T-1625-97
Her Majesty the Queen (Plaintiff)
v.
J.D. Irving, Limited, a body corporate, Atlantic Towing Ltd., a body corporate, Irving Oil Company, Limited, a body corporate, the Tug Irving Maple, Her Owners and All Others Interested in Her and Universal Sales, Limited (Defendants)
and
The Administrator of the Ship-source Oil Pollution Fund and The International Oil Pollution Compensation Fund 1971 (Parties by Statute)
Indexed as: Canadav. J.D. Irving, Ltd. (T.D.)
Trial Division, Hugessen J."Montréal, December 9, 10; Ottawa, December 21, 1998.
Maritime law — Practice — Motion for summary judgment — Action to recover expenses incurred to raise barge sunk in 1970 while carrying cargo of bunker oil — Initial oil spill extensively damaging shore of Magdalen Islands — Small, intermittent oil leaks since giving rise to minor preventive measures — 1992 report recommending immediate preventive action considering progressive deterioration of barge, risk of massive oil escape — In 1996 barge raised — 1997 action alleging liability based on Canada Shipping Act, Part XVI; negligence, nuisance — (1) Act, s. 677(10) providing no action in respect of matter referred to in subsection (1) lies unless commenced (a) where pollution damage occurred, within 3 years after day pollution damage occurred, and within 6 years after occurrence causing pollution; or (b) where no pollution damage occurred, within 6 years after occurrence — S. 677(1)(a) imposing liability on ship owner for pollution damage, applied since damage occurred in 1970 — Assuming s. 677(1)(b), imposing liability on ship owner for preventive measures, applied, —occurrence— meaning event causing, likely to cause pollution damage, based on history, purpose of Part XVI, consequences of proposed interpretations — S. 677(10) barring claim as out of time — Reasonable grounds for Minister to believe pollution damage from barge likely before 1992 report on which now relies — Proper application of discoverability principle requiring time to start running from 1970 — (2) S. 681 exempting owner of Convention ship from liability for matters referred to in s. 677(1) otherwise than as provided by Part — As unclear barge still Convention ship, J.D. Irving, Limited still owner, s. 681 may not apply — Also torts of negligence, nuisance may be of continuing nature — No evidence on alleged torts, when might have occurred — Impossible to find facts necessary to release defendant from claim for liability in tort outside scope of s. 677(1) — (3) Liability under Part XVI limited to owner of vessel — While definition of owner including charterer, bare-boat charter to Atlantic Towing Ltd. terminated without notice in accordance with conditions upon sinking of vessel — Part XVI action dismissed against defendants other than J.D. Irving, Limited — (4) S. 84(1) (enacting Part XVI) expressly applies in respect of expenses incurred after coming into force — Event/occurrence taking place prior to April 24, 1989 when Part XVI not in force may produce legal effects, give rise to claim thereunder after such time — Since claim against SOPF arising entirely under statute, provision must be given full force, effect — Presumption against retroactivity displaced — (5) S. 710(1)(a) permitting claim to be filed with Administrator of Ship-source Oil Pollution Fund for expenses referred to in s. 677(1) in respect of oil pollution damage where oil pollution damage occurred within 2 years after day damage occurred, and 5 years after occurrence causing damage — Claim against SOPF time-barred — (6) S. 699 providing International Oil Pollution Compensation Fund liable where claimant unable to obtain full compensation from ship owner after occurrence — Fund's liability under Part XVI contingent upon liability under Fund Convention — Fund Convention coming into effect in 1978 — Acceded to by Canada more than 10 years later — No indication in Fund Convention intended to have retroactive effect — Presumption against retroactivity fully applicable — (7) Claim time-barred against IOPC Fund under s. 677(10).
These were motions for summary judgment brought by the defendants and each of the parties by statute. The action to recover the $42 million expended by the plaintiff to raise the Irving Whale sounds both in statute, alleging liability based upon Part XVI of the Canada Shipping Act, and in tort, alleging both negligence and nuisance.
J.D. Irving, Limited was the registered owner of the Irving Whale, a tank barge which sank on September 7, 1970, while carrying a cargo of bunker C fuel oil. The resulting oil spill contaminated approximately 32 kilometres of the shoreline of the Magdalen Islands. Small quantities of oil continued to leak intermittently from the barge over the next 26 years, although such leaks did not have any significant impact upon the nearby land masses. The condition of the barge was monitored, and some minor preventive measures were taken, such as placing bags over vent pipes to prevent the release of oil. A 1992 report recommended immediate preventive action since there was a serious risk of a massive escape of oil and the progressive deterioration of the vessel would eventually make it impossible to salvage it. In 1996 the barge was raised, and this action was commenced in 1997.
Atlantic Towing Ltd. was the bare-boat charterer of the barge; Irving Oil Company Ltd. was the owner of the cargo of oil; the tug Irving Maple was towing the barge when it sank; Universal Sales Ltd. was the registered owner of the Irving Maple; and Atlantic Towing Ltd. was also the operator and had the control of the Irving Maple at the time of the sinking.
The parties by statute were the Administrator of the Ship-source Oil Pollution Fund (hereinafter SOPF) against which a claim was made pursuant to Part XVI of the Canada Shipping Act; and the International Oil Pollution Compensation Fund 1971 (hereinafter IOPC Fund) which was notified of, and became a party to, the present action pursuant to Canada Shipping Act, Part XVI and the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (the Fund Convention).
The issues were: (1) whether the claim was time-barred by Canada Shipping Act subsection 677(10); (2) whether section 681 barred any claim in tort other than under Part XVI against J.D. Irving Ltd.; (3) whether any of the other defendants were "owners" of the barge so as to engage their statutory liability under Part XVI; (4) whether Part XVI applied retroactively to a sinking which occurred prior to the coming into force of Part XVI and prior to the creation of the Fund itself; (5) whether the claim against the SOPF was time-barred by subsection 710(1); (6) whether Part XVI created a liability for the IOPC Fund for events which occurred prior to the effective date of the Fund Convention in Canada; and (7) whether the claim against the IOPC Fund was time-barred.
Held, the action against the defendants in so far as it was based on Part XVI should be dismissed, but it should continue against all defendants in so far as it was based on torts; the claim against SOPF should be dismissed; SOPF's counterclaim should be allowed; and the claim against the IOPC Fund should be dismissed.
(1) Paragraph 677(1)(a) provides that a ship owner is liable for oil pollution damage from a ship; and paragraph 677(1)(b) provides that a ship owner is liable for reasonable expenses incurred to prevent, repair, remedy or minimize oil pollution damage from the ship. Subsection 677(10) provides that no action "in respect of a matter referred to in subsection (1)" lies unless it is commenced (a ) where pollution damage occurred, within three years after the day on which the pollution damage occurred, and within six years after the occurrence that caused that pollution damage; or (b) where no pollution damage occurred within six years after the occurrence. Subsection 677(1) deals with claims both for pollution damage and for preventive measures. As pollution damage occurred at the time of the sinking in 1970, paragraph 677(1)(a) applied. But, assuming that paragraph 677(1)(b) applied, the two uses of the word "occurrence" in immediate proximity to one another in the same subsection (subsection 677(10)) must have the same meaning. As a matter of first impression, that meaning can only be an event which causes or is likely to cause pollution damage.
However the history, background and purpose of Part XVI was examined. Part XVI was enacted to implement the Fund Convention and the International Convention on Civil Liability for Oil Pollution Damage when Canadian ship owners were having difficulty obtaining international marine insurance. Any ambiguity in subsection 677(10) is removed by a consideration of the more detailed provisions of the Conventions. In the French text "événement" is used as the equivalent of both "incident" and "occurrence", thus indicating that the two words were intended to have the same meaning. Furthermore, the fact that both the Canadian and the international regimes provide recourse to funds which may have to be distributed pro rata in the event that there is not enough to go around provides a convincing rationale for the relatively short prescriptive periods: the administrators of the two funds could not prudently make any payments to claimants if there was any possibility of further claims exceeding the amounts available for distribution; they would have to wait until such time as they could be certain that no such claims could be made. The same interpretation of "occurrence" results from an examination of the general context of section 677 as a whole and the whole of Part XVI.
The above interpretation would result in the plaintiff's action being time-barred before it had even arisen, but the plaintiff's right of action was wholly statutory so that the presumption against statutory limitation periods was somewhat less persuasive. The plaintiff could not invoke the equities of the situation when it had only lost a right of action which it did not have at the time the sinking occurred, which it did not attempt to exercise while Part XX was in force, and which it did not exercise under Part XVI until long after the expiry of the period prescribed.
If the plaintiff's suggestion that the time should start to run from the date that the Minister had, or should have had, reasonable grounds to believe that the wreck was likely to cause pollution damage was accepted, it would be possible to file claims for the cost and expenses of preventive measures at virtually any time. One of the purposes of a limitation period is to bring certainty to the law, especially where pro rata payments out of the two funds would depend upon the administrators knowing that the list of claimants was closed. Such an interpretation would also adversely impact upon the ability of ship owners to obtain international marine insurance coverage, which was one of the reasons underlying Canada's decision to abandon the earlier regime of liability and compensation contained in Part XX. The claim was time-barred under subsection 677(10).
Regardless, the Minister had reasonable grounds to believe that pollution damage from the barge was likely before December 1992. If there was a separate prescriptive period for each separate preventive measure which the Minister in his sole discretion decides to take, there would be no limitation period at all. That cannot be the law. The proper application of the discoverability principle required the time to start running from 1970 when the government learned that the wreck was lying on the seabed and had discharged, was discharging and was likely to discharge oil.
(2) Section 681 provides that the owner of a Convention ship is not liable for the matters referred to in subsection 677(1) otherwise than as provided by this Part. A "Convention ship" is defined as a sea-going ship carrying various oils as cargo. "Owner" of a Convention ship is defined as the person registered as the owner of the ship. At the time of its sinking, the Irving Whale was a Convention ship and the owner was the defendant J.D. Irving, Limited. But, there was some doubt as to whether the Irving Whale continued to be a Convention ship and whether J.D. Irving, Limited can continue to benefit from section 681. And, the torts of negligence and nuisance alleged against the defendants may both be of a continuing nature. There was no evidence on the alleged torts and when they might have occurred. Therefore, it was not possible to find the facts necessary to release J.D. Irving, Limited from any claim for liability in tort which is outside the scope of subsection 677(1).
(3) Liability under Part XVI is limited to the owner of a vessel. While the definition of "owner" would include a charterer, the bare-boat charter to Atlantic Towing Ltd. terminated without notice in accordance with its conditions upon the sinking of the vessel. There was no evidence that any defendant other than J.D. Irving, Limited could have been owner of the barge. The Part XVI action should be dismissed against the defendants other than J.D. Irving Limited.
(4) Section 84, which enacted Part XVI, expressly applies in respect of expenses incurred after it came into force. Parliament clearly intended that Part XVI should apply to claims for expenses incurred after the date of its coming into force "regardless of the time of the occurrence that gave rise to the damage, loss, costs or expenses". An event (occurrence) which took place prior to April 24, 1989, when Part XVI was not in force may nonetheless produce legal effects and give rise to a claim thereunder after such time. Since the claim against the SOPF arose entirely under the statute and was not dependent upon any external factor such as a treaty, the provision must be given its full force and effect; the presumption against retroactivity was displaced.
(5) Paragraph 710(1)(a) permits a person who has incurred expenses referred to in subsection 677(1) in respect of oil pollution damage to file a claim with the Administrator of the SOPF for such expenses where the oil pollution damage occurred within two years after the day on which that damage occurred, and five years after the occurrence that caused that damage. Apart from the time periods involved, the relevant words in subsection 710(1) are identical to the corresponding words in subsection 677(1). For the reasons applicable to subsection 677(1), the claim against the SOPF was time-barred.
(6) Section 699 provides that the IOPC Fund is liable where a claimant has been unable to obtain full compensation from the ship owner where there has been an occurrence. It is clear from section 699 that the liability of the IOPC Fund under Part XVI is contingent upon it being liable under the Fund Convention. The Fund Convention came into effect on October 16, 1978 and was acceded to by Canada more than 10 years later, coming into force on the ninetieth day after deposit of the appropriate instrument. There was no indication in the Fund Convention that it was intended to have retroactive effect. The presumption against retroactivity was fully applied.
(7) The claim was time-barred against the IOPC Fund under subsection 677(10).
statutes and regulations judicially considered
An Act to amend the Canada Shipping Act and to amend the Arctic Waters Pollution Prevention Act and the Oil and Gas Production and Conservation Act in consequence thereof, R.S.C., 1985 (3rd Supp.), c. 6, s. 88.
Canada Shipping Act, R.S.C., 1985, c. S-9, ss. 673 (as am. by R.S.C., 1985 (3rd Supp.), c. 6, s. 84; S.C. 1993, c. 36, s. 12), 677 (as am. by R.S.C., 1985 (3rd Supp.), c. 6, s. 84; S.C. 1993, c. 36, s. 15; 1996, c. 31, s. 104), 678 (as am. by S.C. 1993, c. 36, s. 16), 679 (as am. by R.S.C., 1985 (3rd Supp.), c. 6, s. 84), 681 (as am. idem), 699 (as am. idem), 710 (as am. idem; S.C. 1993, c. 36, s. 18).
International Convention on Civil Liability for Oil Pollution Damage, November 29, 1969, [1989] Can. T.S. No. 46.
International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, December 18, 1971, [1989] Can. T.S. No. 47.
appearances:
M. Robert Jetté, Frederick A. Welsford, and Jonathan Westphal for plaintiff.
L. Yves Fortier, Q.C., Johanne Gauthier and Frédéric Bachand for defendants.
David F. McEwen for party by statute Administrator of Ship-Source Oil Pollution Fund.
John G. O'Connor for party by statute International Oil Pollution Compensation Fund 1971.
solicitors of record:
Deputy Attorney General of Canada for plaintiff.
Ogilvy Renault, Montréal, for defendants.
McEwen, Schmitt & Co., Vancouver, for party by statute Administrator of Ship-Source Oil Pollution Fund.
Langlois, Gaudreau, Québec, for party by statute International Oil Pollution Compensation Fund 1971.
The following are the reasons for order rendered in English by
Hugessen J.:
INTRODUCTION
These reasons dispose of three motions for summary judgment brought respectively by the defendants and each of the defendants by statute. The action seeks the recovery of an amount in excess of $42,000,000 said to be the expense incurred by the plaintiff in the raising of the barge Irving Whale. The action sounds both in statute, alleging liability based upon Part XVI of the Canada Shipping Act,1 and in tort, alleging both negligence and nuisance. The motions are concerned primarily with the statutory liability although, as will be seen, there may be some impact upon the question of tort liability as well.
THE PARTIES
The plaintiff is the Government of Canada.
The named defendants all have a connection with the barge Irving Whale as follows:
(a) J.D. Irving Ltd. was the registered owner of the Irving Whale at the time of her sinking;
(b) Atlantic Towing Ltd. was the bare-boat charterer of the barge at the same time;
(c) Irving Oil Company Ltd. was the owner of the cargo of oil aboard the barge;
(d) the tug Irving Maple was towing the barge at the time that she sank;
(e) Universal Sales Ltd. was the registered owner of the Irving Maple at the time; and
(f) Atlantic Towing Ltd. . was also the operator and had the control of the tug Irving Maple at the time of the sinking.
The parties (defendants) by statute are:
(a) the Administrator of the Ship-source Oil Pollution Fund (hereinafter SOPF) against whom a claim has been made pursuant to Part XVI of the Canada Shipping Act; and
(b) the International Oil Pollution Compensation Fund 1971 (hereinafter IOPC Fund) which has been notified of and has become a party to the present action pursuant both to the terms of Part XVI and of the 1971 International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, December 18, 1971 [[1989] Can. T.S. No. 47] (hereinafter the Fund Convention).
THE FACTS
While the parties are in some disagreement as to the relevance of certain facts, the following facts have been established either by admissions in the pleadings or by uncontradicted evidence:
(a) the Irving Whale was a tank barge having an overall length of 270 feet and a registered net tonnage of 2,089.8 tons. She was registered at the port of St. John in accordance with the terms of the Canada Shipping Act;
(b) the registered owner of the barge was J.D. Irving Ltd.;
(c) on September 7, 1970, the Irving Whale sank while in tow of the tug Irving Maple on a voyage from Halifax, Nova Scotia to Bathurst, New Brunswick. She came to rest on the seabed in approximately 220 feet of water;
(d) according to her bill of lading, the barge carried, at the time of her sinking, a cargo of 4,297 long tons of bunker C fuel oil;
(e) at the time of and immediately following the sinking, a quantity of oil was discharged from the barge which contaminated approximately 32 kilometres of the shoreline of the Magdalen Islands. The Government of Canada undertook operations which lasted until November, 1970 to clean the shoreline where it had been fouled by oil;
(f) small quantities of oil continued to leak intermittently from the barge over the next 26 years although there is no evidence that any of such leaks were of sufficient importance to have any significant impact upon the nearby land masses of the Magdalen Islands and Prince Edward Island;
(g) the condition of the barge was kept under surveillance by the Government. An early proposal to raise the barge was abandoned because of concerns over the propriety of the bidding process. In the years that followed, the authorities did take some preventive measures notably by the placing of bags over vent pipes to prevent the release of oil;
(h) in 1992, the Government commissioned a report on the feasibility of salvaging the barge. That report, submitted December 1, 1992, concluded that the risk of a massive and uncontrolled discharge of oil from the barge was serious and that the progressive deterioration of the vessel would, in due course, make it impossible to salvage her. Immediate preventive action was recommended;
(i) on March 18, 1994, the Minister of Transport concluded that the barge represented a long-term pollution risk and that the likely discharge of its cargo into the waters of the Gulf would have catastrophic negative impact upon the fishing and tourism industries in the region;
(j) on July 30, 1996, the Irving Whale was raised from the seabed successfully and was transported to the port of Halifax. She was found to contain 3575,871 long tons of crude oil;
(k) this action was brought on July 29, 1997.
THE LEGISLATION
Part XVI is too long to be reproduced conveniently here in its entirety. However, the following are the most relevant sections for the purposes of this determination [sections 673 (as am. by R.S.C., 1985 (3rd) Supp.), c. 6, s. 84; S.C. 1993, c. 36, s. 12), 677 (as am. by R.S.C., (3rd Supp.), c. 6, s. 84; S.C. 1993, c. 36, s. 15; 1996, c. 31, s. 104), 678 (as am. by R.S.C., 1985 (3rd Supp., c. 6, s. 84; S.C. 1993, c. 36, s. 16), 679 (as am. by R.S.C., 1985 (3rd Supp.), c. 6, s. 84), 681 (as am. idem), 699 (as am. idem.), 710 (as am. idem; S.C. 1993, c. 36, s. 18)]:
673. In this Part,
"Administrator" means the Administrator of the Ship-source Oil Pollution Fund appointed pursuant to section 704;
"Civil Liability Convention" means the International Convention on Civil Liability for Oil Pollution Damage, concluded in Brussels on November 29, 1969, as amended by any protocol that is in force for Canada;
"Convention ship" means a sea-going ship, wherever registered, carrying, in bulk as cargo, crude oil, fuel oil, heavy diesel oil, lubricating oil, whale oil or any other persistent oil;
"discharge" of a pollutant from a ship means any discharge of a pollutant from a ship that results, directly or indirectly, in the pollutant entering the water and includes, without limiting the generality of the foregoing, spilling, leaking, pumping, pouring, emitting, emptying, throwing and dumping;
"Fund Convention" means the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, concluded in Brussels on December 18, 1971, and the Protocol concluded in London on November 19, 1976;
"guarantor" means a guarantor under a contract of liability insurance or other similar security relating to a ship owner's liability under section 677;
"in bulk" means in a hold or tank that is part of the structure of the ship, without any intermediate form of containment;
"International Fund" means the International Oil Pollution Compensation Fund established by the Fund Convention;
"oil", except in sections 716 to 721, means oil of any kind or in any form and, without limiting the generality of the foregoing, includes petroleum, fuel oil, sludge, oil refuse and oil mixed with wastes but does not include dredged spoil;
"oil pollution damage" means, in relation to any ship, loss or damage outside the ship caused by contamination resulting from the discharge of oil from that ship;
"owner" of a ship means
(a) in relation to a Convention ship, the person registered as the owner of the ship or, in the absence of registration, the person owning the ship, or
(b) in relation to any other ship, the person having for the time being, either by law or by contract, the rights of the owner of the ship as regards the possession and use thereof;
"pollutant" means
(a) any substance that, if added to any waters, would degrade or alter or form part of a process of degradation or alteration of the quality of those waters to an extent that is detrimental to their use by man or by any animal, fish or plant that is useful to man, and
(b) any water that contains a substance in such a quantity or concentration, or that has been so treated, processed or changed, by heat or other means, from a natural state that it would, if added to any waters, degrade or alter or form part of a process of degradation or alteration of the quality of those waters to an extent that is detrimental to their use by man or by any animal, fish or plant that is useful to man,
and, without limiting the generality of the foregoing, includes oil and any substance or any substance of a class of substances that is prescribed for the purposes of Part XV to be a pollutant;
"pollution damage" means, in relation to any ship, loss or damage outside the ship caused by contamination resulting from the discharge of a pollutant from that ship;
"prescribed" means prescribed by regulation;
"ship" includes any description of vessel, boat or craft designed, used or capable of being used solely or partly for marine navigation, without regard to method or lack of propulsion;
"Ship-source Oil Pollution Fund" means the Ship-source Oil Pollution Fund established by section 702;
"tonne" means 1 000 kg.
. . .
677. (1) Subject to this Part, the owner of a ship is liable
(a) for oil pollution damage from the ship;
(b) for costs and expenses incurred by
(i) the Minister of Fisheries and Oceans,
(ii) a response organization to whom a certificate of designation has been issued pursuant to subsection 660.4(1),
(iii) any other person in Canada, or
(iv) any person in a state, other than Canada, that is a party to the Civil Liability Convention,
in respect of measures taken to prevent, repair, remedy or minimize oil pollution damage from the ship, including measures taken in anticipation of a discharge of oil from the ship, to the extent that the measures taken and the costs and expenses are reasonable, and for any loss or damage caused by such measures; and
(c) for costs and expenses incurred
(i) by the Minister of Fisheries and Oceans in respect of measures taken pursuant to paragraph 678(1)(a) in respect of any monitoring, or in relation to the direction of the taking of measures or their prohibition, pursuant to paragraph 678(1)(b) or (c), or
(ii) by any other person in respect of measures the person was directed to take, or prohibited from taking, pursuant to paragraph 678(1)(b) or (c),
to the extent that the measures taken and the costs and expenses are reasonable, and for any loss or damage caused by such measures.
(3) The owner's liability under subsection (1) does not depend on proof of fault or negligence, but the owner is not liable under that subsection if he establishes that the occurrence
(a) resulted from an act of war, hostilities, civil war or insurrection or from a natural phenomenon of an exceptional, inevitable and irresistible character;
(b) was wholly caused by an act or omission of a third party with intent to cause damage; or
(c) was wholly caused by the negligence or other wrongful act of any government or other authority responsible for the maintenance of lights or other navigational aids, in the exercise of that function.
(4) Where the owner of a ship who is liable under subsection (1) establishes that the occurrence resulted wholly or partially
(a) from an act or omission done by the person who suffered the damage with intent to cause damage, or
(b) from the negligence of that person,
the liability of the owner to that person is reduced or nullified in proportion to the degree to which the occurrence resulted from the factors mentioned in paragraphs (a) and (b).
(5) Nothing in this Part shall be construed as limiting or restricting any right of recourse that the owner of a ship who is liable under subsection (1) may have against any other person.
(6) Costs and expenses incurred by the owner of a ship in respect of measures voluntarily taken by him to prevent, repair, remedy or minimize oil pollution damage from the ship, including measures taken in anticipation of a discharge of oil from the ship, to the extent that the measures taken and the costs and expenses are reasonable, rank equally with other claims against any security given by that ship owner in respect of his liability under this section.
(7) Subject to sections 679 and 683, all claims pursuant to this Part may be sued for and recovered in the Admiralty Court.
(8) Subject to subsection (9), the jurisdiction conferred on the Admiralty Court by subsection (7) may be exercised in rem against the ship that is the subject of the claim, or against any proceeds of sale thereof that have been paid into court.
(9) No action in rem may be commenced in Canada against
(a) any warship, coast guard ship or police vessel;
(b) any ship owned or operated by Canada or a province, or any cargo carried thereon, where such ship is engaged on government service; or
(c) any ship owned or operated by a state other than Canada, or any cargo carried thereon, with respect to any claim where, at the time the claim arose or the action is commenced, such ship was being used exclusively for non-commercial governmental purposes.
(10) No action in respect of a matter referred to in subsection (1) lies unless it is commenced
(a) where pollution damage occurred, within three years after the day on which the pollution damage occurred and within six years after the occurrence that caused that pollution damage; or
(b) where no pollution damage occurred, within six years after the occurrence.
(11) Where there is an occurrence that gives rise to liability of an owner of a ship under subsection (1), the Administrator may, either before or after receiving a claim pursuant to section 710, commence an action in rem against the ship that is the subject of the claim, or against any proceeds of sale thereof that have been paid into court, and in any such action the Administrator shall be entitled to claim security in an amount not less than the shipowner's maximum aggregate liability calculated in accordance with section 679.
(12) The Administrator may only continue the action referred to in subsection (11) if the Administrator has become subrogated to the rights of the claimant under subsection 711(3).
678. (1) Where the Minister believes on reasonable grounds that a ship has discharged, is discharging or is likely to discharge a pollutant, the Minister may
(a) take such measures as the Minister deems necessary to repair, remedy, minimize or prevent pollution damage from that ship, including the removal or destruction of the ship and its contents, and may sell or otherwise dispose of the ship and its contents;
(b) monitor the measures taken by any person to repair, remedy, minimize or prevent pollution damage from the ship; or
(c) where the Minister considers it necessary to do so, direct any person to take measures referred to in paragraph (b), or prohibit any person from taking such measures.
(2) The proceeds from any sale or other disposal of a ship or its contents pursuant to paragraph (1)(a) shall be applied towards meeting the costs and expenses incurred in taking the measures under that paragraph, and any surplus shall be paid to the owner of that ship or to the owner of its contents, as the case may be.
. . .
679. (1) Where an occurrence giving rise to liability of an owner of a ship under section 677 occurs without actual fault or privity of the owner, the owner's maximum aggregate liability under that section in respect of that occurrence is the lesser of
(a) one hundred and thirty-three Special Drawing Rights for each
(i) ton of the ship's tonnage, where paragraph (2)(a) applies, or
(ii) tonne of the Convention ship's tonnage, where paragraph (2)(b) applies,
(b) fourteen million Special Drawing Rights,
and section 575 does not apply in respect of the owner's liability for the matters referred to in subsection 677(1).
(2) For the purposes of subparagraphs (1)(a)(i) and (ii),
(a) a ship's tonnage is the aggregate of
(i) its net tonnage, and
(ii) the amount deducted from its gross tonnage in respect of engine room space for the purpose of ascertaining the net tonnage; or
(b) where a Convention ship's tonnage cannot be measured in accordance with paragraph (a), it shall be deemed to be 39.368 per cent of the weight in tonnes of oil that the Convention ship is capable of carrying.
(3) In subsection (2), "net tonnage" means register tonnage.
(4) In paragraphs (1)(a) and (b), "Special Drawing Rights" means special drawing rights issued by the International Monetary Fund.
. . .
681. (1) The owner of a Convention ship is not liable for the matters referred to in subsection 677(1) otherwise than as provided by this Part.
(2) No servant or agent of the owner of a Convention ship nor any person performing salvage operations with the agreement of the owner shall be liable for the matters referred to in subsection 677(1).
. . .
699. Where there is an occurrence involving a Convention ship, to the extent that a claimant has been unable to obtain full compensation under this Part from the ship owner or his guarantor, the International Fund is, subject to the provisions of the Fund Convention, liable in accordance with Article 4 of that Convention.
. . .
710. (1) In addition to any right against the Ship-source Oil Pollution Fund under section 709, a person, other than one described in subparagraphs 677(1)(b)(ii) and (iv), who has suffered loss or damage or incurred costs or expenses referred to in subsection 677(1) in respect of actual or anticipated oil pollution damage may file a claim with the Administrator for the loss, damage, costs or expenses
(a) where oil pollution damage occurred, within two years after the day on which that damage occurred and five years after the occurrence that caused that damage, or
(b) where no oil pollution damage occurred, within one year after the occurrence,
subject to the fixing of a shorter period by the Admiralty Court under paragraph 715(a).
(2) On receipt of a claim under subsection (1), the Administrator shall forthwith
(a) investigate and assess the claim; and
(b) make an offer of compensation to the claimant for whatever portion of the claim the Administrator finds to be established.
(3) For the purpose of investigating and assessing a claim pursuant to subsection (2), the Administrator has all the powers of a commissioner under Part I of the Inquiries Act.
(4) In investigating and assessing a claim pursuant to subsection (2), the Administrator shall concern himself only with
(a) whether the claim is for matters covered by subsection (1); and
(b) whether the claim resulted wholly or partially
(i) from an act or omission done by the claimant with intent to cause damage, or
(ii) from the negligence of the claimant.
(5) A claimant is not required to satisfy the Administrator that the occurrence was caused by a ship, but the Administrator shall dismiss a claim under subsection (1) if satisfied on the evidence that the occurrence was not caused by a ship.
(6) Where the Administrator is satisfied that a claim under subsection (1) resulted wholly or partially
(a) from an act or omission done by the claimant with intent to cause damage, or
(b) from the negligence of the claimant,
the Administrator shall nullify or reduce any amount that he would have otherwise assessed under subsection (2), in proportion to the degree to which he finds that the claim resulted from the factors mentioned in paragraphs (a) and (b).
Part XVI was enacted by section 84 of the enacting statute.2 That statute was proclaimed in force on April 24, 1989. Section 88 reads:
88. (1) Section 84 applies in respect of damage or loss occurring or costs or expenses incurred after the coming into force of that section, regardless of the time of the occurrence that gave rise to the damage, loss, costs or expenses.
(2) Any claim made against the Ship-source Oil Pollution Fund after the coming into force of section 84 in respect of damage or loss that occurred, or costs or expenses that were incurred, before the coming into force of that section shall be dealt with in accordance with the provisions of Part XV of the Canada Shipping Act as it read immediately before the coming into force of that section.
(3) All rights and obligations of the Maritime Pollution Claims Fund in existence immediately before the coming into force of section 84 shall, on the coming into force of that section, become rights or obligations of the Ship-source Oil Pollution Fund, and any such right or obligation or any claim pending against the Maritime Pollution Claims Fund may be enforced by or against the Ship-source Oil Pollution Fund in accordance with the provisions of Part XV of the Canada Shipping Act as it read immediately before the coming into force of that section.
THE ISSUES
The following issues fall to be decided on these motions:
(1) by the defendants:
(a) whether the plaintiff's claim is time-barred by the terms of subsection 677(10);
(b) whether the terms of section 681 serve to bar any claim in tort other than under Part XVI against the defendant J.D. Irving Ltd.;
(c) whether there is any evidence that any of the other defendants were "owners" of the barge so as to engage their statutory liability under Part XVI;
(2) for the defendant by statute SOPF:
(a) whether the terms of Part XVI have any retroactive application to a sinking which occurred prior to the coming into force of Part XVI and prior to the creation of the fund itself;
(b) whether the claim against the SOPF is time-barred by the terms of subsection 710(1);
(3) for the defendant by statute IOPC Fund:
(a) whether Part XVI creates liability for the IOPC Fund for events which occurred prior to the effective date of the Fund Convention in Canada;
(b) whether the claim against the IOPC Fund is time-barred
THE DEFENDANTS' MOTION
Is the claim time-barred?
The defendants' position is brutally simple. Subsection 677(10) provides two different prescriptive periods. The first, set out in paragraph (a), applies where pollution damage has occurred; the time limitation is double being three years from the date of the damage and six years from the occurrence that caused such damage. Since pollution damage unquestionably occurred in this case (the fouling of the beaches on the Magdalen Islands and the plaintiff's clean-up thereof), all claims were statute-barred at the latest by November 1973. In any event, and if it should be found that paragraph 677(10)(a) was, for some reason inapplicable, paragraph (b) enacts a six-year prescription which tolls from the date of "the occurrence". Manifestly, the word "occurrence" in paragraph 677(10)(b ) has the same meaning as it does in paragraph (a) and the operative date is that of the event which caused or could have caused pollution damage to occur, namely the sinking.
To this, the plaintiff has several replies. First, it argues that paragraph 677(10)(a) should only apply where the claim is actually for pollution damage; since the claim here is for purely preventive measures, the operative limitation period should be sought in paragraph (b). Second, the plaintiff invokes through every stage of its argument, the well-established jurisprudential rule that limitation periods should be strictly construed and that courts should, in particular, be extremely reluctant to cut off a plaintiff's cause of action before it arises and where the circumstances are such that the recourse could not have been exercised timely; this is such a case since the plaintiff's right of action under subsection 677(1) did not even exist at the time at which the defendants argue that it had become prescribed. A more particular application of the general rule of strict interpretation of limitation periods is sometimes known as the "discoverability" rule: prescription will not toll against a claimant until such time as he or she knew or should have known that a claim existed. The plaintiff accordingly argues that "the occurrence" which marks the starting point of the prescription enacted by paragraph 677(10)(b ) must be interpreted in light of these rules. The presumption relied upon by defendants to the effect that the Legislature is presumed to make consistent use of language is both weak and rebuttable. Particularly, this is so where the word used is one which is capable of assuming a wide variety of meanings; "occurrence" is such a word. Where the claim is for purely preventive measures, the word should mean the taking of such measures or, at the earliest, the time when the plaintiff first had reasonable grounds for believing that pollution damage would be likely if such measures were not taken. On the facts of the present case, it is said that the earliest possible date would be December 1992 and that, accordingly, the six-year period enacted by paragraph 677(10)(b ) had not expired at the time the action was brought.
As a matter of first impression, there can be no doubt in my mind that the meaning suggested by the defendants for subsection 677(10) is correct. Pollution damage did occur at the time of the sinking in 1970. Subsection (10) does not speak of a claim for pollution damage but rather of an "action in respect of a matter referred to in subsection (1)". Subsection (1) deals with claims both for pollution damage and for preventive measures. Paragraph (a ) applies. However, even assuming that paragraph (b) was to apply, the two uses of the word "occurrence" in immediate proximity to one another in the same subsection (indeed in the same sentence), must have the same meaning. That meaning can only be an event which causes or is likely to cause pollution damage. It would have been grammatically and logically incorrect to precede the second use of the word by "such" or "that" since that would have confused the cases of occurrences which caused pollution damage with those that were merely likely to do so.
It is not, however, enough to limit oneself to the apparent meaning of subsection 677(10) itself. I accept the plaintiff's position that prescriptive provisions must be strictly interpreted. I also share unreservedly the reluctance frequently expressed by courts to strangle an action before birth by finding it to be prescribed before the cause of action even arose or was known to the plaintiff. Accordingly, I think it is necessary to look to the broader context of Part XVI, to examine its history, background and purpose, to look to the consequences of the various proposed interpretations in the light of the policy underlying the provisions in question, and to examine such interpretative aids as are permissible and available.
I start with the history. Prior to June 1971, Canada, like most other nations of the world, had no effective legislative provision with respect to liability and compensation for ship-source oil pollution. On the latter date, new provisions, Part XX (later renumbered Part XV and now repealed) of the Canada Shipping Act, were proclaimed into force. It is not necessary to deal with those provisions in any detail other than to note that they represented an important policy departure by Canada from what has been decided in the 1969 International Convention on Civil Liability for Oil Pollution Damage, November 29, 1969 [[1989] Can. T.S. No. 46] (the Civil Liability Convention) and the 1971 Fund Convention. Because of that difference in policy, Canada did not adhere to either of the Conventions and went its own way for a period of some 18 years. By the late 1980s, however, it had become apparent that the Canadian regime, despite and perhaps because of being considerably more rigorous in its requirements of both ship owners and shippers, was encountering difficulties, not the least of which was the impossibility for owners of ships and cargos of obtaining coverage in the international marine insurance market. Canada, as a maritime and trading nation, could not remain out of step with the international community. Accordingly, in 1989, it adhered to both Conventions and implemented them on April 24, 1989. Part XVI is the implementing legislation.
Part XVI, however, represents more than a simple adoption by Canada of the two Conventions. The Canadian regime for civil liability and compensation, while compatible with the international regime, goes further in a number of important respects. It extends to all ships not merely tankers carrying oil in bulk (convention ships); the definition of oil is wider. Most importantly, the SOPF was established providing a second layer of back-up resource where recourse to the owners' insurers and to the IOPC Fund proved inadequate or was not available.
For our purposes, the most important provisions of the two Conventions for comparison with the provisions of Part XVI are as follows:
Civil Liability Convention
Article I
For the purpose of this Convention:
. . .
3. "Owner" means the person or persons registered as the owner of the ship or, in the absence of registration, the person or persons owning the ship. However in the case of a ship owned by a State and operated by a company which in that State is registered as the ship's operator, "owner" shall mean such company.
. . .
5. "Oil" means any persistent oil such as crude oil, fuel oil, heavy diesel oil, lubricating oil and whale oil, whether carried on board a ship as cargo or in the bunkers of such a ship.
6. "Pollution damage" means loss or damage caused outside the ship carrying oil by contamination resulting from the escape or discharge of oil from the ship, wherever such escape or discharge may occur, and includes the costs of preventive measures and further loss or damage caused by preventive measures.
7. "Preventive measures" means any reasonable measures taken by any person after an incident has occurred to prevent or minimize pollution damage.
8. "Incident" means any occurrence, or series of occurrences having the same origin, which causes pollution damage.
. . .
Article III
1. Except as provided in paragraphs 2 and 3 of this Article, the owner of a ship at the time of an incident, or where the incident consist of a series of occurrences at the time of the first such occurrence, shall be liable for any pollution damage caused by oil which has escaped or been discharged from the ship as a result of the incident.
2. No liability for pollution damage shall attach to the owner if he proves that the damage:
(a) resulted from an act of war, hostilities, civil war, insurrection or a natural phenomenon of an exceptional, inevitable and irresistible character, or
(b) was wholly caused by an act or omission done with intent to cause damage by a third party, or
(c) was wholly caused by the negligence or other wrongful act of any Government or other authority responsible for the maintenance of lights or other navigational aids in the exercise of that function.
3. If the owner proves that the pollution damage resulted wholly or partially either from an act or omission done with intent to cause damage by the person who suffered the damage or from the negligence of that person, the owner may be exonerated wholly or partially from his liability to such person.
4. No claim for compensation for pollution damage shall be made against the owner otherwise than in accordance with this Convention. No claim for pollution damage under this Convention or otherwise may be made against the servants or agents of the owner.
5. Nothing in this Convention shall prejudice any right of recourse of the owner against third parties.
. . .
Article VIII
Rights of compensation under this Convention shall be extinguished unless an action is brought thereunder within three years from the date when the damage occurred. However, in no case shall an action be brought after six years from the date of the incident which caused the damage. Where this incident consists of a series of occurrences, the six years' period shall run from the date of the first such occurrence.
Fund Convention
Article 1
For the purposes of this Convention,
. . .
2. "Ship", "Person", "Owner", "Oil", "Pollution Damage", "Preventive Measures", "Incident" and "Organization", have the same meaning as Article I of the Liability Convention, provided however that, for the purposes of these terms, "oil" shall be confined to persistent hydrocarbon mineral oils.
. . .
9. For the purposes of ascertaining the date of an incident where that incident consists of a series of occurrences, the incident shall be treated as having occurred on the date of the first such occurrence.
. . .
Article 6
1. Rights to compensation under Article 4 or indemnification under Article 5 shall be extinguished unless an action is brought thereunder or a notification has been made pursuant to Article 7, paragraph 6, within three years from the date when the damage occurred. However, in no case shall an action be brought after six years from the date of the incident which caused the damage.
2. Notwithstanding paragraph 1, the right of the owner or his guarantor to seek indemnification from the Fund pursuant to Article 5, paragraph 1, shall in no case be extinguished before the expiry of a period of six months as from the date on which the owner or his guarantor acquired knowledge of the bringing of an action against him under the Liability Convention.
I can see nothing in these provisions which would alter the view which I have provisionally taken with regard to the correct interpretation of subsection 677(10). On the contrary, it seems to me that, to the extent that there can be said to be any ambiguity in that provision, such ambiguity is removed by a consideration of the more detailed provisions of the Conventions. In particular, a comparison of the definition of the word "incident/événement" with the term "occurrence/événement" makes it clear beyond peradventure what was intended by the latter. The same word is used in both French texts, and it is inconceivable that it was intended to give it a different meaning in English only. Furthermore, the fact that both regimes, Canadian and international, provide recourse to funds which may have to be distributed pro rata in the event that there is not enough to go around provides a convincing rationale for the relatively short prescriptive periods; the persons responsible for administering the two funds could not prudently make any payments to claimants if there was any possibility of further claims exceeding the amounts available for distribution; they would have to wait until such time as they could be certain that no such claims could be made.
I have already looked at the immediate context of the word "occurrence" as it appears in subsection 677(10). If one looks beyond that to the general context of section 677 as a whole, the same result follows: on every occasion the only rational meaning that can be given to the word is that of an event which causes or is likely to cause pollution damage. Looking beyond section 677 to the whole of Part XVI also does not give any different result: counsel for the SOPF say that they have found 27 uses of the word and each one (with the possible exception of subsection 710(5) where the word appears to be misused) can only bear the meaning suggested by the defendants.
As to the consequences of the rival proposed interpretations, it is, of course, the case that the reading urged by the defendants would result in the plaintiff's action being time-barred even before it had arisen, but there are a number of considerations which need to be noted. In the first place, the plaintiff's right of action is itself wholly statutory so that the presumption against statutory limitation periods is somewhat less persuasive. Second, it is significant that the plaintiff did not even have a statutory right of action at the time of the sinking of the Irving Whale; that right only came into being some 10 months later with the coming into force of Part XX. Thirdly, since Part XX was repealed, as of April 24, 1989, (a fact of which this of all plaintiffs was surely aware) the plaintiff's right of action thereunder disappeared without being exercised and was replaced by a right of action under Part XVI. Finally, even if we were to assume that all prescriptive periods under Part XVI would toll only from and after the time of its coming into force (a proposition for which I can see no warrant in the statute), the plaintiff's action would still have been prescribed since it was not launched until more than 8 years after the coming into force date. To put the matter bluntly, it is difficult to see how the plaintiff can invoke the equities of the situation when all that it has lost is a right of action which it did not have at the time the sinking occurred, which it did not attempt to exercise while Part XX was in force, and which it has not exercised under Part XVI until long after the expiry of the period prescribed.
Looked at from the other side, the consequences of accepting the plaintiff's suggestion that the time should start to run from the date that the Minister had or should have had reasonable grounds to believe that the wreck was likely to cause pollution damage would be strange indeed. One of the purposes of any limitation period is to bring some certainty to the law and this is especially the case where, as here, pro rata payments out of the two funds would depend upon the persons responsible for the administration of those funds knowing that the list of claimants was closed. The plaintiff's interpretation would result in it being possible to file claims for the cost and expenses of preventive measures at virtually any time, years, decades or even centuries after the maritime incident which had created the risk of pollution damage in the first place. The impact of such an interpretation on the ability of ship owners to obtain coverage in the international marine insurance market should also not be underestimated and it will be recalled that this very difficulty was one of the root causes behind Canada's decision to abandon the earlier regime of liability and compensation contained in Part XX.
I conclude, therefore, that when it is viewed in the light of the broader context which I have mentioned, bearing in mind Canada's international obligations under the Civil Liability Convention and the Fund Convention and the broad policy choices underlying the enactment of Part XVI and the repeal of the former Part XX, the wording of subsection 677(10) imposes a finding that the claim is time-barred.
However, even if I were to accept, which I do not, the plaintiff's position in law, I am quite satisfied that the evidence available to me on this motion is sufficient to enable me to make a finding of fact that the Minister had reasonable grounds for believing that pollution damage was likely from the barge long before December 1992 when he received the expert report which he now relies upon. The evidence is quite clear that from immediately after the sinking in 1970 it was known that sooner or later there would be a discharge of oil which would be likely to cause pollution damage. The two principal unknowns were the timing of the ultimate break-up of the barge due to corrosion and deterioration and the extent of the damage which would be caused by the released oil.3 The decision to leave the barge where she lay was purely a judgment call based upon an assessment that the short-term dangers of attempting to raise her probably outweighed the long-term danger of leaving her there. Reasonable grounds for belief, however, imply an objective standard based on objectively verifiable facts, and while the Minister's assessment of the risk involved may have changed between 1970 and 1992, the facts leading to that assessment did not. Indeed, as the evidence demonstrates, the Minister did take some preventive measures during the intervening years both by the constant monitoring of the vessel and by the blocking-up of vent pipes and other apertures through which oil was escaping. If there was to be a separate prescriptive period for each separate preventive measure which the Minister, in his sole discretion decides to take, there would, in fact, be no limitation period at all except one that was wholly dependent upon the Minister's will. That cannot be the law. The proper application of the discoverability principle in this case calls for time to start running from the moment that the government acquired the knowledge that the wreck was lying on the seabed and had discharged, was discharging and was likely to discharge oil. That was in 1970.
Is the defendant, J.D. Irving Ltd. relieved from tort liability?
For convenience, I reproduce again, section 681 of the Canada Shipping Act:
681. (1) The owner of a Convention ship is not liable for the matters referred to in subsection 677(1) otherwise than as provided by this Part.
(2) No servant or agent of the owner of a Convention ship nor any person performing salvage operations with the agreement of the owner shall be liable for the matters referred to in subsection 677(1).
There can be no doubt that at the time of her sinking the Irving Whale was a "Convention ship" within the meaning of that term as it is defined in section 673, and that the "owner" thereof, as that term is also defined, was the defendant J.D. Irving Ltd. Based on the clear text and on these two facts, this defendant asks to have the action against it dismissed in so far as it sounds in tort as well as in statute.
There is doubt, however on the material before me as to whether the Irving Whale continues to be a "Convention ship" and whether the defendant J.D. Irving Ltd. can continue to benefit from the provisions of section 681. In the first place, the defendant suggests that it abandoned ownership after the sinking. There is no evidence as to when or how such abandonment took place and it is, of course, clear that, if there was an abandonment, that could not have any direct effect upon the defendant's liability in tort: one can abandon rights but not liabilities. What is not clear at all, however, is how the defendant can claim the benefit of section 681, which inures specifically to an "owner", and at the same time assert that it has ceased to be an owner. Even more problematical, however, is the evidence as to whether and when the Irving Whale ceased to be a "Convention ship" within the meaning of Part XVI. The certificate of registry contains the following endorsement "Registry closed this 15th day of October, 1970, except so far as relates to mortgages B and C". If this means that in fact the vessel ceased to be registered on October 15, 1970, she would also, at that time, have ceased to have the status of a "Convention ship" and her owner J.D. Irving Ltd. would no longer have the protection of section 681.
The torts of negligence and nuisance alleged against the defendants may both be of a continuing nature. Negligent acts of omission and conditions which create a nuisance may both persist over long periods of time. There is a complete absence of evidence on the alleged torts and precisely when they might have occurred.
Accordingly, in the present state of this record, I am not in a position to find the necessary facts which would allow me to release the defendant J.D. Irving Ltd. from any claim for liability in tort which is outside the scope of subsection 677(1).
Liability of the defendants other than J.D. Irving Ltd under Part XVI
In view of my finding that the action under Part XVI is, in any event, time-barred, it is not strictly necessary that I should deal with the question of the liability of these defendants. However, should it be determined that I am wrong in my conclusion on the matter of prescription, and since I am able to make the necessary findings of fact, I shall do so.
Liability under Part XVI is limited to the owner of a vessel. While the term "owner" in the case of non-Convention ships is broadly defined and would include a charterer, the evidence produced in this case establishes that the bare-boat charter to Atlantic Towing Ltd. terminated without notice in accordance with its conditions upon the sinking of the vessel. Plaintiff has not been able to challenge this evidence nor to bring any other evidence to show that any defendants other than J.D. Irving Ltd. could have been owner of the barge. The Part XVI action should, accordingly, also be dismissed against them on this basis.
THE MOTION OF THE SOPF
Does Part XVI have retroactive effect?
Although counsel for the SOPF originally took the position that notwithstanding the apparently clear terms of section 88 of the implementing statute, Part XVI did not have a retroactive effect, he conceded at the hearing that it did have "limited" retroactivity at least to the extent of the statutory limitation periods. In my view, subsection 88(1) does indeed clearly manifest a Parliamentary intent that Part XVI should apply to claims for expenses incurred after the date of its coming into force "regardless of the time of the occurrence that gave rise to the damage, loss, costs or expenses". Taken in their context, those words can only mean that an event (occurrence) which took place prior to April 24, 1989, when Part XVI was not in force may nonetheless produce legal effects and give rise to a claim thereunder after such time. Since the claim against the SOPF arises entirely under the statute and is not dependent upon any external factor such as a treaty, the provision must be given its full force and effect; the presumption against retroactivity is displaced.
Is the claim against the SOPF time-barred?
The limitation period for claims against the SOPF is found in subsection 710(1) of Part XVI. Apart from the time periods involved (two and five years instead of three and six), the relevant words are identical in every respect to the corresponding words in subsection 677(10). I have already found that the latter provision results in the claim against the defendants being timed-barred and the same result must inevitably flow for the claim against the SOPF.
THE MOTION OF THE IOPC FUND
Whether the IOPC Fund is liable for events occurring prior to the effective date of the Fund Convention
At the hearing of the motion for summary judgment, counsel for the plaintiff conceded in argument that the IOPC Fund could not be liable. It is clear from the terms of section 699 that the liability of the IOPC Fund under Part XVI is contingent upon its being liable under the Fund Convention. The Fund Convention came into effect on October 16, 1978 and was acceded to by Canada more than 10 years later. Article 40 of the Fund Convention reads as follows:
Article 40
1. This Convention shall enter into force on the ninetieth day following the date on which the following requirements are fulfilled:
(a) at least eight states have deposited instruments of ratification, acceptance, approval or accession with the Secretary-General of the Organization, and
(b) the Secretary-General of the Organization has received information in accordance with Article 39 that those persons in such states who would be liable to contribute pursuant to Article 10 have received during the preceding calendar year a total quantity of at least 750 million tons of contributing oil.
2. This Convention shall, however, not enter into force before the Liability Convention has entered into force.
3. For each state which subsequently ratifies, accepts, approves or accedes to it, this Convention shall enter into force on the ninetieth day after deposit by such state of the appropriate instrument. [Emphasis added.]
There is no indication anywhere in the Fund Convention that it is intended to have retroactive effect. The presumption against retroactivity must therefore receive full application. Accordingly, the concession made by counsel for plaintiff, although late in the day, accurately reflected the law.
Is the claim against the IOPC Fund time-barred?
Although it is not strictly necessary to decide this question, the terms of the Fund Convention reproduced above in the discussion of the correct interpretation of subsection 677(10) admit of no ambiguity. The claim is time-barred under the Convention.
DISPOSITION
An order will go:
(a) dismissing the action against the defendants in so far as it is based on Part XVI of the Canada Shipping Act; in so far as the action is based on alleged torts, it will continue against all defendants;
(b) dismissing the claim against the defendant by statute SOPF, allowing the latter's counterclaim and declaring that claims against the SOPF arising out of the sinking of the Irving Whale are time-barred;
(c) dismissing the claim against the defendant by statute IOPC Fund and declaring that the Fund has no liability to the plaintiff arising out of the sinking of the Irving Whale.
COSTS
Since the action against all the defendants is to continue, the latter's entitlement to the costs of this motion will arise only at the end of the day. I will, however, assess such costs in the amount of $4,000 together with allowable disbursements.
The SOPF, on the other hand, finds itself taken out of the action altogether; the claim against it is dismissed, the counterclaim is allowed and a declaration is given in its favour. It is entitled to the costs of an action (one set of costs only). I assess those costs at the amount of $10,000 plus allowable disbursements.
Finally, with regard to the IOPC Fund, it is now clear that the plaintiff never had any rights against the Fund and should not have notified the Fund of this action. The plaintiff had ample opportunity to reflect upon the Fund's position, which was made known to it early, but persisted in keeping the Fund as a potential resource against which it could claim. The Fund's motion for summary judgment should never have been necessary and certainly should never have been opposed. In my view, a higher than usual award of costs to the Fund is justified and I assess such costs in the amount of $17,500 plus allowable disbursements.
1 R.S.C., 1985, c. s-9 [as am. by R.S.C., 1985 (3rd Supp.), c. 6, s. 87].
2 R.S.C., 1985 (3rd Supp), c. 6.
3 See cross-examination of Hamilton, questions 34 to 38.