New Zealand China Clays Limited v Tasman Orient Line C.V. HC Auckland CIV 2002 404 3215

[2007] NZHC 2087

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2002 404 3215

BETWEEN  NEW ZEALAND CHINA CLAYS LIMITED

First Plaintiff

ANDIMERYS MINERALS JAPAN KK Second Plaintiff

AND  TASMAN ORIENT LINE C.V.

Defendant

CIV 2002 404 3216

AND BETWEEN            NEW ZEALAND DAIRY BOARD First Plaintiff

ANDNESTLE KOREA LIMITED Second Plaintiff

ANDCHONG KUN PHARMACEUTICALS Third Plaintiff

ANDNIPPON NZMP LIMITED Fourth Plaintiff

ANDMAEIL NEW ZEALAND CHEESE COMPANY LIMITED

Fifth Plaintiff

ANDDONG SUH FOODS CORP Sixth Plaintiff

AND  CHOHEUNG CHEMICAL IND. CO.

LIMITED Seventh Plaintiff

AND  TASMAN ORIENT LINE C.V.

Defendant

NZ CHINA CLAYS LTD AND ANOR V TASMAN ORIENT LINE C.V. HC AK CIV 2002 404 3215  31

August 2007

CIV 2002 404 3217

AND BETWEEN             ALLIANCE GROUP LIMITED First Plaintiff

AND  ZHEJIANG FUBANG GROUP CO.

LIMITED Second Plaintiff

ANDSHIN YANG LEATHER CO. LIMITED Third Plaintiff

ANDSHIN OH CO. LIMITED Fourth Plaintiff

ANDDSI COMPANY LIMITED Fifth Plaintiff

ANDKWANG SUNG HIGH-TECH CO LIMITED

Sixth Plaintiff

ANDONG SEO TRADING CO LIMITED Seventh Plaintiff

ANDNEW ASIA TRADING CO. LIMITED Eighth Plaintiff

AND  TASMAN ORIENT LINE C.V.

Defendant

CIV 2002 404 3218

AND BETWEEN            PPCS LIMITED First Plaintiff

AND  SUNGRIM ENTERPRISE CO.

Second Plaintiff

ANDKWANG SUNG HIGH-TECH CO LIMITED

Third Plaintiff

2

ANDSHINYANG LEATHER CO LIMITED Fourth Plaintiff

ANDSHIN OH CO LIMITED Fifth Plaintiff

ANDSUNG JIN NEO TECHNO LIMITED Sixth Plaintiff

AND  TASMAN ORIENT LINE C.V.

Defendant

Hearing:         9, 10, 11, 14, 15, 16, 17 and 18 May 2007

Counsel:Philip Rzepecky with Matthew Flynn and Vanessa Orange for plaintiffs

Bruce D Gray QC with Neil Beadle for defendant

Judgment:      31 August 2007 at 4:00pm

JUDGMENT OF WILLIAMS J

This judgment was delivered by

Hon. Justice Williams on

31 August 2007 at 4:00pm

pursuant to Rule 540(4) of the High Court Rules

……………………………..

Registrar/Deputy Registrar

Date: ……………………...

AThe plaintiffs are entitled to judgment against the defendant for breach of contract and breach of bailment.

BAlthough the quantum of the claim is agreed, the impact of that finding on the limitation fund may require a further hearing.

C        There will be a telephone conference with counsel on Tuesday, 30 October

2007 at 9:00am to discuss costs and the future conduct of the case unless counsel advise beforehand that no such conference is required.

3

TABLE OF CONTENTS

Paragraph

Issues and Introduction  [1]

The pleadings summarized  [6]

Facts

(1)      Tasman Pioneer  [17] (2)      Voyage to anchoring  [26] (3)      After Anchoring  [46] (4)      Salvage  [58] (5)      Photographs  [71]

Evidence

(1)      Captain Hernandez’s actions  [78] (2)      Salvage  [84] (3)      Naval Architects  [104]

Submissions:

(1)      Plaintiffs  [126]

(2)      Defendant  [156]

Discussion:

(1)       What  should  or  would  those  actually  or  notionally  involved  have done, and when?  [181

]

(2)      Were Captain Hernandez’ actions in the

“navigation” or “management” of the ship?  [215]

(3)      For Art 4 and R 2(a) of the Hague-Visby Rules to exempt

carriers must any act, neglect or default in the navigation    [227]

and management of the ship be bona fide for those purposes?

(4)      Vicarious Liability  [243] (5)      Unseaworthiness  [250] (6)      New Zealand Dairy Board claim  [296]

Result  [306]

ANNEXURES

Annexure 1Map of relevant part of Japan and most of the towns mentioned in this judgment.

Annexure 2    Relevant part of British Admiralty Chart 651/Japan Chart 151
Annexure 3    Part of Japanese chart showing actual anchorage

Annexure 4    Starboard bow c 0920 hrs Annexure 5  Starboard bow c 1530 hrs Annexure 6 Port side c 1550 hrs Annexure 7     1218 hrs photograph

Issues and Introduction

[1]      The plaintiffs all had interests in cargo stowed on deck on the ship Tasman Pioneer when she suffered a casualty entering the Inland Sea of Japan at 0255 hrs local time on 3 May 2001.

[2]      On that date, Tasman Pioneer was owned by Rimba Shipping Co Ltd, time chartered on an NYPE form to Tasman Orient Line (Cyprus) Ltd and sub-time chartered to Tasman Orient Line CV, the defendant. a Dutch corporate partnership. The time charter and sub-time charters were “back to back”.  Throughout the period with which this case is concerned, Tasman Pioneer was managed by Technomar Shipping Inc of Athens, Greece.

[3]      Put very broadly just to set the scene, cargo interests assert that had Captain Hernandez,  master  of  the  Tasman  Pioneer,  notified  relevant  authorities  of  the casualty soon after it occurred, their on-deck cargo would have suffered no damage as salvors would have been able to save it from being wetted or inundated.   The plaintiffs assert delays in Captain Hernandez notifying the authorities were such that it was not until 1000 hrs on 3 May 2001 that salvors were engaged.  Had they been deployed earlier, their on-deck cargo would have been saved.

[4]      The claims in CP461/02, 462/02, 463/02 and 464/02 are USD$11,252.48, USD$498,737.26, USD$1,602,945.72 and USD$1,106,334.04 respectively, a total of USD$3,108,545.80.   By the time the hearing ended, there was no issue as to the quantum of the claims.   For  reasons which will appear, it is necessary to  give separate consideration to a claim in CP462/02 by the New Zealand Dairy Board for USD$187,301.87 for dairy products stowed in refrigerated (“reefer”) containers damaged by heat through lack of continuous generator power to the integral refrigeration units.

[5]      Though quantum is not an issue the claims may require further hearing given General Average has been declared, there are claims for salvage following a London arbitration,  and  Tasman  Orient  claims  the  benefit  of  a  tonnage  limitation  fund

constituted under the Maritime Transport Act 1994 – itself the subject of an earlier judgment in this claim (The “Tasman Pioneer” [2003] 2 Lloyds Rep 713 also reported sub nom Tasman Orient Line Ltd CV v Alliance Group Ltd [2004] 1 NZLR

650).   Some original plaintiffs have settled which also affects the quantum of the limitation fund available.

The pleadings summarised

[6]      The plaintiffs bring conventional cargo claims alleging breach of bailment and contract under bills of lading issued by Tasman Orient.  They also assert that, at the time of the casualty, the ship was unseaworthy.

[7] Tasman Orient challenges the plaintiffs’ claims on causation and asserts it is protected by the exemption contained in Art.4 R 2(a) of the Hague-Visby Rules (strictly, the Amended Hague Rules) incorporated into New Zealand law by s 209 of the Maritime Transport Act and the Fifth Schedule. Art 4 R 2(a) reads:

2.Neither  the  carrier  nor  the  ship  shall  be  responsible  for  loss  or damage arising or resulting from –

(a)       Act, neglect or default of the master mariner, pilot or the servants   of   the   carrier   in   the   navigation   or   in   the management of the ship.

[8]      As is to be expected, the pleadings by all plaintiffs followed a similar pattern, with the issues thus far identified being principally derivable from the plaintiffs’ replies to the statements of defence and Tasman Orient’s further defence to the replies.

[9]      Taking  the  NZ  China  Clays  and  Imerys  Minerals  Japan  KK  claim  as  a template, the second amended statement of claim pleaded the plaintiffs’ positions and asserted they were both parties to the bills of lading with rights of suit vested in overseas plaintiffs under the Mercantile Law Act 1908 s 13B.

[10]     Initially, Tasman Orient put all plaintiffs to proof as to their title to sue but by the end of the hearing it was accepted that all plaintiffs were entitled to sue and accordingly that aspect of the defence was not pursued.

[11]     Then, after pleading the brief factual background, the plaintiffs set out their claims against Tasman Orient in breach of contract or bailment under the bills of lading and the Hague-Visby Rules.  The plaintiffs particularly rely on Arts 3(1)(2) of the Hague-Visby Rules and assert Tasman Orient failed to exercise due diligence to make  Tasman  Pioneer  seaworthy, an allegation particularised by reference to claimed corrosion and wasting, later considered in detail. The plaintiffs plead Tasman Orient failed to care for their cargo properly, subjected it to seawater damage and failed to deliver it in good order and condition. Tasman Orient originally relied on additional provisions in the bill of lading but these fell away by the completion of the hearing and, while acknowledging the carriage was subject to the Hague-Visby Rules, it claimed to be entitled to rely on Art 4 R 1 exempting carriers and the ship from liability arising from unseaworthiness (unless caused by want of due diligence on the part of the carrier “to make the ship seaworthy”) and Art 4 R 2. It also denied it was a bailee for reward.

[12]     The parties each assert that the burden of proof of the defendant’s entitlement to either or both of those exemptions lies on the other.  That became a trial issue.

[13]     The plaintiffs’ third cause of action was in negligence, asserting Tasman Orient owed them a duty to exercise a carrier’s normal skill and care.  They plead res  ipsa loquitur.  Again, the defendant asserted its duties were limited by the bill of lading and the Hague-Visby Rules and denied res ipsa loquitur applied.   It also raised its right to limit its liability for claims arising out of the limitation decree.

[14]     The  plaintiffs’  replies  to  the  defence  cited  the  Hague-Visby  Rules  and particulars provided by Tasman Orient and expanded to a significant degree on the factual allegations including asserting that Captain Hernandez’s actions were, in the circumstances on 3 May , reckless before the grounding and that he misconducted himself in a number of particularised ways following it.  As a result, the plaintiffs assert, Captain Hernandez’s actions and omissions were neither made bona fide nor for the navigation or management of the ship and his misconduct  caused  more extensive flooding and damage than would otherwise have occurred.

[15] Tasman Orient’s defence to the reply noted the defendant “accepted that the grounding was caused by an act, neglect or default in the navigation of the ship by Captain Hernandez”. That was “sufficient to bring the grounding within the exemption contained in Art 4 R 2(a) of the Hague-Visby Rules”. Most of the factual allegations were admitted but the allegation that Captain Hernandez’s actions were reckless was denied. Some actions after the grounding were also admitted.

[16]     The plaintiffs particularised their allegation of the vessel’s unseaworthiness by saying the ship was unseaworthy at voyage commencement because of particularised corrosion and at the casualty.   As a result, parts of the ship flooded when they should have remained watertight and the ship sank further and faster than would otherwise have been the case.  That led to their cargo damage.  All of that is denied.

Facts

(1)       Tasman Pioneer

[17]     As that review of the pleadings shows, by the time of the hearing much of the factual background was not contested.

[18]     Tasman Pioneer was built as the Larch by the Hayashikane yard in Japan in

1979 as yard number 896.  Named the Pioneer Ark on 23 November 2000, the date of the NYPE time charter, she was re-named Tasman Pioneer though, as will be seen, the circumstances in which and the time at which that occurred became a matter of contention.   She was a typical tween deck, multi-purpose general cargo vessel built to NK Class Rules but under Germanischer Lloyd Class at the casualty. Her length overall was 166m, beam 27m and depth 14.1m.  She had a service speed of about 16 knots.

[19]     Navigation, accommodation and engine spaces were  arranged  aft of  four cargo holds.  The foremost hold, no.1, was in the fo’c’sle deck with the remainder in the main deck.   Evidence differed slightly as to her  gross and net tonnage but witnesses agreed she was 21,115 tonnes deadweight at extreme summer time draft

of 9.8175m.  There were crane houses and gantries between the holds.  Because it was used as a reference point in interpreting the photographs of the ship in semi- flooded state, it is pertinent to note that forward of no.1 hold was a gantry portal cum light and communication tower which the expert witnesses described as a “goal-post like structure” containing a crosstree and built approximately between frames 200 and 205 slightly forward of the mid-point of the fo’c’sle deck.  All upper and lower cargo holds were divided by tween deck hatches.  No.1 hold had a single and nos. 2,

3 and 4 holds twin main deck and tween deck hatches with the hatch covers and fo’c’sle deck fitted to carry 20 and 40 foot containers.

[20]     The bridge had a conventional range of equipment for an ocean-going vessel including GPS, two radars, an automatic pilot with off-course alarm, course recorder, two VHF radios and an electro-magnetic speed log.

[21]     Tasman Pioneer was double bottomed extending from aft to the forward end of the no.1 hold with deep tanks arranged between the tanktop and tween decks at the fore end of holds 3 and 4 and side tanks between the tanktop and tween decks in hold 3 and in J format in hold 2.  The deck crane houses included access hatches to cargo holds and various cargo hold bilge pipes and a double-bottomed tank sounding pipe.  Mr Boyd, a naval architect called by Tasman Orient, said the ship had a total water ballast capacity of 6330.39mt carried in the forepeak tanks (“FPT”) nos. 1C (“centre”), 2P&S (“port and starboard”), and 4 P&S, side tanks amidships (“SWBT”) no.3 P&S and the aft peak tank (“APT”) with freshwater totalling 282.18mt carried in aft tanks (“FWT”) nos. 1 and 2 P&S.  Fuel oil grade C was carried in the double- bottomed tanks (“FOT”) nos. 2 P&S, 3 P&S and 4C while grade A was carried in the engine room FOT nos. 5 P&S and 6S with a combined total of 2006.76mt.

[22]     Utilising the capacity table in the vessel’s Trim & Stability (“T and S”) Book, Mr Boyd noted the hold grain capacities, at 98% of moulded volume for holds 1, 2, 3 and 4, totalled 34,083.55m3.

[23]     Both Mr Colman, the naval architect called by the plaintiffs, and Mr Boyd discussed the ship’s pumping capacity.

[24]     Drawing  on  the  ship’s  General  Arrangement  and  on  Tasman  Orient’s response to interrogatories which varied from it, Mr Colman accepted the ship had two main pumps which could be applied to the bilge and ballast tanks and could thus pump water from the cargo holds through bilge wells, with each having a capacity of

180 tonnes per hour with a zero head and up to 450 tonnes per hour with a 30m head. Their total capacity working together through the bilge piping was likely to have been about 300 tonnes per hour, that being an approximation based on the 150mm diameter of the bilge main and the maximum likely speed of about 5m per second at which water could be pumped with the pumps working in parallel.

[25]     Mr Boyd’s view was that with the two pumps working in parallel at zero head the capacity was about 250mt per hour and about 615mt per hour on a 30m head.   Because the operational heads for pumping water from the ship after the grounding would not, in his opinion, “have been much above zero”, Mr Colman thought the capacity of the two pumps would be about 200 tonnes per hour if the bilge system was adequate, but about 300 tonnes per hour when working together with the limitation of the bilge main diameter.   Mr Boyd calculated that “with rapid ingress and correspondingly greater amounts of floodwater, a higher rate should be used” even towards the top of his estimated capacity.

(2)       Voyage to Anchoring

[26]     After a somewhat eventful voyage, later detailed, from New Zealand, Tasman Pioneer left Yokohama, Japan, at about 2000 hrs on 1 May 2001 bound for Busan, Korea – about 642nm -  intending to sail west along Japan’s Pacific coast and then through Bungo Suido, the Japan Inland Sea – one of the world’s busiest shipping areas according to Captain Goodrick - and Kanmon Strait before crossing Korea

Strait to her destination.1   Her e.t.a. was about 1700 hrs on 3 May.  Mr Gallano, her

Second Mate, said her departure drafts were 7.72m forward and 7.78m aft though when  Mr  Colman  modelled  the ship’s  loading  condition  on  departure  from  the stowage plan, the loading computer printout and assessments of the ballast and fuel tank contents, he found minor discrepancies between Mr Gallano’s reading, the

1     Annexure 1 is a map of the relevant part of Japan and most of the towns mentioned in this judgment.

ship’s  log  and  his  computer  model  of  her  stability.     They  were,  however, insignificant in a vessel of her weight and he concluded that she had “substantial reserves of stability in the intact  condition”.

[27]     It appears Captain Hernandez was under a certain amount of pressure from Tasman Orient and Technomar to maintain his schedule: “your best speed is requested”. One port had already been deleted.  This was a route on which Tasman Orient hoped to build up a regular liner service. Kanmon Strait is a narrow passage with  significant  current.     Compulsory  pilotage  is  required.     The  master  was concerned to arrive at the Strait at a favourable point of the tide.

[28]     About 1000 hrs on 2 May 2001 the master realised the ship was behind schedule and decided that, rather than passing west of Okino Shima, the usual route for vessels entering Bungo Suido from the south, he would shorten steaming time by

30-40 minutes by taking Tasman Pioneer between the island of Biro Shima and the promontory  of  Kashiwa  Shima,  the  south-western  extremity  of  the  island  of Shikoku.2   He told Mr Gallano and the third mate, Mr Cisudol.  They opposed taking such a restricted passage at night but Captain Hernandez insisted.  He confirmed his direction about 2200 hrs on 2 May.  Although the passage is narrow, he later told Japanese coastguard investigators that:

I have experienced passage through the channel several times in the past when I was on board a vessel of about 4000 gross tones and I also sailed once southward (through the Channel) on board my vessel.

[29]     Captain Goodrick, an experienced master mariner called by the plaintiffs, acknowledged that the Japan Pilot (Vol.II 7th  ed. 1979 p171, l 68) says:   “The channel  between  Okino  Shima and  Oshime  Hana  is  deep  and  is  used  by large vessels” but that may refer to the channel west of Biro Shima, not that to the east chosen by Captain Hernandez, and in any case Captain Goodrick cautioned against too  literal  a  reliance  on  the  Japan  Pilot’s  reference  to  “large  vessels”:    that

2   Annexure 2 reproduces the relevant part of British Admiralty Chart 651/Japan Chart 151 of the area under discussion. Saki = point: Wan = bay or gulf: Shima = nose.

description may not have been intended to encompass vessels as large as Tasman

Pioneer.

[30]     After changing course to 278o  at 0140 hrs on 3 May 2001, as directed the master was woken at 0215 hrs.  He took command on the bridge at approximately

0225 hrs.

[31]     At 0250 hrs the master changed course to 308o to transit the passage.  At that stage Tasman Pioneer was making 15 knots into a nor’wester of about 36 knots and a 1m swell.  The sky was completely dark with visibility down to about two miles and with Biro Shima slightly on the port bow about 1.2 miles distant.  About two minutes  after  the  course  change,  Captain  Hernandez  ,  who  was  operating  the starboard no.1 radar, lost all images.   He instructed Mr Gallano to reconfigure it. Whilst he was doing so, at about 0253 hrs, he heard Captain Hernandez order “hard port” and shortly thereafter, when Mr Gallano reconfigured the radar, it showed Biro Shima at a distance of only about four cables (800 yards) on the ship’s port side.  He checked from the port wing and shouted to the master “Go starboard”.   Captain Hernandez gave the order to a deckhand, Mr Fadley (also ‘Fadori’) who was steering manually but after about five seconds – and about two minutes after the order “hard port” – the crew felt an impact which Mr Fadley described as two impacts from the bow which were “like grinding vibrations” each of about 2-3 seconds duration with a similar interval between.

[32]     Though, of course, neither master nor crew knew it immediately, the outer hull forward suffered significant damage in the impact.  Photographs following dry dock inspections and the naval architects’ calculations showed significant damage to the forepeak, stem plate, keel plates and strakes involving flooding of the FPT, WBTs no.1C and no.2, principally to port, though the starboard tanks were also damaged, and extending forward from about frame 156, approximately the middle of no.2 cargo hold to frame 215 about mid-point of the FPT.   Seawater would have been unlikely to have gained ingress into the holds had it not been for the fact that nos. 1 and 2 cargo hold bilge wells were also damaged in the casualty.

[33]     However, even though the crew were unaware of the extent of the damage, they must have known almost immediately that it was highly likely to have been significant.  Not only were the crew’s descriptions of the ranging impact with the sea bottom graphic, but Mr Gallano told investigators that from a speed of 15 knots, the

22,000 tonne Tasman Pioneer was immediately slowed to 6 or 7 knots.  An engineer, Mr Trazona, said the main engine revolution rate of about 120 rpm at cruising speed dipped as a result of the impact to about 90 rpm, gradually returning automatically to

120 rpm over the next 5-7 minutes.

[34]     Further, within what Mr Gallano thought was about two minutes after impact, the ship developed a list to port that grew to about 3o  after five minutes and about

8o-10o  in 5-10 minutes.  As a result, all hands were roused, WBT 3S and 4S were

flooded to correct the list and pumping operations commenced.  WBT 2P was found to be flooded.  Shortly afterwards it was found that nos. 1 and 2 cargo holds were also taking water and further pumping was undertaken.

[35]   The defendant admits that following the grounding Captain Hernandez continued to steam at full speed, failed to alert the Japanese Coastguard or seek other assistance, and failed to report the location of the grounding to the coastguard or, for some hours, to Technomar.  Captain Goodrick took the view:

When a ship the size of the Tasman Pioneer collides with the land or a rock to the extent that it is stopped on its course, then all aboard know that they must immediately deal with a very serious crisis.  Master Mariners such as Captain Hernandez and the officers on board the Tasman Pioneer are highly trained professionals.   The risk of collision, grounding, fire or some other catastrophe is always a possibility when ships put to sea.   Accordingly, a competent well trained master mariner such as Master Hernandez makes very deliberate decisions after a grounding which should always firstly be in the interests of lives at risk and then for the safety of the vessel and its cargo.

[36]     Captain Goodrick said that following such a grounding the steps any prudent master would undertake include notifying the Japanese coastguard of the incident with the ship’s position and condition.   Not only was that common-sense, such actions  form  part  of  a  mariner’s  training  under  SOLAS  and  ships’  safety management systems.  Though he disagreed on the immediacy of the obligation to report, Captain Landelius, a master mariner called by Tasman Orient who became

the Specialty Casualty Representative (“SCR”) for this casualty, did not disagree with Captain Goodrick’s view as to a master’s obligations after a casualty.

[37]     It therefore becomes pertinent to consider what Captain Hernandez did and, to the extent it is in evidence, why.

[38]     In the days immediately after the casualty, the coastguard interviewed all members of the crew, several on a number of occasions.

[39]     That included Captain Hernandez who said, on 8 May, that when the radar image disappeared so the ship’s accurate position was unknown in the narrow channel, it :

“…  threw  me  into  a  panic  and,  under  the  impression  that  I  still  have sufficient distance to Biro Shima, I gave an order to the able seaman “hard port”.”

[40]     On 14 May he repeated that statement saying that he “gave the order hard port out of hope to get out of this narrow and dangerous water” and that “if the vessel had not ported and sailed straight on the course, she could have safely passed without causing the recent accident”.  Once an 8-9o list to port developed about five minutes after the grounding, crew members reported to him that WBT nos. 1P and

2P were flooded as a result of which he gave orders to flood WBT 3 and 4S and to pump out WBT 2P.  That corrected the list to about 2o.  He continued :

Around one or two minutes after the shock of grounding, I checked the ship’s position by radar and I learned that she touched bottom somewhere around Biroh Shima.  Following that, I decided to anchor in waters between Yura Misaki and Yoko Shima, as you know, and actually we traveled until reaching there without reducing speed and then anchored. 3

The reason I did not go to Sukumo Wan (cove) or somewhere nearby, is that since there is a need to change fuel over from Bunker [possibly ‘Fuel’: translator] Oil C to Bunker Oil A and for that operation it takes 30 to 40 minutes, I decided I would go to south of Yura Misaki.

[41]     A number of comments require to be made concerning Captain Hernandez’s brief description of what occurred between the grounding and anchoring.

3    Annexure 3 is part of a Japanese chart showing Tasman Pioneer’s actual anchorage.

[42]     The  first  and  most  important  is  that,  prior  to  the  crew  being  taken  by coastguard patrol boat from Tasman Pioneer after anchoring, Captain Hernandez, possibly sensing loss of a lengthy career at sea, instructed the crew to lie to the coastguard investigators with a view to persuading them the ship passed west of Okino Shima and the impact had been with an unidentified floating object.   The crew, initially at least, followed his order to the point where Mr Gallano, on Captain Hernandez’s specific instructions, erased the course actually sailed from the ship’s chart and substituted a false course purporting to show Tasman Pioneer passing west of Okino Shima.  It was only in subsequent interviews that the crew acknowledged to the investigators what actually happened.   That led, in due course, to Captain Hernandez following suit (and his later prosecution in Japan).

[43]     Secondly, the evidence was that the  conditions during Tasman Pioneer’s transit from Biro Shima to the anchorage remained as previously so the ship, despite the damage and the water in her tanks and holds, was proceeding at 15 knots, its top speed, into a north-west near gale of some 35 knots with swells estimated at around

2m in the more exposed parts of the passage.

[44]     Thirdly, Captain Goodrick estimated the distance steamed between grounding and anchorage at about 22 nm.   The ship anchored, according to Mr Gallano, at

0530 hrs.    That  may be  wrong.    The  ship’s  bell  book  for  3  May showed  that following an “emergency manoeuvre” the ship’s engines were at full speed ahead until  0455  hrs,  then  astern,  and  then  stopped  at  0503  hrs.    That  reads  like  an anchoring sequence.

[45]     Fourthly, although the evidence as to exactly what occurred and when is somewhat imprecise, it seems the crew continued to take soundings or ullage in the sounding pipes to the holds and bilges and may have continued to operate the ship’s pumps throughout the rest of the voyage.  Mr Fadley said when he first went up to the bow a few minutes after the collision “water was squirting from the no.2 ballast tank air relief pipe” though he found no leaks into the FPT at that juncture but, after sounding, established there was already a lot of water in nos. 1 and 2 cargo holds. The  list  to  port  increased  and  it  “looked  as  though  the  bow  was  sinking”. Mr Trazona operated the ballast pump to pump seawater into WBT 2S and 4S and

then, about four minutes later, to pump seawater out of the WBT 2P.  The ship was listing 5o to port after anchoring.

(3)             After Anchoring

[46]     Tasman Pioneer never contacted the coastguard at any time.   Coastguard records show it first learned of the casualty when it received a telephone call at

0715 hrs on 3 May from a passing boat advising of a vessel sailing north through Bungo Suido listing 5-10o.  That caused the coastguard to send a patrol boat which came upon Tasman Pioneer at anchor about 0910 hrs “with her aft part raised and trimmed  by  the  head”  and  “inundated  in  tanks  etc  in  the  forward  section  … increasing its list to port”.

[47]     Captain Hernandez told investigators that “after anchoring, I first contacted my company” as it required.  That communication was a telex sent to Technomar. The exact time and date it was sent remains unclear.   The telex is dated “01-05-02

20:31-20:34 S&F” (Store Forward) and records its delivery.  Captain Goodrick made the point that it is difficult to align that date or timing with the time of the casualty or time differences between Japan and Greece.   The likelihood is the telex was, as Captain Hernandez said, sent after anchoring but how long cannot be determined, though  it  must  have  been  before  0850  hrs,  the  time  Technomar  first  contacted Nippon Salvage.  It read:

1 May 2002  20:31-20:34  hrs

URGENT URGENT URGENT

REGRET TO INFORM VESSEL DEVELOP EXCEESIVE [SIC] LIST AT

0340H/3RD. SO FAR FOLLOWING PRESENTLY WAS OBSERVED:

1. HOLD BILGE NO.2 HAD MUCH WATER AND FOUND AT 0430H W/ ABT. 3 METERS WATER I HOLDS.

2.   BALLAST  NO.2  PORT  HAD  BEEN  FOUND  TO HAVE MORE WATER AND SUDDENLY BECOME FULL.

3.   STILL   CHECKING   ALL   TANKS   AND   WILL REVERT.

4.   ALSO OUR HOLD  NO.1 HAD BEEN  FOUND  TO HAVE WATER.

[48]     In addition to the question of the telex’s timing and the delay in notifying management, Captain Goodrick noted the telex gave no indication of the cause of the damage and understated it.

[49]     A  telex  from  Technomar  to  the  ship  dated  3  May  2001  at  2:08pm, presumably Greek time, said:

FURTHER TELEPHONE CONVERSATION PLEASE NOTE THAT WE CONTACTED SWEDISH CLUB REPRESENTATIVES IN TOKYO WHO WILL CONTACT NIPPON SALVAGE TO ARRANGE A TUG BOAT TO COME TO YOUR POSITION … “

going on to detail precautions Captain Hernandez should take which echoed those

Captain Goodrick said all masters should take as soon as possible after a casualty.

[50]     A further telex, this time sent by Technomar on 3 May 2001 and timed at

0411 hrs said:

SALVAGE TUG “SEIHA MARU” OF NIPPON SALVAGE LEAVING MOGI [sic.] SHORTLY TO COME TO YOUR ASSISTANCE.

IF YOU ARE REQUESTED BY SALVAGE MASTER YOU ARE AUTHORIZED TO SIGN LLOYD’S OPEN FORM.

SALVAGE TUG REQUIRES 1.5 HOURS TO MOBILIZE AND 7 HOURS TO REACH YOUR POSITION.

PLS INVESTIGATE POSSIBILITY TO RUN VESSEL AGROUND WITH FORWARD   PART   TO   AVOID   SINKING   IS   FORWARD   TRIM INCREASE AND ADVISE BY PHONE.

and on the same day, timed at 0452 hrs, Technomar telexed Captain Hernandez that it had contacted the charterers and Tokyo agents in the following terms:

ADVISED BY MASTER THAT AT ABOUT 2000 HRS GMT 02/05 FELT A SUDDEN VIBRATION AND LATER THE VESSEL TOOK A LIST.

HE SOUNDED THE TANKS AND FOUND THAT WATER WAS ENTERING  NO.1  DOUBLE  BOTTOM.    HOLD  NO.1,  SIDE  TANKS NO.3 PORT AND HOLD NO.2.

THE MASTER BELIEVES THAT VESSEL HIT AND UNIDENTIFIED OBJECT.

AT  ABOUT  2100  HRS  GMT  02/05  THE  VESSEL  ANCHORED  AT POSITION LAT. 32 59, LONG: 132.24

?  OF WATER IS INCREASING AND PRESENT DRAFTS ARE: FORE: ABOUT 14.0 METERS

AFT:    ABOUT 5.6 METERS.

ADVISED JAPANESE COAST GUARD OF INCIDENT. NO POLLUTION

ADVISED  HULL  UNDERWRITERS  WHO  ARRANGED  THE SALVAGE TUG ‘SEIHA MARU’ OF NIPPON SALVACE TO PROCEED TO THE VESSEL’S POSITION AND RENDER ASSISTANCE ON LLOYD’S OPEN FORM TERMS.

[51]     Captain Kuroki, salvage master and deputy general manager of the Moji 4 branch of Nippon Salvage, said that on 3 May the company’s large tug Seiha Maru No.2 and the salvage barge Masakuni were at the Moji base with a smaller tug, Hayashio Maru No.2, on station at Imabari 5 in the Inland Sea.  Nippon Salvage is a large operation on watch 24 hours per day 365 days per year at Moji.

[52]     At 0830 hrs on 3 May 2001, a national holiday in Japan during Golden Week, a Nippon Salvage Moji staff member was telephoned by a dive company based in Kokura which had heard of a casualty in Bungo Suido.   That was followed by a telephone call at 0850 hrs from Mr Glynos of Technomar.   The particulars of the casualty known to Technomar were advised.  Mr Glynos was specifically told Seiha Maru No.2 and its crew were immediately available.  The services of the tug and its crew were repeated in a telephone call to Mr Glynos at about 0910 hrs.   Nippon Salvage said they could reach Tasman Pioneer in about seven hours steaming from Moji.  Captain Kuroki recorded Mr Glynos telling the general manager in the second conversation that the “condition of the vessel was reportedly not serious” and requested an “… offer on another contractual basis, such as daily hire”.  In a further telephone call to Mr Glynos at 0950 hrs Nippon Salvage was given the vessel’s drafts and told she was “heavily by the head”.  Some details of her cargo and Japan agents were given.   By then, Nippon Salvage had commenced mobilizing salvage

4   Moji is on Kyushu in the Kanmon Strait

5   or Imbari

hands.   At 1000 hrs a Nippon Salvage director, Captain Yano telephoned Captain Landelius  –  a  salvage  master  employed  by the  Swedish  Club,  the  P  &  I Club involved - and told him the ship was in a “serious condition according to reports we received from Japanese Coastguard” with nos. 1 and 2 cargo holds flooded, only about 2m freeboard on the fo’c’sle deck and with a 5-6m trim by the head.  A Lloyds Open  Form  (LOF)  2000  “no  cure–no  pay”  salvage  agreement  was  reached  at

1000 hrs on 3 May in that conversation.

[53]     Because this was regarded by Nippon Salvage as a  “severe emergency”, Captain Yano directed full mobilization of the Seiha Maru No.2 and the Hayashio Maru No.2 and their crews but also directed Captain Kuroki to travel by road to the town nearest the casualty and be ferried to the ship by coastguard patrol boat.

[54]     Captain Kuroki and three others, including a diver, left Moji by car at 1150 hrs for Beppu 6  to embark on a coastguard patrol boat and get to the casualty as quickly as possible.  They were delayed with holiday congestion on the roads.

[55]     Nippon Salvage also arranged for the harbour tug Arita Maru to leave Oita on the eastern tip of Kyushu at about 1110 hrs.  It is the nearest port to the casualty with available tugs.

[56]     Seiha Maru No.2 left Moji fully laden with additional salvage equipment and divers at 1125 hrs.  Hayashio Maru No.2 left Imabari with salvage equipment five minutes later.

[57]     Arita Maru arrived off the casualty at 1450 hrs reporting to Captain Kuroki, that “the seawater was cutting the middle way of no.2 cargo hold”.  That is the way Captain Kuroki recorded it in both his daily site reports and in his salvage diary. However, because Tasman Orient placed significant reliance on it, it should also be noted that when Captain Kuroki signed his witness statement on 10 October 2002, probably for the Japanese Marine Accidents Inquiry Agency, he said that the Arita Maru’s report was to the Moji branch of Nippon Salvage that “the casualty was

6   Beppu is on the coast of Kyushu, about 5 miles west of Oita.

heavily down by the head such that the seawater was cutting the mid part of no.2 cargo hold”.

(4)       Salvage

[58]     Captain Kuroki and the three salvage hands left Beppu on a coastguard patrol boat at 1635 hrs and arrived at the casualty at 1835 hrs.  She was lying at anchor on a north-westerly heading into a Beaufort force 5 wind (8mps) with a 1.5m north- westerly swell.  That reduced by 1928 hrs to 1.2m.

[59]     Seiha  Maru  No.2  arrived  at  1915  hrs.    Hayashio  Maru  No.2  arrived  at

2120 hrs.

[60]     Salvage hands went aboard to find the engine room still in order and Tasman Pioneer’s generators running.  At 2000 hrs de-watering the no.2 cargo hold began using three 75mm diameter gasoline pumps with an electric submersible pump of the same diameter operating from 2040 hrs and with the casualty’s pump switched from de-watering the FPT to the no.2 hold at 2047 hrs.

[61]     Divers ascertained the shell plating was fractured over an area of 5-10m from the port bilge strake leading to the bottom of the nos. 1 and 2 cargo holds with the fracture about 15m long and 40cm wide.   There was another ‘u’ shaped fracture about 3m x 2m and several smaller fractures of about 1m x 40cm.

[62]     At about 2200 hrs inspection of the no.3 cargo hold found water leaking from a “pipe where it joined the forward bulkhead”.

[63]     At about 2300 hrs Captain Yano, having been briefed on what had occurred, decided to invoke the SCOPIC clause in LOF 2000 with effect from 0600 hrs on

4 May.

[64]     Ullages in the no.2 cargo hold from 2040 hrs showed the water level was increasing.  De-watering the hold could not stabilize the increase in the ship’s trim by the head.  All salvage hands left the vessel at 0030 hrs on 4 May, by which time the whole of the propellor and most of the rudder were above the surface with the aft

coaming of the no.2 cargo hold and the forward coaming of the no.3 cargo hold level with  the  surface  starboard  and  port  respectively,  the  trim  about  23m  (Captain Kuroki’s figure) down by the head and with the ship on a 4½-5o list to port.

[65]     When work recommenced at 0720 hrs on 4 May the shoepiece was above water and ullage showed the hull had submerged a further 15cm.  During the day air intakes to pipes were sealed.   At 1240 hrs a 50mm diameter electric submersible pump was rigged in the no.3 cargo hold connected in series to a similar sized diesel pump  to  de-water  that  hold.    Efforts  to  pressurize  the  FPT  at  1402  hrs  were suspended at 1427 hrs as “air could be seen to be leaking from the cap of the forepeak tank sounding pipe”.  That was tightened and pressurization recommenced but at 1530 hrs air was noted “leaking from the watertight door of the bosun’s store on the fo’c’sle deck” which meant compressed air was “leaking from the forepeak into the void space and bosun’s store”.   That work stopped at 1752 hrs and pressurization of the no.2 WBT (P) (S) similarly stopped at 1810 hrs, the latter as air bubbles could be seen coming through the submerged hatch covers.  Captain Kuroki decided at that point that it was necessary to unload the containers on the nos. 1 and

2 cargo holds to raise the bow as much as possible and prevent containers floating away.  De-watering of no.3 hold was stopped at 1920 hrs.  The list had reduced to

2-3o.

[66]     On 5 May salvors discovered the forepart had sunk more deeply in the water. Cranes and barges arrived and discharge of the containers began at 0920 hrs.  Fifty- two containers were discharged that day with the salvage cranes and barges needing to manoeuvre to unload successively from opposite sides.   Pressurizing of various tanks, particularly no.2 WBT (P), continued intermittently during the day.  Tasman

Pioneer’s condition improved in that she now had a 2-3o starboard list, the shoepiece

was below the surface and the water line on the port and starboard sides was forward of the aft end of the no.2 cargo hold hatch coaming and at the forward end of the no.3 cargo hold hatch coaming respectively.

[67]     But by 0545 hrs on 6 May the waterline on the main deck had moved 2-3m aft of its previous position.  Pressurizing and discharging containers continued with

59 containers recovered that day.  During the day, corrosion holes were found in the

air pipes for no.3 side WBT (F) (P) (S) which were sealed and water which was

85cm deep in the no.3 cargo hold was pumped out.  Efforts to again pressurize the FPT between 1325-1400 hrs were initially frustrated as a diver inside the bosun’s store found air “coming through an electric cable joint leading to the void space below the bosun’s store”.  That was plugged and pressurizing the FPT recommenced at 1405.  Pressurization was suspended from about 1740 hrs onwards because of the deteriorating sea state and air leakage from the FPT.   At 1533 hrs one of two generators was “stopped to save consumption of diesel oil” but Tasman Pioneer’s generator was “used to supply power to seven reefer containers on the deck of no.4 cargo hold by request of the vessel’s superintendent” and another generator “stored in a container on the deck of no.3 cargo hold … was found operable”.

[68]     On 7 May 2001 when the salvage hands boarded the casualty at 0702 hrs she was found to be further down by the head with the water level having moved aft by

2-3m from the previous day and the no.2 cargo hold hatches either floating or ajar. Pressurizing the various tanks, including the FOT, was recommenced at 0715.  The no.3 cargo hold was de-watered by 0822.

[69]     Some of the numerous adjacent pearl and other marine farms were relocated

–  not  without  difficult  negotiations  and  significant  expense  –  in  readiness  for beaching the Tasman Pioneer, an operation which was accomplished on 10 May

2001 by 0900 hrs adjacent to an onshore riprap.

[70]     Over succeeding days, salvors achieved the difficult, often hazardous, task of unloading cargo from the nos.1 and 2 cargo holds including containers, palletised cargo and cargo stowed loose.  Once the vessel had been temporarily patched on site, beginning on 18 May 2001 she was towed first to Kanmon and then to the Onomichi dockyard for repairs.

(5)       Photographs

[71]     A number of photographs were produced showing Tasman Pioneer at various stages and since, as mentioned, the essence of the plaintiffs’ case is that their cargo would   have   been   saved   had   Captain   Hernandez   alerted   the   coastguard,

owners/managers and salvors as soon as practicable after the grounding, an analysis of the main photographs is appropriate.

[72]     The coastguard, whose principal interest in the casualty was saving life and pollution prevention not salvage, arrived at the casualty about 0910 hrs on 3 May and  remained  on  station  until  1550  hrs  during  which  one  of  its  judicial  police officers, a Mr Igawa, took a series of photographs.  He said that at about 0920 hrs the “bow deck was being pounded with waves that were going over the bulwark and … the bulwark section (painted white) was above water level”.  By 1530 hrs the “water level reached the upper section of the bow section bulwark [and] the bow deck was awash with seawater”.  By about 1550 hrs the “bow section had sunk below water level and it was impossible to make confirmation of the upper section of the bow section bulwark”. Attached are copies of Mr Igawa’s photographs:

a)        Starboard  bow  of  Tasman  Pioneer  at  approximately  0920  hrs; (Annexure 4)

b)       Starboard bow at approximately 1530 hrs;  (Annexure 5)

c)        Port side at approximately 1550 hrs.   (Annexure 6)

[73]     The  most  debated  photograph  was  one  taken  at  12:18pm  on  3 May (Annexure 7).  Although the exact circumstances in which the photograph was taken were not in evidence it appears likely to have been taken by a coastguard helicopter. It  was  in  digital  format  with  the  copies  in  evidence  being  photocopies  of photocopies.  The copy attached may have been enhanced for clarity.

[74]   Though all countenanced caution in interpreting photographs of marine casualties for a variety of reasons including elevation, sea conditions and the like, the experts nonetheless drew certain tentative conclusions as to the state of the ship at the time the photographs were taken and, in particular, how far trimmed by the head she was as a result of the flooding of the FPT, nos. 1 and 2 cargo holds and, possibly the void space above the FPT.   Reading the photographs doubtless necessitates caution, but they are helpful as being some of the least debatable evidence.

[75]     Mr Colman was of the view that the white painted bulwark coaming was still above sea level when the 12:18 photograph was taken.     He initially thought the black line at the top of the bulwark was visible all the way round the bow in the photograph but was puzzled by its apparent absence at the bow itself in the enhanced version.   Mr Boyd analysed the crosstree and light platform shown on the gantry portal and, transposing that known height forward, calculated the bulwark was 16.4m from the base of the mast.  His conclusion was that at 12:18 “water was just spilling over the extreme forepart of the fo’c’sle bulwark”.  Other opinions were divided as to whether the white splash in the bow area was part of the white painted bulwark or seawater creaming over it.

[76]     The Court’s view, exercising the caution counselled by the experts, is that whilst, of course, the photograph is an accurate depiction of the ship at the moment it was taken, it can be taken as a guide to the ship’s condition at around 1218 hrs.  As an example, the crew’s statements were that during the passage to the anchorage Tasman Pioneer was heading into a north-west swell of about 2m, and Mr Igawa said the swell was up to 2m at 0930 hrs.  Captain Kuroki said when he arrived at the Tasman Pioneer at 1835 hrs the swell was 1.5m.  The consistency of those accounts suggests a similar swell at the time the photograph was taken, with the ship lolling in the swell, her responses dampened by the weight of water in her and the weight of the anchor chain.  The likelihood, therefore, is that at around 1218 hrs the ship’s trim was such that the extreme forepart of the white painted fo’c’sle bulwark would have been slightly above the sea surface if calm but the sea state meant the swell probably spilled over the foremost extremity of the bulwark flare at times.

[77]     Other  photographs  taken  after  1550  hrs  showed  the  ship’s  condition worsening.  It is unnecessary to annex these as they were taken by salvors and no party criticises Nippon Salvage’s actions once it was on station.

Evidence

(1)       Captain Hernandez’s actions

[78]     Captain Goodrick was strongly critical of Captain Hernandez’ actions   He said the risks were too great in the circumstances for the master to take the route east

of Biro Shima safely.   His choices, both then and afterwards, fell short of what would be reasonably expected of a prudent master and put the crew, vessel and cargo in peril.  Taking the vessel east of Biro Shima saved only about 10 nm and thus only about 30-40 minutes steaming time, a distance which could be easily lost by adverse tides and currents, winds – including windage – and possible successive course alterations for safe navigation through an area of heavy traffic.

[79]     In support of his view that the chosen channel was risky, Captain Goodrick said this was a night-time transit into near gale force wind in a passage with strong currents, possible tidal eddies and overfalls, the ship had a defective second radar, Biro Shima was unlit, terrain to the east may have obscured the beacons there and there was the possibility of meeting a southbound vessel using the same channel.

[80]     Following the grounding, Captain Goodrick said that in addition to fully informing the coastguard and owners or managers, Captain Hernandez should have sounded the general alarm, checked all crew were accounted for and ready, if necessary, to abandon ship, reduced speed, taken precautions such as closing watertight doors, broadcast the situation to all other vessels, displayed the necessary warning lights and shapes, directed the crew to undertake and record frequent soundings and instituted and recorded a comprehensive pumping plan, prepared to anchor and taken advice from the coastguard as to the nearest sheltered anchorage with a suitable shelving bottom should beaching be required.   Captain Goodrick’s view was that the coastguard would have recommended steaming for about an hour at a reduced speed some 6-9 nm north-east into Sukumo Wan and anchoring in the lee of Kuro Saki.  He noted there is a marine safety station at the head of Sukumo Wan and the Japan Pilot describes the area as a safe anchorage for large vessels. Captain  Goodrick’s  view  was  that  had  Captain  Hernandez  acted  as  a  prudent mariner, Tasman Pioneer would have been in that sheltered anchorage by around

0400 hrs with the management and insurers having been accurately informed, assessed the case and arranged for salvage by Nippon Salvage under LOF 2000.  The coastguard would have been advised and would have arrived by helicopter or patrol craft with necessary preparations for crew evacuation in place.  All the ship’s pumps would have been operating at full speed since shortly after the incident and the

coastguard, possibly with the assistance of Nippon Salvage, would be starting to deploy additional pumping capacity.

[81]     Contact with the coastguard should have been maintained with advice of the ship’s state – that she was taking water - water levels and whether fuel oil tanks had been damaged with the attendant risk of pollution and including changes in the ship’s position and condition.

[82]     Captain  Goodrick  was  critical  of  Captain  Hernandez  for  steaming  some

22 nm  into  a  near  gale  until  anchoring  some  2-2½  hours  after  the  grounding. Captain Hernandez knew during that passage that nos. 1 and 2 holds and the FPT were taking water.   Captain Goodrick said it is conventional wisdom that a cargo vessel is likely to sink if more than two large compartments are flooded, especially where, as here, they share common transverse bulkheads.   Stability can be significantly affected by the “free surface” effect of water sloshing about in large spaces such as holds: “many thousands of tonnes of water and cargo sloshing about in the holds and the loadings which this put on the bulkheads must have been extreme”.  Water pressure can cause a vessel to flex with seams and joints failing and pipes under pressure.  Other witnesses shared those views.

[83]     Captain Goodrick was particularly critical of Captain Hernandez’s delay in advising Technomar.  Even if the first telex to Technomar – possibly sent at 0520 hrs

- was accurately timed, that was still 2:25 hours after the grounding.  Even then, it minimized  the  casualty.    That  possibly  explained  why Technomar  did  not  first contact Nippon Salvage until 0850, 5:55 hours after the incident and 3:30 hours after Technomar was possibly informed.

(2)       Salvage

[84]     Mr  Hoskison,  a  salvor  with  over  30  years’  experience,  summarised  his opinion by saying he calculated Nippon Salvage could, following notification in accordance with Captain Goodrick’s views,   have reached Tasman Pioneer before the foredeck was submerged.   That would have made salvage and pumping much more straightforward and contained the flooding of nos.1 and 2 cargo holds to below

tween decks.   Temporary repairs could then have been effected, de-watering undertaken, the level of flooding greatly reduced  and consequent cargo damage either avoided in the case of on-deck cargo or greatly reduced.  By not raising the alarm immediately and taking the reasonable steps expected of a prudent master, Mr Hoskison said Captain Hernandez increased the risk to crew, ship and cargo and made salvage much more difficult and expensive.

[85]     Large  salvors  such  as  Nippon  Salvage  run  a  24-hour  seven  day a  week operation to respond to the invariably urgent instructions they receive.  Mr Hoskison said that on receiving notification of a casualty, salvors seek as much information as possible to determine the extent and difficulty of the required response  but  the important thing is to get to the casualty and offer assistance as soon as possible.

[86]     Mr Hoskison said salvors’ response depends on the information available including the equipment required.  Salvors try to obtain permission to communicate directly with the vessel, though information is sometimes diverted through owners or agents.  Direct communication assists salvors both to mobilise and give advice as to how the casualty should best be dealt with.   Helicopter support is nowadays commonplace and can be critical, particularly where casualty and salvors are well apart. Co-operation with State authorities and coastguards is often required, though their interest is principally in possible loss of life and pollution and their assistance is mainly in ferrying personnel or making helicopters available.  However, it must be observed that although the coastguard apparently had helicopters and although Nippon Salvage regarded this as a severe emergency, one of the notable features of this case is that helicopters were never employed other than, possibly, for surveillance.

[87]     Mr Hoskison  said  that  “salvors  are  volunteers  [and]  that  is  the  very fundamental nature of salvage services”.   Their remuneration comes from awards after  the  event,  usually as  a  result  of  contractual  arrangements  with  owners  or underwriters.  LOF 2000 is the most usual contract, arrived at often after negotiation and  an  assessment  by  the  parties  as  to  its  appropriateness  in   the   known circumstances.   He made the point that quantum of awards is often affected by success. Factors in a salvage arbitration invariably include that the “attendance by

the salvor be voluntary”, the level of real or apprehended danger and a fund against which payment can be claimed (other factors include those in the London Salvage Convention 1989 Art 13, Reeder Brice On Maritime Law of Salvage (4th  ed 2003 paras 2-116-118, pp 161-162). Brice also says (para 1-206 pp 65-66) that :

That the services to the property in peril are rendered voluntarily, that is without any pre-existing contractual or other legal duty, is an essential ingredient to a right to recover salvage.   The duty referred to is a legally recognised duty towards the salved property or its owners and not a mere sense of moral obligation. (Emphasis in original).

[88]     Though detailing why the requirement of voluntariness can be ambiguous in salvage law, Rose et al Kennedy & Rose:  The Law of Salvage (6th ed  2002 para 515 p 243-244) say that “it was established by the Admiralty Court as a general rule that voluntariness is an essential element of salvage, and the salvors must be volunteers”. They note that The Carrie [1917] P 224, 230-232 held:

The foremost of those principles [those relating to salvage] is that the salvors must be volunteers, and a salvor is not a volunteer when he is bound by his contractual or official duty to do that which he does.

[89] Though not of direct relevance in this case given the nature of the casualty, the obligation of mariners, including salvors, to render assistance to ships and their crews after a collision and to “proceed with all speed to the assistance of persons in distress”, formerly found in the Brussels Convention 1910 Art 11 currently finds its contemporary New Zealand expression in the Maritime Transport Act 1994 ss 32 and 215 and the Sixth Schedule incorporating the International Convention on Salvage 1989, especially arts. 8 R 1 and 10, R 1.

[90]   Mr Hoskison’s opinions as to the options available to Nippon Salvage concerning the Tasman Pioneer reflected those of Captain Goodrick.  Had there been a Mayday call by 0330 hrs the coastguard would have responded with patrol boats and possibly helicopters.  That, he pointed out, was what actually happened once the coastguard was alerted to Tasman Pioneer’s predicament at about 0715 hrs.

[91]     Based on his experience and Nippon Salvage’s records, Mr Hoskison’s view was  had  it  received  full  and  accurate information,  Nippon  Salvage  would  have immediately mobilized Seiha Maru No.2.  He said that “if Nippon Salvage had been

made aware at the outset that the vessel was sinking, I believe it would have acted as any major salvage company and mobilized immediately” and “it would not wait for communications from the owner … or any contractual arrangements to be concluded”, those being finalized later.

[92]     Seiha Maru No.2 was a large salvage tug with 13 pumps ranging from 2-6 inches and with a total capacity of 1300 tonnes per hour plus a compressed air facility.   Incorporating the 1:30 hours mobilization time actually taken, had the master contacted the coastguard and Nippon Salvage no later than 0330 hrs, his view was that Seiha Maru No.2 would have been under way by 0500-0530 hrs as the salvors “would know that they had a race against time if the floodwater gained in the holds [and] they would not wait to conclude a salvage contract”.

[93]     Noting that Nippon Salvage mobilized and Seiha Maru No.2 left Moji and Hayashio Maru No.2 left Imabari at 1125 and 1130 hrs respectively and arrived at the casualty at 1915 and 2120 hrs respectively, that is after steaming for 7:40 hours and  9:50  hours  respectively,  his  calculation  was  that,  in  the  early  notification scenario just discussed, the tug and the ship could have rendezvoused perhaps by

1230-1300 hrs or, with Tasman Pioneer’s hypothetical anchorage being about an hour’s steaming beyond her actual anchorage, Seiha Maru No.2 could have arrived at the casualty no later than 1400-1430 hrs, well before Mr Igawa’s last photograph. He noted that two sets of 75mm gasoline pumps were installed and operating within

45 minutes of Seiha Maru No.2’s arrival and others progressively thereafter.  Prompt and proper information by the master would therefore, in Mr Hoskison’s view, have resulted in Nippon Salvage being able to reach the casualty and stabilize the flooding into cargo holds nos.1 and 2 before the decks went under, thus saving all deck cargo.

[94]     In cross-examination he accepted that, at whatever hour they were called, crew would take time to reach base and time would be taken in readying the tug.  He also accepted that, in the circumstances of this case, it was uncertain whether Nippon Salvage may have mobilized earlier than when LOF 2000 was agreed at 1000 hrs had Nippon Salvage known of the seriousness of the casualty but he said after receiving  information  at  about  0830  hrs  of  a  ship  down  by  the  head  in  an approximate position and a call from Technomar at about 0850 hrs, there was little

sign of urgency until contact was made with the coastguard about 0930 hrs, and the seriousness of the ship’s position realised.   At that point Mr Yano rang Master Landelius.  He accepted the Seiha Maru No.2’s log stated “received salvage work & S/B  for  leaving  port”  at  1000  hrs,  about  the  time  LOF  2000  was  agreed. Mr Hoskison  nonetheless  adhered  to  his  view  that  had  the  seriousness  of  the situation been known earlier the tug would have mobilized earlier.  Pressed to agree that Nippon Salvage’s delay in mobilizing until after LOF 2000 was agreed indicated a likelihood the same would have occurred had they been called earlier, Mr Hoskison said “It is not what a professional salvor would normally do”.

[95]     He also said a salvage team could have been despatched to Saiki, one of the closest ports to the hypothetical anchoring site.  The distance Moji-Saiki is about 200 km and the driving time would have been about 3:30-4:00 hrs giving a projected arrival time at about 0700 hrs, an estimate he later modified to 0800-0900 hrs..  That team could have taken with them the eight portable 75mm pumps available at Moji and associated gear.   At Saiki they could have rendezvoused with a coastguard launch or helicopter to transfer perhaps six of the pumps to Tasman Pioneer giving an  additional  180  tonnes  per  hour  pumping  capacity  within  an  hour  of  arrival. Mr Hoskison’s view was that all those portable pumps could have been operating by

1100 hrs thus slowing the flooding rate.

[96]     On arrival of the Seiha Maru No.2 at around his projected latest time of

1430 hrs, he would have expected the first pumps installed to the nos. 1 and 2 holds to have been six inch electric pumps with a capacity of about 150 tonnes per hour progressively deployed.   The increase in pumping capacity over the ship’s pumps would then be 600 tonnes per hour.  Nippon Salvage would then have installed their two 500 tonnes per hour Framo pumps.  They are so heavy cranes are required to instal them.  They needed to be inserted into holds, possibly by cutting holes in the deck.  Mr Hoskison’s view was that the Framo pumps would have been operating through the night on 3 May.

[97]     In parallel, Mr Hoskison said Nippon Salvage would be pressurizing such of the ballast tanks, void spaces and FPT as could be pressurized.  His understanding was that it would have been possible to evacuate the water from no.2 WBT P and the

FPT  thus  improving  the  buoyancy  of  the  bow  by,  according  to  Mr  Colman’s estimate, about another 750 tonnes.

[98]     Divers would have inspected the hull on 3 May or, more likely, at first light on 4 May, reporting on the actual holes.   In addition, Mr Hoskison took the view Nippon Salvage would also prioritize on-deck cargo discharging above hold no.2 and the  cargo  above  the  tween  decks,  using  the  ship’s  cranes  and  large  barges,  a relatively straightforward exercise once trim was restored.  That would lighten the vessel forward, save the cargo and improve access to holds for further salvage.  Once stability was achieved, de-watering, unloading and patching would continue together with possible beaching or towing the ship to a more sheltered anchorage or one with repair facilities.

[99]     From  the  coastguard  photographs,  Mr  Hoskison  concluded  the  ship  was slowly sinking  whilst  Mr  Igawa  was  on  station.    Mr  Hoskison  drew  particular support for his assessment of salvageability from the photographs taken at around

1530 hrs and 1550 hrs.  Those showed the ship’s bow and accordingly the on-deck cargo above water a little over 12 hours after the grounding and when the master and crew had done little beyond operating the ship’s pumps.  Salvors had yet to arrive. His view was that if the Seiha Maru No.2 had reached the ship about 1430 hrs the additional pumping capacity she carried would have stabilized Tasman Pioneer and prevented further sinking.

[100]   Captain  Landelius  differed  from  the  views  of  Captain  Goodrick  and Mr Hoskison that had notification been early and full, Tasman Pioneer would have been  at  a  sheltered  anchorage  in  Sukomo  Wan  by  about  0400  with  managers, insurers and SCR specialists contacted, salvage under LOF 2000 agreed, coastguards on site with portable pumps to augment the vessel’s equipment and with an environmental impact assessment having been completed.  His view was that, after checking  the  crew’s  welfare  and  assessing  the  circumstances,  Tasman  Pioneer should have been heading towards a safe anchorage by 0400 with the master contacting owners en route for them to report to underwriters for Club membership and cover to be confirmed, and for underwriters then to commence negotiations with

salvors on the terms of the latter’s engagement.  The coastguard would, in his view, not necessarily have acted immediately on receiving advice of the casualty.

[101]   If there had been early notification, Captain Landelius thought a realistic time-frame for concluding LOF 2000 would have been around 0530 hrs on 3 May, only some four and a half hours earlier than LOF 2000 was actually agreed.

[102]   Captain  Landelius  also  disagreed  with  Mr  Hoskison’s  view  that  Nippon Salvage would have mobilised immediately it received news of the casualty though he accepted that, immediately on receiving the coastguard information as to the casualty and that its tugs and pumping capacity might be required, it may have mobilized and left port, leaving Moji base to agree LOF 2000 while it was en route to the casualty.

[103]   Captain  Landelius  noted  the  Seiha  Maru  No.2  left  Moji  at  1125  hrs,

1:25hours after LOF 2000 was agreed and, though steaming at full speed, did not arrive at the casualty until 1915 hrs, 9:15 hours after LOF 2000 was agreed. Therefore,  even  accepting  Mr Hoskison’s  mobilisation  estimate  –  something  he suggested  was  unrealistic with  the number  of  men  required  at  that  time of  the morning on a national holiday – and with LOF 2000 agreed at 0530 hrs, the earliest Seiha Maru No.2 would have reached Tasman Pioneer in Sukomo Wan would have been no earlier than 1515-1545 hrs.   That must be contrasted, Captain Landelius suggested, with the Arita Maru’s report that at 1450 hrs seawater was “cutting the middle way of no.2 cargo hold”.    Captain  Landelius  was  similarly sceptical  of Mr Hoskison’s estimate that a salvage team despatched by road could have arrived at Saiki with eight portable 75mm pumps by 0700 hrs.  Mr Hoskison’s estimate rested on LOF 2000 being agreed earlier than Master Landelius thought realistic, and paid insufficient account to the 1:50 hours or more required for the mobile salvage team to mobilise and leave Moji on the day.

(3)       Naval architects

[104]   The  expert  naval  architects,  using  such  information  as  they  could  from sources  including  photographs,  crew  and  salvors’  statements  and  the  vessel’s

General Arrangement, T & S, bell and sounding books, each computer-modelled the casualty, especially the rate of flooding and the rate at which Tasman Pioneer was sinking, though each used different programs.  There was a reasonable measure of broad agreement between them on such things as data sources, methodology and the like, but they differed on detail, particularly rates of flooding and immersion.

[105]   Their evidence is difficult to review because of the wealth of detail:  the first draft of this judgment included a 20-page summary.   However, with no disrespect intended to them and conscious that summarizing experts’ views risks omitting detail regarded by the witnesses as important, the Court proposes to include reference only to some of their conclusions rather than their methods of calculation, partly because of the area of general agreement, partly because they both agree some of the data input such as interpretation of the photographs or salvors’ comments was impressionistic, partly so as not to overburden a lengthy judgment, but mostly because, as Mr Boyd put it:

The input data and the contemporaneous evidence I don’t think are reliable enough to use a model in these circumstances where you have so many different … input variables.   You have coefficient discharge, area, inside head, outside head, and cargo permeability and then on the contemporaneous evidence you have [in?]accurate draft and freeboard where read off photographs, crew soundings etc, and none of the information in those … categories in my opinion is reliable enough to give an accurate picture.

or, when asked if there was enough data to model, accurately, the time at which the fo’c’sle deck was likely to have become awash,  he said he did not “consider there was sufficient input data for the models to provide accurate and reliable results”.

[106]   There is weight in Mr Boyd’s views.   However accurate the programs and however expert the interpretation of their results, the models can only yield results as precise as the input data.   And here, necessarily, the input data was partial and imprecise.  The otherwise seeming accuracy of some of the results could therefore, if taken too literally, be misleading.

[107]   That can be demonstrated by recounting Mr Colman’s summary:

… It is my opinion, that had the master anchored the vessel in sheltered water as soon as possible after the grounding and applied the vessel’s pumps

effectively to the flooding in holds 1 and 2, then the flooding into these holds would not have reached past the tween decks until well after 1200 hours on

3 May  2001,  giving  Nippon  Salvage  the  opportunity  to  apply  sufficient

pumping capacity to prevent flooding above this level ever occurring.

…

In my view the void should not have flooded.  The design of the vessel is such that this void is enclosed in steel plate with no access except probably a manhole secured by a bolted plate.   There should be no openings which could leak. There will have been pipe work through the void.  If these pipes were in the same condition as the pipes in hold number 3, then corrosion of these pipes may have caused flooding in the void space.  The chain locker is also flooded, probably through openings in the bosun’s store or possibly down from the open tops from the focsle.

…

In my view, flooding of the void space is implicated in the rate at which the bow of the vessel went under.  If the void had remained watertight, then the bow would have remained above the water level for longer.  Looking at the draughts at 0950 the water level was too low at that stage for the void and bosun’s stores to flood.  As the vessel sank further in it appears that these spaces have flooded slowly at later stages.  These are both large spaces and maintaining their integrity would have provided buoyancy well forward in a favourable position for delaying the immersion of the bow.   Based on my modelling of the flooding into the holds I have calculated that the vessel’s decks would have remained above the waterline until at least 1715 had the void space remained dry.  By then Nippon Salvage would have arrived.

…

I know that there are air pipes from the fore peak tank to the deck head. These pass through the void space.  The water level in the fore peak tank air pipes remained at sea level as the bow continued to lower, so water would have been forced up through the pipes.  If they were corroded or had holes in them, then this would have been a source of leakage into the void space.  I cannot think of any other source of water.  I would have to assume therefore, that the pipes were corroded near the deck head which is the usual location for such corrosion. …

From this, it is reasonable to assume that the void started to flood as the water level rose up to the top of the air pipes at around 1015 according to my reconstruction, before the state of the ship shown in the coastguard photograph at 1218.   The top of the void space is below the level of the water in that photograph and if the pipes were corroded then I would assume water would be flooding into the void at that stage.   Shortly after the photograph was taken at 1218 I would expect that the bosun’s store would start to flood.  With the void space and bosun’s store flooded the vessel had no watertight compartments in the focsle. … Keeping the void dry would have bought more time so that when salvors came alongside, the focsle may not have been under water.

[108]   By contrast, Mr Boyd summarized his views in the following way:

I disagree with the main conclusions of Mr Colman, and believe that the grounding and subsequent floodwater ingress to the vessel was such that the forward deck cargo would have been wetted by seawater whether the master had notified owners of the grounding and called for assistance earlier, or not.

Mr Colman has formed the view that the forward void space must have filled with water when it should not, and that consequently he considers the vessel was “unseaworthy”.

I disagree with Mr Colman that it was inevitable that this void space filled with water when it should not.  It is clear that the space ultimately filled with water, although I believe this most likely occurred once the respective focsle deck openings were submerged.

views he supported in the following passages:

1218 hrs Condition

Mr Colman states … the vessel was not in equilibrium at 1218 hrs but was continuing to flood and I would agree since progressive flooding is known to have continued thereafter.  Mr Colman considers it to be remarkable how the

1218 hrs photograph shows less immersion and forward trim than later on but I do not consider this a reliable gauge.  Any inaccuracies in photographs

aside, this is possible for a number of reasons but obviously all to do with which compartments were flooded and how quickly.  As mentioned earlier,

the hold ingress was likely faster initially based on a true starting position at

0315 hrs (i.e. without WBT Nos. 3S or 4S) at relatively early stages, but this would slow down with decreasing amount of head differential and increased

demand for air exhausting.   Conversely, the latter ingress rates could be expected to increase as a result of higher permeability values of the upper

hold spaces and hatchways and also as a result of containers becoming filled.

…

1500 hrs Condition

Mr Colman  states the focsle deck would become  immersed  …  which I

would agree with, although:

(a)  Mr Colman does not give the earliest time at which the focsle deck became immersed;

(b) The salvage master (statement, pp5) reports that at 1450 hrs the seawater level “was cutting mid part of no.2 cargo hold”, meaning the focsle deck would indeed have been immersed, and time would have passed since then to enable both hatch no.1 and the forward hatch of hatch no.2 to become immersed;

(c)  While there is evidence as to the attitude of the vessel in the water, this does not directly explain precisely what internal weight  distribution/flooding  was  occurring  that  these  stages. This must be considered using valid assumptions.

…

… On Mr Colman’s calculations:

1500 hrs scenario – the vessel had a mean draught (10.18m) and forward trim (10.31m) giving a forward draught of 15.33m meaning the focsle and main deck remained above sea level.  However, the deck  edge  at  Fr  174  was  only  0.73m  above  sea  level,  and  if allowance is made for the 1-1.2m wave height and also any vessel motion, then this could be immersed periodically by about 1.5m which would hamper any operations on deck;

1700 hrs scenario – the forward draught of 16.33m means the focsle deck is not  yet awash according to the static waterline, although by now the deck edge is submerged at Fr 175 (just under) and the bosun’s store hatch and hawse pipes only have a freeboard of about

1m.  Again, if allowing for any sea the focsle and main deck would be awash.

The above results are based on Mr Colman’s ingress amounts and are optimistic according to evidence such as the 1218 hrs photograph (bow stem at sea level) and 1450 hrs evidence (sea level cutting mid length of hatch no.2).  My calculations show that, using alternative flooding amounts based on reasonable factors already discussed, the observations at 1218 hrs and

1450 hrs are possible with the void space remaining sound, but later being flooded from down-flooding as already mentioned.

[109]   Mr Boyd also disagreed with Mr Colman’s hypothesis that the void space flooded through corrosion holes in an air pipe through the space by saying:

… Flow rate calculations have been carried out for this air pipe, typically

100-125mm diam4eter, and my results show that this is inadequate to flood this space in the manner postulated.

… Mr Colman calculates .. that some 320mt seawater would flood into this space in two hours (160mt/hr) but I calculate that for this to occur though an air pipe, the hole would have to be damaged with a disproportionately large hole, i.e. exceeding the diameter, or for the pipe to be completely severed by a substantial amount separating the lengths.  Both scenarios are unlikely for a supported pipe in a dry space where pipe-work is free from accidental damage and any associated corrosion effects. …

The  manhole  to  which  he  refers  …  is  denoted  as    square  hatchway positioned on the starboard side at Fr. 210-211 (see GA plan).  The means of access from the bosun’s store to the void space below would likely be via a

‘weathertight’ folding steel hatch … normally closed by dogs as required by the International Loadline Convention, 1966 (ILLC66) requirements – i.e. a

closing appliance for an opening leading to an enclosed space below the

freeboard deck but which closing appliance is housed within an enclosed

‘weathertight’ space needs only to be weathertight, at most.   Conversely, directly below this in line with the same ladder, the access from the void space to the fore peak tank underneath … would be a bolted manhole cover capable of withstanding a permanent head up to main deck level upon filling the FP tank.   I therefore disagree the bosun’s store could not flood from above since a ‘weathertight’ closing appliance may withstand a head of, say,

2.5m but only for periodical immersion and ingress will occur even when closed if submerged for more than temporary immersion., If the manhole was not tightened, for reasons such as regular access, then this would allow flooding via the bosun’s store.

…

The overall effect of flooding the void space in the context of the holds and other forward spaces is less than the effect of varying the hold permeability values which  is  likely,  let  alone any tolerances on  permeability.  I have investigated a series of increased/reduced permeability values for hold no.2/hold no.1 respectively, flooded to equilibrium level in each case, and my results show two important features:

(a)       the focsle is submerged in every case; and

(b)the effect of altering hold permeability is about the same or more onerous than flooding the void space.

[110]   By way of elaboration, Mr Colman computed the rate of flooding stemming from the grounding. The program calculated the flooding rate at 15 minute stages from  0315  hrs  with  the  damaged  ballast  tanks  fully  flooded  and  nos.  3  and

4 WBT(S) tanks ballasted.  Each recalculation included the new relative levels of the sea, flood water, new drafts, trim and heel and with probable pumping efforts also factored in.  His analysis of the crew statements suggested co-ordination of pumping was poor and the pumping of little effect so he assumed, for reconstructive purposes, that  no  reduction  of  seawater  volumes  in  the  hold  was  achieved  and  that  any pumping which took place during the passage to the anchorage was ineffective. Mr Boyd tended to agree that the crew’s pumping should be largely disregarded for modelling purposes.

[111]   Because Mr Colman was unaware of the size of the holes either in the outer holds or the bilge wells, he inputted the computer with the reported drafts to compute possible hole sizes and calculated the rate of water entering the ship’s compartments through the holes.  That was dependent on pressure at the hole entrances, that being determined by the head, the difference between the level of sea water  outside and the level of water inside the hull.  The FPT, no.1 DBWBT and no.2 DBJ tank (P) were open to the sea with access to the holes in the bilge wells.

[112]   From the dry dock photographs, evidence of hull damage to the DBT and

FBT and his computer calculations, Mr Colman’s view was that the ship would have

been taking water through the external holes at as much as 15 tonnes per second or

60,000 tonnes per hour, well outstripping any pumping capacity.

[113]   However, water ingress to the nos. 1 and 2 holds was through the damaged bilge wells.  They  were at the top of the DBTs so they had to flood before water entered the holds.   That took 20-30 minutes at most.     The computer calculation implied openings of about 112mm2  and 145mm2  into holds 1 and 2 respectively through the bilge wells and Mr Colman’s model suggested that about 500 tonnes of water per hour entered each of the two holds through the damaged bilge wells.  That ingress would gain on the ship’s pumps but the flooding rate would slow to about

300 tonnes per hour once the level of water in the holds approximated the outside sea level, thus leaving the ship sinking, but more slowly.

[114]   In cross-examination he accepted nobody knew the size of the holes into the bilge wells and accepted the water volume entering the holds was determined by the size, shape and profile of the holes itself, plus water pressure.  With his assumed hole sizes calculated from the required flow rate which in turn was calculated from the condition the vessel was known to be in, that is to say, the observed drafts at 0952 and 1050 hrs, the soundings from the soundings book and the 1218 hrs photograph, he worked back from the known data to calculate the flow rate required to reach the condition at that time and calculate from the size of the opening the required flow rate:   “The size of the opening is not part of the input” because it depends on a normal discharge coefficient of .6 with the flow rate determined by head not by size of opening.

[240]  None of those actions can have been motivated by Captain Hernandez’ paramount duty to the safety of the ship, crew and cargo.   None could have been motivated by his obligations as a master, particularly the obligation to report and take whatever steps were recommended to minimize the danger to life, to navigation and avoid the risk of pollution.  All those actions can only have been motivated by Captain Hernandez implementing a plan designed to absolve himself from responsibility or blame for the grounding and lend a veneer of plausibility to his falsehood.

[241]   It follows that while what happened just before the grounding and for several hours afterwards may have been an “act, neglect or default of the master … in the navigation or in the management of the ship” his actions did not amount to an “act, neglect or default” in the bona fide “navigation or in the management of the ship”.

[242] Accordingly, Tasman Orient has failed to discharge the burden of proof of demonstrating its entitlement to the exemption provided by Art 4 R 2(a) of the Hague-Visby Rules as correctly construed. The plaintiffs are accordingly entitled to judgment against the defendant for breach of contract and breach of bailment. In those circumstances, it is unnecessary to consider the claim in negligence and whether concurrent liability lies in this case. (Hague-Visby Rules Art R 4 bis R 1).

(4)      Vicarious Liability

[243]   As mentioned, Mr Gray raised the question as to whether Tasman Orient was vicariously liable for Captain Hernandez’ actions.  There was no evidence directed specifically to the issue, it did not appear to be pleaded and Mr Gray dealt with the point briefly and with scant reference to authority.  Mr Rzepecky did not deal with the point at all, no doubt because of the factors just mentioned.

[244]   As outlined at the commencement of this judgment, Tasman Orient was the sub-charterer of Tasman Pioneer from Tasman Orient Line (Cyprus) Ltd at the time of the casualty .   Clause 3 of the sub-charter incorporated the terms of the head charterparty and obliged Tasman Orient as sub-charterer to observe the head charterparty terms.

[245]   The sub-charter said nothing about liability for crew but the time charter obligated  Rimba  Shipping  as  owner  to  meet  crew  wages  and  other  costs  and provided, in cl 8:

The Captain (although appointed by the Owners), shall be under the orders and directions of the Charterers as regards employment and agency;   and Charterers are to load, stow, trim, lash, secure, unlash, tally and discharge the cargo at their expense under the supervision and responsibility as far as vessels seaworthiness is concerned of the Captain …  (Emphasis in original)

with cl 11 giving the charterers power to give the captain “all requisite instructions and sailing directions”.

[246] Under the Hague-Visby Rules Art 1(a) both owner and charterer are included in the definition of “carrier”, and it is the “carrier” on whom most of the rights and obligations under the Rules devolve, including the obligation to properly man the ship and carefully carry and discharge the cargo (Art 3 R 1(b)(2)). It is the carrier’s obligation to make the ship seaworthy and ensure it is properly manned but it is both the carrier and the ship which are exempted from liability unless damage is caused by want of diligence on the carrier’s part (Art 4 R 1) with the burden of proof being on the party claiming exemption. Both the carrier and the ship are entitled to the Art 4 R 2 (a) exemption.

[247]   Authorities demonstrate that shipowners as their employers are vicariously liable for the negligence of the master and crew (Simpson & Co v Thomson Burrell (1877) 3 AppCas 279, 293) but if the charterer employs the crew it is the charterer who is vicariously liable for its employees’ negligence.

[248]   In Baumwoll Manufactur von Carl Scheibler v Christopher Furness [1893] AC 8, 17, Lord Herschell said:

But there may be two persons at the same  time  in  different  senses  not improperly spoken of as the owner of a ship.     The person who has the absolute right to the ship, who is the registered owner, the owner …. But at the same time he may have so dealt with the vessel as to have given all the rights of ownership for a limited time to some other person, who, during that time, may equally properly be spoken of as the owner.  When there is such a person, and that person appoints the master, officers, and crew of the ship, pays them, employs them and gives them the orders, and deals with the vessel in the adventure, during that time all those rights which are spoken of as resting upon the owner of the vessel, rest upon that person who is, for those purposes during that time, in point of law to be regarded as the owner.

[249]   Seen in that light, Tasman Orient was an “owner”  of Tasman Pioneer under Art  1(a)  of  the  Hague-Visby  Rules  and  under  Baumwoll.    Tasman  Orient  was obliged to observe the terms of all the charterparties.  There were cross-indemnities within them.  Although Rimba Shipping may have been obliged to meet crew wages, Captain  Hernandez  was  subject  to  Tasman  Orient’s  directions.     It  gave  him directions and he reported regularly to it.  Therefore, although the result may differ as between Rimba Shipping, Tasman Orient Line (Cyprus) Ltd and Tasman Orient, as between the plaintiffs and the defendant, the defendant must be held to be vicariously liable for Captain Hernandez’ actions.  This point accordingly fails.

(5)      Unseaworthiness

[250]   In light of the finding of breach of contract and breach of bailment, it may be superfluous to deal with the allegation of unseaworthiness, but, for completeness, the Court’s views should be recorded.

[251] The plaintiffs allege that Tasman Pioneer was unseaworthy at the commencement of the voyage and at the time of the casualty because of corrosion of the pipe through the transverse bulkhead into hold no.3, the fact that the void space

flooded when it should have been watertight, corrosion in the gantries and walkways and poor condition of the hatch-cover locking mechanisms and watertight seals.

[252]   It is convenient to consider that question through the evidence of Mr Todd, the principal witness for Tasman Orient who dealt with the defendant’s denial of the plaintiffs’ unseaworthiness assertions.

[253]   Mr Todd’s view, in brief, was that Tasman Pioneer was seaworthy.   That condition was mainly testified by her remaining afloat despite serious hull damage.

[254]   In reaching his view, he relied on, or was referred to, a number of reports, the earliest of which was a pre-loading inspection at Tauranga in the days leading up to

14-16 April 2001 of Tasman Pioneer’s steel cargo by Captain Roberts.

[255]   Captain Roberts – whose evidence was restricted to putting in her report - was employed by Tasman Orient and others to survey the steel cargo.   Her report recorded a recent satisfactory hose test on the hatch lids and satisfactory inspection of hold access, hatch-locking mechanisms, sealing rubbers and coaming drains. Inspecting bays 13 and 15 she made no note of wasting of bulkheads or corrosion of pipes.  She was not called on to inspect other void spaces and although she recorded “gear problems” in relation to machinery and equipment, she was unable to recall the reason for that entry.

[256]   Mr  Todd  also  relied  on  a  cargo  condition  survey  carried  out  by  a Mr Utsunomiya, a marine surveyor with 25 years’ experience, done on 1 May 2001 at Yokohama at the request of Tasman Orient concerning wet damage on some of the fibre board stowed in no.4 TD(S). He found nos. 2, 3 and 4 hatches tightly secured with watertight hatch covers with no trace of seawater having entered the holds despite four days of “boisterous weather … accompanied with very high seas” with the vessel “shipping seas over decks frequently” en route to Yokohama.

[257]   The third report was by a Mr Kawasaki, a marine engineer for many years and, from 1992, a hull surveyor with Scandinavian Underwriters Far East Agency Co Ltd (SCUA) in Kobe, Japan.  He inspected Tasman Pioneer on 11 June 2001 in

dry dock in the Onomichi dockyard and described the then condition of the hull, machinery and fittings.  Amongst his many photographs were three taken in the void space.  One said an area of the void space was “wholly rusted”, another of the space itself  was  labelled  “ditto”  and  the third  showed  some polypropylene multi-plait mooring ropes in the space.

[258]   Fourthly, Mr Todd gave evidence on classification certificates dated 6 March

2001 by Germanischer Lloyd for the vessel (when she was Pioneer Ark) which certified that the “condition of the structure, machinery and equipment … were satisfactory and the ship complied with the relevant requirements” although four notices of the same date spoke of repairs having been carried out to the FPT, APT side WBT nos.2, 3 and 4 (P) (S) where frames were “thinned and holed”.  The report described the  repairs  to  those  and  other  tanks.    The  tanks  were  required  to  be internally examined at next annual class survey.   The report also noted “several holed airpipe heads removed”.

[259]   Finally, Mr Todd relied on his own inspection between 8-11 August 2001 at the Onomichi dockyard under the guidance of the new master, the chief officer at the grounding.

[260]   Mr Todd found tide marks in the no.2/no.3 cranehouse consistent with the decks submerging to that point, which would also have submerged the port and starboard forward bilge sounding pipes to the no.3 hold.  He found various air and sounding pipe vents blanked off or removed, he presumed during salvage.  The air and sounding pipes passing through and serving the bosun’s store, void space and FPT were in sound condition.   He saw no wastage or corrosion in the cargo hold bulkheads, the tank tops or the cargo holds he was able to inspect.  The no.3 hold forward transverse bulkhead was in sound condition with the hold showing a faint tide mark up to 47cm reducing in depth leading aft.   All air and sounding pipes passing through no.3 hold appeared in sound condition though one air pipe in the starboard forward region of the tween deck had been recently repaired, presumably after the grounding.

[261]   The allegations that ladders, gantries, cargo holds, bulkheads and tank tops were  corroded  and  wasted  were  inconsistent  with  Mr  Todd’s  findings  and  the vessel’s survival despite extensive flooding.  He said Tasman Pioneer survived the casualty principally because the nos.2/3 hold transverse bulkhead was sound.  Water may have entered the no.3 hold by way of defects in the starboard, forward DBT air pipe, probably repaired after the grounding, and the submergence of the associated air vent head on the main deck, although most of that water would have ingressed via the DBT.  Water may also have ingressed the no.3 hold through the cargo hold bilge sounding pipe or the cargo hold access hatch, both of which were only weathertight, not watertight, and had been submerged.

[262]   The bosun’s store was weathertight.   The void space below was watertight though served by a weathertight air vent head above deck.  Mr Todd saw nothing on his inspection to suggest the bosun’s store and void space were unseaworthy or failed to meet  Classification  Society rules,  or  that  either  space  flooded  through corroded pipes and bulkheads as alleged.  Given the degree of submergence forward, his view was that downflooding of the bosun’s store and void space would have inevitably occurred through their respective closing appliances.   Flooding of those spaces in those circumstances did not, in Mr Todd’s opinion, make the vessel unseaworthy.

[263]   Similarly, Mr  Todd  said  the  pleaded  condition  of  the  weathertight  hatch covers locking mechanisms and seals was inconsistent with the surveys at Tauranga and Yokohama and conditions during the passage.   He also took the view the condition  of  the  hatch  covers  and  securing  arrangements  was  irrelevant  since flooding of the nos. 1 and 2 holds occurred from below, to the point where the vessel’s trim ensured submergence of the hatch covers.

[264]   Mr Todd said the salvor’s diary confirming difficulties in pressurizing the FPT through air leakages may have occurred through incomplete closure of the weathertight hatch access to the void space or air leaking from a cable gland.  He also accepted that a breach in the steel work between the FPT and the void space, even a small breach, might be a cause.

[265]   In  cross-examination,  Mr  Todd  accepted  that  if  water  entered  the  holds through corroded pipes which were in that condition prior to the casualty, that would be an item of unseaworthiness and the holds would not be cargoworthy.

[266]   Discussing Mr Kawasaki’s photographs of the bosun’s store and void spaces, Mr Todd said they depicted little evidence of corrosion in the former but disputed the description of the latter as being “wholly rusted”.   He stressed the photographs showed no corrosion holes, or loose rust scale.  The general view showing localized areas of surface corrosion in the void space photograph was misleading in extent due to camera flash.     Mr Kawasaki, he thought, was only talking about surface not structural rusting.

[267]   Mr Todd was cross-examined about a report of Nippon Kaiji Kentei Kyokai, a well-known and respected survey company which was on board the Tasman Pioneer from 19-25 May 2001 when she was at Kokura.  It spoke of air ventilation pipes  from  the  no.3  DBT  being  rusty,  many of  the  hatch  cleats  being  bent  or corroded  as  were  almost  all  of  the  compression  bars  on  the  top  of  the  hatch coamings, with the top itself rusted and the top of the air pipe with the no.3 lower hold “had come off due to corrosion and rust”.  Though refused access to the no.3 hold  by  the  owner,  NKKK  “considered  the  sea  water  entered  no.3  cargo  hold through many defective parts of the hatch cover construction, the side bulkhead tank top plate and/or pipe line construction”.  They found the “vessel’s hull to have been excessively corroded in poor condition” and found the “starboard air pipes of the no.3 cargo hold were corroded and heavily rusty”.  They concluded:

The vessel was very old and in poor condition with heavy corrosions and we have  strong doubts about  the  seaworthiness  and cargoworthiness  of  this vessel even at the beginning of this voyage.

[268]   Mr Todd said he had difficulty reconciling the accuracy of that report with his own later observations, perhaps, he suggested, due to translation error.  Damage during and after the grounding may have given rise to the comment.   He said the NKKK report of the hull being excessively corroded and in poor condition was “such a generalized comment as to be of little technical value”.

[269]   Despite all the matters put to him, Mr Todd adhered to his view that there was “no indication that the vessel was unseaworthy in any way”.

[270]   On  the  issue  of  unseaworthiness,  Mr  Rzepecky relied  on  Mr  Coleman’s opinion that the void space should have remained watertight, though he submitted this was not a major issue since, if the plaintiffs’ view of the evidence were accepted, it is unlikely the void space would have flooded as the ship would never have sunk sufficiently for such to occur.

[271]   He also relied on Mr Coleman’s view that hold No. 3 should never have flooded.   The fact it did, he submitted, raised an issue whether the ship was seaworthy.

[272]   Mr Todd’s inspection of the No. 3 hold left him unable to rule out the possibility  water  leaked  into  it  through  corroded  pipes  though  he  doubted  the flooding into No. 3 hold had any causative effect.  This was contradicted by Captain Landelius’s final report as SCR. The plaintiffs took the view that water entered no. 3 hold and the void and other spaces through corroded pipes or steelwork.  He relied on the time Nippon Salvage took to pressurise the FPT and the Germanischer Lloyd forms that steelwork was done for corrosion purposes.  Contrasting the photographs of the bosun’s store and the void space showed much more extensive corrosion in the latter which Mr Coleman assumed showed sea water had been leaking into the void over time.

[273]   On unseaworthiness and as to the suggestion that the No. 3 hold and the void space allowed water ingress, Mr Gray noted No. 3 hold was not ruptured, though some water entered.   It was speculation that this occurred through corroded pipes passing through the flooded No. 2 hold.  Mr Todd accepted this was possible but had been unable to investigate it. None of the plaintiffs’ cargo was damaged as a result of water entering No. 3 hold.   Therefore there could be no conclusion that Tasman Pioneer was unseaworthy because of any defect in the piping into the No. 3 hold.

[274]   As to the void space and the suggestion of corrosion, Mr Gray rehearsed the evidence as to whether the void space suffered from downflooding after the fo'c'sle

deck was below sea level with water passing through the bosun’s locker.  Mr Todd saw no unseaworthiness in the void space or the bosun’s store when he surveyed the vessel in August 2001.  In particular, he saw no source of water which would have passed through an aperture of 170 mm diameter, that postulated by Mr Colman. Mr Todd did not rate the salvor’s difficulty in pressuring the FPT  as important given the gravity of the casualty.  Naturally he relied on Mr Kawasaki’s SCUA report of June 2001 where he gave no indication of seeing structural rust inside the bosun's store or void space.  Those spaces did not require repair.  Mr Kawasaki’s use of the expression “wholly rusted” was probably a reference to surface rust.  In this regard, too, he relied on the lack of reference to rust in the void space in the classification documents.  He also relied on Ms Roberts and the other surveyors’ reports.

[275]   Finally, Mr Gray made the point that the burden of proof is on claimants to prove a vessel’s unseaworthiness before and at the beginning of the voyage and their loss or damage was caused by that unseaworthiness.   If that be proved the burden passes to defendants to prove that they and those for whom they are responsible exercised due diligence to make the ship seaworthy and if they fail so to do, they are not entitled to rely upon the exception in Art. 4, R 2(a).  In Papera Traders Co Ltd v Hyundai Merchant Marine Ltd (The “Eurasian Dream”) [2002] 1 Lloyds Rep 719,

735, the following appears:

The burden of proof

123.

(1)       The burden of proof is on the claimants to prove that the vessel was unseaworthy, pursuant to art. III, r. 1, before and at the beginning of the voyage.

(2)       The claimants must then also prove that the loss or damage was caused by that unseaworthiness:  The Europa, [1908] P. 84 at pp. 97-98.

(5)           If the claimants discharge the burden in respect of (1) and (2), the burden passes to the defendants to prove that they and those for whom they are responsible exercised due diligence to make the ship seaworthy in the relevant respects:  The Toledo, [1995] 1 Lloyd’s Rep. 40 at p. 50.

(a)  If they fail to do so, the defendants are not entitled to rely upon the exceptions in art. IV, r. 2, including the “fire” exception.

(b)  If the defendants are able to do so, they can rely upon the “fire” exception as a defence to breach of art. III,  r.  2,  subject  to the claimants proving that the loss or damage was “caused by the actual

fault or privity of the carrier”:  The Apostolis, [1996] 1 Lloyd’s Rep.

475 at p. 483, col. 2; Scrutton on Charterparties (20th ed), p. 444.

(4)       In relation to due diligence, proof of  unseaworthiness  fulfils  the same function as res ipsa loquitur does in ordinary cases of negligence: The Amstelslot, [1963] 2 Lloyd’s Rep. 223 at p. 235 per Lord Devlin; The Fjord Wind, [2000] 2 Lloyd’s Rep. 191 at p. 205. In practical terms, the reasoning is: ”a ship should not be unseaworthy if proper care is taken” (per Lord Justice Stuart-Smith).

[276]   Mr Gray suggested that Prof Tetley’s text on the burden of proof on which the plaintiffs rely is incorrect.   He submitted Prof Tetley’s view did not represent English law, nor, by extension, that in New Zealand.

[277]   This aspect of the case raises two additional factual issues. [278]   The first relates to the ropes found in the void space.

[279]   Much was made during the hearing of the photograph showing ropes in the void space.  Such a space should be watertight and seldom visited, but several of the plaintiffs’ witnesses inferred that the presence of ropes in the void space implied the crew of Tasman Pioneer were using the space for storage and that might amount to an aspect of unseaworthiness.

[280]   There is a much simpler and more likely explanation.

[281]   Mr Kawasaki’s photographs were taken on 11 June 2001 when the ship was in dry dock.   The ropes in his photographs are plaited hawsers.   Mr Kawasaki described the ropes as “mooring” ropes.   Captain Kuroki’s witness statement describes how salvors used polypropylene multi-plait ropes for towing and mooring, presumably because of their elasticity.  Salvors would have accessed the void space during dewatering and repositioning Tasman Pioneer.  The most likely explanation for the ropes being in the void space when Mr Kawasaki photographed them about six  weeks  after  the casualty is  therefore  that  they  were  ropes  belonging  to  the salvors, left in the void space by oversight.

[282]   That matter is not therefore shown to be a matter of unseaworthiness.

[283]   The rather more important aspect of possible unseaworthiness is, however, the curiosity which arose in the case as to which ship was the subject of some of the reports on which the plaintiffs relied.

[284]   Mr Todd was referred to an email from the defendant’s Auckland Port agents to Tasman Orient on 2 April 2001 on the subject of ““Pioneer Ark” AKL Portcall” saying that the vessel’s forward crane had been giving continuous trouble during loading and the twistlock shoes on the lids were “so corroded that their ability to secure boxes must be seriously questioned”, the ship had insufficient deck twistlocks on board and a further safety issue concerned the “gratings that run fore and aft between the hatches in many places are so corroded that they had collapsed, in other cases they were insecure, and in some places only the frame remains, the grating is missing altogether”.  Mr Todd noted Captain Roberts should have been told of those problems but did not refer to them.   He said the problems did not relate to cargoworthiness.

[285]   Then, on 5 April 2001, Australian charter brokers acting between Tasman Orient and Rimba Shipping sent an email concerning Tasman Pioneer saying the “bow  thruster  has  been  out  for  two  round  voyages”,  there  had  been  a  crane breakdown at Osaka and a fire on board at Bluff.  Mr Todd still did not accept those complaints indicated the vessel was in poor condition.

[286]   He was then referred to an email sent by Tasman Orient to Mr Glynos on

17 April 2001 concerning the Pioneer Ark, complaining of malfunctioning or broken cranes, poor reliability, “MAF noticed many rats on the vessel” so de-ratting was required, the walkways and gratings were “so corroded that one stevedore fell through”, “pad eyes on the tank top preventing loading of cargo” and “container shoes rusted and cannot accommodate container twistlocks”.  Those, Mr Todd said, were matters of design or age, not seaworthiness.

[287]   He was then referred to the Germanischer Lloyd reports of 6 March 2001 for the Pioneer Ark and asked to comment on the remarks about corrosion, wasting and thinning.  Mr Todd relied on omission of reference to the void space as indicating the Classification Society had conducted a satisfactory inspection of that area.

[288]   This is what may well be an odd sidelight on this case.  The ship the subject of this proceeding was named the Larch when built.  She had been re-named Pioneer Ark at some stage during her history, and was to be re-named again, this time as Tasman Pioneer as noted in the time charter dated 23 November 2000.  The change probably happened when the vessel reached New Zealand because Technomar’s voyage instruction to Captain Hernandez of 17 February 2001 was headed “or M/V “PIONEER ARK”-TBN Tasman Pioneer – on arrival New Zealand”.  The vessel the subject of this proceeding was named Tasman Pioneer by 11 April 2001, the date of the first inspection leading to Captain Roberts’ report and admittedly relating to the vessel the subject of this claim.  The evidence also included the Lloyds Register of Ships 2001-2 in which the entry for “Pioneer Ark” (after a number of name changes) showed her as having been built in 1979 as job 896 by the Hayashikane Yard while that for the Tasman Pioneer (again after a number of earlier name changes) showed her as having been built in 1982 at a German yard.   Tasman Pioneer is listed as having a bow thruster, Pioneer Ark has none.

[289]   It therefore appears that the vessel the subject of this proceeding was that listed as Pioneer Ark in Lloyd’s Register and sailed under that name until probably fairly shortly after 17 February 2001 when she was re-named Tasman Pioneer.   It seems likely that the vessel then named Tasman Pioneer was re-named Pioneer Ark because the Germanischer Lloyd certificates of 6 March 2001 note that change.  The inference to be taken is accordingly that all documents commenting on the condition of the Pioneer Ark created after mid to late February 2001 relate to the former Tasman Pioneer, by then the Pioneer Ark, and not to the former Pioneer Ark, by the same time re-named Tasman Pioneer and the vessel in contention in this case.

[290]   The conclusion to be drawn from all of that is that Tasman Pioneer has not been shown to have been unseaworthy in the manner pleaded, either at the commencement of the voyage or at the casualty.  As discussed, a number of reports on which the plaintiffs relied  appear almost unquestionably to have been  about another  ship.    That  certainly  applies  to  the  pleaded  corrosion  of  gantries  and walkway and poor condition of the hatch covers, locks and seals.

[291]   The balance of the allegations essentially contrast the reports from Captain Roberts and Mr Utsonomiya against that from NKKK.   Though the two former inspectors were only required to inspect parts of the vessel, they found nothing which would suggest Tasman Pioneer was unseaworthy at the commencement of the voyage.  On the other hand, the NKKK report of an inspection carried out about a fortnight after the grounding is likely to have been affected by the damage suffered in the casualty and the salvor’s repairs and other actions.   Despite the earlier comments, translation error seems an implausible explanation for the passage cited from the NKKK report and it would certainly have been more helpful had the report been more pointed.

[292]   The plaintiffs bear the burden of proof of unseaworthiness (The “Eurasian Dream”).  They called no oral evidence on the topic.   Despite the strength of the NKKK’s  observations,  the  Court  concludes  that  the  plaintiffs  have  failed  to discharge the burden of proof on this aspect of the unseaworthiness allegations.

[293]   Despite all the evidence on the topic, it is also not possible to conclude that the void space was not watertight before the grounding.   It certainly flooded, but whether it was downflooding from deck apertures permitting water to ingress the void  space  through  damaged  pipes  cannot  be  determined.    There  is  weight  in Mr Boyd’s view that the only pipe discussed in the evidence was too small for Mr Colman’s flooding scenario to be correct.   The photographs of the void space may, as Mr Todd suggested, only show surface corrosion, possibly following exposure to air after the grounding.  Though speculative, racking of the ship in the grounding and water pressure on her internal spaces may have opened an aperture between the FPT and the void space.   Downflooding from the bosun’s store and deckhead vents may have followed immersion of the fo’c’sle deck.  That aspect of the unseaworthiness claim also fails.

[294]   There may have been some corrosion in the pipes into no.3 hold but the relatively minimal flooding into that hold was unlikely to have materially affected the vessel’s  trim  by comparison  with  holds  nos.  1  and  2  being  flooded.    It  is noteworthy that the transverse bulkhead between holds nos. 2 and 3 held despite significant water pressure.  Unseaworthiness in that respect is not proved.

[295]   Standing back and looking at the matter overall, the conclusion must be that Tasman Pioneer has not been shown to be unseaworthy either at the commencement of the voyage or at the time of the casualty.

(6)       New Zealand Dairy Board Claim

[296] Of the New Zealand Dairy Board’s total claim of USD$498,727.26, USD$187,301.87 is for dairy products stowed in reefers on hatches 3 and 4 which were damaged by heat as a result of being left off power at some stage during the voyage.

[297]   The total number of reefers on board Tasman Pioneer when the voyage began exceeded the ship’s capacity to supply power and accordingly it had a generator (genset) on deck to supply the extra power required.

[298]   On a number of occasions on the voyage to Yokohama, Captain Hernandez’ daily telexes recorded problems with the genset to the point where, on 25 April, he said it “most likely will affect our reefer cargo”.  It was to be repaired at Yokohama but the evidence does not appear to show whether that was done.

[299]   The salvors disconnected one genset on 6 May to save diesel, though that was in Tasman Pioneer’s engine room.  On the same day cables to reefers on the nos.1 and 3 holds were removed but electricity was connected to seven reefers on no.4 cargo hold at the request of the vessel’s superintendent, not Captain Landelius, and were powered by the ship’s generator.  On 9 May one reefer was removed from the no.3 hold, again at the request of the superintendent, but was replaced on board on

11 May at Captain Landelius’ request.

[300]   In opening, Mr Rzepecky said the plaintiffs’ cargo surveyors were refused the reefers’ Partlow charts recording the containers’ temperature and therefore the plaintiffs were unaware when the disconnection occurred, or, more particularly, whether it was en route from New Zealand to Japan or following the grounding.

[301]   He pointed to evidence from the daily telexes from the ship to Tasman Orient in the earlier part of the voyage, which implied that the shipboard generator malfunctioned.   Even so, Tasman Orient had a continuing obligation after the grounding to care for the reefer cargoes which were unaffected by flooding (Rey Banano del Pacifico CA v Transportes Navieros Ecuatorianos (The “Isla Fernandina”) [2000] 2 Lloyds Rep 15).

[302]   Mr Rzepecky thus submitted Tasman Orient produced no evidence to support its allegation in its defence that the damage to the reefer containers was inevitable following the grounding.   That showed that Tasman Orient failed in its ongoing obligation to keep the Dairy Board’s product properly refrigerated.   He submitted Tasman Orient had the onus of establishing that the inevitability of damage was a consequence of the grounding and not of some separate fault by Tasman Orient.  No evidence had been adduced to discharge its onus and accordingly the Dairy Board in CP 462/02 was entitled to judgment.

[303]   Mr Gray said the Partlow charts had never been requested and the loss was caused by the salvor's removal of the genset.  There was no evidence of its failure or removal during the voyage or after the grounding.  He pointed to Captain Landelius’ evidence.  Salvage and saving as much cargo as possible involved prioritization of resources and the loss or damage arising from the failure to maintain electricity supply to the reefers was closely connected with the casualty and arose in the context of preserving the ship and her cargo.

[304]   It is possible the Dairy Board’s produce in the on-deck reefers was damaged before Tasman Pioneer reached Yokohama, but that is speculative.   As Captain Kuroki’s witness statement demonstrates, the times at which gensets may have been connected or disconnected to reefers, particularly those containing Dairy Board produce, is unclear, as is whether the disconnections were at the salvor’s instigation or the direction of the Swedish Club representative.   In the absence of the Parlow charts for the reefers containing the damaged Dairy Board produce, it would be unsafe to conclude that Tasman Orient failed in its continuing obligation to care for the reefers after the grounding by disconnecting the electricity supply.  The position is so uncertain that no such conclusion can be safely reached.

[305]   Accordingly, that aspect of the Dairy Board’s claim is not made out.

Result

[306]   In the result:

a)        The  plaintiffs  are  entitled  to  judgment  against  the  defendant  for breach of contract and breach of bailment.

b)Although  the  quantum  of  the  claim  is  agreed,  the  impact  of  that finding on the limitation fund may require a further hearing.

c)        There  will  be  a  telephone  conference  with  counsel  on  Tuesday,

30 October 2007 at 9:00am to discuss costs and the future conduct of the case unless counsel advise beforehand that no such conference is required.

………………………………..

WILLIAMS J.

Solicitors:

McElroys, P O Box 835 Auckland, for plaintiffs
DLA Phillips Fox, P O Box 160 Auckland, for defendant

Copy for:

Philip R Rzepecky, P O Box 105 521 Auckland, for plaintiffs
Bruce D Gray QC, P O Box 4338 Shortland Street, Auckland, for defendant
Stewart Scorgie, Case Officer, Auckland High Court