PNSL Berhad v Deutsche Morgan Grenfell Leasing P/L
[2001] QSC 429
•15 November 2001
SUPREME COURT OF QUEENSLAND
CITATION: PNSL Berhad v Deutsche Morgan Grenfell Leasing P/L & Ors [2001] QSC 429 PARTIES: P N S L BERHAD
(plaintiff)
v
DEUTSCHE MORGAN GRENFELL LEASING (ACT) PTY LTD (ACN 008 562 007) formerly known as
BAIN LEASING (ACT) PTY LTD
(first defendant)
and
DALRYMPLE MARINE SERVICES PTY LTD
(ACN 066 201 287)
(second defendant)
and
McILWRAITH McEACHERN OPERATIONS PTY LTD (ACN 005 244 995)
(third defendant)
and
ROY JOHN EISEN
(fourth defendant)
and
J D SMITH
(fifth defendant)FILE NO: S1843 of 1997 DIVISION: Trial Division PROCDEEDING: Applications for summary judgment.
DELIVERED ON: 15 November 2001 DELIVERED AT: Brisbane HEARING DATE: 13 September 2001 JUDGE: Philippides J ORDER: The applications for summary judgment filed on 27 July 2001 and 31 August 2001 are dismissed. CATCHWORDS: PROCEEDING – SUPREME COURT PROCEDURE – application for summary judgment – whether “no real prospect of succeeding” – whether issues between the parties should proceed to trial.
SHIPPING – TOWAGE – standard conditions of contract of towage – construction of UK Standard Towage Conditions - whether collision occurred “whilst towing” – whether triable issue as to whether tug in “position to receive orders direct from the hirer’s vessel to pick up ropes”.TRADE PRACTICES ACT 1974 – Consumer protection – whether implied warranty in towage contract – whether exclusion of warranty by UK Standard Towage Conditions – whether UK Standard Towage Conditions void as excluding restricting or modifying liability for breach of implied warranty – whether issue should proceed to trial.
Trade Practices Act 1974, s 68, s 74, s 74(1), s 74(2), s 4(3)(a)
Limitation of Liability for Maritime Claims Act 1989 (Cth)
Property Law Act, s 55
Uniform Civil Procedure Rules, r 292, r 293Australian Steamships Pty Ltd v Koninklijkejava-China Paketvaart Lynen NV Amsterdam [1955] VLR 108
British Transport Docks Board v Apollon (Owners) (The Apollon) [1971] 2 All ER 1223
Darlington Futures Limited v Delco Australia Pty Ltd (1986) 161 CLR 500
E v Australian Red Cross Society (1991) 27 FCR 310
Partafelagid Farmur v Grangemouth and Forth Towing Company Ltd [1953] 2 Lloyd’s Rep 699
Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon (Australia) Pty Ltd (1978) 139 CLR 231
Qantas Airways Limited v Aravco Limited (1996) ATPR
The Impetus [1959] 1 Lloyd’s Rep 269
The Kite [1933] P 154
The Undaunted (1886) PD 46
The Uranienborg [1936] P 21
Wallis v Downard-Pickford (North Queensland) Pty Ltd (1994) 179 CLR 388COUNSEL: J S Douglas QC with F D Asis for plaintiff
GA Thompson SC for first, second, fourth and fifth defendantsSOLICITORS: Thynne & Macartney for plaintiff
Allens Arthur Robinson for first, second, fourth and fifth defendants
PHILIPPIDES J:
The Applications
On 28 February 1995, a collision occurred between the ship “Pernas Arang” owned by the plaintiff and the tug “Koumala” at a position off Hay Point, Queensland.
Proceedings were issued, in which the plaintiff claims, inter alia, A$289,243.19 as damages for the cost of repairs and other loss and damage, together with US$231,333 damages for loss of earnings.
On 27 July 2001, the first, second, fourth and fifth defendants, (“the respondents”) filed an application for summary judgment under r 293 of the Uniform Civil Procedure Rules (“UCPR”). On 31 August 2001, the plaintiff filed an application for summary judgment under r 292 of the UCPR against the respondents.
There is no dispute as to the following facts:
(a) At the time of the collision, the tug was owned by the first defendant[1] and operated by the second defendant as charterer.
[1]At the hearing of the applications, the plaintiff discontinued the proceedings as against the first defendant.
(b) At the time of the collision, the fourth defendant was the master of the tug and the fifth defendant was its engineer .
(c) The fourth and fifth defendants were the servants or agents of the second defendant.
(d) The second defendant was engaged by Adelaide Steamship Co Ltd, as agent of the plaintiff, to provide towage services to the ship.
(e) The tug owner contracted to undertake the towage in accordance with the United Kingdom Standard Conditions of Towage and Other Services (revised 1974), (“the UK Conditions”).
The pleadings raise the following issues; whether:
(a) the collision occurred as a result of the negligence of the respondents;
(b) the towage contract was subject to an implied term that the tug was seaworthy, and if so whether the collision occurred as a result of a breach by the respondents of that implied term;
(c) the towage was subject to the warranties implied by s 74(1) and s 74(2) of the Trade Practices Act 1974 (“TPA”), and if so, whether the collision occurred as a result of the breach of the above implied terms;
(d) clauses 4 and 8 of the UK Conditions attached or applied so as to exclude any liability to the plaintiff;
(e) cl 8 of the UK Conditions is void and /or ineffective as an attempt to oust the jurisdiction of the court;
(f) in so far as clauses 4 and 8 of the UK Conditions exclude liability, they are void by operation of s 68 of the TPA.
A further issue raised on the pleadings is the respondents’ entitlement to limit their liability pursuant to the Limitation of Liability for Maritime Claims Act 1989 (Cth). The plaintiff contends that the tug was not a “sea-going ship”, so that the respondents are not entitled to limit their liability pursuant to the Limitation of Liability for Maritime Claims Act 1989 (Cth). On the hearing of the applications, the parties were in agreement that it was not appropriate to deal with the limitation of liability issue in a summary manner.
On behalf of the respondents, it was submitted that the only issues capable of determination on the present applications are:
(a) whether the UK Conditions by clauses 4 and 8 apply to exclude the respondent’s liability and
(b) whether s 74 and s 68 of the TPA apply and, if so, what effect those provisions have upon the operation of the UK Conditions.
Counsel for the respondents submitted that the questions of whether any of the defendants were negligent or in breach of some implied terms of the towage contract, and the issue of whether the tug was unseaworthy, cannot be determined on a summary judgment application provided for in r 292 and r 293 of the UCPR, and that the applications should be adjourned with directions for trial. In this regard, it was submitted by Counsel for the respondents that the evidence in relation to those questions is controversial and gives rise to triable issues. The respondents allege that the collision resulted from the failure of the tug’s starboard generator, the cause of which was not discoverable by reasonable inspection. The second defendant contends that it engaged a competent contractor (Hastings Deering) in relation to servicing and maintenance of the generators aboard the tug. Moreover, the factual basis for the opinions expressed by Mr Pettit, a marine engineer and surveyor, whose affidavit evidence was relied upon by the plaintiff, are in issue.
Counsel for the plaintiff conceded that the respondents had raised a triable issue in respect of the condition of the vessel and the issues of negligence, such that the summary judgment application was not appropriate on those issues. It became apparent that, as the plaintiff’s counsel conceded, there would also need to be a trial on quantum, in respect of which the respondents objected to further affidavit material sought to be relied upon by the plaintiff.
Counsel for the plaintiff submitted that it was also not appropriate that the issue of whether the UK Conditions applied at the relevant time so as to relieve the respondents of liability be determined on a summary judgment application, because the issue raised questions of mixed law and fact, which were best determined at a trial. Counsel nevertheless submitted that the issue of whether the UK Conditions are rendered invalid by the TPA, could be determined separately.
Counsel for the respondents sought to have both these issues determined in the present applications.
The UK Conditions
The UK Conditions[2] materially provide:
[2]See affidavit of Freire, ex SLF 1
“1. The agreement between the Tugowner and the Hirer is and shall at all times be subject to and include each and all of the conditions hereinafter set out ...
(b) For the purpose of these conditions:
(i) “towing” is any operation in connection with the holding, pushing, pulling, moving, escorting or guiding of the Hirer’s vessel, and the expressions “to tow”, “being towed” and “towage” shall be defined likewise ...
…
(iv) The expression “whilst towing” shall cover the period commencing when the tug ….is in a position to receive orders direct from the Hirer’s vessel to commence pushing, holding, moving, escorting or guiding the vessel or to pick up ropes or lines or when the tow rope has been passed to or by the tug…whichever is the sooner….
(v)Any service of whatsoever nature to be performed by the Tugowner other than towing shall be deemed to cover the period commencing when the tug or tender is placed physically at the disposal of the Hirer at the place designated by the Hirer, or, if such be at a vessel, when the tug or tender is in a position to receive and forthwith carry out orders to come alongside and shall continue until the employment for which the tug or tender has been engaged is ended. ...
...
3. Whilst towing or whilst at the request, express or implied, of the Hirer, rendering any service other than towing, the master and crew of the tug or tender shall be deemed to be the servants of the Hirer and under the control of the Hirer and/or his servants and/or his agents, and anyone on board the Hirer’s vessel who may be employed and/or paid by the Tugowner shall likewise be deemed to be the servant of the Hirer and the Hirer shall accordingly be vicariously liable for any act or omission by any such person so deemed to be the servant of the Hirer.
4.Whilst towing, or whilst at the request, either express or implied of the Hirer, rendering any service of whatsoever nature other than towing:
(a)The Tugowner shall not be responsible for or be liable
(i) for damage of any description done by or to the tug ... or done by or to the Hirer’s vessel ...
... arising from any cause, including (without prejudice to the generality of the foregoing) negligence at any time of the Tugowner’s servants or agents, unseaworthiness, unfitness or breakdown of the tug or tender, its machinery, boilers, towing gear, equipment, lines, ropes or hawsers, lack of fuel, stores, speed or otherwise, and
(b)The Hirer shall be responsible for, pay for and indemnify the Tugowner against and in respect of any loss or damage and any claims of whatsoever nature or howsoever arising or caused whether covered by the provisions of Clause 4(a) hereof or not (including any arising from or caused by the negligence of the Tugowner or his servants or agents) including the loss of or damage to the tug or tender, provided that the Hirer shall not be liable to the Tugowner for or in respect of loss, damage or claims which the Hirer proves (the burden of proof being on the Hirer) to have been solely caused by the failure of the Tugowner, and due to the actual fault or privity of the Tugowner, to make his tug or tender seaworthy for the towage or service other than towage ...
...
8.The Hirer of the Tug ... engaged subject to these conditions undertakes not to take or cause to be taken any proceedings against any servant or agent of the Tugowner ... In respect of any negligence or breach of duty or other wrongful act on the part of such servant or agent which, but for this present provision, it would be competent for the Hirer so to do and the owners of such Tug ... shall hold this undertaking for the benefit of their servants and agents.”
Implication of a Term of Seaworthiness and the Issue of Unseaworthiness
The plaintiff alleged that it was an implied term of the towage agreement that tugs provided to complete the towage service would be seaworthy. In Further and Better Particulars provided by the plaintiff in response to a Request delivered in July 2000 it is said:
“It was an implied term of the agreement that the tugs provided to complete the towage service would be seaworthy, efficient and properly equipped for the service, that proper skill and diligence would be used on board the tugs, and that they would not create unnecessary risk to the vessel being towed or increase any risk incidental to the service and that the tugs would be as fit for the purpose of towing as reasonable care and skill could make them. The implications arose by reason of usage, terms implied by law and to give the agreement business efficacy.”
Counsel for the respondents submitted that while it was uncontroversial that, in the absence of an agreement regulating the rights and liabilities of the tug and tow, both may come under a duty to exercise reasonable care, where, as in the present case, those duties and the rights and liabilities of the parties inter se are regulated by agreement.
Counsel for the respondents submitted that the implication of a general requirement that the tug be seaworthy, beyond the limited terms expressed in cl 4(b), does not arise as a matter of law, nor is the implication of such a requirement necessary to give business efficacy to the contract. Indeed, the implication of such a term is directly contrary to the express provisions of cl 4(a), which excludes responsibility for damage arising from any cause, including unseaworthiness, unfitness or breakdown of the tug or its machinery.
Given that it is conceded that it is not appropriate to determine the issue as to whether the tug was unseaworthy at the relevant time, it is also suitable to leave for determination at trial the question of the implication of an implied term of seaworthiness.
The Application of Cl 4(a) of the UK Conditions
Counsel for the respondents submitted that cl 4(a) of the UK Conditions operates to exclude any liability for damage done by the tug to the ship arising from any cause, including negligence of the tugowner’s servants or agents, unseaworthiness, unfitness or breakdown of the tug or its machinery.
The plaintiff contends that cl 4 (a) of the UK Conditions does not apply on the facts of the present case, because the collision did not occur “whilst towing” within the meaning of that term in cl 4 of the UK Conditions.
Evidence of the instructions given via radio by the pilot, Captain Roscoe, to the two tugs attending the ship in relation to its berthing at the Hay Point coal terminal was given in the affidavit of Captain Roscoe.[3] His incident report[4] states:
[3]See affidavit of Roscoe 30.07.2001, para 3; see also affidavit of Eisen, para 5.
[4]See affidavit of Roscoe 30.07.2001, Ex SR1.
“The tugs attending the Pernas Arang were Koumala and Kungurri. The tugs were ordered to make fast starboard shoulder and starboard quarter, as a good lee was afforded on the starboard side. The Kungurri was observed to cross astern of the vessel from port to starboard to make fast on the starboard quarter. The Koumala crossed ahead of the vessel from port to starboard at approximately 90º to the course of the Pernas Arang and disappeared from view as she crossed ahead of the bow. The Koumala was then observed on the starboard side of the vessel and was turning to starboard quickly with clouds of black smoke emanating from both engine exhausts.
I enquired of the Koumala if she was on fire, the only reply received was from the skipper of the other tug with a remark about burning the toast.
Koumala was observed to turn through 180º and approached the starboard shoulder quite quickly, making contact with the ship’s starboard side. I asked the tug if there was something wrong and was then informed by the tug skipper that he had lost his steering and shortly after one engine was lost. The time of the impact was 0720 hours local time.”
Captain Eisen, who also prepared a marine incident report, materially stated that the pilot had instructed the tug to make fast forward on the starboard bow of the ship prior to the collision.[5] Captain Eisen describes the events leading to the collision in his affidavit.[6] He says that he acted on the instruction to make fast forward by starting to turn the tug around through 180º so as to bring it along side. About half way through this manoeuvre the tug failed to respond to the steering. An alarm sounded from the engine room. He believes the generator must have failed as all power on the tug was lost and he was unable to control the tug, which continued on the same path resulting in the tug colliding with the ship’s starboard shell plating. Power was regained after about 5 minutes and Captain Eisen was able to bring the tug alongside the ship and complete the docking process. According to Captain Eisen, the tug had steamed for some time prior to the collision, during which time a number of course alterations had been made without incident and there had been nothing to suggest that the tug had any mechanical defect.[7] He stated that the tug was properly maintained.[8]
[5]See affidavit of Eisen, Ex RJE 2.
[6]See affidavit of Eisen, para 6.
[7]See affidavit of Eisen, para 4.
[8]See affidavit of Eisen, para 11; see also affidavit of Friere para 5
It was initially contended by the plaintiff that the only order given at that time was one to make fast forward on the starboard bow and that was not an order described in the language of the UK Conditions. However, Captain Roscoe indicated in a further affidavit that the instruction to make fast was for the purpose of taking a line. In those circumstances, I am of the view that the order was one within the terms of cl 4(a) of the UK Conditions. In any event, it is fair to say that this was not the key contention of the plaintiff.
More importantly, it was submitted on behalf of the plaintiff that the tug was not in a position to receive orders in the relevant sense. This submission was premised on the allegation that at the relevant time the tug was manifestly unseaworthy and was thus not in condition “to receive orders direct from [the Ship] to commence pushing, holding, moving, escorting, or guiding [the Ship] or to pick up ropes or lines” before and when the collision occurred, either because of the steering failure or at all. It was submitted that the UK Conditions apply when the tug owner has fulfilled his duty as to the fitness of a tug when the towage service begins[9] and that that duty had not been complied with here. Reliance was placed on the affidavit of Mr Pettit,[10] who itemised three faults on the tug with the air filter, fuel lever and switchboard, that should have been checked and corrected before the incident and before the tug set out that day. It was thus argued that the tug was not in a “position”, in the sense that it was not in a condition, to receive and act upon orders that could be carried out, because of those problems that immediately led to its engine failure; that is, that the tug was not ready to respond to any orders to push, hold, move, escort, or guide the ship or to pick up lines.
[9]The Undaunted (1886) PD 46; Halsbury’s Laws of England 4th ed Vol 43, para 875; Halsbury’s Laws of Australia Vol 17, para 270-1470.
[10]See affidavit of Mr Pettit at paras 7, 8, 9 and 10.
In support of its submissions, the plaintiff relies primarily on three cases. The plaintiff relies on the following passage in the The Uranienborg[11] as indicating that the word “position” in the definition of the term “whilst towing” is not confined to geographical position:
“I doubt whether the word “position” is only used in the sense of local situation, I think it involves also the conception of the tug being herself in a condition to receive and act upon the orders. But however that may be, the orders which she is to be in a position to receive are orders to pick up ropes or lines – not orders generally, but those specific orders, and I think that that must have some reference to the intention of those on board the ship to give those orders, and to the readiness of those on board the tug to receive them.”
[11][1936] P 21, 27-29 per Merriman P.
In Australian Steamships Pty Ltd v Koninklijkejava-China Paketvaart Lynen NV Amsterdam,[12] Herring CJ considered that the word “position” had a meaning beyond that of geographical position:
“... In point of fact, a tow cannot, of course, commence until both the ship and tug are ready and I think one has to bear this in mind when seeking to interpret the condition . .... But the orders that a tug is to be in a position to receive are orders which can only be carried out when the tug is in a state of readiness, and this means both correctly positioned so far as the vessel is concerned and with everything ready on the tug itself to pick up the necessary ropes or lines. In my view the word “position” is not used solely with regard to matters of geography where the tug is placed vis-à-vis the vessel to be towed. This comes into the matter, of course, but there is also to be considered the question of the tug’s readiness to get on with the tow. ... The words “in a position to receive orders direct from the hirer’s vessel to pick up ropes or lines” are not strained by reading them in this way. After all, the condition has to be read in a document that is intended to deal with commercial realities and one would expect the parties to provide a commencing time for the tow that bore some real relation to the time at which the tug was ready to take its part in the tow by being correctly positioned and otherwise prepared.”
[12][1955] VLR 108, 112.
In addition the plaintiff refers to the following statement of Brandon J in British Transport Docks Board v Apollon (Owners) (The Apollon):[13]
“It seems to me that, for a tug to be in a position to receive orders direct from the hirer’s vessel to pick up ropes or lines, three conditions must be fulfilled. The first condition is that the situation is such that those on board the tug can reasonably expect the ship to give the tug an order to pick up ropes or lines. The second condition is that the tug is ready to respond to such orders if given. The third condition is that the tug should be close enough to the ship for the order to be passed direct; in other words, that the tug should be within hailing distance.
...
I turn to the second condition, that the tug should be ready to respond to the order. It is in relation to this condition that the precise facts with regard to the situation of the tug and those on board her are relevant. For the defendants it was argued that the tug was not ready to respond to an order for a number of reasons: first, because she was heading west; second, because she had lines out to the quay; third, because her crew were not at stations but assembled on the after-deck chatting; and fourth ... because she had to perform a manoeuvre before taking a line.”
[13][1971] 2 All ER 1223, 1227, but see the comments of Karminski J in the The Impetus [1959] 1 Lloyd’s Rep 269.
In that case, Brandon J held that the fact that the tug was heading west did not in any way make her unready to carry out the orders given, that there were no moorings out, that the master was on the bridge and tug’s crew were positioned so as to be able to respond. In any event, Brandon J held that if there were lines out, they would have been lines of a temporary character which could be cast off very rapidly when necessary, and that wherever the crew might have been on the deck of a small tug such as the one in question, it would take only a very short time for them to get to their stations to carry out any manoeuvre required.
In the present case, it was submitted on behalf of the plaintiff that the tug was not in a condition to receive orders up until the moment of engine failure, when various problems existed and remained unrectified. Nor was it in a position after its engine failed to receive any orders direct from the ship to push, hold, move, escort, or guide or to pick up ropes or lines. In this regard, the plaintiff relied on affidavit evidence as to the unpreparedness of the crew[14], which refers to the ship’s bosun’s observations immediately prior to the collision. According to the bosun who was on the starboard side of the ship as part of the mooring team, the tug’s crew did not appear to be ready to pass or receive any ropes or lines, as insufficient members of the tug’s crew were at that time in an appropriate position on the foredeck of the tug and the tug was behaving as if it was out of control.
[14]See affidavit of Fisher, para 7.
Counsel for the respondents contended that authorities such as Partafelagid Farmur v Grangemouth and Forth Towing Company Ltd, [15] Glen Line, Ltd v W.J. Guy & Sons (The Glenaffaric),[16] The Impetus,[17] The Australian Coastal Shipping Commission v The Owners Master and Crew of P.V.”Wyuna”[18]and British Transport Docks Board v Apollon (Owners) (The Apollon),[19] supported the conclusion that the reference in the UK Conditions to the tug being in a “position” to receive orders is a reference to geographical position, not some antecedent state or condition of the vessel. Accordingly, it was submitted that since there was an order direct from the ship given for the purpose of picking up ropes or lines to which the tug was responding, the collision occurred “whilst towing” within the meaning of that expression in the UK Conditions, and that, on the uncontroversial facts, the tug “was in a position to receive orders direct from the ship to pick up ropes or lines” when the collision occurred.
[15][1953] 2 Lloyd’s Rep 699.
[16][1948] P 159
[17][1959] 1 Lloyd’s Rep 269.
[18](1964) 111 CLR 303.
[19][1971] 2 All ER 1223, 1227 per Brandon J.
In my opinion, the authorities referred to by counsel for the plaintiff do not necessarily support the conclusion that the word “position” as used in the UK Conditions has a meaning which is confined to mere geographic position. Nor, in my opinion, can it be said that the argument, that the tug was not in a “position” to receive orders because of the alleged condition of the vessel, is one which has no real prospect of succeeding, such that there is no need for a trial. I note that the authorities referred to by counsel for the respondent as supporting the conclusion that the collision occurred “whilst towing” do not specifically deal with a situation such as allegedly occurred in the present case, where the question at issue is whether the tug’s physical condition was such as to preclude it from being in a position to receive orders. I note also that the plaintiff’s submission in this regard involves an overlap with its submission concerning the implication of a term of seaworthiness, which issue is to be proceed to trial. In addition, the plaintiff has raised the issue of the readiness of the tug’s crew, who it is alleged were attending to the failure on board the tug and accordingly were not ready to pick up lines prior to or when the collision occurred. In my opinion the issues raised are such as require investigation at trial.
In those circumstances, I do not consider it appropriate that the issue of whether cl 4(a) of the UK Conditions applies to exclude liability be determined on a summary judgment application.
Cl 8 of the UK Conditions
On behalf of the plaintiff it is contended that that the fourth and fifth defendants are not entitled to rely on the benefit of cl 8 of the UK Conditions, since they are not parties to the agreement. The plaintiff also contends that in any event, the clause is void because it seeks to oust the jurisdiction of the court.[20]
[20]Covacs, The Law of Tugs and Towage (1980) p 77; Halsbury’s Laws of Australia, Vol 7.2, Ch 4, para 91.
The respondents contend that cl 8 of the UK Conditions constitutes a promise for the benefit of a third party, namely Captain Eisen and Mr Smith, pursuant to s 55 of the Property Law Act. In addition, it is said that they are also persons by whom part of the contract was performed or undertaken in accordance with the determination in Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon (Australia) Pty Ltd.[21]
[21](1978) 139 CLR 231
This issue should also be determined at trial, although I note that the plaintiff’s argument appears to be inconsistent with the position which has been consistently taken by the courts since Port Jackson Stevedoring Pty Ltd .
The Application of the TPA
On behalf of the respondents, it was submitted that the warranties implied by s 74 of the TPA do not apply, because the towage services come within s 74(3) of the TPA being provided under a contract for or in relation to the transportation of goods, namely the ship, for the purpose of a business carried on or engaged in by the plaintiff[22]. It was submitted that the words in s 74(3) of the TPA should be construed broadly[23] and that the words “in relation to” are of the widest import, the word “transportation” extending to meaning “conveying or to convey”[24] and that the purpose of the towage contract was to convey (effect movement of) the ship to its berth, which purpose was a commercial one. In this regard counsel for the respondents emphasised that the principal object of s 74(3) of the TPA is to remove from the ambit of the warranties implied by s 74(1) and (2) of the TPA transactions which do not involve the acquisition of services for personal, domestic or household use[25].
[22]See also the definition of “goods” in s 4 of the TPA
[23]Comalco Aluminium Ltd & Ors v Mogul Freight Services Pty Ltd, Oceania Shipping Corporation Limited and Angkasa Shipping and Trading Inc (1993) 113 ALR 677 at 689.
[24]See The Concise Oxford Dictionary.
[25]See Wallis v Downard-Pickford (North Queensland) Pty Ltd (1994) 179 CLR 388 at 399-400.
Further, counsel for the respondents submitted that if Division 2 of the TPA applies it only has effect as between parties to the contract [26] and does not affect the first, fourth and fifth defendants. In addition, it is said that s 68 of the TPA does not apply in relation to cl 8 of the UK Conditions, because cl 8 does not offend s 68. Nor, counsel argued, did s 68 affect the operation of cl 4 in relation to causes of action other than those founded upon alleged breach of the s 74 warranties (that is other terms alleged to be implied (ie. seaworthiness) or negligence). Nor did it affect the tug owner’s entitlement to indemnity under cl 4(b) (which may be pleaded in response to the plaintiff’s amendments)[27].
[26]See E v Australian Red Cross Society (1991) 27 FCR 310 at 352.
[27]See Qantas Airways Limited v Aravco Limited (1996) ATPR 41-486.
On behalf of the plaintiff it was submitted that, in so far as clauses 4 and 8 of the UK Conditions exclude liability, they are void by operation of s 68 of the TPA, and s 74(3) of the TPA did not apply; it excludes from the TPA contracts entered into by at least the consignor of the transported goods, but does not exclude every contract that a shipowner might enter into whilst operating his vessel.[28] It was submitted that a tug does not “transport” a ship, but merely assists it to berth. Nor does it “convey” a ship in the normal meaning of that word in this context, for example in the Macquarie Dictionary: “to carry or transport from one place to another”. The plaintiff contended that the contract for towage by a third party is not for or in relation to the transportation of goods, because the tug owner need have no knowledge of the purpose of the vessel’s voyage, and the discharge of the contract of towage was totally independent of any contract entered into by the ship owner.
[28]See Indico Holdings Pty Ltd v TNT Australia Pty Ltd (1990) 41 NSWLR 281, 283.
Further, it was contended that, even if it were found that the contract of towage was one in relation to the transportation or storage of goods, it was not for the purposes of a business of the person for whom the goods were transported, but rather for the purposes of a business carried on by the person responsible for transporting the goods[29]. It is argued that the fact that the ship might be used for commercial transportation of goods is merely incidental; tugs also assist vessels going to drydock and non-cargo vessels such as passenger ships, military ships and cable laying ships.
[29]Wallis v Downard-Pickford (North Queensland) Pty Ltd (1994) 179 CLR 388, 393-394 per Deane and Dawson JJ and at 401 per McHugh J.
I have come to the conclusion that, given the concessions the issues of unseaworthiness, negligence and quantum should proceed to a trial, and given my decision that the issue of whether clause 4(a) of the UK Conditions attaches to exclude the respondents’ liability is also one which should proceed to trial, it is not appropriate to determine the TPA issue in isolation, notwithstanding that its resolution does not involve controversial facts. I come to that conclusion because if it is determined that the collision did not occur “whilst towing”, then the issue of the application of the TPA may not require resolution on the facts of this case. Accordingly, it cannot be assumed that the issue is one that will necessarily require determination at trial. Furthermore, the resolution of the issue on these application will not result in the disposal of the proceeding nor of a significant part of it and importantly, the issue which logically precedes it, that is, the applicability of the UK Conditions to exclude liability, will remain unresolved.
Conclusion
In the circumstances, I dismiss both applications for summary judgment. I shall hear the parties as to directions that should be made for the further conduct of the matter and as to costs.
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