Metall Und Rohstoff Shipping and Holdings BV v The Owners of Bunkers on Board the Ship MV Genco Leader

[2005] HCATrans 610

[2005] HCATrans 610

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S375 of 2005

B e t w e e n -

METALL UND ROHSTOFF SHIPPING AND HOLDINGS B.V.

Applicant

and

THE OWNERS OF BUNKERS ON BOARD THE SHIP MV “GENCO LEADER”

Respondent

Summons

GLEESON CJ

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON MONDAY, 15 AUGUST 2005, AT 3.32 PM

Copyright in the High Court of Australia

MR A.W. STREET, SC:   May it please the Court, I appear with my learned friend, MR N.J. OWENS, for the applicant.  (instructed by Hicksons)

MR N.C. HUTLEY, SC:   I appear for the respondent, if your Honour pleases.  (instructed by Withnell Hetherington)

HIS HONOUR:   When is the ship due to leave?

MR STREET:   At 12 o’clock tomorrow, your Honour.

HIS HONOUR:   All right.  You need a decision this evening.

MR STREET:   Yes, your Honour.

HIS HONOUR:   You can have half an hour, then Mr Hutley can have half an hour and then you can five minutes in reply and then I will give you a decision.

MR HUTLEY:   If the Court pleases.

HIS HONOUR:   Yes, Mr Street.

MR STREET:   Your Honour, I move on a summons which is dated 15 August.  There is an affidavit in support of Derek Anthony Luxford of 15 August.

HIS HONOUR:   Is there any objection to that, Mr Hutley?

MR HUTLEY:   No, your Honour.

HIS HONOUR:   I have read that.

MR STREET:   Your Honour, there are two further documents I would seek to hand up, if I may.  There is a copy of a judgment which has not yet been certified by the Court and which the Court has expressly requested that we identify for your Honour the Chief Justice and it has not been settled.

HIS HONOUR:   Yes, I have read that, thank you.  There is an affidavit of Mr Hetherington’s also of 15 August.

MR HUTLEY:   I have read that.

HIS HONOUR:   Do you have any objection to that?

MR STREET:   Your Honour, only on the grounds of relevance in relation to paragraphs 8 to 10.

HIS HONOUR:   Do you have any objection on the ground of relevance?

MR STREET:   Paragraphs 8 and 9 argumentative, 10 irrelevant.

HIS HONOUR:   Paragraphs 8 and 9 and 10 on relevance only?

MR HUTLEY:   Yes, your Honour.

HIS HONOUR:   I will allow that evidence and I have read that affidavit.  Yes, Mr Street.

MR STREET: Could I also hand up to your Honour one other matter which is a direction by the Chief Justice of the Federal Court in relation to the application that was referred to the Full Court. Could I hand up in that regard, your Honour, the relevant section under which it was done which was section 20(1A) of the Federal Court of Australia Act.  The grounds for that were that there was sufficient importance to warrant the matter being referred to the Full Court.

Your Honour, can I deal then with the issue that we seek to raise. As your Honour appreciates, the nature of the case in this one is one concerning jurisdiction under section 17 ‑ ‑ ‑

HIS HONOUR:   In substance this looks like an application for a stay.

MR STREET:   It is not just a stay, your Honour, because in essence the Full Court refused to grant a stay and have actually set aside the arrest warrant.  We asked for an arrest warrant from ‑ ‑ ‑

HIS HONOUR:   You do not yet have special leave to appeal to this Court?

MR STREET:   No, we have not, your Honour.

HIS HONOUR:   So there is no proceeding on foot in this Court?

MR STREET:   That is so, your Honour.

HIS HONOUR:   What you are seeking, apart from an order expediting an application for special leave, is some kind of order that will, in effect, hold the position much in the nature of a stay?

MR STREET:   Yes, your Honour, equivalent to that, otherwise, the appellate rights would be rendered nugatory.  There is a provision under Part 8 rule 7 ‑ ‑ ‑

HIS HONOUR:   When you say appellate rights, there is no appeal on foot?

MR STREET:   No, your Honour, but the ability to pursue.

HIS HONOUR:   Yes.  The relevant principles about stays of proceeding and bail applications and the like in this Court I take to be those stated by Justice McHugh in – it is not in the list of authorities.  You will see a reference to it in some bail cases such as Frugtniet v The Queen 71 ALJR 311 - under the heading, usually, “Exceptional circumstances to be shown”.

MR STREET:   Yes, your Honour.  In that regard, unless arrest warrant be issued in respect of the vessel, the vessel will sail and the whole purpose of the proceedings will be rendered nugatory.

HIS HONOUR:   This is what I took to be the relevance of paragraphs 8, 9 and 10 of Mr Hetherington’s affidavit.

MR STREET:   Your Honour, to that extent, Mr Hetherington was putting forward a proposition if the bunkers were to be removed.  There is an alternative which is that he can provide security.  There is no proffering of security and there is none proffered here before this Court, so that to the extent relevant we say that is no more than argumentative.  The arrest warrant ought to issue, in our respectful submission.

The purpose of the arrest warrant is, your Honour would appreciate…..within the admiralty jurisdiction. Under section 29 of the Admiralty Act, proceedings can be commenced for the purpose of obtaining security. So the very purpose of proceedings within the admiralty jurisdiction which, as your Honour appreciates, under section 5 is in respect of a general maritime cause, wherever arising, includes the provision of security. So, we say the nature of these proceedings and part of the reasoning of the Full Federal Court was wrong in its approach to section 17 to the extent it involves a process for attachment.

In relation to the construction of section 17, can I just come to the heart of that. To that extent, your Honour, we maintain that the opening words of section 17 up to “relevant person” are concerned with the characterisation that the general maritime claim must have and that is, it must be one which is a general maritime claim within section 4(3)(f). In this case that is admitted. There is no issue.

HIS HONOUR:   Can you take me through it - I have a copy of it in front of me – and relate it to the facts of this case.

MR STREET:   To that extent, your Honour, it is one where up to – the relevant person is the person who would be liable.  We say the opening ‑ ‑ ‑

HIS HONOUR:   Before you get to that, this is a general maritime claim concerning property.

MR STREET:   It is, your Honour.

HIS HONOUR:   That being the bunkers, is that right?

MR STREET:   It is one concerning bunkers, but to the extent relevant, your Honour, we say the first criteria ‑ ‑ ‑

HIS HONOUR:   Just a moment.  Is there a problem?

MR HUTLEY:   I think it is concerning a ship, your Honour, not concerning property.

MR STREET:   Yes.

HIS HONOUR: Mr Street, just take me through the words of section 17 and relate them to the facts of this case.

MR STREET:   Could I hand up to your Honour a document that does that.

HIS HONOUR:   Thank you.

MR STREET:   The general maritime claim which we have in dispute was one which concerned a ship, that was the MV Tolmi. We say that those words up to “a relevant person” who would be liable are all ones of characterisation, that is, that the general maritime claim must have a nexus to a ship, which it does have, and it is a person who would be liable is the relevant person. There is no issue there. What we then say is that the words required by subparagraphs (a) and (b) are ones of jurisdictional nexus that are, in essence, subject to property that would be the subject of admiralty and maritime jurisdiction under section 17 of the Admiralty Act, so that the limitation that we would say applies, and the only limitation in respect of property, is that it is property of a kind that would satisfy section 13, but that it is not to be read down as being the same property.

HIS HONOUR:   What does section 13 say?

MR STREET: Section 13 identifies that the jurisdiction conferred by this Act is one confined by and to the extent of section 76 of the Constitution.

HIS HONOUR:   What effect does that have about the meaning of the word “property”?

MR STREET:   It means, your Honour, that in relation to property, for example, if it were said that it was a house or cows in a field in some paddock, they plainly do not have a necessary nexus to fall within the subject matter of admiralty.

HIS HONOUR:   What if it was another ship?

MR STREET: It would be, your Honour, and that is exactly the type of – another ship – pausing there, your Honour, no, because ships are specifically dealt with and there you must - to the extent that there is a power to arrest ships under section 17, it must be a coincidence of identity and we accept that but we say that the section works differently between ship and property. So that to the extent that there is a reference to “property”, what we say is that there is no reason to read in words of limitation such as “the” or “same” or “that” in work done by paragraphs (a) and (b). We say all that paragraphs (a) and (b) are doing ‑ ‑ ‑

HIS HONOUR:   It all depends on whether or not in paragraph (a) the expression “the ship or property” means the ship or the property.

MR STREET:   Yes, your Honour, and we say no reason to read it down in that way.  We say being a jurisdictional provision, consistent with Shin Kobe a fulsome reading of the jurisdictional power conferred is one where Parliament said what it meant and meant what it said.  It did not insert the word “the” or “same” or “that” and an approach to construction such as that propounded by the applicant is consistent with the very purpose of this remedial legislation.

The applicant submits that on the face of the legislation one falls within the criteria identified and we say that that criteria in paragraphs (a) and (b) is nothing more than an adequate nexus and the jurisdictional nexus it identifies is one in the present case which the applicant satisfies.  So that to the extent relevant, on the face of it, there would be jurisdiction. 

Your Honour, there are passages in the Law Reform Commission Report that identify some reference to considering surrogate arrest relating to cargo but no development of that concept and no dealing with that issue in a way which addresses the issue that is here presented by the applicant. There is another reference in the Law Reform Commission Report which we have given a reference to in relation to the meaning of “property” and the Law Reform Commission expressly decided to leave it at large so that it would have a wide potential application and scope. We say it is consistent with that intention that the property was not in some way narrowly defined and consistent, when one looks at section 17, that the Court should give it a broad liberal construction as a jurisdictional provision.

Your Honour, there are two cases that we referred to that provide some assistance for that.  There was a Canadian case that was referred to, in terms of Scandia, in which – it is by way of contrast that it provides some utility.  If I could hand up a copy of it, your Honour, Scandia Shipping v The “Alma Veracruz”.

HIS HONOUR:   Thank you.

MR STREET:   I apologise, your Honour, it is not an authorised version but that is the only version that my learned junior has been able to obtain.  To that extent, the critical part in that is this – if I can take your Honour to the second page.  In that case that court was dealing with an Act which had very different language.  Your Honour will see on the second page, section 43(2), a reference to:

the jurisdiction conferred on the Court by section 22 may be exercised in rem against the ship, aircraft or other property –

In other words, that is the subject of the action.  There was an express limitation in the way in which that section was to work.  We have no such limitation of that kind.  There is another reference to which I would refer your Honour, if I may, it is a decision called The Beldis in LLLR in which it identifies that it was admiralty practice where one could actually seize property of the defendant within a maritime suit irrespective of whether that property had been the subject of the particular maritime claim.  The relevant passages, if I can take your Honour very briefly to them are, first, if I may – that is in Anglo‑Soviet Shipping v The Beldis (1936) 53 LLLR 225 at 226 in the second column at about point 5 of the way down the page in the second column.

HIS HONOUR:   Which page was that?

MR STREET:   At page 266.

HIS HONOUR:   Thank you.

MR STREET:   Your Honour will see that in the second column at about point 6 of the way down the page:

As regards the arrest of property, there can, I think, be no doubt that the old Admiralty Court asserted the right to found jurisdiction by arrest of any property of the defendant within the jurisdiction of the Admiral.

Just pausing there, your Honour.  In this case the court went on to say that as a matter of construction of the statute in this case, that criteria was no longer applicable.  That appears at page 268 in the first column at about point 3 of the way down the page.  There is a reference to the 1840 Acts of Admiralty and your Honour will see a sentence starting:

In my opinion, the only safe rule is to assume that Parliament intended that the jurisdiction and practice then existing, but as extended and improved by the specific enactments of the statute, should thenceforward be the jurisdiction and practice of the Admiralty Court.

Just pausing, your Honour, that is nothing more than saying it is a question of construction in the present case.  The applicant submits that the Court has in fact had conferred on it, in full, some jurisdiction through the Admiralty Act in the way it contends.  At page 271 in this decision of The Beldis in the first column at page 271 there are just two further passages I take your Honour to.  The first, at page 271 in the first column about point 4 of the way down the page your Honour will see a reference to the proposition, just after the reference to the Dictator:

In my opinion, arrest of property unconnected with the claim was merely procedural, and the maxim –

applied.  There is one final passage we sought to refer to your Honour which was the reference to Dr Lushington’s decision in the Clara at page 272 and the use of the term “the” and that that use of the term “the” was there intended to identify a need for consistency between the property and the claim in that case.  There is no such language that has been used in this case.

Can I come to the question of error by the Full Court, your Honour. The Full Court has taken into account the Arrest Convention 1952. Can I just hand up that Arrest Convention to your Honour. That Arrest Convention, materially - and your Honour does not need to go through it in any detail – had nothing to say about the arrest of property. It does not touch property at all. The Full Court in its draft reasons appears to incorporate as one of the reasons for reading down section 17 a reference to the 1952 Arrest Convention because that Convention did not concern in any way arrest of property. It, in my respectful submission, provides no assistance whatsoever to the construction of section 17.

The same point we make in relation to the Eschersheim, which my learned friend has referred to in his summary of argument that I take it that your Honour has had an opportunity to look at.  There Lord Diplock was dealing with the English 1956 Act which again was drafted on the 1952 Arrest Convention.  It used very different language.  It referred to “that ship”.  It did not touch, in the English Act, the question of property at all. 

So, in our respectful submission, when one comes to the approach adopted by the Full Court, firstly, they failed to apply Shin Kobe in reading words of limitation in a construction application of section 17. Secondly, they sought to give effect to the 1952 Arrest Convention as in some way supporting the construction whereas in that Convention it does not touch the arrest of property at all and the legislature in this regard has travelled beyond what was in the 1952 Arrest Convention and full effect should be given to this jurisdictional provision.

The third matter taken into account by the Full Court with some notion of admiralty attachment, your Honour, in our respectful submission, that, as a generalisation, is not something that warrants reading down the jurisdiction that has been conferred and flies in the face of section 29. The jurisdiction was intended, pursuant to section 29, to provide a means of obtaining security for proceedings of the kind here where there is an arbitration taking place in London.

Your Honour, there is a reference by the Full Court to the absence of other countries, one way or the other, about provisions they may have but that, in our respectful submission, is of no assistance in construing and giving effect to the Commonwealth statute.  Your Honour, the applicant respectfully submits that it has, in the present case, a specifically significant argument that has a sufficient prospect of success and meets the exceptional circumstances criteria where but for an arrest warrant issuing the whole purpose of the proceedings will be lost and the utility of any special leave application would be rendered nugatory unless such an arrest warrant were issued.

Your Honour, so far as the procedure is concerned, we seek under the summons – and I had an error in the summons that was drafted.  It refers to the marshal of the Federal Court.  It should be to the Registrar of the High Court and that would be the warrant that we would seek.  We have such a draft warrant in Court, if your Honour was proposing to make the orders sought.

So far as importance is concerned, we respectfully submit that it follows from the way in which the matter was dealt with before the Full Federal Court and because of the jurisdictional issue that has been raised that this is an appropriate case in which there are sufficient prospects to warrant entertaining the matter and granting a stay.

HIS HONOUR:   In the event that you were unsuccessful in this application for what is, in substance, a stay then I take it the corollary of your argument is that there would be no occasion for ordering an expedited hearing of the special leave application?

MR STREET:   No, your Honour, there would not be because the special leave application would be entirely futile.

HIS HONOUR:   Yes.

MR STREET:   That is part of the reason why the applicant has moved with such swiftness.  Could I just say one other thing before your Honour departs from this?  We have referred to another authority on the list of authorities your Honour would have seen called the Cape Moreton.  Your Honour will have seen in that case the Full Federal Court adopted a very narrow construction, again, of the Admiralty Act in relation to the meaning of “owner” as not including registered owner.  I am not sure if your Honour had the opportunity of reading it at any length, but in essence, the Full Federal Court there, in our respectful submission, again failed to follow in applying Shin Kobe Maru.

We say there is a real issue here in respect of the construction of this important piece of legislation and its utility on an international level in respect of obtaining security is plainly something that the legislature intended through section 29.

HIS HONOUR:   Can I ask you this question about the construction of section 17? As I understand the argument against you, it is that the words “the ship or property” in paragraph (a) and the words “the ship or property”
in paragraph (b) refer back to the ship or property referred to in the first line of section 17 as though it said “such ship or property”. Is that the argument?

MR STREET:   That is the argument against me, your Honour.

HIS HONOUR:   You accept, as I understand, the correctness of that argument insofar as it applies to ships?

MR STREET:   For two reasons.  One, your Honour, the use of the definite article and, secondly, because of the specific provision found in sections 18 and 19 extending and dealing with not property but surrogate ship arrest.

HIS HONOUR:   What I wanted to ask you was this.  What would be the legislative policy behind giving the provision one operation in relation to ships and a different operation in relation to property?

MR STREET:   Your Honour, to the extent that one is looking for a policy in that regard it would be one which the absence of a definition of property suggests that it was intended to give the jurisdiction wide scope.  Consistent with that wide scope there is no reason to read in, we would respectfully submit, words that Parliament did not use, so that the policy would be one of enhancing the jurisdiction.  In section 5 where it refers to general “maritime claims, wherever arising” it plainly envisaged that claims of the present kind might fall within that jurisdiction.

Section 4(3)(f) dealt with the very type of subject matter in respect of a London arbitration as arises here.  In our respectful submission, it would be consistent with the underlying policy in conferring jurisdiction for a broad liberal approach to be adopted in respect of that jurisdictional provision and consistent with the words actually used we respectfully submit the Court should give effect to the words used.  If the Court pleases.

HIS HONOUR:   Thank you, Mr Street.  Yes, Mr Hutley.

MR HUTLEY:   May it please, your Honour. In our respectful submission, the Full Court is correct and clearly correct. If I could take your Honour to the document handed up by my learned friend entitled “Applicant’s construction of section 17”.

HIS HONOUR:   Just a second, Mr Hutley.

MR HUTLEY:   It is the one‑page document, your Honour.  Your Honour will see that the applicants seize upon a maritime claim concerning a ship being the relevant claim for the purpose of the introductory words.  They then identify for satisfying subclause (a) “being bunkers on that ship” being bunkers owned by the respondent at the time of…..the cause of action.  So they say are you satisfied.  They then say (b) is satisfied because at the time when the proceedings are commenced the bunkers were owned by the respondent.

HIS HONOUR:   Presumably exactly the same argument would apply if in paragraph (b) instead the word “bunkers on the MV Genco Leader” you inserted the words “grain on the MV Genco Leader”?

MR HUTLEY:   Quite.  Or, your Honour, “grain” on some third ship somewhere else in the world.  Then there is a third thing to be satisfied - the proceedings on the claim may be commenced as an action in rem against the ship or property.  That is, as we understand it, a different ship or property, possibly, to any in (a) or (b).

So, in other words, my learned friend’s case is that this case could be, if you have a right to a maritime claim in respect of a ship and you coincidentally own anywhere in the world on any vessel property…..of that cause of action - and let it be assumed that there is some maritime limitation implicit in that – and as long as at the time you commenced the suit here somewhere in the world you owned property with the similar limitation “anywhere else in the world”, then proceedings can be claimed against some other property and presumably that could be property which may not have to exist at the time of the commencement of the suit because that is different property in the last words.

Your Honour, simply put, the Full Court looked at these words and said there is no question of reading down or reading out – “the” was, as a matter of grammar, applied to the ship or property.  You did not have to, in effect, and it would be ‑ ‑ ‑

HIS HONOUR:   Well, “the ship or property earlier referred to”.

MR HUTLEY:   Quite.

HIS HONOUR:   Or “that ship or property”?

MR HUTLEY:   Quite.  But the important thing is that the definite article applied equally to the ship and the property.  My learned friends really want to read it “the ship or any property”.

HIS HONOUR:   Well, “the ship or some property”.

MR HUTLEY:   Or, yes.  That equally requires doing damage to the language, in fact, much more damage to the language than that which was the conclusion of the Full Court.  That was a short point, essentially.

HIS HONOUR:   Yes.  On the principles to be applied in dealing with an application like this, Mr Street says that an order of the kind he seeks is necessary to preserve the subject matter of the litigation.

MR HUTLEY:   I understand that, your Honour.

HIS HONOUR:   From one point of view, that treats the subject matter of the litigation as the claim to use the bunkers as security for the dispute that is being arbitrated in London.

MR HUTLEY:   Yes, your Honour.

HIS HONOUR:   On the other hand, treating the bunkers as such security is in a commercial context which is explained by Mr Hetherington’s affidavit and I am just interested in the relevance of that wider context to an application of this kind.

MR HUTLEY:   Yes, your Honour.  There are two points of relevance.  Firstly, in essence, whether one calls it a stay or an application for interlocutory injunction or something akin to that really does not matter.  At the end of the day, having regard to the form of the orders made by the Full Court in the circumstances, my learned friends seek this Court to effectively restrain dealing with those bunkers.

Now, an issue might arise as to whether this Court has power or jurisdiction in the light of the new Admiralty Act to issue on an interlocutory basis – order a writ of arrest to issue.  I will not stay to debate that for the moment.  Certainly, the Court could frame an order of sufficient width to effectuate the same result under the Rules of the Court but that would be attendant in all circumstances, in our respectful submission, by an undertaking as to damages secured in the case of a company which, on the evidence, has no place of business within Australia such that the sorts of difficulties which Mr Hetherington adverts to, which could be productive of expense, will not be wasted in the event that this Court ultimately does not grant the special leave application and if the special leave application were granted ultimately were to dismiss the appeal.

True it is that there is a possibility of security being arranged between the parties, but your Honour will see in the last paragraph of Mr Hetherington’s affidavit that attempts were entered into to achieve consensus and they failed.  In a case like this that is apt to occur because, for example, questions of valuation of the subject matter of the writ in rem and what is adequate replacement of that matter, and whilst those things could be overcome in time, the practicality is is that one has a vessel which is due to leave Western Australia, Kwinana, tomorrow, and any delay in its leaving will be expensive, absent a secured undertaking to my client – to my client because ‑ ‑ ‑

HIS HONOUR:   Is there any evidence to suggest that the financial position of your client is such that in the event that Mr Street’s clients are successful in the arbitration in London, in the absence of security of this kind, they will not be able to recover the amount of their claim?

MR HUTLEY:   None that I am aware of.  No, your Honour, there is no such evidence.  None has been proffered by my learned friend and I am not aware of any which was proffered before the Full Court on the hearing of this matter.

HIS HONOUR:   There is nothing in the nature of an undertaking for damages floating around?

MR HUTLEY:   No.  I raised that with my learned friend and as I understand it, none will be forthcoming.  Your Honour, in essence, what is being sought is an interlocutory injunction, whether one calls it done by an order for the issue of a writ or claims it in a different fashion.  That should be attended by an undertaking as to damage and it should be secured having regard to the fact that the applicant is obviously a foreign company.  We submit that that is fatal ‑ ‑ ‑

HIS HONOUR:   Well, both parties are foreign companies.

MR HUTLEY:   Quite.  Yes, your Honour.  That, we submit, would be fatal to any injunction or order as sought by my learned friend but, in any event, we also submit that the evidence of Mr Hetherington indicates the circumstances are such that unless the Court were persuaded that the argument of my learned friend had real prospects of success this order would be apt to cause damage to my client which, absent an undertaking for damages, would be essential and secured, would be irrecoverable and my client will suffer attendant harm.  Your Honour, those are our submissions.

HIS HONOUR:   Thank you, Mr Hutley.  Yes, Mr Street.

MR STREET:   Your Honour, if I could just deal with the last matter which was in relation to the proposition of damage.  In that regard, your Honour, it is perfectly clear from the Admiralty Act that security can be provided by the respondent.  No proffering of security has been advanced.  To the extent that there is an exposure to some potential damage in that regard it is perfectly open to them to seek to provide security.

There is no open correspondence that has been provided.  There is no basis upon which your Honour could come to a view that there was any proffering of security that has been unreasonably rejected or any proffering of security at all.  In that regard it is open to my learned friend, if the matter is the subject of a warrant for arrest, to proffer such security.  So, in our respectful submission, there is no substance in the assertion of any damage.

To the extent that my learned friend seeks to equate it with an interlocutory injunction - these are admiralty proceedings in respect of which the arrest of property within the admiralty jurisdiction is the very purpose of the Act, outside that, or the Mareva injunction, and in respect of which, in our submission, it is appropriate that the Court is able to exercise it in exactly the same way it would if it was advanced before the Full Court.

To the extent relevant there is an exposure under section 34, so the Act – it reflects a balancing exercise in that regard where a cause of action is improperly brought for arrest, so that there is no substance in the complaint advanced in respect of damages.  The statute has balanced that exercise in the cause of action identified under section 34 where there is some improper arrest.

Your Honour, so far as any undertaking is concerned, the plaintiff is in a position where it would undertake to pursue the proceedings with all reasonable dispatch and would, to the extent necessary, proffer an undertaking to provide security as to costs if the warrant be granted in an amount of 15,000, if that were a necessary criteria imposed by the Court.  So far as the undertaking is concerned, or damages, the plaintiff does proffer an undertaking to the marshal, that is, by the solicitor personally, to meet the cost of compliance with the order of the Court if it is made.  To that extent, if there are costs incurred by the marshal in meeting that they are the subject of a fulsome undertaking by a person within the jurisdiction.  Can I come back to the question of no commercial interests?

HIS HONOUR:   Yes, but that is the costs of the marshal in effecting the arrest?

MR STREET:   Yes, your Honour, and to the extent relevant I am instructed to proffer an undertaking on behalf of my client to provide security for costs in the sum of 15,000 in relation to these proceedings.

Your Honour, can I then come to the question of the commercial nature of the proceedings. It is clear that the nature of this jurisdiction was one which was intended through section 29 to facilitate such provision of security and there is a mechanism through the ability to proffer security and for the Court to determine whether what is proffered is adequate an amount to deal with any dispute, so that there is no basis from a commercial viewpoint not to issue the appropriate warrant in the present case.

Your Honour, can I then come back to the question of construction? In my respectful submission, there is no need to insert the word “any” or “same” or “in relation to section 17” nor does the plaintiff or applicant seek to do so. On the contrary, the substance of the argument that my learned friend has been advancing which he accepted, in my respectful submission, is to insert words “earlier referred to” or “that”. They are reading in words of limitation which is exactly what Shin Kobe said the Court should not do.  If the Court pleases.

HIS HONOUR:   Both parties to these proceedings are foreign corporations.  The commercial context in which the proceedings arise is explained in the affidavits of Derek Anthony Luxford of 15 August 2005 and Stuart William Hetherington of 15 August 2005.

In brief, the applicant, who has filed an application for special leave to appeal to this Court against a decision of the Full Court of the Federal Court of Australia given on Friday, 12 August 2005, seeks the arrest of the bunkers on board the vessel Genco Leader which is presently at the port of Kwinana in Western Australia and proposes to leave that port tomorrow.

The objective of the proposed arrest of the bunkers is to provide the applicant with security in respect of a claim against the respondent relating to another vessel that is presently the subject of arbitration proceedings in London.  There is no suggestion in the evidence that if the applicant is ultimately successful in those arbitration proceedings then unless it has the security it seeks here over the bunkers on board the Genco Leader it is at risk of being unable to recover the fruits of those proceedings on account of the financial position of the respondent.

The potential harm that might be suffered by the respondent in consequence of an arrest which is outlined in paragraphs 8, 9 and 10 of Mr Hetherington’s affidavit is not the subject of any undertaking as to damages proffered on behalf of the applicant.  Various other undertakings in relation to costs have been proffered.

The general principles governing the appropriate response to an application for what might be described as interlocutory relief pending the hearing of an application for special leave to appeal to this Court are well established and are not in dispute. 

Mr Street, SC for the applicant rightly emphasises the importance of the consideration that the applicant seeks, in the sense that I have earlier explained, to maintain the subject matter of the proceedings pending the outcome of the application for special leave. Mr Hutley, SC for his part emphasises the significance of the wider commercial context to which I have briefly referred. Both counsel, however, devoted the substantial part of their submissions to the question of construction of section 17 of the Admiralty Act 1988 (Cth) which is at issue and which was resolved adversely to the applicant by the Full Court of the Federal Court.

In view of the extreme urgency with which these proceedings have been brought on and the limited opportunity which the parties have had to develop their arguments on the question of construction, it would be inappropriate of me to express any concluded view on that issue. At the same time, I should indicate that the tentative opinion that I have formed is that the construction placed upon section 17 of the Admiralty Act by the Full Court of the Federal Court accords with the natural meaning of the words of that section.

In those circumstances, I do not think that there are sufficient prospects of success of an application for special leave to appeal to bring about the conclusion, in the light of the earlier considerations I have mentioned, that this is a case in which the Court should intervene, even though its appellate jurisdiction has not yet been enlivened by the grant of an order for special leave to appeal.  Mr Street has indicated that if I were of such a mind there would be no purpose in his pursuing his application for an expedited hearing of the application for special leave to appeal.

The order that I will make then is that the application is dismissed with costs.  I will adjourn.

AT 4.19 PM THE MATTER WAS CONCLUDED