IN THE SUPREME COURT OF BRITISH COLUMBIA
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Citation: |
British Columbia v. The Administrator of the Ship-source Oil Pollution Fund, |
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2018 BCSC 793 |
Date: 20180514
Docket: S1710591
Registry: Vancouver
In
the Matter of the Business Corporations Act, S.B.C. 2002, c. 57
And
In the Matter of the Limited Restoration of 0369671 B.C. Ltd.
Between:
Her Majesty the Queen in Right of the Province of British Columbia
Petitioner
And
The Administrator
of the Ship-source Oil Pollution Fund and
David Milne
Respondents
Corrected Judgment: Counsel’s name was corrected on the title page of the Reasons for Judgment on May 16, 2018
Before: The Honourable Mr. Justice Funt
Reasons for Judgment
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Counsel for the Petitioner: |
E.J. Rowbotham |
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Counsel for the Respondent, The Administrator of the Ship-source Oil Pollution Fund: |
D.F. McEwen, Q.C. |
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Respondent, David Milne: |
No appearance at this hearing |
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Place and Dates of Hearing: |
Vancouver, B.C. April 30 and May 1, 2018 |
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Place and Date of Judgment: |
Vancouver, B.C. May 14, 2018 |
[1] In early March 2015, the Chilcotin Princess, a derelict 570 ton motor vessel, remained moored, often listing port, at an old cannery wharf in Namu, British Columbia, as she had for many years.
[2] From March 13 to March 16, 2015, the Canadian Coast Guard, in order to prevent or minimize oil pollution damage, took appropriate action to remove all accessible oil and other hydrocarbons from the Chilcotin Princess at a cost of approximately $138,000.
[3] In April 2015, the Province, the petitioner, had the Chilcotin Princess towed to Prince Rupert, British Columbia, where she was then dismantled.
[4] Before January 6, 2014, the Chilcotin Princess had been owned by Inter Coast Towing Ltd. (“Inter Coast”), a British Columbia corporation. On January 6, 2014, Inter Coast was dissolved for failure to file annual company reports and, as a result, the Chilcotin Princess vested in the Province.
[5] The Administrator of the Ship-source Oil Pollution Fund (the “Administrator”) says that, under the applicable legislation, she has a subrogated claim on behalf of the Ship-source Oil Pollution Fund (the “SOPF”) against the Province based on the reimbursement from the SOPF of the Coast Guard’s costs related to its action to prevent or minimize oil pollution from the Chilcotin Princess.
[6] In the Petition at bar, the Province seeks to have Inter Coast restored to the Register of Companies, with Inter Coast:
a) deemed to have continued in existence as if it had never been struck and dissolved; and
b) with prejudice to any rights the Administrator or any other person may have acquired against the Province in respect of the Chilcotin Princess.
[7] The Administrator does not oppose the restoration of Inter Coast but says that any such restoration must be done “without prejudice” to rights acquired against the Province during the dissolution hiatus.
[8] For the reasons that follow, the Court will order the restoration of Inter Coast but without the two qualifications the Province seeks.
[9] The Administrator, in her 2016–2017 Annual Report to the Minister of Transport, introduces the SOPF as follows:
The [SOPF], a specified purpose account in the accounts of Canada, is established under Part 7 of the Marine Liability Act to facilitate the indemnification of claims for ship-source pollution in Canadian waters while protecting the taxpayer. Canada’s compensation regime is based on the fundamental principle that the shipowner is primarily liable for oil pollution damage caused by the ship — that is, the polluter pays principle.
[10] Under the Marine Liability Act, S.C. 2001, c. 6 (the “MLA”), the Minister may impose levies on oil imported to or exported from Canada. At the end of the SOPF’s 2017 fiscal year, its accumulated surplus was $404,702,173 resulting from past levies, interest, and recoveries, after deducting pay-outs and expenses.
[11] The respondent, Mr. David Milne, was a director of Inter Coast. He was served with the Petition but did not appear.
[12] For hearing, the Province and the Administrator prepared a statement of facts for those facts upon which there was agreement. Further evidence was submitted in supporting affidavits, none of which appeared to be particularly controversial, serving to provide general background.
[13] The Statement of Agreed Facts (without attachments) reads:
1. The “Chilcotin Princess” (the “Vessel") was a 570 ton motor vessel built in 1945, at all material times its registered owner in the Ship’s Registry was Inter Coast Towing Ltd. (“Inter Coast”), a company incorporated in British Columbia.
2. Inter Coast was dissolved on January 6, 2014 for failure to file annual returns. Pursuant to s. 344(2) of the Business Corporation Act, S.B.C. 2002, c. 57, upon the dissolution of Inter Coast on January 6, 2014, the Vessel vested in Her Majesty the Queen in right of the Province of British Columbia (the “Province”).
3. The Vessel had been moored at a wharf in Namu, British Columbia for many years. The Vessel had not been maintained.
4. The wharf was located on foreshore leased to Namu Properties, Ltd. David Milne was the director of both Inter Coast and Namu Properties Ltd.
5. On or about June 27, 2014, an article was published in the Globe and Mail newspaper which reported that the Vessel appeared to be sinking at the wharf. A photograph showing the condition of the Vessel in July, 2014 is attached as Schedule A.
6. Employees at the Province’s Ministry of Forests, Lands, Natural Resource Operations and Rural Development (the “Ministry”) and Her Majesty the Queen in the right of Canada as represented by Canadian Coast Guard (“CCG”) were both concerned about the condition of the Vessel, and the possibility that she would sink and cause oil pollution. These concerns were confirmed by a Marine Survey report prepared on behalf of the CCG on February 19, 2015.
Discussions between the Ministry, David Milne, and Namu Properties Ltd.
7. During the summer and fall of 2014, the Ministry conducted three inspections at Namu, British Columbia:
(i) On July 4, 2014, a ‘fly over’ inspection was undertaken by the Ministry;
(ii) On July 18, 2014, a ground investigation was undertaken by the Ministry; and
(iii) On September 29 and 30, 2014, the Ministry and the provincial Ministry of Environment conducted a further inspection.
8. The various inspections showed the Vessel listing to one side and slowly eating away at the adjacent wharf. There were also several industrial barrels with unknown contents on the adjacent wharf. A photograph showing the barrels is attached as Schedule B.
9. The Province had several communications with Mr. Milne and Namu Properties Ltd. regarding the Province’s concerns about the Vessel and the barrels on the wharf.
10. On October 31, 2014, the Province directed Mr. Milne and Namu Properties Ltd. to deliver a written plan to the Ministry outlining Namu Property Ltd.’s plan to remove the Vessel and to bring the foreshore lease area back to a safe, clean and sanitary condition as required under the terms of the lease. The written plan was to be delivered to the Ministry within 60 days.
11. On January 13, 2015, Mr. Milne of Namu Properties Ltd. advised the Ministry that Namu Properties Ltd.’s preliminary plans included removing the Vessel within the next 60 days and that the barrels located on the wharf were to be removed at the same time as the Vessel.
12. On January 23, 2015, Mr. Milne of Namu Properties Ltd. advised the Ministry that a firm date for the removal of the Vessel would be finalized the following week.
13. On January 27, 2015 the Ministry met with Mr. Milne and advised Mr. Milne and Namu Properties Ltd. that if the barrels on the wharf were not moved by February 10, 2015, the Ministry may undertake the costs of barrel removal. The Province held $100,000.00 in security from Namu Properties Ltd. to ensure performance of the leasee’s leasehold obligations. The Ministry advised Mr. Milne that the Province may apply the security to those costs. Ministry employees do not recall advising any employee of CCG that the Province held $100,000.00 security under the foreshore lease from Namu Properties Ltd.
14. On February 17, 2015 the Ministry asked Mr. Milne for an update on the status of removing the barrels from the wharf.
15. On February 24, 2015 Mr. Milne advised the Province that the Vessel had been pumped the previous week and that the mooring lines had been checked. The barrels would be pumped into new containers at an unspecified date.
Communications between the CCG and David Milne
16. By September, 2014 the CCG had corresponded with David Milne and Inter Coast. CCG informed Mr. Milne that the Vessel was considered a threat to pollute and that the Vessel had to be removed from the marine environment in order to mitigate the threat to pollute or cause pollution. The CCG requested that a plan to remove the Vessel be submitted to the CCG by the end of October, 2014.
17. No such plan was submitted and the CCG again asked that a plan for the removal of the Vessel be submitted in January, 2015.
18. On January 27, 2015 the CCG wrote to Mr. Milne and Inter Coast requesting information on the measures Mr. Milne and Inter Coast intended to take to remove the Vessel. A response was requested by January 28, 2015 after which the Minister of Fisheries and Oceans advised that he would take the steps he or she deems fit, at the owner’s expense.
19. On February 19, 2015, a marine survey commissioned by the CCG recommended that the Vessel be disassembled and scrapped as soon as possible and that all oils and contaminants be dealt with according to the applicable regulations.
20. As of February 24, 2015 the Vessel remained moored at the wharf. The barrels with unknown contents remained on the wharf.
Ministry and CCG Action
21. On March 11 to 13, 2015 the Ministry and its consultant, Tervita Corporation, went to Namu, British Columbia:
(i) to assess and inventory potential contaminants in the barrels and containers on the wharf that could pose a risk to the foreshore environment; and
(ii) to move the barrels and containers from the wharf to the upland property.
22. Between March 13 to March 16, 2015, the CCG employed vessels and its employees to remove all the accessible hydrocarbons from the Vessel at a total cost to the CCG of $137,680.88. A photograph showing the condition of the Vessel in March 2015 is attached to this Statement of Agreed Facts as Schedule “C”.
23. Ministry employees were in contact with the employees of CCG prior to any work being done on the Vessel. Ministry employees were not aware that Inter Coast had been dissolved until January, 2015.
24. When CCG was planning to remove the hydrocarbons, the CCG communicated with Ministry employee Scott Allen. At that time Scott Allen did not inform employees of CCG that Inter Coast had been dissolved or that, pursuant to section 344(2) of the Business Corporation Act, the Vessel vested in the Province. No other Ministry employee involved in this matter recalls advising employees of the CCG that Inter Coast had been dissolved.
25. When employees of CCG were removing the hydrocarbons from the Vessel they did not know that Inter Coast had been dissolved and that the Vessel had vested in the Province.
Decommissioning the Vessel
26. The CCG removed hydrocarbons and bilge water containing hydrocarbons from the Vessel, the CCG did not move the Vessel or take steps to disassemble and scrap the Vessel.
27. The Ministry was concerned that if the Vessel remained moored at the wharf, the Vessel would damage what remained of the wharf, thus increasing the risk that the building would collapse into the foreshore. The Ministry was also concerned that the Vessel would take on water and sink.
28. As a result, in April, 2015 the Ministry made arrangements for the Vessel to be towed to Shearwater, B.C. and then to Prince Rupert B.C, where hazardous materials (asbestos) was removed and the Vessel dismantled. The Vessel was dismantled between July and November, 2015.
29. Employees of the CCG first learned that Inter Coast had been dissolved and that the Vessel had vested in the Province upon Inter Coast’s dissolution in 2014, after the Vessel had been towed to Prince Rupert, B.C.
30. The cost of towing and dismantling the Vessel was $150,513.46. This amount does not include the cost of moving the barrels from the dock to the upland. The Province applied the $100,000.00 in security it held under the foreshore leases to partially offset the towing and dismantling costs.
31. CCG presented a claim to the Administrator of the Ship-source Oil Pollution Fund (the “Administrator”) pursuant to ss.101 and 103 of the Marine Liability Act, S.C. 2001, c.6 (“MLA”) for $137,680.88, plus interest. The CCG did not request re-imbursement from the Province.
32. The Administrator paid the claim of CCG, and pursuant to s. 106(3)(b) of the MLA, is subrogated to the rights of CCG.
33. The Administrator presented a claim to the Province for the costs incurred in removing the hydrocarbons from the Vessel, which claim was denied by the Province.
34. The Administrator commenced an action against the Province in the Federal Court on March 29, 2017.
35. On May 4, 2017 the Province published notice in the British Columbia Gazette that the Province would be applying to the Registrar of Companies to restore inter Coast as 0369671 B.C. Ltd.
36. On May 18, 2017 the Province filed a statement of defence in the Federal Court Action.
37. On September 19, 2017 a published notice of the application to restore Inter Coast was sent by regular mail and courier to the registered and records office of Inter Coast and to the director and officer of Inter Coast, David Milne, at his home address.
38. On December 12, the Province wrote to the Registrar of Companies seeking the Registrar’s consent to the retroactive restoration of Inter Coast as 0369671 B.C. Ltd. with prejudice to any rights the Administrator or Her Majesty the Queen of Canada or any other person may have acquired against the Province. The Registrar was advised that the Administrator did not consent to the retroactive restoration of Inter Coast with prejudice to any rights the Administrator may have acquired against the Province.
39. On December 19, 2017, Carol Prest, Registrar of Companies, consented to the proposed restoration of Inter Coast. The Registrar stated: “I hereby consent to the proposed restoration. I presume, unless this court orders otherwise, that the restoration will be made without prejudice to the rights acquired by persons before the restorations".
40. On January 4, 2018 David Milne was personally served with a copy of the Petition and Affidavit # 2 of Scott Allen, Affidavit #2 of Cameron Bezanson; and Affidavit #2 of Duncan Williams.
[14] The key statutory provisions are found in the Business Corporations Act, S.B.C. 2002, c. 57 (the “BCA”) and the MLA. For our purposes, the BCA deals with the dissolution and the restoration of a company incorporated under the laws of British Columbia. The MLA provides liability and compensation provisions related to ship-source oil pollution (Part 6) and the statutory framework for the SOPF (Part 7).
[15] The BCA provides:
344 (1) Subject to sections 346 and 347, when a company is dissolved under this Part or under section 422 or 423, the company ceases to exist for any purpose.
(2) If, when a company is dissolved, the company has an asset that has not yet been distributed, the asset vests in the government unless
(a) the asset is one in which the company is a joint tenant, in which case the asset vests in the other joint tenant on dissolution, or
(b) the asset is land located in British Columbia, in which case the asset is, subject to paragraph (a) of this subsection, deemed to escheat to the government under section 4 of the Escheat Act, [R.S.B.C. 1996, c. 120].
…
360 (1) A person may apply to the court to restore a company.
…
(5) Subject to subsection (8), on an application under subsection (1), the court may, if it is satisfied that it is appropriate to restore the company, make an order, on the terms and conditions, if any, the court considers appropriate, that the company be restored.
(6) Without limiting subsection (5), in an order made under that subsection, the court may give directions and make provisions it considers appropriate for placing the company and every other person in the same position, as nearly as may be, as if the company had not been dissolved.
(7) Subject to section 368, unless the court orders otherwise, an order under subsection (5) of this section is without prejudice to the rights acquired by persons before the restoration.
(8) An order under subsection (5) must reflect any terms and conditions referred to in subsection (4) (b). [The registrar’s terms and conditions, if any.]
[Emphasis added.]
[16] The MLA provisions read:
3 This Act is binding on Her Majesty in right of Canada or a province.
…
75 The following definitions apply in this Division [Part 6, Division 2].
…
owner means the person who has for the time being, either by law or by contract, the rights of the owner of the ship with respect to its possession and use.
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77 (1) The owner of a ship is liable
…
(b) for the costs and expenses incurred by the Minister of Fisheries and Oceans, a response organization within the meaning of section 165 of the Canada Shipping Act, [S.C. 2001, c. 26] or any other person in Canada in respect of measures taken to prevent, repair, remedy or minimize oil pollution damage from the ship, including measures taken in anticipation of a discharge of oil from it, to the extent that the measures taken and the costs and expenses are reasonable, and for any loss or damage caused by those measures; ...
…
(3) The owner’s liability under subsections (1) and (2) does not depend on proof of fault or negligence, but the owner is not liable under those subsections if they establish that the occurrence
(a) resulted from an act of war, hostilities, civil war or insurrection or from a natural phenomenon of an exceptional, inevitable and irresistible character;
(b) was wholly caused by an act or omission of a third party with intent to cause damage; or
(c) was wholly caused by the negligence or other wrongful act of any government or other authority that is responsible for the maintenance of lights or other navigational aids, in the exercise of that function.
…
91 (1) The following definitions apply in this Part [Part 7].
owner
(a) in relation to a ship subject to the Civil Liability Convention, has the same meaning as in Article I of that Convention;
(b) in relation to a ship subject to the Bunkers Convention, has the same meaning as the definition Shipowner in Article 1 of that Convention; and
(c) in relation to any other ship, means the person who has for the time being, either by law or by contract, the rights of the owner of the ship with respect to its possession and use.
…
103 (1) In addition to any right against the Ship-source Oil Pollution Fund under section 101, a person who has suffered loss or damage or incurred costs or expenses referred to in section 51, 71 or 77, Article III of the Civil Liability Convention or Article 3 of the Bunkers Convention in respect of actual or anticipated oil pollution damage may file a claim with the Administrator for the loss, damage, costs or expenses.
…
106 (3) If a claimant accepts the offer of compensation from the Administrator,
(a) the Administrator shall without delay direct payment to be made to the claimant of the amount of the offer out of the Ship-source Oil Pollution Fund;
(b) the claimant is then precluded from pursuing any rights that they may have had against any person in respect of matters referred to in sections 51, 71 and 77, Article III of the Civil Liability Convention and Article 3 of the Bunkers Convention in relation to the occurrence to which the offer of compensation relates;
(c) the Administrator is, to the extent of the payment to the claimant, subrogated to any rights of the claimant referred to in paragraph (b); and
(d) the Administrator shall take all reasonable measures to recover the amount of the payment from the owner of the ship, the International Fund, the Supplementary Fund or any other person liable and, for that purpose, the Administrator may commence an action in the Administrator’s or the claimant’s name, including a claim against the fund of the owner of a ship established under the Civil Liability Convention and may enforce any security provided to or enforceable by the claimant.
[Emphasis added.]
[17] As noted, the parties agree that Inter Coast may be restored. The parties’ dispute is whether the restoration should be with prejudice to any rights that the Administrator may have acquired against the Province in respect of the Chilcotin Princess after the dissolution of Inter Coast.
[18] Subsection 360(7) of the BCA generally provides that a restoration “is without prejudice to the rights acquired by persons before the restoration” unless the court orders otherwise. Accordingly, in the matter at bar, the onus is on the Province to establish that the restoration should be with prejudice to the rights of the Administrator arising after the dissolution of Inter Coast.
[19] Prior to Inter Coast’s dissolution, it owned the Chilcotin Princess. Upon its dissolution, Inter Coast ceased “to exist for any purpose” (other than for two types of exception which do not apply for the matter at bar) and the Chilcotin Princess “vest[ed] in the government [the Province]”: BCA, ss. 344(1) and (2); definition of “government”, Interpretation Act, R.S.B.C. 1996, c. 238, s. 29.
[20] For the purposes of liability and compensation and the SOPF, the Province became the “owner” of the Chilcotin Princess on Inter Coast’s dissolution: definition of “owner”, MLA, ss. 75, 91(1). For the matter at bar, for both purposes, the definition of “owner” or “propriétaire” reads:
means the person who has for the time being, either by law or by contract, the rights of the owner of the ship with respect to its possession and use.
s’entend de la personne qui a, au moment considéré, en vertu de la loi ou d’un contrat, les droits du propriétaire du navire en ce qui a trait à la possession et à l’usage de celui-ci.
[21] The use of the language “for the time being” or “au moment considéré” in the definition of owner shows that Parliament intended that even holding rights temporarily with respect to the possession and use of a ship would make the holder of such rights the “owner”.
[22] Useful guidance as to the meaning of the phrase “for the time being” may be found in The Queen v. The Sailing Ship “Troop” Company (1899), 29 S.C.R. 662. In that case, a seaman on board the Troop sustained injuries in the service of the ship. He was consequently discharged and left behind in Hong Kong in 1891. The Troop was later purchased by the defendant in 1892. The Crown subsequently brought an action against the defendant to recover hospital fees and board incurred in Hong Kong, as well as the expenses of returning the seaman to London, England.
[23] The relevant portions of the Merchants Shipping Act, 1854, read as follows:
213. If any seaman ... belonging to any British ship is discharged or left behind at any place out of the United Kingdom without full compliance on the part of the master with all the provisions in that behalf in this Act contained, and becomes distressed and is relieved under the provisions of this Act ... the wages (if any) due to such seaman ... and all expenses incurred for his subsistence, necessary clothing, conveyance home, burial, etc., shall be a charge upon the ship whether British or foreign, to which he so belonged as aforesaid, and the Board of Trade may in the name of Her Majesty (besides suing for any penalties which may have been incurred), sue for and recover the said wages and expenses with costs either from the master of such ship as aforesaid, or from the person who is the owner thereof for the time being …
…
229. If any such expenses in respect of the illness, injury or hurt of any seaman or apprentice as are to be borne by the owner are paid by any consular officer or other person on behalf of Her Majesty ... such expenses shall be repaid to such officer or other person by the master of the ship, and if not so repaid the amount thereof with costs shall be a charge upon the ship and be recoverable from the master or owner of the ship for the time being as a debt due to Her Majesty …
[Emphasis added.]
[24] In addressing the defendant’s argument that the defendant was not responsible for the claim, Justice King, writing for the Court, stated (at 672):
… it was also contended that persons who became owners of the vessel after the transaction were not “owners for the time being” within the meaning of the Act. As to this last point the New Brunswick Supreme Court held that these words mean the owners at the time of action brought. This seems clearly so. The words import a fluctuating body of persons. They are not the determinate owners who made default but the owners for the time being, the words "for the time being" denoting not a time fixed by the transaction in question but one that is variable according to the happening of another event. Then, inasmuch as the debt is made a charge upon the vessel following and binding her even on change of ownership, and even when she has ceased to be a British and becomes a foreign ship, the evident intention is to make the personal liability co-extensive with this.
[Emphasis added.]
[25] As agreed by the parties, upon Inter Coast’s dissolution on January 6, 2014, the Chilcotin Princess vested in the Province. From March 13 to 16, 2015, the Coast Guard removed the accessible hydrocarbons from the Chilcotin Princess at a total cost of $137,680.88.
[26] The Coast Guard presented its claim for its costs to the Administrator. The Coast Guard, a Special Operating Agency, operates under the Department of Fisheries and Oceans Act, R.S.C. 1985, c. F-15. The Minister responsible for the Coast Guard is the Minister of Fisheries and Oceans.
[27] The Coast Guard’s claim, or more properly stated, the Minister of Fisheries and Oceans’ claim was founded on “measures taken to prevent, repair, remedy or minimize oil pollution damage” from the Chilcotin Princess: MLA, s. 77(1)(b).
[28] As agreed, the Administrator paid the Coast Guard’s claim and is subrogated to the rights of the Coast Guard: MLA, s. 106(3)(c).
[29] In sum, the Administrator has a subrogated claim against the Province which arose after Inter Coast’s dissolution.
[30] On March 29, 2017, the Administrator commenced an action against the Province in the Federal Court.
[31] On May 4, 2017, the Province published a notice in the British Columbia Gazette that it would be applying to restore Inter Coast.
[32] On May 18, 2017, the Province filed its Statement of Defence in the Federal Court action. In the Federal Court action, the Province pleads, among other matters:
21. Section 360 of the [BCA] authorizes the BC Supreme Court to make an order restoring a company. Such an order may provide for retroactive restoration and be with prejudice to the rights a person may have acquired before the restoration. Upon retroactive restoration, the restored company will have been the owner of the Vessel at all material times.
[33] If Inter Coast is restored with prejudice, as the Province seeks, the Administrator’s subrogated claim as against the Province will be defeated.
[34] In the recent decision of Foster v. Tundra Turbos Inc., 2018 BCSC 563, Justice Warren considers in detail company restorations under s. 360 of the BCA. The particularly relevant portions read:
[49] Applications to the court for restoration are therefore discretionary. The court “may” restore a company if it is satisfied that it is “appropriate” (s. 360(5)). Court orders for restoration are also flexible; the court “may” make the order on any terms and conditions it considers “appropriate” and, in accordance with s. 360(6), “may” make provisions it considers “appropriate” for placing the company and every other person in the same position, as nearly as may be, as if the company had not been dissolved. As already noted, s. 360(6) gives the court the discretion to order the retroactive reconstitution of directorships that were in place at the time of the dissolution of the company in question.
…
[62] It has been held that the purpose of s. 360(7), and previous iterations of that section, is to preserve legitimate claims of third parties that have arisen during the period when the company was struck from the register: Montreal Trust Co. v. Boy Scouts of Canada (Edmonton Region) Foundation (1976), 88 D.L.R. (3d) 99 (B.C.S.C.) (and the cases discussed therein); Doig v. Laurand Holdings Ltd., 2001 BCSC 780 at para. 37. Legitimate claims include rights “which third parties have acquired in dealing with the company during the period between the dissolution and restoration”: Montreal Trust at para. 20.
[Emphasis added.]
[35] In the matter at bar, the Administrator has a legitimate claim arising from the application of the MLA after Inter Coast was dissolved for the Coast Guard’s incurred costs and expenses. A with prejudice restoration would represent a tactical, if not significant, advantage for the Province. The Administrator’s claim against the Province would be defeated.
[36] The Province submits that “the Administrator’s position does not take into consideration why s. 344(2) of the [BCA] vests the assets of a dissolved corporation in the Province”. The Province refers to the common law principle of bona vacantia and states (in part):
99. The Province respectfully submits that the common-law of bona vacantia has not been abolished in British Columbia but rather, has been incorporated into the [BCA] and the Escheat Act. The Province further submits that it was under no obligation, either at common law or under the [BCA] statute, to expend provincial resources on assets which vest in the Province a result of the dissolution of a company.
[37] With respect, the language of s. 344(2) of the BCA is clear. Upon the dissolution of a corporation, a yet-to-be distributed asset vests in the Province. Vesting occurs under the statutory provision, not the common law.
[38] In oral argument, Mr. D.F. McEwen, Q.C., counsel for the Administrator, noted that if the principle of bona vacantia were to apply and assets were to vest without attached liabilities, such would not help the Province. In the matter at bar, the Coast Guard’s expenditures, the basis of the Administrator’s subrogated claim, were made after the Province became the “owner” of the Chilcotin Princess.
[39] In March 2015, when the Coast Guard took appropriate measures to “prevent, repair, remedy or minimize oil pollution damage” from the Chilcotin Princess, the Province, not Inter Coast, was the owner for the purposes of liability and compensation and the SOPF. Accordingly, the Province became liable for the Coast Guard’s incurred costs and expenses: MLA, s. 77(1)(b). The Court cannot ignore the clear wording of the MLA to which the Province is bound: MLA, s. 3.
[40] An exception from liability is not made for inchoate inherent liabilities. Similarly, an exception is not made for a person who may unwillingly or unknowingly become an “owner”. Specific exceptions are found in s. 77(3) of the MLA.
[41] With the clear wording of the relevant provisions, ordinary meaning should play a dominant role in the interpretation of the provisions. Chief Justice McLachlin and Justice Major, writing for the Court in Canada Trustco Mortgage Co. v. Canada, 2005 SCC 54, stated:
[10] It has been long established as a matter of statutory interpretation that “the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament”: see 65302 British Columbia Ltd. v. Canada, [1999] 3 S.C.R. 804, at para. 50. The interpretation of a statutory provision must be made according to a textual, contextual and purposive analysis to find a meaning that is harmonious with the Act as a whole. When the words of a provision are precise and unequivocal, the ordinary meaning of the words play a dominant role in the interpretive process. On the other hand, where the words can support more than one reasonable meaning, the ordinary meaning of the words plays a lesser role. The relative effects of ordinary meaning, context and purpose on the interpretive process may vary, but in all cases the court must seek to read the provisions of an Act as a harmonious whole.
[42] The Province also argues that the MLA is based on a “polluter pays” principle. The Province says that Inter Coast was responsible for leaving the oil and hydrocarbons on the Chilcotin Princess. While a catchphrase is often helpful, it cannot override clear statutory language. The MLA imposes liability on an “owner” without proof of fault or negligence: MLA, ss. 75 and 77(3). Liability may arise even though the person holds the rights of the owner of the ship with respect to its possession and use just “for the time being” or “au moment considéré”: definition of “owner”, MLA, s. 75.
[43] As reflected in the MLA, Parliament’s purpose is to impose liability where a person has the rights of possession and use of a ship. In other words, any person in a position of an “owner” is encouraged to take measures to avoid oil pollution damage altogether or to take measures to prevent, repair, remedy, or minimize oil pollution damage from the ship.
[44] The Province further argues that an “owner” is not liable if the occurrence was wholly caused by an act or omission of a third party with intent to cause damage: MLA, s. 77(3)(b). The Province submits that Inter Coast’s failure to file annual reports was intentional. The Province further submits that the natural consequence of leaving hydrocarbons on a derelict vessel is that they will create pollution as the vessel deteriorates further.
[45] With respect to the foregoing argument, counsel for the Administrator states:
23. ... the Province apparently accepts that it is the owner as Inter Coast cannot be both the “owner” and a “third party” for the purposes of s. 77(3)(b) of the MLA. Firstly, this is an issue for the Federal Court to determine, not this Court. Secondly, the section requires the owner to prove that the third party “intended to cause damage.” This sub-section applies to situations where a third party scuttles the vessel or takes similar action to release hydrocarbons.
I agree with the Administrator.
[46] As noted, under s. 360(7) of the BCA, unless the court orders otherwise, a restoration order is made without prejudice to the rights acquired by persons before the restoration. The Administrator acquired a claim against the Province after the dissolution of Inter Coast. The claim is a legitimate claim based on the clear wording of the MLA. The Court will not exercise its discretion to restore Inter Coast with prejudice.
[47] The Court orders that the Province may restore Inter Coast but without prejudice to the rights acquired by persons before the restoration.
[48] The Administrator shall have her costs at Scale B.
“Funt J.”