New Zealand China Clays Ltd v Tasman Orient Line CV (Unreported, CIV-2002-404-3215, Williams J, 31 August 2007)

• Author: John Knight - Grace Rippingale
• Position: Partner and Law Clerk, Chapman Tripp, Solicitors, Wellington
• Pages: 89-94

NEW ZEALAND CHINA CLAYS LTD V TASMAN ORIENT LINE CV

(UNREPORTED, CIV-2002-404-3215, WILLIAMS J, 31 AUGUST 2007)§

John Knight and Grace Rippingale*

This case is the substantive determination of the proceeding noted in Volume 18 of the MLAANZ Journal in

respect of preliminary applications for a limitation decree and fund.1 Some four years after the limitation decree

was granted the case has come to trial, with the main legal issue being whether the carrier was entitled to rely on

the exemption in Article 4 Rule 2(a) of the Hague-Visby Rules (‘Rules’) for the ‘act, neglect, or default of the

master mariner, pilot, or servants of the carrier in the navigation or in the management of the ship’.

1 Facts

The proceeding involved a claim by cargo interests whose deck cargo was damaged following the grounding of

the 21,115 tonne cargo vessel Tasman Pioneer off the coast of Japan in 2001. The Tasman Pioneer was sub-time

chartered by Tasman Orient Line CV (‘Tasman Orient’), and was carrying New Zealand cargo to various Asian

ports. The circumstances of the grounding were not unusual in themselves (in the range of cases in which large

container vessels have run aground). The vessel had been running behind schedule and the master tried to make

up time by transiting through a restricted passage at night. However, the master was let down by the ship’s radar

and, despite efforts to pull out of the manoeuvre, the Tasman Pioneer grounded heavily. The vessel was not

stranded but suffered serious damage including flooding of a number of compartments.

Although the grounding resulted from the usual combination of poor decision making and equipment failure that

often marks out maritime misadventure, the actions of the master after the grounding were extraordinary.

Instead of notifying the Japanese coast guard and seeking assistance, the master continued to steam full speed

for at least two hours and covered some 22 nautical miles before anchoring. During the vessel’s flight from the

scene it took on large quantities of water and eventually the sea reached the deck cargo, causing substantial

damage.

The master then instructed the crew to lie to the coast guard investigators to persuade them the ship had

impacted with an unidentified floating object. The crew initially followed the master’s orders to the point where

one of the mates erased the course actually sailed from the ship’s chart and substituted a false course. However,

the crew eventually acknowledged to the investigators what had actually happened, which led in due course to

the master confessing to the true circumstances and his subsequent prosecution by Japanese authorities.

2 The Claims

Cargo interests alleged breach of bailment and contract under the bills of lading issued by Tasman Orient. They

also asserted that at the time of the casualty the ship was unseaworthy.

In its defence, Tasman Orient argued the damage to the cargo was not caused by the post grounding actions of

the master, and asserted that the carrier was protected by the exemption contained in Article 4 Rule 2(a). They

denied that the vessel was unseaworthy.

In response, the cargo interests argued that the master’s actions and omissions caused more extensive flooding

and damage than would otherwise have occurred and were not bona fide or for the navigation or management of

the ship. They asserted that the master’s actions were reckless before the grounding and that he misconducted

himself in a number of ways following it.

§ The full-text judgment is available at http://jdo.justice.govt.nz/jdo/GetJudgment/?judgmentID=125882 and http://www.maritimelaw.org.

nz/0907.html.

* Partner and Law Clerk, Chapman Tripp, Solicitors, Wellington.

1 Browne, J, ‘Tasman Orient Line CV v Alliance Group Ltd (The “Tasman Pioneer”) [2004] 1 NZLR 650; [2003] 2 Lloyd’s Rep 713 (HC)’

(2004) 18 MLAANZ Journal 189.

(2008) 22 A&NZ Mar LJ 89