Decisions

TATC File No. MA-0057-37
MoT File No. A20100520-101-00119

TRANSPORTATION APPEAL TRIBUNAL OF CANADA

BETWEEN:

Principal Holdings 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: March 31, 2011

Citation: Principal Holdings Limited v. Canada (Minister of Transport), 2011 TATCE 7 (Review)

Heard at St. John's, Newfoundland and Labrador, on October 29, 2010

Held: The Minister of Transport did not prove, on a balance of probabilities, that the Applicant, Principal Holdings Limited, has contravened paragraph 106(2)(a) of the Canada Shipping Act, 2001. Accordingly, the monetary penalty of $6 000 is dismissed.

I. BACKGROUND

[1] The Notice of Violation ("Notice") which was the subject of the Review Hearing is dated May 20, 2010 and was issued to Principal Holdings Limited ("Principal Holdings"). In the portion of the Notice headed "Vessel Particulars", the name of the vessel is specified as the "M/V Marine Clipper II". In the portion of the Notice headed "Authorized representative particulars", the name of the authorized representative is specified as Principal Holdings Limited.

[2] The Notice indicates that, pursuant to section 229 of the Canada Shipping Act, 2001 ("Act"), the Minister of Transport ("Minister") has reasonable grounds to believe that Principal Holdings has committed the violation specified in Schedule "A" to the Notice. The Notice also indicates that the violation specified in Schedule "A" has been designated pursuant to the Administrative Monetary Penalties Regulations, SOR/2008-97, ("AMPRs") and the procedures in sections 228 to 243 of the Act respecting administrative penalties apply.

[3] In Schedule "A" to the Notice, the date and details of the violation are specified as follows:

No.

Violation

Penalty

 

On or about 4 May 2010, at or near St. John's in the province of Newfoundland and Labrador, PRINCIPAL HOLDINGS LIMITED, being the authorized representative of the vessel "Marine Clipper II", failed to ensure that the vessel and its machinery and equipment were inspected for the purpose of obtaining all Canadian maritime documents required under Part 4 of the Canada Shipping Act, 2001, thereby contravening paragraph 106(2)(a) of that Act.

In particular, the vessel engaged on a voyage without holding a valid Canadian Vessel Inspection Certificate as required by subsection 10(1) of the Vessel Certificates Regulations.

$6000.00

[4] On June 22, 2010, Principal Holdings filed a request for a review of the Minister's decision with the Transportation Appeal Tribunal of Canada ("Tribunal").

II. STATUTES, REGULATIONS AND POLICIES  

[5] Section 2 of the Act provides the following applicable definitions:

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

"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) . . . 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).

"master" means the person in command and charge of a vessel. . . .

"vessel" means a boat, ship or craft designed, used or capable of being used solely or partly for navigation in, on, through or immediately above water, without regard to method or lack of propulsion, and includes such a vessel that is under construction. It does not include a floating object of a prescribed class.

[6] Paragraph 6(i), subsection 14(1) and paragraph 106(2)(a) of the Act provide as follows:

6. The objectives of this Act are to

. . .

(i) establish an effective inspection and enforcement program.

. . .

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;

. . .

[7] 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, . . .

[8] Subparagraph 229(1)(b)(i), subsection 232(1), section 232.1 and paragraphs 244(f) and (h) of the Act provide 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.

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.

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;

. . .

(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] Subsections 2(1) and (2) of the AMPRs, which are made under the Act, provide 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.

. . .

[11] In item 47 of the schedule to the AMPRs, paragraph 106(2)(a) of the Act is set out in column 1, and $1 250 to $25 000 is the range of penalties set out in column 2.

[12] Under the policy framework described in the section on Penalty ranges in the Regulatory Impact Analysis Statement that accompanied the AMPRs, but does not form part of them, the minimum penalty payable by a corporation for a high-gravity violation (such as a violation of paragraph 106(2)(a) of the Act) would be $6 000.

III. EVIDENCE

A. Documentary Evidence – The Minister

[13] The Minister submitted a booklet containing six documents. With the concurrence of the Applicant, three of those documents were admitted into evidence, as exhibits. Those three exhibits are as follows:

M-1: A two-page print-out, dated May 6, 2010, from Transport Canada's Vessel Registration Query System, in respect of the M/V Marine Clipper II. The Applicant expressly admitted the truth of the facts in this document.

M-2: Two pages of communications, both dated May 4, 2010, from the St. John's Marine Communications and Traffic Services Centre, Fisheries and Oceans Canada, the first page showing a time of 13:46 (at the top of the page) and the second page showing a time of 16:04 (at the top of the page).

M-5: A one-page sheet of hand-written notes entitled M/V Marine Clipper II.

Two of the six documents were admitted into evidence as exhibits through the testimony of a witness for the Minister. Those two exhibits are as follows:

M-3: A twenty-three page print-out of a Transport Canada Current Data Report, dated October 28, 2010 in respect of the M/V Marine Clipper II.

M-4: A two-page Transport Canada Inspection Certificate, dated April 21, 2008 and extended on April 9, 2009.

The sixth document in the booklet was not made an exhibit, as it was a copy of the Notice.

B. Documentary Evidence – The Applicant

[14] The Applicant submitted six documents. With the concurrence of the Minister, all of those documents were admitted into evidence, as exhibits. Those six exhibits are as follows:

A-1: A five-page Transport Canada Division 3 Report, dated October 25, 2010, in respect of the M/V Marine Clipper II.

A-2: A one-page Transport Canada Marine Safety Notice (SI-07), dated April 9, 2009, in respect of the M/V Marine Clipper II.

A-3: A one-page Transport Canada S.I. 7 document, dated May 27, 2008, in respect of the M/V Marine Clipper II.

A-4: A one-page notice of appointment, dated October 29, 2010, naming Peter O'Flaherty as agent for the Applicant in these proceedings.

A-5: A one-page invoice, from Tri-Nav Marine Design Inc., dated December 16, 2009, bearing no. 5027.

A-6: A one-page invoice, from Tri-Nav Marine Design Inc., dated June 16, 2010, bearing no. 5156.

C. Oral Evidence – The Minister

(1) Leann Gillingham

[15] Among her several duties, Leann Gillingham is a steamship inspector with Marine Safety, Transport Canada, in St. John's, Newfoundland and Labrador.

[16] Inspector Gillingham was shown the Current Data Report (Exhibit M-3). She identified it as a Ship Inspection Reporting System document that originates from a computer database that contains information about vessel inspections. The information is inputted by the inspector who performs an inspection on a vessel. The information includes certificates issued regarding the vessel. Page 22 of the Report indicates that an inspection certificate was issued to the M/V Marine Clipper II on April 21, 2008, to expire on April 21, 2009, and then, on April 9, 2009, the certificate was extended to expire on October 30, 2009.

[17] Inspector Gillingham was then shown the Inspection Certificate (Exhibit M-4), which she described as an inspection certificate issued by Transport Canada in respect of the M/V Marine Clipper II. It is a Canadian maritime document generated by the inspector who performed the inspection. It is signed by Jeffrey Currie, an inspector in the St. John's Office, Transport Canada. It was issued on April 21, 2008, to expire on April 21, 2009, and then, on April 9, 2009, it was extended to expire on October 30, 2009. The extension was given by Mr. Currie. The witness indicated that the existence of the Inspection Certificate means that the inspector went to the vessel, inspected the vessel according to the Regulations, and once the inspection was completed and the applicable requirements under the Act were met, the Certificate was issued to the vessel by the inspector. Inspector Gillingham stated that there was no indication on the Certificate that it was valid on May 4, 2010 (the date of the voyage in question). She indicated that a certificate for the vessel would appear in the database from which the Current Data Report (Exhibit M-3) is generated and that a hard copy would appear in the file for the vessel at the St. John's Office of Transport Canada. She indicated that she had found no further certification of the vessel relevant to the voyage of May 4, 2010.

[18] On cross-examination, Inspector Gillingham testified that she is not a naval architect. She indicated that the Current Data Report (Exhibit M-3) is computer generated from data entered by inspectors and by administrative staff, for inspectors. She testified that there is a hard-copy file for the vessel, from which some of the evidence entered at the Review Hearing had been taken and in which there is other correspondence. She indicated that she did not have the file with her at the Hearing.

[19] Inspector Gillingham was shown the SI-7 form of May 27, 2008 (Exhibit A-3) and the SI-7 form of April 9, 2009 (Exhibit A-2). She indicated that SI-7 forms show deficiencies or non-conformities with Regulations that are identified on inspection of a vessel. She stated that a hard copy of an SI-7 form would appear in the file for the vessel. SI-7 notes in the Current Data Report (Exhibit M-3) would reflect hard copies of SI-7 forms in the file. I will use "SI-7 form" to refer to a deficiency form (Exhibit A-2 or A-3) and "SI-7 note" to refer to a deficiency note in the Current Data Report (Exhibit M-3).

[20] With regard to the last two SI-7 notes at the bottom of page 23 of the Current Data Report (Exhibit M-3), Inspector Gillingham cross-referenced pages 18 and 19 of the Report as containing the same SI-7 notes. Those SI-7 notes relate to fire equipment. Having been referred to the SI-7 form of May 27, 2008 (Exhibit A-3), she acknowledged that it is fair to proceed on the basis that the deficiencies in the last two SI-7 notes on page 23 of the Report were from the inspection of April 21, 2008. With regard to the first of the SI-7 notes at the bottom of page 23 of the Current Data Report (Exhibit M-3), she cross-referenced page 6 of the Report as containing the same SI-7 note relating to a stability booklet. She acknowledged that this note would have been entered around March 9, 2010. Having been referred to the SI-7 form of April 9, 2009 (Exhibit A-2), the witness explained the deficiency noted thereon as meaning that a complete inclining (of the vessel) needed to be done and that a stability booklet needed to be submitted for approval. A stability booklet would be submitted to the Plans and Approval Division of Marine Safety, Transport Canada, where it would be reviewed by a naval architect. With regard to the fire equipment deficiencies that were noted in the last two notes on the SI-7 form of May 27, 2008 (Exhibit A-3) but were not noted on the SI-7 form of April 9, 2009, she indicated that if they were not noted in April 2009, then they were deficiencies that were rectified.

[21] Inspector Gillingham acknowledged that stability issues had been identified in SI-7 notes as far back as 2008. Page 2 of the Current Data Report (Exhibit M-3) shows that there was an inspection on March 9, 2010, and the SI-7 notes on pages 6 and 23 in the Report show that there was an inclining experiment on March 9, 2010. An inspector would have been required to be present for the inclining experiment. As far as she was aware, the only deficiency noted on March 9, 2010 was the stability issue.

[22] A certificate was issued on April 21, 2008, when there were deficiencies to be rectified. By the time the Inspection Certificate (Exhibit M-4) was extended, the two fire-equipment deficiencies had been rectified but the stability-booklet deficiency remained to be rectified. Extensions of inspection certificates are granted routinely, where appropriate. The inclining experiment gathers the actual raw data necessary for a naval architect to prepare the stability calculations and stability booklet for the vessel. Some time is required to prepare the stability booklet.

[23] Inspector Gillingham was asked what was meant by "Certificate Extension Pending Stability Booklet Submission", which is the last sentence in the first of the SI-7 notes on page 23 of the Current Data Report (Exhibit M-3). At first, she indicated that it means the stability booklet would have to be submitted prior to the certificate extension being granted, or the certificate extension is pending on the submission of the stability booklet from a client. However, when reminded that there had already been an extension without the stability booklet, she acknowledged that it indicates there would be a certificate extension pending the stability booklet submission. She stated that no further inspection was scheduled by the inspector after the March 9, 2010 inspection.

[24] On re-examination, Inspector Gillingham testified that submission of a preliminary stability booklet for approval does not result in an automatic extension of an inspection certificate. The inspector, upon request by the owner or authorized representative of the vessel, would need to review the vessel and the vessel's file before granting an extension. She also indicated that inspectors review and confirm the data in the Ship Information Registry System reports. With regard to the database, she indicated that, if she had already entered deficiencies in respect of a vessel and then she inspected the vessel regarding another deficiency, she would not re-enter the previous deficiencies. With regard to removal of deficiencies, she stated that you actually have to go into the database and remove them, saying that they are completed, and you would also, on the copy of the SI-7 form, note when the deficiency was rectified. She indicated that a certificate is not issued when there is a major deficiency. She also indicated that deficiencies could be required to be rectified prior to the departure of a vessel and that she would not issue a certificate until deficiencies are rectified. She also stated that, if she received an authorized representative's request for extension of a certificate, she would consider granting an extension depending on what progress was being made in rectifying any deficiencies.

D. Oral Evidence – The Applicant

[25] The Applicant did not call any witnesses.

IV. ARGUMENTS

A. Minister of Transport

[26] The Minister submits that the vessel engaged on a voyage on May 4, 2010. There was a fire on the vessel and it became a constructive total loss. The vessel did not have a valid inspection certificate for that voyage. The conducting of an inclining experiment is not the issuance of a certificate. The owner or authorized representative must request that an inspector attend the vessel for the purpose of certification. The records indicate that this did not occur and the vessel undertook a voyage without proper certification. The Minister asked for a finding that the vessel undertook the voyage without holding a valid inspection certificate.

[27] The Minister submits that the $6 000 penalty that has been assessed is the minimum penalty available under the AMPRs, in respect of the alleged violation.

[28] The Minister submits that the inspection was ongoing and there is no evidence to indicate that it was completed. The database lists outstanding items for deficiencies. They were not removed. We have to look at the spirit of paragraph 106(2)(a) of the Act, which is to ensure that an inspector visits the vessel whatever number of times to see that it qualifies for an inspection certificate allowing it to go to sea. The inspection was not complete as the inspector had not signed off and had not issued a certificate. The master was an employee of the Applicant or under the control of the Applicant. Vicariously, the Applicant has a responsibility to ensure that the master performs his or her duties. The Applicant did not ensure that the master was doing so. The Applicant permitted the master to sail without having obtained the required Canadian maritime document.

B. Applicant

[29] The Applicant submitted a list of authorities, comprised of excerpts from the Act, the AMPRs and the VCRs, as well as a copy of a Tribunal decision in the matter of Atlantic Towing Limited v. Canada (Minister of Transport), 2009 TATCE 31 (review), TATC file no. MA‑009‑37 ("Atlantic Towing").

[30] The Applicant submits that the Minister failed to establish that the Applicant committed the violation to which the Notice refers. The Applicant introduced four main points in support of its position.

[31] Firstly, the statutory authority of the Tribunal under Part 11 of the Act is to conduct a review to determine whether the violation referred to in the Notice was committed. This is part of the new inspection and enforcement program under the Act. The Applicant refers to the scheme of the Act regarding administrative monetary penalties and particularly to subsection 232.1(3) of the Act in that regard. That subsection provides that the burden is on the Minister to establish that the violation referred to in the Notice has been committed.

[32] Secondly, the only violation referred to in the Notice is the alleged contravention of the obligation placed on the Applicant under paragraph 106(2)(a) of the Act, to ensure that each vessel is inspected for the purpose of obtaining all Canadian maritime documents required under Part 4 of the Act. While the Notice also alleges that the vessel engaged on a voyage without holding a valid Canadian vessel inspection certificate under subsection 10(1) of the VCRs, such an allegation, even if proven by the Minister, would not constitute a violation under Part 11 of the Act.

[33] Thirdly, in order to be able to prove a violation under paragraph 106(2)(a) of the Act, the Minister must prove, on a balance of probabilities, that:

(i) the Applicant is the authorized representative of the vessel;

(ii)  the vessel is a Canadian vessel; and

(iii) the authorized representative failed to ensure that the vessel and its machinery and equipment were inspected for the purpose of obtaining the inspection certificate required for the voyage of May 4, 2010.

[34] The Applicant admits that the evidence establishes the first two elements of the violation. With respect to the third element, the violation is not established by proving only that the vessel engaged on a voyage without holding an inspection certificate under subsection 10(2) of the VCRs. Proof of the violation of paragraph 106(2)(a) of the Act requires primarily proof of the passive element of the violation, which is the failure to ensure an inspection of the vessel and its machinery and equipment. There is also a lesser active element to the violation, which is the carrying out of the activity for which a Canadian maritime document was required to be obtained.

[35] Under paragraph 106(2)(a) of the Act, it is the duty of the authorized representative to ensure that the vessel and its machinery and equipment are inspected for the purpose of obtaining all of the required Canadian maritime documents and, under section 107 of the Act, it is the duty of the master to ensure that all of the required Canadian maritime documents are obtained before a vessel embarks on a voyage. Under subsection 14(1) of the Act, the authorized representative is responsible for acting with respect to all matters relating to the vessel that are not otherwise assigned by the Act to any other person.

[36] Fourthly, the Minister has not proven, on a balance of probabilities, that the Applicant failed to fulfill its obligation to have the vessel inspected for the purpose of obtaining the certificate required for the vessel to engage on a voyage on May 4, 2010. In December 2009, naval architectural services were undertaken to complete the stability analysis and booklet for the vessel. On March 9, 2010, further naval architectural services were undertaken, in the presence of an inspector, to complete the inclining experiment for the vessel. There was no evidence of any other deficiencies (i.e. other than the stability issues) at that time and no evidence that any further inspection was scheduled or contemplated by the inspector before the vessel engaged on a voyage. Based on evidence of past practice, routine issuance of certificate extensions and SI‑7 notes of the inspector, this was a situation in which an extension would have been issued on the basis of a request from the master.

[37] This case is distinguishable from Atlantic Towing. In that case, there were 12 or 13 deficiencies, many of which are still outstanding when the vessel actually proceeds on a voyage. That is not the situation in this case. The issue of the stability booklet related to a modification of the vessel that dated to before May 2008. This was clearly a technical situation, a technical analysis that had to be done by naval architects. It was not something that could be done on the spot by either the naval architect from Tri-Nav or the inspector from Transport Canada. The inspector was there, he witnessed the performance of the inclining experiment, and there is no evidence in the file that he needed to re-attend or would have any further role in respect of the stability booklet. That was a matter for persons trained with the expertise in stability, in Plans and Approvals at Transport Canada, not the inspectors. This was a matter in which the Applicant not only ensured that the inspections were done, but paid for the lift lines to be done and for the naval architect to do the inclining experiment. There was no other deficiency or non-compliance noted on the file. The SI-7 notes on this particular file indicate ". . . Certificate Extension Pending Stability Booklet Submission". Inspector Gillingham agreed that this meant that what was contemplated on the day in question was that there would be an extension granted pending the submission of the stability booklet, which as we know both from the evidence and from the very nature of this type of work, was a matter that had to be dealt with at a later date by both naval architects within Tri-Nav and then the reviewing architects within Transport Canada. The inspection was completed.

[38] There is no evidence that the master was an employee of the Applicant. Indeed, the master is not an employee of the Applicant. This is not a case of vicarious liability of the Applicant.

[39] The Applicant asks for dismissal of the $6 000 penalty.

V. ANALYSIS

[40] 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 of the violation that the Minister must prove, on a balance of probabilities, are that:

(i) the Applicant is the authorized representative of the vessel;

(ii)  the vessel is a Canadian vessel; and

(iii) the Applicant did not ensure that the vessel and its machinery and equipment were inspected for the purpose of obtaining the inspection certificate required for the vessel to engage on a voyage on or about May 4, 2010.

[41] At the Review Hearing, the Applicant conceded that the first two elements had been established. With respect to the third element. I note that the first paragraph of the alleged violation is consistent with paragraph 106(2)(a) of the Act, in alleging that the authorized representative failed to ensure that the vessel and its machinery and equipment were inspected for the purpose of obtaining all Canadian maritime documents required under Part 4 of the Act. However, the particulars in the second paragraph of the alleged violation are more consistent with subsection 10(1) of the VCRs than with paragraph 106(2)(a) of the Act, in only alleging that the vessel engaged on a voyage without holding a valid inspection certificate as required by subsection 10(1) of the VCRs. Because only "relevant provisions" of the Act, 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. As a result, the alleged violation is not proven by only establishing that the vessel engaged on a voyage without holding an inspection certificate. What must be established is that the Applicant did not ensure that the vessel and its machinery and equipment were inspected for the purpose of obtaining the inspection certificate required for the vessel to engage on a voyage. There are two pages of communications (Exhibit M-2) which provide sufficient evidence that the vessel was engaged on a voyage on May 4, 2010. Is there sufficient evidence that the Applicant did not ensure that the vessel and its machinery and equipment were inspected for the purpose of obtaining the inspection certificate required for the vessel to engage on that voyage?

[42] There is evidence that an inspection of the vessel took place in April 2008. An Inspection Certificate (Exhibit M-4) was issued on April 21, 2008, to be valid until April 21, 2009. Also, an SI-7 form (Exhibit A-3), dated May 27, 2008 (a few weeks after the date of issuance of the Inspection Certificate) refers to a short term expiry date of April 21, 2009 (the expiry date of the Inspection Certificate). The SI-7 form identifies vessel deficiencies as follows:

THE FOLLOWING DEFICIENCIES TO BE COMPLETED PRIOR TO THE SHORT TERM EXPIRY DATE OF 2009-04-21

1.) Vessel's Stability Book to be Updated to Include Crab and Shrimp Fisheries. Further Investigation into Existing Stability Book is Required.

2.) Three (3) Firebuckets to be Replaced New Complete with Lanyards.

3.) Rubber Hose on Suction and Discharge Side of Fire Pump to be Replaced with a Heavier Duty Wire Core Hose. To be Completed prior to Vessel Leaving Port.

I interpret this SI-7 form as requiring that deficiencies 1 and 2 be rectified prior to April 21, 2009, and that deficiency 3 be rectified prior to the earlier of April 21, 2009 or the vessel leaving port.

[43] There is also evidence that an inspection of the vessel took place in April 2009. On April 9, 2009 the Inspection Certificate of April 21, 2008 (Exhibit M-4) was extended to expire on October 30, 2009, (Exhibit M-4). Also, another SI-7 form (Exhibit A-2), dated April 9, 2009, (the same date as the date when the Inspection Certificate was extended) refers to the extended expiry date of the Inspection Certificate. It identifies a single vessel deficiency, as follows:

Certificate short termed and due to expire October 30, 2009. Vessel to have a complete inclining and a new stability to be submitted for approval. Due to vessel modifications, all fisheries to be accounted for where applicable.

[44] Deficiencies 2 and 3 (the fire-equipment deficiencies) listed on the first SI-7 form (Exhibit A-3) have not been listed on the second SI-7 form (Exhibit A-2), but similarly worded deficiencies continue to appear as the last two of three SI-7 notes at the end of the Current Data Report (Exhibit M-3), as follows.

Rubber Hose on Suction and Discharge Side of Fire Pump to Replace Metallic or Heavy Duty Wire Core Hose.

Three (3) Firebuckets to Replace New with Lanyards.

The oral evidence is unclear as to whether or not the fire-equipment deficiencies were rectified. During cross-examination, Inspector Gillingham testified that, as those two deficiencies were not listed in the second SI-7 form, it means that the deficiencies had been rectified. However, during re-examination, she testified that when a deficiency is rectified, it is removed from the database and a notation is made on the SI-7 form.

[45] There is also evidence of an inspection of the vessel that took place in March 2010. No SI-7 form was entered into evidence with regard to that inspection. However, the first of three SI-7 notes at the end of the Current Data Report (Exhibit M-3) is as follows:

Copy of Preliminary Stability Booklet to be Onboard for Latest Inclining of Mar. 09/2010. Booklet to Include Conditions for Shrimping and Crab. Certificate Extension Pending Stability Booklet Submission.

The witness testified that an inspector would have been present for the inclining to which that note refers. The note only refers to a stability-booklet deficiency. It does not refer to the fire‑equipment deficiencies. The oral evidence is unclear as to the meaning of the last sentence of this note. During cross-examination, the witness first indicated that it means the stability booklet would have to be submitted prior to the certificate extension being granted, but later she acknowledged that it indicates there would be a certificate extension pending the stability booklet submission.

[46] Unfortunately, oral evidence from the inspector who inspected the vessel and generated the SI-7 forms (Exhibits A-2 and A-3) and the SI-7 notes in the Current Data Report (Exhibit M‑3) was not adduced at the Review Hearing. Based on the evidence adduced, I am not satisfied that the fire-equipment deficiencies remained outstanding in March 2010. Also, based on the evidence, I interpret the first SI-7 note on page 23 of the Current Data Report as indicating that there would be an inspection certificate extension while awaiting the submission of a stability booklet. Having said that, an actual inspection certificate issued or extended to be valid on May 4, 2010 was not entered into evidence.

[47] An inspection was commenced on March 9, 2010. The Applicant submits that it was completed. In reply, the Minister submits that it was not completed. While there is evidence that a stability booklet needed to be submitted and approved, there is insufficient evidence that any further inspection was required after the inspection of March 9, 2010. During re‑examination of the witness, Inspector Gillingham indicated that submission of a stability booklet would not automatically result in extension of an inspection certificate and that the inspector would have to "review" the vessel and the vessel's file prior to giving an extension. However, there is nothing in the first of the SI-7 notes on page 23 of the Current Data Report (Exhibit M-3) indicating a need for a further inspection. Indeed, the outstanding requirements that are evidenced by that note, which would have been generated by the inspector who inspected the vessel, are:

a) having a copy of a preliminary stability booklet onboard for the latest inclining of March 9, 2010; and

b) submitting the stability booklet.

[48] With regard to relevant facts at the time of the alleged violation, the facts in the present case are distinguishable from the facts in two other cases. In Atlantic Towing, there was evidence of outstanding deficiencies that were subject to inspection and there was no evidence of an ongoing inspection certificate. As I understand the facts in Northern Harvest Sea Farms Inc. v. Canada (Minister of Transport), 2011 TATCE 2 (review), TATC file no. MA-0043-37, there was evidence of outstanding deficiencies that were subject to inspection and there was evidence that the vessel had never received an inspection certificate. In the present case, there is insufficient evidence of any outstanding deficiency that was subject to inspection and there is evidence of an inspection certificate extension pending only the submission of a stability booklet.

[49] The present case is not one where vicarious liability is applicable. The violation alleged in the Notice is a contravention of paragraph 106(2)(a) of the Act, by the authorized representative. The alleged violation is not a contravention of some relevant provision of the Act, by an employee or agent of the authorized representative acting in the course of the employee's employment or within the scope of the agent's authority, for which the authorized representative is alleged to be vicariously liable.

VI. DETERMINATION

[50] The Minister of Transport did not prove, on a balance of probabilities, that the Applicant, Principal Holdings Limited, has contravened paragraph 106(2)(a)of the Act. Accordingly, the monetary penalty of $6 000 is dismissed.

March 31, 2011

Barrie LePitre

Member