British Marine PLC v Wollongong Coal Ltd - [2015] FCA 403

FEDERAL COURT OF AUSTRALIA
British Marine PLC v Wollongong Coal Limited [2015] FCA 403

Citation: British Marine PLC v Wollongong Coal Limited [2015] FCA 403

Parties: BRITISH MARINE PLC v WOLLONGONG COAL LIMITED ACN 111 244 896 and ARUN KUMAR JAGATRAMKA

File number(s): NSD 2347 of 2013

Judge(s): BUCHANAN J

Date of judgment: 30 April 2015

Catchwords: ADMIRALTY – contract of affreightment between plaintiff and third party to ship coking coal from Australia to India – where plaintiff alleges first defendant liable for cost of freight under a contract of affreightment – where second defendant purported to proffer, on behalf of the first defendant, a letter of guarantee by the first defendant for amounts owing – whether letter of guarantee was an offer capable of acceptance which would create contractual obligations – whether second defendant had actual or apparent authority to bind the first defendant – whether plaintiff relied on letter of guarantee to discharge cargo – whether first or second defendant engaged in misleading and deceptive conduct – whether contributory negligence by the plaintiff or involvement of concurrent wrongdoers – whether claims apportionable

Legislation: Competition and Consumer Act 2010 (Cth), ss 5(1)(i), 5(3), Sch 2
Evidence Act 1995 (Cth), s 190

Cases cited: Auskay International Manufacturing & Trade Pty Ltd v Qantas Airways Ltd (2008) 251 ALR 166
Battenberg v Restom [2007] FCAFC 195
Bell IXL Investments Ltd v Life Therapeutics Ltd (2008) 68 ACSR 154
Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1
Castel Electronics Pty Ltd v Toshiba Singapore Pte Ltd (2011) 192 FCR 445
Combulk Pty Ltd v TNT Management Pty Ltd (1993) 41 FCR 59
Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640
Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480
Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd (2013) 247 CLR 613
Logue v Hansen Technologies Ltd (2003) 125 FCR 590
Luxton v Vines (1952) 85 CLR 352
Natureland Parks Pty Ltd v My-Life Corporation Pty Ltd (1996) 67 FCR 237
Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451
Pourzand v Telstra Corporation Ltd [2014] WASCA 14
Re Taylor; Ex parte Natwest Australia Bank Ltd (1992) 37 FCR 194
Richard Brady Franks Ltd v Price (1937) 58 CLR 112
Shrimp v Landmark Operations Ltd (2007) 163 FCR 510
Stern v National Australia Bank [1999] FCA 1421
Tisdall v Webber (2011) 193 FCR 260
Yamaji v Westpac Banking Corporation (No 2) (1993) 42 FCR 436

Dates of hearing: 28, 29, 30, 31 July 2014; 1 August 2014; 22, 23 September 2014; 8, 9 December 2014; 16, 17, 25 March 2015

Place: Sydney

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 355

Counsel for the Plaintiff: Mr E G H Cox with Mr T E O’Brien

Solicitor for the Plaintiff: Norton White

Counsel for the First Defendant: Mr C H Withers with Mr P A Meagher

Solicitor for the First Defendant: Holding Redlich

Counsel for the Second Defendant: Mr A M Stewart SC with Ms J A Soars (28, 29, 30 and 31 July 2014; 22, 23 September 2014) and with Mr A J Macauley (8, 9 December 2014; 16, 17, 25 March 2015)

Solicitor for the Second Defendant: Barringer Leather Lawyers

Table of Corrections

4 May 2015 In paragraph 167, “north” has been changed to “south”.

6 November 2015 The Counsel appearance for the Second Defendant has been corrected.

IN THE FEDERAL COURT OF AUSTRALIA

IN ADMIRALTY

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 2347 of 2013

BETWEEN:
BRITISH MARINE PLC
Plaintiff

AND:
WOLLONGONG COAL LIMITED ACN 111 244 896
First Defendant

ARUN KUMAR JAGATRAMKA
Second Defendant

JUDGE:

BUCHANAN J

DATE OF ORDER:

30 APRIL 2015

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.The further amended application be dismissed with costs.
2.The cross-claim by the second defendant against the first defendant be dismissed.
3.The cross-claim by the first defendant against the second defendant be dismissed.
4.There be no order as to costs of the cross-claims.

Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA

IN ADMIRALTY

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 2347 of 2013

BETWEEN:
BRITISH MARINE PLC
Plaintiff

AND:
WOLLONGONG COAL LIMITED ACN 111 244 896
First Defendant

ARUN KUMAR JAGATRAMKA
Second Defendant

JUDGE:

BUCHANAN J

DATE:

30 APRIL 2015

PLACE:

SYDNEY

REASONS FOR JUDGMENT
The pleadings in outline

In these proceedings the plaintiff (“British Marine”) initially sued the first defendant (now “Wollongong Coal”) upon an asserted guarantee dated 3 October 2013 whereby, British Marine asserted, Wollongong Coal contracted to assume specified obligations owed to British Marine by Gujarat NRE Coke Limited of Kolkata (“Gujarat India”) under a contract of affreightment made between British Marine and Gujarat India on 16 September 2008 at London. The obligations which were asserted to have been assumed related to payment of freight for bulk coal shipped from Port Kembla, New South Wales to India on the vessels “Volumnia” and “Wadi Alkarm” in circumstances to which further attention will be given in due course.
In the alternative, British Marine sued Wollongong Coal for misleading and deceptive conduct within the meaning of s 18 of the Australian Consumer Law (Sch 2 to the Competition and Consumer Act 2010 (Cth)).
By the first of a number of amendments to the pleadings, British Marine also sued the second defendant (Mr Jagatramka) for breach of warranty of authority. Mr Jagatramka was, on 3 October 2013, Executive Chairman of Wollongong Coal (then called Gujarat NRE Coking Coal Limited). British Marine claimed that when Mr Jagatramka signed the asserted guarantee he warranted to British Marine that he had authority to bind Wollongong Coal. If, as Wollongong Coal pleaded by its initial defence, Mr Jagatramka had no authority to bind Wollongong Coal then British Marine asserted he was personally liable for breach of his warranty of authority. Later, by a further amendment to its pleaded case, British Marine also sued Mr Jagatramka on the basis that he was “involved” in the misleading and deceptive conduct pleaded against Wollongong Coal and also sued him directly for misleading and deceptive conduct.
Towards the end of the evidence, Mr Jagatramka filed a cross-claim against Wollongong Coal relying upon a policy of insurance which indemnified him for acts done in his capacity as director, except with a lack of good faith. Wollongong Coal’s defence to the cross-claim asserted a lack of good faith. Wollongong Coal then filed a cross-claim against Mr Jagatramka, relying principally on the allegation of lack of good faith, claiming he had acted in breach of his duties as a director of Wollongong Coal and claiming compensation from him for any loss Wollongong Coal might suffer as a result.
Gujarat India had been the parent company of Wollongong Coal and Mr Jagatramka held a position of authority in each. However, on about 16 October 2013, control of Wollongong Coal effectively passed into other hands and Mr Jagatramka ceased to have authority in that company. Wollongong Coal says that when the document upon which British Marine relies came into the possession of British Marine Mr Jagatramka was, to the knowledge of British Marine, no longer in any position of authority.
Wollongong Coal in any event denies that there was any contract of guarantee as alleged and says that British Marine did not rely (or should not have relied) on any suggestion that Wollongong Coal would assume liability for debts owed to British Marine by Gujarat India.
Wollongong Coal has also identified the following alleged concurrent wrongdoers who, it asserts, bear effective responsibility for any loss or damage suffered by British Marine: Mr Jagatramka; Saigal SeaTrade (P) Ltd Mumbai (“Saigal SeaTrade”), an independent broker involved in the commercial transactions at the heart of the present dispute; Mr Ian Hawkes, a partner in the law firm of Moore Fisher Brown (“MFB Solicitors”) of London who provided advice to British Marine on 4 November 2013 that the letter dated 3 October 2013 (on which British Marine now sues) appeared to be a valid guarantee; and MFB Solicitors.
Of the asserted concurrent wrongdoers, only Mr Jagatramka has been joined as a party to the proceedings.
Mr Jagatramka’s defence seems to concede that Wollongong Coal is liable to British Marine for the particular debts of Gujarat India (it is in his interest to take that position) but he denies that the letter dated 3 October 2013 was a guarantee or that he gave any guarantee on behalf of Wollongong Coal. He also has suggested that his liability, if any, should be reduced because there were concurrent wrongdoers. There are a number suggested. I will refer to them again in due course.
Although I will discuss the various causes of action in more detail later in this judgment, it will be necessary to make some observations and findings about some factual matters as those facts are outlined and discussed. There are some matters of fact to which the evidence was directed, and which I will discuss, which will make little final contribution to any assessment of suggested legal liability arising from the pleadings.
The facts, as I discuss them hereunder, are those which, in my view, the evidence establishes. The legal principles to be applied to them to resolve the present case are not particularly complex and they are more confined in scope than the arguments of the parties would suggest. Despite some complexities arising from the fluid nature of the commercial interactions, I am satisfied that the basic factual position is not too difficult to discern.
Wollongong Coal and Gujarat India
Gujarat India produces metallurgical coke. It needs coal to do so. Mr Jagatramka is its Chairman and Managing Director. He is also its major shareholder. Mr Jagatramka’s personal interests are directly connected with the interests of Gujarat India.
Until October 2013, Gujarat India was the majority shareholder in Wollongong Coal (which, as earlier indicated, bore the “Gujarat” name). From September 2011, until a date in October 2013, Mr Jagatramka was Executive Chairman of Wollongong Coal. He exercised a good deal of day-to-day control and discretion. He ceased, formally, to be Executive Chairman on 26 October 2013 but, as the evidence showed, he regarded himself as having been removed from any real authority on about 16 October 2013. That date, and the effective removal of Mr Jagatramka’s powers of decision at Wollongong Coal, are important matters in an understanding of events as they unfolded.
It will be necessary to return in more detail to the change in management of Wollongong Coal in due course.
The contract between Gujarat India and Wollongong Coal
The events which generated the present proceedings arose from shipments of coal from Port Kembla on the Volumnia and Wadi Alkarm. It is the shipment on the Wadi Alkarm which requires detailed attention. The shipments were amongst a number which were subject to the terms of a contract between Gujarat India and British Marine for the shipment of coal which will be explained in due course. The shipments arose from a contract between Gujarat India and Wollongong Coal for the sale and supply of coal, as described hereunder.
On 11 May 2007, Gujarat India contracted with Wollongong Coal (under an even earlier name – India NRE Minerals Limited) to provide coal on specified terms. The price was to be the “Queensland hard coking coal price agreed with the Japanese Steel Mills on an annual basis”. Price was to be FOB. Risk was to pass to Gujarat India as coal passed the rail of the loading vessel, but title was to pass upon payment “in accordance with this Agreement”.
Clause 5 provided:
5.        PAYMENT
5.1      Credit Facilities
[Gujarat India] shall establish credit facilities for all shipments of Product under this Agreement.
Payment shall be made to [Wollongong Coal] against credit facilities established by [Gujarat India] for 100% of the FOB value of the Product.
5.2      Drawdown
[Wollongong Coal] may draw against such credit facilities to be payable for 100% of the invoice value of the Product supplied upon presentation of appropriate documentation.
The arrangements for Wollongong Coal to draw against credit facilities put in place by Gujarat India were subject to recovery from Wollongong Coal by Gujarat India’s bankers if Gujarat India failed to comply with the credit arrangements. Those recovery arrangements were used in the case of the Wadi Alkarm shipment, as I will indicate.
It later suited Gujarat India and Wollongong Coal to convert the payment terms to “C&F” (or CFR). The shipments on both the Volumnia and the Wadi Alkarm were subject to this change, but it will suffice to indicate the particular arrangements for the Wadi Alkarm.
In a contract note dated 1 July 2013, the contract price for the shipping period 1 July 2013 to 30 September 2013 for 200,000 tonnes was fixed at US$67 per metric tonne FOB, with the option to convert to C&F. By an addendum dated 30 July 2013, the contract price for 70,000 tonnes (the Wadi Alkarm shipment) was converted to US$92 per metric tonne C&F. The freight component of this amount was US$25 per metric tonne, which was said by Mr Jagatramka in his evidence to include “a slight margin of profit” for Wollongong Coal (US$0.766 per metric tonne for that shipment). Mr Jagatramka explained that the change from FOB to “CFR” was made to avoid the need for separate regulatory approval of a foreign (rather than Indian) vessel which might be required for a FOB contract.
The contract note for the shipment to be carried by the Wadi Alkarm specified 70,000 MT (+/- 10%). The shipment loaded in September 2013 was 66,762 MT.
Although, so far as British Marine was aware, the whole of this shipment was destined for Gujarat India, in fact arrangements were made, first, for Wollongong Coal to directly sell 22,000 tonnes (+/- 10%) of the shipment to another Indian company, Concast Global Limited (“Concast”) at the same price, US$92 MT C&F. However, the initial contract with Concast had specified a selling price of US$105 MT with Wollongong Coal entitled to draw 90% against an irrevocable letter of credit. Payments were received in the bank account of Wollongong Coal, under those arrangements on 31 May 2013 and 3 June 2013 of US$992,250 on each occasion, representing the great bulk of the finally agreed payment of $US92 MT. When the Concast coal was loaded on the Wadi Alkarm (total 21,600 MT) as part of the total shipment of 66,762 MT, two further invoices were raised for US$1350 each, representing the balance due from Concast. Payment was due, probably after 180 days. The evidence did not show actual receipt by Wollongong Coal, but the amount is trivial for present purposes.
The balance of the shipment loaded on the Wadi Alkarm (45,162 MT) was sold by Gujarat India on the high seas through an intermediary to yet another Indian company Sona Alloys Pvt Ltd (“Sona Alloys”). That was also unknown at that time to British Marine. That sale did not affect the liability of Gujarat India to Wollongong Coal for this part of the shipment and Wollongong Coal rendered an invoice on 9 September 2013 to Gujarat India for US$4,154,904, together with the necessary supporting documents. Mr Jagatramka’s evidence was (from his recollection) that under the bill discounting facility which Gujarat India had with its banker, payment would have been available to Wollongong Coal shortly thereafter and was taken by Wollongong Coal around 1 October 2013. However, failure by Gujarat India to make payment to its bank within 180 days (by 7 March 2014) would result in the entries being reversed and Wollongong Coal being liable to repay. That is apparently what happened.
Bills were presented (8 x US$460,000 and 1 x US$474,904) totalling US$4,154,904. Wollongong Coal initially received into its bank accounts on 1 October 2013 six amounts of US$460,000, one of US$457,500 and one of US$390,000, a total of US$3,607,500. Mr Jagatramka volunteered that the bill discount limit may have cut in and reduced some of the payments due, but it is clear in any event that total payment was withheld or not made. The payments received were later retrieved when, it may be inferred, Gujarat India failed to honour its arrangements with its bank.
Although it does not bear on any question of liability, the arrangement which Gujarat India negotiated with Sona Alloys, according to Mr Jagatramka, was that Sona Alloys would pay by allowing a credit against an existing debt owed by Gujarat India as it took delivery of the coal. Mr Jagatramka estimated that 45 or 50% of the sale price was exchanged in this fashion, but the balance of the value of the sale had not been realised due to a lien British Marine had exercised over a portion of the coal shipped on the Wadi Alkarm, the circumstances of which I will explain in due course.
The end result, in practical terms, is that Wollongong Coal was paid by Concast for 21,600 MT. It was not paid by Gujarat India for the balance of the shipment.
One further matter might be mentioned here. As will be seen, the arrangements for the use of the Wadi Alkarm arose under a contract between British Marine and Gujarat India, which will be discussed next. On 25 November 2013, Gujarat India’s broker, Saigal SeaTrade, forwarded a document to British Marine “for Owners counter-signature”. The document purported to be a “Fixture Note Dated 26th July 2013”. It bore the signature of Mr Jagatramka as Executive Chairman of Wollongong Coal. It purported to record a contractual agreement between British Marine and Wollongong Coal whereby Wollongong Coal would bear direct liability for the cost of carriage of a shipment of 70,000 MT. The proposal bears the appearance of an attempt to retrospectively adjust rights which, by then, were the subject of the present proceedings.
There are some curiosities which should be mentioned. One is that the covering email referred to the Wadi Alkarm, but the attached document referred to the Volumnia. The fixture referred to was to take place (as recorded by the proposed fixture note) between 14 and 23 August 2013. The Volumnia was in fact loaded in March 2013. The Wadi Alkarm, on the other hand, was nominated by Gujarat India on 30 July 2013 and her delayed loading occurred on 6 September 2013.
I am satisfied, therefore, that the proposal for countersignature of the “Fixture Note Dated 26th July 2013” was an invitation to British Marine to participate in an attribution of liability to Wollongong Coal concerning the Wadi Alkarm shipment which had been loaded and despatched more than two months before the proposal. Indeed, as I have said, these proceedings had been commenced before the proposal was offered to British Marine for its acceptance.
The document forwarded by Saigal SeaTrade was not countersigned by British Marine. Mr Jagatramka vacillated about whether he signed the proposal or did not sign it, whether it was signed around the date of the email and whether he had ever seen it before. It is one only of a number of documents transmitted by Saigal SeaTrade to one or other of the parties to the proceedings at various times which are open to the charge of being misleading or dishonest in their intent. Others will be referred to in due course. Mr Jagatramka’s participation in this attempted duplicity, evidenced by his signature on the document, is manifest.
The contract of affreightment

British Marine owns and operates ships. British Marine is based in London and has offices in Singapore and Mumbai. In 2008 it owned 14 vessels and chartered in about 30 to 35 from other owners, according to the evidence of its founder and CEO, Mr Alan Bekhor.
In 2008 British Marine was introduced to Gujarat India by Saigal SeaTrade, which thereafter acted as broker in dealings between the two companies and was the usual medium of communication between them. It is important to indicate at once that I am satisfied that Saigal SeaTrade was not the agent of Wollongong Coal. Indeed, I am satisfied, for reasons which will require explanation, that Saigal SeaTrade commenced to act, from about mid‑October 2013 against the interests of Wollongong Coal, probably to serve the personal interests of Mr Jagatramka and the commercial interests of Gujarat India.
There were, it will be seen, occasions on which Saigal SeaTrade expressly disclaimed any role as agent by endorsing its communications “as brokers only”.
On 16 September 2008, when the international freight market was buoyant, British Marine and Gujarat India entered into a contract of affreightment (also referred to hereunder as the charter party) on the Americanized Welsh Coal Charter form. The charterer was Gujarat India or its “guarantee nominee”. No nominee was ever appointed. The contract called for four cargoes per year of 70,000 MT of bulk coking coal to be shipped from any of five Australian ports (Hay Point, Gladstone, Abbot Point, Newcastle and Port Kembla) to any of a number of ports in India. The contract period was 1 April 2009 to 31 March 2014 (i.e. 5 years, 20 shipments).
Clause 25 provided:
25.Charterer shall have the privilege of transferring part or whole of the Charter Party to others, charterer guaranteeing to the Owner due fulfillment of this Charter Party.
Clause 29 provided that, on payment of freight, Saigal SeaTrade was to be paid by British Marine a commission of 2.5% on specified gross amounts – freight, dead freight, demurrage and BAF. It is not suggested that Saigal SeaTrade was thereby rendered the agent of British Marine.
There were adjustments made to the contract by a series of addenda. The 7^th lifting was, by addendum 3-A, deemed to be “washed out” on payment by the charterers (Gujarat India) of lump sum compensation of US$275,000. This is worthy of mention for the reason that invoices (a first dated 21 March 2011 and then a second dated 4 April 2011) were sent out to Wollongong Coal for this amount. There were two other isolated instances where this occurred. On 12 October 2010, a revised invoice for the 5^th lifting (MV “FD Isabella”) was apparently issued in the name of Wollongong Coal, but it was forwarded by Saigal SeaTrade to Gujarat India for attention. On 13 November 2013, solicitors for Wollongong Coal made a claim on Gujarat India for satisfaction of an invoice dated 30 September 2013 (US$274,349.56) in the name of Wollongong Coal. However, this invoice (relating to the Volumnia) related to a debt invoiced to Gujarat India on 14 August 2013 (US$273,225.18) and invoiced again to Gujarat India (US$274,349.56) also on 30 September 2013. I think it likely, having regard to its timing and matters I shall discuss later, that this invoice in the name of Wollongong Coal was a fabrication, although it is not necessary to reach any final conclusion about that particular document.
So far as the evidence showed, these odd examples appear to be the only invoices rendered (or copied) to Wollongong Coal in its own name. All others, reflecting the obligations under the charter party, were rendered to, and in the name of, Gujarat India.
I shall separately identify some other invoices which appear to me to have been falsified by Saigal SeaTrade and then sent to Wollongong Coal. They were not issued by British Marine which, until it claimed the benefit of a separate guarantee, looked invariably to Gujarat India for payment.
However, as a matter of commercial practice, although invoices were rendered to Gujarat India payment was made to British Marine by Wollongong Coal when it was under the control of Gujarat India and Mr Jagatramka. That occurred for lifts which were washed out and for shipments made.
Apart from the 7^th lift, referred to above, the 6^th lift was agreed to be washed out also, on payment of US$400,000. Although there is no invoice in evidence, this payment was made by Wollongong Coal.
Aside from the first shipment, which was from Gladstone and Hay Point, the subsequent shipments appear to have been from Port Kembla (one took coal also from New Zealand). There is no record of payment of freight for the first shipment in evidence. The records before the Court are incomplete, and there may have been occasions of part payment only, but it appears that, thereafter, when coal was shipped from Port Kembla, it was Wollongong Coal which transferred payment to British Marine.
That general practice accords with the evidence given by Mr Jagatramka, and it is not contradicted by any other evidence. Mr Jagatramka said, at one point in his evidence:
--- … I don’t think anybody in the chain, including us or Saigal, were ever clear about the two companies as separate, because the business was, how – what I would call, like, a vertically integrated resource business.
The arrangements between Gujarat India and Wollongong Coal were of no legal significance to British Marine. Even if Wollongong Coal had been appointed Gujarat India’s “guarantee nominee”, or if the charter party had been transferred in whole or in part, Gujarat India would remain liable under the contract made on 16 September 2008. British Marine conducted itself at all times in accordance with this view of its legal position. During the commercial conflict which developed in late 2013, which has led to the present litigation, it rendered its invoices to, and only to, Gujarat India.
I am satisfied that, as between the various parties, the internal arrangements between Gujarat India and Wollongong Coal, whereby coal was shipped on a CFR, rather than FOB, basis and funds were then transferred to British Marine by Wollongong Coal on behalf of Gujarat India, had no effect on the legal rights and obligations under the charter party and did not commit Wollongong Coal legally to British Marine.
The Volumnia debt
The global financial crisis at the end of 2008 placed strain on the international freight market. Mr Bekhor explained:
--- … As many people in this room will be aware, there was a crash at the end of 2008 and that led to a certain amount of strain in the freight market. Many companies defaulted, some went out of business altogether. Some of the stronger ones, some of the more reputable ones honoured their contracts in full. There were a number of – there were a number of contractors who came and asked for renegotiations, asked for lower prices. …
Both Mr Jagatramka and Mr Bekhor referred to delays in complying with obligations under the contract during 2010 and 2011. First, according to Mr Bekhor, there were delays in nominations. Addenda to the charter party reflect adjustments which were agreed on 5 October 2011. Three remaining shipments for 2011 were to be postponed. Two were to be performed in 2012 (therefore six lifts in 2012) and one in 2013 (therefore five lifts in 2013).
There were also delays in payments. The charter party called for 95% of freight to be paid within five banking days of “signing/releasing Bill(s) of Lading and completions [sic] loading and sailing of the vessel”, and invoices were rendered to Gujarat India on that basis. The balance was due 30 days after discharge. Those payments were being postponed.
Mr Jagatramka said that, going into 2013, payments by Wollongong Coal to various creditors were being prioritised, and delayed where possible.
Matters came to a head, between British Marine and Gujarat India (and Mr Jagatramka) in early 2013.
On 20 February 2013, the Volumnia was nominated to load 70,000 MT of bulk coking coal at Port Kembla, to be discharged at Bedi, India. The Volumnia loaded on 25 March 2013. An invoice for 95% freight issued on 28 March 2013. Payment was not immediately made. In addition, payment was outstanding from a previous shipment carried by the MV “Dragon”. On 29 April 2013, a payment was made by Wollongong Coal which addressed the freight payment due for the Volumnia and part only of the payment due for the Dragon. In addition, demurrage charges incurred by the Volumnia remained unpaid.
On 21 June 2013, a meeting was held at the British Marine office in London. Minutes were taken, and circulated on 24 June 2013. Mr Bekhor and Mr Peter Johnson attended for British Marine, Mr Jagatramka and Mr Nitin Daga attended for Gujarat India and Saigal SeaTrade was represented by Mr Deepak Saigal. The minutes record the following:
Gujarat Nre expressed their gratitude to British Marine for their support and advised them of the tough time they are going through and the reasons for same.
British Marine also expressed that they need to have the old outstanding paid at the earliest and also need new nominations which are long overdue.
It was then agreed as follows.
1.Gujarat Nre to arrange to settle the old outstanding latest by 31st July together with interest on the delayed payment to be calculated from overdue dates.
2.Gujarat Nre to give next nomination in Aug. 13. There after to give at least 2 more nominations between Sept to Dec.
Further Gujarat Nre requested if British Marine could consider investment in the Australian company with favorable terms to be discussed.
In his evidence in chief, Mr Bekhor accepted that he regarded Mr Jagatramka to be present as the representative of Gujarat India, as the minutes record, and not as the representative of Wollongong Coal. In cross-examination he asserted to the contrary. I do not accept that the evidence given in cross-examination represented Mr Bekhor’s true belief. British Marine’s consistent position, and his, was that its legal relationship was with Gujarat India and that it was Gujarat India which was in default. British Marine did not regard itself, at that time at least, as having any legal relationship with Wollongong Coal.
Mr Jagatramka asserted that he was representing both Gujarat India and Wollongong Coal. Perhaps there was an element of practical truth in this assertion because, at a practical level at least, any failure to pay was being implemented through Wollongong Coal. However, I am satisfied that Mr Jagatramka had no misunderstanding about the legal position, and that he understood that it was Gujarat India which was in contractual default and on whose behalf he was negotiating in the meeting.
There is no legal consequence, in any event, from beliefs (much less assertions) about representation at this meeting. Its practical significance is that it opened the way to the nomination of the Wadi Alkarm for the next shipment, based on promises to pay the outstanding amounts.
It appears likely that the balance of the debt arising from use of the Dragon was paid on 1 August 2013, but the remaining debt from the Volumnia was still outstanding when the Wadi Alkarm sailed with its cargo. That debt was reinvoiced to Gujarat India on 14 August 2013, at US$273,225.18.
The Wadi Alkarm
The Wadi Alkarm was nominated on 30 July 2013 to carry 70,000 MT to New Mangalore. She was loaded with 66,762 MT of coking coal on 6 September 2013. She sailed on 18 September 2013, in circumstances where British Marine claimed a right to payment of “dead freight” for freight not loaded. On 11 September 2013, British Marine invoiced Gujarat India for 95% of freight (including dead freight) payable: US$1,715,161.35.
As a matter of practice, Mr Bekhor pressed for payment in accordance with the terms of the charter party, but he was philosophical about the commercial realities. Both his commercial interests, and his commercial leverage, came together most substantially when a vessel arrived off a port for discharge. He said in his evidence in chief:
---The contract called for the payment of freight, I think within three days after loading of the vessel in Australia and invariably we would never get paid three days after. We would get paid sometime in the course of the voyage. And it wouldn’t necessarily represent a problem for us as long as we were paid before the ship got to the discharge destination.
Right?---Because it was at that point where we would start to have to incur additional hire.
The position was complicated in India due to the possibility that a lien over cargo might be defeated if a ship came within port limits and was arrested at the behest of the possessor of bills of lading. Accordingly, Mr Bekhor was reluctant to allow a ship to enter an Indian port before initial payment (i.e. usually 95%) had been made. Mr Bekhor had received advice that under Indian law a receiver with a bill of lading had priority over the holder of a cargo lien. His evidence was:
---We would lose control of the cargo in the event that we allowed the ship to discharge. Now, in most jurisdictions, the lien could be exercised. In this case, because we were not the actual head owners, we were told that there might be a question mark over whether the lien would get accepted. And that’s specific to India because there is a danger that the receiver could put pressure on the port to arrest the vessel and to arrest the cargo and we didn’t want to be faced with that situation. So that was one of the considerations we had.
This belief explained some steps Mr Bekhor took in due course to obtain the co‑operation of the ultimate owners of the Wadi Alkarm cargo, Concast and Sona Alloys, to which I will refer later. Subject to those considerations, however, Mr Bekhor’s position was that he could cause the ship to sit outside the port and refuse to discharge indefinitely, until British Marine was paid. He did not believe, as a practical matter, that the ship could be sent elsewhere. He also needed sometimes to take into account the fact that British Marine might become liable to additional payments of hire to the owner of any ship it had chartered in, which was delayed in this fashion. That is what was in prospect for the Wadi Alkarm if it was delayed.
On 30 September 2013, an updated invoice was issued to Gujarat India for the Volumnia debt: US$274,349.56.
In an exchange of emails through Saigal SeaTrade in early October 2013, Gujarat India was warned that the Wadi Alkarm would not be discharged until all outstanding invoices had been paid. There were some unproductive attempts by Gujarat India to suggest that British Marine or the head owners of the Wadi Alkarm had been responsible for a delay in sailing. They are relevant only to indicate that each side was negotiating as a direct party to the contract between them, and without any suggestion of recourse against Wollongong Coal on either side.
On 8 October 2013, Gujarat India advised that it proposed to discharge about 25,000 MT at New Mangalore, and the balance at Mundra. A revised invoice was issued to Gujarat India on 8 October 2013 to accommodate this proposal: US$1,888,560.10.
On 9 October 2013, Gujarat India was advised that no discharge would occur until total freight for Wadi Alkarm and outstanding debt for Volumnia had been paid: total US$2,524,074.56.
On 11 October 2013, Gujarat India offered to make an initial payment of US$1,000,000 before first discharge, with the balance paid before second discharge. British Marine counter offered that it would accept US$1,685,973.16 (the Volumnia outstandings, 100% freight for first discharge and dead freight) with the balance outstanding. On 12 October 2013, Gujarat India replied that it could not send any funds from Australia “on account of impending Board/shareholders meeting”, but offered to pay a deposit equivalent to US$1,000,000 in Indian Rupees.
The offer was rejected. British Marine offered to accept payment excluding the Volumnia debt: US$1,411,583.60.
The Wadi Alkarm arrived on 13 October 2013 and tendered a Notice of Readiness. British Marine reverted to its demand for US$1,685,973.16. On 17 October 2013, Saigal SeaTrade was asked to convey the following message to Gujarat India:
Kindly convey the following to charterers
We are yet to received swift details for remittance of USD 1,685,973.16 as per our email of 11/10/13.
Meanwhile, vessel continues to wait and all waiting time to count as laytime.
Before the description of events concerning the Wadi Alkarm continues, it is necessary to provide details about the change of control and management which occurred at Wollongong Coal at about this time. On 16 October 2013, important events occurred which led to a significant change in Mr Jagatramka’s perception of his authority and, I infer, in his motivation. From that time also, and I infer not coincidentally, the advice being given in various ways by Saigal SeaTrade also altered. I am satisfied that, commencing on 17 October 2013, Saigal SeaTrade falsified documents and probably did so to assist Mr Jagatramka and Gujarat India, to the potential prejudice of Wollongong Coal. More of that in due course.
Management change at Wollongong Coal
It will be apparent from what has already been said that Wollongong Coal was struggling financially in 2013. Those difficulties were, under the business arrangements employed by Mr Jagatramka, the immediate explanation for the failure to pay British Marine’s outstanding invoices relating to the Dragon and the Volumnia, as well as the failure to pay freight for the Wadi Alkarm. The advice to British Marine on 12 October 2013 of inability to make any payment from Australia pending a Board/shareholders meeting should have made it apparent, and no doubt did, that a cross-roads had been reached at Wollongong Coal.
By early October 2013, Wollongong Coal was in a very strained financial position. Amongst other failures to pay its debts, it had defaulted on its obligations to both the Australian Tax Office (“ATO”) and its utility supplier and outstanding moneys were not being paid to it by Gujarat India (a little under AUD$28 million in trade receivables according to an audit report dated 15 August 2013). The ATO had garnisheed related companies and two banks in a search for funds, effectively blocking its accounts. Its electricity supplier had threatened to disconnect power to its offices and the mine. In an email to all staff of Wollongong Coal on 4 October 2013, Mr Jagatramka referred to the provision of temporary funding by the “Jindal Group” over the previous three months (two Jindal companies were the subject of ATO garnishee orders), but advised:
My “hands are tied” and all possible avenues of obtaining temporary assistance between now and the general meeting have closed. This is indeed a most regrettable outcome and I extend my sincere apologies to you all for any problems you might be experiencing. …
On 16 October 2013, at a meeting of the Board of Directors of Wollongong Coal, at which Mr Jagatramka was not present, the Board recorded its acceptance of Mr Jagatramka’s resignation as Executive Chairman and from all other roles except nominee director of the Gujarat Group. Other resolutions concerning a proposed restructure of Wollongong Coal were passed.
The resolutions taken at this meeting were, on 18 October 2013, suspended until a further Board meeting on 26 October 2013. Mr Jagatramka, however (who had not submitted his resignation by 16 October 2013), regarded himself as having been dismissed, and he informed Mr Saigal of that on the same day (i.e. 16 October 2013). As I have said, in my view that is explanatory of a turn of events commencing at that point, to which I will return.
Mr Jagatramka’s mother died in India on 22 October 2013. In accordance with Hindu religious conventions, Mr Jagatramka decided to confine himself to his house in India for 13 days. Although he limited his business activities, he received regular visits from members of his staff and, as will be seen, made important contributions to the affairs of Wollongong Coal. He was able to communicate by telephone or email at his discretion. Although he was inclined to suggest, at points in his evidence, that he withdrew from the world of commerce, or was incommunicado, I am satisfied that he did not, and was not, even though he may have accepted physical limitations on his activities and conducted himself outwardly to indicate his respect for, and observance of, Hindu beliefs and customs.

On 26 October 2013, the Board of Wollongong Coal met again. Mr Jagatramka participated by telephone. He proposed a motion that Wollongong Coal be placed in voluntary administration. Over Mr Jagatramka’s objection, the Board instead resolved to raise fresh capital in two tranches of $200 million and $100 million by the issue of further shares. Certain of the earlier resolutions were rescinded. The Board noted a proposal by the “Jindal Group” (apparently principally Jindal Steel and Power (Mauritius) Pty Ltd) to fund Wollongong Coal up to $100 million, with up to $50 million available urgently, if required.
A further Board meeting was held on 27 October 2013. Mr Jagatramka participated by telephone. In substance the Board, over the objection of Mr Jagatramka, confirmed the capital raising decisions taken the previous day.
On 28 October 2013, Wollongong Coal advised the Australian Stock Exchange of Mr Jagatramka’s departure from the position of Executive Chairman. A copy of the announcement was sent by Saigal SeaTrade to British Marine on the same day. Mr Bekhor accepted that he would have been made aware of it.
The operational arrangements and control of Wollongong Coal thus altered fundamentally, and to the knowledge of British Marine and Mr Bekhor, by 28 October 2013, but it was obvious that arrangements at Wollongong Coal were under alteration for some time before then.
Furthermore, so far as Mr Jagatramka was concerned his position changed decisively on 16 October 2013 when, as he saw it, the Board dismissed him. With that additional perspective I may return to the circumstances of the Wadi Alkarm and its cargo.
The cargo and its discharge
On 17 October 2013, a broker at Saigal SeaTrade (Tushar Dandawate – hereafter Tushar) sent an email to Wollongong Coal asking for payment to British Marine of US$2,524,074.56. This was the amount previously advised to Gujarat India as the whole debt for both Wadi Alkarm and Volumnia. The email attached an invoice dated 8 October 2013 purporting to have been issued to Wollongong Coal by British Marine.
This purported invoice reflected details in the invoice issued to Gujarat India by British Marine after adjustment for a second delivery port. Although the new “invoice” appeared to be on the letterhead of British Marine it was not issued by British Marine. Mr Bekhor appeared to accept that it must be a forgery.
Apart from that central defect, the demand purportedly conveyed by the email and the attached invoice did not faithfully or correctly state British Marine’s then current position about its own demand for payment as a condition for discharge. On 17 October 2013, as I earlier described, British Marine had reverted to the position it had taken on 11 October 2013, that it would accept US$1,685,973.16.
Apart from the unexplained occasions in October 2010 concerning the 5^th lift and in April and May 2011 connected with the 7^th lift, to which I referred earlier, the purported invoice to Wollongong Coal dated 8 October 2013 was a departure from normal practice. The invoice was not issued by British Marine. It arrived the day after Mr Jagatramka’s perception that he had been displaced from his position as Executive Chairman of Wollongong Coal. It appears to represent an effort to assert a contractual liability in Wollongong Coal which did not exist. Transfer of legal obligations to Wollongong Coal from Gujarat India was in the interests of both Gujarat India and Mr Jagatramka, if it could be successfully asserted. Saigal SeaTrade was not disinterested in the outcome financially because payment of its commission by British Marine was consequent upon payment of freight to British Marine under cl 29 of the contract of affreightment.
In my view, the inference is irresistible that this forged invoice was falsely issued by Saigal SeaTrade to assist the position of Gujarat India and Mr Jagatramka. The circumstances will not safely sustain a conclusion that he directed or requested the precise means employed, but the attempt certainly reflected Mr Jagatramka’s view that actual payment should be made by Wollongong Coal.
There are other matters to be referred to which assist me to reach this and other similar inferences about the conduct of Saigal SeaTrade, for the benefit of Gujarat India and Mr Jagatramka, with reasonable comfort.
After the email, and this false invoice, were sent to Wollongong Coal by Tushar on 17 October 2013, on 21 October 2013 Tushar sent another email to Wollongong Coal pressing for payment, and advising:
We are discussing with Owners and trying to get them to accept a Corporate Gtee from Gnccl Australia [Wollongong Coal] to see if can allow discharge and thus we request you to kindly furnish us with the Corporate Gtee on Gnccl – Australia letter head and then we can put more pressure on owners to discharge.
Mr Jagatramka sent a note on 22 October 2013 to Mr Sanjay Sharma, the company secretary of Wollongong Coal, to whom the email had been addressed, saying:
Sanjay,
Pl discuss this with board members and try to send the executed copy on letter head so that we may try and save the ongoing demurrage costs
Mr Sharma sent this request to the members of the Board of Wollongong Coal but, also on 22 October 2013, the request for a corporate guarantee by Wollongong Coal was rejected. Mr Jagatramka was sent a copy of the rejection.
On 22 October 2013, British Marine sent the following email to Saigal SeaTrade, to be passed on to Gujarat India:
Kindly convey the following to charterers
Reference our various reminders regarding swift confirmation of freight overdue to us; we are appaled[sic] by the complete silence from COA partners of GNRE stature who are not even acknowledging our emails or reverting with the likely date when they expect to make this payment.
A charterer who we have supported for years giving huge discounts does not even have the courtesy to reply about the likely payment date and we are very disappointed.
(COA = contract of affreightment. GNRE is Gujarat India).
About 90 minutes later, Saigal SeaTrade replied to British Marine:
Charterers advise asf
Charterers [Gujarat India] thank owners for their continuous support and co‑operation in this critical situation, and apologise for the delayed in remittance of the initial freight due to owners. Kindly note that the acquisitions process of JSPL [Jindal Steel and Power] having bean[sic] completed and charterers awaiting release of fund transfers by end of this week.
Chtrs do sincerely regret for the continued delay and endeavouring their best to arrange the remittance of initial freight payable at the earliest.
Once again Charterers appreciate Owners kind co-operation and understanding.
On 23 October 2013, Tushar sent the following email (again enclosing the false invoice dated 8 October 2013) to Mr Sharma, copied to Mr Jagatramka:
Recvd flwing fm Owners.
Q
Reference Owners various reminders regarding swift confirmation of freight of US$2,524,074.56 overdue to us; we are appalled by the complete silence from GNCCL who are not even acknowledging Owners emails or reverting with the likely date when they expect to make this payment.
A charterer who we have supported for this fixture and does not even have the courtesy to reply about the likely payment date and we are very disappointed.
UN Q
(GNCCL is Wollongong Coal).
This email is a fabrication. The statements in it, and its attribution to British Marine, are false. The figure given (US$2,524,074.56) was not mentioned by British Marine in its own email, and was not the claim it was then pressing for immediate payment. This email is obviously based on the advice from British Marine the day before, but it has been “doctored” to make it appear as though British Marine held Wollongong Coal contractually liable to it for the outstanding charges. It did not. Mr Jagatramka, I am satisfied, knew that.
The following day, on 24 October 2013, Saigal SeaTrade communicated again with British Marine. The email commenced:
// As Brokers only – Without prejudice //
We have once again taken-up with the Charterers regarding the outstanding initial freight, Charterers advise that they have once again apologise for the delayed in remittance of the initial freight due to owners. The main reason for delay is due to process of change of management to JSPL and this is now likely to cause some further delays duration of which is at present uncertain.
Saigal SeaTrade suggested allowing discharge into custody of port agents and then said:
In Meantime We are trying and pushing to obtain an suitable guarantee from Charterers in Owners favour.
British Marine replied on 25 October 2013:
Charteres are clearly in breach of the coa as per clause no 63 of the British Marine / Gujrat Nre coke limited Kolkatta coa cp dated 16/09/08 for timely payment of Freight. As mentioned in the below email on the Gurantee, Pls advise what kind of guarantee are chrts Gujrat NRE are willing to provide enable take it up with our senior management.
The reference to Gujarat India (Gujarat NRE) should be noted. British Marine understood, correctly, that it was dealing contractually with that company.
On the same day, Saigal SeaTrade replied:
Thanks for your below email – and Yes we have been actively persuing[sic] with Charterers to get them to remit the Freight and solve the situation but same seems to be taking very long – the position as follows:
- The Freight and Demurrage is to be remitted by Gujarat Nre Coking Coal Ltd Australia – the company is undergoing a change in the management and share holding pattern with a share holder’s meeting on 16th Oct agreed for Jspl to increase their share holding and to become a major share holder – at the moment Jspl is going thru the process and same is taking longer then what was expected and as it looks will take another 2 weeks at least.
- Unfortunately Mr.A.K.Jagatramka’s mother has passed away earlier this week and thus Mr.Jagatramka is not attending office for sometime.
- We as brokers can suggest as follows
a. Ask for a corporate Gurantee from Gujarat Nre Coking Coal Ltd, Australia undertaking for paying the Freight/Demurrage ( We can look up our files elsewhere to see if any such wording we can provide – however if owners can provide same might be more affective )
b. Discharge the cargo and take undertaking from the Receiver’s Gujarat Nre Coke Ltd on their letterhead that they will not take delivery of the cargo and same will stay inside the port until the full frt and demurrage is paid by Gnccl – Australia.
End
Unfortunately the timing for the take over or increase in the Jspl share holding in Gnccl – Australia is taking longer then what was anticipated and this has upset all the movements etc.
Would appreciate any thoughts from your end – as owise we continue to chase them for payments on a continuous basis.
By this time, Wollongong Coal had decided that it would not give a corporate guarantee and Mr Jagatramka knew that to be the case. Nevertheless, on 30 October 2013 Saigal SeaTrade suggested to British Marine that it would attempt to obtain a corporate guarantee from Wollongong Coal in terms it suggested to British Marine for its agreement. I shall refer again later to an email sent on 30 October 2013 dealing with that issue. By this time, Saigal SeaTrade and British Marine knew Mr Jagatramka had no authority at Wollongong Coal.
On 31 October 2013, Mr Saigal sent the following email (with two attachments) to British Marine:
We refer to telcon yday we have taken up discussions with Charterer’s and they have discussed internally and in order to give complete comfort to British Marine that the full intention is to honour the payments and the delays are due to the cash flow and the changes taking place – but to show the flow of documents.
1. Letter from Gnccl – Australia [Wollongong Coal] stating very clearly that they are liable to pay the Freight / Demurrage and the old outstanding to British Marine.
2. Letter from Gncl – India [Gujarat India] further undertaking if Gnccl Australia fails to pay the Freight / Demurrage and old outstanding then liability will be met by Gnre india.
This is important as the cargo is purchased Cnf from Gnccl australia to Gncl india – so the flow of documents is important to give the comfort to owners.
Trust owners can consider same and basis which allow discharge of the cargo.
appreciate owners assistance in this position.
The first-mentioned letter is the foundation for all the claims by British Marine in the present proceedings and so it will require special attention, but the context, means of transmission and accompanying material are all significant.
Some observations are here in order about the email from Saigal SeaTrade. First, the summary of the order in which the attachments should be read, and their effect, is misleading. I will deal separately with those documents. Secondly, there is a reference to a telephone conversation but its contents and effect are unknown. Thirdly, there is a reference to discussions “internally” within the “Charterer’s [sic]”. Those discussions may have involved Mr Jagatramka but there is no reason to think that they involved anybody at Wollongong Coal. Fourthly, there is considerable contention about the provenance of the critical document (the first-mentioned attachment) with which it will be necessary to deal separately.
The two attachments should be read in the order set out hereunder, as the second was forwarded as an enclosure to the first. Each was addressed to British Marine. The first (on Gujarat India letterhead) was as follows:
[Gujarat India letterhead]
Date: 31st October 2013
To
British Marine PLC
11·Manchester Square
London W1U 3PW
Dear Sirs
M.V. Wadi Alkarm
Port Kembla, Australia - New Mangalore + Kandla, lndia. FREIGHT & DEMURRAGE PAYMENT
With reference to above vessel, we irrevocably and unconditionally guarantee you, your successors and assigns, the due observance and performance by Gujarat NRE Coking Coal Limited [Wollongong Coal] of its any and all obligations as per the irrevocable letter issued by Gujarat NRE Coking Coal Limited [Wollongong Coal] dated 3rd October 2013 ( copy enclosed )
Kindly release the delivery order and instruct vessel to commence discharge at New Mangalore and 2nd Disport Kandla as a special case and we will indemnify you, your servants and agents and to hold all of you harmless in respect of any liability, loss, damage or expenses of whatsoever nature which you may sustain by reason of delivering the cargo in accordance with our request.
In the event of any proceedings being commenced against you or any of your servants or agents in connection with the delivery of the cargo as aforesaid, to provide you or them on demand with sufficient funds to defend the same.
Further we irrevocable agree that in case Gujarat NRE Coking Coal Limited [Wollongong Coal] as the party liable to make the payment defaults and in order not to let the Mv Wadi Alkaram incur unnecessary Demurrage and discharge and release the vessel we undertake that latest by 31^st December2013 we will remit US$ 2,469,307.56 the outstanding freight and demurrage is fully settled in any case not later than 28^th February 14 whichever occurs earlier.
The liability of each and every person under this indemnity shall be joint and several and shall not be conditional upon your proceeding first against any person, whether or not such person is party to or liable under this indemnity.
This indemnity shall be governed by and construed in accordance with English law and each and every person liable under this indemnity shall at your request submit to the jurisdiction of the High Court of Justice of England.
Thanking you.
Yours faithfully,
Gujarat NRE Coke Limited [Gujarat India]
P R Kannan
(Chief Financial Officer)
(Emphasis added.)
The second (an enclosure to the first on Wollongong Coal letterhead) was as follows:
[Wollongong Coal letterhead]
03rd October 2013
To,
British Marine PLC
11 Manchester Square
London W1U 3PW
Dear Sirs
Re : Mv Wadi Alkarm - Port Kembla, Australia - New Mangalore, India.
Freight, Load port demurrage and old outstanding payment Mv Volumnia
We, Gujarat NRE Coking Coal Limited, Australia [Wollongong Coal], irrevocably agree to pay 100% Freight US$ 1,805 ,433.00 along with 100% Load port Demurrage of about US$ 207,000 and old outstanding in respect of Mv Volumnia US$ 274,349.56 (Invoices enclosed) to be paid prior vessel’s arrival at 1st discharge port (New Mangalore).
In case we nominate a second discharge port, then the additional freight payable for such option too shall be paid by us prior commencement of discharge at 1st discharge port.
If not paid, We will be obliged to pay demurrage at US$ 9,000 per day at discharge port for the duration vessel is waiting until 100% freight, load port demurrage and old outstanding in respect of Mv Volumnia is received by Owners in their bank account.
For Gujarat NRE Coking Coal Limited [Wollongong Coal]
Arun Kumar Jagatramka
Executive Chairman
(Emphasis added.)
Again, some observations are in order. The first paragraph of the Gujarat India letter refers to an enclosure (the letter of 3 October 2013). Gujarat India purports to guarantee performance of “any and all obligations” there referred to. There is a further guarantee expressed later in the letter.
Each of these two statements of purported guarantee by Gujarat India, in my view, added nothing to British Marine’s existing rights. That appears to be the view to which British Marine also came. The assurance of 31 October 2013 in the fourth paragraph rested on a false legal premise: Wollongong Coal was not contractually bound to make the payments; Gujarat India was. The paragraph in question also defies the assignment of an intelligible meaning, but I shall not parse it further.
The enclosed document dated 3 October 2013 referred to enclosed invoices. None were attached but, at that date, the invoices which had been issued were to Gujarat India. The precise figures given for 100% freight and the Volumnia outstandings were the subject of invoices to Gujarat India on 11 and 30 September 2013 respectively. No invoice in evidence shows a load port demurrage figure of about US$207,000, although emails from 9 October 2013 show such a figure as US$261,767.
It is convenient to make some observations at once about the email of 31 October 2013 and the two letters which it transmitted to British Marine, which will be relevant to various aspects of the causes of action.
The two letters (taking them at face value) proposed quite different things separated by almost a month in which there had been quite intense, but inconclusive, negotiations.
The letter of 3 October 2013, on its face, proposed a regime of payment by Wollongong Coal which might be delayed by it at its option, with delayed discharge also assumed in that event.
There were three elements to the apparent proposal. The first element (which concerned the bulk of the proposed payment) had been effectively withdrawn or dishonoured weeks before, when the Wadi Alkarm arrived at New Mangalore without any payment first being made. A second unload port had been identified, but since no payment of any amount had been made, the second element had been thrown into doubt also. The third element of the proposal was all that really remained but it (and the other elements) merely repeated the existing liability which fell legally on Gujarat India. As Mr Bekhor knew that Wollongong Coal’s funds to pay British Marine normally came from Gujarat India, the third element should probably have held no attraction. Mr Bekhor thought that a change of control at Wollongong Coal might free extra funds but he had been told that the management changes were in fact delaying payment, rather than the reverse.
As at 31 October 2013, seen in proper context and by reference to its terms, the letter of 3 October 2013 really only amounted to a suggestion that British Marine continue to wait for its money without discharging for as long as Wollongong Coal might choose.

The letter of 31 October 2013 from Gujarat India, on the other hand, proposed delayed payment but immediate discharge. The email from Saigal SeaTrade which despatched the two letters also suggested that they provided a foundation for early discharge.
In those circumstances, it is hard to give any significance at all to the letter of 3 October 2013 in its own right because, apart from its lack of commercial utility, it was directed to a proposal which was simply not being made on 31 October 2013. It was also not a proposal which British Marine accepted, or even purported to accept, as I shall explain.
Nevertheless, Mr Bekhor asserted that it was this letter which was the foundation for his subsequent decisions. I do not accept that it could have been, or was. The meaning which Mr Bekhor attempted to attribute to the letter (that Wollongong Coal had unconditionally promised immediate payment even before discharge) was one which did not reflect the terms of the letter, or any meaning which could reasonably be assigned to it. Nor did it reflect the reality since the apparent date of the letter.
Moreover, in view of the passage of time, the discrepancy between the dates of the two letters, the fact that no payment had in fact been made since 3 October 2013, the fact that the letter of 3 October 2013 was provided by Gujarat India rather than Wollongong Coal, the fact that Mr Bekhor knew that there had been a recent change of control at Wollongong Coal, the fact that Mr Bekhor knew that Mr Jagatramka no longer held his office at Wollongong Coal as at 31 October 2013 and that he knew that Mr Jagatramka’s personal interests were aligned with those of Gujarat India, prudence required that Mr Bekhor make some enquiry of Wollongong Coal if he wished to place any weight on the letter of 3 October 2013. Mr Bekhor made no such enquiry. That was not just imprudent but unreasonable, as I shall further discuss.
British Marine’s case was that this letter formed the basis of a contract which was made, at the latest, on 8 November 2013 when a demand was made for immediate payment of all the amounts referred to. But, to repeat, what does the letter of 3 October 2013 actually propose? First, payment of outstandings before arrival at New Mangalore. By the time British Marine saw the letter that assurance had been dishonoured. Secondly, payment of any additional freight referable to a second port before discharge at New Mangalore. On 31 October 2013 that was still possible. Thirdly, and most importantly, if payment had not been made as promised (and it had not been) then payment of demurrage, while the ship continued to wait, until payment was actually received in British Marine’s bank account. This aspect of the proposal accepted that British Marine would not discharge before, or without, payment and forego its only real commercial leverage.
An offer in the terms of the letter dated 3 October 2013 was thus still capable of acceptance in accordance with its terms. The bargain being offered consisted of the following elements: if British Marine agreed to release Gujarat India from its immediate obligation to pay then Wollongong Coal would make the payments, if possible by the times stated but if not then when it could, accompanied by demurrage. Wollongong Coal was requesting time to pay. British Marine was not expected to discharge until payment was made.
In my view, therefore, at 31 October 2013 there would be adequate consideration for a contract, the offer was capable of acceptance and it would create legal relations if the offer was, in fact, made by Wollongong Coal (as to which see later). But an offer in those terms was not accepted. There was no acceptance on 31 October 2013 or on any other date. Instead, on 8 November 2013, British Marine pressed for immediate payment, not just from Gujarat India but also from Wollongong Coal. The demand for immediate payment from Wollongong Coal involved rejection of the offer and rejection of the request for time to pay. Consideration was not exchanged. There could be no contract.
Moreover, as I shall discuss further, it remains important to see whether any offer was made by Wollongong Coal itself.
I need to explain and examine this, and other issues, in a further context but it may be apparent that, in my view, any case in contract against Wollongong Coal based on the terms of the letter dated 3 October 2013 encounters immediate, and fatal, obstacles. The same may be said for any case of misleading and deceptive conduct based on the same document.
When he received the email and its attachments, Mr Bekhor sought legal advice. The advice was that the letter from Gujarat India was worthless. I agree. The advice was that the letter signed by Mr Jagatramka was enforceable against Wollongong Coal. I do not agree.
On Mr Bekhor’s evidence he noticed the date on Mr Jagatramka’s document (3 October 2013) and asked Mr Saigal when it had been received. He was told it was received shortly before it was sent on to British Marine. I will deal separately with a suggestion that Saigal SeaTrade sent it to British Marine on 5 October 2013. If that had happened, Mr Bekhor did not see it, was unaware of it and could not have relied on it before 31 October 2013, by which time he knew Mr Jagatramka had no authority to bind Wollongong Coal. However, in my view it was not sent on 5 October 2013. A document purporting to forward it on that date is most likely another fabrication within Saigal SeaTrade.
It will be necessary to deal separately with Mr Jagatramka’s evidence about how this letter dated 3 October 2013 came into the possession of Saigal SeaTrade and I will deal then with these other, ultimately peripheral, issues.
Wollongong Coal as guarantor
When suggestions began to be made by Saigal SeaTrade that some form of guarantee might be provided by Wollongong Coal, Mr Bekhor took some steps to investigate the financial standing of Wollongong Coal. Prior to that happening, Mr Sial had, between 13 and 22 October 2013, raised the possibility of Mr Jagatramka giving a personal guarantee but he declined to do so. Mr Bekhor asked for an audited copy of Wollongong Coal’s accounts. Saigal SeaTrade referred him to documents publically available on the company’s website.
On 25 October 2013, Mr Bekhor referred his Chief Financial Officer, Mr Peter Johnson, to the publically available accounts and asked for his opinion of the financial standing of Wollongong Coal.
Mr Johnson, on his evidence, studied the accounts for an hour or so and concluded that Wollongong Coal probably had assets of at least AUD$250 million, despite some difficulties with the picture shown by the accounts, to which I will refer. He gave his opinion to Mr Bekhor.
Mr Johnson’s evidence about the formation of his opinion confirms Mr Bekhor’s evidence about that matter.
The published accounts of Wollongong Coal (as at 31 March 2013) showed a marked deterioration in the state of Wollongong Coal’s current liabilities. In large measure, that deterioration corresponded to substantial borrowings being shown as current liabilities, rather than non-current liabilities. In turn, Mr Johnson concluded, that was because Wollongong Coal was in breach of bank covenants, and what were otherwise long term borrowings had become, strictly speaking, immediately due and payable. Mr Johnson thought that the picture provided by the accounts was consistent with the information provided by Mr Jagatramka at the meeting in London on 21 June 2013; namely, that the Gujarat Group was experiencing financial difficulties, and was refinancing.
Mr Johnson also made enquiries about share price movements. He noted that the share price had almost halved, after a trading halt, in the period September/October 2013, but again thought that to be consistent with the overall picture of a group working its way through financial difficulties. He was reassured the banks had not foreclosed. He knew that part of the restructuring involved a change of control at Wollongong Coal.
All of those matters are disclosed in the published accounts. Of some concern, however, and Mr Johnson was cross-examined about this in a little detail, was the fact that Wollongong Coal’s auditors, Grant Thornton Audit Pty Ltd (“Grant Thornton”) had declined to provide an audit opinion due to insufficiency of the supporting information.
Grant Thornton’s audit report dated 15 August 2013, stated the following:
Basis for Disclaimer of Opinion
We have been unable to obtain sufficient appropriate audit evidence on the books and records and the basis of accounting of the consolidated entity. Specifically, we have been unable to satisfy ourselves on the following areas:
i.Valuation and impairment of assets – the consolidated entity obtained an independent valuation of its mining assets and mining licences. The independent valuation was based on certain assumptions which may no longer be valid. The directors have not obtained an updated independent valuation to determine the extent of the impairment to the carrying value of the mining assets and mining leases. We have been unable to obtain supporting evidence, based on updated assumptions, which would provide sufficient appropriate audit evidence as to the carrying value of the mining assets and leases.
ii.Going concern – the financial report has been prepared on a going concern basis, however the directors have not provided an update of their assessment of the consolidated entity’s ability to pay their debts as and when they fall due. The consolidated entity has reported a loss before income tax of $112,182,825 (including an impairment charge of $83,792,190) for the year ended 31 March 2013 and a working capital deficiency of $407,998,443. At the year end, the consolidated entity is in breach of loan covenants, has significant creditors in arrears and has been unable to provide evidence to support the full amount of the replacement loan facility which is required to pay existing facilities. As discussed in Note 1(c), the consolidated entity is in the process of re-negotiating financing and has announced a share placement to the market, subject to shareholder approval, for additional equity funding.
We have been unable to obtain alternative evidence which would provide sufficient appropriate audit evidence as to whether the consolidated entity may be able to obtain such financing, and hence remove significant doubt of its ability to continue as a going concern for a period of 12 months from the date of this auditor’s report.
iii.Deferred Tax Assets – included in non-current assets are Deferred Tax Assets of $87,302,944. In accordance with AASB112 “Income Taxes”, the recognition of deferred tax assets when an entity has incurred tax losses requires convincing other evidence that sufficient taxable profit will be available against which the unutilised tax losses can be utilised by the Group. The directors have not provided sufficient appropriate audit evidence of the Group’s ability to recover these losses.
iv.Recoverability of Trade Receivable – included in Trade Receivables is an amount of $27,795,628 due from the consolidated entity’s ultimate parent company. We were unable to obtain sufficient appropriate audit evidence to determine the recoverability of this receivable. Consequently, we were unable to determine whether any adjustment to this receivable was necessary.
v.Completeness of Contingent Liabilities and Subsequent Events disclosures – we were unable to obtain sufficient appropriate audit evidence to determine the completeness of the contingent liabilities and subsequent events disclosures. Consequently, we were unable to determine whether any additional disclosures are required to the relevant notes.
vi.To the date of the directors approving the financial statements, we were not provided with sufficient appropriate audit evidence, or time, to finalise our procedures pertaining to various disclosures and transactions contained within the financial report. This constitutes a limitation of scope.
As a result of these matters, we were unable to determine whether any adjustments might have been found necessary in respect of the elements making up the consolidated statement of financial position, consolidated statement of profit and loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows, and related notes and disclosures thereto.
Disclaimer of Opinion
Because of the significance of the matters described in the Basis for Disclaimer of Opinion paragraphs, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Accordingly, we do not express an opinion on the financial report.
Note 1(c) to the financial statements, which is referred to in subparagraph (ii) of this extract, contained a statement by the directors of Wollongong Coal summarising proposals for the introduction of new capital to be supplied by the Jindal Steel and Power Group, for increases in production and for further borrowings. Note 1(c) contained the following cautionary statements:
Based on the above the Directors consider the entity to be a going concern and able to meet its debts and obligations as they fall due.
Notwithstanding the above, if one or more of the planned measures do not eventuate or are not resolved in the Entity’s favour, then in the opinion of the Directors, there will be significant uncertainty regarding the ability of the Entity to continue as a going concern and pay its debts and obligations as and when they become due and payable.
If the Entity is unable to continue as a going concern, it may be required to realize its assets and extinguish its liabilities other than in the normal course of business at amounts different from those states [sic] in the financial report.
No adjustments have been made to the financial report relating to the recoverability and classification of the recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Entity not continue as a going concern.
However, emails seen by Mr Johnson shortly before he provided his opinion to Mr Bekhor indicated that the proposal involving the Jindal Steel and Power Group was going ahead.
Obviously, questions of commercial judgment are involved in the opinion formed by Mr Johnson, which appears to have been accepted by Mr Bekhor. So far as it goes, I can see no basis for an accusation that either of them acted carelessly, negligently or otherwise wrongfully in concluding that Wollongong Coal had the capacity to stand behind a guarantee. Whether a guarantee was given is a different question.
The legal advice
When British Marine received the email from Saigal SeaTrade on 30 October 2013, proposing a form of words for a proposed guarantee from Wollongong Coal at that time, Mr Bekhor (and British Marine) was taking advice from Mr Ian Hawkes, a partner in the London firm of MFB Solicitors. Mr Hawkes had been advising British Marine since 26 September 2013. He had not previously acted for British Marine, nor previously met Mr Bekhor. Mr Hawkes specialises in contracts and tort aspects of shipping law. He joined MFB in January 1994 and became a partner in 1999. He gave evidence in the present proceeding which was candid and direct.
The proposal from Saigal SeaTrade on 30 October 2013 was rapidly overtaken and replaced by the communications on 31 October 2013. However, one remaining significance of the proposal on 30 October 2013, and the (unsatisfactory) form of words which it proposed (which Mr Hawkes said in his evidence would never have been accepted) is that it contradicts any assumption that Saigal SeaTrade had, on 30 October 2013, the letter from Mr Jagatramka dated 3 October 2013, which it forwarded the next day.
The email of 30 October 2013 said:
Re : M/V Wadi Alkarm – Outstanding Initial Freight
// As Brokers only – Without prejudice //
Ref telcon as brokers shall endeavor to obtain wording as below, in case same is agreeable with Owners
Q
[please print letter head]
Date: (insert date)
To
British Marine PLC
11 Manchester Square
London W1U 3PW
Dear Sirs
M.V. Wadi Alkarm / Gujarat Nre Coking Coal Limited – Australia
Port Kembla, Australia – New Mangalore + Kandla, India. FREIGHT & DEMURRAGE PAYMENT
With reference to above vessel, we irrevocably and unconditionally guarantee you, your successors and assigns, the due observance and performance by Gujarat Nre Coking Coal Limited, Australia [Wollongong Coal] of its any and all obligations under the relevant Voyage Charter. [There were no such obligations]
Kindly release the delivery order and instruct vessel to commence discharge as a special case and we will indemnify you, your servants and agents and to hold all of you harmless in respect of any liability, loss, damage or expenses of whatsoever nature which you may sustain by reason of delivering the cargo in accordance with our request.
In the event of any proceedings being commenced against you or any of your servants or agents in connection with the delivery of the cargo as aforesaid, to provide you or them on demand with sufficient funds to defend the same.
Further, we guarantee that latest by 31^st December2013 we will remit US$ 2,469,307.56 the outstanding freight and demurrage is fully settled in any case not later than 28^th February 14 whichever occurs earlier.
The liability of each and every person under this indemnity shall be joint and several and shall not be conditional upon your proceeding first against any person, whether or not such person is party to or liable under this indemnity.
This indemnity shall be governed by and construed in accordance with English law and each and every person liable under this indemnity shall at your request submit to the jurisdiction of the High Court of Justice of England.
Thanking you.
Yours faithfully,
Gujarat Nre Coking Coal Limited [Wollongong Coal]
¿¿¿¿¿¿.
UnQ
(Emphasis added.) (My note.)
Some aspects of this draft were repeated in the 31 October 2013 letter from Gujarat India, sent the following day, but there were some important changes.
One important change was that the letter from Gujarat India, dated 31 October 2013, enclosed the 3 October 2013 letter signed by Mr Jagatramka as Executive Chairman of Wollongong Coal. It (the letter of 31 October 2013) purported to guarantee observance and performance of “any and all” obligations under the 3 October 2013 letter, which promised to discharge obligations which, under the contract of affreightment, fell on (and only on) Gujarat India. The combined proposal was confusing, and imprecise.
Mr Bekhor sought legal advice about the two letters of 31 October 2013 and 3 October 2013. At the same time he sought advice about whether British Marine could exercise a lien over the cargo.
He received three written advices (transmitted by email) from Mr Hawkes. Mr Hawkes was cross-examined by reference to a folder of documents which were discovered by the plaintiff. The documents appeared to represent his working file over which privilege had been waived for the period 30 October 2013 to 8 November 2013. The folder was marked for identification (MFI #10) for Mr Hawkes’ cross-examination and the intention was that it be tendered by counsel for Wollongong Coal. No objection was foreshadowed except, possibly, as to relevance. Due to an apparent oversight, neither the folder nor any documents in it upon which Mr Hawkes was cross-examined were ultimately tendered. But I am satisfied that at least these particular documents are relevant and they are important ones to which to refer. Accordingly, I propose to treat at least those documents as admitted in evidence in the proceedings through Mr Hawkes’ cross-examination, rather than to allow the record to be left incomplete due to an oversight. Much of what appears hereunder appears, in any event, from the record of Mr Hawkes’ cross-examination.

This part of the foundation for any claim can fare no better than the speculative possibilities referred to by a Full Court in Castel Electronics Pty Ltd v Toshiba Singapore Pte Ltd (2011) 192 FCR 445, in these terms at [166]-[167]:
166It was incumbent on Castel to establish on the balance of probabilities that it had lost a valuable opportunity. If Castel satisfied the burden of proof it bore on this issue, the Court could proceed to value that opportunity in accordance with the degree of likelihood that the opportunity would have ensued to Castel’s pecuniary gain. In Sellars v Adelaide Petroleum NL at 346-353, Mason CJ, Dawson, Toohey and Gaudron JJ analysed the authorities at length, emphasising the distinction between causation of loss (which must be determined in accordance with the general civil standard of proof) and the assessment of the plaintiff’s loss “taking into account any reductions arising from the uncertainty of future events”. Their Honours concluded their discussion with the observation: “When the issue of causation turns on what the plaintiff would have done, there is no particular reason for departing from proof on the balance of probabilities notwithstanding that the question is hypothetical.” That authoritative statement applies with no less force where the issue is not only what the plaintiff would have done, but also involves questions as to what others would have been disposed to do in relation to reaching an agreement with the plaintiff.
167The primary judge was simply not satisfied that Castel would or could have concluded an agreement with Harman or Convoy, nor that the misconduct alleged by Castel against TSP had any bearing on that state of affairs. Even if Mr Kwong genuinely believed that he would be able to conclude an agreement with Harman or Convoy, the primary judge was entitled to regard that belief as no more than wishful thinking after the event. Damages are not awarded for wishful thinking.
It follows that I reject each, and all, of the claims against Wollongong Coal. No claim remains against Mr Jagatramka which derives from any claim against Wollongong Coal.
Had I found that Wollongong Coal was liable to British Marine for misleading and deceptive conduct I would have found, based on Mr Jagatramka’s own evidence, that he was knowingly involved in such conduct, subject to some matters discussed below.
If I was wrong about the liability of Wollongong Coal for misleading and deceptive conduct then Mr Jagatramka must share that responsibility. First, he was the author of the letter. Secondly, he claimed to have authorised its transmission to Saigal SeaTrade on behalf of Wollongong Coal as early as 3 October 2013.
I would only be at this point in the analysis if I had already accepted that the representations in the letter were misleading and deceptive, or were representations about future events made without reasonable grounds, that they were authorised and that British Marine relied upon them to its detriment, none of which conclusions reflect my views. But if they did, Mr Jagatramka could not avoid them any more than could Wollongong Coal.
For the purpose of the independent claim against Mr Jagatramka of misleading and deceptive conduct, however, it is not appropriate to proceed upon the same assumptions.
This claim assumes that Wollongong Coal cannot be fixed with liability for Mr Jagatramka’s conduct because he did not have “actual or ostensible authority in respect of the 3 October letter”.
If I concluded that Mr Jagatramka signed and sent the letter on 3 October 2013, and intended that it be received and considered by British Marine at about that time, I would not conclude that a case of misleading or deceptive conduct had been made out unless I concluded that British Marine received the letter and acted upon its contents. On no view of the evidence would any such conclusion be available before 31 October 2013.
It would not matter, therefore, for the purpose of this analysis, whether Mr Jagatramka acted unilaterally and without authority on 3 October 2013 or on 31 October 2013.
By 31 October 2013, British Marine knew that Mr Jagatramka’s assurances could not be relied upon as he had no authority. Furthermore, for the reasons I have already given, I am satisfied that British Marine did not rely upon them. Instead Mr Bekhor set out to negotiate something more tangible than Mr Jagatramka’s empty platitudes which, by then, had proved to be without any value at all. The independent claim of misleading and deceptive conduct cannot succeed.
Counsel for Mr Jagatramka advanced two further matters as defences available to Mr Jagatramka against any claim under the ACL. They are based on s 5(1)(i) and s 5(3) of the Competition and Consumer Act 2010 (Cth), which provide:
5Extended application of this Act to conduct outside Australia
(1)Each of the following provisions:
…
(c) the Australian Consumer Law (other than Part 5-3);
…
extends to the engaging in conduct outside Australia by:
…
(i)persons ordinarily resident within Australia.
…
(3)Where a claim under section 82, or under section 236 of the Australian Consumer Law, is made in a proceeding, a person is not entitled to rely at a hearing in respect of that proceeding on conduct to which a provision of this Act extends by virtue of subsection (1) or (2) of this section except with the consent in writing of the Minister.
It was argued that Mr Jagatramka was not “ordinarily resident within Australia” on 3 or 31 October 2013 and that the Minister’s consent had not been provided to claims against him before any hearing. It is convenient to deal with the second issue first.
The construction of s 5(3), upon which the argument depends, receives some support from a judgment of Drummond J in Yamaji v Westpac Banking Corporation (No 2) (1993) 42 FCR 436 at 440. Drummond J referred to s 5(4) (which required Ministerial consent before an application is made) and reasoned that s 5(3) should be construed conformably. With respect, I cannot accept this reasoning. The terms of the two provisions are quite different.
Drummond J’s construction of s 5(3) has not been applied in subsequent cases in this Court (see Natureland Parks Pty Ltd v My-Life Corporation Pty Ltd (1996) 67 FCR 237 at 240-241; Stern v National Australia Bank [1999] FCA 1421 at [152]; Auskay International Manufacturing & Trade Pty Ltd v Qantas Airways Ltd (2008) 251 ALR 166 at [57]).
In the present case, Ministerial consent was given before the conclusion of the hearing. That is sufficient.
The question of whether Mr Jagatramka was ordinarily resident within Australia at the relevant time is more finely balanced. In his evidence in chief, Mr Jagatramka gave the following evidence:
Now, Mr Jagatramka, where did you work from? Physically where were you in the work that you did for the company in the period September 2011 through to October 2012 – sorry, October 2013?---I used to work from everywhere, but – like, I used to travel a lot. And generally it was two weeks in India, two weeks in Australia, or it could be one week in Australia, one week in India. And when in Australia, I had – I had the office at the mine site in Wollongong in Russell Vale. While in India, I had the office in Camac Street. And even while travelling with the laptop, you can have your office everywhere.
And, Mr Jagatramka, did you have a home in Wollongong?---Yes.
In his cross-examination, Mr Jagatramka referred to being, on 26 October 2013, “in Kolkata in my home”.
Mr Jagatramka’s “Executive Services Agreement” made with Wollongong Coal effective from 11 September 2011, contemplated that he would hold a 457 – Business Long Stay visa (permitting him to live and work in Australia), be provided with a residential property for himself and his family, up to two domestic helpers and that he and his “resident family members” would be provided with “internet and telecommunication” devices.
A person may be ordinarily resident in more than one country (see Re Taylor; Ex parte Natwest Australia Bank Ltd (1992) 37 FCR 194 at 198; Logue v Hansen Technologies Ltd (2003) 125 FCR 590 at [24]; Battenberg v Restom [2007] FCAFC 195 at [11], [33]-[36]).
I would be inclined to think that, at least with respect to any conduct as an officer of Wollongong Coal during this period, Mr Jagatramka should be regarded as “ordinarily resident” in Australia.
In view of my other findings, it is not necessary to explore this question in greater depth, but I would not, had it been necessary to rule upon them, have upheld either of Mr Jagatramka’s defences based on s 5 of the Competition and Consumer Act 2010 (Cth).
The claim against Mr Jagatramka for breach of warranty of authority, as argued in the written submissions, depends upon it being accepted that Mr Jagatramka instructed Saigal SeaTrade to provide the 3 October 2013 letter to British Marine on 31 October 2013, that British Marine relied upon it in making a contract and that British Marine relied upon it in discharging the cargo. I do not accept any but the first element in the argument, for reasons which by now should be apparent.
Defence of Wollongong Coal
I accept, for the reasons I have given, that Wollongong Coal is not liable under the claims in contract or for misleading and deceptive conduct. The case against it must therefore be dismissed.
It is not necessary, therefore, to deal with the assertions by Wollongong Coal that the whole of any claim against it should be dismissed because the claims are “apportionable claims” for which various alleged concurrent wrongdoers should be found responsible (even if not all could be declared liable in the present proceedings).
The alleged concurrent wrongdoers were: Mr Jagatramka, Saigal SeaTrade, Mr Hawkes and MFB Solicitors.
The allegation against Saigal SeaTrade was first that, if it warranted and represented to British Marine that Mr Jagatramka was an agent of Wollongong Coal or that Wollongong Coal was prepared to pay debts owed by Gujarat India or that Saigal SeaTrade was the agent of Wollongong Coal, it did so without authority. Alternatively, it was suggested that Saigal SeaTrade could be liable because it had passed on the 3 October 2013 letter without reasonable enquiries and without authority by Wollongong Coal.
None of those contentions would have provided any comfort to Wollongong Coal. They were not established by the evidence and none of them, in my view, identify any cause of action which might be relevant. The attempted attribution of responsibility to Saigal SeaTrade was a diversion. The kindest thing to say about it is that it consumed no time in the proceedings.
I have been critical of the contribution of Saigal SeaTrade, but those criticisms relate to the performance of its role as a conduit for communications and to its manipulative attempts to further the interests of Gujarat India and Mr Jagatramka. Those matters do not sustain any suggestion that Wollongong Coal would be released from liability to British Marine, if a case had been made out against it.
Mr Hawkes’ and MFB Solicitors’ liability is said to arise from a failure of reasonable skill and care. Presumably, it was intended to suggest that Mr Hawkes was negligent. I do not accept that allegation. In any event, it will be apparent from the findings which I have made that I do not accept that Mr Bekhor or British Marine suffered loss as a result of Mr Hawkes’ advice any more than as a result of alleged reliance upon the letter of 3 October 2013 itself.
It is not necessary to deal with any allegation that Wollongong Coal’s liability might be reduced because Mr Jagatramka was a concurrent wrongdoer, in light of the cross-claims.
Wollongong Coal also sought to mitigate any liability by pleading that British Marine had failed to exercise reasonable care and had contributed to its own loss. It is not possible to satisfactorily evaluate this contention in light of the findings I have made and it is not necessary to address it further. However, I very much doubt that the argument could survive a finding of misleading and deceptive conduct based upon misrepresentations upon which it was reasonable to rely.
Defence of Mr Jagatramka
I have found Mr Jagatramka not to be liable to British Marine under any of the causes of action finally pleaded against him.
It is not necessary to do more than briefly mention those parts of his defence which seek to avoid liability because of the alleged conduct of concurrent wrongdoers.
Those concurrent wrongdoers were said to be: two of Wollongong Coal’s independent directors; Mr Hawkes; and the company secretary of Wollongong Coal. I would not, on the evidence before me, have found any reduction in Mr Jagatramka’s liability having regard to any of the matters thus pleaded. Again, the allegations were a distraction. They did not properly identify any relevant causes of action and the evidence about each was trifling.
The allegations of concurrent wrongdoing advanced in written submissions by Mr Jagatramka were no more than that – allegations. They fell well short of establishing even a prima facie case of liability, even though it was accepted that it is necessary to establish such liability in the sense that the actions of the suggested wrongdoer caused the loss and damage complained of (see Shrimp v Landmark Operations Ltd (2007) 163 FCR 510 at [62]; Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd (2013) 247 CLR 613 at [47], [91]-[92]).
Mr Jagatramka also suggested that British Marine was responsible for its own losses for failing to take reasonable care but, again, it is not necessary to here deal with this contention.
The first cross-claim
In the event that he was liable to British Marine, Mr Jagatramka claimed an indemnity under an Executive Services Agreement (“the Agreement”) and a Deed of Indemnity, Insurance and Access (“the Deed”).
Wollongong Coal admitted the Agreement and the Deed but relied upon provisions of the Deed (acknowledged by Mr Jagatramka) which restrict the operation of the Deed to an indemnity in respect of conduct which does not involve a lack of good faith.
Wollongong Coal pleaded various bases for its assertion that Mr Jagatramka had not acted in good faith.
Wollongong Coal also pleaded that Mr Jagatramka had acted in a personal capacity, and not as an officer of Wollongong Coal, and that he was estopped from relying on the Deed because he gave no notice he would do so (until the cross-claim was filed) after Wollongong Coal asserted a lack of entitlement on 29 April 2014 denying Mr Jagatramka’s assertion on 18 April 2014 that he was entitled.
The parties accepted that it was not necessary to make findings about the allegations in either cross-claim if the claims against Wollongong Coal and Mr Jagatramka were all dismissed.
I accept that Mr Jagatramka had a conflict of interest, but that does not mean that a lack of good faith attached to all that he did. It would depend what particular conduct was impeached and precisely what the evidence showed.
On the findings I have made, no liability attaches to Mr Jagatramka in the proceedings commenced by British Marine, and no occasion arises for him to invoke the indemnity. It would be unwise to speculate, contrary to the findings I have made, what might have been the position if the findings had been otherwise. The nature of any different findings might be very important to any conclusions about a lack of good faith.
The first cross-claim will be dismissed.
The second cross-claim
The cross-claim against Mr Jagatramka by Wollongong Coal pleads that Mr Jagatramka caused the 3 October 2013 letter to be provided to British Marine on or around 31 October 2013, that the 3 October 2013 letter purported to agree to pay certain sums to British Marine, that he had no authority (i.e. at 31 October 2013) to cause the 3 October 2013 letter to be provided, that he was in a position of conflict of interest at that time (i.e. 31 October 2013) and that he breached his statutory and fiduciary duties.
The above is a bare skeleton but it will suffice for present purposes.
In my view, the second cross-claim is moot, like the first cross-claim.
Like the first cross-claim also, it is not desirable to speculate unnecessarily about what conclusions might be appropriate if the findings of fact had been otherwise.
The second cross-claim will be dismissed.
Summary
The plaintiff’s case against Wollongong Coal fails at a number of levels, whatever the particular findings of fact that I make.
It fails in contract because Mr Jagatramka had no actual or ostensible authority to commit Wollongong Coal to legally assume a debt owed by Gujarat India to British Marine, if that was the proper construction of the letter of 3 October 2013, whether that letter was written on or around 3 October 2013, or not.
It fails because, properly considered, the letter of 3 October 2013 proposed an assumption of debt on terms which were not accepted by British Marine.
It fails because, on the findings I have made, the letter was not written on or around 3 October 2013 but more likely on 31 October 2013 when Mr Jagatramka clearly had no actual authority (implied or otherwise) to commit Wollongong Coal and it was unreasonable for Mr Bekhor to rely on any assumption or appearance of authority based on the earlier course of dealings. Even if the letter had been written on 3 October 2013 Mr Jagatramka would have no authority, actual (whether implied or not) or ostensible. He had an obvious and intractable conflict of interest if he attempted to shift legal liability from Gujarat India to Wollongong Coal while he was Executive Chairman of the latter. He clearly had no actual authority to legally burden Wollongong Coal in order to further the interests of Gujarat India in achieving discharge of the cargo, whatever the prior course of commercial dealings with British Marine. He had no ostensible authority, even at that point, because Mr Bekhor knew of the conflict of interest and it was not reasonable of him to refrain from making enquiries about Mr Jagatramka’s authority when he received the 3 October 2013 letter on 31 October 2013.
As at 31 October 2013, Mr Jagatramka had lost his office with Wollongong Coal, to Mr Bekhor’s knowledge. The letter dated 3 October 2013 did not come to him from Wollongong Coal, or anybody acting for Wollongong Coal. The previous course of commercial dealings had been ruptured and British Marine was pressing its legal claims against Gujarat India with all means at its disposal. There is no foundation for an estoppel based on ostensible authority.
The case against Wollongong Coal for misleading and deceptive conduct based on the 3 October 2013 letter fails for the same reasons and because I have found that Mr Bekhor did not rely upon it.
The case against Mr Jagatramka that he was involved in misleading and deceptive conduct also fails, as a result.
The case against Mr Jagatramka, personally, based on misleading and deceptive conduct fails because Mr Bekhor did not rely on the letter of 3 October 2013, and because the statements and representations in the letter do not mean what the plaintiff asserted.
The case against Mr Jagatramka for breach of warranty of authority fails at least because Mr Bekhor did not rely on the 3 October 2013 letter.
The cross-claims are moot.
Conclusion
The further amended originating application will be dismissed. The first and second defendants should have their costs.
The first and second cross-claims will be dismissed. In view of their exchange, and the failure of each, there should be no order for costs of either.

I certify that the preceding three hundred and fifty-five (355) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan.
Associate:
Dated: 30 April 2015

Citation:	British Marine PLC v Wollongong Coal Limited [2015] FCA 403
Parties:	BRITISH MARINE PLC v WOLLONGONG COAL LIMITED ACN 111 244 896 and ARUN KUMAR JAGATRAMKA
File number(s):	NSD 2347 of 2013
Judge(s):	BUCHANAN J
Date of judgment:	30 April 2015
Catchwords:	ADMIRALTY – contract of affreightment between plaintiff and third party to ship coking coal from Australia to India – where plaintiff alleges first defendant liable for cost of freight under a contract of affreightment – where second defendant purported to proffer, on behalf of the first defendant, a letter of guarantee by the first defendant for amounts owing – whether letter of guarantee was an offer capable of acceptance which would create contractual obligations – whether second defendant had actual or apparent authority to bind the first defendant – whether plaintiff relied on letter of guarantee to discharge cargo – whether first or second defendant engaged in misleading and deceptive conduct – whether contributory negligence by the plaintiff or involvement of concurrent wrongdoers – whether claims apportionable
Legislation:	Competition and Consumer Act 2010 (Cth), ss 5(1)(i), 5(3), Sch 2 Evidence Act 1995 (Cth), s 190
Cases cited:	Auskay International Manufacturing & Trade Pty Ltd v Qantas Airways Ltd (2008) 251 ALR 166 Battenberg v Restom [2007] FCAFC 195 Bell IXL Investments Ltd v Life Therapeutics Ltd (2008) 68 ACSR 154 Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 Castel Electronics Pty Ltd v Toshiba Singapore Pte Ltd (2011) 192 FCR 445 Combulk Pty Ltd v TNT Management Pty Ltd (1993) 41 FCR 59 Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd (2013) 247 CLR 613 Logue v Hansen Technologies Ltd (2003) 125 FCR 590 Luxton v Vines (1952) 85 CLR 352 Natureland Parks Pty Ltd v My-Life Corporation Pty Ltd (1996) 67 FCR 237 Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 Pourzand v Telstra Corporation Ltd [2014] WASCA 14 Re Taylor; Ex parte Natwest Australia Bank Ltd (1992) 37 FCR 194 Richard Brady Franks Ltd v Price (1937) 58 CLR 112 Shrimp v Landmark Operations Ltd (2007) 163 FCR 510 Stern v National Australia Bank [1999] FCA 1421 Tisdall v Webber (2011) 193 FCR 260 Yamaji v Westpac Banking Corporation (No 2) (1993) 42 FCR 436
Dates of hearing:	28, 29, 30, 31 July 2014; 1 August 2014; 22, 23 September 2014; 8, 9 December 2014; 16, 17, 25 March 2015
Place:	Sydney
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	355
Counsel for the Plaintiff:	Mr E G H Cox with Mr T E O’Brien
Solicitor for the Plaintiff:	Norton White
Counsel for the First Defendant:	Mr C H Withers with Mr P A Meagher
Solicitor for the First Defendant:	Holding Redlich
Counsel for the Second Defendant:	Mr A M Stewart SC with Ms J A Soars (28, 29, 30 and 31 July 2014; 22, 23 September 2014) and with Mr A J Macauley (8, 9 December 2014; 16, 17, 25 March 2015)
Solicitor for the Second Defendant:	Barringer Leather Lawyers

Table of Corrections
4 May 2015	In paragraph 167, “north” has been changed to “south”.
6 November 2015	The Counsel appearance for the Second Defendant has been corrected.

IN THE FEDERAL COURT OF AUSTRALIA
IN ADMIRALTY
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 2347 of 2013

JUDGE:	BUCHANAN J
DATE OF ORDER:	30 APRIL 2015
WHERE MADE:	SYDNEY

JUDGE:	BUCHANAN J
DATE:	30 APRIL 2015
PLACE:	SYDNEY