Under the Canada Shipping Act 2001, the owner of a pleasure vessel can charter its vessel on a bareboat basis without compromising the vessel’s status as a pleasure vessel. If the vessel is not a pleasure vessel, the vessel is subjected to the regulatory requirements of a passenger carrying vessel which, with respect to manning and certification, are substantially more onerous.
Transport Canada instituted a policy which deemed a pleasure vessel, bareboat chartered to another, but then operated by the owner under a separate service agreement, to be a time charter resulting in the vessel being subject to regulation as a passenger vessel. One such owner was issued a Notice of Violation and administrative penalties in excess of $20,000.
In 0782855 BC Ltd v Canada (Minister of Transport), 2012 TATCE 4 (Review), Mr. Wharton represented the vessel owner and took the matter to review before the TATC, which determined that such a charter arrangement and services agreement by the owner did not compromise the bareboat charter relationship, effectively overturning the Transport Canada policy.
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