Daebo Shipping Co Ltd v The Ship Go Star [2011] FCA 1015 | Case summary

REASONS FOR JUDGMENT 1 The defendant is a company, Go Star Maritime Co SA. It is the owner of the ship "MV Go Star", a ship registered in Malta. 2 In 2007, the defendant entered into a time charterparty of the ship "MV Go Star" with Breakbulk Marine Services Limited (BMS). This was the head charterparty. 3 BMS then sub-chartered the ship to Bluefield Shipping Co Ltd. In July 2007 the plaintiff, Daebo Shipping Co Ltd, a company incorporated in South Korea, entered into a time sub-charterparty of the ship from Bluefield. 4 In December 2008, Daebo entered into a time sub-charterparty with another South Korean company, Nanyuan Shipping Co Ltd. This sub-charterparty provided that delivery of the ship was to occur in Chinese territorial waters at a port near Shanghai. On 3 January 2009, a certificate of delivery was executed, which recorded that delivery to Nanyuan had occurred on 3 January 2009. A day later, Daebo issued an invoice to Nanyuan, sometimes referred to as Nasco, for the first hire payment and the bunkers. 5 In the meanwhile, the head charterer BMS had fallen into arrears with the payment of hire under the head charterparty. Before Nanyuan had paid the Daebo invoice for the hire and bunkers, the defendant's agent advised Nanyuan that it intended to exercise its rights to withdraw the ship under the head charterparty. 6 After having received these and other communications from the defendant's agent, Nanyuan did not pay the invoice furnished by Daebo, and arranged an alternative carrier for its cargo. On or around 15 January 2009, the defendant withdrew the ship "Go Star" under the head charterparty on the grounds of non-payment of hire. On or around 21 January 2009, the defendant chartered the ship to another company, which directed that the ship sail to Albany in Western Australia. 7 Daebo claims that by its actions, the defendant has converted the bunkers and, further, that it refused to deliver the bunkers on demand. Daebo, accordingly, claims that the defendant is liable for damages in conversion and detinue. 8 Further, Daebo claims that the defendant unlawfully interfered in its contractual relations with Nanyuan, and also claims damages against the defendant on these grounds.

background 9 On 21 June 2007, the defendant entered into a time charterparty of the ship with BMS for a period of 36-40 months. The terms of the charterparty were set out in the New York Produce Exchange Form for a time charter which was revised on 12 June 1981 (the ASBATIME NYPE Form), together with a number of rider clauses. Clause 5 of the head charterparty provided: Failing the punctual and regular payment of the hire, or on any breach of this Charter subject to Clause 30, the Owners shall be at liberty to withdraw the vessel from the service of the Charterers without prejudice to any claims they (the Owners) may otherwise have on the Charterers. (Original emphasis.) 10 On 14 July 2007, BMS and Felicia Navigation Ltd, acting as agent for Bluefield Shipping Co Ltd, entered into a time charterparty using the ASBATIME NYPE Form. The parties accepted that this charterparty was between BMS and Bluefield and will be referred to as the Bluefield sub-charterparty. 11 On 27 July 2007, Bluefield and Daebo entered into a sub-charterparty using the ASBATIME NYPE Form, together with a number of rider clauses for a period of not less than 23 months. This will be referred to as the Daebo sub-charterparty. 12 The Daebo sub-charterparty contained the following relevant clauses: Delivery: Vessel shall be placed at the disposal of the Charterers on dropping last outward sea pilot, one safe port, world wide, any time day or night, Sundays and Holidays included. (Owners will revert with exact ranges 30 days before delivery.) (Original emphasis.) … 2. The Charterers, while the vessel is on-hire, shall provide and pay for all the fuel except as otherwise agreed… … 31. Charterers to take over and pay together with first hire payment bunkers upon vessel's delivery. Reverting with quantities/prices. On redelivery bunkers same quantities and same price both end. 13 On 4 January 2008, Daebo, as disponent owner, entered into a further sub-charterparty of the ship to Daeyang Shipping Co Ltd. The Daeyang sub-charterparty was also on the ASBATIME NYPE Form, together with a number of rider clauses. 14 The Daeyang sub-charterparty provided that redelivery was to be: on dropping last outward sea pilot one (1) safe port PMO/Japan range including full Indonesia/Malaysia/Vietnam/Thailand/China/Philippine/Taiwan or in Charterer's option Boston/Bahia Blanca range or in Charterer's option Skaw/Passero range including full Mediterranean/Black Sea range or in Charterer's option Casablanca/Durban range or in Charterer's option Vancouver BC/Buenaventura range port in Charterer's option, any time day or night, Sunday and holiday included. Unless otherwise mutually agree. 15 The Daeyang sub-charterparty also provided that charterers were required to "take over and pay together with first hire payment bunkers within two (2) banking days after vessel's delivery". The vessel was to be redelivered with "bunkers on redelivery to be about same quantities as on delivery". The charterer was entitled to deduct from the last or penultimate hire an amount for estimated bunkers on redelivery. 16 On 30 December 2008, shortly before the anticipated date of the redelivery of the ship by Daeyang to Daebo under the Daeyang sub-charter, Daebo sub-chartered the ship to Nanyuan. 17 The terms of the Nanyuan sub-charterparty are set out in a clean recap by email from Nanyuan's agent, Ara Shipping Co Ltd. The cargo under the Nanyuan sub-charterparty was to be carried from Fangcheng in China to Angola, with re-delivery in Angola. The clean recap email provided for the following relevant terms: (a) Delivery: "dlosp CJK, ATDNSHINC" (delivery last outward sea pilot Chang Jiang Kou [a port near Shanghai] any time day or night Sundays and holidays included). (b) Hire payable every 15 days in advance. Subsequent hires also in advance every 15 days. First hire bunkers on delivery value to be paid to [Daebo's] nominated bank within 3 banking days of the vessel's delivery to Nanyuan. (c) Bunkers on delivery were about 600-850 metric tonnes IFO and about 60-85 metric tonnes MDO. (d) Bunkers on redelivery to be approximately the same quantity on delivery. Prices used on both ends USD 230/MT for IFO and USD 450/MT for MDO. (e) Bunkers on redelivery to be about the same quantities as on delivery. Charterers have the right to deduct value of Bunkers on redelivery from last sufficient charter hire. 18 The recap email also provided that English law was to apply, and that the terms were otherwise as in the owner's back-to-back charterparty; namely, the Daebo sub-charterparty. 19 By an email dated 31 December 2008 to Ara Shipping, the agents for Nanyuan, Mr Kim of Daebo advised that the ship would be delivered at dlosp Shanghai on or about 2 January 2009 and requested that the message be taken as a final delivery notice. 20 On 31 December 2008, Mr Kim also sent an email to the Master of the ship whereby he advised that delivery would be at Chang Jiang Koo, and that the charterer, Nanyuan, would contact him for his sailing instructions. 21 On 1 January 2009, Ms Jane Chen of Nanyuan sent an email to the Master of the "Go Star" which welcomed the Master and crew of the ship into the time charter fleet of Nanyuan's principal and advised that the voyage would be controlled and operated by Nanyuan. The email also advised that Ms Jane Chen was the person in charge (PIC). The email address from which the email was sent was a Chinese email address. Ms Chen's email was copied to Captain Hu whose email address was: seaweb@singnet.com.sg. The email informed the Master of the essential terms of the Nanyuan sub-charterparty. The email also went on to issue the Master of the ship with a number of detailed instructions. This included an instruction that the Master should, during the "entire charter" proceed at full speed with utmost dispatch unless otherwise advised. The Master was also instructed to report on, among other things, the remaining bunkers on board, and when the ship switched from heavy oil to diesel oil during manoeuvring. 22 On 2 January 2009, Mr Kim of Daebo sent another email to Ara Shipping, repeating that the ship would be delivered at dlosp Shanghai on or around 2nd or 3rd January 2009, and asking that the message be taken as final delivery notice. 23 Evalend Shipping Co SA carried on business in Greece. It was, at all relevant times, acting as fleet manager and agent of the defendant. Mr Nicholas Pantelias, an officer of Evalend Shipping, sent an email from Greece dated 2 January 2009 addressed to Ms Jane Chen's email address in China in the following terms: This is Evalend Shipping Co SA, managers of the Head Owners of MV GO STAR which we understand has been sub time chartered to your goodselves. We also understand that you are to take delivery of the vessel upon dropping the last outward pilot Shanghai, CJK pilot station and this delivery is now imminent. Regret to advise you that Head Charterers are very seriously in arias (sic) of hire payments and Owners are considering all their options including but not limited to the withdrawal of the vessel from Head Charterers service. In the meantime we advise you that Head Owners Messrs GO Star Maritime Company SA hereby exercise their rights under the head charter in respect of lien and kindly request you not to proceed with any payment under your sub-charter and you are being put on notice that should you elect to ignore this notice you may be called upon to pay such sums twice over. As you can appreciate Head Owners are also vested with a lien on cargo and such right will be exercised in due course as they are not at all minded to perform a voyage under any bill of lading without being certain of hires being paid punctually and in advance. Please be guided accordingly and kindly acknowledge receipt of this notice. 24 That email was forwarded to Captain Hu of Nanyuan in Singapore. Captain Hu then sent an email, dated 3 January 2009, to Evalend in which he said that he had received Evalend's message to Ms Chen and asked for the telephone number of the person in charge at Evalend. 25 Mr Pantelias' assistant responded by email to Captain Hu's email, by stating that Mr Pantelias was the person in charge who would telephone Captain Hu. The email also included Mr Pantelias' mobile telephone number. The email was sent by Mr Pantelias' assistant because Mr Pantelias had, by the time that Captain Hu's email arrived in Athens, left Evalend's office. 26 Shortly after receiving that email, Captain Hu telephoned Mr Pantelias' mobile number but was unable to speak to Mr Pantelias. Mr Pantelias then, having noticed the missed call number from Captain Hu on his mobile, telephoned Captain Hu by using the number recorded on his mobile telephone. Mr Pantelias and Captain Hu then had a telephone conversation over the weekend. During the telephone conversation, Captain Hu said words to the effect that he intended to investigate whether Nanyuan could find an alternative carrier for his cargo. 27 After the telephone call, Mr Pantelias sent the following email to Captain Hu at his Singapore email address: We refer to our phone conversation a short while ago and we simply wish to ensure that our message is read once again very carefully and to respectfully urge you to take legal opinion before you take any decisions and you act upon them. In our message we advised you that we are considering with the physical owners their options including but not limited vessel's withdrawal from Head charterer's service. The vessel however has not been withdrawn and if you proceed and throw up your charter with your Owners you may be held in repudiatory breach of your charter and expose your selves to damages. We have simply asked you to withhold payments under your charter. In other words our last must be seen as a notice of lien and no more. We reiterate that we have nothing to share with your good selves and we regret that we have to deal in this situation which of not of our making. Once again we wish to ensure that our suggestions are put forward with utmost respect and we wish to ensure that we do not run into any conflict of interest between ourselves and be on the same side of the fence. 28 On 3 January 2009, a redelivery certificate evidencing the delivery of the ship pursuant to the Daeyang sub-charterparty by the charterer, Daeyang, to the disponent owner, Daebo was signed by the Master and the surveyor. 29 On 3 January 2009, the Master and the surveyor also executed a certificate of delivery evidencing the delivery of the ship by Daebo, as disponent owner under the Nanyuan sub-charterparty to Nanyuan. The position of delivery recorded on the certificate is dlosp Shanghai. The time for delivery is recorded on the certificate as 20:30 hours local time on 3 January 2009. 30 On 4 January 2009, Daebo issued an invoice for the sum of USD303,436.60 to Nanyuan for the payment of hire and bunkers on delivery. 31 That invoice was never paid by Nanyuan. 32 On 7 January 2009, Mr Pantelias sent another email to Ms Chen of Nanyuan at Nanyuan's email address in China. That email read relevantly: Ahead of vessel's arrival at her intended loading port and whilst it is repeated that the vessel has not been withdrawn from head charterers service we reiterate that the head charterers are now very seriously in arrears of their hire payments as no hire has been paid since 21st December and the daily hire rate is US$27,000. In the circumstances you are kindly requested not to proceed with any payments of any sums under your charter as you may be called upon to pay twice over such sums. Please acknowledge receipt of this message. 33 By 8 January 2009, "Go Star" had reached Fangcheng and was awaiting instructions as to the loading of its cargo. On that day the Master of "Go Star" sent an email to various parties which stated: The charterers "NASCO" just replied to my phone call and advised me "to check with my owners as they cancelled the vessel". Kindly advise whether I should drop the anchor waiting for instructions. 34 A short while later, on 8 January 2009, the Master sent an email to Mr Kim of Daebo, Daeyang, Bluefield (Felicia), BMS and Evalend, which stated relevantly: FYI: Sub-charterer's agents at Fangcheng advised master this morning, verbally, that "another vessel already loading our cargo". 35 Also on 8 January 2009, Sinoagent Fangcheng (as agent for Nanyuan) sent an email to the Master, stating that its client was withdrawing from the Nanyuan sub-charterparty. The email stated as follows: Dear Capt Pls kindly be advc tt our client had instruct us cancel the agency appoint for yr vsl, bcz shipper had choice another vsl loading cargo. Any question pls free le me know. 36 On 8 January 2009, Ara Shipping (as agent for Nanyuan) sent an email to Daebo, which stated relevantly: Without prejudice As chtrs have send our declaration to Owners/Daebo as per REF: 110552-HU 03-01-2009/13:15:39 as result of a notice from head owners as per "exercise their rights under the head charter in respect of lien and kindly request you not to proceed with any payment…", not yet received any reply to verify the lawful delivery of the subject vessel per CP dd 1-1-2009 before laycan expires, and Charterers would like to exercise its rights to withdraw the Charter as validity of performance of this CP is in vain, and ship has not been ready in all respects to load cargo for intended voyage as indemnity of lien risk and cooperation by head charterers/owners could not be available with full guarantee. Charterers reserve all rights to hold Owners responsible for all losses and damages to this failure of COP due to NON-performance of the Owners. 37 On 9 January 2009, Mr Pantelias sent an email addressed to Captain Hu at Nanyuan email address in China. The email stated: Dear Captain Hu Re: Go Star We refer to your call a short while ago and our formal messages herebelow. At your request we reconfirm that head charterers have not paid any hires and they are seriously in arrears of hire payments. Consequently our notices can not be withdrawn at present. As promised should the situation change we will not fail to notify you and ensure our notification is attended without any delay. In the meantime we wish you a nice weekend. Best Regards Legal and Claims Department Evalend Shipping Co. S.A. (as Agents to Head and Physical owners) 38 The "formal messages" to which Mr Pantelias referred were his email messages of 2 January 2009 and 7 January 2009 to Ms Chen. On 13 January 2009, the Master of the ship sent an email to Daebo (and the other disponent owners) which stated relevantly: Further to my msgs please be advised that after phone contact with disp. owners messrs "Daebo" was advised that sub-charterers messrs NASCO wish to cancel next employment. 39 Ara Shipping sent another email to Daebo on 13 January 2009, relevantly, in the following terms: This is to reconfirm Charterers' position to Owners/Daebo Shipping to remain the same as our notice on 8th Jan 2008 to terminate the CP, not to take delivery of the subject vessel, because several notices received from head owners as to deter CP performance as per "exercise their rights under the head charter in respect of lien and kindly request you not to proceed with any payment…", and reply we requested from Owners failed to prepare and verify lawful delivery of the vessel per CP dated 30th dec 2008. thereafter Charterers not able to take delivery of the vessel before laycan expired because that subject vessel is NOT lawfully ready in all respects without any restriction, and vessel is also rejected by Shipper and its insurer due to such event (Please find attached notice from Cargo insurer). Charterer hereby certainly confirm again that lawful delivery has NEVER been in place, and the notice to termination of the Charter Party on 8th Jan 2008 remains the same. Charterers reserve all rights to hold Owners responsible for all losses and damages to this failure of CP due to NON - performance of the Owners. 40 On 15 January 2009, the defendant issued a notice under cl 5 of the head charterparty between the owner and BMS, withdrawing the ship for the non-payment of hire. At the time of withdrawal, the ship had not been loaded with cargo and was in Chinese territorial waters. 41 On 16 January 2009, the defendant issued an invoice to BMS whereby it acknowledged redelivery of the bunkers and gave credit for the bunkers against the amount of the unpaid hire. 42 The defendant had entered, in the meanwhile, into another charterparty in respect of "Go Star" with a company, Medstar Lines Inc, for the carriage of a load of wheat from Albany in Western Australia to Yemen. 43 On 17 January 2009, the "Go Star" sailed from Fangcheng to Singapore, en route to Albany. 44 On 21 January 2009, the ship left Singapore bound for Albany, with an estimated date of arrival of 29 January 2009. 45 On 22 January 2009, Daebo sent an email to the defendant whereby Daebo demanded that the defendant deliver up the bunkers to it when the ship was in Albany. The email stated relevantly: We note that the master appears to be taking orders from the agents of a company named "Medstar Lines Inc", which is not a party to whom we have chartered the vessel. If the original charterparty chain (ie Evalend - BMS - Bluefield - Daebo) is still intact then the owners have no business taking orders from Medstar. We suspect, however, that the vessel has been withdrawn from BMS and is now chartered out by Evalend to Medstar. If that is the case, could Bluefield please inform us on what basis, if any, they are still involved in the chartering of the vessel? We look forward to prompt replies from relevant parties to clarify the situation. In the meantime, we reserve all our rights, including but not limited to the right to claim back overpaid hire and for bunkers ROB, which presumably are being burned up by the vessel in violation of our ownership rights. We would also point out that if our charterparty with Bluefield is still intact (a point on which we cannot express a view until we have received some answers from others) then the vessel is currently sailing to Albany without any orders to do so from us, and therefore disponent owners are in breach. If such a breach is persisted in it will amount to a repudiation of the charter, if there has not already been a repudiation. Awaiting owners' prompt response. 46 On 29 January 2009, Mr Kim of Daebo sent the following email to Evalend, marked for the attention of "Mr Nicolas": We refer to our message dated 22 January 2009. In that message we expressed our concern that the Go Star was sailing to Albany, Western Australia without any orders to do so from Daebo Shipping Co Ltd ("Daebo Shipping"). On board the vessel is 775 metric tonnes of fuel oil and 72 metric tonnes of diesel oil which is the property of Daebo Shipping. The fuel and diesel oil was supplied to the vessel in accordance with Daebo Shipping's obligations under its charterparty with Bluefield Shipping Co Ltd dated 27 July 2007. The quantities of fuel and diesel oil have been calculated by reference to the amount of fuel oil and diesel oil which was onboard the Go Star when it arrived at Fancheng on 8 January 2009. We demand that the above referred amounts of fuel oil and diesel oil are delivered to Daebo Shipping when the vessel is at Albany. Please confirm by return that Head Owners will do so. We calculate that the value of the fuel oil is USD407,650 and the value of the diesel oil is USD58,176. 47 At the time this demand was sent, the vessel was berthed at Albany. The bunkers were not delivered to Daebo, nor has the defendant paid Daebo for the bunkers. 48 I make findings of fact in the terms set out at [9] to [47] above. 49 First, Daebo claims damages in conversion and detinue in respect of the actions of the defendant in relation to the defendant's use of the bunkers and its failure to deliver the bunkers in Albany on demand. In respect of the use of the fuel oil, Daebo claimed in its statement of claim the sum of USD407,618.44, alternatively USD220,857.90. In respect of the use of the diesel oil, Daebo claimed USD41,482.72, alternatively USD25,670. 50 Secondly, Daebo claims damages against the defendant, on the basis that the defendant unlawfully interfered in the contractual relations between Daebo and Nanyuan by calling on Nanyuan not to perform the sub-charterparty with Nanyuan. It claims damages in respect of the loss of hire under the sub-charterparty and the loss of payment for the bunkers. WITNESSES 51 Daebo's witnesses were Mr Boomie Kim, Mr Yeonkyu Choi and Mr David Charles Kelly. A witness statement from each of Mr Kim and Mr Choi was admitted into evidence. Neither Mr Kim nor Mr Choi was cross-examined. 52 Mr Kelly is an experienced ship broker. He prepared an expert report on the question of whether there was a uniform and established practice in the shipping industry which treated the term "sub-freight" as including "sub-hire", and which treated the term "sub-freight" in clause 18 of the ASBATIME NYPE Time Charter form as including "sub-hire" so as to provide Owners with a lien over sub-hire. Mr Kelly was cross-examined. 53 The defendant's witnesses were Mr Nicholas Pantelias, Mr Castillo Edmund Rosme, Mr Simon David Moore Everton and Mr Chen Yusheng. A witness statement from Mr Rosme was admitted into evidence. He was not cross-examined. 54 Mr Chen Yusheng is a lawyer from the People's Republic of China. He is a partner in a law firm in that country which specialises in the practice of shipping and insurance law. Mr Yusheng prepared an expert report on Chinese law. He was not cross-examined. 55 Mr Everton has extensive experience in shipbroking and now works as a consultant in shipbroking. He prepared an expert report in relation to the same matters considered by Mr Kelly. Mr Everton gave his evidence by video-link and was cross-examined. 56 It has not been necessary to determine the issue in respect of which the expert evidence was directed, namely, whether the defendant had a lien under cl 18 of the ASBATIME NYPE charterparty which extended to sub-hire. However, had it been necessary to determine this issue, I would not have been assisted by the expert evidence given. In my view, the expert evidence did not establish any well-established and uniform practice within the shipbuilding industry to treat the word "sub-freights" in cl 18 of the ASBATIME NYPE form as including "sub-hire". This is particularly so, in light of the fact that the lien clause in the NYPE 93 time charter form was amended to refer specifically to the lien covering "sub-freights and/or sub-hires". 57 Mr Pantelias is the Operations Manager of Evalend Shipping. He gave evidence and was cross-examined by video-link. I have accepted Mr Pantelias' evidence in general. However, I have found below that Mr Pantelias' evidence in his written statement did not exhaustively describe his motives in seeking to ensure that the "Go Star" was not loaded in Fangcheng. DAEBO'S CLAIM IN DETINUE AND CONVERSION 58 I deal first with Daebo's claim in detinue and conversion. Daebo advanced its claim on the basis that Australian law was the appropriate law to apply to this claim. 59 Daebo claimed that, at all material times, after 3 January 2009, it was the owner of the bunkers, and the defendant had converted the bunkers, by withdrawing the ship under the head charterparty and then steaming from the People's Republic of China to Singapore and then to Albany. Daebo went on to contend that the defendant was liable in detinue because it had not complied with Daebo's demand that it deliver up the bunkers, or that the refusal by the owner to deliver the bunkers to Daebo was unreasonable. 60 Daebo contended that the property in the bunkers had vested in Daebo when the ship was redelivered on 3 January 2009 under the Daeyang sub-charter, and when Daeyang was credited with the value of the bunkers. 61 The defendant, however, contended that, even if Australian law was the appropriate law to apply in respect of these claims, Daebo's claims in conversion and detinue should be dismissed because Daebo had not demonstrated that it had property in the bunkers when the owner withdrew the ship on 15 January 2009. This is because, said the defendant, Daebo disposed of the property in the bunkers on 3 January 2009 when the ship was delivered to Nanyuan, pursuant to the Nanyuan sub-charterparty. Whether the property in the bunkers passed to Nanyuan on delivery of ship to it 62 Before proceeding to consider the contentions of each of the parties in respect of this issue, it is convenient to state that I find that the ship was re-delivered to Daebo under the Daeyang sub-charter on 3 January 2009, and that the ship was delivered by Daebo to Nanyuan under the Nanyuan sub-charterparty on 3 January 2009. I rely upon the terms of the delivery certificates referred to at [28] and [29] above in making that finding. 63 Daebo, however, contended that property in the bunkers did not pass to Nanyuan on the delivery of the ship under the Nanyuan sub-charterparty. Daebo went on to contend that, on its proper construction, the Nanyuan sub-charterparty provided that property in the bunkers would only pass to Nanyuan once Nanyuan had both taken over and paid for the bunkers. 64 As mentioned, the clean recap email dated 30 December 2008, from Nanyuan's shipping agent, Ara Shipping Co Limited, which contained the terms of the Nanyuan sub-charterparty, set out certain specific provisions and went on to provide that the terms were otherwise as between the Daebo "back-to-back charterparty". 65 The relevant provisions in the recap email are set out at [17] above. The relevant provisions of the charterparty between Bluefield and Daebo, being the "back-to-back charterparty" referred to in the clean recap email, provided that: 2 The Charterers, while the vessel is on-hire, shall provide and pay for all the fuel except as otherwise agreed… 31 Charterers to take over and pay together with first hire payment bunkers upon vessel's delivery. Reverting with quantities/prices. On redelivery bunkers same quantities and same price both end. 66 Daebo went on to contend that it was necessary for Nanyuan to engage in some specific conduct comprising or evidencing the "taking over" of the bunkers, and also for it to pay for the bunkers, before the property in bunkers passed from Daebo to Nanyuan. Neither of these events, said Daebo, had occurred, and it followed that property in the bunkers had not passed to Nanyuan on the delivery of the ship to Nanyuan. The putting of the ship at the disposal of Nanyuan, as occurred on delivery, said Daebo, was not sufficient to pass property in the bunkers. 67 Daebo contended that its construction of the bunkers clause in the Nanyuan sub-charterparty was consistent with the authorities. 68 I do not accept Daebo's contention. The words "charterers to take over and pay… bunkers upon vessel's delivery" in cl 31 of the back-to-back charterparty are the important words in the proper construction of the Nanyuan sub-charterparty. In my view, those words are to be construed as manifesting the parties' intention that on delivery of the ship, property in the bunkers passes to the charterer, with the charterer incurring an obligation to pay for the bunkers. In the context of this case, by reason of the express provisions in the recap email, the obligation to pay for the bunkers was to be performed within three banking days of delivery of the ship. 69 Nor, in my view, do the words of cl 31, or any other provision of the Nanyuan sub-charterparty, delay the passing of property in the bunkers to the charterer until the charterer pays for the bunkers. 70 I have come to that view for the following reasons. 71 First, as mentioned, on Daebo's argument, for property in the bunkers to pass, the charterer must first perform an act manifesting the taking over of the bunkers, rather than property passing at the time of, and as an incident of, the delivery of the ship. However, there is no temporal interval contemplated in cl 31 between the "taking over" of the bunkers and delivery of the ship; the words of cl 31 provide for the taking over of the bunkers "upon delivery". This militates in favour of the view that, by using the words "charterer to take over...the bunkers upon vessel's delivery" the parties intended, thereby, to agree that property in the bunkers was to pass to the charterer at the time of delivery of the ship, rather than at some other time, and consequent upon a specific act of "taking over" by the charterer. In other words, the agreement that the charterer is "to take over" the bunkers "upon delivery" is an agreement that, upon delivery of the ship, the charterer is to acquire the property in the bunkers. As Sheen J found, in The Saint Anna [1980] I Lloyd's Rep 180, in relation to a bunkers clause which provided that the charterer would "accept and pay for" all bunkers on delivery, in my view, the words "take over" in cl 31 have "proprietary connotations" which apply at the "moment of delivery". 72 Secondly, the charterparty which was considered by the Court of Appeal in The Span Terza (No 2) [1983] 1 WLR 632 was in New York Produce Exchange form. The bunkers clause in that case was in the terms similar to, but not precisely the same as, clause 31 of the Daebo sub-charterparty. That clause provided that "the charterers, at the port of delivery…shall take over and pay for" the bunkers. The Court of Appeal held that that clause was to be construed as providing that the charterers acquired property in the bunkers on the delivery of the ship. 73 At 636, Kerr LJ observed: As to the ownership of the bunkers up to the time when the charters were cancelled, it was common ground at the hearing below that the charterers (to put it collectively) became the owners of the bunkers on board when they took delivery of the vessel and that the sub-charterers were the owners of all the bunkers which were put on board thereafter. This was treated as common ground in the light of a decision of Sheen J himself in The Saint Anna [1980] 1 Lloyd's Rep 180. 74 Kerr LJ went on at 636, to reject a contention made by counsel representing the owner's interests, that the bunkers clause was not to be given the construction which was common ground in the hearing below, because the decision in The Saint Anna was wrong. Kerr LJ observed that in his view the decision in The Saint Anna was correct. 75 The Court of Appeal decision in The Span Terza (No 2) was overturned by the House of Lords in The Span Terza (No 2) [1984] 1 WLR 27, but not on this point. In fact, at 31-32, the House of Lords (per Lord Diplock) agreed with the Court of Appeal's view. Lord Diplock observed: My Lords, these clauses although not identical with, are very similar to the corresponding clauses in the Shelltime 3 time charter that were analysed by Sheen J in The Saint Anna [1980] 1 Lloyd's Rep. 180, when he rejected a submission that bunkers become the property of the shipowners as soon as they are placed on board the time chartered vessel. In condition 2 the words: "provide … and pay for"; in condition 3 the words: "take over and pay for" and the references to "price", seem to me to be wholly inconsistent with the property in the bunkers being vested in anyone other than the charterers. The words I have italicised would otherwise be meaningless. Possession of all bunkers once they are on board the vessel is no doubt vested in the shipowners as bailees who are under a duty to procure that they are used by the master in carrying out the orders which the charterers are authorised by the charterparty to give him as to the employment of the vessel. The Saint Anna was, in my opinion, rightly decided. Its reasoning is equally applicable to a time charter in the N.Y.P.E. form and the Court of Appeal were right to reject proposition (1) in the instant case. 76 I observe that the bunkers clause under consideration in The Span Terza (No 2) was more amenable, than the clause in this case, to the construction advanced by Daebo because it provided for the charterers to take over and pay for the bunkers "at the port of delivery" rather than, as in this case, "upon delivery". This did not, however, preclude the Court of Appeal and the House of Lords from concluding that property in the bunkers passed to the charterers on delivery of the ship. 77 Accordingly, in my view, and contrary to Daebo's submission, the decisions of The Saint Anna and The Span Terza (No 2) are inconsistent with the construction advanced by Daebo. 78 Thirdly, if, as Daebo contended, the Nanyuan sub-charterparty was to be construed as containing a retention of title clause, pursuant to which property in the bunkers was to remain with the disponent owner until payment was made, one would have expected to have seen a provision to that effect expressed in much clearer language. 79 In my view, the fact that the parties chose not to state expressly that the owner would retain property in the bunkers until payment had been made for the bunkers, militates strongly against the contention advanced by Daebo. In neither The Saint Anna nor The Span Terza (No 2) was it suggested that the words "and pay for" comprised a retention of title clause conditioning the passing of property upon the payment for the bunkers. 80 It follows that Daebo has failed to establish an essential element of its pleaded claim for damages in respect of conversion and detinue; namely, that it was the owner of the bunkers until 15 January 2009, when the ship was withdrawn by the defendant under the head charterparty. 81 Accordingly, I dismiss Daebo's claim in detinue and conversion. Other defences raised 82 For the sake of completeness, I record that the defendant relied on two other contentions in defence to Daebo's claim. 83 First, the defendant contended that on 15 January 2009, pursuant to the terms of the head charterparty, the defendant became the owner of the bunkers. This was because, said the defendant, the withdrawal of the ship for the non payment of hire effected a redelivery of the ship and the bunkers. The defendant contended that it paid BMS for the bunkers by crediting it for the bunkers and setting off that amount against unpaid hire. The defendant also contended that by virtue of the withdrawal of the ship pursuant to the terms of the head charterparty, the charterers under each of the sub-charter parties in the chain would be taken to have redelivered the ship to the disponent owners under each instrument, until there was a redelivery of the ship to the owners exercising a right of withdrawal. 84 Secondly, the defendant contended that, in any event, at the time of the withdrawal of the ship by the owner, the ship was in the Chinese territorial waters, and under the law of the People's Republic of China, title to the bunkers passed from the plaintiff to the defendant upon the withdrawal of the ship. The defendant contended, therefore, that Daebo's claim was not actionable applying the law of the People's Republic of China. 85 In light of my conclusion at [80] above, it is unnecessary to consider these contentions. UNLAWFUL INTERFERENCE IN CONTRACTUAL RELATIONS 86 Daebo also claimed damages from the defendant for the loss of hire and payment of the bunkers under the Nanyuan sub-charterparty on the basis that the defendant had unlawfully interfered in the contractual relations between Daebo and Nanyuan by persuading Nanyuan to breach its obligations under the Nanyuan sub-charterparty. It was contended that the defendant was aware of the terms of the Nanyuan sub-charterparty and, in that knowledge, persuaded Nanyuan not to pay the monies due under that charterparty and to repudiate its obligations under the Nanyuan sub-charterparty. 87 Daebo identified the communications between Mr Pantelias and each of Ms Chen and Captain Hu that took place in early January 2009 as constituting the conduct by which the defendant persuaded and procured Nanyuan to breach its obligations under the Nanyuan sub-charterparty. Daebo also contended that it was this conduct which caused Nanyuan not to pay the monies due under the invoice of 4 January 2009, and which caused Nanyuan to engage a different ship to transport the cargo to Angola, and to renounce the Nanyuan sub-charterparty. 88 Daebo advanced its claim on the premise that Australian law applied in relation to this cause of action. 89 However, the defendant contended that the defendant's conduct, said to comprise the tort alleged, occurred, in substance, in the People's Republic of China. The defendant, relying upon the expert evidence of Mr Chen Yusheng, contended that the law of the People's Republic of China did not recognise the tort of unlawful interference in contractual relations. It followed, contended the defendant, that the impugned conduct was not actionable in Australia, because, applying the double actionability rule (Breavington v Godleman (1988) 169 CLR 41, at 110-111), the impugned conduct was not actionable under the law of the place of the tort. 90 In addition to the findings of fact made above in relation to the communications between Mr Pantelias and each of Ms Chen and Captain Hu, I make the following findings of fact. 91 First, the defendant was, through Mr Pantelias, at all material times, aware of the existence and terms of the Nanyuan sub-charterparty. This is to be inferred from the fact that the Master of the ship advised Mr Pantelias to that effect and from the terms of the emails which Mr Pantelias sent to Ms Chen and Captain Hu. Also Mr Pantelias admitted this in cross-examination. 92 Secondly, in communicating with Ms Chen and Captain Hu, it was Mr Pantelias' intention at all material times, to prevent Nanyuan from loading the cargo in Fangcheng. Mr Pantelias said this at [60] of his witness statement. Although Mr Pantelias says that he was concerned that innocent third parties might become involved in a dispute that was not of their making, I find that this was not Mr Pantelias' only motive. I find that a more significant motive was that it would be to the defendant's commercial advantage to withdraw the vessel under the head charterparty whilst it was in port and unloaded, so that it could immediately be chartered under a new charterparty to a third person.

Daebo Shipping Co Ltd v The Ship Go Star

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Before

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Judgment (3 paragraphs)

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Cases Cited (2)

Cited By (2)