This was an appeal from the decision of the Ontario Federal Court in Buhlman v Buckley (CMI391) regarding the limitation amount that applies to a collision between two pleasure craft in Canada. The Buckleys sued Buhlman for negligence, launching a claim for CAD 8.2 million plus interest and costs. Buhlman successfully brought a limitation of liability action and obtained an order that any liability would be limited to CAD 1 million pursuant to s 28 of the Marine Liability Act SC 2001, c 6, (the MLA) exclusive of pre-judgment interest.

The Buckleys appealed against the limitation of liability order.

Held: The appeal would be dismissed.

It was common ground that Part 4 of the MLA, entitled Liability for Carriage of Passengers by Water, was not relied upon by the parties. As a result, the parties did not rely on the Athens Convention 1974. Therefore, the parties did not challenge the judge’s finding that Part 4 of the MLA does not apply to the present case.

The LLMC 1996 addresses a wide variety of claims which are subject to limitation. In art 2.1.a, it refers specifically to events 'occurring on board or in direct connection with the operation of the ship'. The judge appropriately found that the injuries sustained on the Lund Outfitter had occurred in direct connection with the operation of the Crestliner, the ship against which liability was sought. The Court of Appeal also agreed with the judge that s 29(2) of the MLA had no application in this case because the Buckleys were not on board the Crestliner. That finding was sufficient to put the appellants’ arguments to rest without further examining the purpose of the voyage.

Article 7 of the LLMC 1996 is the source of s 29 of the MLA. Article 7 refers to liability 'of the shipowner' and to claims 'brought by or on behalf of any person carried in that ship'. A combined reading of art 7 of the LLMC 1996 and s 29 of the MLA favoured the judge’s interpretation that s 29(2) of the MLA referred to persons on board the ship seeking to limit its liability.

The judge was correct in concluding that s 29 of the MLA did not apply to the Buckleys, who were neither passengers nor persons being carried on board the Crestliner. The broader language of s 28(1) of the MLA therefore governed their maritime claims.

Although found to be inapplicable in this case, the Court of Appeal reiterated, obiter, that s 29(1) of the MLA concerned passengers on a ship, therefore persons carried on that ship under a contract of carriage. Subsection 29(2) applied to persons carried on that ship for a commercial or public purpose without such a contract. This is why the formula for determining the maximum liability under s 29 considers either the number of passengers which the ship is authorised to carry or the number of persons on board the ship at the time of the incident.