Overview

On 3 May 2001, ‘Tasman Pioneer’ grounded in Japanese waters, causing significant damage to ship and cargo. It was common ground that the nautical fault defence covered the master’s conduct up until the time of the grounding. However, he then delayed reporting the casualty to the Japanese Coastguard and his owners and continued sailing. During this time, the vessel suffered further ingress of water into the cargo holds. The carrier admitted that this conduct of the master, described by the Supreme Court as ‘reprehensible’, was in order to absolve himself from blame.

Proceedings against the contracting carrier, Tasman Orient Line, were commenced in the New Zealand High Court by a group of cargo interests who owned deck cargoes on the vessel. The High Court held that damage to the deck cargoes was caused by the master’s post-casualty misconduct. But for that, salvors would have arrived at the casualty five hours earlier and the deck cargo would have been saved. The question for the New Zealand courts was whether the master’s post-grounding conduct fell within the nautical fault defence in Article IV, rule 2(a) of the Hague-Visby Rules, which provide that neither contracting carrier nor ship shall be responsible for loss and damage to cargo resulting from ‘act, neglect or default of the master, mariner, pilot or the servants of the carrier in the navigation or in the management of the ship’.

In Tasman Orient Line CV v New Zealand China Clays Ltd [2010] NZSC 37 (16 April 2010), the New Zealand Supreme Court held that the ‘nautical fault’ defence for contracting carriers applies to all acts - apart from barratry - of the master and crew in the navigation or management of the ship.

Click ‘View Briefing’ for more details on the case.