Decisions

TATC File No. MA-009-37
MoT File No. A20090105-200-00018

TRANSPORTATION APPEAL TRIBUNAL OF CANADA

BETWEEN:

Atlantic Towing Limited, Applicant

- and -

Minister of Transport, Respondent

LEGISLATION:
Canada Shipping Act, 2001, S.C. 2001, c. 26, paragraph 106(2)(a


Review Determination
Barrie LePitre


Decision: November 3, 2009

Citation: Atlantic Towing Limited v. Canada (Minister of Transport), 2009 TATCE 31 (review)

Heard at Halifax, Nova Scotia, on June 2, 2009

Held:

Count 1 − The Minister of Transport has proven, on a balance of probabilities, that Atlantic Towing Limited has contravened paragraph 106(2)(a) of the Canada Shipping Act, 2001. I confirm the monetary penalty of $6000, as imposed by the Minister.

Counts 2 to 8 − The Minister of Transport did not prove the allegations that Atlantic Towing Limited has contravened paragraph 106(2)(a) of the Canada Shipping Act, 2001. Therefore, I dismiss the monetary penalty of $42 000, as imposed by the Minister.

The total amount of $6000 is payable to the Receiver General for Canada and must be received by the Tribunal within 35 days of service of this determination.

I. BACKGROUND

[1] The notice of violation which was the subject of the review hearing is dated January 6, 2009 and was issued to Atlantic Towing Limited, as authorized representative of the vessel Atlantic Oak. The notice of violation indicates that, pursuant to section 229 of the Canada Shipping Act, 2001 (Act), the Minister of Transport has reasonable grounds to believe that Atlantic Towing or the Atlantic Oak has committed the violations specified in schedule A to the notice of violation; such violations have been designated pursuant to the Administrative Monetary Penalty Regulations, SOR-2008-97 (AMPRs), and the procedures in sections 228 to 243 of the Act respecting administrative penalties apply.

[2] In schedule A to the notice of violation, eight counts are specified. Count 1 states as follows:

On or about November 30, 2008, at or near the Industrial Estates Limited Docks (IEL Docks) of the Port of Halifax, Halifax Regional Municipality, in the province of Nova Scotia, Atlantic Towing Limited, being the authorized representative of the vessel ‘Atlantic Oak', failed to ensure that the vessel was inspected for the purpose of obtaining a maritime document required under Part 4 of the Canada Shipping Act, 2001 thereby committing a violation of paragraph 106(2)(a) of that Act.

In particular, the vessel was not inspected for the purpose of obtaining the inspection certificate required under subsection 10(1) of the Vessel Certificates Regulations.

[3] Schedule A specifies the other seven counts in substantially the same way as count 1, except that, in count 2, the date is specified as December 1, 2008 and the place is specified as Pier 9C of the Port of Halifax; in count 3, the date is specified as December 2, 2008; in count 4, the date is specified as December 3, 2008; in count 5, the date is specified as December 5, 2008; in count 6, the date is specified as December 6, 2008; in count 7, the date is specified as December 7, 2008; and in count 8, the date is specified as December 8, 2008. Schedule A also specifies the penalty for each violation as $6000. As a result, the total penalty under the notice of violation is specified as $48 000.

II. LAW

[4] Section 2 of the Act provides the following definitions:

"authorized representative" means, in respect of a Canadian vessel, the person referred to in subsection 14(1) and, in respect of a foreign vessel, the master.

"Canadian maritime document" means a licence, permit, certificate or other document that is issued by the Minister of Transport under Part 1 (General), 3 (Personnel), 4 (Safety), 9 (Pollution Prevention — Department of Transport) or 11 (Enforcement — Department of Transport) to verify that the person to whom or vessel to which it is issued has met requirements under that Part.

"Canadian vessel" means a vessel registered or listed under Part 2 (Registration, Listing and Recording).

[5] Subsection 14(1) and paragraphs 106(2)(a) and 121(1)(s) of the Act state as follows:

14(1) Every Canadian vessel must have a person — the authorized representative — who is responsible under this Act for acting with respect to all matters relating to the vessel that are not otherwise assigned by this Act to any other person.

106(2) The authorized representative of a Canadian vessel shall ensure that

(a) the vessel and its machinery and equipment are inspected for the purpose of obtaining all of the Canadian maritime documents that are required under this Part; and

. . .

121(1) Every person who, or vessel that, contravenes any of the following commits an offence:

(s) a provision of the regulations made under this Part.

[6] Section 210 of the Act provides the applicable definition of "relevant provision":

"relevant provision" means a provision of this Act or the regulations that the Minister is responsible for administering . . .

. . .

[7] Subparagraph 229(1)(b)(i) and paragraphs 232(1)(a) and (b) of the Act state as follows:

229(1) If the Minister has reasonable grounds to believe that a person or vessel has committed a violation, the Minister may

. . .

(b) issue, and cause to be served on the person or vessel, a notice of violation that names the person or vessel, identifies the violation and sets out

(i) the penalty, fixed by or within the range fixed by the regulations made under this Part, for the violation that the person or vessel is liable to pay,

. . .

232(1) A person or vessel served with a notice of violation under paragraph 229(1)(b) must

(a) pay the amount of the penalty; or

(b) within thirty days after being served or any further time that the Tribunal on application allows, file with the Tribunal a written request for a review of the facts of the violation or the amount of the penalty.

[8] Sections 232.1 and 237, subsection 238(2) and paragraphs 244(f) to (h) state as follows:

232.1(1) On receipt of a request filed under paragraph 232(1)(b), the Tribunal must appoint a time and place for the review and must notify the Minister and the person who, or vessel that, filed the request of the time and place in writing.

(2) The member of the Tribunal assigned to conduct the review must provide the Minister and the person or vessel with an opportunity consistent with procedural fairness and natural justice to present evidence and make representations.

(3) The burden is on the Minister to establish that the person or vessel committed the violation referred to in the notice. The person is not required, and must not be compelled, to give any evidence or testimony in the matter.

(4) The member may confirm the Minister's decision or, subject to any regulations made under paragraph 244(h), substitute his or her own determination.

237 Every rule and principle of the common law that renders any circumstance a justification or an excuse in relation to a charge for an offence under a relevant provision applies in respect of a violation to the extent that it is not inconsistent with this Act.

238(2) A person or vessel is liable for a violation that is committed by an employee or agent of the person or vessel acting in the course of the employee's employment or within the scope of the agent's authority, whether or not the employee or agent who actually committed the violation is identified or proceeded against in accordance with this Act.

244 The Governor in Council may, on the recommendation of the Minister, make regulations for carrying out the purposes and provisions of this Part, including regulations

. . .

(f) designating as a violation that may be proceeded with in accordance with sections 229 to 242 the contravention of a relevant provision that is an offence under this Act;

(g) designating violations that, if continued on more than one day, constitute a separate violation for each day on which they are continued

(h) designating violations that may be proceeded with by issuing notices of violation and fixing a penalty or a range of penalties in respect of each such violation, up to a maximum of $25,000 but in any event not greater than the maximum fine if the violation were proceeded with by way of summary conviction;

. . .

[9] Section 10 of the Vessel Certificates Regulations, SOR/2007-31, (VCRs), which are made under the Act, provides as follows:

10. (1) No vessel shall engage on a voyage unless it holds a certificate issued under subsection (2).

(2) On application by the authorized representative of a vessel, the Minister shall issue an inspection certificate to the vessel if the requirements under the Act that apply in respect of the vessel when engaged in its intended service are met.

[10] Section 2 of the AMPRs , which are made under the Act, provides as follows:

2. (1) The contravention of a provision of the Act set out in column 1 of the schedule is designated as a violation that may be proceeded with in accordance with sections 229 to 242 of the Act and by the issuance of a notice of violation.

(2) The range of penalties set out in column 2 of the schedule is the range of penalties in respect of a violation set out in column 1.

(3) If "X" is set out in column 3 of the schedule, a violation set out in column 1 constitutes a separate violation for each day on which it is continued.

[11] In item 47 of the schedule to the AMPRs, paragraph 106(2)(a) of the Act is set out in column 1; $1 250 to $25 000 is the range of penalties set out in column 2; and no "X" appears in column 3.

[12] Subsection 15(5) of the Transportation Appeal Tribunal of Canada Act, S.C. 2001, c. 29, provides as follows:

15.(5) In any proceeding before the Tribunal, a party that has the burden of proof discharges it by proof on the balance of probabilities.

III. DOCUMENTARY EVIDENCE

A. Minister of Transport

[13] No documentary evidence was submitted by the Minister.

B. Applicant

[14] Counsel for the applicant, with the concurrence of the Minister's representative, submitted a statement of admissions of Atlantic Towing that contains 10 items. Items 1 and 2 were being admitted as to their truth and relevance, while items 3 to 10 were being admitted as to their truth, but not as to their relevance (exhibit A-1). An exhibit book of Atlantic Towing was presented as evidence (exhibit A-2). It contains 21 tabs consisting of various documents issued from Transport Canada and various email messages.

[15] The statement of admissions of Atlantic Towing states as follows:

Statement of Admissions of Atlantic Towing Limited

Atlantic Towing Limited admits THAT:

1.    It is the authorized representative for the vessel Atlantic Oak bearing IMO number 9295672.

2.    It is the registered owner of the vessel Atlantic Oak bearing IMO number 9295672.

3.    That the Atlantic Oak made a voyage on November 30, 2008, at or near the Industrial Estates Limited Docks of the Port of Halifax from approximately 10:12-12:37 and again from 20:53‑22:26.

4.    That the Atlantic Oak made a voyage on December 1, 2008, at or near Pier 9C of the Port of Halifax from approximately 07:02-10:26.

5.    That the Atlantic Oak made a voyage on December 2, 2008, at or near the Industrial Estates Limited Docks of the Port of Halifax from approximately 07:04-07:41.

6.    That the Atlantic Oak made a voyage on December 3, 2008, at or near the Industrial Estates Limited Docks of the Port of Halifax from approximately 05:23-07:47 and 17:56-19:32.

7.    That the Atlantic Oak made a voyage on December 5, 2008, at or near the Industrial Estates Limited Docks of the Port of Halifax from approximately 05:32-07:43 and 15:27-17:08.

8.    That the Atlantic Oak made a voyage on December 6, 2008, at or near the Industrial Estates Limited Docks of the Port of Halifax from approximately 09:27-11:57.

9.    That the Atlantic Oak made a voyage on December 7, 2008, at or near the Industrial Estates Limited Docks of the Port of Halifax from approximately 12:16-14:32.

10. That the Atlantic Oak made a voyage on December 7-8, 2008, at or near the Industrial Estates Limited Docks of the Port of Halifax from approximately 22:13 (December 7) – 00:10 (December 8).

[16] There was agreement between the parties that the items in the exhibit book be entered into evidence without proof of the individual items.  

IV. ORAL EVIDENCE

A. Minister of Transport

[17] The Minister's representative called no witnesses, relying on:

  • the admissions of the applicant that it is the authorized representative and registered owner of the Atlantic Oak;
  • the admissions of the applicant that the Atlantic Oak operated on each of the dates alleged in the notice of violation; and
  • the expiration of one of the inspection certificates included in the exhibit book, being the last inspection certificate issued to the Atlantic Oak before the dates of the alleged violations.

B. Applicant

(1) Ronald William Stever

[18] The Minister's representative having called no witnesses, counsel for the applicant called Ronald William Stever as a witness and, with the agreement of the Minister's representative, was allowed to put leading questions to Inspector Stever in the nature of a cross‑examination.

[19] Inspector Stever is a marine safety inspector with Transport Canada. He indicated that his duties are to inspect and certify vessels. He agreed that his tasks include "inspections which, if satisfactory, lead to the issuance of inspection certificates" under section 10 of the VCRs.

[20] Inspector Stever's attention was brought to a document in the exhibit book, which he agreed was an inspection certificate in respect of the Atlantic Oak, originally issued in October 2007 (October 30, 2007), with an expiry date of August 13, 2008 (certificate 1 at tab 1). Inspector Stever was asked what inspections, as a matter of routine or departmental practice, would support a document of that nature. He indicated that it would be a complete periodic inspection. Inspector Stever was also asked about stamped and handwritten entries on that certificate. He agreed that Clement Vallieres, another marine safety inspector, appears to have extended the certificate to expire on October 29, 2008, pending a request regarding a dry‑docking requirement (certificate 1A at tab 2). Inspector Stever was asked about another handwritten notation on that certificate, further extending it to expire on November 15, 2008 (certificate 1B at tab 2), and appearing to have been signed by A.K. Knight, whom Inspector Stever identified as Captain Alan Knight, another marine safety inspector. The original version of that inspection certificate, which also appears as a separate item in the exhibit book, will be referred to as "certificate 1", the extended version will be referred to as "certificate 1A" and the further extended version will be referred to as "certificate 1B".

[21] Inspector Stever indicated that the further extension (to November 15, 2008) was made on the occasion of the annual periodic inspection of the vessel, by Captain Knight, assisted by Inspector Stever, probably on October 29, 2008. He agreed that the reason that they were there "was to perform the inspection, which, if successful or if satisfactory, would lead to a renewal of the certificate". At first, the two inspectors had considered a one-week extension, but because the vessel was going to be away for eight to ten days, they decided on a longer extension to allow more time to determine the extent of some regulatory non-conformance identified during the attendance at the vessel on or about October 29, 2008. Inspector Stever explained that it is becoming normal practice for an attendance at the vessel to occur, giving inspectors a certain level of comfort with the vessel, and then for follow-up regarding required documentation and information to be addressed by means other than further attendance, such as by email.

[22] Between November 4 and 14, 2008, there were various email messages between the chief engineer of the vessel and Inspector Stever, relating to efforts on behalf of both to address follow-up items relating to the inspection. To allow more time for some of the follow-up, another inspection certificate was sent to the vessel on November 14, 2008. Inspector Stever identified, in the exhibit book, an inspection certificate which bears a date of October 29, 2008 (certificate 2 at tab 12) and which was valid until November 29, 2008, as the certificate sent November 14, 2008. (In the following paragraphs, the certificate which was valid until November 29, 2008, will be referred to as "certificate 2".)

[23] Inspector Stever was asked about the following portion of the paragraph that appears under the heading "Additional vessel limitations" on certificate 2:

No international voyages until the vessel meets the requirements of the Vessel Clearance Regulations. This Certificate is short termed pending a review of the regulatory requirements for this vessel as it relates to approved plans. . . .

He indicated that to his knowledge there were no approved plans for the vessel. While the chief engineer of the vessel provided him with some additional information, the chief engineer did not give him any plans.

[24] Inspector Stever was then asked about an email of November 18, 2008, that he sent to Johann Belcher, who, at that time, was the applicant's vessel superintendent for the Atlantic Oak. With this email, Inspector Stever attached, for discussion, a partially-completed marine safety notice (SI-7) in respect of the Atlantic Oak, listing 12 items as deficiencies pursuant to various regulations. The partially completed SI-7 document did not include due dates for rectification of any of the 12 items (tab 13). Inspector Stever testified that he did not hear from anyone in response to the request for discussion of the SI-7 items. On December 2, 2008, he attempted to send an email to Mr. Belcher, in which he indicated:

It is my understanding that your Safety Inspection Certificate was short termed to expire on November 29, 2008. Please find attached a copy of the SI-7 items which are to be addressed prior to extension of the Safety Inspection Certificate. A copy of the post inspection report and finalized division III report are also included for your information.

[25] He received a message that the email was undeliverable. He then forwarded it to the vessel's engineer, on December 2, 2008, requesting that he forward it to the captain of the vessel and his shore side representative (tab 16). On December 3, 2008, Inspector Stever sent again his email of December 2, 2008, to Mr. Belcher (tab 17). In the still unsigned SI-7 document attached to the email of December 2, 2008, there was a 13th deficiency item, which had not been in the partially-completed version of that document sent to the applicant on November 18, 2008. Each of the items had due dates, some of them being November 28, 2008.

[26] On December 8, 2008, Inspector Stever received a call from a person who identified himself as the captain of the vessel, and who was concerned about the SI-7 items and his certificate. Inspector Stever replied that he was not involved with that vessel any longer, that he had completed his inspection and that the person should contact his (Inspector Stever's) manager.

[27] Asked if it had come to his attention that the chief engineer of the vessel had hand delivered a set of drawings, Inspector Stever acknowledged that, at some point, he had become aware that drawings for the vessel were provided to the Transport Canada office.

(2) Johann George Belcher

[28] Mr. Belcher has been a technical manager with the applicant since December 1, 2008, and vessel superintendents report to him. During the months prior to that, he was a vessel superintendent with the applicant. He managed the vessels assigned to him, regarding availability and reliability of crew, certification, maintenance, supplies and general running of the vessels. With respect to certification of vessels, his responsibilities were to monitor expiry dates and compliance, and to make the necessary arrangements to have the certificates updated and the vessel inspected. As he was the superintendent of the Atlantic Oak, the captain and the chief engineer of the vessel reported to him.

[29] Mr. Belcher confirmed that the extension shown on certificate 1A was to allow for the resolution of a dry-docking requirement. He indicated that the captain of the vessel would have arranged for an inspection on or before October 29, 2008, the expiry date of certificate 1A. The chief engineer of the vessel informed Mr. Belcher that there were some outstanding items from the inspection that was carried out that day, and that the chief engineer had responded to them by email. He indicated that the extension given by certificate 1B was to allow for follow-up on the outstanding items. He understood that everything that Transport Canada had requested had been addressed. Then, there was a conversation with Inspector Stever whereby Mr. Belcher found out that some of the follow-up items had not gotten through the firewall at Transport Canada and whereby Mr. Belcher indicated to Inspector Stever that, when the vessel returned from Port Hawkesbury, Nova Scotia, Mr. Belcher would try to ensure that the outstanding information would be communicated to Inspector Stever at the vessel or by delivery to his office.

[30] With respect to the imminent expiry of certificate 1B on November 15, 2008, Inspector Stever understood that it was not possible to inspect the vessel at that time in the Port of Halifax. He then gave an extension to allow for return of the vessel and follow-up on outstanding items. Inspector Stever then faxed certificate 2 to the Transport Canada office in Port Hawkesbury for delivery to the vessel, and it was delivered. Mr. Belcher's intention, as to what would be done between November 14 and 29, 2008, with regard to the certificate, was: "That the vessel would return to Halifax, and that we would arrange for Inspector Stever or Mr. Knight to attend the vessel, and to have clarity on the outstanding items, and hopefully issue a full certificate".

[31] After being diverted to Yarmouth, Nova Scotia (because of an incident) on its return voyage to Halifax, the ship eventually arrived in Halifax at 10:35 p.m. on Sunday, November 22, 2008. Mr. Belcher was also asked about the following portion of the text that appears under the heading "Additional vessel limitations" in certificate 2: " . . . This Certificate is short termed pending a review of the regulatory requirements for this vessel as it relates to approved plans. SI-7 items to follow upon completion of review". According to his understanding, this text referred to a list of 12 items on the SI‑7 document that were later emailed to him by Inspector Stever, and that needed to be addressed upon the vessel returning. He understood that the items "were already indicated as found on board" and it was merely a matter of Inspector Stever witnessing them.

[32] On November 18, 2008, Mr. Belcher received an email from Inspector Stever asking for a discussion or a meeting (tab 13). A partially completed SI-7 document was attached to the email. Mr. Belcher testified that he then contacted Inspector Stever by telephone to discuss the partially completed SI‑7 document, to clarify the items on it and what Inspector Stever required. One of the follow-up items that Mr. Belcher then tried to address related to approved plans. On the same date (November 18, 2008), he sent an email to the naval architect for the applicant asking (tab 14):

I wonder if you can help. I got a call from Transport Canada (Ron Stever) . . . and he mentioned that there are no approved plans that were submitted for the Atlantic Oak (hull 81) built 2004 and [he] needs them to be submitted as per attached requirements.

[33] He had received an email, dated November 10, 2008, from the chief engineer, indicating that other follow-up items had been found. He understood that what remained to be done was for the outstanding items to be witnessed by Inspector Stever or Captain Knight. He attended the vessel on November 23, 2008, with the list of outstanding SI-7 items. He gave them to the captain and asked him to contact Inspector Stever. Mr. Belcher testified that the captain, who knows the whereabouts and availability of the vessel, has the responsibility to have certificates updated. In his testimony, Mr. Belcher stated that he also asked the chief engineer to contact the Transport Canada office and make arrangements for Transport Canada's representatives to attend the vessel.

[34] While he was in New Orleans, in the U.S.A., from December 2 to 6, 2008, Mr. Belcher received the email of December 2 and 3, 2008, from Inspector Stever but was unable to open the attachments on his Blackberry. He could do it only on his return to Canada. The November 28, 2008 due dates in the SI-7 document also came to his attention at that time. In a telephone conversation on December 5, 2008, a different captain, who had joined the vessel, notified Mr. Belcher that the certificate had expired. Mr. Belcher indicated that the operations manager needed to be notified. He also stated that he would contact Transport Canada on Monday, December 8, 2008, and make arrangements to have the certificate extended. On December 8, 2008, in a telephone call to Transport Canada, he asked that someone attend the vessel to either extend or renew the certificate and "deal with the associated items". He was told that the vessel was not to leave the wharf. He contacted the captain and told him not to sail.

[35] Mr. Belcher testified that no one from Transport Canada attended the vessel on December 8, 2008, for the purpose of performing an inspection. Later on the same day, he received an email from Transport Canada requesting an explanation on the status of the SI‑7 items (tab 18). His reply on the same day was based on information supplied by the chief engineer on board the vessel that day (tab 19).

[36] On December 9, 2008, there was a meeting at Transport Canada to clarify what the applicant needed to do to comply with the outstanding items. On December 10, 2008, Captain Knight attended the vessel, went through the list of the 13 items on the SI-7 document and signed off on each with his comments. In that regard, Mr. Belcher was referred to one SI‑7 document, showing Captain Knight's handwritten comments regarding regulatory requirements for various items:

  • "TO BE SUBMITTED TO TCMS BY 2009-1-2", regarding certain plans of the vessel to be submitted to Transport Canada;
  • "DONE", regarding a muster list;
  • "WILL BE DELIVERED TODAY (2008-12-10)", regarding a required fire extinguisher
  • "SUPPLIED", regarding required pollution certificates;
  • "SIGHTED", regarding garbage management documents;
  • "PROPOSAL TO BE SUBMITTED", regarding a compass and a sound-reception system; and
  • "PROPOSAL TO BE SUBMITTED ON APPROPRIATE FORM", regarding a safe‑manning document.

[37] Mr. Belcher was also referred to the last item in the exhibit book, which he identified as a short-termed inspection certificate issued by Captain Knight on December 10, 2008, with an expiration date of January 10, 2009 (certificate 3 at tab 21), "to allow us to comply with the outstanding items on the SI-7". With regard to the approval of plans, the drawings were submitted to Transport Canada, the applicant having been previously operating under the belief that submission of the requisite drawings to a third party (Lloyds) had fulfilled the requirements. In connection with the fire extinguisher, it was delivered on December 10, 2008. With reference to compasses, a spare was purchased. With respect to the sound-reception system, it was later determined that there already was a sound-receiving device on the vessel. Concerning the safe‑manning document, application was made for it.

[38] At the beginning of the cross-examination of Mr. Belcher, the Minister's representative indicated that he accepted the facts laid out by Mr. Belcher. On cross‑examination, Mr. Belcher testified that the captain of the Atlantic Oak is an employee of the applicant, and that the captain has full authority to act on behalf of the applicant with regard to manning, certificates and everything to do with the vessel. Mr. Belcher gave instruction to the captain to obtain the appropriate certificate prior to the expiry date, but that did not occur.

V. ARGUMENTS

A. Minister of Transport

[39] The Minister submits that the elements of the offence had been made out, and that the issue is whether the applicant has breached its duty under paragraph 106(2)(a) of the Act, to ensure that the vessel and its machinery and equipment were inspected for the purpose of obtaining all of the Canadian maritime documents – in this case, the vessel inspection certificate required under part 4 of the Act. He submitted that an inspection to obtain the required certificate was not arranged prior to operation of the vessel, and best efforts on the part of Mr. Belcher to give instructions in that regard did not relieve the applicant of its responsibility, through its agents, to ensure that the requirements of the Act are met.

[40] In the Minister's submission, in the case R. v. Sault Ste. Marie [1978] 2 S.C.R. 1299, due diligence is where the defendant did everything that could be expected of a person to ensure that the person complied with the requirement, and we were a long way from that in this matter. The Minister also submits that, as of November 29, 2008, a violation could have been avoided, had the vessel not been used until a valid certificate was in place. He refers to the case Lévis (City) v. Tétreault; Lévis (City) v.2629-4470 Québec Inc., [2006] 1 S.C.R. 420, as the latest major case on the defence of due diligence and one where the Supreme Court of Canada held that the defence had not been made out on the facts of the case.

[41] The Minister submits that you are required to have an inspection certificate when you operate a vessel. Before the vessel operated, the applicant did not arrange for the inspection to ensure there was a valid certificate. If the vessel had been tied-up at the dock in Halifax during the period when the violations are alleged to have occurred, then we would not be here. The requirement to have the certificate on board happens when the vessel is operated. Operating the vessel when the certificate was expired meant that the applicant failed in its duty to ensure that the inspections were carried out. The system regarding vessel certificates is there to ensure that timely inspections are carried out, so that problems are caught before they become a safety issue.

[42] The Minister submits that Mr. Belcher is not the only person responsible on behalf of the applicant to ensure compliance with the Act. The master and chief engineer were also responsible to ensure that the certificate was renewed in time. Reference was made to subsection 238(2) of the Act, as indicating that the responsibility is not limited to the vessel superintendent for the company.

[43] Reference was made to the regulation-making authority for the AMPRs that is provided by paragraphs 244(f) to (h) of the Act. The Minister indicates that only five provisions were selected for treating a continuing violation as a separate violation using paragraph 244(g) of the Act. In this case, there were separate actions on each of the eight days to which the notice of violation refers and, in his submission, the argument that we do not have separate offences is specious.

[44]  With regard to penalty, the Minister submits that there was consultation and agreement with the industry that the norm under the Aeronautics Act would be followed, that individuals would receive lesser penalties than corporations, particularly large corporations. He submitted that, in the Regulatory Impact Analysis Statement (RIAS) that accompanied the AMPRs, it was clear that there was an understanding between Transport Canada and the industry that the range of penalties from $1 250 to $25 000 indicates a serious offence, and that the first offence would be penalized at $1 250 for an individual and at $6 000 for a corporation, particularly a large corporation.

[45] Lastly, the Minister submits that, it is the duty of the authorized representative, not Transport Canada, to ensure compliance with the requirements under the Act. Discussion and negotiation about follow-up items do not remove the need for a certificate and regulatory compliance.

B. Applicant

[46] While counsel for the applicant had filed an application for a preliminary motion, which the Tribunal had notified would be dealt with at the hearing, he chose to address the subject of that application within his overall arguments.

[47] Counsel for the applicant submits that, according to the Minister's allegations, the applicant failed to ensure that the vessel was inspected for the purpose of obtaining a maritime document. He states that this has nothing to do with the fact that a maritime document was not issued when it should have been. The obligation is to ensure the inspection and, on the evidence, it was. The vessel was inspected on October 29, 2008, and while there were various follow‑up issues relating to the inspections, the applicant fulfilled its obligations under paragraph 106(2)(a) of the Act.

[48] Counsel for the applicant submits that, with regard to the renewals that were due on November 15 and 29, 2008, the delivery of inspection certificate 1B demonstrates the informality with which the inspections may be and were performed. He states as follows: "Where it's a question of the paperwork catching up with the reality that's known to exist, in my submission, a further inspection is not necessary". He submits that a further extension could have been arranged by telephone on November 29, 2008, because the underlying facts were the same as they had been on November 15, 2008. A physical attendance on board the vessel by Transport Canada's inspectors does not appear to be necessarily a requirement in accordance with practice and, in his submission, given that there were no material physical or documentary alterations on board the vessel between October 29 and December 10, 2008, no one's safety was compromised by the paperwork deficiencies. He submits that the violation is not made out on the facts.

[49] Alternatively, he relied on the Sault Ste. Marie defence, as preserved by section 237 of the Act, and he referred to the case R. v. Empire Sandy Inc. (Ont. C.A.) 62 O.R. (2d) 641, quoting from the case Sault Ste. Marie as follows:

The defence will be available if the accused reasonably believed in a mistaken set of facts which, if true, would render the act or omission innocent, or if he took all reasonable steps to avoid the particular event.

[50] Counsel for the applicant submits that due diligence requires that one has to do all that is reasonable, not everything that one could have done. In his submission, the vessel superintendent instructed the master to make arrangements for Transport Canada inspectors to attend the vessel. It is not known why the master did not do so. The applicant, through the vessel superintendent issuing those instructions, in the belief that the vessel was fully compliant is what is reasonable for the applicant to do in the circumstances. He submits that there is the alternative defence of the reasonable belief in a mistaken set of facts and, in this case, it was not even a mistaken set of facts. Mr. Belcher believed that the vessel was fully compliant. In his submission, as of November 29, 2008, it had not been brought to the attention of Mr. Belcher, the master, or anyone else at Atlantic Towing that the SI-7 items were considered past due. This was first communicated to Mr. Belcher in an email dated December 2, 2008, seeking retroactive compliance. If an action were expected from someone by a certain date and that person is not previously informed of it, it is not reasonable to expect action from this person by that specific date. He submits that there is corroborating evidence of Mr. Belcher's version of the facts, regarding telephone calls between Mr. Belcher and Inspector Stever, following Mr. Belcher's receipt of the email of November 18, 2008 (tab 13). In his submission, the defence applied in the case Sault Ste. Marie is made out.

[51] Counsel for the applicant submits that there is a difference between an offence under paragraph 121(1)(s) of the Act, for contravention of a regulation under part 4 of the Act, which is not a violation under the AMPRs and a contravention of paragraph 106(2)(a) of the Act, which is a violation under the AMPRs. In his submission, when or how often the vessel was used is neither an element of, nor relevant to, the alleged violation.

[52] Counsel for the applicant also submits that, as there is no "X" in column 3 of item 47 of the schedule to the AMPRs, a continuing violation under paragraph 106(2)(a) does not become a separate violation on each day that it is continued. In his submission, even if the violation is made out on the evidence and even if there is no defence or excuse available to the applicant, then the applicant should be penalized once only.

[53] According to counsel for the applicant, there is no practice before the Tribunal regarding the correct penalty. He indicates that this is its first transgression and the range of penalties is $1 250 to $25 000. The applicant is a substantial Canadian ship owner which takes its authorized-representative role seriously. A first violation should take into account mistaken beliefs by the applicant and errors by both the applicant and Transport Canada in addressing outstanding items. Counsel for the applicant submits that, had the further inspection occurred on November 29, 2008, rather than on December 10, 2008, the result would have been the same. No material deficiencies would have been found to prevent further extension of the certificate. Lastly, he submits that, even if the alleged violation is made out, the penalty should be $1 in recognition of the technical nature of the violation and the degree to which the regulator contributed to the series of errors, by which it was allowed to occur.

VI. ANALYSIS

[54] Paragraph 106(2)(a) of the Act requires that the authorized representative of a Canadian vessel shall ensure that the vessel and its machinery and equipment are inspected for the purpose of obtaining all of the Canadian maritime documents that are required under part 4 of the Act. In this matter, the relevant Canadian maritime document is an inspection certificate that is required for a vessel to engage on a voyage. That is a requirement under subsection 10(1) of the VCRs, which are regulations made under paragraph 35(1)(d) and section 120 of the Act (section 120 being in part 4 of the Act). As a result, the elements that the Minister must prove on a balance of probabilities, in respect of each of the eight alleged violations, are that:

(1) Atlantic Towing Limited is the authorized representative of the Atlantic Oak;

(2) the Atlantic Oak is a Canadian vessel; and

(3) Atlantic Towing Limited did not ensure that the Atlantic Oak and its machinery and equipment were inspected for the purpose of obtaining the inspection certificate required for the Atlantic Oak to engage on a voyage.

[55] With respect to the first element, the notice of violation specifies the name of the vessel as Atlantic Oak; the International Marine Organization (IMO) number or Official number of the vessel as 9295672; and the authorized representative as Atlantic Towing Limited. As item 1 of the statement of admissions is an admission that Atlantic Towing is the authorized representative for the vessel Atlantic Oak bearing IMO number 9295672, I determine that the first element is proven.

[56] With respect to the second element, the statement of admissions contains no express admission that the Atlantic Oak is a Canadian vessel but, as noted in the previous paragraph, it does contain an admission that Atlantic Towing is the authorized representative for the Atlantic Oak. Pursuant to section 2 of the Act, "authorized representative" means, in respect of a Canadian vessel, the person referred to in subsection 14(1) of the Act and, in respect of a foreign vessel, the master. Because Atlantic Towing is the authorized representative of the Atlantic Oak, and because Atlantic Towing is not the master of the Atlantic Oak, it follows that the Atlantic Oak is a Canadian vessel. Furthermore, there are documents in the exhibit book which indicate that Saint John, New Brunswick, is the port of registry of the Atlantic Oak. There were no submissions by the parties regarding this element of each of the alleged violations. While more express evidence that the Atlantic Oak is a Canadian vessel would have been preferable, I determine that the second element is proven.

[57] With respect to the third element, it must be noted that the alleged violations, while linked to subsection 10(1) of the VCRs, are not allegations that the vessel contravened that subsection. Indeed, because only relevant provisions of the Act, and not relevant provisions of regulations such as subsection 10(1) of the VCRs, have been included in the items listed in column 1 of the schedule to the AMPRs, use of the AMPRs to allege that the vessel had committed a "violation" of subsection 10(1) of the VCRs would not have been available. The RIAS that accompanied the AMPRs, but does not form part of them, indicates that only statutory provisions of the Act are designated by the AMPRs; and designation of regulatory provisions, as being subject to the AMPRs, would be done in subsequent amendments to the AMPRs. As a result, the alleged violations are not proven by only establishing that the vessel engaged in voyages without holding an inspection certificate issued under subsection 10(2) of the VCRs. What must be established in respect of each violation is that Atlantic Towing did not ensure that the Atlantic Oak and its machinery and equipment were inspected for the purpose of obtaining the inspection certificate required for the vessel to engage on a voyage.

[58] Items 3 to 10 of the statement of admissions were admitted, by the applicant, as to their truth but not as to their relevance. These items are evidence that, on each of the eight days on which a violation is alleged to have occurred, the Atlantic Oak was engaged on a voyage or voyages, although, with respect to the alleged violation on or about December 8, 2008, item 10 is only evidence that the last 10 minutes of a voyage which began at 10:13 p.m. on December 7, 2008, occurred on December 8, 2008. The evidence also establishes that the Atlantic Oak did not hold a valid inspection certificate at the time of the voyages on the eight days in question. Therefore, the number of alleged violations (eight) corresponds with the number of days (eight) on which the Atlantic Oak was engaged on a voyage or voyages without holding a valid inspection certificate. The number of alleged violations does not correspond with the number of voyages on which the Atlantic Oak engaged during the eight days in question (as it engaged on two voyages on several of those days), nor with the number of days on which a valid inspection certificate was not held, whether or not a voyage took place (as no violation is alleged for December 4, 2008, even though the Atlantic Oak did not hold a valid inspection certificate on that day).

[59] I understand the Minister's position to be that, on each of the eight days on which the Atlantic Oak operated without holding an inspection certificate, the applicant did not ensure that the Atlantic Oak and its machinery and equipment were inspected for the purpose of obtaining the certificate. I understand the applicant's position to be that it did ensure that the Atlantic Oak and its machinery and equipment were inspected on October 29, 2008, for the purpose of obtaining an inspection certificate and, if it did not do so, then it was only once, after the expiration of the certificate on November 29, 2008, which had been held prior to the dates of the alleged violations (certificate 2).

[60] In this matter, there is evidence that certificate 1A was to expire on October 29, 2008, and that, on or about that date, marine safety inspectors attended the vessel to conduct an inspection. There is also much evidence about efforts by the applicant and Transport Canada to follow up on outstanding items after that attendance. To allow more time for some of the follow‑up items to be addressed, certificate 1A was extended by certificate 1B, and certificate 2 was issued.

[61] There is conflicting evidence whether the applicant responded to Inspector Stever's email request of November 18, 2008, which had attached for a discussion a partially-completed SI‑7 document, which listed 12 items as deficiencies, pursuant to various regulations. His evidence was that he did not hear from anyone in response to the request for discussion. Mr. Belcher testified that he contacted Inspector Stever by telephone. The applicant relied on an email of November 18, 2008, from Mr. Belcher and addressed to the applicant's naval architect, as corroboration of this telephone conversation. However, while Mr. Belcher testified that he contacted Inspector Stever by telephone, the email refers to a call from Inspector Stever, so the corroboration is somewhat diminished. In any event, the Minister accepted the facts laid out by Mr. Belcher in his testimony.

[62] Mr. Belcher attended the vessel on November 23, 2008, asking the captain of the vessel to contact Inspector Stever, and asking the chief engineer of the vessel to make arrangements for Transport Canada inspectors to attend the vessel. Clearly, representatives of the applicant knew that follow-up with Transport Canada was required before the expiration of certificate 2 on November 29, 2008. Because paragraph 106(2)(a) of the Act only imposes a duty on the authorized representative and not on an employee of the authorized representative, the question here is not whether there has been a violation of paragraph 106(2)(a) by an employee of the applicant for which the applicant could be vicariously liable under subsection 238(2) of the Act, but whether the corporate applicant is strictly liable for a violation of paragraph 106(2)(a), by the applicant, through the conduct of its employees.

[63] As of November 30, 2008, the marine safety inspector at Transport Canada had not received satisfactory responses from the applicant's employees in respect of all outstanding items following the attendance at the vessel on or about October 29, 2008, as reflected in the follow-up email, including the SI-7 document. Indeed, even on December 10, 2008, Captain Knight's notations on the SI-7 document included: "TO BE SUBMITTED TO TCMS BY 2009-1-02", with regard to plans for the vessel; and certificate 3, which Captain Knight issued on December 10, 2008, contained the limitation "SHORT-TERMED PENDING COMPLETION OF S1-7 ITEMS" (tab 21). Either the inspection which began on or about October 29, 2008, had not been satisfactorily finalized or a new inspection to satisfy the inspector about the items identified in November had not been arranged and satisfactorily finalized, or both. In any event, I determine that on or about November 30, 2008, the applicant did not ensure that an inspection had been satisfactorily finalized before the vessel engaged on a voyage without an extended or new inspection certificate. As a result, I determine that the third element is proven with respect to count 1. The issue that now needs to be addressed is: Was there a failure to ensure an inspection on or about one or more of the other seven days specified in the notice of violation, or did the failure which occurred on November 30, 2008 continue during the other seven days?

[64] The parties did not refer the Tribunal to jurisprudence on the issue of what constitutes a continuing offence. However, the case R. v. Ambrosi [2008] B.C.J. No. 1286 is helpful. The accused was convicted of storage of certain recyclable material in a quantity exceeding what was allowed by regulations under the Waste Management Act (WMA) of British Columbia. Three separate counts had been alleged, each one covering a period of several months. The WMA contained a provision by which separate fines could be imposed for each day on which an offence continues. However, this provision did not apply to the offences charged in the case. On appeal in the British Columbia Supreme Court, Ehreke J. relied on the reasoning of McIntyre J. of the Supreme Court of Canada in the case R. v. Bell  [1983] 2 S.C.R. 471. McIntyre J. discusses a continuing offence as one where the elements of the offence are complete but the offence is not yet terminated and the accused remains in a state of criminality while the offence continues. Ehreke J. also relied on the following reasoning of MacKay J.A. of the Ontario Court of Appeal in the case R. v. Siggins [1960] O.R. 284:

. . . It would be clearly wrong to charge a man who had possession of stolen goods for a continuous period of one month with separate charges for each day of that period. It is only where the statute creating the offence provides that it shall be a separate offence or that separate penalties may be imposed for successive periods that a continuing offence can be treated as multiple offences. . . .

[65] At paragraph 81 of the decision mentioned above, R. v. Ambrosi, Ehreke J. concluded as follows, and upheld the conviction and fine on only one of the three charges:

. . . The wrong or "delict" committed by Mr. Ambrosi in each of Counts 1, 2, and 3 is the same, notwithstanding that different dates are specified in each of those counts. That being the case, he should not be subject to the registration of three separate convictions.

[66] In the case before the Tribunal, I have determined that an alleged violation was complete, on or about November 30, 2008, when the applicant did not ensure that an inspection had been satisfactorily finalized before the vessel engaged on a voyage without an extended or new inspection certificate. However, the following question remains: Does such a violation continue until it is terminated by a satisfactorily finalized inspection, with the result that a new violation could not occur until after such an inspection, or does the violation only continue until terminated by the ending of a voyage (or by the ending of the day of a voyage), with the result that a new violation could occur if an inspection is not satisfactorily finalized before the next voyage (or the next voyage on a subsequent day)?

[67] The case Ontario (Workplace Safety and Insurance Board) v. Hamilton Health Sciences Corp. 51 O.R. (3d) 83 is also helpful. The Ontario Court of Appeal considered the issue of whether failure to report an accident within three days after learning of the accident constituted a continuing offence under the Workplace Safety and Insurance Act of Ontario. At paragraph 15, Rosenberg J.A. relied on the following description of a continuing offence which, in an earlier case, the Ontario Court of Appeal had adopted from a decision of the Supreme Court of Victoria:

A continuous or continuing offence is a concept well known in the criminal law and is often used to describe two different kinds of crime. There is the crime which is constituted by conduct which goes on from day to day and which constitutes a separate and distinct offence each day the conduct continues. There is, on the other hand, the kind of conduct, generally of a passive character, which consists in the failure to perform a duty imposed by law. Such passive conduct may constitute a crime when first indulged in but if the obligation is continuous the breach though constituting one crime only continues day by day to be a crime until the obligation is performed.

Rosenberg J.A. concluded that the interpretation that would best achieve the object of the Workplace Safety and Insurance Act was that the employer had a three-day grace period to report, but once the obligation took effect, it remained in effect until the employer complied with its duty.

[68] Under paragraph 106(2)(a) of the Act, a contravention may occur when the authorized representative (passively) does not ensure that there is an inspection, while under subsection 10(1) of the VCRs, a contravention may occur when a vessel (actively) engages on a voyage without an inspection certificate. In this matter, there is a linkage between the passive contravention (failure to ensure an inspection) and the active contravention (engaging on a voyage without an inspection certificate), with the result that the alleged violation is somewhat of a hybrid. The evidence indicates that a separate inspection certificate is not issued for each voyage. Indeed, the inspection certificates or extensions thereof in evidence in this matter were all for periods of time that were lengthier than the period of time from the first to the last of the alleged violations. So the applicant's failure to ensure an inspection on November 30, 2008, led to the Atlantic Oak not being issued an inspection certificate that could have covered the entire period of the alleged violations.

[69] I find that, while the violation has passive and active elements, it is primarily a passive violation (the passive failure to ensure that an inspection be done to obtain an inspection certificate that could have covered the entire period to which the alleged violations relate). In this matter, the violation was completed on or about November 30, 2008 (the day after the expiration of the previously existing inspection certificate and the day of the first voyage on which the Atlantic Oak engaged without a valid inspection certificate); and the violation continued until it was terminated when an inspection (one sufficiently satisfactory to allow for the issuance of certificate 3) was conducted on December 10, 2008.

[70] Pursuant to paragraph 244(g) of the Act, the Governor in Council, on the recommendation of the Minister, may make regulations designating violations that, if continued on more than one day, constitute a separate violation for each day on which they are continued. Indeed, such regulations have been made. Subsection 2(3) of the APMRs provides that, with respect to the items in the schedule to the APMRs, if an "X" is set out in column 3 of the schedule to those regulations, then a violation set out in column 1 constitutes a separate violation for each day on which it is continued. In the schedule to the APMRs, there are five items in respect of which an "X" is set out in column 3. In these items, subsections 46(2), 57(1), 82(2) and 82(3) and section 187 of the Act are set out in column 1 of the schedule. In item 47 of the schedule, paragraph 106(2)(a) of the Act is set out in column 1, but no "X" appears in column 3. As a result, the AMPRs do not treat a continuing violation of paragraph 106(2)(a) of the Act as a separate violation for each day on which it is continued. The notice of violation does not, and could not, rely on subsection 2(3) of the AMPRs in this case. In the absence of the applicability of subsection 2(3) of the AMPRs, there is no basis for treating the continuing failure to ensure an inspection as one that constitutes a separate failure on each of the days in question.

[71] Counsel for the applicant referred to the case Empire Sandy Inc. mentioned above, as one where the defence of due diligence or mistaken belief described in the case Sault. Ste. Marie was considered in relation to the Canada Shipping Act (predecessor to the Act). The burden of making out such a defence is on the applicant who did not call the captain or chief engineer of the Atlantic Oak as a witness. There was evidence that Mr. Belcher, an employee of the applicant, attended the vessel on November 23, 2008, asking the captain to contact Inspector Stever regarding SI‑7 items and the chief engineer to contact the Transport Canada office to make arrangements for Transport Canada inspectors to attend the vessel. As of November 30, 2008, that had not happened. In the circumstances of this case, the defence applied in the case Sault Ste. Marie has not been made out.

[72] As to penalty, counsel for the applicant noted the range of penalties ($1 250 to $25 000) prescribed in the schedule to the AMPRs, for a violation of paragraph 106(2)(a) of the Act, but then invited me to reduce the penalty to $1 in this matter. In that regard, my authority is provided under subsection 232.1(4) of the Act, which reads as follows:

223.1(4) The member may confirm the Minister's decision or, subject to any regulations made under paragraph 244(h), substitute his or her own determination.

[73] As the range of penalties has been set out in the AMPRs, pursuant to paragraph 244(h) of the Act, I am bound by that range. The RIAS that accompanied the AMPRs, but does not form part of them, provides some insight as to the rationale for the penalty regime under the AMPRs. The $1 250 to $25 000 range of penalties set out in the AMPRs, in respect of a violation of paragraph 106(2)(a) of the Act, signals that a violation of that paragraph is regarded as one of high gravity. The RIAS also gives some indication that penalty amounts, which are higher for corporations than for individuals, provide an appropriate deterrent effect and that a penalty of $6000 was envisaged for the first high-gravity violation by a corporation. In the circumstances of this case, I am satisfied that the penalty imposed by the Minister in respect of count 1 is appropriate.

  1. VII. DETERMINATION

[74] With respect of the eight violations alleged by the Minister, I determine as follows:

Count 1 − The Minister of Transport has proven, on a balance of probabilities, that Atlantic Towing Limited has contravened paragraph 106(2)(a) of the Canada Shipping Act, 2001. I confirm the monetary penalty of $6000, as imposed by the Minister.

Counts 2 to 8 − The Minister of Transport did not prove the allegations that Atlantic Towing Limited has contravened paragraph 106(2)(a) of the Canada Shipping Act, 2001. Therefore, I dismiss the monetary penalty of $42 000, as imposed by the Minister.

November 3, 2009

Barrie LePitre

Member