Most of the cases decided over the last
five years in the exercise of Admiralty jurisdiction by Australian Courts have
continued the process of interpretation and exposition of provisions of the Admiralty
Act 1988 which commenced with the coming into force of that Act on 1
January 1989. Predictably, many of those cases have maintained the earlier
focus on the effect of various sections of the Act which were framed to confer
concurrent jurisdiction on the Federal Court and State and Territory Courts
exercising civil jurisdiction subject, except for the Supreme Courts, to
particular local limits.
Conferral of in personam jurisdiction on the
Federal Magistrates Court
By Schedule 3 of the Jurisdiction
of the Federal Magistrates Court Legislation Amendment Act2006 s 9(1)
of the Admiralty Act has been amended to confer on the Federal
Magistrates Court, as well as on the Federal Court and on the Courts of the
States and Territories, federal jurisdiction in respect of proceedings
commenced as actions inpersonam;
(a) on a maritime claim; or
(b) on a claim for damage done to a ship.
However, s 9(2) and s 10 remain unchanged.
Those provisions confine jurisdiction in respect of limitation proceedings and
actions in rem to the Federal Court and the Supreme Courts of the States
and Territories.
Jurisdiction of the South Australian District Court
under s 9(1)
Interestingly, a Full Court of the Supreme
Court of South Australia recently had occasion in D & N Investments Pty
Ltd v Wagner (2005) 91 SASR 27 to consider the nature and extent of
admiralty jurisdiction conferred on the District Court by the Admiralty
Act and by s 8(1) of the District Court Act of that State,
which provided;
‘(1) The
Court has the same civil jurisdiction (both at law and in equity) as the
Supreme Court at first instance subject, however to the following
qualifications:
(a) the Court
has no jurisdiction in probate or admiralty;’
A claim had been instituted in the District
Court for damages for breach of contract for the construction of a commercial
fishing vessel. Besanko J, with whom Duggan J concurred, noted that
s 8(1) provide for a general conferral on the District Court of the civil
jurisdiction at first instance of the Supreme Court, subject to certain
qualifications. In other words, the general conferral of jurisdiction did not
extend to, amongst other things, the Supreme Court’s jurisdiction in admiralty
as at the date of the enactment of the District Court Act.
However, this does not
mean that the District Court does not have jurisdiction in admiralty if it is
otherwise conferred by an Act of the Federal Parliament, or indeed by a State
Act (see s 8(4) of the District Court Act); it simply means that it
does not have jurisdiction in admiralty by reason of the general conferral of
jurisdiction in s 8(1). His Honour continued, at 38 [46];
‘I think that on the
proper construction of s 8(1)(a) the jurisdiction in admiralty referred to
therein is the Supreme Court’s jurisdiction in admiralty. That
jurisdiction is not given to the District Court by reason of the provisions of
s 8(1). Jurisdiction over actions in personam on a maritime claim is given
to the District Court by s 9 of the Admiralty
Act. This construction of s 8(1) of the DCA is also supported by the
consideration that it is not apparent why the South Australian Parliament would
deny to the District Court the Federal jurisdiction invested in it by s 9
of the Admiralty Act.’
His Honour then concluded,
at 41 [59];
‘The three courts in
this State which have general civil jurisdiction at first instance are this
Court, the District Court and the Magistrates Court. A monetary limit is a
jurisdictional limit within s 39(2) of the Admiralty
Act. I do not think a provision to the effect that a State court has no
jurisdiction over a subject matter which is the subject of the investing of
federal jurisdiction in that court is a jurisdictional limit within
s 39(2) of the Admiralty Act. In other words, a jurisdictional
limit within the terms of s 39(2) of the Admiralty Act does not
include a provision which purports to prohibit the exercise of the federal
jurisdiction invested in the State court by s 9 of the Act. Section 39(2)
of the Admiralty Act is predicated on the basis that some federal
jurisdiction is vested in the State court, albeit that limits on the
jurisdiction of the State court are respected. The second possible construction
involves a denial or repelling of federal jurisdiction and I do not think it is
within the legislative competence of the South Australian Parliament to do
that. It follows that this is an additional reason to adopt the construction of
s 8(1) of the DCA which I think is the proper construction of the section
(s 22A of the Acts Interpretation Act 1915).’
White J similarly concluded that s 8(1)(a) did not
preclude the District Court from hearing and determining the plaintiffs’ claims
because jurisdiction was vested in that Court by ss 9 and 39 of the Admiralty
Act and was not affected by s 8(1)(a).
Aspects of Jurisdiction
(i) General maritime claims – The“Global
Peace”
The nature of general maritime
claims as explained in s 4 of the Act has recently been further analysed
by Allsop J in Elbe Shipping SA v The Ship “Global Peace” (2006) 154 FCR
439. While “Global Peace” was being towed to a berth by a tug “Tom Tough”, the
tug made contact with the hull of the “Global Peace” causing damage to the hull
or side plating as a result of which approximately 25 tonnes of oil escaped
into the waters of the Port of Gladstone. Two other vessels, the Medi Vitoria
and the Nord Stream which were at berth in the Port were contaminated by
the oil. An action in rem against the “Global Peace” was commenced by
the owners of each of the “Medi Vitoria” and the “Nord Stream”,
and the defendant moved for each action to be dismissed on the ground,
principally, that it was not open to the plaintiffs to invoke Part III of the
Act which confers jurisdiction in respect of actions in rem. After an
extensive review of the authorities, Allsop J held that the plaintiff’s claims
were general maritime claims of the character described in:
s 4(3)(a) (a claim for damage done by a
ship (whether by collision or otherwise));
s 4(3(b) (a claim in respect of the
liability of a shipowner under Part II or IV of the Protection of theSea
(Civil Liability) Act 1981 or a corresponding law of a State or Territory;
s 4(3)(d) (a claim arising out of an act or
omission in the navigation or management of the ship);
s 4(3)(j) a claim in respect of towage of a
ship; and
s 4(3)(k) a claim in respect of pilotage of
a ship.
His Honour also held that the
subject proceedings were on a “maritime lien” within the meaning of s 15
of the Act which, by subs (2) includes a lien for damage done by a ship.
(ii) “Ship or other property” – whether action
can be brought against bunkers.
(a) The “Genco Leader”
In Metall und Rohstoff Shipping v
The Owners of Bunkers on board the Ship MV “Genco Leader” (2005) 145 FCR
145, a Full Court of the Federal Court considered a motion to set aside an
arrest by a Marshal of the Court of bunkers on board the “Genco Leader”.
That consideration involved the interpretation of s 17 of the Admiralty
Act, which provides:
‘Where, in relation
to a general maritime claim concerning a ship or other property, a relevant
person:
(a) was,
when the cause of action arose, the owner or charterer of, or in possession or
control of, the ship or property; and
(b) is, when
the proceeding is commenced, the owner of the ship or property;
a proceeding on the
claim may be commenced as an action in rem
against the ship or property.’
It was conceded on both sides that
there was at issue a general maritime claim being a charterparty dispute subject
to London arbitration between the plaintiff as time charterer of another vessel
the “Tolmi” and Maywall which was the time charterer of the “Genco
Leader” and the owner of the bunkers on that vessel. The Full Court rejected a
construction of s 17 which would have allowed the arrest of any “maritime
property” even if unconnected with the general maritime claim the subject of
the action provided that, when the cause of action arose, the defendant was the
owner or charterer of, or in possession or control of that other property.
Allsop J, with whom Lee and Tamberlin JJ agreed, concluded, at
147-148 [16];
‘To construe
s 17 in this way, would, in my view, lead to a width of s 17 which
would in effect permit a form of maritime or Admiralty attachment of property
of a debtor, limited only by the kind of considerations covered by s 13.
In my view, the argument should be rejected for a number of reasons. First, in
my view, the plain (and elegant, if I may say so) drafting of s 17 does
not admit of any importance in the absence of the definite article before the
word "property" in para (a) or para (b). As I said, the Act is simply
drafted. That is not a gratuitous comment. It is important to understand the
intended simplicity of the provision. Section 17(a) can and should be read
as meaning: "the owner or [the] charterer of, or in possession or control
of, the ship or [the] property." That is not to read words into, or put a
gloss on, the section. It is to understand what I think is
the plain and literal meaning of the words. The draftsperson has simply been
economical and, if I may say so again, elegant, in the way the phrases were
expressed. To place emphasis on the absence of the definite article before the
word "property" is to import the word "any" before it.’
His Honour left open the question of
whether “property” in s 17 was capable of including “bunkers”, observing,
at 148 [20];
‘It is unnecessary
to decide whether "property" includes bunkers. For my part, I see no
reason to limit the word "property" to particular types of property
that would exclude bunkers. The relevant limitation is, as I have said, found
in the words "general maritime claim concerning" in the first part of
s 17. (See generally ALRC Report [107]-[110].)
(b) The
FV “Taruman”
That subsidiary question was more
recently considered by another Full Court of the Federal Court in Scandinavian
Bunkering AS v The Bunkers on board the Ship FV “Taruman” (2006) 151 FCR
126. In that case, officers of the Australian Fisheries Management Authority
(AFMA) had served a notice of seizure upon FVTaruman when it
arrived in Hobart on 12 September 2005. On 15 September 2005 the plaintiff
commenced in rem proceedings against the bunkers on board the “Taruman”.
A warrant of arrest was issued and executed upon the bunkers, which comprised
approximately 220,000 litres of fuel.
The questions formulated for
determination by the Full Court were whether AFMA or the Commonwealth had any
right, title or interest in and to the bunkers and if so, whether that right title
or interest prevailed over the interest in the bunkers claimed by the
plaintiff.
The Full Court held that the word
“boat” in s 106A of the Fisheries Management Act 1991 (Cth) (“the
FMA”) included the bunkers on board a boat so that a forfeiture under the FMA
prevailed over any purported arrest under the Admiralty Act. It was
also held that “ship” as defined in s 3(1) of the Admiralty Act includes
the bunkers on board a ship and that bunkers were not capable of comprising
“property” within the meaning of s 17 separate from the ship. The
question left open by Allsop J in the Genco Leader was adverted to by
Kiefel J at 149 [92] where her Honour observed;
‘The ratio of The Genco Leader concerns the connexion between the property and
the general maritime claim referred to in s 17. The reference in [20] of that
decision, as to whether bunkers might come within the description of
"property" in s 17, does not form part of its ratio. I understand his
Honour to have left that question open and to allow for the possibility that
this might be so in a particular case. His Honour's comments are consistent
with no narrow approach being taken to words of wide meaning. There is nothing
in his Honour's reasons which suggests that the questions in this case
concerning bunkers were raised in argument before that Court.’
To similar effect Ryan
J pointed out, at 133 [20];
‘The Full Court in
that case does not appear to have had the benefit, which we have received, of
detailed analysis of the line of authority to which The Silia is central. Nor,
apparently, was attention given to the practical implications of treating
bunkers as "property", separate and distinct from the ship. In my
view, almost as a matter of definition, fuel, once taken on board as bunkers,
is an integral part of the ship. To admit of the possibility of its separate
arrest as "property" would compel its disgorgement from the ship,
upon or before arrest, or the provision by the owners of security in respect of
an item of property in which ex hypothesi they have no interest. Accordingly, I
consider that the meaning of "property" in s 17 which I favour is
consistent with the approach to interpretation of the Admiralty Act outlined by a Full Court of this Court in Tisand
Pty Ltd v Owners of Ship MV Cape Moreton (Ex Freya) (2005) 143 FCR 43 at
[59]-[65].’
(iii) Ownership when proceedings commenced
(a) The “Cape Morton”
The last-mentioned case also involved
adjudication on a special case referred to a Full Court of the Federal Court. To
the great regret of the Court and the wider maritime legal community Cooper J,
who was a member of that Full Court and whose contribution to the development
of maritime jurisprudence in this country has been immense, died before
judgment could be given. The parties consented to judgment being pronounced by
the two remaining members of the Full Court.
The plaintiffs in the Cape Morton
commenced proceedings in rem against the “Cape Morton” in support
of a claim relating to damage to a cargo of zircon sand carried on board the “Cape
Morton” from South Africa to China. The carrier was alleged to have been
Freya Navigation Shipholding Ltd (“Freya”) which, at the time when the cause of
action arose and when the proceedings were commenced, was registered as the
owner of the vessel on the Liberian register of ships. However, it was agreed
between the parties that, after the cause of action had arisen but before
commencement of proceedings, Freya had sold and delivered the “Cape Morton” to Alico Marine Ltd.
The principal issue before the Full Court was whether the expression “the owner” in s 17(b) of the Act incudes a
registered owner of a vessel in the position of Freya, or whether Alico had
become the owner in that sense. If Freya was the owner, within the meaning of
the section, then arrest of the ship could be upheld, as damage to the cargo
had occurred while the ship was in the possession of Freya and before the sale
of the ship to Alico.
The Full Court upheld the application
to set aside the arrest, holding that Freya, after the sale and delivery to
Alico, was no longer the owner within the meaning of s 17. Their Honours
concluded that “owner” within ss 17, 18 and 19 of the Act is not
necessarily synonymous with a person whose name is entered on any international
register of ships, applying Kent v SS “Maria Luisa” (No 2) (2003) 130
FCR 12.
It was also considered that the
International Convention for the Unification of Certain Rules Relating to the
Arrest of Sea-Going Ships 1952 (“the Arrest Convention”) confers a right of
arrest only if the offending ship is still owned by the person said to be
liable on the claim when the cause of action arose. The Full Court concluded
that whether a person is the “owner” for the purposes of ss 17, 18 and 19
is not necessarily answered by reference to an international shipping
register. The true enquiry is whether the relevant person is, when the
proceedings are commenced, the owner in a proprietary sense. Parallels between
those sections and corresponding legislation in the United Kingdom, Canada, Hong Kong, Singapore and New Zealand were said to support that conclusion; see eg,
s 21 of the Supreme Court Act (UK). By this process of reasoning,
the Full Court imputed to the ALRC, which had formulated the principles enacted
in the Admiralty Act, an intention that a ship or other property should
only be amenable to arrest if it were the property of the presumptively liable
relevant person or be under demise charter to that person when the proceedings
were commenced.
(iv) Surrogate ship arrest
(a) The “Island Sun”
This concept was examined by
Lee J in Safezone Pty Ltd v The Ship “Island Sun” (2004) 215 ALR
690 where the plaintiff had applied for the arrest of the “Island Sun” as
a surrogate for the MV “World Adventurer”. The cause of action invoked
by the plaintiff was breach of a charterparty in respect of the “World
Adventurer”. The “relevant person” within the meaning of s 3 of the
Act was identified as Mauritius Island Cruise Ltd (“MIC”) which was the owner
of the “World Adventurer”. However, Lloyd’s Register of Ships for 2004
disclosed that the registered owner of the “Island Sun” was Sun
Shipholding Ltd, which was said to be a wholly-owned subsidiary of MIC. His
Honour set aside the arrest on the ground that MIC was not the “beneficial”,
“real” or “true” owner of the “Island Sun”. He applied the reasoning of
the majority in the Maria Luisa (2003) 130 FCR 12 and concluded, at 695
[30];
‘Accordingly,
the circumstances relied on by the plaintiff are not sufficient to give rise to
an inference that MIC is the beneficial owner of the vessel for the purposes of
s 19(b) of the Act. Even if it is assumed that there is single management
for the corporate chain that constitutes MIC and Sun Shipholding Ltd the
fact that Sun Shipholding Ltd is a wholly owned subsidiary of MIC does not
assist the plaintiff. It may be taken that Maria Luisa (in particular at [47]) has established that the
concept of beneficial ownership in relation to proceedings against a surrogate
vessel is to be construed narrowly and does not extend to wholly-owned
subsidiary “one ship” companies. On the evidence so far adduced the plaintiff
has not demonstrated entitlement to effect an arrest of the vessel under
s 19(b) of the Act.’
(b) The “Maria Luisa”
In the Maria Luisa Beaumont J, at first instance, had
set aside the arrest of the “Maria Luisa” which had been arrested as the
surrogate of the “Monika” and the “Boston Bay.” [see Kent v Maria Luisa (No 1) (2002) 130 FCR 1]. The plaintiff had been employed
as a diver and deck hand on boats, including the “Monika” and the “Boston Bay” owned by trustees of unit trusts of which the sole beneficiary was Australian
Fishing Enterprises Pty Ltd (“AFE”). AFE was the charterer of each of the
wrongdoing vessels the “Monika” and the “Boston Bay” at the time
when the cause of action arose. At the time when the proceedings commenced,
the registered owner of the “Maria Luisa” was Everdene Pty Ltd which was
a wholly owned subsidiary of AFE and the trustee of a unit trust over assets
including the “Maria Luisa”. All the units in the “Maria Luisa”
unit trust were owned by AFE. The majority of the Full Court (Tamberlin and
Hely JJ) declined to hold that AFE was “the owner” of the “Maria Luisa”
within the meaning of s 19 of the Act although they acknowledged on the
authority of “The Iron Shortland” (1995) 59 FCR 535 that “owner” in that
context extended to “beneficial owner”. Beneficial ownership, in their Honours
view, involved something greater than a beneficial or equitable interest such
as that held by a unit holder in the assets of a unit trust. AFE had the
ability to collapse the trust and compel the transfer of the subject property,
including the “Maria Luisa” to itself. However, at the relevant time it
had not done so.
(c) The “Boomerang I”
Section 19 of the Act also arose for consideration by a Full Court
of the Federal Court in Comandate Marine Corporation v The Ship “Boomerang
I” (2006) 151 FCR 403.In that case, Pan Australia Shipping Pty Ltd
(“Pan”) was the demise or bareboat charterer of “Boomerang I” and the
time charterer of another vessel, “Comandate” owned by the plaintiff,
Comandate Marine Corporation. A dispute arose between the plaintiff and Pan
over performance of their mutual obligations under the time charter. In
support of that asserted liability of Pan, the plaintiff sought to arrest “Boomerang
I” as a surrogate of “Comandate”. Allsop J identified the sole
question for resolution as being whether “the owner” or “owner” in s 19(b)
of the Act encompassed a demise or bareboat charterer. It was held that neither
expression did. His Honour considered that ss 17, 18 and 19, and in
particular s 19 of the Act, distinguished between the owner, charterer and
the person in possession or control of the ship. The phrase “the owner”
against the total background and context provided by the ALRC Report and the
body of jurisprudence behind it, together with the Arrest Convention, was
clearly not intended to extend to a demise charterer.
To similar effect, Emmett J noted that the use of the word “owner”
in paras (b) of ss 17 and 19 of the Act in contradistinction to the
use of demise charterer in s 18(b), indicates an intention on the part of
the drafter of the provisions to distinguish between the owner, on the one
hand, and a charterer, whether a demise charterer or otherwise, on the other.
Again, as a matter of language of the provisions the word “owner”, when used in
s 17, must be capable of referring not only to the owner of a ship but to
the owner of other property;
‘One would not
ordinarily refer to a hirer of chattels, other than a ship, as the owner. What
is relevant, of course, are the words of the Act and not what was stated by the
drafter or the legislators as their intention. While such statements may be
relevant in the case of ambiguity they cannot change the meaning of the
statute. However, if there were any ambiguity, and I am not disposed to
consider that there is any, it is clear that ambiguity would be unequivocally
resolved in favour of the defendant’s constructions. (at 405 [6]).
Exclusive jurisdiction clause in a charterparty
The “Alkimos”
Another issue
of jurisdiction, arising not from the terms of the Act, but from the
contractual arrangements embodied by the parties in a charterparty confronted
Allsop J in Incitec Ltd v Alkimos Shipping Corporation (2004) 138
FCR 496.
Upon arrival of the Alkimos at Newcastle in about March 2002, the Australian Quarantine and Inspection Service (AQIS)
found residues of barley in a number of holds and it refused to permit
discharge of part of the fertiliser. In March 2003, Incitec Ltd and another
cargo interest affected by the refusal commenced proceedings against the vessel’s
owner, Alkimos Shipping Corporation (“ASC”), and the time charterer, Hyundai
Merchant Marine Co Ltd (“Hyundai”).
The time charter between Alkimos and Hyundai
contained cl 17, which required dispute resolution to be conducted in London in accordance with the Arbitration Act 1996 UK, as per the Baltic and
International Maritime Council. After proceedings had been commenced against
them in the Federal Court, Alkimos and Hyundai agreed to substitute for
arbitration an identified litigation process, in the High Court of Justice in London applying English law and procedure.
Alkimos subsequently sought, by notice
of motion, to file and serve cross-claims against Hyundai in both Federal Court
proceedings. Hyundai, by oral motion, claimed that should such leave be
granted, the cross claims should be stayed by virtue of the exclusive
jurisdiction clause.
The Court considered two issues; whether
the cross-claims made by Alkimos arose out of, or were in connection with, the
time charter and thereby fell within the terms of the exclusive jurisdiction
clause; and secondly, if so, whether the cross claims should be stayed. His
Honour held, first, that the cross-claims fell within the dispute resolution
clause agreed between Alkimos and Hyundai because, in his Honour’s view, the words
“any dispute arising out of or in connection with this Contract” should be
given a wide or generous construction.
His Honour then proceeded to consider
whether the cross-claims against Hyundai should be stayed. He noted that, the
discretion not to grant a stay in the face of an exclusive jurisdiction clause
requires substantial grounds for its exercise. It is not a matter of mere
convenience or of forum non conveniens. The question is one of the
exercise of a discretion in all the circumstances, but recognising that the
starting point is the fact that the parties have agreed to litigate elsewhere,
and should, absent strong countervailing circumstances, be held to their
bargain. However, important considerations weighing against the operation of
the exclusive jurisdiction clause include whether inconvenience, financial or
otherwise, will be caused to third parties, the effect upon the due
administration of justice and other appropriate public policy considerations.
Of particular significance to his Honour
was the risk of inconsistent curial findings of equivalent superior courts and
the risk of inconvenience to third parties not party to the exclusive
jurisdiction clause. They were said to militate strongly against preventing
ASC from litigating its cross-claims in the Federal Court. Implicit within the
chosen replacement for arbitration, the High Court of Justice, was the
potential for inconsistent curial findings of equivalent superior courts
and the risk of inconvenience to third parties by the use of compulsory curial
process, not available in arbitral proceedings.
In applying what he acknowledged was a
fine balance, his Honour came down against promoting competing and potentially
conflicting litigation in circumstances where one forum can conveniently and
promptly deal with the whole controversy.
Cargo claims
A recent judgment by Emmett J canvassed
issues of international importance in relation to the carriage of goods by
sea. In CV Sheepvaartonderneming Angerkracht v Stemcor (A’sia) Pty Limited
[2005] FCA 1808 his Honour was required to attribute liability for damage
caused by corrosion to coils of steel sheet in the course of voyages from Japan to Australia. The questions for adjudication were whether the damage had occurred because the
coils were inadequately packed or had resulted from the carriers’ lack of due
diligence in making the vessels seaworthy and to stow, carry and keep the coils
properly during the voyage. Those questions, in turn, raised the application
of the amended Hague Rules as defined in s 7 of the Carriage of Goods
by Sea Act 1991 (Cth).
At first instance, his Honour held the carriers
liable because he characterised each vessel as unseaworthy because it had not
been fitted with dehumidifiers. Alternatively, he considered that if the
ventilators, which were present on each vessel had been operated so as to
permit the ingress of water that was a failure to carry, keep and care for the
coils properly and carefully. By contrast, the carriers had contended that the
loss had resulted from “insufficiency of packing” within the exception erected
by Act 4(2)(a) of the Amended Hague Rules.
The carriers have appealed from his Honour’s
orders and a Full Court of the Federal Court has reserved its judgment on that
appeal.
