Transport insurance plus PORT LIABILITY ISSUES ARISING FROM BERTH/SHIP DAMAGE MIG/MLAANZ Lunchtime...

transport insurance plus

PORT LIABILITY ISSUES ARISING FROM BERTH/SHIP DAMAGE

MIG/MLAANZ Lunchtime seminar series 28 March 2007


Introduction 1

Recent cases : Recent cases : (‘Tai ping’, ‘Mellum’, ‘Pactrader’)(‘Tai ping’, ‘Mellum’, ‘Pactrader’)

‘‘Jody F Millennium’ at Gisborne,Jody F Millennium’ at Gisborne,

‘‘Amarantos’ at WallarooAmarantos’ at Wallaroo

‘‘SA Fortius’ at Port KemblaSA Fortius’ at Port Kembla


Introduction 2

Common themes:-Common themes:-

operational:operational: pilot error, failure of communication (BRM), pilot error, failure of communication (BRM),

insufficient tug power, vessel size.insufficient tug power, vessel size.

liability:liability: inventive legal argument, significant inventive legal argument, significant

claims figures, extensive legal billsclaims figures, extensive legal bills


Jody F Millennium


Amarantos


Amarantos – chart 4 4


Amarantos – propeller 5


Amarantos - facts 6

Panamax, one the largest to call at that port.

ATSB report conclusions on how it happened:

Transverse thrust of the propeller ‘negated’:

- windage/wind direction;

- draft and trim – propeller partly out of the

water;

- limited under keel clearance.


Amarantos – facts 7

Lack of communication by crew of:

- vessel handling characteristics;

- speed of approach;

- distances from wharf.

Insufficient tug power.

Speed of approach of vessel too fast.


Amarantos legal argument 8

Claim by the ship against the port for an indemnity.

Negligence – breach of duty of care by the port:

‘under powered tugs’;

‘failed to warn that port was of insufficient depth and size’;

‘failed to carry out proper risk analysis’.


Amarantos legal argument 9 88

TRADE PRACTICES ACT 1974 - SECT 52

Misleading or deceptive conduct

(1) ‘A corporation shall not, in trade or commerce, engage in conduct

that is misleading or deceptive or is likely to mislead or deceive.’


Amarantos legal argument 10 1011

Misleading and deceptive conduct by the port:

- that its harbour facilities were suitable for panamax vessels;

express representation;

implied representation.


Amarantos legal 11

Misleading and deceptive conduct by the pilot:

- ‘as servant or agent’ of the port;

- to the master on board the vessel;

- as to the qualities of the port.


Amarantos legal 12

Port’s Defences:

- not negligent;

- section 36 Harbours & Navigation Act;

- section 24 of Ports Corporatisation Act;

- section 410B Navigation Act;

- ’Oceanic Crest’;


Amarantos – legal 13

Claimants:

- Noble Grain;

- Ausbulk, (repair to the grain loader, economic loss;)

- Barley Board, Wheat Board;

- Centre State Exports;

- Pea farmers.

A$5million plus interest and costs


SA Fortius 14


SA Fortius – facts 15

Capesized.

Part cargo of coal from Newcastle, topping-off at Port Kembla.

Pilot on board, took vessel in, to inner-harbour.

Vessel to swing 230 degrees to starboard, in inner harbour, to berth.

Ship struck the berth/coal loader at right angles.


SA Fortius – chart 16


SA Fortius – damage 17


SA Fortius – damage 18

Claim by the ship against the port for an indemnity for:

temporary repairs – A$2million

relocation of coal loader - A$1.5million

repair to coal loader – A$2.25 million

demolition to wharf and repair – A$9million

In addition ship claims;

off hire, ship damage, legal costs



Judge’s Conclusions:

At start of swing;

- vessel not out of position;

- partly laden vessel, more momentum;

- swing may have proceeded slower than intended;

- resulted in large drift angle to the north;

- caused the vessel’s turning circle to be closer to the berth;



At 150 m point off the berth:

- both master and pilot knew the vessel to be in difficulty;

- both equally could have done something about it;

- engines full astern would have avoided collision;

- pilot says he made that order, not believed by judge;

- master left it too late to order full astern (20 m off);

both pilot and master therefore negligent.


SA Fortius legal argument 21

PKPC’s liability to Shipowners in negligence:

Apportionment of responsibility:

- relevant if protection of 410B of Navigation Act not apply;

- 50/50 pilot/master;

BUT largely pilot to blame to start with, therefore an extra 10%.



Pilot licensing:

- pilot card signed by harbour master on 29 January 1996

- ‘as secretary to MSB’ (he was not) (MSB had been

disbanded 1 July 1995)

- powers of DG DTI not delegated to harbour master alone

(harbour master/ceo jointly)



Pilot licensing:

Pilot was found not to have a valid license.

- section 7 Marine Pilotage Licensing Act, ‘..a person

licensed to conduct ships to which he does not belong.’

- section 6 Navigation Act ‘a person who does not

belong to, but has the conduct of, a ship.’



Pilot licensing (cont.):

- ‘…not a question of qualification, profession, certification

it is the fact of actually navigating…’

-MPL Act definition not be imported into PCWM Act

or Navigation Act;


SA Fortius legal argument 25 222nt

Shipowners liability to PKCT:

-Placement of the coal loader:

PKCT not negligent in the positioning;

no causal connection between placing and incident;

- shipowners liable for negligence of master and pilot;

- quantum reduced by A$13,000!



PKPC’s liability to Shipowners in Contract:

- section 74 Trade Practices Act (implied warranty that

services of the pilot ‘be rendered with ‘due care and skill’);

- no contract between PKPC and Shipowners;

- statutory obligation



PKPC’s liability to Shipowners in Contract:

“The Corporation offered a pilot to the Fortius because it was

bound to do so and the defendant took a pilot on board because

It was bound to accept…The absence of voluntariness and the fact

of compulsion…must lead to the conclusion…that there is

no contract.” Hely J



PKPC’s liability to Shipowners under section 52:

- conduct "in trade or commerce“;

- pilot's conduct misleading or deceptive by silence;

- Master had formed his own view that vessel was in danger

Therefore no reliance on the deception.



PKPC’s liability to Shipowners, defences under section 410B:

- Common law master responsible for voluntary pilot

- Section 410B Navigation Act extends that to Compulsory Pilotage

- ‘Oceanic Crest’; can only have one ‘master’

- 410B applies whether pilot licensed or not


Summary Operational 30

smaller ports: sufficient tug power, exposure to swell/wind,

large vessel size for port; depths.

larger ports:BRM, communication pilot/master

Licensing

Bulk ports: ship and crew new to port? Port new to ship and crew?

smaller number of ship movements - resourcing


Summary legal protection 31

Future claims

- exclusion clauses in berthing agreements

- tape recording of master/pilot exchanges

- training/well found port procedures

- contract out pilot service to third party

- statutory immunity

Transport insurance plus PORT LIABILITY ISSUES ARISING FROM BERTH/SHIP DAMAGE MIG/MLAANZ Lunchtime...

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Transcript of Transport insurance plus PORT LIABILITY ISSUES ARISING FROM BERTH/SHIP DAMAGE MIG/MLAANZ Lunchtime...