Newcastle Port Corporation trading as Port Authority of New South Wales v Svitzer Australia Pty Ltd

District Court of NSW|2022-05-20

Introduction

On 15 October 2019, the defendant's tug Svitzer Marloo collided with the plaintiff's survey vessel, the Port Explorer. After carrying out its own investigation, the defendant accepted liability for the collision in December 2019.
Over the following two years, the parties exchanged correspondence concerning the quantum of the plaintiff's claim. This correspondence ceased when, on 14 January 2022, the defendant asserted that the plaintiff's claim was time barred. The proceedings were commenced on 22 February 2022, just over 4 months after the expiry of the 2-year limitation period and approximately one month after the plaintiff became aware of the limitation period.
By notice of motion dated 23 February 2022 the plaintiff seeks an extension of time within which to file its statement of claim. It does so pursuant to s 22(4) of the Limitation Act 1969.
Section 22 is in the following terms: 22 Shipping (1) Paragraph (a) of subsection (1) of section 14 applies to a cause of action to recover a seaman's wages, but otherwise sections 14 to 21 inclusive do not apply to a cause of action in rem in Admiralty. (2) An action on a cause of action to enforce a claim or lien against a vessel or her owners in respect of any damage or loss to another vessel, her cargo or freight, or any property on board her, or damage for loss of life or personal injuries suffered by any person on board her, caused by the fault of the former vessel, whether such vessel be wholly or partly in fault, is not maintainable if brought after the expiration of a limitation period of two years running from the date when the damage loss or injury is caused. (3) An action on a cause of action to enforce a claim or lien in respect of any salvage services is not maintainable if brought after the expiration of a limitation period of two years running from the date when the salvage services are rendered. (4) For the purposes of an action in a court, the court - (a) may extend the limitation period mentioned in subsection (2) or subsection (3) to such an extent and on such terms as it thinks fit, and (b) shall, if satisfied that there has not during the limitation period been a reasonable opportunity of arresting the defendant vessel within the jurisdiction of the court, or within the territorial waters of the country to which the plaintiff's vessel belongs or in which the plaintiff resides or has his or her principal place of business, extend the limitation period to an extent sufficient to give a reasonable opportunity of so arresting the defendant vessel. (5) For the purposes of this section - (a) freight includes passage money and hire, (b) vessel means a vessel used in navigation, other than air navigation, and includes a barge lighter or like vessel, and (c) reference to damage or loss caused by the fault of a vessel extends to any salvage or other expenses, consequent upon that fault, recoverable at law by way of damages. (6) Part 3 does not apply to a cause of action to which subsection (2) or subsection (3) applies.

Factual background

At the time of the collision on 15 October 2019, the Port Explorer was moored at Port Kembla. At about 7:43pm, as the Svitzer Marloo was leaving its berth, an alarm sounded on board. The collision is conveniently described in the defendant's incident report which records that after hearing the alarm: The Master was concerned that the tug was not responding as expected, and applied additional thrust as he was in a tight area and running out of room. By this stage the engineer had realised the alarm related to a steering failure on the port pod and had gone to the wheelhouse to alert the master. Once the Master realised the alarm was a steering issue, he rest the steering controls following the procedure and steering control was regained. Unfortunately, the tug had spun around too far and made contact with a moored Port Authority survey vessel that was on the service pontoon. This contact pushed the survey vessel onto the pontoon, smashing a window on the stbd side and creasing the sponson on the port side.
In the days after the incident, the defendant carried out an internal investigation, and obtained witness statements from those present. It was informed by the plaintiff on 16 October 2019 that the collision placed the Port Explorer out of service, and that the plaintiff expected that it would be necessary to undertake temporary repairs. The plaintiff further advised that the defendant may wish to instruct an insurance inspector to assess the damage.
At some time between that date and 23 October 2019, the defendant's assessors did inspect the damage to the Port Explorer.
On 3 December 2019, the plaintiff's solicitor issued a demand to the defendant to admit liability for the collision. Two weeks later, the defendant's general counsel confirmed that 'Svitzer admits liability for the collision'. The defendant reserved its rights in relation to quantum.
The plaintiff subsequently carried out repairs to the Port Explorer, during which time another vessel, the Brian Cessil, was retrofitted to act as a temporary replacement for the Port Explorer. The invoice for the last of the repair works on the Port Explorer was issued on 17 December 2020. The next day, the plaintiff demanded payment of the repair costs and other consequential losses. That demand attached a schedule which provided a breakdown of repair costs to both the vessel and its hydrographic equipment. It also itemised the cost of its works to retrofit the Brian Cessil.
One month later, on 18 January 2021, the defendant's solicitors made a detailed request for further particulars and documents.
Around that time, there were staff changes in the office of the plaintiff's solicitors which, to some extent, negatively impacted the response to this letter. The first response to the defendant's particulars letter was not sent until 15 March 2021. Over the following months, the plaintiff took the following steps to respond to the request for particulars and documents: 1. in May 2021, an expert was instructed to re-open his file to provide further information; 2. between that time and November 2021, the plaintiff's solicitors engaged with the plaintiff's officers to respond to the defendant's request for particulars. This process ultimately reduced the quantum claimed; 3. information was sought from other teams within the plaintiff; 4. on 3 November 2021, the plaintiff's solicitors wrote to the defendant's solicitors to provide an update, and to respond substantively to part of the January letter; and 5. on 23 December 2021, the plaintiff's solicitors provided a response to the requested particulars. In so doing, the plaintiff reduced its claim by $71,925.

Mistake as to Applicable Time Limit

Throughout this time, the solicitor with carriage of the matter for the plaintiff was under the misapprehension that the claim was subject to the general 6-year limitation period provided for in s 14 of the Limitation Act 1969. He was not aware of the 2-year limitation period applicable to maritime claims. His evidence is that had he been aware, he would have sought instructions to commence proceedings before the expiry of the 2-year limit, that is to say before 15 October 2021.
On 14 January 2022, the defendant's solicitors asserted that the claim was time barred, and that the defendant now rejected the plaintiff's claim. The plaintiff sought further advice and commenced these proceedings on 28 February 2022.

Extension of Time

I did not understand the parties to be in dispute concerning the principles which govern the exercise of the discretion to extend time in the circumstances other than to the extent to which the defendant contended that s 22(4) involved a two-stage process, a topic to which I shall return.
I believe the principles about which there was agreement can be summarised as follows:
The discretion provided by s 22(4)(a) to extend the limitation period for shipping claims is wide and unfettered: Engert v Sydney Ferries Corp [2009] NSWSC 1400, [15]; McKinnon v Huxley and Anor [2003] NSWSC 1221, [14]. The ultimate question is whether the justice of the case requires that the limitation period be extended: Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541, 554; Engert, [30].
While the discretion conferred is wide, it must be exercised judicially, and in a principled way, and consistently with the policy considerations underlying s 22(2) of the Act (McKinnon at [14]).
As I have indicated, the defendant, reliant on English authority, asserted that in considering an application such as the present, the Court was confronted with a two-stage enquiry. This two staged process, it was submitted, involved first ascertaining whether the applicant had established "good reason" for an extension of time, and then a second stage involving determining whether to exercise the discretion so enlivened. I do not see any justification for approaching s22(4)(a) as involving a two-stage process, and indeed consider that Engert and McKinnon provide no support for such an approach. Rather, I see these authorities as suggesting a one step approach, as contended for by the plaintiff. (See McKinnon at [16], Engert at [15], [23]-[26] and [30]).
Consideration of what the justice of the case involves requires consideration of issues such as: 1. the strength of the plaintiff's claim: Commonwealth of Australia v Shaw [2006] NSWCA 209, [40]; Engert, [34]; 2. any prejudice associated with the delay: Brisbane South at p 555; Engert, [34]. 3. the length of the delay: McKinnon, [16]; 4. whether the plaintiff is itself responsible for the delay: Ling v The Owners of the Ship 'Longevity' [1995] FCA 1564, [14], Engert, [36]; and 5. whether the plaintiff acted promptly in filing the application after the limitation period was raised, Engert [34].

Strength of the plaintiff's claim

To my mind a very important consideration in relation to an assessment of the strength of the plaintiff's case, is the fact that the defendant has admitted liability for the collision. In my view, this is a factor which is entitled to substantial weight: Cottle v Smith (2008) 50 MVR 527, [2008] QCA 244, [20]. The plaintiff submitted that absent some significant prejudice likely to be suffered by the defendant, it would not be just and reasonable to shut the plaintiff out from pursuing such a claim. I agree with this submission.

Prejudice

Prejudice in the context of an application of this type is generally focussed on whether the delay makes the chance of a fair trial unlikely: Commonwealth of Australia v Smith [2005] NSWCA 478, [128]-[129]. In considering this issue I believe that it is well to recall that the defendant took witness statements in the days after the collision. It carried out its own investigation. As such I would expect that contemporaneous evidence exists for it to defend the claim. It has moreover admitted liability.
In its final oral submissions, the defendant made clear that it did not assert prejudice with respect to liability. Rather the defendant argued that it was in respect of quantum that its contention as to prejudice was directed.
In respect of damages, it is important to consider the question of prejudice against the factual background. The defendant was offered the opportunity to inspect the vessel in October 2019. At the time, the damaged hydrographic equipment was still on board. The defendant's assessors inspected the Port Explorer in October 2019. Its surveyor estimated the damage caused at $80,000. It would seem therefore that the defendant has at least one expert opinion, formed proximate to the time of the collision, of the damage caused to the vessel.
In addition, the evidence discloses that the defendant has been provided with: 1. photographs of the damage taken between 17 and 23 October 2019; 2. a direction notice issued by the Australian Maritime Safety Authority limiting the operation of the Port Explorer; 3. a report on the damage to the hydrographic equipment on board; 4. an expert report from Marine Survey Australia as to the damage caused to the vessel and works required to restore the structural integrity of, and meet docking requirements for, the vessel; 5. invoices and quotes for the works; 6. the original specifications of the vessel that was required to be upgraded to replace the Port Explorer during repairs (and detail of the history of that vessel).
The plaintiff submits that the defendant's experts can also inspect the modifications that were made to the temporary replacement vessel, the Brian Cessel. To the extent that equipment was later removed from the Brian Cessel back to the Port Explorer, the plaintiff says that the defendant can inspect that equipment. The plaintiff contended further that the defendant has the original specifications for the vessel and detail of the works undertaken. The plaintiff asserted that in these circumstances, the defendant is not prejudiced in its ability to test this part of the plaintiff's claim.
The plaintiff further submits that this is not a case where evidence has disappeared, or what otherwise would have been reliable evidence has weakened with the effluxion of time. On the contrary, it submits that the defendant took steps at an early stage to investigate the claim including the damage caused. The plaintiff submits that the defendant has the results of those investigations, contemporaneous witness statements, and the evidence of damage provided by the plaintiff. As such the plaintiff contends that the defendant is not prejudiced in its defence.
The defendant led no evidence of prejudice, but points out that the onus of proving lack of prejudice falls on the plaintiff (Visscher v BHP Petroleum Pty Limited [2002] NSWSC 65 at [28] and [30]). It also drew my attention to the possibility of "prescriptive prejudice" of the type described by McHugh J in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at p551.
I accept both propositions but consider that in the circumstances, the plaintiff has established that the risk of prejudice to the defendant by an extension of time is not great, and that any risk would be most unlikely to imperil a fair trial.
Further in my view, in the circumstances where the plaintiff has led evidence as to the unlikelihood of the defendant suffering relevant prejudice, the evidentiary onus on the issue has passed to the defendant. The defendant, however, has declined to put on evidence of prejudice. This, of course, is a legitimate forensic stance to adopt, but it can come with consequences.
As early as 1774, Lord Mansfield stated: It is certainly a maxim that all evidence is to be weighed according to the proof to which it was in the power of one side to have produced, and in the power of the other to have contradicted. (Blatch v Archer (1774) 1 Cowp 63 at 65)
There have been many other statements as to the appropriate approach to judicial decision making where a party declines to adduce evidence within its power to adduce, which have been made over time. For example, Lord Diplock in British Railways Board v Herrington [1972] AC 877 at 930 said: This is a legitimate tactical move under our adversarial system of litigation. But a defendant who adopts it cannot complain if a court draws from the facts which have been disclosed all reasonable inferences as to what are the facts which the defendant has chosen to withhold.
To similar effect, in Insurance Commissioner v Joyce (1948) 77 CLR 39 at 49, Rich J stated that: [W]hen circumstances are proved indicating a conclusion and the only party who can give direct evidence of the matter prefers the well of the court to the witness box a court is entitled to be bold.
The defendant asserted by way of oral submission that the prejudice which it suffered arose from its inability to inspect the hydrographic equipment which has been replaced. It says that it is unable to determine whether there was in fact a need to replace the equipment, and if so the extent of damage.
The defendant however led no evidence in relation to this asserted privilege. Rather, it merely made the assertion of prejudice from the Bar Table.
In the circumstances, in the absence of evidence of prejudice adduced by the defendant, I draw the inference that no material prejudice has been suffered by the defendant. I should add however that even absent that inference I would have still found that the plaintiff has established that the defendant has suffered no relevant prejudice (see [29] herein).
I should also add that at trial, if there is in fact some prejudice to the defendant of the type which the defendant now asserts, leading to its expert saying that he or she is unable to express a view upon a question because of the way in which the plaintiff has handled repairs to the hydrographic equipment, then this could be the subject of an application to exclude the prejudicial parts of the plaintiff's evidence under section 135 of the Evidence Act 1995.
In response to this approach, which I raised with counsel, Mr Nell SC said that his client could not be sure that an order would be made excluding prejudicial evidence under section 135. I do not think that this is an appropriate way to approach the subject of the possible application of section 135 to asserted prejudice by the defendant. To my mind the Court should proceed on the basis that any evidentiary application under section 135 made in respect of asserted prejudice would result in an outcome which the interests of justice requires.
In conclusion, I am of the view that the plaintiff has established that no relevant prejudice would be occasioned to the defendant by the extension of time sought.

Length and explanation for the delay

The plaintiff argued that the delay was relatively short, being just over 4 months after the expiry of the limitation period. This delay, it was contended, occurred largely because the plaintiff's solicitor was not aware of the 2-year limitation period. It drew my attention to Ling v The Owners of the Ship 'Longevity' [1995] FCA 1564, where Sheppard J stated at [14]: Of course, the plaintiff is in law fixed with responsibility for his solicitors' acts and defaults but where it comes to the exercise of a discretion such as that here to be exercised, I think it proper to draw a distinction between dilatoriness by a party and dilatoriness by his solicitor. I conclude therefore that no blame attaches to the plaintiff for the delay in question.
The plaintiff submitted that it did not sit on its hands and watch the limitation period expire. It notified the defendant of its claim in December 2019. It submits that it provided a detailed schedule setting out the costs of repairs the day after it received the final invoice for the repairs. After this time, the plaintiff was compiling material to respond to the request for particulars and documents made by the defendant. Whilst the response took an extended period of time, the response was formulated against the background of the mistaken belief that the plaintiff had over 4 more years to commence proceedings (See affidavit of Joshua Faddy of 28 February 2022 at [23]). The plaintiff contended that it was not responsible for that error, and should not be deprived of advancing an admitted claim because of it.
The defendant contended that a mistake by the solicitor as to the applicable limitation period is not in and of itself a sufficient reason to grant the relief sought. I accept this proposition, but as I have indicated the plaintiff does not rely on that fact alone.
The defendant initially submitted that while there was evidence of the solicitor's error, there was no evidence of the fact that the plaintiff itself, by its officers, was also unaware of the applicable limitation period. In this regard it was put that, unlike the plaintiffs in Engart and McKinnon, the plaintiff in these proceedings was a sophisticated commercial shipowner.
This argument was ultimately not pressed as the plaintiff adduced evidence of the relevant officers that they also were unaware of the 2-year limitation period.
Further, the defendant contended that the delay requiring consideration was not simply the delay between the expiry of the limitation period and the commencement of proceedings. It was submitted that what was relevant was the delay in the conduct in the proceedings generally. I accept this submission.
The defendant made detailed submissions outlining what it contended were the unacceptable delays in answering the defendants' request for further and better particulars. It is no doubt true that the plaintiff's response to the request letter could have been more prompt. That said, as I have earlier indicated, the reason for the delay in response was largely attributable to the fact that the plaintiff and its solicitors did not understand that there was more urgency attaching to the response, due to the fact that unbeknownst to them the limitation period was 2 years, and not 6 years.
I should also add that in fact it was not necessary for the plaintiff to have answered the particular request before commencing the proceedings. As such it seems to me that the weight to be attributed to the delayed response is not as great as that contended for by the defendant.
In summary, I do not accept that such delays as may exist in the conduct of the proceedings by the plaintiff should disentitle the plaintiff to the relief which it seeks.

Commencement of proceedings

As I have earlier indicated, on being made aware of its error concerning the limitation period in January 2022, the plaintiff took prompt action to avoid any further delay and commence proceedings. It sought advice and commenced proceedings on 28 February 2022.

Conclusion

In the circumstances, for the reasons which I have endeavoured to articulate, I consider that the plaintiff should be granted the principal relief sought in its motion, that is to say, extending the time for commencement of the proceedings.

Costs

As to costs, the usual rule was set out by Sheller JA in Holt v Wynter [2000] NSWCA 143, at [121]: In relation to costs ordinarily a successful applicant, who has allowed him or herself to get out of time, should pay the costs of the application unless the respondent's opposition was wholly unreasonable.
I see no reason to depart from this rule.

orders

The Court makes the following orders 1. That leave be granted to the plaintiff to commence these proceedings, such leave to have effect nunc pro tunc as at the date of filing the statement of claim. 2. That the plaintiff pay the defendant's costs of the motion.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 20 June 2022

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Judgment (12 paragraphs)

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Cases Cited (12)