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PORT LIABILITY ISSUES ARISING FROM BERTH/SHIP DAMAGE

PORT LIABILITY ISSUES ARISING FROM BERTH/SHIP DAMAGE MIG/MLAANZ Lunchtime seminar series 28 March 2007. Introduction 1. Recent cases : (‘Tai ping’, ‘Mellum’, ‘Pactrader’) ‘Jody F Millennium’ at Gisborne, ‘Amarantos’ at Wallaroo

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PORT LIABILITY ISSUES ARISING FROM BERTH/SHIP DAMAGE

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  1. PORT LIABILITY ISSUES ARISING FROM BERTH/SHIP DAMAGE MIG/MLAANZ Lunchtime seminar series 28 March 2007

  2. Introduction 1 Recent cases : (‘Tai ping’, ‘Mellum’, ‘Pactrader’) ‘Jody F Millennium’ at Gisborne, ‘Amarantos’ at Wallaroo ‘SA Fortius’ at Port Kembla

  3. Introduction 2 Common themes:- operational: pilot error, failure of communication (BRM), insufficient tug power, vessel size. liability: inventive legal argument, significant claims figures, extensive legal bills

  4. Jody F Millennium

  5. Jody F Millennium

  6. Jody F Millennium

  7. Amarantos

  8. Amarantos – chart 4 4

  9. Amarantos – propeller 5

  10. 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.

  11. 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.

  12. 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’.

  13. Amarantos legal argument 9 88 TRADE PRACTICES ACT 1974 - SECT 52 Misleading or deceptive conduct • ‘A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.’

  14. 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.

  15. 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.

  16. 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’;

  17. 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

  18. SA Fortius 14

  19. 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.

  20. SA Fortius – chart 16

  21. SA Fortius – damage 17

  22. 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

  23. SA Fortius – facts 19 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;

  24. SA Fortius – facts 20 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.

  25. 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%.

  26. SA Fortius legal argument 22 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)

  27. SA Fortius legal argument 23 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.’

  28. SA Fortius legal argument 24 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;

  29. 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!

  30. SA Fortius legal argument 26 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

  31. SA Fortius legal argument 27 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

  32. SA Fortius legal argument 28 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.

  33. SA Fortius legal argument 29 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

  34. 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

  35. 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

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