On January 7, 2021, the B.C. Court of British Columbia released Reasons for Judgment in Knight v Black et al, 2021 BCJ No 17. This case concerns Canadian Maritime Law and in particular Part 4 of the Marine Liability Act, SC 2001 c 6 (the “Act”) and the 1974 Athens Convention relating to the Carriage of Passengers and their Luggage by Sea (the “Athens Convention”). This is a noteworthy decision, as there are very few Canadian cases that contemplate these liability limiting provisions.
On October 18, 2011, the Plaintiff, Francesca Knight, suffered serious personal injuries when a boat on which she was travelling collided with a sandbar on the Lillooet River near Pemberton, British Columbia (the “Accident”).
At the time of the Accident, Mainroad Howe Sound Contracting Ltd (“Mainroad”) was under contract with Her Majesty the Queen in the Right of the Province of British Columbia, represented by the Minister of Transportation and Infrastructure (the “Province”) to provide highway maintenance services for designated provincial roadways in the area. One of these roadways was the Pemberton Meadows Road (the “Roadway”), which lay adjacent to the bank of the Lillooet river in several areas north of Pemberton.
Months before the Accident, Mainroad and the Province became concerned about the stability of the Roadway due to the erosion of the river’s bank in several areas. The Plaintiff was a habitat biologist for the Department of Fisheries and Oceans, and she expressed concerns about the bank erosion. The parties therefore agreed to conduct a reconnaissance to identify riverbank erosion sites along the river that required attention.
The Province tasked Mainroad with securing a boat charter to conduct the reconnaissance. Mainroad approached Mr. Stephen Black, who agreed to transport individuals for the reconnaissance in his boat at a rate of $200 per hour. The passengers on Mr. Black’s boat at the time of the Accident included the Plaintiff, as well as an area manager for the Province, two Mainroad employees, and an environmental consultant.
At some point during this voyage, Mr. Black’s boat struck a sandbar and the Plaintiff suffered personal injuries. She brought an Action against Mr. Black, Mainroad, and the Province (collectively, the “Defendants”) seeking damages. This decision concerns the outcome of a summary trial application brought by the Defendants seeking a determination that their liability for the Plaintiff’s injuries were limited by Part 4 of the Act, which expressly incorporates the limitation of liability in the Athens Convention.
Applicable Limitation of Liability Provisions
Article 7 of the Athens Convention imposes limits on liability for personal injuries to “175,000 units of account per carriage” (translating to roughly $315,000.00 in Canadian dollars at present). Where personal injuries are catastrophic, this provision can provide important protection for ship owners to limit their liability.
Through Part 4 of the Act, Canada adopted Articles 1-22 of the Athens Convention, along with some unique expansions that exist only in Canada. Specifically, section 37(2) in Part 4 of the Act widens the scope of the Articles to apply in respect of:
- a) the carriage by water, under a contract of carriage, of passengers or of passengers and their luggage from one place in Canada to the same or another place in Canada, either directly or by way of place outside of Canada;
- b) the carriage by water, otherwise than under a contract of carriage, of persons or persons and their luggage, excluding i) the master of a ship, a member of the ship’s crew or any other person employed or engaged in any capacity on board a ship on the business of the ship, (ii) a person carried on board a ship other than a ship operated for a commercial or public purpose,
… [other exceptions are listed but not applicable to this case]
In other words, section 37(2)(a) of the Act expands the Athens Convention’s liability limiting provisions to contracts of carriage for the domestic carriage of passengers by water in Canada (in addition to international carriage as provided in the Athens Convention). Section 37(2)(b) also extends the limiting protections to instances where there is no contract of carriage, as long as the boat was operated for commercial or public purposes, and the injured person was not employed or engaged in any capacity with the business of the boat.
Section 36(1)(b) of the Act further expands the definition of contract of carriage in Article 1 of the Athens Conventionby stipulating that the expression “carriage by sea” shall be read as “carriage by water”, which expands the scope of carriage from the sea to inland lakes and rivers too.
The key issues in Knight v Black were:
- Whether the Plaintiff was on the boat pursuant to a “contract of carriage”, as contemplated by section 37(2)(a) of the Act; and
- If not, whether any of the exclusions contemplated by section 37(2)(b) of the Act applied to negate the application of the Athens Convention.
Contract of Carriage or Charterparty
Under Article 1 of the Athens Convention, the following elements must be met for a finding that a contract of carriage exists: there must be a (i) contract (ii) made by a carrier (iii) for the “carriage by water” of a (iv) “passenger”.
The Defendants’ argued that Mr. Black and Mainroad entered into a contract whereby Mainroad agreed to pay Mr. Black $200 per hour for Mr. Black to transport passengers, including the Plaintiff, on his boat on the Lillooet river for the reconnaissance. They argued that all of the elements required by Article 1 were met, and that a contract of carriage existed in the present case.
With respect to the first element, the Court agreed that there was clearly a contractual agreement between Mr. Black and Mainroad, despite the Plaintiff’s efforts to argue that it was not clear in the evidence which Mainroad employee bound Mainroad to this verbal contract.
Turning to whether this contract was made by a “carrier”, the Court noted that the Athens Convention defines “carrier” as a “person by or on behalf of whom a contract of carriage has been concluded whether the carriage is actually performed by him or a performing carrier”. The Athens Convention defines “performing carrier” as “a person other than a carrier, being the owner, charterer or operator of a ship, who actually performs the whole or a part of the carriage”. The Court found that Mr. Black was clearly a “performing carrier”, and further that Mainroad and the Province both fell into the definition of “carrier”.
With respect to the final contentious element, the Plaintiff argued that she could not be a passenger as required, as she was not privy to the contract between Mr. Black and Mainroad. The Court rejected this argument, referencing Cairns v Northern Lighthouse Board and Cakypso Marine, a decision from the Scottish Court of Session, Outer House at paragraph 100: “… for a contract of carriage to exist it is immaterial that the particular passenger making the claim is a party to that contract, as long as his or her journey is made in pursuance of such a contract”.
In contemplating the Plaintiff’s argument that the agreement between Mr. Black and Mainroad was a “charterparty” and not a contract of carriage, the Court quotes Carver on Charterparties which provides that: “a charter party is a contract whereby one party (the “shipowner”) contracts to place the whole or part of a vessel at the disposal of the other party (the “charterer”).” While relying on a decision of the England and Wales High Court, the Plaintiff argued that this was clearly a “time charter” because Mainroad, at all material times, directed and had control over where Mr. Black took the boat on the river.
The Court rejected the Plaintiff’s argument. The Court noted that the England and Wales High Court in the case relied on by the Plaintiff was forced to turn to secondary sources in its analysis as there was insufficient guidance provided in the provisions applicable to that case, whereas the provisions in this case provided sufficient guidance to be determinative without looking to other sources. Interestingly, the Court further noted that it may be possible for an agreement to be defined as both a charterparty and a contract of carriage, and that an agreement being one would not necessarily preclude it from being the other.
The Court held that all of the elements of the definition of “contract of carriage” were met in the circumstances, and as such section 37(2)(a) applied to invoke the application of the Athens Convention, including the limitation of liability provisions. Despite this finding, the Court went on to assess whether any of the exclusions set out in 37(2)(b) may have applied.
The “Business of the Ship” Exclusion
The first of the exclusions contained in section 37(2)(b) of the Act states that the limiting provisions will not apply where there is no contract of carriage if the injured party is the “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 the ship”.
The Plaintiff argued that the use of the words “or any other person” and “in any capacity” was intended to encompass a wide spectrum of possible roles on board a ship, as well as a wide range of business. She argued that the purpose of the boat trip was to complete the reconnaissance survey and that she was aboard the ship as part of this business.
The Court disagreed. Madam Justice Ahmad stated at paragraph 115: “In my view, that argument conflates the “business of the ship” with the business of the people on the ship. In this case, the two are not the same”. The Court noted that the Plaintiff was on the boat in her own professional capacity. While her business was the same as the other passengers, it was not the same as Mr. Black, whose business it was to operate the boat. The distinct and separate nature of Mr. Black’s role during the trip relative to the others made it such that the “business of the ship” could not be said to be the reconnaissance, but rather to transport the passengers on the river. As the Plaintiff was not employed or engaged in the business of this transportation, section 37(2)(b)(i) was not invoked.
The “Commercial Purpose” Exclusion
The second exclusion contained in section 37(2)(b) of the Act contemplates the purpose of the boat’s voyage. The Plaintiff argued that the boat in this case was not operated for a commercial or public purpose, and therefore, the exclusion should apply.
The Act does not define “commercial purpose”. However, the Court noted that the case law is clear that the concept of a profit factors into the interpretation. Mr. Black’s evidence on discovery was that he was not prepared to provide transportation on his boat for free. It was further relevant to the Court’s analysis that the parties themselves viewed the contract as being commercial in nature, and indeed, before amending her pleading, the Plaintiff had initially referred to the agreement between Mr. Black and Mainroad as a commercial contract in her Notice of Civil Claim.
While the boat in this case was not usually operated for a commercial purpose, the Court concluded that it was at the time of the Accident, and that the exclusion set out in section 37(2)(b)(ii) would not apply.
In summary, the Court agreed with the Defendants that their liability was limited pursuant to 37(2)(a) the Act and the Athens Convention, as the Plaintiff was carried on the boat pursuant to a contract of carriage between Mainroad and Mr. Black, and in the alternative, that none of the exclusions from 37(2)(b) of the Act applied.
Impact of the Decision
As noted above, this is an important case as there are very few Canadian decisions that contemplate the liability limiting provisions of the Act and the Athens Convention, despite their potentially significant impact in cases of catastrophic personal injury.
This case is also one of few that contemplates the expansions to the Athens Convention created by section 37(2) of the Act, including who may be captured within the wording of “any other person employed or engaged in any capacity on board a ship on the business of the ship”; and determining whether a voyage was for a “commercial purpose”. Given that these categories of exception are somewhat unexplored territory, this case provides important insight into how the Court will interpret their wording.