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

[1994] HCATrans 218

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S76 of 1993

Bet w·e en -

THE OWNERS OF THE SHIP "SHIN

KOBE MARU"

Appellants

and

EMPIRE SHIPPING COMPANY INC

Respondent

MASON CJ

BRENNAN J
DEANE J

DAWSON J

TOOHEY J

GAUDRON J

McHUGH J

Ship(2) 1 1/3/94

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 1 MARCH 1994, AT 10.24 AM

Copyright in the High Court of Australia

MR F.H. CALLAWAY, QC: May it please the Court, I appear

with my learned friend, MR P.E. KING, for the

Bevins) appellant. (instructed by Middletons Moore &

MB Q.:.L JACKSON, OC: If the Court pleases, I appear with my

learned friends, MB	A.W. STREET and MR G.J. NELL,
Co)
for the respondent.	(instructed by Norton Smith &

MR G. GRIFFITH. OC. Solicitor-General for the Commonwealth:

If the Court pleases, I appear with my learned

intervening for the Attorney-General for the	~riends,_MR C.R. STAKER and MR W.M. CAMPBELL.
Commonwealth, in the interests of arguing for power
Government Solicitor) and jurisdiction. (instructed by the Australian

MASON CJ: Yes, Mr Callaway.

MR CALLAWAY:  If the Court pleases. May I hand up to

Your Honours ten copies of an outline of our

develop them. In the first paragraph we identify

submissions. If I might just briefly take the

the three issues.

The first is a matter of construing the

Admiralty Act as to whether the respondent's claim

is a proprietary maritime claim. The second is:

if it were on the construction of the words,

section 4(2) would have to be read down by reason

of section 13 in order to bring it within

constitutional power. The third is the procedural

issue: the appropriate burden of proof in a matter

such as this.

The first branch is dealt with in paragraphs 2

to 9. The central submission on the meaning of the

Admiralty Act is in paragraphs 2, ·3 and 4. They

are the crux of our case on what might be called

the non-constitutional part of the matter.

Paragraph 5 is a further or alternative argument.
It is separate from the argument in 2, 3 and 4.	If
it is right, it adds weight to our case; if it is
wrong, it does not detract from our primary
argument.

In paragraph 6 we turn to the matter of

equitable ownership, the courts below having taken

the view that the respondent was an equitable owner

of the vessel. In paragraph 6 we make a submission

that it would not matter, it simply does not

matter. I will develop that in due course. That

explains the opening words of paragraph 7.	If our
submission be correct, one need not enter too

Ship(2) 2 1/3/94

deeply into these vexed questions of equitable

ownership and the meaning of co-owner, and we will say a little about them briefly. Paragraphs a and

9 speak for then,sel ves.

The constitutional issue, though important can be dealt with rather more briefly-.	We do n~t
propose to argue, for example, that the
of the High Court in England in 1890 or 1900 or	constitutional grant is limited to the jurisdiction
anything like that.

As to the procedural issue, I am mindful of

what the court said in granting special leave and

accordingly we are content on the procedural burden

of proof issue to rely on what we have said in our

outline, and I do not intend to add anything orally

to that, save as I may be invited to do so by the

court or save as may be necessary in reply, and

that should at least save time and I hope honour
the spirit of what Your Honour Justice Dawson said

to me in Sydney last May.

DEANE J: Are you going to tell us what he said?

MR CALLAWAY:  Your Honour, His Honour presided over the

Court which granted special leave, the other

members being Your Honour Justice Gaudron and

Your Honour Justice McHugh, and His Honour said

that the Court was not minded to limit the grant of
leave but that the Court would probably be

reluctant to travel into matters of procedure or

matters of fact. His Honour said that no doubt I

would bear that in mind in developing the argument.

As to matters of procedure, we have borne it

steadily in mind and we are content with our

outline. As to matters of fact, the form of our

submission really makes the factual matters

irrelevant. At the appropriate time - my notes of

what was said to me in that regard too. argument, I think, run to about 7 minutes on the facts so I hope that I have honoured the spirit of Your Honours, developing then paragraph (2),

our primary submission, on the Admiralty Act branch
of the case is that a proprietary maritime claim is

one where the plaintiff asserts, or perhaps relies

on, his own right to possession, title, ownership

or the like. We say "or the like" because we have

to accommodate things like mortgages. So far as

this case is concerned, where the plaintiff asserts

his own right to possession, title or ownership;

not where the plaintiff asserts the right of a

third party to be given title or property or

ownership.

Ship(2) 3 1/3/94

That is why, in our submission, it is called a

proprietary maritime claim and why it may be

prosecuted in rem against the ship concerned. And

in line with the international convention to which

Australia _is not a party but which the Law Reform

Commission frequently took into account, in line

with the overseas legislation of the Arrest

Convention why the claim can be prosecuted only

against the particular ship concerned.

Your Honours have no doubt had occasion to

look at the Act, but if Your Honours turn to the
Admiralty Act 1988, beginning at section 4,

Your Honours will'recall that section 4 draws a distinction - in our submission a crucial

distinction - between proprietary maritime claims

and general maritime claims. Although that
phraseology, that terminology, is Australian, one

finds the same notion in the overseas legislation

and the Arrest Convention. I will point out some

of the provisions later.

When one turns to sections 16, 17, 18 and 19

dealing with the ship against which the action

in rem may be brought, again one sees the same

contrast. In section 16, a proceeding on a

proprietary claim may be commenced only against the ship concerned. In contrast with a proceeding on a general claim which can be commenced against the

ship concerned - that is paragraph 17 and 18 - or

against a surrogate ship, sometimes called a sister

ship. And, without asking the Court to look at it

this morning, the explanatory memorandum, a copy of

which we provided to the Court, referred to this

matter also in the notes to clause 4 of the bill,

paragraph ( 2) •

There are very few cases I ask Your Honours to actually look at this morning but if the Court

would be good enough to look at the decision in

"Talabot", Aichhorn & Co v The ship M. v. "Talabot",

(1974) 132 CLR 449. The case itself stands for the

indubitable proposition that service of a writ in

rem cannot be affected out of the jurisdiction. In

the course of deciding that, in the joint judgment

of Mr Justice Menzies, Mr Justice Gibbs and Your

Honour the Chief Justice, the judgment set out a passage from what was said by Lord Watson in the

"Henrich Bjorn", and it is that short quotation

which, to use colloquial language, says it all, at
the top of page 455. The passage that Your Honours

adopted was this:

"The action is in rem, that being, as I

understand the term, a proceeding directed

against a ship or other chattel in which the

Ship(2) 4 1/3/94

plaintiff seeks either to have the res

adjudged to him -

the cruc~al words being "to him" -

to have.the res adjudged to him in property or possession -

they are the proprietary maritime claims -

or to have it sold, under the authority of the
Court, and the proceeds, or part thereof,

pecuniary claims." adjudged to him in satisfaction of his

So, there one finds the fundamental conception.

In a proprietary maritime claim, in substance

the plaintiff says, "This is my ship, I am entitled
to possession, I am entitled to ownership or

title", or "I am the mortgagee, with the

mortgagee's interest in the ship. I am asserting

my property," a wide sense of property, "in this

vessel, and that is why I arrest the vessel, and

that is why I cannot arrest a surrogate vessel."

With a general maritime .claim it is quite different. The plaintiff has a claim for breach of

contract, or a claim in tort, or some other claim

of that description, and the plaintiff arrests the
ship not because of any proprietary interest or

claim but as a source out of which that general

claim in contract or tort or whatever may be

satisfied. The ship is a source of funds to

satisfy the claim to compensation, and that is why,

of course, under modern admiralty law one can

arrest a surrogate ship because one is not

concerned with proprietary rights in a ship, one is

concerned with a source of funds to satisfy a claim

of a general but not proprietary kind.

That really follows from an understanding of

the difference between a proprietary maritime claim

and a general maritime claim and, in our

submission, it is the natural reading of the words

of section 4(2)(a) and (b):

A reference in this Act to a proprietary

maritime claim is a reference to:

(a)	a claim relating to:
(i) possession of a ship;

(ii) title to, or ownership -

and so forth. It would be a mistake - and it is

not a mistake the courts below fell into. In this

Ship(2) 1/3/94

the relevant part of section 4(2) to look only, for

regard we believe we are in company with

example, at paragraph (a), to look only et the

words "a claim relating to possession" or "a claim

relating to ownership". One must always remember

that what is being defined is a proprietary

maritime claim and the courts below clearly

apprehended that, because t_hat is why Their Honours

place so much emphasis on the perceived equitable

ownership of the respondent.

respondent was an equitable part owner of the The gist of the judgments below was that the

vessel and therefore the respondent's claim was a

proprietary claim relating to possession, title or

ownership. I will say more about that when we come

to paragraph 6, but Their Honours were in harmony

with our submission that one cannot just look at

the words in paragraph (a) in isolation, and if one

did, one would produce bizarre consequences. For

example, a mortgagee in possession might, or his

receiver might, engage people to repair the ship.

The repairers might then make a claim in contract.

That might well be a claim relating to a mortgage

within the meaning of (a)(iii) read alone, but it

obviously would not be a proprietary maritime claim

and nobody would ever suggest that it was. Or, to

give an example that in an ironic way is closer to

home, a statute may, and statutes frequently do,
impose a penalty on an owner of a ship and
sometimes there is a provision saying that owner

includes equitable owner, for example, section 391

of the Navigation Act.

It is easy to imagine a government bringing

proceedings for a penalty under such a statute and

the only point of contention being whether the defendant was the equitable owner of the ship.

Such a claim would be a claim relating to ownership

of a ship, but no one would ever suggest that it

was a proprietary maritime claim. So that for all

those reasons one cannot just focus on

paragraph (a); one has to look at all the words. When one considers the claim actually made by

the respondent in this case, it is and it is

expressed to be a claim for breach of contract.

The gist of the respondent's complaint is that the

respondent says it had a contract with the

appellant and under the contract, in the events

that happened the ship should have been transferred

to a third party - alleged breach of contract.

BRENNAN J:  Why do you say third party and not trustee or

nominee, or is that taking you in advance of - - -

Ship(2) 1/3/94

MR CALLAWAY:  No, Your Honour. As I understand the

plaintiff's claim, it does not say the transferee

would be a trustee for it. It says that under the

joint venture agreement, the shjp should now be

transferred either back to Seven Seas Transport

Incorporated or to some other joint venture vehicle. The trust that was perceived in the courts below proceeded on the view that the respondent, which is of course at present the

registered owner of the vessel, holds it on trust

for the appellant and the respondent. That was the

equitable ownership perceived in the court below.

BRENNAN J: So that if the remedy was forthcoming, the

transferee would not hold it on trust at all.

MR CALLAWAY:	We would certainly submit that, Your Honour. The reason for my hesitation is that the courts
below did not turn their minds to that. We would
certainly say that what Your Honour says is correct
because we would say that there is in fact no trust
except at present a trust for Seven Seas Transport, but I must not exceed my self-imposed seven minutes
later on about that. If one reads the joint
venture agreement and one reads the writ and one reads the statement of claim, unless I have missed something, there is no suggestion that the ship
would be held on trust by Seven Seas or the other vehicle, no suggestion whatever. There is a
reference to piercing the corporate veil but there
is in fact no assertion of an equitable interest in
the endorsement or the statement of claim. One gathers it emerged in the course of argument at the
trial.

Your Honours, it is fundamental because what

this respondent needs - and I will come back to
this later in other ways because it is relevant to

other parts of the case - is a general maritime

claim for breach of contract for the sale of a

ship. There is of course no such claim in

section 4(3) and that is why the respondent is

necessarily driven back to formulating its case as

a proprietary maritime claim, but it is not. If

one remembers that dichotomy, this is not an

assertion of the respondent's ownership; this is a

seeking of a remedy for breach of contract.

Remedies for breach of contract belong to general

maritime claims; proprietary rights belong to

proprietary maritime claims.

The claim that is made is a claim either for

an order that the ship be transferred to a third

party pursuant to the joint venture agreement, or

that there be a sale of the ship and a dividing of

the proceeds between the plaintiff and the

defendant - the respondent and the appellant. But,

Ship(2) 7 1/3/94

of course, one must not be beguiled by the prayer

for relief for a.sale because the Court has no

power to order a sale of a vessel except to raise

the money to satisfy a general maritime claim

which is not this case, or under section 33 where

there is a co-ownership dispute.

So that the alternative relief sought of a

sale and division of the proceeds is still a

reflection of the respondent's contention that it

has a proprietary maritime claim. It refers to

section 33 and back to the proprietary maritime

claim in section 4(2)(b).·

Your Honours, we have looked and we have not

been able to find any case in this country or in
New Zealand or the United Kingdom or Canada or tt.

United States, where a claim in rem of the kind made in this action has been made, let alone

successfully prosecuted. The nearest case is the

Canadian case Antares Shipping Corporation v The

"Capricorn", 111 DLR (3d) 289. It is referred to

and relied on in the judgments below. It is one of

the few cases that I wish to take the Court to, not

with a view to reading it but simply to invite

Your Honours to mark, or make a note, of some of

the critical passages.

Your Honours, first there is a series of

passages in the judgment in The "Capricorn" on

which we rely to substantiate our submission in

paragraph 4 of the outline that the plaintiff was

asserting its own proprietary claim, and then there

is a series of passages which refer to specific

performance and are therefore relevant to paragraph

5 of our outline. To save the Court's time, if I

may, I will first go through and draw attention to the first series, and then while the Court has the

case I will go through and draw attention to the second series, and hopefully it then will not be
necessary to ask Your Honours to go back to this

case.

Your Honours will recall that this is the case

where the purchaser of the vessel claimed specific

performance of the contract of sale. That is a

proprietary maritime claim. We do not quarrel with

that branch of the decision. That the plaintiff

was asserting its own proprietary claim appears, in

our submission, from the following passages:

first, from the claim for relief set out at

pages 291 point 6 to 292 point 2; then at page 294
point 3, the italicized words; then 295 point 3,

the claim here being one as to the appellant's

entitlement to possession of a ship; 298 point 8,

specific performance of a contract entitling the

claimant to title, possession or ownership of a

Ship(2) 1/3/94

ship, and 299 ppint 7, practically the whole of the

long second-last paragraph.

Mr Justice Ritchie also refers to the matter of specific performance, and the passages to which

we would respectfully draw the Court's attention in

that connection are three. The first is 292

point 5, where His Lordship thought it relevant to

emphasize that there had been an appearance, so

that the action which had begun in rem now
continued both in rem and in personam. Here, of

course, no unconditional appearance has ever been entered. So that if my client never did enter an unconditional appearance the matter would proceed

solely in rem.

At 297 point 6, Mr Justice Ritchie sets out a

passage from a judgment of Sir George Mellish, and

whilst I do not wish to read it to the Court, what

that judgment shows, and the italicized passage

particularly, is that the Court of Chancery was the

only court that could grant specific performance.

Of course that will become relevant in a moment,

but the gist of the submission is that the

High Court of Admiralty could not grant specific performance, the Court of Chancery could grant

specific performance.

Of course a modern court with Judicature Act

provisions like the Federal Court of Australia or
the Supreme Court of Victoria or New South Wales

can grant all the available remedies, but it must

first have jurisdiction, and where the plaintiff

has no claim to be in the Australian courts at all,

except an admiralty action, one must first

establish the admiralty jurisdiction before one can

take advantage of Judicature Act provisions saying

that in a matter within jurisdiction you can grant

specific performance.

to 299 point 6, where Mr Justice Ritchie relies on The third reference, 298 to 299, 298 point 9

section 44 of the Canadian Federal Court Act, which

is similar in operation to section 22 of the

Federal Court Act in this country, but that comes

into play after jurisdiction is established.

Now, Your Honours, we say the same of

"The Bineta", the other case referred to in the

courts below. It was a very curious case. There

the registered owner had sold the ship, the

purchaser had become registered, the purchaser had

failed to pay the purchase price. So the vender

had exercised her unpaid vendor's lien and resold

the ship. The second purchaser brought proceed~ngs

in admiralty claiming to be the owner of the ship

and entitled to be registered, and

Ship(2) 9 1/3/94

Mr Justice Brandon, in a very short judgment, held

and en~itle~ to be registered. Ag~in, a person	that th7 second purcha~er was the owner of the ship
asserting his own proprietary claim.
In the outline, we have given all three references to "The Bineta", because they are all
different. The judgment is the same in all three,
but a little bit of extra information is purveyed
in each of the reports and as they are very short we thought that it might be of assistance to the
Court. The Lloyd's Report is very interesting,
because it sets out the whole of the transcript of
what happened after His Lordship gave judgment and His Lordship said that he had found it a difficult
case but, clearly, he had considered it a matter
that was capable of some redetermination. There was no appearance, there was no contrary argument;
it was virtually an ex parte application.

Now, Your Honours, in An tares and "Bineta" ,

not only are they both examples of someone

asserting its or his own proprietary claim, but if

it matters, we would submit that they are both

examples of someone making a claim to legal

ownership of the vessel. The law on legal and

equitable title to ships and the relationship

between legal title and registered title, is a

morass. I will refer to it briefly later on. The

better view, in our respectful submission - and

there is a recent Australian case which says this -

is that you do not need to be registered, even in

the case of an Australian ship, in order to have

legal title. A ship, after all, is a chattel. One

can acquire legal title by having the ship build

for one and property can pass to the purchaser in the usual way, depending on the true construction of the contract for construction.

One can acquire a ship by sale and what gives one the legal title is the bill of sale. One can

inherit a ship and acquire the ship by transmission

and the better view is that they are all legal

titles and that registration is registration of

title, not title by registration, as in the Torrens

system with land. It is true that once you are

registered, you acquire certain advantages such as

the power to transfer the vessel to a bona fide

purchaser for value without notice and to give that

person an indefeasible title. If I am right about

that, in both these cases they were not just

assertions of the plaintiff's own proprietary claim

but they were claims to legal ownership, so that

they really do not advance the respondent's case in

the present proceedings before this Court.

1/3/94

· Ship( 2) 10

Your Honours, although I have perhaps gone a

little too quickly, that is the crux of our case

that this is not a proprietary maritime claim• what
this plaintiff needed was a general maritime ~laim,

but there was not one and that is why it is forced

to try to rely on 4(2)(a) and (b). Perhaps that

will become clearer as I develop the other

submissions, but that is the gist of the case.

Further, alternatively, to the extent that the

respondent's claim is one for specific performance,

it would be outside admiralty jurisdiction for the	further reason that a claim for specific
performance in rem is a contradiction in terms.
The hallmark of admiralty jurisdiction in rem is that one proceeds against the vessel. It may well
be that the defendant never enters an appearance.
The court proceeds, if it decides in favour of the
plaintiff; it awards the vessel in a proprietary
claim or it orders it to be sold in a co-partnership claim or it orders the vessel to be sold and uses the fund to satisfy the general
maritime claim .. Claim for specific performance is
quintessentially a matter of proceeding in personam.

BRENNAN J: That is a proposition which I find surprising.

I find it surprising. Why do you say it is

quintessentially in personam? That it is in

personam can be accepted.	Why the negative implied
in quintessentially?

MR CALLAWAY:  It may be, Your Honour, that I have implied

more than I intended. Equity acts in personam.

Remedies, the most obvious of which are the

injunction and specific performance, are the prime

examples of the Court acting in personam. That is

all I meant by - - -

BRENNAN J: I see.

MR CALLAWAY:  Your Honours, that submission is either right

or wrong. It is not a submission which is

susceptible of lengthy elaboration. It is true

that the opposite view was taken by	\l
Mr Justice Brandon in The Conoco Britannia, (1972) 2 QB 543. But we respectfully submit that that is wrong in principle and we notice that it has not
commended itself to the learned author of Thomas on Maritime Liens and that is why we have taken the
short cut of referring the Court to the relevant
passage of Thomas, which in turn refers to The Conoco Britannia.

I may say also that the Law Reform Commission

referred to this issue of specific performance and

the Conoco Britannia in its report, copies of the

Ship(2) 11 1/3/94

waole report have been made available to the court.

The relevant paragraph is paragraph 248. At paragraph 248 the Law Reform Commission ref~rred to

Mr Justice Brandon's decision and said that the ·

issue could be left open and it was not appropriate

to resolve it in the legislation.

That is all I need to say about specific

performance except to add two footnotes in case the

Court is assisted by them in reading

Mr Justice Brandon's judgment. Neither relates to

the specific performance point, but the Court might

wish to know. The first part - The Conoco

Britannia deals with two issues and the first is

whether the claim was a claim for use or hire of a

ship, and the second is the specific performance
point. What His Lordship held on the first point

is inconsistent with the decision of the House of

Lords in The Escherheim, (1976) 1 WLR 430. That

does not, of course, detract from what His Lordship

says about specific performance but Your Honours

should know that it is clearly wrong from the first

branch of the case.

The second footnote is that His Lordship's

comments at page SSSC in Australia would have to be

read in conjunction with section 31 of the

Admiralty Act. I doubt that that affects the

specific performance point either, but it is

be handled with care. another reason why the judgment is one that has to

The Courts below did approach the matter on

the basis that the plaintiff's claim had to be a

proprietary claim, it had to relate to the

plaintiff's proprietary interest of some kind. And

Their Honours took the view that my client held the
vessel on trust for the plaintiff and the

defendant, therefore the plaintiff, the respondent,

was a past equitable owner under a trust of the

vessel. Their Honours said, "There is equitable

ownership. The plaintiff's claim is therefore a

claim relating to its equitable ownership and it is

a claim between co-owners relating to possession,

ownership,. •

We do not concede that, but even if it were

• i	right, or even if we could not challenge that in a
second appellate court - something I will say more about later - in our respectful submission it would
not assist the respondent because the respondent's
claim would be exactly the same if it had no
equitable ownership. Its claim is for breach of
contract and for specific performance of a
contract, its claim is no stronger and no weaker if
my client holds the ship on trust for the two parties.

Ship(2) 12 1/3/94

So that even if one adopts the test of "in

relation to" taken from Lord Keith's speech in the

Gatoil case, there is no connection, in our

respectful submission, between the respondent's

claim and the equitable ownership which the courts

below thought that it had; no connection and

certainly not, in Lord Keith's words, a reasonably

direct connection.

Your Honours, may I ask the Court to go to the

judgments below in this connection. If one begins

page 145 of the appeal book His Honour reaches a	in the judgment of Mr Justice Gummow, at the top of
conclusion at line 1:

Upon the construction I have given

sub-s 4(2) -

they are the important words -

this claim would be a claim "relating to

possession of a ship" ..... a claim relating to

title to or.ownership of a ship •.... and a

claim between co-owners (Empire and YSL)

"relating to" the possession and ownership - His .Honour knows that one cannot just look at

paragraph (a) in isolation; it is a proprietary

claim. "Upon the construction I have given", that

construction is back at page 138 where His Honour

says near the top of the page:

In my view, a claim may relate to possession of a ship or to title to or ownership of a ship ••••• where the source of

the entitlement upon which the claim rests is

found in a beneficial interest in the ship

which is asserted by the claimant.

Your Honours, that is simply not the case here.

One can read and reread the writ and the statement

of claim and one can take into account the facts

and the way in which the case is formulated. The

source of entitlement is the contract and nothing

but the contract. I need not read the rest of the

paragraph but I invite the Court - - -

DAWSON J: An entitlement to what? The source of the

entitlement is the contract and nothing but the

contract. The source of entitlement to what?

MR CALLAWAY: 

The source of alleged entitlement to the

orders sought, Your Honour, a transfer of the ship
to a joint venture vehicle or sale of the ship on a
co-partnership theory with a view to division of

the proceeds. Another way of putting it is the

source of the respondent's alleged entitlement to

Ship(2) 13 1/3/94

make a proprietary maritime claim is its equitable

ownership. That is what His Honour is saying, as

we respectfully_understand it. Similarly, in the

next paragraph in relation to co-ownership,

His Honour continues:

Where, as is said to be the case here, the beneficial interest in a ship is divided

between two parties, one of whom is also the

registered owner, then, in my view, a dispute

between them also may give rise to a claim

between co-owners -

but of course that is not enough; it has got to be

a claim between co-owners relating to possession
and so forth. His Honour continues:

That is to say, I would not confine the sense in which the concept of ownership is used in

this paragraph to have legal or registered

title any more than I would in sub-

para 4(2)(a)(ii). It will then be an issue,

in each, whether the claim sought to be

litigated has a sufficiently direct connection

with the possession, ownership, operation or
earnings of the ship.

So that we respectfully submit that the

reasoning in the courts below is mistaken in any
event. Even if Their Honours correctly perceived a

trust to the ship, which we do not for one moment

concede, Their Honours misapprehended the nature of

a claim made, and I am sorry but one sees the same

thing in the Full Court - - -

DAWSON J: Just before you go to that, Mr Callaway, where do

you say the beneficial ownership in the ship lies?

MR CALLAWAY:  Your Honour, I wonder if this would be a

convenient moment for me to use up my seven

minutes, and tell the Court what -

DAWSON J: It is up to you.
MR CALLAWAY:	I will, if the Court pleases, because it is a

short matter, and the Court will at least then know

what our position is and not think that I am in

some way holding back. Now, in order to keep

within my self-imposed limit can I just make a

series of submissions?

First, we do not concede that there were

"concurrent" findings below. It is true that all

four judges took the view that there was a trust to
the ship for these two parties, but because

Their Honours applied a low standard of proof,

there had to be a strong argument for the opinion

Ship(2) 14 1/3/94

that the court had jurisdiction, we submit that

that is not a concurrent finding within the meaning

of authorities dealing with concurrent findings.

In any event, this Court has always taken a

slightly more liberal view of concurrent findings

than the Privy Council used to. That is the first

submission.

Secondly, the evidence does not depend on oral

examination or anything like that. The evidence is

entirely documentary plus Mr Lieu's affidavit,

which is referred to in Mr Justice Gwmnow's

judgment, especially at appeal book 123 and 125.

So, it is very easy to form one's own view about

this issue. One could be at third or fourth

appellate court, one would be in as good a position

as the trial judge.

Our submission, Your Honour, is this: if one

reads the documents, the joint venture agreement,
the flag change agreement, the letter appointing

Van as an agent, and there is one other relevant

document, uninstructed by the judgments below we

would have said it was crystal clear that these

parties did plan to own a ship jointly, and the way

they did it was to set up a corporate structure, in

which each of them would have a half interest in

the company called UTI, it would have a
wholly-owned subsidiary, Seven Seas, and Seven Seas

would own the ship. A normal method for jointly

owning a ship. Mr Justice Brandon said in a case

referred to by the Law Reform Commission "trusts of

ships are rare", that is how you do it.

Then came the flag change agreement in 1984

and, in a very nominal sense, the vessel was

transferred to the Japanese register, and it had to

be registered in the name of the Japanese national,

and it became registered in the name of my client.

It certainly does look as if you might be able to

The parties intended no real change at all so that	spell out a trust from the flag change agreement.	there might well be a trust under which my client
would then hold the ship on trust for Seven Seas -
the joint venture vehicle - so that the flag change
agreement would not really alter the corporate
structure, except to satisfy the requirements of
Japanese law. If there is a trust it is a trust
for Seven Seas so that the flag change agreement
does not really alter the position.

The evidence to the contrary are references to

beneficial ownership, references to jointly owning

a ship, references to eventual ownership, because

these documents were clearly not conceived in the

English language, but they are quite neutral.

Businessmen talk about jointly owning and

Ship(2) 15 1/3/94

beneficial ownership, without necessarily thinking

of trusts. The ·only significant piece of evidence

against us on this point, and it is only glancingly

referred to by the courts below, is this: clause 4

of the joint venture agreement and clause 3 of a

document referred to at page 34 of the appeal book

contemplate that, if the vessel is sold by

Seven Seas, the proceeds will be divided up and

paid to YSL and Empire. Seven Seas is a Liberian

company and so is UTI. If the law of reduction of

capital in Liberia is the same as in England and

Australia, while there might be a difficulty in

selling the capital asset and dividing the proceeds

up among the ultimate shareholders - it might be a

reduction of capital - so, if the law of Liberia is

the same as our law, those clauses might imply that there is a trust to the ship, because then it would

be lawful to distribute the proceeds directly.

We do not know what the law of Liberia says,

and I know my learned friend will say, therefore it

has to be presumed to be the same as the law of

Australia, but even so, the parties may well have

contemplated that. they would do whatever was

necessary to comply with the legal formalities.	If
you needed a reduction of capital, they would have
a reduction of capital.	No doubt they.did not

think of this at all; they just thought of
themselves as really owning the ship jointly and

they were entitled to divvy up the proceeds. But even if we could not introduce evidence as to the law of Liberia, or even if the law of Liberia were

the same as English law, clause 14 of the joint

venture agreement says that the parties will use

their rights as shareholders and otherwise to

effectuate the agreement. So, if the only way you

could divide the proceeds up was to have a

reduction of capital or to wind up Seven Seas, that

is what the parties would do.

DAWSON J: But your point is that really ultimately you just

come back to Seven Seas.

MR CALLAWAY: Yes, Your Honour, it is a very normal

arrangement.

DAWSON J: And if there is a trust, well then, it is a trust

for Seven Seas.

MR CALLAWAY:  Yes, Your Honour. I will not ask the Court to

go - I will tell the Court where ~he 7eferences . are: I have mentioned where Mr Lieu is. The joint

venture agreement begins at page 13; the clause I

have referred to, clause 4 and 14 particularly, the

flag change agreement, from which one can spell

out, very probably, a trust for Seven Seas, is

page 28; there is an addendum to it; the critical

Ship(2) 16 1/3/94

clause that might be said to be against us is at

page 34 and there is a document called "Exhibit E"

at page 36, which we submit is strongly in favour

was purely corporate.	of the view that the mechanisnt for joint ownership
Now, Your Honours, I do not want there to be any doubt about this: we do respectfully submit
that the courts below were wrong in perceiving a
trust of the vessel for these parties, and we do
submit that in the rather special circumstances of
this case, it is open to Your Honours to take a
different view and to hold that there was no
equitable ownership in the respondent. But if the
Court were unwilling to re-examine the factual
material, it still would not matter, in our
submission, for the reason given in paragraph 6 of
our outline.

BRENNAN J:  If the effect of the flag change agreement was

to impose upon your client the obligations of a

trustee for Seven Seas and if, on a true

construction of the joint venture agreement, Seven	Seas held its interest in the boat in trust for its
shareholders, what do you say then?

MR CALLAWAY:  It would not affect our submission in

paragraph 6, Your Honour.

BRENNAN J: That is because it is not a claim on behalf of

the person who is the beneficiary of the trust on

which you hold it.

MR CALLAWAY:	No, Your Honour, that really would be our submissions in - it is my fault the way I put it,
but that is so, Your Honour; that would be one of our answers. That is our general point about the nature of a proprietary claim as the plaintiff's
claim in paragraphs 2, 3, 4 of the submission. But
it would still be true that this claim does not
relate to equitable ownership; it is a pure claim
in contract. It is no worse and, more importantly,
it is no better, whatever trust is spelled out,
including the hypothetical trust that Your Honour
put to me a moment ago.

It is simply not a claim relating to equitable

ownership of any kind at all if one looks at the

pleadings or the facts; it is a claim in contract

to which we say we have a defence on the merits

which in due course will be brought forward, but we

say that the matter has no connection with

Australia and we are justified in pursuing the

challenge to jurisdiction that we have made.

Your Honours, I nearly omitted to take the

Court to the - I was so concerned to read

Ship(2) 17 1/3/94

Mr Justice Gwnmow to the Court, I nearly forgot to

tell the Court what the Full Court says about the

relationship to equitable ownership.

Mr Justice Davies really adopted what

Mr Justice Gwnmow said on that subject at pages 190 to 191. I need not read that.

Mr Justice Lockhart dealt with the matter in

two places, first at page 202. His Honour had been

setting out the three issues. His Honour begins to
set out the issues on page 201 and at page 202 in

the paragraph at the top of the page, His Honour

explains the second issue as:

Does a claim by a plaintiff of a beneficial interest in a ship answer the

description ..... a claim (a) relating to

possession of or title to or ownership of a

ship or (b) between co-owners of a ship

relating to the possession, ownership,

operation or earnings of a ship.

We would respectfully say that is just not this

plaintiff's claim. When one comes to the

conclusion which begins at the bottom of page 214,

line 25, His Honour says:

In my opinion a claim of entitlement to a

beneficial interest in a ship or a share in a

ship alleged by a plaintiff may answer the
description of a claim relating to possession

of a ship or title to or ownership -

et cetera. On the next page His Honour says:

Where a dispute exists between two

persons between whom the beneficial interest

in a ship is divided, and one of them is also the registered owner of the ship, the dispute

may answer the description of a claim between

co-owners of a ship relating to its possession

or ownership - So that is substantially the same reasoning as
Mr Justice Gwnmow.	He proceeds, correctly in our

respectful submission, on the view that a

proprietary claim means that the claim has to be

linked in with proprietorship but it misapprehends the claim in this case which is not related to the

plaintiff's equitable ownership even if it has it.

DEANE J: What, on your argument, would be the position if

the parties here were the legal owners of the ship?

would it still be that it did not come within the

section because the claim arose out of breach of

contract?

Ship(2) 18 1/3/94

MR CALLAWAY:	Yes, it would, Your Honour.
DEANE J:	I see.

MR CALLAWAY: It is not a technical point. It still would

just arise out of breach of contract.

DEANE J:  I follow that that is the answer. It is a bit

more difficult to keep it out of (b) if there is

legal ownership and what is involved is a claim

that the ship should be transferred to a third

party.

MR CALLAWAY:  Your Honour, our submission on that point is

this:  a plaintiff wanting to use (b) has to jump

two hurdles. First it has to be a claim between

co-owners, and then it has to be a claim relating

to possession ownership, et cetera. Even if

co-owners includes equitable co-owners, it is still

not a proprietary maritime claim unless it is a

claim between the co-owners relating to possession,

et cetera. We submit that that means relating to

the possession or ownership of one of the
co-owners, not an entitlement of somebody else to

possession or ownership.

DEANE J: But why does it not relate to possession,

ownership, operation or earnings if one co-owner is

claiming that neither of them is entitled to retain

possession?

MR CALLAWAY:  Your Honour, one has to admit that on a purely

literal reading of the words, assuming co-owners

included equitable co-owners one could bring it

within the words. It is the same kind of point as

my earlier submission about one cannot read

paragraph (a) in isolation. The fair reading of

the words is that just as (a) is a proprietary

claim where the plaintiff is litigating his own

ownership et cetera, so in the case of (b).	The
only difference is it is between co-owners.	The

co-owner is still litigating about his own right to

possession or ownership.

DEANE J: Is that so though? Or is he saying, "Forget the

question whether equitable co-owners are included".

Is he saying, "I am a co-owner of this ship. There

is a contract between us that the ship will be

applied in this way, and here you are sailing it as

if you're the owner".

MR CALLAWAY:  Your Honour, that is, with respect, true, but

it brings out the problem because as Your Honour

says, putting aside whether the co-owners include

equitable co-owners it is again a purely

contractual dispute. The plaintiff is not relying

on its interest as a co-partner. In

Ship(2) 19 1/3/94

Justice Gummow's words, the source of its

entitlement is not its proprietary interest.

Instead, it is saying, ttwe, the partners, have a

contract between us under which you should perform

a contractual obligation and give possession of our

ship to X.tt It is just as contractual as it was

before. That approach has the advantage of reading

paragraph (b) harmoniously with paragraph (a) as

the Law Reform Commission expected it would be.

The Law Reform Commission dealt with disputes

between co-owners at paragraph 150 on page 113.

The commission had, in paragraph 149, dealt with

the claims that become section 4(2)(a) and then in

paragraph 150 the commission turns to the claims

that become paragraph 4(2)(b) and say:

Some issues of co-ownership will be

capable of being brought under the previous

head - I should interpolate that back at paragraph 146 the

commission had said there is no problem about

overlapping heads, which is clearly right -

as disputes as to the ownership of a share in

a ship. There should also-be provision to

cover in addition disputes relating to the

employment and earnings of a ship, including

actions for restraint or possession.

So that this provision was put in not to

enable one to litigate for the right of a third

party to possession or ownership, but essentially to

make sure that it covered operation and earnings. I

am not suggesting it may not cover other things by

the by, and Mr Hetherington, in his book The

Annotated Admiralty Legislation, in annotating

section 4(2)(b); page 35 point 4 said disputes

between co-owners of ships will, for the most part,

fall under head (a) of section 4(2). Head (b) is

more likely to be used to cover disputes relating to

the employment and earnings of a ship.

So that it is not as if we are inviting the

Court to read paragraph (b) in a peculiar way just

because it suits us. It is the harmonious way of

reading the two together, and we make the same

complaint, that to fit the claim into (b) is still

to endeavour to litigate a contractual claim rather

than a proprietary claim.

Your Honours, I have not said much about

possession. I have spoken a lot about title and

ownership. One of the reasons for that is that on

any view, on the view of the respondent's own case

if it succeeded, possession would have gone to

1/3/94

~hip(2) 20

Seven Seas, and it is interesting in

Mr Justice Davies' judgment, His Honour always

scrupulously omits the references to possession.

His Honour quotes the relevant section, His Honour

puts " ... when you come to possession", if one reads

the judgment one finds His Honour never relies on

possession. So it is convenient to argue the case

in terms of title and ownership.

It is submissions like that which led us to the perhaps optimistic submission in paragraph 7 of

the outline, that it is really unnecessary to

decide whether the word "ownership" in

section 4(2)(a)(ii) or section 4(2)(b) includes

equitable ownership, and of course unnecessary on

the same reasoning, to decide whether co-owners

includes equitable co-owners. If the Court took
the view that it does matter, we would submit that
the word "ownership" in those two references does

not include equitable ownership, and the word

"co-owners" in 4(2)(b) does not include equitable

co-owners.

One very important consideration is that the

Law Reform Commission said in paragraph 138 of its

report - I do not ask the Court to go to it, but
the precise reference is page 106 line 8, that it
was unnecessary to cater for trusts in the
legislation. That was said just after a reference

to Mr Justice Brandon's statement, I think in

The Andrea Ursula, that trusts of ships are very

rare. But even uninstructed by knowing the mind of

the Law Reform Commission, it is not too difficult
to reach what we submit is the right conclusion

just by looking at the words of the Act.

To start with, Your Honours, when the

draftsman wants to refer to equitable interests the

draftsman knows how to do so. Mortgages, for

example, another proprietary maritime claim, there

is a definition of mortgage in section 3(1), page 3

of the Act, which expressly refers to equitable

interests, and equitable mortgage is expressly
covered.	So it is not as if the draftsman does not

know how to refer to equitable interest when it is

appropriate to do so.

Secondly, in understanding words like

"ownership" and "co-owner", we submit that one

should always bear in mind the way the word "owner"

is used in sections 17, 18, 19. They are the

sections dealing with what vessel you may arrest if

you have a general maritime claim. And although

they are better drafted they are broadly similar to

the provisions one finds in the overseas

legislation and the word "owner" is used

everywhere. Take section 17, for example:

Ship(2) 21 1/3/94

Where, in relation to a general maritime claim

concerning a ship ..... a relevant person: That is a person who would be liable if sued in

personam - there is a definition in section 3. so,

a person who would be liable personally:

(a) was, when the cause of action arose, the

owner ..... 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 ..... against the ship or property.

I will mention some authorities in a moment,

but we respectfully submit that it is clear that

the word "oter" there does not refer to a cestui

que trust, or two reasons: one is that the natural

meaning of he word "owner" is it refers to owners

of ships in the ordinary accepted way. As I said

earlier, one becomes the owner of a ship by having

the ship built for one, by a bill of sale, by

transmission. But there is another much more

fundamental reason why that does not refer to the

interest of a cestui. que .tr.ust.. As one knows from

reading the Law Reform Commission Report, or as one
knows from reading Mr Justice Menzies' decision in

"Lastrigoni", the thinking behind sections like

section 17 is that to arrest a person's ship, the

person has to be a relevant person, the person has

to be somebody whom you could sue in personam.

A person who you can sue in personam will

frequently be the owner who will have done

something personally, or through the master or

through some other agent. It would be a very rare

case where the relevant person referred to in

section 17, the person who would be liable in an

action in personam, would be a beneficiary under a

trust. That is the fundamental reason why an owner

in section 17, 18, 19 would not refer to somebody

with an interest under a trust.

It may be possible to think of a rare

situation where such a person could be sued in

personam, perhaps the Foong Tai case to which I

will refer in a moment is one such case, but it is

very very rare. When one bears in mind that

fundamental conception and what the Law Reform

Commission said at paragraph 138, we submit it is clearly beyond argument that "owner" in section 17,

18, 19 at any rate, does not refer to the

beneficiary of a trust. If that is what "owner"

(' ·_1r,.	ti .	means in those central provisions of the Act - it
V ~	is not as if we are finding some provision tucked
Ship(2)	22	1/3/94

down the back - it is very likely, we submit, that

"ownership" has a corresponding meaning in

4(2)(a)(ii) and in 4(2)(b), and a fortiori that

"co-owner" has a corresponding meaning in 4(2)(b).

Secondly, in understanding words like

"ownership" and "co-owner", we submit that one

should always bear in mind the way the word "owner" -
is used in sections 17, 18, 19. They are the

sections dealing with what vessel you may arrest if

you have a general maritime claim. And although

they are better drafted they are broadly similar to

the provisions one finds in the overseas

legislation and the word "owner" is used

everywhere. Take section 17, for example:

Where, in relation to a general maritime claim

concerning a ship ..... a relevant person: That is a person who would be liable if sued in

personarn - there is a definition in section 3. So,

a person who would be liable personally:

(a) was, whe~ the cause of action arose, the

owner ..... 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 ..... against the ship or property.

I will mention some authorities in a moment,

but we respectfully submit that it is clear that

the word "oler" there does not refer to a cestui

que trust, or two reasons: one is that the natural

meaning of he word "owner" is it refers to owners

of ships in the ordinary accepted way. As I said

earlier, one becomes the owner of a ship by having

the ship built for one, by a bill of sale, by transmission. But there is another much more

fundamental reason why that does not refer to the
interest of a cestui que trust.	As one knows from

reading the Law Reform Commission Report, or as one
knows from reading Mr Justice Menzies' decision in

"Lastrigoni", the thinking behind sections like

section 17 is that to arrest a person's ship, the

person has to be a relevant person, the person has

to be somebody whom you could sue in personarn.

A person who you can sue in personarn will

frequently be the owner who will have done

something personally, or through the master or

through some other agent. It would be a very rare

case where the relevant person referred to in

section 17, the person who would be liable in an

action in personarn, would be a beneficiary under a

Ship(2) 23 1/3/94

trust. That is the fundamental reason why an owner

in section 17, 18, 19 would not refer to somebody

with an interest under a trust.

It may be possible to think of a rare situation where such a person could be sued in

personam, perhaps the Foong Tai case to which I

will refer in a moment is one such case, but it is

very very rare. When one bears in mind that

fundamental conception and what the Law Reform

Commission said at paragraph 138, we submit it is clearly beyond argument that "owner" in section 17,

18, 19 at any rate, does not refer to the

beneficiary of a trust. If that is what "owner"

means in those central provisions of the Act - it

is not as if we are finding some provision tucked

down the back - it is very likely, we submit, that

"ownership" has a corresponding meaning in

4(2)(a)(ii) and in 4(2)(b), and a fortiori that

"co-owner" has a corresponding meaning in 4(2)(b).

-

Your Honours, having worked all that out, we

discovered that the English Court of Appeal had so

held in relation to the English equivalent of

section 17.	I simply give the Court the reference
and I will add one comment about it.	The decision

is called "The .Evpo Agnic", ( 1988) 1 WLR 1090, at

pages 1095 to 1096. The House of Lords refused

leave to appeal; that is reported at (1989)

1 WLR 127.

The Master of the Rolls gave three reasons for

rejecting the suggestion that "owner", in the

corresponding words of the United Kingdom Act,

would include an equitable owner. The first reason

turns on wording in the United Kingdom Act which we

have deliberately not copied. I say deliberately,

because the Law Reform Commission refers to the

words and it is quite deliberate.

The other two reasons: one of them is directly applicable; the other refers to the arrest

convention; the United Kingdom is a party, we are

not a party, but obviously one can look at the

arrest convention, because the Law Reform

Commission did.

We were very pleased with ourselves for finding this case, although rather less pleased

that we found it on Sunday night, and then on

Monday, quite coincidentally I had asked my

instructing solicitor - it turned out that it was a

true coincidence - we discovered an unreported

contrary decision of the Singapore Court of Appeal,

which we have provided to the Court and which again

I do not wish to read to the Court, especially as it is very hard to read, but it is called Pacific

Ship(2) 24 1/3/94

Navigation Company Private Limited v The Owners of

the Ship "Mariana", which is reported in Lloyd's

Maritime Law Newsletter No 361 of 4 September 1993.

The Singapore Court of Appeal referred to

"The Evpo Agnic", said it was an obiter dictum,

said it was too narrow a view of the meaning of the

word "owner" in the Singapore provision

corresponding to our section 17. There is perhaps
one paragraph I should read, just to invite

Your Honours to notice something about it: on the second page of the fax, left-hand column, 15 lines

from the bottom, the Singapore Court says, the word

"owner" in the equivalent that goes back to

section 17, "meant a person who was vested with

such ownership as to have the right to sell,

dispose of or alienate the ship, such an owner

might or might not be the registered or legal owner

depending on the circumstances. A beneficial owner

clearly came within the meaning of the term".

Of course, that would not be true here,

because clause 4 of the joint venture agreement

shows that the re~pondent does not have the right

to sell the vessel. So that, for that rather

tortuous reason, the Singapore Court would probably

agree, at least with the s.ubmission that I am

making.

But we invite the Court not so much to prefer

"The Evpo Agnic" to the Singapore decision or vice

versa as to approach the matter as a matter of a

new Australian Act, well and intelligibly drafted

and above all as a matter of principle. The

prin.::iple being that the references to "owner" are

tied in with the concept of a person who would be

liable in an action in personam.

BRENNAN J:  You do not rely on the choice of law provision

in the joint venture agreement?

MR CALLAWAY: Unless something has escaped me, we do not,

Your Honour, no.

BRENNAN J:  I must interrupt you for a moment to ask you why

it is, if your first argument is right, the present

claim does not fall under section 17?

MR CALLAWAY: Because, Your Honour, first one has to

identify a cause of action in section 4 and then,

and only then, can one use part 3. So that 17, for

example, "Where, in relation to a general maritime

claim", so that one has to find a general maritime

claim in section 4(3) before you can use the

facility of arrest in section 17.

BRENNAN J:  So this is not a general maritime claim?

Ship(2) 25 1/3/94

MR CALLAWAY:  No, Your Honour, and the respondent does not

say that it is either. That is at page 8 of the

appeal book and it is the way the case has been

conducted, certainly in the Full Court. But, the

answer to Your Honour's question is the link back

to - - -

BRENNAN J: Yes, yes.

MR CALLAWAY:  Your Honours, I said earlier this morning in

answer to a question by one of Your Honours

something about the nature of ownership of ships.

I think I said that it was a morass. I said there

was a recent Australian decision which provides

some firm stepping-stones through the morass. It

is a decision of Mr Justice Bollen in the Supreme

Court of South Australia. It is a tax case. It is

called Ontario Ltd v Commissioner for Stamps,

(1990) 90 ATC 4145. The conclusion His Honour

reaches is expressed at page 4150 and His Honour
reached the conclusion, which we respectfully

adopt, that registration is not necessary to give

legal title. Legal title in the case of a sale

passes by virtue of the bill of sale. There are
cases going both ways, but that seems to be the

right analysis as a matter of principle.

As an example of a case going the other way,

there is the decision of Justice Mitchell in the

South Australian Court called "The Bosna", (1977)

19 SASR 112, especially at 114 to 115. On the

other hand, Mr Justice Bollen's conclusion, apart

from being supported by the matters to which
His Honour refers, we would also draw support from

a case called Hughes v Sutherland - I noticed it was on my learned friend's list of authorities -

(1881) 4 Asp ML 459, where the divisional court

clearly recognizes that one can have legal title

without being on the register, and that must be so.

Now, that is all about ownership and partly

co-owners. If it were necessary - of course we

submit it is not - but if it were necessary to

decide whether the word, "co-owners" in

section 4(2)(b) includes equitable co-owners, we

submit that it does not, mainly for the reasons I

have already outlined to the Court, that it should

be read conformably with the word "owner" in

sections 17, 18, 19. It would be very odd if 17,

18, 19 referred to the owner in the ordinary

acceptation, and 4(2)(b) was out on its own

referring to beneficiaries of trusts. Again, we

invite the Court to construe the Act as drafted

without being too troubled about the pre-existing

19th century law.

Ship(2) 26 1/2/94

But, it is only right to mention to

Your Honours that section 4(2)(b) and section 33,

which connects with it the provision for sale of the ship, are obviously inspired by section 8 of the Admiralty Court Act 1861, and I would, as

briefly, take the Court to the Admiralty Court Act

because I think it is probably easier and faster to

make the submission with the Act available.

Section 8 of that Act said:

The high court of admiralty -

and one will see the similarity of the words, first

with 4(2)(b) and then with section 33:

The high court of admiralty shall have

jurisdiction to decide all questions arising

between the co-owners, or any of them~

touching the ownership, possession, employment

and earnings of any ship registered at any

port in England or Wales, or any share

thereof, and may settle all accounts

outstanding and unsettled between the parties

in relation ~hereto, and may direct the said

ship or any share thereof to be sold, and may

make such order in the premises as to it shall

seem fit.

So, it would obviously be interesting, and may I just draw Your Honours' attention to also

sections 5 and 6 which deal with certain admiralty

claims but say you cannot bring them in admiralty

if an -

owner or part owner of the ship is domiciled

in England or Wales:

section 5 line 5, section 6 line 8, or thereabouts.

It would obviously be interesting if one could find

an authoritative decision as to what co-owners

meant in section 8 of the Admiralty Court Act 1861.

My !·earned friends may have had better success.

All we are aware of are two contrary dicta.

Mr Justice Gummow referred to a first instance

decision of the Bonnie Kate at page 153 of the

appeal book. We deliberately not troubled the is simply a dictum of the learned judge in the

course of the argument to the effect that

His Lordship thinks that it is unlikely that co-

owners means other than the legal co-owners.

On the other hand there is a contrary dictum,

and it is clearly an opposite dictum, but

nevertheless Your Honours should know about it. It

is a contrary dictum of the Privy Council in

Ship(2) 27 1/2/94

Foong Tai & Co v Suchheister & Co, (1908) AC 458

and the dictum is at page 468 point 4.

On its own it rea'lly does not advance it very

much. The Foong Tai case, although it was applied

by Justice Mitchell in The Sosna, a decision which

is inconsistent with Ontario, and we respectfully

submit - it was not inconsistent with Ontario.	The
decision is consistent, Her Honour's reasoning
might suggest a difference. Although it was
applied in The Sosna, it is a very peculiar case
and it has always been recognized as a very

peculiar case. It was referred to by close to saying it should be confined to its facts,

and in our submission, it should be confined to its

facts. Lastrigoni is Shell Oil Co v The Ship

"Lastrigoni", which His Honour decided in 1974. It

is reported in 131 CLR at page 1 and His Honour

referred to it at page 6.	It is a very strange
case, with respect.	I do not mean any disrespect
to those who wrote the advice.	It stands outside
the mainstream of admiralty.

Apart from the dictum about co-owner, the

"Foong Tai" case appears to reject the fundamental

proposition that you have to identify a relevant person or, broadly, that the owner has to be the
person who would have been sued in personam. That

is what Mr Justice Menzies decided in "Lastrigoni" and that is why His Honour was troubled by "Foong

Tai". It seems to have been decided on a pure

equity basis as if it were an equity case and not
an admiralty case.

At paragraph 8 of the outline, the conclusion for which we contend on whichever of our arguments

can be reached simply as a matter of construction

without any need to refer to the Constitution or

the United Kingdom or other overseas legislation or
to the Arrest Convention. If one does refer to

those sources, they are either neutral or, to some degree, supportive of the submissions that we have

been making. It is appropriate to refer to them

because the Law Reform Commission frequently
referred to the United Kingdom Act and the arrest

convention, for example, at the references we have

given in paragraph 8. Another reference would be

paragraph 208 but it would not be difficult to find

them scattered throughout the report.

The New Zealand Act is similar to the United

Kingdom Act. It is not the same but it is similar

and there is probably no material difference for

present purposes. So that this morning all I need

do is ask Your Honours briefly to look at the

Ship(2) 28 1/3/94

United Kingdom Act and then at the arrest

convention.	The most convenient way of finding all
these things is in Mr Hetherington's book.	The

Attorney-General for the Commonwealth has provided

materials which include the United Kingdom Act, I

think at page 265 of the Attorney's larger book of

materials.

The present United Kingdom Act is the Act of

1981 and in section 20(2) one finds the list of

claims and causes of action that corresponds to our

section 4, and (a), (b), (c) are the equivalent of

our 4(2)(a) and (b). Then in section 21 one finds

the provisions which are broadly correspondent with

our sections 17, 18, 19 as to what ship you can

arrest. Your Honours will see in section 21(2) a

provision in effect like our section 16 saying that

in the case of what we would call a proprietary

maritime claim, one proceeds only against the ship

concerned, because when one goes down to section

21(4), surrogate ship arrest, or sister ship
arrest, is permitted only in relation to what we
would call the general maritime claims. So that

the dichotomy drawn in the Australian legislation

is consistent with the distinction drawn, though

not as clearly, in the United Kingdom legislation

and other overseas iegi.slation.

Similarly in the 1952 Arrest Convention which is also in Mr Hetherington's book, but also in the material supplied by the Attorney-General at

page 304, Article 1(1) of the convention has a list

of maritime claims similar to - not the same, but it is the same concept of having a list of claims

just as we have a list of claims in section 4 and

what we would call "proprietary maritime claims"

are at the end this time, unlike the English Act,

they are (o), (p) and (q); and again in

Article 3(1) one finds the same distinction that if

it is what we would call a proprietary claim you

could only arrest the ship concerned. If it is

what we would call a general claim you can arrest a

sister ship - all to be expected as a matter of

principle.

Your Honours, there is one other matter we

draw to the Court's attention in the Arrest

Convention. Article 1(4) defines a "claimant" as -

a person who alleges that a maritime claim

exists in his favour -

entirely consistent with what this Court said in

"Talabot". And that, of course, is true of a

general maritime claim.	One asserts a claim in
one's favour. If breach	of a contract to sell a

Ship(2) 29 1/3/94

ship had been in section 4(3) not only could the

plaintiff have brought his claim as a general
maritime claim, but the plaintiff would have said,

"I am asserting a claim belonging to me, a

contractual claim." When it is looked at through

the lens of contracts it all makes sense. It is

when it is looked at through the lens of property

as the respondent has to do, that it becomes

distorted.

I have presented the argument on this branch

of the case this morning on the assumption that

Lord Keith's interpretation of "in relation to" in
the Gatoil case is an acceptable way to interpret

"relating to" in 4(2)(a). Even if it is, it does

not affect the argument that I have been

respectfully submitting to Your Honours. But there

is a footnote, a few very short footnotes, that I

would like to add because it might not be the way

to approach it.

The first footnote is that in all probability

the use of "relating to" is a kind of drafting

accident because the draftsman wanted to put

mortgages (iii) and (iv) together with possession

and title. If one compares the language with the

United Kingdom Act, had the draftsman split up paragraph (a) probably one would have found that it

would have first set a claim to possession or
title, and then a claim relating to or in respect

of a mortgage. But the draftsman obviously thought

it convenient to deal with possession, title and

mortgage in one paragraph, and once you do that you

cannot very well talk about a claim to a mortgage. That is doubtless the true reason for what it may be worth why "relating to" has been used.

Reading the Law Reform Commission report, especially paragraphs 149 and 150 where they deal

with this head, there is no earth-shattering

suggestion that the intention was to broaden the

overseas precedent. The intention probably was to

cover claims to possession and claims to title.

But be that as it may, there are other available

Mr Justice Davies was conscious of that and	interpretations of words like "relating to".
referred in his judgment to Hatfield v
Health Insurance Commission. It is in the
authorized reports. It is (1987) 15 FCR 487 at
491. The main passage is at 491, the first half of the page 491 point 1 to point 5 where - it is an
earlier judgment of Mr Justice Davies, and
His Honour collects some of the authorities
including, from recollection, a judgment of
Your Honour Justice Deane sitting in the
Federal Court.

1/3/94

~hip(2) 30

But even on what we would say is the rather

broad view that Lord Keith took, it does not

detract from our argument. But it may be that a

rather narrower view should be taken of relating

to, especially as those words are connected to

possession and title. It may be there is a more

direct and immediate relationship is contemplated

on the true construction of (a)(i) and (a)(ii) and

possibly (a)(iii) and (iv) as well.

Your Honours, the last paragraph of our submission on this branch o_f the case, paragraph 9,

really does speak for itself. We have referred to

paragraph 94 of the Law Reform Commission report.

Again it is not the only reference. The Law Reform

Commission was obviously very concerned that the

Australian Act should be internationally

acceptable. One sees other indications to that

effect at paragraph 136 and paragraph 208, and so

was the government. I do not ask Your Honours to

go to it now, but these materials have been

provided in the second reading speech, the last

sentence of the seventh paragraph and in the

explanatory memorandum, the first sentence of the

first paragraph.· Both refer to internationally

acceptable standards.

The other two footnotes are really quite

simple points. Admiralty jurisdiction is unique in

many ways. It is a most drastic jurisdiction. It

enables the courts of the forum to exercise

jurisdiction where there is no connection whatever

but temporary presence, and of course it has to be

remembered there is no undertaking in damages. It

is a very drastic remedy indeed. It is true that

there is now a new statutory cause of action for

unreasonable arrest in section 34, but that is not

nearly as valuable as the undertaking in damages

which is given if one asks for an interlocutory

injunction.

The other footnote, really a small point, there is a limited analogue with service out of the

jurisdiction. It is a limited analogue in more

ways than one. One reason is the reason to which I

have just adverted; that service out of the

jurisdiction is a far less Draconian assertion of
jurisdiction over foreigners than arresting a ship

that comes into Australian waters. But even in the

context of "service out", the Court is alert not to

exceed the bounds of international comity. One

authority to that effect is "The Siskina", (1979)

AC 210 at 254 point 9 to 255 point 1.

If the Court pleases, that brings me to the

Constitution. Section 13 of the Act is a severance or reading down clause and is so described in the

Ship(2) 31 1/3/94

that is not of a kind mentioned in

explanatory memorandum, making it clear that the matter

paragraph 76(ii) or 76(iii1. This case is not a

section 76(ii) case. So far as this case is

concerned, the Act is intended as an exercise of

power under section 76(iii) and no doubt, if

necessary, section Sl(xxxix). There are other
references to admiralty and maritime jurisdiction

showing the intention to take advantage of the

power in section 76(iii), and we have mentioned

them in our outline, the long title, and

sections 12 and 14.
Your Honours know that these words in

section 76(iii) are modelled on, practically taken
from, Article III 2 of the United States

Constitution. The burning issue has always been

what force to give to the word "maritime" of

admiralty and maritime jurisdiction.	We accept
that those words are not surplusage.	We accept

that they are there to free the constitutional

power of the narrow restrictions on English

admiralty jurisdiction and to obviate arguments

along the lines that the controversies between the

common lawyers and the admiralty lawyers can be

imported into the understanding of 76(iii).

Generally speaking, we therefore accept what

was said by Justice Story in De Lovio v Boit, the

locus classicus in American law, about "maritime"

being put in for just that purpose. Though we have given the citation, I do not ask Your Honours to go

to it now. The relevant passage is in fact set out

in Mr Justice Gurnrnow's judgment at pages 165 to

166. So then I ask rhetorically: what does

maritime mean? I answer by way of submission that

the Court should not define the word "maritime" in

this case and that it is unnecessary to do so.

There are a number of reasons why we submit

that is the wrong approach to interpreting

section 76(iii), probably in any case, but at least
in this case.	One can never substitute a

definition for the words of the Constitution.

There is always a danger that if one tries to, one

detracts from the Constitution because one's mind

is on the particular problems of the case and

therefore it is understandable if one proffers a

definition which is not as good as the Constitution

because, unlike the Constitution, it will not last

for all time.

It is illustrated in this case.

Mr Justice Gurnrnow proffered a definition at

page 171, line 10:

Ship(2) 32 1/3/94

controversies relating to or dealing with the

commerce or navigation of the sea, including

the means by which or with the assistance of

which those activities are or may be

conducted.

The second limb of that may be too broad, because

that rather suggests that a ship financing

agreement would be maritime, which does not matter,

but it probably would not be. It means by the

assistance of which commerce on the sea is carried

on. The Full Court left those words out.

Mr Justice Lockhart proffers a very similar, they

are not the same definition, at the top of

page 223:

JI matters arising from disputations relating to
or dealing with commerce and navigation on the
sea.

But, of course, that would not include the criminal jurisdiction of the admiralty, and it

would not include the prize jurisdiction. I do not

say that make a cheap point - it illustrates the

danger of unnecessarily proffering a definition

when one's mind is on a particular case. It might

not cover all the maritime torts, one can multiply

examples. That is the first reason. The second

reason is this: in "The Kalibia" three members of

this Court expressed the view that section 76(iii)

does not confer power to legislate substantively.

For example, the Commonwealth cannot use section 76(iii) to pass a law about salvage or

collision.

For reasons I will come to in a moment, it is

almost certainly unnecessary to decide the

correctness or otherwise of that in this case, but

the view that one took of that might well inform

one's opinion of the meaning of the word

"maritime". If one took the view that "The

Kalibia" was wrong and that the constitutional

grant of power in 76(iii) meant that the

Commonwealth could make substantive laws about all

maritime topics, that would clearly be a relevant

consideration in deciding what is meant by

admiralty and maritime jurisdiction. It does not

arise in this case - another reason not to proffer

a definition. And one's view might well turn on

whether one was an adherent of the proceduralist or

the personification theory ot the action in rem

referred to by the Law Reform Commission at

page 17.

Again, that would arise if this were a general

maritime claim, but it does not arise because it is

a proprietary maritime claim. One might even want

Ship(2) 33 1/3/94

to take into account section Sl(x), fisheries and
the three mile limit, Bonser v La Macchia, Raptis

in South Australia, in determining what "maritime"

means. None of that is necessary ~n this case.	It
is a composite expression.	The question is not

what "maritime" means, the question is what is
meant by "admiralty and maritime jurisdiction".

However wide the word "maritime" we will be

submitting in a few moments that this case is not

within admiralty and maritime jurisdiction.

In our outline, 11.1, consistently with what

we are saying, we have invited the Court not to

follow the narrow view of section 76(iii)

Mr Justice Isaacs favoured in "The Katherine

Mackall". Because it is so frequently referred to,

and referred to in the court~ below and referred to

in all the writings on the subject, might I ask

Your Honours just briefly to go to the case - I do

not propose to read the passage, it is rather

long - just so that I could make two or three

submissions about it. In this I am sure I will be

supported by my learned friend, the

Solicitor-General for the Commonwealth.	"The
Katherine Mackall-,,, ( 1924) 34 CLR 420, and

His Honour's celebrated dictum is at page 427

point 5. His Honour begins by making it clear that

it is an obiter dictum. His Honour says that:

it is not necessary now to pronounce an

opinion".

And His Honour then invites rejection of the
American doctrine in De Lovio v Boit, referring to

English 19th century cases, which had rejected

De Lovio v Boit, but as Mr Justice Gummow says, it

is one thing for the English courts to reject

De Lovio v Boit as a guide to admiralty

jurisdiction in England or even admiralty

jurisdiction, it is another thing altogether to

reject De Lovio v Boit as a guide to interpreting

the· grant of constitutional power. And then on

page 428 His Honour gives reasons for adopting a

narrow traditional British jurisdictional

interpretation of section 76(iii); we respectfully

invite the Court not to take that course.

There is one last matter about 428.

Your Honours, it is a point which, if I am right,

has usually been overlooked in commentary on this

passage. His Honour says, at about line 12:

If it became necessary to determine this case

upon section 76(iii) of the Constitution and

section 30(b) of the Judiciary Act, there are

some very difficult qluestions to answer.

They are not inevitable questions in this

Ship(2) 34 1/3/94

case, and the Constitution (by section Sl(i)

and (xxxix) and section 98) undoubtedly gives
great scope for relevant legislation. It is

not, therefore, to be supposed the

constitutional powers to confer jurisdiction

on this Court in matters of admiralty and

maritime law -

not jurisdiction, law -

is a power in respect of merely a stereotyped
common law admiralty jurisdiction -

That passage is frequently, usually read, as announcing that section 76(iii), though fairly narrow, is wider than traditional admiralty ~11risdiction, but it is submitted that what

His Honour was saying was that the Parliament could

confer jurisdiction in respect of a range of

matters wider than admiralty, because it could rely

also on section Sl(i) and of course,
section 76(ii), which is partly what the Parliament

has done in the Admiralty Act in referring to

section 76(ii). The critical word is "maritime

law". That passa·ge is often lifted out of context

without the words that precede it.

So Your Honours, we are on the side of the angels in that regard. We do not invite the Court

to take a narrow or an unduly historical view of

the words, although as recently as 1979

Mr Justice Stephen in China Ocean deliberately left

open the possibility that limitation proceedings

might not be admiralty. Limitation proceedings, of

course, are purely statutory and were originally

given to the Court at Chancery.

We respectfully invite the Court to interpret

"maritime" as expansive of admiralty and to give it

a broad meaning not limited by any considerations

that would lead to a list of causes of action.	Our
case is not that you cannot find this cause of

action in some admiralty text book. What we submit is that you have to give as

much force to the collocation of maritime with the

words "admiralty" and "jurisdiction" as to the fact

that it has an expansive effect, and our submission

is in paragraph 12. I will come back to

paragraph 11 to keep the logic of the argument.

Our submission is that the vindication in rem of a

third party's title is repugnant to the whole

conception of admiralty jurisdiction in rem. It is

not that you cannot find it in a shopping list of

causes of action. It is just a plant in a

collection of zoological specimens. It is foreign

to admiralty jurisdiction; and further, or

Ship(2) 35 1/3/94

to admiralty jurisdiction; and further, or

alternatively, t_hat specific performance in rem is

foreign to admiralty jurisdiction however widely
one expands the list of causes of action. Perhaps
one can expand the list of causes of actions of

breaches of contract for the sale of a ship.

However widely one expands causes of action, it

will always startle anyone familiar with admiralty

jurisdiction that you can assert a proprietary

claim in relation to a third party's title or

proceed in rem to ask the specific performance.	If
we are right in submitting that that is foreign to

admiralty jurisdiction, it necessarily follows that

it is equally foreign to admiralty and maritime

jurisdiction. I may say that that would be true

whether one took the connotation of the words at

1900 or now. This claim is foreign .o any

conception of admiralty jurisdiction in rem.	We
are not concerned with in personam.

So our submission is that to permit the

respondent to proceed in rem on a claim like this

would be outside the constitutional power conferred

by section 76(iiiJ, and therefore if

section 4(2)(a) and (b) extended to the claim but

for section 13, they would have to be read down.

Our primary submission, of course, is that it

should not be read that way anyway, but I am now on

to the second branch of our case.

BRENNAN J:  Mr Callaway, how far does this submission take

you? Take the case of a contract for the purchase

and sale of a ship and the terms of the contract

are that the ship and its shares will be

transferred to the purchaser or the purchaser's

nominee, and the purchaser before the date of

completion makes a nomination, is the contract not

susceptible of specific performance in this

jurisdiction?

MR CALLAWAY:  Not by admiralty action in rem, Your Honour,

because the court must first acquire jurisdiction

before it can use provisions like section 22.

Despite what Mr Justice Brandon said in "The Conoco

Britannia", if one thinks of a case where no appearance is ever entered, all the ship has is the

res. That works if the plaintiff is asserting its

own claim because you could hand over the res to

the plaintiff and it works with a general maritime

claim because you sell the res and you use the

proceeds to satisfy the claim in contract or tort

or whatever. But it is very hard to see how you

can decree specific performance if all you have is

the res. That is the difficulty.

Your Honours, I had moved on deliberately to

paragraph 12. If I may come back for a moment to

Ship(2) 36 1/3/94

paragraph 11. 2. Al though we embrace De Lovio v

Boit at least as regards the expansive view of

"maritime", it is certainly unnecessary in this

case to consider whether section 76(iii) extends to

inland .waters. That is another branch of the

American doctrine. It does not arise on the facts

of this case. Section 5(3) and (4) show that Parliament has not purported to legislate for inland waters except in one limited circumstance

that is not relevant here. The reference to Re

Garnett is simply a reference to an American case

dealing with inland waters.

The reason we say probably unnecessary to

decide whether it confers power to legislate

substantively is this. I have a moment ago put to

the Court the submission which we respectfully make

about admiralty and maritime jurisdiction. There

is another argument which I gather in one form or

another was propounded in the courts below, and it

takes two forms. They are close cousins and they

go along these lines, that the first form is to say

it is elementary that a cause of action in rem is

different from a cause of action in personam. So

that, for example, a judgment in personam does not

prevent proceedings in rem and vice versa. That is

undoubtedly correct~

Then the argument says accordingly, if

Parliament under 76(iii), unsupported by any other

power except the incidental power, expands the list

of causes of action in respect of which you can

proceed in rem, it must be creating new causes of

action because, although they previously existed,

they are now in rem. The argument then says that

is substantive. "The Kalibia" says you cannot

legislative substantively. Unless encouraged by

Your Honours, I am reluctant to press that argument

on the Court. It is hard to believe Their Honours

meant that in "The Kalibia" and it would emasculate

section 76(iii).

We submit Their Honours meant you cannot make a law about salvage or collision or seamens' wages
or something like that.	The other version of the

argument is that section 6 of the Act says that it does not create any new causes of action. So that

if you expand the range of causes of action in

respect of which you can proceed in rem antj you

then say correctly, they are new causes of action,

section 6 causes the Act the self-destruct.	I am
reluctant to press that argument on the Court

either, because it could not be what Parliament

intended.

I must say I am sure that this argument was

put more persuasively below by the very experienced

Ship(2) 37 1/3/94

senior counsel who preceded me and it is probably

my fault for not understanding the argument
properly, but this morning; unless encouraged by

Court otherwise, I am content to put the argument

the way I have in paragraph 1,. I am in good

company, because in "The Regis", Mr Justice Dixon

took the view that section 76(iii) and the

incidental power might well permit the creation of

a new cause of action in rem.

Your Honours, that conclusion accords with

what the result would be in the United States. In

the United States there are two reasons why this

claim would be outside the admiralty jurisdiction

and outside the constitutional power. Your Honour

Justice Gaudron asked me at the special leave day

whether the limitation in America flowed from the terms of the constitutional grant or the terms of the statute giving jurisdiction to the federal

courts. I correctly answered Your Honour that it

flows from the constitutional power because the

words of the constitution are then used in the

Judiciary Act 1789 which gave the constitutional

power. They have since been replaced by other

words but, in effect, the constitutional words are

mirrored in the legislation giving jurisdiction.

·The Americans reached this conclusion by two

quite separate routes. One is that the Admiralty

Court has no jurisdiction to grant specific performance. Well, with respect, that is correct

and that supports our paragraph 5. The other basis

is that the American authorities are to the effect

that a ship sale contract is not a maritime

contract. One authority we have given in the
outline is Richard Bertram & Co v The Yacht Wanda.

That has been much criticized in the United States.

Some of the criticism is in materials that the

Attorney-General for the Commonwealth has provided.

Other criticism is in an article from the Stanford

Law Review which we have provided.

In the Antares case Mr Justice Ritchie doctrine at page 296 point 3. It would be an referred to the criticism in America of this

irresponsible submission on our part to suggest

that this Court should adopt a view of the American

Constitution which is rapidly falling into disfavour in that country, which is no part of our case to promote. After all, Antares is right. If

I buy a ship, I can bring a proprietary claim for

the ship. I am asserting my proprietary claim.

That would be a ship sale contract. The American

courts would say it is not a maritime contract. It

is very difficult to see why it is not under our

law.

Ship(2) 38 1/3/94

The only thing I would add is this: the

American doctrin_e might be right for other reasons

in this country in relation to general maritime

claims. Mercifully, that does not arise in this

case, but the reason the American doctrine might be

right in relation to general maritime claims is

this: if one adopted or at least placed enough

emphasis on the personification theory of the

action in rem that would restrict the range of

causes of action that could be sensibly included in

section 4(3). One would always have to ask of a

cause of action, "Can we visualize the ship as the

defendant, if only in a very loose sense? Can we

imagine the ship as the defendant causing some

detriment?" Or, "Can we imagine the ship as the

defendant receiving some benefit?"

The personification theory would make it very

difficult to include a ship sale contract in
section 4(3), but not the same difficulty in 4(2)

so long as the plaintiff is asserting his own

claims. It would make it very difficult to put a

ship sale contract in 4(3) and, of course, the

Parliament has no~ done so. But, it brings us back

full circle. The reason, Your Honours, why this

case is so very interesting, is that the

respondent's rather unusual claim is a well nigh

perfect vehicle for articulating the difference

between a proprietary maritime claim and a general

maritime claim. Even the constitutional

considerations might be different if there had been

an item breach of contract for the sale of a ship.

Your Honours, I will not resile from the

promise not to develop paragraphs 14 and following

on the burden of proof issue. It is so important,

as a practical matter - the industry might well say

it is the most important point -	it is important
as a practical matter.	Even if the Court decided

in our favour on the first or second issue,.it is a

matter for the Court, but Your Honours might - in

the Court's discretion - think it appropriate to

decide the third issue any way, because otherwise

all Australian courts will be effectively bound by

the Vitkovice Horni test that the Full Court has

endorsed.

Your Honours, in the material that we have

provided we have included some extracts from

Roscoe's Admiralty Jurisdiction and Practice. What

we have provided is chapter I dealing with the sort of claims that are now in 4(2)(a) and (b). We have also provided page 284 because of a reference made

to the old practice at point 6 of the page. There

is a misprint in Roscoe, and I just thought I would

mention to the Court what it should say.	The
learned author refers to a case called:

Ship(2) 39 1/3/94

The Pieve Superiore -

which is said to be found in -

1874 5 PD 482 .

It should be 5 PC 482. There is no volume 5 PD.

And the earlier proceedings before the 4 LR, Ad and Ecc cases, at page 170.

Your Honours, unless there is something else

which, at this stage, I could say that might assist

the Court, those are our respectful submissions.

MASON CJ: Thank you, Mr Callaway. Mr Jackson.

MR JACKSON:	Your Honours, may I hand to the Court copies of our outline of submissions. Your Honours, a
heading appears to have been omitted between paragraphs 6 and 7; the heading relating to item l(b). The heading was simply, Admiralty Act section 6. But the matters under that heading do
not appear to be in issue in the light of our learned friend's submissions, although there is one
observation I wish to make in relation to them. Your Honours, may I commence by dealing with
the questions of statutory construction that are involved. Your Honours, the starting point is
section 16 of the Act.  May I take Your Honours to
that for just a moment.  What Your Honours will see
is that section 16 is the provision which permits
the commencement of an action in rem, if the
proceeding is a proceeding on• what is described as
a proprietary maritime claim.  Your Honours, the
provision conferring jurisdiction on the court is
section 10 and Your Honours will see its terms expressed in a relatively familiar way.
Your Honours, the term "proprietary maritime claim" is not a term which had a life before the
Act - our learned friend's submissions mentioned
that in passing - and what one sees from section 4,
is that the term "proprietary maritime claim" is a
term which is defined by the Act and it is defined
exhaustively. And may I just say in relation to it, Your Honours, that it is not itself a term of
definition; it is a term which is defined. And the
significance of that, Your Honours, is this, that the terms of section 4(2), for relevant purposes,
provide an exhaustive definition of what
constitutes a proprietary maritime claim and
because it is an exhaustive definition of a term
which is, in effect, relevantly created by the Act,
no colour is added by the use in the definition of the term "proprietary".

1/3/94

. Ship ( 2) 40

Your Honours, in that regard may I refer

Your Honours to some observations on the propriety

of giving colour to the meaning of a defined term,

an exhaustibly defined term, by use of the words

which are themselves defined, in Wacal Developments

Pty Ltd v Realty Developments Pty Ltd, (1978)

140 CLR 503, and in particular at page 507 at about

point 3 on the page, where Justice Gibbs, dealing
with the term "instalment" in the expression

"instalment contract" which was the term defined,

said:

First it was suggested that the word

"instalment t• in the expression "instalment contract" itself colours the meaning to be

given to the definition. With all respect it

is impermissible to construe a definition by

reference to the term defined -

and he proceeded to elaborate upon that in the next

sentence, Your Honours will there see. And

Your Honours, to the same effect are observations

by Justice Stephen at page 512 about point 7, by

Your Honour the Chief Justice at page 518 about

point 9, by Justice Murphy at page 522 about

point 7 and by Justice Aickin at page 528 point 9

going through to page 529 about point 1.

Now, Your Honours, the propositions referred to in those passages are ones which, in our

submission, are plainly correct in relation to a

term such as "proprietary maritime claim" which is

defined in an exhaustive way by the Act. Now,

Your Honours will have heard much of our learned

friend's ·submissions involve an underlying

assumption that the term "proprietary" gives some

kind of colour to what follows in the definition, to the nature of the claims that may be made. In

our submission that is, with respect, not the right

way to go about construing the enactment.

Your Honours, could I go first then to the

relevant provisions of section 4(2). The first

relevant provision is section 4(2)(a)(i), the

second being 4(2)(a)(ii). Now, Your Honours, the

requirement of the provisions is that the claim -

and Your Honours will see the word "claim" used in

the opening part of (a), the claim being a claim

relating to relevantly possession of a ship or

relating to relevantly title to or ownership of the

ship.

Now, Your Honours, one sees the use of the

term "related" and the term no doubt "relating to",

as with words like "in respect of" or "with respect

to", takes its meaning from its context and on

occasions the context sometimes, perhaps usually

Ship(2) 41 1/3/94

atypically, may give it a narrow meaning. But the

one thing that can be said in our submission in the

present context is that there is no special reason for treating the term "relating to" as meaning for example the term "for".

Your Honours, one sees in the opening words of

section 4(2)(a) the expression "a claim relating

to". One also sees the expression used in

paragraph (b) where what is spoken of is a claim

between co-owners of a ship "relating to" various

matters. If the legislature had intended to give a

narrower meaning to the term "relating to" than

that which one would ordinarily expect to apply,

then it would seem to have erred on the ground of

economy of expression in terms of our learned

friend's submissions on the meaning of

section 4(2)(a) in an excessive way. Your Honours,

there is not any particular reason why the term
"relating to" in paragraph 4(2)(a) should be read
as saying "for"; it simply does not say so.

The second thing we would submit about the

provisions of 4(2)(a) is this, that the term
"ownership of a ship" does not of itself convey any
notion that only legal rather than both legal and

beneficial ownership is contemplated.

Your Honours, if I might say so, and I will come

back to this a little later, since the middle of

the last century there has been statutory

recognition of the existence of equitable interest

in ships. That has been by the merchant shipping

Acts and I will give Your Honours the provisions

later. So there has been a statutory recognition

of the existence of equitable interest in ships.

True it may be that the practice of those engaged

in relation to shipping may have been to prefer to

divide the ship up into 64 legal parts and then

deal with those.

But there is a number of cases, and I will

come to some of them a little later, in which not

just has there been recognition by statute of the

existence of equitable interest in the ships, but

courts in admiralty jurisdiction have given effect

to equitable interests. Your Honours, also, if I

could again say this in passing, since the Supreme
Court of Judicature Act in England in 1873, the

admiralty court was no longer a court by itself; it
was a court which was part of the High Court of
Justice and which was required by the terms of that

Act to give effect to all claims, both legal and equitable, that have been made in the proceedings.

Your Honours, it was that court which was, I

suppose, in a sense the English model for an

admiralty court that existed at the time of

Federation.

Ship(2) 42 1/3/94

If I could pause at that point, if one looks

at the terms of section 4(2)(a), we would ask,

Your Honours, why is not a claim that a person is

entitled to have ownership of a ship transferred to

that person or transferred to some other person a

claim relating to, for example, ownership of that

ship? It would be perfectly possible for there to

be an agreement for construction of a ship and an

agreement that that ship upon construction be

transferred to a third party.	The agreement is
made between A and B.	There seems no reason at all

why an action by A to compel B to participate in

the acts necessary to ensure that ownership of the

ship was vested in C was not a claim by A relating

to title to the ship, relating to ownership of the

ship and, indeed in most cases, one would think

that it would be a claim relating to possession of
the ship as well.

Your Honours, the words of the provision apply, in our submission, exactly, and there is no

need as a matter of construction to read them down.

There are, in addition, several indications, in our submission, that no narrow view should be taken of

section 4(2)(a). Could I take Your Honours first

to the definition of "mortgage" in section 3,

subsection (i). Your Honours will see, it is at

page 3 of the pamphlet copy that I have,

Your Honours will see that it recognizes specifically that a mortgage in relation to a ship

includes various hypothecations, et cetera, whether

at law or in equity, and whether arising under the

law in force in Australia or elsewhere. So it

recognizes specifically that equitable claims are

contemplated by section 4(2)(a).

The second thing is that the terms of

section 4(2), if one looks at the matter broadly,

historically, seem to have as their more immediate

origins - I am sorry to use a slightly marshmallowy

term like that - but seem to have as their more

immediate origins the enactments which in the last

century were intended to extend the jurisdiction of

the Admiralty Court beyond the narrow view which

had been taken. The first of those Acts, if I

perhaps more conveniently, at page 228 of the Commonwealth's volume of materials. In section IV of that Act Your Honours will see, in effect, there in the Act in section IV it was the extension of

could take Your Honours to it for a moment, was the out,

jurisdiction was:

That the said Court of Admiralty shall have

jurisdiction to decide all questions as to the

title to or ownership of any ship or vessel,

Ship(2) 43 1/3/94

or the proceeds thereof remaining in the

registry, arising in any cause of possession -

et cetera. Your Honours, in relation to

section IV, that provision was considered by

Dr Lushington and the Admiralty Court in "The

Victoria", (1859) Swab. 407, 166 ER 1188. In that

case the issue which was determined was whether the

master of the vessel was the owner in equity of

four of the shares in the ship. The questions

which were to be determined were set out at the top

of page 1189 in the English Report and Your Honours

will see on about the fourth line on the page:

The questions for the decision of the Court

were:

1. Was Pearson -

that is, the master -

in fact the equitable owner of the four
shares? 2. If so, was he entitled to retain

possession of the ship?

If one goes from there to about point 8 on

page 1189 Your Honours will see in the penultimate

paragraph four lines from the bottom:

It is upon this conflicting evidence I have to

decide, and I have come to the conclusion

that, in point of fact, Pearson is the

equitable owner of these four shares. The

question of law then comes, whether he is

therefore entitled to hold possession of the

ship as against the legal owner of more than a

moiety.

Dr Lushington refers in the next paragraph to the former jurisdiction, then the enlargement of the

jurisdiction by the 1840 Act to which I have

referred, and then says at the bottom of the page:	but how far is the Court competent to enforce
rights of technical equity, such as trusts? I
need not give a complete answer to this
question.

Then Your Honours will see for the remainder of the

judgment effectively what he says is that he

thought it was clear that equitable rights could be

used as a shield if not as a sword, if I could use

more modern language. So, Your Honours, he held in

favour of the person who had the equitable right as

against the person who was claiming the legal

title.

Ship(2) 44 1/3/94

What that shows, if I could pause at that point, is that what was held in that case was that

the Court would recognize, perhaps not as much as a

court today might be prepared to do so, and give

effect to equitable defences to a claim.	So it
just cannot be right to say that under the

admiralty jurisdiction, at least the admiralty

jurisdiction conferred by the Act to which I have

so far referred, that equitable rights played no

part in relation to claims to possession of vessels
because, indeed, the jurisdiction given by the

provision was treated as extending to a recognition

of such a claim.

The narrower view as to the extent of

equitable recognition is one which Your Honours

might well think the ambit of the relevant

provision of the Act could not justify, and the

narrow view is an unduly conservative view of it.

But in any event, Your Honours, it gives the lie in

a sense to the notion that equitable interest would

not be recognized.

The next stage after that was a further

extension of jurisdiction, and that jurisdiction

came about by the Admiralty Court Act 1861,

section 8, to which Your Honours have already .been

referred by our learned friends. It is the

provision which is clearly enough the starting

point for section 4(2)(b) of the Australian Act.

It may be found at page 231 of the Commonwealth's

materials. Your Honours will see section 8 dealt

with:

jurisdiction to decide all questions arising

between co-owners, or any of them, touching

the ownership, possession, employment and

earnings of any ship -

et cetera.

Now, Your Honours, that provision, as has been

said, was given some passing consideration by

Mr Justice Butt in "The Bonnie Kate", (1877)

6 Asp MLC 149. Your Honours, all that was said in

relation to it appears at page 150, about point 4,

in the right column. The the whole decision,

however, in the case, which is very short, appears

to be one based on, what are fundamentally,

equitable principles.

Your Honours, if I could just give Your

Honours a reference to two further cases.	I will
take Your Honours to the first of them very

briefly. It is another decision of Dr Lushington

in "The Idas", (1863) 167 ER 300. Dr Lushington

refers to the fact that "some equitable

Ship(2) 45 1/3/94

jurisdiction is utilized in the taking of accounts

between co-owners". That appears, Your Honours, at

the bottom of page 302 in the last three lines and

in a passage which goes over for the next three or

four lines on the next page, where there is a clear

reference to the exercise of a jurisdiction which

in its nature is equitable in the taking of

accounts between co-owners. Your Honours, that was

followed in another decision, "The Lady of the

Lake", (1870) 3Ad and Ee 29 at page 32, and that

was another case in which an account was taken

after the ship had been actually lost.

Your Honours, a resulting trust was given

effect to by the Court of Appeal in "The Venture",

(1908) Asp MLC 93, and if I could take Your Honours

to that for a moment, that seems to have been a

case in which an equitable right was given effect

to. In the Court of Appeal Your Honours will see

in the headnote what had occurred. A claim for

possession, an action in rem for possession, had
been instituted by the administrator of a deceased

estate. The yacht was sold, and the only claimant

was a brother of the registered owner who claimed

that he had advanced part of the purchase money

and, in effect, claimed to be entitled to payment

out on the basis of there being .a resulting trust. The admiralty judge had held against him, and what

the court said was, pages 97 to 98, in the judgment

of Lord Justice Farwell - he referred to the nature

of a resulting trust, and at the top of page 98

about 7 or 8 lines down he referred to the words:

results to the man who advances the purchase-

money -

then goes on to say, about 10 lines down the page: Since trust and equities are now recognized,

and may be enforced under the Merchant

Shipping Acts, this principle extends to ships

that is the resulting trust principle -	although under the old Registry Acts it did
not.

The court found in favour of him on the basis of a

resulting trust to the money that had been obtained by the sale of the ship, that is, in effect, to the

ship.

Now, Your Honours would have noticed in that

case also a reference to the Merchant Shipping Act

and that is a matter for which I said before that I

should return. Could I mention, Your Honour, a

Ship(2) 46 1/3/94

matter I should have mentioned when dealing with reasons for judgment in that case, the first thing one sees in the headnote is that the person reporting it has referred to the provision of the
the first of those cases, and that was "The

Merchant Shipping Act, which is the provision which

provided for equitable interests in ships to be

recognized.

MASON CJ: Unfortunately, we do not seem to have a copy of

the report from which you are reading, Mr Jackson.

We have only got a reference in the list that was

handed to us of the 1908 Probate Report. I

understand the library did receive a reference to
the other report but the library was not able to

obtain it.

MR JACKSON:  I will get Your Honours a copy of the case.

MASON CJ: Thank you very much.

MR JACKSON:	I was going to give Your Honours a copy of the provision in the Merchant Shipping Act while I was
at it. would it be convenient to do that now or
after the adjournment?

MASON CJ: Yes.

MR JACKSON:	May I give that to Your Honours.
DEANE J:	The passages you were reading do not seem to be in

the Probate Report, is that right?

McHUGH J:	I think they are, I think they are at page 230.
MASON CJ:	230, are they?

McHUGH J: Yes, at the top of the page.

DEANE J: That is right, yes.

MR JACKSON:  Would this be a convenient time, Your Honours?

I expect to be about another hour.

MASON CJ:  Thank you. The Court will adjourn now and resume

at 2.15.

AT 12.47 PM LUNCHEON ADJOURNMENT

Ship(2)	47	1/3/94
UPON RESUMING AT 2.17 PM:
MASON CJ: Yes, Mr Jackson.
MR JACKSON:	Your Honours, if I could continue with the topic with which I was dealing.	I wish to mention

three further cases but take Your Honours to two of

them. The first of them is a case to which

Your Honours have been referred by my learned

friend. That is The "Bineta", (1966) 3 All ER 1007

where effectively there was an action for specific

performance of an agreement to purchase before

Mr Justice Brandon.

The second case and one to which Your Honours have not gone before is The "Abbeville", ( 1980)

1 LlLR 187, in which a declaration was sought and

made that the plaintiffs were the legal and

beneficial owners of the vessels in question which

were two landing craft. The purpose of seeking an

order in that form was to seek to exclude the

claims made by someone who might claim in effect as

a person with whom there had been a joint venture

to acquire the landing craft.

Could I take Your Honours to that case very

briefly. At page 187 Your Honours will see in the
bottom right column that the declaration that was

claimed was that they were the beneficial and legal

owners of the two landing craft. Without going

into the detail of the evidence in the case,

Your Honours will see at page 191 in the last

paragraph of the judgment of His Lordship he said:

For these reasons there must be judgment

for the plaintiffs who are entitled to a

declaration that they are the sole beneficial

owners and legal owners of the -

two vessels.

Your Honours, the last of the cases to which I

wish to refer is, if I may take Your Honours back

for just a moment to the decision of the

Supreme Court of Canada in Antares Shipping

Corporation v The ship "Capricorn", (1979) 111

DLR (3d) 289. Now, Your Honours, the discussion

relevantly goes in effect from pages 294 through to

the conclusion of the reasons for judgment. May I

mention a couple of passages in particular for

Your Honours. At page 295, half-way down the page,

there is a quotation from the judgment of

Mr Justice LeDain in the Court of Appeal and

Your Honours will see that he has set out the issue

Ship(2) 48 1/3/94

in the part that is italicized there.

Your Honours, at page 296 - - -

BRENNAN J:  What is a "petitory" action, Mr Jackson.

MR JACKSON: _I wish Your Honour had no~ asked me that; it is

defined somewhere and I have Just lost exactly

where it is.	It is at the bottom of page 295,
Your Honour.	Your Honours, I was going to go then

to page 296, commencing at the second new paragraph

on the page:

I have been unable to find any Canadian

authority.

And then, referring to:

the body of opinion in the United States
itself which does not subscribe to the
exclusion of the contract for the sale of a

ship from admiralty jurisdiction.

Then Your Honours, at page 296 again, the last

couple of paragraphs on the page, but in

particular, having referred to a preference for an

English view, there is then a reference to:

Roscoe's work on The Admiralty Jurisdiction

and Practice of High Court of Justice -

and in particular, Your Honours a reference to the

fact that a jurisdiction is now conferred:

to adjudicate upon all questions of title, and
wherever it became necessary it would inquire

into the validity of an alleged sale, or

concerning any other circumstances which

affected the right of the property in the

ship.

Your Honours, if I could just pause to say, the

circumstance one might think that would most often

affect the right to property in a ship would be a

contention that one person was, for example,

entitled to have transferred to that person the

title in the ship or possession in the ship,

because of an agreement, which was a contract, to

have that occur.

Your Honours, it is an extraordinary thing, if

I may so with respect, if a claim in relation to

title to ownership or possession of a vessel did

not encompass the concept of a claim to have title, ownership and possession transferred pursuant to an agreement by which the other person was bound so to

do. And Your Honours, what difference, we would

ask, can it make if the terms of the agreement were

Ship(2) 49 1/3/94

that the agreement between A and B was that B was
to transfer the property by agreement with A, not

to A but to C. It does not seem, we would submit

with respect, to have any different

characterization for relevant purposes.

Now, Your Honours, at page 297 in particular

in the last paragraph on the page, there is a

reference to the Canadian position as at 1921, and

then Your Honours will see on page 298 the passages

going through from about - through the whole of the

page really, and then a reference, Your Honours, at

an order for specific performance.

the bottom of the page to the fact that the grant

Now, Your Honours, at all times - if I could

just say so parenthetically - at Federation, if I

can put it that way, and at least since the

Colonial Courts of Admiralty Act 1890,

Admiralty Courts had jurisdiction to grant all

forms of relief which were available in any action

in the High Court.	Now, Your Honours, if I could
move from that - ~ -

TOOHEY J: That is putting the cart before the horse a bit,

is it not, Mr Jackson? It seems as if you might be

saying that the power to grant specific performance

as it were throws light upon the jurisdiction of

the Court.

MR JACKSON:  I understand the point Your Honour is putting

to me. The position, in our submission, is this:

one is looking purely for relevant purposes to see

whether there is any restriction on the

jurisdiction of the Federal Court, pursuant to the

terms of sections 10, 16 and 4 of this Act. What I

am seeking to do, really, is respond to an argument

that there is some such restriction to be implied

and the sources from which the existence of the

restriction is to be implied appear to be several.

One is to say that the term "proprietary

maritime claim" itself has a meaning which controls

the words which define it. I have dealt with that

already. Another is to say that the nature of a

claim in rem is such that there is an antithesis

between that, on the one hand, and on the other

hand a specific performance. What I am seeking to

say in relation to that is that that really is to take a somewhat dated, and I say so with respect,

view of what might have been any admiralty

jurisdiction which could be first of all the

subject of a constitutional provision and secondly,

that one might expect to see enacted in conferring
jurisdiction on a court, pursuant to

section 76(iii).

Ship(2) so 1/3/94

What I mean by that, a little more

specifically, is to say that if the position as,

say, at Federation is that the jurisdiction that is

contemplated by admiralty jurisdiction is a

jurisdiction which permits a number of classes of

case, but attracts to those classes of case which
confer jurisdiction all the remedies which would be
appropriate to give effect to claims which have an
equitable nature, as well as claims which have a
legal nature, then there is not to be seen any

necessary contradiction between the two concepts.

That does not give ris·e to any predilection,

in our submission, to treat terms like "ownership" used in statutes conferring jurisdiction on courts

which have the ability to exercise both legal and

equitable jurisdiction, if I could put it slightly

and exactly like that, there should not be any

predilection to treat terms like "ownership" as referring, somewhat artificially, only to legal

ownership as distinct from the two major elements

that, according to our law, do constitute that

concept.

If I could go back to what I was saying, we

would submit that the judges in the Federal Court

at the two levels were correct in the analysis

which they gave of the Act. Could I refer to the

passages which we would submit are the relevant

ones in Their Honours' reasons for judgment. First

of all Mr Justice Gummow at page 135 line 22

through to page 138 line 23. I shall not read out

those passages, of course, but I would invite

Your Honours to look at that passage; and in the

Full Court Mr Justice Davies at page 191 and 192. Your Honours, could I advert to one thing particularly in His Honour's reasons. At page 191 between lines 34 and 40 His Honour refers to the

fact that -

The terms "title" and "ownership" themselves

suggest a distinction between a registered

title on the one hand and ownership in the sense of proprietary rights on the other.

Whether that be exactly correct or not, one situation which could be a little odd, we would submit, would be if one looked, for example, at

section 4(2)(b), the concept of a claim between

co-owners relating to the ownership - it is a

possible concept, of course - but it seems a little

funny in this respect: if what was being claimed

was simply a declaration that an existing co-owner
held the existing right of co-ownership that that

co-owner held, for example, if one co-owner said, "Well, I have 32 shares and you have 32", and the other co-owner said, "I've got 60 and you've only

Ship(2) 51 1/3/94

got 4", then one could understand that being a

claim of the relevant kind.

But there seems no particular reason why the

concept should be limited to claims of that kind,

and it seems very little, we would submit, to say

if one had a situation where there were 64 legal

shares in the ship but in respect of those shares

there had been a sale by the person who had them

all to another person of 32 shares, so that in
equity they became co-owners of the shares, there
seems no reason why - it speaks of "co-owners of a
ship" as distinct from "co-owners of the shares";

they would be co-owners of the ship - why a

proceeding by the one who was the purchaser to have

enforced the contract to sell him the shares would
not be a proceeding of a kind falling within
section 4(2)(b); equally, Your Honours, if the

performance of the agreement required transfer to

(c) rather than to (b) himself.

BRENNAN J:  Does paragraph (b) add anything to

paragraphs (a)(i) and (ii)?

MR JACKSON:  Your Honour, it may in terms of the expression "operation and earnings".

BRENNAN J: Quite so.

MR JACKSON: Probably not otherwise, Your Honour, because

(2)(a) seems to cover a broader field, and (2)(a)

does not seem to have a requirement in terms - and

I will come to this a little later - that the

person making the claim, that person itself be a
person having entitlement to one of the rights

there referred to. Most cases would be, of course,

but it does not seem to say that quite, and the

decision to which I will come to in a few

minutes in relation to the English position rather

supports what I was just saying.

Your Honours, I was going to give a reference

to Mr Justice Lockhart with whose reasons

Mr Justice French, of course, agreed. That is at	page 211, line 28 in a passage which goes through
to page 215, about line 10. Your Honours, there
are two further aspects which, in our submission,
militate in favour of the view that equitable
interests were contemplated as part of ownership in
relation to ships. The first is one to which I
adverted in passing this morning, and that is that
since the enactment of the Merchant Shipping Act,
it is - - -

DEANE J: Mr Jackson, could I take you back for a moment.

You said as at Federation all the courts had

jurisdiction. Is that true of New South Wales?

Ship(2) 52 1/3/94

MR JACKSON:  I am sorry, Your Honour, I put it too loosely.

I was going to refer to the difference between the
courts a little later. That is adverted to by

Mr Justice Gummow in his reasons. The position

seems to have been that Australian courts other

than New South Wales and Victoria were colonial

courts of admiralty pursuant to the 1890 Act.	So
far as the two excluded then colonies were concerned, they appeared to be vice-admiralty
courts pursuant to earlier statutes. There is a

summary of it in Mr Justice Gummow's reasons, and I

will give Your Honours a reference to it later. We

refer to it, Your Honour, from this point of view.

Can I say two things. The first is that the

reason why we would refer to the distinction is to

show that when one is talking in terms of

section 76(iii) of the Constitution of admiralty

and maritime jurisdiction, the fact that the courts

of the colonies derived their jurisdiction from

somewhat different sources makes it unlikely that

there was to be an exact correspondence between, on
the one hand, admiralty and maritime jurisdiction

and, on the other. hand, whatever might happen to

have been at Federation or at some earlier or

perhaps later time fixed as the jurisdiction of,
say, the High Court in Admiralty in England or a

particular Australian court. That is the first

thing. The second thing we would say about it

perhaps I can deal with later.

Your Honours, I was going to say there are two

further aspects which militate in favour of the

view that equitable interests are contemplated as

part of ownership. The first was that the

existence of equitable interests in ships had been

recognized since the enactment of the Merchant

Shipping Act 1854. Your Honours, if I could just

go to the later version of that, it is set out in

section 57 of the Merchant Shipping Act 1894.

Your Honours should have a copy of that, I think,

now.	What one sees was a form, first of all in
section 56, that notices of - Your Honours, a loose

document was handed to the Court before.

BRENNAN J: Starting at page 46, is it not?

MR JACKSON:  Your Honour, I do not know. Your Honour should

have something that shows section 56 and 57, I

think, of the -

BRENNAN J: Sections 57, 58 and 59 - - -

MR JACKSON:	Your Honour, could I refer to section 56 and 57. Section 56 says, "trusts are not to be on the
register" to put it shortly. Section 57, however,
says first:

Ship(2) 53 1/3/94

The expression "beneficial interest",

where used in this Part of the Act, includes
interests arising under contract and other
equitable interests.

Now, if one paused there, it is simply speaking about an interpretation provision for the Act, but

it goes on to say:

and the intention of this Act is, that without

prejudice to the provisions of this Act for
preventing notice of trusts from being

entered -

et cetera. Then about four lines from the bottom

of the copy I have:

interests arising under contract or other

equitable interests may be enforced by or

against owners and mortgagees of ships in

respect of their interest therein in the same

manner as in respect of any other personal

property.

Now, Your Honours, that does not, by itself,

say anything about admiralty jurisdiction, but what

it does demonstrate, in our submission, is that

there is no very good reason for treating the

1861 Act which came into operation after the 1854

Act, as not contemplating by the concept of

ownership interests which were equitable interests.

And secondly, Your Honours, when one came to

Federation of course the Merchant Shipping Act was

in force in Australia and the equitable interests

in ships were then recognised. The provisions

which replace, for practical purposes, the

provisions of section 56 and 57 of the

Merchant Shipping Act now are the sections 46 and

47 of the Shipping Registration Act 1981 .

. Your Honours, the second matter to which I

wish to refer, and I will do so as briefly as I

can, is that in other elements of its jurisdiction

the admiralty courts did treat ownership as

including equitable interests and, Your Honours,

could I give simply two instances. The first

concerns claims for necessaries; the second

concerns prize.

In relation to claims for necessaries, a claim

in rem might be defeated or, more accurately,

jurisdiction held not to exist, if the "owner" - I

use the term in inverted commas - was domiciled

within the jurisdiction, and the term "owner" was

treated as including equitable owner.

Your Honours, one can see that in an Australian

case, H. S. Bird and Co Ltd v The Ship "Karu",

Ship(2) 54 1/3/94

(1925) 42 NSWWN 178. As Your Honours will see from

the headnote to that case, a ship had been

purchased by an individual -

with the intention of trnasferring it to a

company which was being promoted. For

convenience the contract was taken in his

name -

and, Your Honours, the question which arose was

whether the applicant, the individual, was the

owner of the ship. If he was the owner of the ship

and domiciled in New South Wales, then the position

was that the court did not have jurisdiction.

Now, Your Honours, the two issues of

beneficial ownership and domicile were dealt with
by the court. Domicile does not matter for present
purposes, but the beneficial ownership issue is

dealt with in the first part of the judgment and, in particular, Your Honours will see at page 179, in the left column, commencing about six lines down

His Honour says:

In these circumstances, I am of opinion that

he is not an owner or part owner within the

meaning of section 5 of the Admiralty Courts

Act, 1861.

Your Honours, if one reads through the remainder of

that paragraph, Your Honours will see that the test

applied was whether he was a beneficial owner or

part-owner.

And Your Honours, that is the first case to

which I would refer on this question. The second

is to be found in the dicta of Justice Menzies in

Shell Oil Co v The Ship "Lastrigoni ", ( 1974)

131 CLR 1 at page 6 and Your Honours will see, in

the paragraph numbered 6, there is a reference to
the Foong Tai & Co v Buchheister & Co and Your

Honours, whatever be the right interpretation of

the case, the situation which it seems to obtain is

that:

the defendant was not the owner of the ship in
question, it was the equitable owner and that

the expenditure for necessaries was to its

benefit -

which seemed to support the notion that the

relevant test was that of equitable ownership.

Your Honours, so far as the prize cases are

concerned, may I say that the two cases to which I

am going to refer seem to date from the Crimean

War. They reflect the notion that in order to

Ship(2) 55 1/3/94

a~oid being taken by the enemy of the day, the ship

might be sold in a nominal transaction where the

equitable interest in the ship remained in effect . , ,

in the vendor, and the two cases reflect, in

effect, two sides of the same coin where, in the

first case, the ship was taken - perhaps

Yo~r Honour, it would be easier to go to them, I

think.

The first is The "Ocean Bride", (1854)

2 Sp Ecc & Ad 8, also 164 ER 277. The side of the

coin that it represented may be seen in the

headnote:

A British ship fictitiously transferred to

Russian merchants to prevent -

the Russians from seizing her, but when it returned
it was seized as Russian property by the officers
of customs.

Your Honours will see at page 279 in the penultimate paragraph on the page the inquiry -

was whether the sale was intended to be merely

colourable.

Then, Your Honours, at page 282 in the first and

second paragraphs on the page there is a discussion
of the location of the legal and equitable titles,
and the ship, in effect, was released to the person

being the equitable owner on payment of the

·expenses of seizure.

The other cases, Your Honours, is The "Johann

Christoph" which is in the same volume of the

English Reports, 164 ER 274. In this case once again the question, as appears at page 275 a little

past half-way down the page, was -

whether the purchase of the vessel by the

At page 277 at the conclusion of the reasons for claimant was a bona fide purchase or not.

judgment, the decision that was arrived at was that it was not a bona fide purchase and was colourable.

It is possible on one view of perhaps the

latter case to regard it as a question of whether

it was a sham, in the sense of having no legal

effect. But another view, Your Honours, is

reflected perhaps in the order made in the first

case and the discussion in the first case, that the

question was whether the transaction was intended

to have full efficacy as a transfer of the complete

interest in the vessel.

Ship(2) 56 1/3/94

Could I spend a moment in dealing with the question which then arises and that is the question

as to the operation of the terms of the joint

venture agreement and the flag agreement to see

exactly what they do. The two documents appear as

the joint venture agreement at page 12, the flag

change agreement at page 30. Could I start with

the flag change agreement at page 30. What

Your Honours will see at the start of the agreement

in the first couple of lines is that it is agreed

to between the defender, that is YSL, and VAN,

which was acting as agent for us, the respondent.

It says in paragraph 1 that the vessel flag - it is

an agreement between us that the flag of the vessel

will be changed.

Then Your Honours will see also in

paragraph 2, in clause 2, that:

YSL -

the appellant -

will nominally purchase the vessel ..... and YSL

will hold full ownership under the Japanese

law. However even -

and maybe the missing word is "during" -

the period of the vessel being registered in

Japan and owned by YSL, eventual ownership of

the vessel still remains 50/50 basis between

YSL and VAN and that any rights, obligations

and liabilities of both parties under the JV

Agreement also still remains as if JV

Agreement -

is in effect. Then in paragraph 4:

Around July, 1987 when the original loan

amount of about US$8,800,000 will be fully

repaid, SST or other JVC jointly and equally

owned by YSL and VAN will buy back the

vessel -

Your Honours will see that the choice was that it be SST, a joint venture company, or another joint

venture company will buy it back. The agreement

was one made between the two parties to the present

litigation. It is an agreement made between them

and only between them.	It involved them doing a
number of things.	The only way, at least according

to our law, that the agreement could be enforced

was by us suing the respondent. Enforced adversely

against them. What we wanted from it was that they

perform the terms of the agreement, and one of the

terms of the agreement was that they take the steps

Ship(2) 57 l/3/Q4

necessary to vest the ownership of the vessel in a

third party, a third party which both controlled,

but which in order to make its activities ones that

were efficacious, both had to agree.

So, Your Honours, if one compares what we were

seeking to have done with what is the jurisdiction
conferred by the relevant parts of section 4, we
seek to have the ownership of the vessel, the title

to the vessel, and possession of the vessel given to a company, a third party. Your Honours, that,

in our submission, is a claim which fits exactly

the words of the three parts of section 4.

Now, Your Honours, a short analysis of the

documents can be seen - and I will not take

Your Honours to it - extracted by Mr Justice Davies

at page 185 line 10 through to page 188 line 35

and, Your Honours, we would submit that the judges

in the courts below are correct in their views, and

we would refer particularly to Mr Justice Davies at

page 190 line 4 through to page 192 line 10, and

Mr Justice Lockhart at page 212 line 15 through to

page 215 line 10.·

I have not yet referred to one provision of

the Act which indicates that its area of operation is intended to be wide - I take it no further than
that - that is section 5(1), which indicates that

it applies to:

(a) all ships, ..... and

(b) all maritime claims, wherever arising.

Your Honours could I, at this point, deal with

a number of matters raised by our learned friends

before getting to the constitutional question.	The
first is that the notion that the term
"proprietary" in the definition of "proprietary

maritime claims" gives some special meaning, some

special requirement, as to the identity of the
claimant, has a number of difficulties.	One of

them I have dealt with already, but the other is

in relation not to proprietary maritime

section 17, and may I take Your Honours to that? applies

claims but applies in relation to general maritime

claims. It includes:

general maritime claims concerning a ship -

and it applies when:

a relevant person -

Ship(2) 58 1/3/94

and, Your Honours, I will come to the definition of

that in a moment, was at two points:

the owner ..... or in possession or control of,

the ship -

The first time is when that person is:

the owner .... or in possession or control of,

the ship -

and, secondly, when that person is:

the owner of the ship or property;

and, if the relevant person satisfies those

criteria at those two times then:

proceeding on the claim may be commenced as an

action in rem -

The term "relevant person" is a term which is

defined by section 3(1) at page 3 of the Act to

mean:

a person who would be liable on the claim in a

proceeding commenced as an action in personam;

A general maritime claim, of course, requires no

proprietary interest on the part of the claimant.

Could I take Your Honours, for example, to parts of the definition of that term and in particular to

section 4(3)(f). Section 4(3)(f) includes, amongst

other things, and perhaps if I can read the

relevant words:

a claim arising out of an agreement that

relates to the ..... use or hire of a ship - Your Honours, could I also refer to section 4(3)(0)

and section 4(3)(n). Section 4(3)(n):

a claim in respect of the construction ..... of

a ship; Section 4(3)(o):

a claim in respect of the alteration ..... of a

ship;

Those are general maritime claims. Your Honours,

all that has to happen for there to be a claim in

rem in respect of any of those types of claim is
that, if one goes back to section 17, to take the

simplest case, when the cause of action arose and

when the proceedings have commenced, the same

person was the owner of the ship.

Ship(2) 59 1/3/94

Your Honours, a question which arises, for

example, in this case and a question which I say

immediately was not raised below was whether

jurisdiction was conferred by the fact that the

agreement in question was one which was in terms of

section 4(3)(f) a claim arising out of an agreement

that relates to the use of a ship.

Now at the time, when the cause of action arose in terms of section 17(a) and at the time

when the proceeding was commenced, the appellant

was the owner of the ship, if one treats the term

"owner" as meaning registered owner. I have to

say, Your Honour, that somewhat parasitically and

perhaps unsuccessfully, we have given our learned

friends a notice of contention in that regard at

lunch and I think in a handwritten form, which we

will give to Your Honours. It is out of time, of

course; it should have been 14 days after the

notice of appeal. It is not an issue which was

raised below. It is difficult to see however, in

our submission, what additional facts might have

been relied on and the agreement in question, the

joint venture agreement, plainly relates to the use

of the ship. It is opposed, of course,

Your Honours. Your Honours, may I just say that it

is an issue which had not occurred at an earlier

stage in the proceedings. Your Honour, I cannot

put it beyond that.

Now, Your Honours, the next thing I wanted to

mention is this, that we - - -

DEANE J:  Mr Jackson, can I just divert you for one second?

In the commission's report, is there any

explanation of the structure of 15 and 16. What I

have in mind is that Sir Frederick Jordan suggests

that actions in rem strictly understood arise from

maritime lien only and that anything else in the

form of an action in rem must have some statutory

basis. I was just wondering whether that had

carried over here into 15 and 16?

MR JACKSON: Well, Your Honour, could I say a couple of

things about it, that historically actions in rem

absent statute, I think were, as Your Honour says,

something that arose to enforce a maritime lien.

However, from a relatively early point, I suppose,

and by that I mean last century, various remedies

by way of actions or proceedings in rem were

allowed to be brought in respect of claims that
were not to enforce maritime liens.

Now, Your Honour, I will give you the

reference in the report in a moment, but that was
really the thing I was going to mention in a

moment, that if one looks at a number of cases,

1/3/94

·ship(2) 60

such as the decision of the House of Lords in C &

CJ Northcote and The Owners of the Henrich Bjorn,

11 AC 270, one can see the distinction drawn

between the two classes of proceedings in rem and

in one class of proceedings in rem to enforce a

maritime lien, it was proceeding in rem of, in

effect, a non-statutory basis; the other was one

that simply gave a new remedy without giving a new

cause of action.

Your Honour, the issue is discussed - if I

could perhaps give Your Honour the reference in the

report first.

DEANE J:	I do not want you to take undue - - -
MR JACKSON:	No, it is Chapter 8 and it commences at

page 85. Could I say, Your Honours, that the issue

can be seen discussed as I said a moment ago in

Northcote v The Owners of The "Henrich Bjorn",

particularly at page 278, 279 per Lord Watson, and

Your Honours, also in The "Monica S" in (1968) P

741 at 768-769, and the House of Lords in The

Halcyon Isle, (1981) AC 221 at 232 to 233. Also in

Dalgety, a decision of Mr Justice Kreiwaldt in
Dalgety v The "Rose Pearl", (1957) 32 FLR 219 at

228.

My learned friend wants to say something in

relation to my application.

MR CALLAWAY:  Your Honours, as my learned friend has

foreshadowed, we oppose his application for leave

to serve a notice of contention at this stage. If

I were to deal with it in reply it would probably

produce considerable inconvenience for the Court.

I could state now what the grounds of our objection

are, and I would respectfully invite the ~ourt to

rule on my learned friend's application to raise

4(3)(f) at this late stage. I am in the Court's

hands as to what is the better course.

MASON CJ: Perhaps you could indicate shortly what your

objections are so that we can get a picture of the

difficulties that you assert are inherent in his

argument.

MR CALLAWAY:  There are five points, Your Honour. The first

is that we would not agree with my learned friend,

Mr Jackson, that it is a simple point. It would

require us to formulate a fresh argument concerning

4(3)(f) which we would be able to extemporize, but

it is not a simple matter at all. One would have

to consider whether the joint venture agreement

and/or the flag change agreement did satisfy the

description in section 4(3)(f) of an agreement

relating to the use or hire of a ship. So it will

Ship(2) 61 1/3/94

lengthen the case but we can extemporize the
non-constitutional argument if we are so required

to do. That is the first point.

But we submit as a matter of discretion that

the Court should not give my learned friend leave.

In the first place, the respondent has always

asserted that this was a proprietary maritime claim

and so pleaded it. Secondly, the respondent

permitted both the courts below to approach it on

that basis, and certainly the Full Court.

Mr Justice Lockhart at page 198 describes the issue

in terms of whether or not there is a proprietary

maritime claim.

Thirdly, it would raise a fresh constitutional

issue. Your Honours will remember almost at the

end of my argument this morning I said that the
American doctrine that ships sale agreements are
not within the admiralty jurisdiction might have
some merit in relation to a general maritime claim,

although we did not wish to argue that in relation

to a proprietary claim. I mentioned the

personification theory as one of the reasons why

that might be so.· It may be that section 76(iii)

does not authorize the inclusion in section 4(3) of

a ships sale agreement or something like it.	I
said all that this morning.

That would raise a fresh constitutional issue

which I would extemporize if the Court desired but,

of course, that would mean the Court would not get

the assistance that one would wish to give; but

more disastrously, the issue would not fall within

the section 78B notice which is in the appeal book,

and which makes clear at pages 232 to 233 that the

Attorneys-General had been notified that the

constitutional issue revolves around whether or not

Mr Jackson's client has a proprietary maritime

claim, and that would prevent the Court proceeding further in the matter because of the provisions of the Judiciary Act. Further, Your Honours, because this point is

not pleaded my learned friend would eventually have

to amend his pleadings, and that would raise among

other things the question whether the rule in

Weldon v Neal has any, and if so, what application

in admiralty proceedings in the Federal Court, the

limitation period for a contractual general

maritime claim having run, because it is alleged

that we should have transferred the ship in 1987,

and it is hard to think that the limitation period

could be longer than six years. So that issue

would be raised too, and all of this would be

raised for the first time in this Court in running

in the course of this argument.

Ship(2) 62 1/3/94

Your Honour, in outline they are the reasons

we would respectfully oppose the application for

leave. I thought it was only right to mention them

now rather than to save them up for reply.

MASON CJ:  What do you say in response to these objections

which do seem to have, on the face of it,

considerable substance?

MR JACKSON:  Your Honour, the first thing I would say if I

could start from the constitutional questions first
of all is that if one looks at page 233 and

paragraph 9, the constitutional issue that was

raised is there expressed. That covers a pretty

wide area including an issue of the kind which we

would now seek to raise. Your Honours, it is

difficult, with respect, to see in relation to the

constitutional question that the constitutional

question raised by this provision is really very

significantly different in quality as distinct from

the mode of expression of it perhaps by reference
to a particular provision, very different from the

question that has already been agitated.

McHUGH J:  Mr Jackson, paragraph 6 of the 78B notice

specifically says that the respondent claims it is

a proprietary maritime - - -

MR JACKSON: Your Honour, I am conscious of that. That is

in a sense a prefatory averment, if I can use that

expression, leading to the statement of what the

issue is, the issue being that stated in

paragraph 9. What section 78B I think, without

going to the section, requires to be stated is what

is the issue arising under the Constitution or

involving its interpretation.

MASON CJ:  Mr Jackson, I would have thought had you made it

clear at the time of applying for special leave to

appeal, that you were seeking special leave to

raise this point which had never been raised or

argued before - I know you are not seeking that -

the Court would not have entertained it. I think
that has some bearing on whether or not the Court

ought to allow you to rely on the point at this

stage.

MR JACKSON:  Your Honour, if it had been a point whereby we

sought to vary the judgment below, we would

ourselves have had to obtain special leave because

of the provisions of the rules. It is a point

which we would have been - and I say this with a

qualification - entitled to take as of right. The

Court might have said at that point, "Because the

point wasn't taken below and might involve

questions of fact, then the point can't be taken on

appeal." However, Your Honour, our learned

Ship(2) 63 1/3/94

friend's litany of objections to it - and I do not

mean that in an offensive sense - is one that
seemed to omit that consideration.

Really, if one looks at the matters upon which the contention is based but simply as a question of construction of the agreement for the use of a ship and for the title of a ship, that seems to be the

relevant criterion and it is difficult to see that

that could involve anything of fact unless there
was some contention that the documents did not

represent the true situation.

DEANE J:  Would it require any amendment at all to your

pleadings?

MR JACKSON:	I think it would, Your Honour, yes.
DEANE J:	Why is that?
MR JACKSON:	Your Honour, paragraph 14 at page 8 alleges the

basis of the claim, whether strictly

necessary - - -

DEANE J:	The rules require that, do they?
MR JACKSON:	I am not certain of that, in fact, I thought

the answer was no. I know that the rules of this

Court do, but I do not think that is the position.

But we would, having expressed it in one way, we would probably have to in one way or another change

the position.

DEANE J: But that could be relevant and that the only

amendment necessary might be to delete paragraph 14

if the rules do not require you to specify the

basis of the jurisdiction.

MR JACKSON:  Yes. My learned friend says other things, but

perhaps if there is something more about it he may

be ·permitted to say so, Your Honours.

McHUGH J:  You will have to allege ownership at the

commencement of the action, would you not, to bring

yourself within section 17.

MR JACKSON:  Yes. Your Honour, that is probably already

pleaded in the sense that Your Honour will see

paragraph 10 and paragraph 11, refusal to

retransfer.

McHUGH J:  Does it necessarily mean that you were the owner

at the commencement of the proceedings?

MR JACKSON:  The defendant was, because it says that the

defendant has wrongfully refused to retransfer and

Ship(2) 64 1/3/94

that is the paragraph 13, and so on, that it seems

to contemplate a continuing situation.

Your Honours, would it be convenient if I were

to indicate what we would say in relation to the

substance of the point.

MASON CJ:	Yes.
DEANE J: Mr Jackson, can I delay you a bit longer.	ram a

little lost as to how, if your argument would

involve an amendment to the statement of claim, we

should just go ahead and hear it, in view of what

has been said about limitation periods.

MR JACKSON: Well, Your Honour, the question is this: it is

a question of the court's jurisdiction to entertain
the action - by that I mean the Federal Court, of

course - but then, the question which would then

follow would be, if the action were - and if the

court had jurisdiction to entertain the action,

would a plea of the limitation provision be one

which would be ef{ective or not.

DEANE J:  If you do need an amendment to the statement of

claim to raise a claim which, if first brought,

would be barred by the statute of limitation, there

is obviously a very large question involving

discretion and everything else, as to whether you

should be permitted to amend the statement of claim

at this stage. Well now, if that question does
arise, I have trouble seeing how this Court should

just allow you to argue it on the basis that the

necessary amendment to the statement of claim has

been made. I might be missing something, but I

think that was the point that was being made

against you.

MR JACKSON:  I take Your Honour's point. Your Honour, I am

sorry, it will take me a moment to answer you I

think.	I wonder if I could perhaps proceed with my
other arguments and then come back to this point of

the conclusion of those.

MASON CJ: Yes.

MR JACKSON:  Your Honours, the point with which I would next

deal is this, that this is a case where it is clear

that there is a cause of action apart from any

claim in rem. Our learned friend's submissions

rather seem to suggest, and perhaps I am putting it

a little inexactly, that the only claim that we

have is one which derives from the claim in rem and

therefore was some kind of new cause of action. Of
course, there is a cause of action here, which

arises outside the claim in rem; it is a claim

Ship(2) 65 1/3/94

based on the agreements in question and all that is

done by the Act is to give a new form of remedy.

There is a new form of remedy rather than a

new cause of action given is discussed in the case

which I referred a few moments ago, "The Henrich

Bjorn", 11 AC by Lord Watson at page 278, the

second half of the page and the top of page 279.

So, it is a matter of remedy not cause of action.

DEANE J: But, is it clear that sections 15 and 16 confer

jurisdiction to deal with claims other than claims

in rem, or do you have to resort to section 17 to

get that jurisdiction in an action in rem?

MR JACKSON:  I am sorry, Your Honour. Sections 16 and 17

say -

DEANE J: Sections 15 and 16.

MR JACKSON: Sorry, 15 and 16 say that particular claims:

may be commenced as an action in rem - - -

DEANE J: Yes, it is a cla·im in rem on proprietary maritime

claims. Well now, that means against the ship

here. Is it clear that in a sections 15 and 16

claim you can, as it were, claim money over and

above the value of the ship, or regardless of the

value of the ship, or does one have to come within

section 17 to be able to do that? I am not

suggesting that it so, I am just trying to

understand the structure of the three sections.

MR JACKSON:	Your Honour, generally speaking, if I could speak about situations other than the Act, in a
sense, a person who was a defendant in a
proceeding, which had been started in rem, could
not escape liability for the full amount by saying,
"The ship is only worth X." That is a person who had appeared in the proceedings. Different considerations might apply to a person who had not
appeared. But, Your Honour, so far as 15 and 16
are concerned, all that they say really is that in
particular classes of cases you can sue, in effect, the ship or start proceedings in rem. So too, in a particular class of case that is referred to in 17, and Your Honour will recall that the definition in
section 4 defines, really, only "proprietary
maritime claims" and "general maritime claims", and
then you find those proceedings dealt within 16 and 17 to the extent to which they may be brought in rem and then maritime liens in 15.

DEANE J: So, your answer to my question is that you would

say that in an action under 15 and 16 in rem you

can, as it were, join related claims and get

Ship(2) 66 1/3/94

whatever relief is appropriate to those related

claims?

MR JACKSON:  Yes. Your Honour, there are some limitations

upon that of course. The limitations can be seen

in section 12 which relates to associated claims

which are matters of admiralty and maritime

jurisdiction.	The obverse of that in effect is
section 13.	Then you will see section 14 saying

that if it is such a matter, the only ones that you

can start in rem are those that are provided for by in effect the succeeding provisions. One goes then

to the relief that may be granted. That can be

seen in, for example - if Your Honour looks at

section 31, that deals I think in part with what

Your Honour was asking me before. Section 31(1)

deals with the case of a defendant who has appeared

and section 31(2) deals with the in rem proceeding

where the person has not appeared - I am sorry:

a defendant in the proceeding who has entered

an appearance and is not a relevant person -

et cetera. In other forms, you will see in

section 33 orders that may be made in a

co-ownership claim in effect include what is set

out there.

DEANE J: Thank you, Mr Jackson.

MR JACKSON:  Your Honours, if I could turn then to my

learned friend's written submissions, there are

just a couple of further things I wish to say about

those. If Your Honours look at paragraph 2, I have

already dealt largely with the proposition that is

there referred to, but may I also say that the view

that a proprietary maritime claim - perhaps I will

put it differently. The view that only a person

who is seeking to enforce that person's own

proprietary right may bring a maritime claim seems

inconsistent with the view taken by the House of

Lords in The "Antonis P. Lemos", (1985) 1 Ll LR

283. At page 286 Your Honours will see set out in

the bottom of the left column the relevant part of

the admiralty jurisdiction of the supreme court.

What Your Honours will see is that it referred to

the admiralty jurisdiction being:

jurisdiction to hear and determine any of the

questions and claims

including ( h) :

any claim arising out of any agreement

relating to -

Ship(2) 67 1/3/94

and the matters are then set out. Your Honours

will see in the right column on the same page,

about a quarter of the way down the page, a

contention being described as the second and

alternative contention, that it only applied if

claims were directly connected with some agreement

and that the agreement concerned was one made

between the two parties to the action themselves.

So that was the second contention.

In the Court of Appeal that contention had

been rejected by Lord Justice Parker in reasoning

which was adopted by the House of Lords.

Lord Justice Parker's reasons appear at page 290 in

the right column, half-way down the page.

Your Honours will see the paragraph commencing,

"The reasoning on which Lord Justice Parker" et

cetera. Then in the same column about 12 lines

down there is a reference to the third reason which

was:

Thirdly, s 20(2)(h) contained no words which, either expressly or by necessary implication, restricted the agreements referred to in it to

agreements made directly between the two

parties to an action -

and that there was no good reason for importing

that. As Your Honours will see on the next page in

the penultimate paragraph of His Lordship's reasons

for judgment, he agreed with all those reasons, as

did the other members of the House of Lords who

agreed with his reasons.

Your Honours, that turned on the expression

"arising out of" the agreement. What we would seek

to say is that when one looks at the term "relating
to" used in section 4(2) it really leads to a

rather similar conclusion, namely, that provisions

of that kind should be broadly construed in

relation to jurisdiction.

The next contention with which we wish to deal

is that set out in paragraph 5 of our learned

friend's written submissions, and that is, that a

claim for specific performance in rem is a

contradiction in terms. I am conscious of the fact

that my learned friend put that slightly

differently in his oral submissions, but may we

just say that if one looks at the decision of

Mr Justice Brandon in The "Conoco Britannia",

(1972) 2 QB 543, his reasons for judgment

demonstrate, in our submission, the incorrectness

of that proposition. They also provide a lead in,

in a sense, to the operation to be given to those

provisions of, in England the Supreme Court of

Judicature Act which gave a jurisdiction to all the

Ship(2) 68 1/3/94

divisions of the High Court to do what was proper

both in law and equity.

Could I go to page 552G and Your Honours will

see set out the argument that specific performance

was not available. That is set out on the

remainder of that page and at the top of the next

page. Then reference is made in His Lordship's

reasons for judgment throughout the remainder of

that page to the provisions of the Administration

of Justice Act 1956 which repeat those in the

earlier Supreme Court of Judicature Acts. He

refers in particular between letters Band C to the

fact that:

Prima facie one would suppose that, once the

jurisdiction was invoked, the court could give

all the remedies in an action in rem that it

would be able to give in an action in
personam.

Then Your Honours will see the three provisions set out from sections 36, 37 and 42 which mirror, to

put it shortly, earlier provisions in Judicature

Acts of the kind to which I have referred. Also at

the top of the next page, section 43 again to the

same effect. At page 554 in the paragraph

commencing just above D, His Lordship sets out the

effect of the Supreme Court of Judicature Act so

far as the High Court in England was concerned -

the court can and must, when it is asked to do

30 1 give all legal and equitable relief

properly available to a party, either in

proceedings in personam or in proceedings in

rem.

Your Honours will see then at page 555 something

which relates to the question Your Honour

Justice Deane asked me a little while ago, the first new paragraph on page 555 dealing with the

circumstance where the value of the ship is

continues on through that paragraph. insufficient to satisfy the judgment. That

DEANE J: Yes, that is a slightly different thing though.

What I had in mind was an action in rem which

sought not only an order for delivery up of the

property, as it were, but damages for breach of

contract, such as here, where the court would not

have had jurisdiction to deal with the simple claim

for damages for breach of contract.

MR JACKSON:	Yes, well, Your Honour, it is in one sense perhaps complicated and in another sense made
easier by the concept of matter, I suppose, in the constitutional provision, because the matter would

Ship(2) 69 1/3/94

be the controversy which would give rise,

presumably, to both those claims.

DEANE J: Well, is the answer for our purposes that we are

not concerned with it, in that we are only

concerned with jurisdiction and if there is an

action in rem, the relief you can obtain is

something that should be left to the court when it

comes to deal with it?

MR JACKSON:  Your Honour, in our submission, that is

correct.	I have to say that subject to a
qualification.	The qualification is that what

founds jurisdiction in the end under the particular

provision is the claim, and that is the foundation

of jurisdiction. Two further things flow from

that: one is, what else is properly part of the

controversy so as to give rise to the matter? That

is the first thing. The second thing is, at the

end of the day, what is the proper relief to be

given? That is a question which certainly does not

arise now.

. Your Honoursr could I just say one further

thing about The Conoco Britannia. What it shows,

in our submission, is that the admiralty

jurisdiction in England really was not the

jurisdiction of a court separate from the other

courts and not applying to matters before it the

law of the land and Your Honours, that is

emphasized by the Colonial Courts of Admiralty Act

1890 and Your Honours will see, if I could take you

to that for just a moment, because under the

Colonial Courts of Admiralty Act 1890, the

jurisdiction given by section 2(1) to courts of law

in British possessions, which were courts of

"unlimited civil jurisdiction" was that they were

to be courts of admiralty with the jurisdiction
mentioned in the Act and then, section 2(2) said

that that jurisdiction was to:

be over like places, persons, matters, and

things, as the Admiralty jurisdiction of the

High Court in England, whether existing by

virtue of any statute or otherwise -

and then it went on to say, Your Honour -

the Colonial Court of Admiralty may exercise

such jurisdiction in like manner and to as

full an extent as the High Court in England -

So Your Honours, that appears, broadly speaking, to

pick up, if I could use that expression, the kinds

of relief that might have been given by the

High Court in England after the Judicature Act and

claims seeking relief of that kind, prima facie,

Ship(2) 70 1/3/94

would not be outside the jurisdiction of a Colonial	Court of Admiralty.
Your Honours, could I move from that then to the question of constitutional power. Under
section 76(iii):

The Parliament may make laws conferring

matter -	original jurisdiction on the High Court in any
(iii) Of Admiralty and maritime jurisdiction.

And Your Honours, the first submission we would make is that there seems no very good basis for

confining the power under that provision to matters

which might have been within admiralty jurisdiction

in the strictest sense at Federation or at some

other time.

No doubt the jurisdiction capable of being

conferred by section 76(iii) is as to a particular

subject-matter, that is admiralty and maritime

jurisdiction, but- that subject-matter, it had to be

borne in mind, was also a developing one, as the

history of conferral of statutory jurisdiction as

well as the common law jurisdiction demonstrates.
And, Your Honours, in the Colonial Courts of

Admiralty Act 1890 was, in I suppose historical time, not a long time before Federation.

Also, Your Honours, the development had not been uniform throughout the colonies of Australia,

and that that is so may be seen in the discussion

by Mr Justice Gummow at page 156 line 29 through to

page 159 line 12. Your Honours will see that he

refers at the bottom of page 156 to the position in

New South Wales and Victoria; they were not

colonial courts of admiralty at Federation, they

were vice-admiralty courts. He refers to the

jurisdiction in page 157 line 10 and he then sets

out the very broad powers given by the letters

patent in 1787 to the judge of the

Vice-Admiralty Court of New South Wales.

Your Honours will see, if I can extract words

from that passage that is there set out, the
authority was:

in all causes civil and maritime -

and a few lines further down:

and all matters and contracts which in any
manner whatsoever ..... do any ways concern

suits ..... and affairs civil and maritime

Ship(2) 71 1/3/94

whatsoever between merchants or between owners

and proprietors of ships or other vessels -

and then, Your Honours, about line 5 on page 158:

or between any other persons howsoever had

made began or contracted for any matter cause

or thing business or injury whatsoever done or to be done -

and then he goes on to describe the geographical

limits of it.

Now, Your Honours, what we would submit is

there is no reason at all why the term "admiralty"

in section 76(iii} would not go at least as far as

the term of the Commission that is there referred
to, but in any event the term "maritime" is added

in section 76(iii).

DAWSON J:  I am not quite clear in my own mind what the

argument is. Is it that power is given to confer

an admiralty or maritime jurisdiction by reference

to that which exists elsewhere, either created or

at common law, or is it the argument that the power

given is to create and confer, that is the

Commonwealth has power to create and confer an

admiralty or maritime jurisdiction.

MR JACKSON: Well, Your Honour it depends, I suppose, what

one means by create and confer.

DAWSON J:  By create I mean create a jurisdiction which

cannot be seen by reference to some other

jurisdiction existing elsewhere, that which can be

described as an admiralty maritime jurisdiction.

MR JACKSON:  Yes, Your Honour. Your Honour, my hesitation

in a sense is due to the - I do not wish to be

suggesting that it applies to provide for different

substantive laws. The power to enact substantive

laws may possibly, on one view, come from that

provision but it is perhaps sufficient to say that

one would have to look to some other legislative

power of the Commonwealth in that regard. But what

section 76(iii) at least is doing is to say there

is a broad subject-matter which can be described as

admiralty and maritime matters. Jurisdiction to

determine matters of that kind may be conferred on

a Federal Court or on a State court.

DAWSON J:  Even if there were claims which were not

recognizable by reference to anything else, new,

fresh claims, as long as they were matters of

jurisdiction and fell within a description of

things maritime, or things admiralty, that is

sufficient?

Ship(2)	72	1/3/94
MR JACKSON:	Yes, Your Honour.	The terms are, of course,

somewhat ambulatory in their nature. For example,

a point made in one of the texts is that at one

stage vessels that were road, and had that as their

only means of locomotion, would be the principal

vessels engaged in, for example, commerce on the

sea but that today Acts dealing with admiralty

jurisdiction and maritime jurisdiction would

commonly exclude them because they do not play a

very large part in affairs. And, of course, there

are always difficulties about things like movable

oil platforms and things of that kind.

But, Your Honours, could I just say this, that

the term "maritime" when used in the context of

admiralty and maritime jurisdiction, seems clearly

intended, we would submit, to cover all possible maritime claims. It is impossible, no doubt, to try to define those terms exhaustively but we would

submit that nothing could satisfy the test more

centrally, in a way, than a claim which related to

the true ownership of a cargo carrying vessel

engaged in international trade between Australia
and other nations~

The use of the term "maritime" is apt to do away with any fine distinctions and it is a term of

extension. Your Honours, to put it a little more

broadly, what we would submit is that it includes,
at least, all matters relating to or dealing with

commerce carried out by sea and also matters

dealing with navigation. We would refer in that

regard to the three passages in the reasons for

judgment in the members of the courts below. Your

Honours have been taken to them, perhaps I can just

give the reference:  Mr Justice Gummow at page 171,

Mr Justice Davies at page 194, and Mr Justice

Lockhart at page 220, line 8, through to page 223,

line 5.

DAWSON J: Then you do say the legislative power extends to

the creation of new and hitherto unrecognized

claims?

MR JACKSON:  Your Honour, I think the answer is no

because -

DAWSON J:  So long as they can be described as admiralty or

maritime?

MR JACKSON: Well, in one sense, yes, Your Honour, in

another sense, no. The sense in which we would

assent to the proposition is this, that

jurisdiction can be conferred in relation to causes

of action which may arise under Commonwealth law,

under State law, perhaps under the law of other

Ship(2) 73 1/3/94

places picked up by our laws, and new remedies can

be given in respect of those - - -

DAWSON J:  But not new causes of action?

MR JACKSON: Well, Your Honour, that is the difficult

question. That is a question that does not really

arise in this case because what in the present case

one has is simply a situation where the laws being

sued on are, in effect, part of the common law of

Australia - if I could use that expression -

picking up the laws of other countries, perhaps.

DAWSON J: At most it is a question of remedies.

MR JACKSON:	Yes and, Your Honour, no doubt one day the question will arise as to the ability by
section 76(iii) alone, perhaps 76(iii) together
with 77(i) to create substantive maritime laws, but the question is one which may be put off, perhaps for many years, because of the ability to legislate
in any event pursuant to, for example,
section Sl(i) the_power as perhaps extended by
section 98 to shipping and navigation, the power to legislate, with respect, to fisheries in Sl(x) and a number of other provisions which would
effectively cover a very large part of the field,
if I can use an incorrect analogy.
BRENNAN J:	Mr Jackson, what do you say is the interest

which you claim in this ship?

MR JACKSON:  Your Honour, the interest which we claim is one

- if I can put it in terms of firstly what we want,

we claim we have an interest in relation to, if I

could use the neutral term first, the ship which

entitles us to have its ownership dealt with in a particular way. It does not matter, Your Honour,

so far as that is concerned whether we have an

interest in the ship itself as having a beneficial

interest or whether we have an interest in the ship

only by virtue of our shareholding in the company

which would not traditionally give us an interest

in the ship itself.

BRENNAN J: Absent any proprietary interest in the ordinary

sense of that term, what do you say is the dispute

as to ownership?

MR JACKSON:  The dispute as to ownership, Your Honour, is

that we have a contractual entitlement as against
the appellant to have the ownership of the ship
transferred from its name to a company in which we

have a half interest.

BRENNAN J: Ownership transferred from its name. I am

not - - -

Ship(2)	1/3/94
MR JACKSON:	To have the ownership of the vessel transferred

from the appellant to a third party which is a

joint venture company.

BRENNAN J:  And you say that you do not need to be more

precise as to whether that is legal or beneficial

or registered ownership?

MR JACKSON:  So far as our entitlement to require that is

concerned, Your Honour, no, we do not.

BRENNAN J:  Do you, as a fall-back position, claim any

proprietary interest in your own right?

MR JACKSON:  Yes, Your Honour, and that is a more difficult

proposition to sustain. However, having said that,

it really comes from the way in which the two

instruments are set out and they contemplate that the parties will have an interest in the ship, an

interest in effect of half each, but the operations

of the ship to be dealt with by a company. That

that is so appears from firstly the recital to the

joint venture agreement at page 14, the penultimate

recital, then fol-lowed by the terms of the flag

change agreement to which I referred earlier at

page 30.

But, Your Honour, one has to bear in mind, if

I may say so, with respect, that the way in which the definition of "proprietary maritime claim" is

set out is that it says nothing, really, about the

title of the person making the claim except so far

as the nature of the possible claims give some hint

to that, but it simply speaks of, for example, a

claim relating to ownership of a ship. If we have
a contractual arrangement whereby another person
who is the present owner of the ship is obliged to

transfer the ownership of that ship to a company in

which - - -

BRENNAN J:  On your primary argument you do not fall within

paragraph (b).

MR JACKSON:  No, Your Honour. That would be correct, yes,

we do not really need to, we would submit. We

would also say, however, that if one looks at the

provisions to which I referred the reality is that

we did have a proprietary interest, whoever held

the ownership of the vessel. Perhaps I am not

making that very clear.

BRENNAN J:  A proprietary interest which you claim is an

equitable proprietary interest?

MR JACKSON:  Yes. What I mean by that is that one sees, for

example, at page 30, about line 15:

Ship(2) 75 1/3/94

eventual ownership of the vessel still remains

50/50 basis between YSL and VAN -

and then the jointly owned at page 14, and so on.

The next matter with which I wish to deal is

the question of the test applied by the primary

judge and the Full Court. As we submit in our

outline of submissions, all that was required to

give the Court jurisdiction was that the claim

satisfy the requirements of one of the provisions

of section 4(2). To determine that question, we

would submit, one primarily had to look at - and I

say "primarily" for a reason I will mention in a

moment - what the nature of the claim was. It may

be that the claim is one that in the end would

fail, but that does not go by itself to

jurisdiction. So if one looked at the nature of

the claim that was made, it appeared to be one that

attracted the relevant provisions of the Act. In

those circumstances that, in our submission, would

be sufficient.

If Your Honours look at the test that was

applied - we give the references in paragraph 12 of

our written submissions - whereby we had to show,

and in part we adopted it, a strong probability,

was a test that may well have been too high against

us. All that we had to show, we would submit -

strongly arguable I should have said - was that we

were making a claim of that nature.

Your Honours, if one looks at a somewhat

analogous situation: jurisdiction, for example,

may arise under section 75(iii) in a matter in

which the Commonwealth is a party. That is all

that is necessary to found jurisdiction. Very

frequently cases are brought in this Court in which

the Commonwealth is a party and the Court,

therefore, has jurisdiction. Fairly frequently one

sees Your Honours sitting to dismiss such claims in

the early hours of the morning because they have,

in the end, no substance, but it does not mean the

Court does not have jurisdiction. If one looks at provisions of the kind in section 4, that is all

that section 4 is doing - it is saying these are

claims of that kind.

Your Honours, turning again to the time

question which Your Honours mentioned before. question of a need to plead, as by way of introduction to it. Admiralty Rule 22 - the common set of Admiralty Rules bought into effect by the

Act - adopts the Federal Court Rules in Order XI.

Our paragraph 14 of the statement of claim is

strictly unnecessary.

Ship(2) 76 1/3/94

Your Honours, so far as the time limitation

element is concerned, there is no additional fact,

in our submission, that requires pleading, nor is
there any additional relief that requires pleading.

The limitation period applicable is provided for by

section 37(1) of the Act. What Your Honours will

see is that a proceeding may be brought under the

Act on a maritime claim at any time before the end

of the limitation period that otherwise would be
applicable, to put it shortly, and if there is no

other period applicable, then three years.

The action being one in contract, then prima

facie we would submit that would bring into being a

limitation period of six years by, for example, the

New South Wales Limitation Act of 1969, section 14, and that period, we would submit, has not expired

because the vessel has never been transferred, so

it is a continuing cause of action.

Your Honours, could I say one other thing, and

that relates to the convention that was referred to

by my learned friend this morning. What was

referred to was the 1952 International Convention

for the Unification of Rules Relating to the Arrest

of Seagoing Ships, the Brussels convention.

Reference was made to the term "maritime claim" as

meaning:

a claim arising out of one or more of the

following -

and then reference was made to (o) -

disputes as to the title to or ownership of

any ship;

(p) disputes between co-owners -

et cetera.

Your Honours, it is difficult, with respect,

to see that those provisions really cast any light

on the determination of whether the nature of the

claims that may give rise to the disputes is of the

present kind. All it says is a claim arising out

of a dispute as to the ownership of a ship. It

does not seem a particularly limited provision.

Then, Your Honours, apparently there has been some

dissatisfaction with the terms of that convention

and there have been relatively few countries who
have agreed to it.

There has been a draft revision of it which has been in being and proposed to be adopted by a

number of countries in the Lisbon draft, 24 May

1985.      Your Honours will see the term "maritime

Ship(2) 77 1/3/94

claim" there defined in Article 1(1) and it is

given a pretty wide introductory meaning together

with then paragraphs (s) and (t) dealing with the

two items in question.	Your Honours, those are our
submissions.

BRENNAN J:  Mr Jackson, just before you resume your seat,

could I just ask you another question about 4(2)(a)

and its relationship to section 14. Let it be
assumed that the plaintiff in proceedings has an

asserted right to have the owners of the ship deal

with its ownership in a certain way, as in the case

here.

MR JACKSON:	Yes.
BRENNAN J:	Your argument is, I take it, that so long as

there is some sort of a claim against the owners of

a ship relating to ownership, that that makes it an

action in rem?

MR JACKSON:	Yes.
BRENNAN J:	Even if, for example, it relates only to a 164th

share, and yet the ship can then be arrested?

MR JACKSON:  Your Honour, there would be nothing very new in

that.

BRENNAN J:  Even though the person who claims it is not a

co-owner?

MR JACKSON:  Yes, Your Honour.

BRENNAN J: It seems a curious notion, does it not, that a

person who is not a co-owner can have the ship

arrested in order to compel the respondent to deal

with a share of -

MR JACKSON: Well, Your Honour, not really. No doubt there

are degrees of - one moves from reality to

unreality, of course. iI is not as if someone does

this without a liability to a sanction, because
there is provision made in there for damages to be

paid by reason of unjustified arrest and so on.

That is section 34.

BRENNNAN J:  Why is there a requirement of co-ownership in

(b)?

MR JACKSON:  The simple answer is probably just an

historical one in the sense that it has been

carried over from previous enactments.

Your Honour, as one sometimes sees in provisions of

this kind the fact that there is overlapping and

maybe not complete overlapping, does not mean that

(i) is to be read down. Your Honours will see, for

Ship(2) 78 1/3/94

example, as I said before, in 4(2)(b) there is a reference to operation and earnings of the ship.

One would think also that many cases covered by,

for example, that provision would also be covered

by the provisions of 4(3)(f), for example.

The point I am trying to make, Your Honour, is that there is undoubtedly - - -

BRENNAN J: Yes, it may fall under a variety of headings. I

appreciate that, but the identity of the words in

4(2)(a)(i) and (ii) with the precisely

corresponding words in 4(2)(b) is a curiosity when

one sees that 4(2)(b) then adds the requirement of

co-owners.

MR JACKSON:  One can look at it the other way, of course,

and say that the fact that 4(2)(b) refers
specifically to co-owners is intended to ensure

that that class is definitely comprehended, that it

does not in any way limit the larger and wider

proposition appearing in the preceding provision,
because there is no suggestion that these are to be

mutually exclusive. If one just reads the terms of

the provision - if I just take 4(2)(a)(ii), a claim

relating to title to a ship, and then the second

provision of 4(2)(b) -

a claim between co-owners of a ship relating

to the possession -

it is true no doubt that what is in (b) would be

encompassed by 4(2)(a)(ii), but at the same time

the presence of the wider provision in 4(2)(a)(ii)

suggests that there is no limitation just to

co-owners. If one tries to treat 4(2)(b) as the

dominant provision, what does 4(2)(a) do? It must

do something. One cannot have it lying there

moribund, tabula in naufragio waiting for someone

to pick it up.

MASON CJ:  Mr Jackson, could I ask you a question about your

notice of contention. I must confess at the moment

I am rather inclined to the view that you do not

need to file a notice of contention.	You might
explain to me why you have to do so.	The

requirement arises under cross appeal in Order 70

rule 6(5). But I must say my understanding had

been that if the respondent to an appeal was

seeking to justify a conclusion reached by the court below on a point not argued in the court

below he was entitled to do so, provided, of

course, that maintaining that point did not involve

the possibility of some contested issue of fact.

Does Order 70 rule 6(5) apply to that situation?

Ship(2) 79 1/3/94

MR JACKSON:  It depends on the view that one takes as to the

meaning of the term "erroneously decided".

MASON CJ:	Yes .
MR JACKSON:	It is certainly true that in cases where, for

example, there is an appeal from the Administrative

Appeals Tribunal to the Federal Court and an issue

has not been dealt with by the Administrative

Appeals Tribunal, but a party seeks to rely on that as being a matter of law in the Federal Court, that

the issue which has arisen is whether the failure

of the Administrative Appeals Tribunal to deal with

that issue, even though the parties before that

tribunal have not themselves raised it, or have, in

fact, elected not to raise it, elected

specifically, gives rise to an error of law which

thus attracts the jurisdiction of the Federal

Court. The better view - and there seem to be

views either way, but the better, and by that I
mean the more prevailing view, seems to be that it

does amount to an error of law.

Your Honour, the two notions of there being an

error of law on the one hand and giving, albeit
brief, notice on the other hand, together are the
things that usually give rise to the giving of a

notice of contention in circumstances where the

point has not been taken below. Our submission

would be, I think, that it is difficult in terms of
subrule (5) to say that the matter has been

erroneously decided when the issue has not been

decided at all and so, Your Honour, it is probably

correct to say that giving of the notice of

contention and seeking leave on that assumption is

something that is unnecessary.

TOOHEY J: Well, with this qualification perhaps, that if

the point to be raised is a point which not only

was not taken below but which is aimed at raising a

new cause of action, it is hard to see how that

could simply be maintained without first getting

the pleader in the hands of the appellate court as	leave to amend the pleadings, and then that puts
to whether it will allow that to be done.

MR JACKSON:	Yes, Your Honour, that does involve the underlying assumption that that would give rise to
a new cause of action.  Our submission would be
that the cause of action would remain exactly the
same.  The only difference would be that the
entitlement to a remedy in rem would depend upon
one provision rather than another.

TOOHEY J: Yes, I am not necessarily relating it to this

case. I am just suggesting that there may be a

situation in which the respondent is not contending

1/3/94

. Ship(2) 80

that the court below erroneously decided anythi~g,
but nevertheless might be in the hands of the

appellate court because the pleadings have to be

amended to allow this point fairly to be raised.

MR JACKSON: Quite, Your Honour, and I accept that. The

other qualification is the one raised by

Your Honour the Chief Justice, and that is if it be

a case where there is not a need, as a matter of

construction of the rules, to give a notice of
contention, there still is.the underlying question

of whether the case is one where it is appropriate

to permit a party to take a point not raised below,

which usually would give rise to the question

whether it is an issue on which evidence could or

might have been called.

Your Honours, those are our submissions.

MASON CJ: Thank you, Mr Jackson. Yes, Mr Callaway.

MR CALLAWAY:  I am conscious that earlier this afternoon at

Your Honour's req~est I did no more than outline

what we would say on the application. There are

some things I would like to elaborate if the Court

were to consider the matter further and there are

some things that could sensibly be said in response

to what my learned friend has said.

MASON CJ: Yes, Mr Callaway, we will hear you now.

MR CALLAWAY:  I am indebted to the Court. Your Honours, may

I return to the question of the 78B notice because if I am right in my submission about that it would

be disastrously inconvenient; the Judiciary Act

would require the Court to proceed no further, for

example. I may say that I would respectfully ask

the Court to rule on that, if the Court acceded to

my learned friend's application, to rule either

that we must give fresh notices or not because we

would be in a very difficult position. If the Court would turn to page 232 of the

appeal book, reference has already been made to

paragraphs 6 and 9 of the section 78B notice and my

learned friend has understandably pointed to

paragraph 9. But if one reads paragraphs 6, 7, 8

and 9 together, it is submitted that it is

perfectly clear that what the Attorneys were told

was that:

The Respondent contends that its claim is a proprietary maritime claim ..... The Appellant contends that the Respondent's claim is not a

proprietary maritime claim -

Ship(2) 81 1/3/94

7.      The Appellant further contends that,

if ..... the Act does confer jurisdiction -

in relation to -

Sections 4(2)(a) and (b) -

nothing about 4(3), let alone 4(3)(f), it -

would be invalid -

have to be read down, and that is the light in

which 8 and 9 have to be read. No Attorney

receiving this notice would ever dream that an

argument would be mounted abc 11t the constitutional

validity of section 4(3); no Attorney could imagine

that there was going to be an argument that ships
sale contracts, although we concede they are in

4(2), are outside 4(3) because of the bearing that the personification theory has on the construction

of 76(iii). An Attorney so reading the notice

would be right because none of these issues have

ever surfaced before.

I do not resile from my offer to extemporize

the argument, but if I am right in the construction
of the 78B notice, fresh notices have to be given

and the consequences flow from the Judiciary Act.

That is the first submission.

Secondly, Your Honours, even if this does not

strictly fall within the rule relating to notices of contention, there are two things we would say.

The first is it would be ironic if a respondent is

better off who raises a point for the first time in

a final appellate court than a respondent who

raised the point below and it was adversely decided

against him and he needs to give a notice. There

seems to be a certain irony if my learned friend is

better off because section 4(3)(f) is being allowed

to surface for the first time in this Court, so

that the courts below have never had an opportunity
of deciding the relevant issue of fact or law

erroneously within the meaning of the rule.

I said there were two points. The other is

that in any case there are decisions of this Court

such as Coulton v Holcombe and Metwally v The

University of New South Wales in which the Court

has expressed in forceful language the way in which

parties become bound by the conduct of their case.

If ever there was a case which illustrates what

Your Honours said in those cases, this is it; where

both the parties in both the courts below have

conducted the case on the basis that it relates,

and relates only, to a proprietary maritime claim.

Ship(2) 82 1/3/94

MASON CJ:  But have we ever said a respondent is bound by

the way in which the case is conducted below where

all he seeks to do is to justify the judgment that

he has obtained by reference to a legal argument
which was not put in the courts below, a legal

argument that raises - - -

I would need to look at the authorities,

Your Honour, but I thought that those cases would

go that far, where a respondent wants to resile

from the way in which it pleaded and conducted its

own case. And it is a mixed question of fact and

law too. It is not a pure question of law. Let me

not characterize it, let me say to Your Honours

what is involved is looking at the joint venture

agreement and the associated documents and deciding

whether they constitute an agreement for the use or

hire of a ship within the meaning of 4(3)(f). That
is a question of law, but it is not exactly a

discrete question of law, it is a question of law

tied up with the material in the appeal book. It

requires a complete argument, but it is not just a

matter of pointing to a clause that has been

overlooked and saying this clause resolves the

matter as happened, for example, in Chalmers Leask
and Mayne Nickless. It is not like that at all.

It is a matter of looking again at the documents for the first time from the new point of view of

working out whether this agreement should be

characterized as a 4(3)(f) agreement, a point that

no one has ever explored before.

McHUGH J: Well, in Adams v Chas S. Watson the Court allowed

a party to raise a question of law which it had

conceded below.

MR CALLAWAY:	Yes, and there are other examples of courts refusing to do just that, Your Honour. Ultimately
it is a matter of what is just and convenient in a
particular case. It certainly would not be just
and convenient if the case had to come to a
grinding halt because of section 78B but I do not
want to say any more about that. Even on more
general considerations, it is not just, in our
submission, for the case to have been conducted and pleaded on the basis that we had only to concern
ourselves with section 4(2) and now responsively,
as it were, to what I said this morning, that my
learned friend needs a general maritime claim and did not have one for this point to be raised for the first time.

My learned friend this morning said that he

could have given a notice of contention as of

right. Well that over simplifies the matter

because it is always a matter for the Court whether

a party will be allowed to raise as new point in

Ship(2) 83 1/3/94

<:=ircumstances like these. \s to the pleadings, it

is a matter for my learned friend to apply for an amendment; highly inconvenient to apply for it in

this Court. It is all very well to say we can just

chop out paragraph 14 of the amended statement of
claim but, mindful of the time, if I may, I

respectfully invite the Court to read the amended

statement of claim. One has to read a pleading

fairly like other documents, and it clearly

announces that the basis on which the claim is made

is section 4(2)(a) and (b); everything is coloured

by section 14, it is the fulcrum of the case.	It
may well be that if you take it out be a happy

accident, the words will cover a claim for breach

of contract under 4(3)(f), but that is not a fair
reading of the pleading and it is not a continuing

cause of action, in our submission; if the

plaintiff's claim was right, we breached the

contract in 1987 and the limitation period of six

years has now run.

Your Honours, there is one last matter which,

if it does not go to the amendment of the pleading,

certainly, in our submission, goes to the

discretion of the·court. The amended statement of

claim does include a claim for damages, but the appeal book, why that claim was unsustainable,

and that finding has always been accepted. That

would have required a notice of contention and

there was no notice of contention in the court

below or in this Court. So if there is an

unchallenged finding that the claim for damages is
unsustainable, that would be a discretionary reason

against allowing my learned friend at this late

stage to reformulate the claim as a claim for

breach of contract.

My learned friend would be limited to a claim

for breach of contract, a general maritime claim

under 4(3)(f), the only remedy presumably being

specific performance. There is no power to order a

claim for breach of contract limited to specific	sale except under 4(2)(b), so that it would be a
performance and of course the availability of
specific performance in relation to 4(3)(f) has
never been debated before. In our respectful submission, as a matter of discretion the Court
should not permit the whole nature of this case to be changed at this very late stage to the detriment of my client and to the inconvenience of the Court
and those who have come to argue the constitutional
issue.

Ship(2) 84 1/3/94

MASON CJ:  The Court will adjourn now and will resume at

10.15 am tomorrow.

AT 4.17 PM THE MATTER WAS ADJOURNED

UNTIL WEDNESDAY, 2 MARCH 1994

1/3/94

Ship(2) 85