Harbour tugs working on the Australian coast usually operate under contractual terms incorporating the United Kingdom Standard Conditions for Towage. The Conditions purport to make the shipowner ultimately responsible for all liabilities however arising, and exempt the tug even where negligent.
On 19 April 2007, Helman J of the Queensland Supreme Court handed down his judgment in the matter of the "Pernas Arang"1.
Helman J held that a contract for harbour towage services was subject to a compulsorily implied warranty of "due care and skill" under section 74 of the Australian Trade Practices Act and that the relevant exclusion clauses were consequently void.
Section 74 does not imply a warranty of due care and skill into all contracts. Relevantly, it does not imply a warranty into contracts "for or in relation to the transportation … of goods" for (broadly) commercial purposes. Whether a contract for harbour towage is of that character, and thus whether the UK Conditions could survive an attack based on section 74, has long been a matter ofspeculation amongst Australian maritime lawyers and academics.
The Full Court of the Australian Federal Court considered the issue in 2005 in the "S.A. Fortius"2 but only in passing as it was not an issue strictly relevant to the case as decided. The Full Court thought a narrow view of what constituted a contract "in relation to the transportation of goods" was appropriate.
Helman J agreed, and held that a contract for harbour towage is not a contract for or in relation to the transportation of goods, paving the way for a finding against the tug in the circumstances of the case despite the UK Conditions.
As the appeal period has not yet expired detailed consideration of the case and its implications would be premature but the finding has the potential to have significant impact upon the liability of harbour tugs in Australia.
1 PNSL Berhad v Dalrymple Marine Services Pty Ltd and Ors. The finding is not yet reported or online, but should be available shortly on the Queensland Courts Website www.courts.qld.gov.au .
2 Braverus Maritime Inc. v. Port Kembla Coal Terminal Ltd & Anor (2005) 148 F.C.R. 68
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