On 21 April 1987 a fire broke out on the Bow Drill III which was drilling for oil in the Grand Banks of Newfoundland. The Bow Drill III suffered major damage and required extensive repairs. The companies which had contracted for the lease of the rig suffered financial loss while it was out of commission undergoing repairs for several months.

Bow Valley Husky (Bermuda) Ltd (BVHB), Husky Oil Operations Ltd (HOOL) and Bow Valley Industries Ltd (BVL) commenced an action against St John Shipbuilding Ltd (SJSL), who constructed the rig, alleging breach of contract and negligence, and an action against Raychem, the installer of the heat trace safety system for negligence.

The appeal concerned the legal responsibility for the damages and the extent of the damages recoverable. In particular the legal issues were the applicability of contributory negligence principles under Canadian maritime law and the recovery of damages for contractual relational economic loss.

The trial Judge found that the fire started when an electrical fault occurred in the heat trace wire, causing an arc in the heat trace system. The arcing occurred because no ground fault circuit breaker (GFCB) system was being used at that time. The judge held that it was likely the Thermaclad caught fire, which then caused an oily residue on the cables to catch fire. He concluded that as the fire spread much more than would be expected with Thermaclad alone, the fire must have been assisted by residue in the cable tray. The judge determined that the plaintiffs had not proven that the heat tracing and wrap on the pipe had been installed by SJSL or Raychem. The Judge found that BVHB had assumed responsibility for the installation of a functioning GFCB system, and that BVHB was negligent: in continuing to operate the heat tracing system without ground fault protection; in allowing the cables to accumulate the oily residue; and, in the absence of evidence that the fault for the arcing rested on someone else, for the defects in the wire or junction box that had caused the arc. The Judge held that HOOL and BVI shared in the contributory negligence of BVHB as they were informed during construction of the need for ground fault protection. Alternatively, had HOOL and BVI not known of the need for ground fault protection, the Judge would have found them negligent on the ground that BVHB, HOOL and BVI were involved in a joint venture.

The Judge found that all parties were aware of the inflammability of the Thermaclad. He held that the defendant SJSL was liable in contract and tort for failing to provide certificates of approval for the Thermaclad, and in tort for breach of duty to warn of the inflammability of Thermaclad. He also held that the defendant Raychem was liable in tort for breach of its duty to warn. He found that the contract between SJSL and BVHB did not negate BVHB’s right to sue for negligence or breach of contract for failure to provide certificates of approval for Thermaclad, or for negligent failure to warn. Riche J went on to hold that the major fault lay with BVHB for its operation of the heat trace system without a functioning GFCB system. It knew that arcing could occur and that it could cause fires. Moreover, it kept the heat trace system on, even when it might not have been required, despite incidents of arcing on the heat trace wires. In the result, Riche J apportioned the fault 60% to the plaintiffs and 40% to SJSL and Raychem. He did not award damages for breach of contract.

However, the Judge dismissed the plaintiffs’ claim on the ground that the case arose out of negligence at sea and was governed by Canadian maritime law, which precluded application of the Newfoundland Contributory Negligence Act, RSN 1990 c C-33, and made contributory negligence a bar to recovery.

The Newfoundland Court of Appeal upheld the trial judge’s finding on the origin of the fire but rejected the conclusion that there was a joint venture between HOOL and BVI. The Court of Appeal upheld the finding that BVHB was contributorily negligent but rejected the judge’s finding that BVHB was negligent with respect to the existence of the oily residue on the cables and held that the damage suffered by BVHB was a reasonably foreseeable consequence of BVHB’s failure to use a GFCB system.

The Court of Appeal agreed with the trial judge that maritime law applied. Nevertheless it held that provincial negligence legislation applied to maritime cases in some situations, including this case. Alternatively, if the Newfoundland Contributory Negligence Act did not apply, the court held that maritime law no longer made contributory negligence a bar to recovery. BVHB was held entitled to recover 40 per cent of its loss from SJSL and Raychem: see Bow Valley Husky (Bermuda) Ltd v St John Shipbuilding Ltd (CMI953).

Held: Appeal dismissed. Cross-appeals dismissed save that of SJSL with regard to the duty to warn (La Forest and McLachlin JJ dissenting).

The defendants asserted that the plaintiffs’ claims were barred because at common law, contributory negligence is a bar to recovery. The plaintiffs responded that their contributory negligence was not a bar because:

(a) the law of the vessel’s flag, Bermuda, applies;
(b) alternatively, the Newfoundland Contributory Negligence Act applies;
(c) in the further alternative, the common law applicable in maritime cases does not make contributory negligence a bar.

BVHB’s right to recover is not barred by its contributory negligence.

The first question is whether the law of the vessel applies. The plaintiffs argued that because the fire occurred on the high seas, the law of the flag of the vessel (Bermuda) applied. They then asserted that since Bermuda law was not proven, the law of Newfoundland should be applied. This argument rests on a series of tenuous propositions, the first of which is that the fire occurred on the high seas. It must fail, if only because the fact was not proved.

Alternatively, the plaintiffs submitted that the law of Newfoundland should be applied. The defendants replied that this is a maritime matter and that the applicable law is maritime law, not the law of Newfoundland. This raises the question of which law applies - Newfoundland law or federal maritime law?

Once it has been determined that a matter is governed by constitutionally valid federal law, as in this case, then the relevant legal unit is Canada and not a particular province. Federal law is not foreign law vis-à-vis the law of a province since it is an integral part of the law of each province and territory. Since the claims advanced relate to maritime matters, the law of Newfoundland mandates the application of Canadian maritime law, not the Newfoundland Contributory Negligence Act.

The plaintiffs submitted that maritime law should not apply because the Thermaclad had no relationship to the rig’s navigational equipment and because the claims were advanced in tort and contract, rather than navigation and shipping. However, the legal nature of a claim is not the decisive factor in the determination of whether the principles of maritime law apply. What is required is 'that the subject-matter under consideration in any case [be] so integrally connected to maritime matters as to be legitimate Canadian maritime law within federal legislative competence' (International Terminal Operators Ltd v. Miida Electronics Inc, (1986) CanLII 91 (SCC), [1986] 1 SCR 752 at p 774, per McIntyre J. It follows that 'tortious liability which arises in a maritime context is governed by a body of maritime law within the exclusive legislative jurisdiction of Parliament' (Whitbread v Walley (1990) CanLII 33 (SCC), [1990] 3 SCR 1273 at p 1289) (CMI961), per La Forest J.

This case involves tortious liability arising in a maritime context. These cases reflect the flexible approach that this Court has taken to the development of the common law. Judges can and should adapt the common law to reflect the changing social, moral and economic fabric of the country. Judges should not be quick to perpetuate rules whose social foundation has long since disappeared. Nonetheless, there are significant constraints on the power of the judiciary to change the law. It is the legislature and not the courts which has the major responsibility for law reform; and for any changes to the law which may have complex ramifications, however necessary or desirable such changes may be, they should be left to the legislature. The judiciary should confine itself to those incremental changes which are necessary to keep the common law in step with the dynamic and evolving fabric of our society.

Recognition of shared liability for fault and elimination of the contributory negligence bar in maritime torts falls within these principles.

All these were cases in admiralty, and were not cases of collision between two vessels. They show an amelioration of the common law rule, and an extension of the admiralty rule in a direction which we think is manifestly just and proper. Contributory negligence, in a case like the present, should not wholly bar recovery.

Judges and commentators are united in condemning the bar. The continuing existence of a maritime contributory negligence bar has been termed 'archaic' (see W Tetley, 'A Definition of Canadian Maritime Law' (1996) 30 UBC L Rev 137, 138).

Removal of the contributory negligence bar will have not have unforeseeable or complex ramifications beyond the cognisance of the judiciary. The principle of apportionment for non-maritime torts is universally accepted in every part of Canada and around the world. Statutes have eliminated the bar and substituted a rule of apportionment in England, Australia and the common law provinces of Canada.

In England, Australia and the United States, the bar has been removed, and apportionment made the rule, for maritime torts. In all these jurisdictions, the rule of apportionment operates without apparent problem. The proposed change has been tried and tested. This experience tells us what will happen if the contributory negligence bar is lifted and apportionment allowed. Lifting the bar will not produce unforeseen or problematic consequences. Rather, the effect will be positive: to bring the law in step not only with the changing social, moral and economic fabric of the country, but with the law of other jurisdictions like the United States, Australia and England.

The defendants submitted that the several liability approach should be adopted as it is more consistent with the collision provisions in s 565(1) of the Canada Shipping Act, which provides: 'Where, by the fault of two or more vessels, damage or loss is caused to one or more of those vessels, to their cargoes or freight or to any property on board, the liability to make good the damage or loss shall be in proportion to the degree in which each vessel was at fault'.

This may be contrasted with s 566, which provides that the liability of vessel owners for personal injury is 'joint and several'. Without definitively determining the effect of s 565, which was not argued, the difference between the two sections falls short of demonstrating that Parliament intended liability under s 565 to be several only. The precursors to ss 565 and 566 were originally enacted in the Maritime Conventions Act 1914 SC 1914 c 13, in order to give effect to the equivalent articles of the Collision Convention 1910. Section 565 originated as a response to the common law admiralty divided damages rule which provided that when two ships collided, each bore 50% of the loss. As collisions between more than two vessels are rare (no reported cases of such collisions have been cited to the Court), it may not have been considered necessary to address the issue of contribution between two or more vessels.

By contrast, personal injury actions are more likely to involve more than one defendant, which may explain the reference to joint and several liability in s 566.

In the United States, joint and several liability is the rule. Any tortfeasor paying the plaintiff a greater amount than its portion of liability can obtain contribution from the other tortfeasor(s). This appears to be essentially consistent with the contributory negligence legislation of most provinces and England. The situation appears to be similar under the Civil Code of Québec (arts 1523 and 1526).

A final question concerns the availability of contribution - that is, the right of a tortfeasor who pays more than its share of the plaintiff’s damages to recover the excess amount paid from other tortfeasors. It is often stated that at common law there was no contribution between tortfeasors, citing Merryweather v Nixan (1799) 8 TR 186; 101 ER 1337. It may also be noted that in Sparrows Point v Greater Vancouver Water District (1951) CanLII 32 (SCC); [1951] SCR 396, Rand J (at p 412), in concurring reasons, after holding that provincial contributory negligence legislation could not apply, stated that as a result of the application of common law admiralty principles, there could be no contribution. However, the arguments in favour of and against contribution between tortfeasors appear not to have been considered. Commentators have questioned whether the common law rule against contribution was absolute, particularly in cases where the tort committed was not intentional, and there was no malicious motivation: (see eg G Williams Joint Torts and Contributory Negligence (1951), at pp 83-84). Again, under the Quebec Civil Code, contribution is available to a tortfeasor who has paid more than its share of the liability (art 1536). Like the contributory negligence bar, the idea that there can be no contribution between tortfeasors is anachronistic and not in keeping with modern notions of fairness.

This is an appropriate case for this Court to make an incremental change to the common law in compliance with the requirements of justice and fairness. Contributory negligence may reduce recovery but does not bar the plaintiff’s claim. The defendants SJSL and Raychem are jointly and severally liable to the plaintiff BVHB for 40 per cent of its loss, subject to a right of contribution between defendants.