Ssangyoung Australia Pty Ltd v Spliethoffs Bevrachtingskantoor B.V

[1994] FCA 610

JUDGMENT No. ,..km. .------ ro J 99

NOT FOR DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA	1
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	) NG 152 of 1994
IN ADMIRALTY	1

BETWEEN: SSANGYONG AUSTRALIA PTY LTD

Applicant

and

SPLIETHOFF'S
BEVRACHTINGSKANTOOR B.V.

First Respondent

and

SCHEEPVAARTONDERNEMING
PARELGRACHT C.V.
SCHEEPVAARTONDERNEMING
LOOIERSGRACHT C.V.
SCHEEPVAARTONDERNEMING
POOLGRACHT C.V.
SCHEEPVAARTONDERNEMING
LEMMERGRACHT C.V.

Second Respondent

and

SSANGYONG CORPORATION

Third Respondent

CORAM: Lindgren J

PLACE: Sydney

DATE: 23 August 1994

at that time was, I was told, in Melbourne and would be leaving Melbourne on the

REASONS FOR JUDGMENT

I have llsted this today for the giv~ng of reasons for judgment. The matter came before me in the duty judge llst first on last Thursday 18 August. At that time the applicant sought to file a notice of motion which was directed to enabling it to use information which it had obtained on discovery m these proceedlngs for the purpose of enabling it ultimately to issue proceed~ngs d~rected to the arrest of the vessel "Lemmergracht" which

evening of Friday 19 August. Mr Conway, solicitor, appeared for the applicant. The
application was made ex parte.

Mr Conway said that the applicant had, m the course of discovery in these proceedings, become aware of facts which suggested fraud on the part of the first and second and indeed the third trespondents. It emerged that the amount in question in relation to that particular vessel was $3,133 and I indicated that if my assistance was necessary at all, I would not be prepared to accede to the ex parte application to enable the arrest of the vessel over an amount of that size. I was not, however, convinced that my aid was necessary. Mr Conway said that counsel was briefed to settle the amendments to the existing pleading appropriate to plead the fraud. I indicated that if a further application was to be made that could be made the following morning.

None was made then but late on Friday 19 August my associate was approached with a vlew to having the proceedings listed again and the proceedings were listed before me at 4.00 pm. On this occasion there was no further affidavit before the Court but Mr Conway, representing the applicant, said from the Bar table that another vessel involved in the litigation had been located in England in respect of which the total amount of damages sought by his client in the pendlng proceedings was much larger, namely $148,920.42. That vessel was the "Laur~ergracht" which was s a ~ d to be owned by the first named second respondent. I should perhaps have mentioned that the "Lemmergracht" was said to be owned by the fourth named second respondent. It first appeared to me that perhaps what I was being asked to do was in some way to authorise proceedlngs to

what was sought and that what was sought was that I merely facllitate the use of the	effect an arrest of the ship in England but Mr Conway made it quite clear that is not
information which he had obtained on discovery in order to obtain the issue of a writ in this Court against the "Lauriergracht" w~th a view to that writ being transmitted to London and relied upon for the purpose of issuing proceedlngs in England for the arrest of the ship.
Aga~n, I was not persuaded by Mr Conway that 1 should take that course but I did adjourn the matter into private chambers so that I could read more carefully the affidavit and consider the matter. 1 d ~ d thls and I informed Mr Conway by telephone at about 5.45 pm on Friday that I would not make the orders whlch he was seeking and that reasons would be given this week. I should record that in view of the lndlcatlon which I had given on Thursday 18 August no notlce of motlon was filed on that occasion, but oa the second day, that 1s Fnday 19 August, a notlce of motlon was filed directed to rellef granting the applicant leave to lssue proceedings in relying on information obtained
on d~scovery in these proceedlngs.
According to the statement of claim the proceed~ngs are brought by the applicant against the first respondent and all four second respondents as partles which agreed to carry a number of consignments of rolled steel on vessels owned or operated by them, that is the first respondent andtor the second respondents from ports in South Korea to various ports m Australia and it 1s pleaded that they, that is the first andlor second respondents issued bills of ladlng in respect of those consignments. It 1s also pleaded, m effect, that they were "clean bills of lad~ng" and that the applicant was, in respect of each consignment, the owner or alternatrvely the consignee of the goods and is entitled to claim m respect of any loss of or damage to them.
Particulars of the shipments are glven in the first schedule to the statement of clalm. The causes of actlon which are personal causes of action and which are pleaded m the statement of clalm are causes of action for breach of contract (paragraphs 8 and Y), breach of obligation as a ba~lee (paragraphs 10 and I l ) and breach of a duty of care (paragraphs 12-14). It is alleged, of course, that the goods arrived in Australia in defectlve condition. The cause of actlon agalnst the thlrd respondent, which 1s the seller,
1s an actlon for breach of contract and in particular breach of the implied contractual
term that the goods as dellvered would be of merchantable quality.
The authority for issulng proceedings in rem is found now in the Admiralty Act 1988 (Cth) and a seems to be that the causes of actlon or at least some of them pleaded constitute general mantime claims w~thln the definltlon glven in paragraph (e) of sub-
section 4(3) of the Admiralty Act 1988 in that they are "a cla~m for loss of, or damage
to, goods carried by a ship". It may be that the claims fall within other paragraphs as well.
The authority for commencement of an actlon in rem against a shlp is found relevantly In section 17 of the Act. I will not set out section 17 but it seems to me that on the foobng .of the existing pleaded causes of action or some of them there 1s authority for commencement of an action in rem and that it IS not necessary that a fraud, that is to say an add~tlonal cause of action in fraud, be pleaded to ground the issue of the writ in rem.
It may be that the applicant will w~sh to amend the statement of claim in order to plead fraud and in my vlew it can do that without the necessity of the Court's leave to use the information obtained on discovery. It has discovered mater~al, it says, which goes to establish fraud and which, as I have sa~d, it would be ent~tled to use within the existing proceedings by way of amendment to the statement of clalm to plead fraud against the existing respondents. That would not be an improper use of what the applicant has discovered and would merely involve an enlargement of the causes of actlon presently pleaded. The applicant would be well advlsed to attend to amendment of its pleading and to seek leave to file an amended statement of claim.
The general nature of the case in fraud which the applicant will wsh to make 1s ind~cated
by the case, Hunter Gram Ptv Lim~ted v Hvundal Merchant Marme Co. Limited (1993)
will not stay to discuss the case but I agree with him that the facts whlch have come to
117 ALR 507 for whlch I am Indebted to Mr Conway, the sol~citor for the apphcant. I
light in thls present case have a remarkable s~rnilanty, in some respects at least, with the facts of that case. That, of course, is not to suggest any concluded vlew as to whether the applicant will succeed in establishing fraud, but it certainly lends some support to the prima fac~e vlew that evidence of fraud has been dscovered. I wl1 say a word or two further about this.
The ev~dence whlch was turn~shed last Thursday, 18 August, was related, as I said, to the vessel "Lemmergracht", and to the fourth named second respondent. If for no other

reason I would not have been willing to grant the rellef sought on the Fnday because there was no affidavit evidence on, as Mr Conway readily acknowledged, in relation to the other vessel, and it seemed to me that time would not permlt that evidence to be obtained, slnce the vessel was, according to Mr Conway, due to leave England on the Sunday evening.

But returning to the ev~dence which a before me in relat~on to the "Lemmergracht", that evidence shows that a clean bill of ladlng was issued on 3 July 1993 in relation to 18 colls of galvanised iron, the port of loadlng being Pohang, Korea, the port of discharge to be Fremantle, Australia. The bill of lading was number SPLFPF93-07-013. There was annexed to Mr Conway's affidavit sworn 18 August 1994 a report from Robins MBS Manne indicating that thelr survey dated 4 August 1993 showed lmpact damage done to the coils. Photographs were annexed. Where the allegation of fraud arises is shown by the Mate's Receipt, a copy of whlch 1s annexure "C' to Mr Conway's affidavit, and a survey report by Hyopsung Shipping Corporation dated 5 July 1993. The Mate's Receipt, which refers to the bill of ladlng and to the cargo, records that "two coils (number 0241 and 0244) were cnmpled/buckled at outer rim . . . prlor to loading".

Similarly the survey report of Hyopsung Shlpping Corporation dated 5 July 1993 records similarly and also notes that the damage was properly noted in the Mate's Receipt. Remarkably, annexure " E to Mr Conway's affidavit 1s a "letter of indemnity" issued by the seller, that is to say, by the third respondent. Although the copy is unfortunately not complete in that it does not record the damage to the coils to which it refers, it does

contain the followng: 

"WITH A VIEW HOWEVER TO AVOID ANY MISUNDERSTANDING WITH THIRD PARTIES WE REQUEST THAT NO MENTION BE MADE OF THE ABOVE IN THE BILLS OF LADING COVERING THESE GOODS.

ON THE OTHER HAND WE HEREWITH UNDERTAKE UNCONDITIONALLY TO INDEMNIFY THE MASTER OF THE STEAMER, THE OWNERS AND THEIR REPRESENTATIVES AGAINST ALL LOSSES

OR DAMAGES OF ANY NATURE WHATSOEVER WHICH MIGHT ARISE FROM THE ISSUANCE OF CLEAN BILLS OF LADING FOR THE SAID GOODS, AND DO HEREBY IRREVOCABLY AUTHORISE THE SAID MASTER, SHIP OWNERS AND REPRESENTATIVES IN THE EVENT OF THIRD PARTIES AND FORCING ANY CLAIMS AGAINST THEM TO MAKE ANY ARRANGEMENTS WITH SAID THIRD PARTIES FOR OUR ACCOUNT, WHICH THE SAID MASTER, SHIP OWNERS OR REPRESENTATIVES, MAY DEEM ADVISABLE'.

In summary, apparently the seller, the thlrd respondent, was made aware that it was

proposed that a clean bill of lading not be issued, but specifically requested that a clean
bill of lading be Issued upon the seller's givlng the indemnity.

Of course what I am saying, I am saying by reference to the evidence of one party only. Moreover it is true, as Mr Conway correctly pomts out, that there is a discrepancy between the numbers mentioned in the Mate's Receipt and the survey report of Hyopsung Shipping Corporation, and the numbers of the co~ls which were discovered to be damaged apparently in Australia. But when these matters are put to one side, it has to be said that Mr Conway s at least "on the scent" of fraud.

As I have indicated, I refused the rellef sought on Thursday because of the smallness of the amount at stake and because I was not persuaded that my assistance was necessary

for the applicant to achieve its objective of commencing proceed~ngs	in rem.
proceedings m personam by alleging fraud. A reason for declining the rehef is that it is	I have indicated that m my vlew it would be open to the appllcant to amend the existing
open to the appllcant to lssue proceed~ngs in rem, even based on the emsting causes of actlon.
I think I have indicated adequately the reasons why 1 declined the rellef sought on Friday's ex parte application as well. Two further matters should be said about that. One, which I have already referred to, is that there was no evldence whatever in relation to the ship "Lauriergracht". The other matter which should be mentioned is that it was open to the applicant to proceed directly before the United Kingdom courts in any event. It may or may not be the case that the applicant would be aided by first having proceedings in rem commenced here in order to forward them to London. There was no evldence in that respect, although Mr Conway's submission was that there would be a saving in costs.
For all the reasons Indicated above, I was not dlsposed to grant the relief sought on either date, although the reasons which I have given today may be of some assistance to the applicant.
In relation to the notice of motion filed in court on Friday, 19 August 1994, and then dealt with, I dismiss that motion.

I certlfy that this and the preceding 6 pages are a true copy of the Reasons for Judgment

of the Honourable Just~ce Lindgren

Associate: /6Af-Jy Dated: / JF& ' / Y Y ~

m:	18,19 August 1994
W :	Sydney

P m : 23 August 1994

BpOearances :  Mr R. Conway of Levingstons appeared for the applicant.