T-2278-74
Alaska Trainship Corporation, Pacific Maritime
Agencies Limited and the ship S.S. Alaska
(Plaintiffs)
v.
Pacific Pilotage Authority, the Queen and the
Attorney General of Canada (Defendants)
Trial Division, Gibson J.—Vancouver, February
21, 22, 23, 24 and 25; Ottawa, June 6, 1977.
Maritime law — Jurisdiction — Regulation of Pacific
Pilotage Authority concerning compulsory pilotage in compul
sory pilotage zone — Exemption or waiver of use of pilot in
zone — Canadian or American registration prerequisite condi
tion — Liberian registry vessel proceeding without pilot —
Routine coastal voyage — Plaintiffs seeking declaration that
Regulation is ultra vires the Authority — In separate action,
Authority seeks payment for pilotage services, as per Regula
tion Ship, owner and operator counterclaim and seek refund
for monies paid in lieu of pilotage services provided before
Regulation approved — Pacific Pilotage Regulations, SOR/
73-354, SOR/74-242, ss. 9 and 10 — Pilotage Act, S.C.
1970-71-72, c. 52, ss. 12, 14, 34, 43.
The plaintiffs operate a shipping business, moving goods
from New Westminster, British Columbia, to Alaska. The S.S.
Alaska did not carry a licensed pilot in a compulsory pilotage
area where safety was not compromised and the Pacific Pilot-
age Authority charged for pilot services as if provided, in
accordance with its Regulations. The ship did not meet a
condition Canadian or American registry—for the exemption
or waiver of compulsory pilotage regulation. Further, the ship's
master and deck officers could not be certified pilots by ruling
and later constitution of the Canadian Merchant Service Guild
to which they belonged. The plaintiffs seek a declaration that
the Authority's Regulations, in whole or in part, are ultra vires.
The Authority, as plaintiff in another action, claims its pilotage
charges for a period after the approval of the compulsory
pilotage Regulations. The ship, its owners and operators coun
terclaim for pilotage dues paid in lieu of receiving pilotage
services, during a period before the Regulation was approved
but after authority for making the Regulation had been grant
ed, on grounds that these dues were paid under a mistake of
law in circumstances which according to the jurisdiction per
mits their recovery.
Held, judgment is issued in both actions that the inclusion of
the words "registered in Canada" and "registered in the United
States" in sections 9 and 10 of the Regulations is ultra vires the
power of the Pacific Pilotage Authority as delegated to it by
section 14 of the Pilotage Act. Judgment also issues in both
actions for further declarations that: (1) the pilot members of
the Authority had a conflict of interest in the true equitable
sense when they participated in drafting and passing the Regu
lations and did not purge themselves of such conflict of interest
at any relevant time; (2) the Authority, in prescribing the flag
of the ship in sections 9 and 10, was not motivated for the
public purpose of safety within the meaning and objects of
section 12 of the Pilotage Act, but rather to obtain personal
pecuniary benefit for the pilot members of the Au
thority; (3) the S.S. Alaska, in the area it ran without a pilot,
posed no threat to safety within the meaning of section 12 of
the Pilotage Act; (4) the Authority, by including these words in
the subject Regulations, frustrated the intent of Parliament
that certain ships, posing no safety threat within the meaning of
section 12, should be excused from compulsory pilotage by
exemption or waiver prescribed in the Pilotage Act. (The
Canadian Merchant Service Guild, in prohibiting its members
from applying or holding a pilotage certificate similarly frus
trated the intent of Parliament.)
Held also, the Authority's claim for its charges fails. Section
34 of the Pilotage Act is directed to the status of a ship and is
premised on there being regulations passed under the enabling
provisions of that Act. This section contemplates the Au
thority enacting and having approved Regulations before the
provisions of section 34 become operative. Since the Pacific
Pilotage Authority failed to do so until April 9, 1974, the part
of its claim relating to pilotage charges up to March 31,
inclusive, fails. Its charges for April 1974 also fail because of
the ultra vires declaration.
Held also, the counterclaim is dismissed. By section 43(1) of
the Pilotage Act Parliament expressly cured the situation where
the payment of dues is not compulsory. That subsection states
that every by-law referred to in that subsection and made
pursuant to the relevant enabling provisions of the Canada
Shipping Act "shall be deemed for all purposes ... to have
been made, pursuant to an Act of the Parliament of Canada
that authorized the making thereof."
Regina v. Cec, unreported judgment of N. Mussallem,
Provincial Court Judge, British Columbia Provincial
Court, Vancouver, dated May 16, 1973, disagreed with.
Eadie v. The Corporation of the Township of Brantford
[1967] S.C.R. 573, followed. Landreville v. The Queen
[1973] F.C. 1223, applied.
ACTION.
COUNSEL:
D. A. Hogarth, Q.C., for plaintiffs.
W. O'Malley Forbes for defendant, Pacific
Pilotage Authority.
G. Donegan for defendants, the Queen and
the Attorney General of Canada.
SOLICITORS:
Hogarth, Oliver, Hughes & Drabik, New
Westminster, for plaintiffs.
Owen, Bird, Vancouver, for defendant, Pacific
Pilotage Authority.
Deputy Attorney General of Canada for
defendants, the Queen and the Attorney Gen
eral of Canada.
The following are the reasons for judgment
rendered in English by
GIBSON J.: This action and one other action
were tried on common evidence. In this action, the
plaintiffs seek a declaration that the Pacific Pilot-
age Regulations approved by the Governor in
Council on April 9, 1974, SOR/74-242 (Exhibit
P-1) are ultra vires in whole, or alternatively as to
paragraphs 9(2)(a)(iii) and 10(1)(a) thereof. In
the other action (Court No. T-2093-74), the Pacif
ic Pilotage Authority as plaintiff claims
$10,780.54 for pilotage charges against the ship
S.S. Alaska, Alaska Trainship Corporation and
Pacific Maritime Agencies Limited as defendants;
and these defendants counterclaim for the return
to them of $74,247.66 they paid to the Pacific
Pilotage Authority, being pilotage dues paid in lieu
of receiving pilotage services, the allegation being
that the monies were paid under a mutual mistake
of law in circumstances which according to the
jurisprudence permits recovery back.
The genesis of these actions is the position that
was taken by the owners and operators of the ship
S.S. Alaska namely, that the S.S. Alaska was not
required to comply with certain of the provisions
respecting "compulsory pilotage" in part of the
"compulsory pilotage areas" prescribed by the
Regulations of the "Pacific Pilotage Author
ity" passed by that body pursuant to enabling au
thority in section 14 of the Pilotage Act, S.C.
1970-71-72, c. 52.
The "Pacific Pilotage Authority" in such rele
vant Regulations, did not provide for "an exemp
tion" from, or "a waiver" of "compulsory pilot-
age" to enable the S.S. Alaska to obtain an
exemption from "compulsory pilotage" in a certain
part of the "compulsory pilotage area"; and in
addition, for reasons which will be discussed later,
it was impossible for any "regular member of the
complement of" (that ship) (see section 16 of the
Act) to obtain and hold a "pilotage certificate"
(see section 2(j) of the Act) for the relevant
compulsory pilotage area so as to be exempted
from "compulsory pilotage" by that method.
In addition, certain further alternative means of
eliminating the problems of this ship in relation to
the Regulations regarding compulsory pilotage as
raised in these actions, were also denied the S.S.
Alaska because, for all practical purposes, it was
not possible to have the S.S. Alaska registered in
Canada, and also as was stated in the Report of
John J. Mahoney, (dated January 2, 1974 see
Exhibit P-54) (who was a commissioner appointed
by the Minister of Transport pursuant to section
14(5) of the Pilotage Act to inquire into certain of
the draft Regulations proposed by Pacific Pilotage
Authority in 1973) it was impossible to have this
ship registered in the United States, namely:
The S.S. "ALASKA" is a Japanese built ship owned by an
American Corporation and with financing arranged through an
agency of the United States Government. Because of its foreign
construction, however, the ship cannot be registered in the
United States and is therefore registered in Liberia. By reason
of the United States Government's financial interest in the
vessel it is required that the Master of the ship be a United
States citizen but all other deck officers and crew are
Canadian.
Although the S.S. Alaska used pilots employed
by the Pacific Pilotage Authority within the Fraser
River, a part of the compulsory pilotage areas of
the Pacific region, its owners and operators have
declined to use pilots in another part, namely, the
open waters situated between Vancouver Island
and the mainland in British Columbia, specifically
from Pine Island to Sand Heads and from Sand
Heads to Pine Island.
In these actions, the public interest in safety
within the objects and purposes of section 12 of the
Pilotage Act is not an issue, in that for the runs of
the S.S. Alaska between those two places, it is
unnecessary to have pilots aboard for the public
purpose of requiring pilots aboard namely, for
safety. But to require its owners and operators to
put pilots aboard for such runs would cost them
between $200,000 and $250,000 a year. Requiring
pilots to be aboard for these runs would accom
plish, however, a private purpose, namely, give a
substantial financial benefit to the pilots. As a
consequence, if pilots were required to be aboard
for those runs, such pilots would be performing a
function of no public benefit, and not only of no
private benefit to the owners and operators of the
S.S. Alaska, but instead a costly and useless
function.
In these actions, there was also raised another
public benefit which would result by assisting the
S.S. Alaska and its owners and operators to con
tinue to operate in an economically viable manner.
Such public purpose is the continued economic
benefit to Canada, but especially to the City of
New Westminster, British Columbia which would
result from the continuing operation of this ship in
the Pacific region. This is so, because the S.S.
Alaska is and has been for some time engaged in a
shuttle service between the ports of New Westmin-
ster, British Columbia and Whittier, Alaska and
although the majority of the cargo carried is of
U.S. origin and for U.S. destination, it is loaded at
New Westminster, British Columbia. As a conse
quence, for all practical purposes, New Westmin-
ster is the ship's home port and the merchants and
the suppliers at New Westminster supply all the
ship's provisions and fuel and other necessary
articles and services. As Mr. Mahoney stated in
his Report "The ship is obviously contributing an
economic benefit to Canada without competing
with Canadian industry and is posing no threat to
safety."
Notwithstanding, it is the position of the Pacific
Pilotage Authority that their relevant Regulations
are intra vires and that the S.S. Alaska must take
pilots aboard during the said runs in the relevant
part of compulsory pilotage area of the Pacific
region, and that the owners and operators of the
S.S. Alaska are liable for the pilotage dues
claimed; and the contrary is the position of the
owners and operators of the S.S. Alaska.
Recapitulating therefore, (a) the two public pur
poses raised in these actions are, namely, (1)
whether or not the subject Regulations passed by
the Pacific Pilotage Authority are within the
objects and purposes for which the Author
ity was statutorily created and directed to perform,
namely, "to establish, operate, maintain and
administer in the interests of safety an efficient
pilotage service within ... [its] region" as pre
scribed in section 12 of the Pilotage Act; and (2)
whether or not there should be maintained the
economic benefit to the Port of New Westminster,
British Columbia by doing everything not contrary
to law generally, and specifically not contrary to
the public interest and objects and purposes of
section 12 of the Pilotage Act, to facilitate the
continued economically viable operation of the
S.S. Alaska by its owners and operators out of the
Port of New Westminster, British Columbia; and
(b) the two private purposes raised in these actions
are, namely, (1) the pecuniary benefit of the pilots
in the compulsory pilotage areas of the Pacific
Pilotage Authority; and (2) the continued econom
ic viability of the service operated by the owners
and operators of the S.S. Alaska by that ship in
the waters between the Port of New Westminster
and the Port of Whittier, Alaska.
Although the Pacific Pilotage Authority was
established by the Pilotage Act, S.C. 1970-71-72,
c. 52, and came into force June 30, 1971, it was
not until June 26, 1973 that the Regulations,
(SOR/73-354) Exhibit P-3, were passed which
prescribed only a compulsory pilotage area in the
region under the control of the Pacific Pilotage
Authority and nothing more; and it was not until
April 9, 1974 (see Exhibit P-1 (SOR/74-242))
that there were any approved Regulations, (other
than Regulations, Exhibit P-3 (SOR/73-354))
passed by the Pacific Pilotage Authority within the
objects and purposes of and pursuant to the en
abling powers given to it under section 14 of the
Pilotage Act.
In this connection, also, it should be noted that
from February 1, 1974 until April 9, 1974 (other
than the Regulations, Exhibit P-3, establishing a
compulsory pilotage area), there were no Regula
tions at all either under section 14 of the Pilotage
Act, or transitional by-laws and Regulations made
pursuant to the Canada Shipping Act, R.S.C.
1970, c. S-9, provisions. What had happened from
1971 by successive yearly Acts of Parliament until
February 1, 1974 was a year by year continuation
of the former by-laws and Regulations made under
the enabling powers contained in the Canada
Shipping Act. The last of these Acts, S.C. 1973-
74, c. 1, was assented to on January 31, 1973 and
it continued these transitional by-laws and Regula
tions to February 1, 1974 only. That last Act reads
as follows:
An Act to amend the Pilotage Act
[Assented to 31st January, 1973]
Her Majesty, by and with the advice and consent of the
Senate and House of Commons of Canada, enacts as follows:
1. Subsection 43(4) of the Pilotage Act is repealed and the
following substituted therefor:
"(4) Every by-law made or expressed to have been made
by a pilotage authority as defined in the Canada Shipping
Act and every regulation made pursuant to Part VII of that
Act and in force, or deemed to be in force, on the commence
ment of this Act, continues in force until the 1st day of
February, 1974, unless the by-law or regulation is revoked by
an Authority."
This is relevant because, as will be noted later in
these reasons, the Regulations, Exhibit P-1,
(SOR/74-242) which were approved by the Gov
ernor in Council on April 9, 1974 were approved
because of the time constraints involved. These
Regulations, as passed by the Pacific Pilotage Au
thority, were not satisfactory to the Minister of
Transport but were approved nonetheless, by the
Governor in Council. From the evidence, it must
be inferred that the Regulations were approved
because it was considered a lesser evil to have
some Regulations in force than none at all, if some
public matter in relation to safety should arise in
the Pacific region, even if such Regulations were
in part objectionable for various reasons and also
even if perhaps they at some future time might be
declared illegal.
In these actions, speaking generally, it is the
allegations of the ship S.S. Alaska and her owners
and operators that the Regulations approved April
9, 1974, Exhibit P-1, in whole or at least in part at
sections 9 and 10 are ultra vires because they are
not within the public purpose prescribed by section
12 of the Pilotage Act and are beyond the enabling
power in section 14 of the Act. They do not allege,
however, that the other public purpose given in
evidence, namely, the continuing economic benefit
to the Port of New Westminster, British Columbia
by making the run of the S.S. Alaska to New
Westminster economically viable is relevant in
determining whether or not the said Regulations in
whole or in part are ultra vires notwithstanding
the great importance of this other public purpose.
The Pilotage Act, S.C. 1970-71-72, c. 52 came
into force June 30, 1971.
Prior to the enactment of this Act, legislation in
respect to pilotage matters was in the Canada
Shipping Act.
Prior to the enactment of the Pilotage Act, a
Royal Commission on Pilotage was established "to
inquire into and report upon the problems relating
to marine pilotage provided in Canada ... and to
recommend the changes [concerning the matters
more specifically set forth in the Order in Coun
cil]" setting up such Royal Commission, namely,
P.C. 1962-1575 dated November 1, 1962.
That Royal Commission delivered its Report to
thé Governor General and it consisted of five parts
in several volumes.
The Report dealt exhaustively with the pilotage
legislation and practice from 1867 and made many
recommendations for new legislation.
As was stated in the General Introduction to the
Report in Part I, at pages xxv-xxvi:
PLAN OF THE REPORT
The Report is presented in five Parts, each contained in a
separate volume or group ofvolumes:
Part I, a study of legislation, is a synthesis, accompanied by
fourteen appendices in a separate volume. It directs attention to
the present state of the law on pilotage (Part VI of the Canada
Shipping Act) and related legislation, reports on its adequacy
or otherwise in the light of existing conditions as disclosed by
the evidence, and recommends the basic changes that should be
made in the law to meet the present and foreseeable future
requirements of the pilotage service. The one exception made in
this general review of the law is with respect to pilotage on the
Great Lakes (Part VIA of the Canada Shipping Act) which is
dealt with in Part V of the Report. The Commission's general
recommendations concerning the basic principles which should
underly this new legislation, together with certain basic reforms
deemed desirable in the general organizational structure of
pilotage, appear at the end of Part I of the Report.
Part II (West Coast and Churchill), Part III (Atlantic
Provinces) and Part IV (St. Lawrence) contain the fact-finding
reports on the pilotage situation in each of the 25* Pilotage
Districts administered under Part VI of the Canada Shipping
Act. For purposes of reporting, these Districts have been
grouped according to their geographical area and each
individual Report follows the same pattern, namely:
(a) the legislation, including its historical background, per
taining to the establishment and administration of the
District;
(b) the Briefs submitted in connection with pilotage in the
District;
(c) the summation and analysis of the evidence on all aspects
of pilotage in the District; and
(d) the Commission's recommendations, more specifically as
they affect pilotage in that District.
Part V deals with pilotage on the Great Lakes. As mentioned
earlier, pilotage in that area is a totally distinct matter involv
ing separate legislation by Canada and the United States
designed to facilitate, by agreement between the two countries,
the operation of a joint pilotage system in the Great Lakes
Basin. For this reason, as much as because of the international
aspects, the Commission deemed it desirable to report upon the
results of its inquiry and make the recommendations in connec
tion with this matter the subject of a separate Report. This
Part, which concludes the Report, also contains some general
closing remarks and the Commission's acknowledgement of the
generous co-operation and valuable assistance received at all
times.
The Court cases cited in the Report are listed as an Appen
dix to each Part. For Part I, see Appendix XIV.
* It should be noted that the Kingston District, which was
created under Part VI C.S.A., is also known as the so-called
Great Lakes District No. 1 governed by Part VIA, C.S.A.,
together with the so-called Great Lakes Districts Nos. 2 and 3.
Parliament enacted new legislation respecting
pilotage in the Pilotage Act of 1971. Among other
things in this Act, there was one particular change
of philosophy from what obtained before the pass
ing of this Act that is relevant in these actions. It
concerns the matter of pilotage dues. When pilot-
age matters were legislated under the Canada
Shipping Act, it was possible for a ship to obtain
an exemption from compulsory pilotage in a com
pulsory pilotage area by way of paying pilotage
dues in lieu of actually receiving pilotage services
in such compulsory pilotage areas or waters.
Under the Pilotage Act, this is no longer possible.
Instead, under the Pilotage Act, it was provided
that exemption from compulsory pilotage in a
compulsory pilotage area could be obtained in only
three ways, namely:
1. by express exemption, (see, for an exemplifi
cation of this, section 9 of Pacific Pilotage
Regulations approved April 9, 1974, (SOR/74-
242) Exhibit P-1);
2. by waiver, (see, for an exemplification of this,
section 10 of the said Regulations); and
3. by a qualified master or a deck officer of a
ship obtaining and holding a "pilotage certifi
cate" within the meaning of sections 2(j) and 15
of the Act.
There were four pilotage authorities established
by the Pilotage Act. The relevant Author
ity in these actions is the "Pacific Pilotage Au
thority" and its region is "all Canadian waters in
and around the Province of British Columbia."
The public purpose in establishing the Pilotage
Authorities is prescribed in section 12 of the Act
which delineates the objects of a Pilotage Au
thority, namely:
12. The objects of an Authority are to establish, operate,
maintain and administer in the interests of safety an efficient
pilotage service within the region set out in respect of the Au
thority in the Schedule.
By section 5 of the Act:
5. An Authority is not an agent of Her Majesty.
By section 9 of the Act, an Authority is author
ized to employ pilots and to enter into certain
contracts with pilots or with a corporation set up
by pilots for the purpose of supplying pilotage
services to an Authority.
By section 14(1)(a) of the Act, a Pilotage Au
thority was authorized with the approval of the
Governor in Council to make Regulations estab
lishing compulsory pilotage areas. A "compulsory
pilotage area" is defined by section 2(e) of the Act
as meaning "... an area of water in which ships
are subject to compulsory pilotage". (As stated,
the Pacific Pilotage Authority did this by separate
Regulations on June 26, 1973, SOR/73-354, (see
Exhibit P-3).)
"Compulsory pilotage" is defined in section 2(d)
of the Act as meaning "... in respect of a ship, the
requirement that the ship be under the conduct of
a licensed pilot or the holder of a pilotage certifi
cate". A "licensed pilot" is defined in section 2(g)
of the Act as being "... a person who holds a valid
licence". A "licence" is defined in section 2(f) of
the Act as meaning "... a licence issued or
deemed to be issued by an Authority pursuant to
section 15". A "pilotage certificate" is defined in
section 2(j) of the Act as meaning "... a certifi
cate issued by an Authority pursuant to section
15".
By the scheme of the Act "compulsory pilotage"
(section 2(d) of the Act) was required in all
"compulsory pilotage area[s]" (section 2(e) of the
Act).
However, the requirement of "compulsory pilot-
age" could be dispensed with in the three ways
stated above, namely, (1) by specific exemption
(this could be done by a regulation passed by an
Authority pursuant to its enabling author
ity under section 14(1)(b) of the Act); (2) by
waiver (this could also be accomplished by a regu
lation passed by an Authority pursuant to its
enabling authority under section 14(1)(c) of the
Act); or (3) by "a regular member of the comple
ment of the ship" (see section 16 of the Act)
obtaining and holding a "pilotage certificate" (see
section 2(j) of the Act) for the relevant compulso
ry pilotage area.
Speaking generally, an Authority by the Act
had delegated to it the power to pass regulations
with the approval of the Governor in Council for
the public purpose prescribed in section 12 of the
Act within the perimeters of matters delineated in
section 14 of the Act.
In addition, an Authority was required also to
make regulations with the approval of the Gover
nor in Council "prescribing tariffs of pilotage
charges to be paid to that Authority for pilotage"
(see section 22 of the Act).
The Pilotage Act also prescribes certain statu
tory protection to Her Majesty or the Au
thority and also grants special benefits and privi
leges to pilots (and their corporation if such exist)
employed by an Authority. Section 29 of the Act
prescribes that "Her Majesty, or an Au
thority, is not liable for any damage or loss occa
sioned by the fault, neglect, want of skill or wilful
and wrongful act of a licensed pilot or the holder
of a pilotage certificate." Section 30 of the Act
prescribes that "A licensed pilot or a body corpo
rate with which an Authority contracts pursuant to
subsection (2) of section 9 for the services of
licensed pilots is not liable in damages in excess of
the amount of one thousand dollars for any
damage or loss occasioned by his fault, neglect or
want of skill." By section 32 of the Act, "The
owner, master and agent of a ship are jointly and
severally liable to pay any pilotage charges." By
section 33, "Where a ship in a compulsory pilotage
area having on board a licensed pilot leads any
ship subject to compulsory pilotage that does not
have a licensed pilot or the holder of a pilotage
certificate on board during any period in which the
ship so led cannot, by reason of the circumstances
existing at the time, be boarded, the ship so led is
liable to the Authority for all pilotage charges as if
a licensed pilot had been on board and piloted that
ship." By section 34, "Except where the Au
thority waives compulsory pilotage, when a ship
subject to compulsory pilotage proceeds through a
compulsory pilotage area not under the conduct of
a licensed pilot or the holder of a pilotage certifi
cate, the ship is liable to the Authority in which
the compulsory pilotage area is situated for all
pilotage charges as if the ship had been under the
conduct of a licensed pilot." By section 35, "No
Customs officer at any port in Canada shall grant
a clearance to a ship if he is informed by an Au
thority that pilotage charges in respect of the ship
are outstanding and unpaid."
The transitional repeal and consequential provi
sions are contained in sections 43 to 47 of the Act.
It was established in evidence that the Pacific
Pilotage Authority, as they were entitled to do,
contracted for the service of pilots in their region
with a company known as The British Columbia
Coast Pilots Limited (see Exhibit P-66). All Brit-
ish Columbia pilots were shareholders in that
Company (see Exhibit P-18). In other words, that
Company owned by all the pilots servicing the
Pacific compulsory pilotage area supplies and sup
plied all the pilots required by that Au
thority.
Three of the seven members of the Pacific Pilot-
age Authority at the material times were active
pilots and also were shareholders of The British
Columbia Coast Pilots Limited. These pilots
actively participated in the drafting of the subject
Regulations.
It was also established in evidence that in the
run of the plaintiff ship S.S. Alaska between Sand
Heads and Pine Island, it was unneccessary to
have a pilot aboard for the purpose of safety
within the meaning of section 12 of the Pilotage
Act. In other words, to be required to have a pilot
aboard would be a needless and useless expense for
the public purpose of the Act.
If the Regulations concerning compulsory pilot-
age in the region of the compulsory pilotage areas
of the Pacific Pilotage Authority under the en
abling power of section 14 of the Act were drawn
in a fashion so as to result in not exempting the
S.S. Alaska from compulsory pilotage on the said
relevant run, then the three pilot members of the
Pacific Pilotage Authority would benefit in a
pecuniary fashion (as would all other pilots in the
region) and the said public purpose of safety would
not be served.
It was established in evidence that the Regula
tions (Exhibit P-1) as drawn do not exempt the
S.S. Alaska from compulsory pilotage in the said
run (which is in part the Pacific compulsory pilot-
age area) by way of either (1) exemption or (2) by
waiver. (See sections 9 and 10 of the said Regula
tions, Exhibit P-1.)
It was also established that the Pacific Pilotage
Authority knew at all material times and especial
ly when they drafted and passed the Regulations
(Exhibit P-1) in its present wording, particularly
at sections 9 and 10, that it was absolutely improb
able that any "regular member of the complement
of" (see section 16 of the Act) the S.S. Alaska
would obtain and hold a pilotage certificate (see
section 2(j) of the Act) so as to exempt the S.S.
Alaska from compulsory pilotage on the said run.
This was so because all deck officers of the S.S.
Alaska belonged at all material times to the
Canadian Merchant Service Guild (as do all pilots
in the Pacific region); and the Canadian Merchant
Service Guild had forbidden (originally orally and
in writing and now by its constitution) any guild
members in the Pacific region to apply for pilotage
certificates under any circumstances. As a conse-
quence, for all practical purposes, at all relevant
times, in the compulsory pilotage areas under the
jurisdiction of' the Pacific Pilotage Author
ity, no pilotage certificates (section 2(j) of the
Act) were or would be issued to any qualified
person so as to enable the ship of which they or
any of them were masters or deck officers, to be
exempted by that method from compulsory pilot-
age in any part of such compulsory pilotage areas.
In other words, the action of the Canadian Mer
chant Service Guild at all material times frustrat
ed the specific intent of Parliament prescribed in
the Pilotage Act that exemption from compulsory
pilotage should be granted by the method of pilot-
age certificates issued to qualified persons in
proper cases so as to exempt certain ships from
compulsory pilotage in certain parts of compulsory
pilotage areas where pilots were not required for
the public purpose of safety.
Section 9(2)(a)(iii) of the Pacific Pilotage
Regulations (Exhibit P-1) provides an exemption
from compulsory pilotage for any ship that is
"registered in Canada" and otherwise qualified
under subparagraph (iii). Section 9 reads as
follows:
9. (1) Subject to subsection (2), every ship that is
(a) over 350 gross tons,
(b) a tug, where the combined tonnage of that tug and its
tow exceeds 350 gross tons, or
(c) a pleasure yacht of over 250 gross tons
is subject to compulsory pilotage.
(2) Subsection (1) does not apply to a ship that is
(a) registered in Canada and is
(i) owned by Her Majesty in right of Canada and is not
engaged in commercial trade,
(ii) employed in the fishing trade, or
(iii) employed in voyages in the region or between any
place in the region and any place on the West Coast of the
United States not south of San Francisco and not west of
Cook Inlet in Alaska, if the master or deck watch officer
of that ship holds a certificate of competency of the proper
grade and class issued by the Minister of Transport or
recognized by him for the purpose of subsection 130(1) of
the Canada Shipping Act and the master or deck watch
officer has been regularly employed as such on a ship
employed in voyages between the places described in this
subparagraph during the eighteen months prior to the date
that the ship is being considered for exemption under this
subsection; or
(b) registered in the United States and employed in the
fishing trade.
(3) The master or deck watch officer referred to in subpara-
graph (2)(a)(iii) shall, if required by the Authority, produce
evidence satisfactory to the Authority that he is a master or
deck watch officer as described in that subparagraph.
The purported enabling statutory authority
authorizing the Authority to pass that part of the
Regulations is section 14(1)(b) of the Pilotage Act
which reads as follows:
14. (1) An Authority may, with the approval of the Gover
nor in Council, make regulations necessary for the attainment
of its objects, including, without restricting the generality of the
foregoing regulations
(b) prescribing the ships or classes of ships that are subject
to compulsory pilotage;
Section 10 of the Pacific Pilotage Regulations
(Exhibit P-1) prescribes when a ship may obtain a
waiver of compulsory pilotage. A condition of
section 10(1)(a) is that the ship be "registered in
the United States". Section 10 reads as follows:
10. (1) The Authority may, on application therefor, waive
compulsory pilotage in respect of a ship where
(a) the ship is registered in the United States and employed
in the coastal trade, and the master or deck watch officer
thereof is duly licensed as such for that ship and has been
regularly employed as such on a ship in the coastal trade
during the eighteen months prior to the date that the ship is
being considered for the waiver under this section;
(b) the master, owner or agent thereof has complied with the
sections 12 and 13 and no licensed pilot is available to
perform pilotage duties on that ship; or
(c) the ship is in distress or engaged in rescue or salvage
operations.
(2) Compulsory pilotage is waived in respect of a ship that is
(a) entering a compulsory pilotage area for the purpose of
embarking a licensed pilot, until the ship reaches the place
arranged for embarkation; or
(b) departing from a compulsory pilotage area after it has
disembarked a licensed pilot in the course of its departure.
(3) The master or deck watch officer referred to in para
graph (1)(a) shall, if required by the Authority, produce evi
dence satisfactory to the Authority that he is a master or deck
watch officer as described in that paragraph.
(4) An application for a waiver of compulsory pilotage may
be made verbally or, when required by the Author
ity, shall be made in writing.
The purported statutory authority authorizing
the Authority to pass this part of the Regulations
is section 14(1)(c) of the Pilotage Act which reads
as follows:
14. (1) An Authority may, with the approval of the Gover
nor in Council, make regulations necessary for the attainment
of its objects, including, without restricting the generality of the
foregoing regulations
(c) prescribing the circumstances under which compulsory
pilotage may be waived;
It was submitted that in respect to these parts of
the Regulations that the inclusion in them of the
words "registered in Canada" and "registered in
the United States" made these parts beyond the
powers of the Authority because in the former case
designating the flag of a ship is not an exemplifica
tion of the enabling power to prescribe "the ships
or classes of ships that are subject to compulsory
pilotage"; and in the latter case, there is nothing in
section 14(1)(c) of the Act which permits waiver
to be tied in with the flag of the ship. In opposition
to this submission, it was urged that designating
ships of Canadian and United States registry in
these parts of the Regulations was a convenient
and brief way to designate ships or classes of ships
because the Authority knew the regulatory
requirements of the masters and deck officers of
such ships and for such ships registered in these
jurisdictions and so could exempt or waive such
ships from the requirement of compulsory pilotage
in certain designated parts of its compulsory pilot-
age areas.
This latter submission should be considered in
the light of the fact that if the words "registered in
Canada" were deleted from section 9(2) of the
said Regulations (Exhibit P-1) then the S.S.
Alaska would qualify for exemption from compul
sory pilotage on the said runs under the remaining
words of section 9(2)(a)(iii) of the said Regula
tions.
This latter submission should also be considered
in the light of the fact that prior to the approval of
the Regulations (Exhibit P-1) a draft had been
sent to the Minister of Transport, which draft did
not meet with his approval and the fact that the
Minister took the following action. The Minister
appointed a Commissioner, Mr. John J. Mahoney,
pursuant to the powers contained in section 14(5)
of the Pilotage Act and for such purposes, Mr.
Mahoney held a hearing in Vancouver and after
receiving submissions from all interested parties,
made a report to the Minister dated January 2,
1974 (Exhibit P-54). The Minister approved this
Report and ordered, as was within his power, that
that part of the draft Regulations which the Au
thority made implementing the power given them
in section 14(1)(a) and (f) of the Pilotage Act be
amended; and recommended that other sections in
such draft Regulations also be amended; both in
accordance with the said Report of Mr. Mahoney.
The Authority then re-drafted the Regulations and
passed them complying with the order of the Min
ister in respect to the part of the Regulations
which fell within the perimeters of section
14(1)(a) and (f) of the Pilotage Act but declined
to amend and pass other sections of their Regula
tions in accordance with the said recommendations
contained in the said Report of Mr. Mahoney as
approved by the Minister. The Authority also
stated that the difficulty about obtaining exemp
tion from compulsory pilotage by way of pilotage
certificates was a labour problem for the owners
and operators of ships in the Pacific region and
was of no concern of theirs. Notwithstanding this,
the Regulations as passed in the form put forward
were approved by the Governor in Council on
April 9, 1974 (see Exhibit P-1), because of time
constraints. The constraints were caused by the
delay in getting any regulations enacted in the
Pacific pilotage region. As stated, except for a
designated compulsory pilotage area (see the
Regulations Exhibit P-3 approved by the Governor
in Council on June 26, 1973) there had been no
pilotage regulations at all in the Pacific pilotage
region since February 1, 1974 (see S.C. 1973-74,
c. 1).
In this connection, the following excerpts from
the said Report of John J. Mahoney dated January
2, 1974 which are relevant to these actions read:
The S.S. "ALASKA" is a Japanese built ship owned by an
American Corporation and with financing arranged through an
agency of the United States Government. Because of its foreign
construction, however, the ship cannot be registered in the
United States and is therefore registered in Liberia. By reason
of the United States Government's financial interest in the
vessel it is required that the Master of the ship be a United
States citizen but all other deck officers and crew are Canadi-
an. The ship is engaged in a shuttle between the Ports of New
Westminster, British Columbia and Whittier, Alaska and has
been so operating for several years. The vast majority of the
cargo carried is of U.S. origin and for U.S. destination but it is
loaded at New Westminster. The ship provisions and fuels at
New Westminster and that Port is regarded as the ship's home
port. Indeed the ship is operated by Pacific Maritime Agencies,
a Canadian Corporation with Head Office at New Westmin-
ster.
It was stated that under the past arrangements the S.S.
"ALASKA" used pilots within the Fraser River and would
continue to do so in any circumstances but that all her deck
officers held Canadian certificates of competency and are
Canadian citizens. Incidentally these officers also hold Liberian
certificates of competency but I regard this fact as
irrelevant....
It was further stated by Counsel for the owners and operators
of the S.S. "ALASKA" that over and above the reluctance of the
Pilotage Authority to grant a waiver to his client's ship it was
his understanding that the Canadian Merchant Service Guild,
of which the deck officers of the ship are members, had
instructed those officers not to apply for Pilotage Certificates
even if such certificates were made available. This matter will
be examined in greater detail under the heading "Qualifica-
tions for Pilot Licences and Certificates" but is mentioned here
to illustrate fully the difficulties in which the owners and
operators of the S.S. "ALASKA" find themselves as a result of
the legislation, regulations and the attitude of the parties
concerned.
I have said in an earlier section of this report that in my
opinion the true purpose of exemption, in the sense of the
non-applicability of the compulsory feature of Section 14,
subsection (1), paragraph (b) of the Act, is to grant relief to
vessels operating continuously, or almost so, within the region.
For this reason the definition of "coasting" should be somewhat
restricted as it is in the draft Regulations. That, except with
respect to its foreign registry, would seem to take into account
the case of the S.S. "ALASKA". At the same time the concept of
exemption implies a more permanent status than that of waiver
and is therefore more in accord with relief to National ships
than to foreign ships. For this reason the Author
ity has, and in my opinion rightly so, elected to waive pilotage
for American registered coasting ships rather than to exempt
them. That being the case it would hardly be appropriate to
grant the (apparently) more permanent status of exemption to
a foreign flag ship, notwithstanding that she is manned by
Canadian officers. If therefore some relief from the pilotage
provisions are appropriate for the S.S. "ALASKA" that relief
should come under the heading of waiver rather than exemp
tion, leaving aside for the moment the question of pilotage
certificates.
In connection with this problem the first question which must
be answered is whether such waiver is deserved in the particular
case. I have concluded that in this case it is deserved and that it
is in the public interest that such waiver should be granted. The
ship is obviously contributing an economic benefit to Canada
without competing with Canadian industry and is posing no
threat to safety.
It is also clear in my mind, and from my questioning of the
various counsel, that there is no future intention on the part of
the Authority to grant a waiver to the S.S. "ALASKA". It is also
clear, though the matter will be dealt with elsewhere, that
pilotage certificates will not be available to the officers of this
ship....
As to the particular case of the "ALASKA" I see no harm
resulting from the type of amendment suggested by Mr.
Hogarth which I am assured would cover only the case of the
"ALASKA" and would not throw open the door to wholesale
waiver for foreign ships as was feared by some of the parties.
In my view, firstly prescribing the flag of a ship
as a condition respectively of exemption and of
waiver from compulsory pilotage in the said sec
tions 9 and 10 of the Regulations (Exhibit P-1) is
not an enactment by the Authority within the
perimeters of the enabling powers contained in
section 14(1)(b) and (c) of the Pilotage Act and
also such do not have as their object the public
purpose of safety which is mandatory by the provi
sions of section 12 of the Act, and the inclusion
respectively of the words "registered in Canada"
and "registered in the United States" is ultra vires
the power of the Pacific Pilotage Author
ity.
Secondly, from the whole of the evidence, it is a
finding of fact that the Pacific Pilotage Au
thority, probably as a result of representations of
the three pilot members, was motivated in includ
ing the said words prescribing the flag of the ship
in sections 9 and 10 of these Regulations so as to
make it impossible for the S.S. Alaska to be
exempted from compulsory pilotage by way of
exemption or waiver; and in being motivated to do
so, the Authority had, at the same time, the knowl
edge that for all practical purposes, the other
method of exemption contemplated in the Pilotage
Act, namely, the pilotage certificate route, was not
available to this ship. Their motivation also in
drafting and passing the Regulations in so far as
including these said words, had nothing whatever
to do with safety which was the public purpose of
the Regulations, mandatory by section 12 of the
Act.
Because of these two findings, the inclusion of
these words in sections 9 and 10 of the said
Regulations was ultra vires the power of the Au
thority.
The fact that these Regulations as passed by the
Authority were approved by the Governor in
Council does not cure such invalidity.
The Pacific Pilotage Authority in drafting the
parts of these Regulations in such ultra vires way
with the knowledge regarding the improbability of
the issuance of pilotage certificates, effectively has
frustrated the intention of Parliament when it
enacted the Pilotage Act that there should be
exemption from compulsory pilotage for ships in
circumstances where no issue of the public interest
of safety was involved.
For the purpose of this action, however, it is
only necessary to find and I so order and declare
that the legislative act whereby the words "regis-
tered in Canada" were included in section 9(2)(a)
of the Regulations (Exhibit P-1) was ultra vires
the power of the Pacific Pilotage Author
ity and that these said words be deleted.
In making this declaration of ultra vires, it is
understood that the concept of the said part of the
Regulations (Exhibit P-1) as drawn may be par
tially changed by the deletion of the words "regis-
tered in Canada". For a temporary period, this
will be the result. But the Pacific Pilotage Au
thority can cure this situation by redrafting section
9(2)(a) (and section 10(1)(a)) of the Regulations
(Exhibit P-1) and by passing and obtaining Gover
nor in Council approval so as to exercise correctly
the enabling powers given the Authority in section
14(1)(b) and (c) of the Pilotage Act and in accord
with the public purpose of safety made mandatory
by section 12 of the Act. In drafting such amend
ing part of the Regulations, the words employed
can be in such general terms so as to permit the
S.S. Alaska or any other qualified ship to obtain
an exemption from compulsory pilotage in the
relevant waters where no pilotage is necessary for
qualified ships because the public interest in safety
is satisfied.
Therefore, judgment may issue in both this
action and in action Court No. T-2093-74, declar
ing that the words "registered in Canada" in
Pacific Pilotage Regulations P.C. 1974-851
approved April 9, 1974 and registered SOR/74-
242 on April 10, 1974 are ultra vires the enabling
powers of the Pacific Pilotage Authority delegated
to it by section 14 of the Pilotage Act.
Judgment may also issue in both actions for
further declarations.
These further declarations, from a practical
point of view, should serve some useful purpose,
and are not of mere academic interest. As a conse
quence, it is proper that declarations be made in
these actions. (See Landreville v. The Queen' in
which Pratte J. adopts the reasoning of the English
Court of Appeal in Merricks v. Nott-Bower 2 ,
especially Lord Denning M.R. at page 721 and
Lord Salmon at page 724.) These declarations
may make it plain for the benefit of the Pacific
Pilotage Authority, the Canadian Merchant Ser
vice Guild and the public in general that the
intention of Parliament in passing the Pilotage Act
was as stated in section 12 of that Act, namely, for
the public purpose of safety in navigation in com
pulsory pilotage waters; and that where no public
issue of safety is involved, qualified ships should be
exempted from compulsory pilotage in one of the
said three ways prescribed in the Act by Parlia
ment; and further that any Regulations passed
pursuant to the enabling powers in section 14 of
the Pilotage Act are not to be drawn for the
exclusive private pecuniary benefit of pilots, and to
the detriment, not only of the ship owners and
operators, but also to the public at large.
The further declarations for which judgment
may issue are:
1. That the pilot members of the Pacific Pilot-
age Authority had a conflict of interest in the
true equitable sense when they participated in
drafting and passing the Regulations (Exhibit
P-1, by Order in Council P.C. 1974-851
approved April 9, 1974 and registered SOR/74-
242 on April 10, 1974) and did not purge them
selves of such conflict of interest at any relevant
time.
2. That the motivation of the Pacific Pilotage
Authority in passing the said Regulations
(Exhibit P-1) having included therein the words
prescribing the flag of a ship in sections 9 and
10 thereof as a condition of exemption or waiver
was not for the public purpose of safety within
the meaning and objects of section 12 of the
Pilotage Act, but instead the motivation was to
assist in obtaining personal pecuniary benefit for
1 [1973] F.C. 1223.
2 [1964] 1 All E.R. 717.
the pilot members of the Pacific Pilotage Au
thority and the other pilots in the region.
3. That the S.S. Alaska at all material times, in
its run from Sand Heads to Pine Island in part
of the compulsory pilotage area of the Pacific
region, with its complement of deck officers,
without a pilot aboard employed by the Pacific
Pilotage Authority, posed no threat to safety
within the meaning of section 12 of the Pilotage
Act.
4. That the Pacific Pilotage Authority in pass
ing the said Regulations, Exhibit P-1, and
having included therein respectively in sections
9(2)(a) and 10(1)(a) the words "registered in
Canada" and "registered in the United States"
has frustrated the intent of Parliament that
certain qualified ships which posed no safety
threat to navigation within the meaning of
section 12 of the Pilotage Act should be excused
from compulsory pilotage by the methods of
exemption or waiver prescribed in the Pilotage
Act.
If the Canadian Merchant Service Guild had
been a party to either of these actions and had
had an opportunity to be heard, then a declara-
tory judgment in the terms following would have
issued, viz:
That the Canadian Merchant Service Guild
by their action in forbidding any master or
deck officer in the Pacific region (all of
whom, with others, are members of the Guild)
from applying for and holding a pilotage cer
tificate within the meaning of sections 2(j)
and 15 of the Pilotage Act has frustrated the
intent of Parliament in enacting the Pilotage
Act that certain ships which posed no threat
to safety within the meaning of section 12 of
the Pilotage Act should be exempted from
compulsory pilotage by the method of causing
or arranging that their master or one or more
of their deck officers should obtain and hold
at the material time a pilotage certificate.
The claim for $10,780.54 in action Court No.
T-2093-74 is founded on Pacific Pilotage Regula
tions approved June 26, 1973 (Exhibit P-3). As
stated above, these Regulations established com
pulsory pilotage areas in the region under the
jurisdiction of the Pacific Pilotage Author
ity and no more.
The claim is for pilotage dues from February 12,
1974 to April 20, 1974 on the run of the S.S.
Alaska between Sand Heads and Pine Island. The
S.S. Alaska proceeded on that run during the
months of February, March and April of 1974
without a pilot and the allegation of the plaintiff
the Pacific Pilotage Authority is that the ship S.S.
Alaska and its owners and operators are liable for
pilotage charges in that sum by reason of proceed
ing on that run which is in part of the compulsory
pilotage area established by said Regulations,
Exhibit P-3. Paragraph 5 of the statement of claim
in this action puts the matter in this way:
5. In and about the months of February, March and April,
1974, the Defendant Ship unlawfully proceeded through com
pulsory pilotage areas established by the Pacific Pilotage Com
pulsory Pilotage Regulations (SOR/73-354, June 27, 1973;
P.C. 1973-1810, June 26, 1973) without a waiver of compulso
ry pilotage and without a licensed pilot or holder of a pilotage
certificate, whereby the Defendants became jointly and several
ly liable to pay the Plaintiff all pilotage charges as if the
Defendant Ship had been under the conduct of a licensed pilot,
to a total amount of $10,780.54, particulars of which are as
follows:
[Details of dates and charges.]
As stated, as of February 1, 1974, all the
By-laws and Regulations that were in force under
the enabling provisions of the Canada Shipping
Act had expired, so that as of that date, there were
no pilotage Regulations in force passed pursuant
to the enabling provisions of section 14 of the
Pilotage Act except the Regulations (Exhibit P-3)
establishing compulsory pilotage areas in the
Pacific region.
The plaintiff the Pacific Pilotage Author
ity submitted that notwithstanding the above, sec
tion 34 of the Pilotage Act was author
ity entitling the plaintiff to payment of these
pilotage charges. Section 34 of the Pilotage Act
reads as follows;
34. Except wheré the Authority waives compulsory pilotage,
when a ship subject to compulsory pilotage proceeds through a
compulsory pilotage area not under the conduct of a licensed
pilot or the holder of a pilotage certificate, the ship is liable to
the Authority in which the compulsory pilotage area is situated
for all pilotage charges as if the ship had been under the
conduct of a licensed pilot.
Section 16(1) of the Pilotage Act provides that:
16. (1) Except as provided in the regulations, no person
shall have the conduct of a ship within a compulsory pilotage
area unless he is a licensed pilot or a regular member of the
complement of the ship who is the holder of a pilotage certifi
cate for that area.
The "licensed" and "pilotage certificates"
referred in that section are those within the mean
ing of section 2(f) and (j) and section 15 of the
Section 34 of the Pilotage Act is directed to the
status of a ship. Section 34 is premised on there
being Regulations passed under the enabling provi
sions of section 14(1)(b) of the Act, that is to say
as to "ships or classes of ships that are subject to
compulsory pilotage", and also on Regulations
passed under section 14(1)(c) of the Act as to the
circumstances "under which compulsory pilotage
may be waived".
As a consequence, in my view, section 34 of the
Pilotage Act contemplates an Authority such as
the Pacific Pilotage Authority enacting and having
approved Regulations pursuant to section 14(1)(b)
and (c) of the Pilotage Act before the provisions of
section 34 of the Act become operative. The Pacif
ic Pilotage Authority having failed to have done so
until April 9, 1974, that part therefore of their
claim fails relating to pilotage charges up to and
inclusive of March 31, 1974. Their claim also fails
relating to their charges for April, 1974 because of
the ultra vires declaration relating to section
9(2)(a) of the Regulations approved April 9, 1974
(Exhibit P-1). Therefore, the claim is dismissed.
The counterclaim for $74,247.66 in Court action
No. T-2093-74 against the Pacific Pilotage Au
thority by the ship S.S. Alaska, Alaska Trainship
Corporation and Pacific Maritime Agencies Lim
ited is in respect to pilotage dues paid by them to
the Pacific Pilotage Authority for the period Feb-
ruary 9, 1972 to February 1, 1974.
The allegation is that there was a mutual mis
take of law under circumstances which permits
recovery back, the money having been paid when
there was a practical compulsion to do so, the
compulsion being that the ship S.S. Alaska other
wise would have been seized by the Au-
thority for non-payment of these dues. The evi
dence established that this allegation is correct and
within the principle upon which the decision was
founded in Eadie v. The Corporation of the Town
ship of Brantford 3 per Spence J. at pages 580-81:
I am of the opinion that the learned trial judge was correct in
considering the plaintiffs action, in so far as the sum of $800 is
concerned, was an action for the return of $800 paid upon the
respondent's demand which was based on a by-law subsequent
ly found to be illegal and a nullity. I am prepared to accept the
submission of counsel for the respondent that this is an action
for the repayment of moneys paid under a mistake in law.
Counsel draws a distinction between the present case and the
decision of this Court in George (Porky) Jacobs Enterprises
Ltd. v. City of Regina ([1964] S.C.R. 326). There, this Court
dealt with a demand for payment of licence fees. It turned out
that no by-law existed by which such fees as were demanded
could be exacted. It is true, therefore, that that decision is an
illustration of a mutual mistake in fact. It must be pointed out,
however, that the judgment of this Court therein was based
upon both a mistake in fact and a payment made under the
compulsion of urgent and pressing necessity. At p. 330, Hall J.
gave judgment for the Court. He said:
I am of the opinion that the payments were made under
compulsion of urgent and pressing necessity and not volun
tarily as claimed by the respondent. The law on this subject
was aptly summarized by Lord Reading C.J. in Maskell v.
Horner (1915), 84 L.J.K.B. 1752 at 1755.
That decision of this Court, therefore, in so far as it dealt with
the matter of payment under urgent and pressing necessity, is
applicable to the present case where a by-law did exist which
purported to permit the payment of such fee as was demanded
by the respondent corporation but that by-law was subsequently
found illegal and quashed.
It is, of course, a trite principle that money paid under a
mutual mistake of law cannot be recovered. That principle,
however, is subject to several well-established exceptions. I
need not deal with the various exceptions in detail. The learned
County Court Judge relied, inter alia, upon the exception that
money paid to such person as a court officer under a mistake of
law may be recovered. He was of the view that money was paid
to the respondent corporation on the insistence of its Clerk-
treasurer, whose position he equated to that of a highly-placed
civil servant in a government department or an officer of the
court, and it was highly inequitable, if not dishonest, for the
respondent corporation to insist on the retention and that,
therefore, they should be repaid. There is much to be said in
support of such a view.
I prefer to base my opinion upon the exception to the general
principle outlined by Lord Reading C.J. in Maskell v. Horner
((1915) 84 L.J.K.B. 1752; [1915] 3 K. B. 106), who said:
If a person with knowledge of the facts pays money which
he is not in law bound to pay, and in circumstances implying
that he is paying it voluntarily to close the transaction, he
cannot recover it. Such a payment is in law like a gift, and
the transaction cannot be re-opened. If a person pays money
3 [1967] S.C.R. 573.
which he is not bound to pay, under the compulsion of urgent
and pressing necessity, or of seizure, actual or threatened, of
his goods, he can recover it as money had and received. The
money is paid, not under duress in the strict sense of the
term, as that implies duress of person, but under the pressure
of seizure or detention of goods, which is analogous to that of
duress. Payment under such pressure establishes that the
payment is not made voluntarily to close the transaction....
The payment is made for the purpose of averting a threat
ened evil, and is made, not with the intention of giving up a
right, but under immediate necessity and with the intention
of preserving the right to dispute the legality of the demand.
During the period February 9, 1972 to February
1, 1974, there were no Regulations passed by
Pacific Pilotage Authority under the enabling
provisions of section 14 of the Pilotage Act except
the Regulations prescribing compulsory pilotage
areas under section 14(1)(a) of the Act, which
Regulations were only approved on June 26, 1973,
as stated (see Exhibit P-3).
As a consequence, by reason of section 43 of the
Pilotage Act, the Authority was operating so to
speak, during that period, under the old By-laws
and Regulations under the Canada Shipping Act.
As stated, under those old By-laws and Regula
tions and under the statutory scheme of the
Canada Shipping Act, there was a right to take
pilâtage dues from the owners or operators of a
ship in lieu of pilotage services actually rendered
to such a ship in a compulsory pilotage area.
In Provincial Court in Vancouver, a decision
was handed down on May 16, 1973 in the case of
Regina v. Cec [before N. Mussallem, Provincial
Judge, Provincial Court, Vancouver, B.C., judg
ment dated May 16, 1973] (see Exhibit P-41 for
the reasons). Vladimir Cec was charged that, on or
about February 18, 1972, as Master of a ship
subject to compulsory pilotage, he conducted the
ship through a compulsory pilotage area not
having received a waiver of compulsory pilotage
from the Pacific Pilotage Authority and also with
out being under the conduct of a licensed pilot or a
holder of the pilotage certificate pursuant to the
Pilotage Act. The Provincial Court held that on
that date in the District of British Columbia the
payment of dues was not compulsory and therefore
that "the B.C. pilotage area is not a compulsory
pilotage area".
Following that decision, the Regulations estab
lishing compulsory pilotage areas in the British
Columbia region under the enabling author
ity of section 14(1)(a) of the Pilotage Act was
approved on June 26, 1973 as stated (see Exhibit
P-3).
The Provincial Court in the said quoted decision
referred to the said Report of the Royal Commis
sion on Pilotage Part II, page 6 which reads as
follows:
STUDY OF BRITISH COLUMBIA PILOTAGE DISTRICT
(2) PILOTAGE AUTHORITY
(secs. 325 and 327 C.S.A.)
Since 1929 when the District was re-established, it has
always been under the direction of a one-man Pilotage Au
thority in the person of the Minister of the pertinent federal
department. The latest appointment, dated August 15, 1956
(Order in Council P.C. 1956-1264), makes the Minister of
Transport the Pilotage Authority, inter alia, of the British
Columbia Pilotage District.
(3) COMPULSORY PAYMENT OF PILOTAGE DUES
(sec. 326 C.S.A.)
The Order in Council which re-established the Pilotage
District, i.e., Order in Council P.C. 493 dated March 22, 1929,
provided that the payment of pilotage dues was not compulsory.
This Order in Council has not been rescinded and, in this
respect, has not been amended by another Order in Council
emanating from the Governor in Council pursuant to the
powers conferred upon him under sec. 326 C.S.A.
However, the payment of dues is purportedly made compul
sory by the Pilotage Authority itself through a provision in its
own District By-law which it enacted pursuant to the powers it
derives from sec. 329 C.S.A. It was first enacted April 14, 1949
(P.C. 1618-1959, Ex. 195), as an amendment to the General
By-Law and has been reproduced since (sec. 6 of the present
General By-law).
Such a By-law provision is obviously ultra vires and, there
fore, of null effect. The fact that the Governor in Council
conferred it does not alter the nature of the regulation: it
remains a District regulation over which the Governor in
Council has no control once it is sanctioned. This situation is
incompatible with the provisions of sec. 326 C.S.A. (vide Part
I, C. 8, pp. 244-246).
Therefore, the legal situation is that in the District of British
Columbia, notwithstanding the provisions of the General
By-law, the payment of dues is not compulsory.
This statement in the Royal Commission Report
namely, "Therefore, the legal situation is that in
the District of British Columbia, notwithstanding
the provisions of the General By-law, the payment
of dues is not compulsory" must now be read in
the light of the provisions of section 43 of the
Pilotage Act, especially section 43(1),(5) and (7),
namely:
43. (1) For greater certainty,
(a) every by-law made or expressed to have been made
before the coming into force of this section by a pilotage au
thority pursuant to section 319 of the Canada Shipping Act,
1934 or section 329 of the Canada Shipping Act, chapter 29
of the Revised Statutes of Canada, 1952, and
(b) every order of the Governor in Council made or
expressed to have been made before the coming into force of
this section pursuant to section 319 of the Canada Shipping
Act, 1934 or section 329 of the Canada Shipping Act,
chapter 29 of the Revised Statutes of Canada, 1952 in
confirmation of any by-law described in paragraph (a),
shall be deemed for all purposes to have had the same force and
effect as-if such by-law or such order had been made, on the
day on which it was expressed to have been made, pursuant to
an Act of the Parliament of Canada that authorized the
making thereof.
(5) Every order in council made pursuant to sections 324
and 326 of the Canada Shipping Act and in force on the
commencement of this Act continues in force for one year from
the commencement of this Act or until it is revoked, whichever
is the earlier.
(7) Every Pilotage District constituted by or under Part VI
of the Canada Shipping Act and in which, at the commence
ment of this Act, the payment of pilotage dues is compulsory,
shall be deemed to be a compulsory pilotage area established
pursuant to this Act until such time as the appropriate Au
thority makes a regulation in respect of the waters concerned
pursuant to paragraph (a) of subsection (1) of section 14.
In my view, by reason of these provisions in
section 43 of the Pilotage Act, the said statement
in the Report of the Royal Commission on Pilot-
age is no longer valid and the decision in the
Regina v. Cec (supra) case which was made after
the passing of the Pilotage Act would appear to be
incorrect in law.
In my view, from the facts of this case and by
reason of the provisions of section 43(1) and (7) of
the Pilotage Act, there was a "compulsory pilotage
area established pursuant to ... [the Pilotage
Act]". (See section 43(7) of the Act.)
By section 43(1) of the Pilotage Act, Parliament
expressly cured the invalidity referred to in the
above quoted excerpt from the Report of the Royal
Commission on Pilotage. That subsection states
that every by-law referred to in that subsection
and made pursuant to the relevant enabling provi
sions of the Canada Shipping Act "shall be
deemed for all purposes .. . to have been made,
pursuant to an Act of the Parliament of Canada
that authorized the making thereof". Section
43(5) of the Pilotage Act does not change this
situation so as to validate the said 1929 Order in
Council referred to in the said Royal Commission
Report on Pilotage (which provided that the pay
ment of pilotage dues was not compulsory) and
superseded the later said "District By-law" of the
then existing Pilotage Authority in so far as it
relates to the subject Pacific region.
Accordingly, the counterclaim is dismissed.
The Alaska Trainship Corporation, Pacific
Maritime Agencies Limited and the ship S.S.
Alaska are entitled to costs in the action Court
No. T-2278-74 and in the action Court No.
T-2093-74 on a party and party basis to be taxed
except that there shall be awarded only one coun
sel fee at trial for both actions and the counter
claim in the latter action.
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.