The berthing of the Dubai Fortune, which was owned by Fortune Maritime Ltd (first defendant), required the assistance of three tugs. The Tiger Shark 2 was one of the three tugs. All three tugs were owned by Smit Harbour Towage Vancouver Inc (the second defendant). During the berthing, the propellor of the M/V Star Hansa, which was owned by Grieg Shipping A/S (the plaintiff), was struck by the Tiger Shark 2. The plaintiff filed a claim against the first defendant on the basis that it was vicariously liable for the negligence of the Tiger Shark 2 in the berthing. The damage as alleged by the plaintiff was USD 2,700,000 plus interest.

It was agreed between the second defendant and the first defendant that the damage was caused because of the negligence of Brad Duesterdiek, the master of the Tiger Shark 2 (third defendant). Therefore, the second defendant was entitled to limit its liability on the basis of the Tiger Shark 2's tonnage according to sch 1 of the Marine Liability Act, SC 2001, c 6, which incorporates the Convention on Limitation of Liability for Maritime Claims 1976 (LLMC 1976) as amended by the Protocol of 1996 (LLMC 1996).

The plaintiff claimed that the first defendant was vicariously liable for the damages caused by the Tiger Shark 2 to the Star Hansa. It was further claimed by the plaintiff that, according to arts 1, 2, 6, and 9 of sch 1 of the Marine Liability Act, SC 2001, c 6, the liability of the first defendant should be calculated according to the tonnage of the first defendant's ship (27,000 tons) rather than the tonnage of the Tiger Shark 2 (less than 100 tons).

By referring to former authorities, the first defendant submitted that it should not be responsible for the negligent manoeuvring of the Tiger Shark 2. The defendant further argued that it was entitled to rely on the second defendant's limitation fund.

Held: The plaintiff's action is dismissed.

According to the law of vicarious liability, in order for the first defendant to be vicariously liable for the damage, it must be proved that the first defendant was entitled to give orders or directions to prevent the negligent act at the time of the incident. However, considering the evidence as a whole, the first defendant did not have control over the third defendant. The cause of the damage to the Star Hansa was the negligent way in which the third defendant maneuvered the Tiger Shark 2. Therefore, the first defendant was not vicariously liable for the damage.

Thus, since the plaintiff failed to establish the vicarious liability of the first defendant, there was no need to discuss the limitation of liability issue which had been raised by the plaintiff.