2022 FC, 2022 FC 1310

Date: 20220921 Dockets: T-1094-21 T-1104-21 Citation: 2022 FC 1310 Ottawa, Ontario, September 21, 2022 PRESENT: The Honourable Madam Justice Strickland Docket: T-1094-21 BETWEEN: HER MAJESTY THE QUEEN IN RIGHT OF CANADA Appellant and THE ADMINISTRATOR OF THE SHIP-SOURCE OIL POLLUTION FUND Respondent Docket: T-1104-21 AND BETWEEN: HER MAJESTY THE QUEEN IN RIGHT OF CANADA Applicant and THE ADMINISTRATOR OF THE SHIP-SOURCE OIL POLLUTION FUND Respondent JUDGMENT AND REASONS Overview [ 1 ] These proceeding involve statutory appeals brought pursuant to s 106(2) of the Marine Liability Act , SC 2001 c 6 [ MLA ] and, applications for judicial review, all arising from two decisions of the Administrator [Administrator] of the Ship-source Oil Pollution Fund [SOPF] disallowing claims made by the Canadian Coast Guard [CCG].

The CCG claims were made pursuant to s 103(1) of the MLA and sought compensation for costs and expenses incurred by the CCG to prevent anticipated oil pollution damage from incidents involving two vessels: the Miss Terri and the Stelie II . The Administrator found that the claims were made outside of the limitation period established by s 103(2)(

a) of the MLA and disallowed them. [ 2 ] The Applicant/Appellant [Canada] brought two appeals, one in respect of each vessel, pursuant to s 106(2) of the MLA , and also two applications for judicial review, one in respect of each vessel, challenging the Administrator’s decisions. By orders of Prothonotary Aalto, dated July 16, 2021, both appeals were consolidated as Court File No. T-1094-21 and both applications for judicial review were consolidated as file Court File No. T-1104-21. It was also ordered that that Court Files Nos. T-1094-21 and T-1104-21 would be heard together.

Factual Background Miss Terri [ 3 ] According to the claim submission of the CCG to the Administrator, on February 23, 2018, the Harbour Master for Discovery Harbour, at Campbell River, British Columbia, reported to the CCG that the Miss Terri ’s bilge pump was operating continuously due to an ingress of water. The Harbour Master, assisted by the CCG, installed additional bilge pumps to keep the vessel afloat. Initial efforts to contact the vessel owner were not successful and the Harbour Master continued to maintain a watch on the vessel.

The bilge pumps were reported as pumping water for 30 minutes a day, twice a day. When the vessel owner was contacted, he was informed that he was responsible for mitigating the risk of a discharge of oil pollution and that he must submit a plan for doing so. The owner did not provide any mitigation plan. [ 4 ] On September 11, 2018, a CCG Environmental Response [CCG ER] crew were at the Discovery Harbour marina responding to another incident. They observed the bilge pumps of the Miss Terri running 30 minutes of every hour. The vessel owner was advised of the situation but did not respond.

On September 18, 2018, the Harbour Master reported that the bilge pumps were continuously pumping water and he could not continue to monitor the vessel and maintain the pumps. Due to the imminent threat of the Miss Terri sinking and polluting the marine environment, the CCG ER retained Saltair Marine [Saltair] which towed the Miss Terri to a facility at Ladysmith, British Columbia on September 19, 2018. The CCG ER also retained a marine surveyor, Building Sea Marine, to attend on the vessel. [ 5 ] Further efforts to have the vessel owner take measures to mitigate the threat of marine pollution were unsuccessful.

On November 1, 2018, Saltair reported to the CCG that the Miss Terri required constant pumping to keep it afloat. On November 6, 2018, the CCG instructed Saltair to remove the Miss Terri from the marine environment. On removal, the vessel was found to have significant hull damage below the waterline. The Miss Terri was deconstructed by Saltair between November 29, 2018 and December 14, 2018 at the CCG’s expense. The CCG made a claim to the Administrator, by letter dated August 27, 2020, in the amount of $88,576.24. The

submission’s supporting materials included invoices from Saltair and a survey report entitled " “‘Miss Terri’ Survey for Condition & Salvage Value” " prepared by Building Sea Marine [ Miss Terri Survey Report]. [ 6 ] By letter dated February 23, 2020, the Administrator wrote to the CCG informing it that the subject matter of the claim involved a novel issue of mixed fact and law. The Administrator stated that although the materials submitted by the CCG " “do not directly document the discharge of oil from the vessel…a careful review of the evidence suggests that a discharge did occur.

As a result of that probable determination, the claim was likely submitted to the Administrator after the applicable prescription date and should therefore be rejected” " . The Administrator attached a 24-page draft decision and invited the CCG to provide any submissions or feedback on the expected determination that the Miss Terri had discharged oil, as well as how the limitation period ought to be applied on the facts.

By letter dated March 30, 2021, the CCG provided submissions in response to the Administrator’s draft reasons. [ 7 ] The Administrator issued a " “Letter of Disallowance” " on May 17, 2021 with respect to the CCG’s Miss Terri claim. This is one of the decisions that is the subject of an appeal and an application for judicial review now before me.

Stelie II [ 8 ] According to the claim submission of the CCG to the Administrator, on March 23, 2016, Transport Canada [TC] was informed by the Royal Canadian Mounted Police [RCMP] that the Stelie II had broken free of its mooring at Northern Boat Repair Ltd.’s [NBR] facility in Port Saunders, Newfoundland and Labrador, during high winds and was starting to sink in the ice. The vessel was resting against an adjacent dock causing damage and a concern had also been raised about pollutants on board.

TC contacted the CCG ER to inform it of the pollution potential. [ 9 ] The CCG ER personnel attended on the vessel on March 25, 2016. The vessel was found with no mooring lines and a substantial starboard list. The CCG narrative reported that upon entry, a strong odour of diesel fuel was noted. The engine room was three-quarters full of water, and pollutants consisting of lube oil, hydraulic oil, diesel oil and debris were described as scattered everywhere.

There were open trays with oil, buckets of oil, paint cans, fire extinguishers on deck, flares scattered about and other pollutants were reported as clearly visible even though the vessel had no lights or power. The CCG ER determined that the vessel posed an immediate potential pollution threat and the best immediate course of action would be to pump the ingress water out of the vessel. The CCG ER commenced dewatering the vessel on March 25, 2016.

This was completed on March 26, 2016 at which time the vessel was lifted out of the water and stored at the CCG’s expense. [ 10 ] Various efforts to have the vessel owner take measures to mitigate the threat of marine pollution and assume financial and other responsibility for the vessel were unsuccessful. [ 11 ] On March 29, 2016, and April 7, 2016, the CCG corresponded with the Administrator, alerting it to the situation.

On March 8, 2018, at the request of the CCG, the Administrator wrote to the CCG advising, based on the CCG’s representations that the Stelie II was not the source of a discharge of pollutants and the actions taken by the CCG were taken in regard to a threat of pollution, that the applicable limitation period before which the CCG could bring a claim to SOPF was five years from the date of the occurrence, represented as being March 24, 2016.

Accordingly, the CCG’s claim would be admissible until March 25, 2021. [ 12 ] The CCG sent an " “interim” " submission to the Administrator on April 30, 2018, to be held in abeyance until such time as the response operations had been resolved. By email of July 5, 2018, the Administrator advised the CCG that the interim claim had not suspended or otherwise affected the limitation period. By reply email, counsel for the CCG confirmed that they shared this understanding. [ 13 ] The Stelie II remained in storage for some time, in part due to an ownership dispute.

The CCG retained TriNav Marine Design Inc. [TriNav] to conduct a vessel survey. TriNav completed its assessment of the vessel on August 18, 2016 and prepared a report entitled " “‘Stelie II’ Vessel Survey” " dated September 23, 2016 [ Stelie II Survey Report]. On October 26, 2016, the CCG ER hired vacuum trucks from Pardy’s Waste Management and Industrial Service Limited [Pardy’s] to remove pollutants on board the Stelie II . On February 14, 2018, the CCG deemed the vessel to be an unacceptable risk and that its deconstruction was the only feasible option to prevent future oil pollution to the marine environment.

The Stelie II was deconstructed in August 2019 at the CCG’s expense. The CCG made a claim to the Administrator in respect of its costs and expenses incurred with respect to the Stelie II in the amount of $114,897.43 on October 7, 2020. [ 14 ] By email dated February 26, 2021, counsel for the Administrator wrote to counsel for the CCG, advising that the Administrator had concerns about the CCG’s submission that the Administrator wished to bring to the CCG’s attention and, that the concerns resulted in an invitation to submit supplementary documentation.

The email states that " “it appears to the Administrator that the STELIE II probably did in fact cause a discharge of oils at some point in late March of 2016” " . Counsel for the Administrator stated that while the evidence did not expressly record any such discharge, one might be reasonably inferred because the CCG’s narrative reported that the Stelie II was listing severely with open trays and buckets of oil on its deck. This list may have caused some quantity of these oils to enter the water.

Further, the CCG’s documentation offered no explanation as to what was done with the presumably large volume of oily water pumped from the Stelie II on March 25 and 26, 2016. Without any evidence showing that this contaminated water was isolated and disposed of through appropriate waste streams, it appeared likely that some or all of it ended up in the waters of the harbour. This discharge would probably have resulted in oil pollution damage, which would engage the two-year limitation period. This period would have expired in late March 2018. As a result, the claim might not be eligible for compensation.

Counsel for the Administrator invited the CCG to present all relevant documentation in its possession, as well as any comment it may have, by March 31, 2021. [ 15 ] Counsel for the CCG provided a response submission by email dated March 31, 2021. [ 16 ] The Administrator issued a " “Letter of Disallowance” " dated May 26, 2021 with respect to the CCG’s Stelie II claim. This is one of the decisions that is the subject of an appeal and application for judicial review now before me.

Relevant Legislation Marine Liability Act , SC 2001 c 6 * (*version in force from 2015-06-08 to 2018-12-12, the time period relevant to these matters) 103

(1) In addition to any right against the Ship-source Oil Pollution Fund under

section 101, a person who has suffered loss or damage or incurred costs or expenses referred to in

section 51, 71 or 77,

Article III of the Civil Liability Convention or

Article 3 of the Bunkers Convention in respect of actual or anticipated oil pollution damage may file a claim with the Administrator for the loss, damage, costs or expenses. 103

(2) Unless the Admiralty Court fixes a shorter period under paragraph 111(a), a claim must be made (

a) within two years after the day on which the oil pollution damage occurs and five years after the occurrence that causes that damage; or (

b) if no oil pollution damage occurs, within five years after the occurrence in respect of which oil pollution damage is anticipated. 105

(1) On receipt of a claim under

section 103, the Administrator shall (

a) investigate and assess it; and (

b) make an offer of compensation to the claimant for whatever portion of it that the Administrator finds to be established. … 105

(3) When investigating and assessing a claim, the Administrator may consider only (

a) whether it is for loss, damage, costs or expenses referred to in subsection 103(1); and (

b) whether it resulted wholly or partially from (

i) an act done or omitted to be done by the claimant with intent to cause damage, or (ii) the claimant’s negligence. 106

(2) A claimant may, within 60 days after receiving an offer of compensation or a notification that the Administrator has disallowed the claim, appeal the adequacy of the offer or the disallowance of the claim to the Admiralty Court, but in an appeal from the disallowance of a claim, that Court may consider only the matters described in paragraphs 105(3)(

a) and (b). Canada Shipping Act , SC 2001, c 26 [ CSA ] 180

(1) If the Minister of Fisheries and Oceans believes on reasonable grounds that a vessel or an oil handling facility has discharged, is discharging or may discharge a pollutant, he or she may (

a) take the measures that he or she considers necessary to repair, remedy, minimize or prevent pollution damage from the vessel or oil handling facility, including, in the case of a vessel, by removing — or by selling, dismantling, destroying or otherwise disposing of — the vessel or its contents; (

b) monitor the measures taken by any person or vessel to repair, remedy, minimize or prevent pollution damage from the vessel or oil handling facility; or (

c) if he or she considers it necessary to do so, direct any person or vessel to take measures referred to in paragraph (

a) or to refrain from doing so. [ 17 ] Unless otherwise specified, all references to the MLA in these reasons are to the version that was in force at the time of the Miss Terri and Stelie II incidents, as set out above. Decisions Under Review The Miss Terri [ 18 ] In the May 17, 2021 Letter of Disallowance, the Administrator determined that the limitation period under s 103(2)(

a) of the MLA applied and had expired prior to the submission of the CCG’s claim. Therefore, the submission was not admissible under s 103(1) of the MLA . [ 19 ] After reviewing the narrative of the incident as submitted by the CCG, the Administrator stated that in determining which limitation period applied, it was important to first determine if there was a discharge of oil from the vessel. The Administrator noted the absence of an " “explicit observation” " of oil in the water originating from the vessel. However, this did not mean that no discharge occurred.

There was indirect evidence of a discharge, or more likely multiple discharges, occurring prior to September 4, 2018. The Administrator stated it was more probable than not that rain water would have regularly entered the vessel, become contaminated with oil, and then been

pumped overboard. [ 20 ] The Administrator stated that the layout of the vessel and its physical condition provided important evidence. The Miss Terri Survey Report found that most of the paying compound was missing, many of the (deck) planks had gone soft or were rotted entirely and that rain water could have penetrated most of the areas of the deck that were exposed to the elements.

The Administrator found that that the surveyor’s observations and conclusions with respect to the deck were likely correct and, on a balance of probabilities, that rain would have penetrated the deck and entered the below-deck spaces throughout the vessel, including the forward spaces. [ 21 ] Further, the Miss Terri Survey Report also noted that the vessel’s machinery space and forecastle bilges were " “moderately fouled with oil” " and photographs from that report showed oily bilges in the main engine, forecastle and stern gland areas of the vessel.

Based on this, as well as photographs from Saltair, the Administrator stated that it was accepted that both the machinery space and the forecastle space were contaminated with oil such that water coming into contact with those spaces would be contaminated with oil.

The Administrator noted that there was no evidence that the oily state of the vessel had changed between February 23, 2018 (when the CCG had first installed additional bilge pumps) and when it was inspected by Building Sea Marine (on September 18, 2018). [ 22 ] Although there was no direct evidence as to what happened to the vessel between those dates, the Administrator had already determined that it was more likely than not that when rain fell on the vessel, the rain water penetrated the deck, became contaminated with oil and was then discharged from the aft pumps.

Further, that it was " “accepted” " that between February 23 and September 3, 2018 there had been significant and multiple rainfalls. The Administrator received the CCG’s submission on September 4, 2020 but concluded that the discharges of oil occurred prior to September 4, 2018. [ 23 ] As the claim was not submitted within two years of those discharges, the Administrator stated that the shortest of the limitation periods under s 103(2) might apply and that an examination of whether the claim could be admitted under s 103(1) was required. The Administrator then embarked on a lengthy exercise of statutory

interpretation of s 103(2)(

a) and concluded that the provision imposes a limitation period of two years after the oil pollution damage occurs as a result of an initiating incident. It further concluded that all claims stemming from the same facts, and all claimants were therefore subject to the same limitation period. [ 24 ] The Administrator stated that the final determination to be made was whether the discharges that occurred caused " “oil pollution damage” " as defined in s 91(1) of the MLA and, based on its prior findings of fact, concluded that the discharges prior to September 4, 2018 likely caused oil pollution damage. As a result, the s 103(2)(

a) limitation period expired prior to September 4, 2020 and the CCG’s claim was inadmissible under s 103(1). [ 25 ] The Administrator then reviewed the response received from the CCG to the Administrator’s February 23, 2021 correspondence providing its draft decision. The Administrator understood the CCG to make two primary points. First, that the CCG handled the incident in accordance with threat assessment criteria in accordance with the CSA and there was no evidence that a discharge occurred.

The Administrator stated that the CCG’s use of the CSA threat assessment was understandable but the Administrator did not agree that those criteria had any bearing on when the limitation period began to run. As such, the CCG’s response did not alter the Administrator’s factual determinations in that regard. Second, the CCG submitted that it was problematic for a claimant not to know when the limitation period begins to run. To this the Administrator agreed that under its

interpretation, a claimant might lose the right to claim as a result of not being aware of when the limitation period began to run and a claim might even be barred before a claimant suffers damage. However, in the Administrator’s view, an alternative

interpretation of s 103(2) allowing consideration of a claimant’s knowledge and subjective beliefs in determining when the limitation period begins to runs was not available. The relevant limitation period is focused on events affecting the subject ship, rather than a claimant’s role in those events. The Administrator concluded that its factual determinations and determinations of mixed fact and law did not change in light of the CCG’s response. The Stelie II [ 26 ] In the May 26, 2021 Letter of Disallowance concerning the Stelie II , the Administrator determined that that the limitation period under s 103(2)(

a) of the MLA applied and had expired prior to the submission of the CCG’s claim. Therefore, the claim was not admissible under s 103(1) of the MLA . [ 27 ] In support of that determination, the Administrator set out the exchanges between it and the CCG prior to its claim submission on October 8, 2020, including photographs provided by the CCG. The Administrator also noted the Stelie II Survey Report, which had been included with the CCG’s claim submission, finding that certain passages of that report were relevant to the determinations of the Administrator.

In particular, references to the presence of oily water in various spaces on board the vessel. The Administrator also noted that the CCG notes submitted with its claim indicated that a pumper truck had been on standby for March 25, 2016. [ 28 ] The Administrator then described its February 26, 2021 letter to the CCG outlining the Administrator’s concerns with the CCG’s claim and the CCG’s March 31, 2021 response.

The Administrator described its investigation into whether a discharge had occurred, which was comprised of calls to the RCMP, who advised that none of its personnel were on scene, to the proprietor of the NBR facility who did not recall whether oil was visible in the harbour or on the ice around the Stelie II and, to Pardy’s who neither confirmed nor denied having been on scene and refused to discuss its CCG contracts without authorization to do so. [ 29 ] According to the Administrator, whether the claim was submitted within the limitation period was an issue that required significant factual and legal determinations.

The Administrator noted that there was some ambiguity in s 103(2)(

a) of the MLA , but that it would first address whether the incident resulted in a " “discharge” " of oil, because " “oil pollution damage” " as defined in the MLA cannot occur without a discharge of some volume of oil. [ 30 ] The Administrator determined that it was probable that a discharge of oil occurred as a result of the incident and the response to the incident. The Administrator first found that it was likely that some oil from the open containers on the vessel’s deck had escaped into the water.

The Stelie II had begun to list on March 23 or March 24, 2016, and continued to do so until the pumping operation on March 25, 2016. Photographs on the record showed nothing in the vessel’s configuration that would have prevented oil stored in open containers on deck from escaping into the water while the vessel leaned heavily to starboard. Further, the containers themselves would have inevitably

slid and jostled as the vessel listed. Second, stormy weather, which the Administrator stated it had determined was violent enough to sever the vessel’s mooring lines, caused the vessel to drift through ice and impact the other side of the dock facility. The Administrator noted that none of the photographs depicting the vessel’s starboard side and adjacent harbour ice appeared to show signs of escaped oils, however, that the absence of visual evidence was not wholly determinative of the issue.

The Administrator stated that if a discharge had occurred, any resulting hydrocarbon staining may not be readily apparent from photographs taken from a distance and that any discharge may have been somewhat dispersed during the storm. [ 31 ] In addition to the likely discharge from the containers on deck, the Administrator pointed to the fact that there had been significant water ingress into the Stelie II ’s engine room (and other below-deck spaces) which was pumped directly from the engine room into the harbour.

Referring to the CCG narrative, the Stelie II Survey Report, and photographs showing that sorbent materials were used in deconstruction, the Administrator found that the volume of water pumped overboard would have been substantial, that the water levels would have largely submerged the vessel’s machinery, and that the water within the vessel’s engine room must have been contaminated.

While the CCG had submitted that the intake hose was placed deep within the vessel during dewatering so as not to discharge the oil which was floating on the surface of the water within the vessel, the Administrator stated that it did not have the benefit of a direct witness’s account as to what was done. Further, the CCG had claimed deconstruction costs, which are allowable if the vessel itself poses a threat of oil pollution, such as when a wooden vessel is so saturated with oil that, if submerged, its timbers would discharge oil.

That being the case, submerging a hose deep into the water inside the engine room would not necessarily be sufficient to avoid a discharge of oil.

The Administrator found that even if the oil on the surface of the water inside the Stelie II had been successfully avoided, it would not be safe to conclude that no discharge occurred. [ 32 ] The Administrator stated that, notwithstanding the CCG’s position as to a lack of observation of a discharge and the positioning of the intake hose during dewatering, given the large volume of water pumped out and the contaminated state of the Stelie II , it was determined that a discharge occurred during the pumping operation.

The oil in the open containers also had to be taken into account and this bolstered the determination that a discharge occurred during or before the CCG’s response on March 25 and 26, 2016. [ 33 ] The Administrator then referenced its

interpretation of s 103(2)(

a) in the Miss Terri matter. First noting that the appropriate reading of s 103(2)(

a) results in a limitation period of two years after the first instance of " “oil pollution damage” " that occurs as a result of an underlying incident and all claims stemming from the same facts are therefore subject to the same limitation period. Second, that the appropriate threshold for determining whether " “oil pollution damage” " as having occurred is very low. [ 34 ] The Administrator determined, on the balance of probabilities, that the discharge or discharges that that occurred between March 23 and 26, 2016, caused oil pollution damage. Therefore, the s 103(2)(

a) limitation period expired at some time between March 23 and 26, 2018. As the claim was not submitted within two years of those dates, the claim was inadmissible under s 103(1), and was disallowed. Issues [ 35 ] In my view, the issues in these matters can be appropriately framed as follows: 1 . Are challenges to the decisions of the Administrator disallowing the claims, based on the limitation periods in s 103(2) of the MLA , properly taken as applications for judicial review or, as statutory appeals under s 106(2) of the MLA ? 2 . What is the applicable standard of review? 3 . Did the Administrator commit a reviewable error in finding that the s 103(2)(

a) limitation period applied and that the CCG was out of time to file a claim pursuant to s 103(1) with respect to either or both of the Miss Terri or the Stelie II claims? Issue 1: Are these matters properly heard as applications for judicial review or as statutory appeals pursuant to s 106(2) of the MLA ? [ 36 ] Given the uncertainty as to the appropriate procedure, and erring on the side of caution, Canada filed both applications for judicial review (one in respect of each vessel), and appeals (one in respect of each vessel).

The parties submit that direction from the Court is required to determine whether Canada’s challenges to the decisions of the Administrator – and future challenges to decisions disallowing claims based on the limitation periods – should proceed as applications for judicial review or as appeals. [ 37 ] I agree with the parties that this issue requires resolution as, on an immediate basis, it impacts the standard(

s) of review applicable to the substantive issue of whether the Administrator erred in finding that the CCG’s claims were not made within the applicable limitation period. I also agree with Canada that resolving this issue now may prevent future claimants from missing the 30-day filing timeframe for judicial review on the belief that the 60 day timeframe for a statutory appeal applies. Canada’s position [ 38 ] Canada submits that many statutes provide for both appeal and judicial review mechanisms in different contexts, indicating two roles for reviewing courts.

Further, it is notable that statutory appeal mechanisms are often circumscribed, limiting the types of questions on which a party may appeal, and that the existence of such a circumscribed right of appeal does not preclude judicial review of those aspects of such decisions to which the appeal mechanism does not apply. On review of such questions to which the statutory appeal does not apply, the presumptive standard of review of reasonableness applies (citing Canada (Minister of Citizenship and Immigration) v Vavilov , 2019 SCC 65 at para 52 [ Vavilov ] ).

[39] Canada submits that on a plain reading the appeal mechanism in s 106(2) of the MLA allows the Court to consider "“only”" thematters listed in s 105(3), which do not include consideration of a challenge to the Administrator’s determination on a time limitation.Canada submits that it therefore appears that such a challenge would properly proceed as a judicial review on the reasonablenessstandard. The Administrator’s position [40] The Administrator submits that s 106(2) of the MLA is ambiguous and therefore requires statutory

interpretation. [41] The Administrator states that on a "“strictly literal

interpretation”" of s 106(2), an appeal can be taken following either an offer ofcompensation or the disallowance of a claim. However, that the right of appeal under s 106(2) is not restricted – only the issues the Courtcan consider are restricted. That is, the right of appeal appears to be broader than the scope of review during an appeal. TheAdministrator submits that this is potentially problematic as, in the normal course, the right to judicial review arises only when a partyhas exhausted all other avenues of review.

Under s 106(2), the right of statutory appeal covers all conceivable issues arising with respectto a disallowance but, ultimately, given the restricted scope of review, the Court may lack jurisdiction to afford the remedy sought. Thus,the only recourse is judicial review, which must be commenced within 30 days, as opposed to the 60-day period for filing an appeal.

TheAdministrator submits that these deadlines mean that claimants erring on the side of caution would need to pre-empt the possible failureof an as-yet unfiled appeal by filing a judicial review application within 30 days – but doing so would, as noted above, be technicallypremature. [42] The Administrator submits that an

interpretation which would allow issues for which no remedy appears to be available by way of s106(2) (i.e. those issues that required consideration of matters outside the s 105(3) factors) to proceed immediately to judicial review isalso problematic as the same fact set could lead to dismissal for two different reasons – one of which might be covered by the right ofappeal and the other by judicial review.

This, in turn, could lead to two different proceedings reviewing the administrative decision, andpotentially the same facts, on different standards of review. [43] The Administrator submits that a purposive reading of ss 103 to 106 of the MLA can avoid this uncertainty in the application of s106(2). This would entail reading the reference in s 105(3) to "“loss, damage, costs or expenses referred to in subsection 103(1)”" as alsoincluding the limitation periods in s 103(2) on the basis that s 103(2) is intrinsically linked to s 103(1) in that it specifies when "“loss,damage, costs or expenses”" may be claimed.

In turn, this would avoid any uncertainty concerning s 106(2). [44] The Administrator also suggests that there is some historic support for its proposed

interpretation. This is because before the MLAcame into force, the SOPF was governed by the CSA. Subsection 710(1) of the version of the CSA then in effect was analogous to MLAsections 103(1) and (2). In the CSA, the predecessor of ss 103 and 105 were built into a single section. Thus, the restriction on theAdministrator’s authority when investigating and assessing a claim did not give rise to difficulty in the context of a limitation periodbecause the claims provision which it pointed to, s 710(1), included the limitation periods.

In turn, the appeal provision, s 711(2),therefore also permitted an appeal of claims dismissed due to missed limitation periods. The Administrator submits that a review ofHansard does not indicate that there was an intention by Parliament to change how the former s 710 was to function when it wasremoved from the CSA to the MLA and suggests that this change, that is, the removal of the limitation period provisions from the claimsprovision, may have been inadvertent. [45] The Administrator submits that "“[a]n

interpretation that treats subsection 103(2) as modifying 103(1), such that it comes within thejurisdictional provision [s 105(3)] and therefore the appeal provision [s 106], therefore has considerable merit”". Analysis [46] The principles of statutory

interpretation that have application in this matter are well established by the jurisprudence of theSupreme Court of Canada. When interpreting a statute, "“the words of

an Act are to be read in their entire context and in theirgrammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament”" (Rizzo& Rizzo Shoes Ltd. (Re), [1998] 1 SCR 27 at para 21, (SCC), referencing Elmer Driedger in Construction of Statutes,2nd ed (Toronto: Butterworths, 1983) 87; Bell ExpressVu Limited Partnership v Rex, 2002 SCC 42 at para 26 [Bell ExpressVu]). [47] This was subsequently restated and elaborated upon in Trustco v Canada, [2005 SCC 54 [Trustco]: 10 It has been long established as a matter of statutory

interpretation that “the words of

an Act are to be read in their entirecontext and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and theintention of Parliament”: see 65302 British Columbia Ltd. v. Canada, (SCC), [1999] 3 S.C.R. 804, at para.50. The

interpretation of a statutory provision must be made according to a textual, contextual and purposive analysis to finda meaning that is harmonious with the Act as a whole. When the words of a provision are precise and unequivocal, theordinary meaning of the words play a dominant role in the interpretive process. On the other hand, where the words cansupport more than one reasonable meaning, the ordinary meaning of the words plays a lesser role. The relative effects ofordinary meaning, context and purpose on the interpretive process may vary, but in all cases the court must seek to read theprovisions of

an Act as a harmonious whole. [48] Further, any ambiguity must be "“real”", that is, the words of the provision must be reasonably capable of more than one meaning.However, the entire context of a provision must also be considered before it can determined if it is reasonably capable of multipleinterpretations.

"“It is only when genuine ambiguity arises between two or more plausible readings, each equally in accordance with theintentions of the statute, that the courts need to resort to external interpretive aids”" (Bell ExpressVu at para 29 citing Canadian OxyChemicals Ltd v Canada (Attorney General), (SCC), [1999] 1 SCR 743 at para 14, 171 DLR (4th) 733, emphasisadded in Bell ExpressVu). In every case, the Court must undertake a contextual and purposeful approach and then determine if there isambiguity (Bell ExpressVu at para 30).

The Court should therefore "“suspend judgment on the precise scope”" of the words at issue untilthe words can be "“weighed in the light of successive circles of context”" (Bristol-Myers Squibb Co v Canada (Attorney General), 2005

SCC 26 at paras 43-44). [49] In this matter, s 106(2) of the MLA provides that a claimant may appeal the adequacy of a settlement offer or the disallowance of aclaim but, in an appeal from the disallowance of a claim, the Court "“may consider only the matters described in paragraphs 105(3)(a)and (b)”". [50]

Section 105 concerns the Administrator’s duties when a claim for compensation is received under s 103(1). Under s 105(1) theAdministrator must do two things: investigate and assess the claim; and make an offer of compensation to the claimant for whateverportion of the claim the Administrator finds to be established. The Administrator is explicitly limited by s 105(3) in what factors ormatters it may consider when doing so:

(3) When investigating and assessing a claim, the Administrator may consider only (a")" whether it is for loss, damage, costs or expenses referred to in subsection 103(1); and (

b) whether it resulted wholly or partially from (

i) an act done or omitted to be done by the claimant with intent to cause damage, or (ii) the claimant’s negligence. [51] I first admit to some initial doubt as to whether all of the potential procedural uncertainties raised by the Administrator serve tomake s 106(2) as ambiguous as the Administrator asserts.

However, concern as to the operation of s 106(2) is demonstrated by the veryfact that Canada in these matters filed both appeals and applications for judicial review to err on the side of caution. [52] I also agree with Canada that on a plain reading of s 106(2), it is clear that on appeal the Court can only consider the two mattersspecified in s 105(3) – and that these do not include limitation periods – which are found in s 103(2). On its face, and read in isolation,this would suggest that these proceedings should be heard as applications for judicial review.

However, this is not necessarily sufficientto dispose of the matter, as demonstrated by the Supreme Court of Canada’s decision in McLean v British Columbia (SecuritiesCommission), 2013 SCC 67: [42] Beginning with the ordinary meaning of “the events”, on the surface it would appear that “the even[t]” giving rise to aproceeding under s. 161(6)(

d) is the fact of “ha[ving] agreed with a securities regulatory authority” to be subject toregulatory action. By ordinary meaning, I refer simply to the “natural meaning which appears when the provision is simplyread through” (Canadian Pacific Air Lines Ltd. v. Canadian Air Line Pilots Assn., (SCC), [1993] 3 S.C.R.724, at p. 735). The ordinary meaning would thus appear to support the Commission’s

interpretation. [43] However, satisfying oneself as to the ordinary meaning of the phrase “is not determinative and does not constitute theend of the inquiry” (ATCO Gas and Pipelines Ltd. v. Alberta (Energy and Utilities Board), 2006 SCC 4, [2006] 1 S.C.R.140, at para. 48). Although it is presumed that the ordinary meaning is the one intended by the legislature, courts are obligedto look at other indicators of legislative meaning as part of their work of

interpretation. That is so because [w]ords thatappear clear and unambiguous may in fact prove to be ambiguous once placed in their context. The possibility of the contextrevealing a latent ambiguity such as this is a logical result of the modern approach to

interpretation. (Montréal (City) v. 2952-1366 Québec Inc., 2005 SCC 62, [2005] 3 S.C.R. 141, at para. 10) [44] That possibility is realized here. Though the ordinary meaning seems apparent enough, digging deeper into the contextand purpose of the provision casts some doubt on that conclusion — and introduces the possibility of another reasonableinterpretation. [53] Ultimately, I am persuaded that s 106(2), viewed in the context of related provisions in s 105(3) and 103(1) and (2), gives rise tolatent ambiguity. That is, the "“matters”" referred to in s 106(2) are explicitly only those described in s 105(3)(

a) and (b). Paragraph105(3)(

a) concerns whether a claim is "“for loss, damage, costs or expenses referred to in subsection 103(1)”". The ambiguity pertains towhether s 103(2), which contains the limitation periods applicable to claims made under in s 103(1), is integral to, or included within ormodifies the reference to "“loss, damage, costs or expenses in subsection 103(1)”" and is to be assessed as an aspect of a s 103 claim. [54] In terms of context, as the Administrator describes in its written submissions, s 103(1) allows claimants who have suffered loss ordamage or incurred costs or expenses referred to in s 51, 71 or 77 of the MLA,

Article III of the Civil Liability Convention or

Article 3 ofthe Bunkers Convention in respect of actual or anticipated oil pollution damage, to file a claim directly with the Administrator.Subsection 105(1) requires the Administrator, upon receipt of such a claim, to investigate and assess it and, make an offer ofcompensation for whatever portion is determined to be established. If the offer is accepted, the Administrator becomes subrogated to anyrights of the claimant to the extent of the compensation payment (s 106(3)(c)).

The Administrator is also obliged to take all reasonablemeasures to recover the amount of the compensation payment from the polluting ship owner or others who are liable (s 106(3)(d)).

Thisis sometimes called the "“first recourse”" compensation regime as s 103(1) allows claimants to present their claims without first havingto commence an action against the ship owner (as would be required pursuant to s 101 and 109 of the MLA, often referred to as the "“lastrecourse”" regime). [55] Thus, ss 103 to 106 provide claimants with an avenue by which claims can be quickly and directly resolved by the Administrator.This is reflected in s 105(3), which limits the factors the Administrator may consider when investigating and assessing s 103(1) claims.

This context and purpose of the "“first recourse”" regime is relevant to the question of whether s 103(2) in integral to s 103(1). [56] In that regard, it is of note that the Administrator’s investigation and assessment are undertaken as the first procedural step onreceipt of a claim. However, there is no explicit provision within ss 103 to 106 as to how and when the s 103(2) limitation periods are to

be assessed with respect to a s 103(1) claim. The only connection to the limitation periods is the reference to s 103(1) contained in s 105(3)(a). There is also no express authority by which the Administrator may disallow or otherwise invalidate a claim on the ground it is outside of a limitation period. Nor does the scheme contain any provision suggesting that a claim made outside a limitation period should be dealt with by a process other than through a disallowance after investigation and assessment by the Administrator. [ 57 ] Further, it would seem apparent that in many cases, to make a determination of which limitation period applies (whether s 103(

a) or (b)) and whether a claim falls within that limitation period, the Administrator may be required to receive, consider, and weigh evidence to determine whether and, if so, when oil pollution damage occurred. [ 58 ] All of this suggests that the Administrator’s determination of whether a claim falls outside of a limitation period is to be made " “when investigating and assessing a claim” " , and not outside of that process. [ 59 ] Looked at from a different perspective, if a plain reading of s 106(2) does not include a right of appeal against the application of a limitation period because it is not a s 105(3) matter, then this must also mean that the Administrator does not have the authority pursuant to s 105(3) to decide on the application of limitation periods during the investigation and assessment stage of a s 103(1) claim.

Theoretically, this could imply that the Administrator would have to consider the limitation period as part of some sort of pre- investigation screening process, finding that the claim is not eligible without " “disallowing” " the claim. [ 60 ] In that event, a decision based on the limitation period would not trigger the appeal remedy in s 106(2), avoiding some of the concerns of the Administrator, such as a multiplicity of proceedings on different standards of review, as the Administrator would not have made a decision on the merits of the claim, and it would allow a claimant to apply for judicial review of that determination without making an appeal under s 106(2).

However, as noted above, it is not clear how the Administrator could render a determination on the appropriate limitation period without receiving and considering evidence as to whether a discharge of oil occurred and, if so, when it occurred, without using their powers of investigation and assessment in s 105(1) and 105(2). Nor does anything in the " “first recourse” " scheme, or otherwise in

Part 7 of the MLA , authorize such a process. [ 61 ] I am also somewhat persuaded by the Administrator’s submission regarding the historical development of the scheme. The " “claims” " provision (now s 103(1)) was previously contained in the same

section as the " “limitations” " provision (s 103(2)) – both were included in s 710(1) of the CSA . The previous version of s 105(3) was found in s 710(4) of the CSA , which referred back to " “matters covered by subsection (1)” " . The appeal provision, s 711(2), allowed the Court to concern itself " “only with the matters described in paragraphs 710(4)(

a) and (b)” " – this included " “matters covered by subsection (1)” " including whether the claim fell within the limitation periods. Given the context of the " “first recourse” " scheme, and in the absence of any indication of an intent by Parliament to sever the limitation period from the matters that the Administrator can consider pursuant to s 105(3), and consequently limiting the right of appeal, the foregoing supports an

interpretation of ss 103 to 106 that maintains consistency with the prior version of the scheme. [ 62 ] Given the above, and keeping in mind that the

interpretation of a statutory provision must be made according to a textual, contextual and purposive analysis to find a meaning that is harmonious with the MLA as a whole, I agree in principle with the Administrator’s submission that the s 103(2) limitation period provisions should be interpreted as " “modifying” " s 103(1) – that is modifying when the losses set out in s 103(1) are eligible for compensation, and when they are outside of the scope of s 103(1) claims. However, I would put this otherwise. Being that the " “matters” " referred to in s 106(2) include the investigation and assessment (by the Administrator) of the s 105(3)(

a) factor – whether a claim is for loss damage, costs or expenses referred to in s 103(1). Of practical necessity, this must also include an assessment of the s 103(2) limitation periods applicable to the s 103(1) claim. Were it not so, s 103(2) would, in effect, be an orphan provision. (See ATCO Gas & Pipeline Ltd v Alberta (Energy & Utilities Board) , 2006 SCC 4 at paras 51 , 73; Montreal (City) v 2952-1355 Quebec Inc , 2005 SCC 62 at para 34 ; (at 291-3.) [ 63 ] That is, I agree with the Administrator that s 103(2) is correctly interpreted such that the Administrator considers the limitation period as part of the claim . On that

interpretation, the limitation periods in s 103(2) fall under the Administrator’s scope of authority in s 105(3), and therefore under the Court’s scope of review in s 106(2). [ 64 ] Accordingly, I conclude that these matters should proceed as an appeal pursuant to s 106(2) of the MLA . Issue 2: Standard of review Canada’s position [ 65 ] Canada submits that, if considered as an application for judicial review, all issues before the Court relate to the substance of the Administrator’s decision, and should be reviewed on the presumptive standard of reasonableness ( citing Vavilov at paras 16, 23-32 ).

However, if the matters proceed by way of appeal, questions of fact and mixed fact and law are assessed on a standard of palpable and overriding error, while issues of law (including questions of statutory

interpretation and the scope of a decision maker’s authority) are assessed on the correctness standard ( citing Housen v Nikolaisen , 2002 SCC 33 at paras 8 , 10, 19, 26-37 [ Housen ]). Canada submits that the application of s 103 to a set of facts is a question of mixed fact and law. However, the Administrator’s findings were " “infected or tainted” " by a mischaracterization of the legal test - an erroneous understanding of the standard to apply in determining whether oil pollution damage " “occurs” " .

Therefore, the Administrator’s reliance on this standard is reviewable on the correctness standard ( citing Housen at paras 33-35 ). Administrator’s position [ 66 ] The Administrator agrees with the statement of the substantive issue identified by Canada in its submissions – being whether the Administrator appropriately found that the CCG was out of time to file a claim pursuant to s 103(2) of the MLA for either or both vessels. However, the Administrator submits that Canada’s written argument raises other issues, which the Administrator identifies, and submits

that these are questions of law or mixed fact and law to which the correctness standard applies on appeal, or the reasonableness standardapplies on judicial review. The Administrator also submits that Canada’s challenge distills into a challenge of the finding that a dischargeof oil occurred, which is a finding of fact and should be reviewed as such.

Analysis [67] As I have found that these matters should be heard as a statutory appeals, appellate standards of review apply. [68] Where the legislature has provided a statutory appeal mechanism from an administrative decision to a court, this signals thelegislature’s intent that appellate standards apply when a court reviews the decision (Vavilov at para 17). "“This means that theapplicable standard is to be determined with reference to the nature of the question and to this Court’s jurisprudence on appellatestandards of review”" (Vavilov at para 37).

On appeal, questions of law are reviewable on the correctness standard, findings of fact andfindings of mixed fact and law without an extricable legal question are reviewable on the standard of palpable and overriding error(Housen at paras 10, 19, 26-37; Vavilov at para 37). Issue 3: Did the Administrator commit a reviewable error infinding that the s 103(2)(

a) limitation period applied and thatCCG was out of time to file a claim pursuant to s 103(1)? Canada’s position [69] Canada frames its arguments in the context of statutory

interpretation. Canada states it specifically takes issue with how theAdministrator interpreted and applied the word "“occurs”" as found in s 103(2)(

a) and (

b) of the MLA. Canada submits that the ordinarymeaning of "“to occur”" does not import speculation or weighing of probabilities as to what might have happened: either an event tookplace, or did not (or it is not possible to say). On a plain reading, s 103(2)(

a) refers to oil pollution that actually or demonstrably occurredand does not refer to what might have occurred or probably occurred from the perspective of the Administrator. The standard, or basis inevidence, required to determine whether an event – oil pollution damage – occurred must be grounded in the actual evidence before theAdministrator not in assumptions, probabilities, or in the taking of something equivalent to judicial notice.

Canada submits that arequirement of "“actual evidence”" supports the goals of the MLA and the purpose of limitation periods, both generally and in relation tofund related provisions of the MLA. [70] Canada submits that the purpose of time limitations more generally further supports a reading of "“occurs”" in favour of requiring"“actual evidence”". Limitations require that the date a limitation period accrues is fundamentally knowable, whether or not the claimhas been discovered by a potential claimant (referencing Cholmondeley (Marquis) v Clinton (Lord) (1820), 2 Jac & W 1, 37 ER 527(Ch); and M(

K) v M(H), (SCC), [1992] 3 SCR 6 at para 24, SCJ No 85). However, the Administrator’s

interpretation ofs 103(2)(

a) means that the date when the limitation period accrues will often be unknowable to claimants and to the Administrator,which vitiates the purposes of limitation. [71] Further, Canada submits that the Administrator’s

interpretation would also lead to absurd consequences, rendering the 5-yearlimitation period effectively moot in a wide range of situations thereby defeating the legislature’s choice to provide a longer limitationperiod for claims based on anticipatory action. Canada submits that on its

interpretation of "“occurs”" – requiring actual evidence of oilpollution damage – if there is no evidence of oil pollution damage, then s 103(2)(

a) does not apply and s 103(2)(

b) can be relied on. Bycontrast, the Administrator interprets "“occurs”" to require only speculation on what occurred and then infers that where there isobserved risk, there is likely already oil pollution damage, thus permitting the Administrator to bypass the 5-year limitation period. [72] Canada submits that the language of the MLA and the CSA align. The MLA refers to "“occurrence”" in respect of which "“oilpollution damage is anticipated”". The term "“anticipated”" reflects s 180 of the CSA, which provides the Minister with the discretion todetermine whether a vessel "“may”" discharge a pollutant.

The limitation period accrues when something happened or was observed thatcaused the Minister to believe on reasonable grounds that there "“may”" be a discharge. It is the belief of the Minister, not of theAdministrator, that is important. In situations involving the CCG, the s 103(2)(

b) limitations clock starts running when the CCGdetermines its should act pursuant to s 180 of the CSA. [73] Canada submits that whether oil pollution occurred is an important distinction in the MLA and a determination that must be made on"“actual evidence”", rather than on the Administrator’s subjective decision making. Administrator’s position [74] The Administrator rejects what it describes as Canada’s exhaustive efforts to twist the meaning of "“occur”" such that it becomessomething other than a synonym for "“happen”". However, the Administer addresses some of the points raised by Canada.

TheAdministrator submits that it applied the correct standard of proof in determining which limitation period applies. That is, theAdministrator determined whether oil pollution damage occurred based on the balance of probabilities, which is the only standard forcivil matters (citing FH v McDougall, 2008 SCC 53 [McDougall]). The Administrator states that it relied on indirect, or circumstantial,evidence to infer that a discharge of oil occurred in both cases.

Inferring that a discharge had occurred was appropriate on that evidenceand Canada’s submissions that there was no "“actual evidence”" are not accurate. [75] The Administrator also submits that courts regularly apply limitation periods without identifying precisely when a limitation periodbegan to run (referencing Wewaykum v Canada, 2002 SCC 79 at paras 127, 129 [Wewaykum]; Deng v Canada, 2019 FCA 312 at para 31

[Deng]). The practice of fixing the latest possible date on which some pivotal event happens is long-established and logically sound. [76] The Administrator submits that the limitation period in s 103(2)(

a) operates even when the claimant does not know when damageoccurred. The Administrator rejects Canada’s submission that the limitation period for anticipatory measures does not begin to operateuntil the Minister determines that there is a risk that a ship may discharge oil. It points out that an argument by Canada that a limitationperiod should not apply until such time as the Minister believed the relevant ship was likely to cause pollution damage was rejected bythis Court in Canada v JD Irving, (FC), [1999] 2 FC 346 [Irving Whale].

While that decision concerned provisionsof the CSA which have since been moved to the MLA in amended form, the reasoning in the Irving Whale remains good law and islogically sound. Analysis [77] Before beginning this analysis, I note that Canada agrees with the Administrator that, for the purposes of the MLA, to the extent that"“oil pollution damage”" may have an oil discharge threshold, that threshold is very low. Canada does not suggest that in these casesthere was some discharge and that it was too minor to be considered "“oil pollution damage”".

Rather, Canada takes the position that inthese cases there was no discharge. [78] I next reproduce s 103(2) of the MLA here for ease of reference: 103

(2) Unless the Admiralty Court fixes a shorter period under paragraph 111(a), a claim must be made (

a) within two years after the day on which the oil pollution damage occurs and five years after the occurrence that causesthat damage; or (

b) if no oil pollution damage occurs, within five years after the occurrence in respect of which oil pollution damage isanticipated. [79] In my view, for the reasons that follow, it is clear that the distinction between the application of either of the two s 103(2) limitationperiods is a purely factual distinction. That is, quite simply, whether or not oil pollution damage occurred. Here, the parties agree that ifany oil entered the water, then oil pollution damage can be assumed.

Therefore, whether or not oil pollution entered the marineenvironment is a factual determination that is to be made by the Administrator. It is the determination of that question that will dictatewhich of the two s 103(2) limitation periods apply. [80] On that basis, it is not necessary to embark upon a statutory

interpretation of the word "“occurs”" as found in s 103(2)(b), as CCGsubmits. However, I will address some of the points arising from or raised by Canada in its statutory

interpretation analysis. The mostsignificant of these is the standard of proof which the Administrator is entitled to utilize when determining if a discharge of oil pollutionoccurred. i. Standard of proof [81] Read in whole, it is apparent that Canada’s

interpretation argument is really an argument about the standard of proof that theAdministrator may apply. This is reflected in Canada’s position that on its

interpretation of "“occurs”" – requiring "“actual evidence”" ofoil pollution damage – if there is no "“actual evidence”" of oil pollution damage, then s 103(2)(

a) does not apply and s 103(2)(

b) can berelied on. Canada asserts that the Administrator must only rely on direct evidence (witness statements or observations) in making factualfindings as to whether there was a discharge of oil. Canada rejects, as speculation, findings of fact based on other evidence and assertsthat this evidence cannot be utilized by the Administrator in making a s 103(2) determination. [82] As stated above, the Administrator is authorized and required by s 105(1) of the MLA to investigate and assess s 103(1) claims, andto determine what portion of them are established.

Part 7 of the MLA, and more specifically the ss 103 to 106 "“first recourse”" regime,like other administrative regimes, serves to "“set up and empower the administrative decision-maker to find the facts, apply the law andmake a decision”" (‘Namgis First Nation v Canada (Fisheries and Oceans), 2019 FCA 149 at para 5; Canada (Attorney General) vKattenburg, 2021 FCA 86 at para 17; Assn of Universities & Colleges of Canada v Canadian Copyright Licensing Agency, 2012 FCA 22at para 17; Hoang v Canada (Public Safety and Emergency Preparedness), 2017 FC 1133 at para 12; Bernard v Canada RevenueAgency, 2015 FCA 263 at para 17). [83] I agree with the Administrator that when it is tasked with making findings of fact, as it is required to do in determining whether theclaim is for loss, damage, costs or expenses referred to s 103(1), including which limitation period applies pursuant to s 103(2), theAdministrator must do so on the balance of probabilities.

In McDougall, the Supreme Court of Canada found that the balance ofprobabilities is the only standard of proof in civil cases (at para 40). The Court then referred to the judge’s task when making findings offact: [46] Similarly, evidence must always be sufficiently clear, convincing and cogent to satisfy the balance of probabilities test.But again, there is no objective standard to measure sufficiency. In serious cases, like the present, judges may be faced withevidence of events that are alleged to have occurred many years before, where there is little other evidence than that of theplaintiff and defendant.

As difficult as the task may be, the judge must make a decision. If a responsible judge finds for theplaintiff, it must be accepted that the evidence was sufficiently clear, convincing and cogent to that judge that the plaintiffsatisfied the balance of probabilities test. … [49] In the result, I would reaffirm that in civil cases there is only one standard of proof and that is proof on a balance ofprobabilities. In all civil cases, the trial judge must scrutinize the relevant evidence with care to determine whether it ismore likely than not that an alleged event occurred.

[emphasis added] [84] It is also well established that the standard of proof of a balance of probabilities also applies to administrative decision making thatis civil in nature, absent legislation indicating otherwise (Donald J M Brown & John M Evans, Judicial Review of Administrative Actionin Canada (Toronto: Thomson Reuters Canada, 2022) at § 12:7; Sara Blake, Administrative Law in Canada, 7th Ed (Canada:LexisNexis) at § 2.16; PSAC v Canada Post, 2011 SCC 57 at para 1 wholly adopting the dissenting reasons of Justice Evans in PSAC vCanada Post, 2010 FCA 56 at para 205; Stetler v Ontario (Agriculture, Food & Rural Affairs Appeal Tribunal, (ONCA), [2005] OJ No 2817, 141 ACWS (3d) 157 (Ont CA) at para 79; Pacasum v Canada (Minister of Citizenship & Immigration, 2008FC 822 at para 22). [85] Even in a non-adversarial proceeding, such as the determination of a claim under s 103(1) of the MLA, the evidence must still beassessed.

This is demonstrated by the requirement of s 105(1) that the Administrator investigate and assess such claims considering thefactors set out in s 105(3), as well as s 105(2), pursuant to which the Administrator has the powers of a commissioner under

Part 1 of theInquiries Act, RSC, 1985, c I-11 when investigating and assessing a claim. If the Administrator has assessed the evidence and finds thatan event is "“more likely than not”" to have occurred, it should make a finding of fact in that regard. [86] In addition to assessing the evidence to determine what it establishes directly, the Administrator, as an administrative decisionmaker, is also entitled to make factual inferences based on the evidence before it. Inferences must be reasonable and logical, drawn fromfacts accepted by the decision maker and made by applying an inductive reasoning process.

The facts that provide the basis for theinference must be established by evidence, not speculation (Teva Canada Limited v Pfizer Canada Inc., 2017 FC 526 at para 22; K (

K) vCanada (Minister of Citizenship and Immigration), 2014 FC 78 at para 61). In Magonza v Canada (Citizenship and Immigration), 2019FC 14 [Magonza], in the context of discussing the concept of the sufficiency of evidence, Justice Grammond addressed reliance onindirect or circumstantial evidence: [32] The last concept I wish to discuss is that of “sufficiency” of the evidence. The use of this concept, especially if it ismeant to require several pieces of evidence to prove a fact, may be surprising. After all, the law does not require that facts beproved by more than one witness.

When a contract is filed in evidence, or a witness testified that he saw the accuseddischarge a firearm on the victim, those facts are proven. But these are cases of direct evidence.

Where the evidenceis indirect or circumstantial, however, the fact-finder must rely on inferences, weigh each piece of evidence and decidewhether the cumulative weight of all the evidence is sufficient to warrant a finding that the disputed fact exists. [emphasis added] [87] And, as stated by the Manitoba Court of Appeal in R v McIvor, 2021 MBCA 55: [19] It is the role of the trial judge to make findings of fact and, from those facts, to draw factual inferences.

As it is not therole of appellate courts to retry cases, those factual findings and conclusions or inferences are entitled to deference on appealand “are not to be reversed [on appeal] unless it can be established that the trial judge made a ‘palpable and overridingerror’” (see Housen v Nikolaisen, 2002 SCC 33 at para 10; see also para 25; HL v Canada (Attorney General), 2005 SCC 25at para 74; and R v Clark, 2005 SCC 2 at para 9). [emphasis added] [88] The Supreme Court of Canada in Housen discussed the deference to be afforded to a trial judge’s factual findings and factualinferences: 22 Second, with respect, we find that by drawing an analytical distinction between factual findings and factual inferences,the above passage may lead appellate courts to involve themselves in an unjustified reweighing of the evidence.

Althoughwe agree that it is open to an appellate court to find that an inference of fact made by the trial judge is clearly wrong, wewould add the caution that where evidence exists to support this inference, an appellate court will be hard pressed to find apalpable and overriding error. As stated above, trial courts are in an advantageous position when it comes to assessingand weighing vast quantities of evidence. In making a factual inference, the trial judge must sift through the relevant facts,decide on their weight, and draw a factual conclusion.

Thus, where evidence exists which supports this conclusion,interference with this conclusion entails interference with the weight assigned by the trial judge to the pieces of evidence. 23 We reiterate that it is not the role of appellate courts to second-guess the weight to be assigned to the various items ofevidence. If there is no palpable and overriding error with respect to the underlying facts that the trial judge relies on to drawthe inference, then it is only where the inference-drawing process itself is palpably in error that an appellate court caninterfere with the factual conclusion.

The appellate court is not free to interfere with a factual conclusion that it disagreeswith where such disagreement stems from a difference of opinion over the weight to be assigned to the underlying facts.

Aswe discuss below, it is our respectful view that our colleague’s finding that the trial judge erred by imputing knowledge ofthe hazard to the municipality in this case is an example of this type of impermissible interference with the factual inferencedrawn by the trial judge. [underlining in original, emphasis in italics added] [89] Courts have confirmed that this approach also applies to the appeal of a decision made by an administrative decision maker (Vavilovat para 37; Moffat v Edmonton (City) Police Service, 2021 ABCA 183 at para 42; Yee v Chartered Professional Accountants of Alberta,2020 ABCA 98 at para 29). [90] This jurisprudence stands in contrast to Canada’s submissions asserting that the Administrator cannot rely on any evidence andcannot draw any conclusions from any evidence unless it is "“actual evidence”" – meaning a direct witness observation that supports thatfact.

To the contrary, the jurisprudence confirms that indirect or circumstantial evidence can properly support the making of a factualinference, which should generally be treated by reviewing courts in the same way as a direct factual finding (Housen at para 22).

[ 91 ] This is especially true, and especially necessary, where there is an evidentiary gap. While Canada submits that such a gap makes the fact or event in issue " “inherently unknowable” " , it is the role of the decision maker to assess the evidence and come to a conclusion about what actually occurred, based on whether it is " “more likely than not” " ( McDougall at paras 46, 49 ; Magonza at para 32 ). While it is true that a decision maker cannot speculate as to what occurred, they are entitled to extrapolate or infer from known facts in order to determine that a related event occurred.

Thus, in the matters before me, although a discharge of oil may not have been directly observed, the Administrator was entitled to consider other evidence that was before it to assess whether it was more likely than not that oil was nevertheless discharged without being observed. [ 92 ] Therefore, the Administrator correctly identified the balance of probabilities as being the applicable standard of proof when making its factual determinations.

The Administrator was also entitled to make inferences of fact based on the evidence before it and did not err by taking that approach to the evidence. [ 93 ] While Canada submits that there was no " “actual evidence” " upon which the Administrator could make a factual finding as to whether a discharge of oil occurred, i.e. direct observation of a discharge, as will be discussed below, the Administrator had before it other evidence such as survey reports and the CCG’s narrative of events. The Administrator was entitled to make findings of fact and to make factual inferences based on that evidence.

Such inferences can be determinative. ii.

Section 180 of the CSA [ 94 ] Canada submits that in situations involving actions to prevent oil pollution damage " “there is necessarily a clear start date: the date the party taking the anticipatory action believed on reasonable grounds they should act” " and that the limitation period starts to run when something happened or was observed to cause the Minister to reasonably believe that there may be a discharge. Canada submits that it is the belief of the Minister that is important, not the belief of the Administrator and that this

interpretation of s 103(2)(

b) is demonstrated by s 180 of the CSA . [ 95 ] I do not agree with Canada’s submission. [ 96 ] First, s 103(2) says nothing about the belief of the claimant at the time they incurred the loss, damage, costs or expenses for which they seek compensation under s 103(1). [ 97 ] Second, s 103(2) must be viewed in context. That context is that claims made by a " “person” " who has suffered loss or damage or incurred costs and expenses as set out in respect of actual or anticipated pollution damage may file a claim with the Administrator for such loss, damage, costs or expenses pursuant to s 103(1).

Upon receipt of a s 103 claim, the Administrator must investigate and assess it and make an offer of compensation to the claimant for whatever portion of it that the Administrator finds to be established considering the factors set out (ss 105(1) and (3)). As I have found above, the determination of a limitation period under a s 103(2) is to be considered by the Administrator as a part of a s 103(1) claim.

In other words, it is part of the role of the Administrator to assess which limitation period applies (by determining if oil pollution damage occurred) and if a claim falls with or outside that limitation period. [ 98 ] Third, as to section 180(1) of the CSA , this states as follows: 180

(1) If the Minister of Fisheries and Oceans believes on reasonable grounds that a vessel or an oil handling facility has discharged, is discharging or may discharge a pollutant, he or she may (

a) take the measures that he or she considers necessary to repair, remedy, minimize or prevent pollution damage from the vessel or oil handling facility, including, in the case of a vessel, by removing — or by selling, dismantling, destroying or otherwise disposing of — the vessel or its contents; … (

c) if he or she considers it necessary to do so, direct any person or vessel to take measures referred to in paragraph (

a) or to refrain from doing so. [ 99 ] Canada submits that s 103(2)(

b) of the MLA refers to the " “occurrence” " in respect of which " “oil pollution damage is anticipated” " . Further, that the term " “anticipated” " reflects s 180 of the CSA which gives the Minister the discretion to determine whether a vessel " “may” " discharge a pollutant. [ 100 ] However, s 180(1) serves only to grant the Minister the power to take anticipatory measures or to direct others to do so. Nothing more.

It is correct that if the CCG takes such measures based on the Minister’s s 180 belief, the CCG can seek to be compensated by the Administrator, pursuant to s 103(1), for loss, damage, costs or expenses incurred. However, there is no direct link between s 180 of the CSA and the s 103(2)(

b) limitation provision. Had Parliament wished to do so, it could have effected a limitation period specific to claims for CSA s 180 anticipatory responses. Alternatively, it could have specified that, in the event that the Minister makes a determination, pursuant to s 180 of the CSA , that anticipatory action is required, then the longer limitation period found in s 103(2)(

b) will automatically apply – regardless of whether a discharge is ultimately found to have occurred or not. Similarly, s 103(2)(

b) does not contain a presumption whereby claimants taking anticipatory measures will be presumed to have prevented oil pollution damage – and thereby entitled to rely on the longer s 103(2)(

b) limitation period (unlike, for example, s 105(4), which presumes that the occurrence that is the subject of a s 103(1) claim was caused by a ship – unless the Administrator is satisfied on the evidence that the occurrence was not caused by a ship in which event the Administrator may dismiss the claim).

However, Parliament did not choose to make any such provisions. [ 101 ] Nor am I persuaded by Canada’s submission that by reading s 103 of the MLA and s 180 of the CSA in the whole context of the compensation scheme for oil pollution damage, it is clear that Parliament intended to provide the Minister with more time to submit claims for compensation when action is taken to prevent oil pollution damage, thus meeting Canada’s commitments under the international conventions. In fact, more time is allocated pursuant to s 103(2)(b) – but that provision only applies if there is no oil

pollution damage. [ 102 ] I also agree with the Administrator that the decision in Irving Whale is of some assistance in this matter. In 1970, the barge Irving Whale sank causing a major oil pollution incident. Small quantities of oil continued to leak intermittently from the barge over the next 26 years. In 1992, a report recommended immediate preventive action as there was a serious risk of a massive escape of oil. In 1996, the barge was raised and the subject action was commended the following year. One of the issues in that action was whether the claim against SOPF was time-barred by s 710(1)(

a) of the version of the CSA then in force (the CSA s 710(1) wording being identical to that found in s 677(1) of the CSA ). Section 677(1) of that version of the CSA is similar to s 77(1) of the MLA , and s 710(1) of that version of the CSA is similar to the s 103 regime found in the MLA (s 103, 105 and 106). The Court found that its s 667(1) analysis applied equally to its s 710(1) analysis concerning the SOPF. [ 103 ] In Irving Whale , the defendants’ position was that s 677(10) provided two different limitation periods.

The first, set out in s 677(10)(a), applied where pollution damage had occurred: the time limitation being three years from the date of the damage and six years from the occurrence that caused such damage. They asserted that since pollution damage unquestionably occurred, all claims were statute-barred at the latest by November 1973. In any event, even if it should be found that s 677(10)(

a) was, for some reason inapplicable, s 677(10)(

b) enacted a six-year prescription which ran from the date of " “the occurrence” " . The word " “occurrence” " in s 677(10)(

b) had the same meaning as it did in s 677(10)(

a) and the operative date was that of the event which caused or could have caused pollution damage to occur, namely the sinking. [ 104 ] In its response in the Irving Whale , Canada made many arguments that are similar to those it now makes before me. The Court rejected these arguments. It found that there was no doubt that the meaning suggested by the defendants – that s 677(10) provided two different prescriptive periods and because there had been oil pollution damage s 667(1)(

a) applied – was correct. Subsection 667(1) dealt with claims both for pollution damage and for preventive measures. Because pollution damage occurred at the time of the sinking of the Irving Whale , s 667(10)(

a) applied. However, even if it were assumed that s 667(10)(

b) applied, the two uses of the word " “occurrence” " in immediate proximity to one another in the same subsection must have the same meaning. That meaning could only be an event which causes or is likely to cause pollution damage. Considering in the broader context of the history of the provisions, including adoption by Canada of the Civil Liability Convention and the 1971 Fund Convention and the establishing of the SOPF, did not alter that

interpretation. [ 105 ] In the context of the circumstances of that matter, the Court also found that the triggering of the limitation period depended on the timing of the occurrence, not on the belief of the Minister: [21]….. If there was to be a separate prescriptive period for each separate preventive measure which the Minister, in his sole discretion decides to take, there would, in fact, be no limitation period at all except one that was wholly dependent upon the Minister's will. That cannot be the law.

The proper application of the discoverability principle in this case calls for time to start running from the moment that the government acquired the knowledge that the wreck was lying on the seabed and had discharged, was discharging and was likely to discharge oil. That was in 1970. [ 106 ] I acknowledge that it is entirely possible that when – based on the information then available to the Minister – the Minister makes a determination under s 180(1) of the CSA that there may be a discharge and that a response is required, it may subsequently be determined that a discharge had, in fact, already occurred.

For example, a ship that was in peril may have already sunk or discharged oil. However, in that event, when or whether the Minister subjectively believed a discharge may occur is not relevant to the question of which limitation period applies. This is determined by the factual question of whether a discharge occurred. [ 107 ] In sum, I do not agree with Canada that because s 180 of the CSA permits the Minister to direct that anticipatory measures be taken when the Minister reasonably believes that a discharge of a pollutant may occur, that this belief serves to engage the s 103(

b) limitation period. The distinction between the two limitations periods is not based on the claimant’s circumstances or identity, it remains a factual one – dependent on whether oil pollution damage occurred. [ 108 ] In my view, the Administrator correctly interpreted s 103(2) such that the limitation period contained in s 103(2)(

a) applies when oil pollution damage has occurred for which a claim is made under s 103(1). The limitation period contained in s 103(2)(

b) applies where no oil pollution damage has occurred and the s 103(1) claim arises from presentative measures expended in response to anticipated oil pollution damage. The determination of which limitation period applies is purely a factual determination based on whether or no

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