Australia: Shipping News - February 2013

CBP News

At the Comité Maritime International (CMI) Conference in Beijing in October 2012, Stuart Hetherington was appointed President of this prestigious organisation, which was founded in Antwerp in 1897 and drafted many of the Conventions in the maritime area, including Collision, Limitation, Hague Rules, Salvage, Arrest, Liens and Mortgages and many more.

The Maritime Law Association of Australia and New Zealand Annual Conference

The annual conference was held in Brisbane on 12-14 September 2012. The following papers were given:

FS Dethridge Memorial Address: Ron Salter

Navigating the Reef: Simon Meyjes (CEO, Australian Reef Pilots), Brad Groves (General Manager, AMSA - Maritime Standards Division) and Steve Raaymakers (EcoStrategic Consultants)

Salvage and GA - Jonathan Spencer

The Australian Year in Arbitration - Peter McQueen

Collision Evidence in the E-Age - Captain Peter Listrup and the Hon Justice James Allsop

Crime and the Cruise Liner Industry - Kate Lewins

An Overview of the Maritime Powers Bill - Commander Ian Campbell RAN

The Asian Year in Review - Kah Wah Leong

The UK Year in Review - Chris Edwards

"The Rena" - Kate Manch (Director, Maritime NZ), Neil Beadle and Pauline Barratt

Shipping Reforms and Industrial Issues in Shipping - Ian Maitland, Angela Gillham, Sarah Cerche and Captain Dale Cole

The Australian Year in Review - Sandy Thompson SC

The New Zealand Year in Review - Kerryn Webster

Offshore Oil, Gas & Mining - Mick Palmer, Shane Bosma, Wylie Spicer QC and Paul David

CMI Issues - Greg Nell SC, Michelle Taylor and Sarah Derrington

Copies of the papers can be obtained from MLAANZ.

Matthew Harvey was appointed to succeed Sarah Derrington as President of MLAANZ.

Maritime conventions

P&I Club renewals 2013

Early reports suggest that the Clubs' reinsurers are seeking significant rises in premiums following the major casualties of the "Costa Concordia" and "Rena", giving rise to substantial wreck removal and SCOPIC claims. The individual Club retention is to be increased from US$8 million to US$9 million, and the International Group Pool is to be increased from US$60 million to US$70 million.

NSW Supreme Court decisions

Pacific Resources International Pty Ltd v UTI (Aust) Pty Ltd; Brackley Industries Pty Ltd v UTI (Aust) Pty Ltd [2012] NSWSC 1274, Stevenson J.
In these two bailment cases, which were heard together, in which goods stored in a warehouse had been destroyed in a fire, Stevenson J held in the NSW Supreme Court that the lessee did not establish that it had acted with reasonable care in cleaning up fish oil which had spilled in the warehouse 12 days before the fire and could not rely on its terms and conditions.

As against one plaintiff, Stevenson J found that the terms and conditions of the warehouse operator bound the plaintiff, but he did not make such a finding against the other plaintiff, because the terms and conditions had not been adequately brought to the attention of the goods owner and so incorporated into the contract and also by reason of promissory estoppel - created by reason of prior conduct by the operator of the warehouse in not relying on the terms and conditions in response to earlier claims made by the plaintiff.

His Honour also found that the warehouse keeper had engaged in misleading and deceptive conduct in representing that it did not store combustible goods, that it complied with all relevant contractual, statutory and regulatory conditions for the storage of goods and that it was permitted under the terms of its lease to store fish oil (in the case of one plaintiff) and CD and DVD cases (in respect of the other plaintiff).

Ashjal Pty Ltd v Alfred Toepfer International (Australia) Pty Ltd [2012] NSWSC 1306, Stevenson J.

Stevenson J held in the Supreme Court of NSW that sections 5, 34, 35 and 36 of the Commercial Arbitration Act 2010 (which replicate provisions of the UNCITRAL Model Law on International Arbitration and limit the circumstances in which the Court can intervene in arbitral proceedings) were not beyond the legislative power of the NSW Parliament. (For more information about this case please see our earlier article New Commercial Arbitration Act survives constitutional challenge.)

Rian Lane v Dive Two Pty Ltd [2012] NSWSC 104

This case involved a claim for damages for personal injuries suffered by the plaintiff when the boat, owned by the defendant Dive Two Pty Ltd and driven by Mr Todd, collided with the boat on which the plaintiff was fishing. The plaintiff's claim against the defendants was settled during the course of the hearing but the trial proceeded on the cross-claim brought against the insurers of the defendants, Liberty, and the defendant's broker Horsell.

Adamson J held that as the boat was engaged in recreational activities when the accident occurred and they were not in connection with the "Insured's Business" (as contemplated by the Insuring clause and defined in the policy), the insurers were not liable.

Although it did not affect the outcome, Her Honour did find against the insurers on the proper interpretation of the exclusion in the policy relating to "criminal acts". Although the defendant had been found guilty of dangerous navigation under section 52B(3)(b) of the Crimes Act, she held that the exclusion required the commission of an intentional act.

The insurance broker was found liable in failing to alert the insured to the fact that the policy would not cover all activities on the boat.

Federal Court decisions

Atlasnavios Navegacao, LDA V The Ship "Xin TaiHai" (No 2)[2012] FCA 1497. (24 December 2012)

Please see our earlier article Duty of disclosure when seeking the arrest of a ship.

Daebo Shipping Co Ltd v The Ship Go Star [2012] FCAFC 156 (7 November 2012).

Please see our earlier article Rights of a vessel owner in relation to bunkers and sub time charter hire.

New Zealand High Court

Svitzer Salvage BV v Z Energy Limited and Sea Fuels Limited [2012] NZHC 1650, Associate Judge Gendall, 20 July 2012.

This case arose from the "Rena" casualty off the coast of New Zealand in October 2011. Svitzer Salvage BV (Svitzer) entered into a charter of the "Awanuia", a purpose built bunker tanker owned by Sea Fuels Ltd (Sea Fuels) which was then on a long term charter to Z Energy Limited (Z Energy). With Z Energy's permission Svitzer entered into a short term charter with Sea Fuels.

Svitzer commenced proceedings in the High Court of New Zealand to have that charter set aside on the bases of duress and under the Salvage Convention 1989 to which NZ is a party. The present action was, effectively, a strike out action by the owners. The action was unsuccessful. The proceedings are ongoing and will be reported on in a future edition of Shipping News.

Babcock Fitzroy v M/V Southern Pasifika [2012] 2 Lloyds Rep 423.

Justice Priestley in the High Court of New Zealand held in this case that a ship repairer holding a possessory lien in respect of unpaid fees did not lose its priority (as against the mortgagee) when it ceased to have possession of the ship when it sought to recover the fees due to it by commencing an admiralty action and obtaining an order for the arrest and then sale of the vessel.

US Supreme Court

Lozman v City of Riviera Beach, Florida No11-626, 15 January 2013.

A house is not ... a vessel - so decided the US Supreme Court on 15 January when overruling both the first instance and appellate courts on the basis that it was not capable of being used as a means of transportation on water. The issue was whether a floating home, described as a "house like plywood structure with empty bilge space" was a vessel under the Rules of Construction Act, thus justifying proceedings taken by the City of Riviera Beach in admiralty for dockage fees and damages for trespass.

The fact that it had been towed and floated was not relevant. It had no rudder or other steering mechanism and no ability to propel itself. The broad interpretation favoured by the Lower Courts was held to be too broad. As was said in the opinion of the Court:

"Not every floating structure is a "vessel". To state the obvious, a wooden washtub, a plastic dishpan, a swimming platform or pontoon, a large fishing net, a door taken off its hinges or Pinocchio (when inside the whale) are not "vessels" even if they are "artificial contrivances" capable of floating, moving under tow, and incidentally carrying even a fair-sized item or two when they do so, rather the Statute (Rules of Construction Act (1 USC 3)) applies to an "artificial contrivance ... capable of being used ... as a means of transportation on water".

Federal Court of Canada decision

Canada Moon Shipping Co Ltd and Fednav International Ltd and Companhia Siderurgica Paulista-Cosipa and T.Co. Metals LLC.

Reasons for Judgment by Johanne Gauthier JA; concurred in by Pelletier JA and Mainville JA.

Federal Court Judge Johanne Gauthier (Vice-President of the CMI) has delivered a judgment reaching a different conclusion on similar but not identical Canadian legislation as Justice Foster considered in the Federal Court of Australia last year. (Please see our earlier article Foreign arbitration clauses in voyage charter parties held not to be effective.) Justice Foster's decision is under appeal and is to be heard in the Full Federal Court in February. We will report the result in a subsequent issue of Shipping News.

The issue in the Canadian case was the effect to be given to an arbitration clause in a voyage charter party where the charterer was being sued by the shipowner and the time charterer in third party proceedings and the main proceedings had been brought by the holder and endorsee of the bills of lading for damage to cargo. Unlike the factual scenario in the Australian case (in which it was the cargo owner resisting having a dispute referred to arbitration, pursuant to a clause in the Voyage CIP which it had entered into with the shipowner), the Canadian case involved a voyage charterer from a time charterer seeking to resist being sued in third party court proceedings by the shipowner and time charterer, who were themselves being sued by the cargo owner.

The shipowner and time charterer had not sought to stop the cargo owner's proceedings against them in reliance on the arbitration clause in the voyage charter party which had been incorporated into the bills of lading. Subsection 46(1) of the Marine Liability Act SC 2001 in Canada provides that a claimant may commence proceedings in Canada "If a contract of carriage of goods by water to which the Hamburg Rules do not apply provides for the adjudication or arbitration of claims arising in a place other than Canada...".

The Court held that the voyage charterer was entitled to a stay of the proceedings brought against it by the time charterer (the voyage charter not being a document covered by section 46) but was not entitled to a stay of the proceedings brought by the shipowner against it.

UK Court decisions

Osmium Shipping Corporation v Cargill International SA (The "Captain Stefanos") [2012] 2 Lloyds Rep. 46.

The question was whether "capture/seizure" in an amended NYPE46 charter party had to be by a legally constituted authority or could include pirates in order to constitute an off-hire event. Under an NYPE (1946) charter, which contained an amended off-hire clause which suspended hire when time was lost by reason of, inter alia, "capture/seizure, or detention or threatened detention by any authority...".

It was held by Cooke J in the High Court of England that piracy was an off-hire event and the words capture/seizure were not qualified by the words "...any authority".

Sealion Shipping Ltd & Anor v Valiant Insurance Company "The Toisa Pisces" [2012] 1 Lloyds Rep 252.

The Court had to decide whether simple negligence by an owner's technical manager amounted to a want of due diligence under the Inchmaree clause in a hull cover, precluding owners from recovery. Blair J held that mere negligence (or a want of reasonable care) was sufficient to amount to an absence of due diligence, although the insured succeeded as it was found that the manager's actions did not amount to negligence.

Golden Ocean v Salgaocar [2012] 1 Lloyds Rep 542.

The English Court of Appeal held in the context of charter party negotiations that a string of emails could constitute a contract of guarantee, although it was unsigned and merely contained the name of the charterer's broker. The final email was "signed" for the purposes of the Statute of Frauds. It contained the name of "Guy", indicating that it was sent by a Mr Hindley. An electronic signature was sufficient and a first name, initials or nickname would suffice.

Stuart Hetherington
Trade and transport
Colin Biggers & Paisley

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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