Sea-Tow Ltd v Grey District Council (CA)

IN THE COURT OF APPEAL OF NEW ZEALAND
CA 146/99

BETWEEN
SEA-TOW LIMITED
Appellant

AND
GREY DISTRICT COUNCIL
Respondent

Hearing: 18 May 2000
Coram: Richardson P, Gault J, Tipping J
Appearances: P R Rzepecky and J M Swan for Appellant
D J White QC and J N Burton for Respondent
Judgment: 15 June 2000

Judgment of the court delivered by TIPPING J

Introduction

[1] Early on the morning of 25 August 1995 a large barge owned by the appellant, Sea-Tow, broke from its moorings at the port of Greymouth. The port is operated by the respondent, the Grey District Council (the Council). The barge was swept down the Grey River, across the bar and ended up partially stranded on Cobden Beach. As a result of the fortuitous catching of its anchor on some obstruction, the barge was not fully stranded and was able to be towed off the beach the next day. It was then towed to Whangarei via Picton and underwent repairs. Sea-Tow sued the Council for damages alleging that an eye socket, which was part of the mooring facility which gave way, had been constructed in a negligent manner. The Council counter-claimed for the damage it had sustained, alleging that the barge had been improperly moored in various respects. In the High Court at Greymouth Panckhurst J found the Council liable but held that Sea-Tow had been guilty of 40% contributory negligence. Sea-Tow has appealed the contributory negligence finding and the Council has cross-appealed the finding of liability made against it. It is convenient to address the latter point first. If the Council is not liable at all, the question of Sea-Tow's contributory negligence falls away.

Background circumstances

[2] Sea-Tow is a tug and barge operator. As part of its business it tows barges filled with coal from Greymouth to Whangarei. The coal is used to fire the kilns of a cement manufacturer. The barges are not self propelled. They are towed by sea-going tugs. The barge in question "Sea Tow 17" is 73 metres long, and nearly 19 metres wide. The port of Greymouth is situated near the mouth of the Grey River. It caters mainly for the fishing industry. Sea-Tow's barges are the largest vessels to use the port facilities. The normal practice is to moor the barges facing down-stream while the coal is loaded. The barge can then be towed straight out to sea rather than having to turn fully laden in the river.

[3] Sea Tow 17 arrived off the Greymouth bar at 8am on 24 August 1995 towed by the tug Sea Tow 22. The vessels crossed the bar and entered the river. The barge was turned so as to face down-stream and was then tied up to the wharf. 3000 tonnes of coal were loaded during the course of the day. Loading ceased late in the afternoon. The weather had been deteriorating and there was the possibility of heavy rain in the Grey River catchment. The Master, Mr Larry Roberts, was concerned about the possibility of a fresh. A fresh is an increased flow of water coming down the river as a result of rain falling in the catchment. It was by now too late for the vessels to cross the bar on departure from Greymouth, so it was decided that the barge would remain moored for the night at the wharf. The tug was tied up in a nearby lagoon. The barge was secured to wharf bollards by 8 lines of varying types. In ordinary circumstances this would have been sufficient.

[4] But because of the Master's concern at the weather conditions, and the possibility of a fresh, he decided to take the additional precaution of tying up to a deadman. This type of mooring facility comprises a solid object buried in the ground with a point of connection attached to it to which a mooring line or chain can be secured. The anchor chain was secured to the nearest deadman, known as the hardwood deadman. Further away there were two other deadmen, described as the concrete deadman and the railway carriage deadman. The hardwood deadman comprised a large hardwood beam buried in the ground to which was attached a wire rope. The wire rope came to the surface where there was an eye socket which provided a point of connection. As it was not feasible to remove the anchor from its chain, the barge's anchor was transported to the hardwood deadman by a crane on the wharf. The end of the chain was then shackled to the eye socket.

[5] This operation involved two employees of the Council. First there was the crane driver, Mr Manning, who assisted with his crane. The second employee was the harbour supervisor, Mr Trounson. He knew what was happening and helped by carrying the shackle pin which was necessary to make the coupling. Mr Trounson was not concerned that the barge was being moored to the hardwood deadman as opposed to one of the other deadmen. He did not believe a fresh was imminent nor did he make any suggestion that the hardwood deadman would not be safe if a fresh did occur. And if the barge was to moor to one of the other deadmen, the anchor and chain would have to be shifted by front-end loader because these other two deadmen were outside the reach of the crane. A front-end loader was not available.

[6] Despite the use of the deadman the Master took additional precautions for the safety of the barge. He arranged for the crew to take shifts as watchmen during the night. His own shift ended at midnight. At this point Mr McNish, the cook, who was also an experienced deckhand, took over. At the end of his watch the Master noted in the log that there was steady drizzle, and a fresh, constant at approximately 6 knots. This was not a particularly high flow. At this point the Master had no concerns for the safety of the barge.

[7] At about 1am Mr McNish left the barge and went to the tug to get a cup of coffee and report to the Master that all was well. When he returned to the barge at about 1. 30am, it was not there. He went back to the tug and raised the alarm. The tug immediately put out into the river. The barge was seen at the river mouth confronting huge surf. It then made its way across the bar and rounded the north mole heading towards Cobden Beach. The tug could not safely cross the bar and returned to the lagoon. The barge duly arrived at Cobden Beach as earlier described.

[8] Sea-Tow's claim was for $868,370. 00 which included $97,199. 00 for loss of use. The Council's counter-claim was $27,722. 00. There was no quantum issue at the trial on either side.

The High Court decision

[9] Panckhurst J considered a substantial volume of evidence addressed to the competing views as to why the mooring system had failed. Sea-Tow's contention was that the eye socket had failed first, and this had produced additional pressure on the other lines which had successively failed. The Council, on the other hand, contended that the whole mooring system adopted by Sea-Tow was ill-advised and that a line at the stern designed to hold the barge against the wharf had been the first to fail, leading to successive failures elsewhere. The Judge found that the eye socket failed first and this had led to the failure of the other mooring lines.

[10] It was not in dispute on the appeal that the failure of the eye socket was the initiating cause of the mooring failure. The Judge was satisfied that the eye socket failed because it was poorly made and of inadequate strength. The mode of manufacture of the socket was contrary to good practice. It had probably been made by Council employees themselves rather than by an external engineering firm. The socket should have been of at least the same strength as the wire itself which had a breaking strain of 70 tonnes. The wire used to construct the hardwood deadman had previously been used to support the boom of a crane. A twin wire on the crane had failed. This had placed a shock load on the wire which may well have weakened the socket. The Judge found that the eye socket broke at a pressure of between 30 and 35 tonnes. The probable drag force on the barge at the time was of the order of 35 tonnes. No precise calculation could be made given the lack of information as to the exact river flow and the build-up of debris against the stern of the barge. The estimated flow was about 8 knots.

[11] After considering a substantial volume of evidence on the point, the Judge determined that the safe working load of the deadman was 28 tonnes. The preponderance of the evidence suggested the appropriate formula for establishing the safe working load was 2:5, ie. 40% of the breaking point of the wire rope. 40% of 70 tonnes is 28 tonnes. Hence this was what is described as the safe working load of the hardwood deadman. On this basis the deadman was subjected to pressure greater than its subsequently established safe working load. The deadman would not however have failed had the eye socket been properly attached to the wire rope. In addition the Judge observed that by definition a safe working load contains "a healthy margin" to cover the unexpected. On that basis the Judge concluded that the eye socket should not have failed under a force not greatly above the safe working load of the wire rope.

[12] Following a review of all the evidence the Judge concluded that the Council had failed to provide safe wharf facilities. The harbour supervisor, Mr Trounson, had been present and was actually involved in making the connection between the anchor chain and the deadman. The eye socket had failed when subjected to a load which, although above its safe working load, ought to have been well within its capacity. It must also be observed that the safe working load of the deadman was established after the event. Sea-Tow had no reason to believe that the deadman to which the barge was being attached, would not be able to take the weight likely to be placed on it in the conditions which were anticipated.

[13] Having concluded that the failure of the eye socket was the precipitating cause of the failure of the whole mooring system, the Judge held that while some other features of the system adopted by Sea-Tow could have been improved those features were in no way causative of the failure of the whole system. In essence the system adopted by the Master was satisfactory and would have been successful if the eye socket had not been defective. The Judge therefore found the Council liable but came to the view that Sea-Tow had been contributorily negligent, not on the basis of any deficiency in the mooring system for which it was responsible, but on the basis that if the barge had been moored to either of the other two deadmen, it would not have broken away. The contributory negligence found by the Judge was not that of the Master, but rather of Sea-Tow's management in not briefing the Master about the availability of the other two deadmen. The Judge was of the view that had the Master known of the other two deadmen, he would have been negligent in using the hardwood deadman when the other two had higher safe working loads (35 tonnes for the railway carriage deadman and 40 tonnes for the concrete deadman). On this basis the Judge found Sea-Tow 40% responsible for what had happened.

The Council's duty

[14] It was of the essence of Mr White's argument for the Council that as the hardwood deadman had been subjected to a load higher than its safe working load, the Council was not in breach of its duty of care to Sea-Tow. Put another way, the argument was that as the Council's duty was to take reasonable care to ensure the safety of the berth or, alternatively, to give an appropriate warning, the Council had fulfilled its duty by providing the three deadmen, and its duty of care did not require it to provide facilities beyond the safe working loads of the individual deadmen. It was contended that as the trial Judge had found that the failure of the defective eye socket was the precipitating cause of the mooring failure, and this had occurred when the deadman was subjected to a force in excess of its safe working load, the mooring failure and the consequent damage to the barge was not caused by any breach of the Council's duty. We consider that this approach takes an inappropriate view of the Council's obligations. The Council was offering its mooring facilities for hire to those who wished to use them, and to Sea-Tow in particular. Its duty to provide safe mooring facilities arose in both contract and tort but there is for present purposes no relevant distinction to be drawn between the two causes of action.

[15] In the circumstances the Council's duty was to take reasonable care to provide safe mooring facilities for all vessels which it invited or permitted to use those facilities, in this case the hardwood deadman. The involvement in the mooring process of the Council's harbour supervisor, Mr Trounson, and the crane driver, Mr Manning, demonstrates clearly that Sea-Tow through its Master was both permitted and implicitly invited to use the hardwood deadman. The Council therefore owed Sea-Tow a duty to take reasonable care in respect of the hardwood deadman which it was implicitly indicating was safe for Sea-Tow's barge to use in the circumstances which prevailed. The deadman would indeed have been safe had it not included a negligently manufactured part-the eye socket. We cannot accept that the Council fulfilled its duty of care simply by having available the other two deadmen. This aspect will be discussed more fully when we address the contributory negligence issue.

[16] The contention implicit in Mr White's argument was that the duty resting on the Council to take reasonable care did not require the Council to provide Sea-Tow with wharf facilities strong enough to cope with any demands placed on them beyond their safe working load. We are unable to accept that contention. It is quite clear that at the time no-one either on Sea-Tow's side or on the Council's side knew what the safe working load of the hardwood deadman was. Mr White's argument asks us to approach the case as if the Council had given a warning to Sea-Tow that as the safe working load of the hardwood deadman was only 28 tonnes it would be unwise to use it. In reality the converse applied. Mr Trounson, believing the hardwood deadman to be safe for the barge in the conditions expected, actually assisted Sea-Tow to tie up to it. That he had less concern for the likelihood of a fresh in the river than the Master seems beside the point. All would have been well had the eye socket been properly constructed. The fact that the Judge found that the hardwood deadman had been subjected to a force in excess of its safe working load is in the circumstances of no assistance to the Council. The Judge also found that the deadman would have taken the strain had the eye socket been sound and rightly held that its failure was the essential cause of Sea-Tow's loss.

[17] The Canadian cases cited by Mr White are of no assistance to the Council in the circumstances of this case. The correct analysis is really very simple. The Council owed Sea-Tow a duty to take reasonable care to provide it with safe wharf facilities. It was in breach of its duty in relation to the eye socket. The eye socket failed, causing the barge to break away from its mooring. Sea-Tow had no reason to think that the hardwood deadman was inadequate for the anticipated conditions or that it was being overloaded. The fact that it could be said, after the event, that the deadman had been subjected to a force above its safe working load does not mean that the Council fulfilled its duty of care or, conversely, was not in breach of that duty. The Council's cross appeal on liability must therefore be dismissed.

Contributory negligence

[18] The Judge found Sea-Tow guilty of contributory negligence on the following basis:

. . . . In my view Sea-Tow's Masters should have been briefed as to the deadman options. Any proper assessment of those options would in the circumstances have prompted an election to use the concrete deadman. . . .

[19] Sea-Tow appeals that conclusion on two bases. The first is that the Judge's finding of negligence by Sea-Tow's management in failing to brief the Master was unjustified because such negligence was never an issue in the case. The second is that in any event the Judge was not justified in concluding that any such negligence by Sea-Tow's management had any causative effect on the loss. We consider there is force in the first point but do not propose to explore it further in the light of our conclusions on the second. The proposition adopted by the Judge was that Sea-Tow's management should have informed their Masters, and specifically Mr Roberts, that there were three deadmen to choose from, and, implicitly, should have given them clear advice as to their locations.

[20] It is apparent from an earlier passage in his judgment that the Judge saw the essence of the allegation of contributory negligence which he found established as being that:

. . . Sea-Tow was at fault by using the hardwood deadman on the relevant night. Two alternative deadmen were available. It was suggested that one of these should have been used.

[21] The Judge then proceeded to make reference to a letter written by Sea-Tow to the Council in June 1991 suggesting "operational parameters" for safe navigation in the port at Greymouthfor its coal barges. One of the proposals was that "adequate bollards be provided to enable the barge to secure alongside in up to 10 knot flood". The Council mounted an argument in this Court that by writing a letter in these terms, and making reference to "adequate bollards" Sea-Tow was acknowledging an awareness of some inadequacy in the existing facilities, and in particular the hardwood deadman which had been installed in 1988. The concrete deadman was completed in 1992, and the railway carriage deadman in 1994, the latter to meet the requirement of a larger barge than Sea Tow 17. Hence it was said that after their completion, Sea-Tow should not have been using the hardwood deadman. We do not consider it reasonable to infer from the letter of June 1991 with its reference to "adequate bollards", an awareness on the part of Sea-Tow, that in some way or another the hardwood deadman was inadequate. The Council obviously did not think it was and in this light it is singularly unconvincing to suggest that Sea-Tow had or should have had such awareness.

[22] That aside, the real problem for the Council on this aspect of the case is that it by no means follows that if Mr Roberts had been briefed by his management as suggested, he would have used one of the other deadmen. The Judge saidthat he should have done so. That is by no means self-evident and the Judge did not expand on why that was so. In any event for the failure of Sea-Tow's management to brief Mr Roberts to be causative, it must be shown that had he received the briefing he would probably have used one of the other deadmen. The Judge did not so find and we consider the probabilities are the other way. The following passage in Mr Roberts' cross-examination by trial counsel (not Mr White) is of relevance:

Q. At the time you made the request for the crane to move the anchor were you intending to use what we now refer to as the Hardwood Deadman?

A. As I previously said sir I wasnt aware of the differences between one and another so having never used any deadman before I wasn't specifying any particular one.

Q. Did you have any discussions with the crane driver?

A. I had discussions with the crane driver, he informed us that the deadman in use was the deadman used by John Carruthers who is another master of Sea Tow, the most experienced master with Sea Tow at this time and at that time, having worked the river ports for some considerable time and had considerable experience with freshes both in Westport and Grey ports. I would trust his judgment based on that.

Q. Have you checked at any time with him that he had used the same deadman as you used?

A. For various reasons after the event court action and what have you . . . I have had no discussions with Mr Carruthers on any part of this event.

Q. Putting it the other way then, you have no reason to doubt that Mr Carruthers used the Hardwood Deadman for mooring Sea Tow 17 in fresh?

A. That was the information given to us by the crane driver and I have no reason to doubt that.

[23] It is apparent from this evidence that Mr Roberts thought he was tying up to the same deadman as that used by Mr Carruthers some 8 months earlier. As to that visit the Judge noted:

Mr Trounson gave evidence concerning a visit of Sea Tow 17 in January 1995. The master on that occasion was not Mr Roberts. During the course of loading a rain warning was received from NIWA. Loading ceased. The barge was tied up in anticipation of a fresh. The master, Mr John Carruthers, used the anchor chain as part of the mooring configuration. The anchor itself and the chain were carried by front end loader to the concrete deadman and the anchor reeved to the heavy metal bollard atop the deadman. Mr Trounson subsequently recorded in the harbour log book that the fresh on that occasion ran at 8 knots.

[24] Thus the Council in cross-examining Mr Roberts broughtout that had he been fully briefed about the three deadmen he would have thought that he was actually tying up to the concrete deadman used by Mr Carruthers. Had he been aware of the choice available, this is what he would have been led to believe by the crane driver. On that basis the briefing which the Judge considered should have occurred would have made no difference. The same disaster would have occurred.

[25] Mr White drew attention to the cross-examination of Mr Richards, the first mate, who said the conversation about Mr Carruthers and his use of the concrete deadman had been with Mr Trounson, not Mr Manning. This uncertainty about the identity of the speaker, does nothing to undermine the fact that whoever it was, a Council employee led Mr Roberts to believe he was tying up to the concrete deadman; this being the deadman Mr Carruthers had successfully used in a fresh earlier that year. The cross-examination proceeded on the basis that this information had been given to Sea-Tow. The only issue was who had given it.

[26] Towards the end of his submissions Mr White argued that Sea-Tow's management should have given its Masters more extensive instructions than those which the Judge considered should have been given. There was no evidence to suggest that such instructions were necessary to meet a reasonable standard of care. One aspect of such instructions should have been, in Mr White's submission, an instruction to its Masters to use one of the new deadmen if there was danger of a fresh. This is simply to adopt the wisdom of hindsight. It also goes well beyond any reasonable connotation of the pleadings.

[27] Returning to the Judge's proposition that Sea-Tow's management should have briefed its Masters "as to the deadmen options", we are of the view, as Mr Rzepecky contended, that the evidence provided no basis for the necessary further finding that such briefing would have averted the loss. We say this both for the reason indicated above, and because we are satisfied that in any event, having no reason to distrust the hardwood deadman and in the absence of a front end loader, it is likely that even if Mr Roberts had been aware of the existence and greater strength of the other deadmen, he would still have used the hardwood deadman, and indeed would have done so without fault. It is not as if the Council's harbour supervisor expressed the slightest concern over its use in the circumstances. While Mr Roberts was shown by the actions he took to be a competent and careful Master, it is unconvincing for the Council to assert that despite its own lack of concern, Mr Roberts would or should have been sufficiently concerned to insist on the use of one of the alternative deadmen. For these reasons we are unable to agree with the Judge that Sea-Tow was guilty of any operative contributory negligence. Even if Sea-Tow's management were negligent, as alleged, such negligence was not shown to have contributed causally to Sea-Tow's loss. Hence Sea-Tow's appeal must be allowed.

Formal orders/costs

[28] The appeal is allowed and the cross appeal is dismissed. We direct that the necessary consequential amendments be made to the judgments entered in the High Court on the claim and the counter claim. There will also need to be consequential amendments to costs in the High Court. If the parties cannot reach agreement, those matters are to be dealt with in the High Court. The appellant Sea-Tow is awarded costs in this Court in the sum of $5,000 together with all proper disbursements including the reasonable travel and accommodation expenses of one counsel, to be fixed if necessary by the Registrar.

Solicitors:
McElroys, Auckland, for Appellant
Izard Weston, Wellington, for Respondent