On 30 June 1983, Cynthia Hartley (the plaintiff) was a passenger in a power boat owned and operated by Steve Giokas (the first defendant) on Wood Lake near Oyama in British Columbia. At approximately 2300 on that date, the boat was struck by another power boat owned and operated by John Avery (the second defendant).

The plaintiff and her group of friends (including the second defendant) discussed going out on the lake to watch the sunset. When the plaintiff noticed water in the second defendant’s boat she stated 'I am not going out.' There was then a discussion between the first and second defendant as to whether they would take their boats out on the basis that they knew that the first defendant’s boat did not have any lights on it. The first defendant said he would not be going out.

The second defendant’s boat proceeded about half-way down Wood Lake before shutting the motor off for a few minutes. The second defendant and his passengers did not hear any other boats on the lake at that time. They watched the sunset before heading back to their campsite. The second defendant testified that the lights on his boat illuminated the water for 10-15 feet ahead and therefore proceeded at half-speed.

Meanwhile the first defendant and the plaintiff decided to take his boat out but only travelled a few hundred yards off shore before turning the motor off and staying where they were for 10 minutes before the collision. The first defendant said he saw the second defendant’s boat approaching but assumed it would stop prior to any collision and did not take any evasive action.

The plaintiff was struck in the head by the second defendant’s power boat as it collided with and went over the top of the first defendant’s power boat. She suffered personal injuries and lost income as a result of the accident.

The matters in issue were the limitation of liability under the Canada Shipping Act RSC 1970 (the Act), and if liability was found, whether liability should be apportioned between the first and second defendants or if one defendant was solely liable, and the quantum of damages.

Held: Judgment for the plaintiff. The collision between the two boats was caused by the negligence of the first defendant. There was no contributory negligence on the part of the plaintiff. The first defendant may not limit his liability pursuant to ss 647 and 649 of the Act.

Section 649 of the Act (and the corresponding section in the English statute) were enacted with the International Convention Relating to the Limitation of Liability of Owners and of Sea-going Ships (LLMC 1957) in mind. Article 6 of the LLMC 1957 provides:

Article 6.2: Subject to paragraph (3) of this Article, the provisions of this Convention shall apply to the charterer, manager and operator of the ship, and to the master, members of the crew and other servants of the owner, charterer, manager or operator acting in the course of their employment, in the same way as they apply to an owner himself …

Article 6.3: When actions are brought against the master or against members of the crew such persons may limit their liability even if the occurrence which gives rise to the claims resulted from the actual fault or privity of one or more of such persons. If, however, the master or member of the crew is at the same time the owner, co-owner, charterer, manager or operator of the ship the provisions of this paragraph shall only apply where the act, neglect or default in question is an act, neglect or default committed by the person in question in his capacity as master or as member of the crew of the ship.

In Walithy Charters Ltd v Doig (1979) 15 BCLR 45 (SC), Fulton J reasoned that the intent of this article is clear: that owners should be able to limit their liability for damages caused by their negligence or fault only if at the time in question they were acting in their capacity as masters, and lends support to the interpretation of s 649 of the Act extends the limitation to 'any person' including owners who are at fault, only if it is established that at the relevant time they were acting in their capacity as masters rather than owners.

In this case there was no decision to turn lights out on the first defendant’s boat because at that time, the boat did not have any lights and this information was only available to the first defendant as owner. He made a conscious decision to proceed out onto Wood Lake without any lights on his boat, knowing the danger and risks of going out on a lake in the evening with night approaching. The decision to proceed out onto Wood Lake without any lights on the boat was made by the first defendant while ashore. Therefore the first defendant as owner has failed to discharge the burden of establishing that he was in no way at fault for what occurred in this boating accident. Therefore he is not qualified for the limitation of liability provided in s 647. The collision between the two boats was caused by the negligence of the first defendant in that he failed to have his boat properly lit or have any operational lights on it contrary to the Small Vessel Regulations.