Unpaid marina and shipyard fees and abandoned boats: The problems and the solutions

Australian marinas and shipyards continue to be plagued by vessels where the rent or yard fees, sometimes mounting into the tens of thousands of dollars, have not been paid.

So, what can marinas and shipyards do in a practical sense, to overcome these problems?

The extent of the problem

Each of the marinas, shipyards and slipways we act for have all experienced these problems in recent times but the problem extends well beyond the boating industry itself. The various governments around the country have an even bigger problem with abandoned boats throughout local waterways.

The largest number of vessels on moorings or in marinas per state is New South Wales, closely followed by Queensland. Governments appear to struggle to get enough funding to enable them to get rid of these abandoned or seemingly abandoned vessels. There does not appear to be any statistics as to what the government authorities collectively, have been able to achieve in this respect or the costs involved. However, we do have figures for the last financial year (2019/2020) for the Queensland State Government but no information in relation to the local government and the various statutory authorities involved. The Queensland Government alone, last financial year successfully dealt with disposing of or otherwise having removed, 157 vessels and in doing so, incurred costs in the millions.

Despite that, in Queensland there are still many hundreds, possibly more than a thousand, vessels which need to be dealt with and that is just in public waterways leaving aside the problem in marinas and shipyards.

Legislative solutions

In each jurisdiction there is legislation regulating how marinas, slipways and shipyards can deal with abandoned vessels or vessels in relation to which there are outstanding fees and costs. Sadly, none of the legislative arrangements provide genuinely practical solutions.  The legislative “solutions” take far too long, can be circumvented in certain circumstances and do not offer commercially acceptable solutions for marinas, shipyards and slipways.

One simple solution

Every marina and shipyard can avoid the problem very simply and that is to ensure that your marina,  shipyard or slipway/lifting facility, has a signed contract with each boat owner giving you, among other rights, the ability to fairly and reasonably deal with the removal or disposal of a vessel when the bills are not paid.

Sadly, we continue to see marina and shipyard operators which have lifted, slipped or stored vessels without any signed, written agreement with the vessel owners. This means the only remedies available to the marina or yard are to rely on the commercially unsatisfactory statutory based system or potentially, expensive Admiralty Law claims.

More common than that however is for there to be agreements in place, but very often, they do not have appropriate provisions which enable the marina or shipyard operator to deal with the owner of the vessel (and the vessel itself) when there is an on-going default in payment. Without the right provisions, a marine facility operator may not be much better off than having no agreement at all.

This is why it is important to have your marina berth rental agreements, lifting or slipping agreements and dry-storage agreements, prepared by an experienced maritime lawyer who knows and understands how the boating industry actually works.

The Cornwalls Maritime Law team has the experience and practical understanding to know how the boating industry actually operates, so they can ensure that your marine facility agreements give you all the protection and necessary powers to deal with even worst-case scenarios.

Dealing with the worst-case scenario

In our experience, the worst-case scenario is having a vessel left in your marine facility or even sunk in your marina or left abandoned on your slipway, which is unseaworthy, worth nothing and there is an uncooperative owner or you cannot find them.

We have dealt with this situation a number of times. Where there are no agreements or the written agreements are inadequate, sometimes there are other options available which can work if executed properly with the assistance of an experienced maritime lawyer who understands the practicalities of the industry.

If you would like your marine facility documentation reviewed or updated, please do not hesitate to contact the Cornwalls Maritime Law team. Also, if you require assistance in dealing with unpaid marina, shipyard storage or slipping fees, call Ian Heathwood, the head of the Cornwalls Maritime Law team.

Your initial call will be free of charge as part of our commitment to helping the boating industry try to avoid problems and resolve those that do arise.

Queries
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Disclaimer
This article is general commentary on a topical issue and does not constitute legal advice. If you are concerned about any topics covered in this article, we recommend that you seek legal advice.

The Author

Ian Heathwood

PARTNER, BRISBANE