COMPENDIUM OF SUMMARIES OF JUDICIAL DECISIONS IN ENVIRONMENT RELATED CASES

CANADA

Canada - Liability of Company Officials, Admiralty Law, Aboriginal Claims

RE. SAUSE BROTHERS OCEAN TOWING CONCERNING AN OIL SPILL FROM THE BARGE THE "NESTUCCA" OFF THE COAST OF BRITISH COLUMBIA

(1991) 769 F. SUPP. 1147 (DOR.) UNITED STATES DISTRICT COURT

In December 1988, the tanker barge the "Nestucca" while being towed by a towing vessel, the "Ocean Service," spilled 850,000 litres of oil off the southern coast of Washington, causing damage to wildlife and to the environment along approximately sixty-seventy miles of Vancouver Island coastline. Both vessels were owned by Sause Brothers Ocean Towing Corporation, an American company. The oil spill left in its wake some 500,000 dead migratory birds and several dead sea otters and the oiling of numerous seals and sea lions. The shellfish and crab fisheries were closed and eel grass was destroyed.

In December 1988, when the oil spill occurred, the Canadian Government did not have authority to sue for clean-up costs and pollution damage resulting from an oil spill occurring outside of Canadian waters. Four months after the oil spill, new amendments to the Canada Shipping Act came into force with the result that the Federal Government received the authority to claim for clean-up costs and pollution damage caused within Canadian territory, the territorial sea and the fishing zones of Canada even though the spill occurs outside those waters.

Ocean Towing filed a limitation action in the United States Federal Court for the Eastern District of Oregon admitting liability for the casualty but seeking exoneration or limitation of liability.

The District Court rejected the petition to limit liability for the reasons that:

1. Ocean Towing was negligent when it failed to conduct an adequate inspection of the tow wire and to have an adequate and experienced crew. This contributed to the oil spill that occurred when the tug collided with a runaway barge and pierced the barge' s storage comnartment: and

2. It failed to show lack of privity or knowledge of the negligence.

Claims were filed by two native Indian bands, the Quetsino Band and the Nuu-chah-nulth Tribal Council (NTC), for clean-up costs and damages to their reserves and harvesting rights off reserve. The NTC claimed Can$ 23,656,344 for clean-up and opportunity costs, collective food loss and other environmental damage to the band members. The amount of the Quetsino band's claim is not known.

As permitted by the United States admiralty law the Federal and British Columbia Provincial Governments also applied to the United States Court for a share of the damage award, asserting that Ocean Towing's liability should not be limited. Their combined claim was Can$ 4,382,000 for clean-up costs and Can$ 3,349,500 for environmental damage.

In May 1992, after intensive negotiations supervised by the District Court, the claims of the Federal and Provincial Governments were settled with Ocean Towing. The NTC's separate claim in respect of environmental damage was a major impediment to the negotiations. In order to finally settle the matter, the Court directed that the parties negotiate among themselves the manner in which the environmental damage award would be divided.

The claim of the Quetsino band for environmental damage was not subject to negotiations because Ocean Towing challenged that claim on the grounds that it had been filed beyond the applicabIe limitation period. That claim awaits the court's decision.

Through court supervised negotiations, Ocean Towing agreed to settle the claims of the Federal and Provincial Governments and of the NTC.This included the full claim of clean-up costs of the Federal Government (Can$ 4,382,200), Can$ 3,349,500 for the environmental damage claim of the two Governments to be used for purposes of restoration of the environment (of which Can$ 1,600,000 would be paid by way of an annuity over a ten-year period); to the NTC Can$ 700,000 for its environmental claims and Can$ 505,000 for all the individual claims, commercial fishing claims and clean-up clairns The claim of the Quetsino band was not the subject of negotiation awaiting the court's decision on Ocean Towing's challenge thereto.

The Settlement Agreement along with a Full and Final Release of all claims was made an order of the United States District Court of Oregon, upon their execution in July 1992.