What's new in Australia?
DURING 2000 and 2001 there have been a number of important and interesting legal and industry developments in relation to the maritime industry in Australia. A number of significant decisions of the courts have been delivered, and these are outlined below.
Typhoon clause - a lesson in knowledge
Neuchatel Swiss General Insurance C. Ltd & Ors v Vlasons Shipping Inc (Victorian Court of Appeal) - 27 March 2001
Under a hull (time) companies combined marine insurance policy, the insurer insured the vessel Biyayang Ginto owned by Vlasons Shipping Inc. The policy included a typhoon clause providing that the insured vessel 'shall not be allowed to sail or put out of port where there is a typhoon or storm warning either at the port of destination or between the said port'
The vessel sailed from Beihai, China, bound for Hong Kong on August 14, 1991. On August 16, 1991, the vessel encountered typhoon Fred in the South China Sea, resulting in its loss with all hands. The insurer sought to deny liability on the basis of the typhoon clause. The Court of Appeal held that such a clause must be read subject to so-called "futurity" implications and the requirement for the master of the vessel to have actual knowledge of the relevant warning. As such, the court interpreted the clause on the basis that it applied, where the zone of the storm or typhoon of which warning is given, would affect, in the future, the port of destination or the line of voyage between the port of departure and the port of destination.
On the second issue of knowledge, the court held that the expression 'shall not be allowed to sail or put out of port' connotes the need for the person in command of the vessel to make a conscious decision. Hence the clause requires that such a decision be made with knowledge of the warning affecting the vessel's proposed voyage or port of destination. The court found that the evidence indicated that there were warnings at the relevant time. Therefore, the master did not have the requisite knowledge, and the claim succeeded.
Carrier's lien
Australian Tallow & Agri-Commodities Pty Ltd v Malaysia International Shipping Corporation (NSW Court of Appeal) - 2 March 2001
Standard lien clauses in carriers' bills of lading usually extend to monies due under the bill of lading contract 'or any other contract', which was the case in this dispute. While the facts were complicated, the Court of Appeal confirmed that, provided the terms of the bill of lading are wide enough, the lien can extend over goods in respect of which monies are due under other contracts, such as freight payable under prior bills of lading. However, the court also held that it would be commercially unacceptable for a carrier to exercise a lien over goods to secure freight payable to it by persons or their agents who had no interest in the goods which were the subject of the lien. The practical importance of the case is that, in this jurisdiction, ocean carriers or indeed forwarders should adopt a clear but encompassing lien clause.
Bill of lading - interpretation
Hi-Fert Pty Ltd v Kiukiang Maritime Carriers Pty Ltd CMC (Australia) Pty Ltd v The Ship Socofl Stream
In both these cases the Federal Court of Australia considered the contractual implications of a bill of lading as between owner, or demise charterer, and voyage charterer, where the voyage charter is made with a time charterer. That is, what is the situation where the bill of lading is issued to the voyage charterer by or on behalf of the owners? The federal court held that a bill of lading issued by a shipowner did act as a contract of carriage in the hands of a voyage charterer in this situation. Therefore, the voyage charter effectively had two contracts of carriage for the same cargo and the same voyage - the bill of lading issued by or on behalf of the shipowner and the voyage charter party (in these two reported cases a contract of affreightment) with the time charterer.
When damage is not damage
The High Court of Australia's decision in Astley v Austrust has caused some consternation within the industry. In the course of its decision, the high court was required to consider whether an award of damages for breach of contract, where the defendant is liable in both contract and tort for a breach of a duty of care, may be reduced for contributory negligence on behalf of the claimant. The court found that damages for breach of contract are not liable to be reduced because of the contributory negligence of the claimant.
All states intend to introduce legislation to overcome the effect of this decision so as to restore the operation of the law prior to the ruling, which provided that in such cases contributory negligence of the claimant reduced the resultant liability of the defendant. For example, in New South Wales, the Law Reform (Miscellaneous Provisions) Amendment Act came into force on January 19, 2001. Similarly, in Victoria, the Wrongs Amendment Act 2000 came into force on November 21, 2000.
Legislative changes
In addition to the courts' pronouncements, there have been a number of important legislative changes affecting the maritime industry in Australia. Some of the more important changes include:
Pollution
Of particular interest to shipowners and operators is the new Commonwealth legislation in respect of compulsory oil pollution insurance. The Protection of the Sea (Civil Liability) Amendment Act 2000 received Royal Assent on October 5, 2000. In summary the amendments:
- require all ships over 400 grt entering or leaving an Australian port to maintain insurance to cover the cost of clean-up resulting from the spillage of bunker fuel or other oil;
- clarify the liability of a shipowner where the Australian Maritime Safety Authority (AMSA) has incurred expenses in exercising its powers of intervention, and
- clarify the ability of AMSA to recover costs, expenses, and loss and damage incurred in performing its function to combat pollution where there has been a threat of, but not an actual, discharge or disposal from a ship.
The Act also creates a strict liability offence where the vessel does not carry the relevant certificate of insurance, with a penalty of up to Aus$55,000. A vessel may also be detained if it is suspected of attempting to enter or leave a port in Australia without the relevant certificate of insurance. The provisions relating to the recovery of costs came into operation on October 6, 2000. The provisions in respect of compulsory insurance are effective from April 6, 2001.
Liner Shipping Regulations
The Trade Practices Amendment (International Liner Cargo Shipping) Act 2000 amends Part X of the Trade Practices Act (1974). The Australia Trade Practices Act was introduced - and continues - to protect particularly consumers and entities against monopolies and abuses of market share. Part X regulates the market conduct of international liner cargo shipping companies which collaborate as conferences to co-ordinate joint services, share capacity and agree freight rates. In some respects, then, it contradicts the spirit of the Trade Practices Act.
With effect from November 2, 2000, exemptions from the competition rules were limited to liner shipping activities covering ocean transport and loading and discharge operations at cargo terminals, including inland terminals used for assembling export cargo for delivery to a port, or delivering cargo to importers. The ability of shipping conferences to negotiate collectively with stevedores has also been confirmed, and both the minister and the Australian Consumer and Competition Commission have been afforded increased powers to resolve anti-competitive behaviour in certain cases. Notably, the Trade Practices Act also provides that conferences will not be permitted to unreasonably restrict the entry of new parties.
A further amendment - which came into force on March 2, 2001 - extends to importers, as far as practicable, the protection afforded to exporters. Parties to an inward conference are required to register their agreements and negotiate with the relevant body representing importers in respect of charges for land-based services in Australia, for example terminal handling charges.