Maritime claims and limits

Robin Squires

Borden Ladner Gervais, Toronto
rsquires@blg.com  

Quin Myles
Borden Ladner Gervais, Toronto
qmyles@blg.com  

In Canada, the Marine Liability Act[1] (MLA) is the main source of legislation that limits damages in the maritime context. The MLA incorporates various international conventions into law and adds some uniquely Canadian features.

Limitation convention

The Convention on Limitation of Liability for Maritime Claims, 1976 (as amended by the Protocol) is incorporated in part 3 of the MLA. The right of the shipowner to limit liability after a maritime incident is 'virtually unbreakable'[2] in Canada. The limits of liability in Canada for property claims are as follows:[3]

The limits of liability in Canada for personal injury claims are as follows:[4]

Passenger claims

Part 4 of the MLA incorporates most of the provisions of the Athens Convention into Canadian law for the injury or death of fare-paying passengers. The MLA extends the application of the Athens Convention to domestic and inland voyages. The limit for the personal injury or death of a passenger is 175,000 units of account.

The Canadian commercial purpose person

Part 4 of the MLA extends the application of the Athens Convention beyond paying passengers to those aboard a vessel that is 'operated for a commercial or public purpose'. [5] The determination of circumstances falling under this extension can have significant consequences due to the lower limits under the Athens Convention. In Gundersen v Finn Marine,[6] a non-paying guest of the captain on a water taxi was seriously injured after the captain fell asleep at the helm and ran aground. The court held that the Athens Convention applied under the commercial purpose category,[7] and therefore the guest's damages were limited to 175,000 special drawing rights (SDR).

Cargo claims

Canada is a Hague–Visby state. Part 5 of the MLA incorporates the Hague–Visby Rules (HVR) into the law of Canada. The MLA makes the HVR applicable only to carriage of goods governed by a negotiable bill of lading. In addition, Canada has an exception for negotiable bills of lading whereby the claimant can sue in Canada for a loss despite any jurisdiction clause in a bill of lading if:

1.  the actual port of loading or discharge, or the intended port of loading or discharge under the contract, is in Canada;
2.  the person against whom the claim is made resides or has a place of business, branch or agency in Canada; or
3.  the contract was made in Canada.[8]

Pollution

Part 6 of the MLA incorporates the Civil Liability Convention and the Bunkers Convention into the law of Canada. The strict liability regime of those conventions applies, including any restrictions on entitlement to limit.

For bunkers, the limits of liability are as follows:

For tankers, the limits of liability are as follows:

Commercial trucking claims and limits

Although Canadian maritime law falls under federal jurisdiction and is applied uniformly nationwide, the regulation of commercial transportation is regulated by each of Canada's ten provinces and three territories. In Canadian common law, motor carriers that hold themselves out to the public ('common carriers') are subject to strict liability. This liability is subject to only certain defences, such as force majeure-type events or inherent defects. To encourage the industry, most (but not all) Canadian provinces and territories regulate limits of liability for commercial trucking.[9] For most of Canada, the limit of liability is therefore $4.41 per kilogram ($2.00 per pound). A key question is which province's law governs a given contract, as some provinces and territories have unique limits or no limits at all. The application of regulatory limits by courts across Canada is somewhat inconsistent as well, and often depends on the specific facts of a given case.

Notes