du navire et, par la suite, au moins une fois chaque année ou, si des visites ou inspections mentionnées au paragraphe 319(4) sont faites, à intervalle plus long mais n'excédant pas vingt-cinq ans et sous réserve des conditions que peuvent prévoir les règlements pris en vertu de l'alinéa 319(5)f).
(4) Nonobstant les paragraphes (2) et (3), lorsque la coque, l'équipement et les machines d'un navire décrit à ces paragraphes sont inspectés à des intervalles moins fréquents qu'une fois l'an, le navire doit, en outre, être inspecté par un inspecteur de navires à vapeur au moins une fois chaque année, dans la mesure prévue par les règlements.
(4.1) Par dérogation aux définitions de « équipement » et de « coque » à l'article 2, les ancres et les chaînes sont réputées, pour l'application des paragraphes (2), (3) et (4), faire partie de la coque et non de l'équipement.
(5) Le propriétaire est tenu de faire faire l'inspection, et aucun navire à vapeur visé au présent article ne peut être utilisé à moins qu'il ne se trouve à son bord un ou des certificats en vigueur, délivrés en vertu des articles 318 ou 319 et applicables au voyage que le navire se dispose à entreprendre et au trafic auquel il est affecté.
(6) Le propriétaire ou la personne ayant la direction d'un navire à vapeur qui accomplit un voyage en contravention avec le présent article commet une infraction et encourt une amende de cent à mille dollars.
(7) Lorsque l'amende et les frais de déclaration de culpabilité ne sont pas acquittés immédiatement, le navire à vapeur, sous réserve des instructions du ministre, est passible de saisie et de vente par un préposé en chef des douanes ou toute autre personne désignée à cette fin par le ministre; l'amende et les frais de déclaration de culpabilité, ainsi que les frais de la saisie et de la vente, sont acquittés sur le produit de la vente, et l'excédent, s'il en est, est rendu au propriétaire du navire.
(emphasis added)
[42] The NCSS Order and section 420 of the Act make these provisions implementing SOLAS in domestic law applicable to non-Canadian ships. It is therefore the Act, and not SOLAS the international convention, that provided the legal authority for the detention that occurred in the case at bar.
Whether the ship should have been detained by the chief officer of customs pursuant to section 329 of the Act
[43] The respondents submitted that if this Court were to find that the Act applied, the detention of the ship should then have been ordered by the chief officer of customs pursuant to paragraph 329(1)(b) that I reproduce:
329. (1) Where a valid Safety Convention certificate is produced in respect of a Safety Convention ship that is not a Canadian ship,
(a) the ship is exempt from compliance with the regulations made under this Act with respect to life-saving appliances; and
(b) the ship shall not be deemed to be unsafe for the purposes of section 392 by reason of the defective condition of the hull, equipment or machinery, if it appears that the conditions correspond substantially with the particulars in the certificate, but if it appears to the chief officer of customs that the conditions do not correspond substantially with the particulars in the certificate and that the ship cannot proceed to sea without danger to the passengers or the crew, he shall detain the ship until he is satisfied that the ship can proceed safely to sea.
(2) Where a ship is detained under paragraph (1)(b), the chief officer of customs shall forthwith inform the consular officer of the country in which the ship is registered of all the circumstances of the case and shall advise the Chairman of the action he has taken.
329. (1) Lorsqu'un certificat valable de la Convention de sécurité est présenté à l'égard d'un navire soumis à l'application de la Convention de sécurité qui n'est pas un navire canadien :
a) le navire est exempté de se conformer aux règlements pris sous l'autorité de la présente loi quant aux engins de sauvetage;
b) le navire n'est pas censé être dangereux aux termes de l'article 392 à cause de l'état défectueux de sa coque, de son équipement ou de ses machines, s'il apparaît que les conditions correspondent essentiellement aux renseignements donnés dans le certificat, mais s'il apparaît au préposé en chef des douanes que les conditions ne correspondent pas essentiellement aux renseignements donnés dans le certificat et que le navire ne peut pas prendre la mer sans compromettre la vie des passagers ou de l'équipage, il doit détenir le navire jusqu'à ce qu'il soit convaincu que celui-ci peut prendre la mer sans danger.
(2) Lorsqu'un navire est détenu en vertu de l'alinéa (1)b), le préposé en chef des douanes doit faire connaître immédiatement toutes les circonstances au fonctionnaire consulaire du pays où le navire est immatriculé et aviser le président de la mesure qu'il a prise.
(emphasis added)
They submit, therefore, that the detention by the inspectors pursuant to section 310 of the Act was illegal.
[44] As the argument goes, section 329 is a specific provision dealing with non-Canadian ships holding a valid Safety Convention certificate. It is a specific provision that derogates from the general regime provided by section 310. It is, therefore, the applicable provision.
[45] The submission is attractive at first glance, but it does not withstand a careful reading of section 329 and a proper understanding of that section's purpose.
[46] Paragraph 329(1)(b) bestows a form of privilege on a non-Canadian ship holding a Safety Convention certificate, but it does so for the purposes of section 392. Section 392 is found in Part V under the heading "Ships Alleged to be Unseaworthy".
[47] Provisions under this heading address the issues of the safety of the crew and their rights to lodge a complaint about the unseaworthiness of a ship or the sufficiency of their accommodation or, if charged with desertion or leaving the ship without leave, to request a survey of the ship. The survey can be conducted by a surveyor of ships appointed under the Act, a person appointed for that purpose by the Minister or, where such surveyor or person cannot be obtained without unreasonable expense or delay, by a surveyor appointed by the Court: see subsection 391(5) of the Act. Any person making this kind of survey possesses, for the purposes thereof, all the powers of a steamship inspector: see subsection 391(7). Generally speaking, pursuant to subsection 391(1), there shall be implied, in every contract of service between the owner of a ship and the master or any seaman, an obligation on the owner of the ship that the owner, the master and every agent charged with the loading, preparing or sending of the ship to sea shall use all reasonable means to ensure the seaworthiness of the ship from the beginning to the end of the voyage.
[48] Section 392 allows any crew member entering any port in Canada to complain to the chief officer of customs about the safety of the ship for various reasons including undermanning, overloading or improper loading.
[49] Obviously, section 392 and the other provisions under this heading of Part V serve a purpose different from, although complementary to, the general inspection regime under section 310 of the Act. They coexist with the general regime and in no way displace it. I reproduce sections 391 and 392, which I have just paraphrased, so that the reader can get a better sense of the purpose of this heading and of these two provisions:
Ships Alleged to be Unseaworthy
391. (1) In every contract of service, express or implied, between the owner of a ship and the master or any seaman thereof, and in every instrument of apprenticeship whereby any person is bound to serve as an apprentice on board any ship, there shall be implied, notwithstanding any agreement to the contrary, an obligation on the owner of the ship, that the owner, the master and every agent charged with the loading of the ship, the preparing of the ship for sea or the sending of the ship to sea shall use all reasonable means to ensure the seaworthiness of the ship for the voyage at the time when the voyage commences and to keep the ship in a seaworthy condition during the voyage.
(2) Nothing in this section subjects the owner of a ship to any liability by reason of the ship being sent to sea in an unseaworthy state where, owing to special circumstances, the sending of the ship to sea in that state was reasonable and justifiable.
(3) Whenever in any proceeding against any seaman or apprentice belonging to any Canadian ship for the offence of desertion or absence without leave, or for otherwise being absent from his ship without leave, it is alleged by one-fourth, or if their number exceeds twenty by not less than five, of the seamen belonging to the ship that the ship is by reason of unseaworthiness, overloading, improper loading, defective equipment or for any other reason not in a fit condition to proceed to sea, or that the accommodation in the ship is insufficient, the court having cognizance of the case shall take such means as may be in its power to satisfy itself concerning the truth of the allegation, and shall for that purpose receive the evidence of the persons making the allegation, and may summon any other witnesses whose evidence it may think it desirable to hear, and shall, if satisfied that the allegation is groundless, adjudicate in the case, but if not so satisfied shall before adjudication cause the ship to be surveyed.
(4) A seaman or apprentice charged with desertion, or with quitting his ship without leave, does not have any right to apply for a survey under this section unless he has before quitting his ship complained to the master of the circumstances alleged in justification.
(5) For the purposes of subsection (3), the court shall require any surveyor of ships, or any person appointed for the purpose by the Minister, or, if such a surveyor or person cannot be obtained without unreasonable expense or delay, or is not, in the opinion of the court, competent to deal with the special circumstances of the case, any other impartial surveyor appointed by the court, and having no interest in the ship, its freight or cargo, to survey the ship and to answer any question concerning it that the court may think fit to put.
(6) The surveyor or other person referred to in subsection (5) shall survey the ship and make his written report to the court, including an answer to every question put to him by the court, and the court shall cause the report to be communicated to the parties, and, unless the opinions expressed in the report are proved to the satisfaction of the court to be erroneous, shall determine the questions before it in accordance with those opinions.
(7) Any person making a survey under this section has, for the purposes thereof, all the powers of a steamship inspector.(8) The costs, if any, of the survey shall be determined by the court.
(9) Where it is proved that the ship is in a fit condition to proceed to sea, or that the accommodation is sufficient, as the case may be, the costs of the survey shall be paid by the person on whose demand or in consequence of whose allegation the survey was made, and may be deducted by the master or owner out of the wages due or to become due to that person.
(10) Where it is proved that the ship is not in a fit condition to proceed to sea, or that the accommodation is insufficient, as the case may be, the master or owner of the ship shall pay the costs of the survey, and is liable to pay to the seaman or apprentice, who has been detained in consequence of the proceeding before the court under this section, such compensation for his detention as the court may award.
392. (1) Where, on complaint made to him pursuant to this section and sections 393 to 396 or without any complaint, the chief officer of customs at any port in Canada believes on reasonable grounds that any ship at a port or place in Canada is an unsafe ship by reason of the defective condition of its hull, equipment or machinery, or by reason of undermanning, overloading or improper loading, and is unfit to proceed to sea or to make any voyage or trip, without serious danger to life, that officer shall detain the ship until he is satisfied that it is a safe ship.
(2) Where any ship is detained under this section, the officer of customs who detained it may, before releasing the ship, demand that the owner or master have the ship inspected by a steamship inspector for any defects believed to exist, or by a port warden or other competent person named by the Minister in a case where overloading or improper loading is believed to exist.
(3) The owner or master may require that a person whom he may choose shall accompany the person making the inspection under this section.
(4) The steamship inspector, port warden or other person named by the Minister, who makes the inspection under this section, shall report fully to the officer of customs who has detained a ship under this section, and the officer shall report fully to the Minister, setting out all the particulars with respect to the detention, and his report shall be accompanied by a copy of the report of the steamship inspector, port warden or other person who has made the inspection.
Allégations d'innavigabilité des navires
391. (1) Tout contrat de service, explicite ou implicite, passé entre le propriétaire d'un navire et le capitaine ou tout marin du navire, ainsi que tout acte en vertu duquel une personne est tenue de faire son apprentissage à bord d'un navire, supposent, nonobstant toute convention contraire, l'obligation, pour le propriétaire du navire, de faire en sorte que lui-même, le capitaine et tout agent préposé au chargement ou à l'appareillage du navire ou à son envoi à la mer, prennent tous les moyens voulus pour garantir la navigabilité du navire pour le voyage, au moment où celui-ci commence, et de le maintenir dans cet état au cours du voyage.
(2) Le présent article n'a pas pour effet de soumettre le propriétaire d'un navire à quelque responsabilité du fait de l'envoi du navire à la mer en état d'innavigabilité lorsque, par suite de circonstances particulières, pareil envoi était raisonnable et justifiable.
(3) Lorsque, dans toutes procédures intentées contre un marin ou un apprenti appartenant à un navire canadien, pour désertion, absence sans permission ou quelque autre absence du navire sans autorisation, il est allégué par le quart des marins qui appartiennent au navire, ou, si le nombre des marins dépasse vingt, par cinq au moins, que le navire, par suite d'innavigabilité, de surchargement, de vice de chargement, d'équipement défectueux ou pour une autre raison, n'est pas en état de prendre la mer, ou que l'aménagement du navire est insuffisant, le tribunal saisi de l'affaire doit prendre les mesures en son pouvoir pour constater l'exactitude de l'allégation et recevoir, à cet effet, la déposition des personnes qui ont formulé l'allégation, et peut citer tous autres témoins qu'il juge opportun d'entendre; s'il est convaincu que l'allégation est sans fondement, il doit se prononcer immédiatement sur l'affaire, sinon il doit faire visiter le navire avant de se prononcer.
(4) Un marin ou un apprenti accusé d'avoir déserté ou d'avoir quitté son navire sans autorisation n'a pas le droit de demander une visite, en vertu du présent article, sauf si, avant de quitter son navire, il s'est plaint au capitaine des circonstances alléguées pour se justifier.
(5) Pour l'application du paragraphe (3), le tribunal doit requérir un visiteur de navires ou une personne nommée à cette fin par le ministre, ou s'il ne peut se procurer les services d'un tel visiteur ou d'une telle personne sans frais ni retard déraisonnables, ou s'il est d'avis que le visiteur ou la personne n'est pas compétent pour connaître des circonstances particulières de l'affaire, il doit nommer un autre visiteur de navires impartial qui n'a aucun intérêt dans le navire, dans son fret ou dans sa cargaison, pour visiter le navire et répondre à toute question qu'il juge à propos de lui poser au sujet du navire.
(6) L'expert maritime de navires ou l'autre personne doit visiter le navire et présenter un rapport écrit au tribunal, en y ajoutant une réponse à chaque question que ce dernier lui a posée; le tribunal doit faire communiquer le rapport aux parties en cause, et, à moins qu'il ne soit démontré à sa satisfaction que les opinions exprimées dans le rapport sont erronées, il doit se fonder sur ces opinions pour décider des questions dont il a été saisi.
(7) Quiconque opère une visite en vertu du présent article a, à cet égard, tous les pouvoirs d'un inspecteur de navires à vapeur.(8) Les frais de visite, s'il y en a, sont fixés par le tribunal.
(9) Lorsqu'il est établi que le navire est en état de prendre la mer ou que l'aménagement est suffisant, selon le cas, les frais de visite doivent être acquittés par la personne qui a demandé la visite ou dont l'allégation y a donné lieu, et ces frais peuvent être retenus, par le capitaine ou le propriétaire, sur les gages dus ou futurs à cette personne.
(10) Lorsqu'il est établi que le navire n'est pas en état de prendre la mer ou que l'aménagement est insuffisant, selon le cas, le capitaine ou le propriétaire du navire doit acquitter les frais de visite et est tenu de verser au marin ou à l'apprenti, qui a été détenu par suite des procédures intentées devant le tribunal en vertu du présent article, l'indemnité pour sa détention que le tribunal peut accorder.
392. (1) Lorsque, d'après une plainte déposée devant lui conformément au présent article et aux articles 393 à 396 ou en l'absence de plainte, le préposé en chef des douanes de tout port au Canada a des motifs raisonnables de croire qu'un navire se trouvant dans un port ou lieu du Canada est dangereux, c'est-à-dire que l'état défectueux de sa coque, de son équipement ou de ses machines, ou l'insuffisance de son équipage, le surchargement ou un vice de chargement, le rendent inapte à prendre la mer ou à effectuer un voyage ou un trajet sans mettre gravement en danger la vie humaine, il doit détenir le navire jusqu'à ce qu'il soit convaincu que celui-ci n'offre aucun danger.
(2) Lorsqu'un navire est détenu sous l'autorité du présent article, le préposé des douanes qui l'a détenu peut, avant de le relâcher, obliger le propriétaire ou le capitaine à le faire inspecter par un inspecteur de navires à vapeur relativement à toutes défectuosités soupçonnées, ou par un gardien de port ou une autre personne compétente désignée par le ministre s'il s'agit de surchargement ou de vice de chargement.
(3) Le propriétaire ou le capitaine peut demander qu'une personne qu'il désigne accompagne celle qui est chargée de l'inspection prévue au présent article.
(4) L'inspecteur de navires à vapeur, le gardien de port ou l'autre personne désignée par le ministre, qui fait l'inspection prévue au présent article, doit présenter un rapport complet au préposé des douanes qui a détenu un navire sous l'autorité du présent article, et ce dernier doit présenter au ministre un rapport donnant tous les détails relatifs à la détention, et y joindre une copie du rapport de l'inspecteur de navires à vapeur, du gardien de port ou de l'autre personne qui a fait l'inspection.
(emphasis added)
[50] I should add that there is nothing unusual for the steamship inspectors and the chief officer of customs to coordinate their efforts and to exchange information and cooperate in the exercise of their respective powers of inspection and detention. Indeed, section 410 of the Act goes further. Where an officer of customs at a port receives, from a steamship inspector, a notice in writing that a ship has been found unseaworthy, the chief officer of customs at that port shall detain that ship until he receives notice in writing from the inspector concerned that the ship may be released:
410. Whenever a steamship inspector gives notice in writing to an officer of customs at a port that any of the provisions of this Part, or any order in council made thereunder, have not been fully complied with in respect of any ship, or that any ship in respect of its hull, machinery or equipment has, in the opinion of the inspector, become unseaworthy, the chief officer of customs at that port shall detain that ship until he receives notice in writing from the inspector concerned that he may release the ship.
410. Lorsqu'un inspecteur de navires à vapeur donne par écrit, au préposé des douanes à un port, avis que quelque disposition de la présente partie, ou qu'un décret pris en application de la présente partie, n'a pas été intégralement observé à l'égard d'un navire, ou qu'il est d'avis qu'un navire n'est plus en état de navigabilité à cause de sa coque, de ses machines ou de son équipement, le préposé en chef des douanes de ce port doit détenir le navire jusqu'à ce qu'il reçoive, de l'inspecteur en cause, avis par écrit qu'il peut relâcher le navire.
[51] Such written notice was given in the present instance on April 7, 1997 by Inspector Hall in a fax sent by Transport Canada, Ship Safety, to the Collector of Customs and Excise at Vancouver: see appeal book, vol. 7, at page 1423. Section 410 of the Act is a good example of the complementarity intended by Parliament between Transport Canada and Customs Canada with respect to the safety of ships.
[52] Counsel for the respondents submitted that only customs officers could find foreign ships to be unsafe and order their detention. They alone under the Act, to the exclusion of the Steamship Inspection Service, the Chairman of the Board of Steamship Inspection and the Board itself, would have such powers over foreign ships. It would mean that only Canadian ships would be subject to safety inspections under the Act conducted by duly qualified, trained and experienced safety inspectors. I can find nothing in the Act that can support such differential and prejudicial treatment of safety issues.
The standard of review applicable to the administrative decisions under attack
[53] For the reasons explained above, the trial judge erred by misconstruing the legal basis of the inspection that is the factual foundation for the respondents' claim for damages against the appellants. It is necessary therefore to analyse the claim anew, on the basis that the inspection was an exercise of the inspectors' discretionary authority under subsection 310(1) of the Act, and not the MOU and SOLAS.
[54] A decision made by steamship inspectors under subsection 310(1) of the Act as to safety and seaworthiness of ships is, at law, a discretionary decision. If a ship inspector, in the exercise of that discretion, finds a ship to be unsafe, then the detention that ensues is mandatory.
[55] The Act contains a regime for challenging the decisions of steamship inspectors. The first level of review is a reference to the Chairman under subsection 307(1) of the Act, which reads as follows:
307. (1) Any matter in dispute arising under this Act between the owner of a ship or any other interested party and a steamship inspector may be referred by either of them to the Chairman, who shall decide on the matter himself, or, if he considers that the circumstances warrant it, shall refer it to the Board for a decision.
307. (1) Toute contestation découlant de la présente loi et s'élevant entre le propriétaire d'un naivre ou un autre intéressé et un inspecteur de navires à vapeur peut, par l'une ou l'autre partie, être renvoyée au président qui décide lui-même la question ou qui la soumet à la décision du Bureau s'il estime que les circonstances le justifient.
(emphasis added)
[56] That procedure was followed in this case. It led to a substantial change in the decision of the inspectors.
[57] If the respondents were dissatisfied with the decision of the Chairman, they could have challenged it directly by appealing to the Minister under section 307(3) of the Act, which reads as follows:
307. (3) Where the owner of a ship or any other interested party is disssatisfied with any decision given by the Chairman or by the Board under subsection (1), or where any matter in dispute arises under this Part between the owner or a ship or any other interested party and the Chairman or the Board, the owner or party may refer the matter to the Minister, who shall finally decide the matter.
307. (3) Lorsque le propriétaire d'un navire ou un autre intéressé n'est pas satisfait de la décision du président ou du Bureau, rendue en vertu du paragraphe (1), ou lorsqu'une contestation découlant de la présente partie s'élève entre un propriétaire de navire ou un autre intéressé et le président ou le Bureau, ce propriétaire ou cet intéressé peut renvoyer la question au ministre qui décide en dernier ressort.
(emphasis added)
[58] While there is no statutory right of appeal from the Minister's final decision, it is subject to judicial review to the Federal Court under section 18.1 of the Federal Courts Act, R.S.C. 1985, c. F-7.
[59] There is an issue as to whether a shipowner seeking damages as a result of an allegedly flawed ship safety inspection ought to exhaust the available statutory remedies before commencing an action for damages. In this particular case, the appellants attempted to raise objections on that ground in pre-trial motions, but those attempts failed before a Prothonotary, whose decision was not appealed: see Berhad v. Canada, 2003 FC 992 at paragraphs 30 to 38. In my view, it is not now open to this Court to question, in this particular case, the propriety of considering the respondents' tort claims in the absence of a challenge to the inspection decisions through the statutory process and judicial review. However, that question remains open for consideration in future cases.
[60] In my view, the most important reason why a shipowner who is aggrieved by the result of a ship safety inspection ought to exhaust the statutory remedies before asserting a tort claim is the public interest in the finality of inspection decisions. The importance of that public interest is reflected in the relatively short time limits for the commencement of challenges to administrative decisions - within 30 days from the date on which the decision is communicated, or such further time as the Court may allow on a motion for an extension of time. That time limit is not whimsical. It exists in the public interest, in order to bring finality to administrative decisions so as to ensure their effective implementation without delay and to provide security to those who comply with the decision or enforce compliance with it, often at considerable expense. In this case, the decision of the Chairman was not challenged until, a year and a half after it was made, the respondents filed their claim for damages.
[61] There is also a public interest in precluding the use of tort claims to engage in collateral attacks on decisions that are, or should be, final. The case of R. v. Consolidated Maybrun Mines Ltd., [1998] 1 S.C.R. 706 is instructive because, not unlike the present instance, it relates to a collateral attack on an order requiring that certain measures be taken to protect the environment while direct review proceedings were available under the Environmental Protection Act. In our case, the detention order requiring that certain repairs be done was not only aimed at protecting the marine environment, but also at ensuring the safety of human lives.
[62] In Maybrun, the Supreme Court undertook a review of the statute and of the legislative intent behind it and concluded that persons charged with failing to comply with an order under that statute "cannot attack the validity of the order by way of defence after failing to avail themselves of the appeal mechanisms available under the [statute]": ibidem, at paragraph 65. In the Court's view, to permit such a collateral attack would encourage conduct contrary to the statute's objectives and would tend to undermine its effectiveness: ibidem, at paragraph 60. Although the circumstances of that case differ slightly from those in the case at bar, the conclusions reached by the Supreme Court are nevertheless relevant to the present issue. If an accused, who has a right to full answer and defence, is not permitted in a penal proceeding to use as a shield a collateral challenge to the administrative order that is the basis for the charge that he faces, it seems to me that, in similar circumstances, a party should be discouraged from employing a collateral attack as a sword in a civil proceeding of the kind that the respondents initiated.
[63] However, having said that, the negative effects of permitting a collateral attack may be mitigated in the circumstances of this case by ensuring that the administrative decision that is the basis of the tort claim is reviewed in the same way, and under the same standard of review, as if it were challenged in judicial review proceedings. In this instance, the proceedings before the trial judge were launched against administrative decisions and challenged their legality and legitimacy. It was therefore incumbent on the trial judge to undertake a pragmatic and functional analysis in order to determine the standard of review applicable to the decisions in question. By failing to do so, the trial judge committed an error of law which warrants our intervention.
[64] Our role now is to determine the standard of review applicable to the administrative decisions in question, and to apply that standard to the review of the administrative decisions as the trial judge should have done at first instance: see Housen, supra, at paragraphs 43 and 44.
[65] The Supreme Court has clearly indicated that review of all administrative decision-making by a court, whether by way of judicial review or by appeal, requires the determination of the appropriate standard of review by means of a pragmatic and functional analysis. It is the fact that the decision under review originates with an administrative body that is determinative of the approach required, not the procedure by which the decision is attacked and reviewed by the courts. Any doubt on this issue was dispelled by the Supreme Court in its reasons in Dr. Q v. College of Physicians and Surgeons of British Columbia, [2003] 1 S.C.R. 226, where McLachlin C.J., writing for the Court, indicated at paragraphs 21 and 25:
The term "judicial review" embraces review of administrative decisions by way of both application for judicial review and statutory rights of appeal. In every case where a statute delegates power to an administrative decision-maker, the reviewing judge must begin by determining the standard of review on the pragmatic and functional approach.
[...]
Review of the conclusions of an administrative decision-maker must begin by applying the pragmatic and functional approach.
(emphasis added)
[66] In my view, the same principle applies when the attack on the decision, as in this instance, takes the form of an action for damages flowing from the decision rather than an application for judicial review of the decision. To suggest otherwise would be to increase the likelihood of attempted collateral attacks as a means of circumventing the deference which often results from a pragmatic and functional analysis. Such a result would run directly counter to Parliament's intent and to the message sent by the Supreme Court in Dr. Q, supra, which was to bring a more nuanced and contextual approach to the issue of curial deference towards administrative decision-making. While the courts must maintain the rule of law, their reviewing power should not be employed unnecessarily: see Dr. Q, supra, at paragraphs 21 and 26. I now turn to the four contextual factors that constitute a pragmatic and functional analysis.
a) statutory mechanism of review
[67] The statutory mechanism for review of inspection decisions is described above. The absence of a right of appeal of such decisions to the courts, and the mention that the decision of the Minister is final are strongly suggestive of deference to the Minister's decision.
b) relative expertise of the steamship inspectors and of the Chairman of the Board
[68] Steamship Inspectors are appointed by the Governor in Council pursuant to section 301 of the Act. These individuals cannot be appointed unless they have passed a satisfactory examination before the Board of Steamship Inspection, and have obtained a certificate to that effect from the Chairman of the Board (section 302). Steamship inspectors are barred from having any pecuniary interest in the construction or sale of steamships or their equipment or machinery and must take an oath of office (sections 302 and 303).
[69] The Board of Steamship Inspection is composed of inspectors and such other persons as the Minister may appoint (subsection 304(1)). The Governor in Council may appoint any of these members as Chairman (subsection 304(2)). The Chairman need not therefore be qualified as an inspector. The Chairman is however, responsible to the Minister for the administration of the law relating to steamship inspection (section 306). The work of the Board involves expertise in the area of steamship construction and maintenance. These are areas with which courts have only limited familiarity whereas the inspectors and the Board, by virtue of their education, training and experience, including their frequent exposure to safety issues and their front-line perspective, have developed considerable expertise.
[70] Furthermore, this experience will allow them to recognize where and when cooperation with other types of specialized expertise is required in order to effectively carry out their duties. Where, as here, the inspectors and the Board are resolving questions directly related to steamship maintenance and safety, they are acting squarely within that expertise and the reviewing court is at a considerable disadvantage. The factor of expertise is therefore suggestive of deference.
c) purpose of the statute
[71] The Act is the principal piece of legislation dealing with vessel use in Canadian waters. The legislation is broad in scope and has been amended considerably over time. Although the following list of legislative objectives was added to section 5 of the Act in 1998, it reflects the objectives of the Act as they existed in 1997:
The objectives of this Act are to
(a) protect the health and well-being of individuals, including the crew of ships, who participate in marine transportation and commerce;
(b) promote safety in the marine transportation system;
(c) protect the marine environment from damage due to navigation and shipping activities;
(d) develop a regulatory scheme that encourages viable, effective and economical marine transportation and commerce;
(e) promote an efficient marine transportation system;
(f) ensure that Canada can meet its international obligations under bilateral and multilateral agreements with respect to navigation and shipping;
(g) encourage the harmonization of marine practices;
(h) provide an appropriate liability and compensation regime in relation to incidents involving ships; and
(i) establish an effective inspection and enforcement program.
[72] Part V of the Act, entitled "Safety", sets out, among other things, the regime of steamship inspection and constitutes the domestic source of authority for Canadian participation in the international regime of Port State Control under the MOU. Through Part V, the Act seeks to ensure the safety of ships, and thereby to ensure the safety of crews, passengers and of the marine environment.
[73] Decisions made under Part V relating to the inspection, detention and release of ships are polycentric in nature. They are informed by various considerations, including those listed under section 5 of the Act. Such decisions therefore cannot be divorced from considerations of an environmental, commercial, and indeed diplomatic nature.
[74] As suggested by objectives (f) and (g), the Act operates in an environment that seeks the harmonization of marine practices and that requires cooperation at both the domestic and international level. Canada's participation in the MOU, and the relationship of that agreement to the Act, exemplify this trend and suggest that an awareness of such reciprocal arrangements must accompany decisions taken under Part V.
[75] In this instance, the involvement of the flag state, the port state, the ship owners and the classification society demonstrates the complexity of the relations involved and confirms that although decisions to detain and to release taken under Part V are, at their core, decisions regarding marine safety, they are ones taken in light of a wide variety of factors and considerations. A polycentric decision-making process warrants deference from a reviewing court.
d) nature of the question
[76] The evaluation that leads the inspector to declare a ship unsafe involves the exercise of discretion and is essentially a question of fact. The same can be said of the decisions made by both the inspectors and the Chairman in relation to the extent of repairs required of a vessel before it can be considered seaworthy as well as the related question of the establishment of conditions on which such a vessel might be released. These are factual determinations which attract considerable deference on review.
[77] On balance therefore, I find that the decision of the inspectors, and in turn that of the Chairman, should be reviewed on at least a standard of reasonableness simpliciter. Indeed, strong arguments could be made that the standard is or should be one of patent unreasonableness. Whether the standard is one or the other, I believe that both have been met. Given this finding, it may be helpful to reiterate what constitutes a reasonable decision. Iacobucci J., writing for the Court in Law Society of New Brunswic