The "Seaway"

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Note: the decision in this case has been upheld by the Singapore Court of Appeal, which held that the owners of The "Seaway" could limit their liability under both limbs of Section 136(1)(d) of the Singapore Merchant Shipping Act. For the case note on the Appeal Court's decision, click here

DMC/SandT/04/44
The "Seaway"
Singapore High Court: Belinda Ang J: [2003] SGHC 315: 30 December 2003
Rajah & Tann for Shell Eastern Petroleum
Gurbani & Co for owners of the "Seaway"
ADMIRALTY: VESSEL DAMAGED PRIVATE WHARF: WHETHER RIGHT TO LIMIT LIABILITY: WHETHER PRIVATE WHARF IS "PROPERTY" WITHIN SECTION 136(d) OF MERCHANT SHIPPING ACT: WHETHER RIGHTS INFRINGED THROUGH ACT OR OMISSION OF ANY PERSON IN THE NAVIGATION OR MANAGEMENT OF THE VESSEL
Summary
The "Seaway" collided with and damaged a wharf belonging to Shell Eastern Petroleum. Shell sued for negligence. The owners of the "Seaway" argued that they were entitled to tonnage limitation under section 136(1)(d) of the Merchant Shipping Act. Section 136(d) would apply if (1) the wharf was "property" within the meaning of that sub-section; or (2) Shell’s rights were infringed through the act or omission of any person in the navigation or management of the "Seaway". The court held that the wharf was not "property" under section 136(d), but concluded that the claim was an infringement of rights within the ambit of that sub-section.

DMC Rating Category: Developed

This Case Note was contributed by Ang & Partners, the Website’s International Contributors for Singapore

Facts
Shell Eastern Petroleum Pte Ltd owned an oil terminal in Pulau Bukom where there were berthing facilities. The "Seaway" collided with and damaged one of the wharves. Shell sued for negligence. While denying liability, the owners of the "Seaway" asserted a right to limit their liability based on the vessel’s tonnage, as provided for in section 136 of the Merchant Shipping Act.*

The Court was asked to address a preliminary point of statutory interpretation, as to whether the claim fell within the ambit of section 136(1)(d) of the Act as a claim for (1) loss or damage caused to any property (other than goods, merchandise or other things on board the ship, which comes under paragraph(b)); or (2) infringement of Shell’s rights through the act or omission of any person in the navigation or management of the "Seaway".

Judgment
1. When interpreting statutory language, courts had to strike a balance between the need for legal certainty and the need to give effect to the purpose of the legislation. While the text of the statute was of pre-eminent importance, it could not be understood in a vacuum. External aids such as the background to the statute and its legislative history could be employed. In this particular case, to read the word "property" in its plain and ordinary language as argued for (to include the wharf) would be to read it in a vacuum. The background to the legislation on limitation of liability was important, as the dispute concerned an international convention, that is, the Convention Relating to the Limitation of Liability of Owners of Sea-Going Ships, 1957 and the Singapore Government’s reservation of the right to exclude Article 1(c) of that Convention (which limited liability for removal of wrecks and damage to harbour works).

2. The judge noted that prior to 1981, shipowners were entitled to limit their liability for damage to harbour works under section 295(4) of the Merchant Shipping Act. In 1981, s.295(4) was deleted in its entirety. The judge rejected the Defendants’ argument that "harbour works" in s.295(4) applied only to publicly owned shore installations, whereas privately owned shore installations came within the meaning of s.295(1)(d) (now s.136(1)(d)). No distinction was made in Article 1(c) of the 1957 Convention and the repealed s.295(4) between private and public harbour works. It would defeat the manifest intention of Parliament to read s.136(1)(d) in isolation or in a vacuum, without regard to the amendments to s.295 in 1981. Therefore, since Parliament deleted s.295(4) in 1981, damage to harbour works, which included privately owned wharves, was excluded from limitation for liability.

3. On the other hand, the alternative limb in s.136(1)(d), where "any right is infringed through the act or omission of any person …" also covered the claim. The right was that of Shell not to have their property damaged. If that right was infringed, for example, when a ship contacted their jetty, thereby damaging it, Shell had a common law right to claim damages, and the corollary was that under s.136(1)(d), a shipowner could limit his liability when that right was infringed. The fact that the Defendants had not pleaded this ground was of no consequence as the Court was dealing with a preliminary issue. If, in respect of the same loss, the Defendants could bring themselves within the ambit of the other limb in s.136(1)(d), they ought to be allowed to do so.

Comments
* Section 136 reads as follows:
"(1) The owner of a ship shall not, where all or any of the following occurrences take place without his actual fault or privity: …
(b) where any damage or loss is caused to any goods, merchandise or other things whatsoever on board the ship; …
(d) where any loss or damage is caused to any property (other than any property mentioned in paragraph (b)) or any right is infringed through the act or omission of any person (whether on board the ship or not) in the navigation or management of the ship, … or through any other act or omission of any person on board the ship, ….
be liable to damages beyond the following amounts …."

 

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