A-596-77
Pacific Pilotage Authority (Appellant)
v.
Alaska Trainship Corporation, Pacific Maritime
Agencies Limited and the Ship S.S. Alaska
(Respondents)
A-597-77
Pacific Pilotage Authority (Appellant)
v.
The Ship Alaska, Alaska Trainship Corporation
and Pacific Maritime Agencies (Respondents)
A - 623 - 77
Pacific Pilotage Authority (Respondent)
v.
The Ship Alaska, Alaska Trainship Corporation
and Pacific Maritime Agencies (Appellants)
Court of Appeal, Heald, Urie and Le Dain JJ.—
Vancouver, January 30 and 31; Ottawa, June 20,
1979.
Maritime law — Pacific Pilotage Authority by-law con
cerning compulsory pilotage in compulsory pilotage zone —
Canadian or American registration prerequisite to exemption
or waiver of use of pilot in zone — Ship's master and deck
officers barred by union rule from holding pilot's permit —
Appeal from judgment declaring s. 9(2)(a) of the Pacific
Pilotage Regulations to be ultra vires — Appeal from dismis
sal of claim for pilotage dues for the period February 1, 1974
to April 30, 1974 — Appeal from dismissal of counterclaim
for recovery of pilotage dues paid under mutual mistake of
law but paid under compulsion during the period February 1,
1972 to January 30, 1974 — Pilotage Act, S.C. 1970-71-72, c.
52, ss. 9, 12, 14, 43(1),(7) — Pacific Pilotage Regulations,
SOR/73-82, as amended, ss. 9, 10.
Alaska Trainship Corporation, the S.S. Alaska, and Pacific
Maritime Agencies Limited operate a shipping business,
moving goods from New Westminster, British Columbia, to
Alaska. The S.S. Alaska did not carry a licensed pilot in a
compulsory pilotage area where safety was not compromised
and the Pacific Pilotage Authority charged for pilot services as
if provided, in accordance with the Regulations. The ship did
not meet a condition—Canadian or American registry—for
exemption or waiver of the compulsory pilotage regulation.
Further, the ship's master and deck officers could not be
certified pilots by ruling and later by constitution of the
Canadian Merchant Service Guild. These three appeals are
from judgments of the Trial Division in two actions tried on
common evidence. The first is appeal A-596-77 from a judg
ment declaring section 9(2)(a) of the Pacific Pilotage Regula
tions to be ultra vires in part. The second is appeal A-597-77
from a judgment dismissing a claim for pilotage dues for the
period February 1, 1974 to April 30, 1974. The third is appeal
A-623-77 from a judgment dismissing a counterclaim for the
recovery of pilotage dues allegedly paid under mutual mistake
of law but as a result of compulsion during the period February
1, 1972 to January 30, 1974.
Held, the appeal is dismissed. Sections 9(2)(a)(iii) and
10(1)(a) of the Pacific Pilotage Regulations are declared ultra
vires the Authority. What the Authority does must be done in
the final analysis in the interest of safety. Country of registra
tion will be a relevant criterion for the application of compulso
ry pilotage in so far as it may be said to relate in,a particular
context to safety. In section 9(2)(a)(iii) of the Regulations,
country of registration is not relevant to the question of safety.
Since the requirement of safety is assured by the other condi
tions specified therein concerning the competency of the master
or deck watch officer and his experience with local waters,
country of registration is a superfluous requirement and can
only be there to serve some other purpose not authorized by the
Act. The provision discriminates against the owners of the S.S.
Alaska on a ground that, in that particular context, is not
authorized by the Act. The same can be said with respect to
section 10(1)(a) of the Regulations concerning waiver; where
the conditions of waiver are spelled out in terms of specific
competency and experience with local waters, country of regis
tration is irrelevant. Sections 9(2)(a)(iii) and 10(1)(a) must
fall as a whole although this may not serve the purposes of the
respondents. There is no basis on which the Regulations as a
whole can be held to be ultra vires. In the absence of proof that
the Authority adopted the Pacific Pilotage Regulations as a
whole for a purpose other than that for which the regulation
making authority was conferred, the possible interest of the
active pilot members arising from their membership in the B.C.
Coast Pilots Ltd. and the Canadian Merchant Service Guild
cannot affect the validity of the Regulations, even if the making
of the Regulations be regarded as a legislative act or a quasi-
judicial function. The opposition of the Canadian Merchant
Service Guild to pilotage certificates cannot affect the validity
of the Regulations. The Authority did not have a duty to create
an exemption or waiver for the S.S. Alaska in order to over
come the Guild's policy that its members not hold pilotage
certificates and its refusal to do so cannot be said to amount to
bad faith.
Held also, appeal A-597-77 must be allowed and the claim of
the Authority maintained because, since section 9(2)(a)(iii)
must fall as a whole, the S.S. Alaska was subject to compulsory
pilotage for the period April 10, 1974 to April 30, 1974; the
claim for dues from February 1, 1974 to April 9, 1974 was
abandoned because there were no pilotage regulations in force
during this period.
Held also, appeal A-623-77 from the dismissal of the coun
terclaim is dismissed; the S.S.Alaska was subject to compulso
ry pilotage dues during the period February 1, 1972 to Febru-
ary 1, 1974. A pilotage authority did not have power under the
Canada Shipping Act to provide by by-law for the compulsory
payment of pilotage dues, and the confirmation of the by-law
by the Governor in Council could not make valid what was in
its origin invalid. The effect of section 43(1) of the Pilotage Act
is that at the time the Pilotage Act came into force the Pilotage
District of British Columbia must be deemed to be one in which
the payment of pilotage dues was compulsory and therefore a
pilotage area established pursuant to the Pilotage Act. That
Act provided for the continuation of those dues until February
1, 1974.
APPEAL.
COUNSEL:
R. Langlois for Pacific Pilotage Authority.
D. Hogarth, Q.C. for the Ship S.S. Alaska,
Alaska Trainship Corporation and Pacific
Maritime Agencies Limited.
SOLICITORS:
Owen, Bird, Vancouver, for Pacific Pilotage
Authority.
Hogarth, Oliver, Hughes & Drabik, New
Westminster, for the Ship S.S. Alaska,
Alaska Trainship Corporation and Pacific
Maritime Agencies Limited.
The following are the reasons for judgment
rendered in English by
LE DAIN J.: These are three appeals from judg
ments of the Trial Division [[1978] 1 F.C. 411] in
two actions tried on common evidence. The first is
appeal A-596-77 from a judgment declaring sec
tion 9(2)(a) of the Pacific Pilotage Regulations
(P.C. 1974-851, April 9, 1974, SOR/74-242) to be
ultra vires in part. The second is appeal A-597-77
from a judgment dismissing a claim for pilotage
dues for the period February 1, 1974 to April 30,
1974. The third is appeal A-623-77 from the judg
ment in the same action dismissing a counterclaim
for. the recovery of pilotage dues allegedly paid
under mutual mistake of law but as a result of
compulsion during the period February 1, 1972 to
January 30, 1974.
It may be helpful to an understanding of the
issues, which involve the existence and validity
during the relevant periods of pilotage regulations
applicable to the S.S. Alaska, to begin with some
indication of the legislative framework in which
they must be considered.
Part VI of the Canada Shipping Act, R.S.C.
1970, c. S-9 established a system of compulsory
payment of pilotage dues, whether or not ,a ship
required the services of a pilot. It provided for the
creation of pilotage districts and pilotage authori
ties. The Act provided in section 331 for exemp
tion from the compulsory payment of pilotage dues
for certain classes of ships. Several of the catego
ries of exemption depended, at least in part, on the
ship's country of registration. Section 311 of the
Act provided that the Governor in Council could
from time to time make the payment of pilotage
dues compulsory or not compulsory within the
limits of a pilotage district created under the provi
sions of the Act.
The Pilotage District of British Columbia was
established in 1929 by an Order in Council which
provided that the payment of pilotage dues was not
to be compulsory. In 1949, by by-law confirmed by
the Governor in Council, the Pilotage Authority of
the District amended its pilotage by-laws so as to
provide for the compulsory payment of pilotage
dues. A similar provision was included in section 6
of the British Columbia Pilotage District General
By-law of 1965, [SOR/65-241] also made by the
Pilotage Authority and confirmed by the Governor
in Council. The validity and application of this
provision in the by-laws is an issue in the appeal
from the judgment dismissing the counterclaim.
A Royal Commission was appointed in 1962 to
inquire into pilotage. Part II of its Report, submit
ted in 1968, forms part of the record. It is doubtful
if it can be of much assistance to the Court in the
resolution of the issues in these appeals. It is not
even clear how far it may be referred to as identi
fying the condition which the subsequent legisla
tion was intended to remedy. It may be noted,
however, that the owners of the S.S. Alaska made
a submission to the Commission in which they
urged that they should not be required to pay
pilotage dues when, because of the competence
and experience of the master and deck watch
officers of the vessel, they did not require the
services of a pilot in the interests of safe naviga
tion. The report shows that the special case of the
S.S. Alaska had been placed before the public
authorities well before the enactment of the new
legislation.
The Pilotage Act, S.C. 1970-71-72, c. 52 was
assented to on June 30, 1971, and came into force
by proclamation on February 1, 1972. * It replaced
the system of compulsory payment of pilotage
dues, whether or not one chose to use the services
of a pilot, by a system of compulsory use of the
services of a licensed pilot or the holder of a
pilotage certificate. Section 2(d) of the Act con
tains the following definition of "compulsory pilot-
age"—" `compulsory pilotage' means, in respect of
a ship, the requirement that the ship be under the
conduct of a licensed pilot or the holder of a
pilotage certificate". Section 16(1) of the Act
provides: "Except as provided in the regulations,
no person shall have the conduct of a ship within a
compulsory pilotage area unless he is a licensed
pilot or a regular member of the complement of
the ship who is the holder of a pilotage certificate
for that area."
The Pilotage Act creates four pilotage authori
ties, of which the Pacific Pilotage Authority is one.
Its region is described in the Schedule to the Act
as "all Canadian waters in and around the Prov
ince of British Columbia." Under section 3 of the
* SI/72-2, January 19, 1972, Canada Gazette, Part II, Vol.
106, no. 3.
Act the Chairman and members of an Authority
are appointed by the Governor in Council. The
objects of an Authority are stated in section 12 of
the Act as follows:
12. The objects of an Authority are to establish, operate,
maintain and administer in the interests of safety an efficient
pilotage service within the region set out in respect of the
Authority in the Schedule.
An Authority may provide a pilotage service by
employing pilots or, as the Pacific Pilotage Au
thority has done in the present case, by making a
contract with a pilots corporation for the services
of licensed pilots. This is provided for by section 9
which reads:
9. (1) Subject to subsection (2), an Authority may employ
such officers and employees, including licensed pilots and
apprentice pilots, as are necessary for the proper conduct of the
work of the Authority.
(2) Where a majority of licensed pilots within the region, or
any part thereof, set out in respect of an Authority in the
Schedule, who form or are members or shareholders of a body
corporate, elect not to become employees of the Authority, the
Authority may contract with that body corporate for the ser
vices of licensed pilots and the training of apprentice pilots in
the region or part thereof where the contract is to be effective
and the Authority shall not employ pilots or apprentice pilots in
any region or part thereof where such a contract is in effect.
(3) Any body corporate that contracts, pursuant to subsec
tion (2), with an Authority shall permit a licensed pilot or
apprentice pilot in the region or part thereof to which the
contract relates and who is not a member or shareholder of that
body corporate to become a member or shareholder on the
same terms and conditions as the licensed pilots and apprentice
pilots who formed or are members or shareholders of that body
corporate.
The Act, in sections 15 and following, provides
for the issue of pilot licences and pilotage certifi
cates. It lays down certain essential conditions for
the issue of a licence or certificate, subject to such
additional conditions as may be imposed by regu
lation made by the Governor in Council or an
Authority. An Authority must be satisfied that an
applicant for a pilotage certificate "has a degree of
skill and local knowledge of the waters of the
compulsory pilotage area equivalent to that
required of an applicant for a licence for that
compulsory pilotage area." An applicant for a
licence or pilotage certificate must be a Canadian
citizen or a landed immigrant, and a licence or
pilotage certificate issued to a landed immigrant
ceases to be valid five years from the date the
licence is issued unless he becomes a Canadian
citizen before that date. The Governor in Council
is empowered by section 42 of the Act to make
regulations for, among other purposes, "prescrib-
ing for any region or part thereof the minimum
qualifications respecting the navigational certifi
cates, experience at sea, age and health of an
applicant that an applicant shall meet before he is
issued a licence or pilotage certificate". Pursuant
to this authority the Governor in Council adopted
the General Pilotage Regulations by P.C. 1973-
309 on February 6, 1973 (SOR/73-82, 7 Febru-
ary, 1973).
By section 14 of the Act an Authority is empow
ered to make regulations as follows:
14. (1) An Authority may, with the approval of the Gover
nor in Council, make regulations necessary for the attainment
of its objects, including, without restricting the generality of the
foregoing regulations
(a) establishing compulsory pilotage areas;
(b) prescribing the ships or classes of ships that are subject
to compulsory pilotage;
(c) prescribing the circumstances under which compulsory
pilotage may be waived;
(d) prescribing the notice, if any, to be given by a ship of its
estimated time of arrival in a compulsory pilotage area or its
estimated time of departure from a place in a compulsory
pilotage area and the manner of giving such notice;
(e) prescribing classes of licences and classes of pilotage
certificates that may be issued;
(J) prescribing the qualifications that a holder of any class of
licence or any class of pilotage certificate shall meet, includ
ing the degree of local knowledge, skill, experience and
proficiency in one or both of the official languages of Canada
required in addition to the minimum qualifications pre
scribed by the Governor in Council under section 42;
(g) prescribing the manner for determining whether
(i) a person who applies for a licence or pilotage certifi
cate, or
(ii) a licensed pilot or holder of a pilotage certificate
meets the qualifications prescribed under paragraph (f) for
the class of licence or pilotage certificate that he holds or for
the issue of which he has applied, as the case may be;
(h) prescribing the manner of issuing licences and pilotage
certificates;
(i) setting the time and fixing the fee for any examination
relating to the issue of a licence or pilotage certificate and
the fee for issuing a licence or pilotage certificate;
(j) limiting the number of licences that may be issued for
any compulsory pilotage area;
(k) prescribing the conditions, in addition to the requirement
of subsection (1) of section 16, under which a ship shall have
a licensed pilot or holder of a pilotage certificate on board;
(1) prescribing the minimum number of licensed pilots or
holders of pilotage certificates that shall be on board ship at
any time; and
(m) prescribing the circumstances under which a licensed
pilot or holder of a pilotage certificate shall be required to
take further training to enable him to meet any new qualifi
cations prescribed under paragraph (j) since his licence or
pilotage certificate was issued.
(2) Where Canadian waters are contiguous with waters of
the United States, an Authority may, with the approval of the
Governor in Council, make regulations setting out the terms
and conditions under which
(a) a pilot, or other person, authorized to have the conduct
of a ship by an appropriate authority of the United States
may pilot in Canadian waters; and
(b) a licensed pilot or holder of a pilotage certificate may
have the conduct of a ship in waters of the United States.
(3) Before making a regulation under paragraph (a) or (j)
of subsection (1) an Authority shall publish a copy of the
proposed regulation in the Canada Gazette and no such regula
tion shall be made by the Authority
(a) before the expiration of thirty days from the date of
publication of the proposed regulation; or
(b) where a notice of objection is filed pursuant to subsection
(4), before the objection is heard and an order is made by the
Minister pursuant to subsection (7).
(4) Any person who has reason to believe that a regulation
that an Authority proposes to make under paragraph (a) or (j)
of subsection (1) is not in the public interest may file a notice
of objection setting out the grounds therefor with the Minister
within thirty days following publication of the proposed regula
tion in the Canada Gazette.
(5) Where a notice of objection is filed pursuant to subsec
tion (4), the Minister shall appoint a person to make such
investigation of the proposed regulation, including the holding
of public hearings, as in his opinion is necessary or desirable in
the public interest.
(6) A person appointed under subsection (5) shall have all
the powers of a commissioner under Part I of the Inquiries Act.
(7) On completion of a hearing under this section the person
holding the hearing shall send a report to the Minister and the
Minister may, by order, approve, amend or disapprove the
proposed regulation either in accordance with the report or
otherwise and the Authority shall make the regulation
accordingly.
Subsections (4) and (5) of section 43 of the Act,
a transitional provision the precise effect of which
must be considered in connection with the appeal
from the judgment dismissing the counterclaim,
provided for the continuation in force of by-laws,
regulations and orders in council made pursuant to
the pilotage provisions of the Canada Shipping
Act for a period of one year from the commence
ment of the Pilotage Act. By an amendment to
subsection (4) (S.C. 1973-74, c. 1) this period was
extended for by-laws and regulations for a further
year to February 1, 1974. By subsection (7) of
section 43 a pilotage district constituted under
Part VI of the Canada Shipping Act in which
there was compulsory payment of pilotage dues
was deemed to be a compulsory pilotage area
established pursuant to the Pilotage Act until the
Authority adopted a regulation under section
14(1)(a) of the Act.
The issues in these appeals involve in part the
validity of the Regulations made by the Pacific
Pilotage Authority and approved by the Governor
in Council pursuant to section 14. To understand
the grounds on which their validity is attacked it is
necessary to turn now to a consideration of the
special case presented by the S.S. Alaska and of
the circumstances preceding the adoption of the
Regulations.
The S.S. Alaska is a trainship of 520 feet and
5,598 gross tons, which, since 1964, has made
regular weekly voyages transporting railway cars
between New Westminster, British Columbia, and
Wittier, Alaska. She was built in Japan, is Ameri-
can owned, and is of Liberian registry. She is
owned by Alaska Trainship Corporation of Seattle,
Washington, and is operated by Pacific Maritime
Agencies Limited of New Westminster, British
Columbia. The owners of the S.S. Alaska applied
for registration in the United States but were
refused, apparently on the ground that the ship
was of foreign construction. Because she is not of
American registry she cannot operate between one
American port and another. It is for this reason
that she chose to operate from New Westminster.
Her owners claim that because of undertakings to
the United States authorities it is not feasible to
register her in Canada. As a result of her opera-
tions the S.S. Alaska makes a significant contribu
tion to the economy of New Westminster.
The masters of the S.S. Alaska have been citi
zens of the United States with licences from the
U.S. Coast Guard and American pilotage certifi
cates issued by the State of Alaska. The deck
watch officers of the vessel have been Canadian
citizens or landed immigrants of Canada and have
held certificates of competency issued by the
Canadian Minister of Transport or recognized by
him for purposes of the Canada Shipping Act.
They have also held Liberian certificates. As a
condition of employment the deck watch officers
are required to have a minimum of eighteen
months' experience in the coastal trade.
The S.S. Alaska has always used pilots on the
Fraser River part of its voyages. At the very
beginning of its operations in 1964 it used pilots in
the open waters of the pilotage district for a short
time until it was judged capable, because of suf
ficiently qualified and experienced officers, to dis
pense with the use of pilots. It was required,
however, by the B.C. Pilotage Authority to pay
pilotage dues, which it did until the Pilotage Act
came into force, when the foundations were laid
for the issues in these appeals.
Early in 1972 the Pacific Pilotage Authority
advised the owners of the S.S. Alaska that she
would be required to carry pilots when proceeding
in a compulsory pilotage area. Regulations had not
yet been adopted pursuant to section 14 of the
Pilotage Act. The owners requested relief from
compulsory pilotage in the form of an exemption
or waiver. They claimed that the qualifications
and experience of their ship's personnel enabled it
to meet the requirement of safety in the Act.
There was subsequent exchange of correspondence
and meetings between representatives of the S.S.
Alaska and the Authority with a view to the
adoption of regulations that would afford the relief
sought. At one point the Authority suggested that
application be made for pilotage certificates for
the Canadian officers of the vessel. In view of the
possibility that they would be required to obtain
pilotage certificates the owners negotiated an
addendum in March 1972 to their collective agree
ment with the Canadian Merchant Service Guild,
which represented the deck watch officers, provid
ing that the Company could require the officers to
obtain such certificates and stipulating the remu
neration and other conditions that would govern
should the officers obtain and operate under pilot-
age certificates. Soon after the signature of this
addendum pressure was brought to bear by the
pilots within the Canadian Merchant Service
Guild, and a policy was adopted by the Guild that
no member would apply for a pilotage certificate.
Following a strike by the Canadian Merchant
Service Guild in November 1973 the pilotage cer
tificate addendum was dropped from the collective
agreement.
On March 17, 1972 the Authority advised the
owners of the S.S. Alaska that pending the adop
tion of pilotage regulations pursuant to section 14
of the Act the S.S. Alaska would be subject to the
system of compulsory payment of pilotage dues
rather than compulsory pilotage.
On January 2, 1973 the Authority gave notice in
the Canada Gazette of proposed pilotage Regula
tions to be made pursuant to section 14. Section 4
of the proposed Regulations provided for exemp
tion of certain classes of ships registered in
Canada or the United States. Section 5 provided
for waiver of compulsory pilotage in the discretion
of the Authority. There were various reactions to
the proposed Regulations from interested parties,
and on May 16 and 17, 1973 the Authority con
ducted a hearing at which submissions were
received. At this hearing counsel for Pacific Mari
time Agencies Limited appeared and read a writ
ten brief and made oral submissions with respect
to the case of the S.S. Alaska. Representatives of
the B.C. Coast Pilots Ltd., the pilots corporation
with which the Authority had an agreement for
the provision of pilotage services, and of the
Canadian Merchant Service Guild were also
present. They expressed themselves as strongly
opposed to exemption from compulsory pilotage
for foreign flag vessels and to the issue of pilotage
certificates. Counsel for the owners of the S.S.
Alaska contended that exemption for ships
engaged in the coastal trade should not be con-
fined to those of Canadian and American registry,
and that since the officers of the S.S. Alaska had
the same competence and experience it should
enjoy the same exemption. The representatives of
the S.S. Alaska conceded that pilotage certificates
might provide an acceptable solution to the prob
lem if they were readily available. By this time,
however, it must have been clear to all concerned
that it would not, as a practical matter, be possible
to obtain pilotage certificates for the officers of the
S.S. Alaska because of the policy of the Canadian
Merchant Service Guild.
A further hearing on the proposed pilotage
Regulations was held by the Authority on August
8, 1973. The proposed Regulations as revised fol
lowing the May hearing still confined exemption to
ships registered in Canada or the United States
and to those whose deck watch officers were the
holders of pilotage certificates. The owners of the
S.S. Alaska renewed their protest against the use
of the country of registration as a criterion for
exemption from compulsory pilotage. In effect, it
was the contention of the owners of the S.S.
Alaska that all vessels whose master and officers
have certain qualifications should be exempted,
regardless of country of registration. What was
sought was a wider class of exemption to include
all vessels engaged in the coastal trade whose
officers had the required qualifications and experi
ence. It was pointed out again that because of the
opposition to pilotage certificates by the B.C.
Coast Pilots Ltd. and the Canadian Merchant
Service Guild, the owners of the S.S. Alaska were
unlikely ever to be able to avail themselves of this
solution. At the hearing the representative of the
Canadian Merchant Service Guild reaffirmed the
opposition to pilotage certificates, justifying it in
part on grounds of "nationalism." A question also
arose at the hearing as to what disciplinary control
there would be over the officers of the S.S. Alaska
in the event of a casualty, if the ship were granted
an exemption, in view of the fact that they would
be operating under Liberian as well as Canadian
certificates of competency. After the hearing there
was an exchange of correspondence between Pacif
ic Maritime Agencies Limited and the Department
of Transport in an attempt to clarify this issue.
The opinion was expressed by an official in the
Department of Transport that the Canadian cer
tificates of competency could be the subject of
inquiry and disciplinary action by Canadian
authorities, and there could be a recommendation
for action by the Liberian authorities. What action
could be expected to be taken by the Liberian
authorities in such a case was not ascertained. A
copy of the reply received from the Department of
Transport on this question was forwarded to the
Authority.
In October, 1973 the Authority circulated a new
draft of the proposed pilotage Regulations, which
it said had been revised to reflect the submissions
at the hearings in May and August. The new
provisions respecting exemption and waiver still
did not cover the case of the S.S. Alaska. On
November 7, 1973 notice was given in the Canada
Gazette, as required by section 14(3) of the Act, of
those parts of the proposed Regulations authorized
by paragraphs (a) and (f) of section 14(1).
On November 30, 1973 the owners of the S.S.
Alaska gave notice of objection to the proposed
Regulations pursuant to section 14(4). The Minis
ter of Transport appointed Mr. John J. Mahoney,
Q.C. pursuant to section 14(5) to inquire into the
objections. Mr. Mahoney heard the interested par
ties and submitted his report to the Minister on
January 2, 1974. It dealt in considerable detail
with the submissions made on behalf of the owners
and operators of the S.S. Alaska. With respect to
a ship's registration as a criterion for the applica
tion of compulsory pilotage the report stated:
Mr. Hogarth, representing the owners and operators of the
Liberian registered S.S. "ALASKA", challenged the concept,
inherent in the Authority's draft Regulations, that only Canadi-
an and American registered ships should be exempt from
compulsory pilotage, and stated that, if the criterion was to be
safety of navigation, the foreign registration of the vessel had
no bearing on the matter. In the abstract Mr. Hogarth's
contention is true and indeed the legislation does not relate the
matter of the application of compulsory pilotage to the registra
tion of the ship. It does, however, restrict the granting of
pilotage certificates to Canadian citizens and landed immi
grants and in so doing recognizes the traditional view that the
officers of a foreign ship are not so likely to be familiar with the
pilotage waters of a particular country. This is not a matter of
flag discrimination but rather the establishment of a realistic
base for pilotage and as such is practised in all countries. The
fact is that the S.S. "ALASKA" represents a particular and
unique case and all parties to the Hearing were willing to
concede that this was so. The solution to that problem however,
does not, in my opinion, lie in a realignment of the basic
principles of the legislation or the traditional practices of
pilotage, by throwing open the possibility of exemption to ships
of all flags, but rather in finding a solution which meets the
needs of the particular case. The case of the S.S. "ALASKA" is
only unique because, although foreign registered, she is con
tinually engaged in trade within the region and is manned by
officers who are Canadian citizens and who would, in ordinary
circumstances, be eligible for pilotage certificates. The S.S.
"ALASKA" is thus the exception which tends to prove the rule.
Mr. Mahoney expressed the view that exemption
was properly confined to ships of Canadian regis
tration and that waiver was more appropriate for a
vessel in the position of the S.S. Alaska, as the
following extract from the report indicates:
I have said in an earlier section of this report that in my
opinion the true purpose of exemption, in the sense of the
non-applicability of the compulsory feature of Section 14,
subsection (1), paragraph (b) of the Act, is to grant relief to
vessels operating continuously, or almost so, within the region.
For this reason the definition of "coasting" should be somewhat
restricted as it is in the draft Regulations. That, except with
respect to its foreign registry, would seem to take into account
the case of the S.S. "ALASKA". At the same time the concept of
exemption implies a more permanent status than that of waiver
and is therefore more in accord with relief to National ships
than to foreign ships. For this reason the Authority has, and in
my opinion rightly so, elected to waive pilotage for American
registered coasting ships rather than to exempt them. That
being the case it would hardly be appropriate to grant the
(apparently) more permanent status of exemption to a foreign
flag ship, notwithstanding that she is manned by Canadian
officers. If therefore some relief from the pilotage provisions
are appropriate for the S.S. "ALASKA" that relief should come
under the heading of waiver rather than exemption, leaving
aside for the moment the question of pilotage certificates.
He expressed the opinion that the proper solution
to the problem of the S.S. Alaska would be the
issue of pilotage certificates to its deck watch
officers, but that this was not a practical alterna
tive because of the strong opposition to pilotage
certificates. On this point he said:
... it should be noted that the attitude of the Pilotage Author
ity, the British Columbia Coast Pilots and the representatives
of the Merchant Service Guild and Fraser River Pilots toward
the matter of pilotage certificates for deck officers was clearly
reflected in the argument put forward. There is no question but
what the issuance of pilotage certificates on this Coast is
seriously opposed by all the parties mentioned. This opposition
has to some degree coloured the content of both the Gazetted
Regulations and the draft Regulations of the Authority to the
extent that a greater emphasis is placed on matters of exemp
tion and waiver than should perhaps be the case. There is no
doubt, for example, that the proper solution to the case of the
S.S. "ALASKA" would be in the issuing of pilotage certificates to
the deck officers of this ship. It is equally clear that none of the
parties have the intention that this will happen. To the degree
that this is so the obvious intention of The Pilotage Act is
frustrated. At the same time the realities of the situation must
be taken into account. Co-operation of parties cannot be legis
lated and the legislation itself, as it is now established, does not
grant a clear and well defined right to such certificates.
The report expressed approval of a provision for
waiver suggested by the owners and operators of
the S.S. Alaska and contained the following con
clusion with respect to the S.S. Alaska:
It is in the public interest of Canada that a ship performing the
service now performed by the S.S. "ALASKA" should, in the
absence of the availability of pilotage certificates of her
Canadian deck officers, be granted a waiver from compulsory
pilotage. The Regulations should contain provisions for such
waiver before approval for them is given.
On January 11, 1974 officials in the Depart
ment of Transport submitted to the Authority a
revised draft of proposed pilotage Regulations for
consideration by the Authority. It is to be noted
that the proposed exemption provisions appear to
have turned to some extent on country of registra
tion in addition to other factors, but the proposed
section on waiver contained the following provision
that would permit a waiver to be granted to the
S.S. Alaska:
5. (1) The Authority may waive compulsory pilotage in
respect of
(f) any ship, other than a ship referred to in paragraphs (a)
to (e), that has been employed on a regular basis in the
coastal trade, the master or deck watch officers of which
(i) are duly licensed as such for that ship,
(ii) are holders of valid certificates of competency duly
recognized by the Minister, and
(iii) have been regularly employed as such on a ship in the
coastal trade during the eighteen months prior to the date
that the ship is being considered for waiver under this
subsection.
The Authority was advised at this meeting that
the existing Regulations would not be continued in
force beyond February 1st of that year, and it was
urged to give early consideration and approval to
the proposed draft. After consideration and further
meetings, the Regulations proposed by the Depart
mental officials were rejected by the Authority on
the ground that under them the Authority could
not administer an efficient pilotage service within
the region. The minutes of a meeting of January
14, 1974 also record as a reason "that it would be
most difficult to negotiate a contract with the B.C.
Coast Pilots Ltd. under the new regulations."
Despite representations by the Minister of Trans
port this decision was reaffirmed.
On January 23, 1974 the Minister of Transport,
acting pursuant to section 14(7) of the Act,
ordered that those parts of the proposed Regula
tions authorized by paragraphs (a) and (I) of
section 14(1) be amended by the Authority in
accordance with the Mahoney report, and recom
mended that the Authority seriously consider
amending the other parts of the proposed Regula
tions in accordance with the report. At a meeting
on January 29, 1974 the Authority complied with
the Minister's order but declined to follow his
recommendation.
An official in the Department of Transport testi
fied on discovery that the Government was obliged
to approve the Pacific Pilotage Regulations in the
form proposed by the Authority because it could
not continue to run the risk of having no regula
tions at all in the Pacific region after the existing
Regulations had ceased to be in force on February
1st. In fact, the new Regulations were not
approved until April 9, 1974.
Section 9 of the Regulations, under the heading
"Ships Subject to Compulsory Pilotage", and sec
tion 10, under the heading "Waiver of Compulsory
Pilotage", are as follows:
9. (1) Subject to subsection (2), every ship that is
(a) over 350 gross tons,
(b) a tug, where the combined tonnage of that tug and its
tow exceeds 350 gross tons, or
(c) a pleasure yacht of over 250 gross tons
is subject to compulsory pilotage.
(2) Subsection (1) does not apply to a ship that is
(a) registered in Canada and is
(i) owned by Her Majesty in right of Canada and is not
engaged in commercial trade,
(ii) employed in the fishing trade, or
(iii) employed in voyages in the region or between any
place in the region and any place on the West Coast of the
United States not south of San Francisco and not west of
Cook Inlet in Alaska, if the master or deck watch officer
of that ship holds a certificate of competency of the proper
grade and class issued by the Minister of Transport or
recognized by him for the purpose of subsection 130 (1) of
the Canada Shipping Act and the master or deck watch
officer has been regularly employed as such on a ship
employed in voyages between the places described in this
subparagraph during the eighteen months prior to the date
that the ship is being considered for exemption under this
subsection; or
(b) registered in the United States and employed in the
fishing trade.
(3) The master or deck watch officer referred to in subpara-
graph (2)(a)(iii) shall, if required by the Authority, produce
evidence satisfactory to the Authority that he is a master or
deck watch officer as described in that subparagraph.
10. (1) The Authority may, on application therefor, waive
compulsory pilotage in respect of a ship where
(a) the ship is registered in the United States and employed
in the coastal trade, and the master or deck watch officer
thereof is duly licensed as such for that ship and has been
regularly employed as such on a ship in the coastal trade
during the eighteen months prior to the date that the ship is
being considered for the waiver under this section;
(b) the master, owner or agent thereof has complied with the
sections 12 and 13 and no licensed pilot is available to
perform pilotage duties on that ship; or
(c) the ship is in distress or engaged in rescue or salvage
operations.
(2) Compulsory pilotage is waived in respect of a ship that is
(a) entering a compulsory pilotage area for the purpose of
embarking a licensed pilot, until the ship reaches the place
arranged for embarkation; or
(b) departing from a compulsory pilotage area after it has
disembarked a licensed pilot in the course of its departure.
(3) The master or deck watch officer referred to in para
graph (1)(a) shall, if required by the Authority, produce evi
dence satisfactory to the Authority that he is a master or deck
watch officer as described in that paragraph.
(4) An application for a waiver of compulsory pilotage may
be made verbally or, when required by the Authority, shall be
made in writing.
In September 1976 the owners and operators of
the S.S. Alaska brought an action for declaratory
relief against the Authority praying for a declara
tion that the Pacific Pilotage Regulations as a
whole are ultra vires, and alternatively, for a
declaration that section 9(2)(a)(iii) and section
10(1)(a) of the Regulations are ultra vires. The
statement of claim alleges that the Regulations
discriminate against the S.S. Alaska in favour of
ships of Canadian and American registry; that
such discrimination is not in the interests of safety;
and that the Regulations were not made by the
Authority in good faith but to "accommodate pres
sure brought upon the Defendant, Pacific Pilotage
Authority by the Canadian Merchant Service
Guild in order to establish and maintain the
employment of pilots upon the said `S.S. Alaska'
when same were not necessary in the interests of a
safe and efficient pilotage service within the
regions set out in respect of the Authority in the
`Pilotage Act'." The statement of claim further
alleges that the three pilot members of the Author
ity when the pilotage Regulations were being con-
sidered—Robert R. McLeese, Richard W. Bur-
nett, and John B. Cook—were shareholders and
members of B.C. Coast Pilots Ltd., with whom the
Authority had or was negotiating an agreement for
the provision of pilotage services, and that the said
members stood to gain financially, directly or in
directly, by restricting the classes of vessels to be
exempted from compulsory pilotage and by the
attitude of the Canadian Merchant Service Guild
toward pilotage certificates. It is contended that
the Authority was exercising a function that was
governed by the rules of natural justice, and that
the pilotage Regulations are ultra vires by virtue
of the participation of the pilot members of the
Authority.
In its defence the Authority took the position
that it had adopted in the discussions leading up to
the adoption of the Regulations—that the proper
recourse for the owners and operators of the S.S.
Alaska was to have its deck watch officers apply
for pilotage certificates. With respect to the prob
lem created by the policy of the Canadian Mer
chant Service Guild it said: "The question of
whether the Canadian deck officers who are Guild
members and who are employed aboard the S.S.
"ALASKA" will or will not apply for pilotage cer
tificates pursuant to the Pilotage Act and Regula
tions is not a matter within the control of the
Authority, nor is it an appropriate subject for
litigation in this action; rather, it is a matter for
negotiation between the Plaintiffs as employers,
and the said Guild as bargaining agent for such of
their employees as may be Canadian deck officers
on the s.s. `ALASKA'." The Authority denied that
in adopting the Regulations it was motivated by
considerations foreign to the purposes of the Act.
It contended further that to hold the pilot mem
bers of the Authority disqualified from participa
tion in the making of the Regulations would be
contrary to principle.
The Trial Division held that the inclusion of the
words "registered in Canada" and "registered in
the United States" in sections 9 and 10 respective
ly of the Regulations was beyond the authority
conferred by section 14 of the Act, but that it was
sufficient for purposes of the case to confine the
declaration of ultra vires to section 9(2)(a) of the
Regulations. These conclusions are contained in
the following passages of the reasons for judgment
[at pages 429-430]:
In my view, firstly, prescribing the flag of a ship as a
condition respectively of exemption and of waiver from compul
sory pilotage in the said sections 9 and 10 of the Regulations
(Exhibit P-1) is not an enactment by the Authority within the
perimeters of the enabling powers contained in section 14(1)(b)
and (c) of the Pilotage Act and also such do not have as their
object the public purpose of safety which is mandatory by the
provisions of section 12 of the Act, and the inclusion respective
ly of the words "registered in Canada" and "registered in the
United States" is ultra vires the power of the Pacific Pilotage
Authority.
Secondly, from the whole of the evidence, it is a finding of
fact that the Pacific Pilotage Authority, probably as a result of
representations of the three pilot members, was motivated in
including the said words prescribing the flag of the ship in
sections 9 and 10 of these Regulations so as to make it
impossible for the S.S. Alaska to be exempted from compulso
ry pilotage by way of exemption or waiver; and in being
motivated to do so, the Authority had, at the same time, the
knowledge that for all practical purposes, the other method of
exemption contemplated in the Pilotage Act, namely, the pilot-
age certificate route, was not available to this ship. Their
motivation also in drafting and passing the Regulations in so
far as including these said words, had nothing whatever to do
with safety which was the public purpose of the Regulations,
mandatory by section 12 of the Act.
Because of these two findings, the inclusion of these words in
sections 9 and 10 of the said Regulations was ultra vires the
power of the Authority.
The fact that these Regulations as passed by the Authority
were approved by the Governor in Council does not cure such
invalidity.
The Pacific Pilotage Authority in drafting the parts of these
Regulations in such ultra vires way with the knowledge regard
ing the improbability of the issuance of pilotage certificates,
effectively has frustrated the intention of Parliament when it
enacted the Pilotage Act that there should be exemption from
compulsory pilotage for ships in circumstances where no issue
of the public interest of safety was involved.
For the purpose of this action, however, it is only necessary
to find and I so order and declare that the legislative act
whereby the words "registered in Canada" were included in
section 9(2)(a) of the Regulations (Exhibit P-1) was ultra vires
the power of the Pacific Pilotage Authority and that these said
words be deleted.
The declaration of ultra vires in the judgment
was as follows:
That the legislative act of the Pacific Pilotage Authority where
by the words "registered in Canada" were included in para
graph 9(2)(a) of the Pacific Pilotage Regulations passed pursu
ant to the Pilotage Act approved by PC 1974-851 on April 9,
1974 and registered SOR/74-242 on April 10, 1974 was ultra
vires the power of the Pacific Pilotage Authority and these
words be and they are deleted from the said Regulations.
In effect, the Trial Division treated the words
"registered in Canada" as severable from the rest
of section 9(2)(a) with the result that section
9(2)(a)(iii) would remain in a form that would
permit the S.S. Alaska to be exempted from com
pulsory pilotage.
The judgment contained the following addition
al declarations:
2. That the pilot members of the Pacific Pilotage Authority had
a conflict of interest in the true equitable sense in participat
ing in drafting and passing the said Regulations, and did not
purge themselves of such conflict of interest at any relevant
time.
3. That the motivation of the Pacific Pilotage Authority in
passing the said Regulations, having included the said words
prescribing the flag of a ship in paragraphs 9 and 10 thereof
as a condition of exemption or waiver was not for the public
purpose of safety within the meaning and objects of section
12 of the Pilotage Act, but instead the motivation was to
assist in obtaining personal pecuniary benefit for the pilot
members of the Pacific Pilotage Authority and the other
pilots in the region.
4. That the S.S. ALASKA at all material times in its run from
Sand Heads to Pine Island in part of the compulsory pilotage
area of the Pacific region, with its complement of deck
officers, without a pilot aboard employed by the Pacific
Pilotage Authority, posed no threat to safety within the
meaning of section 12 of the Pilotage Act.
5. That the Pacific Pilotage Authority in passing the said
Regulations, and having included therein respectively in
paragraphs 9 (2) (a) and 10 (1) (a) the words "registered in
Canada" and "registered in the United States" have frustrat
ed the intent of Parliament that certain ships which posed no
safety threat to navigation within the meaning of section 12
of the Pilotage Act should be excused from compulsory
pilotage by the methods of exemption or waiver prescribed in
the Pilotage Act.
The attack on the Pacific Pilotage Regulations
by the respondents is directed essentially at section
9(2)(a)(iii) and section 10(1)(a), which they claim
discriminate against them on a basis not author
ized by the Pilotage Act because they restrict
exemption from or waiver of compulsory pilotage,
in the case of ships operating in the coastal trade
with masters and deck watch officers having essen
tially the same qualifications and experience as
those of the S.S. Alaska, to ships of Canadian or
American registry. The first issue raised by the
appeal from the judgment granting declaratory
relief may thus be said to be whether the Pilotage
Act authorizes the use of a ship's country of
registration as a condition of exemption from com
pulsory pilotage in section 9(2)(a)(iii) of the
Regulations and as a condition of waiver in section
10(1) (a).
Section 14 of the Pilotage Act, which was
quoted earlier in these reasons, empowers an Au
thority to make regulations "necessary for the
attainment of its objects." Section 12, to which
reference has also been made, declares that the
objects of an Authority are "to establish, operate,
maintain and administer in the interests of safety
an efficient pilotage service within the region set
out in respect of the Authority in the Schedule."
Regulations prescribing the ships or classes of
ships that are subject to compulsory pilotage and
prescribing the circumstances under which com
pulsory pilotage may be waived are clearly indicat
ed by the legislation to be necessary for the attain
ment of these objects, but they must in their actual
content be related to the objects. Section 14 cannot
be construed to have conferred a discretionary
authority to classify ships for purposes of compul
sory pilotage upon any basis whatever. What then
are the relevant criteria for classification as
indicated by the objects set forth in section 12?
It is to be noted, first, that the Authority is
charged with an operating as well as a regulatory
responsibility. It is to establish and operate an
efficient pilotage service. This it may do, as
indicated by section 9, by employing licensed pilots
or by contracting with a pilots corporation for the
provision of pilot services. The latter course is the
one that must be followed by an Authority under
the Act where the pilots in a pilotage area elect not
to be employed by an Authority but rather to form
themselves into a corporation. In such a case an
Authority must deal with the corporation and only
with the corporation. It may be likened to a kind
of collective bargaining. This is the position that
the Pacific Pilotage Authority is in, obliged by law
to contract with the B.C. Coast Pilots Ltd. for the
maintenance of an efficient pilotage service in the
Pacific pilotage area. It is in this perspective, I
think, that one must see the concern that is reflect
ed from time to time in the record as to the
implications of particular regulations for the con
tractual relations between the Authority and the
pilots corporation. In addition to one of the reasons
given for rejection of the draft Regulations pro
posed by the federal authorities, to which refer
ence has already been made, one may note an
internal communication from one of the pilot
members of the Authority to the Chairman on
March 4, 1972, in which it was said, "How will the
Pilots Committee react when they learn that you
intend to hold an examination that is not in
accordance with our recent agreement with them
to hold an examination under existing by-laws?
The introduction of Pilotage Certificates could
surely be construed as a breach of our agreement,
since it will immediately result in a loss of revenue
to the Pilots. Food for thought!!" Clause 9 of the
agreement dated as of February 1, 1975 between
the Authority and the pilots corporation provides
for a guarantee of income to the corporation as
follows:
9. If the amount paid by the Authority to the Company for
pilots' services pursuant to this Agreement during any year of
this Agreement is less than 75% of the amount paid to the
Company in the immediately preceding year (or, in the case of
the first year of this Agreement, less than 75% of the aggregate
amount paid to the pilots in the Region for pilots' services in
the immediately preceding year) as a result of loss of revenue
which would otherwise have been earned in the Region result
ing from waivers of compulsory pilotage and/or the issuance of
pilotage certificates and/or the exemption of vessels from com
pulsory pilotage and/or alterations to the boundaries of pilot-
age areas, the Authority agrees to make good this loss of
revenue in full from any one or more or all of these sources up
to the said level of 75%.
There is no doubt that the Authority has been
placed in a difficult position by the legislation. It
would probably have been preferable to separate
the regulatory authority and the operating respon
sibility. But that difficulty, while it may justify
casting a less sinister light on the Authority's
motivation, must not be permitted to distort the
construction of section 12 of the Act. Safety of
navigation is to be promoted by an efficient pilot-
age service, and the Authority must necessarily be
concerned with all the factors that bear on effi
ciency, including such terms and conditions of
employment or service as will attract and retain
qualified pilots. But what the Authority does must
be done in the final analysis in the interest of
safety. The Authority must discharge its operating
responsibility within the framework of a pilotage
system that is directed to safety. Compulsory pilot-
age is to be imposed in the interest of safety and
not in some other interest, such as the total income
to be derived by pilots. The question of income,
vital as it is, is to be dealt with by suitable tariffs
and possibly other measures of financial provision.
Country of registration will, therefore, be a rele
vant criterion for the application of compulsory
pilotage in so far as it may be said to relate in a
particular context to safety. The record contains
various expressions of opinion as to whether, as a
matter of fact, ship's flag is relevant to safety, but
the precise context in which these opinions are
expressed is not clear. For example, Captain Dus-
sault, of the Department of Transport, appears in
his testimony on discovery to have been chiefly
concerned with the principle that exceptions to the
compulsory use of licensed pilots should be by the
issue of pilotage certificates rather than by general
exemption based on flag or trade. Despite the
views expressed by Captain Dussault it may be
noted that the draft Regulations presented by him
and Mr. O'Neil on behalf of the Department of
Transport made the application of compulsory
pilotage turn to some extent on country of registra
tion. Mr. Fenwick, a marine surveyor, was speak
ing primarily with reference to classification of
ships from the point of view of seaworthiness. On
the other hand, Mr. Mahoney expressed the view
that ship's flag or nationality was a traditional
basis for limiting general exemptions from compul
sory pilotage. In the final analysis this is not a
question to be determined on the basis of expert
opinion but is rather one that is a matter of
construction for the Court, taking judicial notice
of what it may perceive from shipping regulation
to be the regulatory implications of nationality.
Counsel for the Authority laid considerable
emphasis on the fact that under the pilotage provi
sions of the Canada Shipping Act country of regis
tration was one of the criteria for exemption from
compulsory payment of pilotage dues. He argued
from the transitional provisions of the Pilotage
Act, which in several respects continued features
of the previous system in force pending the making
of regulations under the new Act, that the use of
country of registration as a criterion for the
application of compulsory pilotage must have been
considered by Parliament to be consonant with the
purpose and principles of the new legislation. He
also pointed out that not only did the Governor in
Council approve section 9 of the Pacific Pilotage
Regulations but he also approved the Regulations
of the other three Pilotage Authorities—Great
Lakes, Laurentian, and Atlantic—all of which
make the application of compulsory pilotage turn
to some extent on country of registration. This
cannot be determinative but it is certainly a reason
for approaching the question of ultra vires with
some caution. Whatever may have been the princi
ples underlying the previous system of compulsory
payment of pilotage dues, which appears to have
been to some extent a system of taxation for the
support of a pilotage service whether a particular
vessel required it or not, I am of the opinion, in
view of the terms of section 12 of the Act, that the
use of country of registration as a criterion for the
application of compulsory pilotage must now be
related to safety and not to financial or economic
considerations.
While safety is best assured by actual verifica
tion and certification of an officer's competency
for the conduct of a vessel in a particular pilotage
area, I am of the view that country of registration
or ship's flag cannot be said, as a matter of
principle, to be wholly irrelevant to the question of
safety of navigation as it is affected by the conduct
of the vessel. Apart from such factors as size,
manoeuvrability and navigational aids—factors
related to the physical characteristics of a ship and
its equipment—the essential factors bearing on
safety of navigation, in so far as the conduct of the
vessel is concerned, are the competency of the
master or officer who has the conduct of the vessel
and his knowledge of the local waters. Country of
registration may raise a presumption of competen
cy and knowledge of local waters. It may not be a
sufficient criterion by itself but it cannot be said to
be wholly irrelevant to the question of safety.
On the other hand, I am of the opinion that in
the context of section 9(2)(a)(iii) of the Regula
tions country of registration is not relevant to the
question of safety. Since the requirement of safety
is assured by the other conditions specified therein
concerning the competency of the master or deck
watch officer and his experience with local waters,
country of registration is a superfluous require
ment and can only be there to serve some other
purpose not authorized by the Act. It was common
ground that apart from the country of registration
the S.S. Alaska fell squarely within the conditions
of this exception to compulsory pilotage. I agree
with the contention of the owners and operators of
the vessel that this provision discriminates against
them on a ground that, in that particular context,
is not authorized by the Act. The same can be
said, I think of section 10(1)(a) of the Regulations
with respect to waiver. There the reference to
American registration may serve to indicate the
nature of the certificate of competency that is
required, but I think the same principle applies.
Where the conditions of waiver are spelled out in
terms of specific competency and experience with
the local waters, country of registration is
irrelevant.
I have considered whether, because of the issue
concerning disciplinary action with respect to cer
tificates of competency that was raised in the
hearings, country of registration in the context of
section 9(2)(a)(iii) and section 10(1)(a) offers an
additional measure of control that can be justified
on the ground of safety. I do not see how a
persuasive case can be made for its relevance on
this basis. It appears to be quite clear that in the
case of section 9(2)(a)(iii) a Canadian certificate
of competency or a certificate recognized by the
Minister of Transport as its equivalent under sec
tion 130 of the Canada Shipping Act would be
subject to suspension or cancellation by the
Canadian authorities, and there would thus be the
removal, in so far as the particular officer was
concerned, of an essential condition of the entitle
ment to exemption. In the case of section 10(1)(a),
which requires the master or deck watch officer to
be duly licensed for a ship registered in the United
States, there is no question of control exercisable
by the Canadian authorities.
I am not prepared to find, however, that country
of registration is irrelevant to safety in the context
of the exemption created in section 9(2) of the
Regulations in favour of ships employed in the
fishing trade. For this reason I am unable to agree
with the conclusion of the learned Trial Judge that
the words "registered in Canada" should be read
out of section 9(2)(a) as a whole. I have a further
difficulty with his conclusion, and that is on the
question of severability. Having come to the con
clusion he did and for the reasons he did, the Trial
Judge cut down section 9(2)(a)(iii) of the Regula
tions to the extent required to enable the S.S.
Alaska to qualify for exemption. While this may
appear as an eminently practical solution to the
problem, I do not, with respect, see how it can be
fairly sustained in law. There have been many
judicial expressions of the test of severability but
one that may be cited as having particular author
ity is that of Viscount Simon, speaking on behalf
of the Privy Council in Attorney-General for
Alberta v. Attorney-General for Canada [1947]
A.C. 503, at p. 518: "The real question is whether
what remains is so inextricably bound up with the
part declared invalid that what remains cannot
independently survive or, as it has sometimes been
put, whether on a fair review of the whole matter
it can be assumed that the legislature would have
enacted what survives without enacting the part
that is ultra vires at all." Viscount Simon was
speaking there of a statute but the same principle
applies to regulations made under statutory au
thority. Severance must not be used to circumvent
or frustrate the intention of the legislative author
ity. In the light of what we know about the adop
tion of these Regulations I cannot see how it can
reasonably be assumed that the Authority would
have enacted subparagraph (iii) of section 9(2)(a)
without the words "registered in Canada" to
restrict its application. I therefore think the sub-
paragraph must fall as whole although this may
not serve the purposes of the respondents. I am of
the same opinion concerning section 10(1)(a).
These provisions, which attempt to confine exemp
tion and waiver for a reason not related in that
context to safety, are bad as a whole. Accordingly
I would declare subparagraph (iii) of section
9(2)(a) and section 10(1)(a) of the Regulations to
be ultra vires the Pacific Pilotage Authority. In
my opinion the whole question of exemption or
waiver for vessels whose masters or deck watch
officers have the competency and knowledge of
local waters of those of the S.S. Alaska have been
dealt with on a wrong basis in law and should be
reconsidered.
The respondents ask alternatively that if the
limited declaration of ultra vires of the Trial
Division is not sustained, the Pacific Pilotage
Regulations be declared ultra vires in their entire
ty. I can see no basis on which the Regulations as
a whole can be held to be ultra vires. Various
grounds of attack were urged against the Regula
tions as a whole. In my opinion they must all fail.
It is sufficient to make brief observations concern
ing them.
It was urged that the Regulations as a whole
were void because of the participation of the active
pilot members of the Authority. This ground of
attack, as I understood it, was put upon two bases:
firstly, that even if the act of making regulations in
this case be regarded as an act of a legislative
nature, the pilot members of the Authority had a
conflict of interest which not only disqualified
them from participation in the making of the
Regulations but rendered the Regulations void;
and, secondly, that because of the issue created by
the case of the S.S. Alaska, the making of the
Regulations and the proceedings leading up to
their adoption took on the character of a quasi-
judicial function, which was vitiated by a reason
able apprehension of bias arising from the partici
pation of the pilot members. There is in my view
no merit in these contentions. The members of the
Authority were appointed by the Governor in
Council pursuant to section 3 of the Pilotage Act,
which contains no restriction or qualification con
cerning occupation or interest, nor a stipulation
that a member must serve full-time. At least one
member of the Authority, D. M. MacKay, was
president of a shipping company and presumably
representative of shipping interests. Because the
Authority is an operating as well as a regulatory
organism it may well have been considered advis
able that it should have a composition representa
tive of the various interests involved. Where as
here, the alleged conflict of interest or ground of
bias arises from the occupation of the member it is
inherent in the appointment itself and cannot in
my opinion be a disqualification from acting. It
amounts to a statutorily authorized interest in so
far as the statute is to be construed as authorizing
such an appointment. The attack is really an
attack on the appointment itself. The effect of it, if
well founded, would be to prevent the member
from acting at all, since not only the Regulations
in their entirety but every act of their administra
tion or application may be considered to have some
effect, however indirect, on the income of pilots. I
do not find it necessary to consider how far the
doctrine of disqualifying conflict of interest that
applies to the acts of elective municipal officials is
applicable to the making of statutory regulations,
particularly where they are to be approved by the
Governor in Council. I doubt if there is any foun
dation for a conclusion that such a conflict would
automatically give rise to disqualification or nulli-
ty in the absence of proof that the Regulations
were in fact made for a purpose other than that
authorized by the governing statute. As for reason
able apprehension of bias, the function of making
the Regulations, which was essentially a legislative
function, did not in my opinion become a judicial
or quasi-judicial function by reason of the particu
lar problem or issue presented by the S.S. Alaska
and the manner in which that problem was permit
ted by the Authority to be considered at hearings
and in other situations in which the owners and
operators of the ship were offered an opportunity
to express their views. The Authority was not
required by the Pilotage Act or any Rules or
Regulations made thereunder, nor by common law
principles, to hear anyone whose interests might be
affected by the proposed Regulations. No doubt it
was good practice to do so, but the nature of the
regulation-making function could not be affected
by the procedure which the Authority adopted
voluntarily and under no compulsion of law. In the
absence of proof that the Authority did adopt the
Pacific Pilotage Regulations as a whole for a
purpose other than that for which the regulation-
making authority was conferred, the possible inter
est of the active pilot members arising from their
membership in the B.C. Coast Pilots Ltd. and the
Canadian Merchant Service Guild cannot affect
the validity of the Regulations.
The Trial Judge found as a fact that in confin
ing exemption and waiver in sections 9 and 10 of
the Regulations to ships registered in Canada and
the United States the Authority was motivated by
considerations foreign to the purposes of the Act.
This was an additional ground, or possibly another
expression of the same ground, for holding sections
9(2)(a) and 10(1)(a) ultra vires. Once it has been
found that the use of the country of registration as
an additional condition in the particular context of
section 9(2)(a)(iii) and section 10(1)(a) of the
Regulations is not authorized by the Act, it is not
important how one characterizes the consider-
ations or motivations that lay behind its use. This
particular finding by the Trial Judge was not
directed to the validity of the Regulations as a
whole. In my opinion the evidence would not sup
port such a conclusion.
There is a strong implication in the reasons of
the Trial Division that the Authority acted in bad
faith in refusing to make provision in the Regula
tions to cover the case of the S.S. Alaska by
exemption or waiver but again this is directed to
the validity of sections 9(2)(a) and 10(1)(a) of the
Regulations and not to the validity of the Regula
tions as a whole. I may further say that I do not
think the evidence supports a finding that the
Authority acted with malice toward the owners
and operators of the S.S. Alaska or wilfully and
knowingly exercised its powers with the purpose of
inflicting injury upon them. The implication of bad
faith would appear to have been based on the
repeated contention of the Authority that the solu
tion to the problem of S.S. Alaska was to obtain
pilotage certificates for its deck watch officers
when it had reason to know that the policy of the
Canadian Merchant Service Guild made it un
likely that the officers could be induced to apply
for such certificates. This raises the question of the
relevance of the attitude of the Guild.
The opposition of the Canadian Merchant Ser
vice Guild to pilotage certificates, whatever other
recourse it might give rise to, cannot in my opinion
affect the validity of the Regulations. Pilotage
certificates are expressly provided for by the Pilot-
age Act. The Regulations respecting pilotage cer
tificates give effect to that statutory provision. The
provision for pilotage certificates is an essential
feature of the statute and Regulations which the
Authority is duly bound to respect and apply and
not to treat as rendered nugatory by the attitude of
the Canadian Merchant Service Guild. I believe
the Authority was correct in its contention that it
could not exercise its power to provide for exemp
tion and waiver on the assumption that it would
not be possible, as a practical matter, to obtain
pilotage certificates. The regulations must be
made on the assumption that they will be permit
ted to operate. The complaint in this case is that,
knowing that it would be practically impossible to
obtain pilotage certificates, the Authority did not
see fit to create an exemption or waiver in terms
that would cover the case of the S.S. Alaska. The
Authority was not under a duty in the circum
stances to create a class of exemption or waiver of
this scope. Its refusal to do so cannot be said to
amount to bad faith. It was free to rely to any
extent it saw fit on the requirement of pilotage
certificates. What it was not entitled to do, as I
have said, was to attempt to limit a proposed
category of exemption or waiver by a criterion
irrelevant to safety. As I read the Act, it is not the
duty of the Authority to ascertain whether particu
lar ships should enjoy exemption or waiver,
because as a matter of fact they do not with the
particular qualifications and experience of their
officers present a danger to safe navigation. The
duty of the Authority is to establish an efficient
pilotage system for the attainment of safety. The
danger to safety is presented by the particular
waters of the pilotage area. The Authority may
well choose as an efficient approach to the control
that must be exercised in the interests of safety to
make all vessels of a certain size or character
subject to compulsory pilotage, with the only
exception to the use of a licensed pilot being the
provision for pilotage certificates. I cannot see how
such an approach could be said to be an ultra vires
exercise of its regulatory authority. In .order to
maintain a proper perspective on this case I think
it is essential to keep in view that the Authority
did not have a duty to create an exemption or
waiver for the S.S. Alaska in order to meet the
particular problem created by the policy of the
Canadian Merchant Service Guild.
For these reasons I am of the opinion that there
is no basis in the conduct of the Authority or any
of its members for holding that the Pacific Pilot-
age Regulations as a whole are ultra vires.
I would dismiss the appeal, but rendering the
judgment that should be rendered in the circum
stances, I would declare subparagraph (iii) of sec-
tion 9(2)(a) and paragraph (a) of section 10(1) of
the Pacific Pilotage Regulations ultra vires the
Authority.
I turn now to appeal A-597-77 against the judg
ment dismissing the claim of the Pacific Pilotage
Authority for pilotage dues for the period Febru-
ary 1, 1974 to April 30, 1974. The Authority has
abandoned its claim for the period February 1,
1974 to April 9, 1974 since it concedes that there
were no pilotage regulations in force during this
period on which to base a claim for pilotage dues.
The appeal is accordingly for the sum of $3,594.04
for the period April 10 to 30. The Trial Division
dismissed the claim for so much as applied to this
period as a consequence of the necessary effect of
its declaration of ultra vires—that the S.S. Alaska
would fall within the exemption in section
9(2)(a)(iii). The opposite result flows from the
conclusion to which I have come on the question of
validity: since section 9(2)(a)(iii) must fall as a
whole, the S.S. Alaska was subject to compulsory
pilotage for the period April 10, 1974 to April 30,
1974. The appeal must therefore be allowed and
the claim of the Authority maintained for the sum
of $3,594.04.
It is necessary now to consider appeal A-623-77
against the judgment dismissing the appellants'
counterclaim for repayment of $74,247.66, being
pilotage dues for the period February 1, 1972 to
February 1, 1974 allegedly paid under mutual
mistake of law but as a result of compulsion so as
to bring the claim within the principle affirmed in
Eadie v. The Corporation of the Township of
Brantford [1967] S.C.R. 573. The issue is whether
the payment of pilotage dues was compulsory
during this period in what was formerly the Pilot-
age.'District of British Columbia, established under
the provisions of the Canada Shipping Act. This
issue turns on the effect to be given to an Order in
Council of 1929 and subsequent provisions in the
pilotage by-laws of the district, to which reference
was made at the beginning of these reasons.
Section 412 of the Canada Shipping Act, R.S.C.
1927, c. 186 provided that "The Governor in
Council may, from time to time, make the pay
ment of pilotage dues compulsory or not compulso
ry within the limits of any pilotage district fixed by
the Governor in Council under this Part." Pursu
ant to this section the Governor in Council by
Order in Council P.C. 493 of March 22, 1929,
which established the Pilotage District of British
Columbia, ordered "That under the provisions of
Section 412 of the said Act, the payment of pilot-
age dues within the said Pilotage District of Brit-
ish Columbia be not compulsory."
Section 316 of the Canada Shipping Act, 1934
(S.C. 1934, c. 44) was in essentially the same
terms as section 412 of chapter 186 of the Revised
Statutes of 1927 referred to above. Section 319 of
the Act of 1934 provided that "Subject to the
provisions of this Part of this Act, or of any Act
for the time being in force in its pilotage district,
every pilotage authority shall, within its district,
have power, from time to time, by by-law con
firmed by the Governor in Council, to ...", and
there then followed a long list of subject matters
which need not be quoted here, but which, it may
be safely said, did not include a provision that the
payment of pilotage dues should be compulsory or
not compulsory in the district. Notwithstanding
the limitations of the power to make by-laws con
ferred by section 319, the Minister of Transport,
as Pilotage Authority for the Pilotage District of
British Columbia, by by-law made on March 12,
1949, amended the Pilotage By-laws of the District
so as to provide in section 3 for the compulsory
payment of pilotage dues. The By-law was con
firmed by the Governor in Council with express
reference to this provision, and purportedly pursu
ant to section 319 of the Act of 1934, on April 14,
1949 (P.C. 1618) [SOR/49-137]. A provision for
compulsory payment of pilotage dues in the Pilot-
age District of British Columbia was re-enacted in
section 6 of the British Columbia Pilotage District
General By-law made by the Minister of Trans
port pursuant to section 329 of the Canada Ship
ping Act, R.S.C. 1952, c. 29 on May 25, 1965 and
confirmed by the Governor in Council pursuant to
the same section on June 10, 1965 (P.C. 1965-
1084) [SOR/65-241]. Section 329 was in the same
terms as section 319 of the Act of 1934. The
express power conferred on the Governor in Coun
cil by section 412 of the Canada Shipping Act,
R.S.C. 1927, c. 186 and by section 316 of the Act
of 1934 was found in section 326 of chapter 29 of
the Revised Statutes of 1952.
I conclude from these provisions that a pilotage
authority did not have power under the Canada
Shipping Act to provide by by-law for the compul
sory payment of pilotage dues, and that the confir
mation of the by-law by the Governor in Council
could not make valid what was in its origin invalid.
But that does not end the question. It is necessary
to consider the effect of the transitional provisions
in section 43 of the Pilotage Act on the validity
and application of the provision for compulsory
payment of pilotage dues in the pilotage by-laws of
the Pilotage District of British Columbia.
Section 43 (1) provides:
43. (1) For greater certainty,
(a) every by-law made or expressed to have been made
before the coming into force of this section by a pilotage
authority pursuant to section 319 of the Canada Shipping
Act, 1934 or section 329 of the Canada Shipping Act,
chapter 29 of the Revised Statutes of Canada, 1952, and
(b) every order of the Governor in Council made or
expressed to have been made before the coming into force of
this section pursuant to section 319 of the Canada Shipping
Act, 1934 or section 329 of the Canada Shipping Act,
chapter 29 of the Revised Statutes of Canada, 1952 in
confirmation of any by-law described in paragraph (a),
shall be deemed for all purposes to have had the same force and
effect as if such by-law or such order had been made, on the
day on which it was expressed to have been made, pursuant to
an Act of the Parliament of Canada that authorized the
making thereof.
The effect, for purposes of the present case, of
the words "as if such by-law or such order had
been made, on the day on which it was expressed
to have been made, pursuant to an Act of the
Parliament of Canada that authorized the making
thereof' is that the By-laws which made provision
for the compulsory payment of pilotage dues in the
Pilotage District of British Columbia and the
orders of the Governor in Council confirming such
By-laws are deemed to have been valid from the
day they were made. As such they must be deemed
to have superseded the provision of the Order in
Council of 1929, in so far as compulsory payment
of pilotage dues is concerned. The confirming
orders, if valid, are certainly a sufficient exercise
of the authority conferred on the Governor in
Council to make, from time to time, the payment
of pilotage dues compulsory or non-compulsory
within the limits of a pilotage district.
The effect of subsection 43 (1) is that at the time
the Pilotage Act came into force the Pilotage
District of British Columbia must be deemed to be
one in which the payment of pilotage dues was
compulsory. This would make the Pilotage District
of British Columbia one which is deemed to be a
pilotage area established pursuant to the Pilotage
Act, as provided by section 43(7) thereof, which
reads:
43... .
(7) Every Pilotage District constituted by or under Part VI
of the Canada Shipping Act and in which, at the commence
ment of this Act, the payment of pilotage dues is compulsory,
shall be deemed to be a compulsory pilotage area established
pursuant to this Act until such time as the appropriate Author
ity makes a regulation in respect of the waters concerned
pursuant to paragraph (a) of subsection (1) of section 14.
Further, by section 43(4) of the Pilotage Act, as
amended by S.C. 1973-74, c. 1, section 1, the
By-laws of the Pacific Pilotage District of British
Columbia providing for the compulsory payment
of pilotage dues were continued in force until
February 1, 1974.
In the result, the S.S. Alaska was subject to the
compulsory payment of pilotage dues during the
period February 1, 1972 to February 1, 1974, and
the appeal from the judgment of the Trial Division
dismissing the counterclaim must accordingly be
dismissed.
* * *
HEALD J.: I agree.
* * *
URIE J.: I agree.
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.