Federal Court Decisions

     T-457-88

BETWEEN:

     NEWFOUNDLAND PROCESSING LIMITED

     Plaintiff

     - and -

     THE OWNERS AND ALL OTHER INTERESTED

     IN THE SHIP SOUTH ANGELA

     Defendants

     T-584-90

BETWEEN:

     NEWFOUNDLAND PROCESSING LIMITED

     Plaintiff

     - and -

     SOUTH ANGELA SHIPPING INC. ET AL

     Defendants

     T-620-90

BETWEEN:

     HER MAJESTY THE QUEEN

     Plaintiff

     - and -

     BELLEVIEW INC. ET AL

     Defendants

    

     REASONS FOR JUDGMENT

ROULEAU, J.

     This is an action by the plaintiff for special and general damages representing the costs, expenses, and losses incurred by it as a result of an oil spill which occurred at its refinery at Come-By-Chance, Newfoundland, on March 7, 1988.

     The plaintiff, Newfoundland Processing Limited ("NPL"), is a company incorporated under the laws of the Province of Newfoundland. The M.T. South Angela ("the vessel") is a steel hulled oil tanker having a length of 258,358 metres, a breadth of 42,012 metres, and gross tonnage of 59.353. The vessel is registered at the Port of Monrovia, Liberia, and at all material times was the carrier of a cargo of 768,320.7 U.S. barrels of Kole crude, most of which was discharged at the plaintiff's refinery at Come-By-Chance, Newfoundland, from March 4 to 7, 1988.

     On March 7, 1988, the M.T. South Angela (the "Vessel") was discharging a cargo of Kole crude oil at the NPL refinery at Come-By- Chance, Placentia Bay, Newfoundland. At approximately 12:35 p.m. an oil spill occurred. At the time, the bulk of the cargo had been discharged and the vessel was involved in a line draining process whereby the remaining oil onboard flowed back into the ship's port slop tanks for final pumping ashore. The spill was caused by the overfilling of the No. 6 port slop tank on the vessel.

     The spilled oil flowed over the deck of the ship and into the sea. Most of it moved in a northerly direction away from the refinery where it was eventually directed onto the beach. During the period before the cleanup was completed, oil residues in the tidal wash flowed back toward the refinery property. NPL was required to participate in the containment and clean-up of the spill to ensure that damage to the environment was minimized and to mitigate further damage to the refinery property.

     The only issue in this action is what or who was responsible for the oil spill of March 7, 1988, at Come-By-Chance, Newfoundland. NPL takes the view that the spill was caused by the negligence of the vessel's Chief Officer, Mr. Lawrence DeCosta and its other officers. It is alleged that Mr. Decosta, managing the discharge for the vessel, failed to communicate effectively to other officers on the vessel and to the jetty personnel before and after the commencement of the line draining stage. It suggests that a stripping pump was operating on the vessel thereby causing it to educt, suck or strip the shorelines back through the vessel. In addition, the Third Officer, Mr. Shaneanu Midra, is alleged to have failed to close the ships No. 2 manifold during the line draining stage, thereby allowing the oil which allegedly flowed back from the plaintiff's refinery to overfill the vessel's No. 6 lop tank.

     The defendant takes the position that the spill was caused by NPL allowing a backflow from its refinery. It argues that there was an appropriate communication from the Chief Officer DeCosta to the jetty which should have caused the jetty personnel to close the shore manifold, thereby preventing the spill caused by the back flow. The defendant also maintains that the spill was due to the failure of the plaintiff to have check valves to prevent a backflow from occurring.

     I am satisfied that the spill in question was a combination of human errors and mechanical failures on the part of both the plaintiff refinery and the defendant vessel, and that both parties must bear responsibility for the damage which it caused.

     To begin with, I do not believe that the evidence supports the plaintiff's theory that a stripping pump was operating on the vessel thereby causing it to educt, suck or strip the shorelines back through the vessel. The Captain of the vessel testified that all the pumps were off and the Chief Engineer stated that after 12:15, no pump was operating. In addition, the evidence demonstrates that all of the tanks had been stripped that morning and were empty meaning there was no cargo left to pump other than what had been drained into the No. 6 port slop tank. That cargo was to be discharged by the Marpole line, that is the starboard side of the crude oil washing line, which was separate and apart from the main lines, and in particular, the No. 2 main line.

     On the other hand there is a great deal of evidence to support a finding that there was a back flow from the plaintiff's refinery. The plaintiff's witness, Captain Barry Scott, gave evidence that he deducted from the information supplied to him that there had been a back flow of ten thousand barrels of oil. Captain John Benge, another of the plaintiff's witnesses, who was a surveyor on the vessel at the time of the spill, also gave evidence that there had been a back flow. He testified that there was no possibility the spill could have occurred without a back flow from the refinery. Captain Michael Ashton, a surveyor on the vessel on behalf of the vessel's interests, also gave evidence that there had been a back flow. He stated that oil in the shore tanks back flowed through the shore line, through the loading arms into the ship's line, filled the slop tank and went out through the top of the slop tank.

     While the consultants and surveyors were unanimous in their opinion that a back flow had occurred, with the on-sight surveyors realizing immediately that a back flow had occurred and that a spill could not have resulted without a back flow, the plaintiff's employees maintained they were uncertain as to the cause of the spill. Mr. Daniel McKechnie was Offsights and Marine Superintendent for the plaintiff at the time in question. It was he who had direct responsibility for the jetty and who, together with shift superintendent, Richard Foulston, investigated the spill of March 7, 1988. Mr. McKechnie was not prepared to admit without equivocation that there had been a back flow on March 7, 1988. He stated that although a back flow was a possibility, he had no way of proving it.

     The second witness called by the plaintiff, Mr. Eric Butt, was also a shift Superintendent for the plaintiff in 1988. He was not on duty at the time of the spill and did no know whether the oil in the tank in question, tank 106, would be higher or lower than the chiksan, but thought the tank was quite a bit higher.

     The third witness called by the plaintiff was Richard Foulston, who was the superintendent at the time of spill in charge of the overall operation of the Refinery with the Area Supervisor at the jetty, Mr. Fewer, as well as five other Area Supervisors and five areas also reporting to him. It was he as the Shift Superintendent at the time in question as well as Mr. McKechnie, the Offsights and Marine Superintendent, who investigated the spill for the Refinery. Mr. Foulston agreed that it was physically possible to have a back flow and that it was "one of the scenarios that could have happened." He further testified that there were no means to detect back flow other than a physical gauge which the plaintiff did not have.

     The other witnesses for the plaintiff also seemed either vague or without knowledge concerning the question of back flow. Mr. Bernard Fewer, the Shift Supervisor in charge at jetty control, could not say that a back flow had occurred. He testified that it was always a possibility and it was possible to lose oil from the facility and not be aware of it. He also gave evidence to the effect that if there were back flow, he would have no way of knowing that it was happening. Mr. Max Toope, one of the operators at the jetty said that it was possible to have back flow. Mr. Calvin Boutcher gave evidence that indicated he was probably not aware of the risk of back flow.

     Furthermore, it is apparent that, owing to the high degree of elevation of the shore tanks above the level of the ship's manifold, there is always a possibility that pressure will exist in the shore line. Based on the evidence, therefore I am satisfied that there was a back flow from the shore storage tanks back through the vessel's lines. Indeed, the plaintiff has not put forth any concrete evidence that would persuade me otherwise.

     However, the defendant vessel must also bear responsibility for the spill in light of the fact that the closure of its No. 2 manifold valve would have prevented the back flow from the plaintiff's refinery from going into the slop tank and overflowing into sea. The evidence shows that after completion of bulk discharge, the vessel went into line draining. The line draining process involves the draining of all lines and includes that part of the main lines outside the manifold, the connection to the shoreline, and the shoreline to the height of the loading arm. If the manifold valve is closed prematurely, oil would be trapped outside No. 2 manifold and would not be delivered to the shore. Also, at uncoupling, there could be a risk of a spill.

    

     After the lines have been drained the manifold valves are to be closed. There is no question therefore that the No. 2 manifold valve had to be closed. The issue here simply relates to the timing of the closure. Based on the evidence before me, I am satisfied that the failure to close the manifold valve appears to be either the result of a miscommunication between the crew members whereby they thought the valve was closed or a failed attempt at closing it. In his statement dated November 7, 1989, Captain Benge maintains that the crew on board the vessel was not of a high calibre and that the Master failed to exert his authority and played no part in the discharge operations at all, leaving the Chief Officer in charge. Although the Chief Officer was competent and of average ability, Captain Benge states that his ability to perform his job was the result of habit rather than through technical knowledge.

     The respondent maintains that it contacted the jetty and advised that the discharge operation was complete. This communication, it is argued, should have resulted in the closing of the shore manifold which would have prevented the back flow from overfilling the vessel's No. 6 port slop tank. There is a great deal of contention between the parties as to whether that communication was ever made. The plaintiff denies receiving the call, and argues that even if it was made, it would not have led to the closing of the shore manifold unless jetty personnel were specifically directed to do so.

     In my view however, the question of whether a call was made by the vessel indicating the discharge operation was complete does not assist in resolving the issue of which party was at fault for the spill.

     What the evidence does make clear is that the closure of the ship's No. 2 manifold valve would have prevented the back flow from overfilling the vessel's number 6 port slop tank. However, that does not alter the fact that the back flow initiated from the plaintiff's refinery and that it did not have any check valves in place which, although not required by law, would have made it aware that a back flow was occurring. It is for this reason that I do not agree with the plaintiff's argument that the defendant had the "last clear chance" of avoiding the spill and therefore should be held entirely responsible for it. The plaintiff's valve and the defendant's manifold valve were in relatively close proximity, and the back flowing oil had to pass through both of them in order for the spill to occur. There was no last clear chance for the defendant to avoid the spill because no one knew a back flow from the plaintiff's refinery was taking place until the spill resulted.

     In reaching my conclusion, that the plaintiff refinery and the defendant vessel must both share responsibility for the oil spill of March 7, 1983, I have been persuaded by the reasoning of the Newfoundland Court of Appeal decision in Bow Valley (Husky) Bermuda Limited et al. v. Saint John Shipbuilding Limited et al. (1995), 130 Nfld. & P.E.I.R. 92, wherein Cameron, J.A. states as follows at pp. 139-41:

. . . those cases cited by the respondents for the proposition that the contributory negligence bar was firmly entrenched in maritime law are unconvincing. On the other hand there are many cases supporting the appellant's view that the application of provincial negligence law to maritime cases is possible, given the right circumstances.

There are aspects of maritime law which cry out for consistency not only throughout Canada but throughout the word. (See, for example the comments of La Forest, J., in Whitbread v. Walley et al. regarding the need for uniformity in the area of tortious liability for collisions and other accidents that occur in the course of navigation.) That is the reason for many international conventions respecting aspects of maritime law. However, the Canadian Laws Offshore Application Act illustrates that in Canada the constitutional division of powers need not stop at the provincial borders. The government of Canada has recognized that there is a place for the application of provincial legislation in the offshore, under certain conditions. On this analysis the law as enunciated in "Kathy K would be no less applicable to a case arising on a rig operating on the Grand Banks, than to cases arising in Newfoundland harbours.

I conclude that the result in this case is the same whether it is viewed as a tort on the high seas or a tort on a rig operating on the Canadian continental shelf. However, if I am wrong in this conclusion and the law applicable is Canadian maritime law and there is no room for the application of any provincial law, I would refuse to apply the common law contributory negligence bar in any event.

     . . .

It seems to me that it is time for the courts to respond to the injustice of the application of a contributory negligence bar and t declare that liability for tort, in maritime law, should be borne in relation to the degree of fault of the parties. If the contributory negligence bar was once seen by the judges who developed it as a fitting response to the problem of a defendant being held responsible for all the damage when it was in fact caused in party by the plaintiff and in part by the defendant, that should no longer be the case. I do not believe that is necessary for this court to examine and declare what is to be done in respect of each problem which might arise in the field of maritime law with the elimination of the contributory negligence bar. Traditionally the common law has developed on a case by case basis, responding on an incremental basis to problems as they arise. I see no need to break with that tradition. Apportionment of fault has been the tradition of Maritime law in collision cases. It seems to me to be a logical extension of that tradition to extend apportionment to other areas.

                     (emphasis added)

     Finally, it should be noted that there was also an oil spill which occurred on March 5, 1988. That spill however, does not form part of this dispute since the parties have agreed that it was the responsibility of the defendant ship.

     For these reasons, I am satisfied that the amount claimed by the plaintiff in its Amended Statement of Claim as costs incurred by it for the clean-up of the oil spill of March 7, 1988, should be apportioned equally between the plaintiff refinery and the defendant vessel. Should there be some dispute with respect to the assessment of damages, I would be available to the parties to entertain oral submissions.

     Since success is equally divided, both parties shall bear their separate costs.

JUDGE

OTTAWA, Ontario

September 23, 1996