Mooloolaba Slipways Pty Ltd v The Owners of the Ship “Santa Maria”

[2001] QSC 470

SUPREME COURT OF QUEENSLAND

CITATION:

Mooloolaba Slipways Pty Ltd v The Owners of the Ship “Santa Maria” & Anor [2001] QSC 470

PARTIES:

MOOLOOLABA SLIPWAYS PTY LTD
(ACN 079 151 107)
(plaintiff)
v
THE OWNERS OF THE SHIP “SANTA MARIA”
(defendant)
THE MARSHAL OF THE SUPREME COURT OF QUEENSLAND
(defendant added by counter-claim)

FILE NO/S:

S 10588 of 1999

DIVISION:

Trial Division

PROCEEDING:

Civil Trial

ORIGINATING COURT:

Brisbane

DELIVERED ON:

10 December 2001

DELIVERED AT:

Brisbane

HEARING DATE:

10 September 2001

JUDGE:

Philippides J

ORDER:

Judgment for the defendant added by counterclaim against the defendant

CATCHWORDS:

NEGLIGENCE – claim against Marshal in respect of  flooding of vessel under arrest - whether Marshal negligent in the care of the vessel while under arrest - whether Marshal negligent in failing to attend to stern gland.

ADMIRALTY -  arrest - whether Marshal negligent in the care of the vessel while under arrest – whether Marshal negligent in failing to attend to stern gland.

Admiralty Rules 1988, r 47(2)

Dick v “The Percy and Jean” (unreported, Tas SC 140, 5/10/00)

COUNSEL:

AW Duffy for the plaintiff

PA Freeburn for the defendant by counterclaim

SOLICITORS:

Thynne & Macartney for the plaintiff
Mr Cassells appeared on behalf of the defendant
C W Lohe Crown Solicitor for the defendant by counterclaim

PHILIPPIDES J:

Introduction

1. The plaintiff, Mooloolaba Slipways Pty Ltd, commenced an action against the owners of the ship “Santa Maria” for $19,675.87 for services rendered in the repair of the vessel.  A warrant for the arrest of the ship “Santa Maria” was issued in respect of that claim, pursuant to which the vessel was arrested at the Raptis Wharf.

1. At the commencement of the trial, the plaintiff’s claim against the defendant and the defendant’s counterclaim against the plaintiff were settled.  What remains for determination is the defendant’s claim against the defendant added by counter-claim, the Marshal of the Supreme Court.  It is alleged that whilst the vessel was under arrest, the engine room of the vessel became flooded, the flooding being caused by the negligence of the Marshal.  The defendant alleges that by reason of the flooding, loss and damage was sustained, being repair costs and the loss of the use of the vessel for one month, resulting in a loss of profit of $49,000.  The vessel was apparently used in tuna long line fishing.

1. The vessel was arrested on 7 December 1999.  Those primarily involved in the arrest of the vessel were the Marshal Mr Neil Hansen, Mr Bill Brancatella, who was retained to skipper the vessel, and Mr Ron Marshall, who was retained to act as a marine engineer.  The repairs in respect of the flooding were completed on 15 December 1999 and the vessel was released from arrest on 24 December 1999.

1. The allegation of negligence pleaded against the Marshal is that he failed to:

(a)        take adequate care of the vessel;

(b)        have any or any adequate regard for the defendant’s warning that there was need for adjustment of the stern gland of the vessel;

(c)        ensure that any or adequate inspections were carried out on the vessel whilst the vessel was under arrest.

1. In his defence, the Marshal, while admitting that damage resulted from the flooding of the vessel, denies that he failed to take any or any adequate care of the vessel and alleges that the damage was caused or contributed to by the plaintiff’s negligence in failing to secure or warn about the stern gland. The Marshal alleges that he had requested information regarding the vessel’s state of repair, and was told only that shore power was necessary to keep bait frozen.  Additionally, the Marshal alleges that no warning was given of the need to adjust the stern gland on the vessel, and further that a marine engineer was employed who carried out proper inspections.

THE EVIDENCE

Evidence of Mr Cassells

1. Mr David Cassells, the principal of Somen Pty Ltd, the owner of the ship, both conducted the case for the defendant and gave evidence.

1. Mr Cassells gave evidence that he was present on the vessel when the Marshal, Mr Hanson, arrested the vessel.  He indicated to the Marshal that he was confident that the plaintiff’s claim could be resolved in a short time.  However, the Marshal stated he was required to proceed with the arrest of the vessel. 

1. Mr Cassells stated that he pointed out to both the Marshal and the engineer that he was concerned about the safety and integrity of the vessel, and in particular that he and the vessel’s skipper, Mr Hayes, told the Marshal and the engineer of the need for adjustment of the stern gland of the vessel.  However, Mr Cassells alleged that the Marshal was more intent on getting everybody off the vessel and directed them all to leave. Mr Cassells stated that he also took the engineer down to the area where the adjustment was necessary, and showed him how to access the area, as well as how to adjust the stern gland and the tools needed to do that.

1. Mr Cassells stated that the stern gland is a common piece of machinery that is fitted to a propeller shaft to stop water egressing along the shaft and to the bilge.  Mr Cassells gave evidence that prior to the arrest, the vessel had only just returned from fishing operations with not long discharged product, and was going to be laying up for several days.  Adjusting the stern gland was something that had to be done as part of the usual course of action that would normally be taken when laying the vessel up after returning from fishing operations.  Mr Cassells stated that this was “the main thing we were concerned about”, and “something we do all the time when the vessel returns from sea”.

1. Mr Cassells gave evidence that forty-eight hours after the arrest, he was notified by his broker that there had been flooding of the ship’s engine room and, upon ringing the Marshal to confirm this, was told that there had not been a ship’s keeper on the boat.  It is common ground that, although a ship’s keeper was employed after the flooding, no ship’s keeper was employed by the Marshal from the time the ship was laid up to the time it was flooded.  Mr Cassells gave evidence that the vessel had an operable bilge alarm, which any competent ship’s keeper would hear if the water in the bilge rose to an unsafe level.

Evidence of Mr Barrett

1. Mr Barrett, who was called by the defendant, is a principal and director of CHS Marine Pty Ltd, accredited marine surveyors, and, after inspecting the vessel on 22 February 2001, compiled a report dated 2 March 2001 on the flooding of the engine room of the ship.  In compiling the report he had reference to statements he had taken from the Master, the owner and the Queensland Transport Department file on the vessel.  He did not interview Mr Hanson or Mr Marshall for the report.

1. Mr Barrett’s report notes that the normal operation of the stern gland allows a trickle of water through the gland to provide lubrication for the stern gland packing, the water’s source being through a pressure-fed feed line when the shaft is being rotated by the main engine, or through the head of water to sea level when the shaft is stopped. 

1. Mr Barrett also notes in his report that it was reported to him by the owner and skipper that, prior to the arrest, the vessel’s stern gland was leaking at a rate greater than usual on arrival at the Raptis Wharf and that since the crew’s priority was to unload the catch, no opportunity to tighten the stern gland packing had occurred, with the engine room bilge level still below alarm level and so considered to be manageable under normal circumstances.  The leakage problem was such that, according to Mr Barrett, the stern gland was noted on the ship’s repair schedule in the master’s log book as requiring packing.

1. Mr Barrett stated that Mr Cassells had instructed him that, prior to disembarking from the vessel, both he and the skipper had advised the Marshal that certain procedures to ensure the safety and well-being of the vessel and its equipment would have to be adhered to in their absence, one of these being that the stern gland had to be nipped or tightened.   Mr Barrett noted in his report that he was told that both Mr Cassells and the Master had offered their services to the Marshal, but that these offers were summarily rejected out of hand.

1. Mr Barrett stated in his report that he considered that good marine engineering practice and vigilant ship-keeping by competent persons would have prevented the flooding.  Mr Barrett also gave evidence that it would be standard procedure and good marine engineering practice to check the stern gland and the engine room bilges upon taking control of a vessel, irrespective of what the Marshal was told by those on board.

1. Mr Barrett stated that the flooding in the engine room would have been about 21,500 litres over about 48 hours and was a significant leak.  It equated to about eight litres a minute as opposed to two to three litres a minute for a normal trickle of water.  Mr Barrett considered that if it had been attended to within the first eight hours the flooding could have been stemmed.

Evidence of the Marshal, Mr Hanson

1. Mr Hanson, who has been the Marshal of the Supreme Court of Queensland since 1998, gave evidence that he had received a request from solicitors on behalf of Mooloolaba Slipways to execute an arrest warrant for the vessel.  On 7 December 1999, at approximately 6:50 a.m., he was advised that the vessel had come into port at Raptis Wharf.  He made preliminary arrangements to move the vessel if necessary and arranged two crew members from Mooloolaba Slipways, as well as an engineer, Mr Marshall, and a skipper, Mr Brancatella. When asked about his awareness of the skipper’s and engineer’s qualifications, Mr Hanson said that Mr Brancatella’s qualifications were made clear to him at Aluminium Fast Ferries, where they forwarded his skipper’s ticket to him.  As for Mr Marshall, Mr Hanson said that he was told by Aluminium Fast Ferries that he was a marine engineer, although he did not receive any evidence of his qualifications.   Mr Hanson had used Mr Marshall previously in moving a vessel.

1. Mr Hanson explained that his decision to move the vessel from Raptis Wharf to Cairncross Wharf was based on his observations of the way the boats were moored at the wharf on the morning of the arrest.  In cross-examination, Mr Hanson accepted that at the time of the vessel’s arrest, he had only had about twelve months’ experience of arresting vessels, during which time he had arrested about three other vessels.  Mr Hanson also accepted that at the time of arresting the vessel, he had had virtually no experience in employing a crew.

1. Mr Hanson said that after executing the arrest warrant, he informed Mr Cassells of his intention to move the vessel to Cairncross Wharf, and asked him whether there was anything he needed to know in order to do that.  He recalls that Mr Cassells’ response was “no”, or “not much at all”, and that Mr Cassells then told him that he had bait in the forward hull, for which he would need shore power to keep the freezer working. Apart from this, Mr Hanson’s evidence was that no other instructions or warnings were given to him about what needed to be done to the vessel.  Mr Hanson denied that Mr Cassells and the skipper pointed out to him their concerns about the integrity of the vessel or that there was any discussion about adjustment of the stern gland or any such matter in relation to the laying up of the vessel.

1. Mr Hanson’s evidence is that he referred to the possibility of putting a ship’s keeper on the vessel, as opposed to shutting it down totally.  He said that Mr Cassells said that there was no need to move the vessel and that Mr Cassells insisted that it would be sorted out in a very short period of time.  This apparently was the basis for the Marshal’s decision not to employ a ship’s keeper, since given Mr Hanson’s comments, the Marshal did not expect that he would have the vessel under arrest for more than 24 hours.  

1. In cross-examination, Mr Hanson agreed that he did not contact the Transport Department to advise them of his intention to move the vessel.  He indicated that he was not aware of Queensland Transport requirements for the moving of vessels and was not aware whether the flooding of the vessel was a marine incident reportable under the Transport Operations (Marine Safety) Act 1994.

1. Mr Hanson said that at Cairncross Wharf, the shipwrights from Mooloolaba Slipways advised him as to how to secure the vessel.  He said that they locked all the doors of the wheelhouse, and secured the back hatch with new padlocks that Mooloolaba Slipways had brought with them.  Mr Hanson gave evidence that Cairncross Wharf ran a private security service, involving a boom gate which regulates access, and that on weekends, one-hourly rounds of the premises are conducted.

1. Mr Hanson accepted that he did not have any particular marine experience, and that this was why he had retained Mr Marshall.  He said that he stayed in the wheelhouse for most of the time while the vessel was being shut down.  He gave evidence that Mr Marshall “pointed out that there was a fair bit of water in the bilge and that we should pump that out before we left the vessel”.  Mr Hanson said that the water was then pumped out.  Once Mr Marshall confirmed that everything was right to leave, they went through the back hatch, closed it, and then Mr Hanson put a padlock through it.

1. On the morning of 9 December 1999, while Mr Hanson was on his way to the vessel, he received a call that the vessel was flooded.  When he arrived on the outer wharf to investigate it, he found a crane positioned at the stern of the vessel, with work being undertaken to pump the water out and do repairs.  Upon investigation, the water was found to be coming from the stern gland, under the crew’s quarters in the aft of the vessel.  The stern gland was then adjusted.

1. Mr Hanson then arranged a ship’s keeper for the vessel, explaining that due to the amount of water that had come into the vessel in the two days, he needed someone to keep an eye on the water levels.  Mr Hanson recalled going to check on Mr Nelson, the ship’s keeper, on Friday 10 December, and that Mr Nelson called him later that day, telling him that water had ingressed again up to the bottom of the stern gland.  Mr Hanson asked Cairncross Wharf to pump it and they readjusted the stern gland again.  From that point on, Mr Hanson said that although there was still water, it never rose up to any major level after that readjustment of the stern gland.

1. Mr Hanson gave evidence that no inspection of the vessel was made between the time the vessel was secured on 7 December and the time the flooding was discovered on 9 December, and that he had not reviewed his decision not to employ a ship’s keeper during that period.

1. Mr Hanson attended the vessel on 21 December, and because there had been some time since there had been any ingress of water, Mr Hanson discharged the ship’s keeper.  Mr Hanson boarded the vessel after the ship’s keeper left, and when trying to lock the vessel up again, he observed some damage to the padlock.  Mr Hanson noted that there were smash marks on the lock, as though it had been hammered with something.

1. Mr Hanson stated that the repair costs as a result of the flooding were about $11,691, and that this was part of the amount that was demanded for release of the vessel.  Mr Hanson said he received $4,191 from the insurer in respect of the flooding incident, being $11,691 less the $7,500 excess.[1]  On 24 December the vessel was released from arrest to Mr Cassells.

[1]See Exhibit 5

Evidence of Mr Marshall

1. Mr Marshall, a marine diesel mechanic by occupation and a marine engineer by qualification, gave evidence of receiving a call from Mr Hanson regarding the arrest of the “Santa Maria”.  He was asked to attend at Raptis Wharf at midday and was employed to act as the engineer on board the vessel.

1. Mr Marshall’s evidence was that he did not receive any instructions about the running of the vessel from Mr Cassells or his skipper, and was not taken down to be shown the different parts of the vessel, nor was he given any warnings or instructions about the stern gland or shown how to tighten it by Mr Cassells or his skipper.  He did recall being told the vessel needed to be hooked up to power because there was bait on board.  He denied that he was introduced to the skipper of the vessel and said he did not have any discussions with him, although he recalled seeing a man in the wheelhouse.  Mr Marshall denied that the skipper had to show him how to start the engine, and explained that they couldn’t start the engine because the compressed air was insufficient.

1. Mr Marshall said that the vessel was moved to the Cairncross holding dock, where they set about securing the vessel.  He noted that after having tied the vessel up, there was some problem in connecting shore power, which was ultimately sorted out. In cross-examination, Mr Marshall agreed that it was his duty to see that everything in the engine room was safe.  He said he attended to this after the main engine was shut down and everything secured, by inspecting the main engine room and checking that there was no water pouring in from any part of the vessel.  Mr Marshall said he checked the stern gland, and noted that it had a “small weep”, which was “just a dribble”, and “nothing to be concerned about”.  He recalled that Mr Hanson put locks on the doors after everything else was completed and that it was late afternoon when they left.

1. Mr Marshall gave evidence that no one attended the vessel on 8 December 2001.  On 9 December 2001, Mr Marshall went to the wharf to check on the vessel, whereupon he found the vessel taking in water, and the engine room flooded.  He said that he then rang Mr Hanson and it was arranged that Forgacs supply pump, equipment and drums to pump the water from the engine room.  After the pumping was completed, he said that he and Mr Hanson inspected the vessel and found that it was taking in water from the stern gland.  He said that he then secured the stern gland with a spanner, and locked it up “fairly tight”.  Mr Hanson observed this and it succeeded in stopping the water altogether.  Mr Marshall said that he was not aware of any further leaking from the stern gland after that occasion.

Evidence of Mr Brancatella

1. Mr Brancatella, who has a master mariner qualification as a master coxswain, which is a lower qualification than a skipper Grade 2, gave evidence that he skippered the vessel after its arrest.

1. Mr Brancatella said he did not recall there being any specific warnings about a leaking stern gland or any problems with the vessel, although he did recall someone, who may have been the owner or skipper, saying on leaving the vessel something to the effect of  “if you take the boat it’s your responsibility”.  He said that neither he nor the Marshal were shown anything specific about the operation of the vessel.  Mr Brancatella assisted with the starting of the vessel, and its movement to Cairncross Wharf.  He did not notice that the vessel took in any water in the trip up the river to Cairncross Wharf, although he stated that when he was in the engine room he noted water in the bilge system in the compartments.  However, when the vessel was moored there was no alteration in the level of water.  The vessel was tied up at the wharf.  Mr Brancatella assisted Mr Hanson and Mr Marshall to secure the vessel.

Relevant Legal Principles

1. A Marshal who arrests a vessel has custody but not possession of the vessel.[2]  Accordingly, since possession and a right to possession are the essence of bailment,[3] the Marshal is not a bailee and does not undertake the obligations of a bailee. However, r 47(2) of the Admiralty Rules 1988 requires the Marshal to take all appropriate steps to retain safe custody of, and to preserve, the ship or property. It was submitted that those words do not suggest a greater duty than a duty to act reasonably in the circumstances. It was accepted by counsel for the Marshal that the Marshal has a duty to take reasonable care in the care of the vessel.

[2]See r 47(1) of the Admiralty Rules 1988 (Cth); Cremean, “Admiralty Jurisdiction Law and Procedure” at 125; Meeson, “Admiralty Jurisdiction and Practice” (London) at 124.

[3]Bullen Leake & Jacob’s Precedents of Pleadings (13^th ed) at 71.

Allegations of negligence

1. The pleaded allegations of negligence are that the Marshal failed to:

(a)        take adequate care of the vessel;

(b)        have any or any adequate regard for the defendant’s warning that there was need for adjustment of the stern gland of the vessel;

(c)        ensure that any or adequate inspections were carried out on the vessel whilst the vessel was under arrest.

1. Additional matters are raised in Mr Barrett’s report, although not particularised in the defendant’s pleading; namely:

(a)        that a qualified and competent engineer would carry out rounds at the time of boarding and would recognise that a flooding hazard existed at the stern gland and take the necessary action to arrest the leak;

(b)        that no ship-keeping watchman was engaged on the arrested vessel until after the flooding was discovered, in circumstances where bilge level alarms would have warned any competent ship-keeper of an impending need to pump bilges; and

(c)        that no marine incident report was compiled contrary to statutory requirements.      

The Instructions to Adjust the Stern Gland

1. It was contended on behalf of the Marshal that the only warning given to him and his staff was that shore power was needed to keep the bait frozen, and that the evidence of Mr Hanson and his staff should be preferred to that of Mr Cassells, who it was said gave different versions of what he said to the Marshal and his staff. 

1. In Mr Cassells’ discussions with Mr Barrett, as reported in Mr Barrett’s report,    Mr Cassells said that he attempted to give a warning about the stern gland but was prevented from doing so.  This version was inconsistent with his oral evidence that in addition to giving instructions concerning the stern gland he also was able to show the engineer how to adjust it.  Mr Cassells had difficulty with some aspects of his recollection of the discussions at the time of the arrest of the vessel.  They were not as detailed as the account he gave Mr Barrett which is recorded in Mr Barrett’s report.  Mr Cassells’ evidence as to the warning given about the stern gland is contradicted by all the other witnesses present at the time of arrest who gave evidence.  The defendant’s skipper, Mr Hayes, did not give evidence.

1. Mr Cassells’ claim that he in fact showed the problem with the stern gland to the engineer was not pleaded and is denied by Mr Marshall.   Furthermore, Mr Cassells’ version of the problem with the stern gland itself is inconsistent, in that he claimed in evidence that all that was required was a normal adjustment of the stern gland and yet he told Mr Barrett that the stern gland was leaking at a greater rate than normal and that it needed repair.

1. In all the circumstances, I am unable to accept that either Mr Cassells or his skipper  told the Marshal, or the engineer engaged by the Marshal, of the need to adjust the stern gland, or that the engineer was shown how to do so.

The Failure to Adjust the Stern Gland in any Event

1. Mr Cassells submitted that it was good ship-keeping practice to maintain the water-tight integrity of a vessel, and that the Marshal failed to do so by not adjusting the stern gland upon the laying up of the vessel.  Mr Barrett also gave evidence that it was standard procedure and good marine engineering practice to check the stern gland and the engine room bilges upon taking control of a vessel, irrespective of what the Marshal was told by those on board.

1. Mr Marshall’s evidence is that upon inspection on 7 December 1999, he did see a very small or minor dribble of water coming in through the stern gland, but his opinion was that it was nothing to be concerned about and in his experience the dribble was not unusual for vessels of this type.  I accept that evidence.  There is no suggestion that a leak of such a minor degree was capable of causing the flooding of the magnitude that occurred, quite to the contrary.  Nor is there evidence that it was negligent to fail to adjust the stern gland in those circumstances, especially given the evidence of the Marshal that the bilges were pumped out on 7 December before the Marshal and the others left in the late afternoon.

The Failure to Inspect the Vessel/Engage a ship’s keeper before 9 December 1999

1. Mr Cassells submitted that if inspections had been carried out during the period before 9 December 1999 the flooding would have been detected.  In addition, Mr Cassells submitted that had there been a ship’s keeper on the boat at all times, he would have been warned of the flooding in the engine room by the bilge alarm.  Mr Cassells submitted the Marshal’s failure to do both or either was negligent.

1. The Marshal’s conduct in not installing a ship’s keeper on the vessel on 7 or 8 December 1999 must be seen in light of the fact that the vessel had been inspected on 7 December and there was no reason to suspect there was any problem with the vessel, the wharf at which the vessel was moored had security, the Marshal anticipated the vessel might be released from arrest quickly, and both the Marshal and the engineer were to inspect the vessel on the morning of 9 December.  In those circumstances, I do not consider the failure to install a ship’s keeper on the vessel in the period leading up to the flooding as negligent. 

1. Nor do I consider, given the circumstances I have referred to, that the failure to further inspect the vessel prior to the flooding was negligent.  As I have mentioned, on 7 December 1999 the vessel was inspected and a very small weeping in the stern gland was noted.  The water in the bilges was pumped out.  The Marshal and his staff left late in the afternoon. 

1. I note that according to Mr Barrett, the damage could have been prevented if the flooding had been attended to within the first eight hours.  However, given that the Marshal left the vessel late in the afternoon of 7 December, and that there was no reason to suspect any serious leakage would occur, I do not consider the Marshal’s conduct to have been negligent.

The Qualifications and Compliance of those involved in the arrest

1. I note that the competence and lack of qualifications of those involved in the arrest is not a pleaded allegation of negligence.  In this context, Mr Cassells questioned the qualifications and competence of Mr Marshall who was engaged to act as the marine engineer, and in particular raised the fact that Mr Marshall did not hold a Marine Engine Driver’s Certificate, Grade 3, which he was required to hold in the circumstances.  However, the failure to hold such a certificate was not a matter which contributed to the damage.  Likewise, Mr Brancatella gave evidence that he was not aware that as the vessel was a commercially-registered vessel, there was a minimum requirement that for the voyage to the Cairncross Wharf it be skippered by a skipper Grade 2.  I do not consider that the fact that Mr Brancatella held qualifications as a coxswain as opposed to a skipper Grade 2 was causative of any damage.

1. In addition, Mr Cassells referred to the fact that Mr Marshall gave evidence that he had not shut off the main sea cocks on the main engine when he left the vessel.  However, this matter was not raised in the context of being causative of the flooding but rather as indicating lack of competence.  I do not consider that any of these issues are relevant to the issue of negligence.

1. In the same category is the allegation that the flooding incident should have been reported to the Department of Transport.  Mr Cassells gave evidence that there were statutory requirements for the reporting of an incident such as the flooding of an engine room to the Transport Department as a marine incident.

Conclusion as to Negligence

1. Accordingly, I find that the Marshal was not negligent in the care of the vessel while under arrest.

Quantum

1. For completeness, I make the following findings in relation to quantum, in the event that I am incorrect in my conclusion as to liability.  As to the cost of repair, the vessel was insured by the Marshal in the Marshal’s name.  The flood repairs of $11,691 were billed to and paid for by the Marshal or his insurers.  The Marshal added that amount to the charges against the vessel and subsequently refunded to Mr Cassells $4,191, being the $11,691 less the excess of $7,500.  Accordingly, the defendant’s only loss in respect to the repair costs is $7,500.

1. As regards the claim for loss of use of the vessel, counsel for the Marshal outlined two difficulties with it.

1. Firstly, it was said the flooding did not result in any loss of use of the vessel, since the vessel was arrested on 7 December and was repaired by 15 December, some eight days later.  However, the vessel was not released until 24 December.  It was therefore submitted that it was the arrest of the vessel, rather than the flooding and repairs, which caused any loss of use.  Mr Cassells appeared to concede that there was only a week or so between the finalising of the account for repairs and the release of the vessel. 

1. Secondly, it was submitted that the defendant was not and has not traded profitably so that it cannot have suffered any loss of profit.  The evidence showing the defendant’s  lack of profitability is as follows:

(a)        Somen Pty Ltd’s profit and loss statement for the year ended 30 June 2000[4] shows a loss of $18,428 in the 1999 financial year and a loss of $169,771 in the 2000 financial year;

[4]See first two pages of ex 2.

(b)        Somen Pty Ltd’s profit and loss statement for the three months to 30 September 2000 shows a loss of $21,318;[5]

[5]See ex 2.

(c)        There are no records at all showing a profitable business;

(d)        The three bank statements produced[6] show a starting point of nil on 30 April 1999 and a finishing point of DR$31,605 on 20 September 1999; no other bank statements have been produced;

[6]See ex 3.

(e)        Cardinal Seafoods, the defendant’s main customer, was driven to issue an application for winding up of the defendant in May this year over a debt of $22,000;

(f)        The receipts for seafood catch have been variable but have never got close to the levels claimed in the counterclaim of $96,000 per month gross;

(g)        The catch records indicate that, before the arrest, the monthly catch was $21,352 for August, $22,996 for September, $17,822 for October and $55,059 for November 1999, an average of $29,307 per month.  According to the profit and loss statement for the year ended 30 June 2000, the annual expenses were $690,871 or $59,000 per month. Therefore, in none of the four months preceding the arrest did the vessel’s catch exceed its average expenses and the vessel was not operating profitably.

1. In the circumstances, the plaintiff has not satisfied me that there was any loss of profits suffered as a result of the flooding, and the only loss suffered as a result of the flooding was the repair costs of $7,500.

Order

1. I order that judgment be given for the defendant added by counterclaim against the defendant.  I shall hear the parties as to costs.