Maritime law in New Zealand – an overview

Neil Beadle, of Phillips Fox, Auckland, offers an overview of the development of maritime law in New Zealand

NEW Zealand is a comparatively young country. On February 6, 1840, Captain William Hobson RN on behalf of the Crown signed a treaty with local Maori chiefs at Waitangi in the Bay of Islands. Amongst the new governor's first acts were to establish a Court of General, Quarter and Petty Sessions in New Zealand. In 1858 the laws, including the common law, of England as they existed at January 14, 1840 were extended to New Zealand so far as they were applicable.

Admiralty jurisdiction was exercised by the courts from early times. And the arrest procedure was especially important to potential claimants given the relative isolation of the country from the rest of the world.

An Admiralty Court was established in 1844 and further legitimised by the Vice Admiralty Courts Act 1863 (UK). There had been some doubt as to the legitimacy of the earlier legislation but it was clear that the courts considered that they did have the authority and took a pragmatic approach to matters. The Colonial Courts of Admiralty Act 1890 (UK) established the Supreme Court as a colonial court of Admiralty, and similar courts existed in the other British colonies. The 1890 Act continued as the basis for the Supreme Court's admiralty jurisdiction until 1975 when the Admiralty Act 1973 (NZ) came into force.

Carriage of goods by sea has played an important part in New Zealand's trading history, and the export of agricultural produce remains an important component of New Zealand's export economy.

New Zealanders are practical and inventive people. The relatively short shelf life of meat, in the absence of refrigeration, was a clear inhibitor to trade. And so in 1882 New Zealand pioneered refrigerated transport when the first cargo of frozen meat was shipped from New Zealand to England on board the Dunedin. That innovation has continued in other areas, not least in the design and manufacture of innovative packaging for produce such as kiwi fruit, which would otherwise suffer potential damage during transit.

Aside from the wholesale adoption of English law in 1858, New Zealand's close trading links with Britain have meant that its maritime law has often reflected developments as they have arisen in the mother country. So, following the Marine Insurance Act 1906 (UK), New Zealand enacted its own legislation by the same name in 1908 which is almost identical. Naturally, with such a large trade in goods to the UK from New Zealand, there was a desire for NZ law to reflect that in the UK in this important area.

The same is also true of the Admiralty Act 1973 (NZ). That Act is based on United Kingdom legislation enacted to give effect to the 1952 Brussels Arrest Convention. While New Zealand did not ratify that convention, the purpose of the 1973 Act was to give effect to its terms. New Zealand has not ratified the 1990 Arrest Convention. While sistership arrest is permitted, the rules are akin to UK legislation rather than South African 'associated' ship arrest.

The arresting party is not required to give counter-security. The admiralty registrar does require funds on account of expenses necessarily incurred upon arrest, i.e., berthage charges, insurance, security and the like, but does not charge for his services. There are no other levies or taxes raised in respect of arrest. In lieu of arrest, an arresting party is entitled to alternative security up to the level of its best arguable case, including provision for interest and costs. The High Court commonly accepts letters of undertaking from members of the International Group of P&I Clubs rather than insisting upon bank guarantees or money in court.

Although the District Court has jurisdiction for in personam claims up to a value of $120,000, the New Zealand High Court has exclusive jurisdiction in claims of higher value, and in in rem actions. Judges experienced in admiralty deal with matters expeditiously, in practical terms and most importantly from an international perspective with a view to preserving harmony in maritime law.

The Hague-Visby Rules are applicable by force of law and apply as such to the carriage of goods by sea evidenced by a non-negotiable document other than a bill of lading or similar document of title contractually incorporating those rules. Under Section 210 of the Maritime Transport Act 1994, contractual jurisdiction clauses have no effect to the extent that they seek to preclude or limit the jurisdiction of the court as to carriage of goods to or from New Zealand. These provisions do not apply to valid arbitration clauses, which are observed by the court.

As to global or tonnage limitation, New Zealand has acceded to LLMC 1976 and enacted it in law, but not in full. It has done so in a fashion that benefits owners as defined by that convention. In the recent decision of Tasman Orient Limited v Alliance Group Limited & Ors [2003] 2 Lloyds LR 713, in which the writer appeared for the owner, a limitation decree was granted, but cargo interests' application that a limitation fund be established was denied on the ground that the legislation did not give the court the power to require such security to be given. The higher limitation thresholds applicable under LLMC 1996, which has only recently come into force in certain jurisdictions (including the UK and Australia), have not as yet become law in New Zealand, but it is anticipated that this will happen in 2005 and will apply to occurrences after that date.

The Salvage Convention 1989 also applies by force of law and is annexed in full to the Maritime Transport Act 1994. Oil pollution and hazardous substances are also dealt with in the same legislation. Construction, survey and equipment regulation and provisions relating to safety at sea are all provided for in Maritime Rules.

A port safety code based on the UK model is now being mooted for New Zealand. Concern has arisen in this area due to a recent casualty at the port of Gisborne, which suffers from surge conditions. There has also recently been a grounding during pilotage in the South Island, and a near miss involving a tanker in Northland. It seems that these events have provided a wake-up call to New Zealand ports and to the Maritime Safety Authority, and action is likely in the relatively near future.

The law of domestic carriage in New Zealand is often considered novel to those new to the concept. The Carriage of Goods Act 1979 applies to all contracts for carriage of goods within New Zealand, including the domestic legs of international voyages. The Act establishes a default option known as limited carriers risk, which can only be departed from by written agreement signed by the cargo owner. The position is something of a compromise between the interests of carriers and cargo owners. Carriers are virtually strictly liable for loss or damage to cargo in their possession or control but with a limit of $1,500 per unit or package.

Where goods are palletised or containerised, the pallet or container constitutes a unit of goods. However, this is determined by the way in which the goods were presented to the first actual carrier. So, if a carrier in Australia lifts a containerload of goods for carriage to a consignee's premises in New Zealand, and the truck carrying the container from the wharf in New Zealand overturns, the carrier's liability will be limited to $1,500. However, if the first carrier in Australia lifted twenty cartons of goods which were later packed into a container for carriage to New Zealand, the New Zealand carrier will be liable for $30,000.