After a day of recreational boating, the appellant Simms was injured when the respondent Isen (who was the owner of the boat) stretched a bungee cord over the engine cover to secure it in a parking lot near the water and the cord slipped and hit the appellant in the eye.

Simms brought a personal injury action against Isen for CAD 2.2 million. Isen applied for his liability to be limited to less than CAD 1 million under s 577 of the Canada Shipping Act, which is largely based on art 6 of the Convention on Limitation of Liability for Maritime Claims 1976 (LLMC 1976). Simms challenged the limitation proceedings, arguing that Isen was not entitled to limit liability as Simms' claim was not a maritime claim and that federal jurisdiction to allow the limitation of liability could thus not be invoked.

The Federal Court and a majority of the Federal Court of Appeal (see Simms v Isen ​2005 FCA 161 (CMI664)) both held in favour of Isen that the claim was a maritime claim and was therefore subject to limitation of liability under s 577. Simms appealed to the Supreme Court of Canada.

Held: Appeal allowed.

In Canada, maritime law and maritime claims fall within the federal jurisdiction. The mere involvement of a pleasure craft in a tortious incident was insufficient to grant federal jurisdiction to invoke the Canada Shipping Act. The allegedly negligent action was not at all connected with the act of navigating the pleasure craft on Canadian waterways such that there will be federal jurisdiction over the matter. The securing of the engine cover for transport by highway had nothing to do with the navigating of the boat on water but was instead related to preparing the boat to be transported on the highway. Once the boat was secured for the road, it was similar to any other cargo being transported on the highway and the provincial legislature had jurisdiction.

As such, there was no maritime claim involved and there were certainly no claims 'occurring in direct connexion with the operation of [a] ship', which would fall under Pt I of Sch VI of the Canada Shipping Act (which is largely based on art 2 of the Limitation Convention 1976).

Isen was therefore unable to limit his liability as Simms' claim was not a maritime claim.