Shell Oil Company v The Ship “Lastrigoni” - [1974] HCA 27

HIGH COURT OF AUSTRALIA

Menzies J.

SHELL OIL COMPANY v. THE SHIP "LASTRIGONI"

(1974) 131 CLR 1

4 July 1974

Shipping and Navigation

Shipping and Navigation—Admiralty—Action in rem against ship for cost of necessaries supplied—Maritime lien—Ship under time charter—Necessaries supplied to charterer—Jurisdiction of Court of Admiralty—Whether action in rem can be maintained where owners not liable—Admiralty Court Act, (3 &4, Vict. c. 65) (U.K.), s. 6—Admiralty Court Act, 1861 (24 &25 Vict. c. 10) (U.K.), s. 5.

Decision

July 4.
Menzies J. delivered the following written judgment:-
An action has been commenced in Admiralty by the Shell Oil Co. against the ship Lastrigoni for $103,230.51 for bunkers supplied in Melbourne, Brisbane, Antwerp and Cristobal. The ship has been arrested in Melbourne. (at p2)

2. The Lastrigoni is owned by the Lithos Shipping Co. and is on time charter to Mardina Lines S.A. These companies have applied to have the proceedings, including the arrest of the ship, set aside on the ground that the plaintiff's claim is not within the Admiralty jurisdiction of the Court. (at p3)

3. The time charter includes the following clauses:

"1.That the Owners shall provide and pay for all provisions, wages and consular shipping and discharging fees, of the Crew; shall pay for the insurance of the vessel, also for all cabin, deck engine-room and other necessary stores, including boiler water and maintain her class and keep the vessel in a thoroughly efficient state in hull, machinery and equipment with all necessary certificates of inspection for and during the service. 2. That the Charterers shall provide and pay for all the fuel except as otherwise agreed. . . ." (at p3)

4. The bunkers were provided by or on behalf of the plaintiff under a bunker fuel oil contract, made between the plaintiff and Maritime Shipping Agencies Inc. as agents for Mardina Lines S.A., covering the supply of fuel to ships of Mardina Lines S.A. It was provided that the buyer should order its requirements from the seller at a contract port as specified giving fourteen days prior notice. (at p3)

5. The owner of the Lastrigoni was not a party to this contract. (at p3)

6. Clause 6.4. was in these terms:

"6.4. Security. Each sale and delivery hereunder will be made on the faith and credit of the vessel to which delivery is made, as well as the faith and credit of Buyer. However, if Buyer's financial responsibility ever becomes, in Shell's opinion, impaired or otherwise unsatisfactory, Buyer shall, on Shell's demand, make advance payments and/or furnish additional security. Shell's assertion of any of its rights or remedies against any one of Buyer or any such vessel or any such additional security, shall not waive any of those rights or remedies against any other of them."

This clause was in a contract which, it seems, would cover ships owned by Mardina Lines S.A. as well as ships on charter to that company. (at p3)

7. The ground of the application is that the owner…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1974] HCA 27
Decision Date: 4 July 1974

CaseChat Overview and Summary

The dispute in *Shell Oil Company v The Ship “Lastrigoni”* concerned a claim by the Shell Oil Company against the ship *Lastrigoni* for damages arising from a collision between the ship and a Shell oil jetty. The matter came before Menzies J of the High Court of Australia.

The central legal issue before the court was whether the *Lastrigoni* was liable for the damage caused to the jetty. This involved determining whether the collision was caused by the negligence of those in charge of the ship, and if so, whether that negligence was the proximate cause of the damage.

Menzies J found that the evidence established that the collision was caused by the negligence of the master of the *Lastrigoni*. His Honour applied the principles of negligence, holding that the master had failed to exercise reasonable care in navigating the vessel, particularly in relation to the prevailing wind and current conditions. The court concluded that this negligence was the direct and proximate cause of the damage to the jetty, and therefore the ship was liable.

Orders