Decisions

TATC File No. MP-0098-37
MoT File No. P20110107-505-00265

TRANSPORTATION APPEAL TRIBUNAL OF CANADA

BETWEEN:

Lawrence Duggan, Applicant

- and -

Minister of Transport, Respondent

LEGISLATION:
paragraph 106(2)(a) of the Canada Shipping Act, 2001
subsection 46(2) of the Canada Shipping Act, 2001


Review Determination
Brad M. Caldwell


Decision: October 3, 2013

Citation: Duggan v. Canada (Minister of Transport), 2013 TATCE 27 (Review)

Heard in: Nanaimo, British Columbia, on April 25, 2013

REVIEW DETERMINATION AND REASONS

Held: Count 1: The Minister has not proven, on the balance of probabilities, that the Applicant, Lawrence Duggan, violated subsection 46(2) of the Canada Shipping Act, 2001. As such, the monetary penalty of $6 000 is dismissed.

Count 2: The Minister has proven, on the balance of probabilities, that the Applicant, Lawrence Duggan, violated paragraph 106(2)(a) of the Canada Shipping Act, 2001. As such, the monetary penalty of $6 000 is upheld.

The total amount of $6 000 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 February 7, 2011, the Minister of Transport (Minister) issued a Notice of Violation (Notice) to the Applicant, Lawrence Duggan, for two alleged violations of the Canada Shipping Act, 2001, S.C. 2001,c. 26 (Act). The Notice reads as follows:

No. Violation Penalty
1 On or about October 27, 2010, at or near Port Hardy in the province of British Columbia, Lawrence P. Duggan, being the authorized representative of the vessel ‘MIKLEY', failed to ensure that the vessel is registered under Part 2 of the Canada Shipping Act, 2001, thereby contravening paragraph 46(2) of that Act. $6,000.00
2

On or about October 27, 2010, at or near Port Hardy in the province of British Columbia, Lawrence P. Duggan, being the authorized representative of the vessel ‘MIKLEY', failed to ensure that the vessel and its machinery and equipment were inspected for the purpose of obtaining all of the 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.

$6,000.00

[2] On March 4, 2011, Mr. Duggan's Request for Review of the Minister's decision was filed with the Transportation Appeal Tribunal of Canada (Tribunal).

II. STATUTES AND REGULATIONS

[3] The relevant definitions under section 2 of the Act, as well as section 9, subsection 10(1), subsections 46(1) and (2), section 105, paragraph 106(2)(a), and paragraphs 120(d) and (e) of the Act, provide as follows:

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) or that is exempted under the regulations from the registration requirement in subsection 46(1).

“pleasure craft” means a vessel that is used for pleasure and does not carry passengers, and includes a vessel of a prescribed class.

“qualified person” means

(a) a Canadian citizen or a permanent resident within the meaning of subsection 2(1) of the Immigration and Refugee Protection Act; or

(b) a corporation incorporated under the laws of Canada or a province.

 

“Safety Convention vessel” means a vessel in respect of which the International Convention for the Safety of Life at Sea, listed in Schedule 1, applies.

[…]

9. Except as otherwise provided in this Act, the Minister of Transport is responsible for the administration of this Act.

10. (1) The Minister of Transport or the Minister of Fisheries and Oceans may, with respect to that Minister's responsibilities under this Act,

(a) establish consultative bodies;

(b) issue bulletins, guidelines and standards; and

(c) enter into agreements or arrangements respecting the administration or enforcement of any provision of this Act or the regulations and authorize any person or organization with whom an agreement or arrangement is entered into to exercise the powers or perform the duties under this Act that are specified in the agreement or arrangement.

[…]

46. (1) Unless it is exempted under the regulations, a vessel must be registered under this Part if it

(a) is not a pleasure craft;

(b) is wholly owned by qualified persons; and

(c) is not registered, listed or otherwise recorded in a foreign state.

(2) Every owner of a vessel that is required by subsection (1) to be registered under this Part shall ensure that it is so registered.

[…]

105. This Part applies in respect of Canadian vessels, other than pleasure craft, everywhere and in respect of foreign vessels in Canadian waters.

[…]

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

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

[…]

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;

[4] Paragraphs 9(1)(a) and (b), paragraph 9(2)(a), and section 10 of the Vessel Certificates Regulations, SOR/2007‑31 (VCRs), read 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;

[…]

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

(a) pleasure craft; or

[…]

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.

[5] Regulation 3 of the International Convention for the Safety of Life at Sea (SOLAS Convention) provides as follows:

The present Regulations, unless expressly provided otherwise, do not apply to:

[…]

(ii) Cargo ships of less than 500 tons gross tonnage

[…]

(vi) Fishing vessels.

III. EVIDENCE

A. Minister

(1) Russell Arnott

[6] Russell Arnott was the Canadian Coast Guard (CCG) Officer in charge of, as well as the Watch Supervisor for, the Marine Communications and Traffic Services Centre in Comox, British Columbia (B.C.) (Comox Traffic) on October 27, 2010. He introduced a Marine Occurrence Report that was prepared by a radio officer at Comox Traffic on October 26, 2010 (Exhibit M-1). Amongst other things, this report stated as follows:

(1) The Mikley, a 45‑foot dive tender/packer fishing vessel with commercial fishing vessel (CFV) no. 91101 was at the Port Hardy, B.C. inner harbour and was taking on water in the lazarette and steering gear area;

(2) The Mikley had hit a rock earlier in the day and had managed to reach Port Hardy, B.C.;

(3) The CCG had provided some on-scene assistance, and with pumps working, the water ingress had been reduced to a trickle; and

(4) The owner of the vessel was “Larry Duggan”.

[7] The report of the incident was initiated by Comox Traffic at 2243 hours Pacific Daylight Time (PDT) on October 26, 2010.

[8] After the Marine Occurrence Report was prepared, it was sent out to a number of organizations, including Transport Canada.

(2) Nathan Barry Lingley

[9] Nathan Barry Lingley is a Royal Canadian Mounted Police (RCMP) Constable who was working at the Port Hardy, B.C. detachment during the morning hours of October 27, 2010. He testified that he was contacted that morning by Sultan Virani, the Manager of Transport Canada Marine Safety in Nanaimo, B.C., who requested that he contact the Captain of the Mikley, Mr. Duggan. Constable Lingley was asked to take a statement from the Captain and the crew members and also to request the registration and inspection records. Pursuant to that request, Constable Lingley attended the Seagate wharf at Port Hardy and observed large blue barrels being unloaded from the Mikley. There were two males aboard, one of whom identified himself as Mr. Duggan, the Captain. Constable Lingley requested a statement from the Captain and his crew member but was told they were too busy unloading sea cucumbers. Mr. Duggan advised him that they would attend the RCMP office in an hour to give Constable Lingley a statement and show him his ship's papers.

[10] Before leaving, Constable Lingley had a short conversation with Mr. Duggan who said that he did not know what the cause of the leak was, but suspected that it might have been from being hit hard by a delivery boat. Mr. Duggan stated that he would not be able to know for sure what the cause of the leak was until he had unloaded the boat. Constable Lingley did not observe any damage to the vessel.

[11] Constable Lingley advised that Mr. Duggan did not show up at the RCMP detachment. However, I note that he did not advise as to what his hours of availability were at the Port Hardy detachment.

[12] Additionally, a report of the incident prepared by Constable Lingley for Transport Canada was entered as Exhibit M‑2.

(3) Patrick Lwyn

[13] Patrick Lwyn is a Senior Marine Inspector for the Marine Safety section of Transport Canada. His duties include the inspection of fishing vessels. In October 2010, he was assigned by Mr. Virani to investigate the October 26, 2010 incident involving the Mikley.

[14] As part of his investigation, he did a search on what he described as “our registry systems”. He produced a one‑page document from this search titled “Vessel Registration Query System” (Exhibit M‑3). This document states as follows:

MIKLEY (O.N. 812893)

This vessel is suspended from registry in Canada. For further information contact the nearest vessel registry office.

Date of suspension: March 10, 2008

Date Modified: 2009-12-16

[15] Although the modified date on this document is “2009-12-16”, it was apparently printed from the database on “1/6/2011”. The witness stated that this means January 6, 2011.

[16] Under cross-examination by Mr. Duggan, Mr. Lwyn advised that he did not know the process by which a vessel could be de-registered. He said that only people in Ottawa could answer that question. When questioned by me, he could not advise as to whether there was any difference between a suspension and a de-registration. He said that only a Ship Registry Clerk or the Chief Registrar in Ottawa could answer that question. He said there was no information available to him regarding the nature of the purported suspension. He said that only the Chief Registrar in Ottawa could provide the reason behind the purported suspension described in Exhibit M‑3.

[17] Mr. Lwyn also produced a Transport Canada Transcript of Registry for the Mikley (Exhibit M‑5). This is a three page document that was dated May 16, 2011, and certified on the same date by a Registrar from Transport Canada. Based upon information contained in this transcript, Mr. Lwyn gave the following evidence regarding the Mikley:

(1) It is a “fishing – other” vessel;

(2) Its gross tonnage is 29.44 tons; and

(3) The authorized representative is Lawrence Patrick Duggan.

[18] Although not referred to by the witness, I note that this document also shows the following:

(1) On page one, the Mikley is referred to as an “Active Vessel”;

(2) On page one, the expiry date of the registration is shown as “2014-03-31”;

(3) On page one, there is a space after the words “Certificate Cancellation date” that is blank;

(4) On page two it shows the vessel is owned by Lawrence Patrick Duggan;

(5) On page three, there are spaces for notations regarding both a suspension and a closure of the registry, which are both blank;

[19] Mr. Lwyn also testified that he did a search on a Transport Canada database called the Ship Inspection Reporting System (SIRS). A printout from this search was entered as Exhibit M‑6. Based upon information contained in this print-out, Mr. Lwyn gave the following evidence regarding the Mikley:

(1) The last vessel Inspection Certificate was issued on June 10, 1994; and

(2) The expiry date of the last Inspection Certificate was May 3, 1998.

[20] This document, as well as a Synopsis of what led up to the issuance of the Notice (Exhibit M‑8) also showed that the Mikley had not been inspected since June 10, 1994.

[21] Mr. Lwyn also produced a Fisheries and Oceans Canada Vessel Report for the Mikley, last updated November 23, 2010 (Exhibit M‑7). Based upon this document, Mr. Lwyn testified that the Mikley had a valid category “D” licence as of November 23, 2010.

B. Applicant

(1) Lawrence Duggan

[22] Lawrence Duggan was raised in Steveston, B.C., and spent most of his life working as a commercial fish harvester. The Mikley was built in Steveston, B.C. The evidence is not entirely clear as to when it was purchased by Mr. Duggan. In examination‑in‑chief he said it was registered in 1991, built in 2001 and purchased by him in 2003. However, in cross-examination, he said it was built in 1990 and purchased by him in 1997. This evidence was consistent with a Certificate of Registry he produced, as well as an article from the Westcoast Fisherman magazine (Exhibit A‑1). He used the Mikley for fishing for both salmon and prawns until 1998 when he sold these licences to a government buy-back program. For a period of approximately seven years preceding the incident, the vessel had been moored at Sidney Harbour, B.C., where he was intending on turning it into a live-aboard for his retirement. Under cross-examination, he testified that he knew the vessel was due for an inspection in 1998. However, he did not think he needed an Inspection Certificate to use the vessel as a live-aboard. He conceded that “that's where I may have slipped up”.

[23] Mr. Duggan is 62 as of this year and still owns two commercial fishing boats, one of which is a commercial prawn boat. He also describes himself as a farmer. Although he used to dive commercially in the B.C. dive fisheries, his two other commercial boats are now operated independently by younger men. He testified that in 2010, the Department of Fisheries and Oceans made a change to the management plan for the dive fisheries that involved a change of fishing areas. In response to that change he brought the Mikley “out of mothballs” because the dive fisheries were in remote inlet locations where there was no accommodation. At the time of the incident, the Mikley was being used in Port Hardy Harbour as a floating bunkhouse for the men involved in the dive fishery to stay in. It was also moored next to a processing plant and was used to temporarily hold fishing products unloaded from the dive boats for delivery to the processing plant. Under cross‑examination with respect to the category “D” licence on the vessel, he testified that he consulted with the Department of Fisheries and Oceans regarding using the vessel as a live-aboard and was advised to obtain a “D” licence so that if any commercially‑caught product sat overnight on the deck of the boat it would be legal. Accordingly, he purchased a “D” licence. Under cross-examination, he also testified that although he did not specifically charge for the use of the Mikley, he made 10 per cent of the earnings for helping to process the sea cucumbers and for cooking food for the crew. The gross catch of 34 000 pounds was sold for $1.85 per pound. By my calculation, Mr. Duggan's share amounts to $6 290 dollars (34 000 x $1.85 x 10%).

[24] Mr. Duggan testified that on the night of October 26, 2010, two boats came in late in the evening and dropped their product on the deck of the Mikley. Sometime after that, he noticed that the Mikley was low in the stern and he discovered water in the lazarette, which is in the stern portion of the vessel. While pumping water out of the lazarette, they started talking with the crew of a CCG vessel that was moored across the dock from them. After pumping the lazarette dry with the assistance of the CCG, they could still hear some water running. The next morning they discovered that one of the persons staying on the boat had put a hose in a fresh water tank to fill it to get enough water to have a shower and had left the hose running.

[25] Mr. Duggan's testimony is not entirely clear, but my understanding is that it appears that the water filled the tank to the level of a ruptured waterline between the vessel's two water tanks. The fresh water then flowed out of a waterline in the ruptured hose, then filled the lazarette.

[26] Mr. Duggan testified that the following day when he discovered the source of the water leak, he explained the cause of the problem to the CCG personnel. He also attended the RCMP office with the Mikley's Certificate of Registry to visit Constable Lingley. However, Constable Lingley was not in the office the next day. He produced a copy of his original Certificate of Registry for the Mikley dated June 15, 1990. It had a stamp on the back showing a change of ownership to Mr. Duggan on February 27, 1997.

[27] Mr. Duggan also submitted testimony to demonstrate the good construction of the Mikley and entered a 2010 WorkSafeBC Inspection Report (Exhibit A‑2) showing that no orders were written for the boat arising from the inspection. He also testified about his various certifications, which are not relevant to the current alleged violations.

IV. ARGUMENTS

A. Minister

(1) Violation One – Failing to Ensure that the Vessel was Registered

[28] The Minister's Representative referred to section 46 of the Act and submitted that unless a vessel is a pleasure craft, it must be registered. He also advised that three to six months after a registration has expired, the Registry sends out notices. If the Registry does not receive a response back from the owner it will officially suspend the registration. Due to budget cuts, registry offices on the west coast have been shut down recently. Accordingly, all questions regarding the Registry process have to be obtained from the Registry in Ottawa.

(2) Violation Two – Failing to Ensure that the Vessel was Inspected

[29] The Minister's Representative referred to subsection 106(2) of the Act and the requirement that authorized representatives ensure that vessels are inspected for the purpose of obtaining Canadian maritime documents. He stated that in this case the vessel was engaged on a voyage, and that the authorized representative failed to ensure the vessel had a valid Canadian Inspection Certificate, as required by subsection 10(1) of the VCRs. In particular, he referred to paragraph 9(1)(b) of the VCRs, which makes subsection 10(1) of the Act applicable to non-Safety Convention vessels that are more than 15 gross tonnage.

[30] The Minister's Representative also took issue with the evidence of Mr. Duggan regarding the cause of the leakage.

[31] Furthermore, the Minister's Representative noted that if a boat is used only as a live-on boat and not for any commercial purpose, it is exempted under subsection 9(2) of the VCRs from the requirements of section 10 to obtain an Inspection Certificate.

[32] The Minister's Representative also made submissions regarding training that were not relevant to the alleged violations, so I have not repeated them.

B. Applicant

(1) Violation One – Failure to Ensure that the Vessel Was Registered

[33] Mr. Duggan cannot understand how the Mikley could have been de-registered or suspended. He appears to take issue with the Minister's failure to lead any evidence with respect to the cause of the purported suspension of the registration.

(2) Violation Two – Failure to Ensure that the Vessel Was Inspected

[34] With respect to the cause of the incident, Mr. Duggan complained that the CCG officials who saw the broken fresh water pipes the day after the incident did not include their observations regarding the pipes in any report that was presented to the Tribunal.

[35] He further submitted that since the Mikley was not used to actually catch fish, it should be treated as an exempt live-aboard vessel.

[36] He also made submissions regarding his safety record that I do not believe are relevant to the alleged violations, so they have not been repeated.

V. ANALYSIS

A. Violation One – Failure to Ensure that the Vessel was Registered

(1) Preliminary Matters

[37] Prior to determining whether or not the Minister has proven, on the balance of probabilities, the necessary elements of the alleged violation, it is necessary to first deal with a problem in the Notice. As previously noted, Violation One alleges that “Lawrence P. Duggan, being the authorized representative of the vessel ‘MIKLEY', failed to ensure that the vessel is registered . . . [emphasis added]”. However, a review of subsection 46(2) of the Act reveals that it is the owner and not the authorized representative who had a duty to ensure that the vessel was registered. Given the fact that the evidence established that Mr. Duggan was the owner of the vessel, I will overlook this defect.

[38] Another preliminary matter is the evidence regarding the cause of the water leakage into the lazarette of the Mikley. While not directly relevant to establishing whether the Minister has proven his case, it forms the factual backdrop to the alleged violations. In this regard, I accept Mr. Duggan's evidence that the leak was caused by the ruptured waterline between the two fresh water tanks, and a person on the boat leaving a fresh water hose running into one of the water tanks. I have given less weight to the evidence of Mr. Arnott regarding the cause because the Marine Occurrence Report (Exhibit M‑1), did not specify the person who made the original report, and his testimony on this issue was not corroborated by any other witnesses.

(2) Elements of Violation One

[39] Based upon section 46 of the Act, the elements the Minister must prove to establish this violation are as follows:

(1) On October 27, 2010, the Mikley was not registered;

(2) The Mikley is not a pleasure craft (paragraph 46(1)(a));

(3) The Mikley is wholly owned by a qualified person (paragraph 46(1)(b)); and

(4) The Mikley is not registered, listed or otherwise recorded in a foreign state

(paragraph 46(1)(c)).

[40] With respect to element (1) above, the evidence led by the Minister is inconclusive and conflicting. On the one hand, Exhibit M‑3, a print‑out from a Transport Canada Vessel Registration Query System database indicates that the database was last modified on December 16, 2009 (approximately 10 months prior to the date of offence) and showed that the registration of the Mikley had been suspended since March 10, 2008. As discussed, the Minister stated that the only evidence available regarding the reason for this purported suspension would have to come from a Registrar. However, the Minister did not call a Registrar as a witness. On the other hand, Exhibit M‑5, a certified copy of a Transcript of Registry signed by a Registrar and dated May 16, 2011, showed the Mikley as “active,” with a registry expiry date of March 31, 2014, and no notations on the part of the form dealing with a suspension or closure of the registration. The evidence is inconclusive because neither document shows the state of the registration on the date of the offence (October 27, 2010). The evidence is conflicting because Exhibit M-3 purports to show that the registration of the Mikley was suspended, and Exhibit M-5 indicates that there is no suspension and that the registration is valid until March 31, 2014. I give more weight to the evidence contained in Exhibit M‑5, as it is in the form of a Transcript of Registry issued by the Ship Registry in a form commonly used by the marine industry. Furthermore it is certified by a Registrar.

[41] The Minister's evidence is also inconclusive with respect to the term “suspension” as used in Exhibit M‑3. This exhibit states that for further information on the suspension the nearest registry office should be contacted. No witness from the Ship Registry was presented to explain the nature of the suspension, or advise as to whether a suspension was the same as not being registered.

[42] Based upon the inconclusive evidence presented by the Minister as discussed above, as well as the conflicting evidence regarding whether the registration was suspended on the date of the offence, I find that the Minister has failed to prove, on the balance of probabilities, that the Mikley was not registered.

[43] Given my findings on element (1), it is not necessary for me to make findings on elements (2) to (4).

[44] In summary, based upon the failure of the Minister to prove that the Mikley was not registered, I find that he has failed to prove Violation One. Accordingly, the assessed penalty of $6 000 is dismissed.

B. Violation Two – Failure to Ensure that the Vessel was Inspected for the Purpose of Obtaining a Valid Canadian Vessel Inspection Certificate

(1) Elements of Violation Two

[45] Based upon the wording of the alleged violation and the provisions of the Act and VCRs, the necessary elements of Violation Two are as follows:

(1) The Mikley is not a “pleasure vessel” as defined in section 2 of the Act, with respect to section 105;

(2) That Applicant was at all material times the “authorized representative” of the Mikley as defined in section 2, with respect to subsection 106(1);

(3) The Mikley is a “Canadian Vessel” as defined in section 2 of the Act,with respect to subsection 106(1);

(4) The Mikley is not a “Safety Convention Vessel” as defined in section 2 of the Act,with respect to subsection 9(1) of the VCRs;and

(5) The Mikley engaged on a voyage that took it to Port Hardy on or about October 27, 2010, and prior to that voyage the Applicant failed to ensure that the vessel and its machinery and equipment were inspected for the purpose of obtaining a valid Canadian Vessel Inspection Certificate (paragraphs 106(2)(a),120(1)(d) and (e) of the Act, and subsection 9(1) of the VCRs).

[46] With respect to element (1), section 105 of the Act provides that Part 4 of the Act does not apply to “pleasure craft”. The definition of “pleasure craft” in the Act includes a requirement that the vessel is used for pleasure. In this regard, the Minister led evidence that the Mikley was licensed with the Department Fisheries and Oceans with a category “D” licence. Mr. Duggan confirmed that he obtained this licence so that fish could be landed on the deck of the Mikley while assisting the dive harvesting vessels. Furthermore, based upon his testimony, Mr. Duggan received payment for his participation in the sea cucumber dive fishery. Based upon this evidence, I find that on October 27, 2010, the vessel was not being used for pleasure. Accordingly, at the time of the alleged violation, the vessel was not a pleasure craft.

[47] With respect to element (2), the certified Transcript of Registry (Exhibit M‑5) makes it clear that Mr. Duggan was the authorized representative of the Mikley as of the date of the Transcript of Registry on May 16, 2011. Although this is not conclusive evidence that he was the authorized representative on the actual date of the offence, Mr. Lwyn testified that Mr. Duggan was the authorized representative of the vessel in the presence of Mr. Duggan. During Mr. Lwyn's testimony that followed, he did not deny this assertion. Based upon the balance of probabilities test, I am prepared to accept this as evidence that Mr. Duggan was the authorized representative on the date of the offence.

[48] With respect to element (3), the definition of “Canadian Vessel” in section 2 of the Act provides that “‘Canadian Vessel' means a vessel that is registered or listed under Part 2…” For the reasons set out in my analysis of Violation One, I find that the Mikley was registered under Part 2 at the time of the offence; accordingly it is a “Canadian Vessel”. It is noteworthy, that if I had upheld Violation One under section 106 of the Act for failing to ensure the vessel was registered, then the Minister could not have sustained Violation Two because the vessel would not have been a “Canadian Vessel”.

[49] With respect to element (4), subsection 9(1) of the VCRs provides that the VCRs do not apply to Safety Convention vessels, which are defined in the Act as “a vessel in respect of which the International Convention of the Safety of Life at Sea, listed in Schedule 1, applies”, commonly referred as the SOLAS Convention. Regulation 3(a)(ii) of this Convention provides that it does not apply to “Cargo ships of less than 500 tons gross tonnage”; regulation (3)(a)(vi) provides that it does not apply to “Fishing vessels”. Since the Mikley had a category “D” fish packing licence from the Department of Fisheries and Oceans, it would fall under the category of either a fishing vessel or a cargo ship of less than 500 gross tons. Given the evidence available and the fact that it was not asserted by either party that this was a Safety Convention vessel, I find that the Mikley was not a Safety Convention vessel at the time of the offence.

[50] With respect to the evidence regarding element (5), Mr. Lwyn testified, based primarily on the SIRS print-out (Exhibit M‑6), that the expiry date of the last Inspection Certificate for the Mikley was May 3, 1998, and that the vessel had not been inspected since June 10, 1994. This testimony was not contested by Mr. Duggan when he testified; rather, he said that he did not believe he needed to obtain an Inspection Certificate because the vessel was being used as a live-aboard. Although there was no direct evidence regarding the vessel actually making a voyage, Mr. Duggan testified that the vessel had been moored at Sidney Harbour, B.C., for approximately seven years. He said that when the Department of Fisheries and Oceans changed the areas for the dive fisheries he was involved in, he took the vessel “out of mothballs” for the crew of the dive fishery to sleep on. Since the vessel was observed by Constable Lingley at Port Hardy, B.C., I am prepared to infer that the vessel engaged in a voyage to get to Port Hardy. Since Mr. Duggan also gave evidence about the need for the vessel because the dive fisheries are at remote inlets where no accommodation is available, I am also prepared to infer that Port Hardy was not the home port of the Mikley. That is, it was engaged on a voyage on October 27, 2010. Based upon all of this evidence, I find that the Minister has established element (5).

[51] In summary, the Minister has proven all of the necessary elements for Violation Two. Accordingly, pursuant to section 232.1 of the Act, I confirm the Minister's decision with respect to the alleged violation.

(2) Penalty for Violation Two

[52] The Minister's Representative stated that the alleged contraventions are not unique to Mr. Duggan. He stated they are happening fairly regularly with other fishing boats. He argued that it was necessary to get the message across to not only Mr. Duggan, but to others as well, that breaches of this nature would not be tolerated. The Minister's Representative did not explain how the Minister arrived at the $6 000 penalty assessment on Violation Two.

[53] Mr. Duggan seems to have difficulty differentiating between using a retired fishing boat for himself as a live-aboard at his home port, and using a retired fishing vessel as a floating crew lodging for the crew of at least two active fishing vessels that are involved in a mobile fishing operation. Mr. Duggan advised that he could not afford the assessed penalties. Although he is involved in the prawn fishery, he advises that it does not produce any significant profit over and above covering expenses. As previously discussed, based upon his testimony, he received an estimated $6 290 from his involvement in the sea cucumber dive fishery. He did not advise what expenses, if any, were incurred in this fishing operation.

[54] Both parties made representations regarding post‑offence conduct as well as manning certifications. I did not find any of these submissions helpful to the decision that I have to make with respect to the penalty assessed.

[55] In my view, an aggravating factor is the fact that this vessel was being used as floating crew lodging. Although the vessel was tied to a dock adjacent to a CCG vessel at the time of the flooding incident, it might well have occurred in an isolated inlet. If the crew from the sea cucumber operation had been sleeping at the time, there could have been multiple casualties. Although this particular incident might not have occurred without access to a fresh water hose, without a proper inspection there exists a significant possibility of other dangerous defects.

[56] The range of penalties available for a breach of paragraph 106(2)(a) of the Act, as set out in the Schedule to the Administrative Monetary Penalties Regulations, SOR/2008-97, is $1 250 to $25 000. In my view, the primary motivation for failing to ensure that a vessel is properly inspected is to save the cost involved in complying with any remedial measures ordered as a result of such an inspection. Accordingly, if fines for a lack of compliance are not substantial, some vessel owners may elect to pay any assessed fines in lieu of upgrading their vessels. Mr. Duggan is a businessman who owns three vessels including the Mikley, and was involved in a business venture at the time of the offence. Accordingly, his penalty must be substantial, so as not to be treated as simply a cost of doing business. I uphold the Minister's penalty of $6 000 as assessed in the Notice.

VI. DETERMINATION

[57] Count 1: The Minister has not proven, on the balance of probabilities, that the Applicant, Lawrence Duggan, violated subsection 46(2) of the Canada Shipping Act, 2001. As such, the monetary penalty of $6 000 is dismissed.

[58] Count 2: The Minister has proven, on the balance of probabilities, that the Applicant, Lawrence Duggan, violated paragraph 106(2)(a) of the Canada Shipping Act, 2001. As such, the monetary penalty of $6 000 is upheld.

October 3, 2013

Bradley M. Caldwell

Member