The plaintiff sought to establish a limitation fund under the Marine Liability Act, SC 2001, c 6 (the Act) in respect of a collision between two pleasure craft at Colpoy's Bay on 31 August 2019. The defendants denied liability, and counterclaimed for the stay or dismissal of the Federal Court action and their costs. Three issues arose: whether (1) a limitation fund should be established; (2) the Federal Court proceedings should be dismissed or stayed; and (3) proceedings in any other Court should be enjoined.

Held: The plaintiff's motion is granted in part, with costs. The motion to enjoin the defendants, and any other person, from commencing or continuing proceedings before any court other than the Federal Court against the plaintiff in respect of the collision is granted. The defendants' motion is dismissed.

The defendants agree that a limitation fund be established, in light of the provisions of the Act. Part 3 of the Act incorporates by reference the LLMC 1996. Section 25 of the Act defines 'ship' as follows:

(1) For the purposes of this Part and Articles 1 to 15 of the Convention,

(a) ship means any vessel or craft designed, used or capable of being used solely or partly for navigation, without regard to method or lack of propulsion, and includes

(i) a ship in the process of construction from the time that it is capable of floating, and

(ii) a ship that has been stranded, wrecked or sunk and any part of a ship that has broken up, but does not include an air cushion vehicle or a floating platform constructed for the purpose of exploring or exploiting the natural resources or the subsoil of the sea-bed;

(b) the definition shipowner in paragraph 2 of Article 1 of the Convention shall be read without reference to the word 'seagoing' and as including any person who has an interest in or possession of a ship from and including its launching; and

(c) the expression 'carriage by sea' in paragraph 1(b) of Article 2 of the Convention shall be read as 'carriage by water' ...

(2) In the event of any inconsistency between sections 28 to 34 of this Act and Articles 1 to 15 of the Convention, those sections prevail to the extent of the inconsistency.

The definition of 'maritime claim' in s 24 of the Act is cross-referenced to arts 2.1 and 2.2 of the Convention as follows: 'maritime claim means a claim described in Article 2 of the Convention for which a person referred to in Article 1 of the Convention is entitled to limitation of liability'.

Article 11 of the Convention provides for the creation of a limitation fund. Section 32 of the Act sets out the procedure to be followed in the establishment of a limitation fund under arts 11-13 of the Convention, as follows:

(1) The Admiralty Court has exclusive jurisdiction with respect to any matter relating to the constitution and distribution of a limitation fund under Articles 11 to 13 of the Convention. ...

(2) Where a claim is made or apprehended against a person in respect of liability that is limited by section 28, 29 or 30 of this Act or paragraph 1 of Article 6 or 7 of the Convention, that person may assert the right to limitation of liability in a defence filed, or by way of action or counterclaim for declaratory relief, in any court of competent jurisdiction in Canada.

'Admiralty Court' is defined in s 2 of the Act as meaning the Federal Court. It is clear from the language of s 32 of the Act that only the Federal Court has jurisdiction with respect to 'any matter relating to the constitution and distribution of a limitation fund'. The combined effect of arts 9 and 11 of the Convention, which forms part of the Act, is that only one fund is established to answer the 'aggregate of all claims which arise on any distinct occasion'.

There is no evidence filed to contradict the plaintiff's claim that his vessel weighs less than 300 gross tons. Accordingly, the limitation amount set out in s 29(a) of the Act applies. Section 29(a) provides as follows: 'The maximum liability for maritime claims that arise on any distinct occasion involving a ship of less than 300 gross tonnage, other than claims referred to in section 28, is … $1,000,000 in respect of claims for loss of life or personal injury'. The limitation fund is available for the benefit of the shipowner, as determined in the limitation proceedings and for 'any person for whose act, neglect or default' it is responsible: art 9.1.a.

A limitation fund should be established in this case. The plaintiff has proposed a guarantee bond be filed in an amount to be set by the Court, ie CAD 1,000,000 plus interest pursuant to s 33(5). The Court can determine the form of the guarantee pursuant to s 33(4)(b).

As to the defendants' motion to stay proceedings, the Federal Court has full jurisdiction over the defendants' claims. The defendants can fully pursue their claims in this Court. Their submissions that duplication and inconsistency should be avoided, without more, do not demonstrate that they will be prejudiced if the stay of proceedings in this Court is denied. On the other hand, a stay of the limitation action would work an injustice to the plaintiff. There is a presumptive right to limit liability. Section 33 of the Act allows a party seeking to limit liability to bring its own action in this Court, and to apply for directions. The very purpose of the limitation regime is to avoid multiple proceedings. Staying these proceedings would restrict the plaintiff in advancing his limitation action. Although he could raise limitation as a defence in the defendants' action in the Ontario Superior Court of Justice, he can only address the constitution of the limitation fund in the proceedings before this Court. If the right to limit is not broken and liability is limited, the limitation fund will be distributed. These aspects of a limitation action, that is the constitution and distribution of a fund, are exclusively within the jurisdiction of this Court.

The plaintiff seeks an order enjoining the defendants, and any other person, from commencing or continuing proceedings before any court other than this Court against him in respect of the collision. His motion is brought pursuant to s 33 of the Act, which provides:

(1) Where a claim is made or apprehended against a person in respect of liability that is limited by section 28 or 29 of this Act or paragraph 1 of Article 6 or 7 of the Convention, the Admiralty Court, on application by that person or any other interested person, including a person who is a party to proceedings in relation to the same subject-matter before another court, tribunal or authority, may take any steps it considers appropriate, including

(a) determining the amount of the liability and providing for the constitution and distribution of a fund under Articles 11 and 12 of the Convention;

(b) joining interested persons as parties to the proceedings, excluding any claimants who do not make a claim within a certain time, requiring security from the person claiming limitation of liability or from any other interested person and requiring the payment of any costs; and

(c) enjoining any person from commencing or continuing proceedings in any court, tribunal or authority other than the Admiralty Court in relation to the same subject-matter.

The language of s 33 of the Act is broad. Section 33(1) says that the 'Admiralty Court … may take any steps it considers appropriate', including the extraordinary remedy of enjoining proceedings before any other court, tribunal, or authority. The availability of this remedy indicates the value attached to the importance of adjudicating all issues relevant to the constitution and distribution of a limitation fund in one forum. Proceeding in one Court contributes to the expeditious disposition of issues relating to the limitation of liability. The applicable test under s 33(1) of the Act is that of 'appropriateness'.

In this case, depriving the defendants of the option to have their claims considered by a jury is outweighed by the inconvenience, expense and repetition that would be required by determination of the issue of limitation in this Court, and determination of the issue of liability in the Ontario Superior Court of Justice. The defendants can pursue their claim for personal injury and property damage in the Federal Court. Those claims can be accommodated by filing pleadings in this action, including counterclaims. Contrary to the defendants' submissions, the Federal Court is the most efficient forum to determine all the issues relative to the collision. It is beyond doubt that the Federal Court has jurisdiction over the issue of liability. Only the Federal Court has jurisdiction over the constitution and distribution of a limitation fund. While such a fund may be incidental to the determinations of liability and limitation, having the entirety of the proceedings considered in one Court would be the most efficient.