Historic Trade-off: The Ryan’s Commander and the Application of Provincial Worker’s Compensation Legislation to Marine Injuries and Fatalities

August 5, 2013

On Sept. 19, 2004, the fishing vessel Ryan’s Commander departed Bay de Verde, N.L., for a trip to its home port of St. Brendan’s, N.L., but it was never to arrive. In heavy seas off Cape Bonavista, the vessel capsized, forcing the crew of five to abandon ship. Despite the efforts of search and rescue technicians, brothers Joe and David Ryan did not survive and their dependents looked for answers and compensation.   The issue, however, was not one of liability but whether the statutory bar pursuant to the Workplace Health, Safety and Compensation Act, R.S.N.L. 1990, c. W -11 (the “WHSCA”), which is at the heart of the “historic trade-off” (in which employees lose their cause of action against their employers but gain compensation that depends neither on the fault of the employer nor its ability to pay, while employers contribute to a common fund to gain limited liability with respect to employee injuries or fatalities) is applicable in the context of s. 6(2) of the Marine Liability Act, S.C. 2001 c. 6 (the “MLA”) which provides a right of action to dependents in tort for marine fatalities.

Judicial History

In 2006, the families of the Ryan Brothers and their respective estates brought an action in the Supreme Court of Newfoundland and Labrador Trial Division against Universal Marine Ltd., Marine Services International Ltd. and David Porter, an employee of Marine Services International Ltd., alleging negligence and breach of contract in the design and construction of the vessel. In addition, they also brought an action against the Attorney General of Canada alleging negligence in the vessel’s inspection, specifically its stability testing. Those actions have not been adjudicated.

In March 2007, Marine Services International Limited and David Porter applied to the province’s Workplace Health, Safety and Compensation Commission (the “Commission”) seeking a determination whether the Plaintiffs were barred from pursuing the action they had commenced, by virtue of the WHSCA.  In July 2008, an internal review specialist with the Commission determined that the Ryan families’ action against the various defendants was barred by virtue of provisions in s. 44 of the WHSCA which limits a worker’s rights of action against an employer for injuries in the conduct of or incidental to the employer’s operations. The plaintiffs applied to the Supreme Court of Newfoundland and Labrador Trial Division for judicial review of this decision on the basis that, pursuant to the MLA, dependents of persons injured by the fault or neglect of another, and under circumstances that entitle the injured person to recover damages, may maintain an action in a court of competent jurisdiction for their loss resulting from the injury against the person from whom the injured person is entitled to recover.

 In Ryan Estate v. Universal Marine, 2009 NLTD 120 (CanLII), the Supreme Court of Newfoundland and Labrador Trial Division reviewed the decision of the internal review specialist with particular attention to the doctrines of interjurisdictional immunity and paramountcy. Hall J. states at paragraph 33 as follows:

 The historic tradeoff between employers and workers under the Workplace Health, Safety and Compensation Act makes immense sense as a scheme for resolution of workplace injuries. However, the mere fact that it is well regarded and a valuable piece of legislation does not change the fact that it impairs rights under areas of federal constitutional jurisdiction in relation to legislation regarding navigation and shipping. Determination of uniform standards of liability and damages are core portions of this field of legislation and intrusions thereon, to the extent of barring action under the federal legislation by reason of the statutory bar and Workers’ Compensation legislation, are not mere casual or incidental intrusions thereon. While there may be those who regard the Workers’ Compensation scheme as being a superior solution to being able to sue under federal legislation, the superiority of one remedy over the other is not a matter for this Court to decide.

 The Commission appealed the decision to the Newfoundland and Labrador Court of Appeal. In Newfoundland (Workplace Health, Safety and Compensation Commission) v. Ryan Estate, 2011 NLCA 42 (CanLII), a majority of the Court of Appeal upheld the decision of the lower court, namely that the doctrine of interjurisdictional immunity applied and the WHSCA must be read down to ensure that its application does not impair the operation of Parliament’s jurisdiction over navigation and shipping. However, Welsh J.A., in a dissenting judgment, held that, consistent with the modern approach to cooperative, flexible federalism, the doctrine of federal paramountcy is not engaged because the WHSCA does not result in an operational conflict with the MLA and, likewise, the doctrine of interjurisdictional immunity is not engaged because the WHSCA does not trench on the core of the federal power over navigation and shipping.

 The decision of the Newfoundland and Labrador Court of Appeal was appealed to the Supreme Court of Canada and, in Marine Services International Ltd. v. Ryan Estate, 2013 SCC 44 (CanLII), a unanimous decision released on August 2, 2013, the Supreme Court overturned the decision of the Newfoundland and Labrador Court of Appeal and allowed the appeal of the Newfoundland and Labrador Workplace Health, Safety and Compensation Commission. 

 Prior to discussing the issues of interjurisdictional immunity and federal paramountcy, the Supreme Court held that s. 44 of the WHSCA was applicable to the facts of this case in that a) the Ryan brothers were injured in the course of employment within the meaning of the WHSCA; (b) Marine Services is an “employer” under the WHSCA; (c) David Porter is a “worker” under the WHSCA; and (d) the decision of the Commission that the death of the Ryan brothers occurred in the conduct of the operations usual in or incidental to the industry carried on by the employer should not be disturbed as “unreasonable”.

Interjurisdictional Immunity

The Ryan Estates contended that interjurisdictional immunity applied and that by altering the range of claimants who may make use of this statutory maritime negligence action in s. 6(2) of the MLA, s. 44 of the WHSCA trenches on the core of the federal power over navigation and shipping.  The Supreme Court, however, at paragraphs 60-62 concluded that the second prong of the test for interjurisdictional immunity was not met as s. 44 of the WHSCA does not impair the exercise of the federal power over navigation and shipping in that, while s. 44 of the WHSCA has the effect of regulating a maritime negligence law, it “neither alters the uniformity of Canadian maritime law nor restricts Parliament’s ability to determine who may possess a cause of action under the MLA”  and that “[d]espite their inability to initiate the maritime negligence action provided for by s. 6(2) of the MLA, parties in the position of the Ryan Estates still receive compensation for the accident in question (albeit through a different mechanism and from a different source).” 

It is worthy to note that the Supreme Court recognized that there was prior case law favouring the application of interjurisdictional immunity to the subject matter of the appeal (see Ordon Estate v. Grail, [1998] 3 S.C.R. 437 (S.C.C.)).  However, the Supreme Court distinguished the prior case law on the basis that such decision predated several key decisions which served to clarify the two-step test for interjurisdictional immunity and set the necessary level of intrusion into the relevant core at “impairs” instead of “affects”. 

Federal Paramountcy

With respect to the doctrine of federal paramountcy, the Supreme Court found that s. 6(2) of the MLA, when read in light of the broader statutory context, namely s. 5 of the MLA, makes room for the operation of provincial workers’ compensation schemes.  At paragraph 76, the Supreme Court concludes, with respect to federal paramountcy, that “the WHSCA and the MLA can operate side by side without conflict. Indeed, s. 6(2) of the MLA provides that a dependant may bring a claim “under circumstances that would have entitled the person, if not deceased, to recover damages.”  The Supreme Court then adopts the reasoning of Welsh J.A. of the Newfoundland and Labrador Court of Appeal, as outlined above, that the language of s. 6(2) of the MLA suggests that there are situations where a dependant is not allowed to bring an action such section and that such a situation occurs where a statutory provision, such as s. 44 of the WHSCA, prohibits litigation because compensation has already been awarded under a workers’ compensation scheme.

Conclusion

The Supreme Court of Canada’s decision has provided a definitive answer with respect to employee injuries or fatalities in the marine context and the application of WHSCA, and by extension similar worker’s compensation legislation across the country, which establishes a no‑fault regime to compensate for workplace related injuries or death.  Employees injured or killed in the marine context where provincial or federal worker’s compensation legislation is applicable, are bound by the statutory bar to actions against employers that is at the heart of the “historic trade-off” and the separate regime for compensation and such bar does not frustrate the purpose of s. 6(2) of the MLA, which was enacted to expand the range of claimants who could start an action in maritime negligence law.  While the decision may be surprising to those who practise in the area of maritime law, to conclude differently would have created uncertainty, namely: (a) for marine employers who may have paid into their respective provincial funds but, ultimately, would not be entitled to the limited liability benefits thereof; and (b) for employees injured or killed in a marine context who would not, based on their specific fact scenario, have a claim in tort against their employer and thus would have no ability to obtain compensation. 

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Please direct any questions or suggestions to the author of this article, William T. Cahill at 570-5577 or coxandpalmer.com.

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