T-2459-74
Aluminium du Canada Limitée, B & K Shipping
Agency Ltd., Canadian Pacific Steamships Ltd.,
Clarke Traffic Services Ltd., Colley Motorships
Ltd., Federal Commerce and Navigation Company
Limited, Furness Withy & Co. Limited, Hurum
Shipping and Trading Co. Ltd., Lower St. Law-
rence Ocean Agencies Ltd., Lunham and Moore
Limited, Manchester Liners Limited, Malone
Marine Agency Limited, March Shipping Lim
ited, McAllister Towing Ltd., Montreal Shipping
Co. Ltd., Ramsey, Creig & Co. Ltd., The Robert
Reford Company Limited, Saguenay Shipping
Limited, Scandia Shipping Agencies Ltd. and
Shipping Limited (Plaintiffs)
v.
The Laurentian Pilotage Authority (Defendant)
and
Minister of National Revenue (Customs and
Excise) (Mis -en-cause)
Trial Division, Dubé J.—Montreal, December 3,
4, 1975; Ottawa, January 7, 1976.
Maritime law—Pilotage services—Whether Pilotage Au
thority entitled to assess charges for double pilotage—Wheth-
er Authority entitled to assess security watch charge—
Authority's practice of allowing 30 day period for payment at
5%, and of threatening plaintiffs under s. 35 of the Pilotage
Act, S.C. 1970-71-72, c. 52, ss. 3, 12, 22(3), 35, 43(4)—Quebec
Pilotage District General By-law, SOR/72-5, s. I.
The plaintiffs ask for a declaratory judgment in connection
with four separate matters. (1) In 1971, the parties agreed to
provide for double pilotage during the winter, and the Quebec
Pilotage District General By-law was amended to authorize
payment of a second pilot (section 6(1)). 1n February 1972, the
new Pilotage Act provided for continuance of by-laws made
under the Canada Shipping Act for one year. In November
1972, Laurentian published its new tariff which included
double rates, and the Shipping Federation filed an objection
with the Canadian Transport Commission. The double pilotage
section was withdrawn in January 1973. The day before they
were to expire, the old regulations made under the Shipping
Act (including section 6(1), (supra)) were extended another
year. In March 1973, the Authority signed a contract with the
Corporation of Lower St. Lawrence Pilots, and it was estab
lished when two pilots would be assigned per vessel. When a
new tariff appeared in March 1973, section 6(1) remained
unchanged. The day before the by-laws expired, a "gentleman's
agreement" to maintain the status quo was entered into by the
Federation and the Authority. In March 1974, the proposed
tariff of March 1973 came into force. Plaintiffs claim that the
Authority is not entitled under its tariffs of March 1973 (P.C.
1973-548) and February 1974 (P.C. 1974-437) to charge for
double pilotage for the period December I, 1973 to April 8,
1974.
(2) During the 1974 pilots' strike, the Authority assigned
each vessel standing by a pilot, and assessed "safety watch"
charges 24 hours per day at $10.00 per hour. Plaintiffs allege
that the Authority is not entitled to assess such charges for the
period April 8 to 22, 1974.
(3) Plaintiffs claim that defendant should be ordered to
continue allowing 30 days for payment, and to refrain from
charging interest. Defendant denies that this is its usual prac
tice, or constitutes recognition of a right in plaintiff's favour.
(4) Plaintiffs seek a declaration that defendant should
refrain from threatening to use section 35 of the Pilotage Act
(customs clearance) to enforce payment.
Held, (1) Defendant was entitled to assess double winter
pilotage charges for the period. The by-law allowing it
remained in force during the time in question, December 1,
1973 to April 8, 1974.
(2) The provision for standing by "on the bridge" for safety
reasons appeared first in the March 1974 regulations. Defend
ant was entitled to impose the charge, as the period involved
was April 1974. However, the assessment is exorbitant, and
contrary to the purposes of the Authority (section 12 of the
Pilotage Act) to operate an "efficient" service, and to its
obligation to provide "fair and reasonable" tariffs (section
22(3)). A pilot cannot stand by "on the bridge" for 200 hours
at a stretch; he must be physically present and on duty.
Defendant was not entitled to collect for periods when pilots
were not standing by on the bridge.
(3) The debt becomes due when incurred and defendant is
entitled to charge interest at the current rate.
(4) The purpose of section 35 is to protect the Authority
against flight by ships that have not paid, a crucial protective
device, especially in cases of foreign ownership. The Authority,
however, must cease its threatening with reference to the
charges now disputed.
Laurentian Pilotage Authority v. Shell Canada (not
reported, T-4878-73), applied.
ACTION.
COUNSEL:
J. Brisset, Q.C., for plaintiffs.
L. A. Toupin for defendant.
SOLICITORS:
Brisset, Bishop and Davidson, Montreal, for
plaintiffs.
De Grandpré, Colas, Amyot, Lesage, Des -
chênes and Godin, Montreal, for defendant.
The following is the English version of the
reasons for judgment rendered by
DUBS J.: This is an action for declaratory relief
by owners, operators or agents of ocean vessels
trading into ports of the St. Lawrence, all (except
one) members of the Shipping Federation of
Canada, hereinafter called the Federation, against
the Laurentian Pilotage Authority, hereinafter
called the Authority, a body corporate established
under the Pilotage Act' to administer pilotage
services within the Laurentian region (essentially
the St. Lawrence River).
The plaintiffs by their Statement of Claim pray
for a Declaratory Judgment to be rendered on the
following matters, abbreviated for convenience to
four separate items:
1. that the Authority is not entitled under its
Tariffs of March 6, 1973 (P.C. 1973-548) and
February 26, 1974 (P.C. 1974-437) to assess
charges for double pilotage as have been
assessed against plaintiffs during the period of
December 1, 1973 to April 8, 1974;
2. that the Authority is not entitled under the
Tariffs above referred to to assess charges for
security watch as have been assigned during the
period of April 8 to April 22, 1974;
3. that the Authority be ordered to continue its
past practice of allowing a delay of thirty days
grace for payment of pilotage charges and
refrain from taxing a 5% charge on unpaid bills;
4. that the Authority be enjoined to refrain
from threatening plaintiffs to take action
against their ships under section 35 of the Pilot-
age Act in order to enforce the above charges.
With regard to the first item, "double pilotage",
a short chronology of the events should help to
clarify the situation.
S.C. 1970-7I-72, c. 52.
Following a strike by the St. Lawrence pilots in
1971, the parties to the suit reached an agreement
on December 30, 1971. The signatories to the
agreement were the user associations, including
the Federation, the Corporation of Lower St. Law-
rence Pilots (Corporation des pilotes du Bas
St-Laurent) and the Quebec Pilotage Authority
(Department of Transport). One of the clauses
established double pilotage for the winter months:
I. As of December 30 the Quebec Pilotage District By-law
Tariff, Schedule A, is modified as follows:
(d) Section 6 of the Schedule is repealed, the intention and
agreement of the parties being that in the future double
pilotage will be charged between I December and the 8 April
or at any other time when two pilots are assigned to a vessel.
[My underlining.]
On January 13, 1972 the Quebec Pilotage Dis
trict General By-law 2 was amended as follows:
I. Subsection (1) of section 6 of the Quebec Pilotage District
General By-law is revoked and the following substituted
therefor:
"6. (I) The pilotage dues as set forth in Schedule A shall
be paid for the services of each pilot used in respect of each
vessel unless exempted by the Act or by this By-law." [My
underlining.]
On February 1, 1972 the new Pilotage Act,
replacing Part VI of the Canada Shipping Act 3 ,
which dealt with pilotage, was proclaimed. Section
3 of this Act establishes four pilotage authorities,
including the Laurentian Authority, which takes in
almost all waters situated in the Province of
Quebec. Section 43(4) of the said Act provides
that the by-laws made under the Canada Shipping
Act shall continue in force for one year from the
commencement of this Act, in other words until
February 1, 1973.
On November 11, 1972, the Laurentian Pilotage
Authority published its new tariff, including rates
for double pilotage, in the Canada Gazette: 4
Double Pilotage Charges
10. The pilotage charges prescribed in this Schedule shall be
increased by 100 per cent for pilotage services rendered
z SOR/72-5, P.C. 1972-4.
R.S.C. 1970, c. S-9.
4 Part I. November 11, 1972.
(a) during the period from the 1st day of December in any
year to the 8th day of April in the year next following; or
(b) at any other time where two pilots are assigned to a ship.
On December 7 of the same year, the Federa
tion relied on section 23 of the Act to file with the
Canadian Transport Commission its objection to
the new tariff.
As a result of this objection, the Authority
withdrew section 10 regarding double pilotage on
January 17, 1973 (the winter season had begun the
previous December 1st). Since the section had
been withdrawn, the hearing did not take place.
On January 31, 1973, the day before the regula
tions established under the former Act expired, a
new amendment was made to the Pilotage Act,
whereby the said regulations, (including the afore
mentioned section 6(1)), were extended to Febru-
ary 1, 1974.
On March 8, 1973, the amendments made by
the Authority on December 12, 1972, were
approved by Order in Council P.C. 1973-548. On
the same date, some sections were revoked by
Order in Council P.C. 1973-549, but section 6(1)
remained in force.
On March 13, 1973, the Authority signed a
contract with the Corporation of Lower St. Law-
rence Pilots by which the latter was made the
exclusive supplier of pilots, and it was established
when two pilots would be assigned to a vessel.
A new tariff proposing an increase in charges
appeared in the March 22, 1973 issue of the
Canada Gazette, but section 6(1) mentioned above
was not affected.
On November 23, 1973, the Water Transport
Committee of the Canadian Transport Commis
sion published its decision WTC 15-73. There was
no decision based on double pilotage, but the
following comments appear at page 17:
Double Pilotage
Double pilotage results from Quebec Pilotage District Gener
al By-Law by Order-in-Council P.C. 1970-2042, published in
the Canada Gazette Part Il, Vol. 104, No. 23, which is still in
force and which reads—
... where two pilots are required for the safe navigation of a
vessel, the Superintendent may assign two pilots to that
vessel and shall direct which of the pilots shall be in charge.
In section 10 of Annex "C" of the current agreement be.
tween the Corporation of pilots and the Laurentian Pilotage
Authority, double pilotage charges are prescribed for pilotage
services rendered—
(a) during the period from the 1st day of December in an}
year to the 8th day of April in the year next following; or
(b) at any other time when two pilots are assigned to a ship.
This is a matter which pertains to tariffs. It clearly has ar
effect upon revenues.
It is our view that the wording of the tariff should include a
clause dealing with double pilotage, identifying in what circum.
stances, for the safety of navigation, there will be double
pilotage and setting out the charge therefor. We should adc
that when the Pacific Pilotage Authority assigns two pilots, the
basic (single pilot) charge is increased by 60% and in the case
of the Great Lakes Pilotage Authority, the increase is 50%, anc
these charges are set out in their published tariffs.
On January 15, 1974, the Authority wrote to the
Federation emphasizing the legality of double
pilotage:
Further to your circular letter of November 30th 1973, this is
to inform you that the assignment of two pilots in the Quebec
District remains legal until regulations deriving from article 14
of the Laurentian Pilotage Act are passed before the Priv)
Council or February 1st 1974, whichever occurs first.
Meanwhile, article 6 of the Quebec Pilotage District Genera.
By-Law as amended by Order-in-Council, P.C. 1972-4 datec
January 1 lth 1972 has not been revoked and, therefore, is stil:
valid.
The day before the by-laws expired, namely or.
January 31, 1974, the Federation proposed a "gen-
tleman's agreement" in the following telegram:
In the event that pilotage regulations for your district are not
forthcoming on February 1st, the Shipping Federation of
Canada suggests making a gentleman's agreement to maintain
the status quo until such times that the regulations arc
published.
Please confirm your acceptance of this arrangement.
The following day the Chairman of the Author
ity confirmed the agreement:
Thank you for your telex dated January 31, 1974. Agree wits
your suggestion of a gentleman's agreement to maintain a
status quo with respect to the regulations until such times that
the regulations are adopted by order-in-council.
Lastly, on March 1, 1974, the proposed tariff of
March 22, 1973 was brought into force by Regula
tion SOR/74-130, Order in Council P.0
1974-437.
In a recent case, Laurentian Pilotage Authority
v. Shell Canada', where the Authority claimed
pilotage charges with respect to a second pilot for
trips lasting more than thirteen hours during 1973,
I ruled that since section 6(1) authorizing payment
of a second pilot was still in force, it was not up to
the Court to determine whether it was necessary
for the safety of such trips to use two pilots.
Likewise in the case at bar, the question is
whether the by-law allowing double pilotage was
still in force during the period with which we are
concerned, namely between December 1, 1973 and
April 8, 1974, and it was in fact still in force at
that time. The Authority was therefore entitled to
require double pilotage in winter, and the first
declaratory finding is to this effect.
The second matter mentioned in the statement
of claim is related to the "safety watch". Regula
tion SOR/74-130 (P.C. 1974-437) dated March 1,
1974 reads as follows:
5. (1) Where, in District No. 2, a pilot is required by the
master or agent of a ship to stand by on the bridge of the ship
for reasons of safety of the ship, a pilotage charge of $10.00 is
payable for each hour or part thereof the pilot is so required to
stand by. [My underlining.]
The words that are underlined did not appear in
Regulation SOR/73-135 (P.C. 1973-548) of the
previous year, dated March 6, 1973 and which
reads as follows:
5. (1) Where, in District No. 2, a pilot is required by the
master or agent of a ship to stand by on board the ship for
reasons of safety of the ship, a pilotage charge of $10.00 is
payable for each hour or part thereof the pilot is so required to
stand by.
I do not think it necessary to go through again
the same line of reasoning I used to indicate the
legality of the double pilotage by-laws; the regula
tion concerning safety watches was in force at that
time. Accordingly, it follows that the Authority
was entitled to impose a charge of $10 an hour for
each hour the pilot was required to stand by on the
bridge, since this was April 1974.
5 Court No.: T-4878-73, December 10, 1975.
During the St. Lawrence pilots' strike whicl
lasted from April 9 to April 21, 1974, some seven.
ty vessels were anchored downstream from Quebec
City, awaiting the end of the dispute in order to gc
upriver. The Authority assigned each of them t
pilot and assessed "safety watch" charges, twenty-
four hours a day for the duration of the strike, it
other words at the rate of $240 a day per piloi
while the ships were at anchor.
In my view, this assessment is exorbitant anc
contrary to the purposes of the Authority pre
scribed in section 12 of the Act, which are tc
operate an "efficient" pilotage service. It also rum
counter to the obligation of the Authority to pre
scribe "fair and reasonable" tariffs, pursuant tc
section 22(3).
The Authority may only assess charges for the
time actually spent by the pilots "on the bridge"
A pilot cannot stand by on the bridge two hundred
hours at a stretch and the Authority cannot, in al:
conscience, claim $2,000 for its services as it
attempts to do in some of the bills submitted to the
Court.
Neither the Pilotage Act nor the Canada Ship
ping Act defines the word "bridge". The following
definitions give some indication of the current
usage of the term:
An elevated thwartship platform from which the vessel is
navigated and all activities on deck are in plain view (A
Glossary of Sea Terms by Gershom Bradford)
A raised platform, extending from side to side of a ship, for the
officer in command (The Shorter Oxford English Dictionary.
Volume 1)
A raised platform on a ship for the commanding officer (Con-
cise Edition, Webster's New World Dictionary)
A raised platform extending from side to side in steam or motor
vessels above the railing forward of amidships for the use and
convenience of the officers in charge. Also called flying bridge.
It affords an uninterrupted view and is supplied with means for
communicating by automatic signals with the principal parts of
the ship. It provides space for the wheelhouse and chartroom.
The bridge superstructure is frequently arranged in two tiers
one above the other, and has an outlook station above the upper
tier. Fr. Passerelle de navigation (International Maritime Dic
tionary by René de Kerchove, Second Edition)
[TRANSLATION] Planking covering a row of deck beams, on a
ship. (Le Petit Robert)
To my mind, a pilot is not standing by on the
bridge when he is resting in his cabin or elsewhere
on board. Standing by on the bridge means being
physically present and on duty on the bridge.
It will undoubtedly be very difficult now to
determine the periods when the pilots were stand
ing by on the bridge. If the Authority had accept
ed the check system proposed by the Federation on
November 29, 1973 (Exhibit P-20), it would be in
a less difficult position today. The explanatory
paragraph of the letter which accompanied the
proposed form is cited below:
During the Canadian Transport Commission hearings you pro
vided the Commission with an assurance that a new pilotage
source form had been devised which included a safety watch
notation. Safety watch was noted and signed for by the Master
on form B, the Master retaining the 6th copy. We understood
from your testimony that this source form was going to be
implemented "forthwith". We now understand that you have
delayed implementation of this improved form and are some
what concerned as to the reasons for this delay, especially as
the C.T.C. decision upholds the requirement for a pilot to be
"standing by on the bridge".
Please will you advise us as to why the form is not in use and
the revised timetable you have in mind.
At the Court's request, plaintiffs agreed to draw
up a summary of the safety watch charges
incurred during the period in question, namely
from April 8 to April 22, 1974. This document can
be used as the basis for an agreement between the
two parties on the approximate number of hours
spent standing by on the bridge.
The second declaratory finding is accordingly to
the effect that, under the Act and its Regulations,
defendant was not entitled to assess and collect
safety watch charges for times when the pilots
were not standing by on the bridge of the ships
affected by the said charges.
As for the thirty days grace, defendant admits in
paragraph 14 of its defence that for about a year it
has drawn up its bills on a thirty-day basis, with a
five per cent charge after thirty days. It denies,
however, that this method of invoicing is the usual
practice of defendant, or constitutes recognition of
a right in favour of plaintiffs, adding that payment
for services rendered is payable immediately, given
the very nature of the services.
No clause exists in the Pilotage Act whereby the
Authority is required to grant a thirty-day period
of grace. These are charges that the Authority
must pay out to the pilots, who undoubtedly
require their payment immediately. Furthermore,
in accordance with section 12 of the Act, the
Authority must operate efficiently. On the other
hand, the said Act does not authorize the Author
ity to charge five per cent. We must conclude that
the debt becomes due once it has been incurred,
and that the Authority is entitled to charge month
ly interest at the current rate. I must therefore
make a declaratory finding to the effect that
although neither the Act nor its Regulations
authorizes the Authority to charge five per cent, it
is entitled to charge interest on unpaid bills, at the
current rate.
Finally, plaintiffs prayed for a declaratory judg
ment to the effect that defendant should refrain
from threatening to use section 35 of the Act to
enforce the pilotage charges under dispute against
the ships concerned.
In their statement of claim, plaintiffs note a
letter addressed to plaintiffs dated June 3, 1974,
which reads as follows:
I have been instructed by the Laurentian Pilotage Authority
to claim from you the sum of $ which represents out
standing and unpaid pilotage charges, as set out in the attached
invoice statement.
These pilotage charges are owed to the Authority on the
basis of the appropriate tariffs of pilotage charges in applica
tion at the time the charges were incurred and, where appli
cable, on the basis of a contract-agreement signed by The
Shipping Federation of Canada, the Canadian Chamber of
Shipping and others on December 30th, 1971, at the Ministry
of Transport in Ottawa, Ontario, and other related documents.
Failure on your part to make total payment of the said
amount to be received by the Authority on or before June 10,
1974, will result in litigation and the strict application by the
Authority of all the pertinent regulations and statutes, includ
ing the provisions of the Pilotage Act, and may cause your
disbursing unnecessary additional costs and expenses as a result
thereof.
For your information, section 35 of the Pilotage Act reads as
follows:
35. No Customs officer at any port in Canada shall grant
a clearance to a ship if he is informed by an Authority that
pilotage charges in respect of the ship are outstanding and
unpaid.
The purpose of section 35 is to protect the
Authority against flight by ships that have not
paid their pilotage charges. This is a very impor
tant protective measure, especially in the case of
foreign ownership, where the collection of charges
can become difficult and even impossible. There
can be no question of making a declaratory finding
prohibiting defendant from exercising its right to
inform the customs officer that pilotage charges
are unpaid.
There is, however, a basis for making a declara-
tory finding to the effect that the Authority must
not continue to threaten plaintiffs and their ships
with reference to the pilotage charges now under
dispute; these charges are protected by a deposit of
$200,000 made by the Federation on behalf of
plaintiffs in accordance with an order of this
Court.
Accordingly, the Court pronounces the follow
ing binding declaratory judgment:
1. that defendant was entitled to assess charges
for winter double pilotage for the period
involved;
2. that defendant was not entitled to assess and
collect safety watch charges for times when the
pilots were not standing by on the bridges of the
ships affected by the said charges;
3. that defendant was not authorized to charge
five per cent on unpaid bills, but was entitled to
charge the current rate of interest on the unpaid
bills; however, it is not bound to a thirty-day
period of grace;
4. that defendant shall cease threatening plain
tiffs and their ships with respect to the pilotage
charges now under dispute;
5. that the sum of $200,000 deposited by the
Federation on behalf of plaintiffs shall be
released as soon as the parties involved have
settled the payments or reimbursements of pilot-
age charges in accordance with the above-cited
declaratory judgments;
6. that a copy of this binding declaratory judg
ment shall be served on the mis -en-cause.
Both parties being partly successful, there will
be no order as to costs.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.