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Walter Trading Company Ltd v Ports Authority [2008] TOLawRp 4; [2008] Tonga LR 7 (1 February 2008)

IN THE SUPREME COURT OF TONGA
Supreme Court, Nuku'alofa

CV 203/2006

Walter Trading Company Ltd

v

Ports Authority

Andrew J
1 February 2008

Negligence – damages for loss of vessel – evidence showed that no negligence attached to the defendant for the loss of the vehicle
Court of Marine Inquiry – defendant challenged findings and claimed bias and failure of natural justice – the court rejected the allegations

The plaintiff sought damages for negligence against the defendant in the sum of $360,945 in respect of the loss of its vessel, the M.V. Lotoha'angana (the "vessel") in a cyclone on 14 and 15 January 2003. A Court of Marine Inquiry had found that the vessel had foundered on a reef and sunk because of shortfalls on the part of the defendant Ports Authority in their methods of preparing the moorings for the vessel. In the civil damages action the defendant disputed and challenged the admissibility of the findings of the Court of Marine Inquiry and claimed bias on the part of the Inquiry and a failure of the rules of natural justice.

Held:

1. The findings of the Inquiry were obviously highly relevant and admissible but its findings would not be binding on the court and the weight to be given to the findings in relation to the action in negligence was a matter for the court.

2. The court was satisfied that the Court of Marine Inquiry properly conducted its investigation in accordance with Part XI of the Shipping Act (Cap 136) and that the principles of natural justice had been complied with. The court rejected the allegations of bias.

3. Further evidence, including expert evidence, was presented in relation to the cause of the beaching of the vessel. It was held that certain significant evidence given at the Inquiry may have been unreliable and that the mooring system employed by the Ports Authority was completely adequate in the circumstances.

4. No negligence attached to the defendant for the loss of the vessel. Judgment was entered for the defendant along with costs to be agreed or taxed.

Statute considered:

Shipping Act (Cap 136)

Counsel for the plaintiff : Mr Tu'utafaiva
Counsel for the defendant : Mr Garrett

Judgment

The Plaintiff seeks damages for negligence in the sum of $360,945.00 against the Ports Authority following the loss of its vessel the M.V. LOTOHA'ANGANA (the 'vessel') in a cyclone on the 14th and 15th January 2003. There is no dispute that on this day the vessel, its buoy and its anchor ended up on the reef near POPUA/TUKUTONGA and it was completely wrecked. The causes of these events and the issue of negligence are very much in dispute.

The "LOTOHA'ANGANA" had been moored in NUKU'ALOFA harbour as well as the vessel "OLOVAHA" which was moored nearby and it too founded on the reef. A Court of Marine inquiry was established to "enquire into the original reason as to what caused the incidents to vessels "OLOVAHA" and the "LOTOHA'ANGANA" on the 14th and 15th January 2003 during tropical cyclone "AMI". The inquiry concluded as follows:

"1. The incident happened to the LOTOHA'ANGANA because of the shortfalls of the Ports Authority in their methods of preparing the moorings for the vessel.

2. The Ports Authority did not visit the mooring's on a regular basis to check if all was secure during the time the LOTOHA'ANGANA was moored.

3. When the LOTOHA'ANGANA was moored right up to the time it beached and sunk there were no crew members on the LOTOHA'ANGANA. Therefore no-one (owners, captain, first mate or engineer) could be blamed for misconduct."

The defendants had disputed these findings and sought to appeal pursuant to the Shipping Act by way of a hearing de novo. In a preliminary hearing in relation to the appeal and as to how it might apply in the present case the Chief Justice ruled that a hearing de novo was inappropriate and that the matter could proceed as a separate preliminary hearing to argue the admissibility of the inquiry's findings as evidence in this case or that this action be allowed to proceed and the question of the admissibility and weight of the inquiry's findings to be addressed in this present case. Ultimately that has been the procedure adopted and I ruled that the inquiry's findings were obviously highly relevant and admissible but that its findings would not be binding on this Court and the weight to be given to those findings in relation to negligence was a matter for this Court. I should say that there has been further evidence including expert evidence as to the causes of the beaching of the vessel. But I think it is necessary to go back to earlier events to fully understand the circumstances surrounding these matters and as to whether or not the loss of the vessel was entirely the fault of the Ports Authority and as to whether it acted negligently.

Prior to cyclone Ami the vessel had been berthed at the FAUA wharf at NUKU'ALOFA. The defendant Ports Authority regarded it as a hazard. It had been used for fuel storage and additionally it was out of commission and its engines were out of action. The Plaintiff claims that the value of the vessel was over $360,000. But the consensus of the expert evidence is that its only value was as scrap and that its value could not be greater than approximately NZ$60,000. At the very highest I would assess its value as no higher than TOP$100,000. The poor, near derelict condition of the vessel is confirmed in photographic evidence.

There is no dispute that the Ports Authority directed the plaintiffs to remove the vessel from the wharf. The Plaintiffs refused to co-operate in so removing the vessel. It is well known that there is a history of animosity by the Plaintiff towards the Ports Authority and that is in evidence here. The Plaintiff continued to delay. I am satisfied that the Ports Authority acted reasonably in attempting to resolve this problem. At one stage they offered to buy the vessel for the sum of $50,000 as it was believed that it could be usefully employed as a barge. The Plaintiff seemed to agree with this but once again there was further delay. Finally, in exasperation, the Ports Authority removed the vessel and moored it at its facilities in the harbour. The Authority advised the Plaintiffs as follows:

"24th May 2002.

Mr 'Uliti Uata

Uata Shipping Lines

Nuku'alofa

Dear 'Uliti,

I acknowledged receiving your letter dated 23rd may 2002 with regards to the damages or losses that my occur to the M.V. LOTOHA'ANGANA mooring at outside area.

Please refer to the Ports Authority's Legal Counsel's letter dated 15th May 2000 in which she granted you another week to prepare your vessel to be removed. One week, was lapsed hence your vessel was removed.

The safeguarding of the M.V. LOTOHA'AANGA is the sole responsibility of your company and the cost of removing of your vessel will be forwarded later for your good office to pay.

Yours Sincerely,

COMD LUPETI VI

GENERAL MANAGER"

The Plaintiff appeared to accept the right of the Authority to remove the vessel and it thereafter supervised the mooring and altered the mooring arrangements by changing the mooring lines and their length. He had been given the offer of mooring his vessel wherever be chose, outside of the wharf. Given all of these circumstances, that is; the forced removal of the vessel from the wharf as it represented a hazard; the mooring at the Authorities anchor; the withdrawal of any responsibility which was communicated to the Plaintiff and the Plaintiff's acceptance of the responsibility for the mooring of its vessel; the issue arises as to whether the Authority bore any duty of care to the Plaintiff. Had the Plaintiff moved the vessel as he was legitimately ordered to do he could have moored it wherever he chose.

FINDINGS OF THE COURT OF MARINE INQUIRY

The findings of the Inquiry have been stated already.

The Authority is critical of the Inquiry in the following ways:

• It is alleged that MR S. TU'ITUPOU FOTU, as a Judge of the Inquiry, was a former general manager of the authority who had been ordered to resign and had an association with the Plaintiffs. This it is said, gave an appearance of a real danger of bias.

• The only expert witness Captain Johnson was a member of the Ministry of Marine and Ports who, it is said, was unco-operative with the authority, but more importantly he was not cross-examined.

• There were failures of natural justice in that the Authority was unrepresented at the Inquiry; that there was a failure to advise the Authority of possible adverse findings against it. That the Authority was not provided with a copy of the findings so as to enable an application for judicial review.

Procedural fairness generally requires that persons liable to be directly affected by proposed administrative acts, decisions or proceedings be given adequate notice of what is proposed so that they may be in a position:

1. To make representations on their own behalf.

2. To appear at a hearing or inquiry.

3. Effectively to prepare their own case and to answer the case (if any) they have to meet.

All of those things occurred and I am satisfied that the Court of Marine Inquiry properly conducted its investigation in accordance with PART XI of the Shipping Act. I think that the allegations of bias are only suppositions and are unsubstantiated. The Authority gave evidence at the hearing and as to the question of legal representation that is covered in s 198 of the Shipping Act, in that only certain persons are given the opportunity to make a defence and that was followed in this case and legal representation was not sought.

In the course of the inquiry a major issue was whether or not the vessel 'OLOVAHA' had drifted and whether its anchor had entangled itself with the buoy that the LOTOHA'ANGANA (the vessel) was moored to; uprooted it and dragged it onto the reef. There was convincing evidence that this is what in fact happened. Firstly the OLOVAHA was directly up-wind of the LOTOHA'ANGANA. There is no dispute that it did drift towards the LOTOHA'ANGANA. One of the few witnesses to carry out any physical examination was Mr Herbert Keller who dived on the vessels. His report was as follows:

"RE: Dive survey on the M.V. LOTO HA'ANGANA, location Reef opposite POPUA.

The above shipwreck is lying in an approx. North-South angle directly to the reef opposite POPUA in a depth from 5 to 8 metres.

The anchor plus chain is complete fixed to the wreck in as it was before condition –

In my opinion the M.V. OLOVAHA was drifting in the hurricane with eastwards and her anchor hooked on to the anchor connection from the MV LOTO HA'ANGANA and "towed" her to the reef.

The anchor from the MV LOTO HA'ANGANA was properly fixed at the former existing mooring by a big anchor, which was even towed a few meters by the M.V. HIFOFUA till it was sticking in the mud.

If you have any further questions don't hesitate to contact me."

I am satisfied that Mr Keller was an expert witness.

The Inquiry said this about MR KELLER'S evidence:

"In his (MR KELLERs) opinion what may have caused the LOTOHA'ANGANA to beach was that the drifting anchor of the OLOVAHA towed the connection between the chain and anchor and eventually beached it on the reef (This opinion is similar to that of previous witnesses). This is the same diver that dived for the Ports when they first anchored the anchor and new buoy (big) on 23/05/'02."

The Inquiry did not accept Mr Kellers evidence.

Cyclone AMI appeared to have its nearest approach to NUKU'ALOFA at about 2300 hrs on 14th January with the wind from NNE direction at about 50 KTS (gusting) (FORCE 9). OLOVAHA was anchored (not moored) by her 2 stern anchors about 350 meters northward of the LOTOHA'ANGANA mooring. It is reported that the OLOVAHA commenced to drag her anchors at around this time. Both mooring buoys of the LOTO HA'ANGANA along with portions of the vessel's moorings and ground tackle ended up on the landward side of the vessels wreck. The vessel had been moored to two buoys and its complete ground tackle ended up with the wreck. The old buoy ground tackle had come adrift about 40 meters down from the buoy shacle. The buoy then remaining connected to the now wrecked vessel. The old buoy's three point mooring system remained otherwise intact on the seabed.

Further evidence has been called from Mr Robert Hawkins a senior marine surveyor and clearly a person of vast experience in this area and undoubtedly an expert. In his opinion:

"What is unclear is what happened on board "OLOVAHA" after this vessel started to drift/drag anchor. There are reports that the vessel was unable to start her engines. The bow anchors were either not able to be used or that no one actually thought to use them."

"In my opinion it is quite conceivable that "OLOVAHA" dragged both her stern anchors over the old mooring buoy ground tackle breaking the buoy cable and most likely fouling the buoy which then dragged the LOTOHA'ANGANA with the new buoy and its ground tackle to the reef. In my opinion there would not have been time for the crew of OLOVAHA to weigh both stern anchors completely within the time taken to drift the short distance from her anchorage position to the 'LOTOHA'ANGANA' mooring position."

"Then for the two vessels to ground in such close proximity with the two buoys ending up between the 'LOTO HA'ANGANA' and the reef would in my opinion, be impossible without the influence of something dragging them in front of the 'LOTOHA'ANGANA' only the 'OLOVAHA' could have done this in the circumstances...

Under the circumstances it would appear that the real problem which occurred on the night of 4.1.03 were due in the main to the vessel 'OLOVAHA' dragging her anchors, not able or unable to avoid drifting onto/over the "LOTO HA'ANGANA' buoys/moorings and thereby dragging both vessels onto the reef."

The simple fact is that the anchor of the 'OLOVAHA' was seen to be hooked into the anchor connection of the LOTOHA'ANGANA. That is beyond doubt. The fact that the OLOVAHA had towed the LOTO HA'ANGANA to the reef is shown by the fact that the anchor forming part of the new mooring is higher up in the reef than the LOTO HA'ANGANA which rested on the edge of the reef. Captain Hawkins could find no other possible explanation for how that had happened other than that the OLOVAHA had towed the LOTO HA'ANGANA. That was also the opinion of the expert diver Mr Keller and of others at the inquiry. The inquiry seemed to discount this conclusion on the basis of evidence that the OLOVAHA and the LOTO HA'ANGANA never crashed into each other and that they had passed each other by not less than 100 meters. But the evidence at the inquiry, it seems to me, varied wildly. There was other evidence that the vessels were close or within twenty meters as they passed. There was evidence that the LOTO HA'ANGANA had beached after the OLOVAHA varying from some minutes by up to 3 to 4 hours.

The inquiry found that: "Statements were given saying that the reason that the LOTO HA'ANGANA is now sunken (sic) because the OLOVAHAS anchor had entangled itself in the lines of the LOTO HA'ANGANAS moorings.

This Court did not accept these statements as there were other liable (sic) statements made that don't support the claim made above. The OLOVAHA had used its stern anchors only".

But it was never said or spelt out what these other statements were.

I am satisfied on all of this evidence and in particular on the fresh evidence that the OLOVAHAS anchors had entangled in the lines of the LOTO HA'ANGANA moorings and that it had towed it to the reef. I regret that in the face of fresh evidence and on all of the evidence I cannot accept the inquiry's finding that the OLOVAHA had not towed the vessel on to the reef.

THE MOORINGS

The Ports Authority is responsible for positioning the buoy moorings in the various locations within the port anchorage/harbour limits. The vessel was moored to what was called the old buoy and the new buoy. The authority had made it clear to the Plaintiff that it was its responsibility to maintain the vessel at the mooring and to tender the mooring from the vessel to the buoys. The plaintiff had accepted that situation and they proceeded to replace the mooring ropes with chains which were shorter in length. That is, the plaintiff had altered the mooring system. I accept the expert evidence that the altered mooring system had weakened the security of the mooring system.

The old buoy mooring had apparently been laid by the Tongan Navy in about 1989 and consisted of a three-point system of mooring chains. It had previously been used by a Tongan naval vessel tanker of some 4,5000 tones (i.e. much greater than the vessel) for some 5 years immediately before the vessel was moored there and it had coped with and survived several cyclones.

The new buoy mooring had been laid by the Ports Authority in 2002 I do not set out all the details of its construction but I accept the expert evidence of Mr Hawkins that:

"The weight of anchor and ground tackle I consider to be in excess of the normal cable and anchor size necessary to moor a vessel of the size and weight of 'LOTOHA'ANGANA'. There was adequate ground tackle chain from each buoy equating to approximately 3 times the water depth which is considered standard practice."

I also accept Mr Hawkins view that in relation to the old buoy that:

"while we have insufficient data to make accurate assessment of the likely loads on the old mooring systems, it could reasonably be assumed that given the chains to be in reasonable condition, and with the knowledge that a 4,500 displacement tanker had been moored safely for some 5 years during all weathers, immediately prior to the 'LOTOHA'ANGANA', that the mooring was or should have been adequate for the purposes of mooring this vessel."

Significantly a witness who gave evidence to the Inquiry i.e. SAIA MAFI, a Port Master and an expert in this area, has now said that when he gave evidence he was under the belief that the vessel had only been moored to the new mooring and was unaware that in fact it was attached to two different mooring. The import of his evidence now is that the mooring of the vessel by the Authority was adequate so that the evidence given to the Inquiry may have been unreliable.

I am satisfied on all of this evidence that the mooring system employed by the Ports Authority was completely adequate for the purpose of mooring a vessel, the size and displacement of "LOTOHA'ANGANA".

CONCLUSIONS

• The defendant had communicated to the plaintiff that it would accept no further responsibility for the mooring of the plaintiff's vessel.

• The plaintiff had accepted the responsibility for the mooring of its vessel and it had altered the mooring system which weakened the security of the mooring.

• The vessel OLOVAHA dragged its stern anchors and it drifted towards the LOTO HA'ANGANA entangling its lines and towing it onto the reef.

• The mooring system and the mooring of the vessel by the Ports Authority was adequate in the circumstances.

• That no negligence attaches to the defendants for the loss of the vessel.

According I give judgment to the defendants.

Costs to the defendant as agreed or taxed.