THOMSON v STX PAN OCEAN CO LTD

[2012] FCAFC 15; Federal Court of Australia; Greenwood, Mckerracher and Reeves JJ; 29 February 2012

Charterparty (voyage) - Representations made by the director of the charterers (tortious conduct) - Owners delaying termination of the charterparty - Damages for bunkers used when the vessels were idle - Loss of profit caused by the conduct of the charterers

Bowen (charterers) and STX (owners) entered into a voyage charterparty for the carriage of two cargoes on two vessels. Charterers suffered a significant commercial loss on the sale of the first cargo and defaulted in payment of hire and demurrage to owners on the charter for that cargo. Although the second vessel had been ready for the loading of the second cargo, no cargo was loaded for about one month. Owners terminated the charterparty and contended that they waited for 11 days to terminate it because of the representations made by the sole shareholder and director of the charterers as to the fact that the outstanding freight and demurrage would be paid, which they relied upon. Owners claimed for the loss of bunkers incurred when the vessels were idle and loss of profit suffered during the 11 days which had incurred in reliance upon the representations of the director of the charterers. The primary judge awarded compensation to the owners for loss of bunkers by applying a very broad test which was made a ground for this appeal. As to the loss of profit, the only evidence provided by the owners was the rates in the charterparty; there was no evidence of other income that could have been earned by deploying the vessels elsewhere in the course of the 11 days. There was no evidence of a market or alternative charter rate that could have been earned had the owners not waited for 11 days to terminate and used the vessels.