Laemthong International Lines Co Ltd v BPS Shipping Ltd

[1997] HCATrans 170

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Darwin  No D16 of 1996

B e t w e e n -

LAEMTHONG INTERNATIONAL LINES CO. LTD as the owners of the ship “Laemthong Pride” as the surrogate for the vessel “Nyanza”

Appellant

and

B.P.S. SHIPPING LTD

Respondent

BRENNAN CJ

TOOHEY J
GAUDRON J
GUMMOW J
KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON TUESDAY, 24 JUNE 1997, AT 10.20 AM

(Continued from 23/6/97)

Copyright in the High Court of Australia

BRENNAN CJ:   Mr Cowdroy.

MR COWDROY:   Your Honour, before Mr Jackson commences, might I simply hand up to your Honours some additional material that arose out of questions and matters that were put to me yesterday during the course of argument.  The first page is simply the responses which upon reflection overnight the appellant puts to the Court in answer to three specific matters that were put to me during the course of argument yesterday.  I think the answers are self-explanatory.  The second page of the material, your Honours, is a list of cases which your Honour Justice Kirby indicated yesterday your Honour would be assisted by having - that is, cases that deal with the question of construction of treaties being part of domestic law.  I should indicate - - -

KIRBY J:   It was not quite that point:  It may be that some of these cases deal with it.  It was the point that where you have international commerce and there is some provision that is important for the very nature of the commerce that courts of countries like Australia will try to get a common.....in these sort of cases.

MR COWDROY:   Yes.  I think these cases will assist.  Your Honour, I apologise for the fact that we have not, because of access to libraries, been able to get the appropriate authorised report, the Commonwealth Law Report references, where indicated, but at least that might be a start. 

The third page of the material is the second page of the charter agreement to which attention was drawn yesterday appearing at page 57 of the supplementary bundle.  Page 57 of the supplementary bundle was Part I of the standard form of charter, that is the voyage charter relating to the cargo carried by the “Nyanza”.  The material contained in the bundle, which is headed “Part II, “Gencon” Charter, these are the standard terms that should logically follow and would have followed immediately after page 57 of the supplementary bundle.  The only relevance of it is the first paragraph of the terms, clause 1 of the “Gencon” Charter.  That indicates that, in effect, the vessel was made available for the carriage of cargo from Bangkok to Mauritania.

The last document, your Honours, is a copy of the judgment of
The “Permina”.  Justice Kirby raised yesterday the question of the Singapore judgment.  That is The “Permina 108” set out in the bundle.

KIRBY J:   Your client was a Singapore company and is now a Thai company, is that correct, or the charterer was?

MR COWDROY:   Yes.  The owner of the “Laemthong Pride” is a Thailand company.  I hope that assists in clarifying some of the matters that were raised during the course of argument yesterday, your Honours.

BRENNAN CJ:   Thank you, Mr Cowdroy.  Mr Jackson.

MR JACKSON:   Your Honours, the appeal turns in the end, it is submitted, upon the meaning to be attributed to section 19 itself.  Section 19 is one of the exceptions to the general proposition stated in section 14 of the Admiralty Act, namely that proceeding is not to be commenced as an action in rem against a ship except as provided by that Act.  In dealing with the exceptions which are found in sections 15 to 19, there are several features which, in our submission, are relevant to the resolution of the present issue.

Your Honours, one starts with the similarity in language used in sections 17(a), 18(a) and 19(a) and by that I mean the use, on the one hand, of the expression “the owner or charterer of the ship” and, on the other hand, the expression “in possession or control of the ship”.  There seems, in our submission, no very compelling or, indeed, we would submit, no very good reason why the term “charterer” in any of those three provisions should be treated as having a meaning different from that which it bears in one of the other two.  The differences for relevant purposes, in our submission, are to be found not in paragraph (a) of any of those three provisions but, in fact, in paragraph (b) where what your Honours see is that section 17(b) requires the relevant person to be the owner; 18(b), the relevant person is the demise charterer; and in 19(b), the relevant person is the owner of another ship.  What paragraph (b) does in each case is to say that if one of those three relationships existed at the time of commencement of the action, whatever might have been the position at the time when the cause of action arose, then the proceedings may be commenced as an action in rem.

TOOHEY J:   It is not quite right though, is it, Mr Jackson, in relation to section 18 because there is a shift in language between paragraphs (a) and (b) from “charterer” to “demise charterer”?

MR JACKSON:   I am sorry, your Honour, I was going to come to that.  I was just speaking about paragraph (a) for the moment.  What I am seeking to say is that what paragraph (b) does in each case is to say that if any of the three relationships, and by that I mean the “the owner” in 17(b), “demise charterer” in 18(b) or the owner of another ship exists at the time when the proceedings are commenced, then that, your Honour, is the relevant difference and the proceedings can be commenced against whichever of those persons it may be.

TOOHEY J:   Perhaps I misunderstood the submission which I thought was that in the case of each of those three sections paragraph (b) picks up one of the elements of paragraph (a).

MR JACKSON:   No, I am sorry, your Honour, I was not saying that, with respect.  What I was seeking to say was really two things and perhaps I have elided them in a way.  What I was seeking to say first was that if one looks at the terms of sections 17, 18 and 19 and looks first at paragraph (a), one sees there is no change in language, (a) as against (a) as against (a), the same concepts are used:  “owner”, “charterer”, “possession or control”.

When one comes to paragraph (b) in each case, what one sees is that there is a difference, the difference being, on the one hand, in 17, “owner”; in 18(b) it is “demise charterer” and in 19(b) it is “the owner” of another different ship.  What I am seeking to say in relation to that is that what paragraph (b) does in relation to each of those three provisions is to say that if one of those three relationships existed at the time of commencement of the action, whether that relationship had existed at the time when the cause of action arose or not, the proceedings can be commenced as an action in rem against the relevant ship.  When I say “the relevant ship” I mean, of course, in the case of 17 and 18 the ship in relation to which the cause of action arose and, in 19, the other ship.

Your Honours, it may be, of course, that none of the three relationships referred to in 17(b), 18(b) or 19(b) exists at the time of commencement of the action and in that case it is bad luck for the plaintiff because the proceedings cannot be proceedings in rem.  What one sees, however, in looking at the three provisions, is that in each of them the provision which narrows the ambit of operation of the provision is really paragraph (b), not paragraph (a), because paragraph (a) in each case uses a wide collection of terms but paragraph (b) uses a narrow relationship to the ship in each of the three cases.

KIRBY J:  But that would be good even if you took the “charterer” in (a) to be “demise charterer”.

MR JACKSON:   Yes, it would be, your Honour.

KIRBY J:   It would still be a broader concept in (a) and narrowed down in (b).

MR JACKSON:   It could be, your Honour, but what one is seeing, however, is that in relation to the first submission I was making, the terms that are used in (a) remain the same.  The difference is to be found in (b) which uses three quite specific terms which have the operation of limiting the ambit of operation of a potentially wide expression in (a).  The second feature derives from what your Honour just put to me and that is when one looks at section 18(b), that when the Act intends to refer to “demise charterer”, it does actually use that expression specifically.

Your Honours, could we also say two further things about the language of those provisions.  The first is that the arrangement of the words, in our submission, in section 19(a) suggest that there are two broad classes:  firstly “owner or charterer of the ship” on the one hand and, on the other hand, “in possession or control of the ship”.  One cannot make too much of it because one relies, in a sense, on the punctuation and that perhaps follows from the linking of the concepts but your Honours will see the words “the owner or charterer of the first-mentioned ship” and the alternative being “or in possession or control of the first-mentioned ship”.

GUMMOW J:   Mr Cowdroy says that it is “the owner or the charterer”.  There can only be one charterer and one somehow connects back into that “possession or control” as producing a result that one looks in each case to find out who was in possession or control.  There can only be one person at any one time.

MR JACKSON:   Your Honour, if one makes the initial assumption involved in that, that is the answer one arrives at, I suppose, but the position is, of course, that there can be in relation to a ship someone who is the owner; there can be someone who is “the charterer” to take the simplest case; there can at the same time be someone who is in possession of the vessel adverse to the interests of both those people, and there could be a fourth person actually in control of it.  Your Honour, that could happen if you had a ship owned by A, chartered to B, which had been taken possession of by a mortgagee in possession but which was under the control of some port authorities, for example.  So, in our submission, the provisions are not ones that provide for the rather neat collection of alternatives that our learned friends would submit.

Your Honours, could we also say, of course, that much of the argument on behalf of the appellant, both orally and written, dwelt on the supposed practical difficulties which might arise where there are what are described as slot charters or charters of part only of a vessel.  The words used in section 19(a) and in the cognate provisions of 17(a) and 18(a) are, of course, “charterer of the ship” and that suggests that in relation to charterers, we would submit, the limitation, if any, is not to be found by reference to the type of charter in the sense that our learned friends would contend for but, rather, in the limitation imposed by the requirement that the charterer be charterer of the ship.  Your Honours, that reflects, of course, what really is historically the central notion involved in the concept of a charterer and that is that the charter is a charter of the vessel for a voyage or for a particular time or, indeed, a charter by way of a lease of the vessel, a charter by demise with voyage charters, the type of charter involved in this case, being the type of charter historically most frequently encountered.

Could we give your Honours two references in that regard.  The first is to Gilmore and Black’s Law of Admiralty, Second Edition, 1975, at page 193.  Your Honours should have copies of this in a loose form, I think.  Perhaps I could give the other reference.  It is Carver’s Carriage by Sea, the Thirteenth Edition, 1982, and I wanted to refer to page 410 in relation to that.

TOOHEY J:   Is that argument affected by what I take to be the provision in the Acts Interpretation Act allowing you to read plural for singular and singular for plural and subject to what the language of the Act might demand?

MR JACKSON:   Your Honour, of course, but could I just say that the way in which that provision would operate, in our submission, in a case in relation to say, sections 19, and 17(a) and 18(a) would be to recognise that the term “owner”, for example, was capable of being read in the plural as referring to the case where there was more than one owner of the vessel; “charterer” similarly where there were joint charterers or - but not to take it the step further, in our submission, of saying you then divide up the ship into charter because, no matter how much one tries in the end to divide it up, the fact of the matter is that each of the provisions does use the expression “owner or charterer or in possession or control of the ship”.  One is talking, in the end, about one ship, whichever it may be.  So, the Acts Interpretation Act provision does have an operation but in the context of our submission not to subdivide the ship, as it were.

BRENNAN CJ:   Mr Jackson, what was the page of Carver?

MR JACKSON:   Page 410.  Could I take your Honours first to Gilmore and Black, The Law of Admiralty, Second Edition, 1975, at 193.  What your Honours will see at article 4-1 at the top of that page is the expression:

The term “charter party,”.....designates the document in which are set forth the arrangements and contractual engagements entered into when one person (the “charterer”) takes over the use of the whole of a ship belong to another (the “owner”).

Now, your Honours will see the next few sentences are dealing with the case where there can be charters of less than the whole of the ship.  Towards the bottom of the page, your Honours, the third paragraph:

Charter parties are highly standardised.  There are three main types.

A.  The Voyage Charter.  In this form, the ship is engaged to carry a full cargo on a single voyage.

That is this case, your Honours, and I will take your Honours to the provision in the charter party a little later which indicates there was to be a full cargo of rice.  I also indicate, your Honours, the provision that dealt with the obligation concerning fumigation.  One sees then the other two types of charter, time charter and demise or bareboat charter, are dealt with on the succeeding page.  Your Honours, the essential difference between the demise charter and the time or voyage charter is that in the demise charter the charterer has to provide its own crew in effect and operate the vessel with its own crew.

I referred your Honours to those passages in that and if I could just go then to Carver’s Carriage by Sea, Thirteenth Edition, 1982, by Colinvaux.  I will not take your Honours to the detail of it.  Could I invite your Honours to look at page 410, the first paragraph on that page and also, particularly, the last paragraph on page 210:

Most commonly, however, charterparties are made for the purpose of securing to the charterer the use merely of the ship on a particular voyage or series of voyages.

And that goes on to the next page and a reference in the first new paragraph on page 411 to the fact that:

Contracts in which the possession -

that is demise charters -

of the ship is handed over to the charterer are very much less frequent.

Now, your Honours, could I just say that in the next few pages which are in the extract we have given your Honours there is a discussion of the various types of charters in a little more detail but I do not think I need to take your Honours to the detail of that.

KIRBY J:   Do you say slot charters would fall outside because of the words “charter of the ship”?

MR JACKSON:   Yes.  So, your Honours, what one sees is that charter parties, if one reduces them to their essentials, are really contracts for the use of the ship and we would submit, your Honours, that if one looks at section 19(a) and the cognate provisions of sections 17(a) and 18(a), that those provisions are concerned with circumstances where the relevant person was, to put it shortly, the owner of the vessel or had the use of the vessel or was in possession or control of it.  Now, your Honours, no doubt there is some degree of possible overlapping with those terms but one does note that if the term “charterer” were intended to refer only to demise charterers, there would be no need to say “charterer” at all.

Could I turn then, your Honours, to the position in other jurisdictions.  Our learned friend’s argument suggests that there is a body of authority in other jurisdictions supporting its position but the body of authority is somewhat thin, in our submission.  Indeed, there is not much of a trend that one can find, we would submit, in favour of our learned friend’s argument.  The body, if it be such, treads perhaps a little the other way.

Your Honours, in the United Kingdom a somewhat similar issue had arisen in the case to which your Honours have been referred in part and that is The “Span Terza” (1982) 1 Lloyd’s Reports 225. Could I take your Honours to that very briefly. Your Honours will see that in that case the issue arose in relation to section 3(4) of the Administration of Justice Act 1956, that provision being set out at page 226 in the right column, about halfway down. Your Honours will see that the provision required - and I am looking at the fourth line of subsection (4):

where the person who would be liable on the claim in an action in personam was, when the cause of action arose, the owner or charterer of, or in possession or in control of, the ship -

Now, your Honours, in relation to that your Honours will see the issue being raised in the next paragraph of the main text.  That is the one commencing “Mr Sumption”.  Your Honours will see the argument there set out and then at the bottom of the page, “this seems to be an inescapable conclusion”, Sir David Cairns said.  Your Honours will see then on the next page, page 227, in the first two paragraphs of that page he dealt with and rejected the contention that only demise charterer was contemplated by the expression “charterer”.

Indeed, your Honours will see in the second paragraph on page 227 that he adverted to the argument which I advanced to your Honours a moment ago, that there would have been no need for the use of the word “charterer” if only demise charterers were to be included.

KIRBY J:   But we were told yesterday that all of this is old hat, that Lord Donaldson had his last say and reverted to his own theory.

MR JACKSON:   Your Honour, it is a bit like Soviet history.  In the old days there was no reference to the case before and an obiter dictum, with respect.  Can I come to that in just a moment.  Your Honours, what I was going to say was that Lord Justice Stephenson gave reasons to the same effect as those of Sir David Cairns which - - -

KIRBY J:   This is before he said that it was not of much value.

MR JACKSON:   That is so, your Honour.  All I am trying to say about it, your Honours, is that if one looks at the case where there are reasons, which is this case, the majority is against the proposition the other side advance.  Your Honours will see that in Lord Justice Stephenson at page 231.  His reasons commence halfway down the page and your Honours will see in the first paragraph he agrees with Sir David Cairns.  The second paragraph says:

The words.....should be given their natural meaning unless there is good reason -

and he finds none to that effect.  Then the next paragraph:

any sufficient reason to limit the word to a charterer by demise.

And then he speaks of the urgency with which the matter was dealt.

Your Honours, the dissenting view of Lord Justice Donaldson at page 230, which your Honours will see fundamentally at the top in the first paragraph in the right column, is based on the collocation of words.  Apart from the collocation of words, he gives no reason why only demise charterers are to be included.  Your Honours will also see that his Lordship in that same column about halfway down the page refers to the Arrest of Ships Convention, the 1952 convention.  We have given your Honours copies of the convention in the papers we have given to the Court.  I do not think I need to take your Honours to the detail of it because the two provisions are extracted in this part of the judgment.  Your Honours will see that the provision for arrest of a different ship is provided for in provisions of that convention which deal with first of all common ownership and then secondly where there is a charterer by demise.

So that it is really, I suppose, hardly surprising if one looks at it from the point of view of adopting that convention to English law - and by that I mean the law in the United Kingdom - that what is said is that the view to be adopted by the minority judge is the view reflecting the convention.  But one also sees at page 231 in the left column in the first new paragraph on the page after referring to the convention, his Lordship says:

With respect, unlike my Lord, Sir David Cairns, I do not regard that -

“that” being something in the convention -

as providing any authority whatever for extending the word “charterer” to non owner-like charterers” -

Your Honours, all we would seek to say about that is that view of what Sir David Cairns has said does not seem to sit very well with what the report records him as saying.  If your Honours look at page 227 in the right column - and I will bring this agony to a close in just one moment if I may - halfway down the page, Sir David Cairns says:

In the circumstances, I do not find that the provisions of the Convention are of assistance to me in deciding this case; I prefer to go on my interpretation of the words themselves -

meaning the words of the Administration of Justice Act.

KIRBY J:   But you do not seem to be biting on Lord Donaldson’s real point which is that you have to take the meaning of “charterer” in its context and it is surrounded by owner-like persons.  It has the owner on one side and it has a person in possession and control on the other and that therefore that gives the quality to the title “charterer” that the statute is referring to.

MR JACKSON:   Or control, your Honour, possession or control, which may not be an owner-like right at all.

KIRBY J:   Control?

MR JACKSON:   The person in control of the ship.

GUMMOW J:   We were referred yesterday to The “Utopia” where the port authority had the ship.

MR JACKSON:   Yes, your Honour.  A disponent owner, for example, is a person who is in control of the ship, but the expression “control of the ship”, as your Honour says, can refer to persons other than persons having an interest in the ship of any kind.  Your Honour, the noscitur a sociis, as it were, approach that was taken by his Lordship in that case, knowing it by its companions, if one looks at the companions, if you look at “owner”, that tells you some ownership right.  If you look at “possession or control”, it does not indicate that the term “charterer” is to be given the narrowest of its several possible meanings.

Your Honours, what we would seek to say also is that if one goes to the other English case that was relied on, The “Evpo Agnic”, (1988) 1 WLR 1095 - - -

KIRBY J:   Do you accept that this states what is the current English law and practice, it being the last statement of an English court of high authority that has been - - -?

MR JACKSON:   No, your Honour.  What we submit is that it is purely an obiter dictum by a court of appeal in a matter which does not necessarily reflect the English - - -

KIRBY J:   This must come up quite often in English.....  There must be some text or a practice book or elucidate whether they follow The “Terza” or The “Evpo”.

MR JACKSON:   Your Honour, what one tends to see is a reference to the two cases but with issue being regarded as one that is undecided.  I am happy to give your Honour what references there are - not this minute perhaps, but if we could send your Honours a copy of - what we would seek to say, however, is that if one looks at what was said at page 1095 by Lord Donaldson and the top of the next page is that it is clear that the observation which he made was one in passing and was an obiter dictum because the case turned on the meaning of “owner” as appears in the fourth line on page 1096.  One also sees that the court does not appear to have referred to or to have been referred to The “Span Terza”.  One sees also at the bottom of page 1095 that he refers to the Arrest of Ships Convention.  The “notion” that is there referred to is something that has its basis in part at least in the Arrest of Ships Convention to which of course this country is not a party.

Your Honours, if one goes from England to Singapore, The “Permina 108” (1978) 1 Lloyd’s Law Reports 311, is a decision of the Singapore Court of Appeal in which the view for which we contend was taken. Your Honours will see that at page 314, the penultimate paragraph on the page, where members of the court said specifically that the contention that only a charterer by demise was involved should not be accepted because one would have expected the words “by demise” to precede “charterer”. In Hong Kong a more recent decision than that to which reference was earlier made, The “Sextum” (1982) 2 Lloyd’s Law Reports 532, Mr Justice Penlington - - -

BRENNAN CJ:   Is this one that has been handed up?

MR JACKSON:   The Court should have it, your Honour.

BRENNAN CJ:   We have a great deal of material but it is just a question of finding where it is.

MR JACKSON:   It was given to the Court yesterday, I think, your Honour.  Perhaps I can just give your Honours the reference to the relevant passage - it is a short passage.  Your Honours will see at page 534 in the right column, the last paragraph on the page.  The observations on that go over to page 535, the concluding paragraph on the page, the concluding paragraph of the reasons for judgment in the case.

BRENNAN CJ:   What does it say?

MR JACKSON:   What it says is that The “Permina” and The “Span Terza” were followed by Mr Justice Penlington.  He declined to treat the term “charterer” as being restricted to charterer by demise.  He gave it what he described as its ordinary meaning, notwithstanding that the convention applied to Hong Kong and regretted that he had come to a different conclusion from that of the judge in the earlier case which is referred to in The “Span Terza” in Hong Kong but thought that The “Span Terza” was the case that indicated the correct view of the matter, both as his own view and as a matter of following.  I am sorry if the case is not there.

BRENNAN CJ:   It does not seem as though we have that case at all, Mr Jackson.  Perhaps you could provide a copy of that.

MR JACKSON:   I will make sure copies are provided.

KIRBY J:   That was not in the Court of Appeal of Hong Kong?

MR JACKSON:   No, your Honour.

KIRBY J:   That was by the primary judge?

MR JACKSON:   Yes.

BRENNAN CJ:   Any reference to The “Evpo Agnic” in that case?

MR JACKSON:   No, your Honour, I do not think that the case had been decided then.

BRENNAN CJ:   Of course, 1982.

MR JACKSON:   Your Honours, could I say then that if one goes to the United States and Canada, there is no provision for surrogate or sister or related ship arrest at all.  At least in the United States that may reflect the underlying personification theory of actions in rem, and that is that the ship is in some way the wrongdoer.  A rather more procedural view is taken in Australia.  Your Honours, could we also say that what one sees from the various jurisdictions, some of which are referred to in the Australian Law Reform Commission at page 65 in paragraph 94, is that there is a wide variety of views taken in relation to what is maritime law.  The view that there is some international maritime law is one often stated but, as the report observes, somewhat lacking in correctness.

Certainly differing views are taken about whether there should or should not be the power to arrest substitute ships.  There is the Arrest of Ships Convention which at the present time has as parties a total of 66 parties, including some but not many of the major ship-owning nations of the world and of course including many nations which are hardly prominent in the shipping field at all, including such ones as the Holy See, Paraguay and Luxembourg.  The Battle of Lepanto may have involved government ships.  So. your Honours, what one sees is that one approach taken is that in the Arrest of Ships Convention.

One sees a slightly different approach, or an implementation perhaps of it, taken in United Kingdom provisions.  One sees in Australia provisions which are different again.  What one does see is that those matters were considered at the time when the Admiralty Act came into being.  The Admiralty Act had been the subject of a very, very comprehensive review and report by the Australian Law Reform Commission which was a major work in relation to a classification of and discussion of Australian admiralty law.

Your Honours, we have set out various extracts in our submissions.  I will not take your Honours to the detail of those, but one thing that is apparent is that the commission gave consideration to the very issue with which the Court is concerned and intended that the Act have the construction for which we contend.  I will take your Honours to one passage in relation to that and that is part of Chapter 10, namely paragraph 205, at page 156.  In that paragraph what was being discussed was what nexus there needed to be in order to entitle a claim in rem to be brought against another ship.  If I could commence about seven or eight lines from the start of the paragraph, it is said:

The appropriate rule is one which, as an alternative to allowing an action in rem to be commenced against the wrongdoing ship, allows such an action against a ship owned by the relevant person even though this person is not the owner of the wrongdoing ship.  This will occasionally allow an action against a surrogate ship even where there could be no action against the wrongdoing ship.  The most obvious examples are where the wrongdoing ship has sunk or been sold.....But another case would be where the claim is by an owner against someone using the owner’s ship on a time or voyage charter.  In such a case the owner has already got possession of his own ship, but he could, under the recommended provision, proceed against any other ship owned by the defendant.  This result is only illogical if one starts from the premise that the extended right of action should only provide a substitute for a right of action against the wrongdoing ship.

Then the proposition is discussed further.  Of course, what was recommended was the provision in the terms of section 19 and section 19 was brought in.

Your Honours, if I could just mention one thing in relation to the terms of the charter party itself.  Your Honours will see that at page 57 of the additional documents.  I just wanted to refer your Honours to two things about it.  The first is that about halfway down the page where the cargo proposed is mentioned, it says, “Full and complete cargo of BAGGED RICE”, so it is clear that it is speaking of a full cargo of the rice.  Two pages further on at page 59 in clause 5 your Honours will see the provision which provided for fumigation by the charterers.  What was the nature of the claim is that it was an implied term that the fumigation be done properly.

KIRBY J:   Where is that?  I am afraid I missed the reference.

MR JACKSON:   I am sorry, I was looking at page 59, clause 5.  It is the provision that deals specifically with fumigation.  What is said, however, in the case is that it is an implied term that when they did the fumigation they do it properly.  Your Honours, the final matter with which I wish to deal is the provision on which so much reliance has been placed by our learned friends, namely section 3(6).  It is clear, if I could say so, in the first place that section 3(6) is a definition section.  That that is so is made apparent by section 3(1) where the words “surrogate ship” are the second‑last words defined.  That takes one to subsection (6).  Section 3(6) is used to define a term, namely “surrogate ship”, used as far as we can see only in two places in the Act, namely section 20(4)(b) and section 35.

KIRBY J:   It is used in the heading to section 19.

MR JACKSON:   Yes, your Honour.  Could I just say two things about that.  The heading is not part of the Act on the one hand.  On the other hand, it is one of the materials that can be used under section 15AB, I think it is; similarly to the Law Reform Commission Report.  Could I just say, your Honour, the draftsmen’s brevity sometimes reflects inaccuracy in doing those things.  Sometimes also the head nods.  What we would submit about that, however, is that one really is looking first at the operative parts of the Act.  What one sees, we would submit, is that section 3(6) is concerned with a situation somewhat different from that contemplated by section 19.

If your Honours could go back to section 19 for a moment, what appears is that it is concerned with two points in time.  The first is when the cause of action arises.  The second is when the proceedings are commenced.  It is possible that the defendant who is the owner of the vessel at the later time, or the substituted vessel, as it were, the second‑mentioned ship, may also be the owner of the vessel in relation to which the cause of action arose at that time.  In other words, it may be that at the time when the proceeding is commenced the owner is not only the owner of the ship which is the one referred to in 19(b) but also has become the owner of the ship in relation to which 19(a) applies.  That is at the time of commencement of the cause of action.  It may be the case, it may not be.

Your Honours, it may never have been the case that the person who is the owner of the second ship in section 19 was the owner of the first ship.  So that the position may be that at the time when the proceedings are commenced there may only be the second‑mentioned ship in ownership or there may be, in effect, the first and second‑mentioned ship in the ownership of the same person.  It is the latter situation - that is where both ships are in the ownership of the same person - with which section 3(6) is concerned.  If one goes back to section 3(6) it speaks of the situation where one could commence proceedings in rem against the ship itself, as it were, the ship involved in the activities giving rise to the claim, or against the ship which is the substitute ship for the purposes of section 19.

TOOHEY J:   There is something of a problem though in trying to divorce section 19 from section 3(6), Mr Jackson, I think, in two respects.  One is that section 3(6)(b) draws in section 19 for a particular purpose but, perhaps more significantly, section 20(4)(b) speaks of a person commencing “a proceeding under section 19 against a surrogate ship”.

MR JACKSON:   Your Honour, I am not suggesting that they are entirely divorced.  What I am saying is that in some cases the second‑mentioned ship in section 19 will be a surrogate ship for the purposes of the two provisions for which that definition is used.  Sometimes the second‑mentioned ship will just be, in effect, the section 19 ship without it being a surrogate ship.  It will not be a surrogate ship unless the requirements of section 3(6) are satisfied, and that is that at the time when the proceedings had commenced, the proceedings could have been commenced against either the first ship - in effect, the ship involved in the activities giving rise to the cause of action - or could have been commenced against the other ship.  In that case there is in a real sense a surrogate ship.

That that is so, in our submission, appears first of all from the language of section 3(6)(a) because it speaks of “a proceeding on a maritime claim” being able to:

be commenced against a ship under a provision of this Act (other than section 19) -

That takes one, your Honours, of course to sections 15, 16, 17 and 18.  Sections 17 and 18 require that at the time when the proceeding be commenced, there be a demise charterer or an owner of the ship.  That situation will not be satisfied unless that ship is then in the relevant ownership, to put it shortly.

The second requirement of section 3(6) will be satisfied if the case is one to which, in relation to another ship, section 19 applies.  It is in the case where both the ships are available that section 3(6) comes into play, and one then goes to see what happens in relation to the definition - into the term - what happens with “surrogate ship” as so defined, and one sees, your Honours - and some working out is appropriate because two ships are involved, but it is the section 19 ship that is being proceeded against.  But the working out is done first by section 20(4), and what your Honours will see is that section 20(4) operates as an exception to the generality of the prohibition in section 20(3).  What subsection (3) says is that:

Where a ship has been arrested -

under one of the four provisions there referred to -

no other ship shall be arrested in the proceeding unless the first‑mentioned ship -

then your Honours will see the two requirements.  But there is an exception to that provided for by subsection (4) and that is:

Where:
(a)  a person has a claim that is both:

(i) a claim on a maritime lien or other charge -

on the one hand -

(ii) a general maritime claim;
in respect of a ship; and

(b) the person has commenced a proceeding under section 19 against a surrogate ship -

the surrogate ship being that because there was an option to proceed against the other ship.  Then it is said:

subsection (3) does not prevent the arrest of the first-mentioned ship in the proceeding on the maritime lien or other charge if the amount recovered by the person in the proceeding commenced under section 19 is less than the amount of the claim on the maritime lien -

and, your Honours, no doubt the provision allowing for there to be arrest and recovery against the first ship is perhaps not surprising , if one looks at the nature of many maritime liens, some of which are referred to in section 15(2), for example, claims for salvage, damage or wages and master’s disbursements.

Your Honours, if I could go to the other provision, section 35, what section 35 deals with is the case where proceedings could have been brought against the other ship, but as the ‑ ‑ ‑

GUMMOW J:   Just before you do that, Mr Jackson, with maritime liens the common notion of “owner” which appears with “demise charterer” which appears in 16, 17 and 18 will not apply, will it?

MR JACKSON:   I am sorry, your Honour?

GUMMOW J:   How does one adjust maritime liens under 15 to the notion of two sets of owners under 3(6)?  I can see how what you say works with section 16 and onwards, but 15 is the crucial one if one is talking about maritime liens, and when one is talking about 20(4).

MR JACKSON   Your Honour, 16 is excluded, of course, from the prohibition in 3.  It is not one of the provisions referred to, that is the first thing.  Let me put it this way, your Honour:  if one is looking at the case where the claim for a maritime lien or charge were to be made under section 15, now, in a case of that kind, that is the nature of the charge against the first ship, and that is a proceeding that could have been brought against the first ship.  But in most cases, your Honours, claims that are claims for maritime liens, or other charges, are claims that also could be brought as being claims which are general maritime claims because of the wide definition of that term in section 4(3)(d).

You will, for example, your Honour, if I could just take paragraph (r) of that definition, it deals with a claim for disbursements, for example.  That is something that is covered, also, by section 15(2) and I think each of the matters that might be regarded as being the subject of a maritime lien could also be the subject of a general maritime claim.

GUMMOW J:   What section 4 does seems to set up a division between proprietary and general maritime claims, but no separate division for liens.

MR JACKSON:   That is so, your Honour, yes.

GUMMOW J:   So, they have to be found in the structure that is set up in section 4, and you say they are found in 4(3).

MR JACKSON:   Well, they are found in 4(3).

GUMMOW J:   In various places.

MR JACKSON:   Yes.  For example, your Honour, 4(3)(a) takes one back to 15(2)(b) and they are, I think, all there, including the weights and so on.  Your Honours, if I could go then to section 35, what one sees there is section 35 is a situation where the definition of “surrogate ship” in both 35(1)(a) and 35(1)(b) means that the proceedings could have been brought either against one ship, or against the one which is the section 19 ship.  But it is, of course, ex hypothesi in section 35, the surrogate ship which has been arrested and is to be sold.

But, your Honours, that gives rise to the question what is to be the ranking, as it were, of the transferred claim in dealing with the proceeds - in relation to the proceeds that have come from the sale which, again to use the expression, ex hypothesi, will not be enough to satisfy all the claims.  Now, your Honours, admiralty has developed its own set of rules to determine the priority of claims against the proceeds of sale and your Honours will - if I could just give a reference to where your Honours will find that discussed.  It is in the Australian Law Reform Commission Report, paragraph 256 and the few succeeding paragraphs after that.  But if one were to apply the set of rules to, as it were, the transferred claim in its original possible manifestation against the ship to which it relates, then its priority may well have been a higher - it may have been a lien, for example.  Its priority may have been higher than as a general maritime claim.

Your Honours, what section 35 does is to say that if it is brought against the second ship, rather than as against the first ship, then it is to rank as a general maritime claim, an to rank pari passu with general maritime claims against that ship.  Your Honours, if one goes, if I could put it this way, to the ordinary section 19 case, where the definition of “surrogate ship” does not apply, then, in those circumstances, the claim under section 19 is simply a claim in rem, as it were, taking its ordinary priority, ranked in the ordinary way according to the Admiralty Rules.  It derives nothing, in effect, from what might have been.

KIRBY J:   It is awkward to ignore the heading, is it not?  I mean, it seems reasonably clear that what the drafter was suggesting was that this was the normal case of “surrogate ship”.  I realise that it is not part of the Act, but it is awkward to completely ignore section 19.

MR JACKSON:    Your Honour, the expression that is used is “right to proceed in rem against a surrogate ship”.  Now, some of the occasions to which section 19 applies will be occasions when there is, as defined, a surrogate ship; some will not.  All that is being sought to do is to put in short language what is a summary of the provision, or the major burden of it.  In fact, it may well be that in many cases the “surrogate ship” definition is applicable; but there will be some where it is not.

KIRBY J:   If it is applicable then, in this case, the “Nyanza” was not, or was it, “a proceeding on a maritime claim may be commenced against a ship under a provision of this Act”.

MR JACKSON:   Your Honour, the difficulty would be, of course, that a proceeding could not have been commenced relevantly under sections 17 or 18 because the appellant was not the demise charterer or owner.  We could not have satisfied them.

GUMMOW J:   Section 3(6) talks about “a proceeding” - in the first branch at section 3(6) paragraph (a) talks about:

a proceeding on a maritime claim -

whereas section 19 is talking about:

proceeding on a general maritime claim - - -

MR JACKSON:   Your Honour, what that does - maritime claims are defined in section 4(1).  They include two things:  proprietary maritime claims in section 4(2); general maritime claims in section 4(3).  Proprietary maritime claims are more or less as the name would suggest.  Your Honours will see the definition of the term.  One sees those provisions reflected if one goes back then to section 15.  One sees “maritime lien or other charge” which your Honours will see not referred to as being proprietary maritime claims but really they are types of general maritime claims.  One comes then to proprietary maritime claims specifically in section 16, and because they are proprietary it does not need to specify whether it is owner or demise charterer.  One comes then to section 17 which deals with general maritime claims and says it must be the owner.  When one goes to section 18 it speaks of maritime claims - that is both the classes - but extends it in part by saying it applies to demise charterers.  When one gets down, of course, to section 19, it speaks of general maritime claims.

If I can just revert to what your Honour Justice Kirby was putting to me.  The position in our submission is that if one is looking at the relative weight of the provisions, one does see that each of sections 15, 16, 17 and 18 seems to be a self‑contained provision; a self‑contained exception to paragraph 14.  Section 19 is a provision that, prima facie; is one that if one looks at the words of it is self‑contained.  It adopts the same format, the same structure as the earlier provisions.  All it does is to say, relevantly, instead of owner or demise charterer at sections 17, 18, you say “owner of the second‑mentioned ship”.

If one goes from that, one then has to say, “What effect does section 3(6) have upon that?”  The word defined by section 3(6) does not appear in section 19, but it does appear in sections 20 and 35.  One can see reasons for it appearing in sections 20 and 35.  Your Honours, it is, with respect, a significant jump to say that because the word, “surrogate ship”, which covers part of the operation of section 19, but not completely, is used in the heading to section 19, not part of the Act but only some paid to interpretation, that one then says that really controls the meaning of it when the word is not used at all.

GUMMOW J:   I am not sure what is meant when it is said against you that it would control it because I think the idea is that section 3(6)(a) somehow changes the meaning of section 19(a).  I cannot see how it can at the moment because section 19(a) is talking about general maritime claims, et cetera; (6)(a) is not.

MR JACKSON:   Yes, your Honour.  I would simply adopt that if I may.  Could we, if driven to it, as it were, in relation to section 3(6), say one further thing and that is that if it were to be regarded as prima facie, having some effect in relation to some controlling - to use the term loosely - effect in relation to section 19, that in the context it should not be read literally because what we would submit is that it should be read as if section 3(6)(a) were saying in its application to general maritime claims, something along these lines, that where a proceeding on a maritime claim might have been commenced under sections 17 or 18 if the relevant person had been the owner or demise charterer at the time when the proceeding was commenced, raising really a hypothetical possibility saying, “If you could have brought the claim under sections 18 or 19, if the relevant person had been the owner or demise charterer, then you can bring it, in effect ,under section 19”.

KIRBY J:   There problem there is with the words in this case, “under a provision of this Act”.

MR JACKSON:   Yes, your Honour.

KIRBY J:   Unless you say it means, theoretically, if they came into our waters, and if you could have brought it under this Act then you have satisfied (a).

MR JACKSON:   May have used the “may” in the expression meaning “may”.  May have been commenced.  But, your Honour, it is not the better interpretation and we would accept that one should not really stray from the words of the Act unless driven to do so, and it would take a lot of driving, in

our submission, for an inaccurately or incompletely drafted heading to do it.  Your Honour, those are our submissions.

KIRBY J:   Could I just ask is there any academic discussion or discussion in any of the trade journals about The “Terza” and the later decision of Lord Donaldson?  Because it has been rather suggested to us by Mr Cowdroy that the standard in England is as stated in Lord Donaldson’s later opinion, and one would think carefully before adopting a different approach, if that is the approach of the English court’s practice adopted.

MR JACKSON:   We have really, with respect, waited with interest for our learned friends to produce something more than those two decisions.

KIRBY J:   There has been no analysis in the Lloyd’s cases? 

MR JACKSON:   We have found nothing usefully to give the Court in relation to it.  I am happy to give your Honours copies of discussions in what are the current texts and so on in relation to it, but we would submit that the position in the United Kingdom is a position which is fundamentally unsettled in the sense of saying,.....these two cases.

BRENNAN CJ:   Thank you, Mr Jackson.  Mr Cowdroy

MR COWDROY:   Your Honours, the only matter upon which the Court granted leave was on the question of whether the “Laemthong Pride” was a surrogate ship.  We take issue with my learned friend’s submissions in relation to the position of section 3(6), and we come back to that section as being definitive as to whether or not the “Laemthong Pride” was a surrogate ship to the “Nyanza”.  We submit that in answer ‑ ‑ ‑

GUMMOW J:   I am not sure what you are saying, Mr Cowdroy.  Special leave was granted to deal with the section 19 point.....the only one that.....the facts.  There is no question under section 20(4) - - -

MR COWDROY:   No, your Honour, but the question is whether the “Laemthong Pride” was a surrogate ship to the “Nyanza”.

BRENNAN CJ:   You are fastening on the particular words of the order granting special leave to appeal, is that right?

MR COWDROY:   Yes, your Honour.

BRENNAN CJ:   But you may fasten on the special words but the concept with which the Court was then concerned and with which it is now concerned is the operation of section 19.

MR COWDROY:   Your Honour, I follow that, and I want to develop that a little bit if I may by saying this:  the validity or otherwise of the appellant’s submissions, we submit, can be tested by the question of could the “Nyanza” have ever been arrested?  Perhaps I will rephrase that - could an action have been taken against the “Nyanza” by the respondent.

BRENNAN CJ:   Well, Mr Jackson says it could not.

MR COWDROY:   If it could not, your Honour, our simple submission is the first limb of section 3(6) was not satisfied because there was no ‑ ‑ ‑

BRENNAN CJ:   Mr Jackson accepts that.

MR COWDROY:   Your Honour, if that is accepted, the question is to suggest that the “Laemthong Pride” was a surrogate for the “Nyanza”.

BRENNAN CJ:   Forget surrogate, we are talking about section 19.

MR COWDROY:   Your Honour, in our respectful submission, the whole of the Act must be given a proper construction, and to ignore the provision of section 3(6) sits uncomfortably with the concept in section 19.

GUMMOW J:   It is not being ignored.

MR COWDROY:   Your Honour, if you take it into account ‑ ‑ ‑

GUMMOW J:   What I would be interested in hearing is how you say section 3(6) controls section 19, and how you would re‑express section 19 to accommodate what you say is the operation upon it of section 3(6).  What would the words mean in section 19?

MR COWDROY:   Can I answer that by putting it another way?

GUMMOW J:   It is a matter of text.

MR COWDROY:   If the contention of the respondent is correct section 19 is a very elaborate section if one does not have to worry about a right of action against the primary ship.  One could have simply said that a right of action will exist against a ship owned by a person against whom a maritime claim lies.  There would be no need to go through the verbage set out in section 19(a), which is predicated upon there being a first ship.  In other words, the machinery set out in section 19(a) would be quite unnecessary if the contention of the respondent is correct that you do not need to worry about a first ship to, as it were, to take proceedings in rem against a second ship.

BRENNAN CJ:   What is the reason for paragraph (a) in sections 17 and 18?

MR COWDROY:   To specify, to provide a nexus between the wrongdoer and the claim.

BRENNAN CJ:   Are those words needed for that purpose?

MR COWDROY:   Your Honour, we would submit they are, because it makes it quite clear that for an action in rem to be successful, there must be still in existence something which can effectively be arrested.

BRENNAN CJ:   Why is paragraph (a) needed in sections 17 or 18 but not in section 19?

MR COWDROY:   Our respectful submission is this:  it is not used in section 19 because before one gets to section 19 one has taken into consideration the question of what is the “some other ship” referred to in the opening words of section 19 in the second line where it says:

A proceeding on a general maritime claim concerning a ship may be commenced as an action in rem against some other ship -

the words, “some other ship”, can only, in our submission, be referable to the surrogate ship.  To identify the surrogate ship one goes to the words in section 3(6), and when section 3(6) is ‑ ‑ ‑

BRENNAN CJ:   But the words, “some other ship”, does not refer to surrogate ship.  There is no surrogate there.  Some other ship is the ship which is referred to in (b).

MR COWDROY:   Yes, it is, your Honour, but ‑ ‑ ‑

BRENNAN CJ:   If you want to keep going back to the definition of section 3(6) and say it has to be surrogate we can understand the argument, but if that is all you are saying, you are not advancing it very far.

MR COWDROY:   Your Honour, might I just simply conclude on that aspect by saying, in our respectful submission, and you do not - the term “surrogate” simply means “substitute”, the dictionary definition.  But the concept of having an action against one ship but then, as it were, deferring it to a second ship, or some other ship, is the concept of a surrogate ship, and that is, we submit, implicit in section 19.

KIRBY J:   The drafter could have said “the owner of a surrogate ship” or it could have been defined in some way, that the second ship was the surrogate ship, in brackets, “hereafter the surrogate ship”.  But the drafter held back from doing that, this is the problem:  put it in the heading, which is not part of the Act.

MR COWDROY:   Yes, your Honour.  But we submit that the interpretation we contend for is implicit also.  The meaning may be seen from section 20(4)(b) where it refers to:

the person has commenced a proceeding under section 19 against a surrogate ship - - -

GUMMOW J:   It would just have to say “under section 19”, would it not?

MR COWDROY:   To be consistent with my friend’s argument, yes.

GUMMOW J:   No, no, to be consistent with your argument.

MR COWDROY:   No, your Honour, we draw a different comfort from it.  The comfort we draw from the words in 20(4) is the express recognition that the proceeding under section 19 is against a surrogate ship.  One then asks, what is a surrogate ship?  You go back to section 3(6) and that is the only way section 19, in our submission, can be construed.

KIRBY J:   You say the mention against a surrogate ship, in the context of section 19, in section 20(4) indicates that that was what was intended and that is confirmed by the headings.

MR COWDROY:   Yes, your Honour.  It is an aid to construction which ‑ ‑ ‑

KIRBY J:   I have an impression that there is some recent dicta in this Court about the use of headings.  Do you know of that case?

MR COWDROY:   I am sorry, your Honour, I am not aware of that.

KIRBY J:   Are you suggesting, perhaps because of section 15AA, that it is appropriate now to ‑ ‑ ‑

MR COWDROY:   Yes, your Honour.  In our submissions we referred to 15AA, and the purposive approach of Parliament in Kingston v Keprose.

KIRBY J:   I see, it is Kingston v Keprose?

MR COWDROY:   Yes.  Your Honours may have already - I am not sure whether you do - the relevant extracts from the Law Reform Commission Report.  Could I hand those up?

BRENNAN CJ:   What pages are you speaking about?

MR COWDROY:   Your Honour, from pages 95 through to 105.

BRENNAN CJ:   I will see if we have them, first.

MR COWDROY:   That, specifically, your Honour, deals with the question of a nexus between the wrongdoing ship and the claim. 

BRENNAN CJ:   I think we do have those pages, thank you.

MR COWDROY:   Your Honour, could I just refer your Honours to the foot of page 94, where there was considerable discussion on the issue of the question of surrogate ship.  The author says:

As these arguments might suggest, arguing in terms of competing theories is confusing rather than helpful.  The fact that the scope of arrest is extended in one direction (surrogate ship arrest) is not of great significance in considering extension in a different way.  The issue is one of the need for and effectiveness of remedies.  The proposed Australian legislation should adopt the solution embodied in the overseas legislation.  Consistency with these models has considerable value.  The abandonment of a nexus requirement would tend to favour ship owners as against ship repairers, suppliers of necessaries, pilots or mortgagees, who ‘fortuitously’ own a ship.

KIRBY J:   But that seems to have run into a bit of a problem since, in the decisions of Hong Kong and Singapore that we have been taken to.

MR COWDROY:   Your Honour, the decisions of Hong Kong and Singapore all predated The “Evpo Agnic”, which is 1988, and it is significant ‑ ‑ ‑

KIRBY J:   It is not a very satisfactory decision, though, is it, a single decision of Lord Justice Donaldson, and it does not refer to the earlier case, he just repeats his own opinion.  What is important to know, it seems to me, is this a statement of the current practice in ‑ ‑ ‑

MR COWDROY:   Your Honour, bearing in mind that an application for leave to appeal to the House of Lords was not allowed, we would submit that it is of significance.

TOOHEY J:   Mr Cowdroy, you perhaps should be aware of section 13(3) of the Acts Interpretation Act, which reads:

no marginal note, footnote or endnote to an Act, and no heading to a section of an Act, shall be taken to be part of the Act.

I do not know whether there is anything else in the provisions of the Act that might entitle you to rely upon the heading, but certainly in terms of that subsection you could not do so.

MR COWDROY:   Yes, thank you, your Honour.  We are very conscious of that, your Honour, and also the section 15AB, which does permit extrinsic material to be brought in, and that is where the Law Reform Commission Report may be of assistance. 

GUMMOW J:   Is there anything in 15AB that brings back in headnotes - sidenotes, rather?

MR COWDROY:   Section 15AB(1)(b):

to determine the meaning of the provision, when:

(i)       the provision is ambiguous or obscure; or

(ii)      the ordinary meaning conveyed by the text of the provision -

et cetera.  It may be of some assistance.

GUMMOW J:   Is it or is it not?  Does 15AB bring back in that which is excluded by 13(3)?

MR COWDROY:   Yes.  15AB(2):

Without limiting the generality of subsection (1), the material may be considered in accordance with that subsection in the interpretation of a provision of an Act includes:

(a)  All matters not forming part of the Act that are set out in the document containing the text of the Act -

GUMMOW J:   So that the answer is 15AB(2)(a).

MR COWDROY:   15AB(2)(a) does assist, your Honour.

KIRBY J:   I am sure this has been discussed at this Court or one of the other superior courts in Australia very recently.  However, do not worry about it.

MR COWDROY:   Your Honour, we will look to see if we can find something on that matter.  It is of significance that the Law Reform Commission Report recognised there needed to be the continuing nexus between the wrongdoing ship and the surrogate ship.  My friend referred the Court to “Span Terza” and the judgment of Sir David Cairns.  Might I turn to that for just one moment.  Your Honour, might I point out that on page 227 of the report which Mr Jackson took your Honours to, it appears that Sir David Cairns came to his view contrary to the view submitted by the appellant by concentrating on the last few lines of article 3, subparagraph (4), when he concentrated on the words which appear in the third paragraph on page 227:

The provisions of this paragraph shall apply to any case in which a person other than the registered owner of a ship is liable in respect of a maritime claim relating to that ship.

And he held:

words which seem to be far wider than s 3(4), because they do not include the limitation of any such person as the charterer.

Your Honours, we submit that the reasoning of Sir David Cairns, when one comes to analyse it, is quite - to say simplistic is probably unkind, but certainly the examination which he made of the interpretation of that section one could scarcely say was an in-depth examination.

KIRBY J:   It is a bit unkind seeing as he had a case before him at 11.30 in the morning and had to give an immediate decision.

MR COWDROY:   Your Honour, it is something unusual ‑ ‑ ‑

KIRBY J:   Basically, he said charterer means charterer.

MR COWDROY:   Yes.

KIRBY J:   It is not an unusual thing to say.

MR COWDROY:   On its face, your Honour, we say that was an error.  Your Honour, the other matter we point to is this, that it must be remembered that the words in sections 17, 18 and 19 of the Australian Act are derived from the 1956 statute in England, which is set out in the material under “Legislation” in the folder.

GUMMOW J:   It depends what you mean by “derived”, Mr Cowdroy.

MR COWDROY:   Your Honour, the words, the precise phrase is used.

GUMMOW J:   The structure of the sections is quite different.  We have been around this yesterday.

MR COWDROY:   But the phrase is the same.

GUMMOW J:   Of course there is an influence, perhaps, but “derive” is a very strong word.

MR COWDROY:   Your Honour, perhaps, should I say, they appear to be based upon or drawn from the same words.  And that appears in the Law Reform Commission Report, and also the 1981 legislation.  Your Honour, in our submission, in our final submission, the Act as a whole must be read to concentrate on section 19, without giving it the meaning which we submit is implicit from section 3(6), is to, in effect, misconstrue section 19, and it would provide a remedy which was unknown, as I have stated yesterday, in English law or in Australian law.

KIRBY J:   But known in Singapore and known in Hong Kong and known to Lord Cairns. 

MR COWDROY:   Yes.  But when one looks at those judgments, your Honour, they are judgments ‑ ‑ ‑

KIRBY J:   I do not want to go over it again.

MR COWDROY:   Yes.  But they become apparent when one sees them.  Your Honours, perhaps there is one last matter, and that is this.  My learned friend referred to the fact that there are in effect two classes of surrogate ship, on the respondent’s interpretation:  there are those in section 3(6) and

there are those in section 19.  We submit that there is no foundation for that whatsoever.  Your Honours, the last matter is that we have prepared submissions in reply; they are in writing and they are contained in the bundle that was handed up yesterday.

The only last thing I wish to say is in the response, which I handed up this morning, to the questions that arose yesterday:  a charter, even a voyage charter, is not a charter of the ship, as the words used in section 19(a).  A voyage charter is of the cargo spaces in the ship; it is not of the ship.  The words “of the ship” again are consistent with possession and control being vested in some other person, that is, in the demise charterer or, in this case, in the disponent owner.  So, the words in section 19(a) are critical when it speaks of “the ship”.  It does not say “of part of the ship” or “of the ship, or part of it”, it simply says of the whole of the ship, and that is consistent with the appellant’s contentions that the charter in question, in section 19(a), must be one that provides control or possession of the whole of a ship, and that can only be given by a demise charter.  If the Court pleases.

BRENNAN CJ:   Thank you, Mr Cowdroy.  The Court will consider its decision in this matter.

AT 11.46 AM THE MATTER WAS ADJOURNED