CMC (Australia) Pty Ltd v "Socofl Stream" [2000] FCA 1681
ADMIRALTY – action in rem against demise charterer of vessel brought by owner of cargo – bills of lading – whether bills gave rise to contract of carriage or were mere receipts – apparent or ostensible authority – agency by estoppel – whether defendant bound under bills of lading as carrier – whether master of vessel had apparent or ostensible authority to bind defendant – where master not employed by defendant – where defendant purported to terminate charterparty with sub-demise charterer but failed to nominate a port for redelivery of vessel – where sub-demise charterer indicated to defendant that it proposed to continue to trade – whether defendant breached implied term of contract that goods would be delivered with reasonable dispatch
Cheers v El Davo Pty Ltd (in liq) [2000] FCA 310 referred to Agios Stylianos Compania Naviera SA v Maritime Associates International Ltd Lagos (The “Agios Stylianos”) [1975] 1 Lloyd's Rep 426 referred to The San Roman (1872) LR 3 A&E 583 considered The Patria (1871) LR 3 A&E 436 considered Sandeman v Scurr (1866) LR 2 QB 86 referred to Rodocanachi, Sons & Co v Milburn Brothers (1887) 18 QBD 67 considered President of India v Metcalfe Shipping Co Ltd [1970] 1 QB 289 considered Gardner Smith Pty Ltd v The Ship Tomoe 8 (1990) 19 NSWLR 588 considered Sanko Steamship Co Ltd v Sumitomo Australia Ltd (No 2) (1996) 63 FCR 227 considered Hunter Grain Pty Ltd v Hyundai Merchant Marine Co Ltd (1993) 117 ALR 507 considered Hi-Fert Pty Ltd v Kiukiang Maritime Carriers Inc (2000) 173 ALR 263 applied The Rewia [1991] 2 Lloyd’s Rep 325 referred to Cactus Pipe and Supply Co v M/V Montmartre 1985 AMC 2150 referred to Yeramex International v SS Tendo 595 F.2D 943 (4th Cir 1979) referred to Homburg Houtimport BV v Agrosin Private Ltd (The "Starsin") [2000] 1 Lloyd's Rep 82 applied Kaleej International Pty Ltd v Gulf Shipping Lines Ltd (1986) 6 NSWLR 569 referred to Alimport v Soubert Shipping Co Ltd [2000] 2 Lloyd's Rep 447 referred to Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 referred to Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Company Pty Ltd (1975) 133 CLR 72 referred to Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146 referred to Armagas Ltd v Mundogas SA (“The Ocean Frost”) [1986] AC 717 referred to Rama Corporation Ltd v Proved Tin and General Investments Ltd [1952] 2 QB 147 referred to Boulas v Angelopoulous (1991) NSW ConvR 55-606 referred to First Sport Ltd v Barclays Bank plc [1993] 1 WLR 1229 applied Fyffes Group Ltd v Reefer Express Lines Pty (The “Kriti Rex") [1996] 2 Lloyd's Rep 171 referred to Carr v J A Berriman Pty Ltd (1953) 89 CLR 327 applied
Scrutton on Charterparties and Bills of Lading 20th ed. 1996 Ganado and Kindred Marine…
Details
AGLC
CMC (Australia) Pty Ltd v "Socofl Stream" [2000] FCA 1681
Case
[2000] FCA 1681
Decision Date
CaseChat Overview and Summary
The case CMC (Australia) Pty Ltd v "Socofl Stream" involved a dispute between CMC, the cargo owner, and the vessel Socofl Stream, regarding the failure to deliver cargo on time from Singapore and Malaysia to Newcastle. The dispute was heard by the Australian court, which had earlier dealt with a jurisdictional challenge. The main legal issues concerned whether the bills of lading were mere receipts if CMC was also a voyage charterer, and if so, the extent of damages payable by Socofl Stream. The court was also required to decide whether the evidence of CMC's representatives was more reliable than that of Socofl Stream's representatives.
The court concluded that the evidence of CMC's representatives was more reliable, and that the bills of lading were not mere receipts. The court found that CMC was not a voyage charterer, but rather a shipper and consignee of the cargo. The court also considered the costs incurred by CMC in transporting the cargo by road after the vessel was arrested. The court found that CMC had calculated its damages correctly and awarded damages of $131,633.94 plus interest. The defendant was ordered to pay the plaintiff's costs of the proceedings, save as to costs already the subject of an order of the Court, and liberty to apply within 7 days was granted.
Orders
Orders of the court
1. Judgment for the plaintiff in the sum of $131,633.94 plus interest.
2. The defendant pay the plaintiff's costs of the proceedings save as to costs already the subject of an order of the Court.
3. Liberty to apply within 7 days.
Background
Background to the litigation
These proceedings arose out of the failure of a shipper to deliver, on time, cargo shipped from Singapore and Malaysia for delivery to Newcastle. A challenge to the jurisdiction of this Court to hear and determine the proceedings was unsuccessful: see (1999) 95 FCR 403 ("the jurisdictional judgment"). Much of the background is set out in the jurisdictional judgment and it is unnecessary to repeat it. It is, however, desirable to refer in a summary way to the more significant events before moving to consider the evidence. The Background The following is a brief overview of events leading to these proceedings. The cargo was steel products originating in South America which was shipped in January 1999 to Australia from, as its immediate ports of origin, Singapore and Port Kelang in Malaysia. The owner of the cargo was the plaintiff, CMC (Australia) Pty Ltd ("CMC"). The cargo was shipped on the Socofl Stream ("the Vessel") which had, until December 1998, been chartered by Kamchatka Shipping Company ("Kamchatka") under a sub-demise charterparty with Sovremenniy Kommercheskiy Flot ("Sovcomflot"). In the jurisdictional judgment I concluded that the charterparty between Kamchatka and Sovcomflot had been terminated by a notice given by Sovcomflot on 15 December 1998. The notice took effect immediately, or at the latest, a week later. At all material times Sovcomflot was a demise-charterer under a charterparty with the owner, Aurora Navigation SA ("Aurora"). While Sovcomflot demanded (in writing and a week after the notice of termination was sent) redelivery of the Vessel by Kamchatka, no port of redelivery was nominated. Notwithstanding the termination of the sub-demise charter and the demand for redelivery, the Vessel continued to trade, manned by the master (Capt Leonov) ("the Master") and crew who had been engaged by Kamchatka. The steel products were loaded in Singapore on 6 January 1999 and in Port Kelang on 9 January 1999. The bills of lading issued in relation to the goods were, as to those issued in Singapore, signed by a representative of Pacific Orient Sea Transport Pte Ltd ("POST") and, as to those issued in Port Kelang, by a representative of Titimus Shipping and Trading Sdn Bhd ("Titimus") on behalf of POST. The Singapore bills were, in terms, signed "On Behalf of Master", and the Port Kelang bills were, in terms, signed "AS AGENTS-FOR AND ON BEHALF OF THE MASTER". The bills of lading made no provision for freight or charges. Two earlier events should be mentioned. On 23 January 1998, Kamchatka chartered the Vessel to Jebsens Orient Shipping Services A/S ("Jebsens") under a time-charter for three months with options for the further hire of the Vessel for several further periods of the same length. It was not in issue that, subject to the legal effect of events in December 1998 concerning Sovcomflot and Kamchatka, Jebsens remained a time charterer of the Vessel in January and February 1999. On 26 August 1998 CMC executed an agreement entitled "Memorandum of Understanding" ("the August 1998 agreement") with POST concerning the shipment of "steels and other cargoes" from Asia to Australia. The true character of this agreement is an issue in these proceedings.
Evidence
Evidence Before The Court
On 9 February 1999, an order was made by this Court, on CMC's application, permitting cargo to be discharged from the Vessel on certain conditions. The order was entered on 11 February 1999. Pursuant to the order, the cargo of CMC was discharged and transported by road transport from Brisbane to Newcastle or the surrounding area and delivered either to customers of CMC or to a warehouse maintained by CMC.The evidence in detail I now consider the evidence in the proceedings in more detail as it relates to contentious factual or legal issues.(i)the relationship between POST and CMC A question has arisen in the proceedings whether CMC, in addition to being the owner and consignee of the steel products, was a voyage charterer for the passage of the Vessel from Singapore and Port Kelang to Newcastle. If so, it was submitted by Sovcomflot, the bills of lading are mere receipts. Reference should be made to the evidence concerning the relationship between POST and CMC. The August 1998 agreement commenced with a paragraph containing recitals which noted that agreement "has been reached to provide a framework for shipments of steels and other cargoes from Asia to Australia". It identified the parties to the agreement, POST and CMC, as the "Owners" and "Charterers" respectively. It recorded that POST agreed to provide CMC with "regular and flexible shipping solutions as outlined herein" and that CMC agreed "to offer (POST) all their cargoes falling within the geographical range of this agreement during its duration". As to its area of operation, the agreement, in terms, included Singapore and Port Kelang as ports of loading, and Newcastle and Sydney as ports of discharge. The duration of the agreement was identified in the paragraph as a period of 12 months commencing 1 November 1998 but to be reviewed at the end of that period. The paragraph concluded:Each shipment shall be governed by a separate charter party but that charter party shall incorporate and be bound by the terms of this agreement. There then followed ten numbered clauses. Clauses 1 and 2 classified various ports (of loading and unloading) into zones. Clause 3 required POST to nominate a vessel after receiving advice from CMC about forthcoming shipments and identified a procedure to be followed to effectuate carriage and deal with changes to the vessel to be used or the cargo to be carried. Clause 4 specified minimum tonnages of cargo to be provided by CMC (identified as "minimum inducement(s)" required by POST) and clause 5 identified freight rates for a range of steel products shipped from the various zones to various ports in Australia. Payment was dealt with in clause 7 which required payment to POST within a specified number of days "upon completion of loading and signing/releasing Bills of lading". That clause also declared that "All Bills of Lading … be marked "Freight payable as per Charterparty".". Annexed to the August 1998 agreement was a substantially incomplete (as to the vessel and cargo) copy of the standard form Gencon charter identifying POST as the owner and CMC as the charterer with certain clauses deleted and non-standard clauses appended to the standard form.
Decision
Reasons for decision
MOORE J
To the extent that there are differences between the accounts of Mr Neill and Mr Fisher about the contents of their conversations and when they occurred, I would accept the evidence of Mr Fisher. While I do not doubt that Mr Neill endeavoured to give an honest account of these conversations, his account was based on his recollection (unaided by contemporaneous notes) more than a year after the conversations took place. On the other hand Mr Fisher's account was based, in part, on contemporaneous notes, the veracity of which I do not doubt. Mr Fisher's account is inherently plausible and not at odds with any other contemporaneous documents in evidence or the evidence of Mr Hanneman. I otherwise accept the evidence of both Mr Neill and Mr Fisher concerning events in early 1999 other than what passed between them in their discussions. (v)The decision to transport by road Some of the evidence relating to the decision to transport the cargo from Brisbane by road is referred to in the preceding section concerning the solicitors’ discussions. Mr Hanneman gave evidence about the decision as well. Mr Hanneman was made aware of the arrest of the Vessel by Mr Keith Faulkner from POST. Mr Faulkner rang, I infer, on 27 January 1999 and told Mr Hanneman the Vessel had been arrested and he did not know when it would get to Newcastle. He indicated that when he knew more he would again contact Mr Hanneman. Mr Hanneman initially decided to wait and see whether the arrest would be resolved without the need to make alternative arrangements for the carriage of the cargo. Eventually it appeared to him the matter would not be resolved easily and alternative arrangements to move the cargo would need to be made. He instructed Mr Neill to obtain an order permitting the discharge of the cargo in Brisbane. Mr Hanneman commenced to make inquiries about transporting the cargo by other means. On about 7 February 1999 he was told by Mr Faulkner that POST had no suitable ships to carry the cargo within the following three weeks. In any event, he then estimated the cost of this method would be $55 per tonne. He contacted a railway freight forwarder on 5 February 1999 and obtained a quote which was withdrawn on 10 February 1999. In the result, Mr Hanneman ascertained the cost of rail transport was going to be no less than $41.50 per tonne and probably more. On 10 February 1999 Mr Hanneman negotiated a price of $35.50 per tonne for one class of the cargo and $40.00 per tonne for another class for transport by road. The cargo was ultimately transported by this means and the total cost was $102,392.64. This amount also included delivery of some of the cargo to customers which CMC would have undertaken in any event. The nett additional cost of transporting the cargo by road from Brisbane was $78,362.04.(vi)Particular matters concerning damages It is necessary to refer briefly to the evidence concerning a number of particular matters in issue. Each concerned the way in which CMC calculated its damages. (a) Stevedoring charges for delays occasioned by rain