Breach of Warranty in Marine Insurance: Allison Pty Ltd t/as Pilbara Marine Port Services v Lumley General Insurance Ltd [2006] ('Pilbara Pilot')

• Author: Kate Lewins
• Position: Senior Lecturer, Murdoch University School of Law. By way of disclosure of interest in the case, it should be noted that the author was employed by the defendant's solicitors and acted for the defendant from 1995 to 1996
• Pages: 54-57

BREACH OF WARRANTY IN MARINE INSURANCE:

Allison Pty Ltd t/ as Pilbara Marine Port Se rvice s v Lumle y Gene ral

Insurance Ltd [2006] WASC 104 (Pilb ara Pilo t)

Ka te Le wins∗

Introduc tion

This case concerns the vessel Pilbara Pilot, which was lost in February 1995 at Dampier during

Cyclone Bobby. The vessel was insured by the defendant pursuant to a marine insurance policy at the

time of its loss. The plaintiff’s action sought indemnity under the policy. The defendant denied

indemnity on various grounds. This case note deals with one of those grounds; the issue of the failure

to moor the vessel on a cyclone proof mooring in breach of an express warranty. The vessel had been

tied to the stern of another vessel during the cyclone and the parting of the mooring lines led to the loss

of the vessel. The trial judge Heenan J found there was no breach of the express warranty because the

actions of the insured were in an attempt to avert the loss, and as such the proximate cause of the loss

was the cyclone itself.1

This case raises the vexed issue of proximate cause: will an insured’s action attempting to avert a loss

by a peril insured be part of the peril itself, or a new peril. The twist in the tale is whether the insured’s

actions in attempting to avert the loss can neutralise a breach of warranty which occurred during that

attempt.

The fa cts

Pilbara Pilot was a 14.6 metre seagoing covered pilot/personnel vessel with a 4.3 m beam and 1.5

draft.2 It was under contract to act as a pilot boat, carrying pilots to and from ships entering and leaving

the port of Dampier. The vessel’s usual mooring was in or near an area of approved anchorage for

small craft, in about 1.8 metres of water.3 The judge found that the usual mooring of the vessel was in

fact ‘cyclone proof’ and was approved by the local statutory authority.4 The plaintiff also owned

another vessel, the Pilbara Jarrah, which was moored in the lee of a causeway and in water of about 4

metres. As Cyclone Bobby approached, a number of the plaintiff’s captains expressed concern that in

the particular weather conditions, the Pilbara Pilot might be at risk because of its insufficient water

clearance.5 The port at this time was on yellow alert, and announcements had been made that the port

would move onto red alert about an hour later.6 Once it moved onto red alert no shipping movements

were permitted:7 ‘in these circumstances of apprehended imminent peril the decision was made taken

to move the vessel.’8

As Heenan J noted,9 once the decision had been made to move the vessel, the options were rather

limited. There were no moorings free at that time. The plaintiff’s manager decided to move the vessel

to a more sheltered anchorage and in deeper water, albeit tied to the stern of the Pilbara Jarrah. The

Pilbara Jarrah’s mooring was an approved cyclone mooring but, as His Honour accepted, only for the

one vessel.

∗ Senior Lecturer, Murdoch University School of Law. By way of disclosure of interest in the case, it should be noted that the

author was employed by the defendant’s solicitors and acted for the defendant from 1995 to 1996.

1 Allison Pty Ltd t/as Pilbara Marine Port Services v Lumley General Insurance Ltd [2006] WASC 104 (Supreme Court of

Western Australia Unreported, Heenan J, 8 June 2006) [132].

2 Ibid [20].

3 Ibid [4 ].

4 Ibid [101]. The judge rejected the defendant’s argument that the vessel’s usual mooring was not cyclone proof, in breach of the

warranty under the policy. A lengthy part of the judgment deals with this argument.

5 Ibid [44].

6 Ibid [45].

7 Ibid [45].

8 Ibid [45].

9 Ibid [48].

(2006) 20 A&NZ Mar LJ

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