Decisions

TATC File No. MA-0059-37
MoT File No. A20100520-101-00118

TRANSPORTATION APPEAL TRIBUNAL OF CANADA

BETWEEN:

Baffin Fisheries (2000) Ltd., Applicant

- and -

Minister of Transport, Respondent

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


Review Determination
David G. Henley


Decision: October 19, 2011

Citation: Baffin Fisheries (2000) Ltd. v. Canada (Minister of Transport), 2011 TATCE 26 (Review)

Heard at St. John's, Newfoundland and Labrador, on April 5, 2011

Held: The Minister of Transport has proven, on a balance of probabilities, that the Applicant, Baffin Fisheries (2000) Ltd., violated paragraph 106(2)(a) of the Canada Shipping Act, 2001. I reduce the penalty from $6 000 to $2 500.

The total amount of $2 500 is payable to the Receiver General for Canada and must be received by the Transportation Appeal Tribunal of Canada within thirty-five (35) days of service of this Determination.

I. BACKGROUND

[1] On May 20, 2010, the Minister of Transport ("Minister") issued a Notice of Violation ("Notice") to Baffin Fisheries (2000) Ltd. ("Baffin Fisheries") for a violation of paragraph 106(2)(a) of the Canada Shipping Act, 2001 ("Act") with respect to inspections of the fishing vessel Vair ("Vessel") The Notice indicated that an administrative penalty was assessed for a violation pursuant to the Administrative Monetary Penalties Regulations, SOR/2008-97 ("AMPRs"). Schedule A of the Notice stated the following:

On or about 4 May 2010, at or near Conception Harbour in the province of Newfoundland and Labrador, BAFFIN FISHERIES (2000) LTD., being the authorized representative of the vessel "Vair", 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.

[2] In Schedule A to the Notice, a penalty of $6 000 was assessed by the Minister.

[3] On June 22, 2010, Baffin Fisheries requested a review of the administrative monetary penalty by the Transportation Appeal Tribunal of Canada ("Tribunal").

II. STATUTES AND REGULATIONS

[4] Paragraph 106(2)(a) of the Act provides as follows:

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;

[5] The following sections of the Act are relevant:

2. The definitions in this section apply in this Act.

"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 that is registered or listed under Part 2 (Registration, Listing and Recording)…

6. The objectives of this Act are to

(a) protect the health and well-being of individuals, including the crews of vessels, who participate in marine transportation and commerce;

(b) promote safety in marine transportation and recreational boating;

(c) protect the marine environment from damage due to navigation and shipping activities;

(d) develop a regulatory scheme that encourages viable, effective and economical marine transportation and commerce;

(e) promote an efficient marine transportation system;

(f) develop a regulatory scheme that encourages the viable, effective and economical use of Canadian waters by recreational boaters;

(g) ensure that Canada can meet its international obligations under bilateral and multilateral agreements with respect to navigation and shipping;

(h) encourage the harmonization of marine practices; and

(i) establish an effective inspection and enforcement program.

17.1 (1) Every Canadian maritime document is valid for the period specified by the Minister of Transport. The Minister may, on application made before a document expires and in the form and manner specified by the Minister, extend the period if the Minister is satisfied that it is not feasible to issue a new document before the document expires.

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,

(ii) the period, being thirty days after the notice is served, within which the penalty must be paid or a review of the notice requested, and

(iii) particulars of the manner in which, and the address at which, the penalty must be paid or a review requested.

232.1 (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.

233. If a contravention can be proceeded with as a violation or as an offence, the Minister may commence proceedings in respect of that contravention as a violation or recommend that it be proceeded with as an offence, but it may be proceeded with only as one or the other.

236. For greater certainty, a violation is not an offence and, accordingly, section 126 of the Criminal Code does not apply.

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

[….]

(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;

254.(1) No person may be found guilty of an offence under this Act if the person establishes that they exercised due diligence to prevent its commission.

[6] Paragraphs 9(a) to (d), and subsections 10(1) and 10(2) of the Vessel Certificates Regulations, SOR/2007-31 ("VCRs"), provide as follows:

9. (1) Sections 10 and 11 apply in respect of the following Canadian vessels if they are not Safety Convention vessels:

(a) vessels of 15 gross tonnage or less that carry more than 12 passengers;

(b) vessels of more than 15 gross tonnage;

(c) vessels fitted with a boiler that operates at a pressure in excess of 103 kPa; and

(d) vessels fitted with an unfired pressure vessel.

(2) Sections 10 and 11 do not apply in respect of

(a) pleasure craft; or

(b) inflatable vessels, other than motorized rigid-hull inflatable vessels, that carry persons on an excursion in Canadian waters for remuneration and are controlled by a guide.

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.

[7] Sections 5 and 6 and subsections 41(3) to (5) of the Large Fishing Vessel Inspection Regulations, C.R.C., c. 1435 ("LFVI Regulations"), provide as follows:

5. These Regulations apply to new fishing vessels over 24.4 m in length or 150 tons, gross tonnage, that are not sailing ships.

6. Sections 10 to 13.1, subsections 15(12) to (12.2) and (15) and sections 19.1, 22.1, 24 to 27 and 30 to 42 apply in respect of every existing fishing vessel over 24.4 m in length or 150 tons, gross tonnage, that is not a sailing ship.

41. (3) Notwithstanding the requirements for the periodic inspection of hull and machinery prescribed in these Regulations, an inspector may issue or extend an inspection certificate for a period not exceeding

(a) two months beyond the due date of periodic inspection; or

(b) five months beyond the due date of periodic inspection if authorized to do so by the Divisional Supervisor.

(4) Prior to issuing or extending an inspection certificate under this section, the inspector shall satisfy himself from such inspection of the hull, machinery and equipment as is possible afloat, and without opening up any machinery except boilers and boiler mountings, that the fishing vessel is in a seaworthy condition.

(5) An inspection certificate issued or extended up to the maximum period allowed under subsection (3) shall not be renewed or further extended without the permission of the Board.

[8] Subsection 15(1) of the Transportation Appeal Tribunal of Canada Act, S.C. 2001, c.29 ("TATC Act"), provides as follows:

15. (1) Subject to subsection (2), the Tribunal is not bound by any legal or technical rules of evidence in conducting any matter that comes before it, and all such matters shall be dealt with by it as informally and expeditiously as the circumstances and considerations of fairness and natural justice permit.

[9] Section 4 of the Transportation Appeal Tribunal of Canada Rules ("Tribunal Rules") provides as follows:

4. Where a procedural matter not provided for by the Act or by these Rules arises during the course of any proceeding, the Tribunal may take any action it considers necessary to enable it to settle the matter effectively, completely and fairly.

[10] Sections 11 and 12 of the Interpretation Act, R.S.C., 1985, c. I‑21, provide as follows:

11. The expression "shall" is to be construed as imperative and the expression "may" as permissive.

12. Every enactment is deemed remedial, and shall be given such fair, large and liberal construction and interpretation as best ensures the attainment of its objects.

III. EVIDENCE

A. Minister of Transport

(1) Carl Snow

[11] At the time of the alleged violation, Carl Snow was a Marine Communications and Traffic Services ("MCTS") Officer at the MCTS Centre, Fisheries and Oceans Canada, in St. John's, Newfoundland and Labrador. Mr. Snow testified that the MCTS Centre manages the traffic within and the approaches to the Port of St. John's, and also manages the Coast Guard radio service which provides safety information and services for vessels.

[12] Mr. Snow testified that he sent an email to Leann Gillingham (Exhibit M‑1) on May 6, 2010 at 11:03 a.m. (local time) confirming that the Vessel had entered the St. John's traffic zone on May 4, 2010, at 21:26 (local time) and had been secured that night at Pier 19 at the Port of St. John's at 23:45 (local time). Mr. Snow confirmed the location of Pier 19 on a chart depicting the Port of St. John's (Exhibit M‑2). Mr. Snow also indicated the location of the traffic zone, stating that vessels contact the MCTS Centre when they arrive in the traffic zone.

[13] On cross‑examination, Mr. Snow confirmed that he did not see the Vessel sail into St. John's nor did he see who was in control of the Vessel.

(2) Leann Gillingham

[14] Leann Gillingham is a Marine Inspector with Enforcement and Compliance at Transport Canada. She confirmed that she is familiar with the Vessel. After being presented with the Transcript of Registry for the Vessel (Exhibit M‑3) she confirmed the length of the Vessel at 25.69 metres and its gross tonnage at 149.62. Ms. Gillingham also confirmed that the Authorized Representative and the owner indicated on the Transcript of Registry for the Vessel is Baffin Fisheries.

[15] Ms. Gillingham reviewed the email presented to Mr. Snow (Exhibit M‑1) and confirmed that it was an email sent from him to her to verify whether the Vessel had entered the St. John's traffic zone and if it had been at sea. She stated that she was tasked by her manager to perform an investigation with respect to a possible expired inspection certificate on board the Vessel. She indicated that she took the Vessel's paper file from the office and looked at the last inspection certificate in the file. Ms. Gillingham then proceeded to the Vessel which was tied up at the Port of St. John's. Ms. Gillingham confirmed that the inspection certificate presented to her (Exhibit M‑4) was the inspection certificate held in the file that she had reviewed prior to departing for the Vessel.

[16] Ms. Gillingham testified that when she arrived at the Vessel there was one person on board, Dennis Ellis. She stated that Mr. Ellis identified himself as the Captain of the Vessel. Ms. Gillingham testified that she told Mr. Ellis she was there to investigate the fact that the Vessel had an expired inspection certificate and asked permission to come on board.

[17] Ms. Gillingham indicated that, according to the copy of the inspection certificate on file, the Vessel did not have a valid inspection certificate on May 4, 2010.

[18] On cross-examination, Ms. Gillingham was presented with notes which she identified as having been taken by her at the time of the inspection (Exhibit A-1). She confirmed that her notes indicated that she saw an inspection certificate on the bulkhead of the Vessel signifying that it had been "short-termed" to December 6, 2009. She testified that the inspection certificate gave no indication why it had been short-termed.

[19] Ms. Gillingham testified that she did not examine any Post-Inspection Reports for the previous inspection completed in July of 2009. A Post-Inspection Report (Exhibit A‑2) was identified by Ms. Gillingham as a "shot screen" (meaning ‘screen shot') from a database maintained by Transport Canada. When asked about a reference in the database entries in the report (Exhibit A‑2) to "short-termed pending T.C. [Transport Canada] stability approval", Ms. Gillingham replied that she had no first-hand knowledge of the entry but gathered that it was related to an issue with the Vessel. Ms. Gillingham confirmed that Transport Canada requires stability books to be approved by an inspector. She testified, however, that in her role, she does not deal with stability books and confirmed that her duties do not include inspecting vessels.

B. Applicant

[20] As a preliminary matter, the Applicant sought to introduce evidence by way of three affidavits (titled ‘Book of Evidence') noting that it fully expected cross-examination. One of the witnesses, John Cabot, for which the affidavit evidence was being introduced, was present during the Hearing. The Minister's representative confirmed that she had no objection to evidence by way of affidavit for the other two affiants, Bernice Whelan and Zachary Cabot. She expressed no other objections regarding the content of those affidavits.

[21] With respect to John Cabot's affidavit, the Minister's representative accepted its entrance into evidence, subject to objections concerning hearsay within it and her right to cross-examine Mr. Cabot. The Minister's representative specifically noted instances of hearsay in paragraphs 17, 29, and 30 of Mr. Cabot's affidavit, and also confirmed that she was objecting more generally to any hearsay within it being entered into evidence.

[22] The Applicant's representative noted that the Guide for Applicants for the Tribunal states that the Applicant is not required and shall not be held to give any evidence or testimony. She indicated that the Applicant made a procedural decision as to how it would present evidence. The Applicant submitted that there is nothing that precludes evidence being entered in this manner. She conceded that the details of the alleged conversations with Transport Canada would be hearsay and agreed to remove those particular sections of the paragraphs, but submitted that the attempts made to contact Transport Canada on several occasions should be admissible.

[23] The admission of affidavit evidence when the witness is present to testify is certainly unusual. For a variety of reasons, it is preferable to have evidence admitted by the viva voce testimony of a witness to better allow the trier of fact to assess the credibility of the statements being made by the witness. However, Rule 4 of the Tribunal Rules allows the Tribunal to vary procedure where it considers such variations necessary to enable it to settle the matter effectively, completely and fairly. In addition, subsection 15(1) of the TATC Act provides that the strict rules of evidence do not apply to these proceedings. Ultimately, had the Applicant chosen to do so, it could have had Mr. Cabot simply read the affidavit into evidence, which would have had the same effect as bringing his statements into evidence. Given the opportunity afforded to the Minister to cross-examine Mr. Cabot on his affidavit, I accepted its admission into evidence, subject to dealing with its hearsay portions, which I address below in more detail.

(1) John Cabot

[24] In his affidavit of April 1, 2011, John Cabot stated that he is the owner and president of Baffin Fisheries and the master of the Vessel, which is owned and operated by Baffin Fisheries and normally stationed at Conception Harbour when not at sea.

[25] Approximately once per year, the Vessel undergoes a routine inspection from Transport Canada in relation to both machinery and safety to ensure compliance with the regulations under the Act. These inspections are required to renew its Steamship Inspection Certificate (‘inspection certificate' in this Determination), which authorizes vessels to engage on voyages. When the Vessel passes inspection, the inspection certificate is normally renewed for a twelve‑month period.

[26] Mr. Cabot's evidence was that, at all relevant times, Baffin Fisheries held an inspection certificate for the Vessel.

[27] Mr. Cabot summarized his understanding of and experience with Transport Canada's requirements regarding the stability books of large vessels. In addition to the yearly inspections, it is also a requirement of Transport Canada that stability books for large vessels be submitted and approved prior to inspection certificates being issued or renewed. However, since it can take a considerable amount of time for these books to be reviewed and approved, it is the practice of Transport Canada to unofficially approve stability books on a preliminary basis until they can be reviewed in depth and officially approved. Until that time, the inspection certificates are only extended for a period of two to five months at a time. This appears to be colloquially referred to as "short‑terming".

[28] Mr. Cabot attested that on or about June 2006, the naval architects who prepared the Vessel's stability books submitted them to Transport Canada for approval. As of the date of the affidavit (April 1, 2011), the stability books had not yet been officially approved by Transport Canada.

[29] On or about July 2006, an inspection was conducted on the Vessel and an inspection certificate was issued at that time. Mr. Cabot attested that because official approval of the stability books was pending, the inspection certificate could only be short termed instead of being renewed for the normal twelve‑month period. However, had the stability books been approved, the inspection certificate could have been renewed for the regular twelve‑month period.

[30] Mr. Cabot's affidavit indicated that on April 29, 2009, the inspection certificate for the Vessel was due to expire. However, following an inspection, the inspection certificate was renewed for two months until June 29, 2009. Following a further inspection on July 6, 2009, Transport Canada renewed the inspection certificate for another five months, scheduled to expire on December 6, 2009, pending approval of the stability books.

[31] Mr. Cabot's affidavit indicated that, prior to the inspection certificate's expiration in December 2009, he contacted Transport Canada to arrange for the inspections required for its renewal and was advised by James J. Kenny, Regional Manager of the St. John's Office at Transport Canada, that an inspector would conduct the necessary inspections in the near future, without specifying a timeframe. I have excluded the statements alleged to have been said by Mr. Kenny as hearsay (paragraph 12 of the affidavit, April 1, 2011) and assigned them no weight. There was no indication of any reason why Mr. Kenny could not have been called as a witness.

[32] Mr. Cabot attested that, despite repeated requests, months passed without Transport Canada sending an inspector to the Vessel. He stated that he became concerned the inspection would not be completed in time for the start of the fishing season in April, directly impacting his ability to earn a living.

[33] In Mr. Cabot's affidavit, he stated that on or about Thursday, April 15, 2010, an inspector from Transport Canada, Daniel M. Earles, attended the Vessel while it was docked at Conception Harbour. Mr. Cabot's affidavit also indicated that the purpose of the visit was to conduct an annual inspection of the machinery. While the basis for Mr. Cabot's understanding of the purpose of the visit is not clear, this aspect was not contested by the Minister and is not in controversy.

[34] Mr. Cabot attested that, following the completion of the inspection that same day, Mr. Earles provided him with a list of deficiencies to be corrected. At that time, Mr. Cabot made arrangements with Mr. Earles for a return visit on Thursday, April 22, 2010, by which time Mr. Cabot expected to have the deficiencies corrected. Mr. Cabot also attested that he made arrangements with Electro Mechanical Limited for a technician to attend the Vessel during the inspection for any needed on-the-spot repairs.

[35] Mr. Cabot attested that Mr. Earles attended the Vessel again on April 22, 2010 for the follow-up inspection, after which there remained a few deficiencies to be corrected. Mr. Cabot indicated that he made arrangements with Mr. Earles to attend the Vessel again on April 27, 2010, and with Electro Mechanical Limited for a technician to attend the Vessel at the same time for any needed on-the-spot repairs.

[36] Mr. Cabot attested that on or about Monday, April 26, 2010, he telephoned Electro Mechanical Limited to confirm the technician's attendance at the Vessel for April 27, 2010. In his affidavit, he stated that the technician advised him that he had spoken with Mr. Earles who had informed him that he was not scheduled to attend the Vessel. Mr. Cabot also stated that the technician advised him that if Mr. Earles was not going to be present, there would be little point in him attending (paragraph 17 of the affidavit, April 1, 2011). The evidence with respect to the technician's statements and the report of his conversation with Mr. Earles is hearsay and I have excluded it, assigning it no weight.

[37] In his affidavit, Mr. Cabot attested that, following this conversation, he made several unsuccessful attempts to contact Mr. Kenny to determine the status with respect to completing the inspection.

[38] Mr. Cabot attested that on Tuesday, April 27, 2010, no inspector from Transport Canada attended the Vessel.

[39] Mr. Cabot further attested that beginning on Tuesday, April 27, 2010, and continuing for the next few days, he, his secretary, Ms. Whelan, and his son, Zachary Cabot, made several unsuccessful attempts to contact Mr. Kenny. Mr. Cabot indicated that messages were left asking Mr. Kenny to contact the Applicant's office as soon as possible, but the messages were not returned.

[40] Mr. Cabot attested that on or about Friday, April 30, 2010, he telephoned Mr. Kenny and left a message on his voicemail advising him that if an inspector had not returned to the Vessel to complete the inspection by Monday, May 3, 2010, the Vessel would be in the Port of St. John's on Tuesday, May 4, 2010, to enable inspectors to complete the inspection.

[41] Mr. Cabot's affidavit indicated that no inspector from Transport Canada attended the Vessel on Monday, May 3, 2010. The Vessel was docked at the Port of St. John's on Tuesday, May 4, 2010; that same day Mr. Earles attended the Vessel and completed his inspection in less than an hour. There were no issues and Mr. Earles signed off on the machinery inspection.

[42] In his affidavit, Mr. Cabot indicated that on May 5, 2010, he was returning to the Vessel when he saw a Transport Canada employee leaving. He stated that the person identified herself as Ms. Gillingham and advised him that she was there to conduct an investigation concerning the circumstances surrounding the Vessel being docked at St. John's. He also stated that Ms. Gillingham advised him that she required a statement from him, a copy of the inspection certificate and the Vessel's Safe Manning Certificate. While Ms. Gillingham's statements reported here in the affidavit (paragraph 25, April 1, 2011) are hearsay, she testified during the Hearing and the content of this discussion is not in controversy.

[43] Mr. Cabot attested that the attendance of Ms. Gillingham on the Vessel infuriated and frustrated him because Transport Canada did not have the time to conduct the required safety inspection despite repeated requests, even though it did have time to investigate the Vessel being docked at St. John's. As a result of this frustration, he told Ms. Gillingham to leave the Vessel using inappropriate language. Ms. Gillingham stated, when she was leaving the Vessel, that it had not been her decision to conduct the investigation and indicated that she might return at a later time. The content of this discussion (paragraphs 26 to 28 of the affidavit, April 1, 2011) is also hearsay but Ms. Gillingham was present to testify and this evidence was not contradicted.

[44] Mr. Cabot attested that later that day (May 5, 2010), he contacted Transport Canada and asked to speak with the manager for Newfoundland and Labrador. He stated that he was advised by the receptionist that the manager was Jim Kennedy and that he was based out of the Halifax office. He also attested that the receptionist told him that Mr. Kennedy was in St. John's at the time of the call. Mr. Cabot stated that he left a message asking Mr. Kennedy to contact him. Mr. Cabot further indicated that when Mr. Kennedy returned his call, Mr. Cabot advised him of the problems he was experiencing. He stated that Mr. Kennedy said he would look into the matter and then respond to him, though he never did. I accept the evidence that Mr. Cabot made an attempt to contact Mr. Kennedy but exclude the statements of the receptionist and Mr. Kennedy (paragraph 29 of the affidavit, April 1, 2011) as hearsay.

[45] Mr. Cabot attested that he later contacted Mr. Kenny on May 5, 2010. He stated that Mr. Kenny advised him that no inspectors were available and could not provide a time frame for when an inspector would be available. Mr. Cabot stated that he informed Mr. Kenny of his recent difficulties, who in turn acknowledged the problem. Again, the alleged statements by Mr. Kenny (paragraph 30 of the affidavit) are hearsay and I assign them no weight.

[46] Mr. Cabot attested that on or about Thursday, May 6, 2010, he again telephoned Mr. Kenny to arrange for the required safety inspection. He stated that Mr. Kenny advised him that he would check into matters and call him the next day. The alleged statements by Mr. Kenny (paragraph 31 of the affidavit, April 1, 2011) are hearsay and I assign them no weight.

[47] Mr. Cabot indicated that on or about Friday, May 7, 2010, at approximately 8:55 a.m., he received a telephone call from Bert Hynes, a Safety Inspector with Transport Canada, who indicated that he could conduct the inspection immediately; otherwise, Mr. Cabot would need to wait until the following week (paragraph 32 of the affidavit, April 1, 2011). Mr. Cabot stated that he advised Mr. Hynes that the Vessel was ready for inspection. The alleged statements by Mr. Hynes are hearsay and I assign them no weight.

[48] Mr. Cabot stated that Mr. Hynes attended the Vessel on May 7, 2010, and completed the safety inspection in less than an hour. Mr. Cabot attested that there were no issues with the inspection and that the Vessel was cleared to sail on Friday, May 7, 2010, with a renewed inspection certificate.

[49] The remainder of Mr. Cabot's affidavit explains why he believes Transport Canada was unable to neither conduct the inspection on a timely basis nor complete the stability books review. These comments are a combination of opinion and argument and will be dealt with under ‘Arguments' accordingly.

[50] On cross-examination, Mr. Cabot confirmed that the Vessel was in the Port of St. John's on Tuesday, May 4, 2010. In response to a question of whether the Vessel held a valid inspection certificate at the time, Mr. Cabot confirmed that the inspection had not yet been completed by then. He did confirm that the Vessel held a valid inspection certificate as of the date of this Hearing (April 5, 2011).

(2) Bernice Whelan

[51] Ms. Whelan's affidavit of March 31, 2011, indicates that she was employed as a secretary with the Applicant. Her affidavit further indicates that on April 15, 2010, and April 22, 2010, an inspector from Transport Canada attended the Vessel for the purpose of conducting a routine inspection.

[52] She attested that Mr. Cabot advised her that the inspector was scheduled to return to the Vessel on April 26, 2010 to complete the inspection. She also attested that on April 26, 2010, when the inspector did not arrive, Mr. Cabot asked her to contact Mr. Kenny of Transport Canada regarding the inspection's completion. While Mr. Cabot's statements in Ms. Whelan's affidavit are hearsay, Mr. Cabot was present at the Hearing and gave evidence in respect of these issues.

[53] Ms. Whelan stated in her affidavit that from April 26, 2010 to April 30, 2010, she made numerous telephone calls to Transport Canada attempting to reach Mr. Kenny. Her evidence indicated that she left messages on Mr. Kenny's voicemail which were not returned.

(3) Zachary Cabot

[54] Zachary Cabot was employed with the Applicant and is the son of Mr. Cabot. Zachary Cabot's affidavit of March 31, 2011, indicated that on April 15, 2010, and April 22, 2010, an inspector from Transport Canada attended the company's Vessel for the purpose of conducting a routine inspection.

[55] Zachary Cabot attested that Mr. Cabot advised him that the inspector was scheduled to return to the Vessel on April 26, 2010, to complete the inspection. Zachary Cabot also attested that on April 26, 2010, when the inspector did not arrive, Mr. Cabot asked Zachary Cabot to contact Mr. Kenny of Transport Canada regarding the inspection's completion. Again, while Mr. Cabot's statements recorded in Zachary Cabot's affidavit are hearsay, Mr. Cabot was present at the Hearing and gave evidence in respect of these issues.

[56] Zachary Cabot's affidavit states that from April 26, 2010, to April 30, 2010, he made numerous telephone calls to Transport Canada attempting to reach Mr. Kenny. His evidence indicates that he left messages on Mr. Kenny's voicemail which were not returned.

IV. ARGUMENTS

A. Minister

[57] The Minister referred to the Determination of Northern Harvest Sea Farms Inc. v. Canada (Minister of Transport), 2011 TATCE 2 (Review), TATC File No.: MA‑0043‑37, where, on the same infraction as the present matter, the Tribunal stated that the elements to be proven were that the "vessel… was engaged in service" and that "[p]rior to the above service, the Authorized Representative failed to ensure that the vessel and its machinery were inspected for the purpose of obtaining an inspection certificate" (paragraph [7]).

[58] The Minister asserted that it is uncontested that the Vessel was at sea on May 4, 2010, that it was a Canadian vessel, that its Authorized Representative was at the time and still is Baffin Fisheries, and that the Vessel did not hold a valid inspection certificate on May 4, 2010. The Minister asserted that those elements are not contested as they were confirmed in Mr. Cabot's testimony.

[59] The Minister submitted that the requirements found in paragraph 106(2)(a) of the Act are mandatory obligations for the Authorized Representative:

106. (2) The authorized representative of a Canadian vessel shall (emphasis added) 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;

[60] The Minister relied upon section 11 of the Interpretation Act for the proposition that the expression "shall" is to be construed as imperative. She stated that the Canada Shipping Act gives the Minister the authority, under ‘Part IV: Safety', subsection 120(1), to make regulations regarding the safety of vessels and safety requirements. Section 9 and subsection 10(1) of the VCRs, provide that a vessel of more than 15 gross tonnage shall not engage on a voyage unless it holds a certificate issued under subsection 10(2), which reads as follows:

10.(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.

[61] The Minister noted that an inspection certificate can be issued to a large fishing vessel that meets the inspection requirements under the regulations in Part IV of the Act. The Minister submitted that, in this case, the relevant regulations are the LFVI Regulations, which apply to fishing vessels over 24.4 metres in length or 150 tons or more (sections 5 and 6). The Minister indicated that the requirements for the annual inspection of vessels are provided from sections 32 to 42 of the LFVI Regulations. The Minister asserted that the evidence confirms that the Vessel is over 24.4 metres in length and, therefore, the annual inspection requirements found in the LFVI Regulations apply.

[62] The Minister asserted that the inspection certificate for the Vessel indicated that the last annual inspection was in April of 2009, meaning that the Vessel was due for inspection again in April of 2010, just prior to the voyage in question. It was the Minister's position that the Applicant could not ignore the law if the latter did not deem it necessary to comply.

[63] The Minister argued that the Applicant seems to have misunderstood the provisions for the issuance of a twelve-month inspection certificate, a short‑term inspection certificate, and an extension to an inspection certificate. The Minister submitted that an annual inspection is completed in order to issue a twelve-month (annual) inspection certificate. If a twelve-month inspection certificate cannot be issued, a short‑term inspection certificate can be issued (if the vessel is considered seaworthy) despite the possibility that there may still be some deficiencies to be corrected. If the vessel is not considered seaworthy, no inspection certificate is issued until the deficiencies are corrected. It was the Minister's submission that an extension can be granted after the expiration of a short‑term inspection certificate. The Minister noted that the Applicant was unable to receive an extension before acquiring a short‑term inspection certificate. Therefore, the Minister submitted the Applicant needed to have obtained either a twelve-month inspection certificate or a short‑term inspection certificate before engaging on a voyage.

[64] In support of this position, the Minister referred the Tribunal to subsections 41(3) and (4) of the LFVI Regulations:

41. (3) Notwithstanding the requirements for the periodic inspection of hull and machinery prescribed in these Regulations, an inspector may issue or extend an inspection certificate for a period not exceeding

(a) two months beyond the due date of periodic inspection; or

(b) five months beyond the due date of periodic inspection if authorized to do so by the Divisional Supervisor.

(4) Prior to issuing or extending an inspection certificate under this section, the inspector shall satisfy himself from such inspection of the hull, machinery and equipment as is possible afloat, and without opening up any machinery except boilers and boiler mountings, that the fishing vessel is in a seaworthy condition.

[65] It was the Minister's position that the Applicant could have obtained either a twelve-month inspection certificate or a short-term inspection certificate while addressing pending deficiency issues, provided his vessel was considered in seaworthy condition.

[66] The Minister referred to paragraph [31] of Northern Harvest Sea Farms where Mr. Michael Keefe specified that:

A vessel can be visited several times in the course of being inspected by a TCMS inspector for compliance with the Regulations made pursuant to the Act. While each visit to a vessel might be referred to by some as an "inspection", it is my view, and in keeping with the objectives of the Act, that the "inspection" referred to in paragraph 106(2)(a) is the end result of those several visits to inspect the various components of the ship. The proof that the inspection referred to at paragraph 106(2)(a) has been carried out lies with the Safety Inspection Certificate issued by TCMS. Without the issuance of a Safety Inspection Certificate, the "inspection" required under paragraph 106(2)(a) has not been completed.

[67] The Minister disputed the Applicant's position that Northern Harvest Sea Farms was not applicable to the present case because the inspection involved there was more extensive than this Vessel's inspection. The Minister submitted that there is insufficient information regarding the respective inspections to support such a distinction.

[68] The Minister argued that the lack of a current inspection certificate demonstrates that the inspection had not been completed. She further argued that, during Mr. Cabot's cross‑examination, he admitted that the inspection had not been completed as there were remaining issues to be resolved. The Minister reiterated that, under section 41 of the LFVI Regulations, the inspection certificate could have been extended.

[69] The position of the Minister was that the elements of the alleged violation regarding paragraph 106(2)(a) of the Act and Section 10 of the VCRs were proven on a balance of probabilities. The Minister's representative also noted that it is not an adequate defence to simply state that the Applicant attempted to contact Transport Canada and did not get an answer. It is the Minister's position that the Applicant had a successful history of prior inspections and extensions and understood the process well.

[70] The Minister submitted that there was no basis to the Applicant's argument that, due to a shortage of qualified inspectors, it was prevented from having the inspection completed in a timely manner. The Minister noted that an inspection certificate was issued to the Vessel, which I understand to mean the inspection certificate dated May 7, 2010, shortly after the Applicant had been advised that it had committed a violation on May 4, 2010. The Minister submitted that Mr. Cabot admitted in his affidavit that on April 15, 2010, the Applicant had been given a list of deficiencies to be corrected before the issuance of the Vessel's annual inspection certificate. It was the Minister's position that Transport Canada properly responded without undue delay to the Applicant's request for inspections, and that the issuance of inspection certificates to the Authorized Representative supports this position.

[71] In response to the Applicant's argument regarding the requirement that the inspection certificate be valid, the Minister referred to the definition of ‘valid' in the Canadian Oxford Dictionary, 2d edition:

"(...) executed with the proper formalities; legally binding and acceptable…; not having reached its expiry date…"

[72] The Minister submitted that the rules of interpretation require the words of a statute to be read in their entire context and in their grammatical and ordinary sense, in harmony with the scheme of the statute, the object of the statute, and the intention of Parliament. However, the Minister argued that the rules of interpretation are not necessary to understand section 17 of the Act, as well as the fact that after a Canadian maritime document has expired, a new document is necessary for validity:

17. (1) Every Canadian maritime document is valid for the period specified by the Minister of Transport. The Minister may, on application made before a document expires and in the form and manner specified by the Minister, extend the period if the Minister is satisfied that it is not feasible to issue a new document before the document expires (emphasis added).

[73] It was the position of the Minister that it is clear that when a document expires, it is no longer valid. The Minister submitted that a Canadian maritime document will be valid until it reaches its expiration date. The Minister also referred to section 12 of the Interpretation Act which states that "[e]very enactment is deemed remedial, and shall be given such fair, large and liberal construction and interpretation as best ensures the attainment of its objects".

[74] In support of this position, the Minister referred the Tribunal to the objectives stated within section 6 of the Act, emphasizing:

6. The objectives of this Act are to

(aprotect the health and well-being of individuals, including the crews of vessels, who participate in marine transportation and commerce (emphasis added);

(bpromote safety in marine transportation and recreational boating (emphasis added);

(c) protect the marine environment from damage due to navigation and shipping activities;

(d) develop a regulatory scheme that encourages viable, effective and economical marine transportation and commerce;

(e) promote an efficient marine transportation system;

(f) develop a regulatory scheme that encourages the viable, effective and economical use of Canadian waters by recreational boaters;

(gensure that Canada can meet its international obligations under bilateral and multilateral agreements with respect to navigation and shipping (emphasis added);

(h) encourage the harmonization of marine practices; and

(iestablish an effective inspection and enforcement program (emphasis added).

[75] It was the Minister's position that the Act therefore requires a Canadian maritime document to be valid; it is no longer valid when it expires.

[76] In response to the Applicant's position that statutes with penal consequences should be strictly construed in favour of the accused, the Minister submitted that the administrative penalty applied has no penal consequence. It was the Minister's position that a violation under the AMPRs is not considered an offence under sections 233 and 236 of the Act:

233. If a contravention can be proceeded with as a violation or as an offence, the Minister may commence proceedings in respect of that contravention as a violation or recommend that it be proceeded with as an offence, but it may be proceeded with only as one or the other.

236. For greater certainty, a violation is not an offence and , accordingly, section 126 of the Criminal Code does not apply (emphasis added).

[77] The Minister submitted that the Authorized Representative was assessed a violation. The Minister noted that had it been charged with an offence, it would have been liable on summary conviction to a fine of not more than $1 000 000 or to imprisonment for a term of not more than 18 months as provided in paragraph 121(1)(d) and subsection 121(2) of the Act.

[78] It was the Minister's position that the minimum penalty for this offence is $6 000. With respect to the penalty, the Minister's representative referred to the Regulatory Impact Analysis Statement ("RIAS") for the AMPRs, specifically to page 625 of the Canada Gazette, Part II, Volume 142, Number 8, where the chart indicates that the range of penalties for a first violation, where the gravity is considered high, is from $1 250 to $6 000. The Minister asserted that sailing without a valid inspection certificate is considered a high-gravity violation, evident in the range of penalties in column 2 of the schedule to the AMPRs for paragraph 106(2)(a) of the Act.

[79] In response to the Applicant's argument that the penalty should be reduced in the same fashion as it was in D & C Management Ltd. v. Canada (Minister of Transport), 2010 TATCE 6 (Review), TATC File No.: MP‑0023‑37, the Minister submitted that the penalty was reduced in that case on the basis of the accused being the owner and sole shareholder of the company, which was considered a "one man show", and referred the Tribunal to paragraph [43]:

D & C Management is the authorised representative as well as the owner of the M/V Lynnwood (Exhibit M-2). During David Campbell's testimony, it was revealed that he is the owner and sole shareholder of D & C Management and that he owned only one vessel, the M/V Lynnwood. In the words of the Applicants' representative, he is "a one man show" (emphasis added).

[80] The Minister appeared to be submitting that this was not the case with the Applicant, though no evidence was tendered in respect of this issue.

B. Applicant

[81] The Applicant made three arguments:

(a) that no violation occurred;

(b) that, if a violation occurred, the defence of due diligence is available; and

(c) that, if it is determined that a violation has occurred and there is no defence of due diligence, the penalty should be reduced to the minimum amount.

[82] The Applicant noted that the Notice states that the Applicant violated paragraph 106(2)(a) of the Act, "[i]n 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." The Applicant acknowledged that subsection 10(1) states that no vessel shall engage on a voyage unless it holds an inspection certificate and argued that, at all relevant times, the Applicant held an inspection certificate prescribed by the legislation, albeit an expired one. It was the Applicant's submission that subsection 10(1) of the VCRs is silent in relation to whether an inspection certificate must be renewed in order to be valid. Essentially, the Applicant's representative argued that, although the Notice uses the word "valid", "valid" is not present in subsection 10(1) of the VCRs. Accordingly, there is no requirement that the inspection certificate be valid.

[83] The Applicant relied upon R. v. Church of Scientology, 18 C.C.C. (2d) 546 and R. v. Santa, 42 C.C.C. (2d) 471, for the proposition that, where there are ambiguities in statutes involving penal sanctions, the ambiguities should be resolved in favour of the accused.

[84] The Applicant submitted that, if a violation is found to have occurred, the defence of due diligence should be applied, referring to subsection 254(1) of the Act:

254. (1) No person may be found guilty of an offence under this Act if the person establishes that they exercised due diligence to prevent its commission.

(2) No vessel may be found guilty of an offence under this Act if the person who committed the act or omission that constitutes the offence establishes that they exercised due diligence to prevent its commission.

[85] It is the Applicant's position that it did everything possible to prevent the violation from occurring. The Applicant submitted that it had contacted Transport Canada before the inspection certificate expired on numerous occasions to schedule the necessary inspections. The Applicant asserted that on most occasions when calls were made, it was only able to reach voicemail. When they were able to reach someone, the inspector or person responding was unable to give a time as to when an inspector would be available to go to the Vessel to conduct the inspection. The Applicant acknowledged that an inspector did attend the Vessel on two occasions but failed to return on the third occasion to follow up and complete the inspection. The Applicant submitted that its efforts to contact Transport Canada are reflected in the evidence of Mr. Cabot, Ms. Whelan, and Zachary Cabot.

[86] The Applicant relied upon R. v. Courtaulds Fibres Canada, 76 C.C.C. (3d) 68, for the following statement on due diligence at paragraph [39]:

[39] Reasonable care and due diligence do not mean superhuman efforts. They mean a high standard of awareness and decisive, prompt, and continuing action. To demand more would, in my view, move a strict liability offence dangerously close to one of absolute liability.

[87] The Applicant argued that it was at the complete mercy of Transport Canada as to when the inspections would be completed and that it should not be penalized for inadequate staffing of inspectors. The Applicant also argued that Transport Canada required that the stability books for the Vessel be approved for the inspection certificates to be ‘long‑termed', which I take to mean the issuance of a twelve-month inspection certificate. The Applicant asserted that it can take five to ten years before final approval and that, in the meantime, the Applicant must take active steps to ensure that the inspection certificate is extended, requiring frequent inspections.

[88] The Applicant stated that the inspection certificate held at the time had been issued on June 29, 2009. Under normal circumstances, the Applicant submitted, the inspection certificate would have been valid for a twelve-month period, however, because the stability books were pending approval, the inspection certificate was "short termed" to five months. Had the stability books been approved, the inspection certificate would have been renewed for the full twelve months, rather than the shorter term of five months. The Applicant argued that it had been waiting for almost five years for the approval of its stability books, directly impacting the length of time an inspection certificate can be renewed for, creating a requirement for frequent inspections. Essentially, the Applicant argued that the long delay in approving its stability books contributed to the problem because it created a requirement for frequent inspections which could not be accommodated by Transport Canada due to a shortage of qualified inspectors. It was the Applicant's position that it took all the reasonable steps to ensure that the inspection certificate was renewed, and that it should not be penalized for matters beyond its control.

[89] The Applicant submitted that paragraph 106(2)(a) of the Act requires the Authorized Representative to ensure a vessel is inspected to obtain the required maritime documents. While the wording implies that the obligation rests entirely with the Authorized Representative, the Applicant submitted that the reality is that the Authorized Representative does not have control over the inspection process. Although the Authorized Representative takes the initial step to contact Transport Canada to arrange the required inspections, the latter decides when the inspections will be conducted. The Applicant submitted that the inspector's failure to complete the inspection after the earlier visits on April 15 and April 22, 2010, should not affect whether the Applicant is considered duly diligent as the Applicant has no control over when the inspector conducts the initial and subsequent inspections.

[90] The Applicant argued that, although it could have obtained a short-term inspection certificate while deficiencies were being addressed, it did not feel it was necessary since the inspection process had already begun and, in its view, it was reasonable to expect that it would be completed in a timely manner.

[91] The Applicant stated that Northern Harvest Sea Farms can easily be distinguished from the present case. The Applicant submitted that the inspection conducted in Northern Harvest Sea Farms was far more extensive than what was required in the present situation because that case involved the issuance of an inspection certificate as opposed to the renewal of one. The Applicant argued that the vessel in Northern Harvest Sea Farms did not have an engine or propeller, and that the Authorized Representative was passively ignorant, and did not take active steps regarding the inspection. In the present situation, the Applicant already held an inspection certificate, the inspection process was underway, and it was actively contacting Transport Canada to arrange for the inspection's completion.

[92] In addition to the above, it was the Applicant's submission that the inspection process was in motion. While the Northern Harvest Sea Farms case held that an inspection is not complete until the inspection certificate has been issued, the Applicant maintained its position that it took reasonable steps to ensure the inspection was completed. The Applicant reiterated that scheduling inspections is an administrative role of Transport Canada, beyond the control of the Applicant. The Applicant argued that the relevant issue is the lack of qualified inspectors available to conduct inspections in a timely manner, not the frequency of inspections, both of which are beyond the Applicant's control.

[93] In the alternative, if it is determined that there has been a violation and that the defence of due diligence is not available, the Applicant submitted that the penalty should be reduced from $6 000 to the minimum of $1 250.

[94] The Applicant stated that the RIAS associated with the AMPRs does not form a part of the AMPRs. Accordingly, the RIAS does not carry the same authority as legislation and the Tribunal has the authority to substitute the penalty for the minimal amount of $1 250 should it determine that a violation has occurred without the defence of due diligence. In D & C Management, at paragraph [42] the Tribunal noted:

[42] The Minister's representative indicated that the penalty in the Notice issued to D & C Management was set at $6 000, in accordance with Transport Canada's policy, for the minimum amount that could be awarded to a vessel or corporation. I note that the AMPRs set the minimum amount at $1 250. I also note that the Regulatory Impact Analysis Statement ("RIAS") accompanying the AMPRs, but not forming part of them, speaks to an intended general policy of awarding vessels and corporate offenders greater penalties than individual offenders for the same offence. The RIAS gives no rationale for such a policy, and the AMPRs themselves do not give any direction to carry out such a practice. It is my view that justice is not served when one bases the amount of a penalty on departmental policy with the class or status of an offender being the determining factor. In this case, D & C Management was awarded a penalty of $6 000, over four times the minimum amount, and there was no explanation of any aggravating factors that were considered when arriving at that figure. The reason for the figure appears to be only "departmental policy" (emphasis added).

[95] The Applicant submitted that D & C Management also involved a violation of paragraph 106(2)(a), but since there were no aggravating factors in that case, the penalty was reduced from $6 000 to $1 250. The Applicant submitted that, in the present case, there are no aggravating factors. The Applicant further submitted that the present case is not a situation of passive ignorance; rather, the Applicant and its staff made numerous unsuccessful attempts to communicate with Transport Canada to arrange for the required inspections. In addition, the Applicant submitted that it had a limited window of opportunity to earn a living and that Transport Canada directly impacted its livelihood by failing to conduct the inspections and approve the stability books in a timely manner. The Applicant argued that if Transport Canada places so much importance upon having a current inspection certificate, it should ensure that it has sufficient staff members to conduct inspections.

V. EVIDENCE, LEGISLATION AND POLICY ANALYSIS

A. Preliminary Matter – Hearsay Evidence in the Affidavits

[96] As discussed above, the Applicant sought to adduce its evidence by way of affidavit. The Minister noted and the Applicant accepted that certain aspects of Mr. Cabot's affidavit contained hearsay evidence.

[97] There were two components to the evidence provided by Mr. Cabot concerning this issue. The first was the evidence that attempts were made by Mr. Cabot to contact the Department and the second was the content of discussions with members of the Department and the replies that he received from them. The Applicant asked that it be accepted as evidence that attempts were made to contact Transport Canada, but agreed that the contents of the discussions would be hearsay. With respect to the statements by the affiants that attempts were made to contact Transport Canada, at least in respect of Mr. Cabot, the Minister could have cross-examined on this issue. Since there was no direct testimony in respect of this aspect of the evidence, it is difficult to assess its credibility and reliability. The testimony that calls were made and messages were left, as well as the content of those messages, is not hearsay. Only the record of those conversations, essentially what was said by other people, would be hearsay to the extent that the Applicant relies upon those statements for the truth of their contents.

[98] The Minister specifically noted hearsay objections in paragraphs 17, 29, and 30 of Mr. Cabot's affidavit; in addition, I note that hearsay is also present in paragraphs 12, 25, 31, and 32. The Applicant could have issued subpoenas for some or all of the people who made the statements in the above‑mentioned paragraphs of the affidavit.

[99] The affidavits of Ms. Whelan and Zachary Cabot essentially lead evidence to confirm that inspections were conducted on April 15 and 22, 2010, and of their attempts to contact Transport Canada with respect to the inspection of the Vessel. As the affiants were not present, their evidence could not be tested or cross-examined. However, Mr. Cabot was present and his affidavit attested to the same evidence as that in the affidavits of Ms. Whelan and Zachary Cabot. Mr. Cabot was available for cross-examination on these points and there is nothing which would cause me to doubt the veracity of his statements in this respect. For that reason, I am giving Mr. Cabot the benefit of the doubt on this aspect of his evidence and, on that basis, I accept the evidence in all three of the affidavits that inspections were conducted by Transport Canada at the Vessel on April 15 and 22, 2010, and that, subsequent to these inspections, a number of attempts were made by the affiants to contact Transport Canada to arrange a final inspection.

[100] With respect to Mr. Cabot's affidavit, as noted above in this section, I exclude the portions which are hearsay and assign them no weight. Specifically, the following aspects of the evidence in his affidavit are excluded:

(a) In paragraph 12, the reference to Mr. Kenny's reply

(b) In paragraph 17, the technician's statements and the report of the conversation between the technician and Mr. Earles

(c) In paragraph 29, the report of the statements by the receptionist and Mr. Kennedy

(d) In paragraphs 30 and 31, the report of Mr. Kenny's statements

(e) In paragraph 32, the report of Mr. Hyne's statements

B. Elements of the Offence

[101] For ease of reference, the offence as described in the Notice is repeated:

On or about 4 May 2010, at or near Conception Harbour in the province of Newfoundland and Labrador, BAFFIN FISHERIES (2000) LTD., being the authorized representative of the vessel "Vair", 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.

[102] Paragraph 106(2)(a) of the Act and subsection 10(1) of the VCRs are integrally linked for the offence as described in the Notice. The elements to be proven are that:

(a) the Vessel is a Canadian vessel, as defined in the Act;

(b) the Applicant was at the material time the Authorized Representative of the Vessel;

(c) the Applicant 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;

(d) having failed to do so, the Vessel engaged on a voyage; and

(e) while on the voyage the Vessel did not hold an inspection certificate issued pursuant to subsection 10(2) of the VCRs.

[103] ‘Canadian vessel' is defined within the Act under section 2 as "a vessel registered or listed under Part 2 (Registration, Listing and Recording)".

[104] That the Vessel is a Canadian vessel and that the Applicant was at the material time the Authorized Representative of the Vessel were not disputed. I find these elements to have been proven by the admission into evidence of the Transcript of Registry for the Vessel (Exhibit M‑3), which demonstrates that the Vessel was registered and that the Authorized Representative was the Applicant.

[105] I find that the Vessel engaged on a voyage on May 4, 2010. Mr. Cabot's evidence confirms that the Vessel travelled from Conception Harbour to the Port of St. John's at some time between May 3, 2010, when Mr. Cabot was expecting a Transport Canada inspector to attend the Vessel in Conception Harbour, and May 4, 2010, the date he indicated the Vessel was in St. John's. This is supported by Mr. Snow's evidence which indicated that the Vessel entered the St. John's traffic zone (Exhibit M-2) on May 4, 2010, at 21:26 (local time) and secured to Pier 19 at the Port of St. John's at 23:45 (local time). The question of who was in control of the Vessel is irrelevant. The Vessel moved from one location to another, which constitutes a voyage.

[106] The primary issue in this matter is whether the Applicant 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, in this case an inspection certificate.

[107] The requirement for this Vessel to undergo an annual inspection derives from the LFVI Regulations. ‘Section 5 (Application)' of these regulations makes it clear that they apply to the Vessel as the evidence confirms that the Vessel is over 24.4 metres in length. Sections 30 through 40 of the LFVI Regulations provide for a number of periodic inspections of machinery and equipment, many of which indicate annual inspection requirements.

[108] The evidence clearly supports that the Applicant made efforts to ensure that the necessary inspection was completed. However, the obligation under paragraph 106(2)(a) of the Act is not to make the best effort to have the Vessel and its machinery and equipment inspected. Subsection 106(2) specifies that the Authorized Representative "shall ensure" that the Vessel and its machinery and equipment are inspected. This is an imperative obligation placed upon the Authorized Representative.

[109] As mentioned above, at paragraph [66] of this Determination, Mr. Keefe succinctly outlined at paragraph [31] of Northern Harvest Sea Farms that this may be a process involving several inspections.

[110] That the inspection process involves many components is readily evident on a cursory review of the LFVI Regulations which provide for the inspection of many different components at differing time intervals. There is no need to address the arguments in respect of whether Northern Harvest Sea Farms is distinguishable on its facts; the above rationale is not fact-dependant.

[111] Ultimately, the statutory obligation to ensure that the Vessel and its machinery and equipment are inspected cannot be met until the final inspection has been completed and the inspection certificate has been issued to the Vessel. It is this inspection certificate that confirms the inspection process has been carried out in accordance with the statutory requirements. Mr. Cabot confirmed during cross-examination that as of May 4, 2010, the inspection for the Vessel had not yet been completed. This is sufficient to dispose of this element.

[112] Since the inspection had not been completed nor had a renewed inspection certificate been issued, the final aspect of the elements would also seem to be disposed of, namely, that during the voyage the Vessel did not hold an inspection certificate issued pursuant to subsection 10(2) of the VCRs. However, the Applicant raised a novel argument in this respect, arguing that the usage of the word "valid" in the Notice is inconsistent with the provisions of the Act and the VCRs, which do not require the inspection certificate to be valid. Essentially, the Applicant argued that, by having an inspection certificate on board, albeit an expired one, it did not contravene subsection 10(1) of the VCRs.

[113] The Applicant is quite correct that section 10 of the VCRs makes no express reference to the current status of the inspection certificate. This is evident in the wording of the section:

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.

[114] However, the definition of a ‘Canadian maritime document' under section 2 is important:

"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.

[115] Paragraph 106(2)(a) falls within ‘Part 4 (Safety)' of the Act. Also included in Part 4 are subsection 120(1), and paragraphs 120(1)(d) and (e), which empower the Minister, through the Governor in Council, to make regulations with respect to obtaining inspection certificates certifying that the requirements of the regulations have been met:

120. (1) The Governor in Council may, on the recommendation of the Minister, make regulations respecting the safety of vessels or classes of vessels and of persons on board or loading or unloading a vessel, including regulations

[….]

(d) respecting the requirements that vessels, or classes of vessels, and their machinery and equipment must meet;

(e) requiring the obtaining of certificates certifying that any of the requirements referred to in paragraph (d) are met;

[116] In accordance with paragraph 120(1)(d) of the Act, the LFVI Regulations have been enacted to outline the detailed requirements that vessels and their machinery and equipment must meet. The VCRs are clearly regulations made pursuant to paragraph 120(1)(e) of the Act. Accordingly, an inspection certificate issued under the VCRs is a Canadian maritime document as it is a "certificate or other document that is issued by the Minister of Transport under Part…4 (Safety)…to verify that the person to whom or vessel to which it is issued has met requirements under…" Part 4 of the Act (see Act, section 2).

[117] For ease of referral, subsection 17(1) of the Act provides:

17. (1) Every Canadian maritime document is valid for the period specified by the Minister of Transport. The Minister may, on application made before a document expires and in the form and manner specified by the Minister, extend the period if the Minister is satisfied that it is not feasible to issue a new document before the document expires.

[118] Accordingly, the inspection certificate held by the Vessel remained valid only for the time period specified. On the face of the Vessel's inspection certificate (Exhibit M‑4), it states "[t]his certificate is issued under the authority of the Government of Canada and is valid until: 29‑06‑2009".

[119] Therefore, on its face the Vessel's inspection certificate was valid only until June 29, 2009. Mr. Cabot's evidence is that following an inspection on July 6, 2009, the Vessel's inspection certificate was renewed until December 6, 2009, when it was due to expire. Ms. Gillingham's evidence confirms that the final expiration date of the Vessel's inspection certificate was December 6, 2009. Once expired, it lost its validity and was nothing more than a piece of paper. Whether the provisions of subsection 10(1) of the VCRs use the term "valid" is irrelevant. By its nature as a Canadian maritime document, an expired inspection certificate is no longer valid as an inspection certificate. Accordingly, the Vessel's expired inspection certificate could not have met the requirements of subsection 10(1) of the VCRs.

[120] I note the Applicant's argument that where there is ambiguity in a statutory provision involving penal sanctions, the ambiguity should be resolved in favour of the accused yet I have found that there is no such ambiguity.

[121] I find that the remaining elements of the offence are proven. The Applicant did not ensure that the Vessel and its machinery and equipment were inspected for the purpose of obtaining its inspection certificate, which was the required Canadian maritime document under Part 4 of the Act. I also find that the Vessel engaged on a voyage without the required inspection certificate.

C. Defence of Due Diligence

[122] The Applicant has raised the defence of due diligence, which is expressly incorporated into the Act at paragraph 254(1):

254. (1) No person may be found guilty of an offence under this Act if the person establishes that they exercised due diligence to prevent its commission.

[123] For this defence to succeed the Applicant must demonstrate, on a balance of probabilities, that it took all reasonable care to avoid committing the offence. The Applicant's position in this respect is that it made many attempts to contact Transport Canada before the inspection certificate expired to schedule the necessary inspections. Ultimately, an inspector did attend the Vessel on two occasions but failed to return on the third occasion to follow up and complete the inspection, for reasons which were not presented in evidence. I have accepted the evidence of the Applicant's efforts to contact Transport Canada, reflected in the affidavits of Mr. Cabot, Ms. Whelan and Zachary Cabot.

[124] The Minister argued that the Applicant could have further extended the Vessel's inspection certificate to avoid its expiration. The evidence indicates that the inspection certificate had already been extended for a two-month period from April to June 2009, and a five-month period from July to December 2009, presumably pursuant to paragraphs 41(3)(a) and (b), and subsections 41(4) and (5) of the LFVI Regulations, though that is not clear from the evidence. The relevant provisions are the following:

41. (3) Notwithstanding the requirements for the periodic inspection of hull and machinery prescribed in these Regulations, an inspector may issue or extend an inspection certificate for a period not exceeding

(a) two months beyond the due date of periodic inspection; or

(b) five months beyond the due date of periodic inspection if authorized to do so by the Divisional Supervisor.

(4) Prior to issuing or extending an inspection certificate under this section, the inspector shall satisfy himself from such inspection of the hull, machinery and equipment as is possible afloat, and without opening up any machinery except boilers and boiler mountings, that the fishing vessel is in a seaworthy condition.

(5) An inspection certificate issued or extended up to the maximum period allowed under subsection (3) shall not be renewed or further extended without the permission of the Board.

[125] The words "not exceeding" in subsection 41(3) of the LFVI Regulations suggest that further extensions would not have been available to the Applicant unless it had secured the permission of the Board of Steamship Inspection pursuant to subsection 41(5) of the LFVI Regulations. It was Mr. Cabot's evidence that, because approval of the stability books had been outstanding for five years, the Vessel's inspection certificate could not be renewed for twelve-month periods. Rather, he attested, it could only be renewed for two or five-month periods at a time, necessitating frequent inspections. There was no evidence on behalf of the Minister in respect of this practice or as to how the reviewing of stability books affects the issuance of inspection certificates. Only Mr. Cabot provided evidence on this issue. As it is not clear from the evidence or the LFVI Regulations whether and how the Applicant could have obtained further extensions without completing the inspection process, I have not considered this as a factor in determining whether the Applicant was duly diligent.

[126] I agree with the Applicant that due diligence does not require superhuman efforts. However, in this case, the Applicant made the decision to sail without a valid inspection certificate. The Applicant's efforts to have the inspection process completed are commendable and consistent with its obligations as Authorized Representative for the Vessel. Nevertheless, these efforts do not discharge the obligation. The Applicant was fully aware that it had not completed the inspection process. Despite this, the Applicant made a conscious decision to undertake a voyage with the Vessel, knowing that the inspection certificate was expired. This cannot constitute due diligence to avoid committing the offence. Ultimately, the Applicant chose to commit the offence. The Applicant's efforts to complete the inspection process and the difficulties it encountered are relevant to the matter of sanctioning, but do not establish a due diligence defence.

D. Sanction

[127] My authority to review the penalty is provided under subsection 232.1(4) of the Act, which reads as follows:

232.1 (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.

[128] Where the Minister has issued a Notice pursuant to subsection 229(1) of the Act, the penalty is to be fixed by, or fall within the range established by the regulations made under Part 11 of the Act. Pursuant to paragraph 244(h) of the Act, the range of penalties that has been set out in item 47 of the Schedule to the AMPRs, for a violation regarding paragraph 106(2)(a) of the Act, is from $1 250 to $25 000.

[129] I disagree with the Minister that the minimum penalty for this offence is $6 000. Under the AMPRs, the minimum penalty is $1 250. The Minister has established guidelines and policies for sanction levels, reflected in the RIAS. These are just that, policies and guidelines to guide the Minister's representatives in determining an appropriate level of sanction. I am not bound by these policies and guidelines as they do not have the force of law. However, to the extent that they provide useful information on the appropriate level of sanction, I may consider them.

[130] The AMPRs do not clearly state which offences are considered low, medium or high gravity. However, I am satisfied that this offence would attract a high level of gravity. The inspection certificate in question confirms that the various inspections have been completed to confirm that a vessel is seaworthy and safe to go to sea. As well, the $1 250 to $25 000 range of penalties regarding paragraph 106(2)(a) of the Act makes this offence one which could attract the highest level of fine under the AMPRs. This further suggests that the violation is regarded as one of high gravity.

[131] The RIAS states on page 625 of the Canada Gazette, Part II, Volume 142, Number 8, without further elaboration that "[a]s a matter of general policy, vessels and corporations will be subject to higher penalties than individuals".

[132] I am not satisfied that sufficient rationale is provided in the RIAS for a corporation to automatically be assigned a higher level of fine. The assessment of the need for deterrence may lead to this conclusion but, in my view, a level of consideration is required before reaching the conclusion that a corporation merits a higher level of fine in any given case. In this respect, I agree with Mr. Keefe's comments at paragraph [42] of D & C Management (see above, paragraph [94]).

[133] There are both mitigating and aggravating circumstances to consider in the present case.

[134] The Minister indicated that this is a first offence for the Applicant. Applying the guidelines in the RIAS, this suggests that the range of possible penalties should be from $1 250 to $6 000. There was no evidence to suggest that the Applicant had experienced any previous difficulties with the inspection and certification processes.

[135] Though the final inspection was never completed, the Applicant made significant efforts to secure the initial inspections. I also accept the Applicant's evidence that Mr. Cabot, Ms. Whelan and Zachary Cabot made repeated attempts to arrange the final inspection. I acknowledge that Mr. Cabot was very frustrated by the difficulties he had experienced in trying to arrange the final inspection, though note that this frustration still does not justify using inappropriate language in his interaction with Ms. Gillingham.

[136] No admissible evidence was entered in respect of the reason that the final inspection was delayed by Transport Canada. While the rules allow significant flexibility in this regard, I am neither willing to accept controversial comments on the inner workings of Transport Canada Marine Safety, nor on any shortage of inspectors solely on the basis of hearsay statements and the Applicant's own views. Given the emphasis placed upon this issue by the Applicant, it could have called appropriate witnesses from Transport Canada to be examined. That said, I have accepted the evidence that the Applicant made repeated attempts to arrange the final inspection. I also accept that the Applicant made arrangements for an inspection to take place on April 27, 2010, which was not attended by the Transport Canada inspector. These aspects were not contested by the Minister nor addressed on cross-examination. While there is no evidence indicating the reason for Transport Canada's failure to respond to the other requests for inspection by the Applicant, I consider the lack of responsiveness on the part of Transport Canada to be a mitigating factor.

[137] Mr. Cabot attested that Transport Canada's approval of the stability book has been outstanding for five years. It was his evidence that because approval remained outstanding, the Vessel's inspection certificate could not be renewed for the twelve‑month periods. Rather, he attested that it could only be renewed for two or five-month periods at a time, necessitating frequent inspections. This is reinforced by the annotation in the Transport Canada Post‑Inspection Report (Exhibit A-2) which reads: "Certificate short termed pending T.C. [Transport Canada] stability approval." As noted above, the evidence did not clearly address the basis for the renewal and extension of inspection certificates where approval of the stability book is outstanding. However, Mr. Cabot's evidence in this regard was not challenged by the Minister. I see no reason for Mr. Cabot to misrepresent that situation and had he done so, I would have expected the Minister to have addressed it. It seems unreasonable that the stability book approval remained outstanding for five years, requiring the Applicant to undertake frequent inspections over such a long period. As noted, there was no admissible evidence as to the reason for the delay in approving the stability book for the Vessel but, in my view, given that certification requires multiple inspections of machinery and equipment, this must place an onerous burden on the Applicant.

[138] The Applicant did not engage on the voyage with the Vessel surreptitiously. The Applicant left a voicemail message for Mr. Kenny of Transport Canada advising him that if an inspector did not return to the Vessel to complete the inspection in Conception Harbour by Monday, May 3, 2010, the Vessel would be in the Port of St. John's on Tuesday, May 4, 2010, to enable inspectors to complete the inspection. While there is no evidence to confirm that this message was received, Mr. Earles did attend to the Vessel on May 4, 2010, for the purpose of inspecting it. In my view, this suggests that it is very likely that Transport Canada was aware of the Applicant's intention to move the Vessel. In any event, I accept that the Applicant left a message advising Transport Canada that it intended to move the Vessel to St. John's. It is somewhat incongruous that Transport Canada took advantage of this move to complete the inspection and then proceeded with an investigation the following day. While it is entirely the Applicant's obligation to comply with the Act, a response to the message left by the Applicant on April 30, 2010, might have avoided this issue entirely. Again, I consider the lack of responsiveness on the part of Transport Canada to be a mitigating factor.

[139] I consider the fact that the Applicant engaged on the voyage in full knowledge that the inspection certificate for the Vessel was expired, to be an aggravating factor. Mr. Cabot's affidavit indicates that the Applicant had a clear understanding of its obligations with respect to having the Vessel and its machinery and equipment inspected. The evidence indicates that it had in the past followed and complied with the process. For reasons which are not clear, the Applicant decided that it would move the Vessel to St. John's prior to completing the inspection process. Whatever the reason, the Applicant made a conscious decision to engage on a voyage with an expired inspection certificate. Regardless of the degree of frustration the Applicant was experiencing with the process, I consider this intentional contravention to be a significant aggravating factor.

[140] The Minister argued that the considerations in D & C Management are not applicable to the present case because the Applicant is not a one-person company. There was no evidence adduced as to the corporate nature of the Applicant or its financial state. We have no indication whether this is a one-ship company or a larger enterprise. It is clear from the evidence of Mr. Cabot, Ms. Whelan and Zachary Cabot that they are all employed by the Applicant. Accordingly, it seems that the Applicant employs at least three people and presumably a crew for the Vessel.

[141] I acknowledge the policy stated in the RIAS that, as a matter of general policy, vessels and corporations will be subject to higher penalties than individuals. In my view, this does not obviate the obligation placed upon the Minister to bring evidence to demonstrate why a corporate accused merits a higher penalty, particularly in the case of fishing enterprises which have a broad spectrum of size. Some distinction must be made between an individual who owns and operates a vessel and a corporation which operates a vessel, but the Tribunal cannot assume that the corporation has more assets and accordingly requires a higher penalty to create the necessary deterrent effect. Corporations are formed for a wide variety of reasons and I am not willing to make the assumption that the Applicant merits a higher penalty due to its corporate status without evidence to that effect. Accordingly, I do not consider the minimum penalty to be $6 000. I consider the range of penalties in this instance to be from $1 250 to $6 000.

[142] The intentional nature of this contravention militates away from the minimum level of penalty. Equally, the mitigating factors discussed above suggest that the maximum level in the first-offence range is also more than would be necessary to achieve the appropriate deterrent effect. In view of all of the factors, I consider a fine of $2 500 to be the appropriate level of penalty.

VI. DETERMINATION

[143] The violation in the Notice has been proven, but I reduce the penalty from $6 000 to $2 500.

October 19, 2011

David G. Henly

Member