Port of Geelong Authority v The “Bass Reefer”

Re: PORT OF GEELONG AUTHORITY
And: THE SHIP "BASS REEFER"
No. V G249 of 1992
FED No. 554
Shipping and Navigation - Jurisdiction, Practice and Procedure
(1992) 37 FCR 374

COURT

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIAN DISTRICT REGISTRY
IN ADMIRALTY
GENERAL DIVISION
Foster J.(1)

CATCHWORDS

Shipping and Navigation - Admiralty Jurisdiction, Law and Practice - Admiralty Act 1988 (Cth) - ship arrested pursuant to writ in rem - whether claim for rent owing under a lease agreement relating to land used for handling cargo for the ship a maritime claim under the Act - whether licence fees under a licence agreement for priority berthing of the ship a maritime claim under the Act - which party bears onus to establish that there is a strong argument for the opinion that the Court has jurisdiction.

Shipping and Navigation - Admiralty Jurisdiction, Law and Practice - Admiralty Act 1988 (Cth) - whether claims for rent and licence fees "relate" to carriage of goods by a ship or to the use or hire of a ship under s 4(3)(f) of the Act.

Shipping and Navigation - Admiralty Jurisdiction, Law and Practice - Admiralty Act 1988 (Cth) - whether claims for rent and licence fees constitute claims for "services" supplied to the ship for its operation under s 4(3)(m) of the Act - whether supply to a ship can occur if the contract of supply does not specify and nominate the exact vessel - whether provision of sea-terminal and berthing facilities are "services" to a ship - whether "services" should be interpreted restrictively - whether "operation" to be interpreted restrictively - whether characteristics particular to a ship to be referred to in defining "operation".

Shipping and Navigation - Admiralty Jurisdiction, Law and Practice - Admiralty Act 1988 (Cth) - whether rent and licence fess fall under s 4(3)(p) of the Act - whether licence fees "tolls, charges or dues" payments in relation to a ship contemplated by s 4(3)(p) of the Act - whether payments contemplated must be imposed by a port authority pursuant to statutory rights - whether payments contemplated to be construed liberally so as to include payments arising from contract as well as statutory imposition.

Jurisdiction, Practice and Procedure - Federal Court of Australia - whether claims for rent owing and licence fees associated with acknowledged maritime claims falling within the Court's admiralty jurisdiction - whether s 12 of the Admiralty Act 1988 (Cth) and s 32 of the Federal Court of Australia Act 1976 (Cth) allow conversion of in personam actions in admiralty to actions in rem.

Federal Court of Australia Act 1976 (Cth) - s 32.

Admiralty Act 1988 (Cth) - s 3, s 4, s 4(3), s 4(3)(f), s 4(3)(j), s 4(3)(k), s 4(3)(m), s 4(3)(p), s 12, s 18.

Port of Geelong Authority Act 1958 (Vic) - s 24.

Supreme Court Act 1981 (UK) - s 20(2)(h), s 20(2)(m).

Admiralty Act 1973 (NZ) - s 331.

Empire Shipping Co Inc v Owners of the Ship "Shin Kobe Maru" (1991) 104 ALR 489

Gatoil International Inc v Arkwright-Boston Manufacturers Mutual Insurance Co (1985) AC 255

The "River Rima" (1988) WLR 758

Corps v Owners of the Paddle Steamer "Queen of the South" (1968) P 449

The "River Rima" (1987) 2 Lloyd's Rep 106

HEARING

SYDNEY

#DATE 6:8:1992

Counsel for the Plaintiff: Mr A.W. Street

Instructed by: Phillips Fox

Counsel for the Defendant: Mr G. Nell

Instructed by: Norton Smith and Co.

ORDER

THE COURT ORDERS THAT:

1. the motion be dismissed;

2. the defendant pay the plaintiff's costs.

Note: Settlement and entry of orders is dealt with by Order 36 of the Federal Court Rules.

JUDGE1

The defendant, the ship "Bass Reefer", was arrested in Townsville on 9 July 1992 pursuant to a writ in rem taken out in this Court by the plaintiff on 3 July 1992. By this notice of motion, it is sought that the writ in rem be set aside except to the extent that it contains a claim for stevedoring services. It is also sought that the arrest of the defendant vessel be set aside or alternatively that the vessel be released from arrest. Consequential orders are also sought.

The writ claims the amount of $577,481.02. The particulars with the writ assert that the plaintiff, the Port of Geelong Authority, ("the Authority") is capable of bringing the proceedings pursuant to the Port of Geelong Authority Act 1958 (Vic) (the "Authority Act"). It also asserts that the defendant is a vessel chartered to Bass Express Ships Limited (the "charterer") and that that company is a "relevant person" in relation to a maritime claim pursuant to the Admiralty Act 1988 (Cth) (the "Act"). There is no dispute as to the correctness of these assertions. Bass Express Ships Limited was a relevant person at the time of issue of the writ because it was the demise charterer of the defendant ship. The balance of the writ reads as follows:-

"5. Pursuant to two written agreements between the plaintiff and the charterer dated the 12th day of January, 1992 and a further agreement consisting of an exchange of correspondence between the plaintiff and the charterer (hereinafter referred to as "the agreements") the plaintiff provided the charterer with the following facilities for the ship: 5.1 the lease of land;

5.2 a priority berthing licence; and 5.3 stevedoring services.

6. In respect of the facilities provided by the plaintiff to the charterer pursuant to the agreement during the period between the 1st day of August 1991 and the 2nd day of July 1992 the charterer is indebted to the plaintiff in the sum of five hundred and seventy seven thousand, four hundred and eighty one dollars and two cents (hereinafter referred to as "the debt").

7. The debt consists substantially of non-current outstanding accounts for which the charterer has been invoiced by the plaintiff.

8. The charterer has failed or refused to pay the amount of the debt to the plaintiff and it remains outstanding and due."

Although there has been some debate about the matter, I am clearly of the view that the only way in which the writ can be read is as a claim totalling the figure referred to and based upon the three sources set out in paragraph 5. It was submitted on behalf of the Authority that paragraph 7 of the writ was capable of being construed so as to cover a number of other items the subject of invoices sent from the Authority to the charterer. It was asserted that these invoices could be, as is no doubt correct, the subject of common indebitatus counts unrelated to the subject matters referred to in the three sub-paragraphs of paragraph 5. As already indicated, I do not accept this contention. I am satisfied that claims of this kind fall outside the writ as presently framed. Against the possibility of such a finding, counsel for the Authority has sought leave to amend the writ to include these claims. The amendments are opposed. I shall refer to this matter later. I shall deal in the first place with the issues that are raised in relation to the writ as presently framed.
After the issue of the writ and before the arrest of the defendant vessel, correspondence between the legal representatives of the Authority and the charterer in relation to the writ established that the amount claimed under the heading of "stevedoring services" was $99,042.02, the balance of the amount in the writ being attributable to claims under the lease and licence agreement referred to. On the basis that the amount claimed for stevedoring services was indisputably a maritime claim within the meaning of the Act, this amount was paid into Court on behalf of the defendant. The Authority, however, asserted that the claims in respect of the lease and licence agreements were also maritime claims. Consequently, it insisted upon the arrest of the ship notwithstanding the payment in. The defendant ship was accordingly arrested and remains arrested under the writ.
The defendant asserts by its notice of motion that the only valid maritime claim contained in the writ is the claim for stevedoring services. It submits that the balance of the claims are not maritime claims within the meaning of the Act. Consequently, it contends that, apart from the claim for stevedoring services, there was no jurisdiction to issue the writ. Now that the amount of the stevedoring services has been paid into Court, it is put, that the writ should be set aside or, alternatively, the vessel should be released from its current arrest. A difficulty in relation to these arguments emerged during the course of the hearing, namely that certain charges levied under the licence agreement were in fact ordinary tonnage charges in relation to the vessel. As such they were maritime charges which could form the basis of valid maritime claims. As I understand it, the defendant accepts the correctness of this position and seeks the release of the vessel subject to the payment into Court of an appropriate amount to cover these charges. This question can be put to one side pending the resolution of the major questions in the case, namely whether amounts claimed for rent under the lease agreement and for licence fees under the licence agreement constitute valid maritime claims. If both or either of them are such claims, then the writ as currently framed would remain a valid writ in rem. It could not be set aside and release of the vessel from arrest could be effected only in response to a significantly greater payment into Court.
Before turning to a consideration of the relevant provisions of the legislation, it is necessary briefly to review the salient facts of the matter. From the evidence placed before the Court, these facts appear as follows.
The defendant vessel was and is a specialised freight carrying vessel. It is capable of carrying goods in containers and it has also roll-on/roll-off goods carrying capacity. It was chartered by the charterer under a demise charter for the purpose of its being employed in the carriage of goods between the Port of Geelong in Victoria and the Port of Stanley in Tasmania. It advertised and adhered to a regular schedule which involved it in carrying substantial cargoes from Victoria to Tasmania on a daily basis. Accordingly, it returned to port in Geelong every second day. It worked to this schedule from January 1992 to the end of June 1992 when, as a result of losing a major freight contract, the service became financially unviable and was terminated. The vessel proceeded to Townsville for maintenance and refitting. The demise charter has now also been terminated.
For the purposes of the freight service conducted by the charterer between the two ports, it was necessary for it to have the use of a substantial area of land adjoining the berth used by the ship in the port of Geelong for the purpose of handling container cargo for the ship. The containers were assembled in this area for the purpose of their being filled and loaded onto the defendant vessel. The area was also used for the receiving of containers unloaded from the vessel after its arrival at the port from Tasmania. The land in question had an area of approximately .59 hectares. It had upon it a building containing office premises necessary for use by the charterer in the conduct of its business. The land and premises were vested in the Authority which had power to lease them under s 24 of the Authority Act. It is clear that the use of the land and office for the purposes described was necessary for the charterer's conduct of the freight service. Accordingly, on 12 January 1992 it entered into a lease between itself and the Authority under which the Authority demised to the charterer as lessee the land and premises for a period of 3 years at a rental fixed by the terms of agreement.
It was a term of the lease that the charterer would "use the demised premises solely in conjunction with the operation of the Stanley/Geelong Freight service referred to in a priority berthing Licence running concurrently herewith and made between the parties hereto...".
The priority berthing licence referred to in this portion of the lease is the licence referred to in the writ. It was created by a written agreement entered into at the same time as the lease. Under this agreement the charterer received "priority berthing rights" at a berthing facility owned and controlled by the Authority in the port of Geelong and known as "Corio Quay South".
Relevant operative clauses of the licence agreement read as follows:-

"1. The Authority hereby authorizes and licences the Licensee (subject to the limitations hereinafter specified and to the Authority's regulations contained in Statutory Rule No. 343 of 1972) to occupy (in priority over all others) Corio Quay (No. 1) South and facilities for the berthing of a vessel or vessels employed by the Licensee in its freight service between Stanley and Geelong.

2. The Authority hereby authorizes and licences the Licensee to load and discharge freight onto and from such vessel or vessels at such berth and the land at its western end from and to the Authority's land leased to the Licensee by a Lease bearing even date herewith and made between the parties hereto and running concurrently herewith.

3. This Licence operates for three years ("the term") from the first day of October 1990 (the "commencing date")."

It was further provided that:-

"6. The Authority and the Licensee mutually agree:-

(a) that the Authority shall have the right to use or to hire the berth aforesaid to anyone else only when it is not required by the Licensee."

In consideration of receiving these rights the charterer as licensee was required to pay an annual fee of $300,000 for the first year of the term and increased annual fees for the second and third year. It was also required, inter alia, to pay the tonnage rates "charged in accordance with the Authority's General Tariff Schedule as applicable, from time to time, payable within 30 days after the date of each monthly account for the same rendered by the Authority". These are the tonnage rates to which I have made reference and which are accepted as forming part of the amount claimed in the writ and also as being maritime claims within the meaning of the Act.
The berth had a ramp appropriate for the embarking and disembarking of roll-on/roll-off cargo. The area of the berth covered by the licence adjoined the area covered by the lease so that the two areas could be used in conjunction for the purposes of the charterer's freight service. It appears, also, that there were facilities for the supply of electricity to refrigerated containers awaiting loading onto the defendant vessel or being stored on the leased area after discharge from that vessel. Electricity was supplied by the Authority to the charterer for these purposes. Charges were made under invoices rendered from time to time. It appears that these charges are not covered by the claims in the writ although payment for them is outstanding. They are sought to be covered by the amendments to which I have already made reference.
It may be noted that, despite the reference to vessel or vessels in the lease and licence documents, it was only the defendant vessel, "Bass Reefer", which was used by the charterer for the performance of the freight service. It would appear, at least so far as the evidence goes at present, that it was never contemplated between the parties that any other vessel should be used for the performance of the service. Accordingly it was the only vessel to use the priority berthing facility at Corio Quay South.
The Authority makes substantial claims for unpaid rental under the lease agreement and for unpaid licence fees under the priority berthing licence agreement.
It appears that the parties also entered into an agreement referred to as "an agreement for the lease of equipment" on 3 January 1992. It seems that this related to the leasing of equipment to be used at the Corio Quay South or Stanley Wharf Tasmania. Although there are claims being made in respect of monies allegedly outstanding under this agreement, these claims are not covered by the writ in its current form.
I turn, then, to the claims made in respect of the lease and licence agreement and the question whether they could validly be the subject of a writ in rem against the defendant ship.
It seems clear that, a challenge having been made by the defendant to jurisdiction, it devolves upon the plaintiff at this stage to establish to the Court's satisfaction that on consideration of the material placed before it on the motion there is a strong argument for the opinion that the Court has jurisdiction. (Empire Shipping Co Inc v Owners of the Ship "Shin Kobe Maru" ("The Shin Kobe Maru") (1991) 104 ALR 489 ). It is not necessary that the Court be now satisfied as to jurisdiction on the balance of probabilities.
As indicated in the explanatory memorandum circulated with the Admiralty Bill 1988, the purpose of the Act is "to provide for the Admiralty jurisdiction of Australian Courts, in a form which is comprehensive, accessible, and consistent with Australian needs and with international standards concerning civil jurisdiction over ships". The object of the legislation is the regulation of "Admiralty jurisdiction of Australian Courts both in actions in rem and in personam". It is clear that the Act is "based upon a report and recommendations of the Australian Law Reform Commission (ALRC. No. 33, Civil Admiralty Jurisdiction (1986))". This is a most comprehensive document and, as the explanatory memorandum states, "involved a thorough review of developments in other countries and at the international level" in respect to admiralty law and jurisdiction. It is necessary to refer briefly to the structure of the Act so far as it applies to the questions for decision in this notice of motion.
Section 18 deals with the right to proceed in rem on a demise charterer's liabilities. It provides as follows:-

"18. Where, in relation to a maritime claim concerning a ship, a relevant person:

(a) was, when the cause of action arose, the owner or charterer, or in possession or control, of the ship; and

(b) is, when the proceeding is commenced, a demise charterer of the ship;

a proceeding on the claim may be commenced as an action in rem against the ship."

A "relevant person" is defined in s 3 as a person who, in relation to a maritime claim, would be "liable on the claim in a proceeding commenced as an action in personam". As I have already indicated there is no dispute in these proceedings that the charterer was "a relevant person". Nor is there any dispute that the requirements of s 18 are made out in relation to the writ in rem in these proceedings other than the requirement that the claims relating to the lease and licence agreement be maritime claims.
A "maritime claim" is defined in s 3 as having the meanings given in s 4. Section 4 provides for two types of maritime claims, a "proprietary maritime claim" which is not relevant in these proceedings and a "general maritime claim" which is relevant. The provisions of the section which relate to such claims and which are relied upon by the plaintiff for the purpose of establishing jurisdiction in these proceedings are as follows:-

"4(3) A reference in this Act to a general maritime claim is a reference to:

...

(f) a claim arising out of an agreement that relates to the carriage of goods or persons by a ship or to the use or hire of a ship, whether by charterparty or otherwise; ...

(m) a claim in respect of goods, materials or services (including stevedoring and lighterage services) supplied or to be supplied to a ship for its operation or maintenance;

...

(p) a claim in respect of a liability for port, harbour, canal or light tolls, charges or dues, or tolls, charges or dues of a similar kind, in relation to a ship; ..."

The plaintiff submits that the claim for rent under the lease agreement and the claim for fees under the licence agreement are each maritime claims within the meaning of paragraph (f). Each agreement is said to be one that relates to the carriage of goods by a ship or to the use or hire of a ship.

In advancing this proposition the plaintiff accepts that the phrase "by charterparty or otherwise" refers to the "agreement" out of which the claim arises. Although one can envisage a construction that would relate that phrase to the words "carriage" and "use or hire" with the result that the "agreement" first mentioned in the sub-section could be one that related to a separate agreement for carriage, use or hire by charterparty or otherwise, I do not find it necessary to resolve this question. Whether the agreement from which the claim arises must be one "by charterparty or otherwise" (whatever those words may mean), it must "relate to" the carriage of goods by a ship or the use or hire of a ship. There is, therefore, a fundamental question as to whether the lease or the licence agreements can be said so to relate.
It may be acknowledged that the phrase "relates to" is one of fairly wide import. It is clear, however, that it is not apt to embrace relationships of a remote or tenuous kind. In "Shin Kobe Maru" at 505, Gummow J referred to, as authority for this proposition, the speech of Lord Keith of Kinkel in Gatoil International Inc v Arkwright-Boston Manufacturers Mutual Insurance Co (1985) AC 255 at 270-1 where his Lordship said:-

"It is necessary to attribute due significance to the circumstance that the words of the relevant paragraphs speak of an agreement 'in relation to' not 'for' the carriage of goods in a ship and the use or hire of a ship. The meaning must be wider than would be conveyed by the particle 'for'. It would, on the other hand, be unreasonable to infer from the expression actually used, 'in relation to', that it is intended to be sufficient that the agreement in issue should be in some way connected, however remotely, with the carriage of goods in a ship or with the use or hire of a ship... There must, in my opinion, be some reasonably direct connection with such activities. An agreement for the cancellation of a contract for the carriage of goods in a ship or for the use or hire of a ship would, I think, show a sufficiently direct connection... Each case would require to be decided on its own facts. As regards the contract of insurance founded on in the instant appeal, I am of the opinion that it is not connected with the carriage of goods in a ship in a sufficiently direct sense..."

Gatoil was a case which involved consideration of s 20(2)(h) of the Supreme Court Act 1981 (UK) which conferred Admiralty jurisdiction on the English High Court of Justice to determine "any claim arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship". It may be noted, of course, that there are obvious differences between the formulation of this head of jurisdiction and that in s 4(3)(f) of the Act. It may well be that the introduction of the phrase "by charterparty or otherwise" was intended to overcome the problem that previously existed that proceedings on a charterparty could not be brought in admiralty (see Hetherington, Annotated Admiralty Legislation p 41). Regard may be also had to the fact that the International Convention For The Unification of Certain Rules Relating To The Arrest of Seagoing Ships 1952 (the "Arrest Convention") art 1(1) refers to (d) "agreement relating to the use or hire of any ship whether by charterparty or otherwise" and (e) "agreement relating to the carriage of goods in any ship whether by charterparty or otherwise". No doubt, the formulation of this article had a bearing upon the final form of s 4(3)(f) of the Act.
However, these differences, however significant they may be in other connections do not, in my opinion, diminish the significance of the passage just cited. I ask myself, therefore, whether the agreement for lease in this case relevantly relates to the carriage of goods by the defendant ship or to its use or hire. I apply the test as to whether there is a strong argument for the existence of a reasonably direct connection between either of these agreements and those activities. I am satisfied that there is not. So far as connection with the carriage of goods by the defendant ship, it is not unreasonable to bear in mind that the decision in Gatoil rejected the contention that the contract of insurance of goods so carried was sufficiently connected. In the present case, so far as the lease is concerned, its purpose and effect, as previously indicated, was to provide a conveniently close area for the receipt of cargo from the ship and the assembly of cargo to be taken on board the ship. It might conceivably be said that these procedures had a connection with the operations of loading and unloading cargo to and from the ship. I express no concluded view as to that. However, I am satisfied that there is no reasonably direct connection between them and the actual carriage of goods by the ship. There is even less connection, in my view, between those activities and the use or hire of the ship. The licence agreement, the main feature of which was to provide priority berthing for the ship at the nominated berth has, in my opinion, no reasonably direct connection with the carriage of goods by the ship. Although the licence agreement has the effect of providing a regular berth for the ship, the effect of this is to provide a facility, at best, for use by the ship. It does not have any significant connection with the use of the ship itself. Finally, I can see no significant connection between the licence agreement and the hire of the ship.
Accordingly, I hold that no strong argument for jurisdiction has been demonstrated as arising from the application of s 4(3)(f) of the Act to the claims under the lease or the licence agreement.
I turn, then to consider the claimed head of jurisdiction arising from s 4(3)(m).
It may be said immediately that the claims for rental and licence fees are not claims in respect of goods or materials. The question is whether there is a strong argument that they constitute claims for services supplied to the ship for its operation, there being, of course, no suggestion that they were supplied for its maintenance.
On the evidence before me it is certainly strongly arguable that the sea-terminal conducted by the charterer on the leased land and the availability to it of priority berthing at the berth provided under the licensing agreement were highly necessary for the viable operation of the advertised freight service conducted between the Port of Geelong and the Port of Stanley. It is also clear that the service was to be operated through the use of the defendant ship. Against this background, it is convenient to consider first the question whether, within the meaning of the sub-section, these facilities were supplied to the ship, or, at least, whether there exists a strong argument to that effect.
For the defendant it is submitted that the sea-terminal and berth could never properly be regarded as having been supplied to the ship under the agreements between the Authority and the charterer. Put succinctly, the submission on behalf of the defendant is that these facilities were supplied to the charterer for the purpose of its conducting its freight service. They were not in any real sense supplied to the ship as such. The point was made that admiralty actions in rem contemplate the vessel against which the action is brought as having a persona of its own distinct from that of the shipowner or charterer or the business conducted by those persons. In furtherance of this submission reliance was placed on the fact that neither the lease agreement nor the licence agreement refer to the defendant ship, despite the fact that it was the only ship used by the charterer for the service. Clearly enough, the agreements would have enabled the charterer to avail itself of the facilities provided whatever ship it used on the Geelong-Stanley run.
In support of this submission counsel for the defendant relied upon the decision of the House of Lords in The "River Rima" (1988) WLR 758. The facts of the case may be stated briefly. The appellants were in the business of renting cargo containers to shipowners. The respondents owned and operated a fleet of cargo vessels, one of which was the "River Rima". This ship was arrested pursuant to an action in rem brought by the appellants. The cause of action specified in the writ was damages for conversion to containers supplied to that ship pursuant to an agreement and damages for breach of the agreement through failing to maintain the containers in good condition of repair. There was no term in the agreement relating to the use to which the hired containers were to be put. Nor was there any requirement that the containers would be used by any of the defendants' ships. The defendants sought the setting aside of the writ and the arrest on the grounds that the claim was outside the jurisdiction of the Admiralty Court and, consequently, could not found an action in rem.
At first instance the writ was upheld on the basis that the containers were "goods... supplied to a ship for her operation" within the meaning of s 20(2)(m) of the Supreme Court Act 1981 (UK). This decision was reversed on appeal by the Court of Appeal. The reversal was upheld by the House of Lords.
The speech of Lord Brandon of Oakbrook, with which the other Lords concurred, contains the following passages, (at 762 et seq):-

"The main question to be decided can ... be simplified to this: whether each of the series of claims relating to individual containers made by (the appellant) is a claim in respect of a container supplied to a ship for her operation within the meaning of paragraph (m). This question can be divided into two points: first, whether each such containers was supplied to a ship; and, secondly, if so, whether it was supplied for her operation.

(The appellant's) case on what I have described as the main question to be decided was based on four propositions, as follows. First, although the leasing agreement did not specify the use to which containers hired under it were to be put, it is clear from the commercial background of the agreement that the containers were intended to be used, during part of the periods for which they were hired, in being carried, after being previously stuffed with cargo on land, on board one or more of the ships of (the respondent). Secondly, it is likely, though it cannot be proved with certainty at this stage, that each of the containers to which the series of claims made by (the appellants) relates, was in fact so used. Thirdly, the use of a container, after being previously stuffed with cargo on land, on board a ship designed to carry containers, as all the ships of (the respondent) were, is a use for the operation of such a ship within the meaning of paragraph (m). Fourthly, it is not necessary, in order to constitute the supply of a container to a ship within the meaning of paragraph (m), that the identity of the ship for the operation of which it is to be used should be specified in the contract of hire, or even notified to the supplier by the time of delivery of the container under such contract. It is sufficient if it is the common intention and expectation of the parties to the contract of supply that the container will, at some time during the period of its hire, be used for the operation of some ship. If these four propositions are correct, it follows, according to (the appellant's) case, that each of the series of claims made by them is within paragraph (m) and therefore within the Admiralty jurisdiction of the High Court. My Lords, the first, second and third propositions relied on by (the appellant) may well be correct, and I am prepared to assume, without deciding, that they are. The fourth proposition, however, appears to me to present great difficulty. It is clear that paragraph (m) contemplates a contract of supply, whether by way of sale or hire, between the claimant and a shipowner. But the expression used in paragraph (m) is 'supplied to a ship' and not 'supplied to a shipowner'. The question is what meaning should be given to the former expression. There are two main kinds of contract pursuant to which goods or materials required for the operation of a ship may reach her. The first kind of contract is one which expressly provides that the goods or materials are required for the use of a particular ship, the identity of which is specified in the contract or will be specified by the time when the contract comes to be performed. The second kind of contract is one which contains no reference to a particular ship for the use of which the goods or materials are required, leaving the shipowner to make his own decision about that later. The first kind of contract is, in my opinion, a contract under which goods or materials are 'supplied to a ship' within the meaning of paragraph (m). The second kind of contract, however, is, in my opinion, not a contract for goods or materials to be 'supplied to a ship' within the meaning of paragraph (m). It is no more than a contract for the supply of goods or materials to a shipowner, and as such does not come within paragraph (m).

In the present case the series of contracts made between (the appellant) and (the respondent) for the hire of individual containers were not contracts of the first kind described above, but contracts of the second kind. It follows that claims in respect of them do not come within paragraph (m) and are not therefore within the Admiralty jurisdiction of the High Court."

His Lordship went on to consider the historical background of the section which he concluded afforded strong support for his construction of the section. He demonstrated an historical connection with earlier actions in rem which could be brought in respect for claims for necessaries supplied to a ship. In such proceedings, he pointed out, (at 765):-

"...it was an essential ingredient of such a claim that it should relate to necessaries supplied to a particular ship, the identity of which had either been specified in the contract of supply, or at least notified to the supplier by the time when the necessaries came to be delivered under such contract."

Counsel for the defendant, in these proceedings, relies upon this reasoning to found the submission that the provision of the sea-terminal and the priority berthing facility was not a provision to the defendant ship of these facilities but a provision of them to the charterer.
I am not persuaded that The River Rima is authority for the wide proposition that there can be no supply to a ship unless the contract of supply specifies and nominates the vessel. It is clear that the relevant contract in The River Rima was one of the second kind referred to by Lord Brandon. The containers were leased to the respondent who could then, at his discretion, use them for his own ships or for other ships. It was not difficult in such circumstances to characterise the supply of containers as a supply to the other contracting party rather than to the ship in which they were ultimately placed. In such circumstances it was not necessary for the first kind of contract referred to by Lord Brandon to be analysed with any greater degree of particularity than appears in the speech. His Lordship's use of the expression "or will be specified by the time the contract comes to be performed" does not, in my respectful opinion, mean that his Lordship was laying down a requirement that there should be some express specification by the contracting parties of the identity of the ship at the time of performance of the contract of supply. Such specification could occur by way of implication from the circumstances obtaining at the time when supply was actually made to the ship, especially where the act of supplying was performed by the supplier himself and not, as in The River Rima, by the other party to the contract in exercise of an independent discretion.
Consequently, I am of the opinion that The River Rima does not prevent the mounting of an argument in the present case that there was a supply of facilities to the ship, notwithstanding that the contracts did not refer to the ship specifically. The sub-section itself refers to "services supplied to a ship". In my view, the matter must be looked at as at the time when services were supplied and the question determined as at that time, as a question of fact: was there supply to a ship within the meaning of the sub-section? That investigation cannot be foreclosed by the fact that there was a formal contract of supply in existence which made no reference to the particular vessel.
The plaintiff also submits that the provision of the sea-terminal and berthing facilities under the respective agreements could not arguably amount to a supply of "services" to a ship. It is submitted that they simply do not fall within the concept of services which may be supplied to a ship as opposed to a shipowner or charterer. As I understand it this argument is independent of the previous argument with which I have just dealt. It relates to the concept of a ship having a persona in admiralty law such that anything supplied to it as opposed to its owner or operator must be supplied to it in a direct and tangible way. It must be noted, also, that the section requires that it be supplied "for its operation". It was put, as I understand, that the limiting effect of these two considerations necessarily resulted in the restriction of "services", within the meaning of the section, to those characterised by the provision of work and labour for the direct benefit of the ship. It was submitted that this construction was also indicated by "services" in the sub-section being put as an alternative to "goods" and "materials". Typical examples of such services were said to be stevedoring and lighterage (which are specifically provided for), towing, mooring and the like.
It must be observed that the term is an addition appearing for the first time in the Act. The Supreme Court Act 1981 (UK) allows only "any claim in respect of goods or materials supplied to a ship for her operation or maintenance" (s 20(2)(m)). Section 331 of the Admiralty Act 1973 (NZ) is in the same terms as the Supreme Court Act 1981 (UK). The New Zealand legislation, however, provides for "any claim in respect of work done in connection with the loading or discharging of cargo or fuel on or from a ship: provided that no ship shall be liable to arrest in respect of any such claim". Consequently, in New Zealand, claims for stevedoring can be brought only in personam. Additionally, it may be noted that the Arrest Convention makes no provision for stevedores' claims. Article 1(1)(k) of the Convention is in the same terms as the English legislation.
Other obvious examples of services such as towage and pilotage are specifically provided for in sub-ss 4(3)(j) and (k) respectively.
Although it is reasonable to envisage some overlapping between the various sub-paragraphs of s 4(3), it is also reasonable, in my opinion, to assume that the word "services" in sub-s 4(3)(m) was intended to do extra work and cover more areas than those specifically provided for elsewhere in the other sub-sections. Clearly enough, it would cover assistance in the mooring of the vessel by line-handling and the like, activities which were held in Corps v The Owners of the Paddle Steamer "Queen of the South" ("The Queen of the South") (1968) P 449, not to fall within the concept of the supply of goods and materials.
I can see no warrant for restricting the term "services" to benefits provided by way of work and labour as opposed to the provision of goods and materials. I reject this narrow view of the meaning of the word.
Of course, whatever meaning is attributed to the word "services", it remains the position that they must be provided "to" the ship "for its operation". I consider these restrictions are sufficient to prevent the lease rental being claimable under this sub-section. The provision of a sea-terminal storage area for a ship's cargo is not, in my view, sufficiently proximate to the operation of the ship as such, to warrant its falling within this head of claim. It relates to the handling of cargo removed in time and place from the operation of loading and unloading of the ship itself. Moreover, I consider that the leasing of the land, despite its proximity to the wharf, is best viewed as the provision of a facility to the charterer. In these circumstances it is unnecessary to consider whether the leasing of the land should be regarded as the supply of a "service".

What view should be taken of the priority berthing rights provided by the licence agreement? In the first place, can the provision of such a right be properly regarded as the supplying of a "service"? The absence of any element of work and labour does not prevent it being so regarded, but does it otherwise fall within the concept?
Although the word "service" is one in very common use, it has a surprisingly diverse range of meanings. Reference to standard dictionaries demonstrates that from an etymological origin in the latin words for "slavery" and "slave", the word has come to be applied in fields as disparate as domestic employment, the armed forces, state bureaucracy, the provision of gas, water and electricity to buildings, transport in accordance with regular timetables, legal procedures, animal procreative activity, religious ritual, and tennis. There is undoubted difficulty in finding a common thread of meaning. Nevertheless, meaning must be attributed to the word as used in this sub-section.
In my view, it may be regarded as plain that the use of the term "services" is indicative of an intention by the legislature to cover a wider field of activity than that previously covered by the concept of the supply of "necessaries", although, clearly enough, claims previously held as being for necessaries such as dock dues, canal dues, custom house and immigration service fees, telegrams and disbursements for quay rent would fall within the concept (see Hetherington, Annotated Admiralty Legislation p 47).
I approach the matter, then, in the context that there is an obvious legislative intent to provide a more expansive area of claim than that comprehended in the supply of goods and materials or "necessaries". It is both unnecessary and unwise to essay a comprehensive definition of the term. In my view, it embraces the supply of facilities to a ship not comprehended in the supply of "goods" and "materials" and the other services expressly provided for in the other sub-sections. The provision of fuel and water may well be obvious examples, unless they can be regarded as goods or materials. Painting and anti-fouling may well qualify. However, I do not see any reason why a service to a ship need be confined to relatively simple matters of this kind. The making available to a ship of any facility which it needs may well amount to the supplying of a service. Such a facility must be supplied to a ship in a reasonably direct sense and not merely supplied to the owner or demise-charterer for the ship. Moreover, it must be supplied to the ship "for its operation". Both these requirements must influence, in any given situation, the decision as to whether a particular matter can properly be regarded as a "service".
I am of the view that the term "operation" should not be confined in its interpretation to matters relating to the mere movement or propulsion of the ship form one port to another. In The "River Rima" in the Court of Appeal (1987) 2 Lloyd's Rep 106 at 113, Nourse L.J. said in relation to the supply of the containers under consideration that he was "also prepared to accept that it is possible to concede of a state of affairs in which they would have been goods supplied to a ship for the operation". He did not consider that such a state of affairs had been disclosed on the evidence. In the circumstances of the case he found that the containers had been provided to the shippers rather than to the ship. In the House of Lords, Lord Brandon was prepared to assume without deciding that "the use of a container...on board a ship designed to carry containers...is a use for the operation of such a ship within the meaning of paragraph (m)" ((1988) WLR 758 at 762-3). I can see no valid reason for excluding from the concept of "operation of a ship" considerations relating to any special characteristics of the ship, such as its being a freighter or tanker or to any special use or voyage upon which it may be engaged, at least when these latter factors were reasonably within the contemplation of the supplier of the services and the operator of the ship.
In the present case, the defendant vessel was engaged in a specialised service between the Port of Geelong and the Port of Stanley. It was a freight carrying service conducted in accordance with a necessarily strict timetable. The evidence establishes clearly that the acquisition of priority berthing rights was a highly useful if not necessary adjunct to this service. The berthing of a vessel at a quay in a port is, in my view, an activity which supplies a facility to the vessel itself in a way that the provision of a sea-terminal, even one adjoining the dock, does not. It is strongly arguable that it is sufficiently "personal" to the ship to amount to a service supplied to it and not merely to the owner or charterer. Whilst it is true that the charges payable under the licensing agreement are not made in respect of individual berthings, but constitute a flat annual rate to cover the use of the quay by any vessel used by the charterer for the Geelong/Stanley service, it is, nevertheless, in my view, simply arguable that they are sufficiently attached to the use of the berth by the defendant vessel to constitute their claims for services supplied to it. I am also satisfied that the priority berthing services were supplied to the defendant ship for its operation. I therefore hold that a strong argument exists that the licence fees claimed in the writ fall within s 4(3)(m).
Can it be strongly argued that the rental and/or licence fee claims fall under s 4(3)(p) of the Act? This is a new provision not previously included in Admiralty legislation. As was noted in the report of the Law Reform Commission, the Acts under which public port authorities operate in Australia make provision for port tolls, charges and dues and for the securing of their payment. This is normally achieved by legislative provision for the detention of the ship in the port pending the payment of amounts owing. The authors of the report expressed the view that it was desirable that such claims be justiciable in the admiralty jurisdiction by way of an action in rem. Accordingly the recommendation was made that the jurisdiction be conferred. This recommendation was adopted by the legislature. It is to be noted that the jurisdiction has been conferred not only in respect of the tolls, charges and dues set out, but also in respect of "tolls, charges or dues of a similar kind". The amounts must also be owed "in relation to a ship".
I am satisfied that no strong argument can be made for a claim that the amounts owing under the rental agreement are amounts owing "in relation to a ship". I do not consider that rent payable in respect of land leased for the sea-terminal even thought to be used for the assemblage and receipt of cargo can be said to have a sufficiently direct connection with the defendant vessel. I would therefore hold this aspect of the claim inappropriate for a writ in rem based upon this sub-section.
For reasons I have already advanced I am of the view that a sufficiently strong argument exists for the contention that fees paid in respect of the priority berthing of the vessel are sufficiently connected with the ship as to characterise the payments as being made "in relation to" it. Do these fees, however, fall within the sub-section as being "tolls, charges or dues" of any of the types contemplated? The possible categories would be port or harbour tolls, charges or dues, or tolls charges or dues of a similar kind to them. The defendant argues against their inclusion, on the basis that the tolls, charges and dues referred to are of a well recognised traditional kind and have the common characteristic that they are imposed upon vessels by the port authority pursuant to statutory rights in that regard. Thus, the Authority's General Tariff includes tonnage and wharfage charges, being charges imposed on the cargo itself. It was submitted that charges of the type contemplated in the sub-section were never sourced in contract but arose by way of statutory and regulatory imposition. For the plaintiff it is contended that the sub-section should be given a liberal construction. It evinces a legislative intention not only to include as maritime claims, subject to admiralty jurisdiction, the tolls, charges and dues previously subject only to statutory rights of security by detention in the port of the charging authority, but also to extend the jurisdiction to those charges which could be described as being of a similar kind.
The question is, ultimately, whether the fact that the licence fees for priority berthing in the present case arose from contract rather than from statutory imposition prevents them being charges "of a similar kind". In other words, is statutory imposition an essential ingredient in similarity, so far as the sub-section is concerned? With some hesitation, I have come to the conclusion that an adequately strong argument can be made that it is not. If a charge for berthing a ship arising out of contract between the shipowner or charterer and the port authority is otherwise sufficiently similar to a charge that might be imposed under statute or regulation, then the mere fact that it has a contractual origin does not prevent it being a similar charge within the meaning of the sub-section. Indeed, evidence was given in the case that fees payable for the priority berthing licence were, in effect, a substitute for wharfage charges that would otherwise have been applicable. They therefore took the place of a charge or due which would clearly have fallen within the sub-section as a traditional charge or due.
I am, therefore, of the opinion that a sufficiently strong argument exists for the inclusion in the writ of the very substantial amount claimed for unpaid licence fees under the priority berthing agreement. Additionally the amounts claimed for tonnage to which I have already made reference are conceded as falling within the writ and as not having been the subject of payment into Court. It has not been suggested that there has been or will be any payment into Court in respect of the licence fees. In these circumstances I must refuse the application to set aside the writ or to release the vessel from arrest.
I should add that the plaintiff sought to have the amounts claimed for rental and licence fees included in the writ on the basis that they could be regarded as claims associated with acknowledged maritime claims falling within the jurisdiction. Reliance was placed upon s 12 of Act and also s 32 of the Federal Court of Australia Act 1976 (Cth). In the circumstances it is not necessary for me to express a concluded view. However, I am very far from being persuaded that the application of either section can operate to convert an action in personam in admiralty into an action in rem.
I should also add that, in the circumstances, I am of the view that I should not, as a matter of discretion, allow the amendment to the writ sought on behalf of the plaintiff. Some items covered by the requested amendment might arguably be maritime claims; others not. I express no concluded view. The demise charter had been terminated before the amendments were sought. Difficulties might, obviously, arise if the writ were now to be amended when the charterer had ceased to be a "relevant person".
For the foregoing reasons I dismiss the motion and order the defendant to pay the plaintiff's costs.

[1992] FCA 554

06 AUGUST 1992