The plaintiffs, Kirby Offshore Marine Pacific LLC and Kirby Offshore Marine Operating LLC (together, Kirby), commenced an action seeking to limit their liability arising from a ship-source oil pollution incident involving a connected tug and barge. They now bring a motion seeking an order providing direction as to the constitution of a limitation fund, the enjoining of other claims, and other relief. Heiltsuk Hímás and Heiltsuk Tribal Council, each on their own behalf and on behalf of the members of the Heiltsuk First Nation, filed a claim against Kirby and others in the British Columbia Supreme Court (BCSC) pertaining to oil pollution damage arising from the same ship-source incident. Heiltsuk now brings a motion seeking to stay Kirby’s limitation action, brought in this Court, on the basis that it is forum non conveniens. Heiltsuk's BCSC claim also argues that the limits on 'pollution damage', as defined in the Bunkers Convention or, alternatively, the CLC 1992, unjustifiably infringe its rights under s 35 of the Constitution Act 1982 by limiting recovery stemming from impairments of the environment that do not involve losses of profit. This includes precluding compensation for interference with use and enjoyment of Aboriginal harvesting rights and preventing complete compensation for interference with Aboriginal interests. Heiltsuk asserts that the infringements are unjustified because Canada failed to consult with Heiltsuk about the impact of the Bunkers Convention or the CLC on Heiltsuk’s Aboriginal rights.

There are two main issues arising from these two motions which must be determined by this Court:

1. Should Heiltsuk be enjoined from continuing the BCSC claim against Kirby;
2. Should the limitation action brought by Kirby in this Court be stayed?

Held: It is appropriate to enjoin Heiltsuk from proceeding with its BCSC claim against Kirby until the limitation action has been determined, and to exercise this Court’s exclusive jurisdiction to constitute a limitation fund.

The Marine Liability Act (MLA) sets out how maritime claims will be addressed in Canada. Importantly, this includes incorporating into the law of Canada the provisions of international Conventions, to which Canada is a signatory, which permit shipowners to limit their liability for maritime claims, namely the LLMC 1996, the CLC 1992 and the Bunkers Convention.​

There is no real dispute as to the jurisdiction of this Court. The shipowner’s right to limit liability is contained within the provisions of federal legislation, the MLA. There can be no doubt that the limitation action is one of Canadian maritime law. Further, Heiltsuk does not seriously dispute that the Admiralty Court, defined in s 2 of the MLA as the Federal Court, has jurisdiction with respect to any matter relating to the constitution and distribution of a limitation fund under arts 11-13 of the LLMC 1996. Rather, Heiltsuk takes the view that this Court should voluntarily decline its jurisdiction and that its exclusive jurisdiction can be afforded to, and be exercised by, the BCSC, even if the MLA grants this power exclusively to the Federal Court.

In the BCSC claim, Heiltsuk seeks pollution damages under the Bunkers Convention or, alternatively, under the CLC 1992. The pleading of the CLC by Heiltsuk in the BCSC claim is significant for two reasons. First, the limitation of liability, and thus the amount of any limitation fund, under the CLC is higher than under the Bunkers Convention and the LLMC. Second, under s 52(1) of the MLA, the Admiralty Court, being the Federal Court, has exclusive jurisdiction with respect to any matter relating to the constitution and distribution of a limitation fund under the CLC. Thus, if Heiltsuk is asserting a claim under the CLC in the BCSC claim, it is plain that this Court has exclusive jurisdiction over the claim and that the BCSC claim, in that respect, must be enjoined until the limitation action is determined.

Although Heiltsuk asserts that a limitation fund must be subject to a trial not only concerning art 4 of the LLMC (reckless conduct barring a shipowner's right to limit liability), but also with respect to its allegation that the right to limit liability is unconstitutional as it is an infringement on its Aboriginal rights and title, it is clear from the MLA and the LLMC/Bunkers Convention that a limitation trial is concerned with only one thing, and that is whether the shipowner is entitled to limit its liability. This is determined by a trial to assess whether limitation has been broken based on art 4 of the LLMC. A challenge to the limitation regime itself, based on asserted rights, should not preclude that process in these particular circumstances, where the right to limitation has been tied to a claim seeking to establish Aboriginal title and rights.

It is not reasonable for the limitation action to be delayed until after: (1) Heiltsuk’s claim of Aboriginal title and rights has been resolved; (2) the losses that Heiltsuk asserts in the BCSC claim are proven, which will require considerable scientific evidence as to Heiltsuk’s claims of immediate and long-term impacts on fish habitats, ecosystems, and marine resources; and (3) the constitutional question as to the infringement of those rights and whether any infringement is justified is addressed. Rather, it is appropriate that the claims against the plaintiffs in the BCSC claim be enjoined until the limitation action is resolved.

Heiltsuk asserts that it will be prejudiced if the limitation action proceeds. In fact, there is a presumption that a shipowner will be entitled to limit its liability under the LLMC or Bunkers Convention. Further, if Heiltsuk asserts that Kirby are not entitled to limit their liability, the onus is on Heiltsuk to establish that the loss resulted from their personal act or omission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result (LLMC, art 4), that is, to break limitation. This is unrelated to Heiltsuk’s claim of Aboriginal title and rights. If limitation is broken, the trial for liability will continue in the BCSC. Recklessness, as well as questions of common ownership of the tug and barge, will already have been established and this will serve to narrow the liability allegations against Kirby. These determinations may also have an impact on whether Heiltsuk will chose to continue to advance its claims relating to Aboriginal title and rights within the BCSC claim.

There is no prejudice to Heiltsuk in proceeding with the limitation action. The BCSC claim is in its infancy. And, while the limitation action is progressing, Heiltsuk can advance its claim of Aboriginal title and rights in the BCSC. Conversely, to require Kirby to wait until Heiltsuk’s claim of Aboriginal rights and interest has been resolved, before a determination is made as to whether Kirby is entitled to limit its liability under the MLA, the LLMC or the Bunkers Convention, is prejudicial to Kirby. Kirby has a right to select the forum in which the limitation action will be heard. Further, the right to limit liability is a presumptive right and is part of international law that provides certainty to shipowners, states, and claimants. It is a balance between the commercial interest of shipowners, their limited ability to successfully deny liability for oil spills and the speedy resolution and payment of qualifying claims. To force Kirby to wait for years, possibly decades, before a determination of its right to limit its liability is made is contrary to the MLA regime. It means that Kirby would be unable to remove this potential and unquantified debt from its books for years to come. Moreover, there is no certainty that in the interim further claimants will not make claims which Kirby would have to address and which would be precluded if the limitation fund is constituted and limitation action is successful. In that event, all claims would have to be made by a specified date, could be paid out of the limitation fund, and further actions would be prohibited.​

Heiltsuk raises the 'one ship or two ships' issue in its submissions, which it asserts is a matter for trial, or at least summary trial. This is a question of whether, at the time of the incident and for purposes of calculating the limitation amount, the tug and barge should be considered as two distinct vessels or as a combined vessel. This determination is significant because the amount of the limitation fund calculated pursuant to art 6 of the LLMC is based on the tonnage of the involved vessel. In this case, it is open to debate as to whether a flotilla exists, given the articulated tug and barge configuration, whether the tug was responsible for the navigation of the barge, and whether the barge contributed to the resultant damage arising from the incident. This issue should be pursued in greater depth within the limitation action. Accordingly, the combined gross tonnage of the tug (302 mt) and barge (4,276 mt) will be used to ascertain the amount of the limitation fund, being 4,578 mt. However, Kirby is not precluded from bringing a preliminary motion in the limitation action seeking to reduce that amount on the basis that the fund should be based only on the tonnage of the tug. If not, this issue will be dealt with in the course of the trial on limitation. The fund will be constituted based on the combined tonnage of the tug and barge together with interest thereon from the date of the incident until the date of the constitution of the fund, pursuant to arts 6.1.b and 11 of the LLMC.​