Spliethoff Transport BV v Leisure Freight and Import Pty Ltd

FEDERAL CIRCUIT COURT OF AUSTRALIA

SPLIETHOFF TRANSPORT BV v LEISURE FREIGHT AND IMPORT PTY LTD

[2013] FCCA 27

Catchwords:
ADMIRALTY – Carriage of goods by sea – carriage of yachts from the United States of America to Australia – where three separate contracts of carriage, two signed on 2 April 2012 and made on around 12 April 2012, and one signed on 23 March and made on 12 April – where no vessels available for shipment until May, for shipment to Fremantle, and August, for shipment to Brisbane – where shipping date confirmed in relation to yacht to be shipped to Fremantle – where respondent unable to provide yacht for loading at confirmed shipment date – whether respondent wrongfully repudiated that contract – deadfreight – whether deadfreight owed – whether deadfreight mitigated in part by replacement of yacht on vessel by another yacht – where contracts of carriage included approximate dates for shipment – where no shipping date agreed for other two yachts – where relationship of a commercial nature – where parties treated contract as binding – whether contracts in fact agreements to agree – whether contracts of carriage void for being too vague, uncertain or meaningless – where respondent purported to cancel both contracts for delay – whether time of the essence – whether time for shipment clause a condition – whether applicant failed to provide shipment within a reasonable time – whether contract affirmed by respondent following the passing of reasonable time – whether applicant again repudiated contract or whether respondent’s cancellation constituted anticipatory breach.

Legislation:
Carriage of Goods By Sea Act 1991 (Cth) s.11

Cases cited:
Total Transport Corp v Amoco Trading Co (The Altus ) [1985] 1 Loyds Rep 423
SA Commercial v North Shipping Co Ltd [1956] 2 Lloyd’s Rep 367
Mardelanto Compania Naviera S.A. v. Bergbau-Handel G.m.b.H. (The Mihalis Angelos) [1971] 1 QB 164
Foley v. Classique Coaches Ltd. (1934) 2 KB 1
Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429
Hillas and Co. Ltd. v Arcos Ltd. (1932) 147 LT 503, [1932] UKHL 2
Neeta (Epping) Pty Limited v Phillips (1974) 131 CLR 286
Louinder v Leis (1982) 149 CLR 509
Laurinda Park Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623
Canning v Temby (1905) 3 CLR 419
Sindel v Georgiou (1984) 55 ALR 1
Bunge Corp v Tradax Export SA [1981] 1 W.L.R. 711
Suisse Atlantique Société d’Armement Maritime SA v NV Rotterdamsche Kolen Centrale [1967] 1 AC 361
Carr v. J. A. Berriman Pty. Ltd (1953) 89 CLR 311

Applicant:

SPLIETHOFF TRANSPORT BV

Respondent:

LEISURE FREIGHT AND IMPORT PTY LTD ACN 142 865 307

File Number:

SYG 1907 of 2012

Judgment of:

Judge Raphael

Hearing date:

27 February 2013

Date of Last Submission:

27 February 2013

Delivered at:

Sydney

Delivered on:

12 April 2013

REPRESENTATION

Counsel for the Applicant:

Mr P Coady

Solicitors for the Applicant:

M+K Lawyers

Counsel for the Respondent:

Mr D H Katter

Solicitors for the Respondent:

McCarthy Durie Lawyers

ORDERS

Respondent pay the Applicant the sum of $27,500.00.
The Respondent pay the Applicant the sum of $1,602.54 interest.
Otherwise application dismissed.
No order as to costs.
Order 4 be stayed for a period of seven days.

FEDERAL CIRCUIT
COURT OF AUSTRALIA
AT SYDNEY

SYG 1907 of 2012

SPLIETHOFF TRANSPORT BV

Applicant

And

LEISURE FREIGHT AND IMPORT PTY LTD
ACN 142 865 307

Respondent

REASONS FOR JUDGMENT

These proceedings were commenced in the Admiralty jurisdiction of this court on 4 September 2012. The applicant Spliethoff Transport BV[1] is described in the Statement of Claim as a carrier of goods by sea. It is a company incorporated in the Netherlands. The applicant operates in Australia through an agent, Sevenstar Yacht Transport Australian Agencies Pty Ltd[2]. Sevenstar specialise in arranging with Spliethoff for the transport of pleasure craft into Australia. The representative of Sevenstar in Australia is Mr Lachlan Taylor. The respondent is a company which specialised in facilitating the importation of pleasure craft into Australia for private customers. Its principal is Ms E B Lyons. Between 1 March 2011 and 1 March 2012 Sevenstar had arranged for the importation of sixteen pleasure craft or trailers for Leisure Freight. The port of loading for all of these shipments, bar one, was Palm Beach Florida. The destination or port of unloading was either Newcastle, Brisbane or Fremantle.
[1] “Spliethoff”
[2] “Sevenstar”
Mr Taylor describes the way in which contracts of carriage are entered into in his affidavit of 13 November 2012 as follows:
“3.     The general way we do business is as follows:
a.We market international yacht carriage services typically in trade magazines and at yacht shows. We then receive enquiries from people and companies who may need to move yachts, usually from outside Australia, to places in Australia. Sometimes the enquiry comes from intermediaries who represent yacht owners or brokers. I believe that the Respondent is such an intermediary.
b.We provide details about rates and indicative schedules. We cannot be firm about sailing dates due to the number of variables which affect vessel schedules such as weather and other cargo.
c.I will liaise with our head-office in Amsterdam before committing to rates and indicative schedules.
d.If the customer is satisfied with the quotes I provide, we may then enter into a formal contract for the carriage of the nominated yacht.
e.We then issue emails/reports to customers with bookings indicating vessel sailings. One such email is dated 22 March 2012 at page 1 of the annexed Bundle.”
The email to which he refers is in the following form:
“From: [email protected]
To:     Recipients
Sent: Friday, 27 April 2012 12:09PM
FW: Expected nomination MV Industrial “TBC” Florida to WC Australia
Important: High

Good afternoon all,
Please note that our owners have tentatively nominated the following vessel for the loading of yachts from the USA bound Newcastle, Brisbane and Fremantle.
MV Dynamogracht or Sub.
Planned rotation at the moment with approx. dates are:
West Palm Beach, FL     25 April
Newcastle, AU            21 May
Brisbane, AU              25 May
Fremantle, AU            2 June
For those booked on this sailing – we will be sending out further details once we go get closer in regards to the loading operations etc.
Otherwise for anyone that is interested in making a booking for this sailing – Please let us know soonest so we can ensure we have the correct equipment in place and space for your yacht.
Any questions in regards to the above, please don’t hesitate to contact us.
Kind regards
Lachlan Taylor”
There are similar emails in the tendered documents.
Mr Taylor’s evidence is that the departure and arrival dates contained in these circular emails are not firm dates because ships that are moving around the world are prey to all of the vicissitudes of ocean travel such as storms, mechanical failure, berth availability and strikes to name but few. It would seem that it was also the practice of a carrier to substitute other vessels for the nominated vessel.
The respondent entered into three contracts for the shipping of three separate vessels. The first was for a yacht known as No Hurry, a 36ft Albin Trawler. That contract was dated 20 February by Sevenstar and 2 April by the respondent. The second contract was for the shipping of a 42ft Silverton convertible yacht known as “Almost Paradise” dated 15 March 2012 by the applicant and signed by the respondent on 2 April 2012. The third contract also dated 15 March 2012 but signed on 23 March 2012 was for a Searay 550 yacht known as Kool Breeze. According to those written contracts the approximate date of shipment of the Albin Trawler No Hurry was:
“March loading. Dates to be mutually agreed.”
For the Silverton Convertible Almost Paradise the approximately date of shipment was said to be:
“Mid April loading. Dates to be mutually agreed.”
And for the Searay 550 Kool Breeze the approximate date of shipment was said to be:
“Mid April loading. Dates to be mutually agreed.”
None of the designated yachts were shipped to Australia by the applicant and as a result the applicant commenced these proceedings claiming that the respondent had wrongfully repudiated the contracts of carriage by purporting to cancel prior to shipment of the Kool Breeze or payment of its freight, first by way of an email from Ms Lyons on 18 June intimating that she may have to cancel the booking and then by way of a letter from the respondent’s solicitors to the applicant dated 27 June 2012. In respect of the yachts “Almost Paradise” and “No Hurry” the cancellation was by a letter dated 1 August. In support of their claim the applicants quoted two clauses from the standard contracts which are relevant to all three vessels. These are Clauses 9(a) and 9(d):
“9) Freight, charges & fines
a)The Freight, whether actually paid or to be paid, shall be considered full earned upon concluding this booking and non-returnable in any event Vessel/Yachts lost or not lost. Freight is payable by Yacht Owner in freely transferable currency to the Agent’s nominated bank account. The Ocean Carrier’s claim for any, detention, duties, taxes, fines, penalties, tolls, expenses, costs and or charges (collectively “Charges”) under this Contract shall be considered definitely payable in like manner as soon as the Charges have been incurred. Dutch legal interest shall be payable from the date when Freight and Charges are due (see Box 12). Failure to pay the full Freight at the due date shall entitled the Ocean Carrier, at any time, to refuse loading the Yacht, however without releasing the Yacht Owner from its obligation to pay the full Freight, Demurrage and any incurred costs, expenses and charges.
d)Cancellation of this Contract any specific time before loading and for any whatsoever reason shall make the Yacht Owner liable for the full Freight and, if applicable, for Demurrage and for any incurred costs, expenses and charges. Any expenses saved by the Ocean Carrier due to such cancellation shall be deducted.
It is best that I deal with the factual situation regarding each of the vessels in turn.

No Hurry

There is an email trail found at pages 3 and 2 of the annexure to the affidavit of Ms Lyons commencing with one on 15 February stating as follows:
“On 15/02/2012, at 18:29, “Leisure Freight & Import Pty Ltd” [email protected] wrote:
New booking for 28 Feb sailing
1980 36 Albin Trawler
36ft long
13ft wide
3.6 m high as is
Weight: 18,000lbs
Aurora quoted them $24,000 using your sail date
Can we do better and this is a booking.
Di”
Mr Taylor responded on 15 February offering to match the price but advising Ms Lyons that he required a signed contract before close of business the next day. On 16 February Mr Taylor emailed Ms Lyons saying:
“From: [email protected]
To: Leisure Freight & Import Pty Ltd [email protected]
Sent: Thursday, 16 February 2012 3:43 PM
Subject: Re: New Quote
How did you go with this guy?
Regards
Lachie”
On 22 February Mr Taylor emailed Ms Lyons as follows:
“From: [email protected]
To: [email protected]
Sent: Wednesday, 22 February 2012 11:46 PM
Subject: Re: Trailers and Albin 36
Hey Di
Got the new list for this March sailing overnight and we’re nearly full.
I have space for the trailers and the Albin, but need the docs back to confirm it before anyone else steals the space out from under us.
Any chance you can get the docs back to me today? Just don’t want you to miss out that’s all.
Brgds,
Lachie”
Mr Taylor wrote again to Ms Lyons on 27 February:
“From: [email protected]
To: [email protected]
Sent: Monday, 27 February 2012 9:51 AM
Subject: Albin & trailer docs..
Hey Di,
Any news on the Albin, Proline and trailers for the MV Suomigracht?

Pleased to hear soonest if you still want to book them in..
Kind regards,
Lachlan Taylor”
The next email is dated 12 April 2012 from Ms Lyons to Ms Taylor:
“From: Leisure Freight & Import Pty Ltd <[email protected]>
Sent: Thursday, 12 April 2012 12:19 AM
To: [email protected]
Re: Outstanding freight – Suomigracht
Attachments: Booking-55-Searay.pdf
Importance: High
Hi Lachlan
Booking attached for the 55 Sea Ray.
What are the dates for the next loading at the moment?
Other 2 bookings to follow. 42 Silverton and 36 Albin.
Di”
I deduce from this chain of emails, that for reasons that have not been explained to me but which seems from the emails to have been due to her inability to contact the yacht owner, Ms Lyons was unable to make a firm contract for the dispatch of the Albin until 12 April. It would seem that she had the contracts, which she described as “bookings” some considerable time before that date, although how close to 20 February I am unable to say. Mr Taylor in his affidavit of 13 November 2012 says that the applicant entered into a contract with regard to the No Hurry on the 2 April which is the date that appears under the signature of Ms Lyons on the document but he also says that he did not receive the signed copy in his office until 12 April 2012. I am of the view that Ms Lyons did not commit to this contract until around 12 April 2012 when she sent the document to Mr Taylor. The No Hurry was within 40 miles of Palm Beach when the contract was concluded.
Although the shipping document had a date for loading in March and there was in fact a vessel that left in March, I am satisfied that there was no concluded agreement between the parties at that time and that there was no obligation on the applicant to have shipped the No Hurry in March. The earliest time upon which the No Hurry could be contractually shipped was about 14 or 15 April, being three days after the contract was concluded and allowing for certain formalities that had to be gone through at the US end that could take up to that time. But Mr Taylor and the applicants had no vessel leaving Palm Beach in April neither did they have one in May to Brisbane. On 6 June Mr Taylor sent an email to his customers under the reference “Sailing Florida/Australia June 2012”. This indicated that the nominated vessel had to be pulled back because of scheduled delays and there was no further time to make a stop in Florida. On 4 July another email was sent:
“From: [email protected]
To: Administrative+20group
Sent: Wednesday, 4 July 2012 12:23 AM
Subject: UPDATE – Delay to sailing from EC USA to Australia
“Dear All
Please see below received from our head office in regards to the delays we’re currently suffering on this next sailing ex EC USA to Australia.
“Further to our update of last week.
At present we are not yet in a position to nominate the performing vessel for the next sailing to Australia. We are still working on loading between 10 and 20 July however.
It seems for the particular vessel we’re trying to nominate, vessel owners are still awaiting confirmation of their own base cargo before they commit to ourselves so this is making things difficult.
The process of nominating tonnage is taking longer than normal this time as the number of base cargoes from the USA to Australia is much lower than normal, causing delays in us nominating tonnage.
Unfortunately all ship owners are suffering this at the moment with the availability of tonnage coming via the USA being very very limited. This is not something that usually happens and in the past, we have had available tonnage without issue.
Please hold your breath a little longer, as always we are working on finding the most urgent suitable solution.”
We are sorry for the inconvenience caused by the current situation and once we have a further update, will pass on to you soonest.””
A similar email was sent by Mr Taylor on 13 July indicating that there was no vessel available for shipping to Australia. On 27 July a vessel was nominated for an August sailing. On 30 July invoices were sent by Mr Taylor to Ms Lyons for transporting on this vessel but the vessel had changed. On 31 July a further email was sent by Mr Taylor updating the sailing dates for the second vessel the BBC Africa which had an expected departure date of 12 August (see Applicant’s bundle of documents page 109), this was later amended to 17 August and then again to 24 August (see Applicant’s bundle of documents pages 141 and 146).
In the meantime Ms Lyons had heard from her maritime insurers that they would not cover the No Hurry for third party liability and they would not zero rate the deductible. Ms Lyons contacted Mr Taylor and asked him to arrange for this insurance through Sevenstar’s nominated insurer Pantaenius. This was done in June 2012 and on the insurance documents it had sailing dates of June 2012 and insurance cover dates between June and July 2012. Ms Lyons gave evidence that she believed that Mr Taylor had given this information to Pantaenius and that it was therefore an indication of when a sailing would take place. Mr Taylor was recalled to the witness box to be cross examined about this and told that he had not provided those dates to Pantaenius. He believed that Pantaenius inserted those dates because the request for the amendment to the policy was made in June and they assumed that the sailing was to be in June. I have no reason to believe that Mr Taylor was anything but a truthful witness and in the light of that evidence and in the absence of any document refuting it I must accept that he did not provide those dates to Pantaenius.
In her affidavit Ms Lyons deposes to some 82 telephone calls from herself to Mr Taylor over the period and a number of return calls. She refers to some 351 emails to Mr Taylor and some 255 emails from him as well as some emails from a Mr Dean Sharpels who she believes is Mr Taylor’s employer and two emails from Mr Clabbers, a director of the applicant. If those emails were meant to show that Ms Lyons was getting very concerned about the failure of the applicants to provide vessels to ship the “No Hurry” or her threatening to terminate the contract or her claiming that time would be of the essence of the contract then they have not been produced. What did happen was that on 1 August 2012 the respondent’s solicitors McCarthy Durie wrote to a Cynthia Hosken Serpa at Sevenstar. The letter is in the following form:
“Dear Ms Serpa
Re: Leisure Freight & Import Pty Ltd – Sevenstar Yacht Transport
Contract
1.We have reviewed the terms and conditions contained in the Contracts together with the circumstances surrounding the proposed transaction. In that regard, we note that:
1.1Item 6 of the Schedule to the Contract nominees an approximate dates of shipment as “Mid April loading. Dates to be mutually agreed” or “March Loading. Dates to be mutually agreed.”
1.2No dates for loading/shipping have been agreed between the parties.
1.3It has been some months since the Contracts were entered into and no action has been taken by Seventstar to arrange the loading/shipping of the vessel.
2.We understand that the carrier was unable to ship on the mid April or March dates and the other times proposed by Sevenstar were not agreed between the parties.
3.Additionally, when a date for shipping was proposed by Sevenstar which was unsuitable to our client.
4.Our client maintains that Sevenstar has:
4.1failed to agree a date of shipment with our client;
4.2failed to ship the Vessels as required pursuant to the terms of the Contractors; and
4.3has not communicated that it is ready willing and able to complete the contractors in accordance with its terms.
5.Consequently, our client claims that Sevenstar has repudiated the Contracts. In reliance of that repudiation, our client hereby terminates the Contracts and reserves its right to make a claim for damages resulting from the termination.
6.Our client has suffered significant loss both financially and in reputation as a result of Sevenstar’s failure to comply with its contractual obligations under the terms of the Contracts.
7.Our client will stringently defend any action taken by Sevenstar in its claim for payment of dead freight for its non-completion of the Contracts.
Conclusion
We await your response.”

In regard to this letter the court accepts those matters referred to in numbered paragraphs 1.1 and 1.2. By the time the letter was written Sevenstar had indicated a proposed loading on the BBC Africa at sometime in mid August. Item 2 is not correct. The court has found that there was no contract for carriage in March and there was no vessel in April. Numbered item 3 is also incorrect because the “Sevenstar” had not nominated any vessels between April and 27 July. The task of the court is to decide whether that letter constituted repudiation of the contract by the respondent or merely acknowledged the applicant’s repudiation.

Almost Paradise

This vessel is a 42ft Silverton Convertible. The contract for carriage bore a date for the ocean carrier of 15 March 2012 that was signed by the respondent on 2 April 2012. It is in the same form as the contract previously discussed. It is the 42ft Silverton referred to in the email of 12 April 2012 sent by Ms Lyons to Mr Taylor previously discussed in which she refers to two other bookings being this vessel and the No Hurry. There is an email from Mr Taylor to Ms Lyons on 11 April 2012 in the following form:
“From: [email protected]
To: Leisure Freight & Import Pty Ltd
Sent: Wednesday, April 11, 2012 5:09PM
Subject: Re: Outstanding freight - Suomigracht
Hey Di all good… Yup we’ll have a look at once the vessel’s in Newcastle for the dunnies…
Just on the other boats for the next sailing - how were you going with those ones?
Brgds
Lachie”
I believe that this email, when considered with the others, add weight to my finding that there was no concluded contract between the parties until Ms Lyons delivered what she called the “booking forms”, actually the contracts, to Mr Taylor. The 42ft Silverton Convertible Almost Paradise was in Palm Beach and available for shipping from the time the contact was made. In the same way it can be found that there were no vessels made available to ship it between the time the contract was made and August 2012. Ms Lyons says in her affidavit:
“In my previous dealings with Mr Taylor and the applicant, the applicant had only “run late” with sailings by a matter of two weeks, not over seven months.”
I do not accept the seven months as correct because that assumes that the contracts were made in February, which I have found they were not. But certainly the vessels were required to wait in Palm Beach for over three months before a suitable ship became available to transport them.
The evidence that I have discussed in relation to the insurance policies with No Hurry applied to Almost Paradise and the contract for carriage of this vessel was cancelled by the applicant through her solicitor’s letter of 1 August so the issues in regard to this yacht are identical to those with regard to No Hurry.

‘Kool Breeze’

Kool Breeze is a Sea Ray 550 Sedan Bridge pleasure craft. The first mention of this vessel appears to be in an email on 14 March 2012 from Ms Lyons to Mr Taylor, the relevant parts of which state:
“From: Leisure Freight & Import Pty Ltd [mailto:[email protected]]
Sent: Wednesday, 14 March 2012 4:25 AM
To: [email protected]
SUBJECT: Insurance and Bookings so far for April 2012
Hi Lachlan
…
Also have some bookings coming through shortly for the mid April sailing that you have already quoted me. Can we please start to work off some of the money I lost on the boat that got separated from it’s trailer in Mexico as well on these bookings?
These deals are currently settling so far:
1996 55 Sea Ray Sedan Bridge Palm Beach to Fremantle
2005 42 Silverton Palm Beach to Newcastle
2005 41 Luhrs Palm Beach to Brisbane
I haven’t been able to contact the guy with the 36 Albin – his mobile is disconnected (?)”
Mr Taylor responded to that email on the same day:
“From: [email protected]
To: Leisure Freight & Import Pty Ltd
Sent: Wednesday, March 14, 2012 9:02AM
Subject: Re: Insurance and Bookings so far for April 2012
Hey Di,
Yup – all good I’ll arrange the insurance accordingly for you.
Did you want me to draw up some docs for the below boats? I’ll have another look at them and knock off what I can to cover some of the costs for the trailer.
For the Corsair trailer trimaran – reckon we can do this one at USD$15,000/swharf/wharf (and then I’ll less a bit for the trailer again)..
strange about the Albin guy..very strange..
Brgds,
Lachie
Ms Lyons asked him to do this. Then on 15 March Mr Taylor wrote again to Ms Lyons quoting prices which in the case of the Kool Breeze was US$63,500.00 from West Palm Beach to Fremantle. Ms Lyons confirmed these figures again on 15 March. Mr Taylor sent her the contracts and insurance forms on 15 March and that is the date which appears in the ocean carrier’s signature part of the contract that was signed by Ms Lyons on behalf of the respondent on 23 March and attached to an email sent to the applicant on 12 April 2012. The contract had as the approximate date of shipment was stated to be “mid April. Dates to be mutually agreed.”
On 27 April 2012 Mr Taylor offered Ms Lyons a shipping date for Kool Breeze of 6-8 May 2012. The email states:
“For those booked on this sailing we will be sending out further details once we get closer in regards to the loading operation etc.”
On 9 May 2012 Mr Taylor wrote to Ms Lyons advising they were loading the Fremantle boats on 18 May and asked whether the Kool Breeze could be ready. On 10 May Ms Lyons replied that the Kool Breeze had broken down in North Carolina with engine problems and asking whether 18 May was the last day for loading. Mr Taylor responded that they could possibly stretch it out until 20 May and suggested a possibility of loading a couple of days earlier in Savannah if that was easier for the skipper to get to. The Kool Breeze did not make the shipping date of 21 May and there were further discussions between Ms Lyons and Mr Taylor regarding picking up the Kool Breeze in South Carolina. These discussions did not materialise. Ms Lyons agreed in response to a question from me that the offers of the 18 and 20 May for shipment were “mutually agreed dates for loading” and that a vessel, the Klipper Angela sailed on 21 May from Palm Beach to Fremantle and could have taken the Kool Breeze with her had she been available in Palm Beach.
The evidence is that there were communications between the parties involving the possible picking up of the Kool Breeze north of Palm Beach and the suggestion of a sailing in June. Ms Lyons agreed that the Kool Breeze could not have reached Palm Beach in June given its mechanical problems. But there was no vessel available to take it to Fremantle in that month and this is why she says she cancelled the contract on 27 June. In an email of 18 June to Mr Taylor Ms Lyons writes:
“From: Leisure Freight & Import Pty Ltd <mailto:[email protected]>
Sent: Monday, 18 June 2012 12:08 PM
To: [email protected]
SUBJECT: 55 Sea Ray
It is on one motor with no bow thrusters.
I may have to cancel this booking with you.
Di”
Whilst these discussions were going on Ms Lyons was attempting to substitute a Catamaran “Leopard 47” for the Kool Breeze so that she would not be responsible for the deadfreight. This was a complicated transaction because the owner of the “Leopard 47” had made other arrangements for its shipping through another company known as “Yacht Path International”[3]. He had paid YPI $36,000.00 for the voyage. The vessel actually needed to go to Brisbane and not Fremantle. Ms Lyons was attempting to arrange for it to be taken to Fremantle for the original $36,000.00 and for her to make arrangements for it to be transported from Fremantle to Brisbane at her expense, the cost of which would be less than the $63,500.00 deadfreight. But at the same time Ms Lyons was writing letters claiming that all responsibility for all the charges in relation to the Leopard 47 were down to the owner Mr Vianello. The catamaran was shipped by the applicants and in a letter accompanying an email dated 4 June 2012 the applicants made two claims against the respondent. The first was for the full amount of deadfreight for the Kool Breeze in the sum of US$63,500.00 and second for US$44,000.00 being the difference between the full cost for transporting the “Leopard 47” and the amount paid by YPI of US$36,000.00. In the event the statement of claim appears to be only in respect of the deadfreight of $63,500.00 for the Kool Breeze. I have looked at the correspondence exhibited to the various affidavits concerning the shipping of the Leopard 47. It seems to me to be very confused. Ms Lyons wanted to use the shipping of the Leopard 47 as a substitute for Kool Breeze but was not prepared and, it would appear, was not able, to take over the importer’s responsibility for it. The owner was adamant that he had a contract with YPI who had promised to deliver his ship to Brisbane for US$36,000.00. He had no interest in paying any more. I have come to the view that there was no concluded contract between the applicant and the respondent for the shipping of the catamaran as principals and no agreement between the applicant and the respondent that the shipment of the catamaran was in substitution for the shipping of the Kool Breeze in respect of which no deadfreight would be charged.
[3] “YPI”
There is a distinction between the parts of Clause 9. The first is to protect the shipper from a yacht owner deducting from the freight charge any loss to the owner as a result of damage or loss of the vessel. The second part is to protect the shipper against late cancellation but appears to be written as a deadfreight type of clause because it allows for a credit against the charge for savings made by the shipper of the yacht. The applicant has admitted of no such deductions and the respondent did not seek to suggest any. The applicant accepted in evidence that she had signed the contracts and understood and that she instructed her solicitors to send the cancellation letters. In this event the applicant would prima facie be entitled to recover the freight.
The respondent refutes this. She says that the contract was uncertain as to the date of shipment and that no precise date or dates for loading or shipping were mutually agreed and says that the applicant did not ship the vessels in accordance with the contracts. The respondent argues that:
“On what appears to be the applicant’s case, it is for the applicant to show in an evidentiary sense that their representative communicated a date to the representative of the respondents; secondly, that the respondent then agreed to that date; thirdly, that on the date or dates as communicated by the applicant as to sailing there was a vessel at that port that was able to sail in accordance with the previous communication of the applicant.”
In regard to the yacht Kool Breeze I am satisfied that all these things happened. A date in May was communicated by Mr Taylor to Ms Lyons. I infer from the fact that Ms Lyons was arranging for the boat to be delivered to West Palm Beach during May that she accepted that date and accepted the slight change to 18 May 2012. She was trying to get the Kool Breeze to West Palm Beach by that date and the yacht would have been loaded if it had reached the port by 18 or 20 May but it did not. That was not the fault of the applicants. I am satisfied from the evidence of Mr Taylor that there was a vessel in port and able to sail in accordance with his previous communication to Ms Lyons on 20 May 2012. That vessel was the Klipper Angela. It sailed from West Palm Beach to Fremantle.
The letter of 27 June 2012 from the respondent’s solicitors about the Kool Breeze was written in response to the claim made by the applicants for deadfreight:
“Mr Lachlan Taylor
Manager – Operations and Marketing
Sevenstar Yacht Transport Australian Agencies Pty Ltd
PO Box 1332
Mascot NSW 1460
Dear Mr Taylor
LEISURE FREIGHT & IMPORT PTY LTD - YACHT TRANSPORT
…
4.From our review of the documents there appears to be 2 issues raised by Sevenstar Yacht Transport B.V.
4.1a demand for our client to pay dead freight for alleged failure to complete the Contract; and
4.2the party liable to pay the costs of shipping of a motor catamaran (Leopard 47) owned by Mr Colin Vianello (Vianello).
5. The two (2) issues will be dealt with separately
Contract
6.We have reviewed the terms and conditions contained in the Contract together with the circumstances surrounding the proposed transaction. In that regard, we note that:
6.1Item 6 of the Schedule to the Contract nominates an approximate date of shipment as “Mid April loading. Dates to be mutually agreed”.
6.2No dates for loading/shipping have been agreed between the parties.
6.3It has been some months since this Contract was entered into and no action has been taken by Sevenstar Yacht Transport B.V. to arrange the loading/shipping of the vessel.
7.We understand that the carrier was unable to ship on the mid April date and the other times proposed by Sevenstar Yacht Transport B.V. were not agreed between the parties.
8.Additionally, when a date for shipping was proposed by Sevenstar Yacht Transport B.V. which was unsuitable to our client, in order to assist you, facilitated the filing of space on the ship by recommending Vianello to your company for the shipping of the Leopard 47.
9. Our client maintains that Sevenstar Yacht Transport B.V. has:
9.1failed to agree a date of shipment with our client;
9.2failed to ship the Vessel as required pursuant to the terms of the Contract; and
9.3has not communicated that it is ready willing and able to complete the Contract in accordance with its terms.
10.Consequently, our client claims that Sevenstar Yacht Transport B.V. has repudiated the Contract. In reliance of that repudiation, our client hereby terminates the Contract and reserves its right to make a claim for damages resulting from the termination.
11.In addition, Sevenstar Yacht Transport B.V. accepted the Leopard 47 in substitution of the Vessel to be shipped under the Contract and thus was not in a position to perform the Contract at that time.
12.Our client has suffered significant loss both financially and in reputation as a result of Sevenstar Yacht Transport B.V. failure to comply with its contractual obligations under the terms of Contract.
13.Our client will stringently defend any action taken by Sevenstar Yacht Transport B.V. in its claim for payment of dead freight for its non-completion of the Contract.”
I have found that a date for shipping was agreed between the parties, that was the date of the shipping proposed by the applicant in May. I do not accept the solicitor’s contentions in 6.3 because in my view the contract had been entered into only in April and Sevenstar did take action to arrange the shipping of the vessel in May. There could have been no agreement about a mid April date because Ms Lyons said in evidence that the vessel was not in Palm Beach at that time. I am of the view that the requirements of the contract specified by the respondent were complied with by the applicant and that the respondent is responsible for payment of the freight of the Kool Breeze.
At the conclusion of submissions in this matter I indicated that I felt that I would be deducting from any charge the sum of $36,000.00 paid in respect of the transport of the Leopard 45. It was asserted by the respondent that this vessel was a substitute for the Kool Breeze. I have found that there was no contractual basis for that assertion but it appears to me that the loading of the catamaran effected a saving to the carrier for which he was obliged to give the respondent credit under the terms of the agreement. The evidence was that the applicant received no more than the $36,000.00 for the voyage. It also appears that it voluntarily returned that amount of money, but that is not something for which the respondent should be responsible. I would therefore deduct $36,000.00 from the freight for the Kool Breeze and in respect of that yacht order that the respondent pay the applicant the sum of $27,500.00 together with interest from 27 June 2012 being the date of the solicitor’s letter.
My findings in this regard are based upon a reading of the actual contract. This part of Clause 9 has much in common with the standard deadfreight clauses in charter parties and the method of claiming damages for loss and the requirement upon the carrier to minimise loss are standard terms; Total Transport Corp v Amoco Trading Co (The Altus ) [1985] 1 Loyds Rep 423. When making reference to the terms of the contract I have particularly noted clause 2(a):
“2(a)The parties to this Contract – the Yacht Owner and the Ocean Carrier – recognize that the carriage of the Yacht is not an ordinary commercial shipment made in the ordinary course of trade. The circumstances, terms and conditions under which the carriage of the Yacht is to be performed reasonably justify this special Contract and the parties agree that no bill of lading shall be issued for the carriage of the Yacht. It is agreed between the Ocean Carrier and the Yacht Owner that the Yacht Owner hereby charters space on desk of the Vessel for the carriage of the Yacht, from the Load Port to the Discharge Port.
2(d)The Vessel shall proceed, upon completion of her prior commitments, to the Load Port, or so near thereto as she may safely get and lie, swell free, always afloat. The Ocean Carrier shall notify the Yacht Owner before arriving at the Load Port, indicating the time and place where the Yacht will be loaded and the Yacht Owner shall timely bring the Yacht to the place indicated for loading (or for taking receipt of) the Yacht, all in accordance with the provisions of this Contract.
4(d)Unless otherwise expressly stated and notwithstanding any pre-shipment or post-shipment as referred to in clause 2(b) or (c) of this Contract, the Yacht Owner shall bring the Yacht alongside the Vessel, as and when required by the Ocean Carrier and within reach of the Vessel’s loading equipment. The Ocean Carrier and Vessel shall be allowed to sail without the Yacht and without cost or penalty if the Yacht is not brought alongside as required and time for loading, in which case, Yacht Owner shall remain liable for the full Freight, Demurrage and any costs, expenses and charges incurred by the Ocean Carrier.”
I am of the view that the cancellation of the contract in June for the shipment of Kool Breeze was due to the inability to transport the yacht to Palm Beach because of its mechanical problems. This was a cancellation anticipated by Clause 9(d) of the contract entitling the applicant to its damages.

No Hurry and Almost Paradise

Three questions arise in relation to the other two yachts Almost Paradise, a Silverton 42 Convertible, and No Hurry, an Albin 36:
a)Did Spliethoff Transport repudiate the contract by its failure to provide a ship for the transport of the two boats?
b)Did Leisure Freight repudiate through its purported cancellation of the contract, by relying on the apparent repudiation of Spliethoff? Or did its notice of cancellation itself constitute anticipatory breach thus allowing Spliethoff to claim for damages?
c)Was the clause as to shipment date so vague, uncertain or meaningless as to render the contract itself void.
As the first two questions are predicated on the validity of the contract, it is worthwhile answering the third question first.

The contractual terms in issue appear in box 6 of the Sevenstar Yacht Transport standard form contract titled “Contract of Ocean Carriage: Version 03.2011” and is headed “Approximate Date of Shipment”. In the case of No Hurry, in this box is written, “March loading. Dates to be mutually agreed”, in the case of Almost Paradise, “Mid April loading. Dates to be mutually agreed”.

The contract resembles a simplified version of the GENCON charter party recommended by the Baltic and International Maritime Charter and BIMCO’s ‘Conlinebooking 2000’ Liner Booking Note.[4] Both of these documents also include a box with a clause for loading which are framed as approximations. In the case of GENCON, box 9 includes the following, “Expected ready to load (abt.)” and in the case of the Liner Booking Note there is a box containing the term “Time for shipment (about)”. Thus the approximate nature of clause 6 of the present Contract of Carriage is not out of the ordinary.
[4] Available at (accessed 12 March 2013).
There are, however, significant points of difference between these documents. In the case of GENCON, there is also a clause containing a cancellation date. This is contained in box 21 which directs attention to clause 9 of the Gencon Charter that states:
“Cancellation Clause:
Should the Vessel not be ready to load (whether in berth or not) on the cancellation date indicated in Box 21, the Charterers shall have the option of cancelling this Charter Party.”
It goes on to state that the owners, should they anticipate that their vessel will not be ready to load, shall notify the charterers and ask if they wish to cancel the charter party, or to agree to a new cancellation date. The charterers are given 48 hours after notice to respond, and if they do not, the cancellation date is extended by 7 days.
No such clause exists in the Liner Booking Note, but both it and the GENCON anticipate the presentation of bills of lading, the issue of which is expressly excluded in the current contract. Arguably the Liner Booking Note is more akin to the Sevenstar contract of carriage. The sample ‘Conlinebooking 2000’ is in nearly identical form to the Sevenstar document. It is also of note that Ms Lyons referred to the contracts as “bookings”.
Apparent in the three forms is an acceptance of general uncertainty as to the loading clause, no doubt this reflects the inherent uncertainties of the shipping industry to which all parties are subject. The law recognises this concern, as highlighted in relation to loading clauses in charterparties by Lord Diplock in Evera SA Commercial v North Shipping Co Ltd [1956] 2 Lloyd’s Rep 367[5]:
“A charterer manifestly wants, if he can get it, a fixed date for the arrival of the ship at the port of loading. He has to make arrangements to bring down the cargo and to have it ready to load when the ship arrives and he wants to know as near as he can what that date is going to be. On the other hand, it is to the interest of the shipowner, if he can have it, to have the date as flexible as possible because of the inevitable delays due to bad weather or other circumstances that there might be in the course of a voyage. He can never be sure that he can arrive at a port on a fixed day. Therefore, in order to accommodate these two views as far as possible it has been the general practice for a long time past to have a clause under which the shipowner, without pledging himself to a fixed day, gives a date in the charter-party of expected readiness, that is the date when he expects that he will be ready to load.”
[5] As cited in Carriage of Goods by Sea , Stephen Girvin, 2^nd ed 2011, p 540.
Such clauses were later found in Mardelanto Compania Naviera S.A. v. Bergbau-Handel G.m.b.H. (The Mihalis Angelos) [1971] 1 QB 164 per Lord Denning to be “conditions” of charterparties, and hence that a charterer was able to rescind if the representation as to expected loading time was made dishonestly. Lord Denning opined on expected ready to load clauses [at 194]:
“It is an assurance by the owner that he honestly expects that the vessel will be ready to load on that date and that his expectation is based on reasonable grounds: see Samuel Sanday & Co. v. Keighley Maxted & Co. (1922) 27 Com.Cas. 296. The clause with that meaning has been held by this court to be a “condition” which, if not fulfilled, entitled the other party to treat himself as discharged: [citation omitted]…It seems to me that, if the owner of a ship or his agent states in a charter that she is “expected ready to load about 1 July, 1965,” he is making a representation as to his own state of mind; that is, of what he himself expects: and, what is more, he puts it in the contract as a term of it, binding himself to its truth. If he or his agent breaks that term by making the statement without any honest belief in its truth or without any reasonable grounds for it, he must take the consequences. It is at lowest a misrepresentation which entitles the other party to rescind: and at highest a breach of contract which goes to the root of the matter. The charterer who is misled by the statement is entitled, on discovering its falsity, to throw up the charter. It may, therefore, properly be described as a “condition.””
In the present case, the date proffered was “March loading. Dates to be agreed”, and Mr Taylor testified that a ship did leave the loading port in March. On this basis it could not with confidence be said that the March approximation was a misrepresentation. However, such a finding is arguably of little assistance where the date proffered in the present contract predates the signature and seal of the company booking the cargo space. In these circumstances the validity of the clause itself must be considered.
The respondent contends in part, that the applicant’s case must fail because clause 6, as an essential term of the contract, constituted a mere agreement to agree, and hence, the contract was invalid. There is no doubt that an agreement to agree does not a contract make : Foley v. Classique Coaches Ltd. (1934) 2 KB 1.[6] And certainly, there is no mechanism within the contract that could be said to contain machinery for the settling of the term “Dates to be mutually agreed”. Though the contract envisages that disputes be decided in the “Court (Rechtbank) at Amsterdam”, it could not be said that there is any mechanism in the contract itself for deciding how a date for shipment is to be decided.[7]
[6] ‘Foley’.
[7] The issue of jurisdiction was not brought into question during the proceedings, however, I am of the opinion that the jurisdiction of this court is not affected by the exclusive jurisdiction clause: see s.11(2)(c)(i) Carriage of Goods By Sea Act 1991 (Cth), assuming that the Act applies to contracts of this nature. That section states: “(2) An agreement (whether made in Australia or elsewhere) has no effect so far as it purports to: … (c) preclude or limit the jurisdiction of a court of the Commonwealth or of a State or Territory in respect of: …(i) a sea carriage document relating to the carriage of goods from any place outside Australia to any place in Australia”.
However, in my opinion, the clause contains more than an agreement to agree, if not on its face then by implication and the conduct of the parties so that the interests of maintaining the bargain between the parties should override the concern about uncertainty in this case. It is perhaps trite to note that contract law has long concerned itself with the sometimes conflicting notions that contractual terms need be certain and the desire to maintain bargains entered into. The seminal Australian case on the issue is that of Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429 in which Barwick CJ opined [at 437]:
“But a contract of which there can be more than one possible meaning or which when construed can produce in its application more than one result is not therefore void for uncertainty. As long as it is capable of a meaning, it will ultimately bear that meaning which the courts, or in an appropriate case, an arbitrator, decides is its proper construction : and the court or arbitrator will decide its application. The question becomes one of construction, of ascertaining the intention of the parties, and of applying it.... In the search for that intention, no narrow or pedantic approach is warranted, particularly in the case of commercial arrangements. Thus will uncertainty of meaning, as distinct from absence of meaning or of intention, be resolved.” [emphasis added]
In this regard it is particularly instructive to note what fell from the landmark case of Hillas and Co. Ltd. v Arcos Ltd. (1932) 147 LT 503, [1932] UKHL 2. That case dealt with a contract for the sale of Russian softwood which, as it happens, included an incomplete clause as to shipment dates as follows, “Buyers to arrange shipping dates and loading instructions according to the readiness of the goods purchased.”[8] although the decision did not turn on the uncertainty in that particular clause.
[8] See [1932] UKHL 2 at p3.
Of direct importance, Lord Tomlin opined on the desire to uphold contractual bargains and the difficulties inherent in this pursuit as follows:
“Commercial documents prepared by business men in connection with dealings in a trade with the workings of which the framers are familiar often by reason of their inartificial forms confront the lawyer with delicate problems.
The governing principles of construction recognised by the law are applicable to every document and yet none would gainsay that the effect of their application is to some extent governed by the nature of the document.
On the one hand the conveyance of real estate presenting an artificial form grown up through the centuries and embodying terms of art whose meanings and effect have long since been determined by the courts, and on the other hand the formless document the product of the minds of men seeking to record a complex trade bargain intended to be carried out both fall to be construed by the same legal principles and the problem for a Court of Construction must always be so to balance matters, that without violation of essential principle the dealings of men may as far as possible be treated as effective and that the law may not incur the reproach of being the destroyer of bargains.
The principles are not in dispute. It is in the application of them to the facts of a particular case that the difficulty arises and the difficulty is of such a kind as often to afford room for much legitimate difference of opinion and to present a problem the solution of which is not as a rule to be found by examining authorities.”[9]
Lord Wright, in turn, opined:
“…it is clear that the parties both intended to make a contract and thought they had done so. Business men often record the most important agreements in crude and summary fashion : modes of expression sufficient and clear tothem in the course of their business may appear to those unfamiliar with the business far from complete or precise. It is accordingly the duty of the Court to construe such documents fairly and broadly, without being too astute or subtle in finding defects, but, on the contrary, the Court should seek to apply the old maxim of English law, " verba ita sunt intelligenda ut res magis valeat quam pereat." That maxim, however, does not mean that the Court is to make a contract for the parties, or to go outside the words they have used, except in so far as there are appropriate implications of law, as for instance, the implication of what is just and reasonable to be ascertained by the Court as matter of machinery where the contractual intention is clear but the contract is silent on some detail. Thus in contracts for future performance over a period, the parties may neither be able nor desire to specify many matters of detail, but leave them to be adjusted in the working out of the contract. Save for the legal implication I have mentioned, such contracts might well be incomplete or uncertain: with that implication in reserve they are neither incomplete nor uncertain. As obvious illustrations I may refer to such matters as prices or times of delivery in contracts for the sale of goods, or times for loading or discharging in a contract of sea carriage. Furthermore, even if the construction of the words used may be difficult, that is not a reason for holding them too ambiguous or uncertain to be enforced, if the fair meaning of the parties can be extracted.”[10] [emphasis added]
[9] ‘Hillas’ (1932) 147 LT 503 at 512, [1932] UKHL 2 at 4.
[10] (1932) 147 LT 503 at 514, [1932] UKHL 2 at 10.
To my mind, the extracts from Hillas suggest that the court may look at the whole contract and the surrounding circumstances when determining a contract’s validity, especially in regards to contracts of a commercial nature. Importantly for present purposes, the decision in Hillas was referred to, but not negated in by Maugham J when opining on agreements to agree in Foley.

If the box had been left entirely blank, there could be no certainty on the face of the document as to when such an agreement would need be reached. But here there was an approximate date and a stipulation that a final date be mutually agreed. Importantly, there is also the presence of a commercial relationship that had existed for a considerable time prior to the signing of the contracts in question. What the above authorities confirm is that where meaning can be given to the term, the court may determine its proper construction in part based on the intention of the parties.
The actions of the parties indicate that they considered themselves to be bound to the terms of the contract. It is clear that the March date was not definitive as to the loading date as the contract was signed and sealed on 2 April 2012. Under cross examination, Ms Lyons attested to the fact that the parties had done business since 2010 and had arranged the shipment of 10 to 15 yachts using similar contracts on roughly the same terms. She agreed that “dates to be agreed” was the usual wording of the term in question. She added, however, that this was the first time that there had been no ships for months on end. It is clear that regardless of the absence of a fixed date for shipping, both parties treated the contracts as having been on foot. Indeed, in their letter of cancellation, relying on an alleged repudiation the respondent’s lawyers relied on clause 6, claiming at [4.1] that Sevenstar had “failed to agree a date of shipment with our client”.
The decision in Hillas also tends to favour the upholding of the contract, especially as clauses for the times for loading are specifically identified as being commonly left to be worked out at a date after the signing of the contract. This is confirmed in the above discussion of GENCON charter parties and Conlinebooking 2000 forms. I believe that in all the circumstances, the contract was not void for being too vague, ambiguous or uncertain. But at what point does the failure to reach agreement as a result of the conduct of either party constitute a breach of the clause? This leads to a consideration of the first and second questions, namely, did Spliethoff repudiate the contract, as Leisure Freight claimed, by not providing a date for shipment until Late July/August, or did Leisure Freight repudiate through its purported cancellation?
In the applicant’s submissions, it is argued that time was not of the essence, and that therefore, in order to terminate the contract for delay, notice was required to be given. The applicant submitted, relying upon the authorities of Neeta (Epping) Pty Limited v Phillips (1974) 131 CLR 286, Louinder v Leis (1982) 149 CLR 509 and Laurinda Park Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623, that where there time is not of the essence “the promisee cannot terminate a contract for delay without first giving notice requiring performance within a specified time” [submissions at 3.14]. With all due respect to the applicant, I do not believe that to be the force of those authorities or, alternatively, that reliance upon them is misplaced. This confusion may have been the result of focussing only upon the question as to whether time was of the essence, and giving scant attention to the situation where it is not. What fell from Laurinda per Brennan J [at 641-643] is illuminating when considered in full:
“A right in one party to rescind a contract will arise when the other party repudiates a contract generally, but it may also arise when the other party repudiates a term of the contract. A right to rescind depends on the importance of the term repudiated. … It was a promise of such importance to the promisee that it would not have entered into the contract unless it had been assured of substantial performance and this ought to have been apparent to the promisor. The criterion of an essential promise which I have stated in terms relevant to the present case is derived from the criterion expressed by Jordan C.J. in Tramways Advertising Pty Ltd. v. Luna Park (N.S.W.) Ltd. (1938) 38 SR (NSW) 632 (at pp 641-642) and frequently adopted in this Court, most recently in Ankar Pty.Ltd. v. National Westminster Finance (Australia) Ltd. [1987] HCA 15; (1987) 162 CLR 549, at p 556, but I have modified it by using the term "substantial performance" rather than the usual formula of "a strict or a substantial performance". The modification is necessary when, no day for performance being stipulated and the subject matter of the promise not being such as to require strictly timeous performance, time is not of the essence of the promise either in law or in equity: Canning v. Temby [1905] HCA 45; (1905) 3 CLR 419, at p 425; Louinder v. Leis, at p 533. When time is not of the essence, the promisee must have been willing to enter into the contract without an assurance that the promise would be performed strictly, albeit with an assurance that the promise would be performed substantially. Thus, Laurinda would not have been entitled either at law or in equity to rescind the contract as soon as a reasonable time for procuring registration had elapsed. As Griffith C.J. said in Canning v. Temby, at p 426:
"In one sense, of course, time is always of the essence of a contract to be performed within a reasonable time. But that is not the sense in which the term 'of the essence' is used."
Where an essential term - in the sense defined - is to be performed within a reasonable time, there being no stipulated day for performance, and that time passes without performance, the innocent party does not acquire a right to rescind unless the defaulting party repudiates or has repudiated his obligation to perform.
…
The difference between a contract which contains a stipulated day for performance of an essential term and a contract which, expressly or impliedly, requires performance within a reasonable time is important when the question is whether, on failure to perform within the time limited by the contract, the innocent party is entitled to rescind. In the former case, a right to rescind arises at law when the stipulated day passes; in the latter, that right does not necessarily arise when the reasonable time expires but only when repudiation is clearly to be inferred from the circumstances in which the delay occurs. Delay will amount to repudiation if the defaulting party "evinces an intention no longer to be bound by the contract ... or shows that he intends to fulfil the contract only in a manner substantially inconsistent with his obligations and not in any other way": Shevill v. Builders Licensing Board [1982] HCA 47; (1982) 149 CLR 620, at pp 625-626; Progressive Mailing House Pty.Ltd. v. Tabali Pty.Ltd. [1985] HCA 14; (1985) 157 CLR 17, at pp 33, 40”
I am of the opinion that the above passage stands for the proposition that where a contractual term which is an essential term has been repudiated, the innocent party is entitled to rely on that repudiation to terminate the contract. I do not believe, as the applicant contends, that Brennan J intended to make notice mandatory. Notice may be required in order to make time of the essence if a party wishes to do so and there is no express term making time of the essence in the contract. However, if the delay is sufficient, and the intention of the parties sufficiently clear, so as to amount to repudiation, termination is available regardless of notice.

Brennan J went on to note that in deciding whether repudiation had occurred, the intention of the parties was paramount. His Honour followed on from the above by instructing as to how the intentions of the parties might be ascertained [at 643-644]:
“If the inference to be drawn from the circumstances is that the defaulting party intends to perform an essential promise after some minor delay, repudiation cannot be inferred; but if the inference is that the defaulting party intends so to delay performance that the promisee will be substantially deprived of the benefit of the promise, repudiation can be inferred. The inference is not lightly drawn: Progressive Mailing House Pty. Ltd. v. Tabali Pty. Ltd..
However, a reservation on the part of the promisor that he may perform the promise if it suits his convenience to do so is not inconsistent with repudiation of the contract or promise. Thus Fullagar J. was able to say in Carr v. J. A. Berriman Pty. Ltd.:
it is correct ... to say ... that a failure to remedy the breach might continue so long and in such circumstances as to evince an intention on the part of the building owner no longer to be bound by the contract. In other words, the only legitimate inference might be that he is saying: "Not only have I broken my contract by not doing the thing on the due day, but I am not going to do the thing at all", or "I am not going to do the thing at all unless and until I find it convenient to do it".
When delay in performance is prolonged, the point at which repudiation might be inferred is necessarily uncertain. The promisor and promisee are likely to regard the circumstances differently. To provide a firm foundation for the inference of repudiation, it is prudent for the promisee to give a notice to complete.”
This is in keeping with the general law of contracts that in cases in which time is not specified, then completion within a reasonable time should be implied, and that the determination of what is a reasonable time requires a consideration of all the circumstances of the case and to the true meaning of the term: as expressed in Canning v Temby (1905) 3 CLR 419 per Griffith CJ at 424. Furthermore, it is clear from the reasoning of Griffith CJ that the failure to give notice of a reasonable time for completion is not fatal. His Honour noted:
“When time was not originally of the essence of the contract, either party desiring to fix a definite time for completion, so as to entitle himself to rescind the contract on failure to complete within the time, was required to give notice to the other party to complete by a named day, which was required to be reasonable, i.e., at not too short an interval. The effect of this notice, however, was not to confer an offensive right or complete a cause of action, but to confer a defensive right in equity as well as at law to take advantage of the other party's default. I do not think, therefore, that the plaintiff's failure to give a notice appointing a day for payment of the purchase money is material to her claim for damages for breach of contract except so far as such a notice, if given and not attended to, would have been an element in considering whether the purchaser had failed to perform his contract within a reasonable time.”
I am of the opinion that the term was an essential term of the contract. That is to say that without it, the parties would not have entered into the contract and that consequently, it was a condition that if breached would constitute repudiation. Such a breach would occur if the shipment did not occur within a reasonable time, regardless as to whether or not notice of a reasonable time were given.
In order to determine whether repudiation occurred it is necessary to first determine the reasonable time that should be implied. Neither of the parties made submissions as to what a reasonable time might be, or indeed, dealt with the concept of a reasonable time. The applicant did put forward an argument that the delay did not constitute breach [at 3.20], and at [3.21] stated:
“Further the circumstances of the delay in this case were not sufficient to constitute repudiation of itself. The circumstance [sic] were not so “gross and protracted as to amount to repudiation” (Sindel v Georgiou (1984) 55 ALR 1 at 8; Laurinda). In coming to such a conclusion this court must take into account the Applicant’s continued attempt to ship, the lack of complaint by the Respondent and [the] non-essential nature of the time component of the agreement between the parties.”
This submission is not entirely helpful. The main issue with the applicant’s contentions as to the time clause is that they rely solely on cases to do with conveyancing. However, contracts for the sale of land are far removed in nature from the mercantile arena of shipping. Indeed, this is apparent from the passage in Sindel v Georgiou (1984) 55 ALR 1 that the applicant relies on, where the High Court per curiam noted [at 8]:
“In some circumstances procrastination may be so gross and protracted as to amount to repudiation (Forsling v Bechely – Crundall [1922] SC (HL) 173, but as Barwick CJ and Jacobs J pointed out in Neeta (Epping) Pty Ltd v Phillips (131 CLR) at p 203, this conclusion may be reached more readily in commercial contracts than in conveyancing contracts.” [emphasis added]
Although I acknowledge that the contract expressly states at Clause 2(a) that it was not “an ordinary commercial shipment made in the ordinary course of trade” [extracted in full at [35] of these reasons]. I am of the opinion that the contract in question is a commercial or mercantile one, and note that it is established in mercantile law that it is implied that time is of the essence when there is a clause containing a set time for loading, or a termination clause with a date for cancellation: see Bunge Corp v Tradax Export SA [1981] 1 W.L.R. 711 at 728-729. The reason that I cannot imply that time was of the essence here is that no specific time was given. It is in this context that a reasonable time must be imported into the contract.
Taking into account the commercial nature of the agreement, a fair reading of the contract and the correspondence between the parties, I believe that a reasonable time for shipment would be within one month of the contract being signed. Several factors point to this finding. Firstly, the contracts each specify a month for shipment, “Mid-April” in the case of Almost Paradise and Kool Breeze and “March” in the case of No Hurry. From the outset this suggests to me that a period of one month was envisaged.
Secondly, I believe that such a time limit was implicit in the pre-contractual negotiations between the parties. When emails were sent by Sevenstar proposing vessels, these all contained approximate loading dates within one month. In relation to the yacht No Hurry, Ms Lyons first sent details of the yacht on 15 February 2012 seeking to make the proposed 28 February – 5 March shipping. Ms Lyons indicated that for this to be possible a signed contract would be needed the next day. On 16 February, Mr Taylor inquired as to whether any progress had been made in relation to the owner of the No Hurry. On 20 February, the contracts for the No Hurry and the Almost Paradise were dated by Sevenstar. This suggests to me that Sevenstar envisaged the contracts would be ready for a possible March sailing. On 22 February Mr Taylor informed Ms Lyons that he had received the “new list for this March sailing” and that they were “nearly full”. Another enquiry was made by Ms Lyons about the No Hurry on 27 February 2012. It is apparent from an email from Ms Lyons on 14 March 2012 that she was unable to contact the owner of the No Hurry.
A 15 March email from Mr Taylor to Ms Lyons [bundle p23] states:
“Please find attached a copy of the docs for these ones..
Appreciate it if you could please complete and send through the docs soonest so I can confirm the space for us..”
It would appear that it was in a reply to this email that Ms Lyons attached a “Confirmed Booking” for the “No Hurry” on 13 April 2012, although the contract was signed on 2 April 2012.
I also believe that in signing the contract on 2 April 2012, the respondent would have been encouraged by the email of 22 March 2012 [Applicant’s bundle pages 6 and 7] indicating that a vessel would sail from Palm Beach on approximately 25 April 2012. That is to say that it was their intention in signing the contract that the yacht would sail within one month. But the evidence before me is that there was in fact no sailing in April.
Finally, there is some evidence that in the parties’ prior dealings shipments occurred within the month. As noted above, Ms Lyons testified that in previous engagements she did not have to wait “months on end” for a vessel. There is also email evidence to suggest that prior bookings were made on the basis of a vessel being available in a month’s time. Attached to Ms Lyons affidavit at page 4 is an email thread which evidences the booking of a Navigator boat in June 2011. In that thread, after receiving a quote, Ms Lyons wrote on 27 May 2011:
“This will be end of June early July I am guessing?”
To which Mr Taylor replied:
“Yup..
We’re aiming for just after Mid June Loading at this stage..
Did you want me to draw up a booking note for you?”
A booking note is then requested by Ms Lyons on 27 May 2011, and signed documents were requested by Mr Taylor on 7 June 2011.
Likewise, there is a thread of emails in relation to the shipment of a Bayliner boat named the “Steve Reilly”, booked in early October, with shipment dates given for late October [Annexure to Ms Lyons’ affidavit at p6].
All of the above considerations suggest to me that in entering into the contracts the parties intended that shipment would occur within a one month time frame. I believe it forms a solid basis for the finding that a one month period would be a suitably reasonable time, in all of the circumstances. I also believe that the previous practice of the parties could, if necessary, allow for an implied term that shipment would be undertaken within a one month period.
Having found a reasonable time for performance of the shipment clause to be of one month and noting that the next offer for the shipment of the both the “No Hurry” and the “Almost Paradise” came on 27 July 2012, four months after the contracts were signed by Leisure Freight, it would, at first, appear evident that the implied reasonable time was not adhered to. However, there are two complicating factors. Firstly, as noted above, it is the applicant’s submission, that it was continually attempting to ship. Secondly, whilst there was a failure to offer an effective date for shipment within one month, that is to say by mid-May if the return of the signed contract on 13 April is taken into account, the right to rescind at that point was not taken, and there is evidence to suggest that Leisure Freight treated the contract as being on foot after that point.
The first contention as to the continuous attempts to ship simply cannot be confirmed from the facts before me. Of the actual offers for shipment made by Sevenstar only three possibly relate to the shipment of the “No Hurry” and “Almost Paradise”. One of these was the MV Dynamogracht which was “tentatively nominated” for shipment on 22 March 2012, with a shipment date of approximately 25 April 2012. However, the tentative nomination occurred prior to the signing of the contract and after this initial offer there is no evidence to suggest that this ship was in fact envisaged to load the boats in question. Indeed, there is no evidence to suggest that this ship ever docked at Palm Beach, and in a log relating to the movement of that ship it is apparent that the ship left Singapore on 15 February 2012, and arrived in Saint Petersburg on 9 May 2012 [see p67 of the annexure to the affidavit of Ms Lyons].
The next possible vessel was the MV Deltagracht, however, this vessel only appears in an email of 6 June 2012 stating that it will no longer be stopping in Palm Beach due to delays [Applicant’s bundle pp59-61]. There is nothing in the evidence before me suggesting that the Deltagracht was offered to Leisure Freight for the shipment of “No Hurry” or “Almost Paradise” and certainly no approximate date of such a proposed shipment.
The next vessel, the BBC Maple Lotta, was offered in an email of 27 July 2012 with approximate shipment dates of 8-20 August [Applicant’s bundle p.102]. The respondent then informed that this ship had been replaced by the MV BBC Africa on 31 July 2012, the day before the respondent purported to terminate the contract.
There is evidence in email correspondence that the applicant’s agent was seeking to arrange a ship throughout July 2012. In an email of 4 July 2012 Mr Taylor forwarded to Ms Lyons an email from Sevenstar’s head office stating:
“At present we are not yet in a position to nominate the performing vessel for the next sailing to Australia. We are still working on loading between 10 and 20 July however.
It seems for the particular vessel we’re trying to nominate, vessel owners are still awaiting confirmation of their own base cargo before they commit to ourselves so this is making things difficult.
The process of nominating tonnage is taking longer than normal this time as the number of base cargoes from the USA to Australia is much lower than normal, causing delays in us nominating tonnage.
Unfortunately all ship owners are suffering this at the moment with the availability of tonnage coming via the USA being very very limited. This is not something that usually happens and in the past, we have had available tonnage without issue.
Please hold your breath a little longer, as always we are working on finding the most urgent suitable solution.”[11]
An email of 13 July 2012 states, “We are trying daily/full time to fix a vessel for Australia” and again notes the lack of paying base cargo going from the United States to Australia.[12]
[11] Annexure to Affidavit of Ms Lyons, p.57.
[12] Annexure to Affidavit of Ms Lyons p. 58.
In summary, the only solid evidence before me that the applicant was seeking to provide a time for the shipment of “No Hurry” and “Almost Paradise” appears in the emails from its agent relating to the delays it was experiencing, sent mid-July 2012, and in the eventual offer of the BBC Maple Lotta at the end of July 2012 for shipment in August.
I believe the second issue can be dealt with rather summarily because whilst the time for compliance within the reasonable time passed, and this constituted repudiation which brought the contract to an end, it was not accepted by the respondent. Indeed, the conduct of the respondent, at least at first, affirmed the contract. The emails between 25 May and 5 June relating to the extra insurance required for the yachts indicate that the respondent was at that time treating the contract as being on foot. This extension of the insurance constituted the affirmation of the contracts. However, if the date of issue of the extended policies, 11 June 2012, is taken as the date of reaffirmation, and the next offer of a vessel came in effect on 31 July, a month and a half later, a second repudiation had occurred. I am therefore of the opinion that the purported cancellation of the contract on 1 August 2012 was valid.
The authorities suggest that in circumstances where one party affirms a contract following breach of a fundamental term, or condition, any later claim for damages may be affected by this course of action: see Suisse Atlantique Société d’Armement Maritime SA v NV Rotterdamsche Kolen Centrale [1967] 1 AC 361, which involved a charterparty and the demurrage clause which had been repeatedly breached throughout the existence of the charterparty. However, as the cross-claim has been abandoned such questions need not be considered in any great depth here.
What is apparent from the above is that I am of the opinion that the further delays after Leisure Freight’s affirmation of the contract in June again constituted repudiation. Indeed, it seems to me that the factual scenario presents itself is far more akin to that described by Fullager J in Carr v Berriman (1953) 89 CLR 311, as cited by Brennan J in Laurinda in the extract at [54] of these reasons, that the applicant was not going to perform its contractual obligation to nominate a vessel unless or until it was convenient to it to do so. It is apparent from the emails sent by Sevenstar that the applicant would only perform the term as to the shipment date when it had sufficient base cargo to make a voyage from the United States to Australia financially viable. I believe that this evinced a clear intention on the part of the applicant that it would only perform its contractual obligation when it suited it. The result being that such performance would be substantially inconsistent with its contractual obligations. Consequently, I am satisfied that Leisure Freight’s purported cancellation was valid.
There may also be force in an argument that Leisure Freight was entitled to terminate on the grounds that the representations made on 27 July 2012 and then on 31 July 2012 as to the availability of a forthcoming vessel were not made honestly. The words of Lord Denning in The Mihalis Angelos [at 194], again come to mind that:
“If [the ship owner] or his agent breaks that [estimated loading] term by making the statement without any honest belief in its truth or without any reasonable grounds for it, he must take the consequences. It is at lowest a misrepresentation which entitles the other party to rescind: and at highest a breach of contract which goes to the root of the matter.”
It is interesting to note that The Mihalis Angelos also stands for the proposition that a purported termination will be valid if there was a valid reason for the termination, even if that was not the reason given. Here, the reason given for termination was delay, and I have found that to be the case, however, it may be that misrepresentation could have equally founded the notice of termination. Ms Lyons testified that by that time she simply didn’t believe that the applicant would supply a vessel. Indeed, evidence was tendered to suggest that on 18 August the BBC Africa was in fact due in Houston and not in Palm Beach, although the estimated date for arrival of the BBC Africa was given on 31 July as 12 August 2012. That the estimated arrival was revised to 17 August on 8 August 2012, and then revised again to 24 August only on 23 August, appears to me to be irrelevant given that the purported cancellation occurred on 1 August 2012. But it does indicate that the respondent’s feelings about the applicant’s ability to provide shipment were correct.
I have found that the contract was repudiated by the applicant’s delay as at the end of July 2012 and that, in consequence, the respondent did not repudiate the contract through its purported cancellation of the contracts as the applicant alleged. The termination of the contracts in respect of the shipment of the “No Hurry” and of the “Almost Paradise” were, to the contrary, valid.

Costs

The applicant commenced these proceedings seeking damages for breach of contract in respect of the freight of three yachts. I have found in its favour in respect of the freight of one yacht, albeit at a considerably lesser sum than that claimed. I have found that the respondent’s rescission of the contract in respect of the other two yachts was valid and that therefore no freightage is payable. I believe that these findings should be reflected in the award of costs. However, it seems to me that the way in which the case was argued by the parties would make it difficult for a taxing officer to distinguish between the work done in respect of each vessel. I am of the view that subject only to there being an argument raised as a result of calderbank letters being sent or other matters which would bring the question of costs within Order 23 of the Federal Court Rules, for which purpose I will stay my orders for seven days, that the most appropriate order in this case is that each side should pay its own costs.

I certify that the preceding seventy-nine (79) paragraphs are a true copy of the reasons for judgment of Judge Raphael

Date: 15 April 2013

[2013] FCCA 27

12 April 2013

Key Legal Topics

Areas of Law

Commercial Law

Civil Procedure

Legal Concepts

Jurisdiction

Abuse of Process

Stay of Proceedings

Res Judicata