Daina Shipping Company v Te Runanga O Ngati Awa

• Jurisdiction: New Zealand
• Judge: Woodhouse J
• Judgment Date: 15 March 2013
• Neutral Citation: [2013] NZHC 500
• Docket Number: CIV-2012-470-838
• Court: High Court
• Date: 15 March 2013

In the Matter of a claim for limitation under Part 7 of the Maritime Transport Act 1994

Between

Daina Shipping Company

First Plaintiff

and

Costamare Shipping Company Sa

Second Plaintiff

and

Ciel Shipmanagement Sa

Third Plaintiff

and

The Swedish Club

Fourth Plaintiff

and

Te Runanga O Ngati Awa

First Defendant

and

Te Runanga O Ngati Te Rangi Iwi Trust

Second Defendant

and

Nevan Lancaster

Third Defendant

and

All Persons Claiming or Being Entitled to Claim Damages by Reason of the Grounding of the Containership Mv Rena on the Astrolabe Reef Off the Bay of Plenty, New Zealand, at 0218 Hours New Zealand Time On 5 October 2011

[2013] NZHC 500

CIV-2012-470-838

IN THE HIGH COURT OF NEW ZEALAND

TAURANGA REGISTRY

Application for order under Part 7 Maritime Transport 1994 (“MTA”) (liability of ship owners and others) to limit liability of ship owners in respect and loss, damage or injury caused by the grounding of the container vessel Rena — third defendant was claiming for loss to his business as a result of oil pollution closing the beach — third defendant had applied for disclosure under r25.26(5) High Court Rules (plaintiff must apply to court within 5 working days) — apparent drafting error in s89 MTA which did not expressly state that an owner could apply for an order authorising the constitution of a limitation fund — whether third defendant had sufficient information already available to him to enable him to decide whether to dispute the limitation application — whether third defendant could establish required elements under s85(2) MTA (intention to cause loss or injury or damage or recklessness accompanied by knowledge that loss would probably result) — whether test had been met for correction of alleged drafting error — whether the High Court had jurisdiction to authorise a limitation fund on an owner's application.

Counsel:

Mr M Ring QC, Barrister, Auckland and Mr P David, Barrister, Auckland

Mr N Davidson QC, Barrister, Christchurch and Mr M Heard, LeeSalmonLong, Solicitors, Auckland

Counsel:

M Ring QC, P David and M McCarthy for the Plaintiffs

No appearance for the First Defendant, Second Defendant or other claimants

N Davidson QC, M Heard and R Makgill for the Third Defendant

JUDGMENT (NO. 2) OF Woodhouse J

1 On 5 October 2011 the ship Rena ran aground on Astrolabe Reef (Otaiiti) when en route to the port of Tauranga. Astrolabe Reef is about 13 nautical miles northeast of Mount Maunganui, near Tauranga. The Rena was a container ship with a gross weight of 37,209 tonnes. She could not be removed from the reef. Sometime after the grounding she broke in two. In addition to the loss of the ship, and loss of or damage to cargo, containers were lost overboard and oil was discharged into the sea. Some of the oil was washed ashore onto nearby beaches.

2 The plaintiffs have applied for an order under Part 7 of the Maritime Transport Act 1994 (the Act) that they are entitled to limit their liability in respect of claims arising from the grounding of the Rena. I will refer to this as the “limitation application”.

3 The first plaintiff was the registered owner of the Rena. The second and third plaintiffs are joined as companies which provided management services for the owner and for the ship respectively. The fourth plaintiff is the liability insurer of the first plaintiff. 1

4 The third defendant, Mr Lancaster, has filed a notice of appearance. Mr Lancaster claims he suffered loss as a result of the grounding. He has not given notice of opposition to the plaintiffs' application for a limitation order. He has applied, under r 25.26(5) of the High Court Rules, for directions requiring the plaintiffs to provide a number of documents on the grounds that he does not have enough information to enable him to decide whether or not to dispute the plaintiffs' application. The plaintiffs oppose Mr Lancaster's application. I will refer to Mr Lancaster's application as the “disclosure application”.

5 The fourth plaintiff also applied for an order authorising it to constitute a limitation fund for all claims falling within Part 7 of the Act. An order to that effect was made on 14 December 2012. 2 Reasons for the order were not given at the time. They are provided in this judgment.

Outline of issues

6 The limitation and disclosure applications are linked in two ways. The first is procedural in nature. The disclosure application needs to be disposed of, one way or the other, to determine the scope of the limitation application. If, in the end, there is no opposition to the limitation application the Court “must” make a limitation order. If Mr Lancaster opposes the limitation application there will need to be a further hearing. 3 The other link between the two applications is that, to decide whether Mr Lancaster does not have sufficient information, regard must be had to the substantive law relating to, and the policy underlying, the entitlement of ship owners and others to limit liability, and to the test to be met by a party contending that there should be no limitation of liability.

7 The broad issue that arises on Mr Lancaster's disclosure application is whether the information that is already available to him is sufficient to enable him to decide whether to dispute the limitation application having regard to the substantive limitation law, the policy underlying that law, and the rules of Court, and with these matters further assessed in relation to Mr Lancaster's claim.

8 The primary question that arose on the limitation fund application was whether there is jurisdiction to make an order for the establishment of a limitation fund. I concluded that there is jurisdiction. In coming to this conclusion I have not followed another New Zealand decision. 4

The casualty: why the Rena ran aground

9 Following the grounding of the Rena, Maritime New Zealand undertook an investigation into the circumstances leading to the casualty. Subsequently the master and second officer of the Rena were charged with two offences: an offence against s 65(1)(a) of the Act of operating a ship in a manner which caused unnecessary danger or risk; and an offence under the Resource Management Act 1994 related to

the discharge of contaminants from the ship into the sea. Maritime New Zealand obtained a substantial amount of information for the purpose of the prosecutions. The summary of facts for the prosecution is 46 pages in length

10 The master and the second officer pleaded guilty and were sentenced by Judge Wolff in the District Court at Tauranga on 25 May 2012. 5 The summary of facts and the Judge's sentencing notes record that it was the acts and omissions, including decisions, of the master and second officer that led to the grounding. The Rena was sailing from Napier to Tauranga. On the voyage, as the Judge put it, the master became “obsessed with the need to arrive at the pilot station outside Tauranga Harbour by 3.00 am”. The Judge said that this “set in train a … series of events that ultimately resulted in” the grounding on the reef. 6

11 I will summarise the relevant facts from the summary of facts. This is taken from a summary in the submissions for the plaintiffs, which I am satisfied sufficiently captures the essential facts of relevance. In order to ensure the 0300hrs arrival, the master had sanctioned various shortcuts that departed from the vessel's passage plan. At 0018hrs the vessel's course was back consistent with the passage plan, and on track to arrive at the pilot station by 0300hrs, although this would have been close. At 0027hrs Port of Tauranga radioed the Rena for an update on the vessel's progress and suggested that the vessel proceed at full speed. The second officer gave Port of Tauranga an ETA of 0300hrs. At about 0135hrs the second officer, without the prior knowledge of the master, as a further shortcut initiated what was the last course change. This put the vessel on a direct collision course with the reef. Self-evidently, this was a substantial deviation from the passage plan. The master then failed to identify the problem until the vessel actually struck the reef at 0214hrs, some 40 minutes later. Factors in the final casualty included failing to plot the Rena's position accurately or at all, relying on GPS, and failing to consult charts and other resources available on board which clearly and accurately showed the reef and its position.

12 The first plaintiff was also charged with an offence under the Resource Management Act arising out of the spillage of oil. The first plaintiff pleaded guilty and was also sentenced by Judge Wolff. 7 At the beginning of his sentencing comments the Judge said:

[3] The actual cause of the collision with the reef was the result of poor navigational skills of the captain and second mate and a rush on their part to reach Tauranga, which proved to be an unnecessary rush. At no point during the course of the hearing in relation to them, or this, has there been any suggestion that the present defendant had put any pressure of time, or of operational requirements, on those persons actually responsible for the ship running aground, and that needs to be borne in mind.

[4] It also needs to be borne in mind that this is a single charge and that it is one of strict liability. That means that the owner cannot escape liability in such circumstances.

The information available to Mr Lancaster: the information he seeks

13 The information referred to in the preceding section, being the summaries of facts prepared by Maritime New Zealand and the sentencing notes, is all available to Mr Lancaster. Copies of the documents were in fact annexed to an affidavit in support of his application. The deponent, a law clerk employed by Mr Lancaster's solicitors, records that...