Co-author: Christina Cook (Articled Student, Miller Thomson Vancouver)
A recently reported decision provides useful insight into the due diligence defence.
On August 20, 2007 the “Kathy L”, a barge loaded with large logging equipment and 19,453 litres of petroleum products, was towed across the Johnstone Strait. Part way across the Strait, the barge began to list starboard. A crew member of the towing vessel saw the barge was taking on water and attempted to engage a water pump. The water pump failed and the equipment began to slide towards to the crewman. He scrambled out of the way, but his ankle was crushed in the process. The barge continued to tilt and sank in the middle of the Johnstone Strait, within BC’s only killer whale sanctuary. The sinking of the barge caused a major petroleum spill (20,000 litres with a 14 km long oil slick) which resulted in the barge’s owner, Leroy Trucking Ltd. (Leroy Trucking), the owner of the towing vessel, Gowlland Towing Ltd. (Gowlland Towing), and the captain of the towing vessel, Captain Strom, being charged with polluting the waters under the Canada Shipping Act, the Fisheries Act, and the Migratory Birds Convention Act.
On March 29, 2010, the B.C. Provincial Court found the owner of the barge, Leroy Trucking, guilty of polluting the waters of Johnstone Strait. Judge Saunderson found both the towing company, Gowlland Towing, and the captain of the towing vessel, Captain Strom, had exercised due diligence in their actions and were found not guilty.
Judge Saunderson heard from numerous expert engineers, navel surveyors, and safety inspectors, who inspected the barge after the accident. The experts found the barge was in a sorry state of disrepair. The experts reported there were multiple holes and cracks in the hull, damage to the internal bulkheads compromising the water tight integrity between compartments, and the barge was, overall, not seaworthy. The experts testified it was only upon their internal inspection that they could accurately see the damage to the barge and see it was not seaworthy; one expert noted “you can’t always judge a book by its cover.”
Judge Saunderson also heard from Ronald Edward (Ted) Leroy, the owner of Leroy Trucking. Mr. Leroy testified his company purchased the barge in 2004 and he was totally unaware of the condition of the barge. Further, the barge never underwent a marine survey to ensure it was seaworthy, and at no time did he inform the towing company that he was unaware of the condition of the barge.
Judge Saunderson heard that on the day of the accident, an employee from Leroy Trucking loaded the barge. Captain Strom and another crewmember were on board the barge while it was being loaded and did a general walk about to ensure the deck was in order. Judge Saunderson heard testimony that it was not within the normal course of a captain’s walk about to inspect the barge for sea worthiness or to go below deck. Judge Saunderson accepted these submissions.
Guilty Verdict – Ted Leroy Trucking Ltd.
The Court found that there is an implied term in all towing contracts that the barge to be towed shall be in seaworthy condition and is fit for towage service. In considering Mr. Leroy’s testimony that he knew nothing of the condition of the barge, Judge Saunderson found him to be at best negligent, more likely wilfully blind, and at worst lying to the Court, as to his knowledge of the barge. Based on this finding, Judge Saunderson held Leroy Trucking guilty of all charges.
Not Guilty Verdict – Gowlland Towing Ltd. & Captain Strom
Although the Crown argued Captain Strom had a duty to conduct a thorough investigation of the barge to ensure it was seaworthy, the Court found Captain Strom was not under a duty to inspect the barge. Unless Captain Strom had actual notice of the condition of the barge, which he did not, he was under no obligation to inspect it for seaworthiness. Further Captain Strom acted reasonably by instructing a crewman to monitor the barge. He found that on the balance of probabilities, Captain Strom had exercised due diligence.
The Crown argued Gowlland Towing should have had a system in place to ensure all barges to be towed were inspected for seaworthiness. Citing the implied “fit to be towed” term in towing contracts, Judge Saunderson found the Crown’s argument to be contrary to the law of tug and tow, and held that Gowlland Towing had exercised due diligence.
Despite being found guilty of all pollution charges, Leroy Trucking will not likely be responsible for the salvage effort and remediation of the Johnstone Strait. Leroy Trucking, previously one of the largest logging subcontractors on Vancouver Island, went into bankruptcy in September 2008. So far, the Province has funded the $2.5 million salvage effort. Many are speculating that with the insolvency of Leroy Trucking, the Province, meaning the tax payers, will fund the clean up and remediation of Johnstone Strait.