Port Kembla Coal Terminal Ltd v Braverus Maritime Inc
[2004] FCA 1211
•17 SEPTEMBER 2004
FEDERAL COURT OF AUSTRALIA
Port Kembla Coal Terminal Ltd v Braverus Maritime Inc [2004] FCA 1211
SHIPPING AND NAVIGATION – compulsory pilotage – negligent navigation by pilot – liability of shipowner for damage caused by collision with berth – pilot employed by port corporation – vicarious liability of shipowner for default of pilot – pilot deemed to be shipowner’s servant by s 410B of Navigation Act 1912 (Cth) and s 85 of the Ports Corporatisation and Waterways Management Act 1995 (NSW) – shipowner vicariously liable for negligence of servant – entitlement to contribution from port corporation – no entitlement to contribution – statutory immunities operate to defeat contribution claim
SHIPPING AND NAVIGATION – licensing of pilots – no valid licence issued to pilot – statutory scheme operates despite absence of licence
TORT – vicarious liability – employers – employee exercising independent duties – pilot employed by port corporation but deemed by statute to be servant of shipowner – duty imposed by statute operative to exclude vicarious duty of employer
TORT – contributory negligence – causation – insufficient causative link between increased risk of damage and damage ultimately suffered – no contributory negligence
CONTRACT – formation – alleged existence of standing offer on the part of port corporation for provision of pilotage services – pilotage services offered pursuant to statutory obligation – no voluntary assumption of duty – no contract where duty imposed by statute – imperfect performance of statutory duty does not give rise to a contract
CONSTITUTIONAL LAW – just terms – Navigation Act alleged to have effect of removing cause of action and imputing incontestable liability without provision of just terms – Navigation Act not a law with respect to the acquisition of property – in any event, no liability or cause of action had accrued at the relevant time
TRADE PRACTICES – misleading or deceptive conduct – pilot carrying out statutory function – pilotage not an activity bearing a trading or commercial character – pilotage not ‘in trade or commerce’
Law Reform (Miscellaneous Provisions) Act 1946 (NSW) s 5(1)(c)
Law Reform (Miscellaneous Provisions) Act 1965 (NSW) s 8, 9
Marine Pilotage Licensing Act 1971 (NSW) s 3, 6, 7, 7(2)(a), 8, 12, 12(1), 14, 50A
Marine Pilotage Licensing Regulations 1974 (NSW)
Merchant Shipping Act 1854 (17 & 18 Vic)
Merchant Shipping Act 1894 (57 & 58 Vic) s 633
Navigation Act 1912 (Cth) s 2(1)(a), 6, 410B, 410B(1), 410B(2)
Navigation Act 1920 (Cth)
Navigation Act 1958 (Cth)
Navigation (Maritime Conventions) Act 1934 (Cth)
Pilotage Act 1812 (52 Geo III)
Pilotage Act 1825 (6 Geo IV) s 55
Pilotage Act 1913 (Imp) s 15, 15(1)
Ports Corporatisation and Waterways Management Act 1995 (NSW) s 3, 7, 9, 11, 53, 54(2), 67, 68, 70, 77, 78, 84(1), 85, 86
Ports Corporatisation and Waterways Management Regulation 1997 (NSW) Regs 10, 11
State Owned Corporations Act 1989 (NSW) s 20F, 20ZB(1)
Trade Practices Act1974 (Cth) s 45, 52, 74, 82, 87Constitution s 51(i), 51(xxxi), 98, 109
International Convention for the Unification of Certain Rules of Respecting Collisions between Vessels (signed 23 September 1910; generally in force 1 March 1913; entered into force in Australia 24 October 1930) Article 5
Canada Shipping Act 1952
Australia, House of Representatives, Debates, 22 October 1912, pp 4481-4482
Explanatory Notes on Clauses of Draft Navigation Bill 1958 (7th March 1958)A Aronson, B Dyer & M Groves Judicial Review of Administrative Action, LBC, Sydney, 3rd Ed, 2004
R P Balkin & J L R Davis, Law of Torts, Butterworths, 3rd Ed, 2004
D A Butler & W D Duncan, Maritime Law in Australia, Legal Books, Sydney, 1992
R Douglas, P Lane and M Pete, Douglas & Geen on the Law of Harbours Coasts and Pilotage, LLP, London, 5th ed, 1997
R G Marsden A Treatise on the Law of Collisions at Sea, Stevens and Sons, London, 6th Ed, 1910
F Trindade & P Cane, The Law of Torts in Australia, OUP, 3rd Ed, 1999
The Nautical Institute on Pilotage and Shiphandling, The Nautical Institute, London, 1990Amarantos Shipping Co Ltd v South Australia (2004) 87 SASR 528 cited
Astley v Austrust Ltd (1999) 197 CLR 1 applied
Australian Coastal Shipping Commission v O’Reilly (1962) 107 CLR 46 cited
Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480 discussed
Australian Woollen Mills Pty Ltd v Commonwealth (1954) 92 CLR 424 followed
Branir Pty Ltd v Owsten Nominees (No 2) Pty Ltd (2001) 117 FCR 424 followed
Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 152 cited
Chapman v Luminis (No 4) (2001) 123 FCR 62 followed
Chelfco Ninety-Four Pty Ltd v Road Traffic Authority [1985] VR 1 cited
Clark(orThom)v J & P Hutchinson Ltd [1925] SC 386 cited
Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 applied
Dare v Pulham (1982) 148 CLR 658 referred to
Dovuro Pty Ltd v Wilkins (2003) 77 ALJR 1706 cited
Esso Petroleum Co Ltd v Hall Russell & Co Ltd [1989] 1 AC 643 (‘The Esso Bernicia’) applied
Fowlesv Eastern and Australian Steamship Co Ltd (1913) 17 CLR 149 cited
Fowles v Eastern and Australian Steamship Co Ltd [1916] 2 AC 556 cited
Fox v Percy (2003) 214 CLR 118 followed
Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297 cited
Harbutt’s Plasticine Ltd v Wayne Tank and Pump Co Ltd [1970] 1 QB 447 cited
Henville v Walker (2001) 206 CLR 459 applied
Holman v Irvine Harbour Trustees (1877) 4 Sess Cas (4th series) 406 explained
Hyder Consulting (Australia) Pty Ltd v Wilth Wilhelmensen Agency Pty Ltd [2001] NSWCA 313 followed
Johnson v Perez (1988) 166 CLR 351 applied
Johnston v Frazer (1990) 21 NSWLR 89 applied
Jones v Livox Quarries [1952] 2 QB 608 discussed
Joslyn v Berryman (2003) 77 ALJR 1233 applied
Leotta v Public Transport Commission of New South Wales (1976) 9 ALR 437 referred to
Lismore County Council v Stewart (1989) 18 NSWLR 718 applied
Norweb PLC v Dixon [1995] 3 All ER 952 cited
Oceangas (Gibraltar) Ltd v Port of London Authority [1993] 2 Lloyd’s Rep 292 (‘The Cavendish’) referred to
Oceanic Crest Shipping Co v Hamersley Iron Pty Ltd [1986] WAR 88 discussed
Oceanic Crest Shipping Co v Pilbara Harbour Services Pty Ltd (1986) 160 CLR 626 applied
Optus Networks Pty Ltd v Leighton Contractors Pty Ltd [2002] NSWSC 450 followed
Otago Harbour Board v Cates (1884) 2 NZLR 123 discussed
Owners of the Dredger “Liesbosh” v Owners of the Steamship “Edison” [1933] AC 449 cited
Pfizer Corporation v Ministry of Health [1965] AC 512 referred to
Puntoriero v Water Administration Ministerial Corporation (1999) 199 CLR 575 distinguished
Purcell v Watson (1979) 26 ALR 235 followed
R W Miller & Co Pty Ltd v Shortland County Council (1988) 83 ALR 225 cited
Re DPP; ex parte Lawler (1994) 179 CLR 270 applied
Re Maritime Union of Australia; ex parte CSL Pacific Shipping Inc (2003) 77 ALJR 1497 cited
Rockhampton Harbour Board v Ocean Steamship Co Ltd [1930] QSR 343 cited
Southampton Container Terminals Ltd v Hansa Schiffartsgesellschaft mbH [1999] 2 Lloyd’s Rep 491 (‘The Maersk Columbo’) distinguished
Smith v ANL Ltd (2001) 204 CLR 493 cited
SS Alexander Shukoff v SS Gothlard [1921] 1 AC 244 cited
Stirling Harbour Services Pty Ltd v Bunbury Port Authority [2000] FCA 1381 cited
Suatu Holdings Pty Ltd v Australian Postal Corporation (1989) 86 ALR 532 cited
Texada Mines Pty Ltd v The Ship ‘Afovos’ [1974] 2 Lloyd’s Rep 168 cited
The Andoni [1918] P 14 cited
The Arum [1921] P 12 cited
The Christiana (1850) 7 Moore’s PC Cases 160; 13 ER 841 discussed
The Eden (1846) 2 Wm Robb 442 ; 166 E.R. 822 discussed
The Gazelle (1884) 2 Wm Robb 279; 166 ER 759 discussed
The Guy Mannering (1882) 7 PD 132 discussed
The Maria (1839) 1 Wm Robb 95; 166 ER 508 discussed
The Oregon 158 US 186 (1895) cited
The Peerless (1860) Lush. 30 ; 167 ER 16 cited
The Prinses Juliana [1936] P 139 cited
The Tactician [1907] P 244 discussed
Tiwi Barge Services Pty Ltd v Stark (1997) 78 FCR 218 cited
Wood v Smith (1874) LR 5 PC 451 (‘The City of Cambridge’) discussed
Workington Harbour and Dock Board v Towerfield (Owners) [1951] AC 112 (‘The Towerfield’) discussedPORT KEMBLA COAL TERMINAL LTD v BRAVERUS MARITIME INC
N 1397 OF 2002HELY J
17 SEPTEMBER 2004
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
IN ADMIRALTY
N 1397 OF 2002
BETWEEN:
PORT KEMBLA COAL TERMINAL LTD
(ACN 003 942 774)
PLAINTIFFAND:
BRAVERUS MARITIME INC
DEFENDANTBETWEEN:
BRAVERUS MARITIME INC
CROSS CLAIMANTAND: PORT KEMBLA PORT CORPORATION
CROSS DEFENDANTBETWEEN:
PORT KEMBLA PORT CORPORATION
COUNTER CROSS CLAIMANTAND: BRAVERUS MARITIME INC
COUNTER CROSS DEFENDANTJUDGE:
HELY J
DATE OF ORDER:
17 SEPTEMBER 2004
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1. The plaintiff bring in short minutes of order to give effect to my decision that:
(a)Judgment should be entered in favour of the plaintiff against the defendant in the sum of $16,097,548.17 together with interest thereon at Schedule J rates.
(b)The plaintiff should prepare an interest calculation and endeavour to reach agreement with the defendant on the quantum of that claim.
(c)An order be made that the defendant is to pay the plaintiff’s costs of the proceedings.
(d)Reserve liberty to the plaintiff to apply for a special costs order on motion filed within 14 days.
2.The Corporation should bring in short minutes of order to give effect to my decision that the defendant’s cross claim against the Corporation should be dismissed with costs, and the Corporation’s cross claim against the defendant should be dismissed with costs.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
IN ADMIRALTY
N 1397 OF 2002
BETWEEN:
PORT KEMBLA COAL TERMINAL LTD
(ACN 003 942 774)
PLAINTIFFAND:
BRAVERUS MARITIME INC
DEFENDANTBETWEEN:
BRAVERUS MARITIME INC
CROSS CLAIMANTAND:
PORT KEMBLA PORT CORPORATION
CROSS DEFENDANTBETWEEN:
PORT KEMBLA PORT CORPORATION
COUNTER CROSS CLAIMANTAND:
BRAVERUS MARITIME INC
COUNTER CROSS DEFENDANT
JUDGE:
HELY J
DATE:
17 SEPTEMBER 2004
PLACE:
SYDNEY
The issues – an overview
The principal witnesses
The possibility of error in communication
Massive conflicts in the evidence
Contemporaneous records
The Pilot boards the Fortius (approximate time 13:00)
The pilot card and the ship’s particulars
The passage plan and the pilotage report
What the Master was not told
The significance of the higher displacement
Did the swing commence too far to the north in the inner harbour? (Approximate time: 13:50)
The swing
Consideration of the swing
The slow ahead or stop engines/slow astern point
To the 150 m point
Associated issues
From 150 m point to CB2
Captain Hoogendoorn’s observations
Decision as to credit
An overview of the negligence issue
The role of a pilot
Respective responsibilities of master and pilot under the general law
The 1910 Convention and thereafter
Impact of the current statutory regime on the relationship between master and pilot
Was the Master negligent?
Vicarious liability in the defendant for the negligence of the pilot
Was the Fortius proceeding on an overseas voyage?
The absence of a licence
Constitutional validity of s 410B(2)
Contributory negligenceDamages
Outcome of the plaintiff’s claim
Cross claim
Separate issue
REASONS FOR JUDGMENT
The plaintiff is the lessee and operator of the Port Kembla Coal Loading Terminal (‘the facility’). The facility includes two berths, namely the No 1 berth, sometimes referred to as the ‘old coal wharf’ (‘CB1’) and the No 2 berth, sometimes referred to as the ‘bulk coal berth’ (‘CB2’).
Both CB1 and CB2 are situated on the eastern side of the inner harbour at Port Kembla, and adjacent to the Eastern Basin. CB1 is to the south of CB2. This case is primarily concerned with CB2. CB2 has a berth face of about 282 metres in length and 6.4 metres wide, sitting on piles and running in a north-south direction. At each end of the berth are two platforms, used as washdown and maintenance areas. These platforms are also supported by a pattern of piles underneath. The berth face is tied back to anchor points on shore by four tubular steel struts. A series of eight fender platforms protrude from the berth face with large square steel structure fenders (suitably faced) attached and appropriately sprung.
A coal loader is situated on CB2. The coal loader comprises two rail mounted ship loaders (‘the No 1 and No 2 ship loaders’) and associated conveyors and ancillary structures and equipment. The ship loaders are used to load coal from the adjacent stockpiles onto vessels berthed alongside CB2. Each of the ship loaders weighs 1,500 tonnes, stands 23 metres high (from the berth deck to the top of the structure), is 25 metres wide, 74.50 metres long when parked and 109.50 metres long when the cargo boom is extended.
The ship loaders can travel the length of CB2 along two steel rails running lengthwise on the surface of the berth. These rails are used as tracks for the outer bogies of the ship loaders (that is those on the seaward side of the berth) and are supported by a set of 2000 mm concrete piles under the berth running directly beneath the rails. There is also a similar set of steel rails running alongside the shore or landward side of the berth, supporting the inside bogies of the ship loaders.
The ‘SA Fortius’ (‘the Fortius’) is a ‘cape size’ class, gearless, bulk carrier with a gross registered tonnage of 87,542 tonnes. A ‘cape size’ vessel is one whose beam is too great to allow it to pass through the Panama Canal. The Fortius is owned by the defendant and registered in Nassau, Bahamas. She has a length of 289.08 metres overall, a beam of 45.0 metres, a summer draught of 17.721 metres and a deadweight at that draft of 171,509 tonnes. The Fortius has 9 cargo holds and an aft engine room, deck house and bridge. The bridge is 246.3 metres from the Fortius’ bow and 42.7 metres from the stern. The vessel is equipped with direct bridge control of the engine.
In April 2002, the Fortius was under the command of Captain Ryszard Krol. In addition to the master, there was a complement of 20 officers and crew on board, operating and navigating the vessel. The master and the ship’s complement were employed by the defendant or by managing agents for and on behalf of the defendant.
Captain Krol first went to sea in 1971 and achieved the rank of master in 1987. In about 1991 he first acted as Chief Officer on cape size vessels. In 1997 he started to be a master on cape size vessels, and has been in command of cape size vessels ever since. Captain Krol has had considerable experience in the navigation and command of cape size vessels.
In early 2002, the Fortius was chartered to lift a full cargo of 130,000 tonnes of coal from Newcastle and Port Kembla for discharge in Rotterdam. On 14 April 2002 the vessel berthed in Newcastle and loaded 55,410 tonnes of coal on board. Early on the morning of 15 April 2002 the vessel sailed from Newcastle to Port Kembla. At that time she had, in addition to the 55,410 tonnes of cargo loaded at Newcastle, a further 30,000 tonnes of ballast. The Fortius’ displacement was then approximately 110,000 tonnes.
The Fortius arrived off Port Kembla at about 13:00 hours on 15 April 2002. She was booked to berth at CB2 that afternoon for the purpose of loading the balance of her cargo of coal, before proceeding to Rotterdam. This was the second occasion on which Captain Krol had visited Port Kembla, the first occasion being in May 1997 when he was the master of a cape size vessel which discharged iron ore at a BHP discharge berth on the southern side of the inner harbour.
Prior to the vessel arriving in Port Kembla, Captain Krol completed a pre-arrival checklist with the assistance of various officers. This checklist included testing the engine both ahead and astern and testing the full range of the steering gear and rudder from side to side. No difficulties or problems were encountered. This pre-arrival check also included a check on the course recorder, although the nature and extent of the check does not appear. The vessel’s engines and steering gear were thus in perfect working order and during the entry into Port Kembla the vessel’s main engines did not experience any difficulties or problems.
Port Kembla is a compulsory pilotage port: Ports Corporatisation and Waterways Management Act 1995 (NSW) s 77 and s 78 (‘the PCWM Act’). The cross defendant (‘the Corporation’) is a ‘Port Corporation’ established by s 7 of that Act. As a matter of fact the Corporation, and only the Corporation, provided pilotage services in Port Kembla Harbour. One of the ‘pilots’ which the Corporation employed for that purpose was Captain Stephen James. I say ‘pilots’, because one of the many issues in this case is whether Captain James was licensed as a pilot under s 7 of the Marine Pilotage Licensing Act 1971 (NSW) (‘the MPL Act’), and whether he was employed as a Pilot for the purposes of the PCWM Act. It will be necessary to return to that issue in due course, but, for the time being, I will refer to Captain James as the Pilot, without prejudging that question.
Captain James boarded the Fortius at about 13:00 hours on 15 April 2002. He did so for the purpose of piloting the vessel on her passage into Port Kembla Harbour and alongside CB2. Captain James purported to act as the Fortius’ Pilot, and the master and crew of the Fortius permitted Captain James to act in the same way as a Pilot routinely does in the manoeuvring and berthing of the vessel. There are a number of factual disputes between the Pilot on the one hand, and the Master, Chief Officer and Helmsman on the other about that passage to which it will be necessary to return.
It was Captain James’ intention to manoeuvre the Fortius through the breakwater at Port Kembla harbour, before turning to the starboard in the outer harbour and guiding the vessel into the inner harbour through a narrow channel between the outer and inner harbour called ‘the cut’.
Once inside the inner harbour, the Fortius would be swung to starboard so as to pass through approximately 240 degrees. This manoeuvre was to take place in the middle of the inner harbour to the south west of CB2 in an area referred to as the turning basin. When that manoeuvre had been completed, the Fortius should have been lying broadly parallel with CB2 to the south west of CB2 with her bow facing south. The tugs that had accompanied the vessel into the inner harbour, and assisted her with the swinging manoeuvre, would then be used to push the vessel astern and then sideways towards CB2 in a broadly north then easterly direction, with the vessel berthing port side to. A chart of the inner harbour has been reproduced on the following page, with CB2 located on the eastern side of the eastern basin. The smaller scale chart inserted in the bottom left corner of the inner harbour chart shows the overall configuration of Port Kembla harbour, and the relationship between the outer harbour, the cut, and the inner harbour.
In carrying out the swinging manoeuvre, the Fortius moved too far north and too close to CB2. As the Fortius was being swung, her bow collided with CB2 towards the southern end of that berth at an angle of about 80 to 90 degrees to the berth (which lies at an angle of about 5 or 10 degrees off due north/south), causing damage to the berth structure and to the No 1 ship loader. It was generally accepted that the collision occurred at about 13:59 hours on 15 April 2002. There was a ‘v’ shaped indentation of approximately 2 metres in the concrete structure of the berth where the starboard bow of the Fortius collided with it on a heading of about 78 degrees. The bulwark came into contact with the No 1 ship loader, causing it to be derailed and rendered unstable. The cost of repairing the No 1 ship loader alone is claimed to be $5,889,090.20. The cost of rectifying the damage to the berth and the ship loader, and some incidental expenses, are claimed by the plaintiff to be $16,110,548.47.
According to witnesses whose evidence I accept, 15 April 2002 was a fine sunny day. There was hardly any wind. The water was calm and flat. Visibility was clear. The Fortius’ log recorded that at 1200 hours the weather was cloudy with good visibility and a moderate sea. As Captain Krol acknowledged in evidence ‘everything was perfect’ (so far as he could see) ‘for a safe berthing procedure for the Fortius’. Captain Krol also acknowledged in evidence that if everyone involved in the navigation and manoeuvring of the ship had properly done their job then the collision would not have occurred. No similar incident had occurred at CB2 in over 20 years. No one has suggested that anything other than human error caused or contributed to the collision, although there is a marked conflict in the evidence as to who is responsible.
In very general terms, the Pilot attributed the Fortius’ movement to the north, and the subsequent collision with CB2, to a failure on the part of the Master, Chief Officer and Helmsman to execute the Pilot’s helm and engine orders. In a letter dated 24 September 2002 to the Australian Transport Safety Bureau (‘the ATSB’) the Pilot said that his orders were ignored, and countermanded by the Master, without the Master informing the Pilot of his decision. The Master denies that this is so, and attributes the collision to faulty navigation on the part of the Pilot. The Master is supported in that denial by the evidence of the Chief Officer and the Helmsman.
Whatever the cause of the Fortius’ movement to the north, a point arose when both Pilot and Master recognised that there was a risk of collision between the vessel and CB2, but that if appropriate action had then been taken, the collision would have been averted. That point was when the Fortius was approximately 150 m west of CB2, on a heading of approximately 35 degrees, and travelling at about 1 knot. At that point (which I shall refer to as ‘the 150 m point’), both the Pilot and the Master were of the view that the Fortius’ engines should have been stopped and then put to full astern. If necessary the tugs could have been deployed to further arrest the movement of the vessel towards CB2.
There are conflicts in the evidence as to what orders the Pilot gave both before and after this point, and as to whose fault it was that a full astern order was not implemented in time to prevent a collision from occurring. The 150 m point is therefore a useful reference point, as the failure to take appropriate action at the 150 m point was directly causative of the collision. The evidentiary conflicts are also more generally relevant, since should the issue of allocation of responsibility fall for decision, contrary to the Corporation’s submissions, the conflicts between the accounts of the Master and the Pilot become relevant to that question.
Although the damage sustained by the berth and ship loader was extensive, the collision was a very near thing. Had the Fortius’ position and/or heading immediately prior to the impact been slightly different, then the collision would probably not have occurred. Captain Kirkland, an expert witness called by the plaintiff and who had inspected the impact, gave it as his opinion that if the Fortius had been put astern 10 or 12 feet earlier, then she probably would not have touched the berth.
After the collision the Fortius berthed alongside CB1 where she remained until she returned to anchorage off Port Kembla on 19 April 2002. On 19 May 2002 the Fortius returned to CB2 and loaded the balance of the cargo of coal, and resumed her voyage to Rotterdam.
The ATSB conducted an enquiry into the collision. At least some of the information given to the ATSB by the Corporation is in evidence before me. I do not know whether the defendant placed any material before the ATSB. Nor have I been provided with the ATSB’s draft report, or its final report.
The issues – an overview
As between the plaintiff and the defendant
The plaintiff says that the collision between the Fortius and CB2 was caused by the negligence of the Master and the bridge crew in their navigation of the vessel in the inner harbour, for which negligence the defendant is vicariously liable. Although the vessel was under pilotage at all material times, she remained subject to the authority and control of the Master, who was not relieved from his responsibility for the conduct and navigation of the vessel by reason only that she was under pilotage. Reliance is placed on s 410B(1) of the Navigation Act 1912 (Cth) (‘the Navigation Act’) and upon s 85(1) of the PCWM Act in this regard.
Further and in the alternative the plaintiff says that the collision was caused by the negligence of the Pilot, Captain James, for which the defendant is also liable pursuant to s 410B(2) of the Navigation Act and s 85(2) of the PCWM Act, or under the general law.
The defendant denies negligence on the part of the Master and the bridge crew. In the defendant’s contention the damage to CB2 and the coal loader was caused solely by the negligence of Captain James, for whose conduct his employer, the Corporation, is vicariously liable. Captain James was not a licensed Pilot under s 7 of the MPL Act at the time of the collision, hence s 85(2) of the PCWM Act does not apply, and the defendant is not vicariously liable for Captain James’ negligence. Under the general law a shipowner is not vicariously liable for the actions of a Pilot, including one supplied by a port authority, in a circumstance where pilotage is compulsory. In the defendant’s contention s 410B(2) of the Navigation Act has no relevant application, because at the time of the collision the Fortius was engaged in an intra-state voyage from Newcastle to Port Kembla. If s 410B(2) renders the defendant vicariously liable for the negligence of Captain James, notwithstanding his status as an unlicensed Pilot, then the defendant submits that the section is constitutionally invalid to the extent that it effects an acquisition of the defendant’s property without the provision of just terms as required by s 51(xxxi) of the Constitution.
If the defendant is liable to the plaintiff in negligence the defendant says that the loss and damage sustained by the plaintiff was contributed to by the plaintiff’s own negligence in failing to comply with its own procedures and directives which required that the No 1 ship loader be located in a position of safety at the centre of the berth.
In any event issues as to betterment and unreasonableness are raised by the defendant in relation to a number of items which form part of the plaintiff’s claim.
As between the defendant and the Corporation
If the Master and the Pilot are both found to be liable in negligence, an issue for determination on the Second Further Amended Cross Claim filed for the defendant (‘the cross claim’) is the relative responsibility as between the Master and the Pilot for any damage sustained by the plaintiff. Irrespective of whether such a finding is made, the Corporation’s liability to the defendant under the cross claim falls for determination.
The defendant contends that the Corporation is liable to it in contract, under s 82 of the Trade Practices Act1974 (Cth) (‘the Trade Practices Act’) and in tort. The Corporation puts these claims in issue and contends that, in any event, it has the benefit of the statutory immunities created by s 410B of the Navigation Act and s 85 and s 86 of the PCWM Act. The defendant denies that these sections have any relevant application.
If any statutory defence is prima facie available to the Corporation under s 85 and s 86 of the PCWM Act, then the defendant contends that those sections are invalidated by Part IV of the TPA. They are also inconsistent with s 52, 82 and 87 of the TPA and, pro tanto invalid by reason of s 109 of the Constitution.
To the extent that any defence or immunity is prima facie available to the Corporation under s 410B of the Navigation Act, the defendant asserts that the section is constitutionally invalid as it effects an acquisition of property, viz the defendant’s common law causes of action against the Corporation, without the provision of just terms.
The principal witnesses
The ‘bridge team’ consisted of the Master, the Chief Officer, the Helmsman (collectively, ‘the crew’) and the Pilot. The Master is a Polish national who is fluent in the English language. The Chief Officer is a Ukrainian national who reads and speaks the English language, and is used to using that language when performing his duties. Both gave evidence in these proceedings without needing the assistance of an interpreter. The Helmsman is a Ukrainian national whose native tongue is Russian. He has a very limited understanding of the English language, although course orders are ordinarily given in English, and he understands their meaning. He gave evidence in these proceedings with the assistance of an interpreter. The Pilot described himself as ‘a pom’. When giving evidence he presented as a softly-spoken man, although he said that ‘he was not softly spoken when he was on a ship’. He spoke with an English accent. He agreed that a person such as the Master, whose first language is not English, might misunderstand orders which he gave.
The possibility of error in communication
The possibility of error in the communication of orders is obvious, and all the more so when orders pass between persons with different first languages. In order to limit the possibility of such an error occurring, the procedure adopted by the crew of the Fortius was that each order was executed and confirmed. This means that each order was verbally repeated as it was performed. The purpose of the procedure is to decrease the chance of an error in communication going undetected, with a corresponding reduction in the probability of an incorrect order being executed.
Practical examples of communication errors, and the usefulness of, and limitations inherent in, the system referred to above, are furnished by events which occurred on board the Fortius in Newcastle harbour en route for Port Kembla. When the Fortius entered Newcastle harbour on 14 April 2002, and left that harbour on 15 April 2002 the crew were on the bridge. On each occasion the Pilot was Captain George Nahapiet, a senior marine pilot employed by the Newcastle Port Corporation. On the inwards leg, Captain Nahapiet gave an engine order of ‘dead slow ahead’, which was relayed to the Master and then the Chief Officer. When the Chief Officer repeated the order as ‘slow ahead’, Captain Nahapiet intervened and stated ‘no, dead slow ahead’, which instruction was then implemented. On the outwards leg Captain Nahapiet gave a helm order of ‘port 20’. The Helmsman correctly repeated that order, but moved the helm to a position of 20 degrees to starboard. Either Captain Nahapiet, the Master or the Chief Officer detected the error, and immediately corrected the Helmsman, who moved the helm back to amidships then to port 20 degrees. In his evidence, Captain Nahapiet said that it was he who picked up the ‘wrongway helm’. However, in a conversation with the Newcastle Harbourmaster, Captain Tim Turner, shortly after the incident, he told Captain Turner that he had had a ‘wrongway helm’ in Newcastle harbour, but the Master and mate picked it up. The probabilities are that the statement to Captain Turner made within days of the incident is more accurate than Captain Nahapiet’s subsequent recollection. The Master then spoke to the helmsman in a language which Captain Nahapiet did not understand. He asked the Master what he had said. The Master replied: ‘I told him to pay attention to his job’. Subject to the qualification referred to above, I accept Captain Nahapiet’s account of these incidents.
Captain Nahapiet accepted that the wrong engine order resulted from a mishearing. In his experience, errors frequently occur between ‘dead slow ahead’ and ‘slow ahead’, and ‘dead slow astern’ and ‘slow astern’. The second error, where the rudder is moved to an incorrect position, is generally called a ‘wrongway helm’. Captain Nahapiet gave evidence that a wrongway helm does not occur frequently, but it is not uncommon. As a consequence, Captain Nahapiet watches the helm quite closely when he gives an order to see that in fact it has been placed in the correct position.
The Master denied that either of these incidents occurred and denied that he told the Helmsman to pay attention. The Chief Officer said that he recalls Captain Nahapiet advising ‘dead slow ahead’, but denies that his response was ‘slow ahead’. He denied that he was given a helm order of ‘port 20’, or that the Helmsman moved the wheel to 20 degrees to starboard. The nature of the Chief Officer’s denial is curious. I could understand that the crew might not recall these events given the passage of time, and their relatively inconsequential character. But the Chief Officer’s evidence was much more emphatic than that: ‘… never was the situation’. The Helmsman’s evidence in relation to the ‘wrongway helm’ was equally emphatic: ‘it didn’t happen’.
What happened in Newcastle Harbour has implications in relation to the reliability of the evidence of the crew generally. Contrary to the defendant’s submission, the fact that I prefer Captain Nahapiet’s account of the events concerning the entry into and exit from Newcastle harbour does bear upon the extent to which reliance can be placed on the evidence of the crew as to the events which occurred in Port Kembla.
Massive conflicts in the evidence
In the present case there is a massive conflict of evidence between witnesses called by the defendant and by the Corporation as to how the collision occurred. It has been observed, perhaps somewhat cynically, that there is almost a ‘tradition’ of those parties involved in a maritime collision giving flatly contradictory evidence on all material points: D A Butler & W D Duncan, Maritime Law in Australia, Legal Books, Sydney, 1992 at 219. If there is such a tradition, a possible explanation for it is the gravity of a collision from the financial and professional perspectives of those involved. As counsel for the plaintiff, Mr Sullivan QC, correctly submitted, reconstruction or wisdom benefited by hindsight, or a conscious or unconscious instinct of self-preservation or loyalty, may result in interested parties giving evidence which does not accord with the true version of the facts.
This is a case in which the crew on the one hand, and the Pilot on the other, give flatly contradictory evidence on most material points commencing when the Pilot boarded the vessel at about 13:00 hours on 15 April 2002 and continuing until the collision with CB2 about an hour later. As will emerge as I proceed through these reasons, there are many unsatisfactory aspects of the evidence given by the Master, the Chief Officer and the Helmsman on the one hand, and the Pilot on the other, which makes it impossible to accept the evidence of any one of these witnesses in its entirety.
I agree with the plaintiff’s submission that in this very difficult context, the Court should, where possible, base its fact findings on the objective or contemporaneous documentary evidence augmented by the testimony of the relevant witnesses to the extent that these witnesses are not in conflict. Where there is conflict the Court should, where possible, seek to resolve it by determining, on the objective evidence, what is inherently probable supplemented by admissions against interests made by the crew, on the one hand, or the Pilot on the other.
Contemporaneous records
The only contemporaneous records of the Fortius’ passage into Port Kembla to CB2 on 15 April 2002 are the Bell Book, the course recorder and the tug transcripts. The Pilot prepared a number of accounts of what had occurred both on the day of the collision and afterwards, but the reliability and the accuracy of those accounts is in issue.
The Bell Book
The Bell Book is a book kept by the Chief Officer. The book is a pre-printed type with a range of engine movement shown at the top of the page moving through the possible engine movements from dead slow ahead through to stop to full astern. It is intended as a record of all engine orders given by the Master. The Bell Book does not record helm movements. The practice was that when the Chief Officer received an engine order from the Master, he immediately looked at the ship’s clock and wrote the time (eg 13:56) in the Bell Book. On 15 April 2002 the Chief Officer accepts that he made two errors in his initial recording of orders in the Bell Book which he immediately corrected at the time. First, he recorded a ‘slow astern’ order as being given at 13:59, when it was in fact given at 13:58. He realised he had made a mistake and immediately changed the 9 to an 8. Second, he recorded the ‘full astern’ order given at 13:58 in the column for ‘full ahead’. He immediately rubbed out the incorrect entry with the eraser on the top of his pencil and inserted 13:58 in the column for full astern. Three orders were given at 13:58. The Chief Officer attributes his errors to the ‘extreme situation’ in which three orders were given in the space of one minute. At this point the bow of the Fortius was about 20 metres from CB2, and collision with the berth was likely. The Master was not aware that these alterations had been made but this fact is of no particular import. It has no sinister significance.
A forensic report obtained by the Australian Federal Police in relation to the Bell Book is in evidence. The only alterations to the Bell Book identified in that report are those which have been explained above.
The Chief Officer’s denial of the possibility of other errors in the entries in the Bell Book, simply on the basis that if they occurred he would have noticed them, is logically unsupportable. The Corporation attacks the reliability of the Bell Book on the basis that engine orders which the Pilot claims to have given in the relevant period are not recorded in it. That attack cannot be repelled simply by the production of the Bell Book. Whether that attack succeeds or not depends upon an assessment of all of the relevant evidence.
In any event, the entries in the Bell Book are only approximately accurate. For example, an order which is in fact given at 25 minutes and 30 seconds in any particular hour may be recorded at either 25 minutes or 26 minutes, as parts of a minute are not recorded. If the next engine order is given at 27 minutes and 30 seconds then that may be recorded at either 27 minutes or 28 minutes. In this example (which may, in practice, be an extreme example) orders which are in fact 2 minutes apart could be recorded as being 1 minute apart, or 2 minutes apart or 3 minutes apart.
I describe the example given as an extreme one because although as is obvious the Bell Book does not record orders to the second, all orders were recorded by the same person (the Chief Officer) who gave evidence that all times were recorded to the nearest minute.
Nevertheless, the Master accepted in his evidence that it is not possible to calculate speed with accuracy of a fraction of a knot, or time with an accuracy of a few seconds by reference to entries in the Bell Book. For those reasons the Master also accepted that it is impossible to calculate distances accurately by reference to entries in the Bell Book.
The course recorder
There is no documentary record kept on the ship of helm orders except as may be gleaned from the course recorder trace. The course recorder has two main parts: a pen that is attached to the ship’s gyro compass and a roll of printed paper that is attached to a clock and which rotates at a constant speed. The pen draws on the printed paper as the roll rotates, creating what is called the ‘course recorder trace’. The course recorder records changes in the heading of the vessel, and it shows the time at which the vessel’s heading was at a particular compass point. If the heading of the vessel is compared at different points in time, then the trace provides information about whether, and at what rate and in what direction, a vessel is turning.
As an example, when a vessel’s heading is constant, the gyro compass will not be moving and the line traced by the pen on the paper will be vertically straight. When a vessel begins turning, the gyro compass begins moving and the course recorder trace starts moving horizontally across the page. As the speed of the ship’s turn increases the pen will move faster, and the line drawn on the recorder will move closer to the horizontal. As the speed of the ship’s turn decreases, the line drawn on the recorder will move back towards the vertical position.
The course recorder trace does not show when a helm order was given, or the degree of the order, that is, what the order was. The trace also does not show any movement of the vessel which does not involve a change of heading, such as movement due to drift, tide or current. Further, in interpreting a course recorder trace, account needs to be taken of the fact that there is a time lag between the giving of a helm order which will alter the heading of a vessel, and the emergence of a visible alteration in the trace. The effect of the tugs also needs to be taken into account.
The tug transcripts
The tug transcripts are a transcription of a recording made by the Corporation of the VHF frequency used for communication between the captains of the tugs and the Pilot. The transcripts record these communications as well as the times at which they occurred.
During the Fortius’ passage into Port Kembla there were four tugs in attendance. From least to most powerful, the tugs were the Kembla II, the Karoo, the Korimul, and the Bullara. The Kembla II was positioned at the bow of the ship, the Bullara was positioned on the starboard shoulder, the Karoo was on the starboard quarter, and the Korimul was at the stern. Each tug was fastened to the ship by a line, enabling it to exert either a pulling or pushing force on the ship as required.
Reconciling time discrepancies in the contemporaneous records
Any attempt to identify the time at which any event recorded in one document occurred by reference to any other document must take account of the fact that there are four separate time scales referred to in the evidence: tug transcript time, course recorder time, Bell Book time and Captain James’ watch time. There is no evidence which enables any of these time scales to be reconciled at all, let alone with any precision. An example of the lack of precision was given by Captain Bozier, an expert witness called by the defendant, who gave evidence that the course recorder chart was reading 1.5 minutes slow. The Pilot also expressed a view that the times on the tug transcripts might not be the same as on his watch, or on the ship’s clock.
The Pilot boards the Fortius (approximate time 13:00)
The ordinary practice when a Pilot comes on board
When a vessel arrives at a port, it is often the case that the Pilot has not worked on the ship previously, and the Master has little or no experience of the port. There is a universal practice whereby information about the vessel, about the port, and about the intended passage of the vessel to the berth, is exchanged between the Master and the Pilot when the Pilot comes on board.
It was Captain Krol’s practice to provide the Pilot with information about the vessel and its handling characteristics in the form of a pilot card and in another document styled ‘ship’s particulars’. In return Captain Krol ordinarily received from the Pilot, and he expected to receive from the Pilot on arrival in Port Kembla, the Pilot’s passage plan. In Captain Krol’s experience the passage plan could be given in an oral or written form, or as a combination of both.
The Master and the Chief Officer both give evidence that the ordinary practice of exchanging information between the Master and the Pilot was followed when the ship arrived in Newcastle harbour, and upon its departure from that port. Captain Nahapiet did not give any evidence on this issue, hence I accept the uncontradicted evidence of the Master and the Chief Officer on this point.
Was there an unexplained departure from ordinary practice off Port Kembla?
There is a conflict in the evidence of the Master and the Chief Officer, on the one hand, and the Pilot on the other as to whether on the arrival of the Fortius in Port Kembla, the ordinary practice of exchanging information took place. The witness statements of the Master and the Chief Officer assert that the Chief Officer handed the ship’s pilot card for arrival in Port Kembla and a document styled ‘ship’s particulars’ to the Pilot. In his statement, the Pilot asserts that whilst he is usually provided with information about the vessel in the form of a pilotage card which he is asked to sign, on this occasion he was not handed any document giving the ship’s particulars, nor was he asked to sign one. He obtained information about the vessel himself from plaques located in the wheelhouse, including information as to the speed through the water and engine revolutions that could be expected at various engine settings (such ‘slow ahead’ and ‘slow astern’).
In his statement, the Pilot says that he and the Master discussed the passage for Port Kembla in the bridge front. He had his passage plan and his pilotage report with him. As he described the passage to the Master, he was illustrating it to him both on the passage plan and the pilotage report, both of which have charts and show the passage diagrammatically (the former in more detail). As he spoke, the Pilot says that he drew on the pilotage report the location of the intended swing in the inner harbour and the movement from there to the berth with arrows. The copy of the pilotage report which is in evidence has markings on it which appear to satisfy that description. The Pilot says that he left the pilotage report and ‘my passage plan’ on the bridge front.
The Master says in his statement that he expected the Pilot to provide him with his passage plan so that he could understand the passage that the vessel would take when entering the port so that he could anticipate the necessary manoeuvring of the vessel to the berth. But the Pilot did not do so; he made no attempt voluntarily to advise the Master about the entry to the port and the berthing:
‘… the pilot did not provide any documentation or diagram. He did not say anything to the Chief Officer or myself. I did not even know how many tugs would be used. The pilot made no attempt voluntarily to advise me about the entry to the port and the berthing. He had no charts or equipment (such as a laptop computer or handheld GPS) with him other than, so far as I could see, his VHF/walkie talkie.’
(Further Amended Statement of Captain Ryszard Krol, 7 April 2004, par 25)
In cross-examination the Master asserted that the Pilot did not have a passage plan, or the pilotage report with him when he came on board.
In par 29 of the Chief Officer’s statement, he says:
‘After handing the Pilot the information regarding the vessel, I expected the Pilot to provide his own plan showing the intended passage into the port and to the berth in return. However, the Pilot did not do so on this occasion, contrary to the normal practice.’
None of the participants gives any explanation for the alleged departures from the normal practice in relation to the exchange of information, nor do any of the participants assert that any other participant requested that the usual practice should be followed, or commented on the departure from that practice. In fact, the only evidence of trepidation at the departure from normal practice was given by the Master, who says that he was concerned that he had not been provided with any written information as to the proposed passage plan, hence he asked the Pilot a number of questions which elicited information about the proposed passage.
The pilot card and the ship’s particulars
I am satisfied that a pilot card was prepared specifically in relation to the Fortius’ arrival in Port Kembla on 15 April 2002. There was no reason for departing from the ordinary practice of making that card available to the Pilot when he came on board, as that was the only purpose underlying the preparation of such cards. The cards were produced to assist the Pilot with the navigation of the vessel within the harbour.
In their written statements, both the Master and the Chief Officer speak in terms of the card being ‘handed’ by the Chief Officer to the Pilot. When called to give evidence after the Master’s evidence had been completed, the Chief Officer explained what he meant to convey by that expression. He said that he did not actually hand the two documents to the Pilot; rather he drew the Pilot’s attention to the documents, told him what they were, and placed them in front of the Pilot on the bridge window. He followed the same practice in Newcastle. His usual practice was to produce the documents and explain what they were, rather than actually placing them into the Pilot’s hands. I do not regard this ‘correction’ of his evidence, if in truth it is a correction, as of itself detracting from his testimony on this point. I am conscious that the Master gave his evidence on this issue without giving the same explanation as the Chief Officer volunteered, but that does not detract from the Chief Officer’s evidence on this point.
In my view, the probabilities are overwhelming in favour of the usual practice having been followed at Port Kembla. There is no reason for a departure from the ship’s ordinary routine of preparing a pilot card and making it available to the Pilot. I do not accept the Pilot’s evidence that this did not occur on this occasion. Whether the Pilot derived information as to the vessel and its handling characteristics from the card which the Chief Officer produced for his inspection, from plaques above the ship’s telegraph, or from the boards fixed to the aft bulkhead of the bridge does not matter.
I note that the Pilot does not suggest (nor could he, given his version of the events) that his pilotage of the vessel was impeded in any way by reason of the absence of these documents assuming that they were not provided to him.
The passage plan and the pilotage report
The passage plan
Captain James prepared a written passage plan for Port Kembla harbour as part of the Advanced Marine Pilot that he attended course on 16 March 2001. In par 8 of his witness statement dated 26 February 2004 he stated that it was his intention to navigate the Fortius ‘in accordance with my passage plan’. The passage plan consists of admiralty charts of the relevant sections of Port Kembla harbour with handwritten annotations, as well as some information about tugs.
The Pilot expected that the Fortius would be in ballast when she arrived in Port Kembla; that is, she would have no cargo, and only sufficient ballast to maintain stability. He expected that the total displacement of the vessel would be around 60,000 tonnes. In fact, the Fortius had both cargo and ballast on board, and its actual displacement was about 110,000 tonnes. If the Fortius had been fully laden with cargo, then its displacement would have been in excess of 190,000 tonnes.
In fact, as the Pilot admitted in cross-examination, his passage plan only refers to fully laden vessels. The assertion in his witness statement that he intended to navigate the partly laden Fortius in accordance with the notations on that passage plan is incorrect. The notations forming part of the passage plan are not relevant to the passage of a partly laden vessel into the inner harbour. For example, one notation indicates that the speed through the cut should be less than 4.5 knots, whereas the more lightly laden Fortius was taken through the breakwater and into the cut at 6.1 knots or thereabouts.
Counsel for the defendant, Mr Rares SC, submitted that it is improbable that a pilot would produce a passage plan to a master, and particularly to a foreign master, which had annotations upon it which were inappropriate to the vessel to be taken under pilotage. The Pilot maintained that he showed the pilotage plan to the Master ‘for a reference’. He said: ‘It’s still courtesy to show him the plan’, even though the passage plan is only applicable to fully laden cape size vessels. However, although the Pilot showed the passage plan to the Master, he said that he did not expect him to read it. In response to an earlier question he had said:
‘Every vessel I bring in I show them this plan and I show them how to do it. I don’t exactly point to the statements’.
I find that the Pilot did not have with him when he went on board a passage plan which contained relevant notations with respect to the intended passage of the Fortius. However, the probabilities are that the Pilot had what he called ‘his passage plan’ with him when he went on board because it included the admiralty charts for the sections of the harbour which the Pilot could use, as he said he did, to show the Master his intended passage to the berth. I so find. If the Pilot appreciated (as he says he did), that the Fortius’ displacement was 110,000 tonnes, it is unlikely that he would have drawn the Master’s attention to his annotations on those charts, which had no relevant application. As will later appear, I accept that the Pilot did appreciate that the Fortius’ displacement was 110,000 tonnes.
The pilotage report
Shortly before boarding the Fortius, Captain James claims to have prepared a document styled ‘pilotage report’ in relation to the Fortius. The report included information about the vessel derived from the Corporation’s computer. The pilotage report also contained some sketches, or reproductions of parts of charts, showing the approximate position in the inner harbour for the swinging of the vessel, and for the berthing of the vessel at CB2, port side to.
The Master says that when he returned to Port Kembla on 19 May 2002, the pilot on that occasion produced a pilotage report containing information similar to the ‘approx posn for vessel swinging’ which appears in the copy of Captain James’ pilotage report tendered in evidence. The Master’s evidence is that this is the precise information which he expected Captain James to provide when the Fortius first entered Port Kembla on 15 April 2002, but which Captain James did not.
The report contains a section headed ‘Passage Plan Procedures’. At the end of that section the following appears:
‘I hereby acknowledge and accept the proposed plan.
…’Space was left for the Master’s signature. The Pilot’s evidence is that he did not ask the Master to sign this acknowledgement and acceptance of the proposed plan. When asked why he did not follow the procedure of having the Master sign his acceptance of the proposed plan before the Pilot embarked upon it, the Pilot’s initial response was ‘I don’t know’. Then he said that his usual practice was not to procure the Master’s signature to the acknowledgement and acceptance of the proposed plan at the time when the plan had been explained to the Master. Rather, he said, ‘we generally did it at the end’.
Notwithstanding the unsatisfactory nature of this evidence, the probabilities are that the Pilot produced his pilotage report to the Master on arrival of the Fortius at Port Kembla. The document was prepared for that purpose, and there is no rational explanation as to why it would not have been used in that way. The markings on the copy of the report tendered in evidence suggest that it was used as part of the process by which the Pilot explained to the Master his intended passage of the Fortius into the harbour. Further, it is improbable that any pilot would behave in the unhelpful and uninformative manner which the Master attributes to the Pilot.
Whilst it may be that the inappropriateness of the Pilot’s passage plan inhibited the Pilot’s ability to explain his intended passage, I do not accept the Master’s evidence that the Pilot did not produce any documents to him. I accept the Pilot’s evidence that he used his pilotage report and passage plan to explain his proposed passage to the Master. There is no reason why the Pilot would not have done on this occasion what he did on every other working day, namely, discuss the proposed passage with the Master by reference to these documents. However, the Pilot did not leave his pilotage report on the bridge front as he originally claimed, because he later asserted that he took it with him on to the bridge wing to remind him of the location of the tugs.
The Master contends that the non-provision by the Pilot of information as to his intended passage plan for the Fortius impeded the Master’s ability to properly discharge his responsibilities as master of the Fortius. In cross-examination the Master said:
‘Captain, is it your evidence that you really had no idea what the Pilot was going to do in the inner harbour at Port Kembla, and that because you really had no idea what he was intending to do you were not in a position to intervene when things started to go wrong? --- Yes.
Would it be fair to say that you found yourself in a position where you were not happy about the way the Pilot was conducting the vessel, but you were in no real position to query his actions because you had little or no idea as to what should have been happening; is that right? --- Yes.’
I do not accept this evidence. The Master gave the following evidence as to his understanding of the relationship between a Master and a Pilot of a vessel:
-the Master must remain in absolute control of his vessel and is ultimately responsible for ensuring the safety of the vessel at all times, even when a Pilot is on board;
-the Master is ultimately responsible for the safety of the ship and for the safety of other ships or other property in the port whilst the ship is coming into port;
-when a Pilot boards a vessel, he is joining the bridge team as an addition to that team, not taking over control or responsibility from the officer of the watch;
-the presence of a Pilot on board does not relieve the Master or the officer of the watch of their duties and obligations for the safety of the ship;
-the Master and the officer of the watch should be prepared to exercise their right not to proceed to a point where the ship would not be able to manoeuvre, or would be in any danger;
-the Pilot remains subject to the Master’s authority at all times. He advises the Master as to how the Pilot considers that the vessel should be manoeuvred, but does not give orders which must be obeyed by the Master;
-if the Master disagrees with the Pilot’s advice, he seeks clarification from the Pilot as to why the advice was given. If, having been given that clarification, the Master still does not agree with the advice, he will not follow it, but will take whatever action he thinks appropriate in order to ensure the safety of the ship;
-all of the officers on watch have to be sufficiently aware of the Pilot’s intentions to meaningfully query his intentions at any stage;
-the bridge team has to know what is expected to happen so that they can intervene in an appropriate way if what is expected to happen does not occur;
-the ship must allow whatever time is required in order to obtain sufficient information to enable the bridge team to monitor the Pilot’s manoeuvres in the pilotage area;
-the Master must have sufficient information about the manoeuvres the Pilot is proposing in order to monitor what the Pilot is doing to ensure the safety of the ship; and
-the information which is needed includes the Pilot’s planned route, what changes of direction and speed the Pilot proposes and at what times, the speed at which the vessel will pass through the cut, the assistance the Pilot expects to receive from the tugs, and when it is anticipated they will be used and in what manner.
Captain Nahapiet’s assessment of the Master was that he is a careful man, who cared for the safety of his vessel and who was perhaps over cautious. My own impression from watching the Master give evidence over some days is that he is both knowledgeable and careful. Given his understanding as to the relationship between Master and Pilot, it is unlikely that the Master would knowingly allow a Pilot to place him in the position where he was incapable of discharging what he conceived to be his responsibilities as master of the Fortius in relation to the safe navigation of his ship.
Ultimately the Master conceded in cross-examination that either the Pilot gave him a great deal more information than is set out in his statement, or he was not acting prudently when he permitted the Fortius to proceed into Port Kembla harbour under his pilotage on 15 April 2002. In re-examination the Master appeared to accept that he had received more information from the Pilot before the breakwater, even though it is not to be found in his statement.
In my view, whether by provision of the passage plan, the pilotage report or by oral explanation or by a combination of all three, it was the Master’s perception when the Fortius entered the inner harbour that he had received sufficient information from the Pilot to enable him to monitor the safe passage of the Fortius to CB2.
What the Master was not told
The Pilot expected the Fortius to have a displacement of about 60,000 tonnes. I accept that he learnt when he boarded that the Fortius’ displacement was about 110,000 tonnes. That information was shown on the pilot card (at 111,359.8 tonnes). In any event, it would be a simple matter for a person with the Pilot’s experience to calculate the approximate displacement of the vessel in the light of information given by the Master as to the weight of the cargo and ballast on board. In addition, a person with any experience at all of cape size vessels can discern from the way in which the ship is sitting in the water, and the visibility of the paint on the vessel’s hull, as to whether it has a displacement of 60,000 tonnes or 110,000.
The Pilot says that all that was required to accommodate for this development was a ‘slight operational change’ to his intended passage plan, namely that he decided ‘to stop the vessel for the swing to starboard in the inner harbour’, in the sense of slowing the Fortius down to a very low speed. If this was the Pilot’s intention, he did not tell the Master that he proposed to stop the Fortius, or slow her to a trickle, when she got to any particular point in the inner harbour.
The Pilot’s explanation for failing to disclose that information to the Master is unconvincing. It was:
‘Why didn’t you tell him how you were going to navigate the vessel before you embarked on the navigation of it? --- I told him when we went in the inner harbour we’d swing about starboard. How that occurs depends on the weather conditions and different environmental factors on the day.’
The significance of the higher displacement
The difference between the ballasted displacement (60,000 tonnes) and the partly laden displacement (110,000 tonnes) of the Fortius becomes relevant when the momentum of the vessel is considered. This is because the formula for the calculation of the momentum of a body is mass multiplied by speed. A vessel of 110,000 tonnes travelling at the same speed as a vessel of 60,000 tonnes will have a higher momentum than the lighter vessel, and will thus be harder to start, harder to stop and harder to turn. Captain Nahapiet’s opinion was that the disposition of the weight of a vessel with a displacement of 110,000 tonnes also causes a vessel to react differently from a vessel which is only in ballast. Captain Nahapiet said:
‘… you can be caught out if you’re not familiar with handling a vessel of that size in that displacement.’
Captain Nahapiet also said that whether the 110,000 tonne displacement is all cargo, or some cargo and some ballast, also makes a ‘little bit of [a] difference’ because the vessel:
‘commences turning differently and it turns differently and it is harder to stop or easier to stop because the disposition of the cargo and the ballast changes the centre of buoyancy and the centre of gravity and that changes the handling characteristic of the ship.’
Captain Krol, on the other hand, expressed the view that what was important was the vessel’s displacement rather than whether that displacement arose from a combination of cargo and ballast.
The Pilot’s experience with partly laden cape size vessels was limited. In particular, he had no experience of swinging a partly laden cape size vessel with a displacement of 110,000 tonnes going to CB2, since ordinarily the cape size vessels which he swung to starboard in the inner harbour were only in ballast, as they were to load their cargo of coal on arrival at CB2. But the Pilot did have extensive experience of stopping fully laden cape size vessels in order to berth at the BHP discharge wharves. He also had extensive experience in taking fully laden or nearly fully laden vessels from the No 2 discharge berth to sea. This involves taking the vessel off the berth, manoeuvring the stern back into the eastern basin (between CB2 and the grain berth) and then swinging the vessel to port into the cut. In the Pilot’s opinion, this is a more difficult manoeuvre than swinging a vessel in the manner that he intended to swing the Fortius on 15 April 2002.
The Pilot adopted a practice of ‘driving the vessel around’ when swinging cape size vessels in ballast to starboard in the inner harbour. He gave the following description of what that practice involves (the ‘investigators’ is a reference to the ATSB):
‘Did you tell the investigators with a cape size in ballast you normally drive the ship around? --- In ballast, yes.
What does that mean? --- It means you use the tug on the shoulder to stop the vessel and you keep the engines going a bit longer than you would normally in a ballasted ship.
When you say keep the engines going a bit longer can you tell his Honour the sequence of orders that you give to drive a cape size in ballast around, that you were describing on this occasion? --- You just, you go from dead slow ahead to slow ahead and you just keep the engines going much longer than you would normally as the speed – you are not actually making any forward momentum you are just turning quicker.
Is that a variety of the kick ahead technique that you have just described to his Honour? --- The old kick ahead technique, no, that’s – because you are using the tugs on the bow, both tugs on the bow. It’s a different technique.
But you are telling his Honour that you kept the engine on slow ahead a lot longer than you would where the vessel was fully loaded, is that right? --- Yes, that’s right.
How much longer? --- Maybe two minutes, not much longer.
Is it the purpose of giving the increase in engine speed from dead slow ahead to slow ahead to give a short but substantial burst of engine power to kick the vessel into the beginning of a swing or kick start it swinging? --- Start it swinging yes.
The longer you keep the engine moving forward at slow ahead the more likely it is that the vessel will gain forward momentum? --- No.
Now, driving the ship around, as you understand it, means keeping the engine on a speed higher than dead slow ahead for a longer period? --- Yes.
You put it up beyond slow ahead? --- Sometimes, not often.
What displacement does a cape size in ballast to which you were referring when you were discussing that concept with the ATSB investigators, what is the displacement of the cape size? --- When you drive them around?
In ballast? --- Maybe 90,000 tonnes.
Or less? --- Or less, yes.
What about the 60,000 tonnes you anticipated the Fortius to be likely to have before you got on board? --- Yes you do then, yes.
You certainly don’t stop the vessel when she is in ballast to perform this manoeuvre? --- In effect you do stop the vessel.
At what point? --- When the tug on the starboard shoulder stops the vessel.
Do you tell the tug captains before you commence the navigation in the inner harbour that the vessel is in ballast? --- No.
Do you tell them she’s laden or fully laden? --- No.’
(emphasis added)
The Pilot told the ATSB at an interview on 17 April 2002 that a ‘slightly different approach’ was required with the Fortius because she was ‘semi loaded, large inertia’. The ‘slightly different approach’ is apparently the slight operational change referred to in par 17 of the Pilot’s first statement, namely that he decided to stop the vessel for the swing to starboard in the inner harbour.
Did the swing commence too far to the north in the inner harbour? (Approximate time: 13:50)
The Pilot’s boarding of the Fortius was followed by the arrival of the tugs. Shortly thereafter the vessel entered the breakwater at Port Kembla harbour, and made a starboard turn in the outer harbour before proceeding through the cut. It is not necessary to describe this sequence of events more fully because this portion of the vessel’s voyage has no bearing upon the collision or its causes.
As the bow of the Fortius emerged from the cut and prior to the swing in the inner harbour, the speed of the Fortius by the vessel’s GPS was 3.2 knots. This is consistent with the Master’s assessment that her speed was less than 4 knots, and was an appropriate speed for this manoeuvre.
The Pilot says that when the bridge of the Fortius was in line with the ro-ro berth (the old ANL berth), at approximately 13:50 hours, he advised ’20 degrees starboard’, and then ‘hard to starboard’, and ‘slow ahead’ in order to commence the swing. The Master and Chief Officer give a slightly different account of the sequence and timing of the orders given at this point. For example, they say, and the Bell Book records, that the slow ahead order was given at 13:48. It is neither possible nor necessary for me to determine which of these different accounts is ‘correct’.
The Master, the Chief Officer and the Pilot each illustrated the position of the Fortius on a chart to show her position at the commencement of the swing. Those illustrations are in evidence. The illustration performed by the Pilot shows that the swing began slightly further to the north than usual. However, the Pilot gave evidence that this illustration shows the point at which the wheel was put hard over, rather than the point at which the order for starboard 20 degrees was given. If the commencement of the swing is regarded as when the order for starboard 20 degrees is given, then the swing commenced a little earlier than is shown on the Pilot’s illustration. The Pilot also prepared a number of annotated charts shortly after the incident. Chart 1 shows the position of the Fortius as she came out of the cut and into the inner harbour, and Chart 2 shows the position of the Fortius at the commencement of the turn. Captain Bozier, an expert witness called by the defendant, estimated in his first statement the position of the Fortius at the time of the commencement of the swing based upon information derived from the course recorder trace and/or tug records. The derived position is a slightly different position to that shown by the Master in his illustration, but Captain Bozier accepted that there is room for legitimate disagreement based on the course recorder trace and the tug records as to the location of the Fortius in the inner harbour at any particular point in time.
The defendant submits that the swing commenced at a position in the inner harbour which is further in from the cut than usual. In the defendant’s submission the swing began late and further to the north. Ultimately, Mr Rares SC, for the defendant, accepted that even if the swing did begin late and further to the north than was to be expected, this was of no causal significance. That concession was correctly made, because when the Fortius was approaching the dolphin at the end of the multi-purpose berth (when the slow ahead/slow astern controversy referred to later in these reasons arises) both Master and Pilot agreed that she was not too far north in the inner harbour, but could safely turn without hitting the dolphin. The Pilot’s evidence was that if it were the fact that the entry into the harbour was further north than usual, it had no ongoing effect at this point.
Nonetheless, Mr Rares submitted that the resolution of this issue might throw some illumination on the Pilot’s appreciation of the handling characteristics of the Fortius.
The tug captain of the Karoo stated in a report admitted into evidence that the Pilot entered the harbour further than usual before commencing his turn to starboard. None of the tug captains were called to give evidence. It is unclear whether the reference is to further to the west, or to the north or both. Observers gave evidence as to their impression that the Fortius was further to the north than usual, but except in the case of Mr Bell, from the defendant’s point of view it is at best unclear whether the observers were describing the commencement of the swing, or some later point in time. In any event, there is no bright line which marks ‘the commencement’ of the swing, nor is there a single spot which is the ‘normal spot’ for the commencement of the swing.
Mr Bell, an employee of the plaintiff’s who was working adjacent to CB2 as the Fortius was manoeuvring in the inner harbour, marked on a chart of the inner harbour with a (1) the normal position at the commencement of the swing, and with a (2) the position at which the Fortius first started its turn. Position (2) was much further to the north than position (1). But the Master confirmed that the Fortius’ bow was close to position (1) when she started the swing to starboard, and that position (2) was not the point at which she commenced her turn. In my view, Mr Bell, although undoubtedly a witness who was doing his best to assist, was confused or mistaken in his recollection.
The Pilot’s evidence was that the Fortius was north of ‘the leads’ when coming out of the cut and not in the ideal position. ‘The leads’ are navigational aides that allow an observer on a vessel to determine whether the vessel is in the same location and heading as that specified by the admiralty chart. The leads through the cut at Port Kembla harbour are on a heading of 300 degrees. On 15 April 2002 the Fortius travelled through the cut on a heading of 306 degrees. The pilot’s explanation for this discrepancy was that:
‘… when we made the turn in the breakwater I had to steer 306 to bring her back onto the leads so she actually came across the leads.’
He denied that the reason for this altered heading, and its consequential affect on the positioning of the vessel, was due to the fact that the Fortius entered the breakwater at an excessive speed. Nevertheless, it was ultimately the Pilot’s evidence that the swing commenced slightly further to the north than usual, but only slightly, and not noticeably so.
It may be, as the defendant submits, that a possible explanation for the fact that the swing commenced further to the north than was usual was because the Fortius with its displacement of 110,000 tonnes was slower in its response to helm orders designed to take her out of the cut and into the inner harbour than would have been the case if the vessel had been in ballast. But neither the Pilot’s evidence nor that of the crew confirms that this is so. At this point it is no more than a possibility, rather than an established fact.
In my view, the position at which the Fortius commenced its swing was further to the north than, but nonetheless close to, the position at which the Pilot ordinarily commenced the swing, and expected to commence that swing on this occasion.
My conclusions are therefore that the swing of the Fortius to starboard commenced a little further to the north than usual, but at an unremarkable spot, and at an unremarkable speed. Even if those conclusions be wrong, any departure from the norm was not a contributing factor to the ultimate collision.
The swing
The Pilot’s account
The Pilot’s account of the swing is as set forth in the following paragraphs. When the bridge of the Fortius was in line with the ro-ro berth (the old ANL berth) at approximately 13:50 hours, the Pilot advised 20 degrees starboard, and then ‘hard to starboard’ and ‘slow ahead’. The purpose of these orders was to commence the swing. The order ‘starboard 20 degrees’ was ‘just to gently commence the swing’, since ‘you always get the swing going slowly’ before engaging the tugs. The engine revolutions were increased from dead slow ahead to slow ahead to assist with getting the swing started.
Within a minute or so of the start of the swing the Pilot advised ‘dead slow ahead’. The Bell Book records an order for ‘dead slow ahead’ at 13:50. Immediately after that order, the following orders were given to the tug masters as recorded in the tug transcript:
13:50:36 - ‘Hello Kembla II, standby for bow to starboard’
13:50:46 - ‘Bullara lay back and go astern’
13:51:29 - ‘Kembla II bow to starboard’The order to the Kembla II was given about a minute after the order for ‘hard to starboard’, and when the Pilot gave these commands he was in the centre of the wheelhouse.
At this stage, the application of the rudder and the effect of the ‘Bullara’ was causing the Fortius to slow down. The tug transcript has a four minute period of silence following the Kembla II’s acknowledgement of the bow to starboard order recorded at 13:51:31. Captain James agreed that during this period, the rate of swing was increasing and the Bullara was acting as a brake and slightly assisting the starboard swing.
When the Fortius was about 300 metres off the grain berth the Pilot moved to the port side of the wheelhouse because he wanted to monitor the distance between the stern and the grain berth to the north. He thought that the swing was ‘going somewhat slower than expected’. He advised stop engines, and saw the Chief Officer moving the telegraph to the stop position. He knew that this order had been implemented when he observed that the revolution counter had dropped to zero. The stop engines order was to be followed by an order for slow astern, since the engine had to be stopped before it could be put astern.
The ‘stop engines’ order was given between the acknowledgement by the Kembla II of the bow to starboard order at 13:51:31 and the order to the Bullara at 13:55:27 to stop, as shown in the tug transcript. The Pilot gave evidence that it was close to 13:54 when the order was given. He had earlier said that it may have been closer to 13:55.
The ‘stop engines’ order is not recorded in the Bell Book.
The Pilot then says that he moved outside onto the port bridge wing about one metre from the ship’s side. The bridge wings on the Fortius were exposed walkways directed perpendicular to the keel of the vessel, one on each side of the wheelhouse. The Pilot was at this time near the extremity of the port bridge wing; that is, he was standing at an elevated position close to the port side of the ship. At this point on the bridge wing there were a number of repeater instruments including a compass, rudder indicator and engine tachometer. The Master remained in his position at the door of the wheelhouse about 15 metres away from the Pilot. The Pilot considered this to be quite unusual, since normally the Master follows the Pilot around ‘like glue’. Thereafter the Pilot shouted his advice to the Master, who then relayed the advice by shouting to the Chief Officer who was standing approximately a further 10 metres from the door. This was quite awkward.
The next order which the Pilot claims to have given is slow astern about 15 or 20 seconds after the stop engines order had been given. He says that he saw the tachometer which was in front of him on the bridge wing ‘flicker’, hence he assumed his order had been carried out. Whilst he observed the master relaying something to the crew, he could not hear what was said. The Bell Book does not record any slow astern order being given at about this time. Rather, the Bell Book records that at 13:56 the order which was given was slow ahead. According to the Master and Chief Officer, the order given was slow ahead.
At this point, the Fortius was moving ahead only very slowly, at a speed which the Pilot estimated as being between 1 and 2 knots. In anticipation that his slow astern order would be carried out, he ordered the Bullara to stop, as otherwise it ‘could have begun to take the vessel aft’.
In R W Miller & Co Pty Ltd v Shortland County Council (1988) 83 ALR 225 Mason CJ distinguished between an arrangement which was predicated upon a performance by a Council of its statutory duty to supply electricity to a consumer, who being entitled, demands a supply, and an acceptance by the Council of an offer by a potential consumer to take and pay for the supply. In Norweb PLC v Dixon [1995] 3 All ER 952 the English High Court held that legal compulsion as to both the creation of the relationship and the fixing of its terms is inconsistent with the existence of a contract. Reference was made in Norweb to the decision of the House of Lords in Pfizer Corporation v Ministry of Health [1965] AC 512 where their Lordships held that there was no consensual bargain where one party was obliged by statute to supply medicines at a particular price, and the other party had a statutory right to obtain medicines at that price. Similarly in Suatu Holdings Pty Ltd v Australian Postal Corporation (1989) 86 ALR 532 at 542 Gummow J held that the routine dealings between the Postal Corporation and members of the public were non-contractual, although there was power to enter into special arrangements which would have contractual force.
In the present case, the defendant submits that there is, using the language of Brennan J ‘something more than an arrangement on the part of the shipowner or master to discharge the statutory obligation by taking a pilot on board and permitting the pilot to navigate the ship’. The additional matters upon which the defendant relies is that the Corporation was carrying on the business of the provision of pilotage services for profit, and that the Corporation assumed the function of piloting vessels into and within Port Kembla itself, as opposed to making available a (licensed) pilot for that purpose.
The Corporation was constituted as a statutory State-owned corporation (‘SOC’) pursuant to s 7 of the PCWM Act. Section 9 of the PCWM Act provides that the principal objectives of each of the three Port Corporations (Newcastle, Port Kembla and Sydney) established by the Act are as follows:
‘(a) to be a successful business and, to this end:
(i)to operate at least as effectively as any comparable business; and
(ii)to maximise the net worth of the State’s investment in the Port Corporation; and
(b) to promote and facilitate trade through its port facilities, and
(c) to ensure that its port safety functions are carried out properly.’
Section 20F of the State Owned Corporations Act 1989 (NSW) (‘the SOC Act’) provides that an SOC is not and does not represent the State, and s 20ZB(1) of the SOC Act, gives a SOC, for or in connection with the performance of its functions, all the powers of a natural person, including the power to enter into contracts and to charge, and fix terms, for goods, services and information supplied by it.
Thus the Corporation had a statutory objective to be a successful business and to maximise the net worth of the State’s investment in the Corporation. The Corporation developed and maintained a competitive price structure, including in respect of pilotage services, although, in accordance with s 54(2) of the PCWM Act, such charges were only fixed with the approval of the Minister. The provision of pilotage services was described by the Port Corporation in its annual report for 30 June 2001 as part of its core business and monies earned from pilotage services formed part of the Corporation’s revenue. For the year ended 30 June 2001 revenues from the provision of pilotage services amounted to about 6.5 per cent of the Corporation’s total revenue. On the Corporation’s website, the Corporation promoted itself and its pilots as having ‘world class people and state of the art navigation tools’. The Corporation referred to users of pilotage services as its ‘customers’.
These factors indicate that the Corporation was both authorised and required to act in a business-like manner in the discharge of its statutory functions and that the Corporation endeavoured to do so. Clearly the Corporation had power to enter into contracts (remembering, of course, that agreements in respect of charges authorised by s 67 of the PCWM Act require Ministerial approval). However, the evidence does not establish any undertaking given by the Corporation to do anything in relation to the Fortius that went beyond the Corporation’s statutory obligations. While it is true that the terms of the Operating License charge the Corporation with the responsibility of ensuring that licensed pilots are available for allocation to vessels, it is the pilot, rather than the Corporation, which undertook the actual piloting of the ships: cf Oceanic Crest (supra) at 649 (Wilson J), 682 (Dawson J).
The fact that there has been a commercialisation of entities, such as the Corporation, carrying out statutory functions does not alter the fact that both the creation of the relationship between the Corporation and the defendant, and the fixing of its terms, arose by the operation of the PCWM Act. The Corporation offered a pilot to the Fortius because it was bound to do so, and the defendant took a pilot on board the Fortius because it was bound to accept and, as I have outlined above, even the resultant financial obligations between the defendant and the Corporation were imposed by the PCWM Act. The absence of voluntariness and the fact of compulsion operating on both the defendant and the Corporation must inevitably lead to a conclusion that in the case of routine arrangements for the provision of pilotage, such as the present, there is no contract.
In Branir Pty Ltd v Owsten Nominees (No 2) Pty Ltd (2001) 117 FCR 424 Allsop J (with whom Drummond and Mansfield JJ agreed) emphasised that (at 525):
‘The essential question … is whether the parties’ conduct, including what was said and not said and including the evident commercial aims and expectations of the parties, reveals an understanding or agreement or, as sometimes expressed, a manifestation of mutual assent, which bespeaks an intention to be legally bound to the essential terms of the contract.’
The question of whether there was ‘agreement’ and ‘mutual assent’ presupposes that the parties had a choice in the matter of whether they could agree and assent, as well as in relation to the terms or conditions on which they would do so. Where there is compulsion, no question of contractual intent in either party arises: Lismore County Council v Stewart (1989) 18 NSWLR 718 at 726 (Hope AJA, Kirby P and Samuels JA agreeing). It is true that in Puntoriero v Water Administration Ministerial Corporation (1999) 199 CLR 575 the High Court had no difficulty in envisaging the existence of a contract between a supply authority and a customer even in circumstances where as a practical and legal matter the customer was constrained to deal with the supply authority, and there was only limited room for negotiation. But the existence of a contract does not appear to have been in issue before the High Court: the issue was as to the scope of the statutory immunity. And, in any event, a majority in Puntoriero appears to have regarded the class of transaction there before the Court as being either (at 585 (Gleeson CJ and Gummow J)) ‘consensual’ or being undertaken with (at 589 (McHugh J)) ‘consent’.
The Corporation’s performance of its port safety function in relation to the provision of pilotage services for the Fortius was imperfect, since it assigned an unlicensed pilot to conduct the Fortius into and within the Harbour, contrary to the stipulation in its operating licence that a duly licensed pilot should be available at all times. This, however, has no bearing on the issue of whether there was a contract between the defendant and the Corporation of the kind which the defendant alleges. There is no reason why a consequence of imperfect performance by one party of a statutory obligation should be the creation of a contract which would not have come into existence had the statutory obligation been properly performed.
The cross claim, insofar as it alleges a breach of contract, therefore fails.
Trade Practices Act
The defendant relies on a cause of action based on s 52 of the Trade Practices Act. The essence of the defendant’s claim in this respect is that the Pilot misled the Master into believing that the Fortius would be safely berthed at CB2 if the Pilot’s orders were implemented.
The first question is whether the Pilot’s conduct in this respect was in trade or commerce. In Re Maritime Union of Australia; ex parte CSL Pacific Shipping Inc (2003) 77 ALJR 1497 the High Court said (at [36]):
‘A ship journeying for reward is in commerce; those who co-operate in the journey of the ship are in commerce and the wages of those persons and the conditions of their employment relate to that commerce.’
But it does not follow that the conduct relied upon to found this particular claim (ie, the acts and omissions of Captain James whilst piloting the Fortius) was conduct in trade or commerce. There are two reasons why Captain James’ conduct does not satisfy that description. First, the Pilot was purporting to carry out the statutory functions of a pilot under the PWCM Act. That was not a function which is itself an aspect or element of activities which bear a trading or commercial character: see Chapman v Luminis Pty Ltd (No 4) (2001) 123 FCR 62 at 109 (von Doussa J). Second, the acts or omissions of Captain James whilst piloting the Fortius are analogous to the incorrect hand signals given by a driver of a truck in the course of a carrier’s haulage business which were held by the High Court in Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 at 602-603 (Mason CJ, Deane, Dawson and Gaudron JJ) not to fall within the words ‘in trade or commerce’. As von Doussa J observed in Chapman (at 109), just because a person ‘is carrying out work of a professional nature in performing that [statutory] function, and is being remunerated for doing so, does not transform the function into an activity which bears a trading or commercial character’. His Honour’s observation is apposite here.
Section 52 of the Trade Practices Act has no relevant application.
Even if the section did apply, there is a question as to whether the Pilot’s conduct was misleading or deceptive or causative of the loss. On my findings, the Pilot should have ordered the engines to be engaged at full astern at the 150 m point, which order he failed to give. The case is thus one of failure to issue an order, or remaining silent. The Pilot knew at the 150 m point that the Fortius’ engines should have been engaged at full astern and the Master had a reasonable expectation that such information would be disclosed to him. The failure on the part of the Pilot to convey that information to the Master was thus conduct which was likely to mislead or deceive. However, the Master was not in fact misled or deceived. The Master made his own assessment of the situation and of the advice he was receiving from the Pilot and came to his own conclusion that the engines should have been put full astern at the 150 m point. The claim under s 52 therefore also fails for want of reliance on the part of the Master upon the Pilot’s silence.
The claim under s 52 therefore fails.
Tort
In the light of my findings, but subject to the question of statutory immunities which I will later address, apportionment between the defendant and the Corporation pursuant to s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) falls for consideration. Before turning to that question, I should observe that two other negligence related issues remain.
The first issue is that the defendant seeks to recover from the Corporation its losses in physically repairing the damaged ship and for loss of income whilst the Fortius was being repaired. This claim raises the same issues as to the responsibility for the collision which I have dealt with when considering the plaintiff’s claim against the defendant. In answer to this claim, the Corporation pleads contributory negligence on the part of the defendant. An issue arose in final submissions as to whether my findings as to the respective responsibilities of the defendant and the Corporation for the plaintiff’s loss will be determinative of the apportionment of the defendant’s loss for contributory negligence pursuant to s 9 of the Law Reform (Miscellaneous Provisions) Act 1965 (NSW). However, in light of my conclusions in relation to the statutory immunities, to which I will come shortly, it is not necessary to pursue this issue further.
Second, Mr Sexton stated on more than one occasion that he apprehended that the defendant was making a claim against the Corporation which had not been clearly articulated, but which was apparently grounded in the existence of a duty of care on the part of the Corporation to protect the ship in relation to the positioning of the shiploaders. Presumably, Mr Sexton’s apprehension was based in particular (g) to par 25 of the Notice of Second Further Amended Cross Claim. Mr Rares did not respond to my invitation to withdraw any such claim, but nor has he put any submissions in support of it.
I agree with Mr Sexton that this claim has not been clearly articulated, and in the absence of any submissions from Mr Rares in support of the claim, I decline to accept it.
Apportionment
In assessing the relative share of responsibility of the defendant and the Corporation for the plaintiff’s loss, all of the circumstances must be looked at, although the authorities direct attention to the relative causal potency of each party’s conduct. The extent to which each party fell below the standard of care expected of a reasonable person in the circumstances is to be taken into account.
Mr Sexton proposed that the relative causal potency of each party’s conduct is largely to be assessed having regard to their conduct at and after the 150 m point, because at that point both the Master and the Pilot were aware of the problem and how to solve it, and there was time for each of them to do so. Given the logic of this proposition, and in the absence of any alternate proposal from the defendant, I generally accept Mr Sexton’s submission in this regard. However, on my findings, the fact that the Fortius was in that position was due to faulty navigation of the ship on the part of the Pilot, and some small allowance for that fact is appropriate.
An issue that periodically arose throughout the course of the proceedings was whether the Master was subject to any impediments that restricted his ability to react to the emerging crisis. In particular, attention was drawn to the Master’s lack of familiarity with Port Kembla Harbour, and the fact that the Pilot’s control of the tugs impaired the Master’s ability to act. Neither of these assertions should be accepted. While the Pilot was engaged to conduct the Fortius in the Harbour, the Master accepts that any local knowledge which the Pilot had was immaterial by the time the Fortius had reached the 150 m point. As for the second assertion, on the view which I take of the legislation, the Pilot was subject to the authority of the Master. As a consequence, I do not accept that the Master’s ability to exercise that authority was constrained by the fact that it was the Pilot who was in communication with the tugs. The Master certainly did not feel any such constraint when he ultimately ordered the engines to be put to full astern.
Thus the case is one in which the Master and the Pilot each had a duty to perform, and neither did so. Each of them could and should have acted differently – the Pilot because he was factually in control of the navigation of the ship, and the Master because it was his responsibility to ensure that the ship was not placed in a dangerous position. However, the Master’s responsibility only arose in consequence of the Pilot’s failure properly to discharge his function. The fault of the pilot at and after the 150 m point was marginally greater than that of the Master. Taking that fact into account, as well as the fact that it was the pilot who was responsible for the ship being in a dangerous position in the first place, I apportion responsibility for the plaintiff’s loss to the defendant as to 40 per cent and to the Corporation as to 60 per cent.
Statutory immunities
The Corporation contends that it is immune or exempt from any liability in negligence arising out of the collision by reason of s 410B of the Navigation Act and s 85 and s 86 of the PCWM Act. The Corporation also contends that if there were a contract between it and the defendant those sections would also immunise or exempt the Corporation from any liability in contract arising from the incident. As I have found that there is no liability in contract, it is not necessary for me to deal with this second contention.
The decision of the High Court in Puntoriero (supra) confirms that any grant of statutory immunity which derogates from what would otherwise be the rights of individuals should be zealously interpreted.
Section 410B
Section 410B of the Navigation Act provides as follows:
‘(1)A pilot who has the conduct of a ship is subject to the authority of the master of the ship and the master is not relieved from responsibility for the conduct and navigation of the ship by reason only of the ship being under pilotage.
(2)Notwithstanding anything contained in a law of the Commonwealth or of a state or Territory, the owner or master of a ship navigating under circumstances in which pilotage is compulsory under a law of a State or Territory is answerable for any loss or damage caused by the ship, or by a fault of the navigation of the ship, in the same manner as the master or owner would if pilotage were not compulsory.’
I have already found that the effect of s 410B(2) is to make the defendant vicariously liable for the negligence of the Pilot whether or not the Pilot is licensed. The claim for contribution which the defendant makes against the Corporation depends upon whether the Corporation, as the Pilot’s general employer, would if sued have been liable in respect of the same damage.
Section 410B(2) does not, in terms, confer any immunity upon the Corporation in relation to the negligence of the Pilot. However, the issue in Oceanic Crest (supra) was whether the section operated to make a shipowner solely liable for the negligence of the Pilot to the exclusion of any liability on the part of the Pilot’s employer. By a majority (Gibb CJ, Wilson and Dawson JJ; Brennan and Deane JJ dissenting) the High Court held that the effect of s 410B(2) was to exempt the Pilot’s employer (in that case the Port Authority) from any liability for damage caused by the Pilot’s negligence in the conduct of the vessel.
The conclusion of the majority that the Port Authority was not liable for the Pilot’s negligence had two foundations. First, the general law principle that the Port Authority was not responsible for the negligent navigation of a compulsory pilot it employed because the pilot was executing an independent duty which the law imposed upon him. Second, the provisions of s 410B itself.
In relation to s 410B Gibbs CJ said (at 641):
‘This provision, which was not in force at the time of the stranding which gave rise to Fowles v Eastern and Australian Steamship Co Ltd [[1916] 2 AC 556], provides an additional reason for concluding that, in the case of compulsory pilotage, the employer of a pilot is not responsible for his negligence. “The law does not recognise a several liability in two principals who are unconnected” …In the case of a pilot, s 410B(2) of the Navigation Act casts the liability directly on the shipowner and in consequence excludes any liability of the general employer of the pilot.’
Wilson J said (at 646):
‘… the terms of sub-s (2) plainly impute the pilot’s negligence to the shipowner in all cases where loss is caused through faulty navigation, leaving it responsible for damage to its own ship, as well as for injury caused thereby to the property of another…
…
… the only basis available to Oceanic [the shipowner] in support of its claim is the proposition that Pilbara, as the employer of the pilot, was vicariously liable to Hamersley for his faulty navigation. But that liability cannot co-exist with an identical liability attaching to Oceanic. It is unnecessary to look for the exceptional circumstances that would, consistently with the views of the House of Lords in Mersey Docks and Harbour Board v Coggins and Griffith (Liverpool) Ltd [[1947] AC 1], result in the transfer of the service and control of a servant from a general employer to a particular employer so as to attach vicarious liability for the servant’s negligence to the latter. It is unnecessary because the statute has pre-empted the answer. …’
Dawson J held, at 681, that the effect of s 410B(2) was to exclude liability on the part of Pilbara for the negligence of the pilot in the course of his employment. His Honour said (at 685):
‘The vicarious liability imposed by the section is as if the pilotage were not compulsory, that is, as if it were voluntary. That means, fiction though it might be, that the position of the compulsory pilot as regards the owner is one in which the maxim respondeat superior applies, necessarily excluding the responsibility of some other person upon the same basis.’
The defendant submits that consistently with the decision in Puntoriero (supra) s 410B(2) should not be construed as conferring an immunity on the Corporation for the negligence of the Pilot, let alone an immunity with respect to a contractual claim for negligent navigation. No public purpose would be served, in the defendant’s submission, by imputing to the Parliament an intention to derogate from a shipowner’s rights of action where the person made available as a ‘pilot’ was not lawfully entitled to have the conduct of the vessel.
So far as I am concerned, the construction of s 410B(2) has been authoritatively settled by the decision of the majority in Oceanic. Section 410B does not derogate from any right of action which a shipowner may have against the Corporation in consequence of its making available an unlicensed person to pilot the Fortius. But the defendant has not brought such an action.
I have already rejected the defendant’s submission that the Fortius was not navigating under circumstances in which pilotage is compulsory, as well as its submission that a shipowner is not liable for the defaults of a voluntary unlicensed pilot. No other issues as to the construction of s 410B(2) were raised by the defendant hence, subject to the constitutional question, s 410B(2) operates to defeat the defendant’s claim for contribution under the Law Reform (Miscellaneous Provisions) Act 1946 (NSW).
Section 410B also operates to defeat the defendant’s claim against the Corporation in negligence to recover the cost of repairs to the ship and loss of income whilst the Fortius was being repaired. The operation of the section in this manner can be seen in The Towerfield (supra), where the House of Lords held that s 15 of the Pilotage Act 1913 (Imp) (a provision practically identical in wording to s 410B(2)) not only operated to render a shipowner liable for damage suffered by third parties, but also operated to defeat claims brought by the shipowner to recover damage that he suffered whilst his ship was under compulsory pilotage.
Constitutional validity of s 410B(2)
As I indicated earlier (see [436] above), the defendant relies upon s 51(xxxi) of the Constitution. For present purposes I am concerned with the second of the ways in which the defendant puts its argument, namely that s 410B effects an acquisition of the defendant’s property, that is, the causes of action which it would otherwise have against the Corporation, without the provision of just terms.
Authorities such as Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297 and Smith v ANL Ltd (2001) 204 CLR 493 establish that a right of action which is vested in a person is property, and a law which extinguishes a vested right of action may bear the character of a law with respect to the acquisition of property.
Here, there never was a time when the Corporation was liable to the defendant for the damages which the defendant now seeks, and it is nonsensical to speak of proprietary rights being ‘acquired’ contrary to s 51(xxxi) when those rights never existed at all.
Further, for the reasons earlier explained (see [439] – [441] above), s 410B is not a law which is properly characterised as a law with respect to the acquisition of property within the meaning of s 51(xxxi).
For these reasons, the claim that s 410B of the Navigation Act infringes s 51(xxxi) of the Constitution by reason of the operation of the section in the light of the decision of the majority in Oceanic is rejected.
Section 86 of the PCWM Act
I have already concluded (see [423] above) that the defendant is liable to the plaintiff under s 85(2) of the PCWM Act for the loss or damage to CB2 caused by the negligence of the Pilot. Although the decisions of the High Court in Oceanic was given in the context of s 410B of the Navigation Act, the decision of the majority implies that the liability which s 85(2) imposes on the defendant for the negligence of the Pilot precludes any simultaneous liability for such conduct on the part of the Corporation as the Pilot’s general employer.
Section 85 of the PCWM Act is in very similar terms to s 410B. Section 85 was enacted after the decision of the High Court in Oceanic Crest and the House of Lords in The Esso Bernicia, which reinforces the contention that the section should receive the same construction as has been given to s 410B.
It is, however, unnecessary to pursue this question further because s 86 of the PCWM Act specifically provides:
‘1.Neither the State, nor the Minister, nor a pilotage service provider is liable for any loss or damage that is attributable to the negligence of any person employed as a pilot by the pilotage service provider while the person is acting as a pilot.
2.A person employed as a pilot by the pilotage service provider is not personally liable in pecuniary damages for any loss or damage attributable to the person’s negligence while the person is acting as a pilot.’
The defendant contends:
(a) that the Corporation is not a ‘pilotage service provider’; and
(b) that Captain James was not at the relevant time ‘acting as a pilot’.Pilotage service provider
Section 77 of the PCWM Act defines ‘pilotage service provider’ so as to mean:
(a)in relation to pilotage services provided by a Port Corporation under an operating licence – the Port Corporation, or
(b)in relation to pilotage services provided by a contractor under a contract under s 81 – the contractor, or
(c) in relation to any other pilotage services – the Minister.
The Corporation is a ‘Port Corporation’ (s 3). The term ‘operating licence’ is defined in s 3 so as to mean ‘an operating licence issued to the Port Corporation by the Governor under Division 3 of Part 2’.
Division 3 of Part 2 consists of ss 11 – 15 (inclusive) of the PCWM Act. Section 11 defines ‘port safety functions’ to include:
‘…the function of providing or arranging for the provision of … pilotage services …’
Section 12 then provides:
‘(1)The port safety functions exercisable by a Port Corporation are to be determined by the Minister;
(2)any such port safety functions may only be exercised by a Port Corporation in accordance with an operating licence issued to the Port Corporation by the Governor on the recommendation of the Minister;
(3)while a Port Corporation holds an operating licence, the Port Corporation must exercise the port safety functions to which it applies and must do so in accordance with the licence, the marine legislation and any other relevant Act or law.
…’
Therefore, if and insofar as the Corporation provides or arranges for the provision of ‘pilotage services’ under an operating licence issued to it by the Governor under Division 3 of Part 2, the Corporation is a ‘pilotage service provider’ for the purposes of the PCWM Act.
At the time of the collision, the Corporation had been issued with an operating licence by the Governor pursuant to Division 3 of Part 2 of the PCWM Act. Clause 4.1 of that licence provides as follows:
‘The Port Kembla Port Corporation is granted this licence for the purpose of carrying out the port safety functions or services required under sections 10 and 12 of the Act and which are set out in this licence.’
Clause 16.1 of the licence provides as follows:
‘The licensee must ensure that the pilotage service provider maintains a system to ensure that licensed pilots are always available to maintain an efficient and safe pilotage service for the entire period that it is performing the function.’
Appendix 7 to the licence contains performance standards which are to be achieved. Those standards require the licensee to ensure that the pilotage service provider does specified things and to ensure that the pilotage service providers’ pilots are assessed in a specified manner.
The defendant submits that the Corporation was not a ‘pilotage service provider’ within the meaning of s 86 for the following reasons:
-it is plain from the terms of the operating licence that the Corporation was not a pilotage service provider. The licence expressly differentiates between the Corporation and the pilotage service provider for Port Kembla; and
-there is no evidence of any determination by the Minister under s 12(1) of the PCWM Act conferring a port safety function, namely pilotage, on the Corporation in addition to those in the operating licence.
If the defendant’s submissions are correct, it would follow that the Corporation has been appointed by the operating licence to supervise a pilotage service provider. However, the Minister has not entered into a contract with a person for the provision of pilotage services pursuant to s 77(c) and s 81 of the PCWM Act in relation to Port Kembla. There is nobody other than the Corporation who fits or might fit the description ‘pilotage service provider’ contained in cl 16.1 of the operating licence.
Captain Hoogendoorn’s evidence establishes that at least since 1989, when he was first employed at Port Kembla, nobody other than the Corporation or its predecessors (the MSB, the Illawarra Ports Authority) have provided pilotage services at Port Kembla. The operating licenses issued to the Corporation prior to 20 December 2000, referred in cl 16.1 to the ‘licensee’ as being obliged to ensure the availability of pilots. There can be no doubt therefore but that the Corporation was a ‘pilotage service provider’ for the purposes of the PCWM Act prior to 20 December 2000. The words ‘pilotage service provider’ were first inserted into cl 16.1 in the version of the operating licence which came into being on 20 December 2000. Yet the change in the wording of the licence was not accompanied by any change in the identity of the body which was in fact providing pilotage services.
The evidence also shows that there was a common form of operating licence for Port Kembla, Newcastle and Sydney; and that in Sydney the ‘licensee’ and the ‘pilotage service provider’ are different entities. That suggests that if the operating licence was to take a common form in relation to the three ports, that its language needed to be sufficiently flexible to accommodate the different pilotage arrangements which were applicable in each of those ports.
The port safety operating licence needs to be construed against the background of the practical operation of the industry in relation to which the licence was granted. By the grant of that licence the Minister has determined that the function of providing or arranging for the provision of pilotage services is to be exercised by the Corporation. It would be irrational to attribute to the Minister an intention that the Corporation should be confined to the role of supervising some other pilotage service provider, when the Minister has not taken any steps to appoint any other person to that position.
For these reasons I conclude that the Corporation is a pilotage service provider within the meaning of s 86(1) of the PCWM Act.
Acting as a pilot
The defendant contends that Captain James was neither employed as a pilot nor acting as a pilot at the time of the collision because he was not the holder of a licence issued under the MPL Act. The defendant contends that ‘acting as a pilot’ must be read as confined to ‘acting lawfully as a pilot’ because s 14(1) of the MPL Act provides that no person other than a person licensed under that Act shall undertake the conduct of a ship to which he does not belong. The statutory context and the different definitions of ‘pilot’ contained in the MPL Act and the PCWM Act are discussed at ([417] – [421])above.
In the defendant’s contention, Captain James could only ‘act as a pilot’ if he were a public officer; after all, s 86(1) is not concerned with a person’s thespian qualities – it is concerned with granting immunity when a negligent act is committed by a public officer, being a licensed pilot, who is in the employ of a pilotage services provider
A consequence of the defendant’s contention, if correct, would be that a shipowner would escape the liability which s 85 was intended to visit upon it if the pilot is acting unlawfully, however inconsequential the fact of illegality may be in terms of causation. That is not a consequence which the legislature is likely to have intended. The legislative history and extrinsic materials referred to above demonstrate that the statutory objective was to visit upon the shipowner liability for the negligence of a stranger who in fact had the conduct of the ship, whether or not that stranger was a licensed pilot. The above material also demonstrates that the definition of ‘pilot’ contained in the MPL Act is only of limited assistance in the interpretation of the PCWM Act, given the significant differences between the definitions and approaches contained in the two statutes.
Captain James, as a pure matter of fact, was employed by the Corporation as a pilot – that is, as a person engaged by the Corporation to have the conduct of vessels to which he did not belong. He was the person assigned by the Corporation to act as the pilot of the Fortius on the day of the collision. A person so assigned is ‘acting as a pilot’ within the meaning of s 86 when performing that assignment.
Accordingly, I conclude that s 86 gives the Corporation an immunity in relation to any loss or damage that is attributable to the negligence of the Pilot.
Section 109 inconsistencies
The defendant submits that s 86 of the PCWM Act is void pursuant to s 109 of the Constitution to the extent to which it purports to exclude or modify the effect of the TPA. In particular, reliance was placed upon s 74 of the TPA and upon s 45.
Section 74 of the Trade Practices Act can only add obligations to an existing contract between parties. It does not operate to directly prescribe norms of conduct. If, as I have found, there is no such contract, then s 74 has no application and no question of inconsistency (pursuant to s 109 of the Constitution) or exclusion (contrary to s 68 of the TPA) arises.
The defendant also relied upon s 45(2) as invalidating the effect of any immunity conferred by s 86 of the PCWM Act on the Corporation. However, s 85 and s 86 of the PCWM Act form part of the law of New South Wales. They do not owe their existence to any contract, arrangement or understanding between the Corporation and the defendant. In any event, there was simply no evidence as to any anti-competitive effect which flowed from the position of the Corporation as the sole supplier of pilots to perform pilotage services in Port Kembla. The decision of the Full Court in Stirling Harbour Services Pty Ltd v Bunbury Port Authority [2000] FCA 1381 is an illustration of the fact that it cannot simply be assumed that an anti-competitive effect necessarily flows from the position of the Corporation as sole supplier.
Outcome of the defendant’s cross claim
The defendant’s cross claim should be dismissed with costs.
The Corporation’s cross claim
The Corporation instituted a cross claim against the defendant which was abandoned. That cross claim should be dismissed with costs.
Separate issue
On 6 May 2004 I made the following order:
‘Pursuant to Order 29 rule 2 and by consent I order that the questions of first, the loss relating to the cost of the physical repairs to the vessel necessitated by her collision with coal berth number 2 on 15 April 2002, and second, the loss sustained by the defendant in not being able to earn income from the vessel in consequence of the collision, be determined separately and after the determination of all other issues in the trial.’
It follows from the reasons for decision which I have delivered that there is no practical utility in determining the issues referred to in that order, except against the contingency that my decision will be reversed on appeal. I will give the parties an opportunity of considering my reasons for decision before formally pronouncing an order for the dismissal of the cross claim.
The Corporation should bring in short minutes of order to give effect to my decision on the cross claims.
I certify that the preceding six hundred and sixty-eight (668) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hely. Associate:
Dated: 17 September 2004
Counsel for the Plaintiff: A Sullivan QC, G Nell Solicitor for the Plaintiff: Blake Dawson Waldron Counsel for the Defendant: S Rares SC, A Bell Solicitor for the Defendant: Ebsworth & Ebsworth Counsel for the Cross-Defendant: J Sexton SC, G Rich Solicitors for the Cross-Defendant: Thynne & Macartney Date of Hearing: 5, 7,8, 13-16, 19-23, 27-30 April, 3-7,18-21, 28, 31 May, 1-4 June 2004 Date of Judgment: 17 September 2004
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