Nautilus Australia Ltd v the Ship "Rossel Current" - [1999] QSC 39

IN THE SUPREME COURT
OF QUEENSLAND
IN ADMIRALTY No. 6585 of 1998
Brisbane
Before Mr Justice Ambrose
[Nautilus Australia Ltd v The Ship “Rossel Current”]
BETWEEN:

NAUTILUS AUSTRALIA LIMITED
(A.C.N. 055747941) Plaintiff/Respondent

AGAINST:

THE SHIP “ROSSEL CURRENT”
Defendant/Applicant

REASONS FOR JUDGMENT - B.W. AMBROSE J.
Judgment delivered 9 March 1999

This is an application by Red Coral Maritime Corporation Limited (“Red Coral”) which appears conditionally, as the owner of the ship “Rossel Current” to strike out the Writ of Summons Issued by the plaintiff (“Nautilus”) on 17 July 1998 on the ground that it is defective for non-compliance with the requirements of the Admiralty Act 1988 (Cth) and the Rules thereunder and to strike out an arrest warrant also issued on 17 July 1998 which led to the applicant providing security for payment of moneys to which Nautilus might be adjudged entitled so that its ship “Rossel Current” might be discharged from arrest and continue on with its maritime operations.
Before considering the matters canvassed at some length in a large amount of affidavit material as well as oral evidence, it is convenient to state briefly the relevant facts emerging from the material.
Prior to May 1998 Slobodna Plovidba Sibenik (“S.P.S.”) a company incorporated in Liberia, being the owner of a number of vessels including “Rossel Current” had given to Abbotswood Shipping Corporation (also incorporated in Liberia) (“Abbotswood”) a mortgage to secure payment of sums advanced at various dates. It is unnecessary to analyze in detail the rather complicated series of mortgages that appear to have been given and varied between 1992 and 1996.
Nautilus claims that in the years 1997 and 1998 on occasions when “Rossel Current”, “Humboldt Current” and “Zirje” visited Australia in the course of their maritime operations, it provided materials to each of those ships under circumstances which made S.P.S. liable to it for their cost.
On 17 July 1998, Nautilus issued out of this Court a writ against the “Rossel Current” for moneys in respect of the supply and delivery of goods to that vessel “and/or a surrogate ship of hers when at the relevant time the owner or charterer of such ship or ships was in possession or control of “Rossel Current” and such person or company was the owner of the other said ship/s”.
Upon the issue of that writ, a Warrant of Attachment was obtained and fixed to the ship while it was in Brisbane.
Thereupon correspondence passed between the solicitors for the plaintiff and the solicitors for Red Coral, the current registered owner of the ship “Rossel Current” in which Red Coral complained that there had been a change of ownership since the date when it is alleged liability for the supply of goods was incurred and that consequently there was no general maritime claim enforceable to which s. 17 of the Admiralty Act 1988 referred. It was contended that the owner of the “Rossel Current” had purchased the “Rossel Current” from Abbotswood as mortgagee of that vessel exercising its power of sale on 19 May 1998.
Because Nautilus instituted its proceedings in rem by writ issued 17 July 1998, Red Coral contended that it could not bring itself within s.17 of the Admiralty Act 1988.
The solicitors for Nautilus however contended that there had been no such sale and indeed in a Statement of Claim delivered on 6 August 1998 it is asserted that when this action was commenced, S.P.S. was the owner.
It was contended by Nautilus upon voluminous evidence led upon the application by Red Coral to have the warrant set aside and the writ stuck out that the sale upon which Red Coral relied was a “sham sale” and that indeed, it was S.P.S. or in the alternative Abbotswood or in the further alternative both of those persons which was or were the “real owner” or “real owners” both at the time Nautilus provided goods and supplies for which it had not been paid and at the date the proceedings were instituted on 17 July 1998.
The applicant Red Coral also contends that the writ was defective in any event because it did not name the “relevant person” in its Writ of Summons contrary to the requirements of Rule 15; it also failed to comply with the requirements of Rule 16 which required identification of any alleged surrogate ships.
The onus is on Nautilus as plaintiff in this action to establish on the balance of probabilities the facts necessary to show that this Court has jurisdiction under the Admiralty Act 1988 to entertain its action. To do this it must show that its maritime claim comes within s. 17 of the Act. 13 Nautilus to my mind has led little, if any, evidence to suggest that the sale upon which Red Coral relies was a “sham sale”. On the other hand, Red Coral has led a great deal of evidence both documentary and oral from persons connected with the sale to demonstrate that the sale was not a “sham sale”.
Before embarking upon a consideration of this evidence and the arguments advanced by Nautilus to resist Red Coral’s application, it is convenient to refer to relevant sections of the Admiralty Act 1988 and authorities dealing with them.
Section 14 provides -
“14 In a matter of admiralty or marine jurisdiction a proceeding shall not be commenced as an action in rem against a ship or other property except as provided by this Act.”
Section 17 then provides -
“17 Where in relation to a general maritime claim concerning a ship or other property a relevant person:
(a)was when the cause of action arose the owner or charterer of or in possession or control of the ship or property; and
(b)is when the proceeding is commenced the owner of the ship or property;
a proceeding on the claim may be commenced as an action in rem against the ship or property.”
Under the definition clause s.3 “relevant person” is defined as follows -
“‘relevant person’ in relation to a maritime claim means a person who would be liable on the claim in a proceeding commenced as an action in personam”.
In spite of the enormous amount of material that was canvassed and the lengthy submissions advanced upon the hearing of the application, the issue to my mind is a simple one. Has Nautilus shown on the balance of probability that the sale between Abbotswood and Red Coral on 19 May 1998 was in fact a “sham sale” and that the “real owner” at the date when Nautilus supplied the goods etc. which is the basis of its general maritime claim and the date when the plaintiff instituted its action on 17 July 1998 was S.P.S. (or in the alternative Abbotswood.) I observe in passing that neither S.P.S. nor Abbotswood were made parties to this application or indeed specified to be “relevant persons” on the initiating proceedings. Indeed prior to the hearing of this application it has never been suggested by Nautilus that Abbotswood could on any basis be categorised as “a relevant person” under s. 17. In my view unless the plaintiff can establish these facts on the probabilities it will fail to demonstrate that this Court has jurisdiction to entertain the action and the writ should then be struck out and the warrant set aside. The consequence will be that the security given to obtain the discharge of the ship will itself be discharged.
It is clear on the material that S.P.S. was in financial troubles for more than twelve months prior to 18 May 1998 - the date upon which Abbotswood gave S.P.S. notice of its intention to exercise its powers as mortgagee of the “Rossel Current”. Indeed, articles from various newspapers recording steps that were being taken by unpaid creditors of S.P.S. - particularly “Tradewinds” - were tendered presumably to support this fact. Ships of that line had in fact been arrested at a number of ports around the world. Whether or not Nautilus was aware of this parlous financial position of the S.P.S. line when it provided materials on credit to that company seems not to be relevant to the issue in this case which is the very narrow one to which I have referred.
Mortgage documents as I have indicated were placed before the Court and counsel for Nautilus was given the opportunity to cross-examine Mr Lim the person in ultimate control of the companies which purchased a number of the S.P.S. ships on 19 May 1998. He swore that there was no relationship between the companies which he controlled, one of which was Red Coral, the purchaser of ‘Rossel Current’ from Abbotswood and either S.P.S. or Abbotswood. He was the owner-controller of his ship owning-trading organization. He swore that there was no shareholding, officers or relationship of any sort between his shipping organization and either Abbotswood Shipping or perhaps more to the point, S.P.S.
Counsel for Nautilus explored at some length the possibility of a relationship of some sort, not so much between Red Coral and S.P.S., but rather between those companies in which Mr Lim was involved and Abbotswood - the mortgagee which had purported to sell S.P.S.’s ships to Mr Lim’s ship owning organization. This line was pursued apparently to investigate whether perhaps Abbotswood Shipping as mortgagee had merely pretended to sell the S.P.S. ships to Red Coral which was really its agent or nominee so that the resulting “sale” was not a real sale at all but in effect merely a stratagem adopted by Abbotswood to indirectly control and manage the S.P.S. ships of which it was the owner.
In my view there was no evidence whatever to support such a proposition. In my judgment there is no evidence to support an inference that the beneficial ownership of the vessels purportedly sold to Red Coral in 1998 resided in any person other than Red Coral subsequent to that sale. Vide Malaysian Shipyard and Engineering SBN BHD v “Iron Shortland”as the surrogate for the ship “Newcastle Pride”(1995) 59 F.C.R. 535. Everybody connected with the sale which all the documents indicate took place on 19 May with the registration of the transfer in favour of Red Coral being effected on 19 May 1998, gave evidence which provide no support whatever for such a proposition. Mr Lim was cross-examined and denied that there was any such relationship, either direct or indirect between any of the shipping organisations that managed or ran the ships and his shipping companies purchased from Abbotswood.
Mr Lim agreed that a shipping company which managed some of the ships his companies had purchased from Abbotswood had a director who was “a friend of Abbotswood’s director”.
Crossroad Investment Corporation (“Crossroad”) which is owned/controlled by Mr Lim owns/controls various companies, each of which had purchased a ship mortgaged by S.P.S. to Abbotswood when Abbotswood exercised its power of sale as mortgagee in May 1998.
It emerged in evidence that two shipping companies called Fairtrade and Fairmont which were controlled by a Mr Ho had entered into management agreements for various vessels purchased by Mr Lim’s shipping line. Initially it seems immediately upon the sale of 19 May 1998 Crossroad retained S.P.S. to manage the ships purchased from the mortgagee. Some of those ships were en voyage carrying cargo and fully crewed etc. It seems that the new management agreements were put in place with Mr Ho’s shipping companies about three months after Crossroad purchased the ships from S.P.S.
One of the points canvassed in the evidence was the fact that a Croatian bank held a first mortgage over two of the S.P.S. ships to the extent of US$2million. The material indicates that Abbotswood held a second mortgage over those as well as other S.P.S. ships to the extent of US$50million. To secure its position and undoubtedly to facilitate its sale of all the ships over which it held mortgages, Abbotswood paid out the first mortgagee the sum of $2 million.
It was suggested both in a letter from Mr Wilson, a partner in an international law firm, Clyde & Co in London that the “transfer of the Rossel Current” (and presumably the other S.P.S. ships) was “sudden” and as such “highly unusual”. It was said to be unusual for a bona fide purchase of ships to be made while they were on the high seas without the purchaser having made any effort to inspect them.
I have very little doubt that Crossroad which had been involved in the shipping industry apparently for many years and whose business involved inter alia buying and selling merchant ships would have had reliable sources of information in the industry. Mr Lim said that the vessels his organization purchased were “in class” which satisfied him that they were seaworthy and that they were required to be drydocked every 2½ years.
It is clear that at the time Abbotswood sold the S.P.S. ships to Crossroad it was owed about US$50million under its mortgage and US$2million under the first mortgage to the Croatian bank which it had paid out.
I would infer that the ultimate purchase price of US$37,200,000 of which Crossroad agreed to pay to Abbotswood, involving a loss of US$14,800,000, resulted from serious negotiations which had extended over a period of time. The newspaper articles etc. which Nautilus tended upon the hearing make it clear that the parlous financial position of S.P.S. must have been well known in the shipping industry generally for a significant period of time before the sale of “Rossel Current” and the other S.P.S. ships. Abbotswood as mortgagee of those ships must have been concerned at the number of ships which had in different parts of the world been seized to enforce liens. The ultimate decision to sell the ships as mortgagee, at a loss of US$14.8million on the terms upon which those vessels were sold to Crossroad suggest that attempts to obtain a higher price must have been regarded by the mortgagee as futile.
The evidence suggests that the shipping market was deflated at the time of this mortgagee sale. The terms of purchase to my mind were quite favourable to Crossroad. The whole of the purchase price of US$37.2million was advanced by the mortgagee to Crossroad. It was to be repayable in five years. Crossroad in effect was obliged to pay to Abbotswood the net income from shipping operations during that time. Clause 5.2.11 of the mortgage taken over the vessels (including “Rossel Current”) to secure performance of these obligations reflects this arrangement.
The net result of this exercise seems to be that Crossroad would really derive no benefit from the net income produced by operation of the ships which it purchased for US$37.2million while those shipping operations continued for up to five years. On the other hand of course, if the shipping market improved, it might be in a position to sell the ships for more than it paid for them. 33 Abbotswood on the other hand remained mortgagee of those ships - albeit in respect of a sum of US$37.2million but under the mortgage Crossroad would be in breach of the mortgage should any vessel be arrested pursuant to a claim in rem against it - as the “Rossel Current” was arrested in Brisbane.
One might infer that an advantage as far as Abbotswood was concerned is that under the arrangement for at least five years, it is to be paid all the net income from the shipping operations conducted by Crossroad which ultimately will remain liable for debts incurred in conducting that shipping operation.
Presumably the advances made by Abbotswood to S.P.S. secured by its second mortgage over its ships had not resulted in S.P.S. earning enough money from its operations to both meet the running costs of its business and its obligations to the mortgagee. That was why the mortgagee sold off the ships. It would be idle to speculate on the only material placed before me what, if any, financial gain or financial loss resulted to Abbotswood from its dealings with S.P.S. at the time of the sale to Crossroad.
It is unnecessary as I have indicated, to speculate as to precisely what advantage each of Abbotswood and Crossroad may expect from the arrangement made in May 1998. If Abbotsford receives a 5% return on US$52million for 5 years it will be paid US$13million. If it receives a 10% return it will be paid US$26million. If the shipping market rises 10% in five years Crossroad will made a capital gain of US$3.7million. If it rises 20% it will make a capital gain of US$7.4million. Both parties are very experienced in the merchant shipping business and no evidence has been placed before me to suggest that either party to that arrangement did not regard it as involving acceptable commercial risks which might lead to acceptable commercial rewards over the next few years.
That is not to say of course that both Abbotswood and Crossroad were unconscious of the effect which the mortgagee sale might have on people in the position of Nautilus. Nautilus unless it can bring itself within s. 17 of the Admiralty Act 1988 will be left with a claim in personam only against the person which incurred or was responsible for debts in connection with “Rossel Current” and the other S.P.S ships. But this must be the situation upon any mortgagee sale of a ship, the owner of which has incurred indebtedness the subject of a general maritime claim. One would expect that both Abbotswood and Crossroad being experienced in the shipping industry would be well aware of this fact. Mr Lim who controlled Crossroad agreed that it was a matter of public knowledge in the shipping industry that many creditors had substantial claims against the S.P.S. fleet. Indeed, he observed -
“That’s the reason why probably the mortgagee pulled the plug on them because they are not paying their bills.”
He went on -
“I mean you buy a ship. You don’t inherit - you don’t inherit all the indebtedness of the owner.”
The following interchange then took place -
“Q.Quite and in fact that’s the beauty of the transaction isn’t it Mr Lim that you avoid the debts of the previous owners isn’t it?
A.Well it’s their problem. I mean we as buyers - when you buy ships in the market I mean you won’t be able to buy a ship if you worry about the liabilities.”
He later observed -
“I said it’s ordinary that ships have creditors, but whether they’re filing a claim against the vessel I don’t know.”
He then pointed out from his experience in running shipping lines -
“If the old owners owed creditors the fact that they sell the ship doesn’t wipe out their obligations
---
We also sell ships and when we sell ships we do not escape from the old liabilities - we have to pay whatever we owe suppliers.
---
When we buy ships we don’t have to worry about the seller’s obligations.”
Mr Knezevic, a director of S.P.S. and a “maritime lawyer” in Croatia said that during the year preceding the sale by Abbotswood to Crossroad, S.P.S. was having trouble making payments to Abbotswood which fell due under the mortgage. He said that one of the factors contributing to this problem was that “the market was dropping down”. He said that finally when S.P.S. was unable to raise further finance and was unable to meet obligations under the mortgage, that company agreed that the best thing to do would be for Abbotswood to sell the vessel in an effort to meet S.P.S’s obligations under the mortgage. The difficulties with the market dropping had lasted for about eighteen months. He thought that it was in about February or March 1998 - that it became clear that the company could not meet its obligations under the mortgage. He said that it was in the first quarter of 1998 that Abbotswood “decided finally -- that they should approach the markets and sell”. He said that Abbotswood paid off a debt of about US$2million to a Croatian bank - Rijecka Banka which held a first mortgage over two of the S.P.S. ships. It emerged in cross-examination of Mr Knezevic that some time in May 1998 there was a meeting in London between Abbotswood, S.P.S. and Rijecka Banka. Shortly after that meeting the S.P.S. vessels including the “Rossel Current” were sold. He said that in fact there was some prospect that S.P.S. could repay to Abbotswood at least some of the deficiency between the US$52 million secured by the two mortgages and the US$37.2 million obtained upon sale. He observed that at the time of that sale the “second hand market as well dropped down”. He said that the $2million which Abbotswood paid to Rijecka Banka was secured on “Rossel Current” and “Humboldt Current”. He confirmed that Abbotswood as mortgagee of the S.P.S. Fleet sold about nine vessels upon which was secured an indebtedness of that company to the extent of about $52million.

Mr Wettern the solicitor for Abbotswood filed affidavits and was cross-examined on them. He said that the contracts for sale of the vessels by Abbotswood were entered into on 19 May 1998. He said that he was not directly involved with the sale at that time and was unaware of negotiations leading to it. He was aware however, well before 18 May 1998 that persons controlling Abbotswood (“the Diab family”) and Crossroad had discussions concerning the sale. He said that Abbotswood was very concerned “about the financial position of their loans” and were looking for ways to “get their money back”. He said in his view from his experience dealing with matters of this sort the sale effected by Abbotswood was the normal way private mortgagee sales were effected. He said that in fact his firm was not involved in the case until after the sale had been completed. Apparently at some stage Crossroad was represented in this matter by a firm of Dutch lawyers. He confirmed that Crossroad was a Libyan company directly owned and controlled by Mr Lim while Abbotswood was also a Liberian company which was owned and controlled by the Diab family.
I have had the opportunity to consider the opinion expressed by Mr Wilson, of Clyde & Co in his facsimile transmission to the solicitors for Nautilus of 15 December 1998. It appears from that document that he did not have the advantage of perusing all the material that was advanced on this application. Neither of course did he have the advantage of hearing the evidence given by Mr Lim, Mr Wettern and Mr Knezevic.
At the end of the day having considered the evidence generally and particularly that given orally, I am quite unpersuaded that the sale by Abbotswood to the Crossroad Companies which purchased the S.P.S. ships including the “Rossel Current”, “Humboldt Current” and “Zirje” was a “sham sale”. I adopt the approach taken to this question in Marine Trade Consulting GMBM v Globus; Butterworths U.R. Judgment BC 9605991 at p. 3. There is nothing in any of the material in my view which even remotely supports the proposition that the sale in question was anything other than a normal, private mortgagee sale of ships on the best terms then reasonably procurable.
It is my view therefore that the general maritime claim which Nautilus seeks to pursue in its Writ of Summons issued in this Court on 17 July 1998 does not meet the requirements of s. 17 of the Admiralty Act 1988 in that on the material -
(a)when the cause of action arose the owner or person in possession of the ships related to the maritime claim was S.P.S. which ceased to be the owner or person in possession or control of the ships involved in that claim no later than 19 May 1998;
(b)when the proceedings were commenced on 17 July 1998 the owner of the ships and particularly the “Rossel Current” was Red Coral.
I hold that in the circumstances the plaintiff could not on 17 July 1998 commence a valid action in rem against the “Rossel Current”.
I therefore strike out the Writ of Summons on the ground that this Court has no jurisdiction to entertain that action.
With respect to the other points taken by Red Coral, it is unnecessary for me to rule on them to determine this application .
Rule 15 of the Admiralty Rules provides -
“15(1)Initiating process in a proceeding commencing as an action in rem shall specify a relevant person in relation to the maritime claim concerned as a defendant.
(2) A relevant person may be specified by reference to ownership of or other relevant relationship with the ship or other property concerned.”
Rule 16 provides -
“16(1)Initiating process in a proceeding commenced as an action in rem shall identify the ship or other property concerned in relation to the maritime claim.
(2)If the proceeding is commenced against a surrogate ship, the ship in relation to which it is a surrogate ship shall also be identified in the initiating process.”
(3)Initiating process may identify more than one ship as a surrogate ship.
Rule 19 provides -
“19.A proceeding commenced as an action in rem shall be commenced by writ in accordance with Form 6.”
Form 6 requires specification of “relevant person” in a writ commencing an action in rem. The note in Form 6 reads -
“Refer to Rule 15 and specify the relevant person in relation to the claim if known to the plaintiff.”
One might conclude from this note that the failure to specify a relevant person does not per se invalidate the Writ of Summons - at least if the failure is attributable to the plaintiffs lack of knowledge of the identity of that person.
The Writ of Summons in this case fails to specify any relevant person although strangely in the Statement of Claim delivered 6 August 1998 S.P.S. is specified as “a relevant person” within the meaning of the Admiralty Act 1988 in respect of the causes of action relating to the ship “Rossel Current”. Abbotswood was not then so specified.
There is no reference in the Writ of Summons to the ships “Humboldt Current” or “Zirje”. One finds first reference to those ships in the Statement of Claim delivered 6 August 1998.
The amendment rules read as follows -
“17(1)The powers of a Court in relation to amendment of process and --- joinder of parties extend to making an order on such terms as are just;
(a)substituting for a defendant identified in accordance with sub-rule 15(2) another person; and
(b)substituting for a ship another ship.
(2)Where process in a proceeding is amended by substituting for a ship another ship the proceeding shall be taken to have been commenced against the other ship at the time specified in the order or if no time is so specified at the time when the order was made.”
Rule 80 provides -
“80(1)The Court may on application or of its own motion and on such terms as are just:
(a)give any appropriate direction with respect to a proceeding; and
(b)by order extend or abridge any time prescribed by these rules or by Rules of Court applicable to a proceeding whether or not the time has ended.
(2)The Court may on such terms as are just dispense with compliance with any of these Rules either before or after the time for compliance. ”
Counsel for Nautilus conceded that on its face the Writ of Summons does not comply with the requirements of the Admiralty Rules. She contended however that the Court has a discretion to permit a nunc pro tunc amendment of the defective Writ of Summons and thus defeat any contention by the applicant that the warrant ought never to have issued because the Writ of Summons served upon the “Rossel Current” was defective.
In the affidavit to support the application for an arrest warrant it is asserted that the claim in respect of which it is sought concerned goods, services etc. “that were supplied or to be supplied to the ship “Rossel Current” and/or its surrogate ships for their operation and maintenance”. In essence it merely repeats the endorsement on the Writ of Summons. This affidavit was filed on 17 July 1998 - the date upon which the Writ of Summons issued.
In my view there were significant deficiencies in the Writ of Summons in this case served on the ship. The failure to specify the relevant person as required and the failure to specify the surrogate ships as required involved service on the ship of a writ which did not comply with the requirements of the Admiralty Rules.
One might think the principal object of specifying the relevant person in the Writ of Summons served on the ship is to permit the owner or person in control of the ship at the time of service to investigate as urgently as possible whether that person would at law be personally liable to meet the claim. On one possible construction of R. 15(1) and R. 17(1)(a) the specified “relevant person” is deemed to be a defendant entitled to defend the in rem claim brought against the ship. However the rules do not require that the specified “relevant person” be served with the Writ of Summons issued against the ship. There may be any number of “relevant persons” legally responsible for an indebtedness resulting in a maritime claim. Similarly the right to proceed in rem against a surrogate ship given by s. 19 of the Act limits that right to circumstances where, in respect of each of the ships the same person would be liable in an action in personam.
The plaintiff sought leave to amend the Writ of Summons nunc pro tunc to specify as the “relevant person” S.P.S. and/or Abbotswood. In my view the specification of the person who would be liable in an action in personam in respect of the maritime claim brought in rem against a ship pursuant to ss. 17 and 19 of the Admiralty Act 1988 makes it desirable that persons looking at the writ when served on the ship can determine immediately precisely who the plaintiff asserts would be liable in an action in personam categorised as “a defendant” in R. 15(1) and 17(1)(a). Indeed the Admiralty Rules to which I have referred specifically impose a requirement that this information be specified on the face of the Writ of Summons initiating the proceedings.
I am unpersuaded that it would be a proper exercise of discretion after the warrant of arrest was obtained in this proceeding instituted by a defective Writ of Summons to make an order nunc pro tunc under R. 17 with a view to supporting the validity of the initiating proceedings to preserve the force and effect of the arrest warrant. Similarly I would have reservations about dispensing with compliance with the Rules concerning the material to be specified in a Writ of Summons under R. 80(2) which would be designed I assume to achieve the effect of a nunc pro tunc amendment pursuant to R. 17(2).
Interestingly, as I have already observed R. 17(1)(a) refers to a “relevant person” specified under R. 15(1) as “a defendant”. The use of this language is perhaps understandable because of course, a “relevant person” will be liable in personam to be initiated in the same proceeding - which is why the identity of that relevant person is required to be specified. On the other hand R. 18 forbids both a claim in rem and a claim in personam. Perhaps the object of this rule is to facilitate the prompt issue of an arrest warrant. The financial reason for proceeding with a claim in rem is to obtain security to meet the claim - often probably from or at the instigation of the relevant person so that the ship will be free to leave the jurisdiction.
I have dealt with this matter shortly only because of the lengthy argument that was addressed on it. It is unnecessary for me to rule finally on the application for amendment under R. 17 or for dispensation with compliance with relevant rules under R. 80 having regard to the conclusion I have reached on the only factual issue really pursued - whether the plaintiff can establish that the sale challenged was a “sham sale”. I observe merely that as presently advised having regard to Nautilus’ knowledge of the identity of the “relevant person” to whose named ships the goods were supplied and who was involved in respect of that supply, I would be disinclined to make a nunc pro tunc order or to dispense with compliance with the rules to correct the deficiencies to which I have referred in the Writ of Summons which initiated the proceedings leading to the issue of a Warrant of Arrest and the subsequent giving of security because no effort was made to explain or qualify its failure to comply with those rules. However, as I have indicated it is unnecessary for me formally to decide this matter.
I order that the Writ of Summons be struck out for lack of jurisdiction.
I set aside the arrest warrant issued on 17 July 1998.
I order that the security given by Red Coral Maritime Corporation Limited be discharged.
I would propose to order that the plaintiff pay the costs of the applicant of and incidental to this application to be taxed.
I will hear further argument on any other orders for costs that ought be made. I will also hear further argument as to whether in the circumstances costs should be taxed on a party and party basis or upon an indemnity basis.
IN THE SUPREME COURT
OF QUEENSLAND
IN ADMIRALTY  No. 6585 of 1998
Brisbane
Before Mr Justice Ambrose
[Nautilus Australia Ltd v The Ship “Rossel Current”]
BETWEEN:
NAUTILUS AUSTRALIA LIMITED
(A.C.N. 055747941)               Plaintiff/Respondent
AGAINST:
THE SHIP “ROSSEL CURRENT”
  Defendant/Applicant
REASONS FOR JUDGMENT - B.W. AMBROSE J.
Judgment delivered 9 March 1999
CATCHWORDS:     SHIPPING AND NAVIGATION - ARREST - general maritime claim commenced in rem - relevant persons in relation to maritime claim - identification of owner - whether transfer of ownership was brought about by a sham sale - whether writ of summons compliant with Admiralty Rules
Admiralty Act 1988 (Cth)
Admiralty Rules
Malaysian Shipyard and Engineering SDN BHD v “Iron Shortland”   as the surrogate for the ship“Newcastle Pride”(1995) 59 F.C.R. 535.
Marine Trade Consulting GMBH v Globus; Butterworths U.R.   Judgment BC 9605991, No NG 752 of 1996
Counsel:Mr S R Horgan for the applicant
Ms A Phillipides for the respondent
Solicitors:Thynne & Macartney as town agents for Middletons Moore & Davies for the applicant
Murrell Stephenson for the respondent
Hearing Date:              16 December 1998