This was a statutory appeal of a decision by the Administrator of the Ship-Source Oil Pollution Fund (SOPF) disallowing a claim filed by Haida Tourism Limited Partnership (West Coast Resorts) (Haida) under s 103(1) of the Marine Liability Act SC 2001 c 6 (the MLA) for its costs and expenses incurred to prevent, repair, remedy, or minimise ship-source oil pollution damage.

Haida was the owner and operator of an accommodation barge, the Tasu I, used as a sports fishing lodge. On 8 September 2018, the barge came loose from its mooring buoy and drifted to a grounding point in Bearskin Bay on Lina Island, British Columbia, where it released a mixture of gasoline and/or diesel. The barge was the only ship involved in the incident. Haida informed the Canadian Coast Guard and made efforts to mitigate the oil pollution damage. Haida subsequently submitted a claim to the SOPF for the costs and expenses which it had incurred. Haida claimed that the evidence pointed to an intentional and wilful tampering of the barge's mooring lines by a third party with the intent to cause damage, and that this provided it, as the shipowner, with a defence under s 77(3)(b) of the MLA. Accordingly, Haida claimed that it was entitled to be compensated by the SOPF for expenses incurred to mitigate oil pollution damage from its own ship. The Administrator denied Haida's claim. Haida appealed.

Held: The appeal is dismissed.

This appeal engages Pt 6 - Liability and Compensation for Pollution, and Pt 7 - Ship-source Oil Pollution Fund of the MLA. Division 1 of Pt 6 gives the force of law to the International Convention on Civil Liability for Bunker Oil Pollution Damage 2001 (the Bunkers Convention), the International Convention on Civil Liability for Oil Pollution Damage 1992 (the CLC 1992), and the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1992 (the Fund Convention 1992). Division 2 of Pt 6 of the MLA is concerned with liability not addressed by these international Conventions.

Section 77 of the MLA imposes strict liability on a shipowner for oil pollution damage from its ship, as well as for the costs and expenses incurred by the Minister of Fisheries and Oceans, or any other person in Canada in respect of measures taken to prevent, repair, remedy, or minimise oil pollution damage from the ship, including measures taken in anticipation of a discharge of oil from it, to the extent that the measures taken and the costs and expenses are reasonable, and for any loss or damage caused by those measures. Owners are also strictly liable for environmental damage. This strict liability of a shipowner under s 77 of the MLA is subject to certain limited exceptions, which mirror those of art 3 of the CLC 1992.

The Administrator stated that s 103(1) permits claims where persons affected by a spill have suffered loss, damage, costs, or expenses as described in certain provisions of Pt 6 of the MLA. The Administrator further stated that 'in all cases, the provisions referenced by subsection 103(1) are focused on the liability of a shipowner. This makes it conceptually challenging to understand how a shipowner might be entitled to make a subsection 103(1) claim.' The Administrator noted Haida's apparent answer to this, being the submission made by its counsel that 'one must not confuse liability of the shipowner under s 77 with reference to "costs and expenses" under s 77. They are 2 separate things.' The Administrator found this proposed interpretation to be problematic. Instead, the Administrator found that the explicit references to 'costs and expenses' in s 77 of the MLA , when read in their entire context, and taking into account all of the characteristics of those costs and expenses, do not provide a mechanism for shipowners to make a claim under s 103(1), as this would require an arbitrarily selective reading of s 77 to sever all references to a shipowner's liability. While a shipowner could suffer oil pollution damage and incur response-related costs and expenses stemming from an incident caused by its own vessel, an owner cannot suffer the 'loss, damage, costs and expenses referred to in paragraphs 77(1)(a) through (c) because those are damages for which an owner would presumptively be liable, and no entity can be liable to itself'.

Part 6 of the MLA creates an interwoven, international, strict liability regime whereby shipowners are presumptively, that is strictly, liable for oil pollution damage and related costs and expenses, including mitigative or preventative measures, arising from a discharge or anticipated discharge from their ships. Those provisions are also referred to in Pt 7 of the MLA, in s 101(1) and s 103(1), which permit persons who incur such ship source oil pollution damage to claim compensation either from the shipowner or the SOPF.

The Administrator correctly interpreted s 103(1) of the MLA to be a distinct claim process than that set out in s 101(1). Section 103(1) claims are made directly to the Administrator who is explicitly permitted to investigate and assess such claims considering only the two factors set out in s 105(3) - neither of which include whether a shipowner has a defence to its strict liability. This interpretation is also consistent with the objective and purpose of Pts 6 and 7 of the MLA: shipowners are strictly liable for ship-source oil pollution, and the underlying concept of 'polluter pays'. Section 103(1) operates on the premise that shipowners are presumptively strictly liable. It serves as a first recourse compensation regime which permits those who have suffered loss or damage or incurred costs or expenses referred to in ss 51, 71, or 77 of the MLA, art 3 of the CLC 1992, or art 3 of the Bunkers Convention, to make claims directly to the Administrator. A polluting shipowner cannot import a defence to liability available under the s 101(1) compensation regime to enable it to claim compensation under s 103(1). The Administrator correctly interpreted s 103(1) of the MLA as not creating a right for a shipowner to recover costs and expenses incurred to prevent, repair, remedy, or minimise potential oil pollution damage resulting from an incident caused solely by its own ship.