Mobil Oil Australia Pty Ltd v Kiribati Ports Authority [2011] KIHC 29; Civil Case 127.2010 (1 July 2011)

IN THE HIGH COURT OF KIRIBATI
CIVIL JURISDICTION

High Court Civil Case 127 of 2010

Held at Betio
Republic of Kiribati

Between:

Mobil Oil Australia Pty Ltd
Plaintiff

And:

Kiribati Ports Authority
Defendant

BEFORE: Hon Sir John Muria CJ

Mr Banuera Berina for the Plaintiff
Mr Monoo Mweretaka for the Defendant

Date of Hearing: 1 June 2011

JUDGMENT

Muria CJ: Who pays for the wharfage dues? This is one of the issues raised by agreement between the parties for the Court to answer in this case.

The plaintiff has brought a claim against the defendant claiming damages for unlawful and unjustified detention of its chartered vessel "MT Heracles" (the vessel). The amounts and particulars of damages claimed are set out in the Statement of Claim. The Court need not concern itself with the quantum of damages claimed at this stage, since it is only required to answer two legal questions, one of which is set out above.

Before I deal with the questions asked, it would be helpful to briefly ascertain the circumstances giving rise to the detention of the vessel in this case. The vessel, having delivered fuel at Kiribati Port at Betio on or about 5 August 2010, was detained by the defendant, Kiribati Port Authority, for about 6.5 hours. The reason for the vessel's detention was non-payment of wharfage dues by the carrier (vessel or its owner or agent). The defendant took the action of detaining the vessel because it or its agent in Tarawa failed to settle two outstanding invoices of wharfage dues from previous trips payable to the defendant.

The plaintiff is adamant that it was not liable to pay the wharfage dues but that Kiribati Oil Company Limited (KOIL), the owner of the goods (fuel) who should pay the wharfage. The dispute, as already stated, led to the defendant action in detaining the vessel.

Legal provisions

The defendant relies on sections 22 and 25 of the Kiribati Port Authority Act, 1990 (the 1990 KPA Act). The two sections provide as follows:-

22. Receipts for dues and rates shall be given to the person paying them, and any vessel in respect of which such receipt is not produced, when demanded by a duly authorized employee of the Authority, may be detained until such receipt is produced or other satisfactory proof of payment has been given.

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25. Notwithstanding the provisions of any other written law, if the Authority gives to any public officer whose duty it is to grant clearance of any vessel a written notice stating that an amount therein specified is due in respect of dues or rates levied under this Act in respect of that vessel, he shall not grant such clearance until the amount due has been paid or has been secured to the satisfaction of the Authority.

The 1990 KPA Act establishes the Kiribati Ports Authority ('the Authority') and confers powers and functions on the Authority to administer, regulate, manage and maintain the ports in Kiribati. Along with such powers and functions, the Authority is authorized to levy dues and rates for the use of its facilities, including the wharf.

It is worthy of note that the dues and rates specified in Part V – (DUES AND RATES) – are to be levied on "every vessel" berthed at a wharf, in a port and discharging goods within the port or the approaches to the port. See Sections 17, 18 and 19. In section 17, the dockage dues "shall be levied by and paid to the Authority on every vessel" berthed at a wharf. In section 18, the port dues "shall be levied by and paid to the Authority on every vessel" in port, whether plying for hire or otherwise. Section 19(1) provides:

"(1) Dues known as wharfage dues shall be levied by and paid to the Authority in respect of goods landed or discharged within a port (including a wharf not belonging to the Authority or under its control) or the approaches to a port".

The contention by Mr Berina of Counsel for the plaintiff is that the emphasis in sections 17 and 18 is on the "vessel" on which the dues are levied. In section 19, Counsel argued, the dues are levied "on the goods" and as such they are payable by the consignee who is the owner of the goods. In the present case, says Counsel, the owner of the goods (fuel) is Kiribati Oil Company Limited who were liable to pay the wharfage dues and had been in default. Thus, submitted Counsel, it was wrong for the defendant to detain plaintiff's vessel in this case.

Mr Mweretaka of Counsel for the defendant on the other hand contends that the wharfage dues in this case should be paid by the carrier or its agent. The emphasis, says Counsel, is on the levy of dues on "all vessels" berthed at the wharf or in port and discharging goods. Counsel relies on paragraph D at page 3 of the Betio & Kiritimati Port Dues, Fees and Tariff 01/07/2010 which provides:

"D. Wharfage Dues

Dues known as wharfage dues shall be levied on goods landed or discharged by all vessels including all commercial waa-uoaa within the port (including wharf not belong to the Authority or under its control) or the approaches to a port. When goods are handled by KPA, they will be charged $10.00 per m3/tone. When handled by carrier, the charge will be $3.50 per m3/tone to all vessels and $2.00 per m3/tone to commercial waa-uoaa.

Mr Mweretaka further submitted, however, that even if the wharfage dues were to be paid by the consignee (KOIL) who was the owner of the goods, it has failed to do so. Consequently, sections 22 and 25 of the KPA Act empowered the defendant to detain the vessel in this case.

The arguments put forward by both Counsel are powerful. However, consonant with the provisions of the KPA Act and the rules of practice and procedures as envisaged in the Betio & Kiritimati Dues, Fees and Tariff, the submission by Counsel for the defendant must be preferred for the following reasons.

First, the liability for wharfage attaches when a vessel makes use of a wharf to aid in discharging her cargo. In this regard, the words of Mansfield CJ are apt:

"A duty for wharfage ...... cannot be due where the party has not had use of the wharf ....... Wharfage is due for landing on the wharf":

Stephen –v- Costor 3 Burr 1415.

Similar remarks were also made by Dunedin L.P. in Seafield –v- Mac Brayne 43 Sc. LR 711. Thus any vessel which anchors or berths at port and discharges or unload its cargo is liable to pay wharfage forthwith for the use of the wharf.

Secondly, the liability to pay must first fall on the vessel, since the consequence of the default in payment is the detention of the vessel as authorized by sections 22 and 25 of the 1990 KPA Act. The vessel knows the quantity, weight or measure of the cargo it is carrying to the importer or to be discharged. It is therefore in a position to assess the amount of wharfage to be collected from it by the wharfinger upon arrival and discharge of the goods at the wharf. The collection of the wharfage must be guaranteed by the vessel, her owners or operators. That guarantee, in the present case, was deemed to be given by the acceptance and acknowledgment of the use of the defendant's facilities by the vessel and its owners or operators.

There is of course an alternative mode of payment available and which is envisaged in section 22 of the 1990 KPA Act referred to above. The vessel in this case could have avoided detention if it had shown "other satisfactory proof of payment" of wharfage had been made. The words "other satisfactory proof of payment has been given" in the section envisage that wharfage can be collected from some other persons, one of which is the owner of the goods. Thus payment of wharfage from owner of the goods directly in lieu of collection from the vessel is permitted under section 22. But failure to pay the wharfage by the vessel or other person (owners of goods), entitles the defendant to invoke its powers under sections 22 and 25 of the 1990 Kiribati Port Authority Act.

In the present case, the plaintiff has failed to pay wharfage demanded. Likewise the cargo owner (consignee) failed to pay even after the defendant requested it to pay the wharfage dues.

The second question asked is whether in the circumstances the defendant was justified in detaining the vessel. The answer to that question in this case is obviously in the affirmative.

The defendant's power to detain a vessel that anchors or berths at its port or wharf and discharges or unloads its cargoes cannot be doubted for failure to pay wharfage dues, whether such failure is on the part of the vessel, its owners, operators or agent, or by the owner of the discharged goods.

In the circumstances of this case, the defendant was justified in detaining the plaintiff's vessel on 5 August 2010 and lawfully did so.

The two questions posed are answered accordingly.

Dated the 1st day of July 2011

SIR JOHN MURIA
Chief Justice