T-553-76
The Queen (Plaintiff)
v.
The Ship Golden Robin, Warwick Shipping Lim
ited, James T. Reid, Golden Eagle Canada Lim
ited and Joseph Fearon (Defendants)
Trial Division, Walsh J.—Montreal, July 19;
Ottawa, August 10, 1976.
Practice—Motion to dismiss action against defendant
Golden Eagle Canada Limited—No reasonable cause of
action—Motion by Golden Eagle Canada Limited, owners of
oil cargo, to strike all allegations against it—Claim that other
defendants negligent under Canada Shipping Act, Pilotage
Act, Oil Pollution Prevention Regulations, Fisheries Act, Con
tributory Negligence Act and doctrine of res ipsa loquitur No
specific allegations against Golden Eagle Canada Limited—
Only claim is based on rule in Rylands v. Fletcher—Rule
inapplicable—Motion by Golden Eagle Canada Limited main
tained and plaintiffs action against it dismissed—Canada
Shipping Act, R.S.C. 1970, c. S-9, s. 734(1)—Fisheries Act,
R.S.C. 1970, c. F-14—Oil Pollution Prevention Regulations,
P.C. 1971-2005—Pilotage Act, S.C. 1970-71-72, c. 52—Con-
tributory Negligence Act, R.S.N.B. 1973, c. C-19.
Statement of claim relies mainly on sections 727, 728, 730
and 734 of Canada Shipping Act and doctrine of res ipso
loquitur but contains no specific allegation against Golden
Eagle Canada Limited in its quality as owner of oil or any
suggestion that anything inherent in the oil contributed to the
occurrence of the damage. Plaintiff admits that no other statute
referred to in the statement of claim establishes liability of
Golden Eagle Canada Limited arising out of ownership of oil.
The Oil Pollution Prevention Regulations do not make the
owners of the oil liable and there is no suggestion in the
statement of claim that the owners of the oil had anything to do
with the discharge of the oil, which would make them liable
under the Fisheries Act. Defendant relies on The Queen v.
Ionian Maritime Co. Ltd. where a similar action was dismissed
on grounds that Governor in Council has not prescribed any
class of vessel to which section 734(1)(b) of the Canada
Shipping Act would apply.
Held, motion is allowed. Plaintiffs only argument for hold
ing owners of oil cargo liable is based on doctrine in Rylands v.
Fletcher. Since oil escaped through no alleged fault of owner
and after it had passed out of its control, the doctrine is not
applicable. In any event oil is not inherently a dangerous
substance although it could have been made so by statute if
regulations giving effect to section 734 of Canada Shipping Act
had been promulgated. There is no reason to disagree with
finding of Addy J. in The Queen v. Ionian Maritime Co. Ltd.
The Queen v. Ionian Maritime Co. Ltd. (1976) (unreport-
ed, T-2288-75); Rylands v. Fletcher (1868) L.R. 3 H.L.
330; Read v. Lyons [1947] A.C. 146, applied.
MOTION.
COUNSEL:
R. Hynes for plaintiff.
P. G. Côté for defendants.
SOLICITORS:
Deputy Attorney General of Canada for
plaintiff.
Ogilvy, Cope, Porteous, Montgomery,
Renault, Clarke & Kirkpatrick, Montreal,
for defendants.
The following are the reasons for judgment
rendered in English by
WALSH J.: This is a motion on behalf of defend
ant Golden Eagle Canada Limited for an order
striking the allegations in the statement of claim
and conclusions concerning defendant Golden
Eagle Canada Limited on the grounds that they do
not disclose any reasonable cause of action or
grounds on which the said defendant could be held
liable for the damages alleged in the statement of
claim and that they are abusive of the process of
the Court.
The accompanying application for dismissal of
plaintiff's action against said defendant supported
by affidavit sets out that Golden Eagle Canada
Limited was at all material times the owner of
25,968 long tons of bunker "C" oil which was
loaded on board the ship Golden Robin owned by
defendant Warwick Shipping Limited, that on
September 28th, 1974, the Golden Robin left
Montreal, Quebec for Dalhousie, New Brunswick,
with the said cargo and on September 30th, 1974,
while navigating in the navigational channel of
Dalhousie Harbour, sustained extensive damage to
her hull structure with the result that the cargo of
bunker "C" oil began discharging into the waters
of Dalhousie Harbour and surrounding water, that
the cargo was not under the care and/or control of
defendant Golden Eagle Canada Limited and in
fact Golden Eagle Canada Limited has instituted
proceedings in connection therewith against Her
Majesty The Queen bearing record No. T-3325-75
of this Court, that under section 734(1)(b) of the
Canada Shipping Act, R.S.C. 1970, c. S-9 the
Governor in Council has not prescribed any class
of vessel to which the said paragraph would apply
and that the provisions of the Pilotage Act, S.C.
1970-71-72, c. 52, the Oil Pollution Prevention
Regulations, P.C. 197l-2005 made pursuant to the
Canada Shipping Act, the Fisheries Act, R.S.C.
1970, c. F-14, and the Contributory Negligence
Act, R.S.N.B. 1973, c. C-19, all of which are
referred to in the statement of claim do not con
cern it.
An examination of the statement of claim indi
cates that defendant James T. Reid was the
Master of the ship at the material time in the
employment of the defendant Warwick Shipping
Limited as owners and that defendant Joseph
Fearon is a licensed pilot who had the care and
control of the ship while she was proceeding to the
government wharf at Dalhousie, New Brunswick,
at about 4:00 a.m. on September 30th, 1974, when
the vessel struck something and began discharging
its cargo of bunker "C" oil, before proceeding to
its intended berthage where the remainder of the
cargo was removed. The oil discharged was dis
persed by the winds and tides and was harmful and
deleterious to marine life and wildfowl as well as
fouling the waters and beaches of the Bay of
Chaleur and represented a hazard to navigation
and shipping and constituted a private, public and
statutory nuisance causing damage both to the
property of Her Majesty and property which Her
Majesty had by statute and common law a duty to
protect from damage. The cost of cleaning up and
removing the oil exceeds $195,000 which plaintiff
claims from the defendants. It is alleged that
defendant Warwick Shipping Limited is liable by
virtue of sections 727, 728, 730 and 734 of the
Canada Shipping Act' and that the oil emission
was caused by the negligence of the defendants,
their officers, servants and pilot, acting in the
course of their employment because the normal
approach method used to enter Dalhousie Harbour
was not followed, the Master of the vessel failed to
' R.S.C. 1970, c. S-9.
inform himself of the method of approach the pilot
was intending to use and was unfamiliar with
Dalhousie Harbour and failed to inform himself,
that the pilot relied on local knowledge following
his line of approach and failed to give adequate
instructions to direct the ship on a course which
would have avoided the accident or to alter her
speed and course, that the vessel did not have
properly qualified officers and men on the bridge
at the time, that there was a failure to carry or to
make proper use of adequate charts or to observe
or to recognize navigational aids, that they did not
have or make proper use of navigational equip
ment, and similar allegations of negligence. The
doctrine of res ipsa loquitur is also invoked on the
basis that the discharge of oil into the sea would
not ordinarily occur without negligence on the part
of the defendants. Nowhere is there any specific
allegation against defendant Golden Eagle Canada
Limited in its quality as owner of the oil. There is
no suggestion that there was anything inherent in
the oil itself which contributed in any way to the
occurrence of the damages.
Section 734(1) of the Canada Shipping Act
reads as follows:
734. (1) Subject to section 735,
(a) the owner of a ship that carries a pollutant in bulk, or
(b) the owner of a ship that carries a pollutant in bulk and
the owner or owners of that pollutant, if the ship is of a class
prescribed by the Governor in Council as a class to which
this paragraph applies,
in a case described in paragraph (a) is liable or, in case
described in paragraph (b) are jointly and severally liable
(c) for the costs and expenses of and incidental to the taking
of any action authorized by the Governor in Council to repair
or remedy any condition that results from the discharge of a
pollutant in waters to which this Part applies that is caused
by or is otherwise attributable to that ship, or to reduce or
mitigate any damage to or destruction of life or property that
results from or may reasonably be expected to result from
such discharge, to the extent that such costs and expenses
can be established to have been reasonably incurred in the
circumstances, and
(d) for all actual loss or damage incurred by Her Majesty in
right of Canada or a province or any other person resulting
from the discharge of a pollutant into waters to which this
Part applies that is caused by or is otherwise attributable to
that ship,
and such costs and expenses and actual loss or damage are
recoverable, with costs, in the case of costs and expenses
referred to in paragraph (c), by the person authorized by the
Governor in Council to take the action or if that person is the
Minister, by Her Majesty in right of Canada, and, in case of
actual loss or damage referred to in paragraph (d), by Her
Majesty in right of Canada or a province or the other person
that incurred that loss or damage.
I have underlined the words in paragraph (b) "if
the ship is of a class prescribed by the Governor in
Council as a class to which this paragraph applies"
since it is conceded by counsel for plaintiff that no
such regulations have ever been promulgated. It
follows that there is no way in which the owners of
the pollutant, in this case the bunker oil, can be
held liable under the said section 734. Plaintiff's
counsel was also forced to admit at the hearing
that none of the other statutes referred to in the
statement of claim had any direct bearing in estab
lishing liability of defendant Golden Eagle Canada
Limited arising out of the ownership of the oil.
I have examined the Oil Pollution Prevention
Regulations P.C. 1971-2005 which were filed and
find that they merely are concerned with ships
carrying, loading and unloading oil and that no
ship shall discharge oil into the waters. There is
nothing in them making the owners of the oil
liable. The Fisheries Act merely provides that no
person shall throw overboard or deposit or permit
the deposit of a deleterious substance, and there is
no suggestion in the statement of claim that the
owners of the cargo had anything to do with the
discharge of the oil.
Reference was made by defendant to an
unreported judgment of my brother, Addy J. dated
May 3, 1976, of The Queen v. Ionian Maritime
Co. Ltd. No. T-2288-75 2 in which two ships collid
ed causing the discharge of bunker "C" oil owned
by defendant Metropolitan Petroleum Co., result
2 [Reasons for judgment not distributed—Ed.]
ing in substantial clean-up expenses. The facts
appear to be identical with the present case. On
motion to dismiss the action brought against
defendant Metropolitan Petroleum Co. on the
grounds that even if the facts alleged in the action
were true, it had no liability to plaintiff since
under section 734(1)(b) the Governor in Council
has not prescribed any class of vessel to which the
said paragraph would apply, Addy J. granted the
motion and dismissed the action as against the said
defendant.
Plaintiffs only argument for holding the owners
of the oil cargo liable is based on the case of
Rylands v. Fletcher 3 , placing liability on the
owner for the escape of dangerous substances.
Subsequent interpretations of this case emphasize
that a defendant cannot avail himself of the
absence of all negligence on his part or of those
over whom he has any measure of control, but that
if he keeps a dangerous substance he does so at his
own risk and is excused only for an escape caused
by an act of God or the unexpected and malicious
intervention of strangers. In commenting on this
case, Fleming 4 at page 281 states that it has found
favour in recent times with the proponents of
"enterprise liability" by virtue of which anyone
whose activity entails exceptional peril to others
notwithstanding all reasonable safety precautions
should fairly treat all typical harm resulting from
it as a cost item which can be absorbed in pricing
and passed on to the consumer. In analyzing the
jurisprudence with respect to objects classified as
"dangerous things" he states at page 285: "Water,
gas, electricity and many other Rylands v. Fletch-
er objects are perfectly usual, and in order to
attract the rule there must be both an extraordi
nary user of the land and the object must in the
circumstances be classifiable as dangerous".
Under the heading "Escape" he states at page 286:
3 (1866) L.R. 1 Ex. 265, affd. (1868) L.R. 3 H.L. 330.
4 Law of Torts, 4th ed., 1971.
The severest brake on future expansion of the rule in
Rylands v. Fletcher was applied when the House of Lords in
Read v. Lyons [1947] A.C. 146 insisted that there must be an
escape of the dangerous substance from land under the control
of the defendant to a place outside his occupation.
In the present case the oil, even if it can be
considered to be a "dangerous substance" was no
longer under the control of the defendant but
under the control of the carrier at the time when it
escaped and I find it difficult to apply the rule in
Rylands v. Fletcher so as to hold the defendant
Golden Eagle Canada Limited liable for the
escape of the oil through no fault on its part and
after it had passed out of its control, merely
because it was the owner of this oil, which if it
does leak into the sea while being carried to its
destination can undoubtedly cause damage. Even
under the rule of Rylands v. Fletcher if the escape
was due to the deliberate act of a stranger, which
could not have been anticipated, liability is exclud
ed, and while ship collisions do take place and
ships do founder causing oil to escape, it seems to
be going rather far to say that this is something
which could or should have been anticipated by the
owners of the oil so as to make them liable. If
there were some allegation that they had knowing
ly caused the oil to be shipped in a vessel which
they knew to be unseaworthy, or if there were
some allegation that the oil cargo was not what it
was claimed to be and that some inherent quality
or defect in same had contributed to or caused its
escape, then the situation would of course have
been entirely different, but there would then have
been a direct allegation of fault against said
defendant.
Oil is a cargo which is of necessity widely
carried throughout the world and while the escape
of it can cause severe damage, as in the present
case, I do not think it would be proper to look upon
it as an inherently dangerous substance. Further
more, had it been intended to make the owner of
same responsible in all cases for damages resulting
from such spills this could easily have been done in
the Canada Shipping Act by virtue of section 734
if regulations to give effect to that section had
been made. The fact that such regulations have
never been made is not without its significance and
in the absence of statutory authority creating the
liability, I can find no common law liability on the
basis of the application of the rule in Rylands v.
Fletcher. I therefore see no reason to disagree with
the finding of my brother Addy J. in the aforemen
tioned case of The Queen v. Ionian Maritime Co.
Ltd.
JUDGMENT
The motion of defendant Golden Eagle Canada
Limited to strike all allegations in the statement of
claim concerning it and conclusions against it is
maintained and plaintiffs action in so far as it
concerns said defendant is dismissed with costs.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.