UK Standard Conditions for Towage and s74(3) Trade Practices Act 1974 (Cth) before the Queensland Court of Appeal and the High Court of Australia

• Author: Kate Lewins
• Position: Senior Lecturer, Murdoch University School of Law. My thanks to the counsel of both parties who provided me with their summary of arguments for the special leave application to the High Court
• Pages: 228-233

UK Standard Conditions for Towage and s74(3) Trade Practices

Act 1974 (Cth) before the Queensland Court of Appeal and the

High Court

Dalrymple Marine Services Pty Ltd v PNSL Berhad; The Owners of

the Ship ‘Koumala’ v PNSL Berhad

[2007] QCA 429 (30 November 2007)

[2008] HCA Trans 246 (18 June 2008)

Kate Lewins∗

Introduction

This case concerns damage done to the ship Pernas Arang (the ship) as a result of a collision between it

and the tug Koumala (the tug) whilst the latter was readying itself to tow the ship. The judgment of the

trial judge has been noted in a previous issue of this journal.1 The towage operator Dalrymple Marine

Services Pty Ltd (Dalrymple) appealed from that decision to the Queensland Court of Appeal which

dismissed that appeal. Dalrymple then sought special leave to appeal to the High Court. Both the

appeal and the special leave application are the subject of this casenote.

The Koumala is a significant case for two reasons. First, it deals with the important question as to

whether the warranty to exercise due care and skill imposed by s74 of the Trade Practices Act 1974

(Cth) (TPA) applies to a towage contract, or whether such a towage contract can be said to fall within

the exception contained within ss3. Subsection 3 reads:

S74 (3) A reference in this section to services does not include a reference to services

that are, or are to be, provided, granted or conferred under:

(a) a contract for or in relation to the transportation or storage of goods for the

purposes of a business, trade, profession or occupation carried on or engaged in by

the person for whom the goods are transported or stored. (emphasis added).

Secondly, it discusses the operation of the phrase ‘whilst towing’ as it is used in the UK Standard

Conditions for Towage and other Services (Revised 1974) (UK Standard Conditions).

The facts

The towage was the subject of a contract between Dalrymple and the owner of the ship, PNSL Berhad.

The terms of the towage contract were the UK Standard Conditions and the fee for the service to the

ship was agreed at $12,500.2

The collision occurred on 28 February 1995. The ship, a dry bulk carrier, was approaching the

Dalrymple Bay Coal terminal at the port of Hay Point, Queensland in order to load a cargo of coal.

The tug and another, the Kungurri, were preparing to tow the ship to the terminal. A pilot was on board

the ship and had ordered the tugs to ‘make fast’ at points on the starboard side. At the time of that

order, the tug was 1 nautical mile away. The tug steamed towards the ship and, once close by, crossed

ahead of its bow. Once on the starboard side of the ship the tug turned quickly to starboard and was

then seen to be blowing black smoke.3 It had lost steering due to a blocked air filter element in the

∗ Senior Lecturer, Murdoch University School of Law. My thanks to the counsel of both parties who provided me with their

summary of arguments for the special leave application to the High Court.

1 (2007) 21 A&NZ Mar LJ 101. The first instance decision of Holman J has now been reported at (2007) FLR 243.

2 Cite (2007) FLR 243 at [29]. Because the consideration was under the TPA threshold of $40,000 the shipowner was considered

a ‘consumer’ of services under the TPA.

3 (2007) FLR 243 at [4].

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