Cheng Xi Shipyard v The Ship “Falcon Trident” - [2006] FCA 759

FEDERAL COURT OF AUSTRALIA
Cheng XI Shipyard v The Ship ‘Falcon Trident’ [2006] FCA 759
PRACTICE AND PROCEDURE – application by respondent to action for order that applicant give security for costs – Federal Court Act 1976 (Cth), s 56 – Federal Court Rules, O 28 r 3 – factors relevant to exercise of discretion – apparent strength of applicant’s case – where applicant resident outside jurisdiction and has no assets in jurisdiction – held, in circumstances, appropriate to order security for costs.
Federal Court of Australia Act 1976 (Cth), s 51A, s 56
Federal Court Rules, O 28 r 3
Thasos Shipping Agency Co Ltd v Owners of the Ship ‘Balakleya’ [1998] FCA 520, referred to
Tisand Pty Ltd v Owners of the Ship MV ‘Cape Morton’(Ex ‘Freya’) (2004) 141 FCR 29, referred to
PS Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321, referred to
Logue v Hansen Technologies Ltd (2003) 125 FCR 590, referred to
Silveira v Australian Institute of Management [2001] FCA 1358, referred to
Balderrama v Commissioner for Australian Federal Police [2001] FCA 577, referred to
Gartner v Ernst and Young (No 3) [2003] FCA 1437, referred to
CHENG XI SHIPYARD v THE SHIP ‘FALCON TRIDENT’
WAD 180 OF 2004
BESANKO J
19 JUNE 2006
PERTH

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

WAD 180 OF 2004

BETWEEN:

CHENG XI SHIPYARD
PLAINTIFF

AND:

THE SHIP ‘FALCON TRIDENT’
DEFENDANT

JUDGE:

BESANKO J

DATE OF ORDER:

19 JUNE 2006

WHERE MADE:

PERTH

THE COURT ORDERS THAT:
1.The plaintiff give security in a form satisfactory to the Registrar for the payment of costs that may be awarded against it in the sum of $65,000.
2.Pending the provision of security as required by paragraph 1 hereof, this proceeding be stayed.

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

WAD 180 OF 2004

BETWEEN:

CHENG XI SHIPYARD
PLAINTIFF

AND:

THE SHIP ‘FALCON TRIDENT’
DEFENDANT

JUDGE:

BESANKO J

DATE:

19 JUNE 2006

PLACE:

PERTH

REASONS FOR JUDGMENT

The plaintiff is incorporated according to the laws of the People’s Republic of China and is able to bring proceedings in its own name. At all material times, it has carried on business as a ship builder and ship repairer at No 1 Hengshan Road, Jiangyin City, Jiangsu, in the People’s Republic of China (‘the shipyard’).
It is common ground that the plaintiff carried out repair work on the defendant ship, the ‘Falcon Trident’.
On 2 August 2004 the plaintiff issued a writ in rem against the defendant, claiming the unpaid balance of the plaintiff’s charges for repairs to the ship, being a sum of US$233,500, the issue of a warrant for the arrest of the ship, interest pursuant to s 51A of the Federal Court of Australia Act 1976 (Cth) and costs. The relevant person named in the writ was Maritime Carriers International Corporation, of Monrovia, Liberia, being the owner of the ship. The…

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

Case: [2006] FCA 759
Decision Date: 19 JUNE 2006

CaseChat Overview and Summary

The case of Cheng Xi Shipyard v The Ship “Falcon Trident” was heard in an Australian court where the plaintiff, Cheng Xi Shipyard, sought an order to secure the costs that may be awarded against it in the proceedings. The defendant, the ship "Falcon Trident," contested the amount of security proposed by the plaintiff. The court was required to determine an appropriate amount of security for the plaintiff to provide to cover potential costs.

The court examined the estimates provided by the defendant, which the judge found to be high in terms of the forecasted number of items and attendances. The estimates also included costs related to the trial, which the court deemed inappropriate for the initial calculation of the security amount. The court believed it more suitable to base the security amount on work to be completed up to and including the first day of the trial. The court also considered that the defendant could make another application for additional security if necessary.

After considering all the circumstances, the court decided to set the security amount at $65,000. The court ordered that the plaintiff provide security in a form acceptable to the Registrar for the payment of costs that may be awarded against it in the sum of $65,000. The court also ordered that the proceedings would be stayed pending the provision of the required security. The court further indicated that it would hear the parties on the costs of the notice of motion.

ORDERS:
1. The plaintiff shall provide security in a form satisfactory to the Registrar for the payment of costs that may be awarded against it in the sum of $65,000.
2. Pending the provision of security as required by paragraph 1, this proceeding shall be stayed.

Orders

Orders of the court

1. The plaintiff give security in a form satisfactory to the Registrar for the payment of costs that may be awarded against it in the sum of $65,000.

2. Pending the provision of security as required by paragraph 1 hereof, this proceeding be stayed.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

BESANKO J

I have considered the estimates put forward by the defendant. They seem high in terms of the forecast number of items and attendances. Furthermore, the estimates include the costs of trial, whereas I think it appropriate to proceed on the basis that I should calculate the amount by reference to work to be carried out up to and including the first day of trial. The defendant can always make another application for further security. In all the circumstances, I have decided to fix an amount of $65,000.Conclusion For these reasons, I will order that the plaintiff give security in a form satisfactory to the Registrar for the payment of costs that may be awarded against it in the sum of $65,000. Pending the provision of security, the proceedings will be stayed. I will hear the parties as to the costs of the notice of motion.

Ratio Decidendi

Legal Principle Established

Established by: BESANKO J

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WAD 180 OF 2004

BETWEEN:	CHENG XI SHIPYARD PLAINTIFF
AND:	THE SHIP ‘FALCON TRIDENT’ DEFENDANT
JUDGE:	BESANKO J
DATE OF ORDER:	19 JUNE 2006
WHERE MADE:	PERTH

JUDGE:	BESANKO J
DATE:	19 JUNE 2006
PLACE:	PERTH