| Fiji Islands - Ports Authority of Fiji v C & T Marketing Ltd - Pacific Law Materials |
IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION
ACTION NO. HBC0480 of 1997S
p class=MsoNormal amal align=center style=text-align:center>IN THE MATTER OF THE ARBITRATION ACT S.12(2)
and the High Court Rules 1988 Order 73.
IN THE MATTER OF AN ARBITRATION
between C & T Marketing Ltd (Plaintiff) and Ports Authority of Fiji (Defendant)
IN THE MATTER OF AN AWARD
by Arbitrator Raza dated 10 October 1997 and delivered 15 October 1997
AND
IN THE MATTER OF AN APPLICATION
by the Defendant, Ports Authority of Fiji, to set aside the said Award.
BETWEEN:
PORTS AUTHORITY OF FIJI
a duly incorporated body having its
registered office at Suva in Fiji
Applicant
AND:
C & T MARKETING LIMITED
a limited liability company having its
registered office at Suva in Fiji
Respondent
K.F. Muaror for the Applicant/Defendant
D.P. Sharma for the Respondent/Plaintiff
ass=MsoNormal>Dates of Hearing and Submissions: 16th, 24th, 30th June 1999
Date of Judgment: 28th October 1999
JUDGMENT
This case concerns the provision of Pilot Boat Services in the Port of Suva by the Respondent/Plaintiff for the Applicant/Defendant,
and an Award by an Arbitrator, Mehboob Raza Esquire, a Barrister and Solicitor of this Court.
It also illustrates the lengths to which a statutory authority, in this case the Applicant, was prepared to go to deny liability by
it to the Respondent under a Licence Agreement for the provision of Pilot Boat and Pilot Boat Services in Suva dated the 28th of
May 1993.
In my Interlocutory Judgment of the 20th of May 1998 I discussed the relevant facts and history of the matter and refused to stay
enforcement of the Award by the Arbitrator dated the 10th of October 1997 which was delivered on the 15th of October 1997 pending
the outcome of an application to set aside the Award made by Originating Motion on the 18th of November 1997.
I ordered that the Arbitrator complete his Arbitration on the question of quantum of damages due to the Respondent. In the interlocutory
proceedings before me heard on the 9th and 11th of December 1997 the Applicant sought a stay of the Award on four grounds - alleged
misconduct in the sense used in Arbitration law by the Arbitrator namely:
(a) the Award did not deal with all the matters in dispute;
(b) the Arbitrator did not make a conclusive and final determination of the dispute;
(c) the Award was therefore not enforceable;
(d) was not in accordance with the evidence because the Arbitrator failed to take into account relevant or admissible evidence or
took into account irrelevant or inadmissible evidence which was highly prejudicial to the Applicant and not of any probative value.
I rejected these grounds. There has been no appeal from my judgment.
The following is the history of what then occurred between the parties and the Arbitrator and I set this out in its sequence.
23.6.98:
Applicant informs Respondent by letter that any negotiated settlement was impossible and that the Applicant therefore had no alternative
but to refer the matter back to the Arbitrator and attempt to conclude his assessment of damages.
Order of 20th May 1998 sealed, paragraph (a) of which states:
"The Applicant's Summons dated 18th November 1997 is dismissed and the Arbitrator's decision on the question of liability is
upheld."
29.7.98:
Applicant's solicitors request Arbitrator to refrain from assessing damages until 27th August 1998.
1.10.98:
Arbitrator gives an interim ruling on the issue of damages and upholds Respondent's claim for $140,941.00 special damages. Arbitrator
requests further submissions on interest rate, salvage award and other consequential losses and costs.
5.10.98:
Applicant's solicitors write to Arbitrator requesting that they and Respondent's solicitors appear before Arbitrator sometime after
12th October to discuss the assessment of damages and procedure to be followed.
6.10.98:
Respondent's solicitors write to Arbitrator requesting time until 8th October 1998 to make written submissions on the remaining heads
of the Award.
8.10.98:
Respondent's counsel files its submissions claiming an amount of $577,118.00.
14.10.98:
Arbitrator orders Applicant to provide its written response by 30th October 1998.
26.10.98:
Applicant calls a meeting in its offices to discuss settlement.
27.10.98:
Applicant writes to Respondent's solicitors on question of damages.
20.11.98:
Applicant's counsel requests further time until 30th November 1998.
25.11.98:
Respondent's counsel informs Applicant's solicitors that it requires Applicant's response by 30th November.
30.11.98
No response received by Respondent's counsel or by Arbitrator who then commenced further assessment on damages, interest and costs.
9.12.98:
Applicant faxes a letter dated 8.12.98 offering the sum of $90,181.55 in full and final settlement on a without prejudice basis.
I interpolate here that in this letter the Applicant's solicitors stated that the Applicant was not liable to the Respondent because
of the provisions of Sections 41 and 43 of the Ports Authority Act Cap. 181. I shall refer to this matter later.
14.12.98:
Arbitrator delivers his final assessment on quantum of damages in the sum of $501,412.63.
18.12.98:
Applicant seeks to reinstate the earlier Motion dated 3rd November 1997.
19.1.98:
Matter re-listed before me and Applicant ordered to file Amended Notice of Originating Motion. Matter set down for hearing on 28th
April 1999.
24.5.99:
Notice of Originating Motion dismissed for want of prosecution, the Court noting that Applicant had not filed skeleton argument as
directed by 26th April 1999. No appearance by the Applicant on this date.
2.6.99:
Notice of change of solicitors filed for Respondent. Also on 2.6.99 Respondent files Notice of Motion that final Award of Arbitrator
dated 14th December be made a Judgment of the Court.
2.6.99:
Applicant files Summons dated 1.6.99 seeking orders that Court order of 24th May 1999 be set aside and the Amended Notice of Originating
Motion dated and filed on 25th January 1999 be reinstated and hearing date for that Motion be fixed.
11.6.99:
Applicant files Summons for orders:
(1) that the Award as to liability be stayed until final determination of the Applicant's Summons of 2nd June;
(2) Arbitrator's decision on quantum of damages be stayed until final determination of the Applicant's Summons of 2nd June;
(3) execution and enforcement of the Award also be stayed pending final determination of the Applicant's Summons of 2nd June.
I heard argument on that Summons on the 16th of June and later received written submissions in addition to the oral argument. There
appears to be some confusion as to what I ordered in my Interlocutory Judgment, the Respondent contending that I had dismissed the
Applicant's appeal as to liability while the Applicant contended that I had not dealt with the Applicant's Notice of Originating
Motion to set aside the Arbitrator's Award. I accept this submission. In the first paragraph of my Interlocutory Judgment I made
it clear that I was dealing only with the Interlocutory Summons filed by the Applicant. The Notice of Originating Motion was not
then before me. Nevertheless I stated in my Judgment, and I still hold, that the Arbitrator produced an excellent Award. Having heard
and read the very helpful submissions made to me and having re-read the Arbitrator's first Award I stand by that comment except for
one small qualification. In his Award the Arbitrator rejected the Applicant's argument that Sections 43 and 49 of the Ports Authority
Act exempted the Applicant from any liability to the Respondent. He made no comment about Section 41 of the Act and based his decision,
correctly in my judgment, on the ground that the Applicant was bound by its Licence Agreement with the Respondent and consequently
liable to the Respondent for the damages it sustained as a result of its actions concerning the salvage of the M.V. Archer.
Section 41 of the Ports Authority Act appears in Part IX of the Act which deals with the duties and responsibilities of the Port Master
relating to fire on board a vessel and dangerous goods. Section 41 reads as follows:
"(1) In the event of fire breaking out on board a vessel in a port or the approaches to a port, the Port Master may proceed on
board the vessel with such assistance and persons as he considers necessary, and may give such orders as he considers necessary for
scuttling the vessel, or for removing it or any other vessel to such place as he considers proper to prevent in either case danger
to other vessels and for the taking of any other measures that he considers expedient for the protection of life or property.
(2) If such orders are not forthwith carried out by the master of such vessel, the Port Master may himself proceed to carry them into
effect.
(3) All expenses incurred in the exercise of the powers of the Port Master under this section shall be recoverable from the master
or owner of the vessel concerned."
Section 43 states that the Authority shall not be liable for any act, omission or default of the Port Master.
Section 49 appears in Part X which deals with the liability of the Authority. The section exempts the Authority from any liability
for the acts of any of its employees by performing work on any vessel and deems such employee to be the servant of the owner or master
of that vessel and not of the Authority.
The Arbitrator did not refer to Section 41 expressly but stated at paragraph 17 of his Award that:
"The Defendant has not pleaded or submitted any statutory limitation of liability."
This is not true because in its defence dated the 26th of March 1997 the Applicant pleads Section 41 and 43 of the Act and denies
liability to the Respondent. The Arbitrator stated that he did not consider Section 43 and 49 applicable and I may presume that he
also did not consider Section 41 assisted the Applicant. I must say here that, all other things being equal and there being no Licence
Agreement covering the relations between the parties, arguably Sections 41 and 43 might well have exempted the Applicant from responsibility
although in the circumstances of this case I consider it would be most inequitable for the Applicant to rely on them.
On the hearing before me on the 16th of June 1999 I allowed the Applicant to reinstate its Amended Notice of Originating Motion on
payment of the Respondent's costs which I fixed at $250.00. In hindsight I think I was probably over-generous to the Applicant in
fixing that sum. I turn now to the submissions I have received.
The first comment I make is the curious way in which this matter was referred to arbitration, the parties electing to deliver pleadings
and interrogatories and answers as though the matter were a civil cause in this Court. Probably they took the view that pleadings
would clarify the matters before the Arbitrator. Here I repeat the criticism which I made in my Judgment of the 20th of May 1998
that the parties did not have the courtesy to put before me a book of pleadings. Instead I was presented with two voluminous files
containing copies of all the documents relevant to the arbitration which required me to search, at times with considerable difficulty,
for the statement of claim, defence and reply which are to be found scattered through the annexures to an affidavit of Emosi Varea
sworn on the 30th of October 1997. For the purpose of this judgment I have once again had to undertake this time-consuming and extremely
annoying task which with the exercise of a little thoughtfulness by counsel I should not have had to do. It is regretted that neither
counsel thought of assisting the Court in this regard.
I have considered the submissions and the Arbitrator's Award anew and am of the opinion that the Award must be sustained. If there
was any doubt about that in my Interlocutory Judgment I resolve it here. I am amazed that the Applicant should have been allowed
to plead the statutory provisions I have mentioned above. I am also amazed that the Applicant should seek leave to appeal the Award
when in the Agreement to arbitrate signed by the parties on the 13th of February 1996 it is clearly stated:
"The Arbitrator's decision will be final."
Although I am satisfied as I said in my Interlocutory Judgment that I could not find any misconduct in the arbitration sense by the
Arbitrator in view of the reference to arbitration, I consider the parties are bound by the Arbitrator's decision.
In addition to that I consider that the Applicant is now estopped from denying liability because prior to the commencement of the
arbitration it had already accepted liability for the fire-fighting, salvage and towage costs. The Arbitrator dealt with this at
pages 17 and 18 of his Award where he said for example at paragraph 13.6 on page 17:
"These memoranda confirm the facts of the services provided by the Plaintiff. The Defendant's contention then was clearly not
to dispute what services had been rendered but rather the charges for the same.
The Defendant contends that the charges should be in line with the Pilot boat service contract and/or the Ports Authority of Fiji
(Tariffs) Regulations, 1995 and that the Plaintiff's basis for the charges is excessive."
In paragraph 14.3 he says:
"The Plaintiff provided the towage and related services as directed by the Defendant and for consideration. The Defendant is
not denying it should pay for the services. It simply says the Plaintiff's charges are excessive."
Accordingly in my judgment if the Respondent had applied to the Arbitrator to strike out the Applicant's pleading of the statute he
would have been justified in doing so but no application was made to him.
At page 18 of the Award paragraphs 14.2 and 14.3 the Arbitrator said this, and I agree:
"14.2 The services actually provided by the Plaintiff at the request of the Defendant were clearly towage services or services ancillary
to salvage of the "Archer". They were not pilotage or pilot boat services as generally understood. They were not within
the scope of the pilot boat service contract. See para 5 above of this decision where the legal meaning of these are discussed. In
the same para 5 the quotations given there state that the general rule of contract apply.
14.3 There was no pre-existing contract of tow. A contract of tow or of salvage arose out of the events early in 1996 referred to
above.
The Defendant requested the Plaintiff to assist the Defendant and the Plaintiff reluctantly (or as it says under protest) accepted.
The Plaintiff provided the towage and related services as directed by the Defendant and for consideration. The Defendant is not denying
it should pay for the services. It simply says the Plaintiff's charges are excessive.
The Plaintiff's reluctance was based on the fact that the "Seniceva" was designed as a pilot boat and was not suitable for
tow or salvage. The Defendant nevertheless requested that the Plaintiff to proceed."
In this regard I refer to an opinion given by the Solicitor-General to the Permanent Secretary for Public Works and Infrastructure
on the 17th of October 1996 in which the Solicitor-General stated that he considered that the Applicant was liable to the Respondent
under the Licence Agreement.
I can do no better than quote and approve paragraph 12 of that opinion.
"On a consideration of the Licence Agreement in toto, I am disposed to conclude that the engagement of the MV Seniceva by the Port Master, constituted a dispensation of "service"
within the parameters of the Agreement. Towage of the kind that was undertaken, in my view, would come under the broad rubric of
"pilot boat service". I have inclined towards a more liberal interpretation of the Agreement because there is nothing in
the scheme of the Licence or the Agreement as a whole which seeks to expressly exclude some types of "services" from within its ambit. Even if I am mistaken in this view, it is manifest from the information
I have been shown that C & T were even reluctant to undertake the work required because of the possible technical unsuitability
of the MV Seniceva to carry out the work that it was being asked to perform. That being so, it is clearly arguable that even if the
"services" rendered were not contemplated by the Licence Agreement, the latter was verbally varied to the extent that the
Port Master gave instructions for the deployment of the MV Seniceva. As such, the services performed, were clearly done pursuant
to the Licence Agreement or a variation thereof."
Clearly the Arbitrator was of the same opinion.
At page 19 of the Award after mentioning the Respondent's reluctance to assist MV Archer because the Pilot Boat Seniceva was designed
as a Pilot Boat and was not suitable for towage or salvage the Arbitrator quotes a remark of Mr. Justice Cooper in an article in
71 ALJ 686FF in which the author said:
"The salvage cases identify the relevant vitiating factors which under the modern law of duress will give rise to an entitlement
to restitutionary relief. If necessary, the court will exercise its auxiliary jurisdiction in equity to craft such relief as is necessary
to achieve what is practically just as between the parties."
In my judgment the Arbitrator's Award has achieved what is practically just between the parties and given the attempts by the Applicant
to resile from its original position by seeking to hide behind the skirt of statutory defences I consider the Applicant's conduct
in this matter calls for strong condemnation.
The Arbitrator was fully aware of this, hence his requests to the Applicant's solicitors to comply with the time limitations he had
set them and to which they had agreed in the delivery of submissions.
Finally as to the award of damages by the Arbitrator I consider he has displayed no error in his award of $501,412.63 for the reasons
which he gives on pages 5 and 6 of the Award of 14 December 1998.
For the foregoing reasons I confirm the Award of the Arbitrator and dismiss the Amended Notice of Originating Motion. In view of the
volume of material which the Court has had to consider I order the Applicant to pay the Respondent's costs which I fix in the sum
of $1,000.00.
JOHN E. BYRNE
JUDGE
Hbc0480j.97s
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