Article 13 (1)(c): Measure of success obtained by the salvor
82 Article 13 (1)(c) requires that the reward is fixed taking into account the "measure of success obtained by the salvor." In this phrase, the term "success" refers to the salving of the property and ship in danger. The expression "success obtained by the salvor" should not be construed to mean success in avoiding the danger of the vessel or its owners or crew being sued for economic loss by third parties. The salvage operation, as Article 1 indicates, is the operation of salving "a vessel or property" in danger. It is directed to physical loss or damage. It is not directed to protecting the vessel from potential third party litigation claims for loss suffered by third parties by way of damage or economic loss or the expense and expenditure of time in defending any proceeding.
83 In the present case, the salvage operation was a one hundred percent success and I have given significant weight to this factor accordingly.
ARTICLE 13.1(d) - NATURE AND DEGREE OF THE DANGER
84 This paragraph requires that the salvage reward be fixed considering the "nature and degree of the danger." In considering this criterion, it is necessary to identify the "danger" referred to. Some guidance can be found by examining other Articles in the 1989 Convention. For instance, and as previously noted, Article 1 defines "salvage operations" as activities undertaken to assist a vessel or property in danger.
85 In my view, this paragraph does not contemplate danger to the environment but rather the focus is on the degree of danger to the salved vessel itself and the persons and property in it. This factor is directed to assessing the danger to human life and the risk of loss, injury or damage in relation to the salved property.
86 When considering Article 13.1(d), it is useful to note that paragraphs (a) and (e) support the conclusion that the subject of the salvage operation is the "vessel and other property" salved. The 1989 Convention refers expressly to "the environment" in several other provisions, but does not do so in paragraph (d): see, for example, Articles 1, 6, 8, 11, 13(b) and 14. It is also notable that the 1989 Convention uses the expression "danger" in relation to the "vessel and other property and life" as opposed to the expression "damage", which is used in relation to adverse effects on the environment: see, for example, the Preamble and Articles 1, 8, 10, 11, 13, 14 and 16.
87 In this case, the evidence does not indicate that the events of 27 March 2006 presented any significant danger to life or person. Nevertheless, the vessel itself became vulnerable to danger when the steering gear failed. This led to the grounding of the vessel and rendered it unable to manoeuvre safely. Using considerable skill and effort, the tugs were able to control and manoeuvre the vessel. At times the operation presented great difficulties to the salvors arising from a number of complex interacting factors including the constant yawing and veering of the vessel, the tidal currents, the narrowness of the channel, the weather conditions, the jamming of the rudder to port, the breaking of the tow lines, the limited tolerance for keel clearance and certain time constraints.
88 Having regard to these factors, it is clear that any danger to the vessel and property would have been significantly greater had the tugs had not come to the vessel's assistance. Once the tugs arrived, their efforts in combination with the directions of the Pilot, the co-operation of the Master and the input of the harbour authority enabled the potential risk-generating factors to be contained and danger avoided. Although Article 13.1(d) is limited to a consideration of the actual danger that the vessel experienced during the operation, regard should still be paid to the potential danger the vessel may have faced if tug assistance had not been available.
89 The plaintiffs submit that if tug assistance had not been available, there was a continuing danger of global or local failure to the salved property until the vessel was safely moved from the point of grounding out of the port. It was claimed that the danger of damage to the vessel in the Auckland Channel was of a high degree, and that this danger was present and continuous until the vessel anchored at the deep sea anchorage near the Fairway Buoy.
90 The scenario advanced by the plaintiffs is that with the vessel aground and the bow pinned on the northern side of the Auckland Channel, there was a significant risk of further damage to the vessel in the absence of tug assistance. The plaintiffs maintain this danger would have arisen whether the "La Pampa" remained on the northern bank with the change of tide, or whether she refloated without the use of her rudder and was therefore unable to maintain her position in the channel without further grounding. One risk was said to be that the stern could collide with the northern bank in the Auckland Channel as a consequence of the tide. This could have led to rudder, propeller and local hull failure near the stern, depending on the rate of swing with the remaining tide.
91 The plaintiffs refer to evidence presented by Mr Squire, Captain Hancox, Captain Wilson, Captain Noble, Captain Fraser and Dr Binks, which they say establishes that due to the heavy grounding of the "La Pampa", on the balance of probabilities she was likely to remain aground at high tide if there was no assistance. They contended that the witnesses agreed that the vessel was most likely to swing across the channel, remaining pinned to the bow and hitting the south bank with her stern. It was argued that if the "La Pampa," when swinging on the ebb tide and making contact with the southern bank, remained aground by her stern and bow, she would be subject to bending forces as she was held up on the banks with the falling tide due to a loss of buoyancy. Although there is considerable speculation as to the likelihood of that bending moment and its probable extent, as well as similar conjecture in relation to the resulting shear forces, the plaintiffs submit that the evidence indicates a real and imminent prospect that the vessel could have been exposed to global failure with the consequent escape of oil and blockage to the channel. Reliance was placed on the evidence of Dr Phipps, a geologist, who gave very limited evidence that the southern side of the bank contained hard matter identified by core sampling as very stiff.
92 The plaintiffs' case as to global failure largely depends on evidence given by Mr Squire, a naval architect, to the effect that on one possible scenario, the bending moment and shear forces could exceed the vessel's likely capacity to withstand those forces and this would result in global structural failure. It was also submitted that, given the influence of tides and swell in the channels, there was a risk of global failure if the vessel had re-grounded.
93 It is further contended that if the vessel had struck the south bank and had not been held up, she would have slipped down the bank to the channel bottom or sunk into soft sand or mud with the tide. This would have caused substantial damage to the vessel's stern gear, propeller and rudder, and risked her hull being further penetrated at the stern adjacent to the engine room.
94 Another danger posed by the plaintiffs is that if the vessel had refloated without tug assistance, she would have been unable to manoeuvre down the channel without her rudder, which was either locked to port or moving freely as the vessel's propeller turned. It is submitted that in those circumstances, the vessel was likely to re-ground as she attempted to manoeuvre with her engine alone or as the tide changed. This could have led to further risk of hull damage to different parts of the vessel, potentially resulting in water ingress which would make the vessel unstable and the pumps incapable of preventing or minimising flooding in various parts of the ship.
95 In response, the defendants submit that the "La Pampa" was never in great danger after the tugs came to her assistance. They note that the Pilots were able to safely manage and manoeuvre the vessel with the assistance of the tugs. This is despite the problems referred to by the plaintiffs including the narrowness of the channel, the tidal currents and the yawing. The defendants say the actual risk of danger after the tugs came to the assistance of the vessel was remote. Even when the tow lines had broken, appropriate steps were taken to reconnect the lines and the operation continued. In the defendants' submission, there is no evidence that the vessel came close to contacting the sides or the bottom of the channel.
96 For the plaintiffs, it was argued that the Court should draw adverse inferences based on the defendants' failure to call evidence from the Master or the Engineer of the "La Pampa", and also the fact that no course recorder and depth sounder records from the vessel were produced. It was contended by the plaintiffs that these records would provide information in relation to the depth and the extent of veering and yawing, and thus were relevant to the question of danger. I have taken these matters into account, but I do not consider they carry much weight. The defendants submit that it was not necessary for them to call the Master or the Engineer in the light of the fact that other witnesses on the bridge gave evidence. Moreover, the defendants have acknowledged that there was substantial yawing and veering of the vessel, and agree that the water was shallow under the keel. Having regard to these concessions, they submit that no adverse inference could be brought or strengthened as a consequence of a failure to call evidence from the crew of the vessel or produce the relevant records.
97 In relation to the plaintiff's submission that there was a danger of global failure caused by buckling of the deck and the breaking of the two bottom skins near the middle of the ship, the defendants say that although this was a possible outcome, it was so remote that this fact should not carry any significant weight. The defendants argue the qualified experts were in consensus that the risk of the vessel breaking her back was very low. They note that Mr Squire for the plaintiffs concludes in his first report that the hull was not likely to fail due to sagging, and that although a risk of global failure did exist, it was a small one.
98 The defendants also highlight that of the three potential scenarios described by Mr Squire in his report, the worst-case scenario - where the hull would be at high risk of failure (Case 2) - is deemed by Mr Squire to be less likely that the other two. In relation to the other two possible scenarios, Mr Squire states that in Case 1 there is no realistic prospect of the collapse of the hull as a whole and in Case 3 the probability of hull failure is very low.
99 Moreover, the worst-case scenario presented by Mr Squire (Case 2) made the unsubstantiated assumption that the vessel grounds fore and aft at the very top of the tide. As pointed out by Dr Binks, a naval architect called for the defendants, Case 2 is based on several problematic assumptions. Firstly, this scenario assumes that there is no sinkage or slippage of the ship's bow on the north bank or of the ship's stern when grounded on the south bank. Secondly, it is assumed that that the ship's stern swings to such an extent that a length of over 40 metres (measured from the aft perpendicular) makes contact with the south bank of the channel. He does not accept these assumptions, and considers that they are speculative. In addition, Mr Squire points out the difference between Case 2 (high probability of failure) and Case 3 (a very low probability of hull failure) is that in Case 3, instead of the vessel going aground fore and aft at the very top of the tide, she grounds at a lower point or sinks into the sea-bed by a distance of 0.68 metres. This is a relatively small difference. If the distance is less than that, the degree of risk falls between Case 2 and Case 3. Mr Squire accepted that the vessel must ground part of the way up the sides of the channel, and that whether she would drop with the tide would depend on the material and the steepness at the point of contact. The defendants note that there is no definitive evidence as to the shape of the south bank and that the evidence concerning the material of the south bank is limited. It was also stressed that Mr Squire acknowledged considerable uncertainty about his prediction in relation to global failure.
100 On the expert evidence, I am not satisfied that in the present case there was any real probability of global failure, or indeed any danger of global failure. Dr Binks says, and I accept, that it is unlikely that the vessel would have become grounded with her bow on the north bank and her stern on the south bank because one would expect this scenario to have been prevented by the actions of the crew. He also considered that the general blockage scenario as presented in Case 2 could arise in the event that no action was taken by the crew, but he disagreed with the assumptions made by Mr Squire to justify the view that there was a significant prospect of global failure. There was simply not enough material to warrant the adoption of this conclusion based on these assumptions.
101 The plaintiffs also claim that in addition to the danger of global failure, there was a significant chance that the grounding of the vessel could cause "local damage" to the stern plates, the propeller and/or the rudder. The defendants respond that that the evidence as to the potential damage to the rudder, the propeller and the stern plates has not been given by reference to any detailed calculations regarding the likely effect of the impact and extent of the damage. Therefore, they say, the evidence as to the nature and extent of possible local damage is merely speculative.
102 It is acknowledged that the prospective damage, to a large extent, depends on the hardness of the material that could be struck by the rear of the vessel at any particular point. This point was addressed by Dr Phipps, who gave geotechnical evidence based on core data from a number of boreholes referred to in drill logs made in respect of samples taken in 1981. The boreholes drilled were 250 millimetres in diameter. The data obtained did not indicate a uniform pattern in the consistency of the material.
103 In the view of Dr Phipps, the closest bore sample to the position of grounding is borehole number 81/39 on the northern side of the Auckland Channel. The log of that borehole refers to clayey, sandy gravel over fine to coarse sand and containing some pebbles. The depth of this borehole was 4.75 metres. Dr Phipps describes the sediment on the north side as unconsolidated but relatively compact. He considered that this sample showed that the material became more compact with depth. He conceded that no bedrock was shown in any of the samples.
104 On the south side of the Auckland Channel, the most relevant sample is borehole 81/40. The log describes the material here as sandy clay with high plasticity and also notes a penetrometer reading greater than 500 kPa in the additional comments column. At various depths, the recordings of the penetrometer are also shown to be 200 and 400 kPa. The log refers to samples below 1.8 metres in this borehole as being "very slurried" with the bore-hole collapsing. However, I note that in the case of borehole 81/48, which was taken on the south side of the Channel further to the west, there is a description of sandy, silty clay of low plasticity characterised as being very stiff with penetrometer readings of 300 kPa and 200 kPA.
105 In my view, this evidence, which dates back to 1981, is of limited assistance given the considerable variations between the samples and the approximation of the location in relation to the grounding. Because there is considerable doubt as to the precise location where the grounding occurred and where any potential impact with the bottom or the sides of the channel could have occurred, the application of the core samples to form a reliable conclusion as to the potential effect of any impact is of minimal use. When this is taken together with the distances between the core samples and the physical size of the samples, the uncertainty is compounded. While some guidance is given to the interpretation of this data, it is quite inadequate to make any reliable estimate as to the possible damage which may be caused by the impact of the vessel grounding or swinging across the channel to impact on the southern bank. Any such prediction is speculative at best.
106 I do not accept the evidence of Dr Phipps that the vessel grounded on bedrock on the northern side of the channel. He concedes that the information available on the sediments on the north side of the channel is limited and draws inferences from scour marks as to what might have happened. He is not qualified, in my view, to interpret the causes of damage to the hull of the vessel. In these circumstances, given the uncertainties, reservations, difficulties of determining location and the limited size and distancing of the samples, I do not consider that they are of any real assistance.
107 In relation to this matter, I accept the evidence of Dr Binks to the effect that he would not expect there to be much difference between matter with a penetrometer reading of 300 kPa and that of 500 kPa. Dr Binks performed some calculations on the basis of this data in relation to the potential impact on the rudder or propeller of the vessel. He noted that only one of the bore holes was in the order of 500 kPa hardness. He did not consider, as a naval architect, that there would be a significant difference in the impact and damage to the vessel if it struck material of 300 kPa compared to that of 500 kPa. Moreover, he did not accept the assumptions on which the conclusions of Dr Phipps and other witnesses were based. He also considered that, with action by the crew, it was most unlikely that the vessel would even strike the south bank.
108 My conclusion in relation to this consideration is that there was danger to the vessel of suffering further damage if the tugs had not intervened. It is possible, but not probable, that in such circumstances the vessel could have blocked the Auckland Channel. It is not possible to determine for what period this could have lasted. There was also a danger that the "La Pampa" could have re-grounded and suffered further damage. I do not consider there was a danger to life. The vessel may have been unable to manoeuvre out of the port and may possibly have come into contact with the Boyne Wharf. Therefore, I have given weight to these matters but I do not accept the failure scenario posed by the plaintiffs and its witnesses. I prefer the evidence of Dr Binks to that of Mr Squire and the other witnesses where they are in conflict.