Lloyd's Maritime and Commercial Law Quarterly
SOME ADMIRALTY LAW ISSUES IN CANADIAN OFFSHORE OIL AND GAS DEVELOPMENT
W. Wylie Spicer *.
“One might possibly take the position of the gentlemen who dealt with the elephant by saying he could not define an elephant, but he knew what it was when he saw one; and it may be that that is the foundation of the learned judge’s judgement, that he cannot define ‘ship or vessel’ but he knows this thing is not a ship or vessel”.1
An object that floats is not necessarily a “ship”.2 However, much of Admiralty Law is applicable only to floating objects which are ships. Offshore drilling units are not what the draftsmen had in mind when statutory definitions of ships and vessels were fashioned. Indeed, offshore drilling units did not even exist at the time—but floating cranes, gas buoys, dumb barges and many other floating objects which inhabit the hinterlands of Admiralty were about and fortunately they were involved in collisions, rendered and were subject to salvage services, tried to limit their liability for losses caused by them and were even considerate enough to let their problems go to trial.
As a result of this history we are in a position to render a moderately considered view as to whether the latest inhabitant of the fringes of Admiralty can be called a “ship”. If an oil rig is a ship there are many important consequences which follow such definition—this paper places oil rigs within the framework of Admiralty Law.
The first part of the paper reviews some of the cases on ships, and concludes that with the possible exception of jack-ups, offshore rigs are ships. I then discuss a number of consequences—the nature of claims in rem, actions for damage caused by a ship (specifically collisions and blow-outs), statutory limitation of liability, statutory civil liability for oil pollution under the Canada Shipping Act3 and the proposed amendments to the Oil and Gas Production and Conservation Act,4 conveyancing and mortgaging, and a number of miscellaneous matters concerning Customs, Immigration, and the Coasting trade.
* Mclnnes, Cooper & Robertson, Halifax, Nova Scotia, Canada, and Lecturer in Admiralty Law, Dalhousie Law School, Halifax. This paper was presented to the 1981 Meeting of the Canadian Petroleum Law Foundation and appears in the Alberta Law Review, Petroleum Law Supplement (1981).
1 Per Scrutton, L.J., in Merchants’ Marine Insurance Co. Ltd. v. North of England Protecting & Indemnity Association (C.A.) (1926) 26 LI.L.Rep. 201, at p. 203.
2 See, for instance, Dr Lushington in A Raft of Timber (1844), 2 W. Rob 251. “This is neither a ship nor sea-going vessel; it is simply a raft of timber”.
3 R.S.C. 1970, c. S-9.
4 Contained in Bill C-48, an Act to regulate oil and gas interests in Canada lands and to amend the Oil and Gas Production and Conservation Act.
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