Supreme Court of Canada

Alaska Trainship Corporation et al. v. Pacific Pilotage Authority, [1981] 1 S.C.R. 261

Date: 1981-03-19

Alaska Trainship Corporation and the Ship "Alaska" Appellants;

and

The Pacific Pilotage Authority Respondent;

and

The Ship "S.S. Alaska" and Alaska Trainship Corporation Appellants;

and

The Pacific Pilotage Authority Respondent.

1981: February 19; 1981: March 19.

Present: Laskin C.J. and Ritchie, Dickson, Beetz, Estey, McIntyre and Chouinard JJ.

ON APPEAL FROM THE FEDERAL COURT OF APPEAL

Maritime law—Shipping—Compulsory pilotage—Safety considerations to underlie pilotage regulations—Effect of possible bias in formulation of pilotage regulations—Validity of inclusion of ship’s flag as consideration in exemption from or waiver of compulsory pilotage—Severability of that consideration—Pilotage Act, 1971 (Can.), c. 52, ss. 12, 14, 16(1)—Pacific Pilotage Regulations, C.R.C., c. 1270, ss. 9, 10.

The S.S. Alaska, a ship of Liberian registry, foreign construction and American ownership, was operated by a British Columbia firm and plied weekly between New Westminster and Wittier, Alaska. Although the masters had always been American, the crew and deck watch officers were either Canadian or landed immigrants. The deck watch officers, even though qualified, had not applied for pilotage certificates because of a policy of the Canadian Merchant Service Guild to which they belonged. This policy, in turn, reflected an arrangement between the Guild and the British Columbia Coast Pilots Ltd., a pilot-owned corporation providing pilotage services pursuant to a contract with the Pacific Pilotage Authority. Representations had been made at hearings held prior to the introduction of the Pacific Pilotage Regulations for exemption or waiver from compulsory pilotage or for an opportunity for the S.S. Alaska’s deck officers to obtain pilotage certificates but without result. Generally, authority to prescribe the qualifications for a

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pilotage certificate lay with the Authority through the making of regulations.

The appeal arose out of two actions brought in the Federal Court. In the first action, Alaska Trainship Corporation sought a declaration on various grounds of the invalidity of the Pacific Pilotage Regulations or alternatively of ss. 9(2)(a)(iii) and 10(1)(a). In the second action the Pacific Pilotage Authority sought to recover pilotage fees from the Alaska Trainship Corporation. The latter counterclaimed to recover a sum allegedly paid to the Authority for pilotage fees under a mutual mistake of law and under compulsion. The main issue, however, arose out of the first action and turned on the scope of the Pacific Pilotage Authority’s powers under the Pilotage Act. The short question was whether conditioning the claim for exemption or waiver on the ship’s flag could be fairly said to be a matter of or connected with safety in realization of the objects of the Authority under s. 12 of the Act.

Held: The appeal should be allowed.

The Regulations were not invalid because of conflict of interest so far as the pilots were members of the Authority and associated with the British Columbia Coast Pilots Ltd. and because of the interaction with the policy of the Canadian Merchant Service Guild. Further, there was no reasonable apprehension of bias or existence of bias, based on these associations, which could be a ground for declaring the Regulations invalid. The Authority had both an operating and regulatory function. Providing the appointments were validly made, it would be difficult to deny the Authority the power to exercise regulatory authority in accordance with the statutory prescriptions, even though there was a resulting pecuniary benefit. Such a benefit was immanent in the statute if not also in the regulation-making authority.

The Authority’s regulation-making power, while requiring conformity with the Act’s objects, allowed for a liberal interpretation of “the interests of safety”. The power conferred by s. 14(1) of the Act, however, was not wide enough to embrace prescription of a ship’s flag as referable to safety. The scope of s. 14(1) was exhausted

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by fixing tonnage standards and by relating them to types of ships. If place of registry were important for safety or for pilotage regulation, a clear indication would have been made in the Act or in the regulation-making power.

The emphasis in the Pacific Pilotage Regulations was on continuing competency of pilotage certificate holders in carrying out their work in the designated areas. Relief through exemption or waiver related to competency of the master or deck watch officer of the ship. The ship registration add-on, limited for economic reasons to Canadian and United States registration to the exclusion of other equally reputable places of registry, could be classed among “cumulative restrictions enacted distributive” and therefore severable. Respondent, accordingly, was not entitled to retain the award of $3,594.04 for pilotage fees made by the Court of Appeal. The judgment of the Federal Court of Appeal dismissing the counterclaim was correct.

Re Ashby et al., [1934] O.R. 421, referred to; Committee for Justice and Liberty et al. v. National Energy Board et al., [1978] 1 S.C.R. 369, distinguished; Attorney-General for Alberta v. Attorney-General for Canada, [1947] A.C. 503, referred to; Reference as to the Validity of Section 5(a) of the Dairy Industry Act, [1949] S.C.R. 1, applied.

APPEAL from a decision of the Federal Court of Appeal[^1], varying the judgment of Gibson J. Appeal allowed.

Douglas Hogarth, Q.C., for the appellants.

Raynold Langlois and Francine Côté, for the respondent.

The judgment of the Court was delivered by

THE CHIEF JUSTICE—This appeal arises out of two actions brought in the Federal Court and tried together by Gibson J. In the first action the plaintiff, Alaska Trainship Corporation, now appellant, sought a declaration on various grounds of the invalidity of the Pacific Pilotage Regulations promulgated, upon the required approval of the Gov-

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ernor in Council, on April 9, 1974, or, alternatively, of the invalidity of ss. 9(2)(a)(iii) and 10(1)(a) of those Regulations. In the second action, the respondent, the Pacific Pilotage Authority, sought to recover pilotage fees from the Alaska Trainship Corporation in the sum of $10,780.54. The latter counterclaimed to recover $74,246.66 as allegedly paid to the Authority for pilotage fees under a mutual mistake of law and under compulsion.

Gibson J. granted various declarations in his judgment in the first action but its main thrust was to declare s. 9(2)(a)(iii) of the Regulations ultra vires on a severed basis, as I will explain shortly. Although he took the same view of s. 10(1)(a), he found it unnecessary to include his partial condemnation in his formal judgment. He dismissed the Authority’s claim in the second action and also dismissed the counterclaim.

On appeal, the Federal Court of Appeal, speaking through LeDain J., varied the judgment of Gibson J. in three respects. It held that (1) there could be no severance of ss. 9(2)(a)(iii) and 10(1)(a) of the Regulations and they must be held ultra vires in whole; (2) the various declarations in the formal judgment of Gibson J. should be deleted; and (3) the Authority was entitled to recover $3,594.04 on its claim for pilotage fees. The judgment of Gibson J. dismissing the appellant’s counterclaim was affirmed.

The main issue in the appeal to this Court, by its leave, arises out of the first action. It has an extensive legislative history and a factual background which were fully, even minutely, examined both by Gibson J. and by LeDain J. and I am thus relieved from making more than a brief reference to this history and background of facts. Before turning to the main issue, I say no more at this point about the second action than that the judgment of LeDain J. on the counterclaim therein should stand. The recovery allowed the Authority

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on its claim for pilotage fees, being for the period from April 10, 1974 to April 30, 1974, depends on whether LeDain J. was correct in invalidating ss. 9(2)(a)(iii) and 10(1)(a) of the Regulations, and I shall come to that later in these reasons.

Turning then to the focus of this appeal, it turns on the scope of the Pacific Pilotage Authority’s powers under the Pilotage Act, 1971 (Can.), c. 52, which came into force on February 1, 1972, to enact the Pacific Pilotage Regulations. The Pilotage Act was a response to the report of a Royal Commission on Pilotage appointed in 1962 and which reported in 1968. The Act created four regional pilotage authorities, one being the Pacific Pilotage Authority and the others being the Atlantic Pilotage Authority, the Laurentian Pilotage Authority and the Great Lakes Pilotage Authority. The region for the Pacific Pilotage Authority is described in the Schedule to the Act as “all Canadian waters in and around the Province of British Columbia”. Under s. 24 of the Act, each authority is deemed, for the purpose of the Financial Administration Act to be a corporation specified in Schedule D thereof, that is a Crown Corporation of a commercial character. Members of an Authority are Order in Council appointees for a maximum term of ten years.

What the Pilotage Act did was to provide for the establishment by an Authority of compulsory pilotage areas in its region of operation, replacing a system which prevailed under the Canada Shipping Act, R.S.C. 1970, c. S-9, a system that prescribed pilotage fees or dues, whether or not a ship required a pilot, and also provided for exemptions from such compulsory payments for certain classes of ships. Some of the exemption categories related to a ship’s country of registration.

The Pilotage Act also provided for the issue of licences or pilotage certificates to applicants, being Canadian citizens or landed immigrants, and it

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contains detailed provisions for monitoring the continuing competency of licensees and certificate holders. Section 16(1) of the Act reads:

16. (1) Except as provided in the regulations, no person shall have the conduct of a ship within a compulsory pilotage area unless he is a licensed pilot or a regular member of the complement of the ship who is the holder of a pilotage certificate for that area.

Certain regulation-making authority touching licensees and pilot certificate holders are vested in the Governor in Council under s. 42 of the Act but the overall authority to prescribe the qualifications for a licence or pilot certificate was vested in an Authority through the making of regulations, and I come now to deal with the regulation-making power of an Authority.

When the Pacific Pilotage Authority considered the promulgation of the Regulations which are in issue here, it gave notice on January 2, 1973, in the Canada Gazette pursuant to s. 14(3). This provision only requires the notice in respect of regulations made under s. 14(1)(a) and (f) of the Act. Neither of these subparagraphs are, as such, involved here but I mention the matter because the appellant appeared to found some of his submissions on the view that the notice in the Canada Gazette was required in respect of all regulations made under the powers conferred by s. 14.

Section 14 is in the following terms:

14. (1) An authority may, with the approval of the Governor in Council, make regulations necessary for the attainment of its objects, including, without restricting the generality of the foregoing regulations

(a) establishing compulsory pilotage areas;

(b) prescribing the ships or classes of ships that are subject to compulsory pilotage;

(c) prescribing the circumstances under which compulsory pilotage may be waived;

(d) prescribing the notice, if any, to be given by a ship of its estimated time of arrival in a compulsory pilotage area or its estimated time of departure from a place in a compulsory pilotage area and the manner of giving such notice;

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(e) prescribing classes of licences and classes of pilotage certificates that may be issued;

(f) prescribing the qualifications that a holder of any class of licence or any class of pilotage certificate shall meet, including the degree of local knowledge, skill, experience and proficiency in one or both of the official languages of Canada required in addition to the minimum qualifications prescribed by the Governor in Council under section 42;

(g) prescribing the manner for determining whether

(i) a person who applies for a licence or pilotage certificate, or

(ii) a licensed pilot or holder of a pilotage certificate meets the qualifications prescribed under paragraph

(f) for the class of licence or pilotage certificate that he holds or for the issue of which he has applied, as the case may be;

(h) prescribing the manner of issuing licences and pilotage certificates;

(i) setting the time and fixing the fee for any examination relating to the issue of a licence or pilotage certificate and the fee for issuing a licence or pilotage certificate;

(j) limiting the number of licences that may be issued for any compulsory pilotage area;

(k) prescribing the conditions, in addition to the requirement of subsection (1) of section 16, under which a ship shall have a licensed pilot or holder of a pilotage certificate on board;

(l) prescribing the minimum number of licensed pilots or holders of pilotage certificates that shall be on board ship at any time; and

(m) prescribing the circumstances under which a licensed pilot or holder of a pilotage certificate shall be required to take further training to enable him to meet any new qualifications prescribed under paragraph (f) since his licence or pilotage certificate was issued.

(2) Where Canadian waters are contiguous with waters of the United States, an Authority may, with the approval of the Governor in Council, make regulations setting out the terms and conditions under which

(a) a pilot, or other person, authorized to have the conduct of a ship by an appropriate authority of the United States may pilot in Canadian waters; and

(b) a licensed pilot or holder of a pilotage certificate may have the conduct of a ship in waters of the United States.

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(3) Before making a regulation under paragraph (a) or (f) of subsection (1) an Authority shall publish a copy of the proposed regulation in the Canada Gazette and no such regulation shall be made by the Authority

(a) before the expiration of thirty days from the date of publication of the proposed regulation; or

(b) where a notice of objection is filed pursuant to subsection (4), before the objection is heard and an order is made by the Minister pursuant to subsection (7).

(4) Any person who has reason to believe that a regulation that an Authority proposes to make under paragraph (a) or (f) of subsection (1) is not in the public interest may file a notice of objection setting out the grounds therefor with the Minister within thirty days following publication of the proposed regulation in the Canada Gazette.

(5) Where a notice of objection is filed pursuant to subsection (4), the Minister shall appoint a person to make such investigation of the proposed regulation, including the holding of public hearings, as in his opinion is necessary or desirable in the public interest.

(6) A person appointed under subsection (5) shall have all the powers of a commissioner under Part I of the Inquiries Act.

(7) On completion of a hearing under this section the person holding the hearing shall send a report to the Minister and the Minister may, by order, approve, amend or disapprove the proposed regulation either in accordance with the report or otherwise and the Authority shall make the regulation accordingly.

It is obvious from the opening words of s. 14(1) that the regulation-making power of an Authority is circumscribed by the requirement that the regulations must be in pursuance of or in conformity with its objects. Those objects are specified in s. 12 of the Act in the following terms:

12. The objects of an Authority are to establish, operate, maintain and administer in the interests of safety an efficient pilotage service within the region set out in respect of the Authority in the Schedule.

I would emphasize that s. 14(1) speaks of “regulations necessary for the attainment of its objects”. The fact that these words are followed by the words “including, without restricting the generality of the foregoing”, does not, in my opinion,

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enlarge the regulation-making powers although it would command a liberal construction of the dominating consideration “in the interests of safety” specified in s. 12. The regulation-making authority under s. 14 is concerned fairly exclusively with the establishment of pilotage areas and with licences and pilotage certificates and is thus closely connected with safety of a pilotage service.

The Pacific Pilotage Regulations promulgated under the powers conferred by s. 14, and now found in C.R.C., c. 1270, establish five compulsory pilotage areas (s. 3) and then deal with the required qualifications of holders of a licence or a pilotage certificate (ss. 4 to 8), with ships subject to compulsory pilotage and exemptions (s. 9), with waiver of compulsory pilotage (s. 10), with pilot boarding stations (s. 11), with notices to obtain pilots (ss. 12 and 13), with classes of licences and required endorsements thereon (s. 17), with pilotage certificates and required endorsements thereon (s. 18), with applications for licences and pilotage certificates (s. 19), with further training requirements and examinations (ss. 20 to 24), with apprenticeship (ss. 25 to 28) and, finally, with required accident reports where a licensed pilot or pilotage certificate holder is involved in the casualty (s. 29). For present purposes, it is sufficient to set out in full the provisions of ss. 9 and 10 of the Regulations, these being the two sections (enacted pursuant to s. 14(1)(b) and (c) respectively) immediately involved in this case. They are as follows:

9. (1) Subject to subsection (2), every ship that is

(a) over 350 gross tons,

(b) a tug, where the combined tonnage of that tug and its tow exceeds 350 gross tons, or

(c) a pleasure yacht of over 250 gross tons is subject to compulsory pilotage.

(2) Subsection (1) does not apply to a ship that is

(a) registered in Canada and is

(i) owned by Her Majesty in right of Canada and is not engaged in commercial trade,

(ii) employed in the fishing trade, or

(iii) employed in voyages in the region or between any place in the region and any place on the West

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Coast of the United States not south of San Francisco and not west of Cook Inlet in Alaska, if the master or deck watch officer of that ship holds a certificate of competency of the proper grade and class issued by the Minister of Transport or recognized by him for the purpose of subsection 130(1) of the Canada Shipping Act and the master or deck watch officer has been regularly employed as such on a ship employed in voyages between the places described in this subparagraph during the eighteen months prior to the date that the ship is being considered for exemption under this subsection; or

(b) registered in the United States and employed in the fishing trade.

(3) The master or deck watch officer referred to in subparagraph (2)(a)(iii) shall, if required by the Authority, produce evidence satisfactory to the Authority that he is a master or deck watch officer as described in that subparagraph.

10. (1) The Authority may, on application therefor, waive compulsory pilotage in respect of a ship where

(a) the ship is registered in the United States and employed in the coastal trade, and the master or deck watch officer thereof is duly licensed as such for that ship and has been regularly employed as such on a ship in the coastal trade during the eighteen months prior to the date that the ship is being considered for the waiver under this section;

(c) the master, owner or agent thereof has complied with the sections 12 and 13 and no licensed pilot is available to perform pilotage duties on that ship; or

(d) the ship is in distress or engaged in rescue or salvage operations.

(2) Compulsory pilotage is waived in respect of a ship that is

(a) entering a compulsory pilotage area for the purpose of embarking a licensed pilot, until the ship reaches the place arranged for embarkation; or

(b) departing from a compulsory pilotage area after it has disembarked a licensed pilot in the course of its departure.

(3) The master or deck watch officer referred to in paragraph (1)(a) shall, if required by the Authority, produce evidence satisfactory to the Authority that he is

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a master or deck watch officer as described in that paragraph.

(4) An application for a waiver of compulsory pilotage may be made verbally or, when required by the Authority, shall be made in writing.

I may add that there are also two sets of Regulations governing the pilotage charges payable to the Pacific Pilotage Authority, namely, the Pacific Pilotage Coastal Tariff Regulations and the Pacific Pilotage Fraser River Tariff Regulations, but they are not directly involved in this appeal.

I come now to consider the position of the S.S. Alaska, a ship of foreign construction, some 520 feet long and with a 5,598 gross tonnage. The ship is owned by a United States firm the appellant, is operated by Pacific Maritime Agencies Ltd. of New Westminster and is of Liberian registry. For some fifteen years, the ship has been making weekly voyages between New Westminster and Wittier (Alaska), transporting railway cars. The masters of the vessel have been United States citizens but the crew, and certainly the deck watch officers, have been Canadians or landed immigrants. There was little doubt on the record that the deck watch officers had the qualifications for licences or pilotage certificates but for reasons narrated in some detail by LeDain J. they have not applied for them. Substantially, this was the result of a policy of the Canadian Merchant Service Guild of which they are members. This policy was, in turn, the reflection of an arrangement between the Guild and the British Columbia Coast Pilots Ltd., a pilot-owned corporation, with which the Pacific Pilotage Authority entered into a contract for the supply of pilotage services, as expressly permitted by s. 9(2) of the Pilotage Act.

Prior to the introduction of the Pacific Pilotage Regulations, the Authority held hearings at which representations were made on behalf of the S.S. Alaska for exemption or waiver from compulsory pilotage or for an opportunity for its deck watch officers to obtain licences or pilotage certificates.

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Hearings were held on two occasions in 1973 but without a result that would accommodate the S.S. Alaska. Although the Authority had given notice in the Canada Gazette prior to these hearings of proposed pilotage regulations, it gave a further notice, after these hearings, in accordance with the requirements of s. 14(3), already mentioned, requirements which touched only regulations proposed to be made under s. 14(1)(a) and (f) of the Act. Notice of objection was filed on behalf of the S.S. Alaska, pursuant to s. 14(4) and the Minister, in accordance with s. 14(5), appointed Mr. J.J. Mahoney, Q.C., to enquire into the objection. The latter held hearings and reported on January 2, 1974. It appears to me (and this was a point taken by counsel for the respondent Authority) that the inquiry and the report went beyond the limits of objection to regulations proposed under s. 14(1)(a) and (f). He dealt with the proposed exemption from what was otherwise required by a regulation proposed to be made under s. 14(1)(b) and, in the words of LeDain J., “Mr. Mahoney expressed the view that exemption was properly confined to ships of Canadian registration and that waiver was more appropriate for a vessel in the position of S.S. Alaska”. Again, in the words of LeDain J., “he expressed the opinion that the proper solution to the problem of the S.S. Alaska would be the issue of pilotage certificates to its deck watch officers, but that this was not a practical alternative because of the strong opposition to pilotage certificates [by the British Columbia Coast Pilots Ltd. and by the Canadian Merchant Service Guild]”. In the end result, the Pacific Pilotage Regulations were promulgated and approved on April 9, 1974, there being a need (in the view of the Government) to have regulations in force in the region because the pre‑existing regulations respecting compulsory pilotage dues or fees ceased to be in effect after February 1, 1974.

I have referred, albeit briefly, to the hearings which preceded the Regulations and to the Mahoney report only because counsel for the appellant dwelt on them and on related matters.

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He contended that the Regulations were invalid because of a conflict of interest, so far as pilots were members of the Authority and also had an association with the British Columbia Coast Pilots Ltd. and because of the interaction with the policy of the Canadian Merchant Service Guild. A second contention, based on these factors, was a reasonable apprehension of or the existence of bias which was said to be also a ground for declaring the Regulations to be invalid. Although bad faith was also alleged, it was dropped in the argument in this Court.

Counsel for the appellant did not contend that the Pacific Pilotage Authority lost its power to make regulations because pilots, as interested persons, were members thereof. He accepted the proposition expressed in Re Ashby et al.[^2], at p. 431, that “the fact that all members of the Board are optometrists engaged in the same profession as the appellants is fully answered by the fact that these men were appointed by Order in Council passed in pursuance of the statute”. However, it was his submission that the alleged disabling conflict of interest arose because of what went into the Regulations, having regard to their background which revealed a pecuniary interest in the pilots arising out of the contract for pilotage service between the Authority and the British Columbia Coast Pilots Ltd. and the enforcement of the policy of the Canadian Merchant Service Guild that its members would not apply for licences or pilotage certificates. In the view of counsel for the appellant, such a conflict of interest must be expressly permitted if it is to result in the promulgation of self-serving regulations.

Gibson J. had made a declaration in his formal judgment of the conflict of interest and also of the pecuniary motivation of the Pacific Pilotage Authority but it appears that these declarations, which were struck out in the judgment of the Federal Court of Appeal, merely shored up Gibson J.’s conclusion that the challenged two Regulations

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were not passed to promote safety, as required by the objects of the Authority.

As LeDain J. pointed out in his reasons, the Pacific Pilotage Authority has both an operating and a regulatory function. Once the appointments to it are conceded to be validly made (and I should note they also include persons associated with shipping interests) and there is no contention of bad faith, I find it difficult to deny it the power to exercise its regulatory authority, in fact a legislative power, in accordance with the statutory prescriptions, even though there is a resulting pecuniary benefit. Such a benefit is immanent in the statute under s. 9(2), if not also in the regulation-making power.

The contention of bias or reasonable apprehension of bias does not find support in such cases as Committee for Justice and Liberty et al. v. National Energy Board et al.[^3] There the issue turned on the exercise of the National Energy Board’s quasi-judicial power not its regulatory authority which is the case here. Counsel for the appellant sought to pitch his contention of reasonable apprehension of bias on the fact that through its hearings the Authority had in effect treated its proposed regulations as if they were connected with a quasi‑judicial inquiry. In my opinion, LeDain J. has dealt effectively with this contention and I agree with his rejection of it. I should not, however, like it to be taken that in no circumstances can there be a challenge to the exercise of regulation-making power simply because appointments to membership in an Authority or some other like body do not as such give rise to disqualification.

This brings me to the ground upon which Gibson J. and LeDain J. pronounced upon the invalidity, severably by Gibson J. and inseverably by LeDain J., of ss. 9(2)(a)(iii) and 10(1)(a) of the Regulations. Failing acceptance of his other contentions, counsel for the appellant seeks restoration of the judgment by Gibson J. Counsel for

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the respondent, however, supports the judgment of LeDain J. if he is unable to succeed in his contention that the Regulations, and especially ss. 9(2)(a)(iii) and 10(1)(a), are wholly intra vires.

The short question is whether conditioning the claim for exemption on a ship’s flag, here registration in Canada, and similarly, the claim for waiver, here registration in the United States, can fairly be said to be a matter of or connected with safety in realization of the objects of the Authority under s. 12. It was, in effect, conceded that the S.S. Alaska could meet the other requirements in ss. 9(2)(a)(iii) and 10(1)(a) in respect of its master or deck watch officer in order to be relieved of compulsory pilotage.

Both Gibson J. and LeDain J. held that making the place of registry of a ship a condition of exemption from compulsory pilotage, at least in relation to ss. 9(2)(a)(iii) and 10(1)(a), was not relevant to safety. Gibson J. would have removed the words “registered in Canada” from each of the subparas, of s. 9(2)(a) (his formal judgment did not, as I previously noted, deal with s. 10(1)(a)) but LeDain J., expressing caution as to the relevance of a ship’s flag to safety under s. 9(2)(a)(ii) (vessels employed in the fishing trade) limited his excision of the words “registered in Canada” to subpara. (iii) alone. But whereas Gibson J. would sever those words and otherwise leave s. 9(2)(a) intact, LeDain J. concluded that there could be no severance and hence the whole of ss. 9(2)(a)(iii) and 10(1)(a) must fall. The result, of course, was to leave the general provisions for compulsory pilotage in force without the opportunity for the S.S. Alaska to claim exemption or waiver.

In his submissions in support of the validity of the Regulations, counsel for the Authority relied on antecedent provisions which made the place of a ship’s registry a factor in exemption from com-

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pulsory pilotage dues. This contention was canvassed by LeDain J. and I adopt what he said in rejecting it. His conclusion on the irrelevance of a ship’s flag to safety under ss. 9(2)(a)(iii) and 10(1)(a) was stated in the following words:

While safety is best assured by actual verification and certification of an officer’s competency for the conduct of a vessel in a particular pilotage area, I am of the view that country of registration or ship’s flag cannot be said, as a matter of principle, to be wholly irrelevant to the question of safety of navigation as it is affected by the conduct of the vessel. Apart from such factors as size, maneuverability and navigational aids—factors related to the physical characteristics of a ship and its equipment—the essential factors bearing on safety of navigation, insofar as the conduct of the vessel is concerned, are the competency of the master or officer who has the conduct of the vessel and his knowledge of the local waters. Country of registration may raise a presumption of competency and knowledge of local waters. It may not be a sufficient criterion by itself but it cannot be said to be wholly irrelevant to the question of safety.

On the other hand, I am of the opinion that in the context of s. 9(2)(a)(iii) of the Regulations country of registration is not relevant to the question of safety. Since the requirement of safety is assured by the other conditions specified therein concerning the competency of the master or deck watch officer and his experience with local waters, country of registration is a superfluous requirement and can only be there to serve some other purpose not authorized by the Act. It was common ground that apart from the country of registration the S.S. ALASKA fell squarely within the conditions of this exception to compulsory pilotage. I agree with the contention of the owners and operators of the vessel that this provision discriminates against them on a ground that, in that particular context, is not authorized by the Act. The same can be said, I think of s. 10(1)(a) of the Regulations with respect to waiver. There the reference to American registration may serve to indicate the nature of the certificate of competency that is required, but I think the same principle applies. Where the conditions of waiver are spelled out in terms of specific competency and experience with the local waters, country of registration is irrelevant.

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I have considered whether, because of the issue concerning disciplinary action with respect to certificates of competency that was raised in the hearings, country of registration in the context of s. 9(2)(a)(iii) and s. 10(1)(a) offers an additional measure of control that can be justified on the ground of safety: I do not see how a persuasive case can be made for its relevance on this basis. It appears to be quite clear that in the case of s. 9(2)(a)(iii) a Canadian certificate of competency or a certificate recognized by the Minister of Transport as its equivalent under s. 130 of the Canada Shipping Act would be subject to suspension or cancellation by the Canadian authorities, and there would thus be the removal, insofar as the particular officer was concerned, of an essential condition of the entitlement to exemption. In the case of s. 10(1)(a), which requires the master or deck watch officer to be duly licensed for a ship registered in the United States, there is no question of control exercisable by the Canadian authorities.

Counsel for the respondent Authority also urged that the power conferred by s. 14(1)(b) of the Act to make regulations “prescribing the ships or classes of ships that are subject to compulsory pilotage” were wide enough to embrace prescription of a ship’s flag as referable to safety and that the scope of this paragraph was not exhausted merely by fixing tonnage standards and by relating them to types of ships, whether tugs or pleasure yachts or other types. I cannot subscribe to this contention. If the place of registry was as important to safety or was otherwise an important factor for pilotage regulation, as counsel for the Authority asserted, one would have expected a fairly clear indication of that in the Pilotage Act or in the grants thereunder of regulation-making power. Failing any such indication, the attempt to find it, either in s. 14(1)(b) or perhaps even in s. 14(1)(k), takes such provisions beyond their ordinary meaning and, indeed, without any supporting context in any other parts of s. 14.

This leaves for consideration whether LeDain J.’s view of inseverability should prevail or whether Gibson J.’s opinion, even if it be limited to s.

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9(2)(a)(iii) alone, should govern so as to permit the S.S. Alaska to qualify its master and deck watch officers for exemption thereunder. LeDain J. applied a dictum of the Privy Council in Attorney-General for Alberta v. Attorney-General for Canada[^4], at p. 518, to support his conclusion of inseverability. I prefer the more functional view of Rand J. in the Margarine reference, Reference as to the Validity of Section 5(a) of the Dairy Industry Act[^5], at pp. 53-54, where he said this about the challenged legislation in that case (which prohibited the manufacture and importation of margarine, the manufacture prohibition being struck down and the importation prohibition saved):

Having regard to the purpose of the legislation, the restrictions are undoubtedly intended to be cumulative. They are in no sense dependent upon or involved with each other, though no doubt both are necessary to the complete benefit envisaged. But distinct in operation and effect, they are to be taken as enacted distributively and not with the intention that either all or none should come into force.

A canvass of the Pacific Pilotage Regulations shows that the emphasis was on continuing competency of licensees and pilotage certificate holders in carrying on their work in the designated pilotage areas and that relief through exemption or waiver was also related to competency of the master or deck watch officer of the ship. The ship registration add-on, limited for economic reasons to Canadian and United States registration and thus excluding other equally reputable places of registry, seems to me to fall within Rand J.’s reference to cumulative restrictions enacted distributively.

In the result, I would allow the appeal and would vary the judgment of the Federal Court of Appeal by directing, in accordance with the views expressed by Gibson J., that the words “registered in Canada” applicable to s. 9(2)(a)(iii) and the words “registered in the United States” in s.

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10(1)(a) of the Regulations be severed from those provisions as going beyond the powers conferred upon the Authority. It follows from this conclusion that the respondent is not entitled to retain the award of $3,594.04 for pilotage fees.

The appellant is entitled to costs throughout.

Appeal allowed with costs.

Solicitors for the appellants: Hogarth, Oliver, Hughes &, New Westminster.

Solicitors for the respondent: Owen, Bird, Vancouver.

[^1]: [1980] 2 F.C. 54; (1979), 104 D.L.R. (3d) 364; (1979), 28 N.R. 451.

[^2]: [1934] O. R. 421.

[^3]: [1978] 1 S.C.R. 369.

[^4]: [1947] A.C. 503.

[^5]: [1949] S.C.R. 1.