Decisions

TATC File No. MA-0015-37
MoT File No. A7/16/2008-Cha-00003

TRANSPORTATION APPEAL TRIBUNAL OF CANADA

BETWEEN:

Harbour Development Marine Contractors, Applicant

- and -

Minister of Transport, Respondent

LEGISLATION:
Canada Shipping Act, 2001, S.C. 2001, c. 26, ss 231.1(1)


Review Determination
C. Michael Keefe


Decision: February 8, 2010

Citation: Harbour Development Marine Contractors v. Canada (Minister of Transport), 2010 TATCE 2 (review)

Heard at Halifax, Nova Scotia, on October 27, 2009

Held: The Minister of Transport has not proven that Harbour Development Marine Contractors failed to comply with a valid and lawful assurance of compliance. Consequently, the Notice of Default is dismissed, and the security in the amount of $1 250, that has been deposited by Harbour Development Marine Contractors, must be returned to the Company within thirty‑five (35) days of service of this Determination.

I. BACKGROUND

[1] On July 18, 2008, the Assurance of Compliance was entered into by Craig Reath, acting on behalf of the Applicant, Harbour Development Marine Contractors, and by Mihai Balaban, Manager of Compliance and Enforcement, Transport Canada, Marine Safety, Dartmouth District Office in Nova Scotia.

[2] Schedule A to the Assurance of Compliance states the following:

On or about the 17 July 2008 at the City of Dartmouth in the Province of Nova Scotia, James Albert MACINTYRE, as master did operate the Motor Vessel "Swellmaster" official number 186491 without the vessel being staffed with a crew that is sufficient and competent, contrary to section 82(2) of the Canada Shipping Act, 2001. Pursuant to subsection 238(2) of the Canada Shipping Act, 2001, Harbour Development Marine Contractors is being proceeded against as the employer of James MACINTYRE in respect of this offence and is liable to the penalty provided as punishment therefor.

Compliance Date: March 31, 2009

Date de conformité : 31 mars 2009

[3] Schedule B to the Assurance of Compliance consists of a listing of training that Harbour Development Marine Contractors was to arrange for its employee, James Albert MacIntyre, and to provide proof of completion to either Mr. Balaban or Daniel Hogan of Transport Canada, Marine Safety, on or before March 31, 2009.

[4] It is alleged that the proof of completion of the training was not produced by the compliance date. Subsequently, on April 1, 2009, the Notice of Default was issued to Harbour Development Marine Contractors. The total penalty assessed is $1 250.

[5] On May 1, 2009, Mr. Reath filed a request for a review with the Transportation Appeal Tribunal of Canada ("Tribunal").

II. STATUTES, REGULATIONS AND POLICIES

[6] Subsection 82(2), paragraph 229(1)(a), subsections 231.1(1), 231.2(1), (4), (5), (6) and 238(2) of the Canada Shipping Act, 2001 ("Act") provide the following:

82(2) No master of a Canadian vessel shall operate it unless it is staffed with a crew that is sufficient and competent for the safe operation of the vessel on its intended voyage, and is kept so staffed during the voyage. 

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

(a) enter into an assurance of compliance with the person or vessel that

(i) identifies the violation and provides that the person or vessel will comply with the provision to which the violation relates within the period, and be subject to the terms and conditions, specified in the assurance,

(ii) sets out the amount and form of any security that, pending compliance with the assurance, must be deposited with the Minister, and

(iii) sets out the penalty, fixed by or within the range fixed by the regulations made under this Part, for the violation that the person or vessel would have been liable to pay if the assurance had not been entered into, or

. . .

231.1(1) If the Minister is of the opinion that a person who, or vessel that, has entered into an assurance of compliance has not complied with it, the Minister may cause a notice of default to be served on the person or vessel to the effect that, unless a member determines under section 231.2, or an appeal panel decides under section 232.2, that the assurance has been complied with,

(a) the person or vessel is liable to pay double the amount of the penalty set out in the assurance; or

(b) the security deposited under subparagraph 229(1)(a)(ii) is forfeited to Her Majesty in right of Canada.

231.2(1) A person or vessel served with a notice under subsection 231.1(1) may, on or before the date specified in the notice or within any further time that the Tribunal on application allows, file a written request for a review.

. . .

(4) The burden is on the Minister to establish that the person or vessel did not comply with the assurance of compliance referred to in the notice. The person is not required, and must not be compelled, to give any evidence or testimony in the matter.

(5) A person or vessel named in a notice of default does not have a defence by reason that the person or vessel exercised due diligence to comply with the assurance of compliance.

(6) The member may confirm the Minister's decision or determine that the person or vessel has complied with the assurance of compliance.

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.

III. ELEMENTS TO BE PROVEN

[7] Based on the Assurance of Compliance and the Notice of Default, I identified the following elements to be proven by the Minister.

The Minister had reasonable grounds to believe that there was a violation, that an assurance of compliance was entered into with the Applicant and that the terms of the Assurance of Compliance were not met.

IV. EVIDENCE

A. Minister of Transport

(1) Mihai Balaban

[8] Mr. Balaban, Manager of Compliance and Enforcement, Transport Canada, Marine Safety, Dartmouth District Office in Nova Scotia testified on two documents introduced as evidence.

[9] The Assurance of Compliance, addressed to Harbour Development Marine Contractors and dated July 18, 2008, gives particulars on the M/V Swellmaster. Schedule A contains a description of an alleged violation, with a compliance date of March 31, 2009. Schedule B provides the terms and conditions outlining the training that Mr. MacIntyre was required to successfully complete (Exhibit M-1). Mr. Balaban indicated that, up to March 31, 2009, he had received no information from Harbour Development Marine Contractors or any of its employees that Mr. MacIntyre had completed any of the training listed in Schedule B.

[10] The Notice of Default, dated April 1, 2009 (Exhibit M-2), states that the Minister has determined that Harbour Development Marine Contractors has failed to comply with the Assurance of Compliance (Exhibit M-1).

[11] During cross-examination Mr. Balaban stated that he had spoken to Mr. MacIntyre on March 26, 2009. Mr. MacIntyre told him that he had not taken any of the training as he did not have the time, being required to work till the compliance date. Mr. Balaban testified that Mr. MacIntyre indicated his intention to retire rather than take the training.

[12] I asked how Mr. MacIntyre was permitted to work to March 31, 2009, if he did not have a valid certificate when this matter came to the attention of Transport Canada, Marine Safety, in July 2008. Mr. Balaban gave some background, explaining that Mr. MacIntyre had been operating the M/V Swellmaster with an expired certificate. Mr. Reath interjected, stating that Mr. MacIntyre did not operate as Master of the vessel, or in any other capacity, on or before the Assurance of Compliance was signed. Mr. Balaban agreed that was correct.

[13] Mr. Balaban explained that in July 2008, Harbour Development Marine Contractors approached him regarding the fact that Mr. MacIntyre had to take, on short notice, the M/V Swellmaster to Saint John, New Brunswick. Mr. Balaban stated that Transport Canada, Marine Safety Headquarters in Ottawa was consulted, and the guidance was provided that "under the premises of an Assurance of Compliance", Mr. MacIntyre would be allowed to travel to Saint John, New Brunswick, and make subsequent voyages within the harbour. Mr. Balaban testified that the intent was to help Harbour Development Marine Contractors while ensuring that Mr. MacIntyre would take the training.

[14] Mr. Balaban testified that Transport Canada, Marine Safety Headquarters, advised him that the Assurance of Compliance was more or less equivalent to a dispensation from the requirement to have a valid certificate of competency.

(2) Daniel Hogan

[15] Mr. Hogan, Marine Safety Inspector with Transport Canada, testified that he did not receive any evidence that Mr. MacIntyre had completed any training prior to March 31, 2009, in accordance with Schedule B to the Assurance of Compliance.

B. Applicant

(1) Craig Reath

[16] Mr. Reath, Operations Manager at Harbour Development Marine Contractors, testified that from the date the Assurance of Compliance was signed to March 31, 2009, he and his company attempted to get Mr. MacIntyre to take the required training. They offered to give him the necessary time off work and to pay his wages during the training. Mr. Reath stated that, on or about March 26, 2009, Mr. MacIntyre advised that he was unwilling to take the training and that he preferred retirement.

[17] Mr. Reath testified on four documents filed in evidence:

  • An undated letter from Mr. MacIntyre, addressed to Whom it May Concern, in which he declines Harbour Development Marine Contractors' support and wages to obtain the training outlined in Schedule B to the Assurance of Compliance (Exhibit A-1);
  • Photocopies of the M/V Swellmaster's deck log book show "D. Cosman" as the ship's Master during the period of July 15 to 25, 2008 (Exhibit A-2). Mr. Reath further testified that the Master of the M/V Swellmaster was Dave Cosman, not Mr. MacIntyre, and that a violation involving Mr. MacIntyre did not occur. He explained that Mr. MacIntyre was brought in to assist in getting the vessel inspected;
  • Mr. Reath explained a series of emails leading up to the issuance of the Assurance of Compliance (Exhibit A-3). He read into the record an email from Mr. Balaban to Mr. Reath, dated July 16, 2008, in which Mr. Balaban states that, upon receiving a letter of commitment indicating that Harbour Development Marine Contractors would support Mr. MacIntyre's training, Transport Canada, Marine Safety, would be able to issue to Mr. MacIntyre a limited certificate, valid for one year.
  • A letter dated July 16, 2008, from Mr. Reath to Mr. Balaban outlines Harbour Development Marine Contractors' commitment to support Mr. MacIntyre in obtaining training. The letter also indicates that the Company immediately required Mr. MacIntyre's services for a very large dredging project in the Port of Saint John, New Brunswick (Exhibit A-4).

[18] Mr. Reath testified that he hand delivered his letter of July 16, 2008, to Mr. Balaban (Exhibit A-4). At that time, he was shown the Assurance of Compliance and discovered that a violation was alleged to have occurred on July 17, 2008. He testified that he was under the impression that the Assurance of Compliance was a paper work matter and a new version of what he believed to be a letter of dispensation. He indicated that he was under pressure at the time, having a tug that had to leave Halifax in a matter of hours. He also understood that he had to sign the document. He stated that he was told that he had to sign the document and that was the way forward. Therefore he did sign it.

[19] Mr. Reath testified that at no time, on or about July 17, 2008, did the violation occur. He referred to the Deck Log Book (Exhibit A-2), that shows "D. Cosman" as ship's Master.

[20] On cross-examination, Mr. Reath indicated that he was not aware that dispensations could last for only six months. He stated that Mr. MacIntyre was off work from November 2008 to late January 2009, and that he had ample opportunity to take the training.

[21] The Minister's representative clarified that the Assurance of Compliance was for a period of approximately eight and a half months, while a dispensation was valid only for six months.

V. ARGUMENTS

A. Minister of Transport

[22] The Minister asserted that the issue of whether Mr. MacIntyre actually operated the vessel as alleged is totally irrelevant. He referred to the Act, where it states at section 230 that after 48 hours of signing an assurance of compliance, unless there is a request for a review, the offence is deemed to have been committed.

230(1) A person who, or vessel that, enters into an assurance of compliance is, unless a review is requested under subsection (2), deemed to have committed the violation in respect of which the assurance was entered into.

(2) A person who, or vessel that, enters into an assurance of compliance may, within 48 hours after the assurance is signed, unless a notice of default is served within that period under section 231.1, request a review. . . .

[23] The Minister's representative stated that a violation would have had to occur to support the issuance of an assurance of compliance. He indicated that, in this case, the violation was fictitious, there was no violation if Mr. MacIntyre did not operate the vessel, and he had no evidence that he did. The offence was a fiction created to generate the Assurance of Compliance that Transport Canada, Marine Safety, would then consider to be a long‑term dispensation from the requirements for Mr. MacIntyre to hold a valid certificate.

[24] The Minister's representative explained that Transport Canada, Marine Safety, wanted to give a dispensation for a period of more than six months, and considered the Assurance of Compliance to be the equivalent of a dispensation but with a difference being that it would have a longer life than the six months provided by regulations.

[25] The Minister's representative stated that, since no evidence was given of Mr. MacIntyre's successful completion of the training, the default was established.

[26] He indicated that the only way Mr. MacIntyre could continue to operate the vessel without the proper certification, for the period that the Company wished to obtain his services, was to enter into an assurance of compliance. He explained that during the course an assurance of compliance is valid, an illegality may continue. He further indicated that only one dispensation, valid for six months, can be issued.

B. Applicant

[27] The Applicant's representative also views the alleged violation as a "fictional event". He feels that the Company covered the defence of due diligence when Mr. MacIntyre visited the office of Transport Canada, Marine Safety, on March 26, 2009, and indicated that he did not wish to take the training and preferred to retire. He referred to the undated letter from Mr. MacIntyre, addressed to Whom it May Concern, as also supporting the defence of due diligence (Exhibit A-1). The Applicant's representative feels that the Company made every reasonable effort to get Mr. MacIntyre to attend courses but could not twist his arm. His opinion is that the person responsible for the lack of compliance should bear the burden of the penalty.

VI. EVIDENCE, LAW AND POLICY ANALYSIS

[28] With respect to a certificate of competency, a dispensation is issued in the case of a lack of a certificate of the correct grade, but not in the case of a lack of competency. Dispensations are to be given only to competent persons who do not possess the correct certificate for a certain vessel on a certain voyage or class of voyage. The Marine Personnel Regulations, SOR/2007‑115, ("MPRs") limits the life of a dispensation to six months. In this case, the evidence indicates that there was intent by Transport Canada's representatives to use the procedures for administrative penalties, as provided in the Act for the purpose of granting a dispensation, a purpose for which these procedures were not intended, while they were aware that the matter of dispensations is addressed under section 204 of the MPRs.

[29] Mr. Balaban testified that Transport Canada, Marine Safety, considered the Assurance of Compliance to be the equivalent of a dispensation. I note that section 204 of the MPRs is silent on the number of successive dispensations a person might obtain. There was no evidence presented that Transport Canada, Marine Safety, might have a policy limiting successive exemptions. If they do, it begs the question as to why an assurance of compliance was considered in the first place.

[30] At the Review Hearing, Mr. Reath indicated that he considered the Assurance of Compliance to be a new form of a dispensation. However, he offered nothing in regards to his opinion upon reading it, that it contained words to the effect that a violation had occurred. It strikes me as odd that a person would sign such a document, especially as Mr. Reath knew that the stated violation was a fiction.

[31] It is my view that, by considering the Assurance of Compliance to be a dispensation, Transport Canada, Marine Safety, has negated any substance to the claim that Mr. MacIntyre was not competent. It supports the statement of the Minister's representative that the violation was fictitious. Even without dispensation and the acknowledgement of competency that is associated with dispensation, the fictitious violation holds no water, as subsection 82(2) of the Act does not apply in the case of a master who is not competent. Subsection 82(2) of the Act applies to crew, not complement, and the master is not part of the crew. He is a member of the ship's complement. Section 1 of the MPRs defines the word "complement" as follows:

"complement" means the master and the persons who constitute the crew of a vessel.

[32] The Deck Log Book (Exhibit A-2) indicates that Mr. MacIntyre sailed with the vessel from Halifax, Nova Scotia, to Saint John, New Brusnwick, during the period of July 17 to 22, 2008. On that document, for the period of July 17 to 21, 2008, the names D. Cosman and J. MacIntyre are printed beside the word "CAPT.". The Minister's representative has stated that he has no evidence to indicate that Mr. MacIntyre was the ship's Master on or about July 17, 2008. The Applicant has testified that Mr. Cosman, not Mr. MacIntyre, was the ship's Master. Based on the foregoing, I conclude that Mr. MacIntyre was on board, acting in a supernumerary position, and that he was not the ship's Master. Therefore, I agree with the Minister and the Applicant that we are dealing with a fictitious violation.

[33] Mr. Reath's testimony indicates that he signed the Assurance of Compliance on the day the M/V Swellmaster left port. I note that the Deck Log Book (Exhibit A-2) shows that the vessel left Halifax on July 17, 2008. I also note that the Assurance of Compliance forwarded to the Tribunal by the Minister, leading up to this Review Hearing, is dated July 18, 2008, is not signed by either party and bears the date of July 18, 2008, under the signature blocks. I further note that the Assurance of Compliance, filed in evidence by the Minister (Exhibit M-1), is dated July 18, 2008, is signed by both parties and bears the date of July 22, 2008, under the signature blocks. There was no explanation of these discrepancies.

[34] It appears to me that Transport Canada, Marine Safety, made an error in judgement in choosing to issue an assurance of compliance with a fictitious violation as a dispensation, in an effort to circumvent the six-month limit in the MPRs.

[35] The Minister's authority to enter into an assurance of compliance is limited by the express language found in subsection 229(1) of the Act. It states that the Minister may only do so if there are reasonable grounds to believe that a person or vessel has committed a violation.

[36] The oral and written evidence presented to me confirms that the Minister did not have reasonable grounds to believe, or indeed any grounds to believe, that either Harbour Development Marine Contractors or Mr. MacIntyre committed a violation of the Act. Consequently, the Minister did not have the authority to enter into the Assurance of Compliance.

[37] As the existence of a valid and lawful assurance of compliance is the first element of the offence in question, I am forced to conclude that the Minister has not discharged the statutory burden of proof required of the Minister pursuant to subsection 231.2(4) of the Act.

VII. DETERMINATION

[38] The Minister has not proven that Harbour Development Marine Contractors failed to comply with a valid and lawful assurance of compliance. Consequently, the Notice of Default is dismissed, and the security in the amount of $1 250, that has been deposited by Harbour Development Marine Contractors, must be returned to the Company within thirty‑five (35) days of service of this Determination.

February 8, 2010

C. Michael Keefe

Member