On 21 March 2006, the ferry Queen of the North, which was owned by British Columbia Ferry Services Inc (the defendant) ran aground and subsequently sank. Two passengers were never found and were subsequently presumed dead. The defendant settled most of the claims for lost luggage and other personal property. The remaining claims on behalf of the passengers and their dependants in this class action were primarily psychological injury. These passengers were Joshua Snow, Leslie Wilson, Barney Dudoward, Lawrence Mitchell, Frank Bolton and Kirby Jackson (the plaintiffs). This action for damages, one of a number of actions brought as a result of the sinking of the Queen of the North, was commenced on 27 March 2006 on behalf of a number of passengers and their dependants. On 26 November 2007, the action was certified as a class action under the Class Proceedings Act, RSBC 1996, c 50.

The statutory framework governing this action is the Marine Liability Act, SC 2001, c 6 (the Act). Section 37(1) of the Act provides that arts 1-22 of the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea 1974 (Athens Convention 1974), which are set out in Pt 1 of Sch 2 of the Act, have the force of law in Canada. Article 3.1 of the Athens Convention 1974 provides that the carrier is liable for the damage suffered as a result of personal injury to a passenger and the loss of, or damage to, luggage if the incident is due to the fault or neglect of the carrier or its servants acting within the scope of their employment. Article 3.3 presumes fault or neglect, subject to proof to the contrary, if the injury or loss arises from, among other things, the shipwreck or collision of the ship.

Articles 7 and 8 of the Convention provide monetary limits on the liability of the carrier and its servants stated in 'units of account', the value of which is based on Special Drawing rights (SDRs) as defined by the International Monetary Fund. Article 11 of the Convention entitles a servant of a carrier to claim the benefit of the limitation of liability to which the carrier is entitled if it acted within the scope of its authority. Article 13 of the Convention deprives carriers and servants of the benefit of the limits of liability provided by arts 7, 8 and 11 if it is proven that the damage resulted from an act or omission 'done with the intent to cause such damage, or recklessly and with knowledge that such damage would probably result'.

The defendant admitted that it was liable for the sinking of the ferry and any damages proven to have resulted from the sinking that were recoverable under the Act. The defendant abandoned its position that the Athens Convention 1974 precludes recovery for damages of a psychological nature [for clarification of this point, see Kotai v Queen of the North (Ship) 2009 BCSC 1604 (CMI1078)].

There was no issue that the defendant owed the plaintiffs a duty of care or that the defendant breached that duty of care and that it was vicariously liable for any loss and damage that was proven to have resulted from its employees' negligence. The issues were whether the plaintiffs suffered damage that was compensable at law and whether the defendant’s breach of its duty of care caused that damage in fact and at law.

Held: Claims of four plaintiffs are dismissed and claims of two plaintiffs are allowed.

After reviewing the evidence presented, the Court found that:

1) Joshua Snow was not entitled to compensation from the defendant for his emotional upset;

2) Leslie Wilson’s emotional reaction did not constitute a psychological injury for which the defendant must compensate him;

3) Barney Dudoward’s claim was allowed and he was awarded CAD 12,000;

4) Lawrence Mitchell failed to establish any compensable psychological injury;

5) Frank Bolton’s claim was allowed and assessed at CAD 7,500 and

6) Kirby Jackson’s claim for compensation must fail.

[For Supplementary Reasons for Judgment in this case see Kotai v Queen of the North (Ship) 2009 BCSC 1604 (CMI1078)].