Braverus Maritime Inc v Port Kembla Port Corporation & Anor

[2006] HCATrans 245

[2006] HCATrans 245

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S18 of 2006

B e t w e e n -

BRAVERUS MARITIME INC

Applicant

and

PORT KEMBLA PORT CORPORATION

First Respondent

PORT KEMBLA COAL TERMINAL LTD

Second Respondent

Application for special leave to appeal

GLEESON CJ
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 19 MAY 2006, AT 11.23 AM

Copyright in the High Court of Australia

MR S.J. GAGELER, SC:   If the Court pleases, I appear for the applicant.   (instructed by Ebsworth & Ebsworth)

MR J.E. SEXTON, SC:   May it please the Court, I appear with my learned friend, MR G.K.J. RICH, for the first respondent.   (instructed by Thynne & Macartney)

GLEESON CJ:   Yes, Mr Gageler.

MR GAGELER:   Your Honours, to refocus and, to some extent, sharpen up what appears in the summary of argument, my best point for special leave is one that goes to the scope rather than the existence of the immunity conferred by section 410B(2) of the Navigation Act.  I will develop the point in a moment, but can I say this about it?  It is a point that was left open on the reasoning of the High Court in Oceanic Crest.  It is a point which is expressly supported by the qualified terms in which the House of Lords has picked up and accepted the reasoning in Oceanic Crest and it is a point which is left entirely untouched by the very recent amendment to section 410B that came into force just last month. 

The point is this.  If your Honours turn to the applicant’s list of authorities and turn to section 410B which is behind tab 1 and look at subsection (2) which has been held to effect not only a liability on the part of the ship owner but an immunity on the part of the provider of the compulsory pilotage, it applies – and your Honours will see the language – where “a ship is navigating under circumstances in which pilotage is compulsory under a law of a State or Territory”.  The proposition really just comes down to this, that the reference to “circumstances” in subsection (2) refers to the whole of the circumstances under State ‑ ‑ ‑

GLEESON CJ:   Is the fact that the pilot was unlicensed one of the circumstances, is it?

MR GAGELER:   Well, yes, exactly.  It is the circumstances under State law where pilotage is not only lawfully required but lawfully performed and the fact that the pilot was not licensed means that under State law, which required licensing, the pilot was acting unlawfully and could only ‑ ‑ ‑

GLEESON CJ:   Was the fact that the pilot was unlicensed known to the owner or master?

MR GAGELER:   No.

GLEESON CJ:   So as far as the owner or master was concerned, the ship had no choice but to take on the pilot, the pilot was negligent and the question is whether ‑ ‑ ‑

MR GAGELER:   Whether this statutory immunity cuts in in those circumstances in this case, where my client, foreign shipowner, as your Honour has said, had no choice but to take on a pilot – that is section 78(2) of the Act that your Honour sees behind the next tab, tab 2 – no choice but to take on a pilot and no choice but by section 80 of the same Act to take on the pilot assigned to the ship by the port authority, the first respondent.  So it is obliged to take a pilot, obliged to accept the pilot that is allocated to it by the port authority.  That pilot is negligent, as your Honour has said, found by the trial judge to be 60 per cent responsible.

GLEESON CJ:   Well, I have no doubt the terrible injustice of that situation is taken into account in fixing the contributions to the PNI Club to which your client belongs, but that is just inherent in the system of compulsory pilotage, is it not?

MR GAGELER:   No, it is not.  Well, it is not, your Honour, because if one looks at the system of compulsory pilotage – and it was looked at pretty thoroughly by the Full Court – the obvious conclusion was not drawn from the history.  If you go back to 1854, as the Full Court did in its survey of the history, what you find is that compulsory pilotage has always gone hand in hand with a requirement for the licensing of pilots.  One can be seen as a quid pro quo to the other.  I mean, if you have to take a pilot, then you are entitled to expect that the person you get is going to be qualified and licensed.  That is the way it has always worked.

CALLINAN J:   Mr Gageler, does the Act abolish the sort of principle that was applied in Lister v Romford Ice in relation ‑ ‑ ‑

MR GAGELER:   The way in which the immunity ‑ ‑ ‑

CALLINAN J:   You understand what ‑ ‑ ‑

MR GAGELER:   I understand what your Honour is putting to me and I do not have a precise answer to it, but I think that it would follow from the way in which the immunity affected by section 410B(2) was held to cut in in Oceanic Crest that there would be no operation for Lister v Romford Ice to – no opportunity for that principle to apply.

CALLINAN J:   Why not?

MR GAGELER:   Well, because it was ‑ ‑ ‑

CALLINAN J:   I am not putting that against you.

MR GAGELER:   No, I realise your Honour is not.  Lister v Romford Ice, of course, assumes a master/servant relationship.

CALLINAN J:   Yes, but if you look at other cases, the principle can be applied.  The person who is actually personally liable, put it that way.

MR GAGELER:   Your Honour might have a good point.  It is really just not one that I have thought of.

GLEESON CJ:   Mr Gageler, looking at the words of the statute, 410B(2), the key words are in lines 3 and 4 of subsection (2).

MR GAGELER:   Yes.

GLEESON CJ:   Why is it not the case that here the owner or master of the ship was “navigating under circumstances in which pilotage was compulsory”?  That is a reference to the applicable law, is it not?  It is not a reference to the facts or circumstances relating to whether the pilot has a licence.

MR GAGELER:   Well, it is a reference to the applicable law that governs circumstances in which pilotage is compulsory.  It is a reference, in our submission, not only to section 78, relevantly, of the applicable law here that says my client had to take a pilot.  It is a reference to section 80 that said the first respondent gave my client such pilot as it chose.

GLEESON CJ:   That is a problem that I have with the language of the section.  The language of the section refers to the circumstance that you were required to have a pilot.  Now, the fact that this character did not happen to have a licence does not alter the requirement that you have a pilot, does it?

MR GAGELER:   Your Honour, we would have it read more widely than simply looking at the – on that reading, which is really the reading that was adopted by the Full Court, the section is triggered simply because of the liability or the obligation placed by the statute on my client.

GLEESON CJ:   You seem to want to read into this section the following words:  “the owner or master of a ship navigating under circumstances in which pilotage [by this pilot was] compulsory”.

MR GAGELER:   That would do it, yes.  That is one way of achieving it.  Your Honour could read it in slightly different ways, but, yes, pretty much.  That is not surprising when one looks at subsection (2) in the context of subsection (1) which refers to a pilot.  I mean, we are talking about circumstances in which the ship is navigating and must be navigating with a pilot on board.  If your Honours would turn to tab 10 of our bundle, your Honours will see the decision of the House of Lords.

GLEESON CJ:   Sorry, which tab?

MR GAGELER:   Tab 7 of the bundle.  Your Honours will see the decision of the House of Lords in the Esso Bernicia and what your Honours see at page 682 of that decision is the progenitor of section 410B of the present Act, that is, the English Act of 1913.  The English Act came into force in 1918.  At page 683C in the speech of Lord Jauncey with whom the other members of the House of Lords agreed your Honours will see it is said:

A long line of authority establishes that a shipowner is liable to third parties for the negligent navigation of a voluntary pilot and, since 1 January 1918, he has been similarly liable for negligent acts of compulsory pilots.

Your Honours will then see at page 687H, right at the bottom of the page, the beginning of discussion of the old case of Holman v Irvine Harbour Trustees ending at page 688F where it is said:

The basis of that decision was that an unlicensed pilot working about the harbour remained the servant of the harbour authority in contradistinction to a licensed pilot who occupied an independent position.

That was the position as understood at common law by the House of Lords in Esso Bernicia.  If your Honours then go to page 690, what your Honours see is, in the face of a challenge to that line of authority, an acceptance at page 690 of the reasoning of the majority of this Court in Oceanic Crest and then a statement of principle drawn from Oceanic Crest and consistent with the understanding of Holman stated at the bottom of page 690.  This is what is said:

My Lords, it may be stated as a general rule that the employer of a qualified licensed pilot is not vicariously responsible to the owner of a ship damaged by his negligence while under pilotage.

That is the principle that was drawn from Oceanic Crest consistently with Holman, one limited to section 410B(2) and its equivalents being applicable only where there is a qualified licensed pilot.  Now, how did the Full Court deal with that in the present case?  If your Honours go to page 261 of the application book ‑ ‑ ‑

GLEESON CJ:   Just before you leave Esso, what is the reference to the passage from the joint judgment of Justices Brennan and Deane referred to a little below line F?

MR GAGELER:   I do not think I can provide your Honour with that easily.

GLEESON CJ:   Do not take time over it.

MR GAGELER:   It is not a passage I have marked, your Honour, I am sorry.  If your Honours were to go to page 261 of the application book, at the bottom of the page at about line 45 there is the reference to Lord Jauncey’s statement of principle drawn from Holman and then what is said is:

It may, with respect, be doubted, whether an element of the basis of the decision in Holman was not the undertaking or contract by the trustees to the shipowner.  Nevertheless, the above was not a considered conclusion by his Lordship, as a matter of statutory interpretation . . . It was only necessary for Lord Jauncey to express the general rule as he did at 690‑91 as concerning licensed pilots because that was the position before him –

Well, maybe, but the position that has been taken by the Full Court in this Court is at odds with both the statement of principle which is confined to licensed pilots and with a step in the reasoning in getting to that statement of principle that is the explanation of Holman.  When the Full Court came to deal with section 410B itself, despite the very learned recitation of history, it all came down to what is said at page 265, line 35 to 40, and that is one of what is said to be construing the plain words of section 410B, the last two lines of that paragraph really summing it up where their Honours say:

the section does not on its face direct a further inquiry into whether the State or Territory law was actually complied with.

In our respectful submission, to read the section as directing an inquiry into when it refers to what occurs under a law of a State or Territory as directing an inquiry as to whether what is occurring is lawful under the law of a State or Territory is hardly a gloss on the section.  It is entirely consistent with the sort of approach taken to construing sections conferring immunity from civil liability expounded in Puntoriero and similar cases as a general principle and it is also, in our submission, consistent with what you do legitimately draw from history and that is compulsion and licensing have always being aspects of regulatory regimes which govern compulsory pilotage.  It was since the mid‑19th century; always has been.

CALLINAN J:   What was the cross‑claim?  The cross‑claim was dismissed, was it not, by the primary judge?

MR GAGELER:   Yes.

CALLINAN J:   What was that?

MR GAGELER:   That was the cross‑claim by my client, the shipowner, against the port authority.

CALLINAN J:   The sort of claim that I mentioned before, was it?

MR GAGELER:   Well, it was a claim in negligence and under the Trade Practices Act for damage ‑ ‑ ‑

CALLINAN J:   This fact creates a statutory vicarious liability in effect?

MR GAGELER:   Yes.

CALLINAN J:   And you sought to claim against the port authority as being itself vicariously liable for the pilot?

MR GAGELER:   That is right.

CALLINAN J:   But that is not a ground of appeal to this Court?

MR GAGELER:   No, that is really what this whole point goes to because section 410B(2) as interpreted in Oceanic Crest means that not only is my client made liable to a third party for the negligent operation of the ship, but my client alone is made liable to that third party and the port authority is conferred a derivative immunity.  That is really ‑ ‑ ‑

GLEESON CJ:   Yes, it is a statutory allocation of risk.

MR GAGELER:   Exactly, yes, and the point comes down to this ‑ ‑ ‑

CALLINAN J:   But to third parties, is it not?

MR GAGELER:   Well, the way in which it was held to work in Oceanic Crest and following a line of authority was that the pilot can only be the servant of one master and the effect of this statute is to make the pilot the servant of the shipowner and no longer the servant of the port authority. 

That is the way in which it was said to work.  That is, as I said, the best point. 

It is a point of statutory construction, but it is a point of statutory construction of international significance, not only because the statute applies to ships in international trade, as my client was at the time, but because the statute with which we are concerned has its origins in the United Kingdom statute and is replicated around the world.  The point is at least left open on the jurisprudence of this Court and the point that we seek to agitate is indicated as the preferable construction in the decision of the House of Lords to which I have taken your Honours.  If the Court pleases.

GLEESON CJ:   We do not need to hear you, Mr Sexton.

We think there are insufficient prospects of success to warrant a grant of special leave to appeal.  The application is dismissed with costs.

AT 11.42 AM THE MATTER WAS CONCLUDED