Case citation: Imperial Marine Company v Pasquale della Gatta; Imperial Marine Company v Filippo Lembo (638/10) [2011] ZASCA 131 (15 September 2011)- Supreme Court of South Africa
Deviation- off-spec bunkers- engine damage- expert evidence- performance claims- prima facie case
This brief post does not aim to address the various claims advanced in detail but focuses exclusively on the performance claims and the observations made in relation to expert evidence (which can be helpful). Nevertheless, the other claims remain of general interest and warrant consideration by readers.
The issues related to the arrest of two vessels as security for claims pending arbitration in London, following disputes under a long-term time charter party on NYPE form.
A dispute arose in 2005 when the vessel suffered damage to its main engine and underwent repairs at Pylos, Greece. For the first two years under charter, there appear to have been no significant problems. The present disputes originate with the provision by Charterers of a bunker stem at Yeo Su, Korea on 4 March. The vessel then sailed for Dampier in Australia and started burning these bunkers. Whilst the vessel was en route to Port Hedland the chief engineer received a report that the bunkers delivered in the first bunker stem at Yeo Su were not in accordance with specification. This is accepted as correct, at least insofar as the Kineamatic viscosity of the bunkers is concerned. The engineer’s response was to stop burning those bunkers and to switch to others. The unwillingness to use the initial Yeo Su bunker stem meant that when the vessel left Port Hedland it had insufficient bunkers to reach its destination at Redcar in the United Kingdom and it accordingly diverted to Colombo in Sri Lanka to take on additional bunkers. Its onward route was via Suez where there was a brief stoppage because of engine problems. Shortly thereafter it became apparent that the main engine had suffered major damage and required repairs. The evidence showed that the vessel continued to operate under the charterparty after the repairs had been undertaken at Pylos. No complaint was made of any malfunctioning of the engine or under-performance arising from its operating with repaired cylinder blocks.
Charterer claims that the reason for the breakdown in the main engine was a failure on the part of Owners to fulfil its obligations to provide a vessel with its machinery and equipment in a thoroughly efficient state and its further obligation to maintain it in such state. It accordingly contends that the detour to Colombo was an improper diversion and that the vessel was off-hire during that period as well as the periods of the breakdown at Suez and repairs at Pylos.
Owners disputed these claims. It laid the blame for the damage to the main engine on the first Yeo Su bunker stem, which led to the vessel burning bunkers with excessive viscosity. It accordingly counterclaimed for the unpaid hire and the cost of the repairs to the main engine at Pylos. Over and above this it claimed an unspecified amount for the diminution in the value of the vessel arising from the manner in which the repairs to the engine’s cylinder blocks were undertaken.
Observations on expert opinion ( see Paras 24-26)
Where the applicant asks the court to draw factual inferences from the evidence they must be inferences that can reasonably be drawn from it, even if they need not be the only possible inferences from that evidence. If they are tenuous or far-fetched the onus is not discharged. Second the drawing of inferences from the facts must be based on proven facts and not matters of speculation. As Lord Wright said in his speech in Caswell v Powell Duffryn Associated Collieries Ltd:
‘Inference must be carefully distinguished from conjecture or speculation. There can be no inference unless there are objective facts from which to infer the other facts which it is sought to establish … But if there are no positive proved facts from which the inference can be made, the method of inference fails and what is left is mere speculation or conjecture.’7 (citation [1939] 3 All ER 722 (HL) at 733E-F, cited in Motor Vehicle Assurance Fund v Dubuzane 1984 (1) SA 700 (A) at 706B-D. See also Great River Shipping Inc v Sunnyface Marine Limited 1994 (1) SA 65 (C) at 75I-76C and particularly the statement that ‘evidence does not include contention, submission or conjecture.’)
In a trial action, it is fundamental that the opinion of an expert must be based on facts that are established by the evidence, and the court assesses the opinions of experts on the basis of ‘whether and to what extent their views are founded on logical reasoning’.8 ( citation- Michael & another v Linksfield Park Clinic (Pty) Limited & another 2001 (3) SA 1188 (SCA) para 36 and generally paras 34 – 40)
If not then the expert’s opinion is worthless because it is purely hypothetical, based on facts that cannot be demonstrated even on a prima facie basis. It can be disregarded. If the relevant facts are established on a prima facie basis then the court must consider whether the expert’s view is one that can reasonably be held on the basis of those facts. In other words, it examines the reasoning of the expert and determines whether it is logical in the light of those facts and any others that are undisputed or cannot be disputed. If it concludes that the opinion is one that can reasonably be held on the basis of the facts and the chain of reasoning of the expert the threshold will be satisfied. This is so even though that is not the only opinion that can reasonably be expressed on the basis of those facts. However, if the opinion is far-fetched and based on unproven hypotheses then the onus is not discharged.
Performance claims (see para 77)- without guarantee- “standard system”?
There were a number of performance claims based on allegations that the vessel was at various times and on various voyages not able to steam in accordance with the speed and consumption figures given in clause 62 of the charterparty. The first problem with these claims is that these figures were given subject to certain weather and sea conditions and without guarantee. They are advanced in the draft amended points of claim on the basis of an allegation that ‘the vessel failed to achieve the performance warranted under clause 62 of the charterparty’. However there was no guarantee. Most of the claims were not included in the charterer’s provisional final hire statement. They were based on what was said to be a standard system of measurement of the performance of vessels but no basis was laid for its application to this charterparty and these voyages. In addition the vessel appears to have been under sub-charter during the voyages in question and there is no evidence that the sub-charterers advanced such claims, nor any response to the statement by Imperial Marine’s attorney that the sub-charters contained the same performance figures on a back to back basis. In my view no prima facie case was established in respect of these claims and counter-security should not have been ordered in respect of them.
Editors’ comment: regarding the reference to a “standard system of measurement of the performance of vessels,” it remains unclear which system the charterers relied upon, as no supporting evidence was submitted.
The featured picture is indicative and unrelated to the ship in the case