Mainroad Howe Sound Contracting Ltd (Mainroad) had a contract with the Minister of Transportation and Infrastructure (MTI) to provide highway maintenance on a road beside the Lillooet River. In 2011, Mainroad and MTI became concerned about the stability of the road due to erosion of the riverbank. The Department of Fisheries and Oceans (DFO), MTI, and Mainroad agreed to survey the bank by boat to identify sites that required emergency work. Knight, a senior habitat biologist with DFO, was invited to take part in the survey. Mainroad was unable to find a commercial jet boat operator, so approached Black, who agreed to transport representatives of Mainroad, MTI, and DFO at a rate of CAD 200 per hour. On 18 October 2011, Black's boat struck a sandbar or some other object in the river. Knight was thrown and struck her head. She sued Black, Mainroad, and MTI for personal injuries.

In Knight v Black 2021 BCSC 19 (CMI1157), the trial Judge held that Knight was a 'passenger' who was 'under a contract of carriage', and that all three respondents were 'carriers' as defined by the Maritime Liability Act, SC 2001, c 6 (the MLA), which gives domestic effect to the Athens Convention 1974 in Canada. As a consequence, they were all entitled to limit their liability under the Convention. Knight appealed to the Court of Appeal.

Held: Appeal partially upheld. Knight was a passenger under a contract of carriage, and Black was a carrier whose liability for damages is limited under the Convention. However, Mainroad and MTI were not carriers.

Liability for injuries sustained by passengers during international carriage by sea is governed by the Athens Convention 1974, as amended by the Protocol of 1990. Canada has not formally ratified the Athens Convention, but has adopted arts 1-22, with certain modifications, into federal law by way of the MLA. For instance, s 36 of the MLA extends the application of arts 1-22 of the Athens Convention to Canada's freshwater lakes and inland waterways.

Prior to the adoption of this part of the Athens Convention through the MLA, it was common for carriers to contract out of liability, leaving passengers without a remedy for personal injury and loss of property. The provisions benefit passengers in two ways: first, by precluding carriers from contracting out of liability for negligence causing personal injury or damage to goods; and second, by reversing the onus of proof, making carriers presumptively liable for such losses. The Athens Convention in turn benefits carriers and their insurers by providing clear limits on potential losses.

It is agreed that Black, although not generally a commercial carrier, was operating his vessel for a commercial purpose at the time of the accident, and that Black entered into a contract of carriage with Mainroad to carry its employees and those of MTI. The crux of the appeal is whether Knight was a 'passenger' or 'person' to whom the limitations on liability in s 37 of the MLA applied, and whether Mainroad and MTI were also 'carriers' entitled to the benefit of those limitations.

Knight contends that the Judge erred in concluding that she was a 'passenger' being carried by water 'under a contract of carriage': first, because the contract between Black and Mainroad was a charterparty, and therefore not a contract of carriage at all; and second, because the section only applies to passengers who entered into a contract of carriage and are privy to it, which she says was not the case.

The Judge concluded [73] that an agreement that meets the definition of a 'charterparty' may also constitute a contract of carriage. She rooted her analysis in the definition of a contract of carriage in the Athens Convention, noting [72] that 'nothing in the definition excludes an agreement that has the characteristics of what the secondary sources refer to as a "charterparty"'. The Judge also observed that, although not determinative, Martrade Shipping & Transport v United Enterprises Corp [2014] EWHC 1884 (Comm) referred to the Rome Convention which treats 'single voyage charter-parties' as 'contracts for the carriage of goods'. There is no error in the Judge’s analysis on this point. Even if the agreement between Black and Mainroad could be characterised as a time charter, that would not preclude the agreement from coming within the MLA definition of a 'contract of carriage'.

Knight's submission that since she did not enter into a contract with anyone, she was not a passenger 'under a contract of carriage', is also rejected for two main reasons. First, the Athens Convention does not define a passenger as someone who has entered into a contract of carriage. Rather, it states that a passenger is any person carried in a ship 'under a contract of carriage'. Similarly, s 37(2)(a) of the MLA provides that the Athens Convention applies in respect of 'the carriage by water, under a contract of carriage, of passengers'. As the Judge observed, the placement of the commas in the latter provision delineates 'contract of carriage' from passengers. If the legislature intended Knight's interpretation, this rather awkward phrasing would not have been necessary - it could simply have provided that the Athens Convention applies to 'the carriage by water, under a contract of carriage with passengers'. To similar effect is the definition of 'contract of carriage' in the Athens Convention which focuses on 'the carriage by sea of a passenger', and does not specify that the contract must be made with a passenger.

Second, Knight’s interpretation runs contrary to UK authority. In Fellowes or Herd v Clyde Helicopters Ltd [1997] UKHL 6, the House of Lords considered the interpretation to be given to UK legislation implementing comparable terms in the Warsaw Convention, and found that there was nothing in the legislation requiring the passenger to have been a party to the contract of carriage. Herd was followed in Cairns v Northern Lighthouse Board [2013] CSOH 22 (Scot) (CMI727). The Outer House of the Scottish Court of Session considered the meaning of 'passenger', and in particular whether the person making the claim for damages had to be a party to the contract referred to in the definition, being 'any person carried in a ship under a contract of carriage'. Lord Drummond Young concluded that they did not:

[51] On the authority of Herd, I am of the opinion that the Athens Convention was applicable to the present case. In particular, the [plaintiff] fell within the definition of 'passenger' in article 1.4, in that she was carried in a ship under a contract of carriage. The contract between the [employer] and the [boat owner] amounts in my opinion to a contract of carriage for the purposes of the Convention; the decision in Herd indicates that it is immaterial that the [plaintiff] was not a party to the contract. I was attracted for a time to the view that, because the contract was between the [employer] and the [boat owner] and was for the provision of the entire vessel for the purposes of the [employer], the Convention had no application. I am persuaded by Herd, however, that that argument is not correct; it is plainly held in that case that for a contract of carriage to exist it is immaterial that the particular passenger making the claim is a party to that contract, as long as his or her journey is made in pursuance of such a contract. That would mean that the limitation and time bar provisions of the Convention would apply to the present case.

[Emphasis added.]

Knight seeks to distinguish these cases on the basis that the relevant statutory order in Cairns imposed on the carrier a requirement, on pain of criminal penalty, to notify passengers of the limits on the carrier’s liability under the Athens Convention. In Canada, the MLA imposes no such requirement. Knight contends, therefore, that the only way to inform a passenger of limitations on a carrier’s liability in Canada is to require the passenger to be privy to the contract of carriage. This argument is not compelling. The limit on liability is imposed by statute, not by virtue of the contract of carriage, and nothing in the MLA obliges carriers to include contractual notice of their limited liability. Limiting contracts of carriage to those entered into by passengers directly would thus not guarantee their knowledge of the cap on potential recovery for injuries and losses during carriage. Herd and Cairns are soundly reasoned, and are not distinguishable from the present case.

Knight was a passenger being carried under a contract of carriage between Black and Mainroad when she was injured. She is accordingly subject to the Athens Convention limit on recovery of damages in respect of her claim against Black.

In respect of Knight’s claims against Mainroad and MTI, however, the Judge fell into error in deciding that they were also subject to that limitation, by focusing on the provision in the Athens Convention for two types of carriers and by assuming that entering into a contract to have people transported by boat sufficed to make the contractor a 'carrier'. Black’s Law Dictionary (6th edn, St Paul 1990) defines 'carriage' as 'transportation of goods, freight, or passengers'. A 'carrier' is defined as someone 'engaged in transporting passengers or goods for hire'. The definitions of 'carrier' and 'performing carrier' in the Athens Convention have two elements: the concluding of a contract of carriage and the performance of carriage - the transportation of goods, freight, or passengers. The definitions in the Athens Convention provide that the carriage may be performed by the person entering into the contract, or by an owner, charterer, or operator of a ship 'who actually performs the carriage'.

The Judge appears to have focused on only one element of the definition - the concluding of a contract of carriage. If this were all that was required, it could be said that Mainroad and MTI, having entered into the contract of carriage with Black, were persons by whom a contract of carriage had been concluded. But that ignores the second element of performance of the carriage 'by him or a performing carrier'. Taken together, and in the context of the MLA as a whole, only a person who enters into a contract pursuant to which s/he is obliged to transport passengers or goods is a 'carrier'. To find otherwise would lead to an absurdity. If anyone entering into a contract involving the carriage of people or goods becomes a 'carrier', as the Judge found, those contracting to be transported - ie, passengers - would be carriers.

The present case is illustrative. Assuming Knight had not been invited along that day, it could not sensibly be argued that Mainroad and MTI were carriers. They were, rather, the passengers who contracted to be carried up the river. Black was a carrier, because he had assumed a contractual obligation to transport them. The fact that Mainroad invited Knight to come along on the trip did not change its status. At no point did Mainroad or MTI assume a contractual obligation to Knight to transport her on the river. If the respondents had left the dock that day without Knight on board, neither she nor DFO could have sued them for breach of contract for failing to carry her.

Neither is it sensible to speak of Black as the person 'other than the carrier' who 'performed the carriage'. There was no 'other' entity obligated to perform the carriage who hired him to carry it out as the 'performing carrier'. There were only those who contracted with Black to be carried by him, and Black who contracted to carry them.

Moreover, the provisions in the Athens Convention adopted by the MLA were intended to limit the potential liability of shipowners, ie, those who would be in a position to cause injury or loss during carriage and to contract out of liability. Under the Athens Convention, carriers are presumptively negligent if the loss arises in connection with shipwreck, collision, stranding, explosion or fire, or defect in the ship - matters that generally fall within the control and responsibility of the shipowner. It is difficult to see, on any principled basis, why those who contract on their own behalf or on behalf of their employees to be carried should be presumptively at fault for injuries occurring during carriage by the person who has assumed the obligation to do the transporting.

Mainroad and MTI were not carriers because they had not assumed a contractual obligation to transport passengers. Instead, they were passengers (albeit corporate entities acting through their employees), who had contracted with the shipowner to be transported. This conclusion determines nothing about the potential liability of Mainroad and MTI for the injuries suffered by Knight. It means only that they are neither presumptively liable for Knight’s injuries, nor entitled to the Athens Convention limit on recoverable damages.