This dispute concerned a constitutional challenge by Early Recovered Resources Inc (the plaintiff) to the Province's scheme, embodied in Pt 9 of the British Columbia Forest Act (Pt 9) and the Log Salvage Regulation (the Regulation), for recovering and salvaging logs from the Vancouver Log Salvage District. The plaintiff asserted that the Province had sought to regulate a matter - marine salvage - that was at the core of Canadian maritime law and the federal jurisdiction over navigation and shipping.

The case involved the recovery of 65 floating logs from the Fraser River in the Vancouver Log Salvage District. An employee of the plaintiff towed 17 no mark visible (NMV) logs to the Fraser River receiving station of the Gulf Log Salvage Co-Operative Association. The plaintiff demanded compensation for the logs pursuant to the Salvage Convention 1989. However, the Minister of Forests refused to compensate the plaintiff because the Regulation was applicable and not the Salvage Convention 1989. The plaintiff initiated an action for declaratory relief, asking the Court to rule on the constitutional validity, applicability and effect of Pt 9 and the Regulation.

The plaintiff submitted that Pt 9 was inoperative and unconstitutional because it was ultra vires the British Columbia legislature under the federal government's exclusive jurisdiction over navigation and shipping and because it conflicted with the Canada Shipping Act, RSC 1985, c S-9 (the Shipping Act), and the Salvage Convention 1989. The plaintiff's claim to entitlement was based on arts 12 and 13 of the Salvage Convention 1989 which set out the conditions for reward and the criteria for fixing the reward. The plaintiff also raised 'the doctrine of interjurisdictional immunity … to preclude the Province from regulating marine log salvage at all'.

Coast Forest Products Association and Independent Timber Marketing Association (the defendants) replied that Pt 9 was constitutionally valid because it dealt with matters that came within the exclusive jurisdiction of the legislature of British Columbia.

The issue for the Court was whether the logs found adrift in the Fraser River which had no identifiable source and no means of identifying the owner could be considered 'property' under the Regulation.

Held: Action dismissed.

The declaratory relief was refused on the basis that Pt 9 and the Regulation were intra vires the Province of British Columbia as being valid provincial legislation, and so applicable to the logs recovered by the plaintiff in this case.

Part 9 and the Regulation are part of a comprehensive regime for managing forest resources in British Columbia. Part 9 is a framework for dealing with drift timber that needs to be salvaged or recovered so that its value can be realised. It has nothing to do with navigation or shipping. Any connection with navigation and shipping is tenuous and does not taint the clear purpose and effect of Pt 9. The fact that cut logs have found their way into water does not mean that they have ceased to be part of the forestry resource. Just because the logs are recovered from navigable waters does not mean that the impugned provisions must be related to navigation and shipping. Neither the plaintiff nor other salvors are in the business of recovering logs to prevent hazards to shipping. Their interest is economic. The impugned provisions have not interfered with the federal interest in navigation and shipping. Under the relevant federal provisions, logs that are a danger to navigation and shipping are removed. Those provisions do not deal with the property rights or the economic interests in logs or the forestry resource management aspects of drifting logs. The federal and provincial systems work side by side.

Canada adopted the Salvage Convention 1989 in 1993. It is given the force of law in Canada by virtue of s 449(1) of the Shipping Act 'from and after the day on which Canada deposits an instrument of ratification with the Secretary General of the International Maritime Organization'. The issue of whether logs in this case fall within the Salvage Convention 1989 definition of 'property' that can be the subject of a 'salvage operation', does raise the issue of the relationship between the federal salvage provisions and the provincial scheme, and whether the federal provisions need to be read down in some way because they intrude upon the valid exercise of the provincial jurisdiction in Pt 9 and the Regulation.

One of the arguments made by the plaintiff is that logs escaping from booms in the Fraser River can be considered as the cargo of a vessel. The plaintiff submitted that a log boom is a vessel because it is designed for transport and containment in water, and is capable of navigation. Whether a log boom can be considered a vessel for the purpose of the Convention does not assist the plaintiff in this case. The plaintiff was clearly unable to say where the logs in question had come from. They may have come from a boom, or from a vessel in the conventional sense, but they may have come from another source (eg a land source) that clearly would not qualify as a vessel under the Convention or otherwise. That being the case, the issue is whether the logs can be considered as 'property' under art 1.c of the Convention.

The plaintiff says that the logs salvaged by it were in danger. That is enough, at this stage of the case, to allow the matter to proceed in this Court. It may be that the logs in question would even have been the subject of a claim for salvage in the traditional sense. They were apparently found floating in the navigation channel of the river and had no identifying marks upon them. Thus they might have been part of the cargo of a log barge which would have, of course, brought them within the traditional view of salvage, although as a practical matter, it is more probable that they had either escaped from a boom or had entered the river free-floating.

The traditional concept of salvage in UK and Canadian law is based upon the amount to be paid by the 'owner' of a vessel or cargo for services rendered in recovering that vessel or cargo. This is why there is no conceptual difficulty in including logs and booms that come from a vessel within the traditional definition of salvage. But the problem in this case is whether it can include drifting logs from no identifiable source that have no identifiable owner. The plaintiff has argued that the Province has an ownership interest in the logs in question that can be used to ground recovery in traditional salvage law and provide a source for a salvage award. The legal characterisation is not entirely clear, but the legislation and the evidence in this case suggest that the Province has some kind of lien interest against logs recovered in waters inside and adjacent to British Columbia until the charges set out in the Regulation have been paid.

The Convention itself is grounded in 'ownership' but does not say what degree of ownership or interest will suffice. For instance, the duties owed by the salvor under art 8 are owed 'to the owner of the vessel or other property in danger', thus confirming the view that identifiable ownership is required, whether the property is cargo or other property. Article 8.2 establishes reciprocal duties towards the salvor on the part of 'the owner and master of the vessel or the owner of the other property in danger'. Article 13, which establishes criteria to be taken into account when fixing a reward, stipulates in art 13.2 that 'Payment of a reward fixed according to paragraph 1 shall be made by all of the vessel and other property interests in proportion to their respective salved values', thus suggesting that salvage under the Convention definition is linked to identifiable property interests. Article 19 also says that the 'other property' aspect of the Convention is property that still requires an identifiable owner: 'Services rendered notwithstanding the express and reasonable prohibition of the owner or master of the vessel or the owner of any other property in danger which is not and has not been on board the vessel shall not give rise to payment under this Convention.'

This suggests that salvage under the Convention can take place in relation to property 'which is not and has not been on board the vessel', but that such property still requires the identification of an owner. There is, therefore, no reason to conclude that the logs cannot constitute 'property' for the purposes of the expanded Convention definition. There may be problems with attributing 'ownership' for purposes of payment but, conceptually at least, they fall within the Convention definition of 'property'.

In seeking a declaration that it is entitled to receive compensation under art 13.1 of the Convention, the plaintiff sought to fix the Province with the ownership of the logs, and thus the responsibility for making that payment. The obligation to pay a reward under the Convention to a salvor is established under art 13.2 which says that '[p]ayment of a reward fixed according to paragraph 1 shall be made by all of the vessel and other property interests in proportion to their respective salved values'.

In the present case, there is no vessel so that, before a payment can be made, it is necessary to identify the 'other property interests' in the logs. The evidence before the Court is inconclusive on the property interests involved in this case. The Province's interest under Pt 9 appears to be no more than a lien for the payment of stumpage fees. The plaintiff has placed no conclusive authority before the Court to establish that such a lien interest was intended under the Convention to render the Province responsible for paying salvage in accordance with the Convention.

The Province has asked that the Court read down the Convention and interpret it in such a way that it only applies to 'marine salvage' and not to the recovery of logs. For the reasons given, the Court cannot say that the Convention definition of 'property' does not apply to logs, or even NMV logs. This suggests that, in order to remain consistent with the conclusion that Pt 9 and the Regulation are intra vires for the Province, the Court must conclude that to the extent that the Shipping Act and the Convention purport to regulate the recovery, sale and distribution of the proceeds of sale of recovered NMV logs adrift in the Vancouver Log Salvage District, they are not valid legislation in relation to navigation and shipping and are, thus, ultra vires the Parliament of Canada because they infringe the unassailable core of the Province's legislative jurisdiction under the Constitution Act 1867.

Finally, it was not useful to discuss the doctrine of interjurisdictional immunity, which would only apply if the provincial legislation went to the core of the federal power (Ordon Estate v Grail (1998) CanLII 771 (SCC) [81] (CMI971)).