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Vancouver’s Westshore sues over damaged coal trestle

Trestle damage at Westshore Terminals Berth No. 1. The company is suing the ship Cape Apricot and its registered owner, Leo Ocean SA, for up to $26-million (U.S.).


A foreign-owned ship's damage to a trestle has forced Westshore Terminals Investment Corp. to slash its dividend and file a lawsuit.

Westshore had forecast 34 cents a share for its fourth-quarter dividend, but with Berth No. 1 out of commission since Dec. 7, the Vancouver-based coal port operator will reduce its payout to 27.5 cents a share, or a 19-per-cent cut.

Westshore has also filed a lawsuit that alleges the owner of the ship Cape Apricot is liable for gross negligence after the vessel slammed into the trestle and halted coal exports from one of two Westshore berths.

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Prior to Dec. 7, more than 8,300 ships had docked at the coal port over the past 42 years without incident at Roberts Bank, located 35 kilometres south of Vancouver. Westshore's largest shareholder is Vancouver billionaire Jim Pattison, who has a 15.1-per-cent stake.

"We are going to pursue the damages that we suffered," Westshore secretary Nick Desmarais said in an interview Friday.

While he declined to elaborate, Westshore filed documents this week in the Supreme Court of British Columbia to potentially recoup up to $26-million (U.S.) due to the trestle being smashed, the loss of Berth No. 1 for months and other damages. The defendants are Cape Apricot and its registered owner, Leo Ocean SA. The eight-year-old ship, which sails under the Panamanian flag, sustained minor scrapes.

The port operator, through Westshore Terminals LP, intends to recover damages from Leo Ocean and its insurance underwriter, the Japan Ship Owners' Mutual Protection & Indemnity Association, which has posted $26-million in security.

"The trestle provides the only land-based access to Berth No. 1 and carries, among other things, electrical cables, a coal conveyor belt and a roadway," said an affidavit signed by Glenn Dudar, operations manager at Westshore's port in Delta. Repairs to the severed causeway could take until late March to complete.

"Until the trestle is repaired, Westshore is unable to use Berth No. 1 to load coal," Mr. Dudar said.

One of Westshore's main customers is Vancouver-based Teck Resources Ltd., a major exporter of metallurgical coal, which is exported to Asian steel mills. Teck said it is still using Berth No. 2 and is also shifting some of its coal export shipments to Neptune Terminals in North Vancouver.

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"Access to the two berths at the terminal is in constant demand and, under normal circumstances, each berth is in nearly constant use loading coal onto vessels," Mr. Dudar said in his affidavit. He noted that other bulk carriers such as the Aqua Splendor experienced delays due to long waits at Berth No. 2.

Berth No. 1 recently loaded an average of 55,000 tons of coal daily, while Berth No. 2 loaded 45,000 tons a day. Despite having Berth No. 1 knocked out of commission, Westshore later allowed the Cape Apricot to load coal at Berth No. 2 and depart to its overseas destination, after the terminal obtained a letter of understanding from the Japan Ship Owners' group.

"The coal mines that ship coal to the terminal for shipment will also be suffering considerable loss once their trains get backed up by the terminal's inability to either store or ship that coal," Mr. Dudar cautioned.

In its statement of claim, Westshore alleges that the Cape Apricot "was navigated, managed and operated in a negligent manner, or in the alternative, in a grossly negligent manner by her owners, master, pilot and crew. As a result, the vessel collided with the terminal and, in particular, severed the trestle and knocked the components it carries into the sea."

Gary Wharton, a lawyer who represents the defendants, said none of the allegations have been proven in court. "A statement of defence will be filed in due course," he said in an interview. "The liability for the event has not been determined. The Transportation Safety Board of Canada is investigating the matter."

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