Patrick Stevedores No 2 Pty Ltd v The Ship “Turakina”

[1999] FCA 1463

FEDERAL COURT OF AUSTRALIA

Patrick Stevedores No 2 Pty Ltd v The Ship “Turakina” [1999] FCA 1463

ADMIRALTY – application for payment out of fund from sale of ship – payment out prior to determination of priorities – retention of funds for taxation of Marshal’s costs and expenses – distinction between legal and non-legal costs

WORDS AND PHRASES – “bill of costs”

Admiralty Act 1988 (Cth)

Admiralty Rules rr 48, 50, 65, 67, 72 and 80
Federal Court Regulations, Schedule, Items 7 and 12

The “Leoborg” (No 2) [1963] 2 Lloyd’s Rep 441, distinguished
The “Reina” (No 2) [1964] 2 Lloyd’s Rep 513, cited

Meeson, Admiralty Jurisdiction and Practice 1993, at 147
McGuffie, British Shipping Law: Admiralty Practice 1964, at par 395-396

PATRICK STEVEDORES NO 2 PTY LTD & ORS v THE SHIP “TURAKINA”
NG 114 of 1998

AND

WAITEMATA STEVEDORING SERVICES LIMITED & ORS v THE SHIP “RANGITATA” & ORS
NG 115 OF 1998

TAMBERLIN J
SYDNEY
28 OCTOBER 1999

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 114 OF 1998      (Consolidated with NG 479 of 1998 On 24 June 1998)

BETWEEN:

PATRICK STEVEDORES NO 2 PTY LTD
First Plaintiff

BREMER LANDESBANK KREDITANSTALT OLDENBURG – GIROZENTRALE -
Second Plaintiff

DEUTSCHE SCHIFFSBANK AKTIENGESELLSCHAFT
Third Plaintiff

AND:

THE SHIP "TURAKINA"
Defendant

MOBIL OIL NEW ZEALND LIMITED
Intervener

NG 115 OF 1998
(Consolidated with  NG 608 of 1998 on
1 July 1998)

BETWEEN:

WAITEMATA STEVEDORING SERVICES LIMITED
First Plaintiff

NEW ZEALAND STEVEDORES LIMITED
Second Plaintiff

BREMER LANDESBANK KREDITANSTALT OLDENBURG GIROZENTRALE
Third Plaintiff

DEUTSCHE SCHIFFSBANK AKTIENGESELLSCHAFT
Fourth Plaintiff

AND:

The SHIP “RANGITATA”
First Defendant

ECOMAR-SCHIFFARTHS GMBH & CO KG
Second Defendant

MOBIL OIL NEW ZEALAND LIMITED
Intervener

JUDGE:	TAMBERLIN J
DATE:	28 OCTOBER 1999
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. In each of these matters a Notice of Motion has been filed seeking the release of funds under the control of the Marshal to the applicant Banks (Bremer Landesbank Kreditanstalt Oldenburg-and Deutsche Schiffsbank Aktienegeselleschaft), from moneys held by the Marshal as a consequence of the sales of MV “Turakina” and MV “Rangitata”.

2. I have heard argument and made orders directing payments out of specified amounts to the Banks subject to the retention of funds on a liberal basis in order to protect the other identified claimants to the funds.  I am satisfied that sufficient notice has been given to warrant this course, and that there has been an adequate opportunity for all interested parties to appear and make representations.

3. The claimants appearing before me, after some discussion in the course of the hearing, did not raise any objection to the interim distribution being effected.  However, one matter has been raised by Mr Coleman, who appeared for the Admiralty Marshal.  He submits that as a general principle payment out should not be made until the determination of priorities has been settled, and in this regard he refers to the decision in The “Leoborg” (No 2) [1963] 2 Lloyd’s Rep 441 at 444 per Hewson J. That case is distinguishable from the present case because submissions were made in respect of claims for necessaries which his Lordship considered raised a prima facie case that they may have a priority over the first mortgagees who were seeking payment out.  No such circumstance arises in the current application.  In the case before me, taking into account that all interested parties are present and assent to payment out, I consider it appropriate to make the payment: see The “Reina” (No 2) [1964] 2 Lloyd’s Rep 513; see also the Admiralty Jurisdiction and Practice, by Meeson 1993 at 147, and McGuffie, British Shipping Law: Admiralty Practice 1964 at par 395-396.

4. In the course of submissions as to the appropriate retention amount, an issue surfaced as to whether the Marshal was entitled to claim retention of an 8% fee against the contingency of having to tax a bill of costs for the Marshal’s fees and expenses in the event that they cannot be agreed upon.

5. The Marshal submits that in the event that the parties cannot agree on the Marshal’s fees and expenses, then it will be necessary to have them taxed either under r 72 of the Admiralty Rules, which are concerned with the fees and expenses of the Marshal in connection with the valuation and sale of a ship, or the Court would order that they be taxed under the general powers of the Court in the Admiralty Rules to make orders and give directions: see rr 48, 50 and 80.

6. The Marshal then relies on Item 12 to the Federal Court of Australia Regulations, which is concerned with the fees to be paid in the Registry of the Court.  Item 12 of that Schedule, as amended, reads:

   “12     For taxing a bill of costs – for every $100.00 or part of $100.00 of the amount claimed in the bill filed … $8.” (Emphasis added)

7. It is submitted for the Marshal that provision should be made for the retention of 8% of the total amount of the Marshal’s fees and expenses including non-legal expenses before any payment out is made.

8. In my opinion this submission should not be accepted for the reasons set out below.

9. Rule 72 of the Admiralty Rules is in these terms:

   “Taxation of Marshal’s Fees and Expenses

   72(1)   The Registrar shall tax the fees and expenses of the Marshal in connection with the valuation and sale of a ship or other property ordered to be sold.

   (2)      A person who is an interested person in relation to the proceeds of the sale may appear before the Registrar on the taxation.”

10. The first matter to note about r 2 is that it is specifically limited to fees and expenses in connection with the valuation and sale of the ship or other property ordered to be sold.  It does not purport to cover any other matters.  It is correct to note that the rule is not limited to legal fees and expenses, but it covers all fees and expenses of the Marshal.  Further, the rule is cast in mandatory terms.  There was some discussion concerning the operation of r 72 in relation to whether it could be waived by agreement between all parties.  In my view, if all interested parties agree to the amount of the fees and expenses of the Marshal in relation to valuation and sale, I do not think it is necessary for the Registrar to tax the fees and expenses, although no doubt he or she would have power to do so.  The rule, in my view, only operates in a mandatory fashion where there is disagreement. 

11. The Marshal submits that a taxation under r 72 is within the description “taxing a bill of costs” in Item 12 of the Schedule to the Federal Court Regulations.  An examination of the Schedule to the Federal Court Regulations concerning fees demonstrates that it is concerned with fees relating to services provided and charges made by the Court.  However, in my view, Item 12 of the Schedule, which refers to a bill of costs, is not concerned with the Marshal’s fees and expenses at large.  It is concerned with a legal bill of costs, in the accepted sense of that term; namely, a detailed account or memorandum of legal services rendered showing the specific work done and specific charges allocated to each item.  The bill of costs in other words is concerned with fees, charges, disbursements, expenses and remuneration for work done by a person acting in the capacity of a barrister, solicitor or other authorised representative of a party in relation to legal issues or advice.  It does not, in my view, extend to cover taxation on all fees and expenses which are incurred by the Marshal in the performance of his functions under the Admiralty Act 1988 (Cth) at large. The exercise of the Marshal’s functions will involve legal costs and expenses and in the event of disagreement then it may be appropriate to tax those matters. However, the expenses of the Marshal will normally include matters such as administrative costs, overheads, disbursements and expenses which are not of a legal nature and these do not come within the provisions of Item 12.  For this reason it cannot be said that it is appropriate to retain 8% of all the Marshal’s fees and expenses against the contingency that the parties are unable to agree on an amount with the consequence that the matter must proceed to determination under the general powers given under rules 48, 50 or 80.  I think that at most it would be appropriate to retain 8% of the Marshal’s claimed legal fees and legal expenses against the contingency that these may have to be taxed.

12. In the event that there is a disagreement between the parties as to account of the Marshal for non-legal fees and expenses, Part IX of the Admiralty Rules provides for referral for the taking of an account to the Registrar and for orders as to the costs of the referral.  Rule 65 in Part IX reads as follows:

    “References to Registrar

    65In a proceeding, the court may, on application or of its own motion, make an order referring the assessment of damages, or the taking of an account, to the Registrar.”

13. Rule 67 provides that the Registrar shall determine the amount payable, and the determination may include orders as to the costs of and incidental to the reference.

14. I do not accept the submission that there should be an 8% retention of the Marshal’s general fees and expenses including non-legal matters.  However, I do think it appropriate in this case to retain an amount sufficient to cover taxation of the Marshal’s legal costs and expenses in the event of disagreement on these matters. Any costs on the assessment of the non-legal costs and expenses may be dealt with by an order of the Registrar under r 67 of the Court.

15. Having reached this conclusion I direct the parties to either bring in Short Minutes or seek any directions considered appropriate in the light of them within fourteen (14) days at a time to be arranged with my Associate.

I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin.

Associate:

Dated:             28 October 1999

Counsel for Patrick Stevedores No 2 Pty Ltd:	M Green
Solicitor for Patrick Stevedores No 2 Pty Ltd	Allen Allen & Hemsley
Counsel for Bremer Landesbank Kreditanstalt Oldenburg-Girozentrale -:	A W Street SC M Condon
Solicitor for Bremer Landesbank Kreditanstalt Oldenburg-Girozentrale -:	Norton White
Solicitor appearing for the Master and Crew of the “Turakina” and of the “Rangitata”	J Levingston of Levingstons
Solicitor appearing for the Admiralty Marshal:	Douglas Coleman
Date of Hearing:	25 August 1999
Date of Judgment:	28 October 1999