After a day of recreational boating, the plaintiff was injured when the defendant (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 plaintiff in the eye.

The plaintiff brought a personal injury action against the defendant for USD 2.2 million but the defendant applied for his liability to be limited to less than USD 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). The plaintiff challenged the limitation proceedings.

The Court of first instance held in favour of the defendant that the claim was a maritime claim and was subject to the limitation of liability under s 577. The plaintiff appealed.

Held: Appeal dismissed.

The first issue was whether the subject matter under consideration in the case is so integrally connected to maritime matters so as to fall within legitimate Canadian maritime law within federal legislative competence. In other words, were the plaintiff’s injuries and the incident which led to that sufficiently linked to navigation so as to constitute a maritime matter within the ambit of Canadian maritime law.

In deciding this issue, Décary​ JA dissented and held that the events which led to the plaintiff’s injuries were not sufficiently linked to navigation so as to constitute a maritime matter within the ambit of Canadian maritime law. He took the view that the accident happened on land and had nothing to do with navigation or with shipping.

The majority (Nadon and Sexton JJA) held that Décary​ JA took a very narrow view of the above issue as well as the federal court’s maritime jurisdiction. Nadon JA was of the view that the events leading to the injuries, ie the launching of a pleasure boat into a lake and its removal from the water after a day of navigation, constitute land-based activities that are sufficiently connected with pleasure craft navigation and thus are subject to Canadian maritime law. Nadon JA held that while commercial ships do not typically come out of the water, a pleasure craft would usually be removed from the water for winter storage or road transport. The removal of the pleasure craft from the water and the subsequent securing of the engine were events which were connected with navigation and thus the claim was subject to Canadian maritime law.

Turning to the second issue as to whether the claim in personal injury occurred 'in direct connexion with the operation of the ship' (art 2.1.a of the LLMC 1976), Nadon JA held that the English words 'in direct connexion with', like the French text 'en relation directe avec' should be given a very broad meaning. Although the words 'direct' and 'directe' found in the English and French texts of art 2.1.a of the Convention restrict somewhat the breadth of the words 'in connexion with', these words still have a broad meaning. He further held that the definition of 'operation' (in French 'exploitation') includes elements like management, running, governing, administration and supervision. He took the view that the operation of a pleasure craft would include activities arising from the running of the pleasure craft, such as the launching of the pleasure craft into the water, its navigation and its removal from water. Given that the words 'in connexion with' should be given a broad interpretation, Nadon JA found that there was a clear connection or link between the plaintiff's personal injuries and the operation of the pleasure craft. Claims for personal injury should not be limited to those which arise by reason of injuries caused by the vessel itself, such as collisions between two or more ships, the striking of a dock or other object by a ship etc.

[See Isen v Simms 2006 SCC 41 (CMI606) for the successful appeal to the Supreme Court of Canada.]