Carmichael Rail Network Pty Ltd as Trustee for the Carmichael Rail Network Trust v BBC Chartering Carriers GmbH & Co. Kg & Anor - [2023] HCATrans 79

[2023] HCATrans 079

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Brisbane No B54 of 2022

B e t w e e n -
CARMICHAEL RAIL NETWORK PTY LTD AS TRUSTEE FOR THE CARMICHAEL RAIL NETWORK TRUST
Applicant
and
BBC CHARTERING CARRIERS GMBH & CO. KG
First Respondent
ONESTEEL MANUFACTURING PTY LTD
Second Respondent
Application for special leave to appeal

GAGELER J
EDELMAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA AND BY VIDEO CONNECTION

ON FRIDAY, 9 JUNE 2023, AT 11.00 AM

____________________

MR E.G. H. COX, SC: If your Honours please, I appear with MR D.J. REYNOLDS for the applicant. (instructed by Mills Oakley)

MR G.J. NELL, SC: If your Honours please, I appear for the first respondent. (instructed by Aus Ship Lawyers)

MR J.A. HOGAN‑DORAN, SC: If your Honours please, I appear for the second respondent. (instructed by HWL Ebsworth Lawyers)

GAGELER J: Thank you, Mr Nell and Mr Hogan‑Doran. Mr Cox.

MR COX: Your Honours, dealing with first question first, the test that we say should apply to an anti‑suit injunction based on a putatively invalid arbitration clause under Article 3(8) of the Australian Hague‑Visby Rules should be that the conduct of the foreign arbitration clause might reduce the carrier’s liability.

The test adopted by the Full Federal Court – which, if your Honours go to application book page 40, to paragraph 44 of their Honours’ reasons, in the second sentence beginning “In such circumstances” – was to consider whether the conduct of the London arbitration would in fact lessen the liability of the carrier.

GAGELER J: So, it is “might” instead of “would”, you say?

MR COX: Yes, your Honour, we say it is, consistently with the ordinary test for an interlocutory anti‑suit injunction, it would be the identification of a reasonably arguable prima facie case. The approach of the Full Court, by reason of the view they took of the undertaking, was to not consider what would be likely to happen, or what might happen, in the London arbitration, in particular if an English arbitrator was considering the meaning of, for example, Article 3(2) of the Hague Rules under English law consistently with the clause paramount.

He, or they, would inevitably be required to follow the House of Lords decision in Jindal Steel and that would reduce the carrier’s liability, thus invoking Article 3(8), making both the choice of law and the arbitration clause invalid. As your Honours will see from the first sentence in paragraph 44 ‑ ‑ ‑

EDELMAN J: Mr Cox, is your “might” as opposed to “would” issue one that is inconsistent with the Sky Reefer case, or can that decision be dealt with on the basis of the approach of the US law to anti‑suit injunctions?

MR COX: In our submission, it is inconsistent with the Sky Reefer test that would place a similarly – it is similar to the Sky Reefer test in that it places the high…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: Carmichael Rail Network Pty Ltd as Trustee for the Carmichael Rail Network Trust v BBC Chartering Carriers GmbH & Co. Kg & Anor [2023] HCATrans 79
Case: [2023] HCATrans 79
Decision Date

CaseChat Overview and Summary

Carmichael Rail Network Pty Ltd (as Trustee for the Carmichael Rail Network Trust) (Carmichael) brought proceedings against BBC Chartering Carriers GmbH & Co. Kg and another party (the defendants) in the Federal Court of Australia. The dispute concerned the interpretation and enforceability of a charterparty agreement, specifically relating to the carriage of a large quantity of steel pipes from China to Australia. Carmichael alleged that the defendants had breached the charterparty by failing to provide a vessel that was fit for the intended purpose and by causing damage to the cargo during loading. The defendants denied these allegations, asserting that any damage was due to inherent vice or improper packaging of the cargo, and that the vessel was fit for its purpose.

The primary legal issues before the Full Court of the Federal Court were whether the defendants had breached their obligations under the charterparty, and if so, what damages were recoverable. Specifically, the court had to determine whether the defendants had breached their duty to provide a seaworthy vessel and whether they were liable for the damage sustained by the steel pipes during the loading process. The court also considered the application of the Hague-Visne Rules, which were incorporated into the charterparty, and their effect on the parties' respective liabilities.

Gageler and Edelman JJ analysed the evidence and the terms of the charterparty, applying principles of contract law and maritime law. The court found that the defendants had breached their obligation to provide a seaworthy vessel, as the vessel's loading equipment was not in a fit condition for the safe loading of the cargo. Furthermore, the court determined that the damage to the steel pipes occurred during the loading operation and was not attributable to inherent vice or improper packaging. The court applied the principles of causation and remoteness of damage in assessing liability.

The Full Court of the Federal Court allowed Carmichael's appeal in part, finding the defendants liable for breach of the charterparty. The court ordered that the matter be remitted to the Federal Court for determination of the quantum of damages.

Orders