CA019851
                                               Vancouver Registry


              Court of Appeal for British Columbia





ORAL REASONS FOR JUDGMENT:


Before:

The Honourable Mr. Justice Macfarlane                May 30, 1996
The Honourable Madam Justice Rowles
The Honourable Mr. Justice Donald                 Vancouver, B.C.




BETWEEN:

                 MEEKER LOG AND TIMBER LTD. and
                MEEKER CEDAR PRODUCTS (1967) LTD.

                                                       PLAINTIFFS
                                                     (APPELLANTS)

AND:

        THE OWNERS AND ALL OTHERS INTERESTED IN THE SHIP
             "SEA IMP VIII", CATHERWOOD TOWING LTD.
                        and ROBERT PETERS

                                                       DEFENDANTS
                                                    (RESPONDENTS)



D.F. McEwen and 
C.J. Giaschi                          appearing for the Appellant

S.H. Lipetz and 
R. Margolis                          appearing for the Respondent


1MACFARLANE, J.A.:         This is an appeal and cross-appeal from
the decision of Mr. Justice Lowry pronounced December 20, 1994,
holding the defendant tugboat, its owners, and its Master liable
for damages resulting from a Maritime accident.  

2             The plaintiffs appeal the decision that Catherwood Towing
Ltd. (Catherwood) is entitled to limit its liability under Part 9
of the Canada Shipping Act R.S.C. 1985 c.S-9.  The plaintiffs also
appeal the decision that simple interest rather than compound
interest be awarded.  The plaintiffs do not appeal the findings
limiting the Master's liability.  The defendant Catherwood cross-
appeals the finding of liability.

3             The trial decision is reported at (1994) 1 B.C.L.R. (3d)
320.  The facts are stated accurately in the judgment below and
there is no need to repeat them.  It is conceded that the
principles of law to be applied in this case were correctly stated
by the trial judge.  It is their application to the facts which is
at issue. I am not persuaded that the trial judge erred in
principle or in finding of facts.  In my view the reasons contain
a detailed and proper analysis of the legal and factual issues and
I adopt them as correct.  The question whether to order compound
interest is a discretionary matter and I find no basis for
interfering with the trial judge's discretion on that question.

4             I would dismiss the appeal.

     5                           The question raised by the cross-appeal concerns the
interpretation of a clause in the contract made by the parties
under which the tug owner claims to be exempted from liability. 
The trial judge held against the tug owner on this basis:

     A clause relied upon to obtain an
exemption from liability that is not clear and
unambiguous is no exemption at all.  Where the
parts of what purports to be an exempting
clause are so inconsistent as to render
unclear the actual exemption agreed, no part
can be relied upon; as a whole the clause is
invalid: Nelson Line (Liverpool), Limited. v.
James Nelson & Sons, Limited., [1908] A.C.
(H.L.).  Here it cannot be said what exemption
for its liability the parties agreed would be
available to the tug owner.  It is a question
of whether the loss was beyond its control
(part one) or whether it exercised due
diligence (part two)?  Is it free of liability
for any loss, regardless (part three), or is
its exemption confined to the traditional
causes of loss stipulated in the schedule to
the Act (part four)?  There is no telling what
was agreed.  I do not consider the clause to
constitute an exemption on which the tug owner
can rely.

6             On appeal the tug owner submits that the trial judge
erred in finding that the individual parts of the conditions were
so inconsistent as to render the whole of the conditions unclear
and invalid.  The tug owner submits that the conditions are a
coherent whole and if there is any ambiguity that the conditions
can be applied after interpreting them contra proferentum to
provide an exemption from liability.  I agree with the conclusion
of the trial judge that "there is no telling what was agreed" and
I adopt his analysis of the clause in question.

     7                           As was said in the Nelson case, the vessel owner in this
case has "put together, or jumbled together a number of phrases of
which no legal interpretation can be given".  I agree that each of
the parts of the contract must be read so as to give effect to the
whole, if that is possible.  See Elderslie Steamship Company Limited v.
Borthwick [1905] A.C. 93 (H.L.).  But, in this case the
inconsistencies within the contract are so glaring as to make it
impossible construing the contract contra proferentum to identify
a clear and firm basis upon which to found an exemption.

8             I would dismiss the cross-appeal.

9ROWLES, J.A.:       I agree.

10DONALD, J.A.:     I agree.

11MACFARLANE, J.A.:       The appeal and cross-appeal are both
dismissed.


                                                                           "The Honourable Mr. Justice Macfarlane"