STX Pan Ocean Co Ltd v Bowen Basin Coal Group Pty Ltd (No 2) - [2010] FCA 1240

FEDERAL COURT OF AUSTRALIA
STX Pan Ocean Co Ltd v Bowen Basin Coal Group Pty Ltd (No 2)
[2010] FCA 1240

Citation: STX Pan Ocean Co Ltd v Bowen Basin Coal Group Pty Ltd (No 2) [2010] FCA 1240

Parties: STX PAN OCEAN CO LTD v BOWEN BASIN COAL GROUP PTY LTD (ACN 141 187 760), DAVID JOHN THOMSON and BEACH BUILDING AND CIVIL GROUP PTY LTD (ACN 081 893 414)

File number: NSD 561 of 2010

Judge: RARES J

Date of judgment: 12 November 2010

Catchwords:
ADMIRALTY – contract of affreightment – voyage charterparty – payment of freight and load port demurrage due within five banking days after signing and release of bills of lading – time when charterer defaults

CONTRACT – TRADE AND COMMERCE – whether representations made by conduct of entry into contract – whether by entering into or signing contract party represents it is and will be ready, willing and able to perform all obligations at time performance is and after it becomes due – where standard-form contract, such as charterparty, not contain such term – use in contract in international trade and commerce – obligation to be ready, willing and able to perform – actual breach established by default in performance – anticipatory breach only established if party actually could not perform at all

TRADE PRACTICES – misleading and deceptive conduct – admiralty and shipping – charterparty –whether officer of charterer made personally, or at all, representation that charterer ready, willing and able to perform both at time of contract and when performance would be due in future – representation not an express or implied term of contract – whether representation made by conduct of negotiating for and signing contract – allegation that party unable ever to perform, or not ready, willing and able to perform, its obligations as and when they fell due at the time of entry into charterparty – allegation must be proved in fact not supposition – Trade Practices Act 1974 (Cth) ss 75B, 52, 82

TRADE PRACTICES – misleading and deceptive conduct – damages – false representations as to charterer’s ability to pay hire under voyage charterparty after default in payment – shipowner induced to keep charterparty on foot – measure of damage

DAMAGES – misrepresentation as to readiness, willingness and ability to perform – shipowner induced to enter into charterparty or keep it on foot after default – distinction between damages in tort and contract – measure of damages under s 82 of the Act – whether damages in tort for loss opportunity to earn freight, demurrage and other entitlements assessed at the rates agreed to under charterparty – demurrage and other rates in charterparty not appropriate guide of a vessel’s earning capacity in market – no evidence of market or alternative charter rates

Words and Phrases: “ready, willing and able” – “within five (5) banking days”

Legislation:
Evidence Act 1995 (Cth) s 140(2)

Trade Practices Act 1974 (Cth) ss 75B, 52 and 82

Cases cited:
Admiralty Commissioners v S.S. Valeria [1922] 2 AC 242 followed
Afovos Shipping Co SA v Romano Pagnan & Pietro Pagnan [1983] 1 WLR 195 applied
Australian Woollen Mills Pty Ltd v The Commonwealth (1954) 92 CLR 424 applied
Briginshaw v Briginshaw (1938) 60 CLR 336 applied
Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 applied
China National Foreign Trade Corporation v Eviogia Shipping Co SA of Panama (The Mihalios Xilas) [1979] 1 WLR 1018 applied
Commercial Banking Company of Sydney Ltd v R H Brown & Co (1972) 126 CLR 337 applied
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission (2007) 162 FCR 466 applied
Compania Naviera General SA v Keramet al Ltd (“The Lorna”) 1 [1983] 1 Lloyd’s Rep 373 applied
Dias Compania Naviera SA v Louis Drefyus Corporation (“The Dias”) [1978] 1 referred to

Ermogenous v Greek Orthodox Community (2002) 209 CLR 95 Admiralty Commissioners v S.S. Valeria [1922] 2 AC 242 applied

Foran v Wight (1989) 168 CLR 385 referred to
Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 applied
Gould v Vaggelas (1984) 157 CLR 215 applied
Hamilton v Whitehead (1988) 166 CLR 121 cited
Houghton v Arms (2006) 225 CLR 553 applied
Jones v Dunkel (1959) 101 CLR 298 applied
Mardorf Peach & Co Ltd v Attica Sea Carriers Corporation of Liberia [1977] AC 850 referred to
Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 270 ALR 204 applied
Morton v Hampson [1962] VR 364 referred to
Peter Turnbull& Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd (1953) 90 CLR 235 distinguished
Scandinavian Trading Tanker Co AB v Flota Petrolera Ecuatoriana (The “Scaptrade”) [1983] 2 AC 694 followed
SIB International SRL v Metalgesellschaft Corporation (The “Noel Bay”) [1989] 1 Lloyd’s Rep 361 referred to
Stanton v Richardson (1872) LR 7 CP 421 referred to
Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245 applied
Thomas v Lambert (1835) 3 Ad & El 61 applied
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 distinguished
Union of India v Compania Naviera Aeolus SA [1964] AC 868 referred to
Universal Cargo Carriers Corporation v Citati [1957] 2 QB 401 applied
Yorke v Lucas (1985) 158 CLR 661 applied

Date of hearing: 1 July, 6 July, 13 October 2010

Place: Sydney

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 109

Counsel for the Plaintiff: P E King

Solicitor for the Plaintiff: Hicksons

Counsel for the Defendants: A Morris QC and G Carolan

Solicitor for the Defendants: Worcester & Co

IN THE FEDERAL COURT OF AUSTRALIA

IN ADMIRALTY

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 561 of 2010

BETWEEN:
STX PAN OCEAN CO LTD
Plaintiff

AND:
BOWEN BASIN COAL GROUP PTY LTD (ACN 141 187 760)
First Defendant

DAVID JOHN THOMSON
Second Defendant

BEACH BUILDING AND CIVIL GROUP PTY LTD
(ACN 081 893 414)
Third Defendant

JUDGE:

RARES J

DATE OF ORDER:

12 NOVEMBER 2010

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.The parties bring in short minutes of orders as to the sum of damages and interest for which judgment should be entered in respect of the period 6 to 17 May 2010 consistent with these reasons for judgment on or before 16 November 2010.
2.The parties exchange any submissions as to costs on or before 23 November 2010 and any submissions in reply by 25 November 2010.
3.The matter be relisted on 26 November 2010 for further hearing.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA

IN ADMIRALTY

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 561 of 2010

BETWEEN:
STX PAN OCEAN CO LTD
Plaintiff

AND:
BOWEN BASIN COAL GROUP PTY LTD (ACN 141 187 760)
First Defendant

DAVID JOHN THOMSON
Second Defendant

BEACH BUILDING AND CIVIL GROUP PTY LTD
(ACN 081 893 414)
Third Defendant

JUDGE:

RARES J

DATE:

12 NOVEMBER 2010

PLACE:

SYDNEY

REASONS FOR JUDGMENT

STX Pan Ocean Co Ltd, the plaintiff, entered into a contract of affreightment on the Americanized Welsh Coal Charter (AMWELSH 93) form of charterparty on 12 March 2010 with Bowen Basin Coal Group Pty Ltd, the first defendant, for two voyage charters of vessels to be nominated. I will refer to this as “the charterparty” in these reasons. The voyage charters were for the carriage of cargoes, each of 42,000 tonnes of coal, 10% more or less, from Kwinana, Western Australia, to ports in the People’s Republic of China.
The sole shareholder and director of Bowen Basin was David Thomson, the second defendant. Bowen Basin made a significant commercial loss on the sale of the first cargo and defaulted in payment of hire and demurrage to STX. On 17 May 2010, after the second vessel had been at Kwinana ready to load for about one month, STX terminated the charterparty.
I entered judgment against Bowen Basin for USD2,483,296.25 on the first day of the trial on 1 July 2010. STX proceeded against Mr Thomson seeking to make him liable directly, and also as an accessory to the conduct of Bowen Basin, under ss 75B, 52 and 82 of the Trade Practices Act 1974 (Cth) because he allegedly had made representations:
(1) “expressly or impliedly by entry into the negotiations for the charterparty and the execution thereof on or about 12 March 2010 that it is ready, willing and able to perform the charterparty by providing the cargos under the charterparty and will pay the freight and demurrage according to its terms and is able to do so and intends to do so as and when performance fell due” (the ready, willing and able representation);
(2) fraudulently, in April and May 2010, that Bowen Basin was ready, willing and able to perform its obligations under the charterparty (the post contractual representation), in order to induce STX to continue its tender of performance and not to exercise its then accrued rights to terminate for Bowen Basin’s breaches.
STX claimed that by making the ready, willing and able representation, Bowen Basin had engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of s 52(1) of the Trade Practices Act 1974. In addition, STX relied on the rebuttable presumption in s 51A of the Act that, because this representation was made with respect to future matters, the representation should be taken to be misleading unless Bowen Basin had reasonable grounds for making it. The relevant provisions are:
“51A Interpretation
(1)For the purposes of this Division, where a corporation makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act) and the corporation does not have reasonable grounds for making the representation, the representation shall be taken to be misleading.
(2)For the purposes of the application of subsection (1) in relation to a proceeding concerning a representation made by a corporation with respect to any future matter, the corporation shall, unless it adduces evidence to the contrary, be deemed not to have had reasonable grounds for making the representation.
(3)Subsection (1) shall be deemed not to limit by implication the meaning of a reference in this Division to a misleading representation, a representation that is misleading in a material particular or conduct that is misleading or is likely or liable to mislead.
52 Misleading or deceptive conduct
(1)A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.”
ISSUES
The critical issues are whether:
(1) the ready, willing and able representation was made (Mr Thomson accepted in his written submissions that if it were, it would have been false to his knowledge);
(2)the post contractual representation was made;
(3)Mr Thomson was legally responsible for either of the representations;
(4)STX suffered any loss or damage.
THE BACKGROUND AND NEGOTIATIONS FOR THE CHARTERPARTY
STX is a well known international shipowner and charterer. Its head office was in the Republic of South Korea, where its charterparty manager, Jung-Hyun Ahn was based. STX’s Australian representative Il-Hwan Kang was based in Melbourne.
Bowen Basin was incorporated on 18 December 2009. Mr Thomson included it on web pages for the Beach Building and Civil Group Pty Ltd that he caused to be posted on the internet. One of the web pages stated that Bowen Basin “is an Australian company involved in the trading and export of Australian coal supply worldwide. We are a dynamic and global trading company …”. Another web page described Mr Thomson as the group’s founder and managing director who was very much a part of its day to day operations. Another of the Beach Building group’s web pages included information about a related company described as “BBCG Shipping”. That was said to be an international shipping company specialising in the transport of dry bulk cargoes. This web page referred to various types of cargoes carried on “our Panamax … [and] our Handymax dry bulk carriers” as well as Handysize vessels.
During February 2010, Mr Thomson caused Bowen Basin to enter into an agreement with The Griffin Coal Mining Company Pty Ltd (Administrators Appointed) for the purchase of two cargoes of approximately 42,000 tonnes of coal. Originally the cargoes were to be shipped between 1 and 30 March 2010. The price was USD55.00 per tonne FOB load port.
STX negotiated the terms of the charterparty through Anderson da Silva of Sea Corporation Pty Ltd (Sea Corp), a shipbroker based in Perth. But, there is little evidence of what was said in the negotiations for the charterparty. Mr Ahn looked at the web pages of the Beach Building group before he reported to his superiors about whether STX should enter into the charterparty. He saw the prominent role that these pages assigned to Mr Thomson and passed this information on to his superiors. The web pages conveyed to Mr Ahn, as they were calculated to do, that Bowen Basin was a member of a substantial, financially successful group of companies established in 1998 that was involved in a range of activities, including international sales of coal and its transportation by sea.
Mr Ahn also made enquiries about Bowen Basin’s credit worthiness through an organisation called Infospectrum and from his own reading of the Beach Building group web pages. There was no direct evidence of what Infospectrum had reported to Mr Ahn, but I infer that it did not reflect adversely on Bowen Basin’s capacity to perform its obligations in a transaction such as the proposed charterparty. Mr Ahn’s other enquiries had not yielded any further information about Bowen Basin’s financial status. Mr da Silva said, and I accept, that if he had had reason to believe that Bowen Basin would not be able to provide the two cargoes and pay the full freight and demurrage contemplated in the proposed charterparty, he and Sea Corp would have recommended to STX that it not proceed with the fixture.
Mr Ahn recommended to his superiors that they approve the entry of STX into the charterparty. He had done so relying on the results of his enquiries, including the web pages. Mr Ahn said, and I accept, that STX would not have entered into the charterparty had he recommended against it contracting with Bowen Basin. This proposed transaction was within Mr Ahn’s ordinary duties as charterparty manager within a large and experienced international shipowner and charterer. There was no evidence of the thought processes of Mr Ahn’s superiors who actually made the decision.
THE CHARTERPARTY
The charterparty was entered into in Perth on 12 March 2010. It was subsequently amended by addendum No 1. Mr Thomson signed both documents under Bowen Basin’s common seal. The charterparty bore Griffin Coal’s logo and a notation that it had been adapted for use by that company. The charterparty as amended by addendum No 1 provided that:
·STX was to nominate each of two vessels 7 days prior to her estimated time of arrival to load cargoes of 42,000 tonnes 10% more or less at Kwinana (cl 1, 33);
·freight would be payable at USD27.25 per metric tonne for discharge at Huangpu and Hanjiang and USD30.25 for discharge at Rizhao (cl 1);
·freight and load port demurrage for each voyage had to be paid in full to STX’s nominated bank account within five banking days after signing and releasing the bills of lading (cl 2);
·demurrage of USD27,000 per day was payable at both the ports of loading and discharge (cl 10);
·lay time for the first shipment was not to commence before 26 March 2010 and Bowen Basin could cancel the charterparty if no notice of readiness had been tendered before 24:00 on 7 April 2010. Lay time for the second shipment was not to commence before 7 April 2010 and Bowen Basin could cancel if a notice of readiness had not been tendered before 24:00 on 17 April 2010 (cl 5).
In Dias Compania Naviera SA v Louis Drefyus Corporation (“The Dias”) [1978] 1 Lloyds Rep 325 at 327 Lord Diplock adopted Lord Guest’s explanation of the concepts of lay time and demurrage under voyage charterparties (see: Union of India v Compania Naviera Aeolus SA [1964] AC 868 at 899). Lay time is the time which the parties to a charterparty stipulate for loading or discharge of the cargo, and, if that time is exceeded, the charterer is in breach. Demurrage is the agreed damages to be paid for delay if the ship is delayed in loading or discharging beyond the agreed period.
Significantly, once Bowen Basin had entered into the charterparty on 12 March 2010, it had agreed to incur costs of USD82.25 per tonne (USD55.00 to buy the coal and USD27.25 for freight), exclusive of any demurrage or other costs which might become due to STX. However, at that time Bowen Basin had not entered into any contract for sale of coal from either cargo. It had no other assets. There was no evidence that it had in place any finance or other source of funds, apart from the potential sales of the cargoes, to meet its liabilities under the Griffin Coal contract or the charterparty.
STX ARRANGES THE “YONG AN 2” AND “IZOLA” CHARTERPARTIES
Because STX did not have two ships available in its fleet to fulfil its obligations under the charterparty, it arranged two time charters on the 1946 New York Produce Exchange form. First, on 12 March 2010, STX fixed Yong An 2 on time charter. Hire was payable at the daily rate of USD24,000. Time under that charterparty commenced on 24 March 2010. Secondly, on 2 April 2010, STX fixed Izola on time charter. Hire under that charter was payable at the daily rate of USD19,500. I will return to what happened under the charters for Yong An 2 and Izola later in these reasons.
STX promptly nominated Yong An 2 on 12 March 2010 to perform the first voyage from Kwinana under the charterparty with Bowen Basin. Addendum No 1 changed the port of discharge for the first voyage to Shanghai and made demurrage for the load port payable at the same time as the freight (under cl 8).
THE EVENTS OF LATE MARCH AND EARLY APRIL 2010
As I have explained above, when Mr Thomson committed Bowen Basin to the charterparty on 12 March 2010, he had caused it to assume significant liabilities to Griffin Coal and STX. If Bowen Basin were to make a profit on the sale or sales, it had to find a purchaser or purchasers in China willing to pay at least USD82.25 per tonne at the port of discharge for about 84,000 tonnes of coal.
By 23 March 2010, Bowen Basin had informed STX that it wished to cancel the second shipment. On 29 March 2010 STX rejected Bowen Basin’s purported cancellation of the second shipment. In addition, Griffin Coal was then experiencing difficulty in receiving payment from Bowen Basin so that the first cargo could be made available for loading and was communicating with Sea Corp and STX about the second cargo.
On 1 April 2010, STX and Bowen Basin agreed that STX would nominate a second ship in due course to arrive in the new lay/can (layday/cancellation) period between 10 and 24 April 2010. The next day, after fixing her charter, STX nominated Izola to perform the second voyage for Bowen Basin. She began sailing in ballast to Kwinana.
Notice of readiness for Yong An 2 was tendered at Kwinana on 3 April 2010. Yong An 2 did not commence loading then because Bowen Basin had still not made satisfactory payment arrangements with Griffin Coal. Yong An 2 remained ready to load at Kwinana. Eventually, Mr Thomson sent an email to Mr da Silva on 12 April 2010 in which he said that Bowen Basin was “putting final matters in place”. He predicted that once Griffin Coal had the “final paper work” the next day, approval for loading would be given and continued:
“We have the matter in hand and are aware of all the costs involved, please make all aware of this aspect and I look forward to a successful outcome.” (emphasis added)

Bowen Basin’s problems in paying Griffin Coal were resolved on 13 April 2010. Yong An 2 commenced loading early on 14 April 2010 and she completed loading on Sunday, 18 April 2010. A clean on board bill of lading for a cargo of 42,755 tonnes of coal was signed on that day by Sea Corp on behalf of the master. Bowen Basin was named as shipper, the bill was made out to order and claused “freight payable as per charterparty dated 12 March 2010”.
THE SALE CONTRACT TO LOYAL STRATEGIC
In the meantime, on 16 April 2010, Bowen Basin, through Mr Thomson, executed a contract to sell to a Hong Kong company, Loyal Strategic Investment Ltd, two cargoes, each of 42,000 tonnes 10% more or less of steaming coal. The price was USD67.00 per tonne CNF (cash and freight) for delivery in Shanghai or at a port or ports in Zhejiang province.
The price of USD67.00 CNF in the contract with the Loyal Strategic appeared to have been well below what an advisor of Bowen Basin, Andrew Fogg, had emailed Mr Thomson late in the evening of 13 April 2010. Mr Fogg said that his information was that the current CIF (cash, insurance, freight) price for the grade of coal supplied under contract with Griffin Coal, was USD75.00 to USD77.00 per tonne. There is no evidence whether this was, in fact, the then market price or what, if any, difference there was for prices of coal shipped CNF or CIF.
The commercial result for Bowen Basin was a significant loss on the Yong An 2 cargo of at least USD15.25 per tonne or about USD650,000, before any additional charges, such as demurrage. Moreover, as Bowen Basin and Mr Thomson were both then aware, the second cargo had been sold on the same terms and would have to be carried on Izola at the same rate of freight. Izola tendered notice of readiness to load at Kwinana, also on 16 April 2010. Thus, by 16 April 2010, Mr Thomson knew that Bowen Basin’s loss for the two cargoes would be well in excess of USD1.3 million, given the significant demurrage that had already been incurred while the Yong An 2 waited at Kwinana.
On 19 April 2010, Izola went on demurrage at Kwinana. On the same day, STX sent a statement of account to Bowen Basin for USD1,593,507.50 comprising the freight payable for the Yong An 2 shipment of USD1,293,338.75 and load port (i.e. Kwinana) demurrage for her of USD300,168.75. Both freight and load port demurrage were payable within five banking days after the signing and release of the bills of lading.
Bowen Basin invoiced Loyal Strategic on 22 April 2010 for USD2,903,918.60 in respect of the Yong An 2 cargo. The bill of lading for that cargo was released on Wednesday 28 April 2010. Thus, the freight and load port demurrage had to be paid to STX by Bowen Basin within five banking days. As I will explain below, that payment had to be made not later than 5 May 2010.
On 30 April 2010 Loyal Strategic emailed Bowen Basin (with Mr Thomson receiving a copy). Loyal Strategic stated that it would return “the signed and sealed” letter of indemnity to Bowen Basin so that the latter could then provide it to STX to obtain release of the Yong An 2 cargo if the original bill of lading were not presented. Loyal Strategic informed Bowen Basin that its bank would be remitting the purchase price and enquired when Bowen Basin would be paying STX. Some time later, on 17 May 2010, Mr da Silva received a copy of the letter of indemnity from STX. The letter of indemnity was dated 30 April 2010. It was addressed to STX and requested it to discharge the coal cargo at Shanghai without production of the bill of lading on Bowen Basin’s promise to pay STX the freight due. The letter of indemnity was executed by Mr Thomson under Bowen Basin’s seal and, purportedly by Mr da Silva under Sea Corp’s stamp. I accept Mr da Silva’s evidence that neither he nor Sea Corp executed this document.
BOWEN BASIN DEFAULTS IN PAYING FREIGHT AND DEMURRAGE
On Tuesday, 4 May 2010, Bowen Basin paid USD500,000 (less bank charges) to STX in part payment of the freight for Yong An 2. That was the only payment that STX received from Bowen Basin. Later on 4 May, Rodney Brewer of Bowen Basin emailed STX (copying Mr Thomson) asserting that it had remitted the balance of the freight “… today and it is tied to the Bank of China remitting such”. Bank of China was Bowen Basin’s bank.
On 5 May at 8.54 am Mr Thomson emailed Mr Kang espousing a hope that everything would be “sorted” by 2.00 pm and that: “We were let down by a major financial backer and it has taken time to get sorted”. On 13:15 that day Mr Thomson emailed Mr Kang stating that Bowen Basin’s main finance from the United States of America had not proceeded when payment had been due on the previous Friday (30 April).
Also on 5 May 2010 Yong An 2 tendered notice of readiness to discharge at Shanghai. She remained there at anchor until 1 June 2010 when she berthed and discharging commenced.
After 5 May 2010, Bowen Basin was in breach of its obligation to pay the balance of freight and load port demurrage due of USD1,093,507.50. It faced multiple problems including this breach of the charterparty, its inability to procure discharge of the Yong An 2 cargo, and loading of Izola which had been waiting at Kwinana for nearly three weeks.
THE POST CONTRACTUAL REPRESENTATIONS
On 6 May at 11.25 am, Mr Thomson emailed Mr da Silva informing him that Bowen Basin was meeting with banks at 2 pm to have all finance finalised so as to enable payment of the outstanding moneys and Izola to begin loading. Later on that day STX gave notice to Bowen Basin that it was exercising its lien over the cargo on Yong An 2 for the unpaid freight and demurrage.
On 6 May 2010 Mr Kang also flew from Melbourne to the Gold Coast in Queensland to discuss Bowen Basin’s defaults. Mr Kang met Mr Thomson and another person associated with Bowen Basin, Bruce Jenkins. Neither Mr Thomson nor Mr Jenkins gave evidence. I accept Mr Kang’s evidence. At dinner that night Mr Thomson told Mr Kang unequivocally that payment would be made the next day (7 May). Mr Jenkins said that their attempts to arrange funding were almost finalised and that the money would be remitted to STX’s account the next day. Mr Thomson told Mr Kang that he was very rich and had personal assets of $25 million. He said that he had established the Beach Building group 10 years before and that it had an annual turnover of more than $30 million. Mr Thomson said that he was a very successful property developer and owned five houses on the Gold Coast and in Mackay. He asserted to Mr Kang that he intended to list his company on the London Stock Exchange in the future if it could get some funding.
Mr Kang remained at the Gold Coast from 6 to 14 May. He continuously sought to ascertain from Bowen Basin what was to happen about remedying its breaches in making payments due under the charterparty during this period.
On 7 May Mr Kang waited at Bowen Basin’s offices to speak to Mr Thomson but instead he met Mr Jenkins. Mr Jenkins told him that they were trying to arrange finance. That afternoon Mr Jenkins and Chantal Horton, an executive assistant at Bowen Basin, met with Mr Kang. They gave him a cheque for $1,000,000 drawn by Beach Building & Civil Group Pty Ltd on a Sydney branch of Bank of China. The cheque was dated 7 May 2010 and it was signed by Mr Thomson. Ms Horton told Mr Kang that the cheque was security over the coming weekend for the outstanding freight and demurrage Bowen Basin owed to STX. She said, however, that the cheque could not be honoured because there was no money in the account and they were still trying to arrange finance. Ms Horton asked Mr Kang to ring before trying to bank the cheque and that they could remit the money after they had received funding. Mr Kang replied that STX’s head office required payment by telegraphic transfer, not cheque.
Ms Horton also emailed a copy of the cheque to Mr Ahn, writing that Bowen Basin “… once again apologises for the delay in getting this payment to you”. Mr Thomson emailed Mr da Silva on 7 May advising that they had received STX’s notice of lien. Mr Thomson wrote that:
“… we have issued Danny [Kang] with a check for 1 million USD to be presented Monday close of business.”
He requested that the cargo be unloaded “to save any more expense”.
Later on 7 May 2010, STX’s London solicitors, Clyde & Co, faxed a letter of demand to Bowen Basin. They noted that if payment were not received by noon on 10 May 2010, STX reserved the right to commence proceedings. Clyde & Co stated that STX were concerned about, first, Mr Thomson’s repeated failures to keep his promises, secondly, Bowen Basin’s current financial position, thirdly, the then current default in payment of the outstanding freight and demurrage and, fourthly, the uncertainty of Bowen Basin’s performance of the second shipment. The letter made time of the essence in respect of Bowen Basin’s obligation to provide a cargo for Izola by noon on 10 May 2010 and required loading to occur within the subsequent 48 hours.
Negotiations between the parties continued on 10 May 2010. Bowen Basin’s representatives advised Mr Kang that the second shipment would be ready to be loaded on Izola right after the imminent provision of bank funding. Later that day, Clyde & Co faxed Bowen Basin asserting that its continuing breaches of the charterparty evinced repudiatory conduct. Bowen Basin continued to default as Mr Kang kept pressing for payment. On Tuesday 11 May 2010, Mr Jenkins showed Mr Kang some documents concerning Bowen Basin’s attempts to arrange funding. Mr Kang also returned the cheque to Mr Thomson, Mr Jenkins and Ms Horton on 11 May, asking that the outstanding freight be paid by telegraphic transfer immediately.
On 13 May 2010, STX wrote to Bowen Basin complaining that its conduct in breach of the charterparty was fraudulent. Mr Kang gave up his attempts to negotiate on 14 May and returned to Melbourne. STX emailed Bowen Basin on 14 May advising it that, in addition to the outstanding freight and load port demurrage for Yong An 2, demurrage in Shanghai was about USD140,000, while demurrage for Izola, which was still at Kwinana, was about USD680,000. The email claimed that the total payment that would be due on 20 May would be USD2,077,827.50.
On 17 May 2010 STX’s solicitor, Derek Luxford, spoke to Mr Thomson about payment. Mr Thomson told him that Bowen Basin had no money but was still negotiating for finance and was hopeful that everything would be signed off and payment made by 5.00 pm that day.
STX ACCEPTS BOWEN BASIN’S REPUDIATION AND BEGINS THESE PROCEEDINGS
Finally, on 17 May, STX wrote to Bowen basin giving notice that STX had accepted its repudiation of the charterparty and cancelled the second shipment. STX reserved all its rights. By 18 May 2010, Izola had been fixed to carry a cargo of 44,000 tonnes of wheat from Kwinana to Vietnam. On 19 May 2010, she tendered a notice of readiness to load the wheat.
On 21 May 2010 STX filed a writ in personam beginning these proceedings. On that day, I made a freezing (Mareva) order against Bowen Basin and Mr Thomson preventing them from dealing with their assets in any way that would leave them with assets in Australia that had an unencumbered value of less than AUD2,429,111.44.
Ultimately, Bowen Basin and Mr Thomson complied with their obligations under the freezing order to state, as best they could, the value of their assets and liabilities as at 25 May 2010. Bowen Basin stated that it had liabilities to Griffin Coal of AUD378,827.10, and to STX of USD1,987,994.05, together with other creditors of AUD43,019. It had only one present asset consisting of cash at bank of AUD3,088. It was thus hopelessly insolvent. It also claimed “contingent assets” of USD27 million “based on profit estimated on current market negotiations” arising from the Griffin Coal contract. There was no evidence to support this asserted contingent asset. Mr Thomson asserted that he had assets consisting of items of personal property totalling AUD100,000, including an estimated AUD35,000 for superannuation, and with a credit card liability to a bank of about AUD6,000. He noted that he had estimated contingent liabilities for supply guarantees of AUD750,000 and finance guarantees of AUD9.26 million.
STX’S EXPENDITURE INCURRED IN PERFORMING THE CHARTERPARTY
On 1 June 2010, Yong An 2 began discharging the cargo of coal at Shanghai, which continued until 3 June 2010. As at 3 June 2010, STX had incurred the following expenses in providing the two ships for the purposes of the charterparty of 12 March 2010:

Yong An 2

USD

(a)

Hire paid by STX to owners of vessel at USD24,000 per day (71.979 days)

1,727,500.00

(b)

Bunkers consumed

  403,807.00

(c)

Port charges

- Kwinana

- Shanghai

   Total

Less payment (net of bank charges)

   Total for Yong An 2

43,840.86

46,707.00

      90,547.86

2,221,854.86

   (499,980.00)

1,721,874.86

Izola

(a)

Hire paid by STX to owners of vessel at USD19,500 per day (43.951 days)

    857,052.09

(b)

Bunkers consumed

   Total for Izola

    182,180.59

1,039,232.68

Total for both vessels

2,761,107.55

There was no dispute that STX had incurred these expenses. However, Mr Thomson asserted that STX had not established that they were reasonable expenditures. I reject this argument. There was no evidence to suggest that any of these expenditures was outside a reasonable commercial expense at market rates. Indeed, the rates of charter hire for Yong An 2 and Izola for which STX was liable and paid, were less than what Bowen Basin had agreed to pay STX under the charterparty.
On 1 July 2010, the first day of the trial, I entered judgment against Bowen Basin for USD2,483,296.25 with costs after it appeared and did not oppose that course. That judgment sum represented the outstanding freight demurrage and other moneys owing under the charterparty.
BOWEN BASIN GOES INTO LIQUIDATION
On 11 August 2010, administrators were appointed to Bowen Basin, which had changed its name to Dafco Operations Pty Ltd. At the first meeting of creditors Mr Thomson submitted a proof of debt dated 20 August 2010 for AUD3,179,136. In his proof of debt he alleged that Bowen Basin was indebted to him in consideration of financial assistance he had provided. Mr Thomson claimed that Bowen Basin had given him a guarantee and indemnity under which he asserted the company was liable “for damages of USD2,761,107.55 claimed by” STX against him, together with his legal costs. He attached to the proof a letter dated 20 July 2010 from STX’s solicitors particularising its claim against him.
The administrators’ report to creditors for the second meeting stated that, in addition to the judgment sum, Bowen Basin had known claims, of over AUD4,200,000. The report identified total claims of nearly AUD7 million at the USD/AUD exchange rate applicable on the date of the commencement of the administration. Mr Thomson proposed that the creditors vote for a deed of company arrangement under which there would be a one-off payment of $30,000 and Mr Thomson would subordinate his unsecured claim for AUD3,179,136 against Bowen Basin. The administrators recommended that the creditors reject this proposal and vote for a winding up on the basis that the payments made by Bowen Basin to Griffin Coal and STX in respect of the Yong An 2 cargo were possibly recoverable as preferential payments.
STX argued that Mr Thomson made admissions that he was liable to it in the proof of debt and his use of it to vote at the creditors’ meetings. I reject that argument. In its context, and fairly read, the proof of debt made a claim that Bowen Basin had a contingent liability to Mr Thomson under a guarantee and indemnity for the damages STX claimed against him in these proceedings. Mr Thomson did not admit that he was, in fact, liable to STX as it claimed. Rather, he was asserting that if STX’s claim succeeded, he was entitled to be recouped by Bowen Basin. Mr Thomson also claimed that Bowen Basin was liable for his legal fees in defending STX’s claim. I do not consider that this claim for legal fees incurred in respect of defending his conduct as an officer of Bowen Basin should be construed as an admission of his liability to STX. Rather, it is the very kind of claim an officer could be expected to make against the company for which he was acting in the course of his duties giving rise to STX’s proceedings against him.
WHEN WAS PAYMENT OF FREIGHT AND LOAD PORT DEMURRAGE DUE?
Under addendum No 1 to the charterparty, Bowen Basin was obliged to pay freight and load port demurrage within five banking days after signing and release of the bills of lading. Thus, after the charterparty was entered into on 12 March 2010, the time for performance of that obligation was some way off in the future. A contractual obligation to pay “within” a period of time generally requires performance during the interval that elapses between, but not counting the day or event nominated, as the point from which counting begins and the circumstance or day nominated as the end of the period: Thomas v Lambert (1835) 3 Ad & El 61 at 62 per Lord Denman CJ and Littledale J at 63 per Patterson J and Coleridge J (also reported in 4 LJ KB 153 at 154); i.e. the obligation is generally construed as requiring payment before the expiration of the nominated period: Compania Naviera General SA v Kerametal Ltd (“The Lorna”) 1 [1983] 1 Lloyd’s Rep 373 at 375 per Sir John Donaldson MR, 376 per O’Connor LJ, 377 per Dillon LJ. A similar construction has been given to “within” when used in a statute to define a period for the performance of an act: Morton v Hampson [1962] VR 364 at 365 per Herring CJ, Sholl and Little JJ. These constructions accord with the natural and ordinary meaning of “within” and its commercial usage. I am of opinion that the obligation to pay freight and load port demurrage under addendum No 1 should be construed in the same way, so that the last day for payment was the fifth banking day after the later of the signing and release of the bills of lading.
In a number of well known forms of charterparty (including the New York Produce Exchange, Baltime and Shelltime forms), the obligation of a charterer to pay hire not later than the time it is due, is generally regarded as an essential term that, if breached, entitles the owner to terminate immediately and to withdraw the vessel: Mardorf Peach & Co Ltd v Attica Sea Carriers Corporation of Liberia [1977] AC 850 at 868E-870D, 872C-E per Lord Wilberforce, 873C per Lord Simon of Glaisdale, 878E-H per Lord Salmon, 882H-883F per Lord Russell of Killowen.
Here, addendum No 1 imposed an obligation on Bowen Basin, to pay freight and demurrage, as charterer, within five banking days of the later of the signing and release of the bills of lading. The times at which the bills would be signed and released were not specified in cl 22 of the charterparty. However, the master, owners or their agent, ordinarily would be obliged to sign the bills promptly after the cargo had been shipped on board and then to release them to the shipper or other person entitled to hold them. In the present case, Bowen Basin, as shipper, was in no rush to accelerate the time at which it had to pay freight and load port demurrage. I infer that Bowen Basin did not press for release of the bills of lading. Rather its commercial purposes would have been better served by it seeking to use the letter of indemnity to secure delivery of the cargo to Loyal Strategic without production of a bill of lading. However, the release of the bills on Wednesday, 28 April 2010 had the result that Bowen Basin’s obligation to pay freight and load port demurrage had to be fulfilled “within 5 banking days”. That period excluded 28 April 2010 and concluded on the fifth banking day following, namely on 5 May 2010.

The upshot of this discussion is that on 12 March 2010, when the charterparty was made, neither party was aware of what would be the precise times for payment. This factor provides some context for the consideration of STX’s primary claim, namely that at, or before, the time of entry into the charterparty, expressly or impliedly, Mr Thomson made or was party to Bowen Basin making the ready, willing and able representation that I will now consider.
SUBMISSIONS ON THE READY, WILLING AND ABLE REPRESENTATION
Mr Thomson was the controlling mind of Bowen Basin, and its sole shareholder and director, at the time of negotiations for and entry into the charterparty. STX contended that he was, therefore, the embodiment of Bowen Basin and aided and abetted it in making the ready, willing and able representation. STX argued that because Mr Thomson was the principal actor on behalf of Bowen Basin in the negotiations, and signed the charterparty on its behalf under its common seal, he was accessorily liable under s 75B of the Act relying on what Mason CJ, Wilson and Toohey JJ and said in Hamilton v Whitehead (1988) 166 CLR 121 at 127-128. Relevantly, s 75B(1)(a), (b) and (c) provided:
“75B Interpretation
(1)A reference in this Part to a person involved in a contravention of a provision of Part … V [including s 52] … shall be read as a reference to a person who:
(a) has aided, abetted, counselled or procured the contravention;
(b)has induced, whether by threats or promises or otherwise, the contravention;
(c)has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention.”
The act of an individual can be both a corporate act, on behalf of the company for which he or she acts, and the separate act of the actor as an individual: Houghton v Arms (2006) 225 CLR 553 at 567-568 [46], see too at 566-567 [40]-[42] per Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ. An individual can be made liable for a contravention of s 52 because he or she was involved in that contravention by force of s 75B(1)(a), (b) or (c) only if he or she intentionally participated in the contravention: Yorke v Lucas (1985) 158 CLR 661 at 667-670 per Mason ACJ, Wilson, Deane and Dawson JJ. Thus, to be liable under s 75B(1)(a), the individual must know of the essential matters that go to make up the contravention by the corporation, whether or not he or she knows that the corporation itself contravened s 52: Yorke 158 CLR at 667-668. As I have noted above, Mr Thomson did not dispute that if the ready, willing and able representation had been made by Bowen Basin, through him, he would have known it to have been false. However, he contended that no such representation had been made.
STX argued that the ready, willing and able representation was grounded in longstanding expectations critical in international trade. It contended that banks, insurers, carriers and cargo owners act on documents conformable to, what STX said, was:
“… accepted commercial conduct [that] gave rise, inter alia, to the right to terminate the charterparty on the ground of repudiation and justified a refusal to further perform it: see Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd (1953) 90 CLR 235 at 253 per Kitto J – “he must show he was ready and willing to perform his part … And of course readiness and willingness to perform imports ability to perform: De Medina v Norman (1842) 9 M & W 820 at 827 [152 ER 347 at 350]”.
In addition, STX argued that Bowen Basin was not able to perform the charterparty on 12 March 2010 because it had no “disposition to perform” in the sense explained by Mason CJ in Foran v Wight (1989) 168 CLR 385 at 397. It contended that this consequence was evident on 23 April 2010. That was the date it argued in submissions when Bowen Basin defaulted five days after the signing of the bill of lading. I have found that this liability had to be met only five banking days after the bill was released, namely on 5 May 2010 (which was also the date STX had pleaded in its points of claim).
CONSIDERATION OF THE MAKING OF THE READY, WILLING AND ABLE REPRESENTATION
I find that Bowen Basin was not ready, willing or able, and had no disposition, to perform on the date payment was due, five banking days after the signing and release of the bill (whether that was 5 May or at any time after 16 April, when it had entered into the contract with Loyal Strategic). However, that is not determinative of the issues in relation to the ready, willing and able representation made that was allegedly made almost two months earlier.
All of the circumstances, as well as the context, in which conduct occurs must be considered for the purpose of characterising whether a person, in a commercial dealing or negotiation with another, has engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of s 52 of the Act: Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 270 ALR 204 at 211 [20] per French CJ and Kiefel J, 224 [91] per Heydon, Crennan and Bell JJ. Silence, common assumptions and practices in a particular industry and the knowledge of the person to whom the conduct in question was directed can be relevant for this purpose: Miller 270 ALR at 211 [20].
The conduct of Bowen Basin and Mr Thomson, that STX alleged gave rise to the ready, willing and able representation, occurred on 12 March 2010 when the charterparty was entered into, or before then. STX relied on Mr Ahn’s state of mind at this time. He said, without objection:
“At the time [STX] entered the charterparty with [Bowen Basin] [STX] assumed from the making and execution of the charterparty by [Bowen Basin] and its authorised representative and by the terms of the charterparty that [Bowen Basin] and its controlling mind or manager responsible for the charterparty intended to perform the charterparty according to its terms and that [Bowen Basin] would pay the full freight and demurrage due under the charterparty as arranged and would provide the two cargos required under the charterparty.” (emphasis added)
Mr Ahn acknowledged in cross-examination that he had not made the decision that STX enter into the charterparty and could not say what his superiors had assumed at the time. Importantly, Mr Ahn said that he was not responsible for that decision. But, he asserted that his superiors would have made their decision on the basis of his recommendations.
This evidence provides an unsatisfactory basis for making any finding about what STX relied on in entering into the charterparty. The actual decision-makers have not given evidence. STX offered no explanation for their unavailability. Moreover, Mr Ahn said that he believed that if Bowen Basin signed the charterparty all the companies in its group would also be bound. He also said that the most important part of the information that he gave to his superiors was what he had obtained from Infospectrum. Again, STX did not lead any direct evidence of that information.
I am not satisfied that STX made the assumption asserted by Mr Ahn. He did not know what the decision-makers did, or what they had assumed. There was no evidence of most of the material that they had before them, all of which it was in STX’s power to adduce.
STX in the course of its business was familiar with the usages of international trade involving charterparties. It had to deal with the chartering of vessels using adaptations of standard form contracts that were made in many jurisdictions. Internationally used forms, such as charterparties, are intended to provide parties from many countries with commercial certainty about their rights and obligations ascertainable under a nominated system of law. That is why charterparties usually contain arbitration and jurisdiction clauses.
It is significant that the charterparty STX made with Bowen Basin does not contain a clause in the terms of the ready, willing and able representation. Indeed, as I explain later in these reasons, the law of contract does not imply a term expressed in the way in which that representation was pleaded. If STX had required a promise in the terms of the ready, willing and able representation to protect its contractual rights, it could, and should, have bargained for it. In the case of voyage or time charters, and contracts of affreightment, courts should be slow to discern that the parties have a relationship governed or affected by considerations for which they did not bargain. Of course, if a misrepresentation induced entry into such a contract, a court must consider its effect. But, where the alleged representation, as here, is said to arise simply because one party entered into a commercial contract in a well known form, in international trade, that did not contain that representation as a term, then there is no reason to superimpose on the written contract an extra covenant in the form of the ready, willing and able representation.
The reason for this is the need for shipowners and charterers in time and voyage charters to have certainty about their relationship. Lord Diplock explained the policy reason for this with his usual, illuminating clarity in his speech (with which Lords Keith of Kinkel, Scarman, Roskill and Bridge of Harwick agreed) in Scandinavian Trading Tanker Co AB v Flota Petrolera Ecuatoriana (The “Scaptrade”) [1983] 2 AC 694 at 703E-704D as follows:
“My Lords, quite apart from the juristic difficulties in the way of recognising a jurisdiction in the court to grant relief against the operation of a withdrawal clause in a time charter there are practical reasons of legal policy for declining to create any such new jurisdiction out of sympathy for charterers. The freight market is notoriously volatile. If it rises rapidly during the period of a time charter, the charterer is the beneficiary of the windfall which he can realise if he wants to by subchartering at the then market rates. What withdrawal of the vessel does is to transfer the benefit of the windfall from charterer to shipowner.
The practical objections to any extension to withdrawal clauses in time charters of an equitable jurisdiction to grant relief against their exercise are so convincingly expressed by Robert Goff L.J. in the judgment of the Court of Appeal [1983] QB 529, 540-541 in the instant case that I can do no better than to incorporate them in my own speech for ease of reference:
‘Parties to such contracts should be capable of looking after themselves: at the very least, they are capable of taking advice, and the services of brokers are available, and are frequently used, when negotiating terms. The possibility that shipowners may snatch at the opportunity to withdraw ships from the service of time charterers for non-payment of hire must be very well known in the world of shipping: it must also be very well known that anti-technicality clauses are available which are effective to prevent any such occurrence. If a prospective time charterer wishes to have any such clause included in the charter, he can bargain for it. If he finds it necessary or desirable to agree to a charter which contains no such clause, he can warn the relevant section of his office, and his bank, of the importance of securing timeous payment. But the matter does not stop there. It is of the utmost importance in commercial transactions that, if any particular event occurs which may affect the parties' respective rights under a commercial contract, they should know where they stand. The court should so far as possible desist from placing obstacles in the way of either party ascertaining his legal position, if necessary with the aid of advice from a qualified lawyer, because it may be commercially desirable for action to be taken without delay, action which may be irrevocable and which may have far-reaching consequences. It is for this reason, of course, that the English courts have time and again asserted the need for certainty in commercial transactions - for the simple reason that the parties to such transactions are entitled to know where they stand, and to act accordingly. In particular, when a shipowner becomes entitled, under the terms of his contract, to withdraw a ship from the service of a time charterer, he may well wish to act swiftly and irrevocably. ...’” (emphasis added)
It is inherently unlikely that STX entered into a well known and unexceptionably adapted standard-form charterparty, such as the AMWELSH 93 version here, on the basis of a promissory representation that it did not record as part of that bargain. The ready, willing and able representation was promissory in its terms. If it were made, it enhanced the bargain in the written terms by holding Bowen Basin to a standard of performance different from, and more onerous than, those written terms. This is because s 51A of the Act required the representor to have reasonable grounds for making a representation with respect to a future matter, such as future performance, when the contract only required him to promise that he would be ready, willing and able to perform when the time for performance arose. And the contract provided agreed remedies if the promisor defaulted at that later time.
As I explain below, the contractual principles for determining whether a promisor has committed an anticipatory breach, ordinarily, do not operate simply because at the time of the promise, the promisor did not have reasonable grounds for making it. As Lord Diplock observed, the freight market itself is “notoriously volatile”: The Scaptrade [1983] 2 AC at 703E. There was no evidence that STX was aware that it was dealing with an Australian charterer in Australia so as potentially to attract the operation of ss 51A and 52 to the ordinary risks of it engaging in this volatile trade. There was nothing in the nature of this dealing to suggest that STX would have dealt any differently with a company in an identical financial position to Bowen Basin in other jurisdictions without reliance on the asserted ready, willing and able representation.
In any event, given the inexact proof, indefinite testimony, and indirect inferences in Mr Ahn’s evidence, I am not persuaded that anyone at STX who made the decision to enter into the charterparty relied on anything beyond the written terms of that contract and STX’s internal assessment of Bowen Basin’s creditworthiness. I am not satisfied on the balance of probabilities that the ready, willing and able representation was made to STX. Nor am I satisfied that, if it were made, STX relied on it in deciding to enter into the charterparty: see s 140(2) of the Evidence Act 1995 (Cth) and Briginshaw v Briginshaw (1938) 60 CLR 336 at 362 per Dixon J; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission (2007) 162 FCR 466 at 479-482 [29]-[38] per Weinberg, Bennett JJ and myself.
In addition, Mr Ahn had not been able to find much out about the financial capacity of Bowen Basin to pay. He drew comfort from the web pages. Mr Ahn understood that they conveyed that Bowen Basin was a member of a substantial financially successful group of companies. However, that fact did not mean that Bowen Basin itself would be able to fulfil its obligations under the charterparty being negotiated. STX did not ask to see Bowen Basin’s accounts or a statement of its assets and liabilities. Representations made to members of a class, such as were made by the web pages, must be assessed on the basis of what they would convey to a reasonable member of that class: Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 at 85 [102] per Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ. I am not satisfied that it was reasonable for Mr Ahn, and through him, STX, to rely on the web pages to form a view about Bowen Basin’s financial circumstances. Nor was there any direct evidence of the information STX had from Infospectrum. I have inferred that that information was not unfavourable to Bowen Basin, from STX’s perspective. However, Mr Ahn independently and wrongly, concluded that all the companies in the group were bound by Bowen Basin’s execution of the charterparty. That state of mind had nothing to do with any conduct of Mr Thomson or Bowen Basin.
There was no evidence that Mr Thomson made any direct representation or engaged in any particular pre-contractual conduct, other than his generally being involved in the negotiating for and signing the charterparty.
The context and circumstances in which STX agreed to enter into the charterparty were that it had limited information as to Bowen Basin’s financial position. STX was prepared to take the commercial risk that Bowen Basin would earn sufficient from the sale of the two coal cargoes, or would be able to subcharter or otherwise pay to meet its obligations. The web pages may have induced, and probably did induce, Mr Ahn and STX to consider that Bowen Basin was a member of a group that had had a measure of past commercial success. However, I am not satisfied that he or STX could reasonably have relied on the web pages alone, or in combination with any other evidence, to conclude that Bowen Basin was making the ready, willing and able representation before or at the time of entry into the charterparty. Certainly, STX would have understood Bowen Basin to be representing that it intended to perform its obligations as and when they would fall due. But I am not satisfied that this dealing was in any way out of the ordinary course of trade and commerce. No case was cited in which a pre-contractual representation, in the terms pleaded by STX, has been found simply because the parties engaged in unexceptional negotiations and then entered into the contract.
READINESS, WILLINGNESS AND ABILITY TO PERFORM
At the time that the charterparty was entered into each of the parties was aware that each had to perform numerous acts under it at different times in particular circumstances. For example, STX had to nominate each of two vessels, seven days prior to their estimated time of arrival at Kwinana. Those nominations would fall within the window of not less than seven days prior to 26 March to 7 April for the first ship, and 7 and 17 April for the second. Once each nomination had been made, Bowen Basin would have to arrange for Griffin Coal to have a cargo to be ready for loading. The ship had to give a notice of readiness. The charterparty contemplated that there may be port delays; hence the demurrage clause. Moreover, Bowen Basin could nominate a range of ports in China for discharge. This indicated that the parties at least contemplated that on 12 March 2010 Bowen Basin did not have a buyer or buyers or a definite contract for sale of either cargo.
Each party was operating its business in a market that could change quickly the rates for hire of ships or the price of coal in China. Indeed, the daily hire rates of Yong An 2 and Izola that were fixed on 12 March and 2 April respectively were significantly different (USD24,000 and USD19,500) and, each was also significantly different from the USD27,000 also fixed on 12 March under the charterparty.
I am of opinion that reasonable commercial persons, in the position of the parties at the time the charterparty was made, would not have expected either STX or Bowen Basin necessarily to have had actual contractual arrangements in place to enable each, at a later time, to perform its obligations under the charterparty. A reasonable person in their positions would consider that each party believed or expected that, if it did not already have such a contract then it or the other would be able to conclude any needed contract or meet any obligation within the time frames provided in the charterparty. However, STX’s pleaded representation went beyond belief or expectation. It contended that there was an actual assertion by Bowen Basin of both immediate and future readiness, willingness and ability to perform, as opposed to a mere belief or expectation.

On STX’s case, by force of s 51A, Bowen Basin would be taken to have made a misleading representation in terms of the ready, willing and able representation unless there were evidence that it had reasonable grounds for making it. There was no evidence whether, on 12 March 2010, Bowen Basin could or could not have negotiated profitable sales contracts for the cargoes that would have enabled it to pay all its liabilities to STX and other creditors. But for the operation of s 51A, the fact that it could not do so, as events turned out, is not probative that due performance by it was always going to be impossible. However, on STX’s case, at the moment Bowen Basin entered into the charterparty it must have been in anticipatory breach of the charterparty by evincing an inability ever to perform then or in the future. The consequence of this is that STX would have been able to terminate immediately on 12 March and sue for damages, if it were false of Bowen Basin to represent on or before 12 March 2010 that it was ready, willing and able to perform then or later, when the occasion for performance arose under the charterparty.
The contractual promise of readiness, willingness and ability to perform has been considered in both the contexts of actual and anticipatory breach. In Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245 at 280 Gaudron J discussed how the doctrine of anticipatory breach operates in the latter respect in the following passage:
“To justify termination by a party of his contractual obligations by reference to an anticipatory breach constituted by an inability to perform if not known or relied upon at the time, it is necessary to establish, not only that up until the point of termination the terminating party was ready, willing and able to perform the contract on his part, but also that at that time the other party was wholly and finally disabled from performing its contractual obligations when the time for performance, so far as it is of the essence, should arrive. That total disability must be proved “in fact and not in supposition” -- per Devlin J in [Universal Cargo Carriers Corporation v] Citati [1957] 2 QB 401 at 450.” (emphasis added)
Mason CJ, with whom Deane, Dawson and Toohey JJ agreed, said that anticipatory breach may occur by reason of repudiation or renunciation of contractual obligations or by reason of inability to perform them. He also accepted the approach of Devlin J in Citati [1957] 2 QB at 446: Sunbird Plaza 166 CLR at 263-264.
I am not satisfied that on or before 12 March 2010, Bowen Basin was in anticipatory breach because it could never have performed its obligations under the charterparty as and when they fell due. It had not disabled itself from being able to perform. I am of opinion that had STX immediately terminated the charterparty on 12 March 2010, it would have been in breach, itself, and liable to Bowen Basin for damages. At that time, the charterparty was wholly executory. There was no evidence, for example, that conditions in the coal market, then and in the period in which Bowen Basin had to arrange a sale or sales, were such as would necessarily result in Bowen Basin sustaining a loss so that it could not meet its debts to STX: cf Citati [1957] 2 QB at 430-433 per Devlin J who cited Stanton v Richardson (1872) LR 7 CP 421 as an example. In Stanton LR 7 CP at 436 and 437 a ship that was unfit to carry the cargo which she had contracted to load was held to be unseaworthy. Because she could not be made fit to carry that cargo within a reasonable time, the jury found that the master was willing, but not able, to carry out the adventure in the charterparty. As Brett J held, the charterparty had been breached by reason of the unfitness of ship.
I am not satisfied, at or before the time it was made, that Bowen Basin or Mr Thomson had no intention to perform, or that Bowen Basin was wholly and finally disabled from performing, the charterparty in accordance with its terms: cp Citati [1957] 2 QB at 446. As Devlin J said (at 450):
“An anticipatory breach must be proved in fact and not in supposition. If, for example, one party to a contract were to go to another and say that well-informed opinion on the market was that he would be unable to fulfil his obligations when the time came, he might get the answer from his adversary that the latter did not care to have his affairs discussed on the market and did not choose to give any information about them except the assurance that he could and would fulfil his obligations. If that assurance was rejected and the contract rescinded before the time for performance came and the assurance in fact turned out to be well-founded, it would be intolerable if the rescinder was entitled to claim that he was protected because he had acted on the basis of well-informed opinion.” (emphasis added)
Consistently with this reasoning, STX rejected the request Bowen Basin had made on 23 March 2010 to cancel the second charter. Nor does Peter Turnbull 90 CLR 235 assist STX’s argument. The Court there examined whether one party was ready, willing and able to perform at the time when performance was due under the contract and the other had dispensed with the need for performance. It did not consider whether some representation, such as the one on which STX relied, could be discerned from the pre-contractual negotiations and the entry into the contract.
There was no direct evidence that the ready, willing and able representation was made to STX as pleaded. The consequence I have discussed above, that if such a representation were inferred in a commercial context from the mere fact that a party negotiates, and then enters, a contract, would transform well developed principles of the law of contract applicable in international trade and commerce. Nor does the law of contract ordinarily recognise or imply a promise as having been made by contracting parties in terms of the pleaded ready, willing and able representation. That is a powerful reason to deny that such a representation ought be found to have been made merely because a party entered into a contract that did not contain it as a term. Moreover, it would introduce considerable uncertainty to transactions in international trade, to which ss 51A and 52 of the Act applied, that were entered into with a party in Australia.
In addition, the time at which a contracting party, who has not already wholly and finally disabled himself from performing, must be ready, willing and able to perform is when the contract requires the tender of performance. Here, Bowen Basin was entering into a well known form of contract, a charterparty, that contemplated the need for each party to perform sequentially obligations that, in turn, would generate a requirement for the other to perform. For example, STX had to nominate a vessel and give an estimated time of arrival. When that occurred Bowen Basin had to arrange for a cargo to load on the vessel. Numerous intermediate steps had to occur, as a result of performance by one or both parties, before the freight and load port demurrage became payable at a future time (i.e. within five banking days of release of the bill of lading). A reasonable person in the position of the parties would have known that a shipper of goods under a charterparty in the position of Bowen Basin could still own the goods and obtain a bill of lading made out to order with a view to selling the bill (and the cargo it represents in the law merchant) while the ship is at sea. This possibility could realise a greater or lesser price depending on the market for the goods at the port of discharge on the day of the sale. Such a possibility was canvassed by Devlin J in the passage from Citati [1957] 2 QB at 446 that I have set out above.
Because of these ordinary incidents of international commerce, I have been unable to accept that Bowen Basin made the ready, willing and able representation as pleaded. The pleading was of a composite representation. A shipowner is well aware of the possibility before entering a charterparty, that the charterer may default in payment of freight. That is why, as here, standard form charterparties like the AMWELSH 93 (in cl 21) or the NYPE 1946 form (in cl 18) provide for owners to have a lien on all cargoes, sub-freights and sub-hires for amounts due by the charterers. If the shipowner wants more protection he can negotiate appropriate terms to add to the charterparty.
Mr Thomson accepted in argument that there was no evidence that, prior to or when the charterparty was entered into, Bowen Basin could have performed its obligations under the charterparty. Mr Thomson conceded that this evidentiary gap would be conclusive for the purposes of deeming the ready, willing and able representation to be misleading (had STX proved it to have been made) to the extent it was made with respect to future matters, such as Bowen Basin’s ability to perform: see s 51A of the Act. However, the onus was on STX, first, to establish that the ready, willing and able representation was made as it had been pleaded. For the reasons I have given I am not satisfied that STX has proved this.
For these reasons, I reject STX’s case that Bowen Basin or Mr Thomson made the ready, willing and able representation at or before entry into the charterparty.
THE POST-CONTRACTUAL REPRESENTATIONS
STX relied in its particulars of the post-contractual representations, on the email dated 12 April 2010 Mr Thomson had sent to Sea Corp that stated Bowen Basin had “… the matter in hand and are aware of all costs associated”. STX contended this was also a false representation as to Bowen Basin’s capacity to pay its debts under the charterparty.
I reject that argument. First, there was no evidence that Bowen Basin’s negotiations at that time would lead to a loss or the commercially lamentable outcome that occurred four days later when it sold the two cargoes of coal to Loyal Strategic. Secondly, Mr Fogg’s email of 13 April suggested that a significantly more favourable price for coal might be available in China. While, as events turned out, Mr Thomson may have been over optimistic in his email of 12 April, I am not satisfied that he knew that its contents were false or was recklessly indifferent as to their truth or falsity when he sent it.
The balance of STX’s particulars for the post-contractual representations relied on the letter of indemnity and the parties’ discussions and dealings following 5 May 2010. Since there was no evidence that Bowen Basin or Mr Thomson sought to present the letter of indemnity or caused it to be used, it is not open to find that it amounted to any representation made to STX.
As I have explained above, Bowen Basin had until 5 May 2010 to pay the freight and load port demurrage for Yong An 2. The evidence suggested that Bowen Basin and Mr Thomson were making concerted efforts to raise finance and to secure a new profitable long term sale contract for other coal before and after 5 May 2010. Obviously, the part payment of USD500,000 on 4 May 2010 was not sufficient to amount to performance. Nor did STX’s acceptance and retention of that part payment amount to an election so as to prevent it from later terminating by accepting Bowen Basin’s breach constituted by its failure to pay the full amount due on time: China National Foreign Trade Corporation v Eviogia Shipping Co SA of Panama (The Mihalios Xilas) [1979] 1 WLR 1018 at 1037G per Lord Scarman. Bowen Basin could have paid the outstanding balance of the money it then owed at any time until midnight at the end of 5 May. Only at the moment after 5 May had become 6 May did Bowen Basin default: Afovos Shipping Co SA v Romano Pagnan & Pietro Pagnan [1983] 1 WLR 195 at 201A-D per Lord Hailsham of St Marylebone LC with whom Lords Diplock, Keith of Kinkel, Roskill and Brightman agreed.
Thus, on and after 6 May, Bowen Basin was in breach of the charterparty so as to entitle STX to terminate it and sue for the moneys then due and damages. STX held the charterparty open for the period to 17 May 2010. Mr Thomson deliberately sought to bring about that result and he succeeded in doing so. He began by emailing Sea Corp’s Mr da Silva at 11.25 am on 6 May suggesting that Bowen Basin was meeting with its banks at 2.00 pm to finalise finance so as to enable payment of the outstanding money and the commencement of loading of Izola. But by this time Bowen Basin faced an inevitable loss on the two cargoes it had agreed to buy from Griffin Coal and had sold to Loyal Strategic. That loss was over USD1,300,000 plus a large sum for demurrage of both vessels. There is no evidence that Bowen Basin could have obtained finance or other moneys to pay the then outstanding amount of about USD1.1 million owed to STX in respect of Yong An 2 together with the further shortfall of or about USD650,000 plus load port demurrage on what would be shipped on Izola, were it to load. It is safe to infer that had Mr Thomson given, or called, evidence it would not have assisted his case: Jones v Dunkel (1959) 101 CLR 298.
Mr Thomson’s assertions that he made about his personal wealth to Mr Kang at dinner on 6 May were false to his knowledge as shown by his statement of assets and liabilities made on 25 May, less than three weeks later. Far from having a fortune of $25 million, including five houses, if his 25 May assertions were true, he owned only about $100,000 worth of personal property. I am satisfied that Mr Thomson was fraudulent in informing Mr Kang about his supposed wealth. He did so intending STX to keep the charterparty on foot. He was well aware that STX was continuing to incur the expenses of maintaining both vessels ready to perform.
I am also satisfied that Mr Thomson, as Bowen Basin’s managing director and alter ego, caused its other officers who dealt with STX and its agents to make representations in the period after 5 May 2010 orally and in writing to the effect that Bowen Basin was ready and willing to perform, and would soon be able to do so once finance, which was said to be imminent, had been obtained.
Mr Thomson argued that the representations made after 5 May were consistent with him having an honest belief that funding would come through and that there was no other plausible explanation for his conduct, however unrealistic his belief may have been. I reject this argument.
The context of the conduct in which Mr Thomson engaged, and caused officers of Bowen Basin to engage in, demonstrated that in May 2010 he could not have had any, let alone, any reasonable belief that Bowen Basin could pay STX. Bowen Basin had agreed to buy from Griffin Coal and to sell to Loyal Strategic two cargoes of coal to be carried under the charterparty. By 16 April 2010, Bowen Basin’s financial position had crystallised so that those contracts would result in a loss to it of well over USD1.5 million. That must have been apparent to Mr Thomson as soon as he concluded the sale to Loyal Strategic on 16 April 2010. There is no evidence to suggest that after this time Bowen Basin had the capacity to raise money. Its 25 May statement of assets and liabilities confirmed that.
STX kept the charterparty on foot, and incurred expense, between 6 and 17 May 2010 because Mr Thomson made, and caused Bowen Basin’s officers to make, representations in that period that funds would become available so that STX would be paid. Mr Thomson had no belief in the truth of what he represented and Bowen Basin’s representations. First, he lied to Mr Kang about his own wealth. The lie was brazen: he was not very rich with about $25 million in assets and did not own five houses but had only some personal property worth about $100,000. Secondly, he arranged and signed the letter of indemnity with a view to obtaining discharge of the cargo from Yong An 2 without production of the bill of lading. If the letter of indemnity had been used successfully, STX would have lost possession of the only possible source of its being paid, namely, its control over the coal on board Yong An 2. I infer that this was Mr Thomson’s purpose in signing the letter of indemnity. There was no explanation given by him for proposing to use it and no evidence of any difficulty in arranging for the presentation of the bill of lading. However, there is no evidence that he caused the letter of indemnity to be deployed. Thirdly, he caused Mr Kang to be given a worthless cheque drawn by Beach Building for $1 million as an earnest of good faith, knowing that Bowen Basin was then hopelessly insolvent.
Moreover, Mr Thomson continued to tell STX, personally or through Bowen Basin, during the period after 5 May that finance would be arranged, despite the obvious insolvency of Bowen Basin and its hopeless financial position. He intended STX to act on his false assertions that Bowen Basin would perform and that he could procure or support its performance through his personal wealth and the negotiations he claimed were occurring. Mr Thomson also argued that STX did not rely on the post-contractual representations as a reason for postponing its decision to terminate the charterparty. He pointed to the fact that it took STX until early June 2010 to cause the coal to be discharged from Yong An 2. I reject this argument.
First Mr Thomson desired to bring about the result that STX would not terminate. His conduct in making the post-contractual representations in May was a cause of STX not doing so until 17 May 2010: Gould v Vaggelas (1984) 157 CLR 215 at 236 per Wilson J. Secondly, it is likely that the reason for the later discharge was that Loyal Strategic having paid Bowen Basin over USD2.9 million for the cargo, had still to contend with STX’s exercise of its lien over the cargo for unpaid freight. The obvious reason for the delay in discharge is that Loyal Strategic had to negotiate with and pay some money to, or otherwise satisfy, STX. There is no evidence whether any payment was made. In contrast, STX refixed Izola the day after termination. However, STX incurred losses while it held Yong An 2 and Izola available to fulfil the adventure in the charterparty because Mr Thomson fraudulently made the post-contractual representations, or caused them to be made.
Had STX known of the fact that Bowen Basin was then hopelessly insolvent, it would have terminated the charterparty immediately on 6 May 2010. That is likely to have occurred by noon. The reason it did not was because Mr Thomson personally made, or caused others on behalf of Bowen Basin to make, the false post-contractual representations. I am of opinion that STX is entitled to recover its loss as a result of the moneys it expended on Yong An 2 and Izola in the period between noon on 6 May and the time of termination on 17 May 2010. That loss was a direct and foreseeable consequence of Mr Thomson’s fraudulent representations and his causing Bowen Basin to make the similar post-contractual representations in this period: Commercial Banking Company of Sydney Ltd v R H Brown & Co (1972) 126 CLR 337 at 346-347, 351-352 per Gibbs J with whom McTiernan J agreed, see too per Menzies J at 343-344 with whom Barwick CJ agreed.
STX’S ALTERNATIVE CLAIM FOR DAMAGES
STX argued in the alternative, that the measure of its damages in its claims against Mr Thomson under s 82 of the Act and in tort was the loss it made consisting of the right to be paid by Bowen Basin under the charterparty. That is, STX argued that Mr Thomson’s misrepresentations were a cause of its loss of unpaid freight and demurrage payable in accordance with the charterparty in the total sum for which judgment was entered against Bowen Basin.
I reject this argument. The measure of damages in contract is conceptually different to that in tort, and, generally, for claims under s 82 of the Act: Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 at 11-13 per Mason, Wilson and Dawson JJ. In contract, damages are awarded with the object of putting the plaintiff in the position he would have enjoyed had the contract been performed: namely, damages for loss of the bargain, or expectation loss, as well as for damage suffered, including expenditure incurred, in reliance on the contract, or reliance loss. In tort, the measure is only similar to reliance loss, namely damages are awarded with the object of putting the plaintiff in the position he would have been in had the tort not been committed: Gates 160 CLR at 12. In assessing damages in tort, it is necessary to determine what the plaintiff would have done had he not relied on the representation: Gates 160 CLR at 13.

STX offered no evidence of what it could or would have done had it been aware of the alleged misrepresentations prior to entering into the charterparty or at any time before it was terminated, other than to prove that it would not have entered into or proceeded with the charterparty once it had learnt of the true position. Rather, it argued that its loss was able to be measured in tort as the loss of the opportunity to earn freight, demurrage and other entitlements at the rate at which Bowen Basin had agreed to pay for these in the charterparty.
The fallacy in this argument was demonstrated by STX’s own evidence of the charterparties that it negotiated for Yong An 2 and Izola. Each of these was for a lesser daily rate of hire than the USD27,000 under the charterparty and those rates varied significantly between those two charters (USD24,000 and USD19,500). The bargain that STX had made with Bowen Basin was a different bargain to each of the two it had negotiated, on different days, for the hire of the vessels STX needed to fulfil its obligations under the charterparty. There was no evidence that the rate it had struck with Bowen Basin was a market rate that it could have earned, had it not been induced to enter into or proceed further with the charterparty. Indeed, the rates that STX had struck to charter each of Yong An 2 and Izola were telling evidence that market rates were lower than Bowen Basin had agreed to pay and varied significantly over a short period of time.
The argument is also not necessarily sound for assessing damages in contract. An owner’s damages for breach of a charterparty in respect of loss after termination can sometimes be measured by using the rate of demurrage as evidence of the vessel’s earning capacity, as Staughton LJ observed in SIB International SRL v Metalgesellschaft Corporation (The “Noel Bay”) [1989] 1 Lloyd’s Rep 361 at 366. But, as he pointed out, a rate actually obtainable on a substitute voyage that the owners fixed after termination was a better guide to the vessel’s earning capacity. In contract, of course, demurrage is the agreed damages payable in cases of the ship being delayed in loading or discharging beyond the agreed period: The “Dias” [1978] 1 Lloyd’s Rep at 327. Even though Mr Thomson was party to the negotiation of the demurrage rate fixed in the charterparty, he did not contract personally with STX and is not bound by an agreement, such as the charterparty, to which he was not a party.
STX sought to avoid this consequence by relying on the fact that Mr Thomson actually signed the charterparty, albeit in his capacity of a director or officer of Bowen Basin. STX contended that he should be treated as a party, since his act of signature bound Bowen Basin to the charterparty’s terms, whether or not he (or any other agent of that company) had read or understood it. STX sought to extend the consequences attaching to the act of a party of signing a contract or other document intended to affect legal relations to bind, as well, the individual who signed on behalf of a corporation. STX relied on Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at 177-178 [42]-[45] where at [45] Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ said that a person who signed such a document conveyed a representation to a reasonable reader of it. That representation was that the signatory had either read and approved its terms or was willing to take the chance of being bound by them whatever they may be.
I reject that argument. The act of signature itself creates a legal relationship between the signatory and other party on the terms of the document. Here, the signatory was Bowen Basin, not Mr Thomson in his personal capacity. He was not entering into the charterparty himself but was causing Bowen Basin to do so. Mr Thomson’s act of signature did not create a contract to which he was a party or under which he voluntarily assumed a legally enforceable obligation to STX: cp Australian Woollen Mills Pty Ltd v The Commonwealth (1954) 92 CLR 424 at 457 per Dixon CJ, Williams, Webb, Fullagar and Kitto JJ; Ermogenous v Greek Orthodox Community (2002) 209 CLR 95 at 105 [24]-[25] per Gaudron, McHugh, Hayne and Callinan JJ.
The general rule in assessing damages in tort for loss of use of a vessel due to a collision is to determine what she would have earned had she not been incapacitated in the period for which the claim is made: Admiralty Commissioners v S.S. Valeria [1922] 2 AC 242 at 246, 247 per Lord Buckmaster with whom Lords Dunedin and Atkinson concurred. I am of opinion that a similar principle is apposite here.
If STX were allowed to recover damages from Mr Thomson calculated at the rates in the charterparty, it would recover not merely its loss that it had incurred in reliance on the representations, namely the costs of and incurred in pursuing the two charters, but also the anticipated profit that it would have earned had Bowen Basin been able to pay. There was no evidence of a market or alternative charterer from which STX could have earned the rates under the charterparty, or indeed any other rates, during the period it was on foot. It is not possible to assess what STX might have earned had it not relied on the representations I have found, because STX gave no evidence beyond the cost to it of, and relating to, fulfilling its obligations under the charterparty.
CONCLUSION
The parties should agree the sum for which judgment should be entered in respect of the period 6 to 17 May 2010 consistent with my reasons. I will stand the proceedings to hear the parties on this and the question of costs.

I certify that the preceding one hundred and nine (109) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.
Associate:
Dated: 12 November 2010

Citation:		STX Pan Ocean Co Ltd v Bowen Basin Coal Group Pty Ltd (No 2) [2010] FCA 1240
Parties:		STX PAN OCEAN CO LTD v BOWEN BASIN COAL GROUP PTY LTD (ACN 141 187 760), DAVID JOHN THOMSON and BEACH BUILDING AND CIVIL GROUP PTY LTD (ACN 081 893 414)
File number:		NSD 561 of 2010
Judge:		RARES J
Date of judgment:		12 November 2010
Catchwords:		ADMIRALTY – contract of affreightment – voyage charterparty – payment of freight and load port demurrage due within five banking days after signing and release of bills of lading – time when charterer defaults CONTRACT – TRADE AND COMMERCE – whether representations made by conduct of entry into contract – whether by entering into or signing contract party represents it is and will be ready, willing and able to perform all obligations at time performance is and after it becomes due – where standard-form contract, such as charterparty, not contain such term – use in contract in international trade and commerce – obligation to be ready, willing and able to perform – actual breach established by default in performance – anticipatory breach only established if party actually could not perform at all TRADE PRACTICES – misleading and deceptive conduct – admiralty and shipping – charterparty –whether officer of charterer made personally, or at all, representation that charterer ready, willing and able to perform both at time of contract and when performance would be due in future – representation not an express or implied term of contract – whether representation made by conduct of negotiating for and signing contract – allegation that party unable ever to perform, or not ready, willing and able to perform, its obligations as and when they fell due at the time of entry into charterparty – allegation must be proved in fact not supposition – Trade Practices Act 1974 (Cth) ss 75B, 52, 82 TRADE PRACTICES – misleading and deceptive conduct – damages – false representations as to charterer’s ability to pay hire under voyage charterparty after default in payment – shipowner induced to keep charterparty on foot – measure of damage DAMAGES – misrepresentation as to readiness, willingness and ability to perform – shipowner induced to enter into charterparty or keep it on foot after default – distinction between damages in tort and contract – measure of damages under s 82 of the Act – whether damages in tort for loss opportunity to earn freight, demurrage and other entitlements assessed at the rates agreed to under charterparty – demurrage and other rates in charterparty not appropriate guide of a vessel’s earning capacity in market – no evidence of market or alternative charter rates
Words and Phrases:		“ready, willing and able” – “within five (5) banking days”
Legislation:		Evidence Act 1995 (Cth) s 140(2) Trade Practices Act 1974 (Cth) ss 75B, 52 and 82
Cases cited:		Admiralty Commissioners v S.S. Valeria [1922] 2 AC 242 followed Afovos Shipping Co SA v Romano Pagnan & Pietro Pagnan [1983] 1 WLR 195 applied Australian Woollen Mills Pty Ltd v The Commonwealth (1954) 92 CLR 424 applied Briginshaw v Briginshaw (1938) 60 CLR 336 applied Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 applied China National Foreign Trade Corporation v Eviogia Shipping Co SA of Panama (The Mihalios Xilas) [1979] 1 WLR 1018 applied Commercial Banking Company of Sydney Ltd v R H Brown & Co (1972) 126 CLR 337 applied Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission (2007) 162 FCR 466 applied Compania Naviera General SA v Keramet al Ltd (“The Lorna”) 1 [1983] 1 Lloyd’s Rep 373 applied Dias Compania Naviera SA v Louis Drefyus Corporation (“The Dias”) [1978] 1 referred to Ermogenous v Greek Orthodox Community (2002) 209 CLR 95 Admiralty Commissioners v S.S. Valeria [1922] 2 AC 242 applied Foran v Wight (1989) 168 CLR 385 referred to Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 applied Gould v Vaggelas (1984) 157 CLR 215 applied Hamilton v Whitehead (1988) 166 CLR 121 cited Houghton v Arms (2006) 225 CLR 553 applied Jones v Dunkel (1959) 101 CLR 298 applied Mardorf Peach & Co Ltd v Attica Sea Carriers Corporation of Liberia [1977] AC 850 referred to Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 270 ALR 204 applied Morton v Hampson [1962] VR 364 referred to Peter Turnbull& Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd (1953) 90 CLR 235 distinguished Scandinavian Trading Tanker Co AB v Flota Petrolera Ecuatoriana (The “Scaptrade”) [1983] 2 AC 694 followed SIB International SRL v Metalgesellschaft Corporation (The “Noel Bay”) [1989] 1 Lloyd’s Rep 361 referred to Stanton v Richardson (1872) LR 7 CP 421 referred to Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245 applied Thomas v Lambert (1835) 3 Ad & El 61 applied Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 distinguished Union of India v Compania Naviera Aeolus SA [1964] AC 868 referred to Universal Cargo Carriers Corporation v Citati [1957] 2 QB 401 applied Yorke v Lucas (1985) 158 CLR 661 applied
Date of hearing:	1 July, 6 July, 13 October 2010
Place:	Sydney
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	109
Counsel for the Plaintiff:	P E King
Solicitor for the Plaintiff:	Hicksons
Counsel for the Defendants:	A Morris QC and G Carolan
Solicitor for the Defendants:	Worcester & Co

IN THE FEDERAL COURT OF AUSTRALIA
IN ADMIRALTY
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 561 of 2010

JUDGE:	RARES J
DATE OF ORDER:	12 NOVEMBER 2010
WHERE MADE:	SYDNEY

JUDGE:	RARES J
DATE:	12 NOVEMBER 2010
PLACE:	SYDNEY

*Yong An 2*	USD
(a)	Hire paid by STX to owners of vessel at USD24,000 per day (71.979 days)	1,727,500.00
(b)	Bunkers consumed	403,807.00
(c)	Port charges - Kwinana - Shanghai Total Less payment (net of bank charges) Total for Yong An 2	43,840.86 46,707.00	90,547.86 2,221,854.86 (499,980.00) 1,721,874.86
*Izola*
(a)	Hire paid by STX to owners of vessel at USD19,500 per day (43.951 days)	857,052.09
(b)	Bunkers consumed Total for Izola	182,180.59 1,039,232.68
Total for both vessels		2,761,107.55