These proceedings involved appeals brought pursuant to s 106(2) of the Marine Liability Act, SC 2001 c 6 (the MLA), arising from two decisions of the Administrator of the Ship-Source Oil Pollution Fund (the SOPF) disallowing claims made by the Canadian Coast Guard (the CCG). The CCG claims were made pursuant to s 103(1) of the MLA and sought compensation for costs and expenses incurred by the CCG to prevent anticipated oil pollution damage from incidents involving two vessels: the Miss Terri and the Stelie II. The Administrator found that the claims were made outside of the limitation period established by s 103(2)(a) of the MLA and disallowed them.

Held: The CCG's appeals are dismissed.

Section 103 of the MLA provides as follows:

(1) In addition to any right against the Ship-source Oil Pollution Fund under section 101, a person who has suffered loss or damage or incurred costs or expenses referred to in section 51, 71 or 77, Article III of the Civil Liability Convention or Article 3 of the Bunkers Convention in respect of actual or anticipated oil pollution damage may file a claim with the Administrator for the loss, damage, costs or expenses.

(2) Unless the Admiralty Court fixes a shorter period under paragraph 111(a), a claim must be made

(a) within two years after the day on which the oil pollution damage occurs and five years after the occurrence that causes that damage; or

(b) if no oil pollution damage occurs, within five years after the occurrence in respect of which oil pollution damage is anticipated.

In respect of the Miss Terri, the Administrator determined that the limitation period under s 103(2)(a) of the MLA applied and had expired prior to the submission of the CCG's claim. Therefore, the submission of the claim was inadmissible under s 103(1) of the MLA. The Administrator stated that in determining which limitation period applied, it was important to first determine if there was a discharge of oil from the vessel. The Administrator noted the absence of an 'explicit observation' of oil in the water originating from the vessel. However, this did not mean that no discharge had occurred. There was indirect evidence of a discharge, or more likely multiple discharges, occurring prior to 4 September 2018. The Administrator stated it was more probable than not that rainwater would have regularly entered the vessel, become contaminated with oil, and then been pumped overboard. The Administrator embarked on a lengthy exercise of statutory interpretation of s 103(2)(a) and concluded that the provision imposes a limitation period of two years after the oil pollution damage occurs as a result of an initiating incident. It further concluded that all claims stemming from the same facts, and all claimants, were therefore subject to the same limitation period. The Administrator stated that the final determination to be made was whether the discharges that occurred caused 'oil pollution damage' as defined in s 91(1) of the MLA. Based on its prior findings of fact, it concluded that the discharges prior to 4 September 2018 were likely to have caused oil pollution damage. As a result, the s 103(2)(a) limitation period expired prior to 4 September 2020 and the CCG’s claim was inadmissible under s 103(1).

In respect of the Stelie II, the Administrator determined that it was probable that a discharge of oil had occurred as a result of the relevant incident and the response to it. The Administrator found that it was likely that some oil from the open containers on the vessel’s deck had escaped into the water. The Stelie II had begun to list on 23 or 24 March 2016, and continued to do so until the pumping operation on 25 March 2016. The Administrator referenced its interpretation of s 103(2)(a) in the Miss Terri matter. It first noted that the appropriate reading of s 103(2)(a) resulted in a limitation period of two years after the first instance of 'oil pollution damage' that occurred as a result of an underlying incident, and all claims stemming from the same facts were therefore subject to the same limitation period. Second, it noted that the appropriate threshold for determining whether 'oil pollution damage' had occurred was very low. The Administrator determined, on the balance of probabilities, that the discharge or discharges that occurred between 23-26 March 2016 caused oil pollution damage. Therefore, the s 103(2)(a) limitation period expired between 23-26 March 2018. As the claim was not submitted in time, it was inadmissible under s 103(1), and was disallowed.

The Administrator correctly interpreted s 103(2). The limitation period contained in s 103(2)(a) applies when oil pollution damage has occurred for which a claim is made under s 103(1). The limitation period contained in s 103(2)(b) applies where no oil pollution damage has occurred and the s 103(1) claim arises from presentative measures expended in response to anticipated oil pollution damage. The determination of which limitation period applies is purely a factual determination based on whether or not oil pollution damage has occurred. That determination is made by the Administrator.

The Administrator did not err in its determination that discharges of oil pollution had occurred. Therefore, the limitation period under s 103(2)(a) of the MLA applied and had expired prior to the submission of the CCG’s claims for the Miss Terri and the Stelie II. In the result, the CCG’s s 103(1) claims for compensation were precluded, as they were made outside the applicable limitation period.

There appears to be considerable animosity between the CCG and the Administrator. This is unfortunate. The Administrator cannot simply advance theories of what might have happened. If the Administrator is relying on internal technical advice to ground a concern that the Administrator chooses to raise with the claimant, this advice should be disclosed to the party making the s 103 claim so that, if they deem it appropriate, they can provide a responding technical response. Further, while the onus lies on the claimant to establish its claim, if the Administrator is departing from its traditional approach in relying on narratives contained in claims submission, as the CCG suggests, the Administrator should make this very clear to all claimants, as well as exactly what level of supporting information the Administrator now expects to receive. These observations are offered in the hope that a better working relationship between the CCG and the Administrator may be achieved in the future.