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Maritime New Zealand denied appeal in safe ship management company case - International Law Office

International Law Office

Shipping & Transport - New Zealand

Maritime New Zealand denied appeal in safe ship management company case

June 29 2011

Introduction
Facts
Application for judicial review

Court of Appeal decision
Application for leave to appeal to Supreme Court


Introduction

The director of Maritime New Zealand - the crown entity with responsibility for maritime safety - has been declined leave to appeal to New Zealand's highest court in relation to the reinstatement of a safe ship management company.

In New Zealand, owners of vessels are primarily responsible for the safety of such vessels. However, commercial vessels must also be registered with a safe ship management company, which must periodically inspect and survey the ship and monitor the adequacy of, and compliance with, safety systems.

Facts

Survey Nelson Limited was a safe ship management company with more than 700 ships on its books. In 1998 it was issued certificates of approval and a delegation of the director's powers by the director of Maritime New Zealand. Following an audit process from 2004 to 2007, the director became concerned about SNL's performance as a safe ship management company. The director engaged a panel to oversee and monitor SNL. On November 20 2009, after receiving several reports, the director advised SNL of her decision to withdraw SNL's approval.

Application for judicial review

SNL sought and obtained interim orders to restrain the director from implementing her decision. It applied for judicial review of the decision. The High Court held that the director had made an error of law in treating SNL's approval as if it were a "maritime document" and so followed the incorrect statutory process. It held that SNL was prejudiced as a result. However, relief was refused.

Court of Appeal decision

The director appealed to the Court of Appeal on the basis that she had not made an error of law. SNL appealed against the decision not to grant relief. The Court of Appeal agreed with the High Court finding that there had been an error of law. It noted that unless there were extremely strong reasons for refusal, relief should be granted. It quashed the director's decision and made a declaration that SNL be reinstated as a safe ship management company according to the original terms of its approval.

The director issued SNL with a safe ship management certificate which expired after just three months. SNL applied to the High Court for an interpretation of the Court of Appeal's order for reinstatement of SNL's certificate. The parties ultimately agreed between themselves that a further certificate of approval be granted with no expiry date.

Application for leave to appeal to Supreme Court

The director sought leave to appeal to the Supreme Court on the questions of whether the Court of Appeal had:

  • erroneously reinstated an approval which, by the time of the Court of Appeal judgment, had lapsed by expiry of time; or
  • erroneously exercised its discretion to grant relief.

The Supreme Court declined leave in relation to both questions. Since the dispute between the parties had arisen, a new regulatory regime had been adopted. Therefore, the question of whether the approval had expired had no current significance, other than in relation to the proposed appeal. The Supreme Court also stated that the Court of Appeal's decision to grant relief seemed orthodox in light of the fact that it was common ground that the director had followed the wrong process in a way that had prejudiced SNL.

For further information on this topic please contact Felicity Monteiro at Wilson Harle by telephone (+64 9 915 5700), fax (+64 9 915 5701) or email (felicity.monteiro@wilsonharle.com).


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