Limitation of liability for a passenger
on a vessel: Gundersen v. Finn Marine Ltd. 2008 BCSC 1665
Between 12:00 midnight and 2:00 a.m.
in the early morning of August 13, 2003, the M.V. Coastal Launch ran into Nose Point on Salt Spring Island at speed, causing severe
physical damage to the vessel as well as serious personal injuries
to the plaintiff Emma Gundersen and the defendant Alex Godfrey.
At the time of the collision the Coastal Launch was owned
by the defendant Finn Marine Ltd. It was being operated by Mr. Godfrey,
the owner of Finn Marine Ltd., as a commercial water taxi on its
way to pick up paying customers, and Ms. Gundersen was onboard as
a non-paying guest.
The issue at trial was whether Finn
Marine Ltd. and the other defendants could limit their liability
pursuant to Part 4 of the Marine Liability Act, S.C. 2001
(the "Athens Convention"). This limitation would be equivalent
to 175,000 "units of account" or about $300,000. Ms. Gundersen
was a friend of Mr. Godfrey and had been on the Coastal Launch with him for most of the working day of the accident. She was asleep
in a bed in the aft port of the vessel at the time of the collision.
The evidence adduced also established
that when the vessel was being operated, it was for a commercial
purpose and that for the purposes of the limitation legislation
the vessel had a gross tonnage of less than 300 tons. The judge
found that the cause of the accident was that Mr. Godfrey fell asleep
at the helm. The judge determined that he was to apply Canadian
maritime law to the accident. The court reviewed the provisions
of the Marine Liability Act and the Athens Convention contained
therein as a schedule.
The court concluded that the monetary
value of Ms. Gundersen's claims was limited by the provisions of
Part 4 of the Marine Liability Act and Article 7 of the Athens
Convention. The court discussed the interplay between the limits
of the Athens Convention (Part 4 of the Act) and the general limitation
provisions applicable in all circumstances (Part 3 of the Act).
The court held that the higher liability limits of Part 3 of the
Act will not apply when what is at issue is liability for carriage
of passengers by water in respect of which Part 4 and the Athens
Convention limits will apply.
The court also held that that s. 37(2)(a)
and s. 37(2)(b) of Part 4 of the Act should be read harmoniously
so that domestic gratuitous passengers on a vessel operated for
a commercial purpose are subject to the same limitations of liability
that apply to domestic paying passengers under a "contract
On the second issue of whether the
action of falling asleep at the helm established that Mr. Godfrey
acted "with intent to cause the damage" suffered by Ms.
Gundersen, or that he acted "recklessly and with knowledge
that such damage would probably result" disentitling him to
limitation of liability (per Article 13 of the Athens Convention),
the court found that the onus was on the claimant to establish these
acts or omissions.
Justice Davies stated, "the onus
upon Ms. Gundersen, to prove that the defendants cannot rely upon
the monetary limitation provisions of the Athens Convention by reason of Article 13 is a heavy one, emanating from the commercial
and insurance trade-offs which gave rise to both the Athens Convention and the General Limitation Convention that have, through
the passage of the Act, now been given statutory effect
under Canada's domestic maritime law."
The court concluded that the "evidence
adduced on this application does not establish that Mr. Godfrey intentionally caused the injuries suffered by her by falling
asleep." The court also was not prepared to find that falling
asleep constituted gross negligence and amounted to reckless behaviour
disentitling Mr. Godfrey from limitation of liability. The court
noted that the case law established that the question of whether
Mr. Godfrey knew that the injuries suffered by Ms. Gundersen
would probably result from his acts or omissions must be determined
by application of a subjective test.
The court also noted that "the
authorities further establish that, to lose the protection of the
limitation provisions of the Athens Convention by reason
of conduct running afoul of Article 13, Ms. Gundersen must also
prove that Mr. Godfrey had foresight of the very loss that occurred,
not merely of the type of loss. See: "The Leerort",
 2 Lloyd's L.R. 291 (C.A.) at ¶13 ["The Leerort"].
There is no evidence before me concerning what Mr. Godfrey knew
at the time of or even shortly before the collision. It would indeed
be impossible to prove that a sleeping person was acting with subjective
knowledge or foresight."
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