Bergensbanken ASA v the Ship "Aliza Glacial"

[1998] FCA 1642

CATEGORY: NO QUESTION OF PRINCIPLE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 53 of 1998

BETWEEN:

BERGENSBANKEN ASA
PLAINTIFF

AND:

THE SHIP "ALIZA GLACIAL"
DEFENDANT

AND:

AUSTRALIAN FISHERIES MANAGEMENT AUTHORITY
FIRST APPLICANT

COMMONWEALTH OF AUSTRALIA
SECOND APPLICANT

JUDGE:

RYAN J

DATE OF ORDER:

17 DECEMBER 1998

WHERE MADE:

MELBOURNE

MINUTES OF ORDER

THE COURT ORDERS:

1. That the Admiralty Marshal accept the highest tender received by him and conclude a sale of the vessel accordingly to Bergensbanken ASA.

1. That payment be made into the account styled “Federal Court of Australia (Official) – “ALIZA GLACIAL” Sale Account – VG 53 of 1998 – Account Number 006-61404-6” maintained by the Admiralty Marshal at the Reserve Bank of Australia, 45 St George’s Terrace, Perth.

1. That the Admiralty Marshal’s fees, expenses and costs including any reserved costs associated with the arrest and sale be taxed and when taxed be forthwith paid or retained out of the proceeds of the sale.

1. That the plaintiff file and serve by 19 February 1999 a bill in taxable form of its costs of this proceeding and of the arrest up to and including this day, and its costs in proceeding No VG 164 of 1998, wherein it was the second respondent, and that such bill be taxed as soon as practicable after 19 February 1999 and that the plaintiff’s costs as so taxed be paid out of the proceeds of sale after payment of the Marshal’s costs referred to in paragraph 3 of this Order.

1. That the applicants in proceeding No VG 164 of 1998 file and serve by 19 February 1999 a bill in taxable form in respect of the costs ordered to be paid from the proceeds of sale by this Court on 19 October 1998 (in proceeding No VG 164 of 1998) and that such bill be taxed as soon as practicable after 19 February 1999 and that such costs as so taxed be paid out of the proceeds of sale forthwith after payment of the Marshal’s costs referred to in paragraph 3 of this Order.

1. That there be judgment for the plaintiff in default of defence for all moneys recovered from the sale of the vessel after deducting therefrom the costs referred to in paragraphs 3, 4 and 5.

1. That on acceptance of the bid referred to in paragraph 1, Bergensbanken ASA pay the sum of $US450,000.00 to the Admiralty Marshal forthwith and the balance of the moneys payable by Bergensbanken ASA under the terms of the offer to purchase be offset against the judgment in favour of Bergensbanken ASA as ordered in this Court on 20 March 1998 thereby constituting full and final payment of the purchase price under the bill of sale.

1. That the conditions of sale and the bill of sale of the vessel prepared in accordance with paragraph 5 of the Order of Ryan J of 19 October 1998 be amended to conform with paragraph 7 of this Order.

1. That the Admiralty Marshal file and serve an account of all payments made out of the proceeds of sale in these proceeding by 5 March 1999.

1. That the application be adjourned before Ryan J at 10.15am on 7 April 1999.

1. That liberty be reserved to any party, to the Marshal and to the applicants in proceeeding No VG 164 of 1998 to apply to Ryan J on not less than 48 hours notice in writing to the other parties, the Marshal and the applicants in proceeding No VG 164 of 1998 as the case may require.

1. That the motion on notice dated 4 December 1998 by the Australian Fisheries Management Authority and the Commonwealth of Australia be dismissed.

Note:Settlement and entry of orders are dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 53 of 1998

BETWEEN:

BERGENSBANKEN ASA
PLAINTIFF

AND:

THE SHIP "ALIZA GLACIAL"
DEFENDANT

AND:

AUSTRALIAN FISHERIES MANAGEMENT AUTHORITY
FIRST APPLICANT

COMMONWEALTH OF AUSTRALIA
SECOND APPLICANT

JUDGE:	RYAN J
DATE:	17 december 1998
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

In reasons for judgment published on 19 October 1998, I explained why I considered it inappropriate to defer the sale of the vessel pursuant to the order which I made on 20 March 1998.  In those reasons I detailed the circumstances in which the ship has been kept at Rous Head in the port of Fremantle and the matters which militated against further deferring the sale.  Those matters led me to conclude, at page 8 of those reasons:

I have also been influenced by the rapidly accumulating costs of detaining the ship at Rous Head and the likelihood of a significant diminution in the price obtainable if the sale is deferred even for the limited period of about six months suggested on behalf of the Commonwealth.  As well, it is not to be forgotten that the interest on the loan secured by the mortgage over the ship in favour of the Bank is continuing to accrue and no proposal has been made to defray that accruing interest during the period for which any sale of the ship is deferred.  The principal amount of that loan, I have been told, is of the order of $US3.2 million.

Also on 19 October 1998, in consequence of earlier reasons for judgment published on 17 September 1998, I ordered that the application by Phillip Readhead, the Australian Fisheries Management Authority (“the AFMA”) and the Commonwealth of Australia (“the Commonwealth”) save for an order as to the costs of the application, be dismissed.  By motion on notice dated 4 December 1998, the AFMA and the Commonwealth sought:

1.The proceeds of sale of the ship, after payment of the costs and expenses of arrest and sale in accordance with Order 7 of the Orders of Justice Ryan made 19 October 1998, remain in Court pending further order.

2.Such other orders as are appropriate.

However, as pressed by Mr Cosgrave of Counsel who appeared for them this morning, it was clear that the real concern of the AFMA and the Commonwealth was to obtain a stay of the completion of the sale of the vessel pending the hearing and determination of their appeal against my order of 19 October 1998.  A notice of appeal against that order was filed on 6 November 1998. 

It will be recalled that, in my reasons for judgment of 19 October 1998, I described in these terms the evidence in relation to Captain Miranda, the Fishing Master of the vessel:

The Court has also been provided with a copy of a letter dated 7 July 1998 from Captain Miranda from an address in the Province of Buenos Aires in Argentina to the Court of Petty Sessions at Perth apologising for his inability to attend on 7 July 1998.  In effect, Captain Miranda explained that the owners of the ship, Ravenor Overseas, had failed to contact him or supply him with a ticket to Australia.  As well, it was indicated that the same owners owed Captain Miranda some months’ unpaid salary.  His letter concluded:

My wish is to appear under the court in order to fulfil with the law.  I waiting yours instruction about what to do as soon as possible in order do not have any problems in the future.

It seems to be common ground that the trial of Captain Miranda and the other defendant for offences against ss 100 and 101 of the [Proceeds of Crime] Act [1987] [“POCA”] has to be on indictment unless the defendants consent to a summary hearing.  Therefore, the only prospect of the trial being brought to a conclusion and an application for forfeiture of the ship under the Act being made depends on the defendants’ returning to Australia.  The remoteness of that prospect and the many difficulties which stand in the way of the ship’s being confiscated under the POCA have influenced me not to defer any further the sale of the ship.

Further evidence adduced in support of the notice of motion of 4 December 1998, discloses that in a letter to Captain Miranda dated 8 September 1998, the AFMA said:

The failure to attend court by both yourself and Mr Andreassen, officers of the fishing vessel Aliza Glacial, has left the matter unresolved.  It is encouraging though that you wish to appear in court so that we may be able to bring this matter to a conclusion.  In your letter you advise that the company which operated the vessel, Ravenor Overseas, has not contacted you or provided you with a ticket and that it is impossible for you to buy a ticket yourself.  You may be interested that Ravenor Overseas has ceased instructing legal representatives in Perth on 2 July 1998.  In view of all these factors, AFMA is prepared to fund your travel to Perth.

The prosecution is presently proceeding under indictment and it is at the preliminary (committal) hearing stage with no plea having yet been entered.  Following consideration of the material provided by the DPP, and taking legal advice, your response to the DPP will impact on the amount of time required in court and how soon a hearing can be scheduled before the court. Please advise when you will be available to travel.

After contact was established with Captain Miranda’s wife, (Captain Miranda being away fishing), the Australian Embassy in Buenos Aires was advised on 10 December 1998 that whether Captain Miranda would return to Australia would depend on advice to be received from “the company lawyer based in London”.

A further affidavit sworn this day by Peter Venslovas, an officer of the AFMA, discloses that “the company lawyer” whose advice Captain Miranda was to seek was Mr Michael Kearns of the firm of D W Roberts, St Heller, Jersey, Channel Islands.  The affidavit of Mr Venslovas concludes with this paragraph:

I am advised by Mr Mark Fletcher, the responsible case officer of the Office of the Director of Public Prosecutions in Perth and verily believe that the charges brought against Mr Miranda under sections 100(1) and 101(1) of the Fisheries Management Act 1991 (Cwth) are currently awaiting preliminary hearing in the Court of Petty Sessions.  The Court of Petty Sessions returns from the Christmas break on 4 January 1999.  In the event of Mr Miranda returning to Australia and indicating that he wants to plead guilty to the charges the matter could be brought before the Court of Petty Sessions on 4 January 1999 or soon thereafter.  On entering his plea of guilty, Mr Miranda would be committed to the District Court pursuant to section 101(2) of the Justice Act 1902 (WA) for sentence.  The District Court returns from the Christmas break on 12 January 1999 and the matter could be dealt with at short notice on that date or soon thereafter.

I have further been informed by Mr Cosgrave that the AFMA and the Commonwealth propose to seek leave to amend their notice of appeal to make it refer more explicitly to my orders of 18 September and 19 October 1998.  However, I am not persuaded, on a consideration of the whole of the new facts which have been placed before the Court, to stay the implementation of my earlier order for the sale of the vessel.  I shall endeavour to indicate in a summary fashion the considerations which have induced me to exercise my discretion in that way.

In the first place, I consider it to be no more than a remote likelihood that Captain Miranda will be advised to take advantage of the offer of unspecified funding for his “travel to Perth” and return to Australia in 1999. Moreover, it is even less likely, without some firm assurance as to the outcome, that Captain Miranda would be advised to plead guilty so as to achieve an early committal to the Western Australian District Court whereupon he would be exposed to liability to pay a fine not exceeding $25,000.  In the unlikely event that Captain Miranda did agree, with no apparent benefit to himself, to expose himself to that penalty, it would be not before the end of January 1999 that the District Court of Western Australia would be in a position to consider whether or not to order forfeiture of the vessel.

Secondly, although an offer has been made on behalf of the AFMA and the Commonwealth to pay the continuing costs of maintaining the vessel in detention at Rous Head, no undertaking has been given in respect of the other damages which the plaintiff would incur if the stay were granted and the pending appeal were to be dismissed.  Those damages would include accruing interest under the mortgage over the vessel in favour of the plaintiff bank and any diminution in value of the vessel between now and the determination of the appeal.  Since the plaintiff bank has been, by a very large margin, the highest bidder for the vessel, it is reasonable to suppose that, if the bank did not renew its bid, those damages alone would be of the order of US$3 million. 

In addition, the factors to which I have referred in my earlier reasons for judgment as contributing to a deterioration in the physical condition and operating capacity of the vessel will continue to apply with undiminished force into the future.

As well, the orders which I have made this day providing for a sale of the vessel to the plaintiff bank, ensure that the purchaser, instead of being a third party taking without notice of the interest claimed by the AFMA and the Commonwealth, will be a party to the appeal.  Accordingly, the plaintiff bank will remain, to some extent at least, amenable to any orders which the Full Court may decide to make.

It was for all of these reasons that I decided to refuse to defer the implementation of the order which I previously made for the sale of the vessel.

I certify that this and the preceding four (4) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan.

Associate:

Dated:             17 December 1998

Counsel for the Plaintiff:	Mr J R Birrell
Solicitors for the Plaintiff:	Mallesons Stephen Jaques
Counsel for the Defendant:	No appearance
Solicitors for the Defendant:	No appearance
Counsel for the Australian Fisheries Management Authority and Commonwealth of Australia (Applicants in motion on notice dated 4 December 1998):	Mr P J Cosgrave
Solicitors for the Australian Fisheries Management Authority and Commonwealth of Australia (Applicants in motion on notice dated 4 December 1998):	Australian Government Solicitor
Mr J Wood, Deputy Marshal appeared for the Marshal
Date of Hearing:	17 December 1998
Date of Judgment:	17 December 1998