N11574

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

WS NO. 31 OF 2024 (IECMS-COMM)

BETWEEN:
NORTH FLY DEVELOPMENT CORPORATION LIMITED 
Plaintiff

AND:
STEAMSHIPS LIMITED TRADING AS CONSORT EXPRESS LINES 
First Defendant

AND:
KIUNGA STEVEDORING COMPANY LIMITED
Second Defendant

WAIGANI: COATES J
7 NOVEMBER 2025

CONTRACT – Shipping industry - Agreement covering wharf usage – Dispute over storage of containers - Interpretation of clause 3 of agreement – Implied term by custom.

Counsel
J Sunungu, for the plaintiff
G Lakati & T Tavaperry, for the defendants

DECISION
1.	BY THE COURT: The plaintiff owns the Kiunga Wharf (the wharf) on the Fly River at Kiunga Town, Western Province.

2.	The first defendant, a shipping company, has been berthing and using the wharf for commercial shipping purposes since the early 1980s.

3.	The second defendant conducts stevedoring activities at the wharf, and while both the first and second defendants are subsidiary companies of Steamships Trading Limited, their commercial activities in this matter are separate from the parent company which is not involved in these proceedings. 

4.	 A dispute exists between the plaintiff and the defendants over wharf usage, and the wharf includes the surrounding land under a disputed written agreement, with the court being asked to interpret clause 3 of their governing agreement.

CONTEXT OF DISPUTE

5.	From mid-2022, the second defendant unloaded 20-foot shipping containers belonging to the first defendant at the wharf for storage. It is alleged by the defendants that the containers come from the Duwobi Wharf, about 35 kilometres away, for storage, although the plaintiff disputes that they all come from there, the court being told the Duwobi Wharf storage area was full.

6.	I am satisfied that the origin of the containers is irrelevant to the decision here.

7.	No figure as to the number of containers was given.

8.	The plaintiff began charging the first defendant K150 per day per container, as storage fees.

9.	The first defendant paid 10 invoices issued to it between July to October 2022, totalling K149,490.

10.	The first defendant has refused to pay further invoices issued between November 2022 and February, totalling K656,535.

11.	After a negotiation, the first defendant requested and was reissued invoices totalling K395,670.

12.	The amount has not been paid.

13.	Proceedings were filed with claims and cross-claims as to monies owed and mediation was ordered. This hearing follows mediation, the parties agreeing that interpretation of the agreement was required.

INTEPRETATION

14.	In their interpretation of the governing agreement, the plaintiff claims the defendants are not authorised to store shipping containers on its land, free of charge.

15.	The defendants allege that the agreement allows the second defendant, its invitees, agents and clients to use the plaintiff’s wharf for free, with no costs or charges or fees.

16.	Both parties now seek interpretation of clause 3 of the agreement.

17.	Interpretation of contractual clauses, like interpretation of statutes, follow a similar process.

18.	The starting point is whether on the face of the particular clauses under scrutiny, the meaning is apparent.

19.	If it is not, can a term of a contract be implied, either from customary usage pertaining to a particular style of business or industry, or from other facts of relevance to the parties.

20.	Briefly, the agreement, a copy of which is attached to the affidavit of Mr Greg Kettleton filed 28 February 2025, is between the plaintiff and the second defendant.

21.	In this matter, the original dispute was between the plaintiff and the first defendant, who was not a signatory to the agreement.

22.	It was only later that the first defendant sought to have the second defendant joined in order to claim the relationship between the two, under the wording of the agreement, authorised it to store the containers on the plaintiff’s land. I will come back to this relationship and to the definitions of Stevedoring Operations and Handling Services which is the subject matter of the agreement.

23.	There was no real disagreement before the court that the containers were being stored.

24.	As stated, both parties seek interpretation of clause 3 of the agreement. It states:

“Clause 3. – WHARF ACCESS
3.1 In consideration of the dredging operations that are referred to in this Agreement, the Wharf Owner will allow the company and its personnel and agents and representatives and invitees and those ships and other vessels which engage with the Company for the performance of Stevedoring Operations and Handling Services, with the permission of the Company to conduct Stevedoring Operations and Handling at the wharf.
3.2 During the term of the Agreement, the Wharf Owner will allow the Company, its personnel, agents and representatives and invitees and those ships and other vessels which engage with the Company for Stevedoring Operations and Handling Services, with the permission of the Company, unrestricted access from the Fly River to the Waterway area in front of and surrounding the Wharf and adjoining land area that is owned by the Wharf Owner, on a 24 hour basis, seven day [sic] per week to enable the Company to conduct Stevedoring Operations and Handling Services at the Wharf.
3.3 The Wharf Owner will allow the Company and its personnel agents and representatives and invitees unrestricted access to the Wharf to enable the Company to conduct dredging operations so as to allow the Company to conduct Stevedoring Operations and Handling Services at the Wharf.”

25.	As can be seen by various references, the first defendant relies on references to the second defendant’s “personnel and agents and representatives and invitees and those ships and other vessels which engage with the Company for the performance of Stevedoring Operations and Handling Services” to claim that the agreement may be relied upon to authorise the storage of its containers, including on adjoining areas of land. 

26.	At this stage, I need to go to the meaning of Handling Services and Stevedoring Operations, referred to in clause 3 and defined in the agreement.

27.	Handling Services are defined as: 

(a)	shifting Goods from hooks alongside a vessel to stack;
(b)	shifting Goods from stack to hook alongside a vessel for immediate loading onto a vessel;
(c)	the receival from gate to stack of Goods for loading or shipment;
(d)	any movement of cargo or Goods within the wharf or loading yard prior to initial receipt of delivery of cargo or Goods or final discharge of cargo or Goods; and 
(e)	other activities specifically related to Goods receival or delivery activities.
KSCL Depot means the yard at Allotment 12 Section 6 Kiunga adjacent to the Wharf, which is owned by the Company for loading, storage, stacking and handling purposes. 
Easements means the Grant of Easement in the form of Deed of Grant of Easement in Annexure A and any ancillary documents required for registration purposes. 
28.	Stevedoring Operations are defined as: 

(a)	the discharging and the loading of coastal shipping Goods, including the handling of fill containers, other containers, break bulk cargo, empty containers, bulk fuel and ISO approved containers;
(b)	the movement of Goods around and near the Wharf and vessels;
(c)	the operation of vehicles for this purpose;
(d)	the loading and unloading of lighters or barges, strapping of Goods, tarpaulin hire and provision and operation of various types of forklifts on board a vessel; and 
(e)	roll on, roll off activities from barges and vessels.
TCC means the tracked Crawler Crane that is owned by the Company (or any replacement or comparable piece of equipment) and which is used in Stevedoring Operations and Handling Services and located on the Wharf.   
29.	The Handling Services definition refers to shifting goods from the “stack”.

30.	A “stack” of goods can mean reference to goods being shipped, and does not exclude a stack of containers, because for the intents and purposes of shipping, they are goods as well.

31.	The definition also refers to the handling of goods from the “gate to stack”, which means goods arriving at the wharf yard, and also uses the word ‘storage’. 

32.	The definition of Stevedoring Operations includes the “handling of full containers, other containers, break bulk cargo, empty containers...” and the subsequent loading and unloading of cargo.

33.	In seeking further definitions of Handling Operations and Stevedoring Operations, no useful assistance was found in authorities or legal dictionaries which differed from the definitions as used in the agreement.

34.	The plaintiff argues that the agreement covers that activity which occurs at a commercial shipping wharf, and such is fully contained in clause 3 of the agreement, read as a whole with the Agreement, and other documents, being a Memorandum of Understanding, a Settlement Agreement and a Deed of Grant Easement cannot be used to imply a term that the wharf may be used for container storage.

35.	The defendants argue otherwise.

36.	A term of a contract may be implied where a meaning is not clear, and would follow the custom of the particular industry or circumstances raised in whatever form, and in this case, from three other documents.

37.	Those documents are also attached to the affidavit of Mr Kettleton, and I must say, they provide a context for the agreement between the parties, but it is a long bow to draw to rely on them for an implied term of a contract to store containers.

38.	Therefore, the meaning must be found within the term of clause 3, or, if possible, by examining custom and custom here relates to commercial activities carried on between shipping companies and wharf owners.

39.	It could not be denied that customary practice of shipping includes preparation of cargoes for transport from a wharfing area and into a ship.

40.	Containerisation has been in use for the last 50 or so years, and so custom would dictate that a shipping company have a supply of containers and these have to be stored somewhere, when awaiting use or when not in use, when landed and unloaded awaiting reloading.

41.	While the plaintiff does not necessarily challenge that state of affairs, it draws a line at its land being used for storage alone, its case being that containers not in use by the defendants ought be stored elsewhere, or storage paid at its facility.

42.	That is where the single reference to ‘storage’ under the heading Handling Services becomes important. 

43.	Clause 3.1 is irrelevant to the determination of this issue, dealing with the consideration for the agreement.

44.	Clause 3.2 and 3.3 are the clauses governing as to what may occur on the plaintiff’s property.

45.	The clause can be broken into elements for understanding.

46.	These are: While the agreement exists, the plaintiff will allow the second defendant / including its personal, representatives and invitees and ships the second defendant engages with for stevedoring and cargo handling services / unrestricted access to the Fly River in front of and surrounding the wharf / and adjoining land area owned by the second plaintiff.

47.	I have highlighted the operative words, because, unambiguously, they guarantee the second defendant and invitees access to the plaintiff’s land surrounding its wharf.

48.	I will point out that the wording of the clause creates the relationship between the first and second defendants, the first defendant being present as an invitee of the second defendant. The definition of the KSCL Depot, because it refers to ‘storage’ without doubt, is reference to activities which are carried on. 

49.	In my view, the definitions then of Stevedoring Operations and Handling Services are to be read in conjunction with clause 3.2 referring to access to the wharf’s adjoining land. Those words in the agreement anticipate the custom of such industry, and a term must be implied that the first defendant’s containers, used to benefit the commercial business conducted by all parties, may be stored at the premises, those containers being integral to the shipping industry. It is also clear that there is no evidence that such storage is for abandoned containers, which would not be anticipated by the agreement.

ORDERS

1.	Pursuant to Clause 3 of the Wharf Access Agreement between North Fly Development Corporation Limited of Section 104, Allotment 27, Lapwing Drive, Gordons, National Capital District, Papua New Guinea and Kiunga Stevedoring Company Limited, Level 5, Harbourside West, Stanley Esplanade, Port Moresby, National Capital District, Papua New Guinea, dated 17 January 2018, the Defendants may store their shipping containers on the land belonging to the Plaintiff, without charge. 

2.	The Plaintiff will pay the costs of the Defendants agreed or taxed. 

Judgment accordingly
________________________________________________________________
Lawyers for plaintiff: Eagle Lawyers
Lawyers for defendants: Steamships Legal