On 27 March 1983, John Whitbread (the plaintiff/respondent) took a 32-foot pleasure craft Calrossie from Coal Harbour located in the Inner Vancouver Harbour. The Calrossie was owned by Robert Greenwood and John Horn (the second and third defendants/appellants) and registered as a ship under the Canada Shipping Act. The appellant set out for Wigwam Inn, just north of the city of Vancouver. On the way the plaintiff/respondent asked his passenger, Robert Walley (the first defendant/appellant) to take over the helm. The plaintiff/respondent then moved to a seat away from the controls and fell asleep.

While the first defendant/appellant was at the helm, the Calrossie hit rocks in an area of water known as Indian Arm. The plaintiff/respondent suffered spinal injuries that resulted in quadriplegia. The plaintiff/respondent sued the respondents in tort. The first defendant/appellant denied negligence but pleaded contributory negligence and applied for a declaration that he could limit liability under ss 647 and 649 of the Canada Shipping Act RSC 1970 c S-9 (the Act) (which mirror the provisions in the LLMC 1957) to approximately CAD 103,000 based on the statutory formula and the value of the gold franc at the time of the trial.

The trial Judge rejected the defendants' contention that the Act limited their liability. He held that Parliament did not intend ss 647 and 649 to apply to pleasure craft such as the Calrossie, and 'read down' the sections to exclude limitation of liability in respect of non-commercial ships used exclusively for pleasure: see Whitbread v Walley (CMI972).

The defendants appealed.

Held: Appeal allowed.

Section 2 of the Act defines 'ship' (as used in ss 647 and 649) as:

1. every description of vessel used in navigation and not propelled by oars; and
2. for the purpose of Part 1 and sections 647 to 652, every description of lighter, barge or like vessel used in navigation in Canada however propelled.

The Calrossie falls within the definition of a 'ship' in the Act and consequently ss 647 and 649 apply. Parliament having clearly manifested its intention that the Act shall apply by an unambiguous definition, there is no room for reading down the statute based on speculation as to the purpose of the provision in question. The intention or purpose of Parliament must derive from the words used in the statute. Where these are plain and unambiguous, the Court may not circumvent the plain meaning by reference to supposed legislative intent.

Where the Act intends to exempt pleasure yachts, it does so expressly (see ss 8, 109(1), 109(3), 436, 466).

Section 649 limits the liability of 'any person acting in the capacity of master or member of the crew of a ship'. It is not necessary to show that the first defendant/appellant was formally employed as the master of the vessel. The words 'in the capacity of' clearly indicate the intention of Parliament that the applicability of ss 647 and 649 is determined, not by a person’s formal designation, but by what function they are carrying out.

The function of a master of a vessel relates to the operation and navigation of a vessel. The facts permit no other conclusion than that the first defendant/appellant was acting in the capacity of master or crew member at the time of the accident. Accordingly, he is entitled to the limitation of liability conferred by ss 647 and 649.

Federal power to legislate with respect to navigation and shipping is not confined to commercial shipping. Sections 647 and 649 are valid federal legislation under s 91(1) of the Consitution Act 1867 and apply to pleasure craft such as the Calrossie.

Sections 647 and 649 of the Canada Shipping Act do not infringe s 7 of the Charter of Rights and Freedoms. Section 15 of the Charter does not apply because it was not in force at the time of the accident. Finally, ss 647 and 649 do not infringe the equality provisions of the Bill of Rights.

[For the subsequent unsuccessful appeal to the Supreme Court, see Whitbread v Walley (CMI961).]