Source: https://iclg.com/practice-areas/shipping-law/shipping-2017/new-zealand
Timestamp: 2018-01-18 05:39:45
Document Index: 504684289

Matched Legal Cases: ['art 8', 'art 22', 'art 20', 'art 24', 'art 25', 'art 32', 'art 25']

Shipping Law 2017 | Laws and Regulations | New Zealand | ICLG
Home Practice area Shipping Law New Zealand
New Zealand is a party to the 1910 Collision Convention which is implemented by the provisions of Part 8 of the Maritime Transport Act 1994 (“MTA”).
The 1972 Collision Regulations are given domestic effect pursuant to Maritime Rules Part 22 made under MTA and apply to New Zealand ships, including pleasure craft, worldwide, and to foreign ships, including pleasure craft, in New Zealand waters. Proof of breach of the Collision rules is tantamount to proof of negligence as the Regulations are considered to be the minimum required standard of seafaring practice.
The MTA and the Marine Protection Rules are the main legislative instruments that deal with pollution within New Zealand’s exclusive economic zone. The MTA and the Rules create strict liability offences in respect of the discharge of a harmful substance into the sea in New Zealand’s exclusive economic zone, or over its continental shelf. Both the master and the owner of a ship responsible for such a discharge will have potentially committed an offence. Case law has interpreted the definition of Owner to include a time charterer.
New Zealand is a signatory to the International Convention on Civil Liability for Bunker Oil Pollution Damage 2001 (“Bunker Oil Convention”), the Protocol Relating to Intervention on the High Seas in Cases of Pollution by Substances other than Oil (“Intervention Protocol”), the 1992 amended version of the International Convention on Civil Liability for Oil Pollution and Damage (“CLC Convention”) (but not yet the 2003 Fund Protocol), the International Convention Relating to Intervention On the High Seas in Cases of Oil Pollution Casualties 1969 (“Intervention Convention”) and annexes I, II, III, IV (in part) and V of the International Convention for the Prevention of Pollution from Ships 1973, as amended (“MARPOL”).
The MARPOL annexes noted above have been ratified by New Zealand and are incorporated in the Marine Protection Rules.
Within New Zealand’s 12-nautical-mile territorial sea, the Resource Management Act 1991 also applies to pollution. The Resource Management Act is a broad brush, and does not have a particular marine focus. Discharges of pollution into New Zealand’s territorial waters are strict liability offences with fines of up to NZD600,000 together with compensatory provisions.
It is likely that in 2017 or 2018, the New Zealand Parliament will ratify the Supplementary Fund Protocol, 2003.
New Zealand is a party to the International Convention on Salvage 1989, which is implemented as Schedule 6 to the MTA.
The few substantial salvage operations undertaken on the New Zealand coast have largely been on Lloyds Open Form, which is subject to English law. Since LOF requires the salvage award to be fixed by negotiation or arbitration, very few salvage awards have been determined by New Zealand Courts.
Basic concepts relevant to general average are set out in Section 66 of the Marine Insurance Act 1908. In New Zealand, a claim in respect of general average is a general maritime claim in the High Court’s admiralty jurisdiction.
Parties to shipping contracts in New Zealand are free to adopt the York-Antwerp Rules which, in practice, will apply in most cases.
Sections 33J–33L of the MTA permit a regional council to remove a wreck which is a hazard to navigation and to remove an abandoned vessel. Section 110 of the MTA permits the Director of Maritime New Zealand (“Director”) to order the removal of a vessel which is a hazard to navigation in cases where a regional council has no jurisdiction to order such removal.
Section 314(1)(a)(i) of the Resource Management Act 1991 gives regional councils the power to make and enforce orders prohibiting any contravention of their compulsory regional coastal plan. Section 15A of the Resource Management Act places restrictions on the dumping and incineration of waste or other material in a coastal marine area, and this Section has been used by regional councils to require the removal of wrecks on the basis that they have been “dumped” without a resource consent.
New Zealand has not yet signed the Nairobi Convention on Wreck Removal, but there are some indications that it will accede to the Convention in the near future.
From 1987 until 2013, New Zealand had a paraphrased version of the Convention on Limitation of Liability for Maritime Claims 1976 (“LLMC Convention 1976”). This proved unsatisfactory, and the 2013 amendments to the MTA simply gave the Convention text the force of law in New Zealand, and adopted the limits of liability set by the Protocol of 1996. The MTA now also provides that the amendments to the Protocol of 2012 (which again raise the limits of liability) can be incorporated into New Zealand law speedily by way of order in council. This occurred with effect from 8 June 2015. Currently, a bill is before the New Zealand Parliament, which, if enacted, will exclude the application of limited liability, under the LMCC, for wreck removal (Article 2(d) LMCC), for cargo removal (Article 2(e) LMCC) and for “damage” as defined in the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea 1996. However, this proposed law is in its early stages and may change as it is further considered.
Following the incorporation of the LLMC Convention 1976 into New Zealand law by the Maritime Transport Amendment Act 2013, the provisions of that Convention apply with respect to the establishment of limitation funds in New Zealand.
Under Part 20 MTA, the Director has powers under the Intervention Convention. In addition, an on-scene commander appointed by the Director or a Regional Authority has wide powers, following an oil spill (or “probable oil spill”), to give directions to the owner/master of the ship to take action and to direct third parties to assist, including powers to requisition ships and other property for use in the oil spill response.
The Director has extensive investigation powers, including entry, search, seizure and detention. In addition, the Transport Accident Investigation Commission (TAIC) has separate independent powers of investigation aimed at determining the causes and circumstances of marine accidents with a view to reducing the likelihood of such accidents recurring in the future. TAIC does not ascribe blame or carry out prosecutions.
Maritime New Zealand conducts prosecutions and vessel detentions relating to breaches of maritime legislation. Maritime New Zealand also inspects foreign and New Zealand commercial and fishing vessels to ensure compliance with International Maritime Conventions and domestic legislation.
The MTA incorporates the amended Hague Rules (as set out in schedule 5 to the MTA) into New Zealand law. New Zealand is not yet a signatory to the Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea (the Rotterdam Rules), and there is no indication that it is likely to sign this agreement in the near future.
The Carriage of Goods Act 1979 applies to the carriage of goods domestically by all methods of transport (including over water) and provides for limitation of the carrier’s liability. It does not apply to international carriage of goods.
As noted previously, New Zealand is a signatory to the LLMC Convention 1976, which is incorporated into New Zealand Law by the MTA.
With respect to international carriage of goods by sea, the Hague Rules are not modified by New Zealand law, and therefore apply.
Where domestic carriage is concerned, the Carriage of Goods Act 1979 limits the carrier’s liability to NZD2,000 per unit of goods, but this position can be amended by contract. From 1 September 2017, the Carriage of Goods Act 1979 will be repealed and then consolidated, in an updated form, in the Contract and Commercial Law Act 2017.
A shipper is under a common law duty not to ship dangerous goods (goods which are likely to delay the ship or cause harm to it or other cargo) without the agreement of the carrier. Further, the shipper will be responsible for any delay or damage caused by the cargo being shipped, unless the cargo has been properly declared to the carrier. Accordingly, in circumstances where the shipper has misdirected the cargo to be carried, and that cargo is of a dangerous nature and delays the vessel, damages the vessel or damages other cargo, the carrier could potentially claim against the shipper.
Part 24A of the Maritime Rules specifically provides for documentation relating to the carriage of dangerous goods. That Rule provides that the dangerous goods documents must be completed, along with certifications that the dangerous goods are packaged and labelled in accordance with the law. The Rule provides that the owner and master of the vessel, as well as the shipper, are responsible for ensuring the documentation is complete and compliant. This is a strict liability regime.
The Amended Hague Rules, which are part of New Zealand law, also have application to the carriage of dangerous goods.
The notable feature of New Zealand law with respect to claims by passengers for injury is New Zealand’s no-fault statutory regime for compensation for accidents, provided for by the Accident Compensation Act 2001 (ACA). The ACA bars Court proceedings for personal injury in New Zealand. The exception is proceedings seeking exemplary damages in cases where there has been gross negligence or deliberate misconduct of an “outrageous” nature, but such cases are rare. Instead a New Zealand public entity (the Accident Compensation Corporation), created for the purpose, compensates persons injured by way of accident in New Zealand. The ACA applies to all persons in New Zealand, so passengers from overseas who suffer injury while in New Zealand, including when travelling between New Zealand ports, are unable to sue, but are instead entitled to modest compensation from the Accident Compensation Corporation.
Passengers who arrive in New Zealand from another jurisdiction, having been injured en route, could sue for negligence at common law. Their claims would not be affected by the ACA, and would be subject to the 1976 LLMC limits of liability. New Zealand is not a signatory to the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea.
New Zealand has recently introduced the Health and Safety at Work Act 2015 (“HSWA”), which applies to New Zealand ships anywhere in the world and to demise charter of foreign ships to New Zealand operators operating in New Zealand. The HSWA provides that persons controlling a place of business (which would include a ship) must take all practicable steps to eliminate or minimise risks to the health and safety of any person. Duties under the HSWA extend to persons assisting in operating the place of business (i.e. a ship’s officers) and all persons working in the place (i.e. a ship’s crew) and any person breaching their duty may be subject to a significant fine.
The primary remedy is to seek the arrest of the vessel. Vessel arrest in New Zealand is governed by the Admiralty Act 1973 and Part 25 of the High Court Rules (“HCR”). It is available for claims that are maritime liens under the common law or that fall within Section 4(1) of the Admiralty Act 1973. Maritime liens include those for wages of master and crew, salvage and for damage done to a ship. The Admiralty Act is modelled on the 1952 Arrest Convention, but New Zealand is not a party to this agreement or the 1999 Arrest Convention.
The procedure set out in the HCR for arresting a vessel can be quick and inexpensive. It requires filing a notice of proceeding of an action in rem and an application for arrest (along with a supporting affidavit). An undertaking to meet the costs of the Registrar is also necessary. The Registrar will require the advance cash payment of the Registrar’s anticipated disbursements such as insurance costs and berthage. A hearing is not required. Provided that the application for the warrant of arrest is in the prescribed form, the Registrar of the High Court must issue the warrant. The warrant is then served by affixing it to the bridge of the vessel and leaving a copy with the person who appears to be in charge. Once the vessel has been arrested, it cannot be moved without the Registrar’s consent.
It is possible to proceed against a sister ship in some cases. For those claims falling within Section 4(1) of the Admiralty Act, a sister ship can be proceeded against if the person liable on the claim was the owner or the charterer of the ship when the cause of action arose and the person liable was the beneficial owner or demise charterer of the other ship when the action was brought.
If the party arresting the vessel has acted in bad faith or with gross negligence, an arrest will be wrongful and gives rise to a claim for damages for wrongful arrest. However, it is not enough that the claim was made on a mistaken basis.
A potential alternative to arrest is to seek a freezing order from the High Court under Part 32 of the HCR. A freezing order can be granted over “any assets located in or outside New Zealand”. A freezing order might be harder to obtain than an arrest because the applicant must: demonstrate a good arguable case; show that there is a risk of dissipation of the relevant asset; and give an undertaking in order to compensate the respondent for any damage caused by the order.
Section 4(1)(1) of the Admiralty Act 1973 confers admiralty jurisdiction, including a right of arrest, for any claim in respect of goods, materials or services (including stevedoring and lighterage services) supplied or to be supplied to a ship in its operation or maintenance. Thus, a physical bunker supplier can arrest a vessel for a claim relating to bunkers. Although not tested by the New Zealand Courts, a contractual bunker supplier is likely to have a similar right of arrest.
Various types of liens are recognised and enforced. Possessory liens are dependent on the shipowner having retained possession of the cargo, and are usually exercised by refusing to discharge or release the cargo until payment is made. Contractual liens have their basis in contract, although such clauses tend to be subject to strict interpretation by the Courts, and would now be dealt with under the Personal Property Securities Act 1999 in most cases.
Rule 25.48 of the HCR provides that the amount and form of any security required under Part 25 of the HCR may be determined by the Court. Issues of security are usually dealt with outside of Court and, in cases where a ship is arrested in an action in respect of a claim covered by insurance, the security is usually offered by the insurer. Protection and Indemnity (“P&I”) Club letters are, in practice, the most common form of security. Where an insurer is not involved, security is usually given by bank guarantee. Personal guarantees, with or without security, have also been accepted on proof of sufficient means.
The HCR give the High Court jurisdiction to make a search order, which is similar to the English concept of an Anton Piller order.
The Court may make a search order if there is a strong prima facie claim, there is the potential of serious damage to the applicant if the order is not made, and there is sufficient evidence that the party to be searched has and might destroy relevant evidentiary material. A search order will allow the applicant to search for and seize evidence. The Court may require an applicant to make an undertaking as to damages before granting a search order.
The HCR also require that as soon as a proceeding is reasonably contemplated, a potential party must take steps to preserve documents that are reasonably likely to be discoverable.
In terms of pre-action disclosure, the HCR require a party bringing a claim to provide initial disclosure at the same time as serving the claim on the opposing party(s). The initial disclosure must include all the documents referred to in the pleading which the party filed to bring its claim, and all documents it used in preparing the claim.
The general disclosure obligation in New Zealand proceedings is known as discovery, which is covered by the HCR.
Generally after a party has filed its claim, and the opposing party has filed its defence, the Court will call a case management conference. At the case management conference, the Court will (among other things) make a timetable for discovery, and make other orders with respect to it. One of these other orders will be whether discovery will be standard or tailored to the particular case.
Standard discovery requires both parties to discover all documents on which that party relies, all documents that adversely affect that party’s case, all documents that adversely affect another party’s case and all documents that support another party’s case. Tailored discovery, if ordered, can narrow or expand the scope of discovery.
Discovery is implemented by each party providing to all other parties a list of all documents that they are discovering, attached to a sworn affidavit. The affidavit and list of documents will be accompanied by all non-privileged discovered documents in electronic form.
Documents that are privileged must be discovered (included in the list of documents and identified as being privileged) but need not be provided. The Evidence Act 2006 defines what documents will be privileged in New Zealand law, and includes communications between a party and its lawyer; documents prepared for the purposes of litigation and without prejudice to negotiations with other parties.
A party can apply to the Court for an order for third party discovery, which will apply to an entity that is not party to the proceeding. The third party discovery order will usually apply only to specified documents or categories of documents.
A person can be compelled to give evidence by the issue of a subpoena.
Maritime claims in New Zealand will generally be heard in the High Court, which has admiralty jurisdiction and general jurisdiction. The High Court’s admiralty jurisdiction is set out in the Admiralty Act 1973. High Court Rules prescribe procedural requirements.
An admiralty proceeding is started by filing a notice of proceeding. There are different forms depending on whether the action is in rem or in personam. The notice requires a precise statement of the nature of the claim and the relief sought.
The defendant must then enter an appearance by filing a memorandum. A New Zealand defendant will have 10 working days to enter an appearance, and an overseas defendant will have a timeframe ordered by the High Court.
The plaintiff will file and serve a statement of claim, making the factual allegations that are necessary to its claim, along with its initial disclosure. This can accompany the notice of proceeding, or be filed any time up until 10 working days after the defendant enters an appearance. A defendant will then have 20 working days to file a statement of defence in which it answers each of the factual allegations made against it (typically by admitting or denying them).
Following the above exchange of pleadings, the Court will convene a case management conference, where it will timetable further steps. The further steps will include discovery and may include time for various interlocutory applications to be made. Discovery will follow.
Once these steps are complete the procedure varies, but will generally involve briefing evidence, interlocutory matters and the hearing itself.
The timeframe for a High Court proceeding can vary greatly, and can depend in particular on the number of interlocutory applications that are brought. Typically a High Court proceeding will take one to two years to proceed from the opening stages through to trial and judgment, but it is not uncommon for them to take longer. However, the New Zealand High Court is generally very efficient when urgency is required, for example when a vessel arrest is required at short notice.
Successful parties are often entitled to interest, and costs. Costs are at the Court’s discretion, and are usually awarded by reference to a set sum for having taken certain steps, which generally falls well short of a party’s actual legal costs.
Arbitrations in New Zealand are conducted pursuant to the Arbitration Act 1996. There is wide scope for parties to agree their own procedure. A typical procedure will involve the exchange of a statement of claim and statement of defence, disclosure of documents (generally more limited in scope and in a less formal manner than in the High Court), the exchange of briefs of evidence, the exchange of written submissions and the arbitration hearing. The timeframe for arbitrations can vary greatly but, for a substantial arbitration, six months to a year would be a typical timeframe.
Mediation can also be used to resolve disputes in New Zealand, and is largely unregulated in the commercial context.
Along with Denmark, Transparency International’s Corruption Perception Index rated New Zealand as the least corrupt country in the world in 2016.
Litigation in New Zealand is relatively inexpensive in comparison with other similar jurisdictions.
The New Zealand High Court currently has 46 sitting judges who hear both civil and criminal cases, but there are no specialist admiralty judges.
Overseas judgments can be enforced in New Zealand either under the common law or by statute. At common law, a foreign judgment can be enforced if: it is a money judgment and is not for a sum in respect of taxes or penalty; the judgment is final and conclusive; and the foreign Court had jurisdiction to give the judgment against the judgment debtor. An action to enforce a foreign judgment is an ordinary High Court proceeding commenced with the filing of a statement of claim.
The Reciprocal Enforcement of Judgments Act 1934 provides for the enforceability in New Zealand of judgments of the qualifying Courts of 27 prescribed countries on a reciprocal basis. Judgments for a sum of money made by Courts in Commonwealth countries may be enforceable in New Zealand by filing the judgment with the High Court and requesting execution in accordance with Section 56 of the Judicature Act 1908. This procedure is useful where the foreign Court which issued the judgment is not a superior Court, as is required under the Reciprocal Enforcement of Judgments Act.
New Zealand has been a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) since 1983. The Courts of contracting states are required by the Convention to give effect to private agreements to arbitrate and to recognise and enforce arbitration awards made in other contracting states. The Convention has legislative force as Schedule 3 of the Arbitration Act 1996.
On 5 October 2011, New Zealand suffered its worst ever maritime environmental disaster when the container ship Rena ran aground on the Astrolabe Reef, resulting in the discharge of substantial heavy fuel oil in a sensitive marine area. The Rena oil spill has caused New Zealand to update its laws with respect to marine pollution. It has also created a heightened awareness of the country’s lack of resources in relation to oil spill response and its very limited salvage capability.
In 2016, New Zealand ratified the Maritime Labour Convention 2006. The Convention came into force on 9 March 2017. It should be noted that New Zealand legislation is already largely consistent with the Maritime Labour Convention. However, ratifying the Convention does give New Zealand jurisdiction to inspect and verify working conditions of crews on foreign ships servicing New Zealand.
Emmet Maclaurin