Owners of the Ship "Shin Kobe Maru" v Empire Shipping Company Inc

[1994] HCA 5

HIGH COURT OF AUSTRALIA

MASON CJ, BRENNAN, DEANE, DAWSON, TOOHEY, GAUDRON AND McHUGH JJ

THE OWNERS OF THE SHIP "SHIN KOBE MARU" v. EMPIRE SHIPPING COMPANY INC.

2 March 1994

Orders

Application for leave to file notice of contention refused.

Decision

MASON CJ, BRENNAN, DEANE, DAWSON, TOOHEY, GAUDRON AND McHUGH JJ. The respondent seeks leave to present argument in support of a notice of contention given at or about the time when the hearing of this appeal commenced, well outside the time prescribed by O.70 r.6(5) of the High Court Rules, namely, within 14 days after service of the notice of appeal. The appellant opposes the grant of leave on a number of grounds, two of which should be mentioned. One ground is that the appellant wishes to meet the new contention with an argument based on an interpretation of s.76(iii) of the Constitution and that the existing notice under s.78B of the Judiciary Act 1903 (Cth) naturally does not mention this constitutional question or at least this aspect of it. The second ground is that, as the new contention does not fall within the respondent's case as pleaded in its amended statement of claim, the respondent requires further leave to amend and that the grant of further leave to amend is or may be barred by the expiration of the relevant limitation period.

2. The notice of contention states that the respondent will seek to contend that the decision in the courts below can be supported on the following additional ground:

"That the Court has jurisdiction pursuant to Sect.4(3)(f) and Sect.17 of the Admiralty Act 1988 ((Cth) ('the Act'))".

3. The respondent invoked the admiralty jurisdiction of the Federal Court by commencing the proceeding as an action in rem against the appellant, the owners of the ship "Shin Kobe Maru". By its amended statement of claim, the respondent pleaded a claim for relief arising out of a joint venture agreement between the parties relating to the ship. The essence of the claim so pleaded is that the appellant has failed to re-transfer the ownership of the ship to Seven Seas Transport Inc. or to another joint venture company equally owned by Van Shipping Co. Ltd. (for and on behalf of the respondent) and the appellant, and that the appellant's failure to re-transfer the ship was in breach of an implied term of the joint venture agreement. By par.14 of its amended statement of claim the respondent alleged that:

"the claim made herein is a proprietary maritime claim by reason of Section 4(2)(a) and/or (b) of (the Act) in respect of which jurisdiction is conferred on this ... Court by reason of Section 10 and Section 16 of the said Act".

In its particulars of this paragraph, the respondent stated that the proceedings were a claim relating to possession of the ship and/or title or ownership of a ship or a share in the ship. Alternatively, the respondent stated that the proceedings were between co-owners of a ship relating to the possession, ownership, operation and earnings of the ship.

4. The appellant sought orders that the originating process be set aside or, in the alternative, that service on the appellant be set aside on the ground that the claim pleaded was not a proprietary maritime claim and that the action was not correctly instituted as an action in rem. Gummow J. dismissed the motion with costs, holding that the respondent's claim fell within s.4(2)(a) and (b) of the Act. On appeal, the Full Court of the Federal Court upheld the decision of Gummow J.

5. In this Court, the appellant challenges, inter alia, the correctness of the conclusion reached by the courts below that the respondent's claim falls within s.4(2)(a) and (b). The appellant's argument on this aspect of the case is based partly on an interpretation of the statutory provisions independently of the Constitution and partly on a suggested reading down, pursuant to s.13, of s.4(2), so that it does not confer jurisdiction in a matter that is not of a kind mentioned in s.76(iii) of the Constitution.

6. In connection with the last-mentioned aspect of the argument, the appellant has given a notice under s.78B of the Judiciary Act. Paragraphs 6 and 7 of that notice are in these terms:

"6. The Respondent contends that its claim is a proprietary maritime claim within the meaning of Section 4(2)(a) and (b) of (the Act) in respect of which jurisdiction is conferred on the Federal Court by Sections 5, 10 and 16. The Appellant contends that the Respondent's claim is not a proprietary maritime claim within the meaning of either of those provisions and that the Federal Court does not have jurisdiction to entertain it.

7. The Appellant further contends that, if upon its proper construction (apart from Section 13) the Act does confer jurisdiction to entertain the Respondent's claim, Sections 4(2)(a) and (b), 5, 10 and 16 would be invalid but for Section 13 and are invalid if they cannot be read down."

Paragraph 8 goes on to assert (a) that the controversy between the parties is not a matter of admiralty and maritime jurisdiction within s.76(iii) of the Constitution and (b) that, if the Act did confer jurisdiction to entertain the respondent's claim, ss.4(2)(a) and (b), 5, 10 and 16 of the Act would operate in a way that is not authorized by s.76(iii).

7. It follows that the s.78B notice is inadequate to give notice of the respondent's new contention and the precise constitutional question which will be raised by the appellant in response to that contention. The consequence is that, if the respondent is permitted to present an argument in support of the notice of contention, the hearing must be adjourned. We consider that this is an undesirable course which should be avoided.

8. Of greater significance for present purposes is the fact that the new contention falls outside the case as pleaded in the amended statement of claim. That case was confined to the claim that the action was an action in rem because the claim was a proprietary maritime claim under s.4(2). The pleading contains no hint of an alternative case based on a general maritime claim under s.4(3)(f). Leave to further amend the amended statement of claim would be required and that could entail a consideration of the limitation question. In our view, in the circumstances of this case, the question of further amendment is a matter for the Federal Court at first instance. In other words, if the outcome of the present appeal is adverse to the respondent, it can then make an application to the primary judge, if it so chooses.

9. In conclusion, it remains for us to say that, but for the inadequacies of the s.78B notice and the pleading, we would have been disposed to think that the respondent would have been entitled to present an argument in support of the notice of contention. As a general rule, a respondent to an appeal is entitled to support a judgment by an argument not presented below so long as the argument does not depend upon an issue of fact not litigated in the courts below and so long as it is open to the respondent on the pleadings and having regard to the way in which the case has been conducted. Whether O.70 r.6(5) applies to such a situation may be doubted but, having regard to what we have just said, if the rule does apply to such a situation, leave to present an argument in support of a notice of contention filed and served out of time would ordinarily be granted.

10. Here, however, there are substantial reasons for the Court's refusing to hear argument in support of the notice of contention and leaving the respondent to apply to the Federal Court to further amend its pleading should the occasion arise.