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South Seas Cruises Ltd v Mody [2010] FJHC 222; HBC224.2008L (30 June 2010)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

Civil Action No: HBC 224 of 2008L

BETWEEN:

SOUTH SEAS CRUISES LIMITED
Plaintiff

AND:

SAMSUL MODY
Defendant

INTERLOCUTORY JUDGMENT

Judgment of: Inoke J.

Counsel Appearing: Mr F Haniff for the Plaintiff
Mr E Maopa for the Defendant

Solicitors: Munro Leys & Co for the Plaintiff
Babu Singh & Assocs for the Defendant

Date of Hearing: 23 June 2010
Date of Judgment: 30 June 2010

INTRODUCTION

[1] This is an application by the Plaintiff for leave to appeal my judgment delivered on 20 April 2010 in which I struck out its interlocutory application and Writ of Summons and awarded costs to the Defendant. The Plaintiff also applies for stay of my costs award.

JUDGMENT OF 20 APRIL 2010

[2] For clarity and completeness I set out what I said in my judgment of 20 April 2010.

[3] On 20 October 2008 the Plaintiff (“South Seas Cruises”) filed a specially indorsed Writ of Summons against the Defendant (“Mody”) seeking the following Declaration:

[i] That by reason of the provisions of the Marine Act, 1986 adopting the International Convention Relating to the Limitation of the Liability of Owners of Sea-Going Ships and the Protocol Amending the International Convention Relating to the Limitation of the Liability of Owners of Sea-Going Ships and pursuant to Section 178(1) of the Marine Act, 1986, it is not answerable in damages beyond Special Drawing Rights of 62,001 converted into Fiji Dollar currency at the time of making such Declaration in respect of the injury suffered by the Defendant on 19 February 2006 on board the ship SV Seaspray.

[4] The action arose out of an incident that happened on 19 February 2006 in which Mody allegedly drank caustic liquid out of a bottle labeled as “Water” when he and his family were on the South Seas Cruises vessel “SV Seaspray” whilst holidaying in Fiji. He suffered chemical burns to his mouth, throat, esophagus and stomach and has now sued South Seas Cruises in the New South Wales Supreme Court in Australia where he was from.

THE LIMITATION OF LIABILITY APPLICATION

[5] On 22 December 2008, South Seas Cruises filed a Summons for Decree of Limitation of Liability (the “Limitation Summons”) to limit its liability be seeking the following orders:

[i] That by reason of the provisions of the Marine Act, 1986 adopting the International Convention Relating to the Limitation of the Liability of Owners of Sea-Going Ships and the Protocol Amending the International Convention Relating to the Limitation of the Liability of Owners of Sea-Going Ships and pursuant to Section 178(1) of the Marine Act, 1986, it is not answerable in damages beyond Special Drawing Rights of 62,001 converted into Fiji Dollar currency at the time of making such Declaration in respect of the injury suffered by the Defendant on 19 February 2006 on board the ship SV Seaspray.

[ii] An Order that the time for filing further pleadings be extended until the hearing and determination of the Plaintiff’s application for decree of limitation of liability.

[iii] Costs

[6] The application was made pursuant to s 178(1) of the Marine Act, 1986 and the inherent jurisdiction.

THE BACKGROUND

[7] The application was supported by the affidavit of the Chief Executive Officer of South Seas Cruises. I reproduce paragraphs 6 to 11 of his affidavit in which he deposed as to the facts and the reasons why this application was brought:

6. On 19 February 2006, the Defendant, Samsul Mody (“Mr Mody”), together with his wife Mamtaj Mody, and their child, were paying passengers on a SV Seaspray day cruise offered by SSCL (“the Cruise”). Further, Mr Mody and his family were holidaying in Fiji and purchased their tickets for the Cruise in Fiji.

7. During the Cruise, it is alleged that Mr Mody consumed caustic liquid stored in a bottle that was labeled as water while on board the SV Seaspray thereby suffering personal injury.

8. I have read the incident report in this matter and as a result of my own investigation, I verily believe that Mr Mody came to drink the caustic liquid in the following circumstances.

9. Prior to the incident, the Chef on board the SV Seaspray, Setareki Ratatagia, cleaned the griller with the caustic liquid. He had decanted the caustic liquid into an empty water bottle. After cleaning the barbeque griller, Mr Ratatagia placed the bottle containing the caustic liquid near the main mast. During the Cruise, Mr Mody was having his lunch on board the SV Seaspray near the main mast. He had been previously sitting near the main mast drinking water from a bottle that had a label indicating it was water. Mr Mody picked up the bottle containing the caustic liquid, thinking that it was the bottle of water that he had been drinking from, consumed some of the contents of the bottle containing the caustic liquid thereby causing him personal injury.

10. Mr Ratatagia was engaged by SSCL as a Chef because he had cooking experience. Any ordinary and reasonable person involved in the cooking profession, should, as a matter of common sense, know better than to decant caustic liquid into a water bottle and to leave the caustic liquid in a water bottle in a popular eating area of the SV Seaspray. It is self-evident that Mr Ratatagia should, in the exercise of the reasonable skill which SSCL was entitled to expect from a person engaged as a Chef, have placed the bottle containing the caustic liquid in safe storage.

11. In the premises, SSCL therefore contends that the actions of the Chef in leaving the bottle containing the caustic liquid near the main mast where it could be mistaken by guests on board the SV Seaspray for water and the subsequent injury suffered by Mr Mody was without the actual fault or privity of SSCL and therefore it is entitled to limit its liability under the provisions of Marine Act, 1986.

[8] Mody in response largely accepts these facts but says that as far as he observed, Mr Ratatagia was a member of the vessel’s crew. Mr Ratatagia was negligent and so South Seas Cruises is vicariously liable for the injuries caused by his negligence.

[9] Following the incident of 19 February 2006, Mody made a claim for compensation against South Seas Cruises and on 22 December 2006, they paid Mody AUD$75,000 and a further sum of AUD$60,000 on 12 September 2007 on a without admission of liability basis, a total of AUD$135,000.

[10] On 11 August 2008, Mody issued legal proceedings in the Supreme Court of New South Wales claiming damages for personal injuries for breach of contract and negligence. South Seas Cruises then applied in that Court for a stay of proceedings on the ground that the Fiji rather than the NSW Court was the appropriate court to decide the claim. The application was dismissed on 26 November 2008 and they have been ordered to defend Mody’s claim in NSW.

[11] South Seas Cruises now claims that they have paid more than they were required to pay because of the limitation set by the Marine Act under the International Convention Relating to the Limitation of the Liability of Owners of Sea-Going Ships and the Protocol Amending the International Convention Relating to the Limitation of the Liability of Owners of Sea-Going Ships. The amount that South Seas Cruises says they were limited to pay was AUD$115,000 (rounded up), that is, an over-payment of AUD$20,000 according to their calculations.

THE HEARING OF THE LIMITATION SUMMONS

[12] On 30 January 2009, the first call of the Limitation Summons, this Court gave time for the parties to file their affidavit material and set the application down for hearing on 13 March 2009.

[13] On 19 February 2009, Mody filed in NSW an application to restrain South Seas Cruises from continuing or further pursuing these proceedings (the “Anti-suit application”). That application was later dismissed on 20 March 2009.

[14] Because of the Anti-suit application, this Court adjourned the Limitation application to be heard on 27 March 2009 by consent. The application was heard on that day before another judge but judgment remained outstanding. On 18 September 2009, after taking over the carriage of this action, the parties agreed that I deliver the judgment based on the trial judge’s notes and submissions filed by counsel. Unfortunately, the Court clerk that was responsible for this file at the time left soon afterwards and the outstanding judgment was not brought to my attention until South Seas Cruises solicitors wrote to the Registry on 10 March 2010. Normally, this judgment would have been delivered much earlier but for this slip and I apologise for the delay.

[15] I dismissed the application principally because I was of the opinion that the Limitation of Liability Convention adopted by s 177 of the Marine Act only applied to injury caused by collision of vessels and this was not one of those cases. Since the principal relief sought in the Writ of Summons was the same as that sought in the application I also dismissed the action.

THE APPLICATION FOR LEAVE TO APPEAL

[16] Consequently, the appeal is on whether I was correct in holding that there was no limitation on liability. Since my judgment is interlocutory, leave to appeal is required.

[17] I was informed by counsel for South Seas Cruises that an appeal had been lodged in the Court of Appeal against my order dismissing the action because that was a final order. With respect, that is not correct. The law is now quite clear from Goundar v Minister for Health [2008] FJCA 40; ABU0075.2006S (9 July 2008) that the “applications approach” is the correct approach. It is true that the effect of the order is to end the action but it is nevertheless an interlocutory order which requires leave to appeal. The appeal currently lodged in the Court of Appeal is therefore irregular. It should not be heard if I am to refuse this application for leave to appeal.

THE LAW ON LEAVE TO APPEAL INTERLOCUTORY ORDERS

[18] The law is settled that leave will only be granted in exceptional circumstances: Kelton Investments Ltd & Ors v CAAF [1995] FJCA 15; Latchan Brothers Ltd v TCB & Ors [1994] Civil Appeal 12/94; Khan v Native Land Trust Board [2009] FJHC 272; HBC198.2006L (1 December 2009); Narayan v Public Employees Union [2010] FJHC 108; HBC161.2009L (8 April 2010).

CONSIDERATION OF THE APPLICATION FOR LEAVE TO APPEAL

[19] Division 2 of Part IX of the Marine Act, 1986 is headed “Limitation of Liability”. Section 178(1) pursuant to which the original application and action were brought is within Division 2. Mr Haniff’s submission is that, contrary to my finding, this provision has general application and applies to situations other than those involving collisions of vessels. The relevant provisions are as follows:

Division 2-Limitation of liability

Interpretation

(Limitation of Liability Convention)

176.-(1) In this Division, unless the contrary intention appears-

"applied provisions of the Convention" means the provision of the Convention that, by virtue of subsection 177(1), have the force of law as part of the law of Fiji;

"Convention" means the Limitation of Liability Convention.

(2) In this Part, except in so far as the contrary intention appears, a word or expression used in this Part and defined in the Convention has the same meaning as in the Convention.

Limitation of shipowners' liability

177.-.(1) Subject to this Act and to any other law, the provisions of the Limitation of Liability Convention (other than sub-paragraph 1(c) of Article I of the Convention) have the force of law as part of the law of Fiji.

...

Application to determine shipowners' liability

178.-(1) Where a claim is made against or apprehended by a person in respect of liability of that person which that person may limit in accordance with the applied provisions of the Convention he may apply to the Court to determine the limit of his liability in accordance with those provisions.

(2) Where an application is made under subsection (1) the Court may-

(a) determine the limit of the applicant's liability; and

(b) make such order or orders as it thinks fit in respect to the constitution, administration and distribution in accordance with the applied provisions of the Convention, of a limitation fund for the payment of claims in respect of which the applicant is so entitled to limit his liability.

[20] Schedule 6 to the Act contains the INTERNATIONAL CONVENTION RELATING TO THE LIMITATION OF THE LIABILITY OF OWNERS OF SEA-GOING SHIPS. Article 1(1) provides:

The owner of a sea-going ship may limit his liability in accordance with Article 3 of this Convention in respect of claims arising from any of the following occurrences, unless the occurrence giving rise to the claim resulted from the actual fault or privity of the owner:

(a) Loss of life of, or personal injury to, any other person being carried in the ship, and loss of or damage to, any property on board the ship;

(b) Loss of life, or personal injury to, any other person, whether on land or on water, loss of or damage to any other property or infringement of any rights caused by the act, neglect or default of any person on board the ship whose act, neglect or default the owner is responsible: Provided however that in regard to the act, neglect or default of this last class of person, the owner shall only be entitled to limit his liability when the act, neglect or default is one which occurs in the navigation or the management of the ship or in the loading , carriage or discharge of its cargo or in the embarkation, carriage or disembarkation of its passengers;

[21] It is clear from Article 1(1) that even if the Limitation Convention has wide and general application, the owner cannot limit his liability under s 178(1) if “the occurrence giving rise to the claim resulted from the actual fault or privity of the owner” or if the owner is responsible for the “act, neglect or default” of the person who caused the personal injury.

[22] In other words, there must be a prior inquiry into whether there is “actual fault or privity of the owner” or “an act, neglect or default” for which the owner is responsible. That inquiry has not yet taken place in this Court. It is being conducted in the NSW Supreme Court. The limitation argument therefore, in my view, should be taken up in the NSW proceedings and not here. When asked, Mr Haniff was not able to tell me whether the point has been raised there or not. I do not think that this Court should be used as a means of interfering with or restricting the findings of the court in the NSW proceedings.

[23] In this respect, the NSW proceedings are substantially the same as the proceedings in this Court, and I respectfully disagree with the view expressed by Hoeben J of the NSW Supreme Court in the anti-suit application. It is my view that this Court is not the appropriate forum. I refer to a summary of the law by the Federal Court of Australia in its decision of TS Production LLC v Drew Pictures Pty Ltd [2008] FCAFC 194 (19 December 2008):

FINKELSTEIN J:

...

12 In England the leading case is Spiliada Maritime Corporation v Cansulex Ltd [1986] UKHL 10; [1987] AC 460. There Lord Goid (a) tha) that a stay wtay will "be granted on the ground of forum non conveniens where the court is satisfied that there is some other available foruming cent jurisdiction, which is the appropriate forum orum for tfor the trial of the action, i.e. in which the case may be tried more suitably for the interests of all the parties and the ends of justice". This test involves two ries: (1): (1) is there some avae forum wium with competent jurisdiction that can deal with the dispute; and (2) is it more apprte in the inhe interes the es and the ends of justice that the dispute be trbe tried in that other forum. If both;both inquiriesd a posi positive answer thceeding with be stayed unless the plaintiff in the local pral proceeding establishes that substantial justice will not be done in theopriate forum: Connelly v RTZ Corporation Plc [1997]1997] UKHL 30; [1997] UKHL 30; [1998] AC 854, 872-874; Lubbe v Cape Plc [2000] UKHL 41; [2000] 1 WLR 1545, 1555.