Location: Sibell Bay on Vancouver Island
Case number: 120-657
The incident occurred on May 31, 2014, when the ex-fishing vessel Maryjack sank in Sibell Bay on Vancouver Island. On June 2, the Canadian Coast Guard (CCG) informed the Administrator that the 60-foot wooden hull vessel was discharging oils. The CCG Environmental Response personnel deployed an oil containment and sorbent boom, and was in the process of engaging a salvor to raise and remove the pollutants from the wreck. Coast Guard estimated the response measures to be in the order of $57,500.00.
When the initial CCG notification was received, the Administrator instructed counsel to engage a marine technical surveyor to attend during the recovery operation. He was assigned to independently assess whether the measures taken by CCG and the salvor were reasonable under the circumstances. The surveyor was also instructed to talk directly with the principals involved.
On June 16, the surveyor reported to the Administrator that CCG personnel had captured over 1,000 litres of hydrocarbons prior to June 4, but that the upwelling of oil continued. As a result, Coast Guard engaged Public Works and Government Services Canada (PWGSC) to procure bids and put in place a contract for salvage of the wreck in order to prevent a further discharge of oil. A PWGSC contract was awarded to Saltair Marine Services Ltd. Coast Guard informed the surveyor that the awarded contract was based on time and materials with a $68,000.00 ceiling. The contract included refloating, hauling, deconstruction, and disposal of the vessel. The refloating of the vessel commenced on the morning of June 5. Saltair Marine mobilized two spud barges with cranes aboard. To assist with the refloating, the prime contractor hired divers from Westcoast Divers Ltd. They rigged basket slings near the forward and aft ends of the Maryjack.
After the old fishing vessel was raised to the surface, an inspection revealed that all interior bulkheads of the wooden hulled 1927 built ex-fishing vessel were heavily contaminated by hydrocarbons. The hull planks were rotting and the beams and frames were saturated with oil. It was apparent that the hull was unseaworthy and the oil contaminated material within the vessel presented a potential of future oil pollution. On August 14, 2014, the Administrator was informed by counsel that the Maryjack had been deconstructed.
On July 10, 2015, the Canadian Coast Guard, on behalf of the Department of Fisheries and Oceans (DFO/CCG), filed a claim with the Administrator for costs and expenses incurred in the amount of $94,689.51, pursuant to the Marine Liability Act (MLA). On July 14, receipt of the claim was acknowledged.
After investigation and assessment of the claim, on November 13, 2015, the Administrator made a final offer to DFO/CCG for the established amount of $86,228.70, plus interest, as full and final settlement pursuant to the Act. Coast Guard was informed that interest will be calculated upon receipt of acceptance of the offer. Enclosed with the letter of offer was a Release and Subrogation Agreement to be executed on behalf of the Coast Guard. The letter also advised that the Administrator will not proceed with requisitioning the transfer of funds until he receives the duly executed Release and Subrogation Agreement.
On December 18, 2015, a letter of acceptance of the offer was received. However, it did not include the requested Release and Subrogation Agreement. Coast Guard advised that with respect to the Agreement, the Commissioner is considering options on how to proceed. On December 21, the Administrator again informed Coast Guard that he will not proceed with the requisitioning of payment of this claim until he is in receipt of a duly executed Release and Subrogation Agreement.
The Administrator and the Commissioner of the Canadian Coast Guard met and it was subsequently agreed to use this particular incident to bring closure to the unresolved issue of Coast Guard providing the Administrator with an executed Release and Subrogation Agreement prior to receipt of the claim payment.
On October 7, 2016, the Administrator brought a referral to the Federal Court, to determine whether the Administrator has the right to require a claimant to execute the Release and Subrogation Agreement as a condition precedent to payment of the claim. The hearing is scheduled for April 26, 2017 and the ﬁle remains open.