Ixom Operations Pty Ltd v Blue One Shipping SA

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FEDERAL COURT OF AUSTRALIA

Ixom Operations Pty Ltd v Blue One Shipping SA [2023] FCAFC 25

Appeal from: Ixom Operations Pty Ltd v Blue One Shipping SA [2022] FCA 1101
File number: NSD 870 of 2022
Judgment of: RARES, SARAH C DERRINGTON AND
STEWART JJ
Date of judgment: 20 February 2023
Date of publication of reasons: 7 March 2023
Catchwords:

ESTOPPEL – where extension of time limitation to sue on contract evidenced by bill of lading granted by “owners” of vessel – where “owners” can refer to registered owners or demise charterers (ie, disponent owners) – where the proper defendant was the demise charterer – where primary judge found that both the registered owner and demise charterer granted an extension of time – where proceeding below commenced in time only against the registered owner – whether, by granting an extension of time to sue, the registered owner represented that it was the proper party to sue – whether registered owner estopped from denying liability

SHIPPING AND NAVIGATION – bills of lading – demise chartered ship – whether extension of time limitation by “owners” was by registered owner and demise charterer – whether by extending a time limitation a shipowner thereby represented that it is the carrier

Words and phrases: “owner’s bill of lading”, “charterer’s bill of lading”, “owners”
Legislation:

Carriage of Goods by Sea Act 1991 (Cth) Sch 1A, Art 3(6)

Federal Court Rules 2011 (Cth) r 36.01(2)(c)
Cases cited:

Air Tahiti Nui Pty Ltd v McKenzie [2009] NSWCA 429; 77 NSWLR 299

Grundt v Great Boulder Pty Gold Mines Ltd [1937] HCA 58; 59 CLR 641

Krakowski v Eurolynx Properties Ltd [1995] HCA 68; 183 CLR 563

Legione v Hateley [1983] HCA 11; 152 CLR 406

MCI WorldCom International Inc v Primus Telecommunications Inc [2004] EWCA Civ 957; [2004] 2 All ER (Comm) 833

Pacol Ltd v Trade Line Ltd (The “Henrik Sif”) [1982] 1 Lloyd’s Rep 456

The “Stolt Loyalty” [1993] 2 Lloyd’s Rep 281

The Stolt Loyalty [1995] 1 Lloyd’s Rep 598

Western Australian Insurance Co Ltd v Dayton [1924] HCA 58; 35 CLR 355

Davies M and Dickey A, Shipping Law (4th ed, LawBook, 2016)

Handley KR, Estoppel by Conduct and Election (2nd ed, Sweet & Maxwell, 2016)

Rose F and Reynolds FMB, Carver on Bills of Lading (5th ed, Sweet & Maxwell, 2022)
Division: General Division
Registry: New South Wales
National Practice Area: Admiralty and Maritime
Number of paragraphs: 79
Date of hearing: 20 February 2023
Counsel for the Appellant: E G H Cox SC and D J Reynolds
Solicitor for the Appellant: Mills Oakley
Solicitor for the Respondents: G Nell SC and J Kennedy
Solicitor for the Respondents: Thynne & Macartney

ORDERS

NSD 870 of 2022
BETWEEN:

IXOM OPERATIONS PTY LTD

Appellant
AND:

BLUE ONE SHIPPING SA

First Respondent

CS MARINE CO LTD

Second Respondent

ORDER MADE BY:

RARES, SARAH C DERRINGTON AND STEWART JJ

DATE OF ORDER:

20 FEBRUARY 2023

THE COURT ORDERS THAT:

1.The appeal be dismissed.

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Details
Case
[2023] FCAFC 25
Decision Date

CaseChat Overview and Summary

Ixom Operations Pty Ltd appealed against the primary judge's orders, which dismissed their claims against Blue One Shipping SA. Ixom sought damages for loss and contamination of sulphuric acid during carriage on the motor tanker CS Onsan. The appeal was dismissed with costs. The case centred on whether the registered owner and demise charterer of the vessel had granted an extension of the time limitation to sue on the contract evidenced by the bill of lading. The primary judge found that both the registered owner and the demise charterer had granted the extension. The appeal court found no error in the primary judge's factual findings and concluded that Ixom's claims were without merit.

The court examined whether, by granting an extension of time to sue, the registered owner represented that it was the proper party to sue, and thus estopped from denying liability. The court found that the representation must be clear and unambiguous to found an estoppel. The subjective understanding or memory of the representee was irrelevant to determining the content of the representation. The court concluded that the primary judge was correct to dismiss Ixom's claims, including the misleading and deceptive conduct claim.

The appeal was dismissed and Ixom was ordered to pay the respondents' costs. The court's reasoning was based on the objective interpretation of the representation made by the registered owner and demise charterer in extending the time limitation to sue, and the lack of any clear and unambiguous representation that the registered owner was the proper party to sue. The court found no error in the primary judge's factual findings or conclusions of law.

Orders

Orders of the court

1. The appeal be dismissed.

2. The appellant pay the respondents’ costs.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

The consignee appealed from the primary judge’s orders. At the conclusion of the hearing of the appeal, we dismissed the appeal with costs. Our reasons for making those orders follow.Background At all relevant times, the registered owner of the motor tanker CS Onsan was Blue One Shipping SA of Panama and the vessel was demise-chartered to CS Marine Co Ltd of Korea. CS Marine voyage-chartered the vessel to Trammo Navigation Pte Ltd on an amended ASBATANKVOY tanker voyage charterparty form for the carriage of a cargo of sulphuric acid from Onsan, Korea, to Gladstone, Queensland. Trammo had sold the cargo of sulphuric acid on CFR (cost and freight) terms to Ixom Operations Pty Ltd in Australia. A non-negotiable tanker bill of lading dated 22 May 2017 was issued to Trammo as shipper. It named Ixom as consignee. It was signed by the Master of the vessel and stamped with the Master’s seal reflecting “M/V CS ONSAN – CS MARINE”: One might have thought that that made it abundantly clear that the Master signed the bill of lading on behalf of an entity called, or trading by the name of, “CS Marine”. Ex facie the bill of lading, the entity going by the name CS Marine was unambiguously the carrier. After the vessel arrived at Gladstone on 6 June 2017, Ixom complained that the cargo was contaminated. That in turn gave rise to the following events. Solicitors were appointed Mr Tulloch, of the solicitors’ firm Colin Biggers & Paisley, was appointed by and acted for Ixom. Mr Hunt, of the solicitors’ firm Mills Oakley, was appointed and acted for Vero Insurance, Ixom’s cargo insurer. As will be seen, after Vero paid Ixom’s claim for its insured losses, Mr Hunt took over the pursuit of any claim for cargo damage in Ixom’s name under subrogated rights. Mr Hockaday, of the solicitors’ firm Thynne + Macartney, was appointed and acted for Blue One and CS Marine on the instructions of The Japan Ship Owners’ Mutual Protection & Indemnity Association (Japan P&I) with which both Blue One and CS Marine were entered as members.The inter-solicitor correspondence Shortly after being appointed, Mr Tulloch noted that the voyage charterparty named CS Marine as “Owner” and that the bill of lading was signed by the Master under the seal of CS Marine. As Mr Tulloch did not know whether the vessel was demise-chartered, in writing to the vessel’s agent in Gladstone on 15 June 2017 he demanded security for Ixom from the “owners/demise charterers” of the vessel. (J[51]-[53].) On 16 June 2017, Mr Tulloch and Mr Hockaday had a conversation in which the latter said that he acted for “owners”. Later that day, in an email to Mr Tulloch, Mr Hockaday confirmed that he acted on behalf of “vessel interests”. (J[54], [56].) On 20 June 2017, Mr Hockaday said in an email to Mr Tulloch that “CS Marine Co Ltd, the demise charterer of the vessel”, undertook to give 24 hours’ notice of any intended departure of the vessel from Gladstone. Attached to the email was a signed letter of undertaking on the letterhead of CS Marine which stated that “CS Marine Co Ltd, on behalf of the owners and demise charterers of the vessel ‘CS Onsan’” gave the undertaking. (J[60]-[62].)

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Finally, there is the misleading and deceptive conduct claim. It rests on the contention that the 25 May 2018 email represented that the registered owner was the carrier. That has already been disposed of. The primary judge was correct to dismiss that claim.Conclusion For those reasons, the appeal was without merit and was dismissed with costs.

Ratio Decidendi

Legal Principle Established

With regard to its submission that the primary judge made errors in his factual findings, Ixom applied for leave during the hearing of the appeal to amend its notice of appeal by adding a ground expressed as follows: The primary judge was in error in finding that Mr Tulloch understood that Thynne + Macartney also acted for CS Marine when he asked for and obtained the extension of time on 23 and 25 May 2018 and that it was an error to rely on communications to Mr Tulloch in 2017 which Mr Tulloch had forgotten.Consideration The problem at the heart of Ixom’s case is its reliance on the subjective understanding, and recollection, of Mr Tulloch and Mr Hunt as informing the construction and nature of what was represented by the relevant emails. That approach is incorrect. A representation must be clear and unambiguous in order to found an estoppel: Legione v Hateley [1983] HCA 11; 152 CLR 406 at 435-6 per Mason and Deane JJ. That requires that the representation be of such a nature that it would have misled any reasonable person in the position of the person to whom it is addressed and that the representee was in fact misled by it: Western Australian Insurance Co Ltd v Dayton [1924] HCA 58; 35 CLR 355 at 375 per Isaacs ACJ, citing Low v Bouverie [1891] 3 Ch 82. Identifying the content of a representation is an objective task that is informed by the context in which the alleged representation takes place as well as the “known characteristics of the actual representee”: MCI WorldCom International Inc v Primus Telecommunications Inc [2004] EWCA Civ 957; [2004] 2 All ER (Comm) 833 at [30] per Mance LJ (Ward LJ and Sir Martin Nourse agreeing). Contrary to Ixom’s submissions in reliance on this passage, the “known characteristics of the actual representee” do not, and cannot, include the subjective understanding, belief or memory of the representee unknown to the representor; “known” here must mean known to the representor, not subsequently known to the court. The purpose underlying the common law principle of estoppel by representation (a form of estoppel in pais) is to avoid or prevent the representee suffering a detriment if the representor were allowed to depart from the assumption conveyed by the representation on which the representee acted: Grundt v Great Boulder Pty Gold Mines Ltd [1937] HCA 58; 59 CLR 641 at 674 per Dixon J. That is why the representation must be so clear and unambiguous that a reasonable person in the position of the parties would have understood it in the sense that, subjectively, the representee asserts that he or she did. It is only if a reasonable person in the representee’s position could have understood the clear and unambiguous representation in the sense that the representee claims that the law will hold the representor bound to adhere to the assumption. Thus, the sense in which a representation is actually understood by the representee is only relevant to the question whether the representation induced the representee to act upon it. That point was made in Krakowski v Eurolynx Properties Ltd [1995] HCA 68; 183 CLR 563 at 576-577 per Brennan, Deane, Gaudron and McHugh JJ in the context of a fraudulent representation, but it applies equally in the case of an estoppel by representation where there is no suggestion of fraud. That is to say, the representee’s subjective state of mind goes to the question of whether they were misled, not to the content of the representation. It is therefore not to the point what Mr Tulloch or Mr Hunt actually understood or remembered in determining what, if any, representation was made by the exchange of emails separate from the terms of the contract that was thereby concluded.