Comandate Marine Corp v The Ship “Boomerang I”

[2006] FCA 1345

FEDERAL COURT OF AUSTRALIA

Comandate Marine Corp v The Ship “Boomerang I” [2006] FCA 1345

COMANDATE MARINE CORP v THE SHIP "BOOMERANG I"
NSD 1223 OF 2006

ALLSOP J
9 OCTOBER 2006
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1223 OF 2006

BETWEEN:	COMANDATE MARINE CORP Plaintiff/cross defendant
AND:	THE SHIP "BOOMERANG I" Defendant/cross claimant

JUDGE:	ALLSOP  J
DATE OF ORDER:	9 OCTOBER 2006
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. Pursuant to s 440D of the Corporations Act 2001 grants leave to proceed and to continue to proceed against Pan Australia Shipping Pty Limited (Pan) in respect of the Notice of Motion filed in Court on 9 October 2006 in these proceedings.

2. Orders that the cross-claim for wrongful arrest in matter 1223 of 2006 be stayed on and after 30 October 2006 unless the defendant/cross-claimant Pan or someone on its behalf pays into court, or otherwise secures to the satisfaction of the Registrar, the sum of $12,000, as security for the costs of the plaintiff/cross-defendant in the hearing on liability in said cross-claim.

3. Orders that if said security is not so paid or otherwise secured the plaintiff/cross-defendant have leave to move for dismissal of the cross-claim.

4. Orders that the question of liability of the plaintiff for damages under s 34 of the Admiralty Act 1988 as alleged in the cross-claim be heard separately and before any issue of damages in said cross-claim, noting that all questions of damage be heard after the question of liability.

5. Orders that there be liberty to apply on 3 days’ notice.

6. Orders that the proceedings stand over for argument and/or directions to
   Friday 13 October at 9:30 am.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1223 OF 2006

BETWEEN:	COMANDATE MARINE CORP Plaintiff/cross defendant
AND:	THE SHIP "BOOMERANG I" Defendant/cross claimant

JUDGE:	ALLSOP  J
DATE:	9 OCTOBER 2006
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. In the ‘Boomerang I’ proceedings, that is the arrest by Comandate Marine Corp of ‘Boomerang I’, the only residual matter left is a cross-claim by Pan Australia Shipping Pty Limited (Pan) for the wrongful arrest of ‘Boomerang I’ under section 34 of the Admiralty Act 1988. 

2. I need not rehearse the events concerning the arrest of ‘Boomerang I’ except to say that she was under demise charter to Pan and was arrested under the sister ship arrest provisions of the Act which require, at the commencement of the suit, that the ship be owned by the relevant person.

3. I propose, I think unopposed at this stage, to order that the hearing on liability on that wrongful arrest claim be heard separately from damages.  If that is done, as I propose to do, the hearing in relation to the liability question would last no longer than half a day.  It will be necessary for the parties to consider the pleadings and to prepare a body of agreed facts and if some aspects of the facts cannot be agreed to file affidavits which I doubt will be contentious.  Thus, there is a modest amount of preparation in relation to that hearing which will involve the care and attention of instructing solicitors, counsel and senior counsel.

4. The matter is one of some importance. The content of s 34 of the Act has not been the subject of judicial determination in this country. There was discussion of it in the Law Reform Commission Report and there is a live issue as to whether or not the old law, if I may use that expression, of gross negligence, is the full content of s 34 or whether some wider or looser test is contained within the words.

5. That identification of the issue reflects the need for some preparation in terms of research and submissions.  Not all such research would be work the payment for which would be received on taxation.  The parties are agreed that the matter will probably take half a day with written submissions.

6. The defendant cross-claimant, Pan, had a voluntary administrator appointed last Monday, 2 October 2006.  In these circumstances the plaintiff cross-defendant, Comandate, seeks security for costs.  It had previously indicated through counsel that it would not seek security for costs if the hearing was split as I propose to do.  However, it is not suggested that any step was taken in reliance upon that position and I would take the view that the appointment of the administrator has changed the landscape sufficiently to make it entirely appropriate for Comandate to change its attitude to security.  Given the circumstances of the appointment of the administrator I think it entirely appropriate that an order for security be made and I propose to make one.  The only issue is one of amount.   At my suggestion the parties have, if I may say so, sensibly accepted the view that this application should be attended to summarily without the need for detailed affidavits. 

7. An estimate of costs was handed up by Mr Street which I will have marked as exhibit A on the motion as evidence that his solicitor Mr Wilson would have put in an affidavit as to the likely costs of a hearing.  The estimate of costs is a little over $26,000.  In my view, bearing in mind the degree of some preparation to which I have referred above both of solicitors and counsel, a sum in the order of $12,000 for taxed costs would be reasonable for security for a half day hearing on the issue that I have identified.  Therefore, the order that I propose to make is as follows:

   1. Pursuant to s 440D of the Corporations Act 2001 grants leave to proceed and to continue to proceed against Pan Australia Shipping Pty Limited (Pan) in respect of the Notice of Motion filed in Court on 9 October 2006 in these proceedings.
   2. Orders that the cross-claim for wrongful arrest in matter 1223 of 2006 be stayed on and after 30 October 2006 unless the defendant/cross-claimant Pan or someone on its behalf pays into court, or otherwise secures to the satisfaction of the Registrar, the sum of $12,000, as security for the costs of the plaintiff/cross-defendant in the hearing on liability in said cross-claim.
   3. Orders that if said security is not so paid or otherwise secured the plaintiff/cross-defendant have leave to move for dismissal of the cross-claim.
   4. Orders that the question of liability of the plaintiff for damages under s 34 of the Admiralty Act 1988 as alleged in the cross-claim be heard separately and before any issue of damages in said cross-claim, noting that all questions of damage be heard after the question of liability.
   5. Orders that there be liberty to apply on 3 days’ notice.
   6. Orders that the proceedings stand over for argument and/or directions to
      Friday 13 October at 9:30 am.

I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop.

Associate:

Dated:        12 October 2006

Counsel for the Plaintiff/Cross-Defendant:	Mr A.W Street QC
Solicitor for the Plaintiff/Cross-Defendant:	Norton White
Counsel for the Defendant/Cross-Claimant:	Mr A.S Bell SC
Solicitor for the Defendant/Cross-Claimant:	Ebsworth & Ebsworth
Date of Hearing:	9 October 2006
Date of Judgment:	9 October 2006