A claim by Royco Shipping Services Ltd. for $26,616 damages against Matson South Pacific Ltd., over a stevedoring agreement dispute was dismissed at the Supreme Court in Nuku'alofa.

The Court heard that the plaintiff, Royco provides stevedoring services for the loading and unloading of cargo on and from vessels berthed at the port in Nuku'alofa.

On the other hand Matson, the defendant operates seafaring vessels for cargo transportation throughout the Pacific.

Royco Shipping filed this claim for damages against Matson South Pacific Ltd.

Lord Chief Justice Whitten QC in a ruling on February 10 said that on April 28, 2017 the parties entered into an agreement by which Royco agreed to provide Matson, with stevedoring services its vessels at the port

On March 5, 2020 Matson terminated the agreement by giving Royco three months' notice pursuant to the agreement. During the termination period, Matson engaged another stevedore to service its vessels.

Royco then in these proceedings sought a declaration that the agreement is to be construed as inferring or that it contains an implied term of 'exclusivity' entitling it to service all of Matson's vessels, at the port of Nuku'alofa (the exclusivity term).

In addition, as Matson engaged another stevedore during the termination notice period, Royco alleged that Matson breached the 'exclusivity' term for which it claims damages in the sum of $26,616.47 (subject to adjustment).

Matson denied Royco's claim. 
It also denied that exclusivity is to be inferred from the express terms, or implied as a separate term of the agreement.

In its defence to the counterclaim, Royco stated that it had paid the sum claimed and that Matson had accepted the payment.

Agreement

The Chief Justice said both parties submissions on the nature of the agreement were to a certain extent, correct.

He said it may be described as a supply agreement pursuant to which Royco agreed to provide stevedoring services on specified terms and prices and Matson agreed to pay for the services it received from Royco on those terms and at those prices.

However, he did not agree with Royco's submission that without exclusivity, the agreement would impose no obligations on Matson.

As noted, the agreement imposed an obligation on Matson to pay Royco at agreed rates for the services Royco provided Matson.

But unlike a normal supply agreement, the agreement here did not impose any obligation on Matson to engage Royco to service any, or any specified number of Matson's vessels during the term of the agreement.

“However, such a perceptible characterization of the agreement tends to obscure rather than illuminate the present issue for determination,” said the Chief Justice.

"The real question is whether the express obligation on Matson is be construed as including an automatic request by Matson for Royco to service all Matson's vessels for the entire term of the agreement; or, any of them."

He said, in other words, the constructional choice presented on this issue is whether the parties, by the terms of their agreement, intended that Royco would provide stevedoring services for 'all' of Matson's vessels berthing in Nuku'alofa during the term of the agreement, or only 'as required' by Matson.

“Self-evidently, the agreement does not contain any express provision whereby Royco was entitled to receive and Matson was obliged to give, all of its stevedoring work for all Matson's vessels berthing in the Port of Nuku'alofa,” he said.

Not exclusive

Lord Chief Justice Whitten then concluded that the stevedoring agreement between the parties did not include any inferred or implied term conferring on Royco, an exclusive right to provide stevedoring services for all of Matson's vessels at the port of Nuku'alofa, during the term of the agreement including the three-month termination period ending on June 8, 2020.

He said as the alleged implied term of 'exclusivity' was the sole basis for Royco's claim for damages, it would appear that the decision on the separate question disposes of Royco's claim and renders any further trial unnecessary.

On the basis that Matson's counterclaim appears to have been satisfied by Royco albeit only after the counter claim was issued in this proceeding, he viewed is that the following dispositive orders for the proceedings as a whole was appropriate.

Therefore, Matson's counterclaim which has been admitted and paid by the plaintiff
 is therefore struck out.

He then ordered that Royco pay Matson's costs of and incidental to this proceeding (claim and counterclaim) including the separate trial on a party/party basis, to be taxed in default of agreement.

Should either party seek further or different orders, submission are to be filed by February 19. If no submissions are filed by this date, the above tentative orders shall become final, said Lord Chief Justice Whitten.

The Supreme Court office confirmed today no further submission has been filed to date.

Counsel for the plaintiff was Mr William Edwards.

The defendant was represented by Mr R. Stephenson.