The Chairman, Rui M. Fernandes

Good morning distinguished guests, ladies and gentlemen. Welcome to the 37th Annual Meeting of the Association of Average Adjusters of Canada.

This year as in the past we are fortunate to have distinguished guests at our Annual Meeting. I would like to welcome our distinguished guests and as I do so I would ask them to stand and be recognized:

Apologies for absence here today have been received from David Taylor, Chairman of the Average Adjusters Association of the United Kingdom, Raymond P. Hayden, President of The Maritime Law Association of the United States, Ikuya Fujii, Chairman, Association of Average Adjusters of Japan and Mr. Stefano Cavalo, Vice-President of the International Association of European Adjusters. As you may be aware, Mr. Hiide Lahaise, President of the European Association, who was at our Annual Meeting last year passed away suddenly this April. We have conveyed our condolences to his family.

Now, before I make any further comments, there is one formal matter which has to be addressed at this stage of the proceedings, the adoption of the Minutes of the last Annual Meeting which was held in Montreal on June 13, 2002. These Minutes were circulated and I would therefore make the following motion:

"That in accordance with the By-laws, the Minutes of the last Annual Meeting, having been examined and certified correct by the Executive Committee, now be confirmed."

May I have a seconder? Seconded by Mr. Ian Fraser. All in favour? Adopted unanimously by all present. Be it recorded that the Minutes of the 36^th Annual General Meeting held in Montreal on the 13^th of June, 2002 are adopted.

I had the honour of being elected Chairman of this Association on June 13, 2002. I wish to report to you on my official functions since accepting office.

I had the pleasure of representing this Association in mid October in New York at the Annual Meeting and black tie dinner of the Association of the Average Adjusters of the United States. The evening before my wife, Joni, and I, along with other guests, were entertained at the Sky Club in Manhattan by Mr. Howard McCormack and his charming wife, Patty. Unfortunately, Howard and Patty, who were planning to be here to join us today, were at the last minute unable to attend. My thanks to Howard and Patty for their hospitality.

Two weeks later Joni and I travelled to Japan to attend the Annual Meeting and dinner of the Association of Average Adjusters of Japan. Mr. Fujii, as you may recall, had been to our Association's function in Montreal the prior June and I was delighted to be able to reciprocate. I understand from Mr. Fujii that I was the first foreign chairman to attend in Japan for their Association’s meeting. The evening before the Annual Meeting Mr. Fujii and his wife Chizuko hosted the Chairman's dinner. Joni and I enjoyed fabulous French cuisine in a private dining room at the top of the Intercontinental Hotel with magnificent views of Tokyo. The following day I attended the Annual Meeting which was conducted in Japanese. One of the members of the Association kindly sat with me and provided continuous translation services. I wish to thank Mr. Fujii and his wife and the Japanese Association for their kindness.

One week after my arrival from Japan I travelled to New York to represent the Association at The Maritime Law Association of the United States’ Annual Meeting and black tie dinner. Mr. Raymond Hayden, President of the Association, hosted a luncheon on the Thursday before at the New York Yacht Club. The following day I attended the Annual Dinner at the Marriott Marquis. I thank Mr. Hayden and his Association for their welcome and hospitality.

Having travelled a number of miles in October representing the Association, I took a breather and practiced some law. My duties as Chairman continued this May when I represented the Association in England at the Association of Average Adjusters of the United Kingdom’s Annual Meeting and Dinner at The Savoy. The Meetings and Dinner were anything but average. Mr. Tim Madge, Chairman, The Association of Average Adjusters of the United Kingdom, and his wife entertained us and other guests at a private dinner at The Savoy. A lovely evening. The following day there was a panel of distinguished speakers commenting on the new All Risk Hull Clauses which have been introduced into the market. The Annual Dinner at The Savoy had as usual a bevy of amusing speakers each trying to outdo each other. I would like to thank Mr. Tim Madge and Mr. David Taylor, the current Chairman, who cannot be with us today because of another commitment.

As well, in May I attended the Canadian Board of Marine Underwriters Semi-Annual meeting at the Taboo Resort in Muskoka and represented the Association on the morning panel on global transportation in the future.

We move now to the next item on the agenda which is the subject of my address. This year I undertook to set up a website for our Association. It is up and running and for those of you wishing to look at it, the address is www.averageadjusterscanada.com. On the

website in the archives section sit all the annual reports of the Association since its formation in 1967. The reports include the yearly address of each chairman. It’s a wealth of knowledge about adjusting. In general the chairman, when a lawyer, talked about the law, and the adjusters spoke about the business. You'll all be glad to know I'm not going to review the law in the area and I'm also not qualified to talk to you about the business of adjusting. I have entitled my paper, "Current Developments in the move to change The York-Antwerp Rules and The Impact on General Average Adjusting: The Common Safety / Common Benefit Debate".

It is an amazing fact that nearly all of the papers I have read on general average commence with a history of general average. The authors of these papers will tell you that general average is an ancient form of spreading the risk of sea transport dating back to Rhodian law of 800 B.C. The authors never bother to explain who the Rhodians were. You are assumed to know who they were. Presumably they were the mariners from Rhodes. The Rhodians apparently borrowed their maritime laws from the Phoenicians. The last time I heard about the Phoenicians was in high school in the 60's in a history class taught by an old boring teacher. You can imagine what I can recall about the Phoenicians. I presume that the references to the Rhodians and the Phoenicians are supposed to paint the picture that the principles of average adjusting are very old.

In any event, the Rhodian Code was incorporated into Roman law and continued in the various laws of Mediterranean states. Supposedly the term "average" comes from the term "avere" used in the early Italian Sea Code of Pisa of 1160 which became "averia" in the Code of Genoa of 1341.

Skipping some centuries, in September 1864 the Third International General Average Congress took place in the City of York. Eleven Rules known as the "York Rules" were agreed upon with a recommendation that these Rules be introduced into bills of lading. A further conference was held Antwerp in 1877 where the York Rules were amended and thus became the York-Antwerp Rules ("Rules"). It appears that the 1877 Rules did not define general average but dealt with specific situations.

In 1906 the United Kingdom in its Marine Insurance Act defined a "General Average Act" as follows:

The Rules themselves were amended a number of times, the last time being in Sydney in 1994 at the meeting of the Comité Maritime Internationale ("CMI").

The Rules are not the subject of national statutes or international conventions. They are imposed by clauses in standard forms of contracts, principally bills of lading.

Between 1890 and 1990 the expenses for which a carrier could claim under general average were expanded. To many interests, specifically cargo underwriters, this expansion has gone too far. Let me backtrack a bit and explain why.

Under the original definition of general average loss there were five components necessary for its existence:

a) an extraordinary sacrifice or expenditure;

b) which is intentionally; and

c) reasonably made;

d) against the peril;

e) in order to benefit the common venture.

The definition found in the Marine Insurance Act of 1906 is paralleled in Rule A of the Rules as follows:

The expansion of the Rules since 1890 and the backlash against this expansion has centred on what is referred to by authors, such as Buglass, as artificial general average. Artificial general average is the granting of a claim for general average even when one of the five basic principles of general average found in Rule A of the Rules is not present. Remember that historically, claims for general average were for jettison of cargo, cutting away of the mast or cutting of anchor cables, or any acts carried out for the common safety in order to avoid imminent shipwrecks caused by a peril of the sea.

As Professor Tetley keeps expounding, the creation of artificial general average was part of the slow evolution favouring shipowners. In 1924 the Rules included lettered rules "A, B, C, D, E and F" which enunciated general principles and numbered rules which referred to particular cases and circumstances. In 1950, surprisingly, the Rule of Interpretation was adopted giving the numbered rules precedence over the lettered rules. The lettered rules were to be applied only where the numbered rules did not fully cover a particular case. In essence, as Professor Tetley has succinctly stated, "detail was placed before principle". As a result and for example, in certain cases the ship need not be in "peril" if claims are made under Rules X (b) and XI (b).

The result of the expansion is that four of the five basic principles of general average enunciated in Rule A have no affect if a lettered rule contradicts any one of them. Reasonableness of the General Average Act is the only Rule A principle left untouched.

In 1991 the United Nations Conference on Trade and Development ("UNCTAD") through its Committee on Shipping and the Working Group on International Shipping Legislation, produced a report "General Average - A Preliminary Review". UNCTAD considered various issues, including the abolishment of general average, simplifying and reducing it or abolishment of contribution in selected instances. UNCTAD approached the CMI to consider general average at its next conference. The CMI constituted an International Subcommittee to review general average under the Rules. A questionnaire was sent out to all interested parties. The CMI reported, prior to the conference in Sydney in October 1994, that the responses to the questionnaire indicated a serious interest in the continuation of efforts to update, simplify and improve the rules to take into account present day circumstances. The general tenor of the report gave no support for any tendency to extend the scope of general average. At the same time, the International Union of Marine Insurers ("IUMI") had put forward proposals for the radical reform of general average based on a change of principle to exclude from general average allowances based on "common benefit", so that only allowances based on "common safety" were retained. At the CMI conference in Sydney in 1994 there was a thorough revision and extensive re-wording of the Rules to exclude any possibility of allowances in general average for pollution liabilities.

The existing scope of what could and could not give rise to general average, however, was not otherwise altered in any significant way.

After the CMI conference in 1994 in Sydney, IUMI continued its attack on the existing Rules. In meetings in Oslo in 1996 and in Berlin in 1998, IUMI continued to push for changes to general average. As a result, at its colloquium in Toledo in 2000, the CMI listened to the IUMI concerns and its request to put general average on the front burner.

At Toledo, papers were presented by an underwriter and by an average adjuster whose main thrust was respectively for and against the amendment of the Rules along the lines proposed by IUMI. A lively debate ensued at the conclusion of which the consensus emerged that this was a subject which should be included on the work program of the 2001 CMI conference in Singapore. At the CMI conference held in Singapore in February 2001, another lively debate took place as to whether further work should be done by CMI on the IUMI proposals. The majority view was that the concerns expressed by IUMI and its supporters were of sufficient importance to justify further work by the CMI. This view was adopted by the conference.

A steering committee, under the chairmanship of Dr. Frank Wiswall from the U.S., Vice-President of CMI, was constituted to analyze the list of topics included in the IUMI report of 1998 and to identify those which merited further study. It was decided that the topics which should be considered by this working group were: point of refuge expenses, absorption clauses, salvage claims, interest, commission, temporary repairs, to let liability lie where it falls in the sacrifices of property, time bar and "substituted expenses". Topics excluded were: ballast general average, deductible clauses, error in management exclusions, reversal of the 1994 Rule 11(d) compromise, exclusion of adjusters’ fees and other miscellaneous matters raised by the IUMI report.

The report by the CMI working group on general average was issued on the 7^th of March of this year. This report will be the basic working document of the International Subcommittee of the CMI which will meet in Bordeaux on the 11^th of June, 2003 to deal with the proposals for amendments of the Rules. Final deliberations, and, perhaps, decisions will be made at the Vancouver conference of the CMI in June, 2004.

Let us now look at the changes proposed by IUMI and the analysis conducted by the CMI working group on general average in its report of March, 2003. Now that insurance is so very much and more universally held by shipowners, IUMI believes that losses should lie where they fall to a greater extent than at present. IUMI feels the current concept of general average is outdated. IUMI recognizes that there is an argument for continuing general average in certain limited situations and that it would be difficult to abolish general average altogether because the worldwide maritime community is not yet "ready" for such a novel step.

The principal theme running through the IUMI proposals is that the emphasis of general average should be common safety rather than common peril. Expenses and sacrifices would only be admissible if they were made or incurred while ship and cargo are "in the grip of a peril". IUMI has suggested that the peril should only continue until the ship and cargo are in a condition of reasonable safety.

Presently, certain expenditures which are not incurred for common safety are admitted in general average in accordance with Rules X(b) and (c). Such expenditures are admitted if they relate to repairs which "were necessary for the safe prosecution of the voyage". This is often expressed as expenditures incurred for "the common benefit" as opposed to expenditures incurred for the "common safety". Let me give you some examples:

The March 2003 report of the working group sets out the arguments for and against excluding common benefit expenses.

The arguments for excluding common benefit expenses include:

1. If the Rules are not amended, some insurers have said that there is a risk that the present cover on cargo for general average contributions will be restricted.

2. General average is seen to be unnecessary, expensive and an unjust way of dealing with marine casualties. Statistics provided by IUMI show that general average claims cost insurers $300M U.S. per year of which 10% is made up of adjustment costs and a further 10% is interest on commission. Eighty percent of the cases are acknowledged as or considered likely to have been caused by the fault of those on the ship and/or the ship owner. However, 60% to 65% of the total cost of claims is born by cargo interests. In short, the current system does not "work" in the eyes of many in the market, not just the underwriters but also the owners who increasingly resort to absorption clauses to avoid declaring general average.

3. The adjustment of claims is a time-consuming process. According to IUMI it takes seven years to reach a level of completion of adjustments of 95%. Only two-thirds of the adjustments are produced within two years following the declaration of general average.

4. Any "new" liabilities imposed on shipowners as a result of changes will be covered by insurance products currently available to shipowners.

5. The Rules have been misused by certain shipowners to obtain unfair pecuniary advantage. In particular:

a) allowing wages in general average while bearing up to and in a port of refuge is seen as an encouragement to unscrupulous shipowners to declare general average for simple repairs;

b) allowing some port of refuge expenses is seen as a reward to owners of substandard ships for failing to maintain their vessels;

c) many examples of cases have been given in which the owners have used general average as an excuse to demand money on account to continue the voyage rather than waiting to deliver the cargo, obtain security and rely on an adjustment. This affords owners of unseaworthy vessels an opportunity to obtain funds from cargo interests to which legally they may not be entitled.

6. Putting into a port of refuge is just another contingency for which Owners should allow in their voyage calculations or against which they can insure.

7. Many of the expenses such as wages and fuel will have to be paid by the owner anyway. Accordingly, there is no good reason why he should recover them unless perhaps ship and cargo are in the grip of a peril.

The arguments for retaining a common benefit principle include the following:

1. The general philosophy of cooperation which underlines general average encourages the parties to incur the expenditure necessary to ensure that the ship and cargo reach their ultimate destination. If this distribution of expenses were not regulated by the common benefit rules, the parties would, after the emergency has incurred, often have to resort to individual agreements about the distribution of outlays and expenses such as particular cargo handling.

2. The effect of the Rules as presently drafted is that cases move seamlessly from common safety to common benefit thus reflecting the reality of many casualty situations which do not fall neatly into defined stages. By retaining common benefit one is thereby avoiding a significant area of dispute.

3. The introduction of new rules will run the risk of their leading to litigation regarding their interpretation, thus resulting in increased costs.

4. The abolition or restriction of the common benefit principle would put the uniformity and the universal acceptance of the Rules in danger and might lead to a variety of new bills of lading and charter party clauses. Presently, adjusters estimate that 60% of the cases under adjustment in 2002 involve contracts of carriage which incorporate the Rules of 1974.

5. The introduction of the Rule Paramount in the York-Antwerp Rules of 1994 with the express requirement of "reasonableness" may eliminate cases of misuse involving substandard ships.

6. Common benefit expenses enable cargo to be brought to destination much more quickly than would otherwise be the case.

7. If common benefit expenses such as cargo handling are no longer dealt with as general average, many of them will fall on the shipowner and, in some instances, on the hull insurers.

8. Removal of common benefit expenses will see an increase in the cases of cargo being left at ports of refuge and/or in legal disputes seeking to contest this outcome.

9. Many of the costs removed from the general average under the IUMI proposals will fall on other insurers such as trans-shipment expenses, crew wages and port charges.

10. In some cases it is difficult to distinguish between expenses or sacrifices for common safety and those for common benefit. For example, in some cases a ship that has been on fire at sea may have cargo that continues to smolder or pose a threat even after being brought into a port of refuge. Some part of the discharging may still be for the common safety whilst other elements of cargo are removed to effect repairs (common benefit). The current rules usually render it unnecessary to make these difficult distinctions between cargo that is taken off to recondition sacrifice or accidental damage or a combination of both.

The working group report of March, 2003 of the CMI also includes a report on other areas. These include:

1. Consideration of specific types of expenses.

2. Redistribution of salvage charges.

3. Time bar (prescription).

4. Interest.

5. Commission.

6. Absorption clauses.

There is no doubt that the International Subcommittee of the CMI working on general average has its work cut out for next month. It will be interesting to see if it comes up with any concrete recommendations for changes to the Rules.

What is the impact on the industry? One can only guess. Certainly the following will hold true:

1. Average adjusters will still have adjustments to make for a number of years. If in fact the Rules are changed to eliminate common benefit, there will be three regimes that will have to dealt with. Given that, as of last year, 60% of bills of lading incorporate the 1974 Rules, we can expect that in the next ten years adjusters will be looking at bills of lading that can be subject to the 1974 Rules, the 1994 Rules or the 2004 Rules.

2. Lawyers will be happy. Lawyers are always happy when there are changes. Change brings litigation. Change brings work. Change brings fees.

3. Cargo underwriters may be happy in the short term but those same cargo underwriters probably also write hull, property and liability insurance and will also likely be asked to write the risks that will be shifted from general average to the shipowner. P&I Clubs may find increased pressure to cover additional risks.

4. Substandard shipowners will be unhappy.

5. Good ship operators will not care or will be happy. Their risk managers will be busier trying to find new insurance products to cover the common benefit costs.

6. Marine surveyors and other "experts" will be happy. Their services will be required to determine where common safety ends and where common benefits begin.

7. Law students and judges will be as confused as ever.

8. And, lastly, the man on the street won't give a damn.

I would like to end with a quotation from Henri Poincaré.

Thank you for your patience.

The floor is now open for comments.

Mr. Chairman and members of the Canadian Association, I bring you greetings and best wishes from all of the membership of the Association of Average Adjusters of the United States. Rui, I want to thank you and Joni for a great evening at the Yacht Club last night. I wish to congratulate you on your speech which certainly covered the full history of general average. I found myself remembering my early studies of general average while reading the excellent work by Buglass. You referred to Roman law in your paper. I believe the earliest recording of jettison are attributed to the Romans. I find it interesting to note that the cargo jettisoned was casks of wine. I imagine if that were to happen today, the lawyers for cargo underwriters would deny contribution in general average insisting the crew was intoxicated and therefore the ship was unseaworthy and furthermore the sole purpose for the jettison was disposal of the evidence. Lastly, my sincere congratulations on your election to an additional year as Chairman.

^{Sean Harrington, President, Canadian Maritime Law Association:}

^{Rui, I wish to thank you and Joni for a magnificent Chairman’s dinner last night. You were wonderful hosts. Everything was perfect save for the weather.}

^{We are delighted that you have worked so closely over the years with the Association of Average Adjusters, which is a constituent member of the Maritime Law Association, and it is the CMI which is the custodian of the Rules. So, Vincent Prager and I are off to Bordeaux next week, where general average will be reconsidered. I must say I hold a bias against the proposition, being part of the drafting committee with Geoffrey Hudson which turned out the York Antwerp Rules 1994 and the Clause Paramount of Reasonableness. And I don’t know that statistics really have developed yet as to whether or not that clause has an effect on reducing the abuses that certainly can exist in a declaration of general average. I think general average has a fatal attraction. At least for me, this whole concept of people sharing in the losses and the expenses incurred in the grip of a casualty. Some of the Rules will probably have to be reconsidered. I think that some of statistics that we hear can be questioned. It may well be true that, for the most part, the shipowner is a creditor of the general average, having incurred the expense in the first place. But there are still adjustments whereby the shipowner is the debtor. There are some in this room, for example, who are familiar with the recent adjustment where it is the shipowner who has been called upon to contribute.}

^{I share your concern that if the Rules are changed substantially that work would be created for the lawyers, because losses do not necessarily fall where they lie. There are a number of other ancient concepts out there such as special charges on cargo. That was kicked around in the Federal Court a few years ago. In that particular case, the court said the expenses incurred were not special charges. In fact, that concept is still out there. Our Association has been a bit ambivalent on the IUMI and the CMI reports. Not that we are disinterested. I think on the contrary there are passionate views on both sides of this argument of the common safety and the common peril. So if you want to hear more, our Annual General Meeting is tomorrow at 9:30 at the Badminton and Racquet Club and I hope to see you there. We have also put out some postcards to remind me of the CMI conference in Vancouver at the beginning of June next year and we hope to see you there.}

^{John O'Connor, Association Of the Maritime Arbitrators of Canada:}

^{Rui, I would just like to say a word on behalf of the Association of the Maritime Arbitrators of Canada - John Weale is the President - and I spoke with him earlier this week. He could not be here today. He had planned to come. He asked me to just say a few words of thanks on behalf of that Association. He asked me to be humorous which I am not going to be, because he was suggesting that I would have made some joke about the Association but any joke about this Association could reflect on John Weale's own Association. I think so. It would be probably best to be sober at such a time.}

^{Thank you for the speech. I thought it was very interesting. As you know, I teach introductory general average myself. It is a very interesting, historical subject. I’m glad you went through it with us. Personally, I feel that I was hoping that it would not be on the agenda for the CMI conference in Vancouver next year. I think by teaching the Rules, one realizes how they’ve been - I wouldn’t say tampered with but it is sort of piecemeal changes - that they have made over the years and we had just made some important changes with Sydney. I thought that was a success. I was there. It wasn’t a success because I was there but I was there with Sean’s team.}

^{I think we need a little time to see how that’s going to play out before we start changing again. If we change, it will be 2004. This idea of having the 1974 rules and the 1994 rules is already problematic. One of the problems is the pollution side and being the chairman of the pollution committee I am often asked whether the incorporation of the 1974 Rules would make the cleanup part of general average? It was excluded in 1994. It was not excluded in 1974 and I think this is a problem. The P& I Clubs are on side for 1994 and have written to their members saying that, if they don’t incorporate the 1994 Rules, they would only be covered as if they had. Whatever that means. So it’s already confusing and if we had a set of 2004 Rules it would be, to my mind, just be adding to the confusion as you pointed out. That’s only a personal opinion. I feel that it is too early, and I was hoping that it wouldn’t be on the agenda. It is not a subject of great passion to such an extent that we would need it to draw people to Vancouver in my opinion. But if it is on the agenda, we will see what happens.}

^{Thank you very much for the speech. It was enlightening. I think that it is always interesting to touch on the historical side and I thought it was very interesting. Thank you.}

^{Michael Wills, President, Canadian Board of Marine Underwriters:}

^{Thank you Mr. Chairman. I echo Sean’s comments. Thank you for your hospitality last night. Joni and yourself put on a very nice evening for us and I got a free dinner for my wife - it was perfect.}

^{I will also touch on a little bit of what Rui talked about at the Canadian Board of Marine Underwriters meeting two weeks ago up at Muskoka. We spent a good part of the day, or pretty much the whole day, talking about the future of our Association and Rui was there. The Chairman was there to represent the Adjusters Association. Sean Harrington represented the CMLA. We had a number of distinguished guests from other parts of the industry. Freight forwarders, insurance brokers and Jim Craig from the Association of the Marine Insurers from the United States. We had a very good hour and a half session. Rui was asked to do a half hour but it turned into an hour, and then an hour and a half. That’s the way we get you at the end.}

^{The Chairman, Rui Fernandes:}

^{"Lawyers always find an opportunity."}

^{President, CBMU, Michael Wills:}

^{Yes, you could charge us by the hour."}

^{The Chairman, Rui Fernandes:}

^{"Minute rates are now permitted."}

^{President, CBMU, Michael Wills:}

^{Okay I will stretch this out but it actually sets the scene for a spectacular day because we spent an hour and a half talking about the future of transportation and all of this rumour involving transportation some way or another. We wanted to put and set the scene and get a thought process going how we as a Canadian Board of Underwriters need to be prepared for the future. We actually spent that hour and a half and in the afternoon had a number of great workshops put on by some very great experts in the industry. And then to finish off the session, we did a bit of a look at the good things and the bad things in our Association. Good in being things that we do very well and some of the things that we don’t do very well. Then we also looked at some other threats to our Association. Not just to our business but to our Association if we don’t make some changes. And we had some extremely good ideas come out of the hour and one half session that we had three workshops and say that we brought back in the theme of the morning.}

^{I will just highlight three of the top ones that we will be working on in the next six months. For the rest of the year, we came up with three. We did write them down, I haven’t forgot about it, because they are extremely important and exciting. You know what, I probably left it in the office. No I didn’t - yes that’s right, no such luck. I came up with three things. One of the threats that we have identified is a lack of participation of the Association. I say that because we have a lot of hardworking people who have been doing this work for the Association and for the marine insurance industry for years. But we need to be able to expand that, and bring a broader participation to different levels of the Board. So, we are going to look at areas before we can better represent the entire industry. I will not go into all of those details but some of the things we have talked about was bringing more unison working together with the CMLA and the Adjusters Association. On some common issues that we have like education and information sharing; that’s what Rui and I talked about earlier, Sean and some of the other Associations around closely involved in transportation and the maritime industries so, that’s going to be pretty exciting.}

^{The second one was bringing value to the whole marine insurance industry. Coming close to my term as President, one of the things that I really want to do is deliver value for people that pay their membership so they could get something out of that. Lots of ideas came out on how to actually do that. Really, the first question was "What is the value?" I have talked to a number of people in the workshops; one person has a different value than another - so really just trying to represent the membership much better - we have some ideas. Some of the things we came up with was let’s prioritize the things we need to do. Put some funds towards those and make sure to spend the money wisely so we have some value around that.}

^{The third thing was - which was brought to us actually by a lawyer - what you should try to do to attract more people and more resources to your industry, is actually creating a business plan. Creating a plan on what sort of opportunities there are in this sort of industry, what resources you need, what sort of actions you have to do to make this happen. So we could actually create a business plan for the marine insurance industry in Canada. That’s going to be pretty exciting. We do not know what it’s going to look like yet but we are really excited about that. It was a really good session. I am going to go back to the last session that we had in the morning right after the panel discussion. We actually spent an hour talking about the successes we’ve had in some of the committee work. And we have seven committees within the CBMU which are extremely hardworking. Lots of good information, lots of good activities and we actually have over 45 initiatives on the go right now of things that we are working on. It’s really amazing when you start to summarize what you’re actually involved in. That was a bit of a pat on the back to our committee members and then we had a real good session regarding the launch of our new website. Rui just mentioned your new website. We really, really worked hard on this for the past 15 months. It’s a good communication vehicle, a tool where our people, our members go to, to make them better professionals so on and so forth. It’s www.cbmu.com. It’s still in the infancy stage. It’s much easier to use. Much more information and links to everywhere. It’s evolving and the key, obviously, we have identified is to get people to contribute. So that’s what we’re going to do. So we got lots of good ideas.}

^{Thank you Mr. Chairman. Excellent venue for the meeting. I thought we could take this baby for a spin.}

^{George Strathy:}

^{Rui, I just wanted to say that I enjoyed your speech tremendously. I look forward to reading it. But what I wanted to say is that I think you left a terrific legacy in the website - in doing that work to create the website. There is a great richness in the Chairmens’ speeches over the years and a great wealth of knowledge and information and to have those accessible not only by the membership, but by other means I think it’s a fantastic resource to use and I certainly hope the Association continues to maintain the website. So kudos to you for taking on that task and thank you from all of us.}

^{The Chairman, Rui Fernandes:}

^{Thank you George. One comment about that is that if you have any papers that deal with our Association or average adjusting and you have no problem with us posting it, please let us have them. I know that in our archive section many of you have written articles and given speeches on certain topics, I think they should be available to members and on the website.}

Sorry we do have our website that has been up for seven years. It’s www.usaverageadjusters.org

Mr. Chairman, ladies and gentlemen, good morning.

Nominating Committee, which is composed of Bill Kyle, Tim Stradling and myself would make the following nominations for the election to the Association for the committees for 2003 —2004. Chairman is Rui Fernandes. Now, out of the context of this short nominating committee’s report, I would like to add that we changed our bylaws last year. This allows us and the outgoing Chairman to serve a second year if all are in agreement and all have been in agreement. I would just like to say congratulations again for a second year first time.

Executive Committee:

Rules of Practice Committee:

Membership Committee:

Advisory Committee: John Cantello

Thank you and respectfully submitted Mr. Chairman.

The Chairman, Rui Fernandes:

Thank you Tony and I had a great year. I had a lot of fun, met a lot of new people and I look forward to representing the Association this coming year. It’s going to be exciting. I now call upon Mr. Gesner who will provide the Membership Committee report.

Maurice Gesner:

Thank you Mr. Chairman, ladies and gentlemen. Good morning. Tim Stradling is the Chairman of the Membership Committee and regretfully could not make it. He sends his regrets. So it is my pleasure to read his report.

It has been my pleasure to act as Chairman of the Membership Committee for 2002 - 2003. No examinations for full membership were held this year. However, both Linda Erwin and Adam Rolland have indicated that it is their intention to sit the examinations for full membership in the fall of 2003. I therefore ask the incoming committee to follow up with Linda and Adam and make the appropriate arrangements.

Ms. Shelley Chapelski Bromley Chapelski, Vancouver

Ms Michelle Jones Allianz Canada, Vancouver

Mr. Peter Swanson Bernard & Partners, Vancouver

Mr. Frederic Scalabrini Marsh Canada, Montreal

Mr. Murray Smith Campney & Murphy, Vancouver

Mr. Roland Paxton Crawford Adjusters, Toronto

The total membership of the Association including the members elected above is as follows:

Respectfully submitted, Ron Eldridge, Maurice Gesner, Tim Stradling, Chairman.

Rui Fernandes: Thank you. I have two items in the Other Business to deal with.

Professor William Tetley has advised he could not be here today. He has asked that we deal with two issues at this meeting. Firstly, it is his request that we consider his suggestion that the Association hold open meetings on important subjects throughout the year. In reply, I can advise that the Executive meeting has considered this and has given the green light for a fall seminar on a topic or topics appropriate to this organization.