The plaintiff is the owner of the Duzgit Venture, a tanker vessel of 2,166 tons which delivers oil and gasoline to Tonga. On 20 January 2019, as the vessel approached the Port of Nuku'alofa, the starboard anchor and chain were prematurely released from their housing. As the anchor and chain were being winched back in, a cable was observed caught in the anchor. The cable was one of two undersea communications cables owned by the defendant connecting Nuku'alofa, Ha’apai and Vava’u within Tonga with Suva in Fiji. Ropes were used to remove the cable from the anchor. The defendant alleged that the incident caused damage to the cables of USD 1,237,890.06. At the time, internet services throughout Tonga were disrupted for approximately two weeks. No other persons or entities have yet made any claims on the plaintiff.

On 20 December 2019, the plaintiff commenced proceedings by writ and statement of claim. The plaintiff sought a declaration that its liability for the incident was subject to limitation pursuant to s 2 of the Shipping (Limitation of Liability) Act 1980 (the SLLA). The Schedule to the SLLA reflects the terms of the LLMC 1957. The Schedule provides formulae by which to calculate a shipowner's maximum liability for property and personal claims by reference to the tonnage of the ship multiplied by various amounts of francs. By application of the relevant formula here, the limit of liability under that Convention is TOP 859,403.82 plus interest.

The plaintiff pleaded in the alternative that if the LLMC 1957 did not apply, its liability would be limited pursuant to s 3 of the Shipping Act 2016 (rev ed Cap 48.18) which incorporates the LLMC 1976 and Protocol of 1996. By application of the relevant formulae in that Convention, the maximum liability for all claims would be TOP 3,348,496.

After a number of interlocutory processes, the parties agreed that, if the plaintiff’s liability were to be limited, the LLMC 1957 with its lower maximum liability would apply. On 21 February 2020, orders were made to that effect: see CMI783.

On 14 February 2020, and in accordance with s 7 of the SLLA, the plaintiff established a limitation fund by filing a letter of undertaking (LOU) on behalf of the plaintiff’s insurer, the Britannia Steam Ship Insurance Association Ltd, by which the insurer undertook to pay the aggregate of all claims arising from the incident up to the limit of liability. On 21 October 2020, and following the determination on the applicable Convention, the plaintiff filed an updated LOU by which the insurer undertook to the Court to pay any sum which was finally ordered by the Court (or the Court of Appeal) to be paid by way of distribution from the limitation fund to any person bringing a claim arising from the incident up to a total liability not exceeding TOP 952,407.70, inclusive of interest.

Where a limitation decree is issued, ss 6 and 7 of the SLLA require the Court to determine any claims by persons alleged to have suffered loss or damage as a result of the incident and to administer and distribute the limitation fund ratably among the claimants, in accordance with law and upon such terms as the Court may direct. Pursuant to the same provisions, and the applicable procedural rules, the defendant’s claim was stayed pending determination of the application for a limitation decree.

Held: The plaintiff’s application for a decree of limitation of liability pursuant to s 2 of the SLLA is granted. The terms of the decree, requirements for advertising thereof and further directions are set out in a separate order accompanying this ruling.

In order for its liability to be limited, the plaintiff must demonstrate that the incident was not caused by any 'actual fault or privity' on the part of the owners of the vessel. In that regard, the plaintiff pleaded that:

(a) on 20 January 2019, as the vessel approached the port of Nuku'alofa, the master was requested by the pilot to proceed to anchor at the inner anchorage in the port so that the vessel could be moved to berth on the opening of the port, early on 21 January 2019;
(b) as the vessel approached the anchorage, the crew members making up the anchor team were instructed to move forward to make the starboard anchor ready;
(c) as the crew members approached the starboard anchor housing, they heard banging on the side of the ship ;
(d) from the bow, the crew saw that the banging was being caused by the anchor chain hitting the ship's hull; and
(e) the starboard anchor and chain had released from its housing.

In its statement of defence, the defendant denied the plaintiff's entitlement to limitation of liability and alleged that the damage to the cables was caused by the plaintiff's actual fault and negligence. Particulars of those allegations were not provided. However, in its counterclaim, the defendant particularised its allegation of negligence as:

(a) permitting or causing an anchor to be dropped in the vicinity of (the cables);
(b) failing to properly secure the anchor on the vessel;
(c) failing to take any or any proper or effective measures to ensure that the vessel’s anchor was secured;
(d) failing to implement procedures to positively confirm that the vessel’s anchor was secured for sea with mechanical devices for that purpose carried by the vessel; and
(e) failing to ensure that the vessel was not dragging its anchor within the location of the cables.

The defendant subsequently discontinued its defence.

Having carefully considered the plaintiff’s, now unchallenged, affidavit evidence, the Court was satisfied on the balance of probabilities that:

(a) the incident was likely to have been caused by a failure in compliance by crew with the procedure for securing the anchor in question when the vessel departed Fiji;
(b) subsequent adverse weather, sea and swell conditions caused a pin in the chain stopper to dislodge and the chain stopper raised with the movement of the vessel;
(c) the forces caused the wire lashing or windless brake holding the anchor to break;
(d) at some point during the voyage, most likely upon arrival at Nuku'alofa, the anchor securing wire failed, the winch brake could not hold, and the anchor released;
(e) the anchor systems were of a standard design;
(f) prior to the incident, the anchor systems had been properly maintained;
(g) the safety management system provided a good procedure for securing anchors;
(h) there was no record of any previous problem or issue with the relevant anchor system prior to the incident; and
(i) records of survey inspections and maintenance for the vessel were all in order.

The Court was therefore satisfied, for the purposes of s 2 of the SLLA, that the incident took place without any 'actual fault or privity' on the part of the plaintiff as the registered owner of the vessel. Accordingly, the plaintiff was entitled to the limitation of liability provided for by the Act and the LLMC 1957.