Dominion I (2014)

LOCATION:  Cowichan Bay, Vancouver Island

Case number: 120-613

The Administrator’s Annual Report 2012-2013 (sections 2.17 and 2.42) notes that the ex-fish-packing vessel Dominion I was involved in two previous incidents. In 2005, the Greater Victoria Harbour Authority filed a claim for oil pollution clean-up costs and expenses. Secondly, in 2011, the Canadian Coast Guard (CCG) filed a claim in response to an occurrence with the vessel while at anchor in Cowichan Bay, Vancouver Island. The Administrator assessed and settled both these claims.

On March 12, 2012, the Dominion I dragged anchor and came in contact with the anchored fishing vessel Polar Prince in Cowichan Bay. When the Coast Guard was notified of this new incident, they hired tugs to place the vessel alongside the wharf at Cowichan Bay terminals. Throughout the incident, the Dominion I did not release any pollutants. This incident involved removing the vessel from its anchorage and securing it at the Cowichan Bay docks with the assistance of a tug. On August 9, 2012, Coast Guard confirmed to the Administrator that they had removed 2,400 litres of accessible hydrocarbons from the vessel by way of a vacuum truck, but some 50,000 litres of oily waste remained on board.

On March 10, 2014, the Administrator received a claim from the Department of Fisheries and Oceans (DFO/CCG) in the amount of $220,937.25 for costs and expenses for measures taken in anticipation of a discharge of oil in respect of the incident of March 12, 2012.

Initially, the Administrator had some concerns whether these costs and expenses really related to a fresh incident or whether they were further costs and expenses arising out of the previous incident in respect of which compensation had already been paid. The Administrator was also concerned about whether, consequently, the claim had been filed within the prescription periods specified by the Marine Liability Act (MLA). On the advice of counsel, he concluded that the claim related to a fresh incident and that the claim, accordingly, had been filed within the prescription period for filing claims mandated by the Act.

On examination of the documentation filed in support of the claim, the Administrator noted that it was not complete and on September 25, 2014, he requested in writing further particulars. In particular he had concerns about justification for the moorage charges, some $154,074.00, paid to Western Stevedoring for keeping the vessel alongside at Cowichan Bay wharf for over a year. Also, the documentation submitted in support of the claim did not include particulars of a clear plan to deal with the alleged threat of pollution posed by the vessel. There was also a lack of explanation as to why the vessel dragged its anchor and collided with the fishing vessel, Polar Prince.

On October 30, CCG responded to the request for further information. It seems that the moorage of the vessel at the Western Stevedoring wharf for such a long period of time related to lengthy negotiations with PWGSC to issue a request for proposals to remove the oil and deconstruct the vessel. No serious effort was made to find alternative locations to tie up the vessel that might have been less costly. It also became clear that besides the initial measures to secure the vessel and remove some of the oil, nothing further was done to the vessel.

At the conclusion of his investigation of the documentation filed in support of the claim, and taking into account the further explanations provided by CCG, the Administrator concluded that bringing the vessel alongside for an initial period to remove readily accessible hydrocarbons and re-anchor the vessel was a reasonable measure. However, the decision to leave the vessel alongside at the Cowichan Bay wharf at significant cost ($300.00 per day), without exploring cheaper options and in the absence of any real plan to deal with the supposed threat the vessel posed was not reasonable. The Administrator noted that in the end, the shipowner residing in the United States, towed the vessel out of the jurisdiction, June 22, 2013, with the approval of Transport Canada and with some 50,000 litres of oily waste remaining on board. At this point, it must be assumed that she no longer constituted a threat and since nothing had been done to remove the remaining oily waste on board during most of the time she remained tied up, it is open to conjecture whether she remained a pollution threat once the initial securing of the vessel and removal of accessible hydrocarbons had been completed.

On March 19, 2015, the Administrator informed the Coast Guard that the investigation and assessment of the claim was completed, and on the basis of his finding, the amount of $65,000.00 was found to be established. The amount essentially reflected the initial costs and expenses incurred in the measures taken in response to the actual threat of oil pollution. The Administrator considers that 20 days of moorage alongside at Cowichan Bay would have been a reasonable period for Coast Guard to assess the situation and prepare the vessel for re-anchoring at a cheaper location. For convenience of reference, the Administrator provided Coast Guard with a schedule reflecting the amounts that were allowed, as well as a description of the reductions and disallowed amount of the claim. Accordingly, the offer of $65,000.00, inclusive of interest, was made as full and final settlement of the claim conditional on receiving the included duly executed Release and Subrogation Agreement.

On May 15, 2015, a letter of acceptance was received but it did not include the requested executed Release and Subrogation Agreement. Coast Guard advised that the Commissioner is considering options on how to proceed with respect to the Release and Subrogation Agreement. On May 19, 2015, the Administrator informed Coast Guard senior management that he would not proceed with requisitioning of funds until he is in receipt of the duly executed Release and Subrogation Agreement that was enclosed with the offer.

On November 9, 2016, the Administrator paid the Department of Fisheries and Oceans $65,000.00 in settlement of their claim. On November 29, 2016, the Administrator after consideration of advice from Counsel that there was little potential for successful cost recovery concluded that all reasonable measures to recover the amount of the payment from the owner of the ship had been taken and subsequently closed the file.