Federal Court Decisions

Date: 20050726

Docket: T-1602-95

Citation: 2005 FC 1011

BETWEEN:

                                                   JOSE PEREIRA E. HIJOS, S.A.

                                              and ENRIQUE DAVILA GONZALEZ

                                                                                                                                             Plaintiffs

                                                                           and

                                         THE ATTORNEY GENERAL OF CANADA

                                                                                                                                           Defendant

                                                    REASONS FOR JUDGMENT

GIBSON J.

INTRODUCTION

[1]                On the 9^th of March, 1995, at or about 18:15 (6:15 p.m.)^[1], armed boarding parties from three (3) or four (4) Canadian vessels boarded the Spanish deep-sea freezer-trawler ESTAI (the "ESTAI") within the Northwest Atlantic Fisheries Organization ("NAFO") Regulatory Area, which is to say outside Canadian fishery waters or, put another way, on the high seas. The boarding parties, which may have included members of a Royal Canadian Mounted Police ("RCMP") emergency response team, arrested the ESTAI. They requested that the Master of the ESTAI cooperate and take his vessel to St. John's, Newfoundland. They advised him that if he did not cooperate, they would take his vessel to St. John's in any event. Enrique Davila Gonzalez ("Captain Davila"), a co-plaintiff and Master of the ESTAI, agreed to cooperate. The ESTAI, accompanied by a number of Canadian vessels, proceeded toward St. John's at full speed. The events of the 9^th of March, 1995 leading up to the arrest of the ESTAI are of interest. Based on the testimony of the Master of one of the Canadian vessels taking part in the boarding and arrest, they will briefly be recited here.

[2]                Very early on the morning of the 9^th of March, 1995, the two hundred and five (205) foot Canadian fisheries patrol vessel Cape Roger, was steaming east in Canadian fishery waters in the NAFO Convention Area, close to the demarcation line between Canada's two hundred (200) mile fishery zone and waters outside that zone. For ease of reference, an outline map is attached to these reasons as Annex I.^[2] The map depicts the east coast of Canada, and the Northern United States, the west coast of Greenland and the NAFO Convention Area of the adjacent seas, divided into fishery subareas. The map also indicates the outside limit of Canada's fishery zone. The Cape Roger was accompanied by the Leonard J. Cowley, another Canadian fisheries patrol vessel, the Sir Wilfrid Grenfell, a Canadian coastguard vessel, the Chebucto, a Canadian Department of Fisheries and Oceans vessel out of the Department's Maritime Region in Nova Scotia and the Terra Nova, a naval vessel, all apparently with the support of a Canadian reconnaissance aircraft.

[3]                At or about 02:30 hours, the Cape Roger exited from NAFO's fishery subarea 3L inside Canadian fishery waters to the same fishery subarea outside Canada's fishery waters.

[4]                By a rather circuitous route, the Cape Roger and accompanying vessels reached their target, then identified as the ESTAI, by about 13:52 hours. At that point in time, both the Canadian vessels and the ESTAI were in NAFO fishery subarea 3L and on the deep waters of Flemish Pass between Flemish Cap to the east and Canadian fishery waters to the west. The ESTAI was engaged in deep-water fishing for Greenland halibut^[3] with its net extending behind it secured to the ESTAI by two (2) long lengths of heavy cable.

[5]                More than an hour earlier, the Cape Roger had removed from its gun locker two (2) 50 calibre guns and two hundred (200) rounds of ammunition. The guns were mounted on the deck of the Cape Roger.

[6]                By 13:58 hours, the Cape Roger was alongside, but at a safe distance from, the ESTAI. Its boarding craft, a "fast rescue craft" with a rigid hull, inflated collar and a one hundred and fifty (150) horsepower diesel engine, was in the water close alongside the Cape Roger. Not more than two (2) minutes later, the boarding craft, with an armed boarding team, was clear of the Cape Roger and on its way to the ESTAI.    It arrived at the ESTAI within three (3) minutes and mounted its boarding ladder on the side of the ESTAI. There was no clear evidence before the Court that any prior warning of the proposed boarding had been given to the ESTAI.

[7]                Boarding team members, of which there were either six (6) or eight (8), the evidence is unclear, wore floatation suits and Kevlar soft body armour. They were equipped with MP5 submachine guns or machine pistols, semi-automatic in operation and utilizing 9 millimetre ammunition.

[8]                The boarding was resisted. Crew members of the ESTAI threw the boarding team's ladder back into the water, cut the warps (that is to say, the cables attaching the ESTAI's fishing net to the ship) and the ESTAI began to run.

[9]                The Leonard J. Cowley was the first of the Canadian vessels to take off in hot pursuit of the ESTAI. At least the Sir Wilfrid Grenfell and the Cape Roger followed. The RCMP emergency response team on board the Sir Wilfrid Grenfell was requested to "take over" in the event of another attempted boarding. The course of the ESTAI and of the pursuing Canadian vessels was slightly south of east, that is to say, further out to sea.

[10]            Sometime in the afternoon, the Cape Roger received a message from the ESTAI indicating that it, that is to say, the Cape Roger, was too close to the ESTAI and was putting the ESTAI and its crew in danger.

[11]            By 16:00 hours, the chase was going on in dense fog. Other Spanish vessels were apparently attempting to obstruct the boarding and arrest of the ESTAI. By 17:00 hours, the ESTAI and pursuing vessels crossed into fishery subarea 3M. By 17:17 hours, the Leonard J. Cowley was "moving in" on the ESTAI. At 17:40 hours, the Sir Wilfrid Grenfell had activated its water cannon and directed its stream at the ESTAI. In later testimony, the Chief Engineer aboard the ESTAI testified that he feared that the effect would be to flood the engine room and frozen fish holds of the ESTAI. Perhaps at some risk to himself, to minimize the risk of flooding, the Chief Engineer secured hatches on deck that had been open.

[12]            By 17:45 hours, the Cape Roger received authority to fire warning shots. It raised its "Lima" signal flag indicating an intention to board. Canadian vessels were manoeuvring at very close quarters. The Master of the Cape Roger, in his testimony, expressed retrospective concern about the risks that were being taken.

[13]            At or about 17:50 hours, the ESTAI apparently advised the Canadian vessels that it was not going to stop. There may have been communication with the ESTAI from one of the Canadian vessels that had a Spanish interpreter on board. The ESTAI appealed to another vessel in the same general area that had a NAFO inspector on board. The NAFO inspector contacted one of the Canadian vessels to inquire what was going on. The Canadian vessel responded but provided no relevant information.

[14]            At or about 17:57 hours, warning shots were fired from at least one of the Cape Roger's guns "across the bow", that is to say, in front of, not over, the bow of the ESTAI. When the guns and the remaining ammunition were returned to the Cape Roger's gun locker, it was determined that twenty-three (23) rounds had been fired.

[15]            Following the warning shots, by approximately 18:00 hours, the ESTAI had stopped. Boarding craft and armed boarding teams were immediately mobilized on board and along side three (3) or four (4) of the Canadian ships. Armed boarding teams, perhaps including members of the RCMP emergency response team, were prepared and proceeded to the ESTAI, under the illumination of flares. They boarded without incident. As earlier indicated, the Captain of the ESTAI cooperated in turning his ship towards St. John's. Apparently the voyage to St. John's took place without animosity between the Spanish officers and crew members and the Canadian boarding team members that remained on board. Indeed, at the request of Captain Davila, shortly after the boarding, the Canadians put their guns away.

[16]            The ESTAI and the Cape Roger, after sailing at a very slow pace through ice conditions, and in the company of at least some of the other Canadian vessels, arrived in St. John's on the afternoon of Sunday the 12^th of March, 1995. More will be said about the short stay of the ESTAI, its Master and crew in St. John's and of discoveries and events following the return of the ESTAI to its home port of Vigo, Spain, later in these reasons.

[17]            An index to the headings and subheadings used throughout these reasons is attached as Annex V.

THE STATEMENT OF CLAIM

[18]            This action was commenced by Statement of Claim filed on behalf of the corporate owner of the ESTAI, and of its Master, Captain Davila, on the 28^th of July, 1995. In the final iteration of the Statement of Claim, filed the 30^th of April, 2003, the Plaintiffs state that:

-            the first attempted boarding of the ESTAI by Canadian Fisheries Officers on the 9^th of March, 1995 was unlawful in that the ESTAI was a Spanish ship in international waters and was clearly identified by flag, home port name and side number as being a Spanish ship;

-            the pursuit of the ESTAI by the Cape Roger resulted in the Cape Roger coming "dangerously close" to the ESTAI, thus putting its crew in danger in an "unlawful" manner and constituted an "unlawful trespass" by the Defendant on the high seas;

-            other Canadian vessels were involved in the "unlawful" pursuit in international waters, at times in dense fog, thus contributing to the danger;

-            the "unlawful" use by the Defendant's vessel Sir Wilfrid Grenfell of its water cannon constituted an "unlawful trespass" against the Plaintiffs and their vessel ESTAI on the high seas;

-            the gun-fire from the Cape Roger was "unlawful" and constituted a further trespass by the Defendant on the Plaintiffs and their vessel;

-            the boarding at or about 18:15 hours by armed boarding teams constituted a further "unlawful trespass" on the high seas;

-            the arrest of Captain Davila and of the ESTAI was "unlawful" as was the order directing the ESTAI to proceed to St. John's;

-            the direction that the ESTAI be sailed through a field of "multi-year Arctic ice" over the objection of Captain Davila caused damage to the ESTAI;

-            both the ESTAI and Captain Davila were not provided in St. John's with a reasonable time to instruct counsel concerning charges laid against them, contrary to paragraph 10(b) of the Canadian Charter of Rights and Freedoms^[4] (the "Charter");

-            Captain Davila, on Sunday afternoon, the 12^th of March, 1995, while in St. John's was "...forced to walk through a gauntlet of hostile demonstrators who had remained behind after the conclusion of a public demonstration..." and during the course of the walk, was "...abused, jostled and subjected to obscenities and an assault was committed when eggs were thrown at [him]..." thus breaching a duty on the part of Canadian authorities to protect him; such breach of duty was compounded by negligent failure to make prior arrangements to have the Court House door unlocked, whereby the abuse, jostling, obscenities and assaults continued;

-            the crew of the ESTAI was "unlawfully" evicted from the ESTAI resulting in damages to the Plaintiffs; and

-            the Plaintiffs further suffered losses by reason of the requirement that bail be posted both in respect of Captain Davila and the ESTAI, by reason of the off-loading and retaining of frozen fish from the ESTAI and by the seizing of all ship's documents from the ESTAI. Further and other damages were suffered by the Plaintiffs by reason of the "unlawful" actions of the Defendant.

In addition, a claim under section 15 of the Charter was asserted on behalf of Captain Davila by reason of alleged discrimination "...on the basis of race and on the basis of national origin and on the basis of ethnic origin...".

[19]            The Plaintiffs further assert in their statement of claim that regulations made by the Governor-in-Council on the 3rd of March, 1995,^[5] "...making Spanish and Portuguese... vessels subject to Canadian Law on the high seas beyond the 200 mile limit [were] ultra vires the regulation making authority conferred on the Governor-in-Council by section 6 of the Coastal Fisheries Protection Act".^[6] Interestingly, at least from this judge's perspective, the Plaintiffs do not challenge the jurisdiction of Parliament to enact amendments to the Coastal Fisheries Protection Act, including amendments to section 6, in the terms in which they were enacted in May of 1994. More will be said about this later in these reasons.

[20]            Finally, the Plaintiffs allege that the Defendant engaged in improper activity in the councils of NAFO to, in my words, "set the stage" for the dramatic events of the 9^th of March, 1995.

[21]            In the result, the Plaintiffs seek special damages, general damages, punitive damages, aggravated damages, and interest "...upon maritime law principles or alternatively pursuant to applicable legislation." Finally, the Plaintiffs seek their costs of this action on a "solicitor and own client basis."

[22]            The Plaintiffs served and filed a Notice of Constitutional Question in the following terms:

The Plaintiffs intend to question the constitutional validity, applicability or effect of Regulations made by the Governor-in-Council on March 3^rd, 1995 purporting to regulate fishing activities of Spanish Fishing Vessels in International Waters beyond the 200 mile economic zone of Canada.

Only the Government of Newfoundland and Labrador indicated an interest in the question. Counsel on behalf of that Government appeared at the opening of trial and reserved the right to make submissions at the close of the trial. Counsel for the Government of Newfoundland and Labrador appeared when argument commenced following the closing of the evidentiary portion of the trial and withdrew his Government's interest in making submissions.

THE STATEMENT OF DEFENCE

[23]            In his Amended Statement of Defence, filed the 22^nd of May, 2003, the Defendant admitted certain of the facts alleged in the Plaintiffs' Further Amended Statement of Claim but more generally denied all of the remaining allegations contained therein. His Amended Statement of Defence concludes with a request that the Plaintiffs' claim be dismissed with costs.

THE STATEMENT OF AGREED FACTS

[24]            On the 31^st of December, 2004, counsel for the Plaintiff provided to the Court a "Trial Record" which included an Agreed Statement of Facts. For whatever reason, the Agreed Statement of Facts does not extend to all of the factual allegations contained in the Plaintiff's Further Amended Statement of Claim that were admitted to on the face of the Amended Statement of Defence. Nor does it extend to a range of Admissions apparently reflected in transcripts of examinations for discovery to which the Court was not taken during trial. Most if not all of the "Agreed Facts" are reflected in what follows in these reasons. Nonetheless, for ease of reference, the substance of the Agreed Statement of Facts is reproduced as Annex II to these reasons.

BACKGROUND

1)         The Northwest Atlantic Fisheries Organization

[25]            Canada is a "Contracting Party" to a Convention entitled Convention on Future Multilateral Cooperation in the Northwest Atlantic Fisheries^[7] (the "Convention"), "Done" at Ottawa on the 24^th of October, 1978. Canada's Instrument of Ratification was deposited on the 30^th of November, 1978 and the Convention came into force on the 1^st of January 1979. Article II of the Convention provides for the establishment of the Northwest Atlantic Fisheries Organization with its headquarters at Dartmouth, Nova Scotia, "...or at such other place as may be decided by the General Council." At all times relevant to this action, NAFO's headquarters was at Dartmouth, Nova Scotia. Article II of the Convention reads in part as follows:

1.             The Contracting Parties agree to establish and maintain an international organization whose object shall be to contribute through consultation and cooperation to the optimum utilization, rational management and conservation of the fishery resources of the Convention Area. This organization shall be known as the Northwest Atlantic Fisheries Organization, hereinafter referred to as "the Organization", and shall carry out the functions set forth in this Convention.                                                                                                                          [emphasis added]

[26]            The preamble to the Convention recites the background to the Convention and emphasizes the objective of encouraging international cooperation and consultation with respect to fishery resources. It reads as follows:

The CONTRACTING PARTIES,

NOTING that the coastal States of the Northwest Atlantic have, in accordance with relevant principles of international law, extended their jurisdiction over the living resources of their adjacent waters to limits of up to two hundred nautical miles from the baselines from which the breadth of the territorial sea is measured, and exercise within these areas sovereign rights for the purpose of exploring and exploiting, conserving and managing these resources;

TAKING into account the work of the Third United Nations Conference on the Law of the Sea in the field of fisheries;

DESIRING to promote the conservation and optimum utilization of the fishery resources of the Northwest Atlantic area within a framework appropriate to the regime of extended coastal State jurisdiction over fisheries, and accordingly to encourage international cooperation and consultation with respect to these resources;

HAVE AGREED as follows:                                                                                                                                                                                                      [emphasis added]

[27]            "The Convention Area", that is to say the Area to which the Convention applies, is defined. By reference to Annex I to these reasons, it is the Area adjacent to the east coast of Canada and the northern United States as far south as 35 ^° 00' north latitude and the eastern and southern coasts of Greenland and extending as far east as 42 ^° 00' west longitude. The Convention Area is divided into seven (7) fishery subareas, each subdivided into a number of further subareas. The subareas where the events and activities here at issue took place are 3L, which is partly within Canadian fishery waters and partly outside those waters, and 3M, which is entirely outside Canadian fishery waters. The part of the Convention Area that, in the words of the Convention, "...lies beyond the areas in which coastal States exercise fisheries jurisdiction", is defined as "the Regulatory Area". Thus, certain of the events and activities described in the introduction to these reasons took place in the Regulatory Area.

[28]            The Convention provides for the establishment, among other bodies, of a Scientific Council and a Fisheries Commission within NAFO. The functions of the Scientific Council include provision of a forum for consultation and cooperation among the Contracting Parties and the provision of scientific advice to "coastal States" and to the Fisheries Commission. The Fisheries Commission is responsible within NAFO for "...the management and conservation of the fishery resources of the Regulatory Area". In pursuance of that function it is responsible for the establishment of maximum quotas that limit the annual catch of various species of fish by Contracting Parties, and for the allocation of the established annual allowable catches, or quotas, to Contracting Parties.

[29]            Article XI.4 of the Convention provides the following guidance to the Fisheries Commission:

Proposals adopted by the Commission for the allocation of catches in the Regulatory Area shall take into account the interests of Commission members whose vessels have traditionally fished within that Area, and, in the allocation of catches from the Grand Banks and Flemish Cap, Commission members shall give special consideration to the Contracting Party whose coastal communities are primarily dependent on fishing for stocks related to these fishing banks and which has undertaken extensive efforts to ensure the conservation of such stocks through international action, in particular, by providing surveillance and inspection of international fisheries on these banks under an international scheme of joint enforcement.

              [emphasis added]

[30]            In the years up to and including 1994, no total allowable catch ("TAC") or quota was established by the Fisheries Commission with respect to Greenland halibut. Thus, no quota allocations with respect to Greenland halibut were made to the Contracting Parties. All of that changed for 1995, thus setting the stage for the actions and events giving rise to this litigation.

[31]            Quota allocations adopted by the Fisheries Commission are, on adoption, simply "proposals". The Convention provides that such proposals shall be transmitted by the Executive Secretary of NAFO to all Contracting Parties with the document of transmission indicating the date of transmittal. Unless an objection to any such proposal is taken by a Contracting Party, the proposal becomes a measure binding on Contracting Parties on a date of entry into force determined by the Commission.

[32]            Article XII of the Convention provides for the filing of objections to allocation proposals and for their impact. It reads in part as follows:

If any Commission member presents to the Executive Secretary an objection to a proposal within sixty days of the date of transmittal specified in the notification of the proposal by the Executive Secretary, the proposal shall not become a binding measure until the expiration of forty days following the date of transmittal specified in the notification of that objection to the Contracting Parties. Thereupon any other Commission member may similarly object prior to the expiration of the additional forty-day period, or within thirty days after the date of transmittal specified in the notification to the Contracting Parties of any objection presented within that additional forty-day period, whichever shall be the later. The proposal shall then become a measure binding on all Contracting Parties, except those which have presented objections, at the end of the extended period or periods for objecting. If, however, at the end of such extended period or periods, objections have been presented and maintained by a majority of Commission members, the proposal shall not become a binding measure, unless any or all of the Commission members nevertheless agree as among themselves to be bound by it on an agreed date.

[33]            Finally for the purposes of this matter, the Convention provides for a scheme of joint international enforcement within the Regulatory Area. Article XVIII of the Convention reads as follows:

The Contracting Parties agree to maintain in force and to implement within the Regulatory Area a scheme of joint international enforcement as applicable pursuant to Article XXIII or as modified by measures referred to in paragraph 5 of Article XI. This scheme shall include provision for reciprocal rights of boarding and inspection by the Contracting Parties and for flag State prosecution and sanctions on the basis of evidence resulting from such boardings and inspections. A report of such prosecutions and sanctions imposed shall be included in the annual statement referred to in Article XVII.

[emphasis added]

[34]            The European Economic Community, later the European Union, was a Contracting Party to the convention from its coming into force, as was Spain. In 1986, Spain joined the European Economic Community and its participation in NAFO was thereafter subsumed in that of the Community, although it remained responsible for prosecution of infractions of NAFO rules and regulations alleged to have been committed by its vessels.^[8]

2)          The United Nations Convention on the Law of the Sea, 1982

[35]          The preamble to the NAFO Convention notes that it was made taking into account the work of the Third United Nations Conference on the Law of the Sea in the field of fisheries. The Defendant's sole witness at trial, Mr. Bob Applebaum, testified that he was heavily involved on behalf of Canada in the United Nations Conference on the Law of the Sea which extended through the 1970's and the early 1980's and gave rise to the United Nations Convention on the Law of the Sea of 1982. Mr. Applebaum further testified that he was particularly involved with the negotiations that gave rise to the adoption of the 200 nautical mile Exclusive Economic Zone, earlier referred in these reasons, in the case of Canada, as the area of Canada's fishery waters or fishery zone. Mr. Applebaum testified that Canada adopted a 200 mile limit, apparently in anticipation of the results of the United Nations Conference. More will be said on this subject later in these reasons in the commentary on Canada's Coastal Fisheries Protection Act.

[36]            The United Nations Convention on the Law of the Sea, 1982, was signed by Canada and subsequently ratified by Canada at a point in time that was after the time of the events and activities here at issue.

[37]            In his testimony, Mr. Applebaum made specific reference to the following provisions of the Convention:^[9]

-            Article 3 providing that every State has the right to establish the breadth of its territorial sea up to a limit not exceeding 12 nautical miles, measured from baselines determined in accordance with the Convention;

-            Part V dealing with States' Exclusive Economic Zones and, more particularly, Article 57 providing that a State's Exclusive Economic Zone may not extend beyond 200 nautical miles from the baselines from which the breadth of the State's territorial sea is measured; and

-           Articles 87 to 90 dealing with freedom of the high seas. Article 87 to 90 are of particular relevance to this matter and are in the following terms:

Article 87

Freedom of the high seas

1.         The high seas are open of all States, whether coastal or land-locked. Freedom of the high seas is exercised under the conditions laid down by this Convention and by other rules of international law. It comprises, inter alia, both for coastal and land-locked States :

                (a)            freedom of navigation;                                                               

(b)            freedom of overflight;

                (c)            freedom to lay submarine cables and pipelines, subject to Part VI;           

(d)           freedom to construct artificial islands and other installations permitted under international law, subject to Part VI;

(e)            freedom of fishing, subject to the conditions laid down in section 2;

(f)            freedom of scientific research, subject to Parts VI and XIII.

2.             These freedoms shall be exercised by all States with due regard to the interests of other States in their exercise of the freedom of the high seas, and also with due regard for the rights under this Convention with respect to activities in the Area.

Article 88

Reservation of the high seas for peaceful purposes                                                                   The high seas shall be reserved for peaceful purposes.

Article 89

Invalidity of claims of sovereignty over the high seas                                                                  No State may validly purport to subject any part of the high seas to it's sovereignty.

Article 90

                                                                                                                                                       Every State, whether coastal or land-locked, has the right to sail ships flying its flag on the high seas.

3)          The Coastal Fisheries Protection Act and Relevant Regulations^[10]

[38]            Prior to May 25, 1994 when amendments to the Coastal Fisheries Protection Act (the "Act") came into effect, the Act purported to regulate the activities of foreign fishing vessels, and some of the activities of Canadian fishing vessels that interrelated with the activities of foreign fishing vessels, in Canadian fishery waters. The Act defined "Canadian fisheries waters" to mean "...all waters in the fishing zones of Canada, all waters in the territorial sea of Canada and all internal waters of Canada". While the terms "waters in the fishing zones of Canada", "waters in the territorial sea of Canada" and "internal waters of Canada" are not defined in the Act, I interpret the term "Canadian fisheries waters" to include all coastal waters of Canada out to the 200 mile limit of Canada's economic zone or fishery waters or zone.

[39]            By the amendments to the Act^[11] that came into force the 25^th of May, 1994, one aspect of the Act was substantially broadened in scope. Definitions of the expressions "NAFO Regulatory Area" and "straddling stock" were added to section 2 of the Act. The new definition "NAFO Regulatory Area" was consistent with what has been described earlier in these reasons as to the scope of that expression. "Straddling Stock" was defined to mean a "prescribed stock of fish" which is to say any stock of fish prescribed by regulations made by the Governor-in-Council under the authority of the Act. It was not in dispute before me that Greenland halibut could be described as a "straddling stock" given that, historically, Greenland halibut have been fished within Canadian fisheries waters and that, for some years prior to 1995, Greenland halibut were extensively fished in the deep waters within the NAFO Regulatory Area.

[40]            The following sections were added to the Act:

From the closing words of section 5.1 that have been emphasized, I am satisfied that it can be assumed that Parliament was aware that Canada had agreed to Article XVIII of the Convention providing for "...flag State prosecution and sanctions..." for offending fishing vessels in the NAFO Regulatory Area and that the provisions of the new section 5.2 were, arguably at least, inconsistent with the international regulatory scheme.

[41]            The regulation making authority of the Governor-in-Council was substantially broadened by the adding of the following paragraphs to section 6 of the Act:

[42]            Authority to board and inspect fishing vessels, without restrictions as to nationality, was afforded to "protection officers" in respect of ships found, not only within Canadian fisheries waters, but also within the NAFO Regulatory Area. "Protection officers" was already defined to mean fishery officers and members of the RCMP, as well as any other person authorized by the Governor-in-Council to enforce the Act. If it was believed on reasonable grounds to be necessary, the use of force was authorized. The offence and punishment provisions of the Act were broadened and consequential amendments were made extending the application of Canadian criminal law.

[43]            A summary of the amendments to the Act was published in the relevant volume of the Statutes of Canada together with the amending act. That summary was in the following terms:

[44]            The Parliamentary history relating to the amending act is of interest. Although it was not referred to in argument before the Court, at the close of that argument, the Court commented on the failure to refer to it and sought leave of counsel to itself refer to the Parliamentary history. Counsel did not object. The Court acknowledges that "Parliamentary history" is of limited evidentiary value and should be relied upon with caution. That being said, I am satisfied that, for the purposes of this matter, it is instructive background.

[45]            Bill C-29, the Bill proposing the foregoing amendments to the Act, proceeded through the House of Commons with remarkable speed. It was apparently given first reading on the 10^th of May, 1994. On the 11^th of May, it came on for second reading. Following a rather extensive speech by the then Minister of Fisheries and Oceans, the Bill not only received second reading, consideration in Committee of the Whole, report from Committee, report stage, concurrence in the report of the Committee, but also third reading and passage.^[12] The Minister's speech made no reference to vessels bearing flags of NAFO states. Rather, after speaking of the sacrifices made by Canadian fishers for conservation purposes, in a fairly typical passage, the Minister stated:

...and even as that sacrifice is made to restore this resource for future generations, watching a handful of what we call flag of convenience pirate vessels targeting those same endangered species that we Canadians have set aside to be saved to rebuild this fragile resource. I say to the pirates their day has come and we are going to stop that kind of predatory action. We are going to stop that kind of exploitation.^[13]

Vessels flying either of the flags of Spain or Portugal could hardly have been considered to be "...flag of convenience pirate vessels..." in the NAFO Regulatory Area.

[46]            Later in his speech, the Minister commented:

We do not want to confront a single vessel on the high seas. We do not want to interfere with a single crew, wherever it comes from whatever flag of convenience it flies on the high seas. But we will confront and we will arrest and we will seize and we will prosecute each and every one if they do not pull up their nets and leave this zone [the NAFO Regulatory Area].^[14]

[47]            The Minister was briefly questioned during the proceedings following his second reading speech. One member in opposition posed the following question:

I have spoken with fishermen and other contacts in the eastern provinces. The general consensus is that people are very pleased to see this long overdue legislation. There is some concern however about whether the legislation goes far enough since there are foreign vessels fishing off the 200-mile limit under flags such as Spain and Portugal and not just flags of convenience.

My question to the minister during the course of the review would be will the government be able to deal with these vessels as well? My sense is that these sorts of restrictions will be imposed on members of the Northwest Atlantic Fisheries Organization. The minister has affirmed that this legislation will address this very important question to those people in Atlantic Canada.^[15]

[48]            The Minister did not respond directly to the foregoing question, if indeed it can be taken to be a question. However, following his statement and, at least inferentially, questions by opposition Members, he essentially closed the debate with the following statement:

...Essentially the bill gives the government the enabling power, by amending the current Coastal Fisheries Protection Act, to act outside 200 miles in a manner consistent with how we act inside 200 miles.

Generally when this kind of enabling legislation is proposed and passed by Parliament it gives legislation legal effect. Regulations will be published exactly as occurs with respect to any other piece of legislation. When those regulations are published they will be made public and will be available for the scrutiny of the member and all members of the fisheries standing committee.

With respect to the specific question as to what is meant by vessels of a prescribed class, it is simply a reference that allows the government to prescribe or designate a class, a type or kind of vessel we have determined is fishing in a manner inconsistent with conservation rules and therefore against which conservation measures could be taken.

For example, we could prescribe stateless vessels. Another example is that we could prescribe flags of convenience. That is all that is meant. Those regulations will be available to the member, to his party, and to the fisheries committee.^[16]                                                                                                             [emphasis added]

It is perhaps worthy of note that, when Canada took action on the 9^th of March, 1995, the regulations purporting to authorize that action, enacted the 3^rd of March, 1995, had not been published.

[49]            Clearly the Minister's focus in the House of Commons remained on stateless vessels and vessels flying flags of convenience. While he did not rule out the application of the amendments to vessels flying flags of NAFO member states, he equally clearly made no specific reference to such vessels.

[50]            A news release issued on behalf of the Minister of Foreign Affairs and the Minister of Fisheries and Oceans on the 10^th of May, 1994, the day of introduction in the House of Commons of the Bill to amend the Act, was equally non-committal on the scope of the Bill, restricting its specific references to action against vessels without nationality and to flag-of-convenience vessels. The press release referred to such vessels as constituting "...the major threat to the conservation of straddling stocks". The press release went on to note that Canada had, the same day, "... amended its acceptance of the compulsory jurisdiction of the International Court of Justice in the Hague to preclude any challenge which might undermine Canada's ability to protect the stocks." It noted that the foregoing was a "...temporary step in response to an emergency situation." Canada's amendment of the acceptance of compulsory jurisdiction of the International Court of Justice was later relied upon to defeat litigation in that Court in relation to the events here at issue.

[51]            The Bill was debated in the Senate on the 12^th of May, 1994, that is to say, the day after it passed through the House of Commons. Before the Senate, the Minister of Fisheries and Oceans made several references to the Bill being applicable to the "tail and nose" of the Grand Banks, areas of the Grand Banks that are outside Canada's 200 mile fishery zone. The events here at issue did not take place on either the "tail" or the "nose" of the Grand Banks, but rather in deep water areas. That being said, during the debate, the following exchange took place between Senator Phillips and the Minister of Fisheries and Oceans:

Senator Phillips: You mentioned, Mr. Minister, area 2J and the increased Greenland halibut catch off the continental shelf there. I was surprised to learn that the increase was as extensive as it is. Will these vessels, which are moved from the Tail and Nose of the Grand Banks move up to start fishing off area 2J?

Mr. Tobin: [Minister of Fisheries and Oceans] ...

The halibut stock to which you refer has moved off into the area designated as the Nose and into the slope of the bank where the continental shelf begins to drop off into deeper water. That is where those fish seem now to be congregating . For Canadian fisherman, it means that the fish which were once abundant inside the line - and here I am speculating, and scientists will say that they are speculating because the evidence is not conclusive - appear to have moved off into deeper water where the temperatures are warmer than is the case inside. However, there is already a huge directed fishery on that halibut stock. We, are concerned about it. We think the fishing effort is too large. The stock cannot sustain that kind of directed effort.

We have raised with NAFO, and I have raised with the European fisheries commissioner, the question of the health of Greenland halibut or turbot. We have raised the possibility of regulating this unregulated fishery to ensure that we do not beat it down, as has already occurred with northern cod and other flatfish stocks.^[17]

[52]            With regard to the issue of application of the amending legislation and subsequent regulations to NAFO member flagged vessels, the following exchange took place between Senator St-Germain and the Minister of Fisheries and Oceans:

Senator St- Germain: ...In Minister Ouellet's [the Minister of Foreign Affairs] statement he stated that we are dealing with fishing pirates. Are we dealing only with them? ...

Mr. Tobin:[Minister of Fisheries and Oceans]

...

With respect to the nations of the world, let us come to the question of NAFO,... . We sit. We meet. We share science. We undertake research jointly. We share data back and forth. We jointly and collectively set quotas. We set individual sharing of the quotas for individual nations, and we set conservation rules. Each of us is responsible for ensuring that our fleets within our nation states abide by the quotas, and abide by the rules that have been established jointly by NAFO member states.

If there are examples, and there have been, of NAFO member vessels not abiding by the rules, it is up to each and individual member country [sic] to bring its vessels back into compliance. We have the means to achieve compliance within a negotiated agreement and within a multilateral organization. It does not always work perfectly; sometimes it works less perfectly than Canada would like, but there is an organization there. We say to our NAFO partners, when we find that vessels from the member states are not complying totally, "Please bring those vessels into compliance." So we can deal with those nations; theoretically there it is.^[18]                                                                                                                           [emphasis added]             

[53]            On the issue of alleged overfishing by Spain and Portugal, the following exchange took place between Senator Comeau and the Minister of Fisheries and Oceans:

Senator Comeau:

...

I want to ask a question, Mr. Minister, concerning the setting of quotas by the European Community. Do I understand now that the states of Portugal and Spain, which traditionally have been the most reluctant to accept NAFO quotas, now readily accept quotas that are in keeping with what we believe are sound management quotas?

Mr. Tobin: [Minister of Fisheries and Oceans]

...

Your specific question is about Spain and Portugal, Senator. There is an important distinction to be made here. Spain and Portugal, indeed, live within NAFO quotas. Spain and Portugal participate fully as NAFO member states.

Having said that, it is true that some individual vessels, primarily from Portugal, become reflagged. They go to Panama, Honduras or Sierra Leone and obtain a flag of convenience in order to continue to fish without any regulation. However, we in this country must be careful not to say that because a Portuguese vessel reflags, that Portugal is a villain.

...

It used to be ... that in the mid-1980s, even when NAFO set a quota for the European Union, the European Union would use what is called the "objection procedure" and unilaterally set its own quotas, and set them far higher than the NAFO quotas. The European Union at that time, in my mind, was fishing in a manner totally inconsistent with sound conservation principles. That is what the European Union did in the mid-eighties. That is not the case today, although it is still the case that some individual vessels reflag out of the European fleet and fish in a manner we want to put a stop to with this legislation.^[19]                                                                                                                                                          [emphasis added]

[54]            Later, in response to a concern by Senator Stewart, regarding the concept "class of foreign fishing vessel", the Minister of Fisheries and Oceans responded in part:

...Because we cannot anticipate what kind of factory freezer trawler or what other kind of technology may be displaced elsewhere in the world and may find its way to the Nose and Tail, we have left the description broad enough that regulations could be made to apply to any class.

[55]            The Minister went on to acknowledge that "we have given ourselves a very substantial authority."^[20]

[56]            Senator Stewart further enquired whether regulations enacted pursuant to the amendments would be made available for review "...as soon as they are ready to be gazetted". The Minister responded in the affirmative.^[21] A diligent search of Senate records turned up nothing to indicate that the relevant regulations enacted in May of 2004 and, perhaps more importantly, the regulations enacted on March 3^rd, 2005, were in fact tabled in the Senate on an expedited basis.

[57]            Senator Andreychuk expressed concern about "...situations of hot pursuit and that sanity sometimes does not prevail in those situations...". He expressed the hope that the Minister would "...give careful thought to our law enforcement officers. For the first time they will be in international waters in what I believe is a questionable, international, legal environment." The Minister responded:

Let me give you even greater assurance. It is our intention not to sneak up in the dead of night and collar everyone we can collar. To the contrary, it is our intention to state publicly, clearly, loudly and often, first, that we have the authority given by Parliament today, second, that we have the will and means to use that authority and, third, that we will ask those who are in violation of any sane or sensible conservation regime to leave. It would be our intention to say that publicly and clearly now, to say it a week before we intend to take enforcement action, to say it the day of the enforcement action.

Any vessel that is willing to leave can leave. Any vessel that persists after all those steps have been taken and those warnings given will be arrested, seized and prosecuted to the full extent of the law.^[22]

[58]            The foregoing exchanges took place in the Senate in Committee of the Whole. Following the exchanges, the Bill was reported without amendment, first and second reading having earlier taken place. Third reading apparently followed with, as earlier noted, Royal assent being given the same day.

[59]            Regulations under the authority of the amending legislation were enacted and registered on the 25^th of May, 1994^[23]. They were published in an "extra" of the Canada Gazette, Part II on the 31^st of May, 1994^[24]. They extended the authority of "protection officers" outside Canadian fishery waters to "vessels without nationality", a defined term, and to foreign fishing vessels flying flags of Belize, Cayman Islands, Honduras, Panama, St-Vincent and the Grenadines and Sierra Leone with respect to "straddling stocks" defined to include Greenland halibut in NAFO fishery subareas 3L, 3M, 3N and 3O. No evidence came before the Court of the exercise of the extra-territorial authority conferred on protection officers by the May, 1994 Regulations and the amended Coastal Fisheries Protection Act under which they were enacted.

[60]            The regulations under the Coastal Fisheries Protection Act were further amended on the 3^rd of March, 1995 and registered that day as SOR/95-136. The amending regulations were not published in the Canada Gazette until the 22^nd of March, 1995. The further amendments applied to straddling stocks located in NAFO fishery subareas 3L, 3N and 3O and the relevant straddling stocks were again defined to include Greenland halibut. The states whose vessels were prescribed to be subject to unilateral enforcement action by protection officers were extended to include Portugal and Spain. Notice of the enactment of the extending Regulations was given to the European Union. Spain withdrew its fishing vessels from the relevant fishery subareas into international waters outside the NAFO Regulatory Area. Following consultations that Spanish authorities and the corporate plaintiff considered to be appropriate, Spain's fishing vessels that had been withdrawn were ordered to return to fishing within the relevant fishery subareas of the NAFO Regulatory Area. Those vessels included the ESTAI.

[61]            The events of March 9^th that are recounted in the introduction to these reasons followed.

4)         Some further background and precipitating events from June, 1994 to and including February 1995

[62]            As referred to earlier in quotations from comments of the Minister of Fisheries and Oceans before the Senate on Bill C-29 to amend the Coastal Fisheries Protection Act, in the mid-1980's, Canada took exception to the regular use by the European Community of the objection procedure entrenched in the Convention to "circumvent" quota allocations proposed by the NAFO Fisheries Commission and to establish its own "autonomous" quota allocations in the NAFO Regulatory Area. Such autonomous quotas, in Canada's view, negatively affected NAFO's efforts to achieve effective conservation and sustainable exploitation of fishery resources subject to the NAFO regulatory regime.^[25]                                                         

[63]            In the early 1990s, on fishery matters at least, the relationship between Canada and the European Community improved. In late 1992, Canada and the European Community negotiated an extensive "Memorandum of Understanding" on fisheries relations which included the following provisions:

...

1.             The Parties have agreed:

(a)            to cooperate to support effective conservation and sustainable exploitation of north-west Atlantic fisheries resources;

(b)           to comply with the decisions of NAFO on fisheries management and conservation, in accordance with their rights and obligations under the NAFO Convention;

(c)             to support the adoption by the NAFO Fisheries Commission of management and conservation measures which are in conformity with Article XI of the NAFO Convention, having regard to the cooperative manner in which Canada and the Community contributed to management and conservation decisions reached at the 1992 annual NAFO meeting. As required by the foregoing Article, Canada shall continue to inform the Fisheries Commission of its management and conservation measures and decisions;

(d)           to identify ways to encourage further economic and commercial cooperation between Canadian and Community fisheries interests;

(e)            to consult with a view to presenting joint proposals, without prejudice to international rights and obligations, in time for consideration at the 1993 annual NAFO meeting on:

-               a dispute settlement mechanism to resolve disputes between NAFO Contracting Parties that may arise from use of the objection procedure in a way which might affect adversely the attainment of the objectives of the NAFO Convention,

-                measures to prevent fishing in the NAFO Regulatory Area by vessels flying the flags of States which are not Contracting Parties to the NAFO Convention which affect adversely the attainment of the objectives of the NAFO Convention, in particular measures applicable to such flag States which do not take effective and timely action with respect to the fishing activities of their nationals or vessels in the NAFO Regulatory Area,

-                further measures including the possibility of preventing imports of fish caught in the NAFO Regulatory Area by vessels flying the flags of States which are not Contracting Parties to the NAFO Convention;

(f)             to apply measures to deter re-flagging of their vessels to flags of States which are not Contracting Parties to the NAFO Convention for the purpose of fishing in the NAFO Regulatory Area contrary to NAFO conservation and enforcement measures;

(g)             to cooperate on the implementation and improvement of measures to ensure effective surveillance and inspection of fishing activity in the NAFO Regulatory Area so that agreed management measures are respected;

(h)           to work together within NAFO on development and implementation of further measures to improve the balance between fishing effort and legitimate fishing possibilities and to take domestic action as necessary to ensure effective implementation of such measures;

(i)            to establish a Joint Committee of Senior Officials to meet as necessary but at least once a year to review the operation of the Agreement and the implementation of their respective undertakings by the Parties;

(j)            to ensure appropriate enforcement of NAFO conservation and enforcement measures and their own regulations applicable to fisheries by their vessels in the NAFO Regulatory Area;

--              beginning in 1993, the Community shall exercise at least the same degree of control over Community vessels as in 1992 to ensure that their catches do not exceed quotas, by closing fisheries when quotas are deemed to have been exhausted and by endeavouring to limit fishing effort (number of vessels and fishing days) in relation to quotas and other legitimate fishing possibilities so as to ensure effective surveillance and control;

(k)           to continue to have fisheries patrol vessels in the NAFO Regulatory Area for inspections under the NAFO Scheme of Joint International Inspection and Surveillance subject to operational requirements;

--              to this end, for 1993 the European Commission intends to assign a fisheries patrol vessel to the NAFO Regulatory Area for a period of 10 months as in 1992,

--              in the absence of a Community patrol vessel and, when practicable for both Parties, the European Commission will assign fisheries inspectors to carry out NAFO inspection duties from a Canadian patrol vessel; and

(l)            to continue to carry out in 1993, and without prejudice to subsequent years by mutual agreement, quarterly reviews of Canadian and Community surveillance and inspection activities and data, including reports of catches by their vessels in the NAFO Regulatory Area so as to ensure accurate and timely determination of the actual uptake of quotas.^[26]

While the Memorandum of Understanding never came into force and effect by reason of strenuous objections to its terms that were taken in Canada, it nonetheless demonstrated a significant atmosphere of cooperation, at least between the European Community and the Government of Canada.

[64]            In a briefing note for the Minister of Fisheries and Oceans dated the 18^th of January, 1994 entitled "Is the European Union (formerly the "EC") in compliance with its NAFO obligations? The following background statement appeared:

1.             The EU, [the European Union, formerly the European Community] like Canada, has accepted all the NAFO conservation rules, has incorporated them in its laws, and has assigned personnel and resources to enforce them. This is a total turnaround from the situation in the past, when the EC allowed its vessels to ignore the NAFO conservation rules.

2.             Individual EU vessels do commit violations in the NAFO Regulatory Area just as individual Canadian vessels do inside 200 miles. Canadian and EU enforcement personnel are conducting regular inspections of EC vessels and, where violations are detected, the EU is taking action within its judicial processes. This is exactly what we do to enforce Canadian fisheries regulations.

3.             People who claim that EU vessels are continuing to overfish outside 200 miles may not understand that EU vessels are fishing certain stocks, like Greenland halibut, that are not under any NAFO quota limitations, so they are not breaking any NAFO rules.^[27]                                                                                                                                             [emphasis added]

[65]            In the same document and with particular reference to the third paragraph just quoted, the following paragraph appears:

The major threat from the EU in 1994 in the NAFO regulatory area, in addition to 3NO cod, is the result of the lack of NAFO regulations on Greenland halibut. The EU cannot be blamed for this. Canada still does not have a consensus on a Greenland halibut policy outside 200-miles and therefore has not proposed any measures for NAFO consideration.

[66]            Following a request from the Minister of Fisheries and Oceans to the Fisheries Resources Conservation Council, on the 20^th of June, 1994, the Council reported to the Minister on its findings regarding Greenland halibut in NAFO fishery subareas 0, 1, 2 and 3. Its report concluded in the following terms:

The Fisheries Resource Conservation Council believes that, to ensure a future for this valuable stock, Greenland halibut in Subareas 0, 1, 2 and 3 inside and outside Canada's 200-mile fisheries zone must be managed by a comprehensive conservation management plan. The fishing pressures tolerated, and the conservation initiative taken, should be "precautionary" in nature and should be applied with "consistency" throughout the full range of the stock.

[67]            Among its recommendations were the following:

1.             Find a permanent solution to regulate Greenland halibut and to significantly reduce fishing effort and catches by foreign vessels in the NAFO Regulatory Area outside the Canadian 200-mile limit in Subarea 3.

2.             Strive to limit, to the extent practical, total catches in Subareas 2 and 3 to the 25,000t maximum annual level previously recommended by the FRCC, until scientific evidence is available to advise differently.

...

4.             Discontinue any reference to Greenland halibut as being an underutilized or underexploited stock as it is, in fact, overexploited.

...                                                                                               ^[28]

[68]            The Fisheries Resource Conservation Council was, at the time of the report, a council made up of industry representatives and some scientists from outside government. It was established to give the Minister of Fisheries and Oceans independent advice on concerns with the management of fisheries off Canada's east coast.

[69]            The fishery subareas referred to in the foregoing quotation are subareas of the NAFO Convention Area and are clearly identified in Annex I.. Subarea 3 includes the area where the ESTAI was fishing on the morning of March 9, 1995.

[70]            In the summer of 1994, the NAFO Scientific Council made a rather tentative recommendation with regard to the establishment of a maximum total allowable catch for Greenland halibut in the NAFO Regulatory Area. The Scientific Council concluded that, in respect of subareas 2 and 3, any catch level above 40,000 tonnes for 1995 (status quo prediction including the catches by non-Contracting Parties) would be inadequate to restrain the fishery. Concern was expressed that based on some of the available stock indicators, the catch in 1995 should be substantially lower to halt the decreasing biomass trend.

[71]            Following consultations with representatives of the fisheries industry on the east coast of Canada and with concerned provinces, Canada approached preparations for the 16^th Annual Meeting of the Fisheries Commission of NAFO, held at Dartmouth, Nova Scotia from the 19^th to the 23^rd of September, 1994, with a mandate to secure a NAFO imposed total allowable catch ("TAC") with respect to Greenland halibut. Imposition of a total allowable catch for Greenland halibut would constitute the first TAC in respect of an unregulated species since shortly after the establishment of NAFO. Consultations with representatives of the Canadian fisheries industry and of concerned provinces went beyond the issue of establishment of a TAC to the issue of allocation of shares of that TAC to NAFO member nations. The result of the consultation was to urge Canada to pursue a major share of the TAC based on relatively long term historical catches rather than on short-term catch rates which would substantially favour the European Union.

[72]            At the meeting in September, 1994 of the NAFO Fisheries Commission, Canada presented a document consisting of a series of graphs.    For ease of reference, the graphs^[29] are attached to these reasons as Annex III. The first two graphs demonstrate a rather dramatic decline in the Greenland halibut biomass inside the Canadian 200 mile fishery area with the decline being particularly dramatic in respect of Greenland halibut of spawning age. The third graph demonstrates the relatively small proportion of the Greenland halibut biomass inside the Canadian 200 mile fishery area that was taken as catches. The fourth and fifth graphs demonstrate the dramatic decline in the Greenland halibut biomass and the Greenland halibut biomass of spawning age in the NAFO Regulatory Area. Finally, the last two graphs demonstrate the declining rate of Greenland halibut catches inside Canada's 200 mile fishery area and the rapidly escalating catches of Greenland halibut in the NAFO Regulatory Area, commencing with the opening of the Greenland halibut commercial fishery in the NAFO Regulatory Area in 1990. Relatively small catches in the three (3) years prior to 1990 represent the period when the Greenland halibut fishery in the NAFO Regulatory Area was being conducted on an experimental basis only.

[73]            The NAFO Fisheries Commission adopted for 1995 a total allowable catch of Greenland habilut within the NAFO Convention Area of 27,000 tonnes. The report of the Fisheries Commission reflected the following minute:

6.11          Greenland halibut 2+3

On the basis of the EU's understanding of the best scientific advice, the Representative of the EU proposed a TAC of 40,000 tons. There was no support for this proposal.

The Representative of Norway proposed in the spirit of compromise a TAC of 27,000 tons. The Representatives of Russia and Canada supported this proposal.

A catch limitation of 27,000 tons was adopted by the Fisheries Commission. The European Union abstained.^[30]

[74]            It is worthy of note that of all proposals that were before the NAFO Fisheries Commission and that are reported on in Exhibit D-31, the foregoing is the only minute adopted with an abstention. All other proposals recorded were adopted by consensus. Thus, the stage was set for the determination of the allocation of the total allowable catch of Greenland halibut in NAFO fishery subareas 2 and 3. That issue was not addressed at the 16^th Annual Meeting of the Fisheries Commission.

[75]            The Court is prepared to assume, based upon the totality of the evidence before it, that "positioning" in relation to the allocation of the total allowable catch of Greenland halibut in NAFO subareas 2 and 3 was carried on between the time of the Fisheries Council decision regarding total allowable catch and the time of a special meeting of the Fisheries Commission at the end of January and the beginning of February, 1995 at which the allocation was made. Certainly, the evidence before the Court tends to bare this out with respect to the European Union and Canada. Some evidence of this "positioning," as I regard it, follows.

[76]            By letter dated the 22^nd of December, 1994, the Head of Delegation of the Commission of the European Communities wrote to the Minister of Fisheries and Oceans in response to a letter from the Minister dated the 24^th of November, apparently dealing with the issue of "fisheries monitoring" within the NAFO Regulatory Area. The Head of Delegation concludes in the following terms:

Implicating the European Union on the basis of disputable evidence could make it more difficult to find solutions to the real problems. I hope, on the contrary, that there will be growing cooperation between Canada and the European Union to strengthen the application of NAFO rules. You may rest assured that we will make every effort to ensure compliance with the NAFO Convention within the framework provided by UNCLOS.

In my opinion, increased cooperation between the European Union and Canada is more necessary than ever, given the problems facing the fisheries in the NAFO area. The agreement negotiated over two years ago now, initialled in December 1992 and April 1993, and approved on the European side by the Council in December 1993, constitutes the best possible framework for such cooperation. I am increasingly concerned that after intensive efforts on both sides to conclude the negotiation of this Agreement, its application is constantly being postponed. I can only call upon Canada once again to resolve as soon as possible the difficulties that have so far prevented ratification.^[31]

The "agreement" referred to in the second quoted paragraph is the "agreement" initialled in December 1992 and quoted at length in paragraph [63] of these reasons that never come into force by reason of concerns in Canada.

[77]            In a briefing note for the Minister of Fisheries and Oceans dated the 5^th of January,1995, a document referred to during trial by counsel for the Plaintiffs as the "smoking gun" document, officials responded to an apparent request from the Minister on the issue of maximum potential Canadian catch of Greenland halibut in 1995 in NAFO fishery subareas 2 and 3. The first two paragraphs of the note are in the following terms:

At a January 3, 1995 meeting with officials to discuss your upcoming European trip you asked what amount of 2+3 Greenland halibut Canadian fishermen would be able to catch in 1995. You also asked if management arrangements could be worked out to maximize the Canadian catch.

Both the TAC [Total Allowable Catch] and Canadian catches in this area have decreased significantly since 1984. In 1984 the TAC was 75,000t with a Canadian catch of 19,805t; in 1993 the TAC was 50,000t with a catch of 2,656t; in 1994 the TAC was 6,500t with a catch of 2,896t (preliminary data).^[32]

[78]                In the same Note, under the heading "Current Status", the following paragraph appears:

A couple of years ago the landed price for turbot was around 30 cents/pound; it is now around $1/pound. This, coupled with the favourable exchange rate, the lack of other species to fish and a continuing surplus capacity means that our effort on this stock could increase 4-5 times in 1995.

[79]            The Note concludes in the following terms:

In summary, the total Canadian catch in 1995 will depend upon the following factors:

•                availability of resource;

•                above economic indicators;

•                the numbers of fishermen we think will fish the resource if the fishery is conducted under the normal groundfish management plan policies;

•                we split our NAFO quota appropriately, but not necessarily equally, between Sub-areas 2 and 3.

Given the right combination of the above, it is possible that Canadian catches in 1995 could go as high as 15-20,000t, if such a quota was available.                                                                                                                           [emphasis in the original]

[80]            The foregoing conclusion is in stark contrast with the earlier notation based on preliminary data that the 1994 catch was 2,896t. Counsel for the Plaintiffs urged that this Note demonstrated that Canada was approaching the determination of the allocation of the total allowable catch of Greenland halibut in NAFO subareas 2 and 3 for the 1995 year on the basis of "pure economic greed", rather than on the basis of principles related to the preservation and conservation of the fishery stock.

[81]            Over date of the 23^rd of January, 1995, officials again wrote to the Minister of Fisheries and Oceans advising of the results of a meeting "with advisors" held in St. John's, Newfoundland on the 17^th of January, again with regard to the subject of allocation of Greenland halibut total allowable catch for 1995. The outcome of the meeting had apparently been a proposal to "split" the TAC. Officials noted:

This is a very complex proposal that would be difficult to explain and justify in the very short time period available through the series of bilaterals necessary to deal with it; some of the NAFO members would insist they have no instructions to deal with this approach;^[33]

Alternative proposals were put forward to the Minister.

[82]            The Fisheries Commission of NAFO met in special meeting at Brussels, Belgium on the 30^th of January, and the 1^st of February, 1995. The principal item on its agenda would appear to have been the allocation to Contracting Parties of quotas for 1995 Greenland halibut in subareas 2 and 3 of the NAFO Convention Area. The representative of Cuba apparently put forward a proposal which, "...in light of additional discussions..." he withdrew in favour of a new proposal that would provide for the following distribution:

6.44          Canada - 16,300t or 60.37%, the EU - 3,400t or 12.59%, Russia - 3,200t or 11.85%, Japan - 2,600t or 9.63%, others - 1,500t or 5.56%.^[34]

[83]            Exhibit D-32, the Report of the Fisheries Commission, Special Meeting of the 30^th of January and the 1^st of February, 1995, includes the following paragraph:

6.45          The Representative of Canada noted that considerable flexibility had been shown by Canada in the following four steps towards a consensus: 1) while Canada could have justified 89-90% of the TAC, it initially claimed 75%, 2) Canada had been willing to accept a proposal made by Cuba ...providing Canada with about 65%, 3) Canada made a proposal ...for 62.22% , and 4) Canada was willing to accept a new proposal by Cuba ... which provided Canada with 60.37%. He complimented the Cuban representative for his efforts in seeking a solution. He proposed that the Cuban proposal be put to a vote.

[84]            Later in the same document, the following paragraph appears:

6.53          The Chairman concluded that a majority of the Parties favoured a vote. In accordance with NAFO practice he called a vote on the most recent proposal. The allocation key as presented by the Cuban representative ...was adopted. The vote was carried by six Parties in favour (Canada, Cuba, Iceland, Japan, Norway, Russia). Two Parties abstained (Denmark (on behalf of the Faroe Islands), and the Republic of Korea and five Parties opposed (Estonia, the EU, Latvia, Lithuania and Poland.).

[85]            Once again, the evidence before the Court was that the vote called was not in keeping with the normal manner of disposition of matters before the Fisheries Commission. Further, such a split vote was most unusual. That being said, in the result, Canada obtained a quota for 1995 far exceeding any reasonably recent annual catch of Greenland halibut achieved by Canadian fishery interests, and far exceeding any annual catch in recent years within the portion of subareas 2 and 3 of the NAFO Convention Area that is within Canadian fishery waters. It was not in dispute before me that Canada had never, up until 1995, engaged in the Greenland halibut deep water fishery in the NAFO Regulatory Area and further that Canadian fishery interests did not have vessels capable of effectively fishing for Greenland halibut in the deep waters of that Area. I am satisfied that there was no reliable evidence before the Court that Canada had access to any such vessels.

[86]            Five days after the quota allocation decision was reached by the Fisheries Commission, that is to say on the 6^th of February, 1995, the Minister of Fisheries and Oceans wrote to the European Union Commissioner for Fisheries in part in the following terms:

As you know, the NAFO decision on Greenland halibut quota allocations was supported by a large majority of longstanding NAFO members with substantial fisheries in the NAFO area - Norway Japan Russia Iceland and Cuba, as well as Canada. The decision will, accordingly, be understood by the international community as reflecting NAFO traditions and practices, as well as the provisions of the NAFO convention which provide for special consideration for Canada in the allocation of catches from the Grand Banks and Flemish Cap.

I appreciate the difficulties the NAFO decision will cause for the Spanish and Portuguese fleets. Canada's fleets have also faced severe cutbacks because catch levels which were too high had to be cut back drastically. As this is the first NAFO decision to establish catch limits for Greenland halibut, and recognizing the difficult transition that will result for the Spanish and Portuguese fleets, Canada is prepared to help the EU to make the transition. We are willing to transfer part of Canada's NAFO allocation to the EU for 1995, on the understanding that the EU will not invoke the objection procedure.

As we discussed in Brussels, there will be a meeting of senior Canadian and EU officials in Brussels February 20 and 21. I have authorized the Canadian Ambassador for Fisheries Conservation, ... who will lead the Canadian delegation, to use the opportunity of this meeting to discuss this further with your officials. The level of transfer from Canada's NAFO allocations to the EU would, of course, have to be reasonable in light of the expectations of Canadian fishermen regarding this stock. Ambassador Lapointe will be able to discuss the possible level and modalities for such a transfer, which would include an accurate assessment of the Spanish and Portuguese catches to date in 1995. As you know, we believe that these catches have been significantly under-reported to your officials. It is essential to get this issue resolved in order to ensure that the total catches of Greenland halibut in 1995 are kept within the 27000t limit set by NAFO.

I hope this offer will be seen in the spirit in which it is intended. It will cause me difficulties domestically, as the Canadian fleet is preparing to take the quota allocated to Canada by NAFO. However I am prepared to accept these difficulties to help you, as the new EU Commissioner for Fisheries, and to ease the transition of the Spanish and Portuguese fleets to their new NAFO quotas. I believe your officials will confirm to you that this is an unprecedented offer of assistance in terms of NAFO history, and the history of Canada-EU fisheries relations.^[35]                                                                                                            [emphasis added]

The reference in the first paragraph to "... the provisions of the NAFO convention which provide for special consideration for Canada in the allocation of catches from the Grand Banks and Flemish Cap" would appear to relate to Articles I.5 and XI.4 of the Convention which read as follows:

Article I

5. Nothing in this Convention shall be deemed to affect or prejudice the positions or claims of any Contracting Party in regard to internal waters, the territorial sea, or the limits or extent of the jurisdiction of any Party over fisheries; or to affect or prejudice the views or positions of any Contracting Party with respect to the law of the sea.            

Article XI

4. Proposals adopted by the Commission for the allocation of catches in the Regulatory Area shall take into account the interests of Commission members whose vessels have traditionally fished within that Area, and, in the allocation of catches from the Grand Banks and Flemish Cap. Commission members shall give special consideration to the contracting Party whose coastal communities are primarily dependent on fishing for stocks related to these fishing banks and which has undertaken extensive efforts to ensure the conservation of such stocks through international action, in particular, by providing surveillance and inspection of international fisheries on these banks under an international scheme of joint enforcement.

The events here at issue did not directly impact catches from the Grand Banks and Flemish Cap although it can certainly be argued that they affected such catches by reason of the nature of Greenland halibut as a straddling stock.            

[87]            The offer reflected in the foregoing quotation was not taken up.

[88]            On the 3^rd of March, 1995, the same day that regulations were enacted adding vessels of Spain and Portugal to the stateless vessels and vessels flying flags of convenience against which Canada purported to take authority to unilaterally act in the NAFO Regulatory Area pursuant to the Coastal Fisheries Protection Act, the European Union invoked the objection procedure in accordance with the NAFO Convention, thus suspending the effective date of the Greenland halibut quota allocation.^[36] The European Union also fixed, unilaterally, its own "autonomous quota", for Greenland halibut in the NAFO Regulatory Area at a level well in excess of the quota allocated to it by the Fisheries Commission at the meeting in Brussels on the 30^th of January and the 1^st of February, 1995. The European Union undertook that it would nonetheless respect the 1995 total allowable catch for Greenland halibut fixed by the Fisheries Commission in September, 1994. On the same day, by a news release, the Minister of Fisheries and Oceans announced that Canada, for the first time, would be fishing Greenland halibut in the NAFO Regulatory Area, that is to say, outside Canada's fishery waters. The news release was in the following terms:

Ottawa: - - Canadian fishermen are moving quickly to participate, for the first time ever, in the turbot fishery outside the 200-mile limit, Brian Tobin, Minister of Fisheries and Oceans, announced today. This new fishing opportunity is a direct result of a recent international decision to allocate 60 per cent of the 27,000 tonne catch to Canada.

"Two Canadian vessels are heading to the fishing grounds to start fishing the 16,300 tonne turbot quota that NAFO, the Northwest Atlantic Fisheries Organization, allocated to Canada," Mr. Tobin said. "NAFO made this allocation and we intend to fish our quotas."

Mr. Tobin noted that Canada has a long tradition of involvement in the turbot fishery, which, up until recently, was carried on entirely inside Canada's 200-mile limit. With the collapse of most of the groundfish stocks in the northwest Atlantic, the turbot fishery is one of the few groundfish fisheries that is still open to Canadian fishermen.^[37]

No evidence was before the Court that Canadian fishers actually engaged in the deep-water Greenland halibut fishery in March or April of 1995.

[89]            Thus, the stage was set for the events of the 9^th of March, 1995.

5)          The ESTAI and its campaigns in the NAFO Regulatory Area

[90]            The following facts are taken primarily from the testimony of Jose Enrique Pereira Molares, a senior officer of the corporate plaintiff who was also in the employ of the corporate plaintiff in an executive position in 1995. Mr. Pereira's testimony was given in Spanish with the aid of an interpreter.

[91]            In 1995, the corporate plaintiff operated out of Vigo, Galicia, Spain and was in the business of harvesting, classifying, processing, both directly and indirectly, pricing and selling fish and fishery products. In the same year, Greenland halibut from the Northwest Atlantic, outside Canada's 200-mile fishery waters, represented about 25% of its total catch. It operated a fleet of eight fishing vessels of which the ESTAI was the largest. The ESTAI and two other vessels of the corporate plaintiff operated in the Northwest Atlantic.

[92]            The ESTAI was of steel hull construction. It was constructed at Vigo in the years 1987/88 and was first registered at the port of Vigo, Spain, in 1988. Its registered length, breadth and depth were 69.475 metres, 12.520 metres and 7.750 metres respectively. Its net registered tonnage in metric tonnes was 548. Its gross tonnage, again in metric tonnes, was 1718. Its cold storage (freezer) cargo capacity was 1,856.25 cubic metres. It was propelled by a single 6 cylinder diesel engine and had a maximum registered speed of 12.847 knots.^[38]

[93]            The plaintiff corporation acquired the ESTAI at auction in July of 1993. It spent a considerable amount of money to upgrade her with various improvements, including strengthening of the hull, replacement of some hull plates, installation of upgraded electronics and an upgraded winch system that included two (2) cable drums, each fitted with four (4) kilometres in length of 26 millimetre diameter cable. The upgraded winch and cable system enabled the ESTAI to drag at great depth a large fishing net, which would be very heavy when the weight of its fittings and a substantial catch were taken into account. Improvements were also made on the bridge of the ESTAI. Those included a sophisticated system for observing the operation of her fishing net through equipment installed in the net which transmitted images to a receiver or receivers on the bottom of her hull, which in turn retransmitted images to visual equipment on the bridge.

[94]            Mr. Pereira estimated the Canadian dollar value of the upgraded ESTAI in 1995 at roughly $6,000.000.00.

[95]            The ESTAI first went to sea for the corporate plaintiff, in "like new" condition, on or about the 9^th of September, 1993. It fished or "campaigned" for Greenland halibut in the NAFO Regulatory Area and in deep water. It returned to Vigo some five or six months later and was found on inspection to be in good condition, with no ice damage.

[96]            According to the documentary evidence referred to by another witness on behalf of the Plaintiff, Jose Luis Iglesias Sanchez, a university professor and professional accountant and auditor, the ESTAI's first campaign to the Northwest Atlantic was quite successful, in the sense of profitable. According to a table prepared by Professor Iglesias, who did not file an expert's affidavit with the Court but who clearly provided expert opinion evidence, the ESTAI was at sea on its first campaign for 151 days. Discounting for time spent travelling to and returning from the fishing grounds, Professor Iglesias estimated that the ESTAI had 137 overall fishing days. He estimated that the net value generated for the corporate plaintiff during those days was 73,598,929 pesetas or 537,218 pesetas per working day, the highest net value generated per day by the ESTAI on any of its four (4) campaigns to the Northwest Atlantic.^[39]

[97]            The Master of the ESTAI on its first campaign was not Captain Davila. During the course of the campaign, the ESTAI was the subject of a NAFO citation which led to the imposition by Spain of an administrative fine or penalty on the Master, which was paid by the corporate plaintiff.

[98]            The ESTAI returned to the NAFO Regulatory Area late in March of 1994 and campaigned for Greenland halibut until late in September, 1994. This was the first campaign by the ESTAI to the NAFO Regulatory Area that was under the command of Captain Davila. The professor, accountant and auditor earlier referred to indicated that this campaign extended over 180 days with an estimated 166 of those days identified as "days worked". The net value generated on this campaign was somewhat lower than that generated by the ESTAI's first campaign, notwithstanding that the number of days worked was greater. The value generated per day dropped from 537,218 pesetas for the first campaign to 407,794.00 for the second campaign. Once again, Mr. Pereira testified, the ESTAI returned to Vigo in good condition. In respect of both the first and second campaigns, a special permit would have been issued by Spanish fishery authorities to permit the ESTAI to campaign in the NAFO Regulatory Area. These special permits were not before the Court.

[99]            On the 17^th of October, 1994 a special permit, entitled in translation "short term fishing licence" was issued in respect of the ESTAI for a third campaign in the NAFO Regulatory Area. The permit or licence was stated to be valid to the 31^st of December, 1994 although it was later extended on three (3) occasions, first for an indefinite term, second to the 28^th of February, 1995 and lastly to the 31^st of March, 1995. While the special permit or licence in its original form indicates that the main species to be caught are "Greenland halibut and shrimp in NAFO fishery subarea 3M", each of the extensions indicates that it authorized the catch of "halibut". The special permit or "short term fishing licence"^[40] is very extensive and detailed. That being said, while it provides for limitation of catches of certain species, it provides no catch limit for Greenland halibut, consistent with the fact that no total allowable catch limit for Greenland halibut had been set by the NAFO Fisheries Commission for 1993 and 1994. It provides at some length, under the heading "technical measures", for net mesh size; it regulates the fastening of devices in nets; it limits "bycatches", that is to say fish not of the species to which fishing is directed that are captured by chance; and it provides for minimum fish size although no minimum size is specified in respect of Greenland halibut. It further deals with "control measures", "communications", "statistical information" and lists European Community provisions in force that applied to the NAFO fishing grounds. It incorporates five (5) attachments. In all, in its English translation, it extends to eighteen pages with the notices of extension adding an additional three (3) pages.

[100]        The special permit or short-term licence notes: "FISHERY WILL TAKE PLACE AS A BIOECONOMIC CAMPAIGN, PURSUANT TO THE CONDITIONS ENCLOSED". Mr. Pereira explained that the foregoing was an acknowledgement that the Greenland halibut fishery in the deep waters of the NAFO Regulatory Area, in late 1994 and early 1995, remained a "developmental fishery", notwithstanding the very extensive catches that had been taken in 1993 and 1994.

[101]        Mr. Pereira testified that the nets on board the ESTAI when it departed Vigo on its third campaign to the NAFO Regulatory Area, under the authority of the short-term fishing licence just referred to, were in full compliance with the terms of that licence.^[41]

[102]        The ESTAI left Vigo on its third campaign to the NAFO Regulatory Area, licenced as just noted, on the 27^th of October, 1994. Once again it was under the command of Captain Davila. It carried a crew of twenty-eight (28) including its Master, its fishing Master and a chief mechanic, only the last of whom testified at trial. More will be said about this later. Apart from days lost fishing by reason of bad weather and a short break to celebrate the Christmas season, fishing operations were suspended by two (2) events that could be considered out of the ordinary. A member of the crew suffered a heart attack and died. The ESTAI travelled to the island of St-Pierre to deliver the deceased crew member's remains. Further, the ESTAI went to the aid of another fishing vessel in the NAFO Regulatory Area, the "Maria Victoria G", which fowled its propellor in a net, presumably its own. The ESTAI towed the disabled vessel to the Azores. Mr. Pereira testified that the ESTAI lost twenty (20) fishing days by reason of these two (2) events. He further testified that he contemplated extending the campaign, beyond the end of March, 1995, if the crew would agree and if a further licence extension could be obtained.

[103]        During the trip to and from the Azores, the ESTAI encountered unexpected high seas. A port-hole was broken and a cabin inside the port-hole was essentially trashed. Counsel for the Defendant implied in cross-examination that the hull of the ESTAI might have been damaged by this encounter with high seas.

[104]        In early March, the ESTAI lost further fishing time. Following Canada's enactment on the 3^rd of March, 1995 of regulations making section 5.2 of the Coastal Fisheries Protection Act applicable to Spanish and Portuguese vessels, Canada provided notice that it wanted any such vessels off the fishing grounds of the NAFO Regulatory Area. The ESTAI and other vessels left the NAFO Regulatory Area and awaited further advice outside, that is to say, east of, the NAFO Convention Area. The ESTAI received orders to return to the NAFO Regulatory Area. It did so and arrived back on the fishing grounds on the 8^th of March. It resumed fishing on the 9^th of March.

[105]        The dramatic events of the 9^th of March followed.

[106]        More will be said about events between the time of the arrest of the ESTAI on the 9^th of March and the time when it left St. John's harbour on the evening of the 15^th of March, and sailed back to Vigo. Similarly, more will be said later in these reasons about the arrival of the ESTAI back in Vigo on the 23^rd of March, about subsequent inspections and dry docking to undergo repairs, enhancements and refurbishment for return to sea, and about the time when it again left port on the 18^th of May, 1995 for its fourth campaign to the NAFO Regulatory Area. The ESTAI returned to Vigo on the 9^th of August, 1995 having completed only sixty-seven (67) working days. While its net value generated per day worked was much higher than that generated on its third voyage, it was lower than the equivalent values for its first and second voyages.

[107]        The ESTAI's fourth campaign to the NAFO Regulatory Area was its last. It was sold by the corporate plaintiff to a joint venture in which the corporate plaintiff was a partner. It changed its base of operations to the Falkland Islands.

THE ESCORTED VOYAGE OF THE ESTAI FROM THE POINT OF ARREST

ON THE 9^TH OF MARCH, 1995 TO ST. JOHN'S

[108]        At the beginning of the second week of trial, that is to say on Monday, the 17^th of January, 2005, counsel for the Plaintiffs made an extended statement on the record. He advised of discussions that he had had the previous day with his clients, with that term broadly interpreted, who, he noted, "...have expressed concern that there is a narrow issue of law in this matter and that is whether the Government of Canada had the right to - - had the legal right to arrest the ship "Estai" in international waters, and that in our clients' view, it is unnecessary for the trial to take 48 days, [the number of days originally estimated] in light of the narrow question of law which is the main issue in this case." The day of that discussion, counsel for the Plaintiffs wrote to counsel for the Defendant. He advised the Court, and apparently counsel for the Defendant, among other things, that:

...having reviewed the matter in detail, that it has been concluded that given the number of admissions, et cetera, and the narrow issue of law, that it is not necessary for Captain Davila to give evidence.

Captain Davila came here [to St. John's] for the express purpose of giving evidence, your lordship, and I mentioned to my learned friend in my correspondence that he came to Newfoundland from the Falkland Islands. And when I say from the Falkland Islands, I don't mean the Islands themselves but I do mean the fishing grounds in the area of the Falkland Islands. ... And that it was fully intended at the outset of this trial that Captain Davila would give evidence, and that having reviewed this matter in detail, that it was unnecessary to ask Captain Davila to remain in Canada for a further period of probably up to two weeks. That he is a fisherman who left his ship to come to Canada to give evidence and he's been away from his ship and he will not be giving evidence.^[42]      

[109]        As a result of the departure of Captain Davila from St. John's without giving evidence, the trial was substantially shortened. That being said, it was perhaps somewhat less organized and coherent then might otherwise have been the case. A number of issues that could have been anticipated as issues that would be before the Court failed to materialize for lack of any evidence to support them. Counsel for the Defendant, in the end result, ended up calling only one witness, with a number of witnesses that the Defendant might have reasonably been expected to call in response to testimony from Captain Davila, being called by the Plaintiffs instead.

[110]        One area where Captain Davila could have been expected to give evidence was with respect to the voyage from the point of arrest of the ESTAI to St. John's and, more particularly, with respect to the portion of that voyage that was through ice. It can be speculated that Captain Davila would have had much to say.

[111]        A video, apparently made commercially at the request of the corporate plaintiff, was introduced as Exhibit D-10. In a very brief first segment, there are images, apparently from aboard the ESTAI, of aerial surveillance, what appears to be the pursuit of the ESTAI by Canadian vessels, and the discharge of a water cannon by what appears to be one of the Canadian vessels. By far the greater portion of the video is devoted to the arrival of the ESTAI back in Vigo, of an attendant celebration, of removal of frozen fish from the holds of the ESTAI and transfer thereof, apparently towards freezer storage on shore, of certain inspections, and a series of rather candid shots aboard the ESTAI. The video closes with a long almost-monologue by Captain Davila from what appears to be the bridge of the ESTAI. It is entirely in Spanish but it is long enough so that no translation is needed to determine that Captain Davila had much to say.

[112]        In the end, the only evidence we have from Captain Davila is in extracts from his examination for discovery that were deemed to have been read into the record on behalf of the Defendant. Those extracts relate directly to the passage of the ESTAI through ice on the voyage to St. John's. They are reproduced and attached hereto as Annex IV.

[113]        The Court interprets the read-ins from the discovery of Captain Davila as disclosing little if any anxiety, and certainly no anger, at the navigation of the ESTAI through ice on its voyage to St. John's. While he clearly was unhappy about being forced to go to St. John's, the course that he was directed to take to get there would appear to have been of no particular concern to him. Further, he would appear not to have been predisposed towards a different course to St. John's that might or might not have meant less of an encounter between the Estai and ice.

[114]        In the result, the principal testimony with regard to the voyage to St. John's came from Captain Riggs, a witness called on behalf of the Plaintiffs, who was the Master on board the Cape Roger. Captain Riggs was referred to extensive documentation that in some cases directly, and in other cases indirectly, reflected on the route taken.    Additionally, testimony came from Mr. Don Hollette, at the time a fishery officer with Canada's Department of Fisheries and Oceans who was, for at least a portion of the voyage, on board the Cape Roger. Further testimony came from Manuel Santiago Figuierido, the chief engineer on board the ESTAI throughout the voyage to St. John's. Unfortunately, because of the nature of Mr. Santiago's duties, his testimony regarding the passage through ice was more directed to sounds he heard, concerns and fears that he had and actions that he took by reason of those concerns and fears, rather than to visual observations of sea conditions. He would further appear never, or at least rarely, to have been on the bridge of the ESTAI during the passage through ice. He would appear not to have had meaningful conversations with Captain Davila or other officers of the ESTAI who would have been on the bridge.

[115]        In the preceding paragraph, I referred to the testimony of Mr. Don Hollette who, during the approach toward the ESTAI on the morning of March 9, 1995 and during the pursuit and arrest of the ESTAI, was on board the Cape Roger as an "on-scene co-ordinator", which is to say, as a liaison interpreting what was going on at sea to those monitoring the situation from on-shore. Mr. Hollette was rather vague and general in his testimony regarding the early stages of the voyage toward St. John's. That his testimony was rather vague and general was not surprising given that he had been subpoenaed to testify on behalf of the Plaintiffs on very short notice, almost ten years after the events in question. The only documentary material that he had before him and that he had apparently had an opportunity to review, was his diary entries regarding the events of March 9^th and regarding the early portion of the voyage to St. John's.^[43]

[116]        Mr. Hollette apparently transferred from the Cape Roger to the Leonard J. Cowley shortly after the arrest of the ESTAI and in the relatively early stages of the voyage to St. John's. He testified that the ESTAI and the escorting Canadian ships left the point of arrest heading westward. He further testified that, at some point before entering Canadian fishery waters, the small convoy turned back eastward and then southward, roughly along the 47^th parallel of longitude, apparently to reduce the distance travelled through ice.

[117]        Mr. Hollette's diary contains a notation in the following terms: "Apparently Estai is very bad in ice." He testified that "...to the best of [his] recollection, ..." that information came from fishery officer Snelgrove who was the fishery officer in charge of the armed boarding team on board the ESTAI and who apparently assumed command of the ESTAI after its arrest. He testified, again on information from officer Snelgrove, that the water intakes that supplied cold water to cool the engine and to support the freezing system of the ESTAI were "...really high, not very much below the surface of the water, and if the vessel got into slob ice, the intakes could be blocked which would block the water from - - cooling water from entering the vessel."^[44]

[118]        Mr. Hollette testified only with respect to encountering "slob ice" which he described as rather like "slush"^[45]. He provided no testimony regarding any encounter with "pack-ice" or what he considered to be serious ice conditions.

[119]        Captain Newman Riggs, the Master of the Cape Roger which was with the ESTAI throughout the voyage to St. John's, testified with regard to the voyage in much more detail. He made reference to the rough and final logs of the Cape Roger, transcripts of ship-to-shore and ship-to-ship communications on the days of the voyage, and "ice-charts" indicating the location and intensity of ice off the east-coast in the area in question during the days of the voyage.

[120]        Captain Riggs testified that, at 19:10 hours on the 9^th of March, after recovery by the three (3) or four (4) Canadian ships of their boarding craft, and with full, if grudging, cooperation from the Master of the ESTAI, the Cape Roger, the ESTAI, the Sir Wilfrid Grenfell, and the Leonard J. Cowley set a course directly westward and proceeded "full speed to St. John's". At 20:00 hours that evening, the small convoy crossed from NAFO fishery subarea 3M into fishery subarea 3L.    At 21:15 hours, the Cape Roger altered course to make a "transfer" with the Sir Wilfrid Grenfell. Presumably, this would have involved all vessels stopping while the transfer was completed.

[121]        At midnight between March 9^th and March 10^th, the flotilla altered course, back towards the east, because the ships were encountering "strings" of ice. In effect, they virtually retraced their steps back as far as west longitude 47 degrees and then altered course to proceed directly southward to a point just short of, or north of, 47 degrees north latitude. Captain Riggs explained the dramatic alteration of course in the following terms:

So obviously from the plane or from another vessel, we had gotten some ice information or maybe from the shore, we get ice maps on the ship, that would indicate well, we've got to go back to go down east of the 47 line and then come in.^[46]

[122]        At 07:30 hours on March the 10^th, the Sir Wilfrid Grenfell took a lead position to navigate through ice. At approximately the same time, the small flotilla again turned westward toward the Newfoundland coast, proceeding at the relatively slow speed four (4) knots. Captain Riggs testified that the relatively slow speed was dictated by travel in "strings" of ice. He explained:

At 7:30 "Grenfell" took lead to navigate through ice. And you don't go crashing through there, not when you're escorting somebody. ^[47]

[123]        Captain Riggs testified that, in the early afternoon of March 10^th:

We were stopped transferring stores and personnel, etcetera. Again, obviously in open water, there might have been still some strings around but there was definitely a lot of open water if we were using to transfer [sic] our boats to transfer personnel and stores.^[48]

[124]        Apparently, in the course of one of the transfers, the boarding craft from the Leonard J. Cowley was damaged, some injuries were incurred, and some stores were lost. The Sir Wilfrid Grenfell was used to recover the Cowley's damaged boarding craft.   

[125]        Progress westward was slow for the balance of March 10^th but apparently, at least by very early morning on March 11^th, the convoy had cleared whatever ice it was encountering. At 02:15 hours on March 11^th, speed was increased to seven (7) knots, following a conversation with Frank Snelgrove, on board the ESTAI. During the course of the day, the flotilla encountered heavy seas and swells. At 06:35 hours, the flotilla altered course to go south "...to ice edge".^[49]

[126]        Counsel took the witness to Exhibit P-64, a transcript of Coast Guard Recordings for the 10^th of March, 1995. Starting at about 07:12 hours on the 10^th of March, the Exhibit records extensive communications among the ships in the flotilla that indicate they were travelling through "strings of ice", and later, through ice. The Sir Wilfrid Grenfell was in the lead and was opening a track, particularly for the benefit of the ESTAI. In a communication at 07:15:37 hours, the Sir Wilfrid Grenfell reported to the ESTAI that ice coverage was "...only showing three-tenths..." and that the Sir Wilfrid Grenfell would take the ESTAI through. References are made to strings of ice in communications at 07:27:35 and 07:28:49 hours. Again a reference is made to a string of ice at 07:33:04 hours. A communication at 07:48:32 hours from the ESTAI to the Sir Wilfrid Grenfell enquires whether the Sir Wildred Grenfell is "...in more ice there?". The response indicates the Sir Wilfrid Grenfell was clearing into open water. In a communication at 08:08:25 hours from the Leonard J. Cowley to the Chebucto, the following appears:

There was one little string of ice, but we're just starting to move into some ice there now.

[127]        At about the same time, the Sir Wilfrid Grenfell communicated to the ESTAI:

We just entered the ice here. You should be coming up on there shortly.

[128]        Between 09:46:45 and roughly 10:10 hours, the flotilla was apparently navigating through heavier ice. The Canadian vessels communicated about widening the track for the ESTAI. There is a reference to "...closing in pretty tight", although from the context it is not clear whether that was a reference to the vessels travelling closer together or whether it was to ice closing in on the vessels. In another communication, the source of which is not at all clear, the following is reported:

We've got quite a bit of ice around us as well. We'll - - we'll work up there with you and follow behind one of the other vessels.

[129]        At 10:01:11 hours, the ESTAI communicated to the Sir Wilfrid Grenfell in the following terms:

...If you guys got these big chunks of ice there [inaudible] can you let us know because Skippers really worried about those.

The Grenfell replied "yeah we'll let you know if we [sic] anything other than normal. ..."

[130]        The ESTAI appears to have replied:

...Still closing in tight here now. We got to push our way through. ...

[131]        Shortly thereafter, there is a reference which is hard to interpret as to the possibility that one of the vessels, presumably the ESTAI, might "...need a tow job." At 10:04:05 hours, the Sir Wilfrid Grenfell reported to the ESTAI:

...There's a few slightly larger flows than the norm here just passing down our starboard side. It seems like it's just something to watch for. ...

[132]        Slightly before 10:15 hours, communications indicate that conditions were clearing but at 10:23:38 hours, the Sir Wilfrid Grenfell communicated to the Leonard J. Cowley:

...we got about a mild [sic] to fairly substantial ice hedge [should read "edge"] again there. It looks like one of those thicker strips. ...

The Leonard J. Cowley responded:

I'm moving up ahead there. I'm coming up slowly. I'm just heading into a little ice hedge [sic] now. When I get out of that I'll try to close up on you.

[133]        Communications indicated that the convoy was in and out of ice over the next few hours. Between 13:36 and 13:38 hours, communications indicate ice of "...a pretty good size" and "...three big pieces here on my starboard, right alongside of my starboard ...".

[134]        At 13:41:21 hours, a reconnaissance aircraft reported:

- - I guess you guys are in sort of a fight to open your area there and he got a little strip in front of him [presumably a reference to the Leonard J. Cowley]. It's only one mile and after that you're out into open water, bud. We've got from him the closest open water on a bearing of 284 magnetic, one mile. ...And then you're clear sailing until - - just standby and I'll give you - - well, I see it's a long way. It's likely within about 60 miles down basically before you get back into it again.

[135]        By about 14:30 hours, the convoy would appear from the communications to have been coming out of ice and into open water. The convoy stopped to conduct transfers, earlier referred to. However, shortly after 17:30 hours, the Sir Wilfrid Grenfell reported seeing a string of ice and being in some ice. In a return communication, there is reference to an "Ice pallet".

[136]        Counsel then took Captain Riggs to the transcript of Coast Guard Recordings for the 11^th of March, 1995^[50].

[137]        On the morning of the 11^th of March, at about 08:20 hours, the transcript of an exchange between the witness and an unidentified individual indicates that the small flotilla was making slow progress into heavy head winds. The rate of progress was "...about five knots...".

[138]        The same conversation between Captain Riggs and an unidentified individual indicates that the flotilla was proceeding roughly along the 47^th parallel of north latitude which would take it into the region of Renews on the west coast of the Avalon Peninsula of Newfoundland, some 36 miles south of St. John's. In the course of the conversation, it is indicated that the flotilla would likely encounter ice before reaching the coast. There is a suggestion that the flotilla might alter course to the south to go around any ice. The question of icebreaker assistance was raised. In response to a question from counsel as to whether Captain Riggs considered icebreaker assistance would be essential, he replied "No, we came in without it. We had the "Grenfell" not a full-fledge icebreaker but good as an escort vessel. Us and the "Cowley" were ice-strengthened vessels."^[51]

[139]        By approximately 09:14 hours, communications indicated that freezing rain and freezing spray were expected. An unidentified individual, perhaps in jest, suggested that the flotilla might not arrive in St. John's until Wednesday, the 15^th of March.

[140]        By approximately 12:21 hours, the flotilla was still expecting to encounter ice on its westward voyage and was seeking advice as to how far ahead of the flotilla the ice edge was.

[141]        By 06:50 hours, on the 12^th of March, the Leonard J. Cowley reported:

...They [the flotilla] were on a course of 270 [due west] through, 10 knots. What they were doing was they were going to hit the southern edge of the ice and there's an open lead of water running up along the Avalon Peninsula before St. John's and they were going to follow that up to St. John's.^[52]

[142]        The evidence before the Court did not disclose whether the flotilla ever encountered significant ice on the 11^th or 12^th of March in the late stages of its voyage towards the Avalon Peninsula. The evidence did, however, indicate that the flotilla moved in close to the western coast of the Avalon Peninsula and adjusted course northwards to St. John's. No further incident was recorded with respect to the voyage. At approximately 15:10 hours on Sunday, the 12^th of March, the Cape Roger was secured at berth No. 9 east on the north side of St. John's harbour. Apparently, the ESTAI was double-berthed outside the Cape Roger.

[143]        Counsel took Captain Riggs to a series of ice-maps indicating, for the critical days, ice locations and intensities off the east coast of Newfoundland. Captain Riggs testified that such ice maps were not entirely reliable because, to some extent, they were based on data that was essentially out of date by reason of the constant movement of the ice. That being said, the ice maps did indicate that the small flotilla could have more or less entirely avoided ice in the transit to St. John's if, when it turned south to minimize its encounter with ice, it had gone further south and then turned west until it was in close proximity with the Avalon Peninsula and then north to St. John's up the clear water that was just east of the Avalon Peninsula. Finally, counsel took Captain Riggs to a document entitled "Canadian Coastguard Ice Navigation in Canadian Waters, 1992 Revised Edition"^[53]. In particular, counsel took Captain Riggs to Part I, sub-entitled "Operating in Ice", Chapter 2 entitled "Navigation in Ice" and the first two paragraphs under the sub-heading "General" in that Chapter. Those paragraphs read as follows:

Ice is an obstacle to any ship, even an icebreaker, and the inexperienced ice navigator is advised to develop a healthy respect for the latent power and strength of ice in all its forms. However, it is quite possible, and continues to be proven so, for well-found ships in capable hands to navigate successfully through ice-covered waters.

The first principle of successful ice navigation is to maintain freedom of manoeuvre. Once a ship becomes trapped, the vessel goes wherever the ice goes. Ice navigation requires great patience and can be a tiring business with or without icebreaker escort. The long way round a difficult ice area whose limits are known is often the fastest and safest way to port, or to the open sea.

[144]        With particular reference to the last sentence of the foregoing quotation, and in response to the question "What is your practice with respect to that?", Captain Riggs responded:

Well, if the ice is not too heavy, we would go through it, using slower speeds and lookouts and whatever was available.

[145]        Counsel then took Captain Riggs to the heading 2.6.1 on page 24, "Entering the Ice", from which the following was quoted:

The route recommended by the Ice Operations Officer through the appropriate reporting system, is based on the latest available information and Masters are advised to adjust their course accordingly. The following notes on ship-handling in ice have proven helpful:

a)             Do not enter ice if an alternative, although longer, route is available.

b)             It is very easy and extremely dangerous to underestimate the hardness of the ice.

...

e)              Navigation in pack ice after dark should not be attempted without high-power searchlights which can be controlled easily from the bridge; if poor visibility precludes progress, heave to and keep the propeller turning slowly as it is less susceptible to ice damage than if it were completely stopped.

...

g)             All forms of glacial ice (icebergs, bergy bits, growlers) in the pack should be given a wide berth, as they are current-driven whereas the pack is wind-driven.

...

[146]        Captain Riggs had earlier testified that the Cape Roger was well equipped with powerful searchlights and that he anticipated that the ESTAI was similarly equipped. He testified that the foregoing was good general guidance but that, with his experience, and the experience of other masters in the fotilla, the publication and its advice was not particularly useful. He testified to regularly navigating in ice and, in certain circumstances, to in fact taking shelter in ice. He did acknowledge, in particular, the very dangerous nature of "growlers" which he testified as being very hard ice capable of substantially damaging the hull of a ship. Captain Riggs left the general impression that, given the company that was escorting the ESTAI, the foregoing quoted advice was of little value.

[147]        I have earlier referred to the testimony of Mr. Manuel Santiago, who was the Chief Engineer on board the ESTAI at all relevant times. At an earlier stage in his career, he worked in the refrigeration business. His responsibilities on board the ESTAI extended to maintenance of the freezer system for the holds in which the cargo of frozen fish was stored.

[148]        Through an interpreter, Mr. Santiago testified that, shortly after the ESTAI was boarded, he was summoned to the bridge. He was asked, apparently by Canadian officers, about the capacity of the ESTAI to navigate in ice. He responded that the ESTAI did not have an ice classification and that in the result, both the freezer system and the engine cooling system could be negatively affected in ice.

[149]        Mr. Santiago was asked to describe the voyage to St. John's. More particularly, he was asked whether he saw the water and when he replied in the affirmative, he was asked to describe what he saw. His response was in the following terms:

Was moments of clean water and others moments after, more or less after the first, no, second or third day, we start looking at ice, pieces of ice, what worries us, and I saw the captain very worried about that and speak with them. And at lunch hour, when we used to eat, they used to make comments with us that we shouldn't worry about that, that the "Cape Roger" will be going in front, was going in front, and was taking care of separating the ices, pieces of ice.^[54]

[150]        Mr. Santiago testified that he had never experienced navigating in ice before. He testified to seeing ice on "both sides" of the ESTAI, and noted that sometimes the ice was very thin and that at other times it was thicker. He testified that when the "Cape Roger" broke the ice it formed "pieces of ice with the form of a star, with big peaks." He further testified that travelling through ice worried him a lot. He testified that Captain Davila was also worried.

[151]        Mr. Santiago testified that he was busily engaged in avoiding over-heating of the engine of the ESTAI and looking after the freezer equipment. He inspected the freezer holds. He testified that he could hear the ice "against the hull of the [ESTAI]". He testified that he advised Captain Davila that the freezer holds were being "hurt by the ice". He checked the freezer holds several times per day to ensure that the cooling/freezing system was functioning, that the insulation lining the holds was not broken and that there was no leakage into the holds. He found no evidence of breakage or leakage.

[152]        Counsel took Mr. Santiago back to the issue of his impressions of the ice they were navigating through. He testified:

Some other times was - - sometimes it was big and white and thick. Some other times it was very thin and some other times it was - - sometimes it was in a very intense white coloured. Sometimes was sort of a very greyish colour, opaque coloured. And far away, you could see bigger pieces of ice that are very far away from where we were travelling, we were navigating..^[55]

[153]        He testified to seeing much ice from both sides of the ESTAI but he refused to be drawn into estimating the percentage of ice coverage. When asked to testify as to his knowledge of the difference between first-year ice and Arctic ice, he was very vague in his responses, which the Court found not surprising given his lack of experience in navigating in ice at the time of the voyage to St. John's.

[154]        Mr. Santiago further testified that, while the ESTAI was navigating in ice, ice was taken into and blocked the inlet tubes in the bow of the ESTAI. The blocking was potentially very damaging because the water from the intake tubes was used to cool the engine and to maintain the fish stored in the holds in a frozen state. He testified that, by turn, he would clear the tubes of ice to avoid grave damage to the engine and spoilage of the cargo of fish.

[155]        At the close of the cross-examination of Mr. Santiago, he was asked about an event, earlier referred to, that occurred in the period from the 14^th to the 17^th of February, 1995 while the ESTAI was towing the "Maria Victoria G". He testified that the ESTAI received "...a hit, a strong hit from the sea...". He further testified that the "strong hit" broke against the right [starboard] side of the ship and broke a window, or cabin porthole glass, and "...produced a lot of hurt in the hull... of the boat and inside of the cabin."^[56]

[156]        Mr. Santiago continued that the "strong hit" broke a porthole and "...broke everything inside." Mr. Santiago testified that he attested to a claim for damage from this event that he assumed would be used in support of an insurance claim.   

[157]        Before leaving the testimony of Mr. Santiago, it should be noted that a reading of the transcript of his questioning and his testimony, all of his testimony being in Spanish, discloses very significant difficulty in interpretation of the questions posed to him and of his responses, particularly where the area of discussion involved technical terms.

THE SOJOURN OF THE ESTAI IN ST. JOHN'S AND THE

VOYAGE FROM ST. JOHN'S TO VIGO, SPAIN

[158]        A significant amount of evidence regarding the sojourn of the ESTAI, its Master and its crew in St. John's can be derived from allegations in the final iteration on the Statement of Claim herein and the final iteration of the Statement of Defence. For ease of reference, a summary of those facts follows:

-           the ESTAI, in company at least with the Cape Roger, arrived in St. John's harbour on Sunday, the 12^th of March, 1995 at approximately 15:00 hours. It was double berthed in the harbour, outside the Cape Roger but otherwise immediately adjacent to the site of a public demonstration on the waterfront;

-            the Defendant, through a fishery officer, charged Captain Davila with four (4) breaches of the Coastal Fisheries Protection Act and charged the ESTAI with one breach of the same Act;

-            Captain Davila met with counsel aboard the ESTAI;

-            at approximately 17:30 hours on the 12^th of March, Captain Davila personally and the ship ESTAI, appearing through counsel, appeared in the Provincial Court of Newfoundland where the charges against Captain Davila and the ship were read. Bail was fixed in the amount of $8,000.00 for Captain Davila. That bail was immediately posted. Captain Davila was released from arrest;

-           on the same evening, the entire crew of the ESTAI was removed from the ESTAI by the Defendant. The crew took accommodation in a downtown St. John's hotel;

-            on the 14^th of March, 1995, which was a Tuesday, the Defendant commenced off-loading of the cargo of frozen fish on board the ESTAI;

-           on the 15^th of March, 1995 a bail bond in the amount of $500,000.00 was posted for the ESTAI and the ESTAI was released from arrest and seizure. Thereupon discharge of cargo from the ESTAI ceased.

I would add to the foregoing, and it was not in dispute before me, that on the evening of the same day, that is to say the 15^th of March, the ESTAI and its Master and crew left St. John's harbour to return directly to Vigo, Spain. Mr. Santiago, the Chief Engineer on the ESTAI at that time, testified that no ice was encountered on the trip to Vigo from St. John's. The portion of the cargo of the ESTAI that had been removed was not returned on board the ESTAI before she sailed out of St. John's. The Defendant made an ex gratia payment to the corporate plaintiff in the amount of $40,000.00 which the corporate plaintiff treated as a contribution toward the cost of transfer of the off-loaded cargo from St. John's to Vigo.

[159]        A number of witnesses testified with regard to some of the events concerning the ESTAI and her Master and crew when she and they were in St. John's.

[160]        Mr. Cyril Clancy of St. John's, Newfoundland testified that, in 1995, he was vice-president of finance and administration with Blue Peter Steamships Limited, a corporation based in St. John's that for fifty-six (56) years up until June of 1999, acted as steamship agents and freight forwarders representing shipping companies from all over the world. He testified that Blue Peter Steamships Limited ("Blue Peter") was appointed to act as "port agent" for the ESTAI when she was brought into St. John's under arrest on the 12^th of March, 1995. He identified a document of appointment dated the 10^th of March, 1995.^[57]

[161]        Mr. Clancy testified that:

As a result of this [the communication] our company made the necessary port arrangements for the vessel when she came in and as soon as the vessel tied up, our representatives attended the vessel to assist the captain and the crew in any way possible.^[58]

[162]        Mr. Clancy also identified a "...disbursement cover sheet for the account [Blue Peter] sent to the owners after disposition of the port visit."^[59] The document covered pilotage fees, unmooring charges, harbour dues, stevedoring (loading), cash advanced to the Master, ships stores and supplies, crew transportation, certificates and inspections, legal fees and disbursements, agency handling fees, telephone, telex and fax expenses, and overtime charges, all to a total of $39,220.64. By far the greater portion of the account was made up of legal fees and disbursements totalling $25,042.94. On examination in chief, Mr. Clancy briefly spoke to each item.

[163]        Under cross-examination, Mr. Clancy attested that Blue Peter was requested to arrange the shipping to Vigo of the frozen fish that had been off-loaded from the ESTAI and that remained behind in freezer storage in St. John's. He attested that arrangements were made through Maersk Line. He further attested that possession of the frozen fish was transferred to someone on behalf of the corporate plaintiff at the freezer facility in or near St. John's.

[164]        The second witness called on behalf of the Plaintiffs with regard to the period of sojourn of the ESTAI in St. John's was Carlos Perez-Bouzada Gonzalez ("Mr. Bouzada"), of Vigo, Spain, who testified that he had been practising law since 1989 and that his family, at least as far back as his father, had been closely associated with the corporate plaintiff.

[165]        Shortly after the arrest of the ESTAI, Mr. Bouzada was instructed to fly to St. John's to take part in the representation of the vessel, its Master and crew, upon their arrival. In fact, while he arrived in St. John's on the same day that the ESTAI did, he arrived late at night and therefore some hours after the arrival of the ESTAI. He identified and spoke to his account for fees and disbursements "...related to the services provided to the [Plaintiff] company related to the arrest of the ESTAI."^[60] He further identified documents providing details of his expenses relating to his trip to and stay in St. John's and a travel agency invoice related to the same trip.^[61]

[166]        In the same series of documents, Mr. Bouzada identified an account for services provided by a Spanish law firm in connection with the same incident.^[62] He testified that the members of the firm rendering the account "...were the best maritime lawyers in Spain..." at the relevant time and were further capable of providing more generalized advice to the corporate plaintiff while the witness himself was absent in Canada.

[167]        Finally, counsel took Mr. Bouzada to documentation^[63] relating to a NAFO regulatory infraction, reported to Spanish authorities by a NAFO inspector, in respect of the ESTAI and its Master on its first campaign in the NAFO Regulatory Area when it was not under the command of Captain Davila. The documentation showed that the alleged infraction was upheld and a significant fine was paid by the corporate plaintiff on behalf of the then Master of the ESTAI.

[168]        On cross-examination, counsel took Mr. Bouzada to a four page document^[64] identified as showing expenses related to the obtaining of a bond in the amount of $500,000.00 that was required to secure the release of the ESTAI. These pages were originally provided to the Court only in Spanish. In the result, Mr. Bouzada, who was quite fluent in English, provided a relatively extensive explanation as to those elements from the four pages that directly related to the cost of the bond for the ESTAI and related expenses.

[169]        Finally on cross-examination, counsel took Mr. Bouzada to the evidence of two NAFO regulatory infractions, the first of which had earlier been identified by Mr. Bouzada^[65] and the second of which^[66] related to events which occurred on the 1^st of May, 1994, when the ESTAI was on the NAFO fishing grounds and Captain Davila was Master. The first infraction related to the utilization of an illegal "chafer", an attachment to a fishing net, and the second related to "...failure to note quantities of American plaice in the fishing and production logs,...". Both infractions were upheld by Spanish authorities and in each case, the corporate plaintiff paid the appropriate fine on behalf of the Master of the ESTAI.

[170]        The final witness to testify on behalf of the Plaintiffs regarding the sojourn in St. John's was Mr. Robert Andrew Jenkins of St. John's, a marine surveyor. Mr. Jenkins testified that he had been a marine surveyor since 1988, that he has a Master Mariner Certificate and a degree in nautical science. He is a member of the Insurance Institute of Canada. He testified that he was instructed on behalf of insurers representing the owners of the ESTAI to go on board the vessel and to conduct a survey. He carried out this instruction on the 15^th of March, 1995. He identified his survey report^[67]. Under the heading "Background Information" in his report, the following paragraphs appear:

...

During the time that the Canadian Government had control of the vessel [the ESTAI] the entire contents of the after fish hold was discharged and a quantity of fish was discharged from the forward fish hold. In addition to the fish the Canadian government also removed all of the ship's documents.

On Wednesday March 15, 1995 a bond of $500,000 was put in place by the owner and the vessel was released by the Canadian Government. The crew arrived back on board at approximately 1600 and the vessel was ready to depart at 1830. The pilot had been ordered, but the documents that had been removed from the vessel had not been returned. As many of these documents were the legal documents of the vessel, the vessel had to wait until these documents were returned. These legal documents were returned at 2130; the vessel then sailed from St. John's.

[171]        Further in his relatively brief report, under the heading "General Conditions", in relation to the external hull of the ESTAI, the following appears:

No reported damage during this incident. Condition of the hull is as expected for a vessel of this age and type.

[172]        Certain areas of the vessel were described as "extremely clean and well organized" and "clean and tidy". One cabin on the starboard side was reported to have suffered "...some terrible damage but the undersigned was informed that this damage was not related to this incident. There was no damage caused by this incident", that is to say, the arrest of the ESTAI, its voyage under arrest to St. John's and its sojourn in St. John's.

[173]        Other areas of the ESTAI, the wheelhouse, the 'tween deck and the factory were described as untidy or very untidy and covered in dirty footprints. With respect to the fish holds, the aft hold was described as "Empty, loose packaging lying around, untidy". The forward fish hold was noted to be "Partly discharged, approximately 20 packages of fish broken open and the contents spilled. The surface of the packages of fish on the top layer were damaged by footprints and obviously had been walked on without regard for the cargo."

[174]        The narrative report is followed by 37 photographs, some of which were taken in relative darkness and all of which indicate the date on which they were taken, that is to say the 15^th of March, 1995. In the Court's view, these photographs represent the best visual record of the ESTAI that was before the Court.

[175]        Mr. Jenkins testified that, when he inspected the ESTAI, she was moored "port side to", with her left side visible from the quay. His comments on the condition of the external hull were based on visual examination from the quay and visual examination from the deck. In the result, his visual examination of the starboard side of the ESTAI was rather limited. Mr. Jenkins testified that he did no examination below the waterline.

[176]        The witness testified that, in his inspection of the main deck, he noted that the "main trawl warps" or cables had been cut and that there was no net on the main deck. Mr. Jenkins testified to a conversation that he had with Captain Davila concerning damage to the ESTAI. He reported that Captain Davila advised him that he wasn't aware of any damage caused by the events of March 9^th or during the voyage from the point of boarding to St. John's. By contrast, Captain Davila identified the damage to the deck rail on the starboard side (photo #9) and to a cabin on the starboard side (photos #23 and #24) as having been incurred in an event previous to March 9^th.

[177]        Counsel took Mr. Jenkins through the photographs and Mr. Jenkins testified briefly with respect to each. He testified that he went on board the ESTAI at about 15:00 hours when Canadians who were on board the vessel left and gave him permission to board. He testified that he may well have been the first to board the ESTAI after control of the vessel was relinquished by the Canadians. Captain Davila boarded the ESTAI either slightly before or slightly after Mr. Jenkins did. The crew boarded later.

[178]        Finally, Mr. Jenkins testified that he departed the vessel between 21:00 and 21:30 hours.

[179]        The ESTAI left the port of St. John's on the night of the 15^th of March. Her departure was observed from the shore by Captain Riggs. Although an ice chart that was before the Court indicated that ice conditions existed close to the entry to the port and down the east side of the Avalon Peninsula, albeit at some distance from shore, Captain Riggs testified that he saw no ice as the ESTAI left the port. The only testimony before the Court with regard to the voyage of the ESTAI from St. John's to Vigo was to the effect that the ESTAI did not encounter ice conditions on the voyage.

[180]        The ESTAI arrived in Vigo on the 23^rd of March, 1995 to a substantial and very supportive reception^[68].

THE SOJOURN OF THE ESTAI IN VIGO, SPAIN IN THE SPRING OF 1995

[181]        Inspection of the ESTAI following its return to Vigo disclosed structural damage. At least one insurance claim was made by the corporate plaintiff. The ESTAI was placed in drydock. Mr. Juan Murillo was retained by the corporate plaintiff's insurer to prepare a survey report with a recommendation as to what portion of the claim against the insurer, if any, should be paid. Mr. Murillo, a consulting engineer, a "...special engineer in mechanical specialty..." and an Associate Professor at the University in Vigo, was called as a witness on behalf of the Plaintiffs and testified at some length by reference to his report to the insurer which was put in evidence both in the original Spanish language form and a translated English version.^[69]    Mr. Murillo chose to testify mostly in English, not his first language, and significant parts of his testimony were quite technical. His testimony was not always easy to follow.^[70]     

[182]        A "Bureau Veritas" report to the corporate plaintiff's insurer that is annexed to the front of Mr. Murillo's report indicates that the survey was carried out from the 17^th of April, 1995 when the ESTAI was placed in drydock to the 16^th of May, 1995, approximately the date when the ESTAI was returned to the water. Mr. Murillo's report indicates at page 2 of the English version:

Vessel placed in Cardama drydock on 17-04-95 for occasional inspection of dry hull for final repair of the forepeak.

Interior of forepeak inspected along with its exterior plating E/C 101 to Pr. [sic], finding the following:

1.1            Deformation of the exterior plating and break in lower part of the port side astern of the hawse hole, with a 450-mm crack.

1.2            Breaks in side stringers, decks and welding beads for joins of reinforcements.

1.3            Breaks in ribs, reinforcements and welds between reinforcements and exterior plating.

1.4            Deformation of the forward bulkhead of the chain well and its reinforcements with approximately 100-mm strapping.

1.5.           Deformation and break in two side stringers, main deck, upper deck and collision bulkheads.

1.6            Break in welding between exterior plating and collision bulkhead 107, extending 800 mm upwards from its lower part on the starboard side.

[183]        Mr. Murillo's report provides a description of the alleged occurrence giving rise to the damage. He states in part:

On 19/04/95 personnel from the vessel, which was in drydock facilities operated by the firm CARDAMA in VIGO, noticed nearly symmetrical deformations and damage to the plating on both of its sides, from rib 106 to the bow ..., including the stem but NOT the ship's bulb..., which deformations were apparently the result of having collided with floating objects.

[184]        Under the heading "Analysis of the Occurrence" Mr. Murillo notes that, given the unavailability of the Log Book which had been retained by "Canadian authorities", he relied on information provided by crew interviews and those interviews indicated "...the damages are the result of having to navigate through masses of ice after the arrest." Mr. Murillo goes on to note "...defects in the welded seams..." and that "...the structural deformation of the plating was aggravated by the lack of strength in the interior." He also noted that corrosion had taken place prior to the alleged occurrence.

[185]        The corporate plaintiff's claim against its insurer amounted in total to 20,626,190 pesetas. Mr. Murillo noted that some of the work done or proposed to be done was simply not attributable to the alleged occurrence, and that certain other work amounted to upgrading that it was convenient to do at the same time while the ESTAI was in drydock. In the result, he proposed total compensation to the corporate plaintiff of 11,197,937 pesetas. In the end result, the claim was settled by payment of an amount of 9,347,937 pesetas. The "Quitclaim receipt" for the payment provides that the corporate plaintiff's claim against any third party is subrogated to the insurer.

[186]        As noted earlier in these reasons, the ESTAI left port in Vigo, Spain on the 18^th of May, 1995 on its way to its fourth campaign on waters of the NAFO Regulatory Area.

SOME AFTERMATH

[187]        Mr. Applebaum, the Defendant's only witness, testified that, despite the events of early March, 1995, or perhaps partly because of those events, diplomatic efforts continued in an effort to achieve a negotiated settlement of the differences between Canada and the European Union, and more particularly Spain, that culminated with the arrest of the ESTAI on the 9^th of March, 1995^[71].

[188]        By mid-April, 1995, a negotiated settlement was apparently imminent.    By document dated the 10^th of April, 1995^[72], a Stay Of Proceedings (Nolle Prosequi) was entered in the Provincial Court of Newfoundland at St. John's with respect to all charges against Captain Davila and the ESTAI. At or about the same date, the Provincial Court of Newfoundland returned to counsel for the Plaintiffs the original bond deposited to secure the release of the ESTAI and the cash bail, together with interest, deposited to secure the release of Captain Davila.

[189]        Over date of the 20^th of April, 1995 an "Agreed Minute" was entered into between the European Community and Canada. The first paragraph of that agreement under the heading "Control and Enforcement" reads as follows:

The European Community and Canada, in recognition of their commitment to enhanced cooperation in the conservation and rational management of fish stocks, and the pivotal role of control and enforcement in ensuring such conservation, agree that the proposals set out in Annex I shall constitute the basis for a submission to be jointly prepared and made to the NAFO Fisheries Commission, for its consideration and approval, to establish a Protocol to strengthen the NAFO Conservation and Enforcement Measures.^[73]

[190]        The European Community and Canada agreed to immediately implement, on a provisional basis, as between themselves, certain of the control and enforcement measures reflected in Annex I to the Agreed Minute. Under the heading "Implementation", the following appears at page 3 of the Agreed Minute:

The provisions of this Agreed Minute, with its annexes as an integral part of it, shall be provisionally implemented by the European Community and Canada upon signature, pending its final approval through an exchange of notes.

This Agreed Minute shall cease to apply on 31 December 1995 or when the measures described in this Agreed Minute are adopted by NAFO, if this is earlier.

[191]        In Annex I to the Agreed Minute, under the heading "Basis For Conservation and Enforcement Strategy", the following appears:

The strategy underlying this proposal comprises the following elements:

a)             Simplification and strengthening of existing rules, making them more enforceable.

b)              Establishment and enforcement of minimum fish sizes compatible with meshes in use in order to minimize discarding.

c)             Encouragement of the practice of selective fisheries, with minimal by-catch.

d)             Improvement of hail system.

e)              Increased inspection on fishing grounds and on landings.

f)             Increased transparency.

g)             Pilot project for observers and satellite tracking system.

h)             A system for immediate response to alleged major infringements.

i)              Reporting rules.

j)              Use of legal process.

k)             Penalties.

l)              Effort control.

[192]        Of equal interest is Annex II dealing with "Quotas For Greenland Halibut". That Annex is in the following terms:

I.              NAFO DECISIONS FOR 1995

The European Community and Canada will jointly propose to NAFO for 1995:

a)             The TAC for 2+3 Greenland halibut shall be divided as follows:

- 2+3 K (Canadian 200 miles)                                7,000 tonnes

- 3 LMNO                                                              20,000 tonnes

b)             The 7,000t allocation for 2+3K (within Canadian 200 miles) for Greenland halibut shall be allocated to Canada.               

II.            VOLUNTARY ARRANGEMENTS FOR 1995

(a)            Canada's catches by its vessels for Greenland halibut will not exceed 10,000 tonnes, subject to any more stringent conservation decisions that Canada may take in light of further scientific advice.

(b)           The European Community's further catches by its vessels for Greenland halibut will not exceed 5,013 tonnes from April 16, 1995.

(c)            The European Community and Canada will not permit their vessels to fish for species covered by the NAFO Convention in the NAFO Regulatory Area beyond the fifteen-day period referred to under point A.2 of the Agreed Minute until the improved fisheries control and enforcement measures set out therein are being implemented.

Beyond agreed catch limits, no by-catches of Greenland halibut shall be retained on board.

III.            1996 AND THEREAFTER

The European Community and Canada will jointly propose to NAFO for 1996 and thereafter:

(a)            NAFO will manage Greenland halibut in 3LMNO. The allocations will be in the ratio of 10:3 for the European Community and Canada (aside from allocations to other Contracting Parties).

(b)           On the basis of NAFO Scientific Council advice, Canada will manage Greenland halibut in Canadian waters in 2+3K.

(c)            NAFO Scientific Council will provide scientific advice on Greenland halibut for units O+1, 2+3K and 3LMNO.^[74]   

[193]        In effect, both Canada and the European Community agreed to substantial modifications of their 1995 Greenland halibut quotas, as provisionally approved by NAFO in the case of Canada and as unilaterally established by the European Community following its reservation from the NAFO quotas. The European Community and Canada agreed to a joint proposal to be put before NAFO for Greenland halibut allocations for 1996, as well as allocations for subsequent years.

[194]        Mr. Applebaum testified that the Agreed Minute constituted a major breakthrough in the conservation and rational management of fish stocks in general, but more particularly, Greenland halibut stocks on the Grand Banks and in the NAFO Regulatory Area outside Canada's fishery waters.

[195]        Presumably in direct response to the Agreed Minute, on the 1^st of May, 1995, Canada amended its Coastal Fisheries Protection Regulations to repeal the references to Spain and Portugal in Table IV to section 21 of those Regulations. In effect, the addition of Spain and Portugal to the list of flags against which Canada purported to take the right to unilateral action in the NAFO Regulatory Area that was enacted on the 3^rd of March, 1995, was repealed. The Regulatory Impact Analysis Statement in relation to the amending Regulation of the 1^st of May, 1995 reads in part as follows:

[196]        At its 17^th Annual Meeting from the 11^th to the 15^th of September, 1995, the NAFO Fisheries Commission effectively adopted the substance of the Agreed Minute of the 20^th of April, 1995 between the European Community and Canada.^[75]

[197]        Finally, Mr. Applebaum testified that in late 1995, the United Nations Conference on Straddling Stocks completed its negotiations and the resulting Convention was opened for signature "...towards the end of 1995."^[76] Mr. Applebaum described the Convention in the following terms:

...it was a convention which was supposed to go and did go into a great deal of detail to establish the rules that would govern international management through fisheries commissions of all the worlds straddling and high(ly) migratory stocks. It had provisions such as- - and radical provisions such as that where there is an international fisheries commission that has been established for an area, any vessel entering that, any fishing vessel entering that area, even though it's flying a flag of a country that was not a member of that fisheries organization is subject to boarding and inspection to see what's on it and see if they're fishing, what they're catching and their gear is like and all these sorts of things. And also the requirement that where there is such an international commission, any country that's not a member of the commission must, none the less, follow the fishery rules set up by that commission. It has the option to join it, but whether it joins it or not, it's obligated to follow the rules set by that commission. So, those are a couple of examples that had a large section on the precautionary principle which I described earlier.^[77]

[198]        As earlier noted in these reasons, it was not in dispute before me that Greenland halibut, at least on the Grand Banks and in the deep waters of the NAFO Regulatory Area east off the Grand Banks, is a straddling stock.

THE ISSUES

[199]        Also as earlier noted in these reasons, at the beginning of the second week of trial, that is to say on Monday the 17^th of January, 2005, counsel for the Plaintiffs announced that Captain Davila would not testify. In fact, Captain Davila had either left St. John's by that morning or was preparing to do so. Counsel interrelated the departure of Captain Davila with his and his clients' conclusion that there is only one narrow issue of law arising out of this trial and that is whether the Government of Canada had the legal right to board and arrest the ESTAI in international waters on the 9^th of March, 1995. Subsidiary to that issue are issues related to the allegedly "reckless" conduct of the Canadian vessels in the pursuit of the ESTAI, the use of a water cannon and gunfire in the course of that pursuit and the use of armed boarding teams to board the ESTAI.

[200]        Issues identified in the final iteration of the Statement of Claim regarding failure to provide the Plaintiffs with reasonable time to instruct counsel concerning charges laid against them, allegedly contrary to paragraph 10(b) of the Charter, failure to provide Captain Davila with effective protection against abuse, jostling, obscenities and assault during the transit from the ESTAI to the Courthouse in St. John's on the evening of the 12^th of March, 1995, and alleged discrimination against Captain Davila on the basis of his race and national and ethnic origin have, I am satisfied, effectively been abandoned since absolutely no evidence was introduced before the Court with respect to those allegations.

[201]        The remaining issues relate to special damages, general damages, punitive damages, aggravated damages, interest and costs.

ANALYSIS

1)         The Vires of the Alleged Authority for the Pursuit, Boarding and Arrest of the ESTAI in International Waters on the 9^th of March, 1995

a)         The Legislative and Regulatory Scheme

[202]      As indicated earlier in these reasons, the legislative authority for the relevant actions of the Government of Canada derives from sections 5.1 and 5.2 of the Coastal Fisheries Protection

Act which are reproduced earlier in these reasons. For ease of reference, they are reproduced again here:

[203]        Once again as noted earlier in these reasons, the May, 1994 amendments to the Coastal Fisheries Protection Act substantially broadened the regulation making authority under section 6 of that Act. The opening words of that section and the new provisions added to that section in May of 1994 read as follows:

[204]        Purportedly under the authority of the foregoing amendments to section 6, by regulations made the 3^rd of March, 2005, the Governor-in-Council amended the Coastal Fisheries Protection Regulations to include among the classes of foreign fishing vessels that are prescribed classes, vessels that fly the flags of Portugal and Spain to provide that, in respect of foreign fishing vessels within the new class, the following were "...prescribed conservation and management measures":

[205]        Finally, section 19.3 of the Coastal Fisheries Protection Regulations reads, and section 19.4 of the same Regulations was amended to read, as follows:

[206]        The amendments to the Coastal Fisheries Protection Regulations enacted on the 3^rd of March, 1995 were declared by the amending regulations to "...apply according to their terms before they are published in the Canada Gazette." It was not in dispute before me that the amending regulations were not published in the Canada Gazette until a date later than the 9^th of March, 1995.

b)               The Notice of Constitutional Question

[207]        By Notice of Constitutional Question sworn by affidavit dated the 7^th of January, 2005 to have been served on the Attorneys General of Canada and each province as required by section 57 of the Federal Courts Act^[78], the constitutional question here at issue was posed in the following terms:

The Plaintiffs intend to question the constitutional validity, applicability or effect of Regulations made by the Governor-in-Council on March 3^rd, 1995 purporting to regulate fishing activities of Spanish Fishing Vessels in International Waters beyond the 200 mile economic zone of Canada.

[208]        As earlier noted in these reasons, only the Attorney General of Newfoundland responded to the Notice of Constitutional Question. The Attorney General of Newfoundland eventually withdrew his interest in making representations to the Court on the issue.

c)               The Plaintiffs' Position

[209]        The Plaintiffs do not question the constitutional validity of amendments to the Coastal Fisheries Protection Act enacted in May of 1994 that purport to authorize the making of the Regulations enacted the 3^rd of March, 1995.    An early iteration of the statement of claim herein forecasted such a challenge. While the elements of the statement of claim forecasting a challenge to the legislation were eventually struck, reasons for the Order striking those provisions of the statement of claim made it clear that the challenge to the legislation could nonetheless have been pursued.^[79] Rather, counsel on behalf of the Plaintiffs urged that the regulations at issue of the 3^rd of March, 1995 were ultra vires of the authority under which they were purported to be made on essentially four grounds: first, they were not enacted as effective conservation and management measures for any straddling stocks, but rather to promote the economic interests of Canada and Canada's fishing industry and fishers; secondly, the vessels of Spain and Portugal were not a "...class of foreign fishing vessels for the purposes of section 5.2 ..." of the Act; thirdly, the 3^rd of March regulations were discriminatory contrary to section 15 of the Charter, and finally, they were not published in the Canada Gazette until after the 9^th of March, 1995.

d)                The Defendant's Position

[210]        Counsel for the Defendant, by reference to each of the grounds relied on by the Plaintiffs to urge that the regulatory authority under which the Defendant purported to act in pursuing, boarding and arresting the ESTAI in international waters, submitted that those grounds have no merit and that thus the pursuit, boarding and arrest were authorized in law.

e)                The Position of the Court

[211]        The Court is satisfied that the Defendant, acting through the Minister of Fisheries and Oceans and his employees and agents, had the legal right to arrest the ESTAI and its master in international waters on the 9^th of March, 1995.

[212]        As earlier noted, amendments to the Coastal Fisheries Protection Act enacted in May of 1994 defined the "NAFO Regulatory Area", authorized the prescription by regulation of "straddling stocks" of fish, and foreign fishing vessels constituting a class, and after reciting Parliament's recognition of the pressures on "stradding stocks" in the NAFO Regulatory Area, declared the purpose of the new section 5.2 enacted by the same amendments to be to "...enable Canada to take urgent action necessary to prevent further destruction of those stocks and to permit their rebuilding, while continuing to seek effective international solutions ...". For reference, section 5.2 of the Act is quoted above in paragraph [202] of these reasons. As noted in paragraph [203], the regulation-making authority was dramatically expanded.

[213]           The regulations of the 3^rd of March, 1995 followed. Greenland halibut was prescribed to be a straddling stock in subareas 3L, 3M, 3N and 3O of the NAFO Regulatory Area; vessels flying the flag of Spain, and incidentally, Portugal, were added as a prescribed class; and an absolute prohibition against fishing for, or catching and retaining Greenland halibut in subareas 3L, 3M, 3N and 3O of the NAFO Regulatory Area was put in place commencing on the 3^rd of March, 1995. Section 19.4 of the Regulations was added to strengthen the conditions precedent prior to using force in the arrest of a foreign fishing vessel. More will be said about those conditions later in these reasons.

[214]        On the evidence that came before the Court, as earlier noted in these reasons, the Court simply finds no basis on which to conclude that the motivation of the Governor-in-Council in enacting the amending regulations of the 3^rd of March, 1995 was not for conservation and management purposes in relation to a straddling stock, Greenland halibut. Counsel for the Plaintiffs attempted valiantly to establish that the objective was to promote the economic interests of Canada and Canada's fishing industry and fishers. I am satisfied that the totality of the evidence points directly to an objective of preservation of the Greenland halibut stocks and the achievement in international fora of significant strengthening of the international regulatory regime. While recent media reports may now, more than ten (10) years after the events, suggest that Canada's achievements toward strengthening of the international regulatory regime were not as significant as originally hoped for and forecasted, that is irrelevant for the purposes of this matter.

[215]        In Rizzo & Rizzo Shoes Ltd. (Re)^[80], Justice Iacabucci, for the Court, wrote at paragraphs

21 and 22:

Although much has been written about the interpretation of legislation ... , Elmar Driedger in Construction of statutes ... best encapsulates the approach upon which I prefer to rely. He recognizes that statutory interpretation cannot be founded on the wording of the legislation alone. At p.87 he states:

Today there is only one principle or approach namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.

Recent cases which have cited the above passage with approval include: R. v. Hydro-Quebec, ... Royal Bank of Canada v. Sparrow Electric Corp., ...; Verdun v. Toronto-Dominion Bank ...; Friesen v. Canada, ... .

I also rely upon s.10 of the Interpretation Act, R.S.O. 1980, c. 219, which provides that every Act "shall be deemed to be remedial" and directs that every Act shall "receive such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Act according to its true intent, meaning and spirit".

[citations omitted]

[216]        Against the foregoing, the Court finds no basis on the evidence before it on which to conclude that fishing vessels of Spain and Portugal cannot constitute a "prescribed class". Once again, counsel for the Plaintiffs urged that the regulatory authority to prescribe classes of foreign fishing vessels for the purpose of section 5.2 of the Coastal Fisheries Protection Act should be interpreted so that "class" should refer only to, size, tonnage, construction, fishing equipment used, species sought, or method of propulsion or the like. There was simply no evidence put before the Court that would sustain such a restricted interpretation of "class". Indeed, all of the evidence that was before the Court pointed to the reality that the continuing threat to endangered species of straddling stocks in the NAFO Regulatory Area was posed by fishing vessels without nationality, foreign fishing vessels flying "flags of convenience" and, on the particular facts of this matter, foreign fishing vessels flying flags of Spain and Portugal.

[217]        Similarly, the Court can find no basis on which to conclude that the prescription of vessels flying the flags of Spain and Portugal as a "class" of vessels for the purposes of section 5.2, contravenes section 15 of the Charter. First, and most obviously, section 15 of the Charter simply does not speak to protection of "vessels" but rather to the protection of the equality of individuals against discrimination on grounds that certainly include race and national or ethnic origin. The Court simply cannot conclude that the distinctions here at issue were directed against Spanish persons based upon stereotyping and prejudice against them. Even if the evidence before the Court was clear that only Spanish persons may serve aboard fishing vessels flying the flag of Spain, and it was not, the evidence certainly did not go so far as to demonstrate that Spanish persons do not and cannot serve aboard vessels flying the flags of other states.

[218]        Finally, on the vires of the Regulations in question, subsection 11(2) of the Statutory Instruments Act^[81] reads as follows:

At issue here was the exercise of boarding, seizure and arresting authority, not the validity of any conviction since the charges against the ESTAI and Captain Davila were withdrawn before they came to trial. Furthermore, the statutory instrument enacting the 3^rd of March, 1995 amendments to the Regulations specifically provided that those amendments would apply "according to their terms before they are published in the Canada Gazette". No challenge to the authority of the Governor-in-Council to so provide was urged before the Court. Finally, the evidence before the Court clearly demonstrated that prior notice was given to the European Union of the intention of the Government of Canada to act in the manner in which it did on the 9^th of March, 1995. The ESTAI and other vessels withdrew from the NAFO Regulatory Area following receipt of that notice. The ESTAI and, apparently, other vessels returned to the NAFO Regulatory Area before the 9^th of March, 1995. At the point of their return, I am satisfied that it can be inferred that the owners of the vessels and their masters were aware of the intention of the Government of Canada.

2)               Reckless Conduct in the Pursuit of the ESTAI and Excessive Force

a)               The Positions of the Parties

[219]        Counsel for the Plaintiffs submitted that the actions of the Defendant in using "gunboats" against the ESTAI and in harassing and terrorizing its master and crew on the high seas were unlawful and tortious, that the boarding of the ESTAI was a trespass and that the Plaintiffs are therefore entitled to damages. In contrast, counsel for the Defendant urged that the actions of the Defendant, in the first attempt to arrest the ESTAI, were in no sense excessive. Counsel further submitted that, when the ESTAI cut its warps and began to run, the actions of the Defendant's vessels in pursuing the ESTAI and using a water cannon and, after raising a signal flag indicating its intention to board and in response receiving a signal from the ESTAI that it was not going to stop, firing warning shots, were entirely reasonable and justified.

b)                The Position of the Court

[220]        At the relevant time, sections 8, 8.1 and 9 of the Coastal Fisheries Protection Act read as follows:

[221]        Section 19.5 of the Coastal Fisheries Protection Regulations^[82], ise under the heading "Use of Force". Sections 19.3 and 19.4, under the same heading, are quoted in paragraph [205] of these reasons. Section 19.5, at the relevant time, read as follows:

[222]        It was not in dispute before the Court that the persons on board the vessels that approached the ESTAI on the 9^th of March, 1995 and that first attempted to board her on that date and later successfully boarded her were protection officers within the meaning of sections 19.3 to 19.5 of the Regulations. While the evidence before the Court indicated that the "task force" that first approached the ESTAI might have included a Canadian naval vessel, there was no evidence before the Court that it played any active part in the pursuit and arrest.

[223]        The first attempt to board the ESTAI was actively resisted by those on board, who threw the protection officers' boarding ladder into the sea and cut the ESTAI's warps to make the ESTAI more mobile. The ESTAI began to run slightly to the south of east, which is to say, towards international waters outside the NAFO Regulatory Area. In the absence of testimony from anyone on board the ESTAI, except Mr. Santiago who gave no useful testimony in this regard, the Court is left with no alternative but to rely on the testimony of persons from on board the pursuing and arresting vessels. That testimony was, in the view of the Court, much to be preferred over the testimony of those persons in Vigo, Spain who testified that they were in radio-telephone contact with the ESTAI during the course of the pursuit and arresting actions.

[224]        The testimony before the Court of those on board one of the pursuing vessels, the Cape Roger, supported to some extent by entries in the log-books of that vessel, was to the effect that, although the pursuit was at times in foul weather and, in the later stages, was at close quarters and was impeded by other unidentified vessels, it was no more dangerous and, in the later stages, involved no more use of force than was necessary to achieve the arrest of the ESTAI.

[225]        There was no evidence before the Court that the use of a water cannon inflicted any damage on the ESTAI or its cargo. While the testimony concerning the use of signal flags and the response from the ESTAI that it would not voluntarily cease its flight was not as clear and unequivocal as one might have hoped for, the Court is satisfied that the pursuing vessels used appropriate flag signals to give the ESTAI notice of their intention to fire warning shots and to board and that the ESTAI nonetheless continued to run. There was no evidence whatsoever before the Court that the warning shots that were fired were other than "... in the vicinity of the [ESTAI] but at a safe distance ... [from the ESTAI]". The testimony before the Court indicated that the warning shots, and only the warning shots, effectively resulted in the ESTAI discontinuing its flight.

[226]        In light of the conduct of those on board the ESTAI in resisting the first attempted boarding, in cutting the warps connecting the ESTAI to its fishing net and running, and continuing to resist providing an opportunity to board when the Canadian vessels overtook her, until warning shots were fired, I am satisfied that it was reasonably open to those on board the Canadian vessels to arm the members of the boarding teams that eventually went on board and took control of the ESTAI.

[227]        Based upon the foregoing brief analysis of the totality of the evidence before the Court, with particular emphasis on the testimony of those who were on board the Cape Roger, I am satisfied that any claim that the conduct of the Canadian pursuing ships was reckless, that excessive force was used or that the provisions of sections 19.3 to 19.5 of the Coastal Fisheries Protection Regulations were not fully complied with is unjustified. That the master of the ESTAI, after the trial of this matter had commenced, chose not to give evidence, I am satisfied supports the Court's conclusion in this regard.

3)                Damages

[228]        In light of the Court's conclusions to this point, consideration of issues relating to the damages claimed in this action on behalf of the Plaintiffs may be seen to be unnecessary. The Court concludes otherwise. The diversion of the ESTAI and her master and crew to St. John's, the laying of charges and the detention of the ESTAI in port combined with the eventual disposition of the charges against the ESTAI and her master, give rise to special considerations. Further, given the amount of time that has elapsed since the events in question and the possibility of an appeal of the judgment herein, the Court will turn, relatively briefly, to those issues.

a)                Special Damages

i)           Ice Damage

[229]        The court is satisfied on the evidence before it that, during the voyage of the ESTAI that is in question, the ESTAI suffered hull damage. The source or sources of that damage remain somewhat speculative.

[230]        Counsel for the Plaintiffs urged that the Court should find that the hull damage was entirely attributable to the voyage of the ESTAI from the point of arrest to St. John's when the ESTAI was the "prisoner" of Canadian arresting officers who, the evidence establishes, were clearly in command and control of the route taken. By reason of that command and control, counsel for the Plaintiffs urged that the Defendant should be wholly responsible for the resulting damage, whether or not the arrest was lawful. In essence, counsel for the Plaintiffs urged that the Defendant and Crown employees and servants owed a duty of care to the Plaintiffs to ensure the safe and unobstructed passage of the ESTAI to St. John's. Counsel urged that those in charge of the passage of the ESTAI to St. John's failed in that duty. In the result, counsel urged, the Defendant should be held liable to the plaintiff corporation for the cost of repairs to the ESTAI that were determined on behalf of the insurers of the ESTAI to be an insured loss that was consistent with ice damage. The amount in question was urged to be the total cost of the dry docking of the ESTAI in Vigo in April and May 1995, plus the total cost of insured repairs. That amount is 23, 926,381 pesetas which, at the agreed conversion rate on the relevant date, amounts to $263,907.98.

[231]        Counsel for the Defendant urged that the Plaintiffs have simply failed to establish that any damage to the hull of the ESTAI that was incurred during the voyage at issue was anything other than "minor wear and tear". Counsel pointed to the evidence of the Plaintiffs' own surveyor in St. John's, Mr. Robert Jenkins, who, in what I can only describe as a rather superficial report arising from a survey that he conducted on the last day that the ESTAI was in harbour in St. John's, records no evidence of hull damage. What is perhaps more telling was Mr. Jenkins' evidence that, during the course of his survey, he spoke with Captain Davila who apparently made no mention of ice damage. Further, the fact that Captain Davila chose not to testify, counsel urged, should give rise to an adverse inference regarding the source of hull damage. Certainly the brief and casual commentary of Captain Davila during examination for discovery that is referred to earlier in these reasons would support such an adverse inference. Counsel for the Defendant noted that Captain Davila filed a "Maritime Protest" to record the damage that had occurred to the ESTAI while operating in aid of the Maria Victoria G, also earlier referred to. There was no evidence before the Court of a similar "Martime Protest" relating to the alleged ice damage, whether before or after the ESTAI was inspected in dry dock in Vigo in April, 1995.

[232]        While the evidence before the court demonstrated that the hull of the ESTAI was to some degree strengthened, the evidence also established that it was not "ice-strengthened". It cannot be disputed that the voyage of the ESTAI from the point of arrest to St. John's was in part through ice conditions, and under the direction and control of the arresting officers. That being said, the same officers and the escorting ships took significant steps to clear a path for the ESTAI and to minimize encounters of the ESTAI with ice. Those steps did not extend to altering the route of the voyage to entirely, or much more completely, avoid ice. The evidence indicated that this might in part have been driven by a desire to get the ESTAI into port in St. John's at the earliest possible time.

[233]        On balance, I accept the submission of counsel for the Defendant that the Plaintiffs have simply failed to meet their burden of establishing, on a balance of probabilities, that the damage to the hull of the ESTAI that was documented following the return of the ESTAI to Vigo was attributable, in whole or in part, to the voyage of the ESTAI from the point of arrest to St. John's, Newfoundland. I reach this conclusion in large part by drawing an adverse inference from the failure of Captain Davila to testify.

ii)          The Sojourn of the ESTAI in St. John's and Legal Expenses

[234]        The Plaintiffs claim ship's agency fees and hotel expenses in St. John's for the crew of the ESTAI when they were required to vacate the ESTAI, and bonding expenses in order to obtain the release of the ESTAI. In addition, they claim legal fees and disbursements for counsel retained in St. John's, for the plaintiff corporation's counsel from Vigo, Spain who travelled to St. John's and for an additional firm of lawyers in Spain, retained to provide advice on the unique factual situation here at issue, by virtue of the legal firm's specialized expertise in maritime and fisheries matters and the absence of regular corporate counsel from Vigo when he travelled to St. John's.

[235]        Assuming without admitting any liability on the part of the Crown, counsel for the Defendant did not dispute the ship's agency fees. With respect to the hotel expenses for members of the crew of the ESTAI, counsel for the Defendant pointed to the fact that the evidence before the Court demonstrated that those expenses were covered by the Government of Spain and that there was no evidence before the Court that the Government of Spain made any effort to recover or, indeed, successfully recovered, those expenses from the Plaintiffs. In the circumstances, counsel urged, this claim should be disallowed in any event.

[236]        Counsel for the Defendant urged that legal fees and disbursements, including bonding expenses, when associated with a prosecution, whether successful or otherwise and whether or not fully prosecuted, are not recoverable unless the Defendant's case was "remarkable" or there was "oppressive or improper conduct" alleged against the Crown^[83].

[237]        The circumstances of the arrest of the ESTAI and its master, the charges laid against them and the eventual stay of all of those charges are sufficient, the Court is satisfied, to make of those charges a "remarkable" case for the accused, here the Plaintiffs. While the Court is not satisfied that there is any evidence that the conduct of the Crown in the arrests and preliminary pursuit of the charges involved any oppressive or improper conduct, the Court is nonetheless satisfied that the Plaintiffs should be entitled to cover their out-of-pocket legal expenses and ship's agency fees to the time of the departure of the ESTAI from St. John's. These disbursements, when converted from pesetas where appropriate at the agreed rate, total $74,787.82.

iii)         Lost Fishing Time, the ESTAI and Captain Davila

[238]        Counsel for the Plaintiffs urged that, on the basis of the evidence before the Court, the net revenue per day from the operations of the ESTAI on the NAFO Regulatory Area fishing grounds, when converted to Canadian dollars at the agreed rate, amounted, to $4,414.04, reduced by agreement and for ease of calculations, to $4,000.00 per day. Counsel urged that, by reason of the actions of the Government of Canada, the ESTAI "... lost 81 fishing days which in turn resulted in damages of $324,000.00". The eighty-one (81) days comprised the 6^th and 7^th of March, 1995 when the ESTAI had left the fishing grounds by reason of the "threats" made by Canada, the 8^th and 9^th of March when it was admitted that there was some time spent fishing with part of the 8^th being lost in the voyage of return to the fishing grounds and part of the 9^th being lost by reason of the first attempted boarding of the ESTAI and the following events culminating in her boarding and arrest. The remaining seventy-seven (77) days run from the 10^th of March to the date in May when the ESTAI left Spain, repaired, reconditioned and upgraded, to return to the fishing grounds. Counsel urged that all of those seventy-seven (77) days should be compensated since a portion of them was days when the ESTAI was avoiding or under arrest, another portion was days spent in the voyage from St. John's to Vigo, and the balance was days when the ESTAI remained in Vigo for off-loading, survey, repair and reconditioning and the obtaining of a new permit.

[239]        Counsel for the Defendant, while denying any liability, urged that, at most, any liability should be limited to eleven and one-half (11.5) days, those being the portion of the 9^th of March, 1995 following the first attempted arrest of the ESTAI, the days while the ESTAI was under arrest, and two (2) days which would have been required for the ESTAI to return directly from St. John's to the fishing grounds. Counsel noted that the evidence before the Court clearly established that the ESTAI departed Vigo, Spain on the voyage in question on the 27^th of October, 1994. Its licence or permit was scheduled to expire the 31^st of March, 1995. While negotiations to extend the licence for a further month were under contemplation, there was no indication that an extension could have been taken for granted. Thus, less than a month of fishing time remained for the ESTAI when the arrest took place on the 9^th of March. It was open to the ESTAI to voluntarily return directly to the fishing grounds when she was released from arrest on the 15^th of March. She chose not to do so. Similarly, it was the decision of the Plaintiffs and not of the Defendant for the ESTAI to leave the fishing grounds for the 6^th and 7^th of March. That the ESTAI sailed directly from St. John's to Vigo and remained in Vigo until the 25^th of May, 1995 was, once again, a unilateral decision of the Plaintiffs for which the Defendant could not be held responsible.

[240]        Based on the rationale presented above for an award to the Plaintiffs in respect of out-of-pocket legal expenses and ship's agency fees, that is to say that the circumstances of this matter giving rise to and flowing from the arrest and laying of charges against the ESTAI and its master were "remarkable", I am satisfied that, by analogy to out-of-pocket legal expenses and ship's agency fees, the Plaintiffs should receive some award of damages in respect of lost fishing time. In that regard I accept the submission of the Defendant in light of the findings of the Court to this point, in particular, that the arrest of the ESTAI and her travel to and detention in St. John's were valid in law. The liability of the Respondent for lost fishing time should extend to only eleven and one-half (11.5) days at $4,000.00 per day, resulting in an award of damages of $46,000.00.

iv)         Extra Bunkers and Lubrication

[241]        It was not in dispute before the Court that the daily cost of bunkers and lubrication for the operation of the ESTAI, at all relevant times, amounted to $1,913.50.

[242]        Counsel for the Plaintiffs urged that the Plaintiffs should be compensated for bunkers and lubrication for twenty six (26) days comprised of the days when the ESTAI left the NAFO Regulatory Area by reason of Canada's announced intention to take action against fishing vessels such as the ESTAI, the roughly four (4) days of the voyage from the point of arrest of the ESTAI to St. John's, the three (3) days that the ESTAI was docked in St. John's under arrest, the eight (8) days that the ESTAI was engaged in the transit to Vigo, Spain from St. John's, and the eight (8) days involved in the return of the ESTAI to the fishing grounds from Vigo.

[243]        By contrast, counsel for the Defendant urged that, at most, the Plaintiffs should only be entitled to bunkering and lubrication costs for eight and one-half (8.5) days made up of three and one-half (3.5) days involved in the transit to St. John's from the point of arrest, three (3) days while the ESTAI was docked in St. John's and two (2) days representing the time that would have been taken for the ESTAI to return to the fishing grounds from St. John's, if the Plaintiffs had chosen to have the ESTAI return there directly rather than to have her return to Vigo.

[244]        Based on the same rationale adopted earlier regarding "lost fishing days", I am satisfied that the Plaintiffs should receive compensation for extra bunkers and lubrication but that such compensation should be limited to the eight and one-half (8.5) days advocated in the alternative on behalf of the Defendant. Based upon the revised daily cost of bunkers and lubrication presented at trial, that is to say $1,913.50, the Court awards damages in this regard to the Plaintiffs in the amount of $16,264.75.

v)          "Missing Fish"

[245]        As earlier noted in these reasons, when the ESTAI was released from arrest, its aft frozen fish hold had been entirely emptied and its forward frozen fish hold had been partially emptied of fish. Counsel for the Plaintiffs urged that the quantity of fish on board the ESTAI at the time of its arrival in St. John's exceeded the quantity on board the ESTAI at the time of its release from arrest plus the quantity eventually returned back in St. John's to the custody of the plaintiff corporation. Counsel for the Plaintiffs originally estimated the shortfall at 46.226 tonnes valued at $4,500.00 per tonne, but revised that estimate at trial to sixteen (16) tonnes, valued at $5,122.00 per tonne for a total loss to the corporate plaintiff of $81,852.00.

[246]        Counsel for the Defendant urged that there was no evidence before the Court, or at least no reliable evidence, as to the quantity of frozen fish on board the ESTAI when it was brought into harbour at St. John's. While the ESTAI's log books and other records were seized by the Defendant and taken off the ESTAI when the ESTAI was berthed in St. John's, I am satisfied that those records were available to the Plaintiffs long before this matter came to trial. Failure to produce those records, or at least elements of those records to establish the quantity of frozen fish on board the ESTAI when it entered St. John's harbour is, I am satisfied, fatal to this element of the Plaintiffs' claim. No damages will be awarded in this regard.

vi)         Transportation Cost for Moving The Off-Loaded Frozen

Fish from St. John's to Vigo, Spain

[247]        The seized frozen fish just referred to was released into the custody of the corporate plaintiff at the frozen storage facility in or near St. John's where it was being held by the Defendant. It was not in dispute before the Court that the corporate plaintiff took possession of the quantity of frozen fish at that location. The corporate plaintiff took full responsibility for arranging for the transfer of the frozen fish from that location to Vigo, Spain. That transportation was arranged through Maersk Line and evidence before the Court^[84] demonstrates that the cost of transportation, when converted to Canadian dollars at the agreed rate, was $53,680.93.

[248]        It was further not in dispute before the Court that, under cover of a letter dated the 24^th of May, 1995, the Defendant, through its solicitors at that time, made an ex gratia payment to the corporate plaintiff, through counsel for the Plaintiffs, in the amount of $41,000.00. I am satisfied that the ex gratia payment was in respect of the cost of removal of the seized fish from St. John's to Vigo, Spain.

[249]        The Plaintiffs provided no evidence to demonstrate that the transfer of the frozen fish via Maersk Line amounted to the most reasonable alternative available, in terms of cost, for "patriation" of the seized frozen fish. There was no evidence before the Court that the Plaintiffs, in particular the corporate plaintiff, had attempted to mitigate any loss that it might incur by reason of relying on the Maersk Line.

[250]        In the circumstances, I am not satisfied on the evidence before the Court that the corporate plaintiff was not reasonably compensated for the cost of "patriation" of the seized frozen fish. No damages will be awarded in this regard.

b)                General, Punitive and Aggravated Damages

i)           General Damages

[251]        The Plaintiffs seek general damages for trespass on the high seas and reckless endangerment on the high seas and assault on the high seas including negligent and reckless navigation and use of automatic weapons, unlawful arrest and seizure of the motor vessel ESTAI, unlawful arrest of the plaintiff, Captain Davila, negligence, unlawful detention and interference with the Plaintiffs' servants and agents, namely the crew of the motor vessel ESTAI, failure to protect Captain Davila while in custody, interference with Charter rights to instruct counsel without delay, interference with Charter rights under section 15, unlawful eviction of crew from the ESTAI and unlawful discharge and seizure of cargo. Counsel for the Plaintiffs submitted that each of the Plaintiffs was entitld to be awarded general damages of $150,000.00.

[252]        Based on my findings to this point, I reiterate:

-                there was no trespass on the high seas in the arrest of the ESTAI;

-                  the actions of the Defendant in the boarding and arresting of the ESTAI were valid in law;

-                  there was no endangerment on the high seas or assault on the high seas whether by negligent or reckless navigation or by the use of "automatic" weapons;

-                there was no unlawful arrest and seizure of the ESTAI and there was no unlawful arrest of Captain Davila;

-                there was no negligence, unlawful detention or interference with the corporate plaintiff's servants and agents, namely the crew of the ESTAI, or if there may have been, there was no evidence of such before the Court;

-                 there was no evidence before the Court of failure to protect Captain Davila while he was in custody;

-                 similarly there was no evidence before the Court of interference with Charter rights of either of the plaintiffs to instruct counsel without delay;

-                 alleged interference with Charter protections against discrimination was simply not established;

-                 similarly there was no evidence or argument in law that "eviction" of the crew from the ESTAI when it was under arrest and berthed in the harbour at St. John's was unlawful or that the discharge and seizure of a portion of the cargo of frozen fish aboard the ESTAI was unlawful.

[253]        In the result, no general damages will be awarded in favour of either of the plaintiffs.

ii)          Punitive and Aggravated Damages

[254]        Counsel for the Plaintiffs urged that punitive damages are awarded against a defendant in exceptional cases for "malicious, oppressive and high-handed" misconduct that "offends the Court's sense of decency^[85]. While I am satisfied that this might well be regarded as an "exceptional case", I am also satisfied that there was no evidence whatsoever before the Court of "malicious, oppressive and high-handed" misconduct. To the contrary, in the exercise of authority that was conferred on them by validly enacted law, I am satisfied that the servants and agents of the Crown performed their duties with no greater use of force or risk to themselves and to those on board the ESTAI than was necessary in all of the circumstances. This, I am satisfied, is borne out by the evidence before the Court that, throughout the voyage to St. John's, the relationship between the officers and crew of the ESTAI on the one hand and those who boarded her on the other was, at the very least, civil. If there was any "malicious, oppressive or high-handed" misconduct on the part of the Crown or its servants or agents during the time when the ESTAI was berthed in St. John's, there was simply no evidence thereof before the Court.

[255]        Counsel for the Plaintiffs urged that the conduct of the Crown here had been calculated by it to make a profit for itself or for entrepreneurs and fishers in Canada which was not justified; in essence, that the Crown's motivation in scheduling fishing vessels of Spain and Portugal to the Coastal Fishes Protection Regulations and the ensuing boarding and arrest of the ESTAI was economic rather than fisheries protection oriented^[86]. As earlier indicated in these Reasons I reject the submission of counsel for the Plaintiffs that the Crown's motivation in enacting the 3^rd of March, 1995 amendments to the Coastal Fisheries Protection Regulations was economic.

[256]        Counsel for the Plaintiffs submitted that the distinction between punitive or exemplary damages, on the one hand, and aggravated damages on the other is that punitive damages are not compensatory but are designed to punish. Aggravated damages, by contrast, are compensatory in nature to compensate a party for harm caused by the conduct of another party that cannot be compensated by an award of general damages. In Whiten, supra, Justice Binnie, for the majority of the Court, wrote at paragraph 116:

... it must be kept in mind that punitive damages are not compensatory. Thus the appellant's pleading of emotional distress in this case is only relevant insofar as it helps to assess the oppressive character of the respondent's conduct. Aggravated damages are the proper vehicle to take into account the additional harm caused to the plaintiff's feelings by reprehensible or outrageous conduct on the part of the defendant. Otherwise there is a danger of "double recovery" for the plaintiff's emotional stress once under the heading of compensation and secondly under the heading of punishment.

[257]        Given the failure of Captain Davila to testify before the Court in this matter, there is simply no first-hand evidence before it that he suffered "additional harm" to his feelings. Further, the Court has already found that there was no reprehensible or outrageous conduct on the part of the Crown. Counsel for the Plaintiffs cited no authority before the Court which would suggest that a corporate plaintiff could be entitled to aggravated damages.

4)                Interest

[258]        Section 36 of the Federal Courts Act^[87] governs the determination of prejudgment interest in this Court. Applying the principles of that section, counsel for the parties reached agreement on the subject of prejudgment interest. At page 20 of the transcript of the hearing of this matter for the 17^th of February, 2005, commencing at line 24 and continuing on the following page, counsel for the Plaintiffs stated:

On interest, we have reached agreement on the issue of interest, Your lordship, and the interest agreement, and my learned friend may correct me if I'm mistaken in this, but it's 3.5 percent simple interest from July 28, 1995, to the date of judgment. 3.5 percent per year simple interest from July 28, 1995, which was the day the Statement of Claim was issued to the date of judgment.

[259]        Counsel also agreed on the issue of post-judgment interest, and the following paragraph follows the paragraph just quoted from the transcript:

And post-judgment interest at the prevailing rate on money paid into Court on the date of judgment. Whatever rate is applicable on the date of judgment that would be the rate of interest for post-judgment interest. Having said all that, I recognize that there is no agreement on liability, of course. This is an agreement concerning interest on any judgment.

The Court adopts the agreement of counsel in this regard.

CONCLUSION

[260]        In summary then, judgment will go in favour of the Plaintiffs in the amount of $137,052.57 with interest thereon at the rate of three point five percent (3.5%) per annum from the 28^th of July, 1995 to the date of judgment herein. The Plaintiffs will also be entitled to post-judgment interest at the prevailing rate on money paid into this Court on the date of judgment, to the date of payment. The quantum of the judgment is made up of the following elements:

- first, for out-of-pocket legal expenses and ship's agency fees during the sojourn

               of the ESTAI in St. John's, $74,787.82;

- secondly, for lost fishing time of the ESTAI by reason of its arrest and detention,

               $46,000.00; and

- thirdly, for extra bunkers and lubrication for the ESTAI, $16,264.75.

[261]        In all other respects, this action will be dismissed.

COSTS

[262]        Counsel for the Plaintiffs, on their behalf, seeks cost of this action on a solicitor and own client basis.

[263]        In Young v. Young^[88], Justice McLachlin, as she then was, for the majority on this issue, wrote at page 134:

The Court of Appeal's Order was based on the following principles with which I agree. Solicitor-client costs are generally awarded only where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties. Accordingly, the fact that an application has little merit is no basis for awarding solicitor-client costs; nor is the fact that part of the cost of the litigation may have been paid for by others.

The Court having found no reprehensible, scandalous or outrageous conduct on the part of the Plaintiffs or the Crown, based on a consideration of all of the evidence before it in this matter, costs on a solicitor and own client basis herein are out of the question.

[264]        By contrast, counsel for the Defendant urges that costs should be awarded on a party and party basis, on the usual scale, to follow the event. The Defendant has been largely successful on this action with the result that, if the Court were to accept the submission on behalf of the Defendant, costs would go in the Defendant's favour.

[265]        Against the foregoing, it is to be noted that this Court has broad discretion over the amount and allocation of costs and the determination of by whom they are to be paid^[89].    Rule400 (3) lists a series of factors that the Court may consider in exercising its discretion in the award of costs. That Rule reads as follows:

No submissions were made to the Court by counsel with regard to the factors enumerated in paragraphs (e), (f), and (i) to (n) inclusive. Against the remaining factors, I reach the following conclusions: while the result of the proceeding was substantially in favour of the Defendant, the result was to some extent divided; the amounts claimed on behalf of the Plaintiffs were substantial and the amounts recovered were much less than the amounts claimed; that being said, the monetary relief claimed by the Plaintiffs was not denied in its entirety; the importance and complexity of the issues at stake were substantial; the issues were certainly unique at the time the cause of action arose; the apportionment of liability is not a separate issue on the facts of this matter; undoubtedly very substantial work was required on both sides; and finally, the Court is satisfied that the public interest in having this proceeding litigated justifies a particular award of costs.

[266]        Against the foregoing, while general principles would urge an award of costs in favour of the Defendant, I am satisfied that it is appropriate that each side should bear its own costs which, I have no doubt, have been very substantial.

Ottawa, Ontario

July 26, 2005

                                                                          "Frederick E. Gibson"             

                                                                                                   J.F.C.                          

                                  ANNEX 1

(paragraph 2)

Note: The outer limit of Canada's fishery waters in fishery subareas 3K, 3L and 3N is marked by a faint rounded line between west of 45⁰ and east of approximately 51⁰, both west longitude. I

                                             ANNEX II

(paragraph 24)

1.              At all material times the Estai was of Spanish registry operating out of the home port of Vigo, Spain, which is also her Port of Registry.

2.              At all material times the Estai was owned by the Plaintiff José Pereira E. Hijos S.A., a body corporate incorporated under the laws of Spain and her master was the Plaintiff Enrique Davila Gonzalez, a citizen of Spain.

3.              The Estai departed the Port of Vigo on October 27, 1994 with the intention of fishing in the Northwest Atlantic Fisheries Organization ("NAFO") Regulatory Area.

4.             The Estai arrived on the fishing ground in the NAFO Regulatory Area on November 2, 1994 and commenced fishing on November 3, 1994.

5.             On the following days during the voyage the Estai spent all or part of the day laying to because of bad weather: December 9, 1994, December 10, 19994, December 12, 1994, December 30, 1994, January 1, 1995, January 4, 1995, January 25, 1995, January 26, 1995, January 29, 1995, February 10, 1995, February 11, 1995, February 13, 1995, February 14, 1995.

6.              Fishing was stopped part of the day on December 24, 1994 and December 31, 1994 to celebrate Christmas Eve and New Year's Eve respectively.

7.             From February 5, 1995 to February 9, 1995 the voyage of the Estai was interrupted by the death of a crew member Celso Misa who suffered a fatal heart attack on February 5, 1995. The Estai sailed from the fishing ground to St. Pierre and back.

8.             From February 14, 1995 to February 27, 1995 the Estai was engaged in rendering assistance to the Fishing Vessel "Maria Victoria G" which has caught a net in the propellers of the "Maria Victoria G". This time included travelling to and from the "Maria Victoria G" and taking her in tow.

9.             The Estai's fishing activity throughout the voyage at issue in this case (i.e. the voyage commencing October 27, 1994) was in NAFO Regulatory Area.

10.           That between 1745 and 1755 hours U.C.T. March 9^th, 1995 a radio communication said to be from the ship "KOMMANDOR AMALIE" was received by the Defendant's ship "LEONARD J. COWLEY" and a request was made for information on the actions of the "LEONARD J. COWLEY" and intentions.

ANNEX II (cont'd)

11.           That at approximately 1400 to 1403 Newfoundland local time, a boarding craft from the Defendant's ship "CAPE ROGER" attempted a boarding of the Plaintiff's ship "ESTAI". The attempted boarding was not successful and the Defendant's ships "CAPE ROGER" and "LEONARDO J. COWLEY" were in an operation at 1424 Newfoundland local time involving pursuit of the "ESTAI".

12.           That on March 14, 1995 the Motor Vessel Zandvoort made a successful attempt to bring two trawl doors on board at position 48 ^° 13.89N, 47 ^° 30.21W. The Defendant says these trawl doors belong to the Estai and the Plaintiff denies this.

NAFO     

13.           That an International Convention entitled "Convention on Future Multilateral Cooperation in the Northwest Atlantic Fishery" was done at Ottawa on the 24^th day of October 1978; Canada deposited its instrument of ratification November 30^th, 1978 and the Convention went into force on January 1^st, 1979;

14.            That pursuant to Article II of the Convention the Contracting Parties to the Convention, including the Defendant, established an International Organization known as the Northwest Atlantic Fisheries Organization ("NAFO");

15.           That the Defendant was a signatory to the Convention and was at all material times, and continues to be, a member country of NAFO and a Contracting party to the Convention;

16.           The NAFO includes a Fisheries Commission;

17.           At the September 19 - 23, 1994, 16^th Annual Meeting, of the NAFO Fisheries Commission at Dartmouth, Nova Scotia, one of the members of the Commission (Norway) proposed a total allowable catch for Greenland Halibut in NAFO Sub Areas 2 and 3 of 27,000 tons to be applicable for the forthcoming year 1995. Pursuant to this proposal NAFO adopted a Total Allowable Catch (TAC) of 27,000 tonnes for Greenland Halibut in NAFO Sub Areas 2 and 3 for 1995.

18.           That the representative of the Defendant supported the proposal of a total allowable catch of 27,000 tons in NAFO sub Areas 2 and 3 for the year 1995.

                                      ANNEX II (cont'd)

European Union

19.           On December 31, 1994 the European Union had twelve member states: Belgium, Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, and the United Kingdom.

20.           During 1995 three other states, Austria, Finland and Sweden joined the European Union, bringing the total membership to fifteen.

21.           Spain and Portugal joined the European Union in 1986.

January 5, 1995 Briefing Note

22.           That the January 5^th, 1995 briefing note for the Minister of Fisheries and Oceans (copy attached to this agreement) received the necessary approvals and was made in the usual and ordinary course of business of the Defendant's Department of Fisheries and Oceans.                      

23.           The signatories of this briefing note were all working out of the headquarters of the Department of Fisheries and Oceans in Ottawa and their positions at the time of signing were:

·        Chris J. Allen, Senior Advisor, Foreign Fishing Policy and Programs with the Resource Allocation Branch, who prepared the note;

·        Jacques Robichaud, Director General, Resource Management, who approved the note;

·        P.S. (Pat) Chamut, Assistant Deputy Minister of Fisheries Management, who approved the note.

Other

24.           That on March 3^rd, 1995 the Defendant's Minister of Fisheries & Oceans announced that Canadian Fishermen were moving quickly to participate "for the first time ever in the turbot fishery outside the 200 mile limit.";

25.           That in an Agreed Minute of 20^th April 1995 between the European Community (European Union) and the Defendant the Defendant reaffirmed its commitment to the level of 27,000 tonnes as the total allowable catch of Greenland Halibut for 1995 in NAFO Subareas 2 and 3.

ANNEX III

(paragraph 72)

ANNEX III (Cont'd)

                                     ANNEX III (Cont'd)

                                     ANNEX III (Cont'd)

                                             ANNEX IV

(paragraph 112)

Q.             Mr. Davila, could you state your name and your occupation please, for the record. A. I am Enrique Davila Gonzalez and I am a fishing Captain at this time of the trawler Estai.

...

Q.            Okay. Does the vessel fish 24 hours a day if there's fish available? Does it fish during the night as well? A. Yes, also they will fish at night if there's fish available

Q.            What kind of lights do they have for the night hours? A. He said they have some flood lights. He's not sure if they might be 1500 to 2,000 watts which illuminate the whole deck so that the deck is illuminated over and above. Okay. Okay. That's over and above the lights which are required by law for any ship. Which is to say lights on the side, lights on the stern and on the prow. And the flood lights illuminate the deck and the area of the stern where the nets are being hauled.

...

Q.             Okay. In the log for March the 10^th he indicates that they changed course because of ice. And could he explain what the nature of the ice they encountered was and who decided to change course? A. Okay. There were ice fields at the time and the course was changed by orders of the Canadians. He said that the ice fields, you know, might have some - - there may be some difference in an ice field whether it's thicker ice or whatever. I asked him if he knew the details concerning that ice and he said they were more or less normal of what you would expect to encounter.

...

Q.            Okay. Okay. On March the 10^th as they were sailing did they encounter ice conditions that were any different than what they would normally encounter fishing at that time of year? A. He says that when they're fishing they avoid ice fields. They try to find places where they can fish where there is no ice. On this trip since they had to come into port there was no other choice but to cross some of the ice. He said they set courses to circumnavigate some of the ice, but in some cases there was no other way except to go through the ice fields. And that he told the Canadian authorities that the boat wasn't classified for ice and didn't have - - was not ice strengthened because they don't normally navigate in ice.

...

Q.            Okay. From the point where the Estai was arrested from his knowledge as a seaman, was it possible to get from there to St. John's without encountering ice? A. He says he doesn't know that. That - - it's like asking if it's going to snow tomorrow. He can't say. Because ice fields move from one day to the other. At one moment you may have an ice field here, maybe four hours later there's no ice field here but it's a little bit further over.

Q.            Okay. Does he have any criticism of the manner in which the Canadians directed the navigation of the vessel into St. John's? A. He said the first criticism is that they're telling me to go where I don't want to go. Other than that, I don't know.

...

...And from that point on [on March 12] he was asked to navigate maintaining that distance of 12 miles parallel to the coast. I asked him why they would navigate 12 miles from the    - - at 12 miles from the coast or parallel to the coast and he said he doesn't know. But that he imagines that probably it's because that area was free of ice. That the people who were telling him what course to set he thinks they also had information from planes that were flying over and could tell them where there were or weren't ice fields.

...

Okay. Did any of the Canadian vessels that were accompanying the Estai clear a path through the ice? A. He said that one and sometimes two of the Canadian boats would go ahead and open a path through the ice when they had to cross ice fields. That of course if they were a bit further behind then the ice might close in again, but that generally speaking they were a bit more at ease because it's not the same as having to force your own way through the ice.

NOTE: In the second to last quotation above, the context discloses that the reference to "12 miles parallel to the coast" is to the East Coast of the Avalon Peninsula of Newfoundland with the navigational course being northwards along that coast.

ANNEX V

(paragraph 17)

INDEX OF HEADINGS AND SUB-HEADINGS

Page

INTRODUCTION.......................................................................... 1

THE STATEMENT OF CLAIM................................................... 7

THE STATEMENT OF DEFENCE............................................ 11

THE STATEMENT OF AGREED FACTS................................ 11

BACKGROUND.......................................................................... 12

1) The Northwest Atlantic Fisheries Organization............. 12

2) The United Nations Convention on the Law of the Sea, 1982        16

3) The Coastal Fisheries Protection Act and Relevant Regulations 18

4) Some further background and precipitating events from

June, 1994 to and including February, 1995............... 31

5) The Estai and its campaigns in the NAFO Regulatory Area          47

THE ESCORTED VOYAGE OF THE ESTAI FROM THE POINT OF ARREST

ON THE 9^TH OF MARCH, 1995 TO ST. JOHN'S.................... 54

THE SOJOURN OF THE ESTAI IN ST. JOHN'S AND THE VOYAGE

FROM ST. JOHN'S TO VIGO, SPAIN..................................... 71

THE SOJOURN OF THE ESTAI IN VIGO, SPAIN IN THE SPRING OF 1995             80

SOME AFTERMATH................................................................. 83

THE ISSUES................................................................................. 89

ANALYSIS

1) The Vires of the Alleged Authority for the Pursuit,

Boarding and Arrest of the Estai in International Waters

on the 9^th of March, 1995............................................. 90

a)    The Legislative and Regulatory Scheme.............. 90

b)    The Notice of Constitutional Question . . .. . . ..... 95

c)    The Plaintiffs' Position........................................... 95

d)    The Defendant's Position...................................... 96

e)     The Position of the Court...................................... 96

2) Reckless Conduct in the Pursuit of the Estai and the

Use of Excessive Force.............................................. 101

a)    The Positions of the Parties................................. 101

b)    The Position of the Court..................................... 102

3) Damages......................................................................... 105

a)     Special Damages................................................. 106

(i)     Ice Damage.......................................... 106

(ii) The Sojourn of the Estai in St. John's and Legal Expenses           109

(iii) Lost Fishing Time, the Estai and Captain Davila 110

(iv) Extra Bunkers and Lubrication........... 112

(v)    "Missing Fish"..................................... 114

(vi) Transportation Cost for Moving the Off-Loaded Frozen

   Fish from St. John's to Vigo, Spain..... 115

b)     General, Punitive and Aggravated Damages.... 116

(i)    General Damages.............................. 116

(ii) Punitive and Aggravated Damages.. 118

4) Interest........................................................................... 120

CONCLUSION........................................................................... 120

COSTS........................................................................................ 121

                                     FEDERAL COURT

             Names of Counsel and Solicitors of Record

DOCKET:                  T-1602-95

STYLE OF CAUSE:                  JOSÉ PEREIRA E. HIJOS, S.A.

and ENRIQUE DAVILA GONZALEZ

                                                                                                Plaintiffs

- and -

THE ATTORNEY GENERAL OF CANADA

                                                                                             Defendant

PLACE OF HEARING:                                 ST. JOHN'S, NEWFOUNDLAND AND LABRADOR

DATES OF HEARING:                                 JANUARY 10 TO 14, 17 TO 20, 27, 28, and 31

                                   and FEBRUARY 2 TO 4, 16, 17 and 18, 2005

REASONS FOR

JUDGMENT BY:     GIBSON, J.

DATED:                     JULY 26, 2005

APPEARANCES BY:                                     John R. Sinnott, Q.C. and

Andrew Fitzgerald

For the Plaintiffs

Michael F. Donovan and

M. Kathleen McManus

For the Defendant

SOLICITORS OF RECORD:                      

Lewis, Sinnott, Shortall, Hurley                                     

Barristers, Solicitors, Notaries

St. John's, NL                                                  

John H. Sims, Q.C.                                          

Deputy Attorney General of Canada                                  

FEDERAL COURT

                                                                               Date: 20050712

Docket: T-1602-95

BETWEEN:

JOSÉPEREIRA E. HIJOS, S.A. and

ENRIQUE DAVILA GONZALEZ

                                            Plaintiffs

- and -

THE ATTORNEY GENERAL OF CANADA

                                        Defendant

REASONS FOR JUDGMENT

AND JUDGMENT