A derelict 570-ton motor vessel previously owned by Inter Coast Towing Ltd, the Chilcotin Princess, had been moored at an old cannery wharf in Namu, British Columbia, for many years until early March 2015; the wharf was located on foreshore leased to Namu Properties Ltd. Three inspections in 2014 revealed the vessel listing to one side and the presence of several industrial barrels with unknown contents on the adjacent wharf. The communications that ensued recommended the removal of both the vessel and the barrels. However, no action was taken as of 24 February 2015.

From 13-16 March 2015, the Canadian Coast Guard took appropriate action to remove all accessible oil and other hydrocarbons from the vessel to prevent or minimise oil pollution damage at the cost of CAD 137,680.88.

In April 2015, Her Majesty the Queen in Right of the Province of British Columbia (the petitioner) had the Chilcotin Princess towed to Prince Rupert, British Columbia, where it was dismantled. Inter Coast was dissolved on 6 January 2014 for failure to file annual company reports. Hence, the Chilcotin Princess vested in the petitioner. The Administrator of the Ship-source Oil Pollution Fund (respondent) submitted that it had, under the Business Corporations Act, SBC 2002, c 57 (the BCA) and the Marine Liability Act, SC 2001, c 6 (the MLA), a subrogated claim on behalf of the Ship-source Oil Pollution Fund (the SOPF) against the petitioner based on the reimbursement from the SOPF of the Coast Guard's costs related to its action to prevent or minimise oil pollution from the vessel.

The petitioner sought to have Inter Coast restored to the Register of Companies, with two qualifications: 1) it was deemed to have continued in existence as if it had never been struck off the Register and dissolved; and 2) with prejudice to any rights the respondent or any other person might have acquired against the petitioner in respect of the Chilcotin Princess. The respondent did not oppose the restoration of Inter Coast but required that any such restoration to be done 'without prejudice' to its rights acquired against the petitioner during the dissolution hiatus.

Held: Petition granted without the two qualifications.

Section 77(1)(b) of the MLA provides that the 'owner of a ship is liable ... for the costs and expenses incurred by the Minister of Fisheries and Oceans, a response organization within the meaning of section 165 of the Canada Shipping Act, ... or any other person in Canada in respect of measures taken to prevent, repair, remedy or minimize oil pollution damage from the ship, including measures taken in anticipation of a discharge of oil from it, to the extent that the measures taken and the costs and expenses are reasonable, and for any loss or damage caused by those measures'.

Section 91(1) of the MLA provides that 'owner':

(a) in relation to a ship subject to the Civil Liability Convention, has the same meaning as in Article I of that Convention;

(b) in relation to a ship subject to the Bunkers Convention, has the same meaning as the definition Shipowner in Article 1 of that Convention; and

(c) in relation to any other ship, means the person who has for the time being, either by law or by contract, the rights of the owner of the ship with respect to its possession and use.

Section 103(1) of the MLA further provides that in 'addition to any right against the Ship-source Oil Pollution Fund under section 101, a person who has suffered loss or damage or incurred costs or expenses referred to in section 51, 71 or 77, Article III of the Civil Liability Convention or Article 3 of the Bunkers Convention in respect of actual or anticipated oil pollution damage may file a claim with the Administrator for the loss, damage, costs or expenses'. Section 106(3) states that:

If a claimant accepts the offer of compensation from the Administrator,

(a) the Administrator shall without delay direct payment to be made to the claimant of the amount of the offer out of the Ship-source Oil Pollution Fund;

(b) the claimant is then precluded from pursuing any rights that they may have had against any person in respect of matters referred to in sections 51, 71 and 77, Article III of the Civil Liability Convention and Article 3 of the Bunkers Convention in relation to the occurrence to which the offer of compensation relates;

(c) the Administrator is, to the extent of the payment to the claimant, subrogated to any rights of the claimant referred to in paragraph (b); and

(d) the Administrator shall take all reasonable measures to recover the amount of the payment from the owner of the ship, the International Fund, the Supplementary Fund or any other person liable and, for that purpose, the Administrator may commence an action in the Administrator’s or the claimant’s name, including a claim against the fund of the owner of a ship established under the Civil Liability Convention and may enforce any security provided to or enforceable by the claimant.

The Court held that the petitioner was the 'owner' of the Chilcotin Princess in terms of s 91(1)(c) of the MLA after Inter Coast's dissolution for the purposes of liability and compensation and the SOPF. The respondent acquired a legitimate claim against the petitioner under the MLA after the dissolution of Inter Coast for the Coast Guard's incurred costs and expenses. The respondent had a subrogated claim against the petitioner which arose after Inter Coast's dissolution (s 103(1)). The respondent subrogated those rights and the respondent should take all reasonable measures to recover the amount of the payment from the petitioner (s 106(3)(c)-(d)).

A restoration was 'without prejudice to the rights acquired by persons before the restoration' unless the court ordered otherwise (s 370(7) of the BCA). The onus was thus on the petitioner to establish that the restoration should be with prejudice to the rights of the respondent arising after the dissolution of Inter Coast. Since the respondent's claim against the petitioner would be defeated, a with prejudice restoration would represent a tactical, if not significant, advantage for the petitioner. Accordingly, the Court did not exercise its discretion to restore Inter Coast with prejudice to the respondent's rights.