The "Sunrise Crane"

• Jurisdiction: Singapore
• Judgment Date: 13 September 2004
• Date: 13 September 2004
• Docket Number: Civil Appeal No 141 of 2003
• Court: Court of Appeal (Singapore)

The “Sunrise Crane”

[2004] SGCA 42

Yong Pung How CJ

,

Chao Hick Tin JA

and

Judith Prakash J

Yong Pung How CJ

and

Chao Hick Tin JA

Judith Prakash J

(dissenting)

Civil Appeal No 141 of 2003

Court of Appeal

Admiralty and Shipping–Limitation of liabilities–Onus of proof on shipowner to rely on limitation of liability–Whether appellant shipowner entitled to limit liability under circumstances–Section 136 Merchant Shipping Act (Cap 179, 1996 Rev Ed)–Tort–Negligence–Duty of care–Dangerous goods–Whether owner of vessel discharging dangerous cargo owing duty of care to inform receiving vessel about dangerous nature of cargo immediately prior to discharge–Whether more care necessary where highly dangerous substances involved–Tort–Negligence–Duty of care–Owner of vessel discharging dangerous cargo engaging contractor to discharge cargo–Contractor informed of dangerous nature of cargo–Whether owner of discharging vessel under separate duty of care to inform receiving vessel of dangerous nature of cargo to be discharged–Tort–Negligence–Duty of care–Whether foreseeable that independent contractor might fail to inform receiving vessel of dangerous nature of cargo–Whether relationship between discharging and receiving vessels sufficiently proximate–Whether just and reasonable to impose duty of care on owner of discharging vessel under circumstances–Tort–Negligence–Remedies–Contract with third party–Whether remedies in tort automatically unavailable where plaintiff having remedy in contract against another party

The Sunrise Crane was a chemical tanker owned by the appellant. On 4 March 2001, the Sunrise Cranearrived in Singapore to discharge a cargo of nitric acid. It was found that some 34mt of the nitric acid in one of her tanks had been contaminated by hydraulic oil. The contaminated cargo had to be disposed of by safe means, since nitric acid was an extremely dangerous substance due to its highly corrosive nature.

The appellant requested the vessel's P&I Club to assist. The club appointed a surveyor (one Capt Gill) to find a suitable licensed contractor to remove the contaminated cargo. The surveyor got in touch with two possible contractors, one of which was Pink Energy Enterprises (“Pink Energy”). Pink Energy in turn engaged Pristine Maritime Pte Ltd (“Pristine Maritime”) to remove the contaminated cargo from the Sunrise Crane. Pristine Maritime had the Pristine on charter from the respondent who owned the Pristine. It was agreed that the contaminated cargo would be transferred onto the Pristineoutside port limits. There was a dispute as to whether Capt Gill told Pink Energy that the cargo was contaminated nitric acid. The trial judge accepted Capt Gill's evidence and found that Pink Energy had been told.

The Pristine was constituted of mild steel and was used as a slop carrier. It was incapable of carrying nitric acid.

In the early hours of 8 March 2001, the Sunrise Crane moored alongside the Pristine and transferred the contaminated nitric acid into the Pristine. A short while later, smoke was seen coming out of the Pristine which also listed a little to port. The crew from the Pristine evacuated to the Sunrise Crane and some of the crew of the Sunrise Crane had to put on protective equipment and breathing apparatus before boarding the Pristine to close its valves and openings. Eventually, the Pristine capsized.

It was common ground that prior to the transfer, no one on board theSunrise Crane informed the crew of the Pristine that the substance to be transferred was contaminated nitric acid.

The respondent, as owners of the Pristine, brought an action against the appellant in tort for failing to inform thePristine of the nature of the cargo immediately prior to the transfer. The appellant's response was that it had engaged an independent contractor (ie, Pink Energy) to dispose the cargo and that Pink Energy had been fully informed. Thus, the appellant did not owe any duty of care to the respondent. Alternatively, the appellant pleaded that it had was entitled to limit its liability under the Merchant Shipping Act (Cap 179, 1996 Rev Ed).

The trial judge found in favour of the respondent. She held that the appellant owed a duty of care to the respondent and that the appellant was not entitled to limit its liability. In the course of her judgment on duty of care, the trial judge made reference to two guides from the International Chamber of Shipping (“ICS”), namely the Tanker Safety Guide (“TS Guide”) and the Ship to Ship Transfer Guide (“STS Guide”), as well as a document called the material safety data sheet (“MSDS”). The appellant appealed against the entire decision. In particular, the appellant argued that the trial judge was wrong to have relied on the ICS Guides and the MSDS.

Held, dismissing the appeal (Judith Prakash J dissenting):

(1) The law expected a person who carried a pound of dynamite to exercise more care than if he was only carried a pound of butter, or putting it in another way, to exercise more care with a bottle of poison than a bottle of lemonade. What was adequate for one set of circumstances might not be so in relation to a different set of circumstances. More care had to be exercised where a highly dangerous substance was involved. In relation to ordinary or less dangerous chemicals, an advice to the main contractor could perhaps suffice. However, having regard to the circumstances of the present case, and the fact that a very dangerous substance was involved, more care should have been exercised by theSunrise Crane: at [25] and [30].

(2) While it was true that the law of tort offered an avenue of redress for losses suffered by a person where such losses would otherwise be without a remedy, it did not conversely mean that remedies in tort became automatically unavailable simply because the plaintiff had a remedy in contract against another party. To conflate the two would be to ignore the fundamental difference between contract and tort. Tortious duties were primarily fixed by law while contractual duties were based on the consent of the parties: at [34].

(3) It was clear that the law did differentiate between a claim in pure economic loss and that for personal injuries or physical damage. In respect of the former, the law was more restrictive in imposing a duty of care: at [36].

(4) It was the appellant who first introduced a part of the TS Guide into the proceedings in its closing submission at the trial to substantiate what it alleged to be the meaning of “slops”. The respondent then placed the entire document before the court. As the appellant had relied on a part of the ICS Guides to substantiate its case, it should have no reason to object to another part of the ICS Guides being relied upon by the opponent to show global industry practices or standards. The ICS was the international trade association for merchant ship operators and its membership comprised national shipowners' associations representing over half of the world's merchant fleet. Taking the recommendations in the ICS Guides into account, which required the appellant to inform the Pristine of the nature of the cargo when the transfer was about to begin, all the more the acts of the appellant fell short of the standard of care required of it: at [44] and [47].

(5) The position of the appellant's vessel and the respondent's tanker was as proximate as could conceivably be. The situation here could hardly be any different from the case where there was a collision between two vessels, causing physical damage to either or both vessels. It was beyond argument that the act of transferring the contaminated cargo from the Sunrise Crane to the Pristine was an act which directly affected the respondent: at [50].

(6) The majority of the court, who had sight of the draft of Prakash J's dissenting opinion, agreed with what she had stated on the issue of the limitation of liability: at [51].

Per Judith Prakash J (dissenting):

(7) In order for a shipowner to rely on the limitation of liability provided by s 136 Merchant Shipping Act, he had the onus of proving that the loss or damage caused by the negligent navigation or management of his ship took place without his “actual fault or privity”. The threshold for a defendant to cross before a defendant could avail himself of the limitation defence was very high. In order to establish that its own fault did not contribute to the loss, the appellant had to show that it had an efficient system of management of the vessel that ensured that, at the least, the standard industry practices for dealing with dangerous cargoes were implemented. The appellant did not give any evidence as to the management system which it had adopted to ensure that the vessel had implemented and followed industry standards of practice in relation to the handling of chemical cargo: at [94], [95], [98] and [99].

(8) Over the years, the courts had whittled down the protection available to a shipowner from the International Convention Relating to the Limitation of Liability of Owners of Seagoing Ships 1957 and s 136 of the Merchant Shipping Act and the protection it offered to shipowners was, largely, illusory. It was time to consider ratifying the Convention on Limitation of Liability for Maritime Claims 1976 and amending s 136 of the Merchant Shipping Act accordingly: at [101].

Bamfield v Goole and Sheffield Transport Company Limited [1910] 2 KB 94 (refd)

Beckett v Newalls Insulation Co Ld [1953] 1 WLR 8 (folld)

Brass v Maitland (1856) 6 EL & BL 470; 119 ER 940 (refd)

Caparo Industries Plc v Dickman [1990] 2 AC 605 (folld)

Dominion Natural Gas Co Ld v Collins [1909] AC 646 (folld)

Donoghue v Stevenson [1932] AC 562 (folld)

England, The [1973] 1 Lloyd's Rep 373 (folld)

Eurysthenes, The [1976] 2 Lloyd's Rep 171 (folld)

Hodge & Sons v Anglo-American Oil Company and DT Miller & Co (1922) 12 Ll L Rep 183 (distd)

Holmes v Ashford [1950] 2...