Federal Court of Australia
Ixom Operations Pty Ltd v Blue One Shipping SA [2022] FCA 1101
ORDERS
Plaintiff | ||
AND: | First Defendant LS-NIKKO COPPER INC Second Defendant CS MARINE CO LTD Third Defendant | |
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. The application be dismissed.
2. The plaintiff pay the costs of the first and third defendants.
3. Any party may apply to the chambers of Burley J within 14 days if they wish to contend for a costs order different to that set out in (2).
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
[1] | |
[2] | |
[5] | |
[12] | |
[16] | |
[17] | |
2.2 The evidence on behalf of Blue One Shipping and CS Marine | [31] |
[41] | |
[49] | |
[109] | |
[109] | |
[121] | |
[124] | |
[174] |
BURLEY J:
1 IXOM Operations Pty Ltd advances claims in these proceedings that it was delivered a cargo of contaminated sulphuric acid in breach of obligations owed to it by the carrier of the cargo aboard the MV “CS Onsan”. The separate questions for current determination primarily concern whether Blue One Shipping, which was the registered owner of the CS Onsan, and CS Marine Co Ltd, which was the demise charterer of the vessel, are estopped from advancing defences to the effect that the claims are time barred by the operation of Article 3 rule 6 of the Australian Amended Hague Visby Rules in Schedule 1A to the Carriage of Goods by Sea Act 1991 (Cth). The dispute largely centres upon communications that passed between the solicitors acting for the parties and their insurers.
2 IXOM was the purchaser and consignee of a cargo of approximately 25,300 metric tonnes of sulphuric acid being shipped in bulk from Korea to Australia. The vendor and consignor was Trammo Pty Ltd. Pursuant to the terms of sale, Trammo arranged for the carriage of the consignment pursuant to the charter of the CS Onsan under a Tanker Voyage Charter Party. IXOM was not a party to the Charter Party but was named as the consignee on a non-negotiable tanker Bill of Lading dated 22 May 2017. Upon arrival on 6 June 2017 at Gladstone, Queensland, discolouration of the cargo was observed.
3 A dispute arose as to whether IXOM would take delivery of the consignment. After some negotiations in June 2017, the parties agreed to vary the arrangements for the discharge of the cargo, and IXOM reserved its rights to pursue a claim. On the approach of the first anniversary of the discharge, IXOM sought an extension of the limitation period under the Hague Visby Rules. The terms of the grant of that extension, given on 25 May 2018, give rise to the present dispute.
4 On 25 November 2020, IXOM commenced proceedings against the first defendant, Blue One Shipping. Somewhat later, in circumstances that are set out below, IXOM joined the third defendant, CS Marine. The second defendant, LS Nikko Copper Inc, was never served with the proceedings and it is not necessary to refer to it further. In these reasons, references to “the defendants” mean Blue One Shipping and CS Marine.
5 It is convenient to summarise the course of the pleadings by reference to the following steps.
6 First, in its Originating Application IXOM claimed damages in the amount of $1,751,709, interest and costs, alleging that Blue One Shipping, by delivering contaminated cargo, failed in its duty to deliver the consignment in good order and condition in breach of (the primary claims):
(1) its duty as a carrier and/or bailee for reward under the contract of carriage;
(2) an implied term of the contract of carriage;
(3) its duties under the Hague Visby Rules;
(4) its duty owed to the plaintiff to exercise all due care and skill in the handling of the consignment.
7 In its defence, Blue One Shipping accepted that IXOM purchased the consignment from Trammo but otherwise denied the claims made. It denied that it was a party to a contract as evidenced by the Bill of Lading with IXOM and contended that at all material times it had demise chartered the CS Onsan to CS Marine. It further denied that the consignment was damaged or that it was otherwise liable.
8 Secondly, upon receiving Blue One Shipping’s defence, on 9 November 2021, IXOM amended its pleadings to join CS Marine and plead the same causes of action against CS Marine. In its amended statement of claim IXOM added a further claim against both defendants, namely that they had engaged in misleading or deceptive conduct in breach of s 18 of the Australian Consumer Law in Schedule 2 of the Competition and Consumer Act 2010 (Cth) (ACL) in their response on 25 May 2018 to an email dated 23 May 2018 from Collin Biggers & Paisley Solicitors (CBP) to Thynne + Macartney solicitors (T&M), requesting an extension of the limitation period which applied to the contract of carriage evidenced by the Bill of Lading. It contended that T&M, as agent for Blue One Shipping and/or CS Marine, misrepresented that Blue One Shipping was the vessel owner and/or a party to the contract of carriage and that the consent of Blue One Shipping was sufficient to provide an extension to the Hague Visby Rules. As a result, IXOM did not seek an extension from CS Marine, with the consequence that IXOM suffered the loss of each of causes of action (1)-(4) at [6] above (ACL allegations).
9 Upon being joined, CS Marine admitted that it was the carrier of the consignment under the Bill of Lading and/or the contract of carriage evidenced by the Bill of Lading. It also admitted that it was a bailee for reward of the consignment pursuant to the terms of the Bill of Lading and the contract of carriage evidence by it, and also pursuant to the provisions of the Hague Visby Rules. However, it contended that IXOM failed to commence proceedings against it within the limitation period pursuant to Article 3 rule 6 of those Rules (the time bar). It also otherwise denied that the consignment was damaged and denied liability under any of the causes of action pleaded.
10 Thirdly, in its reply to the defences of Blue One Shipping and CS Marine, IXOM pleaded that, by reason of the exchange of correspondence on 23 and 25 May 2018 between CBP and T&M, Blue One Shipping is estopped from denying that it was a party to the contract of carriage evidenced by the Bill of Lading. It made an equivalent claim against CS Marine. The scope of the estoppel claim is explained further below.
11 Fourthly, Blue One Shipping and CS Marine further pleaded, in answer to the ACL allegations, that prior to the exchanges of emails between CBP and T&M in May 2018 (the prior communications), IXOM or its solicitors knew or ought to have known that CS Marine was the carrier, the bailee, the proper defendant and the person from whom an extension of time was required under the Hague Visby Rules in respect of the consignment. They pleaded that, if IXOM suffered loss, it was as a result of the failure of IXOM or its solicitors to exercise reasonable care in obtaining extensions of the limitation period and that, as a consequence, if IXOM suffered loss and damage as set out in the ACL allegations, it was a consequence of IXOM’s failure to exercise reasonable care in commencing proceedings within the limitation period. Any damages to which IXOM may be entitled to recover should be reduced pursuant to s 137B of the Competition and Consumer Act 2010 (Cth) or IXOM’s claim is apportionable within the meaning of s 87CB of that Act and any damages should be limited to an amount reflecting the portion of the loss and damage that the Court considers just and equitable having regard to the extent of the responsibility that Blue One Shipping and/or CS Marine (the apportionment issue).
12 During the course of the case management of the proceedings, the parties agreed that it was appropriate that the questions arising from the estoppel claim, ACL allegations and apportionment issue be determined separately and before the substantive issues of liability on the part of either the first or third defendant.
13 The separate questions for determination are as follows:
(1) Whether Blue One Shipping is estopped from denying that it was and is a party to the contract of carriage evidenced by the Bill of Lading dated 22 May 2017 by reason of the matters pleaded in paragraph 2 of the IXOM’s reply to Blue One Shipping’s defence to the amended statement of claim dated 1 December 2021;
(2) Whether CS Marine is estopped from relying on Article 3 rule 6 of the Australian Amended Hague Visby Rules in response to IXOM’s claim against CS Marine in paragraphs 12 to 22 of IXOM’s further amended statement of claim dated 9 November 2021 by reason of the matters pleaded in paragraphs 2 and 3 of IXOM’s reply to CS Marine’s defence to the amended statement of claim;
(3) Whether Blue One Shipping and/or CS Marine engaged in conduct in contravention of s 18 of the ACL by reason of the matters pleaded in paragraphs 25 to 33 of IXOM’s amended statement of claim dated 9 November 2021; and
(4) Whether Blue One Shipping and CS Marine’s allegations of contributory negligence and concurrent wrongdoers in paragraphs 56 to 61 of the defence of Blue One Shipping to the amended statement of claim dated 24 November 2021 and paragraphs 37 to 42 of the defence of CS Marine to the amended statement of claim dated 24 November 2021 apply to reduce any damages that IXOM may be entitled to by reason of Blue One Shipping and/or CS Marine’s alleged contravention of s 18 of the ACL.
14 The questions raised in the separate questions arise from the same factual matrix, which is summarised in section 4 below.
15 For the reasons set out in more detail below, the answer to questions (1), (2) and (3) is “no” Accordingly, it is unnecessary to determine the answer to question (4).
16 The evidence of the witnesses was given orally, with a prior exchange of proofs of evidence between the parties. What follows is a summary of their evidence in chief.
2.1 The evidence on behalf of IXOM
17 Nicholas John Andersen has since February 2015 been the general counsel and company secretary of IXOM. He is a legal practitioner, and was first admitted to practice in 2001. He began working as a solicitor for Orica in February 2007. In February 2015 IXOM was divested from Orica. Mr Andersen gave evidence that he had never worked in a shipping law capacity and that he relied heavily on IXOM’s external shipping lawyer, Andrew Tulloch of CBP, to assist in ascertaining the plaintiff’s legal rights.
18 IXOM entered into a long term contract with Transammonia (as Trammo was then called) for the procurement of sulphuric acid for its operations, which was managed within IXOM by Michael Grant, who reported to Todd Martin, the person within IXOM who ran the sulphuric acid side of the business. Before commencing proceedings, Mr Andersen sought instructions from Mr Martin and IXOM’s chief financial officer and, in the present case because an insurance underwriter was involved, that underwriter.
19 Mr Andersen gave evidence in chief about first being involved in the present dispute on about 14 June 2017, when he was informed that there was a cargo of about 25,000 tonnes of sulphuric acid sitting in a vessel off the coast of Queensland that was non-conforming. He gave evidence of his knowledge of negotiations being conducted between relevant parties about whether the plaintiff could reject the cargo. Mr Andersen retained Mr Tulloch on behalf of IXOM on 15 June 2017 and thereafter did not turn his mind to the identity of the party with whom the plaintiff had contracted, or the proper defendant to any later proceedings, because he considered that this was Mr Tulloch’s job, as the shipping law expert. He gave evidence that he was given instructions by Mr Grant and Mr Martin concerning operational matters that in particular related to where the cargo might be discharged and the security that was sought in lieu of any arrest of the CS Onsan. As far as he was concerned, the provision of security by an underwriter (the Club) and arrangements for the discharge of the cargo in Port Kembla, NSW, were made by the end of June 2017, after which the dispute went quiet until 10 August 2017 when Trammo Navigation Pty Ltd sent an invoice for demurrage rendered to it by CS Marine in the amount of USD311,200. Mr Anderson was involved in preparing a deed of release in relation to that invoice, which was never signed.
20 Mr Andersen gave evidence that on 22 May 2018 he was informed by Mr Tulloch that the claim in respect of the consignment would become time barred by 6 June 2018 unless an extension of time was secured. By that time, IXOM had secured confirmation from its insurer (Vero) that it indemnified part, but not the entirety, of its claim in respect of the consignment and negotiations with it were continuing. He gave instructions to Mr Tulloch to seek an extension.
21 Mr Andersen’s other evidence in chief addressed the email correspondence to which he was a party. He was cross examined.
22 Andrew Dean Tulloch, is a solicitor at CBP who has practised in the area of maritime and trade disputes since 1978. He has acted for IXOM since about 2015, taking instructions principally from Mr Andersen. He was first instructed by Mr Andersen in the present case by email on 15 June 2022 and provided written advice to him on the same day. He gave evidence about his involvement in sending and receiving correspondence in relation to the dispute and certain aspects of the advice that he gave IXOM.
23 Mr Tulloch gave evidence that from his review of the Bill of Lading and the Charter Party he had formed the view on 15 June 2017 that, because the Bill of Lading had been signed for the master, that ordinarily evidences a contract made with the vessel’s owner. He noted that the Charter Party indicated that CS Marine was named as the owner of the vessel.
24 On 15 June 2017, Mr Tulloch prepared a request for an undertaking from the Club in the amount of USD2 million from “the owner and/or demise charterer of MV ‘CS Onsan’” (emphasis added). He provided “and/or”, because he was uncertain at the time as to whether the vessel was under demise charter. He gave evidence in chief that, on 16 June 2017, he received a telephone call from Matthew Hockaday. Mr Tulloch referred to a file note of that conversation in which he notes that Mr Hockaday informed him that he “acts for owners” of the vessel. He and Mr Hockaday had a without prejudice discussion concerning the provision of security by Mr Hockaday’s client, the provision of an undertaking for the vessel not to depart Australia without adequate prior notice, and the possible rejection of the cargo by IXOM.
25 Mr Tulloch’s evidence in chief otherwise addressed the correspondence to which he was a party. He was cross examined.
26 Timothy Corbett has worked as a recoveries officer employed by AAI Insurance, which is otherwise known as Vero, for about 10 years. Vero is IXOM’s insurer and Mr Corbett became involved in a claim made by IXOM in relation to the consignment in February 2019. Mills Oakley had been engaged to advise Vero from before that time. Mr Corbett gave evidence that Mills Oakley was proactive in seeking time extensions in respect of potential claims against third parties and would report to him after an extension had been sought or granted rather than waiting for Vero to give specific instructions to them to do so. He gave evidence about the process by which Vero gave instructions to commence the present proceedings. Mr Corbett was cross examined.
27 Frazer Hunt is an experienced solicitor at Mills Oakley who has acted for almost 35 years in relation to maritime and transport matters, and has acted for Vero for about 25 years. He gave evidence in chief that he had been retained to act for Vero in the matter shortly before 7 July 2017 and of the steps that he had taken to ascertain the identity of the parties to the contract of carriage. In this regard, he gave evidence that he initially pursued enquiries with T&M in relation to the provision of security in respect of the claim, but that it proved to be unnecessary because Mr Tulloch had on 22 June 2017 secured such security in the form of a letter of undertaking from the Club “on behalf of the owners or demise charterers of the Vessel”.
28 Mr Hunt gave evidence that he had at no time before the filing by Blue One Shipping of its defence been provided with the email sent by Mr Hockaday to Mr Tulloch dated 20 June 2017, which stated that the letter of undertaking was provided “by CS Marine, the demise charterers of the vessel”. Mr Hunt also gave evidence that he was involved in the steps taken by Vero prior to it agreeing to indemnify IXOM in respect of its claim. Whilst an agreement was being finalised, Vero could not progress the claim in respect of the consignment and it was necessary to seek extensions of the time bar until the claim was quantified. It was for this reason that it was Mr Tulloch, acting for IXOM, rather than Mr Hunt, who requested the first extension by email on 23 May 2018. Mr Hunt understood from that email that the request for a time extension was being made from the registered owners of the vessel and that the reply of 25 May 2018, referred to at [38] below, was given by the registered owner only.
29 Shortly after 25 May 2018, the indemnity issue between IXOM and Vero was resolved and Mills Oakley took over conduct of the claim. Thereafter, Mills Oakley sought nine further extensions from T&M, adopting substantially the same language in each request as that set out in the email from CBP of 23 May 2018. Mr Hunt did not give further consideration of the identity of the likely defendant or owner. By the time that he prepared the statement of claim in the proceedings, he probably had the Charter Party and the results of an Equasis search. The latter showed that there were two registered owners of the vessel, Blue One Shipping and the second defendant. The search showed that by 2019 the ownership had been transferred to CS Marine, but by that time Mr Hunt considered that Vero had obtained security for the claim from the owner of the vessel (Blue One Shipping) and so Vero issued proceedings against the registered owners at the time of the damage. He considered that CS Marine was the disponent owner under the Charter Party, but because the Bill of Lading had been issued and signed by the master, the registered owner was the proper defendant to the proceedings. Mr Hunt gave evidence that had he been informed before the commencement of the proceedings that CS Marine was a demise charterer of the vessel, he would have sued it as the contractual carrier under the Bill of Lading.
30 Mr Hunt was cross examined.
2.2 The evidence on behalf of Blue One Shipping and CS Marine
31 Matthew Hockaday is a solicitor of over 20 years of experience in the admiralty and maritime field of law who has been a partner of T&M for over 10 years. He gave evidence that he was first instructed by an email dated 8 June 2017 received from Mr Kaichi Takata of the Japan P&I Club, Tokyo. The email was copied to Guangdon Choi of Aon Risk Solutions, the broker for CS Marine responsible for the cargo claim. The email noted that the CS Onsan had called at Gladstone to discharge sulphuric acid in bulk, but that the cargo receiver had refused discharge of the cargo until it was analysed by an independent lab in Sydney. It requested that a surveyor be appointed to investigate the incident and negotiate for the consignee to receive the cargo.
32 Mr Hockaday at first thought that he was representing the owners, which he understood to be CS Marine, but some days later he read a document that indicated that Blue One Shipping was the registered owner of the vessel, and so on 13 June 2017 he sought clarification from Mr Choi. On the same day he received a response, attaching the Club Certificate of Entry that recorded the “Members” as Blue One Shipping as owner, CS Marine as bareboat charterer and Korea Shipmanagers Co Ltd as the technical manager of the CS Onsan, and confirming that T&M acted for Blue One Shipping and CS Marine.
33 Mr Hockaday gave evidence about a conversation that he had with Mr Grant of IXOM on 16 June 2017 and a subsequent conversation and email exchange on the same day with Mr Tulloch concerning the provision of security by his clients in order to enable the vessel to leave port without the threat of arrest. He gave evidence of his email correspondence with Mr Tulloch following the initial exchanges, including an email of 20 June 2017 where the provision of a letter of undertaking was being negotiated, subject to IXOM taking delivery of the cargo. The email stated (emphasis added):
Our client agrees to give 24 hours’ notice to your client of any intended departure. We attach a letter of undertaking provided by CS Marine Co Ltd, the demise charterers of the vessel, to this effect.
34 Mr Hockaday gave evidence that apart from his initial conversation on 16 June 2017, all of his communications with Mr Tulloch until 22 June 2017 were in writing. He said that in that time the vessel interest and the cargo interest agreed that the consignment was to be discharged at ports other than Gladstone, which was the port of discharge under the Bill of Lading. Mr Hockaday reduced that agreement to writing in an email of 22 June 2017, which attached a letter of undertaking from the Club to IXOM of the same date. Following the provision of the letter of undertaking, Mr Hockaday had a further email exchange with Mr Tulloch in relation to the issue of demurrage.
35 Mr Hockaday gave evidence that in July 2017 he began communicating with Mr Hunt from Mills Oakley, who represented Vero, the cargo insurers. Mr Hunt arranged for the inspection of the vessel by a surveyor and then sought documents from T&M’s clients. At one point Mr Hunt also sought security for the cargo claim, before becoming aware that it had already been agreed.
36 On 23 May 2018, Mr Hockaday received an email request from Mr Tulloch indicating his client’s concern about the approaching time bar (under the Hague Visby Rules), and sought confirmation “that owners are prepared to grant a three month extension” (emphasis added). Mr Hockaday gave evidence that he understood that this request was made on the basis that T&M acted for both the registered owner (Blue One Shipping) and also the demise charterer (CS Marine) and that “owners” meant the party that would be liable as the owning entity under the Bill of Lading.
37 Mr Hockaday sent the request to the Club and also to Aon. On 24 May 2018, Mr Choi sent an internal email within Aon indicating that if a time extension were not to be agreed, IXOM would have no choice but to commence proceedings “against CS Marine” in order to preserve the claim. Agreement was reached and Mr Choi sent an email to Mr Hockaday on the same afternoon indicating that the Members agreed to the time extension.
38 On 25 May 2018, Mr Hockday sent an email to Mr Tulloch where he advised that “our client agrees” to provide the extension sought until 31 August 2018 “for any claims for damage and/or demurrage” under the Bill of Lading.
39 On 17 August 2018, Mr Hunt from Mills Oakley sent an email that indicated that his client had been instructed to pursue a subrogated claim against carriers. He sought confirmation that a further time extension on the same terms as the 25 May 2018 email would be granted. Mr Hockaday gives evidence that that request was granted by email of 27 August 2018, as was a series of subsequent requests for three month extensions made through until 2020.
40 Mr Hockaday was cross examined.
3. THE ESTOPPEL AND ACL CLAIMS
41 In its reply to the defendants’ defences, IXOM relevantly pleads its case in four alternative ways.
42 First, it contends that by the exchange of correspondence on 23 and 25 May 2018 between CBP and T&M, Blue One Shipping, as the vessel owner, and CS Marine purported to give an extension of the time bar in a misleading way by representing that Blue One Shipping, as owner, was a party to the contract of carriage evidenced by the Bill of Lading. It contends that Blue One Shipping and CS Marine knew that IXOM was relying on the 25 May 2018 email and that IXOM assumed and understood that Blue One Shipping was a party to the contract of carriage evidenced by the Bill of Lading. Accordingly the defendants are estopped from denying that this is so (first estoppel claim).
43 Secondly, it contends, in the alternative, that IXOM was induced to rely on an assumption that the owner was a party to the contract of carriage evidenced by the Bill of Lading which was created by the 25 May 2018 email, because the email purported to give an extension of the limitation period by the owner alone, without referring to the demise charterer. It contends that the defendants knew that IXOM was relying on that assumption to its detriment, and that in reliance on that mutual assumption IXOM did not seek an extension of time from, or commence proceedings against the demise charterer. Accordingly, Blue One Shipping is estopped from denying that it was and is a party of the contract of carriage (second estoppel claim).
44 Thirdly, it contends that the 25 May 2018 email misrepresented the parties to the contract of carriage evidenced by the Bill of Lading because it purported to give an extension of the limitation period by Blue One Shipping without referring to the demise charterer being the contractual carrier. It contends that it would be unconscionable for the defendants to depart from the representations that they made and accordingly they are estopped from denying that it was and is a party to the contract of carriage (third estoppel claim).
45 Fourthly, by the T&M email of 25 May 2018 the defendants represented (a) that Blue One Shipping as the vessel owner was a party to the contract of carriage evidenced by the Bill of Lading and (b) that its consent was sufficient to provide an extension of the time bar. Furthermore, by correspondence dated 27 August 2018, 28 August 2018, 20 November 2018, 27 February 2019, 24 May 2019, 19 August 2019, 25 November 2019, 24 February 2020, 13 May 2020 and 25 August 2020 the defendants further represented; (c) that Blue One Shipping as the vessel owner was party to the contract of carriage evidenced by the Bill of Lading; and (d) that its consent was sufficient to provide an extension of the time bar.
46 IXOM contends that the representations were false in that Blue One Shipping was not a party to the contract of carriage as evidenced by the Bill of Lading and as such could not grant an extension of the time bar. As a result, IXOM alleges that the defendants engaged in misleading or deceptive conduct in contravention of s 18 of the ACL by making the representations (a) to (d) and also by failing to specify which entity had given an extension of the time bar; failing to advise that CS Marine, the demise charterer, was the contractual carrier under the contract of carriage; failing to advise that Blue One Shipping as owner had chartered the vessel by demise to CS Marine and that it was not the contractual carrier or a bailee; and failing to indicate that the extension of the time bar was given by both of the defendants.
47 In reliance upon the representations, IXOM did not seek an extension of time from, or commence proceedings against CS Marine, as a consequence of which the loss suffered by IXOM is the value of the four causes of action that it would otherwise have been able to pursue, had the limitation period not expired.
48 In its submissions, IXOM identifies three pivotal representations upon which its estoppel and misrepresentation cases turn:
(a) The 25 May 2018 email failed to indicate who was T&M’s client or who was giving the extension. To the extent the extension was only given by owners, it failed to indicate that the owner was not the carrier or advert to the demise charter;
(b) The 25 May 2018 email impliedly represented that the extension was only given by the owner of the CS Onsan and that the owner was able to give an extension because it was the contractual carrier;
(c) The 25 May 2018 email was misleading and deceptive because it failed to indicate that whilst the owner was requested to give, and agreed to give, an extension of the one-year time bar, the owner was not a party to the contract of carriage, not a bailee, and could not grant any meaningful extension to the Bill of Lading.
4. RELEVANT FACTUAL BACKGROUND
49 On 8 June 2017, Mr Hockaday of T&M was retained to act on behalf of Blue One Shipping and CS Marine in connection with issues arising from the consignment. From 13 June 2017, when Mr Hockaday received a response to his enquiry from Mr Choi, Mr Hockaday had a firm understanding that he was acting for Blue One Shipping as registered owner, and CS Marine as bareboat charterer.
50 On 14 June 2017, Mr Andersen was informed of a potential dispute about the consignment and retained Mr Tulloch to act on behalf of IXOM on the following day. Mr Andersen delegated consideration of who might be the contracting party for any future claim to Mr Tulloch. He was no expert in maritime law, did not know the concept of a “demise charterer”, and, I find, left such matters to Mr Tulloch.
51 On 15 June 2017, Mr Tulloch gave written advice to IXOM, and later that day received copies of the Bill of Lading and Charter Party. Upon receiving them, his initial view was that IXOM’s claim would be based on its rights under the Bill of Lading rather than the Charter Party. He noted that the Bill of Lading had been signed by the master, and was of the opinion that this ordinarily evidences a contract made with the vessel’s registered owner. He noted that the Charter Party named CS Marine as the owner and that the Bill of Lading was signed by the master under the seal of CS Marine, which supported this view.
52 Also on 15 June 2017, Mr Tulloch wrote to the port agent in Gladstone, attaching a demand on behalf of IXOM for security from the “owners/demise charterers of the vessel ‘CS Onsan’” (emphasis added) which said:
In circumstances where this cargo has arrived at Gladstone, Queensland aboard the vessel in contaminated condition, we now demand that security for a claim be provided by way of a satisfactorily worded letter of undertaking from your P & I Club in the amount of US$2 million, failing which steps will be taken to arrest the vessel at Gladstone to protect our client’s position.
53 Mr Tulloch explained in his evidence that he had expressed the demand in this way because he considered that there may be uncertainty as to whether the vessel was under demise charter, in which case it was his understanding that the demise charterer, rather than the registered owner, which he thought was CS Marine, would be the carrier under the contract evidenced by the Bill of Lading.
54 On 16 June 2017, Mr Tulloch and Mr Hockaday had their only conversation about the matter about which evidence was provided, which traversed questions about whether security would be provided for the claim and whether an undertaking would be provided that the vessel would not depart Australia without the provision of notice to IXOM. On the same day at 10.27am, Mr Hockaday wrote to Mr Tulloch confirming that T&M “act on behalf of the owners of the ‘CS Onsan’ and their protection and indemnity insurer”. From Mr Hockaday’s perspective, the reference to “owners” was a generic reference to both of his clients, the registered owner and the demise charterer, a point that he had clarified with his client just days earlier.
55 Mr Andersen gave evidence that when he read that T&M acted for “vessel owners” he understood that to be a reference to the party that was legally responsible for carriage of the cargo, whether it was the vessel owner or a demise charterer.
56 Later on the same day, Mr Tulloch wrote to Mr Hockaday clarifying aspects of the security that IXOM sought. Mr Hockaday responded that evening confirming “we act on behalf of vessel interests” and seeking clarification that IXOM would take delivery of the consignment.
57 On 17 June 2017, Mr Hockaday indicated in an email to Mr Tulloch that the Club “is prepared to provide an LOU [letter of undertaking] for vessel interests to your client in the amount of US$2 million once your client confirms it will be taking delivery of the cargo…”.
58 Later that day, Mr Grant provided Mr Andersen (both of IXOM) with a without prejudice proposal put by Trammo to deal with the cargo which involved amending the contract evidenced by the Bill of Lading and Charter Party to permit discharge of the cargo in Chile or Peru. The proposal was in the form of a draft letter that referred in its heading to CS Marine “as owner” and Trammo as “Charterer”. Mr Tulloch, who saw the email at the time, considered that this tended to confirm his earlier preliminary view that CS Marine was the owner and the carrier under the contract evidenced by the Bill of Lading.
59 There was some urgency about reaching an interim agreement at this point, because, while the CS Onsan had not yet discharged its cargo, demurrage was accruing in an amount that Mr Tulloch estimated to be about USD20,000 per day.
60 On 20 June 2017 at 1.10 pm, T&M responded to Trammo’s proposal that the vessel deliver the cargo to Chile. Mr Hockaday’s email said:
We understand Trammo’s proposal is for the vessel to deliver the cargo to Chile. This proposal is unlikely to be acceptable to our client.
Your client has a duty to take delivery of the goods, and your client is again requested to confirm that it will be taking delivery so the vessel can make arrangements to berth and to discharge the cargo.
Our client agrees to give 24 hours’ notice to your client of any intended departure. We attach a letter of undertaking provided by CS Marine Co Ltd, the demise charterers of the vessel, to this effect.
(Emphasis added.)
61 Mr Tulloch understood this email to communicate to him that CS Marine was the demise charterer of the vessel.
62 The undertaking attached to the email was on “CS Marine Co., Ltd.” letterhead. It provided as follows under the heading “Undertaking”:
“CS Onsan” (IMO no. 9659684) – carriage of sulphuric acid in bulk under bill of lading no. CSM-17030-01 dated 22 May 2017
CS Marine Co Ltd on behalf of the owners and demise charterers of the vessel “CS Onsan” undertakes that until the issuance of a letter of undertaking from the P&I Club for owners and/or demise charterers of the vessel for security for IXOM’s alleged claim is mutually agreed by the vessel interests and IXOM, the Vessel will not depart from Australian waters without first providing 24 hours written notice of any intended departure to IXOM or their solicitors, Colin Biggers Paisley.
(Emphasis in italics added.)
63 Mr Tulloch noted that the undertaking included the italicised words. In cross examination he explained that at the time, he understood the broader language, which encompassed the owners and also the demise charterers, was chosen because that language was consistent with his original demand for security that he had sent to the port agent in Gladstone on 15 June 2017, where he had sought security from the “owners/demise charterers”. He explained the reason for this:
Even if you had been told that there had been a demise charterer, there still may be some uncertainty as to whether the contractual carrier was the registered owner or the demise charterer. Is that - - -?---Yes, I would need – I would need an admission from the demise charterer that it was the carrier under the bill of lading.
Yes. So having a security that covered both addressed any continuing uncertainty, notwithstanding that you had been informed that CS Marine was a demise charterer. Is that correct?---That’s correct.
And in those circumstances, that’s why you were satisfied with the terms on which the – that aspect of the P&I club letter were provided. Is that so?---Yes.
(Emphasis added.)
64 In re-examination, Mr Tulloch said that he considered the italicised words in the Undertaking at [62] above to be confusing, because it was not clear to him how CS Marine was able to give the undertaking both on its own behalf but also on behalf of the owners. He considered that it raised the issue as to whether the reference in the email of 20 June 2017 was sufficiently clear as to who the carrier under the contract of carriage was. He could not see any reason why CS Marine should be giving the undertaking on behalf of owners if it had responsibility as the carrier under the Bill of Lading.
65 On 21 June 2017 at 2.24 pm, Mr Tulloch sent a proposal to Mr Hockaday setting out the terms on which IXOM would accept discharge of the consignment. These included that 19,000 tonnes would be delivered to Port Kembla and the balance to Darwin subject to the following three terms:
(a) The provision of the previously requested security for cargo damage in an amount of US$2 million. Our client would accept a suitably worded letter of undertaking from the Japan P&I Club in this regard.
(b) The vessel owner/demise charterer agreeing not to charge demurrage to Trammo, IXOM or any other party in relation to the shipment.
(c) The vessel owner/demise charterer agreeing to undertake the freight from Port Kembla to Darwin at no additional cost to Trammo or IXOM. (It is understood that the revised voyage, being Asia-Gladstone-Port Kembla-Darwin-Asia, is shorter than the original voyage time would have been had discharge at Yarraville been required.)
(Emphasis added.)
66 Mr Tulloch gave evidence that he chose the italicised language, providing alternatives, out of an abundance of caution, in circumstances where he was not entirely certain of the identity of the carrier under the Bill of Lading.
67 On 21 June 2017 at 6.30 pm, Mr Hockaday responded to IXOM’s offer of earlier that day. In it, he made a counter offer which was to: agree to the discharge of cargo at Port Kembla and Darwin as proposed; agree to provide the security sought in (a), attaching a draft Letter of Undertaking that the Club was prepared to offer; agree to the proposal in (c); but refuse the proposal in (b). The draft Letter of Undertaking attached included the following (CB 233):
In consideration of and upon condition that You refrain from taking any action resulting in the arrest or other detention of the above-named Vessel … for the purposes of securing your Claims, or founding jurisdiction in respect of or arising out of the Claims, we, The Japan Ship Owners’ Mutual Protection & Indemnity Association on behalf of the owners or demise charterers of the Vessel hereby irrevocably undertake to pay to You, as the consignee of the above bill of lading, on demand such sum as may be adjudged to be due to You by a final judgment of a competent court …
(Emphasis added.)
68 In the morning of 22 June 2017, Mr Andersen instructed Mr Tulloch by email to proceed on the basis of the “vessel owner’s response”. Plainly enough, that meant the response set out above, which was from both of T&M’s clients, being the registered owner and also the demise charterer.
69 Mr Tulloch informed Mr Hockaday, by providing a copy of Mr Andersen’s email, that he had received instructions to accept the offer. Later that day T&M wrote an email to Mr Tulloch which began as follows:
Further to our recent email exchanges, we confirm our client and your client have reached the following agreement in relation to the discharge and delivery of the cargo on board the vessel being carried pursuant to bill of lading no. CSM-17030-01 dated 22 May 2017:
(Emphasis added.)
70 Despite the use of the singular “client”, there can have been no doubt that T&M was responding on behalf of both of its clients, Blue One Shipping and CS Marine. The email thereafter set out the terms of the agreement, and attached the signed Letter of Undertaking from the Club in the form that had been provided in draft the previous day. Notably, the agreement served to adjust the terms of the contract of carriage as evidenced by the Bill of Lading (which cross referenced the Charter Party), by altering the terms of the discharge of the vessel and providing also that the Club provide security for claims under the Bill of Lading for a judgment against “owners or demise charterers of the Vessel”.
71 Independently, IXOM was at around this time engaged in communications with its cargo insurer, Vero, seeking indemnity for cargo damage. Mr Hunt, of Mills Oakley, was appointed to act for Vero. Indemnity was not immediately granted, and so IXOM continued to instruct CBP in respect of its claim against vessel interests and their cargo insurer. That position remained in place during March and April 2018, when CBP and Mills Oakley exchanged communications regarding the proposed claim by IXOM under the Bill of Lading.
72 On 7 July 2017, Mr Hunt contacted T&M and indicated that his firm acted for the cargo interests and insurers in relation to the consignment. At that time, Mr Hunt had a copy of the front of the Bill of Lading. He did not receive a copy of the Charter Party until shortly before the current proceedings were commenced.
73 Mr Hunt arranged for an inspection of the vessel and on 21 July 2017 was provided with various documents relevant to that inspection. A few minutes after the documents were sent to him, he sent an email to Mr Hockaday requesting a copy of the reverse side of the Bill of Lading and the Charter Party.
74 On 21 July 2017, Mills Oakley wrote to T&M requesting security for its client’s claim from the Club pursuant to a draft letter of undertaking (a draft form of which was attached) and also the execution of a side letter from the registered owners of the CS Onsan. The draft side letter included in the email relevantly sought a warranty from the registered owners that the vessel was not on demise charter and was to state:
We hereby warrant that the above mentioned [sic] ship was not on demise charter at any material time and in consideration for our giving you this warranty and in consideration of our P&I Club providing you with a letter of undertaking securing your above-mentioned claims in a form acceptable to you, we understand that you will not take steps to arrest the above-mentioned ship.
75 Mr Hockaday did not substantively respond to the request for the warranty, but suggested to Mr Hunt on 22 July 2017 that he speak to Mr Tulloch about the subject and later, on 24 July 2017, provided Mr Hunt with a copy of the letter of undertaking provided to IXOM on 22 July 2017. Its contents indicated to Mr Hunt that Vero was not able to pursue a claim for security because it had already been provided. Mr Hunt reviewed the terms of the undertaking at that time. It was not his preferred wording, but he considered that the “horse had already bolted”. That being so, the urgency of the situation had been resolved, and Mr Hunt’s next step was to make a diary entry for a date 12 months after the discharge of the consignment to ensure that the 12-month limitation period did not pass without notice.
76 In the following months, there was internal correspondence within IXOM about the dispute, and correspondence between T&M and CBP in relation to outstanding issues of demurrage. Mr Andersen loosely identified T&M as “the vessel owner’s lawyer” and Mr Tulloch said in an email to Mr Hockday on 9 October 2017 that his client would look to pursue “the owners” for the amount paid by IXOM for demurrage. By “owners” there can be little doubt that Mr Tulloch was referring to whomever it was that was the carrier pursuant to the contract evidenced by the Bill of Lading, whether that was the registered owner or the demise charterer.
77 On 3 May 2018, Mr Hunt sent an email to Mr Tulloch indicating that Vero had not resolved indemnity issues with IXOM and so the claim made in respect of the consignment would involve both insured and uninsured losses, with the result that they would have to work together in preparing any claim.
78 On 22 May 2018, Mr Hunt wrote to Mr Tulloch noting that the claim would become time barred as early as 6 June 2018 “in the absence of a time extension from owners/carriers” and so he asked Mr Tulloch to approach “owner/carriers lawyers” for a 3-month extension. Mr Tulloch then sought instructions from Mr Andersen in the following terms:
Please confirm you are happy for me to seek an extension of the time bar for a claim under the bill of lading/CoA against owners for cargo damage and demurrage up to and including 6 September 2018.
(Emphasis added.)
79 It will be noted that this request does not specify owners/carriers, but owners. Mr Tulloch was at that point of the view that the contracting carrier under the Bill of Lading was likely to be CS Marine. In cross examination, Mr Tulloch explained his usage:
And do I take it that your use of the word “owners” in that context was for the reason that you just gave in an answer a couple of minutes ago; namely that that was the term that was regularly used in all of this correspondence to refer to the carrier or the person under the contract – the person who would be liable for the damage to the cargo - - -?---Under the contract of carriage.
Evidenced by the bill of lading?---That’s correct.
You weren’t intending to refer to the registered owners at that time, were you?---I didn’t know – at that stage I still didn’t know whether CS Marine may have been the registered owner but - - -Yes.
And you hadn’t conducted any searches so you didn’t even – you didn’t know who was the registered owner. That’s correct, is it not?---That’s correct.
(Emphasis added.)
80 It is apparent that as at 23 May 2018 Mr Tulloch considered that the references to “owners” in the correspondence from T&M were to the party liable under the Bill of Lading for whom T&M acted, and, as he said in cross examination,
[w]hether that was CS Marine or the vessel’s [registered] owners was not an issue that directly concerned me. It was an issue that ultimately needed to be resolved if proceedings were commenced, by my view was that an extension of time was granted by the carrier under the relevant Bill of Lading.
Whilst he had an expectation that the carrier under the contract evidenced by the Bill of Lading was CS Marine, and had been told that this was so, nevertheless he was uncertain of the contractual position and he was seeking to protect the position against the carrier, whoever that may have been.
81 Mr Andersen gave the instructions that Mr Tulloch sought and, on 23 May 2018 at 6.01 pm, Mr Tulloch sent the following email to Mr Hockaday (the 23 May 2018 email):
You will recall that we act on behalf of Ixom Operations Pty Ltd in relation to the claim arising from contamination of the shipment of bulk sulphuric acid shipped aboard “CS Onsan” under Tanker Bill of Lading CSM-17030-01 issued at Onsan, Korea on or about 22 May 2017.
We are concerned about the approaching time bar and now ask that you confirm that owners are prepared to grant a three month extension of the time bar for claims for damage and/or demurrage under the above bill of lading and the incorporated charter party.
We would be pleased to hear from you with such confirmation by 5.00 pm on Monday 28 May 2018 if possible.
(Emphasis added.)
82 On 23 May 2018 at 6.07 pm, Mr Tulloch forwarded his 23 May 2018 6.01 pm email to Mr Hunt, and his email above the forwarded email included the following:
Further to your recent email regarding the approaching time bar. See my request for a time bar extension below.
I will let you know what response is received.
If you consider the request is unsuitable for any reason please advise without delay.
83 On 24 May 2018 at 3 pm, Mr Hockaday sent an email to Mr Choi of AON and Mr Kazuki Marushima of the Club, copying others from Aon, CS Marine and the Club. It included the following:
Further to my email of 14 May, we have now received the attached message from Ixom’s lawyers in which they note the approaching time bar and they have therefore requested owners provide a three month extension of the time bar “for claims for damage and/or demurrage under the above bill of lading and the incorporated charter party” (although they do not actually identify the date of the time bar or for the extension).
We do not yet know whether Ixom actually intend to make a claim against owners but there is probably nothing to be gained by denying the time extension at this time as this might only force Ixom to issue proceedings to preserve any claim which they might wish to make. As such, we would recommend agreeing to provide Ixom with an extension of the time bar for claims under the bill of lading although we would recommend a fixed date be set for the extension, say an extension to 31 August 2018.
May we please have owner’s instructions regarding Ixom’s request for an extension of the time bar.
(Emphasis in italics added.)
84 On 24 May 2018 at 3.27 pm, Mr Choi forwarded Mr Hockaday’s 24 May 2018 3 pm email to Mr Myungjin Kim and Mr Jaehyo Lee of CS Marine, copying in Mr Jaemo Sung and Mr Hyunkyu Kang of Aon. Mr Choi’s email above the forwarded email included the following (translated to English):
…
With the arrival of the 1 year time bar, this is about how [Matthew Hockday] has received Ixom’s lawyers’ request for an extension of time for the above matter until 31 August.
As we have not received a formal claim, we do not know exactly the quantity nor the details of the claim, however if we do not agree to the time extension request then Ixom will be in a position to have no choice but to commence proceedings against CS Marine in order to preserve the claim, so I think it will be good for you to agree to the time extension request for the time being. Please consider and let me know your opinion and we will reply.
85 On 24 May 2018 at 4.18 pm, Mr Choi replied to Mr Hockaday’s 24 May 2018 3 pm email. His reply included the following:
We have discussed this matter with the Members and they agreed that there is nothing to be gained by denying the time extension. Subject to the Club’s agreement, we confirm the Members’ agreement that you may respond to IXOM’s lawyers agreeing with an extension of the time bar for claims under the bill of lading up to and including 31 August 2018 on a strictly w/p basis.
86 On 24 May 2018 at 11.31 pm, Mr Marushima sent an email to Mr Hockaday, replying to Mr Choi’s 24 May 2018 4.18 pm email and copying Mr Choi, Mr Sung, Mr Kang, Mr Lee and Mr Kim and others, saying:
The Club also has no objection to the time extension up to and including 31st August.
87 On 25 May 2018 at 2.21 pm, Mr Hockaday replied to Mr Tulloch’s 23 May 2018 6.01 pm email. His reply (the 25 May 2018 email) included the following:
I refer to your email below. We advise our client agrees to provide your client, Ixom Operations Pty Ltd, with an extension of the limitation period, assuming it has not already expired, to 31 August 2018 for any claims for damage and/or demurrage under the said bill of lading.
(Emphasis added.)
88 Mr Tulloch explained in cross examination that he was satisfied with that response:
And at page 366 of the bundle, that was Mr Hockaday’s formal response to your email requesting the extension. Do you see that?---Yes.
…
And if you hadn’t have been satisfied with that response you would have – what would you have done?---I would have – I would have – well, I would have – it depends on what the response was. But I would have queried it or sought to rectify the situation or, if necessary, sought instructions to arrange commencement of proceedings - - -
All right?--- - - - within time.
89 In the weeks that followed, Vero confirmed that it would indemnify IXOM for the cargo claim and thereafter Vero instructed Mr Hunt of Mills Oakley to continue IXOM’s subrogated recovery claim under the Bill of Lading on behalf of IXOM.
90 On 17 August 2018 at 10.24 am, Mr Hunt referred to Mr Hockaday’s 25 May 2018 email and sought a further extension of the time bar:
I refer to the time extension granted to Ixom Operations Pty Ltd to 31 August 2018, set out in your email below. Ixom’s claim under our client’s policy as recently been settled and we have been instructed to pursue a subrogated recovery against carriers. We are still waiting for some of the supporting documentation before progressing the claim. In those circumstances, we would appreciate your confirmation of further time extension in the same terms as below, up to and including 30 November 2018.
We would appreciate your response before 29 August 2018.
91 On 27 August 2018 at 4.12 pm, Mr Hockaday replied to Mr Hunt’s 17 August 2018 10.24 am email, copying Mr Tulloch, as follows:
Further to your email of 17 August 2018, we advise our client agrees to provide Ixom Operations Pty Ltd with an extension of the limitation period, assuming it has not already expired, up to and including 30 November 2018 for any claims under the said bill of lading (B/L no. CSM-17030-01).
(Emphasis added.)
92 Mr Hockday sent a similar email to Mr Hunt the following day, clarifying that the extension was granted “for any claims for damage and/or demurrage” under the Bill of Lading.
93 On 19 November 2018 at 12 pm, Mr Hunt made a further request for an extension on the same terms as that granted on 27 August 2018 to which Mr Hockday responded on 20 November 2018 at 9.12 am, as follows:
Our client agrees to provide Ixom Operations Pty Ltd with an extension of the limitation period, assuming it has not already expired, up to and including 28 February 2019 for any claims under the said bill of lading (B/L no. CSM-17030-01).
94 Mr Hockaday sent a similar email to Mr Hunt, copying Mr Tulloch, later that day, clarifying that the extension was granted “for any claims for damage and/or demurrage” under the Bill of Lading.
95 On 26 February 2019 at 10.18 am, Mr Hunt made a further request for an extension, which Mr Hockaday communicated that his client agreed to grant on 27 February 2019 until 28 May 2019.
96 On 17 May 2019 at 5.34 pm, Mills Oakley requested a further extension that included the following:
Please note that we are currently in the final stages of finalising the letter of demand and awaiting instructions from Ixom’s broker to send it to you, which we anticipate early next week.
However, noting the upcoming time extension and the time that it will take for parties to review the claim documents, we request a time extension be granted in relation to Bill of Lading No. CSM-17030-01 for any claims for damage and/or demurrage under the said bill of lading on the same terms as the previous terms as the time extension granted by you on 27 February 2019, up to and including 28 August 2019.
97 On 24 May 2019, Mr Hockaday communicated that his client agreed to provide that extension.
98 On 24 May 2019, Mills Oakley sent an email to “CI Marine Recoveries” (Vero), copying in Mr Hunt, Mr Philip Stines and Ms Helen Kong, that included the following:
We have also amended the attached Letter of Demand to the carrier’s solicitor, which we seek your urgent instructions to send to Ixom for final approval so that we can send it to the carrier’s solicitors (without markup or the draft watermark).
(Emphasis in original.)
99 Mr Hunt in cross examination gave evidence that “the carrier’s solicitor” meant T&M.
100 On 24 May 2019 at 3.17 pm, Mr Corbett sent an email to Mills Oakley that included the following:
With respect to the above reference, below email and earlier phone conversation, please accept our instructions to send the letter of demand to Ixom for final approval and then to the carrier.
101 On 22 October 2019 at 3.10 pm, Mr Hockaday sent an email to Mills Oakley that included the following:
I refer to our discussion yesterday, and sorry for the delay in getting back to you on this issue. We can now confirm that we, owners (CS Marine) and its insurer (Japan P&I) agree to provide the undertaking requested, namely, to keep the invoices provided by your client and the information contained therein confidential and to not disclose the documents except in the context of your client’s claim.
The undertaking is provided on the basis that your client provides a similar undertaking in relation to information provided by our client about the shipment.
Our client also maintains its request for a copy of the Second Report provided by Integra notwithstanding your comments about the report.
102 In his oral evidence, Mr Hunt said that at this point he had not considered the identity of the owners of the CS Onsan.
103 On 14 February 2020 at 2.23 pm, Mills Oakley sent an email to T&M that included the following:
Further to my email below, we have obtained instructions to seek a further time bar extension in relation to this matter. Accordingly, can you please provide a further time bar extension on the same terms as the previous extensions i.e. for claims by Ixom Operations Pty Ltd for damage and/or demurrage under Bill of Lading No. CSM-17030-001 of 3 months, up to and including 28 May 2020. Please provide the time bar extension by Friday 21 February 2020.
104 On 24 February 2020 at 2.33 pm, T&M sent an email to Mills Oakley that included the following:
… I confirm our client agrees to provide Ixom Operations Pty Ltd with an extension of the limitation period, assuming it has not already expired, up to and including 28 May 2020 for any claims for damage and/or demurrage under the said bill of lading (B/L no. CSM-17030-01).
105 On 13 May 2020 at 8.05 pm, T&M sent an email to Mills Oakley that included the following:
… I confirm our client agrees to provide Ixom Operations Pty Ltd with an extension of the limitation period, assuming it has not already expired, up to and including 28 August 2020 for any claims for damage and/or demurrage under the said bill of lading (B/L no. CSM-17030-01).
106 On 7 August 2020 at 4.00 pm, Mills Oakley sought a further extension of the time bar until 28 November 2020, to which T&M responded in the affirmative on 25 August 2020.
107 On 27 October 2020 Vero gave instructions to Mr Hunt to commence proceedings “against the carrier” in accordance with a recommendation made by him to do so.
108 The Originating Application was filed on 25 November 2020 naming Blue One Shipping as the first defendant. Upon the filing of its defence denying that it was the carrier under the contract evidenced by the Bill of Lading, the Amended Originating Application was filed, naming CS Marine as the third defendant on 9 November 2021. As noted earlier, CS Marine contends that the proceedings were filed outside the extended limitation period and accordingly are barred.
109 IXOM contends that, as consignee to a non-negotiable bill of lading, it is entitled to sue on the Bill of Lading as if it were an original party, pursuant to s 8 of the Sea-Carriage Documents Act 1997 (NSW), because the Bill of Lading is within the definition of “contract of carriage” provided for in s 5. Accordingly, although Trammo was the initial party of the Charter Party and shipper on the Bill of Lading, IXOM is entitled to sue on the contract of carriage as if it were an original party.
110 IXOM submits that ordinarily only a party to the contract of carriage, or its subcontractor, can agree to extend or waive the Hague Visby limitation defence. The availability of extensions is necessarily limited to the carrier, citing Article 3 rule 6. Limitation extensions are strictly construed and an extension by owners does not ordinarily extend to charterers.
111 In the present case, IXOM contends that the Bill of Lading reasonably appeared to be one where the owner of the CS Onsan was the party to the contract of carriage and the contractual carrier. It was signed by the ship’s master, and the presence of the CS Marine stamp on it would indicate no more than a manager or agent. There was no indication that CS Marine was either the carrier or employed the master. Nor did the Charter Party make clear, for example through an identity of carrier clause or demise clause, that there was a demise charter.
112 IXOM submits that the first critical finding must be to identify who are the parties to the extension contract. It contends that Mr Andersen, as the relevant primary decision maker within IXOM, relied upon and delegated the consideration of who may be the contracting party for any future claim to Mr Tulloch. The identification of the parties to the extension agreement depends on the objective circumstances known to the parties at the time that the first extension was sought.
113 IXOM relies on the decisions in The “Stolt Loyalty” [1995] 1 Lloyds Rep 598 (CA) (Stolt Loyalty, appeal) and Tritton Resources Pty Ltd v Ever Rock Navigation S.A. [2019] FCA 276; 369 ALR 205 as demonstrating, on facts analogous to the present, that the correct legal approach is to ascertain the meaning of words used by the parties to an agreement by considering them in a business-like manner in the context in which they are used. In the present case, IXOM submits the result is that the word “owners” in the emails on 23 and 25 May 2018 had its ordinary meaning, being the registered owners of the ship and not, as the defendants contend, “vessel interests”. Accordingly, the parties to the agreement for the extension were the owners (being Blue One Shipping) on the one hand, and IXOM on the other.
114 Although in its submissions the ground shifted somewhat as to precisely how the pleaded estoppel case was put, the arguments in closing submissions may be summarised as follows.
115 In relation to its first estoppel claim, IXOM contends that the defendants knew that IXOM’s representatives were operating under an incorrect assumption as to the identity of the carrier but, rather than correct that assumption, simply agreed to the extension request from owners who are not a party to the contract of carriage. It submits that it would be unconscionable for the defendants to depart from the assumption which their 25 May 2018 email perpetuated, citing Commonwealth v Verwayen [1990] HCA 39; 170 CLR 394 at 444-445 (Deane J) and The “Stolt Loyalty” [1993] 2 Lloyds Rep 281 at 290-291 (Clarke J) (Stolt Loyalty, first instance).
116 In relation to its second estoppel claim, IXOM submits that that the email communications show that IXOM, via its solicitors, shared a common assumption with the defendants that the Bill of Lading was issued by the owner as the contractual carrier. By their mutual dealings when varying the carriage arrangements on 22 June 2017 the parties proceeded on the basis that the owner was the carrier under the Bill of Lading. That mutual basis for their dealings was communicated to both parties through the language in their emails and it would be unjust to permit the defendants to depart from the mutual assumption, citing Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd [1986] HCA 14; 160 CLR 226 at 244 (the Court).
117 In relation to its third estoppel claim, IXOM submits that the 25 May 2018 extension email involved a misrepresentation as to the identity of the carrier and a representation that an extension of time had in fact been granted, without qualifying who granted it, or clarifying the identity of the carrier. It submits that it would be unconscionable for the defendants to resile from the representation by denying the grant of the extensions, citing Pacol Ltd v Trade Line Ltd (The “Henrik Sif”) [1982] 1 Lloyds Rep 456 at 463 (Webster J), Air Tahiti Nui Pty Ltd v McKenzie [2009] NSWCA 429; 77 NSWLR 299 at 310-311 (Allsop P and Handley AJA, Hodgson JA agreeing) (referring to Verwayen at 444 (Deane J)) and Stolt Loyalty, first instance at 289-291 (Clarke J).
118 For each estoppel claim, IXOM contends that the question turns first on what finding is made as to the effect of the grant of the extension on 25 May 2018. If, as it contends in its primary case, the extension was by the registered owner, then the relevant reliance arises on 31 August 2018, after the three-month period expired.
119 In the alternative, if an extension was granted, as the defendants contend, by CS Marine, then there was still a claim that could have been brought against CS Marine in 2020. IXOM submits that a “contributory cause”, or “significant factor” for the decision made by Mr Hunt on behalf of IXOM (via its insurer) to sue only Blue One Shipping was that the terms of the 25 May 2018 email and subsequent extensions were granted on equivalent terms: Sidhu v van Dyke [2014] HCA 19; 251 CLR 505 at [71]-[73] (French CJ, Kiefel, Bell and Keane JJ).
120 In relation to the ACL claim, IXOM submits that the same facts give rise to a conclusion that the defendants have, by the email of 25 May 2018 and subsequent extension emails, engaged in conduct in breach of s 18 of the ACL. It submits that by their failure to identify the party granting the extension, or clarify the identity of the carrier, the defendants impliedly represented that the owner was the carrier or alternatively, failed to correct an assumption as to the carrier under the contract. In support of these propositions IXOM cites Butcher v Lachlan Elder Reality Pty Ltd [2004] HCA 60; 218 CLR 592 at [102] (McHugh J) and Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd [2010] HCA 31; 241 CLR 357 at [16], [20], [22] (French CJ and Kiefel J). By reason of this conduct, IXOM submits it is entitled to damages equal to those that it is entitled to recover against the carrier under the Bill of Lading for the alleged damage to the consignment.
121 The defendants deny T&M’s email of 25 May 2018 contained the representations alleged both in IXOM’s reply and in it submissions. They contend that there were no express representations to the effect alleged and that none should be implied from the text of the email, particularly having regard to the parties’ previous communications and the knowledge of IXOM of the role of CS Marine. The defendants submit that it was clear, as a matter of fact, that the carrier of the consignment under the Bill of Lading was CS Marine and that the circumstances of the demise charter displaced both the usual assumption that a Bill of Lading signed by the master of a vessel is the agent for the registered owner and any suggestion that the reference to “CS Marine” on the Bill of Lading indicated no more than that CS Marine was a manager or agent. At all material times, T&M was retained on behalf of both Blue One Shipping as registered owner and CS Marine as the bareboat charterer on instructions from the Club and Aon. The defendants submit that the communications between the parties from 16 June 2017 until 22 June 2017 demonstrate that T&M made clear that it acted for “the owners”, which was communicated in its email of 16 June 2017 which said that they acted for “vessel interests”, meaning both Blue One Shipping as registered owner and CS Marine as bareboat charterer. Accordingly, the defendants dispute the contention that the reference to “owners” in the CBP email of 23 May 2018 was a reference only to the registered owner of the vessel or that the response on 25 May 2018, in referring to “our client”, meant only the registered owner.
122 The defendants further deny that the T&M email of 25 May 2018 induced any belief in IXOM or its solicitor that Blue One Shipping was the carrier under the Bill of Lading or could reasonably have induced that belief. Any misapprehension could only have been based on a misapprehension as to the identity of the carrier, which was not induced by any earlier communication by the defendants, but due to a lack of reasonable care taken by IXOM and its solicitors in considering the available material, which clearly indicated that CS Marine was the carrier. Furthermore, the defendants submit that if IXOM or its solicitors were under any such misapprehension, the defendants were not aware of that fact, and were under no obligation to correct it. They submit that there is no evidence to support IXOM’s contention that the defendants had knowledge of any misapprehension, and they dispute that any inference may be drawn (as IXOM contends) from the fact that no evidence was given regarding the defendants’ state of mind when considering giving instructions to Mr Hockaday concerning the extension request. Nor, they submit, does any conventional estoppel arise, because there was no common assumption by the parties or their solicitors that the registered owner of CS Onsan was the carrier under the Bill of Lading.
123 The defendants finally submit that even if the representations alleged had been made by T&M’s email of 25 May 2018, there was no prejudice to IXOM at that time, because CS Marine had also agreed to the extension of the limitation period sought, and IXOM had not lost its cause of action against CS Marine.
124 In this litigation, there is no dispute between the parties that at all material times CS Marine was the “carrier” pursuant to the contract of carriage as evidenced by the Bill of Lading. The documents in evidence indicate that at all material times Blue One Shipping was the registered owner of the CS Onsan, and CS Marine was the demise charterer of the vessel, having chartered her from Blue One Shipping pursuant to a bareboat charter dated 17 June 2013. It was CS Marine, not Blue One Shipping, who was responsible for the maintenance and crewing of the Vessel. It arranged for the master, officers and crew of the vessel to be employed on CS Marine’s behalf pursuant to a Ship Crew Management Agreement between CS Marine and Korea Shipmanagers Co Ltd dated 5 January 2015. CS Marine as demise charterer was in possession of the CS Onsan at all material times, and operated her commercially for its own purposes. The CS Onsan was entered with the Club in the names of Blue One Shipping as the registered owner and CS Marine as bareboat charterer. The carriage of the consignment on board the CS Onsan to Australia was pursuant to the Charter Party dated 2 May 2017 that recorded CS Marine as the “owner”, being the disponent owner, and Trammo as charterer.
125 Each of the four primary claims advanced by IXOM in respect of the allegedly contaminated consignment arise from the contract of carriage as evidenced by the Bill of Lading. There is no dispute in the present case that all of those claims are subject to the limitation period applicable by the operation of the Hague Visby Rules, which are given force of law by s 8 of the Act, and set out in Schedule 1A of that Act.
126 In this regard, article 1 of the Hague Visby Rules defines “carrier” to include the owner or charterer who enters into a contract of carriage with a shipper, and “contract of carriage” as:
…a contract of carriage covered by a sea carriage document (to the extent that the document relates to the carriage of goods by sea), and includes a negotiable sea carriage document issued under a charterparty from the moment at which that document regulates the relations between its holder and the carrier concerned.
127 Article 3 relevantly provides in rule 6 that notice of any loss or damage must be given in writing to the carrier or its agent at the port of discharge before or at the time of discharge into the custody of the person entitled to delivery under the contract of carriage and that, subject to rule 6(bis) (which is not applicable here):
…the carrier and the ship shall in any event be discharged from all liability whatsoever in respect of the goods, unless suit is brought within one year of their delivery or of the date when they should have been delivered. This period may, however, be extended if the parties so agree after the cause of action has arisen.
128 On the basis of what it understood to be an initial extension granted on 25 May 2018, and subsequent extensions granted on 27 August 2018, 28 August 2018, 20 November 2018, 27 February 2019, 24 May 2019, 19 August 2019, 25 November 2019, 24 February 2020, 13 May 2020 and 25 August 2020, IXOM did not commence proceedings until shortly before the last extension expired on 25 November 2020. It then sued Blue One Shipping as the carrier of the consignment under the four primary claims identified in section 1.2 above. However, Blue One Shipping was not the carrier, which gave rise to Blue One Shipping’s current defence. IXOM then joined CS Marine. However, by the time that it did so, the extended limitation period had expired, and so CS Marine pleaded the limitation as an absolute defence.
129 The following legal propositions are relevant, by way of background, to the estoppel arguments.
130 In Air Tahiti at [65], Allsop P and Handley AJA cited Brennan J in Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; 164 CLR 387 at 415:
If the estoppel relates to the existence of a contract between the parties, the legal relationship … is ascertained by reference to the terms of the contract which has been assumed to exist … The source of legal obligation … is the assumed contract; the estoppel is not a source of legal obligation in the sense that [it] compels the party bound to adhere to the assumption that the contract exists.
131 In Stolt Loyalty, first instance at 290, Clarke J quoted The August Leonhardt [1985] 1 Lloyds Rep 28 at 35 (Kerr LJ):
…There cannot be any estoppel unless the alleged representor has said or done something, or failed to do something, with the result that – across the line between the parties – his action or inaction has produced some belief or expectation in the mind of the alleged representee, so that, depending on the circumstances, it would thereafter no longer be right to allow the alleged representor to resile by challenging the belief or expectation which he has engendered. To that extent at least, therefore, the alleged representor must be open to criticism.
132 Stolt Loyalty, first instance was the subject of an appeal, which overturned the trial judge on the question of the construction of the communications between the parties but did not address or criticise the Clarke J’s summary of the law in relation to estoppel; Stolt Loyalty, appeal.
133 In Air Tahiti, Allsop P and Handley AJA, Hodgson JA agreeing, made the following observations that may be considered to be relevant to the present dispute:
96 In [Pacol Ltd v Trade Lines Ltd; The “Henrik Sif” [1982] 1 Lloyds Rep 456], Webster J held that time charterers, who were not otherwise liable, were estopped from denying that they were parties to the contracts evidenced by the bills of lading. The representatives of the shipping interests knew that the representatives of the cargo interests were mistaken in thinking that their claim under the bills was against the time charterers but deliberately encouraged the mistake by granting extensions of time against the time charterers when the plaintiffs needed extensions against the owners.
97 In The “Stolt Loyalty” [1993] 2 Lloyds Rep 281 Clarke J, as he then was, upheld an estoppel in similar circumstances. The representatives of the shipping interests were aware that the solicitor for the cargo interests was mistaken in seeking an extension of time from the owners and needed an extension from the demise charterers. They decided to take advantage of this mistake and their letter granting an extension of time against the owners was worded so that it would not alert the solicitor for the cargo interests to her mistake. The demise charterers were estopped from relying on the time bar.
98 Both cases are distinguishable because the appellant’s conduct in this case was inadvertent, but they show that a party who is not liable on a contract of carriage may, by an estoppel, become liable as if he or she was, or be estopped from relying on a time bar. In both cases the estoppel arose after the contract of carriage was made.
134 The identity of a contracting party is to be ascertained “looking at the matter objectively, examining and construing any relevant documents in the factual matrix in which they were created and ascertaining between whom the parties objectively intended to contract”; Air Tahiti at [28] (Allsop P and Handley AJA, Hodgson JA agreeing).
135 The first estoppel case advanced by IXOM is based on a representation said to have been made in the 25 May 2018 email. This is to be construed according to the meaning which would have been given to it by a reasonable recipient, knowing that the requestor (Mr Tulloch) was intending to make a rational request.
136 In this regard, in Stolt Loyalty, appeal Hoffmann LJ said at 601:
The [relevant communication] must be construed according to the meaning which would have been given to it by a reasonable recipient knowing, as Mr Platt did, that Miss Cresswell was a competent solicitor and, even without such knowledge, on the assumption that she was intending to make a rational request. To seek an extension only from a party which, in the nature of things, was highly unlikely to be the party liable would have been quite irrational.
137 It is accordingly necessary to understand the 25 May 2018 email in the context in which it was received, which includes the communications to which I have referred in section 4 above. From these, and the oral evidence, the following conclusions may be reached.
138 I accept that Mr Andersen relied on Mr Tulloch to advise IXOM in relation to its rights, including in relation to the extension of the time bar. Mr Andersen had no expertise in maritime law, and relied upon Mr Tulloch in that respect. Accordingly, the state of mind of IXOM is to be judged by reference to that of a reasonable recipient in the position of Mr Tulloch.
139 Mr Tulloch formed a preliminary view on 15 June 2017 that CS Marine was likely to be the carrier under the contract evidenced by the Bill of Lading. He noted that the Charter Party identified CS Marine as “owner” and considered that this was to be understood to be the disponent owner. Nevertheless, this was only a preliminary view, and he did not consider that a final opinion on the subject would be necessary until proceedings were commenced. He considered that admissions may be required to clarify the position. He understood that his role in 2017 and 2018 was to protect IXOM’s position vis-à-vis any claim it may have against the carrier, whoever that may be.
140 Mr Tulloch’s position is not surprising. Identifying the person who is the carrier under a contract evidenced by a Bill of Lading is not straightforward. The difficulties are well documented in texts such as Foxton D, Bennett H, Berry S, Smith CF and Walsh D, Scrutton on Charterparties and Bills of Lading (24th ed, Sweet & Maxwell, 2021) at [6-032]-[6-045] and were observed by Hoffmann LJ in Stolt Loyalty, appeal at 601. The meaning of a particular reference to “owner” will be context-driven and can mean the registered owner or a demise charterer. I find that these considerations were known to Mr Tulloch and Mr Hockaday and would be understood by a reasonable recipient of the communications between the parties.
141 To this end, in his initial email to the port authority on 15 June 2017 Mr Tulloch sought security from “owners/demise charterers”. Mr Hockaday responded on 16 June 2017, confirming that he acted for “owners” and, in a further email that day, said that he acted for “vessel interests”. On 17 June 2017, Mr Hockaday informed Mr Tulloch by email that security would be provided by “vessel interests”. It is apparent that Mr Tulloch and Mr Hockaday both understood that the terms “owners”, “vessel interests” and “owners/demise charterers” indicated that T&M acted for both the registered owner of the vessel and also for the bareboat charterer. In my view, the correspondence reflects their mutual understanding in June 2017, that they were endeavouring to ensure that an interim agreement was reached to protect, respectively, IXOM’s position insofar as it had any claim in respect of the consignment against the carrier under the contract evinced by the Bill of Lading, and the vessel interests’ position in securing the discharge of the cargo so that the vessel could go about her business. That position was understood by Mr Hockaday, and had not changed by 25 May 2018.
142 On 20 June 2017 Mr Hockaday informed Mr Tulloch in terms that the letter of undertaking was provided by CS Marine as “the demise charterers of the vessel”. The attached undertaking muddied the waters somewhat by stating that the undertaking was given by CS Marine “on behalf of the owners and demise charterers”. That was apparently because the undertaking adopted the formulation proposed by Mr Tulloch in his demand from the port authority, but it involved ambiguity because there was little point in CS Marine acting on behalf of Blue One Shipping while it was the demise charterer. Even so, from this point in time at least it must have been apparent to Mr Tulloch (and thereby IXOM) that T&M represented the registered owner and also CS Marine as demise charterer.
143 The next day, Mr Tulloch sent a proposal for the discharge of the consignment in which he proposed that Mr Hockaday’s clients, being the “vessel owner/demise charterer”, agree to certain terms. This indicated, as Mr Tulloch’s oral evidence confirmed, that at this point he had not independently satisfied himself of the identity of the carrier, and wished to secure agreement from both of Mr Hockaday’s clients.
144 Mr Hockaday responded with a counter proposal at 6.30 pm on the same day, adopting the same language as Mr Tulloch of “vessel owner/demise charterer” in referring to “the owners or demise charterers of the Vessel” as the parties providing the undertaking. The resulting agreement had the effect that, at least as far as the parties were concerned, the terms of the contract of carriage as evidenced by the Bill of Lading were varied, inter alia, to permit the consignment to be discharged at a different port.
145 When Mr Tulloch requested an extension of the time limitation on 23 May 2018, he sought confirmation that owners would grant one in respect of “claims for damage and/or demurrage under the … bill of lading and the incorporated charter party”. The reference to “owners” considered absent the context of prior communications was perhaps ambiguous. It could have meant either the registered owner (Blue One Shipping), or the owner identified in the Charter Party who was the demise charterer, CS Marine. However, taken in context, at a minimum it is clear that a reasonable person in the position of Mr Hockaday would have understood it to be a reference to the party who could meaningfully grant an extension of the potential claims identified, being the disponent owner of the vessel who was the carrier under the contract evidenced by the Bill of Lading.
146 At that point in time, as noted above, Mr Tulloch understood that T&M acted for the vessel interests, being those interested in the vessel on which the consignment was placed: not only the registered owner, but “owners”, which included CS Marine. It was intended to be, and was, a broad request to protect IXOM’s interests, consistent with communications that passed between the parties in June 2017.
147 Mr Hockaday sought and obtained instructions to comply with the request in the terms upon which it was sought, saying in his emailed response on 25 May 2018 to Mr Tulloch “our client agrees to provide … an extension of the limitation period … for any claims for damage and/or demurrage under the said bill of lading”.
148 To one reading the two emails alone and without the context of the prior communications, it is apparent that Mr Hockaday was stating that he had received instructions to comply with the request. Although expressed in the singular (“our client”), the request was for confirmation that owners (plural) give the extension, and it was that request that was granted. Objectively viewed in the light of the previous communications there can be little doubt that T&M was communicating that the extension sought from Blue One Shipping and CS Marine was being granted.
149 Both parties proceeded on the basis that T&M’s two clients provided their agreement that would maintain the status quo, in the case of the 23 May 2018 request by ensuring that such claim as IXOM sought to bring in respect of the consignment would not be time barred. Legally, it was of course CS Marine that effectively granted the extension.
150 IXOM contends in its first estoppel case that the 25 May 2018 email was misleading because it represented that Blue One Shipping as owner was a party to the contract of carriage evidenced by the Bill of Lading. I do not consider that this representation was made. To a reasonable reader, in context, the 25 May 2018 email does no more than represent that whichever of T&M’s clients was legally able to grant an extension of the time bar had done so. By his email of 23 May 2018 Mr Tulloch did not seek to disentangle which of Mr Hockaday’s clients was in fact the carrier (which was able to grant the extension), he simply wanted the assurance that whichever of the two was able to do so would grant the extension. The defendants acceded to that request.
151 A reasonable recipient of the representation made by T&M on 25 May 2018 on behalf of its clients would have understood it to mean that IXOM got what it sought: namely an extension of the limitation period for any claims for damages and/or demurrage under the Bill of Lading, whether that claim was to be made against the registered owner or CS Marine.
152 Mr Hunt gave evidence that when he received a copy of Mr Tulloch’s request for an extension of the time bar on 23 May 2018, he understood that it was a request being made only of the registered owner of the vessel and that the response provided on 25 May 2018 was similarly confined. That was not the position taken by Mr Tulloch, on behalf of IXOM, at the time. Mr Hunt gave evidence that he formed this view on the basis of the content of the Bill of Lading, an absence of any knowledge of any demise charter arrangement, and based on the use by Mr Tulloch of the word “owners” in his request email of 23 May 2018. At the time Mr Hunt did not have a copy of the Charter Party. Nor did Mr Hunt form his view by reference to anything that T&M had said to Mr Tulloch prior to the 23 May 2018 request, including the 20 June 2017 email which stated in terms that CS Marine was the demise charterer.
153 Because Vero had not at that time indemnified IXOM, Mr Hunt considered that it was Mr Tulloch’s role to seek a time extension from the appropriate party. He did not consider that it would be appropriate to ask Mr Tulloch whether he was seeking a time extension from the appropriate person, even though that request was confined, on his understanding of it, to the registered owners. As he put it in cross examination:
… when I say it was his role, he was the one seeking the appropriate time extension. I mean, to ask him, “Was there a demise charter”, is of, I guess, akin to ask him whether or – your wife whether she locked the door when she left the house. You would probably get walloped. I don’t know. It’s just not something that you second guess.
154 Mr Hunt’s subjective understanding of the exchange of emails in May 2018 was not formed in the context of the earlier communications that had passed between the parties and provides little assistance in formulating an understanding of how a reasonable recipient of the representation in the email of 25 May 2018 would have understood it at the time. Indeed, Mr Hunt’s deferral to Mr Tulloch’s view as to the adequacy of the response suggests that at the time he did not purport to place himself in the position of Mr Tulloch.
155 Accordingly, in relation to the first estoppel claim, for the reasons given, I do not consider that it has been established that by reason of the defendants’ email of 25 May 2018 they represented that Blue One Shipping was party to the contract of carriage under the Bill of Lading, or that IXOM understood or assumed that the registered owner of the vessel was the carrier under the contract of carriage.
156 In addition, I would in any event reject this argument because, for the following reasons, I do not consider that IXOM has established that the defendants knew that IXOM’s representatives were operating under an incorrect assumption such that they had sought an extension from Blue One Shipping, being the wrong party.
157 First, Mr Hockaday gave evidence that he did not understand this to be the case. I accept that evidence.
158 Secondly, the internal correspondence within the Club and Aon of 24 May 2018 does not support the proposition that Mr Hockaday’s clients were aware that IXOM was operating under such an assumption. Mr Hockaday sought instructions on 24 May 2018, noting in his email that in light of the approaching time bar IXOM had requested owners provide a 3-month extension. The email noted that whilst they did not know whether a claim would be advanced, there was likely nothing to be gained from denying the extension “as this may only force IXOM to issue proceedings to preserve any claim which they may wish to make”. Mr Hockaday sought “owner’s instructions”.
159 Mr Hockaday sent his request for instructions to the Club, Aon and CS Marine. This is consistent with his approach throughout, which was to represent the vessel interests, which he referred to as “owners”. There is no suggestion in the correspondence that his instructors thought that IXOM was labouring under the impression that the registered owner was the relevant contractual carrier, or that the extension request was addressed only to the registered owner. Indeed, Mr Choi passed Mr Hockaday’s request for instructions to CS Marine, the Club and Aon representatives noting that if the time request were not to be agreed, IXOM would have no choice but to proceed against CS Marine. Contrary to the submission advanced by IXOM, there is no suggestion in his email that Mr Choi considered that, by agreeing to the extension, CS Marine may avoid liability on the claim altogether. Indeed, the tenor of his recommendation is the commercially sensible approach that if an extension were not granted, IXOM would be obliged to sue CS Marine immediately, whereas, if an extension were granted, IXOM, with the benefit for further time, may not elect to sue at all. In any event, it is clear that Mr Hockaday and his clients considered that the request for the extension was directed at least to CS Marine and that the extension sought was granted.
160 Thirdly, IXOM places emphasis on the fact that only Mr Hockaday was called to give evidence on behalf of the defendants. It notes that there is no evidence before the Court as to what the representatives of Blue One Shipping or CS Marine thought when they consented to the extension on 25 May 2018 and, in particular, whether they had actual knowledge of the error that IXOM had sought an extension from the wrong party (in which case the Verwayen estoppel would be made out) or whether it would be unconscionable for them to depart from an inadvertent misrepresentation which is relied upon, in the sense contemplated in Air Tahiti.
161 Having regard to the internal communications between the defendants to which I have referred, I do not consider that the failure of the defendants to call Mr Choi or any of the other instructors to give evidence gives rise to an inference that the defendants knew that IXOM’s representatives were operating under an incorrect assumption as to the identity of the carrier. In my view it is apparent that the representatives of Blue One Shipping and CS Marine did not consider that IXOM was labouring under any misapprehension as to the true state of affairs and did not seek to take advantage of any error.
162 Fourthly, IXOM relies on the facts in Stolt Loyalty to support its case; however, I consider that case to be relevantly different.
163 In Stolt Loyalty, Clyde & Co, solicitors, acted for the cargo interests and Gard (U.K.) Ltd represented the P & I club by which Soframar SA and Stolt Loyalty Inc, respectively the registered owner and bareboat charterer of the vessel, were insured. Clyde and Gard negotiated an agreement whereby the “owners and/or demise charterers” provided security for the cargo interests’ claims arising from alleged contamination of the cargo. At that point it was clear to both parties that Stolt Loyalty was the demise charterer of the vessel. About a year later, a solicitor at Clyde sought an extension of the time bar, but the telex request was only from “owners”, the solicitor having forgotten about the existence of the demise charter. Gard responded, confirming that it had received instructions to grant the extension on behalf of the owners.
164 The question before the trial judge was whether, on the true construction of the correspondence, an extension had been granted on behalf of whichever of Soframar and Stolt Loyalty was a party to the bill of lading, or whether it was granted solely on behalf of the owners, which could never have been liable at all. The trial judge preferred the former construction, and found that Soframar and Stolt Loyalty were estopped from denying the existence of the extensions of the time bar: Stolt Loyalty, first instance at 291.
165 On appeal, the demise charterers contended that, whilst they understood that the request was being made to the wrong party, because the registered owners could never have granted the extension as they were not the carrier, nevertheless that was not the demise charterers’ concern and they had given what they were asked to give, despite the slip-up.
166 Lord Justice Hoffmann (Hirst and Glidewell LJJ agreeing) noted at page 601 that a word like “owner” does not have a fixed and absolute meaning. It can vary according to its context and mean either the registered owner or, in the context of a bill of lading, the party which has the liabilities of shipowner under the contract of affreightment. The bills of lading in that case made a number of references to the “owner” and “shipowner” which, in the context of that bill, were agreed to mean Stolt Loyalty, the demise charterer. In that context, Hoffman LJ found that the use of “owner” in the request for an extension meant, and was understood to mean, the company which was the owner for the purposes of the bill of lading. He considered that Gard knew perfectly well what Clyde meant in its request and that Clyde previously distinguished between Soframar and Stolt Loyalty by referring to the former as the “actual shipowners”.
167 Despite the evidence that Ms Cresswell had forgotten about the bareboat charter, the court concluded that viewed objectively the correspondence conveyed the intention which ought objectively to be ascribed to her (at page 602).
168 In the present case, the defendants agreed to the request for an extension on behalf of both Blue One Shipping and CS Marine, thereby avoiding any debate as to which was the contractual carrier under the Bill of Lading. An effective extension was granted by CS Marine, such that had IXOM commenced proceedings against CS Marine within the extended period, the claim would not have been the subject of the time bar. In my view, these facts distinguish Stolt Loyalty.
169 I also reject the second estoppel claim. For the reasons given, I reject the contention that the 25 May 2018 email purported to give an extension of the limitation period by the owner alone. Furthermore, it is apparent that there was no mutual assumption to that effect. To the contrary, the evidence demonstrates that at no point from 15 June 2017 did Mr Hockaday, or his client, proceed together with Blue One Shipping on any mutual assumption that Blue One Shipping as registered owner of the vessel was a party to the contract of carriage. Nor, for the reasons that I have stated, did IXOM or the defendants reasonably consider that the request of 23 May 2018 was for an extension only from the registered owner. The answer provided by Mr Hockaday in the 25 May 2018 email was not based on a common assumption that the extension was limited to the registered owner.
170 I also reject the third estoppel claim. For the reasons given, I do not accept that the 25 May 2018 email misrepresented the parties to the contract of carriage evidenced by the Bill of Lading. As I have noted, the 23 May 2018 email did not expressly or impliedly seek clarification as to the identity of the carrier under the contract evidenced by the Bill of Lading. It follows that, in the light of my findings, no unconscionability in the form pleaded arises such that this version of the estoppel case would be made out.
171 Having found that none of the pleaded representations were made out, the granting of subsequent extensions on equivalent terms to the 25 May 2018 email did not amount to an encouraging representation on the part of the defendants such that it would be a contributory cause or significant factor for the decision to sue only Blue One Shipping.
172 It also follows from the foregoing that I also reject the ACL claim on the basis that none of the pleaded misrepresentations have been established. In particular, I reject the contention that, by the email of 25 May 2018, the defendants represented that Blue One Shipping as the vessel owner was a party to the contract of carriage evidenced by the Bill of Lading or that its consent was sufficient to provide an extension of the time bar. IXOM does not contend that any additional or different representation arises from the subsequent extensions granted in correspondence dated from 27 August 2018 and following (details of which are set out in section 4 above).
173 There was some suggestion in oral submissions by counsel for IXOM that the ACL claim could succeed notwithstanding the failure of the estoppel claim regarding the overall context of representations. Whilst as a matter of theory that may be possible, in the present case, having regard to my conclusions as to the representations made on 23 and 25 May 2018, I do not accept that the ACL claim can succeed in the present case. Having regard to this conclusion, it is not necessary to address separately any questions of reliance that may arise regarding the subsequent email exchanges.
174 For the reasons given above, the separate questions are to be answered as follows:
(1) Blue One Shipping is not estopped from denying that it was and is a party to the contract of carriage evidenced by the Bill of Lading dated 22 May 2017 by reason of the matters pleaded in paragraph 2 of IXOM’s reply to Blue One Shipping’s defence to the amended statement of claim dated 1 December 2021;
(2) CS Marine is not estopped from relying on Article 3 rule 6 of the Australian Amended Hague Visby Rules in response to IXOM’s claim against CS Marine in paragraphs 12 to 22 of IXOM’s further amended statement of claim dated 9 November 2021 by reason of the matters pleaded in paragraphs 2 and 3 of IXOM’s reply to CS Marine’s defence to the amended statement of claim;
(3) Blue One Shipping and/or CS Marine did not engage in conduct in contravention of s 18 of the ACL by reason of the matters pleaded in paragraphs 25 to 33 of IXOM’s amended statement of claim dated 9 November 2021; and
(4) It is not necessary to decide whether Blue One Shipping and CS Marine’s allegations of contributory negligence and concurrent wrongdoers in paragraphs 56 to 61 of the defence of Blue One Shipping to the amended statement of claim dated 24 November 2021 and paragraphs 37 to 42 of the defence of CS Marine to the amended statement of claim dated 24 November 2021 apply to reduce any damages that IXOM may be entitled to by reason of Blue One Shipping and/or CS Marine’s alleged contravention of s 18 of the ACL.
175 The parties accept that negative answers to questions (1) to (3) are determinative of the matter as a whole, with the result that the proceedings must be dismissed. The question of costs was not addressed during the course of the hearing. My present view is that the plaintiff must pay the defendants’ costs on an ordinary basis, however, if any party contends for a different outcome, they may approach my associate within 14 days for the matter to be relisted in relation to that question.
I certify that the preceding one hundred and seventy-five (175) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Burley. |
Associate:
