In this issue:
1. Firm and Industry News
2. Limitation of Liability Under Marine Liability Act: Section
28 or 29 Applies?
1. Firm and Industry News
- September 8th 2011 Toronto or Montreal: Tentative Date for Association of Average Adjusters of Canada
- September 18-21 2011 Paris France: International
Union of Marine Insurers Meeting.
- September 28-30 Malahide Dublin Ireland: International Marine Claims Conference
- October 6th, 2011 New York: Association
of Average Adjusters of the U.S. Annual Meeting and Dinner
Rui Fernandes will be attending the IUMI
meetings in Paris France in September. He will be giving a short
speech on Canadian maritime law and loss prevention.
Kim Stoll will be the moderator on the
Modal Update panel at the Canadian Transport Lawyers Association
Annual Conference in Winnipeg, Manitoba. Martin Abadi will be presenting on the modal update for Marine Law.
Fernandes Hearn LLP Named One of Top 6 Maritime
Boutique Firms in the Country. "This boutique came on the
scene in 1996, when Rui Fernandes and Gordon Hearn left Cassels
Brock & Blackwell LLP. Maritime law is a major component
of its general transportation law practice, which also deals
with matters involving aviation, trucking, and rail carriage.
Its nine lawyers serve key clients such as Royal & Sun Alliance
Insurance, Allianz Insurance, Chubb Group of Insurance Companies,
JEVCO Insurance Co., NYK Logistics, Quik X Transportation Inc.,
and Whirlpool Jet Boat Tours. Fernandes has helped solidify
the firm's strong reputation by publishing five texts on transportation
law." - Canadian Lawyer Magazine
of Liability Under Marine Liability Act: Section 28 or 29
The owners and operators of a sport fishing lodge
located on Eagle Lake in the town of Vermillion Bay, Ontario brought
an application, pursuant to the Marine Liability Act to limit
their liability to $1 million for a boating accident involving two
of their vessels. See Buhlman v. Buckley, 2011 FC 73.
The accident involved two vessels owned by the lodge.
The two boats travelled to a few fishing spots and engaged in some
brief fishing. The boats began to return to the lodge before dark.
On the return trip, the Crestliner vessel operated by Mr. Buhlman
collided with the Lund Outfitter vessel operated by Joe William
Buckley. As a result of the collision, Bradley Buckley suffered
serious and catastrophic personal injuries including a severe head
injury, fractured skull, extensive scalp lacerations with resulting
right leg spasticity and weakness, gait dysfunction, right arm and
hand incoordination and weakness.
At issue was whether the limitation of liability in
section 28(1) of the Marine Liability Act (as it then read)
applied to the accident. Also at issue was whether the vessels were
involved in a commercial venture triggering section 29(3) of the Marine Liability Act. Both vessels were under 300 tons.
Section 28(1) provides:
Liability for ships under 300 tons
28. (1) The maximum liability for maritime claims that arise on
any distinct occasion involving a ship with a gross tonnage of
less than 300 tons, other than claims mentioned in section 29,
(a) $1,000,000 in respect of claims for loss of
life or personal injury; and
(b) $500,000 in respect of any other claims.
Section 29 provides:
29. (1) The maximum liability for maritime claims
that arise on any distinct occasion for loss of life or personal
injury to passengers of a ship for which no Canadian maritime
document is required under Part 4 of the Canada Shipping Act,
2001 is the greater of
(a) 2,000,000 units of account, and
(b) the number of units of account calculated by multiplying
175,000 units of account by the number of passengers on board
Passenger claims, no contract of carriage
(2) Notwithstanding Article 6 of the Convention, the maximum liability
for maritime claims that arise on any distinct occasion for loss
of life or personal injury to persons carried on a ship otherwise
than under a contract of passenger carriage is the greater of
(a) 2,000,000 units of account, and
(b) 175,000 units of account multiplied by
(i) the number of passengers that the ship is
authorized to carry according to its certificate under Part
4 of the Canada Shipping Act, 2001, or
(ii) if no certificate is required under that Part, the number
of persons on board the ship.
(3) Subsection (2) does not apply in respect of
(a) the master of a ship, a member of a ship's
crew or any other person employed or engaged in any capacity
on board a ship on the business of a ship; or
(b) a person carried on board a ship other than a ship operated
for a commercial or public purpose.
The judge was critical of both counsel for their emphasis
on the nature of the trip. She stated:
"The parties submit that paragraph 29(3)(b)
is the critical issue in the present motion for summary judgment.
The [lodge owners] argue that the Buckley Defendants were out
on the lake, in a vessel provided as part of their holiday package
at the Eagle Lake Sportsmen's Lodge, that is on a ship that was
operated for a recreational, not a commercial purpose.
 The [lodge owners] in this action argue that
when read together, sections 28 and 29 of the Act impose different
limitations of liability depending on whether an injured party
was being carried under a contract of carriage, that is subject
to subsection 29(1) or on a vessel that was operated for a commercial
purpose but without a contract of carriage, for example, a whale
watching business, subject to subsection 29(2). The [lodge owners]
submit that there is another category that is addressed by sections
28 and 29 together, that is the case of gratuitous passengers
on a vessel being operated for other than a commercial purpose.
They argue that in such a situation, the limitation set out in
section 28 applies."
In their submissions, Counsel directed their attention
to the nature of the operation of the two pleasure craft, whether
it was for a commercial or recreational purpose. The judge pointed
out that "with respect, in my opinion, this focus is misplaced.
It is not the purpose of the "voyage" that is the subject
of sections 28 and 29, but the role of the vessel for which limitation
of liability is sought."
The judge summarized the facts: "On the facts
of this case, Bradley Buckley and Joe William Buckley were not passengers
on the vessel operated by the [lodge owner] Buhlman. Whether they
were on board the Lund Outfitter operated by Joe William Buckley,
for a commercial or recreational purpose, is irrelevant in this
motion because the motion is a request by the owners and operator
of the Buhlman vessel to limit their liability. That liability is
argued to be as operators of the Buhlman vessel, not as coincidental
owner of the Buckley vessel. The key question is the status of Bradley
Buckley and Joe William Buckley vis-à-vis the Crestliner
The judge explained the differences between section
28 and 29. "Sections 28 and 29 address two different scenarios.
Section 28 deals with the situation where a claim is "involving
a ship with a gross tonnage of less than 300 tons, other than claims
mentioned in section 29". Section 29 deals with claims by passengers,
either under a contract of carriage or in the absence of such a
The judge concluded that "To engage subsection
29(1), the individual claiming damages must be a "passenger"
on the vessel said to be negligent or liable. For the purpose of
this subsection, "passenger" is defined by reference to
Article 7, paragraph 2(a) or paragraph 2(b) of the Convention, namely
"under a contract of passenger carriage", or someone accompanying
a vehicle or livestock under a contract for the carriage of goods,
respectively. Since neither Bradley Buckley nor Joe William Buckley
fit the definition of a "passenger" on the Crestliner
vessel, subsection 29(1) does not apply."
Justice Heneghan held that the maximum liability of
James Buhlman and Cindy Maisonville for all claims arising out of
bodily injuries sustained by Bradley Richard Francis Buckley and
Joe William Buckley in a boating accident that occurred on Eagle
Lake, District of Kenora, Province of Ontario on July 22, 2006 was
$1,000,000 pursuant to section 28 of the Marine Liability Act.
The decision has been appealed.
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