Insights

In brief - Local and international news about shipping, aviation, rail and road transport

In this quarterly issue, we cover local and overseas transport and logistics news and summarise some interesting cases from Australia and around the world which have been handed down in recent months. 

Colin Biggers & Paisley news 

Stuart Hetherington and Stephen Thompson attended the 8th Asian Maritime Association Conference at the end of September last year where Stuart delivered the key note address and Stephen was on a panel dealing with the topic of Judicial Sales of Ships. 

We are pleased that both Chambers and Partners and Doyle's Guide have recognised our practice and our partners as leaders in the fields of shipping and aviation law in their latest guides, with particular mentions to partners Andrew Tulloch, Stuart Hetherington, Stephen Thompson and special counsel Richard Arrage.

Shipping 

Australian news 


Antarctic pollution protection

The Australian government is in the process of amending the Protection of the Sea (Prevention of Pollution from Ships) Act 1983 to set out requirements to reduce marine pollution by ensuring that further discharge restrictions apply for oil, noxious substances, sewage and garbage in polar waters. The amendments are aimed to further protect the pristine Antarctic environment and to comply with Australia's obligations under the International Convention for the Prevention of Pollution from Ships (MARPOL).

Australia has also worked with other countries and the shipping industry to develop the International Code for Ships Operating in Polar Waters.


Marine insurance market

The consolidation of marine businesses in the Australian marine insurance market has continued with the announcement made on 14 February 2017 of the merger of the CGU and Vero marine portfolios in their joint venture with National Transport Insurance. The new business is to be known as Marine Protect. This follows the acquisition by CGU of the Lumley business, including its marine portfolio, a couple of years ago. 


Coastal Shipping Reform 

The Federal Minister of Infrastructure and Transport, Darren Chester MP, has said that the government is committed to reform the coastal shipping reforms of the previous Labor government, noting that the "fleet of major Australian registered ships (more than 2,000 dwt) with coastal licences has plummeted from 30 vessels in 2006/07 to 14 in 2015/16". He has, at the same time, said he wants to "achieve reform through constructive stakeholder engagement". We await the outcome with interest. 


New South Wales government 

The Ministerial changes in the New South Wales government, introduced by the new Premier, Gladys Berejiklian, has resulted in the replacement of long serving Minister for Roads, Maritime and Freight, Duncan Gay, with Melinda Pavey. 


International news 


Maersk and Hamburg Sud 

The announcement was made on 1 December 2016 that an agreement for Maersk Line to acquire Hamburg Sud had been entered into between Maersk and the Oetker Group. It will take Maersk's share of the global market for container shipping closer to 20% and extends its lead over the second largest operator, Mediterranean Shipping Company. Hamburg Sud is the seventh largest container shipping line and a leader in the North-South trade. It operates approximately 130 container vessels.
 

Nippon Yusen Kabushiki Kaisha, Mitsui OSK and Kawasaki Kisen Kaisha  

The Maersk and Hamburg Sud announcement followed the announcement made on 31 October 2016 by Nippon Yusen Kabushiki Kaisha (NYK), Mitsui OSK and Kawasaki Kisen Kaisha (K Line) of their plans to merge their container operations in a joint venture. 


K Line charged with criminal cartel conduct

In mid-November 2016, Japanese shipping line Kawasaki Kisen Kaisha (K Line) was charged with cartel conduct under the Competition and Consumer Act 2010 (Cth).

The alleged infringing conduct related to the international shipping of cars, trucks and buses to Australia between July 2009 and September 2012. Although the exact conduct is yet to be made public, it is understood the allegations include price-fixing, bid-rigging and customer allocations.

It is the second such case in Australia, following the guilty plea entered by NYK in July 2016. The NYK case is listed for a sentencing hearing in April 2017, in the Federal Court at Sydney.

Unlike NYK, however, it has been reported that K Line intends to contest the charges against it. K Line has already been prosecuted in the United States for ostensibly the same conduct, and pleaded guilty in that jurisdiction. The US prosecution yielded a criminal fine for K Line in excess of $67 million, and the imprisonment of executives for up to 18 months.

In Australia, the maximum fine for each criminal cartel offence is the greater of $10 million, 3 times the benefit derived from the commission of the offence or, if that benefit cannot be determined, 10% of the corporation's annual turnover connected with Australia.

It is interesting to note that the K Line prosecution was commenced in the Local Court at Sydney, rather than in the Federal Court of Australia, as in the NYK case. Although the Federal Court's jurisdiction in relation to cartel offences is, generally speaking, exclusive (except for the High Court), there are exceptions in relation to examinations and committals for trial on indictment.


International Conventions 

The Ballast Water Convention enters into force internationally on 8 September 2017. While Australia has signed it, there has, as yet, been no ratification by Australia of the Convention. The Biosecurity Amendment (Ballast Water and Other Measures) Bill was introduced into the House of Representatives on 15 February 2017 and on achieving Royal Assent the ratification process for the Convention will commence. 


London Maritime Arbitrators Association 2017 Terms

The London Maritime Arbitrators Association (LMAA) has recently revised it arbitration terms which come into effect after 1 May 2017.

Specific reference is now made to section 17 of the Arbitration Act 1996 under which an arbitrator appointed by one party can become the sole arbitrator where the other party fails to appoint an arbitrator. There is also provision for appointment by the President of the LMAA where there is failure to comply with agreement for arbitration by a sole arbitrator.

The Small Claims Procedure 2017 now has a financial limit of US$100,000 and the Intermediate Claims Procedure 2017 applies to claims of US$100,000-US$400,000, unless the parties agree otherwise.


Australian decisions 

Reiter Petroleum Inc v The Ship "Sam Hawk" [2016] FCAFC 26 

The Full Court of the Federal Court overturned the first instance decision of McKerracher J in late September 2016. See the case note of this important decision of the Full Court prepared by Andrew Tulloch entitled Maritime lien challenge appeal successful: Ship "Sam Hawk" v Reiter Petroleum Inc [2016] FCAFC 26

Wilmington Trust Company (Trustee) v The Ship "Houston" (2016) FCA 1349 

A recent decision of Justice Siopsis in the Federal Court of Australia in Wilmington Trust Company v the Ship "Houston" [2016] FCA 1349 emphasises the approach that the Court will take in relation to challenges to the Court's jurisdiction, in the context of proprietary maritime claims within the meaning of the Admiralty Act 1988 (Cth) (Admiralty Act). 

The plaintiffs had commenced proceedings against the Ship "Houston" in late December 2015 by way of an action in rem in respect of claims for (1) loss and damage arising from the detention and/or conversion of the "Houston" and (2) delivery up forthwith of the "Houston" at Singapore, pursuant to a bareboat charterparty with the defendant.

The "Houston" had been chartered by the defendant and was, at the time, carrying a cargo of locomotives for discharge at Port Hedland in Western Australia for use in one of the large mining projects. 

The defendant filed a caveat against arrest of the "Houston" in the Federal Court of Australia. 

The defendant sought to challenge the Court's jurisdiction on the basis that the two claims were not properly characterised as proprietary maritime claims.

Section 4(2) of the Admiralty Act states:
    A reference in this Act to a proprietary maritime claim is a reference to:
    (a)    a claim relating to:
        (i)    possession of a ship;    
        …

In support of its challenge to jurisdiction, the defendant relied upon on several bases, including that:
  • on the facts asserted by the defendant, the "Houston" was held by the defendant as gratuitous bailee and that the first plaintiff already held possession, with the result that both claims were misconceived
  • submissions that the evidence showed that The "Houston" was available for physical possession by the plaintiffs after its arrival at Port Hedland, with the result that the claim for delivery up was misconceived
  • on the proper construction of the charterparty, there was no right in the plaintiffs to seek delivery up of the "Houston" in Singapore
The plaintiffs contended that section 4(2)(a) of the Admiralty Act was to be given a broad interpretation having regard to the use of the words "relating to" and that the section was sufficiently broad to encompass the plaintiffs' claims for loss and damage arising from the detention and/or conversion of the "Houston" and the claim for the delivery up forthwith of the "Houston".

In rejecting the defendants' challenge to the Court's jurisdiction, Justice Siopsis referred to the decision of Allsop J (as he then was) in Elbe Shipping SA v The Ship Global Peace [2006] FCA 954 (Global Peace), and the following statement at [70]:
 
In Shin Kobe Maru the only 'fact' that needed to be shown was the existence of a claim that bore the 'legal character' of the kind referred to in s 4(2)(a)(i) and (ii) of the Act. The claim might fail for any number of reasons, but as a claim, that is as a body of assertions, it bore the legal character or answered the description of a 'claim relating to possession of, or title to or ownership of a ship.

Justice Siopsis held that the defendants' arguments went not to the legal characterisation of the claims, but to the merits of the plaintiffs' claims and the reasons why those claims might fail. As such they were not directed towards the "body of assertions" in the sense which that phrase was referred to by Allsop J in the Global Peace.

He concluded that the claims were to be characterised as claims relating to possession of a ship and that the plaintiffs had properly invoked the in rem jurisdiction of the Court. 

Sino Dragon Trading Ltd v Noble Resources International Pte Ltd [2016] FCA 1131 

This was an attempt to set aside an arbitration award in a commodity transaction involving the sale from Noble Resources to Sino Dragon of 170,000 mt of iron ore. There had been previous attempts to have two of the arbitrators removed. The award which was given in Sydney was recognised in Hong Kong and leave to enforce it was given in that jurisdiction where the applicant, Sino Dragon, was incorporated. 

The applicant sought to set aside the original award in the Federal Court pursuant to Article 34(2) of the UNCITRAL Model Law which is given the force of law in Australia by the International Arbitration Act 1974

The application was unsuccessful and Beach J dismissed it. The challenges which were made were summarised by Beach J in his judgment as being that: 
  1. the arbitration dealt with a dispute not contemplated by the arbitration clause in the Contract of Sale. His Honour commented that: "this ground is in substance a challenge really going to the merits of legal and factual questions, but superficially characterised and cloaked as an excess of jurisdiction question." His reasons dealt at length with the material upon which he relied to support his comments in that regard. 
  2. the evidence of two witnesses called by Sino Dragon via video conference facilities was beset by technical difficulties, giving rise to a lack of procedural fairness. This issue, according to his Honour, caused him some difficulty. It raised the issues of whether Sino Dragon was given a reasonable opportunity to present its case and whether there was a lack of equality of treatment. His Honour did not believe either issue was made out by Sino Dragon. In particular, there had been no "real unfairness" or "real practical injustice". Once again his Honour dealt with all the competing arguments in considerable detail. 
  3. two of the three arbitrators were not appointed in accordance with the agreement of the parties and there was a real apprehension of bias. His Honour rejected this ground, again, in considerable detail. 
The case is also significant as Sino Dragon was ordered to pay two-thirds of the costs on an indemnity basis and the remaining one-third on a party and party basis. In reaching that decision, Beach J rejected the suggestion that it would be justified by reason of a special rule. However, in applying current principles of Australian law to the issue, his Honour was of the opinion that the first and third challenges that were made in the application to set aside the award did not have reasonable prospects of success. 

Watkins Syndicate 0457 at Lloyds v Pantaenius Australia Pty Limited [2016] FCAFC 150 

We reported on the first instance decision of this case in Transport & Logistics in June 2016. It involved a claim for contribution by one of the two insurers (the Pantaenius policy) of the same yacht against the other insurers of a second policy (the Nautilus policy). At first instance, Nautilus had unsuccessfully defended the claim in reliance on a provision in this policy which suspended cover in the event that the yacht intended to enter foreign waters. It had entered foreign waters prior to its claim arising but was within the geographical scope of the cover at the time when it ran aground. The central legal issue before Foster J at first instance and the Full Court of the Federal Court (Allsop CJ, Rares and Besanko JJ) was whether or not section 54(1) of the Insurance Contracts Act 1984, which permits the court to overlook acts or omissions of insureds (in certain circumstances), was engaged for the benefit of the claim being pursued by the other insurer who had paid the insured's claim under the Pantaenius policy.
 
Foster J had held that it did apply as "the suspension provision was in the nature of an exclusion and did not operate as one of the contractually prescribed elements of the geographical limits on the scope of cover itself". 

The Full Court agreed, and carried out a full examination of the recent cases in the High Court and Court of Appeal of New South Wales (as well as other courts), but especially Meagher JA's judgment in the NSW Court of Appeal in Prepaid Services Pty Ltd v Atradius Credit Insurance NV [2013] NSWCA 252 and the High Court decision of Maxwell v Highway Hauliers Pty Ltd [2014] HCA 33

The following extract of the judgment (at [46]) explains how the Full Court came to determine the issue that section 54 was engaged: 
The Nautilus policy provided cover where, as here, the yacht suffered a casualty within its stated geographical limits of 250 nautical miles off mainland Australia and Tasmania. But for the operation of the suspension of cover, after the insured's act of causing the yacht to clear Australian customs for the purpose of leaving Australian waters and the insured's omission to clear Australian customs after the yacht had re-entered the geographic limits on the return voyage, the Nautilus policy would have responded to the casualty. The act of clearing Australian customs and the omission (as yet at the time of the casualty) on the yacht's return to clear Australian customs, can each be seen to be an act or omission of the insured that occurred after the inception of the Nautilus policy, during its period of cover and within its geographic limits. That was sufficient to engage s.54(1) because the effect of the suspension of cover in those circumstances entitled Nautilus to refuse to pay the insured's claim: Maxwell 252 CLR at 599 [26]-[27].

The Full Court also held (at [52]) that the applicability of section 54 was just as relevant to circumstances in which another insurer sought recovery as when the insured made a claim under that policy because "contribution between insurers is founded in equitable principle… It is the existence of co-ordinate liabilities of two parties that gives a right of contribution. A payment under one policy relieves the other policy of what would be a liability were a claim to be made on it… Natural justice and equality underpin the right." 

Bibin v Mainfreight International Pty Ltd [2016] NSWCATCD 70

The decision of Member French in the New South Wales Civil and Administrative Tribunal provides an example of the evidential difficulties faced in small cargo damage claims.

The applicant had imported building products from China. At the time of despatch, the supplier had sent a very apologetic email to the applicant purchaser regarding damage which had been sustained to the products prior to shipment. The supplier apologised for the rough cutting of building panels and advised there would also be some damage on loading and unloading the shipping containers owing to the size of items shipped.

When the cargo arrived and was unpacked, the applicant refused delivery of much of the cargo, purchased replacement goods and brought a claim against Mainfreight for the cost of the goods, storage, customs clearance and port charges, replacement costs and for consequential costs, including additional rental costs and interest, a claim in excess of the Tribunal's AU$40,000 jurisdiction. It was conceded by the applicant that the Tribunal could not compensate it beyond AU$40,000 and to that extent abandoned the excess claim.

It was argued by Mainfreight that the Tribunal lacked jurisdiction to determine the dispute because the claim was one in the federal Admiralty jurisdiction as it concerned issues regarding international shipping. The Tribunal rejected this argument, the claim instead being one based on breach of the New South Wales Fair Trading Act and the Australian Consumer Law which arose from the unloading of the shipping containers.

However, the Tribunal found that while there was evidence that the arrived condition of the goods was worse than that on loading of the containers, there was insufficient evidence to discount the possibility of damage having been sustained during the voyage. There was also a lack of evidence of any fault or neglect on the part of Mainfreight in the manner in which the cargo was unloaded by its employees.

In all the circumstances, the applicant's claim was dismissed for lack of substantiation.


International decisions 


Oldendorff GmbH and Co KG v Sea Powerful II Special Maritime Enterprises & Ors (2016) EWHC 3212 

This case involved the sale of a cargo of 17 mt of iron ore to Xiamen C&D Minerals Co Ltd by SCIT Trading. It had a contract of affreightment with SCIT Services, who concluded a voyage charter with Oldendorff Carriers GmbH & Co KG for the carriage of cargo to China from Western Australia. Oldendorff Carriers had a long-term contract with Oldendorff GmbH & Co KG which in turn concluded a time charter trip with the owners of the "Zagora". 

A letter of indemnity seeking delivery of the cargo without production of the original bill of lading was provided by Xiamen, which had itself on-sold the cargo, ultimately, to Shanxi Haixin International Iron & Steel Co Ltd. 

Delivery of the cargo took place to Sea-Road Shipping Agency Co Ltd who had been appointed agent at the discharge port by Shanxi Haixin, and all the way up the chain to Oldendorff. The vessel had arrived at the discharge port on 25 December 2013 and discharge of the cargo was completed on 31 December 2013. The cargo was ultimately transported from Lanshan, the port of discharge, to the ultimate receiver between the 14 January and 8 February 2014. On 20 February 2014, the Bank of China paid the purchase price on behalf of Shanxi Haixin, who were not required to reimburse the Bank of China for 150 days. The Bank of China was in possession of the original bills of lading and arrested the vessel in Lanshan on 27 August 2014. The vessel was eventually released on 24 September 2014 when Oldendorff provided security to obtain its release, without prejudice to its rights to argue that the LOI had not been engaged. The bank's claim was therefore being litigated in China. The arbitrations and appeal therefrom were heard in London. 

Although the arbitrations, down the line from the owners to Xiamen, had all been consolidated, the only parties who were represented at the hearing before Teare J were the owners and the Oldendorff companies. The issue in all cases was whether the LOIs were engaged, i.e. were the parties who had sought delivery of the cargo without production of the bill of lading liable to indemnify those to whom they had addressed the letter of indemnity? Teare J found that they were and they were enforceable down the line of the chain of charters. The only factual-legal issue that might have prevented that finding related to the capacity in which the entity to whom delivery of the cargo was made, Sea-Road, was serving. Was it the agent of the ship or the receiver of the cargo? The Court found that Sea-Road had been appointed as agent for the cargo receiver, it being improbable that the owners appointed those agents for the purposes of the delivery of the cargo. The owners had thereby complied with the instructions contained in the letter of indemnity. 

Transgrain Shipping (Singapore) Pte Ltd v Yangste Navigation (Hong Kong) Co Ltd (MV "Yangste Xing Hua") (2016) EWHC 3132 

This case involved an issue of construction of the Inter-Club New York Produce Exchange Agreement 1996 ("ICA") and whether the term "act" in the phrase "act or neglect" means a culpable act in the sense of fault, or whether it means any act, whether culpable or not. 

The cargo in this case was soya bean meal being carried from South America to Iran. The vessel arrived off the discharge port in December 2012, but the charterers ordered the vessel to wait off the discharge port for over four months as they had not been paid for the cargo. The arbitrators had found "it seemed very clear that it actually suited the shippers/charterers, in money terms, to use the vessel as floating storage, at the receiver's expense, rather than unloading it ashore into a bonded warehouse". When ultimately discharged, the cargo in two of the holds was found to be lumpy and discoloured. The tribunal found that the monitoring of the cargo temperatures by the owners was not at fault and that the cause of the damage was a combination of the inherent nature of the cargo (and its oil and moisture content) together with the prolonged period at anchor at the discharge port. The delay was too prolonged, given the moisture content. 

Clause 8(d) of the ICA requires cargo claims to be apportioned on a 50/50 basis between charterers and owners, "unless there is clear and irrefutable evidence that the claim arose out of the act or neglect of the one or the other… in which case that party should bear 100% of the claim". 

Arbitrators had found that the proviso was engaged in this case and charterers should bear 100% of the consequences, despite finding that there was no "neglect" by charterers, in loading the cargo, "albeit that what in fact they loaded, together with instructions to wait outside the discharge port, was in all probability the cause of the damage…". They therefore had held that "act" was to be distinguished from something suggesting "fault, breach or neglect". 

It was submitted in the appeal to Teare J by charterers that "act" means "culpable act" and the phrase "act or neglect" compendiously meant "fault". 

Having examined the history of the ICA and other cases, Teare J found that the arbitrator's interpretation was correct; the word "act" in this context did not require fault. 

Vinnlustodin HF and Anor v Sea Tank Shipping AS (The "Aqasia") [2016] EWHC 2514 (Comm.)

This case was concerned with a claim for US$367,836 for damage suffered to a cargo of 2,000 tonnes of fish oil shipped in bulk for a lump sum freight. The carrier admitted liability but sought to limit its liability to £54,730.90 calculated with reference to the limitation of liability under Article IV Rule 5 of the Hague Rules of 100 pounds per metric tonne of cargo damaged. 

It was held by Sir Jeremy Cooke in the High Court in England that the word "unit" in Article IV Rule 5 referred to a physical unit for shipment and did not mean a unit of measurement or customary freight unit. Furthermore, he held that even if "unit" was capable of applying to bulk cargoes it could only apply to a "freight unit", and because the cargo was shipped for a lump sum there was no assistance to be gained by the carrier from such an interpretation. 

In reaching his conclusion, Cooke J followed the decision reached by Allsop J (as he then was) in the Federal Court of Australia in the case of El Greco (Australia) Pty Ltd v Mediterranean Shipping Co SA (2004) 2 Lloyds Rep 537. 

Kairos Shipping Limited and Anor v Enka AA and Co LLC & Ors (The "Atlantik Confidence") [2016] 2 Lloyds Rep 525 

This case concerned a challenge to an owner's right to limit its liability under the Limitation for Liability for Maritime Claims Convention 1976, which was successful. 

The vessel "Atlantik Confidence" sustained a fire in her engine room and sank a few days later after the crew had abandoned the ship. The owners sought a limitation decree but the subrogated insurers of the cargo contended that the owners were barred from claiming limitation by reason of their personal act or omission committed with intent to cause such loss under Article 4 of the Convention. 

The High Court of England (Teare J) held that the cargo interests had met the high burden of proof required under the Convention, which was likened to that of a hull underwriter seeking to prove scuttling, a standard which was not far short of the rigorous criminal standard (beyond reasonable doubt). 

Bahama Oil Refining Company International Limited v Owners of the Cape Bari Tankschiffahrts GMBH and Co KG (Bahamas) (The "Cape Bari") [2016] 2 Lloyds Rep 469

This was a decision of the Privy Council, arising on appeal from the Bahamas Court of Appeal which had held that the owners of the "Cape Bari" could not contract out of the right to limit liability under the 1976 Limitation Convention. The Privy Council reversed that decision in holding that it was permissible for vessel owners to contract out of or waive their statutory right of limitation under the 1989 Bahamas Act which gave effect to the Limitation Convention, but under the agreement between the parties the owners had not agreed to exclude their right to limit their liability. 

The facts giving rise to the dispute were that during a berthing operation, the "Cape Bari" collided with Sea Berth No. 10 at Freeport in Grand Bahamas. The Sea Berth was the property of the Bahamas Oil Refining Company International Limited (BORCO). Its claim was for about US$22 million. The limitation sum that the owners claimed to be entitled to rely on was about US$16.9 million. The entitlement to do so was dependent on whether the owner had waived its right to limit under the "Conditions of Use" which had been signed by the master with BORCO. The suggestion that it had waived its rights, relied principally on a widely drawn provision in the "Conditions of Use" (clause 4), by which the owner agreed to hold harmless and indemnify BORCO against any loss or damage which it incurred. The absence of any reference to the Convention in the "Conditions of Use", let alone in clause 4, made it impossible for it to be said that the agreement made it clear that the owners had intended to abandon or contract out of its rights under the Limitation Convention. Accordingly, they were entitled to limit their liability. 

MSC Mediterranean Shipping Co SA v Cottonex Anstalt [2016] 2 Lloyds Rep 494 

The principal facts in this case were set out in the Transport & Logistics News (30 September 2015) in which the decision of the first instance Judge was reported. Leggatt J had not permitted the owners to keep the contracts of carriage in force solely in order to claim demurrage, in circumstances in which various parcels of cotton were shipped from Bandar Abbas and Jebel Ali to Chittagong between April and June 2011. There had been a collapse in the value of the cargo and disputes between the shipper and the consignee resulting in the cargo not being collected at the port of discharge. 

The Court of Appeal found that the shipper was bound under the bill of lading to pay demurrage for the containers after the expiry of the allowable free time. The Court overturned the first instance decision which had held that the commercial purpose of the venture had been frustrated as early as 27 September 2011, but held that it had been so frustrated by 2 February 2012. Thus, the carrier could recover demurrage up to that date and the value of the containers on that date. 

Spar Shipping AS v Grand China Logistics Holding (Group) Co Ltd (The "Spar Capella", "Spar Vega" and "Spar Draco") [2016] 2 Lloyds Rep 447 

In Transport & Logistics News (30 September 2015), we reported on the first instance decision of Popplewell J in this case in the High Court in England, who did not follow the decision of Flaux J, his colleague, in the case of Kuwait Rocks Co v AMN Bulkcarriers (The "Astra") (2013) 2 Lloyds Rep 69. Flaux J had held that payment of hire in a time charter is a condition of the contract, breach of which entitles the innocent party to terminate the contract. 

Although finding that punctual payment of hire was not a condition of the three charter parties for the three vessels, Popplewell J had held that the charterers' conduct concerning the payment of hire was a renunciatory breach which the owner had accepted by exercising its contractual right to withdraw the vessel. The charterer appealed this ruling and on appeal the Court of Appeal confirmed Popplewell J's decision and overruled the "Astra" decision of Flaux J. The Court of Appeal found that the obligation to make punctual payment of hire was not a condition of the three charter parties involved but given the history of late payments, the amounts and delays involved—together with the absence of any concrete or reliable assurance from the charterer or their guarantor as to the future—it was reasonable to conclude that the charterer had renounced the charters. 

Regulus Ship Services Pte Ltd v Lundin Services BV and Anor (2016) 2 Lloyds Rep 612 

This decision of Phillips J in the English High Court arose from the towage contract on the Towcon form which provided that the Floating Production Storage and Offloading Vessel, which was to be towed, would be provided in "light ballast condition". It was held that the vessel was not in such a condition but that did not cause any delay to the voyage. The term "in light ballast condition" was held to mean: "the least amount of ballast with which the vessel could safely proceed on her voyage", as found by Andrew Smith J in the case of Ease Faith Ltd v Leonis Marine Management Ltd (2006) 1 Lloyds Rep 673. 

Connect Shipping Inc & Anor v Sveriges Anfgartygs Assurans Forening (The Swedish Club) and Ors (The "MV Renos") (2016) 2 Lloyds Rep 364 

This case, essentially, centred on whether or not the vessel was a constructive total loss in order to ascertain the indemnity to which the owners were entitled when the vessel MV "Renos" caught fire in August 2012. It was not until 1 February 2013 that the owners served a notice of abandonment on the insurers, of which the Swedish Club was the lead insurer under the hull and machinery policy, which incorporated the Institute Time Clauses - Hulls (1/10/83). 

There was no dispute that the casualty was an insured peril and the owners were entitled to be indemnified. The issue was the measure of the indemnity. The insurers contended that the claim was only for a partial loss but the owners contended that they were entitled to be indemnified on a constructive total loss basis. 

Knowles J held that the owners were entitled to be indemnified on the basis of a constructive total loss. It was found in particular that the notice of abandonment had not been given too late, despite section 62(3) of the Marine Insurance Act 1906 (UK) that it requires a notice of abandonment to be given "with reasonable diligence after the receipt of reliable information of the loss …", the insured was entitled to a reasonable time to make inquiry and the nature of the casualty was such that achieving reliable information of the loss was a complex task and took time. 

Atlasnavios-Navegacao, LDA v Navigators Insurance Co Ltd and Ors (The "B Atlantic") (2016) 2 Lloyds Rep 351 

At first instance it was held that the owners of the vessel were entitled to recover for a constructive total loss following the confiscation of their vessel by Venezuelan authorities. The confiscation had taken place when, on completion of loading of a cargo of coal in Lake Maracaibo, Venezuela, for discharge in Italy, the vessel was subject to an underwater inspection by divers who discovered three bags of cocaine strapped to the vessel's hull. That had occurred on 13 August 2007. The vessel was detained on 16 August 2007 and the crew were arrested. The master and second officer were charged with complicity in the drug smuggling. A notice of abandonment was served on 18 June 2008 and the vessel remained in detention until after the trial of the two officers who were convicted in August 2010 and the Court ordered the confiscation of the vessel. 

The insurers had denied liability in reliance on the following exception in clause 4.1.5 of the Institute War and Strikes Clauses Hull 1/10/83: 
 
arrest, restraint, detainment, confiscation or expropriation under quarantine regulations or by reason of infringement of any customs or trading regulations.
 
In the Court of Appeal, the Court sought to identify, initially, the proximate cause of the loss and after considering the authorities reached the view that the detainment of the vessel was caused both by the malicious act of the drug smugglers and by the detainment of the vessel by reason of the infringement of customs regulations, which infringement was constituted by the concealment of the drugs. It was then necessary to consider whether clause 4.1.5 excluded liability. The leading judgment is given by Lord Justice Clarke, with whom the other two Lord Justices agreed, and it was held that clause 4.1.5 operated to exclude liability, and as one of the two identified causes of loss was excluded, insurers were not liable. 

Imperator I Maritime Co Bunge SA (The "Coral Seas") (2016) 2 Lloyds Rep 293 

This case was an appeal from arbitrators who had found that the vessel had not maintained the warranted speed under the charter party, that the reason it did not was underwater fouling of the hull and propeller by marine growth which had developed during a lengthy stay in tropical waters, and that the marine growth could not be regarded as unusual or unexpected but constituted fair wear and tear incurred in the ordinary course of trading. The arbitrators had concluded that the speed warranty included such conditions and it was the owners/head charterers who had assumed the risk of a fall-off in performance as a result of bottom fouling consequential upon compliance with the head charterers'/sub-charterers' lawful orders. Mr Justice Phillips in the High Court in England dismissed the appeals. While accepting that a shipowner had an implied right of indemnity against a time charterer in respect of the consequences of complying with the charterer's orders as to the employment of the ship, even if the orders were ones the charterer was contractually entitled to give, such indemnity, he held, did not extend to the usual perils of the voyage in respect of which the owner must be taken to have accepted the risk. 

In concluding his judgment, Phillips J said: 
 
…I consider that the proposition stated in para 3.75 of Time Charters is too widely stated. Where a vessel has underperformed, it is not a defence to a claim on a continuing performance warranty for the owners to prove that the underperformance resulted from compliance with the time charterers' orders unless the underperformance was caused by a risk which the owners had not contractually assumed and in respect of which they are entitled to be indemnified by the charterers.

Volcafe Ltd and Ors v Compania Sud Americana de Vapores SA (trading as CSAV) (2016) EWCA Civ 1103 

We reported on the first instance decision of this case in Transport & Logistics News (30 September 2015) in which a cargo claimant had succeeded in recovering damages for condensate damage to nine consignments of washed Colombian green coffee. 

The Court of Appeal allowed the appeal. The principal judgment was given by Justice Flaux with whom the other two Justices agreed. The carrier had denied liability and relied on inherent vice by way of defence to the claim. The cargo owner asserted that the carrier had failed to use adequate and/or sufficient kraft paper, strong corrugated paper or other insulating materials to line the containers and protect the cargoes from condensation.

The case turned on where the burden of proof lay. Was it necessary for the carrier to disprove negligence or was it up to the claimant cargo owner to prove the carrier's negligence? Flaux J regarded the first instance Judge, David Donaldson QC, as having taken the view that "once the claimants had shown that the coffee bags were delivered in a damaged condition the onus was on the carrier to establish the inherent vice or inevitability of damage and to disprove negligence". 

On the appeal this was rejected. Interestingly, two Australian High Court decisions were discussed in some detail in Flaux J's judgment. The first was the seminal High Court decision of Shipping Corporation of India v Gamlen Chemical Co (1980) 147 C.L.R. 142. The High Court accepted in that case that the burden of proof was as it had been set out in the Glendarroch (1894) P226 which, as Flaux J said, contained "a classic exposition of the incidence of the burden of proof in cases of carriage of goods by sea at common law…". Lord Esher MR had said in that case: 
 
…I think that according to the ordinary course of practice each party would have to prove the part of the matter which lies upon him. The plaintiffs would have to prove the contract and the non-delivery. If they leave that in doubt, of course they fail. The defendant's answer is, "Yes; but the case was brought within the exception - within its ordinary meaning." That lies upon them. Then the plaintiffs have a right to say there are exceptional circumstances, viz., that the damage was brought about by the negligence of the defendant's servants and it seems to me that it is for the plaintiffs to make out that second exception.

At the conclusion of their joint judgment in the Gamlen case, Mason and Wilson JJ said: 
 
We may say, in passing, that we agree with Samuels JA in the Court of Appeal when he points out that the correct sequence of pleading is set out in the judgment of Lord Esher in the Glendarroch.

Stephen J, also in the Gamlen case, referred to what Professor Bill Tetley said in his book on Marine Cargo Claims (Second Ed) 1978 where he described the order of proof which prevails in all Hague Rules cargo claims: "a cargo owner must prove his loss, the carrier may then establish facts entitling him to rely upon exculpatory clauses, of which peril of the sea is one, but the cargo owner may then nevertheless succeed by proof of negligence, for example, proof of improper stowage". 

The other High Court decision referred to by Flaux J is the Bunga Seroja (1999) 1 Lloyds Rep 512 which was also a peril of the seas case, where three of the six judges were supportive of what the High Court had said in the earlier Gamlen decision. 

Flaux J then turned to consider the defence of inherent vice where he found also that the first instance judge had fallen into error. He went on to stress that inherent vice and inevitability of damage are not the same and referred to the well-known decisions in Soya GmbH v White (1982) 2 Lloyds Rep 136 where a loss by inherent vice was said to be "one which is approximately caused by the natural behaviour of the subject matter insured, being what it is, in the circumstances in which it was expected to be carried", and in which in the House of Lords (1983) 1 Lloyds Rep 122, Lord Diplock said "Inherent vice refers to a peril by which a loss is approximately caused; it is not descriptive of the loss itself. It means the risk of deterioration of the goods shipped as a result of their natural behaviour in the ordinary course of the contemplated voyage without the intervention of any fortuitous external act or casualty". 

The second case that Flaux J referred to was Noten B.V. v Harding (1990) 2 Lloyds Rep 283 where a consignment of gloves carried in containers suffered moisture damage during the transit and the trial judge found that the moisture came from the gloves themselves and not from the air inside the containers at the time they were stuffed. The Court of Appeal had found in that case that the proximate cause of the damage was inherent vice. 

In reliance on these decisions, Flaux J was satisfied that the carrier made out a defence of inherent vice under Article IV Rule 2(m) of the Hague Rules. The trial judge should then have gone on to consider whether or not that defence had been negatived by reason of the carrier not having employed a sound system in the carriage of the goods, the legal burden of which was on the claimants to establish. Flaux J identified the word "properly" under Article III Rule 2, in the context of the carrier's obligation to carry and care for the goods "properly" as meaning carrying "in accordance with a sound system". He emphasised that that does not require the carrier to employ a system which would prevent damage. The Court of Appeal found that the judge had been in error to conclude that at the time these consignments were shipped there was no general container industry practice in relation to the dressing of unventilated containers in preparation for the carriage of bagged coffee beans, and that the cargo owners had not proved that the carrier had been negligent in that regard. The Court of Appeal also found that the judge's rejection of the defence which was sought to show that the weight of the evidence pointed to minor condensation damage to coffee and bags carried in unventilated containers, whatever lining is used pursuant to the general practice of the container trade. 

Interestingly, one aspect of the first instance decision which found favour with the Court of Appeal was that relating to the "temporal scope of the Hague Rules". At first instance the judge had found that the actions by the carrier in lining and stuffing the containers were part of the loading operation. The Court of Appeal quoted the well-known passage of Devlin J in Pyrene v Scindia (1954) 2 QB 402 in which the "tackle to tackle" rule had been modestly extended to catch cases in which the goods were lifted from the quay side by the vessel's own cranes. The Hague Rules could apply to that loading operation as well as once the goods had crossed the ship's rail. The Court of Appeal considered that Devlin J's analysis was also apt where the carrier had performed services such as those carried out in relation to these containers in this case. By shipping the goods on LCL/FCL terms, the Court of Appeal said that the carrier "assumed responsibility for the dressing and stuffing of the containers, so that those services formed part of the operation of "loading", to which the Hague Rules applied". 

Star Polaris LLC v HHIC-PHIL Inc (2016) EWHC 2941 

This was a judgment of Sir Jeremy Cooke, being an appeal from an award from three arbitrators which included two QCs and Sir David Steele, a retired admiralty judge from the High Court in England. The appeal raised two questions: 
  1. what is the correct construction of the phrase "consequential or special losses, damages or expenses" in Article IX.4(a) of the ship building contract in issue, and in particular, does that phrase mean such losses, damages or expenses as fall within the second limb of Hadley v Baxendale (1854) 9 Ex 341? Alternatively, does the phrase have a "cause and effect" meaning, as held by the tribunal? and 
  2. if the tribunal is right as to the meaning of "consequential or special losses, damages or expenses", on a proper construction of Article IX.4(a) does diminution in value constitute a "consequential or special loss"?

The facts giving rise to those questions were that the "Star Polaris" had been built by the defendant yard and delivered to the buyer on 14 November 2011. On 29 June 2012, it suffered a serious engine failure. The buyer commenced arbitration proceedings against the yard and apart from the cost of repairs and other expenses incurred, it sought to make a claim for diminution in value of the vessel. The tribunal determined that such a claim would fail if made. 

In their award, the tribunal had accepted that, on the authorities, the meaning of "consequential loss" in an exemption clause, usually meant the exclusion of losses falling within the second limb of Hadley v Baxendale. But unless the particular contractual provision with which they were concerned had been the subject of special judicial consideration, they were not bound to follow such decisions. In the circumstance, the clause had to be construed on its own wording in the context of the particular agreement as a whole and its particular factual background. In essence, as explained by Cooke J, the arbitrators reached their decision on the basis that the yard's obligations in respect of the guarantee, were only to repair or replace defective items of the kind described in the Article and the physical damage caused thereby with all other financial consequences falling on the buyer. They concluded that, "on a proper reading of paragraph 4, it is clear that the extent of the yard's liability is governed not just by paragraph 4 but by Article IX as a whole". 

Article IX sets out the 12 month guarantee of material and workmanship which represented the warranty of quality to which the heading of the Article referred. Paragraph 3 set out the positive obligations of the yard under the guarantee of defects. 

As explained by Flaux J, the arbitrators had held in the context of this contract "where the only positive obligations assumed under the guarantee were the repair or replacement of defects and physical damage caused by such defects, that consequential or special losses had a wider meaning than the second limb of Hadley v Baxendale."

Cooke J agreed with the arbitrators therefore that "consequential or special losses, damages or expenses" does not mean such losses, damages or expenses as fall within the second limb of Hadley v Baxendale but does have the wider meaning of financial losses caused by guaranteed defects, above and beyond the cost of replacement and repair of civil damage". 

Simon Rainey QC, in a recent article, has commented that this decision "illustrates that the fact that the wording has a well-settled meaning will not always provide the answer. One cannot simply fall back on the way in which the phrase has previously been interpreted in standalone contexts and expect to arrive at the same result."

The well-settled meaning to which he referred was that the concept of "consequential loss" being construed "as not covering loss which directly and naturally results in the ordinary course of events from the breach and which would be ordinarily foreseeable and which would be recoverable only if the special circumstances out of which it arises were known to the parties when contracting." In lawyer speak, it covers Hadley v Baxendale "limb 2" but not "limb 1". 

Aviation 


Changes at Civil Aviation Safety Authority

Following the resignation of Mark Skidmore, Shane Carmody has been appointed as Acting Director of Aviation Safety and Chief Executive Officer of CASA.


Drones regulation

New regulations came into force on 29 September 2016 to govern the use of Remotely Piloted Aircraft (RPAs), with different requirements for RPAs of different weight classifications. 

Micro RPAs (100g or less) are automatically excluded from the regulatory framework.

Very Small RPAs (100g-2kg) are excluded if operated for sport or recreation or within the Standard RPA Operating Conditions - which require operators to:
  • fly during daylight hours within visual line of sight
  • not fly higher than 120 metres
  • keep 30 metres away from other people
  • keep at least 5.5km away from an aerodrome
  • not fly over populous areas
  • not fly over prohibited or restricted areas or where emergency operations are under way
  • only fly one RPA at a time
Small (2kg-25kg), Medium (25kg-150kg) and Large (150kg and above) RPAs have greater restrictions, particularly where being used for commercial purposes.

In response to industry concerns, Minister Darren Chester announced in October 2016 that a safety review of the new regulations will be conducted.


Second Sydney Airport

Having completed an Environmental Impact Statement in September 2016, progress is now being made on the implementation of the Australian government's decision to build a new airport in western Sydney at Badgerys Creek. On 20 December 2016, the government issued a Notice of Intention to the owners of Sydney airport, setting out the contractual terms for developing and operating the Western Sydney Airport. The owners of Sydney Airport have the right of first refusal to build and operate the new airport. AU$115 million was committed in the 2016 Federal budget for initial planning and preparation work.


MH370 search suspended

In mid-January, the underwater search for the wreckage of Malaysian Airlines flight MH370 was suspended after it was not located in the 120,000 square kilometre search zone in the southern Indian Ocean.


Australian decisions

Lam v Rolls Royce PLC (No 5) [2016] NSWSC 1332

Justice Beech-Jones in the New South Wales Supreme Court has dismissed the claims of various group members who had failed to take steps to register their claims as part of a class action arising from the Qantas A380 flight from Singapore that experienced an engine failure on 4 November 2010. They had failed to meet a deadline of 3 June 2015 to register their interest and a later deadline of 1 August 2016, and Rolls Royce sought orders to dismiss any such claims.

Reliance was placed on section 183 of the Civil Procedure Act 2005 (NSW), which permits the making of orders "appropriate or necessary to ensure that justice is done in the proceedings" and section 182, which related to suspension of limitation periods.

Bartlett v Weatherill [2017] NSWSC 31

This case concerned a claim made by the purchaser of a Cessna 400 aircraft by Dr Weatherill who sought to recover damages from a licensed aircraft maintenance engineer who had provided him with an estimate of $52,395 to bring an aircraft which Dr Weatherill had decided to purchase in the United States to Australia. When the cost actually incurred in bringing it to Australia amounted to $120,000, Dr Weatherill claimed damages for misleading and deceptive conduct in breach of section 18 of the Australian Consumer Law.

He succeeded in the Local Court, the Magistrate finding the estimate was misleading or deceptive or likely to mislead or deceive and a reasonable estimate would have been $86,000. However, the Magistrate rejected a claim for the difference between the costs actually incurred and the estimate, as he said that Dr Weatherill now had a valuable asset and the only compensation should be for the loss of use of money over time while taking into account the increasing value of the asset.

On appeal, Justice Adamson of the New South Wales Supreme Court found that Dr Weatherill was obliged to prove he had suffered actual loss by the purchase in reliance on the estimate of costs and in this case he had spent less than the value of the aircraft in Australia and so was better off. He had accordingly suffered no recoverable loss.

Barker v Commonwealth of Australia [2016] QSC 310

The plaintiff, Mr Barker, was a passenger on a flight from Port Moresby to Brisbane in November 2011 who had been drinking heavily before and during the flight. Cabin crew had requested that he cease drinking during the flight. Upon arriving at Brisbane airport, Mr Barker's behaviour was reported to ground staff. Subsequently, a member of the Australian Federal Police (AFP), two customs officers and two protective services officers (PSOs) attended to investigate. Mr Barker was directed to remain on the tarmac while the investigation took place. 

Accounts provided by witnesses suggested that Mr Barker acted in a menacing and threatening manner towards the officers and airline staff while waiting on the tarmac. He repeatedly abused witnesses and made threats towards them and their family members, and was observed to be acting aggressively and clenching his fists. 

The AFP officer decided to arrest Mr Barker. With the assistance of one of the PSOs, he took hold of Mr Barker's arms. Mr Barker resisted, trying to break free of the officers' grip and began yelling and screaming. He was then was taken to the ground by the officers and handcuffed behind his back. 

Mr Barker alleged that he suffered injury to his left leg and ankle during the arrest. He claimed damages for the torts of false imprisonment, assault and battery, and negligence arguing that the Commonwealth of Australia was vicariously liable for the actions of the PSOs and the AFP officer. 

Mr Barker did not challenge the validity of his arrest, but he claimed that he was falsely imprisoned in the period between exiting the plane and his arrest where he was asked to remain on the tarmac by the PSO. In support of his claim in assault and battery, he argued that the force used by the officers in conducting the arrest was unreasonable and unnecessary and therefore unauthorised by section 14B of the Australian Federal Police Act 1979 (Cth)

In his evidence, Mr Barker disputed that the was drunk or heavily affected by alcohol. Although he accepted he had used bad language, he denied attempting to threaten or physically intimidate witnesses and disputed the allegations that he resisted arrest. 

Referring to Mr Barker's medical records, Jackson J noted that on a number of occasions, clinical notes reported that Mr Barker was unable to recall the mechanism of his injury due to being affected by alcohol. Rejecting Mr Barker's version of events, His Honour accepted that the plaintiff was heavily affected by alcohol at the time of his arrest and that he had a very limited recollection of his arrest.

His Honour went on to find that there was no serious case of false imprisonment on the facts as Mr Barker was merely asked to wait while the AFP officer investigated the complaint. Mr Barker remained on the tarmac voluntarily and did not ask whether he was free to leave or insist on being able to leave. A mere direction to wait on the tarmac did not amount to false imprisonment. His Honour found it unnecessary to decide whether the defendant was entitled to rely on section 84(a) of the Aviation Transport Security Act 2004 as authorising the AFP officer to direct the plaintiff to stop without undertaking a search of the plaintiff, or whether the AFP officer reasonably believed that it was necessary to stop the plaintiff for the purposes of safeguarding against unlawful interference with aviation in accordance with the meaning of that term as defined in section 10 of that Act.

In relation to the claim of assault and battery, His Honour found that the force used by the officers in arresting Mr Barker was not unreasonable or unnecessary in circumstances where Mr Barker had resisted arrest and sought to break free. He accepted that Mr Barker had been abusive, made threatening comments and displayed signs of rage in the lead up to his arrest. 

Relying on the cases of Dowse v New South Wales [2012] NSWCA 337 and State of Victoria v Richards [2010] VSCA 113, His Honour also found that the defendant owed no duty of care to the plaintiff in the circumstances and dismissed the claim in negligence. 

Accordingly, Jackson J ordered that the plaintiff's claim be dismissed and ordered costs in favour of the defendant. 

Bellamy v Civil Aviation Safety Authority [2016] AATA 956

The applicant, Mr Bellamy, was the holder of a Private Pilot Licence - Aeroplane category (PPL) issued to him in August 2002. Mr Bellamy also owned a McCulloch J2 gyroplane (Gyroplane). On 16 July 2010, Mr Bellamy was conducting ground runs at Bendigo airport when he lost control of the Gyroplane, causing its rotor to strike the runway and destroy the aircraft. 

CASA investigated the incident and subsequently initiated proceedings in the Bendigo Magistrates’ Court against Mr Bellamy in relation to charges of reckless operation of an aircraft under section 20A of the Civil Aviation Act 1988 (Cth). Mr Bellamy was also charged with a breach of section 145.1 of the Criminal Code Act 1995 (Cth) for dishonestly providing a false document to a public official. He was found guilty of the false document offence but not guilty of reckless operation of an aircraft offence. CASA then cancelled Mr Bellamy's PPL on the basis that he was not a fit and proper person to hold it. 

Mr Bellamy sought to have CASA's decision to cancel his PPL reviewed by the Administrative Appeals Tribunal (AAT). The AAT noted that although the Gyroplane was registered, it had not been issued with a certificate of airworthiness or a maintenance release as required under the Civil Aviation Regulations 1998 (Cth) (CAR), partly because he was unable to gain approval from CASA to various modifications he had made to the Gyroplane. Although Mr Bellamy held a degree in aircraft engineering, he did not hold the relevant licence and was therefore not permitted to perform maintenance on the Gyroplane under regulation 42ZC of the CAR. 

Shortly prior to the accident, Mr Bellamy had filled out a maintenance release form which he was not authorised to issue because he lacked the relevant licence. The AAT accepted that parts of this document were "clearly misleading" and noted that the Magistrates’ Court found Mr Bellamy guilty of knowingly using a false document with the intention of dishonestly inducing a person in his capacity as a public official to accept it as genuine and if so accepted, to dishonestly influence the exercise of a function of a public official contrary to subsection 145.1 (1) of the Criminal Code Act. However, they found that Mr Bellamy had not blatantly disregarded the statutory provisions but merely misunderstood them. In fact, he was not actually required to obtain a maintenance release at all for the purposes of ground operations under section 29 of the Civil Aviation Act.

In cancelling Mr Bellamy's licence, the AAT also noted that CASA had taken into account Mr Bellamy's charge of reckless operation of an aircraft despite the fact that the Magistrates' Court had found him not guilty of that offence. Referring to section 20A(2) of the Civil Aviation Act, the AAT stated that CASA's reliance on this section was incorrect as a matter of law because the section could only be enlivened if the aircraft was operated in a manner which endangered "another person" not including the operator of the aircraft. The Senior Member considered CASA's reliance on this charge to be inappropriate in circumstances where it had not been upheld by the Magistrate.

The AAT then referred to the interpretation of the expression of "fit and proper" as set out in the High Court decision of Australian Broadcasting Tribunal v Bond [1990] HCA 33 and stated that the term takes its meaning from the context in which it is applied. In this case, the activity which CASA should have been concerned with was Mr Bellamy's "operation of a fixed wing aeroplane while exercising the privileges of his PPL". 

Senior Member Fice found that CASA had failed to demonstrate that Mr Bellamy's conduct in restoring and testing the Gyroplane would justify a cancellation of his fixed wing PPL, because there was nothing in his conduct which would suggest that he would not be more careful to follow legislative provisions regarding the operation of fixed wing aircraft. 

The AAT set aside the decision to cancel Mr Bellamy's licence as there was no sound basis upon which CASA could conclude that he was not a fit and proper person to hold a PPL. A key factor in the AAT's decision was that the conduct which CASA relied on in cancelling Mr Bellamy's PPL all related to his operation of the Gyroplane rather than fixed wing aeroplanes to which the licence related. Further, it was the AAT's opinion that the regulatory material applying to Mr Bellamy's situation was not completely clear, and although Mr Bellamy had misunderstood them, he had taken some considerable effort in attempting to comply with the regulatory regime. 

Road 


Heavy Vehicle National Law

The National Transport Commission has recently noted in its National Transport Reform Implementation Monitoring Report that progress in the 2015/16 year has included all participating jurisdictions (save for WA and Northern Territory) having now adopted the Heavy Vehicle National Law.


Dangerous Goods Code

The Australian Code for the Transport of Dangerous Goods by Road & Rail, Edition 7.5 takes effect from 1 March 2017.

Rail

Western Australia has passed the Rail Safety National Law and Queensland is in the course of implementation in that state. 

Unfair contract terms and the Australian Consumer Law 

The reforms to the Australian Consumer Law relating to unfair terms in contracts with small businesses have now been in force since 12 November 2016. In recent times, many logistics operators, customs brokers, freight forwarders and others in the transport logistics chain have undertaken the process of having their standard terms reviewed to identify whether they may fall foul of the new provisions. There are many standard clauses which may be regarded as "unfair", including clauses which exclude liability in all circumstances and which unreasonably reduce the contractual timebar from six years to say nine months. 

Some small business customers are already relying on the new provisions when responding to attempts, for example, by logistics companies, to defend liability for damage to goods on the basis of their standard terms. As far as we are aware, there have not yet been any reported decisions in Australia regarding what may or may not be considered an "unfair" term for the purposes of the new provisions. However, it is only a matter of time, noting that courts will look to each set of terms, and the circumstances of their incorporation, on a case-by-case basis. 

For more detail regarding the reforms, we recommend that you review Andrew Probert's detailed bulletin of 22 January 2016 entitled Unfair contract terms: repercussions for the transport sector. If industry participants with standard terms have not yet had them reviewed, a lawyer is able to assist.

Conferences 

The Comité Maritime International (CMI) will be holding its annual Assembly meeting together with a half-day seminar arranged by the Italian Maritime Law Association on 8 September 2017 in Genoa. 

The Aviation Law Association of Australia and New Zealand (ALAANZ) will hold its annual conference between 3-5 May 2017 in Auckland, New Zealand.

The Maritime Law Association of Australia and New Zealand (MLAANZ) will hold its annual conference between 4-6 October 2017 in Melbourne.

This article has been published by Colin Biggers & Paisley for information and education purposes only and is a general summary of the topic(s) presented. This article is not specific legal or financial advice. Please seek your own legal or financial advice for any questions you may have. All information contained in this article is subject to change. Colin Biggers & Paisley cannot be held responsible for any liability whatsoever, or for any loss howsoever arising from any reliance upon the contents of this article.​

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