KMP Coastal Oil Pte Ltd v The Owner of Motor Vessel "Iran Amanat"
[1996] FCA 1122
•20 DECEMBER 1996
CATCHWORDS
ADMIRALTY - application to vary or set aside a judgment and orders of the court - O 35 r 7(1) of the Federal Court Rules - proceedings relate to release from arrest of a vessel on basis of a finding that the defendant/owner was not a "relevant person" within the meaning of s 3 of the Admiralty Act 1988 (Cth) - grant of application to review prior decision is "exceptional" and only granted where court has good reason to consider it has proceeded under a misapprehension as to facts or law - whether lodging an unconditional appearance amounted to an admission of jurisdiction in the circumstances - defendant plainly submitted court lacked jurisdiction to arrest vessel - nature of appearance not raised at hearing - whether application under r 52 of the Admiralty Rules amounted to a concession that there was a valid arrest - "arrest" simply refers to detention - Admiralty Act 1988 contemplates arrests which may be unreasonable and without good cause - whether letter of indemnity prevents defendant relying on want of jurisdiction - indemnity provided for purpose of lifting stay of orders and does not operate as a concession that the Court has jurisdiction.
PRACTICE AND PROCEDURE - application to stay or vary or set aside a judgment and orders of the Court - O 35 r 7(1) of the Federal Court Rules - Court only grants applications for review of prior decision in exceptional circumstances where court has a good reason to consider it has proceeded under a misapprehension as to facts of law.
Federal Court of Australia Act 1976 (Cth)
Federal Court Rules, O 35 r 7(1), O 52 r 10, O 9 rr 6 & 7
Admiralty Act 1988 (Cth) ss 17, 19, 34
Admiralty Rules, r 52, Form 19, r 48
The Shell Oil Company v The Ship 'Lastrogoni' (1974)
131 CLR 1, cited
'The Nordglimt' [1988] QB 183, cited
Autodisk Inc v Dyason (No 2) (1993) 176 CLR 300, considered
Smith v New South Bar Association (1992) 176 CLR 256, cited
The August 8 [1983] 2 AC 450, distinguished
The Gemma [1899] P 285, distinguished
Baltic Shipping Company v Dillon "Mikhail Lermontov" [1991]
22 NSWLR 1, cited
Australian Electoral Commission v Towney (1994)
54 FCR 383, cited
Huntsman Chemical Company Australia Ltd v International Pools Australia Ltd [1995] 36 NSWLR 242, cited
International Convention for the Unification of Certain Rules Relating to the Arrest of Seagoing Ships, Brussels, 1952, Article 1(2)
KMP COASTAL OIL PTE LTD -v-
THE OWNER OF MOTOR VESSEL "IRAN AMANAT" and the 84 other vessels set out in the Application
NO NG 829 of 1996
Tamberlin J
Sydney
20 December 1996
IN THE FEDERAL COURT OF AUSTRALIA )
NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 829 of 1996
GENERAL DIVISION )
IN ADMIRALTY )
BETWEEN: KMP COASTAL OIL PTE LTD
Plaintiff
AND:THE OWNER OF MOTOR VESSEL "IRAN AMANAT" and the 84 other vessels set out in the Application
Defendant
CORAM: TAMBERLIN J
PLACE: SYDNEY
DATED: 20 DECEMBER 1996
MINUTE OF ORDERS
THE COURT ORDERS THAT:
The application be dismissed.
The plaintiff pay the defendant's costs of this application.
The plaintiff pay the defendant's costs of the application for release of the vessel.
The defendant pay the plaintiff's costs of the application for leave to appeal.
The defendant pay the plaintiff's costs of the application for stay of the order for release of the vessel pending appeal.
NOTE: Settlement and entry of orders is dealt with in accordance with Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 829 of 1996
GENERAL DIVISION )
IN ADMIRALTY )
BETWEEN: KMP COASTAL OIL PTE LTD
Plaintiff
AND:THE OWNER OF MOTOR VESSEL "IRAN AMANAT" and the 84 other vessels set out in the Application
Defendant
CORAM: TAMBERLIN J
PLACE: SYDNEY
DATED: 20 DECEMBER 1996
REASONS FOR JUDGMENT
TAMBERLIN J:
On 7 November 1996 the plaintiff filed a Notice of Motion seeking orders that the Court vary or set aside its judgment of 23 October 1996; vacate orders made on 23 October 1996 and enter judgment for the plaintiff for approximately USD 156,536.
Brief History
On 15 October 1996 the plaintiff commenced in rem proceedings against the Motor Vessel "Iran Amanat" ("the vessel"), seeking to have it arrested, judgment for a specified amount, and damages, interest and costs.
The plaintiff's claim against the vessel is for bunkers supplied to two sister ships owned by the defendant. The bunkers were alleged to have been supplied during April and May 1996 in Singapore. The claim was similar to that discussed in The Shell Oil Company v The Ship "Lastrogoni" (1974) 131 CLR 1. There is a helpful analysis of the nature of an action in rem in The Nordglimt [1988] QB 183 at 199-200 by Hobhouse J.
The vessel was arrested in the Port of Geelong, Victoria on 16 October 1996. By the time argument was concluded on the application for release it had missed several voyages as a result of the arrest.
On 18 October 1996 an application for release of the vessel was made on behalf of the owner. The ground for the application was expressed to be want of jurisdiction under ss17 or 19 of the Admiralty Act 1988 (Cth) ("the Act"). The matter came on for hearing on the afternoon of Friday 18 October 1996 and being part-heard was adjourned for further hearing on Monday 21 October.
The question then raised for decision was whether the debt incurred, in respect of the bunker fuel supplied by the plaintiff, upon which the arrest application was based, was incurred by the owner. To support the arrest the plaintiff was required to establish that the owner and defendant was "a relevant person" within the meaning of s3 of the Act. That is to say, a person who would be liable on the claim in a proceeding commenced as an action in personam.
On 22 October 1996, I announced my conclusion that I was not satisfied, on the balance of probabilities, that the owner was a "relevant person" who had incurred in personam liability in relation to the supply of the bunkers.
When I announced my conclusions I stated I would deliver reasons later in the week.
On 22 October I ordered that the vessel be released from arrest.
An application was then made for leave to appeal under O52 r10 of the Federal Court Rules. After hearing argument I granted this leave. The plaintiff then sought a stay of the orders until hearing of the appeal and I acceded to this application.
Once the stay had been granted, the solicitor for the defendant sought an undertaking as to any damages it might suffer as a consequence of the stay pending appeal. The parties then made submissions with respect to whether such an undertaking should be exacted.
After some discussion, I considered that in view of the possibility of substantial detriment to the ship owner, it was
appropriate to require an undertaking as to damages as a condition of the stay. I made an order to that effect.
On 23 October 1996 I published the reasons for my conclusion that the plaintiff had not established that the defendant was a "relevant person".
On 23 October 1996, in the course of the ensuing argument in relation to the terms of the stay of the order for release pending appeal, the parties requested an adjournment. Upon resumption of proceedings later that afternoon the owner announced that a North of England P & I Association letter had been provided to the plaintiff and that this was acceptable to the plaintiff. Counsel for the plaintiff stated that his instructions were not to oppose the withdrawal of the stay on provision of the letter. Accordingly, the stay was lifted and the vessel was released pending appeal. The question of costs was reserved. Leave was granted to the plaintiff to file a Notice of Appeal in the matter which it subsequently did.
The vessel sailed on 23 October 1996.
Present Application to Review Judgment
The Court is asked to review its judgment and to set aside the orders of 22 October 1996 on the basis that, after judgment, the owner admitted the court's jurisdiction whereby the
judgment and orders were rendered otiose and the pursuit of any appeal would be futile.
At the date of hearing of this application the orders had not been entered and the plaintiff moved under O35 r7(1) of the Federal Court Rules to vary or set aside the judgment and orders before they were entered.
In Autodisk Inc v Dyason (No 2) (1993) 176 CLR 300, Mason CJ described the grant of an application reviewing a prior decision as being "exceptional" and one which might be open where the court has good reason to consider that in its earlier judgment it has proceeded under a misapprehension as to the facts or the law. At 303, his Honour proceeded to say:
".... it must be emphasized that the jurisdiction is not to be exercised for the purpose of re-agitating arguments already considered by the Court; nor is it to be exercised simply because the party seeking a rehearing has failed to present the argument in all its aspects or as well as it might have been put. What must emerge, in order to enliven the exercise of the jurisdiction, is that the Court has apparently proceeded according to some misapprehension of the facts or the relevant law and that this misapprehension cannot be attributed solely to the neglect or default of the party seeking the rehearing. The purpose of the jurisdiction is not to provide a backdoor method by which unsuccessful litigants can seek to reargue their case."
One important underlying consideration, on an application to review, is the public interest in maintaining the finality of
litigation: Smith v New South Wales Bar Association (1992) 176 CLR 256 at 265.
In the present matter, the Court is asked to consider arguments which were open to the plaintiff prior to its lifting of the stay and the order for release of the vessel by consent on 23 October 1996. In this matter the Court did not proceed on any misapprehension as to either fact or law. The plaintiff, on the present application, seeks to advance submissions which were not previously raised and which were available before it agreed to the release. At the time of the release of the vessel on the afternoon of 23 October 1996, the Notice of Appearance had been filed; the Letter of Undertaking had been handed over and the application under r52 of the Admiralty Rules had been made. Yet, no submission was made in relation to these matters. Nor was there was any claim made for summary judgment.
As is common in applications for release from arrest, this matter came on for an urgent hearing and this may furnish some explanation as to why the matters now raised were not raised at that time. Nevertheless, given that the matter was heard as time became available over several days, this does not satisfactorily explain why the arguments were not raised prior to release, nor as to why the plaintiff's motion was not filed until approximately three weeks after the orders were made.
Applicant's Arguments
On 18 October 1996 when the defendant commenced action under Admiralty Rule 52 for release of the vessel from arrest, it did not file a conditional appearance or make applications under O9, rr6 and 7 of the Federal Court Rules, which it is said was the proper procedure for contesting jurisdiction. The plaintiff submits that the lodging of an appearance not expressed to be conditional was an admission that the Court had jurisdiction to grant the relief sought by the plaintiff.
It is said that on 23 October 1996, when the defendant proffered security to the plaintiff in the form of an acceptable letter of undertaking by a first class P & I club member, the defendant thereby accepted that the Court had jurisdiction to hear the claim. Alternatively, it is submitted that by handing over the security in the form proffered and making an application under r52 of the Admiralty Rules, the defendant admitted that the Court had authority to hear the matter. Therefore, so the argument runs, having submitted to the jurisdiction of the Court, albeit after judgment, the judgment and orders of the Court were rendered nugatory and it would be futile for the plaintiff to proceed with its appeal in respect of which leave has been granted, as there can be no continuing dispute as to the Court's jurisdiction.
The plaintiff submits that the Federal Court being a superior court of record, may review and vary or set aside its judgment and orders where an important factual matter has been misapprehended by the Court or the parties for whatever reason and where the orders of the court have not been entered. It is said that the events giving rise to the application to set aside the judgment and orders took place without any default, on the part of the plaintiff, because the defendant had the North of England P & I letter in its possession since shortly after 18 October 1996. It is common ground that the defendant had the letter in its possession from about 21 October 1996.
Notice of Appearance
When the matter came before me on 18 October, Mr Wilson appeared for the seventh defendant, which is the owner of the motor vessel, "Iran Amanat" and the surrogate vessels. He did not at that time file a Notice of Appearance but was given leave to file one at a later stage. The Notice of Appearance was filed on 21 October 1996. It was not expressed to be conditional.
At the hearing on 18 October 1996, it was clear that the defendant owner was seeking release of the vessel on the ground that there was no contractual liability between the defendant and the plaintiff in respect of the supply of bunkers and that the defendant was challenging the power of the Court to continue the proceeding because the defendant was not a "relevant person" within s17 and was not shown to have incurred an in personam liability.
The appearance filed on 21 October 1996 stated that the "Islamic Republic of Iran Shipping Line" appeared and was the owner of the vessel. This Notice of Appearance was the document foreshadowed at the hearing on 18 October 1996 when the hearing of the application for release commenced.
On 22 October 1996 an application for release was filed by the defendant seeking release of the vessel. The ground specified was:
"Want of Jurisdiction not being a relevant person under section 17 and/or section 19 of the Admiralty Act 1988."
The application was in accordance with Form 19 of the Admiralty Rules as required by r52. That rule reads:
"52(1) A party to a proceeding may apply to the court in accordance with Form 19 for the release of a ship or other property that is under arrest in the proceeding.
(2) Where a caveat against release of the ship or property is in force, a copy of the application shall be served on the caveator.
(3) On an application under subrule (1), the court may order the release from arrest of the ship or property on such terms as are just."
The plaintiff submits that the defendant should have entered a conditional appearance under O9 r6 of the Federal Court Rules which provides:
"6(1) A respondent may enter a conditional appearance.
(2) A conditional appearance shall have effect for all purposes as an unconditional appearance, unless the Court otherwise orders or the respondent applies under and in accordance with rule 7 and the Court makes an order under that rule."
Rule 7 provides;
"(1) The Court may, on application made by a respondent to any originating process on notice of motion ... by order -
(a) set aside the originating process; ....
(2) Notice of Motion under sub-rule (1) may be filed by a respondent before he enters an appearance or within 14 days after the date of entry of a conditional appearance by him."
The plaintiff referred to the Privy Council decision in "The August 8" [1983] 2 AC 450. In that case, the vessel was arrested on 28 January 1978 in Singapore Harbour. On 2 February 1978, the shipowners entered an unconditional appearance in the master's action. On 15 March 1978 the master issued a summons for summary judgment, under the Singapore Supreme Court Rules, in which he applied for liberty to sign judgment against the shipowners. On 16 March he re-amended the statement of claim to plead the enlarged claims. The summons was served on the shipowners. On 10 May the Registrar heard the summons and made conditional orders allowing the shipowners to defend the master's action on the provision of security. The shipowner did not provide the
security and on 31 July the master entered judgment. There was then an application on 8 August by the shipowners seeking to set aside the judgment. One of the grounds was lack of jurisdiction.
In the reasons delivered by the Privy Council, at 456, their Lordships said:
"By the law of England, once a defendant in an Admiralty action in rem has entered an appearance in such action, he has submitted himself personally to the jurisdiction of the English Admiralty Court, and the result of that is that, from then on, the action continues against him not only as an action in rem but also as an action in personam: The Gemma [1899] P 285 292. ... If then that principle is applied in the present case, the situation is that, from the time when the shipowners entered an appearance in the master's action, as they did on February 2, 1978, the action continued not only in rem against the property proceeded against, namely, the ship, but also in personam against the shipowners themselves ... In so far therefore as, from the time of the shipowners' appearance, the master's action continued against them as an action in personam as well as an action in rem, it was clearly a kind of action to which Order 14 applied."
The remarks of their Lordships in The August 8 do not apply in the present case because in this proceeding at the time when the appearance was lodged, the parties were engaged in, and continued thereafter to be engaged in, a dispute as to whether the requirements of ss17 and 19 of the Act had been satisfied. Moreover, the defendant's application made it clear that the release was sought on the ground of want of jurisdiction
because the plaintiff was not a "relevant person". In The August 8 case there was no such factual context or jurisdictional dispute when the appearance was filed.
Likewise, in The Gemma [1899] P 285, which was the authority cited in The August 8, the Notice of Appearance was entered three days after the collision, when the managing owners undertook to put in bail and the vessel was thereupon released. There was no suggestion, in that case, of the appearance being filed during the course of argument disputing jurisdiction.
At 291 in The Gemma, A L Smith LJ said:
".... it appears to me that when persons, whose ship has been arrested by the marshal of the Admiralty Court, think fit to appear and fight out their liability before the Court, the form of the proceedings in the Admiralty Court shew - and it is not disputed that the forms I have referred to are those which have been in use, according to the practice of the Court, from olden times - that the persons so appearing as the defendants have done in the present case, become parties to the action, and thereby become personally liable to pay whatever in the result may be decreed against them; and the action, though originally commenced in rem, becomes a personal action against the defendants upon appearance. For what purpose does a party appear to an action in rem? There are, ... three reasons for the appearance: first, to release the ship, so that it may go on trading for the owner; secondly, to contest the plaintiffs' allegations that the ship had been in default; and, thirdly, in order to prevent its being sold -
..."
In the present case, the reason and basis for the appearance was obvious, namely, to dispute the jurisdiction of the Court and obtain the release of the vessel.
After the appearance was filed in Court on 21 October 1996, the plaintiff did not raise any argument to the effect that the defendant had thereby submitted to the jurisdiction, but rather took the course of hearing out the submissions on jurisdiction advanced by the defendant and then making counter submissions on the jurisdictional issue without any reliance on the appearance. The submission that the appearance being unconditional conceded jurisdiction, was not adverted to. It was raised for the first time in argument on the hearing of the application to set aside the judgment and orders on 20 November 1996.
Admiralty Rule 52
As a further argument, it was submitted that by making an application under r52 of the Admiralty Rules for release of a vessel that "is under arrest in the proceeding", the defendant has conceded that there was a valid arrest and that the Court had jurisdiction to hear the matter.
Reference was made to Form 19 of the Admiralty Rules which is the prescribed form of application to the Court for release of a ship. The form contains a reference to the "release" of the ship under arrest, which it was suggested, must mean that the defendant conceded there had been a valid arrest. The plaintiff also refers to the undertaking provided for in the Form to pay the fees and expenses of the marshal in connection with the custody of the ship whilst under arrest. It was said that this reference amounts to an admission that there has been a valid arrest.
The difficulty with this argument is that in this case the ground on which release was sought in the application was specified as lack of jurisdiction because the defendant was not a "relevant person" under ss17 or 19 of the Act. In my opinion, where such a ground is relied on, it is simply not to correct to treat the application for release as an admission or concession that jurisdiction exists. Such a submission is directly contrary to the very ground on which the application was made.
Furthermore, I do not consider that an application under r52 is an admission that the ship has been validly arrested and that the Court has authority to grant the application in rem regardless as to whether the owner is a relevant person. Counsel could not refer me to any authority to support the submission that by making an application under r52 a party concedes that the Court has jurisdiction to entertain the plaintiff's claim. In my opinion, the preferable reading of r52 is that it applies where a ship or other property has, in fact, been arrested and is under the custody and control of the marshal.
The expression "arrest" in r52, is referring to "arrest" in the sense of detention by the Court to secure a maritime claim. The application made pursuant to r52 is one to obtain the discharge of the vessel from the custody of the Admiralty Court. The expression is not used in any sense which could be construed as meaning that an applicant for release must be taken to have admitted that the arrest was lawful or that the plaintiff had authority to arrest the vessel notwithstanding non-compliance with s17 or s19 of the Act.
The above approach to the consequences of an application for release of a ship under arrest is consistent with the 1952 International Convention for the Unification of Certain Rules Relating to the Arrest of Seagoing Ships made in Brussels, which in Article 1(2) defines "arrest" as:
".... the detention of a ship by judicial process to secure a maritime claim, but does not include the seizure of a ship in execution or satisfaction of a judgment."
Rule 48 of the Admiralty Rules refers to a marshal having "custody of a ship or other property". Rules 47 and 48 of the Admiralty Rules are concerned with the marshal having "custody of a ship or property." It is in this sense of judicial detention and custody that the term "arrest" is used in r52.
In addition, s34 of the Act which is concerned with "damages for unjustified arrest" contemplates that a vessel can be placed under "arrest" unreasonably and "without good cause". Therefore, a vessel may be referred to as being under arrest notwithstanding that there is subsequently found to be no good cause or basis for that arrest.
This argument was also not advanced by the plaintiff prior to the time when the order was made for the release of the vessel on the ground of want of jurisdiction. It was first raised in the Notice of Motion of 7 November 1996.
Indemnity Letter
A fourth submission made by the plaintiff is that the effect of the P & I club letter, dated 18 October 1996 which was handed to the plaintiff on 23 October 1996, is to prevent the defendant relying on want of jurisdiction.
The letter was proffered and accepted by the plaintiff prior to the Court lifting the stay pending appeal. Thereafter the stay was lifted and the vessel released. Counsel for the plaintiff stated that, having regard to the letter of undertaking, his instructions were not to oppose the withdrawal or revocation of the stay. Accordingly, the stay pending appeal, was lifted and the vessel departed. There was then a request to reserve costs and a Notice of Appeal was filed.
The P & I club letter dated 18 October 1996 is on the letterhead of the "North of England P & I Association Limited of Newcastle, England" is addressed to the plaintiff and reads:
"Dear Sirs
"IRAN AMANAT" AT GEELONG 16 OCTOBER 1996 - CLAIM BY KMP COASTAL OIL PTE LTD FOR NON-PAYMENT OF BUNKERS SUPPLIED TO "IRAN CHAMRAN" And "IRAN ADL" AT SINGAPORE IN APRIL AND MAY 1996
In consideration of your releasing mv "IRAN AMANAT" from arrest and your refraining from taking any action resulting in the arrest or detaining of MV "IRAN AMANAT" or any other vessel or property in the same ownership, associated ownership, management or control or any vessel owned by the Islamic Republic of Iran Shipping Lines for the purpose of founding jurisdiction or obtaining security in respect of or arising out of any claim by KMP Coastal Oil Pte Ltd in respect of non-payment for bunkers supplied to "IRAN CHAMRAN" and "IRAN ADL" at Singapore in April and May 1996 respectively we, North of England P & I Association Limited, hereby guarantee to pay to you or your solicitors on your behalf such sums as may be adjudged to be due to you from Islamic Republic of Iran Shipping Lines by the Supreme Court of New South Wales or the Federal Court of Australia or other competent Court or Tribunal or on final appeal therefrom, or as may be agreed by us in writing to be recoverable from you in respect of the said claim, interest and costs, provided that the total of our liability hereunder shall not exceed the sum of US$200,000.00.
We undertake that we will, within 14 days of the receipt from you or your solicitors of a request so to do, instruct solicitors to accept on behalf of Islamic Republic of Iran Shipping Lines service of proceedings brought by you in the Federal Court of Australia and warrant that we have received irrevocable authority from the Islamic Republic of Iran Shipping Lines to instruct solicitors as above.
We further agree to submit to the jurisdiction of the Supreme Court of New South Wales or the Federal Court of Australia or other competent Court for the purpose of any process for the enforcement hereof.
This guarantee is given without prejudice to any rights or defences available to the owners of "IRAN AMANAT". This undertaking shall be governed by and construed in accordance with the laws of England.
Yours faithfully,
NORTH OF ENGLAND P & I ASSOCIATION LIMITED"
The plaintiff points to the following features of the letter in support of the suggestion that it amounted to an admission of the Court's jurisdiction:
•the undertaking to pay to the plaintiff such sums as may be judged to be due from the owner by the Federal Court or other competent court: It is said that this is an admission that the Federal Court of Australia is competent to hear the matter and has jurisdiction.
•the undertaking to accept service on behalf of the owner of proceedings brought by the plaintiff in the Federal Court is an admission of jurisdiction: This is said to be authorised by the owner because it refers to irrevocable authority from the owner to instruct solicitors.
•the reference to an agreement to submit to the jurisdiction of the Federal Court of Australia or other competent court; is said to reinforce the point that the Federal Court of Australia is conceded to be a competent court for the purpose of jurisdiction.
•the reference to the giving of the guarantee "without prejudice to any rights or defences available to the owners of the vessel" is said not to be important because questions of competence authority or jurisdiction are not rights or defences available to the owners.
The letter of undertaking was, of course, provided for the purpose of lifting the stay of the order for release pending determination of the appeal. The defendant had succeeded in its contention that the plaintiff had not satisfied the requirements of ss 17 or 19 of the Act and there was no basis for continuing the detention of the vessel. The function of the letter was to protect the plaintiff in the event of a successful appeal.
The plaintiff did not at any time prior to 7 November 1996, foreshadow to the Court an argument that the letter of undertaking amounted to or evidenced an admission of or submission to the jurisdiction.
In short, the effect of the letter is that if the appeal is successful the defendant will have the security of the letter. On the other hand, if the appeal is unsuccessful the defendant would be entitled to have the letter of undertaking returned.
In my view, on a fair and reasonable reading of the indemnity letter, dated 18 October, in the circumstances in which it was
given, it cannot be said that it amounts to concession that the plaintiff was entitled to proceed in rem.
The reference to a guarantee of payment of sums which might be adjudged to be due from the owner by a competent court is not a submission to jurisdiction or a concession that the court has jurisdiction. The reservation in the penultimate paragraph to the effect that the guarantee was given without prejudice to any rights or defences available to the owner is significant and is inconsistent with a suggestion that the letter is intended to make any concession as to the authority of the Court to arrest the vessel. An entitlement to object to the right of the applicant to proceed in rem is, in my view, covered by and within the reservation.
While it is true that there is an undertaking to accept service on behalf of the owners, there is nothing in the letter which expresses any intention to waive the preliminary jurisdictional argument. The reference to submitting to the jurisdiction of the Federal Court is qualified by the expression "for the purposes of any process for the enforcement of the letter of indemnity". It is not a concession that the Court has jurisdiction for the purposes of ss17 or 19 of the Act.
In summary, the letter dated 18 October 1996, on a fair and reasonable construction, does not bear the meaning or effect which the plaintiff seeks to attribute to it.
I am not persuaded that any of the above submissions should be accepted.
Other Matters
Three other matters are raised.
The first is the submission that the defendant should pay the plaintiff's costs because at all material times the defendant had available the security of the first class P & I club letter and yet only proffered it on 23 October 1996. It is said that it could have done this on 18 October as requested by the plaintiff and that the question of security was the real issue as between the parties. The plaintiff refers to Baltic Shipping Company v Dillon "Mikhail Lermontov" [1991] 22 NSWLR 1 at 32; Australian Electoral Commission v Towney (1994) 54 FCR 383 at 388; Huntsman Chemical Company Australia Ltd v International Pools Australia Ltd [1995] 36 NSWLR 242 at 270.
The issue of substance between the parties in this matter was whether the defendant was a "relevant person". The undertaking was provided after the Court had decided that the plaintiff was not a "relevant person". Therefore the decision was that there was no authority for the plaintiff to arrest the vessel. An order for release was accordingly made. An application for leave to appeal was then granted and a stay of the order for release was granted. It was with reference to the application to lift the stay of the order for release pending appeal that the P & I letter was furnished as security in place of the vessel. This was done to allow the vessel to sail and avoid loss. The present case is quite a different case from the authorities relied on by the plaintiff.
In this case, the defendant had succeeded in obtaining a judgment because the evidence did not establish that the plaintiff was a "relevant person". In these circumstances there was nothing inappropriate in the defendant not providing the letter at an earlier date.
A second additional matter raised by the plaintiff related to the revocation of an order made by me on 22 October 1996 in which I required the plaintiff to provide an undertaking as to damages arising from the grant of a stay pending the appeal. It was common ground between the parties, and I agree, that this order was not appropriate. However, there is no point in setting it aside because the vessel was subsequently released after negotiation and agreement between the parties as to provision of the P & I club letter. No useful purpose would be served by vacating that order and I can see no difficulty arising from that order remaining to record what transpired.
Finally, a submission was made by the plaintiff that it should be granted summary judgment because the only question in issue was that with respect to jurisdiction. This was said to be a question of fact, namely the identity of the debtor and the
submission to, or admission of jurisdiction, amounted to an admission that the defendant was liable for the bunkers .
In my view, this submission fails because there has been no submission to jurisdiction. Moreover, even if there was a submission to jurisdiction the appearance is not an admission of liability.
For the reasons given above, I consider that the notice of motion of 7 November 1996 should be dismissed with costs. I also consider that the plaintiff should pay the costs of the defendant in relation to the earlier application on 18 October 1996 for release of the vessel. The defendant should pay the plaintiff's costs in relation to the question of whether leave to appeal should be granted and as to the stay of the order for release of the vessel pending appeal.
I certify that this and
the preceding twenty-two (22)
pages are a true copy of the
Reasons for Judgment herein of
his Honour Justice Tamberlin.
Associate:
Date: 20 December 1996
Counsel for Plaintiff/Applicant: Mr P E King
Solicitor for Plaintiff/Applicant: Phillips Fox
Counsel for Defendant/Respondent: Mr G J Nell
Solicitor for Defendant/Respondent: Norton Smith & Co
Date of Hearing: 20 and 26 November 1996
Date Judgment Delivered: 20 December 1996
0
6
0