A-1517-84
The ship Cielo Bianco, her owners D'Amico
Societa di Navigazione, S.A. (Appellants)
(Defendants and counter-claimants)
v.
Algoma Central Railway (Respondent) (Plaintiff)
INDEXED AS: ALGOMA CENTRAL RAILWAY v. CIELO BIANCO
(THE)
Court of Appeal, Thurlow C.J., Pratte and Mac-
Guigan JJ.—Toronto, November 24, 25, 26, 27,
28, December 3, 4, 1986; Ottawa, February 26,
1987.
Maritime law — Torts — Appeal from decision appellants'
ship Cielo Bianco entirely at fault in collision — Failure by
Cielo Bianco to maintain proper look-out leading her to turn
to port directly in path of respondent's ship Algobay without
signalling or establishing radio contact — Collision Regula
tions not allowing master to rely on assumption approaching
vessel will act in accordance with good seamanship and Regu
lations Regulations requiring all available means appropri
ate to prevailing circumstances be taken to ascertain risk of
collision — In case of doubt risk deemed to exist — Algobay
proceeding on basis of scanty information — Improper use of
radar — Algobay should have acted earlier to prevent risk of
collision — Liability established at 75% re Cielo Bianco and
25% re Algobay — Appeal allowed — Collision Regulations,
C.R.C., c. 1416, RR. 4, 5, 7, 8, 14, 34(a) Ships' Deck Watch
Regulations, C.R.C., c. 1481.
Practice — Interest — Maritime collision — Appellants'
liability reduced to 75% Entitled to recover damages on
counterclaim — Rate of pre-judgment interest from trial
judgment to appeal Principle court of appeal will interfere
with trial judgment if latter based on forecast not borne out by
subsequent events, broad enough to apply to post-judgment
interest — Post-judgment interest rate of 14% reduced to
10.50% Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10,
s. 52(b)(î).
This is an appeal from a judgment of the Trial Division in an
action arising from a maritime collision which occurred in
Sept-Î1es Bay in the Province of Quebec. In the collision, the
respondent's ship, the Algobay, struck the tug Pointe-Mar-
guerite crushing her against the appellants' ship, the Cielo
Bianco, to which she was made fast. The Trial Judge found
that the Cielo Bianco, without giving a signal or establishing
radio contact, had turned to port directly into the path of the
Algobay. She had failed to maintain a proper look-out. The
Cielo Bianco was held entirely at fault and the rate of pre-judg
ment and post-judgment interest was set at 14%. The Trial
Judge concluded that the Algobay's master, having clearly seen
the Cielo Bianco, was entitled to assume that his own ship had
been observed by the Cielo Bianco.
At issue are the appellants' submissions that the Algobay
failed to give a security call, did not give a whistle signal when
altering her course from 135° to 145° in order to avoid a
close-quarters situation, and did not comply with the Ships'
Deck Watch Regulations. The appeal also raises the issue of
pre- and post-judgment rates of interest.
Held, the appeal should be allowed.
The master of the Algobay was under no legal requirement
to give a security call to notify inbound traffic that she would
be proceeding out of the bay. Furthermore, the balance of
probabilities did not indicate that such a call would have been
heard.
The submission that the Algobay was at fault in failing to
give a whistle signal when altering her course is predicated on
the applicability of Rules 14 and 34(a) of the Collision Regu
lations. The situations referred to in paragraphs (a) and (b) of
Rule 14 were present: the circumstances indicated a head-on
situation in which the vessels should pass port-to-port (Rule
14(a)), and the alteration to the Algobay's course was made
when the masthead lights of the Cielo Bianco closed to the
point where they were nearly in line (Rule 14(b)). The facts
required for the application of Rule 34(a) were present. But
while the failure to signal the course alteration constituted a
breach of the Rule, such failure was not a cause of the collision
as it was probable that the whistle would not have been heard
by the Cielo Bianco.
The Algobay did not have on duty a deck watch that
complied with the Ships' Deck Watch Regulations. There was
no person in charge of the deck watch. The first mate, stationed
as he had been by the master in the anchor windlass compart
ment, was not in fact in charge of the watch. More importantly,
no member of the watch was in a position to carry out the
duties imposed by Rules 5 and 7 of the Collision Regulations
to keep a proper look-out and to determine if a risk of collision
existed. Despite this, the evidence did not establish that the
presence of a look-out in addition to the master himself would
have enabled the master to be informed earlier than he himself
had detected that the Cielo Bianco's masthead lights were
closing. Such a failure cannot be regarded as a cause of
collision.
The Trial Judge properly found that the actions taken by the
master of the Algobay from the time he realized that a
dangerous situation had arisen were correct. But that did not
answer the question whether the master should have realized
earlier that there was a risk of collision. The Trial Judge was
wrong in concluding that the master of the Algobay was
entitled to assume that the Cielo Bianco would allow it to pass.
The Collision Regulations do not allow a master to rely on the
assumption that those in charge of an approaching vessel will
act in accordance with good seamanship and the Regulations.
Under section 4 of the Regulations, the person in charge of the
vessel shall ensure that the vessel complies with the Rules set
out in Schedule 1 thereof entitled International Regulations for
Preventing Collisions at Sea, 1972. The Rules, which came into
effect in July 1977, established a new code, particularly in
relation to when a risk of collision is deemed to exist. The Rules
require not only that a look-out be kept but also that "all
available means appropriate to the prevailing circumstances
and conditions" be taken to determine if a risk of collision
exists. For this purpose, proper use is to be made of radar
equipment and assumptions are not to be made on the basis of
scanty information. If there is any doubt, the risk is deemed to
exist and the ship must act accordingly.
Given those principles, the Algobay could not be absolved of
fault in causing the collision. In the critical period—while she
was on her 135° course from the time when the masthead lights
of the Cielo Bianco were seen to be closing—her look-out was
not up to the standard of Rule 5 since all available means were
not being used to make a full appraisal of the risk of collision.
The radar was not being constantly used to ascertain the Cielo
Bianco's course and speed. The radio-telephone was not used,
contrary to Rule 7(a), to ascertain the intentions of the Cielo
Bianco and whether there was a risk of collision. The Algobay
proceeded on assumptions based on scanty information. She
disregarded Rule 7(d)(ii) which provides that where a large
ship is involved, risk of collision may exist despite an appre
ciable bearing change. The Algobay should have acted much
earlier to contact the Cielo Bianco by radio-telephone and,
failing contact slacken her speed pursuant to Rule 8(e). Liabili
ty should be apportioned 75% to the Cielo Bianco and 25% to
the Algobay.
The Trial Judge did not err in fixing the pre-judgment rate
of interest, as agreed by the parties at 14% from the date the
expenses were incurred. The rate of pre-judgment interest to
which the appellants were entitled as a result of the present
judgment, calculated from the date of the trial judgment to the
date of the appeal decision, should be set at 10.50%.
The principle that a court of appeal will interfere with a trial
judgment based to some extent on a forecast not borne out by
subsequent events was broad enough to apply to a rate of
post-judgment interest based, to some extent, on a forecast
which by the time the appeal is heard, turns out to have been
wrong. The rate of post-judgment interest, fixed by the Trial
Judge at 14%, should accordingly be reduced to 10.50%.
CASES JUDICIALLY CONSIDERED
CONSIDERED:
Stein et al. v. "Kathy K" et al. (The Ship), [1976] 2
S.C.R. 802; The Uskmoor (1902), 9 Asp. M.L.C. (N.S.)
316 (Adm.); The Anselm (1907), 10 Asp. M.L.C. (N.S.)
438 (C.A.); The Hero, [1911] P. 128 (C.A.).
REFERRED TO:
Schreiber Brothers Ltd. v. Currie Products Ltd. et al.,
[1980] 2 S.C.R. 78; Lewis v. Todd and McClure, [1980]
2 S.C.R. 694; Jaegli Enterprises Ltd. et al. v. Taylor et
al., [1981] 2 S.C.R. 2; Bank of England v. Vagliano
Brothers, [1891] A.C. 107 (H.L.); Davie Shipbuilding
Limited v. The Queen, [1984] 1 F.C. 461 (C.A.); Mercer
et al. v. Sijan et al. (1977), 14 O.R. (2d) 12 (C.A.);
McCann v. Sheppard, [1973] 2 All ER 881 (C.A.);
Curwen v. James, [1963] 2 All E.R. 619 (C.A.); Murphy
v. Stone Wallwork (Charlton) Ltd., [1969] 2 All E.R.
949 (H.L.); Attorney-General v. Birmingham, Tame and
Rea District Drainage Board, [1912] A.C. 788 (H.L.).
COUNSEL:
Jean Brisset, Q.C. and David Colford for
appellants (defendants and counter-claim
ants).
George Strathy and Kristine Connidis for
respondent (plaintiff).
SOLICITORS:
Brisset, Bishop, Davidson & Davis, Montréal,
for appellants (defendants and counter-claim
ants).
Campbell, Godfrey & Lewtas, Toronto, for
respondent (plaintiff).
The following are the reasons for judgment
rendered in English by
THURLOW C.J.: This appeal is from a judgment
of the Trial Division [T-5213-78, T-1283-81, Addy
J., judgment dated November 22, 1984, not
reported] in an action arising from a collision
which occurred in Sept-Îles Bay at about 05.42
hours on November 14, 1978. In the collision, the
stem and port bow of the respondent's ship
Algobay struck the starboard side of the tug
Pointe Marguerite crushing her against the star
board side of the appellant ship Cielo Bianco to
which she was made fast. Shortly after the impact
the Pointe Marguerite's lines parted and she sank.
Two members of her crew lost their lives. Both the
Algobay and the Cielo Bianco sustained damage,
the Algobay to her bow and the Cielo Bianco to
her starboard side at the point where the Pointe
Marguerite had been made fast some 100 to 150
feet from the bow.
At the request of the parties it was directed by
the learned Trial Judge that issues as to the quan
tum of damages be the subject of a reference after
trial, should such a reference be necessary, and the
issues dealt with in his decision were those of
liability for the collision, the rate of pre-judgment
interest to be included in the damages, and the
rate of interest which the judgment would bear
until paid. In the result the learned Trial Judge
held the Cielo Bianco entirely to blame for the
collision and fixed the rate of both pre-judgment
and post-judgment interest at 14%. All three of
these conclusions are at issue in the appeal.
Sept-Îles Bay is a body of water on the north
side of the Gulf of St. Lawrence. It is nearly six
miles wide from east to west and some four miles
from north to south. It is navigable for deep draft
ships for some five miles from east to west and
some 2 1 / 2 miles from north to south. Its entrance is
by Chenal du Milieu which is nearly two miles
wide between Pointe à la Marmite on the west and
Î1e Grande Basque on the east. The channel is
navigable for deep draft ships to within .3 miles of
Pointe à la Marmite. At Pointe Noire, some two
miles west of Pointe à la Marmite on the southern
shore of the bay, is the loading dock of Wabush
Mines. Four cables to the northwest of Pointe à la
Marmite is a buoy known as D15. Ships entering
the bay and bound for the Wabush Mines dock
proceed to the north of that buoy. A substantial
alteration to port, in the order of 75°, from a ship's
course in approaching in mid-channel and entering
the bay is required to round the buoy and head for
the dock.
On the eastern side of the bay and some 2 3 / 4
miles northeastward of Pointe à la Marmite are
the loading docks of Iron Ore Company of
Canada. Further north along the eastern shore is
the town of Sept-Îles.
The port facilities of both Iron Ore Company of
Canada and Wabush Mines operate on a twenty-
four-hour basis and ships are generally docked at
the facilities by day or by night. Ships come in.and
out of the bay at all hours of the day or night.
Pilots and tugs are used to assist them in docking
and unlocking.
On the night in question there was a ship, the
Eastern Hazel, at anchor approximately half a
mile northwest of the buoy D15, another ship, the
Sir James Dunn, at anchor some two miles to the
northwest of the buoy and yet another, the Mont-
calm, two miles to the northeast of the buoy. The
Frankcliffe Hall had also been at anchor in the
northeastern part of the bay but at about 04.20
had begun moving eastwardly to an Iron Ore
Company dock and had been docked there by
05.20. The weather was fine and though it was a
dark night visibility was unlimited. There was a
southeast wind of some. 15 knots. The tide was
falling but had little or no effect on the movement
or control of the ships.
The collision occurred when the Cielo Bianco
which had reached the entrance to the bay and
was inbound on her way to the Wabush dock,
having taken on a pilot, swung to port, across the
course of the Algobay which was on her way out of
the bay from a point some two to three miles
northwestward of Pointe à la Marmite.
Both ships are large bulk carriers. The Algobay
was a new ship on her first voyage to Sept-Iles.
She is 730 feet long and 76 feet wide. Her gross
tonnage is 22,466.25. Her engines are controlled
directly from the bridge. She had arrived in Sept-
Îles Bay on November 11, had taken on a cargo of
35,739 tons of iron pellets and then anchored in
the western portion of the bay southeastward of
the position of the Sir James Dunn to await the
completion of repairs to one of her engines. She
remained there until 04.20 on November 14 when,
at the request of the technician making the repairs,
she began manoeuvering in the bay to test her
engines. The manoeuvers consisted of moving to
the east of her anchor position for 1.65 miles,
turning to starboard 180° and going west for much
the same distance, thence northwestward to round
the stern of the Sir James Dunn and thence east-
wardly again. These manoeuvers were made at
various engine speeds both forward and reverse. At
some point before rounding the stern of the Sir
James Dunn the engineer asked for a test run of
half an hour or more at "full speed ahead", a
manoeuver which the captain considered would
require the vessel to proceed out of the bay to the
open waters of the gulf. After rounding the stern
of the Sir James Dunn the Algobay's engines were
put on "half speed ahead" and her course was
altered to starboard to 135° which was calculated
to take the ship through Chenal du Milieu at a
distance of .7 miles east of Pointe à la Marmite.
Half speed for the Algobay when fully loaded was
some eight and a half knots. The learned Trial
Judge found that in the period that ensued the
Algobay had reached a speed of "between seven to
eight knots".
Shortly before 05.30 and either shortly before or
when making the alteration to starboard, the
master of the Algobay, Captain Carlsen, first saw
the Cielo Bianco, either by radar or visually, at
40° on his starboard bow and at a distance of 2.8
to 2.9 miles. He had previously heard on his radio
several calls by the Cielo Bianco to the pilot
station and it appears that at or after the time
when he first saw her he also saw the lights of a
tug proceeding toward her from the northeast. He
had on a previous occasion seen the Cielo Bianco
in Sept-Îles Bay and knew she was a large salt
water ship.
The position of the Cielo Bianco when first seen
by Captain Carlsen was placed by him at some-
where between Pointe à la Marmite and Île
Grande Basque at the upper end of Chenal du
Milieu. The learned Trial Judge found the position
to have been at or to the east of the centre line of
the channel. In reaching his conclusion on this and
a number of other points he preferred the evidence
of the master of the Algobay to that of the master
and pilot of the Cielo Bianco. What Captain
Carlsen saw were the masthead lights of the Cielo
Bianco which were open with the bow light to the
left, as he saw them, indicating that her course was
diverging from his 135° course. With the Cielo
Bianco's course at 338° or thereabouts (Captain
Carlsen estimated it at 3371°) when she was
taking on her pilot, the divergence would be in the
order of 28°. At that stage, with her engines shut
off, the Cielo Bianco was proceeding at about two
knots. As he proceeded on his 135° course, the
master of the Algobay noticed the masthead lights
beginning to close though the bearing of the Cielo
Bianco on his port side was increasing. When the
masthead lights of the Cielo Bianco were nearly in
line, in order to avoid what he referred to as a
close-quarters situation he ordered an alteration to
starboard to 145° which was calculated to have
the ship pass Pointe à la Marmite at a distance of
.5 miles. The master estimated that the distance
between the ships at that time could have been a
mile or so. He could not say for sure. This would
indicate that the ship had proceeded for about a
mile on its 135° course which, at say seven knots,
would have taken about eight and a half minutes;
longer if she was not going that fast. When the
Algobay had steadied on the 145° course her
master noticed that the lights of the Cielo Bianco
were still closing and at the point where they came
in line or were about to come in line he drew back
the throttle to slow the ship's engines and called
the Cielo Bianco on his radio-telephone on
channel 16 and then on channel 12 but received no
reply. He then altered hard-a-starboard, put the
engines at "full speed ahead" for some seconds to
make the ship swing, blew the danger signal and
then reversed to "full astern" with the rudder
amidships. He also made a further attempt to call
the Cielo Bianco on the pilots' channel (18A) but
received no reply. The whistle had not been blown
to indicate the alteration from 135° to 145° but a
single blast had been blown somewhat later and
shortly before the danger signal was sounded. The
purpose of the single blast was not to indicate a
turn to starboard but to attract the attention of the
first mate who was on watch at the anchor wind
lass under the forecastle. None of the Algobay's
whistle blasts were heard by those on the Cielo
Bianco. In a final attempt to avoid collision, the
master of the Algobay sought to release the bow
anchors by a remote control in the bridge. It
failed. The learned Trial Judge, on the advice of
his assessors, concluded that in the circumstances
the lowering of the anchors would have had no
effect whatever on either the angle of impact or
the speed of the ship at the moment of impact. He
also concluded that at the time when the lights of
the Cielo Bianco began to close and up to the time
when her lights began to open to show her star
board side, the master of the Algobay was still
entitled to assume that the Cielo Bianco would
allow the Algobay to pass and turn to port around
her stern and that when he began to feel too
crowded he did the correct thing by reducing speed
and attempting to contact the Cielo Bianco by
radio to determine what was happening and what
its intention was.
The Cielo Bianco is 835 feet long and 129 feet
wide. Her registered tonnage is 51,579. She was
carrying 28,000 tons of ballast and some 1,700
tons of bunker fuel. As found by the learned Trial
Judge, she had reached a point at the entrance to
the bay at or east of the middle line of Chenal du
Milieu when at 05.27 her pilot came on board. At
that time the engines were stopped but the ship
was still moving forward at about two knots. The
pilot, Captain Lapierre, having reached the bridge
at 05.30, gave an order for "port easy" and shortly
afterwards "port 10°" and "half speed ahead".
His purpose was to cause the ship to swing to port
and northward of buoy D15 so as to bring her
from her course of 338° on entering the bay to a
course of 261° to take her to Pointe Noire. In
manoeuvering mode "half speed ahead" for her
was six to seven knots. The Trial Judge found that
by the time she reversed, just shortly before the
collision, the ship's speed had reached six to seven
knots. In the interval of about four minutes from
05.27 until the order for half speed was given she
would have moved and thus closed about 800 feet
of the distance between her and the Algobay. In
the same four minutes the Algobay at her speed of
about six knots would have covered and closed
about 2,400 feet, or, since her speed was increas
ing, somewhat more.
After putting the pilot aboard at or near the
bridge, which is at the aft end of the ship, the
Pointe Marguerite proceeded along the starboard
side of the Cielo Bianco and was made fast there
some 100 to 150 feet from the bow. Another tug,
the Pointe -aux -Basques, proceeded around the
stern of the Cielo Bianco intending to make fast to
her starboard side just forward of the bridge but
had not succeeded in doing so when it became
apparent that a collision was about to occur and
her lines were cast off so that she could get out of
the way.
No one concerned with the navigation of the
Cielo Bianco saw or perceived the approach of the
Algobay until the master who was outside the
wheel house and on the starboard side saw a
reflection in the glass of the wheel-house door and
on turning around saw the lights of the Algobay
which was then some 500 to 600 metres away
bearing about 20° abaft where he was standing.
By that time the Cielo Bianco was said to have
been on her course of 261° for about a minute.
The master took action immediately, ordered
"hard-a-port" and emergency "full astern" and
blew two short blasts and then three short blasts
on the whistle. It was, however, too late to avoid
the collision which occurred about two minutes
later.
The learned Trial Judge, after a careful and
detailed consideration of the evidence, concluded
that:
From the time the pilot boarded her, the actions of the Cielo
Bianco can be directly attributed to the fact that a proper
look-out was not maintained and that those responsible for its
navigation were totally unaware of the presence of the Algobay.
Later he said:
The failure to keep a proper look-out certainly constituted
negligence on the part of the pilot and the captain who were the
only two people actively engaged in controlling navigation. This
led to their causing the Cielo Bianco to turn to port directly in
the path of the Algobay without giving any signal, much less
establishing previous contact by radio and agreement on the
manoeuvre. This action was a direct effective cause of the
accident and constituted also of itself a serious breach of good
seamanship. Liability necessarily . flows from these acts and
omissions.
That the Cielo Bianco was to blame for not
keeping a proper look-out was conceded to the
extent that it consisted in not keeping an adequate
radar watch for the presence of other ships. When
proceeding in Chenal du Milieu the radar had
been put on two-mile range and thus when the ship
reached the entrance to the bay and was in the
process of taking on the pilot the radar would not
have disclosed the presence of the Algobay, then
some two and a half to three miles away. Even so,
her presence was not detected even when she came
within the two-mile range.
But there was failure to keep a proper look-out
in other respects as well. The master and the pilot
appear to have been preoccupied with navigating
safely around buoy D15 and neither of them saw
the Algobay or her lights until, as previously men
tioned, the master finally saw them when the ship
was some 500-600 metres away. Nor does it
appear that anyone else whose duty it was to keep
a look-out for other ships detected or reported the
presence of the Algobay.
Of course, if the Algobay's lights were not burn
ing as she approached there might be an explana
tion for the failure of those navigating the Cielo
Bianco to see them. At the trial there was a serious
issue as to whether the masthead lights of the
Algobay were lit as she approached. There was
also an issue with respect to the positioning of her
red and green lights. These lights were mounted
some 18 feet inboard from the sides and some time
after the collision they were moved to locations
nearer to or on the sides of the ship. The learned
Trial Judge held that at the time of the collision
they were properly positioned to comply with the
Regulations and I can see no reason to conclude
either that he was wrong or that the position of the
red light, even if not entirely complying with the
Regulations in respect of its visibility from abaft
the beam, had any effect as a cause of the collision
since it must have been continuously visible from
the Cielo Bianco from the time the ships were still
nearly three miles apart until the collision
occurred.
On the other issue the appellants led evidence of
a pilot who testified that when proceeding in a tug
toward the Frankcliffe Hall to pilot her to her
dock he had seen the bow wave of the Algobay and
the ship itself when she was manoeuvering in the
northern part of the bay, that he saw her port light
but did not see her masthead lights. This witness,
who had not been called to give evidence at the
inquiry or at the inquest into the deaths of the
crewmen of the Pointe Marguerite, testified that
he did not realize at the time that he had not seen
the Algobay's masthead lights but that later in the
night following the collision when thinking about
what had happened it occurred to him that he had
not seen them. There was, however, evidence that
the lights had been switched on when the Algobay
began her manceuvers and there was further evi
dence by the master of the Frankcliffe Hall that
he saw them burning when the Algobay was
moving not far from his ship. This was at or about
the time she was making her turn to starboard
from her first easterly course to go westwardly
again. The appellants also called the second mate
of the Cielo Bianco who testified that he was on
the boat deck supervising the seamen who had
been engaged in heaving in the cable of the tug
Pointe -aux -Basques to make her fast to the star-
boârd side of the Cielo Bianco just forward of the
bridge when he saw the red light of what turned
out to be the Algobay, that immediately after
wards he saw a white light being switched on
followed by another white light a bit lower than
the first one being switched on. He estimated the
distance away of the Algobay at that time at about
four cables, i.e., some 2,400 feet. This witness as
well had not previously given evidence.
The learned Trial Judge, in terms that did not
hide his displeasure, spurned the evidence of both
the appellants' witnesses as manufactured for the
purposes of the trial and manifestly false. Having
seen and heard them, he was clearly in a far better
position than an appellate court to judge as to their
credibility and, whether or not they deserved the
castigation they received (and I do not suggest
either that they did or did not deserve it), in my
view it is apparent that his finding that the
Algobay's masthead lights were at all material
times burning is well supported by the evidence
and is unassailable.
So too are his findings as to the gravity of the
failure of the Cielo Bianco to keep a proper look
out and that this failure was in turn the cause of
her having made her disastrous swing to port to go
around D15 at a time when the lights of the
Algobay were visible, a turn which both the master
and the pilot testified théy would not have made
had they known of the approach of the Algobay.
I turn now to the conclusion of the learned Trial
Judge that the Algobay was not at fault.
The learned Judge found that in the circum
stances since the master of the Algobay had clear-
ly seen the Cielo Bianco for nearly three miles he
was:
... fully entitled to assume that his own ship also had been
observed throughout by the Cielo Bianco. He was also entitled
to assume that those in charge were aware not only of its
presence but of its course and speed and that they would act
prudently and lawfully in accordance with the regulations. To
afford any weight to the argument of counsel for the defend
ants to the effect that had the Algobay maintained its original
course of 135 degrees, there would have been no collision and
that therefore its captain should have maintained that course,
one must completely ignore what appeared to be taking place
before his eyes when the Cielo Bianco's lights which were well
opened originally began to close. As found previously, the
alteration to 145 degrees was merely to avoid a close passing
situation and not to avoid a collision on a crossing situation.
When the fact that the Cielo Bianco was really turning to port
was realized, an eminent [sic] and emergency collision situation
had arisen. To realize before that stage that the Cielo Bianco
intended to turn in front of him would have required more than
a proper appreciation of the principles of seamanship and
navigation, but would have called for something akin to
clairvoyance.
The emergency which was a sudden and very serious one was
created solely and entirely by the negligence and the poor
seamanship of those in control of the Cielo Bianco. Therefore,
the actions of the captain of the Algobay from that time must
not be weighed after the fact on a fine scale of possibilities but
must be considered in the context of the emergency. He
immediately adopted what he judged to be emergency measures
required to avoid a collision or to lessen its effect. The actions
obviously must have served to reduce the angle of impact and in
fact coincided with the emergency measures adopted by the
Cielo Bianco. I can find no serious lack of skill or breach of any
of the principles of seamanship and navigation in any of the
measures adopted by the Algobay.
In his memorandum of argument and in the
course of argument as well, counsel for the appel
lants raised and discussed a total of ten submis
sions of errors on the part of the learned Trial
Judge in reaching his conclusion on the issue as to
fault. In summary, they were that:
1. The Trial Judge took distorted views of the
evidence, ignored admissions made by the
respondent in its preliminary act and by the
master of the Algobay and relied on a statement
in the preliminary act of the Cielo Bianco which
was manifestly a clerical error.
2. The Trial Judge failed to analyse critically
the evidence of the master of the Algobay as to
the course of his vessel when he sighted the
Cielo Bianco and should have found that the
position of the Cielo Bianco at that time was
somewhat to the west of what the Trial Judge
referred to as being mid-channel.
3. The Trial Judge failed to appreciate that the
master of the Algobay should have realized
much earlier than he did that the Cielo Bianco
was proceeding towards Pointe Noire, that he
attached no importance to the fact it was the
Algobay which struck the Cielo Bianco and that
the collision occurred west of Pointe à la Mar-
mite and of buoy D15, that a large alteration to
starboard was required to bring the Algobay
from her course of 135° to the point of collision
and that if the Algobay had been kept on her
course of 135° there would have been no
collision.
4. The Trial Judge failed to find the Algobay
was in breach of the Ships' Deck Watch Regu
lations [C.R.C., c. 1481] and such breach was
the effective cause of the collision.
5. The Trial Judge failed to find the Algobay at
fault for the collision when she failed to give a
security call to notify inbound traffic that she
would be proceeding out of the bay.
6. The Trial Judge should have found the
Algobay at fault for the collision in failing to
give a whistle signal of her alteration of course
to starboard from 135° to 145°.
7. The Trial Judge showed a complete lack of
knowledge of human nature in disbelieving the
appellants' two witnesses as to the lights of the
Algobay and failed to comprehend that they had
nothing to gain in giving such evidence.
8. The critical comments made by the Trial
Judge in his analysis of the evidence of the
appellants' witnesses as to the angle of collision
were unwarranted.
9. The Trial Judge disregarded evidence show
ing that the red and green side lights of the
Algobay were not positioned so as to comply
with the Collision Regulations [C.R.C., c.
1416].
10. The Trial Judge erred in not completely
disregarding the evidence of the master of the
Frankcliffe Hall because such evidence was
contradictory and illogical as well as contrary to
evidence of the master of the Algobay and
because the original log of the Frankcliffe Hall
was not produced as the Court had ordered.
With the exception of items 4, 5 and 6, these
submissions, in my opinion, all raise questions
either of the credibility of witnesses or the weight
of evidence and of fact. The Trial Judge's findings
on them are made in large part on conflicting
testimony, and are of the sort which it is for the
Trial Judge to decide after hearing the witnesses
and observing their demeanor in giving their evi
dence. Only in exceptional instances, as where
there is palpable or overriding error in the judg
ment of the trial judge, is it open to a court of
appeal to reconsider and substitute its own view. In
Stein et al. v. 'Kathy K" et al. (The Ship) I
Ritchie J., speaking for the Supreme Court after a
review of earlier authorities, wrote:
These authorities are not to be taken as meaning that the
findings of fact made at trial are immutable, but rather that
they are not to be reversed unless it can be established that the
learned trial judge made some palpable and overriding error
which affected his assessment of the facts. While the Court of
Appeal is seized with the duty of re-examining the evidence in
order to be satisfied that no such error occurred, it is not, in my
view, a part of its function to substitute its assessent of the
balance of probability for the findings of the judge who presid
ed at the trial.
See also Schreiber Brothers Ltd. v. Currie Prod
ucts Ltd. et al.; 2 Lewis v. Todd and McClure; 3 and
Jaegli Enterprises Ltd. et al. v. Taylor et al. 4
[ 1976] 2 S.C.R. 802, at p. 808.
2 [1980] 2 S.C.R. 78.
' [1980] 2 S.C.R. 694.
4 [1981] 2 S.C.R. 2.
Having regard to these authorities, I am of the
opinion not only that there is no merit in any of
the appellants' submissions numbered 1, 2, 3, 8
and 10 but that the points so raised are not fairly
arguable as a basis or bases for interfering with
the conclusions of the learned Trial Judge and that
they do not warrant detailed discussion. The points
raised in the submissions numbered 7 and 9 are
also unsustainable for the reasons already given
with respect to them. That leaves for consideration
the submissions numbered 4, 5 and 6.
The point numbered 5 is I think unsustainable
as well. Assuming that it would have been a
prudent thing for the master of the Algobay to
give a security call to notify inbound traffic that
she would be proceeding out of the bay, there was
no legal requirement that he should do so and
having regard to the fact that no one seems to have
heard his earlier security call and to the failure of
the Cielo Bianco and the pilot to hear his subse
quent radio calls the balance of probabilities does
not indicate that such a call would have been
heard.
The sixth submission is predicated on the appli
cability in the circumstances of Rules 14 and
34(a) [of the International Regulations for Pre
venting Collisions at Sea, 1972, Schedule I] of the
Collision Regulations. 5 They provide:
RULE 14
Head-on Situation
(a) When two power-driven vessels are meeting on reciprocal
or nearly reciprocal courses so as to involve risk of collision
each shall alter her course to starboard so that each shall
pass on the port side of the other.
(b) Such a situation shall be deemed to exist when a vessel
sees the other ahead or nearly ahead and by night she
could see the masthead lights of the other in a line or
nearly in a line and/or both sidelights and by day she
observes the corresponding aspect of the other vessel.
(c) When a vessel is in any doubt as to whether such a
situation exists she shall assume that it does exist and act
accordingly.
Collision Regulations, C.R.C., c. 1416.
RULE 34
Manoeuvring and Warning Signals
(a) When vessels are in sight of one another, a power-driven
vessel underway, when manoeuvring as authorized or
required by these Rules, shall indicate that manoeuvre by
the following signals on her whistle:
—one short blast to mean "I am altering my course to
starboard",
—two short blasts to mean "I am altering my course to
port",
—three short blasts to mean "I am operating astern
propulsion".
By its terms, Rule 34(a) applies when power-
driven vessels are underway and when manoeuver-
ing "as authorized or required by" the Rules. In
The Uskmoor, 6 Sir Francis Jeune P. said of what
he referred to as the "whistling rule" [at page
3171:
It is not easy to construe it so as to deal with all possible cases.
The words of the rule are not at all easy to make out. Its
application is limited in two ways. Vessels must be in sight of
one another, and must be "taking any course authorised or
required by these rules." It is not easy to put a clear interpreta
tion upon the second limitation, although the first one is
intelligible enough. The rule does not apply where a vessel in
conducting manoeuvres in the ordinary course of navigation,
quite apart from seeing any other vessel, thinks it right to port
or starboard her helm. But the rule is also limited to "taking
any course authorised or required by these rules." It has been
sought to put a rather narrow interpretation upon the rule. Of
course the word "required" is clear enough. There are certain
things required by the rules to be done. But the word "autho-
rised" is very much larger, and I am inclined to think that a
large interpretation ought to be given to it; that everything is
authorised which by the rules of good seamanship it is neces
sary and proper should be done, although it is quite true there
are certain cases where you may say a more distinct authorisa
tion arises. For instance, an overtaking vessel, which has to
keep out of the way of the overtaken vessel, would be autho
rised in going to port or starboard, according as the circum
stances of the case might require, and of course, under the
crossing rule, the vessel which has to keep out of the way is
authorised to do so by either one of several means, as the case
may seem to require. I do not think the matter ought to be tied
down to any narrow interpretation of the rule. But even if it
was so, I think in this case it is right to say that the course
taken by the Minnetonka, according to her own story, was a
course authorised by the rules. According to her case, when the
other vessel which was approaching her ported, she thought it
right to port also, and it is by no means certain that might not
be brought within the crossing rule, which imposes a duty of
keeping out of the way, and authorises it to be done by any
appropriate means; but that in the larger sense of the word her
course was authorised by the rule appears to me clear. On the
6 (1902), 9 Asp. M.L.C. (N.S.) 316 (Adm.).
whole, therefore, it appears to me that under the circumstances
of this case the obligation of whistling was imposed upon
Minnetonka at an earlier time than the officer who was in
charge thought it necessary to whistle. He did at a later period
whistle, and quite rightly. The reason he gave for not doing so
before, which I do not wish to press against him, though it
probably reflects the mind of a good many sailors, was that he
did not think it was necessary to obey the rule, except in the
case of vessels meeting in narrow waters. I wish emphatically to
say that the rule is not so limited, and it is necessary to say that
with some emphasis, because the experience of this court shows
that the rule has not been followed by the nautical world with
the completeness which its terms demand. I hope captains in
future will err, if they err at all, on the side of whistling.
This was approved by the Court of Appeal in
The Anselm,' Lord Alverstone C.J. saying for the
Court [at page 440]:
Upon the question of the construction of the word "authorised"
we have had cited to us the decision of a very distinguished
judge, Lord St. Helier, when President of the Admiralty Divi
sion, who, of course, had very great experience. He, in The
Uskmoor (ubi sup.), has given a construction of the word
"authorised" which certainly commends itself to me, and which
I think it is very desirable to uphold, for the reason that it is so
extremely necessary that if any course is being taken which is
not absolutely required, but is a course which is "authorised"
and therefore permitted, notice should be given to the other
ship as to the manoeuvre that is being undertaken.
In The Hero,' it was contended that the Rule
did not apply where the alteration was a wrong or
negligent one since such a move was not "author-
ized" by the Rules. The Court held otherwise.
Kennedy L.J. wrote:
We cannot accede to such a contention. If it were sound, the
strange result would follow that in the present case, and in all
like cases, a vessel which took a proper course either required
by the rules or, as a seamanlike course, authorized by the rules,
but which omitted to make the appropriate sound signal
according to art. 28, would incur the penalty incident to
statutory blame, whereas a vessel which in precisely the same
circumstances took a wrong and unseamanlike course, neither
required nor authorized by the rules, and gave no sound signal
to indicate that course, would, so far as regards the absence of
(1907), 10 Asp. M.L.C. (N.S.) 438 (C.A.).
8 [1911] P. 128 (C.A.), at p. 159.
an appropriate sound signal, go scot free. We do not think that
the language of art. 28, fairly and reasonably interpreted,
involves such a conclusion. We do not think that the words
"taking any course authorized or required by these rules" limit
the application of the rule to the case of a course which, at the
trial of a collision action, is found by the Court to have been
authorized or required by the rules. We ought, it appears to us,
to interpret the words as including any course alleged to have
been taken by a vessel acting, whether under art. 27 or art. 29,
or under the other articles, so as to avoid immediate danger. So
that where, as here, a vessel charged in an action with having
taken—in acting for the other vessel—an improper course,
causing or contributing to a collision, asserts in that action, as
the Hero does here, that the manoeuvre was a proper course
under the rules, she cannot successfully contend that because
the Court holds that her story of the facts is an untrue story,
and that upon the true facts the course taken by her was
neither a course required nor authorized by the rules, she
thereby gains exemption from liability from statutory blame for
not sounding the signal appropriate to that course. It was a
course which those in charge of the vessel professed at the time
to take, and the owners of the vessel sought to justify in the
action, as a course either authorized or required by the rules.
The respondent's case, as I understand it, is
based on the situation having been a passing or
head-on situation in which the vessels should pass
port-to-port. For the master of the Algobay the
situation was thus one of the kind to which Rule
14(a) refers. By the time the course of the
Algobay was altered from 135° to 145° her master
had sensed the need to go to starboard to avoid a
close-quarters situation. He made the alterations
when the masthead lights of the Cielo Bianco
closed to the point where they were nearly in line.
This is the situation described in Rule 14(b).
Accordingly, it seems to me that if he was to
proceed on the assumption that the Cielo Bianco
was aware of the approach of the Algobay and
that he was entitled to alter to starboard, the facts
required for the application of Rule 34(a) were
present.
In my opinion, having determined to make the
alteration to starboard, Rule 34(a) required that
the Algobay's whistle be sounded to signal the
alteration to the Cielo Bianco. Had it been sound
ed it might have been heard and if so it would have
told those in charge of the Cielo Bianco both that
there was a ship under way in the position of the
Algobay and that she was altering her course to
starboard. That might well have been sufficient to
enable the Cielo Bianco to avoid the collision. But
to have that effect the signal, if given, would have
to be heard and having regard to the distance of
about a mile which at that time separated the two
ships and to the fact that the Algobay's whistle,
when sounded later when the ships were much
closer to one another, was not heard by the Cielo
Bianco it seems to me that, on balance, the proba
bility is that the whistle would not have been
heard. Accordingly, while I regard the failure to
sound the whistle on making the alteration to
starboard as a breach of the Rule, I am unable to
conclude that such failure was a cause of the
collision.
The fourth submission was that the Algobay did
not have on duty a deck watch that complied with
the Ships' Deck Watch Regulations and that if
such a watch had been on duty and functioning as
it should have been functioning the master would
have been better able to watch the movements of
the Cielo Bianco and would not have made his
alterations to starboard. This raised an issue which
the learned Trial Judge mentioned early in his
reasons when relating the particulars of negligence
alleged against the Algobay, but which he did not
discuss.
The Ships' Deck Watch Regulations as I under
stand them required that the Algobay have on
duty a deck watch, of which the master could not
be a member, consisting of a person in charge of
the deck watch, an additional person and a person
qualified in the use of a radio-telephone. By defini
tion the deck watch means that part of a ship's
complement that is required for the purpose of
attending to the navigation and security of the
ship. Included in the duties relating to the naviga
tion of the ship are those defined in Rules 5 and 7
of the Collision Regulations respecting look-out
and risk of collision.
The personnel who could be regarded as the
deck watch of the Algobay at the material time
consisted of the first mate and the seaman who
was with him in the anchor windlass compartment
under the forecastle and possibly the helmsman
who, with the master, was in the wheel-house. In
my view, the watch so organized did not comply
with the Regulations. The officer of the watch,
stationed as he had been by the master in the
anchor windlass compartment, was not in fact in
charge of the watch. He was at most in charge of
the seaman who was with him in the anchor
windlass compartment. In no way was he, as offi
cer of the watch, in charge of the helmsman or
what he was doing. Moreover, the master, who had
qualification in the use of radio-telephones, was
not subject to that officer's control and in any
event could not be considered a member of the
watch so as to fulfill that requirement.
More importantly, neither the officer of the
watch nor any other member of the watch was in a
position to carry out the duties imposed by Rules 5
and 7 of the Collision Regulations to keep a
proper look-out and to determine if risk of collision
existed as indeed, as matters turned out, it did.
However, the failure to have on duty a deck
watch that complied with the Ships' Deck Watch
Regulations would not in itself give rise to liability
unless it were shown to have been a cause of the
collision. In the present situation the result, as I
see it, was that the whole responsibility for the
navigation of the ship including that of observing
the Rules fell on the master alone, unassisted by
any of his crew who might have been assigned to
watch and report the developing situation either
visually or by radar. He alone had to make the
calculations, using the chart and radar, to lay out
his 135° course and later his 145° course. He
alone had to keep the look-out for the Cielo Bianco
and for any other ships in the bay. He alone had to
operate the engines and the whistle. He alone had
to make the attempt to contact the Cielo Bianco
by radio-telephone. He alone had continuously to
observe and appreciate the developing situation
and determine what action was required. And
when the situation ultimately became critical, if
not indeed much earlier, he had far too much to
do. Speaking of his whistle signal to the first mate,
he said:
Q. And you indicated that the Mate called you when you
made that whistle.
A. He called.
Q. What was it that he called you on?
A. He called me on the walkie-talkie.
HIS LORDSHIP: I don't, I don't understand why you made a
call, you put a call on the whistle. That you did not intend,
you did not inform the, you did not intend that call to inform
the other ship of anything, you just intended to call your
Mate. You had a walkie-talkie and he had a walkie-talkie, I
don't understand why you didn't simply get him on the
walkie-talkie.
A. Well, at that stage there was no time. I had the engine to
look after, I had the starboard alteration, I had to call to
the other ship. It was at, at the period of time when I had
no, no time to reach for the walkie-talkie. All I wanted to
get was his attention—to this day I can't even say if I
wanted to ask him to get out there, if I wanted to ask him
to stand by anchors, I can't say at this stage exactly what
my intentions were for him.
Despite this, however, I do not think that the
evidence establishes, and it would thus be specula
tive to conclude, that the presence of a look-out in
addition to the master himself, either on the bridge
or elsewhere on the ship, would have enabled the
master to be informed earlier than he himself
detected that the Cielo Bianco's masthead lights
were closing. Accordingly, I do not think that the
failure to have on duty a deck watch that complied
with the Ships' Deck Watch Regulations can itself
be regarded as a cause of the collision. It may,
however, be noted that the look-out that Captain
Carlsen was able to keep was not as constant as it
could have been since he did not see the red and
green lights of the Cielo Bianco in the interval
when both would have been visible nor did he
recollect ever seeing the Cielo Bianco's green light.
But the issue of fault does not end there. The
argument, which extended over some seven days,
included submissions that the master of the
Algobay should have perceived earlier than he did
that there was risk of collision and should have
taken action earlier to avoid it and that it was his
alterations to starboard which brought the ships
into collision.
As previously mentioned, at the time when the
Algobay came on her course of 135°, the course of
the Cielo Bianco diverged by some 28° from that
of the Algobay. From the Algobay the masthead
lights of the Cielo Bianco were seen to be well
open. In the period of some eight minutes thereaf
ter until the alteration to 145° was made, the
angle of divergence was reduced to the point where
the masthead lights of the Cielo Bianco were
nearly in line. As to this, Captain Carlsen's evi
dence in chief was:
A. As I proceeded out on the 135 CIELO BIANCO was still
heading inbound and on the 135 I saw him as if he was
starting to fall off.
HIS LORDSHIP: Oh, excuse me, fall off you mean coming
back?
A. Yes.
Q. Coming back towards your course?
A. Towards me.
Q. Yes.
A. Which did not initially do anything different to the
meeting situation because his bearing was still getting
larger as I was proceeding out he was drawing further aft
and the bearing was getting larger all the time.
Q. Yes, I understand.
A. When he got close to being in line he had fallen off I
looked in the radar and I altered the course over to be .5
off Pointe...
MTRE. HYNDMAN: I didn't hear that.
THE WITNESS: I altered the course over to be .5 off Pointe à
la Marmite which gave me a course of 145.
HIS LORDSHIP: You mean .5 to be half ('h) a mile off?
A. That is correct.
Q. Altered it to .5 off Pointe à la Marmite. That is when you
saw him—when did you do that, did you say?
A. Well, I believe it was at the time, if I remember correctly,
it was at the time he was getting close to his range like
[lights] getting closer to being in line.
The learned Trial Judge has found that the
actions taken by the master of the Algobay as soon
as and from the time he realized that a dangerous
situation had arisen were correct. I see no reason
to disagree with that view. At that point there was
an emergency situation. But that does not resolve
the question whether Captain Carlsen should have
realized earlier that there was a risk of collision
and taken action to avoid it. The learned Trial
Judge also found that the Algobay's alteration of
course from 135° to 145° was made to avoid a
close-passing situation at a time when her master
"had not anticipated nor had he any reason to
anticipate that the Cielo Bianco would be turning
further to port and that immediate danger of
collision would therefore arise". As a finding of
fact I do not disagree with the view that the
master had not anticipated that the Cielo Bianco
would be turning further to port. But Captain
Carlsen had no indication from the Cielo Bianco
as to what she was doing other than that she was
in a continuing turn to port and the finding that he
had no reason to anticipate that the Cielo Bianco
would be turning further to port is based, as I read
the reasons, not on the information Captain Carl -
sen had at the time but on the view of the learned
Trial Judge which he expressed in the passage I
have already cited from his reasons and in an
earlier passage as well when he said:
... even if the Algobay had actually been aware of the inten
tion of the Cielo Bianco to proceed to Pointe Noire, as long as
the lights of the Cielo Bianco were open to the Algobay, having
regard to the distance between the ships at that time, and even
when they began to close and up to the time when they began
to open to port, the Algobay would still be entitled to assume
that the Cielo Bianco would allow it to pass and would turn to
port around its stern. [Emphasis added.]
That the master of the Algobay in fact relied on
such assumptions is apparent from his evidence.
He described what he saw initially of the masthead
lights of the Cielo Bianco as "when he was coming
in they were well open", he considered the situa
tion to be one of ships passing and that it would be
a normal port-to-port meeting situation unless the
Cielo Bianco, by radio-telephone, sought agree
ment with him to pass starboard-to-starboard. He
said in answer to a question on cross-examination:
A. I presume what I should be assuming is that he gave an
order of port wheel and put the ship half a head down,
now I know it today. But there was no point at the time
during that incident that I could visualise that the man
ordered a port wheel and half a head in his telegraph, and
particularly not when the ship was drawing aft on me. It
was impossible for me to visualise the man doing that. I
feel that, in that position, I had the right to assume that
being one ship in front of the other, that surely I could
have the right to assume that the man could look at my
ship as I could look at his; and I would appear in exactly
the same fashion as what I saw him appear.
The result was that relying on such assumption
and on the fact that the bearing of the Cielo
Bianco appeared to be increasing Captain Carlsen,
even while observing while on his 135° course that
the lights of the Cielo Bianco had begun to close
and continued to close to the point where they
were almost in line, took no action to ascertain
what in fact the Cielo Bianco was doing until,
some time after altering to 145°, on seeing the
lights open the Cielo Bianco's starboard side, he
attempted to call her on the radio-telephone. By
that time, however, there was nothing he could
effectively do to avoid the Cielo Bianco. He did
what he could to minimize the collision and in
light of the Trial Judge's findings he is not to be
faulted for the actions he took. But it seems clear
that had he not relied on his assumptions as to
what the Cielo Bianco was doing or would do he
would and should have been alerted by her con
tinuing change of direction toward his course that
something different from a normal port-to-port
passing could be and was in fact developing. At
any point in that period the risk might have disap
peared had the Cielo Bianco steadied on her
course but while Captain Carlsen may have hoped
and expected that that would happen he had noth
ing but his assumption on which to base the action
he took in continuing at increasing speed on his
135° course and then on his 145° course while the
direction of the Cielo Bianco, as indicated by her
falling off, was changing toward her path by some
25 to 28 degrees.
With respect, and indeed with hesitation as well
because of the fact that the learned Trial Judge
had the assistance of two experienced assessors, I
am of the opinion that the learned Trial Judge in
the passages I have cited from his reasons has
expressed and relied on a wrong rule in judging the
actions of the master of the Algobay. There may
have been every temptation for a master in his
situation to assume that those in charge of an
approaching ship had seen his ship and would act
in accordance with good seamanship and the
Regulations. It may indeed have been inconceiv
able to Captain Carlsen that in the circumstances
a ship of the proportions of the Cielo Bianco would
not have a proper look-out, would not have detect
ed the presence of the Algobay, would not keep her
course but would turn to port across the Algobay's
path.
But the Collision Regulations, as I read them,
do not allow a master to rely on such assumptions.
The Regulations are entitled "Regulations for
the Prevention of Collisions". They provide in
section 4 that:
4. The owner, master or person in charge of a vessel shall
ensure that the vessel complies with the Rules set out in
Schedule I and the provisions of Schedules II to VII. [Emphasis
added.]
Schedule I is entitled "International Regula
tions for Preventing Collisions at Sea, 1972" and
by section 3 they apply to every Canadian and
foreign vessel in the waters where the collision
occurred.
These Rules came into effect on July 15, 1977
[SOR/77-579]. They differ materially from the
earlier Rules which they replaced and should be
regarded as a new code. Jurisprudence developed
on the earlier Rules must therefore be regarded
with caution as the effect of the new Rules renders
at least some of it obsolete. See Bank of England
v. Vagliano Brothers. 9 This is so particularly in
relation to when risk of collision is to be deemed to
exist.
Under the heading "Steering and Sailing
Rules", Rules 5, 7 and 8 provide:
RULE 5
Look-out
Every vessel shall at all times maintain a proper look-out by
sight and hearing as well as by all available means appropriate
in the prevailing circumstances and conditions so as to make a
full appraisal of the situation and of the risk of collision.
RULE 7
Risk of Collision
(a) Every vessel shall use all available means appropriate to
the prevailing circumstances and conditions to determine if
risk of collision exists. If there is any doubt such risk shall
be deemed to exist.
(b) Proper use shall be made of radar equipment if fitted and
operational, including long-range scanning to obtain early
warning of risk of collision and radar plotting or equivalent
systematic observation of detected objects.
(c) Assumptions shall not be made on the basis of scanty
information, especially scanty radar information.
(d) In determining if risk of collision exists the following
considerations shall be among those taken into account:
(i) such risk shall be deemed to exist if the compass
bearing of an approaching vessel does not appreciably
change,
(ii) such risk may sometimes exist even when an appre
ciable bearing change is evident, particularly when
approaching a very large vessel or a tow or when
approaching a vessel at close range.
RULE 8
Action to avoid Collision
(a) Any action taken to avoid collision shall, if the circum
stances of the case admit, be positive, made in ample time
and with due regard to the observance of good seamanship.
(b) Any alteration of course and/or speed to avoid collision
shall, if the circumstances of the case admit, be large
9 ,[1891] A.C. 107 (H.L.), at pp. 144-145.
enough to be readily apparent to another vessel observing
visually or by radar; a succession of small alterations of
course and/or speed should be avoided.
(c) If there is sufficient sea room, alteration of course alone
may be the most effective action to avoid a close-quarters
situation provided that it is made in good time, is substan
tial and does not result in another close-quarters situation.
(d) Action taken to avoid collision with another vessel shall be
such as to result in passing at a safe distance. The effec
tiveness of the action shall be carefully checked until the
other vessel is finally past and clear.
(e) If necessary to avoid collision or allow more time to assess
the situation, a vessel shall slacken her speed or take all
way off by stopping or reversing her means of propulsion.
Rule 5 of these Rules is new. Earlier Rules had
not purported to set a standard for the look-out to
be kept by a vessel beyond saying that nothing in
the Rules should exonerate any vessel from the
consequences of neglect to keep a "proper" look
out. See Rule 29 of the 1965 Rules, P.C. 1965-
1552 [SOR/65-395]. Rule 2 of the present Rules
covers some of the subject-matter of Rule 29 of
the 1965 Rules but no longer refers to look-out.
Rule 7 is also substantially new. Indeed the only
portion of it that was in the earlier Rules is
subparagraph (i) of paragraph (d).
Except for paragraph (a), Rule 8 is also new. In
particular, Rule 8(e) is new in requiring any ves-
sel—not merely any vessel that is required to keep
out of the way of another—to slacken speed or
take all way off "if necessary to ... allow more
time to assess the situation". This may be com
pared with former Rule 23 which imposed the duty
only on a vessel directed by the Rules to keep out
of the way of another.
These Rules, as I read them, reflect the develop
ment of mechanical and electrical devices with
which both large and small modern ships are
equipped in aid of safe navigation. The Rules
require not only that a look-out be kept as required
by Rule 5 so as to make a full appraisal of the
situation and of the risk of collision but also that
all available means appropriate to the prevailing
circumstances and conditions be taken to deter
mine if risk of collision exists. If there is any doubt
such risk is to be deemed to exist and the ship
must act accordingly. For this purpose proper use
is to be made of radar equipment and assumptions
are not to be made on the basis of scanty
information.
Here, at the time the lights of the Cielo Bianco
were seen to be closing and throughout the period
of about eight minutes before he altered to 145°
and thereafter until the Cielo Bianco's lights came
in line and then opened her starboard side, Cap
tain Carlsen did not know where she was going.
He did not know why her lights were closing. He
did not know her speed. He had not had the
slightest indication that his ship had been seen by
the Cielo Bianco and no use was being made of the
Algobay's radar to determine precisely what the
Cielo Bianco was doing or how fast she was
moving so as to obtain early warning of risk of
collision. In short, his information was scanty. And
though Captain Carlsen knew her direction was
changing so as to bring her course closer to his and
he also knew she was a large ship, he continued to
rely, contrary to Rule 7(d)(ii), on the mere fact
that her bearing was increasing. In my view, in the
circumstances as described by Captain Carlsen, it
was incumbent on him from soon after the lights
of the Cielo Bianco began to close and thus to
indicate a change in her direction, that is to say,
while the Algobay was on her 135° course and
much earlier than her alteration to 145°, to
assume or deem that risk of collision existed, as in
fact it did, and since he could not at his speed and
in confined waters take on his own the sort of
positive action to avoid collision contemplated by
Rules 8(b) and 8(c), it was incumbent on him to
act as required by Rule 8(e) to slacken his speed
and, if necessary, to take all the way off his ship
until, by radio-telephone or otherwise, the inten
tion of the Cielo Bianco could be ascertained and
the risk of collision obviated.
I am accordingly of the opinion that the
Algobay cannot be absolved of fault in causing the
collision. In the critical period while she was on
her 135° course from the time when the masthead
lights of the Cielo Bianco were seen to be closing
her look-out was not up to the standard required
by Rule 5 as "all available means appropriate in
the prevailing circumstances and conditions" were
not being used so as to make a full appraisal of the
risk of collision. The radar was not being constant
ly attended and used to plot or ascertain the Cielo
Bianco's course and her speed. The radio-tele
phone was not used as, in compliance with Rule
7(a), it ought to have been used to contact the
Cielo Bianco to ascertain what her intentions were
and whether there was risk of collision. As previ
ously indicated, she proceeded on assumptions
based on scanty information. She disregarded the
counsel of Rule 7(d)(ii) that, where a large ship is
involved, risk of collision may exist despite an
appreciable bearing change. She should have
deemed risk of collision to exist shortly after
observing that the masthead lights of the Cielo
Bianco were closing and should have acted much
earlier than she did to try to contact the Cielo
Bianco by radio-telephone and failing contact to
slacken her speed or take her way off in order to
allow more time to assess the situation.
But in my view her fault was not of the same
degree as that of the Cielo Bianco, the fault of the
Cielo Bianco being much greater than that of the
Algobay. I would apportion 75% of the liability for
the collision to the Cielo Bianco and 25% to the
Algobay. I would vary the judgment accordingly.
Pre-judgment Interest
In dealing with this issue the learned Trial
Judge noted that the parties had agreed that inter
est to be included in the damages should run from
the date upon which expenses were incurred and
from the date when revenue was lost, as the case
might be. The parties had also agreed that the
average "prime rate", a term that refers to the rate
at which chartered banks will lend to their most
credit-worthy customers, as determined and pub
lished by the Bank of Canada, was 14.43% over
the period between November 1978 and the con
clusion of the trial in March 1984. Noting as well
that the respondent had indicated it would be
content with a rate between 14% and 14.43% and
that in the few months since the trial interest rates
had declined to some extent, the learned Trial
Judge fixed the rate at 14%.
The appellants' submission was that instead of
basing his conclusion on the average prime rate,
the learned Trial Judge should have fixed a rate
equivalent to the rate of interest paid each month
on monies deposited in Court. In support of this
position counsel relied on the decision of this Court
in Davie Shipbuilding Limited v. The Queen 10
where, in the absence of other material on which
to found a conclusion, the Court adopted a rate of
interest based on that paid on monies in Court.
The learned Trial Judge, after reviewing the
principle on which pre-judgment interest is includ
ed in the damages awarded in admiralty cases,
cited four respects in which the case before him
differed from that in the Davie Shipbuilding case
and reached the conclusion that, on the evidence
before him and the circumstances of the case, the
average of the prime bank rates would be the
fairest measure to apply.
That the rate of interest to be included is a
matter for the exercise of discretion by the trial
judge is well settled and I see no reason to think
that the Trial Judge erred in any respect in fixing
the rate at 14% from the times as agreed by the
parties to the date of his judgment, November 22,
1984. Accordingly, I would affirm that conclusion.
However, as the result of the judgment of the
learned Trial Judge was to deny recovery of any
damages on the appellants' counterclaim, he had
no occasion to deal with the rate of interest that
10 [19841 I F.C. 461.
should be included in any such damages after the
date of his judgment and specifically up to the
time when such damages might be held to be
recoverable in this Court. He did have occasion to
fix the rate of post-judgment interest which, on the
basis of the information at hand, he set at 14%. It
is common knowledge, however, that interest rates
have fallen dramatically in the meantime, a trend
which the learned Trial Judge noted in fixing 14%
rather than the average prime rate of 14.43%.
Information provided by the Registry, as set out
in the Appendix to these reasons, shows that in the
period from November 1978 to October 1984 the
monthly rate of interest earned by money in Court
rose, with some oscillations, from 9.24% in
November 1978 to 18.77% in August 1981, fell to
8.21% in may 1983 and thereafter rose again to
10.64% in October 1984. The average of these
monthly rates over this period was 11.44%, that is
to say, 2.56% less than the 14% fixed by the
learned Trial Judge for the same period.
In the period since then, that is to say from
November 1984 to February 1987, the average
rate of interest earned by money in Court has been
8.34%. Assuming that the average prime rate in
the same period has been higher than this rate and
that the difference has been approximately the
same as in the earlier period, I think it would be
fair to fix the rate of pre-judgment interest in the
period from November 1984 to February 1987 at
10.50%. The appellants will accordingly be entitled
to include in their damages on the counterclaim
simple interest thereon at 14% per annum from the
time when expenses were incurred or losses of
revenue were sustained to November 22, 1984, and
at the rate of 10.50% per annum from that date to
the date of this judgment.
Post-judgment Interest
That brings me to the question of post-judgment
interest which the learned Trial Judge, on the basis
of the average prime rates over the period of some
five and one-half years previous to the trial, fixed
at 14%. That of course involved an element of
forecast of what interest rates were likely to be in
the months ahead. In fact, as matters have turned
out, interest rates have been substantially lower
than 14% in the meantime.
That a court of appeal will interfere with a trial
judgment based to some extent on a forecast which
has not been borne out by subsequent events seems
to be well established. See Mercer et al. v. Sijan et
al.;" McCann v. Sheppard;' 2 Curwen v. James;"
and Murphy v. Stone Wallwork (Charlton) Ltd. 14
These are all cases on damage awards but the
principle is a broad one. It was applied by the
House of Lords in Attorney-General v. Birming-
ham, Tame and Rea District Drainage Board 15 in
confirming the dissolution by the Court of Appeal
of a perpetual injunction granted at trial. In my
opinion, it is broad enough to apply to a rate of
post-judgment interest fixed to some extent on the
basis of a forecast which, by the time an appeal is
heard, turns out to be wrong. I am also of the
opinion that the authority of this Court under
subparagraph 52(b)(î) of the Federal Court Act
[R.S.C. 1970 (2nd Supp.), c. 10] to give the
judgment that the Trial Division should have given
is broad enough to authorize the Court to give the
judgment which in its opinion is the appropriate
judgment to be given on the situation as it appears
at the time of the hearing of the appeal.
We were informed that, in order to stop the
accrual of further interest at 14%, the Trial Divi
sion judgment was in fact paid on September 6,
1985. In the nine-month interval, the average
monthly rate of interest earned on monies in Court
" (1977), 14 O.R. (2d) 12 (C.A.).
12 [197 3] 2 All ER 881 (C.A.).
13 [1963] 2 All E.R. 619 (C.A.).
14 [1969] 2 All E.R. 949 (H.L.).
15 [1912] A.C. 788 (H.L.), at p. 801.
was 8.93%. In the interval from September 1985 to
February 1987, it was 8.%. While adding 2.56%
would yield higher rates, having regard to the rate
of 10.50% which I have calculated should be
included in the damages to be assessed on the
appellants' counterclaim from November 22, 1984
to the date of this judgment, and on the basis of
facts relating to the decline in interest rates since
the judgment of November 1984 not known by the
learned Trial Judge, it would, I think, be fair to
both parties to fix the rate of post-judgment inter
est at the same 10.50% from November 22, 1984
and I would vary the judgment accordingly.
In the result, I would allow the appeal with costs
and
(1) vary the judgment so as to adjudge the
Algobay in fault for the collision to the extent of
25%, and the Cielo Bianco in fault to the extent
of 75%;
(2) vary the judgment so as to adjudge the
respondent entitled to recover 75% of its dam
ages and 75% of its costs of the action and the
appellants entitled to recover 25% of their dam
ages and 25% of their costs of the action and
that the said amounts be set off and judgment
entered for the difference in favour of the party
entitled to it;
(3) vary the rate of post-judgment interest to be
paid by the appellants on the judgment of
November 22, 1984, as varied by paragraph (2),
to 10.50% per annum;
(4) fix the rate of interest to be included in the
damages recoverable by the appellants at 14%
per annum from the time when expenses were
incurred and losses of revenues were sustained
to November 22, 1984, and at 10.50% per
annum from that date to the date of judgment
herein;
(5) fix the rate of interest to be paid on the
judgment to be entered for the difference
referred to in paragraph (2) at 10.50% per
annum.
PRATTE J.: I agree.
MACGuIGAN J.: I agree.
APPENDIX
STATISTICAL DATA
Interest Rate on Security Deposits (P.C. 1970-300)
1978 1979 1980 1981 1982 1983 1984 1985 1986 1987
January 9.70 12.19 15.14 13.02 8.58 8.76 8.56 9.02 6.93
February 9.71 12.19 15.18 13.09 8.46 8.78 9.51 10.40
March 9.80 12.91 14.97 13.35 8.29 9.20 9.97 9.44
April 9.76 14.18 15.13 13.56 8.29 9.51 8.93 8.32
May 9.75 11.76 16.52 13.57 8.21 10.14 8.60 7.57
June 9.74 9.77 16.95 14.45 8.32 10.48 8.42 7.74
July 9.84 9.10 17.34 14.24 8.32 11.53 8.25 7.46
August 10.19 9.16 18.77 12.97 8.41 10.99 8.12 7.50
September 10.41 9.57 17.81 11.93 8.34 10.87 8.06 7.49
October 11.40 10.41 16.58 10.60 8.30 10.64 7.72 7.49
November 9.24 12.25 11.46 14.28 9.65 8.38 9.83 7.85 7.45
December 9.37 12.27 14.52 13.33 9.23 8.72 9.12 8.17 7.39
APPENDICE
DONNÉES STATISTIQUES
Taux de l'intérêt payé sur les dépôts de garantie (C.P. 1970-300)
1978 1979 1980 1981 1982 1983 1984 1985 1986 1987
Janvier 9,70 12,19 15,14 13,02 8,58 8,76 8,56 9,02 6,93
Février 9,71 12,19 15,18 13,09 8,46 8,78 9,51 10,40
Mars 9,80 12,91 14,97 13,35 8,29 9,20 9,97 9,44
Avril 9,76 14,18 15,13 13,56 8,29 9,51 8,93 8,32
Mai 9,75 11,76 16,52 13,57 8,21 10,14 8,60 7,57
Juin 9,74 9,77 16,95 14,45 8,32 10,48 8,42 7,74
Juillet 9,84 9,10 17,34 14,24 8,32 11,53 8,25 7,46
Août 10,19 9,16 18,77 12,97 8,41 10,99 8,12 7,50
Septembre 10,41 9,57 17,81 11,93 8,34 10,87 8,06 7,49
Octobre 11,40 10,41 16,58 10,60 8,30 10,64 7,72 7,49
Novembre 9,24 12,25 11,46 14,28 9,65 8,38 9,83 7,85 7,45
Décembre 9,37 12,27 14,52 13,33 9,23 8,72 9,12 8,17 7,39
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.