Marwell Equipment Limited and British Columbia Bridge & Dredging Company Ltd. v. Vancouver Tug Boat Company Ltd.

Marwell Equipment Limited and British Columbia Bridge & Dredging Company Ltd. v. Vancouver Tug Boat Company Ltd.
Collection
Supreme Court Judgments
Date
1960-11-21
Report
[1961] SCR 43
Judges
Locke, Charles Holland; Cartwright, John Robert; Martland, Ronald; Judson, Wilfred; Ritchie, Roland Almon
On appeal from
Canada
Subjects
Transportation
Decision Content
Supreme Court of Canada
Marwell Equipment Limited and British Columbia Bridge & Dredging Company Ltd. v. Vancouver Tug Boat Company Ltd., [1961] S.C.R. 43
Date: 1960-11-21
Marwell Equipment Limited and British Columbia Bridge & Dredging Company Limited (Plaintiffs) Appellants;
and
Vancouver Tug Boat Company Limited, Owners of the tug La Dene and the barge V.T. 5 (Defendants) Respondents.
1960: May 2, 3, 4; 1960: November 21.
Present: Locke, Cartwright, Martland, Judson and Ritchie JJ.
ON APPEAL FROM THE EXCHEQUER COURT OF CANADA, BRITISH COLUMBIA ADMIRALTY DISTRICT.
Shipping—Collision—Removal of wreck by owner—Liability of defendants —Limitation of liability—Canada Shipping Act, R.S.C. 1952, c. 29, ss. 657, 659—Navigable Waters Protection Act, R.S.C. 1952, c. 193, ss. 13, 14, 15, 16.
The respondent company and a master in its employ were held to be liable in an action for damages arising from a collision in the Fraser River of a scow owned by the company, when in tow by a tug also owned by the company, with a barge owned by the appellant M. The trial judge found that the collision was caused solely by the negligence of the master of the tug, but found that the company was entitled to limit its liability under ss. 657 and 659 of the Canada Shipping Act, as well for the damage caused by the sinking as for the cost incurred by the appellants in removing the wreck at the direction of the river authorities. The appellants appealed to this Court.
Held (Locke and Cartwright JJ. dissenting): The appeal should be allowed in part. Per Curiam: The findings of the trial judge that the sinking was caused by the improper navigation of the tug and scow and that this occurred without the actual fault or privity of the respondent should not be disturbed. Accordingly the respondent is not deprived of its right to limit its liability under s. 657 of the Canada Shipping Act in relation to the claim for the loss of the dredge.
Per Martland, Judson and Ritchie JJ.: The words "in respect of loss or damage" in s. 657 of the Act are not used to define the wrongful act of the shipowner whose vessel causes damage, but are used to define that kind of damage in relation to which, the wrongful act having occurred, he may limit his liability. Burger v. Indemnity Mutual Marine Assurance Company Limited, [1900] 2 Q.B. 348, applied.
Section 659 only affords protection to a shipowner in respect of a claim for loss or damage caused to property or rights of any kind by reason of improper navigation or management of the ship. This is not to be read as applying to any kind of damage resulting from the infringement of another's rights. The section limits liability for the infringement of rights in respect of a particular kind of loss or damage, i.e., loss or damage caused to property or to rights. The "rights" referred to must be rights which may be subject to loss or damage.
The claim with respect to the expense incurred in removing the wreck is not one for damage to property. Neither is it a claim for loss or damage to the appellant's rights. Nor was there any claim in damages for damage to the property or rights of the Crown, as distinct from those of the appellants, which could make s. 659 applicable.
The Crown's claim, in respect of the obstruction to navigation caused by the sinking of the dredge, was for the enforcement of the statutory duties imposed and of its statutory rights created by the Navigable Waters Protection Act and not a claim for damages for damage to its own property or rights.
Therefore s. 659 does not enable the respondent to limit its liability in respect of the claim for the cost of removing the wreck. The Urka, [1953] 1 Lloyd's Rep. 478; The Millie, [1940] P. 1; The Stonedale No. 1, [1955] 2 All E.R. 689, applied.
Per Locke J., dissenting: The sinking of the dredge occurred through the negligence of the respondent, and there was imposed upon the owners the statutory obligation to remove the wreck. This was a direct result of the negligent act and was damage "in respect of" the damage to the dredge within the meaning of s. 657 of the Act and to the "rights" of the appellants within the meaning of s. 659. The Stondale No. 1, supra; The Millie, supra, distinguished; The Urka, supra, not followed.
Per Cartwright J., dissenting: If damages flow sufficiently directly from a wrongful act to be recoverable in an action in tort based on that act it is not possible to say that they are not damages "in respect of" that wrongful act. If they were not in respect of such act they would not be recoverable.
The expense incurred in removing the wreck forms part of the damages for which the respondent is liable, and the respondent is entitled to limit its liability accordingly. APPEAL from a judgment of Sidney Smith D.J.A.1 Appeal allowed in part, Locke and Cartwright JJ. dissenting.
D. McK. Brown and R. M. Hayman, for the plaintiffs, appellants.
J. I. Bird and F. O. Gerity, for the defendants, respondents.
Locke J. (dissenting):—This is an appeal by the plaintiffs in the action from the judgment of the Deputy Judge in Admiralty at Vancouver2 by which the respondent company and G. M. L. Harwood, the master of the tug La Dene, were held to be liable for damages arising from the collision between the scow V.T. 5, when in tow by the said tug, and the dredge Townsend owned by the appellant, Marwell Equipment Ltd. in the Fraser River on the evening of March 14, 1957. The learned judge found that the collision was caused solely by the negligence of Harwood, the master of the tug, but found that the respondent company was entitled to limit its liability to both of the appellants under the provisions of ss. 657 and 659 of the Canada Shipping Act, as well for the damage caused by the sinking as for the cost incurred by the appellants for removing the dredge and other equipment from the bed of the river at the direction of the river authorities.
The defendant Harwood did not appeal and the finding that he was guilty of negligence in the navigation of the La Dene, which either caused or contributed to the collision, is not disputed. The issues to be determined are as to the respondent company's right to limit its liability under the sections of the Shipping Act referred to.
The Marwell Company was the owner of the dredge which was at the time in question under a charter by demise to the British Columbia Bridge and Dredging Co. Ltd. The dredge was not self-propelled and it was necessary to employ tugs to place her in position. Under a contract with the British Columbia Highway Toll and Bridge authority, the last named company (to be referred to as the Dredging Company) was preparing certain test holes in the bed of the Fraser River in connection with the intended construction of the Deas Island tunnel, which has since been completed, under the south arm of the Fraser River. The dredge had been moved to the Ladner Ferry slip on March 9th and on March 12th was moved into a position located approximately 1,200 feet from the Deas Island shore on the south and something more than 600 feet from the Lulu Island shore on the north. Between the position of the dredge, as thus located, and the shore of the Deas Island there was a pipeline carried on pontoons designed to carry the sand and other material removed from the bed of the river by the dredge to be deposited on the island to the south. The south arm of the Fraser is navigable by deep sea vessels and there is a great deal of traffic both ways in that portion of the river between the sea and the Port of New Westminster and places to the east which passed the site of these operations. The requisite permission had been granted to the appellants for the carrying on of the work and the stationing of the dredge and the pipeline in the river and no question arises as to this.
The respondent company carries on extensive operations upon the west coast and in the Fraser River, operating a fleet of tugs employed, inter alia, by logging and lumber companies in towing scows and rafts of logs. Captain Harwood was a qualified master of long experience and had been employed by the respondent company for many years. He was not apparently assigned to any particular vessel, being employed on any of the tugs operated by his employer to which he might be directed. He had been on a holiday for the two weeks preceding the date in question but was recalled on the morning of that day and instructed to assume command of the tug La Dene at Marpole on the north arm of the river and to carry out a tow to Bellingham. He took charge of the tug at about 2.00 p.m. At about 4 o'clock that afternoon Captain Edward Y. Taylor, the senior despatcher of the respondent company, learned that the scows which were to be towed to Bellingham would not be ready and, having communicated with another company, arranged with them to tow the scows V.T. 5 and the I.T. 41 from a place near New Westminster to Duncan Bay. Taylor spoke to Harwood at some time between 4.30 and 5.00 o'clock communicating to him the changed instructions, and thereafter the latter proceeded with the La Dene to the place where these latter scows were loaded, at or near the easterly extremity of Lulu Island, arriving there at about 6 o'clock. In taking the tugs in tow deep sea gear was used, the V.T. 5 being about 300 feet behind the tug and the I.T. 41 to the rear of it. The master estimated the total length of the tug and the tow as being close to 800 feet. The La Dene started on its voyage at 8.15 p.m. According to Harwood, the visibility was first rate and objects could have been seen at 8 or 9 miles. It is common ground that at some time during the afternoon of March 13 the respondent company received a written notice from the District Marine agent of the Department of Transport at Victoria dated March 11, 1957, entitled "Notice to Shipping" which stated that the hydraulic dredge Townsend would be operating in the main channel of the Fraser for approximately two weeks, anchored on the centre line of the Deas Island tunnel project approximately 1,000 feet from the Canada Rice Mills and approximately 600 feet north of the Deas Island dyke, and that a floating pipeline would extend from the dredge to Deas Island. Mariners were warned to pass to the north of the dredge and to exercise the necessary caution while these operations were in progress. On the evening of March 14 when Harwood left with his tow he was unaware of these facts, Taylor, whose duty it was to inform him having failed to do so.
There was a strong ebb tide at the time and with the river current together ran at the rate of approximately 3 to 4 knots. The speed of the tug with the tow was approximately 4 knots through the water, giving her speed over the ground of some 7 ½ knots. The dredge Townsend 115 feet in length and 36 feet in breadth was anchored headed upstream and carried two red lights suspended at a height between the two forward masts of the scow, two 1,500 watt floodlights at the front of the dredge, two deck lights and two 1,500 watt floodlights at the stern. On the pontoons carrying the pipeline there were 25 watt bulbs every 50 feet, these being some 22 in number, between the dredge and the shore. These lights were carried some 7 to 8 feet above the water.
The position of the dredge was in the Gravesend Reach of the river and the La Dene, moving downstream toward the sea, entered the reach at a place about 2 miles from the location of the dredge. While, according to Captain Harwood, he saw these lights, other than the red lights above mentioned, he thought they were the lights of the Ladner Ferry landing which was situate roughly 800 feet in a southerly direction from the dredge and which, it was shown, were of a substantially different nature, and he did not realize that the dredge and pipeline were in the position stated until he was about 400 feet distant from them. It was then clearly too late to avoid a collision between one of the scows and the dredge.
Captain Leonard Griffiths was the owner of the tug Jarl which was acting as tender for the Townsend. He saw the La Dene and the tow approaching when the latter was about 1½ mile distant and realized that the course it was following would take it to the south of the dredge, that is, between that vessel and the Deas Island shore. Griffiths, whose evidence was accepted by the learned trial judge, first called the La Dene on the radio but got no response and started upstream to warn that vessel, making several attempts on the way to communicate with it on the radio without getting any answer. In addition, Griffiths directed that the front side deck lights of his tug be flashed repeatedly in an endeavour to attract attention, and tried to do so by using the search light but this was of no avail. He passed the La Dene as he went upstream to a distance of some 50 to 75 feet and thereafter attempted to assist the extrication of that vessel from its position by pushing the second of the scows to the north. These efforts proved unavailing and the first of the scows hit the dredge on the starboard side causing her to sink. Captain Harwood said that he did not see the Jarl or the signals made by her described by Griffiths and the radio on the La Dene was not turned on.
Upon these facts the learned trial judge held that Harwood should have recognized that there was an obstruction in the channel on first entering the Gravesend Reach and found that he was negligent in failing to keep a proper lookout and in failing to appreciate the significance of the lights that were exhibited when he saw them, and that his failure was the sole cause of the collision.
Captain Harwood had said in his evidence that had he known of the presence of the dredge and the pipeline in the river he would not have attempted to take the La Dene and its tow down the river at all, and there was evidence by other masters to the same effect. There was, however, more than 625 feet of navigable channel through which the tug and tow could have been safely directed to the north of the position of the dredge, and the finding at the trial that the sole cause of the accident was the negligence of the master shows that the learned trial judge considered that this was the case and that had the master steered a course closer to the north shore the collision would have been averted.
The finding that the negligence of Harwood at-least contributed to the occurrence is not questioned by the parties to this appeal: the appellant, however, contends that the respondent has not satisfied the onus resting upon it of proving that the loss of the dredge and the consequent damage occurred without its actual fault or privity and that, accordingly, the limitation of liability permitted by s. 657 of the Canada Shipping Act is not available to it. Upon this aspect of the matter the learned trial judge held that if there was fault on the part of the respondent in failing to have communicated to Captain Harwood the fact of the presence of the barge and pipeline in the river, of which it had received notice on March 13, the negligence was that of a paid employee only and was without its "actual fault or privity" within the meaning of that expression in s. 657.
Section 657 of the Canada Shipping Act, R.S.C. 1952, c. 29, so far as it is relevant, reads:
The owners of a ship, whether registered in Canada or not, are not in eases where all or any of the following events occur without their actual fault or privity, that is to say,
* * *
(d) where any loss or damages is by reason of the improper navigation of the ship caused to any other vessel …
liable to damages … in respect of loss or damage to vessels … to an aggregate amount exceeding thirty-eight dollars and ninety-two cents for each ton of the ship's tonnage.
The history of the statutory provisions permitting the owners of vessels to limit their liability in this manner is to be found in Mayers’ Admiralty Law, commencing at p. 161. In England the matter was dealt with in a statute passed in 1773 and later appeared as s. 503 of the Merchant Shipping Act 1854 and as s. 502 of the Act of 1894. In an Act Respecting the Navigation of Canadian Waters, passed as c. 58 of the Statutes of Canada of 1858, s. 12 provided for the limitation, and this was repeated in a slightly varied form in c. 29 of the Statutes of 1880, R.S.C. 1886, c. 79 and R.S.C. 1906, c. 113. Each of these Canadian statutes contained the expression "actual fault or privity" adopted from the earlier English statutes.
I do not find any assistance in determining the meaning to be assigned to the expression where the ship owner is a limited company prior to the decision of the Court of Appeal and of the House of Lords in Lennard Carrying Co. Ltd. v. Asiatic Petroleum Co. Ltd.3 When that case came before the Court of Appeal4 Buckley L.J. said in part (p. 432):
The words "actual fault or privity" in my judgment infer something personal to the owner, something blameworthy in him, as distinguished from constructive fault or privity such as the fault or privity of his servants or agents.
and Hamilton L.J. said in part (pp. 436-7):
Actual fault negatives that liability which arises solely under the rule of "respondeat superior." …
In the case of a company, the "owners" within the meaning of the section must be the person or persons with whom the chief management of the company's business resides.
The facts in that case were that the appellant company was managed by another limited company and J. M. Lennard who was a director of both companies was registered in the ship's register and designated as the person to whom the management of the vessel was entrusted. It had been found that Lennard knew or had the means of knowing of the defective condition of the ship's boilers which rendered her unseaworthy, but gave no instructions to the captain or the engineer regarding their supervision and took no steps to prevent the ship putting to sea with her boilers in that condition. It had been held at the trial that the owners had failed to discharge the onus which lay upon them of proving that the loss happened without their actual fault or privity. After referring to the language of s. 502 of the Merchant Shipping Act 1894, Viscount Haldane L.C. said in part (p. 713):
Now, my Lords, did what happened take place without the actual fault or privity of the owners of the ship who were the appellants? My Lords, a corporation is an abstraction. It has no mind of its own any more than it has a body of its own; its active and directing will must consequently be sought in the person of somebody who for some purpose may be called an agent, but who is really the directing mind and will of the corporation, the very ego and centre of the personality of the corporation.… It has not been contended at the Bar, and it could not have been successfully contended, that s. 502 is so worded as to exempt a corporation altogether which happens to be the owner of a ship, merely because it happens to be a corporation. It must be upon the true construction of that section in such a case as the present one that the fault or privity is the fault or privity of somebody who is not merely a servant or agent for whom the company is liable upon the footing respondeat superior, but somebody for whom the company is liable because his action is the very action of the company itself.
The language employed by Buckley L.J., by Hamilton L.J. and by the Lord Chancellor which has been above quoted was approved and adopted in the judgment of the Judicial Committee in Robin Hood Mills Ltd. v. Paterson Steamships Ltd.5
At the relevant time J. C. F. Stewart, who had been in the employ of the respondent in various capacities for many years including that of general manager, was the vice-president of the company and in charge of its general administration. Rod Lindsay, the general manager of the company, was absent on a holiday in March of 1957 and Stewart was discharging his duties as well as his own. He was a director and, in answer to a question put to him in cross-examination, agreed that he was discharging the functions of a managing director at the time. Stewart said that he saw the notice to shipping referred to on the afternoon of March 13. It was proven that a second copy was given to Taylor, the senior despatcher, and Stewart said that it was the latter's duty to broadcast such notices so that the information would be in the possession of the respondent's vessels, all of which were fitted with telephonic equipment. The practice in the respondent's office was to have four such broadcasts daily, one of which would be made at 4 o'clock in the afternoon. According to Stewart, at about 3.30 in the afternoon of the 14th he went to the despatcher's office and asked Taylor if he had seen the notice. For some reason, objection was made to his giving evidence as to what then took place between him and the senior despatcher, which was clearly admissible on this issue, but he was permitted to say that as a result of what Taylor said to him he was satisfied that the notice was going to be put out over the air. He did not learn that this had not been done until after the accident later that day. Taylor, who was a qualified master who had been employed by the company as a despatcher for some nine years, said that he had seen the notice to shipping on the morning of March 14. He confirmed the evidence of Stewart that the latter had come to his office just before the 4 o'clock broadcast and had mentioned this particular notice and that he, Taylor, had told him that he had forgot to broadcast it on the earlier broadcast but would do so at 4 o'clock. It was apparently after the 4 o'clock broadcast that he spoke to Harwood on the telephone, the latter being then at Marpole, and he admittedly did not then communicate to him the contents of the notice. Taylor said that he did not think he had talked to the La Dene at the time of the 4 o'clock broadcast. It is not questioned that the information contained in the notice should have been communicated to the masters of the company's vessels operating on the Fraser River and, as Taylor did not know whether Harwood had heard the 4 o'clock broadcast clearly, he should have informed him.
While it was the duty of the despatchers to communicate the contents of such notices to those in charge of the respondent's ships Stewart was unable to explain why he had spoken to Taylor on the afternoon in question regarding this particular notice. The learned trial judge, however, accepted his evidence and that of Taylor that this had occurred. He found as a fact that Taylor and the other despatchers were reliable, competent and certificated men and had performed their duties for several years; that Stewart had spoken to Taylor at about 3.30 p.m. taking the copy of the notice with him, and asked Taylor if he had seen it and had then been told that he had not informed the tugs but would do so on the next broadcast which was to take place in about half an hour and that:
With the assurance received from Capt. Taylor that he would inform all the tugs, Mr. Stewart left the Despatch Office and had no knowledge that the information had not in fact been conveyed until after the accident.
After referring to the decision in the Asiatic Petroleum Company and Paterson Steamships cases above mentioned, the judgment reads in part:
I think it is conceded here that the alter ego of this Company consisted of Mr. Arthur Lindsay, the President, or Mr. James Stewart, the Vice President and General Manager. Mr. Lindsay may be dismissed from consideration … It seems to me that just as Mr. Stevenson was the pertinent "heart" in the City of Alberni case (1947 Ex. Ct. Rep. 83), so I think is Mr. Stewart in the same position here …
The fault lay with Capt. Taylor, the senior Despatcher of the Company, and a man of very considerable experience both ashore and afloat. But he has no interest in the Company. He is not a shareholder; he is an employee, albeit an important one.
In view of the principles I have referred to above, it seems impossible for me to say that the Company must be held in "fault and privity" to his neglect and thereby barred from the indulgence provided by the relevant sections of the Canada Shipping Act.
The evidence appears to me to support the finding that the "directing mind and will" of the respondent company was at the time in question that of Stewart. I have read with care his evidence and the exhaustive cross-examination to which he was subjected. It appears to me to be strange that Stewart should on the afternoon in question have particularly mentioned the notice to shipping in question to the senior despatcher when it was that official's duty to communicate the information to the masters of the various tugs which might be operating on the Fraser River. However this may be, the learned and greatly experienced trial judge who heard Stewart and Taylor give their evidence believed them and I can find nothing in the record to justify us in interfering with his finding as to their credibility. This being so, whether or not the failure to advise Captain Harwood of the fact that the dredge was operating on the river was a contributory cause to the collision, the respondent is not, in my opinion, deprived of its right to limit its liability under s. 657 of the Canada Shipping Act.
It is said for the appellants that the respondent's system was defective in that proper logs were not maintained upon the tugs and that, as the evidence shows, Captain Harwood paid scant attention to radio broadcasts which he appeared to regard as something in the nature of a nuisance. The tug was well equipped with means of maintaining close telephonic communication with the headquarters of the company in Vancouver and was equipped with radar which, if used as the tug entered the Gravesend Reach, would have disclosed the presence of the obstruction in the river, and it seems apparent from the evidence that, at least so far as Captain Harwood is concerned, the regulations of the company in this regard had not been enforced. However, none of these matters contributed to the event in my opinion in view of the findings of fact that have been made.
I have read the judgment of the House of Lords in "The Norman" which is now available6, where neglect was found on the part of the owners of the trawler in that Hellyer, put forward by the owners as the alter ego whose actual fault or privity would for the purpose of the action be deemed to be theirs, had been negligent in failing to communicate by wireless to the trawler information as to a rock, the presence of which was not indicated upon the available charts and the existence of which had been discovered after the vessel had sailed. The decision does not, however, assist the appellant in the present case where it was Taylor's duty, and Stewart did give express instructions, that the masters should be informed of the presence of the obstruction. It is unnecessary to discuss further the facts of "The Norman" case which bear no similarity to those in the present matter, other than the fact that the rock, as the dredge, was a danger to navigation.
A further question to be determined is as to the right of the respondent to limit its liability under the provisions of the Canada Shipping Act for the costs incurred by the appellant in removing the wreck of the dredge from the river following the demand made upon it by the New Westminster Harbour Commissioners.
Section 13 of the Navigable Waters Protection Act, R.S.C. 1952, c. 193, provides, inter alia, that where the navigation of any navigable water over which the Parliament of Canada has jurisdiction is obstructed by the sinking or grounding of any vessel, the owner of such vessel shall forthwith begin the removal thereof and prosecute such work diligently to completion. Under the terms of s. 16 as amended, if an owner has failed to remove such a wreck and the Minister has caused the same to be removed and where the cost thereof has been defrayed out of public money of Canada, the amount of such cost constitutes a debt recoverable by Her Majesty in right of Canada from the owner.
Following the sinking of the "Townsend" the New Westminster Harbour Commissioners, having jurisdiction in the matter, by a notice dated March 21, 1959, addressed to both appellants, ordered them forthwith to remove the dredge Townsend which, it was said, was causing an obstruction to navigation in the Fraser River near Deas Island, on pain that if they did not remove the same, they would be held responsible for the resulting expense.
The appellants removed the wreck from the river and incurred expense in respect of which they claim to recover the amount of $108,039.06. The respondent claimed to be entitled to limit its liability and has been held entitled to do so by the judgment at the trial.
Section 659 of the Canada Shipping Act reads:
The limitation of the liability of the owners of any ship set by s. 657 in respect of loss of or damage to vessels, goods, merchandise or other things shall extend and apply to all cases where without their actual fault or privity any loss or damage is caused to property or rights of any kind whether on land or on water, or whether fixed or moveable, by reason of the improper navigation or management of the ship.
This section is in the same language as that of an amendment made to the Merchant Shipping Act, 1894 (Imp.), in the year 1900.
The appellants' contention is expressed in their factum in these terms:
The appellants submitted in the Court below, and submit in this Court that the claim for removal of the wreck constitutes a claim for damages arising out of a tort committed by respondent. Appellants' obligation arose out of the Navigable Waters Protection Act, c. 140, ss. 14 and 16. Appellants submit that the claim is not one for damage to rights in any case because appellants have no right to have their vessel positioned in the bottom of the river. On the contrary they have an obligation both at common law and by statute not to position their dredger in the bottom of the river.
In dealing with the question the learned trial judge distinguished the claim from that asserted in The Stonedale7 upon the ground that in that case the claim was there advanced by the Manchester Ship Canal Company, a harbour authority entitled under the Manchester Ship Canal Act, 1936, to recover the cost of removing a wreck from the harbour. Such claim was not for damages for negligence, but was to recover upon the statutory obligation imposed by the Act. In the judgment delivered by Viscount Simonds in The Stonedale this is most clearly pointed out and he referred with approval to the judgment of Langton J. in The Millie8, where the claim was of the same nature and where it had been held that the limitation permitted under the Merchant Shipping Act, 1894 (Imp.), as amended, was inapplicable.
On the argument before us we were referred to the decision in The Urka9, to which the attention of the learned trial judge had not apparently been directed. That case was decided by Lord Sorn in the Court of Session. In a collision in Stornoway Harbour between The Urka and a coal hulk known as The Portugal, the hulk was sunk, due to faulty navigation on the part of the vessel, which was admitted. The owner's claim for the value of the hulk and the right to limit the liability in respect of that claim was admitted. A further claim was for the cost of removing the wreck of The Portugal on the demand of the Stornoway Harbour Commissioners, and it was held that in respect to this claim s. 503 of the Merchant Shipping Act, 1894 (Imp.), did not apply. Lord Sorn was of the opinion that the claim was not in respect of "loss of damage to property or rights", saying that when the owners of The Portugal incurred this expenditure they were neither rescuing their property nor vindicating their rights. The learned judge said that this was the identical question decided in The Millie.
I am unable with respect to agree with this judgment or with the reasoning upon which it proceeds. After saying that the identical question had been decided by Langton J. in The Millie it is said that while in that case there was a direct liability of the owner and the liability in the case of The Portugal was indirect the learned judge was of the opinion that this made no difference. This would appear to overlook the fact that as pointed out by the learned trial judge in. the present matter and by Viscount Simonds in The Stonedale the only claim to which the sections of the Merchants Shipping Act permitting limitation of liability apply are those for damages for negligence and the claim of the Ship Canal Company was not such a claim. In my opinion the claim for the cost of removing the wreck falls within the terms of ss. 657 and 659. By reason of the sinking of The Townsend through the negligence of the respondent the dredge was lost and there was imposed upon the owners the statutory obligation to remove the wreck. This was a direct result of the negligent act and was in my opinion damage "in respect of" the damage to the dredge within the meaning of s. 657 and to the "rights" of the appellants within the meaning of s. 659. I can see no basis for a contention that to impose a legal liability upon a third person by a negligent act is not an infringement of his rights.
I would dismiss this appeal with costs.
Cartwright J. (dissenting):—For the reasons given by my brother Locke I agree with his conclusion that we cannot disturb the findings of the learned trial judge that the sinking of the dredge Townsend was caused by the improper navigation of the tug La Dene and its tow the scow V.T. 5 and that this occurred without the actual fault or privity of the respondent, the owner of the tug and scow.
The claim of the appellant, Marwell Equipment Limited, hereinafter referred to as Marwell, is set out in the statement of claim as follows:
14. The Plaintiff Marwell Equipment Limited has suffered damages in the amount of $682,041.70, particulars of which are:—
(a) Loss of dredge "Townsend" ………..…………………… $ 550,000.00
(b) Pipeline and pontoon damage …….…………………… 7,767.30
(c) Loss of equipment on dredge "Townsend” at time of sinking ………………………………………………................. 28,239.06
(d) Loss of spare parts and materials on "Townsend" at time of sinking ………………………………………………….. 7,048.48
(e) Loss of sandsucker including cost of removal………….. 10,105.83
(f) Loss of rentals from "Townsend" for period March 15th, 1957 to November 1st, 1957 …………………………………. 30,000.00
(g) Premium overtime expended during construction of Dredge "W. G. Mackenzie" to replace "Townsend" for the purpose of meeting Deas Island committment. ………..…… 48,881.03
15. The Plaintiff Marwell Equipment Limited has also suffered the loss of $108,039.06, being the expense incurred in removal of the wreck of the dredge "Townsend" from the channel of the Fraser River, including cost of salvaging scrap, less the amount recovered through sale of this scrap. On the basis of the findings set out in the first paragraph of these reasons the appellant does not appear to question the right of the respondent to limit its liability in respect of any of the items claimed which may be allowed by the registrar in assessing the damages other than the item of $108,039.06 the expense incurred by the appellant in removing the wrecked dredge from the river.
While the learned trial judge left it to the registrar to assess the damages, it is implicit in his reasons and was not questioned before us that the damages which Marwell is entitled to recover from the respondent include the expenses of removing the wreck. In my opinion this is clearly the right view. In The Stonedale No. 110, Singleton L.J. says at page 176:
If those responsible for the management of a ship are guilty of faulty navigation (or negligence) which causes damage to others, the measure of damages is governed by the ordinary rule, i.e., they are recoverable if they are the natural and probable results of the wrongful act.
It appears to me that it is a natural and probable result of sinking a dredge in that part of the Fraser River in which the Townsend sank that her owners will be put to the expense of removing the wreck. Indeed the whole argument before us proceeded on the basis that Marwell can recover this item from the respondent; if it were otherwise the question of the respondent's right to limit its liability in regard to the item would, of course, not arise at all.
In my opinion the learned trial judge was right in rejecting the argument that the case at bar is governed by The Stonedale No. 111 or by The Millie12. The cardinal difference between those cases and the case at bar is that neither of the former was and the latter is an action for damages.
The expense of removing the dredge with which we are concerned is merely one item among those making up the sum total of damages for which, when the reference is completed, the appellant will have judgment against the respondent. The ratio decidendi of The Stonedale No. 1 and The Millie, that the amounts there in question were recoverable not as damages but as a statutory debt, has no application in the circumstances of the case before us.
In The Stonedale No. 1 Viscount Simonds after referring to the anomalies which exist in this branch of the law said at page 693:
But, having said so much about anomalies, I think it right to repeat that I found my opinion that the appellants have no right of limitation on the plain words of the statutes.
It appears to me that the solution of the question before us depends on the true meaning of s. 657(1) of the Canada Shipping Act which reads as follows:
657 (1) The owners of a ship, whether registered in Canada or not, are not, in cases where all or any of the following events occur without their actual fault or privity, that is to say,
(a) where any loss of life or personal injury is caused to any person being carried in such ship;
(b) where any damage or loss is caused to any goods, merchandise, or other things whatsoever, on board the ship;
(c) where any loss of life or personal injury is, by reason of the improper navigation of the ship, caused to any person carried in any other vessel; and
(d) where any loss or damage is, by reason of the improper navigation of the ship, caused to any other vessel, or to any goods, merchandise, or other things whatsoever on board any other vessel;
liable to damages in respect of loss of life or personal injury, either alone or together with loss or damage to vessels, goods, merchandise, or other things, to an aggregate amount exceeding seventy-two dollars and ninety-seven cents for each ton of their ship's tonnage; nor in respect of loss or damage to vessels, goods, merchandise, or other things, whether there be in addition loss of life or personal injury or not, to an aggregate amount exceeding thirty-eight dollars and ninety-two cents for each ton of the ship's tonnage.
In some judgments the draftsmanship of the corresponding provision of the English Act has been subjected to criticism but on a careful analysis the purpose and meaning of the sub-section appear to me to be reasonably plain.
The primary purpose is to provide that in certain specified cases the liability of the owners of a ship to damages for which they would be liable under the principle respondeat superior is to be limited to amounts ascertained by reference to the tonnage of their ship. All the cases are conditioned upon the wrongful