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

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Presentation on theme: "Transport insurance plus PORT LIABILITY ISSUES ARISING FROM BERTH/SHIP DAMAGE MIG/MLAANZ Lunchtime seminar series 28 March 2007."— Presentation transcript:

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

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

3 transport insurance plus 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 transport insurance plus Jody F Millennium

5 transport insurance plus Jody F Millennium

6 transport insurance plus Jody F Millennium

7 transport insurance plus Amarantos

8 transport insurance plus Amarantos – chart 4 4

9 transport insurance plus Amarantos – propeller 5

10 transport insurance plus 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 transport insurance plus 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 transport insurance plus 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 transport insurance plus Amarantos legal argument 9 88 TRADE PRACTICES ACT 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.’

14 transport insurance plus Amarantos legal argument Misleading and deceptive conduct by the port: - that its harbour facilities were suitable for panamax vessels; express representation; implied representation.

15 transport insurance plus 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 transport insurance plus 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 transport insurance plus 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 transport insurance plus SA Fortius 14

19 transport insurance plus 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 transport insurance plus SA Fortius – chart 16

21 transport insurance plus SA Fortius – damage 17

22 transport insurance plus 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 transport insurance plus 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 transport insurance plus 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 transport insurance plus 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 transport insurance plus SA Fortius legal argument 22 Pilot licensing: - pilot card signed by harbour master on 29 January ‘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 transport insurance plus 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 transport insurance plus 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 transport insurance plus SA Fortius legal argument nt 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 transport insurance plus 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 transport insurance plus 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 transport insurance plus 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 transport insurance plus 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 transport insurance plus 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 transport insurance plus 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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